- Net interest income increased $193,000 to $5.4 million for the quarter ended September 30, 2012 from $5.2 million for the quarter ended September 30, 2011. The increase in average loan balances, partially offset by the narrowing of the net interest spread and margin, led to an increase in net interest income when compared to the quarters ended September 30, 2012 and 2011.
- Net interest spread decreased 13 basis points to 3.70% for the quarter ended September 30, 2012 from 3.83% for the quarter ended September 30, 2011. Net interest margin decreased 16 basis points to 3.80% for the quarter ended September 30, 2012, compared to 3.96% for the quarter ended September 30, 2011. Despite the positive effects on net interest income from increased volume and a lower cost of funds, declines in the yields on interest-earning assets resulted in our net interest spread and net interest margin narrowing when comparing the quarters ended September 30, 2012 and 2011 respectively. Although the Company has benefited from re-pricing its interest-bearing liabilities in the continuing historically low interest rate environment, the average interest rates earned on our loans and investments have similarly continued to re-price into lower yields.
- The provision for loan losses totaled $444,000 and $474,000 for the quarters ended September 30, 2012 and 2011, respectively. The allowance for loan losses totaled $6.5 million at September 30, 2012 compared to $6.2 million at June 30, 2012, and $5.5 million at September 30, 2011. The level of the allowance for loan losses to total loans receivable increased to 1.91% at September 30, 2012 from 1.86% at June 30, 2012, and 1.75% at September 30, 2011.
- Net charge-offs totaled $85,000 and $90,000 for the quarters ended September 30, 2012 and 2011, respectively, a decrease of $5,000.
- Nonperforming loans decreased by $127,000, or 1.8%, to $6.9 million at September 30, 2012 from $7.0 million at June 30, 2012. Nonperforming loans remain high compared to historical levels as a result of adverse changes in the economy and local unemployment, which have been compounded by the extended length of time required to complete foreclosures in New York State.
- Noninterest income increased $65,000, or 5.4%, to $1.3 million for the quarter ended September 30, 2012 from $1.2 million for the quarter ended September 30, 2011, which was primarily due to an increase in service charges on deposits resulting from continued growth in the number of deposit accounts.
- Noninterest expense was flat when comparing the quarters ended September 30, 2012 and 2011 at $3.7 million for both periods. However, salaries and employee benefits increased $66,000, advertising increased $53,000, and service and data processing fees increased $26,000. These increases were offset by a $25,000 decrease in legal and professional fees, a $15,000 decrease in FDIC insurance premiums, and a $92,000 decrease in other expenses. Included in the decreases in other expenses were a $54,000 decrease in debit card expenses and a $41,000 decrease in net foreclosed real estate expenses.
- Total assets of the Company were $600.9 million at September 30, 2012 compared to $590.7 million at June 30, 2012, an increase of $10.2 million, or 1.7%.
- Securities available for sale and held to maturity totaled $220.8 million, or 36.7% of assets, at September 30, 2012 as compared to $233.9 million, or 39.6% of assets, at June 30, 2012, a decrease of $13.1 million or 5.6%.
- Net loans grew by $9.2 million, or 2.8%, to $336.0 million at September 30, 2012 compared to $326.8 million at June 30, 2012. The loan growth experienced during the quarter primarily consisted of $2.4 million in nonresidential real estate loans, $4.5 million in residential mortgage loans, $561,000 in home equity loans, $1.3 million in construction loans, and $580,000 in consumer and commercial loans, and was partially offset by a $359,000 increase in the allowance for loan losses.
- Total deposits increased $24.2 million, or 4.7% to $536.1 million at September 30, 2012 from $511.9 million at June 30, 2012. This increase was primarily the result of a $32.6 million increase in balances at the Company’s Commercial Bank subsidiary due primarily to the annual collection of taxes by several local school districts.
- The Company had no overnight borrowings with the Federal Home Loan Bank at September 30, 2012 compared to $14.0 million of such borrowings at June 30, 2012.
- Total shareholders’ equity increased $1.2 million to $53.9 million, or 9.0% of total assets, at September 30, 2012, from total equity of $52.7 million, or 8.9% of total assets, at June 30, 2012.
|At or for the Quarter|
|Ended September 30,|
|In thousands, except share and per share data|
|Net interest income||5,392||5,199|
|Provision for loan losses||444||474|
|Income before taxes||2,554||2,281|
|Weighted average shares outstanding||4,183,932||4,145,828|
|Weighted average diluted shares outstanding||4,221,451||4,190,151|
|Dividends declared per share 2||$0.175||$0.175|
|Selected Financial Ratios|
|Return on average assets||1.20%||1.10%|
|Return on average equity||13.28%||12.41%|
|Net interest rate spread||3.70%||3.83%|
|Net interest margin||3.80%||3.96%|
|Efficiency ratio 1||55.06%||57.04%|
|Non-performing assets to total assets||1.18%||1.35%|
|Non-performing loans to net loans||2.05%||2.37%|
|Allowance for loan losses to non-performing loans||94.86%||75.05%|
|Allowance for loan losses to total loans||1.91%||1.75%|
|Shareholders’ equity to total assets||8.96%||8.90%|
|Dividend payout ratio 2||41.67%||48.61%|
|Book value per share||$12.87||$11.94|
|As of September 30, 2012||As of June 30, 2012|
|Dollars (In thousands)|
|Total cash and cash equivalents||$22,919||$7,742|
|Securities- available for sale, at fair value||81,824||87,528|
|Securities- held to maturity, at amortized cost||138,970||146,389|
|Federal Home Loan Bank stock, at cost||1,114||1,744|
|Gross loans receivable||342,023||332,450|
|Less: Allowance for loan losses||(6,536)||(6,177)|
|Unearned origination fees and costs, net||525||478|
|Net loans receivable||336,012||326,751|
|Premises and equipment||14,750||14,899|
|Accrued interest receivable||2,836||2,688|
|Foreclosed real estate||200||260|
|Prepaid expenses and other assets||2,307||2,655|
|Liabilities and shareholders’ equity|
|Noninterest bearing deposits||$48,993||$52,783|
|Interest bearing deposits||487,150||459,154|
|Borrowings from FHLB, short term||---||14,000|
|Borrowings from FHLB, long term||7,000||7,000|
|Accrued expenses and other liabilities||3,920||5,055|
|Total shareholders’ equity||53,869||52,664|
|Total liabilities and shareholders’ equity||$600,932||$590,656|
|Common shares outstanding||4,184,671||4,182,671|