UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2005
or
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______ to ______
Commission File Number: 0-22444
WVS Financial Corp.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Pennsylvania 25-1710500
- ---------------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
9001 Perry Highway 15237
Pittsburgh, Pennsylvania ----------------------
---------------------------------------- (Zip Code)
(Address of principal executive offices)
(412) 364-1911
----------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirement for the past 90 days.
YES |X| NO |_|
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12 b-2 of the Exchange Act).
YES |_| NO |X|
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12 b-2 of the Exchange Act).
YES |_| NO |X|
Shares outstanding as of November 08, 2005: 2,356,568 shares Common Stock,
$.01 par value.
WVS FINANCIAL CORP. AND SUBSIDIARY
----------------------------------
INDEX
-----
PART I. Financial Information Page
- ------- --------------------- ----
Item 1. Financial Statements
Consolidated Balance Sheet as of
September 30, 2005 and June 30, 2005
(Unaudited) 3
Consolidated Statement of Income
for the Three Months Ended
September 30, 2005 and 2004 (Unaudited) 4
Consolidated Statement of Cash Flows
for the Three Months Ended September 30,
2005 and 2004 (Unaudited) 5
Consolidated Statement of Changes in
Stockholders' Equity for the Three Months
Ended September 30, 2005 (Unaudited) 7
Notes to Unaudited Consolidated
Financial Statements 8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations for the Three Months
Ended September 30, 2005 10
Item 3. Quantitative and Qualitative Disclosures
about Market Risk 15
Item 4. Controls and Procedures 20
PART II. Other Information Page
- -------- ----------------- ----
Item 1. Legal Proceedings 21
Item 2. Unregistered Sales of Equity Securities and
Use of Proceeds 21
Item 3. Defaults upon Senior Securities 21
Item 4. Submission of Matters to a Vote of Security Holders 22
Item 5. Other Information 22
Item 6. Exhibits 22
Signatures 23
2
WVS FINANCIAL CORP. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
(In thousands)
September 30, 2005 June 30, 2005
------------------ -------------
Assets
------
Cash and due from banks $ 1,279 $ 900
Interest-earning demand deposits 1,245 2,666
--------- ---------
Total cash and cash equivalents 2,524 3,566
Investment securities available-for-sale (amortized cost of
$ 8,775 and $9,155) 8,765 9,155
Investment securities held-to-maturity (market value of
$159,202 and $174,323) 158,974 173,911
Mortgage-backed securities available-for-sale (amortized cost of
$2,261 and $2,893) 2,408 3,120
Mortgage-backed securities held-to-maturity (market value of
$180,662 and $159,566) 179,976 159,031
Net loans receivable (allowance for loan losses of $1,055 and
$1,121) 59,099 60,151
Accrued interest receivable 2,338 2,057
Federal Home Loan Bank stock, at cost 7,464 7,769
Premises and equipment 907 939
Other assets 1,275 1,345
--------- ---------
TOTAL ASSETS $ 423,730 $ 421,044
========= =========
Liabilities and Stockholders' Equity
------------------------------------
Liabilities:
Savings Deposits:
Non-interest-bearing accounts $ 20,697 $ 11,926
NOW accounts 19,545 25,396
Savings accounts 41,541 44,323
Money market accounts 14,920 13,625
Certificates of deposit 69,050 68,319
Advance payments by borrowers for taxes and insurance 417 1,117
--------- ---------
Total savings deposits 166,170 164,706
Federal Home Loan Bank advances 156,911 155,036
Other borrowings 69,205 69,680
Accrued interest payable 1,376 1,260
Other liabilities 1,314 1,161
--------- ---------
TOTAL LIABILITIES $ 394,976 $ 391,843
Stockholders' equity:
Preferred stock:
5,000,000 shares, no par value per share, authorized; none
outstanding $ -- $ --
Common stock:
10,000,000 shares, $.01 par value per share, authorized;
3,762,618 and 3,762,618 shares issued 38 38
Additional paid-in capital 20,726 20,726
Treasury stock: 1,406,050 and 1,368,508 shares at cost,
Respectively (21,208) (20,594)
Retained earnings, substantially restricted 29,110 28,885
Accumulated other comprehensive income 91 149
Unreleased shares - Recognition and Retention Plans (3) (3)
--------- ---------
TOTAL STOCKHOLDERS' EQUITY $ 28,754 $ 29,201
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 423,730 $ 421,044
========= =========
See accompanying notes to unaudited consolidated financial statements.
3
WVS FINANCIAL CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
(In thousands, except per share data)
Three Months Ended
September 30,
----------------------------
2005 2004
----------- -----------
INTEREST AND DIVIDEND INCOME:
Loans $ 1,052 $ 1,095
Investment securities 1,856 2,724
Mortgage-backed securities 1,882 583
Interest-earning deposits with other institutions 3 2
Federal Home Loan Bank stock 47 26
----------- -----------
Total interest and dividend income 4,840 4,430
----------- -----------
INTEREST EXPENSE:
Deposits 711 515
Federal Home Loan Bank advances 2,007 2,044
Other borrowings 667 193
----------- -----------
Total interest expense 3,385 2,752
----------- -----------
NET INTEREST INCOME 1,455 1,678
PROVISION (RECOVERY) FOR LOAN LOSSES (66) 78
----------- -----------
NET INTEREST INCOME AFTER PROVISION (RECOVERY) FOR
LOAN LOSSES 1,521 1,600
----------- -----------
NON-INTEREST INCOME:
Service charges on deposits 95 95
Investment securities gains 30 237
Other 82 76
----------- -----------
Total non-interest income 207 408
----------- -----------
NON-INTEREST EXPENSE:
Salaries and employee benefits 469 503
Occupancy and equipment 101 105
Data processing 67 64
Correspondent bank service charges 36 35
Other 216 171
----------- -----------
Total non-interest expense 889 878
----------- -----------
INCOME BEFORE INCOME TAXES 839 1,130
INCOME TAXES 231 296
----------- -----------
NET INCOME $ 608 $ 834
=========== ===========
EARNINGS PER SHARE:
Basic $ 0.25 $ 0.34
Diluted $ 0.25 $ 0.34
AVERAGE SHARES OUTSTANDING:
Basic 2,387,653 2,453,189
Diluted 2,391,294 2,458,926
See accompanying notes to unaudited consolidated financial statements.
4
WVS FINANCIAL CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
(In thousands)
Three Months Ended
September 30,
------------------------
2005 2004
--------- ---------
OPERATING ACTIVITIES
Net income $ 608 $ 834
Adjustments to reconcile net income to cash provided by operating
activities:
(Recovery) provision for loan losses (66) 78
Depreciation 46 47
Investment securities gains (30) (237)
Amortization of discounts, premiums and deferred loan fees (61) (179)
Sale of trading securities -- 1,000
Increase in accrued and deferred taxes 161 217
(Increase) decrease in accrued interest receivable (281) 159
Increase in accrued interest payable 116 21
Other, net 91 (97)
--------- ---------
Net cash provided by operating activities 584 1,843
--------- ---------
INVESTING ACTIVITIES
Available-for-sale:
Purchases of investments (687) (13,113)
Proceeds from repayments of investments and mortgage-backed securities 1,080 2,975
Proceeds from sale of investment and mortgage-backed securities 1,016 1,127
Held-to-maturity:
Purchases of investments (24,997) (63,832)
Purchases of mortgage-backed securities (61,159) (31,807)
Proceeds from repayments of investments 39,966 132,478
Proceeds from repayments of mortgage-backed securities 39,887 10,697
Decrease in net loans receivable 1,110 4,769
Purchase of Federal Home Loan Bank stock (2,049) (1,521)
Redemption of Federal Home Loan Bank stock 2,354 1,471
Acquisition of premises and equipment (14) (21)
--------- ---------
Net cash (used for) provided by investing activities (3,493) 43,223
--------- ---------
5
WVS FINANCIAL CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
(In thousands)
Three Months Ended
September 30,
----------------------
2005 2004
-------- --------
FINANCING ACTIVITIES
Net increase (decrease) in transaction and passbook accounts 1,433 (2,133)
Net increase (decrease) in certificates of deposit 731 (1,027)
Net increase in FHLB short-term advances 1,875 1,900
Net decrease in other borrowings (475) (41,376)
Net decrease in advance payments by borrowers for taxes and insurance (700) (882)
Cash dividends paid (383) (393)
Funds used for purchase of treasury stock (614) (339)
-------- --------
Net cash provided by (used for) financing activities 1,867 (44,250)
-------- --------
(Decrease) increase in cash and cash equivalents (1,042) 816
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD 3,566 3,054
-------- --------
CASH AND CASH EQUIVALENTS AT END OF THE PERIOD $ 2,524 $ 3,870
======== ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest on deposits, escrows and borrowings $ 3,269 $ 2,731
Income taxes $ 40 $ 2
See accompanying notes to unaudited consolidated financial statements.
6
WVS FINANCIAL CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(UNAUDITED)
(In thousands)
Accumulated
Retained Other
Additional Earnings Compre- Unallocated
Common Paid-In Treasury Substantially hensive Shares Held
Stock Capital Stock Restricted Income by RRP Total
----- ------- ----- ---------- ------ ------ -----
Balance at June 30, 2005 $ 38 $ 20,726 $(20,594) $ 28,885 $ 149 $ (3) $ 29,201
Comprehensive income:
Net Income 608 608
Other comprehensive
income:
Change in unrealized
holding gains on
securities, net of
income tax effect
of $30 (58) (58)
--------
Comprehensive income 550
Purchase of shares for
treasury stock (614) (614)
Accrued compensation
expense for Recognition
and Retention Plans (RRP) -- --
Exercise of stock options -- -- --
Cash dividends declared
($0.16 per share) (383) (383)
-------- -------- -------- -------- -------- -------- --------
Balance at Sept 30, 2005 $ 38 $ 20,726 $(21,208) $ 29,110 $ 91 $ (3) $ 28,754
======== ======== ======== ======== ======== ======== ========
See accompanying notes to unaudited consolidated financial statements.
7
WVS FINANCIAL CORP. AND SUBSIDIARY
----------------------------------
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
---------------------
The accompanying unaudited consolidated financial statements have been
prepared in accordance with the instructions for Form 10-Q and therefore do not
include information or footnotes necessary for a complete presentation of
financial condition, results of operations, and cash flows in conformity with
U.S. generally accepted accounting principles. However, all adjustments
(consisting only of normal recurring adjustments) which, in the opinion of
management, are necessary for a fair presentation have been included. The
results of operations for the three months ended September 30, 2005, are not
necessarily indicative of the results which may be expected for the entire
fiscal year.
2. RECENT ACCOUNTING PRONOUNCEMENTS
--------------------------------
In June 2005, the FASB issued FAS No. 154, Accounting Changes and Errors
Corrections, a replacement of APB Opinion No. 20 and FAS No. 3. The Statement
applies to all voluntary changes in accounting principle, and changes the
requirements for accounting for and reporting of a change in accounting
principle. FAS No. 154 requires retrospective application to prior periods'
financial statements of a voluntary change in accounting principle unless it is
impractical. APB Opinion No. 20 previously required that most voluntary changes
in accounting principle be recognized by including in net income of the period
of the change the cumulative effect of changing to the new accounting principle.
FAS No.154 improves the financial reporting because its requirements enhance the
consistency of financial reporting between periods. The provisions of FAS No.
154 are effective for accounting changes and corrections of errors made in
fiscal years beginning after December 15, 2005.
3. EARNINGS PER SHARE
------------------
The following table sets forth the computation of the weighted-average
common shares used to calculate basic and diluted earnings per share.
Three Months Ended
September 30,
---------------------------
2005 2004
---------- ----------
Weighted average common shares issued 3,762,618 3,762,968
Average treasury stock shares (1,374,965) (1,309,779)
---------- ----------
Weighted average common shares and common stock equivalents
used to calculate basic earnings per share 2,387,653 2,453,189
Additional common stock equivalents (stock options) used to
calculate diluted earnings per share 3,641 5,737
---------- ----------
Weighted average common shares and common stock equivalents
used to calculate diluted earnings per share 2,391,294 2,458,926
========== ==========
All options at September 30, 2005 and September 30, 2004 were included in
the computation of diluted earnings per share.
8
4. STOCK BASED COMPENSATION DISCLOSURE
-----------------------------------
In December 2004, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 123 (revised 2004), Share-Based
Payment (FAS No. 123R). FAS No. 123R revised FAS No. 123, Accounting for
Stock-Based Compensation, and supersedes APB Opinion No. 25, Accounting for
Stock Issued to Employees, and its related implementation guidance. FAS No. 123R
requires compensation costs related to share-based payment transactions to be
recognized in the financial statement (with limited exceptions). The amount of
compensation cost will be measured based on the grant-date fair value of the
equity or liability instruments issued. Compensation cost will be recognized
over the period that an employee provides service in exchange for the award.
In April 2005, the Securities and Exchange Commission adopted a new rule
that amends the compliance dates for FAS No. 123R. The Statement requires that
compensation cost relating to share-based payment transactions be recognized in
financial statements and that this cost be measured based on the fair value of
the equity or liability instruments issued. FAS No. 123R covers a wide range of
share-based compensation arrangements including share options, restricted share
plans, performance-based awards, share appreciation rights, and employee share
purchase plans. The Company adopted FAS No. 123R on July 1, 2005. Management has
determined that unless additional options are granted, there will be no impact
on future earnings as a result of the adoption.
5. COMPREHENSIVE INCOME
--------------------
Other comprehensive income primarily reflects changes in net unrealized
gains/losses on available-for-sale securities. Total comprehensive income is
summarized as follows (dollars in thousands):
Three Months Ended September 30,
---------------------------------------
2005 2004
---------------- ----------------
Net income $ 608 $ 834
Other comprehensive
(loss) income:
Unrealized (losses)
gains on available for
sale securities $ 58 $ (11)
Less:
Reclassification
adjustment for
gain included in
net income (30) (237)
----- ----- ----- -----
Other comprehensive
loss before tax (88) (226)
Income tax benefit
related to other
comprehensive loss (30) (77)
----- -----
Other comprehensive
loss, net of tax (58) (149)
----- -----
Comprehensive income $ 550 $ 685
===== =====
9
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2005
FORWARD LOOKING STATEMENTS
When used in this Form 10-Q, in future filings by the Company with the
Securities and Exchange Commission, in the Company's press releases or other
public or shareholder communications, or in oral statements made with the
approval of an authorized executive officer, the words or phrases "will likely
result", "are expected to", "will continue", "is anticipated", "estimate",
"project" or similar expressions are intended to identify "forward looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Such statements are subject to certain risks and uncertainties
including changes in economic conditions in the Company's market area, changes
in policies by regulatory agencies, fluctuations in interest rates, demand for
loans in the Company's market area and competition that could cause actual
results to differ materially from historical earnings and those presently
anticipated or projected. The Company wishes to caution readers not to place
undue reliance on any such forward looking statements, which speak only as of
the date made. The Company wishes to advise readers that the factors listed
above could affect the Company's financial performance and could cause the
Company's actual results for future periods to differ materially from any
opinions or statements expressed with respect to future periods in any current
statements.
The Company does not undertake, and specifically disclaims any obligation,
to publicly release the result of any revisions which may be made to forward
looking statements to reflect events or circumstances after the date of
statements or to reflect the occurrence of anticipated or unanticipated events.
GENERAL
WVS Financial Corp. ("WVS" or the "Company") is the parent holding company
of West View Savings Bank ("West View" or the "Savings Bank"). The Company was
organized in July 1993 as a Pennsylvania-chartered unitary bank holding company
and acquired 100% of the common stock of the Savings Bank in November 1993.
West View Savings Bank is a Pennsylvania-chartered, SAIF-insured stock
savings bank conducting business from six offices in the North Hills suburbs of
Pittsburgh. The Savings Bank converted to the stock form of ownership in
November 1993. The Savings Bank had no subsidiaries at September 30, 2005.
The operating results of the Company depend primarily upon its net
interest income, which is determined by the difference between income on
interest-earning assets, principally loans, mortgage-backed securities and
investment securities, and interest expense on interest-bearing liabilities,
which consist primarily of deposits and borrowings. The Company's net income is
also affected by its provision for loan losses, as well as the level of its
non-interest income, including loan fees and service charges, and its
non-interest expenses, such as compensation and employee benefits, income taxes,
deposit insurance and occupancy costs.
FINANCIAL CONDITION
The Company's assets totaled $423.7 million at September 30, 2005, as
compared to $421.0 million at June 30, 2005. The $2.7 million or 0.6% increase
in total assets was primarily comprised of a $20.2 million or 12.5% increase in
mortgage-backed securities and a $281 thousand or 13.7% increase in accrued
interest receivable, which were partially offset by a $15.6 million or 8.2%
decrease in investment securities and FHLB stock, a $1.1 million or 1.8%
decrease in net loans receivable and a $1.0 million or 29.2% decrease in cash
and cash equivalents. The increase in mortgage-backed securities is attributable
to purchases of floating rate collateralized mortgage obligations in response to
increases in short-term market interest rates, while the
10
decrease in investment securities and FHLB stock was attributable to calls of
U.S. Government Agency securities and tax-free municipal bonds. See "Asset and
Liability Management".
The Company's total liabilities increased $3.2 million or 0.8% to $395.0
million as of September 30, 2005, from $391.8 million as of June 30, 2005. The
$3.2 million increase in total liabilities was primarily comprised of a $1.9
million or 1.2% increase in short-term FHLB advances and a $1.5 million or 0.9%
increase in total savings deposits, which were partially offset by a $475
thousand or 0.7% decrease in other short-term borrowings. Demand deposits
increased $2.9 million, money market accounts increased $1.3 million while
savings accounts decreased $2.8 million and advanced payments by borrowers for
taxes and insurance decreased $700 thousand. The increase in demand deposits was
principally attributable to seasonal increases in local real estate tax
collector accounts. Management believes that the decreases in savings accounts
and advance payments by borrowers for taxes and insurance were primarily
attributable to seasonal payments of local and school real estate taxes.
Total stockholders' equity decreased $447 thousand or 1.5% to $28.8
million as of September 30, 2005, from approximately $29.2 million as of June
30, 2005. Capital expenditures for the Company's stock repurchase program and
cash dividends totaled $614 thousand and $383 thousand, respectively, and
accumulated other comprehensive income decreased $58 thousand, which were
partially offset by net income of $608 thousand for the three months ended
September 30, 2005.
RESULTS OF OPERATIONS
General. WVS reported net income of $608 thousand or $0.25 diluted
earnings per share for the three months ended September 30, 2005. Net income
decreased by $226 thousand or 27.1% and diluted earnings per share decreased
$0.09 or 26.5% for the three months ended September 30, 2005, when compared to
the same period in 2004. The decrease in net income was primarily attributable
to a $223 thousand decrease in net interest income, a $201 thousand decrease in
non-interest income and an $11 thousand increase in non-interest expense, which
were partially offset by a $166 thousand recovery for loan losses compared to a
$78 thousand provision for loan losses in the 2004 quarter and a $65 thousand
decrease in income tax expense.
Net Interest Income. The Company's net interest income decreased by $223
thousand or 13.3% for the three months ended September 30, 2005, when compared
to the same period in 2004. The decrease in net interest income for the three
month period was principally attributable to lower levels of accreted investment
security discounts and premiums, a lower proportion of tax-exempt income in
proportion to total interest income, increased funding costs attributable to
higher short-term market interest rates and the pronounced flattening of the
Treasury yield curve associated with the Federal Reserve Board's increases to
the targeted federal funds rate.
Interest Income. Interest on net loans receivable decreased $43 thousand
or 3.9% for the three months ended September 30, 2005, when compared to the same
period in 2004. The decrease for the three months ended September 30, 2005 was
attributable to a decrease of $5.4 million in the average balance of net loans
receivable outstanding which was partially offset by an increase of 30 basis
points in the weighted average yield earned on net loans receivable for the
three months ended September 30, 2005, when compared to the same period in 2004.
The decrease in the average loan balance outstanding for the three months ended
September 30, 2005 was attributable in part to the Company's asset/liability
management strategy. The Company has limited its portfolio origination of
longer-term fixed rate loans to mitigate its exposure to a rise in market
interest rates. The Company will continue to originate longer-term fixed rate
loans for sale on a correspondent basis to increase non-interest income and to
contribute to net income.
Interest on mortgage-backed securities increased $1.3 million or 222.8%
for the three months ended September 30, 2005, when compared to the same period
in 2004. The increase for the three months ended September 30, 2005 was
primarily attributable to a $94.7 million increase in the average balance of
mortgage-backed securities outstanding for the period and a 125 basis point
increase in the average yield earned on mortgage-backed securities for the three
months ended September 30, 2005 when compared to
11
the same period in 2004. The increase in the weighted average yield earned on
mortgage-backed securities was consistent with higher market interest rates for
the three months ended September 30, 2005. The increase in the average balances
of mortgage-backed securities during the three months ended September 30, 2005
was primarily attributable to purchases of floating rate mortgage-backed
securities funded with proceeds from redemptions of other investment securities
(discussed below) and Company borrowings.
Interest and dividend income on interest-bearing deposits with other
institutions, investment securities and FHLB stock ("other investment
securities") decreased by $846 thousand or 30.7% for the three months ended
September 30, 2005 when compared to the same period in 2004. Approximately $754
thousand of the decrease in interest income on other investment securities is
attributable to a $71.1 million decrease in average balances outstanding.
Average outstanding balances of taxable (primary U.S. Government agency
obligations) and tax-exempt securities declined $57.6 million and $12.9
respectively when compared to the same period in 2004. These declines were
associated with early redemptions and the Company's reinvestment of proceeds
into floating-rate mortgage-backed securities. Approximately $92 thousand of the
decrease in interest earned on other investment securities is attributable to a
$138 thousand decrease in recognized investment discounts and premiums, which
were partially offset by higher market interest rates, when compared to the same
period in 2004.
Interest Expense. Interest expense on deposits and escrows increased $196
thousand or 38.1% for the three months ended September 30, 2005 when compared to
the same period in 2004. The increase in interest expense on deposits for the
three months ended September 30, 2005 was attributable to a 53 basis point
increase in the weighted average rate paid on interest-bearing deposits and a
$1.2 million increase in the average balance of interest-bearing deposits for
the three months ended September 30, 2005, when compared to the same period in
2004. The average yield paid on interest-bearing deposits reflects increases in
rates paid on deposits for the three months ended September 30, 2005.
Interest on FHLB advances and other borrowings increased $437 thousand or
19.5% for the three months ended September 30, 2005 when compared to the same
period in 2004. The increase for the three months ended September 30, 2005 was
attributable to a $15.4 million increase in the average balance of FHLB advances
and other borrowings for the period and a 50 basis point increase in the
weighted average rate paid on such borrowings when compared to the same period
in 2004. The weighted average rate paid on FHLB advances and other borrowings
increased due to increases in short-term market interest rates.
Provision (Recovery) for Loan Losses. A provision (recovery) for loan
losses is charged (credited) to earnings to maintain the total allowance at a
level considered adequate by management to absorb potential losses in the
portfolio. Management's determination of the adequacy of the allowance is based
on an evaluation of the portfolio considering past experience, current economic
conditions, volume, growth and composition of the loan portfolio, and other
relevant factors.
During the quarter ended September 30, 2005, the Company reallocated a
portion of its allowance for loan and lease losses attributable to off-balance
sheet liabilities (builder letters of credit) to a separate reserve account for
financial reporting purposes. The provision for loan losses was reduced by, and
a non-interest expense was charged, $35 thousand in connection with this
reallocation of allowances.
The Company recorded a credit provision for loan losses of $66 thousand
for the three months ended September 30, 2005 compared to a provision for loan
loss of $78 thousand for the same period in 2004. The $66 thousand credit
provision during the quarter ended September 30, 2005 was primarily attributable
to the $35 thousand allowance reallocation discussed above and a $23 thousand
reduction due to the payoff of one non-accrual loan. At September 30, 2005, the
Company's total allowance for loan losses amounted to $1.1 million or 1.5% of
the Company's total loan portfolio, as compared to $1.1 million or 1.5% at June
30, 2005.
Non-Interest Income. Non-interest income decreased by $201 thousand or
49.3% for the three months ended September 30, 2005 when compared to the same
period in 2004. The decrease was primarily attributable to a decrease of $207
thousand decrease in pre-tax gains on the sale of investment securities.
12
Non-Interest Expense. Non-interest expense increased $11 thousand or 1.3%
for the three months ended September 30, 2005 when compared to the same period
in 2004. The increase was principally attributable to a $35 thousand provision
for loss on off balance sheet items, a $6 thousand increase in printing costs
and a $5 thousand increase in legal fees which were partially offset by a $34
thousand decrease in payroll and benefit related costs when compared to the same
period in 2004.
Income Tax Expense. Income tax expense decreased $65 thousand or 22.0% for
the three months ended September 30, 2005 when compared to the same period in
2004. The decrease was primarily attributable to a decreased level of taxable
income for the three months ended September 30, 2005 when compared to the same
period in 2004. The Company's effective tax rate increased from 17.7% at June
30, 2005 to 27.6% at September 30, 2005 primarily due to $10.0 million of
tax-exempt municipal securities redeemed prior to maturity.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities totaled $584 thousand during the
three months ended September 30, 2005. Net cash provided by operating activities
was primarily comprised of $608 thousand of net income which was partially
offset by a $30 thousand pre-tax security gain.
Funds used for investing activities totaled $3.5 million during the three
months ended September 30, 2005. Primary uses of funds during the three months
ended September 30, 2005, included purchases of investment and mortgage-backed
securities totaling $25.7 and $61.2, respectively, which were partially offset
by repayments of investments and mortgage-backed securities totaling $41.0
million and $39.9 million, respectively, a $1.1 million decrease in net loans
receivable and $1.0 million from the sale of mortgage-backed securities from the
Company's portfolio.
Funds provided by financing activities totaled $1.9 million for the three
months ended September 30, 2005. The primary sources included a $1.9 million
increase in short-term FHLB advances and a $1.5 million increase in deposits
which were partially offset by $614 thousand in treasury stock purchases, a $475
thousand decrease in other short-term borrowings and $383 thousand in cash
dividends paid on the Company's common stock. Management believes that it
currently is maintaining adequate liquidity and continues to match funding
sources with lending and investment opportunities.
During the quarter ended September 30, 2005, the Company incurred $859.7
million in other short-term borrowings with a weighted average rate of 3.52% and
incurred approximately $24.2 million in various short-term FHLB borrowings with
a weighted average rate of 3.68%. During the three months ended September 30,
2005, the Company repaid $860.2 million of other short-term borrowings with
weighted average rates of 3.48% and repaid approximately $22.3 million in
various short-term borrowings from the FHLB with a weighted average rate of
3.38%.
The Company's primary sources of funds are deposits, amortization,
repayments and maturities of existing loans, mortgage-backed securities and
investment securities, funds from operations, and funds obtained through FHLB
advances and other borrowings. At September 30, 2005, the total approved loan
commitments outstanding amounted to $76 thousand. At the same date, commitments
under unused lines of credit amounted to $6.5 million and the unadvanced portion
of construction loans approximated $11.4 million. Certificates of deposit
scheduled to mature in one year or less at September 30, 2005 totaled $46.6
million. Management believes that a significant portion of maturing deposits
will remain with the Company.
Historically, the Company used its sources of funds primarily to meet its
ongoing commitments to pay maturing savings certificates and savings
withdrawals, fund loan commitments and maintain a substantial portfolio of
investment securities. The Company has been able to generate sufficient cash
through the retail deposit market, its traditional funding source, and through
FHLB advances and other borrowings, to provide the cash utilized in investing
activities. The Company also has access to the Federal Reserve Bank Primary
Credit Program. Management believes that the Company currently has adequate
liquidity available to respond to liquidity demands.
13
On September 27, 2005 the Company's Board of Directors authorized its
Eighth Common Stock Buyback Program in the amount of 125,000. See Issuer
Purchases of Equity Securities, in Part II, Item 2 of this Form 10-Q.
On October 25, 2005, the Company's Board of Directors declared a cash
dividend of $0.16 per share payable November 17, 2005, to shareholders of record
at the close of business on November 7, 2005. Dividends are subject to
determination and declaration by the Board of Directors, which take into account
the Company's financial condition, statutory and regulatory restrictions,
general economic conditions and other factors. There can be no assurance that
dividends will in fact be paid on the Common Stock in future periods or that, if
paid, such dividends will not be reduced or eliminated.
As of September 30, 2005, WVS Financial Corp. exceeded all regulatory
capital requirements and maintained Tier I and total risk-based capital equal to
$28.7 million or 20.9% and $29.8 million or 21.7%, respectively, of total
risk-weighted assets, and Tier I leverage capital of $28.7 million or 6.87% of
average quarterly assets.
Nonperforming assets consist of nonaccrual loans and real estate owned. A
loan is placed on nonaccrual status when, in the judgment of management, the
probability of collection of interest is deemed insufficient to warrant further
accrual. When a loan is placed on nonaccrual status, previously accrued but
uncollected interest is deducted from interest income. The Company normally does
not accrue interest on loans past due 90 days or more, however, interest may be
accrued if management believes that it will collect on the loan.
The Company's nonperforming assets at September 30, 2005 totaled
approximately $755 thousand or 0.18% of total assets as compared to $1.1 million
or 0.25% of total assets at June 30, 2005. Nonperforming assets at September 30,
2005 consisted of: one land loan totaling $377 thousand, one loan secured by
commercial real estate totaling $178 thousand, one single-family real estate
loan totaling $58 thousand, one home equity loan totaling $17 thousand, one
unsecured consumer loan totaling $56 thousand and one single-family real estate
owned property with a book value of approximately $70 thousand.
The $302 thousand decrease in nonperforming assets during the three months
ended September 30, 2005 was primarily attributable to the payoff in full of one
non-performing mortgage secured by land totaling approximately $456 thousand,
the reclassification of an $11 thousand home equity loan from non-performing to
performing and principal paydowns totaling approximately $13 thousand on two
loans related to a bankruptcy discussed below, which were partially offset by
the addition to non-accrual status of one loan totaling approximately $178
thousand secured by commercial real estate. These loans are in various stages of
collection activity.
At September 30, 2005, the Company had one non-performing loan secured by
undeveloped land totaling $387 thousand and one unsecured loan totaling $59
thousand to two borrowers. During the fourth quarter of fiscal 2004, the
Bankruptcy Court approved a secured claim totaling $440 thousand and an
unsecured claim totaling $76 thousand be paid in accordance with a Bankruptcy
Plan of Reorganization. All Court ordered plan payments have been received in a
timely manner. In accordance with generally accepted accounting principles,
payments received are being applied on a cost recovery basis.
During the three months ended September 30, 2005, approximately $8
thousand of interest income would have been recorded on loans accounted for on a
non-accrual basis and troubled debt restructurings if such loans had been
current according to the original loan agreements for the entire period. These
amounts were not included in the Company's interest income for the quarter ended
September 30, 2005. The Company continues to work with the borrowers in an
attempt to cure the defaults and is also pursuing various legal avenues in order
to collect on these loans.
14
ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ASSET AND LIABILITY MANAGEMENT
The Company's primary market risk exposure is interest rate risk and, to a
lesser extent, liquidity risk. All of the Company's transactions are denominated
in US dollars with no specific foreign exchange exposure. The Savings Bank has
no agricultural loan assets and therefore would not have a specific exposure to
changes in commodity prices. Any impacts that changes in foreign exchange rates
and commodity prices would have on interest rates are assumed to be exogenous
and will be analyzed on an ex post basis.
-- ----
Interest rate risk ("IRR") is the exposure of a banking organization's
financial condition to adverse movements in interest rates. Accepting this risk
can be an important source of profitability and shareholder value, however,
excessive levels of IRR can pose a significant threat to the Company's earnings
and capital base. Accordingly, effective risk management that maintains IRR at
prudent levels is essential to the Company's safety and soundness.
Evaluating a financial institution's exposure to changes in interest rates
includes assessing both the adequacy of the management process used to control
IRR and the organization's quantitative level of exposure. When assessing the
IRR management process, the Company seeks to ensure that appropriate policies,
procedures, management information systems and internal controls are in place to
maintain IRR at prudent levels with consistency and continuity. Evaluating the
quantitative level of IRR exposure requires the Company to assess the existing
and potential future effects of changes in interest rates on its consolidated
financial condition, including capital adequacy, earnings, liquidity, and, where
appropriate, asset quality.
Financial institutions derive their income primarily from the excess of
interest collected over interest paid. The rates of interest an institution
earns on its assets and owes on its liabilities generally are established
contractually for a period of time. Since market interest rates change over
time, an institution is exposed to lower profit margins (or losses) if it cannot
adapt to interest-rate changes. For example, assume that an institution's assets
carry intermediate- or long-term fixed rates and that those assets were funded
with short-term liabilities. If market interest rates rise by the time the
short-term liabilities must be refinanced, the increase in the institution's
interest expense on its liabilities may not be sufficiently offset if assets
continue to earn interest at the long-term fixed rates. Accordingly, an
institution's profits could decrease on existing assets because the institution
will either have lower net interest income or, possibly, net interest expense.
Similar risks exist when assets are subject to contractual interest-rate
ceilings, or rate sensitive assets are funded by longer-term, fixed-rate
liabilities in a decreasing-rate environment.
During the quarter ended September 30, 2005, the Federal Open Market
Committee increased its targeted federal funds rate by 50 basis points from
3.25% to 3.75%. Economic conditions were adversely impacted by energy supply
disruptions caused by Hurricane Katrina. The benchmark two and ten year treasury
yields were 4.18% and 4.34%, respectively, at September 30, 2005 as compared to
3.66% and 3.94%, respectively, at June 30, 2005. These changes in short,
intermediate and long-term market interest rates, the flattening of the Treasury
yield curve and continued high levels of interest rate volatility have
precipitated continued prepayments in the Company's loan, investment and
mortgage-backed securities portfolios.
Principal repayments on the Company's loan, investment and mortgage-backed
securities portfolios for the three months ended September 30, 2005, totaled
$7.7 million, $41.0 million and $39.9 million, respectively. In response to
higher levels of liquidity the Company continued to rebalance its loan,
investment and mortgage-backed securities portfolios. Due to the current low
level of intermediate and long-term market interest rates the Company continued
to reduce its portfolio of long-term fixed rate mortgages while continuing to
offer consumer home equity loans and builder speculative construction loans. The
Company reinvested proceeds from U.S. Government Agency and tax-exempt municipal
securities into
15
floating rate mortgage-backed securities. Within the mortgage-backed securities
portfolio, the Company continued to aggressively purchase floating rate
securities in order to provide current income and in response to continued rises
in short-term market interest rates. Each of the aforementioned strategies also
helped to better the interest-rate and liquidity risks associated with the
Savings Bank's customers' liquidity preference for shorter term deposit
products.
The Company also makes available for origination residential mortgage
loans with interest rates which adjust pursuant to a designated index, although
customer acceptance has been somewhat limited in the Savings Bank's market area.
The Company will continue to selectively offer commercial real estate, land
acquisition and development, and shorter-term construction loans, primarily on
residential properties, to partially increase interest income while limiting
interest rate risk. The Company has also emphasized higher yielding home equity
and small business loans to existing customers and seasoned prospective
customers.
During the quarter ended September 30, 2005, principal investment
purchases were comprised of: floating rate collateralized mortgage obligations
which reprice monthly - $61.2 million with an original weighted average yield of
approximately 4.39%; and callable floating rate government agency bonds which
will reprice within thirty-three months - $25.0 million with a weighted average
yield of approximately 5.07%. Major investment proceeds received during the
quarter ended September 30, 2005 were: callable government agency bonds - $30.0
million with a weighted average yield of approximately 3.28%; and tax-free
municipal bonds - $10.0 million with a weighted average yield of approximately
5.91%.
As of September 30, 2005, the implementation of these asset and liability
management initiatives resulted in the following:
1) $180.0 million or 98.7% of the Company's portfolio of
mortgage-backed securities (including collateralized mortgage
obligations - "CMOs") were comprised of floating rate instruments
that reprice on a monthly basis;
2) $112.9 million or 67.3% of the Company's investment portfolio was
comprised of floating rate bonds which will reprice as follows: 3
months or less - $15.0 million; 3 - 6 months - $15.0 million; 6 - 12
months - $10.0 million; and over 1 year - $72.9 million;
3) $30.1 million or 17.9% of the Company's investment portfolio was
comprised of U.S. Government Agency Step-up bonds which will reprice
as follows: 1 year or less - $15.0 million from 4.00% to 7.00%; 1 -
2 years - $8.5 million from 4.00% to 7.00% and $2.0 million from
4.40% to 7.00%; and over 2 years - $4.7 million from 4.70% to 6.00%;
4) $8.3 million or 4.9% of the Company's investment portfolio was
comprised of corporate demand notes issued by Ford Motor Credit and
General Motors Acceptance Corp;
5) an aggregate of $32.6 million or 54.2% of the Company's net loan
portfolio had adjustable interest rates or maturities of less than
12 months;
6) the maturity distribution of the Company's borrowings is as follows:
1 month or less - $83.4 million or 36.9%; 1 - 6 months - $4.0
million or 1.7%; 6 - 12 months - $157 thousand or 0.1%; 1 - 3 years
- $3.0 million or 1.3%; 3 - 5 years - $56.1 million or 24.8%; and
over 5 years - $79.5 million or 35.2%.
The effect of interest rate changes on a financial institution's assets
and liabilities may be analyzed by examining the "interest rate sensitivity" of
the assets and liabilities and by monitoring an institution's interest rate
sensitivity "gap". An asset or liability is said to be interest rate sensitive
within a specific time period if it will mature or reprice within a given time
period. A gap is considered positive (negative) when the amount of rate
sensitive assets (liabilities) exceeds the amount of rate sensitive liabilities
(assets). During a period of falling interest rates, a negative gap would tend
to result in an increase in net interest income. During a period of rising
interest rates, a positive gap would tend to result in an increase in net
interest income.
The following table sets forth certain information at the dates indicated
relating to the Company's interest-earning assets and interest-bearing
liabilities which are estimated to mature or are scheduled to reprice within one
year.
16
September 30, June 30,
------------- ------------------------------
2005 2005 2004
------------- ------------- -------------
(Dollars in Thousands)
Interest-earning assets maturing or
repricing within one year $ 300,648 $ 318,015 $ 288,451
Interest-bearing liabilities maturing or
repricing within one year 181,283 181,085 171,655
------------- ------------- -------------
Interest sensitivity gap $ 119,365 $ 136,930 $ 116,796
============= ============= =============
Interest sensitivity gap as a percentage of
total assets 28.2% 32.5% 26.9%
Ratio of assets to liabilities
maturing or repricing within one year 165.8% 175.6% 168.0%
During the quarter ended September 30, 2005, the Company managed its one
year interest sensitivity gap by: (1) limiting the portfolio origination of
long-term fixed rate mortgages; (2) emphasizing loans with shorter-terms or
repricing frequencies; and (3) purchasing floating rate CMO's which reprice on a
monthly basis.
17
The following table illustrates the Company's estimated stressed
cumulative repricing gap - the difference between the amount of interest-earning
assets and interest-bearing liabilities expected to reprice at a given point in
time - at September 30, 2005. The table estimates the impact of an upward or
downward change in market interest rates of 100 and 200 basis points.
Cumulative Stressed Repricing Gap
---------------------------------
Month 3 Month 6 Month 12 Month 24 Month 36 Month 60 Long Term
------- ------- -------- -------- -------- -------- ---------
(Dollars in Thousands)
Base Case Up 200 bp
- -------------------
Cummulative
Gap ($'s) 95,155 89,366 103,874 146,555 158,663 101,525 26,637
% of Total
Assets 22.5% 21.1% 24.5% 34.6% 37.4% 24.0% 6.3%
Base Case Up 100 bp
- -------------------
Cummulative
Gap($'s) 102,399 96,841 116,735 159,941 172,371 118,238 26,637
% of Total
Assets 24.2% 22.9% 27.5% 37.7% 40.7% 27.9% 6.3%
Base Case No Change
- -------------------
Cummulative
Gap($'s) 103,142 98,281 119,365 164,402 178,978 125,389 26,637
% of Total
Assets 24.3% 23.2% 28.2% 38.3% 42.2% 29.6% 6.3%
Base Case Down 100 bp
- ---------------------
Cummulative
Gap($'s) 190,325 215,709 201,624 188,941 187,437 129,156 26,637
% of Total
Assets 44.9% 50.9% 47.6% 44.6% 44.2% 30.5% 6.3%
Base Case Down 200 bp
- ---------------------
Cummulative
Gap($'s) 193,488 221,038 207,880 194,779 190,238 129,330 26,637
% of Total
Assets 45.7% 52.2% 49.1% 46.0% 44.9% 30.5% 6.3%
Beginning in the third quarter of fiscal 2001, the Company began to
utilize an income simulation model to measure interest rate risk and to manage
interest rate sensitivity. The Company believes that income simulation modeling
may enable the Company to better estimate the possible effects on net interest
income due to changing market interest rates. Other key model parameters
include: estimated prepayment rates on the Company's loan, mortgage-backed
securities and investment portfolios; savings decay rate assumptions; and the
repayment terms and embedded options of the Company's borrowings.
18
The following table presents the simulated impact of a 100 and 200 basis
point upward or downward (parallel) shift in market interest rates on net
interest income, return on average equity, return on average assets and the
market value of portfolio equity at September 30, 2005.
Analysis of Sensitivity to Changes in Market Interest Rates
-----------------------------------------------------------
Modeled Change in Market Interest Rates
------------------------------------------------------------------
Estimated impact on: -200 -100 0 +100 +200
- -------------------
Change in net interest income -83.2% -48.6% 0.00% 15.3% 32.2%
Return on average equity -4.50% 1.09% 8.41% 10.60% 12.96%
Return on average assets -0.28% 0.07% 0.56% 0.72% 0.89%
Market value of equity (in
thousands) $ 20,775 $ 28,567 $ 34,207 $ 34,868 $ 28,929
The table below provides information about the Company's anticipated
transactions comprised of firm loan commitments and other commitments, including
undisbursed letters and lines of credit. The Company used no derivative
financial instruments to hedge such anticipated transactions as of September 30,
2005.
Anticipated Transactions
---------------------------------------------------------
(Dollars in Thousands)
Undisbursed construction and
land development loans
Fixed rate $ 6,950
6.61%
Adjustable rate $ 4,430
7.33%
Undisbursed lines of credit
Adjustable rate $ 6,467
7.04%
Loan origination commitments
Fixed rate $ 51
5.83%
Adjustable rate $ 25
5.25%
Letters of credit
Adjustable rate $ 956
7.76%
$18,879
=======
19
In the ordinary course of its construction lending business, the Savings
Bank enters into performance standby letters of credit. Typically, the standby
letters of credit are issued on behalf of a builder to a third party to ensure
the timely completion of a certain aspect of a construction project or land
development. At September 30, 2005, the Savings Bank had eight performance
standby letters of credit outstanding totaling approximately $956 thousand. Four
letters of credit are secured by deposits with the Savings Bank, two letters of
credit are secured by undisbursed construction loan funds, and two letters of
credit are secured by developed property. Seven of the letters of credit will
mature within twelve months, while one letter of credit is open-ended. In the
event that the obligor is unable to perform its obligations as specified in the
standby letter of credit agreement, the Savings Bank would be obligated to
disburse funds up to the amount specified in the standby letter of credit
agreement. The Savings Bank maintains adequate collateral that could be
liquidated to fund this contingent obligation.
ITEM 4.
CONTROLS AND PROCEDURES
Our management evaluated, with the participation of our Chief
Executive Officer and Chief Financial Officer, the effectiveness of our
disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)
under the Securities Exchange Act of 1934) as of September 30, 2005. Based on
such evaluation, our Chief Executive Officer and Chief Financial Officer have
concluded that our disclosure controls and procedures are designed to ensure
that information required to be disclosed by us in the reports that we file or
submit under the Securities Exchange Act of 1934 is recorded, processed,
summarized and reported within the time periods specified in the SEC's rules and
regulations and are operating in an effective manner.
No change in our internal control over financial reporting (as
defined in Rules 13a-15(f) and 15(d)-15(f) under the Securities Exchange Act of
1934) occurred during the first fiscal quarter of fiscal 2006 that has
materially affected, or is reasonably likely to materially affect, our internal
control over financial reporting.
20
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings
-----------------
The Company is involved with various legal actions arising in the ordinary
course of business. Management believes the outcome of these matters will have
no material effect on the consolidated operations or consolidated financial
condition of WVS Financial Corp.
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds
-----------------------------------------------------------
(a) Not applicable.
(b) Not applicable.
(c) The following table sets forth information with respect to purchases
of common stock of the Company made by or on behalf of the Company
during the three months ended September 30, 2005.
---------------------------------------------------------------------------------------------------------
ISSUER PURCHASES OF EQUITY SECURITIES
---------------------------------------------------------------------------------------------------------
Total Number of Maximum Number of
Total Shares Purchased Shares that May Yet
Number of as Part of Publicly Be Repurchased
Shares Average Price Announced Plans or Under the Plans or
Period Purchased Paid per Share ($) Programs (1) Programs (2)(3)
---------------------------------------------------------------------------------------------------------
07/01/05 - 07/31/05 0 0.00 0 24,493
---------------------------------------------------------------------------------------------------------
08/01/05 - 08/31/05 15,000 16.44 15,000 9,943
---------------------------------------------------------------------------------------------------------
09/01/05 - 09/30/05 22,542 16.26 22,542 112,401
---------------------------------------------------------------------------------------------------------
Total 37,542 16.33 37,542 112,401
---------------------------------------------------------------------------------------------------------
- ----------
(1) All shares indicated were purchased under the Company's Seventh and
Eighth Stock Repurchase Programs.
(2) Seventh Stock Repurchase Program
(a) Announced February 24, 2004.
(b) 125,000 common shares approved for repurchase.
(c) No fixed date of expiration.
(d) This Program was completed on September 28, 2005.
(e) Not applicable.
(3) Eighth Stock Repurchase Program
(a) Announced September 27, 2005.
(b) 125,000 common shares approved for repurchase.
(c) No fixed date of expiration.
(d) This program has not expired and has 112,401 shares
remaining to be purchased at September 30, 2005.
(e) Not applicable.
ITEM 3. Defaults Upon Senior Securities
-------------------------------
Not applicable.
21
ITEM 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
(a) The Company's 2005 Annual Meeting of Stockholders was held on
October 25, 2005.
(b) Not applicable.
(c) Two matters were voted upon at the annual meeting held on October
25, 2005: Item 1: Proposal to elect one director for a four-year
term or until her successor is elected and qualified; Item 2:
Proposal to ratify the appointment by the Board of Directors of S.R.
Snodgrass, A.C. as the Company's Independent Registered Public
Accounting Firm for the fiscal year ending June 30, 2006.
Each of the two proposals received stockholder approval. There were
2,389,110 shares outstanding on the record date eligible to vote at
the meeting and 2,015,139 shares were present in person or by proxy
at the meeting. The voting record with respect to each item voted
upon is enumerated below:
Item Nominee
Number (if Applicable) For Against Abstain
------ --------------- --- ------- -------
1 Margaret VonDerau 1,976,161 38,978
2 Ratification of Auditors 1,999,437 5,977 9,725
There were no broker non-votes with respect to any matter voted
upon.
(d) Not applicable.
ITEM 5. Other Information
-----------------
Not applicable.
ITEM 6. Exhibits
--------
The following exhibits are filed as part of this Form 10-Q, and this list
includes the Exhibit Index.
Number Description Page
------ ---------------------------------------------------------- ----
31.1 Rule 13a-14(a) / 15d-14(a) Certification of the Chief E-1
Executive Officer
31.2 Rule 13a-14(a) / 15d-14(a) Certification of the Chief E-2
Accounting Officer
32.1 Section 1350 Certification of the Chief Executive Officer E-3
32.2 Section 1350 Certification of the Chief Accounting Officer E-4
99 Report of Independent Registered Public Accounting Firm E-5
22
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, thereunto duly authorized.
WVS FINANCIAL CORP.
November 10, 2005 BY: /s/ David J. Bursic
------------------------------------
Date David J. Bursic
President and Chief Executive
Officer
(Principal Executive Officer)
November 10, 2005 BY: /s/ Keith A. Simpson
------------------------------------
Date Keith A. Simpson
Vice-President, Treasurer and Chief
Accounting Officer
(Principal Accounting Officer)
23