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SECURITIES AND EXCHANGE COMMISSION
UNDER THE SECURITIES ACT OF 1933
Tennessee | 6035 | 27-0920126 | ||
(State or other jurisdiction of | (Primary Standard Industrial | (IRS Employer Identification No.) | ||
incorporation or organization) | Classification Code Number) |
Athens, Tennessee 37303
(423) 745-1111
(Address, including zip code, and telephone number,
including area code, of registrant’s principal executive offices)
President and Chief Executive Officer
106 Washington Avenue
Athens, Tennessee 37303
(423) 745-1111
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Paul M. Aguggia, Esq. | Martin Meyrowitz, Esq. | |
Victor L. Cangelosi, Esq. | Silver Freedman & Taff, LLP | |
Kilpatrick Stockton LLP | 3299 K Street, Suite 100 | |
607 14th Street, NW, Suite 900 Washington, DC 20005 | Washington, DC 20007 (202) 295-4513 | |
(202) 508-5854 |
Large accelerated filero | Accelerated filero | Non-accelerated filero | Smaller reporting companyþ | |||
(Do not check if a smaller reporting company) |
Proposed Maximum | Proposed Maximum | Amount of | ||||||||||||
Title of Each Class of | Amount to | Offering Price | Aggregate Offering | Registration | ||||||||||
Securities to be Registered | be Registered | Per Unit | Price (2) | Fee | ||||||||||
Common Stock $.01 par value | 2,777,250 shares (1) | $10.00 | $27,772,500 | $1,550 (3) | ||||||||||
Participation Interests | (4) | — | (4) | (5) | ||||||||||
(1) | Includes shares of common stock to be issued to the Athens Federal Foundation, a private foundation. | |
(2) | Estimated solely for the purpose of calculating the registration fee. | |
(3) | The total registration fee is $1,550.00. On September 17, 2009, $1,403.00 was previously paid upon filing of the Form S-1. The remaining fee to be paid is $148. | |
(4) | In addition, pursuant to Rule 416(c) under the Securities Act, this registration statement also covers an indeterminate amount of interests to be offered or sold pursuant to the employee benefit plan described herein. | |
(5) | The securities of Athens Bancshares Corporation to be purchased by the Athens Federal Community Bank 401(k) Plan included in the amount shown for common stock. Accordingly, no separate fee is required for the participation interests. In accordance with Rule 457(h) of the Securities Act, as amended, the registration fee has been calculated on the basis of the number of shares of common stock that may be purchased with the current assets of such Plan. |
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ATHENS FEDERAL COMMUNITY BANK
EMPLOYEES’ SAVINGS & PROFIT SHARING PLAN AND TRUST
AND
OFFERING OF 430,000 SHARES OF
ATHENS BANCSHARES CORPORATION
COMMON STOCK ($.01 PAR VALUE)
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(1) | an officer of Athens Federal whose annual compensation exceeds $145,000; | ||
(2) | a 5% owner of the employer, meaning an employee who owns more than 5% of the outstanding stock of Athens Bancshares, or who owns stock that possesses more than 5% of the total combined voting power of all stock of Athens Bancshares; or | ||
(3) | a 1% owner of the employer, meaning an employee who owns more than 1% of the outstanding stock of Athens Bancshares, or who owns stock that possesses more than 1% of the total combined voting power of all stock of Athens Bancshares,andwhose annual compensation exceeds $150,000. |
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Annual Rates of Return as of | ||||||||||||
December 31, | ||||||||||||
Fund Name | 2008 | 2007 | 2006 | |||||||||
S&P 500 Stock Fund | -36.94 | % | 5.51 | % | 15.81 | % | ||||||
TIPS Index Fund | -2.43 | % | 11.60 | % | 0.41 | % | ||||||
S&P MidCap Fund | -36.09 | % | 8.00 | % | 10.34 | % | ||||||
Nasdaq 100 Index Fund | -41.72 | % | 18.89 | % | 6.89 | % | ||||||
Russell 2000 Index Fund | -33.61 | % | -1.72 | % | 17.99 | % | ||||||
International Fund | NA | NA | NA | |||||||||
Aggregate Bond Index | 4.90 | % | 6.30 | % | 3.60 | % | ||||||
SSgA Target Retirement 2045 Fund | -33.55 | % | 8.45 | % | NA | |||||||
SSgA Target Retirement 2035 Fund | -33.62 | % | 7.82 | % | NA | |||||||
SSgA Target Retirement 2025 Fund | -28.06 | % | 7.72 | % | NA | |||||||
SSgA Target Retirement 2015 Fund | -22.19 | % | 7.22 | % | NA | |||||||
SSgA Target Retirement Income Fund | -12.89 | % | 6.37 | % | 7.48 | % | ||||||
Pentegra Stable Value Fund | 3.46 | % | 4.60 | % | 4.42 | % | ||||||
Short Term Investment Fund | 2.67 | % | 5.37 | % | 5.15 | % | ||||||
Government Short Term Investment Fund | 2.31 | % | 5.28 | % | 5.17 | % | ||||||
REIT Index Fund | -38.90 | % | -17.50 | % | 35.75 | % | ||||||
Vanguard Growth Index Fund | -38.17 | % | 12.81 | % | 9.25 | % | ||||||
Vanguard Value Index Fund | -35.83 | % | 0.29 | % | 22.40 | % |
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(1) | the sponsoring employer may take an immediate tax deduction for the amount contributed to the plan each year; | ||
(2) | participants pay no current income tax on amounts contributed by the employer on their behalf; and | ||
(3) | earnings of the plan are tax-deferred, thereby permitting the tax-free accumulation of income and gains on investments. |
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![(ATHENS BANCSHARES CORPORATION LOGO)](https://capedge.com/proxy/S-1A/0000950123-09-059966/g20505a2g2050521.gif)
• | You may have priority rights to purchase shares of common stock. |
• | You may direct that all or part of your current account balance in this plan be invested in shares of common stock. | ||
• | You will receive a separate supplement to this prospectus that describes your rights under this plan. |
• | You may have an opportunity to purchase shares of common stock after priority orders are filled. |
Please read “Risk Factors” beginning on page ___.
OFFERING SUMMARY
Maximum | ||||||||||||
Minimum | Maximum | As Adjusted | ||||||||||
Number of shares | 1,685,000 | 2,315,000 | 2,677,250 | |||||||||
Gross offering proceeds | $ | 16,850,000 | $ | 23,150,000 | $ | 26,772,500 | ||||||
Estimated offering expenses, excluding selling agent fees and expenses | $ | 920,000 | $ | 920,000 | $ | 920,000 | ||||||
Estimated selling agent fees and expenses(1) | $ | 260,000 | $ | 260,000 | $ | 260,000 | ||||||
Estimated net proceeds | $ | 15,670,000 | $ | 21,970,000 | $ | 25,592,500 | ||||||
Estimated net proceeds per share | $ | 9.30 | $ | 9.49 | $ | 9.56 |
(1) | Excludes fees payable if a syndicated community offering is held. For a discussion of the compensation of Keefe, Bruyette & Woods, Inc., see“The Conversion and Stock Offering — Marketing Arrangements.” |
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![(ATHENS FEDERAL LOGO)](https://capedge.com/proxy/S-1A/0000950123-09-059966/g20505a2g2050522.gif)
![(MAP)](https://capedge.com/proxy/S-1A/0000950123-09-059966/g20505a2g2050523.gif)
Athens Main Office | Athens Lending Center | Athens Decatur Pike | ||
106 Washington Avenue | 106 Hornsby Street | 1103 Decatur Pike | ||
Athens, TN 37303 | Athens, TN 37303 | Athens, TN 37303 | ||
Cleveland Ocoee Street Branch | Cleveland 25th Street Branch | Etowah | ||
3855 North Ocoee Street | 950 25th Street | 523 Tennessee Avenue | ||
Cleveland, TN 37312 | Cleveland, TN 37311 | Etowah, TN 37331 |
Madisonville | Sweetwater | |
4785 New Highway 68 | 800 Highway 68 | |
Madisonville, TN 37875 | Sweetwater, TN 37874 |
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Athens Federal Community Bank
106 Washington Avenue
Athens, Tennessee 37303
(423) 745-1111
• | remaining a community-oriented financial institution; | ||
• | continuing our historical focus on residential mortgage lending; | ||
• | expanding our commercial real estate and multi-family lending activities; | ||
• | emphasizing lower cost core deposits to maintain low funding costs; and | ||
• | expanding our market share within our primary market area. |
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• | our historical, present and projected operating results and financial condition and the economic and demographic characteristics of our primary market area; | ||
• | a comparative evaluation of the operating and financial statistics of Athens Federal Community Bank with those of other similarly situated, publicly traded companies; | ||
• | the effect of the capital raised in this offering on our net worth and earnings potential; | ||
• | the trading market for securities of comparable institutions and general conditions in the market for such securities; and | ||
• | our intention to contribute to the Athens Federal Foundation 100,000 shares of Athens Bancshares Corporation’s common stock and $100,000 in cash in connection with the conversion. |
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Price to Core | Price to Book | |||||||
Earnings Multiple | Value Ratio | |||||||
Athens Bancshares Corporation (pro forma): | ||||||||
Minimum | 10.02 | x | 45.62 | % | ||||
Midpoint | 12.00 | 50.13 | ||||||
Maximum | 14.06 | 54.05 | ||||||
Maximum, as adjusted | 16.53 | 58.00 | ||||||
Peer group companies as of August 19, 2009: | ||||||||
Average | 13.06 | x | 66.47 | % | ||||
Median | 12.82 | 62.61 |
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Percentage Change From Initial Offering Price | ||||||||||||||||||||||||
Offering | ||||||||||||||||||||||||
Issuer | Date of | Size (In | After 1 | After 1 | After 1 | Through | ||||||||||||||||||
(Market/Symbol) | IPO | thousands) | Day | Week | Month | August 19, 2009 | ||||||||||||||||||
Danvers Bancorp, Inc. (DNBK) | 01/10/2008 | $ | 171,925 | (2.60 | )% | (3.10 | )% | 2.60 | % | 27.10 | % | |||||||||||||
Cape Bancorp, Inc. (CBNJ) (1) | 01/31/2008 | 78,200 | 0.50 | 0.10 | (3.00 | ) | (13.00 | ) | ||||||||||||||||
Home Bancorp, Inc. (HBCP) | 09/30/2008 | 89,269 | 14.90 | 9.20 | 2.40 | 24.00 | ||||||||||||||||||
First Savings Financial Group, Inc. (FSFG) | 10/07/2008 | 24,320 | (1.00 | ) | (0.10 | ) | (8.00 | ) | 1.90 | |||||||||||||||
Hibernia Homestead Bancorp, Inc. (HIBE) | 01/28/2009 | 11,133 | 0.00 | 5.00 | 5.00 | 40.00 | ||||||||||||||||||
St. Joseph Bancorp, Inc. (SJBA) | 02/02/2009 | 3,769 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||||||||
Territorial Bancorp Inc. (TBNK) | 07/13/2009 | 122,331 | 49.90 | 47.50 | 48.00 | 56.00 | ||||||||||||||||||
All Transactions: | ||||||||||||||||||||||||
Average | 71,564 | 8.81 | 8.37 | 6.71 | 19.43 | |||||||||||||||||||
Median | 78,200 | 0.00 | 0.10 | 2.40 | 24.00 | |||||||||||||||||||
High | 171,925 | 49.90 | 47.50 | 48.00 | 56.00 | |||||||||||||||||||
Low | 3,769 | (2.60 | ) | (3.10 | ) | (8.00 | ) | (13.00 | ) |
(1) | Simultaneously with its initial public offering, Cape Bancorp, Inc. also issued 5,429,507 shares of common stock to former shareholders of Boardwalk Bancorp, Inc. in connection with its acquisition of Boardwalk Bancorp, Inc. |
• | we sell at least the minimum number of shares offered; | ||
• | we receive the final approval of the Office of Thrift Supervision to complete the offering; and | ||
• | our members approve the plan of conversion. |
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• | increase the capital of Athens Federal Community Bank to support future lending and operational growth; | ||
• | enhance profitability and earnings through reinvesting and leveraging the proceeds, primarily through traditional funding and lending activities; | ||
• | support future branching activities and/or the acquisition of other financial institutions or financial services companies; | ||
• | implement equity compensation plans to retain and attract qualified directors, officers and staff to enhance the current incentive-based compensation programs; and | ||
• | increase our philanthropic endeavors to the community we serve through the formation and funding of the Athens Federal Foundation. |
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Value of | ||||||||||||||||
111,090 | ||||||||||||||||
71,400 | 84,000 | 96,600 | Shares | |||||||||||||
Shares | Shares | Shares | Awarded at | |||||||||||||
Awarded at | Awarded at | Awarded at | Maximum, as | |||||||||||||
Minimum of | Midpoint of | Maximum of | Adjusted, of | |||||||||||||
Share Price | Range | Range | Range | Range | ||||||||||||
(In thousands, except per share amounts) | ||||||||||||||||
$8.00 | $ | 571 | $ | 672 | $ | 773 | $ | 889 | ||||||||
10.00 | 714 | 840 | 966 | 1,111 | ||||||||||||
12.00 | 857 | 1,008 | 1,159 | 1,333 | ||||||||||||
14.00 | 1,000 | 1,176 | 1,352 | 1,555 |
Value of | ||||||||||||||||||||
277,725 | ||||||||||||||||||||
178,500 | 210,000 | 241,500 | Options | |||||||||||||||||
Options | Options | Options | Granted at | |||||||||||||||||
Granted at | Granted at | Granted at | Maximum, as | |||||||||||||||||
Minimum of | Midpoint of | Maximum of | Adjusted, of | |||||||||||||||||
Exercise Price | Option Value | Range | Range | Range | Range | |||||||||||||||
(In thousands, except per share amounts) | ||||||||||||||||||||
$8.00 | $ | 3.32 | 593 | 697 | 802 | 922 | ||||||||||||||
10.00 | 4.15 | 741 | 872 | 1,002 | 1,153 | |||||||||||||||
12.00 | 4.98 | 889 | 1,046 | 1,203 | 1,383 | |||||||||||||||
14.00 | 5.81 | 1,037 | 1,220 | 1,403 | 1,614 |
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Number of Shares to be | ||||||||||||||||
Granted or Purchased | ||||||||||||||||
As a % of | ||||||||||||||||
At Maximum | Common Stock | As a % of | ||||||||||||||
of | Sold at | Common | Total Estimated | |||||||||||||
Offering | Maximum of | Stock | Value of Grants | |||||||||||||
Range | Offering Range | Outstanding | (in thousands) | |||||||||||||
Employee stock ownership plan (1) | 193,200 | 8.3 | % | 8.0 | % | $ | 1,932 | |||||||||
Restricted stock awards (1) | 96,600 | 4.2 | 4.0 | 966 | ||||||||||||
Stock options (2) | 241,500 | 10.4 | 10.0 | 1,002 | ||||||||||||
Total | 531,300 | 22.9 | % | 22.0 | % | $ | 3,900 | |||||||||
(1) | Assumes the value of Athens Bancshares Corporation common stock is $10.00 per share for purposes of determining the total estimated value of the grants. | |
(2) | Assumes the value of a stock option is $4.15, which was determined using the Black-Scholes option-pricing formula. See“Pro Forma Data.” |
• | it is more likely than not that the members of Athens Federal Community Bank will not realize any income upon the issuance or exercise of subscription rights; | ||
• | it is more likely than not that the tax basis to the purchasers in the offering will be the amount paid for our common stock, and that the holding period for shares of common stock will begin on the date of completion of the subscription offering; and | ||
• | the holding period for shares of common stock purchased in the community offering or syndicated community offering will begin on the day after the date of completion of the purchase. |
1. | Persons with $50 or more on deposit at Athens Federal Community Bank as of the close of business on March 31, 2008. | ||
2. | Our employee stock ownership plan, which will provide retirement benefits to our employees. |
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3. | Persons (other than our directors and officers) with $50 or more on deposit at Athens Federal Community Bank as of the close of business on September 30, 2009. | ||
4. | Athens Federal Community Bank’s depositors as of the close of business on October 31, 2009 who were not able to subscribe for shares under categories 1 or 3 and borrowers of Athens Federal Community Bank as of May 1, 1999 whose borrowings still exist as of the close of business on October 31, 2009. |
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• | The minimum purchase is 25 shares. | ||
• | No individual (or individuals on a single deposit account) may purchase more than $300,000 of common stock (which equals 30,000 shares) in the subscription offering. | ||
• | No individual may purchase more than $300,000 of common stock (which equals 30,000 shares) in the community offering. | ||
• | No individual, no individual together with any associates, and no group of persons acting in concert may purchase more than $500,000 of common stock (which equals 50,000 shares) in all offering categories. |
• | By check or money order made payable to Athens Bancshares Corporation; or | ||
• | By authorizing withdrawal from an account at Athens Federal Community Bank. |
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Minimum 1,685,000 | Maximum 2,315,000 | |||||||
(In thousands) | Shares at $10.00 Per Share | Shares at $10.00 Per Share | ||||||
Offering proceeds | $ | 16,850 | $ | 23,150 | ||||
Net offering proceeds | 15,670 | 21,970 | ||||||
Less: | ||||||||
Proceeds contributed to Athens Federal Community Bank | 7,835 | 10,985 | ||||||
Proceeds used for loan to employee stock ownership plan | 1,428 | 1,932 | ||||||
Proceeds contributed to charitable foundation | 100 | 100 | ||||||
Proceeds remaining for Athens Bancshares Corporation | $ | 6,307 | $ | 8,953 | ||||
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• | Charter and bylaws. Provisions of the charter and bylaws of Athens Bancshares Corporation may make it more difficult and expensive to pursue a takeover attempt that the board of directors opposes. These provisions also make more difficult the removal of current directors or management, or the election of new directors. These provisions include: |
• | an 80% supermajority voting requirement for shareholders to approve certain business combinations, which may have the effect of preventing a business combination which a majority of shareholders deem desirable but that is opposed by the board of directors; | ||
• | a limitation on the right to vote shares by any person who directly or indirectly beneficially owns more than 10% of Athens Bancshares Corporation’s common stock by prohibiting the person from voting any shares held in excess of the 10% limit, which will prevent greater than 10% shareholders from voting all of their shares in favor of a proposed transaction or a nominee for director that is opposed by the board of directors; | ||
• | a provision that permits the board of directors to consider a variety of factors, including the social or economic effects of the transaction and the earnings prospects, experience and integrity of the acquirer, when evaluating a transaction that may involve in a change in control of Athens Bancshares Corporation, which may enable the board of directors to oppose a transaction even if the price offered is significantly greater than the market price of Athens Bancshares Corporation’s common stock; | ||
• | the election of directors to staggered terms of three years, which will prevent shareholders from effecting a change in the composition of the entire board of directors at any annual shareholders’ meeting; | ||
• | a requirement that director vacancies may only be filled by a majority vote of the board of directors, which prevents shareholders from nominating themselves or persons of their choosing to fill any vacancies on the board of directors; | ||
• | certain director eligibility requirements, including age, share ownership, residency and integrity requirements, which may perpetuate the terms of incumbent directors by preventing some individuals from serving as directors; |
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• | a requirement that directors may be removed only for cause, which may perpetuate the terms of incumbent directors by preventing shareholders from voting to remove directors for reasons other than cause; | ||
• | the absence of cumulative voting by shareholders in the election of directors, which, by preventing shareholders from voting their shares for or against a single nominee, makes it more difficult for shareholders to elect nominees opposed by the board of directors; | ||
• | a requirement that special meetings of shareholders may only be called by the board of directors, which prevents shareholders from calling a special meeting of shareholders to vote on a proposed transaction opposed by the board of directors; | ||
• | a requirement that shareholder proposals and nominations must generally be received not less than ninety days before the date of the annual meeting of shareholders and be subject to certain procedural and content requirements, which affords Athens Bancshares Corporation additional time to rebut proposals that it opposes but that may be favored by shareholders; | ||
• | the ability of the board of directors to issue additional shares of common stock or shares of preferred stock without the prior approval of shareholders, which may enable the board of directors to impede a merger, tender offer or other takeover attempt that it opposes by making the transaction more expensive for the potential acquiror; and | ||
• | an 80% supermajority voting requirement to (i) amend the charter provisions regarding the size and election of the board of directors, removal of directors, elimination of directors’ liability, indemnification, limitations on shareholder voting rights, approval of certain business combinations and the evaluation of business combinations; and (ii) approve any amendment to the bylaws, which may make it more difficult to modify or eliminate such anti-takeover provisionss included in the charter and bylaws. |
• | Office of Thrift Supervision regulations. Office of Thrift Supervision regulations prohibit, for three years following the completion of a mutual-to-stock conversion, the offer to acquire or the acquisition of more than 10% of any class of equity security of a converted institution without the prior approval of the Office of Thrift Supervision. |
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• | statements of our goals, intentions and expectations; | ||
• | statements regarding our business plans, prospects, growth and operating strategies; | ||
• | statements regarding the quality of our loan and investment portfolios; and | ||
• | estimates of our risks and future costs and benefits. |
• | general economic conditions, either nationally or in our primary market area, that are worse than expected; | ||
• | a continued decline in real estate values; | ||
• | 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, regulatory or supervisory changes that adversely affect our business; | ||
• | adverse changes in the securities markets; and | ||
• | changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board or the Public Company Accounting Oversight Board. |
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At June 30, | At December 31, | |||||||||||||||||||||||
(In thousands) | 2009 | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||||
Total assets | $ | 243,011 | $ | 251,000 | $ | 230,505 | $ | 212,383 | $ | 190,505 | $ | 182,595 | ||||||||||||
Cash and cash equivalents | 9,761 | 4,547 | 9,284 | 8,989 | 4,554 | 8,437 | ||||||||||||||||||
Securities available-for-sale | 22,621 | 30,509 | 22,967 | 21,440 | 27,695 | 40,247 | ||||||||||||||||||
Securities held-to-maturity | 2 | 5 | 14 | 25 | 63 | 164 | ||||||||||||||||||
Investments, at cost | 2,899 | 2,899 | 4,746 | 6,076 | 7,235 | 2,518 | ||||||||||||||||||
Loans receivable, net | 192,217 | 196,520 | 178,603 | 157,013 | 138,570 | 119,846 | ||||||||||||||||||
Deposits | 202,920 | 206,493 | 197,344 | 171,214 | 153,190 | 144,807 | ||||||||||||||||||
Securities sold under agreements to repurchase | 972 | 912 | 1,151 | 1,681 | 1,421 | 1,110 | ||||||||||||||||||
Advances from Federal Home Loan Bank | 10,378 | 16,310 | 5,532 | 15,630 | 13,600 | 15,315 | ||||||||||||||||||
Total equity | 25,331 | 24,212 | 23,271 | 21,879 | 20,800 | 19,733 |
For the Six Months | ||||||||||||||||||||||||||||
Ended June 30, | For the Year Ended December 31, | |||||||||||||||||||||||||||
(In thousands) | 2009 | 2008 | 2008 | 2007 | 2006 | 2005 | 2004 | |||||||||||||||||||||
Operating Data: | ||||||||||||||||||||||||||||
Interest income | $ | 7,511 | $ | 7,836 | $ | 15,580 | $ | 15,457 | $ | 12,775 | $ | 10,519 | $ | 9,626 | ||||||||||||||
Interest expense | 3,003 | 3,675 | 7,133 | 7,101 | 5,277 | 3,986 | 3,759 | |||||||||||||||||||||
Net interest income | 4,508 | 4,161 | 8,447 | 8,356 | 7,498 | 6,533 | 5,867 | |||||||||||||||||||||
Provision for loan losses | 118 | 287 | 761 | 443 | 704 | 341 | 267 | |||||||||||||||||||||
Net interest income after provision for loan losses | 4,390 | 3,874 | 7,686 | 7,913 | 6,794 | 6,192 | 5,600 | |||||||||||||||||||||
Non-interest income | 2,488 | 2,184 | 4,161 | 4,030 | 2,682 | 2,563 | 2,380 | |||||||||||||||||||||
Non-interest expense | 5,389 | 5,442 | 10,251 | 10,431 | 8,244 | 6,987 | 5,942 | |||||||||||||||||||||
Income before income taxes | 1,489 | 616 | 1,596 | 1,512 | 1,232 | 1,768 | 2,038 | |||||||||||||||||||||
Income taxes | 406 | 153 | 487 | 392 | 348 | 568 | 674 | |||||||||||||||||||||
Net income | $ | 1,083 | $ | 463 | $ | 1,109 | $ | 1,120 | $ | 884 | $ | 1,200 | $ | 1,364 | ||||||||||||||
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At or For the Six | ||||||||||||||||||||||||||||
Months Ended | ||||||||||||||||||||||||||||
June 30, | At or For the Year Ended December 31, | |||||||||||||||||||||||||||
2009 | 2008 | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||||||||
Performance Ratios (1): | ||||||||||||||||||||||||||||
Return on average assets | 0.87 | % | 0.38 | % | 0.45 | % | 0.50 | % | 0.44 | % | 0.65 | % | 0.75 | % | ||||||||||||||
Return on average equity | 8.68 | 3.94 | 4.72 | 5.02 | 4.07 | 5.84 | 7.22 | |||||||||||||||||||||
Interest rate spread (2) | 3.71 | 3.49 | 3.51 | 3.79 | 3.79 | 3.60 | 3.32 | |||||||||||||||||||||
Net interest margin (3) | 3.92 | 3.73 | 3.74 | 4.05 | 4.07 | 3.81 | 3.50 | |||||||||||||||||||||
Other expenses to average assets | 4.32 | 4.88 | 4.18 | 4.64 | 4.13 | 3.77 | 3.28 | |||||||||||||||||||||
Efficiency ratio (4) | 77.03 | 85.77 | 81.30 | 84.22 | 80.98 | 76.81 | 72.05 | |||||||||||||||||||||
Average interest-earning assets to average interest-bearing liabilities | 108.03 | 107.50 | 107.20 | 107.67 | 109.99 | 109.06 | 107.66 | |||||||||||||||||||||
Average equity to average assets | 10.00 | 9.70 | 9.58 | 9.92 | 10.87 | 11.07 | 10.42 | |||||||||||||||||||||
Capital Ratios: | ||||||||||||||||||||||||||||
Total capital (to risk-weighted assets) | 15.0 | % | 14.3 | % | 14.0 | % | 14.8 | % | 15.6 | % | 16.8 | % | 18.4 | % | ||||||||||||||
Tier 1 capital (to risk-weighted assets) | 13.8 | 13.0 | 12.8 | 13.5 | 14.4 | 15.6 | 17.2 | |||||||||||||||||||||
Tier 1 capital (to adjusted total assets) | 10.2 | 9.4 | 9.4 | 9.8 | 10.3 | 10.9 | 10.7 | |||||||||||||||||||||
Tangible equity (to adjusted total assets) | 10.2 | 9.4 | 9.4 | 9.8 | 10.3 | 10.9 | 10.7 | |||||||||||||||||||||
Asset Quality Ratios: | ||||||||||||||||||||||||||||
Allowance for loan losses as a percent of total loans | 1.39 | % | 1.45 | % | 1.52 | % | 1.37 | % | 1.58 | % | 1.44 | % | 1.52 | % | ||||||||||||||
Allowance for loan losses as a percent of non-performing loans | 345.04 | 475.24 | 73.87 | 704.52 | 1,457.43 | 326.81 | 2,285.64 | |||||||||||||||||||||
Net charge-offs to average outstanding loans during the period | 0.22 | 0.04 | 0.12 | 0.29 | 0.13 | 0.14 | 0.18 | |||||||||||||||||||||
Non-performing loans as a percent of total loans | 0.41 | 0.31 | 2.08 | 0.20 | 0.11 | 0.45 | 0.07 | |||||||||||||||||||||
Non-performing assets as a percent of total assets | 0.44 | 0.25 | 1.76 | 0.17 | 0.11 | 0.48 | 0.11 | |||||||||||||||||||||
Total non-performing assets and troubled debt restructurings as a percent of total assets | 1.34 | 0.34 | 1.87 | 0.27 | 0.21 | 0.59 | 0.19 | |||||||||||||||||||||
Other Data: | ||||||||||||||||||||||||||||
Number of offices | 7 | 7 | 7 | 7 | 5 | 5 | 4 | |||||||||||||||||||||
Number of deposit accounts | 15,277 | 15,090 | 15,296 | 14,769 | 13,482 | 12,726 | 12,195 | |||||||||||||||||||||
Number of loans | 3,135 | 3,384 | 3,297 | 3,442 | 3,292 | 3,244 | 3,158 |
(1) | Performance ratios for the six months ended June 30, 2009 and 2008 are annualized. | |
(2) | Represents the difference between the weighted average yield on average interest-earning assets and the weighted average cost on average interest-bearing liabilities. Tax exempt income is reported on a tax equivalent basis using a federal marginal tax rate of 34.0%. | |
(3) | Represents net interest income as a percent of average interest-earning assets. Tax exempt income is reported on a tax equivalent basis using a federal marginal tax rate of 34.0%. | |
(4) | Represents other expenses divided by the sum of net interest income and other income. |
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At September 30, | At December 31, | |||||||
(In thousands) | 2009 | 2008 | ||||||
Financial Condition Data: | ||||||||
Total assets | $ | 245,959 | $ | 251,000 | ||||
Cash and cash equivalents | 14,369 | 4,547 | ||||||
Securities available-for-sale | 19,724 | 30,509 | ||||||
Securities held-to-maturity | — | 5 | ||||||
Investments, at cost | 2,899 | 2,899 | ||||||
Loans receivable, net | 191,726 | 196,520 | ||||||
Deposits | 205,561 | 206,493 | ||||||
Securities sold under agreements to repurchase | 808 | 912 | ||||||
Advances from Federal Home Loan Bank | 10,351 | 16,310 | ||||||
Total equity | 25,835 | 24,212 |
For the Three Months | For the Nine Months | |||||||||||||||
Ended September 30, | Ended September 30, | |||||||||||||||
(In thousands) | 2009 | 2008 | 2009 | 2008 | ||||||||||||
Operating Data: | ||||||||||||||||
Interest income | $ | 3,609 | $ | 3,856 | $ | 11,120 | $ | 11,692 | ||||||||
Interest expense | 1,368 | 1,744 | 4,371 | 5,419 | ||||||||||||
Net interest income | 2,241 | 2,112 | 6,749 | 6,273 | ||||||||||||
Provision for loan losses | 428 | 322 | 546 | 609 | ||||||||||||
Net interest income after provision for loan losses | 1,813 | 1,790 | 6,203 | 5,664 | ||||||||||||
Non-interest income | 1,077 | 1,017 | 3,565 | 3,201 | ||||||||||||
Non-interest expense | 2,630 | 2,636 | 8,019 | 8,078 | ||||||||||||
Income before income taxes | 260 | 171 | 1,749 | 787 | ||||||||||||
Income taxes | 52 | 25 | 458 | 178 | ||||||||||||
Net income | $ | 208 | $ | 146 | $ | 1,291 | $ | 609 | ||||||||
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At or For the Three | At or For the Nine | |||||||||||||||
Months Ended | Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Performance Ratios (1): | ||||||||||||||||
Return on average assets | 0.34 | % | 0.24 | % | 0.70 | % | 0.33 | % | ||||||||
Return on average equity | 3.23 | 2.49 | 6.82 | 3.46 | ||||||||||||
Interest rate spread (2) | 3.74 | 3.53 | 3.72 | 3.50 | ||||||||||||
Net interest margin (3) | 3.97 | 3.74 | 3.94 | 3.73 | ||||||||||||
Non-interest expenses to average assets | 4.32 | 4.30 | 4.32 | 4.43 | ||||||||||||
Efficiency ratio (4) | 79.26 | 84.24 | 77.75 | 85.26 | ||||||||||||
Average interest-earning assets to average interest-bearing liabilities | 109.52 | 107.16 | 108.51 | 107.38 | ||||||||||||
Average equity to average assets | 10.58 | 9.54 | 10.20 | 9.65 | ||||||||||||
Capital Ratios: | ||||||||||||||||
Total capital (to risk-weighted assets) | 15.4 | % | 14.2 | % | 15.4 | % | 14.2 | % | ||||||||
Tier 1 capital (to risk-weighted assets) | 14.2 | 12.9 | 14.2 | 12.9 | ||||||||||||
Tier 1 capital (to adjusted total assets) | 10.2 | 9.2 | 10.2 | 9.2 | ||||||||||||
Tangible equity (to adjusted total assets) | 10.2 | 9.2 | 10.2 | 9.2 | ||||||||||||
Asset Quality Ratios: | ||||||||||||||||
Allowance for loan losses as a percent of total loans | 1.59 | % | 1.55 | % | 1.59 | % | 1.55 | % | ||||||||
Allowance for loan losses as a percent of non-performing loans | 151.37 | 75.11 | 151.37 | 75.11 | ||||||||||||
Net charge-offs to average outstanding loans during the period | 0.27 | 0.09 | 0.27 | 0.08 | ||||||||||||
Non-performing loans as a percent of total loans | 1.05 | 2.06 | 1.05 | 2.06 | ||||||||||||
Non-performing assets as a percent of total assets | 1.04 | 1.70 | 1.04 | 1.70 | ||||||||||||
Total non-performing assets and troubled debt restructurings as a percent of total assets | 2.03 | 1.81 | 2.03 | 1.81 |
(1) | Performance ratios are annualized. | |
(2) | Represents the difference between the weighted average yield on average interest-earning assets and the weighted average cost on average interest-bearing liabilities. Tax exempt income is reported on a tax equivalent basis using a federal marginal tax rate of 34.0%. | |
(3) | Represents net interest income as a percent of average interest-earning assets. Tax exempt income is reported on a tax equivalent basis using a federal marginal tax rate of 34.0%. | |
(4) | Represents other expenses divided by the sum of net interest income and other income. |
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Maximum, | ||||||||||||||||||||||||||||||||
Minimum of | Midpoint of | Maximum of | as Adjusted, | |||||||||||||||||||||||||||||
Offering Range | Offering Range | Offering Range | of Offering Range | |||||||||||||||||||||||||||||
1,685,000 | Percent | 2,000,000 | Percent | 2,315,000 | Percent | 2,677,250 | Percent | |||||||||||||||||||||||||
Shares at | of | Shares at | of | Shares at | of | Shares at | of | |||||||||||||||||||||||||
$10.00 | Net | $10.00 | Net | $10.00 | Net | $10.00 | Net | |||||||||||||||||||||||||
(Dollars in thousands) | Per Share | Proceeds | Per Share | Proceeds | Per Share | Proceeds | Per Share | Proceeds | ||||||||||||||||||||||||
Offering proceeds | $ | 16,850 | $ | 20,000 | $ | 23,150 | $ | 26,773 | ||||||||||||||||||||||||
Less: offering expenses | (1,180 | ) | (1,180 | ) | (1,180 | ) | (1,180 | ) | ||||||||||||||||||||||||
Net offering proceeds | $ | 15,670 | 100.00 | % | $ | 18,820 | 100.00 | % | $ | 21,970 | 100.00 | % | $ | 25,593 | 100.00 | % | ||||||||||||||||
Less: | ||||||||||||||||||||||||||||||||
Proceeds contributed to Athens Federal Community Bank | $ | (7,835 | ) | (50.00 | )% | $ | (9,410 | ) | (50.00 | )% | $ | (10,985 | ) | (50.00 | )% | $ | (12,797 | ) | (50.00 | )% | ||||||||||||
Proceeds used for loan to employee stock ownership plan | (1,428 | ) | (9.11 | ) | (1,680 | ) | (8.93 | ) | (1,932 | ) | (8.79 | ) | (2,222 | ) | (8.68 | ) | ||||||||||||||||
Proceeds contributed to foundation | (100 | ) | (0.64 | )% | (100 | ) | (0.53 | )% | (100 | ) | (0.46 | )% | (100 | ) | (0.39 | )% | ||||||||||||||||
Proceeds remaining for Athens Bancshares Corporation (1) | $ | 6,307 | 40.25 | % | $ | 7,630 | 40.54 | % | $ | 8,953 | 40.75 | % | $ | 10,474 | 40.93 | % | ||||||||||||||||
(1) | Following the completion of the stock offering and in accordance with applicable regulations, Athens Bancshares Corporation may purchase shares of its common stock in the open market in order to grant awards of restricted stock under its proposed equity incentive plan. Assuming a market price of $10.00 per share at the time of purchase, the cost of acquiring the shares would be approximately $714,000 (71,400 shares) at the minimum of the offering range, $840,000 (84,000 shares) at the midpoint of the offering range, $966,000 (96,600 shares) at the maximum of the offering range and $1.1 million (111,090 shares) at the maximum, as adjusted, of the offering range. See “Pro Forma Data”and“Our Management — Benefit Plans — Nonqualified Deferred Compensation — Future Equity Incentive Plan.” | |
• | to invest in securities; | ||
• | to pay dividends to shareholders; | ||
• | to repurchase shares of its common stock, subject to regulatory restrictions; | ||
• | to finance the possible acquisition of financial institutions or other businesses that are related to banking, although we currently have no definitive plans or commitments regarding potential acquisition opportunities; and | ||
• | for general corporate purposes. |
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• | to fund new loans; | ||
• | to invest in securities; | ||
• | to finance the possible expansion of its business activities through the establishment of new branch offices and/or the acquisition of other financial institutions or financial services companies, although we currently have no definitive plans or commitments regarding potential expansion or acquisition opportunities; and | ||
• | for general corporate purposes. |
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Pro Forma | ||||||||||||||||||||
Capitalization Based Upon the Sale of | ||||||||||||||||||||
1,685,000 | 2,000,000 | 2,315,000 | 2,677,250 | |||||||||||||||||
Capitalization | Shares at | Shares at | Shares at | Shares at | ||||||||||||||||
as of | $10.00 | $10.00 | $10.00 | $10.00 | ||||||||||||||||
(Dollars in thousands, except per share amounts) | June 30, 2009 | Per Share | Per Share | Per Share | Per Share | |||||||||||||||
Deposits (1) | $ | 202,920 | $ | 202,920 | $ | 202,920 | $ | 202,920 | $ | 202,920 | ||||||||||
Borrowings | 11,350 | 11,350 | 11,350 | 11,350 | 11,350 | |||||||||||||||
Total deposits and borrowed funds | $ | 214,270 | $ | 214,270 | $ | 214,270 | $ | 214,270 | $ | 214,270 | ||||||||||
Shareholders’ equity: | ||||||||||||||||||||
Preferred stock: | ||||||||||||||||||||
10,000,000 shares, $0.01 par value per share, authorized; none issued or outstanding | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Common stock: | ||||||||||||||||||||
50,000,000 shares, $0.01 par value per share, authorized; specified number of shares assumed to be issued and outstanding (2) | — | 18 | 21 | 24 | 28 | |||||||||||||||
Additional paid-in capital | — | 15,652 | 18,799 | 21,946 | 25,565 | |||||||||||||||
Retained earnings (3) | 25,237 | 25,237 | 25,237 | 25,237 | 25,237 | |||||||||||||||
Accumulated other comprehensive income | 94 | 94 | 94 | 94 | 94 | |||||||||||||||
Shares issued to the foundation | — | 1,000 | 1,000 | 1,000 | 1,000 | |||||||||||||||
Less : | ||||||||||||||||||||
Charitable foundation contribution expense (4) | — | 726 | 726 | 726 | 726 | |||||||||||||||
Common stock acquired by employee stock ownership plan (5) | — | 1,428 | 1,680 | 1,932 | 2,222 | |||||||||||||||
Common stock to be acquired by equity incentive plan (6) | — | 714 | 840 | 966 | 1,111 | |||||||||||||||
Total shareholders’ equity | $ | 25,331 | $ | 39,133 | $ | 41,905 | $ | 44,677 | $ | 457,865 | ||||||||||
Shareholders’ equity to assets (1) | 10.4 | % | 15.2 | % | 16.1 | % | 17.1 | % | 18.0 | % | ||||||||||
(1) | Does not reflect withdrawals from deposit accounts for the purchase of common stock in the offering. Withdrawals to purchase common stock will reduce pro forma deposits and assets by the amounts of the withdrawals. | |
(2) | Reflects total issued and outstanding shares of 1,785,000, 2,100,000, 2,415,000 and 2,777,250 at the minimum, midpoint, maximum and adjusted maximum of the offering range, respectively. | |
(3) | Retained earnings are restricted by applicable regulatory capital requirements. | |
(4) | Represents the expense, net of tax, of the contribution of common stock and cash to the Athens Federal Foundation, based on an estimated tax rate of 34.0%. | |
(5) | Assumes that 8% of the sum of the common stock sold in the offering and contributed to the charitable foundation will be acquired by the employee stock ownership plan in the offering with funds borrowed from Athens Bancshares Corporation. Under generally accepted accounting principles, the amount of common stock to be purchased by the employee stock ownership plan represents unearned compensation and is, accordingly, reflected as a reduction of capital and a liability to the employee stock ownership plan. As shares are released to plan participants’ accounts, a compensation expense will be charged, along with related tax benefit, and a reduction in the charge against capital will occur in the amount of the compensation expense recognized. Since the funds are borrowed from Athens Bancshares Corporation, the borrowing will |
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be eliminated in consolidation and no liability or interest expense will be reflected in the financial statements of Athens Federal Community Bank. The loan will be repaid principally through Athens Federal Community Bank’s contributions to the employee stock ownership plan and dividends payable on common stock held by the plan over the anticipated 15-year term of the loan. See“Our Management — Benefit Plans — Employee Stock Ownership Plan.” | ||
(6) | Assumes the purchase in the open market at $10.00 per share, for restricted stock awards under the proposed equity incentive plan, of a number of shares equal to 4% of the sum of the shares of common stock sold in the offering and contributed to the charitable foundation. The shares are reflected as a reduction of shareholders’ equity. The equity incentive plan will be submitted to shareholders for approval at a meeting following the offering. See“Risk Factors — Issuance of shares for benefit programs may dilute your ownership interest,” “Pro Forma Data”and“Our Management — Benefit Plans — Future Equity Incentive Plan.” |
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Pro Forma at June 30, 2009 | ||||||||||||||||||||||||||||||||||||||||
Maximum, as | ||||||||||||||||||||||||||||||||||||||||
Minimum of | Midpoint of | Maximum of | Adjusted, of | |||||||||||||||||||||||||||||||||||||
Offering Range | Offering Range | Offering Range | Offering Range | |||||||||||||||||||||||||||||||||||||
Historical at | 1,685,000 Shares | 2,000,000 Shares | 2,315,000 Shares | 2,677,250 Shares | ||||||||||||||||||||||||||||||||||||
June 30, 2009 | At $10.00 Per Share | At $10.00 Per Share | At $10.00 Per Share | At $10.00 | Per Share | |||||||||||||||||||||||||||||||||||
Percent | Percent | Percent | Percent | Percent | ||||||||||||||||||||||||||||||||||||
of | of | of | of | of | ||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | Amount | Assets (1) | Amount | Assets | Amount | Assets | Amount | Assets | Amount | Assets | ||||||||||||||||||||||||||||||
Total capital under generally accepted accounting principles | $ | 25,331 | 10.4 | % | $ | 31,738 | 12.7 | % | $ | 33,061 | 13.1 | % | $ | 34,384 | 13.5 | % | $ | 35,906 | 14.0 | % | ||||||||||||||||||||
Tangible Capital: | ||||||||||||||||||||||||||||||||||||||||
Capital level (2) | $ | 24,682 | 10.2 | % | $ | 31,089 | 12.4 | % | $ | 32,412 | 12.9 | % | $ | 33,735 | 13.3 | % | $ | 35,257 | 13.8 | % | ||||||||||||||||||||
Requirement | 3,635 | 1.5 | 3,752 | 1.5 | 3,776 | 1.5 | 3,799 | 1.5 | 3,827 | 1.5 | ||||||||||||||||||||||||||||||
Excess | $ | 21,047 | 8.7 | % | $ | 27,337 | 10.9 | % | $ | 28,636 | 11.4 | % | $ | 29,936 | 11.8 | % | $ | 31,430 | 12.3 | % | ||||||||||||||||||||
Core Capital: | ||||||||||||||||||||||||||||||||||||||||
Capital level (2) | $ | 24,682 | 10.2 | % | $ | 31,089 | 12.4 | % | $ | 32,412 | 12.9 | % | $ | 33,735 | 13.3 | % | $ | 35,257 | 13.8 | % | ||||||||||||||||||||
Requirement | 9,692 | 4.0 | 10,006 | 4.0 | 10,069 | 4.0 | 10,132 | 4.0 | 10,204 | 4.0 | ||||||||||||||||||||||||||||||
Excess | $ | 14,990 | 6.2 | % | $ | 21,083 | 8.4 | % | $ | 22,343 | 8.9 | % | 23,603 | 9.3 | % | $ | 25,053 | 9.8 | % | |||||||||||||||||||||
Tier 1 Risk-Based Capital: | ||||||||||||||||||||||||||||||||||||||||
Capital level | $ | 24,682 | 13.8 | % | $ | 31,089 | 17.2 | % | $ | 32,412 | 17.9 | % | $ | 33,735 | 18.6 | % | $ | 35,257 | 19.4 | % | ||||||||||||||||||||
Requirement | 7,163 | 4.0 | 7,226 | 4.0 | 7,239 | 4.0 | 7,251 | 4.0 | 7,266 | 4.0 | ||||||||||||||||||||||||||||||
Excess | $ | 17,519 | 9.8 | % | $ | 23,863 | 13.2 | % | $ | 25,173 | 13.9 | % | $ | 26,484 | 14.6 | % | $ | 27,991 | 15.4 | % | ||||||||||||||||||||
Total Risk-Based Capital: | ||||||||||||||||||||||||||||||||||||||||
Total risk-based capital (3) | $ | 26,927 | 15.0 | % | $ | 33,334 | 18.5 | % | $ | 34,657 | 19.2 | % | $ | 35,980 | 19.8 | % | $ | 37,502 | 20.6 | % | ||||||||||||||||||||
Requirement | 14,327 | 8.0 | 14,452 | 8.0 | 14,477 | 8.0 | 14,503 | 8.0 | 14,532 | 8.0 | ||||||||||||||||||||||||||||||
Excess | $ | 12,600 | 7.0 | % | $ | 18,882 | 10.5 | % | $ | 20,180 | 11.2 | % | $ | 21,477 | 11.8 | % | $ | 22,970 | 12.6 | % | ||||||||||||||||||||
Reconciliation of capital infusion to Athens Federal Community Bank: | ||||||||||||||||||||||||||||||||||||||||
Net proceeds of offering | $ | 15,670 | $ | 18,820 | $ | 21,970 | $ | 25,593 | ||||||||||||||||||||||||||||||||
Proceeds to Athens Federal Community Bank | 7,835 | 9,410 | 10,985 | 12,797 | ||||||||||||||||||||||||||||||||||||
Less: stock acquired by ESOP | 1,428 | 1,680 | 1,932 | 2,222 | ||||||||||||||||||||||||||||||||||||
Pro forma increase in GAAP and regulatory capital | $ | 6,407 | $ | 7,730 | $ | 9,053 | $ | 10,575 | ||||||||||||||||||||||||||||||||
(1) | Tangible capital and core capital levels are shown as a percentage of adjusted total assets of $242.3 million. Risk-based capital levels are shown as a percentage of risk-weighted assets of $179.1 million. | |
(2) | See note 10 of the notes to consolidated financial statements for a reconciliation of total capital under generally accepted accounting principles and each of tangible capital, core capital, Tier 1 risked based capital and total risk-based capital. | |
(3) | Pro forma amounts and percentages assume net proceeds are invested in assets that carry a 20% risk-weighting. |
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• | All shares of stock will be sold in the subscription and community offerings; | ||
• | Our employee stock ownership plan will purchase a number of shares equal to 8% of the sum of the shares sold in the offering and contributed to the charitable foundation with a loan from Athens Bancshares Corporation that will be repaid in equal installments over 15 years; | ||
• | Keefe, Bruyette & Woods, Inc. will receive a success fee equal to the greater of: (i) $200,000 or (ii) 1.125% of the aggregate purchase price of the shares sold in the offering, except that no fee will be paid with respect to (a) shares purchased by the employee stock ownership plan or by our officers, directors and employees and members of their immediate families and (b) shares contributed to the charitable foundation; | ||
• | Total expenses of the offering, excluding fees paid to Keefe, Bruyette & Woods, Inc., will be approximately $920,000; and | ||
• | We will make a charitable contribution of 100,000 shares of Athens Bancshares Corporation, with an assumed value of $10.00 per share, and $100,000 in cash. |
• | The final column gives effect to a 15% increase in the offering range, which may occur without any further notice if Keller & Company increases its appraisal to reflect the results of this offering, changes in our financial condition or results of operations or changes in market conditions after the offering begins. See“The Conversion and Stock Offering — How We Determined the Offering Range and the $10.00 Per Share Purchase Price.” | ||
• | Since funds on deposit at Athens Federal Community Bank may be withdrawn to purchase shares of common stock, the amount of funds available for investment will be reduced by the amount of |
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withdrawals for stock purchases. The pro forma tables do not reflect withdrawals from deposit accounts. | |||
• | Historical per share amounts have been computed as if the shares of common stock expected to be issued in the offering had been outstanding at the beginning of the period covered by the table. However, neither historical nor pro forma shareholders’ equity has been adjusted to reflect the investment of the estimated net proceeds from the sale of the shares in the offering, the additional employee stock ownership plan expense or the proposed equity incentive plan. | ||
• | Pro forma shareholders’ equity (“book value”) represents the difference between the stated amounts of our assets and liabilities. Pro forma tangible shareholders’ equity excludes intangible assets. Book value amounts do not represent fair market values or amounts available for distribution to shareholders in the unlikely event of liquidation. The amounts shown do not reflect the federal income tax consequences of the restoration to income of Athens Federal Community Bank’s special bad debt reserves for income tax purposes or give effect to the liquidation account in the event of liquidation, which would be required in the unlikely event of liquidation. See“Federal and State Taxation”and“The Conversion and Stock Offering — Effects of Conversion to Stock Form — Liquidation Account.” | ||
• | The amounts shown as pro forma shareholders’ equity per share do not represent possible future price appreciation of our common stock. |
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Six Months Ended June 30, 2009 | ||||||||||||||||
Maximum, as | ||||||||||||||||
Minimum of | Midpoint of | Maximum of | Adjusted, of | |||||||||||||
Offering | Offering | Offering | Offering | |||||||||||||
Range | Range | Range | Range | |||||||||||||
1,685,000 | 2,000,000 | 2,315,000 | 2,677,250 | |||||||||||||
Shares | Shares | Shares | Shares | |||||||||||||
at $10.00 | at $10.00 | at $10.00 | at $10.00 | |||||||||||||
(Dollars in thousands, except per share amounts) | Per Share | Per Share | Per Share | Per Share | ||||||||||||
Gross proceeds | $ | 16,850 | $ | 20,000 | $ | 23,150 | $ | 26,773 | ||||||||
Less: offering expenses | (1,180 | ) | (1,180 | ) | (1,180 | ) | (1,180 | ) | ||||||||
Estimated net conversion proceeds | 15,670 | 18,820 | 21,970 | 25,593 | ||||||||||||
Less: cash contribution to charitable foundation | (100 | ) | (100 | ) | (100 | ) | (100 | ) | ||||||||
Less: common stock acquired by employee stock ownership plan (1) | (1,428 | ) | (1,680 | ) | (1,932 | ) | (2,222 | ) | ||||||||
Less: common stock to be acquired by equity incentive plan (2) | (714 | ) | (840 | ) | (966 | ) | (1,111 | ) | ||||||||
Net investable proceeds | $ | 13,428 | $ | 16,200 | $ | 18,972 | $ | 22,160 | ||||||||
Pro Forma Net Income: | ||||||||||||||||
Pro forma net income (loss) (3): | ||||||||||||||||
Historical | $ | 1,084 | $ | 1,084 | $ | 1,084 | $ | 1,084 | ||||||||
Pro forma income on net investable proceeds | 52 | 63 | 74 | 86 | ||||||||||||
Less: pro forma employee stock ownership plan adjustments (1) | (31 | ) | (37 | ) | (43 | ) | (49 | ) | ||||||||
Less: pro forma restricted stock award expense (2) | (47 | ) | (55 | ) | (64 | ) | (73 | ) | ||||||||
Less: pro forma stock option expense (4) | (68 | ) | (80 | ) | (92 | ) | (105 | ) | ||||||||
Pro forma net income (loss) | $ | 990 | $ | 975 | $ | 959 | $ | 943 | ||||||||
Pro forma net income (loss) per share (3): | ||||||||||||||||
Historical | $ | 0.66 | $ | 0.56 | $ | 0.49 | $ | 0.42 | ||||||||
Pro forma income on net investable proceeds | 0.03 | 0.03 | 0.03 | 0.03 | ||||||||||||
Less: pro forma employee stock ownership plan adjustments (1) | (0.02 | ) | (0.02 | ) | (0.02 | ) | (0.02 | ) | ||||||||
Less: pro forma restricted stock award expense (2) | �� | (0.03 | ) | (0.03 | ) | (0.03 | ) | (0.03 | ) | |||||||
Less: pro forma stock option expense (4) | (0.04 | ) | (0.04 | ) | (0.04 | ) | (0.04 | ) | ||||||||
Pro forma net income (loss) per share | $ | 0.60 | $ | 0.50 | $ | 0.43 | $ | 0.36 | ||||||||
Offering price as a multiple of pro forma net income per share (annualized) | 8.33 | x | 10.00 | x | 11.63 | x | 13.89 | x | ||||||||
Number of shares used to calculate pro forma net income per share (5) | 1,646,960 | 1,937,600 | 2,228,240 | 2,562,476 | ||||||||||||
Pro Forma Shareholders’ Equity: | ||||||||||||||||
Pro forma shareholders’ equity (book value) (5): | ||||||||||||||||
Historical | $ | 25,331 | $ | 25,331 | $ | 25,331 | $ | 25,331 | ||||||||
Estimated net proceeds | 15,670 | 18,820 | 21,970 | 25,593 | ||||||||||||
Plus: common stock issued to charitable foundation | 1,000 | 1,000 | 1,000 | 1,000 | ||||||||||||
Less: expense net of tax of contribution to charitable foundation | (726 | ) | (726 | ) | (726 | ) | (726 | ) | ||||||||
Less: common stock acquired by employee stock ownership plan (1) | (1,428 | ) | (1,680 | ) | (1,932 | ) | (2,222 | ) | ||||||||
Less: common stock to be acquired by equity incentive plan (2) | (714 | ) | (840 | ) | (966 | ) | (1,111 | ) | ||||||||
Pro forma shareholders’ equity | $ | 39,133 | $ | 41,905 | $ | 44,677 | $ | 47,865 | ||||||||
Pro forma shareholders’ equity per share (5): | ||||||||||||||||
Historical | $ | 14.19 | $ | 12.06 | $ | 10.49 | $ | 9.12 | ||||||||
Estimated net proceeds | 8.78 | 8.96 | 9.10 | 9.22 | ||||||||||||
Plus: common stock issued to charitable foundation | 0.56 | 0.48 | 0.41 | 0.36 | ||||||||||||
Less: expense net of tax contribution to charitable foundation | (0.41 | ) | (0.35 | ) | (0.30 | ) | (0.26 | ) | ||||||||
Less: common stock acquired by employee stock ownership plan (1) | (0.80 | ) | (0.80 | ) | (0.80 | ) | (0.80 | ) | ||||||||
Less: common stock to be acquired by equity incentive plan (2) | (0.40 | ) | (0.40 | ) | (0.40 | ) | (0.40 | ) | ||||||||
Pro forma shareholders’ equity per share | $ | 21.92 | $ | 19.95 | $ | 18.50 | $ | 17.24 | ||||||||
Offering price as a percentage of pro forma shareholders’ equity per share | 45.62 | % | 50.13 | % | 54.05 | % | 58.00 | % | ||||||||
Number of shares used to calculate pro forma shareholders’ equity per share (5) | 1,785,000 | 2,100,000 | 2,415,000 | 2,777,250 |
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Year Ended December 31, 2008 | ||||||||||||||||
Maximum, as | ||||||||||||||||
Minimum of | Midpoint of | Maximum of | Adjusted, of | |||||||||||||
Offering | Offering | Offering | Offering | |||||||||||||
Range | Range | Range | Range | |||||||||||||
1,685,000 | 2,000,000 | 2,315,000 | 2,677,250 | |||||||||||||
Shares | Shares | Shares | Shares | |||||||||||||
at $10.00 | at $10.00 | at $10.00 | at $10.00 | |||||||||||||
(Dollars in thousands, except per share amounts) | Per Share | Per Share | Per Share | Per Share | ||||||||||||
Gross proceeds | $ | 16,850 | $ | 20,000 | $ | 23,150 | $ | 26,773 | ||||||||
Less: offering expenses | (1,180 | ) | (1,180 | ) | (1,180 | ) | (1,180 | ) | ||||||||
Estimated net conversion proceeds | 15,670 | 18,820 | 21,970 | 25,593 | ||||||||||||
Less: cash contribution to charitable foundation | (100 | ) | (100 | ) | (100 | ) | (100 | ) | ||||||||
Less: common stock acquired by employee stock ownership plan (1) | (1,428 | ) | (1,680 | ) | (1,932 | ) | (2,222 | ) | ||||||||
Less: common stock to be acquired by equity incentive plan (2) | (714 | ) | (840 | ) | (966 | ) | (1,111 | ) | ||||||||
Net investable proceeds | $ | 13,428 | $ | 16,200 | $ | 18,972 | $ | 22,160 | ||||||||
Pro Forma Net Income: | ||||||||||||||||
Pro forma net income (loss) (3): | ||||||||||||||||
Historical | $ | 1,109 | $ | 1,109 | $ | 1,109 | $ | 1,109 | ||||||||
Pro forma income on net investable proceeds | 77 | 93 | 109 | 127 | ||||||||||||
Less: pro forma employee stock ownership plan adjustments (1) | (63 | ) | (74 | ) | (85 | ) | (98 | ) | ||||||||
Less: pro forma restricted stock award expense (2) | (94 | ) | (111 | ) | (128 | ) | (147 | ) | ||||||||
Less: pro forma stock option expense (4) | (136 | ) | (159 | ) | (183 | ) | (211 | ) | ||||||||
Pro forma net income (loss) | $ | 893 | $ | 858 | $ | 822 | $ | 780 | ||||||||
Pro forma net income (loss) per share (3): | ||||||||||||||||
Historical | $ | 0.67 | $ | 0.57 | $ | 0.50 | $ | 0.43 | ||||||||
Pro forma income on net investable proceeds | 0.05 | 0.05 | 0.05 | 0.05 | ||||||||||||
Less: pro forma employee stock ownership plan adjustments (1) | (0.04 | ) | (0.04 | ) | (0.04 | ) | (0.04 | ) | ||||||||
Less: pro forma restricted stock award expense (2) | (0.06 | ) | (0.06 | ) | (0.06 | ) | (0.06 | ) | ||||||||
Less: pro forma stock option expense (4) | (0.08 | ) | (0.08 | ) | (0.08 | ) | (0.08 | ) | ||||||||
Pro forma net income (loss) per share | $ | 0.54 | $ | 0.44 | $ | 0.37 | $ | 0.30 | ||||||||
Offering price as a multiple of pro forma net income per share | 18.52 | x | 22.73 | x | 27.031 | x | 33.33 | x | ||||||||
Number of shares used to calculate pro forma net income per share (5) | 1,651,720 | 1,943,200 | 2,234,680 | 2,569,882 | ||||||||||||
Pro Forma Shareholders’ Equity: | ||||||||||||||||
Pro forma shareholders’ equity (book value) (5): | ||||||||||||||||
Historical | $ | 24,212 | $ | 24,212 | $ | 24,212 | $ | 24,212 | ||||||||
Estimated net proceeds | 15,670 | 18,820 | 21,970 | 25,593 | ||||||||||||
Plus: common stock issued to charitable foundation | 1,000 | 1,000 | 1,000 | 1,000 | ||||||||||||
Less: expense net of tax of contribution to charitable foundation | (726 | ) | (726 | ) | (726 | ) | (726 | ) | ||||||||
Less: common stock acquired by employee stock ownership plan (1) | (1,428 | ) | (1,680 | ) | (1,932 | ) | (2,222 | ) | ||||||||
Less: common stock to be acquired by equity incentive plan (2) | (714 | ) | (840 | ) | (966 | ) | (1,111 | ) | ||||||||
Pro forma shareholders’ equity | $ | 38,014 | $ | 40,786 | $ | 43,558 | $ | 46,746 | ||||||||
Pro forma shareholders’ equity per share (5): | ||||||||||||||||
Historical | $ | 13.56 | $ | 11.53 | $ | 10.03 | $ | 8.72 | ||||||||
Estimated net proceeds | 8.78 | 8.96 | 9.10 | 9.22 | ||||||||||||
Plus: common stock issued to charitable foundation | 0.56 | 0.48 | 0.41 | 0.36 | ||||||||||||
Less: expense net of tax contribution to charitable foundation | (0.41 | ) | (0.35 | ) | (0.30 | ) | (0.26 | ) | ||||||||
Less: common stock acquired by employee stock ownership plan (1) | (0.80 | ) | (0.80 | ) | (0.80 | ) | (0.80 | ) | ||||||||
Less: common stock to be acquired by equity incentive plan (2) | (0.40 | ) | (0.40 | ) | (0.40 | ) | (0.40 | ) | ||||||||
Pro forma shareholders’ equity per share | $ | 21.29 | $ | 19.42 | $ | 18.04 | $ | 16.84 | ||||||||
Offering price as a percentage of pro forma shareholders’ equity per share | 46.97 | % | 51.49 | % | 55.43 | % | 59.38 | % | ||||||||
Number of shares used to calculate pro forma shareholders’ equity per share (5) | 1,785,000 | 2,100,000 | 2,415,000 | 2,777,250 |
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(1) | Assumes that the employee stock ownership plan will acquire a number of shares of stock equal to 8% of the sum of the shares sold in the offering and contributed to the charitable foundation (142,800, 168,000, 193,200 and 222,180 shares at the minimum, midpoint, maximum and adjusted maximum of the offering range, respectively). The employee stock ownership plan will borrow the funds to acquire these shares from the net offering proceeds retained by Athens Bancshares Corporation. The amount of this borrowing has been reflected as a reduction from gross proceeds to determine estimated net investable proceeds. This borrowing will have an interest rate equal to the prime rate as published in The Wall Street Journal, which is currently 3.25%, and a term of 15 years. Athens Federal Community Bank intends to make contributions to the employee stock ownership plan in amounts at least equal to the principal and interest requirement of the debt. Interest income that Athens Bancshares Corporation will earn on the loan will offset a portion of the compensation expense recorded by Athens Federal Community Bank as it contributes to the employee stock ownership plan. As the debt is paid down, shares will be released for allocation to participants’ accounts and shareholders’ equity will be increased. The adjustment to pro forma net income for the employee stock ownership plan reflects the after-tax compensation expense associated with the plan. Applicable accounting principles require that compensation expense for the employee stock ownership plan be based upon the market value of shares committed to be released and that unallocated shares be excluded from earnings per share computations. An equal number of shares (1/15 of the total, based on a 15-year loan) will be released each year over the term of the loan. The valuation of shares committed to be released would be based upon the average market value of the shares during the year, which, for purposes of this calculation, was assumed to be equal to the $10.00 per share purchase price. If the average market value per share is greater than $10.00 per share, total employee stock ownership plan expense would be greater. See“Our Management — Benefit Plans — Employee Stock Ownership Plan.” | |
(2) | Assumes that Athens Bancshares Corporation will purchase in the open market a number of shares of stock equal to 4% of the sum of the shares sold in the offering and contributed to the charitable foundation (71,400, 84,000, 96,600 and 111,090 shares at the minimum, midpoint, maximum and adjusted maximum of the offering range, respectively), that will be reissued as restricted stock awards under an equity incentive plan to be adopted following the offering. Purchases will be funded with cash on hand at Athens Bancshares Corporation or with dividends paid to Athens Bancshares Corporation by Athens Federal Community Bank. The cost of these shares has been reflected as a reduction from gross proceeds to determine estimated net investable proceeds. In calculating the pro forma effect of the restricted stock awards, it is assumed that the required shareholder approval has been received, that the shares used to fund the awards were acquired at the beginning of the respective period and that the shares were acquired at the $10.00 per share purchase price. The issuance of authorized but unissued shares of the common stock instead of shares repurchased in the open market would dilute the ownership interests of existing shareholders by approximately 3.8%. The adjustment to pro forma net income for the restricted stock awards reflects the after-tax compensation expense associated with the awards. It is assumed that the fair market value of a share of Athens Bancshares Corporation common stock was $10.00 at the time the awards were made, that shares of restricted stock issued under the equity incentive plan vest 20% per year, that compensation expense is recognized on a straight-line basis over each vesting period so that 20% of the value of the shares awarded was an amortized expense during each year, and that the combined federal and state income tax rate was 34%. If the fair market value per share is greater than $10.00 per share on the date shares are awarded under the equity incentive plan, total equity incentive plan expense would be greater. | |
(3) | Does not give effect to the non-recurring expense that is expected to be recognized in late 2009 or early 2010 as a result of the contribution of common stock to the charitable foundation. | |
The following table shows the estimated after-tax expense associated with the contribution to the foundation, as well as pro forma net loss and pro forma net loss per share assuming the contribution to the foundation was expensed during the periods presented. |
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Maximum, as | ||||||||||||||||
Minimum of | Midpoint of | Maximum of | Adjusted, of | |||||||||||||
(Dollars in thousands, except per share amounts) | Offering Range | Offering Range | Offering Range | Offering Range | ||||||||||||
Before-tax expense of contribution to foundation: | ||||||||||||||||
Six months ended June 30, 2009 | $ | 1,100 | $ | 1,100 | $ | 1,100 | $ | 1,100 | ||||||||
Year ended December 31, 2008 | 1,100 | 1,100 | 1,100 | 1,100 | ||||||||||||
After-tax expense of contribution to foundation: | ||||||||||||||||
Six months ended June 30, 2009 | $ | 726 | $ | 726 | $ | 726 | $ | 726 | ||||||||
Year ended December 31, 2008 | 726 | 726 | 726 | 726 | ||||||||||||
Pro forma net income: | ||||||||||||||||
Six months ended June 30, 2009 | $ | 264 | $ | 249 | $ | 233 | $ | 217 | ||||||||
Year ended December 31, 2008 | 167 | 132 | 96 | 54 | ||||||||||||
Pro forma net income per share: | ||||||||||||||||
Six months ended June 30, 2009 | $ | 0.16 | $ | 0.13 | $ | 0.10 | $ | 0.09 | ||||||||
Year ended December 31, 2008 | 0.10 | 0.07 | 0.04 | 0.02 | ||||||||||||
Pro forma tax benefit: | ||||||||||||||||
Six months ended June 30, 2009 | $ | 374 | $ | 374 | $ | 374 | $ | 374 | ||||||||
Year ended December 31, 2008 | 374 | 374 | 374 | 374 |
The before-tax expense of the contribution to the foundation is based upon 100,000 shares being contributed at a cost of $10.00 per share and a $100,000 cash contribution. The pro forma data assume that we will realize 100.0% of the income tax benefit as a result of the contribution to the foundation based on a 34% income tax rate. The realization of the tax benefit is limited annually to 10.0% of our annual taxable income. However, for federal and state tax purposes, we can carry forward any unused portion of the deduction for five years following the year in which the contribution is made. As reflected in the table above, the assumed tax benefit at a 34% tax rate reduces the before-tax expense of the charitable foundation for the year ended December 31, 2008 by $374,000 at each of the minimum, midpoint, maximum and 15% above the maximum of the offering range. See“Summary—We Will Form the Athens Federal Foundation.” | ||
(4) | The adjustment to pro forma net income for stock options reflects the after-tax compensation expense associated with the stock options that may be granted under the equity incentive plan expected to be adopted following the offering. If the equity incentive plan is approved by shareholders, a number of shares equal to 10% of the sum of the number of shares sold in the offering and contributed to the charitable foundation (178,500, 210,000, 241,500 and 277,725 shares at the minimum, midpoint, maximum and adjusted maximum of the offering range, respectively) will be reserved for future issuance upon the exercise of stock options that may be granted under the plan. Using the Black-Scholes option-pricing formula, the options are assumed to have a value of $4.15 for each option, based on the following assumptions: exercise price, $10.00; trading price on date of grant, $10.00; dividend yield, 0%; expected life, 10 years; expected volatility, 22.7%; and risk-free interest rate, 3.56%. Because there currently is no market for Athens Bancshares Corporation common stock, the assumed expected volatility is based on the SNL Index for all publicly-traded thrifts. The dividend yield is assumed to be 0% because there is no history of dividend payments and the board of directors has not expressed an intention to commence dividend payments upon completion of the offering. It is assumed that stock options granted under the equity incentive plan vest 20% per year, that compensation expense is recognized on a straight-line basis over each vesting period so that 20% of the value of the options awarded was an amortized expense during each year, that 25% of the options awarded are non-qualified options and that the combined federal and state income tax rate was 34%. If the fair market value per share is different than $10.00 per share on the date options are awarded under the equity incentive plan, or if the assumptions used in the option-pricing formula are different from those used in preparing this pro forma data, the value of the stock options and the related expense would be different. Applicable accounting standards do not prescribe a specific valuation technique to be used to estimate the fair value of employee stock options. Athens Bancshares Corporation may use a valuation technique other than the Black-Scholes option-pricing formula and that technique may produce a different value. The issuance of authorized but unissued shares of common stock to satisfy option exercises instead of shares repurchased in the open market would dilute the ownership interests of existing shareholders by approximately 9.1%. | |
(5) | The number of shares used to calculate pro forma net income per share is equal to the total number of shares to be outstanding upon completion of the offering, less the number of shares purchased by the employee stock ownership plan not committed to be released within six months or one year following the offering. The number of shares used to calculate pro forma shareholders’ equity per share equals the total number of shares to be outstanding upon completion of the offering. |
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Information With and Without the Foundation
At the Maximum, | ||||||||||||||||||||||||||||||||
At the Minimum | At the Midpoint | At the Maximum | as Adjusted, | |||||||||||||||||||||||||||||
of Estimated | of Estimated | of Estimated | of Estimated | |||||||||||||||||||||||||||||
Valuation Range | Valuation Range | Valuation Range | Valuation Range | |||||||||||||||||||||||||||||
(Dollars in thousands, except per share | With | No | With | No | With | No | With | No | ||||||||||||||||||||||||
amount) | Foundation | Foundation | Foundation | Foundation | Foundation | Foundation | Foundation | Foundation | ||||||||||||||||||||||||
Estimated offering amount (1) | $ | 16,850 | $ | 18,700 | $ | 20,000 | $ | 22,000 | $ | 23,150 | $ | 25,300 | $ | 26,773 | $ | 29,095 | ||||||||||||||||
Estimated pro forma valuation | 17,850 | 18,700 | 21,000 | 22,000 | 24,150 | 25,300 | 27,773 | 29,095 | ||||||||||||||||||||||||
Pro forma total assets | 256,812 | 258,286 | 259,584 | 261,190 | 261,892 | 264,094 | 265,544 | 267,434 | ||||||||||||||||||||||||
Pro forma total liabilities | 217,679 | 217,679 | 217,679 | 217,679 | 217,215 | 217,679 | 217,679 | 217,680 | ||||||||||||||||||||||||
Pro forma shareholders’ equity | 39,133 | 40,607 | 41,905 | 43,511 | 44,677 | 46,415 | 47,865 | 49,754 | ||||||||||||||||||||||||
Pro forma net income (loss) | 990 | 990 | 975 | 974 | 959 | 958 | 943 | 941 | ||||||||||||||||||||||||
Pro forma shareholders’ equity per share | 21.92 | 21.72 | 19.95 | 19.77 | 18.50 | 18.34 | 17.24 | 17.10 | ||||||||||||||||||||||||
Pro forma net income (loss) per share | 0.60 | 0.57 | 0.50 | 0.47 | 0.43 | 0.41 | 0.36 | 0.35 | ||||||||||||||||||||||||
Pro Forma Pricing Ratios: | ||||||||||||||||||||||||||||||||
Offering price as a percentage of pro forma shareholders’ equity | 45.62 | % | 46.04 | % | 50.13 | % | 50.58 | % | 54.05 | % | 54.53 | % | 58.00 | % | 58.48 | % | ||||||||||||||||
Offering price to net income | 8.33 | 8.77 | 10.00 | 10.64 | 11.63 | 12.20 | 13.89 | 14.29 | ||||||||||||||||||||||||
Offering price to assets | 6.95 | 7.24 | 8.09 | 8.42 | 9.22 | 9.58 | 10.46 | 10.88 | ||||||||||||||||||||||||
Pro Forma Financial Ratios: | ||||||||||||||||||||||||||||||||
Return on assets | 0.77 | % | 0.77 | % | 0.75 | % | 0.75 | % | 0.73 | % | 0.73 | % | 0.71 | % | 0.70 | % | ||||||||||||||||
Return on shareholders’ equity | 5.06 | 4.88 | 4.65 | 4.48 | 4.29 | 4.13 | 3.94 | 3.78 | ||||||||||||||||||||||||
Shareholders’ equity to total assets | 15.24 | 15.72 | 16.14 | 16.66 | 17.06 | 17.58 | 18.03 | 18.60 |
(1) | Based on independent valuation prepared by Keller & Company as of August 19, 2009. |
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Net Book Value | ||||||||
Year | Owned/ | at | ||||||
Location | Opened | Leased | June 30, 2009 | |||||
(Dollars in thousands) | ||||||||
Main Office: | ||||||||
Athens Main Office 106 Washington Avenue Athens, Tennessee 37303 | 1962 | Owned | $ | 1,268 | ||||
Branch Offices: | ||||||||
Athens Decatur Pike Office 1103 Decatur Pike Athens, Tennessee 37303 | 1980 | Owned | 200 | |||||
Cleveland Ocoee Street Office 3855 North Ocoee Street Cleveland, Tennessee 37312 | 2007 | Leased (1) | — | |||||
Cleveland 25th Street Office 950 25th Street Cleveland, Tennessee 37311 | 2007 | Leased (2) | — | |||||
Etowah Office 523 Tennessee Avenue Etowah, Tennessee 37331 | 1977 | Owned | 724 | |||||
Madisonville Office 4785 New Highway 68 Madisonville, Tennessee 37875 | 2005 | Owned | 908 | |||||
Sweetwater Office 800 Highway 68 Sweetwater, Tennessee 37874 | 1995 | Owned | 236 | |||||
Other Offices: | ||||||||
Athens Lending Center 106 Hornsby Street Athens, Tennessee 37303 | 1998 | Owned | 526 | |||||
Southland Finance Company 516 South Congress Parkway Athens, Tennessee 37303 | 1996 | Leased (3) | — | |||||
Valley Title Services, LLC d/b/a Sweetwater Valley Title 202 N. White Street Athens, Tennessee 37303 | 2007 | Leased (4) | — | |||||
Valley Title Services, LLC d/b/a Title Company of Monroe County New Highway 68 Sweetwater, Tennessee 37874 | 2007 | Leased (3) | — | |||||
Valley Title Services, LLC 205 Decatur Pike Athens, Tennessee 37303 | 2007 | Owned | 218 |
(1) | Lease expires in February 2012. | |
(2) | Lease expires in December 2017. | |
(3) | Property is leased on a month-to-month basis. | |
(4) | Lease expires in February 2011. |
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Financial Condition and Results of Operations
• | remaining a community-oriented financial institution; | ||
• | continuing our historical focus on residential mortgage lending; | ||
• | expanding our commercial real estate and multi-family lending activities; | ||
• | emphasizing lower cost core deposits to maintain low funding costs; and | ||
• | expanding our market share within our primary market area. |
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At June 30, | At December 31, | |||||||||||||||||||||||||||||||||||||||||||||||
2009 | 2008 | 2007 | 2006 | 2005 | 2004 | |||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | Amount | Percent | Amount | Percent | Amount | Percent | Amount | Percent | Amount | Percent | Amount | Percent | ||||||||||||||||||||||||||||||||||||
Real estate mortgage: | ||||||||||||||||||||||||||||||||||||||||||||||||
Residential one- to four-family | $ | 77,194 | 39.50 | % | $ | 75,297 | 37.62 | % | $ | 71,629 | 39.38 | % | $ | 65,586 | 40.89 | % | $ | 63,663 | 45.04 | % | $ | 59,841 | 48.88 | % | ||||||||||||||||||||||||
Non-residential | 36,196 | 18.52 | 32,295 | 16.14 | 33,710 | 18.53 | 30,699 | 19.14 | 28,760 | 20.35 | 20,477 | 16.73 | ||||||||||||||||||||||||||||||||||||
Multi-family | 14,606 | 7.47 | 11,255 | 5.62 | 6,841 | 3.76 | 3,925 | 2.45 | 2,905 | 2.05 | 946 | 0.77 | ||||||||||||||||||||||||||||||||||||
Residential construction | 8,038 | 4.11 | 13,059 | 6.52 | 10,296 | 5.66 | 8,262 | 5.15 | 6,290 | 4.45 | 2,469 | 2.02 | ||||||||||||||||||||||||||||||||||||
Multi-family construction | 74 | 0.04 | 3,865 | 1.93 | 1,252 | 0.69 | — | — | 571 | 0.40 | — | — | ||||||||||||||||||||||||||||||||||||
Non-residential construction | 4,300 | 2.20 | 11,390 | 5.69 | 8,011 | 4.40 | 6,077 | 3.79 | 2,270 | 1.61 | 1,985 | 1.62 | ||||||||||||||||||||||||||||||||||||
Land | 17,016 | 8.71 | 10,893 | 5.44 | 12,095 | 6.65 | 8,559 | 5.34 | 7,079 | 5.01 | 6,810 | 5.57 | ||||||||||||||||||||||||||||||||||||
Total | 157,424 | 80.55 | 158,054 | 78.96 | 143,834 | 79.07 | 123,108 | 76.76 | 111,538 | 78.91 | 92,528 | 75.59 | ||||||||||||||||||||||||||||||||||||
Commercial business | 12,174 | 6.23 | 14,565 | 7.28 | 9,940 | 5.46 | 14,027 | 8.75 | 7,488 | 5.30 | 8,080 | 6.60 | ||||||||||||||||||||||||||||||||||||
Consumer: | ||||||||||||||||||||||||||||||||||||||||||||||||
Home equity loans and lines of credit | 14,799 | 7.57 | 14,671 | 7.33 | 13,130 | 7.22 | 10,227 | 6.38 | 9,418 | 6.66 | 8,110 | 6.63 | ||||||||||||||||||||||||||||||||||||
Auto loans | 4,561 | 2.33 | 4,905 | 2.45 | 5,133 | 2.82 | 4,710 | 2.94 | 5,315 | 3.76 | 5,127 | 4.19 | ||||||||||||||||||||||||||||||||||||
Loans secured by deposits | 1,497 | 0.77 | 1,546 | 0.77 | 2,331 | 1.28 | 1,203 | 0.75 | 1,125 | 0.79 | 936 | 0.76 | ||||||||||||||||||||||||||||||||||||
Consumer finance loans | 2,153 | 1.10 | 2,600 | 1.30 | 3,367 | 1.85 | 3,505 | 2.19 | 3,260 | 2.31 | 3,052 | 2.49 | ||||||||||||||||||||||||||||||||||||
Other | 2,835 | 1.45 | 3,815 | 1.91 | 4,179 | 2.30 | 3,593 | 2.23 | 3,209 | 2.27 | 4,580 | 3.74 | ||||||||||||||||||||||||||||||||||||
Total | 25,845 | 13.22 | 27,537 | 13.76 | 28,140 | 15.47 | 23,238 | 14.49 | 22,327 | 15.79 | 21,805 | 17.81 | ||||||||||||||||||||||||||||||||||||
Total loans | 195,443 | 100.00 | % | 200,156 | 100.00 | % | 181,914 | 100.00 | % | 160,373 | 100.00 | % | 141,353 | 100.00 | % | 122,413 | 100.00 | % | ||||||||||||||||||||||||||||||
Less: unearned interest and fees | (285 | ) | (361 | ) | (544 | ) | (588 | ) | (534 | ) | (523 | ) | ||||||||||||||||||||||||||||||||||||
Less: net deferred loan origination fees | (183 | ) | (192 | ) | (231 | ) | (198 | ) | (190 | ) | (149 | ) | ||||||||||||||||||||||||||||||||||||
Less: allowance for loan losses | (2,758 | ) | (3,083 | ) | (2,536 | ) | (2,574 | ) | (2,059 | ) | (1,895 | ) | ||||||||||||||||||||||||||||||||||||
Loans receivable, net | $ | 192,217 | $ | 196,520 | $ | 178,603 | $ | 157,013 | $ | 138,570 | $ | 119,846 |
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At June 30, 2009 | ||||||||||||||||||||||||||||
Residential | Non-residential | Commercial | Total | |||||||||||||||||||||||||
(Dollars in thousands) | Real Estate | Real Estate (1) | Construction (2) | Land | Business | Consumer | Loans | |||||||||||||||||||||
Amounts due in: | ||||||||||||||||||||||||||||
One year or less | $ | 5,101 | $ | 10,170 | $ | 11,323 | $ | 6,312 | $ | 7,241 | $ | 5,064 | $ | 45,211 | ||||||||||||||
More than one year through two years | 2,380 | 7,268 | 74 | 485 | 1,887 | 2,787 | 14,881 | |||||||||||||||||||||
More than two years through three years | 2,678 | 14,096 | — | 2,163 | 770 | 3,799 | 23,506 | |||||||||||||||||||||
More than three years through five years | 11,814 | 9,448 | — | 3,208 | 1,852 | 2,942 | 29,264 | |||||||||||||||||||||
More than five years through ten years | 7,107 | 2,538 | — | 2,476 | 424 | 2,199 | 14,744 | |||||||||||||||||||||
More than ten years through fifteen years | 6,599 | 3,633 | — | 931 | — | 8,766 | 19,929 | |||||||||||||||||||||
More than fifteen years | 41,515 | 3,649 | 1,015 | 1,441 | — | 288 | 47,908 | |||||||||||||||||||||
Total | $ | 77,194 | $ | 50,802 | $ | 12,412 | $ | 17,016 | $ | 12,174 | $ | 25,845 | $ | 195,443 | ||||||||||||||
At December 31, 2008 | ||||||||||||||||||||||||||||
Residential | Non-residential | Commercial | Total | |||||||||||||||||||||||||
(Dollars in thousands) | Real Estate | Real Estate (1) | Construction (2) | Land | Business | Consumer | Loans | |||||||||||||||||||||
Amounts due in: | ||||||||||||||||||||||||||||
One year or less | $ | 4,868 | $ | 4,594 | $ | 18,249 | $ | 5,142 | $ | 6,615 | $ | 5,074 | $ | 44,542 | ||||||||||||||
More than one year through two years | 280 | 8,702 | 5,040 | 324 | 878 | 3,069 | 18,293 | |||||||||||||||||||||
More than two years through three years | 3,944 | 8,230 | — | 342 | 962 | 3,310 | 16,788 | |||||||||||||||||||||
More than three years through five years | 8,835 | 13,007 | 781 | 604 | 3,227 | 3,270 | 29,724 | |||||||||||||||||||||
More than five years through ten years | 7,043 | 1,965 | — | 2,563 | — | 2,521 | 14,092 | |||||||||||||||||||||
More than ten years through fifteen years | 7,637 | 4,331 | — | 710 | 2,882 | 9,717 | 25,277 | |||||||||||||||||||||
More than fifteen years | 42,690 | 2,721 | 4,244 | 1,208 | 1 | 576 | 51,440 | |||||||||||||||||||||
Total | $ | 75,297 | $ | 43,550 | $ | 28,314 | $ | 10,893 | $ | 14,565 | $ | 27,537 | $ | 200,156 | ||||||||||||||
(1) | Includes multi-family real estate loans. | |
(2) | Includes residential real estate construction loans, non-residential real estate construction loans and multi-family real estate construction loans. |
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Floating or | ||||||||||||
(In thousands) | Fixed Rates | Adjustable Rates | Total | |||||||||
Residential real estate | $ | 16,765 | $ | 55,328 | $ | 72,093 | ||||||
Non-residential real estate | 22,068 | 18,564 | 40,632 | |||||||||
Construction | — | 1,089 | 1,089 | |||||||||
Land | 1,873 | 8,831 | 10,704 | |||||||||
Commercial business | 3,292 | 1,641 | 4,933 | |||||||||
Consumer | 8,483 | 12,298 | 20,781 | |||||||||
Total | $ | 52,481 | $ | 97,751 | $ | 150,232 | ||||||
Floating or | ||||||||||||
(In thousands) | Fixed Rates | Adjustable Rates | Total | |||||||||
Residential real estate | $ | 15,731 | $ | 54,698 | $ | 70,429 | ||||||
Non-residential real estate | 25,173 | 13,783 | 38,956 | |||||||||
Construction | 2,108 | 7,957 | 10,065 | |||||||||
Land | 1,142 | 4,609 | 5,751 | |||||||||
Commercial business | 7,008 | 942 | 7,950 | |||||||||
Consumer | 9,613 | 12,850 | 22,463 | |||||||||
Total | $ | 60,775 | $ | 94,839 | $ | 155,614 | ||||||
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Six Months Ended | ||||||||||||||||||||
June 30, | Year Ended December 31, | |||||||||||||||||||
(In thousands) | 2009 | 2008 | 2008 | 2007 | 2006 | |||||||||||||||
Total loans at beginning of period | $ | 199,603 | $ | 181,139 | $ | 181,139 | $ | 159,587 | $ | 140,628 | ||||||||||
Loans originated: | ||||||||||||||||||||
Residential real estate | 41,127 | 16,995 | 30,813 | 34,526 | 32,338 | |||||||||||||||
Non-residential real estate | 8,632 | 3,777 | 10,163 | 7,959 | 13,295 | |||||||||||||||
Land | 5,388 | 1,922 | 4,046 | 8,109 | 5,041 | |||||||||||||||
Construction | 5,099 | 10,631 | 23,562 | 23,180 | 23,143 | |||||||||||||||
Commercial business | 3,730 | 10,214 | 14,087 | 15,084 | 14,633 | |||||||||||||||
Consumer | 8,590 | 12,313 | 22,650 | 18,807 | 11,318 | |||||||||||||||
Total loans originated | 72,566 | 55,852 | 105,321 | 107,665 | 99,768 | |||||||||||||||
Loans purchased: | ||||||||||||||||||||
Residential real estate | — | — | — | 1,993 | 499 | |||||||||||||||
Non-residential real estate | — | 1,005 | 1,009 | 2,655 | 502 | |||||||||||||||
Construction | — | — | — | — | — | |||||||||||||||
Commercial business | — | — | — | — | — | |||||||||||||||
Consumer | — | — | — | — | — | |||||||||||||||
Total loans purchased | — | 1,005 | 1,009 | 4,648 | 1,001 | |||||||||||||||
Deduct: | ||||||||||||||||||||
Loan principal repayments | 39,071 | 45,879 | 77,131 | 84,640 | 71,855 | |||||||||||||||
Loan sales | 38,123 | 7,218 | 10,735 | 6,121 | 9,955 | |||||||||||||||
Total repayments and sales | 77,194 | 53,097 | 87,866 | 90,761 | 81,810 | |||||||||||||||
Net loan activity | (4,628 | ) | 3,760 | 18,464 | 21,552 | 18,959 | ||||||||||||||
Total loans at end of period | $ | 194,975 | $ | 184,899 | $ | 199,603 | $ | 181,139 | $ | 159,587 | ||||||||||
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At June 30, | At December 31, | |||||||||||||||||||||||||||||||
2009 | 2008 | 2007 | 2006 | |||||||||||||||||||||||||||||
Amortized | Fair | Amortized | Fair | Amortized | Fair | Amortized | Fair | |||||||||||||||||||||||||
(In thousands) | Cost | Value | Cost | Value | Cost | Value | Cost | Value | ||||||||||||||||||||||||
U.S. government agencies and corporations | $ | 4,625 | $ | 4,640 | $ | 10,545 | $ | 10,649 | $ | 6,743 | $ | 6,676 | $ | 9,242 | $ | 8,968 | ||||||||||||||||
States and political subdivisions | 5,540 | 5,312 | 5,544 | 5,276 | 3,718 | 3,684 | 2,005 | 1,995 | ||||||||||||||||||||||||
Mortgage-backed and related securities | 12,307 | 12,671 | 14,332 | 14,589 | 12,532 | 12,621 | 8,654 | 8,501 | ||||||||||||||||||||||||
Other investment securities available for sale | — | — | — | — | — | — | 2,009 | 2,001 | ||||||||||||||||||||||||
Total securities available for sale and held to maturity | 22,472 | 22,623 | 30,421 | 30,514 | 22,993 | 22,981 | 21,910 | 21,465 | ||||||||||||||||||||||||
Federal Home Loan Bank of Cincinnati common stock | 2,899 | 2,899 | 2,899 | 2,899 | 2,786 | 2,786 | 2,786 | 2,786 | ||||||||||||||||||||||||
Other investment securities held at cost | — | — | — | — | 1,960 | 1,960 | 3,290 | 3,290 | ||||||||||||||||||||||||
Total investments, at cost | 2,899 | 2,899 | 2,899 | 2,899 | 4,746 | 4,746 | 6,076 | 6,076 | ||||||||||||||||||||||||
Total | $ | 25,371 | $ | 25,522 | $ | 33,320 | $ | 33,413 | $ | 27,739 | $ | 27,727 | $ | 27,986 | $ | 27,541 | ||||||||||||||||
At or For the Six | ||||||||||||||||||||
Months Ended | At or For the Year Ended | |||||||||||||||||||
June 30, | December 31, | |||||||||||||||||||
(In thousands) | 2009 | 2008 | 2008 | 2007 | 2006 | |||||||||||||||
Mortgage-backed and related securities: | ||||||||||||||||||||
Mortgage-backed and related securities, beginning of period (1) | $ | 14,589 | $ | 12,621 | $ | 12,621 | $ | 8,501 | $ | 7,126 | ||||||||||
Purchases | — | 4,503 | 4,527 | 5,984 | 3,000 | |||||||||||||||
Sales | — | — | — | — | — | |||||||||||||||
Repayments and prepayments | (2,005 | ) | (1,579 | ) | (2,727 | ) | (2,035 | ) | (1,641 | ) | ||||||||||
Increase (decrease) in net unrealized gain | 87 | (191 | ) | 168 | 171 | 16 | ||||||||||||||
Net increase (decrease) in mortgage-backed securities | (1,918 | ) | 2,733 | 1,968 | 4,120 | 1,375 | ||||||||||||||
Mortgage-backed and related securities, end of period (1) | $ | 12,671 | $ | 15,354 | $ | 14,589 | $ | 12,621 | $ | 8,501 | ||||||||||
Investment securities: | ||||||||||||||||||||
Investment securities, beginning of period (1) | $ | 15,925 | $ | 12,320 | $ | 12,320 | $ | 16,254 | $ | 25,224 | ||||||||||
Purchases | — | 10,051 | 12,051 | 6,355 | 4,290 | |||||||||||||||
Sales | — | (960 | ) | (2,160 | ) | (3,600 | ) | (8,020 | ) | |||||||||||
Maturities | (5,894 | ) | (3,098 | ) | (6,254 | ) | (6,850 | ) | (5,435 | ) | ||||||||||
Increase (decrease) in net unrealized gain | (79 | ) | (84 | ) | (32 | ) | 161 | 195 | ||||||||||||
Net increase (decrease) in investment securities | (5,973 | ) | 5,909 | 3,605 | (3,934 | ) | (8,970 | ) | ||||||||||||
Investment securities, end of period (1) | $ | 9,952 | $ | 18,229 | $ | 15,925 | $ | 12,320 | $ | 16,254 | ||||||||||
(1) | At fair value. |
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More than | More than | |||||||||||||||||||||||||||||||||||||||
One Year | One Year to | Five Years to | More than | |||||||||||||||||||||||||||||||||||||
or Less | Five Years | Ten Years | Ten Years | Total | ||||||||||||||||||||||||||||||||||||
Weighted | Weighted | Weighted | Weighted | Weighted | ||||||||||||||||||||||||||||||||||||
Carrying | Average | Carrying | Average | Carrying | Average | Carrying | Average | Carrying | Average | |||||||||||||||||||||||||||||||
(Dollars in thousands) | Value | Yield | Value | Yield | Value | Yield | Value | Yield | Value | Yield | ||||||||||||||||||||||||||||||
U.S. government agencies and corporations | $ | 1,001 | 3.40 | % | $ | 1,614 | 4.68 | % | $ | 2,025 | 4.99 | % | $ | — | — | % | $ | 4,640 | 4.54 | % | ||||||||||||||||||||
States and political subdivisions | 1,011 | 6.31 | 743 | 5.53 | 589 | 5.50 | 2,969 | 5.65 | 5,312 | 5.74 | ||||||||||||||||||||||||||||||
Mortgage-backed and related securities | 4,357 | 4.68 | 5,689 | 5.19 | 1,699 | 5.16 | 926 | 5.44 | 12,671 | 5.03 | ||||||||||||||||||||||||||||||
Federal Home Loan Bank of Cincinnati common stock | — | — | — | — | — | — | 2,899 | 4.50 | 2,899 | 4.50 | ||||||||||||||||||||||||||||||
Total | $ | 6,369 | 4.73 | % | $ | 8,046 | 5.12 | % | $ | 4,313 | 5.13 | % | $ | 6,794 | 5.13 | % | $ | 25,522 | 5.03 | % | ||||||||||||||||||||
More than | More than | |||||||||||||||||||||||||||||||||||||||
One Year | One Year to | Five Years to | More than | |||||||||||||||||||||||||||||||||||||
or Less | Five Years | Ten Years | Ten Years | Total | ||||||||||||||||||||||||||||||||||||
Weighted | Weighted | Weighted | Weighted | Weighted | ||||||||||||||||||||||||||||||||||||
Carrying | Average | Carrying | Average | Carrying | Average | Carrying | Average | Carrying | Average | |||||||||||||||||||||||||||||||
(Dollars in thousands) | Value | Yield | Value | Yield | Value | Yield | Value | Yield | Value | Yield | ||||||||||||||||||||||||||||||
U.S. government agencies and corporations | $ | 5,037 | 3.61 | % | $ | 1,759 | 4.69 | % | $ | 3,853 | 5.00 | % | $ | — | — | % | $ | 10,649 | 4.29 | % | ||||||||||||||||||||
States and political subdivisions | 1,011 | 6.30 | 730 | 5.53 | 573 | 5.50 | 2,962 | 5.64 | 5,276 | 5.74 | ||||||||||||||||||||||||||||||
Mortgage-backed and related securities | 2,674 | 4.39 | 5,465 | 4.99 | 2,968 | 5.49 | 3,482 | 5.59 | 14,589 | 5.12 | ||||||||||||||||||||||||||||||
Federal Home Loan Bank of Cincinnati common stock | — | — | — | — | — | — | 2,899 | 5.00 | 2,899 | 5.00 | ||||||||||||||||||||||||||||||
Total | $ | 8,722 | 4.16 | % | $ | 7,954 | 4.97 | % | $ | 7,394 | 5.24 | % | $ | 9,343 | 5.42 | % | $ | 33,413 | 4.95 | % | ||||||||||||||||||||
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At June 30, | At December 31, | |||||||||||||||
(In thousands) | 2009 | 2008 | 2007 | 2006 | ||||||||||||
Non-interest-bearing accounts | $ | 7,963 | $ | 7,289 | $ | 7,807 | $ | 11,169 | ||||||||
Demand and NOW accounts | 40,171 | 38,408 | 35,413 | 31,881 | ||||||||||||
Money market accounts | 28,576 | 22,130 | 16,402 | 12,544 | ||||||||||||
Passbook savings accounts | 11,313 | 10,505 | 11,372 | 11,985 | ||||||||||||
Certificates of deposit | 114,897 | 128,161 | 126,350 | 103,635 | ||||||||||||
Total | $ | 202,920 | $ | 206,493 | $ | 197,344 | $ | 171,214 | ||||||||
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Maturity Period | Amount | |||
(In thousands) | ||||
At June 30, 2009: | ||||
Three months or less | $ | 9,085 | ||
Over three through six months | 6,587 | |||
Over six through twelve months | 13,909 | |||
Over twelve months | 17,644 | |||
Total | $ | 47,225 | ||
At December 31, 2008: | ||||
Three months or less | $ | 11,321 | ||
Over three through six months | 8,576 | |||
Over six through twelve months | 14,677 | |||
Over twelve months | 21,870 | |||
Total | $ | 56,444 | ||
At June 30, | At December 31, | |||||||||||||||
(In thousands) | 2009 | 2008 | 2007 | 2006 | ||||||||||||
0.00 - 1.00% | $ | 1,208 | $ | 548 | $ | 203 | $ | 430 | ||||||||
1.01 - 2.00% | 19,133 | 9,109 | 1,875 | 2,855 | ||||||||||||
2.01 - 3.00% | 16,697 | 13,122 | 1,763 | 4,049 | ||||||||||||
3.01 - 4.00% | 22,271 | 37,146 | 19,015 | 24,425 | ||||||||||||
4.01 - 5.00% | 33,420 | 41,344 | 45,705 | 42,736 | ||||||||||||
5.01 - 6.00% | 21,985 | 26,762 | 57,403 | 28,749 | ||||||||||||
6.01 - 7.00% | — | 55 | — | — | ||||||||||||
7.01 - 8.00% | 183 | 75 | 386 | 391 | ||||||||||||
Total | $ | 114,897 | $ | 128,161 | $ | 126,350 | $ | 103,635 | ||||||||
Amount Due | ||||||||||||||||||||||||
Percent of | ||||||||||||||||||||||||
More Than | More Than | Total Time | ||||||||||||||||||||||
Less Than | One Year to | Two Years to | More Than | Deposit | ||||||||||||||||||||
(Dollars in thousands) | One Year | Two Years | Three Years | Three Years | Total | Accounts | ||||||||||||||||||
0.00 - 1.00% | $ | 1,208 | $ | — | $ | — | $ | — | $ | 1,208 | 1.05 | % | ||||||||||||
1.01 - 2.00% | 16,437 | 2,548 | 116 | 32 | 19,133 | 16.65 | ||||||||||||||||||
2.01 - 3.00% | 12,350 | 2,011 | 1,229 | 1,107 | 16,697 | 14.53 | ||||||||||||||||||
3.01 - 4.00% | 14,570 | 3,038 | 812 | 3,851 | 22,271 | 19.39 | ||||||||||||||||||
4.01 - 5.00% | 18,374 | 7,195 | 4,089 | 3,762 | 33,420 | 29.09 | ||||||||||||||||||
5.01 - 6.00% | 7,371 | 4,223 | 8,080 | 2,311 | 21,985 | 19.13 | ||||||||||||||||||
6.01 - 7.00% | — | — | — | — | — | — | ||||||||||||||||||
7.01 - 8.00% | 108 | 75 | — | — | 183 | 0.16 | ||||||||||||||||||
Total | $ | 70,418 | $ | 19,090 | $ | 14,326 | $ | 11,063 | $ | 114,897 | 100.00 | % | ||||||||||||
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Amount Due | ||||||||||||||||||||||||
Percent of | ||||||||||||||||||||||||
More Than | More Than | Total Time | ||||||||||||||||||||||
Less Than | One Year to | Two Years to | More Than | Deposit | ||||||||||||||||||||
(Dollars in thousands) | One Year | Two Years | Three Years | Three Years | Total | Accounts | ||||||||||||||||||
0.00 - 1.00% | $ | 491 | $ | 57 | $ | — | $ | — | $ | 548 | 0.43 | % | ||||||||||||
1.01 - 2.00% | 8,300 | 809 | — | — | 9,109 | 7.11 | ||||||||||||||||||
2.01 - 3.00% | 10,056 | 1,516 | 854 | 696 | 13,122 | 10.24 | ||||||||||||||||||
3.01 - 4.00% | 27,457 | 3,866 | 2,020 | 3,803 | 37,146 | 28.98 | ||||||||||||||||||
4.01 - 5.00% | 21,470 | 10,420 | 5,013 | 4,441 | 41,344 | 32.26 | ||||||||||||||||||
5.01 - 6.00% | 8,088 | 6,006 | 5,836 | 6,832 | 26,762 | 20.88 | ||||||||||||||||||
6.01 - 7.00% | — | — | — | 55 | 55 | 0.04 | ||||||||||||||||||
7.01 - 8.00% | — | — | 75 | — | 75 | 0.06 | ||||||||||||||||||
Total | $ | 75,862 | $ | 22,674 | $ | 13,798 | $ | 15,827 | $ | 128,161 | 100.00 | % | ||||||||||||
Six Months Ended | ||||||||||||||||||||
June 30, | Year Ended December 31, | |||||||||||||||||||
(In thousands) | 2009 | 2008 | 2008 | 2007 | 2006 | |||||||||||||||
Beginning balance | $ | 206,493 | $ | 197,344 | $ | 197,344 | $ | 171,214 | $ | 153,190 | ||||||||||
Increase (decrease) before interest credited | (5,358 | ) | 4,562 | 4,161 | 20,424 | 14,327 | ||||||||||||||
Interest credited | 1,785 | 3,007 | 4,988 | 5,706 | 3,697 | |||||||||||||||
Net increase (decrease) in deposits | (3,573 | ) | 7,569 | 9,149 | 26,130 | 18,024 | ||||||||||||||
Ending balance | $ | 202,920 | $ | 204,913 | $ | 206,493 | $ | 197,344 | $ | 171,214 | ||||||||||
Six Months Ended | ||||||||||||||||||||
June 30, | Year Ended December 31, | |||||||||||||||||||
(In thousands) | 2009 | 2008 | 2008 | 2007 | 2006 | |||||||||||||||
Maximum balance outstanding at any month-end during period: | ||||||||||||||||||||
Federal Home Loan Bank advances | $ | 14,422 | $ | 11,282 | $ | 16,310 | $ | 15,622 | $ | 18,637 | ||||||||||
Securities sold under agreements to repurchase | 1,292 | 2,098 | 2,098 | 1,927 | 2,336 | |||||||||||||||
Average balance outstanding during period: | ||||||||||||||||||||
Federal Home Loan bank advances | $ | 11,573 | $ | 7,226 | $ | 9,690 | $ | 11,035 | $ | 12,956 | ||||||||||
Securities sold under agreements to repurchase | 1,155 | 1,660 | 1,400 | 1,692 | 1,667 | |||||||||||||||
Weighted average interest rate during period: | ||||||||||||||||||||
Federal Home Loan bank advances | 3.68 | % | 3.95 | % | 3.78 | % | 4.13 | % | 4.16 | % | ||||||||||
Securities sold under agreements to repurchase | 0.69 | % | 1.81 | % | 1.62 | % | 2.14 | % | 2.08 | % | ||||||||||
Balance outstanding at end of period: | ||||||||||||||||||||
Federal Home Loan bank advances | $ | 10,378 | $ | 11,282 | $ | 16,310 | $ | 5,532 | $ | 15,630 | ||||||||||
Securities sold under agreements to repurchase | 972 | 1,398 | 912 | 1,151 | 1,681 | |||||||||||||||
Weighted average interest rate at end of period: | ||||||||||||||||||||
Federal Home Loan bank advances | 4.06 | % | 3.74 | % | 3.25 | % | 4.42 | % | 4.23 | % | ||||||||||
Securities sold under agreements to repurchase | 0.73 | % | 1.55 | 0.99 | 2.15 | 2.15 |
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At June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||
2009 | 2009 | 2008 | ||||||||||||||||||||||||||
Interest | Interest | |||||||||||||||||||||||||||
Yield/ | Average | and | Yield/ | Average | and | Yield/ | ||||||||||||||||||||||
(Dollars in thousands) | Cost | Balance | Dividends | Cost | Balance | Dividends | Cost | |||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||
Interest-bearing deposits at other financial institutions | 1.80 | % | $ | 5,522 | $ | 35 | 1.26 | % | $ | 7,237 | $ | 88 | 2.44 | % | ||||||||||||||
Loans | 6.85 | 194,049 | 6,799 | 7.01 | 179,010 | 6,946 | 7.76 | |||||||||||||||||||||
Investment securities | 5.18 | 16,045 | 355 | 4.42 | 16,611 | 555 | 6.68 | |||||||||||||||||||||
Mortgage-backed and related securities | 5.03 | 12,883 | 320 | 4.97 | 14,872 | 182 | 2.45 | |||||||||||||||||||||
Other interest-earning assets | 0.25 | 1,679 | 2 | 0.25 | 5,211 | 65 | 2.48 | |||||||||||||||||||||
Total interest-earning assets | 6.45 | 230,178 | 7,511 | 6.53 | 222,941 | 7,836 | 7.03 | |||||||||||||||||||||
Non-interest-earning assets | 19,440 | 19,091 | ||||||||||||||||||||||||||
Total assets | $ | 249,618 | 242,032 | |||||||||||||||||||||||||
Liabilities and equity: | ||||||||||||||||||||||||||||
Demand and NOW accounts | 0.67 | $ | 41,273 | 173 | 0.84 | $ | 40,392 | 274 | 1.36 | |||||||||||||||||||
Money market accounts | 1.74 | 25,368 | 239 | 1.89 | 19,623 | 281 | 2.87 | |||||||||||||||||||||
Passbook savings accounts | 0.40 | 11,306 | 26 | 0.46 | 11,673 | 43 | 0.74 | |||||||||||||||||||||
Certificates of deposit | 3.75 | 122,396 | 2,348 | 3.84 | 126,820 | 2,919 | 4.60 | |||||||||||||||||||||
Total interest-bearing deposits | 2.63 | 200,343 | 2,786 | 2.78 | 198,508 | 3,517 | 3.54 | |||||||||||||||||||||
Federal Home Loan Bank advances | 4.06 | 11,573 | 213 | 3.68 | 7,226 | 143 | 3.95 | |||||||||||||||||||||
Securities sold under agreements to repurchase | 0.73 | 1,155 | 4 | 0.69 | 1,660 | 15 | 1.81 | |||||||||||||||||||||
Total interest-bearing liabilities | 2.69 | 213,071 | 3,003 | 2.82 | 207,394 | 3,675 | 3.54 | |||||||||||||||||||||
Non-interest-bearing deposits | 8,142 | 7,813 | ||||||||||||||||||||||||||
Other non-interest-bearing liabilities | 3,437 | 3,339 | ||||||||||||||||||||||||||
Total liabilities | 224,650 | 218,546 | ||||||||||||||||||||||||||
Total equity | 24,968 | 23,486 | ||||||||||||||||||||||||||
Total liabilities and equity | $ | 249,618 | $ | 242,032 | ||||||||||||||||||||||||
Net interest income | $ | 4,508 | $ | 4,161 | ||||||||||||||||||||||||
Interest rate spread | 3.71 | 3.49 | ||||||||||||||||||||||||||
Net interest margin | 3.92 | 3.73 | ||||||||||||||||||||||||||
Average interest-earning assets to average interest-bearing liabilities | 108.03 | % | 107.50 | % |
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Year Ended December 31, | ||||||||||||||||||||||||||||||||||||
2008 | 2007 | 2006 | ||||||||||||||||||||||||||||||||||
Interest | Interest | Interest | ||||||||||||||||||||||||||||||||||
Average | and | Yield/ | Average | and | Yield/ | Average | and | Yield/ | ||||||||||||||||||||||||||||
(Dollars in thousands) | Balance | Dividends | Cost | Balance | Dividends | Cost | Balance | Dividends | Cost | |||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||||||
Interest-bearing deposits at other financial institutions | $ | 5,125 | $ | 133 | 2.60 | % | $ | 7,341 | $ | 357 | 4.87 | % | $ | 5,118 | $ | 161 | 3.15 | % | ||||||||||||||||||
Loans | 185,292 | 13,824 | 7.46 | 164,065 | 13,421 | 8.18 | 147,582 | 11,314 | 7.67 | |||||||||||||||||||||||||||
Investment securities | 18,667 | 832 | 4.46 | 20,369 | 976 | 4.79 | 25,050 | 1,042 | 4.16 | |||||||||||||||||||||||||||
Mortgage-backed and related securities | 14,382 | 725 | 5.04 | 9,810 | 473 | 4.82 | 6,436 | 258 | 4.00 | |||||||||||||||||||||||||||
Other interest-earning assets | 2,662 | 66 | 2.47 | 4,493 | 230 | 5.12 | — | — | — | |||||||||||||||||||||||||||
Total interest-earning assets | 226,128 | 15,580 | 6.89 | 206,078 | 15,457 | 7.50 | 184,186 | 12,775 | 6.94 | |||||||||||||||||||||||||||
Non-interest-earning assets | 19,377 | 18,720 | 15,399 | |||||||||||||||||||||||||||||||||
Total assets | 245,505 | 224,798 | 199,585 | |||||||||||||||||||||||||||||||||
Liabilities and equity: | ||||||||||||||||||||||||||||||||||||
Demand and NOW accounts | 40,821 | 517 | 1.27 | 35,450 | 527 | 1.49 | 29,603 | 341 | 1.15 | |||||||||||||||||||||||||||
Money market accounts | 20,726 | 541 | 2.61 | 14,304 | 462 | 3.23 | 12,831 | 337 | 2.62 | |||||||||||||||||||||||||||
Passbook savings accounts | 11,350 | 82 | 0.72 | 11,851 | 95 | 0.80 | 12,908 | 72 | 0.56 | |||||||||||||||||||||||||||
Certificates of deposit | 126,950 | 5,604 | 4.41 | 117,072 | 5,525 | 4.72 | 97,496 | 3,953 | 4.05 | |||||||||||||||||||||||||||
Total interest-bearing deposits | 199,847 | 6,744 | 3.37 | 178,677 | 6,609 | 3.70 | 152,838 | 4,703 | 3.08 | |||||||||||||||||||||||||||
Federal Home Loan Bank advances | 9,690 | 366 | 3.78 | 11,035 | 456 | 4.13 | 12,956 | 539 | 4.16 | |||||||||||||||||||||||||||
Securities sold under agreements to repurchase | 1,400 | 23 | 1.62 | 1,692 | 36 | 2.14 | 1,667 | 35 | 2.08 | |||||||||||||||||||||||||||
Total interest-bearing liabilities | 210,937 | 7,133 | 3.38 | 191,404 | 7,101 | 3.71 | 167,461 | 5,277 | 3.15 | |||||||||||||||||||||||||||
Non-interest-bearing deposits | 7,710 | 8,112 | 7,911 | |||||||||||||||||||||||||||||||||
Other non-interest-bearing liabilities | 3,347 | 2,973 | 2,514 | |||||||||||||||||||||||||||||||||
Total liabilities | 221,994 | 202,489 | 177,886 | |||||||||||||||||||||||||||||||||
Total equity | 23,511 | 22,309 | 21,699 | |||||||||||||||||||||||||||||||||
Total liabilities and equity | $ | 245,505 | $ | 224,798 | $ | 199,585 | ||||||||||||||||||||||||||||||
Net interest income | $ | 8,447 | $ | 8,356 | $ | 7,498 | ||||||||||||||||||||||||||||||
Interest rate spread | 3.51 | 3.79 | 3.79 | |||||||||||||||||||||||||||||||||
Net interest margin | 3.74 | 4.05 | 4.07 | |||||||||||||||||||||||||||||||||
Average interest-earning assets to average interest-bearing liabilities | 107.20 | % | 107.67 | % | 109.99 | % | ||||||||||||||||||||||||||||||
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Six Months Ended June 30, 2009 | Year Ended December 31, 2008 | Year Ended December 31, 2007 | ||||||||||||||||||||||||||||||||||
Compared to | Compared to | Compared to | ||||||||||||||||||||||||||||||||||
Six Months Ended June 30, 2008 | Year Ended December 31, 2007 | Year Ended December 31, 2006 | ||||||||||||||||||||||||||||||||||
Increase (Decrease) | Increase (Decrease) | Increase (Decrease) | ||||||||||||||||||||||||||||||||||
Due to | Due to | Due to | ||||||||||||||||||||||||||||||||||
(In thousands) | Volume | Rate | Net | Volume | Rate | Net | Volume | Rate | Net | |||||||||||||||||||||||||||
Interest income: | ||||||||||||||||||||||||||||||||||||
Interest-bearing deposits at other financial institutions | $ | (42 | ) | $ | (11 | ) | $ | (53 | ) | $ | (108 | ) | $ | (116 | ) | $ | (224 | ) | $ | 70 | $ | 126 | $ | 196 | ||||||||||||
Loans receivable | 1,167 | (1,314 | ) | (147 | ) | 1,736 | (1,333 | ) | 403 | 1,264 | 843 | 2,107 | ||||||||||||||||||||||||
Investment securities | (38 | ) | (162 | ) | (200 | ) | (77 | ) | (68 | ) | (145 | ) | (195 | ) | 129 | (66 | ) | |||||||||||||||||||
Mortgage-backed and related securities | (487 | ) | 625 | 138 | 220 | 32 | 252 | 135 | 80 | 215 | ||||||||||||||||||||||||||
Other interest-earning assets | (88 | ) | 25 | (63 | ) | (93 | ) | (70 | ) | (163 | ) | — | 230 | 230 | ||||||||||||||||||||||
Total interest-earning assets | 512 | (837 | ) | (325 | ) | 1,678 | (1,555 | ) | 123 | 1,274 | 1,408 | 2,682 | ||||||||||||||||||||||||
Interest expense: | ||||||||||||||||||||||||||||||||||||
Deposits | (30 | ) | (702 | ) | (732 | ) | 750 | (615 | ) | 135 | 892 | 1,013 | 1,905 | |||||||||||||||||||||||
Federal Home Loan Bank advances | 172 | (102 | ) | 70 | (56 | ) | (34 | ) | (90 | ) | (80 | ) | (3 | ) | (83 | ) | ||||||||||||||||||||
Securities sold under agreement to repurchase | (9 | ) | (1 | ) | (10 | ) | (6 | ) | (7 | ) | (13 | ) | 1 | 1 | 2 | |||||||||||||||||||||
Total interest-bearing liabilities | 133 | (805 | ) | (672 | ) | 688 | (656 | ) | 32 | 813 | 1,011 | 1,824 | ||||||||||||||||||||||||
Net increase (decrease) in interest income | $ | 379 | $ | (32 | ) | $ | 347 | $ | 990 | $ | (899 | ) | $ | 91 | $ | 461 | $ | 397 | $ | 858 | ||||||||||||||||
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At June 30, | At December 31, | |||||||||||||||||||||||
(Dollars in thousands) | 2009 | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||||
Non-accrual loans: | ||||||||||||||||||||||||
Residential real estate | $ | 443 | $ | 688 | $ | 149 | $ | 93 | $ | 431 | $ | 48 | ||||||||||||
Non-residential real estate | 296 | 2,882 | — | — | — | — | ||||||||||||||||||
Construction | — | 270 | 144 | — | — | — | ||||||||||||||||||
Commercial business | 12 | 280 | — | — | — | — | ||||||||||||||||||
Consumer | 36 | 19 | 23 | 44 | 66 | 35 | ||||||||||||||||||
Total | 787 | 4,139 | 316 | 137 | 497 | 83 | ||||||||||||||||||
Accruing loans past due 90 days or more: | ||||||||||||||||||||||||
Residential real estate | 3 | 3 | — | 27 | — | — | ||||||||||||||||||
Non-residential real estate | — | — | — | — | — | — | ||||||||||||||||||
Construction | — | — | — | — | — | — | ||||||||||||||||||
Commercial business | — | — | — | — | 116 | — | ||||||||||||||||||
Consumer | 9 | 30 | 43 | 16 | 17 | — | ||||||||||||||||||
Total | 12 | 33 | 43 | 43 | 133 | — | ||||||||||||||||||
Total of non-accrual and 90 days or more past due loans | 799 | 4,172 | 359 | 180 | 630 | 83 | ||||||||||||||||||
Real estate owned | 252 | 230 | — | — | 235 | 109 | ||||||||||||||||||
Other non-performing assets | 25 | 26 | 36 | 48 | 42 | 20 | ||||||||||||||||||
Total non-performing assets | 1,076 | 4,428 | 395 | 228 | 907 | 212 | ||||||||||||||||||
Troubled debt restructurings | 2,179 | 267 | 219 | 210 | 214 | 129 | ||||||||||||||||||
Troubled debt restructurings and total non-performing assets | $ | 3,255 | $ | 4,695 | �� | $ | 614 | $ | 438 | $ | 1,121 | $ | 341 | |||||||||||
Total non-performing loans to total loans. | 0.41 | % | 2.08 | % | 0.20 | % | 0.11 | % | 0.45 | % | 0.07 | % | ||||||||||||
Total non-performing loans to total assets | 0.33 | % | 1.66 | % | 0.16 | % | 0.08 | % | 0.33 | % | 0.05 | % | ||||||||||||
Total non-performing assets and troubled debt restructurings to total assets | 1.34 | % | 1.87 | % | 0.27 | % | 0.21 | % | 0.59 | % | 0.19 | % | ||||||||||||
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At June 30, | At December 31, | |||||||||||||||
(In thousands) | 2009 | 2008 | 2007 | 2006 | ||||||||||||
Special mention assets | $ | 2,695 | $ | 2,299 | $ | 3,171 | $ | 2,617 | ||||||||
Substandard assets | 4,461 | 6,514 | 1,122 | 728 | ||||||||||||
Doubtful assets | — | — | — | — | ||||||||||||
Loss assets | 37 | 34 | 47 | 734 | ||||||||||||
Total classified assets | $ | 7,193 | $ | 8,847 | $ | 4,340 | $ | 4,079 | ||||||||
At June 30, | At December 31, | |||||||||||||||||||||||||||||||
2009 | 2008 | |||||||||||||||||||||||||||||||
30-89 Days | 90 Days or More | 30-89 Days | 90 Days or More | |||||||||||||||||||||||||||||
Number | Principal | Number | Principal | Number | Principal | Number | Principal | |||||||||||||||||||||||||
of | Balance | of | Balance | of | Balance | of | Balance | |||||||||||||||||||||||||
(In thousands) | Loans | of Loans | Loans | of Loans | Loans | of Loans | Loans | of Loans | ||||||||||||||||||||||||
Residential real estate | 6 | $ | 247 | 1 | $ | 3 | 10 | $ | 537 | 2 | $ | 3 | ||||||||||||||||||||
Non-residential real estate | 1 | 21 | — | — | 1 | 176 | — | — | ||||||||||||||||||||||||
Construction | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Commercial business | 1 | 21 | — | — | 2 | 20 | — | — | ||||||||||||||||||||||||
Consumer | 38 | 189 | 7 | 9 | 69 | 273 | 8 | 30 | ||||||||||||||||||||||||
Total | 46 | $ | 478 | 8 | $ | 12 | 82 | $ | 1,006 | 10 | $ | 33 | ||||||||||||||||||||
At December 31, | ||||||||||||||||||||||||||||||||
2007 | 2006 | |||||||||||||||||||||||||||||||
30-89 Days | 90 Days or More | 30-89 Days | 90 Days or More | |||||||||||||||||||||||||||||
Number | Principal | Number | Principal | Number | Principal | Number | Principal | |||||||||||||||||||||||||
of | Balance | of | Balance | of | Balance | of | Balance | |||||||||||||||||||||||||
(In thousands) | Loans | of Loans | Loans | of Loans | Loans | of Loans | Loans | of Loans | ||||||||||||||||||||||||
Residential real estate | 11 | $ | 546 | — | $ | — | 9 | $ | 381 | 2 | $ | 27 | ||||||||||||||||||||
Non-residential real estate | 1 | 7 | — | — | 1 | 18 | — | — | ||||||||||||||||||||||||
Construction | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Commercial business | 1 | 14 | — | — | 1 | 9 | — | — | ||||||||||||||||||||||||
Consumer | 47 | 195 | 9 | 43 | 78 | 334 | 6 | 16 | ||||||||||||||||||||||||
Total | 60 | $ | 762 | 9 | $ | 43 | 89 | $ | 742 | 8 | $ | 43 | ||||||||||||||||||||
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At June 30, | At December 31, | |||||||||||||||||||||||||||||||||||
2009 | 2008 | 2007 | ||||||||||||||||||||||||||||||||||
% of | % of | % of | ||||||||||||||||||||||||||||||||||
% of | Loans in | % of | Loans in | % of | Loans in | |||||||||||||||||||||||||||||||
Allowance | Category | Allowance | Category | Allowance | Category | |||||||||||||||||||||||||||||||
to Total | to Total | to Total | to Total | to Total | to Total | |||||||||||||||||||||||||||||||
(Dollars in thousands) | Amount | Allowance | Loans | Amount | Allowance | Loans | Amount | Allowance | Loans | |||||||||||||||||||||||||||
Residential real estate (1) | $ | 766 | 27.77 | % | 51.10 | % | $ | 906 | 29.39 | % | 51.58 | % | $ | 989 | 39.00 | % | 52.41 | % | ||||||||||||||||||
Non-residential real estate (1) | 1,151 | 41.73 | 36.89 | 1,221 | 39.61 | 34.89 | 777 | 30.62 | 34.13 | |||||||||||||||||||||||||||
Commercial business | 396 | 14.35 | 6.22 | 545 | 17.69 | 7.30 | 278 | 10.96 | 5.48 | |||||||||||||||||||||||||||
Consumer | 341 | 12.37 | 5.79 | 398 | 12.90 | 6.23 | 413 | 16.30 | 7.98 | |||||||||||||||||||||||||||
Total | 2,654 | 96.22 | 100.00 | % | 3,070 | 99.59 | 100.00 | % | 2,457 | 96.88 | 100.00 | % | ||||||||||||||||||||||||
Unallocated | 104 | 3.78 | 13 | 0.41 | 79 | 3.12 | ||||||||||||||||||||||||||||||
Total allowance for loan losses | $ | 2,758 | 100.00 | % | $ | 3,083 | 100.00 | % | $ | 2,536 | 100.00 | % | ||||||||||||||||||||||||
At December 31, | ||||||||||||||||||||||||||||||||||||
2006 | 2005 | 2004 | ||||||||||||||||||||||||||||||||||
% of | % of | % of | ||||||||||||||||||||||||||||||||||
% of | Loans in | % of | Loans in | % of | Loans in | |||||||||||||||||||||||||||||||
Allowance | Category | Allowance | Category | Allowance | Category | |||||||||||||||||||||||||||||||
to Total | to Total | to Total | to Total | to Total | to Total | |||||||||||||||||||||||||||||||
(Dollars in thousands) | Amount | Allowance | Loans | Amount | Allowance | Loans | Amount | Allowance | Loans | |||||||||||||||||||||||||||
Residential real estate (1) | $ | 220 | 8.53 | % | 52.61 | % | $ | 235 | 11.41 | % | 56.36 | % | $ | 190 | 10.04 | % | 57.77 | % | ||||||||||||||||||
Non-residential real estate (1) | 504 | 19.58 | 30.83 | 410 | 19.91 | 29.53 | 355 | 18.73 | 24.79 | |||||||||||||||||||||||||||
Commercial business | 1,060 | 41.19 | 8.78 | 223 | 10.83 | 5.32 | 265 | 13.87 | 6.63 | |||||||||||||||||||||||||||
Consumer | 369 | 14.34 | 7.78 | 359 | 17.44 | 8.79 | 379 | 19.98 | 10.81 | |||||||||||||||||||||||||||
Total | 2,153 | 83.64 | 100.00 | % | 1,227 | 59.59 | 100.00 | % | 1,189 | 62.62 | 100.00 | % | ||||||||||||||||||||||||
Unallocated | 421 | 16.36 | 832 | 40.41 | 706 | 37.38 | ||||||||||||||||||||||||||||||
Total allowance for loan losses | $ | 2,574 | 100.00 | % | $ | 2,059 | 100.00 | % | $ | 1,895 | 100.00 | % | ||||||||||||||||||||||||
(1) | Includes construction loans. |
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Six Months Ended | ||||||||||||||||||||||||||||
June 30, | Year Ended December 31, | |||||||||||||||||||||||||||
(Dollars in thousands) | 2009 | 2008 | 2008 | 2007 | 2006 | 2005 | 2004 | |||||||||||||||||||||
Allowance for loan losses at beginning of period | $ | 3,083 | $ | 2,536 | $ | 2,536 | $ | 2,574 | $ | 2,059 | $ | 1,895 | $ | 1,830 | ||||||||||||||
Provision for loan losses | 118 | 287 | 761 | 443 | 704 | 341 | 267 | |||||||||||||||||||||
Charge offs: | ||||||||||||||||||||||||||||
Residential real estate | 41 | — | 30 | 20 | 1 | 45 | 37 | |||||||||||||||||||||
Non-residential real estate | 87 | — | — | — | — | — | — | |||||||||||||||||||||
Construction | — | 31 | 31 | — | — | — | — | |||||||||||||||||||||
Commercial business | 228 | — | 5 | 244 | 10 | — | — | |||||||||||||||||||||
Consumer | 129 | 124 | 258 | 265 | 234 | 213 | 227 | |||||||||||||||||||||
Total charge-offs | 485 | 155 | 324 | 529 | 245 | 258 | 264 | |||||||||||||||||||||
Recoveries: | ||||||||||||||||||||||||||||
Residential real estate | 20 | — | 2 | — | — | 7 | 6 | |||||||||||||||||||||
Non-residential real estate | — | — | — | — | — | — | — | |||||||||||||||||||||
Construction | — | — | — | — | — | — | — | |||||||||||||||||||||
Commercial business | — | — | — | — | — | — | — | |||||||||||||||||||||
Consumer | 22 | 86 | 108 | 48 | 56 | 74 | 56 | |||||||||||||||||||||
Total recoveries | 42 | 86 | 110 | 48 | 56 | 81 | 62 | |||||||||||||||||||||
Net charge-offs (recoveries) | 443 | 69 | 214 | 481 | 189 | 177 | 202 | |||||||||||||||||||||
Allowance for loan losses at end of period | $ | 2,758 | $ | 2,754 | $ | 3,083 | $ | 2,536 | $ | 2,574 | $ | 2,059 | $ | 1,895 | ||||||||||||||
Allowance for loan losses to non-performing loans | 345.04 | % | 475.24 | % | 73.87 | % | 704.52 | % | 1,457.43 | % | 326.81 | % | 2,285.64 | % | ||||||||||||||
Allowance for loan losses to total loans outstanding at the end of the period | 1.39 | % | 1.45 | % | 1.52 | % | 1.37 | % | 1.58 | % | 1.44 | % | 1.52 | % | ||||||||||||||
Net charge-offs (recoveries) to average loans outstanding during the period | 0.22 | % | 0.04 | % | 0.12 | % | 0.29 | % | 0.13 | % | 0.14 | % | 0.18 | % | ||||||||||||||
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Net Portfolio Value as % of | ||||||||||||||||||||||||
Net Portfolio Value | Portfolio Value of Assets | |||||||||||||||||||||||
Basis Point (“bp”) | (Dollars in thousands) | |||||||||||||||||||||||
Change in Rates | $ Amount | $ Change | % Change | NPV Ratio | Change | |||||||||||||||||||
300 | $ | 33,485 | $ | 1,189 | 4 | % | 13.30 | % | 63bp | |||||||||||||||
200 | 33,313 | 1,017 | 3 | % | 13.16 | % | 50bp | |||||||||||||||||
100 | 33,048 | 752 | 2 | % | 13.00 | % | 33bp | |||||||||||||||||
0 | 32,296 | — | — | 12.67 | % | — | ||||||||||||||||||
(100 | ) | 31,013 | (1,283 | ) | (4 | )% | 12.16 | % | (51)bp |
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Payments due by period | ||||||||||||||||||||
Less than | One to | Three to | More Than | |||||||||||||||||
Contractual Obligations | Total | One Year | Three Years | Five Years | Five Years | |||||||||||||||
(In thousands) | ||||||||||||||||||||
At June 30, 2009: | ||||||||||||||||||||
Deferred director fee arrangements | $ | 905 | $ | 188 | $ | 474 | $ | 96 | $ | 147 | ||||||||||
Deferred compensation arrangements | 710 | 35 | 70 | 79 | 526 | |||||||||||||||
Operating lease obligations | 653 | 182 | 288 | 80 | 103 | |||||||||||||||
Federal Home Loan Bank advances | 10,378 | 2,105 | 5,221 | 3,052 | — | |||||||||||||||
Total | $ | 12,646 | $ | 2,510 | $ | 6,053 | $ | 3,307 | $ | 776 | ||||||||||
At December 31, 2008: | ||||||||||||||||||||
Deferred director fee arrangements | $ | 927 | $ | 195 | $ | 470 | $ | 96 | $ | 166 | ||||||||||
Deferred compensation arrangements | 618 | 33 | 71 | 77 | 437 | |||||||||||||||
Operating lease obligations | 751 | 193 | 334 | 100 | 124 | |||||||||||||||
Federal Home Loan Bank advances | 16,310 | 5,992 | 7,225 | 3,093 | — | |||||||||||||||
Total | $ | 18,606 | $ | 6,413 | $ | 8,100 | $ | 3,366 | $ | 727 |
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Six Months Ended | ||||||||||||||||||||
June 30, | Year Ended December 31, | |||||||||||||||||||
(In thousands) | 2009 | 2008 | 2008 | 2007 | 2006 | |||||||||||||||
Investing activities: | ||||||||||||||||||||
Loan purchases | $ | — | $ | 1,005 | $ | 1,009 | $ | 4,648 | $ | 1,001 | ||||||||||
Loan originations | 72,566 | 55,852 | 105,321 | 107,665 | 99,768 | |||||||||||||||
Loan principal repayments | 39,071 | 45,879 | 77,131 | 84,640 | 71,855 | |||||||||||||||
Loan sales | 38,123 | 7,218 | 10,735 | 6,121 | 9,955 | |||||||||||||||
Proceeds from calls, maturities and principal repayments of investment securities | 5,894 | 3,098 | 6,254 | 6,850 | 5,435 | |||||||||||||||
Proceeds from calls, maturities and principal repayments of mortgage-backed and related securities | 2,005 | 1,579 | 2,727 | 2,035 | 1,641 | |||||||||||||||
Proceeds from sales of investment securities available- for-sale | — | 960 | 2,160 | 3,600 | 8,020 | |||||||||||||||
Proceeds from sales of mortgage-backed and related securities available-for-sale | — | — | — | — | — | |||||||||||||||
Purchases of investment securities | — | 10,051 | 12,051 | 6,355 | 4,290 | |||||||||||||||
Purchases of mortgage-backed and related securities | — | 4,503 | 4,527 | 5,984 | 3,000 | |||||||||||||||
Financing activities: | ||||||||||||||||||||
Increase (decrease) in deposits | (3,573 | ) | 7,569 | 9,149 | 26,130 | 18,024 | ||||||||||||||
Increase (decrease) in Federal Home Loan Bank advances | (5,932 | ) | 5,750 | 10,778 | (10,098 | ) | 2,030 | |||||||||||||
Increase (decrease) in securities sold under agreements to repurchase | 60 | 247 | (239 | ) | (530 | ) | 260 |
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Name | Position | |
Jeffrey L. Cunningham | President and Chief Executive Officer of both Athens Bancshares Corporation and Athens Federal Community Bank | |
Michael R. Hutsell | Chief Financial Officer of Athens Bancshares Corporation and Vice President, Chief Operating Officer and Chief Financial Officer of Athens Federal Community Bank | |
Jay Leggett, Jr. | City President—Cleveland of Athens Federal Community Bank | |
Ross A. Millsaps | Vice President and Chief Credit Officer of Athens Federal Community Bank |
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• | the duties and responsibilities of each director; | ||
• | the composition, responsibilities and operation of the board of directors; | ||
• | the establishment and operation of board committees; | ||
• | succession planning; | ||
• | procedures for convening executive sessions of independent directors; | ||
• | the board of directors’ interaction with management and third parties; and | ||
• | the evaluation of the performance of the board of directors and chief executive officer. |
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All Other | ||||||||||||||||||||
Name and Principal Position | Year | Salary (1) | Bonus | Compensation (2) | Total | |||||||||||||||
Jeffrey L. Cunningham President & Chief Executive Officer | 2008 | $ | 249,854 | $ | — | $ | 139,325 | $ | 389,179 | |||||||||||
Michael R. Hutsell Vice President, Chief Operating Officer and Chief Financial Officer | 2008 | 144,200 | — | 18,693 | 162,893 | |||||||||||||||
Jay Leggett, Jr. City President—Cleveland | 2008 | 116,699 | 40,845 | 35,501 | 193,045 |
(1) | For Mr. Cunningham, includes $18,000 received in board fees during the year ended December 31, 2008. | |
(2) | Details of the amounts disclosed in the “All Other Compensation” column are provided in the table below: |
Mr. Cunningham | Mr. Hutsell | Mr. Leggett | ||||||||||
Employer contributions to 401(k) plan | $ | 22,331 | $ | 14,630 | $ | 14,582 | ||||||
Supplemental executive retirement plan | 50,061 | — | — | |||||||||
Deferred compensation credit | 45,033 | (a) | ||||||||||
Perquisites | 21,900 | (b) | — | (c) | 20,919 | (d) | ||||||
Total | $ | 139,325 | $ | 18,693 | $ | 35,501 | ||||||
(a) | Represents a non-cash credit by Athens Federal Community Bank to a deferred compensation account for the benefit of Mr. Cunningham. See“—Current Employment Agreement”below. | |
(b) | Includes an automobile allowance of $15,210 and $6,598 for country club dues and employer paid insurance premiums. | |
(c) | Did not exceed $10,000. | |
(d) | Includes an automobile allowance of $13,140 and $7,769 for country club dues and employer paid insurance premiums. |
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Fees Earned or | ||||||||
Paid in Cash | Total | |||||||
Dr. James L. Carter, Jr. | $ | 18,000 | $ | 18,000 | ||||
Elaine M. Cathcart | 18,000 | 18,000 | ||||||
G. Scott Hannah | 18,000 | 18,000 | ||||||
G. Timothy Howard | 20,700 | 20,700 | ||||||
M. Darrell Murray | 18,900 | 18,900 | ||||||
Lyn B. Thompson | 18,000 | 18,000 | ||||||
Larry D. Wallace | 18,000 | 18,000 |
Board of Directors of Athens Federal Community Bank: | ||||
Monthly Retainer | $ | 1,500 | ||
Additional Monthly Retainer for Chairman of the Board | 500 | |||
Additional Monthly Retainer for Audit Committee Chairperson | 1,000 | |||
Additional Monthly Retainer for Compensation Committee Chairperson | 500 | |||
Board of Directors of Athens Bancshares Corporation: | ||||
Monthly Retainer | $ | 400 |
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Proposed Purchases of Stock in the Offering | ||||||||||||
Percent of Common | ||||||||||||
Stock | ||||||||||||
Outstanding at | ||||||||||||
Minimum | ||||||||||||
Name | Number of Shares | Dollar Amount | of Offering Range | |||||||||
Directors: | ||||||||||||
Dr. James L. Carter, Jr. | 20,000 | $ | 200,000 | 1.1 | % | |||||||
Elaine M. Cathcart | 50,000 | 500,000 | 2.8 | |||||||||
Jeffrey L. Cunningham (1) | 30,000 | 300,000 | 1.7 | |||||||||
G. Scott Hannah | 30,000 | 300,000 | 1.7 | |||||||||
G. Timothy Howard | 7,500 | 75,000 | 0.4 | |||||||||
M. Darrell Murray | 40,000 | 400,000 | 2.2 | |||||||||
Lyn B. Thompson | 35,000 | 350,000 | 2.0 | |||||||||
Larry D. Wallace | 5,000 | 50,000 | 0.3 | |||||||||
Executive Officers Who Are Not Directors: | ||||||||||||
Michael R. Hutsell (1) | 20,000 | 200,000 | 1.1 | |||||||||
Jay Leggett, Jr. (1) | 50,000 | 500,000 | 2.8 | |||||||||
Ross A. Millsaps (1) | 10,000 | 100,000 | 0.6 | |||||||||
All directors and executive officers as a group (11 persons)(1) | 297,500 | $ | 2,975,000 | 16.7 | % |
(1) | Includes an estimated 30,000, 20,000, 15,000 and 10,000 shares to be purchased by Messrs. Cunningham, Hutsell, Leggett and Millsaps, respectively, through self-directed purchases within the Athens Federal Community Bank 401(k) Plan. A 401(k) plan participant who elects to purchase shares in the offering through the 401(k) plan will receive the same subscription priority, and be subject to the same purchase limitations, as if the participant had elected to purchase shares using funds outside the 401(k) plan. |
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• | Truth-In-Lending Act, governing disclosures of credit terms to consumer borrowers; | ||
• | Home Mortgage Disclosure Act of 1975, requiring financial institutions to provide information to enable the public and public officials to determine whether a financial institution is fulfilling its obligation to help meet the housing needs of the community it serves; | ||
• | Equal Credit Opportunity Act, prohibiting discrimination on the basis of race, creed or other prohibited factors in extending credit; | ||
• | Fair Credit Reporting Act of 1978, governing the use and provision of information to credit reporting agencies; |
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• | Fair Debt Collection Act, governing the manner in which consumer debts may be collected by collection agencies; and | ||
• | Rules and regulations of the various federal agencies charged with the responsibility of implementing such federal laws. |
• | Right to Financial Privacy Act, which imposes a duty to maintain confidentiality of consumer financial records and prescribes procedures for complying with administrative subpoenas of financial records; | ||
• | Electronic Funds Transfer Act and Regulation E promulgated thereunder, which governs automatic deposits to and withdrawals from deposit accounts and customers’ rights and liabilities arising from the use of automated teller machines and other electronic banking services; | ||
• | Check Clearing for the 21st Century Act (also known as “Check 21”), which gives “substitute checks,” such as digital check images and copies made from that image, the same legal standing as the original paper check; | ||
• | Title III of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (referred to as the “USA PATRIOT Act”), which significantly expands the responsibilities of financial institutions, including savings and loan associations, in preventing the use of the U.S. financial system to fund terrorist activities. Among other provisions, it requires financial institutions operating in the United States to develop new anti-money laundering compliance programs, due diligence policies and controls to ensure the detection and reporting of money laundering. Such required compliance programs are intended to supplement existing compliance requirements, also applicable to financial institutions, under the Bank Secrecy Act and the Office of Foreign Assets Control Regulations; and | ||
• | The Gramm-Leach-Bliley Act places limitations on the sharing of consumer financial information with unaffiliated third parties. Specifically, the Gramm-Leach-Bliley Act requires all financial institutions offering financial products or services to retail customers to provide such customers with the financial institution’s privacy policy and provide such customers the opportunity to “opt out” of the sharing of personal financial information with unaffiliated third parties. |
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• | increase the capital of Athens Federal Community Bank to support future lending and operational growth; | ||
• | enhance profitability and earnings through reinvesting and leveraging the proceeds, primarily through traditional funding and lending activities; | ||
• | support future branching activities and/or the acquisition of financial services companies; | ||
• | implement equity compensation plans to retain and attract qualified directors, officers and staff to enhance the current incentive-based compensation program; and | ||
• | increase our philanthropic endeavors to the communities we serve through the formation and funding of the Athens Federal Foundation. |
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• | the conversion of Athens Federal Community Bank from the mutual to the stock form of organization will qualify as a reorganization within the meaning of Section 368(a)(1)(F) of the Internal Revenue Code, and no gain or loss will be recognized by account holders and no gain or loss will be recognized by Athens Federal Community Bank by reason of such conversion; | ||
• | no gain or loss will be recognized by Athens Bancshares Corporation upon the sale of shares of common stock in the offering; | ||
• | it is more likely than not that the fair market value of the non-transferable subscription rights to purchase shares of common stock of Athens Bancshares Corporation to be issued to eligible account holders, supplemental eligible account holders and other members is zero and, accordingly, that no income will be realized by eligible account holders, supplemental eligible account holders and other members upon the issuance to them of the subscription rights or upon the exercise of the subscription rights; and | ||
• | it is more likely than not that the tax basis to the holders of shares of common stock purchased in the stock offering pursuant to the exercise of the subscription rights will be the amount paid therefor, and that the holding period for such shares of common stock will begin on the date of completion of the stock offering. |
• | Persons with deposits in Athens Federal Community Bank with balances aggregating $50 or more (“qualifying deposits”) as of the close of business on March 31, 2008 (“eligible account holders”). For this purpose, deposit accounts include all savings, time and demand accounts. |
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• | Our employee stock ownership plan. | ||
• | Persons with qualifying deposits in Athens Federal Community Bank as of the close of business on September 30, 2009 (“supplemental eligible account holders”) other than our officers and directors and their associates. | ||
• | Depositors of Athens Federal Community Bank as of the close of business on October 31, 2009, who are neither eligible nor supplemental eligible account holders, and borrowers of Athens Federal Community Bank as of May 1, 1999 whose borrowings still exist as of the close of business on October 31, 2009 (collectively, “other members”). |
• | $300,000 of common stock (which equals 30,000 shares); | ||
• | one-tenth of 1% of the total offering of common stock; or | ||
• | 15 times the product (rounded down to the next whole number) obtained by multiplying the total number of shares of common stock to be sold by a fraction of which the numerator is the amount of qualifying deposits of the eligible account holder and the denominator is the total amount of qualifying deposits of all eligible account holders. |
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• | $300,000 of common stock (which equals 30,000 shares); | ||
• | one-tenth of 1% of the total offering of common stock; or | ||
• | 15 times the product (rounded down to the next whole number) obtained by multiplying the total number of shares of common stock to be sold by a fraction of which the numerator is the amount of qualifying deposits of the supplemental eligible account holder and the denominator is the total amount of qualifying deposits of all supplemental eligible account holders. |
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• | First priority to natural persons and trusts of natural persons who are residents of Blount, Bradley, Hamilton, Knox, Loudon, McMinn, Meigs, Monroe and Polk Counties in Tennessee; and |
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• | Second priority to other persons to whom we deliver a prospectus. |
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• | Except for our employee stock ownership plan, no person may purchase in the aggregate more than $300,000 of the common stock, or 30,000 shares sold in the offering, subject to increase as described below. In addition, no person, either alone or together with associates of or persons acting in concert with such person, may purchase more than $500,000 of the common stock, or 50,000 shares sold in the offering. | ||
• | Our tax-qualified employee benefit plans (other than our 401(k) plan) are entitled to purchase up to 10.0% of the shares sold in the conversion and contributed to the charitable foundation. As a tax- qualified employee benefit plan, our employee stock ownership plan intends to purchase 8.0% of the sum of the shares sold in the offering and contributed to the charitable foundation. | ||
• | Each subscriber must subscribe for a minimum of 25 shares. | ||
• | Our directors and executive officers, together with their associates, may purchase in the aggregate up to 31% of the common stock sold in the offering. |
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• | a corporation or organization other than Athens Bancshares Corporation or Athens Federal Community Bank or a majority-owned subsidiary of Athens Bancshares Corporation or Athens Federal Community Bank of which a person is a senior officer or partner or is, directly or indirectly, the beneficial owner of 10% or more of any class of equity securities of such corporation or organization; | ||
• | a trust or other estate in which a person has a substantial beneficial interest or as to which a person serves as a trustee or a fiduciary; and | ||
• | any person who is related by blood or marriage to such person and who lives in the same home as such person or who is a director or senior officer of Athens Bancshares Corporation or Athens Federal Community Bank or any of their subsidiaries. |
• | training our employees who will perform ministerial functions in the subscription offering and community offering regarding the mechanics and regulatory requirements of the stock offering process; | ||
• | managing the stock information center by assisting interested stock subscribers and by keeping records of all stock orders; |
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• | preparing marketing materials; and | ||
• | assisting in the solicitation of proxies from Athens Federal Community Bank’s members for use at the special meeting. |
• | develop a master file and consolidation of accounts; | ||
• | generate address lists for the mailing of proxy solicitation and stock offering materials; | ||
• | provide software for the operation of the stock information center; and | ||
• | subscription order processing and stock allocation services. |
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• | our present and projected operating results and financial condition; | ||
• | the economic and demographic conditions of our primary market area; | ||
• | pertinent historical financial and other information relating to Athens Federal Community Bank; | ||
• | a comparative evaluation of our operating and financial statistics with those of other thrift institutions; | ||
• | the proposed price per share; | ||
• | the aggregate size of the offering of common stock; | ||
• | the impact of the conversion on our capital position and earnings potential; and | ||
• | the trading market for securities of comparable institutions and general conditions in the market for such securities. |
• | average assets of $532.0 million; |
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• | average non-performing assets of 0.88% of total assets; | ||
• | average net loans of 72.27% of total assets; | ||
• | average equity of 12.07% of total assets; and | ||
• | average core income of 0.63% of average assets. |
Price to Core | Price to Tangible | |||||||||||
Earnings | Price to Book | Book Value | ||||||||||
Multiple (1) | Value Ratio (2) | Ratio (2) | ||||||||||
Athens Bancshares Corporation (pro forma): | ||||||||||||
Minimum | 10.02 | x | 45.62 | % | 46.38 | % | ||||||
Midpoint | 12.00 | 50.13 | 50.90 | |||||||||
Maximum | 14.06 | 54.05 | 55.32 | |||||||||
Maximum, as adjusted | 16.53 | 58.00 | 58.82 | |||||||||
Peer Group: | ||||||||||||
Average | 13.06 | x | 66.47 | % | 75.32 | % | ||||||
Median | 12.82 | 62.61 | 73.58 | |||||||||
All publicly-traded thrift: | ||||||||||||
Average | 13.71 | x | 66.98 | % | 73.53 | % | ||||||
Median | 11.11 | 63.38 | 66.20 |
(1) | Ratios are based on earnings for the twelve months ended December 31, 2008 or June 30, 2009, and share prices as of August 19, 2009. | |
(2) | Ratios are based on book value as of December 31, 2008 or June 30, 2009, and share prices as of August 19, 2009. |
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• | The charitable organization’s primary purpose is to serve and make grants in Athens Federal Community Bank’s local community. | ||
• | As long as the Athens Federal Foundation controls shares of Athens Bancshares Corporation, it must vote those shares in the same ratio as all other shares voted on each proposal considered by Athens Bancshares Corporation’s shareholders. | ||
• | For at least five years after its organization, one seat on the Athens Federal Foundation’s board of directors is reserved for an independent director from Athens Federal Community Bank’s local community. This director may not be an employee, officer or director of Athens Federal |
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Community Bank or an affiliate of Athens Federal Community Bank, and should have experience with local community charitable organizations and grant making. | |||
• | For at least five years after its organization, one seat on the Athens Federal Foundation’s board of directors is reserved for a director from Athens Federal Community Bank’s board of directors or the board of directors of an acquirer or resulting institution in the event of a merger or acquisition of Athens Federal Community Bank. | ||
• | The Office of Thrift Supervision may examine the charitable organization at the charitable organization’s expense. | ||
• | The charitable organization must comply with all supervisory directives that the Office of Thrift Supervision imposes. | ||
• | The charitable organization must annually provide the Office of Thrift Supervision with a copy of the annual report that the charitable organization submitted to the Internal Revenue Service. | ||
• | The charitable organization must operate according to written policies adopted by its board of directors, including a conflict of interest policy. | ||
• | The charitable organization may not engage in self-dealing, and must comply with all laws necessary to maintain its tax-exempt status under the Internal Revenue Code. |
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Athens Bancshares Corporation
and Athens Federal Community Bank
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• | any merger or consolidation of Athens Bancshares Corporation or any of its subsidiaries with (i) any interested shareholder or (ii) any corporation (whether or not itself is an interested shareholder) which is, or after such merger or consolidation would be, an affiliate of an interested shareholder; | ||
• | any sale, lease, exchange, mortgage, pledge, transfer or other disposition to or with any interested shareholder, or affiliate of an interested shareholder, of 25% or more of the assets of Athens Bancshares Corporation or combined assets of Athens Bancshares Corporation and its subsidiaries; | ||
• | the issuance or transfer by Athens Bancshares Corporation or any of its subsidiaries of any securities of Athens Bancshares Corporation or any of its subsidiaries to any interested shareholder or any affiliate of any interested shareholder in exchange for cash, securities or other property having an aggregate fair market value equaling or exceeding 25% of the combined fair market value of the outstanding common stock of Athens Bancshares Corporation, except for any issuance or transfer pursuant to an employee benefit plan of Athens Bancshares Corporation or any of its subsidiaries; | ||
• | the adoption of any plan for the liquidation or dissolution of Athens Bancshares Corporation proposed by or on behalf of any interested shareholder or any affiliate or associate of such interested shareholder; or | ||
• | any reclassification of securities, or recapitalization for Athens Bancshares Corporation, or any merger or consolidation of Athens Bancshares Corporation with any of its subsidiaries or any other transaction (whether or not into or otherwise involving an interested shareholder) which has the effect, directly or indirectly, of increasing the proportionate share of the outstanding shares of any class of equity or convertible securities of Athens Bancshares Corporation or any of its subsidiaries which is directly or indirectly owned by any interested shareholder or any affiliate of any interested shareholder. |
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• | any underwriter or member of an underwriting or selling group involving a public sale or resale of securities of Athens Bancshares Corporation or any subsidiary; provided, however, that upon completion of the sale of such securities, no such underwriter or member of such selling group is a beneficial owner of more than 10% of any class of equity security of Athens Bancshares Corporation; | ||
• | any proxy granted to one or more disinterested directors by a shareholder of Athens Bancshares Corporation; | ||
• | any employee benefit plans of Athens Bancshares Corporation or any subsidiary; and | ||
• | any transaction approved in advance by a majority of such disinterested directors. |
• | the social and economic effects of the transaction on Athens Bancshares Corporation, its subsidiaries, employees, depositors, loan and other customers and creditors and the other elements of the communities in which Athens Bancshares Corporation and its subsidiaries operate or are located; | ||
• | the business and financial condition and earnings prospects of the acquiring person or entity, including, but not limited to, debt service and other existing financial obligations, financial obligations to be incurred in connection with the acquisition and other likely financial obligations of the acquiring person or entity, and the possible effect of such conditions upon Athens Bancshares Corporation and its subsidiaries and the other elements of the communities in which Athens Bancshares Corporation and its subsidiaries operate or are located; and | ||
• | the competence, experience and integrity of the acquiring person or entity and its or their management. |
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(1) | be no older than 70 years of age; | ||
(2) | be the beneficial owner of at least 100 shares of capital stock of Athens Bancshares Corporation; and | ||
(3) | not have been: (i) under indictment for, or have ever been convicted of, a criminal offense involving dishonesty or breach of trust and for which the penalty for such offense could be imprisonment for more than one year; (ii) a person who a banking agency has, within the past ten years, issued a cease and desist order for conduct involving dishonesty or breach of trust and that order is final and not subject to appeal; or (iii) found by either a regulatory agency whose decision is final and not subject to appeal or by a court to have (a) breached a fiduciary duty involving personal profit or (b) committed a willful violation of any law, rule or regulation governing banking, securities, commodities or insurance, or any final cease and desist order issued by a banking, securities, commodities or insurance regulatory agency. |
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• | one-fifth (1/5) or more but less than one-third (1/3) of all voting power; | ||
• | one-third (1/3) or more but less than a majority of all voting power; or | ||
• | a majority or more of all voting power. |
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of Athens Federal Community Bank
Page | ||
Report of Independent Registered Public Accounting Firm | F-1 | |
Consolidated Balance Sheets as of June 30, 2009 (unaudited) and December 31, 2008 and 2007 | F-2 | |
Consolidated Statements of Income for the Six Months Ended June 30, 2009 and 2008 (unaudited) and the Years Ended December 31, 2008 and 2007 | F-3 | |
Consolidated Statements of Changes in Equity for the Six Months Ended June 30, 2009 (unaudited) and the Years Ended December 31, 2008 and 2007 | F-4 | |
Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2009 and 2008 (unaudited) and the Years Ended December 31, 2008 and 2007 | F-5 | |
Notes to Consolidated Financial Statements | F-6 |
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Athens Federal Community Bank
Athens, Tennessee
September 11, 2009
F-1
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(Unaudited) | ||||||||||||
June 30, | December 31, | |||||||||||
2009 | 2008 | 2007 | ||||||||||
ASSETS | ||||||||||||
Cash and due from banks | $ | 3,811,439 | $ | 4,547,478 | $ | 9,284,410 | ||||||
Federal funds sold | 5,950,000 | — | — | |||||||||
Total cash and cash equivalents | 9,761,439 | 4,547,478 | 9,284,410 | |||||||||
Interest-bearing deposits in banks | 981,000 | 1,881,000 | — | |||||||||
Securities available for sale | 22,621,077 | 30,509,092 | 22,966,937 | |||||||||
Securities held to maturity (fair value approximates $1,624, $4,961 and $14,517 at June 30, 2009 (unaudited), December 31, 2008 and December 31, 2007, respectively) | 1,624 | 4,961 | 14,449 | |||||||||
Investments, at cost | 2,898,800 | 2,898,800 | 4,746,000 | |||||||||
Loans, net of allowance for loan losses of $2,757,596, $3,082,602 and $2,536,097 at June 30, 2009 (unaudited), December 31, 2008 and December 31, 2007, respectively | 192,217,297 | 196,519,657 | 178,603,012 | |||||||||
Premises and equipment, net | 5,090,127 | 5,343,364 | 5,864,638 | |||||||||
Accrued interest receivable | 1,023,668 | 1,150,013 | 1,245,724 | |||||||||
Cash surrender value of bank owned life insurance | 6,353,869 | 6,245,790 | 6,020,203 | |||||||||
Foreclosed real estate | 252,200 | 230,491 | — | |||||||||
Other assets | 1,809,424 | 1,669,426 | 1,759,167 | |||||||||
Total assets | $ | 243,010,525 | $ | 251,000,072 | $ | 230,504,540 | ||||||
LIABILITIES AND EQUITY | ||||||||||||
LIABILITIES | ||||||||||||
Deposits: | ||||||||||||
Noninterest-bearing | $ | 7,963,643 | $ | 7,288,603 | $ | 7,807,180 | ||||||
Interest-bearing | 194,956,668 | 199,204,715 | 189,536,909 | |||||||||
Total deposits | 202,920,311 | 206,493,318 | 197,344,089 | |||||||||
Accrued interest payable | 347,132 | 418,181 | 454,450 | |||||||||
Securities sold under agreements to repurchase | 971,737 | 911,658 | 1,150,972 | |||||||||
Federal Home Loan Bank advances | 10,377,751 | 16,310,272 | 5,532,273 | |||||||||
Accrued expenses and other liabilities | 3,062,587 | 2,654,746 | 2,752,239 | |||||||||
Total liabilities | 217,679,518 | 226,788,175 | 207,234,023 | |||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||||||
EQUITY | ||||||||||||
Accumulated other comprehensive income | 93,535 | 58,054 | (7,039 | ) | ||||||||
Retained earnings | 25,237,472 | 24,153,843 | 23,277,556 | |||||||||
Total equity | 25,331,007 | 24,211,897 | 23,270,517 | |||||||||
Total liabilities and equity | $ | 243,010,525 | $ | 251,000,072 | $ | 230,504,540 | ||||||
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(Unaudited) | ||||||||||||||||
Six Months Ended June 30, | Years Ended December 31, | |||||||||||||||
2009 | 2008 | 2008 | 2007 | |||||||||||||
Interest and dividend income: | ||||||||||||||||
Loans, including fees | $ | 6,799,344 | $ | 6,946,267 | $ | 13,824,469 | $ | 13,421,048 | ||||||||
Dividends | 73,450 | 78,518 | 153,062 | 203,746 | ||||||||||||
Securities and interest-bearing deposits in other banks | 638,249 | 811,378 | 1,602,878 | 1,832,581 | ||||||||||||
Total interest income | 7,511,043 | 7,836,163 | 15,580,409 | 15,457,375 | ||||||||||||
Interest expense: | ||||||||||||||||
Deposits | 2,786,070 | 3,517,454 | 6,744,227 | 6,609,086 | ||||||||||||
Federal funds purchased and securities sold under agreements to repurchase | 4,708 | 15,001 | 22,720 | 36,254 | ||||||||||||
Federal Home Loan Bank advances | 212,510 | 142,840 | 366,061 | 455,695 | ||||||||||||
Total interest expense | 3,003,288 | 3,675,295 | 7,133,008 | 7,101,035 | ||||||||||||
Net interest income | 4,507,755 | 4,160,868 | 8,447,401 | 8,356,340 | ||||||||||||
Provision for loan losses | 117,733 | 287,036 | 760,803 | 442,895 | ||||||||||||
Net interest income after provision for loan losses | 4,390,022 | 3,873,832 | 7,686,598 | 7,913,445 | ||||||||||||
Noninterest income: | ||||||||||||||||
Customer service fees | 810,135 | 766,116 | 1,621,943 | 1,329,843 | ||||||||||||
Other charges and fees | 963,682 | 986,744 | 1,775,629 | 2,087,814 | ||||||||||||
Investment sales commissions | 100,725 | 173,098 | 288,865 | 279,721 | ||||||||||||
Increase in cash surrender value of life insurance | 126,457 | 126,516 | 256,153 | 223,649 | ||||||||||||
Other noninterest income | 487,399 | 131,241 | 218,252 | 108,756 | ||||||||||||
Total noninterest income | 2,488,398 | 2,183,715 | 4,160,842 | 4,029,783 | ||||||||||||
Noninterest expenses: | ||||||||||||||||
Salaries and employee benefits | 2,914,647 | 3,140,816 | 5,638,138 | 5,818,740 | ||||||||||||
Occupancy and equipment | 737,495 | 798,392 | 1,613,481 | 1,625,824 | ||||||||||||
Federal deposit insurance premiums | 268,751 | 11,085 | 82,630 | 20,951 | ||||||||||||
Data processing | 299,963 | 408,804 | 742,967 | 657,433 | ||||||||||||
Advertising | 74,227 | 129,724 | 227,293 | 331,698 | ||||||||||||
Other operating expenses | 1,094,018 | 952,798 | 1,946,271 | 1,976,834 | ||||||||||||
Total noninterest expenses | 5,389,101 | 5,441,619 | 10,250,780 | 10,431,480 | ||||||||||||
Income before income taxes | 1,489,319 | 615,928 | 1,596,660 | 1,511,748 | ||||||||||||
Income taxes | 405,690 | 152,968 | 487,253 | 391,802 | ||||||||||||
Net income | $ | 1,083,629 | $ | 462,960 | $ | 1,109,407 | $ | 1,119,946 | ||||||||
F-3
Table of Contents
Accumulated | ||||||||||||||||
Other | ||||||||||||||||
Comprehensive | Retained | Comprehensive | ||||||||||||||
Income | Earnings | Income | Total | |||||||||||||
Balance, December 31, 2006 | $ | 22,157,610 | $ | (278,230 | ) | $ | 21,879,380 | |||||||||
Comprehensive income: | ||||||||||||||||
Net income | $ | 1,119,946 | 1,119,946 | — | 1,119,946 | |||||||||||
Other comprehensive income, net of tax: | ||||||||||||||||
Change in unrealized gains (losses) on securities available for sale, net of tax effect of $166,214 | 271,191 | — | 271,191 | 271,191 | ||||||||||||
Total comprehensive income | $ | 1,391,137 | ||||||||||||||
Balance, December 31, 2007 | 23,277,556 | (7,039 | ) | 23,270,517 | ||||||||||||
Cumulative effect of change in accounting principle | (233,120 | ) | — | (233,120 | ) | |||||||||||
Comprehensive income: | ||||||||||||||||
Net income | $ | 1,109,407 | 1,109,407 | — | 1,109,407 | |||||||||||
Other comprehensive income, net of tax: | ||||||||||||||||
Change in unrealized gains (losses) on securities available for sale, net of tax effect of $39,890 | 65,093 | — | 65,093 | 65,093 | ||||||||||||
Total comprehensive income | $ | 1,174,500 | ||||||||||||||
Balance, December 31, 2008 | 24,153,843 | 58,054 | 24,211,897 | |||||||||||||
Comprehensive income: | ||||||||||||||||
Net income | $ | 1,083,629 | 1,083,629 | — | 1,083,629 | |||||||||||
Other comprehensive income, net of tax: | ||||||||||||||||
Change in unrealized gains (losses) on securities available for sale, net of tax effect of $21,752 | 35,481 | — | 35,481 | 35,481 | ||||||||||||
Total comprehensive income | $ | 1,119,110 | ||||||||||||||
Balance, June 30, 2009 | $ | 25,237,472 | $ | 93,535 | $ | 25,331,007 | ||||||||||
F-4
Table of Contents
(Unaudited) | ||||||||||||||||
Six Months Ended June 30, | Years Ended December 31, | |||||||||||||||
2009 | 2008 | 2008 | 2007 | |||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||||||
Net income | $ | 1,083,629 | $ | 462,960 | $ | 1,109,407 | $ | 1,119,946 | ||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||||
Depreciation | 325,042 | 374,338 | 763,939 | 837,351 | ||||||||||||
Amortization of securities and other assets | 114,907 | 117,340 | 255,855 | 222,829 | ||||||||||||
Provision for loan losses | 117,733 | 287,036 | 760,803 | 442,895 | ||||||||||||
Other gains and losses, net | — | — | (10,296 | ) | 2,644 | |||||||||||
Federal Home Loan Bank stock dividends | — | (74,300 | ) | (112,800 | ) | — | ||||||||||
Net change in: | ||||||||||||||||
Cash surrender value of life insurance | (108,079 | ) | (109,716 | ) | (225,587 | ) | (214,756 | ) | ||||||||
Loans held for sale | (65,709 | ) | (242,682 | ) | (83,011 | ) | (162,085 | ) | ||||||||
Accrued interest receivable | 126,345 | 51,690 | 95,711 | (291,520 | ) | |||||||||||
Accrued interest payable | (71,049 | ) | (39,178 | ) | (36,269 | ) | 133,989 | |||||||||
Other assets and liabilities | 186,646 | (56,912 | ) | (398,753 | ) | 242,918 | ||||||||||
Net cash provided by operating activities | 1,709,465 | 770,576 | 2,118,999 | 2,334,211 | ||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||||||
Net change in interest-bearing deposits in banks | 900,000 | (1,980,000 | ) | (1,881,000 | ) | 5,000,000 | ||||||||||
Securities available for sale: | ||||||||||||||||
Purchases | — | (14,674,963 | ) | (16,687,862 | ) | (8,677,971 | ) | |||||||||
Maturities, prepayments and calls | 7,907,286 | 4,718,900 | 8,941,411 | 7,524,949 | ||||||||||||
Sales | — | — | 212,632 | — | ||||||||||||
Securities held to maturity: | ||||||||||||||||
Principal repayments received | 3,337 | 4,498 | 9,486 | 10,438 | ||||||||||||
Loan originations and principal collections, net | 4,211,127 | (6,342,460 | ) | (18,855,847 | ) | (21,795,736 | ) | |||||||||
Purchases of premises and equipment | (71,805 | ) | (167,944 | ) | (251,262 | ) | (935,398 | ) | ||||||||
Proceeds from sales of premises and equipment and other assets | — | — | 8,597 | 2,868 | ||||||||||||
Purchase of investments, at cost | — | — | — | (3,600,000 | ) | |||||||||||
Redemption of investments, at cost | — | 960,000 | 1,960,000 | 4,930,000 | ||||||||||||
Net cash provided by (used in) investing activities | 12,949,945 | (17,481,969 | ) | (26,543,845 | ) | (17,540,850 | ) | |||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||||||
Net (decrease) increase in deposits | (3,573,007 | ) | 7,569,197 | 9,149,229 | 26,129,864 | |||||||||||
Net increase (decrease) in securities sold under agreements to repurchase | 60,079 | 247,266 | (239,314 | ) | (530,181 | ) | ||||||||||
Proceeds from Federal Home Loan Bank advances | 7,150,000 | 6,900,000 | 44,530,000 | 925,000 | ||||||||||||
Repayment of Federal Home Loan Bank advances | (13,082,521 | ) | (1,150,501 | ) | (33,752,001 | ) | (11,023,077 | ) | ||||||||
Net cash (used in) provided by financing activities | (9,445,449 | ) | 13,565,962 | 19,687,914 | 15,501,606 | |||||||||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 5,213,961 | (3,145,431 | ) | (4,736,932 | ) | 294,967 | ||||||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 4,547,478 | 9,284,410 | 9,284,410 | 8,989,443 | ||||||||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 9,761,439 | $ | 6,138,979 | $ | 4,547,478 | $ | 9,284,410 | ||||||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||||||||||
Interest paid on deposits and borrowed funds | $ | 3,074,337 | $ | 3,714,473 | $ | 7,169,277 | $ | 6,967,046 | ||||||||
Income taxes paid | 575,911 | 241,274 | 531,854 | 960,121 | ||||||||||||
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING ACTIVITIES: | ||||||||||||||||
Acquisition of real estate acquired through foreclosure | $ | 21,709 | $ | — | $ | 230,491 | $ | — | ||||||||
F-5
Table of Contents
F-6
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
F-7
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
F-8
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
F-9
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
F-10
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
F-11
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
F-12
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
F-13
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
F-14
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
F-15
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
F-16
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
F-17
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
F-18
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
(Unaudited) | ||||||||||||||||
June 30, 2009 | ||||||||||||||||
Gross | Gross | |||||||||||||||
Amortized | Unrealized | Unrealized | Market | |||||||||||||
Cost | Gains | Losses | Value | |||||||||||||
Securities Available for Sale: | ||||||||||||||||
Securities of U.S. Government agencies and corporations | $ | 4,625,065 | $ | 24,932 | $ | (10,475 | ) | $ | 4,639,522 | |||||||
Mortgage-backed and related securities (1) | 12,304,797 | 380,335 | (16,003 | ) | 12,669,129 | |||||||||||
State and municipal securities | 5,540,353 | 5,603 | (233,530 | ) | 5,312,426 | |||||||||||
$ | 22,470,215 | $ | 410,870 | $ | (260,008 | ) | $ | 22,621,077 | ||||||||
Securities Held to Maturity: | ||||||||||||||||
Mortgage-backed and related securities (1) | $ | 1,624 | $ | — | $ | — | $ | 1,624 | ||||||||
December 31, 2008 | ||||||||||||||||
Gross | Gross | |||||||||||||||
Amortized | Unrealized | Unrealized | Market | |||||||||||||
Cost | Gains | Losses | Value | |||||||||||||
Securities Available for Sale: | ||||||||||||||||
Securities of U.S. Government agencies and corporations | $ | 10,545,132 | $ | 117,062 | $ | (13,529 | ) | $ | 10,648,665 | |||||||
Mortgage-backed and related securities (1) | 14,326,656 | 328,282 | (71,006 | ) | 14,583,932 | |||||||||||
State and municipal securities | 5,543,675 | 2,349 | (269,529 | ) | 5,276,495 | |||||||||||
$ | 30,415,463 | $ | 447,693 | $ | (354,064 | ) | $ | 30,509,092 | ||||||||
Securities Held to Maturity: | ||||||||||||||||
Mortgage-backed and related securities (1) | $ | 4,961 | $ | — | $ | — | $ | 4,961 | ||||||||
F-19
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
December 31, 2007 | ||||||||||||||||
Gross | Gross | |||||||||||||||
Amortized | Unrealized | Unrealized | Market | |||||||||||||
Cost | Gains | Losses | Value | |||||||||||||
Securities Available for Sale: | ||||||||||||||||
Securities of U.S. Government agencies and corporations | $ | 6,743,065 | $ | — | $ | (66,729 | ) | $ | 6,676,336 | |||||||
Mortgage-backed and related securities (1) | 12,517,046 | 151,178 | (62,049 | ) | 12,606,175 | |||||||||||
State and municipal securities | 3,718,180 | 1,885 | (35,639 | ) | 3,684,426 | |||||||||||
$ | 22,978,291 | $ | 153,063 | $ | (164,417 | ) | $ | 22,966,937 | ||||||||
Securities Held to Maturity: | ||||||||||||||||
Mortgage-backed and related securities (1) | $ | 14,449 | $ | 70 | $ | (2 | ) | $ | 14,517 | |||||||
(1) | Collateralized by residential mortgages and guaranteed by U.S. Government sponsored entities. |
(Unaudited) | ||||||||||||||||
June 30, 2009 | ||||||||||||||||
Securities Available for Sale | Securities Held to Maturity | |||||||||||||||
Amortized | Market | Amortized | Market | |||||||||||||
Cost | Value | Cost | Value | |||||||||||||
Due in one year or less | $ | 2,007,383 | $ | 2,012,426 | $ | — | $ | — | ||||||||
Due after one year through five years | 2,389,532 | 2,357,400 | — | — | ||||||||||||
Due five years to ten years | 2,637,567 | 2,613,065 | — | — | ||||||||||||
Due after ten years | 3,130,936 | 2,969,057 | — | — | ||||||||||||
Mortgage-backed securities | 12,304,797 | 12,669,129 | 1,624 | 1,624 | ||||||||||||
Total | $ | 22,470,215 | $ | 22,621,077 | $ | 1,624 | $ | 1,624 | ||||||||
F-20
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
December 31, 2008 | ||||||||||||||||
Securities Available for Sale | Securities Held to Maturity | |||||||||||||||
Amortized | Market | Amortized | Market | |||||||||||||
Cost | Value | Cost | Value | |||||||||||||
Due in one year or less | $ | 6,033,774 | $ | 6,048,259 | $ | — | $ | — | ||||||||
Due after one year through five years | 2,538,238 | 2,489,262 | — | — | ||||||||||||
Due five years to ten years | 4,386,435 | 4,425,382 | — | — | ||||||||||||
Due after ten years | 3,130,360 | 2,962,257 | — | — | ||||||||||||
Mortgage-backed securities | 14,326,656 | 14,583,932 | 4,961 | 4,961 | ||||||||||||
Total | $ | 30,415,463 | $ | 30,509,092 | $ | 4,961 | $ | 4,961 | ||||||||
(Unaudited) | ||||||||||||||||||||||||
June 30, 2009 | ||||||||||||||||||||||||
Less than 12 Months | 12 Months or Greater | Total | ||||||||||||||||||||||
Gross | Gross | Gross | ||||||||||||||||||||||
Market | Unrealized | Market | Unrealized | Market | Unrealized | |||||||||||||||||||
Value | Losses | Value | Losses | Value | Losses | |||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||
Securities Available for Sale: | ||||||||||||||||||||||||
Securities of U.S. Government agencies and corporations | $ | — | $ | — | $ | 1,614 | $ | (10 | ) | $ | 1,614 | $ | (10 | ) | ||||||||||
Mortgage-backed and related securities | 722 | (4 | ) | 1,132 | (12 | ) | 1,854 | (16 | ) | |||||||||||||||
State and municipal securities | 2,134 | (60 | ) | 1,864 | (174 | ) | 3,998 | (234 | ) | |||||||||||||||
$ | 2,856 | $ | (64 | ) | $ | 4,610 | $ | (196 | ) | $ | 7,466 | $ | (260 | ) | ||||||||||
F-21
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
December 31, 2008 | ||||||||||||||||||||||||
Less than 12 Months | 12 Months or Greater | Total | ||||||||||||||||||||||
Gross | Gross | Gross | ||||||||||||||||||||||
Market | Unrealized | Market | Unrealized | Market | Unrealized | |||||||||||||||||||
Value | Losses | Value | Losses | Value | Losses | |||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||
Securities Available for Sale: | ||||||||||||||||||||||||
Securities of U.S. Government agencies and corporations | $ | 1,759 | $ | (14 | ) | $ | — | $ | — | $ | 1,759 | $ | (14 | ) | ||||||||||
Mortgage-backed and related securities | 1,958 | �� | (14 | ) | 1,393 | (57 | ) | 3,351 | (71 | ) | ||||||||||||||
State and municipal securities | 3,344 | (151 | ) | 618 | (119 | ) | 3,962 | (270 | ) | |||||||||||||||
$ | 7,061 | $ | (179 | ) | $ | 2,011 | $ | (176 | ) | $ | 9,072 | $ | (355 | ) | ||||||||||
December 31, 2007 | ||||||||||||||||||||||||
Less than 12 Months | 12 Months or Greater | Total | ||||||||||||||||||||||
Gross | Gross | Gross | ||||||||||||||||||||||
Market | Unrealized | Market | Unrealized | Market | Unrealized | |||||||||||||||||||
Value | Losses | Value | Losses | Value | Losses | |||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||
Securities Available for Sale: | ||||||||||||||||||||||||
Securities of U.S. Government agencies and corporations | $ | — | $ | — | $ | 6,676 | $ | (67 | ) | $ | 6,676 | $ | (67 | ) | ||||||||||
Mortgage-backed and related securities | 96 | (1 | ) | 3,428 | (61 | ) | 3,524 | (62 | ) | |||||||||||||||
State and municipal securities | 2,145 | (34 | ) | 1,026 | (1 | ) | 3,171 | (35 | ) | |||||||||||||||
$ | 2,241 | $ | (35 | ) | $ | 11,130 | $ | (129 | ) | $ | 13,371 | $ | (164 | ) | ||||||||||
F-22
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
F-23
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
F-24
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
(Unaudited) | ||||||||||||
June 30, | December 31, | |||||||||||
2009 | 2008 | 2007 | ||||||||||
Mortgage loans on real estate: | ||||||||||||
Residential 1-4 family | $ | 77,194,124 | $ | 75,296,542 | $ | 71,629,133 | ||||||
Residential multifamily (5 or more) | 14,605,762 | 11,255,113 | 6,840,816 | |||||||||
Commercial | 36,196,052 | 32,294,514 | 33,709,572 | |||||||||
Construction and development | 29,428,133 | 39,207,695 | 31,654,664 | |||||||||
Equity lines of credit | 14,798,698 | 14,670,665 | 13,129,731 | |||||||||
172,222,769 | 172,724,529 | 156,963,916 | ||||||||||
Commercial loans | 12,174,229 | 14,564,990 | 9,940,076 | |||||||||
Consumer loans | 11,046,444 | 12,865,843 | 15,010,159 | |||||||||
Total loans | 195,443,442 | 200,155,362 | 181,914,151 | |||||||||
Less: Allowance for loan losses | (2,757,596 | ) | (3,082,602 | ) | (2,536,097 | ) | ||||||
Unearned interest and fees | (285,490 | ) | (360,646 | ) | (543,967 | ) | ||||||
Net deferred loan origination fees | (183,059 | ) | (192,457 | ) | (231,075 | ) | ||||||
Loans, net | $ | 192,217,297 | $ | 196,519,657 | $ | 178,603,012 | ||||||
F-25
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
(Unaudited) | ||||||||||||||||
Six Months Ended | Years Ended | |||||||||||||||
June 30, | December 31, | |||||||||||||||
2009 | 2008 | 2008 | 2007 | |||||||||||||
Balance beginning of period | $ | 3,082,602 | $ | 2,536,097 | $ | 2,536,097 | $ | 2,574,072 | ||||||||
Provision for loan losses | 117,733 | 287,036 | 760,803 | 442,895 | ||||||||||||
Loans charged off | (484,679 | ) | (155,265 | ) | (323,747 | ) | (528,943 | ) | ||||||||
Recoveries of loans previously charged off | 41,940 | 86,347 | 109,449 | 48,073 | ||||||||||||
Balance, end of period | $ | 2,757,596 | $ | 2,754,215 | $ | 3,082,602 | $ | 2,536,097 | ||||||||
F-26
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
(Unaudited) | ||||||||||||
June 30, | December 31, | |||||||||||
2009 | 2008 | 2007 | ||||||||||
Impaired loans without a valuation allowance | $ | 1,536,338 | $ | 1,227,695 | $ | — | ||||||
Impaired loans with a valuation allowance | 2,961,531 | 5,320,770 | 1,168,693 | |||||||||
Total impaired loans | $ | 4,497,869 | $ | 6,548,465 | $ | 1,168,693 | ||||||
Valuation allowance related to impaired loans | $ | 627,548 | $ | 926,770 | $ | 229,361 | ||||||
Total non-accrual loans | $ | 787,297 | $ | 4,139,467 | $ | 316,498 | ||||||
Total loans past-due ninety days or more and still accruing | $ | 11,922 | $ | 33,712 | $ | 43,479 | ||||||
F-27
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
(Unaudited) | ||||||||||||||||
Six Months Ended | Years Ended | |||||||||||||||
June 30, | December 31, | |||||||||||||||
2009 | 2008 | 2008 | 2007 | |||||||||||||
Average investment in impaired loans | $ | 4,633,540 | $ | 2,669,367 | $ | 3,653,844 | $ | 1,269,708 | ||||||||
Interest income recognized on impaired loans | $ | 195,000 | $ | 213,000 | $ | 406,000 | $ | 65,000 | ||||||||
Interest income recognized on a cash basis on impaired loans | $ | 195,000 | $ | 213,000 | $ | 406,000 | $ | 65,000 | ||||||||
F-28
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
(Unaudited) | ||||||||||||
June 30, | December 31, | |||||||||||
2009 | 2008 | 2007 | ||||||||||
Land | $ | 1,060,880 | $ | 1,060,880 | $ | 1,060,880 | ||||||
Buildings | 5,181,517 | 5,171,389 | 5,115,926 | |||||||||
Leasehold improvements | 88,987 | 88,987 | 88,987 | |||||||||
Equipment | 4,551,492 | 4,515,404 | 4,349,199 | |||||||||
Automobiles | 22,494 | 22,494 | 13,323 | |||||||||
10,905,370 | 10,859,154 | 10,628,315 | ||||||||||
Less accumulated depreciation | (5,815,243 | ) | (5,515,790 | ) | (4,763,677 | ) | ||||||
$ | 5,090,127 | $ | 5,343,364 | $ | 5,864,638 | |||||||
F-29
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
(Unaudited) | ||||||||||||
June 30, | December 31, | |||||||||||
2009 | 2008 | 2007 | ||||||||||
Federal Home Loan Bank of Cincinnati common stock | $ | 2,898,800 | $ | 2,898,800 | $ | 2,786,000 | ||||||
West Point Market, Inc. variable rate demand notes | — | — | 1,000,000 | |||||||||
Bee-Holdings, Inc. floater note | — | — | 960,000 | |||||||||
$ | 2,898,800 | $ | 2,898,800 | $ | 4,746,000 | |||||||
F-30
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
June 30, | Unaudited | |||
2010 | $ | 70,417,893 | ||
2011 | 19,014,721 | |||
2012 | 14,400,959 | |||
2013 | 8,849,313 | |||
2014 | 2,213,866 | |||
$ | 114,896,752 | |||
2009 | $ | 75,862,084 | ||
2010 | 22,673,342 | |||
2011 | 13,798,320 | |||
2012 | 10,125,199 | |||
2013 | 5,663,557 | |||
Thereafter | 38,207 | |||
$ | 128,160,709 | |||
(Unaudited) | ||||||||||||||||
June 30, | December 31, | |||||||||||||||
2009 | 2008 | 2008 | 2007 | |||||||||||||
Demand deposit and NOW accounts | $ | 172,648 | $ | 273,699 | $ | 517,724 | $ | 527,197 | ||||||||
Money market accounts | 239,144 | 281,224 | 540,757 | 461,919 | ||||||||||||
Savings accounts | 25,849 | 43,429 | 81,950 | 94,542 | ||||||||||||
IRA accounts | 696,670 | 788,289 | 1,563,692 | 1,408,533 | ||||||||||||
Certificates of deposit | 1,651,759 | 2,130,813 | 4,040,104 | 4,116,895 | ||||||||||||
�� | ||||||||||||||||
$ | 2,786,070 | $ | 3,517,454 | $ | 6,744,227 | $ | 6,609,086 | |||||||||
F-31
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
Interest | Final | (Unaudited) | ||||||||||||||||
Date of Advance | Rate | Maturity Date | 06/30/09 | 12/31/08 | 12/31/07 | |||||||||||||
September 6, 2002 | 3.93 | % | October 1, 2012 | $ | 377,751 | $ | 430,272 | $ | 532,273 | |||||||||
November 30, 2006 | 4.39 | % | November 30, 2011 | 5,000,000 | 5,000,000 | 5,000,000 | ||||||||||||
February 5, 2008 | 2.85 | % | February 5, 2010 | 2,000,000 | 2,000,000 | — | ||||||||||||
July 11, 2008 | 4.37 | % | July 11, 2013 | 1,500,000 | 1,500,000 | — | ||||||||||||
July 31, 2008 | 4.28 | % | September 6, 2013 | 1,500,000 | 1,500,000 | — | ||||||||||||
November 28, 2008 | 0.99 | % | February 26, 2009 | — | 3,000,000 | — | ||||||||||||
December 23, 2008 | 0.54 | % | March 23, 2009 | — | 2,655,000 | — | ||||||||||||
December 29, 2008 | 0.54 | % | March 27, 2009 | — | 225,000 | — | ||||||||||||
$ | 10,377,751 | $ | 16,310,272 | $ | 5,532,273 | |||||||||||||
June 30, | Unaudited | |||
2010 | $ | 2,104,650 | ||
2011 | 108,200 | |||
2012 | 5,112,750 | |||
2013 | 52,151 | |||
2014 | 3,000,000 | |||
$ | 10,377,751 | |||
F-32
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
2009 | $ | 5,991,800 | ||
2010 | 2,112,500 | |||
2011 | 5,112,900 | |||
2012 | 93,072 | |||
2013 | 3,000,000 | |||
$ | 16,310,272 | |||
F-33
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
For Capital | ||||||||||||||||
Actual | Adequacy Purposes | |||||||||||||||
Amount | Ratio | Amount | Ratio | |||||||||||||
As of June 30, 2009: (Unaudited) | ||||||||||||||||
Total capital (to risk-weighted assets) | $ | 26,927 | 15.04 | % | $ | 14,327 | 8.00 | % | ||||||||
Tier I capital (to risk-weighted assets) | 24,682 | 13.78 | % | 7,163 | 4.00 | % | ||||||||||
Tier I capital (to adjusted total assets) | 24,682 | 10.19 | % | 9,692 | 4.00 | % | ||||||||||
Tangible capital (to adjusted total assets) | 24,682 | 10.19 | % | 3,635 | 1.50 | % |
F-34
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
For Capital | ||||||||||||||||
Actual | Adequacy Purposes | |||||||||||||||
Amount | Ratio | Amount | Ratio | |||||||||||||
As of December 31, 2008: | ||||||||||||||||
Total capital (to risk-weighted assets) | $ | 25,757 | 14.01 | % | $ | 14,709 | 8.00 | % | ||||||||
Tier I capital (to risk-weighted assets) | 23,518 | 12.79 | % | 7,354 | 4.00 | % | ||||||||||
Tier I capital (to adjusted total assets) | 23,518 | 9.40 | % | 10,152 | 4.00 | % | ||||||||||
Tangible capital (to adjusted total assets) | 23,518 | 9.40 | % | 3,754 | 1.50 | % | ||||||||||
As of December 31, 2007: | ||||||||||||||||
Total capital (to risk-weighted assets) | $ | 24,569 | 14.77 | % | $ | 13,307 | 8.00 | % | ||||||||
Tier I capital (to risk-weighted assets) | 22,485 | 13.52 | % | 6,654 | 4.00 | % | ||||||||||
Tier I capital (to adjusted total assets) | 22,485 | 9.80 | % | 9,181 | 4.00 | % | ||||||||||
Tangible capital (to adjusted total assets) | 22,485 | 9.80 | % | 3,443 | 1.50 | % |
(Unaudited) | ||||||||||||
June 30, | December 31, | |||||||||||
2009 | 2008 | 2007 | ||||||||||
Total equity per the financial statements | $ | 25,331 | $ | 24,212 | $ | 23,271 | ||||||
Other intangible assets (1) | (555 | ) | (636 | ) | (793 | ) | ||||||
Unrealized (gains) losses on available for sale securities | (94 | ) | (58 | ) | 7 | |||||||
Tier I capital | 24,682 | 23,518 | 22,485 | |||||||||
Allowance for loan losses — allowable portion | 2,245 | 2,239 | 2,084 | |||||||||
Total risk-based capital | $ | 26,927 | $ | 25,757 | $ | 24,569 | ||||||
(1) | Reflects intangible assets separable from goodwill which resulted from the purchase of Valley Title Services, LLC. These intangibles pertain primarily to customer relationships and brand recognition. The Bank is amortizing the intangible assets over their estimated benefit periods which range from 5 to 10 years. Amounts are not significant for additional disclosures. |
F-35
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
(Unaudited) | ||||||||||||
June 30, | December 31, | |||||||||||
2009 | 2008 | 2007 | ||||||||||
Deferred tax assets: | ||||||||||||
Allowance for loan losses | $ | 304,144 | $ | 428,589 | $ | 219,332 | ||||||
Deferred compensation | 602,388 | 597,600 | 467,526 | |||||||||
Executive benefit plan | 165,551 | 172,252 | 181,113 | |||||||||
Other | 120,741 | 74,832 | 104,992 | |||||||||
1,192,824 | 1,273,273 | 972,963 | ||||||||||
Deferred tax liabilities: | ||||||||||||
FHLB stock dividends | 375,510 | 375,510 | 332,319 | |||||||||
Depreciable assets | 142,894 | 168,447 | 177,358 | |||||||||
Other | 364,942 | 494,777 | 354,391 | |||||||||
883,346 | 1,038,734 | 864,068 | ||||||||||
Net deferred tax assets | $ | 309,478 | $ | 234,539 | $ | 108,895 | ||||||
(Unaudited) | ||||||||||||||||
Six Months Ended | Years Ended | |||||||||||||||
June 30, | December 31, | |||||||||||||||
2009 | 2008 | 2008 | 2007 | |||||||||||||
Current tax expense | $ | 445,047 | $ | 312,835 | $ | 679,812 | $ | 423,366 | ||||||||
Deferred benefit | (39,357 | ) | (159,867 | ) | (192,559 | ) | (31,564 | ) | ||||||||
Provisions for income taxes | $ | 405,690 | $ | 152,968 | $ | 487,253 | $ | 391,802 | ||||||||
F-36
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
(Unaudited) | ||||||||||||||||||||||||||||||||
Six Months Ended | Years Ended | |||||||||||||||||||||||||||||||
June 30, | December 31, | |||||||||||||||||||||||||||||||
2009 | % | 2008 | % | 2008 | % | 2007 | % | |||||||||||||||||||||||||
Expected tax at statutory rates | $ | 506,400 | 34.00 | % | $ | 209,400 | 34.00 | % | $ | 542,900 | 34.00 | % | $ | 514,000 | 34.00 | % | ||||||||||||||||
Tax-exempt earnings on life insurance policies | (48,400 | ) | (3.25 | ) | (48,400 | ) | (7.86 | ) | (98,100 | ) | (6.14 | ) | (85,600 | ) | (5.66 | ) | ||||||||||||||||
Tax-exempt interest | (44,000 | ) | (2.95 | ) | (33,700 | ) | (5.47 | ) | (75,650 | ) | (4.74 | ) | (49,900 | ) | (3.30 | ) | ||||||||||||||||
State income taxes, net of federal income tax benefit | 63,900 | 4.29 | 26,400 | 4.29 | 68,500 | 4.29 | 64,850 | 4.29 | ||||||||||||||||||||||||
Other | (72,210 | ) | (4.85 | ) | (732 | ) | (0.12 | ) | 49,603 | 3.11 | (51,548 | ) | (3.41 | ) | ||||||||||||||||||
Provision for income taxes | $ | 405,690 | 27.24 | % | $ | 152,968 | 24.84 | % | $ | 487,253 | 30.52 | % | $ | 391,802 | 25.92 | % | ||||||||||||||||
F-37
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
(Unaudited) | ||||||||||||||||
June 30, | December 31, | |||||||||||||||
2009 | 2008 | 2008 | 2007 | |||||||||||||
Projected benefit obligation at beginning of period | $ | 449,863 | $ | 473,004 | $ | 473,004 | $ | 494,001 | ||||||||
Service cost and net periodic benefit cost | 6,084 | 13,542 | 27,331 | 29,907 | ||||||||||||
Payments to former president | (23,587 | ) | (26,217 | ) | (50,472 | ) | (50,904 | ) | ||||||||
Net benefit liability at end of period | $ | 432,360 | $ | 460,329 | $ | 449,863 | $ | 473,004 | ||||||||
F-38
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
F-39
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
F-40
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
F-41
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
Quoted Prices in | Significant | Significant | ||||||||||||||
Active Markets | Other | Other | ||||||||||||||
for Identical | Observable | Unobservable | ||||||||||||||
Assets | Inputs | Inputs | ||||||||||||||
(Unaudited) | Balance | (Level 1) | (Level 2) | (Level 3) | ||||||||||||
June 30, 2009: | ||||||||||||||||
Securities available for sale | $ | 22,621,077 | $ | — | $ | 22,621,077 | $ | — | ||||||||
December 31, 2008: | ||||||||||||||||
Securities available for sale | $ | 30,509,092 | $ | — | $ | 30,509,092 | $ | — |
Quoted Prices in | Significant | Significant | ||||||||||||||
Active Markets | Other | Other | ||||||||||||||
for Identical | Observable | Unobservable | ||||||||||||||
Assets | Inputs | Inputs | ||||||||||||||
(Unaudited) | Balance | (Level 1) | (Level 2) | (Level 3) | ||||||||||||
June 30, 2009: | ||||||||||||||||
Impaired loans | $ | 2,334,000 | $ | — | $ | 1,406,000 | $ | 928,000 | ||||||||
December 31, 2008: | ||||||||||||||||
Impaired loans | $ | 4,394,000 | $ | — | $ | 4,209,000 | $ | 185,000 |
F-42
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
F-43
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
F-44
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
(Unaudited) | December 31 | |||||||||||||||||||||||
June 30, 2009 | 2008 | 2007 | ||||||||||||||||||||||
Carrying | Estimated | Carrying | Estimated | Carrying | Estimated | |||||||||||||||||||
Amount | Fair Value | Amount | Fair Value | Amount | Fair Value | |||||||||||||||||||
Financial assets: | ||||||||||||||||||||||||
Cash and cash equivalents | $ | 9,761 | $ | 9,761 | $ | 4,547 | $ | 4,547 | $ | 9,284 | $ | 9,284 | ||||||||||||
Interest-bearing deposits in banks | 981 | 981 | 1,881 | 1,881 | — | — | ||||||||||||||||||
Securities | 22,623 | 22,623 | 30,514 | 30,514 | 22,981 | 22,981 | ||||||||||||||||||
Investments, at cost | 2,899 | 2,899 | 2,899 | 2,899 | 4,746 | 4,746 | ||||||||||||||||||
Loans, net | 192,217 | 193,668 | 196,520 | 198,575 | 178,603 | 180,392 | ||||||||||||||||||
Cash surrender value of bank owned life insurance | 6,354 | 6,354 | 6,246 | 6,246 | 6,020 | 6,020 | ||||||||||||||||||
Financial liabilities: | ||||||||||||||||||||||||
Deposits | 202,920 | 210,298 | 206,493 | 214,439 | 197,344 | 198,841 | ||||||||||||||||||
Securities sold under agreements to repurchase | 972 | 972 | 912 | 912 | 1,151 | 1,151 | ||||||||||||||||||
Federal Home Loan Bank advances | 10,378 | 10,532 | 16,310 | 16,883 | 5,532 | 5,526 | ||||||||||||||||||
Unrecognized financial instruments (net of contract amount): | ||||||||||||||||||||||||
Commitments to extend credit | — | — | — | — | — | — |
F-45
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
(Unaudited) | ||||||||||||
June 30, | December 31, | |||||||||||
2009 | 2008 | 2007 | ||||||||||
Beginning balance | $ | 1,066,209 | $ | 1,499,158 | $ | 1,183,881 | ||||||
New loans | 320,257 | 1,230,730 | 380,793 | |||||||||
Repayments | (480,850 | ) | (1,663,679 | ) | (65,516 | ) | ||||||
Ending balance | $ | 905,616 | $ | 1,066,209 | $ | 1,499,158 | ||||||
F-46
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
F-47
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
F-48
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
F-49
Table of Contents
![(ATHENS BANCSHARES CORPORATION LOGO)](https://capedge.com/proxy/S-1A/0000950123-09-059966/g20505a2g2050521.gif)
(Anticipated Maximum, Subject to Increase)
139
INFORMATION NOT REQUIRED IN PROSPECTUS
SEC filing fee (1) | $ | 2,000 | ||
OTS filing fee | 12,000 | |||
FINRA filing fee (1) | 3,500 | |||
Nasdaq Stock Market listing fee | 50,000 | |||
Blue Sky fees and expenses | 7,500 | |||
EDGAR, printing, postage and mailing | 175,000 | |||
Legal fees and expenses | 350,000 | |||
Accounting fees and expenses | 175,000 | |||
Appraiser’s fees and expenses | 40,000 | |||
Business Plan fees and expenses | 35,000 | |||
Marketing firm fees (1)(2)(3) | (1 | ) | ||
Marketing firm expenses (including marketing firm’s counsel fees) | 60,000 | |||
Conversion agent fees and expenses | 25,000 | |||
Transfer agent and registrar fees and expenses | 20,000 | |||
Certificate printing | 7,500 | |||
Miscellaneous | 9,000 | |||
Total | $ | 1,180,000 |
(1) | Estimated based on registration of 2,777,250 shares at $10.00 per share. | |
(2) | Assumes 8.0% ESOP purchase and insider purchases equal to 11.7% of the offering. | |
(2) | Keefe, Bruyette & Woods, Inc. will receive a success fee equal to the greater of: (i) $200,000 or (ii) 1.125% of the aggregate dollar amount of the common stock sold in the subscription and community offerings to persons other than the employee stock ownership plan and directors, officers and employees of Athens Federal Community Bank or their immediate families and shares issued to the charitable foundation. In addition, Keefe, Bruyette and Woods, Inc. will be reimbursed up to $50,000 for the fees and expenses of its legal counsel. |
II-1
Table of Contents
II-2
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II-3
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II-4
Table of Contents
1.1 | Engagement Letter between Athens Federal Community Bank and Keefe, Bruyette & Woods, Inc. | |
1.2 | Draft Agency Agreement* | |
2.1 | Plan of Conversion* | |
3.1 | Amended and Restated Charter of Athens Bancshares Corporation* | |
3.2 | Amended and Restated Bylaws of Athens Bancshares Corporation* | |
4.1 | Specimen Stock Certificate of Athens Bancshares Corporation* | |
5.1 | Opinion of Kilpatrick Stockton LLP re: Legality* | |
8.1 | Opinion of Kilpatrick Stockton LLP re: Federal Tax Matters* | |
8.2 | Opinion of Hazlett, Lewis & Bieter, PLLC re: State Tax Matters* | |
10.1 | Form of Athens Federal Community Bank Employee Stock Ownership Plan* | |
10.2 | Form of Athens Federal Community Bank Employee Stock Ownership Plan Trust Agreement* | |
10.3 | Form of Employee Stock Ownership Plan Loan Agreement, Pledge Agreement and Promissory Note* | |
10.4 | Athens Federal Community Bank 401(k) Plan and Adoption Agreement* | |
10.5 | Employment Agreement between Athens Federal Community Bank and Jeffrey L. Cunningham* | |
10.6 | Form of Employment Agreement between Athens Federal Community Bank and Jeffrey L. Cunningham* | |
10.7 | Form of Employment Agreement between Athens Federal Community Bank and Michael R. Hutsell and Jay Leggett, Jr.* | |
10.8 | Supplemental Executive Retirement Plan Agreement between Athens Federal Community Bank and Jeffrey L. Cunningham* | |
10.9 | Form of Supplemental Executive Retirement Plan Agreement between Athens Federal Community Bank and Jeffrey L. Cunningham* | |
10.10 | Form of Athens Federal Community Bank Supplemental Executive Retirement Plan* | |
10.11 | Director’s Deferred Compensation Agreement between Athens Federal Community Bank and Dr. James L. Carter, Jr.* | |
10.12 | Form of Athens Federal Community Bank Employee Severance Compensation Plan* | |
10.13 | Athens Federal Community Bank Amended Group Term Carve Out Plan for Jeffrey L. Cunningham* | |
10.14 | Athens Federal Community Bank Amended Group Term Carve Out Plan for Michael R. Hutsell* | |
10.15 | Form of Employment Agreement between Athens Bancshares Corporation and Jeffrey L. Cunningham* | |
10.16 | Form of Employment Agreement between Athens Bancshares Corporation and Michael R. Hutsell * | |
23.1 | Consent of Kilpatrick Stockton LLP (included in Exhibits 5.1 and 8.1)* | |
23.2 | Consent of Hazlett, Lewis & Bieter, PLLC | |
23.3 | Consent of Keller & Company, Inc.* | |
24.1 | Powers of Attorney* | |
99.1 | Appraisal Report of Keller & Company, Inc. (P) | |
99.2 | Draft Marketing Materials* | |
99.3 | Form of Subscription Order Form and Instructions* | |
99.4 | Form of Athens Federal Foundation Gift Instrument* |
(P) | The supporting financial schedules are filed in paper under Form SE pursuant to Rule 202 of Regulation S-T. | |
* | Previously filed. | |
(b) | Financial Statement Schedules |
II-5
Table of Contents
(1) | To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: |
(i) | To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; | ||
(ii) | To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the forgoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; | ||
(iii) | To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. |
(2) | That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. | ||
(3) | To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. | ||
(4) | That, for purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this Registration Statement as of the time it was declared effective. | ||
(5) | That, for the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. | ||
(6) | That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities: |
(i) | Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; | ||
(ii) | Any free writing prospectus relating to the offering prepared by or on behalf of the |
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undersigned registrant or used or referred to by the undersigned registrant; |
(iii) | The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and | ||
(iv) | Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
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Athens Bancshares Corporation | ||||
By: | /s/ Jeffrey L. Cunningham | |||
Jeffrey L. Cunningham | ||||
President, Chief Executive Officer and Director | ||||
Name | Title | Date | ||
/s/ Jeffrey L. Cunningham | President, Chief Executive Officer and Director (principal executive officer) | November 9, 2009 | ||
* | Vice President, Chief Operating Officer and | |||
Chief Financial Officer (principal accounting and financial officer) | ||||
* | Director | |||
* | Director | |||
* | Director | |||
* | Director | |||
* | Director | |||
* | Director | |||
* | Director | |||
* | Pursuant to the Power of Attorney filed as Exhibit 24.1 to the Registration Statement on Form S-1 for Athens Bancshares Corporation on September 17, 2009. |
/s/ Jeffrey L. Cunningham | President, Chief Executive Officer and Director | November 9, 2009 |