x
|
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGEACT OF
1934
|
|
OR
|
o
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TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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UNITED
STATES
(State
or other jurisdiction of incorporation
or organization)
|
06-1786701
(I.R.S.
Employer Identification No.)
|
325
Hamilton Avenue, White Plains, New York
(Address
of principal executive offices)
|
10601
(Zip
Code)
|
Title of each class
|
Name of each exchange on which
registered
|
|||
Common
Stock, par value $0.01 per share
|
The
NASDAQ Stock Market LLC
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Large
accelerated filer o
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Accelerated
filer
o
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Non-accelerated filer o (Do not check if a smaller reporting company) |
Smaller
reporting company x
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Part
I
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Page
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Item
1.
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2
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Item
1A.
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18
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Item
1B.
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23
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Item
2.
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24
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Item
3.
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25
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Item
4.
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25
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Part
II
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Item
5.
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25
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Item
6.
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26
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Item
7.
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28
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Item
7A.
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50
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Item
8.
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50
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Item
9.
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50
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Item
9A(T).
|
50
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Item
9B.
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51
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Part
III
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Item
10.
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51
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Item
11.
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51
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Item
12.
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51
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Item
13.
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52
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Item
14.
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52
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Part
IV
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||
Item
15.
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53
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Item
1.
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BUSINESS
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Name
|
Position
|
|||
Kenneth
A. Martinek
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President
and Chief Executive Officer of the MHC, the Company and the
Bank
|
|||
Salvatore
Randazzo
|
Executive
Vice President and Chief Financial Officer of the MHC, the Company and the
Bank
|
|||
Susan
Barile
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Executive
Vice President and Chief Mortgage Officer of the
Bank
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ITEM 1B.
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UNRESOLVED
STAFF COMMENTS
|
ITEM 2.
|
PROPERTIES
|
Location
|
Year
Opened
|
Date
of Lease
Expiration
|
Owned/
Leased
|
Net
Book Value
|
||||||
(Dollars
in thousands)
|
||||||||||
Corporate
Headquarters and Main Office:
|
||||||||||
325
Hamilton Avenue
White
Plains, New York 10601
|
1994
|
N/A
|
Owned
|
$ | 1,027 | |||||
Branch
Offices:
|
||||||||||
1470
First Avenue
New
York, NY 10021(1)
|
2006
|
04/30/2011
|
Leased
|
152 | ||||||
590
East 187th Street
Bronx,
New York 10458
|
1972
|
N/A
|
Owned
|
517 | ||||||
2047
86th Street
Brooklyn,
New York 11214
|
1988
|
N/A
|
Owned
|
883 | ||||||
242
West 23rd Street (2)
New
York, NY 10011
|
1996
|
N/A
|
Owned/Leased
|
967 | ||||||
1751
Second Avenue
New
York, NY 10128
|
1978
|
09/30/2015
|
Leased
|
36 | ||||||
Other
Properties:
|
||||||||||
300
Hamilton Avenue
White
Plains, New York 10601
|
2000
|
05/31/2010
|
Leased
|
52 | ||||||
1353-55
First Avenue
New
York, NY 10021(3)
|
1946
|
2109
|
Leased
|
- | ||||||
40
Grove Street (4)
Wellesley,
Massachusetts 02482
|
2004
|
02/28/2009
|
Leased
|
1 | ||||||
830
Post Road East
Westport,
Connecticut 06880
|
2007
|
4/30/2010
|
Leased
|
- |
(1)
|
The
Bank has temporarily relocated its branch office at 1353-55 First Avenue
to this property due to the sale and renovation of the building located at
1353-55 First Avenue. See footnote 3
below.
|
(2)
|
This
property is owned by us, but is subject to a 99 year ground lease, the
term of which expires in 2084.
|
(3)
|
In
June 2007, the Bank sold this building and temporarily relocated its
branch office located at 1353-55 First Avenue to 1470 First Avenue, New
York, New York, while 1353-55 First Avenue is being
renovated. On June 30, 2007, the Bank entered into a 99 year
lease agreement for office space on the first floor of the building at
1353-55 First Avenue so that the Bank may continue to operate a branch
office at this location after the building has been
renovated. The lease will commence upon completion of
construction at 1353-55 First Avenue, which is presently expected to be in
2011.
|
(4)
|
The
loan production office at this location was relocated to Danvers,
Massachusetts on March 6, 2009. The Bank is scheduled to open a
full service branch at the Danvers location in April 2009. In
addition, the Bank expects to open a full service branch in Plymouth,
Massachusetts in the second quarter of 2009. The Bank will own
the properties at both new
locations.
|
ITEM 3.
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LEGAL
PROCEEDINGS
|
ITEM 5.
|
MARKET
FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITIES
|
Dividends
|
High
|
Low
|
||||||||||
2008:
|
||||||||||||
First
Quarter
|
$ | 0.03 | $ | 12.50 | $ | 11.40 | ||||||
Second
Quarter
|
0.03 | 11.98 | 11.24 | |||||||||
Third
Quarter
|
0.03 | 11.47 | 8.00 | |||||||||
Fourth
Quarter
|
0.03 | 9.51 | 6.00 | |||||||||
2007:
|
||||||||||||
First
Quarter
|
N/A | $ | 12.47 | $ | 11.50 | |||||||
Second
Quarter
|
N/A | 12.60 | 11.35 | |||||||||
Third
Quarter
|
$ | 0.03 | 12.18 | 9.25 | ||||||||
Fourth
Quarter
|
0.03 | 12.89 | 10.00 | |||||||||
ITEM 6.
|
SELECTED
FINANCIAL DATA
|
At
or For the Years Ended December 31,
|
||||||||||||||||||||
2008
|
2007
|
2006
|
2005
|
2004
|
||||||||||||||||
(Dollars
in thousands, except per share data)
|
||||||||||||||||||||
Financial
Condition Data:
|
||||||||||||||||||||
Total
assets
|
$ | 424,228 | $ | 343,895 | $ | 288,417 | $ | 238,821 | $ | 237,300 | ||||||||||
Cash
and cash equivalents
|
36,534 | 39,146 | 36,749 | 27,389 | 48,555 | |||||||||||||||
Securities
held to maturity
|
2,078 | 2,875 | 27,455 | 12,228 | 11,395 | |||||||||||||||
Securities
available for sale
|
182 | 320 | 355 | 362 | 473 | |||||||||||||||
Loans
receivable, net
|
363,616 | 283,133 | 201,306 | 190,896 | 167,690 | |||||||||||||||
Bank
owned life insurance
|
8,902 | 8,515 | 8,154 | – | – | |||||||||||||||
Deposits
|
261,430 | 225,978 | 188,592 | 193,314 | 193,617 | |||||||||||||||
Federal
Home Loan Bank advances
|
40,000 | – | – | – | – | |||||||||||||||
Total
stockholders’ equity
|
110,502 | 108,829 | 96,751 | 43,120 | 41,146 | |||||||||||||||
Operating
Data:
|
||||||||||||||||||||
Interest
income
|
$ | 21,947 | $ | 17,602 | $ | 15,348 | $ | 13,652 | $ | 12,885 | ||||||||||
Interest
expense
|
8,550 | 5,918 | 4,493 | 3,110 | 2,494 | |||||||||||||||
Net
interest income
|
13,397 | 11,684 | 10,855 | 10,542 | 10,391 | |||||||||||||||
Provision
for loan losses
|
411 | 338 | – | – | – | |||||||||||||||
Net
interest income after provision for loan losses
|
12,986 | 11,346 | 10,855 | 10,542 | 10,391 | |||||||||||||||
Gain
(loss) on sale of premises and equipment
|
– | 18,962 | (5 | ) | (19 | ) | (136 | ) | ||||||||||||
Noninterest
income
|
1,794 | 805 | 624 | 553 | 559 | |||||||||||||||
Noninterest
expenses
|
11,500 | 9,826 | 8,870 | 7,515 | 8,078 | |||||||||||||||
Income
before income taxes
|
3,280 | 21,287 | 2,604 | 3,561 | 2,736 | |||||||||||||||
Provision
for income taxes
|
1,178 | 9,150 | 1,046 | 1,571 | 1,173 | |||||||||||||||
Net
income
|
$ | 2,102 | $ | 12,137 | $ | 1,558 | $ | 1,990 | $ | 1,563 | ||||||||||
Net
income per share – basic and diluted (1)
|
0.16 | $ | 0.95 | $ | 0.06 | N/A | N/A | |||||||||||||
Dividends
declared per share
|
$ | 0.12 | $ | 0.06 | $ | – | $ | – | $ | – |
(1)
|
The
Company completed its initial public stock offering on July 5,
2006.
|
At
or For the Years Ended December 31,
|
||||||||||||||||||||
2008
|
2007
|
2006
|
2005
|
2004
|
||||||||||||||||
Performance
Ratios:
|
||||||||||||||||||||
Return
on average assets (1)
|
0.54 | % | 3.94 | % | 0.57 | % | 0.83 | % | 0.66 | % | ||||||||||
Return
on average equity (1)
|
1.91 | 11.70 | 2.24 | 4.69 | 3.80 | |||||||||||||||
Interest
rate spread (2)
|
2.73 | 3.13 | 3.65 | 4.27 | 4.36 | |||||||||||||||
Net
interest margin (3)
|
3.63 | 4.09 | 4.24 | 4.55 | 4.58 | |||||||||||||||
Noninterest
expense to average assets
|
2.96 | 3.19 | 3.26 | 3.13 | 3.42 | |||||||||||||||
Efficiency
ratio (1) (4)
|
75.70 | 31.24 | 77.31 | 67.85 | 74.70 | |||||||||||||||
Average
interest-earning assets to average interest-bearing
liabilities
|
138.82 | 146.61 | 133.99 | 120.33 | 119.73 | |||||||||||||||
Average
equity to average assets
|
28.35 | 33.67 | 25.57 | 17.65 | 17.45 | |||||||||||||||
Capital
Ratios - Bank:
|
||||||||||||||||||||
Tangible
capital
|
19.45 | 24.18 | 25.46 | 17.92 | 17.05 | |||||||||||||||
Core
capital
|
19.45 | 24.18 | 25.46 | 17.92 | 17.05 | |||||||||||||||
Total
risk-based capital
|
30.65 | 37.50 | 44.58 | 33.08 | 35.71 | |||||||||||||||
Asset
Quality Ratios:
|
||||||||||||||||||||
Allowance
for loan losses as a percent of total loans
|
0.51 | 0.53 | 0.60 | 0.63 | 0.71 | |||||||||||||||
Allowance
for loan losses as a percent of nonperforming loans
|
57.92 | 65.48 | N/M | N/M | N/M | |||||||||||||||
Net
charge-offs to average outstanding loans during the
period...........................
|
0.01 | 0.02 | 0.00 | 0.00 | 0.00 | |||||||||||||||
Non-performing
loans as a percent of total loans
|
0.88 | 0.80 | 0.00 | 0.00 | 0.00 | |||||||||||||||
Other
Data:
|
||||||||||||||||||||
Number
of:
|
||||||||||||||||||||
Real
estate loans outstanding
|
491 | 485 | 400 | 399 | 364 | |||||||||||||||
Deposit
accounts
|
14,449 | 15,025 | 15,898 | 17,243 | 18,251 | |||||||||||||||
Offices
(5)
|
9 | 9 | 8 | 8 | 7 |
(1)
|
2007
operations included a non-recurring gain of $18,962,000 from the gain on
sale of the building in which our First Avenue branch was
located. If such gain, net of income taxes at the 2007 marginal
income tax rate, were removed, return on average assets, return on average
equity and the efficiency ratio would be 0.43%, 1.28%, and 78.68%,
respectively.
|
(2)
|
Represents
the difference between the weighted average yield on average
interest-earning assets and the weighted average cost of interest-bearing
liabilities.
|
(3)
|
Represents
net interest income as a percent of average interest-earning
assets.
|
(4)
|
Represents
noninterest expense divided by the sum of net interest income and
noninterest income.
|
(5)
|
At
December 31, 2008, includes our main office, our five other full-service
branch offices, our loan production office in Wellesley, Massachusetts,
our investment advisory service office in Westport, Connecticut, and an
office that houses our processing
center.
|
ITEM 7.
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
At
December 31,
|
||||||||||||||||||||||||||||||||||||||||
2008
|
2007
|
2006
|
2005
|
2004
|
||||||||||||||||||||||||||||||||||||
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
|||||||||||||||||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||||||||||||||||||||||
Real
estate:
|
||||||||||||||||||||||||||||||||||||||||
Residential
Real Estate:
|
||||||||||||||||||||||||||||||||||||||||
One-
to four-family
|
$ | 275 | 0.08 | % | $ | 304 | 0.11 | % | $ | 405 | 0.20 | % | $ | 587 | 0.31 | % | $ | 837 | 0.49 | % | ||||||||||||||||||||
Multi-family
(1)
|
186,199 | 51.11 | 138,767 | 48.95 | 110,389 | 54.76 | 100,360 | 52.43 | 99,400 | 58.93 | ||||||||||||||||||||||||||||||
Mixed-use
(1)
|
58,317 | 16.00 | 52,559 | 18.54 | 42,576 | 21.12 | 43,919 | 22.94 | 38,287 | 22.70 | ||||||||||||||||||||||||||||||
Total
residential real estate loans
|
244,791 | 67.19 | 191,630 | 67.60 | 153,370 | 76.08 | 144,866 | 75.68 | 138,524 | 82.12 | ||||||||||||||||||||||||||||||
Non-residential
real estate (1)
|
102,785 | 28.21 | 79,305 | 27.98 | 47,802 | 23.71 | 46,219 | 24.14 | 29,785 | 17.66 | ||||||||||||||||||||||||||||||
Total
real estate
|
347,576 | 95.40 | 270,935 | 95.58 | 201,172 | 99.79 | 191,085 | 99.82 | 168,309 | 99.78 | ||||||||||||||||||||||||||||||
Construction
loans
|
9,025 | 2.48 | 9,456 | 3.34 | – | – | – | – | – | – | ||||||||||||||||||||||||||||||
Commercial
loans
|
7,620 | 2.09 | 2,977 | 1.05 | – | – | – | – | – | – | ||||||||||||||||||||||||||||||
Consumer:
|
||||||||||||||||||||||||||||||||||||||||
Overdraft
lines of credit
|
57 | 0.02 | 69 | 0.02 | 71 | 0.04 | 83 | 0.04 | 96 | 0.06 | ||||||||||||||||||||||||||||||
Passbook
loans
|
57 | 0.01 | 19 | 0.01 | 348 | 0.17 | 268 | 0.14 | 270 | 0.16 | ||||||||||||||||||||||||||||||
Total
consumer loans
|
114 | 0.03 | 88 | 0.03 | 419 | 0.21 | 351 | 0.18 | 366 | 0.22 | ||||||||||||||||||||||||||||||
Total
loans
|
364,335 | 100.00 | % | 283,456 | 100.00 | % | 201,591 | 100.00 | % | 191,436 | 100.00 | % | 168,675 | 100.00 | % | |||||||||||||||||||||||||
Net
deferred loan costs
|
1,146 | 1,166 | 915 | 660 | 215 | |||||||||||||||||||||||||||||||||||
Allowance
for losses
|
(1,865 | ) | (1,489 | ) | (1,200 | ) | (1,200 | ) | (1,200 | ) | ||||||||||||||||||||||||||||||
Loans,
net
|
$ | 363,616 | $ | 283,133 | $ | 201,306 | $ | 190,896 | $ | 167,690 |
(1)
|
Includes
equity lines of credit that we originate on properties on which we hold
the first mortgage.
|
At
December 31, 2008
|
||||||||||||||||||||||||
Residential
Real
Estate
Loans
|
Non-Residential
Real Estate Loans
|
Commercial
Loans
|
Construction
Loans
|
Consumer
and other
Loans
|
Total
Loans
|
|||||||||||||||||||
(In
thousands)
|
||||||||||||||||||||||||
One
year or less
|
$ | 57,162 | $ | 43,111 | $ | 6,878 | $ | 9,025 | $ | 114 | $ | 116,290 | ||||||||||||
More
than one year to five years
|
182,295 | 59,674 | 742 | - | - | 242,711 | ||||||||||||||||||
More
than five years
|
5,334 | - | - | - | - | 5,334 | ||||||||||||||||||
Total
|
$ | 244,791 | $ | 102,785 | $ | 7,620 | $ | 9,025 | $ | 114 | $ | 364,335 |
Fixed
Rates
|
Adjustable
Rates
|
Total
|
||||||||||
(In
thousands)
|
||||||||||||
Residential
real estate:
|
||||||||||||
One-
to four-family
|
$ | 132 | $ | - | $ | 132 | ||||||
Multi-family
|
6,597 | 136,266 | 142,863 | |||||||||
Mixed-use
|
4,061 | 40,573 | 44,634 | |||||||||
Non-residential
real estate
|
2,976 | 56,698 | 59,674 | |||||||||
Construction
loans
|
- | - | - | |||||||||
Commercial
loans
|
742 | - | 742 | |||||||||
Consumer
and other loans
|
- | - | - | |||||||||
Total
|
$ | 14,508 | $ | 233,537 | $ | 248,045 |
2008
|
2007
|
2006
|
2005
|
2004
|
||||||||||||||||
(In
thousands)
|
||||||||||||||||||||
Total
loans at beginning of
period
|
$ | 283,456 | $ | 201,591 | $ | 191,436 | $ | 168,675 | $ | 155,557 | ||||||||||
Loans
originated:
|
||||||||||||||||||||
Residential
real estate:
|
||||||||||||||||||||
One-
to four-family
|
– | – | – | – | – | |||||||||||||||
Multi-family
|
70,450 | 43,376 | 19,409 | 24,551 | 34,939 | |||||||||||||||
Mixed-use
|
6,616 | 16,098 | 7,304 | 9,794 | 11,801 | |||||||||||||||
Non-residential
real estate
|
42,954 | 24,451 | 9,010 | 23,831 | 6,957 | |||||||||||||||
Construction
loans
|
– | – | – | – | – | |||||||||||||||
Commercial
loans
|
4,794 | 3,012 | – | – | – | |||||||||||||||
Consumer
and other loans
|
87 | 17 | 80 | – | 63 | |||||||||||||||
Total
loans originated
|
124,901 | 86,954 | 35,803 | 58,176 | 53,760 | |||||||||||||||
Construction
loan participation purchased
|
5,406 | 11,695 | – | – | – | |||||||||||||||
Permanent
loan participation purchased
|
2,971 | – | – | – | – | |||||||||||||||
Loan
from sale of building
|
– | 16,341 | – | – | – | |||||||||||||||
Deduct:
|
||||||||||||||||||||
Loan
principal repayments
|
44,069 | 32,109 | 25,648 | 35,415 | 40,642 | |||||||||||||||
Loan
sales
|
7,045 | 1,505 | – | – | – | |||||||||||||||
Total
deductions
|
51,114 | 33,614 | 25,648 | 35,415 | 40,642 | |||||||||||||||
Other
increases
|
(1,285 | ) | 489 | – | – | – | ||||||||||||||
Total
loans at end of period
|
$ | 364,335 | $ | 283,456 | $ | 201,591 | $ | 191,436 | $ | 168,675 |
At
December 31,
|
||||||||||||||||||||||||
2008
|
2007
|
2006
|
||||||||||||||||||||||
Amortized
Cost
|
Fair
Value
|
Amortized
Cost
|
Fair
Value
|
Amortized
Cost
|
Fair
Value
|
|||||||||||||||||||
(In
thousands)
|
||||||||||||||||||||||||
Securities
available for sale:
|
||||||||||||||||||||||||
Fannie
Mae common stock
|
$ | 4 | $ | 1 | $ | 4 | $ | 46 | $ | 4 | $ | 72 | ||||||||||||
Mortgage-backed
securities
|
183 | 181 | 273 | 274 | 281 | 283 | ||||||||||||||||||
Total
|
$ | 187 | 182 | $ | 277 | $ | 320 | $ | 285 | $ | 355 | |||||||||||||
Securities
held to maturity:
|
||||||||||||||||||||||||
U.S.
Government and agency securities
|
$ | – | $ | – | $ | – | $ | – | $ | 22,904 | $ | 22,904 | ||||||||||||
Mortgage-backed
securities
|
2,078 | 2,050 | 2,875 | 2,890 | 4,551 | 4,564 | ||||||||||||||||||
Total
|
$ | 2,078 | $ | 2,050 | $ | 2,875 | $ | 2,890 | $ | 27,455 | $ | 27,468 |
One
Year
or
Less
|
More
than
One
Year to
Five
Years
|
More
than
Five
Years to
Ten
Years
|
More
than
Ten
Years
|
Total
|
||||||||||||||||||||||||||||||||||||
Carrying
Value
|
Weighted
Average Yield
|
Carrying
Value
|
Weighted
Average Yield
|
Carrying
Value
|
Weighted
Average Yield
|
Carrying
Value
|
Weighted
Average Yield
|
Carrying
Value
|
Weighted
Average Yield
|
|||||||||||||||||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||||||||||||||||||||||
Securities
available for sale:
|
||||||||||||||||||||||||||||||||||||||||
Fannie
Mae common stock
|
$ | 1 | 0.00 | % | $ | - | - | $ | - | - | $ | - | - | $ | 1 | 0.00 | % | |||||||||||||||||||||||
Mortgage-backed
securities
|
- | - | - | - | - | - | 181 | 4.83 | % | 181 | 4.83 | |||||||||||||||||||||||||||||
Total
securities available for sale
|
$ | 1 | 0.00 | % | $ | - | - | $ | - | - | $ | 181 | 4.83 | % | $ | 182 | 4.73 | % | ||||||||||||||||||||||
Securities
held to maturity:
|
||||||||||||||||||||||||||||||||||||||||
Mortgage-backed
securities
|
$ | - | - | $ | 15 | 8.25 | % | $ | 339 | 4.88 | % | $ | 1,724 | 4.82 | % | $ | 2,078 | 4.85 | % | |||||||||||||||||||||
Total
securities held to maturity
|
$ | - | - | $ | 15 | 8.25 | % | $ | 339 | 4.88 | % | $ | 1,724 | 4.82 | % | $ | 2,078 | 4.85 | % |
At
December 31,
|
||||||||||||||||||||||||
2008
|
2007
|
2006
|
||||||||||||||||||||||
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
|||||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||||||
Now
and money market deposit accounts
|
$ | 24,595 | 9.4 | % | $ | 21,839 | 9.6 | % | $ | 21,137 | 11.2 | % | ||||||||||||
Savings
accounts
|
56,987 | 21.8 | 57,346 | 25.4 | 60,755 | 32.2 | ||||||||||||||||||
Noninterest
bearing demand deposits
|
6,209 | 2.4 | 1,745 | 0.8 | 1,439 | 0.8 | ||||||||||||||||||
Certificates
of deposit
|
173,639 | 66.4 | 145,048 | 64.2 | 105,261 | 55.8 | ||||||||||||||||||
Total
|
$ | 261,430 | 100.0 | % | $ | 225,978 | 100.0 | % | $ | 188,592 | 100.0 | % |
Maturity
Period
|
Certificates
of
Deposit
|
|||
(In
thousands)
|
||||
Three
months or less
|
$ | 5,945 | ||
Over
three through six months
|
6,831 | |||
Over
six through twelve months
|
14,130 | |||
Over
twelve months
|
7,855 | |||
Total
|
$ | 34,761 |
At
or for the
Years
Ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
(Dollars
in Thousands)
|
||||||||||||
Federal Home Loan Bank
advances:
|
||||||||||||
Average
balance outstanding during the period
|
$
|
20,620
|
$
|
352
|
$
|
-
|
||||||
Average
interest rate during the period
|
3.55
|
% |
5.97
|
% |
-
|
% | ||||||
Maximum
amount outstanding at any month-end during the period
|
$ |
40,000
|
$
|
4,000
|
$
|
-
|
||||||
Balance
outstanding at end of period
|
40,000
|
-
|
-
|
|||||||||
Weighted
average interest rate at end of period
|
3.04
|
%
|
-
|
%
|
-
|
%
|
Amount
|
Weighted
Average Interest Rate
|
|||||||
Advances
maturing in:
|
||||||||
One
year or less
|
$ | 15,000 | 2.14 | % | ||||
After
one to two years
|
10,000 | 3.58 | % | |||||
After
two to three years
|
5,000 | 3.30 | % | |||||
After
four to five years
|
10,000 | 3.70 | % | |||||
$ | 40,000 | 3.04 | % |
2008
|
2007
|
%
Change
2008/2007
|
||||||||||
(Dollars
in thousands)
|
||||||||||||
Net
income
|
$ | 2,102 | $ | 12,137 | (82.7 | )% | ||||||
Return
on average assets
|
0.54 | % | 3.94 | % | (86.3 | ) | ||||||
Return
on average equity
|
1.91 | 11.70 | (83.7 | ) | ||||||||
Average
equity to average assets
|
28.35 | 33.67 | (15.8 | ) |
Year
Ended December 31,
|
||||||||||||||||||||||||||||||||||||
2008
|
2007
|
2006
|
||||||||||||||||||||||||||||||||||
Average
Balance
|
Interest
and
Dividends
|
Yield/
Cost
|
Average
Balance
|
Interest
and
Dividends
|
Yield/
Cost
|
Average
Balance
|
Interest
and
Dividends
|
Yield/
Cost
|
||||||||||||||||||||||||||||
(Dollars
in Thousands)
|
||||||||||||||||||||||||||||||||||||
Assets:
|
||||||||||||||||||||||||||||||||||||
Interest-earning
assets:
|
||||||||||||||||||||||||||||||||||||
Loans
|
$ | 326,472 | $ | 21,008 | 6.43 | % | $ | 232,496 | $ | 14,894 | 6.41 | % | $ | 200,683 | $ | 12,771 | 6.36 | % | ||||||||||||||||||
Securities
|
4,074 | 201 | 4.93 | 16,664 | 839 | 5.03 | 22,913 | 1,064 | 4.64 | |||||||||||||||||||||||||||
Other
interest-earning assets
|
38,749 | 738 | 1.90 | 36,813 | 1,869 | 5.08 | 32,390 | 1,513 | 4.67 | |||||||||||||||||||||||||||
Total
interest-earning assets
|
369,295 | 21,947 | 5.94 | 285,973 | 17,602 | 6.16 | 255,986 | 15,348 | 6.00 | |||||||||||||||||||||||||||
Allowance
for loan losses
|
(1,558 | ) | (1,362 | ) | (1,200 | ) | ||||||||||||||||||||||||||||||
Noninterest-earning
assets
|
20,967 | 23,535 | 17,145 | |||||||||||||||||||||||||||||||||
Total
assets
|
$ | 388,704 | $ | 308,146 | $ | 271,931 | ||||||||||||||||||||||||||||||
Liabilities
and equity:
|
||||||||||||||||||||||||||||||||||||
Interest-bearing
liabilities:
|
||||||||||||||||||||||||||||||||||||
Interest-bearing
demand
|
$ | 21,817 | $ | 144 | 0.66 | % | $ | 20,704 | $ | 117 | 0.57 | % | $ | 22,363 | 111 | 0.50 | % | |||||||||||||||||||
Savings
and club accounts
|
59,392 | 450 | 0.76 | 58,963 | 415 | 0.70 | 66,951 | 469 | 0.70 | |||||||||||||||||||||||||||
Certificates
of deposit
|
164,196 | 7,224 | 4.50 | 115,032 | 5,365 | 4.66 | 101,732 | 3,913 | 3.85 | |||||||||||||||||||||||||||
Total
interest-bearing deposits
|
245,405 | 7,818 | 3.19 | 194,699 | 5,897 | 3.03 | 191,046 | 4,493 | 2.35 | |||||||||||||||||||||||||||
Borrowings
|
20,620 | 732 | 3.55 | 352 | 21 | 5.97 | – | – | 0.00 | |||||||||||||||||||||||||||
Total
interest-bearing liabilities
|
266,025 | 8,550 | 3.21 | 195,051 | 5,918 | 3.03 | 191,046 | 4,493 | 2.35 | |||||||||||||||||||||||||||
Noninterest-bearing
demand
|
2,646 | 1,753 | 7,806 | |||||||||||||||||||||||||||||||||
Other
liabilities
|
9,850 | 7,583 | 3,559 | |||||||||||||||||||||||||||||||||
Total
liabilities
|
278,521 | 204,387 | 202,411 | |||||||||||||||||||||||||||||||||
Stockholders’
equity
|
110,183 | 103,759 | 69,520 | |||||||||||||||||||||||||||||||||
Total
liabilities and Stockholders’ equity
|
$ | 388,704 | $ | 308,146 | $ | 271,931 | ||||||||||||||||||||||||||||||
Net
interest income
|
$ | 13,397 | $ | 11,684 | $ | 10,855 | ||||||||||||||||||||||||||||||
Interest
rate spread
|
2.73 | 3.13 | 3.65 | |||||||||||||||||||||||||||||||||
Net
interest margin
|
3.63 | 4.09 | 4.24 | |||||||||||||||||||||||||||||||||
Net
interest-earning assets
|
$ | 103,270 | $ | 90,922 | $ | 64,940 | ||||||||||||||||||||||||||||||
Interest-earning
assets to interest- bearing liabilities
|
138.82 | % | 146.61 | % | 133.99 | % |
2008
Compared to 2007
|
2007
Compared to 2006
|
|||||||||||||||||||||||
Increase
(Decrease)
Due
to
|
Increase
(Decrease)
Due
to
|
|||||||||||||||||||||||
Volume
|
Rate
|
Net
|
Volume
|
Rate
|
Net
|
|||||||||||||||||||
(In
thousands)
|
||||||||||||||||||||||||
Interest
and dividend income:
|
||||||||||||||||||||||||
Loans
receivable
|
$ | 6,047 | $ | 67 | $ | 6,114 | $ | 2,037 | $ | 86 | $ | 2,123 | ||||||||||||
Investment
securities
|
(621 | ) | (17 | ) | (638 | ) | (309 | ) | 84 | (225 | ) | |||||||||||||
Other
interest-earning assets
|
94 | (1,225 | ) | (1,131 | ) | 218 | 138 | 356 | ||||||||||||||||
Total
interest-earning assets
|
5,520 | (1,175 | ) | 4,345 | 1,946 | 308 | 2,254 | |||||||||||||||||
Interest
expense:
|
||||||||||||||||||||||||
Interest-bearing
demand deposits
|
7 | 20 | 27 | (9 | ) | 15 | 6 | |||||||||||||||||
Savings
accounts
|
3 | 32 | 35 | (56 | ) | 2 | (54 | ) | ||||||||||||||||
Certificates
of deposit
|
2,179 | (320 | ) | 1,859 | 553 | 900 | 1,453 | |||||||||||||||||
Borrowings
|
723 | (12 | ) | 711 | – | 21 | 21 | |||||||||||||||||
Total
interest-bearing liabilities
|
2,912 | (280 | ) | 2,632 | 488 | 938 | 1,426 | |||||||||||||||||
Net
change in interest income
|
$ | 2,608 | $ | (895 | ) | $ | 1,713 | $ | 1,458 | $ | (630 | ) | $ | 828 |
2008
|
2007
|
%
Change
2008/2007
|
||||||||||
(Dollars
in thousands)
|
||||||||||||
Service
charges
|
$ | 478 | $ | 358 | 33.5 | % | ||||||
Net
gain from premises and equipment
|
- | 18,962 | (100.0 | ) | ||||||||
Earnings
on bank owned life insurance
|
386 | 361 | 6.9 | |||||||||
Investment
advisory fees
|
878 | 69 | 1,172.5 | |||||||||
Other
|
52 | 17 | 205.9 | |||||||||
Total
|
$ | 1,794 | $ | 19,767 | (90.9 | ) |
Year
Ended December 31,
|
||||||||||||
2008
|
2007
|
%
Change
2008/2007
|
||||||||||
(Dollars
in thousands)
|
||||||||||||
Salaries
and employee benefits
|
$ | 5,872 | $ | 5,189 | 13.2 | % | ||||||
Net
occupancy expense of premises
|
1,140 | 1,107 | 3.0 | |||||||||
Equipment
|
517 | 462 | 11.9 | |||||||||
Outside
data processing
|
826 | 650 | 27.1 | |||||||||
Advertising
|
225 | 84 | 167.9 | |||||||||
REO
expenses
|
381 | – | N/M | |||||||||
Service
contracts
|
212 | 205 | 3.2 | |||||||||
Insurance
|
163 | 165 | (1.2 | ) | ||||||||
Audit
and accounting
|
267 | 214 | 24.4 | |||||||||
Directors
compensation
|
287 | 219 | 31.0 | |||||||||
Telephone
|
165 | 167 | (1.0 | ) | ||||||||
Office
supplies and stationary
|
218 | 209 | 4.6 | |||||||||
Director,
officer, and employee expenses
|
269 | 235 | 14.1 | |||||||||
Legal
fees
|
290 | 277 | 4.7 | |||||||||
Other
|
668 | 642 | 4.1 | |||||||||
Total
noninterest expenses
|
$ | 11,500 | $ | 9,826 | 17.0 |
At
December 31,
|
||||||||||||||||||||
2008
|
2007
|
2006
|
2005
|
2004
|
||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||
Nonaccrual
loans:
|
||||||||||||||||||||
Residential
real estate:
|
||||||||||||||||||||
One-
to four-family
|
$ | – | $ | – | $ | – | $ | – | $ | – | ||||||||||
Multi-family
|
261 | 666 | – | – | – | |||||||||||||||
Mixed-use
|
– | – | – | – | – | |||||||||||||||
Non-residential
real estate
|
1,614 | 1,200 | – | – | – | |||||||||||||||
Construction
|
– | – | – | – | – | |||||||||||||||
Consumer
and other loans
|
– | 1 | – | – | – | |||||||||||||||
Total
|
1,875 | 1,867 | – | – | – | |||||||||||||||
Accruing
loans past due 90 days or more:
|
||||||||||||||||||||
Residential
real estate:
|
||||||||||||||||||||
One-
to four-family
|
– | – | – | – | – | |||||||||||||||
Multi-family
|
– | 407 | – | – | – | |||||||||||||||
Mixed-use
|
– | – | – | – | – | |||||||||||||||
Non-residential
real estate
|
– | – | – | – | – | |||||||||||||||
Consumer
and other loans
|
– | – | 2 | – | – | |||||||||||||||
Total
|
– | 407 | 2 | – | – | |||||||||||||||
Total
of nonaccrual and 90 days or more past due loans
|
1,875 | 2,274 | 2 | – | – | |||||||||||||||
Foreclosed
real estate
|
832 | – | – | – | – | |||||||||||||||
Other
nonperforming loans (1)
|
1,345 | – | – | – | – | |||||||||||||||
Total
nonperforming assets
|
4,052 | 2,274 | 2 | – | – | |||||||||||||||
Troubled
debt restructurings
|
– | – | – | – | – | |||||||||||||||
Troubled
debt restructurings and total nonperforming assets
|
$ | 4,052 | $ | 2,274 | $ | 2 | $ | – | $ | – | ||||||||||
Total
nonperforming loans to total loans
|
0.88 | % | 0.80 | % | 0.00 | % | 0.00 | % | 0.00 | % | ||||||||||
Total
nonperforming loans to total assets
|
0.76 | % | 0.66 | % | 0.00 | % | 0.00 | % | 0.00 | % | ||||||||||
Total
nonperforming assets and troubled debt restructurings to total
assets
|
0.96 | % | 0.66 | % | 0.00 | % | 0.00 | % | 0.00 | % |
(1)
|
Other
non-performing loans consist of loans which were not 90 days or more
delinquent, but where management has serious doubts about the borrowers
abilities to comply with contractual loan
terms.
|
At
December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
(In
thousands)
|
||||||||||||
Special
mention assets
|
$ | – | $ | 865 | $ | – | ||||||
Substandard
assets
|
3,220 | 1,866 | – | |||||||||
Doubtful
and loss assets
|
– | – | – | |||||||||
Total
classified assets
|
$ | 3,220 | $ | 2,731 | $ | – |
At
December 31,
|
||||||||||||||||||||||||
2008
|
2007
|
2006
|
||||||||||||||||||||||
30-59
Days
Past
Due
|
60-89
Days
Past
Due
|
30-59
Days
Past
Due
|
60-89
Days
Past
Due
|
30-59
Days
Past
Due
|
60-89
Days
Past
Due
|
|||||||||||||||||||
(In
thousands)
|
||||||||||||||||||||||||
Residential
real estate:
|
||||||||||||||||||||||||
One-
to four-family
|
$ | – | $ | – | $ | – | $ | – | $ | – | $ | – | ||||||||||||
Multi-family
|
– | 1,345 | – | 458 | – | – | ||||||||||||||||||
Mixed-use
|
– | – | – | – | – | – | ||||||||||||||||||
Non-residential
real estate
|
– | – | – | – | – | – | ||||||||||||||||||
Construction
|
– | – | – | – | – | – | ||||||||||||||||||
Commercial
|
– | – | – | – | – | – | ||||||||||||||||||
Consumer
and other loans
|
– | – | 4 | – | – | 2 | ||||||||||||||||||
Total
|
$ | – | $ | 1,345 | $ | 4 | $ | 458 | $ | – | $ | 2 |
At
December 31,
|
||||||||||||||||||||||||||||||||||||
2008
|
2007
|
2006
|
||||||||||||||||||||||||||||||||||
Amount
|
%
of
Allowance
to
Total
Allowance
|
%
of
Loans
in
Category
to
Total
Loans
|
Amount
|
%
of
Allowance
to
Total
Allowance
|
%
of
Loans
in
Category
to
Total
Loans
|
Amount
|
%
of
Allowance
to
Total
Allowance
|
%
of
Loans
in
Category
to
Total
Loans
|
||||||||||||||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||||||||||||||||||
Residential
real estate:
|
||||||||||||||||||||||||||||||||||||
One-
to four-family
|
$ | – | 0.0 | % | 0.1 | % | $ | – | 0.0 | % | 0.1 | % | $ | – | 0.0 | % | 0.2 | % | ||||||||||||||||||
Multi-family
|
604 | 32.4 | 51.1 | 472 | 31.7 | 49.0 | 395 | 32.9 | 54.8 | |||||||||||||||||||||||||||
Mixed-use
|
319 | 17.1 | 16.0 | 250 | 16.8 | 18.5 | 251 | 20.9 | 21.1 | |||||||||||||||||||||||||||
Non-residential
real estate
|
841 | 45.1 | 28.2 | 691 | 46.4 | 28.0 | 554 | 46.2 | 23.7 | |||||||||||||||||||||||||||
Construction
|
21 | 1.1 | 2.5 | 50 | 3.4 | 3.3 | – | 0.0 | 0.0 | |||||||||||||||||||||||||||
Commercial
|
80 | 4.3 | 2.1 | 25 | 1.7 | 1.1 | – | 0.0 | 0.0 | |||||||||||||||||||||||||||
Consumer
and other loans
|
– | 0.0 | 0.0 | – | 0.0 | 0.0 | – | 0.0 | 0.2 | |||||||||||||||||||||||||||
Total
allowance for loan losses
|
$ | 1,865 | 100.0 | % | 100.0 | % | $ | 1,489 | 100.0 | % | 100.0 | % | $ | 1,200 | 100.0 | % | 100.0 | % |
At
December 31,
|
||||||||||||||||||||||||
2005
|
2004
|
|||||||||||||||||||||||
Amount
|
%
of
Allowance
to
Total
Allowance
|
%
of
Loans
in
Category
to
Total
Loans
|
Amount
|
%
of
Allowance
to
Total
Allowance
|
%
of
Loans
in
Category
to
Total
Loans
|
|||||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||||||
Residential
real estate:
|
||||||||||||||||||||||||
One-
to four-family
|
$ | – | 0.0 | % | 0.3 | % | $ | 2 | 0.2 | % | 0.5 | % | ||||||||||||
Multi-family
|
443 | 36.9 | 52.4 | 520 | 43.3 | 58.9 | ||||||||||||||||||
Mixed-use
|
277 | 23.1 | 22.9 | 290 | 24.2 | 22.7 | ||||||||||||||||||
Non-residential
real estate
|
480 | 40.0 | 24.2 | 388 | 32.3 | 17.7 | ||||||||||||||||||
Construction
|
– | 0.0 | 0.0 | – | 0.0 | 0.0 | ||||||||||||||||||
Commercial
|
– | 0.0 | 0.0 | – | 0.0 | 0.0 | ||||||||||||||||||
Consumer
and other loans
|
– | 0.0 | 0.2 | – | 0.0 | 0.2 | ||||||||||||||||||
Total
allowance for loan losses
|
$ | 1,200 | 100.0 | % | 100.0 | % | $ | 1,200 | 100.0 | % | 100.0 | % |
Year
Ended December 31,
|
||||||||||||||||||||
2008
|
2007
|
2006
|
2005
|
2004
|
||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||
Allowance
at beginning of period
|
$ | 1,489 | $ | 1,200 | $ | 1,200 | $ | 1,200 | $ | 1,200 | ||||||||||
Provision
for loan losses
|
411 | 338 | – | – | – | |||||||||||||||
Charge
offs:
|
||||||||||||||||||||
Residential
real estate:
|
||||||||||||||||||||
One-
to four-family
|
– | – | – | – | – | |||||||||||||||
Multi-family
|
– | – | – | – | – | |||||||||||||||
Mixed-use
|
(35 | ) | (49 | ) | – | – | – | |||||||||||||
Non-residential
real estate
|
– | – | – | – | – | |||||||||||||||
Construction
|
– | – | – | – | – | |||||||||||||||
Consumer
and other loans
|
– | – | – | – | – | |||||||||||||||
Total
charge-offs
|
(35 | ) | (49 | ) | – | – | – | |||||||||||||
Recoveries:
|
||||||||||||||||||||
Residential
real estate:
|
||||||||||||||||||||
One-
to four-family
|
– | – | – | – | – | |||||||||||||||
Multi-family
|
– | – | – | – | – | |||||||||||||||
Mixed-use
|
– | – | – | – | – | |||||||||||||||
Non-residential
real estate
|
– | – | – | – | – | |||||||||||||||
Construction
|
– | – | – | – | – | |||||||||||||||
Consumer
and other loans
|
– | – | – | – | – | |||||||||||||||
Total
recoveries
|
– | – | – | – | – | |||||||||||||||
Net
charge-offsNet charge-offs
|
(35 | ) | (49 | ) | – | – | – | |||||||||||||
Allowance
at end of period
|
$ | 1,865 | $ | 1,489 | $ | 1,200 | $ | 1,200 | $ | 1,200 | ||||||||||
Allowance
to nonperforming loans
|
57.92 | % | 65.48 | % | N/M | N/M | N/M | |||||||||||||
Allowance
to total loans outstanding at the end of the period
|
0.51 | % | 0.53 | % | 0.60 | % | 0.63 | % | 0.71 | % | ||||||||||
Net
charge-offs to average loans outstanding during the period
|
0.01 | % | 0.02 | % | 0.00 | % | 0.00 | % | 0.00 | % |
Net
Portfolio Value
(Dollars
in thousands)
|
Net
Portfolio Value
as
% of
Portfolio
Value of Assets
|
|||||||||||||||||||
Basis
Point (“bp”)
Change
in Rates
|
$
Amount
|
$
Change
|
%
Change
|
NPV
Ratio
|
Change
|
|||||||||||||||
300
|
$ | 89,838 | $ | (3,860 | ) | (4 | )% | 21.46 | % | (26 | ) bp | |||||||||
200
|
91,315 | (2,382 | ) | (3 | )% | 21.59 | % | (13 | ) bp | |||||||||||
100
|
92,562 | (1,136 | ) | (1 | )% | 21.67 | % | (5 | ) bp | |||||||||||
50
|
93,146 | (551 | ) | (1 | )% | 21.70 | % | (2 | ) bp | |||||||||||
0
|
93,698 | - | 21.72 | % | ||||||||||||||||
(50)
|
94,182 | 485 | 1 | % | 21.73 | % | 1 | bp | ||||||||||||
(100)
|
93,972 | 275 | 0 | % | 21.63 | % | (9 | ) bp |
Year
Ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
(In
thousands)
|
||||||||||||
Investing
activities:
|
||||||||||||
Loans
disbursed or closed
|
$ | (124,901 | ) | $ | (86,954 | ) | $ | (35,803 | ) | |||
Purchase
of loan participations
|
(8,377 | ) | (11,695 | ) | – | |||||||
Loan
principal repayments
|
44,069 | 32,109 | 25,648 | |||||||||
Sale
of loans
|
7,045 | 1,505 | – | |||||||||
Proceeds
from maturities and principal repayments of securities
|
882 | 29,676 | 35,682 | |||||||||
Purchases
of securities
|
– | (5,000 | ) | (50,335 | ) | |||||||
Purchase
of bank owned life insurance
|
– | – | (8,000 | ) | ||||||||
Purchase
of FHLB-NY stock
|
(1,937 | ) | (15 | ) | (42 | ) | ||||||
Proceeds
from sale of premises and equipment
|
– | 9,082 | – | |||||||||
Purchases
of premises and equipment
|
(396 | ) | (198 | ) | (6,726 | ) | ||||||
Purchase
of business
|
– | (1,384 | ) | – | ||||||||
Financing
activities:
|
||||||||||||
Increase
(decrease) in deposits
|
35,452 | 37,386 | (4,727 | ) | ||||||||
Proceeds
from FHLB-NY advances
|
40,000 | – | – | |||||||||
Initial
stock offering, net of ESOP shares
|
– | – | 52,444 |
ITEM 7A.
|
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
|
ITEM 8.
|
FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA
|
ITEM 9.
|
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
|
ITEM 9A(T)
|
CONTROLS
AND PROCEDURES
|
|
(a)
|
Disclosure
Controls and Procedures
|
|
(b)
|
Internal
Controls Over Financial Reporting
|
|
Management’s
annual report on internal control over financial reporting is incorporated
herein by reference to the Company’s audited Consolidated Financial
Statements in this Annual Report on Form
10-K.
|
|
This
annual report does not include an attestation report of the Company’s
independent registered public accounting firm regarding internal control
over financial reporting. Management’s report was not subject
to attestation by the Company’s independent registered public accounting
firm pursuant to temporary rules of the Securities and Exchange Commission
that permit the Company to provide only management’s report in this annual
report.
|
|
(c)
|
Changes
to Internal Control Over Financial
Reporting
|
ITEM 9B.
|
OTHER
INFORMATION
|
ITEM 10.
|
DIRECTORS,
EXECUTIVE OFFICERS OF THE REGISTRANT AND CORPORATE
GOVERNANCE
|
ITEM 11.
|
EXECUTIVE
COMPENSATION
|
ITEM 12.
|
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDERS MATTERS
|
|
(a)
|
Security
Ownership of Certain Beneficial
Owners
|
|
(b)
|
Security
Ownership of Management
|
|
(c)
|
Changes
in Control
|
|
(d)
|
Equity
Compensation Plan Information
|
ITEM 13.
|
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR
INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL
ACCOUNTANT FEES AND SERVICES
|
|
(1)
|
The
financial statements required in response to this item are incorporated by
reference from Item 8 of this
report.
|
|
(2)
|
All
financial statement schedules are omitted because they are not required or
applicable, or the required information is shown in the consolidated
financial statements or the notes
thereto.
|
|
(3)
|
Exhibits
|
|
3.1
|
Amended
and Restated Charter of Northeast Community Bancorp, Inc.
(1)
|
|
3.2
|
Amended
and Restated Bylaws of Northeast Community Bancorp, Inc.
(2)
|
|
4.1
|
Specimen
Stock Certificate of Northeast Community Bancorp, Inc.
(1)
|
|
10.1
|
Northeast
Community Bank Employee Severance Compensation Plan
(1)
|
|
10.2
|
Northeast
Community Bank Supplemental Executive Retirement Plan and Participation
Agreements with Kenneth A. Martinek and Salvatore Randazzo
(1)*
|
|
10.3
|
Northeast
Community Bancorp, Inc. Employment Agreement for Kenneth A. Martinek and
Salvatore Randazzo (1)*
|
|
10.4
|
Northeast
Community Bank Employment Agreement for Kenneth A. Martinek and Salvatore
Randazzo (1)*
|
|
10.5
|
Employment
Agreement between Northeast Community Bancorp, Inc., Northeast Community
Bank and Susan Barile (3)*
|
|
10.6
|
Northeast
Community Bank Directors’ Retirement Plan
(1)*
|
|
10.7
|
Northeast
Community Bank Directors’ Deferred Compensation Plan
(1)*
|
|
10.8
|
Northeast
Community Bank Executive Incentive Deferral
Plan*(4)
|
|
List
of Subsidiaries
|
|
Consent
of Beard Miller Company LLP
|
|
Rule
13a-14(a)/15d-14(a) Certification of Chief Executive
Officer
|
|
Rule
13a-14(a)/15d-14(a) Certification of Chief Financial
Officer
|
|
Section
1350 Certification of Chief Executive Officer and Chief Financial
Officer
|
|
*
|
Management
contract or compensatory plan, contract or
arrangement.
|
|
(1)
|
Incorporated
herein by reference to the Company’s Registration Statement on Form S-1,
as amended, initially filed with the SEC on March 12,
2006.
|
|
(2)
|
Incorporated
herein by reference to Exhibit 3.2 to the Company’s Current Report on Form
8-K filed with the SEC on October 30,
2007.
|
|
(3)
|
Incorporated
herein by reference to Exhibit 10.1 to the Company’s Quarterly Report on
Form 10-Q for the quarter ended September 30,
2006.
|
|
(4)
|
Incorporated
herein by reference to Exhibit 10.1 to the Company’s Quarterly Report on
Form 10-Q for the quarter ended September 30,
2008.
|
NORTHEAST
COMMUNITY BANCORP, INC.
|
|||
Date:
March 26, 2009
|
By:
|
/s/ Kenneth A. Martinek
|
|
Kenneth
A. Martinek
|
|||
President
and Chief Executive Officer
|
Name
|
Title
|
Date
|
||
/s/ Kenneth A. Martinek
|
President,
Chief Executive Officer
|
March
26, 2009
|
||
Kenneth
A. Martinek
|
and
Director
|
|||
(principal
executive officer)
|
||||
/s/ Salvatore Randazzo
|
Executive
Vice President, Chief
|
March
26, 2009
|
||
Salvatore
Randazzo
|
Financial
Officer and Director
|
|||
(principal
accounting and
|
||||
financial
officer)
|
||||
/s/ Diane B. Cavanaugh
|
Director
|
March
26, 2009
|
||
Diane
B. Cavanaugh
|
||||
/s/ Arthur M. Levine
|
Director
|
March
26, 2009
|
||
Arthur
M. Levine
|
||||
/s/ Charles A. Martinek
|
Director
|
March
26, 2009
|
||
Charles
A. Martinek
|
||||
/s/ John F. McKenzie
|
Director
|
March
26, 2009
|
||
John
F. McKenzie
|
||||
/s/ Linda M. Swan
|
Director
|
March
26, 2009
|
||
Linda
M. Swan
|
||||
/s/ Harry (Jeff) A.S Read
|
Director
|
March
26, 2009
|
||
Harry
(Jeff) A.S. Read
|
||||
/s/ Kenneth H. Thomas
|
Director
|
March
26, 2009
|
||
Kenneth
H. Thomas
|
Northeast Community Bancorp,
Inc.
|
December
31,
|
||||||||
2008
|
2007
|
|||||||
(In
thousands, except share and per share data)
|
||||||||
Assets
|
||||||||
Cash
and amounts due from depository institutions
|
$ | 2,368 | $ | 1,878 | ||||
Interest-bearing
deposits
|
34,166 | 37,268 | ||||||
Cash
and cash equivalents
|
36,534 | 39,146 | ||||||
Certificates
of deposit
|
498 | - | ||||||
Securities
available-for-sale
|
182 | 320 | ||||||
Securities
held-to-maturity
|
2,078 | 2,875 | ||||||
Loans
receivable, net of allowance for loan losses $1,865 and $1,489,
respectively
|
363,616 | 283,133 | ||||||
Premises
and equipment, net
|
4,365 | 4,529 | ||||||
Federal
Home Loan Bank of New York stock, at cost
|
2,350 | 414 | ||||||
Bank
owned life insurance
|
8,902 | 8,515 | ||||||
Accrued
interest receivable
|
1,785 | 1,340 | ||||||
Goodwill
|
1,310 | 1,310 | ||||||
Intangible
assets
|
649 | 710 | ||||||
Real
estate owned
|
832 | - | ||||||
Other
assets
|
1,127 | 1,603 | ||||||
Total
Assets
|
$ | 424,228 | $ | 343,895 | ||||
Liabilities
and Stockholders’ Equity
|
||||||||
Liabilities:
|
||||||||
Deposits:
|
||||||||
Non-interest-bearing
deposits
|
$ | 6,209 | $ | 1,745 | ||||
Interest-bearing
deposits
|
255,221 | 224,233 | ||||||
Total
deposits
|
261,430 | 225,978 | ||||||
Advance
payments by borrowers for taxes and insurance
|
6,624 | 2,884 | ||||||
Federal
Home Loan Bank Advances
|
40,000 | - | ||||||
Accounts
payable and accrued expenses
|
5,191 | 5,577 | ||||||
Note
payable
|
481 | 627 | ||||||
Total
Liabilities
|
313,726 | 235,066 | ||||||
Commitments
and Contingencies
|
- | - | ||||||
Stockholders’
Equity:
|
||||||||
Preferred
stock, $0.01 par value; 1,000,000 shares authorized, none
issued
|
- | - | ||||||
Common
stock, $0.01 par value; 19,000,000 shares authorized; issued and
outstanding: 13,225,000 shares
|
132 | 132 | ||||||
Additional
paid-in capital
|
57,560 | 57,555 | ||||||
Unearned
Employee Stock Ownership Plan (“ESOP”) shares
|
(4,407 | ) | (4,665 | ) | ||||
Retained
earnings
|
57,399 | 55,956 | ||||||
Accumulated
comprehensive loss
|
(182 | ) | (149 | ) | ||||
Total
Stockholders’ Equity
|
110,502 | 108,829 | ||||||
Total
Liabilities and Stockholders’ Equity
|
$ | 424,228 | $ | 343,895 |
Northeast Community Bancorp,
Inc.
|
Years Ended December 31,
|
||||||||
2008
|
2007
|
|||||||
(In thousands, except per share
data)
|
||||||||
Interest
Income:
|
||||||||
Loans
|
$ | 21,008 | $ | 14,894 | ||||
Interest-earning
deposits
|
738 | 1,869 | ||||||
Securities
- taxable
|
201 | 839 | ||||||
Total
Interest Income
|
21,947 | 17,602 | ||||||
Interest
Expense:
|
||||||||
Deposits
|
7,818 | 5,897 | ||||||
Borrowings
|
732 | 21 | ||||||
Total
Interest Expense
|
8,550 | 5,918 | ||||||
Net
Interest Income
|
13,397 | 11,684 | ||||||
Provision
for Loan Losses
|
411 | 338 | ||||||
Net
Interest Income after Provision for Loan Losses
|
12,986 | 11,346 | ||||||
Non-Interest
Income:
|
||||||||
Other
loan fees and service charges
|
478 | 358 | ||||||
Net
gain from premises and equipment
|
- | 18,962 | ||||||
Earnings
on bank owned life insurance
|
386 | 361 | ||||||
Investment
advisory fees
|
878 | 69 | ||||||
Other
|
52 | 17 | ||||||
Total
Non-Interest Income
|
1,794 | 19,767 | ||||||
Non-Interest
Expenses:
|
||||||||
Salaries
and employee benefits
|
5,872 | 5,189 | ||||||
Net
occupancy expense
|
1,140 | 1,107 | ||||||
Equipment
|
517 | 462 | ||||||
Outside
data processing
|
826 | 650 | ||||||
Advertising
|
225 | 84 | ||||||
Real
estate owned expenses
|
381 | - | ||||||
Other
|
2,539 | 2,334 | ||||||
Total
Non-Interest Expenses
|
11,500 | 9,826 | ||||||
Income
before Provision for Income Taxes
|
3,280 | 21,287 | ||||||
Provision
for Income Taxes
|
1,178 | 9,150 | ||||||
Net
Income
|
$ | 2,102 | $ | 12,137 | ||||
Net
Income per Common Share – Basic
|
$ | 0.16 | $ | 0.95 | ||||
Weighted
Average Number of Common Shares Outstanding – Basic
|
12,771 | 12,745 | ||||||
Dividends
Declared per Common Share
|
$ | 0.12 | $ | 0.06 |
Northeast Community Bancorp,
Inc.
|
Common
Stock
|
Additional
Paid-
in Capital
|
Unearned
ESOP Shares
|
Retained
Earnings
|
Accumu-lated
Other Compre-hensive Income (Loss)
|
Total
Equity
|
Comprehensive
Income
|
||||||||||||||||||||||
(In
thousands)
|
||||||||||||||||||||||||||||
Balance
- December 31, 2006
|
$ | 132 | $ | 57,513 | $ | (4,925 | ) | $ | 44,147 | $ | (116 | ) | $ | 96,751 | ||||||||||||||
Comprehensive
income:
|
||||||||||||||||||||||||||||
Net
income
|
- | - | - | 12,137 | - | 12,137 | $ | 12,137 | ||||||||||||||||||||
Unrealized
loss on securities available for sale, net of taxes of
$(10)
|
- | - | - | - | (17 | ) | (17 | ) | (17 | ) | ||||||||||||||||||
Pension
liability – DRP, net of taxes of $(13)
|
- | - | - | - | (16 | ) | (16 | ) | (16 | ) | ||||||||||||||||||
Cash
dividends declared ($0.06 per share)
|
- | - | - | (328 | ) | - | (328 | ) | ||||||||||||||||||||
ESOP
shares earned
|
- | 42 | 260 | - | - | 302 | ||||||||||||||||||||||
Total
Comprehensive Income
|
$ | 12,104 | ||||||||||||||||||||||||||
Balance
- December 31, 2007
|
132 | 57,555 | (4,665 | ) | 55,956 | (149 | ) | 108,829 | ||||||||||||||||||||
Comprehensive
income:
|
||||||||||||||||||||||||||||
Net
income
|
- | - | - | 2,102 | - | 2,102 | $ | 2,102 | ||||||||||||||||||||
Unrealized
loss on securities available for sale, net of taxes of
$(18)
|
- | - | - | - | (30 | ) | (30 | ) | (30 | ) | ||||||||||||||||||
Pension
liability – DRP, net of taxes of $(1)
|
- | - | - | - | (3 | ) | (3 | ) | (3 | ) | ||||||||||||||||||
Cash
dividends declared ($0.12 per share)
|
- | - | - | (659 | ) | - | (659 | ) | ||||||||||||||||||||
ESOP
shares earned
|
- | 5 | 258 | - | - | 263 | ||||||||||||||||||||||
Total
Comprehensive Income
|
$ | 2,069 | ||||||||||||||||||||||||||
Balance
- December 31, 2008
|
$ | 132 | $ | 57,560 | $ | (4,407 | ) | $ | 57,399 | $ | (182 | ) | $ | 110,502 |
Northeast Community Bancorp,
Inc.
|
Years Ended December 31,
|
||||||||
2008
|
2007
|
|||||||
(In
Thousands)
|
||||||||
Cash
Flows from Operating Activities:
|
||||||||
Net
income
|
$ | 2,102 | $ | 12,137 | ||||
Adjustments
to reconcile net income to net cash provided by (used in) operating
activities:
|
||||||||
Net
amortization (accretion) of securities premiums and
discounts
|
5 | (88 | ) | |||||
Provision
for loan losses
|
411 | 338 | ||||||
Provision
for depreciation
|
560 | 589 | ||||||
Net
(accretion) amortization of deferred discounts, fees and
costs
|
151 | (424 | ) | |||||
Amortization
other
|
90 | - | ||||||
Deferred
income tax expense (benefit)
|
(2,679 | ) | 5,053 | |||||
(Gain)
from dispositions of premises and equipment
|
- | (18,962 | ) | |||||
Impairment
losses on real estate owned
|
369 | - | ||||||
Earnings
on bank owned life insurance
|
(386 | ) | (361 | ) | ||||
(Increase)
in accrued interest receivable
|
(445 | ) | (239 | ) | ||||
(Increase)
decrease in other assets
|
474 | (1,080 | ) | |||||
Increase
(decrease) in accrued interest payable
|
(7 | ) | 8 | |||||
Increase
in other liabilities
|
2,317 | 184 | ||||||
ESOP
shares earned
|
263 | 302 | ||||||
Net
Cash Provided by (Used in) Operating Activities
|
3,225 | (2,543 | ) | |||||
Cash
Flows from Investing Activities:
|
||||||||
Purchase
of loans
|
(8,377 | ) | (11,695 | ) | ||||
Net
increase in loans
|
(73,787 | ) | (53,703 | ) | ||||
Purchase
of securities held-to-maturity
|
- | (5,000 | ) | |||||
Principal
repayments on securities available-for-sale
|
89 | 8 | ||||||
Principal
repayments on securities held-to-maturity
|
793 | 29,668 | ||||||
Purchases
of certificates of deposit
|
(498 | ) | - | |||||
Purchase
of Federal Home Loan Bank of New York stock
|
(1,937 | ) | (15 | ) | ||||
Purchases
of premises and equipment
|
(396 | ) | (198 | ) | ||||
Proceeds
from sale of premises and equipment
|
- | 9,082 | ||||||
Purchase
of business
|
- | (1,384 | ) | |||||
Capitalized
costs on real estate owned
|
(82 | ) | - | |||||
Net
Cash (Used in) Investing Activities
|
(84,195 | ) | (33,237 | ) | ||||
Cash
Flows from Financing Activities:
|
||||||||
Net
increase in deposits
|
35,452 | 37,386 | ||||||
Proceeds
from FHLB of NY advances
|
40,000 | - | ||||||
Repayment
of note payable
|
175 | - | ||||||
Increase
in advance payments by borrowers for taxes and insurance
|
3,740 | 955 | ||||||
Cash
dividends paid to minority shareholders
|
(659 | ) | (164 | ) | ||||
Net
Cash Provided by Financing Activities
|
78,358 | 38,177 | ||||||
Net
(Decrease) Increase in Cash and Cash Equivalents
|
(2,612 | ) | 2,397 | |||||
Cash
and Cash Equivalents - Beginning
|
39,146 | 36,749 | ||||||
Cash
and Cash Equivalents - Ending
|
$ | 36,534 | $ | 39,146 |
Northeast Community Bancorp,
Inc.
|
Years Ended December 31,
|
||||||||
2008
|
2007
|
|||||||
(In
Thousands)
|
||||||||
Supplementary
Cash Flows Information:
|
||||||||
Income
taxes paid
|
$ | 1,195 | $ | 4,865 | ||||
Interest
paid
|
$ | 8,557 | $ | 5,910 | ||||
Supplementary
Disclosure of Non-Cash Investing and Financing Activities:
|
||||||||
Loan
made to facilitate the sale of real estate
owned
|
$ | 311 | $ | - | ||||
Real
estate owned received in settlement of loans
|
$ | 1,430 | $ | - | ||||
Loan
receivable originated in connection with building sale
|
$ | - | $ | 16,341 | ||||
Assets
acquired (liabilities incurred) in connection with the acquisition of a
business:
|
||||||||
Intangible
Assets
|
$ | - | $ | 710 | ||||
Goodwill
|
- | 1,310 | ||||||
Note
Payable
|
- | (625 | ) |
Northeast Community Bancorp,
Inc.
|
Notes
to Consolidated Financial
Statements
|
Northeast Community Bancorp,
Inc.
|
Notes
to Consolidated Financial
Statements
|
Northeast Community Bancorp,
Inc.
|
Notes
to Consolidated Financial
Statements
|
Years
|
|
Buildings
|
30
- 50
|
Building
improvements
|
10
- 50
|
Leasehold
improvements
|
1 -
15
|
Furnishings
and equipment
|
3 -
50
|
Northeast Community Bancorp,
Inc.
|
Notes
to Consolidated Financial
Statements
|
Northeast Community Bancorp,
Inc.
|
Notes
to Consolidated Financial
Statements
|
Northeast Community Bancorp,
Inc.
|
Notes
to Consolidated Financial
Statements
|
Northeast Community Bancorp,
Inc.
|
Notes
to Consolidated Financial
Statements
|
Northeast Community Bancorp,
Inc.
|
Notes
to Consolidated Financial
Statements
|
December
31,
|
||||||||
2008
|
2007
|
|||||||
(In
Thousands)
|
||||||||
GAAP
capital
|
$ | 81,312 | $ | 79,282 | ||||
Less: Goodwill
and intangible assets
|
(1,959 | ) | (2,020 | ) | ||||
Directors
retirement plan AOCI
|
177 | 174 | ||||||
Unrealized
loss (gain) on securities available for sale
|
5 | (25 | ) | |||||
Disallowed
deferred tax assets
|
(64 | ) | (1,003 | ) | ||||
Core
and Tangible Capital
|
79,471 | 76,408 | ||||||
Add: General
valuation allowances
|
1,865 | 1,489 | ||||||
Total
Capital
|
$ | 81,336 | $ | 77,897 |
Northeast Community Bancorp,
Inc.
|
Notes
to Consolidated Financial
Statements
|
Actual
|
For
Capital Adequacy Purposes
|
To
be Well Capitalized under Prompt Corrective Action
Provisions
|
||||||||||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||||||||||||
(Dollars
in Thousands)
|
||||||||||||||||||||||||
As
of December 31, 2008:
|
||||||||||||||||||||||||
Total
capital (to risk-weighted assets)
|
$ | 81,336 | 30.65 | % | $ | >21,230 | >8.00 | % | $ | >26,538 | >10.00 | % | ||||||||||||
Tier
1 capital (to risk-weighted assets)
|
79,471 | 29.95 | > - | > - | >15,923 | > 6.00 | ||||||||||||||||||
Core
(Tier 1) capital (to adjusted total assets
|
79,471 | 19.45 | >16,339 | >4.00 | >20,424 | > 5.00 | ||||||||||||||||||
Tangible
capital (to adjusted total assets)
|
79,471 | 19.45 | > 6,127 | >1.50 | > - | > - | ||||||||||||||||||
As
of December 31, 2007:
|
||||||||||||||||||||||||
Total
capital (to risk-weighted assets)
|
$ | 77,897 | 37.50 | % | $ | >16,617 | >8.00 | % | $ | >20,772 | >10.00 | % | ||||||||||||
Tier
1 capital (to risk-weighted assets)
|
76,408 | 36.78 | > - | > - | >12,463 | > 6.00 | ||||||||||||||||||
Core
(Tier 1) capital (to adjusted total assets
|
76,408 | 24.18 | >12,641 | >4.00 | >15,801 | > 5.00 | ||||||||||||||||||
Tangible
capital (to adjusted total assets)
|
76,408 | 24.18 | > 4,740 | >1.50 | > - | > - |
Northeast Community Bancorp,
Inc.
|
Notes
to Consolidated Financial
Statements
|
December
31,
|
||||||||
2008
|
2007
|
|||||||
(In
Thousands)
|
||||||||
Financial
instruments whose contract amounts represent credit risk:
|
||||||||
Commitments
to extend credit
|
$ | 32,348 | $ | 44,071 | ||||
Construction
loans in process
|
1,471 | 582 | ||||||
Commitments
to fund unused lines of credit:
|
||||||||
Commercial
lines
|
19,256 | 5,379 | ||||||
Consumer
lines
|
181 | 191 | ||||||
$ | 53,256 | $ | 50,223 |
December
31,
|
||||||||
2008
|
2007
|
|||||||
(In
Thousands)
|
||||||||
Due
within one year
|
$ | 498 | $ | - | ||||
$ | 498 | $ | - |
Northeast Community Bancorp,
Inc.
|
Notes
to Consolidated Financial
Statements
|
December
31, 2008
|
||||||||||||||||
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
|||||||||||||
(In
Thousands)
|
||||||||||||||||
Federal
National Mortgage Association common stock
|
$ | 4 | $ | - | $ | 3 | $ | 1 | ||||||||
Mortgage-backed
securities:
|
||||||||||||||||
Federal
Home Loan Mortgage Corporation
|
124 | - | 1 | 123 | ||||||||||||
Federal
National Mortgage Association
|
59 | - | 1 | 58 | ||||||||||||
183 | - | 2 | 181 | |||||||||||||
$ | 187 | $ | - | $ | 5 | $ | 182 |
December
31, 2007
|
||||||||||||||||
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
|||||||||||||
(In
Thousands)
|
||||||||||||||||
Federal
National Mortgage Association common stock
|
$ | 4 | $ | 42 | $ | - | $ | 46 | ||||||||
Mortgage-backed
securities:
|
||||||||||||||||
Federal
Home Loan Mortgage Corporation
|
187 | 1 | - | 188 | ||||||||||||
Federal
National Mortgage Association
|
82 | - | - | 82 | ||||||||||||
Collateralized
Mortgage Obligations
|
4 | - | - | 4 | ||||||||||||
273 | 1 | - | 274 | |||||||||||||
$ | 277 | $ | 43 | $ | - | $ | 320 |
Northeast Community Bancorp,
Inc.
|
Notes
to Consolidated Financial
Statements
|
December
31,
|
||||||||||||||||
2008
|
2007
|
|||||||||||||||
Amortized
Cost
|
Fair
Value
|
Amortized
Cost
|
Fair
Value
|
|||||||||||||
(In
Thousands)
|
||||||||||||||||
Due
within one year
|
$ | - | $ | - | $ | 4 | $ | 4 | ||||||||
Due
after ten years
|
183 | 181 | 269 | 270 | ||||||||||||
$ | 183 | $ | 181 | $ | 273 | $ | 274 |
Less
than 12 Months
|
12
Months or More
|
Total
|
||||||||||||||||||||||
Fair
Value
|
Gross
Unrealized Losses
|
Fair
Value
|
Gross
Unrealized Losses
|
Fair
Value
|
Gross
Unrealized Losses
|
|||||||||||||||||||
(In
Thousands)
|
||||||||||||||||||||||||
December
31, 2008:
|
||||||||||||||||||||||||
FNMA
common stock
|
$ | 1 | $ | 3 | $ | - | $ | - | $ | 1 | $ | 3 | ||||||||||||
Mortgage-backed
securities
|
125 | 2 | - | - | 125 | 2 | ||||||||||||||||||
$ | 126 | $ | 5 | $ | - | $ | - | $ | 126 | $ | 5 |
Northeast Community Bancorp,
Inc.
|
Notes
to Consolidated Financial
Statements
|
December
31, 2008
|
||||||||||||||||
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
|||||||||||||
(In
Thousands)
|
||||||||||||||||
Mortgage-backed
securities:
|
||||||||||||||||
Government
National Mortgage Association
|
$ | 960 | $ | 1 | $ | 19 | $ | 942 | ||||||||
Federal
Home Loan Mortgage Corporation
|
495 | 1 | 8 | 488 | ||||||||||||
Federal
National Mortgage Association
|
562 | 4 | 5 | 561 | ||||||||||||
Collateralized
Mortgage Obligations
|
57 | - | 1 | 56 | ||||||||||||
Private
Pass-through Securities
|
4 | - | 1 | 3 | ||||||||||||
$ | 2,078 | $ | 6 | $ | 34 | $ | 2,050 |
December
31, 2007
|
||||||||||||||||
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
|||||||||||||
(In
Thousands)
|
||||||||||||||||
Mortgage-backed
securities:
|
||||||||||||||||
Government
National Mortgage Association
|
$ | 1,341 | $ | 9 | $ | 2 | $ | 1,348 | ||||||||
Federal
Home Loan Mortgage Corporation
|
668 | 4 | 4 | 668 | ||||||||||||
Federal
National Mortgage Association
|
746 | 9 | 2 | 753 | ||||||||||||
Collateralized
Mortgage Obligations
|
116 | 1 | - | 117 | ||||||||||||
Private
Pass-through Securities
|
4 | - | - | 4 | ||||||||||||
$ | 2,875 | $ | 23 | $ | 8 | $ | 2,890 |
Northeast Community Bancorp,
Inc.
|
Notes
to Consolidated Financial
Statements
|
December
31,
|
||||||||||||||||
2008
|
2007
|
|||||||||||||||
Amortized
Cost
|
Fair
Value
|
Amortized
Cost
|
Fair
Value
|
|||||||||||||
(In
Thousands)
|
||||||||||||||||
Due
within one year
|
$ | - | $ | - | $ | 50 | $ | 50 | ||||||||
Due
after one but within five years
|
15 | 15 | 46 | 47 | ||||||||||||
Due
after five but within ten years
|
339 | 337 | 303 | 303 | ||||||||||||
Due
after ten years
|
1,724 | 1,698 | 2,476 | 2,490 | ||||||||||||
$ | 2,078 | $ | 2,050 | $ | 2,875 | $ | 2,890 |
Less
than 12 Months
|
12
Months or More
|
Total
|
||||||||||||||||||||||
Fair
Value
|
Gross
Unrealized Losses
|
Fair
Value
|
Gross
Unrealized Losses
|
Fair
Value
|
Gross
Unrealized Losses
|
|||||||||||||||||||
(In
Thousands)
|
||||||||||||||||||||||||
December
31, 2008:
|
||||||||||||||||||||||||
Mortgage-backed
securities
|
$ | - | $ | - | $ | 1,656 | $ | 34 | $ | 1,656 | $ | 34 | ||||||||||||
December
31, 2007:
|
||||||||||||||||||||||||
Mortgage-backed
securities
|
$ | 74 | $ | 1 | $ | 961 | $ | 7 | $ | 1,035 | $ | 8 |
Northeast Community Bancorp,
Inc.
|
Notes
to Consolidated Financial
Statements
|
December
31,
|
||||||||
2008
|
2007
|
|||||||
(In
Thousands)
|
||||||||
Real
estate mortgage:
|
||||||||
One-to-four
family
|
$ | 275 | $ | 304 | ||||
Multi-family
|
186,199 | 138,767 | ||||||
Mixed
use
|
58,317 | 52,559 | ||||||
Commercial
|
102,785 | 79,305 | ||||||
347,576 | 270,935 | |||||||
Construction:
|
||||||||
Multi-family
|
9,025 | 7,538 | ||||||
Commercial
|
- | 1,918 | ||||||
9,025 | 9,456 | |||||||
Commercial
Business:
|
||||||||
Lines
of Credit
|
6,398 | 2,322 | ||||||
Term
|
1,222 | 655 | ||||||
7,620 | 2,977 | |||||||
Consumer:
|
||||||||
Line
of credit
|
57 | 69 | ||||||
Passbook
or certificate
|
57 | 19 | ||||||
114 | 88 | |||||||
Total
Loans
|
364,335 | 283,456 | ||||||
Allowance
for loan losses
|
(1,865 | ) | (1,489 | ) | ||||
Deferred
loan fees and costs
|
1,146 | 1,166 | ||||||
$ | 363,616 | $ | 283,133 |
Northeast Community Bancorp,
Inc.
|
Notes
to Consolidated Financial
Statements
|
Years
Ended December 31,
|
||||||||
2008
|
2007
|
|||||||
(In
Thousands)
|
||||||||
Balance,
beginning
|
$ | 1,489 | $ | 1,200 | ||||
Provision
charged to operations
|
411 | 338 | ||||||
Losses
charged to allowance
|
(35 | ) | (49 | ) | ||||
Balance,
ending
|
$ | 1,865 | $ | 1,489 |
December
31,
|
||||||||
2008
|
2007
|
|||||||
(In
Thousands)
|
||||||||
Land
|
$ | 534 | $ | 534 | ||||
Buildings
and improvements
|
7,234 | 7,183 | ||||||
Leasehold
improvements
|
736 | 736 | ||||||
Furnishings
and equipment
|
5,301 | 4,977 | ||||||
13,805 | 13,430 | |||||||
Accumulated
depreciation and amortization
|
(9,440 | ) | (8,901 | ) | ||||
$ | 4,365 | $ | 4,529 |
Northeast Community Bancorp,
Inc.
|
Notes
to Consolidated Financial
Statements
|
December
31,
|
||||||||
2008
|
2007
|
|||||||
(In
Thousands)
|
||||||||
Loans
|
$ | 1,998 | $ | 1,456 | ||||
Securities
|
8 | 16 | ||||||
2,006 | 1,472 | |||||||
Allowance
for uncollected interest
|
(221 | ) | (132 | ) | ||||
$ | 1,785 | $ | 1,340 |
2008
|
2007
|
|||||||
Goodwill
|
$ | 1,310 | $ | 1,310 | ||||
Customer
relationships intangible
|
649 | 710 | ||||||
Total
|
$ | 1,959 | $ | 2,020 |
2009
|
$ | 61 | ||
2010
|
61 | |||
2011
|
61 | |||
2012
|
61 | |||
2013
|
61 | |||
Thereafter
|
344 |
Northeast Community Bancorp,
Inc.
|
Notes
to Consolidated Financial
Statements
|
December
31,
|
||||||||||||||||
2008
|
2007
|
|||||||||||||||
Amount
|
Weighted
Average Interest Rate
|
Amount
|
Weighted
Average Interest Rate
|
|||||||||||||
(Dollars
in Thousands)
|
||||||||||||||||
Demand
deposits:
|
||||||||||||||||
Non-interest
bearing
|
$ | 6,209 | 0.00 | % | $ | 1,745 | 0.00 | % | ||||||||
NOW
and money market
|
24,595 | 0.57 | % | 21,839 | 0.84 | % | ||||||||||
30,804 | 0.45 | % | 23,584 | 0.77 | % | |||||||||||
Savings
accounts
|
56,987 | 0.68 | % | 57,346 | 0.73 | % | ||||||||||
Certificates
of deposit maturing in:
|
||||||||||||||||
One
year or less
|
138,934 | 3.96 | % | 95,341 | 4.83 | % | ||||||||||
After
one to two years
|
20,331 | 4.46 | % | 24,531 | 4.76 | % | ||||||||||
After
two to three years
|
6,645 | 5.03 | % | 14,412 | 4.78 | % | ||||||||||
After
three to four years
|
5,907 | 5.11 | % | 5,099 | 5.27 | % | ||||||||||
After
four to five years
|
1,822 | 3.33 | % | 5,665 | 5.15 | % | ||||||||||
173,639 | 4.09 | % | 145,048 | 4.84 | % | |||||||||||
$ | 261,430 | 2.93 | % | $ | 225,978 | 3.37 | % |
Northeast Community Bancorp,
Inc.
|
Notes
to Consolidated Financial
Statements
|
Years
Ended December 31,
|
||||||||
2008
|
2007
|
|||||||
(In
Thousands)
|
||||||||
Demand
deposits
|
$ | 144 | $ | 117 | ||||
Savings
accounts
|
450 | 415 | ||||||
Certificates
of deposit
|
7,224 | 5,365 | ||||||
$ | 7,818 | $ | 5,897 |
December
31,
|
||||||||||||||||
2008
|
2007
|
|||||||||||||||
Amount
|
Weighted
Average Interest Rate
|
Amount
|
Weighted
Average Interest Rate
|
|||||||||||||
(Dollars
in Thousands)
|
||||||||||||||||
Advances
maturing in:
|
||||||||||||||||
One
year or less
|
$ | 15,000 | 2.14 | % | $ | - | - | % | ||||||||
After
one to two years
|
10,000 | 3.58 | % | - | - | % | ||||||||||
After
two to three years
|
5,000 | 3.30 | % | - | - | % | ||||||||||
After
four to five years
|
10,000 | 3.70 | % | - | - | % | ||||||||||
$ | 40,000 | 3.04 | % | $ | - | - | % |
Northeast Community Bancorp,
Inc.
|
Notes
to Consolidated Financial
Statements
|
Years
Ended December 31,
|
||||||||
2008
|
2007
|
|||||||
(In
Thousands)
|
||||||||
Current
tax expense
|
$ | 3,857 | $ | 4,097 | ||||
Deferred
tax expense (benefit)
|
(2,679 | ) | 5,053 | |||||
Income
Tax Expense
|
$ | 1,178 | $ | 9,150 |
Years
Ended December 31,
|
||||||||
2008
|
2007
|
|||||||
(Dollars
In Thousands)
|
||||||||
Federal
income tax at statutory rates
|
$ | 1,115 | $ | 7,238 | ||||
State
and City tax, net of federal income tax effect
|
172 | 1,945 | ||||||
Non-taxable
income on bank owned life insurance
|
(131 | ) | (123 | ) | ||||
Other
|
22 | 90 | ||||||
Income
Tax Expense
|
$ | 1,178 | $ | 9,150 | ||||
Effective
Income Tax Rate
|
35.9 | % | 43.0 | % |
Northeast Community Bancorp,
Inc.
|
Notes
to Consolidated Financial
Statements
|
December
31,
|
||||||||
2008
|
2007
|
|||||||
(In
Thousands)
|
||||||||
Deferred
tax assets:
|
||||||||
Allowance
for loan losses
|
$ | 788 | $ | 657 | ||||
Reserve
for uncollected interest
|
93 | - | ||||||
Unrealized
losses on REO
|
151 | - | ||||||
Depreciation
|
183 | 168 | ||||||
Benefit
plans
|
381 | 223 | ||||||
Accumulated
other comprehensive loss - DRP
|
141 | 142 | ||||||
Total
Deferred Tax Assets
|
1,737 | 1,190 | ||||||
Deferred
tax liability:
|
||||||||
Unrealized
gain on securities available for sale
|
- | 18 | ||||||
Goodwill
|
37 | - | ||||||
Gain
on sale of building
|
2,926 | 5,179 | ||||||
Other
|
99 | 14 | ||||||
Total
Deferred Tax Liabilities
|
3,062 | 5,211 | ||||||
Net
Deferred Tax (Liability)
|
$ | (1,325 | ) | $ | (4,021 | ) |
Years
Ended December 31,
|
||||||||
2008
|
2007
|
|||||||
(In
Thousands)
|
||||||||
Service
contracts
|
$ | 212 | $ | 205 | ||||
Insurance
|
163 | 165 | ||||||
Audit
and accounting
|
267 | 214 | ||||||
Directors
compensation
|
287 | 219 | ||||||
Telephone
|
165 | 167 | ||||||
Office
supplies and stationary
|
218 | 209 | ||||||
Director,
officer, and employee expenses
|
269 | 235 | ||||||
Legal
fees
|
290 | 277 | ||||||
Other
|
668 | 642 | ||||||
$ | 2,539 | $ | 2,334 |
Northeast Community Bancorp,
Inc.
|
Notes
to Consolidated Financial
Statements
|
Years
Ended December 31,
|
||||||||
2008
|
2007
|
|||||||
(Dollars
In Thousands)
|
||||||||
Benefit
Obligation – beginning
|
$ | 476 | $ | 358 | ||||
Service
cost
|
49 | 43 | ||||||
Interest
cost
|
31 | 25 | ||||||
Actuarial
loss
|
29 | 49 | ||||||
Prior
service cost
|
- | 1 | ||||||
Benefit
Obligation – ending
|
$ | 585 | $ | 476 | ||||
Funded
Status – Accrued liability included in Accounts Payable and Accrued
Expenses
|
$ | 585 | $ | 476 | ||||
Discount
rate
|
6.00 | % | 6.00 | % | ||||
Salary
increase rate
|
2.00 | % | 2.00 | % | ||||
Net
pension expense:
|
||||||||
Service
cost
|
$ | 49 | $ | 43 | ||||
Interest
cost
|
31 | 25 | ||||||
Actuarial
loss recognized
|
5 | - | ||||||
Prior
service liability recognized
|
21 | 21 | ||||||
Total
pension expense included in Other Non-Interest Expenses
|
$ | 106 | $ | 89 | ||||
Discount
rate
|
6.00 | % | 6.00 | % | ||||
Salary
increase rate
|
2.00 | % | 2.00 | % |
Northeast Community Bancorp,
Inc.
|
Notes
to Consolidated Financial
Statements
|
2009
|
$ | - | ||
2010
|
- | |||
2011
|
31 | |||
2012
|
63 | |||
2013
|
63 | |||
2014
– 2018
|
451 |
Northeast Community Bancorp,
Inc.
|
Notes
to Consolidated Financial
Statements
|
December
31,
|
||||||||
2008
|
2007
|
|||||||
Allocated
shares
|
51,842 | 25,921 | ||||||
Shares
committed to be released
|
25,921 | 25,921 | ||||||
Unearned
shares
|
440,657 | 466,578 | ||||||
Total
ESOP Shares
|
518,420 | 518,420 | ||||||
Fair
value of unearned shares
|
$ | 3,238,000 | $ | 5,520,000 |
Year
ending December 31,
|
||||
2009
|
$ | 341 | ||
2010
|
270 | |||
2011
|
162 | |||
2012
|
64 | |||
2013
|
64 | |||
Thereafter
|
1,241 | |||
$ | 2,142 |
Northeast Community Bancorp,
Inc.
|
Notes
to Consolidated Financial
Statements
|
|
Level
1:
|
Unadjusted
quoted prices in active markets that are accessible at the measurement
date for identical, unrestricted assets or
liabilities.
|
|
Level
2:
|
Quoted
prices in markets that are not active, or inputs that are observable
either directly or indirectly, for substantially the full term of the
asset or liability.
|
Northeast Community Bancorp,
Inc.
|
Notes
to Consolidated Financial
Statements
|
|
Level
3:
|
Prices
or valuation techniques that require inputs that are both significant to
the fair value measurement and unobservable (i.e., supported with little
or no market activity).
|
Description
|
December 31,2008
|
(Level
1)
Quoted
Prices in Active Markets for Identical Assets
|
(Level
2)
Significant
Other
Observable
Inputs
|
(Level
3)
Significant
Unobservable
Inputs
|
||||||||||||
(In
Thousands)
|
||||||||||||||||
Securities
available for sale
|
$ | 182 | $ | - | $ | 182 | $ | - |
Northeast Community Bancorp,
Inc.
|
Notes
to Consolidated Financial
Statements
|
Northeast Community Bancorp,
Inc.
|
Notes
to Consolidated Financial
Statements
|
December
31,
|
||||||||||||||||
2008
|
2007
|
|||||||||||||||
Carrying
Amount
|
Estimated
Fair Value
|
Carrying
Amount
|
Estimated
Fair Value
|
|||||||||||||
(In
Thousands)
|
||||||||||||||||
Financial
assets:
|
||||||||||||||||
Cash
and cash equivalents
|
$ | 36,534 | $ | 36,534 | $ | 39,146 | $ | 39,146 | ||||||||
Certificates
of deposit
|
498 | 498 | - | - | ||||||||||||
Securities
available for sale
|
182 | 182 | 320 | 320 | ||||||||||||
Securities
held to maturity
|
2,078 | 2,050 | 2,875 | 2,890 | ||||||||||||
Loans
receivable
|
363,616 | 381,444 | 283,133 | 286,213 | ||||||||||||
FHLB
stock
|
2,350 | 2,350 | 414 | 414 | ||||||||||||
Accrued
interest receivable
|
1,785 | 1,785 | 1,340 | 1,340 | ||||||||||||
Financial
liabilities:
|
||||||||||||||||
Deposits
|
261,430 | 267,168 | 225,978 | 228,605 | ||||||||||||
FHLB
advances
|
40,000 | 42,330 | - | - | ||||||||||||
Note
payable
|
481 | 481 | 627 | 627 |
Northeast Community Bancorp,
Inc.
|
Notes
to Consolidated Financial
Statements
|
December
31,
|
||||||||
2008
|
2007
|
|||||||
(In
Thousands)
|
||||||||
Assets
|
||||||||
Cash
and due from banks
|
$ | 25,104 | $ | 25,187 | ||||
Investment
in subsidiary
|
81,312 | 79,282 | ||||||
ESOP
loan receivable
|
4,638 | 4,762 | ||||||
Other
assets
|
2 | - | ||||||
Total
Assets
|
$ | 111,056 | $ | 109,231 | ||||
Liabilities
and Stockholders’ Equity
|
||||||||
Accounts
payable and accrued expense
|
$ | 554 | $ | 402 | ||||
Total
Liabilities
|
554 | 402 | ||||||
Total
Stockholders’ Equity
|
110,502 | 108,829 | ||||||
Total
Liabilities and Stockholders’ Equity
|
$ | 111,056 | $ | 109,231 |
Years Ended December 31,
|
||||||||
2008
|
2007
|
|||||||
(In
Thousands)
|
||||||||
Interest
income – securities
|
$ | - | $ | 402 | ||||
Interest
income – interest- earning deposits
|
372 | 780 | ||||||
Interest
income – ESOP loan
|
394 | 402 | ||||||
Operating
expenses
|
(262 | ) | (276 | ) | ||||
Income
before Income Tax Expense and Equity in Undistributed Earnings of
Subsidiary
|
504 | 1,308 | ||||||
Income
tax expense
|
201 | 522 | ||||||
Income
before Equity in Undistributed Earnings of Subsidiary
|
303 | 786 | ||||||
Equity
in undistributed earnings of subsidiary
|
1,799 | 11,351 | ||||||
Net
Income
|
$ | 2,102 | $ | 12,137 |
Northeast Community Bancorp,
Inc.
|
Notes
to Consolidated Financial
Statements
|
Years Ended December 31,
|
||||||||
2008
|
2007
|
|||||||
(In Thousands)
|
||||||||
Cash
Flows from Operating Activities
|
||||||||
Net
income
|
$ | 2,102 | $ | 12,137 | ||||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||
Equity
in undistributed earnings of subsidiary
|
(1,799 | ) | (11,351 | ) | ||||
Amortization
of securities discount
|
- | (84 | ) | |||||
(Increase)
decrease in other assets
|
(2 | ) | 3 | |||||
Increase
(decrease) in other liabilities
|
151 | (2 | ) | |||||
Net
Cash Provided by Operating Activities
|
452 | 703 | ||||||
Cash
Flows from Investing Activities
|
||||||||
Purchase
of securities held to maturity
|
- | (5,000 | ) | |||||
Maturities
of securities held to maturity
|
- | 20,000 | ||||||
Repayment
of ESOP loan
|
124 | 115 | ||||||
Net
Cash Provided by Investing Activities
|
124 | 15,115 | ||||||
Cash
Flows from Financing Activities
|
||||||||
Cash
dividends paid
|
(659 | ) | (164 | ) | ||||
Net
Cash (Used in) Financing Activities
|
(659 | ) | (164 | ) | ||||
Net
Increase (Decrease) in Cash and Cash Equivalents
|
(83 | ) | 15,654 | |||||
Cash
and Cash Equivalents - Beginning
|
25,187 | 9,533 | ||||||
Cash
and Cash Equivalents - Ending
|
$ | 25,104 | $ | 25,187 |
Northeast Community Bancorp,
Inc.
|
Notes
to Consolidated Financial
Statements
|
Northeast Community Bancorp,
Inc.
|
Notes
to Consolidated Financial
Statements
|
Quarter Ended
|
||||||||||||||||
March 31, 2008
|
June 30, 2008
|
September 30, 2008
|
December 31, 2008
|
|||||||||||||
(In
Thousands, except for per share data)
|
||||||||||||||||
Interest
Income
|
$ | 5,282 | $ | 5,304 | $ | 5,563 | $ | 5,798 | ||||||||
Interest
Expense
|
2,053 | 2,087 | 2,209 | 2,201 | ||||||||||||
Net
Interest Income
|
3,229 | 3,217 | 3,354 | 3,597 | ||||||||||||
Provision
for Loan Losses
|
- | 79 | 147 | 185 | ||||||||||||
Net
Interest Income after Provision for Loan Losses
|
3,229 | 3,138 | 3,207 | 3,412 | ||||||||||||
Non-Interest
Income
|
428 | 399 | 430 | 537 | ||||||||||||
Non-Interest
Expenses
|
2,772 | 2,821 | 2,762 | 3,145 | ||||||||||||
Income
before Income Taxes
|
885 | 716 | 875 | 804 | ||||||||||||
Income
Taxes
|
357 | 271 | 333 | 217 | ||||||||||||
Net
Income
|
$ | 528 | $ | 445 | $ | 542 | $ | 587 | ||||||||
Net
Income per common share – Basic
|
$ | 0.04 | $ | 0.03 | $ | 0.04 | $ | 0.05 | ||||||||
Weighted
average numbers of common shares outstanding – basic
|
12,761 | 12,768 | 12,775 | 12,781 | ||||||||||||
Dividends
declared per share
|
$ | 0.03 | $ | 0.03 | $ | 0.03 | $ | 0.03 |
Northeast Community Bancorp,
Inc.
|
Notes
to Consolidated Financial
Statements
|
Quarter Ended
|
||||||||||||||||
March 31, 2007
|
June 30, 2007
|
September 30, 2007
|
December 31, 2007
|
|||||||||||||
(In
Thousands, except for per share data)
|
||||||||||||||||
Interest
Income
|
$ | 3,969 | $ | 4,126 | $ | 4,562 | $ | 4,945 | ||||||||
Interest
Expense
|
1,284 | 1,332 | 1,504 | 1,798 | ||||||||||||
Net
Interest Income
|
2,685 | 2,794 | 3,058 | 3,147 | ||||||||||||
Provision
for Loan Losses
|
- | 338 | - | - | ||||||||||||
Net
Interest Income after Provision for Loan Losses
|
2,685 | 2,456 | 3,058 | 3,147 | ||||||||||||
Non-Interest
Income
|
182 | 19,141 | 195 | 249 | ||||||||||||
Non-Interest
Expenses
|
2,259 | 2,739 | 2,362 | 2,466 | ||||||||||||
Income
before Income Taxes
|
608 | 18,858 | 891 | 930 | ||||||||||||
Income
Taxes
|
218 | 8,235 | 337 | 360 | ||||||||||||
Net
Income
|
$ | 390 | $ | 10,623 | $ | 554 | $ | 570 | ||||||||
Net
Income per common share – Basic
|
$ | 0.03 | $ | 0.83 | $ | 0.04 | $ | 0.04 | ||||||||
Weighted
average numbers of common shares outstanding – basic
|
12,736 | 12,742 | 12,749 | 12,758 | ||||||||||||
Dividends
declared per share
|
$ | - | $ | - | $ | 0.03 | $ | 0.03 |