x |
Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
For the quarterly period ended: June 30, 2013 | |
or | |
o |
Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
For the transition period from ______ to ______
|
MALVERN BANCORP, INC.
|
(Exact name of Registrant as specified in its charter)
|
Pennsylvania
|
45-5307782
|
|
(State or Other Jurisdiction of
|
(I.R.S. Employer
|
|
Incorporation or Organization)
|
Identification Number)
|
|
42 E. Lancaster Avenue, Paoli, Pennsylvania
|
19301
|
|
(Address of Principal Executive Offices)
|
(Zip Code)
|
(610) 644-9400
|
||
(Registrant’s Telephone Number, Including Area Code)
|
Large accelerated filer | o | Accelerated filer | o |
Non-accelerated filer | o | Smaller reporting company | x |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). YES o NO x |
Page
|
||||||
PART I—FINANCIAL INFORMATION
|
||||||
Item 1.
|
Financial Statements
|
|||||
2
|
||||||
3
|
||||||
4
|
||||||
5
|
||||||
6
|
||||||
7
|
||||||
46
|
||||||
60
|
||||||
60
|
||||||
60
|
||||||
60
|
||||||
60
|
||||||
60
|
||||||
60
|
||||||
61
|
||||||
61
|
||||||
62
|
Malvern Bancorp, Inc. and Subsidiaries
|
June 30, 2013
|
September 30, 2012
|
|||||||
(Dollars in thousands, except per share data)
|
||||||||
Assets
|
||||||||
Cash and due from depository institutions
|
$ | 1,275 | $ | 1,413 | ||||
Interest bearing deposits in depository institutions
|
66,108 | 130,497 | ||||||
Cash and Cash Equivalents
|
67,383 | 131,910 | ||||||
Investment securities available for sale, at fair value
|
125,451 | 80,508 | ||||||
Restricted stock, at cost
|
3,718 | 4,147 | ||||||
Loans receivable, net of allowance for loan losses of $6,060 and $7,581, respectively
|
423,943 | 457,001 | ||||||
Other real estate owned
|
5,134 | 4,594 | ||||||
Accrued interest receivable
|
1,501 | 1,521 | ||||||
Property and equipment, net
|
7,380 | 7,675 | ||||||
Deferred income taxes, net
|
8,791 | 6,775 | ||||||
Bank-owned life insurance
|
21,196 | 15,286 | ||||||
Other assets
|
1,410 | 2,395 | ||||||
Total Assets
|
$ | 665,907 | $ | 711,812 | ||||
Liabilities and Shareholders’ Equity
|
||||||||
Liabilities
|
||||||||
Deposits:
|
||||||||
Deposits-noninterest-bearing
|
$ | 21,895 | $ | 23,062 | ||||
Deposits-interest-bearing
|
495,243 | 517,926 | ||||||
Total Deposits
|
517,138 | 540,988 | ||||||
FHLB advances
|
48,000 | 48,085 | ||||||
Advances from borrowers for taxes and insurance
|
3,571 | 1,006 | ||||||
Accrued interest payable
|
269 | 266 | ||||||
Stock subscription escrow
|
- | 56,677 | ||||||
Other liabilities
|
2,380 | 2,154 | ||||||
Total Liabilities
|
571,358 | 649,176 | ||||||
Commitments and Contingencies
|
- | - | ||||||
Shareholders’ Equity
|
||||||||
Preferred stock, $0.01 par value, 10,000,000 shares authorized, none issued
|
- | - | ||||||
Common stock, $0.01 par value, 40,000,000 shares authorized, issued and outstanding: 6,558,473 and 6,102,500, respectively
|
66 | 62 | ||||||
Additional paid-in capital
|
60,296 | 25,846 | ||||||
Retained earnings
|
38,563 | 38,596 | ||||||
Treasury stock—at cost, 2013, 0 shares; 2012, 50,000 shares
|
- | (477 | ) | |||||
Unearned Employee Stock Ownership Plan (ESOP) shares
|
(2,103 | ) | (2,032 | ) | ||||
Accumulated other comprehensive (loss) income
|
(2,273 | ) | 641 | |||||
Total Shareholders’ Equity
|
94,549 | 62,636 | ||||||
Total Liabilities and Shareholders’ Equity
|
$ | 665,907 | $ | 711,812 |
Malvern Bancorp, Inc. and Subsidiaries
|
Three Months Ended June 30,
|
Nine Months Ended June 30,
|
|||||||||||||||
2013
|
2012
|
2013
|
2012
|
|||||||||||||
(Dollars in thousands, except per share data)
|
||||||||||||||||
Interest and Dividend Income
|
||||||||||||||||
Loans, including fees
|
$ | 4,931 | $ | 5,894 | $ | 15,465 | $ | 18,352 | ||||||||
Investment securities, taxable
|
504 | 387 | 1,199 | 1,246 | ||||||||||||
Investment securities, tax-exempt
|
57 | 23 | 166 | 33 | ||||||||||||
Dividends, restricted stock
|
2 | 1 | 10 | 2 | ||||||||||||
Interest-bearing cash accounts
|
34 | 16 | 101 | 34 | ||||||||||||
Total Interest and Dividend Income
|
5,528 | 6,321 | 16,941 | 19,667 | ||||||||||||
Interest Expense
|
||||||||||||||||
Deposits
|
1,200 | 1,589 | 4,134 | 5,131 | ||||||||||||
Long-term borrowings
|
426 | 427 | 1,277 | 1,289 | ||||||||||||
Total Interest Expense
|
1,626 | 2,016 | 5,411 | 6,420 | ||||||||||||
Net Interest Income
|
3,902 | 4,305 | 11,530 | 13,247 | ||||||||||||
(Recovery) Provision for Loan Losses
|
(190 | ) | 335 | 1,255 | 360 | |||||||||||
Net Interest Income after (Recovery) Provision for Loan Losses
|
4,092 | 3,970 | 10,275 | 12,887 | ||||||||||||
Other Income
|
||||||||||||||||
Service charges and other fees
|
244 | 218 | 783 | 686 | ||||||||||||
Rental income – other
|
62 | 59 | 188 | 192 | ||||||||||||
Gain on sale of investments, net
|
293 | 40 | 503 | 663 | ||||||||||||
Loss on disposal of fixed assets
|
(1 | ) | - | (1 | ) | - | ||||||||||
Loss on sale of loans, net
|
(314 | ) | - | (128 | ) | - | ||||||||||
Earnings on bank-owned life insurance
|
160 | 134 | 1,030 | 400 | ||||||||||||
Total Other Income
|
444 | 451 | 2,375 | 1,941 | ||||||||||||
Other Expense
|
||||||||||||||||
Salaries and employee benefits
|
1,900 | 1,689 | 5,695 | 5,001 | ||||||||||||
Occupancy expense
|
516 | 520 | 1,527 | 1,568 | ||||||||||||
Federal deposit insurance premium
|
211 | 204 | 648 | 657 | ||||||||||||
Advertising
|
158 | 159 | 620 | 581 | ||||||||||||
Data processing
|
321 | 319 | 953 | 939 | ||||||||||||
Professional fees
|
456 | 279 | 1,271 | 1,193 | ||||||||||||
Other real estate owned expense, net
|
364 | 495 | 1,009 | 1,130 | ||||||||||||
Other operating expenses
|
510 | 452 | 1,598 | 1,397 | ||||||||||||
Total Other Expenses
|
4,436 | 4,117 | 13,321 | 12,466 | ||||||||||||
Income (Loss) before income tax expense (benefit)
|
100 | 304 | (671 | ) | 2,362 | |||||||||||
Income tax (benefit) expense
|
(41 | ) | 32 | (638 | ) | 620 | ||||||||||
Net Income (Loss)
|
$ | 141 | $ | 272 | $ | (33 | ) | $ | 1,742 | |||||||
Basic Earnings (Loss) Per Share*
|
$ | 0.02 | $ | 0.04 | $ | (0.01 | ) | $ | 0.27 | |||||||
Dividends Declared Per Share
|
$ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 |
See notes to unaudited consolidated financial statements.
|
3 |
Malvern Bancorp, Inc. and Subsidiaries
|
Consolidated Statements of Comprehensive (Loss) Income (Unaudited) |
Three Months Ended June 30,
|
Nine Months Ended June 30,
|
|||||||||||||||
2013
|
2012
|
2013
|
2012
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Net Income (Loss)
|
$ | 141 | $ | 272 | $ | (33 | ) | $ | 1,742 | |||||||
Other Comprehensive (Loss) Income:
|
||||||||||||||||
Changes in unrealized net-gains and losses on securities available for sale
|
(3,598 | ) | 43 | (3,912 | ) | 823 | ||||||||||
Gains realized in net income(loss)(1)
|
(293 | ) | (40 | ) | (503 | ) | (663 | ) | ||||||||
(3,891 | ) | 3 | (4,415 | ) | 160 | |||||||||||
Deferred income tax effect
|
1,323 | (1 | ) | 1,501 | (54 | ) | ||||||||||
Total other comprehensive (loss) income
|
(2,568 | ) | 2 | (2,914 | ) | 106 | ||||||||||
Total comprehensive (loss) income
|
$ | (2,427 | ) | $ | 274 | $ | (2,947 | ) | $ | 1,848 |
See notes to unaudited consolidated financial statements.
|
4 |
Malvern Bancorp, Inc. and Subsidiaries |
Consolidated Statements of Changes in Shareholders’ Equity (Unaudited) |
Common
Stock |
Additional
Paid-In Capital |
Retained
Earnings |
Treasury
Stock |
Unearned
ESOP Shares |
Accumulated Other Comprehensive (Loss) Income
|
Total Shareholders’ Equity
|
||||||||||||||||||||||
(Dollars in thousands, except share and per share data)
|
||||||||||||||||||||||||||||
Balance, October 1, 2011
|
$ | 62 | $ | 25,889 | $ | 36,637 | $ | (477 | ) | $ | (2,178 | ) | $ | 351 | $ | 60,284 | ||||||||||||
Net Income
|
- | - | 1,742 | - | - | - | 1,742 | |||||||||||||||||||||
Other comprehensive income
|
- | - | - | - | - | 106 | 106 | |||||||||||||||||||||
Committed to be released ESOP shares (10,053 shares)
|
- | (37 | ) | - | - | 109 | - | 72 | ||||||||||||||||||||
Balance, June 30, 2012
|
$ | 62 | $ | 25,852 | $ | 38,379 | $ | (477 | ) | $ | (2,069 | ) | $ | 457 | $ | 62,204 | ||||||||||||
Balance, October 1, 2012
|
$ | 62 | $ | 25,846 | $ | 38,596 | $ | (477 | ) | $ | (2,032 | ) | $ | 641 | $ | 62,636 | ||||||||||||
Net Loss
|
- | - | (33 | ) | - | - | - | (33 | ) | |||||||||||||||||||
Other comprehensive loss
|
- | - | - | - | - | (2,914 | ) | (2,914 | ) | |||||||||||||||||||
Cancellation of common stock
|
(62 | ) | 62 | - | - | - | - | - | ||||||||||||||||||||
Cancellation of treasury stock
|
- | (477 | ) | - | 477 | - | - | - | ||||||||||||||||||||
Additional ESOP shares converted at exchange rate of 1.0748 (18,040 shares at $10/share)
|
- | 180 | - | - | (180 | ) | - | - | ||||||||||||||||||||
Dissolution of mutual holding company
|
- | 100 | - | - | - | - | 100 | |||||||||||||||||||||
Proceeds from issuance of common stock, net of offering expenses of $1.6 million
|
66 | 34,567 | - | - | - | - | 34,633 | |||||||||||||||||||||
Committed to be released ESOP shares (10,771 shares)
|
- | 18 | - | - | 109 | - | 127 | |||||||||||||||||||||
Balance, June 30, 2013
|
$ | 66 | $ | 60,296 | $ | 38,563 | $ | - | $ | (2,103 | ) | $ | (2,273 | ) | $ | 94,549 |
See notes to unaudited consolidated financial statements. |
5 |
Malvern Bancorp, Inc. and Subsidiaries |
Consolidated Statements of Cash Flows (Unaudited) |
Nine Months Ended June 30, | ||||||||
2013
|
2012
|
|||||||
(In thousands)
|
||||||||
Cash Flows from Operating Activities
|
||||||||
Net (loss) income
|
$ | (33 | ) | $ | 1,742 | |||
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
|
||||||||
Depreciation expense
|
523 | 547 | ||||||
Provision for loan losses
|
1,255 | 360 | ||||||
Deferred income taxes (benefit) expense
|
(515 | ) | 596 | |||||
ESOP expense
|
127 | 72 | ||||||
Accretion of premiums and discounts on investment securities, net
|
(257 | ) | (162 | ) | ||||
(Accretion) amortization of mortgage servicing rights
|
(7 | ) | 61 | |||||
Net gain on sale of investment securities available for sale
|
(503 | ) | (499 | ) | ||||
Net gain on sale of investment securities held to maturity
|
- | (164 | ) | |||||
Net loss on disposal of fixed assets
|
1 | - | ||||||
Net loss on sale of loans
|
128 | - | ||||||
Proceeds on sale of secondary market loans | 23,277 | - | ||||||
(Gain) loss on sale of other real estate owned
|
(110 | ) | 70 | |||||
Write down of other real estate owned
|
966 | 812 | ||||||
Amortization of loan origination fees and costs
|
(534 | ) | (848 | ) | ||||
Decrease in accrued interest receivable
|
20 | 349 | ||||||
Increase in accrued interest payable
|
3 | 11 | ||||||
(Decrease) increase in other liabilities
|
(981 | ) | 70 | |||||
Earnings on bank-owned life insurance
|
(1,030 | ) | (400 | ) | ||||
Decrease (increase) in other assets
|
735 | (357 | ) | |||||
Decrease in prepaid FDIC assessment
|
391 | 626 | ||||||
Net Cash Provided by Operating Activities
|
23,456 | 2,886 | ||||||
Cash Flows from Investing Activities
|
||||||||
Proceeds from maturities and principal collections:
|
||||||||
Investment securities held to maturity
|
- | 292 | ||||||
Investment securities available for sale
|
22,344 | 22,890 | ||||||
Proceeds from sales of investment securities held to maturity
|
- | 2,996 | ||||||
Proceeds from sales of investment securities available for sale
|
16,031 | 22,854 | ||||||
Purchases of investment securities available for sale
|
(76,871 | ) | (44,664 | ) | ||||
Proceeds from sale of loans
|
1,667 | - | ||||||
Loan purchases
|
(23,315 | ) | (23,061 | ) | ||||
Loan originations and principal collections, net
|
17,290 | 52,128 | ||||||
Proceeds from sale of other real estate owned
|
1,792 | 4,374 | ||||||
Additions to mortgage servicing rights
|
(129 | ) | (53 | ) | ||||
Purchases of bank-owned life insurance
|
(6,000 | ) | - | |||||
Proceeds from death benefit of bank-owned life insurance
|
1,121 | - | ||||||
Net decrease in restricted stock
|
428 | 763 | ||||||
Proceeds from sale of property and equipment
|
2 | - | ||||||
Purchases of property and equipment
|
(232 | ) | (147 | ) | ||||
Net Cash (Used in) Provided by Investing Activities
|
(45,872 | ) | 38,372 | |||||
Cash Flows from Financing Activities
|
||||||||
Net decrease in deposits
|
(23,850 | ) | (16,210 | ) | ||||
Repayment of long-term borrowings
|
(85 | ) | (758 | ) | ||||
Increase in advances from borrowers for taxes and insurance
|
2,565 | 2,450 | ||||||
Return of excess stock subscription funds
|
(20,841 | ) | - | |||||
Cash from mutual holding company reorganization
|
100 | - | ||||||
Net Cash Used in Financing Activities
|
(42,111 | ) | (14,518 | ) | ||||
Net (Decrease) Increase in Cash and Cash Equivalents
|
(64,527 | ) | 26,740 | |||||
Cash and Cash Equivalents - Beginning
|
131,910 | 33,496 | ||||||
Cash and Cash Equivalents – Ending
|
$ | 67,383 | $ | 60,236 | ||||
Supplementary Cash Flows Information
|
||||||||
Interest paid
|
$ | 5,408 | $ | 6,409 | ||||
Income taxes paid
|
$ | 12 | $ | - | ||||
Non-cash transfer of loans to other real estate owned
|
$ | 3,188 | $ | 1,151 | ||||
Non-cash transfer of loans to investment securities available for sale
|
$ | - | $ | 10,671 | ||||
Transfer of mortgage-backed securities held to maturity to investment and mortgage-backed securities available for sale
|
$ | 10,102 | $ | 746 | ||||
Subscription funds transferred to equity
|
$ | 34,633 | $ | - |
See notes to unaudited consolidated financial statements.
|
6 |
7 |
8 |
9 |
10 |
1.
|
Lending policies and procedures, including underwriting standards and collection, charge-off, and recovery practices.
|
|
2.
|
National, regional, and local economic and business conditions as well as the condition of various market segments, including the value of underlying collateral for collateral dependent loans.
|
|
3.
|
The nature and volume of the loan portfolio and terms of loans.
|
|
4.
|
The experience, ability, and depth of lending management and staff.
|
|
5.
|
The volume and severity of past due, classified and nonaccrual loans as well as loan modifications.
|
|
6.
|
The quality of the Company’s loan review system, and the degree of oversight by the Company’s Board of Directors.
|
|
7.
|
The existence and effect of any concentrations of credit and changes in the level of such concentrations.
|
|
8.
|
Value of underlying collateral.
|
11 |
12 |
13 |
14 |
15 |
In July 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2013-11, “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists.” This amendment addresses the financial statement presentation of an unrecognized tax benefit, or a portion of an unrecognized tax benefit, as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. The amendments in this Update are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. Early adoption is permitted. The amendments should be applied prospectively to all unrecognized tax benefits that exist at the effective date. The adoption of this ASU is not expected to have a material impact on the Company’s consolidated financial statements.
16 |
Three Months Ended June 30,
|
Nine Months Ended June 30,
|
|||||||||||||||
2013
|
2012
|
2013
|
2012
|
|||||||||||||
(Dollars in thousands, except per share amounts)
|
||||||||||||||||
Net Income (Loss)
|
$ | 141 | $ | 272 | $ | (33 | ) | $ | 1,742 | |||||||
Average common shares outstanding
|
6,558,473 | 6,102,500 | 6,540,100 | 6,102,500 | ||||||||||||
Exchange rate from offering
|
- | 1.0748 | - | 1.0748 | ||||||||||||
Adjusted weighted average shares outstanding
|
6,558,473 | 6,558,967 | 6,540,100 | 6,558,967 | ||||||||||||
Average unearned ESOP shares
|
(192,147 | ) | (202,175 | ) | (195,056 | ) | (205,798 | ) | ||||||||
Weighted average shares outstanding – basic
|
6,366,326 | 6,356,792 | 6,345,044 | 6,353,169 | ||||||||||||
Earnings (Loss) per share – basic
|
$ | 0.02 | $ | 0.04 | $ | (0.01 | ) | $ | 0.27 |
Note 4 – Employee Stock Ownership Plan
|
17 |
Note 5 - Investment Securities
|
June 30, 2013
|
||||||||||||||||
Amortized
Cost
|
Gross
Unrealized Gains |
Gross
Unrealized Losses |
Fair
Value
|
|||||||||||||
(In thousands)
|
||||||||||||||||
U.S. government agencies
|
$ | 19,787 | $ | 2 | $ | (672 | ) | $ | 19,117 | |||||||
State and municipal obligations
|
12,392 | 20 | (470 | ) | 11,942 | |||||||||||
Single issuer trust preferred security
|
1,000 | - | (189 | ) | 811 | |||||||||||
Corporate debt securities
|
1,756 | 22 | (8 | ) | 1,770 | |||||||||||
34,935 | 44 | (1,339 | ) | 33,640 | ||||||||||||
Mortgage-backed securities:
|
||||||||||||||||
FNMA:
|
||||||||||||||||
Adjustable-rate
|
1,051 | 58 | - | 1,109 | ||||||||||||
Fixed-rate
|
19,344 | 7 | (789 | ) | 18,562 | |||||||||||
FHLMC:
|
||||||||||||||||
Adjustable-rate
|
209 | 10 | - | 219 | ||||||||||||
Fixed-rate
|
13,668 | - | (576 | ) | 13,092 | |||||||||||
CMO, fixed-rate
|
59,687 | 207 | (1,065 | ) | 58,829 | |||||||||||
93,959 | 282 | (2,430 | ) | 91,811 | ||||||||||||
$ | 128,894 | $ | 326 | $ | (3,769 | ) | $ | 125,451 |
18 |
Note 5 - Investment Securities (Continued)
|
September 30, 2012
|
||||||||||||||||
Amortized
Cost
|
Gross
Unrealized Gains |
Gross
Unrealized Losses |
Fair
Value
|
|||||||||||||
(In thousands)
|
||||||||||||||||
U.S. government agencies
|
$ | 23,674 | $ | 247 | $ | - | $ | 23,921 | ||||||||
FHLB notes
|
695 | 1 | - | 696 | ||||||||||||
State and municipal obligations
|
9,217 | 186 | (16 | ) | 9,387 | |||||||||||
Single issuer trust preferred security
|
1,000 | - | (236 | ) | 764 | |||||||||||
Corporate debt securities
|
2,006 | 51 | - | 2,057 | ||||||||||||
36,592 | 485 | (252 | ) | 36,825 | ||||||||||||
Mortgage-backed securities:
|
||||||||||||||||
FNMA:
|
||||||||||||||||
Adjustable-rate
|
1,144 | 71 | - | 1,215 | ||||||||||||
Fixed-rate
|
647 | 63 | - | 710 | ||||||||||||
FHLMC, adjustable-rate
|
248 | 13 | - | 261 | ||||||||||||
GNMA, fixed-rate
|
1 | - | - | 1 | ||||||||||||
CMO, fixed-rate
|
40,904 | 600 | (8 | ) | 41,496 | |||||||||||
42,944 | 747 | (8 | ) | 43,683 | ||||||||||||
$ | 79,536 | $ | 1,232 | $ | (260 | ) | $ | 80,508 |
19 |
Note 5 - Investment Securities (Continued)
|
June 30, 2013
|
||||||||||||||||||||||||
Less than 12 Months
|
More than 12 Months
|
Total
|
||||||||||||||||||||||
Fair Value
|
Unrealized
Losses
|
Fair Value
|
Unrealized
Losses
|
Fair Value
|
Unrealized Losses
|
|||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||
Investment Securities Available for Sale:
|
||||||||||||||||||||||||
U.S. government obligations and agencies
|
$ | 18,115 | $ | (672 | ) | $ | - | $ | - | $ | 18,115 | $ | (672 | ) | ||||||||||
State and municipal obligations
|
10,751 | (470 | ) | - | - | 10,751 | (470 | ) | ||||||||||||||||
Single issuer trust preferred security
|
- | - | 811 | (189 | ) | 811 | (189 | ) | ||||||||||||||||
Corporate securities
|
996 | (8 | ) | - | - | 996 | (8 | ) | ||||||||||||||||
Mortgage-backed securities:
|
||||||||||||||||||||||||
FNMA, fixed-rate
|
18,451 | (789 | ) | - | - | 18,451 | (789 | ) | ||||||||||||||||
FHLMC, fixed-rate
|
13,092 | (576 | ) | - | - | 13,092 | (576 | ) | ||||||||||||||||
CMO, fixed rate
|
40,675 | (1,065 | ) | - | - | 40,675 | (1,065 | ) | ||||||||||||||||
$ | 102,080 | $ | (3,580 | ) | $ | 811 | $ | (189 | ) | $ | 102,891 | $ | (3,769 | ) |
September 30, 2012
|
||||||||||||||||||||||||
Less than 12 Months
|
More than 12 Months
|
Total
|
||||||||||||||||||||||
Fair Value
|
Unrealized
Losses
|
Fair Value
|
Unrealized
Losses
|
Fair Value
|
Unrealized
Losses
|
|||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||
Investment Securities Available for Sale:
|
||||||||||||||||||||||||
State and municipal obligations
|
$ | - | $ | - | $ | 18 | $ | (16 | ) | $ | 18 | $ | (16 | ) | ||||||||||
Single issuer trust preferred security
|
- | - | 764 | (236 | ) | 764 | (236 | ) | ||||||||||||||||
Mortgage-backed securities:
|
||||||||||||||||||||||||
CMO, fixed-rate
|
2,527 | (8 | ) | - | - | 2,527 | (8 | ) | ||||||||||||||||
$ | 2,527 | $ | (8 | ) | $ | 782 | $ | (252 | ) | $ | 3,309 | $ | (260 | ) |
20 |
Note 5 - Investment Securities (Continued)
|
Available for Sale
|
||||||||
Amortized Cost
|
Fair
Value
|
|||||||
(In thousands)
|
||||||||
Within 1 year
|
$ | 2,652 | $ | 2,471 | ||||
Over 1 year through 5 years
|
3,775 | 3,774 | ||||||
After 5 years through 10 years
|
27,039 | 25,986 | ||||||
Over 10 years
|
1,469 | 1,409 | ||||||
34,935 | 33,640 | |||||||
Mortgage-backed securities
|
93,959 | 91,811 | ||||||
$ | 128,894 | $ | 125,451 |
21 |
June 30, 2013
|
September 30, 2012
|
|||||||
(In thousands)
|
||||||||
Residential mortgage
|
$ | 237,670 | $ | 231,803 | ||||
Construction and Development:
|
||||||||
Residential and commercial
|
15,620 | 20,500 | ||||||
Land
|
2,990 | 632 | ||||||
Total Construction and Development
|
18,610 | 21,132 | ||||||
Commercial:
|
||||||||
Commercial real estate
|
84,327 | 112,199 | ||||||
Multi-family
|
2,111 | 2,087 | ||||||
Other
|
6,380 | 7,517 | ||||||
Total Commercial
|
92,818 | 121,803 | ||||||
Consumer:
|
||||||||
Home equity lines of credit
|
20,320 | 20,959 | ||||||
Second mortgages
|
56,515 | 65,703 | ||||||
Other
|
1,761 | 762 | ||||||
Total Consumer
|
78,596 | 87,424 | ||||||
Total loans
|
427,694 | 462,162 | ||||||
Deferred loan costs, net
|
2,309 | 2,420 | ||||||
Allowance for loan losses
|
(6,060 | ) | (7,581 | ) | ||||
Total loans receivable, net
|
$ | 423,943 | $ | 457,001 |
22 |
Three Months Ended June 30, 2013
|
||||||||||||||||||||||||||||||||||||||||||||
Construction and Development
|
Commercial
|
Consumer
|
||||||||||||||||||||||||||||||||||||||||||
Residential Mortgage
|
Residential and Commercial
|
Land
|
Commercial
Real
Estate
|
Multi-family
|
Other
|
Home
Equity
Lines of
Credit
|
Second Mortgages
|
Other
|
Unallocated
|
Total
|
||||||||||||||||||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||||||||||||||||||||||
Allowance for loan losses:
|
||||||||||||||||||||||||||||||||||||||||||||
Beginning balance
|
$ | 1,431 | $ | 723 | $ | 9 | $ | 2,404 | $ | 111 | $ | 79 | $ | 136 | $ | 1,361 | $ | 7 | $ | 41 | $ | 6,302 | ||||||||||||||||||||||
Charge-offs
|
(35 | ) | (87 | ) | - | (216 | ) | - | - | - | (40 | ) | (2 | ) | - | (380 | ) | |||||||||||||||||||||||||||
Recoveries
|
175 | - | - | 113 | - | 1 | 1 | 36 | 2 | - | 328 | |||||||||||||||||||||||||||||||||
Provision (credit)
|
(134 | ) | 89 | - | (207 | ) | (2 | ) | (5 | ) | (1 | ) | 74 | 10 | (14 | ) | (190 | ) | ||||||||||||||||||||||||||
Ending balance
|
$ | 1,437 | $ | 725 | $ | 9 | $ | 2,094 | $ | 109 | $ | 75 | $ | 136 | $ | 1,431 | $ | 17 | $ | 27 | $ | 6,060 |
23 |
Nine Months Ended June 30, 2013 | ||||||||||||||||||||||||||||||||||||||||||||
Construction and Development
|
Commercial
|
Consumer
|
||||||||||||||||||||||||||||||||||||||||||
Residential Mortgage
|
Residential and Commercial
|
Land
|
Commercial
Real
Estate
|
Multi-family
|
Other
|
Home
Equity
Lines of
Credit
|
Second Mortgages
|
Other
|
Unallocated
|
Total
|
||||||||||||||||||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||||||||||||||||||||||
Allowance for loan losses:
|
||||||||||||||||||||||||||||||||||||||||||||
Beginning balance
|
$ | 1,487 | $ | 724 | $ | 11 | $ | 3,493 | $ | 10 | $ | 226 | $ | 160 | $ | 1,389 | $ | 16 | $ | 65 | $ | 7,581 | ||||||||||||||||||||||
Charge-offs
|
(331 | ) | (1,622 | ) | - | (771 | ) | - | - | - | (552 | ) | (7 | ) | - | (3,283 | ) | |||||||||||||||||||||||||||
Recoveries
|
187 | - | - | 114 | - | 22 | 3 | 178 | 3 | - | 507 | |||||||||||||||||||||||||||||||||
Provision (credit)
|
94 | 1,623 | (2 | ) | (742 | ) | 99 | (173 | ) | (27 | ) | 416 | 5 | (38 | ) | 1,255 | ||||||||||||||||||||||||||||
Ending balance
|
$ | 1,437 | $ | 725 | $ | 9 | $ | 2,094 | $ | 109 | $ | 75 | $ | 136 | $ | 1,431 | $ | 17 | $ | 27 | $ | 6,060 | ||||||||||||||||||||||
Ending balance:
individually evaluated for impairment |
$ | - | $ | - | $ | - | $ | 66 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 66 | ||||||||||||||||||||||
Ending balance:
collectively evaluated for impairment |
$ | 1,437 | $ | 725 | $ | 9 | $ | 2,028 | $ | 109 | $ | 75 | $ | 136 | $ | 1,431 | $ | 17 | $ | 27 | $ | 5,994 | ||||||||||||||||||||||
Loans receivable:
|
||||||||||||||||||||||||||||||||||||||||||||
Ending balance
|
$ | 237,670 | $ | 15,620 | $ | 2,990 | $ | 84,327 | $ | 2,111 | $ | 6,380 | $ | 20,320 | $ | 56,515 | $ | 1,761 | $ | 427,694 | ||||||||||||||||||||||||
Ending balance:
individually evaluated for impairment |
$ | 2,394 | $ | 8,395 | $ | - | $ | 5,296 | $ | - | $ | 335 | $ | 20 | $ | 538 | $ | - | $ | 16,978 | ||||||||||||||||||||||||
Ending balance:
collectively evaluated for impairment |
$ | 235,276 | $ | 7,225 | $ | 2,990 | $ | 79,031 | $ | 2,111 | $ | 6,045 | $ | 20,300 | $ | 55,977 | $ | 1,761 | $ | 410,716 |
24 |
Three Months Ended June 30, 2012
|
||||||||||||||||||||||||||||||||||||||||||||
Construction and Development
|
Commercial
|
Consumer
|
||||||||||||||||||||||||||||||||||||||||||
Residential Mortgage
|
Residential and Commercial
|
Land
|
Commercial
Real
Estate
|
Multi-family
|
Other
|
Home
Equity
Lines of
Credit
|
Second Mortgages
|
Other
|
Unallocated
|
Total
|
||||||||||||||||||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||||||||||||||||||||||
Allowance for loan losses:
|
||||||||||||||||||||||||||||||||||||||||||||
Beginning balance
|
$ | 1,310 | $ | 819 | $ | 11 | $ | 3,809 | $ | 37 | $ | 218 | $ | 177 | $ | 1,569 | $ | 17 | $ | 109 | $ | 8,076 | ||||||||||||||||||||||
Charge-offs
|
(140 | ) | (199 | ) | - | - | - | - | (21 | ) | (110 | ) | - | - | (470 | ) | ||||||||||||||||||||||||||||
Recoveries
|
- | - | - | - | - | - | 1 | 39 | 2 | - | 42 | |||||||||||||||||||||||||||||||||
Provision
|
341 | 7 | - | 18 | - | (4 | ) | 8 | (29 | ) | (4 | ) | (2 | ) | 335 | |||||||||||||||||||||||||||||
Ending Balance
|
$ | 1,511 | $ | 627 | $ | 11 | $ | 3,827 | $ | 37 | $ | 214 | $ | 165 | $ | 1,469 | $ | 15 | $ | 107 | $ | 7,983 |
25 |
Nine Months Ended June 30, 2012
|
||||||||||||||||||||||||||||||||||||||||||||
Construction and Development
|
Commercial
|
Consumer
|
||||||||||||||||||||||||||||||||||||||||||
Residential Mortgage
|
Residential and Commercial
|
Land
|
Commercial Real
Estate
|
Multi-family
|
Other
|
Home
Equity
Lines of
Credit
|
Second Mortgages
|
Other
|
Unallocated
|
Total
|
||||||||||||||||||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||||||||||||||||||||||
Allowance for loan losses:
|
||||||||||||||||||||||||||||||||||||||||||||
Beginning balance
|
$ | 1,458 | $ | 1,627 | $ | 49 | $ | 4,176 | $ | 49 | $ | 317 | $ | 220 | $ | 2,154 | $ | 16 | $ | 35 | $ | 10,101 | ||||||||||||||||||||||
Charge-offs
|
(1,115 | ) | (611 | ) | - | (855 | ) | - | (88 | ) | (72 | ) | (975 | ) | (22 | ) | - | (3,738 | ) | |||||||||||||||||||||||||
Recoveries
|
- | 1,139 | - | - | - | 2 | 1 | 114 | 4 | - | 1,260 | |||||||||||||||||||||||||||||||||
Provision
|
1,168 | (1,528 | ) | (38 | ) | 506 | (12 | ) | (17 | ) | 16 | 176 | 17 | 72 | 360 | |||||||||||||||||||||||||||||
Ending Balance
|
$ | 1,511 | $ | 627 | $ | 11 | $ | 3,827 | $ | 37 | $ | 214 | $ | 165 | $ | 1,469 | $ | 15 | $ | 107 | $ | 7,983 | ||||||||||||||||||||||
Ending balance: individually evaluated for impairment
|
$ | 73 | $ | 41 | $ | - | $ | 429 | $ | - | $ | - | $ | - | $ | 55 | $ | - | $ | - | $ | 598 | ||||||||||||||||||||||
Ending balance: collectively evaluated for impairment
|
$ | 1,438 | $ | 586 | $ | 11 | $ | 3,398 | $ | 37 | $ | 214 | $ | 165 | $ | 1,414 | $ | 15 | $ | 107 | $ | 7,385 | ||||||||||||||||||||||
Loans receivable:
|
||||||||||||||||||||||||||||||||||||||||||||
Ending balance
|
$ | 225,213 | $ | 20,571 | $ | 632 | $ | 119,687 | $ | 5,374 | $ | 8,471 | $ | 21,497 | $ | 68,914 | $ | 757 | $ | 471,116 | ||||||||||||||||||||||||
Ending balance: individually evaluated for impairment
|
$ | 4,553 | $ | 3,777 | $ | - | $ | 6,237 | $ | - | $ | 176 | $ | 23 | $ | 813 | $ | - | $ | 15,579 | ||||||||||||||||||||||||
Ending balance: collectively evaluated for impairment
|
$ | 220,660 | $ | 16,794 | $ | 632 | $ | 113,450 | $ | 5,374 | $ | 8,295 | $ | 21,474 | $ | 68,101 | $ | 757 | $ | 455,537 |
26 |
Year Ended September 30, 2012
|
||||||||||||||||||||||||||||||||||||||||||||
Construction and Development
|
Commercial
|
Consumer
|
||||||||||||||||||||||||||||||||||||||||||
Residential Mortgage
|
Residential and Commercial
|
Land
|
Commercial Real
Estate
|
Multi-family
|
Other
|
Home
Equity
Lines of
Credit
|
Second Mortgages
|
Other
|
Unallocated
|
Total
|
||||||||||||||||||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||||||||||||||||||||||
Allowance for loan losses:
|
||||||||||||||||||||||||||||||||||||||||||||
Beginning balance
|
$ | 1,458 | $ | 1,627 | $ | 49 | $ | 4,176 | $ | 49 | $ | 317 | $ | 220 | $ | 2,154 | $ | 16 | $ | 35 | $ | 10,101 | ||||||||||||||||||||||
Charge-offs
|
(1,367 | ) | (826 | ) | - | (951 | ) | (113 | ) | (88 | ) | (72 | ) | (1,184 | ) | (22 | ) | - | (4,623 | ) | ||||||||||||||||||||||||
Recoveries
|
- | 1,139 | - | 5 | - | 2 | 2 | 141 | 4 | - | 1,293 | |||||||||||||||||||||||||||||||||
Provision
|
1,396 | (1,216 | ) | (38 | ) | 263 | 74 | (5 | ) | 10 | 278 | 18 | 30 | 810 | ||||||||||||||||||||||||||||||
Ending Balance
|
$ | 1,487 | $ | 724 | $ | 11 | $ | 3,493 | $ | 10 | $ | 226 | $ | 160 | $ | 1,389 | $ | 16 | $ | 65 | $ | 7,581 | ||||||||||||||||||||||
Ending balance: individually evaluated for impairment
|
$ | - | $ | - | $ | - | $ | 351 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 351 | ||||||||||||||||||||||
Ending balance: collectively evaluated for impairment
|
$ | 1,487 | $ | 724 | $ | 11 | $ | 3,142 | $ | 10 | $ | 226 | $ | 160 | $ | 1,389 | $ | 16 | $ | 65 | $ | 7,230 | ||||||||||||||||||||||
Loans receivable:
|
||||||||||||||||||||||||||||||||||||||||||||
Ending balance
|
$ | 231,803 | $ | 20,500 | $ | 632 | $ | 112,199 | $ | 2,087 | $ | 7,517 | $ | 20,959 | $ | 65,703 | $ | 762 | $ | 462,162 | ||||||||||||||||||||||||
Ending balance: individually evaluated for impairment
|
$ | 3,971 | $ | 3,788 | $ | - | $ | 4,837 | $ | - | $ | 175 | $ | 23 | $ | 447 | $ | - | $ | 13,241 | ||||||||||||||||||||||||
Ending balance: collectively evaluated for impairment
|
$ | 227,832 | $ | 16,712 | $ | 632 | $ | 107,362 | $ | 2,087 | $ | 7,342 | $ | 20,936 | $ | 65,256 | $ | 762 | $ | 448,921 |
27 |
Note 6 - Loans Receivable and Related Allowance for Loan Losses (Continued)
|
Impaired Loans With Specific Allowance
|
Impaired
Loans With No Specific Allowance |
Total Impaired Loans
|
||||||||||||||||||
Recorded Investment
|
Related Allowance
|
Recorded Investment
|
Recorded Investment
|
Unpaid
Principal Balance |
||||||||||||||||
(In thousands)
|
||||||||||||||||||||
June 30, 2013:
|
||||||||||||||||||||
Residential mortgage
|
$ | - | $ | - | $ | 2,394 | $ | 2,394 | $ | 2,767 | ||||||||||
Construction and Development:
|
||||||||||||||||||||
Residential and commercial
|
- | - | 8,395 | 8,395 | 10,314 | |||||||||||||||
Commercial:
|
||||||||||||||||||||
Commercial real estate
|
1,074 | 66 | 4,222 | 5,296 | 6,465 | |||||||||||||||
Other
|
- | - | 335 | 335 | 349 | |||||||||||||||
Consumer:
|
||||||||||||||||||||
Home equity lines of credit
|
- | - | 20 | 20 | 36 | |||||||||||||||
Second mortgages
|
- | - | 538 | 538 | 780 | |||||||||||||||
Total impaired loans
|
$ | 1,074 | $ | 66 | $ | 15,904 | $ | 16,978 | $ | 20,711 | ||||||||||
September 30, 2012:
|
||||||||||||||||||||
Residential mortgage
|
$ | - | $ | - | $ | 3,971 | $ | 3,971 | $ | 5,344 | ||||||||||
Construction and Development:
|
||||||||||||||||||||
Residential and commercial
|
- | - | 3,788 | 3,788 | 5,615 | |||||||||||||||
Commercial:
|
||||||||||||||||||||
Commercial real estate
|
2,306 | 351 | 2,531 | 4,837 | 5,300 | |||||||||||||||
Other
|
- | - | 175 | 175 | 175 | |||||||||||||||
Consumer:
|
||||||||||||||||||||
Home equity lines of credit
|
- | - | 23 | 23 | 37 | |||||||||||||||
Second mortgages
|
- | - | 447 | 447 | 743 | |||||||||||||||
Total impaired loans
|
$ | 2,306 | $ | 351 | $ | 10,935 | $ | 13,241 | $ | 17,214 |
28 |
Note 6 - Loans Receivable and Related Allowance for Loan Losses (Continued)
|
Three Months Ended June 30, 2013
|
Nine Months Ended June 30, 2013
|
|||||||||||||||||||||||
Average
Impaired Loans |
Interest
Income Recognized on Impaired Loans |
Cash Basis Collection
on Impaired Loans |
Average
Impaired Loans |
Interest
Income Recognized on Impaired Loans |
Cash Basis Collection
on Impaired Loans |
|||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||
Residential mortgage
|
$ | 3,131 | $ | 5 | $ | 12 | $ | 3,836 | $ | 34 | $ | 59 | ||||||||||||
Construction and Development:
|
59 | |||||||||||||||||||||||
Residential and commercial
|
9,295 | 59 | 254 | 5,563 | 551 | |||||||||||||||||||
Commercial:
|
||||||||||||||||||||||||
Commercial real estate
|
4,797 | 67 | 404 | 4,842 | 185 | 571 | ||||||||||||||||||
Other
|
201 | 2 | 11 | 184 | 6 | 15 | ||||||||||||||||||
Consumer:
|
||||||||||||||||||||||||
Home equity lines of credit
|
21 | 1 | 1 | 22 | 2 | 3 | ||||||||||||||||||
Second mortgages
|
574 | 1 | 1 | 592 | 2 | 5 | ||||||||||||||||||
Total
|
$ | 18,019 | $ | 135 | $ | 683 | $ | 15,039 | $ | 288 | $ | 1,204 |
Three Months Ended June 30, 2012
|
Nine Months Ended June 30, 2012
|
|||||||||||||||||||||||
Average
Impaired Loans |
Interest
Income Recognized on Impaired Loans |
Cash Basis Collection
on Impaired Loans |
Average
Impaired Loans |
Interest
Income Recognized on Impaired Loans |
Cash Basis Collection
on Impaired Loans |
|||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||
Residential mortgage
|
$ | 4,087 | $ | 22 | $ | 46 | $ | 2,530 | $ | 82 | $ | 143 | ||||||||||||
Construction and Development:
|
||||||||||||||||||||||||
Residential and commercial
|
3,304 | 13 | 568 | 3,299 | 49 | 820 | ||||||||||||||||||
Commercial:
|
||||||||||||||||||||||||
Commercial real estate
|
6,156 | 69 | 97 | 6,662 | 222 | 281 | ||||||||||||||||||
Other
|
176 | 2 | 2 | 181 | 5 | 5 | ||||||||||||||||||
Consumer:
|
||||||||||||||||||||||||
Home equity lines of credit
|
23 | - | - | 27 | - | - | ||||||||||||||||||
Second mortgages
|
767 | 1 | 3 | 637 | 10 | 16 | ||||||||||||||||||
Other
|
- | - | - | 2 | - | - | ||||||||||||||||||
Total
|
$ | 14,513 | $ | 107 | $ | 716 | $ | 13,338 | $ | 368 | $ | 1,265 |
29 |
Pass
|
Special
Mention |
Substandard
|
Doubtful
|
Total
|
||||||||||||||||
(In thousands)
|
||||||||||||||||||||
June 30, 2013:
|
||||||||||||||||||||
Residential mortgage
|
$ | 234,853 | $ | 145 | $ | 2,672 | $ | - | $ | 237,670 | ||||||||||
Construction and Development:
|
||||||||||||||||||||
Residential and commercial
|
5,024 | 760 | 9,836 | - | 15,620 | |||||||||||||||
Land
|
2,653 | 337 | - | - | 2,990 | |||||||||||||||
Commercial:
|
||||||||||||||||||||
Commercial real estate
|
70,063 | 3,778 | 10,420 | 66 | 84,327 | |||||||||||||||
Multi-family
|
2,111 | - | - | - | 2,111 | |||||||||||||||
Other
|
4,826 | 1,214 | 340 | - | 6,380 | |||||||||||||||
Consumer:
|
||||||||||||||||||||
Home equity lines of credit
|
20,300 | - | 20 | - | 20,320 | |||||||||||||||
Second mortgages
|
55,583 | 125 | 807 | - | 56,515 | |||||||||||||||
Other
|
1,737 | 23 | 1 | - | 1,761 | |||||||||||||||
Total
|
$ | 397,150 | $ | 6,382 | $ | 24,096 | $ | 66 | $ | 427,694 | ||||||||||
September 30, 2012:
|
||||||||||||||||||||
Residential mortgage
|
$ | 227,651 | $ | 149 | $ | 4,003 | $ | - | $ | 231,803 | ||||||||||
Construction and Development:
|
||||||||||||||||||||
Residential and commercial
|
6,920 | 1,497 | 12,083 | - | 20,500 | |||||||||||||||
Land
|
- | 632 | - | - | 632 | |||||||||||||||
Commercial:
|
||||||||||||||||||||
Commercial real estate
|
89,646 | 4,441 | 17,761 | 351 | 112,199 | |||||||||||||||
Multi-family
|
2,087 | - | - | - | 2,087 | |||||||||||||||
Other
|
5,849 | 900 | 768 | - | 7,517 | |||||||||||||||
Consumer:
|
||||||||||||||||||||
Home equity lines of credit
|
20,936 | - | 23 | - | 20,959 | |||||||||||||||
Second mortgages
|
64,672 | 38 | 993 | - | 65,703 | |||||||||||||||
Other
|
761 | - | 1 | - | 762 | |||||||||||||||
Total
|
$ | 418,522 | $ | 7,657 | $ | 35,632 | $ | 351 | $ | 462,162 |
30 |
June 30, 2013
|
September 30, 2012
|
|||||||
(In thousands)
|
||||||||
Non-accrual loans:
|
||||||||
Residential mortgage
|
$ | 2,360 | $ | 3,540 | ||||
Construction and Development:
|
||||||||
Residential and commercial
|
8,395 | 3,788 | ||||||
Commercial:
|
||||||||
Commercial real estate
|
2,907 | 1,458 | ||||||
Other
|
163 | 201 | ||||||
Consumer:
|
||||||||
Home equity lines of credit
|
20 | 23 | ||||||
Second mortgages
|
713 | 739 | ||||||
Total non-accrual loans
|
$ | 14,558 | $ | 9,749 |
31 |
Current
|
30-59
Days Past Due |
60-89
Days Past Due |
Greater
Than 90 Days Past Due |
Total
Past Due |
Total Loans
Receivable |
|||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||
June 30, 2013:
|
||||||||||||||||||||||||
Residential mortgage
|
$ | 233,466 | $ | 1,670 | $ | 174 | $ | 2,360 | $ | 4,204 | $ | 237,670 | ||||||||||||
Construction and Development:
|
||||||||||||||||||||||||
Residential and commercial
|
7,225 | - | - | 8,395 | 8,395 | 15,620 | ||||||||||||||||||
Land
|
2,990 | - | - | - | - | 2,990 | ||||||||||||||||||
Commercial:
|
||||||||||||||||||||||||
Commercial real estate
|
80,022 | 1,398 | - | 2,907 | 4,305 | 84,327 | ||||||||||||||||||
Multi-family
|
2,111 | - | - | - | - | 2,111 | ||||||||||||||||||
Other
|
6,217 | - | - | 163 | 163 | 6,380 | ||||||||||||||||||
Consumer:
|
||||||||||||||||||||||||
Home equity lines of credit
|
20,228 | 58 | 14 | 20 | 92 | 20,320 | ||||||||||||||||||
Second mortgages
|
55,013 | 555 | 234 | 713 | 1,502 | 56,515 | ||||||||||||||||||
Other
|
1,752 | 2 | 7 | - | 9 | 1,761 | ||||||||||||||||||
Total
|
$ | 409,024 | $ | 3,683 | $ | 429 | $ | 14,558 | $ | 18,670 | $ | 427,694 | ||||||||||||
September 30, 2012:
|
||||||||||||||||||||||||
Residential mortgage
|
$ | 226,861 | $ | 1,020 | $ | 382 | $ | 3,540 | $ | 4,942 | $ | 231,803 | ||||||||||||
Construction and Development:
|
||||||||||||||||||||||||
Residential and commercial
|
16,712 | - | - | 3,788 | 3,788 | 20,500 | ||||||||||||||||||
Land
|
632 | - | - | - | - | 632 | ||||||||||||||||||
Commercial:
|
||||||||||||||||||||||||
Commercial real estate
|
108,963 | - | 1,778 | 1,458 | 3,236 | 112,199 | ||||||||||||||||||
Multi-family
|
2,087 | - | - | - | - | 2,087 | ||||||||||||||||||
Other
|
7,316 | - | - | 201 | 201 | 7,517 | ||||||||||||||||||
Consumer:
|
||||||||||||||||||||||||
Home equity lines of credit
|
20,716 | - | 220 | 23 | 243 | 20,959 | ||||||||||||||||||
Second mortgages
|
63,824 | 854 | 286 | 739 | 1,879 | 65,703 | ||||||||||||||||||
Other
|
758 | - | 4 | - | 4 | 762 | ||||||||||||||||||
Total
|
$ | 447,869 | $ | 1,874 | $ | 2,670 | $ | 9,749 | $ | 14,293 | $ | 462,162 |
32 |
33 |
Total Troubled Debt
Restructurings |
Troubled Debt Restructured Loans
That Have Defaulted on Modified Terms Within The Past 12 Months |
|||||||||||||||
Number of
Loans |
Recorded
Investment |
Number of
Loans
|
Recorded
Investment |
|||||||||||||
(Dollars in thousands)
|
||||||||||||||||
At June 30, 2013:
|
||||||||||||||||
Residential mortgage
|
4 | $ | 540 | - | $ | - | ||||||||||
Construction & Development:
|
||||||||||||||||
Residential and commercial
|
6 | 8,395 | 6 | 8,395 | ||||||||||||
Commercial:
|
||||||||||||||||
Commercial real estate
|
5 | 4,721 | 2 | 1,966 | ||||||||||||
Other
|
1 | 173 | - | - | ||||||||||||
Total
|
16 | $ | 13,829 | 8 | $ | 10,361 | ||||||||||
At September 30, 2012:
|
||||||||||||||||
Residential mortgage
|
4 | $ | 864 | - | $ | - | ||||||||||
Construction & Development:
|
||||||||||||||||
Residential and commercial
|
2 | 1,426 | 2 | 1,426 | ||||||||||||
Land Loan
|
2 | 1,148 | - | - | ||||||||||||
Commercial:
|
||||||||||||||||
Commercial real estate
|
6 | 6,000 | - | - | ||||||||||||
Other
|
1 | 175 | - | - | ||||||||||||
Total
|
15 | $ | 9,613 | 2 | $ | 1,426 |
June 30, 2013
|
September 30, 2012
|
|||||||||||||||
Performing
|
Non-Performing
|
Performing
|
Non-Performing
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Residential mortgage
|
$ | 540 | $ | - | $ | 864 | $ | - | ||||||||
Construction and Development:
|
||||||||||||||||
Residential and commercial
|
- | 8,395 | - | 1,426 | ||||||||||||
Land loan
|
- | - | 1,148 | - | ||||||||||||
Commercial:
|
||||||||||||||||
Commercial real estate
|
2,755 | 1,966 | 6,000 | - | ||||||||||||
Other
|
173 | - | 175 | - | ||||||||||||
Total
|
$ | 3,468 | $ | 10,361 | $ | 8,187 | $ | 1,426 |
34 |
For the Three Months Ended June 30,
|
||||||||||||||||||||||||
2013
|
2012
|
|||||||||||||||||||||||
Restructured During Period
|
||||||||||||||||||||||||
Number
of Loans |
Pre-
Modifications Outstanding Recorded Investments |
Post-
Modifications Outstanding Recorded Investments |
Number
of Loans |
Pre-
Modifications Outstanding Recorded Investments |
Post-
Modifications Outstanding Recorded Investments |
|||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||
Troubled Debt Restructurings:
|
||||||||||||||||||||||||
Construction and Development:
|
||||||||||||||||||||||||
Residential and commercial
|
1 | $ | 1,074 | $ | 1,074 | - | $ | - | $ | - | ||||||||||||||
Total troubled debt restructurings
|
1 | $ | 1,074 | $ | 1,074 | - | $ | - | $ | - |
For the Nine Months Ended June 30,
|
||||||||||||||||||||||||
2013
|
2012
|
|||||||||||||||||||||||
Restructured During Period
|
||||||||||||||||||||||||
Number
of Loans |
Pre-
Modifications Outstanding Recorded Investments |
Post-
Modifications Outstanding Recorded Investments |
Number
of Loans |
Pre-
Modifications Outstanding Recorded Investments |
Post-
Modifications Outstanding Recorded Investments |
|||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||
Troubled Debt Restructurings:
|
||||||||||||||||||||||||
Construction and Development:
|
||||||||||||||||||||||||
Residential and commercial
|
5 | $ | 9,408 | $ | 9,408 | 2 | $ | 1,810 | $ | 1,810 | ||||||||||||||
Total troubled debt restructurings
|
5 | $ | 9,408 | $ | 9,408 | 2 | $ | 1,810 | $ | 1,810 |
35 |
Actual
|
For Minimum Regulatory Capital Requirement Purposes |
To be Well Capitalized
under Prompt
Corrective Action
Provisions
|
||||||||||||||||||||||
Amount
|
Ratio
|
Amount |
Ratio
|
Amount |
Ratio
|
|||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||
As of June 30, 2013:
|
||||||||||||||||||||||||
Tangible Capital (to tangible assets)
|
$ | 78,001 | 11.99 | % | $ |
≥ 9,759
|
1.50 | % | N/A | |||||||||||||||
Core Capital (to adjusted tangible assets)
|
78,001 | 11.99 |
≥26,025
|
4.00 | $ |
≥32,531
|
5.00 | % | ||||||||||||||||
Tier 1 Capital (to risk-weighted assets)
|
78,001 | 20.27 |
≥15,392
|
4.00 |
≥23,088
|
6.00 | ||||||||||||||||||
Total risk-based Capital (to risk-weighted assets)
|
82,828 | 21.52 |
≥30,784
|
8.00 |
≥38,480
|
10.00 | ||||||||||||||||||
As of September 30, 2012:
|
||||||||||||||||||||||||
Tangible Capital (to tangible assets)
|
$ | 54,436 | 7.70 | % | $ |
≥10,601
|
1.50 | % | N/A | |||||||||||||||
Core Capital (to adjusted tangible assets)
|
54,436 | 7.70 |
≥28,269
|
4.00 | $ |
≥35,336
|
5.00 | % | ||||||||||||||||
Tier 1 Capital (to risk-weighted assets)
|
54,436 | 12.96 |
≥16,801
|
4.00 |
≥25,202
|
6.00 | ||||||||||||||||||
Total risk-based Capital (to risk-weighted assets)
|
59,715 | 14.22 |
≥33,602
|
8.00 |
≥42,003
|
10.00 |
36 |
Note 8 - Fair Value Measurements
|
Level 1—
|
Valuation is based upon quoted prices for identical instruments traded in active markets. |
Level 2—
|
Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.
|
Level 3—
|
Valuation is generated from model-based techniques that use significant assumptions not observable in the market. These unobservable assumptions reflect the Company’s own estimates of assumptions that market participants would use in pricing the asset.
|
37 |
June 30, 2013
|
||||||||||||||||
Total
|
Level 1
|
Level 2
|
Level 3
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Investment securities available for sale:
|
||||||||||||||||
Debt securities:
|
||||||||||||||||
U.S. government agencies
|
$ | 19,117 | $ | - | $ | 19,117 | $ | - | ||||||||
State and municipal obligations
|
11,942 | - | 11,942 | - | ||||||||||||
Single issuer trust preferred security
|
811 | - | 811 | - | ||||||||||||
Corporate debt securities
|
1,770 | - | 1,770 | - | ||||||||||||
Total investment securities available for sale
|
33,640 | - | 33,640 | - | ||||||||||||
Mortgage-backed securities available for sale:
|
||||||||||||||||
FNMA:
|
||||||||||||||||
Adjustable-rate
|
1,109 | - | 1,109 | - | ||||||||||||
Fixed-rate
|
18,562 | - | 18,562 | - | ||||||||||||
FHLMC:
|
||||||||||||||||
Adjustable-rate
|
219 | 219 | ||||||||||||||
Fixed-rate
|
13,092 | - | 13,092 | - | ||||||||||||
CMO, fixed-rate
|
58,829 | - | 58,829 | - | ||||||||||||
Total mortgage-backed securities available for sale
|
91,811 | - | 91,811 | - | ||||||||||||
Total
|
$ | 125,451 | $ | - | $ | 125,451 | $ | - |
September 30, 2012
|
||||||||||||||||
Total
|
Level 1
|
Level 2
|
Level 3
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Investment securities available for sale:
|
||||||||||||||||
Debt securities:
|
||||||||||||||||
U.S. government agencies
|
$ | 23,921 | $ | - | $ | 23,921 | $ | - | ||||||||
FHLB notes
|
696 | - | 696 | - | ||||||||||||
State and municipal obligations
|
9,387 | - | 9,387 | - | ||||||||||||
Single issuer trust preferred security
|
764 | - | 764 | - | ||||||||||||
Corporate debt securities
|
2,057 | - | 2,057 | - | ||||||||||||
Total investment securities available for sale
|
$ | 36,825 | - | $ | 36,825 | - | ||||||||||
Mortgage-backed securities available for sale:
|
||||||||||||||||
FNMA:
|
||||||||||||||||
Adjustable-rate
|
1,215 | - | 1,215 | - | ||||||||||||
Fixed-rate
|
710 | - | 710 | - | ||||||||||||
FHLMC, adjustable-rate
|
261 | - | 261 | - | ||||||||||||
GNMA, adjustable-rate
|
1 | - | 1 | - | ||||||||||||
CMO, fixed-rate
|
41,496 | - | 41,496 | - | ||||||||||||
Total mortgage-backed securities available for sale
|
43,683 | - | 43,683 | - | ||||||||||||
Total
|
$ | 80,508 | $ | - | $ | 80,508 | $ | - |
38 |
June 30, 2013
|
||||||||||||||||
Total
|
Level 1
|
Level 2
|
Level 3
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Other real estate owned
|
$ | 4,754 | $ | - | $ | - | $ | 4,754 | ||||||||
Impaired loans
|
4,120 | - | - | 4,120 | ||||||||||||
Total
|
$ | 8,874 | $ | - | $ | - | $ | 8,874 |
June 30, 2013
|
||||||||||||||
Fair Value at June
30, 2013 |
Valuation Technique
|
Unobservable Input
|
Range
|
|||||||||||
(Dollars in thousands)
|
||||||||||||||
Other real estate owned
|
$ | 4,754 |
Appraisal of collateral(1)
|
Collateral discounts(2)
|
7-72 | % | ||||||||
Impaired loans(3)
|
4,120 |
Appraisal of collateral(1)
|
Collateral discounts(2)
|
1-33 | % | |||||||||
Total
|
$ | 8,874 |
(1) Fair value is generally determined through independent appraisals of the underlying collateral primarily using comparable sales.
|
(2) Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses.
|
(3) Includes assets directly charged-down to fair value during the year-to-date period.
|
September 30, 2012
|
||||||||||||||||
Total
|
Level 1
|
Level 2
|
Level 3
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Other real estate owned
|
$ | 2,991 | $ | - | $ | - | $ | 2,991 | ||||||||
Impaired loans
|
5,925 | - | - | 5,925 | ||||||||||||
Total
|
$ | 8,916 | $ | - | $ | - | $ | 8,916 |
September 30, 2012
|
||||||||||||||
Fair Value at
September 30, 2012 |
Valuation Technique
|
Unobservable Input
|
Range
|
|||||||||||
(Dollars in thousands)
|
||||||||||||||
Other real estate owned
|
$ | 2,991 |
Appraisal of collateral(1)
|
Collateral discounts(2)
|
20-63 | % | ||||||||
Impaired loans(3)
|
5,925 |
Appraisal of collateral(1)
|
Collateral discounts(2)
|
0-16 | % | |||||||||
Total
|
$ | 8,916 |
(1) Fair value is generally determined through independent appraisals of the underlying collateral primarily using comparable sales.
|
(2) Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses.
|
(3) Includes assets directly charged-down to fair value during the year-to-date period.
|
39 |
Fair Value at June
30, 2013 |
Valuation
Technique |
Observable Input
|
Method or Value as of
June 30, 2013
|
||||||||||||
(In thousands)
|
|||||||||||||||
Servicing rights
|
$ | 243 |
Discounted cash flow
|
Discount rate
|
11.19% |
Rate used through modeling period
|
|||||||||
Loan prepayment speeds
|
16.82% |
Weighted-average CPR
|
|||||||||||||
Servicing fees
|
0.25% |
Of loan balance
|
|||||||||||||
Servicing costs
|
6.67% |
Monthly servicing cost per account
|
|||||||||||||
25.00% |
Additional monthly servicing cost per loan on loans more than 30 days delinquent
|
||||||||||||||
0.00% |
Of loans more than 30 days delinquent
|
Fair Value at
September 30, 2012 |
Valuation
Technique |
Observable Input
|
Method or Value as of
September 30, 2012 |
||||||||||||
(In thousands)
|
|||||||||||||||
Servicing rights
|
$ | 107 |
Discounted cash flow
|
Discount rate
|
11.00% |
Rate used through modeling period
|
|||||||||
Loan prepayment speeds
|
28.04% |
Weighted-average CPR
|
|||||||||||||
Servicing fees
|
0.25% |
Of loan balance
|
|||||||||||||
Servicing costs
|
6.25% |
Monthly servicing cost per account
|
|||||||||||||
25.00% |
Additional monthly servicing cost per loan on loans more than 30 days delinquent
|
||||||||||||||
0.00% |
Of loans more than 30 days delinquent
|
40 |
41 |
42 |
June 30, 2013
|
||||||||||||||||||||
Carrying
Amount |
Fair Value
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||||||
(In thousands)
|
||||||||||||||||||||
Financial assets:
|
||||||||||||||||||||
Cash and cash equivalents
|
$ | 67,383 | $ | 67,383 | $ | 67,383 | $ | - | $ | - | ||||||||||
Investment securities available for sale
|
125,451 | 125,451 | - | 125,451 | - | |||||||||||||||
Loans receivable, net
|
423,943 | 427,743 | - | - | 427,743 | |||||||||||||||
Accrued interest receivable
|
1,501 | 1,501 | - | 1,501 | - | |||||||||||||||
Restricted stock
|
3,718 | 3,718 | - | 3,718 | - | |||||||||||||||
Mortgage servicing rights
|
243 | 243 | - | 243 | - | |||||||||||||||
Financial liabilities:
|
||||||||||||||||||||
Savings accounts
|
44,348 | 44,348 | - | 44,348 | - | |||||||||||||||
Checking and NOW accounts
|
114,470 | 114,470 | - | 114,470 | - | |||||||||||||||
Money market accounts
|
69,437 | 69,437 | - | 69,437 | - | |||||||||||||||
Certificates of deposit
|
288,883 | 295,991 | - | 295,991 | - | |||||||||||||||
FHLB advances
|
48,000 | 52,783 | - | 52,783 | - | |||||||||||||||
Accrued interest payable
|
269 | 269 | - | 269 | - |
43 |
September 30, 2012
|
||||||||||||||||||||
Carrying
Amount |
Fair Value
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||||||
(In thousands)
|
||||||||||||||||||||
Financial assets:
|
||||||||||||||||||||
Cash and cash equivalents
|
$ | 131,910 | $ | 131,910 | $ | 131,910 | $ | - | $ | - | ||||||||||
Investment securities available for sale
|
80,508 | 80,508 | - | 80,508 | - | |||||||||||||||
Loans receivable, net
|
457,001 | 479,613 | - | - | 479,613 | |||||||||||||||
Accrued interest receivable
|
1,521 | 1,521 | - | 1,521 | - | |||||||||||||||
Restricted stock
|
4,147 | 4,147 | - | 4,147 | - | |||||||||||||||
Mortgage servicing rights
|
107 | 107 | - | 107 | - | |||||||||||||||
Financial liabilities:
|
||||||||||||||||||||
Savings accounts
|
41,712 | 41,712 | - | 41,712 | - | |||||||||||||||
Checking and NOW accounts
|
110,178 | 110,178 | - | 110,178 | - | |||||||||||||||
Money market accounts
|
70,955 | 70,955 | - | 70,955 | - | |||||||||||||||
Certificates of deposit
|
318,143 | 326,974 | - | 326,974 | - | |||||||||||||||
FHLB advances
|
48,085 | 56,102 | - | 56,102 | - | |||||||||||||||
Accrued interest payable
|
266 | 266 | - | 266 | - |
Nine Months Ended June 30,
|
||||||||
2013
|
2012
|
|||||||
(In thousands)
|
||||||||
At federal statutory rate
|
$ | (228 | ) | $ | 803 | |||
Adjustments resulting from:
|
||||||||
Tax-exempt interest
|
(57 | ) | (11 | ) | ||||
Low-income housing credit
|
- | (33 | ) | |||||
Earnings on bank-owned life insurance
|
(350 | ) | (136 | ) | ||||
Other
|
(3 | ) | (3 | ) | ||||
$ | (638 | ) | $ | 620 | ||||
Effective tax rate
|
95.10 | % | 26.24 | % |
44 |
June 30, 2013
|
September 30, 2012
|
|||||||
(In thousands)
|
||||||||
Deferred Tax Assets:
|
||||||||
Unrealized loss on investments available for sale
|
$ | 1,172 | $ | - | ||||
Allowance for loan losses
|
3,637 | 3,362 | ||||||
Nonaccrual interest
|
460 | 374 | ||||||
Write-down of real estate owned
|
288 | 222 | ||||||
Alternative minimum tax (AMT) credit carryover
|
68 | 64 | ||||||
Low-income housing tax credit carryover
|
337 | 337 | ||||||
Supplement Employer Retirement Plan
|
422 | 384 | ||||||
Charitable contributions
|
201 | 198 | ||||||
Depreciation
|
136 | 33 | ||||||
State net operating loss
|
886 | 800 | ||||||
Federal net operating loss
|
2,252 | 2,166 | ||||||
Other
|
102 | 74 | ||||||
Total Deferred Tax Assets
|
9,961 | 8,014 | ||||||
Valuation allowance for state net operating loss
|
(886 | ) | (800 | ) | ||||
Valuation allowance for charitable contributions
|
(201 | ) | (74 | ) | ||||
Total Deferred Tax Assets, Net of Valuation Allowance
|
$ | 8,874 | $ | 7,140 | ||||
Deferred Tax Liabilities:
|
||||||||
Unrealized gain on investments available for sale
|
- | (329 | ) | |||||
Mortgage servicing rights
|
(83 | ) | (36 | ) | ||||
Total Deferred Tax Liabilities
|
(83 | ) | (365 | ) | ||||
Deferred Tax Assets, Net
|
$ | 8,791 | $ | 6,775 |
45 |
46 |
47 |
48 |
|
●
|
Level 1 – Valuation is based upon quoted prices for identical instruments traded in active markets.
|
|
●
|
Level 2 – Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.
|
|
●
|
Level 3 – Valuation is generated from model-based techniques that use significant assumptions not observable in the market. These unobservable assumptions reflect the Company’s own estimates of assumptions that market participants would use in pricing the asset.
|
49 |
June 30, 2013
|
March 31, 2013
|
September 30, 2012
|
||||||||||
(In thousands)
|
||||||||||||
Loans 31-89 days delinquent:
|
||||||||||||
Residential mortgage
|
$ | 1,844 | $ | 1,266 | $ | 1,402 | ||||||
Commercial:
|
||||||||||||
Commercial real estate
|
1,398 | 2,631 | 1,778 | |||||||||
Consumer:
|
||||||||||||
Home equity lines of credit
|
72 | 203 | 220 | |||||||||
Second mortgages
|
789 | 763 | 1,140 | |||||||||
Other
|
9 | 1 | 4 | |||||||||
Total
|
$ | 4,112 | $ | 4,864 | $ | 4,544 |
50 |
June 30, 2013
|
March 31, 2013
|
September 30, 2012
|
||||||||||
(In thousands)
|
||||||||||||
Classified assets:
|
||||||||||||
Substandard(1)
|
$ | 29,230 | $ | 39,438 | $ | 40,226 | ||||||
Doubtful
|
66 | 79 | 351 | |||||||||
Loss
|
- | - | - | |||||||||
Total classified assets
|
29,296 | 39,517 | 40,577 | |||||||||
Special mention assets
|
6,382 | 6,857 | 7,657 | |||||||||
Total classified and special mention assets
|
$ | 35,678 | $ | 46,374 | $ | 48,234 |
(1) Includes other real estate owned of $5.1 million, $4.3 million and $4.6 million, at June 30, 2013, March 31, 2013 and September 30, 2012, respectively. |
51 |
June 30, 2013
|
March 31, 2013
|
September 30, 2012
|
||||||||||
(Dollars in thousands)
|
||||||||||||
Non-accruing loans:
|
||||||||||||
Residential mortgage
|
$ | 2,360 | $ | 3,585 | $ | 3,540 | ||||||
Construction or development:
|
||||||||||||
Residential and commercial(1)
|
8,395 | 9,496 | 3,788 | |||||||||
Commercial:
|
||||||||||||
Commercial real estate(2)
|
2,907 | 3,200 | 1,458 | |||||||||
Other
|
163 | 182 | 201 | |||||||||
Consumer:
|
||||||||||||
Home equity lines of credit
|
20 | 22 | 23 | |||||||||
Second mortgages
|
713 | 767 | 739 | |||||||||
Total non-accruing loans
|
14,558 | 17,252 | 9,749 | |||||||||
Other real estate owned and other foreclosed assets:
|
||||||||||||
Residential mortgage
|
2,025 | 1,238 | 1,262 | |||||||||
Construction or development:
|
||||||||||||
Residential and commercial
|
801 | - | - | |||||||||
Commercial:
|
||||||||||||
Commercial real estate
|
1,721 | 2,280 | 2,405 | |||||||||
Multi-family
|
171 | 405 | 486 | |||||||||
Consumer:
|
||||||||||||
Second mortgages
|
416 | 416 | 441 | |||||||||
Total
|
5,134 | 4,339 | 4,594 | |||||||||
Total non-performing assets
|
19,692 | 21,591 | 14,343 | |||||||||
Performing troubled debt restructurings:
|
||||||||||||
Residential mortgage
|
540 | 547 | 864 | |||||||||
Construction or development:
|
||||||||||||
Land
|
- | 1,142 | 1,148 | |||||||||
Commercial:
|
||||||||||||
Commercial real estate
|
2,755 | 4,529 | 6,000 | |||||||||
Other
|
173 | 175 | 175 | |||||||||
Total
|
3,468 | 6,393 | 8,187 | |||||||||
Total non-performing assets and performing troubled debt restructurings
|
$ | 23,160 | $ | 27,984 | $ | 22,530 | ||||||
Ratios:
|
||||||||||||
Total non-accrual loans as a percent of gross loans
|
3.40 | % | 3.83 | % | 2.11 | % | ||||||
Total non-performing assets as a percent of total assets
|
2.96 | % | 3.16 | % | 2.01 | % | ||||||
Total non-performing assets and performing troubled debt restructurings as a percent of total assets
|
3.48 | % | 4.09 | % | 3.17 | % |
(1) |
Includes six loans classified as TDRs in the aggregate amount of $8.4 million at June 30, 2013 and $8.6 million at March 31, 2013 and two loans classified as TDRs in the aggregate amount of $1.4 million at September 30, 2012.
|
(2) |
Includes two loans classified as TDRs in the aggregate amount of $2.0 million at June 30, 2013 and one loan classified as a TDR in the amount of $1.4 million at March 31, 2013.
|
52 |
53 |
|
Three Months Ended June 30,
|
||||||||||||||||||||||||
2013
|
2012
|
|||||||||||||||||||||||
Average
Balance |
Interest
|
Average
Yield/Rate |
Average
Balance |
Interest
|
Average
Yield/Rate |
|||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||
Interest Earning Assets:
|
||||||||||||||||||||||||
Loans receivable (1)
|
$ | 440,757 | $ | 4,931 | 4.48 | % | $ | 472,086 | $ | 5,894 | 4.99 | % | ||||||||||||
Investment securities
|
120,792 | 561 | 1.86 | 88,214 | 410 | 1.86 | ||||||||||||||||||
Deposits in other banks
|
64,694 | 34 | 0.21 | 50,695 | 16 | 0.13 | ||||||||||||||||||
FHLB stock
|
3,703 | 2 | 0.22 | 4,662 | 1 | 0.09 | ||||||||||||||||||
Total interest-earning assets
|
629,946 | 5,528 | 3.51 | 615,657 | 6,321 | 4.11 | ||||||||||||||||||
Non-interest-earning assets
|
43,807 | 34,022 | ||||||||||||||||||||||
Total assets
|
$ | 673,753 | $ | 649,679 | ||||||||||||||||||||
Interest Bearing Liabilities:
|
||||||||||||||||||||||||
Demand and NOW accounts
|
$ | 92,136 | 24 | 0.10 | $ | 93,715 | 60 | 0.26 | ||||||||||||||||
Money market accounts
|
68,675 | 48 | 0.28 | 76,138 | 85 | 0.45 | ||||||||||||||||||
Savings accounts
|
44,567 | 5 | 0.04 | 47,791 | 12 | 0.10 | ||||||||||||||||||
Time deposits
|
293,838 | 1,123 | 1.53 | 294,654 | 1,432 | 1.94 | ||||||||||||||||||
Total deposits
|
499,216 | 1,200 | 0.96 | 512,298 | 1,589 | 1.24 | ||||||||||||||||||
FHLB borrowings
|
48,000 | 426 | 3.55 | 48,468 | 427 | 3.52 | ||||||||||||||||||
Total interest-bearing liabilities
|
547,216 | 1,626 | 1.19 | 560,766 | 2,016 | 1.44 | ||||||||||||||||||
Non-interest-bearing liabilities
|
29,647 | 26,364 | ||||||||||||||||||||||
Total liabilities
|
576,863 | 587,130 | ||||||||||||||||||||||
Shareholders’ Equity
|
96,890 | 62,549 | ||||||||||||||||||||||
Total liabilities and shareholders’ equity
|
$ | 673,753 | $ | 649,679 | ||||||||||||||||||||
Net interest-earning assets | ||||||||||||||||||||||||
$ | 82,730 | $ | 54,891 | |||||||||||||||||||||
Net interest income; average interest rate spread
|
$ | 3,902 | 2.32 | % | $ | 4,305 | 2.67 | % | ||||||||||||||||
Net interest margin
|
2.48 | % | 2.80 | % | ||||||||||||||||||||
Average interest-earning assets to average interest-bearing liabilities
|
115.12 | % | 109.79 | % |
(1) Includes non-accrual loans during the respective periods. Calculated net of deferred loan fees, loan discounts, loans in process and loss reserves.
|
54 |
Nine Months Ended June 30,
|
||||||||||||||||||||||||
2013
|
2012
|
|||||||||||||||||||||||
Average
Balance |
Interest
|
Average
Yield/Rate |
Average
Balance |
Interest
|
Average
Yield/Rate |
|||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||
Interest Earning Assets:
|
||||||||||||||||||||||||
Loans receivable (1)
|
$ | 447,512 | $ | 15,465 | 4.61 | % | $ | 483,023 | $ | 18,352 | 5.07 | % | ||||||||||||
Investment securities
|
100,437 | 1,365 | 1.81 | 85,690 | 1,279 | 1.99 | ||||||||||||||||||
Deposits in other banks
|
87,884 | 101 | 0.15 | 48,025 | 34 | 0.09 | ||||||||||||||||||
FHLB stock
|
3,724 | 10 | 0.36 | 4,934 | 2 | 0.05 | ||||||||||||||||||
Total interest-earning assets
|
639,557 | 16,941 | 3.53 | 621,672 | 19,667 | 4.21 | ||||||||||||||||||
Non-interest-earning assets
|
23,869 | 35,782 | ||||||||||||||||||||||
Total assets
|
$ | 663,426 | $ | 657,454 | ||||||||||||||||||||
Interest Bearing Liabilities:
|
||||||||||||||||||||||||
Demand and NOW accounts
|
$ | 89,934 | 97 | 0.14 | $ | 91,315 | 209 | 0.31 | ||||||||||||||||
Money market accounts
|
68,885 | 180 | 0.35 | 82,326 | 370 | 0.60 | ||||||||||||||||||
Savings accounts
|
43,446 | 17 | 0.05 | 46,015 | 36 | 0.11 | ||||||||||||||||||
Time deposits
|
304,422 | 3,840 | 1.68 | 301,273 | 4,516 | 2.00 | ||||||||||||||||||
Total deposits
|
506,687 | 4,134 | 1.09 | 520,929 | 5,131 | 1.31 | ||||||||||||||||||
FHLB borrowings
|
48,005 | 1,277 | 3.55 | 48,721 | 1,289 | 3.53 | ||||||||||||||||||
Total interest-bearing liabilities
|
554,692 | 5,411 | 1.30 | 569,650 | 6,420 | 1.51 | ||||||||||||||||||
Non-interest-bearing liabilities
|
25,606 | 25,852 | ||||||||||||||||||||||
Total liabilities
|
580,298 | 595,502 | ||||||||||||||||||||||
Shareholders’ Equity
|
83,128 | 61,952 | ||||||||||||||||||||||
Total liabilities and shareholders’ equity
|
$ | 663,426 | $ | 657,454 | ||||||||||||||||||||
Net interest-earning assets
|
$ | 84,865 | $ | 52,022 | ||||||||||||||||||||
Net interest income; average interest rate spread
|
$ | 11,530 | 2.23 | % | $ | 13,247 | 2.70 | % | ||||||||||||||||
Net interest margin
|
2.40 | % | 2.84 | % | ||||||||||||||||||||
Average interest-earning assets to average interest-bearing liabilities
|
115.30 | % | 109.13 | % |
(1) Includes non-accrual loans during the respective periods. Calculated net of deferred loan fees, loan discounts, loans in process and loss reserves.
|
55 |
56 |
For the Nine Months Ended
June 30,
|
For the Year Ended
September 30, |
|||||||||||
2013
|
2012
|
2012
|
||||||||||
(Dollars in thousands)
|
||||||||||||
Balance at beginning of period
|
$ | 7,581 | $ | 10,101 | $ | 10,101 | ||||||
Provision for loan losses
|
1,255 | 360 | 810 | |||||||||
Charge-offs:
|
||||||||||||
Residential mortgage
|
331 | 1,115 | 1,367 | |||||||||
Construction and Development
|
||||||||||||
Residential and commercial
|
1,622 | 611 | 826 | |||||||||
Commercial:
|
||||||||||||
Commercial real estate
|
771 | 855 | 951 | |||||||||
Multi-family
|
- | - | 113 | |||||||||
Other
|
- | 88 | 88 | |||||||||
Consumer:
|
||||||||||||
Home equity lines of credit
|
- | 72 | 72 | |||||||||
Second mortgages
|
552 | 975 | 1,184 | |||||||||
Other
|
7 | 22 | 22 | |||||||||
Total charge-offs
|
3,283 | 3,738 | 4,623 | |||||||||
Recoveries:
|
||||||||||||
Residential mortgage
|
187 | - | - | |||||||||
Construction and Development
|
||||||||||||
Residential and commercial
|
- | 1,139 | 1,139 | |||||||||
Commercial:
|
||||||||||||
Commercial real estate
|
114 | - | 5 | |||||||||
Other
|
22 | 2 | 2 | |||||||||
Consumer:
|
||||||||||||
Home equity lines of credit
|
3 | 1 | 2 | |||||||||
Second mortgages
|
178 | 114 | 141 | |||||||||
Other
|
3 | 4 | 4 | |||||||||
Total recoveries
|
507 | 1,260 | 1,293 | |||||||||
Net charge-offs
|
2,776 | 2,478 | 3,330 | |||||||||
Balance at end of period
|
$ | 6,060 | $ | 7,983 | $ | 7,581 | ||||||
Ratios:
|
||||||||||||
Ratio of allowance for loan losses to non-accrual loans
|
41.63 | % | 75.11 | % | 77.76 | % | ||||||
Ratio of net charge-offs to average loans outstanding (annualized for the nine-month periods ended June 30, 2013 and 2012)
|
0.83 | % | 0.68 | % | 0.70 | % |
57 |
58 |
Payments Due by Period
|
||||||||||||||||||||
To One
Year
|
After One
to Three Years |
After Three
to Five Years
|
After Five
Years
|
Total
|
||||||||||||||||
(In thousands)
|
||||||||||||||||||||
Long-term debt obligations
|
$ | - | $ | - | $ | - | $ | 48,000 | $ | 48,000 | ||||||||||
Certificates of deposit
|
111,334 | 113,212 | 46,574 | 17,763 | 288,883 | |||||||||||||||
Operating lease obligations
|
70 | 516 | 429 | 4,548 | 5,563 | |||||||||||||||
Total contractual obligations
|
$ | 111,404 | $ | 113,728 | $ | 47,003 | $ | 70,311 | $ | 342,446 |
59 |
60 |
31.1
|
Rule 13a-14(a)/15d-14(a) Certification of the Chief Executive Officer |
31.2
|
Rule 13a-14(a)/15d-14(a) Section 302 Certification of the Chief Financial Officer
|
32.1
|
Section 1350 Certification
|
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.*
|
*
|
These interactive data files are being furnished as part of this Quarterly Report, 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.
|
61 |
MALVERN BANCORP, INC.
|
|||
August 12, 2013
|
By:
|
/s/ Ronald Anderson | |
Ronald Anderson | |||
President and Chief Executive Officer | |||
August 12, 2013 |
By:
|
/s/ Dennis Boyle | |
Dennis Boyle | |||
Senior Vice President and Chief Financial Officer |
62 |
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: August 12, 2013
|
|
/s/ Ronald Anderson | |
Ronald Anderson | |||
President and Chief Executive Officer |
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: August 12, 2013
|
/s/ Dennis Boyle | |
Dennis Boyle | ||
Senior Vice President and Chief Financial Officer |
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date:
|
August 12, 2013
|
By:
|
/s/ Ronald Anderson | |
Ronald Anderson | ||||
President and Chief Executive Officer |
Date:
|
August 12, 2013
|
By:
|
/s/ Dennis Boyle | |
Dennis Boyle | ||||
Senior Vice President and Chief Financial Officer |
Fair Value Measurements
|
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
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Fair Value Measurements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements |
The Company follows FASB ASC Topic 820 “Fair Value Measurements,” to record fair value adjustments to certain assets and to determine fair value disclosures for the Company’s financial instruments. Investment and mortgage-backed securities available for sale are recorded at fair value on a recurring basis. Additionally, from time to time, the Company may be required to record at fair value other assets on a nonrecurring basis, such as impaired loans, real estate owned and certain other assets. These nonrecurring fair value adjustments typically involve application of lower-of-cost-or-market accounting or write-downs of individual assets.
The Company groups its assets at fair value in three levels, based on the markets in which the assets are traded and the reliability of the assumptions used to determine fair value. These levels are:
The Company bases its fair values on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. It is our policy to maximize the use of observable inputs and minimize the use of unobservable inputs when developing fair value measurements, in accordance with the fair value hierarchy.
Fair value measurements for assets where there exists limited or no observable market data and, therefore, are based primarily upon the Company’s or other third-party’s estimates, are often calculated based on the characteristics of the asset, the economic and competitive environment and other factors. Therefore, the results cannot be determined with precision and may not be realized in an actual sale or immediate settlement of the asset. Additionally, there may be inherent weaknesses in any calculation technique, and changes in the underlying assumptions used, including discount rates and estimates of future cash flows, could significantly affect the results of current or future valuations.
FASB ASC Topic 825 “Financial Instruments” provides an option to elect fair value as an alternative measurement for selected financial assets and financial liabilities not previously recorded at fair value. The fair value of a financial instrument is the current amount that would be exchanged between willing parties, other than in a forced liquidation.
The table below presents the balances of assets measured at fair value on a recurring basis:
The Company monitors and evaluates available data to perform fair value measurements on an ongoing basis and recognizes transfers among the levels of the fair value hierarchy as of the date event or a change in circumstances that affects the valuation method chosen. There were no changes at June 30, 2013 or September 30, 2012.
For assets measured at fair value on a nonrecurring basis that were still held at the end of the period, the following table provides the level of valuation assumptions used to determine each adjustment and the carrying value of the related individual assets or portfolios at June 30, 2013 and September 30, 2012:
The following table shows quantitative information regarding significant techniques and inputs used at June 30, 2013 for assets measured using observable inputs (Level 2):
The following table shows quantitative information regarding significant techniques and inputs used at September 30, 2012 for assets measured using observable inputs (Level 2):
The following disclosure of the estimated fair value of financial instruments is made in accordance with the requirements of FASB ASC 825. The estimated fair value amounts have been determined by the Company using available market information and appropriate valuation methods. However, considerable judgment is necessarily required to interpret market data to develop the estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company would realize in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. FASB ASC 825 excludes certain financial instruments and all non-financial instruments from its disclosure requirements.
Accordingly, the aggregate fair value amounts presented may not necessarily represent the underlying fair value of the Company.
The fair value estimates presented herein are based on pertinent information available to management as of June 30, 2013 and September 30, 2012. Although management is not aware of any factors that would significantly affect the estimated fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since June 30, 2013 and September 30, 2012 and, therefore, current estimates of fair value may differ significantly from the amounts presented herein.
The following assumptions were used to estimate the fair value of the Company’s financial instruments:
Cash and Cash Equivalents—These assets are carried at historical cost. The carrying amount is a reasonable estimate of fair value because of the relatively short time between the origination of the instrument and its expected realization.
Investment Securities—Investment and mortgage-backed securities available for sale (carried at fair value) are measured at fair value on a recurring basis. Fair value measurements for these securities are typically obtained from independent pricing services that we have engaged for this purpose. When available, we, or our independent pricing service, use quoted market prices to measure fair value. If market prices are not available, fair value measurement is based upon models that incorporate available trade, bid and other market information and for structured securities, cash flow and, when available, loan performance data. Because many fixed income securities do not trade on a daily basis, our independent pricing service’s applications apply available information through processes such as benchmark curves, benchmarking of like securities, sector groupings and matrix pricing to prepare evaluations. For each asset class, pricing applications and models are based on information from market sources and integrate relevant credit information. All of our securities available for sale are valued using either of the foregoing methodologies to determine fair value adjustments recorded to our financial statements. The Company had no Level 1 or Level 3 securities as of June 30, 2013 or September 30, 2012.
Loans Receivable—We do not record loans at fair value on a recurring basis. As such, valuation techniques discussed herein for loans are primarily for estimating fair value for FASB ASC 825 disclosure purposes. However, from time to time, we record nonrecurring fair value adjustments to loans to reflect partial write-downs for impairment or the full charge-off of the loan carrying value. The valuation of impaired loans is discussed below. The fair value estimate for FASB ASC 825 purposes differentiates loans based on their financial characteristics, such as product classification, loan category, pricing features and remaining maturity. Prepayment and credit loss estimates are evaluated by loan type and rate. The fair value of loans is estimated by discounting contractual cash flows using discount rates based on current industry pricing, adjusted for prepayment and credit loss estimates.
Impaired Loans—Impaired loans are valued utilizing independent appraisals that rely upon quoted market prices for similar assets in active markets. These appraisals include adjustments to comparable assets based on the appraisers’ market knowledge and experience. The appraisals are adjusted downward by management, as necessary, for changes in relevant valuation factors subsequent to the appraisal date and are considered level 3 inputs.
Accrued Interest Receivable—This asset is carried at historical cost. The carrying amount is a reasonable estimate of fair value because of the relatively short time between the origination of the instrument and its expected realization.
Restricted Stock—Although restricted stock is an equity interest in the FHLB, it is carried at cost because it does not have a readily determinable fair value as its ownership is restricted and it lacks a market. The estimated fair value approximates the carrying amount.
Other Real Estate Owned—Assets acquired through foreclosure or deed in lieu of foreclosure are recorded at estimated fair value less estimated selling costs when acquired, thus establishing a new cost basis. Fair value is generally based on independent appraisals. These appraisals include adjustments to comparable assets based on the appraisers’ market knowledge and experience, and are considered level 3 inputs. When an asset is acquired, the excess of the loan balance over fair value, less estimated selling costs, is charged to the allowance for loan losses. If the estimated fair value of the asset declines, a write-down is recorded through expense. The valuation of foreclosed assets is subjective in nature and may be adjusted in the future because of, among other factors, changes in the economic conditions.
Deposits—Deposit liabilities are carried at cost. As such, valuation techniques discussed herein for deposits are primarily for estimating fair value for FASB ASC 825 disclosure purposes. The fair value of deposits is discounted based on rates available for borrowings of similar maturities. A decay rate is estimated for non-time deposits. The discount rate for non-time deposits is adjusted for servicing costs based on industry estimates.
Long-Term Borrowings—Advances from the FHLB are carried at amortized cost. However, we are required to estimate the fair value of long-term debt under FASB ASC 825. The fair value is based on the contractual cash flows discounted using rates currently offered for new notes with similar remaining maturities.
Accrued Interest Payable—This liability is carried at historical cost. The carrying amount is a reasonable estimate of fair value because of the relatively short time between the origination of the instrument and its expected realization.
Commitments to Extend Credit and Letters of Credit—The majority of the Company’s commitments to extend credit and letters of credit carry current market interest rates if converted to loans. Because commitments to extend credit and letters of credit are generally unassignable by either the Bank or the borrower, they only have value to the Company and the borrower. The estimated fair value approximates the recorded deferred fee amounts, which are not significant.
Mortgage Servicing Rights—The fair value of mortgage servicing rights is based on observable market prices when available or the present value of expected future cash flows when not available. Assumptions, such as loan default rates, costs to service, and prepayment speeds significantly affect the estimate of future cash flows. Mortgage servicing rights are carried at the lower of cost or fair value.
The carrying amount and estimated fair value of the Company’s financial instruments as of June 30, 2013 and September 30, 2012 are presented below:
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Income Taxes - Reconciliation between statutory federal income tax rate and effective income tax rate on income before income taxes (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 9 Months Ended | ||
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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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Income Taxes [Abstract] | ||||
Statutory federal income tax rate | 34.00% | 34.00% | ||
At federal statutory rate | $ (228) | $ 803 | ||
Adjustments resulting from: Tax-exempt interest | (57) | (11) | ||
Adjustments resulting from: low-income housing credit | (33) | |||
Adjustments resulting from: Earnings on bank-owned life insurance | (350) | (136) | ||
Adjustments resulting from: Other | (3) | (3) | ||
Total | $ (41) | $ 32 | $ (638) | $ 620 |
Effective tax rate | 95.10% | 26.24% |
Consolidated Statements of Operations (Unaudited) (USD $)
In Thousands, except Per Share data, unless otherwise specified |
3 Months Ended | 9 Months Ended | ||||||
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Jun. 30, 2013
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Jun. 30, 2012
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Jun. 30, 2012
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Interest and Dividend Income | ||||||||
Loans, including fees | $ 4,931 | $ 5,894 | $ 15,465 | $ 18,352 | ||||
Investment securities, taxable | 504 | 387 | 1,199 | 1,246 | ||||
Investment securities, tax-exempt | 57 | 23 | 166 | 33 | ||||
Dividends, restricted stock | 2 | 1 | 10 | 2 | ||||
Interest-bearing cash accounts | 34 | 16 | 101 | 34 | ||||
Total Interest and Dividend Income | 5,528 | 6,321 | 16,941 | 19,667 | ||||
Interest Expense | ||||||||
Deposits | 1,200 | 1,589 | 4,134 | 5,131 | ||||
Long-term borrowings | 426 | 427 | 1,277 | 1,289 | ||||
Total Interest Expense | 1,626 | 2,016 | 5,411 | 6,420 | ||||
Net Interest Income | 3,902 | 4,305 | 11,530 | 13,247 | ||||
(Recovery) Provision for Loan Losses | (190) | 335 | 1,255 | 360 | ||||
Net Interest Income after (Recovery) Provision for Loan Losses | 4,092 | 3,970 | 10,275 | 12,887 | ||||
Other Income | ||||||||
Service charges and other fees | 244 | 218 | 783 | 686 | ||||
Rental income - other | 62 | 59 | 188 | 192 | ||||
Gain on sale of investments, net | 293 | 40 | 503 | 663 | ||||
Loss on disposal of fixed assets | (1) | (1) | ||||||
Loss on sale of loans, net | (314) | (128) | ||||||
Earnings on bank-owned life insurance | 160 | 134 | 1,030 | 400 | ||||
Total Other Income | 444 | 451 | 2,375 | 1,941 | ||||
Other Expense | ||||||||
Salaries and employee benefits | 1,900 | 1,689 | 5,695 | 5,001 | ||||
Occupancy expense | 516 | 520 | 1,527 | 1,568 | ||||
Federal deposit insurance premium | 211 | 204 | 648 | 657 | ||||
Advertising | 158 | 159 | 620 | 581 | ||||
Data processing | 321 | 319 | 953 | 939 | ||||
Professional fees | 456 | 279 | 1,271 | 1,193 | ||||
Other real estate owned expense, net | 364 | 495 | 1,009 | 1,130 | ||||
Other operating expenses | 510 | 452 | 1,598 | 1,397 | ||||
Total Other Expenses | 4,436 | 4,117 | 13,321 | 12,466 | ||||
Income (Loss) before income tax expense (benefit) | 100 | 304 | (671) | 2,362 | ||||
Income tax (benefit) expense | (41) | 32 | (638) | 620 | ||||
Net Income (Loss) | $ 141 | $ 272 | $ (33) | $ 1,742 | ||||
Basic Earnings (Loss) Per Share* | $ 0.02 | $ 0.04 | [1] | $ (0.01) | $ 0.27 | [1] | ||
Dividends Declared Per Share | $ 0.00 | $ 0.00 | $ 0.00 | $ 0.00 | ||||
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Organizational Structure and Nature of Operations
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9 Months Ended |
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Jun. 30, 2013
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Organizational Structure and Nature of Operations [Abstract] | |
Organizational Structure and Nature of Operations | Note 1 – Organizational Structure and Nature of Operations
On May 19, 2008, Malvern Federal Savings Bank (“Malvern Federal Savings” or the “Bank”) completed its reorganization to the mutual holding company form of organization and formed Malvern Federal Bancorp, Inc. (the “Mid-Tier Holding Company”) to serve as the “mid-tier” stock holding company for the Bank. In connection with implementation of the mutual holding company form of organization in 2008, the Company sold 2,645,575 shares of its common stock to certain members of the Bank and the public at a purchase price of $10.00 per share. In addition, the Company issued 3,383,875 shares, or 55% of the then outstanding shares, of its common stock to Malvern Federal Mutual Holding Company, which was a federally chartered mutual holding company (the “Mutual Holding Company”), and contributed 123,050 shares (with a value of $1.2 million), or 2.0% of the then outstanding shares, to the Malvern Federal Charitable Foundation, a newly created Delaware charitable foundation. In addition to the shares of Malvern Federal Bancorp, Inc. which it owned, Malvern Federal Mutual Holding Company was capitalized with $100,000 in cash. An Employee Stock Ownership Plan (“ESOP”) was established which borrowed approximately $2.6 million from Malvern Federal Bancorp, Inc. to purchase 241,178 shares of common stock in the 2008 offering. Principal and interest payments of the loan are being made quarterly over a term of 18 years at a fixed interest rate of 5.0%.
On October 11, 2012, Malvern Bancorp, Inc. (the “Company” or “Malvern Bancorp-New”) completed the “second-step” conversion of the Bank from the mutual holding company structure to the stock holding company structure pursuant to a Plan of Conversion and Reorganization. Upon completion of the conversion and reorganization, Malvern Federal Mutual Holding Company and the Mid-Tier Holding Company ceased to exist. Malvern Bancorp, Inc., a Pennsylvania company, became the holding company for the Bank and owner of all of the issued and outstanding shares of the Bank’s common stock. In connection with the conversion and reorganization, 3,636,875 shares of common stock, par value $0.01 per share, of the Malvern Bancorp, Inc., were sold in a subscription offering to certain depositors of the Bank and other investors for $10 per share, or $36.4 million in the aggregate, and 2,921,598 shares of common stock were issued in exchange for the outstanding shares of common stock of the former Mid-Tier Holding Company for the Bank, Malvern Federal Bancorp, Inc., held by the “public” shareholders of the Mid-Tier Holding Company (all shareholders except the Mutual Holding Company). Each share of common stock of the Mid-Tier Holding Company was converted into the right to receive 1.0748 shares of common stock of the new Malvern Bancorp, Inc. in the conversion and reorganization. The total shares outstanding upon completion of the stock offering and the exchange were approximately 6,558,473. Treasury stock of the former Mid-Tier Holding Company was cancelled.
The Company is a Pennsylvania chartered corporation which owns all of the issued and outstanding shares of the Bank’s common stock, the only shares of equity securities which the Bank has issued. The Company does not own or lease any property, but instead uses the premises, equipment and furniture of the Bank. At the present time, the Company employs only persons who are officers of Malvern Federal Savings to serve as officers of the Company. The Company also uses the Bank’s support staff from time to time. These persons are not separately compensated by the Company.
Malvern Federal Savings Bank is a federally chartered stock savings bank which was originally organized in 1887 and is operating out of its headquarters in Paoli, Pennsylvania and eight full service financial center offices in Chester and Delaware Counties, Pennsylvania. The Bank is primarily engaged in attracting deposits from the general public and using those funds to invest in loans and investment securities. The Bank’s principal sources of funds are deposits, repayments of loans and investment securities, maturities of investments and interest-bearing deposits, other funds provided from operations and wholesale funds borrowed from outside sources such as the Federal Home Loan Bank of Pittsburgh (the “FHLB”). These funds are primarily used for the origination of various loan types including single-family residential mortgage loans, commercial real estate mortgage loans, construction and development loans, home equity loans and lines of credit and other consumer loans. The Bank derives its income principally from interest earned on loans, investment securities and, to a lesser extent, from fees received in connection with the origination of loans and for other services. The Bank’s primary expenses are interest expense on deposits and borrowings and general operating expenses. Funds for activities are provided primarily by deposits, amortization of loans, loan prepayments and the maturity of loans, securities and other investments and other funds from operations.
The Bank, the Mid-Tier Holding Company and the Mutual Holding Company previously were regulated by the Office of Thrift Supervision (the “OTS”). As a result of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the OTS was eliminated and, as of July 21, 2011, the regulatory oversight functions and authority of the OTS related to the Bank were transferred to the Office of the Comptroller of the Currency (the “OCC”) and the regulatory oversight functions and authority of the OTS related to savings and loan holding companies, such as the Company and, previously, the Mid-Tier Holding Company, were transferred to the Board of Governors of the Federal Reserve System (the “Federal Reserve Board” or the “FRB”).
The Company and its subsidiaries, Malvern Federal Holdings, Inc., a Delaware company, and the Bank and the Bank’s subsidiaries, Strategic Asset Management Group, Inc. (“SAMG”) and Malvern Federal Investments, Inc., a Delaware company, provide various banking services, primarily accepting deposits and originating residential and commercial mortgage loans, consumer loans and other loans through the Bank’s eight full-service branches in Chester and Delaware Counties, Pennsylvania. SAMG owns 50% of Malvern Insurance Associates, LLC. Malvern Insurance Associates, LLC offers a full line of business and personal lines of insurance products. As of June 30, 2013 and September 30, 2012, SAMG’s total assets were $38,000 and $42,000, respectively. The net loss for SAMG for both the three and nine months ended June 30, 2013 was $4,000. There was no income reported for SAMG for the three and nine months ended June 30, 2012. The Company is subject to competition from various other financial institutions and financial services companies. The Company is also subject to the regulations of certain federal agencies and, therefore, undergoes periodic examinations by those regulatory agencies.
In accordance with the subsequent events topic of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (the “Codification” or the “ASC”), the Company evaluates events and transactions that occur after the statement of financial condition date for potential recognition and disclosure in the consolidated financial statements. The effect of all subsequent events that provide additional evidence of conditions that existed at the statement of financial date are recognized in the unaudited consolidated financial statements as of June 30, 2013. |
Fair Value Measurements (Tables)
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Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of balances of assets measured at fair value on a recurring basis |
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Schedule of assets fair value on a nonrecurring basis and level of valuation assumptions |
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Schedule of carrying amount and estimated fair value of the Company's financial instruments |
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Fair Value Inputs Level 2
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Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of quantitative information regarding significant techniques and inputs used |
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Fair Value Inputs Level 3
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Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of quantitative information regarding significant techniques and inputs used |
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Income Taxes
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9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Income Taxes [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Note 9 – Income Taxes
The following is reconciliation between the statutory federal income tax rate of 34% and the effective income tax rate on income before income taxes:
Deferred income taxes at June 30, 2013 and September 30, 2012 were as follows:
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Regulatory Matters (Detail Textuals) (USD $)
In Thousands, unless otherwise specified |
9 Months Ended | |
---|---|---|
Jun. 30, 2013
|
Sep. 30, 2012
|
|
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ||
Stock Issued During Period, Value, New Issues | $ 34,633 | |
Tier One Risk Based Capital Required for Capital Adequacy to Risk Weighted Assets | 4.00% | 4.00% |
Tier One Risk Based Capital Required to be Well Capitalized to Risk Weighted Assets | 6.00% | 6.00% |
Malvern Federal Savings Bank | Second-Step Conversion
|
||
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ||
Stock Issued During Period, Value, New Issues | $ 25,000 | |
Parent Company [Member]
|
||
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ||
Tier One Capital To Adjusted Total Assets | 8.50% | |
Tier One Risk Based Capital Required for Capital Adequacy to Risk Weighted Assets | 10.50% | |
Tier One Risk Based Capital Required to be Well Capitalized to Risk Weighted Assets | 12.50% |
Summary of Significant Accounting Policies (Detail Textuals) (USD $)
In Thousands, unless otherwise specified |
9 Months Ended | |
---|---|---|
Jun. 30, 2013
Segment
|
Sep. 30, 2012
|
|
Trading securities | $ 0 | $ 0 |
Amount of loans classified as held for sale | $ 0 | $ 0 |
Number of reportable segments | 1 | |
Maximum
|
||
Property, plant and equipment, useful life | P39Y | |
Minimum
|
||
Property, plant and equipment, useful life | P3Y |
Organizational Structure and Nature of Operations (Detail Textuals) (USD $)
|
3 Months Ended | 9 Months Ended | 0 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | 0 Months Ended | |||||||
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Jun. 30, 2013
stores
|
Jun. 30, 2012
|
Jun. 30, 2013
stores
|
Jun. 30, 2012
|
Sep. 30, 2012
|
Sep. 30, 2008
|
May 19, 2008
|
Oct. 11, 2012
Second-Step Conversion
|
May 19, 2008
Malvern Federal Mutual Holding Company
|
May 19, 2008
Malvern Federal Charitable Foundation
|
Jun. 30, 2013
Strategic Asset Management Group, Inc.
|
Jun. 30, 2013
Strategic Asset Management Group, Inc.
|
Sep. 30, 2012
Strategic Asset Management Group, Inc.
|
Oct. 11, 2012
Mid Tier Holding Company
Second-Step Conversion
|
|
Common stock, shares issued | 6,558,473 | 6,558,473 | 6,102,500 | 2,645,575 | 3,383,875 | 123,050 | ||||||||
Common stock, shares authorized | 40,000,000 | 40,000,000 | 40,000,000 | |||||||||||
Share purchase price (in dollars per share) | $ 10.00 | |||||||||||||
Number of common stock issued in connection with conversion and reorganization | 3,636,875 | 2,921,598 | ||||||||||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | ||||||||||
Subscription price | $ 10 | |||||||||||||
Percentage of outstanding shares as number of stock issued | 55.00% | 2.00% | ||||||||||||
Common stock, value, subscriptions | $ 36,400,000 | $ 1,200,000 | ||||||||||||
Common stock, conversion basis | Each share of common stock of the Mid-Tier Holding Company was converted into the right to receive 1.0748 shares of common stock of the new Malvern Bancorp, Inc. in the conversion and reorganization. |
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Common stock, shares outstanding | 6,558,473 | 6,558,473 | 6,102,500 | |||||||||||
Cash | 100,000 | |||||||||||||
Proceeds from issuance of common stock | (20,841,000) | |||||||||||||
Employee Stock Ownership Plan (ESOP), amount borrowed | 2,600,000 | |||||||||||||
Employee Stock Ownership Plan (ESOP), shares purchased | 241,178 | |||||||||||||
Employee Stock Ownership Plan (ESOP), debt structure, direct loan, description | The loan, which bears an interest rate of 5%, is being repaid in quarterly installments through 2026. |
Principal and interest payments of the loan are being made quarterly over a term of 18 years at a fixed interest rate of 5.0%. |
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Proceeds from issuance of common stock, offering expenses | 1,600,000 | |||||||||||||
Number of branches | 8 | 8 | ||||||||||||
Investment owned, percentage | 50.00% | 50.00% | ||||||||||||
Assets | 665,907,000 | 665,907,000 | 711,812,000 | 38,000 | 38,000 | 42,000 | ||||||||
Net Income (Loss) | $ 141,000 | $ 272,000 | $ (33,000) | $ 1,742,000 | $ 4,000 | $ 4,000 | ||||||||
Number of shares of Malvern Bancorp, Inc entitled to receive by public stockholders | 1.0748 | 1.0748 |
Income Taxes (Tables)
|
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Income Taxes [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of reconciliation between the statutory federal income tax rate and the effective income tax rate on income before income tax |
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Schedule of deferred income taxes |
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Consolidated Statements of Comprehensive (Loss) Income (Unaudited) (Parenthetical) (USD $)
|
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
|
Consolidated Statements of Comprehensive (Loss) Income [Abstract] | ||||
Income tax expense on net gains on sale of securities | $ 100,000 | $ 14,000 | $ 171,000 | $ 225,000 |
Consolidated Statements of Changes in Shareholders' Equity (Parentheticals) (Unaudited) (USD $)
In Millions, except Share data, unless otherwise specified |
9 Months Ended | |
---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
|
Consolidated Statements of Changes in Shareholders' Equity [Abstract] | ||
Additional ESOP shares, exchange rate | 1.0748 | 1.0748 |
Stock Issued During Period, Shares, Employee Stock Purchase Plans | 18,040 | |
ESOP converted share amount | $ 10 | |
Proceeds from issuance of common stock, offering expenses | $ 1.6 | |
Committed to be released ESOP shares | 10,771 | 10,053 |
Summary of Significant Accounting Policies
|
9 Months Ended | ||||||||||||||||||||||||
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Jun. 30, 2013
|
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Summary of Significant Accounting Policies [Abstract] | |||||||||||||||||||||||||
Summary of Significant Accounting Policies | Note 2 – Summary of Significant Accounting Policies
Basis of Presentation and Consolidation
The consolidated financial statements at June 30, 2013 and for the three and nine months ended June 30, 2013 include the accounts of Malvern Bancorp, Inc. and its subsidiaries. The consolidated financial statements at September 30, 2012 and for the three and nine months ended June 30, 2012 include the accounts of Malvern Federal Bancorp, Inc. and its subsidiaries. All significant intercompany transactions and balances have been eliminated.
The accompanying unaudited consolidated financial statements were prepared in accordance with the instructions to Form 10-Q, and therefore, do not include all the information or footnotes necessary for a complete presentation of financial condition, operations, comprehensive (loss) income, changes in shareholders’ equity, and cash flows in conformity with accounting principles generally accepted in the United States of America (“GAAP”). However, all normal recurring adjustments that, in the opinion of management, are necessary for a fair presentation of the consolidated financial statements have been included. The results for the three and nine months ended June 30, 2013 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2013, or any other period. The unaudited consolidated financial statements presented herein should be read in conjunction with the audited consolidated financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended September 30, 2012.
Use of Estimates
The preparation of consolidated 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 consolidated financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, the valuation of deferred tax assets, the evaluation of other-than-temporary impairment of investment securities and fair value measurements.
Significant Group Concentrations of Credit Risk
Most of the Company’s activities are with customers located within Chester and Delaware Counties, Pennsylvania. Note 5 discusses the types of investment securities that the Company invests in. Note 6 discusses the types of lending that the Company engages in. The Company does not have any significant concentrations to any one industry or customer. Although the Company has a diversified portfolio, its debtors ability to honor their contracts is influenced by, among other factors, the region’s economy.
Cash and Cash Equivalents
For purposes of reporting cash flows, cash and cash equivalents include cash on hand, amounts due from depository institutions and interest bearing deposits.
The Company maintains cash deposits in other depository institutions that occasionally exceed the amount of deposit insurance available. Management periodically assesses the financial condition of these institutions and believes that the risk of any possible credit loss is minimal.
Investment Securities
Debt securities held to maturity are securities that the Company has the positive intent and the ability to hold to maturity; these securities are reported at amortized cost and adjusted for unamortized premiums and discounts. Securities held for trading are securities that are bought and held principally for the purpose of selling in the near term; these securities are reported at fair value, with unrealized gains and losses reported in current earnings. At June 30, 2013 and September 30, 2012, the Company had no investment securities classified as trading. Debt securities that will be held for indefinite periods of time and equity securities, including securities that may be sold in response to changes in market interest or prepayment rates, needs for liquidity and changes in the availability of and the yield of alternative investments, are classified as available for sale. Realized gains and losses are recorded on the trade date and are determined using the specific identification method. Securities held as available for sale are reported at fair value, with unrealized gains and losses, net of tax, reported as a component of accumulated other comprehensive income (“AOCI”). Management determines the appropriate classification of investment securities at the time of purchase.
Securities are evaluated on a quarterly basis, and more frequently when market conditions warrant such an evaluation, to determine whether declines in their value are other-than-temporary. To determine whether a loss in value is other-than-temporary, management utilizes criteria such as the reasons underlying the decline, the magnitude and duration of the decline and whether or not management intends to sell or expects that it is more likely than not that it will be required to sell the security prior to an anticipated recovery of the fair value. The term “other-than-temporary” is not intended to indicate that the decline is permanent, but indicates that the prospects for a near-term recovery of value is not necessarily favorable, or that there is a lack of evidence to support a realizable value equal to or greater than the carrying value of the investment. Once a decline in value for a debt security is determined to be other-than-temporary, the other-than-temporary impairment is separated into (a) the amount of the total other-than-temporary impairment related to a decrease in cash flows expected to be collected from the debt security (the credit loss) and (b) the amount of the total other-than-temporary impairment related to all other factors. The amount of the total other-than-temporary impairment related to the credit loss is recognized in earnings. The amount of the total other-than-temporary impairment related to all other factors is recognized in other comprehensive income.
Loans Receivable
The Company, through the Bank, grants mortgage, construction, commercial and consumer loans to customers. A substantial portion of the loan portfolio is represented by residential and commercial mortgage loans secured by properties located throughout Chester County, Pennsylvania and surrounding areas. The ability of the Company’s debtors to honor their contracts is dependent upon, among other factors, the real estate and general economic conditions in this area.
Loans receivable that management has the intent and ability to hold 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 using the interest method. The Company is amortizing these amounts over the contractual lives of the loans.
The loans receivable portfolio is segmented into residential loans, construction and development loans, commercial loans and consumer loans. The residential loan segment has one class, one- to four-family first lien residential mortgage loans. The construction and development loan segment consists of the following classes: residential and commercial and land loans. Residential construction loans are made for the acquisition of and/or construction on a lot or lots on which a residential dwelling is to be built. Commercial construction loans are made for the purpose of acquiring, developing and constructing a commercial structure. The commercial loan segment consists of the following classes: commercial real estate loans, multi-family real estate loans, and other commercial loans, which are also generally known as commercial and industrial loans or commercial business loans. The consumer loan segment consists of the following classes: home equity lines of credit, second mortgage loans and other consumer loans, primarily unsecured consumer lines of credit.
For all classes of loans receivable, the accrual of interest is discontinued when the contractual payment of principal or interest has become 90 days past due or management has serious doubts about further collection of principal or interest, even though the loan is currently performing. A loan may remain on accrual status if it 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, including impaired loans, generally is either applied against principal or reported as interest income, according to management’s judgment as to the collectability of principal. Generally, loans are restored to accrual status when the obligation is brought current, has performed in accordance with the contractual terms for a reasonable period of time (generally six months) and the ultimate collectability of the total contractual principal and interest is no longer in doubt. The past due status of all classes of loans receivable is determined based on contractual due dates for loan payments.
In addition to originating loans, the Company purchases consumer and mortgage loans from brokers in our market area. Such purchases are reviewed for compliance with our underwriting criteria before they are purchased, and are generally purchased without recourse to the seller. Premiums and discounts on purchased loans are amortized as adjustments to interest income using the effective yield method.
Loans Held-For-Sale
Loans originated and intended for sale in the secondary market are carried at the lower of cost or estimated fair value on the consolidated balance sheet. 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. Servicing is retained at the Bank for loans sold in the secondary market and are placed as a mortgage servicing asset on the consolidated balance sheet (see “Loan Servicing” for more detail). There were no loans classified as held for sale as of June 30, 2013 or September 30, 2012.
Allowance for Loan Losses
The allowance for credit losses consists of the allowance for loan losses and the reserve for unfunded lending commitments. The allowance for loan losses represents management’s estimate of losses inherent in the loan portfolio as of the consolidated statement of financial condition date and is recorded as a reduction to loans. Reserves for unfunded lending commitments represents management’s estimate of losses inherent in its unfunded loan commitments and is recorded in other liabilities on the consolidated statement of financial condition. The allowance for loan losses (“ALLL”) 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. Non-residential consumer loans are generally charged off no later than when they become 120 days past due on a contractual basis or earlier in the event of the borrower’s bankruptcy or if there is an amount deemed uncollectible. 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 estimated. 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, the 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 classified as impaired. For loans that are classified 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 that are not considered impaired. These pools of loans are evaluated for loss exposure based upon historical loss rates for each of these classes of loans, as adjusted for qualitative factors. These qualitative risk factors include:
The qualitative factors are applied to the historical loss rates for each class of loan. A quarterly calculation is made adjusting the reserve allocation for each factor within a risk weighted range as it relates to each particular loan type, collateral type and risk rating within each segment. Data is gathered and evaluated through internal, regulatory, and government sources quarterly for each factor.
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.
In addition, 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 commercial loans or when credit deficiencies arise, such as delinquent loan payments, for commercial and consumer loans. Credit quality risk ratings include categories of “pass,” “special mention,” “substandard” and “doubtful.” Assets classified as “Pass” are those protected by the current net worth and paying capacity of the obligor or by the value of the underlying collateral. Assets which do not currently expose the insured institution to sufficient risk to warrant classification as substandard or doubtful but possess certain identified weaknesses are required to be designated “special mention.” If uncorrected, the potential weaknesses may result in deterioration of the repayment prospects. An asset is considered “substandard” if it is inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. “Substandard” assets include those characterized by the “distinct possibility” that the insured institution will sustain “some loss” if the deficiencies are not corrected. Assets classified as “doubtful” have all of the weaknesses inherent in those classified “substandard” with the added characteristic that the weaknesses present make “collection or liquidation in full,” on the basis of currently existing facts, conditions, and values, “highly questionable and improbable.”
Residential Lending. Residential mortgage originations are secured primarily by properties located in the Company’s primary market area and surrounding areas. We currently originate fixed-rate, fully amortizing mortgage loans with maturities of 10 to 30 years. We also offer adjustable rate mortgage (“ARM”) loans where the interest rate either adjusts on an annual basis or is fixed for the initial one, three, five or seven years and then adjusts annually.
We underwrite one- to four-family residential mortgage loans with loan-to-value ratios of up to 97%, provided that the borrower obtains private mortgage insurance on loans that exceed 80% of the appraised value or sales price, whichever is less, of the secured property. We also require that title insurance, hazard insurance and, if appropriate, flood insurance be maintained on all properties securing real estate loans. We require that a licensed appraiser from our list of approved appraisers perform and submit to us an appraisal on all properties secured by a first mortgage on one- to four-family first mortgage loans.
In underwriting one- to four-family residential mortgage loans, the Company evaluates both the borrower’s ability to make monthly payments and the value of the property securing the loan. Most properties securing real estate loans made by the Company are appraised by independent fee appraisers approved by the Board of Directors. The Company generally requires borrowers to obtain an attorney’s title opinion or title insurance, and fire and property insurance (including flood insurance, if necessary) in an amount not less than the amount of the loan. Real estate loans originated by the Company generally contain a “due on sale” clause allowing the Company to declare the unpaid principal balance due and payable upon the sale of the security property. The Company has not engaged in sub-prime residential mortgage loan originations. Our single-family residential mortgage loans generally are underwritten on terms and documentation conforming to guidelines issued by Freddie Mac and Fannie Mae.
Construction and Development Loans. During fiscal 2010, the Company generally ceased originating any new construction and development loans except for construction/permanent residential mortgage loans. Previously, we originated construction loans for residential and, to a lesser extent, commercial uses within our market area. We generally limited construction loans to builders and developers with whom we had an established relationship, or who were otherwise known to officers of the Bank. Our construction and development loans currently in the portfolio typically have variable rates of interest tied to the prime rate which improves the interest rate sensitivity of our loan portfolio.
Construction and development loans generally are considered to involve a higher level of risk than one-to four-family residential lending, due to the concentration of principal in a limited number of loans and borrowers and the effect of economic conditions on developers, builders and projects. Additional risk is also associated with construction lending because of the inherent difficulty in estimating both a property’s value at completion and the estimated cost (including interest) to complete a project. The nature of these loans is such that they are more difficult to evaluate and monitor. In addition, speculative construction loans to a builder are not pre-sold and thus pose a greater potential risk than construction loans to individuals on their personal residences. In order to mitigate some of the risks inherent to construction lending, we inspect properties under construction, review construction progress prior to advancing funds, work with builders with whom we have established relationships, require annual updating of tax returns and other financial data of developers and obtain personal guarantees from the principals.
Commercial Lending. During fiscal 2010, the Company generally ceased originating new commercial or multi-family real estate mortgage loans and we are no longer purchasing whole loans or participation interests in commercial real estate or multi-family loans from other financial institutions. Commercial and multi-family real estate loans generally present a higher level of risk than loans secured by one- to four-family residences. This greater risk is due to several factors, including the concentration of principal in a limited number of loans and borrowers, the effect of general economic conditions on income producing properties and the increased difficulty of evaluating and monitoring these types of loans. Furthermore, the repayment of loans secured by commercial and multi-family real estate is typically dependent upon the successful operation of the related real estate project. If the cash flow from the project is reduced (for example, if leases are not obtained or renewed, or a bankruptcy court modifies a lease term, or a major tenant is unable to fulfill its lease obligations), the borrower’s ability to repay the loan may be impaired.
Most of the Company’s commercial business loans have been extended to finance local and regional businesses and include short-term loans to finance machinery and equipment purchases, inventory and accounts receivable. The commercial business loans which we originated may be either a revolving line of credit or for a fixed term of generally 10 years or less. Interest rates are adjustable, indexed to a published prime rate of interest, or fixed. Generally, equipment, machinery, real property or other corporate assets secure such loans. Personal guarantees from the business principals are generally obtained as additional collateral.
Consumer Lending Activities. The Company currently originates most of its consumer loans in its primary market area and surrounding areas. The Company originates consumer loans on both a direct and indirect basis. Consumer loans generally have higher interest rates and shorter terms than residential mortgage loans; however, they have additional credit risk due to the type of collateral securing the loan or in some case the absence of collateral. As a result of the declines in the market value of real estate and the deterioration in the overall economy, we are continuing to evaluate and monitor the credit conditions of our consumer loan borrowers and the real estate values of the properties securing our second mortgage loans as part of our on-going efforts to assess the overall credit quality of the portfolio in connection with our review of the allowance for loan losses.
Consumer loans may entail greater credit risk than do residential mortgage loans, particularly in the case of consumer loans which are unsecured or are secured by rapidly depreciable assets, such as automobiles or recreational equipment. In such cases, any repossessed collateral for a defaulted consumer loan may not provide an adequate source of repayment of the outstanding loan balance as a result of the greater likelihood of damage, loss or depreciation. In addition, consumer loan collections are dependent on the borrower’s continuing financial stability, and thus are more likely to be affected by adverse personal circumstances. Furthermore, the application of various federal and state laws, including bankruptcy and insolvency laws, may limit the amount which can be recovered on such loans.
Once all factor adjustments are applied, general reserve allocations for each segment are calculated, summarized and reported on the ALLL summary. ALLL final schedules, calculations and the resulting evaluation process are reviewed quarterly by the Bank’s Asset Classification Committee and the Bank’s Board of Directors.
In addition, Federal bank 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.
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 classified as 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.
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.
For commercial 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 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.
For commercial and industrial loans secured by non-real estate collateral, such as accounts receivable, inventory and equipment, estimated fair values are determined based on the borrower’s financial statements, inventory reports, accounts receivable aging or equipment appraisals or invoices. Indications of value from these sources are generally discounted based on the age of the financial information or the quality of the assets.
Loan Servicing
Servicing assets are recognized as separate assets when rights are acquired through purchase or through sale of financial assets. For sales of mortgage loans, a portion of the cost of originating the loan is allocated to the servicing right based on relative fair value. Fair value is based on market prices for comparable mortgage servicing contracts, when available, or alternatively is based on a valuation model that calculates the present value of estimated future net servicing income. The valuation model incorporates assumptions that market participants would use in estimating future net servicing income, such as the cost to service, the discount rate, the custodial earnings rate, an inflation rate, ancillary income, prepayment speeds and default rates and losses. Capitalized servicing rights are reported in other assets and are amortized into non-interest expense in proportion to, and over the period of, the estimated future net servicing income of the underlying financial assets.
Servicing assets are evaluated for impairment based upon the fair value of the rights as compared to amortized cost. Impairment is determined by stratifying rights into tranches based on predominant risk characteristics, such as interest rate, loan type and investor type. Impairment is recognized through a valuation allowance for an individual tranche, to the extent that fair value is less than the capitalized amount for the tranche. If the Company later determines that all or a portion of the impairment no longer exists for a particular tranche, a reduction of the allowance may be recorded as an increase to income.
Troubled Debt Restructurings
Loans whose terms are modified are classified as troubled debt restructurings (“TDRs”) if the Company grants such borrowers concessions and it is deemed that those borrowers are experiencing financial difficulty. Concessions granted under a troubled debt restructuring may include extending the maturity date of the loan, reducing the interest rate on the loan to a rate which is below market, a combination of rate adjustments and maturity extensions, or by other means including covenant modifications, forbearances or other concessions. However, the Company generally only restructures loans by modifying the payment structure to interest only or by reducing the actual interest rate. We do not accrue interest on loans that were non-accrual prior to the troubled debt restructuring until they have performed in accordance with their restructured terms for a period of at least six months. We continue to accrue interest on troubled debt restructurings which were performing in accordance with their terms prior to the restructure and continue to perform in accordance with their restructured terms. Management evaluates the ALLL with respect to TDRs under the same policy and guidelines as all other performing loans are evaluated with respect to the ALLL.
Other Real Estate Owned
Assets acquired through, or in lieu of, loan foreclosure are held for sale and are initially recorded at fair value at the date of foreclosure, establishing a new cost basis. Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried at the lower of the previously established carrying amount or fair value less cost to sell. Revenue and expenses from operations, disposition gains and losses, and changes in the valuation allowance are included in other expenses from other real estate owned.
Restricted Stock
Restricted stock represents required investments in the common stock of a correspondent bank and is carried at cost. As of June 30, 2013 and September 30, 2012, restricted stock consists solely of the common stock of the Federal Home Loan Bank of Pittsburgh (the “FHLB”).
Management’s evaluation and determination of whether these investments are impaired is based on their assessment of the ultimate recoverability of their cost rather than by recognizing temporary declines in value. The determination of whether a decline affects the ultimate recoverability of an investment’s cost is influenced by criteria such as (1) the significance of the decline in net assets of the FHLB as compared to the capital stock amount for the FHLB and the length of time this situation has persisted, (2) commitments by the FHLB to make payments required by law or regulation and the level of such payments in relation to the operating performance of the FHLB, and (3) the impact of legislative and regulatory changes on institutions and, accordingly, on the customer base of the FHLB.
Property and Equipment
Property and equipment are carried at cost. Depreciation is computed using the straight-line and accelerated methods over estimated useful lives ranging from 3 to 39 years beginning when assets are placed in service. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and any gain or loss is reflected in income for the period. The cost of maintenance and repairs is charged to expense as incurred.
Transfers of Financial Assets
Transfers of financial assets are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity.
Bank-Owned Life Insurance
The Company invests in bank owned life insurance (“BOLI”) as a source of funding for employee benefit expenses. BOLI involves the purchasing of life insurance by the Bank on a chosen group of employees. The Bank is the owner and beneficiary of the policies. This life insurance investment is carried at the cash surrender value of the underlying policies. Earnings from the increase in cash surrender value of the policies are included in other income on the statement of income.
Advertising Costs
The Company follows the policy of charging the costs of advertising to expense as incurred.
Income Taxes
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. These calculations are based on many complex factors including estimates of the timing of reversals of temporary differences, the interpretation of federal income tax laws and a determination of the differences between the tax and the financial reporting basis of assets and liabilities. Actual results could differ significantly from the estimates and interpretations used in determining the current and deferred income tax assets and liabilities.
A valuation allowance is required to be recognized if it is “more likely than not” that a portion of the deferred tax assets will not be realized. The Company’s policy is to evaluate the deferred tax asset on a quarterly basis and record a valuation allowance for our deferred tax asset if we do not have sufficient positive evidence indicating that it is more likely than not that some or all of the deferred tax asset will be realized. The Company’s policy is to account for interest and penalties as components of income tax expense.
Commitments and Contingencies
In the ordinary course of business, the Company has entered into off-balance sheet financial instruments consisting of commitments to extend credit and standby letters of credit. Such financial instruments are recorded in the statement of financial condition when they are funded.
Segment Information
The Company has one reportable segment, “Community Banking.” All of the Company’s activities are interrelated, and each activity is dependent and assessed based on how each of the activities of the Company supports the others. For example, lending is dependent upon the ability of the Company to fund itself with deposits and other borrowings and manage interest rate and credit risk. Accordingly, all significant operating decisions are based upon analysis of the Company as one segment or unit.
Comprehensive Income
Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income. Although certain changes in assets and liabilities, such as unrealized gains and losses on available for sale investment securities, are reported as a separate component of the shareholders’ equity section of the statement of financial condition, such items, along with net income, are components of comprehensive income.
Reclassifications
Certain reclassifications have been made to the previous years’ consolidated financial statements to conform to the current year’s presentation. These reclassifications had no effect on the Company’s results of operations.
Recent Accounting Pronouncements
In July 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2013-11, “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists.” This amendment addresses the financial statement presentation of an unrecognized tax benefit, or a portion of an unrecognized tax benefit, as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. The amendments in this Update are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. Early adoption is permitted. The amendments should be applied prospectively to all unrecognized tax benefits that exist at the effective date. The adoption of this ASU is not expected to have a material impact on the Company’s consolidated financial statements. In February 2013, the FASB issued ASU 2013-02, “Comprehensive Income, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (Topic 220).” The amendments in this update aim to improve the reporting of reclassifications out of accumulated other comprehensive income. The amendments in this update seek to attain that objective by requiring an entity to report the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income if the amount being reclassified is required under U.S. GAAP to be reclassified in its entirety to net income. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income in the same reporting period, an entity is required to cross-reference other disclosures required under U.S. GAAP that provide additional detail about those amounts. This would be the case when a portion of the amount reclassified out of accumulated other comprehensive income is reclassified to a balance sheet account instead of directly to income or expense in the same reporting period. For public entities, the amendments are effective prospectively for reporting periods beginning after December 15, 2012. The adoption of this Update did not have a material effect on the Company’s consolidated financial statements. |
Earnings Per Share - Composition of weighted average shares (denominator) used in earnings per share computations (Details) (USD $)
In Thousands, except Share data, unless otherwise specified |
3 Months Ended | 9 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
|||||
Earnings Per Share [Abstract] | ||||||||
Net Income (Loss) | $ 141 | $ 272 | $ (33) | $ 1,742 | ||||
Average common shares outstanding | 6,558,473 | 6,102,500 | 6,540,100 | 6,102,500 | ||||
Exchange rate from offering | 1.0748 | 1.0748 | ||||||
Adjusted weighted average shares outstanding | 6,558,473 | 6,558,967 | 6,540,100 | 6,558,967 | ||||
Average unearned ESOP shares | (192,147) | (202,175) | (195,056) | (205,798) | ||||
Weighted average shares outstanding - basic | 6,366,326 | 6,356,792 | 6,345,044 | 6,353,169 | ||||
Earnings (Loss) per share - basic (in dollars per share) | $ 0.02 | $ 0.04 | [1] | $ (0.01) | $ 0.27 | [1] | ||
|
Investment Securities - Amortized cost and fair value of debt securities by contractual maturity (Details) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2013
|
Sep. 30, 2012
|
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Available-for-sale Securities, Debt Maturities, Amortized Cost Basis, Rolling Maturity [Abstract] | ||
Within 1 year | $ 2,652 | |
Over 1 year through 5 years | 3,775 | |
After 5 years through 10 years | 27,039 | |
Over 10 years | 1,469 | |
Available-for-sale Securities, Single Maturity Date, Amortized Cost Basis, Total | 34,935 | |
Mortgage-backed securities | 93,959 | |
Available-for-sale Securities, Amortized Cost Basis, Total | 128,894 | 79,536 |
Available-for-sale Securities, Debt Maturities, Fair Value, Rolling Maturity [Abstract] | ||
Within 1 year | 2,471 | |
Over 1 year through 5 years | 3,774 | |
After 5 years through 10 years | 25,986 | |
Over 10 years | 1,409 | |
Available-for-sale Securities, Single Maturity Date, Fair Value, Total | 33,640 | |
Mortgage-backed securities | 91,811 | |
Available-for-sale Securities, Fair value, Total | $ 125,451 | $ 80,508 |