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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Auburn Bancorp Inc (PK) | USOTC:ABBB | OTCMarkets | 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% | 8.46 | 8.36 | 8.80 | 1 | 13:00:01 |
(Mark
One)
|
|
x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
For the quarterly
period ended:
March
31, 2009
|
|
or
|
|
o
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
For
the transition period from ___________ to
____________
|
000-53370
|
||
(Commission
File Number)
|
Auburn
Bancorp, Inc.
|
||
(Exact
name of registrant as specified in its
charter)
|
United
States
|
26-2139168
|
|
(State
or other jurisdiction
|
(IRS
Employer
|
|
of
incorporation)
|
Identification
No.)
|
256
Court Street, P.O. Box 3157, Auburn, Maine 04212
|
||
(Address
and zip code of principal executive offices)
|
||
(207)
782-0400
|
||
(Registrant’s
telephone number, including area code)
|
None
|
||
(Former
name, former address and former fiscal year, if changed since last
report)
|
Large accelerated
filer
o
|
Accelerated filer
o
|
|
Non-accelerated
filer
o
|
Smaller reporting
company
x
|
Page
|
|||||
PART
I. FINANCIAL INFORMATION (Unaudited)
|
|||||
Item
1.
|
Financial Statements
|
||||
Consolidated
Balance Sheets as of March 31, 2009 (Unaudited) and June 30,
2008
|
3
|
||||
Consolidated
Statements of Income (Unaudited) for the Three Months Ended March 31, 2009
and 2008
|
4
|
||||
Consolidated
Statements of Income (Unaudited) for the Nine Months Ended March 31, 2009
and 2008
|
5
|
||||
Consolidated
Statements of Changes in Stockholders’ Equity (Unaudited) for the Nine
Months Ended March 31, 2009 and 2008
|
6
|
||||
Consolidated
Statements of Cash Flows (Unaudited) for the Nine Months Ended March 31,
2009 and 2008
|
7
|
||||
Notes
to Consolidated Financial Statements (Unaudited)
|
8
|
||||
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition and
Results of Operations
|
13
|
|||
Item
3.
|
Quantitative and
Qualitative Disclosures About Market Risk
|
21
|
|||
Item
4.
|
Controls and
Procedures
|
21
|
|||
PART
II. OTHER INFORMATION
|
|||||
I
tem
1.
|
Legal
Proceedings
|
21
|
|||
I
tem
1A.
|
Risk
Factors
|
21
|
|||
I
tem
2.
|
Unregistered
Sales of Equity Securities and Use of
Proceeds
|
22
|
|||
I
tem
3.
|
Defaults
Upon Senior Securities
|
22
|
|||
I
tem
4.
|
Submission of
Matters to a Vote of Security Holders
|
22
|
|||
I
tem
5.
|
Other
Information
|
22
|
|||
I
tem
6.
|
Exhibits
|
23
|
|||
Signatures
|
24
|
ITEM
1.
|
FINANCIAL
STATEMENTS
|
March
31,
2009
|
June
30,
2008
|
|||||||
(Unaudited)
|
(Audited)
|
|||||||
ASSETS
|
||||||||
Cash
and due from banks
|
$ | 1,140,618 | $ | 1,782,970 | ||||
Interest-earning
deposits
|
681,871 | 229,517 | ||||||
Total
cash and cash equivalents
|
1,822,489 | 2,012,487 | ||||||
Certificates
of deposit
|
5,330,620 | 2,257,504 | ||||||
Investment
securities available for sale, at fair value
|
1,206,484 | 1,433,732 | ||||||
Federal
Home Loan Bank stock, at cost
|
1,095,000 | 901,100 | ||||||
Loans
|
61,413,257 | 57,021,649 | ||||||
Less
allowance for loan losses
|
(380,470 | ) | (345,550 | ) | ||||
Net
loans
|
61,032,787 | 56,676,099 | ||||||
Property
and equipment, net
|
1,931,013 | 1,945,233 | ||||||
Foreclosed
real estate
|
228,220 | 87,383 | ||||||
Accrued
interest receivable:
|
||||||||
Investments
|
38,055 | 23,725 | ||||||
Mortgage-backed
securities
|
1,545 | 2,034 | ||||||
Loans
|
238,736 | 249,547 | ||||||
Prepaid
expenses and other assets
|
182,801 | 710,448 | ||||||
Total
assets
|
$ | 73,107,750 | $ | 66,299,292 | ||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||||||
Liabilities:
|
||||||||
Deposits
|
$ | 47,435,925 | $ | 46,073,155 | ||||
Federal
Home Loan Bank advances
|
19,650,000 | 15,350,000 | ||||||
Accrued
interest and other liabilities
|
133,703 | 269,752 | ||||||
Deferred
income taxes
|
71,007 | 88,786 | ||||||
Total
liabilities
|
67,290,635 | 61,781,693 | ||||||
Stockholders’
equity:
|
||||||||
Preferred
stock, 1,000,000 shares authorized, no shares issued or
outstanding
|
— | — | ||||||
Common
stock, $.01 par value per share, 10,000,000 shares authorized, 503,284
shares issued and outstanding at March 31, 2009,
none
at June 30, 2008
|
5,033 | — | ||||||
Additional
paid-in-capital
|
1,470,825 | — | ||||||
Retained
earnings
|
4,584,107 | 4,566,433 | ||||||
Accumulated
other comprehensive loss
|
(83,350 | ) | (48,834 | ) | ||||
Unearned
compensation (ESOP shares)
|
(159,500 | ) | — | |||||
Total
stockholders’ equity
|
5,817,115 | 4,517,599 | ||||||
Total
liabilities and stockholders’ equity
|
$ | 73,107,750 | $ | 66,299,292 |
Three
Months Ended March 31,
|
||||||||
2009
|
2008
|
|||||||
(Unaudited)
|
||||||||
Interest
and dividend income:
|
||||||||
Interest
on loans
|
$ | 939,745 | $ | 951,511 | ||||
Interest
on investments and other interest-earning deposits
|
62,972 | 64,810 | ||||||
Dividends
on Federal Home Loan Bank stock
|
— | 13,628 | ||||||
Total
interest and dividend income
|
1,002,717 | 1,029,949 | ||||||
Interest
expense:
|
||||||||
Interest
on deposits and escrow accounts
|
297,597 | 403,121 | ||||||
Interest
on Federal Home Loan Bank advances
|
187,462 | 193,934 | ||||||
Total
interest expense
|
485,059 | 597,055 | ||||||
Net
interest income
|
517,658 | 432,894 | ||||||
Provision
for loan losses
|
7,052 | 4,410 | ||||||
Net
interest income after provision for loan losses
|
510,606 | 428,484 | ||||||
Non-interest
income:
|
||||||||
Net
gain on sales of loans
|
27,527 | 44,514 | ||||||
Net
loss on sale of other assets
|
(14,754 | ) | — | |||||
Other
non-interest income
|
19,108 | 62,220 | ||||||
Total
non-interest income
|
31,881 | 106,734 | ||||||
Non-interest
expenses:
|
||||||||
Salaries
and employee benefits
|
223,717 | 224,536 | ||||||
Occupancy
expense
|
26,374 | 26,138 | ||||||
Depreciation
|
26,915 | 24,397 | ||||||
Federal
deposit insurance premiums
|
8,770 | 1,284 | ||||||
Computer
charges
|
37,013 | 37,728 | ||||||
Advertising
expense
|
22,259 | 10,999 | ||||||
Consulting
expense
|
16,152 | 9,405 | ||||||
Other
operating expenses
|
128,745 | 65,709 | ||||||
Total
non-interest expenses
|
489,945 | 400,196 | ||||||
Income
before income taxes
|
52,542 | 135,022 | ||||||
Income
tax expense
|
21,238 | 40,600 | ||||||
Net
income
|
$ | 31,304 | $ | 94,422 | ||||
Net
income per common share
|
$ | .06 | N/A |
Nine
Months Ended March 31,
|
||||||||
2009
|
2008
|
|||||||
(Unaudited)
|
||||||||
Interest
and dividend income:
|
||||||||
Interest
on loans
|
$ | 2,859,720 | $ | 2,812,111 | ||||
Interest
on investments and other interest-earning deposits
|
174,178 | 197,639 | ||||||
Dividends
on Federal Home Loan Bank stock
|
12,496 | 42,994 | ||||||
Total
interest and dividend income
|
3,046,394 | 3,052,744 | ||||||
Interest
expense:
|
||||||||
Interest
on deposits and escrow accounts
|
1,001,544 | 1,270,479 | ||||||
Interest
on Federal Home Loan Bank advances
|
563,262 | 549,183 | ||||||
Total
interest expense
|
1,564,806 | 1,819,662 | ||||||
Net
interest income
|
1,481,588 | 1,233,082 | ||||||
Provision
for (recovery of) loan losses
|
53,655 | (2,614 | ) | |||||
Net
interest income after provision for (recovery of) loan
losses
|
1,427,933 | 1,235,696 | ||||||
Non-interest
income:
|
||||||||
Net
gain on sales of loans
|
32,371 | 53,839 | ||||||
Net
loss on sale of other assets
|
(15,355 | ) | — | |||||
Other
non-interest income
|
68,178 | 129,863 | ||||||
Total
non-interest income
|
85,194 | 183,702 | ||||||
Non-interest
expenses:
|
||||||||
Salaries
and employee benefits
|
669,500 | 654,251 | ||||||
Occupancy
expense
|
86,492 | 78,204 | ||||||
Depreciation
|
77,828 | 76,328 | ||||||
Federal
deposit insurance premiums
|
19,267 | 3,843 | ||||||
Computer
charges
|
116,492 | 111,047 | ||||||
Advertising
expense
|
42,641 | 34,224 | ||||||
Consulting
expense
|
36,624 | 28,380 | ||||||
Impairment
write-down on investment securities available for sale
|
60,270 | — | ||||||
Other
operating expenses
|
335,733 | 178,604 | ||||||
Total
non-interest expenses
|
1,444,847 | 1,164,881 | ||||||
Income
before income taxes
|
68,280 | 254,517 | ||||||
Income
tax expense
|
47,838 | 76,300 | ||||||
Net
income
|
$ | 20,442 | $ | 178,217 | ||||
Net
income per common share
|
$ | .05 | N/A |
Common
Stock
|
Additional
Paid-
in-
Capital
|
Retained
Earnings
|
Accumulated
Other
Comprehensive
Loss
|
Unearned
Compensation
(ESOP
Shares)
|
Total
|
|||||||||||||||||||
Balance,
June 30, 2007
|
$ | — | $ | — | $ | 4,362,193 | $ | (12,392 | ) | $ | — | $ | 4,349,801 | |||||||||||
Comprehensive income | ||||||||||||||||||||||||
Net
income
|
— | — | 178,217 | — | — | 178,217 | ||||||||||||||||||
Other
comprehensive loss
|
||||||||||||||||||||||||
Unrealized
holding loss on securities, net of taxes of $(30,545)
|
— | — | — | (59,293 | ) | — | (59,293 | ) | ||||||||||||||||
Total
comprehensive income
|
— | — | 178,217 | (59,293 | ) | — | 118,924 | |||||||||||||||||
Effect
of adoption of SFAS No. 156, net of tax effect of $17,812
|
— | — | 53,437 | — | — | 53,437 | ||||||||||||||||||
Balance,
March 31, 2008
|
$ | — | $ | — | $ | 4,593,847 | $ | (71,685 | ) | $ | — | $ | 4,522,162 | |||||||||||
Balance,
June 30, 2008
|
$ | — | $ | — | $ | 4,566,433 | $ | (48,834 | ) | $ | — | $ | 4,517,599 | |||||||||||
Comprehensive loss | ||||||||||||||||||||||||
Net
income
|
— | — | 20,442 | — | — | 20,442 | ||||||||||||||||||
Other
comprehensive loss
|
||||||||||||||||||||||||
Unrealized
holding loss on securities, net of taxes of $(38,273)
|
— | — | — | (74,294 | ) | — | (74,294 | ) | ||||||||||||||||
Less
reclassification adjustment for items included in net income, net of taxes
of $20,492
|
— | — | — | 39,778 | — | 39,778 | ||||||||||||||||||
Total
comprehensive loss
|
— | — | 20,442 | (34,516 | ) | — | (14,074 | ) | ||||||||||||||||
Shares
issued in public offering, net of offering costs of $766,504 (226,478
shares)
|
2,265 | 1,496,011 | — | — | — | 1,498,276 | ||||||||||||||||||
Shares
issued to MHC (276,806 shares)
|
2,768 | — | (2,768 | ) | — | — | — | |||||||||||||||||
Capitalization
of MHC
|
— | (25,000 | ) | — | — | — | (25,000 | ) | ||||||||||||||||
Shares
purchased by ESOP (17,262 shares)
|
— | — | — | — | (172,620 | ) | (172,620 | ) | ||||||||||||||||
Common
stock held by ESOP committed to be released (1,312 shares)
|
— | (186 | ) | — | — | 13,120 | 12,934 | |||||||||||||||||
Balance,
March 31, 2009
|
$ | 5,033 | $ | 1,470,825 | $ | 4,584,107 | $ | (83,350 | ) | $ | (159,500 | ) | $ | 5,817,115 |
Nine
Months Ended
March
31,
|
||||||||
2009
|
2008
|
|||||||
Cash
flows from operating activities
|
||||||||
Net
income
|
$ | 20,442 | $ | 178,217 | ||||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||
Depreciation
|
77,828 | 76,328 | ||||||
Net
accretion of discounts on investment securities available for
sale
|
(9,931 | ) | (2,169 | ) | ||||
Provision
for (recovery of) loan losses
|
53,655 | (2,614 | ) | |||||
Deferred
income tax benefit
|
— | 17,620 | ||||||
Other-than-temporary
impairment on investment securities available for sale
|
60,270 | — | ||||||
Gain
on sales of loans
|
(32,371 | ) | (53,839 | ) | ||||
ESOP
compensation expense
|
12,934 | — | ||||||
Net
decrease (increase) in prepaid expenses and other assets
|
569,130 | (165,772 | ) | |||||
Net
decrease (increase) in accrued interest receivable
|
(3,030 | ) | 9,624 | |||||
Net
increase (decrease) in accrued interest payable and other
liabilities
|
(136,049 | ) | 42,834 | |||||
Net
cash provided by operating activities
|
612,878 | 100,229 | ||||||
Cash
flows from investing activities:
|
||||||||
Purchase
of investment securities available for sale
|
(250,000 | ) | (576,519 | ) | ||||
Proceeds
from sales of investment securities available for sale
|
— | 1,258,630 | ||||||
Proceeds
from maturities and principal paydowns on investment securities available
for sale
|
374,614 | 117,701 | ||||||
Proceeds
from sale of other real estate owned
|
70,057 | — | ||||||
Net
change in certificates of deposit
|
(3,073,116 | ) | (1,762,327 | ) | ||||
Net
increase in loans to customers
|
(4,630,349 | ) | (1,714,438 | ) | ||||
Purchase
of Federal Home Loan Bank stock
|
(193,900 | ) | — | |||||
Capital
expenditures
|
(63,608 | ) | (20,264 | ) | ||||
Net
cash used in investing activities
|
(7,766,302 | ) | (2,697,217 | ) | ||||
Cash
flows from financing activities:
|
||||||||
Advances
from Federal Home Loan Bank
|
4,500,000 | 3,021,000 | ||||||
Repayment
of advances from Federal Home Loan Bank
|
(3,000,000 | ) | (771,000 | ) | ||||
Net
change in short term borrowings
|
2,800,000 | — | ||||||
Net
increase in deposits
|
1,362,770 | 504,435 | ||||||
Proceeds
from issuance of common stock, net of offering costs
|
1,498,276 | — | ||||||
Capitalization
of MHC
|
(25,000 | ) | — | |||||
Cash
provided to ESOP for purchases of shares
|
(172,620 | ) | — | |||||
Increase
in reorganization costs
|
— | (281,725 | ) | |||||
Net
cash provided by financing activities
|
6,963,426 | 2,472,710 | ||||||
Net
decrease in cash and cash equivalents
|
(189,998 | ) | (124,278 | ) | ||||
Cash
and cash equivalents, beginning of period
|
2,012,487 | 3,413,330 | ||||||
Cash
and cash equivalents, end of period
|
$ | 1,822,489 | $ | 3,289,052 | ||||
Supplementary
cash flow information:
|
||||||||
Cash
paid during the period for:
|
||||||||
Interest
|
$ | 1,564,982 | $ | 1,820,259 | ||||
Taxes
|
$ | 120,143 | $ | 19,800 | ||||
Transfer
of loans to foreclosed real estate
|
$ | 197,951 | $ | — |
1.
|
Basis
of Presentation
|
The
financial information included herein presents the financial condition and
results of operations for Auburn Bancorp, Inc. and its wholly-owned
subsidiary, Auburn Savings Bank, FSB as of March 31, 2009 and for the
interim periods ended March 31, 2009 and 2008. The financial information
is unaudited; however, in the opinion of management, the information
reflects all adjustments, consisting of normal recurring adjustments that
are necessary to make the financial statements not misleading for a fair
presentation. The results shown for the nine months ended March 31, 2009
and 2008 are not necessarily indicative of the results to be obtained for
a full year. The accompanying consolidated financial statements have been
prepared in conformity with U.S. generally accepted accounting principles
(“GAAP”) and with the rules and regulations of the Securities and Exchange
Commission for interim financial reporting. Accordingly they do not
include all of the information and footnotes required for complete
financial statements. These interim financial statements should be read in
conjunction with the audited financial statements for the year ended June
30, 2008 included in the Company’s annual report on Form 10-K (File No.
000-53370).
|
|
Since
the reorganization discussed in Note 2 was effective on August 15, 2008,
the June 30, 2008 financial statements do not include the holding company,
Auburn Bancorp, Inc.
|
|
In
preparing financial statements in conformity with accounting principles
generally accepted in the United States of America, management is required
to make estimates and assumptions that affect the reported amounts of
assets and liabilities as of the date of the balance sheet and reported
amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
|
|
Material
estimates that are particularly susceptible to significant change in the
near term relate to the determination of the allowance for loan losses and
valuation of foreclosed real estate. In connection with the determination
of these estimates, management obtains independent appraisals for
significant properties.
|
|
2.
|
Reorganization
|
On
January 11, 2008, the Board of Directors of Auburn Savings Bank (the
“Bank”) adopted a Plan of Reorganization From a Mutual Savings Bank to a
Mutual Holding Company and Stock Issuance Plan (the “Plan”) under which
Auburn Savings Bank reorganized into a mutual holding company structure.
As part of the reorganization, Auburn Savings Bank converted to a federal
stock savings bank and became a wholly-owned subsidiary of Auburn Bancorp,
Inc. (the “Company”), and the Company became a majority-owned subsidiary
of Auburn Mutual Holding Company (the “MHC”). In addition, the Company
conducted a stock offering pursuant to the laws of the United States of
America and the rules and regulations of the Office of Thrift Supervision
(“OTS”). Following completion of the reorganization and stock offering,
the MHC owns 55.0% of the outstanding common stock of the Company and the
minority public shareholders own 45.0%. Shares of the Company’s common
stock were offered on a first priority basis in a subscription offering to
eligible account holders, tax-qualified employee plans, and other members
of the Bank. Shares remaining after the conclusion of the subscription
offering were offered for sale in a community offering. So long as the MHC
is in existence, the MHC will be required to own at least a majority of
the voting stock of the Company.
|
|
Net
proceeds of $1.5 million were raised in the stock offering, after
deduction of expenses of $766,000 and excluding $25,000 used to capitalize
the MHC and $173,000 which was loaned by the Company to a trust for the
Employee Stock Ownership Plan (the “ESOP”), enabling the ESOP to purchase
17,262 shares of common stock in the stock offering, equal to 3.43% of the
shares of common stock sold in the stock offering, for the benefit of the
Bank’s employees.
|
The
Company may not declare or pay a cash dividend on, or repurchase any of
its common stock, if the effect thereof would cause the regulatory capital
of Auburn Savings Bank to be reduced below the amount required under OTS
rules and regulations.
|
|
Auburn
Bancorp, Inc.’s common stock is quoted on the OTC Bulletin Board under the
symbol “ABBB.”
|
|
3.
|
Impact
of Recent Accounting Standards
|
In
September 2006, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 157,
Fair
Value Measurements
. This Statement defines fair value, establishes
a framework for measuring fair value in accordance with U.S. generally
accepted accounting principles, and expands disclosures about fair value
measurements. This Statement is effective for the Company on July 1, 2008,
with earlier adoption permitted for fiscal year 2008, and has not had a
material impact on the Company’s financial statements. In February 2008,
FASB issued FASB Staff Position (FSP) FAS 157-2 which delays by one year
the effective date of SFAS No. 157 for certain types of nonfinancial
assets and nonfinancial liabilities. In October 2008, FASB issued FSP FAS
157-3,
Determining
the Fair Value of a Financial Asset When the Market for That Asset Is Not
Active
. FSP FAS 157-3 clarifies the application of SFAS No. 157 in
a market that is not active and provides an example to illustrate key
considerations in determining the fair value of a financial asset when the
market for that financial asset is not active. Management has adopted FSP
FAS 157-3 and there was no material impact on the financial statements of
the Company.
|
|
In
April 2009, FASB issued FSP FAS 157-4,
Determining
Fair Value When the Volume and Level of Activity for the Asset or
Liability Have Significantly Decreased and Identifying Transactions That
Are Not Orderly
. FSP FAS 157-4 relates to determining fair values
when there is no active market or where the price inputs being used
represent distressed sales. The FSP provides guidance in determining when
and how to use modeled values, as opposed to broker price quotes. The
FSP should result in a greater use of models for estimating fair value, as
well as more consistent approaches in modeling. This Statement will be
effective for interim and annual reporting periods ending after June 15,
2009. This Statement does not require any new fair value measurements.
Management does not expect the application of this Statement will have a
material effect on the financial statements of the
Company.
|
|
In
April 2009, FASB issued FSP FAS 115-2,
Recognition
and Presentation of Other-Than-Temporary Impairments
. FSP FAS 115-2
is intended to bring greater consistency to the timing of impairment
recognition, and provide greater clarity to investors about credit and
noncredit components of impaired debt securities that are not expected to
be sold. Under the FSP, for many securities with other than temporary
impairment, only the amount of the estimated credit loss is recorded
through earnings, while the remaining mark-to-market loss is recognized
through other comprehensive income or loss. The change is retroactive,
meaning entities will reclassify amounts back into retained earnings
related to non-credit-related market losses on certain investments held at
the beginning of the period. This Statement will be effective for interim
and annual reporting periods ending after June 15, 2009. Management does
not expect the implementation of FSP FAS 115-2 during the second quarter
of 2009 will have a material impact on the financial statements of the
Company.
|
In
April 2009, FASB issued FSP FAS 107-1,
Interim
Disclosures about Fair Value of Financial Instruments
. FSP FAS
107-1 relates to fair value disclosures for any financial instruments that
are not currently reflected on the balance sheet of companies at fair
value. Prior to issuing this FSP, fair values for these assets and
liabilities were only disclosed annually. This FSP now requires these
disclosures on a quarterly basis, providing qualitative and quantitative
information about fair value estimates for all financial instruments not
measured on the balance sheet at fair value. This Statement will be
effective for interim and annual reporting periods ending after June 15,
2009. Management will be adding this interim disclosure to the Company’s
quarterly reports beginning with the quarter ending September 30,
2009.
|
|
On
February 15, 2007, FASB issued SFAS No. 159,
The
Fair Value Option for Financial Assets and Financial Liabilities
,
which provides companies with an option to report selected financial
assets and liabilities at fair value. SFAS No. 159 also establishes
presentation and disclosure requirements designed to facilitate
comparisons between companies that choose different measurement attributes
for similar types of assets and liabilities. This Statement is effective
for the Company’s 2009 fiscal year, with early adoption permitted for the
Company’s 2008 fiscal year, provided that the Company also adopts SFAS No.
157 for fiscal year 2008. This Statement has not had an effect on the
Company’s financial statements as the Company has not applied the fair
value option.
|
|
In
March 2008, FASB issued SFAS No. 161,
Disclosures
about Derivative Instruments and Hedging Activities - an amendment of SFAS
No. 133
. SFAS No. 161 is intended to enhance the current disclosure
framework in SFAS No. 133. This Statement has the same scope as SFAS No.
133. SFAS No. 133 requires that objectives for using derivative
instruments be disclosed in terms of underlying risk and accounting
designation. The disclosures required by SFAS No. 161 better convey the
purpose of derivative use in terms of the risk that the entity is
intending to manage, the fair values of the derivative instruments and
their gains and losses in a tabular format, as well as information about
credit-risk-related contingent features. This Statement is effective for
financial statements issued for fiscal years and interim periods beginning
after November 15, 2008. Management implemented SFAS No. 161, which did
not have a material impact on the financial statements of the Company, as
both derivative contracts expired in January and March
2009.
|
|
4.
|
Income
Per Share
|
Basic
income per share is determined by dividing net income available to common
stockholders by the adjusted weighted average number of common shares
outstanding during the period. The adjusted outstanding common shares
equals the gross number of common shares issued less unallocated shares of
the ESOP. Net income per common share is not applicable for the three or
nine months ended March 31, 2008, as the Company did not become a public
entity until August 15, 2008.
|
|
Net
income per common share for the three and nine months ended March 31, 2009
is based on the
following:
|
Three
Months Ended
March
31, 2009
|
Nine
Months Ended
March
31, 2009
|
|||||||||
Net
income
|
$ | 31,304 | $ | 20,442 | ||||||
Weighted
average common shares outstanding
|
503,284 | 420,628 | ||||||||
Less:
Average unallocated ESOP shares
|
(15,950 | ) | (13,633 | ) | ||||||
Adjusted
weighted average common shares outstanding
|
487,334 | 406,995 | ||||||||
Income
per common share
|
$ | .06 | $ | .05 |
5.
|
Comprehensive
Income or Loss
|
Accounting
principles generally accepted in the United States of America require that
recognized revenue, expenses, gains, and losses be included in net income
or loss. Although certain changes in assets and liabilities, such as
unrealized gains and losses on available for sale securities, are reported
as a separate component of the equity section of the balance sheet, such
items, along with net income, are components of comprehensive income or
loss.
|
|
The
components of total comprehensive income (loss) and related tax effects
for the three and nine months ended March 31, 2009 and 2008 are as
follows:
|
Three
months ended
March
31,
|
Nine
months ended
March
31,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Net
income
|
$ | 31,304 | $ | 94,422 | $ | 20,442 | $ | 178,217 | ||||||||
Other
comprehensive loss, net of tax:
|
||||||||||||||||
Unrealized
holding losses on securities available for sale arising during the
period
|
(52,297 | ) | (80,914 | ) | (112,567 | ) | (89,838 | ) | ||||||||
Reclassification
adjustment for items included in net income
|
— | — | 60,270 | — | ||||||||||||
Tax
effect
|
17,781 | 27,511 | 17,781 | 30,545 | ||||||||||||
Other
comprehensive loss, net of tax
|
(34,516 | ) | (53,403 | ) | (34,516 | ) | (59,293 | ) | ||||||||
Total
comprehensive income (loss)
|
$ | (3,212 | ) | $ | 41,019 | $ | (14,074 | ) | $ | 118,924 |
6.
|
Employee
Stock Ownership Plan
|
Shares
of the Company’s common stock purchased by the ESOP are held in a suspense
account until released for allocation to participants. Shares released are
allocated to each eligible participant based on the ratio of each such
participant’s compensation, as defined in the ESOP, to the total
compensation of all eligible plan participants. As the unearned shares are
released from suspense, the Company recognizes compensation expense equal
to the fair value of the ESOP shares committed to be released during the
period. To the extent that the fair value of the ESOP shares differs from
the cost of such shares, the difference is charged or credited to equity
as additional paid-in capital. Expense related to the ESOP for the three
and nine months ended March 31, 2009 totaled $2,000 and $13,000,
respectively. The fair value of the unallocated shares as of March 31,
2009 was
$159,500.
|
7.
|
Impairment
Write-Down on Investment Securities
|
In
accordance with SFAS No. 115,
Accounting
for Certain Investments in Debt and Equity Securities
and SEC Staff
Accounting Bulletin No. 59,
Accounting
for Non-current Marketable Securities
, the Company determined that
it would write down its investments in Federal National Mortgage
Association (FNMA) and Federal Home Loan Mortgage Corporation (FHLMC)
common stock in the quarter ended September 30, 2008 as a result of the
appointment of the Federal Housing Finance Agency as conservator over both
of the entities. The amount of the other-than-temporary impairment charge
was $60,270, the total amount of such FNMA and FHLMC common stock on the
Company’s books at that date.
|
|
The
Company did not record a tax benefit in connection with the impairment of
its FNMA and FHLMC common stock. Although the Company would realize a
capital loss if it sells the FNMA and FHLMC common stock, such capital
loss would result in a tax benefit to the Company only to the extent the
capital loss can be used to reduce capital gains available during the
applicable carryback and carryforward periods. The Company does not expect
those capital gains to be material in relation to the amount of the
other-than-temporary impairment charge.
|
|
8.
|
Fair
Value Measurement
|
SFAS
No. 157 defines fair value as the exchange price that would be received
for an asset or paid to transfer a liability (an exit price) in the
principal or most advantageous market for the asset or liability in an
orderly transaction between market participants on the measurement date.
SFAS No. 157 also establishes a fair value hierarchy which requires an
entity to maximize the use of observable inputs and minimize the use of
unobservable inputs when measuring fair value. The standard describes
three levels of inputs that may be used to measure fair
value:
|
|
Level
1: Quoted prices (unadjusted) or identical assets or liabilities in active
markets that the entity has the ability to access as of the measurement
date
|
|
Level
2: Significant other observable inputs other than Level 1 prices, such as
quoted prices for similar assets or liabilities, quoted prices in markets
that are not active, and other inputs that are observable or can be
corroborated by observable market data
|
|
Level
3: Significant unobservable inputs that reflect a company’s own
assumptions about the assumptions that market participants would use in
pricing an asset or liability
|
|
The
balances of financial assets and liabilities measured at fair value on a
recurring basis are as
follows:
|
Fair
Value Measurements at
March
31, 2009, Using
|
||||||||||||||||
Total
|
Quoted
Prices
In
Active
Markets
for
Identical
Assets
(Level
1)
|
Significant
Other
Observable
Inputs
(Level
2)
|
Significant
Unobservable
Inputs
(Level
3)
|
|||||||||||||
Assets:
|
||||||||||||||||
Investment
securities available for sale
|
$ | 1,206,484 | $ | — | $ | 1,206,484 | $ | — |
The
Company used the following methods and significant assumptions to estimate
fair value:
|
Securities
available for sale (market approach)
: The fair value of securities
available for sale are determined by obtaining quoted prices on nationally
recognized securities exchanges or matrix pricing, which is a mathematical
technique used widely in the industry to value debt securities without
relying exclusively on quoted prices for the specific securities, but
rather by relying on the securities’ relationship to other benchmark
quoted securities.
|
|
The
Company did not have any assets and liabilities measured at fair value on
a non-recurring basis at March 31, 2009.
|
|
ITEM
2.
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
Three
Months Ended March 31, 2009
Compared
to Three Months
Ended
March 31, 2008
|
||||||||||||
Volume
|
Rate
|
Net
change
|
||||||||||
Interest-earning
assets:
|
||||||||||||
Loans
|
$ | 100,000 | $ | (112,000 | ) | $ | (12,000 | ) | ||||
Investment
securities
|
(3,000 | ) | (14,000 | ) | (17,000 | ) | ||||||
Interest-earning
deposits
|
14,000 | (12,000 | ) | 2,000 | ||||||||
Total
interest-earning assets
|
$ | 111,000 | $ | (138,000 | ) | $ | (27,000 | ) | ||||
Interest-bearing
liabilities:
|
||||||||||||
Savings
deposits
|
$ | 1,000 | $ | — | $ | 1,000 | ||||||
NOW
accounts
|
— | 4,000 | 4,000 | |||||||||
Money
market accounts
|
4,000 | (22,000 | ) | (18,000 | ) | |||||||
Certificates
of deposit
|
4,000 | (96,000 | ) | (92,000 | ) | |||||||
Total
deposits
|
9,000 | (114,000 | ) | (105,000 | ) | |||||||
Federal
Home Loan Bank of Boston advances
|
47,000 | (54,000 | ) | (7,000 | ) | |||||||
Total
interest-bearing liabilities
|
$ | 56,000 | $ | (168,000 | ) | $ | (112,000 | ) | ||||
Change
in net interest income
|
$ | 55,000 | $ | 30,000 | $ | 85,000 |
Nine
Months Ended March 31, 2009
Compared
to Nine Months
Ended
March 31, 2008
|
||||||||||||
Volume
|
Rate
|
Net
change
|
||||||||||
Interest-earning
assets:
|
||||||||||||
Loans
|
$ | 271,000 | $ | (223,000 | ) | $ | 48,000 | |||||
Investment
securities
|
(18,000 | ) | (19,000 | ) | (37,000 | ) | ||||||
Interest-earning
deposits
|
20,000 | (37,000 | ) | (17,000 | ) | |||||||
Total
interest-earning assets
|
$ | 273,000 | $ | (279,000 | ) | $ | (6,000 | ) | ||||
Interest-bearing
liabilities:
|
||||||||||||
Savings
deposits
|
$ | 4,000 | $ | (2,000 | ) | $ | 2,000 | |||||
NOW
accounts
|
1,000 | 11,000 | 12,000 | |||||||||
Money
market accounts
|
15,000 | (61,000 | ) | (46,000 | ) | |||||||
Certificates
of deposit
|
13,000 | (250,000 | ) | (237,000 | ) | |||||||
Total
deposits
|
33,000 | (302,000 | ) | (269,000 | ) | |||||||
Federal
Home Loan Bank of Boston advances
|
51,000 | (37,000 | ) | 14,000 | ||||||||
Total
interest-bearing liabilities
|
$ | 84,000 | $ | (339,000 | ) | $ | (255,000 | ) | ||||
Change
in net interest income
|
$ | 189,000 | $ | 60,000 | $ | 249,000 |
ITEM
3.
|
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
|
ITEM
4.
|
CONTROLS
AND PROCEDURES
|
ITEM
1.
|
LEGAL
PROCEEDINGS
|
ITEM
1A.
|
RISK
FACTORS
|
ITEM
2.
|
UNREGISTERED
SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS
|
ITEM
3.
|
DEFAULTS
UPON SENIOR SECURITIES
|
ITEM
4.
|
SUBMISSION
OF MATTERS TO A VOTE OF SECURITY
HOLDERS
|
ITEM
5.
|
OTHER
INFORMATION
|
ITEM
6.
|
EXHIBITS
|
Exhibit
Number
|
Exhibit
Description
|
|
2.1
|
Plan
of Reorganization from Mutual Savings Bank to Mutual Holding Company and
Stock Issuance Plan **
|
|
3.1
|
Charter
of Auburn Bancorp, Inc. **
|
|
3.2
|
Bylaws
of Auburn Bancorp, Inc. **
|
|
4.1
|
Specimen
Stock Certificate of Auburn Bancorp, Inc. **
|
|
10.1
|
Form
of Auburn Savings Bank Employee Stock Ownership Plan and Trust
**
|
|
10.2
|
Form
of ESOP Loan Commitment Letter and ESOP Loan Documents
**
|
|
10.3
|
Form
of Employment Agreement between Auburn Savings Bank and Allen T. Sterling
**
|
|
31.1
|
Rule
13a-14(a)/15d-14(a) Certification of Chief Executive Officer of the
Company
|
|
31.2
|
Rule
13a-14(a)/15d-14(a) Certification of Chief Financial Officer of the
Company
|
|
32.1
|
Section
1350 Certification of Chief Executive Officer of the Company in accordance
with Section 906 of the Sarbanes-Oxley Act of 2002
|
|
32.2
|
Section
1350 Certification of Principal Financial Officer of the Company in
accordance with Section 906 of the Sarbanes-Oxley Act of
2002
|
**
|
Incorporated
by reference into this document from the Exhibits filed with the
Securities and Exchange Commission on the Company’s Registration Statement
on Form S-1, as amended, initially filed on March 14, 2008 and declared
effective on May 13, 2008 (File Number
333-149723).
|
Auburn
Bancorp, Inc.
|
|||
(Registrant)
|
|||
Date:
May 14, 2009
|
By:
|
/s/
Allen T. Sterling
|
|
Allen
T. Sterling
|
|||
President
and Chief Executive Officer
|
|||
Date:
May 14, 2009
|
By:
|
/s/
Rachel A. Haines
|
|
Rachel
A. Haines
|
|||
Principal
Financial Officer
|
1 Year Auburn Bancorp (PK) Chart |
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