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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Rome Bancorp, Inc. (MM) | NASDAQ:ROME | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 11.30 | 0 | 01:00:00 |
|
UNITED STATES |
SECURITIES AND EXCHANGE COMMISSION |
WASHINGTON, DC 20549 |
|
FORM 10-Q |
|
Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934 |
|
For the quarterly period ended September 30, 2010 |
|
Commission file number 000-27481 |
|
Rome Bancorp, Inc. |
(Exact name of registrant as specified in its charter) |
|
|
|
|
Delaware |
|
16-1573070 |
|
(State or other jurisdiction of |
|
(I.R.S. Employer |
|
incorporation or organization) |
|
Identification No.) |
|
100 West Dominick Street, Rome, NY 13440-5810
(Address of Principal executive offices)
(315) 336-7300
(Registrants telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer o Accelerated filer o Non-accelerated filer o Smaller reporting company x
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.) Yes o No x
Indicate the number of shares outstanding of each class of issuers classes of common stock as of the last practicable date:
|
|
Class |
Outstanding at
|
|
|
Common Stock, par value $0.01 |
6,777,551 |
ROME BANCORP, INC.
FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2010
TABLE OF CONTENTS
2
ROME BANCORP, INC. AND SUBSIDIARY
Co
ndensed Consolidated Balance Sheets
September 30, 2010 and December 31, 2009
(in thousands, except share data)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
December 31,
|
|
||
|
|
|
|
|
|
||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from banks |
|
$ |
6,966 |
|
$ |
6,547 |
|
Federal funds sold and other short-term investments |
|
|
9,032 |
|
|
1,027 |
|
|
|
|
|
|
|
|
|
Total cash and cash equivalents |
|
|
15,998 |
|
|
7,574 |
|
Securities available for sale, at fair value |
|
|
13,336 |
|
|
10,024 |
|
Securities held to maturity (fair value of $1,475 and $1,502 at September 30, 2010 and December 31, 2009, respectively) |
|
|
1,419 |
|
|
1,431 |
|
Federal Home Loan Bank Stock |
|
|
3,310 |
|
|
3,222 |
|
Loans |
|
|
277,833 |
|
|
287,749 |
|
Less: Allowance for loan loss |
|
|
(2,595 |
) |
|
(2,132 |
) |
|
|
|
|
|
|
|
|
Net loans |
|
|
275,238 |
|
|
285,617 |
|
Premises and equipment, net |
|
|
5,925 |
|
|
6,041 |
|
Accrued interest receivable |
|
|
1,122 |
|
|
1,117 |
|
Bank-owned life insurance |
|
|
9,709 |
|
|
9,415 |
|
Other assets |
|
|
5,550 |
|
|
5,481 |
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
331,607 |
|
$ |
329,922 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities & Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
|
Non-interest bearing |
|
$ |
36,485 |
|
$ |
31,790 |
|
Savings |
|
|
85,405 |
|
|
82,031 |
|
Money market |
|
|
19,938 |
|
|
15,726 |
|
Time |
|
|
69,651 |
|
|
71,903 |
|
Other interest bearing |
|
|
15,398 |
|
|
15,189 |
|
|
|
|
|
|
|
|
|
Total deposits |
|
|
226,877 |
|
|
216,639 |
|
Borrowings |
|
|
37,873 |
|
|
47,869 |
|
Other liabilities |
|
|
5,038 |
|
|
5,049 |
|
|
|
|
|
|
|
|
|
Total liabilities |
|
|
269,788 |
|
|
269,557 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders equity |
|
|
|
|
|
|
|
Common Stock, $.01 par value; authorized: 30,000,000 shares; issued: 9,895,757; outstanding 6,777,551 and 6,800,119 shares at September 30, 2010 and December 31, 2009, respectively |
|
|
99 |
|
|
99 |
|
Additional paid-in capital |
|
|
63,065 |
|
|
62,794 |
|
Retained earnings |
|
|
38,509 |
|
|
37,588 |
|
Accumulated other comprehensive loss |
|
|
(1,275 |
) |
|
(1,574 |
) |
Treasury stock; 3,118,206 shares at September 30, 2010 and 3,095,638 shares at December 31, 2009 |
|
|
(36,921 |
) |
|
(36,720 |
) |
Unallocated shares of employee stock ownership plan (ESOP): 243,802 and 278,275 shares at September 30, 2010 and December 31, 2009 |
|
|
(1,658 |
) |
|
(1,822 |
) |
|
|
|
|
|
|
|
|
Total shareholders equity |
|
|
61,819 |
|
|
60,365 |
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders equity |
|
$ |
331,607 |
|
$ |
329,922 |
|
|
|
|
|
|
|
|
|
See accompanying notes to unaudited condensed consolidated financial statements.
3
ROME BANCORP, INC. AND SUBSIDIARY
Co
ndensed Consolidated Statements of Income
For the Three and Nine Months Ended September 30, 2010 and 2009
(in thousands, except share data)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three
months ended
|
|
For the nine months
ended
|
|
||||||||
|
|
|
|
|
|
||||||||
|
|
2010 |
|
2009 |
|
2010 |
|
2009 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans |
|
$ |
4,007 |
|
$ |
4,148 |
|
$ |
12,125 |
|
$ |
12,626 |
|
Securities |
|
|
179 |
|
|
157 |
|
|
509 |
|
|
362 |
|
Other short-term investments |
|
|
3 |
|
|
4 |
|
|
3 |
|
|
8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest income |
|
|
4,189 |
|
|
4,309 |
|
|
12,637 |
|
|
12,996 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
|
454 |
|
|
586 |
|
|
1,398 |
|
|
1,900 |
|
Borrowings |
|
|
299 |
|
|
466 |
|
|
902 |
|
|
1,359 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest expense |
|
|
753 |
|
|
1,052 |
|
|
2,300 |
|
|
3,259 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
|
3,436 |
|
|
3,257 |
|
|
10,337 |
|
|
9,737 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for loan losses |
|
|
75 |
|
|
|
|
|
540 |
|
|
200 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income after provision for loan losses |
|
|
3,361 |
|
|
3,257 |
|
|
9,797 |
|
|
9,537 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on sales of securities |
|
|
35 |
|
|
26 |
|
|
156 |
|
|
26 |
|
Gain on sale of real estate |
|
|
|
|
|
|
|
|
418 |
|
|
|
|
Other |
|
|
773 |
|
|
639 |
|
|
1,997 |
|
|
1,806 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-interest income |
|
|
808 |
|
|
665 |
|
|
2,571 |
|
|
1,832 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
|
1,567 |
|
|
1,497 |
|
|
4,645 |
|
|
4,594 |
|
Building, occupancy and equipment |
|
|
487 |
|
|
465 |
|
|
1,453 |
|
|
1,434 |
|
Other |
|
|
953 |
|
|
592 |
|
|
2,319 |
|
|
1,982 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-interest expense |
|
|
3,007 |
|
|
2,554 |
|
|
8,417 |
|
|
8,010 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income tax expense |
|
|
1,162 |
|
|
1,368 |
|
|
3,951 |
|
|
3,359 |
|
Income tax expense |
|
|
324 |
|
|
460 |
|
|
1,272 |
|
|
1,096 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
838 |
|
$ |
908 |
|
$ |
2,679 |
|
$ |
2,263 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share |
|
$ |
0.13 |
|
$ |
0.14 |
|
$ |
0.41 |
|
$ |
0.34 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share |
|
$ |
0.13 |
|
$ |
0.14 |
|
$ |
0.41 |
|
$ |
0.34 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to unaudited condensed consolidated financial statements.
4
ROME BANCORP, INC. AND SUBSIDIARY
Condensed Consolidated Statements of Shareholders
Equity and
Comprehensive Income
For the Nine Months Ended September 30, 2010 and 2009
(in thousands, except share and per share data)(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
|
|
Additional
|
|
Retained
|
|
Treasury
|
|
Accumulated
|
|
Unallocated
|
|
Total |
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Balances at January 1, 2009 |
|
$ |
99 |
|
$ |
62,440 |
|
$ |
36,721 |
|
$ |
(34,662 |
) |
$ |
(2,212 |
) |
$ |
(2,042 |
) |
$ |
60,344 |
|
Comprehensive income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income |
|
|
|
|
|
|
|
|
2,263 |
|
|
|
|
|
|
|
|
|
|
|
2,263 |
|
Other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
300 |
|
|
|
|
|
300 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,563 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of 181,588 treasury shares |
|
|
|
|
|
|
|
|
|
|
|
(1,408 |
) |
|
|
|
|
|
|
|
(1,408 |
) |
Stock-based compensation |
|
|
|
|
|
120 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
120 |
|
Dividends ($0.255 per share) |
|
|
|
|
|
|
|
|
(1,688 |
) |
|
|
|
|
|
|
|
|
|
|
(1,688 |
) |
ESOP shares released for allocation (34,473 shares) |
|
|
|
|
|
124 |
|
|
|
|
|
|
|
|
|
|
|
165 |
|
|
289 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances at September 30, 2009 |
|
$ |
99 |
|
$ |
62,684 |
|
$ |
37,296 |
|
$ |
(36,070 |
) |
$ |
(1,912 |
) |
$ |
(1,877 |
) |
$ |
60,220 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances at January 1, 2010 |
|
$ |
99 |
|
$ |
62,794 |
|
$ |
37,588 |
|
$ |
(36,720 |
) |
$ |
(1,574 |
) |
$ |
(1,822 |
) |
$ |
60,365 |
|
Comprehensive income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income |
|
|
|
|
|
|
|
|
2,679 |
|
|
|
|
|
|
|
|
|
|
|
2,679 |
|
Other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
299 |
|
|
|
|
|
299 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,978 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of 22,568 treasury shares |
|
|
|
|
|
|
|
|
|
|
|
(201 |
) |
|
|
|
|
|
|
|
(201 |
) |
Amortization and tax effect of Stock-based compensation |
|
|
|
|
|
130 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
130 |
|
Dividends ($0.27 per share) |
|
|
|
|
|
|
|
|
(1,758 |
) |
|
|
|
|
|
|
|
|
|
|
(1,758 |
) |
ESOP shares released for allocation (34,473 shares) |
|
|
|
|
|
141 |
|
|
|
|
|
|
|
|
|
|
|
164 |
|
|
305 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances at September 30, 2010 |
|
$ |
99 |
|
$ |
63,065 |
|
$ |
38,509 |
|
$ |
(36,921 |
) |
$ |
(1,275 |
) |
$ |
(1,658 |
) |
$ |
61,819 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to unaudited condensed consolidated financial statements.
5
ROME BANCORP, INC. AND SUBSIDIARY
C
ondensed Consolidated Statements of Cash Flows
For the Nine Months Ended September 30, 2010 and 2009
(unaudited) (in thousands)
|
|
|
|
|
|
|
|
|
|
2010 |
|
2009 |
|
||
|
|
|
|
|
|
||
Cash flows from operating activities: |
|
|
|
|
|
|
|
Net income |
|
$ |
2,679 |
|
$ |
2,263 |
|
Adjustments to reconcile net income to net cash |
|
|
|
|
|
|
|
Provided by operating activities: |
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
364 |
|
|
385 |
|
Increase in accrued interest receivable |
|
|
(5 |
) |
|
(1 |
) |
Provision for loan losses |
|
|
540 |
|
|
200 |
|
Net amortization on securities |
|
|
87 |
|
|
(2 |
) |
Proceeds from sales of loans |
|
|
14,345 |
|
|
7,325 |
|
Net gain on loans sold |
|
|
(291 |
) |
|
(119 |
) |
Originations of loans held for sale |
|
|
(14,054 |
) |
|
(7,206 |
) |
Gain on sale of real estate owned |
|
|
(410 |
) |
|
(2 |
) |
Gain on securities transactions |
|
|
(156 |
) |
|
(26 |
) |
(Decrease) increase in other liabilities |
|
|
(11 |
) |
|
468 |
|
Increase in cash surrender value of life insurance |
|
|
(294 |
) |
|
(306 |
) |
Increase (decrease) in other assets |
|
|
192 |
|
|
(145 |
) |
Allocation of ESOP shares |
|
|
305 |
|
|
289 |
|
Amortization of unearned stock-based compensation |
|
|
171 |
|
|
171 |
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities |
|
|
3,462 |
|
|
3,294 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
Net decrease in loans |
|
|
9,774 |
|
|
12,572 |
|
Proceeds from maturities and principal reductions of securities available for sale |
|
|
1,198 |
|
|
1,149 |
|
Purchases of securities available for sale |
|
|
(5,390 |
) |
|
(7,177 |
) |
Proceeds from sale of securities available for sale |
|
|
1,221 |
|
|
470 |
|
(Purchase) redemption of Federal Home Loan Bank stock |
|
|
(88 |
) |
|
123 |
|
Proceeds from maturities and principal reductions of securities held to maturity |
|
|
7 |
|
|
7 |
|
Proceeds from sale of real estate owned |
|
|
205 |
|
|
525 |
|
Additions to premises and equipment |
|
|
(248 |
) |
|
(129 |
) |
|
|
|
|
|
|
|
|
Net cash provided by investing activities |
|
|
6,679 |
|
|
7,540 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
(Decrease) increase in time deposits |
|
|
(2,252 |
) |
|
207 |
|
Increase in other deposits |
|
|
12,490 |
|
|
10,283 |
|
Repayments of borrowings |
|
|
(24,871 |
) |
|
(24,304 |
) |
Additional borrowings |
|
|
14,875 |
|
|
13,619 |
|
Purchase of treasury stock |
|
|
(201 |
) |
|
(1,408 |
) |
Dividends paid |
|
|
(1,758 |
) |
|
(1,688 |
) |
|
|
|
|
|
|
|
|
Net cash used in financing activities |
|
|
(1,717 |
) |
|
(3,291 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase in cash and cash equivalents |
|
|
8,424 |
|
|
7,543 |
|
Cash and cash equivalents at beginning of period |
|
|
7,574 |
|
|
9,579 |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period |
|
$ |
15,998 |
|
$ |
17,122 |
|
|
|
|
|
|
|
|
|
Condensed Consolidated Statements of Cash Flows continued on next page.
6
ROME BANCORP, INC. AND SUBSIDIARY
Condensed Consolidated Statements of Cash Flows
For the Nine Months Ended September 30, 2010 and 2009
(unaudited) (in thousands)
|
|
|
|
|
|
|
|
|
|
2010 |
|
2009 |
|
||
|
|
|
|
|
|
||
Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
|
Non-cash investing activities: |
|
|
|
|
|
|
|
Transfers from loans to other real estate |
|
$ |
65 |
|
$ |
192 |
|
Cash paid during the period for: |
|
|
|
|
|
|
|
Interest |
|
|
2,327 |
|
|
3,227 |
|
|
|||||||
Income taxes |
|
|
1,750 |
|
|
719 |
|
See accompanying notes to unaudited condensed consolidated financial statements.
7
ROME BANCORP, INC.
N
otes to Unaudited Condensed Consolidated Financial
Statements
(1) The accompanying unaudited condensed consolidated financial statements include the accounts of Rome Bancorp, Inc. (Rome Bancorp or the Company) and The Rome Savings Bank (the Bank), a wholly-owned subsidiary of the Company, as of September 30, 2010 and December 31, 2009 and for the three and nine month periods ended September 30, 2010 and 2009. All inter-company accounts and transactions have been eliminated in consolidation. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. In the opinion of management, the unaudited condensed consolidated financial statements include all necessary adjustments, consisting of normal recurring accruals, necessary for a fair presentation for the periods presented.
The Company believes that the disclosures are adequate to make the information presented not misleading; however, the results of operations and other data presented for the periods presented are not necessarily indicative of results to be expected for the entire fiscal year. Management has evaluated all significant events and transactions that occurred through the financial statement issuance date for potential recognition or disclosure in these condensed consolidated financial statements.
The data in the condensed consolidated balance sheet as of December 31, 2009 was derived from the Companys 2009 Annual Report on Form 10-K. That data, along with the interim financial information presented in the condensed consolidated balance sheets, statements of income, statements of shareholders equity and comprehensive income and statements of cash flows should be read in conjunction with the 2009 consolidated financial statements, including the notes thereto, included in the Companys Annual Report on Form 10-K.
Amounts in the prior periods consolidated financial statements are reclassified when necessary to conform with the current periods presentation.
(2) Earnings per Common Share
The Company has stock compensation awards with non-forfeitable dividend rights which are considered participating securities. The effect of including these participating securities in earnings per share computations is immaterial. ESOP shares are considered outstanding for this calculation unless unearned. Diluted earnings per common share include the dilutive effect of additional potential common shares from stock-based compensation plans.
8
The following summarizes the computation of earnings per share for the three and nine month periods ended September 30, 2010 and 2009.
(in thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Nine months ended
|
|
||||||||
|
|
|
|
|
|
||||||||
|
|
2010 |
|
2009 |
|
2010 |
|
2009 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Basic earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income |
|
$ |
838 |
|
$ |
908 |
|
$ |
2,679 |
|
$ |
2,263 |
|
Weighted average common shares outstanding |
|
|
6,781 |
|
|
6,879 |
|
|
6,787 |
|
|
6,917 |
|
Less: Average unallocated ESOP shares |
|
|
(255 |
) |
|
(301 |
) |
|
(267 |
) |
|
(313 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average basic shares |
|
|
6,526 |
|
|
6,578 |
|
|
6,520 |
|
|
6,604 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share |
|
$ |
0.13 |
|
$ |
0.14 |
|
$ |
0.41 |
|
$ |
0.34 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
838 |
|
$ |
908 |
|
$ |
2,679 |
|
$ |
2,263 |
|
Weighted average basic shares outstanding |
|
|
6,526 |
|
|
6,578 |
|
|
6,520 |
|
|
6,604 |
|
Effect of dilutive securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average diluted shares outstanding |
|
|
6,526 |
|
|
6,578 |
|
|
6,520 |
|
|
6,604 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share |
|
$ |
0.13 |
|
$ |
0.14 |
|
$ |
0.41 |
|
$ |
0.34 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock options for 354,000 shares of common stock were not considered in computing diluted earnings per common share for the three and nine month periods ended September 30, 2010 and 2009 because they were antidilutive. |
(3) Other Comprehensive Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Nine months ended
|
|
||||||||
|
|
(in thousands) |
|
||||||||||
|
|
|
|
||||||||||
|
|
2010 |
|
2009 |
|
2010 |
|
2009 |
|
||||
|
|
|
|
|
|
||||||||
Pension and postretirement adjustments |
|
$ |
76 |
|
$ |
94 |
|
$ |
232 |
|
$ |
282 |
|
Net change in unrealized gain on available-for-sale securities arising during the period |
|
|
225 |
|
|
180 |
|
|
422 |
|
|
244 |
|
Reclassification adjustment for net realized gain included in net income |
|
|
(35 |
) |
|
(26 |
) |
|
(156 |
) |
|
(26 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income, before tax |
|
|
266 |
|
|
248 |
|
|
498 |
|
|
500 |
|
Deferred tax effect |
|
|
(106 |
) |
|
(99 |
) |
|
(199 |
) |
|
(200 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income |
|
|
160 |
|
|
149 |
|
|
299 |
|
|
300 |
|
Net income |
|
|
838 |
|
|
908 |
|
|
2,679 |
|
|
2,263 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income |
|
$ |
998 |
|
$ |
1,057 |
|
$ |
2,978 |
|
$ |
2,563 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9
|
|
|
|
|
|
(4) |
Securities |
|
|
|
|
|
|
|
Securities are summarized as follows (In thousands): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
September 30, 2010 |
|
||||||||||
|
|
|
|
||||||||||
|
|
Amortized
|
|
Gross
|
|
Gross
|
|
Fair
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Available-for-sale: |
|
|
|
|
|
|
|
|
|
|
|
|
|
State and municipal obligations |
|
$ |
1,670 |
|
$ |
164 |
|
$ |
|
|
$ |
1,834 |
|
Corporate obligations |
|
|
10,709 |
|
|
358 |
|
|
1 |
|
|
11,066 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total debt securities |
|
|
12,379 |
|
|
522 |
|
|
1 |
|
|
12,900 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity and other securities |
|
|
430 |
|
|
6 |
|
|
|
|
|
436 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
12,809 |
|
$ |
528 |
|
$ |
1 |
|
$ |
13,336 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Held-to-maturity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Government securities |
|
$ |
1,310 |
|
$ |
56 |
|
$ |
|
|
$ |
1,366 |
|
Other bonds |
|
|
109 |
|
|
|
|
|
|
|
|
109 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,419 |
|
$ |
56 |
|
$ |
|
|
$ |
1,475 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2009 |
|
||||||||||
|
|
|
|
||||||||||
|
|
Amortized
|
|
Gross
|
|
Gross
|
|
Fair
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Available-for-sale: |
|
|
|
|
|
|
|
|
|
|
|
|
|
State and municipal obligations |
|
$ |
2,294 |
|
$ |
119 |
|
$ |
|
|
$ |
2,413 |
|
Corporate obligations |
|
|
6,597 |
|
|
85 |
|
|
39 |
|
|
6,643 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total debt securities |
|
|
8,891 |
|
|
204 |
|
|
39 |
|
|
9,056 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity and other securities |
|
|
872 |
|
|
96 |
|
|
|
|
|
968 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
9,763 |
|
$ |
300 |
|
$ |
39 |
|
$ |
10,024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Held-to-maturity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Government securities |
|
$ |
1,316 |
|
$ |
71 |
|
$ |
|
|
$ |
1,387 |
|
Mortgage-backed securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
GNMA |
|
|
1 |
|
|
|
|
|
|
|
|
1 |
|
Other bonds |
|
|
114 |
|
|
|
|
|
|
|
|
114 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,431 |
|
$ |
71 |
|
$ |
|
|
$ |
1,502 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All of the gross unrealized losses on available for sale securities at both September 30, 2010 and December 31, 2009 were less than one year in duration. The detail of these losses and the carrying value (at estimated fair value) of the underlying securities available for sale are summarized below (in thousands): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2010 |
|
December 31, 2009 |
|
||||||||
|
|
|
|
|
|
||||||||
|
|
Unrealized
|
|
Carrying
|
|
Unrealized
|
|
Carrying
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||
One year or less: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate obligations |
|
$ |
1 |
|
$ |
415 |
|
$ |
39 |
|
$ |
2,891 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
1 |
|
$ |
415 |
|
$ |
39 |
|
$ |
2,891 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10
|
|
|
Management evaluates securities for other than temporary impairment at least on a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. There were no investments deemed by management to be other than temporarily impaired at September 30, 2010. |
|
|
|
The following table presents the amortized cost and fair value of debt securities based on the contractual maturity date (in thousands). Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations without call or prepayment penalties. |
|
|
|
|
|
|
|
|
|
|
September 30, 2010 |
|
||||
|
|
|
|
||||
|
|
Amortized
|
|
Fair
|
|
||
|
|
|
|
|
|
||
Available-for-sale: |
|
|
|
|
|
|
|
Due within one year |
|
$ |
1,008 |
|
$ |
1,015 |
|
Due after one year through five years |
|
|
9,130 |
|
|
9,528 |
|
Due after five years through ten years |
|
|
2,241 |
|
|
2,357 |
|
Due after 10 years |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
12,379 |
|
$ |
12,900 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Held-to-maturity: |
|
|
|
|
|
|
|
Due within one year |
|
$ |
|
|
$ |
|
|
Due after one year through five years |
|
|
1,310 |
|
|
1,366 |
|
Due after five years through ten years |
|
|
|
|
|
|
|
Due after ten years |
|
|
109 |
|
|
109 |
|
|
|
|
|
|
|
|
|
|
|
$ |
1,419 |
|
$ |
1,475 |
|
|
|
|
|
|
|
|
|
|
|
|
Securities pledged at both September 30, 2010 and December 31, 2009 had a carrying amount of $1.3 million. These securities collateralize state and Treasury department programs. As of these dates, there were no holdings of securities of any one issuer in an amount greater than 10% of shareholders equity . |
11
(5) Loans
Loans are summarized as follows:
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
December 31,
|
|
||
|
|
|
|
|
|
||
|
|
(in thousands) |
|
||||
Mortgage loans: |
|
|
|
|
|
|
|
Residential (1-4 family) |
|
$ |
148,261 |
|
$ |
155,547 |
|
Commercial |
|
|
50,401 |
|
|
52,557 |
|
Construction and land |
|
|
3,893 |
|
|
4,381 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Mortgage loans |
|
|
202,555 |
|
|
212,485 |
|
|
|
|
|
|
|
|
|
Other loans: |
|
|
|
|
|
|
|
Commercial |
|
|
30,477 |
|
|
30,429 |
|
Automobile loans |
|
|
8,030 |
|
|
9,377 |
|
Property improvement and equipment |
|
|
22,290 |
|
|
19,251 |
|
Other consumer |
|
|
14,481 |
|
|
16,207 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Other loans |
|
|
75,278 |
|
|
75,264 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Loans |
|
$ |
277,833 |
|
$ |
287,749 |
|
|
|
|
|
|
|
|
|
Changes in the allowance for loan losses are summarized as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Nine months ended
|
|
||||||||
|
|
|
|
|
|
||||||||
|
|
(in thousands) |
|
||||||||||
|
|
2010 |
|
2009 |
|
2010 |
|
2009 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Balance at beginning of period |
|
$ |
2,523 |
|
$ |
2,105 |
|
$ |
2,132 |
|
$ |
1,936 |
|
Provision charged to operations |
|
|
75 |
|
|
|
|
|
540 |
|
|
200 |
|
Loans charged off |
|
|
(18 |
) |
|
(39 |
) |
|
(130 |
) |
|
(103 |
) |
Recoveries |
|
|
15 |
|
|
16 |
|
|
53 |
|
|
49 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at end of period |
|
$ |
2,595 |
|
$ |
2,082 |
|
$ |
2,595 |
|
$ |
2,082 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Companys recorded investment in loans that are considered impaired totaled $2.6 million and $698,000 at September 30, 2010 and December 31, 2009, respectively. These impaired loans carried allowances of $763,000 and $242,000 at September 30, 2010 and December 31, 2009, respectively. The average recorded investment in impaired loans was $2.0 million and $705,000 in the first nine months of 2010 and 2009, respectively. The Company recognized interest of $21,000 and $0 on impaired loans that were in compliance with all lending terms during the three month periods ended September 30, 2010 and 2009. Interest recognized on impaired loans that were in compliance with all lending terms during the nine months ended September 30, 2010 and 2009 was $63,000 and $0 respectively. |
12
|
|
|
The principal balances of loans not accruing interest, including consumer, real estate, mortgage and other loans not subject to impairment disclosures amounted to $1.9 million at both September 30, 2010 and December 31, 2009, respectively. The Company held loans 90 days past due and accruing interest totaling $186,000 and $43,000 at September 30, 2010 and December 31, 2009, respectively. The differences between the amount of interest income that would have been recorded if non-accrual loans had been paid in accordance with their original terms and the amount of interest income that was recorded during the nine month periods ended September 30, 2010 and 2009 was $14,300 and $58,800, respectively. There are no commitments to extend further credit on non-accruing loans. |
|
|
|
Included in the Companys classified assets at September 30, 2010 is a loan relationship comprised of three loans to the same borrower, which are part of a larger loan participation arrangement with other banks. The Companys portion of the arrangement totaled $4.6 million at September 30, 2010. The loans are secured by first and second mortgages on property held for development and several other unrelated properties. Due to the current economic climate, the borrower has been unable to develop the commercial real estate for sale in a timely fashion. This commercial credit was performing in accordance with contractual terms as of September 30, 2010 and was therefore accruing interest as of such date. However, management is uncertain as to the current and continued sources of debt service. Accordingly the Company has designated one of the loans as impaired. The loss related to this relationship could change if new information becomes available in future periods. Management is actively monitoring this credit and its associated collateral value. |
|
|
|
In addition to the impaired and non-performing loans, management has identified, through normal internal credit review procedures, $13.5 million in potential problem loans at September 30, 2010. Payments are current on $12.2 million or 90.4% of these loans. These problem loans are defined as loans not included as non-performing loans, but about which management has developed information regarding possible credit problems, which may cause the borrowers future difficulties in complying with loan repayments. The Company will continue to be aggressive in identifying, monitoring and resolving potential problem loans. |
|
|
|
A substantial portion of the Companys loans are mortgage and consumer loans in Oneida County. Accordingly, the ultimate collectibility of a substantial portion of the Companys loan portfolio is susceptible to changes in market conditions in this area. A majority of the Companys loan portfolio is secured by real estate. Other than general economic risks, management is not aware of any material concentrations of credit risk to any industry or individual borrower. The Company does not originate sub-prime mortgage loans and has not purchased investments collateralized by sub-prime loans. |
|
|
(6) |
Stock-Based Compensation |
|
|
|
On May 24, 2006, the Companys Board of Directors issued 354,000 stock options to directors and key employees with an exercise price equal to the market price of the Companys stock on that day. These options have a ten year life and vest ratably over a five year period or in certain cases upon retirement. At May 24, 2006, certain awardees met the retirement eligibility criteria and accordingly, stock-based compensation expense of $350,000 related to their options was expensed immediately. As of September 30, 2010, unrecognized compensation cost related to these options was $33,000. This expense is being amortized on a straight line basis over the remainder of the ninety month vesting period of the options. |
13
|
|
|
Following is a summary of the Companys 2010 year to date stock option activity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months ended September 30, 2010 |
|
|||||||
|
|
|
|
|
|||||||
|
|
|
Shares |
|
Weighted
|
|
Weighted
|
|
|||
|
|
|
|
|
|
|
|
|
|||
|
Options outstanding, beginning of period |
|
|
354,000 |
|
$ |
12.84 |
|
$ |
1.69 |
|
|
Exercised |
|
|
|
|
|
|
|
|
|
|
|
Granted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options outstanding at end of period |
|
|
354,000 |
|
$ |
12.84 |
|
$ |
1.69 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options exercisable at end of period |
|
|
283,200 |
|
$ |
12.84 |
|
$ |
1.69 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The aggregate intrinsic value of all options outstanding and exercisable at September 30, 2010 was $0. No stock options were exercised during the quarters ended September 30, 2010 or 2009. The intrinsic value of options exercised during the nine months ended September 30, 2010 and September 30, 2009 was $0 and $18,000, respectively. |
|
|
|
On May 24, 2006, the Companys Board of Directors awarded 168,300 shares of restricted stock to directors and certain key employees. These shares vest to the recipients ratably over a five year period, or in certain cases upon retirement and the related unrecognized compensation cost related to this grant will be expensed over the same period. At May 24, 2006, certain awardees met the retirement eligibility criteria and accordingly, stock-based compensation expense of $1.1 million related to their 2006 Recognition and Retention Plan (RRP) awards was expensed immediately. At September 30, 2010, the unrecognized compensation cost attributable to restricted stock awards was $119,000. The aggregate intrinsic value of restricted stock that is expected to vest in the future was $314,000 at September 30, 2010. |
|
|
|
For both of the three and nine month periods ended September 30, 2010 and 2009, the compensation cost for the Companys stock option plans was $13,000 and $38,000, respectively. For both of the three and nine month periods ended September 30, 2010 and 2009 compensation cost related to the restricted stock plan was $44,000 and $134,000, respectively. |
|
|
|
During the three month periods ended September 30, 2010 and 2009, dividends of $3,000 and $6,000, respectively, were paid on unvested shares with non-forfeitable dividend rights. During the nine month periods ended September 30, 2010 and 2009, dividends of $15,000 and $23,000, respectively, were paid on unvested shares with non-forfeitable dividend rights. These dividend amounts were not included in net income as compensation expense due to the expectation that all of the awards will vest. |
|
|
(7) |
Pension and Postretirement Medical Benefit Expenses |
|
|
|
The components of net periodic pension and postretirement benefit cost consisted of the following: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended September 30, |
|
||||||||||
|
|
|
|
|
||||||||||
|
|
|
(in thousands) |
|
||||||||||
|
|
|
Pension benefits |
|
Postretirement benefits |
|
||||||||
|
|
|
|
|
|
|
||||||||
|
|
|
2010 |
|
2009 |
|
2010 |
|
2009 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Components of net periodic pension cost: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service cost |
|
$ |
|
|
$ |
|
|
$ |
4 |
|
$ |
5 |
|
|
Interest cost |
|
|
88 |
|
|
87 |
|
|
34 |
|
|
37 |
|
|
Expected return on plan assets |
|
|
(115 |
) |
|
(108 |
) |
|
|
|
|
|
|
|
Amortization |
|
|
81 |
|
|
96 |
|
|
(4 |
) |
|
(2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net periodic pension cost |
|
$ |
54 |
|
$ |
75 |
|
$ |
34 |
|
$ |
40 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended September 30, |
|
||||||||||
|
|
|
|
|
||||||||||
|
|
|
(in thousands) |
|
||||||||||
|
|
|
Pension benefits |
|
Postretirement benefits |
|
||||||||
|
|
|
|
|
|
|
||||||||
|
|
|
2010 |
|
2009 |
|
2010 |
|
2009 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Components of net periodic pension cost: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service cost |
|
$ |
|
|
$ |
|
|
$ |
12 |
|
$ |
15 |
|
|
Interest cost |
|
|
264 |
|
|
261 |
|
|
102 |
|
|
111 |
|
|
Expected return on plan assets |
|
|
(345 |
) |
|
(324 |
) |
|
|
|
|
|
|
|
Amortization |
|
|
243 |
|
|
288 |
|
|
(12 |
) |
|
(6 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net periodic pension cost |
|
$ |
162 |
|
$ |
225 |
|
$ |
102 |
|
$ |
120 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In December of 2002, the Companys Board of Directors amended the defined benefit pension plan to cease the accrual of further benefits. For the fiscal year ended December 31, 2010, the Company expects to make no contributions to the defined benefit pension plan. |
|
|
(8) |
Fair Value Measurement |
|
|
|
The FASB ASC Topic 820, Financial Instruments, requires the disclosure of the estimated fair value of certain financial instruments. Fair value is the price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following fair value hierarchy is used in selecting inputs, with the highest priority given to Level 1, as these are the most transparent or reliable. |
|
|
|
Level 1 - Quoted prices for identical instruments in active markets that the Company has the ability to access as of the measurement date. |
|
Level 2 Significant other observable inputs, such as quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets. |
|
Level 3 Significant unobservable inputs that reflect the Companys own assumptions about the assumptions that market participants would use in pricing an instrument. |
|
|
|
The Company is responsible for the valuation process and as part of this process may use data from outside sources in establishing fair value. The Company performs due diligence to understand the inputs used or how the data was calculated or derived. The Company corroborates the reasonableness of external inputs in the valuation process. |
|
|
|
To estimate the fair value of its available for sale securities portfolio, the Company obtains current market pricing from quoted market sources or if such quoted sources are not available, current market pricing. The fair value of impaired loans with specific allocations of the allowance for loan losses is generally based on recent real estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are typically significant and result in a Level 3 classification of the inputs for determining fair value. |
15
|
|
|
Assets measured at fair value on a recurring basis are summarized below (in thousands of dollars). |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Level 1 |
|
Level 2 |
|
Level 3 |
|
Total
|
|
||||
|
September 30, 2010 |
|
|
|
|
|
|
|
|
|
||||
|
Available for sale securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
State and municipal obligations |
|
$ |
|
|
$ |
1,834 |
|
$ |
|
|
$ |
1,834 |
|
|
Corporate obligations |
|
|
|
|
|
11,066 |
|
|
|
|
|
11,066 |
|
|
Equity and other obligations |
|
|
36 |
|
|
400 |
|
|
|
|
|
436 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2009 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available for sale securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
State and municipal obligations |
|
$ |
|
|
|
2,413 |
|
|
|
|
|
2,413 |
|
|
Corporate obligations |
|
|
|
|
|
6,643 |
|
|
|
|
|
6,643 |
|
|
Equity and other obligations |
|
|
568 |
|
|
400 |
|
|
|
|
|
968 |
|
|
|
|
Assets measured at fair value on a non-recurring basis are summarized below (in thousands of dollars). |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Level 1 |
|
Level 2 |
|
Level 3 |
|
Total
|
|
||||
|
September 30, 2010 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impaired loans |
|
$ |
|
|
$ |
|
|
$ |
1,865 |
|
$ |
1,865 |
|
|
December 31, 2009 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impaired loans |
|
$ |
|
|
$ |
|
|
$ |
456 |
|
$ |
456 |
|
|
|
|
Impaired loans, which are measured for impairment using the fair value of the collateral for collateral dependent loans, had a cost basis of $2.6 million and $698,000 at September 30, 2010 and December 31, 2009, respectively. These loans carried a valuation allowance of $763,000 and $242,000 at September 30, 2010 and December 31, 2009. These loans required additions to the provision for loan losses of $18,000 and $526,000 for the three and nine month periods ended September 30, 2010. No additional provision for loan losses was required during the same periods of 2009. |
|
|
The following methods and assumptions were used by the Company in estimating fair values of financial instruments: |
|
|
|
|
Cash and cash equivalents: For these short-term instruments that generally mature in ninety days or less, the carrying value approximates fair value. |
|
|
|
Securities: The fair values of securities available for sale are determined by obtaining quoted prices on nationally recognized securities exchanges (Level 1 inputs) or if unavailable, current market pricing or by relying on the securities relationship to other benchmark quoted securities (Level 2 inputs). |
|
|
|
Federal Home Loan Bank Stock: It is not practicable to determine the value of FHLB stock due to restrictions placed on its transferability. |
|
|
|
Loans: The fair values of impaired loans are estimated as discussed previously. The fair values for all other loans are estimated using discounted cash flow analyses, using interest rates currently being offered for loans with similar terms to borrowers of similar credit rating. The Company has not considered market illiquidity in estimating the fair value of loans due to uncertain and inconsistent market pricing being experienced at measurement date. |
16
|
|
|
Accrued Interest: The fair value of accrued interest receivable and payable approximates carrying value. |
|
|
|
Deposits: The fair values of demand deposits (interest and non-interest checking) savings accounts and money market accounts are, by definition, equal to the amount payable on demand at the reporting date (i.e., their carrying amounts). Fair values for fixed-rate certificates of deposits are estimated using a discounted cash flow calculation that applies interest rates currently being offered on these products to a schedule of aggregated expected monthly maturities on time deposits. |
|
|
|
Borrowings: Fair values of long-term borrowings are estimated using a discounted cash flow approach, based on current market rates for similar borrowings. |
|
|
|
Off-balance-sheet instruments: Fair values for the Companys off-balance-sheet instruments (lines of credit and commitments to fund loans) are based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties credit standing. The fair value of these financial instruments is immaterial and has therefore been excluded from the table below. |
|
|
The estimated carrying values and fair values of the Companys financial instruments for September 30, 2010 and December 31, 2009 are as follows (in thousands): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2010 |
|
December 31, 2009 |
|
||||||||
|
|
|
|
|
|
|
||||||||
|
|
|
Carrying
|
|
Fair
|
|
Carrying
|
|
Fair
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Financial assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
15,998 |
|
$ |
15,998 |
|
$ |
7,574 |
|
$ |
7,574 |
|
|
Securities available for sale |
|
|
13,336 |
|
|
13,336 |
|
|
10,024 |
|
|
10,024 |
|
|
Securities held to maturity |
|
|
1,419 |
|
|
1,475 |
|
|
1,431 |
|
|
1,502 |
|
|
Loans, net |
|
|
275,238 |
|
|
282,188 |
|
|
285,617 |
|
|
288,524 |
|
|
Accrued interest receivable |
|
|
1,122 |
|
|
1,122 |
|
|
1,117 |
|
|
1,117 |
|
|
Financial liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest bearing deposits |
|
|
36,485 |
|
|
36,485 |
|
|
31,790 |
|
|
31,790 |
|
|
Interest bearing deposits |
|
|
190,392 |
|
|
190,667 |
|
|
184,849 |
|
|
185,320 |
|
|
Borrowings |
|
|
37,873 |
|
|
39,299 |
|
|
47,869 |
|
|
48,342 |
|
|
Accrued interest payable |
|
|
100 |
|
|
100 |
|
|
127 |
|
|
127 |
|
|
|
|
Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates. |
|
|
(9) |
Subsequent Events |
On October 12, 2010, Berkshire Hills Bancorp, Inc., the parent company of Berkshire Bank, and the Company entered into an Agreement and Plan of Merger pursuant to which the Company will merge with and into Berkshire Hills Bancorp, Inc. in a transaction valued at approximately $74 million. Under the terms of the Merger Agreement, 70% of the outstanding shares of Rome common stock will be converted into the right to receive 0.5658 shares of Berkshire common stock for each share of Rome and the remaining 30% of outstanding shares of Rome will be exchanged for $11.25 in cash. Rome stockholders will have the right to elect to receive cash or Berkshire common stock as outlined above, subject to 70% of Rome common stock
17
receiving Berkshire common stock and the proration procedures contained in the Merger Agreement. Concurrent with the merger, it is expected that the Bank will merge with and into Berkshire Bank. The transaction is subject to customary closing conditions, including the receipt of regulatory approvals and approval by the shareholders of the Company, and is currently expected to be completed in the first quarter of 2011. The directors and executive officers of Rome have agreed to vote their shares in favor of the approval of the Merger Agreement at the stockholders meeting to be held to vote on the proposed transaction. If the merger is not consummated under certain circumstances, Rome has agreed to pay Berkshire a termination fee of $3.5 million.
I tem 2. Management s Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
Statements included in this discussion and in future filings by Rome Bancorp, Inc. (Rome Bancorp or the Company) with the Securities and Exchange Commission, in Rome Bancorp press releases, and in oral statements made with the approval of an authorized executive officer, which are not historical or current facts, are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, and are subject to certain risks and uncertainties that could cause actual results to differ materially from historical earnings and those presently anticipated or projected. Rome Bancorp wishes to caution readers not to place undue reliance on such forward-looking statements, which speak only as of the date made. Rome Bancorp disclaims any obligation to subsequently revise any forward-looking statements to reflect events or circumstances after the date of such statements, or to reflect the occurrence of anticipated or unanticipated events.
General
The Company is a Delaware corporation regulated by the Office of Thrift Supervision (OTS) as a savings and loan holding company, whose sole business is conducted by its wholly-owned subsidiary, The Rome Savings Bank (the Bank). The Banks principal business is accepting deposits from the general public and using those deposits to make residential and commercial real estate loans, as well as commercial and consumer loans to individuals and small businesses primarily in Oneida County and also elsewhere in New York State. The Bank also invests in long-and short-term marketable securities and other liquid investments. Since its conversion to a federal charter on April 27, 2004, the Bank has been regulated by the OTS as a federal savings bank.
Overview
The Banks results of operations depend primarily on its net interest income, which is the difference between the interest income it earns on its loans and investments and the interest it pays on its deposits and other interest-bearing liabilities. Net interest income is affected by the relative amounts of interest-earning assets and interest-bearing liabilities and the interest rates earned or paid on these balances. The Banks operations are also affected by non-interest income, such as service fees and gains and losses on sales of securities, the provision for loan losses and non-interest expense such as salaries and employee benefits, occupancy costs, and other general and administrative expenses. Financial institutions in general, including the Bank, are significantly affected by economic conditions, competition and the monetary and fiscal policies of the federal government. Lending activities are influenced by the demand for and supply of housing, competition among lenders, interest rate conditions and availability of funds. The Banks operations and lending are principally concentrated in the Central New York area, therefore its operations and earnings are influenced by the economics of such area. Deposit balances and cost of funds are influenced by prevailing market rates on competing investments, customer preferences and levels of personal income and savings in the Banks primary market area.
18
Net income for the third quarter of 2010 decreased to $838,000, from the prior years third quarter net income of $908,000. The significant factors and trends impacting the third quarter of 2010, which are discussed in greater depth below, were as follows:
|
|
|
|
|
Net interest income before loan loss provision increased by $179,000, or 5.5%, from the same quarter last year principally due to a decrease in interest expense stemming from decreases in the rates paid on deposits and borrowings, as well as a decrease in average outstanding borrowings. |
|
|
The Company recorded a $75,000 provision for loan losses in the third quarter of 2010 versus no provision for loan losses in the third quarter of 2009. |
|
|
Other non-interest income increased by $143,000, or 21.5%, from the third quarter 2009 levels primarily due to increased gains on sales of residential loan originations into the secondary market. |
|
|
Non-interest expense increased by $453,000 to $3.0 million in the quarter ended September 30, 2010 from $2.6 million for the same period of 2009 primarily due to an increase in professional fees. |
|
|
Income tax expense for the third quarter of 2010 decreased to $324,000 compared to $460,000 in the third quarter of 2009, primarily due to lower pre-tax income and a reduction in New York State income taxes payable due to amendments in New York State taxation statutes. |
Critical Accounting Policies
The preparation of consolidated financial statements requires management to make estimates and assumptions. Changes in these estimates and assumptions affect the reported amounts of certain assets, liabilities, revenue and expenses. Different amounts could be reported under different conditions, or if different assumptions were used in the application of these accounting policies.
It is managements opinion that accounting estimates covering certain aspects of the business have more significance than others due to the relative importance of those areas to overall performance, or the level of subjectivity required in making these estimates. Management of the Company considers the accounting policy relating to the allowance for loan losses to be a critical accounting policy given the uncertainty in evaluating the level of the allowance required for probable credit losses and the material effect that such judgments can have on the results of operations. Managements quarterly evaluation of the adequacy of the allowance considers the Companys historical loan loss experience, review of specific loans, current economic conditions and such other factors considered appropriate to estimate losses. Management uses presently available information to estimate probable losses on loans; however, future additions to the allowance may be necessary based on changes in estimates, assumptions or economic conditions. Significant factors that could give rise to changes in these estimates include, but are not limited to, changes in economic conditions in the local area, concentrations of risk and declines of local property values.
The Companys critical policies and their application are reviewed periodically by the Audit Committee and the Board of Directors. All accounting policies are important, and as such, the Company encourages the reader to review each of the policies included in Note 2 to the consolidated financial statements reported on the Companys 2009 Annual Report on Form 10-K to obtain a better understanding of how its financial performance is reported.
Analysis of Net Interest Income
Average Balances, Interest and Average Yields - The following table sets forth certain information relating to the Companys average balance sheets and reflects the average yield on interest-earnings assets and average cost of interest-bearing liabilities, interest earned and interest paid for the periods indicated. Such yields and costs are derived by dividing income or expense by the average balance of interest-earning assets or interest-bearing liabilities, respectively, for the periods presented. Average balances are derived from daily balances over the periods indicated. The average balances for loans are net of allowance for loan losses, but
19
include non-accrual loans. Interest income on securities includes a tax equivalent adjustment for bank qualified municipals.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Balances, Interest and Average Yields |
|
||||||||||||||||
|
|
|
|
||||||||||||||||
|
|
For the three months ended September 30, 2010 |
|
For the three months ended September 30, 2009 |
|
||||||||||||||
|
|
|
|
|
|
||||||||||||||
|
|
Average
|
|
Interest
|
|
Average
|
|
Average
|
|
Interest
|
|
Average
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
(Dollars in thousands) |
|
||||||||||||||||
|
|
|
|
||||||||||||||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans |
|
$ |
274,143 |
|
$ |
4,007 |
|
|
5.80 |
% |
$ |
283,982 |
|
$ |
4,148 |
|
|
5.80 |
% |
Securities (1) |
|
|
17,408 |
|
|
179 |
|
|
4.08 |
|
|
12,689 |
|
|
159 |
|
|
4.98 |
|
Federal funds sold & other interest bearing deposits |
|
|
6,913 |
|
|
3 |
|
|
0.16 |
|
|
11,106 |
|
|
4 |
|
|
0.13 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest-earnings assets |
|
|
298,464 |
|
|
4,189 |
|
|
5.57 |
|
|
307,777 |
|
|
4,311 |
|
|
5.56 |
|
Noninterest-earning assets |
|
|
28,501 |
|
|
|
|
|
|
|
|
27,334 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
326,965 |
|
|
|
|
|
|
|
$ |
335,111 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders Equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings accounts |
|
$ |
85,498 |
|
$ |
86 |
|
|
0.40 |
|
$ |
83,681 |
|
$ |
84 |
|
|
0.40 |
|
Time deposits |
|
|
70,075 |
|
|
304 |
|
|
1.71 |
|
|
72,203 |
|
|
440 |
|
|
2.41 |
|
Money market accounts |
|
|
18,966 |
|
|
48 |
|
|
1.01 |
|
|
15,863 |
|
|
47 |
|
|
1.18 |
|
Other interest bearing deposits |
|
|
16,714 |
|
|
16 |
|
|
0.39 |
|
|
14,642 |
|
|
15 |
|
|
0.42 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest-bearing deposits |
|
|
191,253 |
|
|
454 |
|
|
0.94 |
|
|
186,389 |
|
|
586 |
|
|
1.25 |
|
Borrowings |
|
|
37,563 |
|
|
299 |
|
|
3.16 |
|
|
55,081 |
|
|
466 |
|
|
3.35 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest-bearing liabilities |
|
|
228,816 |
|
|
753 |
|
|
1.31 |
|
|
241,470 |
|
|
1,052 |
|
|
1.73 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing deposits |
|
|
34,685 |
|
|
|
|
|
|
|
|
30,059 |
|
|
|
|
|
|
|
Other liabilities |
|
|
3,922 |
|
|
|
|
|
|
|
|
5,266 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
|
267,423 |
|
|
|
|
|
|
|
|
276,795 |
|
|
|
|
|
|
|
Shareholders equity |
|
|
59,542 |
|
|
|
|
|
|
|
|
58,316 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders equity |
|
$ |
326,965 |
|
|
|
|
|
|
|
$ |
335,111 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
|
|
|
|
3,436 |
|
|
|
|
|
|
|
|
3,259 |
|
|
|
|
Tax equivalent adjustment on securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income per consolidated financial statements |
|
|
|
|
$ |
3,436 |
|
|
|
|
|
|
|
$ |
3,257 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest rate spread |
|
|
|
|
|
|
|
|
4.26 |
% |
|
|
|
|
|
|
|
3.83 |
% |
Net interest margin |
|
|
|
|
|
|
|
|
4.57 |
% |
|
|
|
|
|
|
|
4.20 |
% |
Ratio of interest-earning assets to interest-bearing liabilities |
|
|
|
|
|
|
|
|
1.30 |
x |
|
|
|
|
|
|
|
1.27 |
x |
(1) Includes tax equivalent adjustment for the Companys tax-exempt municipal securities.
20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Balances, Interest and Average Yields |
|
||||||||||||||||
|
|
|
|
||||||||||||||||
|
|
For
the nine months ended
|
|
For the nine months ended
|
|
||||||||||||||
|
|
|
|
|
|
||||||||||||||
|
|
Average
|
|
Interest
|
|
Average
|
|
Average
|
|
Interest
|
|
Average
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
(Dollars in thousands) |
|
||||||||||||||||
|
|
|
|
||||||||||||||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans |
|
$ |
281,644 |
|
$ |
12,125 |
|
|
5.76 |
% |
$ |
290,652 |
|
$ |
12,626 |
|
|
5.81 |
% |
Securities (1) |
|
|
15,704 |
|
|
513 |
|
|
4.37 |
|
|
10,457 |
|
|
372 |
|
|
4.76 |
|
Federal funds sold & other interest bearing deposits |
|
|
2,799 |
|
|
3 |
|
|
0.15 |
|
|
6,711 |
|
|
8 |
|
|
0.17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest-earnings assets |
|
|
300,147 |
|
|
12,641 |
|
|
5.63 |
|
|
307,820 |
|
|
13,006 |
|
|
5.65 |
|
Noninterest-earning assets |
|
|
27,967 |
|
|
|
|
|
|
|
|
27,601 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
328,114 |
|
|
|
|
|
|
|
$ |
335,421 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders Equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings accounts |
|
$ |
84,610 |
|
$ |
253 |
|
|
0.40 |
|
$ |
82,411 |
|
$ |
247 |
|
|
0.40 |
|
Time deposits |
|
|
71,143 |
|
|
967 |
|
|
1.82 |
|
|
72,424 |
|
|
1,464 |
|
|
2.70 |
|
Money market accounts |
|
|
17,649 |
|
|
134 |
|
|
1.01 |
|
|
14,886 |
|
|
147 |
|
|
1.32 |
|
Other interest bearing deposits |
|
|
15,362 |
|
|
44 |
|
|
0.38 |
|
|
13,970 |
|
|
42 |
|
|
0.40 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest-bearing deposits |
|
|
188,764 |
|
|
1,398 |
|
|
0.99 |
|
|
183,691 |
|
|
1,900 |
|
|
1.38 |
|
Borrowings |
|
|
39,782 |
|
|
902 |
|
|
3.03 |
|
|
56,321 |
|
|
1,359 |
|
|
3.23 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest-bearing liabilities |
|
|
228,546 |
|
|
2,300 |
|
|
1.35 |
|
|
240,012 |
|
|
3,259 |
|
|
1.82 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing deposits |
|
|
33,127 |
|
|
|
|
|
|
|
|
29,876 |
|
|
|
|
|
|
|
Other liabilities |
|
|
6,493 |
|
|
|
|
|
|
|
|
6,639 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
|
268,166 |
|
|
|
|
|
|
|
|
276,527 |
|
|
|
|
|
|
|
Shareholders equity |
|
|
59,948 |
|
|
|
|
|
|
|
|
58,894 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders equity |
|
$ |
328,114 |
|
|
|
|
|
|
|
$ |
335,421 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
|
|
|
|
10,341 |
|
|
|
|
|
|
|
|
9,747 |
|
|
|
|
Tax equivalent adjustment on securities |
|
|
|
|
|
(4 |
) |
|
|
|
|
|
|
|
(10 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income per consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
financial statements |
|
|
|
|
$ |
10,337 |
|
|
|
|
|
|
|
$ |
9,737 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest rate spread |
|
|
|
|
|
|
|
|
4.28 |
% |
|
|
|
|
|
|
|
3.83 |
% |
Net interest margin |
|
|
|
|
|
|
|
|
4.61 |
% |
|
|
|
|
|
|
|
4.23 |
% |
Ratio of interest-earning assets to interest-bearing liabilities |
|
|
|
|
|
|
|
|
1.31 |
x |
|
|
|
|
|
|
|
1.28 |
x |
(1) Includes tax equivalent adjustment for the Companys tax-exempt municipal securities.
21
Rate Volume Analysis The following table analyzes the dollar amount of changes in interest income and interest expense for major components of interest-earning assets and interest-bearing liabilities. It shows the amount of the change in interest income or expense caused by either changes in outstanding balances (volume) or changes in interest rates. The effect of a change in volume is measured by applying the average rate during the first period to the volume change between the two periods. The effect of changes in rate is measured by applying the change in rate between the two periods to the average volume during the first period. Changes attributable to both rate and volume, which cannot be segregated, have been allocated proportionately to the absolute value of the change due to volume and the change due to rate.
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Three
months ended September 30, 2010
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Nine
months ended September 30, 2010
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Three months ended September 30, 2009 |
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Nine months ended September 30, 2009 |
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Increases (decreases) due to |
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Increases (decreases) due to |
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Rate |
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Volume |
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Net |
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Rate |
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Volume |
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Net |
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(in thousands) |
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Assets: |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans |
|
$ |
(1 |
) |
$ |
(140 |
) |
$ |
(141 |
) |
$ |
(116 |
) |
$ |
(385 |
) |
$ |
(501 |
) |
Securities (1) |
|
|
(39 |
) |
|
59 |
|
|
20 |
|
|
(46 |
) |
|
187 |
|
|
141 |
|
Federal funds sold & other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest bearing deposits |
|
|
|
|
|
(1 |
) |
|
(1 |
) |
|
|
|
|
(5 |
) |
|
(5 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest-earnings assets |
|
|
(40 |
) |
|
(82 |
) |
|
(122 |
) |
|
(162 |
) |
|
(203 |
) |
|
(365 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings accounts |
|
|
|
|
|
2 |
|
|
2 |
|
|
(1 |
) |
|
7 |
|
|
6 |
|
Time deposits |
|
|
(123 |
) |
|
(13 |
) |
|
(136 |
) |
|
(471 |
) |
|
(26 |
) |
|
(497 |
) |
Money market accounts |
|
|
(8 |
) |
|
9 |
|
|
1 |
|
|
(40 |
) |
|
27 |
|
|
(13 |
) |
Other interest bearing deposits |
|
|
(1 |
) |
|
2 |
|
|
1 |
|
|
(2 |
) |
|
4 |
|
|
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest-bearing deposits |
|
|
(132 |
) |
|
|
|
|
(132 |
) |
|
(514 |
) |
|
12 |
|
|
(502 |
) |
Borrowings |
|
|
(19 |
) |
|
(148 |
) |
|
(167 |
) |
|
(58 |
) |
|
(399 |
) |
|
(457 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest-bearing liabilities |
|
|
(151 |
) |
|
(148 |
) |
|
(299 |
) |
|
(572 |
) |
|
(387 |
) |
|
(959 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change (1) |
|
$ |
111 |
|
$ |
66 |
|
$ |
177 |
|
$ |
410 |
|
$ |
184 |
|
$ |
594 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes tax equivalent adjustment for the Companys tax-exempt municipal securities.
Comparison of Financial Condition at September 30, 2010 and December 31, 2009:
Total assets at September 30, 2010 increased to $331.6 million compared to $329.9 million at December 31, 2009. The Companys net loan portfolio decreased by $10.4 million, or 3.6%, from $285.6 million at December 31, 2009 to $275.2 million at September 30, 2010. During the first nine months of 2010, the Company originated approximately $40.8 million of loans, compared to approximately $39.9 million of loans originated in the same period of 2009.
Total deposits increased to $226.9 million at September 30, 2010 from $216.6 million at December 31, 2009. During the first three quarters of 2010, savings deposits increased by $3.4 million, or 4.1%, and money market balances increased by $4.2 million, or 26.8%. Time deposits decreased by $2.3 million, or 3.1%, to $69.6 million at September 30, 2010 from $71.9 million at year end 2009. Balances of non-interest bearing deposits increased by $4.7 million, or 14.8%, while other interest bearing deposits increased by $209,000, or 1.4%, over the first nine months of 2010.
As a result of increased loan sale activity and increases in deposit balances, the Company continued to pay down debt during the first nine months of 2010. Borrowings from the Federal Home Loan Bank of New York (FHLB) decreased from $47.9 million at December 31, 2009 to $37.9 million at the end of the current quarter.
22
Comparison of Operating Results for the Three-Month Periods Ended September 30, 2010 and 2009
General
During the three months ended September 30, 2010, the Company recorded net income of $838,000, compared to $908,000 for the third quarter of 2009. The decrease in net income is comprised of an increase in net interest income before the provision for loan losses of $179,000, an increase in non-interest income of $143,000, and a decrease in income tax expense of $136,000, partially offset by an increase the provision for loan losses of $75,000, an increase in non-interest expense of $453,000.
Diluted earnings per share decreased to $0.13 per diluted share for the quarter ended September 30, 2010 from $0.14 per diluted share in the quarter ended September 30, 2009. Average diluted shares decreased to 6,526,000 for the third quarter of 2010 from 6,578,000 in the same period of 2009 due to the Companys stock repurchases over the past year.
Net Interest Income
Net interest income before loan loss provision for the quarter ended September 30, 2010 increased by $179,000, or 5.5%, compared to the same quarter of 2009. This increase is primarily attributable to a decrease in interest expense due to lower average balances and rates paid on interest bearing liabilities, partially offset by a decrease in interest income due to a decrease in the average balance of loans outstanding.
Interest Income
Interest income decreased to $4.2 million for the quarter ended September 30, 2010 from $4.3 million for the same quarter of 2009. Average loan balances for the third quarter of 2010 were $274.1 million, a decrease of $9.8 million from the average outstanding loans for the third quarter of 2009 as a result of continued sales of residential loan originations into the secondary market. The yield on the Companys loan portfolio was stable at 5.80% for both the quarter ended September 30, 2010 and the same period last year. The mix of the loan portfolio has changed slightly from the same period a year ago, with a larger percentage of the portfolio being in higher yielding commercial loans and mortgages, resulting in the stability of the overall portfolio yield in a period of declining rates. Interest income on securities increased by $22,000 from $157,000 for the quarter ended September 30, 2009 to $179,000 for the quarter ended September 30, 2010. The average balance of securities increased by $4.7 million, or 37.0%, from the third quarter of 2009 to $17.4 million for the current quarter while the tax equivalent yield on the Companys securities decreased to 4.08% from 4.98%.
Interest Expense
Interest expense decreased to $753,000 for the quarter ended September 30, 2010 from $1.1 million for the same quarter of 2009. Interest expense on deposits decreased to $454,000 for the quarter ended September 30, 2010 from $586,000 for the quarter ended September 30, 2009, due to lower rates paid on time deposits consistent with market trends over the past year. This was partially offset by an increase in the average balance of interest-bearing deposits to $191.3 million for the quarter ended September 30, 2010, from $186.4 million for the same period of 2009. Interest expense on borrowed funds decreased to $299,000 for the quarter ended September 30, 2010 from $466,000 for the comparative quarter of 2009 due to a decrease in both the average balances of borrowings and their interest rates in 2010. The average balance of borrowings decreased to $37.6 million in the current quarter compared to $55.1 million in the third quarter of 2009. Cash received from increased customer deposits and loan sales were utilized to repay borrowings as they matured. The rate on the Companys borrowings decreased to 3.16% during the third quarter of 2010 from 3.35% in the same quarter of 2009 as the Company repaid some of its longer maturity advances during the first quarter of 2010.
23
Provision for Loan Losses
The Company recorded a $75,000 provision for loan losses in the third quarter of 2010, compared to no loan loss provision in the same period of 2009. The additional provision was deemed necessary to cover an increase in the Companys level of non-performing loans. At September 30, 2010, non-performing loans as a percent of loans increased to 0.75% compared to 0.67% at December 31, 2009. Over the same nine month period, the allowance for loan losses as a percent of non-performing loans increased to 125.2% from 111.4%. The majority of the increase in non-performing loans is in the single family residential loan portfolio, which management believes to be adequately collateralized. The allowance for loan losses as a percentage of loans increased to 0.93% at September 30, 2010 compared to 0.74% at December 31, 2009.
Included in the Companys classified assets at September 30, 2010 is a loan relationship comprised of three loans to the same borrower, which are part of a larger loan participation arrangement with other banks. The Companys portion of the arrangement totaled $4.6 million at September 30, 2010. The loans are secured by first and second mortgages on property held for development and several other unrelated properties. Due to the current economic climate, the borrower has been unable to develop the commercial real estate for sale in a timely fashion. This commercial credit was performing in accordance with contractual terms as of September 30, 2010 and was therefore accruing interest as of such date. However, management is uncertain as to the current and continued sources of debt service. Accordingly the Company has designated one of the loans as impaired. The loss related to this relationship could change if new information becomes available in future periods. Management is actively monitoring this credit and its associated collateral value.
As described in Note 5 of the Notes to the Consolidated Financial Statements, the Company has in place procedures to identify and monitor potential problem loans. The Company regularly reviews problem loans and other assets in its portfolio to determine whether any require classification in accordance with the Companys policy and applicable regulations. In determining the appropriate provision for loan losses, management considers the level of and trend in non-performing loans, the level of and trend in net loan charge-offs, the dollar amount and mix of the loan portfolio, as well as general economic conditions and real estate trends in the Companys market area, which can impact the inherent risk of loss in the Companys loan portfolio.
Non-Interest Income and Non-Interest Expense
Non-interest income increased by $143,000 to $808,000 in the third quarter of 2010 from $665,000 in the same period of 2009, largely due to an increase in gains realized on the sale of residential mortgage originations into the secondary market.
Non-interest expense increased by $453,000 to $3.0 million in the third quarter of 2010 from $2.6 million in the same quarter of 2009. The majority of this increase is attributable to professional fees incurred in relation to the Companys impending merger with Berkshire Hills Bancorp, Inc., as more fully described in Note 9 of the Notes to the Consolidated Financial Statements. Income tax expense for the third quarter of 2010 decreased to $324,000 from $460,000 in the same period of 2009, primarily due to both the decrease in pre-tax income as well as recently enacted amendments to New York States banking tax statutes, which reduced the Companys income tax expense by $67,000.
Comparison of Operating Results for the Nine-Month Periods Ended September 30, 2010 and 2009
General
During the nine months ended September 30, 2010, the Company recorded net income of $2.7 million compared to $2.3 million for the first nine months of 2009. The increase resulted from an increase in net interest income before the provision for loan losses of $600,000 and an increase in non-interest income of
24
$739,000, partially offset by an increase in the provision for loan losses of $340,000, an increase in non-interest expense of $407,000 and a $176,000 increase in income tax expense.
Diluted earnings per share increased to $0.41 per diluted share for the nine months ended September 30, 2010 in comparison to $0.34 per diluted share for the same period of 2009. The year-to-date 2010 average outstanding diluted shares decreased to 6,520,000 from 6,604,000 due to ongoing treasury stock purchases.
Net Interest Income
Net interest income before loan loss provision for the nine months ended September 30, 2010 increased by $600,000 or 6.2%, as compared to the same period of 2009. This increase is attributable to a decrease in the average balance of borrowings and rates paid on deposits and borrowings, partially offset by a reduction in the average balances of and yields earned on assets.
Interest Income
Interest income decreased to $12.6 million for the nine month period ended September 30, 2010 from $13.0 million for the first three quarters of 2009. Average earning assets for the first nine months of 2010 decreased to $300.1 million from $307.8 million in the same period of 2009. This reduction is due to the sale of a substantial portion of the Companys newly originated residential loans into the secondary market over the past year. The yield on earning assets decreased slightly to 5.63% for the nine months ended September 30, 2010, from 5.65% for the first nine months of 2009. Average loan balances for the first nine months of 2010 were $281.6 million, a decrease of $9.1 million from the average outstanding loans for the same period of 2009. The yield on the Companys loan portfolio for the nine months ended September 30, 2010 was 5.76% compared to a yield of 5.81% for the same period last year. Interest income on securities increased $147,000 from $362,000 for the nine months ended September 30, 2009 to $509,000 for the nine months ended September 30, 2010 as the average balance of the investment portfolio increased to $15.7 million for the first nine months of 2010 from $10.5 million during the same period of 2009. Finally, interest income on federal funds sold and other interest bearing deposits decreased by $5,000 to $3,000 for the first nine months of 2010 from the same period in 2009 due to decreases in average balances of these funds.
Interest Expense
Interest expense decreased to $2.3 million for the nine months ended September 30, 2010 from $3.3 million for the nine months ended September 30, 2009. Interest expense on deposits decreased to $1.4 million for the nine months ended September 30, 2010 from $1.9 million for the nine months ended September 30, 2009 as a result of a decrease in the cost of these deposits from 1.38% to 0.99% partially offset by an increase in the average balance of deposits to $188.8 million this year from $183.7 million during the first three quarters of 2009. Interest expense on borrowed funds decreased to $902,000 for the nine months ended September 30, 2010 from $1.4 million for the comparative period of 2009 primarily due to a decrease in the average balance of borrowings to $39.8 million in the current year to date as compared to $56.3 million in the nine months ended September 30, 2009. Deposit growth and proceeds of loan sales have been used to pay down advances upon their maturity. The rate paid on these borrowings decreased from 3.23% for the nine months ended September 30, 2009 to 3.03% for the same period this year.
Provision for Loan Losses
The Company recorded a $540,000 provision for loan losses in the first nine months of 2010 versus a $200,000 provision in the same period of 2009. The 2010 year to date provision was recorded to provide for decline in value of collateral for a commercial loan and an increase in non-performing loans. The Companys ratio of non-performing loans to total loans increased to 0.75% at September 30, 2010, from 0.67% at the previous year end. The majority of the Companys non-performing loans are in the single family residential loan
25
portfolio which management believes is well collateralized. The Companys year to date net loan charge-offs were $77,000 in the first nine months of 2010, compared to $54,000 for the same period of 2009.
In determining the appropriate provision for loan losses, management considers the level of and trend in non-performing loans, the level of and trend in net loan charge-offs, the dollar amount and mix of the loan portfolio, as well as general economic conditions and real estate trends in the Companys market area, which can impact the inherent risk of loss in the Companys loan portfolio.
Non-Interest Income and Non-Interest Expense
Non-interest income increased to $2.6 million for the first three quarters of 2010 from $1.8 million for the first nine months of 2009. The increase is attributable to gains on sales of real estate and securities and an increase in fee revenue. In the first quarter of 2010, the Company sold a parcel of non-operating commercial real estate, realizing a gain of $418,000. During the first nine months of 2010, the Company recorded gains of $156,000 on the sales of five investment securities; by contrast in the same period of 2009 one security was sold at a gain of $26,000.
Non-interest expense increased to $8.4 million in the first nine months of 2010 compared to $8.0 million in the same period of 2009, principally due to the increase in professional fees incurred, as more described in the discussion for the third quarter, above.
Income tax expense for the first nine months of 2010 increased to $1.3 from $1.1 million in the same period of 2009, principally due to the increase in pre-tax income.
Liquidity and Capital Resources
The Companys primary sources of funds consist of deposits, scheduled amortization and prepayments of loans, maturities of investments, interest-bearing deposits at other financial institutions and funds provided from operations. The Bank also has borrowing capacity with the FHLB that allows it to borrow up to $57.8 million which is collateralized by a portion of the residential mortgage portfolio. At September 30, 2010, the Bank had no outstanding borrowings against this line of credit, and outstanding advances and amortizing notes totaling $37.9 million. At September 30, 2010, the Company also had approximately $8.5 million in unused short term borrowing capacity at the Federal Reserve Bank of New York, which is collateralized by a portion of the consumer loan portfolio.
Loan repayments and maturing investment securities are a relatively predictable source of funds. However, deposit flows, calls of investment securities, and prepayments of loans and mortgage-backed securities are strongly influenced by interest rates, general and local economic conditions, and competition in the marketplace. These factors reduce the predictability of the timing of these sources of funds.
The Companys primary investing activities include the origination of loans and, to a lesser extent, the purchase of investment securities. For the nine months ended September 30, 2010, the Company originated loans of approximately $40.8 million, compared to $39.9 million of loans in the same period of 2009. For the past several quarters, the Company has been selling a large percentage of its residential loan originations into the secondary market. Loan sales through nine months of 2010 were $14.1 million, compared to $7.3 million for the same period of 2009. These loans are sold with the Company retaining the servicing for the purchasers. Year to date 2010 security purchases were $5.4 million compared to $7.2 million for the same period of 2009.
At September 30, 2010, the Company had loan commitments to borrowers of approximately $13.4 million, and available letters and lines of credit of approximately $19.1 million.
Time deposit accounts scheduled to mature within one year were $49.7 million at September 30, 2010. Based on the Companys deposit retention experience and current pricing strategy, the Company anticipates
26
that a significant portion of these time deposits will remain with the Company. The Company is committed to maintaining a strong liquidity position; therefore, the Company monitors its liquidity position on a daily basis. The Company anticipates that the Company will have sufficient funds to meet the Companys current funding commitments. The marginal cost of new funding however, whether from deposits or borrowings from the FHLB, will be carefully considered as the Company monitors its liquidity needs. Therefore, in order to minimize its cost of funds, the Company may consider additional borrowings from the FHLB in the future.
At September 30, 2010, the Bank exceeded each of the applicable regulatory capital requirements. The Banks leverage (Tier 1) capital at September 30, 2010 was $57.5 million, or 17.25% of adjusted assets. In order to be classified as well-capitalized by the OTS, the Bank is required to have leverage (Tier 1) capital of $16.7 million, or 5.0% of adjusted assets. To be classified as a well-capitalized bank by the OTS, the Bank must also have a Tier 1 risk-based capital ratio of 6% and a total risk-based capital ratio of 10.0%. At September 30, 2010, the Bank had a Tier 1 risk-based capital ratio of 23.78% and a total risk-based capital ratio of 24.85%.
The Company paid cash dividends of $0.27 per share during the nine months ended September 30, 2010 totaling $1.8 million.
During the first nine months of 2010, $201,000 was expended to repurchase 22,568 shares of the Companys common stock.
The Company does not anticipate any material capital expenditures, nor does it have any balloon or other payments due on any long-term obligations or any off-balance sheet items other than the commitments and unused lines of credit noted above.
Off-Balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Companys financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
I tem 3. Quantitative and Qualitative Disclosures about Market Risk
There has been no material change in the Companys interest rate risk profile since December 31, 2009. For a more complete discussion of the Companys asset and liability management policies, see Managements Discussion and Analysis of Financial Condition and Results of Operations in the Companys 2009 Form 10-K.
I tem 4. Controls and Procedures
Management, including the Companys President and Chief Executive Officer and the Chief Financial Officer, has evaluated the effectiveness of the Companys disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this report. Based upon that evaluation, the President and Chief Executive Officer and the Chief Financial Officer concluded that the disclosure controls and procedures were effective to ensure that information required to be disclosed in the reports the Company files and submits under the Exchange Act is (i) recorded, processed, summarized and reported as and when required and (ii) accumulated and communicated to the Companys management, including the Companys President and Chief Executive Officer and the Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
There have been no significant changes in the Companys internal controls over financial reporting identified in connection with the evaluation that occurred during the Companys last fiscal quarter that has materially affected, or that is reasonably likely to materially affect, the Companys internal control over financial reporting.
27
|
|
Legal Proceedings |
Following the public announcement of the execution of the merger agreement between Rome Bancorp and Berkshire Hills Bancorp, on October 18, 2010, Stephen Bushansky filed a stockholder class action lawsuit in the Supreme Court of the State of New York, County of the Bronx, and, on October 27, 2010, James and Liliana DiCastro filed a stockholder class action lawsuit in the Chancery Court of the State of Delaware, each against Rome Bancorp, Inc., Berkshire Hills Bancorp, Inc., and the directors of Rome Bancorp, Inc. Each lawsuit purports to be brought on behalf of all of Rome Bancorps public stockholders and alleges that the directors of Rome Bancorp breached their fiduciary duties to Rome Bancorps stockholders by failing to take steps necessary to obtain a fair and adequate price for Rome Bancorps common stock. The lawsuit seeks to enjoin the proposed merger from proceeding and seeks unspecified compensatory and/or rescissory damages on behalf of Rome Bancorps stockholders. Each lawsuit is in a preliminary stage. Rome Bancorp believes that the lawsuits are meritless and intends to vigorously defend itself against the allegations.
|
|
Risk Factors |
The recent adoption of regulatory reform legislation may have a material effect on our operations and capital requirements.
On July 21, 2010, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Reform Act). The Reform Act is intended to address perceived weaknesses in the U.S. financial regulatory system and to prevent future economic and financial crises. There are many provisions of the Reform Act which are to be implemented through regulations to be adopted by the federal bank regulatory agencies within specified time frames following the effective date of the Reform Act, which creates a risk of uncertainty as to the effect that such provisions will ultimately have. We do not believe that the Reform Act will have a material impact on our core operations. However, we believe the following provisions of the Reform Act will have an impact on us, though it is not possible for us to determine at this time whether and to what extent the Reform Act will have a material effect on our business, financial condition or results of operations:
|
|
|
New Regulatory Regime . On July 21, 2011, unless the Secretary of the Treasury opts to delay such date for up to an additional nine months, the OTS will be eliminated and the OCC will take over the regulation of all federal savings associations, such as Rome Bancorp. The FRB will acquire the OTSs authority over all savings and loan holding companies, such as Rome Bancorp, and will also become the supervisor of all subsidiaries of savings and loan holding companies other than depository institutions. As a result, we will now be subject to regulation, supervision and examination by two federal banking agencies, the OCC and the FRB, rather than just by the OTS, as is currently the case. The Reform Act also provides for the creation of the Bureau of Consumer Financial Protection, or the CFPB. Although the CFPB will have only limited supervisory authority over institutions with less than $10 billion in assets, such as Rome Bancorp, Inc., the establishment of the CFPB could result in more stringent consumer protection regulations than those imposed by bank regulatory agencies previously. |
|
|
|
Consolidated Holding Company Capital Requirements . The Reform Act requires the federal banking agencies to establish consolidated risk-based and leverage capital requirements for insured depository institutions, depository institution holding companies and systemically important nonbank financial companies. These requirements must be no less than those to which insured depository institutions are currently subject, and the new requirements will effectively eliminate the use of trust preferred securities as a component of Tier 1 capital for depository institution holding companies of our size. As a result, on |
28
|
|
|
the fifth anniversary of the effective date of the Reform Act, we will become subject to consolidated capital requirements to which we have not been subject to previously. |
|
|
|
Roll Back of Federal Preemption . The Reform Act significantly rolls back the federal preemption of state consumer protection laws that is currently enjoyed by federal savings associations and national banks by (i) requiring that a state consumer financial law prevent or significantly interfere with the exercise of a federal savings associations or national banks powers before it can be preempted, (ii) mandating that any preemption decision be made on a case by case basis rather than a blanket rule and (iii) ending the applicability of preemption to subsidiaries and affiliates of national banks and federal savings associations. As a result, we may now be subject to state consumer protection laws in each state where we do business, and those laws may be interpreted and enforced differently in different states. |
The Reform Act also includes provisions, subject to further rulemaking by the federal bank regulatory agencies, that may affect our future operations, including provisions that create minimum standards for the origination of mortgages, restrict proprietary trading by banking entities, restrict the sponsorship of and investment in hedge funds and private equity funds by banking entities and that remove certain obstacles to the conversion of savings associations to national banks. We will not be able to determine the impact of these provisions until final rules are promulgated to implement these provisions and other regulatory guidance is provided interpreting these provisions.
|
|
Unregistered Sales of Equity Securities and Use of Proceeds |
The following table provides information with respect to purchases made by or on behalf of the Company or any affiliated purchases (as defined in Rule 106-18 (a)(3) under the Securities Exchange Act of 1934) of the Companys common stock during the quarter ended September 30, 2010.
COMPANY PURCHASES OF EQUITY SECURITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period |
|
(a) Total Number
|
|
(b) Average Price
|
|
(c) Total Number of
|
|
(d) Maximum
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||
July 1, 2010 through July 31, 2010 |
|
|
|
|
|
|
|
|
|
|
|
189,894 |
|
August 1, 2010 through August 31, 2010 |
|
|
|
|
|
|
|
|
|
|
|
189,894 |
|
September 1, 2010 through September 30, 2010 |
|
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|
|
|
|
|
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|
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189,894 |
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|
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Total |
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|
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189,894 |
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Defaults Upon Senior Securities |
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None. |
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Submission of Matters to a Vote of Security Holders |
29
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None. |
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Other Information |
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None. |
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Exhibits |
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2.1 |
Amended and Restated Plan of Conversion and Agreement and Plan of Reorganization. (1) |
2.2 |
Agreement and Plan of merger dated as of October 12, 2010 by and between Berkshire Hills Bancorp, Inc. and |
|
Rome Bancorp, Inc. (9) |
3.1 |
Certificate of Incorporation of New Rome Bancorp, Inc. (1) |
3.2 |
Bylaws of New Rome Bancorp, Inc. (1) |
4.1 |
Form of Stock Certificate of New Rome Bancorp, Inc. (1) |
10.1 |
Form of Employee Stock Ownership Plan of Rome Bancorp, Inc. (2) |
10.2 |
Amendment No. 1 to Employee Stock Ownership Plan of Rome Bancorp, Inc. (1) |
10.3 |
Amendment No. 2 to Employee Stock Ownership Plan of Rome Bancorp, Inc. (1) |
10.4 |
Form of Executive Employment Agreement by and between Charles M. Sprock and Rome Bancorp, Inc. (2) |
10.5 |
Amended and restated form of One Year Change in Control Agreement by and among certain officers and Rome Bancorp, Inc. and The Rome Savings Bank. (8) |
10.6 |
Amended and restated form of Employment Agreement between New Rome Bancorp, Inc. and Charles M. Sprock. (8) |
10.7 |
Amended and restated form of Employment Agreement between The Rome Savings Bank and Charles M. Sprock. (8) |
10.8 |
Rome Bancorp, Inc. 2000 Stock Option Plan. (3) |
10.9 |
Rome Bancorp, Inc. 2000 Recognition and Retention Plan. (3) |
10.10 |
Amended and Restated Benefit Restoration Plan of Rome Bancorp, Inc. (4) |
10.11 |
Amended and Restated Directors Deferred Compensation Plan of Rome Bancorp, Inc. (4) |
10.12 |
Loan Agreement by and between the Employee Stock Ownership Plan Trust of Rome Bancorp, Inc. and Rome Bancorp, Inc. (5) |
10.13 |
Amendment No. 3 to the Employee Stock Ownership Plan of Rome Bancorp, Inc. (6) |
10.14 |
Rome Bancorp, Inc. 2006 Stock Option Plan. (7) |
10.15 |
Rome Bancorp, Inc. 2006 Recognition and Retention Plan. (7) |
31.1 |
Rule 13a-14a/15d-14a Certification. |
31.2 |
Rule 13a-14a/15d-14a Certification. |
32.1 |
Section 1350 Certification. |
32.2 |
Section 1350 Certification. |
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(1) |
Incorporated by reference to Rome Bancorp, Inc.s Form S-1 (Registration No. 333-121245), filed with the Commission on December 14, 2004, as amended. |
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(2) |
Incorporated by reference to Rome Bancorp, Inc.s Form SB-2 (Registration No. 333-80487), filed with the Commission on June 11, 1999, as amended. |
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(3) |
Incorporated by reference to Rome Bancorp, Incs Proxy Statement on Schedule 14A, filed with the Commission on April 5, 2000 and amended on April 2, 2001. |
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(4) |
Incorporated by reference to Rome Bancorp, Inc.s Form 8-K filed with the Commission on December 27, 2005. |
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(5) |
Incorporated by reference to Rome Bancorp, Inc.s Form 8-K filed with the Commission on March 29, 2005. |
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(6) |
Incorporated by reference to Rome Bancorp, Inc.s Form 8-K filed with the Commission on August 29, 2005. |
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(7) |
Incorporated by reference to Rome Bancorp, Inc.s Form S-8 filed with the Commission on May 19, 2006, as amended. |
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(8) |
Incorporated by reference to Rome Bancorp, Inc.s Form 8-K filed with the Commission on December 3, 2007. |
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(9) |
Incorporated by reference to Rome Bancorp, Inc.s Form 8-K filed with the Commission on October 12, 2010. |
30
Pursuant to the requirement of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
R OME B ANCORP, I NC.
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Name |
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Title |
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Date |
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/s/Charles M. Sprock |
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Chairman of the Board, President and Chief Executive Officer (Principal Executive Officer) |
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November 8, 2010 |
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Charles M. Sprock |
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/s/David C. Nolan |
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Executive Vice President and Chief Financial Officer (Principal Financial Officer) |
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November 8, 2010 |
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David C. Nolan |
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/s/Mary Faith Messenger |
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Vice President and Controller (Principal Accounting Officer) |
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November 8, 2010 |
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Mary Faith Messenger |
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31
1 Year Rome Bancorp, Inc. (MM) Chart |
1 Month Rome Bancorp, Inc. (MM) Chart |
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