UNITED
STATES
|
SECURITIES
AND EXCHANGE COMMISSION
|
WASHINGTON, DC 20549 |
FROM:
________________
|
TO:________________
|
South
Carolina
|
57-0858504
|
||
(State
or other jurisdiction of
incorporation
or organization)
|
(IRS
Employer
Identification
No.)
|
YES
|
X
|
NO
|
_______ |
Large accelerated filed [ ] | Accelerated filer [ ] | ||
Non-accelerated filer [ ] | Smaller reporting company [ X ] |
YES
|
_______ |
NO
|
X
|
CLASS:
|
OUTSTANDING
SHARES AT:
|
SHARES:
|
|||
Common
Stock, par
value
$0.01 per share
|
October
31, 2008
|
2,525,264
|
PART
I.
|
FINANCIAL
INFORMATION (UNAUDITED)
|
PAGE
NO.
|
|
Item
1.
|
Financial
Statements (Unaudited):
|
||
Consolidated
Balance Sheets at September 30, 2008 and March 31, 2008
|
1
|
||
Consolidated
Statements of Income for the Three and Six Months Ended September
30,
2008 and 2007
|
2
|
||
Consolidated
Statements of Shareholders’ Equity and Comprehensive Income (Loss)
at
September 30, 2008 and 2007
|
4
|
||
Consolidated
Statements of Cash Flows for the Six Months Ended September
30,
2008 and 2007
|
5
|
||
Notes
to Consolidated Financial Statements
|
7
|
||
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
16
|
|
Item
3.
|
Quantitative
and Qualitative Disclosures about Market Risk
|
31
|
|
Item
4.
|
Controls
and Procedures
|
31
|
|
PART
II.
|
OTHER
INFORMATION
|
||
Item
1.
|
Legal
Proceedings
|
32
|
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
36
|
|
Item
3.
|
Defaults
Upon Senior Securities
|
36
|
|
Item
4.
|
Submission
of Matters to Vote of Security Holders
|
36
|
|
Item
5.
|
Other
Information
|
37
|
|
Item
6.
|
Exhibits
|
37
|
|
Signatures
|
38
|
||
September
30, 2008
|
March
31, 2008
|
|||
Assets:
|
(Unaudited)
|
(Audited)
|
||
Cash
And Cash Equivalents
|
$
|
10,378,350
|
$
|
10,539,054
|
Investment
And Mortgage-Backed Securities:
|
||||
Available
For Sale:(Amortized
cost of $252,584,045
at September 30, 2008 and
$240,295,683 at March 31, 2008)
|
252,105,624
|
244,157,872
|
||
Held
To Maturity:(Fair
value of
$11,287,530 at September 30, 2008 and
$20,506,250 at March
31, 2008)
|
11,155,000
|
20,154,618
|
||
Total
Investment And Mortgage-Backed Securities
|
263,260,624
|
264,312,490
|
||
Loans
Receivable, Net:
|
||||
Held
For Sale
|
1,568,689
|
2,295,721
|
||
Held
For Investment:(Net of
allowance of
$8,263,335 at
September 30,
2008 and
$8,066,762 at March 31, 2008)
|
577,563,488
|
515,635,984
|
||
Total
Loans Receivable, Net
|
579,132,177
|
517,931,705
|
||
Accrued
Interest Receivable:
|
||||
Loans
|
1,830,362
|
1,952,866
|
||
Mortgage-Backed
Securities
|
894,092
|
822,379
|
||
Investments
|
498,220
|
764,746
|
||
Premises
And Equipment, Net
|
22,088,985
|
21,544,380
|
||
Federal
Home Loan Bank Stock, At Cost
|
11,935,700
|
9,497,100
|
||
Bank
Owned Life Insurance
|
9,461,305
|
8,310,813
|
||
Repossessed
Assets Acquired In Settlement Of Loans
|
657,240
|
767,096
|
||
Intangible
Assets, Net
|
397,500
|
442,500
|
||
Goodwill
|
1,197,954
|
1,197,954
|
||
Other
Assets
|
3,730,848
|
1,947,403
|
||
Total
Assets
|
$
|
905,463,357
|
$
|
840,030,486
|
Liabilities
And Shareholders’ Equity
|
||||
Liabilities:
|
||||
Deposit
Accounts
|
$
|
605,163,592
|
$
|
590,850,208
|
Advances
From Federal Home Loan Bank
|
230,626,259
|
178,234,007
|
||
Other
Borrowed Money
|
13,589,213
|
12,784,094
|
||
Advance
Payments By Borrowers For Taxes And Insurance
|
798,933
|
620,467
|
||
Mandatorily
Redeemable Financial Instrument
|
1,477,312
|
1,417,312
|
||
Junior
Subordinated Debentures
|
5,155,000
|
5,155,000
|
||
Other
Liabilities
|
2,778,753
|
3,472,985
|
||
Total
Liabilities
|
859,589,062
|
792,534,073
|
||
Shareholders'
Equity:
|
||||
Serial
Preferred Stock, $.01 Par Value; Authorized Shares – 200,000; Issued
And Outstanding Shares – None
|
-
|
-
|
||
Common
Stock, $.01 Par Value; Authorized Shares – 5,000,000; Issued And
Outstanding Shares -2,657,598 And
2,527,713, Respectively, At September
30, 2008; And 2,649,027And 2,532,192, Respectively, At March 31,
2008
|
26,011
|
25,925
|
||
Additional
Paid-In Capital
|
5,238,123
|
5,072,086
|
||
Treasury
Stock, (At Cost, 129,885 and 116,835 Shares, at September 30, 2008
and
March 31, 2008, Respectively)
|
(3,046,772)
|
(2,769,446)
|
||
Accumulated
Other Comprehensive Income (Loss)
|
(297,674)
|
2,395,537
|
||
Retained
Earnings, Substantially Restricted
|
43,954,607
|
42,772,311
|
||
Total
Shareholders' Equity
|
45,874,295
|
47,496,413
|
||
Total
Liabilities And Shareholders' Equity
|
$
|
905,463,357
|
$
|
840,030,486
|
Three
Months Ended September 30,
|
||||
2008
|
2007
|
|||
Interest
Income:
|
||||
Loans
|
$
|
8,941,511
|
$
|
9,416,586
|
Mortgage-Backed
Securities
|
2,621,098
|
1,557,696
|
||
Investment
Securities
|
777,828
|
1,663,976
|
||
Other
|
3,899
|
8,305
|
||
Total
Interest Income
|
12,344,336
|
12,646,563
|
||
Interest
Expense:
|
||||
NOW
And Money Market Accounts
|
966,696
|
1,672,887
|
||
Passbook
Accounts
|
30,059
|
41,134
|
||
Certificate
Accounts
|
3,569,709
|
3,627,239
|
||
Advances
And Other Borrowed Money
|
2,240,394
|
2,053,365
|
||
Junior
Subordinated Debentures
|
74,852
|
92,252
|
||
Total
Interest Expense
|
6,881,710
|
7,486,877
|
||
Net
Interest Income
|
5,462,626
|
5,159,686
|
||
Provision
For Loan Losses
|
275,000
|
150,000
|
||
Net
Interest Income After Provision For Loan Losses
|
5,187,626
|
5,009,686
|
||
Non-Interest
Income:
|
||||
Gain
On Sale Of Investments
|
25,035
|
-
|
||
Gain
On Sale Of Loans
|
109,035
|
105,450
|
||
Service
Fees On Deposit Accounts
|
276,240
|
323,423
|
||
Income
From Cash Value Of Life Insurance
|
92,746
|
87,164
|
||
Commissions
From Insurance Agency
|
164,138
|
173,488
|
||
Other
Agency Income
|
76,081
|
26,910
|
||
Trust
Income
|
105,000
|
139,850
|
||
Other
|
212,328
|
193,085
|
||
Total
Non-Interest Income
|
1,060,603
|
1,049,370
|
||
General
And Administrative Expenses:
|
||||
Salaries
And Employee Benefits
|
2,831,272
|
2,627,272
|
||
Occupancy
|
493,366
|
445,602
|
||
Advertising
|
106,856
|
87,148
|
||
Depreciation
And Maintenance Of Equipment
|
414,910
|
337,091
|
||
FDIC
Insurance Premiums
|
191,535
|
14,870
|
||
Amortization
of Intangibles
|
22,500
|
22,500
|
||
Mandatorily
Redeemable Financial Instrument Valuation Expense
|
60,000
|
-
|
||
Other
|
954,950
|
846,518
|
||
Total
General And Administrative Expenses
|
5,075,389
|
4,381,001
|
||
Income
Before Income Taxes
|
1,172,840
|
1,678,055
|
||
Provision
For Income Taxes
|
388,002
|
550,479
|
||
Net
Income
|
$
|
784,838
|
$
|
1,127,576
|
Basic
Net Income Per Common Share
|
$
|
0.31
|
$
|
0.43
|
Diluted
Net Income Per Common Share
|
$
|
0.31
|
$
|
0.43
|
Cash
Dividend Per Share On Common Stock
|
$
|
0.08
|
$
|
0.07
|
Basic
Weighted Average Shares Outstanding
|
2,524,758
|
2,602,072
|
||
Diluted
Weighted Average Shares Outstanding
|
2,539,756
|
2,610,567
|
Six
Months Ended September 30,
|
||||
2008
|
2007
|
|||
Interest
Income:
|
||||
Loans
|
$
|
17,483,246
|
$
|
18,208,165
|
Mortgage-Backed
Securities
|
5,016,481
|
3,099,406
|
||
Investment
Securities
|
1,666,729
|
3,217,496
|
||
Other
|
9,077
|
27,902
|
||
Total
Interest Income
|
24,175,533
|
24,552,969
|
||
Interest
Expense:
|
||||
NOW
And Money Market Accounts
|
1,890,787
|
3,327,726
|
||
Passbook
Accounts
|
63,562
|
82,949
|
||
Certificate
Accounts
|
7,232,635
|
6,870,088
|
||
Advances
And Other Borrowed Money
|
4,252,158
|
3,951,698
|
||
Junior
Subordinated Debentures
|
148,971
|
183,077
|
||
Total
Interest Expense
|
13,588,113
|
14,415,538
|
||
Net
Interest Income
|
10,587,420
|
10,137,431
|
||
Provision
For Loan Losses
|
500,000
|
300,000
|
||
Net
Interest Income After Provision For Loan Losses
|
10,087,420
|
9,837,431
|
||
Non-Interest
Income:
|
||||
Gain
On Sale Of Investments
|
126,440
|
-
|
||
Gain
On Sale Of Loans
|
227,718
|
281,571
|
||
Service
Fees On Deposit Accounts
|
557,393
|
650,745
|
||
Income
From Cash Value Of Life Insurance
|
178,492
|
149,201
|
||
Commissions
From Insurance Agency
|
333,130
|
319,161
|
||
Other
Agency Income
|
123,018
|
56,168
|
||
Trust
Income
|
210,000
|
238,625
|
||
Other
|
425,619
|
414,497
|
||
Total
Non-Interest Income
|
2,181,810
|
2,109,968
|
||
General
And Administrative Expenses:
|
||||
Salaries
And Employee Benefits
|
5,615,507
|
5,197,551
|
||
Occupancy
|
990,686
|
868,113
|
||
Advertising
|
247,677
|
189,421
|
||
Depreciation
And Maintenance Of Equipment
|
841,834
|
656,616
|
||
FDIC
Insurance Premiums
|
347,345
|
30,197
|
||
Amortization
of Intangibles
|
45,000
|
45,000
|
||
Mandatorily
Redeemable Financial Instrument Valuation Expense
|
60,000
|
-
|
||
Other
|
1,749,330
|
1,645,548
|
||
Total
General And Administrative Expenses
|
9,897,379
|
8,632,446
|
||
Income
Before Income Taxes
|
2,371,851
|
3,314,953
|
||
Provision
For Income Taxes
|
785,108
|
1,091,346
|
||
Net
Income
|
$
|
1,586,743
|
$
|
2,223,607
|
Basic
Net Income Per Common Share
|
$
|
0.63
|
$
|
0.85
|
Diluted
Net Income Per Common Share
|
$
|
0.62
|
$
|
0.85
|
Cash
Dividend Per Share On Common Stock
|
$
|
0.16
|
$
|
0.14
|
Basic
Weighted Average Shares Outstanding
|
2,528,122
|
2,609,576
|
||
Diluted
Weighted Average Shares Outstanding
|
2,539,135
|
2,616,718
|
Common
Stock
|
Additional
Paid
– In
Capital
|
Treasury
Stock
|
Accumulated
Other
Comprehensive
Income
(Loss)
|
Retained
Earnings
|
Total
|
|||||||
Balance
At March 31, 2007
|
$
|
25,814
|
$
|
4,850,029
|
$
|
(651,220)
|
$
|
(747,316)
|
$
|
39,215,901
|
$
|
42,693,208
|
Net
Income
|
-
|
-
|
-
|
-
|
2,223,607
|
2,223,607
|
||||||
Other
Comprehensive Income,
Net
Of Tax:
|
||||||||||||
Unrealized
Holding Gains
On
Securities Available
For Sale
|
-
|
-
|
-
|
334,013
|
-
|
334,013
|
||||||
Comprehensive
Income
|
-
|
-
|
-
|
-
|
-
|
2,557,620
|
||||||
Purchase
Of Treasury Stock
At Cost, 22,199 shares
|
-
|
-
|
(543,323)
|
-
|
-
|
(543,323)
|
||||||
Employee Stock Purchase Plan
Purchases
|
24
|
48,094
|
-
|
-
|
-
|
48,118
|
||||||
Exercise Of Stock Options
|
63
|
104,958
|
-
|
-
|
-
|
105,021
|
||||||
Stock Compensation Expense
|
-
|
5,995
|
-
|
-
|
-
|
5,995
|
||||||
Cash
Dividends
|
-
|
-
|
-
|
-
|
(364,796)
|
(364,796)
|
||||||
Balance
At September 30, 2007
|
$
|
25,901
|
$
|
5,009,076
|
$
|
(1,194,543)
|
$
|
(413,303)
|
$
|
41,074,712
|
$
|
44,501,843
|
Common
Stock
|
Additional
Paid
– In
Capital
|
Treasury
Stock
|
Accumulated
Other
Comprehensive
Income
(Loss)
|
Retained
Earnings
|
Total
|
|||||||
Balance
At March 31, 2008
|
$
|
25,925
|
$
|
5,072,086
|
$
|
(2,769,446)
|
$
|
2,395,537
|
$
|
42,772,311
|
$
|
47,496,413
|
Net
Income
|
-
|
-
|
-
|
-
|
1,586,743
|
1,586,743
|
||||||
Other Comprehensive Income,
Net Of Tax:
|
||||||||||||
Unrealized Holding Losses
On Securities Available
For Sale, Net Of Taxes
|
-
|
-
|
-
|
(2,614,818)
|
-
|
(2,614,818)
|
||||||
Reclassification Adjustment
For
Gains Included In Net
Income,
Net Of Taxes
|
-
|
-
|
-
|
(78,393)
|
-
|
(78,393)
|
||||||
Comprehensive
Loss
|
-
|
-
|
-
|
-
|
-
|
(1,106,468)
|
||||||
Purchase Of Treasury Stock
At Cost, 13,050 shares
|
-
|
-
|
(277,326)
|
-
|
-
|
(277,326)
|
||||||
Employee Stock Purchase Plan
Purchases
|
26
|
49,948
|
-
|
-
|
-
|
49,974
|
||||||
Exercise Of Stock Options
|
60
|
99,960
|
-
|
-
|
-
|
100,020
|
||||||
Stock Compensation Expense
|
-
|
16,129
|
-
|
-
|
-
|
16,129
|
||||||
Cash
Dividends
|
-
|
-
|
-
|
-
|
(404,447)
|
(404,447)
|
||||||
Balance
At September 30, 2008
|
$
|
26,011
|
$
|
5,238,123
|
$
|
(3,046,772)
|
$
|
(297,674)
|
$
|
43,954,607
|
$
|
45,874,295
|
Six
Months Ended September 30,
|
||||||||
2008
|
2007
|
|||||||
Cash
Flows From Operating Activities:
|
||||||||
Net
Income
|
$
|
1,586,743
|
$
|
2,223,607
|
||||
Adjustments
To Reconcile Net Income To Net Cash Provided By Operating
Activities:
|
||||||||
Depreciation
Expense
|
742,265
|
520,001
|
||||||
Amortization
Of Intangible Assets
|
45,000
|
45,000
|
||||||
Stock
Option Compensation Expense
|
16,129
|
5,995
|
||||||
Discount
Accretion And Premium Amortization
|
192,595
|
112,308
|
||||||
Provisions
For Losses On Loans And Real Estate
|
500,000
|
300,000
|
||||||
Mandatorily
Redeemable Financial Instrument Valuation Expense
|
60,000
|
|||||||
Loss
On Sale Of Mortgage-Backed Securities Available For Sale
|
22,204
|
-
|
||||||
Gain
On Sale Of Investment Securities Available For Sale
|
(148,644)
|
-
|
||||||
Gain
On Sale Of Loans
|
(227,718)
|
(281,571)
|
||||||
Gain
On Sale Of Real Estate
|
(13,694)
|
(23,404)
|
||||||
Amortization
Of Deferred Fees On Loans
|
(49,285)
|
(54,515)
|
||||||
Proceeds
From Sale Of Loans Held For Sale
|
17,669,670
|
17,446,108
|
||||||
Origination
Of Loans For Sale
|
(16,714,920)
|
(16,983,431)
|
||||||
(Increase)
Decrease In Accrued Interest Receivable:
|
||||||||
Loans
|
122,504
|
(423,578)
|
||||||
Mortgage-Backed
Securities
|
(71,713)
|
(21,452)
|
||||||
Investments
|
266,526
|
(260,535)
|
||||||
Increase
In Advance Payments By Borrowers
|
178,466
|
421,994
|
||||||
Other,
Net
|
(805,278)
|
532,044
|
||||||
Net
Cash Provided By Operating Activities
|
3,325,850
|
3,558,571
|
||||||
Cash
Flows From Investing Activities:
|
||||||||
Principal
Repayments On Mortgage-Backed Securities Available For
Sale
|
23,333,383
|
18,400,859
|
||||||
Purchase
Of Investment Securities Available For Sale
|
(8,184,620)
|
(22,552,547)
|
||||||
Purchase
Of Mortgage-Backed Securities Available For Sale
|
(48,075,466)
|
(17,778,773)
|
||||||
Maturities
Of Investment Securities Available For Sale
|
10,442,949
|
7,682,194
|
||||||
Maturities
Of Investment Securities Held To Maturity
|
9,000,000
|
10,000,000
|
||||||
Proceeds
From Sale Of Mortgage-Backed Securities Available For
Sale
|
2,993,520
|
-
|
||||||
Proceeds
From Sale Of Investment Securities Available For Sale
|
7,135,335
|
-
|
||||||
Purchase
Of FHLB Stock
|
(5,800,200)
|
(5,496,400)
|
||||||
Redemption
Of FHLB Stock
|
3,361,600
|
4,358,300
|
||||||
Increase
In Loans To Customers
|
(62,580,669)
|
(52,144,992)
|
||||||
Proceeds
From Sale Of Repossessed Assets
|
346,000
|
137,279
|
||||||
Purchase
And Improvement Of Premises And Equipment
|
(1,286,870)
|
(3,483,550)
|
||||||
Purchase
Of Bank Owned Life Insurance
|
(1,150,492)
|
(2,349,201)
|
||||||
Net
Cash Used By Investing Activities
|
(70,465,530)
|
(63,226,831)
|
||||||
Cash
Flows From Financing Activities:
|
||||||||
Increase
In Deposit Accounts
|
14,313,384
|
31,861,129
|
||||||
Proceeds
From FHLB Advances
|
173,800,000
|
203,400,000
|
||||||
Repayment
Of FHLB Advances
|
(121,407,748)
|
(177,307,594)
|
||||||
Net
Proceeds Of Other Borrowings
|
805,119
|
846,525
|
||||||
Dividends
To Shareholders
|
(404,447)
|
(364,796)
|
||||||
Purchase
Of Treasury Stock
|
(277,326)
|
(543,323)
|
||||||
Proceeds
From Employee Stock Purchases
|
49,974
|
48,118
|
||||||
Proceeds
From Exercise of Stock Options
|
100,020
|
105,021
|
||||||
Net
Cash Provided By Financing Activities
|
66,978,976
|
58,045,080
|
||||||
Six
Months Ended September 30,
|
||||||||
2008
|
2007
|
|||||||
Net
Decrease In Cash And Cash Equivalents
|
(160,704)
|
(1,623,180)
|
||||||
Cash
And Cash Equivalents At Beginning Of Period
|
10,539,054
|
13,438,129
|
||||||
Cash
And Cash Equivalents At End Of Period
|
$
|
10,378,350
|
$
|
11,814,949
|
||||
Supplemental
Disclosure Of Cash Flows Information:
|
||||||||
Cash
Paid During The Period For Interest
|
$
|
13,886,219
|
$
|
14,266,412
|
||||
Cash
Paid During The Period For Income Taxes
|
$
|
1,232,822
|
$
|
1,304,290
|
||||
Additions
To Repossessed Acquired Through Foreclosure
|
$
|
222,450
|
$
|
611,833
|
||||
(Increase)
Decrease In Unrealized Net Loss On Securities Available For
Sale,
Net
Of Taxes
|
$
|
(2,693,211)
|
$
|
334,013
|
1.
|
Basis
of Presentation
|
2.
|
Principles
of Consolidation
|
3.
|
Critical
Accounting Policies, Continued
|
4.
|
Earnings
Per Share
|
For
the Quarter Ended
|
||||||||||||
September
30, 2008
|
||||||||||||
Income
(Numerator) Amount
|
Shares
(Denominator)
|
Per
Share
|
||||||||||
Basic
EPS
|
$ | 784,838 | 2,524,758 | $ | 0.31 | |||||||
Effect
of Diluted Securities:
|
||||||||||||
Mandatorily
Redeemable
Shares
|
- | 14,998 | - | |||||||||
Stock Options
|
- | - | - | |||||||||
Diluted
EPS
|
$ | 784,838 | 2,539,756 | $ | 0.31 |
For
the Quarter Ended
|
||||||||||||
September
30, 2007
|
||||||||||||
Income
(Numerator) Amount
|
Shares
(Denominator)
|
Per
Share
|
||||||||||
Basic
EPS
|
$ | 1,127,576 | 2,602,072 | $ | 0.43 | |||||||
Effect
of Diluted Securities:
|
||||||||||||
Stock Options
|
- | 8,495 | - | |||||||||
Diluted
EPS
|
$ | 1,127,576 | 2,610,567 | $ | 0.43 |
For
the Six Months Ended
|
||||||||||||
September
30, 2008
|
||||||||||||
Income
(Numerator) Amount
|
Shares
(Denominator)
|
Per
Share
|
||||||||||
Basic
EPS
|
$ | 1,586,743 | 2,528,122 | $ | 0.63 | |||||||
Effect
of Diluted Securities:
|
||||||||||||
Mandatorily
Redeemable
Shares
|
- | 11,013 | (0.01 | ) | ||||||||
Stock Options
|
- | - | - | |||||||||
Diluted
EPS
|
$ | 1,586,743 | 2,539,135 | $ | 0.62 |
For
the Six Months Ended
|
||||||||||||
September
30, 2007
|
||||||||||||
Income
(Numerator) Amount
|
Shares
(Denominator)
|
Per
Share
|
||||||||||
Basic
EPS
|
$ | 2,223,607 | 2,609,576 | $ | 0.85 | |||||||
Effect
of Diluted Securities:
|
||||||||||||
Stock Options
|
- | 7,142 | - | |||||||||
Diluted
EPS
|
$ | 2,223,607 | 2,616,718 | $ | 0.85 |
5.
|
Stock-Based
Compensation
|
Three
Months Ended
September
30, 2008
|
Six
Months Ended
September
30, 2008
|
||||
Shares
|
Weighted
Average
Exercise
Price
|
Shares
|
Weighted
Average
Exercise
Price
|
||
Balance,
Beginning of Period/Year
|
113,600
|
$21.58
|
111,100
|
$21.55
|
|
Options
granted
|
2,000
|
22.91
|
4,500
|
22.91
|
|
Options
exercised
|
(6,000)
|
16.67
|
(6,000)
|
16.67
|
|
Options
forfeited
|
(9,100)
|
20.32
|
(9,100)
|
20.32
|
|
Balance,
September 30, 2008
|
100,500
|
$22.01
|
100,500
|
$22.01
|
|
Options
Exercisable
|
60,000
|
60,000
|
|||
Options
Available For Grant
|
50,000
|
50,000
|
For
Awards Granted During
The
Three Month Period Ended
September
30,
|
For
Awards Granted During
The
Six Month Period Ended
September
30,
|
||||||
2008
|
2007
|
2008
|
2007
|
||||
Awards
granted
|
2,000
|
3,000
|
4,500
|
3,000
|
|||
Dividend
Yield
|
1.79%
|
1.52%
|
1.76-1.79%
|
1.52%
|
|||
Expected
Volatility
|
17.62%
|
23.90%
|
17.62-18.10%
|
23.90%
|
|||
Risk-free
interest rate
|
3.88%
|
5.03%
|
3.69-3.88%
|
5.03%
|
|||
Expected
life
|
9.00
|
9.00
|
9.00
|
9.00
|
Grant
Date
|
Outstanding
Options
|
Option
Price
|
Expiration
Date
|
|||
10/19/99
|
9,600
|
$16.67
|
09/30/05
to 09/30/09
|
|||
09/01/03
|
2,400
|
$24.00
|
08/31/13
|
|||
12/01/03
|
3,000
|
$23.65
|
11/30/13
|
|||
01/01/04
|
5,500
|
$24.22
|
12/31/13
|
|||
03/08/04
|
13,000
|
$21.43
|
03/08/14
|
|||
06/07/04
|
2,000
|
$24.00
|
06/07/14
|
|||
01/01/05
|
20,500
|
$20.55
|
12/31/14
|
|||
01/01/06
|
4,000
|
$23.91
|
01/01/16
|
|||
08/24/06
|
14,000
|
$23.03
|
08/24/16
|
|||
05/24/07
|
2,000
|
$24.34
|
05/24/17
|
|||
07/09/07
|
1,000
|
$24.61
|
07/09/17
|
|||
10/01/07
|
2,000
|
$24.28
|
10/01/17
|
|||
01/01/08
|
17,000
|
$23.49
|
01/01/18
|
|||
05/19/08
|
2,500
|
$22.91
|
05/19/18
|
|||
07/01/08
|
2,000
|
$22.91
|
07/01/18
|
Level
1
|
Quoted
prices in active markets for identical assets or liabilities. Level 1
assets and liabilities include debt and equity securities and derivative
contracts that are traded in an active exchange market, as well as U.S.
Treasuries and money market funds.
|
Level
2
|
Observable
inputs other than Level 1 prices such as quoted prices for similar assets
or liabilities; quoted prices in markets that are not active; or other
inputs that are observable or can be corroborated by observable market
data for substantially the full term of the assets or liabilities. Level 2
assets and liabilities include debt securities with quoted prices that are
traded less frequently than exchange-traded instruments, mortgage-backed
securities, municipal bonds, corporate debt securities and derivative
contracts whose value is determined using a pricing model with inputs that
are observable in the market or can be derived principally from or
corroborated by observable market data. This category generally includes
certain derivative contracts and impaired loans.
|
Level
3
|
Unobservable
inputs that are supported by little or no market activity and that are
significant to the fair value of the assets or liabilities. Level 3 assets
and liabilities include financial instruments whose value is determined
using pricing models, discounted cash flow methodologies, or similar
techniques, as well as instruments for which the determination of fair
value requires significant management judgment or estimation. For example,
this category generally includes certain private equity investments,
retained residual interests in securitizations, residential mortgage
servicing rights, and highly-structured or long-term derivative
contracts.
|
Assets:
|
Quoted
Market Price
In
Active Markets
(Level
1)
|
Significant
Other
Observable
Inputs
(Level
2)
|
Significant
Unobservable
Inputs
(Level
3)
|
Available-For-Sale
Investment
And
Mortgage-
Backed
Securities
|
$ -
|
$ 252,105,624
|
$ -
|
Mortgage
Loans Held
For
Sale
|
-
|
1,568,689
|
-
|
Total
|
$ -
|
$ 253,674,313
|
$ -
|
Liabilities:
|
|||
Mandatorily
Redeemable
Financial
Instrument
|
$ -
|
$ 1,477,312
|
$ -
|
Total
|
$ -
|
$ 1,477,312
|
$ -
|
September 30,
2008
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
||||||||||||
FHLB
Securities
|
$ | 26,956,378 | $ | 73,710 | $ | 239,242 | $ | 26,790,846 | ||||||||
Federal
Farm Credit Securities
|
11,558,833 | 28,685 | 182,130 | 11,405,388 | ||||||||||||
FNMA
Bonds
|
2,000,000 | - | 44,060 | 1,955,940 | ||||||||||||
Mortgage-Backed
Securities
|
211,965,896 | 1,213,905 | 1,308,101 | 211,871,700 | ||||||||||||
Equity
Securities
|
102,938 | - | 21,188 | 81,750 | ||||||||||||
Total
|
$ | 252,584,045 | $ | 1,316,300 | $ | 1,794,721 | $ | 252,105,624 | ||||||||
March 31,
2008
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
||||||||||||
FHLB
Securities
|
$ | 31,891,456 | $ | 625,583 | $ | - | $ | 32,517,039 | ||||||||
Federal
Farm Credit Securities
|
14,849,646 | 323,594 | - | 15,173,240 | ||||||||||||
FNMA
Bonds
|
2,997,470 | 7,840 | - | 3,005,310 | ||||||||||||
Mortgage-Backed
Securities
|
190,454,173 | 3,023,143 | 104,283 | 193,373,033 | ||||||||||||
Equity
Securities
|
102,938 | - | 13,688 | 89,250 | ||||||||||||
Total
|
$ | 240,295,683 | $ | 3,980,160 | $ | 117,971 | $ | 244,157,872 |
September 30,
2008
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
||||||||||||
FHLB
Securities
|
$ | 10,000,000 | $ | 124,400 | $ | - | $ | 10,124,400 | ||||||||
Federal
Farm Credit Securities
|
1,000,000 | 8,130 | - | 1,008,130 | ||||||||||||
Equity
Securities
|
155,000 | - | - | 155,000 | ||||||||||||
Total
|
$ | 11,155,000 | $ | 132,530 | $ | - | $ | 11,287,530 | ||||||||
March 31,
2008
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
||||||||||||
FHLB
Securities
|
17,999,618 | $ | 320,072 | $ | - | $ | 18,319,690 | |||||||||
Federal
Farm Credit Securities
|
2,000,000 | 31,560 | - | 2,031,560 | ||||||||||||
Equity
Securities
|
155,000 | - | - | 155,000 | ||||||||||||
Total
|
$ | 20,154,618 | $ | $351,632 | $ | - | $ | 20,506,250 |
September
30, 2008
|
March
31, 2008
|
|||
Residential
Real Estate
|
$
|
134,309,185
|
$
|
131,863,466
|
Consumer
|
67,424,761
|
66,832,377
|
||
Commercial
Business & Real Estate
|
392,472,000
|
333,386,661
|
||
Loans
Held For Sale
|
1,568,689
|
2,295,721
|
||
595,774,635
|
534,378,225
|
|||
Less:
|
||||
Allowance
For Possible Loan Loss
|
8,263,335
|
8,066,762
|
||
Loans
In Process
|
8,067,762
|
8,064,728
|
||
Deferred
Loan Fees
|
311,361
|
315,030
|
||
16,642,458
|
16,446,520
|
|||
$
|
579,132,177
|
$
|
517,931,705
|
Increase
(Decrease)
|
|||||||||||
September
30,
2008
|
March
31,
2008
|
Amount
|
Percent
|
||||||||
Cash
And Cash Equivalents
|
$
|
10,378,350
|
$
|
10,539,054
|
$
|
(160,704)
|
(1.5)%
|
||||
Investment
And Mortgage-
Backed
Securities –
Available
For Sale
|
252,105,624
|
244,157,872
|
7,947,752
|
3.3
|
|||||||
Investment
And Mortgage-
Backed
Securities – Held
To
Maturity
|
11,155,000
|
20,154,618
|
(8,999,618)
|
(44.7)
|
|||||||
Loan
Receivable, Net
|
579,132,177
|
517,931,705
|
61,200,472
|
11.8
|
|||||||
Premises And Equipment,
Net
|
22,088,985
|
21,544,380
|
544,605
|
2.5
|
|||||||
FHLB
Stock, At Cost
|
11,935,700
|
9,497,100
|
2,438,600
|
25.7
|
|||||||
Bank Owned Life Insurance
|
9,461,305
|
8,310,813
|
1,150,492
|
13.8
|
|||||||
Repossessed
Assets
Acquired
in Settlement of
Loans
|
657,240
|
767,096
|
(109,856)
|
(14.3)
|
|||||||
Other
Assets
|
3,730,848
|
1,947,403
|
1,783,445
|
91.6
|
Balance
|
||||||||||||||||||||||||||
September
30, 2008
|
March
31, 2008
|
Increase
(Decrease)
|
||||||||||||||||||||||||
Balance
|
Weighted
Rate
|
Balance
|
Weighted
Rate
|
Amount
|
Percent
|
|||||||||||||||||||||
Demand
Accounts:
|
||||||||||||||||||||||||||
Checking
|
$ | 97,575,051 | 0.46 | % | $ | 100,585,610 | 0.47 | % | $ | (3,010,559 | ) | (3.0 | )% | |||||||||||||
Money
Market
|
141,649,832 | 3.18 | 143,225,218 | 2.84 | (1,575,386 | ) | (1.1 | ) | ||||||||||||||||||
Regular
Savings
|
15,947,644 | 0.73 | 15,966,557 | 0.97 | (18,913 | ) | (0.1 | ) | ||||||||||||||||||
Total
|
255,172,527 | 1.99 | 259,777,385 | 1.87 | (4,604,858 | ) | (1.8 | ) | ||||||||||||||||||
Certificate
Accounts
|
||||||||||||||||||||||||||
0.00
– 1.99%
|
1,037,847 | - | 1,037,847 | 100.0 | ||||||||||||||||||||||
2.00
– 2.99%
|
41,830,427 | 14,047,109 | 27,783,318 | 197.8 | ||||||||||||||||||||||
3.00
– 3.99%
|
88,843,982 | 59,526,823 | 29,317,159 | 49.3 | ||||||||||||||||||||||
4.00
– 4.99%
|
163,340,645 | 68,149,323 | 95,191,322 | 139.7 | ||||||||||||||||||||||
5.00
– 5.99%
|
54,938,164 | 189,349,568 | (134,411,404 | ) | (71.0 | ) | ||||||||||||||||||||
Total
|
349,991,065 | 4.08 | 331,072,823 | 4.75 | 18,918,242 | 5.7 | ||||||||||||||||||||
Total
Deposits
|
$ | 605,163,592 | 3.20 | % | $ | 590,850,208 | 3.46 | % | $ | 14,313,384 | 2.4 | % | ||||||||||||||
Balance
|
||||||||||||||||||||||||
September
30, 2008
|
March
31, 2008
|
Increase
|
||||||||||||||||||||||
Fiscal
Year Due:
|
Balance
|
Rate
|
Balance
|
Rate
|
Balance
|
Percent
|
||||||||||||||||||
2009
|
$ | 92,700,000 |
2.69%
|
$ | 42,300,000 |
3.28%
|
$ | 50,400,000 |
119.1%
|
|||||||||||||||
2010
|
10,000,000 |
4.88
|
10,000,000 |
4.88
|
- |
-
|
||||||||||||||||||
2011
|
15,000,000 |
4.87
|
15,000,000 |
4.87
|
- |
-
|
||||||||||||||||||
2012
|
24,700,000 |
4.56
|
24,700,000 |
4.56
|
- |
-
|
||||||||||||||||||
2013
|
10,000,000 |
4.76
|
10,000,000 |
4.76
|
- |
-
|
||||||||||||||||||
Thereafter
|
78,226,259 |
4.18
|
76,234,007 |
4.25
|
1,992,252 |
2.6
|
||||||||||||||||||
Total
Advances
|
$ | 230,626,259 |
3.72%
|
$ | 178,234,007 |
4.18%
|
$ | 52,392,252 |
29.4%
|
As
of September 30, 2008
|
||||||||||
Borrow
Date
|
Maturity
Date
|
Amount
|
Int.
Rate
|
Type
|
Call
Dates
|
|||||
02/20/04
|
02/20/14
|
$
|
5,000,000
|
3.225%
|
1
Time Call
|
02/20/09
|
||||
06/24/05
|
06/24/15
|
5,000,000
|
3
|
3.710%
|
1
Time Call
|
06/24/10
|
||||
11/10/05
|
11/10/15
|
5,000,000
|
4.400%
|
1
Time Call
|
11/10/09
|
|||||
11/23/05
|
11/23/15
|
5,000,000
|
3.933%
|
Multi-Call
|
05/25/08
and quarterly thereafter
|
|||||
11/29/05
|
11/29/13
|
5,000,000
|
4.320%
|
1
Time Call
|
05/29/09
|
|||||
12/14/05
|
12/14/11
|
5,000,000
|
4.640%
|
1
Time Call
|
09/14/09
|
|||||
01/12/06
|
01/12/16
|
5,000,000
|
4.450%
|
1
Time Call
|
01/12/11
|
|||||
03/01/06
|
03/03/14
|
5,000,000
|
4.720%
|
1
Time Call
|
03/03/10
|
|||||
06/02/06
|
06/02/16
|
5,000,000
|
5.160%
|
1
Time Call
|
06/02/11
|
|||||
07/11/06
|
07/11/16
|
5,000,000
|
4.800%
|
Multi-Call
|
07/11/08
and quarterly thereafter
|
|||||
10/25/06
|
10/25/11
|
5,000,000
|
4.830%
|
1
Time Call
|
10/27/08
|
|||||
11/29/06
|
11/29/16
|
5,000,000
|
4.025%
|
Multi-Call
|
05/29/08
and quarterly thereafter
|
|||||
01/19/07
|
07/21/14
|
5,000,000
|
4.885%
|
1
Time Call
|
07/21/11
|
|||||
03/09/07
|
03/09/12
|
4,700,000
|
4.286%
|
Multi-Call
|
06/09/08
and quarterly thereafter
|
|||||
05/24/07
|
05/24/17
|
7,900,000
|
4.375%
|
Multi-Call
|
05/27/08
and quarterly thereafter
|
|||||
06/29/07
|
06/29/12
|
5,000,000
|
4.945%
|
1
Time Call
|
06/29/09
|
|||||
07/25/07
|
07/25/17
|
5,000,000
|
4.396%
|
Multi-Call
|
07/25/08
and quarterly thereafter
|
|||||
11/16/07
|
11/16/11
|
5,000,000
|
3.745%
|
Multi-Call
|
11/17/08
and quarterly thereafter
|
|||||
08/28/08
|
08/28/13
|
5,000,000
|
3.113%
|
Multi-Call
|
08/30/10
and quarterly thereafter
|
|||||
08/28/08
|
08/28/18
|
5,000,000
|
3.385%
|
1
Time Call
|
08/28/11
|
As
of March 31, 2008
|
||||||||||
Borrow
Date
|
Maturity
Date
|
Amount
|
Int.
Rate
|
Type
|
Call
Dates
|
|||||
02/20/04
|
02/20/14
|
$
|
5,000,000
|
3.225%
|
1
Time Call
|
02/20/09
|
||||
04/16/04
|
04/16/14
|
3,000,000
|
3.330%
|
1
Time Call
|
04/16/08
|
|||||
06/24/05
|
06/24/15
|
5,000,000
|
3
|
3.710%
|
1
Time Call
|
06/24/10
|
||||
07/22/05
|
0
|
07/22/15
|
5,000,000
|
3.790%
|
1
Time Call
|
07/22/08
|
||||
11/10/05
|
11/10/15
|
5,000,000
|
4.400%
|
1
Time Call
|
11/10/09
|
|||||
11/23/05
|
11/23/15
|
5,000,000
|
3.933%
|
Multi-Call
|
05/25/08
and quarterly thereafter
|
|||||
11/29/05
|
11/29/13
|
5,000,000
|
4.320%
|
1
Time Call
|
05/29/09
|
|||||
12/14/05
|
12/14/11
|
5,000,000
|
4.640%
|
1
Time Call
|
09/14/09
|
|||||
01/12/06
|
01/12/16
|
5,000,000
|
4.450%
|
1
Time Call
|
01/12/11
|
|||||
03/01/06
|
03/03/14
|
5,000,000
|
4.720%
|
1
Time Call
|
03/03/10
|
|||||
06/02/06
|
06/02/16
|
5,000,000
|
5.160%
|
1
Time Call
|
06/02/11
|
|||||
07/11/06
|
07/11/16
|
5,000,000
|
4.800%
|
Multi-Call
|
07/11/08
and quarterly thereafter
|
|||||
10/25/06
|
10/25/11
|
5,000,000
|
4.830%
|
1
Time Call
|
10/27/08
|
|||||
11/29/06
|
11/29/16
|
5,000,000
|
4.025%
|
Multi-Call
|
05/29/08
and quarterly thereafter
|
|||||
01/19/07
|
07/21/14
|
5,000,000
|
4.885%
|
1
Time Call
|
07/21/11
|
|||||
03/09/07
|
03/09/12
|
4,700,000
|
4.286%
|
Multi-Call
|
06/09/08
and quarterly thereafter
|
|||||
05/24/07
|
05/24/17
|
7,900,000
|
4.375%
|
Multi-Call
|
05/27/08
and quarterly thereafter
|
|||||
06/29/07
|
06/29/12
|
5,000,000
|
4.945%
|
1
Time Call
|
06/29/09
|
|||||
07/25/07
|
07/25/17
|
5,000,000
|
4.396%
|
Multi-Call
|
07/25/08
and quarterly thereafter
|
|||||
11/16/07
|
11/16/11
|
5,000,000
|
3.745%
|
Multi-Call
|
11/17/08
and quarterly thereafter
|
|||||
At
September 30, 2008
|
At
March 31, 2008
|
$
Increase
|
%
Increase
|
|||||||||||||||||||||
Amount
|
Percent
(1)
|
Amount
|
Percent
(1)
|
(Decrease)
|
(Decrease)
|
|||||||||||||||||||
Loans
90 days or more past due or non-accrual loans:
|
||||||||||||||||||||||||
1-4 family real
estate
|
$ | 1,100,144 | 0.2 | % | $ | 609,336 | 0.1 | % | $ | 490,808 | 80.5 | % | ||||||||||||
Real estate
construction
|
1,561,532 | 0.3 | − | 0.0 | 1,561,532 | 100.0 | ||||||||||||||||||
Consumer
|
611,106 | 0.1 | 415,796 | 0.1 | 195,310 | 47.0 | ||||||||||||||||||
Commercial business & real
estate
|
5,503,299 | 0.9 | 4,994,249 | 0.9 | 509,050 | 10.2 | ||||||||||||||||||
Total non-performing
loans
|
8,776,081 | 1.5 | 6,019,381 | 1.1 | 2,746,700 | 45.8 | ||||||||||||||||||
Other
non-performing assets
|
||||||||||||||||||||||||
Repossessed
assets
|
10,000 | 0.0 | 6,000 | 0.0 | 4,000 | 66.7 | ||||||||||||||||||
Real estate
owned
|
647,240 | 0.1 | 761,096 | 0.1 | (113,856 | ) | (15.0 | ) | ||||||||||||||||
Total other non-performing
assets
|
657,240 | 0.1 | 767,096 | 0.1 | (109,856 | ) | (14.3 | ) | ||||||||||||||||
Total
non-performing assets
|
$ | 9,433,321 | 1.6 | % | $ | 6,786,477 | 1.3 | % | $ | 2,646,844 | 39.0 | % | ||||||||||||
Total non-performing assets as a
percentage of total assets
|
1.0 | % | 0.8 | % |
Three
Months Ended September 30,
|
||||||||||||||||||||
2008
|
2007
|
|||||||||||||||||||
Average
Balance
|
Yield
|
Average
Balance
|
Yield
|
Increase
(Decrease)
In
Interest And
Dividend
Income
From
2007
|
||||||||||||||||
Loans
Receivable, Net
|
$ | 556,454,581 | 6.43 | % | $ | 475,966,703 | 7.91 | % | $ | (475,075 | ) | |||||||||
Mortgage-Backed
Securities
|
215,390,697 | 4.87 | 133,221,287 | 4.68 | 1,063,402 | |||||||||||||||
Investments
|
68,201,340 | 4.56 | 130,132,175 | 5.11 | (886,148 | ) | ||||||||||||||
Overnight
Time
|
1,443,202 | 1.08 | 1,058,156 | 3.14 | (4,406 | ) | ||||||||||||||
Total
Interest-Earning Assets
|
$ | 841,489,820 | 5.87 | % | $ | 740,378,321 | 6.83 | % | $ | (302,227 | ) | |||||||||
Three
Months Ended September 30,
|
||||||||||||||||||||
2008
|
2007
|
|||||||||||||||||||
Average
Balance
|
Yield
|
Average
Balance
|
Yield
|
Increase
(Decrease)
In
Interest Expense
From
2007
|
||||||||||||||||
Now
And Money Market
Accounts
|
$ | 199,983,451 | 1.93 | % | $ | 205,810,833 | 3.25 | % | $ | (706,191 | ) | |||||||||
Passbook
Accounts
|
16,248,617 | 0.74 | 16,655,588 | 0.99 | (11,075 | ) | ||||||||||||||
Certificates
Accounts
|
336,056,478 | 4.25 | 284,506,447 | 5.10 | (57,530 | ) | ||||||||||||||
FHLB
Advances And Other
Borrowed
Money
|
242,974,148 | 3.69 | 181,321,298 | 4.53 | 187,029 | |||||||||||||||
Junior
Subordinated
Debentures
|
5,155,000 | 5.81 | 5,155,000 | 7.16 | (17,400 | ) | ||||||||||||||
Total
Interest-Bearing
Liabilities
|
$ | 800,417,694 | 3.44 | % | $ | 693,449,166 | 4.32 | % | $ | (605,167 | ) |
September
30, 2008
|
September
30, 2007
|
|||||||
Beginning
Balance
|
$ | 8,246,496 | $ | 7,430,692 | ||||
Provision
|
275,000 | 150,000 | ||||||
Charge-offs
|
(261,404 | ) | (39,290 | ) | ||||
Recoveries
|
3,243 | 22,809 | ||||||
Ending
Balance
|
$ | 8,263,335 | $ | 7,564,211 | ||||
Allowance
For Loan Losses As A Percentage Of Gross Loans Receivable
And
Loans Held For Sale At The End Of The Period
|
1.41 | % | 1.52 | % | ||||
Allowance
For Loan Losses As A Percentage Of Impaired Loans At The
End
Of The Period
|
84.41 | % | 780.91 | % | ||||
Impaired
Loans
|
9,790,084 | 968,641 | ||||||
Nonaccrual
Loans And 90 Days Or More Past Due Loans As A
Percentage
Of Loans Receivable And Loans Held For Sale At The
End
Of The Period
|
1.55 | % | 0.40 | % | ||||
Loans
Receivable, Net
|
$ | 579,132,177 | $ | 487,144,939 |
Three
Months Ended September 30,
|
Increase
(Decrease)
|
|||||||||||||||
2008
|
2007
|
Amounts
|
Percent
|
|||||||||||||
Gain
On Sale Of Investments
|
$ | 25,035 | $ | - | $ | 25,035 | 100.0 | % | ||||||||
Gain
On Sale Of Loans
|
109,035 | 105,450 | 3,585 | 3.4 | ||||||||||||
Service
Fees On Deposit Accounts
|
276,240 | 323,423 | (47,183 | ) | (14.6 | ) | ||||||||||
Income
From Cash Value Of
Life
Insurance
|
92,746 | 87,164 | 5,582 | 6.4 | ||||||||||||
Commissions
From Insurance Agency
|
164,138 | 173,488 | (9,350 | ) | (5.4 | ) | ||||||||||
Other
Agency Income
|
76,081 | 26,910 | 49,171 | 182.7 | ||||||||||||
Trust
Income
|
105,000 | 139,850 | (34,850 | ) | (24.9 | ) | ||||||||||
Other
|
212,328 | 193,085 | 19,243 | 10.0 | ||||||||||||
Total
Non-Interest Income
|
$ | 1,060,603 | $ | 1,049,370 | $ | 11,233 | 1.1 | % |
Three
Months Ended September 30,
|
Increase
|
|||||||||||||||
2008
|
2007
|
Amounts
|
Percent
|
|||||||||||||
Salaries
And Employee Benefits
|
$ | 2,831,272 | $ | 2,627,272 | $ | 204,000 | 7.8 | % | ||||||||
Occupancy
|
493,366 | 445,602 | 47,764 | 10.7 | ||||||||||||
Advertising
|
106,856 | 87,148 | 19,708 | 22.6 | ||||||||||||
Depreciation
And Maintenance
Of
Equipment
|
414,910 | 337,091 | 77,819 | 23.1 | ||||||||||||
FDIC
Insurance Premiums
|
191,535 | 14,870 | 176,665 | 1,188.1 | ||||||||||||
Amortization
of Intangibles
|
22,500 | 22,500 | - | - | ||||||||||||
Mandatorily
Redeemable Financial
Instrument
Valuation Expense
|
60,000 | - | 60,000 | 100.0 | ||||||||||||
Other
|
954,950 | 846,518 | 108,432 | 12.8 | ||||||||||||
Total
General And Administrative
Expenses
|
$ | 5,075,389 | $ | 4,381,001 | $ | 694,388 | 15.8 | % |
Six
Months Ended September 30,
|
||||||||||||||||||||
2008
|
2007
|
|||||||||||||||||||
Average
Balance
|
Yield
|
Average
Balance
|
Yield
|
Increase
(Decrease)
In
Interest And
Dividend
Income
From
2007
|
||||||||||||||||
Loans
Receivable, Net
|
$ | 541,857,885 | 6.45 | % | $ | 461,466,930 | 7.89 | % | $ | (724,919 | ) | |||||||||
Mortgage-Backed
Securities
|
207,702,241 | 4.83 | 133,869,199 | 4.63 | 1,917,075 | |||||||||||||||
Investments
|
68,879,433 | 4.84 | 128,795,008 | 5.00 | (1,550,767 | ) | ||||||||||||||
Overnight
Time
|
1,216,422 | 1.49 | 1,229,756 | 4.54 | (18,825 | ) | ||||||||||||||
Total
Interest-Earning Assets
|
$ | 819,655,981 | 5.90 | % | $ | 725,360,893 | 6.77 | % | $ | (377,436 | ) | |||||||||
Six
Months Ended September 30,
|
||||||||||||||||||||
2008
|
2007
|
|||||||||||||||||||
Average
Balance
|
Yield
|
Average
Balance
|
Yield
|
Increase
(Decrease)
In
Interest Expense From 2007
|
||||||||||||||||
Now
And Money Market
Accounts
|
$ | 203,195,729 | 1.86 | % | $ | 206,568,748 | 3.22 | % | $ | (1,436,939 | ) | |||||||||
Passbook
Accounts
|
16,331,323 | 0.78 | 16,885,120 | 0.98 | (19,387 | ) | ||||||||||||||
Certificates
Accounts
|
329,316,486 | 4.39 | 272,917,219 | 5.03 | 362,547 | |||||||||||||||
FHLB
Advances And Other
Borrowed
Money
|
223,931,674 | 3.80 | 176,912,171 | 4.47 | 300,460 | |||||||||||||||
Junior
Subordinated
Debentures
|
5,155,000 | 5.78 | 5,155,000 | 7.10 | (34,106 | ) | ||||||||||||||
Total
Interest-Bearing
Liabilities
|
$ | 777,930,212 | 3.49 | % | $ | 678,438,258 | 4.25 | % | $ | (827,425 | ) |
September
30, 2008
|
September
30, 2007
|
|||||||
Beginning
Balance
|
$ | 8,066,762 | $ | 7,296,791 | ||||
Provision
|
500,000 | 300,000 | ||||||
Charge-offs
|
(311,590 | ) | (68,411 | ) | ||||
Recoveries
|
8,163 | 35,831 | ||||||
Ending
Balance
|
$ | 8,263,335 | $ | 7,564,211 | ||||
Allowance
For Loan Losses As A Percentage Of Gross Loans Receivable
And
Loans Held For Sale At The End Of The Period
|
1.41 | % | 1.52 | % | ||||
Allowance
For Loan Losses As A Percentage Of Impaired Loans At The
End
Of The Period
|
84.41 | % | 780.91 | % | ||||
Impaired
Loans
|
9,790,084 | 968,641 | ||||||
Nonaccrual
Loans And 90 Days Or More Past Due Loans As A
Percentage
Of Loans Receivable And Loans Held For Sale At The
End
Of The Period
|
1.55 | % | 0.40 | % | ||||
Loans
Receivable, Net
|
$ | 579,132,177 | $ | 487,144,939 |
Six
Months Ended September 30,
|
Increase
(Decrease)
|
|||||||||||||||
2008
|
2007
|
Amounts
|
Percent
|
|||||||||||||
Gain
On Sale Of Investments
|
$ | 126,440 |
$
|
- | $ | 126,440 | 100.0 | % | ||||||||
Gain
On Sale Of Loans
|
227,718 | 281,571 | (53,853 | ) | (19.1 | ) | ||||||||||
Service
Fees On Deposit Accounts
|
557,393 | 650,745 | (93,352 | ) | (14.3 | ) | ||||||||||
Income
From Cash Value Of
Life
Insurance
|
178,492 | 149,201 | 29,291 | 19.6 | ||||||||||||
Commissions
From Insurance Agency
|
333,130 | 319,161 | 13,969 | 4.4 | ||||||||||||
Other
Agency Income
|
123,018 | 56,168 | 66,850 | 119.0 | ||||||||||||
Trust
Income
|
210,000 | 238,625 | (28,625 | ) | (12.0 | ) | ||||||||||
Other
|
425,619 | 414,497 | 11,122 | 2.7 | ||||||||||||
Total
Non-Interest Income
|
$ | 2,181,810 | $ | 2,109,968 | $ | 71,842 | 3.4 | % |
Six
Months Ended September 30,
|
Increase
|
|||||||||||||||
2008
|
2007
|
Amounts
|
Percent
|
|||||||||||||
Salaries
And Employee Benefits
|
$ | 5,615,507 | $ | 5,197,551 | $ | 417,956 | 8.0 | % | ||||||||
Occupancy
|
990,686 | 868,113 | 122,573 | 14.1 | ||||||||||||
Advertising
|
247,677 | 189,421 | 58,256 | 30.8 | ||||||||||||
Depreciation
And Maintenance
Of
Equipment
|
841,834 | 656,616 | 185,218 | 28.2 | ||||||||||||
FDIC
Insurance Premiums
|
347,345 | 30,197 | 317,148 | 1,050.3 | ||||||||||||
Amortization
of Intangibles
|
45,000 | 45,000 | - | - | ||||||||||||
Mandatorily
Redeemable Financial
Instrument
Valuation Expense
|
60,000 | - | 60,000 | 100.0 | ||||||||||||
Other
|
1,749,330 | 1,645,548 | 103,782 | 6.3 | ||||||||||||
Total
General And Administrative
Expenses
|
$ | 9,897,379 | $ | 8,632,446 | $ | 1,264,933 | 14.7 | % |
(Dollars
in thousands)
|
Within
One
Month
|
After
One
Through
Three
Months
|
After
Three
Through
Twelve
Months
|
Within
One
Year
|
Greater
Than
One
Year
|
Total
|
||||||||||||||||||
Unused
lines of credit
|
$ | 2,625 | $ | 2,531 | $ | 35,920 | $ | 41,076 | $ | 36,409 | $ | 77,485 | ||||||||||||
Standby
letters of credit
|
78 | 229 | 363 | 670 | 28 | 698 | ||||||||||||||||||
Total
|
$ | 2,703 | $ | 2,760 | $ | 36,283 | $ | 41,746 | $ | 36,437 | $ | 78,183 |
·
|
Changes
in economic conditions, particularly a further economic slowdown in Aiken, Richland, and Lexington Counties in South
Carolina and Columbia County in Georgia,
could hurt our business.
|
o
|
loan
delinquencies may increase;
|
o
|
problem
assets and foreclosures may
increase;
|
o
|
demand
for our products and services may decline;
and
|
o
|
collateral
for loans made by us, especially real estate, may decline in value, in
turn reducing a customer’s borrowing power and reducing the value of
assets and collateral securing our
loans.
|
·
|
Further
downturns in the real estate markets in our primary market area could hurt
our business.
|
·
|
We
may suffer losses in our loan portfolio despite our underwriting
practices.
|
·
|
We
may be required to make further increases in our provisions for loan
losses and to charge off additional loans in the future, which could
adversely affect our results of
operations.
|
|
For
the quarter ended September 30, 2008 we recorded a provision for loan
losses of $275,000 compared to $150,000 for the quarter ended September
30, 2007, an increase of $125,000. We are experiencing increasing loan
delinquencies and credit losses. Generally, our non-performing
loans and assets reflect operating difficulties of individual borrowers
resulting from weakness in the local economy. In addition,
slowing housing sales have been a contributing factor to the increase in
non-performing loans as well as the increase in
delinquencies. At September 30, 2008 our total non-performing
loans had increased to $9.8 million compared to $6.8 million at September
30, 2007. If current trends in the housing and real estate
markets continue, we expect that we will continue to experience increased
delinquencies and credit losses. Moreover, if a recession
occurs we expect that it would negatively impact economic conditions in
our market areas and that we could experience significantly higher
delinquencies and credit losses. An increase in our credit
losses or our provision for loan losses would adversely affect our
financial condition and results of
operations.
|
·
|
If
external funds were not available, this could adversely impact our growth
and prospects.
|
·
|
We
may elect or be compelled to seek additional capital in the future, but
that capital may not be available when it is
needed.
|
·
|
We
potentially face increased regulation of our industry. Compliance with
such regulation may increase our costs and limit our ability to pursue
business opportunities.
|
·
|
The
process we use to estimate losses inherent in our credit exposure requires
difficult, subjective and complex judgments, including forecasts of
economic conditions and how these economic conditions might impair the
ability of our borrowers to repay their loans. The level of
uncertainty concerning economic conditions may adversely affect the
accuracy of our estimates which may, in turn, impact the reliability of
the process.
|
·
|
Competition
in our industry could intensify as a result of the increasing
consolidation of financial services companies in connection with current
market conditions.
|
·
|
We
may be required to pay significantly higher FDIC premiums because market
developments have significantly depleted the insurance fund of the FDIC
and reduced the ratio of reserves to insured
deposits.
|
· | Authority for the Federal Reserve to pay interest on depository institution balances; |
· | Mortgage loss mitigation and homeowner protection; |
·
|
Temporary
increase in Federal Deposit Insurance Corporation (“FDIC”) insurance
coverage from $100,000 to $250,000 through December 31, 2009;
and
|
·
|
Authority
to the Securities and Exchange Commission (the “SEC”) to suspend
mark-to-market accounting requirements for any issuer or class of category
of transactions.
|
Period
|
(a)
Total
Number
of
Shares
Purchased
|
(b)
Average
Price
Paid
per
Share
|
(c)
Total Number of
Shares
Purchased as
Part
of Publicly
Announced
Program
|
(d)
Maximum Number
of
Shares that May
Yet
Be Purchased
Under
the Program
|
||||||||||||
July
1 – July 31, 2008
|
5,300 | $ | 20.60 | 5,300 | 124,965 | |||||||||||
August
1 – August 31, 2008
|
2,575 | $ | 20.35 | 2,575 | 122,390 | |||||||||||
September
1 – September 30, 2008
|
1,275 | $ | 20.29 | 1,275 | 121,115 | |||||||||||
Total
|
9,150 | $ | 20.49 | 9,150 | 121,115 |
3.1 | Articles Of Incorporation, as amended (1) | |
3.2 | Bylaws (2) | |
4 | Instruments defining the rights of security holders, including indentures (3) | |
10.1 | 1993 Salary Continuation Agreements (4) | |
10.2 | Amendment One to 1993 Salary Continuation Agreement (5) | |
10.3 | Form of 2006 Salary Continuation Agreement(6) | |
10.4
|
1999
Stock Option Plan (2)
|
|
|
10.5
|
1987
Stock Option Plan (4)
|
|
10.6
|
2002
Stock Option Plan (7)
|
|
10.7
|
2004
Employee Stock Purchase Plan (8)
|
10.8 | Incentive Compensation Plan (4) | |
10.9 | Form of Security Federal Bank Salary Continuation Agreement (9) | |
10.10 | Form of Security Federal Split Dollar Agreement (9) | |
14
|
Code
of Ethics (10)
|
|
31.1 | Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act. | |
31.2 | Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act. | |
32 | Certifications Pursuant to Section 906 of the Sarbanes-Oxley Act. |
(1)
|
Filed
on June 26, 1998, as an exhibit to the Company’s Proxy Statement and
incorporated herein by reference.
|
(2)
|
Filed
on March 2, 2000, as an exhibit to the Company’s Registration Statement on
Form S-8 and incorporated herein by
reference.
|
(3)
|
Filed
on August 12, 1987, as an exhibit to the Company’s Registration Statement
on Form 8-A and incorporated herein by
reference.
|
(4)
|
Filed
on June 28, 1993, as an exhibit to the Company’s Annual Report on Form
10-KSB and incorporated herein by
reference.
|
(5)
|
Filed
as an exhibit to the Company’s Quarterly Report on Form 10-QSB for the
quarter ended September 30, 1993 and incorporated herein by
reference.
|
(6)
|
Filed
on May 24, 2006 as an exhibit to the Company’s Current Report on Form 8-K
dated May 18, 2006 and incorporated herein by
reference.
|
(7)
|
Filed
on June 19, 2002, as an exhibit to the Company’s Proxy Statement and
incorporated herein by reference.
|
(8)
|
Filed
on June 18, 2004, as an exhibit to the Company’s Proxy Statement and
incorporated herein by reference.
|
(9)
|
Filed
on May 24, 2006 as an exhibit to the Current Report on Form 8-K and
incorporated herein by reference.
|
(10)
|
Filed
on June 27, 2007 as an exhibit to the Company’s Annual Report on Form 10-K
and incorporated herein by
reference.
|
SECURITY
FEDERAL CORPORATION
|
|||||
Date:
|
November 14,
2008
|
By:
|
/s/ Timothy W. Simmons | ||
Timothy
W. Simmons
|
|||||
President
|
|||||
Date:
|
November 14,
2008
|
By:
|
/s/Roy G. Lindburg | ||
Roy
G. Lindburg
|
|||||
CFO
|
|||||
|
Certification
of the Chief Executive Officer Pursuant to Section 302 of the
Sarbanes-Oxley Act
|
1.
|
I
have reviewed this Quarterly Report on Form 10-Q of Security Federal
Corporation;
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
registrant as of, and for, the period presented in this
report;
|
4.
|
The
registrant’s other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant
and have:
|
a)
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
|
b)
|
Evaluated
the effectiveness of the registrant’s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures as of the end of the period covered
by this report based on such evaluation;
and
|
c)
|
Disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant’s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over financial
reporting; and
|
5.
|
The
registrant’s other certifying officer(s) and I have disclosed, based on
our most recent evaluation of internal control over financial reporting,
to the registrant’s auditors and the audit committee of the registrant’s
board of directors (or persons performing the equivalent
functions):
|
a)
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information;
and
|
b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant’s internal control
over financial reporting.
|
Date: November 14, 2008 | |
/s/Timothy W. Simmons | |
Timothy
W. Simmons
|
|
President
and Chief Executive Officer
|
|
1.
|
I
have reviewed this Quarterly Report on Form 10-Q of Security Federal
Corporation;
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
registrant as of, and for, the period presented in this
report;
|
4.
|
The
registrant’s other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant
and have:
|
a)
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
|
b)
|
Evaluated
the effectiveness of the registrant’s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures as of the end of the period covered
by this report based on such evaluation
and
|
c)
|
Disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant’s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over financial
reporting; and
|
5.
|
The
registrant’s other certifying officer(s) and I have disclosed, based on
our most recent evaluation of internal control over financial reporting,
to the registrant’s auditors and the audit committee of the registrant’s
board of directors (or persons performing the equivalent
functions):
|
a)
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information;
and
|
b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant’s internal control
over financial reporting.
|
Date:
November 14, 2008
|
|
/s/Roy
G.
Lindburg
|
|
Roy
G. Lindburg
Chief Financial Officer |
1.
|
the
Report fully complies with the requirements of Section 13(a) and 15(d) of
the Securities Exchange Act of 1934, as amended,
and
|
2.
|
the
information contained in the Report fairly presents, in all material
respects, the Company’s financial condition and results of operations as
of the dates and for the periods presented in the financial statements
included in the Report.
|
/s/Timothy W. Simmons | /s/Roy G. Lindburg | |
Timothy
W. Simmons
|
Roy
G. Lindburg
|
|
Chief
Executive Officer
|
Chief
Financial Officer
|