UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
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Malvern Federal Bancorp, Inc.
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(A NEW PENNSYLVANIA CORPORATION)
AND
PROXY STATEMENT OF MALVERN FEDERAL BANCORP, INC.
(A FEDERAL CORPORATION)
Federal Mutual Holding Company. Malvern Federal Mutual Holding Company, which owns 55.5% of the outstanding common stock of Malvern Federal Bancorp, intends to vote for the plan of conversion and reorganization. Malvern Federal Bancorp is holding a special meeting of shareholders at the Sheraton Great Valley Hotel, located at 707 East Lancaster Avenue, Frazer, Pennsylvania, on Tuesday, October 2, 2012 at 1:00 p.m., Eastern time, to consider and vote upon:
• | 2A—Approval of a provision in the articles of incorporation of Malvern Bancorp—New providing for the authorized capital stock of 50,000,000 shares of common stock and 10,000,000 shares of serial preferred stock compared to 15,000,000 shares of common stock and 5,000,000 shares of preferred stock in the charter of Malvern Federal Bancorp; |
• | 2B—Approval of a provision in the articles of incorporation of Malvern Bancorp—New requiring a super-majority shareholder approval for mergers, consolidations and similar transactions, unless they have been approved in advance by at least two-thirds of the board of directors of Malvern Bancorp—New; |
• | 2C—Approval of a provision in the articles of incorporation of Malvern Bancorp—New requiring a super-majority shareholder approval of amendments to certain provisions in the articles of incorporation and bylaws of Malvern Bancorp—New; and |
• | 2D—Approval of a provision in the articles of incorporation of Malvern Bancorp—New to limit the acquisition of shares in excess of 10% of the outstanding voting securities of Malvern Bancorp—New. |
42 East Lancaster Avenue
Paoli, Pennsylvania 19301
Attention: Investor Relations
(610) 644-9400
Page | ||||||
---|---|---|---|---|---|---|
Questions and Answers for Shareholders of Malvern Federal Bancorp | 1 | |||||
Summary | 4 | |||||
Risk Factors | 18 | |||||
Information About the Special Meeting of Shareholders | 26 | |||||
Proposal 1. Approval of the Plan of Conversion and Reorganization | 28 | |||||
Proposal 2. Informational Proposals Related to the Articles of Incorporation of Malvern Bancorp—New | 33 | |||||
Informational Proposal 2A | 33 | |||||
Informational Proposal 2B | 33 | |||||
Informational Proposal 2C | 34 | |||||
Informational Proposal 2D | 35 | |||||
Proposal 3. Adjournment of the Special Meeting | 36 | |||||
Selected Consolidated Financial and Other Data | 37 | |||||
Recent Developments of Malvern Federal Bancorp | 39 | |||||
Forward-Looking Statements | 51 | |||||
Use of Proceeds | 52 | |||||
Our Dividend Policy | 53 | |||||
Market for Our Common Stock | 54 | |||||
Regulatory Capital Requirements | 55 | |||||
Our Capitalization | 56 | |||||
Pro Forma Data | 57 | |||||
Management’s Discussion and Analysis of Financial Condition and Results of Operations | 60 | |||||
Business | 81 | |||||
Regulation | 109 | |||||
Taxation | 119 | |||||
Management | 121 | |||||
Beneficial Ownership of Common Stock | 127 | |||||
Proposed Management Purchases | 129 | |||||
Interests of Certain Persons in Matters to be Acted Upon | 130 | |||||
The Conversion and Offering | 131 | |||||
Comparison of Shareholder’ Rights | 156 | |||||
Restrictions on Acquisition of Malvern Bancorp—New and Malvern Federal Savings Bank and Related Anti-Takeover Provisions | 164 | |||||
Description of Our Capital Stock | 167 | |||||
Experts | 168 | |||||
Transfer Agent, Exchange Agent and Registrar | 168 | |||||
Legal and Tax Opinions | 168 | |||||
Registration Requirements | 168 | |||||
Where You Can Find Additional Information | 168 | |||||
Shareholder Proposals for the 2013 Annual Meeting | 169 | |||||
Index to Consolidated Financial Statements | F-1 |
42 East Lancaster Avenue
Paoli, Pennsylvania 19301
(610) 644-9400
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To Be Held on October 2, 2012
• | 2A—Approval of a provision in the articles of incorporation of Malvern Bancorp—New providing for the authorized capital stock of 50,000,000 shares of common stock and 10,000,000 shares of serial preferred stock compared to 15,000,000 shares of common stock and 5,000,000 shares of preferred stock in the charter of Malvern Federal Bancorp; |
• | 2B—Approval of a provision in the articles of incorporation of Malvern Bancorp—New requiring a super-majority shareholder approval for mergers, consolidations and similar transactions, unless they have been approved in advance by at least two-thirds of the board of directors of Malvern Bancorp—New; |
• | 2C—Approval of a provision in the articles of incorporation of Malvern Bancorp—New requiring a super-majority shareholder approval of amendments to certain provisions in the articles of incorporation and bylaws of Malvern Bancorp—New; and |
• | 2D—Approval of a provision in the articles of incorporation of Malvern Bancorp—New to limit the acquisition of shares in excess of 10% of the outstanding voting securities of Malvern Bancorp—New; |
![](https://capedge.com/proxy/DEF 14A/0001188112-12-002648/shirleystanke_sig.jpg)
Corporate Secretary
August 10, 2012
Q. | What are shareholders being asked to approve? |
Q. | What is the conversion? |
Q. | What will shareholders receive for their existing Malvern Federal Bancorp shares? |
example, if you own 100 shares of Malvern Federal Bancorp common stock and the exchange ratio is 0.8127, after the conversion you will receive 81 shares of Malvern Bancorp—New common stock and $0.27 in cash, the value of the fractional share, based on the $10.00 per share offering price. Shareholders who hold shares in street-name at a brokerage firm will receive these funds in their brokerage account. Shareholders who have stock certificates will receive checks. The number of shares you will get will depend on the number of shares sold in the offering and will be based on an exchange ratio determined as of the closing of the conversion. The actual number of shares you receive will depend upon the number of shares we sell in our offering, which in turn will depend upon the final appraised value of Malvern Bancorp—New. The exchange ratio will adjust based on the number of shares sold in the offering. It will not depend on the market price of the common stock Malvern Federal Bancorp.
Q. | What are the reasons for the conversion and offering? |
• | In light of the risk profile posed by, among other factors, the increased levels of our non-performing assets in recent years and also based in part upon our communications with staff of the Office of the Comptroller of the Currency, we determined to increase the amount of capital we maintain at Malvern Federal Savings Bank. The additional funds raised in the offering will increase our capital (although Malvern Federal Savings Bank is deemed to be “well-capitalized”) and support our ability to operate in accordance with our business plan in the future. |
• | Conversion to the fully public form of ownership will remove the uncertainties associated with the mutual holding company structure. We believe that the conversion and offering will result in a more familiar and flexible form of corporate organization and will better position us to continue to meet all current and future regulatory requirements, including regulatory capital requirements which may be imposed on savings and loan holding companies such as Malvern Bancorp—New, and, in light of the portion of the net proceeds of the offering to be retained by the new stock-form holding company, will facilitate the ability of Malvern Bancorp—New to serve as a source of strength for Malvern Federal Savings Bank. |
• | The number of our outstanding shares after the conversion and offering will be greater than the number of shares currently held by public shareholders, so we expect our stock to have greater liquidity. |
Q. | Why should I vote? |
Q. | What happens if I don’t vote? |
Q. | How do I vote? |
Q. | If my shares are held in street name, will my broker automatically vote on my behalf? |
Q. | What if I do not give voting instructions to my broker? |
Q. | How will my existing Malvern Federal Bancorp shares be exchanged? |
Q. | Should I submit my stock certificates now? |
Q. | May I place an order to purchase shares in the offering, in addition to the shares that I will receive in the exchange? |
• | 2A—Approval of a provision in the articles of incorporation of Malvern Bancorp—New providing for the authorized capital stock of 50,000,000 shares of common stock and 10,000,000 shares of serial preferred stock compared to 15,000,000 shares of common stock and 5,000,000 shares of preferred stock in the charter of Malvern Federal Bancorp; |
• | 2B—Approval of a provision in the articles of incorporation of Malvern Bancorp—New requiring a super-majority shareholder approval for mergers, consolidations and similar transactions, unless they have been approved in advance by at least two-thirds of the board of directors of Malvern Bancorp—New; |
• | 2C—Approval of a provision in the articles of incorporation of Malvern Bancorp—New requiring a super-majority shareholder approval of amendments to certain provisions in the articles of incorporation and bylaws of Malvern Bancorp—New; and |
• | 2D—Approval of a provision in the articles of incorporation of Malvern Bancorp—New to limit the acquisition of shares in excess of 10% of the outstanding voting securities of Malvern Bancorp—New; |
2012, our commercial real estate loans amounted to $122.1 million, or 25.8% of our total loans, our total home equity loans and lines of credit amounted to $92.9 million, or 19.7% of our loan portfolio and our total construction and development loans amounted to $22.5 million, or 4.7% of our total loan portfolio.
• | prohibit us from making or acquiring any new commercial real estate loans and/or commercial and industrial loans without the prior written non-objection of the Office of the Comptroller of the Currency (the “OCC”) (as successor to the Office of Thrift Supervision); |
• | required us to develop a plan to reduce our problem assets; |
• | required us to develop enhanced policies and procedures for identifying, monitoring and controlling the risks associated with concentrations of commercial real estate loans; |
• | required that an independent third party undertake reviews of our commercial real estate loans, construction and development loans, multi-family residential mortgage loans and commercial loans not less than once every six months; and |
• | prohibit Malvern Federal Bancorp from declaring or paying dividends or making any other capital distributions, such as repurchases of common stock, without the prior written approval of the Board of Governors of the Federal Reserve System (as successor to the Office of Thrift Supervision). |
Holding Company is owning more than a majority of the outstanding shares of common stock of Malvern Federal Bancorp. Malvern Federal Mutual Holding Company currently owns 3,383,875 shares of common stock of Malvern Federal Bancorp, which is 55.5% of the shares outstanding. Malvern Federal Mutual Holding Company will no longer exist upon completion of the conversion and offering and the shares of Malvern Federal Bancorp common stock that it holds will be canceled.
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![](https://capedge.com/proxy/DEF 14A/0001188112-12-002648/offering.jpg)
Shares to be sold in the offering | Shares of Malvern Bancorp—New stock to be issued in exchange for Malvern Federal Bancorp common stock | |||||||||||||||||||||||||||||||||
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Amount | Percent | Amount | Percent | Total shares of Malvern Bancorp—New common stock to be outstanding after the conversion | Exchange ratio | 100 shares of Malvern Federal Bancorp common stock would be exchanged for the following number of shares of Malvern Bancorp—New(1) | Equivalent Per Share Value(2) | |||||||||||||||||||||||||||
Minimum | 2,337,500 | 55.4506 | % | 1,877,961 | 44.5494 | % | 4,215,461 | 0.6908 | 69 | $ | 6.91 | |||||||||||||||||||||||
Midpoint | 2,750,000 | 55.4506 | 2,209,366 | 44.5494 | 4,959,366 | 0.8127 | 81 | 8.13 | ||||||||||||||||||||||||||
Maximum | 3,162,500 | 55.4506 | 2,540,771 | 44.5494 | 5,703,271 | 0.9346 | 93 | 9.35 | ||||||||||||||||||||||||||
Maximum, as adjusted | 3,636,875 | 55.4506 | 2,921,887 | 44.5494 | 6,558,762 | 1.0748 | 107 | 10.75 |
(1) | Cash will be paid instead of issuing any fractional shares. |
(2) | Represents the value of shares of Malvern Bancorp—New common stock to be received by a holder of one share of Malvern Federal Bancorp common stock at the exchange ratio, assuming a value of $10.00 per share. |
• | In light of the risk profile posed by, among other factors, the increased levels of our non-performing assets in recent years and also based in part upon our communications with staff of the Office of the Comptroller of the Currency, we determined to increase the amount of capital we maintain at Malvern |
Federal Savings Bank. The additional funds raised in the offering will increase our capital such that we meet all of the specific capital ratio targets that we have established (which exceed the regulatory thresholds for “well-capitalized” status) and support our ability to operate in accordance with our business strategy in the future. |
• | Conversion to the fully public form of ownership will remove the uncertainties associated with the mutual holding company structure. We believe that the conversion and offering will result in a more familiar and flexible form of corporate organization and will better position us to continue to meet all current and future regulatory requirements, including regulatory capital requirements which may be imposed on savings and loan holding companies such as Malvern Bancorp—New, and, in light of the portion of the net proceeds of the offering to be retained by the new stock-form holding company, will facilitate the ability of Malvern Bancorp—New to serve as a source of strength for Malvern Federal Savings Bank. |
• | The number of our outstanding shares after the conversion and offering will be greater than the number of shares currently held by public shareholders, so we expect our stock to have greater liquidity. |
• | The plan of conversion and reorganization is approved by at least a majority of votes eligible to be cast by members of Malvern Federal Mutual Holding Company (who are the depositors and certain borrowers of Malvern Federal Savings Bank); |
• | The plan of conversion and reorganization is approved by at least: |
• | two-thirds of the outstanding shares of Malvern Federal Bancorp common stock; and |
• | a majority of outstanding shares of Malvern Federal Bancorp common stock held by public shareholders; |
• | We sell at least the minimum number of shares offered in the offering; and |
• | We receive the final approval of the Federal Reserve Board to complete the conversion and offering and related transactions. |
the common stock at that time is either below $42.2 million or above $65.6 million, we will notify subscribers, return their funds, with interest, or cancel their deposit account withdrawal authorizations. If we decide to set a new offering range, subscribers will have the opportunity to place a new order. See “The Conversion and Offering—How We Determined the Price Per Share, the Offering Range and the Exchange Ratio” for a description of the factors and assumptions used in determining the stock price and offering range.
Company Name and Ticker Symbol | Exchange | Headquarters | Total Assets (in millions) | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
ESSA Bancorp, Inc. (ESSA) | NASDAQ | Stroudsburg, PA | $ | 1,097 | ||||||||||
Cape Bancorp, Inc. (CBNJ) | NASDAQ | Cape May Court House, NJ | 1,071 | |||||||||||
Beacon Federal Bancorp, Inc. (BFED) | NASDAQ | East Syracuse, NY | 1,027 | |||||||||||
Ocean Shore Holding Co. (OSHC) | NASDAQ | Ocean City, NJ | 995 | |||||||||||
Fox Chase Bancorp, Inc. (FXCB) | NASDAQ | Hatboro, PA | 994 | |||||||||||
TF Financial Corp. (THRD) | NASDAQ | Newtown, PA | 682 | |||||||||||
Oneida Financial Corp. (ONFC) | NASDAQ | Oneida, NY | 656 | |||||||||||
Colonial Financial Services, Inc. (COBK) | NASDAQ | Vineland, NJ | 604 | |||||||||||
Alliance Bancorp, Inc. of PA (ALLB) | NASDAQ | Broomall, PA | 470 | |||||||||||
Standard Financial Corp. (STND) | NASDAQ | Monroeville, PA | 437 |
• | our historical, present and projected operating results including, but not limited to, historical income statement information such as return on assets, return on equity, net interest margin trends, operating expense ratios, levels and sources of non-interest income, and levels of loan loss provisions; |
• | our historical, present and projected financial condition including, but not limited to, historical balance sheet size, composition and growth trends, loan portfolio composition and trends, liability composition and trends, credit risk measures and trends, and interest rate risk measures and trends; |
• | the economic, demographic and competitive characteristics of Malvern Federal Bancorp’s primary market area including, but not limited to, employment by industry type, unemployment trends, size and growth of the population, trends in household and per capita income, deposit market share and largest competitors by deposit market share; |
• | a comparative evaluation of the operating and financial statistics of Malvern Federal Bancorp’s with those of other similarly situated, publicly traded companies, which included a comparative analysis of balance sheet composition, income statement ratios, credit risk, interest rate risk and loan portfolio composition; |
• | the impact of the offering on Malvern Federal Bancorp’s consolidated shareholders’ equity and earnings potential including, but not limited to, the increase in consolidated equity resulting from the offering, the estimated increase in earnings resulting from the reinvestment of the net proceeds of the offering and the effect of higher consolidated shareholders’ equity on Malvern Federal Bancorp’s future operations; |
• | the impact of consolidation of Malvern Federal Mutual Holding Company with and into Malvern Federal Bancorp, including the impact of consolidation of Malvern Federal Mutual Holding Company’s assets and liabilities; and |
• | the trading market for securities of comparable institutions and general conditions in the market for such securities. |
Price to Earnings Multiple | Price to Book Value Ratio | Price to Tangible Book Value Ratio | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Malvern Bancorp—New (pro forma) | ||||||||||||||
Minimum | 45.09 | x | 50.61 | % | 50.61 | % | ||||||||
Midpoint | 51.68 | 56.85 | 56.85 | |||||||||||
Maximum | 57.94 | 62.54 | 62.54 | |||||||||||
Maximum, as adjusted | 64.77 | 68.49 | 68.49 | |||||||||||
Peer group companies as of May 4, 2012 | ||||||||||||||
Average | 18.40 | x | 78.42 | % | 85.17 | % | ||||||||
Median | 17.00 | 74.90 | 83.11 |
Because the independent valuation is based on estimates and projections on a number of matters, all of which are subject to change from time to time, no assurance can be given that persons purchasing the common stock in the offering will be able to sell their shares at a price equal to or greater than the $10.00 purchase price. See “Risk Factors—Our Stock Price May Decline When Trading Commences,” “Pro Forma Data,” and “The Conversion and Offering—How We Determined the Price Per Share, The Offering Range and the Exchange Ratio.”
Completed Second-Step Offerings
Closing Dates between January 1, 2011 and May 4, 2012
Percentage Price Change from Initial Trading Date | |||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Company Name and Ticker Symbol | Closing Date | Exchange | One Day | One Week | One Month | Through May 4, 2012 | |||||||||||||||||||||
Cheviot Financial Corp. (CHEV) | 1/18/12 | NASDAQ | 3.1 | % | 2.6 | % | 3.5 | % | 9.7 | % | |||||||||||||||||
Naugatuck Valley Fin. Corp. (NVSL) | 6/30/11 | NASDAQ | (1.3 | ) | (2.5 | ) | 1.9 | (6.1 | ) | ||||||||||||||||||
Rockville Financial New, Inc. (RCKB) | 3/4/11 | NASDAQ | 6.0 | 6.5 | 5.0 | 14.6 | |||||||||||||||||||||
Eureka Financial Corp. (EKFC) | 3/1/11 | OTCBB | 22.5 | 17.5 | 28.5 | 50.2 | |||||||||||||||||||||
Atlantic Coast Fin. Corp. (ACFC) | 2/4/11 | NASDAQ | 0.5 | — | 2.0 | (77.5 | ) | ||||||||||||||||||||
Alliance Bancorp, Inc. (ALLB) | 1/18/11 | NASDAQ | 10.0 | 6.8 | 11.9 | 16.5 | |||||||||||||||||||||
SI Financial Group, Inc. (SIFI) | 1/13/11 | NASDAQ | 15.9 | 12.9 | 17.5 | 43.9 | |||||||||||||||||||||
Minden Bancorp, Inc. (MDNB) | 1/5/11 | OTCBB | 28.0 | 28.5 | 30.0 | 42.5 | |||||||||||||||||||||
Average | 10.6 | % | 9.0 | % | 12.5 | % | 11.7 | % | |||||||||||||||||||
Median | 8.0 | 6.7 | 8.5 | 15.6 |
• | prohibitions on the acquisition of more than 10% of our stock; |
• | limitations on voting rights of shares held in excess of 10% thereafter; |
• | staggered election of only approximately one-third of our board of directors each year; |
• | limitations on the ability of shareholders to call special meetings; |
• | advance notice requirements for shareholder nominations and new business; |
• | removals of directors only for cause and by a majority vote of all shareholders; |
• | requirement of a 75% vote of shareholders for certain amendments to the bylaws and certain provisions of the articles of incorporation; |
• | the right of the board of directors to issue shares of preferred or common stock without shareholder approval; and |
• | a 75% vote of shareholders’ requirement for the approval of certain business combinations not approved by two-thirds of the board of directors. |
• | Loan delinquencies may increase further; |
• | Problem assets and foreclosures may increase further; |
• | Demand for our products and services may decline; |
• | The carrying value of our other real estate owned may decline further; and |
• | Collateral for loans made by us, especially real estate, may continue to decline in value, in turn reducing a customer’s borrowing power, and reducing the value of assets and collateral associated with our loans. |
than temporary impairment charges, and constrained access to debt markets at attractive rates. While the FHLB announced on February 22, 2012 that a dividend would be paid and capital stock repurchases would resume, capital stock repurchases from member banks are reviewed on a quarterly basis by the FHLB. Such dividends and capital stock repurchases may not continue in the future. As of March 31, 2012, we held $4.8 million of FHLB capital stock.
• | restrictions on acquiring more than 10% of our common stock by any person and limitations on voting rights for positions of more than 10%; |
• | the election of members of the board of directors to staggered three-year terms; |
• | the absence of cumulative voting by shareholders in the election of directors; |
• | provisions restricting the calling of special meetings of shareholders; |
• | advance notice requirements for shareholder nominations and new business; |
• | removals of directors only for cause and by a majority vote of all shareholders; |
• | requirement of a 75% vote of shareholders for certain amendments to the bylaws and certain provisions of the articles of incorporation; |
• | a 75% vote requirement for the approval of certain business combinations not approved by two-thirds of our board of directors; and |
• | our ability to issue preferred stock and additional shares of common stock without shareholder approval. |
• | Malvern Federal Mutual Holding Company will convert from mutual to stock form and simultaneously merge with and into Malvern Federal Bancorp, pursuant to which the mutual holding company will cease to exist and the shares of Malvern Federal Bancorp common stock held by the mutual holding company will be canceled; and |
• | Malvern Federal Bancorp then will merge with and into the Malvern Bancorp—New with Malvern Bancorp—New being the survivor of such merger. |
• | filing a written revocation of the proxy with the corporate secretary of Malvern Federal Bancorp; |
• | submitting a signed proxy card bearing a later date; or |
• | attending and voting in person at the special meeting, but you also must file a written revocation at the meeting with the corporate secretary of Malvern Federal Bancorp prior to the voting. |
shareholders of Malvern Federal Bancorp. The special meetings of members and of shareholders have been called for this purpose on October 2, 2012.
• | In light of the risk profile posed by, among other factors, the increased levels of our non-performing assets in recent years and also based in part upon our communications with staff of the Office of the Comptroller of the Currency, we determined to increase the amount of capital we maintain at Malvern Federal Savings Bank. The additional funds raised in the offering will increase our capital such that we meet all of the specific capital ratio targets that we have established (which exceed the regulatory thresholds for “well-capitalized” status) and support our ability to operate in accordance with our business strategy in the future. |
• | Conversion to the fully public form of ownership will remove the uncertainties associated with the mutual holding company structure. We believe that the conversion and offering will result in a more familiar and flexible form of corporate organization and will better position us to continue to meet all current and future regulatory requirements, including regulatory capital requirements which may be imposed on savings and loan holding companies such as Malvern Bancorp—New, and, in light of the portion of the net proceeds of the offering to be retained by the new stock-form holding company, will facilitate the ability of Malvern Bancorp—New to serve as a source of strength for Malvern Federal Savings Bank. |
• | The number of our outstanding shares after the conversion and offering will be greater than the number of shares currently held by public shareholders, so we expect our stock to have greater liquidity. |
• | the total number of shares of common stock to be issued in the conversion and offering; |
• | the total shares of common stock outstanding after the conversion and offering; |
• | the exchange ratio; and |
• | the number of shares an owner of 100 shares of Malvern Federal Bancorp common stock will receive in the exchange, adjusted for the number of shares sold in the offering, and the assumed value of each of such shares. |
Shares to be sold in the offering | Shares of Malvern Bancorp—New stock to be issued in exchange for Malvern Federal Bancorp common stock | |||||||||||||||||||||||||||||||||
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Amount | Percent | Amount | Percent | Total shares of Malvern Bancorp—New common stock to be outstanding after the conversion | Exchange ratio | 100 shares of Malvern Federal Bancorp common stock would be exchanged for the following number of shares of Malvern Bancorp—New(1) | Equivalent Per Share Value(2) | |||||||||||||||||||||||||||
Minimum | 2,337,500 | 55.4506 | % | 1,877,961 | 44.5494 | % | 4,215,461 | 0.6908 | 69 | $ | 6.91 | |||||||||||||||||||||||
Midpoint | 2,750,000 | 55.4506 | 2,209,366 | 44.5494 | 4,959,366 | 0.8127 | 81 | 8.13 | ||||||||||||||||||||||||||
Maximum | 3,162,500 | 55.4506 | 2,540,771 | 44.5494 | 5,703,271 | 0.9346 | 93 | 9.35 | ||||||||||||||||||||||||||
Maximum, as adjusted | 3,636,875 | 55.4506 | 2,921,887 | 44.5494 | 6,558,762 | 1.0748 | 107 | 10.75 |
(1) | Cash will be paid instead of issuing any fractional shares. |
(2) | Represents the value of shares of Malvern Bancorp—New common stock to be received by a holder of one share of Malvern Federal Bancorp common stock at the exchange ratio, assuming a value of $10.00 per share. |
Bancorp—New common stock issued in the share exchange will have an initial value of $10.00 per share. Depending on the exchange ratio and the market value of Malvern Federal Bancorp common stock at the time of the exchange, the initial market value of the Malvern Bancorp—New common stock that Malvern Federal Bancorp shareholders receive in the share exchange could be less than the market value of the Malvern Federal Bancorp common stock that such persons currently own. If the conversion and offering is completed at the minimum of the offering range, each share of Malvern Federal Bancorp would be converted into 0.6908 shares of Malvern Bancorp—New common stock with an initial value of $6.91 based on the $10.00 offering price in the conversion. This compares to the closing sale price of $8.74 per share price for Malvern Federal Bancorp common stock on August 10, 2012, as reported on the Nasdaq Global Market. In addition, as discussed in “—Effect on Stockholders’ Equity per Share of the Shares Exchanged” below, pro forma stockholders’ equity per share following the conversion and offering will range between $19.76 and $15.99 at the minimum and the maximum of the offering range, respectively.
2,337,500 shares issued at minimum of offering range | 2,750,000 shares issued at midpoint of offering range | 3,162,500 shares issued at maximum of offering range | 3,636,875 shares issued at adjusted maximum of offering range(1) | ||||||||||||||||||||||||||||||||
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Amount | Percent of Total | Amount | Percent of Total | Amount | Percent of Total | Amount | Percent of Total | ||||||||||||||||||||||||||||
Purchasers in the stock offering | 2,337,500 | 55.5 | % | 2,750,000 | 55.5 | % | 3,162,500 | 55.5 | % | 3,636,875 | 55.5 | % | |||||||||||||||||||||||
Malvern Federal Bancorp public shareholders in the exchange | 1,877,961 | 44.5 | 2,209,336 | 44.5 | 2,540,771 | 44.5 | 2,921,887 | 44.5 | |||||||||||||||||||||||||||
Total shares outstanding after the conversion and offering | 4,215,461 | 100.0 | % | 4,959,366 | 100.0 | % | 5,703,271 | 100.0 | % | 6,558,762 | 100.0 | % |
(1) | As adjusted to give effect to an increase in the number of shares that could occur due to an increase in the offering range of 15% to reflect changes in market and financial conditions before the conversion and offering is completed. |
shares held by public shareholders. Based on the pro forma information set forth for the three months ended March 31, 2012, in “Pro Forma Data,” annualized earnings per share of common stock following the conversion and offering will range from $0.74 to $0.48, respectively, for the minimum to the adjusted maximum of the offering range. As adjusted at that date for the exchange ratio, the effective annualized earnings per share for current shareholders would range from $0.51 to $0.52, respectively, for the minimum to the adjusted maximum of the offering range.
TO THE ARTICLES OF INCORPORATION OF MALVERN BANCORP—NEW
Bancorp, currently can effectively block any shareholder proposed change to the charter or bylaws of Malvern Federal Bancorp.
At September 30, | |||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
At March 31, 2012 | 2011 | 2010 | 2009 | 2008 | 2007 | ||||||||||||||||||||||
Selected Financial Condition Data: | (Dollars in thousands) | ||||||||||||||||||||||||||
Total assets | $ | 651,604 | $ | 666,568 | $ | 720,506 | $ | 691,639 | $ | 639,509 | $ | 551,932 | |||||||||||||||
Loans receivable, net | 467,028 | 506,019 | 547,323 | 593,565 | 571,536 | 466,192 | |||||||||||||||||||||
Securities held to maturity | 696 | 3,797 | 4,716 | 4,842 | 2,870 | 1,479 | |||||||||||||||||||||
Securities available for sale | 81,701 | 74,389 | 40,719 | 27,098 | 21,969 | 29,098 | |||||||||||||||||||||
FHLB borrowings | 48,593 | 49,098 | 55,334 | 99,621 | 113,798 | 71,387 | |||||||||||||||||||||
Deposits | 537,029 | 554,455 | 596,858 | 516,511 | 453,493 | 433,488 | |||||||||||||||||||||
Shareholders’ equity | 61,903 | 60,284 | 66,207 | 69,842 | 68,836 | 44,039 | |||||||||||||||||||||
Allowance for loan losses | 8,076 | 10,101 | 8,157 | 5,718 | 5,505 | 4,541 | |||||||||||||||||||||
Non-accrual loans | 11,730 | 12,915 | 19,861 | 14,195 | 8,585 | 2,267 | |||||||||||||||||||||
Non-performing assets | 16,473 | 21,236 | 25,176 | 20,070 | 8,815 | 2,494 | |||||||||||||||||||||
Performing troubled debt restructurings | 8,305 | 10,340 | 11,976 | 25 | 103 | 121 | |||||||||||||||||||||
Non-performing assets and performing troubled debt restructurings | 24,778 | 31,576 | 37,152 | 20,095 | 8,918 | 2,615 |
Six Months Ended March 31, | Year Ended September 30, | ||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2012 | 2011 | 2011 | 2010 | 2009 | 2008 | 2007 | |||||||||||||||||||||||||
Selected Operating Data: | (Dollars in thousands, except per share data) | ||||||||||||||||||||||||||||||
Total interest and dividend income | $ | 13,346 | $ | 15,118 | $ | 29,726 | $ | 33,148 | $ | 34,701 | $ | 33,592 | $ | 32,769 | |||||||||||||||||
Total interest expense | 4,404 | 5,411 | 10,198 | 13,641 | 18,681 | 19,105 | 19,235 | ||||||||||||||||||||||||
Net interest income | 8,942 | 9,707 | 19,528 | 19,507 | 16,020 | 14,487 | 13,534 | ||||||||||||||||||||||||
Provision for loan losses | 25 | 10,042 | 12,392 | 9,367 | 2,280 | 1,609 | 1,298 | ||||||||||||||||||||||||
Net interest income (loss) after provision for loan losses | 8,917 | (335 | ) | 7,136 | 10,140 | 13,740 | 12,878 | 12,236 | |||||||||||||||||||||||
Total other income | 1,868 | 871 | 1,729 | 1,941 | 2,013 | 1,846 | 1,453 | ||||||||||||||||||||||||
Total other expenses | 8,727 | 8,958 | 18,556 | 17,105 | 14,501 | 12,642 | 10,154 | ||||||||||||||||||||||||
Income tax (benefit) expense | 588 | (2,979 | ) | (3,579 | ) | (1,895 | ) | 242 | 630 | 1,123 | |||||||||||||||||||||
Net (loss) income | $ | 1,470 | $ | (5,443 | ) | $ | (6,112 | ) | $ | (3,129 | ) | $ | 1,010 | $ | 1,452 | $ | 2,412 | ||||||||||||||
Earnings (loss) per share (1) | $ | 0.25 | $ | (0.92 | ) | $ | (1.04 | ) | $ | (0.53 | ) | $ | 0.17 | $ | 0.05 | N/A | |||||||||||||||
Dividends per share | $ | — | $ | 0.03 | $ | 0.03 | $ | 0.12 | $ | 0.14 | $ | 0.04 | N/A |
Six Months Ended March 31, | Year Ended September 30, | |||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2012 | 2011 | 2011 | 2010 | 2009 | 2008 | 2007 | ||||||||||||||||||||||||||
Selected Financial Ratios and Other Data (1): | ||||||||||||||||||||||||||||||||
Performance Ratios: | ||||||||||||||||||||||||||||||||
Return on assets (ratio of net income to average total assets) | 0.44 | % | (1.57 | )% | (0.90 | )% | (0.45 | )% | 0.15 | % | 0.25 | % | 0.45 | % | ||||||||||||||||||
Return on average equity (ratio of net income to average equity) | 4.77 | (16.57 | ) | (9.64 | ) | (4.53 | ) | 1.46 | 2.78 | 5.76 | ||||||||||||||||||||||
Interest rate spread (2) | 2.74 | 2.83 | 2.88 | 2.78 | 2.13 | 2.18 | 2.25 | |||||||||||||||||||||||||
Net interest margin (3) | 2.86 | 2.96 | 3.02 | 2.98 | 2.46 | 2.61 | 2.65 | |||||||||||||||||||||||||
Non-interest expenses to average total assets | 2.64 | 2.59 | 2.72 | 2.48 | 2.13 | 2.19 | 1.92 | |||||||||||||||||||||||||
Efficiency ratio (4) | 80.73 | 84.69 | 87.29 | 79.75 | 80.42 | 77.40 | 67.75 | |||||||||||||||||||||||||
Asset Quality Ratios: | ||||||||||||||||||||||||||||||||
Non-accrual loans as a percent of gross loans | 2.48 | 3.05 | 2.52 | 3.60 | 2.38 | 1.52 | 0.51 | |||||||||||||||||||||||||
Non-performing assets as a percent of total assets | 2.53 | 3.20 | 3.19 | 3.49 | 2.90 | 1.38 | 0.45 | |||||||||||||||||||||||||
Non-performing assets and performing troubled debt restructurings as a percent of total assets | 3.80 | 4.89 | 4.74 | 5.16 | 2.91 | 1.39 | 0.47 | |||||||||||||||||||||||||
Allowance for loan losses as a percent of gross loans | 1.71 | 1.97 | 1.97 | 1.48 | 0.96 | 0.96 | 0.97 | |||||||||||||||||||||||||
Allowance for loan losses as a percent of non-accrual loans | 68.85 | 64.50 | 78.21 | 41.07 | 40.28 | 64.12 | 200.31 | |||||||||||||||||||||||||
Net charge-offs to average loans outstanding | 0.84 | 2.91 | 1.97 | 1.19 | 0.35 | 0.12 | 0.03 | |||||||||||||||||||||||||
Capital Ratios(5): | ||||||||||||||||||||||||||||||||
Total risk-based capital to risk weighted assets | 13.71 | 12.51 | 12.01 | 12.85 | 12.67 | 13.33 | 11.24 | |||||||||||||||||||||||||
Tier 1 risk-based capital to risk weighted assets | 12.45 | 11.25 | 10.76 | 11.83 | 11.96 | 12.40 | 10.36 | |||||||||||||||||||||||||
Tangible capital to tangible assets | 8.27 | 8.01 | 7.54 | 8.24 | 9.07 | 9.64 | 8.03 | |||||||||||||||||||||||||
Tier 1 leverage (core) capital to adjusted tangible assets | 8.27 | 8.01 | 7.54 | 8.24 | 9.07 | 9.64 | 8.03 | |||||||||||||||||||||||||
Shareholders’ equity to total assets | 9.50 | 8.90 | 9.04 | 9.19 | 10.10 | 10.76 | 7.98 | |||||||||||||||||||||||||
Tangible shareholders’ equity to total assets | 9.50 | 8.90 | 9.04 | 9.19 | 10.10 | 10.76 | 7.98 | |||||||||||||||||||||||||
Other Data: | ||||||||||||||||||||||||||||||||
Number of full service financial center offices | 8 | 8 | 8 | 8 | 7 | 7 | 7 |
(1) | Earnings per share for the fiscal year ended September 30, 2008, is for period from May 20, 2008, the date of Malvern Federal Bancorp’s initial stock issuance, through September 30, 2008. |
(2) | Represents the difference between the weighted average yield on interest earning assets and the weighted average cost of interest bearing liabilities. |
(3) | Net interest income divided by average interest earning assets. |
(4) | Represents the ratio obtained from dividing non-interest expense by the sum of net interest income and total other income. |
(5) | Other than shareholders’ equity to total assets and tangible shareholders’ equity to total assets, all capital ratios are for Malvern Federal Savings Bank only. |
At June 30, 2012 | At September 30, 2011 | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
(Dollars in thousands) | |||||||||||
Selected Financial Condition Data | |||||||||||
Total assets | $ | 654,051 | $ | 666,568 | |||||||
Loans receivable, net | 465,618 | 506,019 | |||||||||
Securities held to maturity | 679 | 3,797 | |||||||||
Securities available for sale | 84,795 | 74,389 | |||||||||
FHLB borrowings | 48,340 | 49,098 | |||||||||
Deposits | 538,245 | 554,455 | |||||||||
Shareholders’ equity | 62,204 | 60,284 | |||||||||
Allowance for loan losses | 7,983 | 10,101 | |||||||||
Non-accrual loans | 10,628 | 12,915 | |||||||||
Non-performing assets | 14,844 | 21,236 | |||||||||
Performing troubled debt restructurings | 8,258 | 10,340 | |||||||||
Non-performing assets and performing troubled debt restructurings | 23,102 | 31,576 |
For the Three Months Ended June 30, | For the Nine Months Ended June 30, | ||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2012 | 2011 | 2012 | 2011 | ||||||||||||||||
(Dollars in thousands, except per share amounts) | |||||||||||||||||||
Selected Operating Data | |||||||||||||||||||
Total interest and dividend income | $ | 6,321 | $ | 7,430 | $ | 19,667 | $ | 22,548 | |||||||||||
Total interest expense | 2,016 | 2,428 | 6,420 | 7,839 | |||||||||||||||
Net interest income | 4,305 | 5,002 | 13,247 | 14,709 | |||||||||||||||
Provision for loan losses | 335 | 600 | 360 | 10,642 | |||||||||||||||
Net interest income after provision for loan losses | 3,970 | 4,402 | 12,887 | �� | 4,067 | ||||||||||||||
Total other income | 506 | 434 | 2,374 | 1,305 | |||||||||||||||
Total other expenses | 4,172 | 4,476 | 12,899 | 13,434 | |||||||||||||||
Income tax (benefit) expense | 32 | (4 | ) | 620 | (2,983 | ) | |||||||||||||
Net (loss) income | $ | 272 | $ | 364 | $ | 1,742 | $ | (5,079 | ) | ||||||||||
Earnings (loss) per share | $ | 0.05 | $ | 0.06 | $ | 0.29 | $ | (0.86 | ) |
As of or For the Three Months Ended June 30, | As of or For the Nine Months Ended June 30, | ||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2012 | 2011 | 2012 | 2011 | ||||||||||||||||
Selected Financial Ratios and Other Data (1): | |||||||||||||||||||
Performance Ratios: | |||||||||||||||||||
Return on assets (ratio of net income to average total assets) | 0.17 | % | 0.22 | % | 0.35 | % | (0.99 | )% | |||||||||||
Return on average equity (ratio of net income to average equity) | 1.74 | 2.39 | 3.75 | (10.36 | ) | ||||||||||||||
Interest rate spread (2) | 2.67 | 3.03 | 2.70 | 2.89 | |||||||||||||||
Net interest margin (3) | 2.80 | 3.16 | 2.84 | 3.03 | |||||||||||||||
Non-interest expenses to average total assets | 2.57 | 2.67 | 2.62 | 2.61 | |||||||||||||||
Efficiency ratio (4) | 86.72 | 82.34 | 82.58 | 83.89 | |||||||||||||||
Asset Quality Ratios: | |||||||||||||||||||
Non-accrual loans as a percent of gross loans | 2.26 | % | 3.51 | % | 2.26 | % | 3.51 | % | |||||||||||
Non-performing assets as a percent of total assets | 2.27 | 3.65 | 2.27 | 3.65 | |||||||||||||||
Non-performing assets and performing troubled debt restructurings as a percent of total assets | 3.53 | 5.42 | 3.53 | 5.42 | |||||||||||||||
Allowance for loan losses as a percent of gross loans | 1.69 | 1.91 | 1.69 | 1.91 | |||||||||||||||
Allowance for loan losses as a percent of non- accrual loans | 75.11 | 54.57 | 75.11 | 54.57 | |||||||||||||||
Net charge-offs to average loans outstanding | 0.09 | 0.18 | 0.68 | 2.18 | |||||||||||||||
Capital Ratios (5): | |||||||||||||||||||
Total risk-based capital to risk weighted assets | 14.13 | % | 12.03 | % | 14.13 | % | 12.03 | % | |||||||||||
Tier 1 risk-based capital to risk weighted assets | 12.87 | 10.77 | 12.87 | 10.77 | |||||||||||||||
Tangible capital to tangible assets | 8.39 | 7.62 | 8.39 | 7.62 | |||||||||||||||
Tier 1 leverage (core) capital to adjusted tangible assets | 8.39 | 7.62 | 8.39 | 7.62 | |||||||||||||||
Shareholders’ equity to total assets | 9.51 | 9.03 | 9.51 | 9.03 | |||||||||||||||
Tangible shareholders’ equity to total assets | 9.51 | 9.03 | 9.51 | 9.03 | |||||||||||||||
Other Data: | |||||||||||||||||||
Number of full service financial center offices | 8 | 8 | 8 | 8 |
(1) | With the exception of end of period ratios, all ratios are based on average monthly balances during the period and have been annualized where appropriate. |
(2) | Represents the difference between the weighted average yield on interest earning assets and the weighted average cost of interest bearing liabilities. |
(3) | Net interest income divided by average interest earning assets. |
(4) | Represents the ratio obtained from dividing non-interest expense by the sum of net interest income and total other income. |
(5) | Other than shareholders’ equity to total assets and tangible shareholders’ equity to total assets, all capital ratios are for Malvern Federal Savings Bank only. |
June 30, 2012 | March 31, 2012 | September 30, 2011 | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(Dollars in thousands) | |||||||||||||||
Non-accruing loans: | |||||||||||||||
Residential mortgage | $ | 4,118 | $ | 4,425 | $ | 2,866 | |||||||||
Construction and Development: | |||||||||||||||
Residential and commercial | 2,659 | 3,210 | 6,617 | ||||||||||||
Commercial: | |||||||||||||||
Commercial real estate | 2,814 | 2,822 | 1,765 | ||||||||||||
Multi-family | — | — | — | ||||||||||||
Other | 201 | 201 | 229 | ||||||||||||
Consumer: | |||||||||||||||
Home equity lines of credit | 23 | 43 | 61 | ||||||||||||
Second mortgages | 813 | 1,029 | 1,377 | ||||||||||||
Other | — | — | — | ||||||||||||
Total non-accruing loans | 10,628 | 11,730 | 12,915 | ||||||||||||
Accruing loans delinquent more than 90 days past due | — | — | — | ||||||||||||
Real estate owned and other foreclosed assets: | |||||||||||||||
Residential mortgage | $ | 1,341 | $ | 1,374 | $ | 3,872 | |||||||||
Construction and Development: | |||||||||||||||
Residential and commercial | — | — | — | ||||||||||||
Land | 99 | 164 | |||||||||||||
Commercial: | |||||||||||||||
Commercial real estate | 2,742 | 3,171 | 4,415 | ||||||||||||
Multi-family | — | — | — | ||||||||||||
Other | 34 | 34 | 34 | ||||||||||||
Consumer: | |||||||||||||||
Second mortgages | — | — | — | ||||||||||||
Total | 4,216 | 4,743 | 8,321 | ||||||||||||
Total non-performing assets | $ | 14,844 | $ | 16,473 | $ | 21,236 | |||||||||
Performing troubled debt-restructurings: | |||||||||||||||
Residential mortgage | 870 | 876 | 1,049 | ||||||||||||
Construction and Development: | |||||||||||||||
Land loans | 1,151 | 1,154 | 1,160 | ||||||||||||
Commercial: | |||||||||||||||
Commercial real estate | 6,062 | 6,100 | 7,919 | ||||||||||||
Multi-family | — | — | — | ||||||||||||
Other | 175 | 175 | 175 | ||||||||||||
Consumer: | |||||||||||||||
Home equity lines of credit | — | — | 37 | ||||||||||||
Total performing troubled debt restructurings | 8,258 | 8,305 | 10,340 | ||||||||||||
Total non-performing assets and performing troubled debt restructurings | $ | 23,102 | $ | 24,778 | $ | 31,576 | |||||||||
Ratios: | |||||||||||||||
Total non-accrual loans as a percent of gross loans | 2.26 | % | 2.48 | % | 2.52 | % | |||||||||
Total non-performing assets as a percent of total assets | 2.27 | % | 2.53 | % | 3.19 | % | |||||||||
Total non-performing assets and performing troubled debt restructurings as a percent of total assets | 3.53 | % | 3.80 | % | 4.74 | % |
At June 30, 2012 Loans Delinquent For: | |||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
31-89 Days | 90 Days and Over | Total Delinquent Loans | |||||||||||||||||||||||||||||||||||||
Number | Amount | Percent of Total Delinquent Loans 31-89 Days | Number | Amount | Percent of Total Delinquent Loans 90 Days and Over | Number | Amount | Percent of Total Delinquent Loans Greater Than 30 Days | |||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||
Residential mortgage | 7 | $ | 1,225 | 29.2 | % | 17 | $ | 4,118 | 38.8 | % | 24 | $ | 5,343 | 36.1 | % | ||||||||||||||||||||||||
Construction and Development: | |||||||||||||||||||||||||||||||||||||||
Residential and commercial | 2 | 1,050 | 25.1 | 3 | 2,659 | 25.0 | 5 | 3,709 | 25.0 | ||||||||||||||||||||||||||||||
Commercial: | |||||||||||||||||||||||||||||||||||||||
Commercial real estate | — | — | — | 3 | 2,814 | 26.5 | 3 | 2,814 | 19.0 | ||||||||||||||||||||||||||||||
Multi-family | 1 | 587 | 14.0 | — | — | — | 1 | 587 | 4.0 | ||||||||||||||||||||||||||||||
Other | — | — | — | 1 | 201 | 1.9 | 1 | 201 | 1.3 | ||||||||||||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||||||||||||||
Home equity lines of credit | 1 | 15 | 0.4 | 1 | 23 | 0.2 | 2 | 38 | 0.3 | ||||||||||||||||||||||||||||||
Second mortgages | 19 | 1,313 | 31.3 | 11 | 813 | 7.6 | 30 | 2,126 | 14.3 | ||||||||||||||||||||||||||||||
Other | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Total | 30 | $ | 4,190 | 100.00 | % | 36 | $ | 10,628 | 100.00 | % | 66 | $ | 14,818 | 100.00 | % |
June 30, 2012 | March 31, 2012 | September 30, 2011 | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(Dollars in thousands) | |||||||||||||||
Classified assets: | |||||||||||||||
Substandard (1) | $ | 31,724 | $ | 33,200 | $ | 39,860 | |||||||||
Doubtful | — | 443 | 1,095 | ||||||||||||
Loss | — | — | — | ||||||||||||
Total classified assets | 31,724 | 33,643 | 40,955 | ||||||||||||
Special mention assets | 19,960 | 11,267 | 12,685 | ||||||||||||
Total classified and special mention assets | $ | 51,684 | $ | 44,910 | $ | 53,640 |
(1) | Includes other real estate owned. |
Three Months Ended June 30, | |||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2012 | 2011 | ||||||||||||||||||||||||||
Average Outstanding Balance | Interest Earned/Paid | Average Yield/ Rate | Average Outstanding Balance | Interest Earned/Paid | Average Yield/ Rate | ||||||||||||||||||||||
(Dollars in Thousands) | |||||||||||||||||||||||||||
Interest Earning Assets: | |||||||||||||||||||||||||||
Loans receivable (1) | $ | 472,086 | $ | 5,894 | 4.99 | % | $ | 525,058 | $ | 7,034 | 5.36 | % | |||||||||||||||
Investment securities | 88,214 | 410 | 1.86 | 80,709 | 390 | 1.93 | |||||||||||||||||||||
Deposits in other banks | 50,695 | 16 | 0.13 | 22,265 | 6 | 0.11 | |||||||||||||||||||||
FHLB stock | 4,662 | 1 | 0.09 | 5,724 | — | 0.00 | |||||||||||||||||||||
Total interest earning assets (1) | 615,657 | 6,321 | 4.11 | 633,756 | 7,430 | 4.69 | |||||||||||||||||||||
Non-interest earning assets | 34,022 | 36,613 | |||||||||||||||||||||||||
Total assets | $ | 649,679 | $ | 670,369 | |||||||||||||||||||||||
Interest Bearing Liabilities: | |||||||||||||||||||||||||||
Demand and NOW accounts | $ | 93,715 | 60 | 0.26 | $ | 93,432 | 123 | 0.53 | |||||||||||||||||||
Money market accounts | 76,138 | 85 | 0.45 | 89,056 | 252 | 1.13 | |||||||||||||||||||||
Savings accounts | 47,791 | 12 | 0.10 | 46,570 | 22 | 0.19 | |||||||||||||||||||||
Certificate accounts | 294,654 | 1,432 | 1.94 | 306,684 | 1,600 | 2.09 | |||||||||||||||||||||
Total deposits | 512,298 | 1,589 | 1.24 | 535,742 | 1,997 | 1.49 | |||||||||||||||||||||
Borrowed funds | 48,468 | 427 | 3.52 | 49,476 | 431 | 3.48 | |||||||||||||||||||||
Total interest-bearing liabilities | 560,766 | 2,016 | 1.44 | 585,218 | 2,428 | 1.66 | |||||||||||||||||||||
Non-interest bearing liabilities | 26,364 | 24,260 | |||||||||||||||||||||||||
Total liabilities | 587,130 | 609,478 | |||||||||||||||||||||||||
Shareholders’ equity | 62,549 | 60,891 | |||||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 649,679 | �� | $ | 670,369 | ||||||||||||||||||||||
Net Interest-earning assets | $ | 54,891 | $ | 48,538 | |||||||||||||||||||||||
Net interest income | $ | 4,305 | $ | 5,002 | |||||||||||||||||||||||
Net interest spread | 2.67 | % | 3.03 | % | |||||||||||||||||||||||
Net interest margin (2) | 2.80 | % | 3.16 | % | |||||||||||||||||||||||
Average interest-earning assets to average interest-bearing liabilities | 109.79 | % | 108.29 | % |
(1) | Includes non-accrual loans during the respective periods. Calculated net of deferred fees and discounts and allowance for loan losses. |
(2) | Equals net interest income divided by average interest-earning assets. |
Nine Months Ended June 30, | |||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2012 | 2011 | ||||||||||||||||||||||||||
Average Outstanding Balance | Interest Earned/Paid | Average Yield/ Rate | Average Outstanding Balance | Interest Earned/Paid | Average Yield/ Rate | ||||||||||||||||||||||
(Dollars in Thousands) | |||||||||||||||||||||||||||
Interest Earning Assets: | |||||||||||||||||||||||||||
Loans receivable (1) | $ | 482,023 | $ | 18,352 | 5.07 | % | $ | 534,284 | $ | 21,398 | 5.33 | % | |||||||||||||||
Investment securities | 85,690 | 1,279 | 1.99 | 77,183 | 1,125 | 1.95 | |||||||||||||||||||||
Deposits in other banks | 48,025 | 34 | 0.09 | 29,606 | 25 | 0.11 | |||||||||||||||||||||
FHLB stock | 4,934 | 2 | 0.05 | 6,063 | — | 0.00 | |||||||||||||||||||||
Total interest earning assets (1) | 621,672 | 19,667 | 4.21 | 647,136 | 22,548 | 4.64 | |||||||||||||||||||||
Non-interest earning assets | 35,782 | 38,190 | |||||||||||||||||||||||||
Total assets | $ | 657,454 | $ | 685,326 | |||||||||||||||||||||||
Interest Bearing Liabilities: | |||||||||||||||||||||||||||
Demand and NOW accounts | $ | 91,315 | 209 | 0.31 | $ | 90,910 | 421 | 0.61 | |||||||||||||||||||
Money market accounts | 82,326 | 370 | 0.60 | 87,370 | 732 | 1.12 | |||||||||||||||||||||
Savings accounts | 46,015 | 36 | 0.11 | 42,889 | 60 | 0.19 | |||||||||||||||||||||
Certificate accounts | 301,273 | 4,516 | 2.00 | 326,502 | 5,316 | 2.17 | |||||||||||||||||||||
Total deposits | 520,929 | 5,131 | 1.31 | 547,671 | 6,529 | 1.59 | |||||||||||||||||||||
Borrowed funds | 48,721 | 1,289 | 3.53 | 50,094 | 1,310 | 3.49 | |||||||||||||||||||||
Total interest-bearing liabilities | 569,650 | 6,420 | 1.51 | 597,765 | 7,839 | 1.75 | |||||||||||||||||||||
Non-interest bearing liabilities | 25,852 | 23,462 | |||||||||||||||||||||||||
Total liabilities | 595,502 | 621,227 | |||||||||||||||||||||||||
Shareholders’ equity | 61,952 | 64,099 | |||||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 657,454 | $ | 685,326 | |||||||||||||||||||||||
Net Interest-earning assets | $ | 52,022 | $ | 49,371 | |||||||||||||||||||||||
Net interest income | $ | 13,247 | $ | 14,709 | |||||||||||||||||||||||
Net interest spread | 2.70 | % | 2.89 | % | |||||||||||||||||||||||
Net interest margin (2) | 2.84 | % | 3.03 | % | |||||||||||||||||||||||
Average interest- earning assets to average interest- bearing liabilities | 109.13 | % | 108.26 | % |
(1) | Includes non-accrual loans during the respective periods. Calculated net of deferred fees and discounts and allowance for loan losses. |
(2) | Equals net interest income divided by average interest-earning assets. |
increase in the third quarter of fiscal 2012 was due to a $28.4 million increase in the average balance of deposits in other banks.
Three Months Ended June 30, | Nine Months Ended June 30, | ||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2012 | 2011 | 2012 | 2011 | ||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Balance at beginning of period | $ | 8,076 | $ | 10,366 | $ | 10,101 | $ | 8,157 | |||||||||||
Provision for loan losses | 335 | 600 | 360 | 10,642 | |||||||||||||||
Charge-offs: | |||||||||||||||||||
Residential mortgage | 140 | 48 | 1,115 | 2,319 | |||||||||||||||
Construction and Development: | |||||||||||||||||||
Residential and commercial | 199 | — | 611 | 107 | |||||||||||||||
Commercial: | |||||||||||||||||||
Commercial real estate | — | 203 | 855 | 2,417 | |||||||||||||||
Multi-family | — | — | — | 164 | |||||||||||||||
Other | — | 278 | 88 | 278 | |||||||||||||||
Consumer: | |||||||||||||||||||
Home equity lines of credit | 21 | 40 | 72 | 166 | |||||||||||||||
Second mortgages | 110 | 386 | 975 | 3,366 | |||||||||||||||
Other | — | 1 | 22 | 3 | |||||||||||||||
Total charge-offs | 470 | 956 | 3,738 | 8,820 | |||||||||||||||
Recoveries: | |||||||||||||||||||
Residential mortgage | — | 1 | — | 1 | |||||||||||||||
Construction and Development: | |||||||||||||||||||
Residential and commercial | — | — | 1,139 | — | |||||||||||||||
Commercial: | |||||||||||||||||||
Commercial real estate | — | — | — | 1 | |||||||||||||||
Multi-family | — | — | — | 1 | |||||||||||||||
Other | — | 1 | 2 | 2 | |||||||||||||||
Consumer: | |||||||||||||||||||
Home equity lines of credit | 1 | — | 1 | 3 | |||||||||||||||
Second mortgages | 39 | 30 | 114 | 50 | |||||||||||||||
Other | 2 | 4 | 4 | 9 | |||||||||||||||
Total recoveries | 42 | 36 | 1,260 | 67 | |||||||||||||||
Net charge-offs | 428 | 920 | 2,478 | 8,753 | |||||||||||||||
Balance at end of period | $ | 7,983 | $ | 10,046 | $ | 7,983 | $ | 10,046 | |||||||||||
Ratios: | |||||||||||||||||||
Ratio of allowance for loan losses to non-accrual loans | 75.11 | % | 54.47 | % | 75.11 | % | 54.47 | % | |||||||||||
Ratio of net charge-offs to average loans outstanding (1) | 0.09 | % | 0.18 | % | 0.68 | % | 2.18 | % | |||||||||||
Ratio of net charge-offs to total allowance for loan losses (1) | 21.45 | % | 36.63 | % | 41.39 | % | 116.18 | % |
(1) | Annualized. |
Three Months Ended June 30, | Nine Months Ended June 30, | ||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2012 | 2011 | 2012 | 2011 | ||||||||||||||||
(Dollars in Thousands) | |||||||||||||||||||
Other Income: | |||||||||||||||||||
Service charges and other fees | $ | 218 | $ | 229 | $ | 686 | $ | 700 | |||||||||||
Rental income — other real estate owned | 104 | — | 503 | — | |||||||||||||||
Rental income — other | 59 | 66 | 192 | 196 | |||||||||||||||
Gain on sale of investments, net | 40 | — | 663 | — | |||||||||||||||
(Loss) gain on sale of other real estate owned, net | (49 | ) | 3 | (70 | ) | (4 | ) | ||||||||||||
Earnings on bank-owned life insurance | 134 | 136 | 400 | 413 | |||||||||||||||
Total other income | $ | 506 | $ | 434 | $ | 2,374 | $ | 1,305 |
Three Months Ended June 30, | Nine Months Ended June 30, | ||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2012 | 2011 | 2012 | 2011 | ||||||||||||||||
(Dollars in Thousands) | |||||||||||||||||||
Other Expense: | |||||||||||||||||||
Salaries and employee benefits | $ | 1,689 | $ | 1,633 | $ | 5,001 | $ | 4,790 | |||||||||||
Occupancy expense | 520 | 538 | 1,568 | 1,647 | |||||||||||||||
Federal deposit insurance premium | 204 | 313 | 657 | 1,016 | |||||||||||||||
Advertising | 159 | 160 | 581 | 585 | |||||||||||||||
Data processing | 319 | 279 | 939 | 841 | |||||||||||||||
Professional fees | 279 | 433 | 1,193 | 1,277 | |||||||||||||||
Other real estate owned expense | 550 | 656 | 1,563 | 1,889 | |||||||||||||||
Other operating expenses | 452 | 464 | 1,397 | 1,389 | |||||||||||||||
Total other expenses | $ | 4,172 | $ | 4,476 | $ | 12,889 | $ | 13,434 |
• | statements of goals, intentions and expectations; |
• | statements regarding prospects and business strategy; |
• | statements regarding asset quality and market risk; and |
• | estimates of future costs, benefits and results. |
• | general economic conditions, either nationally or in our market area, that are worse than expected; |
• | changes in the interest rate environment that reduce our interest margins or reduce the fair value of financial instruments; |
• | increased competitive pressures among financial services companies; |
• | changes in consumer spending, borrowing and savings habits; |
• | legislative or regulatory changes that adversely affect our business; |
• | adverse changes in the securities markets; |
• | our ability to successfully manage our growth; |
• | changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Securities and Exchange Commission or the Financial Accounting Standards Board (the “FASB”); and |
• | our ability to successfully implement our branch expansion strategy, enter into new markets and/or expand product offerings successfully and take advantage of growth opportunities. |
Minimum of Offering Range | Midpoint of Offering Range | Maximum of Offering Range | 15% Above Maximum of Offering Range | ||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2,337,500 Shares at $10.00 Per Share | Percent of Net Proceeds | 2,750,000 Shares at $10.00 Per Share | Percent of Net Proceeds | 3,162,500 Shares at $10.00 Per Share | Percent of Net Proceeds | 3,636,875 Shares at $10.00 Per Share | Percent of Net Proceeds | ||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||
Offering proceeds | $ | 23,375 | $ | 27,500 | $ | 31,625 | $ | 36,369 | |||||||||||||||||||||||||||
Less: offering expenses | (2,083 | ) | (2,248 | ) | (2,413 | ) | (2,603 | ) | |||||||||||||||||||||||||||
Net offering proceeds | 21,292 | 100.0 | % | 25,252 | 100.0 | % | 29,212 | 100.0 | % | 33,766 | 100.0 | % | |||||||||||||||||||||||
Less: | |||||||||||||||||||||||||||||||||||
Proceeds contributed to Malvern Federal Savings Bank | 14,904 | 70.0 | % | 17,676 | 70.0 | % | 20,448 | 70.0 | % | 23,636 | 70.0 | % | |||||||||||||||||||||||
Proceeds remaining for Malvern Bancorp—New | $ | 6,388 | 30.0 | % | $ | 7,576 | 30.0 | % | $ | 8,764 | 30.0 | % | $ | 10,130 | 30.0 | % |
• | to invest in securities; |
• | to repurchase shares of its common stock, subject to regulatory restrictions; |
• | to pay dividends or shares of its common stock, subject to regulatory restrictions; and |
• | for general corporate purposes. |
• | to fund new loans; |
• | to invest in short-term investment securities and mortgage-backed securities; and |
• | for general corporate purposes. |
Stock Price Per Share | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Quarter ended: | High | Low | Cash Dividends Per Share | |||||||||||
September 30, 2012 (through August 10, 2012) | $ | 9.70 | $ | 8.01 | $ | — | ||||||||
June 30, 2012 | 9.00 | 7.76 | — | |||||||||||
March 31, 2012 | 8.93 | 5.90 | — | |||||||||||
December 31, 2011 | 6.57 | 5.51 | — | |||||||||||
September 30, 2011 | 7.75 | 6.53 | — | |||||||||||
June 30, 2011 | 8.72 | 6.76 | — | |||||||||||
March 31, 2011 | 8.99 | 7.10 | — | |||||||||||
December 31, 2010 | 7.50 | 5.05 | 0.03 | |||||||||||
September 30, 2010 | 8.65 | 6.66 | 0.03 | |||||||||||
June 30, 2010 | 9.85 | 8.40 | 0.03 | |||||||||||
March 31, 2010 | 9.80 | 9.00 | 0.03 | |||||||||||
December 31, 2009 | 9.70 | 9.05 | 0.03 |
Pro Forma at March 31, 2012 | |||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Minimum of Offering Range | Midpoint of Offering Range | Maximum of Offering Range | 15% Above Maximum of Offering Range | ||||||||||||||||||||||||||||||||||||||||
Malvern Federal Savings Bank Historical at March 31, 2012 | 2,337,500 Shares At $10.00 per Share | 2,750,000 Shares At $10.00 Per Share | 3,162,500 Shares at $10.00 Per Share | 3,636,875 Shares at $10.00 Per Share | |||||||||||||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||||||||||||||||
Amount | Percent of Assets (1) | Amount | Percent of Assets | Amount | Percent of Assets | Amount | Percent of Assets | Amount | Percent of Assets | ||||||||||||||||||||||||||||||||||
(Dollars in Thousands) | |||||||||||||||||||||||||||||||||||||||||||
GAAP capital | $ | 58,131 | 8.94 | % | $ | 73,135 | 11.00 | % | $ | 75,907 | 11.37 | % | $ | 78,679 | 11.73 | % | $ | 81,867 | 12.15 | % | |||||||||||||||||||||||
Tier 1 capital: | |||||||||||||||||||||||||||||||||||||||||||
Actual | $ | 53,442 | 8.27 | % | $ | 68,446 | 10.36 | % | $ | 71,218 | 10.73 | % | $ | 73,990 | 11.10 | % | $ | 77,178 | 11.53 | % | |||||||||||||||||||||||
Requirement | 25,838 | 4.00 | 26,434 | 4.00 | 26,545 | 4.00 | 26,656 | 4.00 | 26,783 | 4.00 | |||||||||||||||||||||||||||||||||
Excess | $ | 27,604 | 4.27 | % | $ | 42,012 | 6.36 | % | $ | 44,673 | 6.73 | % | $ | 47,334 | 7.10 | % | $ | 50,395 | 7.53 | % | |||||||||||||||||||||||
Tier 1 risk-based capital: | |||||||||||||||||||||||||||||||||||||||||||
Actual | $ | 53,442 | 12.45 | % | $ | 68,446 | 15.83 | % | ��$ | 71,218 | 16.47 | % | $ | 73,990 | 17.07 | % | $ | 77,178 | 17.78 | % | |||||||||||||||||||||||
Requirement | 17,174 | 4.00 | 17,293 | 4.00 | 17,315 | 4.00 | 17,337 | 4.00 | 17,363 | 4.00 | |||||||||||||||||||||||||||||||||
Excess | $ | 36,268 | 8.45 | % | $ | 51,153 | 11.83 | % | $ | 53,903 | 12.47 | % | $ | 56,653 | 13.07 | % | $ | 59,815 | 13.78 | % | |||||||||||||||||||||||
Total capital: | |||||||||||||||||||||||||||||||||||||||||||
Actual | $ | 58,842 | 13.71 | % | $ | 73,846 | 17.08 | % | $ | 76,618 | 17.70 | % | $ | 79,390 | 18.32 | % | $ | 82,578 | 19.02 | % | |||||||||||||||||||||||
Requirement | 34,348 | 8.00 | 34,586 | 8.00 | 34,630 | 8.00 | 34,675 | 8.00 | 34,726 | 8.00 | |||||||||||||||||||||||||||||||||
Excess | $ | 24,494 | 5.71 | % | $ | 39,260 | 9.08 | % | $ | 41,988 | 9.70 | % | $ | 44,715 | 10.32 | % | $ | 47,852 | 11.02 | % | |||||||||||||||||||||||
Reconciliation of capital infused into Malvern Federal Savings Bank: | |||||||||||||||||||||||||||||||||||||||||||
Net proceeds infused | $ | 14,904 | $ | 17,676 | $ | 20,448 | $ | 23,636 | |||||||||||||||||||||||||||||||||||
Plus: | |||||||||||||||||||||||||||||||||||||||||||
Net assets received from mutual holding company | 100 | 100 | 100 | 100 | |||||||||||||||||||||||||||||||||||||||
Pro forma increase in GAAP and regulatory capital | $ | 15,004 | $ | 17,776 | $ | 20,548 | $ | 23,736 |
(1) | Adjusted total or adjusted risk-weighted assets, as appropriate. |
Malvern Bancorp—New—Pro Forma Based Upon Sale at $10.00 Per Share | |||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Malvern Federal Bancorp Historical Capitalization | 2,337,500 Shares (Minimum of Offering Range) | 2,750,000 Shares (Midpoint of Offering Range) | 3,162,500 Shares (Maximum of Offering Range) | 3,636,875 Shares(1) (15% above Maximum of Offering Range) | |||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Deposits (2) | $ | 537,029 | $ | 537,029 | $ | 537,029 | $ | 537,029 | $ | 537,029 | |||||||||||||
Borrowings | 48,593 | 48,593 | 48,593 | 48,593 | 48,593 | ||||||||||||||||||
Total deposits and borrowings | $ | 585,622 | $ | 585,622 | $ | 585,622 | $ | 585,622 | $ | 585,622 | |||||||||||||
Shareholders’ equity: | |||||||||||||||||||||||
Preferred stock, $.01 par value, 10,000,000 shares authorized (post-offering); none to be issued | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||
Common stock, $.01 par value, (post-offering) 50,000,000 shares authorized (post-offering); shares to be issued as reflected (3) | 62 | 42 | 50 | 57 | 66 | ||||||||||||||||||
Additional paid-in capital (3) | 25,861 | 47,173 | 51,125 | 55,078 | 59,623 | ||||||||||||||||||
Retained earnings (4) | 38,107 | 38,107 | 38,107 | 38,107 | 38,107 | ||||||||||||||||||
Plus: | |||||||||||||||||||||||
Equity received from mutual holding company | — | 100 | 100 | 100 | 100 | ||||||||||||||||||
Accumulated other comprehensive income | 455 | 455 | 455 | 455 | 455 | ||||||||||||||||||
Less: | |||||||||||||||||||||||
Common stock held by the employee stock ownership plan | (2,105 | ) | (2,105 | ) | (2,105 | ) | (2,105 | ) | (2,105 | ) | |||||||||||||
Treasury stock | (477 | ) | (477 | ) | (477 | ) | (477 | ) | (477 | ) | |||||||||||||
Total shareholders’ equity | $ | 61,903 | $ | 83,295 | $ | 87,255 | $ | 91,215 | $ | 95,769 | |||||||||||||
Ratio of total shareholders’ equity to total assets | 9.50 | % | 12.38 | % | 12.89 | % | 13.40 | % | 13.97 | % |
(1) | As adjusted to give effect to an increase in the number of shares which could occur due to an increase in the offering range of up to 15% to reflect changes in market and financial conditions before we complete the offering. |
(2) | Does not reflect withdrawals from deposit accounts for the purchase of common stock in the offering. Such withdrawals would reduce pro forma deposits by the amount of such withdrawals. |
(3) | Our pro forma amounts of common stock and additional paid-in capital have been increased to reflect the number of shares of our common stock to be outstanding, which includes the exchange of all of the currently outstanding shares of Malvern Federal Bancorp common stock pursuant to the exchange ratio except for the shares earned by Malvern Federal Mutual Holding Company. |
(4) | The retained earnings of Malvern Federal Savings Bank will be partially restricted after the offering. |
�� | We will sell 40% of the shares of common stock in the subscription offering and community offerings with the remaining 60% of the shares sold in a syndicated community offering or underwritten public offering; |
• | Our employee stock ownership plan will not purchase any shares sold in the offering; |
• | 20,000 shares of common stock will be purchased by our employees, directors and their immediate families; |
• | Stifel, Nicolaus & Company, Incorporated will receive an aggregate management fee equal to 1.0% of the aggregate purchase price of the shares sold in the subscription and community offerings, except that no fee will be paid with respect to shares purchased by our officers, directors and employees or members of their immediate families or by our employee stock ownership plan; |
• | The sales commission and management fee for shares sold in the syndicated community offering will be equal to 6.0% of the aggregate purchase price of the shares sold in the syndicated community offering or, in the case of an underwritten public offering, the underwriting discount on the shares sold in the underwritten public offering will be equal to 6.0% of the aggregate purchase price of the shares sold in the underwritten public offering; and |
• | Total expenses of the offering, excluding management fees and sales commissions or underwritten discounts, as the case may be, referenced above, will be approximately $1.2 million. |
• | Pro forma earnings have been calculated assuming the common stock had been sold at the beginning of the periods and the net proceeds had been invested at a yield of 1.04%, which represents the yield on the five-year U.S. Treasury Note as of March 31, 2012. We have used an assumed yield of 1.04% (0.62% after tax) in lieu of the arithmetic average method because we believe it more accurately reflects the yield that we will receive on the net proceeds of the offering. |
• | A combined effective tax rate of 40.0%. |
• | No withdrawals were made from Malvern Federal Savings Bank’s deposit accounts for the purchase of shares in the offering. |
• | Historical and pro forma per share amounts have been calculated by dividing historical and pro forma amounts by the indicated number of shares of stock, as adjusted in the pro forma net income per share to give effect to the purchase of shares by the employee stock ownership plan. |
• | Pro forma stockholders’ equity amounts have been calculated as if our common stock had been sold in the offering on September 30, 2011 and March 31, 2012, respectively, and, accordingly, no effect has been given to the assumed earnings effect of the transactions. |
common stock and may be different than amounts that would be available for distribution to shareholders in the event of liquidation.
At or For the Six Months Ended March 31, 2012 | |||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2,337,500 shares sold at $10.00 per share (Minimum of range) | 2,750,000 shares sold at $10.00 per share (Midpoint of range) | 3,162,500 shares sold at $10.00 per share (Maximum of range) | 3,636,875 shares sold at $10.00 per share (15% above Maximum) | ||||||||||||||||
(Dollars in thousands, except per share amounts) | |||||||||||||||||||
Gross proceeds | $ | 23,375 | $ | 27,500 | $ | 31,625 | $ | 36,369 | |||||||||||
Less: estimated offering expenses | (2,083 | ) | (2,248 | ) | (2,413 | ) | (2,603 | ) | |||||||||||
Estimated net proceeds | 21,292 | 25,252 | 29,212 | 33,766 | |||||||||||||||
Plus: assets received from mutual holding company | 100 | 100 | 100 | 100 | |||||||||||||||
Net proceeds, as adjusted | $ | 21,392 | $ | 25,352 | $ | 29,312 | $ | 33,866 | |||||||||||
Pro Forma Net Income: | |||||||||||||||||||
Pro forma net income: | |||||||||||||||||||
Historical | $ | 1,470 | $ | 1,470 | $ | 1,470 | $ | 1,470 | |||||||||||
Pro forma income on net investable proceeds (1): | 67 | 79 | 92 | 106 | |||||||||||||||
Pro forma net income | $ | 1,537 | $ | 1,549 | $ | 1,562 | $ | 1,576 | |||||||||||
Pro forma net income per share: | |||||||||||||||||||
Historical (2) | $ | 0.36 | $ | 0.31 | $ | 0.27 | $ | 0.23 | |||||||||||
Pro forma income on net investable proceeds: | 0.02 | 0.02 | 0.02 | 0.02 | |||||||||||||||
Pro forma net income per share | $ | 0.38 | $ | 0.33 | $ | 0.29 | $ | 0.25 | |||||||||||
Offering price as a multiple of pro forma net income per share | 13.16 | x | 15.15 | x | 17.24 | x | 20.00 | x | |||||||||||
Number of shares used to calculate pro forma net income per share (3) | 4,082,187 | 4,802,538 | 5,522,890 | 6,351,382 | |||||||||||||||
Pro Forma Shareholders’ Equity: | |||||||||||||||||||
Pro forma shareholders’ equity (book value): | |||||||||||||||||||
Historical | $ | 61,903 | $ | 61,903 | $ | 61,903 | $ | 61,903 | |||||||||||
Estimated net proceeds | 21,292 | 25,252 | 29,212 | 33,766 | |||||||||||||||
Plus: equity increase from mutual holding company | 100 | 100 | 100 | 100 | |||||||||||||||
Pro forma shareholders’ equity | $ | 83,295 | $ | 87,255 | $ | 91,215 | $ | 95,769 | |||||||||||
Pro forma shareholders’ equity per share: | |||||||||||||||||||
Historical | $ | 14.69 | $ | 12.48 | $ | 10.85 | $ | 9.44 | |||||||||||
Estimated net proceeds | 5.05 | 5.09 | 5.12 | 5.15 | |||||||||||||||
Plus: equity increase from mutual holding company | 0.02 | 0.02 | 0.02 | 0.01 | |||||||||||||||
Pro forma shareholders’ equity per share | $ | 19.76 | $ | 17.59 | $ | 15.99 | $ | 14.60 | |||||||||||
Offering price as a percentage of pro forma shareholders’ equity per share | 50.61 | % | 56.85 | % | 62.54 | % | 68.49 | % | |||||||||||
Number of shares used to calculate pro forma shareholders’ equity per share (3) | 4,215,461 | 4,959,366 | 5,703,271 | 6,558,762 |
At or For the Year Ended September 30, 2011 | |||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2,337,500 shares sold at $10.00 per share (Minimum of range) | 2,750,000 shares sold at $10.00 per share (Midpoint of range) | 3,162,500 shares sold at $10.00 per share (Maximum of range) | 3,636,875 shares sold at $10.00 per share (15% above Maximum) | ||||||||||||||||
(Dollars in thousands, except per share amounts) | |||||||||||||||||||
Gross proceeds | $ | 23,375 | $ | 27,500 | $ | 31,625 | $ | 36,369 | |||||||||||
Less: estimated offering expenses | (2,083 | ) | (2,248 | ) | (2,413 | ) | (2,603 | ) | |||||||||||
Estimated net proceeds | 21,292 | 25,252 | 29,212 | 33,766 | |||||||||||||||
Plus: assets received from mutual holding company | 100 | 100 | 100 | 100 | |||||||||||||||
Net proceeds, as adjusted | $ | 21,392 | $ | 25,352 | $ | 29,312 | $ | 33,866 | |||||||||||
Pro Forma Net Income: | |||||||||||||||||||
Pro forma net loss: | |||||||||||||||||||
Historical | $ | (6,112 | ) | $ | (6,112 | ) | $ | (6,112 | ) | $ | (6,112 | ) | |||||||
Pro forma income on net investable proceeds (1): | 133 | 158 | 183 | 211 | |||||||||||||||
Pro forma net loss | $ | (5,979 | ) | $ | (5,954 | ) | $ | (5,929 | ) | $ | (5,901 | ) | |||||||
Pro forma net loss per share: | |||||||||||||||||||
Historical (2) | $ | (1.50 | ) | $ | (1.27 | ) | $ | (1.11 | ) | $ | (0.96 | ) | |||||||
Pro forma income on net investable proceeds: | 0.03 | 0.03 | 0.03 | 0.03 | |||||||||||||||
Pro forma net loss per share | $ | (1.47 | ) | $ | (1.24 | ) | $ | (1.08 | ) | $ | (0.93 | ) | |||||||
Offering price as a multiple of pro forma net loss per share | N/M | N/M | N/M | N/M | |||||||||||||||
Number of shares used to calculate pro forma net loss per share (3) | 4,075,247 | 4,794,374 | 5,513,501 | 6,340,585 | |||||||||||||||
Pro Forma Shareholders’ Equity: | |||||||||||||||||||
Pro forma shareholders’ equity (book value): | |||||||||||||||||||
Historical | $ | 60,284 | $ | 60,284 | $ | 60,284 | $ | 60,284 | |||||||||||
Estimated net proceeds | 21,292 | 25,252 | 29,212 | 33,766 | |||||||||||||||
Plus: equity increase from mutual holding company | 100 | 100 | 100 | 100 | |||||||||||||||
Pro forma shareholders’ equity | $ | 81,676 | $ | 85,636 | $ | 89,596 | $ | 94,150 | |||||||||||
Pro forma shareholders’ equity per share: | |||||||||||||||||||
Historical | $ | 14.30 | $ | 12.16 | $ | 10.57 | $ | 9.19 | |||||||||||
Estimated net proceeds | 5.05 | 5.09 | 5.12 | 5.15 | |||||||||||||||
Plus: equity increase from mutual holding company | 0.02 | 0.02 | 0.02 | 0.01 | |||||||||||||||
Pro forma shareholders’ equity per share | $ | 19.37 | $ | 17.27 | $ | 15.71 | $ | 14.35 | |||||||||||
Offering price as a percentage of pro forma shareholders’ equity per share | 51.63 | % | 57.90 | % | 63.65 | % | 69.69 | % | |||||||||||
Number of shares used to calculate pro forma shareholders’ equity per share (3) | 4,215,461 | 4,959,366 | 5,703,271 | 6,558,762 |
(1) | Pro forma income on net investable proceeds is equal to the net proceeds of the offering plus the assets received from Malvern Federal Mutual Holding Company, multiplied by the after-tax reinvestment rate. The after-tax reinvestment rate is equal to 0.62% based on the following assumptions: combined federal and state income tax rate of 40.0% and a pre-tax reinvestment rate of 1.04%. |
(2) | The historical net income per share has been adjusted to reflect the exchange ratio of the additional shares to be issued by Malvern Bancorp—New in exchange for the currently outstanding shares of Malvern Federal Bancorp common stock. As reported, the net income per share of Malvern Federal Bancorp for the six months ended March 31, 2012 was $0.25, and the net loss per share for the fiscal year ended September 30, 2011 was $1.04. |
(3) | The number of shares used to calculate pro forma net income per share is equal to the weighted average number of shares outstanding during the period adjusted for the exchange ratio. The number of shares used to calculate pro forma stockholders’ equity per share is equal to the total number of shares to be outstanding upon completion of the offering. |
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
• | Improving Asset Quality. We are continuing in our efforts to improve asset quality. At March 31, 2012, our total non-performing assets amounted to $16.5 million, or 2.53% of total assets, reflecting a reduction of $8.7 million, or 34.6%, compared to $25.2 million of total non-performing assets at September 30, 2010 (when total non-performing assets amounted to 3.49% of total assets). The relatively high levels of non-performing assets and other problem assets significantly impacted our results of operations in recent years as the high levels of provisions for loan losses and charge-offs and other expenses related to other real estate owned were the primary reasons that we reported net losses for the fiscal years ended September 30, 2011 and 2010. In our efforts to reduce the levels of our non-performing and other problem assets in recent periods, we have strengthened our loan underwriting policies and procedures and we have enhanced our loan administration and oversight policies and procedures. We have revised both our consumer loan policy and our commercial loan policy to strengthen certain of our minimum loan-to-value ratios, maximum gross debt ratio and minimum debt coverage ratio requirements. We have invested in and implemented a software which facilitates our ability to internally review and grade loans in our portfolio and to monitor loan performance. During the fiscal year ended September 30, 2011, we established a Credit Review Department (which is currently staffed by six persons). The primary focus of the Credit Review Department to date has been the resolution of our non-performing and other problem assets. In addition, as described below, we generally ceased originating new commercial real estate loans and |
construction and development loans during fiscal 2010, due to the increased risk elements inherent in such loans. We remain focused on continuing to reduce our non-performing and problem assets. |
• | Managing Our Loan Portfolio. As part of our efforts to improve asset quality, we have been actively managing our loan portfolio in recent periods. In light of the increase in our non-performing assets and in order to reduce the risk profile of our loan portfolio, we generally ceased originating any new construction and development loans in October 2009, with certain exceptions, and, in August 2010, we generally ceased originating any new commercial real estate loans. In addition, the Supervisory Agreements that we entered into in October 2010 prohibit us from, among other things, originating new commercial real estate loans without the prior written non-objection of the Office of the Comptroller of the Currency, and limit our ability to grow our assets beyond the amount of net interest credited on our deposits in any quarter. These factors contributed to a $122.8 million or 20.6%, reduction in our total loans outstanding at March 31, 2012 compared to September 30, 2009, with the bulk of such reduction centered in construction and development loans, second mortgage loans and commercial real estate loans. At March 31, 2012 compared to September 30, 2009, we have reduced our commercial real estate loans by $20.8 million, or 14.5%, we have reduced our total construction and development loans by $18.3 million, or 44.8%, and we have reduced our second mortgage loans by $41.8 million, or 36.7%. Such reductions reflect lower volumes of loan originations and purchases in these portfolios. |
• | Increasing Capital. In December 2011, based in part upon communications with staff of the Office of the Comptroller of the Currency and upon consideration of the risk elements inherent in our loan portfolio, the Boards of Directors of Malvern Federal Bancorp and Malvern Federal Savings Bank determined that it was prudent to increase the capital of Malvern Federal Savings Bank, although it exceeded the regulatory thresholds necessary to be deemed “well-capitalized.” Initially, Malvern Federal Bancorp made a $3.2 million capital infusion into Malvern Federal Savings Bank in December 2011. While the December capital infusion increased capital at Malvern Federal Savings Bank, it depleted capital at Malvern Federal Bancorp. In January 2012, we adopted the plan of conversion and reorganization as a means to further augment the capital at Malvern Federal Savings Bank and provide for stronger capital at our new holding company, Malvern Bancorp—New. In addition, in January 2012, we decided to establish specific capital ratio targets for Malvern Federal Savings Bank which are higher than the regulatory thresholds necessary to be deemed “well-capitalized.” Our specific capital ratio targets are 8.5% for tier 1 core capital, 10.0% for tier 1 risk-based capital, and 12.0% for total risk-based capital. At March 31, 2012, our tier 1 core capital ratio was 8.27%, our tier 1 risk-based capital ratio was 12.45% and our total risk-based capital ratio was 13.71%. The conversion and offering will result in Malvern Federal Savings Bank exceeding all of the specific capital ratio targets which it has adopted. While Federal regulations require that a minimum of 50% of the net proceeds of the offering be contributed to Malvern Federal Savings Bank, we have determined to contribute 70% of the net offering proceeds. We believe that the maintenance of higher capital levels is appropriate in light of the current banking and economic environments and our risk profile. In addition, the increased capital will facilitate our ability to implement our business strategy. |
• | Seeking Relief from the Supervisory Agreements. We entered into the Supervisory Agreements with the Office of Thrift Supervision in October 2010. Among other things, the Supervisory Agreements restrict our ability to make any new commercial real estate loans, limit our growth and require that we provide the Office of the Comptroller of the Currency with relatively extensive reports and data on our business and operations on a quarterly basis. Given the improvements we have seen in the levels of our non-performing and other problem assets, the enhancements we have made to our loan underwriting policies and procedures as well as our loan administration and oversight policies and procedures, and the increased capital that we will recognize as a result of the conversion and offering, we will seek relief from the Supervisory Agreements upon consummation of the conversion and offering. In the event that the Supervisory Agreements are not fully terminated, we will, at a minimum, seek the ability to resume making commercial real estate loans without the need to obtain specific approval from the Office of the Comptroller of the Currency and we will request that the asset growth limitations be removed. |
• | Growing Our Loan Portfolio and Resuming Commercial Real Estate and Construction and Development Lending. Upon consummation of the conversion and offering, we plan to resume, subject to the receipt of relief from the Supervisory Agreements and any other necessary approvals or non-objections from Federal banking regulators, on a relatively modest basis, the origination of commercial real estate loans and construction and development loans in our market area. Such loans will be underwritten in accordance with our strengthened loan underwriting standards and our enhanced credit review and administration procedures. We continue to believe that we can be a successful niche lender to small and mid-sized commercial borrowers and homebuilders in our market area. Upon receiving regulatory relief from the restrictions of the Supervisory Agreements, we also plan to resume modest growth of our loan portfolio commencing in fiscal 2013. We believe that a resumption of commercial real estate and construction and development lending in a planned, deliberative fashion with the loan underwriting and administration enhancements that we have implemented in recent periods, together with modest loan growth, should increase our interest income and our returns in future periods. However, no assurance can be given whether, or when, we will receive the necessary relief from the Supervisory Agreements and any other approvals or non-objections to engage in such expanded lending activities in the future. |
• | Increasing Market Share Penetration. We operate in a competitive market area for banking products and services. In recent years, we have been working to increase our deposit share in Chester and Delaware Counties, and we increased our marketing and promotional efforts. However, as a result of the shrinkage of our balance sheet and the reduction in total deposits in fiscal 2011, our deposit market share in Chester and Delaware Counties decreased from 5.05% in 2010 to 4.84% in 2011. We are focused on continuing our efforts to increase market share. Subsequent to the conversion and offering, in our effort to increase market share as well as non-interest income, we plan to evaluate increasing our business in non-traditional products, such as insurance products through our existing insurance agency subsidiary, which currently is inactive, or, possibly, through the addition of other products and services, such as wealth management. |
• | Increasing Our Core Deposits. We are attempting to increase our core deposits, which we define as all deposit products other than certificates of deposit. At March 31, 2012, our core deposits amounted to $242.7 million, or 45.2% of total deposits, compared to $239.9 million, or 43.3% of total deposits, at September 30, 2011 and $225.2 million, or 37.7% of total deposits, at September 30, 2010. We have continued our promotional efforts to increase core deposits. We review our deposit products on an on-going basis and we are considering additional deposit products as well as more flexible delivery options, such as mobile banking, as part of our efforts to increase core deposits. We expect to increase our commercial checking accounts when we resume commercial lending and we plan to enhance our cross-marketing as part of our efforts to gain additional deposit relationships with our loan customers. |
• | Continuing to Provide Exceptional Customer Service. As a community oriented savings bank, we take pride in providing exceptional customer service as a means to attract and retain customers. We deliver personalized service to our customers that distinguish us from the large regional banks operating in our market area. Our management team has strong ties to, and deep roots in, the community. We believe that we know our customers’ banking needs and can respond quickly to address them. |
management believes are the most critical to aid in fully understanding and evaluating our reported financial results. These policies require numerous estimates or economic assumptions that may prove inaccurate or may be subject to variations which may affect our reported results and financial condition for the period or in future periods.
• | 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 our own estimates of assumptions that market participants would use in pricing the asset. |
assets if, based on the available evidence, it is more likely than not that some portion or all of the recorded deferred tax assets will not be realized in future periods. These estimates and judgments are inherently subjective. Historically, our estimates and judgments to calculate our deferred tax accounts have not required significant revision to our initial estimates.
our President and Chief Executive Officer, Chief Financial Officer, Chief Lending Officer and five outside directors, and which is responsible for reviewing our asset/liability and investment policies and interest rate risk position. The ALCO Committee meets on a regular basis. The extent of the movement of interest rates is an uncertainty that could have a negative impact on future earnings.
• | we have attempted to match fund a portion of our loan portfolio with borrowings having similar expected lives; |
• | we have attempted, where possible, to extend the maturities of our deposits and borrowings; |
• | we have invested in securities with relatively short anticipated lives, generally one to three years, and we hold significant amounts of liquid assets; and |
• | we have increased our outstanding shorter term loans particularly commercial real estate and construction loans (although we ceased originating any new commercial real estate and construction loans in fiscal 2010). |
6 Months or Less | More than 6 Months to 1 Year | More than 1 Year to 3 Years | More than 3 Year to 5 Years | More than 5 Years | Total Amount | ||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(Dollars in thousands) | |||||||||||||||||||||||||||
Interest-earning assets (1): | |||||||||||||||||||||||||||
Loans receivable (2) | $ | 121,898 | $ | 57,709 | $ | 159,952 | $ | 78,123 | $ | 57,422 | $ | 475,104 | |||||||||||||||
Investment securities and restricted securities | 19,425 | 5,717 | 17,968 | 24,009 | 19,415 | 86,534 | |||||||||||||||||||||
Other interest-earning assets | 49,158 | — | — | — | — | 49,158 | |||||||||||||||||||||
Total interest-earning assets | 190,481 | 63,426 | 177,920 | 102,132 | 76,837 | 610,796 | |||||||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||||||||
Demand and NOW accounts | 95,088 | — | — | — | — | 95,088 | |||||||||||||||||||||
Money market accounts | 79,248 | — | — | — | — | 79,248 | |||||||||||||||||||||
Savings accounts | 46,996 | — | — | — | — | 46,996 | |||||||||||||||||||||
Certificate accounts | 41,953 | 71,108 | 104,766 | 40,125 | 36,332 | 294,284 | |||||||||||||||||||||
FHLB advances | 23,000 | 10,593 | 10,000 | 5,000 | — | 48,593 | |||||||||||||||||||||
Total interest-bearing liabilities | 286,285 | 81,701 | 114,766 | 45,125 | 36,332 | 564,209 | |||||||||||||||||||||
Interest-earning assets less interest-bearing liabilities | $ | (95,804 | ) | $ | (18,275 | ) | $ | 63,154 | $ | 57,007 | $ | 40,505 | $ | 46,587 | |||||||||||||
Cumulative interest-rate sensitivity gap (3) | $ | (95,804 | ) | $ | (114,079 | ) | $ | (50,925 | ) | $ | 6,082 | $ | 46,587 | ||||||||||||||
Cumulative interest-rate gap as a percentage of total assets at March 31, 2012 | (14.70 | )% | (17.51 | )% | (7.82 | )% | 0.93 | % | 7.15 | % | |||||||||||||||||
Cumulative interest-earning assets as a percentage of cumulative interest-bearing liabilities at March 31, 2012 | 66.54 | % | 69.00 | % | 89.45 | % | 101.15 | % | 108.26 | % |
(1) | Interest-earning assets are included in the period in which the balances are expected to be redeployed and/or repriced as a result of anticipated prepayments, scheduled rate adjustments and contractual maturities. |
(2) | For purposes of the gap analysis, loans receivable includes non-performing loans gross of the allowance for loan losses, undisbursed loan funds, unamortized discounts and deferred loan fees. |
(3) | Interest-rate sensitivity gap represents the net cumulative difference between interest-earning assets and interest-bearing liabilities. |
rate scenario, is defined as the NPV in that scenario divided by the market value of assets in the same scenario.
As of March 31, 2012 | As of September 30, 2011 | ||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Changes in Interest Rates (basis points) (1) | Amount | Dollar Change from Base | Percentage Change from Base | Amount | Dollar Change from Base | Percentage Change from Base | |||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||
+300 | $ | 60,027 | $ | (8,704 | ) | (13 | )% | $ | 63,164 | $ | (5,236 | ) | (8 | )% | |||||||||||||
+200 | 67,077 | (1,654 | ) | (2 | ) | 67,755 | (645 | ) | (1 | ) | |||||||||||||||||
+100 | 70,830 | 2,099 | 3 | 69,752 | 1,352 | 2 | |||||||||||||||||||||
0 | 68,731 | — | — | 68,400 | — | — | |||||||||||||||||||||
–100 | 58,582 | (10,149 | ) | (15 | ) | 65,900 | (2,500 | ) | (4 | ) |
(1) | Assumes an instantaneous uniform change in interest rates. A basis point equals 0.01%. |
Changes in Interest Rates in Basis Points (Rate Shock) | Net Interest Income | $ Change | % Change | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(Dollars in thousands) | ||||||||||||||
200 | $ | 19,486 | $ | 1,724 | 9.71 | % | ||||||||
100 | 18,644 | 882 | 4.97 | |||||||||||
Static | 17,762 | (2,158 | ) | (12.15 | ) | |||||||||
(100) | 17,096 | (666 | ) | (3.75 | ) |
of net sales in REO properties, at a net loss of $21,000, and $472,000 in reductions to REO fair values, which are reflected as REO expense during the first six months of fiscal 2012. Our total REO amounted to $4.7 million at March 31, 2012 compared to $8.3 million at September 30, 2011.
Six Months Ended March 31, | |||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2012 | 2011 | ||||||||||||||||||||||||||
Average Outstanding Balance | Interest Earned/Paid | Average Yield/ Rate | Average Outstanding Balance | Interest Earned/Paid | Average Yield/ Rate | ||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||
Interest Earning Assets: | |||||||||||||||||||||||||||
Loans receivable (1) | $ | 488,462 | $ | 12,458 | 5.10 | % | $ | 538,897 | $ | 14,364 | 5.33 | % | |||||||||||||||
Investment securities | 84,846 | 869 | 2.04 | 75,420 | 735 | 1.95 | |||||||||||||||||||||
Deposits in other banks | 46,696 | 18 | 0.08 | 33,276 | 19 | 0.12 | |||||||||||||||||||||
FHLB stock | 5,069 | 1 | 0.04 | 6,232 | — | 0.00 | |||||||||||||||||||||
Total interest-earning assets (1) | 625,073 | 13,346 | 4.32 | 653,825 | 15,118 | 4.62 | |||||||||||||||||||||
Non-interest earning assets | 36,247 | 38,979 | |||||||||||||||||||||||||
Total assets | $ | 661,320 | $ | 692,804 | |||||||||||||||||||||||
Interest Bearing Liabilities: | |||||||||||||||||||||||||||
Demand and NOW accounts | $ | 90,122 | 149 | 0.34 | $ | 89,649 | 298 | 0.66 | |||||||||||||||||||
Money Market accounts | 85,403 | 285 | 0.66 | 86,527 | 480 | 1.11 | |||||||||||||||||||||
Savings accounts | 45,132 | 23 | 0.10 | 41,048 | 38 | 0.19 | |||||||||||||||||||||
Certificate accounts | 304,564 | 3,085 | 2.02 | 336,412 | 3,716 | 2.21 | |||||||||||||||||||||
Total deposits | 525,221 | 3,542 | 1.34 | 553,636 | 4,532 | 1.64 | |||||||||||||||||||||
Borrowed funds | 48,847 | 862 | 3.52 | 50,402 | 879 | 3.49 | |||||||||||||||||||||
Total interest-bearing liabilities | 574,068 | 4,404 | 1.54 | 604,038 | 5,411 | 1.79 | |||||||||||||||||||||
Non-interest bearing liabilities | 25,597 | 23,064 | |||||||||||||||||||||||||
Total liabilities | 599,665 | 627,102 | |||||||||||||||||||||||||
Shareholders’ equity | 61,655 | 65,702 | |||||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 661,320 | $ | 692,804 | |||||||||||||||||||||||
Net interest-earning assets | $ | 51,005 | $ | 49,787 | |||||||||||||||||||||||
Net interest income | $ | 8,942 | $ | 9,707 | |||||||||||||||||||||||
Net interest spread | 2.74 | % | 2.83 | % | |||||||||||||||||||||||
Net interest margin (2) | 2.86 | % | �� | 2.96 | % | ||||||||||||||||||||||
Average interest-earning assets to average interest-bearing liabilities | 108.88 | % | 108.24 | % |
(1) | Includes non-accrual loans during the respective periods. Calculated net of deferred fees and allowance for loan losses. |
(2) | Equals net interest income divided by average interest-earning assets. |
Year Ended September 30, | |||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2011 | 2010 | 2009 | |||||||||||||||||||||||||||||||||||||
Average Outstanding Balance | Interest Earned/ Paid | Average Yield/ Rate | Average Outstanding Balance | Interest Earned/ Paid | Average Yield/ Rate | Average Outstanding Balance | Interest Earned/ Paid | Average Yield/ Rate | |||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||
Interest Earning Assets: | |||||||||||||||||||||||||||||||||||||||
Loans receivable (1) | $ | 530,497 | $ | 28,185 | 5.31 | % | $ | 583,995 | $ | 32,085 | 5.49 | % | $ | 597,744 | $ | 33,711 | 5.64 | % | |||||||||||||||||||||
Investment securities | 78,147 | 1,510 | 1.93 | 33,812 | 1,025 | 3.03 | 27,993 | 925 | 3.30 | ||||||||||||||||||||||||||||||
Deposits in other banks | 32,024 | 31 | 0.10 | 31,218 | 38 | 0.12 | 20,018 | 65 | 0.32 | ||||||||||||||||||||||||||||||
FHLB stock | 5,905 | — | 0.00 | 6,567 | — | 0.00 | 6,513 | — | 0.00 | ||||||||||||||||||||||||||||||
Total interest-earning assets (1) | 646,573 | 29,726 | 4.60 | 655,592 | 33,148 | 5.06 | 652,268 | 34,701 | 5.32 | ||||||||||||||||||||||||||||||
Non-interest earning assets | 34,654 | 35,379 | 27,690 | ||||||||||||||||||||||||||||||||||||
Total assets | $ | 681,227 | $ | 690,971 | $ | 679,958 | |||||||||||||||||||||||||||||||||
Interest Bearing Liabilities: | |||||||||||||||||||||||||||||||||||||||
Demand and NOW accounts | $ | 90,674 | 519 | 0.57 | $ | 87,240 | 845 | 0.97 | $ | 76,407 | 1,321 | 1.73 | |||||||||||||||||||||||||||
Money Market accounts | 87,329 | 915 | 1.05 | 63,788 | 648 | 1.02 | 58,167 | 960 | 1.65 | ||||||||||||||||||||||||||||||
Savings accounts | 44,237 | 78 | 0.18 | 41,002 | 110 | 0.27 | 38,661 | 136 | 0.35 | ||||||||||||||||||||||||||||||
Certificate accounts | 321,918 | 6,941 | 2.16 | 324,973 | 8,511 | 2.62 | 306,213 | 11,061 | 3.61 | ||||||||||||||||||||||||||||||
Total deposits | 544,158 | 8,453 | 1.55 | 517,003 | 10,114 | 1.96 | 479,448 | 13,478 | 2.81 | ||||||||||||||||||||||||||||||
Borrowed funds | 49,874 | 1,745 | 3.50 | 80,714 | 3,527 | 4.37 | 105,873 | 5,203 | 4.92 | ||||||||||||||||||||||||||||||
Total interest-bearing liabilities | 594,032 | 10,198 | 1.72 | 597,717 | 13,641 | 2.28 | 585,321 | 18,681 | 3.19 | ||||||||||||||||||||||||||||||
Non-interest bearing liabilities | 23,764 | 24,126 | 25,443 | ||||||||||||||||||||||||||||||||||||
Total liabilities | 617,796 | 621,843 | 610,764 | ||||||||||||||||||||||||||||||||||||
Shareholders’ equity | 63,431 | 69,128 | 69,194 | ||||||||||||||||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 681,227 | $ | 690,971 | $ | 679,958 | |||||||||||||||||||||||||||||||||
Net Interest-earning assets | $ | 52,541 | $ | 57,875 | $ | 66,947 | |||||||||||||||||||||||||||||||||
Net interest income | $ | 19,528 | $ | 19,507 | $ | 16,020 | |||||||||||||||||||||||||||||||||
Net interest spread | 2.88 | % | 2.78 | % | 2.13 | % | |||||||||||||||||||||||||||||||||
Net interest margin | 3.02 | % | 2.98 | % | 2.46 | % | |||||||||||||||||||||||||||||||||
Average interest-earning assets to average interest-bearing liabilities | 108.84 | % | 109.68 | % | 111.44 | % |
(1) | Includes non-accrual loans during the respective periods. Calculated net of deferred loan fees and allowance for loan losses. |
Year Ended September 30, | |||||||||||||||||||||||||||||||||||||||
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Six Months Ended March 31, 2012 vs. 2011 | 2011 vs. 2010 | 2010 vs. 2009 | |||||||||||||||||||||||||||||||||||||
Volume | Rate | Net Change | Volume | Rate | Net Change | Volume | Rate | Net Change | |||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||
Interest Earning Assets: | |||||||||||||||||||||||||||||||||||||||
Loans receivable | $ | (2,689 | ) | $ | 783 | $ | (1,906 | ) | $ | (2,937 | ) | $ | (963 | ) | $ | (3,900 | ) | $ | (775 | ) | $ | (851 | ) | $ | (1,626 | ) | |||||||||||||
Investment securities | 184 | (50 | ) | 134 | 1,343 | (858 | ) | 485 | 192 | (92 | ) | 100 | |||||||||||||||||||||||||||
Deposits in other banks | 15 | (16 | ) | (1 | ) | 1 | (8 | ) | (7 | ) | 36 | (63 | ) | (27 | ) | ||||||||||||||||||||||||
FHLB stock | — | 1 | 1 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Total interest-earning assets | $ | (2,490 | ) | $ | 718 | $ | (1,772 | ) | $ | (1,593 | ) | $ | (1,829 | ) | $ | (3,422 | ) | $ | (547 | ) | $ | (1,006 | ) | $ | (1,553 | ) | |||||||||||||
Interest Bearing Liabilities | |||||||||||||||||||||||||||||||||||||||
Demand and NOW accounts | $ | 3 | $ | (152 | ) | $ | (149 | ) | $ | 33 | $ | (359 | ) | $ | (326 | ) | $ | 187 | $ | (663 | ) | $ | (476 | ) | |||||||||||||||
Money market accounts | (12 | ) | (183 | ) | (195 | ) | 240 | 27 | 267 | 93 | (405 | ) | (312 | ) | |||||||||||||||||||||||||
Savings accounts | 8 | (23 | ) | (15 | ) | 9 | (41 | ) | (32 | ) | 8 | (34 | ) | (26 | ) | ||||||||||||||||||||||||
Certificate accounts | (704 | ) | 73 | (631 | ) | (80 | ) | (1,490 | ) | (1,570 | ) | 678 | (3,228 | ) | (2,550 | ) | |||||||||||||||||||||||
Total deposits | (705 | ) | (285 | ) | (990 | ) | 202 | (1,863 | ) | (1,661 | ) | 966 | (4,330 | ) | (3,364 | ) | |||||||||||||||||||||||
Borrowed funds | (54 | ) | 37 | (17 | ) | (1,348 | ) | (434 | ) | (1,782 | ) | (1,236 | ) | (440 | ) | (1,676 | ) | ||||||||||||||||||||||
Total interest-bearing liabilities | $ | (759 | ) | $ | (248 | ) | $ | (1,007 | ) | $ | (1,146 | ) | $ | (2,297 | ) | $ | (3,443 | ) | $ | (270 | ) | $ | (4,770 | ) | $ | (5,040 | ) | ||||||||||||
Net interest income | $ | (1,731 | ) | $ | 966 | $ | (765 | ) | $ | (447 | ) | $ | 468 | $ | 21 | $ | (276 | ) | $ | 3,763 | $ | 3,487 |
first six months of fiscal 2011. The primary reason for the decrease in the first six months of fiscal 2012 was a four basis point decrease in the average yield earned on deposits in other banks.
interest in a construction and development loan on a retirement community located in Montgomery County, Pennsylvania.
• | A $428,000 partial charge-off on a commercial real estate loan to one borrower secured by a first mortgage on a 420 unit self-storage facility on approximately four acres located in Delaware County, Pennsylvania, reducing the carrying value of this loan at March 31, 2012 to $2.3 million based on a November 2011 appraisal. As of March 31, 2012, we had allocated $392,000 of our allowance for loan losses to this loan, which was a performing troubled debt restructuring (“TDR”) at such date. |
• | A $412,000 partial charge-off on a $2.4 million participation interest in a non-performing construction and development loan for the development of commercial and mixed use facilities on approximately 40 acres located in Mount Laurel, New Jersey, reducing our loan carrying value to $1.6 million at March 31, 2012 based on a October 2011 appraisal. During the December 31, 2011 quarter, we entered into a forbearance agreement with the borrower and other participants, which is expected to result in the disposition of such loan during the December 31, 2012 quarter at no additional loss. |
• | In February 2012, we recorded a $353,000 partial charge-off on the short-sale of the office building securing a $1.2 million commercial real estate loan to one borrower located in Philadelphia, Pennsylvania. |
in fiscal 2011 reflected management’s assessment, based on the information available at the time, of the inherent level of estimable losses in our loan portfolio.
demand and NOW accounts. Our expense on borrowings amounted to $3.5 million in fiscal 2010 compared to $5.2 million in fiscal 2009, a decrease of $1.7 million or 32.2%. The average balance of our borrowings decreased by $25.2 million in fiscal 2010 compared to fiscal 2009, and the average cost of borrowed funds decreased by 55 basis points to 4.37% during the year ended September 30, 2010.
At March 31, 2012—Payments Due by Period | |||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Less than One Year | One to Three Years | Three to Five Years | More than Five Years | Total | |||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Long-term debt obligations | $ | — | $ | 593 | $ | — | $ | 48,000 | $ | 48,593 | |||||||||||||
Certificates of deposit | 113,060 | 104,767 | 40,125 | 36,332 | 294,284 | ||||||||||||||||||
Operating lease obligations | 279 | 558 | 410 | 4,714 | 5,961 | ||||||||||||||||||
Total contractual obligations | $ | 113,339 | $ | 105,918 | $ | 40,535 | $ | 89,046 | $ | 348,838 |
At September 30, 2011—Payments Due by Period | |||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Less than One Year | One to Three Years | Three to Five Years | More than Five Years | Total | |||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Long-term debt obligations | $ | — | $ | 1,098 | $ | — | $ | 48,000 | $ | 49,098 | |||||||||||||
Certificates of deposit | 97,525 | 133,678 | 39,947 | 43,368 | 314,518 | ||||||||||||||||||
Operating lease obligations | 279 | 558 | 451 | 4,763 | 6,051 | ||||||||||||||||||
Total contractual obligations | $ | 97,804 | $ | 135,334 | $ | 40,398 | $ | 96,131 | $ | 369,667 |
March 31, 2012 | September 30, 2011 | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
(Dollars in thousands) | |||||||||||
Commitments to extend credit: (1) | |||||||||||
Future loan commitments | $ | 15,705 | $ | 7,309 | |||||||
Undisbursed construction loans | 5,066 | 7,698 | |||||||||
Undisbursed home equity lines of credit | 23,881 | 23,656 | |||||||||
Undisbursed commercial lines of credit | 5,158 | 4,910 | |||||||||
Overdraft protection lines | 845 | 823 | |||||||||
Standby letters of credit | 3,766 | 3,998 | |||||||||
Total commitments | $ | 54,421 | $ | 48,394 |
(1) | Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments may require payment of a fee and generally have fixed expiration dates or other termination clauses. |
January 1, 2013. As the provisions of ASU No. 2011-11 only impact the disclosure requirements related to the offsetting of assets and liabilities, the adoption will have no impact on our consolidated financial statements.
shorter anticipated lives compared to single-family residential mortgage loans. However, commercial real estate loans, construction and development loans and home equity loans and lines of credit are all deemed to have a higher risk of default than single-family residential mortgage loans. At March 31, 2012, our commercial real estate loans amounted to $122.1 million, or 25.8% of our total loans, our total home equity loans and lines of credit amounted to $92.9 million, or 19.7% of our loan portfolio and our total construction and development loans amounted to $22.5 million, or 4.7% of our total loan portfolio.
• | prohibit us from making or acquiring any new commercial real estate loans and/or commercial and industrial loans without the prior written non-objection of the Office of the Comptroller of the Currency (as successor to the Office of Thrift Supervision); |
• | required us to develop a plan to reduce our problem assets; |
• | required us to develop enhanced policies and procedures for identifying, monitoring and controlling the risks associated with concentrations of commercial real estate loans; |
• | required that an independent third party undertake reviews of our commercial real estate loans, construction and development loans, multi-family residential mortgage loans and commercial loans not less than once every six months; and |
• | prohibit Malvern Federal Bancorp from declaring or paying dividends or making any other capital distributions, such as repurchases of common stock, without the prior written approval of the Board of Governors of the Federal Reserve System (as successor to the Office of Thrift Supervision). |
in Pennsylvania, experienced marginal population growth of 1.3% from 2000 to 2010 and its population is expected to decline slightly over the next five years.
March 31, | September 30, | ||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2012 | 2011 | 2010 | 2009 | 2008 | 2007 | ||||||||||||||||||||||||||||||||||||||||||||||
Amount | Percent | Amount | Percent | Amount | Percent | Amount | Percent | Amount | Percent | Amount | Percent | ||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||
Residential mortgage(1) | $ | 220,211 | 46.6 | % | $ | 229,330 | 44.7 | % | $ | 230,966 | 41.8 | % | $ | 252,308 | 42.4 | % | $ | 248,118 | 43.3 | % | $ | 193,460 | 40.4 | % | |||||||||||||||||||||||||||
Construction and Development: | |||||||||||||||||||||||||||||||||||||||||||||||||||
Residential and commercial | 21,846 | 4.6 | 26,005 | 5.0 | 30,429 | 5.5 | 37,508 | 6.3 | 45,451 | 7.9 | 58,870 | 12.4 | |||||||||||||||||||||||||||||||||||||||
Land loans | 632 | 0.1 | 2,722 | 0.6 | 2,989 | 0.6 | 3,237 | 0.6 | 4,530 | 0.8 | 6,665 | 1.4 | |||||||||||||||||||||||||||||||||||||||
Total construction and development loans | 22,478 | 4.7 | 28,727 | 5.6 | 33,418 | 6.1 | 40,745 | 6.9 | 49,981 | 8.7 | 65,535 | 13.8 | |||||||||||||||||||||||||||||||||||||||
Commercial: | |||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial real estate | 122,096 | 25.8 | 131,225 | 25.5 | 143,095 | 25.9 | 142,863 | 24.0 | 138,522 | 24.2 | 108,500 | 22.7 | |||||||||||||||||||||||||||||||||||||||
Multi-family | 5,370 | 1.2 | 5,507 | 1.1 | 6,493 | 1.2 | 9,613 | 1.6 | 1,906 | 0.3 | 2,257 | 0.5 | |||||||||||||||||||||||||||||||||||||||
Other | 8,735 | 1.8 | 10,992 | 2.1 | 11,398 | 2.1 | 15,647 | 2.6 | 17,260 | 3.0 | 15,767 | 3.3 | |||||||||||||||||||||||||||||||||||||||
Total commercial loans | 136,201 | 28.8 | 147,724 | 28.7 | 160,986 | 29.2 | 168,123 | 28.2 | 157,688 | 27.5 | 126,524 | 26.5 | |||||||||||||||||||||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||||||||||||||||||||||||||
Home equity lines of credit | 20,667 | 4.4 | 20,735 | 4.0 | 19,927 | 3.6 | 19,149 | 3.2 | 12,393 | 2.2 | 11,811 | 2.5 | |||||||||||||||||||||||||||||||||||||||
Second mortgages | 72,188 | 15.3 | 85,881 | 16.8 | 105,825 | 19.1 | 113,943 | 19.1 | 103,741 | 18.1 | 78,733 | 16.5 | |||||||||||||||||||||||||||||||||||||||
Other | 821 | 0.2 | 788 | 0.2 | 1,086 | 0.2 | 1,143 | 0.2 | 1,304 | 0.2 | 1,525 | 0.3 | |||||||||||||||||||||||||||||||||||||||
Total consumer loans | 93,676 | 19.9 | 107,404 | 21.0 | 126,838 | 22.9 | 134,235 | 22.5 | 117,438 | 20.5 | 92,069 | 19.3 | |||||||||||||||||||||||||||||||||||||||
Total loans | 472,566 | 100.0 | % | 513,185 | 100.0 | % | 552,208 | 100.0 | % | 595,411 | 100.0 | % | 573,225 | 100.0 | % | 477,588 | 100.0 | % | |||||||||||||||||||||||||||||||||
Deferred loan costs, net | 2,538 | 2,935 | 3,272 | 3,872 | 3,816 | 2,404 | |||||||||||||||||||||||||||||||||||||||||||||
Allowance for loan losses | (8,076 | ) | (10,101 | ) | (8,157 | ) | (5,718 | ) | (5,505 | ) | (4,541 | ) | |||||||||||||||||||||||||||||||||||||||
Loans receivable, net | $ | 467,028 | $ | 506,019 | $ | 547,323 | $ | 593,565 | $ | 571,536 | $ | 475,451 |
(1) | Includes $9.3 million of loans held for sale at September 30, 2007. |
March 31, | September 30, | ||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2012 | 2011 | 2010 | 2009 | 2008 | 2007 | ||||||||||||||||||||||||||||||||||||||||||||||
Amount | Percent | Amount | Percent | Amount | Percent | Amount | Percent | Amount | Percent | Amount | Percent | ||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||
Fixed-Rate Loans: | |||||||||||||||||||||||||||||||||||||||||||||||||||
Residential mortgage (1) | $ | 202,441 | 42.8 | % | $ | 211,405 | 41.2 | % | $ | 201,285 | 36.4 | % | $ | 227,712 | 38.2 | % | $ | 218,214 | 38.1 | % | $ | 163,463 | 34.2 | % | |||||||||||||||||||||||||||
Construction and Development: | |||||||||||||||||||||||||||||||||||||||||||||||||||
Residential and commercial | 3,292 | 0.7 | 4,250 | 0.8 | 968 | 0.2 | 5,382 | 0.9 | 4,505 | 0.8 | 8,626 | 1.8 | |||||||||||||||||||||||||||||||||||||||
Land loans | — | — | 1,376 | 0.3 | 1,312 | 0.3 | 1,558 | 0.3 | 1,575 | 0.2 | 1,591 | 0.3 | |||||||||||||||||||||||||||||||||||||||
Total fixed-rate construction and development loans | 3,292 | 0.7 | 5,626 | 1.1 | 2,280 | 0.5 | 6,940 | 1.2 | 6,080 | 1.0 | 10,217 | 2.1 | |||||||||||||||||||||||||||||||||||||||
Commercial: | |||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial real estate | 43,089 | 9.1 | 40,231 | 7.8 | 40,833 | 7.4 | 56,126 | 9.4 | 52,406 | 9.1 | 35,053 | 7.4 | |||||||||||||||||||||||||||||||||||||||
Multi-family | �� | 1,688 | 0.4 | 932 | 0.2 | 950 | 0.2 | 3,519 | 0.6 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Other | 483 | 0.1 | 1,643 | 0.3 | 1,733 | 0.3 | 3,798 | 0.6 | 4,441 | 0.8 | 3,847 | 0.8 | |||||||||||||||||||||||||||||||||||||||
Total fixed-rate commercial loans | 45,260 | 9.6 | 42,806 | 8.3 | 43,516 | 7.9 | 63,443 | 10.6 | 56,847 | 9.9 | 38,900 | 8.2 | |||||||||||||||||||||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||||||||||||||||||||||||||
Home equity lines of credit | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Second mortgages | 72,188 | 15.3 | 85,881 | 16.8 | 105,825 | 19.1 | 113,943 | 19.1 | 103,741 | 18.1 | 78,706 | 16.5 | |||||||||||||||||||||||||||||||||||||||
Other | 531 | 0.1 | 552 | 0.1 | 822 | 0.1 | 867 | 0.2 | 960 | 0.2 | 1,097 | 0.2 | |||||||||||||||||||||||||||||||||||||||
Total fixed-rate consumer loans | 72,719 | 15.4 | 86,433 | 16.9 | 106,647 | 19.2 | 114,810 | 19.3 | 104,701 | 18.3 | 79,803 | 16.7 | |||||||||||||||||||||||||||||||||||||||
Total fixed-rate loans | $ | 323,712 | 68.5 | $ | 346,270 | 67.5 | $ | 353,728 | 64.0 | $ | 412,905 | 69.3 | $ | 385,842 | 67.3 | $ | 292,383 | 61.2 | |||||||||||||||||||||||||||||||||
Adjustable-Rate Loans: | |||||||||||||||||||||||||||||||||||||||||||||||||||
Residential mortgage | $ | 17,770 | 3.8 | % | $ | 17,925 | 3.5 | % | $ | 29,681 | 5.4 | % | $ | 24,596 | 4.1 | % | $ | 29,904 | 5.2 | % | $ | 29,998 | 6.3 | % | |||||||||||||||||||||||||||
Construction and Development: | |||||||||||||||||||||||||||||||||||||||||||||||||||
Residential and commercial | 18,554 | 3.9 | 21,755 | 4.2 | 29,461 | 5.3 | 32,126 | 5.4 | 40,946 | 7.1 | 50,244 | 10.5 | |||||||||||||||||||||||||||||||||||||||
Land loans | 632 | 0.1 | 1,346 | 0.3 | 1,677 | 0.3 | 1,679 | 0.3 | 2,955 | 0.5 | 5,074 | 1.1 | |||||||||||||||||||||||||||||||||||||||
Total adjustable-rate construction and development loans | 19,186 | 4.0 | 23,101 | 4.5 | 31,138 | 5.6 | 33,805 | 5.7 | 43,901 | 7.6 | 55,318 | 11.6 | |||||||||||||||||||||||||||||||||||||||
Commercial: | |||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial real estate | 79,007 | 16.7 | 90,994 | 17.7 | 102,262 | 18.5 | 86,737 | 14.6 | 86,116 | 15.0 | 73,448 | 15.4 | |||||||||||||||||||||||||||||||||||||||
Multi-family | 3,682 | 0.8 | 4,575 | 0.9 | 5,543 | 1.0 | 6,094 | 1.0 | 1,906 | 0.4 | 2,257 | 0.5 | |||||||||||||||||||||||||||||||||||||||
Other | 8,252 | 1.7 | 9,349 | 1.8 | 9,665 | 1.8 | 11,849 | 2.0 | 12,819 | 2.2 | 11,920 | 2.5 | |||||||||||||||||||||||||||||||||||||||
Total adjustable-rate commercial loans | 90,941 | 19.2 | 104,918 | 20.4 | 117,470 | 21.3 | 104,680 | 17.6 | 100,841 | 17.6 | 87,625 | 18.4 | |||||||||||||||||||||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||||||||||||||||||||||||||
Home equity lines of credit | 20,667 | 4.4 | 20,735 | 4.0 | 19,927 | 3.6 | 19,149 | 3.2 | 12,393 | 2.2 | 11,811 | 2.4 | |||||||||||||||||||||||||||||||||||||||
Second mortgages | — | — | — | — | — | — | — | — | — | — | 26 | — | |||||||||||||||||||||||||||||||||||||||
Other | 290 | 0.1 | 236 | 0.1 | 264 | 0.1 | 276 | 0.1 | 344 | 0.1 | 427 | 0.1 | |||||||||||||||||||||||||||||||||||||||
Total adjustable-rate consumer loans | 20,957 | 4.5 | 20,971 | 4.1 | 20,191 | 3.7 | 19,425 | 3.3 | 12,737 | 2.3 | 12,264 | 2.5 | |||||||||||||||||||||||||||||||||||||||
Total adjustable-rate loans | $ | 148,854 | 31.5 | % | $ | 166,915 | 32.5 | % | $ | 198,480 | 36.0 | % | $ | 182,506 | 30.7 | % | $ | 187,383 | 32.7 | % | $ | 185,205 | 38.8 | % | |||||||||||||||||||||||||||
Total loans (1) | $ | 472,566 | 100.0 | % | $ | 513,185 | 100.0 | % | $ | 552,208 | 100.0 | % | $ | 595,411 | 100.0 | % | $ | 573,225 | 100.0 | % | $ | 477,588 | 100.0 | % |
(1) | Includes $9.3 million of fixed-rate, single-family residential loans held for sale at September 30, 2007. |
Construction and Development | Commercial | Consumer | |||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Residential Mortgage | Residential and Commercial | Land Loans | Commercial Real Estate | Multi-family | Other | Home Equity Lines of Credit | Second Mortgages | Other | Total | ||||||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||
Amounts due in: | |||||||||||||||||||||||||||||||||||||||||||
One year or less | $ | 684 | $ | 12,403 | $ | 632 | $ | 7,668 | $ | 131 | $ | 468 | $ | 300 | $ | 117 | $ | 26 | $ | 22,429 | |||||||||||||||||||||||
After one year through two years | 682 | — | — | 3,276 | — | 970 | — | 250 | 123 | 5,301 | |||||||||||||||||||||||||||||||||
After two years through three years | 523 | — | — | 9,424 | — | 657 | — | 482 | 171 | 11,257 | |||||||||||||||||||||||||||||||||
After three years through five years | 4,713 | 3,618 | — | 23,177 | 1,005 | 960 | 60 | 1,539 | 127 | 35,199 | |||||||||||||||||||||||||||||||||
After five years through ten years | 31,444 | 4,964 | — | 64,128 | 3,672 | 2,499 | — | 13,389 | — | 120,096 | |||||||||||||||||||||||||||||||||
After ten years through fifteen years | 34,205 | — | — | 7,487 | — | 1,344 | 5,186 | 23,297 | 5 | 71,524 | |||||||||||||||||||||||||||||||||
Beyond fifteen years | 147,960 | 861 | — | 6,936 | 562 | 1,837 | 15,121 | 33,114 | 369 | 206,760 | |||||||||||||||||||||||||||||||||
Total | $ | 220,211 | $ | 21,846 | $ | 632 | $ | 122,096 | $ | 5,370 | $ | 8,735 | $ | 20,667 | $ | 72,188 | $ | 821 | $ | 472,566 | |||||||||||||||||||||||
Interest rate terms on amounts due after one year: | |||||||||||||||||||||||||||||||||||||||||||
Fixed rate | $ | 202,302 | $ | 3,292 | $ | — | $ | 40,861 | $ | 1,688 | $ | — | $ | — | $ | 72,071 | $ | 509 | $ | 320,723 | |||||||||||||||||||||||
Adjustable rate | 17,225 | 6,151 | — | 73,567 | 3,551 | 8,267 | 20,367 | — | 286 | 129,414 | |||||||||||||||||||||||||||||||||
Total | $ | 219,527 | $ | 9,443 | $ | — | $ | 114,428 | $ | 5,239 | $ | 8,267 | $ | 20,367 | $ | 72,071 | $ | 795 | $ | 450,137 |
purchased. We actively monitor the performance of such loans through the receipt of regular reports from the lead lender regarding the loan’s performance, physically inspecting the loan security property on a periodic basis, discussing the loan with the lead lender on a regular basis and receiving copies of updated financial statements from the borrower. At March 31, 2012, the largest loan participation interests from other institutions were comprised of seven loans to four borrowers and their affiliates, which had an aggregate outstanding balance of approximately $9.9 million. Of those seven loans, three construction and development loans to two borrowers and their affiliates, which had an aggregate outstanding balance on our books of $3.2 million at March 31, 2012, were impaired and on non-accrual status at such date. See “Asset Quality—Non-Performing Loans and Real Estate Owned.”
Six Months Ended March 31, | Year Ended September 30, | ||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2012 | 2011 | 2011 | 2010 | 2009 | |||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Total gross loans at beginning of period | $ | 513,185 | $ | 552,208 | $ | 552,208 | $ | 595,411 | $ | 573,225 | |||||||||||||
Originations by type: | |||||||||||||||||||||||
Residential mortgage | 17,870 | 24,804 | 35,378 | 26,422 | 37,842 | ||||||||||||||||||
Construction and Development(1): | |||||||||||||||||||||||
Residential and commercial | 3,363 | 1,899 | 3,890 | 7,250 | 16,015 | ||||||||||||||||||
Land loans | — | 23 | 36 | 40 | 318 | ||||||||||||||||||
Commercial: | |||||||||||||||||||||||
Commercial real estate | 645 | 2,560 | 3,146 | 28,354 | 32,494 | ||||||||||||||||||
Multi-family | 161 | 270 | 494 | 45 | 10,431 | ||||||||||||||||||
Other | 912 | 2,562 | 3,426 | 3,836 | 5,105 | ||||||||||||||||||
Consumer: | |||||||||||||||||||||||
Home equity lines of credit (1) | 5,319 | 5,656 | 11,289 | 10,965 | 19,309 | ||||||||||||||||||
Second mortgages | 573 | 4,924 | 6,719 | 6,952 | 6,103 | ||||||||||||||||||
Other | 431 | 355 | 608 | 1,139 | 884 | ||||||||||||||||||
Total originations | 29,274 | 43,053 | 64,986 | 85,003 | 128,501 | ||||||||||||||||||
Principal Repayments: | |||||||||||||||||||||||
Residential mortgage | 26,194 | 35,682 | 54,691 | 53,338 | 59,838 | ||||||||||||||||||
Construction and Development: | |||||||||||||||||||||||
Residential and commercial | 7,521 | 4,281 | 7,750 | 13,244 | 23,763 | ||||||||||||||||||
Land loans | 1,927 | 16 | 235 | 287 | 1,612 | ||||||||||||||||||
Commercial: | |||||||||||||||||||||||
Commercial real estate | 9,535 | 1,723 | 7,387 | 25,519 | 24,167 | ||||||||||||||||||
Multi-family | 297 | 296 | 1,335 | 3,095 | 2,727 | ||||||||||||||||||
Other | 3,169 | 1,932 | 3,542 | 8,063 | 6,696 | ||||||||||||||||||
Consumer: | |||||||||||||||||||||||
Home equity lines of credit | 5,452 | 5,157 | 10,034 | 10,313 | 12,595 | ||||||||||||||||||
Second mortgages | 16,289 | 17,041 | 28,848 | 25,935 | 27,250 | ||||||||||||||||||
Other | 398 | 571 | 882 | 1,196 | 1,044 | ||||||||||||||||||
Total principal repayments | 70,782 | 66,699 | 114,704 | 140,990 | 159,692 | ||||||||||||||||||
Net loan originations and principal repayments | (41,508 | ) | (23,646 | ) | (49,718 | ) | (55,987 | ) | (31,191 | ) | |||||||||||||
Purchases: | |||||||||||||||||||||||
Residential mortgage(2) | 11,238 | 6,533 | 27,683 | 10,130 | 28,293 | ||||||||||||||||||
Construction and Development: | |||||||||||||||||||||||
Residential and commercial | — | 125 | 125 | — | — | ||||||||||||||||||
Consumer: | |||||||||||||||||||||||
Home equity lines of credit | 66 | — | — | 131 | 58 | ||||||||||||||||||
Second mortgages | 2,028 | 3,138 | 4,560 | 11,098 | 31,964 | ||||||||||||||||||
Total purchases | 13,332 | 9,796 | 32,368 | 21,359 | 60,315 | ||||||||||||||||||
Residential mortgage loans securitization and sale | (10,671 | ) | — | — | — | — | |||||||||||||||||
Other adjustments, net(3) | (1,772 | ) | (11,947 | ) | (21,673 | ) | (8,575 | ) | (6,938 | ) | |||||||||||||
Net increase (decrease) | (40,619 | ) | (25,797 | ) | (39,023 | ) | (43,203 | ) | 22,186 | ||||||||||||||
Total gross loans at end of period | $ | 472,566 | $ | 526,411 | $ | 513,185 | $ | 552,208 | $ | 595,411 |
(1) | Origination amounts for construction and development loans and line of credit loans reflect disbursements of loan proceeds during the period although loans may have been originated in a prior period. |
(2) | Includes purchases of loans from our network of loan brokers. |
(3) | Reflects non-cash items related to transfers of loans to other real estate owned, recoveries and charge-offs. |
loans at March 31, 2012 compared to $28.7 million or 5.6% of total loans at September 30, 2011 and $33.4 million or 6.1% of total loans as of September 30, 2010. As previously indicated, our strategic plan includes the resumption of construction and development lending after completion of the conversion and offering and subject to the receipt of any necessary approvals or non-objections from the Office of the Comptroller of the Currency. Any such renewed construction and development lending is expected to be within our market area to homebuilders and developers with whom we are familiar and will be made in accordance with our strengthened loan underwriting policies and enhanced credit administration and review procedures.
single-family residential mortgage loans. Commercial real estate loans are much more likely to have adjustable interest rates than single-family residential mortgage loans, which adds to the interest rate sensitivity of commercial real estate loans and makes them attractive. At March 31, 2012, approximately 64.7% of our commercial real estate loans had adjustable interest rates compared to 8.1% of our single-family residential mortgage loans with adjustable rates at such date.
our management team in order to propose modifications as a result of market conditions, regulatory changes and other factors. All loan modifications must be approved by our board of directors.
At March 31, 2012 Loans Delinquent For: | |||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
31-89 Days | 90 Days and Over | Total Delinquent Loans | |||||||||||||||||||||||||||||||||||||
Number | Amount | Percent of Total Delinquent Loans 31-89 Days | Number | Amount | Percent of Total Delinquent Loans 90 Days and Over | Number | Amount | Percent of Total Delinquent Loans Greater Than 30 Days | |||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||
Residential mortgage | 8 | $ | 984 | 34.0 | % | 17 | $ | 4,425 | 37.7 | % | 25 | $ | 5,409 | 37.0 | % | ||||||||||||||||||||||||
Construction and Development: | |||||||||||||||||||||||||||||||||||||||
Residential and commercial | — | — | — | 3 | 3,210 | 27.4 | 3 | 3,210 | 22.0 | ||||||||||||||||||||||||||||||
Commercial: | �� | ||||||||||||||||||||||||||||||||||||||
Commercial real estate | 1 | 436 | 15.1 | 3 | 2,822 | 24.0 | 4 | 3,258 | 22.3 | ||||||||||||||||||||||||||||||
Multi-family | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Other | — | — | — | 1 | 201 | 1.7 | 1 | 201 | 1.3 | ||||||||||||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||||||||||||||
Home equity lines of credit | — | — | — | 2 | 43 | 0.4 | 2 | 43 | 0.3 | ||||||||||||||||||||||||||||||
Second mortgages | 25 | 1,471 | 50.9 | 15 | 1,029 | 8.8 | 40 | 2,500 | 17.1 | ||||||||||||||||||||||||||||||
Other | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Total | 34 | $ | 2,891 | 100.00 | % | 41 | $ | 11,730 | 100.0 | % | 75 | $ | 14,621 | 100.0 | % |
At September 30, 2011 Loans Delinquent For: | |||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
31-89 Days | 90 Days and Over | Total Delinquent Loans | |||||||||||||||||||||||||||||||||||||
Number | Amount | Percent of Total Delinquent Loans 31-89 Days | Number | Amount | Percent of Total Delinquent Loans 90 Days and Over | Number | Amount | Percent of Total Delinquent Loans Greater Than 30 Days | |||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||
Residential mortgage | 6 | $ | 759 | 28.0 | % | 13 | $ | 2,866 | 22.2 | % | 19 | $ | 3,625 | 23.2 | % | ||||||||||||||||||||||||
Construction and Development: | |||||||||||||||||||||||||||||||||||||||
Residential and commercial | — | — | — | 7 | 6,617 | 51.2 | 7 | 6,617 | 42.4 | ||||||||||||||||||||||||||||||
Commercial: | |||||||||||||||||||||||||||||||||||||||
Commercial real estate | 1 | 195 | 7.2 | 3 | 1,765 | 13.7 | 4 | 1,960 | 12.5 | ||||||||||||||||||||||||||||||
Other | 1 | 22 | 0.8 | 2 | 229 | 1.8 | 3 | 251 | 1.6 | ||||||||||||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||||||||||||||
Home equity lines of credit | 1 | 16 | 0.6 | 2 | 61 | 0.5 | 3 | 77 | 0.5 | ||||||||||||||||||||||||||||||
Second mortgages | 24 | 1,701 | 62.8 | 17 | 1,377 | 10.6 | 41 | 3,078 | 19.7 | ||||||||||||||||||||||||||||||
Other | 2 | 16 | 0.6 | — | — | — | 2 | 16 | 0.1 | ||||||||||||||||||||||||||||||
Total | 35 | $ | 2,709 | 100.0 | % | 44 | $ | 12,915 | 100.0 | % | 79 | $ | 15,624 | 100.0 | % |
March 31, | Year Ended September 30, | ||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2012 | 2011 | 2010 | 2009 | 2008 | 2007 | ||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||
Non-accruing loans: | |||||||||||||||||||||||||||
Residential mortgage | $ | 4,425 | $ | 2,866 | $ | 8,354 | $ | 3,809 | $ | 1,402 | $ | 461 | |||||||||||||||
Construction and Development: | |||||||||||||||||||||||||||
Residential and commercial | 3,210 | 6,617 | 1,393 | 7,086 | 1,695 | — | |||||||||||||||||||||
Commercial: | |||||||||||||||||||||||||||
Commercial real estate | 2,822 | 1,765 | 4,476 | 785 | 4,050 | 661 | |||||||||||||||||||||
Multi-family | — | — | 1,093 | — | — | — | |||||||||||||||||||||
Other | 201 | 229 | — | 35 | 561 | 780 | |||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||
Home equity lines of credit | 43 | 61 | 457 | 407 | 205 | 14 | |||||||||||||||||||||
Second mortgages | 1,029 | 1,377 | 4,085 | 2,072 | 672 | 351 | |||||||||||||||||||||
Other | — | — | 3 | 1 | — | — | |||||||||||||||||||||
Total non-accruing loans | 11,730 | 12,915 | 19,861 | 14,195 | 8,585 | 2,267 | |||||||||||||||||||||
Accruing loans delinquent more than 90 days past due | — | — | — | — | — | — | |||||||||||||||||||||
Real estate owned and other foreclosed assets: | |||||||||||||||||||||||||||
Residential mortgage | 1,374 | 3,872 | 1,538 | 1,568 | 230 | 227 | |||||||||||||||||||||
Construction and Development: | |||||||||||||||||||||||||||
Residential and commercial | — | — | 1,085 | 196 | — | — | |||||||||||||||||||||
Land | 164 | ||||||||||||||||||||||||||
Commercial: | |||||||||||||||||||||||||||
Commercial real estate | 3,171 | 4,415 | 2,602 | 4,006 | — | — | |||||||||||||||||||||
Multi-family | — | — | 70 | — | — | — | |||||||||||||||||||||
Other | 34 | 34 | 20 | 20 | — | — | |||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||
Second mortgages | — | — | — | 85 | — | — | |||||||||||||||||||||
Total | 4,743 | 8,321 | 5,315 | 5,875 | 230 | 227 | |||||||||||||||||||||
Total non-performing assets | $ | 16,473 | $ | 21,236 | $ | 25,176 | $ | 20,070 | $ | 8,815 | $ | 2,494 | |||||||||||||||
Performing troubled debt-restructurings: | |||||||||||||||||||||||||||
Residential mortgage | 876 | 1,049 | 2,277 | — | — | — | |||||||||||||||||||||
Construction and Development: | |||||||||||||||||||||||||||
Land loans | 1,154 | 1,160 | 1,170 | — | — | — | |||||||||||||||||||||
Commercial: | |||||||||||||||||||||||||||
Commercial real estate | 6,100 | 7,919 | 7,742 | 25 | 103 | 121 | |||||||||||||||||||||
Multi-family | — | — | 612 | — | — | — | |||||||||||||||||||||
Other | 175 | 175 | 175 | — | — | — | |||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||
Home equity lines of credit | — | 37 | — | — | — | — | |||||||||||||||||||||
Total performing troubled debt restructurings | 8,305 | 10,340 | 11,976 | 25 | 103 | 121 | |||||||||||||||||||||
Total non-performing assets and performing troubled debt restructurings | $ | 24,778 | $ | 31,576 | $ | 37,152 | $ | 20,095 | $ | 8,918 | $ | 2,615 | |||||||||||||||
Ratios: | |||||||||||||||||||||||||||
Total non-accrual loans as a percent of gross loans | 2.48 | % | 2.52 | % | 3.60 | % | 2.38 | % | 1.52 | % | 0.51 | % | |||||||||||||||
Total non-performing assets as a percent of total asset | 2.53 | % | 3.19 | % | 3.49 | % | 2.90 | % | 1.38 | % | 0.45 | % | |||||||||||||||
Total non-performing assets and performing troubled debt restructurings as a percent of total assets | 3.80 | % | 4.74 | % | 5.16 | % | 2.91 | % | 1.39 | % | 0.47 | % |
• | A $3.0 million participation interest in two construction and development loans for an aggregate of $34.3 million for the construction of 64 units of a proposed 198 unit age-restricted condominium community located in Delaware County, Pennsylvania. Since these loans were originated in December 2007, a total of 64 units have been built of which 44 have been sold, with 20 units being marketed for sale. These loans were placed on non-accrual status in June 2011. During the fiscal year ended September 30, 2011, we recorded a partial charge-off in the amount of $800,000 based on an updated June 2011 appraisal, and we received principal repayments in the amount of $606,000, reducing our carrying value to $1.6 million at March 31, 2012. The borrower recently pledged additional real estate collateral as part of a loan modification plan which was signed by all parties during the December 2011 quarter. Based on the terms of the agreement, these loans have been classified as TDRs, although they remained on non-accruing and non-performing status as of March 31, 2012. While these loans were performing in accordance with the terms and conditions of the restructuring agreement at March 31, 2012, they will continue to be deemed as non-accruing TDRs until sufficient criteria is met to change the status of the loan. While sales of units in this development currently are ahead of schedule, the loan documents, as modified, call for sales of the remaining 20 units over the next 28 months. |
• | A $2.4 million participation interest in a $14.3 million construction and development loan for the development of commercial and mixed use facilities on approximately 40 acres located in Mount Laurel, New Jersey. This loan was placed on non-accrual status in June 2011 and was 367 days past due at March 31, 2012. We recorded a partial charge-off in the amount of $400,000 based on an updated appraisal during fiscal 2011. During the first six months of fiscal 2012, we recorded an additional partial charge-off in the amount of $412,000 reducing our loan carrying value to $1.6 million. During the December 31, 2011 quarter, we entered into a forbearance agreement with the borrower and other participants, which is expected to result in the disposition of such loan during 2012 at no additional loss to us. |
• | A $1.3 million commercial real estate loan on a mixed use (office/warehouse) property located in Chester County, Pennsylvania, which was placed on non-accrual status in February 2011. Pursuant to the terms of a repayment plan and forbearance agreement entered into in June 2011, the borrower is making additional payments which we anticipate will be sufficient to result in this loan becoming current during fiscal 2012. |
• | A $1.3 million commercial real estate loan collateralized by first mortgages on two commercial mixed-use (retail space and apartments) located in Pottstown, Pennsylvania. As a result of reduced cash flows on the properties due to vacancies, the Bank agreed to restructure the loans in December 2010 to |
require payments of interest only until January 2012, when payments of principal and interest were to resume. The borrower has not resumed payments on the principal, as agreed, and the loan has been transferred to REO at no additional loss. |
• | Nine separate properties located in the greater Philadelphia market area which were acquired as REO in July 2011 and which previously secured three separate commercial real estate loans to one borrower with an aggregate carrying value of $3.4 million at the time of foreclosure (which was net of $658,000 in charge-offs to the allowance for loan losses taken on the loans prior to foreclosure). The properties consist of various types and usages and include an industrial building in Philadelphia used to process and fabricate marble and granite, three mixed-use (retail space and apartments) buildings in Philadelphia, one building with six retail units in Philadelphia and one mixed-use (eight apartment units and one office) building in Norristown, Pennsylvania. We recorded an aggregate of $420,000 in write-downs on these properties during fiscal 2011. In addition, we had $207,000 in additional write-downs during the first six months of fiscal 2012 that were recorded as other real estate owned expense. The aggregate carrying value of the remaining six properties was $2.3 million at March 31, 2012. We are marketing these properties for sale and, during the first six months of fiscal 2012, we have sold and settled on three of such properties at no additional loss and with an aggregate sales price of $504,000. We currently have entered into agreements of sale with respect to two of the properties for an aggregate of $605,000. |
• | Ten separate single-family residential rental properties with an aggregate carrying value of $1.5 million which previously secured loans to one borrower and which were acquired as real estate owned in September 2011. During the March 31, 2012 quarter, as a result of the receipt of updated appraisals received in January and February 2011, we had $103,000 in additional write-downs that were recorded as other real estate owned expense. These properties had an aggregate carrying value in the amount of $1.4 million at March 31, 2012. Five of these properties are located in Chester County, Pennsylvania, three properties are located in Claymont, Delaware, one is located in Wilmington, Delaware, and one property is located in Morgantown, Pennsylvania. Subsequent to March 31, 2012, four of these properties with an aggregate carrying value of $346,000, were sold at an aggregate net loss of $59,000. |
• | Two parcels of mixed-use real estate located in Franklin County, Pennsylvania and woodworking equipment on site were acquired as real estate owned in September 2011 and had a carrying value $563,000 at March 31, 2012. We have entered into an agreement of sale of this property, with settlement scheduled in second half of fiscal 2012 at no additional loss. |
• | A total of five loans to one borrower with an aggregate outstanding balance of $786,000 at March 31, 2012 collateralized by single-family residential rental properties located primarily in Chester and Delaware Counties which were restructured during the quarter ended September 30, 2010 to require payments of interest only for six months as well as a modification to the interest rate. All of these loans have remained current under their restructured terms. During the first six months of fiscal 2012, all of these loans resumed normal amortization of principal and interest payments under their original terms and interest rates. |
• | Four loans to one borrower with an aggregate outstanding balance of $2.9 million at March 31, 2012 collateralized by first mortgages on commercial real estate and approved lots. Two of these loans, with an aggregate outstanding balance of $1.9 million, are secured by owner occupied commercial real estate located in Montgomery County, Pennsylvania and the other two loans, with an aggregate outstanding balance of $1.0 million, are secured by 23 acres of approved lots located in Chester County, Pennsylvania. The four loans were restructured during the quarter ended March 31, 2010 to require payments of interest only for six months and they have been performing in accordance with their terms since they were restructured. |
• | One loan with an outstanding balance in the amount of $1.4 million at March 31, 2012 secured by a first lien on a commercial real estate mixed use (warehouse and office space) property located in Delaware County, Pennsylvania. As a result of slow sales, the borrower was experiencing financial difficulties and in April 2011 the Bank restructured the loan from its original terms to require payments of interest only until October 2011. The borrower has been paying as agreed under the terms of the restructuring and began making principal and interest payments in October 2011 as agreed. The borrower is expected to continue to pay as agreed. |
• | One commercial real estate loan to one borrower with a carrying value in the amount of $2.3 million at March 31, 2012 secured by a first mortgage on a 420 unit self-storage facility on approximately four acres located in Delaware County, Pennsylvania. This loan was restructured in March 2011 to require payments of interest only, at a reduced rate, for six months. A November 2011 appraisal indicated that the outstanding loan balance exceeded the value of the collateral property securing this loan. We have allocated $392,000 of our allowance for loan losses to this loan at March 31, 2012. Since the project was completed in April 2010, a total of 277 units have been rented, with 143 units being marketed for rent. The borrower has been paying as agreed under the terms of the restructuring. The restructured terms required the borrower to resume payments of principal and interest starting in April 2012, and the borrower has resumed payments of principal and interest in accordance with the terms of the restructuring. |
2012 compared to $10.4 million and $6.9 million, respectively, during the fiscal years ended September 30, 2011 and 2010.
Six Months Ended March 31, | Year Ended September 30, | ||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2012 | 2011 | 2011 | 2010 | 2009 | 2008 | 2007 | |||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||
Balance at beginning of period | $ | 10,101 | $ | 8,157 | $ | 8,157 | $ | 5,718 | $ | 5,505 | $ | 4,541 | $ | 3,393 | |||||||||||||||||
Provision for loan losses | 25 | 10,042 | 12,392 | 9,367 | 2,280 | 1,609 | 1,298 | ||||||||||||||||||||||||
Charge-offs: | |||||||||||||||||||||||||||||||
Residential mortgage | 975 | 2,271 | 2,478 | 824 | 124 | 144 | — | ||||||||||||||||||||||||
Construction and Development: | |||||||||||||||||||||||||||||||
Residential and commercial | 412 | 107 | 1,307 | 4,133 | — | — | — | ||||||||||||||||||||||||
Commercial: | |||||||||||||||||||||||||||||||
Commercial real estate | 855 | 2,214 | 2,460 | 927 | 1,760 | �� | 90 | — | |||||||||||||||||||||||
Multi-family | — | 164 | 164 | 525 | — | — | — | ||||||||||||||||||||||||
Other | 88 | — | 278 | — | — | 4 | — | ||||||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||||||
Home equity lines of credit | 51 | 126 | 166 | 168 | — | — | — | ||||||||||||||||||||||||
Second mortgages | 865 | 2,980 | 3,691 | 334 | 153 | 393 | 135 | ||||||||||||||||||||||||
Other | 22 | 2 | 6 | 22 | 60 | 19 | 25 | ||||||||||||||||||||||||
Total charge-offs | 3,268 | 7,864 | 10,550 | 6,933 | 2,097 | 650 | 160 | ||||||||||||||||||||||||
Recoveries: | |||||||||||||||||||||||||||||||
Residential mortgage | — | — | 1 | — | — | — | — | ||||||||||||||||||||||||
Construction and Development: | |||||||||||||||||||||||||||||||
Residential and commercial | 1,139 | — | — | — | 25 | — | — | ||||||||||||||||||||||||
Commercial: | |||||||||||||||||||||||||||||||
Commercial real estate | — | 1 | 1 | — | — | — | — | ||||||||||||||||||||||||
Multi-family | — | 1 | 1 | 1 | — | — | — | ||||||||||||||||||||||||
Other | 2 | 1 | 5 | — | — | — | — | ||||||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||||||
Home equity lines of credit | — | 3 | 3 | — | — | — | — | ||||||||||||||||||||||||
Second mortgages | 75 | 20 | 82 | — | — | 2 | 3 | ||||||||||||||||||||||||
Other | 2 | 5 | 9 | 4 | 5 | 3 | 7 | ||||||||||||||||||||||||
Total recoveries | 1,218 | 31 | 102 | 5 | 30 | 5 | 10 | ||||||||||||||||||||||||
Net charge-offs | 2,050 | 7,833 | 10,448 | 6,928 | 2,067 | 645 | 150 | ||||||||||||||||||||||||
Balance at end of period | $ | 8,076 | $ | 10,366 | $ | 10,101 | $ | 8,157 | $ | 5,718 | $ | 5,505 | $ | 4,541 | |||||||||||||||||
Ratios: | |||||||||||||||||||||||||||||||
Ratio of allowance for loan losses to non-accrual loans | 68.85 | % | 64.50 | % | 78.21 | % | 41.07 | % | 40.28 | % | 64.12 | % | 200.31 | % | |||||||||||||||||
Ratio of net charge-offs to average loans outstanding (1) | 0.84 | % | 2.91 | % | 1.97 | % | 1.19 | % | 0.35 | % | 0.12 | % | 0.03 | % | |||||||||||||||||
Ratio of net charge-offs to total allowance for loan losses (1) | 50.78 | % | 151.12 | % | 103.43 | % | 84.93 | % | 36.15 | % | 11.72 | % | 3.30 | % |
(1) | Annualized. |
March 31, 2012 | September 30, 2011 | ||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Amount | Percent of Allowance to Total Allowance | Percent of Loans in Each Category to Total Loans | Amount | Percent of Allowance to Total Allowance | Percent of Loans in Each Category to Total Loans | ||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||
Residential mortgage | $ | 1,310 | 16.2 | % | 46.6 | % | $ | 1,458 | 14.4 | % | 44.7 | % | |||||||||||||||
Construction and Development: | |||||||||||||||||||||||||||
Residential and commercial | 819 | 10.1 | 4.6 | 1,627 | 16.1 | 5.0 | |||||||||||||||||||||
Land loans | 11 | 0.1 | 0.1 | 49 | 0.5 | 0.5 | |||||||||||||||||||||
Commercial: | |||||||||||||||||||||||||||
Commercial real estate | 3,809 | 47.2 | 25.8 | 4,176 | 41.4 | 25.7 | |||||||||||||||||||||
Multi-family | 37 | 0.5 | 1.1 | 49 | 0.5 | 1.1 | |||||||||||||||||||||
Other | 218 | 2.7 | 1.9 | 317 | 3.1 | 2.1 | |||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||
Home equity lines of credit | 177 | 2.2 | 4.4 | 220 | 2.2 | 4.0 | |||||||||||||||||||||
Second mortgages | 1,569 | 19.4 | 15.3 | 2,154 | 21.3 | 16.7 | |||||||||||||||||||||
Other | 17 | 0.2 | 0.2 | 16 | 0.2 | 0.2 | |||||||||||||||||||||
Total allocated | 7,967 | 98.6 | 100.0 | 10,066 | 99.7 | 100.0 | |||||||||||||||||||||
Unallocated | 109 | 1.4 | — | 35 | 0.3 | — | |||||||||||||||||||||
Balance at end of period | $ | 8,076 | 100.0 | % | 100.0 | % | $ | 10,101 | 100.0 | % | 100.0 | % |
September 30, | |||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2010 | 2009 | ||||||||||||||||||||||||||
Amount | Percent of Allowance to Total Allowance | Percent of Loans in Each Category to Total Loans | Amount | Percent of Allowance to Total Allowance | Percent of Loans in Each Category to Total Loans | ||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||
Residential mortgage | $ | 1,555 | 19.1 | % | 41.8 | % | $ | 1,307 | 22.9 | % | 42.4 | % | |||||||||||||||
Construction and Development: | |||||||||||||||||||||||||||
Residential and commercial | 689 | 8.4 | 5.5 | 1,558 | 27.3 | 6.3 | |||||||||||||||||||||
Land loans | 63 | 0.8 | 0.6 | 57 | 1.0 | 0.6 | |||||||||||||||||||||
Commercial: | |||||||||||||||||||||||||||
Commercial real estate | 2,741 | 33.6 | 25.9 | 1,244 | 21.8 | 24.0 | |||||||||||||||||||||
Multi-family | 191 | 2.3 | 1.2 | 48 | 0.8 | 1.6 | |||||||||||||||||||||
Other | 303 | 3.7 | 2.1 | 298 | 5.2 | 2.6 | |||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||
Home equity lines of credit | 284 | 3.4 | 3.6 | 284 | 4.9 | 3.2 | |||||||||||||||||||||
Second mortgages | 2,264 | 27.8 | 19.1 | 889 | 15.6 | 19.1 | |||||||||||||||||||||
Other | 22 | 0.3 | 0.2 | 25 | 0.4 | 0.2 | |||||||||||||||||||||
Total allocated | 8,112 | 99.4 | 100.0 | 5,710 | 99.9 | 100.0 | |||||||||||||||||||||
Unallocated | 45 | 0.6 | — | 8 | 0.1 | — | |||||||||||||||||||||
Balance at end of period | $ | 8,157 | 100.0 | % | 100.0 | % | $ | 5,718 | 100.0 | % | 100.0 | % |
September 30, | |||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2008 | 2007 | ||||||||||||||||||||||||||
Amount | Percent of Allowance to Total Allowance | Percent of Loans in Each Category to Total Loans | Amount | Percent of Allowance to Total Allowance | Percent of Loans in Each Category to Total Loans | ||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||
Residential mortgage | $ | 827 | 15.0 | % | 43.3 | % | $ | 552 | 12.2 | % | 40.4 | % | |||||||||||||||
Construction and Development: | |||||||||||||||||||||||||||
Residential and commercial | 873 | 15.9 | 7.9 | 673 | 14.8 | 12.4 | |||||||||||||||||||||
Land loans | 79 | 1.4 | 0.8 | 117 | 2.6 | 1.4 | |||||||||||||||||||||
Commercial: | |||||||||||||||||||||||||||
Commercial real estate | 2,032 | 36.9 | 24.2 | 1,809 | 39.8 | 22.7 | |||||||||||||||||||||
Multi-family | 10 | 0.2 | 0.3 | 11 | 0.2 | 0.5 | |||||||||||||||||||||
Other | 335 | 6.1 | 3.0 | 386 | 8.5 | 3.3 | |||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||
Home equity lines of credit | 122 | 2.2 | 2.2 | 91 | 2.0 | 2.5 | |||||||||||||||||||||
Second mortgages | 1,131 | 20.6 | 18.1 | 734 | 16.2 | 16.5 | |||||||||||||||||||||
Other | 26 | 0.5 | 0.2 | 30 | 0.7 | 0.3 | |||||||||||||||||||||
Total allocated | 5,435 | 98.8 | 100.0 | 4,403 | 97.0 | 100.0 | |||||||||||||||||||||
Unallocated | 70 | 1.2 | — | 138 | 3.0 | — | |||||||||||||||||||||
Balance at end of period | $ | 5,505 | 100.0 | % | 100.0 | % | $ | 4,541 | 100.0 | % | 100.0 | % |
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. For equity securities, the full amount of the other-than-temporary impairment is recognized in earnings. Held to maturity securities are accounted for based upon the historical cost of the security. Available for sale securities can be sold at any time based upon needs or market conditions. Available for sale securities are accounted for at fair value, with unrealized gains and losses on these securities, net of income tax, reflected in shareholders’ equity as accumulated other comprehensive income. At March 31, 2012, we had $81.7 million of securities classified as available for sale, $696,000 of securities classified as held to maturity and no securities classified as trading account.
One year or less | More than One Year through Five Years | More than Five Years through Ten Years | More than Ten Years | Total | |||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Amortized Cost | Weighted Average Yield | Amortized Cost | Weighted Average Yield | Amortized Cost | Weighted Average Yield | Amortized Cost | Weighted Average Yield | Amortized Cost | Fair Value | Weighted Average Yield | |||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
Available for Sale Securities: | |||||||||||||||||||||||||||||||||||||||||||||||
U.S. government agencies and obligations (1) | $ | 17,432 | 1.50 | % | $ | 7,141 | 1.55 | % | $ | 4,492 | 2.10 | % | $ | 500 | 3.05 | % | $ | 29,565 | $ | 29,681 | 1.63 | % | |||||||||||||||||||||||||
State and municipal obligations | — | — | 806 | 2.39 | 853 | 1.86 | 965 | 2.30 | 2,624 | 2,606 | 2.18 | ||||||||||||||||||||||||||||||||||||
Mortgage-backed securities | 2,028 | 2.06 | 41,852 | 2.07 | 1,583 | 2.36 | 858 | 3.28 | 46,321 | 47,124 | 2.11 | ||||||||||||||||||||||||||||||||||||
Single issuer trust preferred security | 1,000 | 1.17 | — | — | — | — | — | — | 1,000 | 758 | 1.17 | ||||||||||||||||||||||||||||||||||||
Corporate debt securities | 250 | 2.12 | 1,252 | 1.72 | — | — | — | — | 1,502 | 1,532 | 1.79 | ||||||||||||||||||||||||||||||||||||
Total AFS | 20,710 | 1.54 | 51,051 | 2.00 | 6,928 | 2.13 | 2,323 | 2.83 | 81,012 | 81,701 | 1.92 | ||||||||||||||||||||||||||||||||||||
Held to Maturity Securities: | |||||||||||||||||||||||||||||||||||||||||||||||
Mortgage-backed securities | — | — | 195 | 2.19 | 79 | 4.81 | 422 | 5.36 | 696 | 746 | 4.41 | ||||||||||||||||||||||||||||||||||||
Total HTM | — | — | 195 | 2.19 | 79 | 4.81 | 422 | 5.36 | 696 | 746 | 4.41 | ||||||||||||||||||||||||||||||||||||
Total debt securities | $ | 20,710 | 1.54 | % | $ | 51,246 | 2.00 | % | $ | 7,007 | 2.16 | % | $ | 2,745 | 3.23 | % | $ | 81,708 | $ | 82,447 | 1.94 | % |
(1) | Includes FHLB notes. |
At March 31, | At September 30, | ||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2012 | 2011 | 2010 | 2009 | ||||||||||||||||||||||||||||||||
Amortized Cost | Fair Value | Amortized Cost | Fair Value | Amortized Cost | Fair Value | Amortized Cost | Fair Value | ||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||
Securities available for sale: | |||||||||||||||||||||||||||||||||||
U.S. government obligations | $ | 4,999 | $ | 5,005 | $ | 4,998 | $ | 5,010 | $ | 4,997 | $ | 4,997 | $ | 999 | $ | 1,011 | |||||||||||||||||||
U.S. government agencies (1) | 24,566 | 24,676 | 28,372 | 28,442 | 15,705 | 15,754 | 8,946 | 9,042 | |||||||||||||||||||||||||||
State and municipal obligations | 2,624 | 2,606 | 952 | 963 | 1,199 | 1,207 | 1,768 | 1,759 | |||||||||||||||||||||||||||
Corporate debt securities | 1,000 | 758 | 2,185 | 2,214 | 1,451 | 1,475 | 1,288 | 1,326 | |||||||||||||||||||||||||||
Single issuer trust preferred security | 1,502 | 1,532 | 1,000 | 790 | 1,000 | 759 | 1,000 | 638 | |||||||||||||||||||||||||||
Mortgage-backed securities: | |||||||||||||||||||||||||||||||||||
Federal National Mortgage Association | 2,103 | 2,225 | 3,397 | 3,589 | 4,808 | 5,027 | 7,072 | 7,268 | |||||||||||||||||||||||||||
Federal Home Loan Mortgage Corporation | 556 | 579 | 968 | 1,016 | 1,324 | 1,385 | 1,774 | 1,830 | |||||||||||||||||||||||||||
Government National Mortgage Association | 140 | 143 | 147 | 151 | 165 | 169 | 203 | 206 | |||||||||||||||||||||||||||
Collateralized mortgage obligations | 43,522 | 44,177 | 31,838 | 32,214 | 9,798 | 9,946 | 4,015 | 4,018 | |||||||||||||||||||||||||||
Total available for sale | 81,012 | 81,701 | 73,857 | 74,389 | 40,447 | 40,719 | 27,065 | 27,098 | |||||||||||||||||||||||||||
Securities held to maturity: | |||||||||||||||||||||||||||||||||||
Mortgage-backed securities: | |||||||||||||||||||||||||||||||||||
Government National Mortgage Association | 215 | 222 | 232 | 241 | 266 | 275 | 300 | 307 | |||||||||||||||||||||||||||
Federal National Mortgage Association | 481 | 524 | 3,565 | 3,783 | 4,450 | 4,650 | 4,542 | 4,635 | |||||||||||||||||||||||||||
Total held to maturity | 696 | 746 | 3,797 | 4,024 | 4,716 | 4,925 | 4,842 | 4,942 | |||||||||||||||||||||||||||
Total investment securities | $ | 81,708 | $ | 82,447 | $ | 77,654 | $ | 78,413 | $ | 45,163 | $ | 45,644 | $ | 31,907 | $ | 32,040 |
(1) | Includes FHLB notes. |
At March 31, | At September 30, | ||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2012 | 2011 | 2010 | 2009 | ||||||||||||||||||||||||||||||||
Amount | Percent of Total Deposits | Amount | Percent of Total Deposits | Amount | Percent of Total Deposits | Amount | Percent of Total Deposits | ||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||
Deposit Types: | |||||||||||||||||||||||||||||||||||
Savings | $ | 46,996 | 8.7 | % | $ | 45,067 | 8.1 | % | $ | 42,385 | 7.1 | % | $ | 39,554 | 7.7 | % | |||||||||||||||||||
Money market | 79,248 | 14.8 | 86,315 | 15.6 | 80,980 | 13.5 | 58,401 | 11.3 | |||||||||||||||||||||||||||
Interest bearing demand | 95,088 | 17.7 | 88,722 | 16.0 | 83,365 | 14.0 | 95,720 | 18.5 | |||||||||||||||||||||||||||
Non-interest bearing demand | 21,413 | 4.0 | 19,833 | 3.6 | 18,503 | 3.1 | 19,314 | 3.7 | |||||||||||||||||||||||||||
Total core deposits | 242,745 | 45.2 | 239,937 | 43.3 | 225,233 | 37.7 | 212,989 | 41.2 | |||||||||||||||||||||||||||
Time deposits with original maturities of: | |||||||||||||||||||||||||||||||||||
Three months or less | 837 | 0.2 | 834 | 0.1 | 884 | 0.2 | 893 | 0.2 | |||||||||||||||||||||||||||
Over three months to six months | 6,953 | 1.3 | 7,513 | 1.4 | 10,585 | 1.8 | 16,294 | 3.2 | |||||||||||||||||||||||||||
Over six months to twelve months | 5,472 | 1.0 | 8,688 | 1.6 | 29,917 | 5.0 | 45,607 | 8.8 | |||||||||||||||||||||||||||
Over twelve months | 281,022 | 52.3 | 297,483 | 53.6 | 330,239 | 55.3 | 240,728 | 46.6 | |||||||||||||||||||||||||||
Total time deposits | 294,284 | 54.8 | 314,518 | 56.7 | 371,625 | 62.3 | 303,522 | 58.8 | |||||||||||||||||||||||||||
Total deposits | $ | 537,029 | 100.0 | % | $ | 554,455 | 100.0 | % | $ | 596,858 | 100.0 | % | $ | 516,511 | 100.0 | % |
Maturity Period | At March 31, 2012 | At September 30, 2011 | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
(In thousands) | |||||||||||
Three months or less | $ | 7,619 | $ | 14,685 | |||||||
Over three months through six months | 11,088 | 8,920 | |||||||||
Over six months through 12 months | 7,884 | 16,230 | |||||||||
Over twelve months | 108,646 | 101,065 | |||||||||
Total | $ | 135,237 | $ | 140,900 |
Period to Maturity from March 31, 2012 | ||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
At September 30, | ||||||||||||||||||||||||||||||||
One Year or Less | More than One Year to Two Years | More than Two Years to Three Years | More than Three Years | At March 31, 2012 | 2011 | 2010 | ||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||||
Interest Rate Range: | ||||||||||||||||||||||||||||||||
0.99% and below | $ | 25,198 | $ | 25,271 | $ | 2,048 | $ | — | $ | 52,517 | $ | 39,591 | $ | 24,241 | ||||||||||||||||||
1.00% to 1.99% | 46,643 | 18,968 | 6,754 | 12,424 | 84,789 | 93,216 | 129,999 | |||||||||||||||||||||||||
2.00% to 2.99% | 36,484 | 16,380 | 19,270 | 39,155 | 111,289 | 130,983 | 119,666 | |||||||||||||||||||||||||
3.00% to 3.99% | 354 | 2,492 | 9,462 | 24,875 | 37,183 | 41,656 | 52,865 | |||||||||||||||||||||||||
4.00% to 4.99% | 3,236 | 1,001 | 3,120 | 3 | 7,360 | 7,934 | 43,187 | |||||||||||||||||||||||||
5.00% to 5.99% | 1,146 | — | — | — | 1,146 | 1,138 | 1,667 | |||||||||||||||||||||||||
Total | $ | 113,061 | $ | 64,112 | $ | 40,654 | $ | 76,457 | $ | 294,284 | $ | 314,518 | $ | 371,625 |
Six Months Ended March 31, | Year Ended September 30, | ||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2012 | 2011 | 2011 | 2010 | 2009 | |||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Opening balance | $ | 554,455 | $ | 596,858 | $ | 596,858 | $ | 516,511 | $ | 453,493 | |||||||||||||
Deposits | 455,773 | 511,585 | 992,692 | 1,865,114 | 1,485,122 | ||||||||||||||||||
Withdrawals | 473,423 | 549,161 | 1,040,942 | 1,793,439 | 1,434,564 | ||||||||||||||||||
Interest credited | 224 | 504 | 5,847 | 8,672 | 12,460 | ||||||||||||||||||
Ending balance | $ | 537,029 | $ | 559,786 | $ | 554,455 | $ | 596,858 | $ | 516,511 | |||||||||||||
Net (decrease) increase | $ | (17,426 | ) | $ | (37,072 | ) | $ | (42,403 | ) | $ | 80,347 | $ | 63,018 | ||||||||||
Percent (decrease) increase | (3.14 | )% | (6.21 | )% | (7.10 | )% | 15.56 | % | 13.90 | % |
Description/Address | Leased/Owned | Date of Lease Expiration | Net Book Value of Property | Amount of Deposits | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(Dollars in thousands) | |||||||||||||||||||
Paoli Headquarters 42 East Lancaster Avenue Paoli, PA 19301 | Owned | N/A | $ | 2,902 | $ | N/A | |||||||||||||
Paoli Financial Center 34 East Lancaster Avenue Paoli, PA 19301 | Owned | N/A | 647 | $ | 197,799 | ||||||||||||||
Malvern Financial Center 100 West King Street Malvern, PA 19355 | Owned | N/A | 29 | 57,305 | |||||||||||||||
Exton Financial Center 109 North Pottstown Pike Exton, PA 19341 | Owned | N/A | 269 | 58,742 | |||||||||||||||
Coventry Financial Center 1000 Ridge Road Pottstown, PA 19465 | Owned | N/A | 318 | 65,443 | |||||||||||||||
Berwyn Financial Center 650 Lancaster Avenue Berwyn, PA 19313 | Owned | N/A | 658 | 47,240 | |||||||||||||||
Lionville Financial Center 537 West Uwchlan Avenue Downingtown, PA 19335 | Owned | N/A | 907 | 33,680 | |||||||||||||||
Westtown Financial Center 100 Skiles Boulevard West Chester, PA 19382 | Leased | 2015 | 130 | 36,205 | |||||||||||||||
Concordville Financial Center 940 Baltimore Pike Glen Mills, PA 19342 | Leased | 2030 | 462 | 40,615 |
• | we were required to submit an updated, comprehensive business plan to the OTS that, among other things, addressed Malvern Federal Savings Bank’s strategy to improve core earnings, maintain appropriate levels of liquidity and achieve profitability on a consistent basis. We must submit quarterly reports to the OCC (and, previously, the OTS) regarding Malvern Federal Savings Bank’s compliance with the plan; |
• | Malvern Federal Savings Bank must ensure that its financial reports to the OCC (and, previously, the OTS) are accurately prepared and timely filed in accordance with applicable law, regulations and regulatory guidance; |
• | we were required to submit a written internal asset review and classification program to the OTS that, among other things, ensures the accurate and timely identification and classification of Malvern Federal Savings Bank’s classified and criticized assets, and requires asset reviews for commercial real estate, construction and land development, multi-family and commercial loans by an independent third-party loan review consultant not less than every six months; |
• | we were required to submit to the OTS a detailed, written plan with targeted levels of Malvern Federal Savings Bank’s problem assets (as defined), describing our strategies to reduce the levels of our problem assets to the targeted levels and the development of specific workout plans for problem assets in the amount of $500,000 or more and we must submit quarterly asset reports to the OCC (and, previously, the OTS) regarding, among other things, Malvern Federal Savings Bank’s compliance with such plans; |
• | we were required to revise Malvern Federal Savings Bank’s policies, procedures and methodologies relating to the allowance for loan and lease losses (“ALLL”) to be in compliance with all applicable |
laws, regulations and regulatory guidance, and we must provide for a quarterly independent third-party review and validation of Malvern Federal Savings Bank’s ALLL; |
• | we were required to submit to the OTS a written program of its policies and procedures for identifying, monitoring and controlling risks associated with concentrations of commercial real estate credit which, among other things, establishes comprehensive concentration limits, provides for specific review procedures and reporting requirements to identify, monitor and control risks associated with concentrations of credit and contain a written action plan, with specific time frames, for bringing Malvern Federal Savings Bank into compliance with its concentration of credit limits; |
• | Malvern Federal Savings Bank may not make, invest in, or purchase any new commercial real estate loans and/or commercial and industrial loans without the prior written non-objection of the OCC (and, previously, the OTS), other than with respect to any refinancing, extension or modification of an existing commercial real estate or commercial and industrial loan where no new funds are advanced; |
• | Malvern Federal Savings Bank was required to develop and implement an information technology policy; |
• | Malvern Federal Bancorp and Malvern Federal Mutual Holding Company are prohibited from declaring or paying dividends or making any other capital distributions (as defined) without receiving the prior written approval of the FRB (and, previously, the OTS); and |
• | Malvern Federal Bancorp and Malvern Federal Mutual Holding Company are required to ensure Malvern Federal Savings Bank’s compliance with its Supervisory Agreement. |
• | Malvern Federal Savings Bank must limit its asset growth in any quarter to an amount which does not exceed the net interest credited on deposit liabilities during the quarter, unless otherwise permitted by the OCC (and, previously, the OTS); |
• | Malvern Federal Savings Bank is required to provide the OCC (and, previously, the OTS) with prior notice of any new director or senior executive officer; |
• | Malvern Federal Savings Bank is restricted from making any “golden parachute payments,” as defined; |
• | Malvern Federal Savings Bank may not enter into, renew, extend or revise any contractual arrangements related to compensation or benefits with any director or officer without receiving prior written non-objection from the OCC (and, previously, the OTS); |
• | Malvern Federal Savings Bank may not declare or pay any dividends or make other capital distributions without the prior written approval of the OCC (and, previously, the OTS); |
• | Malvern Federal Savings Bank’s ability to engage in transactions with affiliates, as defined, is restricted; and |
• | Malvern Federal Savings Bank may not engage in the use of brokered deposits without the prior written non-objection of the OCC (and, previously, the OTS). |
following discussion summarizes significant aspects of the new law that may affect Malvern Federal Savings Bank, Malvern Federal Mutual Holding Company and Malvern Federal Bancorp. Many of these regulations implementing these changes have not been promulgated, so we cannot determine the full impact on our business and operations at this time.
• | The Office of Thrift Supervision has been merged into the OCC and the authority of the other remaining bank regulatory agencies restructured. The federal thrift charter is preserved under the jurisdiction of the OCC. |
• | A new independent consumer financial protection bureau was established within the Federal Reserve Board, empowered to exercise broad regulatory, supervisory and enforcement authority with respect to both new and existing consumer financial protection laws. Smaller financial institutions, like Malvern Federal Savings Bank, are subject to the supervision and enforcement of their primary federal banking regulator with respect to the federal consumer financial protection laws. |
• | Tier 1 capital treatment for “hybrid” capital items like trust preferred securities was eliminated subject to various grandfathering and transition rules. |
• | The current prohibition on payment of interest on demand deposits was repealed, effective July 21, 2011. |
• | State consumer financial law is preempted only if it would have a discriminatory effect on a federal savings association, prevents or significantly interferes with the exercise by a federal savings association of its powers or is preempted by any other federal law. The OCC must make a preemption determination on a case-by-case basis with respect to a particular state law or other state law with substantively equivalent terms. |
• | Deposit insurance is permanently increased to $250,000 and unlimited deposit insurance for noninterest-bearing transaction accounts extended through December 31, 2012. |
• | Deposit insurance assessment base calculation equals the depository institution’s total assets minus the sum of its average tangible equity during the assessment period. |
• | The minimum reserve ratio of the Deposit Insurance Fund increased to 1.35 percent of estimated annual insured deposits or assessment base; however, the FDIC is directed to “offset the effect” of the increased reserve ratio for insured depository institutions with total consolidated assets of less than $10 billion. |
• | Authority over savings and loan holding companies transferred to the Federal Reserve Board on July 21, 2011. |
• | The Home Owners’ Loan Act was amended to provide that leverage capital requirements and risk based capital requirements applicable to depository institutions and bank holding companies will be extended to thrift holding companies. |
• | The Federal Deposit Insurance Act was amended to direct federal regulators to require depository institution holding companies to serve as a source of strength for their depository institution subsidiaries. |
• | Public companies are required to provide their shareholders with a non-binding vote: (i) at least once every three years on the compensation paid to executive officers, and (ii) at least once every six years on whether they should have a “say on pay” vote every one, two or three years (however, smaller reporting companies have temporarily been exempted from this requirement until January 21, 2013). |
• | A separate, non-binding shareholder vote is required regarding golden parachutes for named executive officers when a shareholder vote takes place on mergers, acquisitions, dispositions or other transactions that would trigger the parachute payments. |
• | Securities exchanges are required to prohibit brokers from using their own discretion to vote shares not beneficially owned by them for certain “significant” matters, which include votes on the election of directors, executive compensation matters, and any other matter determined to be significant. |
• | Stock exchanges, which includes the Nasdaq, will be prohibited from listing the securities of any issuer that does not have a policy providing for (i) disclosure of its policy on incentive compensation payable on the basis of financial information reportable under the securities laws, and (ii) the recovery from current or former executive officers, following an accounting restatement triggered by material noncompliance with securities law reporting requirements, of any incentive compensation paid erroneously during the three-year period preceding the date on which the restatement was required that exceeds the amount that would have been paid on the basis of the restated financial information. |
• | Disclosure in annual proxy materials will be required concerning the relationship between the executive compensation paid and the financial performance of the issuer. |
• | Item 402 of Regulation S-K will be amended to require companies to disclose the ratio of the Chief Executive Officer’s annual total compensation to the median annual total compensation of all other employees. |
• | Smaller reporting companies are exempt from complying with the internal control auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act. |
institution is a matter that is evaluated by the Federal Reserve Board and the agency has authority to order cessation of activities or divestiture of subsidiaries deemed to pose a threat to the safety and soundness of the institution.
• | tangible capital requirement—“tangible” capital equal to at least 1.5% of adjusted total assets; |
• | leverage capital requirement—“core” capital equal to at least 3.0% of adjusted total assets for the most highly rated institutions; |
• | an additional “cushion” of at least 100 basis points of core capital for all but the most highly rated savings associations effectively increasing their minimum Tier 1 leverage ratio to 4.0% or more; and |
• | risk-based capital requirement—“total” capital (a combination of core and “supplementary” capital) equal to at least 8.0% of “risk-weighted” assets. |
Capital Category | Total Risk-Based Capital | Tier 1 Risk-Based Capital | Tier 1 Leverage Capital | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Well capitalized | 10% or more | 6% or more | 5% or more | |||||||||||
Adequately capitalized | 8% or more | 4% or more | 4% or more | |||||||||||
Undercapitalized | Less than 8% | Less than 4% | Less than 4% | |||||||||||
Significantly undercapitalized | Less than 6% | Less than 3% | Less than 3% |
Actual | Required for Capital Adequacy Purposes | To Be Well Capitalized Under Prompt Corrective Action Provisions | Excess Over Well-Capitalized Provision | ||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Amount | Ratio | Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||
Total risk-based capital (to risk-weighted assets) | $ | 58,842 | 13.71 | % | $ | 34,347 | 8.00 | % | $ | 42,934 | 10.00 | % | $ | 15,908 | 3.71 | % | |||||||||||||||||||
Tier 1 risk-based capital (to risk-weighted assets) | $ | 53,442 | 12.45 | $ | 17,174 | 4.00 | $ | 25,761 | 6.00 | $ | 27,682 | 6.45 | |||||||||||||||||||||||
Tier 1 leverage capital (to adjusted tangible assets) | $ | 53,442 | 8.27 | $ | 25,838 | 4.00 | $ | 32,297 | 5.00 | $ | 21,145 | 3.27 |
authority to restrict or prohibit the payment of dividends for safety and soundness reasons. The FDIC also prohibits an insured depository institution from paying dividends on its capital stock or interest on its capital notes or debentures (if such interest is required to be paid only out of net profits) or distributing any of its capital assets while it remains in default in the payment of any assessment due the FDIC. Malvern Federal Savings Bank is currently not in default in any assessment payment to the FDIC.
• | Making any new investments or engaging in any new activity not allowed for both a national bank and a savings association; |
• | Establishing any new branch office unless allowable for a national bank; and |
• | Paying dividends unless allowable for a national bank. |
• | Dispose of any investment or not engage in any activity unless the investment or activity is allowed for both a national bank and a savings association. |
holding companies, or (ii) purchasing or investing in any stocks, bonds, debentures, notes or similar obligations of any affiliate, except for affiliates which are subsidiaries of the savings association.
Agency (“FHFA”), its primary regulator, and that it would suspend future dividends and the repurchase and redemption of outstanding capital stock. The FHLB has communicated that it believes the calculation of risk-based capital under the current rules of the FHFA significantly overstates the market risk of the FHLB’s private-label mortgage-backed securities in the current market environment and that it has enough capital to cover the risks reflected in the FHLB’s balance sheet. As a result, an “other than temporary impairment” has not been recorded for the Bank’s investment in FHLB stock. However, continued deterioration in the FHLB’s financial position may result in impairment in the value of those securities. Management will continue to monitor the financial condition of the FHLB as it relates to, among other things, the recoverability of the Bank’s investment.
taxable income. Certain payments of alternative minimum tax may be used as credits against regular tax liabilities in future years. Malvern Federal Bancorp has not been subject to the alternative minimum tax and does not have any such amounts available as credits for carryover.
Name | Age | Position with Malvern Federal Bancorp and Principal Occupation During the Past Five Years | Year Term Expires | Director Since | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Ronald Anderson | 55 | President and Chief Executive Officer of Malvern Federal Bancorp since its organization in 2008 and President and Chief Executive Officer of Malvern Federal Savings Bank since September 2002. Previously, Executive Vice President and Chief Executive Officer of Malvern Federal Savings Bank from September 2001 to September 2002. | 2013 | 2006 | ||||||||||||||
Kristin S. Camp | 42 | Director. Partner at the law firm Buckley, Brion, McGuire & Morris LLP, West Chester, Pennsylvania since 1996. | 2014 | 2007 | ||||||||||||||
F. Claire Hughes, Jr. | 68 | Chairman of the Board. Retired since January 2007. Previously Vice President, General Manager and Treasurer of Matthews Ford and President of Matthews Leasing Company, Paoli, Pennsylvania. | 2013 | 2001 | ||||||||||||||
Joseph E. Palmer, Jr. | 71 | Director. Co-owner and manager of Palmer Group Properties, a real estate investment and management company located in Paoli, Pennsylvania since 1994. | 2015 | 1986 | ||||||||||||||
Stephen P. Scartozzi | 61 | Director. President of The Hardware Center, Inc., Paoli, Pennsylvania since January 2007 and, previously, Vice President of The Hardware Center, Inc. | 2014 | 2010 | ||||||||||||||
George E. Steinmetz | 51 | Director. Owner, Matthews Paoli Ford, an automobile dealership, Paoli, Pennsylvania since 2002. | 2014 | 2007 | ||||||||||||||
Therese Woodman | 59 | Director. Township Manager of East Whiteland Township since February 2001. | 2015 | 2009 | ||||||||||||||
John B. Yerkes, Jr. | 73 | Vice Chairman of the Board. Principal and Chief Executive Officer of Yerkes Associates, Inc., consulting civil engineers, West Chester, Pennsylvania, since 1961. | 2015 | 1975 |
Name | Fees Earned or Paid in Cash | All Other Compensation (1) | Total | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
F. Claire Hughes, Jr. | $ | 61,560 | $ | 2,501 | $ | 64,061 | ||||||||
Kristin S. Camp | 34,720 | — | 34,720 | |||||||||||
Joseph E. Palmer, Jr. | 34,600 | 3,360 | 37,960 | |||||||||||
Stephen P. Scartozzi | 35,360 | — | 35,360 | |||||||||||
Edward P. Shanaughy (2) | 6,367 | 12,662 | 19,029 | |||||||||||
George E. Steinmetz | 36,380 | — | 36,380 | |||||||||||
Therese Woodman | 36,000 | — | 36,000 | |||||||||||
John B. Yerkes, Jr. | 38,980 | 3,848 | 42,828 |
(1) | Consists of accruals and payments under the Directors’ Retirement Plan. |
(2) | Mr. Shanaughy retired from the Board on November 10, 2010. |
Name and Principal Position | Fiscal Year | Salary | Bonus | All Other Compensation (1) | Total | |||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Ronald Anderson | 2011 | $ | 208,731 | $ | — | $ | 43,772 | $ | 252,503 | |||||||||||||
President and Chief Executive Officer | 2010 | 201,000 | — | 50,057 | 251,057 | |||||||||||||||||
Dennis Boyle | 2011 | 171,777 | — | 48,520 | 220,297 | |||||||||||||||||
Senior Vice President and Chief Financial Officer | 2010 | 163,000 | — | 50,534 | 213,534 | |||||||||||||||||
Gerard M. McTear, Jr. | 2011 | (2) | 89,862 | — | 146,175 | 236,037 | ||||||||||||||||
Executive Vice President and Chief Administrative Officer | 2010 | 132,000 | — | 22,508 | 154,508 | |||||||||||||||||
William E. Hughes, Jr. | 2011 | 134,892 | — | 20,907 | 155,799 | |||||||||||||||||
Senior Vice President and Chief Lending Officer | 2010 | 128,000 | — | 27,066 | 155,066 |
(1) | Includes amounts accrued under the Supplemental Executive Retirement Agreements, life insurance premiums, employer matching contributions and supplemental contributions under the Bank’s 401(k) plan, amounts allocated pursuant to the Malvern Federal Bancorp’s employee stock ownership plan and, in the case of Mr. Anderson, an automobile allowance. Also includes, in the case of Mr. McTear, a severance payment of $132,000 paid after the receipt of all requisite regulatory approvals/non-objections. |
(2) | Mr. McTear’s employment terminated as of April 22, 2011. |
defined, Mr. Anderson will be entitled to a severance payment in an amount equal to three times his then current base salary plus his cash bonus received in the immediately preceding year, plus continuation of health insurance and certain other benefits for up to 36 months. As a result of the supervisory factors which led to the execution of the supervisory agreements by Malvern Federal Bancorp and Malvern Federal Savings Bank in October 2010, the payment of any severance benefits to Mr. Anderson currently requires the approval or non-objection of the FDIC and the OCC or FRB.
Bank the executive’s beneficiary shall receive proceeds in the amount of three times the executive’s base salary at the time of death. In the case of the officer’s death after termination of employment with Malvern Federal Savings Bank, provided he reached age 65 before such termination, the officer’s beneficiary shall receive proceeds in the amount of two times the executive’s base salary. Malvern Federal Savings Bank is entitled to receive the amount of the death benefits less those paid to the officer’s beneficiary, which is expected to reimburse Malvern Federal Savings Bank in full for its life insurance investment.
Amounts Paid During Fiscal 2011 | ||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Name | Loan Origination Date | Amount of Fees Waived at Time of Origination | Largest Principal Amount Outstanding during Year Ended September 30, 2011 | Amount Outstanding at September 30, 2011 | Principal | Interest | Interest Rate | |||||||||||||||||||||||
William E. Hughes, Jr. | 2006 | $7,700 | $226,079 | $216,240 | $9,840 | $12,419 | 5.610% |
Name of Beneficial Owner or Number of Persons in Group | Amount and Nature of Beneficial Ownership as of August 9, 2012 (1) | Percent of Common Stock | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Malvern Federal Mutual Holding Company 42 E. Lancaster Avenue Paoli, Pennsylvania 19301 | 3,383,875 | 55.5 | % | |||||||
Joseph Stilwell (2) 26 Broadway, 23rd Floor New York, New York 10004 | 600,600 | (2) | 9.8 | |||||||
Directors: | ||||||||||
Ronald Anderson | 11,415 | (3)(4) | * | |||||||
Kristin S. Camp | 1,100 | * | ||||||||
F. Claire Hughes, Jr. | 5,000 | * | ||||||||
Joseph E. Palmer, Jr. | 4,000 | * | ||||||||
Stephan P. Scartozzi | 1,622 | (5) | * | |||||||
George E. Steinmetz | 10,000 | (4) | * | |||||||
Therese Woodman | 1,717 | * | ||||||||
John B. Yerkes, Jr. | 5,000 | * | ||||||||
Other Named Executive Officers: | ||||||||||
Dennis Boyle | 14,808 | (4)(6) | * | |||||||
William E. Hughes, Jr. | 8,544 | (7) | * | |||||||
All Directors and Executive Officers as a Group (12 persons) | 72,815 | (8) | 1.2 |
* | Represents less than 1% of our outstanding common stock. |
(1) | Based upon filings made pursuant to the Securities Exchange Act of 1934 and information furnished by the respective individuals. Under regulations promulgated pursuant to the Securities Exchange Act of 1934, shares of common stock are deemed to be beneficially owned by a person if he or she directly or indirectly has or shares (i) voting power, which includes the power to vote or to direct the voting of the shares, or (ii) investment power, which includes the power to dispose or to direct the disposition of the shares. Unless otherwise indicated, the named beneficial owner has sole voting and dispositive power with respect to the shares. |
(2) | Based on information contained in the Schedule 13D, as amended, filed by Joseph Stilwell and certain affiliated entities. Joseph Stilwell beneficially owns 600,600 shares of Malvern Federal Bancorp common stock, including shares which Joseph Stilwell has shared voting and dispositive over and which are held in the names of Stilwell Value Partners VI, Stilwell Partners, Stilwell Associates and Stilwell Offshore, in Joseph Stilwell’s capacities as the general partner of Stilwell Partners and the managing and sole member of Stilwell Value LLC, which is the general partner of Stilwell Value Partners VI and Stilwell Associates, and of Stilwell Management, which is the general partner of Stilwell Offshore. |
(3) | Includes 9,000 shares held in the Malvern Federal Saving Bank 401(k) Plan, and 2,415 shares allocated to Mr. Anderson’s account in the ESOP. |
(4) | Does not include 194,812 unallocated shares held in the ESOP which are voted by the ESOP trustees. |
(5) | The indicated shares are held jointly by Mr. Scartozzi and his spouse. |
(6) | Includes 12,500 shares held in the 401(k) Plan, 300 shares held by Mr. Boyle’s children and 2,008 shares allocated to Mr. Boyle’s account in the ESOP. |
(7) | Includes 7,000 shares held in the 401(k) Plan and 1,544 shares allocated to Mr. Hughes’ account in the ESOP. |
(8) | Includes an aggregate 7,604 shares allocated to the ESOP accounts and an aggregate 30,872 shares allocated to the 401(k) Plan accounts of executive officers. |
Proposed Purchase of Malvern Bancorp— New Stock | Total Shares of Malvern Bancorp—New Common Stock to Be Held | |||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Name | Number of Malvern Bancorp—New Shares to Be Received in Exchange For Shares of Malvern Federal Bancorp | Amount | Number of Shares | Number of Shares | Percentage of Shares Outstanding (1) | |||||||||||||||||||
Directors: | ||||||||||||||||||||||||
Ronald Anderson | 9,276 | (2) | $ | 40,000 | 4,000 | 13,276 | * | |||||||||||||||||
Kristin S. Camp | 893 | 10,000 | 1,000 | 1,893 | * | |||||||||||||||||||
F. Claire Hughes, Jr. | 4,063 | — | — | 4,063 | * | |||||||||||||||||||
Joseph E. Palmer, Jr. | 3,250 | 5,000 | 500 | 3,750 | * | |||||||||||||||||||
Stephan P. Scartozzi | 1,318 | 10,000 | 1,000 | 2,318 | * | |||||||||||||||||||
George E. Steinmetz | 8,127 | 20,000 | 2,000 | 10,127 | * | |||||||||||||||||||
Therese Woodman | 1,395 | 20,000 | 2,000 | 3,395 | * | |||||||||||||||||||
John B. Yerkes, Jr. | 4,063 | 1,000 | 100 | 4,163 | * | |||||||||||||||||||
Other Executive Officers: | ||||||||||||||||||||||||
Dennis Boyle | 12,034 | (2) | 50,000 | 5,000 | 17,034 | * | ||||||||||||||||||
Richard J. Fuchs | 5,539 | (2) | 10,000 | 1,000 | 6,539 | * | ||||||||||||||||||
William E. Hughes, Jr. | 6,943 | (2) | 70,000 | 7,000 | 13,943 | * | ||||||||||||||||||
Charles H. Neiner | 2,269 | (2) | 10,000 | 1,000 | 3,269 | * | ||||||||||||||||||
All Directors and Executive Officers as a Group (12 persons) | 59,170 | $ | 246,000 | 24,600 | 83,770 | 1.7 | % |
* | Less than 1% |
(1) | Based upon 4,959,366 shares outstanding. |
(2) | Includes shares held in 401(k) Plan and ESOP. |
such that a second-step conversion is in our best interests at this time. We are pursuing the conversion and related offering for the following reasons:
• | In light of the risk profile posed by, among other factors, the increased levels of our non-performing assets in recent years and also based in part upon our communications with staff of the Office of the Comptroller of the Currency, we determined to increase the amount of capital we maintain at Malvern Federal Savings Bank. The additional funds raised in the offering will increase our capital such that we will meet all of the specific capital ratio targets that we have established (which exceed the regulatory thresholds for “well-capitalized” status) and support our ability to operate in accordance with our business strategy in the future. |
• | Conversion to the fully public form of ownership will remove the uncertainties associated with the mutual holding company structure. We believe that the conversion and offering will result in a more familiar and flexible form of corporate organization and will better position us to continue to meet all current and future regulatory requirements, including regulatory capital requirements which may be imposed on savings and loan holding companies such as Malvern Bancorp—New, and, in light of the portion of the net proceeds of the offering to be retained by the new stock-form holding company, will facilitate the ability of Malvern Bancorp—New to serve as a source of strength for Malvern Federal Savings Bank. |
• | The number of our outstanding shares of common stock after the conversion and offering will be greater than the current number of shares of Malvern Federal Bancorp common stock held by the public shareholders. We expect this will facilitate development of a more active and liquid trading market for our common stock. See “Market for Our Common Stock.” |
• | Malvern Federal Mutual Holding Company will convert from mutual to stock form and simultaneously merge with and into Malvern Federal Bancorp, pursuant to which the mutual holding company will cease to exist and the shares of Malvern Federal Bancorp common stock held by the mutual holding company will be canceled; and |
• | Malvern Federal Bancorp then will merge with and into the Malvern Bancorp—New with Malvern Bancorp—New being the survivor of such merger. |
• | the total number of shares of common stock to be issued in the conversion and offering; |
• | the total shares of common stock outstanding after the conversion and offering; |
• | the exchange ratio; and |
• | the number of shares an owner of 100 shares of Malvern Federal Bancorp common stock will receive in the exchange, adjusted for the number of shares sold in the offering, and the assumed value of each of such shares. |
Shares to be sold in the offering | Shares of Malvern Bancorp—New stock to be issued in exchange for Malvern Federal Bancorp common stock | |||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Amount | Percent | Amount | Percent | Total shares of Malvern Bancorp—New common stock to be outstanding after the conversion | Exchange ratio | 100 shares of Malvern Federal Bancorp common stock would be exchanged for the following number of shares of Malvern Bancorp—New (1) | Equivalent Per Share Value (2) | |||||||||||||||||||||||||||
Minimum | 2,337,500 | 55.4506 | % | 1,877,961 | 44.5494 | % | 4,215,461 | 0.6908 | 69 | $ | 6.91 | |||||||||||||||||||||||
Midpoint | 2,750,000 | 55.4506 | 2,209,366 | 44.5494 | 4,959,366 | 0.8127 | 81 | 8.13 | ||||||||||||||||||||||||||
Maximum | 3,162,500 | 55.4506 | 2,540,771 | 44.5494 | 5,703,271 | 0.9346 | 93 | 9.35 | ||||||||||||||||||||||||||
15% above the maximum | 3,363,875 | 55.4506 | 2,921,887 | 44.5494 | 6,558,762 | 1.0748 | 107 | 10.75 |
(1) | Cash will be paid instead of issuing any fractional shares. |
(2) | Represents the value of shares of Malvern Bancorp-New to be received by a holder of one share of Malvern Federal Bancorp common stock at the exchange ratio, assuming a value of $10.00 per share. |
of the exchange, the initial market value of the Malvern Bancorp—New common stock that Malvern Federal Bancorp shareholders receive in the share exchange could be less than the market value of the Malvern Federal Bancorp common stock that such persons currently own. If the conversion and offering is completed at the minimum of the offering range, each share of Malvern Federal Bancorp would be converted into 0.6908 shares of Malvern Bancorp—New common stock with an initial value of $6.91 based on the $10.00 offering price in the conversion. This compares to the closing sale price of $8.74 per share price for Malvern Federal Bancorp common stock on August 10, 2012, as reported on the Nasdaq Global Market. In addition, pro forma stockholders’ equity per share following the conversion and offering will range between $19.76 and $15.99 at the minimum and the maximum of the offering range, respectively.
2,337,500 shares issued at minimum of offering range | 2,750,000 shares issued at midpoint of offering range | 3,162,500 shares issued at maximum of offering range | 3,636,875 shares issued at adjusted maximum of offering range (1) | ||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Amount | Percent of Total | Amount | Percent of Total | Amount | Percent of Total | Amount | Percent of Total | ||||||||||||||||||||||||||||
Purchasers in the stock offering | 2,337,500 | 55.5 | % | 2,750,000 | 55.5 | % | 3,162,500 | 55.5 | % | 3,636,875 | 55.5 | % | |||||||||||||||||||||||
Malvern Federal Bancorp public shareholders in the exchange | 1,877,961 | 44.5 | 2,209,336 | 44.5 | 2,540,771 | 44.5 | 2,921,887 | 44.5 | |||||||||||||||||||||||||||
Total shares outstanding after the conversion and offering | 4,215,461 | 100.0 | % | 4,959,366 | 100.0 | % | 5,703,271 | 100.0 | % | 6,558,762 | 100.0 | % |
(1) | As adjusted to give effect to an increase in the number of shares that could occur due to an increase in the offering range of 15% to reflect changes in market and financial conditions before the conversion and offering is completed. |
Currency and the Federal Deposit Insurance Corporation. After the conversion and offering, Malvern Federal Savings Bank will continue to provide services for depositors and borrowers under current policies by its present management and staff.
• | eligible account holders, |
• | our employee stock ownership plan, |
• | supplemental eligible account holders, and |
• | other members, that is depositors of Malvern Federal Savings Bank as of the close of business on August 6, 2012 and borrowers with a loan from Malvern Federal Savings Bank at December 31, 1990 that continued to be outstanding on August 6, 2012 who, in either case, are not eligible account holders or supplemental eligible account holders. |
• | 5.0% of the shares of common stock sold in the offering (or 158,125 shares at the maximum of the offering range); or |
• | 15 times the product, rounded down to the next whole number, obtained by multiplying the total number of shares of common stock offered in the subscription offering by a fraction, of which the numerator is the amount of the eligible account holder’s qualifying deposit and the denominator of which is the total amount of qualifying deposits of all eligible account holders, in each case as of the close of business on the eligibility record date, December 31, 2010, subject to the overall purchase limitations. See “—Limitations on Common Stock Purchases.” |
• | 5.0% of the shares of common stock sold in the offering (or 158,125 shares at the maximum of the offering range); or |
• | 15 times the product, rounded down to the next whole number, obtained by multiplying the total number of shares of common stock offered in the subscription offering by a fraction, of which the numerator is the amount of the supplemental eligible account holder’s qualifying deposit and the denominator of which is the total amount of qualifying deposits of all supplemental eligible account holders, in each case as of the close of business on the supplemental eligibility record date, |
June 30, 2012, subject to the overall purchase limitations. See “—Limitations on Common Stock Purchases.” |
an amount equal to the lesser of 100 shares or the number of shares subscribed for by each such subscriber, if possible. Thereafter, available shares will be allocated among the community residents whose orders remain unsatisfied on an equal number of shares per order basis until all available shares have been allocated. If oversubscription is due to orders of public shareholders or the general public, shares will be allocated by applying the same allocation described above.
underwriting agreement in connection with the underwritten public offering will not be entered into between Stifel, Nicolaus & Company, Incorporated and Malvern Bancorp—New, Malvern Federal Savings Bank and Malvern Federal Mutual Holding Company until immediately prior to the completion of the underwritten public offering. At that time Stifel, Nicolaus & Company, Incorporated will represent that they have received sufficient indications of interest to complete the offering. Pursuant to the terms of the underwriting agreement, and subject to certain customary provisions and conditions to closing, upon execution of the underwriting agreement, Stifel, Nicolaus & Company, Incorporated and any other underwriters will be obligated to purchase all the shares subject to the underwritten public offering.
• | our present and projected operating results and financial condition and the economic and demographic conditions in Malvern Federal Savings Bank’s existing market area; |
• | certain historical, financial and other information; |
• | a comparative evaluation of our operating and financial statistics compared to with those of other similarly situated publicly-traded companies located in Pennsylvania and the Mid-Atlantic and New England regions of the United States; |
• | the aggregate size of the offering of Malvern Bancorp—New common stock; |
• | the impact of the conversion on our net worth and earnings potential; |
• | our proposed dividend policy; and |
• | the trading market for our common stock and securities of comparable companies and general conditions in the market for such securities. |
• | assets averaging $803 million; |
• | non-performing assets averaging 2.86% of total assets; |
• | equity equal to 14.0% of assets; and |
• | price/earnings ratios equal to an average of 18.40x and ranging from 12.8x to 35.3x. |
average pricing ratios of the peer group, our pro forma pricing ratios at the maximum of the offering range indicate a premium of 214.9% on a price-to-earnings basis and a discount of 20.2% and 26.6%, respectively, on a price-to-book basis and price-to-tangible book basis.
Price to Earnings Multiple (1) | Price to Book Value Ratio (2) | Price to Tangible Book Value Ratio (2) | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Malvern Bancorp—New (pro forma): | ||||||||||||||
Minimum | 45.09 | x | 50.61 | x | 50.61 | x | ||||||||
Midpoint | 51.68 | 56.85 | 56.85 | |||||||||||
Maximum | 57.94 | 62.54 | 62.54 | |||||||||||
Maximum, as adjusted | 64.77 | 68.49 | 68.49 | |||||||||||
Peer group companies as of May 4, 2012: | ||||||||||||||
Average | 18.40 | x | 78.42 | % | 85.17 | % | ||||||||
Median | 17.00 | 74.90 | 83.11 |
(1) | Peer group ratios are based on earnings for twelve months ended December 31, 2011, and share prices as of May 4, 2012. |
(2) | Peer group ratios are based on book value as of December 31, 2011 and share prices as of May 4, 2012. |
(1) | No less than 25 shares of common stock may be purchased; |
(2) | Each eligible account holder may subscribe for and purchase in the subscription offering up to the greater of (a) 5.0% of the shares of common stock sold in the conversion and reorganization (or 116,875 shares at the minimum of the offering range, 137,500 shares at the midpoint of the offering range, 158,125 shares at the maximum of the offering range and 181,843 shares at the maximum of the offering range, as adjusted) or (b) 15 times the product, rounded down to the next whole number, obtained by multiplying the total number of shares of common stock to be issued by a fraction, of which the numerator is the amount of the qualifying deposit of the eligible account holder and the denominator is the total amount of qualifying deposits of all eligible account holders, in each case as of the close of business on the eligibility record date, December 31, 2010, subject to the overall limitations in clauses 7 and 8 below; |
(3) | Any purchase of shares by the employee stock ownership plan in the offering is limited to an amount which, when aggregated with shares previously purchased by the employee stock ownership plan in 2008, will not exceed an aggregate of 8.0% of the shares of common stock to be outstanding upon the completion of the conversion and offering (however, the employee stock ownership plan will not be purchasing any shares in the conversion and offering); |
(4) | Each supplemental eligible account holder may subscribe for and purchase in the subscription offering up to the greater of (a) 5.0% of the shares of common stock sold in the conversion and |
reorganization (or 116,875 shares at the minimum of the offering range, 137,500 shares at the midpoint of the offering range, 158,125 shares at the maximum of the offering range and 181,843 shares at the maximum of the offering range, as adjusted) or (b) 15 times the product, rounded down to the next whole number, obtained by multiplying the total number of shares of common stock to be issued by a fraction, of which the numerator is the amount of the qualifying deposit of the supplemental eligible account holder and the denominator is the total amount of qualifying deposits of all supplemental eligible account holders, in each case as of the close of business on the supplemental eligibility record date, June 30, 2012, subject to the overall limitations in clauses 7 and 8 below; |
(5) | Each other member, that is any depositor of Malvern Federal Savings Bank as of the close of business on August 6, 2012 and any borrower of Malvern Federal Savings Bank as of December 31, 1990 whose loan continued to be outstanding as of August 6, 2012, may subscribe for and purchase in the subscription offering up to 5.0% of the shares of common stock sold in the conversion and reorganization (or 116,875 shares, 137,500 shares, 158,125 shares and 181,843 shares at the minimum, midpoint, maximum and maximum as adjusted, of the offering range), subject to the overall limitations in clauses 7 and 8 below; |
(6) | Each person purchasing shares in the community offering or any syndicated community offering may subscribe for and purchase up to 5.0% of the shares of common stock sold in the conversion and reorganization (or 116,875 shares at the minimum of the offering range, 137,500 shares at the midpoint of the offering range, 158,125 shares at the maximum of the offering range and 181,843 shares at the maximum of the offering range, as adjusted); subject to the overall limitations in clauses 7 and 8 below; |
(7) | Except for the employee stock ownership plan, the maximum number of shares of common stock subscribed for or purchased in all categories of the offering by any person, together with associates of and groups of persons acting in concert with such person, shall not exceed 5.0% of the shares of common stock sold in the conversion and reorganization (or 116,875 shares at the minimum of the offering range, 137,500 shares at the midpoint of the offering range, 158,125 shares at the maximum of the offering range and 181,843 shares at the maximum of the offering range, as adjusted), subject to the limitation in clause 8 below; |
(8) | In addition, the maximum number of shares of common stock that may be subscribed for or purchased in all categories of the offering by any public shareholder of Malvern Federal Bancorp, together with associates of and groups of persons acting in concert with such shareholder, when combined with any exchange shares to be received by the shareholder and his associates, may not exceed 9.9% of the total shares of common stock outstanding upon completion of the conversion and offering. However, public shareholders will not be required to sell any shares of Malvern Federal Bancorp common stock or be limited from receiving any exchange shares or be required to divest themselves of any exchange shares as a result of this limitation. |
(9) | No more than 25% of the total number of shares sold in the offering may be purchased by directors and officers of Malvern Federal Savings Bank and their associates in the aggregate, excluding purchases by the employee stock ownership plan. |
• | in the event that there is an oversubscription by eligible account holders, to fill unfulfilled subscriptions of eligible account holders; |
• | in the event that there is an oversubscription by supplemental eligible account holders, to fill unfulfilled subscriptions of supplemental eligible account holders; |
• | in the event that there is an oversubscription by other members, to fill unfulfilled subscriptions of other members; and |
• | to fill unfulfilled subscriptions in the community offering. |
• | acting as our financial advisor for the conversion and offering; |
• | providing administrative services and managing the Stock Information Center; |
• | educating our employees regarding the offering; |
• | targeting our sales efforts, including assisting in the preparation of marketing materials; and |
• | soliciting orders for common stock. |
• | Personal check, bank check or money order made payable directly to “Malvern Bancorp, Inc.“; or |
• | Authorization of withdrawal from the types of Malvern Federal Savings Bank deposit accounts identified on the stock order form. |
• | the number of persons otherwise eligible to subscribe for shares under the plan of conversion and reorganization who reside in such jurisdiction is small; |
• | the granting of subscription rights or the offer or sale of shares of common stock to such persons would require any of us or our officers, directors or employees, under the laws of such jurisdiction, to register as a broker, dealer, salesman or selling agent or to register or otherwise qualify our securities for sale in such jurisdiction or to qualify a foreign corporation or file a consent to service of process in such jurisdiction; or |
• | such registration, qualification or filing in our judgment would be impracticable or unduly burdensome for reasons of costs or otherwise. |
Bancorp—New will have commenced. Your ability to sell shares of common stock before receiving your stock certificate will depend on arrangements you may make with a brokerage firm.
the registered holder of the certificate surrendered or otherwise establish to the satisfaction of the exchange agent that such tax has been paid or is not payable.
Bancorp—New pursuant to the plan of conversion to certain depositors, with any assets remaining thereafter distributed to Malvern Bancorp—New as the holder of Malvern Federal Savings Bank capital stock.
1. | The conversion of Malvern Federal Mutual Holding Company to stock form will constitute a mere change in identity, form or place of organization within the meaning of Section 368(a)(1)(F) of the Code and therefore will qualify as a tax-free reorganization within the meaning of Section 368(a)(1)(F) of the Code. |
2. | Malvern Federal Mutual Holding Company will not recognize any gain or loss as a result of its conversion to stock form. (See Sections 361(a), 361(c) and 357(a) of the Code.) |
3. | The basis of the assets of Malvern Federal Mutual Holding Company immediately following its conversion to stock form will be the same as the basis of such assets immediately prior to its conversion. (See Section 362(b) of the Code.) |
4. | The holding period of the assets of Malvern Federal Mutual Holding Company immediately following its conversion to stock form will include the holding period of those assets immediately prior to its conversion. (See Section 1223(2) of the Code.) |
5. | The merger of Malvern Federal Mutual Holding Company with and into Malvern Federal Bancorp with Malvern Federal Bancorp being the surviving institution (the mutual holding company merger), will qualify as a tax-free reorganization within the meaning of Section 368(a)(1)(A) of the Internal Revenue Code. (Section 368(a)(1)(A) of the Internal Revenue Code.) |
6 | The constructive exchange of the eligible account holders’ and supplemental eligible account holders’ liquidation interests in Malvern Federal Mutual Holding Company for liquidation interests in Malvern Federal Bancorp in the mutual holding company merger will satisfy the continuity of interest requirement of Section 1.368-1(b) of the Income Tax Regulations. (Rev. Rul. 69-3, 1969-1 C.B. 103, and Rev. Rul. 69-646, 1969-2 C.B. 54.) |
7. | Malvern Federal Mutual Holding Company will not recognize any gain or loss on the transfer of its assets to Malvern Federal Bancorp and Malvern Federal Bancorp’s assumption of its liabilities, if any, in constructive exchange for liquidation interests in Malvern Federal Bancorp or on the constructive distribution of such liquidation interest to Malvern Federal Mutual Holding Company’s persons who are eligible account holders or supplemental eligible account holders. (Sections 361(a), 361(c), and 357(a) of the Internal Revenue Code.) |
8. | No gain or loss will be recognized by Malvern Federal Bancorp upon the receipt of the assets of Malvern Federal Mutual Holding Company in the mutual holding company merger in exchange for the constructive transfer to eligible account holders and supplemental eligible account holders of liquidation interests in Malvern Federal Bancorp. (Section 1032(a) of the Internal Revenue Code.) |
9. | Eligible account holders and supplemental eligible account holders will recognize no gain or loss upon the constructive receipt of liquidation interests in Malvern Federal Bancorp in exchange for |
their liquidation interests in Malvern Federal Mutual Holding Company. (Section 354(a) of the Internal Revenue Code.) |
10. | The basis of the assets of Malvern Federal Mutual Holding Company (other than the stock in Malvern Federal Bancorp which will be cancelled) to be received by Malvern Federal Bancorp will be the same as the basis of such assets in the hands of Malvern Federal Mutual Holding Company immediately prior to the transfer. (Section 362(b) of the Internal Revenue Code.) |
11. | The holding period of the assets of Malvern Federal Mutual Holding Company in the hands of Malvern Federal Bancorp will include the holding period of those assets in the hands of Malvern Federal Mutual Holding Company. (Section 1223(2) of the Internal Revenue Code.) |
12. | The merger of Malvern Federal Bancorp with and into Malvern Bancorp—New (the mid-tier holding company merger) will constitute a mere change in identity, form or place of organization within the meaning of Section 368(a)(1)(F) of the Internal Revenue Code and therefore will qualify as a tax-free reorganization within the meaning of Section 368(a)(1)(F) of the Internal Revenue Code. |
13. | Malvern Federal Bancorp will not recognize any gain or loss on the transfer of its assets to Malvern Bancorp—New and Malvern Bancorp—New’s assumption of its liabilities in the mid-tier holding company merger, pursuant to which shares of Malvern Bancorp—New common stock will be received in exchange for shares of Malvern Federal Bancorp’s common stock, and eligible account holders and supplemental eligible account holders will receive liquidation interests in Malvern Bancorp—New in exchange for their liquidation interests in Malvern Federal Bancorp. |
14. | No gain or loss will be recognized by Malvern Bancorp—New upon the receipt of the assets of Malvern Federal Bancorp in the mid-tier holding company merger. (Section 1032(a) of the Internal Revenue Code.) |
15. | The basis of the assets of Malvern Federal Bancorp (other than stock in Malvern Federal Savings Bank) to be received by Malvern Bancorp—New will be the same as the basis of such assets in the hands of Malvern Federal Bancorp immediately prior to the transfer. (Section 362(b) of the Internal Revenue Code.) |
16. | The holding period of the assets of Malvern Federal Bancorp in the hands of Malvern Bancorp—New will include the holding period of those assets in the hands of Malvern Federal Bancorp. (Section 1223(2) of the Internal Revenue Code.) |
17. | Malvern Federal Bancorp shareholders will not recognize any gain or loss upon their exchange of Malvern Federal Bancorp common stock for Malvern Bancorp—New common stock, except for cash paid in lieu of fractional shares. (Section 354 of the Internal Revenue Code.) |
18. | The payment of cash to shareholders of Malvern Federal Bancorp in lieu of fractional shares of Malvern Bancorp—New common stock will be treated as though the fractional shares were distributed as part of the mid-tier holding company merger and then redeemed by Malvern Bancorp—New. The cash payments will be treated as distributions in full payment for the fractional shares deemed redeemed under Section 302(a) of the Internal Revenue Code, with the result that such shareholders will have short-term or long-term capital gain or loss to the extent that the cash they receive differs from the basis allocable to such fractional shares. (Rev. Rul. 66-365, 1966-2 C.B. 116 and Rev. Proc. 77-41, 1977-2 C.B. 574.) |
19. | Eligible account holders and supplemental eligible account holders will not recognize any gain or loss upon their constructive exchange of their liquidation interests in Malvern Federal Bancorp for the liquidation accounts in Malvern Bancorp—New. (Section 354 of the Internal Revenue Code.) |
20. | It is more likely than not that the fair market value of the nontransferable subscription rights to purchase Malvern Bancorp—New common stock is zero. Accordingly, it is more likely than not that no gain or loss will be recognized by eligible account holders, supplemental eligible account holders and other members upon distribution to them of nontransferable subscription rights to purchase shares of Malvern Bancorp—New common stock. (Section 356(a) of the Internal Revenue Code.) |
It is more likely than not that eligible account holders, supplemental eligible account holders and other members will not realize any taxable income as the result of the exercise by them of the nontransferable subscriptions rights. (Rev. Rul. 56-572, 1956-2 C.B. 182.) |
21. | It is more likely than not that the fair market value of the benefit provided by the bank liquidation account supporting the payment of the liquidation account in the event Malvern Bancorp—New lacks sufficient net assets is zero. Accordingly, it is more likely than not that no gain or loss will be recognized by eligible account holders and supplemental eligible account holders upon the constructive distribution to them of interests in the bank liquidation account as of the effective date of the conversion and reorganization. (Section 356(a) of the Internal Revenue Code.) |
22. | It is more likely than not that the basis of common stock purchased in the offering by the exercise of the nontransferable subscription rights will be the purchase price thereof. (Section 1012 of the Internal Revenue Code.) |
23. | Each shareholder’s holding period in his or her Malvern Bancorp—New common stock received in the exchange will include the period during which the common stock surrendered was held, provided that the common stock surrendered is a capital asset in the hands of the shareholder on the date of the exchange. (Section 1223(1) of the Internal Revenue Code.) |
24. | The holding period of the common stock purchased pursuant to the exercise of subscriptions rights shall commence on the date on which the right to acquire such stock was exercised. (Section 1223(5) of the Internal Revenue Code.) |
25. | No gain or loss will be recognized by Malvern Bancorp—New on the receipt of money in exchange for common stock sold in the offering. (Section 1032 of the Internal Revenue Code.) |
by the plan of conversion and reorganization are to be treated differently from those presented in the opinion, Malvern Bancorp—New may be subject to adverse tax consequences as a result of the conversion and offering. Eligible subscribers are encouraged to consult with their own tax advisor as to the tax consequences in the event that such subscription rights are deemed to have an ascertainable value.
• | the corporation would be unable to pay its debts as they become due in the usual course of its business; or |
• | the total assets of the corporation would be less than the sum of its total liabilities plus (unless otherwise provided in its articles of incorporation) the amount that would be needed to satisfy the preferential rights upon dissolution of the corporation of shareholders whose preferential rights are superior to those receiving the distribution. |
• | the effects of any action upon any and all groups affected by such action, including shareholders, employees, suppliers, customers and creditors of the corporation and upon communities in which offices or other establishments of the corporation are located; |
• | the short-term and long-term interests of the corporation, including benefits that may accrue to the corporation from its long-term plans and the possibility that these interests may be best served by the continued independence of the corporation; |
• | the resources, intent and conduct (past, stated and potential) or any person seeking to acquire control of the corporation; and |
• | all other pertinent factors. |
• | the director has breached or failed to perform the duties of his office in accordance with the PBCL; and |
• | the breach or failure to perform constitutes self-dealing, willful misconduct or recklessness. |
nominations for election to the board of directors, other than those made by the board or a committee thereof, shall be made by a shareholder who has complied with the notice provisions in the bylaws. Written notice of a shareholder nomination must be communicated to the attention of the secretary and either delivered to, or mailed and received at, the principal executive offices not later than (a) with respect to an annual meeting of shareholders, 120 days prior to the anniversary date of the mailing of proxy materials by Malvern Bancorp—New in connection with the immediately preceding annual meeting of shareholders, or the case of the first annual meeting following the conversion and reorganization, October 31, 2012.
other offer or acquisition approved in advance by the affirmative vote of 80% of the board of directors. In the event that shares are acquired in violation of this restriction, all shares beneficially owned by any person in excess of 10% will not be counted as shares entitled to vote and will not be voted by any person or counted as voting shares in connection with any matters submitted to shareholders for a vote, and the board of directors may cause the excess shares to be transferred to an independent trustee for sale.
• | it does not involve an interim savings institution; |
• | The charter of Malvern Federal Bancorp is not changed; |
• | each share of Malvern Federal Bancorp stock outstanding immediately prior to the effective date of the transaction is to be an identical outstanding share or a treasury share of Malvern Federal Bancorp after such effective date; and |
• | either: (a) no shares of voting stock of Malvern Federal Bancorp and no securities convertible into such stock are to be issued or delivered under the plan of combination or (b) the authorized unissued shares or the treasury shares of voting stock of Malvern Federal Bancorp to be issued or delivered under the plan of combination, plus those initially issuable upon conversion of any securities to be issued or delivered under such plan, do not exceed 15% of the total shares of voting stock of Malvern Federal Bancorp outstanding immediately prior to the effective date of the transaction. |
• | whether or not the constituent corporation, in this case, Malvern Bancorp—New, is the surviving corporation (a) the surviving or new corporation is a Pennsylvania business corporation and the articles of the surviving or new corporation are identical to the articles of the constituent corporation, except for specified changes which may be adopted by a board of directors without shareholder action, (b) each share of the constituent corporation outstanding immediately prior to the effective date of the merger or consolidation is to continue as or to be converted into, except as may be otherwise agreed by the holder thereof, an identical share of the surviving or new corporation after the effective date of the merger or consolidation, and (c) the plan provides that the shareholders of the constituent corporation are to hold in the aggregate shares of the surviving or new corporation to be outstanding immediately after the effectiveness of the plan entitled to cast at least a majority of the votes entitled to be cast generally for the election of directors; |
• | immediately prior to adoption of the plan and at all times prior to its effective date, another corporation that is a party to the merger or consolidation owns directly or indirectly 80% or more of the outstanding shares of each class of the constituent corporation; or |
• | no shares of the constituent corporation have been issued prior to the adoption of the plan of merger or consolidation by the board of directors. |
plan if the shares are not converted solely into shares of the acquiring, surviving, new or other corporation or solely into such shares and money in lieu of fractional shares, (b) shares of any preferred class unless the articles, the plan or the terms of the transaction entitle all shareholders of the class to vote thereon and require for the adoption of the plan or the effectuation of the transaction the affirmative vote of a majority of the votes cast by all shareholders of the class, or (c) shares of the same class which are classified and treated differently and receive special treatment in the transaction and such special treatment is not approved by a vote of the majority of the shares of each group that is to receive such special treatment. Malvern Federal Bancorp currently has approximately 560 shareholders of record and its common stock is listed on the NASDAQ Global Market. Following, the conversion and offering, it is expected that the common stock of Malvern Bancorp—New will be listed on the NASDAQ Global Market.
MALVERN FEDERAL SAVINGS BANK AND RELATED ANTI-TAKEOVER PROVISIONS
• | that the board of directors shall be divided into classes with only one-third of its directors standing for reelection each year; |
• | that special meetings of shareholders may only be called by the board of directors; |
• | that shareholders generally must provide Malvern Bancorp—New advance notice of shareholder proposals and nominations for director and provide certain specified related information in the proposal; |
• | that any merger or similar transaction be approved by a super-majority vote (75%) of shareholders entitled to vote unless it has previously been approved by at least two-thirds of the directors; |
• | that no person may acquire more than 10% of the issued and outstanding shares of any class of equity securities of Malvern Bancorp—New; and |
• | the board of directors shall have the authority to issue shares of authorized but unissued common stock and preferred stock and to establish the terms of any one or more series of preferred stock, including voting rights. |
• | Malvern Bancorp—New may not engage in a business combination with an “interested shareholder,” generally defined as a holder of 20% of a corporation’s voting stock, during the five-year period after the interested shareholder became such except under certain specified circumstances, |
• | holders of common stock may object to a “control transaction” involving Malvern Bancorp—New, generally defined as the acquisition by a person or group of persons acting in concert of at least 20% of the outstanding voting stock of a corporation, and demand that they be paid a cash payment for the “fair value” of their shares from the “controlling person or group,” and |
• | any “profit,” as defined, realized by any person or group who is or was a “controlling person or group” with respect to Malvern Bancorp—New from the disposition of any equity securities to any person shall belong to and be recoverable by Malvern Bancorp—New when the profit is realized in a specified manner. |
institution is conclusively deemed to have been acquired by, among other things, the acquisition of more than 25% of any class of voting stock of the institution or the ability to control the election of a majority of the directors of an institution. Moreover, control is presumed to have been acquired, subject to rebuttal, upon the acquisition of more than 10% of any class of voting stock, or of more than 25% of any class of stock, of a savings institution where certain enumerated “control factors” are also present in the acquisition. The Federal Reserve Board may prohibit an acquisition if (a) it would result in a monopoly or substantially lessen competition, (b) the financial condition of the acquiring person might jeopardize the financial stability of the institution, or (c) the competence, experience or integrity of the acquiring person indicates that it would not be in the interest of the depositors or of the public to permit the acquisition of control by such person. The foregoing restrictions do not apply to the acquisition of a savings institution’s capital stock by one or more tax-qualified employee stock benefit plans, provided that the plan or plans do not have beneficial ownership in the aggregate of more than 25% of any class of equity security of the savings institution.
• | any offer with a view toward public resale made exclusively to the institution or to underwriters or a selling group acting on its behalf; |
• | offers that if consummated would not result in the acquisition by such person during the preceding 12-month period of more than 1% of such stock; |
• | offers in the aggregate for up to 24.9% by the employee stock ownership plan or other tax-qualified plans of Malvern Bancorp—New or Malvern Federal Savings Bank; and |
• | an offer to acquire or acquisition of beneficial ownership of more than 10% of the common stock of the savings institution by a corporation whose ownership is or will be substantially the same as the ownership of the savings institution, provided that the offer or acquisition is made more than one year following the date of completion of the conversion and reorganization. |
Financial Statements of Malvern Federal Bancorp, Inc. and Subsidiaries | Page No. | |||||
---|---|---|---|---|---|---|
Report of Independent Registered Public Accounting Firm | F-2 | |||||
Consolidated Statements of Financial Condition as of March 31, 2012 (Unaudited), and September 30, 2011 and 2010 | F-3 | |||||
Consolidated Statements of Operations for the Six Months Ended March 31, 2012 and 2011 (Unaudited) and for the Years Ended September 30, 2011, 2010 and 2009 | F-4 | |||||
Consolidated Statements of Comprehensive Income (Loss) for the Six Months Ended March 31, 2012 and 2011 (Unaudited) and for the Years Ended September 30, 2011, 2010 and 2009 | F-5 | |||||
Consolidated Statements of Changes in Shareholders’ Equity for the Six Months Ended March 31, 2012 (Unaudited) and for Years Ended September 30, 2011, and 2010 and 2009 | F-6 | |||||
Consolidated Statements of Cash Flows for the Six Months Ended March 31, 2012 and 2011 (Unaudited) and for the Years Ended September 30, 2011, 2010 and 2009 | F-7 | |||||
Notes to Consolidated Financial Statements | F-9 |
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Malvern Federal Bancorp, Inc. and Subsidiaries
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December 20, 2011
March 31, | September 30, | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2012 | 2011 | 2010 | |||||||||||||
(Unaudited) | |||||||||||||||
(Dollars in thousands, except per share data) | |||||||||||||||
Assets | |||||||||||||||
Cash and due from depository institutions | $ | 1,304 | $ | 1,447 | $ | 1,564 | |||||||||
Interest earning deposits in depository institutions | 57,321 | 32,049 | 79,831 | ||||||||||||
Cash and Cash Equivalents | 58,625 | 33,496 | 81,395 | ||||||||||||
Investment securities available for sale, at fair value | 81,701 | 74,389 | 40,719 | ||||||||||||
Investment securities held to maturity (fair value of $746 (unaudited), $4,024 and $4,925, respectively) | 696 | 3,797 | 4,716 | ||||||||||||
Restricted stock, at cost | 4,827 | 5,349 | 6,567 | ||||||||||||
Loans receivable, net of allowance for loan losses of $8,076 (unaudited), $10,101 and $8,157, respectively | 467,028 | 506,019 | 547,323 | ||||||||||||
Other real estate owned | 4,743 | 8,321 | 5,315 | ||||||||||||
Accrued interest receivable | 1,632 | 1,897 | 2,113 | ||||||||||||
Property and equipment, net | 7,927 | 8,165 | 8,765 | ||||||||||||
Deferred income taxes, net | 6,930 | 7,465 | 4,462 | ||||||||||||
Bank-owned life insurance | 15,026 | 14,760 | 14,213 | ||||||||||||
Other assets | 2,469 | 2,910 | 4,918 | ||||||||||||
Total Assets | $ | 651,604 | $ | 666,568 | $ | 720,506 | |||||||||
Liabilities and Shareholders’ Equity | |||||||||||||||
Liabilities | |||||||||||||||
Deposits: | |||||||||||||||
Deposits-noninterest-bearing | $ | 21,413 | $ | 19,833 | $ | 18,503 | |||||||||
Deposits-interest-bearing | 515,616 | 534,622 | 578,355 | ||||||||||||
Total Deposits | 537,029 | 554,455 | 596,858 | ||||||||||||
FHLB advances | 48,593 | 49,098 | 55,334 | ||||||||||||
Advances from borrowers for taxes and insurance | 2,297 | 651 | 585 | ||||||||||||
Accrued interest payable | 246 | 233 | 267 | ||||||||||||
Other liabilities | 1,536 | 1,847 | 1,255 | ||||||||||||
Total Liabilities | 589,701 | 606,284 | 654,299 | ||||||||||||
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: 6,102,500 | 62 | 62 | 62 | ||||||||||||
Additional paid-in-capital | 25,861 | 25,889 | 25,912 | ||||||||||||
Retained earnings | 38,107 | 36,637 | 42,830 | ||||||||||||
Treasury stock-at cost, 50,000 shares | (477 | ) | (477 | ) | (477 | ) | |||||||||
Unearned Employee Stock Ownership Plan (ESOP) shares | (2,105 | ) | (2,178 | ) | (2,299 | ) | |||||||||
Accumulated other comprehensive income | 455 | 351 | 179 | ||||||||||||
Total Shareholders’ Equity | 61,903 | 60,284 | 66,207 | ||||||||||||
Total Liabilities and Shareholders’ Equity | $ | 651,604 | $ | 666,568 | $ | 720,506 |
Six Months Ended March 31, | Year Ended September 30, | ||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2012 | 2011 | 2011 | 2010 | 2009 | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||
(Dollars in thousands, except per share data) | |||||||||||||||||||||||
Interest and Dividend Income | |||||||||||||||||||||||
Loans, including fees | $ | 12,458 | $ | 14,364 | $ | 28,185 | $ | 32,085 | $ | 33,711 | |||||||||||||
Investment securities, taxable | 859 | 720 | 1,487 | 990 | 848 | ||||||||||||||||||
Investment securities, tax-exempt | 10 | 15 | 23 | 35 | 77 | ||||||||||||||||||
Dividends, restricted stock | 1 | — | — | — | — | ||||||||||||||||||
Interest-bearing cash accounts | 18 | 19 | 31 | 38 | 65 | ||||||||||||||||||
Total Interest and Dividend Income | 13,346 | 15,118 | 29,726 | 33,148 | 34,701 | ||||||||||||||||||
Interest Expense | |||||||||||||||||||||||
Deposits | 3,542 | 4,532 | 8,453 | 10,114 | 13,478 | ||||||||||||||||||
Short-term borrowings | — | — | — | 8 | — | ||||||||||||||||||
Long-term borrowings | 862 | 879 | 1,745 | 3,519 | 5,203 | ||||||||||||||||||
Total Interest Expense | 4,404 | 5,411 | 10,198 | 13,641 | 18,681 | ||||||||||||||||||
Net Interest Income | 8,942 | 9,707 | 19,528 | 19,507 | 16,020 | ||||||||||||||||||
Provision for Loan Losses | 25 | 10,042 | 12,392 | 9,367 | 2,280 | ||||||||||||||||||
Net Interest Income (Loss) after Provision for Loan Losses | 8,917 | (335 | ) | 7,136 | 10,140 | 13,740 | |||||||||||||||||
Other Income | |||||||||||||||||||||||
Service charges and other fees | 468 | 471 | 892 | 1,279 | 1,432 | ||||||||||||||||||
Rental income—other real estate owned | 399 | — | — | — | — | ||||||||||||||||||
Rental income—other | 133 | 130 | 267 | 254 | 255 | ||||||||||||||||||
Gain (loss) on sale of investments, net | 623 | — | — | (13 | ) | 29 | |||||||||||||||||
Gain on disposal of fixed assets | — | — | — | — | 8 | ||||||||||||||||||
(Loss) gain on sale of other real estate owned, net | (21 | ) | (7 | ) | 23 | (142 | ) | (225 | ) | ||||||||||||||
Earnings on bank-owned life insurance | 266 | 277 | 547 | 563 | 514 | ||||||||||||||||||
Total Other Income | 1,868 | 871 | 1,729 | 1,941 | 2,013 | ||||||||||||||||||
Other Expense | |||||||||||||||||||||||
Salaries and employee benefits | 3,312 | 3,157 | 6,397 | 6,396 | 6,444 | ||||||||||||||||||
Occupancy expense | 1,048 | 1,109 | 2,150 | 1,834 | 1,864 | ||||||||||||||||||
Federal deposit insurance premium | 453 | 703 | 1,141 | 1,391 | 770 | ||||||||||||||||||
Advertising | 422 | 425 | 737 | 736 | 674 | ||||||||||||||||||
Data processing | 620 | 562 | 1,132 | 1,464 | 1,212 | ||||||||||||||||||
Professional fees | 914 | 844 | 1,832 | 1,037 | 1,014 | ||||||||||||||||||
Other real estate owned expense | 1,013 | 1,233 | 3,209 | 2,302 | 532 | ||||||||||||||||||
Other operating expenses | 945 | 925 | 1,958 | 1,945 | 1,991 | ||||||||||||||||||
Total Other Expenses | 8,727 | 8,958 | 18,556 | 17,105 | 14,501 | ||||||||||||||||||
Income (Loss) before income tax expense (benefit) | 2,058 | (8,422 | ) | (9,691 | ) | (5,024 | ) | 1,252 | |||||||||||||||
Income tax expense (benefit) | 588 | (2,979 | ) | (3,579 | ) | (1,895 | ) | 242 | |||||||||||||||
Net Income (Loss) | $ | 1,470 | $ | (5,443 | ) | $ | (6,112 | ) | $ | (3,129 | ) | $ | 1,010 | ||||||||||
Basic Earnings (Loss) Per Share | $ | 0.25 | $ | (0.92 | ) | $ | (1.04 | ) | $ | (0.53 | ) | $ | 0.17 | ||||||||||
Dividends Declared Per Share | $ | 0.00 | $ | 0.03 | $ | 0.03 | $ | 0.12 | $ | 0.14 |
Six Months Ended March 31, | Year Ended September 30, | ||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2012 | 2011 | 2011 | 2010 | 2009 | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Net Income (Loss) | $ | 1,470 | $ | (5,443 | ) | $ | (6,112 | ) | $ | (3,129 | ) | $ | 1,010 | ||||||||||
Other Comprehensive Income (Loss): | |||||||||||||||||||||||
Changes in net unrealized gains (loss) on securities available for sale | 780 | (1,248 | ) | 260 | 226 | 513 | |||||||||||||||||
(Gains) losses realized in net income | (623 | ) | — | — | 13 | (29 | ) | ||||||||||||||||
157 | (1,248 | ) | 260 | 239 | 484 | ||||||||||||||||||
Deferred income tax effect | (53 | ) | 425 | (88 | ) | (81 | ) | (185 | ) | ||||||||||||||
Total other comprehensive income (loss) | 104 | (823 | ) | 172 | 158 | 299 | |||||||||||||||||
Total comprehensive income (loss) | $ | 1,574 | $ | (6,266 | ) | $ | (5,940 | ) | $ | (2,971 | ) | $ | 1,309 |
Common Stock | Additional Paid-In Capital | Retained Earnings | Treasury Stock | Unearned ESOP Shares | Accumulated Other Comprehensive Income (Loss) | Total Shareholders’ Equity | |||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(Dollars in thousands, except per share data) | |||||||||||||||||||||||||||||||
Balance, October 1, 2008 | $ | 62 | $ | 25,959 | $ | 45,663 | $ | — | $ | (2,571 | ) | $ | (278 | ) | $ | 68,835 | |||||||||||||||
Net Income | — | — | 1,010 | — | — | — | 1,010 | ||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | 299 | 299 | ||||||||||||||||||||||||
Treasury stock purchased (2,000 shares) | — | — | — | (19 | ) | — | — | (19 | ) | ||||||||||||||||||||||
Cash dividends declared ($0.14 per share) | — | — | (387 | ) | — | — | — | (387 | ) | ||||||||||||||||||||||
Committed to be released ESOP shares (13,404 shares) | — | (22 | ) | — | — | 126 | — | 104 | |||||||||||||||||||||||
Balance, September 30, 2009 | 62 | 25,937 | 46,286 | (19 | ) | (2,445 | ) | 21 | 69,842 | ||||||||||||||||||||||
Net Loss | — | — | (3,129 | ) | — | — | — | (3,129 | ) | ||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | 158 | 158 | ||||||||||||||||||||||||
Treasury stock purchased (48,000 shares) | — | — | — | (458 | ) | — | — | (458 | ) | ||||||||||||||||||||||
Cash dividends paid ($0.12 per share) | — | — | (327 | ) | — | — | — | (327 | ) | ||||||||||||||||||||||
Committed to be released ESOP shares (13,404 shares) | — | (25 | ) | — | — | 146 | — | 121 | |||||||||||||||||||||||
Balance, September 30, 2010 | 62 | 25,912 | 42,830 | (477 | ) | (2,299 | ) | 179 | 66,207 | ||||||||||||||||||||||
Net Loss | — | — | (6,112 | ) | — | — | — | (6,112 | ) | ||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | 172 | 172 | ||||||||||||||||||||||||
Cash dividends paid ($0.03 per share) | — | — | (81 | ) | — | — | — | (81 | ) | ||||||||||||||||||||||
Committed to be released ESOP shares (13,404 shares) | — | (23 | ) | — | — | 121 | — | 98 | |||||||||||||||||||||||
Balance, September 30, 2011 | 62 | 25,889 | 36,637 | (477 | ) | (2,178 | ) | 351 | 60,284 | ||||||||||||||||||||||
Net Income (unaudited) | — | — | 1,470 | — | — | — | 1,470 | ||||||||||||||||||||||||
Other comprehensive income (unaudited) | — | — | — | — | — | 104 | 104 | ||||||||||||||||||||||||
Committed to be released ESOP Shares (6,702 shares) (unaudited) | — | (28 | ) | — | — | 73 | — | 45 | |||||||||||||||||||||||
Balance, March 31, 2012 (Unaudited) | $ | 62 | $ | 25,861 | $ | 38,107 | $ | (477 | ) | $ | (2,105 | ) | $ | 455 | $ | 61,903 |
Six Months Ended March 31, | Year Ended September 30, | ||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2012 | 2011 | 2011 | 2010 | 2009 | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Cash Flows from Operating Activities | |||||||||||||||||||||||
Net income (loss) | $ | 1,470 | $ | (5,443 | ) | $ | (6,112 | ) | $ | (3,129 | ) | $ | 1,010 | ||||||||||
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities: | |||||||||||||||||||||||
Depreciation expense | 368 | 430 | 826 | 803 | 922 | ||||||||||||||||||
Provision for loan losses | 25 | 10,042 | 12,392 | 9,367 | 2,280 | ||||||||||||||||||
Deferred income taxes expense (benefit) | 481 | (3,012 | ) | (3,091 | ) | (2,212 | ) | (260 | ) | ||||||||||||||
ESOP expense | 45 | 34 | 98 | 121 | 104 | ||||||||||||||||||
Accretion of premiums and discounts on investments securities, net | (78 | ) | (63 | ) | (61 | ) | (107 | ) | (98 | ) | |||||||||||||
Amortization (accretion) amortization of mortgage servicing rights | 38 | (25 | ) | 6 | 158 | 142 | |||||||||||||||||
Net (gain) loss on sale of investment securities available for sale | (623 | ) | — | — | 13 | (29 | ) | ||||||||||||||||
Net gain on disposal of fixed assets | — | — | — | — | (8 | ) | |||||||||||||||||
Loss (gain) on sale of other real estate owned | 21 | 7 | (23 | ) | 142 | 225 | |||||||||||||||||
Write down of other real estate owned | 472 | 903 | 2,455 | 2,122 | 216 | ||||||||||||||||||
Decrease in accrued interest receivable | 265 | 24 | 216 | 113 | 227 | ||||||||||||||||||
Increase (decrease) in accrued interest payable | 13 | (36 | ) | (34 | ) | (440 | ) | (187 | ) | ||||||||||||||
(Decrease) increase in other liabilities | (311 | ) | 247 | 592 | (2,475 | ) | 2,850 | ||||||||||||||||
Earnings on bank-owned life insurance | (266 | ) | (277 | ) | (547 | ) | (563 | ) | (514 | ) | |||||||||||||
Decrease (increase) in other assets | 23 | 1,235 | 913 | (1,210 | ) | (564 | ) | ||||||||||||||||
Decrease (increase) in prepaid FDIC assessment | 433 | 674 | 1,087 | (2,089 | ) | (135 | ) | ||||||||||||||||
Amortization of loan origination fees and costs | (630 | ) | (556 | ) | (896 | ) | (964 | ) | (1,033 | ) | |||||||||||||
Net Cash Provided by (Used in) by Operating Activities | 1,746 | 4,184 | 7,821 | (350 | ) | 5,148 | |||||||||||||||||
Cash Flows from Investing Activities | |||||||||||||||||||||||
Proceeds from maturities and principal collections: | |||||||||||||||||||||||
Investment securities held to maturity | 3,108 | 714 | 949 | 153 | 370 | ||||||||||||||||||
Investment securities available for sale | 14,636 | 12,375 | 37,955 | 20,130 | 13,076 | ||||||||||||||||||
Proceeds from sales, investment securities available for sale | 18,954 | — | — | 192 | 1,150 | ||||||||||||||||||
Purchases of investment securities held to maturity | — | — | — | — | (2,370 | ) | |||||||||||||||||
Purchases of investment securities available for sale | (29,379 | ) | (45,009 | ) | (71,333 | ) | (33,636 | ) | (18,715 | ) | |||||||||||||
Loan purchases | (13,332 | ) | (9,796 | ) | (32,368 | ) | (21,359 | ) | (60,315 | ) | |||||||||||||
Loan originations and principal collections, net | 41,508 | 23,646 | 49,718 | 55,987 | 31,191 | ||||||||||||||||||
Proceeds from sale of other real estate owned | 3,834 | 3,955 | 7,022 | 1,506 | 538 | ||||||||||||||||||
Purchase of other real estate owned | — | — | — | — | (777 | ) | |||||||||||||||||
Additions to mortgage servicing rights | (53 | ) | — | — | — | — | |||||||||||||||||
Purchases of bank-owned life insurance | — | — | — | — | (5,000 | ) | |||||||||||||||||
Net decrease in restricted stock | 522 | 640 | 1,218 | — | 329 | ||||||||||||||||||
Purchases of property and equipment | (130 | ) | (175 | ) | (227 | ) | (1,185 | ) | (277 | ) | |||||||||||||
Net Cash Provided by (Used in) Investing Activities | 39,668 | (13,650 | ) | (7,066 | ) | 21,788 | (40,800 | ) |
Six Months Ended March 31, | Year Ended September 30, | ||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2012 | 2011 | 2011 | 2010 | 2009 | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Cash Flows from Financing Activities | |||||||||||||||||||||||
Net (decrease) increase in deposits | (17,426 | ) | (37,071 | ) | (42,403 | ) | 80,347 | 63,018 | |||||||||||||||
Net decrease in short-term borrowings | — | — | — | — | (8,500 | ) | |||||||||||||||||
Proceeds from long-term borrowings | — | — | — | 3,000 | 5,000 | ||||||||||||||||||
Repayment of long-term borrowings | (505 | ) | (5,735 | ) | (6,236 | ) | (47,287 | ) | (10,677 | ) | |||||||||||||
Increase (decrease) in advances from borrowers for taxes and insurance | 1,646 | 1,192 | 66 | (643 | ) | (352 | ) | ||||||||||||||||
Cash dividends paid | — | (81 | ) | (81 | ) | (327 | ) | (415 | ) | ||||||||||||||
Treasury stock purchased | — | — | — | (458 | ) | (19 | ) | ||||||||||||||||
Net Cash (Used in) Provided by Financing Activities | (16,285 | ) | (41,695 | ) | (48,654 | ) | 34,632 | 48,055 | |||||||||||||||
Net Increase (Decrease) in Cash and Cash Equivalents | 25,129 | (51,161 | ) | (47,899 | ) | 56,070 | 12,403 | ||||||||||||||||
Cash and Cash Equivalents—Beginning | 33,496 | 81,395 | 81,395 | 25,325 | 12,922 | ||||||||||||||||||
Cash and Cash Equivalents—Ending | $ | 58,625 | $ | 30,234 | $ | 33,496 | $ | 81,395 | $ | 25,325 | |||||||||||||
Supplementary Cash Flows Information | |||||||||||||||||||||||
Interest paid | $ | 4,391 | $ | 5,448 | $ | 10,232 | $ | 14,081 | $ | 18,869 | |||||||||||||
Income taxes paid | $ | — | $ | 4 | $ | 11 | $ | 1,485 | $ | 510 | |||||||||||||
Non-cash transfer of loans to other real estate owned | $ | 749 | $ | 4,980 | $ | 12,460 | $ | 3,210 | $ | 5,848 | |||||||||||||
Non-cash transfer of loans to investment securities available for sale | $ | 10,671 | — | — | — | — |
For the six months ended March 31, 2012 and 2011 (unaudited) and for the years ended
September 30, 2011, 2010 and 2009
accounts of Malvern Federal Bancorp, Inc. and its subsidiaries. All significant intercompany transactions and balances have been eliminated.
accumulated other comprehensive income (“AOCI”). Management determines the appropriate classification of investment securities at the time of purchase.
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.
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 and other 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. | The effect of external factors, such as competition and legal and regulatory requirements. |
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.
established carrying amount or fair value less cost to sell. Revenue and expenses from operations and changes in the valuation allowance are included in other expenses from other real estate owned.
2011, 2010, and 2009, respectively. There were no bonus matching contributions for the six months ended March 31, 2012 and fiscal years 2011 and 2010.
Six Months Ended March 31, | Year Ended September 30, | ||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2012 | 2011 | 2011 | 2010 | 2009 | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||
(Dollars in thousands, except per share data) | |||||||||||||||||||||||
Net Income (Loss) | $ | 1,470 | $ | (5,443 | ) | $ | (6,112 | ) | $ | (3,129 | ) | $ | 1,010 | ||||||||||
Weighted average shares outstanding | 6,102,500 | 6,102,500 | 6,102,500 | 6,107,495 | 6,152,418 | ||||||||||||||||||
Average unearned ESOP shares | (193,138 | ) | (206,556 | ) | (203,184 | ) | (216,590 | ) | (229,997 | ) | |||||||||||||
Weighted average shares outstanding—basic | 5,909,362 | 5,895,944 | 5,899,316 | 5,890,905 | 5,922,421 | ||||||||||||||||||
Earnings (Loss) per share—basic | $ | 0.25 | $ | (0.92 | ) | $ | (1.04 | ) | $ | (0.53 | ) | $ | 0.17 |
Bancorp, Inc. The ESOP loan is being repaid principally from the Bank’s contributions to the ESOP. The loan, which bears an interest rate of 5%, is being repaid in quarterly installments through 2026. Shares are released to participants proportionately as the loan is repaid. During the six months ended March 31, 2012 and 2011, there were 6,702 (unaudited) and 6,702 (unaudited) shares committed to be released, respectively. During the years ended September 30, 2011, 2010 and 2009, there were 13,404, 13,404, and 13,404 shares, respectively, committed to be released. At March 31, 2012, there were 189,798 (unaudited) unallocated shares held by the ESOP which had an aggregate fair value of approximately $1.5 million (unaudited). At September 30, 2011, there were 196,500 unallocated shares held by the ESOP which had an aggregate fair value of approximately $1.3 million.
March 31, 2012 | |||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||||||
(Unaudited) | |||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
U.S. government obligations | $ | 4,999 | $ | 6 | $ | — | $ | 5,005 | |||||||||||
U.S. government agencies | 22,872 | 135 | (30 | ) | 22,977 | ||||||||||||||
FHLB notes | 1,694 | 5 | — | 1,699 | |||||||||||||||
State and municipal obligations | 2,624 | 28 | (46 | ) | 2,606 | ||||||||||||||
Single issuer trust preferred security | 1,000 | — | (242 | ) | 758 | ||||||||||||||
Corporate debt securities | 1,502 | 30 | — | 1,532 | |||||||||||||||
34,691 | 204 | (318 | ) | 34,577 | |||||||||||||||
Mortgage-backed securities: | |||||||||||||||||||
FNMA: | |||||||||||||||||||
Adjustable-rate | 1,406 | 75 | — | 1,481 | |||||||||||||||
Fixed-rate | 697 | 47 | — | 744 | |||||||||||||||
FHLMC: | |||||||||||||||||||
Adjustable-rate | 556 | 23 | — | 579 | |||||||||||||||
GNMA, adjustable-rate | 140 | 3 | — | 143 | |||||||||||||||
CMO, fixed-rate | 43,522 | 655 | — | 44,177 | |||||||||||||||
46,321 | 803 | — | 47,124 | ||||||||||||||||
$ | 81,012 | $ | 1,007 | $ | (318 | ) | $ | 81,701 |
September 30, 2011 | |||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
U.S. government obligations | $ | 4,998 | $ | 12 | $ | — | $ | 5,010 | |||||||||||
U.S. government agencies | 23,874 | 98 | (26 | ) | 23,946 | ||||||||||||||
FHLB notes | 4,498 | 5 | (7 | ) | 4,496 | ||||||||||||||
State and municipal obligations | 952 | 31 | (20 | ) | 963 | ||||||||||||||
Single issuer trust preferred security | 1,000 | — | (210 | ) | 790 | ||||||||||||||
Corporate debt securities | 2,185 | 29 | — | 2,214 | |||||||||||||||
37,507 | 175 | (263 | ) | 37,419 | |||||||||||||||
Mortgage-backed securities: | |||||||||||||||||||
FNMA: | |||||||||||||||||||
Adjustable-rate | 2,500 | 135 | — | 2,635 | |||||||||||||||
Fixed-rate | 897 | 57 | — | 954 | |||||||||||||||
FHLMC: | |||||||||||||||||||
Adjustable-rate | 643 | 21 | — | 664 | |||||||||||||||
Fixed-rate | 325 | 27 | — | 352 | |||||||||||||||
GNMA, adjustable-rate | 147 | 4 | — | 151 | |||||||||||||||
CMO, fixed-rate | 31,838 | 425 | (49 | ) | 32,214 | ||||||||||||||
36,350 | 669 | (49 | ) | 36,970 | |||||||||||||||
$ | 73,857 | $ | 844 | $ | (312 | ) | $ | 74,389 |
September 30, 2010 | |||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
U.S. government obligations | $ | 4,997 | $ | — | $ | — | $ | 4,997 | |||||||||||
U.S. government agencies | 12,706 | 41 | (2 | ) | 12,745 | ||||||||||||||
FHLB notes | 2,999 | 10 | — | 3,009 | |||||||||||||||
State and municipal obligations | 1,199 | 26 | (18 | ) | 1,207 | ||||||||||||||
Single issuer trust preferred security | 1,000 | — | (241 | ) | 759 | ||||||||||||||
Corporate debt securities | 1,451 | 25 | (1 | ) | 1,475 | ||||||||||||||
24,352 | 102 | (262 | ) | 24,192 | |||||||||||||||
Mortgage-backed securities: | |||||||||||||||||||
FNMA: | |||||||||||||||||||
Adjustable-rate | 3,329 | 159 | — | 3,488 | |||||||||||||||
Fixed-rate | 1,479 | 60 | — | 1,539 | |||||||||||||||
FHLMC: | |||||||||||||||||||
Adjustable-rate | 849 | 24 | — | 873 | |||||||||||||||
Fixed-rate | 475 | 37 | — | 512 | |||||||||||||||
GNMA, adjustable-rate | 165 | 4 | — | 169 | |||||||||||||||
CMO, fixed-rate | 9,798 | 179 | (31 | ) | 9,946 | ||||||||||||||
16,095 | 463 | (31 | ) | 16,527 | |||||||||||||||
$ | 40,447 | $ | 565 | $ | (293 | ) | $ | 40,719 |
March 31, 2012 | |||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||||||
(Unaudited) | |||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Mortgage-backed securities: | |||||||||||||||||||
GNMA, adjustable-rate | $ | 214 | $ | 7 | $ | — | $ | 221 | |||||||||||
GNMA, fixed-rate | 1 | — | — | 1 | |||||||||||||||
FNMA, fixed-rate | 481 | 43 | — | 524 | |||||||||||||||
$ | 696 | $ | 50 | $ | — | $ | 746 |
September 30, 2011 | |||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Mortgage-backed securities: | |||||||||||||||||||
GNMA, adjustable-rate | $ | 231 | $ | 9 | $ | — | $ | 240 | |||||||||||
GNMA, fixed-rate | 1 | — | — | 1 | |||||||||||||||
FNMA, fixed-rate | 3,565 | 218 | — | 3,783 | |||||||||||||||
$ | 3,797 | $ | 227 | $ | — | $ | 4,024 |
September 30, 2010 | |||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Mortgage-backed securities: | |||||||||||||||||||
GNMA, adjustable-rate | $ | 265 | $ | 9 | $ | — | $ | 274 | |||||||||||
GNMA, fixed-rate | 1 | — | — | 1 | |||||||||||||||
FNMA, fixed-rate | 4,450 | 200 | — | 4,650 | |||||||||||||||
$ | 4,716 | $ | 209 | $ | — | $ | 4,925 |
March 31, 2012 | |||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Less than 12 Months | More than 12 Months | Total | |||||||||||||||||||||||||
Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||
Investment Securities Available for Sale: | |||||||||||||||||||||||||||
U.S. government agencies | $ | 3,970 | $ | (30 | ) | $ | — | $ | — | $ | 3,970 | $ | (30 | ) | |||||||||||||
State and municipal obligations | 964 | (46 | ) | — | — | 964 | (46 | ) | |||||||||||||||||||
Single issuer trust preferred security | — | — | 758 | (242 | ) | 758 | (242 | ) | |||||||||||||||||||
$ | 4,934 | $ | (76 | ) | $ | 758 | $ | (242 | ) | $ | 5,692 | $ | (318 | ) |
September 30, 2011 | |||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Less than 12 Months | More than 12 Months | Total | |||||||||||||||||||||||||
Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||
Investment Securities Available for Sale: | |||||||||||||||||||||||||||
U.S. government agencies | $ | 6,971 | $ | (26 | ) | $ | — | $ | — | $ | 6,971 | $ | (26 | ) | |||||||||||||
FHLB notes | 994 | (5 | ) | 997 | (2 | ) | 1,991 | (7 | ) | ||||||||||||||||||
State and municipal obligations | 20 | (20 | ) | — | — | 20 | (20 | ) | |||||||||||||||||||
Single issuer trust preferred security | — | — | 790 | (210 | ) | 790 | (210 | ) | |||||||||||||||||||
Mortgage-backed securities: | |||||||||||||||||||||||||||
CMO, fixed-rate | 6,077 | (49 | ) | — | — | 6,077 | (49 | ) | |||||||||||||||||||
$ | 14,062 | $ | (100 | ) | $ | 1,787 | $ | (212 | ) | $ | 15,849 | $ | (312 | ) |
September 30, 2010 | |||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Less than 12 Months | More than 12 Months | Total | |||||||||||||||||||||||||
Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||
Investment Securities Available for Sale: | |||||||||||||||||||||||||||
U.S. government agencies | $ | 1,996 | $ | (2 | ) | $ | — | $ | — | $ | 1,996 | $ | (2 | ) | |||||||||||||
State and municipal obligations | — | — | 27 | (18 | ) | 27 | (18 | ) | |||||||||||||||||||
Single issuer trust preferred security | — | — | 759 | (241 | ) | 759 | (241 | ) | |||||||||||||||||||
Corporate debt security | 499 | (1 | ) | — | — | 499 | (1 | ) | |||||||||||||||||||
Mortgage-backed securities: | |||||||||||||||||||||||||||
CMO, fixed-rate | 967 | (31 | ) | — | — | 967 | (31 | ) | |||||||||||||||||||
$ | 3,462 | $ | (34 | ) | $ | 786 | $ | (259 | ) | $ | 4,248 | $ | (293 | ) |
March 31, 2012 | |||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Available for Sale | Held to Maturity | ||||||||||||||||||
Amortized Cost | Fair Value | Amortized Cost | Fair Value | ||||||||||||||||
(Unaudited) | |||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Within 1 year | $ | 18,682 | $ | 18,493 | $ | — | $ | — | |||||||||||
Over 1 year through 5 years | 9,199 | 9,349 | — | — | |||||||||||||||
After 5 years through 10 years | 5,345 | 5,295 | — | — | |||||||||||||||
Over 10 years | 1,465 | 1,440 | — | — | |||||||||||||||
34,691 | 34,577 | — | — | ||||||||||||||||
Mortgage-backed securities | 46,321 | 47,124 | 696 | 746 | |||||||||||||||
$ | 81,012 | $ | 81,701 | $ | 696 | $ | 746 |
September 30, 2011 | |||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Available for Sale | Held to Maturity | ||||||||||||||||||
Amortized Cost | Fair Value | Amortized Cost | Fair Value | ||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Within 1 year | $ | 23,316 | $ | 23,161 | $ | — | $ | — | |||||||||||
Over 1 year through 5 years | 13,197 | 13,286 | — | — | |||||||||||||||
After 5 years through 10 years | (5 | ) | (25 | ) | — | — | |||||||||||||
Over 10 years | 999 | 997 | — | — | |||||||||||||||
37,507 | 37,419 | — | — | ||||||||||||||||
Mortgage-backed securities | 36,350 | 36,970 | 3,797 | 4,024 | |||||||||||||||
$ | 73,857 | $ | 74,389 | $ | 3,797 | $ | 4,024 |
September 30, | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
March 31, 2012 | 2011 | 2010 | |||||||||||||
(Unaudited) | |||||||||||||||
(Dollars in thousands) | |||||||||||||||
Residential mortgage | $ | 220,211 | $ | 229,330 | $ | 230,966 | |||||||||
Construction and Development: | |||||||||||||||
Residential and commercial | 21,846 | 26,005 | 30,429 | ||||||||||||
Land | 632 | 2,722 | 2,989 | ||||||||||||
Total Construction and Development | 22,478 | 28,727 | 33,418 | ||||||||||||
Commercial: | |||||||||||||||
Commercial real estate | 122,096 | 131,225 | 143,095 | ||||||||||||
Multi-family | 5,370 | 5,507 | 6,493 | ||||||||||||
Other | 8,735 | 10,992 | 11,398 | ||||||||||||
Total Commercial | 136,201 | 147,724 | 160,986 | ||||||||||||
Consumer: | |||||||||||||||
Home equity lines of credit | 20,667 | 20,735 | 19,927 | ||||||||||||
Second mortgages | 72,188 | 85,881 | 105,825 | ||||||||||||
Other | 821 | 788 | 1,086 | ||||||||||||
Total Consumer | 93,676 | 107,404 | 126,838 | ||||||||||||
Total loans | 472,566 | 513,185 | 552,208 | ||||||||||||
Deferred loan cost, net | 2,538 | 2,935 | 3,272 | ||||||||||||
Allowance for loan losses | (8,076 | ) | (10,101 | ) | (8,157 | ) | |||||||||
Total loans receivable, net | $ | 467,028 | $ | 506,019 | $ | 547,323 |
Six Months Ended March 31, | Year Ended September 30, | ||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2012 | 2011 | 2011 | 2010 | 2009 | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Beginning balance | $ | 10,101 | $ | 8,157 | $ | 8,157 | $ | 5,718 | $ | 5,505 | |||||||||||||
Provision for loan losses | 25 | 10,042 | 12,392 | 9,367 | 2,280 | ||||||||||||||||||
Charge-offs | (3,268 | ) | (7,864 | ) | (10,550 | ) | (6,933 | ) | (2,097 | ) | |||||||||||||
Recoveries | 1,218 | 31 | 102 | 5 | 30 | ||||||||||||||||||
Balance at end of year | $ | 8,076 | $ | 10,366 | $ | 10,101 | $ | 8,157 | $ | 5,718 |
March 31, 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 | |||||||||||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||||||||||||||||||||
(Dollars 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 | (975 | ) | (412 | ) | — | (855 | ) | — | (88 | ) | (51 | ) | (865 | ) | (22 | ) | — | (3,268 | ) | ||||||||||||||||||||||||||||
Recoveries | — | 1,139 | — | — | — | 2 | — | 75 | 2 | — | 1,218 | ||||||||||||||||||||||||||||||||||||
Provision | 827 | (1,535 | ) | (38 | ) | 488 | (12 | ) | (13 | ) | 8 | 205 | 21 | 74 | 25 | ||||||||||||||||||||||||||||||||
Ending Balance | $ | 1,310 | $ | 819 | $ | 11 | $ | 3,809 | $ | 37 | $ | 218 | $ | 177 | $ | 1,569 | $ | 17 | $ | 109 | $ | 8,076 | |||||||||||||||||||||||||
Ending balance: individually evaluated for impairment | $ | 1 | $ | 29 | $ | — | $ | 443 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 473 | |||||||||||||||||||||||||
Ending balance: collectively evaluated for impairment | $ | 1,309 | $ | 790 | $ | 11 | $ | 3,366 | $ | 37 | $ | 218 | $ | 177 | $ | 1,569 | $ | 17 | $ | 109 | $ | 7,603 | |||||||||||||||||||||||||
Loans receivable: | |||||||||||||||||||||||||||||||||||||||||||||||
Ending balance | $ | 220,211 | $ | 21,846 | $ | 632 | $ | 122,096 | $ | 5,370 | $ | 8,735 | $ | 20,667 | $ | 72,188 | $ | 821 | $ | 472,566 | |||||||||||||||||||||||||||
Ending balance: individually evaluated for impairment | $ | 3,346 | $ | 3,211 | $ | — | $ | 6,072 | $ | — | $ | 176 | $ | 22 | $ | 669 | $ | — | $ | 13,496 | |||||||||||||||||||||||||||
Ending balance: collectively evaluated for impairment | $ | 216,865 | $ | 18,635 | $ | 632 | $ | 116,024 | $ | 5,370 | $ | 8,559 | $ | 20,645 | $ | 71,519 | $ | 821 | $ | 459,070 |
September 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
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 | |||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
Allowance for loan losses: | �� | ||||||||||||||||||||||||||||||||||||||||||||||
Beginning balance | $ | 1,555 | $ | 689 | $ | 63 | $ | 2,741 | $ | 191 | $ | 303 | $ | 284 | $ | 2,264 | $ | 22 | $ | 45 | $ | 8,157 | |||||||||||||||||||||||||
Charge-offs | (2,478 | ) | (1,307 | ) | — | (2,460 | ) | (164 | ) | (278 | ) | (166 | ) | (3,691 | ) | (6 | ) | — | (10,550 | ) | |||||||||||||||||||||||||||
Recoveries | 1 | — | — | 1 | 1 | 5 | 3 | 82 | 9 | — | 102 | ||||||||||||||||||||||||||||||||||||
Provision | 2,380 | 2,245 | (14 | ) | 3,894 | 21 | 287 | 99 | 3,499 | (9 | ) | (10 | ) | 12,392 | |||||||||||||||||||||||||||||||||
Ending Balance | $ | 1,458 | $ | 1,627 | $ | 49 | $ | 4,176 | $ | 49 | $ | 317 | $ | 220 | $ | 2,154 | $ | 16 | $ | 35 | $ | 10,101 | |||||||||||||||||||||||||
Ending balance: individually evaluated for impairment | $ | 296 | $ | 870 | $ | — | $ | 751 | $ | — | $ | 20 | $ | 61 | $ | 356 | $ | — | $ | — | $ | 2,354 | |||||||||||||||||||||||||
Ending balance: collectively evaluated for impairment | $ | 1,162 | $ | 757 | $ | 49 | $ | 3,425 | $ | 49 | $ | 297 | $ | 159 | $ | 1,798 | $ | 16 | $ | 35 | $ | 7,747 | |||||||||||||||||||||||||
Loans receivable: | |||||||||||||||||||||||||||||||||||||||||||||||
Ending balance | $ | 229,330 | $ | 26,005 | $ | 2,722 | $ | 131,225 | $ | 5,507 | $ | 10,992 | $ | 20,735 | $ | 85,881 | $ | 788 | $ | 513,185 | |||||||||||||||||||||||||||
Ending balance: individually evaluated for impairment | $ | 1,651 | $ | 5,201 | $ | — | $ | 6,996 | $ | — | $ | 195 | $ | 60 | $ | 757 | $ | — | $ | 14,860 | |||||||||||||||||||||||||||
Ending balance: collectively evaluated for impairment | $ | 227,679 | $ | 20,804 | $ | 2,722 | $ | 124,229 | $ | 5,507 | $ | 10,797 | $ | 20,675 | $ | 85,124 | $ | 788 | $ | 498,325 |
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 | |||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
March 31, 2012 (unaudited): | |||||||||||||||||||||||
Residential mortgage | $ | 883 | $ | 1 | $ | 2,463 | $ | 3,346 | $ | 5,243 | |||||||||||||
Construction and Development: | |||||||||||||||||||||||
Residential and commercial | 1,059 | 29 | 2,152 | 3,211 | 4,822 | ||||||||||||||||||
Commercial: | |||||||||||||||||||||||
Commercial real estate | 3,672 | 443 | 2,400 | 6,072 | 6,498 | ||||||||||||||||||
Other | — | — | 176 | 176 | 176 | ||||||||||||||||||
Consumer: | |||||||||||||||||||||||
Home equity lines of credit | — | — | 22 | 22 | 37 | ||||||||||||||||||
Second mortgages | — | — | 669 | 669 | 841 | ||||||||||||||||||
Total impaired loans | $ | 5,614 | $ | 473 | $ | 7,882 | $ | 13,496 | $ | 17,617 | |||||||||||||
September 30, 2011: | |||||||||||||||||||||||
Residential mortgage | $ | 1,627 | $ | 296 | $ | 24 | $ | 1,651 | $ | 2,813 | |||||||||||||
Construction and Development: | |||||||||||||||||||||||
Residential and commercial | 2,033 | 870 | 3,168 | 5,201 | 9,306 | ||||||||||||||||||
Commercial: | |||||||||||||||||||||||
Commercial real estate | 5,005 | 751 | 1,991 | 6,996 | 9,999 | ||||||||||||||||||
Other | 20 | 20 | 175 | 195 | 195 | ||||||||||||||||||
Consumer: | |||||||||||||||||||||||
Home equity lines of credit | 60 | 61 | — | 60 | 60 | ||||||||||||||||||
Second mortgages | 440 | 356 | 317 | 757 | 757 | ||||||||||||||||||
Total impaired loans | $ | 9,185 | $ | 2,354 | $ | 5,675 | $ | 14,860 | $ | 23,130 | |||||||||||||
September 30, 2010: | |||||||||||||||||||||||
Residential mortgage | $ | 2,356 | $ | 865 | $ | — | $ | 2,356 | $ | 2,356 | |||||||||||||
Construction and Development: | |||||||||||||||||||||||
Residential and commercial | 1,393 | 111 | — | 1,393 | 1,393 | ||||||||||||||||||
Commercial: | |||||||||||||||||||||||
Commercial real estate | 6,392 | 650 | 1,213 | 7,605 | 7,605 | ||||||||||||||||||
Multi-family | 1,093 | 164 | — | 1,093 | 1,093 | ||||||||||||||||||
Consumer: | |||||||||||||||||||||||
Home equity lines of credit | 189 | 136 | — | 189 | 189 | ||||||||||||||||||
Second mortgages | 2,391 | 1,141 | 1,010 | 3,401 | 3,401 | ||||||||||||||||||
Total impaired loans | $ | 13,814 | $ | 3,067 | $ | 2,223 | $ | 16,037 | $ | 16,037 |
Average Impaired Loans | Interest Income Recognized on Impaired Loans | Cash Basis Collection on Impaired Loans | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(Unaudited) | |||||||||||||||
(Dollars in thousands) | |||||||||||||||
Six Months Ended March 31, 2012: | |||||||||||||||
Residential mortgage | $ | 1,756 | $ | 24 | $ | 44 | |||||||||
Construction and development: | |||||||||||||||
Residential and commercial | 3,297 | — | 220 | ||||||||||||
Commercial: | |||||||||||||||
Commercial real estate | 6,914 | 150 | 179 | ||||||||||||
Other | 184 | 3 | 3 | ||||||||||||
Consumer: | |||||||||||||||
Home equity lines of credit | 29 | — | — | ||||||||||||
Second mortgages | 572 | 2 | 4 | ||||||||||||
Other | 3 | — | — | ||||||||||||
Total | $ | 12,755 | $ | 179 | $ | 450 | |||||||||
Six Months Ended March 31, 2011: | |||||||||||||||
Residential mortgage | $ | 2,361 | $ | — | $ | — | |||||||||
Construction and development: | |||||||||||||||
Residential and commercial | 1,381 | — | 35 | ||||||||||||
Commercial: | |||||||||||||||
Commercial real estate | 8,010 | 281 | 372 | ||||||||||||
Multi-family | 276 | — | — | ||||||||||||
Other | 1 | — | 1 | ||||||||||||
Consumer: | |||||||||||||||
Home equity lines of credit | 158 | — | — | ||||||||||||
Second mortgages | 1,586 | — | — | ||||||||||||
Total | $ | 13,773 | $ | 281 | $ | 408 |
Average Impaired Loans | Interest Income Recognized on Impaired Loans | Cash Basis Collection on Impaired Loans | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(Dollars in thousands) | |||||||||||||||
Year Ended September 30, 2011: | |||||||||||||||
Residential mortgage | $ | 1,978 | $ | 8 | $ | 126 | |||||||||
Construction and development: | |||||||||||||||
Residential and commercial | 2,386 | 136 | 1,805 | ||||||||||||
Commercial: | |||||||||||||||
Commercial real estate | 8,736 | 369 | 451 | ||||||||||||
Multi-family | 138 | — | — | ||||||||||||
Other | 32 | 7 | 7 | ||||||||||||
Consumer: | |||||||||||||||
Home equity lines of credit | 102 | 4 | 13 | ||||||||||||
Second mortgages | 1,009 | 25 | 42 | ||||||||||||
Total | $ | 14,381 | $ | 549 | $ | 2,444 | |||||||||
Year Ended September 30, 2010: | |||||||||||||||
Residential mortgage | $ | 1,673 | $ | 22 | $ | 83 | |||||||||
Construction and development: | |||||||||||||||
Residential and commercial | 3,963 | — | 286 | ||||||||||||
Commercial: | |||||||||||||||
Commercial real estate | 4,954 | 265 | 257 | ||||||||||||
Multi-family | 1,085 | 32 | 41 | ||||||||||||
Other | 419 | — | — | ||||||||||||
Consumer: | |||||||||||||||
Home equity lines of credit | 238 | 1 | 1 | ||||||||||||
Second mortgage | 1,891 | 42 | 47 | ||||||||||||
Other | 1 | — | — | ||||||||||||
Total | $ | 14,224 | $ | 362 | $ | 715 | |||||||||
Year Ended September 30, 2009: | |||||||||||||||
Residential mortgage | $ | 3,789 | $ | 234 | $ | 217 | |||||||||
Construction and development: | |||||||||||||||
Residential and commercial | 7,199 | 231 | 527 | ||||||||||||
Commercial: | |||||||||||||||
Commercial real estate | 785 | 56 | 6 | ||||||||||||
Other | 36 | 2 | 3 | ||||||||||||
Consumer: | |||||||||||||||
Home equity lines of credit | 407 | 19 | 10 | ||||||||||||
Second mortgage | 2,069 | 156 | 97 | ||||||||||||
Other | 1 | — | — | ||||||||||||
Total | $ | 14,286 | $ | 698 | $ | 860 |
March 31, 2012 | |||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Pass | Special Mention | Substandard | Doubtful | Total | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Residential mortgage | $ | 214,351 | $ | 251 | $ | 5,609 | $ | — | $ | 220,211 | |||||||||||||
Construction and Development: | |||||||||||||||||||||||
Residential and commercial | 13,354 | 3,218 | 5,274 | — | 21,846 | ||||||||||||||||||
Land | — | 632 | — | — | 632 | ||||||||||||||||||
Commercial: | |||||||||||||||||||||||
Commercial real estate | 100,961 | 5,678 | 15,014 | 443 | 122,096 | ||||||||||||||||||
Multi-family | 4,782 | 588 | — | — | 5,370 | ||||||||||||||||||
Other | 7,065 | 900 | 770 | — | 8,735 | ||||||||||||||||||
Consumer: | |||||||||||||||||||||||
Home equity lines of credit | 20,457 | — | 210 | — | 20,667 | ||||||||||||||||||
Second mortgages | 70,608 | — | 1,580 | — | 72,188 | ||||||||||||||||||
Other | 821 | — | — | — | 821 | ||||||||||||||||||
Total | $ | 432,399 | $ | 11,267 | $ | 28,457 | $ | 443 | $ | 472,566 |
September 30, 2011 | |||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Pass | Special Mention | Substandard | Doubtful | Total | |||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Residential mortgage | $ | 225,498 | $ | 197 | $ | 3,635 | $ | — | $ | 229,330 | |||||||||||||
Construction and Development: | |||||||||||||||||||||||
Residential and commercial | 15,514 | 2,579 | 7,042 | 870 | 26,005 | ||||||||||||||||||
Land | 662 | 900 | 1,160 | — | 2,722 | ||||||||||||||||||
Commercial: | |||||||||||||||||||||||
Commercial real estate | 108,267 | 6,645 | 16,088 | 225 | 131,225 | ||||||||||||||||||
Multi-family | 4,910 | — | 597 | — | 5,507 | ||||||||||||||||||
Other | 9,190 | 1,004 | 798 | — | 10,992 | ||||||||||||||||||
Consumer: | |||||||||||||||||||||||
Home equity lines of credit | 20,621 | 16 | 98 | — | 20,735 | ||||||||||||||||||
Second mortgages | 82,425 | 1,335 | 2,121 | — | 85,881 | ||||||||||||||||||
Other | 779 | 9 | — | — | 788 | ||||||||||||||||||
Total | $ | 467,866 | $ | 12,685 | $ | 31,539 | $ | 1,095 | $ | 513,185 |
September 30, | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
March 31, 2012 | 2011 | 2010 | |||||||||||||
(Unaudited) | |||||||||||||||
(Dollars in thousands) | |||||||||||||||
Non-accrual loans: | |||||||||||||||
Residential mortgage | $ | 4,425 | $ | 2,866 | $ | 8,354 | |||||||||
Construction and Development: | |||||||||||||||
Residential and commercial | 3,210 | 6,617 | 1,393 | ||||||||||||
Commercial: | |||||||||||||||
Commercial real estate | 2,822 | 1,765 | 4,476 | ||||||||||||
Multi-family | — | — | 1,093 | ||||||||||||
Other | 201 | 229 | — | ||||||||||||
Consumer: | |||||||||||||||
Home equity lines of credit | 43 | 61 | 457 | ||||||||||||
Second mortgages | 1,029 | 1,377 | 4,085 | ||||||||||||
Other | — | — | 3 | ||||||||||||
Total non-accrual loans | $ | 11,730 | $ | 12,915 | $ | 19,861 |
Current | 30–59 Days Past Due | 60–89 Days Past Due | Greater Than 90 Days Past Due | Total Past Due | Total Loans Receivable | ||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(Dollars in thousands) | |||||||||||||||||||||||||||
March 31, 2012 (unaudited): | |||||||||||||||||||||||||||
Residential mortgage | $ | 214,802 | $ | 546 | $ | 438 | $ | 4,425 | $ | 5,409 | $ | 220,211 | |||||||||||||||
Construction and Development: | |||||||||||||||||||||||||||
Residential and commercial | 18,636 | — | — | 3,210 | 3,210 | 21,846 | |||||||||||||||||||||
Land | 632 | — | — | — | — | 632 | |||||||||||||||||||||
Commercial: | |||||||||||||||||||||||||||
Commercial real estate | 118,838 | — | 436 | 2,822 | 3,258 | 122,096 | |||||||||||||||||||||
Multi-family | 5,370 | — | — | — | — | 5,370 | |||||||||||||||||||||
Other | 8,534 | — | — | 201 | 201 | 8,735 | |||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||
Home equity lines of credit | 20,624 | — | — | 43 | 43 | 20,667 | |||||||||||||||||||||
Second mortgages | 69,688 | 1,058 | 413 | 1,029 | 2,500 | 72,188 | |||||||||||||||||||||
Other | 821 | — | — | — | — | 821 | |||||||||||||||||||||
Total | $ | 457,945 | $ | 1,604 | $ | 1,287 | $ | 11,730 | $ | 14,621 | $ | 472,566 |
Current | 30–59 Days Past Due | 60–89 Days Past Due | Greater Than 90 Days Past Due | Total Past Due | Total Loans Receivable | ||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(Dollars in thousands) | |||||||||||||||||||||||||||
September 30, 2011: | |||||||||||||||||||||||||||
Residential mortgage | $ | 225,705 | $ | 341 | $ | 418 | $ | 2,866 | $ | 3,625 | $ | 229,330 | |||||||||||||||
Construction and Development: | |||||||||||||||||||||||||||
Residential and commercial | 19,388 | — | — | 6,617 | 6,617 | 26,005 | |||||||||||||||||||||
Land | 2,722 | — | — | — | — | 2,722 | |||||||||||||||||||||
Commercial: | |||||||||||||||||||||||||||
Commercial real estate | 129,265 | — | 195 | 1,765 | 1,960 | 131,225 | |||||||||||||||||||||
Multi-family | 5,507 | — | — | — | — | 5,507 | |||||||||||||||||||||
Other | 10,741 | 22 | — | 229 | 251 | 10,992 | |||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||
Home equity lines of credit | 20,658 | — | 16 | 61 | 77 | 20,735 | |||||||||||||||||||||
Second mortgages | 82,803 | 1,074 | 627 | 1,377 | 3,078 | 85,881 | |||||||||||||||||||||
Other | 772 | — | 16 | — | 16 | 788 | |||||||||||||||||||||
Total | $ | 497,561 | $ | 1,437 | $ | 1,272 | $ | 12,915 | $ | 15,624 | $ | 513,185 | |||||||||||||||
September 30, 2010: | |||||||||||||||||||||||||||
Residential mortgage | $ | 220,934 | $ | 1,004 | $ | 674 | $ | 8,354 | $ | 10,032 | $ | 230,966 | |||||||||||||||
Construction and Development: | |||||||||||||||||||||||||||
Residential and commercial | 29,036 | — | — | 1,393 | 1,393 | 30,429 | |||||||||||||||||||||
Land | 2,989 | — | — | — | — | 2,989 | |||||||||||||||||||||
Commercial: | |||||||||||||||||||||||||||
Commercial real estate | 137,843 | 776 | — | 4,476 | 5,252 | 143,095 | |||||||||||||||||||||
Multi-family | 5,400 | — | — | 1,093 | 1,093 | 6,493 | |||||||||||||||||||||
Other | 11,189 | — | 209 | — | 209 | 11,398 | |||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||
Home equity lines of credit | 19,433 | 37 | — | 457 | 494 | 19,927 | |||||||||||||||||||||
Second mortgages | 100,132 | 1,122 | 486 | 4,085 | 5,693 | 105,825 | |||||||||||||||||||||
Other | 1,080 | 2 | 1 | 3 | 6 | 1,086 | |||||||||||||||||||||
Total | $ | 528,036 | $ | 2,941 | $ | 1,370 | $ | 19,861 | $ | 24,172 | $ | 552,208 |
For the Six Months Ended March 31, 2012 | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Restructured Current Period | |||||||||||||||
Number of Contracts | Pre-Modifications Outstanding Recorded Investments | Post-Modifications Outstanding Recorded Investments | |||||||||||||
(Unaudited) | |||||||||||||||
(Dollars in thousands) | |||||||||||||||
Troubled Debt Restructurings: | |||||||||||||||
Construction and Development: | |||||||||||||||
Residential and commercial | 2 | $ | 1,810 | $ | 1,594 | ||||||||||
Total troubled debt restructurings | 2 | $ | 1,810 | $ | 1,594 |
September 30, | |||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2011 | 2010 | ||||||||||||||||||||||||||
Number of Contracts | Pre-Modifications Outstanding Recorded Investments | Post- Modifications Outstanding Recorded Investments | Number of Contracts | Pre-Modifications Outstanding Recorded Investments | Post- Modifications Outstanding Recorded Investments | ||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||
Troubled Debt Restructurings: | |||||||||||||||||||||||||||
Residential mortgage | 4 | $ | 1,061 | $ | 1,049 | 16 | $ | 2,279 | $ | 2,277 | |||||||||||||||||
Construction and Development: | |||||||||||||||||||||||||||
Land loans | 2 | 1,169 | 1,160 | 2 | 1,170 | 1,170 | |||||||||||||||||||||
Commercial: | |||||||||||||||||||||||||||
Commercial real estate | 7 | 7,986 | 7,919 | 5 | 7,742 | 7,742 | |||||||||||||||||||||
Multi-family | — | — | — | 1 | 612 | 612 | |||||||||||||||||||||
Other | 1 | 175 | 175 | 1 | 175 | 175 | |||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||
Home equity lines of credit | 1 | 37 | 37 | — | — | — | |||||||||||||||||||||
Total troubled debt restructurings | 15 | $ | 10,428 | $ | 10,340 | 25 | $ | 11,978 | $ | 11,976 |
Year Ended September 30, | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Six Months Ended March 31, 2012 | 2011 | 2010 | |||||||||||||
(Unaudited) | |||||||||||||||
(Dollars in thousands) | |||||||||||||||
Balance at beginning of year | $ | 617 | $ | 1,160 | $ | 1,196 | |||||||||
New loans | 197 | — | — | ||||||||||||
Repayments | (322 | ) | (543 | ) | (36 | ) | |||||||||
Balance at end of year | $ | 492 | $ | 617 | $ | 1,160 |
Six Months Ended March 31, | Year Ended September 30, | ||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2012 | 2011 | 2011 | 2010 | 2009 | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Balance at beginning of year | $ | 128 | $ | 134 | $ | 134 | $ | 292 | $ | 434 | |||||||||||||
Amortization | (38 | ) | 24 | (6 | ) | (158 | ) | (83 | ) | ||||||||||||||
Addition | 53 | — | — | — | (59 | ) | |||||||||||||||||
Balance at end of year | $ | 143 | $ | 158 | $ | 128 | $ | 134 | $ | 292 |
September 30, | |||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Estimated Useful Life (years) | March 31, 2012 | 2011 | 2010 | ||||||||||||||||
(Unaudited) | |||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Land | — | $ | 711 | $ | 711 | $ | 711 | ||||||||||||
Building and improvements | 10–39 | 11,322 | 11,289 | 12,272 | |||||||||||||||
Construction in process | — | — | 5 | 23 | |||||||||||||||
Furniture, fixtures and equipment | 3–7 | 3,760 | 3,659 | 6,650 | |||||||||||||||
15,793 | 15,664 | 19,656 | |||||||||||||||||
Accumulated depreciation | (7,866 | ) | (7,499 | ) | (10,891 | ) | |||||||||||||
$ | 7,927 | $ | 8,165 | $ | 8,765 |
September 30, | |||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
March 31, 2012 | 2011 | 2010 | |||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||
Balances by interest rate: | |||||||||||||||||||||||||||
Tiered passbooks (0.05% to 0.15%) | $ | 27,240 | 5.07 | % | $ | 26,710 | 4.82 | % | $ | 25,479 | 4.27 | % | |||||||||||||||
Regular passbooks (0.05% to 0.10%) | 19,756 | 3.68 | 18,357 | 3.31 | 16,906 | 2.83 | |||||||||||||||||||||
Money market accounts (0.20% to 0.65%) | 79,248 | 14.76 | 86,315 | 15.57 | 80,980 | 13.57 | |||||||||||||||||||||
Checking and NOW accounts (0.05% to 0.50%) | 95,088 | 17.70 | 88,722 | 16.00 | 83,365 | 13.97 | |||||||||||||||||||||
Non-Interest bearing demand | 21,413 | 3.99 | 19,833 | 3.58 | 18,503 | 3.10 | |||||||||||||||||||||
242,745 | 45.20 | 239,937 | 43.28 | 225,233 | 37.74 | ||||||||||||||||||||||
Certificate accounts: | |||||||||||||||||||||||||||
0% to 0.99% | 52,517 | 9.78 | 39,591 | 7.14 | 24,241 | 4.06 | |||||||||||||||||||||
1% to 1.99% | 84,789 | 15.79 | 93,216 | 16.81 | 129,999 | 21.78 | |||||||||||||||||||||
2% to 2.99% | 111,289 | 20.72 | 130,983 | 23.62 | 119,666 | 20.05 | |||||||||||||||||||||
3% to 3.99% | 37,183 | 6.93 | 41,656 | 7.51 | 52,865 | 8.86 | |||||||||||||||||||||
4% to 4.99% | 7,360 | 1.37 | 7,934 | 1.43 | 43,187 | 7.23 | |||||||||||||||||||||
5% to 5.99% | 1,146 | 0.21 | 1,138 | 0.21 | 1,667 | 0.28 | |||||||||||||||||||||
294,284 | 54.80 | 314,518 | 56.72 | 371,625 | 62.26 | ||||||||||||||||||||||
Total | $ | 537,029 | 100.00 | % | $ | 554,455 | 100.00 | % | $ | 596,858 | 100.00 | % |
Six Months Ended March 31, | Year Ended September 30, | ||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2012 | 2011 | 2011 | 2010 | 2009 | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Savings accounts | $ | 24 | $ | 38 | $ | 78 | $ | 110 | $ | 136 | |||||||||||||
Checking and NOW accounts | 149 | 298 | 519 | 845 | 1,321 | ||||||||||||||||||
Money market accounts | 285 | 480 | 915 | 648 | 960 | ||||||||||||||||||
Certificates of deposit | 3,084 | 3,716 | 6,941 | 8,511 | 11,061 | ||||||||||||||||||
Total deposits | $ | 3,542 | $ | 4,532 | $ | 8,453 | $ | 10,114 | $ | 13,478 |
March 31, 2012 | September 30, 2011 | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
(Unaudited) | |||||||||||
Maturing | (Dollars in thousands) | ||||||||||
One year or less | $ | 113,061 | $ | 97,525 | |||||||
After one year to two years | 64,112 | 102,380 | |||||||||
After two years to three years | 40,654 | 31,298 | |||||||||
After three years to four years | 19,792 | 27,524 | |||||||||
After four years to five years | 20,333 | 12,423 | |||||||||
After five years | 36,332 | 43,368 | |||||||||
$ | 294,284 | $ | 314,518 |
Weighted Average Rate | 2012 | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
(Unaudited) | |||||||||||
(Dollars in thousands) | |||||||||||
Due by March 31: | |||||||||||
2013 | 0.72 | % | $ | 593 | |||||||
2014 | — | — | |||||||||
2015 | — | — | |||||||||
2016 | — | — | |||||||||
2017 | — | — | |||||||||
Thereafter | 1.78 | 48,000 | |||||||||
Total FHLB Advances | 1.76 | % | $ | 48,593 |
Weighted Average Rate | 2011 | 2010 | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(Dollars in thousands) | |||||||||||||||
Due by September 30: | |||||||||||||||
2011 | — | % | $ | — | $ | 5,237 | |||||||||
2012 | — | — | — | ||||||||||||
2013 | 1.43 | 1,098 | 2,097 | ||||||||||||
2014 | — | — | — | ||||||||||||
2015 | — | — | — | ||||||||||||
2016 | — | — | — | ||||||||||||
Thereafter | 3.56 | 48,000 | 48,000 | ||||||||||||
Total FHLB Advances | 3.52 | % | $ | 49,098 | $ | 55,334 |
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. |
March 31, 2012 | |||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||
(Unaudited) | |||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Investment securities available for sale: | |||||||||||||||||||
Debt securities: | |||||||||||||||||||
U.S. government obligations | $ | 5,005 | $ | 5,005 | $ | — | $ | — | |||||||||||
U.S. government agencies | 22,977 | — | 22,977 | — | |||||||||||||||
FHLB notes | 1,699 | — | 1,699 | — | |||||||||||||||
State and municipal obligations | 2,606 | — | 2,606 | — | |||||||||||||||
Single issuer trust preferred security | 758 | — | 758 | — | |||||||||||||||
Corporate debt securities | 1,532 | — | 1,532 | — | |||||||||||||||
Total investment securities available for sale | 34,577 | 5,005 | 29,572 | — | |||||||||||||||
Mortgage-backed securities available for sale: | |||||||||||||||||||
FNMA: | |||||||||||||||||||
Adjustable-rate | 1,481 | — | 1,481 | — | |||||||||||||||
Fixed-rate | 744 | — | 744 | — | |||||||||||||||
FHLMC: | |||||||||||||||||||
Adjustable-rate | 579 | — | 579 | — | |||||||||||||||
GNMA, adjustable-rate | 143 | — | 143 | — | |||||||||||||||
CMO, fixed-rate-fate | 44,177 | — | 44,177 | — | |||||||||||||||
Total mortgage-backed securities available for sale | 47,124 | — | 47,124 | — | |||||||||||||||
Total | $ | 81,701 | $ | 5,005 | $ | 76,696 | $ | — |
September 30, 2011 | |||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Investment securities available for sale: | |||||||||||||||||||
Debt securities: | |||||||||||||||||||
U.S. government obligations | $ | 5,010 | $ | 5,010 | $ | — | $ | — | |||||||||||
U.S. government agencies | 23,946 | — | 23,946 | — | |||||||||||||||
FHLB notes | 4,496 | — | 4,496 | — | |||||||||||||||
State and municipal obligations | 963 | — | 963 | — | |||||||||||||||
Single issuer trust preferred security | 790 | — | 790 | — | |||||||||||||||
Corporate debt securities | 2,214 | — | 2,214 | — | |||||||||||||||
Total investment securities available for sale | 37,419 | 5,010 | 32,409 | — | |||||||||||||||
Mortgage-backed securities available for sale: | |||||||||||||||||||
FNMA: | |||||||||||||||||||
Adjustable-rate | 2,635 | — | 2,635 | — | |||||||||||||||
Fixed-rate | 954 | — | 954 | — | |||||||||||||||
FHLMC: | |||||||||||||||||||
Adjustable-rate | 664 | — | 664 | — | |||||||||||||||
Fixed-rate | 352 | — | 352 | — | |||||||||||||||
GNMA, adjustable-rate | 151 | — | 151 | — | |||||||||||||||
CMO, fixed-rate-fate | 32,214 | — | 32,214 | — | |||||||||||||||
Total mortgage-backed securities available for sale | 36,970 | — | 36,970 | — | |||||||||||||||
Total | $ | 74,389 | $ | 5,010 | $ | 69,379 | $ | — |
September 30, 2010 | |||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Investment securities available for sale: | |||||||||||||||||||
Debt securities: | |||||||||||||||||||
U.S. government obligations | $ | 4,997 | $ | 4,997 | $ | — | $ | — | |||||||||||
U.S. government agencies | 12,745 | — | 12,745 | — | |||||||||||||||
FHLB notes | 3,009 | — | 3,009 | — | |||||||||||||||
State and municipal obligations | 1,207 | — | 1,207 | — | |||||||||||||||
Single issuer trust preferred security | 759 | — | 759 | — | |||||||||||||||
Corporate debt securities | 1,475 | — | 1,475 | — | |||||||||||||||
Total investment securities available for sale | 24,192 | 4,997 | 19,195 | — | |||||||||||||||
Mortgage-backed securities available for sale: | |||||||||||||||||||
FNMA: | |||||||||||||||||||
Adjustable-rate | 3,488 | — | 3,488 | — | |||||||||||||||
Fixed-rate | 1,539 | — | 1,539 | — | |||||||||||||||
FHLMC: | |||||||||||||||||||
Adjustable-rate | 873 | — | 873 | — | |||||||||||||||
Fixed-rate | 512 | — | 512 | — | |||||||||||||||
GNMA, adjustable-rate | 169 | — | 169 | — | |||||||||||||||
CMO, fixed-rate | 9,946 | — | 9,946 | — | |||||||||||||||
Total mortgage-backed securities available for sale | 16,527 | — | 16,527 | — | |||||||||||||||
Total | $ | 40,719 | $ | 4,997 | $ | 35,722 | $ | — |
March 31, 2012 | |||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||
(Unaudited) | |||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Other real estate owned | $ | 2,104 | $ | — | $ | — | $ | 2,104 | |||||||||||
Impaired loans | 5,141 | — | — | 5,141 | |||||||||||||||
Total | $ | 7,245 | $ | — | $ | — | $ | 7,245 |
March 31, 2012 | |||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Fair Value at March 31, 2012 | Valuation Technique | Unobservable Input | Range | ||||||||||||||||
(Unaudited) | |||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Other real estate owned | $ | 2,104 | Discounted appraisals | Collateral discounts | 4–30% | ||||||||||||||
Impaired loans | 5,141 | Discounted appraisals | Collateral discounts | 8–60% | |||||||||||||||
Total | $ | 7,245 |
September 30, 2011 | |||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Other real estate owned | $ | 3,382 | $ | — | $ | — | $ | 3,382 | |||||||||||
Impaired loans | 6,831 | — | — | 6,831 | |||||||||||||||
Total | $ | 10,213 | $ | — | $ | — | $ | 10,213 |
September 30, 2011 | |||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Fair Value at September 30, 2011 | Valuation Technique | Unobservable Input | Range | ||||||||||||||||
(Unaudited) | |||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Other real estate owned | $ | 3,382 | Discounted appraisals | Collateral discounts | 5–50% | ||||||||||||||
Impaired loans | 6,831 | Discounted appraisals | Collateral discounts | 10–60% | |||||||||||||||
Total | $ | 10,213 |
September 30, 2010 | |||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Other real estate owned | $ | 4,716 | $ | — | $ | — | $ | 4,716 | |||||||||||
Impaired loans | 10,747 | — | — | 10,747 | |||||||||||||||
Total | $ | 15,463 | $ | — | $ | — | $ | 15,463 |
September 30, 2010 | |||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Fair Value at September 30, 2010 | Valuation Technique | Unobservable Input | Range | ||||||||||||||||
(Unaudited) | |||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Other real estate owned | $ | 4,716 | Discounted appraisals | Collateral discounts | 5-53% | ||||||||||||||
Impaired loans | 10,747 | Discounted appraisals | Collateral discounts | 26-68% | |||||||||||||||
Total | $ | 15,463 |
Six Months Ended March 31, 2012 | |||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Balance as of September 30, 2011 | Additions | Sales, net | Write-downs | Balance as of March 31, 2012 | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Residential mortgage | $ | 3,872 | $ | 353 | $ | 2,608 | $ | 243 | $ | 1,374 | |||||||||||||
Construction and Development: | |||||||||||||||||||||||
Land | — | 164 | — | — | 164 | ||||||||||||||||||
Commercial: | |||||||||||||||||||||||
Commercial real estate | 4,415 | 232 | 1,247 | 229 | 3,171 | ||||||||||||||||||
Other | 34 | — | — | — | 34 | ||||||||||||||||||
Total | $ | 8,321 | $ | 749 | $ | 3,855 | $ | 472 | $ | 4,743 |
Year Ended September 30, 2011 | |||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Balance as of September 30, 2010 | Additions | Sales, net | Write-downs | Balance as of September 30, 2011 | |||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Residential mortgage | $ | 1,538 | $ | 4,894 | $ | 2,182 | $ | 378 | $ | 3,872 | |||||||||||||
Construction and Development: | |||||||||||||||||||||||
Residential and commercial | 1,085 | — | 1,045 | 40 | — | ||||||||||||||||||
Commercial: | |||||||||||||||||||||||
Commercial real estate | 2,602 | 6,468 | 3,023 | 1,632 | 4,415 | ||||||||||||||||||
Multi-family | 70 | 1,064 | 729 | 405 | — | ||||||||||||||||||
Other | 20 | 34 | 20 | — | 34 | ||||||||||||||||||
Total | $ | 5,315 | $ | 12,460 | $ | 6,999 | $ | 2,455 | $ | 8,321 |
Year Ended September 30, 2010 | |||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Balance as of September 30, 2009 | Additions | Sales, net | Write-downs | Balance as of September 30, 2010 | |||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Residential mortgage | $ | 1,567 | $ | 1,398 | $ | 775 | $ | 652 | $ | 1,538 | |||||||||||||
Construction and Development: | |||||||||||||||||||||||
Residential and commercial | 197 | 1,320 | 196 | 236 | 1,085 | ||||||||||||||||||
Commercial: | |||||||||||||||||||||||
Commercial real estate | 4,006 | 345 | 592 | 1,157 | 2,602 | ||||||||||||||||||
Multi-family | — | 147 | — | 77 | 70 | ||||||||||||||||||
Other | 20 | — | — | — | 20 | ||||||||||||||||||
Consumer: | |||||||||||||||||||||||
Second mortgages | 85 | — | 85 | — | — | ||||||||||||||||||
Total | $ | 5,875 | $ | 3,210 | $ | 1,648 | $ | 2,122 | $ | 5,315 |
March 31, 2012 | |||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Carrying Amount | Fair Value | Level 1 | Level 2 | Level 3 | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Financial assets: | |||||||||||||||||||||||
Cash and cash equivalents | $ | 58,625 | $ | 58,625 | $ | — | $ | 58,625 | $ | — | |||||||||||||
Investment securities available for sale | 81,701 | 81,701 | 5,005 | 76,696 | — | ||||||||||||||||||
Investment securities held to maturity | 696 | 746 | — | 746 | — | ||||||||||||||||||
Loans receivable, net | 467,028 | 484,194 | — | 484,194 | |||||||||||||||||||
Accrued interest receivable | 1,632 | 1,632 | — | 1,632 | — | ||||||||||||||||||
Restricted stock | 4,827 | 4,827 | 4,827 | — | — | ||||||||||||||||||
Mortgage servicing rights | 143 | 143 | — | 143 | — | ||||||||||||||||||
Financial liabilities: | |||||||||||||||||||||||
Savings accounts | 46,996 | 46,996 | — | 46,996 | — | ||||||||||||||||||
Checking and NOW accounts | 116,501 | 116,501 | — | 116,501 | — | ||||||||||||||||||
Money market accounts | 79,248 | 79,248 | — | 79,248 | — | ||||||||||||||||||
Certificates of deposit | 294,284 | 302,482 | — | 302,482 | — | ||||||||||||||||||
FHLB advances | 48,593 | 57,422 | — | 57,422 | — | ||||||||||||||||||
Accrued interest payable | 246 | 246 | — | 246 | — |
September 30, 2011 | |||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Carrying Amount | Fair Value | Level 1 | Level 2 | Level 3 | |||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Financial assets: | |||||||||||||||||||||||
Cash and cash equivalents | $ | 33,496 | $ | 33,496 | $ | — | $ | 33,496 | $ | — | |||||||||||||
Investment securities available for sale | 74,389 | 74,389 | 5,010 | 69,379 | — | ||||||||||||||||||
Investment securities held to maturity | 3,797 | 4,024 | — | 4,024 | — | ||||||||||||||||||
Loans receivable, net | 506,019 | 527,628 | — | 527,628 | |||||||||||||||||||
Accrued interest receivable | 1,897 | 1,897 | — | 1,897 | — | ||||||||||||||||||
Restricted stock | 5,349 | 5,349 | 5,349 | — | |||||||||||||||||||
Mortgage servicing rights | 128 | 128 | — | 128 | — | ||||||||||||||||||
Financial liabilities: | |||||||||||||||||||||||
Savings accounts | 45,067 | 45,067 | — | 45,067 | — | ||||||||||||||||||
Checking and NOW accounts | 108,555 | 108,555 | — | 108,555 | — | ||||||||||||||||||
Money market accounts | 86,315 | 86,315 | — | 86,315 | — | ||||||||||||||||||
Certificates of deposit | 314,518 | 323,634 | — | 323,634 | — | ||||||||||||||||||
FHLB advances | 49,098 | 53,643 | — | 53,643 | — | ||||||||||||||||||
Accrued interest payable | 233 | 233 | — | 233 | — |
September 30, 2010 | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Carrying Amount | Fair Value | ||||||||||
(Dollars in thousands) | |||||||||||
Financial assets: | |||||||||||
Cash and cash equivalents | $ | 81,395 | $ | 81,395 | |||||||
Investment securities available for sale | 40,719 | 40,719 | |||||||||
Investment securities held to maturity | 4,716 | 4,925 | |||||||||
Loans receivable, net | 547,323 | 564,936 | |||||||||
Accrued interest receivable | 2,113 | 2,113 | |||||||||
Restricted stock | 6,567 | 6,567 | |||||||||
Mortgage servicing rights | 134 | 134 | |||||||||
Financial liabilities: | |||||||||||
Savings accounts | 42,385 | 42,385 | |||||||||
Checking and NOW accounts | 101,868 | 101,868 | |||||||||
Money market accounts | 80,980 | 80,980 | |||||||||
Certificates of deposit | 371,625 | 372,388 | |||||||||
FHLB advances | 55,334 | 58,208 | |||||||||
Accrued interest payable | 267 | 267 |
March 31, 2012 | ||||||
---|---|---|---|---|---|---|
(Unaudited) | ||||||
(Dollars in thousands) | ||||||
Deferred Tax Assets: | ||||||
Allowance for loan losses | $ | 2,746 | ||||
Nonaccrual interest | 359 | |||||
Write-down of real estate owned | 466 | |||||
Depreciation | 31 | |||||
AMT credit carryover | 180 | |||||
Low-income housing tax credit carryover | 220 | |||||
Supplement Employer Retirement Plan | 367 | |||||
Charitable contributions | 247 | |||||
State net operating loss | 296 | |||||
Net operating loss | 2,613 | |||||
Other | 152 | |||||
Total Deferred Tax Assets | 7,677 | |||||
Valuation allowance for state net operating loss | (296 | ) | ||||
Total Deferred Tax Assets, Net of Valuation Allowance | $ | 7,381 | ||||
Deferred Tax Liabilities: | ||||||
Unrealized gain on investments available for sale | (234 | ) | ||||
Depreciation | — | |||||
Mortgage servicing rights | (49 | ) | ||||
Other | (168 | ) | ||||
Total Deferred Tax Liabilities | (451 | ) | ||||
Deferred Tax Assets, Net | $ | 6,930 |
September 30, | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
March 31, 2012 | 2011 | 2010 | |||||||||||||
(Unaudited) | |||||||||||||||
(Dollars in thousands) | |||||||||||||||
Deferred Tax Assets: | |||||||||||||||
Allowance for loan losses | $ | 2,746 | $ | 3,434 | $ | 2,773 | |||||||||
Nonaccrual interest | 359 | 431 | 498 | ||||||||||||
Write-down of real estate owned | 466 | 298 | 780 | ||||||||||||
Depreciation | 31 | — | — | ||||||||||||
AMT credit carryover | 180 | 84 | 61 | ||||||||||||
Low-income housing tax credit carryover | 220 | 191 | 93 | ||||||||||||
Supplement Employer Retirement Plan | 367 | 352 | 303 | ||||||||||||
Charitable contributions | 247 | 247 | 227 | ||||||||||||
State net operating loss | 296 | 296 | 296 | ||||||||||||
Net operating loss | 2,613 | 2,702 | — | ||||||||||||
Other | 152 | 137 | 99 | ||||||||||||
Total Deferred Tax Assets | 7,677 | 8,172 | 5,130 | ||||||||||||
Valuation allowance for state net operating loss | (296 | ) | (296 | ) | (296 | ) | |||||||||
Total Deferred Tax Assets, Net of Valuation Allowance | $ | 7,381 | $ | 7,876 | $ | 4,834 | |||||||||
Deferred Tax Liabilities: | |||||||||||||||
Unrealized gain on investments available for sale | (234 | ) | (180 | ) | (92 | ) | |||||||||
Depreciation | — | (28 | ) | (96 | ) | ||||||||||
Mortgage servicing rights | (49 | ) | (43 | ) | (45 | ) | |||||||||
Other | (168 | ) | (160 | ) | (139 | ) | |||||||||
Total Deferred Tax Liabilities | (451 | ) | (411 | ) | (372 | ) | |||||||||
Deferred Tax Assets, Net | $ | 6,930 | $ | 7,465 | $ | 4,462 |
• | Gross operating loss carryforwards of $7.7 million (net DTA of $2.6 million) to expire in the fiscal year ending September 30, 2031; |
• | State operating loss carryforwards of $296,000 to expire in part during the fiscal years ending September 30, 2013 and 2014; |
• | Low income housing credit carryforwards of $220,000 to expire in the fiscal years ending September 30, 2030 and 2031; |
• | Minimum tax credit carryforward has no expiration date; and |
• | Gross charitable contributions carryforwards of $715,000 for the fiscal year ended 2008 (net DTA of $243,000) to expire in the fiscal year ending September 30, 2013 and gross charitable contributions carryforwards of $10,000 for the fiscal year ended 2010 (net DTA of $4,000) to expire in the fiscal year ending September 30, 2015. |
2012 | 2011 | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
(Unaudited) | |||||||||||
(Dollars in thousands) | |||||||||||
Federal: | |||||||||||
Current | $ | 1,069 | $ | (5,991 | ) | ||||||
Deferred | (481 | ) | 3,012 | ||||||||
588 | (2,979 | ) | |||||||||
State, current | — | — | |||||||||
$ | 588 | $ | (2,979 | ) |
2011 | 2010 | 2009 | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(Dollars in thousands) | |||||||||||||||
Federal: | |||||||||||||||
Current | $ | (488 | ) | $ | 301 | $ | 443 | ||||||||
Deferred | (3,091 | ) | (2,212 | ) | (260 | ) | |||||||||
(3,579 | ) | (1,911 | ) | 183 | |||||||||||
State, current | — | 16 | 59 | ||||||||||||
$ | (3,579 | ) | $ | (1,895 | ) | $ | 242 |
2012 | 2011 | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
(Unaudited) | |||||||||||
(Dollars in thousands) | |||||||||||
At federal statutory rate | $ | 700 | $ | (2,863 | ) | ||||||
Adjustments resulting from: | |||||||||||
State tax, net of federal benefit | — | (5 | ) | ||||||||
Tax-exempt interest | (3 | ) | — | ||||||||
Low-income housing credit | (22 | ) | (20 | ) | |||||||
Earnings on bank-owned life insurance | (91 | ) | (94 | ) | |||||||
Other | 4 | 3 | |||||||||
$ | 588 | $ | (2,979 | ) |
2011 | 2010 | 2009 | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(Dollars in thousands) | |||||||||||||||
At federal statutory rate | $ | (3,295 | ) | $ | (1,708 | ) | $ | 426 | |||||||
Adjustments resulting from: | |||||||||||||||
State tax, net of federal benefit | — | 11 | 39 | ||||||||||||
Tax-exempt interest | (8 | ) | (12 | ) | (26 | ) | |||||||||
Low-income housing credit | (41 | ) | (41 | ) | (41 | ) | |||||||||
Earnings on bank-owned life insurance | (186 | ) | (192 | ) | (175 | ) | |||||||||
Other | (49 | ) | 47 | 19 | |||||||||||
$ | (3,579 | ) | $ | (1,895 | ) | $ | 242 |
Years ending September 30: | ||||||
2012 | $ | 279 | ||||
2013 | 279 | |||||
2014 | 279 | |||||
2015 | 237 | |||||
2016 | 214 | |||||
Thereafter | 4,763 | |||||
$ | 6,051 |
Years ending September 30: | ||||||
2012 | $ | 278 | ||||
2013 | 214 | |||||
2014 | 170 | |||||
2015 | 1 | |||||
2016 | — | |||||
$ | 663 |
September 30 | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
March 31, 2012 | 2011 | 2010 | |||||||||||||
(Unaudited) | |||||||||||||||
(Dollars in thousands) | |||||||||||||||
Commitments to extend credit: | |||||||||||||||
Future loan commitments | $ | 15,705 | $ | 7,309 | $ | 4,959 | |||||||||
Undisbursed construction loans | 5,066 | 7,698 | 34,840 | ||||||||||||
Undisbursed home equity lines of credit | 23,881 | 23,656 | 25,374 | ||||||||||||
Undisbursed commercial lines of credit | 5,158 | 4,910 | 7,522 | ||||||||||||
Overdraft protection lines | 845 | 823 | 866 | ||||||||||||
Standby letters of credit | 3,766 | 3,998 | 3,809 | ||||||||||||
Total Commitments | $ | 54,421 | $ | 48,394 | $ | 77,370 |
Actual | For Capital Adequacy Purposes | To be Well Capitalized Under Prompt Corrective Action Provisions | |||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||
As of March 31, 2012 (unaudited): | |||||||||||||||||||||||||||
Tangible Capital (to tangible assets) | $ | 53,442 | 8.27 | % | $ | ≥ 9,689 | 1.50 | % | $ | — | N/A | ||||||||||||||||
Core Capital (to adjusted tangible assets) | 53,442 | 8.27 | ≥25,838 | 4.00 | ≥32,297 | 5.00 | % | ||||||||||||||||||||
Tier 1 Capital (to risk-weighted assets) | 53,442 | 12.45 | ≥17,174 | 4.00 | ≥25,761 | 6.00 | |||||||||||||||||||||
Total risk-based Capital (to risk- weighted assets) | 58,842 | 13.71 | ≥34,347 | 8.00 | ≥42,934 | 10.00 | |||||||||||||||||||||
As of September 30, 2011: | |||||||||||||||||||||||||||
Tangible Capital (to tangible assets) | $ | 49,681 | 7.54 | % | $ | ≥ 9,878 | 1.50 | % | $ | — | N/A | ||||||||||||||||
Core Capital (to adjusted tangible assets) | 49,681 | 7.54 | ≥26,342 | 4.00 | ≥32,928 | 5.00 | % | ||||||||||||||||||||
Tier 1 Capital (to risk-weighted assets) | 49,681 | 10.76 | ≥18,476 | 4.00 | ≥27,714 | 6.00 | |||||||||||||||||||||
Total risk-based Capital (to risk- weighted assets) | 55,493 | 12.01 | ≥36,952 | 8.00 | ≥46,190 | 10.00 | |||||||||||||||||||||
As of September 30, 2010: | |||||||||||||||||||||||||||
Tangible Capital (to tangible assets) | $ | 59,026 | 8.24 | % | $ | ≥10,739 | 1.50 | % | $ | — | N/A | ||||||||||||||||
Core Capital (to adjusted tangible assets) | 59,026 | 8.24 | ≥28,637 | 4.00 | ≥35,796 | 5.00 | % | ||||||||||||||||||||
Tier 1 Capital (to risk-weighted assets) | 59,026 | 11.83 | ≥19,962 | 4.00 | ≥29,944 | 6.00 | |||||||||||||||||||||
Total risk-based Capital (to risk- weighted assets) | 64,116 | 12.85 | ≥39,925 | 8.00 | ≥49,906 | 10.00 |
September 30, | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
March 31, 2012 | 2011 | 2010 | |||||||||||||
(Unaudited) | |||||||||||||||
(Dollars in thousands) | |||||||||||||||
Bank GAAP equity | $ | 58,131 | $ | 53,321 | $ | 59,129 | |||||||||
Disallowed portion of deferred tax asset | (4,234 | ) | (3,350 | ) | — | ||||||||||
Net unrealized (loss) gain on securities available for sale, net of income taxes | (455 | ) | (290 | ) | (103 | ) | |||||||||
Tangible Capital , Core Capital and Tier 1 Capital | 53,442 | 49,681 | 59,026 | ||||||||||||
Allowance for loan losses (excluding specific reserves of $0 (unaudited), $1,259* and $3,067 for six months ended March 31, 2012 and fiscal years 2011 and 2010, respectively), (also excluding 1.25% of risk-weighted assets of $2,676 (unaudited), $3,031 and $0 for six months ended March 31, 2012, and fiscal years 2011 and 2010, respectively) | 5,400 | 5,812 | 5,090 | ||||||||||||
Total Risk-Based Capital | $ | 58,842 | $ | 55,493 | $ | 64,116 |
* | Specific reserves based on regulatory specifications |
September 30, | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
March 31, 2012 | 2011 | 2010 | |||||||||||||
(Unaudited) | |||||||||||||||
(Dollars in thousands) | |||||||||||||||
Assets | |||||||||||||||
Cash and Cash Equivalents | $ | 814 | $ | 1,799 | $ | 550 | |||||||||
Investment in subsidiaries | 58,131 | 53,321 | 59,129 | ||||||||||||
Investment securities available for sale | — | 2,640 | 3,782 | ||||||||||||
Loans receivable, net | 2,261 | 2,315 | 2,420 | ||||||||||||
Deferred income taxes, net | 243 | 212 | 188 | ||||||||||||
Other assets | 516 | 559 | 185 | ||||||||||||
Total Assets | $ | 61,965 | $ | 60,846 | $ | 66,254 | |||||||||
Liabilities | |||||||||||||||
Accounts payable | $ | 62 | $ | 562 | $ | 47 | |||||||||
Shareholders’ Equity | 61,903 | 60,284 | 66,207 | ||||||||||||
Total Liabilities and Shareholders’ Equity | $ | 61,965 | $ | 60,846 | $ | 66,254 |
March 31, | September 30, | ||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2012 | 2011 | 2011 | 2010 | 2009 | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Income | |||||||||||||||||||||||
Interest income | $ | 74 | $ | 106 | $ | 210 | $ | 257 | $ | 294 | |||||||||||||
Total Interest Income | 74 | 106 | 210 | 257 | 294 | ||||||||||||||||||
Gain on sale of investment securities | 40 | — | — | — | 2 | ||||||||||||||||||
Expense | |||||||||||||||||||||||
Other operating expenses | 8 | 41 | 58 | 58 | 36 | ||||||||||||||||||
Total Other Expenses | 8 | 41 | 58 | 58 | 36 | ||||||||||||||||||
Gain before Equity in Undistributed Net Income (Loss) of Subsidiaries and Income Tax Benefit (Expense) | 106 | 65 | 152 | 199 | 260 | ||||||||||||||||||
Equity in Undistributed Net Income (Loss) of Subsidiaries | 1,400 | (5,486 | ) | (6,094 | ) | (3,341 | ) | 852 | |||||||||||||||
Income tax benefit (expense) | 36 | 22 | 170 | (13 | ) | (102 | ) | ||||||||||||||||
Net Income (Loss) | $ | 1,470 | $ | (5,443 | ) | $ | (6,112 | ) | $ | (3,129 | ) | $ | 1,010 |
Six Months Ended March 31, | Year Ended September 30, | ||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2012 | 2011 | 2011 | 2010 | 2009 | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Net income (loss) | $ | 1,470 | $ | (5,443 | ) | $ | (6,112 | ) | $ | (3,129 | ) | $ | 1,010 | ||||||||||
Undistributed net (income) loss of subsidiaries | (1,400 | ) | 5,486 | 6,094 | 3,341 | (852 | ) | ||||||||||||||||
Deferred income taxes, net | (39 | ) | (25 | ) | (30 | ) | 9 | 144 | |||||||||||||||
ESOP shares committed to be released | 45 | 34 | 98 | 121 | 104 | ||||||||||||||||||
Amortization of discounts on investment securities | 79 | (2 | ) | (4 | ) | (1 | ) | (4 | ) | ||||||||||||||
Net gain on sale of investment securities | (40 | ) | — | — | — | (2 | ) | ||||||||||||||||
Increase (decrease) in other liabilities | (500 | ) | 14 | 14 | (36 | ) | 83 | ||||||||||||||||
Other assets | (147 | ) | 15 | 40 | (14 | ) | (314 | ) | |||||||||||||||
Net Cash (Used in) Provided by Operating Activities | (532 | ) | 79 | 100 | 291 | 169 | |||||||||||||||||
Cash Flows from Investing Activities |