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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): December 17, 2007
DELANCO BANCORP, INC.
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(Exact name of registrant as specified in its charter)
UNITED STATES 0-52517 36-4519533
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(State or other jurisdiction of (Commission (IRS Employer
incorporation or organization) File Number) Identification No.)
615 BURLINGTON AVENUE, DELANCO, NEW JERSEY 08075
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (856) 461-0611
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NOT APPLICABLE
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(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
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On December 17, 2007, Delanco Federal Savings Bank (the "Bank") the
savings association subsidiary of Delanco Bancorp, Inc. (the "Company"), entered
into a Supervisory Agreement with the Office of Thrift Supervision ("OTS").
The entry into the Supervisory Agreement was based on the Bank's 2007
report of examination in which the OTS concluded that grounds existed for the
initiation of administrative proceedings against the Bank. Without admitting or
denying that such grounds existed, the Bank determined to enter into the
Supervisory Agreement to cooperate with the OTS and as evidence of the Bank's
intent to comply with all applicable laws and regulations and engage in safe and
sound practices.
Pursuant to the terms of Supervisory Agreement, the Bank agreed as
follows:
(1) To refrain from making, investing in, purchasing or otherwise
modifying any commercial loan without the prior written
non-objection of the OTS.
(2) By December 31, 2007, to review each commercial loan file with an
outstanding principal balance that equals or exceeds $250,000, and
by February 29, 2008 for all other commercial loans, to determine
whether all required documentation has been obtained. All missing
or incomplete documentation must be obtained by January 31, 2008
for all commercial loans with an outstanding principal balance
that equals or exceeds $250,000 and by February 29, 2008 for all
other commercial loans.
(3) By January 31, 2008, to implement a credit administration process
utilizing an electronic system and checklists to facilitate
ongoing reviews of the financial condition of borrowers and
guarantors.
(4) To evaluate, on a semiannually basis, the effectiveness of the
Bank's credit administration function.
(5) To engage an independent, third-party service provider to conduct
an internal loan review of the Bank's lending operations on a
quarterly basis. As part of the internal loan review program, the
Bank must develop and implement a risk rating system for all
loans. On a quarterly basis, the Board's Audit Committee must
provide the Board with, and the Board must review and evaluate, a
written report documenting the findings and recommendations
relating to the internal loan reviews.
(6) By December 31, 2007, to adopt and implement a written program
which satisfies certain OTS regulations and interagency guidelines
regarding the identification and classification of problem assets.
The program must (i) provide for and require the maintenance of an
adequate allowance for loan and lease losses; (ii) ensure the
prompt charge-off of loans when proper; and (iii) require the
timely and accurate reporting of criticized assets, the allowance
for loan and lease losses and charge-offs in the Bank's Thrift
Financial Reports (TFRs).
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(7) To prepare TFRs accurately and in accordance with applicable
instructions.
(8) To ensure that at the end of each quarter, the Bank's assets have
not increased by an amount greater than 2.5% of the Bank's total
assets at the end of the prior quarter.
(9) To notify and receive the non-objection of the OTS before adding
or replacing any Board member, employing any person as a senior
executive officer or entering into or revising any contractual
arrangement with any director or senior executive officer.
The Supervisory Agreement will remain in effect until terminated,
modified, or suspended in writing by the OTS.
The Company believes that the Bank has already adopted and implemented
some of the various plans, policies and procedures required by the Supervisory
Agreement and that the Bank will be able to fully adopt and implement the
various plans, policies and procedures required by the Supervisory Agreement.
However, a failure to comply with the Supervisory Agreement could result in the
initiation of a formal enforcement action by the OTS, including the imposition
of civil monetary penalties. The Supervisory Agreement is expected to result in
additional regulatory compliance expense for the Company.
The foregoing information does not purport to be complete and is
qualified in its entirety by reference to the Supervisory Agreement included in
this filing as Exhibit 99.1.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
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(d) The following exhibit is furnished herewith:
Exhibit 99.1 Supervisory Agreement dated December 17, 2007
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
DELANCO BANCORP, INC.
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(Registrant)
Date: December 17, 2007 By: /s/ Robert M. Notigan
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Robert M. Notigan
President and Chief Executive Officer