(X)
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
(
)
|
TRANSITION
REPORT PURSUANT TO 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
Stewardship
Financial Corporation
|
(Exact
name of registrant as specified in its
charter)
|
New
Jersey
|
22-3351447
|
|
(State
or other jurisdiction of
|
(I.R.S.
Employer Identification No.)
|
|
incorporation
or organization)
|
||
630
Godwin Avenue, Midland Park, NJ
|
07432
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
(201) 444-7100
|
||
(Registrant’s
telephone number, including area code)
|
(Former
name, former address and former fiscal year, if changed since last
report)
|
Large
accelerated filer o
|
Accelerated
filer o
|
Non-accelerated
filer ý
|
PAGE
|
|||
NUMBER
|
|||
Consolidated
Statements of Financial Condition at March 31, 2007 (Unaudited) and
December 31, 2006
|
1
|
||
Consolidated
Statements of Income for the Three Months ended March 31, 2007 and
2006
(Unaudited)
|
2
|
||
Consolidated
Statements of Cash Flows for the Three Months ended March 31, 2007
and
2006 (Unaudited)
|
3
|
||
Consolidated
Statement of Changes in Stockholders’ Equity for the Three Months
ended March 31, 2007 and 2006 (Unaudited)
|
4
|
||
Notes
to Consolidated Financial Statements (Unaudited)
|
5
-
12
|
||
13
- 19
|
|||
20
|
|||
20
|
|||
21
|
|||
21
|
|||
22
|
|||
23
-26
|
Stewardship
Financial Corporation and
Subsidiary
|
||||||||
Consolidated
Statements of Financial Condition
(Unaudited)
|
||||||||
|
|
|||||||
March
31, 2007 |
December
31, 2006 |
|||||||
|
||||||||
Assets
|
||||||||
Cash
and due from banks
|
$ |
14,424,000
|
$ |
14,861,000
|
||||
Other
interest-earning assets
|
2,194,000
|
836,000
|
||||||
Cash
and cash equivalents
|
16,618,000
|
15,697,000
|
||||||
Securities
available for sale
|
72,584,000
|
72,746,000
|
||||||
Securities
held to maturity; estimated fair value
|
||||||||
of
$39,024,000 (2007) and $38,881,000 (2006)
|
39,229,000
|
39,163,000
|
||||||
FHLB-NY
stock, at cost
|
1,593,000
|
1,899,000
|
||||||
Loans,
net of allowance for loan losses of
|
||||||||
of
$ 4,093,000 (2007) and $4,101,000 (2006)
|
366,461,000
|
365,443,000
|
||||||
Mortgage
loans held for sale
|
1,019,000
|
2,155,000
|
||||||
Premises
and equipment, net
|
7,408,000
|
7,098,000
|
||||||
Accrued
interest receivable
|
2,846,000
|
2,912,000
|
||||||
Intangible
assets
|
94,000
|
102,000
|
||||||
Bank
owned life insurance
|
8,600,000
|
8,522,000
|
||||||
Other
assets
|
4,037,000
|
4,012,000
|
||||||
Total
assets
|
$ |
520,489,000
|
$ |
519,749,000
|
||||
Liabilities
and stockholders' equity
|
||||||||
Liabilities
|
||||||||
Deposits:
|
||||||||
Noninterest-bearing
|
$ |
93,671,000
|
$ |
92,105,000
|
||||
Interest-bearing
|
346,011,000
|
342,118,000
|
||||||
Total
deposits
|
439,682,000
|
434,223,000
|
||||||
Other
borrowings
|
21,086,000
|
27,892,000
|
||||||
Subordinated
debentures
|
7,217,000
|
7,217,000
|
||||||
Securities
sold under agreements to repurchase
|
8,838,000
|
9,023,000
|
||||||
Accrued
interest payable
|
2,036,000
|
1,721,000
|
||||||
Accrued
expenses and other liabilities
|
3,522,000
|
2,367,000
|
||||||
Total
liabilities
|
482,381,000
|
482,443,000
|
||||||
Commitments
and contingencies
|
-
|
-
|
||||||
Stockholders'
equity
|
||||||||
Common
stock, no par value; 10,000,000 shares authorized;
|
||||||||
5,019,729
and 5,017,919 shares issued and outstanding at
|
||||||||
March
31, 2007 and December 31, 2006, respectively.
|
31,172,000
|
31,148,000
|
||||||
Retained
earnings
|
7,384,000
|
6,750,000
|
||||||
Accumulated
other comprehensive loss
|
(448,000 | ) | (592,000 | ) | ||||
Total
stockholders' equity
|
38,108,000
|
37,306,000
|
||||||
Total
liabilities and stockholders' equity
|
$ |
520,489,000
|
$ |
519,749,000
|
||||
See
notes to unaudited consolidated financial statements.
|
Stewardship
Financial Corporation and Subsidiary
|
||||||||
Consolidated
Statements of Income
|
||||||||
(Unaudited)
|
||||||||
Three
Months Ended
|
||||||||
March
31,
|
||||||||
2007
|
2006
|
|||||||
Interest
and dividend income:
|
||||||||
Loans
|
$ |
6,570,000
|
$ |
5,974,000
|
||||
Securities
held to maturity
|
||||||||
Taxable
|
229,000
|
221,000
|
||||||
Non-taxable
|
177,000
|
118,000
|
||||||
Securities
available for sale
|
||||||||
Taxable
|
907,000
|
637,000
|
||||||
Non-taxable
|
14,000
|
7,000
|
||||||
FHLB
dividends
|
26,000
|
20,000
|
||||||
Other
interest-earning assets
|
9,000
|
7,000
|
||||||
Total
interest and dividend income
|
7,932,000
|
6,984,000
|
||||||
Interest
expense:
|
||||||||
Deposits
|
2,760,000
|
1,777,000
|
||||||
Borrowed
money
|
499,000
|
530,000
|
||||||
Total
interest expense
|
3,259,000
|
2,307,000
|
||||||
Net
interest income before provision for loan
losses
|
4,673,000
|
4,677,000
|
||||||
Provision
for loan losses
|
10,000
|
50,000
|
||||||
Net
interest income after provision for loan
losses
|
4,663,000
|
4,627,000
|
||||||
Noninterest
income:
|
||||||||
Fees
and service charges
|
394,000
|
378,000
|
||||||
Bank
owned life insurance
|
78,000
|
80,000
|
||||||
Gain
on sales of mortgage loans
|
89,000
|
50,000
|
||||||
Merchant
processing
|
365,000
|
266,000
|
||||||
Miscellaneous
|
70,000
|
96,000
|
||||||
Total
noninterest income
|
996,000
|
870,000
|
||||||
Noninterest
expenses:
|
||||||||
Salaries
and employee benefits
|
1,794,000
|
1,621,000
|
||||||
Occupancy,
net
|
335,000
|
314,000
|
||||||
Equipment
|
217,000
|
242,000
|
||||||
Data
processing
|
307,000
|
294,000
|
||||||
Advertising
|
76,000
|
87,000
|
||||||
FDIC
insurance premium
|
13,000
|
13,000
|
||||||
Amortization
of intangible assets
|
8,000
|
10,000
|
||||||
Charitable
contributions
|
169,000
|
181,000
|
||||||
Stationery
and supplies
|
83,000
|
76,000
|
||||||
Merchant
processing
|
335,000
|
242,000
|
||||||
Bank-card
related services
|
95,000
|
121,000
|
||||||
Miscellaneous
|
563,000
|
577,000
|
||||||
Total
noninterest expenses
|
3,995,000
|
3,778,000
|
||||||
Income
before income tax expense
|
1,664,000
|
1,719,000
|
||||||
Income
tax expense
|
578,000
|
610,000
|
||||||
Net
income
|
$ |
1,086,000
|
$ |
1,109,000
|
||||
Basic
earnings per share
|
$ |
0.22
|
$ |
0.22
|
||||
Diluted
earnings per share
|
$ |
0.21
|
$ |
0.22
|
||||
Weighted
average number of common shares outstanding
|
5,019,226
|
4,992,599
|
||||||
Weighted
average number of diluted common
|
||||||||
shares
outstanding
|
5,060,773
|
5,050,265
|
||||||
Share
data has been restated to reflect a 5%
stock dividend paid November 15,
2006.
|
||||||||
See
notes to unaudited consolidated financial
statements.
|
Stewardship
Financial Corporation and Subsidiary
|
||||||||
Consolidated
Statements of Cash Flows
|
||||||||
(Unaudited)
|
||||||||
Three
Months Ended
|
||||||||
March
31,
|
||||||||
2007
|
2006
|
|||||||
Cash
flows from operating activities:
|
||||||||
Net
income
|
$ |
1,086,000
|
$ |
1,109,000
|
||||
Adjustments
to reconcile net income to
|
||||||||
net
cash provided by operating activities:
|
||||||||
Depreciation
and amortization of premises and equipment
|
180,000
|
178,000
|
||||||
Amortization
of premiums and accretion of discounts, net
|
39,000
|
79,000
|
||||||
Accretion
of deferred loan fees
|
(34,000 | ) | (29,000 | ) | ||||
Provision
for loan losses
|
10,000
|
50,000
|
||||||
Originations
of mortgage loans held for sale
|
(7,586,000 | ) | (3,419,000 | ) | ||||
Proceeds
from sale of mortgage loans
|
8,811,000
|
4,989,000
|
||||||
Gain
on sale of loans
|
(89,000 | ) | (50,000 | ) | ||||
Deferred
income tax expense (benefit)
|
26,000
|
(10,000 | ) | |||||
Amortization
of intangible assets
|
8,000
|
10,000
|
||||||
Nonqualified
stock option expense
|
13,000
|
17,000
|
||||||
Increase
in bank owned life insurance
|
(78,000 | ) | (80,000 | ) | ||||
Decrease
in accrued interest receivable
|
66,000
|
10,000
|
||||||
Increase
in other assets
|
(143,000 | ) | (1,039,000 | ) | ||||
Increase
in accrued interest payable
|
315,000
|
323,000
|
||||||
Increase
in other liabilities
|
155,000
|
737,000
|
||||||
Net
cash provided by operating activities
|
2,779,000
|
2,875,000
|
||||||
Cash
flows from investing activities:
|
||||||||
Purchase
of securities available for sale
|
(3,217,000 | ) | (2,093,000 | ) | ||||
Proceeds
from maturities and principal repayments
|
||||||||
on
securities available for sale
|
4,605,000
|
2,902,000
|
||||||
Purchase
of securities held to maturity
|
(2,089,000 | ) | (679,000 | ) | ||||
Proceeds
from maturities and principal repayments on
|
||||||||
securities
held to maturity
|
1,842,000
|
2,331,000
|
||||||
Proceeds
from calls on securities held to maturity
|
152,000
|
-
|
||||||
Redemption
of FHLB-NY stock
|
306,000
|
261,000
|
||||||
Net
(decrease) increase in loans
|
(994,000 | ) |
114,000
|
|||||
Additions
to premises and equipment
|
(490,000 | ) | (370,000 | ) | ||||
Net
cash provided by investing activities
|
115,000 |
2,466,000
|
||||||
Cash
flows from financing activities:
|
||||||||
Net
increase (decrease) in noninterest-bearing
deposits
|
1,566,000
|
(3,138,000 | ) | |||||
Net
increase (decrease) in interest-bearing deposits
|
3,893,000
|
(433,000 | ) | |||||
Net
(decrease) increase in securities sold under
agreements
|
||||||||
to
repurchase
|
(185,000 | ) |
1,375,000
|
|||||
Net
decrease in short term borrowings
|
(6,400,000 | ) | (5,400,000 | ) | ||||
Payments
on long term borrowings
|
(406,000 | ) | (393,000 | ) | ||||
Cash
dividends paid on common stock
|
(452,000 | ) | (169,000 | ) | ||||
Payment
of discount on dividend reinvestment plan
|
(11,000 | ) |
-
|
|||||
Purchase
of treasury stock
|
-
|
(103,000 | ) | |||||
Issuance
of common stock
|
22,000
|
38,000
|
||||||
Net
cash used in financing activities
|
(1,973,000 | ) | (8,223,000 | ) | ||||
Net
increase (decrease) in cash and cash equivalents
|
921,000
|
(2,882,000 | ) | |||||
Cash
and cash equivalents - beginning
|
15,697,000
|
14,028,000
|
||||||
Cash
and cash equivalents - ending
|
$ |
16,618,000
|
$ |
11,146,000
|
||||
Supplemental
disclosures of cash flow information:
|
||||||||
Cash
paid during the period for interest
|
2,944,000
|
1,980,000
|
||||||
Cash
paid during the period for income taxes
|
25,000 | 200,000 | ||||||
Noncash
investing activities - security purchase due
broker
|
1,000,000 | - | ||||||
Noncash
financing activities - issuance of common stock
|
||||||||
under
dividend reinvestment plan
|
-
|
211,000
|
||||||
See
notes to unaudited consolidated financial statements.
|
Stewardship
Financial Corporation and Subsidiary
|
||||||||||||||||||||
Consolidated
Statement of Changes in Stockholders' Equity
|
||||||||||||||||||||
(Unaudited)
|
||||||||||||||||||||
For
the Period Ended March 31, 2007
|
||||||||||||||||||||
Accumulated
|
||||||||||||||||||||
Other
|
||||||||||||||||||||
Comprehensive
|
||||||||||||||||||||
Common
Stock
|
Retained
|
Loss,
|
||||||||||||||||||
Shares
|
Amount
|
Earnings
|
Net
|
Total
|
||||||||||||||||
Balance
-- December 31, 2006
|
5,017,919
|
$ |
31,148,000
|
$ |
6,750,000
|
$ | (592,000 | ) | $ |
37,306,000
|
||||||||||
Dividends
Paid
|
-
|
-
|
(452,000 | ) |
-
|
(452,000 | ) | |||||||||||||
Payment
of discount on dividend
|
||||||||||||||||||||
reinvestment
plan
|
-
|
(11,000 | ) |
-
|
-
|
(11,000 | ) | |||||||||||||
Common
stock issued under stock plans
|
1,810
|
22,000
|
-
|
-
|
22,000
|
|||||||||||||||
Stock
option compensation expense
|
-
|
13,000
|
-
|
-
|
13,000
|
|||||||||||||||
Comprehensive
income:
|
||||||||||||||||||||
Net
income for the three months
|
||||||||||||||||||||
ended
March 31, 2007
|
-
|
-
|
1,086,000
|
-
|
1,086,000
|
|||||||||||||||
Unrealized
holding gains on securities
|
||||||||||||||||||||
available
for sale arising during the period
|
||||||||||||||||||||
(net
taxes of $91,000)
|
-
|
-
|
-
|
144,000
|
144,000
|
|||||||||||||||
Total
comprehensive income, net of tax
|
1,230,000
|
|||||||||||||||||||
Balance
-- March 31, 2007
|
5,019,729
|
$ |
31,172,000
|
$ |
7,384,000
|
$ | (448,000 | ) | $ |
38,108,000
|
For
the Period Ended March 31, 2006
|
||||||||||||||||||||||||||||
Accumulated
|
||||||||||||||||||||||||||||
Other
|
||||||||||||||||||||||||||||
Comprehensive
|
||||||||||||||||||||||||||||
Common
Stock
|
Treasury
Stock
|
Retained
|
Loss,
|
|||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Earnings
|
Net
|
Total
|
||||||||||||||||||||||
Balance
-- December 31, 2005
|
5,027,283
|
$ |
28,211,000
|
(41,560 | ) | $ | (556,000 | ) | $ |
6,647,000
|
$ | (918,000 | ) | $ |
33,384,000
|
|||||||||||||
Dividends
Paid
|
-
|
-
|
-
|
-
|
(379,000 | ) |
-
|
(379,000 | ) | |||||||||||||||||||
Common
stock issued under dividend
|
||||||||||||||||||||||||||||
reinvestment
plan
|
16,166
|
211,000
|
211,000
|
|||||||||||||||||||||||||
Common
stock issued under stock plans
|
2,703
|
37,000
|
37,000
|
|||||||||||||||||||||||||
Repurchase
common stock
|
-
|
-
|
(7,739 | ) | (103,000 | ) |
-
|
-
|
(103,000 | ) | ||||||||||||||||||
Stock
option compensation expense
|
17,000
|
17,000
|
||||||||||||||||||||||||||
Comprehensive
income:
|
||||||||||||||||||||||||||||
Net
income for the three months
|
||||||||||||||||||||||||||||
ended
March 31, 2006
|
-
|
-
|
-
|
-
|
1,109,000
|
-
|
1,109,000
|
|||||||||||||||||||||
Unrealized
holding losses on securities
|
||||||||||||||||||||||||||||
available
for sale arising during the period
|
||||||||||||||||||||||||||||
(net
tax benefit of $78,000)
|
-
|
-
|
-
|
-
|
-
|
(125,000 | ) | (125,000 | ) | |||||||||||||||||||
Total
comprehensive income, net of tax
|
984,000
|
|||||||||||||||||||||||||||
Balance
-- March 31, 2006
|
5,027,283
|
$ |
28,228,000
|
(30,430 | ) | $ | (411,000 | ) | $ |
7,377,000
|
$ | (1,043,000 | ) | $ |
34,151,000
|
2007
|
2006
|
|||||||||||||||
Weighted
|
Weighted
|
|||||||||||||||
Average
|
Average
|
|||||||||||||||
Shares
|
Exercise
Price
|
Shares
|
Exercise
Price
|
|||||||||||||
Outstanding
at beginning of year
|
75,422
|
$ |
5.98
|
75,989
|
$ |
6.03
|
||||||||||
Granted
|
-
|
-
|
-
|
-
|
||||||||||||
Exercised
|
-
|
-
|
-
|
-
|
||||||||||||
Forfeited
|
486
|
12.96
|
-
|
-
|
||||||||||||
Outstanding
at end of period
|
74,936
|
$ |
5.94
|
75,989
|
$ |
6.03
|
||||||||||
Options
exercisable
|
74,936
|
75,989
|
||||||||||||||
Weighted-average
remaining
|
||||||||||||||||
contractual
life
|
1.68
years
|
2.74
years
|
||||||||||||||
Aggregate
intrinsic value
|
$ |
567,000
|
$ |
581,000
|
||||||||||||
2007
|
2006
|
|||||||||||||||
Weighted
|
Weighted
|
|||||||||||||||
Average
|
Average
|
|||||||||||||||
Shares
|
Exercise
Price
|
Shares
|
Exercise
Price
|
|||||||||||||
Outstanding
at beginning of year
|
57,860
|
$ |
12.96
|
45,568
|
$ |
7.12
|
||||||||||
Granted
|
-
|
-
|
-
|
-
|
||||||||||||
Exercised
|
-
|
-
|
-
|
-
|
||||||||||||
Expired
|
-
|
-
|
-
|
-
|
||||||||||||
Outstanding
at end of period
|
57,860
|
$ |
12.96
|
45,568
|
$ |
7.12
|
||||||||||
Options
exercisable
|
5,360
|
18,765
|
||||||||||||||
Weighted-average
remaining
|
||||||||||||||||
contractual
life
|
4.98
years
|
0.62
years
|
||||||||||||||
Aggregate
intrinsic value
|
$ |
31,000
|
$ |
299,000
|
March
31, 2007
|
||||||||||||
Gross
|
Gross
|
|||||||||||
Fair
|
Unrealized
|
Unrealized
|
||||||||||
Value
|
Holding
Gains
|
Holding
Losses
|
||||||||||
U.S.
government-sponsored agencies
|
32,932,000
|
40,000
|
242,000
|
|||||||||
Obligations
of state and political
|
||||||||||||
subdivisions
|
1,826,000
|
1,000
|
26,000
|
|||||||||
Mortgage-backed
securities
|
36,712,000
|
57,000
|
547,000
|
|||||||||
Community
Reinvestment Act Fund
|
1,114,000
|
-
|
19,000
|
|||||||||
$ |
72,584,000
|
$ |
98,000
|
$ |
834,000
|
|||||||
December
31, 2006
|
||||||||||||
Gross
|
Gross
|
|||||||||||
Amortized
|
Unrealized
|
Unrealized
|
||||||||||
Cost
|
Holding
Gains
|
Holding
Losses
|
||||||||||
U.S.
Treasury securities
|
||||||||||||
U.S.
government-sponsored agencies
|
$ |
32,117,000
|
$ |
28,000
|
$ |
347,000
|
||||||
Obligations
of state and political
|
||||||||||||
subdivisions
|
1,823,000
|
-
|
30,000
|
|||||||||
Mortgage-backed
securities
|
37,707,000
|
40,000
|
641,000
|
|||||||||
Community
Reinvestment Act Fund
|
1,099,000
|
-
|
21,000
|
|||||||||
$ |
72,746,000
|
$ |
68,000
|
$ |
1,039,000
|
March
31, 2007
|
||||||||||||||||
Carrying
Value
|
Gross
Unrecognized
Holding
Gains
|
Gross
Unrecognized
Holding
Losses
|
Fair
Value
|
|||||||||||||
U.S.
Treasury securities
|
$ |
501,000
|
$ |
-
|
$ |
1,000
|
$ |
500,000
|
||||||||
U.S.
government-sponsored agencies
|
11,274,000
|
19,000
|
75,000
|
11,218,000
|
||||||||||||
Obligations
of state and political
|
||||||||||||||||
subdivisions
|
20,447,000
|
59,000
|
148,000
|
20,358,000
|
||||||||||||
Mortgage-backed
securities
|
7,007,000
|
36,000
|
95,000
|
6,948,000
|
||||||||||||
$ |
39,229,000
|
$ |
114,000
|
$ |
319,000
|
$ |
39,024,000
|
|||||||||
December
31, 2006
|
||||||||||||||||
Carrying
Value
|
Gross
Unrecognized
Holding
Gains
|
Gross
Unrecognized
Holding
Losses
|
Fair
Value
|
|||||||||||||
U.S.
Treasury securities
|
$ |
502,000
|
$ |
-
|
$ |
2,000
|
$ |
500,000
|
||||||||
U.S.
government-sponsored agencies
|
10,776,000
|
8,000
|
109,000
|
10,675,000
|
||||||||||||
Obligations
of state and political
|
||||||||||||||||
subdivisions
|
20,516,000
|
53,000
|
154,000
|
20,415,000
|
||||||||||||
Mortgage-backed
securities
|
7,369,000
|
32,000
|
110,000
|
7,291,000
|
||||||||||||
$ |
39,163,000
|
$ |
93,000
|
$ |
375,000
|
$ |
38,881,000
|
March
31,
|
December
31,
|
|||||||
2007
|
2006
|
|||||||
Mortgage
|
||||||||
Residential
|
$ |
47,811,000
|
$ |
47,020,000
|
||||
Commercial
|
174,665,000
|
177,411,000
|
||||||
Commercial
|
76,359,000
|
72,606,000
|
||||||
Equity
|
19,106,000
|
20,010,000
|
||||||
Installment
|
52,598,000
|
52,389,000
|
||||||
Other
|
446,000
|
560,000
|
||||||
Total
loans
|
370,985,000
|
369,996,000
|
||||||
Less: Deferred
loan fees
|
431,000
|
452,000
|
||||||
Allowance
for loan losses
|
4,093,000
|
4,101,000
|
||||||
4,524,000
|
4,553,000
|
|||||||
Loans,
net
|
$ |
366,461,000
|
$ |
365,443,000
|
Note
6. Allowance for loan losses
|
||||||||
Three
Months Ended March 31,
|
||||||||
2007
|
2006
|
|||||||
Balance,
beginning of period
|
$ |
4,101,000
|
$ |
3,847,000
|
||||
Provision
charged to operations
|
10,000
|
50,000
|
||||||
Recoveries
of loans charged off
|
1,000
|
23,000
|
||||||
Loans
charged off
|
(19,000 | ) |
-
|
|||||
Balance,
end of period
|
$ |
4,093,000
|
$ |
3,920,000
|
March
31,
|
December
31,
|
|||||||
2007
|
2006
|
|||||||
Impaired
loans
|
||||||||
With
related allowance for loan losses
|
$ |
247,000
|
$ |
223,000
|
||||
Without
related allowance for loan losses
|
198,000
|
221,000
|
||||||
Total
impaired loans
|
$ |
445,000
|
$ |
444,000
|
||||
Related
allowance for loan losses
|
$ |
110,000
|
$ |
110,000
|
Three
Months Ended
|
||||||||
March
31,
|
||||||||
2007
|
2006
|
|||||||
Net
income
|
$ |
1,086
|
$ |
1,109
|
||||
Weighted
average shares
|
5,019
|
4,993
|
||||||
Effect
of dilutive stock options
|
42
|
57
|
||||||
Total
weighted average dilutive shares
|
5,061
|
5,050
|
||||||
Basic
earnings per share
|
$ |
0.22
|
$ |
0.22
|
||||
Diluted
earnings per share
|
$ |
0.21
|
$ |
0.22
|
Analysis
of Net Interest Income (Unaudited)
For
the Three Months Ended March 31,
|
||||||||||||||||||||||||
2007
|
2006
|
|||||||||||||||||||||||
Average
|
Average
|
|||||||||||||||||||||||
Interest
|
Rates
|
Interest
|
Rates
|
|||||||||||||||||||||
Average
|
Income/
|
Earned/
|
Average
|
Income/
|
Earned/
|
|||||||||||||||||||
Balance
|
Expense
|
Paid
|
Balance
|
Expense
|
Paid
|
|||||||||||||||||||
|
(Dollars
in thousands)
|
|||||||||||||||||||||||
Assets
|
||||||||||||||||||||||||
Interest-earning
assets:
|
||||||||||||||||||||||||
Loans
(1)
|
$ |
372,299
|
$ |
6,570
|
7.16 | % | $ |
348,697
|
$ |
5,974
|
6.95 | % | ||||||||||||
Taxable
investment securities (1)
|
90,837
|
1,162
|
5.19
|
86,645
|
878
|
4.11
|
||||||||||||||||||
Tax-exempt
investment securities (1) (2)
|
22,190
|
276
|
5.04
|
16,817
|
182
|
4.39
|
||||||||||||||||||
Other
interest-earning assets
|
418
|
9
|
8.73
|
483
|
7
|
5.88
|
||||||||||||||||||
Total
interest-earning assets
|
485,744
|
8,017
|
6.69
|
452,642
|
7,041
|
6.31
|
||||||||||||||||||
Non-interest-earning
assets:
|
||||||||||||||||||||||||
Allowance
for loan losses
|
(4,102 | ) | (3,965 | ) | ||||||||||||||||||||
Other
assets
|
33,809
|
31,972
|
||||||||||||||||||||||
Total
assets
|
$ |
515,451
|
$ |
480,649
|
||||||||||||||||||||
Liabilities
and Stockholders' Equity
|
||||||||||||||||||||||||
Interest-bearing
liabilities:
|
||||||||||||||||||||||||
Interest-bearing
demand deposits
|
$ |
119,502
|
$ |
660
|
2.24 | % | $ |
118,775
|
$ |
407
|
1.39 | % | ||||||||||||
Savings
deposits
|
37,037
|
70
|
0.77
|
44,674
|
64
|
0.58
|
||||||||||||||||||
Time
deposits
|
182,399
|
2,030
|
4.51
|
144,849
|
1,306
|
3.66
|
||||||||||||||||||
Repurchase
agreements
|
9,185
|
103
|
4.55
|
5,635
|
55
|
3.96
|
||||||||||||||||||
FHLB
borrowing
|
24,558
|
274
|
4.52
|
33,784
|
353
|
4.24
|
||||||||||||||||||
Subordinated
debenture
|
7,217
|
122
|
6.86
|
7,255
|
122
|
6.82
|
||||||||||||||||||
Total
interest-bearing liabilities
|
379,898
|
3,259
|
3.48
|
354,972
|
2,307
|
2.64
|
||||||||||||||||||
Non-interest-bearing
liabilities:
|
||||||||||||||||||||||||
Demand
deposits
|
92,902
|
88,953
|
||||||||||||||||||||||
Other
liabilities
|
4,773
|
2,717
|
||||||||||||||||||||||
Stockholders'
equity
|
37,878
|
34,007
|
||||||||||||||||||||||
Total
liabilities and stockholders' equity
|
$ |
515,451
|
$ |
480,649
|
||||||||||||||||||||
Net
interest income (taxable equivalent
basis)
|
$ |
4,758
|
$ |
4,734
|
||||||||||||||||||||
Tax
Equivalent adjustment
|
(85 | ) | (57 | ) | ||||||||||||||||||||
Net
interest income
|
4,673
|
4,677
|
||||||||||||||||||||||
Net
interest spread (taxable equivalent
basis)
|
3.21 | % | 3.67 | % | ||||||||||||||||||||
Net
yield on interest-earning
|
||||||||||||||||||||||||
assets
(taxable equivalent basis) (3)
|
3.97 | % | 4.24 | % |
(1)
|
For
purpose of these calculations, nonaccruing loans are included
in the
average balance. Fees are included in loan interest. Loans
and total
interest-earning assets are net of unearned income. Securities
are
included at amortized cost.
|
(2)
|
The
tax equivalent adjustments are based on a marginal tax
rate of
34%.
|
(3)
|
Net
interest income (taxable equivalent basis) divided by average
interest-earning
assets.
|
03/31/07
|
12/31/06
|
09/30/06
|
06/30/06
|
|||||||||||||
(Dollars
in Thousands)
|
||||||||||||||||
Nonaccrual
loans: (1)
|
$ |
445
|
$ |
444
|
$ |
203
|
$ |
258
|
||||||||
Loans
past due 90 days or more: (2)
|
5
|
1,090
|
157
|
11
|
||||||||||||
Total
nonperforming loans
|
$ |
450
|
$ |
1,534
|
$ |
360
|
$ |
269
|
||||||||
Allowance
for loan losses
|
$ |
4,093
|
$ |
4,101
|
$ |
4,086
|
$ |
4,011
|
||||||||
Nonaccrual
loans to total loans
|
0.12 | % | 0.12 | % | 0.06 | % | 0.07 | % | ||||||||
Nonperforming
loans to total loans
|
0.12 | % | 0.41 | % | 0.10 | % | 0.08 | % | ||||||||
Nonperforming
loans to total assets
|
0.09 | % | 0.30 | % | 0.07 | % | 0.05 | % | ||||||||
Allowance
for loan losses to total loans
|
1.10 | % | 1.11 | % | 1.11 | % | 1.11 | % |
Required
|
Actual
|
Excess
|
||||||||||
Risk-based
Capital
|
||||||||||||
Tier
1
|
4.00 | % | 11.39 | % | 7.39 | % | ||||||
Total
|
8.00 | % | 12.41 | % | 4.41 | % | ||||||
Leverage
Ratio
|
4.00 | % | 8.82 | % | 4.82 | % |
Item
1A.
|
Risk
Factors
|
Item
6.
|
Exhibits
|
|
(a)
|
Exhibits
|
Date:
|
May
11, 2007
|
By:
|
/s/
Paul Van
Ostenbridge
|
|
Paul
Van Ostenbridge
|
||||
President
and Chief Executive
|
||||
Officer
|
||||
(authorized
officer on behalf
|
||||
of
registrant)
|
||||
Date:
|
May
11, 2007
|
By:
|
/s/
Julie E. Holland
|
|
Julie
E. Holland
|
||||
Senior
Vice President and Treasurer
|
||||
(principal
accounting officer)
|
EXHIBIT
NUMBER
|
DESCRIPTION
|
|
Certification
of Paul Van Ostenbridge required by Rule 13a-14(a) or Rule
15d-14(a)
|
||
Certification
of Julie Holland required by Rule 13a-14(a) or Rule
15d-14(a)
|
||
Certification
of Paul Van Ostenbridge and Julie Holland required by Rule 13a-14(b)
or
Rule 15d-14(b) and Section 906 of the Sarbanes-Oxley Act of 2002,
18
U.S.C. Section 1350
|