UNITED STATES
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SECURITIES AND EXCHANGE COMMISSION
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Washington, DC 20549
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FORM 10-Q
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(Mark One)
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[X] |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended:
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June 30, 2013
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OR
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[ ] |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from
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to
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Commission file number:
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000-52694
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QUAINT OAK BANCORP, INC.
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(Exact Name of Registrant as Specified in Its Charter)
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Pennsylvania
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35-2293957
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(State or Other Jurisdiction of
Incorporation or Organization)
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(IRS Employer Identification No.)
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501 Knowles Avenue, Southampton, Pennsylvania 18966
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(Address of Principal Executive Offices)
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(215) 364-4059
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(Registrant’s Telephone Number, Including Area Code)
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Not Applicable | ||||
(Former name, former address and former fiscal year, if changed since last report)
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
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Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes [X] No [ ]
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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.:
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Large accelerated filer [ ] |
Accelerated filer [ ]
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Non-accelerated filer [ ] |
Smaller reporting company [X]
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(Do not check if a smaller reporting company)
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes [ ] No [X]
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Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: As of August 12, 2013, 965,374 shares of the Registrant's common stock were issued and outstanding.
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PART I - FINANCIAL INFORMATION
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Page
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Item 1 - Financial Statements
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Consolidated Balance Sheets as of June 30, 2013 and
December 31, 2012 (Unaudited)
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1 | |||
Consolidated Statements of Income for the Three and Six Months
Ended June 30, 2013 and 2012 (Unaudited)
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2 | |||
Consolidated Statements of Comprehensive Income for the Three
and Six Months Ended June 30, 2013 and 2012 (Unaudited)
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3 | |||
Consolidated Statement of Stockholders’ Equity for the Six Months
Ended June 30, 2013 (Unaudited)
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4 | |||
Consolidated Statements of Cash Flows for the Six Months
Ended June 30, 2013 and 2012 (Unaudited)
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5 | |||
Notes to the Unaudited Consolidated Financial Statements
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6 | |||
Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations
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29 | |||
Item 3 - Quantitative and Qualitative Disclosures About Market Risk
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40 | |||
Item 4 - Controls and Procedures
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40 | |||
PART II - OTHER INFORMATION
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Item 1 - Legal Proceedings
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41 | |||
Item 1A - Risk Factors
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41 | |||
Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds
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41 | |||
Item 3 - Defaults Upon Senior Securities
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41 | |||
Item 4 - Mine Safety Disclosures
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41 | |||
Item 5 - Other Information
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42 | |||
Item 6 - Exhibits
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42 | |||
SIGNATURES
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At June 30,
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At December 31,
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|||||||||||||||||
2013
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2012
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Assets
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(In thousands, except share data)
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|||||||||||||||||
Due from banks, non-interest-bearing
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$ | 2,119 | $ | 1,629 | ||||||||||||||
Due from banks, interest-bearing
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11,158 | 10,771 | ||||||||||||||||
Cash and cash equivalents
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13,277 | 12,400 | ||||||||||||||||
Investment in interest-earning time deposits
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7,920 | 8,132 | ||||||||||||||||
Investment securities available for sale at fair value
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3,478 | 3,994 | ||||||||||||||||
Loans held for sale
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3,153 | 4,875 | ||||||||||||||||
Loans receivable, net of allowance for loan losses
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||||||||||||||||||
(2013 $952; 2012 $860) | 92,434 | 84,291 | ||||||||||||||||
Accrued interest receivable
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678 | 657 | ||||||||||||||||
Investment in Federal Home Loan Bank stock, at cost
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260 | 437 | ||||||||||||||||
Premises and equipment, net
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1,670 | 1,608 | ||||||||||||||||
Other real estate owned, net
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187 | 170 | ||||||||||||||||
Prepaid expenses and other assets
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712 | 811 | ||||||||||||||||
Total Assets
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$ | 123,769 | $ | 117,375 | ||||||||||||||
Liabilities and Stockholders’ Equity
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||||||||||||||||||
Liabilities
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||||||||||||||||||
Deposits, interest-bearing
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$ | 104,548 | $ | 97,038 | ||||||||||||||
Federal Home Loan Bank advances
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1,000 | 2,000 | ||||||||||||||||
Accrued interest payable
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75 | 81 | ||||||||||||||||
Advances from borrowers for taxes and insurance
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991 | 991 | ||||||||||||||||
Accrued expenses and other liabilities
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256 | 428 | ||||||||||||||||
Total Liabilities
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106,870 | 100,538 | ||||||||||||||||
Stockholders’ Equity
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||||||||||||||||||
Preferred stock – $0.01 par value, 1,000,000 shares authorized; none issued or outstanding
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- | - | ||||||||||||||||
Common stock – $0.01 par value; 9,000,000 shares
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authorized; 1,388,625 issued; 965,374 and 983,821 outstanding at June 30, 2013 and December 31, 2012, respectively
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14 | 14 | ||||||||||||||||
Additional paid-in capital
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13,572 | 13,559 | ||||||||||||||||
Treasury stock, at cost: 2013 423,251 shares; 2012 404,804 shares
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(3,997 | ) | (3,716 | ) | ||||||||||||||
Unallocated common stock held by: | ||||||||||||||||||
Employee Stock Ownership Plan (ESOP)
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(571 | ) | (623 | ) | ||||||||||||||
Recognition & Retention Plan Trust (RRP)
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(120 | ) | (200 | ) | ||||||||||||||
Accumulated other comprehensive income
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33 | 60 | ||||||||||||||||
Retained earnings
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7,968 | 7,743 | ||||||||||||||||
Total Stockholders' Equity
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16,899 | 16,837 | ||||||||||||||||
Total Liabilities and Stockholders’ Equity
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$ | 123,769 | $ | 117,375 |
For the Three
Months Ended
June 30,
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For the Six
Months Ended
June 30,
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|||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
(In thousands, except for share data) | ||||||||||||||||
Interest Income | ||||||||||||||||
Interest on loans
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$ | 1,485 | $ | 1,376 | $ | 2,915 | $ | 2,679 | ||||||||
Interest and dividends on short-term investments and investment
securities
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67 | 92 | 131 | 224 | ||||||||||||
Total Interest Income
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1,552 | 1,468 | 3,046 | 2,903 |
Interest Expense | ||||||||||||||||
Interest on deposits
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421 | 392 | 835 | 803 | ||||||||||||
Interest on Federal Home Loan Bank advances
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14 | 32 | 35 | 72 | ||||||||||||
Total Interest Expense
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435 | 424 | 870 | 875 | ||||||||||||
Net Interest Income
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1,117 | 1,044 | 2,176 | 2,028 |
Provision for Loan Losses
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55 | 79 | 107 | 150 | ||||||||||||
Net Interest Income after Provision for Loan Losses | 1,062 | 965 | 2,069 | 1,878 |
Non-Interest Income | ||||||||||||||||
Mortgage banking and title abstract fees
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105 | 56 | 249 | 126 | ||||||||||||
Other fees and services charges
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15 | 13 | 23 | 25 | ||||||||||||
Net gain on sales of loans
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282 | 114 | 469 | 195 | ||||||||||||
Gain on sale of SBA loan
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- | - | - | 32 | ||||||||||||
Gain on sale of investment securities
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- | 331 | - | 331 | ||||||||||||
Loss on sale of other real estate owned
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(10 | ) | - | (10 | ) | (6 | ) | |||||||||
Other
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7 | 8 | 15 | 18 | ||||||||||||
Total Non-Interest Income
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399 | 522 | 746 | 721 |
Non-Interest Expense
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Salaries and employee benefits
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749 | 523 | 1,454 | 1,016 | |||||||||||||
Directors' fees and expenses
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56 | 55 | 115 | 110 | |||||||||||||
Occupancy and equipment
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126 | 84 | 234 | 159 | |||||||||||||
Professional fees
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107 | 91 | 207 | 169 | |||||||||||||
FDIC deposit insurance assessment
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5 | 33 | 35 | 65 | |||||||||||||
Other real estate owned expense
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20 | 2 | 29 | 10 |
Advertising
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12 | 15 | 38 | 29 | ||||||||||||
Other
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113 | 75 | 204 | 143 | ||||||||||||
Total Non-Interest Expense
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1,188 | 878 | 2,316 | 1,701 | ||||||||||||
Income before Income Taxes
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273 | 609 | 499 | 898 | ||||||||||||
Income Taxes
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100 | 236 | 186 | 349 | ||||||||||||
Net Income
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$ | 173 | $ | 373 | $ | 313 | $ | 549 | ||||||||
Earnings per share - basic
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$ | 0.20 | $ | 0.42 | $ | 0.35 | $ | 0.62 | ||||||||
Average shares outstanding - basic
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886,437 | 886,437 | 889,534 | 883,408 | ||||||||||||
Earnings per share - diluted
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$ | 0.19 | $ | 0.42 | $ | 0.34 | $ | 0.62 | ||||||||
Average shares outstanding - diluted
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926,817 | 891,204 | 925,486 | 888,835 |
For the Three
Months Ended
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For the Six
Months Ended
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2013 | 2012 | 2013 | 2012 | |||||||||||||
(In thousands)
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Net Income
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$ | 173 | $ | 373 | $ | 313 | $ | 549 | ||||||||
Other Comprehensive Income (Loss):
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Unrealized gains (losses) on investment securities available-for-sale
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(64 | ) | (3 | ) | (41 | ) | 50 | |||||||||
Income tax effect
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21 | 1 | 14 | (17 | ) | |||||||||||
Reclassification adjustment for transfer of investment
securities from held-to-maturity to available-for-sale
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- | - | - | 351 | ||||||||||||
Income tax effect | - | - | - | (120 | ) | |||||||||||
Reclassification adjustment for gains on sale of
investment securities included in net income
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- | (331 | ) | - | (331 | ) | ||||||||||
Income tax effect | - | 113 | - | 113 | ||||||||||||
Net other comprehensive income (loss) | (43 | ) | (220 | ) | (27 | ) | 46 | |||||||||
Total Comprehensive Income | $ | 130 | $ | 153 | $ | 286 | $ | 595 |
Six Months Ended June 30, 2013 | ||||||||||||||||||||||||||||||||
Unallocated | ||||||||||||||||||||||||||||||||
Common Stock | Common | Accumulated | ||||||||||||||||||||||||||||||
Number of | Additional | Stock Held | Other | Total | ||||||||||||||||||||||||||||
Shares | Paid-in | Treasury | by Benefit | Comprehensive | Retained | Stockholders' | ||||||||||||||||||||||||||
Outstanding | Amount | Capital | Stock | Plans | Income | Earnings | Equity | |||||||||||||||||||||||||
(In thousands, except share data) | ||||||||||||||||||||||||||||||||
BALANCE – December 31,
2012
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983,821 | $ | 14 | $ | 13,559 | $ | (3,716 | ) | $ | (823 | ) | $ | 60 | $ | 7,743 | $ | 16,837 | |||||||||||||||
Common stock released by
ESOP
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33 | 52 | 85 | |||||||||||||||||||||||||||||
Treasury stock purchased
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(18,447 | ) | (281 | ) | (281 | ) | ||||||||||||||||||||||||||
Stock based compensation
expense
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60 | 60 | ||||||||||||||||||||||||||||||
Release of 8,544 vested RRP
shares
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(80 | ) | 80 | - | ||||||||||||||||||||||||||||
Cash dividends declared
($0.09 per share)
|
(88 | ) | (88 | ) | ||||||||||||||||||||||||||||
Net income
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313 | 313 | ||||||||||||||||||||||||||||||
Other comprehensive loss
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(27 | ) | (27 | ) | ||||||||||||||||||||||||||||
BALANCE –June 30, 2013
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965,374 | $ | 14 | $ | 13,572 | $ | (3,997 | ) | $ | (691 | ) | $ | 33 | $ | 7,968 | $ | 16,899 |
For the Six Months Ended
June 30,
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||||||||
2013 | 2012 | |||||||
(In thousands) | ||||||||
Cash Flows from Operating Activities | ||||||||
Net income
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$ | 313 | $ | 549 | ||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
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||||||||
Provision for loan losses
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107 | 150 | ||||||
Depreciation expense
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64 | 45 | ||||||
Net accretion of securities discounts
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(2 | ) | (81 | ) | ||||
Amortization of deferred loan fees and costs
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63 | 16 | ||||||
Stock-based compensation expense
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145 | 112 | ||||||
Gain on the sale of loans held for sale
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(469 | ) | (195 | ) | ||||
Gain on the sale of securities available for sale
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- | (331 | ) | |||||
Gain on the sale of SBA loan
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- | (32 | ) | |||||
Loss on sale of other real estate owned
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10 | 6 | ||||||
Loans held for sale-originations
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(26,097 | ) | (10,270 | ) | ||||
Loans held for sale-proceeds
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28,288 | 8,790 | ||||||
Changes in assets and liabilities which provided (used) cash:
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||||||||
Accrued interest receivable
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(21 | ) | (96 | ) | ||||
Prepaid expenses and other assets
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114 | (56 | ) | |||||
Accrued interest payable
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(6 | ) | (13 | ) | ||||
Accrued expenses and other liabilities
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(172 | ) | (11 | ) | ||||
Net Cash Provided by (Used in) Operating Activities
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2,337 | (1,417 | ) |
Net decrease (increase) in investment in interest-earning time deposits
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212 | (7 | ) | |||||
Purchase of investment securities available for sale
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(24 | ) | (528 | ) | ||||
Proceeds from calls of investment securities available for sale
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500 | 1,588 | ||||||
Proceeds from the sale of securities available for sale
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- | 3,911 | ||||||
Principal payments received on mortgage-backed securities held to maturity
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- | 299 | ||||||
Net increase in loans receivable
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(8,344 | ) | (3,865 | ) | ||||
Gross decrease in investment in Federal Home Loan Bank stock
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177 | 60 | ||||||
Proceeds from the sale of other real estate owned
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45 | 154 | ||||||
Capitalized expenditures on other real estate owned
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(41 | ) | - | |||||
Purchase of premises and equipment
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(126 | ) | (449 | ) | ||||
Net Cash (Used in) Provided by Investing Activities
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(7,601 | ) | 1,163 |
Net increase (decrease) in deposits
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7,510 | (921 | ) | |||||
Decrease in Federal Homes Loan Bank advances
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(1,000 | ) | (1,000 | ) | ||||
Dividends paid
|
(88 | ) | (74 | ) | ||||
Purchase of treasury stock
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(281 | ) | (33 | ) | ||||
Decrease in advances from borrowers for taxes and insurance
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(- | ) | (129 | ) | ||||
Net Cash Provided by (Used in) Financing Activities
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6,141 | (2,157 | ) | |||||
Net Increase (Decrease) in Cash and Cash Equivalents | 877 | (2,411 | ) |
Cash and Cash Equivalents – Beginning of Year
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12,400 | 11,687 | ||||||
Cash and Cash Equivalents – End of Year
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$ | 13,277 | $ | 9,276 |
Cash payments for interest
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$ | 876 | $ | 888 | ||||
Cash payments for income taxes
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$ | 130 | $ | 316 | ||||
Transfer of loans to other real estate owned
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$ | 31 | $ | - | ||||
Transfer of mortgage-backed securities held to maturity to investment
and mortgage-backed securities available for sale
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$ | - | $ | 3,591 |
For the Three Months Ended
June 30,
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For the Six Months Ended
June 30,
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2013
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2012
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2013
|
2012
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Net Income
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$ | 173,000 | $ | 373,000 | $ | 313,000 | $ | 549,000 | ||||||||
Weighted average shares outstanding – basic
|
886,437 | 886,437 | 889,534 | 883,408 | ||||||||||||
Effect of dilutive common stock equivalents
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40,380 | 4,767 | 35,952 | 5,427 | ||||||||||||
Adjusted weighted average shares outstanding – diluted
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926,817 | 891,204 | 925,486 | 888,835 | ||||||||||||
Basic earnings per share
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$ | 0.20 | $ | 0.42 | $ | 0.35 | $ | 0.62 | ||||||||
Diluted earnings per share
|
$ | 0.19 | $ | 0.42 | $ | 0.34 | $ | 0.62 |
June 30,
2013
|
December 31,
2012
|
||||||||
(In Thousands)
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|||||||||
Due in one year or less
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$ | 2,570 | $ | 3,325 | |||||
Due after one year through five years
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5,350 | 4,807 | |||||||
$ | 7,920 | $ | 8,132 |
June 30, 2013
|
||||||||||||||||
Amortized Cost
|
Gross Unrealized Gains
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Gross Unrealized Losses
|
Fair Value
|
|||||||||||||
Corporate securities
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$ | 1,749 | $ | 73 | $ | - | $ | 1,822 | ||||||||
Short-term bond fund
|
1,147 | - | (8 | ) | 1,139 | |||||||||||
Limited-term bond fund
|
532 | - | (15 | ) | 517 | |||||||||||
$ | 3,428 | $ | 73 | $ | (23 | ) | $ | 3,478 |
December 31, 2012
|
||||||||||||||||
Amortized Cost
|
Gross Unrealized Gains
|
Gross Unrealized Losses
|
Fair Value
|
|||||||||||||
U.S. Government agency securities
|
$ | 500 | $ | 1 | $ | - | $ | 501 | ||||||||
Corporate securities
|
1,747 | 81 | (2 | ) | 1,826 | |||||||||||
Short-term bond fund
|
1,127 | 15 | - | 1,142 | ||||||||||||
Limited-term bond fund
|
528 | - | (3 | ) | 525 | |||||||||||
$ | 3,902 | $ | 97 | $ | (5 | ) | $ | 3,994 | ||||||||
Amortized Cost
|
Fair Value
|
||||||||
(In Thousands)
|
|||||||||
Due in one year or less
|
$ | - | $ | - | |||||
Due after one year through five years
|
1,749 | 1,822 | |||||||
Due after five years through ten years
|
- | - | |||||||
$ | 1,749 | $ | 1,822 |
June 30, 2013
|
||||||||||||||||||||||||||||
Less than Twelve Months
|
Twelve Months or Greater
|
Total
|
||||||||||||||||||||||||||
Gross
|
Gross
|
Gross
|
||||||||||||||||||||||||||
Number of
|
Unrealized
|
Unrealized
|
Unrealized
|
|||||||||||||||||||||||||
Securities
|
Fair Value
|
Losses
|
Fair Value
|
Losses
|
Fair Value
|
Losses
|
||||||||||||||||||||||
Short-term bond fund
|
1 | $ | 1,139 | $ | (8 | ) | $ | - | $ | - | $ | 1,139 | $ | (8 | ) | |||||||||||||
Limited-term bond fund
|
1 | - | - | 517 | (15 | ) | 517 | (15 | ) | |||||||||||||||||||
Total
|
2 | $ | 1,139 | $ | - | $ | 517 | $ | (15 | ) | $ | 1,656 | $ | (23 | ) |
December 31, 2012
|
||||||||||||||||||||||||||||
Less than Twelve Months
|
Twelve Months or Greater
|
Total
|
||||||||||||||||||||||||||
Gross
|
Gross
|
Gross
|
||||||||||||||||||||||||||
Number of
|
Unrealized
|
Unrealized
|
Unrealized
|
|||||||||||||||||||||||||
Securities
|
Fair Value
|
Losses
|
Fair Value
|
Losses
|
Fair Value
|
Losses
|
||||||||||||||||||||||
Corporate securities
|
1 | $ | - | $ | - | $ | 248 | $ | (2 | ) | $ | 248 | $ | (2 | ) | |||||||||||||
Limited-term bond fund
|
1 | - | - | 525 | (3 | ) | 525 | (3 | ) | |||||||||||||||||||
Total
|
2 | $ | - | $ | - | $ | 773 | $ | (5 | ) | $ | 773 | $ | (5 | ) |
June 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
Real estate loans:
|
|||||||||
One-to-four family residential:
|
|||||||||
Owner occupied
|
$ | 9,349 | $ | 10,272 | |||||
Non-owner occupied
|
37,792 | 35,118 | |||||||
Total one-to-four family residential
|
47,141 | 45,390 | |||||||
Multi-family (five or more) residential
|
3,803 | 3,315 | |||||||
Commercial real estate
|
20,745 | 18,694 | |||||||
Commercial lines of credit
|
1,747 | 1,901 | |||||||
Construction
|
14,586 | 9,765 | |||||||
Home equity loans
|
5,469 | 6,029 | |||||||
Total real estate loans
|
93,491 | 85,094 | |||||||
Auto and equipment loans
|
72 | 93 | |||||||
Loans secured by deposits
|
34 | 69 | |||||||
Total Loans
|
93,597 | 85,256 |
Deferred loan fees and costs
|
(211 | ) | (105 | ) | ||||
Allowance for loan losses
|
(952 | ) | (860 | ) | ||||
Net Loans | $ | 92,434 | $ | 84,291 |
June 30, 2013
|
||||||||||||||||||||
Pass
|
Special Mention
|
Substandard
|
Doubtful
|
Total
|
||||||||||||||||
One-to-four family residential owner occupied
|
$ | 8,551 | $ | 420 | $ | 68 | $ | 310 | $ | 9,349 | ||||||||||
One-to-four family residential non-owner occupied
|
35,873 | 785 | 642 | 492 | 37,792 | |||||||||||||||
Multi-family residential
|
3,803 | - | - | - | 3,803 | |||||||||||||||
Commercial real estate and lines of credit
|
21,759 | 319 | 302 | 112 | 22,492 | |||||||||||||||
Construction
|
14,586 | - | - | - | 14,586 | |||||||||||||||
Home equity
|
5,078 | - | 294 | 97 | 5,469 | |||||||||||||||
Consumer non-real estate
|
101 | - | - | 5 | 106 | |||||||||||||||
$ | 89,751 | $ | 1,524 | $ | 1,306 | $ | 1,016 | $ | 93,597 |
December 31, 2012
|
||||||||||||||||||||
Pass
|
Special Mention
|
Substandard
|
Doubtful
|
Total
|
||||||||||||||||
One-to-four family residential owner occupied
|
$ | 9,641 | $ | 500 | $ | 72 | $ | 59 | $ | 10,272 | ||||||||||
One-to-four family residential non-owner occupied
|
34,328 | 95 | 504 | 191 | 35,118 | |||||||||||||||
Multi-family residential
|
3,315 | - | - | - | 3,315 | |||||||||||||||
Commercial real estate and lines of credit
|
19,536 | 565 | 364 | 130 | 20,595 | |||||||||||||||
Construction
|
9,765 | - | - | - | 9,765 | |||||||||||||||
Home equity
|
5,295 | 428 | 268 | 38 | 6,029 | |||||||||||||||
Consumer non-real estate
|
156 | - | 6 | - | 162 | |||||||||||||||
$ | 82,036 | $ | 1,588 | $ | 1,214 | $ | 418 | $ | 85,256 |
June 30, 2013
|
||||||||||||||||||||
Recorded Investment
|
Unpaid Principal Balance
|
Related Allowance
|
Average Recorded Investment
|
Interest
Income Recognized
|
||||||||||||||||
With no related allowance recorded:
|
||||||||||||||||||||
One-to-four family residential owner occupied
|
$ | 378 | $ | 378 | $ | - | $ | 382 | $ | 5 | ||||||||||
One-to-four family residential non-owner occupied
|
702 | 702 | - | 708 | 30 | |||||||||||||||
Multi-family residential
|
- | - | - | - | - | |||||||||||||||
Commercial real estate and lines of credit
|
105 | 105 | - | 106 | 8 | |||||||||||||||
Construction
|
- | - | - | - | - | |||||||||||||||
Home equity
|
118 | 118 | - | 120 | 4 | |||||||||||||||
Consumer non-real estate
|
5 | 5 | - | 5 | - | |||||||||||||||
With an allowance recorded:
|
||||||||||||||||||||
One-to-four family residential owner occupied
|
$ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
One-to-four family residential non-owner occupied
|
432 | 432 | 61 | 435 | 1 | |||||||||||||||
Multi-family residential
|
- | - | - | - | - | |||||||||||||||
Commercial real estate and lines of credit
|
309 | 309 | 25 | 314 | 4 | |||||||||||||||
Construction
|
- | - | - | - | - | |||||||||||||||
Home equity
|
73 | 73 | 73 | 73 | - | |||||||||||||||
Consumer non-real estate
|
- | - | - | - | - | |||||||||||||||
Total:
|
||||||||||||||||||||
One-to-four family residential owner occupied
|
$ | 378 | $ | 378 | $ | - | $ | 382 | $ | 5 | ||||||||||
One-to-four family residential non-owner occupied
|
1,134 | 1,134 | 61 | 1,143 | 31 | |||||||||||||||
Multi-family residential
|
- | - | - | - | - | |||||||||||||||
Commercial real estate and lines of credit
|
414 | 414 | 25 | 420 | 12 | |||||||||||||||
Construction
|
- | - | - | - | - | |||||||||||||||
Home equity
|
191 | 191 | 73 | 193 | 4 | |||||||||||||||
Consumer non-real estate
|
5 | 5 | - | 5 | - |
December 31, 2012
|
||||||||||||||||||||
Recorded Investment
|
Unpaid Principal Balance
|
Related Allowance
|
Average Recorded Investment
|
Interest
Income Recognized
|
||||||||||||||||
With no related allowance recorded:
|
||||||||||||||||||||
One-to-four family residential owner occupied
|
$ | 131 | $ | 131 | $ | - | $ | 131 | $ | 9 | ||||||||||
One-to-four family residential non-owner occupied
|
393 | 393 | - | 396 | 17 | |||||||||||||||
Multi-family residential
|
- | - | - | - | - | |||||||||||||||
Commercial real estate and lines of credit
|
130 | 130 | - | 131 | 8 | |||||||||||||||
Construction
|
- | - | - | - | - | |||||||||||||||
Home equity
|
244 | 244 | - | 246 | 14 | |||||||||||||||
Consumer non-real estate
|
6 | 6 | - | 9 | 1 | |||||||||||||||
With an allowance recorded:
|
||||||||||||||||||||
One-to-four family residential owner occupied
|
$ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
One-to-four family residential non-owner occupied
|
302 | 302 | 24 | 304 | 13 | |||||||||||||||
Multi-family residential
|
- | - | - | - | - | |||||||||||||||
Commercial real estate and lines of credit
|
364 | 364 | 88 | 366 | 15 | |||||||||||||||
Construction
|
- | - | - | - | - | |||||||||||||||
Home equity
|
62 | 62 | 28 | 64 | 4 | |||||||||||||||
Consumer non-real estate
|
- | - | - | - | - | |||||||||||||||
Total:
|
||||||||||||||||||||
One-to-four family residential owner occupied
|
$ | 131 | $ | 131 | $ | - | $ | 131 | $ | 9 | ||||||||||
One-to-four family residential non-owner occupied
|
695 | 695 | 24 | 700 | 30 | |||||||||||||||
Multi-family residential
|
- | - | - | - | - | |||||||||||||||
Commercial real estate and lines of credit
|
494 | 494 | 88 | 497 | 23 | |||||||||||||||
Construction
|
- | - | - | - | - | |||||||||||||||
Home equity
|
306 | 306 | 28 | 310 | 18 | |||||||||||||||
Consumer non-real estate
|
6 | 6 | - | 9 | 1 |
June 30, 2013
|
||||||||||||||||||||
Number of Contracts
|
Recorded Investment
|
Non-Accrual
|
Accruing
|
Related Allowance
|
||||||||||||||||
One-to-four family residential owner occupied
|
1 | $ | 68 | $ | - | $ | 68 | $ | - | |||||||||||
One-to-four family residential non-owner occupied
|
4 | 299 | - | 299 | - | |||||||||||||||
Multi-family residential
|
- | - | - | - | - | |||||||||||||||
Commercial real estate and lines of credit
|
- | - | - | - | - | |||||||||||||||
Construction
|
- | - | - | - | - | |||||||||||||||
Home equity
|
2 | 63 | - | 63 | - | |||||||||||||||
Consumer non-real estate
|
- | - | - | - | - | |||||||||||||||
Total
|
7 | $ | 430 | $ | - | $ | 430 | $ | - |
December 31, 2012
|
||||||||||||||||||||
Number of Contracts
|
Recorded Investment
|
Non-
Accrual
|
Accruing
|
Related Allowance
|
||||||||||||||||
One-to-four family residential owner occupied
|
1 | $ | 71 | $ | 71 | $ | - | $ | - | |||||||||||
One-to-four family residential non-owner occupied
|
4 | 302 | - | 302 | 10 | |||||||||||||||
Multi-family residential
|
- | - | - | - | - | |||||||||||||||
Commercial real estate and lines of credit
|
- | - | - | - | - | |||||||||||||||
Construction
|
- | - | - | - | - | |||||||||||||||
Home equity
|
3 | 245 | - | 245 | 1 | |||||||||||||||
Consumer non-real estate
|
- | - | - | - | - | |||||||||||||||
Total
|
8 | $ | 618 | $ | 71 | $ | 547 | $ | 11 |
June 30, 2013
|
||||||||||||||||||||
Current & | ||||||||||||||||||||
Past Due | Greater | |||||||||||||||||||
Less than 30 | Past Due | than 90 | Non- | |||||||||||||||||
Days | 30-89 Days | Days | Accrual |
Total
|
||||||||||||||||
One-to-four family residential owner occupied
|
$ | 68 | $ | - | $ | - | $ | - | $ | 68 | ||||||||||
One-to-four family residential non-owner occupied
|
299 | - | - | - | 299 | |||||||||||||||
Multi-family residential
|
- | - | - | - | - | |||||||||||||||
Commercial real estate and lines of credit
|
- | - | - | - | - | |||||||||||||||
Construction
|
- | - | - | - | - | |||||||||||||||
Home equity
|
63 | - | - | - | 63 | |||||||||||||||
Consumer non-real estate
|
- | - | - | - | - | |||||||||||||||
Total
|
$ | 430 | $ | - | $ | - | $ | - | $ | 430 |
June 30, 2013
|
||||||||||||||||||||||||||||||||||||
1-4 Family | 1-4 Family | Commercial | ||||||||||||||||||||||||||||||||||
Residential | Residential | Multi- | Real Estate | Consumer | ||||||||||||||||||||||||||||||||
Owner | Non-Owner | Family | and Lines of | Home | Non-Real | |||||||||||||||||||||||||||||||
Occupied | Occupied | Residential | Credit | Construction | Equity | Estate | Unallocated | Total | ||||||||||||||||||||||||||||
For the Three Months Ended June 30, 2013 | ||||||||||||||||||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||||||||||||||||||
Beginning balance
|
$ | 72 | $ | 432 | $ | 25 | $ | 173 | $ | 75 | $ | 89 | $ | 1 | $ | 45 | $ | 912 | ||||||||||||||||||
Charge-offs
|
- | (15 | ) | - | - | - | - | - | - | (15 | ) | |||||||||||||||||||||||||
Recoveries
|
- | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Provision
|
(5 | ) | 3 | (2 | ) | 4 | 20 | 21 | - | 14 | 55 | |||||||||||||||||||||||||
Ending balance
|
$ | 67 | $ | 420 | $ | 23 | $ | 177 | $ | 95 | $ | 110 | $ | 1 | $ | 59 | $ | 952 |
For the Six Months Ended June 30, 2013
|
||||||||||||||||||||||||||||||
Allowance for loan losses:
|
Beginning balance
|
$ | 77 | $ | 368 | $ | 20 | $ | 219 | $ | 63 | $ | 68 | $ | 1 | $ | 44 | $ | 860 | ||||||||||||||||||
Charge-offs
|
- | (15 | ) | - | - | - | - | - | - | (15 | ) | |||||||||||||||||||||||||
Recoveries
|
- | - | - | - | - | - | - | - | - |
Provision
|
(9 | ) | 66 | 3 | (42 | ) | 32 | 42 | - | 15 | 107 | |||||||||||||||||||||||||
Ending balance
|
$ | 67 | $ | 420 | $ | 23 | $ | 177 | $ | 95 | $ | 110 | $ | 1 | $ | 59 | $ | 952 | ||||||||||||||||||
Ending balance evaluated
|
||||||||||||||||||||||||||||||||||||
for impairment:
|
||||||||||||||||||||||||||||||||||||
Individually
|
$ | - | $ | 61 | $ | - | $ | 25 | $ | - | $ | 73 | $ | - | $ | - | $ | 159 | ||||||||||||||||||
Collectively
|
$ | 67 | $ | 359 | $ | 23 | $ | 152 | $ | 95 | $ | 37 | $ | 1 | $ | 59 | $ | 793 | ||||||||||||||||||
Loans receivable: | ||||||||||||||||||||||||||||||||||||
Ending balance | $ | 9,349 | $ | 37,792 | $ | 3,803 | $ | 22,492 | $ | 14,586 | $ | 5,469 | $ | 106 | $ | - | $ | 93,597 | ||||||||||||||||||
Ending balance evaluated
|
for impairment:
|
|||||||||||||||||||||||||||||||||||||
Individually
|
$ | 378 | $ | 1,134 | $ | - | $ | 414 | $ | - | $ | 191 | $ | 5 | $ | - | $ | 2,122 | |||||||||||||||||||
Collectively
|
$ | 8,971 | $ | 36,658 | $ | 3,803 | $ | 22,078 | $ | 14,486 | $ | 5,278 | $ | 101 | $ | - | $ | 91,475 |
June 30, 2012
|
||||||||||||||||||||||||||||||||||||
1-4 Family | 1-4 Family | Commercial | ||||||||||||||||||||||||||||||||||
Residential | Residential | Multi- | Real Estate | Consumer | ||||||||||||||||||||||||||||||||
Owner | Non-Owner | Family | and Lines of | Home | Non-Real | |||||||||||||||||||||||||||||||
Occupied | Occupied | Residential | Credit | Construction | Equity | Estate | Unallocated | Total |
For the Three Months Ended June 30, 2012 | ||||||||||||||||||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||||||||||||||||||
Beginning balance
|
$ | 107 | $ | 375 | $ | 24 | $ | 182 | $ | 42 | $ | 85 | $ | 1 | $ | 56 | $ | 872 | ||||||||||||||||||
Charge-offs
|
- | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Recoveries
|
- | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Provision
|
(31 | ) | 34 | (3 | ) | 66 | 10 | (9 | ) | 1 | 11 | 79 | ||||||||||||||||||||||||
Ending balance
|
$ | 76 | $ | 409 | $ | 21 | $ | 248 | $ | 52 | $ | 76 | $ | 2 | $ | 67 | $ | 951 |
For the Six Months Ended June 30, 2012
|
|||||||||||||||||||||||
Allowance for loan losses:
|
Beginning balance
|
$ | 114 | $ | 351 | $ | 26 | $ | 148 | $ | 35 | $ | 83 | $ | 1 | $ | 47 | $ | 805 | ||||||||||||||||||
Charge-offs
|
- | - | - | - | - | (4 | ) | - | - | (4 | ) | |||||||||||||||||||||||||
Recoveries
|
- | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Provision
|
(38 | ) | 58 | (5 | ) | 100 | 17 | (3 | ) | 1 | 20 | 150 | ||||||||||||||||||||||||
Ending balance
|
$ | 76 | $ | 409 | $ | 21 | $ | 248 | $ | 52 | $ | 76 | $ | 2 | $ | 67 | $ | 951 |
Ending balance evaluated
|
|||||||||||||||||||||||
for impairment:
|
Individually
|
$ | - | $ | 121 | $ | - | $ | 103 | $ | - | $ | 40 | $ | 1 | $ | - | $ | 265 | ||||||||||||||||||
Collectively
|
$ | 76 | $ | 288 | $ | 21 | $ | 145 | $ | 52 | $ | 36 | $ | 1 | $ | 67 | $ | 686 |
December 31, 2012
|
||||||||||||||||||||||||||||||||||||
1-4 Family | 1-4 Family | Commercial | ||||||||||||||||||||||||||||||||||
Residential | Residential | Multi- | Real Estate | Consumer | ||||||||||||||||||||||||||||||||
Owner | Non-Owner | Family | and Lines of | Home | Non-Real | |||||||||||||||||||||||||||||||
Occupied | Occupied | Residential | Credit | Construction | Equity | Estate | Unallocated | Total |
Allowance for loan losses: | ||||||||||||||||||||||||||||||||||||
Beginning balance
|
$ | 114 | $ | 351 | $ | 26 | $ | 148 | $ | 35 | $ | 83 | $ | 1 | $ | 47 | $ | 805 | ||||||||||||||||||
Charge-offs
|
- | (103 | ) | - | - | - | (4 | ) | - | - | (107 | ) | ||||||||||||||||||||||||
Recoveries
|
- | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Provision
|
(37 | ) | 120 | (6 | ) | 71 | 28 | (11 | ) | - | (3 | ) | 162 | |||||||||||||||||||||||
Ending balance
|
$ | 77 | $ | 368 | $ | 20 | $ | 219 | $ | 63 | $ | 68 | $ | 1 | $ | 44 | $ | 860 |
Ending balance evaluated
for impairment:
|
Individually
|
$ | - | $ | 24 | $ | - | $ | 88 | $ | - | $ | 28 | $ | - | $ | - | $ | 140 | ||||||||||||||||||
Collectively
|
$ | 77 | $ | 344 | $ | 20 | $ | 131 | $ | 63 | $ | 40 | $ | 1 | $ | 44 | $ | 720 |
Loans receivable:
|
|||||||||||||||||||||||||||||||||||||
Ending balance
|
$ | 10,272 | $ | 35,118 | $ | 3,315 | $ | 20,595 | $ | 9,765 | $ | 6,029 | $ | 162 | $ | - | $ | 85,256 |
Ending balance evaluated
|
for impairment:
|
|||||||||||||||||||||||||||||||||||||
Individually
|
$ | 131 | $ | 695 | $ | - | $ | 494 | $ | - | $ | 306 | $ | 6 | $ | - | $ | 1,632 | |||||||||||||||||||
Collectively
|
$ | 10,141 | $ | 34,423 | $ | 3,315 | $ | 20,101 | $ | 9,765 | $ | 5,723 | $ | 156 | $ | - | $ | 83,624 |
June 30,
2013
|
December 31, 2012
|
|||||||
One-to-four family residential owner occupied
|
$ | 310 | $ | 131 | ||||
One-to-four family residential non-owner occupied
|
635 | 488 | ||||||
Multi-family residential
|
- | - | ||||||
Commercial real estate and lines of credit
|
309 | 445 | ||||||
Construction
|
- | - | ||||||
Home equity
|
128 | 256 | ||||||
Consumer non-real estate
|
5 | - | ||||||
$ | 1,387 | $ | 1,320 |
June 30, 2013
|
||||||||||||||||||||||||
30-90
Days Past
Due
|
Greater
than 90
Days
|
Total
Past Due
|
Current
|
Total Loans Receivable
|
Loans Receivable >
90 Days and Accruing
|
|||||||||||||||||||
One-to-four family residential owner occupied
|
$ | 920 | $ | 310 | $ | 1,230 | $ | 8,119 | $ | 9,349 | $ | - | ||||||||||||
One-to-four family residential non-owner
occupied
|
857 | 918 | 1,775 | 36,017 | 37,792 | 283 | ||||||||||||||||||
Multi-family residential
|
75 | - | 75 | 3,728 | 3,803 | - | ||||||||||||||||||
Commercial real estate and lines of credit
|
503 | 581 | 1,084 | 21,408 | 22,492 | 272 | ||||||||||||||||||
Construction
|
295 | - | 295 | 14,291 | 14,586 | - | ||||||||||||||||||
Home equity
|
142 | 128 | 270 | 5,199 | 5,469 | - | ||||||||||||||||||
Consumer non-real estate
|
- | 5 | 5 | 101 | 106 | - | ||||||||||||||||||
$ | 2,792 | $ | 1,942 | $ | 4,734 | $ | 88,863 | $ | 93,597 | $ | 555 |
December 31, 2012
|
||||||||||||||||||||||||
30-90
Days Past
Due
|
Greater
than 90
Days
|
Total
Past Due
|
Current
|
Total Loans Receivable
|
Loans Receivable >
90 Days and Accruing
|
|||||||||||||||||||
One-to-four family residential owner occupied
|
$ | 348 | $ | 373 | $ | 721 | $ | 9,551 | $ | 10,272 | $ | 242 | ||||||||||||
One-to-four family residential non-owner
occupied
|
1,506 | 790 | 2,296 | 32,822 | 35,118 | 302 | ||||||||||||||||||
Multi-family residential
|
79 | - | 79 | 3,236 | 3,315 | - | ||||||||||||||||||
Commercial real estate and lines of credit
|
756 | 657 | 1,413 | 19,182 | 20,595 | 212 | ||||||||||||||||||
Construction
|
382 | - | 382 | 9,383 | 9,765 | - | ||||||||||||||||||
Home equity
|
238 | 321 | 559 | 5,470 | 6,029 | 65 | ||||||||||||||||||
Consumer non-real estate
|
6 | - | 6 | 156 | 162 | - | ||||||||||||||||||
$ | 3,315 | $ | 2,141 | $ | 5,456 | $ | 79,800 | $ | 85,256 | $ | 821 |
June 30,
2013
|
December 31, 2012
|
||||||||
Passbook savings accounts
|
$ | 2,793 | $ | 2,890 | |||||
Statement savings accounts
|
5,688 | 5,843 | |||||||
eSavings accounts
|
13,714 | 10,604 | |||||||
Certificates of deposit
|
82,353 | 77,701 | |||||||
Total deposits
|
$ | 104,548 | $ | 97,038 |
June 30, 2013
|
December 31, 2012
|
|||||||||||||||
Maturity Period
|
Amount
|
Weighted
Interest Rate
|
Amount
|
Weighted
Interest Rate
|
||||||||||||
1 to 12 Months
|
$ | 1,000 | 4.32 | % | $ | 2,000 | 4.19 | % |
June 30, 2013
|
June 30, 2012
|
|||||||||||||||
Number of
Shares
|
Weighted
Average Grant Date Fair Value
|
Number of
Shares
|
Weighted
Average Grant Date Fair Value
|
|||||||||||||
Unvested at the beginning of the period
|
8,894 | $ | 9.05 | 17,440 | $ | 9.05 | ||||||||||
Granted
|
26,150 | 16.20 | - | - | ||||||||||||
Vested
|
(8,544 | ) | 9.05 | (8,546 | ) | 9.05 | ||||||||||
Forfeited
|
- | - | - | - | ||||||||||||
Unvested at the end of the period
|
26,500 | $ | 16.11 | 8,894 | $ | 9.05 |
2013
|
2012
|
|||||||||||||||||||
Number
of
Shares
|
Weighted
Average Exercise
Price
|
Weighted
Average Remaining Contractual Life (in years)
|
Number
of
Shares
|
Weighted
Average Exercise
Price
|
||||||||||||||||
Outstanding at the beginning of the year
|
107,570 | $ | 10.00 | 5.4 | 107,570 | $ | 10.00 | |||||||||||||
Granted
|
77,000 | 16.20 | 10.0 | - | - | |||||||||||||||
Exercised
|
- | - | - | - | - | |||||||||||||||
Forfeited
|
- | - | - | - | - | |||||||||||||||
Outstanding at the end of the period
|
184,570 | $ | 12.59 | 7.0 | 107,570 | $ | 10.00 | |||||||||||||
Exercisable at the end of the period
|
106,665 | $ | 10.00 | 7.0 | 63,999 | $ | 10.00 |
June 30, 2013
|
||||||||||||||||
Fair Value Measurements Using:
|
||||||||||||||||
Total Fair Value
|
Quoted
Prices in
Active
Markets for Identical
Assets
(Level 1)
|
Significant Other Observable
Inputs
(Level 2)
|
Unobservable Inputs
(Level 3)
|
|||||||||||||
Recurring fair value measurements
|
||||||||||||||||
Investment securities available for sale
|
||||||||||||||||
Corporate securities
|
$ | 1,822 | $ | - | $ | 1,822 | $ | - | ||||||||
Short-term bond fund
|
1,139 | 1,139 | - | - | ||||||||||||
Limited-term bond fund
|
517 | 517 | - | - | ||||||||||||
Total investment securities available for sale
|
$ | 3,478 | $ | 1,656 | $ | 1,822 | $ | - | ||||||||
Total recurring fair value measurements
|
$ | 3,478 | $ | 1,656 | $ | 1,822 | $ | - | ||||||||
Nonrecurring fair value measurements
|
||||||||||||||||
Impaired loans
|
$ | 655 | $ | - | $ | - | $ | 655 | ||||||||
Other real estate owned
|
187 | - | - | 187 | ||||||||||||
Total nonrecurring fair value measurements
|
$ | 842 | $ | - | $ | - | $ | 842 |
December 31, 2012
|
||||||||||||||||
Fair Value Measurements Using:
|
||||||||||||||||
Total Fair Value
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
Significant Other Observable Inputs
(Level 2)
|
Unobservable Inputs
(Level 3)
|
|||||||||||||
Recurring fair value measurements
|
||||||||||||||||
Investment securities available for sale
|
||||||||||||||||
U.S. Government agency securities
|
$ | 501 | $ | - | $ | 501 | $ | - | ||||||||
Corporate securities
|
1,826 | 1,826 | - | - | ||||||||||||
Short-term bond fund
|
1,142 | 1,142 | - | - | ||||||||||||
Limited-term bond fund
|
525 | 525 | - | - | ||||||||||||
Total investment securities available for sale
|
$ | 3,994 | $ | 3,493 | $ | 501 | $ | - | ||||||||
Total recurring fair value measurements
|
$ | 3,994 | $ | 3,493 | $ | 501 | $ | - | ||||||||
Nonrecurring fair value measurements
|
||||||||||||||||
Impaired loans
|
$ | 588 | $ | - | $ | - | $ | 588 | ||||||||
Other real estate owned
|
170 | - | - | 170 | ||||||||||||
Total nonrecurring fair value measurements
|
$ | 758 | $ | - | $ | - | $ | 758 |
June 30, 2013
|
|||||||
Quantitative Information About Level 3 Fair Value Measurements
|
|||||||
Total Fair
Value
|
Valuation Techniques
|
Unobservable
Input
|
Range (Weighted
Average)
|
||||
Impaired loans
|
$655
|
Appraisal of
collateral (1)
|
Appraisal
adjustments (2)
|
8%-40% (20%)
|
|||
Other real estate owned
|
$187
|
Appraisal of
collateral (1)
|
Appraisal
adjustments (2)
|
8%-29% (17%)
|
December 31, 2012
|
|||||||
Quantitative Information About Level 3 Fair Value Measurements
|
|||||||
Total Fair
Value
|
Valuation
Techniques
|
Unobservable
Input
|
Range (Weighted
Average)
|
||||
Impaired loans
|
$588
|
Appraisal of
collateral (1)
|
Appraisal
adjustments (2)
|
8%-58% (31%)
|
|||
Other real estate owned
|
$170
|
Appraisal of
collateral (1)
|
Appraisal
adjustments (2)
|
8%-29% (17%)
|
(1)
|
Fair value is generally determined through independent appraisals of the underlying collateral, which generally include various Level 3 inputs which are identifiable.
|
(2)
|
Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses. The range and weighted average of liquidation expenses and other appraisal adjustments are presented as a percentage of the appraisal.
|
Fair Value Measurements at
|
||||||||||||||||||||
June 30, 2013
|
||||||||||||||||||||
Carrying Amount
|
Fair Value Estimate
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
Significant Other Observable Inputs
(Level 2)
|
Unobservable Inputs
(Level 3)
|
||||||||||||||||
Financial Assets
|
||||||||||||||||||||
Cash and cash equivalents
|
$ | 13,277 | $ | 13,277 | $ | 13,277 | $ | - | $ | - | ||||||||||
Investment in interest-earning time deposits
|
7,920 | 8,092 | - | 8,092 | - | |||||||||||||||
Investment securities available for sale
|
3, 478 | 3,478 | 1,656 | 1,822 | - | |||||||||||||||
Loans held for sale
|
3,153 | 3,252 | 3,252 | - | - | |||||||||||||||
Loans receivable, net
|
92,434 | 92,998 | - | - | 92,998 | |||||||||||||||
Accrued interest receivable
|
678 | 678 | 678 | - | - | |||||||||||||||
Investment in FHLB stock
|
260 | 260 | - | 260 | - | |||||||||||||||
Financial Liabilities
|
||||||||||||||||||||
Deposits
|
104,548 | 106,722 | 22,195 | - | 84,527 | |||||||||||||||
FHLB advances, short-term
|
1,000 | 1,000 | - | - | 1,000 | |||||||||||||||
Accrued interest payable
|
75 | 75 | 75 | - | - |
Fair Value Measurements at
|
||||||||||||||||||||
December 31, 2012
|
||||||||||||||||||||
Carrying Amount
|
Fair Value Estimate
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
Significant Other Observable Inputs
(Level 2)
|
Unobservable Inputs
(Level 3)
|
||||||||||||||||
Financial Assets
|
||||||||||||||||||||
Cash and cash equivalents
|
$ | 12,400 | $ | 12,400 | $ | 12,400 | $ | - | $ | - | ||||||||||
Investment in interest-earning time deposits
|
8,132 | 8,234 | - | 8,234 | - | |||||||||||||||
Investment securities available for sale
|
3,994 | 3,994 | 3,493 | 501 | - | |||||||||||||||
Loans held for sale
|
4,875 | 5,053 | - | 5,053 | - | |||||||||||||||
Loans receivable, net
|
84,291 | 86,503 | - | - | 86,503 | |||||||||||||||
Accrued interest receivable
|
657 | 657 | 657 | - | - | |||||||||||||||
Investment in FHLB stock
|
437 | 437 | - | 437 | - | |||||||||||||||
Financial Liabilities
|
||||||||||||||||||||
Deposits
|
97,038 | 98,279 | 19,337 | 78,942 | - | |||||||||||||||
FHLB advances, short-term
|
2,000 | 2,000 | - | 2,000 | - | |||||||||||||||
Accrued interest payable
|
81 | 81 | 81 | - | - |
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
Three Months Ended June 30,
|
||||||||||||||||||||||||
2013
|
2012
|
|||||||||||||||||||||||
Average
Balance
|
Interest
|
Average
Yield/
Rate
|
Average
Balance
|
Interest
|
Average
Yield/
Rate
|
|||||||||||||||||||
Interest-earning assets:
|
(Dollars in thousands)
|
|||||||||||||||||||||||
Short-term investments and investment
securities available for sale
|
$ | 26,731 | $ | 67 | 1.00 | % | $ | 19,692 | $ | 85 | 1.73 | % | ||||||||||||
Mortgage-backed securities held to maturity
|
- | - | - | 668 | 7 | 4.19 | ||||||||||||||||||
Loans receivable, net (1)(2)
|
93,838 | 1,485 | 6.33 | 81,939 | 1,376 | 6.72 | ||||||||||||||||||
Total interest-earning assets
|
120,569 | 1,552 | 5.15 | % | 102,299 | 1,468 | 5.74 | % | ||||||||||||||||
Non-interest-earning assets
|
2,970 | 4,658 | ||||||||||||||||||||||
Total assets
|
$ | 123,539 | $ | 106,957 | ||||||||||||||||||||
Interest-bearing liabilities:
|
||||||||||||||||||||||||
Passbook accounts
|
$ | 2,829 | 1 | 0.14 | % | $ | 2,903 | 2 | 0.28 | % | ||||||||||||||
Statement savings accounts
|
5,718 | 5 | 0.35 | 6,133 | 6 | 0.39 | ||||||||||||||||||
eSavings accounts
|
13,503 | 25 | 0.74 | 5,725 | 14 | 0.98 | ||||||||||||||||||
Certificate of deposit accounts
|
82,492 | 390 | 1.89 | 71,985 | 370 | 2.06 | ||||||||||||||||||
Total deposits
|
104,542 | 421 | 1.61 | 86,746 | 392 | 1.81 | ||||||||||||||||||
FHLB advances
|
1,242 | 14 | 4.51 | 3,047 | 32 | 4.20 | ||||||||||||||||||
Total interest-bearing liabilities
|
105,783 | 435 | 1.64 | % | 89,793 | 424 | 1.89 | % | ||||||||||||||||
Non-interest-bearing liabilities
|
930 | 939 | ||||||||||||||||||||||
Total liabilities
|
106,713 | 90,732 | ||||||||||||||||||||||
Stockholders’ Equity
|
16,826 | 16,225 | ||||||||||||||||||||||
Total liabilities and Stockholders’ Equity
|
$ | 123,539 | $ | 106,957 | ||||||||||||||||||||
Net interest-earning assets
|
$ | 14,786 | $ | 12,506 | ||||||||||||||||||||
Net interest income; average interest rate spread
|
$ | 1,117 | 3.51 | % | $ | 1,044 | 3.85 | % | ||||||||||||||||
Net interest margin (3)
|
3.71 | % | 4.08 | % | ||||||||||||||||||||
Average interest-earning assets to average
interest-bearing liabilities
|
113.98 | % | 113.93 | % |
(1)
|
Includes loans held for sale.
|
(2)
|
Includes non-accrual loans during the respective periods. Calculated net of deferred fees and discounts, loans in process and allowance for loan losses.
|
(3)
|
Equals net interest income divided by average interest-earning assets.
|
Six Months Ended June 30,
|
||||||||||||||||||||||||
2013
|
2012
|
|||||||||||||||||||||||
Average
Balance
|
Interest
|
Average
Yield/
Rate
|
Average
Balance
|
Interest
|
Average
Yield/
Rate
|
|||||||||||||||||||
Interest-earning assets:
|
(Dollars in thousands)
|
|||||||||||||||||||||||
Short-term investments and investment securities available for sale
|
$ | 25,946 | $ | 131 | 1.01 | % | $ | 20,709 | $ | 171 | 1.65 | % | ||||||||||||
Mortgage-backed securities
|
- | - | - | 2,242 | 53 | 4.73 | ||||||||||||||||||
Loans receivable, net (1)(2)
|
92,919 | 2,915 | 6.27 | 80,269 | 2,679 | 6.68 | ||||||||||||||||||
Total interest-earning assets
|
118,865 | 3,046 | 5.13 | % | 103,220 | 2,903 | 5.62 | % | ||||||||||||||||
Non-interest-earning assets
|
2,938 | 4,228 | ||||||||||||||||||||||
Total assets
|
$ | 121,803 | $ | 107,448 | ||||||||||||||||||||
Interest-bearing liabilities:
|
||||||||||||||||||||||||
Passbook accounts
|
$ | 2,841 | 3 | 0.21 | % | $ | 2,926 | 4 | 0.27 | % | ||||||||||||||
Statement savings accounts
|
5,719 | 11 | 0.38 | 6,401 | 14 | 0.44 | ||||||||||||||||||
eSavings accounts
|
12,766 | 51 | 0.80 | 4,991 | 24 | 0.96 | ||||||||||||||||||
Certificate of deposit accounts
|
81,058 | 770 | 1.90 | 72,712 | 761 | 2.09 | ||||||||||||||||||
Total deposits
|
102,384 | 835 | 1.63 | 87,030 | 803 | 1.85 | ||||||||||||||||||
FHLB advances
|
1,619 | 35 | 4.32 | 3,428 | 72 | 4.20 | ||||||||||||||||||
Total interest-bearing liabilities
|
104,002 | 870 | 1.67 | % | 90,458 | 875 | 1.94 | % | ||||||||||||||||
Non-interest-bearing liabilities
|
993 | 982 | ||||||||||||||||||||||
Total liabilities
|
104,995 | 91,440 | ||||||||||||||||||||||
Stockholders’ Equity
|
16,809 | 16,008 | ||||||||||||||||||||||
Total liabilities and Stockholders’ Equity
|
$ | 121,803 | $ | 107,448 | ||||||||||||||||||||
Net interest-earning assets
|
$ | 14,863 | $ | 12,762 | ||||||||||||||||||||
Net interest income; average interest rate
spread
|
$ | 2,176 | 3.46 | % | $ | 2,028 | 3.68 | % | ||||||||||||||||
Net interest margin (3)
|
3.66 | % | 3.93 | % | ||||||||||||||||||||
Average interest-earning assets to average interest-bearing liabilities
|
114.29 | % | 114.11 | % |
(1)
|
Includes loans held for sale.
|
(2)
|
Includes non-accrual loans during the respective periods. Calculated net of deferred fees and discounts, loans in process and allowance for loan losses.
|
(3)
|
Equals net interest income divided by average interest-earning assets.
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
ITEM 1A.
|
RISK FACTORS
|
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
Period
|
Total Number of Shares
Purchased
|
Average
Price
Paid per
Share
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (1)
|
||||||||||||
April 1, 2013 – April 30, 2013
|
3,800 | $ | 15.86 | 3,800 | 45,620 | |||||||||||
May 1, 2013 – May 31, 2013
|
47 | 16.24 | 47 | 45,573 | ||||||||||||
June 1, 2013 – June 30, 2013
|
700 | 16.05 | 700 | 44,873 | ||||||||||||
Total
|
4,547 | $ | 15.89 | 4,547 | 44,873 |
(1)
|
On September 10, 2010, the Company announced by press release its third repurchase program to repurchase up to an additional 69,431 shares, or approximately 6.2% of the Company's then current outstanding shares of common stock. The Company commenced this third stock repurchase program upon the completion of its prior repurchase program on December 3, 2010. The repurchase program does not have an expiration date.
|
ITEM 3.
|
DEFAULTS UPON SENIOR SECURITIES
|
ITEM 4.
|
MINE SAFETY PROCEDURES
|
ITEM 5.
|
OTHER INFORMATION
|
ITEM 6.
|
EXHIBITS
|
No.
|
Description
|
|||
31.1 |
Rule 13a-14(d) and 15d-14(d) Certification of the Chief Executive Officer.
|
|||
31.2 |
Rule 13a-14(d) and 15d-14(d) Certification of the Chief Financial Officer.
|
|||
32.0 |
Section 1350 Certification.
|
|||
The following Exhibits are being furnished as part of this report:
|
||||
No.
|
Description
|
|||
101.INS
|
XBRL Instance Document.*
|
|||
101.SCH
|
XBRL Taxonomy Extension Schema Document.*
|
|||
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document.*
|
|||
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document.*
|
|||
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document.*
|
|||
101.DEF
|
XBRL Taxonomy Extension Definitions Linkbase Document.*
|
|
______________________
|
|
*
|
The interactive data files are being furnished on Exhibit 101 hereto and, in accordance with Rule 402 of Regulation S-T, shall not be deemed filed for purposes of Section 11 or 12 of the Securities Act of 1933, as amended, or Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability under those sections.
|
Date: August 14, 2013 | /s/Robert T. Strong | |
|
By:
|
Robert T. Strong
President and Chief Executive Officer
|
Date: August 14, 2013 | /s/John J. Augustine | |
|
By:
|
John J. Augustine
Chief Financial Officer
|
Date: August 14, 2013 | /s/Robert T. Strong |
|
Robert T. Strong
President and Chief Executive Officer
|
Date: August 14, 2013 | /s/John J. Augustine |
|
John J. Augustine
Chief Financial Officer
|
(1)
|
The quarterly report on Form 10-Q of the Company for the period ended June 30, 2013 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C 78m(a) or 78o(d); and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: August 14, 2013
|
By:
|
/s/Robert T. Strong
|
Robert T. Strong
President and Chief Executive Officer
|
||
Date: August 14, 2013
|
By:
|
/s/John J. Augustine
|
John J. Augustine
Chief Financial Officer
|
Fair Value Measurements
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
|
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Fair Value Measurements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Note 9 – Fair Value Measurements Fair value estimates are based on quoted market prices, if available, quoted market prices of similar assets or liabilities, or the present value of expected future cash flows and other valuation techniques. These valuations are significantly affected by discount rates, cash flow assumptions, and risk assumptions used. Therefore, fair value estimates may not be substantiated by comparison to independent markets and are not intended to reflect the proceeds that may be realizable in an immediate settlement of the instruments. Fair value is determined at one point in time and is not representative of future value. These amounts do not reflect the total value of a going concern organization. Management does not have the intention to dispose of a significant portion of its assets and liabilities and therefore, the unrealized gains or losses should not be interpreted as a forecast of future earnings and cash flows. The following is a discussion of assets and liabilities measured at fair value on a recurring basis and valuation techniques applied: Investment Securities Available-For-Sale: The fair value of securities available for sale (carried at fair value) are determined by obtaining quoted market prices on nationally recognized securities exchanges (Level 1), or matrix pricing (Level 2), which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted market prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted prices. We may be required from time to time to measure certain assets at fair value on a nonrecurring basis in accordance with US GAAP. These adjustments to fair value usually result from application of lower-of-cost-or-market accounting or write-downs of individual assets. Impaired Loans: Impaired loans are carried at the lower of cost or the fair value of the collateral for collateral-dependent loans. Collateral is primarily in the form of real estate. The use of independent appraisals, discounted cash flow models and management’s best judgment are significant inputs in arriving at the fair value measure of the underlying collateral and impaired loans are therefore classified within level 3 of the fair value hierarchy. Other Real Estate Owned: Other real estate owned is carried at the lower of the investment in the real estate or the fair value of the real estate less estimated selling costs. The use of independent appraisals and management’s best judgment are significant inputs in arriving at the fair value measure of the underlying collateral and therefore other real estate owned is classified within level 3 of the fair value hierarchy. The table below sets forth the financial assets and liabilities that were accounted for on a recurring and nonrecurring basis by level within the fair value hierarchy as of June 30, 2013 (in thousands):
The table below sets forth the financial assets and liabilities that were accounted for on a recurring and nonrecurring basis by level within the fair value hierarchy as of December 31, 2012 (in thousands):
The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which the Company has used level 3 inputs to determine fair value as of June 30, 2013 and December 31, 2012 (in thousands):
The estimated fair values of the Company’s financial instruments were as follows at June 30, 2013 and December 31, 2012 (in thousands):
The following methods and assumptions were used to measure the fair value of financial instruments recorded at cost on the Company’s consolidated balance sheets: Cash and Cash Equivalents. The carrying amounts reported in the balance sheet for cash and short-term instruments approximate those assets’ fair values. Interest-Earning Time Deposits. Fair values for interest-earning time deposits are estimated using a discounted cash flow calculation that applies interest rates currently being offered in the market on certificates to a schedule of aggregated expected monthly maturities on time deposits. The Company generally purchases amounts below the insured limit, limiting the amount of credit risk on these time deposits. Loans Held for Sale. Fair values of loans held for sale are based on commitments on hand from investors at prevailing market rates. Loans Receivable, Net. The fair values of loans are estimated using discounted cash flow methodology. The discount rates take into account interest rates currently being offered to customers for loans with similar terms, the credit risk associated with the loan and market factors, including liquidity. The valuation of the loan portfolio reflects discounts that the Company believes are consistent with transactions occurring in the market place for both performing and distressed loan types. The carrying value that fair value is compared to is net of the allowance for loan losses and other associated premiums and discounts. Due to the significant judgment involved in evaluating credit quality, loans are classified with level 3 of the fair value hierarchy. Accrued Interest Receivable. The carrying amount of accrued interest receivable approximates its fair value. Federal Home Loan Bank Stock. The carrying amount of restricted investment in Federal Home Loan Bank stock approximates fair value, and considers the limited marketability of such securities. Deposits. The carrying amount is considered a reasonable estimate of fair value for demand savings deposit accounts. The fair value of fixed maturity certificates of deposit is estimated by a discounted cash flow method using the rates currently offered for deposits of similar maturities. Federal Home Loan Bank Borrowings. Fair values of FHLB advances are estimated based on rates currently available to the Company for similar terms and remaining maturities. Accrued Interest Payable. The carrying amount of accrued interest payable approximates its fair value. Off-Balance Sheet Financial Instruments. Off-balance sheet financial instruments consist of commitments to extend credit. Fair values for commitments to extend credit are estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreement and the present credit standing of the counterparties. The estimated fair value of the commitments to extend credit are insignificant and therefore are not presented in the above table. |
Earnings Per Share
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Note 2 – Earnings Per Share Earnings per share (“EPS”) consists of two separate components, basic EPS and diluted EPS. Basic EPS is computed based on the weighted average number of shares of common stock outstanding for each period presented. Diluted EPS is calculated based on the weighted average number of shares of common stock outstanding plus dilutive common stock equivalents (“CSEs”). CSEs consist of shares that are assumed to have been purchased with the proceeds from the exercise of stock options, as well as unvested restricted stock (RRP) shares. Common stock equivalents which are considered antidilutive are not included for the purposes of this calculation. For the three and six months ended June 30, 2013, 107,570 outstanding stock options were dilutive. For the three months and six months ended June 30, 2012 all outstanding stock options were antidilutive. The following table sets forth the composition of the weighted average shares (denominator) used in the basic and dilutive earnings per share computations.
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Borrowings (Tables)
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Jun. 30, 2013
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Borrowings [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Federal Home Loan Bank Advances | Federal Home Loan Bank advances consist of the following at June 30, 2013 and December 31, 2012 (in thousands):
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Financial Statement Presentation and Significant Accounting Policies (Policies)
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6 Months Ended |
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Jun. 30, 2013
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Financial Statement Presentation and Significant Accounting Policies [Abstract] | |
Basis of Financial Presentation | Basis of Financial Presentation.The consolidated financial statements include the accounts of Quaint Oak Bancorp, Inc. (the “Company”) and its wholly owned subsidiary, Quaint Oak Bank (the “Bank”) along with its wholly-owned subsidiaries. At June 30, 2013, the Bank has five wholly-owned subsidiaries, Quaint Oak Mortgage, LLC, Quaint Oak Real Estate, LLC, Quaint Oak Abstract, LLC, Quaint Oak Insurance Agency, LLC, and QOB Properties, LLC, each a Pennsylvania limited liability company. The mortgage, real estate and abstract companies offer mortgage banking, real estate sales and title abstract services, respectively, and began operation in July 2009. QOB Properties, LLC began operations in July 2012 and holds Bank properties acquired through a foreclosure proceeding or acceptance of a deed in lieu of foreclosure. Quaint Oak Insurance Agency, LLC is currently inactive. All significant intercompany balances and transactions have been eliminated. The Bank is subject to regulation by the Pennsylvania Department of Banking and Securities and the Federal Deposit Insurance Corporation. Pursuant to the Bank’s election under Section 10(l) of the Home Owners’ Loan Act, the Company is a savings and loan holding company regulated by the Board of Governors of the Federal Reserve System. The market area served by the Bank's two branch offices includes Bucks and Montgomery Counties, Pennsylvania, northeast Philadelphia and the surrounding area and the Lehigh Valley area of Pennsylvania. The principal deposit products offered by the Bank are certificates of deposit, passbook savings accounts, statement savings accounts and eSavings accounts. Loan products offered are fixed and adjustable rate residential and commercial mortgages, construction loans, home equity loans, auto loans, and lines of credit. The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (US GAAP) for interim information and with the instructions to Form 10-Q, as applicable to a smaller reporting company. Accordingly, they do not include all the information and footnotes required by US GAAP for complete financial statements. The foregoing consolidated financial statements are unaudited; but in the opinion of management include all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation thereof. The balances as of December 31, 2012 have been derived from the audited financial statements. These financial statements should be read in conjunction with the financial statements and notes thereto included in Quaint Oak Bancorp’s 2012 Annual Report on Form 10-K. The results of operations for the three and six months ended June 30, 2013 are not necessarily indicative of the results that may be expected for the year ending December 31, 2013. |
Use of Estimates in the Preparation of Financial Statements | Use of Estimates in the Preparation of Financial Statements.The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. The Company’s most significant estimates are the determination of the allowance for loan losses, the assessment of other-than-temporary impairment of investment securities, valuation of other real estate owned, and the valuation of deferred tax assets. |
Loans Receivable | Loans Receivable. Loans receivable that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are stated at their outstanding unpaid principal balances, net of an allowance for loan losses and any deferred fees and costs. Interest income is accrued on the unpaid principal balance. Loan origination fees and costs are deferred and recognized as an adjustment of the yield (interest income) of the related loans. The Bank is generally amortizing these amounts over the contractual life of the loan. The loans receivable portfolio is segmented into residential loans, commercial real estate loans, construction loans and consumer loans. The residential loan segment has two classes: one-to-four family residential owner occupied loans and one-to-four residential family non-owner occupied loans. The commercial real estate loan segment consists of the following classes: multi-family (five or more) residential, commercial real estate and commercial lines of credit. Construction loans are generally granted for the purpose of building a single residential home. The consumer loan segment consists of the following classes: home equity loans and consumer non-real estate loans. Included in the home equity class are home equity loans and home equity lines of credit. Included in the consumer non-real estate loans are loans secured by saving accounts and auto loans. The accrual of interest is generally discontinued when principal or interest has become 90 days past due unless the loan is in the process of collection and is either guaranteed or well secured. When a loan is placed on nonaccrual status, unpaid interest credited to income in the current year is reversed and unpaid interest accrued in prior years is charged against the allowance for loan losses. Interest received on nonaccrual loans generally is either applied against principal or reported as interest income, according to management’s judgment as to the collectability of principal. Generally, a loan is restored to accrual status when the obligation is brought current, it has performed in accordance with the contractual terms for a reasonable period of time and the ultimate collectability of the total contractual principal and interest is no longer in doubt. |
Allowance for Loan Losses | Allowance for Loan Losses. The allowance for loan losses represents management’s estimate of losses inherent in the loan portfolio as of the balance sheet date and is recorded as a reduction to loans receivable. The allowance for loan losses is increased by the provision for loan losses, and decreased by charge-offs, net of recoveries. Loans deemed to be uncollectible are charged against the allowance for loan losses, and subsequent recoveries, if any, are credited to the allowance. All, or part, of the principal balance of loans receivable are charged off to the allowance as soon as it is determined that the repayment of all, or part, of the principal balance is highly unlikely. Because all identified losses are immediately charged off, no portion of the allowance for loan losses is restricted to any individual loan or groups of loans, and the entire allowance is available to absorb any and all loan losses. The allowance for loan losses is maintained at a level considered adequate to provide for losses that can be reasonably anticipated. Management performs a quarterly evaluation of the adequacy of the allowance. The allowance is based on the Company’s past loan loss experience, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral, composition of the loan portfolio, current economic conditions and other relevant factors. This evaluation is inherently subjective as it requires material estimates that may be susceptible to significant revision as more information becomes available. The allowance consists of specific, general and unallocated components. The specific component relates to loans that are designated as impaired. For loans that are designated as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan. The general component covers pools of loans by loan class. These pools of loans are evaluated for loss exposure based upon historical loss rates for each of these categories of loans, adjusted for qualitative factors. These significant factors may include changes in lending policies and procedures, changes in existing general economic and business conditions affecting our primary lending areas, credit quality trends, collateral value, loan volumes and concentrations, seasoning of the loan portfolio, recent loss experience in particular segments of the portfolio, duration of the current business cycle and bank regulatory examination results. The applied loss factors are reevaluated quarterly to ensure their relevance in the current economic environment. Residential owner occupied mortgage lending generally entails a lower risk of default than other types of lending. Consumer loans and commercial real estate loans generally involve more risk of collectability because of the type and nature of the collateral and, in certain cases, the absence of collateral. It is the Company’s policy to establish a specific reserve for loss on any delinquent loan when it determines that a loss is probable. An unallocated component is maintained to cover uncertainties that could affect management’s estimate of probable losses. The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating specific and general losses in the portfolio. A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not considered impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan by loan basis by either the present value of expected future cash flows discounted at the loan’s effective interest rate or the fair value of the collateral if the loan is collateral dependent. An allowance for loan losses is established for an impaired loan if its carrying value exceeds its estimated fair value. The estimated fair values of substantially all of the Company’s impaired loans are measured based on the estimated fair value of the loan’s collateral. A loan is identified as a troubled debt restructuring (“TDR”) if the Company, for economic or legal reasons related to a debtor’s financial difficulties, grants a concession to the debtor that it would not otherwise consider. Concessions granted under a TDR typically involve a temporary or permanent reduction in payments or interest rate or an extension of a loan’s stated maturity date at less than a current market rate of interest. Loans identified as TDRs are designated as impaired. For loans secured by real estate, estimated fair values are determined primarily through third-party appraisals. When a real estate secured loan becomes impaired, a decision is made regarding whether an updated certified appraisal of the real estate is necessary. This decision is based on various considerations, including the age of the most recent appraisal, the loan-to-value ratio based on the original appraisal and the condition of the property. Appraised values are discounted to arrive at the estimated selling price of the collateral, which is considered to be the estimated fair value. The discounts also include estimated costs to sell the property. The allowance calculation methodology includes further segregation of loan classes into risk rating categories. The borrower’s overall financial condition, repayment sources, guarantors and value of collateral, if appropriate, are evaluated annually for all loans (except one-to-four family residential owner-occupied loans) where the total amount outstanding to any borrower or group of borrowers exceeds $500,000, or when credit deficiencies arise, such as delinquent loan payments. Credit quality risk ratings include regulatory classifications of special mention, substandard, doubtful and loss. Loans designated as special mention have potential weaknesses that deserve management’s close attention. If uncorrected, the potential weaknesses may result in deterioration of the repayment prospects. Loans classified substandard have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They include loans that are inadequately protected by the current sound net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans classified doubtful have all the weaknesses inherent in loans classified substandard with the added characteristic that collection or liquidation in full, on the basis of current conditions and facts, is highly improbable. Loans classified as a loss are considered uncollectible and are charged to the allowance for loan losses. Loans not classified are rated pass. In addition, Federal regulatory agencies, as an integral part of their examination process, periodically review the Company’s allowance for loan losses and may require the Company to recognize additions to the allowance based on their judgments about information available to them at the time of their examination, which may not be currently available to management. Based on management’s comprehensive analysis of the loan portfolio, management believes the current level of the allowance for loan losses is adequate. |
Loans Held for Sale. | Loans Held for Sale. Loans originated by the Bank’s mortgage banking subsidiary, Quaint Oak Mortgage, LLC, are intended for sale in the secondary market and are carried at the lower of cost or fair value (LOCOM). Gains and losses on loan sales (sales proceeds minus carrying value) are recorded in noninterest income, and direct loan origination costs and fees are deferred at origination of the loan and are recognized in noninterest income upon sale of the loan. |
Federal Home Loan Bank Stock | Federal Home Loan Bank Stock.Federal law requires a member institution of the Federal Home Loan Bank (FHLB) system to hold restricted stock of its district Federal Home Loan Bank according to a predetermined formula. FHLB stock is carried at cost and evaluated for impairment. When evaluating FHLB stock for impairment, its value is determined based on the ultimate recoverability of the par value of the stock. We evaluate our holdings of FHLB stock for impairment each reporting period. No impairment charges were recognized on FHLB stock during the three and six months ended June 30, 2013 and 2012. |
Other Real Estate Owned | Other Real Estate Owned. Other real estate owned or foreclosed assets are comprised of property acquired through a foreclosure proceeding or acceptance of a deed in lieu of foreclosure and loans classified as in-substance foreclosures. A loan is classified as in-substance foreclosure when the Bank has taken possession of the collateral regardless of whether formal foreclosure proceedings take place. Other real estate properties are initially recorded at fair value, net of estimated selling costs at the date of foreclosure, establishing a new cost basis. After foreclosure, valuations are periodically performed by management and the real estate is carried at the lower of cost or fair value less estimated costs to sell. Net revenue and expenses from operations and additions to the valuation allowance are included in other expenses. |
Share-Based Compensation | Share-Based Compensation.Compensation expense for share-based compensation awards is based on the grant date fair value of the award. That cost is recognized over the period during which an employee is required to provide service in exchange for the award. At June 30, 2013, the Company has three share-based plans: the 2008 Recognition and Retention Plan (“RRP”), the 2008 Stock Option Plan, and the 2013 Stock Incentive Plan. Awards under these plans were made in May 2008 and 2013. These plans are more fully described in Note 8. The Company also has an employee stock ownership plan (“ESOP”). This plan is more fully described in Note 8. As ESOP shares are committed to be released and allocated among participants, the Company recognizes compensation expense equal to the average market price of the shares over the period earned. |
Comprehensive Income (Loss) | Comprehensive Income (Loss). Accounting principles generally accepted in the United States of America require that recognized revenue, expenses, gains and losses be included in net income. Certain changes in assets and liabilities, such as unrealized gains and losses on available for sale securities, are reported as a separate component of the equity section of the balance sheet and along with net income, are components of comprehensive income. |
Earnings per Share | Earnings per Share.Amounts reported in earnings per share reflect earnings available to common stockholders’ for the period divided by the weighted average number of shares of common stock outstanding during the period, exclusive of unearned ESOP shares, unvested restricted stock (RRP) shares and treasury shares. Stock options and unvested restricted stock are regarded as potential common stock and are considered in the diluted earnings per share calculations to the extent they would have a dilutive effect if converted to common stock, computed using the “treasury stock” method. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements. In February 2013, the FASB issued ASU No. 2013-02, Comprehensive Income, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. The objective of ASU 2013-02 is to improve the reporting of reclassifications out of accumulated other comprehensive income. The amendments included in ASU 2013-02 do not change the current requirements for reporting net income or other comprehensive income in financial statements. However, the amendments require an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. For public entities, the amendments are effective prospectively for reporting periods beginning after December 15, 2012. As the adoption of ASU 2013-02 amends only disclosure requirements, the adoption had no impact on the Company’s results of operations or financial position. |
Reclassifications | Reclassifications.Certain items in the 2012 consolidated financial statements have been reclassified to conform to the presentation in the 2013 consolidated financial statements. Such reclassifications did not have a material impact on the presentation of the overall financial statements. The reclassifications had no effect on net income. |
Deposits (Details) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2013
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Dec. 31, 2012
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Deposits [Abstract] | ||
Passbook savings accounts | $ 2,793 | $ 2,890 |
Statement savings accounts | 5,688 | 5,843 |
eSavings accounts | 13,714 | 10,604 |
Certificates of deposit | 82,353 | 77,701 |
Total deposits | $ 104,548 | $ 97,038 |
Financial Statement Presentation and Significant Accounting Policies (Details) (USD $)
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Jun. 30, 2013
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Jun. 30, 2012
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Jun. 30, 2013
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Jun. 30, 2012
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Financial Statement Presentation and Significant Accounting Policies [Abstract] | ||||
Number of wholly owned subsidiaries | 5 | |||
Number of branch offices serve the areas | 2 | 2 | ||
Past due period of principal or interest payment | 90 days | |||
Allowance for Loan Losses [Abstract] | ||||
Threshold amount of loans to be evaluated annually, minimum | $ 500,000 | |||
Federal Home Loan Bank Stock [Abstract] | ||||
Impairment charges | $ 0 | $ 0 | $ 0 | $ 0 |
Share-Based Compensation [Abstract] | ||||
Number of share based plans | 3 |
Fair Value Measurements and Fair Values of Financial Instruments (Tables)
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Jun. 30, 2013
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Fair Value Measurements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets Presented at Fair Value on a Recurring and Nonrecurring Basis | The table below sets forth the financial assets and liabilities that were accounted for on a recurring and nonrecurring basis by level within the fair value hierarchy as of June 30, 2013 (in thousands):
The table below sets forth the financial assets and liabilities that were accounted for on a recurring and nonrecurring basis by level within the fair value hierarchy as of December 31, 2012 (in thousands):
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Additional quantitative information about assets measured at fair value on a nonrecurring basis | The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which the Company has used level 3 inputs to determine fair value as of June 30, 2013 and December 31, 2012 (in thousands):
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Estimated Fair Value of Financial Instruments | The estimated fair values of the Company’s financial instruments were as follows at June 30, 2013 and December 31, 2012 (in thousands):
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Stock Compensation Plans (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Stock Compensation Plans [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Status of Shares Under the RRP | A summary of the status of the shares under the RRP and Stock Incentive Plan as of June 30, 2013 and 2012 and changes during the six months ended June 30, 2013 and 2012 is as follows:
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Option Activity Under the Option Plan | A summary of option activity under the Company’s Option Plan as of June 30, 2013 and 2012 and changes during the six months ended June 30, 2013 and 2012 is as follows:
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Consolidated Statement of Stockholders' Equity (Unaudited) (USD $)
In Thousands, except Share data, unless otherwise specified |
Common Stock [Member]
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Additional Paid-in Capital [Member]
|
Treasury Stock [Member]
|
Unallocated Common Stock Held by Benefit Plans [Member]
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Accumulated Other Comprehensive Income [Member]
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Retained Earnings [Member]
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Total
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BALANCE at Dec. 31, 2012 | $ 14 | $ 13,559 | $ (3,716) | $ (823) | $ 60 | $ 7,743 | $ 16,837 |
BALANCE (in shares) at Dec. 31, 2012 | 983,821 | 983,821 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Common stock released by ESOP | 33 | 52 | 85 | ||||
Treasury stock purchased (in shares) | (18,447) | ||||||
Treasury stock purchased | (281) | (281) | |||||
Stock based compensation expense | 60 | 60 | |||||
Release of vested RRP shares | (80) | 80 | 0 | ||||
Cash dividends declared | (88) | (88) | |||||
Net income | 313 | 313 | |||||
Other comprehensive loss | (27) | (27) | |||||
BALANCE at Jun. 30, 2013 | $ 14 | $ 13,572 | $ (3,997) | $ (691) | $ 33 | $ 7,968 | $ 16,899 |
BALANCE (in shares) at Jun. 30, 2013 | 965,374 | 965,374 |
Investment in Interest-Earning Time Deposits
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Investment in Interest-Earning Time Deposits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||
Investment in Interest-Earning Time Deposits | Note 3 – Investment in Interest-Earning Time Deposits The investment in interest-earning time deposits as of June 30, 2013 and December 31, 2012, by contractual maturity, are shown below:
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Financial Statement Presentation and Significant Accounting Policies
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6 Months Ended |
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Jun. 30, 2013
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Financial Statement Presentation and Significant Accounting Policies [Abstract] | |
Financial Statement Presentation and Significant Accounting Policies | Note 1 – Financial Statement Presentation and Significant Accounting Policies Basis of Financial Presentation.The consolidated financial statements include the accounts of Quaint Oak Bancorp, Inc. (the “Company”) and its wholly owned subsidiary, Quaint Oak Bank (the “Bank”) along with its wholly-owned subsidiaries. At June 30, 2013, the Bank has five wholly-owned subsidiaries, Quaint Oak Mortgage, LLC, Quaint Oak Real Estate, LLC, Quaint Oak Abstract, LLC, Quaint Oak Insurance Agency, LLC, and QOB Properties, LLC, each a Pennsylvania limited liability company. The mortgage, real estate and abstract companies offer mortgage banking, real estate sales and title abstract services, respectively, and began operation in July 2009. QOB Properties, LLC began operations in July 2012 and holds Bank properties acquired through a foreclosure proceeding or acceptance of a deed in lieu of foreclosure. Quaint Oak Insurance Agency, LLC is currently inactive. All significant intercompany balances and transactions have been eliminated. The Bank is subject to regulation by the Pennsylvania Department of Banking and Securities and the Federal Deposit Insurance Corporation. Pursuant to the Bank’s election under Section 10(l) of the Home Owners’ Loan Act, the Company is a savings and loan holding company regulated by the Board of Governors of the Federal Reserve System. The market area served by the Bank's two branch offices includes Bucks and Montgomery Counties, Pennsylvania, northeast Philadelphia and the surrounding area and the Lehigh Valley area of Pennsylvania. The principal deposit products offered by the Bank are certificates of deposit, passbook savings accounts, statement savings accounts and eSavings accounts. Loan products offered are fixed and adjustable rate residential and commercial mortgages, construction loans, home equity loans, auto loans, and lines of credit. The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (US GAAP) for interim information and with the instructions to Form 10-Q, as applicable to a smaller reporting company. Accordingly, they do not include all the information and footnotes required by US GAAP for complete financial statements. The foregoing consolidated financial statements are unaudited; but in the opinion of management include all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation thereof. The balances as of December 31, 2012 have been derived from the audited financial statements. These financial statements should be read in conjunction with the financial statements and notes thereto included in Quaint Oak Bancorp’s 2012 Annual Report on Form 10-K. The results of operations for the three and six months ended June 30, 2013 are not necessarily indicative of the results that may be expected for the year ending December 31, 2013. Use of Estimates in the Preparation of Financial Statements.The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. The Company’s most significant estimates are the determination of the allowance for loan losses, the assessment of other-than-temporary impairment of investment securities, valuation of other real estate owned, and the valuation of deferred tax assets. Loans Receivable. Loans receivable that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are stated at their outstanding unpaid principal balances, net of an allowance for loan losses and any deferred fees and costs. Interest income is accrued on the unpaid principal balance. Loan origination fees and costs are deferred and recognized as an adjustment of the yield (interest income) of the related loans. The Bank is generally amortizing these amounts over the contractual life of the loan. The loans receivable portfolio is segmented into residential loans, commercial real estate loans, construction loans and consumer loans. The residential loan segment has two classes: one-to-four family residential owner occupied loans and one-to-four residential family non-owner occupied loans. The commercial real estate loan segment consists of the following classes: multi-family (five or more) residential, commercial real estate and commercial lines of credit. Construction loans are generally granted for the purpose of building a single residential home. The consumer loan segment consists of the following classes: home equity loans and consumer non-real estate loans. Included in the home equity class are home equity loans and home equity lines of credit. Included in the consumer non-real estate loans are loans secured by saving accounts and auto loans. The accrual of interest is generally discontinued when principal or interest has become 90 days past due unless the loan is in the process of collection and is either guaranteed or well secured. When a loan is placed on nonaccrual status, unpaid interest credited to income in the current year is reversed and unpaid interest accrued in prior years is charged against the allowance for loan losses. Interest received on nonaccrual loans generally is either applied against principal or reported as interest income, according to management’s judgment as to the collectability of principal. Generally, a loan is restored to accrual status when the obligation is brought current, it has performed in accordance with the contractual terms for a reasonable period of time and the ultimate collectability of the total contractual principal and interest is no longer in doubt. Allowance for Loan Losses. The allowance for loan losses represents management’s estimate of losses inherent in the loan portfolio as of the balance sheet date and is recorded as a reduction to loans receivable. The allowance for loan losses is increased by the provision for loan losses, and decreased by charge-offs, net of recoveries. Loans deemed to be uncollectible are charged against the allowance for loan losses, and subsequent recoveries, if any, are credited to the allowance. All, or part, of the principal balance of loans receivable are charged off to the allowance as soon as it is determined that the repayment of all, or part, of the principal balance is highly unlikely. Because all identified losses are immediately charged off, no portion of the allowance for loan losses is restricted to any individual loan or groups of loans, and the entire allowance is available to absorb any and all loan losses. The allowance for loan losses is maintained at a level considered adequate to provide for losses that can be reasonably anticipated. Management performs a quarterly evaluation of the adequacy of the allowance. The allowance is based on the Company’s past loan loss experience, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral, composition of the loan portfolio, current economic conditions and other relevant factors. This evaluation is inherently subjective as it requires material estimates that may be susceptible to significant revision as more information becomes available. The allowance consists of specific, general and unallocated components. The specific component relates to loans that are designated as impaired. For loans that are designated as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan. The general component covers pools of loans by loan class. These pools of loans are evaluated for loss exposure based upon historical loss rates for each of these categories of loans, adjusted for qualitative factors. These significant factors may include changes in lending policies and procedures, changes in existing general economic and business conditions affecting our primary lending areas, credit quality trends, collateral value, loan volumes and concentrations, seasoning of the loan portfolio, recent loss experience in particular segments of the portfolio, duration of the current business cycle and bank regulatory examination results. The applied loss factors are reevaluated quarterly to ensure their relevance in the current economic environment. Residential owner occupied mortgage lending generally entails a lower risk of default than other types of lending. Consumer loans and commercial real estate loans generally involve more risk of collectability because of the type and nature of the collateral and, in certain cases, the absence of collateral. It is the Company’s policy to establish a specific reserve for loss on any delinquent loan when it determines that a loss is probable. An unallocated component is maintained to cover uncertainties that could affect management’s estimate of probable losses. The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating specific and general losses in the portfolio. A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not considered impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan by loan basis by either the present value of expected future cash flows discounted at the loan’s effective interest rate or the fair value of the collateral if the loan is collateral dependent. An allowance for loan losses is established for an impaired loan if its carrying value exceeds its estimated fair value. The estimated fair values of substantially all of the Company’s impaired loans are measured based on the estimated fair value of the loan’s collateral. A loan is identified as a troubled debt restructuring (“TDR”) if the Company, for economic or legal reasons related to a debtor’s financial difficulties, grants a concession to the debtor that it would not otherwise consider. Concessions granted under a TDR typically involve a temporary or permanent reduction in payments or interest rate or an extension of a loan’s stated maturity date at less than a current market rate of interest. Loans identified as TDRs are designated as impaired. For loans secured by real estate, estimated fair values are determined primarily through third-party appraisals. When a real estate secured loan becomes impaired, a decision is made regarding whether an updated certified appraisal of the real estate is necessary. This decision is based on various considerations, including the age of the most recent appraisal, the loan-to-value ratio based on the original appraisal and the condition of the property. Appraised values are discounted to arrive at the estimated selling price of the collateral, which is considered to be the estimated fair value. The discounts also include estimated costs to sell the property. The allowance calculation methodology includes further segregation of loan classes into risk rating categories. The borrower’s overall financial condition, repayment sources, guarantors and value of collateral, if appropriate, are evaluated annually for all loans (except one-to-four family residential owner-occupied loans) where the total amount outstanding to any borrower or group of borrowers exceeds $500,000, or when credit deficiencies arise, such as delinquent loan payments. Credit quality risk ratings include regulatory classifications of special mention, substandard, doubtful and loss. Loans designated as special mention have potential weaknesses that deserve management’s close attention. If uncorrected, the potential weaknesses may result in deterioration of the repayment prospects. Loans classified substandard have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They include loans that are inadequately protected by the current sound net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans classified doubtful have all the weaknesses inherent in loans classified substandard with the added characteristic that collection or liquidation in full, on the basis of current conditions and facts, is highly improbable. Loans classified as a loss are considered uncollectible and are charged to the allowance for loan losses. Loans not classified are rated pass. In addition, Federal regulatory agencies, as an integral part of their examination process, periodically review the Company’s allowance for loan losses and may require the Company to recognize additions to the allowance based on their judgments about information available to them at the time of their examination, which may not be currently available to management. Based on management’s comprehensive analysis of the loan portfolio, management believes the current level of the allowance for loan losses is adequate. Loans Held for Sale. Loans originated by the Bank’s mortgage banking subsidiary, Quaint Oak Mortgage, LLC, are intended for sale in the secondary market and are carried at the lower of cost or fair value (LOCOM). Gains and losses on loan sales (sales proceeds minus carrying value) are recorded in noninterest income, and direct loan origination costs and fees are deferred at origination of the loan and are recognized in noninterest income upon sale of the loan. Federal Home Loan Bank Stock.Federal law requires a member institution of the Federal Home Loan Bank (FHLB) system to hold restricted stock of its district Federal Home Loan Bank according to a predetermined formula. FHLB stock is carried at cost and evaluated for impairment. When evaluating FHLB stock for impairment, its value is determined based on the ultimate recoverability of the par value of the stock. We evaluate our holdings of FHLB stock for impairment each reporting period. No impairment charges were recognized on FHLB stock during the three and six months ended June 30, 2013 and 2012. Other Real Estate Owned. Other real estate owned or foreclosed assets are comprised of property acquired through a foreclosure proceeding or acceptance of a deed in lieu of foreclosure and loans classified as in-substance foreclosures. A loan is classified as in-substance foreclosure when the Bank has taken possession of the collateral regardless of whether formal foreclosure proceedings take place. Other real estate properties are initially recorded at fair value, net of estimated selling costs at the date of foreclosure, establishing a new cost basis. After foreclosure, valuations are periodically performed by management and the real estate is carried at the lower of cost or fair value less estimated costs to sell. Net revenue and expenses from operations and additions to the valuation allowance are included in other expenses. Share-Based Compensation.Compensation expense for share-based compensation awards is based on the grant date fair value of the award. That cost is recognized over the period during which an employee is required to provide service in exchange for the award. At June 30, 2013, the Company has three share-based plans: the 2008 Recognition and Retention Plan (“RRP”), the 2008 Stock Option Plan, and the 2013 Stock Incentive Plan. Awards under these plans were made in May 2008 and 2013. These plans are more fully described in Note 8. The Company also has an employee stock ownership plan (“ESOP”). This plan is more fully described in Note 8. As ESOP shares are committed to be released and allocated among participants, the Company recognizes compensation expense equal to the average market price of the shares over the period earned. Comprehensive Income (Loss). Accounting principles generally accepted in the United States of America require that recognized revenue, expenses, gains and losses be included in net income. Certain changes in assets and liabilities, such as unrealized gains and losses on available for sale securities, are reported as a separate component of the equity section of the balance sheet and along with net income, are components of comprehensive income. Earnings per Share.Amounts reported in earnings per share reflect earnings available to common stockholders’ for the period divided by the weighted average number of shares of common stock outstanding during the period, exclusive of unearned ESOP shares, unvested restricted stock (RRP) shares and treasury shares. Stock options and unvested restricted stock are regarded as potential common stock and are considered in the diluted earnings per share calculations to the extent they would have a dilutive effect if converted to common stock, computed using the “treasury stock” method. Recent Accounting Pronouncements. In February 2013, the FASB issued ASU No. 2013-02, Comprehensive Income, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. The objective of ASU 2013-02 is to improve the reporting of reclassifications out of accumulated other comprehensive income. The amendments included in ASU 2013-02 do not change the current requirements for reporting net income or other comprehensive income in financial statements. However, the amendments require an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. For public entities, the amendments are effective prospectively for reporting periods beginning after December 15, 2012. As the adoption of ASU 2013-02 amends only disclosure requirements, the adoption had no impact on the Company’s results of operations or financial position. Reclassifications.Certain items in the 2012 consolidated financial statements have been reclassified to conform to the presentation in the 2013 consolidated financial statements. Such reclassifications did not have a material impact on the presentation of the overall financial statements. The reclassifications had no effect on net income. |
Earnings Per Share (Details) (USD $)
In Thousands, except Share data, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2013
Component
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Jun. 30, 2012
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Jun. 30, 2013
Component
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Jun. 30, 2012
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Earnings Per Share [Abstract] | ||||
Number of components in earnings per share | 2 | 2 | ||
Dilutive stock options (in shares) | 107,570 | 107,570 | ||
Antidilutive outstanding stock options (in shares) | 107,570 | 107,570 | ||
Net income | $ 173 | $ 373 | $ 313 | $ 549 |
Weighted average shares outstanding - basic (in shares) | 886,437 | 886,437 | 889,534 | 883,408 |
Effect of dilutive common stock equivalents | 40,380 | 4,767 | 35,952 | 5,427 |
Adjusted weighted average shares outstanding - diluted (in shares) | 926,817 | 891,204 | 925,486 | 888,835 |
Basic earnings per share (in dollars per share) | $ 0.20 | $ 0.42 | $ 0.35 | $ 0.62 |
Diluted earnings per share (in dollars per share) | $ 0.19 | $ 0.42 | $ 0.34 | $ 0.62 |
Loans Receivable, Net and Allowance for Loan Losses (Details) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2013
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Mar. 31, 2013
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Dec. 31, 2012
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Jun. 30, 2012
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Mar. 31, 2012
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Dec. 31, 2011
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---|---|---|---|---|---|---|
Composition of loans receivable [Line Items] | ||||||
Total Loans | $ 93,597 | $ 85,256 | ||||
Deferred loan fees and costs | (211) | (105) | ||||
Allowance for loan losses | (952) | (912) | (860) | (951) | (872) | (805) |
Net Loans | 92,434 | 84,291 | ||||
Auto and Equipment Loans [Member]
|
||||||
Composition of loans receivable [Line Items] | ||||||
Total Loans | 72 | 93 | ||||
Loans Secured By Deposits [member]
|
||||||
Composition of loans receivable [Line Items] | ||||||
Total Loans | 34 | 69 | ||||
Real Estate Loans [Member]
|
||||||
Composition of loans receivable [Line Items] | ||||||
Total Loans | 93,491 | 85,094 | ||||
Real Estate Loans [Member] | One-to-four Family Residential [Member]
|
||||||
Composition of loans receivable [Line Items] | ||||||
Total Loans | 47,141 | 45,390 | ||||
Real Estate Loans [Member] | One-to-four Family Residential [Member] | Owner Occupied [Member]
|
||||||
Composition of loans receivable [Line Items] | ||||||
Total Loans | 9,349 | 10,272 | ||||
Allowance for loan losses | (67) | (72) | (77) | (76) | (107) | (114) |
Real Estate Loans [Member] | One-to-four Family Residential [Member] | Non-owner Occupied [Member]
|
||||||
Composition of loans receivable [Line Items] | ||||||
Total Loans | 37,792 | 35,118 | ||||
Allowance for loan losses | (420) | (432) | (368) | (409) | (375) | (351) |
Real Estate Loans [Member] | Multi-family (Five or More) Residential [Member]
|
||||||
Composition of loans receivable [Line Items] | ||||||
Total Loans | 3,803 | 3,315 | ||||
Allowance for loan losses | (23) | (25) | (20) | (21) | (24) | (26) |
Real Estate Loans [Member] | Commercial Real Estate [Member]
|
||||||
Composition of loans receivable [Line Items] | ||||||
Total Loans | 20,745 | 18,694 | ||||
Real Estate Loans [Member] | Commercial Lines of Credit [Member]
|
||||||
Composition of loans receivable [Line Items] | ||||||
Total Loans | 1,747 | 1,901 | ||||
Real Estate Loans [Member] | Construction [Member]
|
||||||
Composition of loans receivable [Line Items] | ||||||
Total Loans | 14,586 | 9,765 | ||||
Allowance for loan losses | (95) | (75) | (63) | (52) | (42) | (35) |
Real Estate Loans [Member] | Home Equity Loan [Member]
|
||||||
Composition of loans receivable [Line Items] | ||||||
Total Loans | 5,469 | 6,029 | ||||
Allowance for loan losses | $ (110) | $ (89) | $ (68) | $ (76) | $ (85) | $ (83) |
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