South
Carolina
|
57-0858504
|
(State
or other jurisdiction of incorporation or organization)
|
(IRS
Employer Identification No.)
|
Large accelerated filed [ ] | Accelerated filer [ ] | |||
Non-accelerated filer [ ] | Smaller reporting company [ X ] | |||
CLASS:
|
OUTSTANDING
SHARES AT:
|
SHARES:
|
||
Common
Stock, par value $0.01 per share
|
January
31, 2009
|
2,458,146
|
PART
I.
|
FINANCIAL
INFORMATION (UNAUDITED)
|
PAGE
NO.
|
|
Item
1.
|
Financial
Statements (Unaudited):
|
||
Consolidated
Balance Sheets at December 31, 2008 and March 31, 2008
|
1
|
||
Consolidated
Statements of Income for the Three and Nine Months Ended December 31, 2008
and 2007
|
2
|
||
Consolidated
Statements of Shareholders’ Equity and Comprehensive Income at December
31, 2008 and 2007
|
5
|
||
Consolidated
Statements of Cash Flows for the Nine Months Ended December 31, 2008 and
2007
|
6
|
||
Notes
to Consolidated Financial Statements
|
8
|
||
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
17
|
|
Item
3.
|
Quantitative
and Qualitative Disclosures about Market Risk
|
33
|
|
Item
4.
|
Controls
and Procedures
|
33
|
|
PART
II.
|
OTHER
INFORMATION
|
||
Item
1.
|
Legal
Proceedings
|
35
|
|
Item
1A.
|
Risk
Factors
|
35
|
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
44
|
|
Item
3.
|
Defaults
Upon Senior Securities
|
45
|
|
Item
4.
|
Submission
of Matters to a Vote of Security Holders
|
45
|
|
Item
5
|
Other
Information
|
45
|
|
Item
6.
|
Exhibits
|
45
|
|
Signatures
|
47
|
||
December
31, 2008
|
March
31, 2008
|
|||
Assets:
|
(Unaudited)
|
(Audited)
|
||
Cash
And Cash Equivalents
|
$
|
9,706,023
|
$
|
10,539,054
|
Investment
And Mortgage-Backed Securities:
|
||||
Available
For Sale:(Amortized
cost of $237,491,676
at December 31, 2008 and $240,295,683 at March 31, 2008)
|
240,773,404
|
244,157,872
|
||
Held
To Maturity:(Fair value of
$36,467,089 at December 31, 2008 and $20,506,250 at
March 31,
2008)
|
35,662,305
|
20,154,618
|
||
Total
Investment And Mortgage-Backed Securities
|
276,435,709
|
264,312,490
|
||
Loans
Receivable, Net:
|
||||
Held
For Sale
|
2,910,051
|
2,295,721
|
||
Held
For Investment:(Net of
allowance
of $8,673,527
at December 31, 2008 and $8,066,762 at March 31, 2008)
|
594,411,779
|
515,635,984
|
||
Total
Loans Receivable, Net
|
597,321,830
|
517,931,705
|
||
Accrued
Interest Receivable:
|
||||
Loans
|
1,903,092
|
1,952,866
|
||
Mortgage-Backed
Securities
|
942,201
|
822,379
|
||
Investments
|
585,284
|
764,746
|
||
Premises
And Equipment, Net
|
21,887,402
|
21,544,380
|
||
Federal
Home Loan Bank Stock, At Cost
|
11,544,100
|
9,497,100
|
||
Bank
Owned Life Insurance
|
9,551,305
|
8,310,813
|
||
Repossessed
Assets Acquired In Settlement Of Loans
|
661,640
|
767,096
|
||
Intangible
Assets, Net
|
375,000
|
442,500
|
||
Goodwill
|
1,197,954
|
1,197,954
|
||
Other
Assets
|
2,842,096
|
1,947,403
|
||
Total
Assets
|
$
|
934,953,636
|
$
|
840,030,486
|
Liabilities
And Shareholders’ Equity
|
||||
Liabilities:
|
||||
Deposit
Accounts
|
$
|
620,642,981
|
$
|
590,850,208
|
Advances
From Federal Home Loan Bank
|
223,722,356
|
178,234,007
|
||
Other
Borrowed Money
|
14,416,481
|
12,784,094
|
||
Advance
Payments By Borrowers For Taxes And Insurance
|
317,524
|
620,467
|
||
Mandatorily
Redeemable Financial Instrument
|
1,522,312
|
1,417,312
|
||
Junior
Subordinated Debentures
|
5,155,000
|
5,155,000
|
||
Other
Liabilities
|
3,928,552
|
3,472,985
|
||
Total
Liabilities
|
$
|
869,705,206
|
$
|
792,534,073
|
Shareholders'
Equity:
|
||||
Serial
Preferred Stock, $.01 Par Value; Authorized Shares – 200,000; Issued And
Outstanding Shares – 18,000
|
$
|
17,600,000
|
$
|
-
|
Warrants
Issued In Conjunction With Serial Preferred Stock
|
400,000
|
-
|
||
Common
Stock, $.01 Par Value; Authorized Shares – 5,000,000; Issued - 2,659,079 And
Outstanding Shares – 2,458,146 At December 31, 2008 And 2,649,027 And
2,532,192 At March 31, 2008
|
26,025
|
25,925
|
||
Additional
Paid-In Capital
|
5,271,566
|
5,072,086
|
||
Treasury
Stock, (At Cost, 200,933 and 116,835 Shares, At December 31, 2008 and
March 31, 2008 Respectively)
|
(4,330,712)
|
(2,769,446)
|
||
Accumulated
Other Comprehensive Income
|
2,033,988
|
2,395,537
|
||
Retained
Earnings, Substantially Restricted
|
44,247,563
|
42,772,311
|
||
Total
Shareholders' Equity
|
$
|
65,248,430
|
$
|
47,496,413
|
Total
Liabilities And Shareholders' Equity
|
$
|
934,953,636
|
$
|
840,030,486
|
Three
Months Ended December 31,
|
||||
2008
|
2007
|
|||
Interest
Income:
|
||||
Loans
|
$
|
8,999,835
|
$
|
9,416,982
|
Mortgage-Backed
Securities
|
2,558,840
|
1,937,244
|
||
Investment
Securities
|
694,633
|
1,365,705
|
||
Other
|
729
|
17,277
|
||
Total
Interest Income
|
12,254,037
|
12,737,208
|
||
Interest
Expense:
|
||||
NOW
And Money Market Accounts
|
1,115,271
|
1,603,372
|
||
Passbook
Accounts
|
27,033
|
38,586
|
||
Certificate
Accounts
|
3,520,046
|
3,927,298
|
||
Federal
Home Loan Bank Advances And Other Borrowed Money
|
2,025,915
|
2,096,187
|
||
Junior
Subordinated Debentures
|
74,140
|
93,267
|
||
Total
Interest Expense
|
6,762,405
|
7,758,710
|
||
Net
Interest Income
|
5,491,632
|
4,978,498
|
||
Provision
For Loan Losses
|
525,000
|
150,000
|
||
Net
Interest Income After Provision For Loan Losses
|
4,966,632
|
4,828,498
|
||
Non-Interest
Income:
|
||||
Gain
On Sale Of Loans
|
107,726
|
134,732
|
||
Service
Fees On Deposit Accounts
|
293,327
|
307,045
|
||
Income
From Cash Value Of Life Insurance
|
90,000
|
92,246
|
||
Commissions
From Insurance Agency
|
141,771
|
145,148
|
||
Other
Agency Income
|
85,633
|
19,670
|
||
Trust
Income
|
105,000
|
102,000
|
||
Other
|
196,893
|
227,250
|
||
Total
Non- Interest Income
|
1,020,350
|
1,028,091
|
||
General
And Administrative Expenses:
|
||||
Salaries
And Employee Benefits
|
2,949,973
|
2,660,655
|
||
Occupancy
|
500,193
|
425,489
|
||
Advertising
|
155,088
|
80,857
|
||
Depreciation
And Maintenance Of Equipment
|
380,470
|
333,985
|
||
FDIC
Insurance Premiums
|
201,882
|
15,402
|
||
Amortization
of Intangibles
|
22,500
|
22,500
|
||
Mandatorily
Redeemable Financial Instrument Valuation Expense
|
45,000
|
-
|
||
Other
|
989,397
|
789,044
|
||
Total
General And Administrative Expenses
|
5,244,503
|
4,327,932
|
||
Income
Before Income Taxes
|
742,479
|
1,528,657
|
||
Provision
For Income Taxes
|
252,855
|
488,046
|
||
Net
Income
|
489,624
|
1,040,611
|
||
Preferred
Stock Dividends
|
27,500
|
-
|
||
Net
Income Available to Common Shareholders
|
$ |
462,124
|
$ |
1,040,611
|
Basic
Net Income Per Common Share
|
$
|
0.19
|
$
|
0.40
|
Diluted
Net Income Per Common Share
|
$
|
0.18
|
$
|
0.40
|
Cash
Dividend Per Share On Common Stock
|
$
|
0.08
|
$
|
0.07
|
Basic
Weighted Average Common Shares Outstanding
|
2,490,630
|
2,585,234
|
||
Diluted
Weighted Average Common Shares Outstanding
|
2,511,910
|
2,588,318
|
Nine
Months Ended December 31,
|
||||
2008
|
2007
|
|||
Interest
Income:
|
||||
Loans
|
$
|
26,483,081
|
$
|
27,625,147
|
Mortgage-Backed
Securities
|
7,575,321
|
5,036,650
|
||
Investment
Securities
|
2,361,362
|
4,583,201
|
||
Other
|
9,806
|
45,179
|
||
Total
Interest Income
|
36,429,570
|
37,290,177
|
||
Interest
Expense:
|
||||
NOW
And Money Market Accounts
|
3,006,058
|
4,931,098
|
||
Passbook
Accounts
|
90,595
|
121,535
|
||
Certificate
Accounts
|
10,752,681
|
10,797,386
|
||
Federal
Home Loan Bank Advances And Other Borrowed Money
|
6,278,073
|
6,047,885
|
||
Junior
Subordinated Debentures
|
223,112
|
276,345
|
||
Total
Interest Expense
|
20,350,519
|
22,174,249
|
||
Net
Interest Income
|
16,079,051
|
15,115,928
|
||
Provision
For Loan Losses
|
1,025,000
|
450,000
|
||
Net
Interest Income After Provision For Loan Losses
|
15,054,051
|
14,665,928
|
||
Non-Interest
Income:
|
||||
Gain
On Sale Of Investments
|
126,440
|
-
|
||
Gain
On Sale Of Loans
|
335,444
|
416,303
|
||
Service
Fees On Deposit Accounts
|
850,720
|
957,790
|
||
Income
From Cash Value Of Life Insurance
|
268,492
|
241,447
|
||
Commissions
From Insurance Agency
|
474,901
|
464,309
|
||
Other
Agency Income
|
208,651
|
75,838
|
||
Trust
Income
|
315,000
|
340,625
|
||
Other
|
622,512
|
641,747
|
||
Total
Non-Interest Income
|
3,202,160
|
3,138,059
|
||
General
And Administrative Expenses:
|
||||
Salaries
And Employee Benefits
|
8,565,480
|
7,858,206
|
||
Occupancy
|
1,490,879
|
1,293,602
|
||
Advertising
|
402,765
|
270,278
|
||
Depreciation
And Maintenance Of Equipment
|
1,222,304
|
990,601
|
||
FDIC
Insurance Premiums
|
549,227
|
45,599
|
||
Amortization
of Intangibles
|
67,500
|
67,500
|
||
Mandatorily
Redeemable Financial Instrument Valuation Expense
|
105,000
|
-
|
||
Other
|
2,738,726
|
2,434,592
|
||
Total
General And Administrative Expenses
|
15,141,881
|
12,960,378
|
||
Income
Before Income Taxes
|
3,114,330
|
4,843,609
|
||
Provision
For Income Taxes
|
1,037,963
|
1,579,392
|
||
Net
Income
|
2,076,367
|
3,264,217
|
||
Preferred
Stock Dividends
|
27,500
|
-
|
||
Net
Income Available to Common Shareholders
|
$ |
2,048,867
|
$ |
3,264,217
|
Nine
Months Ended December 31,
|
||||
2008
|
2007
|
|||
Basic
Net Income Per Common Share
|
$
|
0.81
|
$
|
1.26
|
Diluted
Net Income Per Common Share
|
$
|
0.81
|
$
|
1.25
|
Cash
Dividend Per Share On Common Stock
|
$
|
0.24
|
$
|
0.21
|
Basic
Weighted Average Common Shares Outstanding
|
2,515,579
|
2,599,352
|
||
Diluted
Weighted Average Common Shares Outstanding
|
2,529,702
|
2,605,686
|
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
|
- | - | - | - | 3,264,217 | 3,264,217 | ||||||||||||||||||
Other
Comprehensive Income,
Net
Of Tax:
|
||||||||||||||||||||||||
Unrealized
Holding Gains
On
Securities Available
For
Sale
|
- | - | - | 1,585,599 | - | 1,585,599 | ||||||||||||||||||
Comprehensive
Income
|
- | - | - | - | - | 4,849,816 | ||||||||||||||||||
Purchase
Of Treasury Stock
At
Cost, 82,313 shares
|
- | - | (1,986,691 | ) | - | - | (1,986,691 | ) | ||||||||||||||||
Employee
Stock Purchase Plan Purchases
|
36 | 74,145 | - | - | - | 74,181 | ||||||||||||||||||
Exercise
Of Stock Options
|
63 | 104,958 | - | - | - | 105,021 | ||||||||||||||||||
Stock
Compensation Expense
|
- | 10,007 | - | - | - | 10,007 | ||||||||||||||||||
Cash
Dividends
|
- | - | - | - | (545,635 | ) | (545,635 | ) | ||||||||||||||||
Balance
At December 31, 2007
|
$ | 25,913 | $ | 5,039,139 | $ | (2,637,911 | ) | $ | 838,283 | $ | 41,934,483 | $ | 45,199,907 |
Preferred
Stock
|
Warrants
|
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
|
- | - | - | - | - | - | 2,076,367 | 2,076,367 | ||||||||||||||||||||||||
Other
Comprehensive Income,
Net
Of Tax:
|
||||||||||||||||||||||||||||||||
Unrealized
Holding Losses
On
Securities Available
For
Sale, Net Of Taxes
|
- | - | - | - | - | (283,156 | ) | - | (283,156 | ) | ||||||||||||||||||||||
Reclassification
Adjustment
For
Gains Included In Net
Income,
Net Of Taxes
|
- | - | - | - | - | (78,393 | ) | - | (78,393 | ) | ||||||||||||||||||||||
Comprehensive
Income
|
- | - | - | - | - | - | - | 1,714,818 | ||||||||||||||||||||||||
Purchase
Of Treasury Stock
At
Cost, 84,098 shares
|
- | - | - | - | (1,561,266 | ) | - | - | (1,561,266 | ) | ||||||||||||||||||||||
Issuance
Of Preferred Stock
And
Related Warrants
|
17,600,000 | 400,000 | - | - | - | - | - | 18,000,000 | ||||||||||||||||||||||||
Employee
Stock Purchase Plan
Purchases
|
- | - | 40 | 75,110 | - | - | - | 75,150 | ||||||||||||||||||||||||
Exercise
Of Stock Options
|
- | - | 60 | 99,960 | - | - | - | 100,020 | ||||||||||||||||||||||||
Stock
Compensation Expense
|
- | - | - | 24,410 | - | - | - | 24,410 | ||||||||||||||||||||||||
Cash
Dividends- Common
|
- | - | - | - | - | - | (601,115 | ) | (601,115 | ) | ||||||||||||||||||||||
Balance
At December 31, 2008
|
$ | 17,600,000 | $ | 400,000 | $ | 26,025 | $ | 5,271,566 | $ | (4,330,712 | ) | $ | 2,033,988 | $ | 44,247,563 | $ | 65,248,430 |
|
|||||||||
Nine
Months Ended December 31,
|
|||||||||
2008
|
2007
|
||||||||
Cash
Flows From Operating Activities:
|
|||||||||
Net
Income
|
$ | 2,076,367 | $ | 3,264,217 | |||||
Adjustments
To Reconcile Net Income To Net Cash Provided By Operating
Activities:
|
|||||||||
Depreciation
Expense
|
1,116,801 | 789,116 | |||||||
Amortization
Of Intangible Assets
|
67,500 | 67,500 | |||||||
Stock
Option Compensation Expense
|
24,410 | 10,007 | |||||||
Discount
Accretion And Premium Amortization
|
273,331 | 161,021 | |||||||
Mandatorily
Redeemable Financial Instrument Valuation Expense
|
105,000 | - | |||||||
Provisions
For Losses On Loans And Real Estate
|
1,025,000 | 450,000 | |||||||
Gain
On Sale Of Loans
|
(335,444 | ) | (416,303 | ) | |||||
Gain
On Sale Of Investments
|
(126,440 | ) | - | ||||||
Loss
(Gain) On Sale Of Real Estate
|
5,906 | (27,293 | ) | ||||||
Amortization
Of Deferred Fees On Loans
|
(81,819 | ) | (87,601 | ) | |||||
Loss
on Disposition of Premises and Equipment
|
61 | 356 | |||||||
Proceeds
From Sale Of Loans Held For Sale
|
26,912,369 | 25,998,343 | |||||||
Origination
Of Loans For Sale
|
(27,191,255 | ) | (26,822,970 | ) | |||||
(Increase)
Decrease In Accrued Interest Receivable:
|
|||||||||
Loans
|
49,774 | (387,120 | ) | ||||||
Mortgage-Backed
Securities
|
(119,822 | ) | (121,500 | ) | |||||
Investments
|
179,462 | 27,718 | |||||||
Decrease
In Advance Payments By Borrowers
|
(302,943 | ) | (22,151 | ) | |||||
Other,
Net
|
(240,214 | ) | 99,559 | ||||||
Net
Cash Provided By Operating Activities
|
3,438,044 | 2,982,899 | |||||||
Cash
Flows From Investing Activities:
|
|||||||||
Principal
Repayments On Mortgage-Backed Securities Available For
Sale
|
32,064,937 | 27,258,442 | |||||||
Principal
Repayments On Mortgage-Backed Securities Held To Maturity
|
126,754 | - | |||||||
Purchase
Of Investment Securities Available For Sale
|
(8,184,620 | ) | (29,542,601 | ) | |||||
Purchase
Of Mortgage-Backed Securities Available For Sale
|
(48,075,466 | ) | (47,317,221 | ) | |||||
Purchase
Of Mortgage-Backed Securities Held To Maturity
|
(26,588,294 | ) | - | ||||||
Purchase
Of Investment Securities Held To Maturity
|
(1,000,000 | ) | - | ||||||
Maturities
Of Investment Securities Available For Sale
|
16,677,263 | 22,371,400 | |||||||
Maturities
of Investment Securities Held To Maturity
|
12,000,000 | 19,000,000 | |||||||
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 Federal Home Loan Bank Stock
|
(8,284,200 | ) | (8,272,900 | ) | |||||
Redemption
Of Federal Home Loan Bank Stock
|
6,237,200 | 7,197,900 | |||||||
Increase
In Loans To Customers
|
(79,966,426 | ) | (63,895,411 | ) | |||||
Proceeds
From Sale Of Repossessed Assets
|
367,000 | 295,279 | |||||||
Purchase
And Improvement Of Premises And Equipment
|
(1,461,534 | ) | (5,395,783 | ) | |||||
Proceeds
From Sale of Premises And Equipment
|
1,650 | 500 | |||||||
Purchase
Of Bank Owned Life Insurance
|
(1,240,492 | ) | (2,441,447 | ) | |||||
Net
Cash Used By Investing Activities
|
(97,197,373 | ) | (80,741,842 | ) | |||||
Nine
Months Ended December 31,
|
||||||||
2008
|
2007
|
|||||||
Cash
Flows From Financing Activities:
|
||||||||
Increase
In Deposit Accounts
|
29,792,773 | 50,177,687 | ||||||
Proceeds
From Federal Home Loan Bank Advances
|
247,900,000 | 296,700,000 | ||||||
Repayment
Of Federal Home Loan Bank Advances
|
(202,411,651 | ) | (272,011,420 | ) | ||||
Net
Proceeds Of Other Borrowings
|
1,632,387 | 4,607,358 | ||||||
Proceeds
From Issuance Of Preferred Stock
|
18,000,000 | - | ||||||
Dividends
Paid To Shareholders- Common Stock
|
(601,115 | ) | (545,635 | ) | ||||
Purchase
Of Treasury Stock
|
(1,561,266 | ) | (1,986,691 | ) | ||||
Proceeds
From Employee Stock Purchases
|
75,150 | 74,181 | ||||||
Proceeds
From Exercise of Stock Options
|
100,020 | 105,021 | ||||||
Net
Cash Provided By Financing Activities
|
92,926,298 | 77,120,501 |
Net
Decrease In Cash And Cash Equivalents
|
(833,031 | ) | (638,442 | ) | ||||
Cash
And Cash Equivalents At Beginning Of Period
|
10,539,054 | 13,438,129 | ||||||
Cash
And Cash Equivalents At End Of Period
|
$ | 9,706,023 | $ | 12,799,687 | ||||
Supplemental
Disclosure Of Cash Flows Information:
|
||||||||
Cash
Paid During The Period For Interest
|
$ | 20,635,914 | $ | 22,011,826 | ||||
Cash
Paid During The Period For Income Taxes
|
$ | 1,549,900 | $ | 1,304,290 | ||||
Additions
To Repossessed Acquired Through Foreclosure
|
$ | 247,450 | $ | 720,873 | ||||
Decrease (Increase) In Unrealized Net Loss On Securities Available For
Sale, Net Of Taxes
|
$ | (283,156 | ) | $ | 1,585,599 |
1.
|
Basis
of Presentation
|
2.
|
Principles
of Consolidation
|
3.
|
Critical
Accounting Policies, Continued
|
4.
|
Earnings
Per Common Share
|
For
the Quarter Ended
|
||||||||||||
December
31, 2008
|
||||||||||||
Income
(Numerator) Amount
|
Shares
(Denominator)
|
Per
Share
|
||||||||||
Basic
EPS
|
$ | 462,124 | 2,490,630 | $ | 0.19 | |||||||
Effect
of Diluted Securities:
|
||||||||||||
Mandatorily
Redeemable
Shares
|
- | 21,280 | (0.01 | ) | ||||||||
Stock Options
|
- | - | - | |||||||||
Diluted
EPS
|
$ | 462,124 | 2,511,910 | $ | 0.18 |
For
the Quarter Ended
|
||||||||||||
December
31, 2007
|
||||||||||||
Income
(Numerator) Amount
|
Shares
(Denominator)
|
Per
Share
|
||||||||||
Basic
EPS
|
$ | 1,040,611 | 2,585,234 | $ | 0.40 | |||||||
Effect
of Diluted Securities:
|
||||||||||||
Stock Options
|
- | 3,084 | - | |||||||||
Diluted
EPS
|
$ | 1,040,611 | 2,588,318 | $ | 0.40 |
For
the Nine Months Ended
|
||||||||||||
December
31, 2008
|
||||||||||||
Income
(Numerator) Amount
|
Shares
(Denominator)
|
Per
Share
|
||||||||||
Basic
EPS
|
2,048,867 | 2,515,579 | $ | 0.81 | ||||||||
Effect
of Diluted Securities:
|
||||||||||||
Mandatorily
Redeemable
Shares
|
- | 14,123 | - | |||||||||
Stock Options
|
- | - | - | |||||||||
Diluted
EPS
|
2,048,867 | 2,529,702 | $ | 0.81 |
For
the Nine Months Ended
|
||||||||||||
December
31, 2007
|
||||||||||||
Income
(Numerator) Amount
|
Shares
(Denominator)
|
Per
Share
|
||||||||||
Basic
EPS
|
$ | 3,264,217 | 2,599,352 | $ | 1.26 | |||||||
Effect
of Diluted Securities:
|
||||||||||||
Stock Options
|
- | 6,334 | (0.01 | ) | ||||||||
Diluted
EPS
|
$ | 3,264,217 | 2,605,686 | $ | 1.25 |
Three
Months Ended
December
31, 2008
|
Nine
Months Ended
December
31, 2008
|
||||
Shares
|
Weighted
Average
Exercise
Price
|
Shares
|
Weighted
Average
Exercise
Price
|
||
Balance,
Beginning of Period/Year
|
100,500
|
$22.01
|
111,100
|
$21.55
|
|
Options
granted
|
-
|
-
|
4,500
|
22.91
|
|
Options
exercised
|
-
|
-
|
6,000
|
16.67
|
|
Options
forfeited
|
-
|
-
|
9,100
|
20.32
|
|
Balance,
December 31, 2008
|
100,500
|
$22.01
|
100,500
|
$22.01
|
|
Options
Exercisable
|
60,000
|
$21.09
|
|||
Range
of Exercise Prices For
Exercisable
Options
|
$16.67-$24.22
|
||||
Options
Available For Grant
|
50,000
|
5.
|
Stock-Based
Compensation, Continued
|
For
Awards Granted During The Three Month Period Ended December
31,
|
For
Awards Granted During The Nine Month Period Ended December
31,
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
Awards
granted
|
- | 2,000 | 4,500 | 5,000 | ||||||||||||
Dividend
Yield
|
- | 1.60 | % | 1.76-1.79 | % | 1.52-1.60 | % | |||||||||
Weighted
Average Expected
Volatility
|
- | 20.92 | % | 17.62-18.10 | % | 22.71 | % | |||||||||
Risk-free
interest rate
|
- | 4.50 | % | 3.69-3.88 | % | 4.76 | % | |||||||||
Expected
life
|
- | 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
|
|||
03/8/04
|
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
|
|||
100/1/07
|
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
|
6.
|
Fair
Value Measurements
|
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
|
$ -
|
$ 240,773,404
|
$ -
|
Mortgage
Loans Held For
Sale
|
-
|
2,910,051
|
-
|
Total
|
$ -
|
$ 243,683,455
|
$ -
|
Liabilities:
|
|||
Mandatorily Redeemable
Financial
Instrument
|
$ -
|
$ 1,522,312
|
$ -
|
Total
|
$ -
|
$ 1,522,312
|
$ -
|
December 31, 2008
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
||||||||||||
FHLB
Securities
|
$ | 20,787,450 | $ | 350,230 | $ | 12,521 | $ | 21,125,159 | ||||||||
Federal
Farm Credit Securities
|
11,485,414 | 179,178 | - | 11,664,592 | ||||||||||||
Federal
National Mortgage
Association
(“FNMA”) Bonds
|
2,000,000 | 9,070 | - | 2,009,070 | ||||||||||||
Mortgage-Backed
Securities
|
203,115,874 | 3,699,645 | 894,036 | 205,921,483 | ||||||||||||
Equity
Securities
|
102,938 | - | 49,838 | 53,100 | ||||||||||||
Total
|
$ | 237,491,676 | $ | 4,238,123 | $ | 956,395 | $ | 240,773,404 | ||||||||
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 |
December 31, 2008
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
||||||||||||
FHLB
Securities
|
$ | 9,995,612 | $ | 409,088 | $ | 14,690 | $ | 10,390,010 | ||||||||
Federal
Farm Credit Securities
|
1,000,000 | 28,750 | - | 1,028,750 | ||||||||||||
Mortgage-Backed
Securities
|
24,511,693 | 381,636 | - | 24,893,329 | ||||||||||||
Equity
Securities
|
155,000 | - | - | 155,000 | ||||||||||||
Total
|
$ | 35,662,305 | $ | 819,474 | $ | 14,690 | $ | 36,467,089 | ||||||||
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 |
December
31, 2008
|
March
31,
2008
|
|||||||
Residential
Real Estate
|
$ | 133,544,316 | $ | 131,863,466 | ||||
Consumer
|
69,343,229 | 66,832,377 | ||||||
Commercial
Business And Real Estate
|
408,475,146 | 333,386,661 | ||||||
Loans
Held For Sale
|
2,910,051 | 2,295,721 | ||||||
614,272,742 | 534,378,225 | |||||||
Less:
|
||||||||
Allowance
For Possible Loan Loss
|
8,673,527 | 8,066,762 | ||||||
Loans
In Process
|
7,976,767 | 8,064,728 | ||||||
Deferred
Loan Fees
|
300,618 | 315,030 | ||||||
16,950,912 | 16,446,520 | |||||||
$ | 597,321,830 | $ | 517,931,705 |
Increase
(Decrease)
|
||||||||||||||||
December
31,
2008
|
March
31,
2008
|
Amount
|
Percent
|
|||||||||||||
Cash
And Cash Equivalents
|
$ | 9,706,023 | $ | 10,539,054 | $ | (833,031 | ) | (7.90 | )% | |||||||
Investment
And Mortgage-
Backed
Securities –
Available
For Sale
|
240,773,404 | 244,157,872 | (3,384,468 | ) | (1.39 | ) | ||||||||||
Investment
And Mortgage-
Backed
Securities – Held
To
Maturity
|
35,662,305 | 20,154,618 | 15,507,687 | 76.94 | ||||||||||||
Loan
Receivable, Net
|
597,321,830 | 517,931,705 | 79,390,125 | 15.33 | ||||||||||||
Premises
And Equipment,
Net
|
21,887,402 | 21,544,380 | 343,022 | 1.59 | ||||||||||||
FHLB
Stock, At Cost
|
11,544,100 | 9,497,100 | 2,047,000 | 21.55 | ||||||||||||
Bank
Owned Life Insurance
|
9,551,305 | 8,310,813 | 1,240,492 | 14.93 | ||||||||||||
Repossessed
Assets
Acquired
in Settlement of
Loans
|
661,640 | 767,096 | (105,456 | ) | (13.75 | ) |
Balance
|
||||||||||||
December
31, 2008
|
March
31, 2008
|
Increase
(Decrease)
|
||||||||||
Balance
|
Weighted
Rate
|
Balance
|
Weighted
Rate
|
Amount
|
Percent
|
|||||||
Demand
Accounts:
|
||||||||||||
Checking
|
$
|
96,371,802
|
0.21%
|
$
|
100,585,610
|
0.47%
|
$
|
(4,213,808)
|
(4.19)%
|
|||
Money
Market
|
147,789,473
|
2.21
|
143,225,218
|
2.84
|
4,564,255
|
3.19
|
||||||
Regular
Savings
|
15,318,984
|
0.64
|
15,966,557
|
0.97
|
(647,573)
|
(4.06)
|
||||||
Total
|
259,480,259
|
1.38
|
259,777,385
|
1.87
|
(297,126)
|
(0.11)
|
||||||
Certificate
Accounts
|
||||||||||||
0.00
– 1.99%
|
1,064,832
|
-
|
1,064,832
|
100.00
|
||||||||
2.00
– 2.99%
|
65,445,842
|
14,047,109
|
51,398,733
|
365.90
|
||||||||
3.00
– 3.99%
|
105,758,841
|
59,526,823
|
46,232,018
|
77.67
|
||||||||
4.00
– 4.99%
|
181,776,079
|
68,149,323
|
113,626,756
|
166.73
|
||||||||
5.00
– 5.99%
|
7,117,128
|
189,349,568
|
(182,232,440)
|
(96.24)
|
||||||||
Total
|
361,162,722
|
3.78
|
331,072,823
|
4.75
|
30,089,899
|
9.09
|
||||||
Total
Deposits
|
$
|
620,642,981
|
2.78%
|
$
|
590,850,208
|
3.46%
|
$
|
29,792,773
|
5.04%
|
Balance
|
|||||||||||
December
31, 2008
|
March
31, 2008
|
Increase
(Decrease)
|
|||||||||
Fiscal
Year Due:
|
Balance
|
Rate
|
Balance
|
Rate
|
Balance
|
Percent
|
|||||
2009
|
$
|
5,000,000
|
4.05%
|
$
|
42,300,000
|
3.28%
|
$
|
(37,300,000)
|
(88.18)%
|
||
2010
|
90,800,000
|
1.17
|
10,000,000
|
4.88
|
80,800,000
|
808.00
|
|||||
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
|
78,222,356
|
4.18
|
76,234,007
|
4.25
|
1,988,349
|
2.61
|
|||||
Total
Advances
|
$
|
223,722,356
|
3.07%
|
$
|
178,234,007
|
4.18%
|
$
|
45,488,349
|
25.52%
|
As
of December 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
|
|||||
06/24/05
|
06/24/15
|
5,000,000
|
|
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
|
||||||
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
|
3.710
|
1
Time Call
|
06/24/10
|
|||||
07/22/05
|
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
December 31, 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
|
$ | 1,541,548 | 0.3 | % | $ | 609,336 | 0.1 | % | $ | 932,212 | 153.0 | % | ||||||||||||
Real estate
construction
|
2,774,781 | 0.5 | − | 0.0 | 2,774,781 | 100.0 | ||||||||||||||||||
Consumer
|
940,167 | 0.2 | 415,796 | 0.1 | 524,371 | 126.1 | ||||||||||||||||||
Commercial business & real
estate
|
5,813,627 | 1.0 | 4,994,249 | 0.9 | 819,378 | 16.4 | ||||||||||||||||||
Total non-performing
loans
|
11,070,123 | 1.8 | 6,019,381 | 1.1 | 5,050,742 | 83.9 | ||||||||||||||||||
Other
non-performing assets
|
||||||||||||||||||||||||
Repossessed
assets
|
− | − | 6,000 | 0.0 | (6,000 | ) | (100.0 | ) | ||||||||||||||||
Real estate
owned
|
661,640 | 0.1 | 761,096 | 0.1 | (99,456 | ) | (13.1 | ) | ||||||||||||||||
Total other non-performing
assets
|
661,640 | 0.1 | 767,096 | 0.1 | (105,456 | ) | (13.7 | ) | ||||||||||||||||
Total
non-performing assets
|
$ | 11,731,763 | 1.9 | % | $ | 6,786,477 | 1.3 | % | $ | 4,945,286 | 72.9 | % | ||||||||||||
Total
non-performing assets as a percentage of total assets
|
1.3 | % | 0.8 | % |
Three
Months Ended December 31,
|
||||||||||||||||||||
2008
|
2007
|
|||||||||||||||||||
Average
Balance
|
Yield
|
Average
Balance
|
Yield
|
Increase
(Decrease) In Interest And Dividend Income From 2007
|
||||||||||||||||
Loans
Receivable, Net
|
$ | 590,171,933 | 6.10 | % | $ | 495,376,936 | 7.60 | % | $ | (417,147 | ) | |||||||||
Mortgage-Backed
Securities
|
212,464,776 | 4.82 | 140,981,296 | 5.50 | 621,596 | |||||||||||||||
Investments
|
64,393,513 | 4.31 | 124,623,250 | 4.38 | (671,072 | ) | ||||||||||||||
Overnight
Time
|
3,352,759 | 0.09 | 1,845,087 | 3.75 | (16,548 | ) | ||||||||||||||
Total
Interest-Earning Assets
|
$ | 870,382,981 | 5.63 | % | $ | 762,826,569 | 6.68 | % | $ | (483,171 | ) |
Three
Months Ended December 31,
|
||||||||||||||||||||
2008
|
2007
|
|||||||||||||||||||
Average
Balance
|
Yield
|
Average
Balance
|
Yield
|
Decrease
In Interest Expense From 2007
|
||||||||||||||||
Now
And Money Market Accounts
|
$ | 202,314,408 | 2.21 | % | $ | 203,523,577 | 3.15 | % | $ | (488,101 | ) | |||||||||
Passbook
Accounts
|
15,660,153 | 0.69 | 15,671,523 | 0.98 | (11,553 | ) | ||||||||||||||
Certificate
Accounts
|
359,534,279 | 3.92 | 308,615,496 | 5.09 | (407,252 | ) | ||||||||||||||
FHLB
Advances And Other Borrowed
Money
|
243,724,712 | 3.32 | 184,848,789 | 4.54 | (70,272 | ) | ||||||||||||||
Junior
Subordinated Debentures
|
5,155,000 | 5.75 | 5,155,000 | 7.24 | (19,127 | ) | ||||||||||||||
Total
Interest-Bearing Liabilities
|
$ | 826,388,552 | 3.27 | % | $ | 717,814,385 | 4.32 | % | $ | (996,305 | ) |
December
31, 2008
|
December
31, 2007
|
|||
Beginning
Balance
|
$
|
8,263,335
|
$
|
7,564,211
|
Provision
|
525,000
|
150,000
|
||
Charge-offs
|
(132,819)
|
(144,482)
|
||
Recoveries
|
18,011
|
78,647
|
||
Ending
Balance
|
$
|
8,673,527
|
$
|
7,648,376
|
Allowance
For Loan Losses As A Percentage Of Gross Loans Receivable
And
Loans Held For Sale At The End Of The Period
|
1.43%
|
1.51%
|
||
Allowance
For Loan Losses As A Percentage Of Impaired Loans At
The
End Of The Period
|
73.20%
|
557.82%
|
||
Impaired
Loans
|
11,849,874
|
1,371,125
|
||
Non-accrual
Loans And 90 Days Or More Past Due Loans As A
Percentage
Of Gross Loans Receivable And Loans Held For Sale At The
End
Of The Period
|
1.83%
|
0.73%
|
||
Loans
Receivable, Net
|
$
|
597,321,830
|
$
|
500,091,429
|
Three
Months Ended December 31,
|
Increase
(Decrease)
|
|||||||||||||||
2008
|
2007
|
Amounts
|
Percent
|
|||||||||||||
Gain
On Sale Of Loans
|
$ | 107,726 | $ | 134,732 | $ | (27,005 | ) | (20.04 | )% | |||||||
Service
Fees On Deposit Accounts
|
293,327 | 307,045 | (13,719 | ) | (4.47 | ) | ||||||||||
Income
From Cash Value Of Life
Insurance
|
90,000 | 92,246 | (2,246 | ) | (2.43 | ) | ||||||||||
Commissions
On Insurance
|
141,771 | 145,148 | (3,378 | ) | (2.33 | ) | ||||||||||
Other
Agency Income
|
85,633 | 19,670 | 65,963 | 335.34 | ||||||||||||
Trust
Income
|
105,000 | 102,000 | 3,000 | 2.94 | ||||||||||||
Other
|
196,893 | 227,250 | (30,356 | ) | (13.36 | ) | ||||||||||
Total
Non-Interest Income
|
$ | 1,020,350 | $ | 1,028,091 | $ | (7,741 | ) | (0.75 | )% |
Three
Months Ended December 31,
|
Increase
|
|||||||||||||||
2008
|
2007
|
Amounts
|
Percent
|
|||||||||||||
Salaries
And Employee Benefits
|
$ | 2,949,973 | $ | 2,660,655 | $ | 289,319 | 10.87 | % | ||||||||
Occupancy
|
500,193 | 425,489 | 74,703 | 17.56 | ||||||||||||
Advertising
|
155,088 | 80,857 | 74,231 | 91.80 | ||||||||||||
Depreciation
And Maintenance Of
Equipment
|
380,470 | 333,985 | 46,485 | 13.92 | ||||||||||||
FDIC
Insurance Premiums
|
201,882 | 15,402 | 186,480 | 1,210.78 | ||||||||||||
Amortization
of Intangibles
|
22,500 | 22,500 | − | − | ||||||||||||
Mandatorily
Redeemable Financial Instrument
Valuation Expense
|
45,000 | − | 45,000 | 100.00 | ||||||||||||
Other
|
989,397 | 789,044 | 200,353 | 25.39 | ||||||||||||
Total
General And Administrative Expenses
|
$ | 5,244,503 | $ | 4,327,932 | $ | 916,571 | 21.18 | % |
Nine
Months Ended December 31,
|
||||||||||||||||||||
2008
|
2007
|
|||||||||||||||||||
Average
Balance
|
Yield
|
Average
Balance
|
Yield
|
Increase
(Decrease) In Interest And Dividend Income From 2007
|
||||||||||||||||
Loans
Receivable, Net
|
$ | 558,021,225 | 6.33 | % | $ | 472,350,077 | 7.80 | % | $ | (1,142,066 | ) | |||||||||
Mortgage-Backed
Securities
|
209,265,802 | 4.83 | 136,239,152 | 4.93 | 2,538,671 | |||||||||||||||
Investments
|
67,408,412 | 4.67 | 127,408,732 | 4.80 | (2,221,839 | ) | ||||||||||||||
Overnight
Time
|
1,931,124 | 0.68 | 1,435,612 | 4.20 | (35,173 | ) | ||||||||||||||
Total
Interest-Earning Assets
|
$ | 836,626,563 | 5.81 | % | $ | 737,433,573 | 6.74 | % | $ | (860,607 | ) | |||||||||
Nine
Months Ended December 31,
|
||||||||||||||||||||
2008
|
2007
|
|||||||||||||||||||
Average
Balance
|
Yield
|
Average
Balance
|
Yield
|
Increase
(Decrease) In Interest Expense From 2007
|
||||||||||||||||
Now
And Money Market Accounts
|
$ | 202,900,887 | 1.98 | % | $ | 205,550,000 | 3.20 | % | $ | (1,925,040 | ) | |||||||||
Passbook
Accounts
|
16,106,786 | 0.75 | 16,479,117 | 0.98 | (30,940 | ) | ||||||||||||||
Certificate
Accounts
|
339,425,711 | 4.22 | 284,859,916 | 5.05 | (44,705 | ) | ||||||||||||||
FHLB
Advances And Other Borrowed
Money
|
230,557,226 | 3.63 | 179,454,602 | 4.49 | 230,188 | |||||||||||||||
Junior
Subordinated Debentures
|
5,155,000 | 5.77 | 5,155,000 | 7.15 | (53,233 | ) | ||||||||||||||
Total
Interest-Bearing Liabilities
|
$ | 794,145,610 | 3.42 | % | $ | 691,498,635 | 4.28 | % | $ | (1,823,730 | ) |
December
31, 2008
|
December
31, 2007
|
|||
Beginning
Balance
|
$
|
8,066,762
|
$
|
7,296,791
|
Provision
|
1,025,000
|
450,000
|
||
Charge-offs
|
(444,409)
|
(212,893)
|
||
Recoveries
|
26,174
|
114,478
|
||
Ending
Balance
|
$
|
8,673,527
|
$
|
7,648,376
|
Allowance
For Loan Losses As A Percentage Of Gross Loans Receivable
And
Loans Held For Sale At The End Of The Period
|
1.43%
|
1.51%
|
||
Allowance
For Loan Losses As A Percentage Of Impaired Loans At The
End
Of The Period
|
73.20%
|
557.82%
|
||
Impaired
Loans
|
11,849,874
|
1,371,125
|
||
Nonaccrual
Loans And 90 Days Or More Past Due Loans As A
Percentage
Of Gross Loans Receivable And Loans Held For Sale At The End Of
The Period
|
1.83%
|
0.73%
|
||
Loans
Receivable, Net
|
$
|
597,321,830
|
$
|
500,091,429
|
Nine
Months Ended December 31,
|
Increase
(Decrease)
|
|||||||||||||||
2008
|
2007
|
Amounts
|
Percent
|
|||||||||||||
Gain
On Sale Of Investments
|
$ | 126,440 | $ | − | $ | 126,440 | 100.00 | % | ||||||||
Gain
On Sale Of Loans
|
335,444 | 416,303 | (80,858 | ) | (19.42 | ) | ||||||||||
Service
Fees On Deposit Accounts
|
850,720 | 957,790 | (107,071 | ) | (11.18 | ) | ||||||||||
Income
From Cash Value Of Life
Insurance
|
268,492 | 241,447 | 27,045 | 11.20 | ||||||||||||
Commissions
From Insurance Agency
|
474,901 | 464,309 | 10,591 | 2.28 | ||||||||||||
Other
Agency Income
|
208,651 | 75,838 | 132,813 | 175.13 | ||||||||||||
Trust
Income
|
315,000 | 340,625 | (25,625 | ) | (7.52 | ) | ||||||||||
Other
|
622,512 | 641,747 | (19,234 | ) | (3.00 | ) | ||||||||||
Total
Non-Interest Income
|
$ | 3,202,160 | $ | 3,138,059 | $ | 64,101 | 2.04 | % |
Nine
Months Ended December 31,
|
Increase
|
|||||||||||||||
2008
|
2007
|
Amounts
|
Percent
|
|||||||||||||
Salaries
And Employee Benefits
|
$ | 8,565,480 | $ | 7,858,206 | $ | 707,275 | 9.00 | % | ||||||||
Occupancy
|
1,490,879 | 1,293,602 | 197,276 | 15.25 | ||||||||||||
Advertising
|
402,765 | 270,278 | 132,487 | 49.02 | ||||||||||||
Depreciation
And Maintenance Of
Equipment
|
1,222,304 | 990,601 | 231,703 | 23.39 | ||||||||||||
FDIC
Insurance Premiums
|
549,227 | 45,599 | 503,628 | 1,104.48 | ||||||||||||
Amortization
of Intangibles
|
67,500 | 67,500 | − | − | ||||||||||||
Mandatorily
Redeemable Financial Instrument
Valuation Expense
|
105,000 | − | 105,000 | 100.00 | ||||||||||||
Other
|
2,738,726 | 2,434,592 | 304,134 | 12.49 | ||||||||||||
Total
General And Administrative Expenses
|
$ | 15,141,881 | $ | 12,960,378 | $ | 2,181,503 | 16.83 | % |
(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
|
$ | 1,502 | $ | 3,483 | $ | 35,505 | $ | 40,490 | $ | 38,222 | $ | 78,712 | ||||||||||||
Standby
letters of credit
|
41 | 122 | 643 | 806 | − | 806 | ||||||||||||||||||
Total
|
$ | 1,543 | $ | 3,605 | $ | 36,148 | $ | 41,296 | $ | 38,222 | $ | 79,518 |
$
|
We
potentially face increased regulation of our industry. Compliance with
such regulation may increase our costs and limit our ability to pursue
business opportunities.
|
$
|
Our
ability to assess the creditworthiness of our customers may be impaired if
the models and approaches we use to select, manage and underwrite our
customers become less predictive of future
behaviors.
|
$
|
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 Federal Deposit Insurance
Corporation premiums because market developments have significantly
depleted the insurance fund of the Federal Deposit Insurance Corporation
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 insurance coverage from
$100,000 to $250,000 through December 31, 2009;
and
|
$
|
authority
to the SEC to suspend mark-to-market accounting requirements for any
issuer or class of category of
transactions.
|
·
|
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 December 31, 2008 we recorded a provision for loan
losses of $525,000 compared to $150,000 for the quarter ended December 31,
2007, an increase of $375,000. 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 December 31, 2008 our total non-performing
loans had increased to $11.7 million compared to $3.7 million at December
31, 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
|
October
1 – October 31, 2008
|
2,449
|
$20.06
|
2,449
|
118,666
|
November
1 – November 30, 2008
|
68,399
|
18.00
|
68,399
|
50,267
|
December
1 – December 31, 2008
|
200
|
18.21
|
200
|
50,067
|
Total
|
71,048
|
$18.07
|
71,048
|
50,067
|
3.1 | Articles Of Incorporation, as amended (1) | |
3.2 | Articles of Amendment, including Certificate of Designation relating to the Company’s Fixed Rate Cumulative Perpetual Preferred Stock Series A (2) | |
3.3 | Bylaws (3) | |
4.1 | Instruments defining the rights of security holders, including indentures (4) | |
4.2 | Warrant to purchase shares of the Company’s common stock dated December 19, 2008 (2) | |
4.3 | Letter
Agreement (including Securities Purchase Agreement – Standard Terms,
attached as Exhibit A) dated December 19, 2008 between the Company and the
United
States Department of the Treasury (2)
|
|
10.1 | 1993 Salary Continuation Agreements (5) | |
10.2 | Amendment One to 1993 Salary Continuation Agreement (6) | |
10.3 | Form of 2006 Salary Continuation Agreement(7) | |
10.4 | 1999 Stock Option Plan (3) | |
10.5 | 1987 Stock Option Plan (5) | |
10.6 | 2002 Stock Option Plan (8) | |
10.7 | 2004 Employee Stock Purchase Plan (9) | |
10.8 | Incentive Compensation Plan (5) | |
10.9 | Form of Security Federal Bank Salary Continuation Agreement (10) | |
10.10 | Form of Security Federal Split Dollar Agreement (10) | |
10.11 | Form of Compensation Modification Agreement (2) | |
14 | Code of Ethics (11) | |
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)
|
Incorporated
by reference to the Registrant’s Current Report on Form 8-K on December
23, 2008.
|
(3)
|
Filed
on March 2, 2000, as an exhibit to the Company’s Registration Statement on
Form S-8 and incorporated herein by
reference.
|
(4)
|
Filed
on August 12, 1987, as an exhibit to the Company’s Registration Statement
on Form 8-A and incorporated herein by
reference.
|
(5)
|
Filed
on June 28, 1993, as an exhibit to the Company’s Annual Report on Form
10-KSB and incorporated herein by
reference.
|
(6)
|
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.
|
(7)
|
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.
|
(8)
|
Filed
on June 19, 2002, as an exhibit to the Company’s Proxy Statement and
incorporated herein by reference.
|
(9)
|
Filed
on June 18, 2004, as an exhibit to the Company’s Proxy Statement and
incorporated herein by reference.
|
(10)
|
Filed
on May 24, 2006 as an exhibit to the Current Report on Form 8-K and
incorporated herein by reference.
|
(11)
|
Filed
on June 27, 2007 as an exhibit to the Company’s Annual Report on Form 10-K
and incorporated herein by
reference.
|
Date:
|
February
13, 2009
|
By:
|
/s/ Timothy W. Simmons | ||
Timothy
W. Simmons
|
|||||
President
|
|||||
Duly
Authorized Representative
|
Date:
|
February
13, 2009
|
By:
|
/s/ Roy G. Lindburg | ||
Roy
G. Lindburg
|
|||||
Chief
Financial Officer
|
|||||
Duly
Authorized Representative
|