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(a)
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Not Applicable.
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(b)
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Not Applicable.
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(c)
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Not Applicable.
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(d)
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Exhibits.
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Exhibit No.
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Description
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1)
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No annual loss reported in net income per share before extraordinary items over the past 10 years;
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2)
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2011 annual reported net income per share before extraordinary items equal to or greater than peak
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3)
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Consecutive increases in net income per share before extraordinary items since 2009.
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·
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Net interest income increased $1.0 million to $15.6 million for the nine months ended March 31, 2012 compared to $14.6 million for the nine months ended March 31, 2011, and increased $242,000 to $5.2 million for the quarter ended March 31, 2012 compared to $4.9 million for the quarter ended March 31, 2011. The increase in average balances of loans and securities, along with a decrease in rates paid on deposit accounts, primarily led to an increase in net interest income when comparing the nine months and quarters ended March 31, 2012 and 2011.
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·
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Net interest rate spread increased 8 basis points to 3.78% for the nine months ended March 31, 2012 from 3.70% for the nine months ended March 31, 2011, and increased 13 basis points to 3.74% for the nine months ended March 31, 2012 from 3.61% for the quarter ended March 31, 2011. Net interest margin increased 4 basis points to 3.90% for the nine months ended March 31, 2012 from 3.86% for the nine months ended March 31, 2011, and increased 10 basis points to 3.85% for the quarter ended March 31, 2012 as compared to 3.75% for the quarter ended March 31, 2011. The increases in spread and margin were primarily due to the growth in lower costing deposits, resulting in a decrease in rates paid on total deposits.
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·
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The provision for loan losses totaled $1.4 million and $1.2 million for the nine months ended March 31, 2012 and 2011, respectively, an increase of $258,000, or 21.9%. The provision for loan losses totaled $541,000 and $343,000 for the quarters ended March 31, 2012 and 2011, respectively.
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·
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The allowance for loan losses totaled $6.0 million at March 31, 2012 compared to $4.9 million at March 31, 2011. The allowance for loan losses totaled $5.1 million at June 30, 2011. The level of allowance for loan losses to total loans receivable increased to 1.88% at March 31, 2012 from 1.62% at March 31, 2011, and 1.66% at June 30, 2011.
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·
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Net charge-offs totaled $539,000 and $327,000 for the nine months ended March 31, 2012 and 2011, respectively, an increase of $212,000.
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·
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Nonperforming loans increased by $539,000, or 8.6%, to $6.8 million at March 31, 2012 from $6.3 million at June 30, 2011. This growth has resulted from adverse changes in the economy and increases in local unemployment, which were compounded by the extended length of time required to complete the foreclosure process in New York State.
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·
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Noninterest income increased $36,000 and $75,000 when comparing the nine months and quarters ended March 31, 2012 and 2011, respectively. Noninterest income totaled $3.6 million and $1.2 million for the nine months and quarter ended March 31, 2012, respectively. The Company recorded a net gain on sale of investments during the nine months ended March 31, 2012 totaling $11,000, and a net gain on sale of investments during the nine months and three months ended March 31, 2011 totaling $233,000 and $21,000 respectively. Excluding these items, noninterest income increased $258,000 and $96,000 when comparing the nine months and quarters ended March 31, 2012 and 2011, respectively. These increases were primarily the result of higher service charges on deposit accounts and higher debit card fees due to growth in the number of deposit accounts.
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·
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Noninterest expense increased $86,000 and decreased $95,000 when comparing the nine months and quarters ended March 31, 2012 and 2011, respectively. The year-to-date increase was primarily due to an increase in legal and professional fees, service and data processing fees, equipment and furniture expense, computer software, supplies & support, and other expenses. The increase in legal and professional fees of $103,000 when comparing the nine months ended March 31, 2012 and 2011, respectively, related to loans in process of foreclosure and increased fees for consulting services related to the implementation of strategic objectives. Included in the increase in service and data processing fees of $47,000 when comparing the nine months ended March 31, 2012 and 2011, respectively, were increased costs associated with the increase in the number of accounts with debit cards. The increase in other expenses was the result of the recognition of a loss on foreclosed assets of $153,000 for the nine months ended March 31, 2012. These increases were partially offset by decreases in FDIC insurance premiums of $237,000 and $108,000 when comparing the nine months and quarters ended March 31, 2012 and 2011, respectively. The decrease in FDIC insurance premiums was the result of regulatory changes in the method of calculating the premiums.
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·
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Total assets of the Company were $578.7 million at March 31, 2012 compared to $547.5 million at June 30, 2011, an increase of $31.2 million, or 5.7%.
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·
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Securities available for sale and held to maturity totaled $213.6 million, or 36.9% of assets, at March 31, 2012, as compared to $214.3 million, or 39.1% of assets, at June 30, 2011, a decrease of $645,000.
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·
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Net loans grew by $11.1 million, or 3.7%, to $312.1 million at March 31, 2012 compared to $301.0 million at June 30, 2011. The increase in loans was primarily in nonresidential real estate and commercial installment loans, which generally carry higher yields than residential real estate loans.
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·
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Total deposits increased to $514.6 million at March 31, 2012 from $469.9 million at June 30, 2011, an increase of $44.7 million, or 9.5%. This increase was primarily the result of an increase in balances at the Company’s Commercial Bank subsidiary of $32.6 million due primarily to the annual collection of taxes.
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·
|
As a result of the increase in deposits, the Company repaid its overnight borrowings with the Federal Home Loan Bank. Borrowings decreased $17.3 million from $26.3 million at June 30, 2011 to $9.0 million at March 31, 2012.
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·
|
Total shareholders’ equity was $51.8 million at March 31, 2012, or 8.9% of total assets.
|
|
At or for the Nine
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At or for the Three
|
|||||||||||||||
|
Months Ended March 31,
|
Months Ended March 31,
|
|||||||||||||||
|
2012
|
2011
|
2012
|
2011
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|||||||||||||
|
Dollars In thousands,
except share and per share data
|
||||||||||||||||
|
Interest income
|
$ | 18,362 | $ | 18,041 | $ | 5,999 | $ | 5,999 | ||||||||
|
Interest expense
|
2,778 | 3,429 | 837 | 1,079 | ||||||||||||
|
Net interest income
|
15,584 | 14,612 | 5,162 | 4,920 | ||||||||||||
|
Provision for loan losses
|
1,437 | 1,179 | 541 | 343 | ||||||||||||
|
Noninterest income
|
3,599 | 3,563 | 1,177 | 1,102 | ||||||||||||
|
Noninterest expense
|
11,147 | 11,061 | 3,721 | 3,816 | ||||||||||||
|
Income before taxes
|
6,599 | 5,935 | 2,077 | 1,863 | ||||||||||||
|
Tax provision
|
2,112 | 2,020 | 594 | 624 | ||||||||||||
|
Net Income
|
$ | 4,487 | $ | 3,915 | $ | 1,483 | $ | 1,239 | ||||||||
|
Basic EPS
|
$ | 1.08 | $ | 0.95 | $ | 0.36 | $ | 0.30 | ||||||||
|
Weighted average
shares outstanding
|
4,150,978 | 4,131,052 | 4,159,093 | 4,142,160 | ||||||||||||
|
Diluted EPS
|
$ | 1.07 | $ | 0.94 | $ | 0.35 | $ | 0.30 | ||||||||
|
Weighted average
diluted shares outstanding
|
4,192,567 | 4,162,716 | 4,197,430 | 4,172,127 | ||||||||||||
|
Dividends declared per share 2
|
$ | 0.525 | $ | 0.725 | $ | 0.175 | $ | 0.175 | ||||||||
|
Selected Financial Ratios
|
||||||||||||||||
|
Return on average assets
|
1.08 | % | 0.99 | % | 1.06 | % | 0.91 | % | ||||||||
|
Return on average equity
|
11.99 | % | 11.40 | % | 11.59 | % | 10.71 | % | ||||||||
|
Net interest rate spread
|
3.78 | % | 3.70 | % | 3.74 | % | 3.61 | % | ||||||||
|
Net interest margin
|
3.90 | % | 3.86 | % | 3.85 | % | 3.75 | % | ||||||||
|
Efficiency ratio1
|
58.11 | % | 60.86 | % | 58.70 | % | 63.37 | % | ||||||||
|
Non-performing assets
to total assets
|
1.25 | % | 1.23 | % | ||||||||||||
|
Non-performing loans
to net loans
|
2.19 | % | 2.14 | % | ||||||||||||
|
Allowance for loan losses to
non-performing loans
|
87.33 | % | 76.80 | % | ||||||||||||
|
Allowance for loan losses to
total loans
|
1.88 | % | 1.62 | % | ||||||||||||
|
Shareholders’ equity to total assets
|
8.95 | % | 8.34 | % | ||||||||||||
|
Dividend payout ratio2
|
48.61 | % | 76.32 | % | ||||||||||||
|
Book value per share
|
$ | 12.42 | $ | 11.27 | ||||||||||||
|
As of March 31, 2012
|
As of June 30, 2011
|
|||||||
|
Dollars In thousands
|
||||||||
|
Assets
|
||||||||
|
Total cash and cash equivalents
|
$ | 30,876 | $ | 9,966 | ||||
|
Securities- available for sale, at fair value
|
74,205 | 90,117 | ||||||
|
Securities- held to maturity, at amortized cost
|
139,444 | 124,177 | ||||||
|
Federal Home Loan Bank stock, at cost
|
1,138 | 1,916 | ||||||
|
Gross loans receivable
|
317,675 | 305,620 | ||||||
|
Less: Allowance for loan losses
|
(5,967 | ) | (5,069 | ) | ||||
|
Unearned origination fees and costs, net
|
414 | 495 | ||||||
|
Net loans receivable
|
312,122 | 301,046 | ||||||
|
Premises and equipment
|
15,035 | 15,407 | ||||||
|
Accrued interest receivable
|
2,802 | 2,716 | ||||||
|
Foreclosed real estate
|
410 | 443 | ||||||
|
Prepaid expenses and other assets
|
2,648 | 1,737 | ||||||
|
Total assets
|
$ | 578,680 | $ | 547,525 | ||||
|
Liabilities and shareholders’ equity
|
||||||||
|
Noninterest bearing deposits
|
$ | 49,807 | $ | 49,313 | ||||
|
Interest bearing deposits
|
464,790 | 420,584 | ||||||
|
Total deposits
|
514,597 | 469,897 | ||||||
|
Borrowings from FHLB, short term
|
--- | 14,300 | ||||||
|
FHLB borrowings, long term
|
9,000 | 12,000 | ||||||
|
Accrued expenses and other liabilities
|
3,315 | 3,247 | ||||||
|
Total liabilities
|
526,912 | 499,444 | ||||||
|
Total shareholders’ equity
|
51,768 | 48,081 | ||||||
|
Total liabilities and shareholders’ equity
|
$ | 578,680 | $ | 547,525 | ||||
|
Common shares outstanding
|
4,166,854 | 4,145,828 | ||||||
|
Treasury shares
|
138,816 | 159,842 | ||||||