[X]
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended June 30, 2013 OR
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[ ]
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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SOUTHERN MISSOURI BANCORP, INC.
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(Exact name of registrant as specified in its charter)
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Missouri
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43-1665523
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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531 Vine Street, Poplar Bluff, Missouri
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63901
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(Address of principal executive offices)
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(Zip Code)
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Securities registered pursuant to Section 12(b) of the Act:
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Title of each class:
Common Stock, par value $0.01 per share
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Name of each exchange on which registered:
The NASDAQ Stock Market LLC
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·
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the strength of the United States economy in general and the strength of the local economies in which we conduct operations;
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·
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fluctuations in interest rates and in real estate values;
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monetary and fiscal policies of the FRB and the U.S. Government and other governmental initiatives affecting the financial services industry;
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·
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the risks of lending and investing activities, including changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for loan losses;
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our ability to access cost-effective funding;
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·
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the timely development of and acceptance of our new products and services and the perceived overall value of these products and services by users, including the features, pricing and quality compared to competitors' products and services;
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·
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expected cost savings, synergies and other benefits from the Company’s merger and acquisition activities might not be realized within the anticipated time frames or at all, and costs or difficulties relating to integration matters, including but not limited to customer and employee retention, might be greater than expected;
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·
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fluctuations in real estate values and both residential and commercial real estate market conditions;
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demand for loans and deposits in our market area;
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legislative or regulatory changes that adversely affect our business;
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results of examinations of us by our regulators, including the possibility that our regulators may, among other things, require us to increase our reserve for loan losses or to write-down assets;
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the impact of technological changes; and
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our success at managing the risks involved in the foregoing
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At June 30,
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||||||||||||||||||||||||
2013
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2012
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2011
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||||||||||||||||||||||
Amount
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Percent
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Amount
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Percent
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Amount
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Percent
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|||||||||||||||||||
(Dollars in thousands)
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||||||||||||||||||||||||
Type of Loan:
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||||||||||||||||||||||||
Mortgage Loans:
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||||||||||||||||||||||||
Residential real estate
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$ | 233,888 | 36.14 | % | $ | 201,013 | 34.45 | % | $ | 199,885 | 35.91 | % | ||||||||||||
Commercial real estate (1)
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242,304 | 37.44 | 200,957 | 34.44 | 185,159 | 33.27 | ||||||||||||||||||
Construction
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30,725 | 4.75 | 40,182 | 6.89 | 29,921 | 5.38 | ||||||||||||||||||
Total mortgage loans
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506,917 | 78.33 | 442,152 | 75.78 | 414,965 | 74.56 | ||||||||||||||||||
Other Loans:
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||||||||||||||||||||||||
Automobile loans
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6,779 | 1.05 | 7,552 | 1.29 | 9,024 | 1.62 | ||||||||||||||||||
Commercial business (2)
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130,868 | 20.22 | 137,004 | 23.48 | 126,290 | 22.69 | ||||||||||||||||||
Home equity
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15,775 | 2.44 | 15,856 | 2.72 | 14,027 | 2.52 | ||||||||||||||||||
Other
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5,862 | 0.91 | 5,578 | 0.96 | 6,912 | 1.25 | ||||||||||||||||||
Total other loans
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159,284 | 24.61 | 165,990 | 28.45 | 156,253 | 28.07 | ||||||||||||||||||
Total loans
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666,201 | 102.94 | 608,142 | 104.23 | 571,218 | 102.63 | ||||||||||||||||||
Less:
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||||||||||||||||||||||||
Undisbursed loans in process
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10,792 | 1.67 | 17,370 | 2.98 | 8,330 | 1.50 | ||||||||||||||||||
Deferred fees and discounts
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(143 | ) | (0.02 | ) | (185 | ) | (0.03 | ) | (126 | ) | (0.02 | ) | ||||||||||||
Allowance for loan losses
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8,386 | 1.30 | 7,492 | 1.28 | 6,438 | 1.16 | ||||||||||||||||||
Net loans receivable
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$ | 647,166 | 100.00 | % | $ | 583,465 | 100.00 | % | $ | 556,576 | 100.00 | % | ||||||||||||
Type of Security:
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||||||||||||||||||||||||
Residential real estate
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One-to four-family
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$ | 205,281 | 31.72 | $ | 189,313 | 32.45 | $ | 189,282 | 34.01 | |||||||||||||||
Multi-family
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47,388 | 7.32 | 36,513 | 6.26 | 30,272 | 5.44 | ||||||||||||||||||
Commercial real estate
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190,563 | 29.45 | 162,478 | 27.85 | 145,453 | 26.13 | ||||||||||||||||||
Land
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63,689 | 9.84 | 58,830 | 10.08 | 52,933 | 9.51 | ||||||||||||||||||
Commercial
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130,867 | 20.22 | 132,022 | 22.63 | 123,295 | 22.15 | ||||||||||||||||||
Consumer and other
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28,413 | 4.39 | 28,986 | 4.97 | 29,983 | 5.39 | ||||||||||||||||||
Total loans
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666,201 | 102.94 | 608,142 | 104.23 | 571,218 | 102.63 | ||||||||||||||||||
Less:
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Undisbursed loans in process
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10,792 | 1.67 | 17,370 | 2.98 | 8,330 | 1.50 | ||||||||||||||||||
Deferred fees and discounts
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(143 | ) | (0.02 | ) | (185 | ) | (0.03 | ) | (126 | ) | (0.02 | ) | ||||||||||||
Allowance for loan losses
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8,386 | 1.30 | 7,492 | 1.28 | 6,438 | 1.16 | ||||||||||||||||||
Net loans receivable
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$ | 647,166 | 100.00 | % | $ | 583,465 | 100.00 | % | $ | 556,576 | 100.00 | % |
___________________________
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(1)
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Commercial real estate loan balances included farmland and other agricultural-related real estate loans of $53.0 million, $48.6 million and $42.4 million as of June 30, 2013, 2012, and 2011, respectively.
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(2)
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Commercial business loan balances included agricultural equipment and production loans of $47.4 million, $50.8 million and $45.3 million as of June 30, 2013, 2012, and 2011, respectively.
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At June 30,
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||||||||||||||||||||||||
2013
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2012
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2011
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Amount
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Percent
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Amount
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Percent
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Amount
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Percent
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(Dollars in thousands)
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Type of Loan:
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Fixed-Rate Loans:
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Residential real estate
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$ | 111,520 | 17.23 | % | $ | 115,716 | 19.83 | % | $ | 129,967 | 23.35 | % | ||||||||||||
Commercial real estate
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156,349 | 24.16 | 128,954 | 22.10 | 120,327 | 21.62 | ||||||||||||||||||
Construction
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26,788 | 4.14 | 35,886 | 6.15 | 27,947 | 5.02 | ||||||||||||||||||
Consumer
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12,641 | 1.95 | 13,130 | 2.25 | 15,934 | 2.86 | ||||||||||||||||||
Commercial business
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72,739 | 11.24 | 75,910 | 13.01 | 77,154 | 13.86 | ||||||||||||||||||
Total fixed-rate loans
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380,037 | 58.72 | 369,596 | 63.34 | 371,329 | 66.72 | ||||||||||||||||||
Adjustable-Rate Loans:
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Residential real estate
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122,368 | 18.91 | 85,296 | 14.62 | 69,917 | 12.56 | ||||||||||||||||||
Commercial real estate
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85,955 | 13.28 | 72,005 | 12.34 | 64,831 | 11.65 | ||||||||||||||||||
Construction
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3,937 | 0.61 | 4,296 | 0.74 | 1,975 | 0.35 | ||||||||||||||||||
Consumer
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15,775 | 2.44 | 15,855 | 2.72 | 14,030 | 2.52 | ||||||||||||||||||
Commercial business
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58,129 | 8.98 | 61,094 | 10.47 | 49,136 | 8.83 | ||||||||||||||||||
Total adjustable-rate loans
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286,164 | 44.22 | 238,546 | 40.88 | 199,889 | 35.91 | ||||||||||||||||||
Total loans
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666,201 | 102.94 | 608,142 | 104.23 | 571,218 | 102.63 | ||||||||||||||||||
Less:
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Undisbursed loans in process
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10,792 | 1.67 | 17,370 | 2.98 | 8,330 | 1.50 | ||||||||||||||||||
Net deferred loan fees
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(143 | ) | (0.02 | ) | (185 | ) | (0.03 | ) | (126 | ) | (0.02 | ) | ||||||||||||
Allowance for loan loss
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8,386 | 1.30 | 7,492 | 1.28 | 6,438 | 1.16 | ||||||||||||||||||
Net loans receivable
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$ | 647,166 | 100.00 | % | $ | 583,465 | 100.00 | % | $ | 556,576 | 100.00 | % |
Less Than
1 year
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1-3 Years
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4-5 years
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More Than
5 Years
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Total
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(In thousands)
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Federal Home Loan Bank advances
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$ | --- | $ | --- | $ | 15,500 | $ | 9,000 | $ | 24,500 | ||||||||||
Certificates of deposit
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160,998 | 82,149 | 29,095 | --- | 272,242 | |||||||||||||||
Total
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$ | 160,998 | $ | 82,149 | $ | 44,595 | $ | 9,000 | $ | 296,742 | ||||||||||
Less Than
1 year
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1-3 Years
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4-5 years
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More Than
5 Years
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Total
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(In thousands)
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||||||||||||||||||||
Construction loans in process
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$ | 10,792 | $ | --- | $ | --- | $ | --- | $ | 10,792 | ||||||||||
Other commitments
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70,314 | 6,585 | 1,042 | 8,829 | 86,770 | |||||||||||||||
$ | 81,106 | $ | 6,585 | $ | 1,042 | $ | 8,829 | $ | 97,562 | |||||||||||
Within
One Year
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After
One Year
Through
5 Years
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After
5 Years
Through
10 Years
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After
10 Years
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Total
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(In thousands)
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Residential real estate
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$ | 17,911 | $ | 96,957 | $ | 22,902 | $ | 96,118 | $ | 233,888 | ||||||||||
Commercial real estate
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42,208 | 165,717 | 28,423 | 5,956 | 242,304 | |||||||||||||||
Construction
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28,339 | 2,386 | --- | --- | 30,725 | |||||||||||||||
Consumer
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3,962 | 11,981 | 12,473 | --- | 28,416 | |||||||||||||||
Commercial business
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72,760 | 41,365 | 11,360 | 5,383 | 130,868 | |||||||||||||||
Total loans
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$ | 165,180 | $ | 318,406 | $ | 75,158 | $ | 107,457 | $ | 666,201 | ||||||||||
Year Ended June 30,
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||||||||||||
2013
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2012
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2011
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(Dollars in thousands)
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Total loans at beginning of period
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$ | 608,142 | $ | 571,218 | $ | 431,776 | ||||||
Loans originated:
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||||||||||||
One-to four-family residential
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55,841 | 47,403 | 34,288 | |||||||||
Multi-family residential and
commercial real estate
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112,964 | 68,559 | 58,016 | |||||||||
Construction loans
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23,581 | 22,477 | 26,247 | |||||||||
Commercial business
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48,652 | 44,972 | 24,029 | |||||||||
Consumer and others
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9,181 | 17,398 | 7,841 | |||||||||
Total loans originated
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250,219 | 200,809 | 150,421 | |||||||||
Loans purchased:
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||||||||||||
Total loans purchased (1)
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2,653 | 839 | 123,007 | |||||||||
Loans sold:
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Total loans sold
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(15,322 | ) | (11,914 | ) | (14,501 | ) | ||||||
Principal repayments
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(168,614 | ) | (146,123 | ) | (107,843 | ) | ||||||
Participation principal repayments
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(6,481 | ) | (5,421 | ) | (10,469 | ) | ||||||
Foreclosures
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(4,396 | ) | (1,266 | ) | (1,173 | ) | ||||||
Net loan activity
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58,059 | 36,924 | 139,442 | |||||||||
Total loans at end of period
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$ | 666,201 | $ | 608,142 | $ | 571,218 | ||||||
(1)
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Amounts reported in fiscal 2011 include the Company’s acquisition of loans recorded at a $114.6 million fair value in the December 2010 acquisition of the former First Southern Bank.
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Loans Delinquent For:
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||||||||||||||||||||||||
60-89 Days
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90 Days and Over
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Total Loans
Delinquent 60 Days
or More
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Numbers
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Amounts
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Numbers
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Amounts
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Numbers
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Amounts
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(Dollars in thousands)
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Residential real estate
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2 | $ | 66 | 3 | $ | 103 | 7 | $ | 237 | |||||||||||||||
Commercial real estate
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--- | --- | 4 | 225 | 2 | 157 | ||||||||||||||||||
Commercial non-real estate
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--- | --- | 2 | 12 | 2 | 12 | ||||||||||||||||||
Other consumer
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3 | 43 | 1 | 18 | 4 | 61 | ||||||||||||||||||
Totals
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5 | $ | 109 | 10 | $ | 358 | 15 | $ | 467 | |||||||||||||||
At June 30,
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2013
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2012
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2011
|
2010
|
2009
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(Dollars in thousands)
|
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Nonaccruing loans:
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Residential real estate
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$ | 414 | $ | 395 | $ | 97 | $ | 154 | $ | 343 | ||||||||||
Commercial real estate
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157 | 977 | 152 | 51 | 241 | |||||||||||||||
Consumer
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24 | 16 | 12 | 24 | 9 | |||||||||||||||
Commercial business
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842 | 1,010 | 2 | 9 | 66 | |||||||||||||||
Total
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1,437 | 2,398 | 263 | 238 | 659 | |||||||||||||||
Loans 90 days past due
accruing interest:
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Residential real estate
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--- | --- | 189 | 9 | 137 | |||||||||||||||
Commercial real estate
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--- | --- | 125 | --- | --- | |||||||||||||||
Consumer
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--- | --- | 122 | 51 | --- | |||||||||||||||
Commercial business
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--- | --- | 2 | 34 | --- | |||||||||||||||
Total
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--- | --- | 438 | 94 | 137 | |||||||||||||||
Total nonperforming loans
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1,437 | 2,398 | 701 | 332 | 796 | |||||||||||||||
Nonperforming investments
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125 | 125 | 125 | 125 | 125 | |||||||||||||||
Foreclosed assets held for sale:
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Real estate owned
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3,030 | 1,426 | 1,515 | 1,501 | 313 | |||||||||||||||
Other nonperforming assets
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46 | 9 | 34 | 90 | 137 | |||||||||||||||
Total nonperforming assets
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$ | 4,638 | $ | 3,958 | $ | 2,375 | $ | 2,048 | $ | 1,371 | ||||||||||
Total nonperforming loans
to net loans
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0.22 | % | 0.41 | % | 0.13 | % | 0.08 | % | 0.22 | % | ||||||||||
Total nonperforming loans
to total assets
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0.18 | % | 0.32 | % | 0.10 | % | 0.06 | % | 0.17 | % | ||||||||||
Total nonperforming assets
to total assets
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0.58 | % | 0.54 | % | 0.35 | % | 0.37 | % | 0.29 | % |
Year Ended June 30,
|
||||||||||||||||||||
2013
|
2012
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2011
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2010
|
2009
|
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(Dollars in thousands)
|
||||||||||||||||||||
Allowance at beginning of period
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$ | 7,492 | $ | 6,438 | $ | 4,509 | $ | 3,993 | $ | 3,199 | ||||||||||
Recoveries
|
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Residential real estate
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4 | 7 | 3 | 8 | 3 | |||||||||||||||
Construction real estate
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1 | 1 | 25 | --- | --- | |||||||||||||||
Commercial real estate
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5 | --- | 1 | 3 | 6 | |||||||||||||||
Commercial business
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8 | 16 | 7 | 5 | 3 | |||||||||||||||
Consumer
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16 | 15 | 18 | 5 | 14 | |||||||||||||||
Total recoveries
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34 | 39 | 54 | 21 | 26 | |||||||||||||||
Charge offs:
|
||||||||||||||||||||
Residential real estate
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302 | 98 | 158 | 153 | 19 | |||||||||||||||
Construction real estate
|
35 | --- | 158 | --- | --- | |||||||||||||||
Commercial real estate
|
422 | 41 | 60 | 76 | 11 | |||||||||||||||
Commercial business
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50 | 436 | 67 | 118 | 242 | |||||||||||||||
Consumer
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47 | 195 | 66 | 83 | 111 | |||||||||||||||
Total charge offs
|
856 | 770 | 509 | 430 | 383 | |||||||||||||||
Net recoveries (charge offs)
|
(822 | ) | (731 | ) | (455 | ) | (409 | ) | (357 | ) | ||||||||||
Provision for loan losses
|
1,716 | 1,785 | 2,385 | 925 | 1,151 | |||||||||||||||
Balance at end of period
|
$ | 8,386 | $ | 7,492 | $ | 6,439 | $ | 4,509 | $ | 3,993 | ||||||||||
Ratio of allowance to total loans
outstanding at the end of the period
|
1.28 | % | 1.27 | % | 1.14 | % | 1.06 | % | 1.07 | % | ||||||||||
Ratio of net charge offs to average
loans outstanding during the period
|
0.13 | % | 0.13 | % | 0.09 | % | 0.10 | % | 0.10 | % |
At June 30,
|
||||||||||||||||||||||||||||||||||||||||
2013
|
2012
|
2011
|
2010
|
2009
|
||||||||||||||||||||||||||||||||||||
Amount
|
Percent of
Loans in
Each
Category
to Total
Loans
|
Amount
|
Percent of
Loans in
Each
Category
to Total
Loans
|
Amount
|
Percent of
Loans in
Each
Category
to Total
Loans
|
Amount
|
Percent of
Loans in
Each
Category
to Total
Loans
|
Amount
|
Percent of
Loans in
Each
Category
to Total
Loans
|
|||||||||||||||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||||||||||||||||||
Residential real estate
|
$ | 1,810 | 35.11 | % | $ | 1,635 | 33.05 | % | $ | 1,618 | 34.99 | % | $ | 902 | 36.71 | % | $ | 750 | 42.40 | % | ||||||||||||||||||||
Construction
|
273 | 4.61 | 243 | 6.61 | 193 | 5.24 | 198 | 6.47 | 128 | 3.96 | ||||||||||||||||||||||||||||||
Commercial real estate
|
3,602 | 36.37 | 2,986 | 33.04 | 2,671 | 32.41 | 1,605 | 28.14 | 1,217 | 24.37 | ||||||||||||||||||||||||||||||
Consumer
|
472 | 4.27 | 484 | 4.77 | 441 | 5.25 | 473 | 6.10 | 367 | 6.11 | ||||||||||||||||||||||||||||||
Commercial business
|
2,229 | 19.64 | 2,144 | 22.53 | 1,515 | 22.11 | 1,330 | 22.58 | 1,038 | 23.16 | ||||||||||||||||||||||||||||||
Unallocated
|
--- | --- | --- | --- | --- | --- | --- | --- | 493 | --- | ||||||||||||||||||||||||||||||
Total allowance for
loan losses
|
$ | 8,386 | 100.00 | % | $ | 7,492 | 100.00 | % | $ | 6,438 | 100.00 | % | $ | 4,508 | 100.00 | % | $ | 3,993 | 100.00 | % | ||||||||||||||||||||
At June 30,
|
||||||||||||||||||||||||
2013
|
2012
|
2011
|
||||||||||||||||||||||
Fair
Value
|
Percent of
Portfolio
|
Fair
Value
|
Percent of
Portfolio
|
Fair
Value
|
Percent of
Portfolio
|
|||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||
U.S. government and government
agencies
|
$ | 22,408 | 33.80 | % | $ | 18,100 | 30.73 | % | $ | 12,976 | 30.98 | % | ||||||||||||
State and political subdivisions
|
39,323 | 59.31 | 36,381 | 61.77 | 24,981 | 59.65 | ||||||||||||||||||
Other securities
|
1,559 | 2.35 | 1,393 | 2.37 | 834 | 1.99 | ||||||||||||||||||
FHLB membership stock
|
2,007 | 3.03 | 2,018 | 3.43 | 2,369 | 5.66 | ||||||||||||||||||
FRB membership stock
|
1,004 | 1.51 | 1,001 | 1.70 | 719 | 1.72 | ||||||||||||||||||
Total
|
$ | 66,301 | 100.00 | % | $ | 58,893 | 100.00 | % | $ | 41,879 | 100.00 | % | ||||||||||||
Available for Sale Securities
June 30, 2013
|
||||||||||||
Amortized
Cost
|
Fair
Value
|
Tax-Equiv.
Wtd.-Avg. Yield
|
||||||||||
(Dollars in thousands)
|
||||||||||||
U.S. government and government agency securities:
|
||||||||||||
Due within 1 year
|
$ | --- | $ | --- | --- | % | ||||||
Due after 1 year but within 5 years
|
5,001 | 4,951 | 0.79 | |||||||||
Due after 5 years but within 10 years
|
16,971 | 16,481 | 1.53 | |||||||||
Due over 10 years
|
1,000 | 976 | 1.00 | |||||||||
Total
|
22,972 | 22,408 | 1.34 | % | ||||||||
State and political subdivisions:
|
||||||||||||
Due within 1 year
|
436 | 437 | 0.67 | % | ||||||||
Due after 1 year but within 5 years
|
5,341 | 5,401 | 2.48 | |||||||||
Due after 5 years but within 10 years
|
10,514 | 10,846 | 6.07 | |||||||||
Due over 10 years
|
21,844 | 22,639 | 4.85 | |||||||||
Total
|
38,135 | 39,323 | 4.81 | % | ||||||||
Other securities:
|
||||||||||||
Due within 1 year
|
--- | --- | --- | % | ||||||||
Due after 1 year but within 5 years
|
1,076 | 1,113 | 3.20 | |||||||||
Due after 5 years but within 10 years
|
--- | --- | --- | |||||||||
Due over 10 years
|
1,562 | 446 | 0.85 | |||||||||
Total
|
2,638 | 1,559 | 1.81 | % | ||||||||
No stated maturity:
|
||||||||||||
FHLB membership stock
|
2,007 | 2,007 | 1.98 | % | ||||||||
FRB membership stock
|
1,004 | 1,004 | 6.00 | |||||||||
Total
|
3,011 | 3,011 | 2.01 | % | ||||||||
Total debt and other securities
|
$ | 66,756 | $ | 66,301 | 3.37 | % | ||||||
At June 30, 2013
|
||||
(In thousands)
|
||||
Amounts due:
|
||||
Within 1 year
|
$ | 57 | ||
After 1 year through 3 years
|
12 | |||
After 3 years through 5 years
|
2,528 | |||
After 5 years
|
13,983 | |||
Total
|
$ | 16,580 | ||
At June 30, 2013
|
||||
(In thousands)
|
||||
Interest rate terms on amounts due after 1 year:
|
||||
Fixed
|
$ | 11,298 | ||
Adjustable
|
5,225 | |||
Total
|
$ | 16,523 | ||
At June 30,
|
||||||||||||||||||||||||
2013
|
2012
|
2011
|
||||||||||||||||||||||
Amortized
Cost
|
Fair
Value
|
Amortized
Cost
|
Fair
Value
|
Amortized
Cost
|
Fair
Value
|
|||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||
FHLMC certificates
|
$ | 3,405 | $ | 3,509 | $ | 3,420 | $ | 3,666 | $ | 4,830 | $ | 5,186 | ||||||||||||
GNMA certificates
|
70 | 72 | 79 | 81 | 89 | 91 | ||||||||||||||||||
FNMA certificates
|
2,701 | 2,846 | 4,437 | 4,694 | 4,633 | 4,987 | ||||||||||||||||||
Collateralized mortgage obligations issued
by government agencies
|
10,404 | 10,287 | 10,758 | 10,812 | 13,938 | 14,272 | ||||||||||||||||||
Total
|
$ | 16,580 | $ | 16,714 | $ | 18,694 | $ | 19,253 | $ | 23,490 | $ | 24,536 | ||||||||||||
As of June 30, 2013
|
||||||||||||||||
Weighted
Average
Interest
Rate
|
Term
|
Category
|
Minimum
Amount
|
Balance
|
Percentage
of Total
Deposits
|
|||||||||||
(In thousands)
|
||||||||||||||||
0.00% |
None
|
Non-interest Bearing
|
$ | 100 | $ | 45,442 | 7.19 | % | ||||||||
1.01 |
None
|
NOW Accounts
|
100 | 208,048 | 32.90 | |||||||||||
0.34 |
None
|
Savings Accounts
|
100 | 84,373 | 13.34 | |||||||||||
0.27 |
None
|
Money Market Deposit Accounts
|
1,000 | 22,275 | 3.52 | |||||||||||
Certificates of Deposit
|
||||||||||||||||
0.57 |
Less than 6 months
|
Fixed Rate/Term
|
1,000 | 12,953 | 2.05 | |||||||||||
0.48 |
Less than 6 months
|
IRA Fixed Rate/Term
|
1,000 | 1,653 | 0.26 | |||||||||||
0.85 |
7-12 months
|
Fixed Rate/Term
|
1,000 | 92,124 | 14.57 | |||||||||||
0.73 |
7-12 months
|
IRA Fixed Rate/Term
|
1,000 | 9,849 | 1.56 | |||||||||||
1.00 |
13-24 months
|
Fixed Rate/Term
|
1,000 | 58,572 | 9.26 | |||||||||||
0.99 |
13-24 months
|
IRA Fixed Rate/Term
|
1,000 | 7,677 | 1.21 | |||||||||||
1.00 |
13-24 months
|
IRA Variable Rate/Fixed Term
|
1,000 | 228 | 0.04 | |||||||||||
1.60 |
25-36 months
|
Fixed Rate/Term
|
1,000 | 25,850 | 4.09 | |||||||||||
1.61 |
25-36 months
|
IRA Fixed Rate/Term
|
1,000 | 6,780 | 1.07 | |||||||||||
2.44 |
48 months and more
|
Fixed Rate/Term
|
1,000 | 42,251 | 6.68 | |||||||||||
2.40 |
48 months and more
|
IRA Fixed Rate/Term
|
1,000 | 14,304 | 2.26 | |||||||||||
$ | 632,379 | 100.00 | % |
Maturity Period
|
Amount
|
|||
(In thousands)
|
||||
|
||||
Three months or less
|
$ | 20,062 | ||
Over three through six months
|
21,020 | |||
Over six through twelve months
|
43,158 | |||
Over 12 months
|
68,145 | |||
Total
|
$ | 152,385 | ||
At June 30,
|
||||||||||||||
2013
|
2012
|
2011
|
||||||||||||
(In thousands)
|
||||||||||||||
0.00 - 0.99% | $ | 129,001 | $ | 59,459 | $ | 26,139 | ||||||||
1.00 - 1.99% | 98,757 | 106,610 | 148,430 | |||||||||||
2.00 - 2.99% | 24,345 | 37,864 | 57,994 | |||||||||||
3.00 - 3.99% | 19,431 | 24,186 | 25,888 | |||||||||||
4.00 - 4.99% | 708 | 2,499 | 4,651 | |||||||||||
5.00 - 5.99% | --- | 696 | 1,545 | |||||||||||
Total
|
$ | 272,242 | $ | 231,314 | $ | 264,647 | ||||||||
Amount Due
|
||||||||||||||||||||||||||||||
Percent
|
||||||||||||||||||||||||||||||
Less
|
of Total
|
|||||||||||||||||||||||||||||
Than One
|
1-2 | 2-3 | 3-4 |
After
|
Certificate
|
|||||||||||||||||||||||||
Year
|
Years
|
Years
|
Years
|
4 Years
|
Total
|
Accounts
|
||||||||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||||||||
0.00 – 0.99% | $ | 115,871 | $ | 9,999 | $ | 3,027 | $ | 104 | $ | --- | $ | 129,001 | 47.38 | % | ||||||||||||||||
1.00 – 1.99% | 26,801 | 35,890 | 11,076 | 8,770 | 16,220 | 98,757 | 36.28 | |||||||||||||||||||||||
2.00 - 2.99% | 11,844 | 1,375 | 7,124 | 3,350 | 652 | 24,345 | 8.94 | |||||||||||||||||||||||
3.00 - 3.99% | 5,874 | 7,814 | 5,743 | --- | --- | 19,431 | 7.14 | |||||||||||||||||||||||
4.00 - 4.99% | 608 | 100 | --- | --- | --- | 708 | 0.26 | |||||||||||||||||||||||
5.00 - 5.99% | --- | --- | --- | --- | --- | --- | --- | |||||||||||||||||||||||
Total
|
$ | 160,998 | $ | 55,178 | $ | 26,970 | $ | 12,224 | $ | 16,872 | $ | 272,242 | 100.00 | % |
At June 30,
|
||||||||||||||||||||||||||||||||||||
2013
|
2012
|
2011
|
||||||||||||||||||||||||||||||||||
Amount
|
Percent of
Total
|
Increase
(Decrease)
|
Amount
|
Percent of
Total
|
Increase
(Decrease)
|
Amount
|
Percent of
Total
|
Increase
(Decrease)
|
||||||||||||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||||||||||||||
Noninterest bearing
|
$ | 45,442 | 7.19 | % | $ | (9,371 | ) | $ | 54,813 | 9.37 | % | $ | 21,965 | $ | 32,848 | 5.86 | % | $ | 4,053 | |||||||||||||||||
NOW checking
|
208,048 | 32.90 | 14,177 | 193,870 | 33.15 | 41,395 | 152,475 | 27.22 | 48,762 | |||||||||||||||||||||||||||
Savings accounts
|
84,373 | 13.34 | (2,344 | ) | 86,717 | 14.83 | (7,662 | ) | 94,379 | 16.85 | 3,994 | |||||||||||||||||||||||||
Money market deposit
|
22,275 | 3.52 | 4,176 | 18,099 | 3.09 | 2,297 | 15,802 | 2.82 | 8,322 | |||||||||||||||||||||||||||
Fixed-rate certificates
which mature(1)
|
||||||||||||||||||||||||||||||||||||
Within one year
|
160,868 | 25.44 | 1,995 | 158,873 | 27.17 | (22,351 | ) | 181,224 | 32.35 | 33,400 | ||||||||||||||||||||||||||
Within three years
|
82,050 | 12.97 | 32,386 | 49,664 | 8.49 | (11,613 | ) | 61,277 | 10.94 | 29,918 | ||||||||||||||||||||||||||
After three years
|
29,095 | 4.60 | 6,554 | 22,542 | 3.85 | 643 | 21,899 | 3.91 | 8,814 | |||||||||||||||||||||||||||
Variable-rate certificates
which mature:
Within one year
|
130 | 0.02 | 130 | --- | 0.00 | (123 | ) | 123 | 0.02 | (1 | ) | |||||||||||||||||||||||||
Within three years
|
98 | 0.02 | (138 | ) | 236 | 0.04 | 112 | 124 | 0.02 | (4 | ) | |||||||||||||||||||||||||
Total
|
$ | 632,379 | 100.00 | % | $ | 47,565 | $ | 584,814 | 100.00 | % | $ | 24,663 | $ | 560,151 | 100.00 | % | $ | 137,258 | ||||||||||||||||||
At June 30,
|
||||||||||||
2013
|
2012
|
2011
|
||||||||||
(In thousands)
|
||||||||||||
Beginning Balance
|
$ | 584,814 | $ | 560,151 | $ | 422,893 | ||||||
Net increase before interest credited
|
41,492 | 17,817 | 129,772 | |||||||||
Interest credited
|
6,073 | 6,846 | 7,486 | |||||||||
Net increase in deposits
|
47,565 | 24,663 | 137,258 | |||||||||
Ending balance
|
$ | 632,379 | $ | 584,814 | $ | 560,151 | ||||||
Year Ended June 30,
|
||||||||||||
2013
|
2012
|
2011
|
||||||||||
(Dollars in thousands)
|
||||||||||||
Year end balances
|
||||||||||||
Short-term FHLB advances
|
$ | --- | $ | --- | $ | --- | ||||||
Securities sold under agreements to repurchase
|
27,788 | 25,642 | 25,230 | |||||||||
Total short-term borrowings
|
$ | 27,788 | $ | 25,642 | $ | 25,230 | ||||||
|
||||||||||||
Weighted average rate at year end
|
0.58 | % | 0.77 | % | 0.85 | % |
Year Ended June 30,
|
||||||||||||
|
2013
|
2012
|
2011
|
|||||||||
|
(Dollars in thousands)
|
|||||||||||
FHLB advances
|
||||||||||||
Daily average balance
|
$ | 30,374 | $ | 30,624 | $ | 37,114 | ||||||
Weighted average interest rate
|
3.29 | % | 4.03 | % | 4.19 | % | ||||||
Maximum outstanding at any month end
|
$ | 45,270 | $ | 33,500 | $ | 43,500 | ||||||
|
||||||||||||
Securities sold under agreements to repurchase
|
||||||||||||
Daily average balance
|
$ | 27,359 | $ | 26,956 | $ | 29,285 | ||||||
Weighted average interest rate
|
0.74 | % | 0.87 | % | 0.99 | % | ||||||
Maximum outstanding at any month end
|
$ | 30,945 | $ | 29,949 | $ | 34,917 | ||||||
|
||||||||||||
Subordinated Debt
|
||||||||||||
Daily average balance
|
$ | 7,217 | $ | 7,217 | $ | 7,217 | ||||||
Weighted average interest rate
|
3.15 | % | 3.22 | % | 3.14 | % | ||||||
Maximum outstanding at month end
|
$ | 7,217 | $ | 7,217 | $ | 7,217 |
·
|
The Consumer Financial Protection Bureau (“CFPB”), an independent consumer compliance regulatory agency within the Federal Reserve has been established. The CFPB is empowered to exercise broad regulatory, supervisory and enforcement authority over financial institutions with total assets of over $10 billion with respect to both new and existing consumer financial protection laws. Financial institutions with assets of less than $10 billion, like the Bank, will continue to be subject to supervision and enforcement by their primary federal banking regulator with respect to federal consumer financial protection laws. The CFPB also has authority to promulgate new consumer financial protection regulations and amend existing consumer financial protection regulations;
|
·
|
The Federal Deposit Insurance Act was amended to require depository institution holding companies to serve as a source of strength for their depository institution subsidiaries;
|
·
|
The prohibition on payment of interest on demand deposits was repealed, effective July 21, 2011;
|
·
|
Deposit insurance was permanently increased to $250,000 and unlimited deposit insurance for noninterest-bearing transaction accounts was extended through December 31, 2012;
|
·
|
The deposit insurance assessment base for FDIC insurance is the depository institution's average consolidated total assets less the average tangible equity during the assessment period; and
|
·
|
The minimum reserve ratio of the FDIC’s Deposit Insurance Fund (“DIF”) increased to 1.35 percent of estimated annual insured deposits or the comparable percentage of the assessment base; however, the FDIC is directed to "offset the effect" of the increased reserve ratio for insured depository institutions with total consolidated assets of less than $10 billion. Pursuant to the Dodd-Frank Act, the FDIC issued a rule setting a designated reserve ratio at 2.0% of insured deposits.
|
·
|
Tier 1 capital treatment for "hybrid" capital items like trust preferred securities is eliminated subject to various grandfathering and transition rules. As required by the Act, the federal banking agencies have promulgated new rules on regulatory capital for both depository institutions and their holding companies;
|
·
|
Public companies are required to provide their shareholders with a non-binding vote: (i) at least once every three years on the compensation paid to executive officers, and (ii) at least once every six years on whether they should have a "say on pay" vote every one, two or three years;
|
·
|
A separate, non-binding shareholder vote is required regarding golden parachutes for named executive officers when a shareholder vote takes place on mergers, acquisitions, dispositions or other transactions that would trigger the parachute payments;
|
·
|
Securities exchanges are required to prohibit brokers from using their own discretion to vote shares not beneficially owned by them for certain "significant" matters, which include votes on the election of directors, executive compensation matters, and any other matter determined to be significant;
|
·
|
Stock exchanges are prohibited from listing the securities of any issuer that does not have a policy providing for (i) disclosure of its policy on incentive compensation payable on the basis of financial information reportable under the securities laws, and (ii) the recovery from current or former executive officers, following an accounting restatement triggered by material noncompliance with securities law reporting requirements, of any incentive compensation paid erroneously during the three-year period preceding the date on which the restatement was required that exceeds the amount that would have been paid on the basis of the restated financial information;
|
·
|
Smaller reporting companies are exempt from complying with the internal control auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act.
|
·
|
cash flow of the borrower and/or the project being financed;
|
·
|
in the case of a collateralized loan, the changes and uncertainties as to the future value of the collateral;
|
·
|
the credit history of a particular borrower;
|
·
|
changes in economic and industry conditions; and
|
·
|
the duration of the loan.
|
·
|
an ongoing review of the quality, size and diversity of the loan portfolio;
|
·
|
evaluation of non-performing loans;
|
·
|
historical default and loss experience;
|
·
|
historical recovery experience;
|
·
|
existing economic conditions;
|
·
|
risk characteristics of the various classifications of loans; and
|
·
|
the amount and quality of collateral, including guarantees, securing the loans.
|
·
|
We do not record interest income on nonaccrual loans, nonperforming investment securities, or other real estate owned.
|
·
|
We must provide for probable loan losses through a current period charge to the provision for loan losses.
|
·
|
Non-interest expense increases when we must write down the value of properties in our other real estate owned portfolio to reflect changing market values or recognize other-than-temporary impairment on nonperforming investment securities.
|
·
|
There are legal fees associated with the resolution of problem assets, as well as carrying costs, such as taxes, insurance, and maintenance fees related to our other real estate owned.
|
·
|
The resolution of nonperforming assets requires the active involvement of management, which can distract them from more profitable activity.
|
·
|
loan delinquencies may increase;
|
·
|
problem assets and foreclosures may increase;
|
·
|
demand for our products and services may decline;
|
·
|
collateral for our loans may decline in value, in turn reducing a customer’s borrowing power and reducing the value of collateral securing our loans; and
|
·
|
the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us.
|
·
|
We may be exposed to potential asset quality issues or unknown or contingent liabilities of the banks, businesses, assets and liabilities we acquire. If these issues or liabilities exceed our estimates, our results of operations and financial condition may be adversely affected;
|
·
|
Prices at which acquisitions can be made fluctuate with market conditions. We have experienced times during which acquisitions could not be made in specific markets at prices we considered acceptable and expect that we will experience this condition in the future;
|
·
|
The acquisition of other entities generally requires integration of systems, procedures and personnel of the acquired entity into our company to make the transaction economically successful. This integration process is complicated and time consuming and can also be disruptive to the customers of the acquired business. If the integration process is not conducted successfully and with minimal effect on the acquired business and its customers, we may not realize the anticipated economic benefits of particular acquisitions within the expected time frame, and we may lose customers or employees of the acquired business. We may also experience greater than anticipated customer losses even if the integration process is successful.
|
·
|
To the extent our costs of an acquisition exceed the fair value of the net assets acquired, the acquisition will generate goodwill. We are required to assess our goodwill for impairment at least annually, and any goodwill impairment charge could have a material adverse effect on our results of operations and financial condition;
|
·
|
To finance an acquisition, we may borrow funds, thereby increasing our leverage and diminishing our liquidity, or raise additional capital, which could dilute the interests of our existing shareholders; and
|
·
|
We have completed two acquisitions within the past three years and opened additional banking offices in the past few years that enhanced our rate of growth. We may not be able to continue to sustain our past rate of growth or to grow at all in the future.
|
·
|
actual or anticipated quarterly fluctuations in our operating and financial results;
|
·
|
developments related to investigations, proceedings or litigation that involve us;
|
·
|
changes in financial estimates and recommendations by financial analysts;
|
·
|
dispositions, acquisitions and financings;
|
·
|
actions of our current stockholders, including sales of common stock by existing stockholders and our directors and executive officers;
|
·
|
fluctuations in the stock price and operating results of our competitors;
|
·
|
regulatory developments; and
|
·
|
developments related to the financial services industry.
|
Location
|
Year
Opened
|
Building Net
Book Value as of
June 30, 2013
|
Land
Owned/
Leased
|
Building
Owned/
Leased
|
|||
(Dollars in thousands)
|
|||||||
Main Office
|
|||||||
|
|||||||
531 Vine St.
Poplar Bluff, Missouri
|
1966
|
$ | 862 |
Owned
|
Owned
|
||
|
|||||||
Branch Offices
|
|||||||
|
|||||||
502 Main St.
Van Buren, Missouri
|
1982
|
6 |
Owned
|
Owned
|
|||
|
|||||||
1330 N. Westwood Blvd.
Poplar Bluff, Missouri
|
1976
|
47 |
Leased
|
Owned
|
|||
|
|||||||
2080 Three Rivers Blvd.
Poplar Bluff, Missouri
|
2011
|
--- |
Leased
|
Leased
|
|||
4214 Highway PP
Poplar Bluff, Missouri
|
2001
|
440 |
Owned
|
Owned
|
|||
713 Business 60 West
Dexter, Missouri
|
1979
|
18 |
Owned
|
Owned
|
|||
|
|||||||
301 First St.
Kennett, Missouri
|
2000
|
679 |
Owned
|
Owned
|
|||
|
|||||||
302 Washington St.
Doniphan, Missouri
|
2001
|
519 |
Owned
|
Owned
|
|||
|
|||||||
13371 Highway 53
Qulin, Missouri
|
2000
|
74 |
Owned
|
Owned
|
|||
|
|||||||
1205 S. Main St.
Sikeston, Missouri
|
2006
|
806 |
Owned
|
Owned
|
|||
100 W. Main St.
Matthews, Missouri
|
2008
|
--- |
Leased
|
Leased
|
|||
1727 W. Kingshighway
Paragould, Arkansas
|
2009
|
432 |
Leased
|
Owned
|
|||
2775 E. Nettleton
Jonesboro, Arkansas
|
2009
|
864 |
Owned
|
Owned
|
|||
1925 S. Main
Jonesboro, Arkansas
|
2013
|
2,408 |
Owned
|
Owned
|
|||
601 N. Holman
Brookland, Arkansas
|
2009
|
94 |
Owned
|
Owned
|
|||
1583 S. St. Louis St
|
2010
|
2,967 |
Owned
|
Owned
|
|||
Batesville, Arkansas
|
|||||||
500 E. Race Ave.
|
2010
|
--- |
Leased
|
Leased
|
|||
Searcy, Arkansas
|
|||||||
4650 South National, Suite C-4
Springfield, Missouri
|
2010
|
--- |
Leased
|
Leased
|
|||
Stock Price
|
||||||||||||
2013 Quarters:
|
High
|
Low
|
Dividends
per Share
|
|||||||||
Fourth Quarter (ended 6/30/2013)
|
$ | 26.35 | $ | 24.00 | $ | 0.15 | ||||||
Third Quarter (ended 3/31/2013)
|
26.90 | 22.83 | 0.15 | |||||||||
Second Quarter (ended 12/31/2012)
|
24.50 | 22.35 | 0.15 | |||||||||
First Quarter (ended 9/30/2012)
|
24.50 | 21.50 | 0.15 | |||||||||
2012 Quarters:
|
||||||||||||
Fourth Quarter (ended 6/30/2012)
|
$ | 25.85 | $ | 21.20 | $ | 0.12 | ||||||
Third Quarter (ended 3/31/2012)
|
25.90 | 22.10 | 0.12 | |||||||||
Second Quarter (ended 12/31/2011)
|
23.73 | 20.28 | 0.12 | |||||||||
First Quarter (ended 9/30/2011)
|
22.98 | 20.39 | 0.12 | |||||||||
2011 Quarters:
|
||||||||||||
Fourth Quarter (ended 6/30/2011)
|
$ | 26.14 | $ | 20.00 | $ | 0.12 | ||||||
Third Quarter (ended 3/31/2011)
|
24.07 | 17.35 | 0.12 | |||||||||
Second Quarter (ended 12/31/2010)
|
17.29 | 14.83 | 0.12 | |||||||||
First Quarter (ended 9/30/2010)
|
16.01 | 14.55 | 0.12 | |||||||||
Total #
of Shares
Purchased
|
Average
Price
Paid Per
Share
|
Total # of Shares
Purchased as Part of a Publicly
Announced
Program
|
Maximum Number of Shares That
May Yet Be Purchased
|
|||||||||||||
06/01/13 - 06/30/13 period
|
- | - | - | - | ||||||||||||
05/01/13 - 05/31/13 period
|
- | - | - | - | ||||||||||||
04/01/13 - 04/30/13 period
|
- | - | - | - |
(dollars in thousands)
|
At June 30
|
|||||||||||||||||||
Financial Condition Data:
|
2013
|
2012
|
2011
|
2010
|
2009
|
|||||||||||||||
Total assets
|
$ | 796,391 | $ | 739,189 | $ | 688,200 | $ | 552,084 | $ | 466,334 | ||||||||||
Loans receivable, net
|
647,166 | 583,465 | 556,576 | 418,683 | 368,993 | |||||||||||||||
Mortgage-backed securities
|
16,714 | 19,253 | 24,536 | 34,334 | 40,269 | |||||||||||||||
Cash, interest-bearing deposits
|
||||||||||||||||||||
and investment securities
|
77,059 | 90,568 | 73,479 | 67,103 | 27,983 | |||||||||||||||
Deposits
|
632,379 | 584,814 | 560,151 | 422,893 | 311,955 | |||||||||||||||
Borrowings
|
52,288 | 50,142 | 58,730 | 73,869 | 102,498 | |||||||||||||||
Subordinated debt
|
7,217 | 7,217 | 7,217 | 7,217 | 7,217 | |||||||||||||||
Stockholders’ equity
|
101,829 | 94,728 | 55,732 | 45,649 | 42,008 |
(dollars in thousands, except per share data)
|
For The Year Ended June 30
|
|||||||||||||||||||
Operating Data:
|
2013
|
2012
|
2011
|
2010
|
2009
|
|||||||||||||||
Interest income
|
$ | 36,291 | $ | 38,965 | $ | 35,048 | $ | 27,541 | $ | 25,301 | ||||||||||
Interest expense
|
7,501 | 9,943 | 11,285 | 11,225 | 11,204 | |||||||||||||||
Net interest income
|
28,790 | 29,022 | 23,763 | 16,316 | 14,097 | |||||||||||||||
Provision for loan losses
|
1,716 | 1,785 | 2,385 | 925 | 1,151 | |||||||||||||||
Net interest income after
|
||||||||||||||||||||
provision for loan losses
|
27,074 | 27,237 | 21,378 | 15,391 | 12,946 | |||||||||||||||
Noninterest income
|
4,468 | 4,063 | 10,502 | 3,094 | 1,820 | |||||||||||||||
Noninterest expense
|
17,521 | 16,605 | 14,458 | 12,348 | 9,134 | |||||||||||||||
Income before income taxes
|
14,021 | 14,695 | 17,422 | 6,137 | 5,632 | |||||||||||||||
Income taxes
|
3,954 | 4,597 | 5,952 | 1,511 | 1,797 | |||||||||||||||
Net income
|
$ | 10,067 | $ | 10,098 | $ | 11,470 | $ | 4,626 | $ | 3,835 | ||||||||||
Less: charge for early redemption of preferred
stock issued at a discount |
- | 94 | - | - | - | |||||||||||||||
Less: effective dividend on preferred stock
|
345 | 424 | 512 | 510 | 289 | |||||||||||||||
Net income available to common stockholders
|
$ | 9,722 | $ | 9,580 | $ | 10,958 | $ | 4,116 | $ | 3,546 | ||||||||||
Basic earnings per share available to
|
||||||||||||||||||||
common stockholders
|
$ | 2.95 | $ | 3.43 | $ | 5.25 | $ | 1.98 | $ | 1.67 | ||||||||||
Diluted earnings per share available to
|
||||||||||||||||||||
common stockholders
|
2.88 | 3.32 | 5.12 | 1.95 | 1.67 | |||||||||||||||
Dividends per share
|
0.60 | 0.48 | .48 | .48 | .48 |
(dollars in thousands)
|
At June 30
|
|||||||||||||||||||
Other Data:
|
2013
|
2012
|
2011
|
2010
|
2009
|
|||||||||||||||
Number of:
|
||||||||||||||||||||
Real estate loans
|
3,637 | 3,583 | 3,758 | 3,282 | 2,957 | |||||||||||||||
Deposit accounts
|
31,980 | 31,307 | 30,243 | 25,353 | 22,069 | |||||||||||||||
Full service offices
|
18 | 18 | 16 | 14 | 10 | |||||||||||||||
Loan production offices
|
- | - | 2 | - | - |
For The Year Ended June 30
|
||||||||||||||||||||
Key Operating Ratios:
|
2013
|
2012
|
2011
|
2010
|
2009
|
|||||||||||||||
Return on assets (net income
|
||||||||||||||||||||
divided by average assets)
|
1.32 | % | 1.37 | % | 1.81 | % | .88 | % | .87 | % | ||||||||||
Return on average common equity (net
|
||||||||||||||||||||
income available to common stockholders
|
||||||||||||||||||||
divided by average common equity)
|
12.34 | 15.15 | 27.08 | 11.85 | 11.38 | |||||||||||||||
Average equity to average assets
|
12.92 | 11.18 | 7.89 | 8.39 | 8.29 | |||||||||||||||
Interest rate spread (spread
|
||||||||||||||||||||
between weighted average rate on
|
||||||||||||||||||||
all interest-earning assets and all
|
||||||||||||||||||||
interest-bearing liabilities)
|
3.85 | 3.90 | 3.71 | 3.06 | 3.10 | |||||||||||||||
Net interest margin (net interest
|
||||||||||||||||||||
income as a percentage of average
|
||||||||||||||||||||
interest-earning assets)
|
4.02 | 4.12 | 3.92 | 3.27 | 3.37 | |||||||||||||||
Noninterest expense to average assets
|
2.29 | 2.25 | 2.28 | 2.35 | 2.07 | |||||||||||||||
Average interest-earning assets to
|
||||||||||||||||||||
average interest-bearing liabilities
|
116.68 | 115.19 | 111.29 | 109.57 | 109.77 | |||||||||||||||
Allowance for loan losses to gross
|
||||||||||||||||||||
loans (1)
|
1.28 | 1.27 | 1.14 | 1.06 | 1.07 | |||||||||||||||
Allowance for loan losses to
|
||||||||||||||||||||
nonperforming loans (1)
|
583.41 | 312.38 | 918.84 | 1,358.45 | 501.63 | |||||||||||||||
Net charge-offs (recoveries) to average
|
||||||||||||||||||||
outstanding loans during the period
|
.13 | .13 | .09 | .10 | .10 | |||||||||||||||
Ratio of nonperforming assets
|
||||||||||||||||||||
to total assets (1)
|
.58 | .54 | .35 | .37 | .29 | |||||||||||||||
Common shareholder dividend
|
||||||||||||||||||||
payout ratio (common dividends as a
|
||||||||||||||||||||
percentage of earnings available to
|
||||||||||||||||||||
common shareholders)
|
20.31 | 13.40 | 9.17 | 24.35 | 28.88 |
·
|
Fiscal year 2011 net income available to common stockholders per diluted common share excluding bargain purchase gain, net of transaction expenses related to the December 2010 FDIC-assisted acquisition involving the former First Southern Bank (the “Acquisition”), net of tax;
|
·
|
Fiscal year 2013, 2012 and 2011 net income available to common stockholders excluding accretion of fair value discount on acquired loans, amortization of fair value premium on assumed time deposits, and bargain purchase gain, net of transaction expenses, related to the Acquisition, net of tax;
|
·
|
Fiscal year 2013, 2012 and 2011 return on average assets excluding accretion of fair value discount on acquired loans, amortization of fair value premium on assumed time deposits, and bargain purchase gain, net of transaction expenses, related to the Acquisition, net of tax;
|
·
|
Fiscal year 2013, 2012 and 2011 return on average common equity excluding accretion of fair value discount on acquired loans, amortization of fair value premium on assumed time deposits, and bargain purchase gain, net of transaction expenses, related to the Acquisition, net of tax;
|
·
|
Fiscal year 2013, 2012 and 2011 net interest margin excluding accretion of fair value discount on acquired loans and amortization of fair value premium on assumed time deposits related to the Acquisition;
|
For the twelve
months ended
|
||||
June 30, 2011
|
||||
Diluted earnings per share available to common stockholders
|
$ | 5.12 | ||
Less: impact of excluding bargain purchase gain, net of transaction
expenses, related to the Acquisition, net of tax
|
1.92 | |||
Diluted earnings per share available to common stockholders - excluding
bargain purchase gain, net of tax and transaction expenses, related to the
Acquisition
|
$ | 3.20 |
For the twelve months ended
|
||||||||||||
(dollars in thousands)
|
June 30, 2013
|
June 30, 2012
|
June 30, 2011
|
|||||||||
Net income available to common stockholders
|
$ | 9,722 | $ | 9,580 | $ | 10,958 | ||||||
Less: impact of excluding accretion of fair value discount on acquired loans
and amortization of fair value premium on acquired time deposits, and
bargain purchase gain, net of transaction expenses, related to the
Acquisition, net of tax
|
873 | 2,446 | 5,435 | |||||||||
Net income available to common shareholders - excluding accretion of fair value
discount on acquired loans and amortization of fair value premium on acquired
time deposits, and bargain purchase gain, net of transaction expenses, related to
the Acquisition, net of tax
|
$ | 8,849 | $ | 7,134 | $ | 5,523 |
For the twelve months ended
|
||||||||||||
June 30, 2013
|
June 30, 2012
|
June 30, 2011
|
||||||||||
Return on average assets
|
1.32 | % | 1.37 | % | 1.81 | % | ||||||
Less: impact of excluding accretion of fair value discount on acquired loans
and amortization of fair value premium on acquired time deposits, and
bargain purchase gain, net of transaction expenses, related to the
Acquisition, net of tax
|
0.12 | % | 0.33 | % | 0.86 | % | ||||||
Return on average assets - excluding accretion of fair value discount on acquired
loans and amortization of fair value premium on acquired time deposits, and
bargain purchase gain, net of transaction expenses, related to the Acquisition, net
of tax
|
1.20 | % | 1.04 | % | 0.95 | % |
For the twelve months ended
|
||||||||||||
June 30, 2013
|
June 30, 2012
|
June 30, 2011
|
||||||||||
Return on average common equity
|
12.34 | % | 15.15 | % | 27.08 | % | ||||||
Less: impact of excluding accretion of fair value discount on acquired loans
and amortization of fair value premium on acquired time deposits, and
bargain purchase gain, net of transaction expenses, related to the
Acquisition, net of tax
|
1.11 | % | 3.87 | % | 13.43 | % | ||||||
Return on average common equity - excluding accretion of fair value discount on
acquired loans and amortization of fair value premium on acquired time deposits,
and bargain purchase gain, net of transaction expenses, related to the
Acquisition, net of tax
|
11.23 | % | 11.28 | % | 13.65 | % |
For the twelve months ended
|
||||||||||||
June 30, 2013
|
June 30, 2012
|
June 30, 2011
|
||||||||||
Net interest margin
|
4.02 | % | 4.12 | % | 3.92 | % | ||||||
Less: impact of excluding accretion of fair value discount on acquired loans
and amortization of fair value premium on acquired time deposits related to
the Acquisition
|
0.19 | % | 0.57 | % | 0.35 | % | ||||||
Net interest margin - excluding accretion of fair value discount on acquired loans
and amortization of fair value premium on acquired time deposits related to the
Acquisition
|
3.83 | % | 3.55 | % | 3.57 | % |
Net charge offs -
|
Net charge offs -
|
|
Portfolio segment
|
1-year historical
|
5-year historical
|
Real estate loans:
|
||
Residential
|
0.12%
|
0.08%
|
Construction
|
0.17
|
0.04
|
Commercial
|
0.18
|
0.12
|
Consumer loans
|
0.15
|
0.45
|
Commercial loans
|
0.06
|
0.17
|
·
|
Changes in lending policies
|
·
|
National, regional, and local economic conditions
|
·
|
Changes in mix and volume of portfolio
|
·
|
Experience, ability, and depth of lending management and staff
|
·
|
Entry to new markets
|
·
|
Levels and trends of delinquent, nonaccrual, special mention and classified loans
|
·
|
Concentrations of credit
|
·
|
Changes in collateral values
|
·
|
Agricultural economic conditions
|
·
|
Regulatory risk
|
Qualitative factor
|
Qualitative factor
|
||||
applied at
|
applied at
|
||||
Portfolio segment
|
June 30, 2013
|
June 30, 2012
|
|||
Real estate loans:
|
|||||
Residential
|
0.67%
|
0.83%
|
|||
Construction
|
1.22
|
1.10
|
|||
Commercial
|
1.29
|
1.32
|
|||
Consumer loans
|
1.30
|
1.38
|
|||
Commercial loans
|
1.30
|
1.38
|
|||
(dollars in thousands)
|
2013
|
2012
|
2011
|
|||||||||||||||||||||||||||||||||
Year Ended June 30
|
Average
Balance
|
Interest
and
Dividends
|
Yield/
Cost
|
Average
Balance
|
Interest
and
Dividends
|
Yield/
Cost
|
Average
Balance
|
Interest
and
Dividends
|
Yield/
Cost
|
|||||||||||||||||||||||||||
Interest-earning assets:
|
||||||||||||||||||||||||||||||||||||
Mortgage loans (1)
|
$ | 464,216 | $ | 25,907 | 5.58 | % | $ | 405,818 | $ | 26,561 | 6.55 | % | $ | 366,368 | $ | 24,196 | 6.60 | % | ||||||||||||||||||
Other loans (1)
|
155,471 | 8,448 | 5.43 | 153,480 | 9,788 | 6.38 | 137,057 | 8,069 | 5.89 | |||||||||||||||||||||||||||
Total net loans
|
619,687 | 34,355 | 5.54 | 559,298 | 36,349 | 6.50 | 503,425 | 32,265 | 6.41 | |||||||||||||||||||||||||||
Mortgage-backed securities
|
17,159 | 341 | 1.99 | 20,197 | 925 | 4.58 | 28,503 | 1,377 | 4.83 | |||||||||||||||||||||||||||
Investment securities (2)
|
62,800 | 1,528 | 2.43 | 52,450 | 1,482 | 2.83 | 40,473 | 1,287 | 3.18 | |||||||||||||||||||||||||||
Other interest-earning assets
|
16,227 | 67 | 0.41 | 72,683 | 209 | 0.29 | 33,901 | 119 | 0.35 | |||||||||||||||||||||||||||
TOTAL INTEREST-
|
||||||||||||||||||||||||||||||||||||
EARNING ASSETS (1)
|
715,873 | 36,291 | 5.07 | 704,628 | 38,965 | 5.53 | 606,302 | 35,048 | 5.78 | |||||||||||||||||||||||||||
Other noninterest-earning assets (3)
|
48,751 | --- | --- | 33,975 | --- | --- | 26,356 | --- | --- | |||||||||||||||||||||||||||
TOTAL ASSETS
|
$ | 764,624 | 36,291 | --- | $ | 738,603 | 38,965 | --- | $ | 632,658 | 35,048 | --- | ||||||||||||||||||||||||
Interest-bearing liabilities:
|
||||||||||||||||||||||||||||||||||||
Savings accounts
|
$ | 84,191 | 421 | 0.50 | $ | 92,961 | 731 | 0.79 | $ | 89,699 | 1,040 | 1.16 | % | |||||||||||||||||||||||
NOW accounts
|
200,108 | 2,132 | 1.07 | 181,390 | 3,229 | 1.78 | 130,337 | 3,273 | 2.51 | |||||||||||||||||||||||||||
Money market accounts
|
21,275 | 124 | 0.58 | 17,754 | 158 | 0.89 | 13,598 | 176 | 1.29 | |||||||||||||||||||||||||||
Certificates of deposit
|
243,005 | 3,396 | 1.40 | 254,804 | 4,125 | 1.62 | 237,531 | 4,725 | 1.99 | |||||||||||||||||||||||||||
TOTAL INTEREST-
|
||||||||||||||||||||||||||||||||||||
BEARING DEPOSITS
|
548,579 | 6,073 | 1.11 | 546,909 | 8,243 | 1.51 | 471,165 | 9,214 | 1.96 | |||||||||||||||||||||||||||
Borrowings:
|
||||||||||||||||||||||||||||||||||||
Securities sold under
|
||||||||||||||||||||||||||||||||||||
agreements to repurchase
|
27,359 | 202 | 0.74 | 26,956 | 235 | 0.87 | 29,285 | 290 | 0.99 | |||||||||||||||||||||||||||
FHLB advances
|
30,374 | 999 | 3.29 | 30,624 | 1,233 | 4.03 | 37,114 | 1,554 | 4.19 | |||||||||||||||||||||||||||
Junior subordinated debt
|
7,217 | 227 | 3.15 | 7,217 | 232 | 3.21 | 7,217 | 227 | 3.15 | |||||||||||||||||||||||||||
TOTAL INTEREST-
|
||||||||||||||||||||||||||||||||||||
BEARING LIABILITIES
|
613,529 | 7,501 | 1.22 | 611,706 | 9,943 | 1.63 | 544,781 | 11,285 | 2.07 | |||||||||||||||||||||||||||
Noninterest-bearing
|
||||||||||||||||||||||||||||||||||||
demand deposits
|
51,472 | --- | --- | 42,261 | --- | --- | 35,098 | --- | --- | |||||||||||||||||||||||||||
Other liabilities
|
836 | --- | --- | 2,055 | --- | --- | 2,882 | --- | --- | |||||||||||||||||||||||||||
TOTAL LIABILITIES
|
665,837 | 7,501 | 1.13 | 656,022 | 9,943 | 1.52 | 582,761 | 11,285 | 1.94 | |||||||||||||||||||||||||||
Stockholders’ equity
|
98,787 | --- | --- | 82,581 | --- | --- | 49,897 | --- | --- | |||||||||||||||||||||||||||
TOTAL LIABILITIES AND
|
||||||||||||||||||||||||||||||||||||
STOCKHOLDERS’ EQUITY
|
$ | 764,624 | 7,501 | 0.98 | $ | 738,603 | 9,943 | 1.35 | $ | 632,658 | 11,285 | 1.78 | ||||||||||||||||||||||||
Net interest income
|
$ | 28,790 | $ | 29,022 | $ | 23,763 | ||||||||||||||||||||||||||||||
Interest rate spread (4)
|
3.85 | % | 3.90 | % | 3.71 | % | ||||||||||||||||||||||||||||||
Net interest margin (5)
|
4.02 | % | 4.12 | % | 3.92 | % | ||||||||||||||||||||||||||||||
Ratio of average interest-earning
|
||||||||||||||||||||||||||||||||||||
assets to average interest-
|
||||||||||||||||||||||||||||||||||||
bearing liabilities
|
116.68 | % | 115.19 | % | 111.29 | % |
(1)
|
Calculated net of deferred loan fees, loan discounts and loans-in-process. Nonaccrual loans are included in average loans.
|
(2)
|
Includes FHLB stock, FRB stock, and related cash dividends.
|
(3)
|
Includes equity securities and related cash dividends.
|
(4)
|
Represents the difference between the average rate on interest-earning assets and the average cost of interest-bearing liabilities.
|
(5)
|
Represents net interest income divided by average interest-earning assets.
|
At
June 30,
|
For
The Year Ended June 30,
|
|||||||||||||||
2013
|
2013
|
2012
|
2011
|
|||||||||||||
Weighted-average yield on loan portfolio
|
5.04 | % | 5.54 | % | 6.50 | % | 6.41 | % | ||||||||
Weighted-average yield on mortgage-backed securities
|
1.82 | 1.99 | 4.58 | 4.83 | ||||||||||||
Weighted-average yield on investment securities (1)
|
2.29 | 2.43 | 2.83 | 3.18 | ||||||||||||
Weighted-average yield on other interest-earning assets
|
0.39 | 0.41 | 0.29 | 0.35 | ||||||||||||
Weighted-average yield on all interest-earning assets
|
4.83 | 5.07 | 5.53 | 5.78 | ||||||||||||
Weighted-average rate paid on deposits
|
0.90 | 1.11 | 1.51 | 1.96 | ||||||||||||
Weighted-average rate paid on securities sold under
|
||||||||||||||||
agreements to repurchase
|
0.58 | 0.74 | 0.87 | 0.99 | ||||||||||||
Weighted-average rate paid on FHLB advances
|
3.94 | 3.29 | 4.03 | 4.19 | ||||||||||||
Weighted-average rate paid on subordinated debt
|
3.02 | 3.15 | 3.21 | 3.15 | ||||||||||||
Weighted-average rate paid on all interest-bearing
liabilities
|
1.03 | 1.22 | 1.63 | 2.07 | ||||||||||||
Interest rate spread (spread between weighted average
rate on all interest-earning assets and all interest-
bearing liabilities)
|
3.81 | 3.85 | 3.90 | 3.71 | ||||||||||||
Net interest margin (net interest income as a percentage
of average interest-earning assets)
|
4.01 | 4.02 | 4.12 | 3.92 |
Years Ended June 30,
2013 Compared to 2012
Increase (Decrease) Due to
|
Years Ended June 30,
2012 Compared to 2011
Increase (Decrease) Due to
|
|||||||||||||||||||||||||||||||
(dollars in thousands)
|
Rate
|
Volume
|
Rate/
Volume
|
Net
|
Rate
|
Volume
|
Rate/
Volume
|
Net
|
||||||||||||||||||||||||
Interest-earning assets:
|
||||||||||||||||||||||||||||||||
Loans receivable (1)
|
$ | (5,369 | ) | $ | 3,925 | $ | (550 | ) | $ | (1,994 | ) | $ | 453 | $ | 3,582 | $ | 49 | $ | 4,084 | |||||||||||||
Mortgage-backed securities
|
(523 | ) | (139 | ) | 78 | (584 | ) | (71 | ) | (401 | ) | 20 | (452 | ) | ||||||||||||||||||
Investment securities (2)
|
(210 | ) | 293 | (36 | ) | 47 | (142 | ) | 381 | (44 | ) | 195 | ||||||||||||||||||||
Other interest-earning deposits
|
87 | (164 | ) | (66 | ) | (143 | ) | (20 | ) | 136 | (25 | ) | 90 | |||||||||||||||||||
Total net change in income on
|
||||||||||||||||||||||||||||||||
interest-earning assets
|
(6,015 | ) | 3,915 | (574 | ) | (2,674 | ) | 220 | 3,698 | --- | 3,918 | |||||||||||||||||||||
Interest-bearing liabilities:
|
||||||||||||||||||||||||||||||||
Deposits
|
(2,172 | ) | 104 | (101 | ) | (2,169 | ) | (2,216 | ) | 1,717 | (471 | ) | (970 | ) | ||||||||||||||||||
Securities sold under
|
||||||||||||||||||||||||||||||||
agreements to repurchase
|
(35 | ) | 4 | (2 | ) | (33 | ) | (35 | ) | (23 | ) | 3 | (55 | ) | ||||||||||||||||||
Subordinated debt
|
(4 | ) | --- | (1 | ) | (5 | ) | 4 | --- | 1 | 5 | |||||||||||||||||||||
FHLB advances
|
(227 | ) | (10 | ) | 3 | (234 | ) | (59 | ) | (272 | ) | 10 | (321 | ) | ||||||||||||||||||
Total net change in expense on
|
||||||||||||||||||||||||||||||||
interest-bearing liabilities
|
(2,438 | ) | 98 | (101 | ) | (2,442 | ) | (2,306 | ) | 1,422 | (457 | ) | (1,341 | ) | ||||||||||||||||||
Net change in net interest income
|
$ | (3,577 | ) | $ | 3,817 | $ | (473 | ) | $ | (233 | ) | $ | 2,526 | $ | 2,276 | $ | 457 | $ | 5,259 |
June 30, 2013
|
||||||||||||||||||||||
Change in Rates
|
Net Portfolio
|
NPV as % of
PV of Assets
|
||||||||||||||||||||
$ Amount
|
$ Change
|
% Change
|
NPV Ratio
|
Change
|
||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||||
+300 bp | $ | 93,468 | $ | (12,328 | ) | (12 | ) | 11.70 | % | -1.26 | % | |||||||||||
+200 bp | 97,693 | (8,104 | ) | (8 | ) | 12.15 | % | -0.82 | % | |||||||||||||
+100 bp | 101,241 | (4,555 | ) | (4 | ) | 12.50 | % | -0.46 | % | |||||||||||||
0 bp | 105,796 | --- | --- | 12.96 | % | 0.00 | % | |||||||||||||||
-100 bp | 110,740 | 4,944 | 5 | 13.49 | % | 0.52 | % | |||||||||||||||
-200 bp | 115,237 | 9,440 | 9 | 13.96 | % | 0.99 | % | |||||||||||||||
-300 b[ | 120,167 | 14,371 | 14 | 14.47 | % | 1.51 | % | |||||||||||||||
June 30, 2012
|
||||||||||||||||||||||
Change in Rates
|
Net Portfolio
|
NPV as % of
PV of Assets
|
||||||||||||||||||||
$ Amount
|
$ Change
|
% Change
|
NPV Ratio
|
Change
|
||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||||
+300 bp | bp | $ | 87,871 | $ | (8,909 | ) | (9 | ) | 11.60 | % | -1.02 | % | ||||||||||
+200 bp | bp | 91,106 | (5,674 | ) | (6 | ) | 11.99 | % | -0.63 | % | ||||||||||||
+100 bp | bp | 93,831 | (2,949 | ) | (3 | ) | 12.29 | % | -0.33 | % | ||||||||||||
0 bp | bp | 96,780 | --- | --- | 12.62 | % | 0.00 | % | ||||||||||||||
-100 bp | bp | 99,147 | 2,367 | 2 | 12.88 | % | 0.25 | % | ||||||||||||||
-200 bp | bp | 102,753 | 5,973 | 6 | 13.28 | % | 0.66 | % | ||||||||||||||
-300 bp | bp | 106,045 | 9,266 | 10 | 13.65 | % | 1.02 | % | ||||||||||||||
2013
|
2012
|
|||||||
Assets
|
||||||||
Cash and cash equivalents
|
$ | 12,788,950 | $ | 33,421,099 | ||||
Interest-bearing time deposits
|
980,000 | 1,273,000 | ||||||
Available for sale securities (Note 2)
|
80,004,226 | 75,126,845 | ||||||
Stock in FHLB of Des Moines
|
2,006,600 | 2,018,200 | ||||||
Stock in Federal Reserve Bank of St. Louis
|
1,004,450 | 1,001,050 | ||||||
Loans receivable, net of allowance for loan losses of
$8,385,980 and $7,492,054 at June 30, 2013,
and June 30, 2012, respectively (Notes 3 and 4)
|
||||||||
647,165,899 | 583,464,521 | |||||||
Accrued interest receivable
|
3,969,697 | 3,694,344 | ||||||
Premises and equipment, net (Note 5)
|
17,515,834 | 11,347,064 | ||||||
Bank owned life insurance – cash surrender value
|
16,467,043 | 15,957,500 | ||||||
Intangible assets, net
|
1,040,426 | 1,457,557 | ||||||
Prepaid expenses and other assets
|
13,448,115 | 10,427,788 | ||||||
TOTAL ASSETS
|
$ | 796,391,240 | $ | 739,188,968 | ||||
Liabilities and Stockholder’s Equity
|
||||||||
Deposits (Note 6)
|
$ | 632,378,933 | $ | 584,813,624 | ||||
Securities sold under agreements to repurchase (Note 7)
|
27,788,192 | 25,642,407 | ||||||
Advances from FHLB of Des Moines (Note 8)
|
24,500,000 | 24,500,000 | ||||||
Accounts payable and other liabilities
|
2,149,234 | 1,662,207 | ||||||
Accrued interest payable
|
528,528 | 625,659 | ||||||
Subordinated debt (Note 9)
|
7,217,000 | 7,217,000 | ||||||
TOTAL LIABILITIES
|
694,561,887 | 644,460,897 | ||||||
Commitments and contingencies (Note 15)
|
- | - | ||||||
Preferred stock, $.01 par value, $1,000 liquidation value;
500,000 shares authorized; 20,000 shares issued and
outstanding at June 30, 2013, and June 30, 2012
|
20,000,000 | 20,000,000 | ||||||
Common stock, $.01 par value; 4,000,000 shares
authorized; 3,294,040 and 3,289,670 shares issued at
June 30, 2013 and June 30, 2012, respectively
|
32,620 | 32,527 | ||||||
Warrants to acquire common stock
|
176,790 | 176,790 | ||||||
Additional paid-in capital
|
22,752,744 | 22,479,767 | ||||||
Retained earnings
|
59,046,139 | 51,365,401 | ||||||
Treasury stock of 0 and 2,230 shares at June 30, 2013,
and June 30, 2012, respectively, at cost
|
- | (26,315 | ) | |||||
Accumulated other comprehensive (loss) income
|
(178,940 | ) | 699,901 | |||||
TOTAL STOCKHOLDERS’ EQUITY
|
101,829,353 | 94,728,071 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$ | 796,391,240 | $ | 739,188,968 |
2013
|
2012
|
2011
|
||||||||||
Interest Income:
|
||||||||||||
Loans
|
$ | 34,355,076 | $ | 36,349,320 | $ | 32,265,395 | ||||||
Investment securities
|
1,528,530 | 1,482,094 | 1,286,779 | |||||||||
Mortgage-backed securities
|
341,128 | 924,771 | 1,376,856 | |||||||||
Other interest-earning assets
|
66,603 | 209,119 | 118,627 | |||||||||
TOTAL INTEREST INCOME
|
36,291,337 | 38,965,304 | 35,047,657 | |||||||||
Interest Expense:
|
||||||||||||
Deposits
|
6,073,149 | 8,243,381 | 9,213,424 | |||||||||
Securities sold under agreements to repurchase
|
201,662 | 234,562 | 290,203 | |||||||||
Advances from FHLB of Des Moines
|
999,046 | 1,232,919 | 1,554,344 | |||||||||
Subordinated debt
|
227,127 | 232,154 | 226,776 | |||||||||
TOTAL INTEREST EXPENSE
|
7,500,984 | 9,943,016 | 11,284,747 | |||||||||
NET INTEREST INCOME
|
28,790,353 | 29,022,288 | 23,762,910 | |||||||||
Provision for loan losses (Note 3)
|
1,716,050 | 1,784,715 | 2,384,799 | |||||||||
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES
|
27,074,303 | 27,237,573 | 21,378,111 | |||||||||
Noninterest income:
|
||||||||||||
Deposit account charges and related fees
|
1,873,125 | 1,524,733 | 1,570,096 | |||||||||
Bank credit transaction fees
|
1,186,345 | 1,109,503 | 889,176 | |||||||||
Loan late charges
|
239,928 | 221,550 | 231,897 | |||||||||
Other loan fees
|
290,017 | 200,260 | 196,185 | |||||||||
Net realized gains on sale of loans
|
302,538 | 315,674 | 173,168 | |||||||||
Bargain purchase gain on acquisitions
|
- | - | 6,996,750 | |||||||||
Earnings on bank owned life insurance
|
509,543 | 343,031 | 277,540 | |||||||||
Other income
|
66,774 | 348,459 | 167,480 | |||||||||
TOTAL NONINTEREST INCOME
|
4,468,270 | 4,063,210 | 10,502,292 | |||||||||
Noninterest expense:
|
||||||||||||
Compensation and benefits
|
10,136,068 | 9,237,003 | 7,987,470 | |||||||||
Occupancy and equipment, net
|
2,816,738 | 2,531,587 | 2,242,284 | |||||||||
Deposit insurance premiums
|
377,587 | 375,001 | 563,751 | |||||||||
Legal and professional fees
|
477,020 | 442,931 | 530,133 | |||||||||
Advertising
|
313,025 | 340,654 | 262,294 | |||||||||
Postage and office supplies
|
470,497 | 441,866 | 362,201 | |||||||||
Intangible amortization
|
417,132 | 417,131 | 354,636 | |||||||||
Bank card network fees
|
567,101 | 567,584 | 442,775 | |||||||||
Other operating expense
|
1,945,719 | 2,251,654 | 1,713,225 | |||||||||
TOTAL NONINTEREST EXPENSE
|
17,520,887 | 16,605,411 | 14,458,769 | |||||||||
INCOME BEFORE INCOME TAXES
|
14,021,686 | 14,695,372 | 17,421,634 | |||||||||
Income Taxes (Note 11)
|
||||||||||||
Current
|
3,724,085 | 6,006,254 | 4,443,982 | |||||||||
Deferred
|
230,386 | (1,409,145 | ) | 1,507,621 | ||||||||
3,954,471 | 4,597,109 | 5,951,603 | ||||||||||
NET INCOME
|
$ | 10,067,215 | $ | 10,098,263 | $ | 11,470,031 | ||||||
Less: charge for early redemption of preferred stock issued at a discount
|
- | 94,365 | - | |||||||||
Less: dividend on preferred shares
|
345,115 | 424,184 | 511,814 | |||||||||
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS
|
$ | 9,722,100 | $ | 9,579,714 | $ | 10,958,217 | ||||||
Basic earnings per share available to common stockholders
|
$ | 2.95 | $ | 3.43 | $ | 5.25 | ||||||
Diluted earnings per share available to common stockholders
|
2.88 | 3.32 | 5.12 | |||||||||
Dividends paid
|
0.60 | 0.48 | 0.48 |
2013
|
2012
|
2011
|
||||||||||
NET INCOME
|
$ | 10,067,215 | $ | 10,098,263 | $ | 11,470,031 | ||||||
Other comprehensive (loss) income:
|
||||||||||||
Unrealized (losses) gains on securities available-for-sale
|
(1,419,554 | ) | 327,640 | (185,554 | ) | |||||||
Unrealized gains (losses) on available-for-sale securities for
which a portion of an other-than-temporary impairment
has been recognized in income
|
15,957 | (72,626 | ) | 97,826 | ||||||||
Defined benefit pension plan net gain
|
5,426 | 3,622 | 2,905 | |||||||||
Tax benefit (expense)
|
519,330 | (94,355 | ) | 32,479 | ||||||||
Total other comprehensive (loss) income
|
(878,841 | ) | 164,281 | (52,344 | ) | |||||||
COMPREHENSIVE INCOME
|
$ | 9,188,374 | $ | 10,262,544 | $ | 11,417,687 |
Warrants to
|
Additional
|
Accumulated Other
|
Total
|
|||||||||||||||||||||||||||||
Preferred
|
Acquire
|
Paid-In
|
Retained
|
Comprehensive
|
Stockholders'
|
|||||||||||||||||||||||||||
Stock
|
Common Stock
|
Common Stock
|
Capital
|
Earnings
|
Treasury Stock
|
Income (Loss)
|
Equity
|
|||||||||||||||||||||||||
BALANCE AS OF JUNE 30, 2010
|
$ | 9,421,321 | $ | 29,572 | $ | 176,790 | $ | 16,367,698 | $ | 33,060,723 | $ | (13,994,870 | ) | $ | 587,964 | $ | 45,649,198 | |||||||||||||||
Net Income
|
11,470,031 | 11,470,031 | ||||||||||||||||||||||||||||||
Change in unrealized gain on available for sale securities
|
(55,249 | ) | (55,249 | ) | ||||||||||||||||||||||||||||
Defined benefit pension plan net gain
|
2,905 | 2,905 | ||||||||||||||||||||||||||||||
Dividends paid on common stock ($.48 per share )
|
(1,004,749 | ) | (1,004,749 | ) | ||||||||||||||||||||||||||||
Dividends paid on preferred stock
|
(477,500 | ) | (477,500 | ) | ||||||||||||||||||||||||||||
Accretion of discount on preferred stock
|
34,314 | (34,314 | ) | - | ||||||||||||||||||||||||||||
Stock option expense
|
10,388 | 10,388 | ||||||||||||||||||||||||||||||
Stock grant expense
|
13,152 | 13,152 | ||||||||||||||||||||||||||||||
Tax benefit of stock grants
|
6,860 | 6,860 | ||||||||||||||||||||||||||||||
Exercise of stock options
|
(157,895 | ) | 240,625 | 82,730 | ||||||||||||||||||||||||||||
Tax benefit of stock options
|
34,342 | 34,342 | ||||||||||||||||||||||||||||||
BALANCE AS OF JUNE 30, 2011
|
9,455,635 | 29,572 | 176,790 | 16,274,545 | 43,014,191 | (13,754,245 | ) | 535,620 | 55,732,108 | |||||||||||||||||||||||
Net Income
|
10,098,263 | 10,098,263 | ||||||||||||||||||||||||||||||
Change in unrealized gain on available for sale securities
|
160,659 | 160,659 | ||||||||||||||||||||||||||||||
Defined benefit pension plan net gain
|
3,622 | 3,622 | ||||||||||||||||||||||||||||||
Dividends paid on common stock ($.48 per share )
|
(1,283,928 | ) | (1,283,928 | ) | ||||||||||||||||||||||||||||
Dividends paid on preferred stock
|
(368,760 | ) | (368,760 | ) | ||||||||||||||||||||||||||||
Stock option expense
|
11,860 | 11,860 | ||||||||||||||||||||||||||||||
Stock grant expense
|
10,711 | 10,711 | ||||||||||||||||||||||||||||||
Tax benefit of stock grants
|
3,135 | 3,135 | ||||||||||||||||||||||||||||||
Treasury stock issued
|
13,700,155 | 13,700,155 | ||||||||||||||||||||||||||||||
Exercise of stock options
|
(4,930 | ) | 27,775 | 22,845 | ||||||||||||||||||||||||||||
Redemption of preferred stock
|
(9,550,000 | ) | (9,550,000 | ) | ||||||||||||||||||||||||||||
Common stock issued
|
2,955 | 6,211,238 | 6,214,193 | |||||||||||||||||||||||||||||
Preferred stock issued
|
20,000,000 | (26,792 | ) | 19,973,208 | ||||||||||||||||||||||||||||
Accretion of discount on preferred stock
|
94,365 | (94,365 | ) | - | ||||||||||||||||||||||||||||
BALANCE AS OF JUNE 30, 2012
|
20,000,000 | 32,527 | 176,790 | 22,479,767 | 51,365,401 | (26,315 | ) | 699,901 | 94,728,072 |
Warrants to
|
Additional
|
Accumulated Other
|
Total
|
|||||||||||||||||||||||||||||
Preferred
|
Acquire
|
Paid-In
|
Retained
|
Comprehensive
|
Stockholders'
|
|||||||||||||||||||||||||||
Stock
|
Common Stock
|
Common Stock
|
Capital
|
Earnings
|
Treasury Stock
|
Income (Loss)
|
Equity
|
|||||||||||||||||||||||||
BALANCE AS OF JUNE 30, 2012
|
20,000,000 | 32,527 | 176,790 | 22,479,768 | 51,365,401 | (26,315 | ) | 699,901 | 94,728,072 | |||||||||||||||||||||||
Net Income
|
10,067,215 | 10,067,215 | ||||||||||||||||||||||||||||||
Change in unrealized gain (loss) on
available for sale securities
|
(884,267 | ) | (884,267 | ) | ||||||||||||||||||||||||||||
Defined benefit pension plan net gain
|
5,426 | 5,426 | ||||||||||||||||||||||||||||||
Dividends paid on common stock ($.60 per share )
|
(1,974,924 | ) | (1,974,924 | ) | ||||||||||||||||||||||||||||
Dividends paid on preferred stock
|
(411,553 | ) | (411,553 | ) | ||||||||||||||||||||||||||||
Stock option expense
|
14,190 | 14,190 | ||||||||||||||||||||||||||||||
Stock grant expense
|
171,999 | 171,999 | ||||||||||||||||||||||||||||||
Tax benefit of stock grant
|
12,677 | 12,677 | ||||||||||||||||||||||||||||||
Exercise of stock options
|
43 | 74,160 | 26,315 | 100,518 | ||||||||||||||||||||||||||||
Common stock issued
|
50 | (50 | ) | - | ||||||||||||||||||||||||||||
BALANCE AS OF JUNE 30, 2013
|
$ | 20,000,000 | $ | 32,620 | $ | 176,790 | $ | 22,752,744 | $ | 59,046,139 | $ | - | $ | (178,940 | ) | $ | 101,829,353 |
2013
|
2012
|
2011
|
||||||||||
Cash Flows From Operating Activities:
|
||||||||||||
NET INCOME
|
$ | 10,067,215 | $ | 10,098,263 | $ | 11,470,031 | ||||||
Items not requiring (providing) cash:
|
||||||||||||
Depreciation
|
1,151,199 | 937,647 | 733,131 | |||||||||
Loss on disposal of fixed assets
|
100,895 | - | - | |||||||||
Stock option and stock grant expense
|
198,866 | 25,705 | 64,742 | |||||||||
Loss (gain) on sale of foreclosed assets
|
69,346 | (23,089 | ) | 71,964 | ||||||||
Amortization of intangible assets
|
417,132 | 417,131 | 354,636 | |||||||||
Increase in cash surrender value of bank owned life insurance
|
(509,543 | ) | (343,031 | ) | (277,540 | ) | ||||||
Provision for loan losses
|
1,716,050 | 1,784,715 | 2,384,799 | |||||||||
Amortization of premiums and discounts on securities
|
607,562 | 389,958 | 258,606 | |||||||||
Bargain purchase gain on acquisition
|
- | - | (6,996,750 | ) | ||||||||
Decrease (increase) deferred income taxes
|
230,386 | (1,409,145 | ) | 1,507,621 | ||||||||
Originations of loans held for sale
|
(7,669,380 | ) | (8,345,902 | ) | (6,687,924 | ) | ||||||
Proceeds from sales of loans held for sale
|
7,405,403 | 7,974,128 | 6,543,552 | |||||||||
Gains on sales of loans held for sale
|
(302,538 | ) | (315,674 | ) | (173,168 | ) | ||||||
Changes in:
|
||||||||||||
Accrued interest receivable
|
(275,353 | ) | 105,591 | 100,525 | ||||||||
Prepaid expenses and other assets
|
1,383,306 | 1,098,761 | 662,040 | |||||||||
Accounts payable and other liabilities
|
762,306 | (4,835,162 | ) | 4,248,091 | ||||||||
Accrued interest payable
|
(97,131 | ) | (208,685 | ) | (107,241 | ) | ||||||
NET CASH PROVIDED BY OPERATING ACTIVITIES
|
15,255,721 | 7,351,211 | 14,157,115 | |||||||||
Cash flows from investing activities:
|
||||||||||||
Net increase in loans
|
(68,738,090 | ) | (28,632,405 | ) | (26,488,788 | ) | ||||||
Net cash received in acquisitions
|
- | - | 38,249,286 | |||||||||
Net change in interest-bearing deposits
|
293,000 | (481,000 | ) | - | ||||||||
Proceeds from maturities of available for sale securities
|
33,198,504 | 39,251,480 | 26,595,224 | |||||||||
Proceeds from maturities of interest-bearing time deposits
|
- | - | 297,000 | |||||||||
Net redemptions of Federal Home Loan Bank stock
|
11,600 | 351,000 | 1,020,900 | |||||||||
Net purchases of Federal Reserve Bank of Saint Louis stock
|
(3,400 | ) | (282,300 | ) | (135,650 | ) | ||||||
Purchases of available-for-sale securities
|
(40,087,044 | ) | (51,186,068 | ) | (23,303,316 | ) | ||||||
Purchases of premises and equipment
|
(7,556,825 | ) | (4,227,182 | ) | (1,139,257 | ) | ||||||
Purchases of bank owned life insurance
|
- | (7,500,000 | ) | - | ||||||||
Investments in state & federal tax credits
|
(2,744,436 | ) | (686,109 | ) | (2,138,984 | ) | ||||||
Proceeds from sale of fixed assets
|
135,961 | - | - | |||||||||
Proceeds from sale of foreclosed assets
|
2,177,725 | 783,889 | 724,667 | |||||||||
NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES
|
(83,313,005 | ) | (52,608,695 | ) | 13,681,082 | |||||||
|
||||||||||||
Cash flows from financing activities:
|
||||||||||||
Net increase in demand deposits and savings accounts
|
6,637,811 | 57,996,020 | 39,133,943 | |||||||||
Net increase (decrease) in certificates of deposits
|
40,927,498 | (33,333,213 | ) | (32,714,693 | ) | |||||||
Net increase (decrease) in securities sold under agreements to repurchase
|
2,145,785 | 412,356 | (5,138,697 | ) | ||||||||
Proceeds from Federal Home Loan Bank advances
|
92,285,000 | - | - | |||||||||
Repayments of Federal Home Loan Bank advances
|
(92,285,000 | ) | (9,000,000 | ) | (27,206,803 | ) | ||||||
Preferred stock issued
|
- | 19,973,208 | - | |||||||||
Redemption of preferred stock
|
- | (9,550,000 | ) | - | ||||||||
Common stock issued
|
- | 19,914,349 | - | |||||||||
Exercise of stock options
|
100,518 | 22,845 | 82,730 | |||||||||
Dividends paid on preferred stock
|
(411,553 | ) | (368,760 | ) | (477,500 | ) | ||||||
Dividends paid on common stock
|
(1,974,924 | ) | (1,283,928 | ) | (1,004,749 | ) | ||||||
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
|
47,425,135 | 44,782,877 | (27,325,769 | ) | ||||||||
(Decrease) increase in cash and cash equivalents
|
(20,632,149 | ) | (474,607 | ) | 512,428 | |||||||
Cash and cash equivalents at beginning of period
|
33,421,099 | 33,895,706 | 33,383,278 | |||||||||
|
||||||||||||
Cash and cash equivalents at end of period
|
$ | 12,788,950 | $ | 33,421,099 | $ | 33,895,706 | ||||||
Supplemental disclosures of cash flow information:
|
||||||||||||
Noncash investing and financing activities:
|
||||||||||||
Conversion of loans to foreclosed real estate
|
$ | 3,690,950 | $ | 1,149,502 | $ | 896,875 | ||||||
Conversion of foreclosed real estate to loans
|
68,400 | 651,550 | 157,500 | |||||||||
Conversion of loans to repossessed assets
|
264,627 | 148,720 | 396,229 | |||||||||
Cash paid during the period for:
|
||||||||||||
Interest (net of interest credited)
|
$ | 2,504,600 | $ | 2,862,935 | $ | 3,079,647 | ||||||
Income taxes
|
2,736,084 | 6,946,830 | 1,947,171 |
June 30, 2013
|
||||||||||||||||
Gross
|
Gross
|
Estimated
|
||||||||||||||
Amortized
|
Unrealized
|
Unrealized
|
Fair
|
|||||||||||||
Cost
|
Gains
|
Losses
|
Value
|
|||||||||||||
Debt and equity securities:
|
||||||||||||||||
U.S. government and Federal agency obligations
|
$ | 22,972,073 | $ | 2,590 | $ | (566,778 | ) | $ | 22,407,885 | |||||||
Obligations of states and political subdivisions
|
38,135,005 | 1,432,739 | (244,437 | ) | 39,323,307 | |||||||||||
FHLMC preferred stock
|
- | - | - | - | ||||||||||||
Other securities
|
2,638,303 | 37,328 | (1,116,652 | ) | 1,558,979 | |||||||||||
TOTAL DEBT AND EQUITY SECURITIES
|
63,745,381 | 1,472,657 | (1,927,867 | ) | 63,290,171 | |||||||||||
Mortgage-backed securities
|
||||||||||||||||
FHLMC certificates
|
3,404,901 | 136,052 | (31,499 | ) | 3,509,454 | |||||||||||
GNMA certificates
|
69,895 | 1,895 | - | 71,790 | ||||||||||||
FNMA certificates
|
2,700,570 | 145,206 | - | 2,845,776 | ||||||||||||
CMOs issues by government agencies
|
10,404,445 | 59,985 | (177,395 | ) | 10,287,035 | |||||||||||
TOTAL MORTGAGE-BACKED SECURITIES
|
16,579,811 | 343,138 | (208,894 | ) | 16,714,055 | |||||||||||
TOTAL
|
$ | 80,325,192 | $ | 1,815,795 | $ | (2,136,761 | ) | $ | 80,004,226 | |||||||
June 30, 2012
|
||||||||||||||||
Gross
|
Gross
|
Estimated
|
||||||||||||||
Amortized
|
Unrealized
|
Unrealized
|
Fair
|
|||||||||||||
Cost
|
Gains
|
Losses
|
Value
|
|||||||||||||
Debt and equity securities:
|
||||||||||||||||
U.S. government and Federal agency obligations
|
18,046,654 | 53,348 | (384 | ) | 18,099,618 | |||||||||||
Obligations of states and political subdivisions
|
34,656,284 | 1,823,625 | (98,656 | ) | 36,381,253 | |||||||||||
FHLMC preferred stock
|
- | - | - | - | ||||||||||||
Other securities
|
2,646,719 | 14,310 | (1,267,772 | ) | 1,393,257 | |||||||||||
TOTAL DEBT AND EQUITY SECURITIES
|
55,349,657 | 1,891,283 | (1,366,812 | ) | 55,874,128 | |||||||||||
Mortgage-backed securities
|
||||||||||||||||
FHLMC certificates
|
3,420,821 | 245,143 | - | 3,665,964 | ||||||||||||
GNMA certificates
|
79,088 | 1,489 | - | 80,577 | ||||||||||||
FNMA certificates
|
4,437,325 | 256,343 | - | 4,693,668 | ||||||||||||
CMOs issues by government agencies
|
10,757,324 | 63,045 | (7,861 | ) | 10,812,508 | |||||||||||
TOTAL MORTGAGE-BACKED SECURITIES
|
18,694,558 | 566,020 | (7,861 | ) | 19,252,717 | |||||||||||
TOTAL
|
$ | 74,044,215 | $ | 2,457,303 | $ | (1,374,673 | ) | $ | 75,126,845 |
June 30, 2013
|
||||||||
Estimated
|
||||||||
Amortized
|
Fair
|
|||||||
Cost
|
Value
|
|||||||
Available for Sale:
|
||||||||
Within one year
|
$ | 436,500 | $ | 436,722 | ||||
After one year but less than five years
|
11,417,112 | 11,465,470 | ||||||
After five years but less than ten years
|
27,485,484 | 27,326,875 | ||||||
After ten years
|
24,406,285 | 24,061,104 | ||||||
Total investment securities
|
63,745,381 | 63,290,171 | ||||||
Mortgage-backed securities
|
16,579,811 | 16,714,055 | ||||||
Total investments and mortgage-backed securities
|
$ | 80,325,192 | $ | 80,004,226 |
Less than 12 months
|
More than 12 months
|
Total
|
||||||||||||||||||||||
Unrealized
|
Unrealized
|
Unrealized
|
||||||||||||||||||||||
For the year ended June 30, 2013
|
Fair Value
|
Losses
|
Fair Value
|
Losses
|
Fair Value
|
Losses
|
||||||||||||||||||
U.S. government-sponsored enterprises (GSEs)
|
$ | 20,397,826 | $ | 566,778 | $ | - | $ | - | $ | 20,397,826 | $ | 566,778 | ||||||||||||
Mortgage-backed securities
|
3,052,113 | 206,713 | 2,403,467 | 2,181 | 5,455,580 | 208,894 | ||||||||||||||||||
Other securities
|
- | - | 445,777 | 1,116,652 | 445,777 | 1,116,652 | ||||||||||||||||||
Obligations of state and political subdivisions
|
8,588,542 | 173,966 | 2,525,673 | 70,471 | 11,114,215 | 244,437 | ||||||||||||||||||
Total investments and mortgage-backed securities
|
$ | 32,038,481 | $ | 947,457 | $ | 5,374,917 | $ | 1,189,304 | $ | 37,413,398 | $ | 2,136,761 | ||||||||||||
Less than 12 months
|
More than 12 months
|
Total
|
||||||||||||||||||||||
Unrealized
|
Unrealized
|
Unrealized
|
||||||||||||||||||||||
For the year ended June 30, 2012
|
Fair Value
|
Losses
|
Fair Value
|
Losses
|
Fair Value
|
Losses
|
||||||||||||||||||
U.S. government-sponsored enterprises (GSEs)
|
$ | 999,616 | $ | 384 | $ | - | $ | - | $ | 999,616 | $ | 384 | ||||||||||||
Mortgage-backed securities
|
1,943,968 | 7,861 | - | - | 1,943,968 | 7,861 | ||||||||||||||||||
Other securities
|
- | - | 282,639 | 1,267,772 | 282,639 | 1,267,772 | ||||||||||||||||||
Obligations of state and political subdivisions
|
5,525,825 | 98,656 | - | - | 5,525,825 | 98,656 | ||||||||||||||||||
Total investments and mortgage-backed securities
|
$ | 8,469,409 | $ | 106,901 | $ | 282,639 | $ | 1,267,772 | $ | 8,752,048 | $ | 1,374,673 |
Accumulated Credit Losses
|
||||||||
Period Ended June 30,
|
||||||||
2013
|
2012
|
|||||||
Credit losses on debt securities held
|
||||||||
Beginning of period
|
$ | 375,000 | $ | 375,000 | ||||
Additions related to OTTI losses not previously recognized
|
- | - | ||||||
Reductions due to sales
|
- | - | ||||||
Reductions due to change in intent or likelihood of sale
|
- | - | ||||||
Additions related to increases in previously-recognized OTTI losses
|
- | - | ||||||
Reductions due to increases in expected cash flows
|
- | - | ||||||
End of period
|
$ | 375,000 | $ | 375,000 |
June 30, 2013
|
June 30, 2012
|
|||||||
Real Estate Loans:
|
||||||||
Residential
|
$ | 233,888,442 | $ | 201,012,698 | ||||
Construction
|
30,724,858 | 40,181,979 | ||||||
Commercial
|
242,303,922 | 200,957,429 | ||||||
Consumer loans
|
28,414,878 | 28,985,905 | ||||||
Commercial loans
|
130,868,484 | 137,004,222 | ||||||
|
666,200,584 | 608,142,233 | ||||||
Loans in process
|
(10,792,041 | ) | (17,370,404 | ) | ||||
Deferred loan fees, net
|
143,336 | 184,746 | ||||||
Allowance for loan losses
|
(8,385,980 | ) | (7,492,054 | ) | ||||
Total loans
|
$ | 647,165,899 | $ | 583,464,521 |
Residential
|
Construction
|
Commercial
|
||||||||||||||||||||||
June 30, 2013
|
Real Estate
|
Real Estate
|
Real Estate
|
Consumer
|
Commercial
|
Total
|
||||||||||||||||||
Allowance for loan losses:
|
||||||||||||||||||||||||
Balance, beginning of period
|
$ | 1,635,346 | $ | 243,169 | $ | 2,985,838 | $ | 483,597 | $ | 2,144,104 | $ | 7,492,054 | ||||||||||||
Provision charged to expense
|
472,183 | 64,481 | 1,033,791 | 19,437 | 126,158 | 1,716,050 | ||||||||||||||||||
Losses charged off
|
(301,836 | ) | (35,351 | ) | (422,071 | ) | (47,106 | ) | (49,431 | ) | (855,795 | ) | ||||||||||||
Recoveries
|
4,282 | 363 | 4,984 | 15,738 | 8,304 | 33,671 | ||||||||||||||||||
Balance, end of period
|
$ | 1,809,975 | $ | 272,662 | $ | 3,602,542 | $ | 471,666 | $ | 2,229,135 | $ | 8 ,385,980 | ||||||||||||
Ending Balance: individually
evaluated for impairment
|
$ | - | $ | - | $ | 85,000 | $ | - | $ | - | $ | 85,000 | ||||||||||||
Ending Balance: collectively
evaluated for impairment
|
$ | 1,809,975 | $ | 272,662 | $ | 3,517,542 | $ | 471,666 | $ | 1,671,646 | $ | 7,743,491 | ||||||||||||
Ending Balance: loans acquired
with deteriorated credit quality
|
$ | - | $ | - | $ | - | $ | - | $ | 557,489 | $ | 557,489 | ||||||||||||
|
||||||||||||||||||||||||
Loans:
|
||||||||||||||||||||||||
Ending Balance: individually
evaluated for impairment
|
$ | - | $ | - | $ | 144,328 | $ | - | $ | - | $ | 144,328 | ||||||||||||
Ending Balance: collectively
evaluated for impairment
|
$ | 232,186,722 | $ | 19,932,817 | $ | 240,888,891 | $ | 28,414,878 | $ | 129,735,511 | $ | 651,158,819 | ||||||||||||
Ending Balance: loans acquired
with deteriorated credit quality
|
$ | 1,701,720 | $ | - | $ | 1,270,703 | $ | - | $ | 1,132,973 | $ | 4,105,396 | ||||||||||||
Residential
|
Construction
|
Commercial
|
||||||||||||||||||||||
June 30, 2012
|
Real Estate
|
Real Estate
|
Real Estate
|
Consumer
|
Commercial
|
Total
|
||||||||||||||||||
Allowance for loan losses:
|
||||||||||||||||||||||||
Balance, beginning of period
|
$ | 1,618,285 | $ | 192,752 | $ | 2,671,482 | $ | 441,207 | $ | 1,514,725 | $ | 6,438,451 | ||||||||||||
Provision charged to expense
|
108,318 | 49,276 | 354,814 | 223,046 | 1,049,261 | 1,784,715 | ||||||||||||||||||
Losses charged off
|
(98,189 | ) | - | (40,888 | ) | (195,311 | ) | (435,770 | ) | (770,158 | ) | |||||||||||||
Recoveries
|
6,932 | 1,141 | 430 | 14,655 | 15,888 | 39,046 | ||||||||||||||||||
Balance, end of period
|
$ | 1,635,346 | $ | 243,169 | $ | 2,985,838 | $ | 483,597 | $ | 2,144,104 | $ | 7,492,054 | ||||||||||||
Ending Balance: individually
evaluated for impairment
|
$ | - | $ | - | $ | 347,815 | $ | - | $ | - | $ | 347,815 | ||||||||||||
Ending Balance: collectively
evaluated for impairment
|
$ | 1,635,346 | $ | 243,169 | $ | 2,632,679 | $ | 483,597 | $ | 1,767,967 | $ | 6,762,758 | ||||||||||||
Ending Balance: loans acquired
with deteriorated credit quality
|
$ | - | $ | - | $ | 5,344 | $ | - | $ | 376,137 | $ | 381,481 | ||||||||||||
|
||||||||||||||||||||||||
Loans:
|
||||||||||||||||||||||||
Ending Balance: individually
evaluated for impairment
|
$ | - | $ | - | $ | 976,881 | $ | - | $ | - | $ | 976,881 | ||||||||||||
Ending Balance: collectively
evaluated for impairment
|
$ | 199,514,689 | $ | 22,811,575 | $ | 198,296,430 | $ | 28,985,905 | $ | 135,649,513 | $ | 585,258,112 | ||||||||||||
Ending Balance: loans acquired
with deteriorated credit quality
|
$ | 1,498,009 | $ | - | $ | 1,684,118 | $ | - | $ | 1,354,709 | $ | 4,536,836 |
Residential
|
Construction
|
Commercial
|
||||||||||||||||||||||
June 30, 2011
|
Real Estate
|
Real Estate
|
Real Estate
|
Consumer
|
Commercial
|
Total
|
||||||||||||||||||
Allowance for loan losses:
|
||||||||||||||||||||||||
Balance, beginning of period
|
$ | 902,122 | $ | 198,027 | $ | 1,605,218 | $ | 473,064 | $ | 1,330,180 | $ | 4,508,611 | ||||||||||||
Provision charged to expense
|
871,114 | 127,312 | 1,125,231 | 15,761 | 245,381 | 2,384,799 | ||||||||||||||||||
Losses charged off
|
(157,587 | ) | (157,711 | ) | (59,955 | ) | (66,250 | ) | (67,488 | ) | (508,991 | ) | ||||||||||||
Recoveries
|
2,636 | 25,124 | 988 | 18,632 | 6,652 | 54,032 | ||||||||||||||||||
Balance, end of period
|
$ | 1,618,285 | $ | 192,752 | $ | 2,671,482 | $ | 441,207 | $ | 1,514,725 | $ | 6,438,451 |
Residential
|
Construction
|
Commercial
|
||||||||||||||||||
June 30, 2013
|
Real Estate
|
Real Estate
|
Real Estate
|
Consumer
|
Commercial
|
|||||||||||||||
Pass
|
$ | 231,230,256 | $ | 19,932,817 | $ | 237,131,788 | $ | 28,252,411 | $ | 129,782,625 | ||||||||||
Watch
|
1,881,836 | - | 1,594,368 | 41,463 | 55,858 | |||||||||||||||
Special Mention
|
- | - | - | - | - | |||||||||||||||
Substandard
|
776,350 | - | 3,577,766 | 121,004 | 1,030,001 | |||||||||||||||
Doubtful
|
- | - | - | - | - | |||||||||||||||
Total
|
$ | 233,888,442 | $ | 19,932,817 | $ | 242,303,922 | $ | 28,414,878 | $ | 130,868,484 | ||||||||||
Residential
|
Construction
|
Commercial
|
||||||||||||||||||
June 30, 2012
|
Real Estate
|
Real Estate
|
Real Estate
|
Consumer
|
Commercial
|
|||||||||||||||
Pass
|
$ | 198,847,363 | $ | 22,811,575 | $ | 194,280,920 | $ | 28,967,594 | $ | 129,572,873 | ||||||||||
Watch
|
1,561,263 | - | 149,940 | - | 5,398,255 | |||||||||||||||
Special Mention
|
- | - | - | - | - | |||||||||||||||
Substandard
|
604,072 | - | 6,526,569 | 18,311 | 2,033,094 | |||||||||||||||
Doubtful
|
- | - | - | - | - | |||||||||||||||
Total
|
$ | 201,012,698 | $ | 22,811,575 | $ | 200,957,429 | $ | 28,985,905 | $ | 137,004,222 |
30-59 Days
|
60-89 Days
|
Greater Than
|
Total
|
Total Loans
|
Total Loans
> 90 Days
|
|||||||||||||||||||||||
June 30, 2013
|
Past Due
|
Past Due
|
90 Days
|
Past Due
|
Current
|
Receivable
|
& Accruing
|
|||||||||||||||||||||
Real Estate Loans:
|
||||||||||||||||||||||||||||
Residential
|
$ | 369,898 | $ | 66,213 | $ | 102,498 | $ | 538,609 | $ | 233,349,833 | $ | 233,888,442 | $ | - | ||||||||||||||
Construction
|
- | - | - | - | 19,932,817 | 19,932,817 | - | |||||||||||||||||||||
Commercial
|
- | - | 225,099 | 225,099 | 242,078,823 | 242,303,922 | - | |||||||||||||||||||||
Consumer loans
|
239,323 | 42,924 | 12,275 | 294,522 | 28,120,356 | 28,414,878 | - | |||||||||||||||||||||
Commercial loans
|
63,394 | - | 18,266 | 81,660 | 130,786,824 | 130,868,484 | - | |||||||||||||||||||||
Total loans
|
$ | 672,615 | $ | 109,137 | $ | 358,138 | $ | 1,139,890 | $ | 654,268,653 | $ | 655,408,543 | $ | - | ||||||||||||||
30-59 Days
|
60-89 Days
|
Greater Than
|
Total
|
Total Loans
|
Total Loans
> 90 Days
|
|||||||||||||||||||||||
June 30, 2012
|
Past Due
|
Past Due
|
90 Days
|
Past Due
|
Current
|
Receivable
|
& Accruing
|
|||||||||||||||||||||
Real Estate Loans:
|
||||||||||||||||||||||||||||
Residential
|
$ | 310,046 | $ | 66,586 | $ | 59,142 | $ | 435,774 | $ | 200,576,924 | $ | 201,012,698 | $ | - | ||||||||||||||
Construction
|
- | - | - | - | 22,811,575 | 22,811,575 | - | |||||||||||||||||||||
Commercial
|
176,642 | 41,187 | 796,794 | 1,014,623 | 199,942,806 | 200,957,429 | - | |||||||||||||||||||||
Consumer loans
|
78,762 | - | - | 78,762 | 28,907,143 | 28,985,905 | - | |||||||||||||||||||||
Commercial loans
|
694,044 | - | 80,000 | 774,044 | 136,230,178 | 137,004,222 | - | |||||||||||||||||||||
Total loans
|
$ | 1,259,494 | $ | 107,773 | $ | 935,936 | $ | 2,303,203 | $ | 588,468,626 | $ | 590,771,829 | $ | - |
June 30, 2013
|
||||||||||||
Recorded
|
Unpaid Principal
|
Specific
|
||||||||||
Balance
|
Balance
|
Allowance
|
||||||||||
Loans without a specific valuation allowance:
|
||||||||||||
Residential real estate
|
$ | 1,701,720 | $ | 2,096,135 | $ | - | ||||||
Construction real estate
|
- | - | - | |||||||||
Commercial real estate
|
3,115,324 | 3,167,982 | - | |||||||||
Consumer loans
|
- | - | - | |||||||||
Commercial loans
|
387,167 | 391,759 | - | |||||||||
Loans with a specific valuation allowance:
|
||||||||||||
Residential real estate
|
$ | - | $ | - | $ | - | ||||||
Construction real estate
|
- | - | - | |||||||||
Commercial real estate
|
144,328 | 144,328 | 85,000 | |||||||||
Consumer loans
|
- | - | - | |||||||||
Commercial loans
|
755,883 | 1,325,760 | 557,489 | |||||||||
Total:
|
||||||||||||
Residential real estate
|
$ | 1,701,720 | $ | 2,096,135 | $ | - | ||||||
Construction real estate
|
$ | - | $ | - | $ | - | ||||||
Commercial real estate
|
$ | 3,259,652 | $ | 3,312,310 | $ | 85,000 | ||||||
Consumer loans
|
$ | - | $ | - | $ | - | ||||||
Commercial loans
|
$ | 1,143,050 | $ | 1,717,519 | $ | 557,489 | ||||||
June 30, 2012
|
||||||||||||
Recorded
|
Unpaid Principal
|
Specific
|
||||||||||
Balance
|
Balance
|
Allowance
|
||||||||||
Loans without a specific valuation allowance:
|
||||||||||||
Residential real estate
|
$ | 1,531,881 | $ | 2,160,350 | $ | - | ||||||
Construction real estate
|
- | - | - | |||||||||
Commercial real estate
|
2,563,744 | 2,935,620 | - | |||||||||
Consumer loans
|
- | - | - | |||||||||
Commercial loans
|
845,692 | 868,844 | - | |||||||||
Loans with a specific valuation allowance:
|
||||||||||||
Residential real estate
|
$ | - | $ | - | $ | - | ||||||
Construction real estate
|
- | - | - | |||||||||
Commercial real estate
|
982,884 | 1,014,082 | 353,159 | |||||||||
Consumer loans
|
- | - | - | |||||||||
Commercial loans
|
930,123 | 1,500,000 | 376,137 | |||||||||
Total:
|
||||||||||||
Residential real estate
|
$ | 1,531,881 | $ | 2,160,350 | $ | - | ||||||
Construction real estate
|
$ | - | $ | - | $ | - | ||||||
Commercial real estate
|
$ | 3,546,628 | $ | 3,949,702 | $ | 353,159 | ||||||
Consumer loans
|
$ | - | $ | - | $ | - | ||||||
Commercial loans
|
$ | 1,775,815 | $ | 2,368,844 | $ | 376,137 |
Fiscal 2013
|
||||||||
(in thousands)
|
||||||||
Average
|
||||||||
Investment in
|
Interest Income
|
|||||||
Impaired Loans
|
Recognized
|
|||||||
Residential Real Estate
|
$ | 1,629 | $ | 375 | ||||
Construction Real Estate
|
- | - | ||||||
Commercial Real Estate
|
2,069 | 254 | ||||||
Consumer Loans
|
- | - | ||||||
Commercial Loans
|
1,273 | 91 | ||||||
Total Loans
|
$ | 4,971 | $ | 720 | ||||
Fiscal 2012
|
||||||||
(in thousands)
|
||||||||
Average
|
||||||||
Investment in
|
Interest Income
|
|||||||
Impaired Loans
|
Recognized
|
|||||||
Residential Real Estate
|
$ | 1,667 | $ | 311 | ||||
Construction Real Estate
|
- | - | ||||||
Commercial Real Estate
|
2,949 | 638 | ||||||
Consumer Loans
|
- | - | ||||||
Commercial Loans
|
2,155 | 1,265 | ||||||
Total Loans
|
$ | 6,771 | $ | 2,214 | ||||
Fiscal 2011
|
||||||||
(in thousands)
|
||||||||
Average
|
||||||||
Investment in
|
Interest Income
|
|||||||
Impaired Loans
|
Recognized
|
|||||||
Residential Real Estate
|
$ | 981 | $ | 105 | ||||
Construction Real Estate
|
- | - | ||||||
Commercial Real Estate
|
2,758 | 220 | ||||||
Consumer Loans
|
- | - | ||||||
Commercial Loans
|
2,283 | 212 | ||||||
Total Loans
|
$ | 6,022 | $ | 537 |
June 30, 2013
|
June 30, 2012
|
|||||||
Residential real estate
|
$ | 413,924 | $ | 395,374 | ||||
Construction real estate
|
- | - | ||||||
Commercial real estate
|
156,856 | 976,881 | ||||||
Consumer loans
|
24,699 | 15,971 | ||||||
Commercial loans
|
841,924 | 1,010,123 | ||||||
Total loans
|
$ | 1,437,403 | $ | 2,398,349 |
June 30, 2013
|
||||||||
Number of
|
Recorded
|
|||||||
modifications
|
Investment
|
|||||||
Residential real estate
|
6 | $ | 1,663,477 | |||||
Construction real estate
|
- | - | ||||||
Commercial real estate
|
11 | 2,856,884 | ||||||
Consumer loans
|
- | - | ||||||
Commercial loans
|
3 | 363,020 | ||||||
Total
|
20 | $ | 4,883,381 |
June 30, 2012
|
||||||||
Number of
|
Recorded
|
|||||||
modifications
|
Investment
|
|||||||
Residential real estate
|
2 | $ | 39,835 | |||||
Construction real estate
|
- | - | ||||||
Commercial real estate
|
10 | 2,290,986 | ||||||
Consumer loans
|
- | - | ||||||
Commercial loans
|
6 | 807,386 | ||||||
Total
|
18 | $ | 3,138,207 |
June 30,
|
||||||||
2013
|
2012
|
|||||||
Beginning Balance
|
$ | 11,124,399 | $ | 10,229,780 | ||||
Additions
|
536,152 | 1,483,001 | ||||||
Repayments
|
(1,342,076 | ) | (588,382 | ) | ||||
Ending Balance
|
$ | 10,318,475 | $ | 11,124,399 |
June 30,
|
||||||||
2013
|
2012
|
|||||||
Real Estate Loans:
|
||||||||
Residential
|
$ | 2,096,135 | $ | 2,126,478 | ||||
Construction
|
- | - | ||||||
Commercial
|
1,323,361 | 2,087,192 | ||||||
Consumer loans
|
- | - | ||||||
Commercial loans
|
1,707,442 | 1,947,738 | ||||||
Outstanding balance
|
$ | 5,126,938 | $ | 6,161,408 | ||||
Carrying amount, net of fair value adjustment of
$1,021,542 and $1,624,572 at 2013 and 2012, respectively
|
$ | 4,105,396 | $ | 4,536,836 |
June 30,
|
||||||||
2013
|
2012
|
|||||||
Balance at beginning of period
|
$ | 489,356 | $ | 792,942 | ||||
Additions
|
- | - | ||||||
Accretion
|
(285,920 | ) | (1,515,270 | ) | ||||
Reclassification from nonaccretable difference
|
595,353 | 1,211,684 | ||||||
Disposals
|
- | - | ||||||
Balance at end of period
|
$ | 798,789 | $ | 489,356 |
June 30,
|
||||||||
2013
|
2012
|
|||||||
Land
|
$ | 3,850,598 | $ | 3,255,867 | ||||
Buildings and improvements
|
15,318,307 | 9,523,450 | ||||||
Furniture, fixtures, and equipment
|
7,540,339 | 7,280,566 | ||||||
Automobiles
|
70,590 | 70,590 | ||||||
26,779,834 | 20,130,473 | |||||||
Less: accumulated depreciation
|
9,264,000 | 8,783,410 | ||||||
$ | 17,515,834 | $ | 11,347,063 |
June 30,
|
||||||||||
2013
|
2012
|
|||||||||
Non-interest bearing accounts
|
$ | 45,441,845 | $ | 54,812,645 | ||||||
NOW accounts
|
208,047,966 | 193,870,344 | ||||||||
Money market deposit accounts
|
22,274,947 | 18,099,265 | ||||||||
Savings accounts
|
84,372,522 | 86,717,214 | ||||||||
TOTAL NON-MATURITY DEPOSITS
|
360,137,280 | 353,499,468 | ||||||||
Certificates
|
||||||||||
0.00-.99% | 129,001,095 | 59,459,416 | ||||||||
1.00-1.99% | 98,756,575 | 106,609,956 | ||||||||
2.00-2.99% | 24,345,200 | 37,863,634 | ||||||||
3.00-3.99% | 19,431,132 | 24,185,741 | ||||||||
4.00-4.99% | 707,652 | 2,499,301 | ||||||||
5.00-5.99% | - | 696,106 | ||||||||
TOTAL CERTIFICATES
|
272,241,653 | 231,314,155 | ||||||||
TOTAL DEPOSITS
|
$ | 632,378,933 | $ | 584,813,623 |
June 30, 2013
|
||||
July 1, 2013 to June 30, 2014
|
$ | 160,998,469 | ||
July 1, 2014 to June 30, 2015
|
55,178,265 | |||
July 1, 2015 to June 30, 2016
|
26,970,008 | |||
July 1, 2016 to June 30, 2017
|
12,223,141 | |||
July 1, 2017 to June 30, 2018
|
16,871,770 | |||
Thereafter
|
- | |||
TOTAL
|
$ | 272,241,653 |
June 30,
|
||||||||
2013
|
2012
|
|||||||
Year-end balance
|
$ | 27,788,192 | $ | 25,642,407 | ||||
Average balance during the year
|
27,359,043 | 26,955,690 | ||||||
Maximum month-end balance during the year
|
30,945,264 | 29,949,413 | ||||||
Average interest during the year
|
0.74 | % | 0.87 | % | ||||
Year-end interest rate
|
0.58 | % | 0.77 | % |
Call Date or Quarterly
|
Interest
|
June 30,
|
|||||||||||
Maturity
|
Thereafter
|
Rate
|
2013
|
2012
|
|||||||||
11/29/16
|
8/29/2013
|
3.88 | % | $ | 5,000,000 | $ | 5,000,000 | ||||||
11/29/16
|
8/29/2013
|
4.36 | % | 5,000,000 | 5,000,000 | ||||||||
11/20/17
|
8/20/2013
|
3.82 | % | 3,000,000 | 3,000,000 | ||||||||
11/29/17
|
8/29/2013
|
4.01 | % | 2,500,000 | 2,500,000 | ||||||||
08/14/18
|
8/14/2013
|
3.48 | % | 4,000,000 | 4,000,000 | ||||||||
08/14/18
|
8/14/2013
|
3.98 | % | 5,000,000 | 5,000,000 | ||||||||
TOTAL
|
$ | 24,500,000 | $ | 24,500,000 | |||||||||
Weighted-average rate
|
3.94 | % | 3.94 | % |
FHLB Advance Maturities
|
June 30, 2013
|
|||
July 1, 2013 to June 30, 2014
|
$ | - | ||
July 1, 2014 to June 30, 2015
|
- | |||
July 1, 2015 to June 30, 2016
|
- | |||
July 1, 2016 to June 30, 2017
|
10,000,000 | |||
July 1, 2017 to June 30, 2018
|
5,500,000 | |||
July 1, 2018 to thereafter
|
9,000,000 | |||
TOTAL
|
$ | 24,500,000 |
2013
|
2012
|
2011
|
||||||||||||||||||||||
Weighted
|
Weighted
|
Weighted
|
||||||||||||||||||||||
Average
|
Average
|
Average
|
||||||||||||||||||||||
Price
|
Number
|
Price
|
Number
|
Price
|
Number
|
|||||||||||||||||||
Outstanding at beginning of year
|
$ | 14.87 | 91,000 | $ | 14.44 | 87,500 | $ | 13.77 | 105,500 | |||||||||||||||
Granted
|
- | - | 22.35 | 5,000 | - | - | ||||||||||||||||||
Exercised
|
15.23 | (6,600 | ) | 15.23 | (1,500 | ) | 7.52 | (11,000 | ) | |||||||||||||||
Forfeited
|
- | - | - | - | 15.23 | (7,000 | ) | |||||||||||||||||
Outstanding at year-end
|
$ | 14.84 | 84,400 | $ | 14.87 | 91,000 | $ | 14.44 | 87,500 | |||||||||||||||
Options exercisable at year-end
|
$ | 14.69 | 71,400 | $ | 14.77 | 72,000 | $ | 14.94 | 68,500 |
2013
|
2012
|
2011
|
||||||||||
Assumptions:
|
||||||||||||
Expected dividend yield
|
- | 2.15 | % | - | ||||||||
Expected volatility
|
- | 20.75 | % | - | ||||||||
Risk-free interest rate
|
- | 2.18 | % | - | ||||||||
Weighted-average expected life (years)
|
- | 10.00 | - | |||||||||
Weighted average fair value of
|
- | $ | 4.66 | - |
Options Outstanding
|
Options Exercisable
|
|||||||||||||||
Weighted
|
||||||||||||||||
Average
|
Weighted
|
|||||||||||||||
Remaining
|
Average
|
Weighted
|
||||||||||||||
Contractual
|
Number
|
Exercise
|
Number
|
Average
|
||||||||||||
Life
|
Outstanding
|
Price
|
Exercisable
|
Exercise Price
|
||||||||||||
10.6 mo.
|
34,400 | $ | 15.23 | 34,400 | $ | 15.23 | ||||||||||
15.6 mo.
|
15,000 | 15.30 | 15,000 | 15.30 | ||||||||||||
26.4 mo.
|
5,000 | 14.26 | 5,000 | 14.26 | ||||||||||||
64.6 mo.
|
5,000 | 12.15 | 4,000 | 12.15 | ||||||||||||
78.6 mo.
|
20,000 | 12.75 | 12,000 | 12.75 | ||||||||||||
100.7 mo.
|
5,000 | 22.35 | 1,000 | 22.35 |
June 30, 2013
|
June 30, 2012
|
|||||||
Deferred tax assets:
|
||||||||
Provision for losses on loans
|
$ | 3,545,918 | $ | 3,247,995 | ||||
Accrued compensation and benefits
|
211,117 | 171,113 | ||||||
Other-than-temporary impairment on
available for sale securities
|
261,405 | 261,405 | ||||||
NOL carry forwards acquired
|
150,207 | 159,613 | ||||||
Unrealized loss on other real estate
|
31,280 | 47,600 | ||||||
Unrealized loss on available for sale securities
|
116,157 | - | ||||||
Total deferred tax assets
|
4,316,147 | 3,887,726 | ||||||
Deferred tax liabilities:
|
||||||||
FHLB stock dividends
|
188,612 | 188,612 | ||||||
Purchase accounting adjustments
|
1,228,067 | 893,549 | ||||||
Depreciation
|
761,389 | 552,633 | ||||||
Prepaid expenses
|
151,939 | 123,704 | ||||||
Unrealized gain on available for sale securities
|
- | 400,554 | ||||||
Other
|
40,224 | 69,083 | ||||||
Total deferred tax liabilities
|
2,370,231 | 2,228,135 | ||||||
Net deferred tax asset
|
$ | 1,945,916 | $ | 1,659,591 |
Year ended June 30,
|
||||||||||||
2013
|
2012
|
2011
|
||||||||||
Tax at statutory rate
|
$ | 4,767,373 | $ | 4,996,427 | $ | 5,923,356 | ||||||
Increase (reduction) in taxes
resulting from:
|
||||||||||||
Nontaxable municipal income
|
(505,941 | ) | (469,200 | ) | (384,457 | ) | ||||||
State tax, net of Federal benefit
|
335,940 | 368,775 | 460,690 | |||||||||
Cash surrender value of
Bank-owned life insurance
|
(173,245 | ) | (116,631 | ) | (94,364 | ) | ||||||
Tax credit benefits
|
(341,755 | ) | (236,451 | ) | (119,901 | ) | ||||||
Other, net
|
(127,901 | ) | 54,189 | 166,279 | ||||||||
ACTUAL PROVISION
|
$ | 3,954,471 | $ | 4,597,109 | $ | 5,951,603 |
June 30,
|
||||||||
2013
|
2012
|
|||||||
Net unrealized gain (loss) on securities available-for-sale
|
$ | (244,002 | ) | $ | 1,175,552 | |||
Net unrealized gain (loss) on securities available-for-sale
|
||||||||
securities for which a portion of an other-than-temporary
|
||||||||
impairment has been recognized in income
|
(76,964 | ) | (92,921 | ) | ||||
Unrealized gain from defined benefit pension plan
|
23,250 | 17,824 | ||||||
(297,716 | ) | 1,100,455 | ||||||
Tax effect
|
118,776 | (400,554 | ) | |||||
Net of tax amount
|
$ | (178,940 | ) | $ | 699,901 |
Actual
|
For Capital Adequacy Purposes
|
To Be Well Capitalized Under Prompt Corrective Action Provisions
|
||||||||||||||||||||||
As of June 30, 2013
|
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
||||||||||||||||||
Total Capital (to Risk-Weighted Assets)
|
||||||||||||||||||||||||
Consolidated
|
$ | 115,972 | 18.70 | % | $ | 49,608 | 8.00 | % | n/a | n/a | ||||||||||||||
Southern Bank
|
$ | 92,618 | 15.10 | % | $ | 49,059 | 8.00 | % | $ | 61,324 | 10.00 | % | ||||||||||||
Tier I Capital (to Risk-Weighted Assets)
|
||||||||||||||||||||||||
Consolidated
|
108,208 | 17.45 | % | 24,804 | 4.00 | % | n/a | n/a | ||||||||||||||||
Southern Bank
|
84,938 | 13.85 | % | 24,529 | 4.00 | % | 36,794 | 6.00 | % | |||||||||||||||
Tier I Capital (to Average Assets)
|
||||||||||||||||||||||||
Consolidated
|
108,208 | 13.73 | % | 31,524 | 4.00 | % | n/a | n/a | ||||||||||||||||
Southern Bank
|
84,938 | 10.87 | % | 31,250 | 4.00 | % | 39,063 | 5.00 | % | |||||||||||||||
Actual
|
For Capital Adequacy Purposes
|
To Be Well Capitalized Under Prompt Corrective Action Provisions
|
||||||||||||||||||||||
As of June 30, 2012
|
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
||||||||||||||||||
Total Capital (to Risk-Weighted Assets)
|
||||||||||||||||||||||||
Consolidated
|
$ | 106,796 | 19.08 | % | $ | 44,772 | 8.00 | % | n/a | n/a | ||||||||||||||
Southern Bank
|
$ | 83,992 | 15.21 | % | $ | 44,170 | 8.00 | % | $ | 55,213 | 10.00 | % | ||||||||||||
Tier I Capital (to Risk-Weighted Assets)
|
||||||||||||||||||||||||
Consolidated
|
99,788 | 17.83 | % | 22,386 | 4.00 | % | n/a | n/a | ||||||||||||||||
Southern Bank
|
77,077 | 13.96 | % | 22,085 | 4.00 | % | 33,128 | 6.00 | % | |||||||||||||||
Tier I Capital (to Average Assets)
|
||||||||||||||||||||||||
Consolidated
|
99,788 | 13.47 | % | 29,635 | 4.00 | % | n/a | n/a | ||||||||||||||||
Southern Bank
|
77,077 | 10.52 | % | 29,296 | 4.00 | % | 36,620 | 5.00 | % |
Year Ended June 30,
|
||||||||||||
2013
|
2012
|
2011
|
||||||||||
Net income
|
$ | 10,067,215 | $ | 10,098,263 | $ | 11,470,031 | ||||||
Less: Charge for early redemption of preferred
stock issued at discount
|
- | 94,365 | - | |||||||||
Less: Effective dividend on preferred shares
|
345,115 | 424,184 | 511,814 | |||||||||
Net income available to common stockholders
|
$ | 9,722,100 | $ | 9,579,714 | $ | 10,958,217 | ||||||
Denominator for basic earnings per share -
|
||||||||||||
Weighted-average shares outstanding
|
3,291,440 | 2,796,279 | 2,088,833 | |||||||||
Effect of dilutive securities
|
84,113 | 92,634 | 52,258 | |||||||||
Denominator for diluted earnings per share
|
3,375,553 | 2,888,913 | 2,141,091 | |||||||||
Basic earnings per share available to common stockholders
|
$ | 2.95 | $ | 3.43 | $ | 5.25 | ||||||
Diluted earnings per share available to common stockholders
|
$ | 2.88 | $ | 3.32 | $ | 5.12 |
Fair Value of Consideration Transferred
|
||||||||||||
Equity position of target at closing
|
$ | (2,453,832 | ) | |||||||||
Asset discount bid
|
(17,500,000 | ) | ||||||||||
Deposit premium bid
|
224,028 | |||||||||||
Total cash (to) from buyer
|
$ | (19,729,804 | ) | |||||||||
Recognized amounts of identifiable assets
|
Acquired from
|
Fair Value
|
||||||||||
acquired and liabilities assumed
|
the FDIC
|
Adjustments
|
As Recorded
|
|||||||||
Cash and cash equivalents
|
$ | 18,519,482 | $ | - | $ | 18,519,482 | ||||||
Loans
|
124,409,033 | (9,801,830 | ) | 114,607,203 | ||||||||
Premises and equipment
|
1,159 | - | 1,159 | |||||||||
Identifiable intangible assets
|
- | 624,952 | 624,952 | |||||||||
Other
|
1,680,991 | - | 1,680,991 | |||||||||
Deposits
|
(130,314,617 | ) | (524,043 | ) | (130,838,660 | ) | ||||||
Long-term debt
|
(16,658,022 | ) | (548,781 | ) | (17,206,803 | ) | ||||||
Other
|
(91,858 | ) | (29,520 | ) | (121,378 | ) | ||||||
Total identifiable net assets
|
$ | (2,453,832 | ) | $ | (10,279,222 | ) | $ | (12,733,054 | ) | |||
Bargain purchase gain
|
$ | (6,996,750 | ) |
(dollars in thousands, except EPS)
|
||||
Pro forma
Fiscal Year ended
June 30, 2011
|
||||
Interest income
|
$ | 38,796 | ||
Interest expense
|
12,597 | |||
Net interest income
|
26,199 | |||
Provision for loan losses
|
2,632 | |||
Net interest income after provision for loan losses
|
23,567 | |||
Noninterest income
|
10,681 | |||
Noninterest expense
|
17,068 | |||
Income before taxes
|
17,180 | |||
Income taxes
|
5,862 | |||
Net income
|
11,318 | |||
Less: effective dividend on preferred shares
|
512 | |||
Net income available to common shareholders
|
$ | 10,806 | ||
Basic earnings per common share
|
$ | 5.17 | ||
Diluted earnings per common share
|
$ | 5.05 |
Fair Value Measurements at June 30, 2013, Using:
|
||||||||||||||||
Fair Value
|
Quoted Prices in Active Markets for Identical Assets
|
Significant Other Observable Inputs
|
Significant Unobservable Inputs
|
|||||||||||||
(Level 1)
|
(Level 2)
|
(Level 3)
|
||||||||||||||
U.S. government sponsored enterprises (GSEs)
|
$ | 22,407,885 | $ | - | $ | 22,407,885 | $ | - | ||||||||
State and political subdivisions
|
39,323,307 | - | 39,323,307 | - | ||||||||||||
Other securities
|
1,558,979 | - | 1,485,979 | 73,000 | ||||||||||||
Mortgage-backed GSE residential
|
16,714,055 | - | 16,714,055 | - | ||||||||||||
Fair Value Measurements at June 30, 2012, Using:
|
||||||||||||||||
Fair Value
|
Quoted Prices in Active Markets for Identical Assets
|
Significant Other Observable Inputs
|
Significant Unobservable Inputs
|
|||||||||||||
(Level 1)
|
(Level 2)
|
(Level 3)
|
||||||||||||||
U.S. government sponsored enterprises (GSEs)
|
$ | 18,099,618 | $ | - | $ | 18,099,618 | $ | - | ||||||||
State and political subdivisions
|
36,381,253 | - | 36,381,253 | - | ||||||||||||
Other securities
|
1,393,257 | - | 1,360,657 | 32,600 | ||||||||||||
Mortgage-backed GSE residential
|
19,252,717 | - | 19,252,717 | - |
2013
|
2012
|
|||||||
Available-for-sale securities, beginning of year
|
$ | 32,600 | $ | 71,004 | ||||
Total unrealized gain (loss) included in
comprehensive income
|
40,400 | (38,404 | ) | |||||
Transfer from Level 2 to Level 3
|
- | - | ||||||
Available-for-sale securities, end of period
|
$ | 73,000 | $ | 32,600 |
Fair Value Measurements at June 30, 2013, Using:
|
||||||||||||||||
Quoted Prices in
|
||||||||||||||||
Active Markets for
|
Significant Other
|
Significant
|
||||||||||||||
Identical Assets
|
Observable Inputs
|
Unobservable Inputs
|
||||||||||||||
Fair Value
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
|||||||||||||
Impaired loans (collateral dependent)
|
$ | 378,000 | $ | - | $ | - | $ | 378,000 | ||||||||
Foreclosed and repossessed assets held for sale
|
3,075,000 | - | - | 3,075,000 | ||||||||||||
Fair Value Measurements at June 30, 2012, Using:
|
||||||||||||||||
Quoted Prices in
|
||||||||||||||||
Active Markets for
|
Significant Other
|
Significant
|
||||||||||||||
Identical Assets
|
Observable Inputs
|
Unobservable Inputs
|
||||||||||||||
Fair Value
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
|||||||||||||
Impaired loans (collateral dependent)
|
$ | 1,214,000 | $ | - | $ | - | $ | 1,214,000 | ||||||||
Foreclosed and repossessed assets held for sale
|
1,435,000 | - | - | 1,435,000 |
2013
|
2012
|
|||||||
Impaired loans (collateral dependent)
|
$ | (424,000 | ) | $ | (517,000 | ) | ||
Foreclosed and repossessed assets held for sale
|
(295,000 | ) | (93,000 | ) | ||||
Total losses on assets measured on a non-recurring basis
|
$ | (719,000 | ) | $ | (610,000 | ) |
Fair value at
June 30, 2013
|
Valuation
technique
|
Unobservable
inputs
|
Range of
Discounts applied
|
Weighted-average
discount applied
|
||||||||||
Recurring Measurements
|
||||||||||||||
Available-for-sale securities
|
$ | 73,000 |
Discounted cash flow
|
Discount rate
Prepayment rate
Projected defaults
and deferrals
(% of pool balance)
Anticipated recoveries
(% of pool balance)
|
n/a
n/a
n/a
n/a
|
18.6%
1% annually
42.0%
1.7%
|
||||||||
Nonrecurring Measurements
|
||||||||||||||
Impaired loans (collateral dependent)
|
378,000 |
Internal or third-party appraisal
|
Discount to reflect
realizable value
|
18.9 - 43.8 | % | 22.9 | % | |||||||
Foreclosed and repossessed assets
|
3,075,000 |
Third party appraisal
|
Marketability discount
|
0.0 - 66.7 | % | 14.6 | % |
Fair value at
June 30, 2012
|
Valuation
technique
|
Unobservable
inputs
|
Range of
Discounts applied
|
Weighted-average
discount applied
|
||||||||||
Recurring Measurements
|
||||||||||||||
Available-for-sale securities
|
$ | 32,600 |
Discounted cash flow
|
Discount rate
Prepayment rate
Projected defaults
and deferrals
(% of pool balance)
Anticipated recoveries
(% of pool balance)
|
n/a
n/a
n/a
n/a
|
25.5%
5% every five years
37.1%
7.6%
|
||||||||
Nonrecurring Measurements
|
||||||||||||||
Impaired loans (collateral dependent)
|
1,214,000 |
Internal or third-party appraisal
|
Discount to reflect
realizable value
|
7.0 - 100 | % | 32.9 | % | |||||||
Foreclosed and repossessed assets
|
1,435,000 |
Third party appraisal
|
Marketability discount
|
8.3 - 43.9 | % | 21.4 | % |
June 30, 2013
|
||||||||||||||||
Quoted Prices
|
||||||||||||||||
in Active
|
Significant
|
|||||||||||||||
Markets for
|
Significant Other
|
Unobservable
|
||||||||||||||
Carrying
|
Identical Assets
|
Observable Inputs
|
Inputs
|
|||||||||||||
Amount
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
|||||||||||||
Financial assets
|
||||||||||||||||
Cash and cash equivalents
|
$ | 12,789 | $ | 12,789 | $ | - | $ | - | ||||||||
Interest-bearing time deposits
|
980 | - | 980 | - | ||||||||||||
Stock in FHLB
|
2,007 | - | 2,007 | - | ||||||||||||
Stock in Federal Reserve Bank of St. Louis
|
1,004 | - | 1,004 | - | ||||||||||||
Loans receivable, net
|
647,166 | - | - | 652,904 | ||||||||||||
Accrued interest receivable
|
3,970 | - | 3,970 | - | ||||||||||||
Financial liabilities
|
||||||||||||||||
Deposits
|
632,379 | 359,796 | - | 273,260 | ||||||||||||
Securities sold under agreements to repurchase
|
27,788 | - | 27,788 | - | ||||||||||||
Advances from FHLB
|
24,500 | - | 27,040 | - | ||||||||||||
Accrued interest payable
|
529 | - | 529 | - | ||||||||||||
Subordinated debt
|
7,217 | - | - | 6,209 | ||||||||||||
Unrecognized financial instruments (net of contract amount)
|
||||||||||||||||
Commitments to originate loans
|
- | - | - | - | ||||||||||||
Letters of credit
|
- | - | - | - | ||||||||||||
Lines of credit
|
- | - | - | - |
June 30, 2012
|
||||||||||||||||
Quoted Prices
|
||||||||||||||||
in Active
|
Significant
|
|||||||||||||||
Markets for
|
Significant Other
|
Unobservable
|
||||||||||||||
Carrying
|
Identical Assets
|
Observable Inputs
|
Inputs
|
|||||||||||||
Amount
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
|||||||||||||
Financial assets
|
||||||||||||||||
Cash and cash equivalents
|
$ | 33,421 | $ | 33,421 | $ | - | $ | - | ||||||||
Interest-bearing time deposits
|
1,273 | - | 1,273 | - | ||||||||||||
Stock in FHLB
|
2,018 | - | 2,018 | - | ||||||||||||
Stock in Federal Reserve Bank of St. Louis
|
1,001 | - | 1,001 | - | ||||||||||||
Loans receivable, net
|
583,465 | - | - | 587,955 | ||||||||||||
Accrued interest receivable
|
3,694 | - | 3,694 | - | ||||||||||||
Financial liabilities
|
||||||||||||||||
Deposits
|
584,814 | 353,212 | - | 232,583 | ||||||||||||
Securities sold under agreements to repurchase
|
25,642 | - | 25,642 | - | ||||||||||||
Advances from FHLB
|
24,500 | - | 27,923 | - | ||||||||||||
Accrued interest payable
|
626 | - | 626 | - | ||||||||||||
Subordinated debt
|
7,217 | - | - | 5,103 | ||||||||||||
Unrecognized financial instruments (net of contract amount)
|
||||||||||||||||
Commitments to originate loans
|
- | - | - | - | ||||||||||||
Letters of credit
|
- | - | - | - | ||||||||||||
Lines of credit
|
- | - | - | - |
June 30,
|
||||||||
Condensed Balance Sheets
|
2013
|
2012
|
||||||
Assets
|
||||||||
Cash and cash equivalents
|
$ | 16,576,832 | $ | 15,342,647 | ||||
Other assets
|
6,771,627 | 6,994,591 | ||||||
Investment in common stock of Bank
|
85,798,652 | 79,233,550 | ||||||
TOTAL ASSETS
|
$ | 109,147,111 | $ | 101,570,788 | ||||
Liabilities and Stockholder's Equity
|
||||||||
Accrued expenses and other liabilities
|
$ | 100,758 | $ | (374,284 | ) | |||
Subordinated debt
|
7,217,000 | 7,217,000 | ||||||
TOTAL LIABILITIES
|
7,317,758 | 6,842,716 | ||||||
Stockholder's equity
|
101,829,353 | 94,728,072 | ||||||
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY
|
$ | 109,147,111 | $ | 101,570,788 |
Year ended June 30,
|
||||||||||||
Condensed Statements of Income and Comprehensive Income
|
2013
|
2012
|
2011
|
|||||||||
Interest income
|
$ | 311,013 | $ | 110,741 | $ | 17,438 | ||||||
Interest expense
|
227,127 | 232,154 | 226,776 | |||||||||
Net interest income (expense)
|
83,886 | (121,413 | ) | (209,338 | ) | |||||||
Dividends from Bank
|
3,000,000 | 2,700,000 | 2,000,000 | |||||||||
Operating expenses
|
368,747 | 410,759 | 325,857 | |||||||||
Income before income taxes and equity
|
||||||||||||
in undistributed income of the Bank
|
2,715,139 | 2,167,828 | 1,464,805 | |||||||||
Income tax benefit
|
107,000 | 199,000 | 170,100 | |||||||||
Income before equity in undistributed
|
||||||||||||
income of the Bank
|
2,822,139 | 2,366,828 | 1,634,905 | |||||||||
Equity in undistributed income of the Bank
|
7,245,076 | 7,731,435 | 9,835,126 | |||||||||
NET INCOME
|
$ | 10,067,215 | $ | 10,098,263 | $ | 11,470,031 | ||||||
COMPREHENSIVE INCOME
|
$ | 9,188,374 | $ | 10,262,544 | $ | 11,417,687 |
Year ended June 30,
|
||||||||||||
Condensed Statements of Cash Flow
|
2013
|
2012
|
2011
|
|||||||||
Cash Flows from operating activities:
|
||||||||||||
Net income
|
$ | 10,067,215 | $ | 10,098,263 | $ | 11,470,031 | ||||||
Changes in:
|
||||||||||||
Equity in undistributed income of the Bank
|
(7,245,076 | ) | (7,731,435 | ) | (9,835,126 | ) | ||||||
Other adjustments, net
|
482,570 | (476,769 | ) | 335,400 | ||||||||
NET CASH PROVIDED BY OPERATING ACTIVITES
|
3,304,709 | 1,890,059 | 1,970,305 | |||||||||
Cash flows from investing activities:
|
||||||||||||
Proceeds from (investment in) loan participations
|
215,536 | (6,721,160 | ) | 284,011 | ||||||||
Investment in Bank subsidiary
|
(100 | ) | - | (4,500,000 | ) | |||||||
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES
|
215,436 | (6,721,160 | ) | (4,215,989 | ) | |||||||
Cash flows from financing activities:
|
||||||||||||
Proceeds from issuance of preferred stock
|
- | 19,973,208 | - | |||||||||
Proceeds from issuance of common stock
|
- | 19,914,349 | - | |||||||||
Dividends on preferred stock
|
(411,553 | ) | (368,760 | ) | (477,500 | ) | ||||||
Dividends on common stock
|
(1,974,924 | ) | (1,283,928 | ) | (1,004,749 | ) | ||||||
Exercise of stock options
|
100,518 | 22,845 | 82,730 | |||||||||
Redemption of preferred stock
|
- | (9,550,000 | ) | - | ||||||||
Investments in bank subsidiary
|
- | (9,350,000 | ) | - | ||||||||
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES
|
(2,285,959 | ) | 19,357,714 | (1,399,519 | ) | |||||||
Net increase (decrease) in cash and cash equivalents
|
1,234,186 | 14,526,613 | (3,645,203 | ) | ||||||||
Cash and cash equivalents at beginning of year
|
15,342,646 | 816,033 | 4,461,236 | |||||||||
CASH AND CASH EQUIVALENTS AT END OF YEAR
|
$ | 16,576,832 | $ | 15,342,646 | $ | 816,033 |
June 30, 2013
|
||||||||||||||||
First
Quarter
|
Second
Quarter
|
Third
Quarter
|
Fourth
Quarter
|
|||||||||||||
Interest income
|
$ | 9,362 | $ | 9,198 | $ | 8,756 | $ | 8,975 | ||||||||
Interest expense
|
1,942 | 1,867 | 1,864 | 1,827 | ||||||||||||
Net interest income
|
7,420 | 7,331 | 6,892 | 7,148 | ||||||||||||
Provision for loan losses
|
611 | 462 | 228 | 415 | ||||||||||||
Noninterest income
|
1,060 | 1,118 | 1,144 | 1,147 | ||||||||||||
Noninterest expense
|
4,138 | 4,441 | 4,441 | 4,502 | ||||||||||||
Income before income taxes
|
3,731 | 3,546 | 3,367 | 3,378 | ||||||||||||
Income tax expense
|
1,141 | 1,065 | 901 | 848 | ||||||||||||
NET INCOME
|
$ | 2,590 | $ | 2,481 | $ | 2,466 | $ | 2,530 | ||||||||
June 30, 2012
|
||||||||||||||||
First
Quarter
|
Second
Quarter
|
Third
Quarter
|
Fourth
Quarter
|
|||||||||||||
Interest income
|
$ | 10,214 | $ | 9,943 | $ | 9,755 | $ | 9,053 | ||||||||
Interest expense
|
2,736 | 2,622 | 2,446 | 2,139 | ||||||||||||
Net interest income
|
7,478 | 7,321 | 7,309 | 6,914 | ||||||||||||
Provision for loan losses
|
517 | 345 | 215 | 707 | ||||||||||||
Noninterest income
|
1,116 | 899 | 954 | 1,093 | ||||||||||||
Noninterest expense
|
3,783 | 3,884 | 4,866 | 4,072 | ||||||||||||
Income before income taxes
|
4,294 | 3,991 | 3,182 | 3,228 | ||||||||||||
Income tax expense
|
1,444 | 1,317 | 1,006 | 830 | ||||||||||||
NET INCOME
|
$ | 2,850 | $ | 2,674 | $ | 2,176 | $ | 2,398 | ||||||||
June 30, 2011
|
||||||||||||||||
First
Quarter
|
Second
Quarter
|
Third
Quarter
|
Fourth
Quarter
|
|||||||||||||
Interest income
|
$ | 7,295 | $ | 7,539 | $ | 10,296 | $ | 9,917 | ||||||||
Interest expense
|
2,780 | 2,776 | 2,903 | 2,825 | ||||||||||||
Net interest income
|
4,515 | 4,763 | 7,393 | 7,092 | ||||||||||||
Provision for loan losses
|
643 | 274 | 1,196 | 273 | ||||||||||||
Noninterest income
|
820 | 7,867 | 850 | 966 | ||||||||||||
Noninterest expense
|
2,861 | 3,695 | 4,068 | 3,834 | ||||||||||||
Income before income taxes
|
1,831 | 8,661 | 2,979 | 3,951 | ||||||||||||
Income tax expense
|
528 | 3,085 | 1,001 | 1,338 | ||||||||||||
NET INCOME
|
$ | 1,303 | $ | 5,576 | $ | 1,978 | $ | 2,613 |
Date: September 24, 2013
|
By:
|
/s/ Greg A. Steffens
Greg A. Steffens
President and Chief Executive Officer
(Principal Executive Officer)
|
/s/ Matthew T. Funke
Matthew T. Funke
Chief Financial Officer
(Principal Financial and Accounting Officer)
|
Plan Category
|
Number of securities to
be issued upon exercise
of outstanding options
warrants and rights
|
Weighted-average
exercise price of
outstanding options
warrants and rights
|
Number of Securities
remaining available for
future issuance under
equity compensation plans
|
|||||||||
|
||||||||||||
Equity Compensation Plans Approved By Security Holders
|
84,400 | $ | 14.84 | 47,281 | (1) | |||||||
Equity Compensation Plans Not Approved By Security Holders
|
--- | $ | --- | --- | ||||||||
84,400 | $ | 14.84 |
Report of Independent Registered Public Accounting Firm
|
Consolidated Balance Sheets at June 30, 2013 and 2012
|
Consolidated Statements of Income for the Years Ended June 30, 2013, 2012 and 2011
|
Consolidated Statements of Stockholders’ Equity for the Years Ended June 30, 2013, 2012 and 2011
|
Consolidated Statements of Comprehensive Income for the Years Ended June 30, 2013, 2012 and 2011
|
Consolidated Statements of Cash Flows for the Years Ended June 30, 2013, 2012 and 2011
|
Notes to the Consolidated Financial Statements, June 30, 2013, 2012 and 2011
|
Regulation S-K Exhibit Number
|
Document
|
||
3.1(i)
|
Articles of Incorporation of the Registrant (filed as an exhibit to the Registrant’s Annual Report on Form 10-KSB for the fiscal year ended June 30, 1999 and incorporated herein by reference)
|
||
3.1(ii)
|
Certificate of Designation for the Registrant’s Senior Non-Cumulative Perpetual Preferred Stock, Series A (filed as an exhibit to the Registrant’s Current Report on Form 8-K filed on July 26, 2011 and incorporated herein by reference)
|
||
3.2
|
Bylaws of the Registrant (filed as an exhibit to the Registrant’s Current Report on Form 8-K filed on December 6, 2007 and incorporated herein by reference)
|
||
10
|
Material Contracts:
|
||
1.
|
2008 Equity Incentive Plan (attached to the Registrant’s definitive proxy statement filed on September 19, 2008 and incorporated herein by reference)
|
||
2.
|
2003 Stock Option and Incentive Plan (attached to the Registrant’s definitive proxy statement filed on September 17, 2003 and incorporated herein by reference)
|
||
3.
|
1994 Stock Option and Incentive Plan (attached to the Registrant’s definitive proxy statement filed on October 21, 1994 and incorporated herein by reference)
|
||
4.
|
Management Recognition and Development Plan (attached to the Registrant’s definitive proxy statement filed on October 21, 1994 and incorporated herein by reference)
|
||
5.
|
Employment Agreements
|
||
(i)
|
Employment Agreement with Greg A. Steffens (files as an exhibit to the Registrant’s Annual Report on Form 10-KSB for the year ended June 30, 1999)
|
||
6.
|
Director’s Retirement Agreements
|
||
(i)
|
Director’s Retirement Agreement with Samuel H. Smith (filed as an exhibit to the Registrant’s Annual Report on Form 10-KSB for the fiscal year ended June 30, 1995 and incorporated herein by reference)
|
||
(ii)
|
Director’s Retirement Agreement with Sammy A. Schalk (filed as an exhibit to the Registrant’s Quarterly Report on Form 10-QSB for the quarter ended December 31, 2000 and incorporated herein by reference)
|
||
(iii)
|
Director’s Retirement Agreement with Ronnie D. Black (filed as an exhibit to the Registrant’s Quarterly Report on Form 10-QSB for the quarter ended December 31, 2000 and incorporated herein by reference)
|
||
(iv)
|
Director’s Retirement Agreement with L. Douglas Bagby (filed as an exhibit to the Registrant’s Quarterly Report on Form 10-QSB for the quarter ended December 31, 2000 and incorporated herein by reference)
|
||
(v)
|
Director’s Retirement Agreement with Rebecca McLane Brooks (filed as an exhibit to the Registrant’s Quarterly Report on Form 10-QSB for the quarter ended December 31, 2004 and incorporated herein by reference)
|
||
(vi)
|
Director’s Retirement Agreement with Charles R. Love (filed as an exhibit to the Registrant’s Quarterly Report on Form 10-QSB for the quarter ended December 31, 2004 and incorporated herein by reference)
|
||
(vii)
|
Director’s Retirement Agreement with Charles R. Moffitt (filed as an exhibit to the Registrant’s Quarterly Report on Form 10-QSB for the quarter ended December 31, 2004 and incorporated herein by reference)
|
||
(viii)
|
Director’s Retirement Agreement with Dennis C. Robison (filed as an exhibit to the Registrant’s Quarterly Report on Form 10-QSB for the quarter ended December 31, 2008 and incorporated herein by reference)
|
||
7.
|
Tax Sharing Agreement (filed as an exhibit to the Registrant’s Annual Report on Form 10-KSB for the year ended June 30, 1995)
|
||
11
|
Statement Regarding Computation of Per Share Earnings
|
||
14
|
Code of Conduct and Ethics (filed as an exhibit to the Registrant’s Annual Report on Form 10-K for the year ended June 30, 2011)
|
||
21
|
Subsidiaries of the Registrant
|
||
23
|
Consent of Auditors
|
||
31
|
Rule 13a-14(a)/15-d14(a) Certifications
|
||
32
|
Section 1350 Certifications
|
SOUTHERN MISSOURI BANCORP, INC.
|
||||
|
||||
Date:
|
September 24, 2013
|
By:
|
/s/ Greg A. Steffens
Greg A. Steffens
President and Chief Executive Officer
(Duly Authorized Representative)
|
By:
|
/s/ Samuel H. Smith
Samuel H. Smith
Chairman of the Board of Directors
|
September 24, 2013
|
|
By:
|
/s/ Greg A. Steffens
Greg A. Steffens
President and Chief Executive Officer
(Principal Executive Officer)
|
September 24, 2013
|
|
By:
|
/s/ L. Douglas Bagby
L. Douglas Bagby
Vice Chairman and Director
|
September 24, 2013
|
|
By:
|
/s/ Ronnie D. Black
Ronnie D. Black
Secretary and Director
|
September 24, 2013
|
|
By:
|
/s/ Sammy A. Schalk
Sammy A. Schalk
Director
|
September 24, 2013
|
|
By:
|
/s/ Rebecca McLane Brooks
Rebecca McLane Brooks
Director
|
September 24, 2013
|
|
By:
|
/s/ Charles R. Love
Charles R. Love
Director
|
September 24, 2013
|
|
By:
|
/s/ Charles R. Moffitt
Charles R. Moffitt
Director
|
September 24, 2013
|
|
By:
|
/s/ Dennis C. Robison
Dennis C. Robison
Director
|
September 24, 2013
|
|
By:
|
/s/ David J. Tooley
David J. Tooley
Director
|
September 24, 2013
|
|
By:
|
/s/ Matthew T. Funke
Matthew T. Funke
Chief Financial Officer
(Principal Financial and Accounting Officer)
|
September 24, 2013
|
Regulation S-K
Exhibit Number
|
Document
|
|
10.1
|
Named Executive Officer Salary and Bonus Agreement for fiscal 2014
|
|
10.2
|
Director Fee Arrangements
|
|
11
|
Statement Regarding Computation of Per Share Earnings
|
|
21
|
Subsidiaries of the Registrant
|
|
23
|
Consent of Auditors
|
|
31
|
Rule 13a-14(a)/15d-14(a) Certifications
|
|
32
|
Section 1350 Certifications
|
Name and Title
|
Base Salary
|
|||
Greg A. Steffens
President and Chief Executive Officer, Southern Missouri Bancorp, Inc., and Southern Bank
|
$ | 247,000 | ||
Matthew T. Funke
Chief Financial Officer, Southern Missouri Bancorp, Inc., and Southern Bank
|
$ | 144,000 | ||
Kimberly A. Capps
Chief Operations Officer, Southern Missouri Bancorp., Inc. and Southern Bank
|
$ | 134,000 | ||
William D. Hribovsek
Chief Lending Officer, Southern Missouri Bancorp., Inc. and Southern Bank
|
$ | 175,000 | ||
Lora L. Daves
Chief of Credit Administration, Southern Missouri Bancorp., Inc. and Southern Bank
|
$ | 128,000 |
Year Ended June 30,
|
||||||||||||
2013
|
2012
|
2011
|
||||||||||
Basic
Average shares outstanding
|
3,291,440 | 2,796,279 | 2,088,833 | |||||||||
Net income
|
$ | 10,067,215 | $ | 10,098,263 | $ | 11,470,031 | ||||||
Less: effective dividend on preferred shares
|
- | 94,365 | - | |||||||||
Less: effective dividend on preferred shares
|
345,115 | 424,184 | 511,814 | |||||||||
Net income available to common stockholders
|
$ | 9,722,100 | $ | 9,579,714 | $ | 10,958,217 | ||||||
Basic earnings per share available to common
stockholders
|
$ | 2.95 | $ | 3.43 | $ | 5.25 | ||||||
Diluted
Average shares outstanding
|
3,291,440 | 2,796,279 | 2,088,833 | |||||||||
Net effect of dilutive securities – based on the
treasury stock method using the period end market
price, if greater than average market price
|
84,113 | 92,634 | 52,258 | |||||||||
Total
|
3,375,553 | 2,888,913 | 2,141,091 | |||||||||
Net income
|
$ | 10,067,215 | $ | 10,098,263 | $ | 11,470,031 | ||||||
Less: effective dividend on preferred shares
|
- | 94,365 | - | |||||||||
Less: effective dividend on preferred shares
|
345,115 | 424,184 | 511,814 | |||||||||
Net income available to common stockholders
|
$ | 9,722,100 | $ | 9,579,714 | $ | 10,958,217 | ||||||
Diluted earnings per share available to common
stockholders
|
$ | 2.88 | $ | 3.32 | $ | 5.12 | ||||||
Parent
|
|||||
Southern Missouri Bancorp, Inc.
|
|||||
Subsidiaries (a)
|
Percentage of Ownership
|
Jurisdiction or State of
Incorporation
|
|||
Southern Bank
|
100% |
Missouri
|
|||
SMS Financial Services, Inc.(b)
|
100% |
Missouri
|
(a)
|
The operation of the Company's wholly owned subsidiaries are included in the Company's Financial Statements contained in Item 7 hereof.
|
1)
|
I have reviewed this annual report on Form 10-K of Southern Missouri Bancorp, Inc.;
|
|
2)
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3)
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4)
|
I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
|
5)
|
I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting
|
Date:
|
September 24, 2013
|
By:
|
/s/ Greg A. Steffens
Greg A. Steffens
President and Chief Executive Officer
(Principal Executive Officer)
|
1)
|
I have reviewed this annual report on Form 10-K of Southern Missouri Bancorp, Inc.;
|
|
2)
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3)
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4)
|
I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
|
5)
|
I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting
|
Date:
|
September 24, 2013
|
By:
|
/s/ Matthew T. Funke
Matthew T. Funke
Chief Financial Officer
(Principal Financial and Accounting Officer)
|
Date:
|
September 24, 2013
|
|
By:
|
/s/ Greg A. Steffens
Greg A. Steffens
President and Chief Executive Office
(Principal Executive and Principal Financial and Accounting Officer)
|
Date:
|
September 24, 2013
|
|
By:
|
/s/ Matthew T. Funke
Matthew T. Funke
Chief Financial Officer
(Principal Financial and Accounting Officer)
|
Note 5: Premises and Equipment: Property, Plant and Equipment (Details) (USD $)
|
Jun. 30, 2013
|
Jun. 30, 2012
|
---|---|---|
Details | ||
Land | $ 3,850,598 | $ 3,255,867 |
Buildings and Improvements, Gross | 15,318,307 | 9,523,450 |
Furniture and Fixtures, Gross | 7,540,339 | 7,280,566 |
Automobiles | 70,590 | 70,590 |
Property, Plant and Equipment, Gross | 26,779,834 | 20,130,473 |
Property, Plant, and Equipment, Owned, Accumulated Depreciation | 9,264,000 | 8,783,410 |
Premises and equipment, net | $ 17,515,834 | $ 11,347,064 |
Note 18: Fair Value Measurements: Schedule of Financial Instruments (Details) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2013
|
Jun. 30, 2012
|
---|---|---|
Financial assets | Cash and Cash Equivalents
|
||
Financial Instruments Owned Carrying Amount | $ 12,789 | $ 33,421 |
Financial assets | Interest-bearing time deposits
|
||
Financial Instruments Owned Carrying Amount | 980 | 1,273 |
Financial assets | Investment in Federal Home Loan Bank Stock
|
||
Financial Instruments Owned Carrying Amount | 2,007 | 2,018 |
Financial assets | Investment in Stock of Federal Reserve Bank of St. Louis
|
||
Financial Instruments Owned Carrying Amount | 1,004 | 1,001 |
Financial assets | Loans Receivable
|
||
Financial Instruments Owned Carrying Amount | 647,166 | 583,465 |
Financial assets | Accrued interest receivable
|
||
Financial Instruments Owned Carrying Amount | 3,970 | 3,694 |
Financial liabilities | Deposits
|
||
Financial Instruments Owned Carrying Amount | 632,379 | 584,814 |
Financial liabilities | Securities Sold under Agreements to Repurchase
|
||
Financial Instruments Owned Carrying Amount | 27,788 | 25,642 |
Financial liabilities | Federal Reserve Bank Advances
|
||
Financial Instruments Owned Carrying Amount | 24,500 | 24,500 |
Financial liabilities | Accrued interest payable
|
||
Financial Instruments Owned Carrying Amount | 529 | 626 |
Financial liabilities | Subordinated Debt
|
||
Financial Instruments Owned Carrying Amount | 7,217 | 7,217 |
Fair Value, Inputs, Level 1 | Financial assets | Cash and Cash Equivalents
|
||
Financial Instruments Owned Carrying Amount | 12,789 | 33,421 |
Fair Value, Inputs, Level 1 | Financial liabilities | Deposits
|
||
Financial Instruments Owned Carrying Amount | 359,796 | 353,212 |
Fair Value, Inputs, Level 2 | Financial assets | Interest-bearing time deposits
|
||
Financial Instruments Owned Carrying Amount | 980 | 1,273 |
Fair Value, Inputs, Level 2 | Financial assets | Investment in Federal Home Loan Bank Stock
|
||
Financial Instruments Owned Carrying Amount | 2,007 | 2,018 |
Fair Value, Inputs, Level 2 | Financial assets | Investment in Stock of Federal Reserve Bank of St. Louis
|
||
Financial Instruments Owned Carrying Amount | 1,004 | 1,001 |
Fair Value, Inputs, Level 2 | Financial assets | Accrued interest receivable
|
||
Financial Instruments Owned Carrying Amount | 3,970 | 3,694 |
Fair Value, Inputs, Level 2 | Financial liabilities | Securities Sold under Agreements to Repurchase
|
||
Financial Instruments Owned Carrying Amount | 27,788 | 25,642 |
Fair Value, Inputs, Level 2 | Financial liabilities | Federal Reserve Bank Advances
|
||
Financial Instruments Owned Carrying Amount | 27,040 | 27,923 |
Fair Value, Inputs, Level 2 | Financial liabilities | Accrued interest payable
|
||
Financial Instruments Owned Carrying Amount | 529 | 626 |
Fair Value, Inputs, Level 3 | Financial assets | Loans Receivable
|
||
Financial Instruments Owned Carrying Amount | 652,904 | 587,955 |
Fair Value, Inputs, Level 3 | Financial liabilities | Deposits
|
||
Financial Instruments Owned Carrying Amount | 273,260 | 232,583 |
Fair Value, Inputs, Level 3 | Financial liabilities | Subordinated Debt
|
||
Financial Instruments Owned Carrying Amount | $ 6,209 | $ 5,103 |
Note 16: Earnings Per Share: Schedule of Earnings Per Share, Basic and Diluted (Details) (USD $)
|
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2011
|
|
Earnings per share net income | $ 10,067,215 | $ 10,098,263 | $ 11,470,031 |
Less: charge for early redemption of preferred stock issued at a discount | 94,365 | ||
Effective dividend on preferred shares | 345,115 | 424,184 | 511,814 |
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS | $ 9,722,100 | $ 9,579,714 | $ 10,958,217 |
Denominator for diluted earnings per share | 3,375,553 | 2,888,913 | 2,141,091 |
Basic earnings per share available to common stockholders | $ 2.95 | $ 3.43 | $ 5.25 |
Diluted earnings per share available to common stockholders | $ 2.88 | $ 3.32 | $ 5.12 |
Denominator for basic earnings per share
|
|||
Weighted Average Number of Shares Outstanding, Basic | 3,291,440 | 2,796,279 | 2,088,833 |
Effect of dilutive securities stock options | 84,113 | 92,634 | 52,258 |
Note 10: Employee Benefits
|
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Note 10: Employee Benefits | NOTE 10: Employee Benefits
401(k) Retirement Plan. The Bank has a 401(k) retirement plan that covers substantially all eligible employees. During fiscal 2012, the Bank amended the plan to make safe harbor matching contributions of up to 4% of eligible compensation, depending upon the percentage of eligible pay deferred into the plan by the employee. Additional profit-sharing contributions of 5% of eligible salary have been accrued for the plan year ended June 30, 2013, based on financial performance for fiscal 2013. Total 401(k) expense for fiscal 2013, 2012, and 2011 was $446,000, $413,000, and $385,000, respectively. At June 30, 2013, 401(k) plan participants held approximately 215,000 shares of the Companys stock in the plan. Employee deferrals and safe harbor contributions are fully vested. Profit-sharing or other contributions vest over a period of five years.
Management Recognition Plan (MRP). The Bank adopted an MRP for the benefit of non-employee directors and two MRPs for officers and key employees (who may also be directors) in April 1994. During fiscal 2008, the Bank granted 2,500 MRP shares to employees, and during fiscal 2012, the Bank granted 3,036 shares to employees. The shares granted are in the form of restricted stock vested at the rate of 20% of such shares per year. During fiscal 2013 and 2012, 607 and 500 MRP shares vested, respectively. Compensation expense, in the amount of the fair market value of the common stock at the date of grant, is recognized pro-rata over the five years during which the shares vest.
The Board of Directors can terminate the MRP plan at any time, and if it does so, any shares not allocated will revert to the Company. The MRP expense for fiscal 2013, 2012, and 2011, was $13,000, $11,000, and $13,000, respectively. At June 30, 2013, unvested compensation expense related to the MRP was approximately $52,000.
Equity Incentive Plan. The Company adopted an Equity Incentive Plan (EIP) in 2008, reserving for award 66,000 shares. EIP shares are available for award to directors, officers, and employees of the Company and its affiliates by a committee of outside directors. The committee has the power to set vesting requirements for each award under the EIP. During fiscal 2012, the Company awarded 36,964 shares, in the form of restricted stock, which will vest at the rate of 20% of such shares per year. During fiscal 2013, 7,393 EIP shares vested. Compensation expense, in the amount of the fair market value of the common stock at the date of grant, is recognized pro-rata over the five years during which the shares vest.
The Board of Directors can terminate EIP awards at any time, and if it does so, any shares not allocated will revert to the Company. The EIP expense for fiscal 2013 was $159,000, with no expense recognized in fiscal 2012 or 2011. At June 30, 2013, unvested compensation expense related to the EIP was approximately $636,000.
Stock Option Plans. The Company adopted a stock option plan in October 2003. Under the plan, the Company has granted 116,000 options to employees and directors, of which, 9,100 have been exercised, 22,500 have been forfeited, and 84,400 remain outstanding. Under the 2003 Plan, exercised options may be issued from either authorized but unissued shares, or treasury shares.
As of June 30, 2013, there was $31,000 in remaining unrecognized compensation expense related to nonvested stock options, which will be recognized over the remaining weighted average vesting period. The aggregate intrinsic value of stock options outstanding at June 30, 2013, was $898,000, and the aggregate intrinsic value of stock options exercisable at June 30, 2013, was $784,000. During fiscal 2013, options to purchase 6,600 shares were exercised. The intrinsic value of these options, based on the Companys closing stock price of $25.67, was $69,000. The intrinsic value of options vested in fiscal 2013, 2012, and 2011 was $65,000, $44,000, and $47,000, respectively.
Changes in options outstanding were as follows:
The following is a summary of the assumptions used in the Black-Scholes pricing model in determining the fair values of options granted during fiscal year 2012. (No options were granted in fiscal 2013 or 2011):
The table below summarizes information about stock options outstanding under the plan at June 30, 2013:
|
Note 10: Employee Benefits: Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range (Tables)
|
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
|
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Tables/Schedules | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range |
|
Southern Missouri Bancorp, Inc. -- Consolidated Statements of Income (USD $)
|
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2011
|
|
Interest Income: | |||
Loans | $ 34,355,076 | $ 36,349,320 | $ 32,265,395 |
Investment securities | 1,528,530 | 1,482,094 | 1,286,779 |
Mortgage-backed securities | 341,128 | 924,771 | 1,376,856 |
Other interest-earning assets | 66,603 | 209,119 | 118,627 |
TOTAL INTEREST INCOME | 36,291,337 | 38,965,304 | 35,047,657 |
Interest Expense: | |||
Deposits | 6,073,149 | 8,243,381 | 9,213,424 |
Securities sold under agreements to repurchase | 201,662 | 234,562 | 290,203 |
Advances from FHLB of Des Moines | 999,046 | 1,232,919 | 1,554,344 |
Subordinated debt | 227,127 | 232,154 | 226,776 |
TOTAL INTEREST EXPENSE | 7,500,984 | 9,943,016 | 11,284,747 |
NET INTEREST INCOME | 28,790,353 | 29,022,288 | 23,762,910 |
Provision for loan losses | 1,716,050 | 1,784,715 | 2,384,799 |
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES | 27,074,303 | 27,237,573 | 21,378,111 |
Noninterest income: | |||
Deposit account charges and related fees | 1,873,125 | 1,524,733 | 1,570,096 |
Bank credit transaction fees | 1,186,345 | 1,109,503 | 889,176 |
Loan late charges | 239,928 | 221,550 | 231,897 |
Other loan fees | 290,017 | 200,260 | 196,185 |
Net realized gains on sale of loans | 302,538 | 315,674 | 173,168 |
Bargain purchase gain on acquisitions | 6,996,750 | ||
Earnings on bank owned life insurance | 509,543 | 343,031 | 277,540 |
Other income | 66,774 | 348,459 | 167,480 |
TOTAL NONINTEREST INCOME | 4,468,270 | 4,063,210 | 10,502,292 |
Noninterest expense: | |||
Compensation and benefits | 10,136,068 | 9,237,003 | 7,987,470 |
Occupancy and equipment, net | 2,816,738 | 2,531,587 | 2,242,284 |
Deposit insurance premiums | 377,587 | 375,001 | 563,751 |
Legal and professional fees | 477,020 | 442,931 | 530,133 |
Advertising | 313,025 | 340,654 | 262,294 |
Postage and office supplies | 470,497 | 441,866 | 362,201 |
Intangible amortization | 417,132 | 417,131 | 354,636 |
Bank card network fees | 567,101 | 567,584 | 442,775 |
Other operating expense | 1,945,719 | 2,251,654 | 1,713,225 |
TOTAL NONINTEREST EXPENSE | 17,520,887 | 16,605,411 | 14,458,769 |
INCOME BEFORE INCOME TAXES | 14,021,686 | 14,695,372 | 17,421,634 |
Income Taxes | |||
Current | 3,724,085 | 6,006,254 | 4,443,982 |
Deferred | 230,386 | (1,409,145) | 1,507,621 |
Income Taxes | 3,954,471 | 4,597,109 | 5,951,603 |
NET INCOME | 10,067,215 | 10,098,263 | 11,470,031 |
Less: charge for early redemption of preferred stock issued at a discount | 94,365 | ||
Less: dividend on preferred shares | 345,115 | 424,184 | 511,814 |
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS | 9,722,100 | 9,579,714 | 10,958,217 |
Basic earnings per share available to common stockholders | $ 2.95 | $ 3.43 | $ 5.25 |
Diluted earnings per share available to common stockholders | $ 2.88 | $ 3.32 | $ 5.12 |
Dividends paid | $ 0.60 | $ 0.48 | $ 0.48 |
Note 3: Loans and Allowance For Loan Losses
|
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Note 3: Loans and Allowance For Loan Losses | NOTE 3: Loans and Allowance for Loan Losses
Classes of loans are summarized as follows:
The Companys lending activities consist of origination of loans secured by mortgages on one- to four-family residences and commercial and agricultural real estate, construction loans on residential and commercial properties, commercial and agricultural business loans and consumer loans. The Company has also occasionally purchased loan participation interests originated by other lenders and secured by properties generally located in the states of Missouri and Arkansas.
Residential Mortgage Lending. The Company actively originates loans for the acquisition or refinance of one- to four-family residences. This category includes both fixed-rate and adjustable-rate mortgage (ARM) loans amortizing over periods of up to 30 years, and the properties securing such loans may be owner-occupied or non-owner-occupied. Single-family residential loans do not generally exceed 90% of the lower of the appraised value or purchase price of the secured property. Substantially all of the one- to four-family residential mortgage originations in the Companys portfolio are located within the Companys primary lending area.
The Company also originates loans secured by multi-family residential properties that are generally located in the Companys primary lending area. The majority of the multi-family residential loans that are originated by the Bank are amortized over periods generally up to 20 years, with balloon maturities typically up to five years. Both fixed and adjustable interest rates are offered and it is typical for the Company to include an interest rate floor in the loan agreement. Generally, multi-family residential loans do not exceed 85% of the lower of the appraised value or purchase price of the secured property.
Commercial Real Estate Lending. The Company actively originates loans secured by commercial real estate including land (improved, unimproved, and farmland), strip shopping centers, retail establishments and other businesses. These properties are typically owned and operated by borrowers headquartered within the Companys primary lending area, however, the property may be located outside our primary lending area. Approximately $48.8 million of our $242.3 million in commercial real estate loans are secured by properties located outside our primary lending area.
Most commercial real estate loans originated by the Company generally are based on amortization schedules of up to 20 years with monthly principal and interest payments. Generally, the interest rate received on these loans is fixed for a maturity for up to five years, with a balloon payment due at maturity. Alternatively, for some loans, the interest rate adjusts at least annually after an initial period up to five years. The Company typically includes an interest rate floor in the loan agreement. Generally, improved commercial real estate loan amounts do not exceed 80% of the lower of the appraised value or the purchase price of the secured property. Agricultural real estate terms offered differ slightly, with amortization schedules of up to 25 years with an 80% loan-to-value ratio, or 30 years with a 75% loan-to-value ratio.
Construction Lending. The Company originates real estate loans secured by property or land that is under construction or development. Construction loans originated by the Company are generally secured by mortgage loans for the construction of owner occupied residential real estate or to finance speculative construction secured by residential real estate, land development, or owner-operated or non-owner occupied commercial real estate. During construction, these loans typically require monthly interest-only payments and have maturities ranging from six to twelve months. Once construction is completed, permanent construction loans may be converted to monthly payments using amortization schedules of up to 30 years on residential and generally up to 20 years on commercial real estate.
While the Company typically utilizes maturity periods ranging from 6 to 12 months to closely monitor the inherent risks associated with construction loans for these loans, weather conditions, change orders, availability of materials and/or labor, and other factors may contribute to the lengthening of a project, thus necessitating the need to renew the construction loan at the balloon maturity. Such extensions are typically executed in incremental three month periods to facilitate project completion. The Companys average term of construction loans is approximately eight months. During construction, loans typically require monthly interest only payments which may allow the Company an opportunity to monitor for early signs of financial difficulty should the borrower fail to make a required monthly payment. Additionally, during the construction phase, the Company typically obtains interim inspections completed by an independent third party. This monitoring further allows the Company opportunity to assess risk. At June 30, 2013, construction loans outstanding included 29 loans, totaling $6.9 million, for which a modification had been agreed to; At June 30, 2012, construction loans outstanding included 18 loans, totaling $11.0 million, for which a modification had been agreed to. All modifications were solely for the purpose of extending the maturity date due to conditions described above. None of these modifications were executed due to financial difficulty on the part of the borrower and, therefore, were not accounted for as TDRs.
Consumer Lending. The Company offers a variety of secured consumer loans, including home equity, direct and indirect automobile loans, second mortgages, mobile home loans and loans secured by deposits. The Company originates substantially all of its consumer loans in its primary lending area. Usually, consumer loans are originated with fixed rates for terms of up to five years, with the exception of home equity lines of credit, which are variable, tied to the prime rate of interest and are for a period of ten years.
Home equity lines of credit (HELOCs) are secured with a deed of trust and are issued up to 100% of the appraised or assessed value of the property securing the line of credit, less the outstanding balance on the first mortgage and are typically issued for a term of ten years. Interest rates on the HELOCs are generally adjustable. Interest rates are based upon the loan-to-value ratio of the property with better rates given to borrowers with more equity.
Automobile loans originated by the Company include both direct loans and a smaller amount of loans originated by auto dealers. The Company generally pays a negotiated fee back to the dealer for indirect loans. Typically, automobile loans are made for terms of up to 60 months for new and used vehicles. Loans secured by automobiles have fixed rates and are generally made in amounts up to 100% of the purchase price of the vehicle.
Commercial Business Lending. The Companys commercial business lending activities encompass loans with a variety of purposes and security, including loans to finance accounts receivable, inventory, equipment and operating lines of credit, including agricultural production and equipment loans. The Company offers both fixed and adjustable rate commercial business loans. Generally, commercial loans secured by fixed assets are amortized over periods up to five years, while commercial operating lines of credit or agricultural production lines are generally for a one year period.
The following tables present the balance in the allowance for loan losses and the recorded investment in loans (excluding loans in process and deferred loan fees) based on portfolio segment and impairment methods as of June 30, 2013 and 2012, and activity in the allowance for loan losses for the fiscal years ended June 30, 2013, 2012, and 2011.
Managements opinion as to the ultimate collectability of loans is subject to estimates regarding future cash flows from operations and the value of property, real and personal, pledged as collateral. These estimates are affected by changing economic conditions and the economic prospects of borrowers.
The allowance for loan losses is maintained at a level that, in managements judgment, is adequate to cover probable credit losses inherent in the loan portfolio at the balance sheet date. The allowance for loan losses is established as losses are estimated to have occurred through a provision for loan losses charged to earnings. Loan losses are charged against the allowance when an amount is determined to be uncollectible, based on managements analysis of expected cash flow (for non-collateral dependent loans) or collateral value (for collateral-dependent loans). Subsequent recoveries, if any, are credited to the allowance.
The allowance for loan losses is evaluated on a regular basis by management and is based upon managements periodic review of the collectability of the loans in light of historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrowers ability to repay, estimated value of any underlying collateral and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available.
The allowance consists of allocated and general components. The allocated component relates to loans that are classified as impaired. For those loans that are classified as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan.
Under the Companys allowance methodology, loans are first segmented into 1) those comprising large groups of smaller-balance homogeneous loans, including single-family mortgages and installment loans, which are collectively evaluated for impairment, and 2) all other loans which are individually evaluated. Those loans in the second category are further segmented utilizing a defined grading system which involves categorizing loans by severity of risk based on conditions that may affect the ability of the borrowers to repay their debt, such as current financial information, collateral valuations, historical payment experience, credit documentation, public information, and current trends. The loans subject to credit classification represent the portion of the portfolio subject to the greatest credit risk and where adjustments to the allowance for losses on loans as a result of provisions and charge offs are most likely to have a significant impact on operations.
A periodic review of selected credits (based on loan size and type) is conducted to identify loans with heightened risk or probable losses and to assign risk grades. The primary responsibility for this review rests with loan administration personnel. This review is supplemented with periodic examinations of both selected credits and the credit review process by the Companys internal audit function and applicable regulatory agencies. The information from these reviews assists management in the timely identification of problems and potential problems and provides a basis for deciding whether the credit represents a probable loss or risk that should be recognized.
During fiscal 2011, the Company changed its allowance methodology to consider, as the primary quantitative factor, average net charge offs over the most recent twelve-month period. The Company had previously considered average net charge offs over the most recent five-year period as the primary quantitative factor. The impact of the modification was minimal.
A loan is considered impaired when, based on current information and events, it is probable that the scheduled payments of principal or interest will not be able to be collected when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrowers prior payment record and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan-by-loan basis for commercial and agricultural loans by either the present value of expected future cash flows discounted at the loans effective interest rate, the loans obtainable market price or the fair value of the collateral if the loan is collateral dependent.
Groups of loans with similar risk characteristics are collectively evaluated for impairment based on the groups historical loss experience adjusted for changes in trends, conditions and other relevant factors that affect repayment of the loans. Accordingly, individual consumer and residential loans are not separately identified for impairment measurements, unless such loans are the subject of a restructuring agreement due to financial difficulties of the borrower.
The general component covers non-classified loans and is based on historical charge-off experience and expected loss given the internal risk rating process. The loan portfolio is stratified into homogeneous groups of loans that possess similar loss characteristics and an appropriate loss ratio adjusted for other qualitative factors is applied to the homogeneous pools of loans to estimate the incurred losses in the loan portfolio.
Included in the Companys loan portfolio are certain loans accounted for in accordance with ASC 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality. These loans were written down at acquisition to an amount estimated to be collectible. As a result, certain ratios regarding the Companys loan portfolio and credit quality cannot be used to compare the Company to peer companies or to compare the Companys current credit quality to prior periods. The ratios particularly affected by accounting under ASC 310-30 include the allowance for loan losses as a percentage of loans, nonaccrual loans, and nonperforming assets, and nonaccrual loans and nonperforming loans as a percentage of total loans.
The following tables present the credit risk profile of the Companys loan portfolio (excluding loans in process and deferred loan fees) based on rating category and payment activity as of June 30, 2013 and 2012. These tables include purchased credit impaired loans, which are reported according to risk categorization after acquisition based on the Companys standards for such classification:
The above amounts include purchased credit impaired loans. At June 30, 2013, these loans comprised $1.7 million of credits rated Pass; $0 of credits rated Special Mention, $1.8 million of credits rated Substandard and $0 of credits rated Doubtful. At June 30, 2012, these loans comprised $1.5 million of credits rated Pass; $0 of credits rated Special Mention; $3.0 million of credits rated Substandard; and $0 of credits rated Doubtful.
Credit Quality Indicators. The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends among other factors. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis is performed on all loans at origination, and is updated on a quarterly basis for loans risk rated Special Mention, Substandard, or Doubtful. In addition, lending relationships over $250,000 are subject to an independent loan review following origination, and lending relationships in excess of $1,000,000 are subject to an independent loan review annually, in order to verify risk ratings. The Company uses the following definitions for risk ratings:
Watch Loans classified as watch exhibit weaknesses that require more than usual monitoring. Issues may include deteriorating financial condition, payments made after due date but within 30 days, adverse industry conditions or management problems.
Special Mention Loans classified as special mention exhibit signs of further deterioration but still generally make payments within 30 days. This is a transitional rating and loans should typically not be rated Special Mention for more than 12 months.
Substandard Loans classified as substandard possess weaknesses that jeopardize the ultimate collection of the principal and interest outstanding. These loans exhibit continued financial losses, ongoing delinquency, overall poor financial condition, and insufficient collateral. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.
Doubtful Loans classified as doubtful have all the weaknesses of substandard loans, and have deteriorated to the level that there is a high probability of substantial loss.
Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be Pass rated loans.
The following tables present the Companys loan portfolio aging analysis (excluding loans in process and deferred loan fees) as of June 30, 2013 and 2012. These tables include purchased credit impaired loans, which are reported according to aging analysis after acquisition based on the Companys standards for such classification:
At June 30, 2013, and June 30, 2012, there were no purchased credit impaired loans that were past due.
A loan is considered impaired, in accordance with the impairment accounting guidance (ASC 310-10-35-16), when based on current information and events, it is probable the Company will be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan. Impaired loans include nonperforming loans but also include loans modified in troubled debt restructurings (TDRs) where concessions have been granted to borrowers experiencing financial difficulties. These concessions could include a reduction in the interest rate on the loan, payment extensions, forgiveness of principal, forbearance or other actions intended to maximize collection.
The following tables present impaired loans (excluding loans in process and deferred loan fees) as of June 30, 2013 and 2012. These tables include purchased credit impaired loans. Purchased credit impaired loans are those for which it was deemed probable, at acquisition, that the Company would be unable to collect all contractually required payments receivable. In an instance where, subsequent to the acquisition, the Company determines it is probable, for a specific loan, that cash flows received will exceed the amount previously expected, the Company will recalculate the amount of accretable yield in order to recognize the improved cash flow expectation as additional interest income over the remaining life of the loan. These loans, however, will continue to be reported as impaired loans. In an instance where, subsequent to the acquisition, the Company determines it is probable that, for a specific loan, that cash flows received will be less than the amount previously expected, the Company will allocate a specific allowance under the terms of ASC 310-10-35.
The above amounts include purchased credit impaired loans. At June 30, 2013, these loans comprised of $3.3 million of impaired loans without a specific valuation allowance; $756,000 with a specific valuation allowance, and $4.1 million of total impaired loans. At June 30, 2012, these loans comprised $3.6 million of impaired loans without a specific valuation allowance; $935,000 of impaired loans with a specific valuation allowance, and $4.5 million of total impaired loans. The following tables present information regarding interest income recognized on impaired loans:
Interest income on impaired loans recognized on a cash basis in the fiscal years ended June 30, 2013, 2012, and 2011 was immaterial.
For the fiscal years ended June 30, 2013, 2012, and 2011, the amount of interest income recorded for impaired loans that represents a change in the present value of future cash flows attributable to the passage of time was approximately $391,000, $1.4 million, and $95,000, respectively.
The following table presents the Companys nonaccrual loans at June 30, 2013 and 2012. This table includes purchased credit impaired loans. Purchased credit impaired loans are placed on nonaccrual status in the event the Company cannot reasonably estimate cash flows expected to be collected. The table excludes performing troubled debt restructurings.
The above amounts include purchased credit impaired loans. At June 30, 2013 and 2012, these loans comprised $756,000 and $930,000 of nonaccrual loans, respectively.
Included in certain loan categories in the impaired loans are troubled debt restructurings (TDRs), where economic concessions have been granted to borrowers who have experienced financial difficulties. These concessions typically result from our loss mitigation activities, and could include reductions in the interest rate, payment extensions, forgiveness of principal, forbearance, or other actions. Certain TDRs are classified as nonperforming at the time of restructuring and typically are returned to performing status after considering the borrowers sustained repayment performance for a reasonable period of at least six months.
When loans and leases are modified into a TDR, the Company evaluates any possible impairment similar to other impaired loans based on the present value of expected future cash flows, discounted at the contractual interest rate of the original loan or lease agreement, and uses the current fair value of the collateral, less selling costs, for collateral dependent loans. If the Company determines that the value of the modified loan is less than the recorded investment in the loan (net of previous charge-offs, deferred loan fees or costs, and unamortized premium or discount), impairment is recognized through an allowance estimate or a charge-off to the allowance. In periods subsequent to modification, the Company evaluates all TDRs, including those that have payment defaults, for possible impairment and recognizes impairment through the allowance.
At June 30, 2013, and June 30, 2012, the Company had $2.9 million and $3.1 million, respectively, of commercial real estate loans, $1.0 million and $1.7 million, respectively, of commercial loans, and $1.7 million and $40,000, respectively, of conventional real estate loans that were modified in TDRs and impaired. All loans classified as TDRs at June 30, 2013, and June 30, 2012, were so classified due to interest rate concessions. During the previous twelve months, two commercial real estate loans totaling $253,000 and one commercial loan totaling $10,000 were modified as TDRs and had payment defaults subsequent to the modification. When loans modified as TDRs have subsequent payment defaults, the defaults are factored into the determination of the allowance for loan losses to ensure specific valuation allowance reflect amounts considered uncollectible.
Performing loans classified as troubled debt restructurings at June 30, 2013 and June 30, 2012 segregated by class, are shown in the table below. Nonperforming TDRs are shown as nonaccrual loans.
Following is a summary of loans to executive officers, directors, significant shareholders and their affiliates held by the Company at June 30, 2013 and 2012, respectively:
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Note 17: Acquisitions
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Note 17: Acquisitions | NOTE 17: Acquisitions
On December 17, 2010, the Bank entered into a Purchase and Assumption Agreement with the FDIC, as receiver, to acquire certain assets and assume certain liabilities of the former First Southern Bank, with headquarters in Batesville, Arkansas, and one branch location in Searcy, Arkansas. The results of operations of the former First Southern Bank locations have been included in the consolidated condensed financial statements since that date. As a result of the transaction, the Bank will have an opportunity to increase its deposit base and reduce transaction and other costs through economies of scale.
The Company recorded $437,000 in third-party acquisition-related costs in fiscal 2011. The expenses are included in noninterest expense in the Companys consolidated statement of income for fiscal 2011.
The bargain purchase gain of $7.0 million arising from the acquisition is a result of the discount bid of $17.5 million made by the Company to acquire the assets and assume the liabilities of the failed financial institution. The transaction was accomplished without the loss-share coverage from the FDIC. The full amount of the bargain purchase gain is expected to be taxable, on a deferred basis.
The following table summarizes the assets acquired and liabilities assumed at the acquisition date.
For the fiscal year ended June 30, 2011, the acquired business contributed revenues (net interest income and noninterest income) of $3.0 million, and earnings, net of tax of $1.0 million to the Company. The figure reported for earnings does not include additional administrative expenses incurred by the Company that could be attributed to growth resulting from the acquisition. The following pro forma summary presents consolidated information of the Company as if the business combination had occurred on July 1, 2010:
The above pro forma summary excludes earnings on investment securities as they were not included with the asset purchase.
The fair value of the assets acquired included loans with a fair value of $114.6 million. The estimated gross amount due under the contracts was $124.4 million, of which $7.4 million was expected to be uncollectible. The determination of the initial fair value of assets acquired and liabilities assumed in the transaction involves a high degree of judgment and complexity. The carrying value of the acquired loans reflect managements best estimate of the fair value of these assets as of the date of acquisition. However, the amount that we realize on these assets could differ materially from the carrying value reflected in these financial statements, based upon the timing and amount of collections on the acquired loans in future periods.
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Note 21: Condensed Parent Company Only Financial Statements: Condensed Balance Sheet (Tables)
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Note 12: Other Comprehensive Income (loss): Schedule of Accumulated Other Comprehensive Income (Loss) (Tables)
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Schedule of Accumulated Other Comprehensive Income (Loss) |
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Note 11: Income Taxes
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Note 11: Income Taxes | NOTE 11: Income Taxes
The Company and its subsidiary files income tax returns in the U.S. Federal jurisdiction and various states. The Company is no longer subject to U.S. federal and state tax examinations by tax authorities for years before 2009. The Company recognized no interest or penalties related to income taxes.
The components of net deferred tax assets are summarized as follows:
As of June 30, 2013, the Company had approximately $440,000 of federal and state net operating loss carryforwards which were acquired in the July 2009 acquisition of Southern Bank of Commerce. The amount reported is net of the IRC Sec. 382 limitation, or state equivalent, related to the utilization of net operating loss carryforwards of acquired corporations. Unless otherwise utilized, the net operating losses will begin to expire in 2027.
A reconciliation of income tax expense at the statutory rate to the Companys actual income tax expense is shown below:
Tax credit benefits are recognized under the flow-through method of accounting for investments in tax credits.
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Note 7: Securities Sold Under Agreements To Repurchase: Schedule of Securities Sold Under Agreements to Repurchase (Tables)
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Schedule of Securities Sold Under Agreements to Repurchase |
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Note 3: Loans and Allowance For Loan Losses: Schedule of Interest Income Recognized on Impaired Loans (Details) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | ||
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Jun. 30, 2013
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Jun. 30, 2011
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Commercial Loan
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Impaired Financing Receivable, Average Recorded Investment | $ 1,273 | $ 2,155 | $ 2,283 |
Impaired Financing Receivable Interest Income Recognized | 91 | 1,265 | 212 |
Total loans
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Impaired Financing Receivable, Average Recorded Investment | 4,971 | 6,771 | 6,022 |
Impaired Financing Receivable Interest Income Recognized | 720 | 2,214 | 537 |
Residential Mortgage
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Impaired Financing Receivable, Average Recorded Investment | 1,629 | 1,667 | 981 |
Impaired Financing Receivable Interest Income Recognized | 375 | 311 | 105 |
Commercial Real Estate
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Impaired Financing Receivable, Average Recorded Investment | 2,069 | 2,949 | 2,758 |
Impaired Financing Receivable Interest Income Recognized | $ 254 | $ 638 | $ 220 |
Note 13: Stockholders' Equity and Regulatory Capital: Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations (Tables)
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Jun. 30, 2013
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Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations |
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Note 3: Loans and Allowance For Loan Losses: Schedule of Impaired Loans (Tables)
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12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Impaired Loans |
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Note 20: Business Combination
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12 Months Ended |
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Jun. 30, 2013
|
|
Notes | |
Note 20: Business Combination | NOTE 20: Business Combination
On June 21, 2013, the Company entered into a definitive agreement (the Agreement) with Ozarks Legacy Community Financial, Inc. (Ozarks), pursuant to which Ozarks will be merged with and into the Company (the Merger), and immediately thereafter Ozarks bank subsidiary, Bank of Thayer (BT), will be merged with and into the Companys subsidiary Bank. Ozarks shareholders will be entitled to receive cash of approximately $6.2 million, subject to certain adjustments for transaction expenses and Ozarks equity at closing. Approximately $3.7 million in outstanding debt of Ozarks, plus accrued interest, will also be assumed. As part of the merger between Southern Bank and BT, BTs minority shareholders will be paid $262,000.
In the event the Agreement is terminated under certain specified circumstances in connection with a competing transaction, Ozarks will be required to pay the Company a termination fee of $400,000 in cash.
The transaction is subject to customary closing conditions, including the receipt of regulatory approvals, approval of the Agreement by the shareholders of Ozarks and approval of the bank merger agreement by the shareholders of BT, and is expected to be completed in the fourth calendar quarter of 2013. Certain principal shareholders of Ozarks have agreed to vote their shares of Ozarks common stock in favor of approval of the Agreement.
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Note 19: Significant Estimates
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12 Months Ended |
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Jun. 30, 2013
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Notes | |
Note 19: Significant Estimates | NOTE 19: Significant Estimates
Accounting principles generally accepted in the United States of America require disclosure of certain significant estimates and current vulnerabilities due to certain concentrations. Estimates related to the allowance for loan losses are described in Note 1.
Current Economic Conditions. The recent economic environment has presented financial institutions with unprecedented circumstances and challenges which in some cases have resulted in large declines in the fair values of investments and other assets, constraints on liquidity and significant credit quality problems, including severe volatility in the valuation of real estate and other collateral supporting loans. The financial statements have been prepared using values and information currently available to the Company. Given the volatility of recent economic conditions, the values of assets and liabilities recorded in the financial statements could change rapidly, resulting in material future adjustments in asset values, the allowance for loan losses, and capital that could negatively impact the Companys ability to meet regulatory capital requirements and maintain sufficient liquidity. Furthermore, the Company and Banks regulators could require material adjustments to asset values or the allowance for loan losses for regulatory capital purposes that could affect the Company and Banks measurement of regulatory capital and compliance with the capital adequacy guidelines under the regulatory framework for prompt corrective action.
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Note 6: Deposits: Schedule of Deposit Liabilities (Tables)
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12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Tables/Schedules | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Deposit Liabilities |
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Note 3: Loans and Allowance For Loan Losses: Schedule of Accounts, Notes, Loans and Financing Receivable (Tables)
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12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||
Schedule of Accounts, Notes, Loans and Financing Receivable |
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Note 3: Loans and Allowance For Loan Losses: Schedule of Financing Receivables, Non Accrual Status (Tables)
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12 Months Ended | |||||||||||||||||||||
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Jun. 30, 2013
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Tables/Schedules | ||||||||||||||||||||||
Schedule of Financing Receivables, Non Accrual Status |
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Note 8: Advances From Federal Home Loan Bank: Schedule of Federal Home Loan Bank Advances (Tables)
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12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Federal Home Loan Bank Advances |
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Note 2: Available-for-sale Securities: Schedule of Available for Sale Securities by Contractual Maturity (Tables)
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12 Months Ended | ||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Tables/Schedules | |||||||||||||||||||||||||||||||||||||
Schedule of Available for Sale Securities by Contractual Maturity |
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Note 18: Fair Value Measurements: Gains (Losses) Recognized on Assets Measured on a Nonrecurring Basis (Tables)
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12 Months Ended | ||||||||||||
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Jun. 30, 2013
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Tables/Schedules | |||||||||||||
Gains (Losses) Recognized on Assets Measured on a Nonrecurring Basis |
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Note 21: Condensed Parent Company Only Financial Statements: Condensed Balance Sheet (Details) (USD $)
|
Jun. 30, 2013
|
Jun. 30, 2012
|
---|---|---|
Details | ||
Cash and cash equivalents, parent company | $ 16,576,832 | $ 15,342,647 |
Other assets, parent company | 6,771,627 | 6,994,591 |
Investment in common stock of Bank, parent company | 85,798,652 | 79,233,550 |
Total assets, parent company | 109,147,111 | 101,570,788 |
Accrued expenses and other liabilities, parent company | 100,758 | (374,284) |
Subordinated debt, parent company | 7,217,000 | 7,217,000 |
Total liabilities, parent company | 7,317,758 | 6,842,716 |
Stockholders' equity, parent company | 101,829,353 | 94,728,072 |
Total liabilities and stockholders' equity, parent company | $ 109,147,111 | $ 101,570,788 |
Note 18: Fair Value Measurements: Fair Value Measurements, Nonrecurring (Tables)
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12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements, Nonrecurring |
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Note 4: Accounting For Certain Loans Acquired in A Transfer: Schedule of Acquired Loans with Credit Deterioration (Tables)
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Tables/Schedules | ||||||||||||||||||||||||||||||||||
Schedule of Acquired Loans with Credit Deterioration |
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Note 21: Condensed Parent Company Only Financial Statements: Condensed Cash Flow Statement (Tables)
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Jun. 30, 2013
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Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Cash Flow Statement |
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Note 10: Employee Benefits: Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions (Details) (USD $)
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12 Months Ended |
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Jun. 30, 2012
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Details | |
Fair Value Assumptions, Expected Dividend Yield | 2.15% |
Fair Value Assumptions, Expected Volatility Rate | 20.75% |
Fair Value Assumptions, Risk Free Interest Rate | 2.18% |
Fair value assumptions weighted-average expected life (years) | 10.00 |
Fair value assumptions weighted-average fair value of | $ 4.66 |
Note 11: Income Taxes: Schedule of Effective Income Tax Rate Reconciliation (Details) (USD $)
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12 Months Ended | ||
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Jun. 30, 2013
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Jun. 30, 2012
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Jun. 30, 2011
|
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Effective Income Tax Rate Reconciliation at Federal Statutory Income Tax Rate, Amount | $ 4,767,373 | $ 4,996,427 | $ 5,923,356 |
Actual Tax Provision | 3,954,471 | 4,597,109 | 5,951,603 |
Increase (reduction) in taxes resulting from
|
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Nontaxable Municipal Income | (505,941) | (469,200) | (384,457) |
State tax, net of Federal benefit | 335,940 | 368,775 | 460,690 |
Tax credit benefits | (341,755) | (236,451) | (119,901) |
Other, net | (127,901) | 54,189 | 166,279 |
Increase (reduction) in cash surrender value of Bank-owned life insurance
|
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State tax, net of Federal benefit | $ (173,245) | $ (116,631) | $ (94,364) |
Note 18: Fair Value Measurements
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Note 18: Fair Value Measurements | NOTE 18: Fair Value Measurements
ASC Topic 820, Fair Value Measurements, defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Topic 820 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 in active markets for identical assets or liabilities
Level 2 Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in active markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities
Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities
Recurring Measurements. The following table presents the fair value measurements of assets recognized in the accompanying consolidated balance sheets measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall at June 30, 2013 and 2012:
Following is a description of the valuation methodologies and inputs used for assets measured at fair value on a recurring basis and recognized in the accompanying consolidated balance sheets, as well as the general classification of such assets pursuant to the valuation hierarchy. There have been no significant changes in the valuation techniques during the period year ended June 30, 2013.
Available-for-sale Securities. When quoted market prices are available in an active market, securities are classified within Level 1. The Company does not have Level 1 securities. If quoted market prices are not available, then fair values are estimated using pricing models, or quoted prices of securities with similar characteristics. For these securities, our Company obtains fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the bonds terms and conditions, among other things. Level 2 securities include U.S. Government-sponsored enterprises, state and political subdivisions, other securities and mortgage-backed GSE residential securities. In certain cases where Level 1 or Level 2 inputs are not available, securities are classified within Level 3 of the hierarchy.
During fiscal 2011, a pooled trust preferred security was reclassified from Level 2 to Level 3 due to the unavailability of third-party vendor valuations determined by observable inputs either quoted prices for similar assets; quoted prices in active markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full terms of the assets. The following table presents a reconciliation of activity for available for sale securities measured at fair value based on significant unobservable (Level 3) information for the years ended June 30, 2013 and 2012:
Nonrecurring Measurements. The following tables present the fair value measurement of assets measured at fair value on a nonrecurring basis and the level within the ASC 820 fair value hierarchy in which the fair value measurements fell at June 30, 2013 and 2012:
The following table presents gains and (losses) recognized on assets measured on a non-recurring basis for the years ended June 30, 2013 and 2012:
The following is a description of valuation methodologies and inputs used for assets measured at fair value on a nonrecurring basis and recognized in the accompanying consolidated balance sheets, as well as the general classification of such assets pursuant to the valuation hierarch. For assets classified within Level 3 of fair value hierarchy, the process used to develop the reported fair value process is described below.
Impaired Loans (Collateral Dependent). A collateral dependent loan is considered to be impaired when it is probable that all of the principal and interest due may not be collected according to its contractual terms. Generally, when a collateral dependent loan is considered impaired, the amount of reserve required is measured based on the fair value of the underlying collateral. The Company makes such measurements on all material collateral dependent loans deemed impaired using the fair value of the collateral for collateral dependent loans. The fair value of collateral used by the Company is determined by obtaining an observable market price or by obtaining an appraised value from an independent, licensed or certified appraiser, using observable market data. This data includes information such as selling price of similar properties and capitalization rates of similar properties sold within the market, expected future cash flows or earnings of the subject property based on current market expectations, and other relevant factors. In addition, management applies selling and other discounts to the underlying collateral value to determine the fair value. If an appraised value is not available, the fair value of the collateral dependent impaired loan is determined by an adjusted appraised value including unobservable cash flows.
On a quarterly basis, loans classified as special mention, substandard, doubtful, or loss are evaluated including the loan officers review of the collateral and its current condition, the Companys knowledge of the current economic environment in the market where the collateral is located, and the Companys recent experience with real estate in the area. The date of the appraisal is also considered in conjunction with the economic environment and any decline in the real estate market since the appraisal was obtained. For all loan types, updated appraisals are obtained if considered necessary. Of the Companys $4.2 million (carrying value) in impaired loans (collateral-dependent and purchased credit-impaired), excluding performing TDRs, at June 30, 2013, the Company utilized a real estate appraisal performed in the past 12 months to serve as the primary basis of our valuation for approximately $1.6 million. Older real estate appraisals were available for impaired loans with an outstanding balance of approximately $1.9 million. The remaining $770,000 was secured by collateral such as closely-held stock, accounts receivable, equipment, or inventory. In instances where the economic environment has worsened and/or the real estate market declined since the last appraisal, a higher distressed sale discount would be applied to the appraised value.
The Company records collateral dependent impaired loans based on nonrecurring Level 3 inputs. If a collateral dependent loans fair value, as estimated by the Company, is less than its carrying value, the Company either records a charge-off of the portion of the loan that exceeds the fair value or establishes a specific reserve as part of the allowance for loan losses.
Foreclosed and Repossessed Assets Held for Sale. Foreclosed and repossessed assets held for sale are valued at the time the loan is foreclosed upon or collateral is repossessed and the asset is transferred to foreclosed or repossessed assets held for sale. The value of the asset is based on third party or internal appraisals, less estimated costs to sell and appropriate discounts, if any. The appraisals are generally discounted based on current and expected market conditions that may impact the sale or value of the asset and managements knowledge and experience with similar assets. Such discounts typically may be significant and result in a Level 3 classification of the inputs for determining fair value of these assets. Foreclosed and repossessed assets held for sale are continually evaluated for additional impairment and are adjusted accordingly if impairment is identified.
Unobservable (Level 3) Inputs. The following table presents quantitative information about unobservable inputs used in recurring and nonrecurring Level 3 fair value measurements.
Fair Value of Financial Instruments. The following table presents estimated fair values of the Companys financial instruments and the level within the fair value hierarchy in which the fair value measurements fell at June 30, 2013 and 2012:
The following methods and assumptions were used in estimating the fair values of financial instruments:
Cash and cash equivalents, interest-bearing time deposits, accrued interest receivable, and accrued interest payable are valued at their carrying amounts, which approximates book value. Stock in FHLB and the Federal Reserve Bank of St. Louis is valued at cost, which approximates fair value. Fair value of loans is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. Loans with similar characteristics are aggregated for purposes of the calculations. The carrying amounts of accrued interest approximate their fair values.
The fair value of fixed-maturity time deposits is estimated using a discounted cash flow calculation that applies the rates currently offered for deposits of similar remaining maturities. Non-maturity deposits and securities sold under agreements are valued at their carrying value, which approximates fair value. Fair value of advances from the FHLB is estimated by discounting maturities using an estimate of the current market for similar instruments. The fair value of subordinated debt is estimated using rates currently available to the Company for debt with similar terms and maturities. The fair value of commitments to originate loans is estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present creditworthiness of the counterparties. For fixed-rate loan commitments, fair value also considers the difference between current levels of interest rates and committed rates. The fair value of letters of credit and lines of credit are based on fees currently charged for similar agreements or on the estimated cost to terminate or otherwise settle the obligations with the counterparties at the reporting date.
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Southern Missouri Bancorp, Inc. -- Consolidated Statements of Stockholders' Equity (USD $)
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Total
|
Preferred Stock
|
Common Stock
|
Warrants to Acquire Common Stock
|
Additional Paid-In Capital
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Retained Earnings
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Treasury Stock
|
Accumulated Other Comprehensive Income (Loss)
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Total Stockholders' Equity
|
|||||
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Balance at start of period at Jun. 30, 2010 | $ 9,421,321 | $ 29,572 | $ 176,790 | $ 16,367,698 | $ 33,060,723 | $ (13,994,870) | $ 587,964 | $ 45,649,198 | ||||||
NET INCOME | 11,470,031 | 11,470,031 | 11,470,031 | |||||||||||
Change in unrealized gain (loss) on available for sale securities | (55,249) | (55,249) | ||||||||||||
Defined benefit pension plan net gain | 2,905 | 2,905 | 2,905 | |||||||||||
Dividends paid on common stock | (1,004,749) | (1,004,749) | (1,004,749) | [1] | ||||||||||
Dividends paid on preferred stock | (477,500) | (477,500) | (477,500) | |||||||||||
Accretion of discount on preferred stock | 34,314 | (34,314) | ||||||||||||
Stock option expense | 10,388 | 10,388 | ||||||||||||
Stock grant expense | 13,152 | 13,152 | ||||||||||||
Tax benefit of stock grants | 6,860 | 6,860 | ||||||||||||
Exercise of stock options | 82,730 | (157,895) | 240,625 | 82,730 | ||||||||||
Tax benefit of stock options | 34,342 | 34,342 | ||||||||||||
Balance at end of period at Jun. 30, 2011 | 9,455,635 | 29,572 | 176,790 | 16,274,545 | 43,014,191 | (13,754,245) | 535,620 | 55,732,108 | ||||||
NET INCOME | 10,098,263 | 10,098,263 | 10,098,263 | |||||||||||
Change in unrealized gain (loss) on available for sale securities | 160,659 | 160,659 | ||||||||||||
Defined benefit pension plan net gain | 3,622 | 3,622 | 3,622 | |||||||||||
Dividends paid on common stock | (1,283,928) | (1,283,928) | (1,283,928) | [1] | ||||||||||
Dividends paid on preferred stock | (368,760) | (368,760) | (368,760) | |||||||||||
Accretion of discount on preferred stock | 94,365 | (94,365) | ||||||||||||
Stock option expense | 11,860 | 11,860 | ||||||||||||
Stock grant expense | 10,711 | 10,711 | ||||||||||||
Tax benefit of stock grants | 3,135 | 3,135 | ||||||||||||
Treasury stock issued | (26,315) | 13,700,155 | 13,700,155 | |||||||||||
Exercise of stock options | 22,845 | (4,930) | 27,775 | 22,845 | ||||||||||
Redemption of preferred stock | (9,550,000) | (9,550,000) | (9,550,000) | |||||||||||
Common stock issued | 19,914,349 | 2,955 | 6,211,238 | 6,214,193 | ||||||||||
Preferred stock issued | 19,973,208 | 20,000,000 | (26,792) | 19,973,208 | ||||||||||
Balance at end of period at Jun. 30, 2012 | 20,000,000 | 32,527 | 176,790 | 22,479,767 | 51,365,401 | (26,315) | 699,901 | 94,728,072 | ||||||
NET INCOME | 10,067,215 | 10,067,215 | 10,067,215 | |||||||||||
Change in unrealized gain (loss) on available for sale securities | (884,267) | (884,267) | ||||||||||||
Defined benefit pension plan net gain | 5,426 | 5,426 | 5,426 | |||||||||||
Dividends paid on common stock | (1,974,924) | (1,974,924) | (1,974,924) | [2] | ||||||||||
Dividends paid on preferred stock | (411,553) | (411,553) | (411,553) | |||||||||||
Stock option expense | 14,190 | 14,190 | ||||||||||||
Stock grant expense | 171,999 | 171,999 | ||||||||||||
Tax benefit of stock grants | 12,677 | 12,677 | ||||||||||||
Exercise of stock options | 100,518 | 43 | 74,160 | 26,315 | 100,518 | |||||||||
Common stock issued | 50 | (50) | ||||||||||||
Balance at end of period at Jun. 30, 2013 | $ 20,000,000 | $ 32,620 | $ 176,790 | $ 22,752,744 | $ 59,046,139 | $ (178,940) | $ 101,829,353 | |||||||
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Note 1: Organization and Summary of Significant Accounting Policies
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12 Months Ended |
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Jun. 30, 2013
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Notes | |
Note 1: Organization and Summary of Significant Accounting Policies | NOTE 1: Organization and Summary of Significant Accounting Policies
Organization. Southern Missouri Bancorp, Inc., a Missouri corporation (the Company) was organized in 1994 and is the parent company of Southern Bank (the Bank). Substantially all of the Companys consolidated revenues are derived from the operations of the Bank, and the Bank represents substantially all of the Companys consolidated assets and liabilities.
The Bank is primarily engaged in providing a full range of banking and financial services to individuals and corporate customers in its market areas. The Bank and Company are subject to competition from other financial institutions. The Bank and Company are subject to the regulation of certain federal and state agencies and undergo periodic examinations by those regulatory authorities.
Basis of Financial Statement Presentation. The financial statements of the Company have been prepared in conformity with accounting principles generally accepted in the United States of America and general practices within the banking industry. In the normal course of business, the Company encounters two significant types of risk: economic and regulatory. Economic risk is comprised of interest rate risk, credit risk, and market risk. The Company is subject to interest rate risk to the degree that its interest-bearing liabilities reprice on a different basis than its interest-earning assets. Credit risk is the risk of default on the Companys investment or loan portfolios resulting from the borrowers inability or unwillingness to make contractually required payments. Market risk reflects changes in the value of the investment portfolio, collateral underlying loans receivable, and the value of the Companys investments in real estate.
Principles of Consolidation. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, the Bank. All significant intercompany accounts and transactions have been eliminated.
Use of Estimates. 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.
Material estimates that are particularly susceptible to significant change relate to the determination of the allowance for loan losses, estimated fair values of purchased loans, other-than-temporary impairments (OTTI), and fair value of financial instruments.
Cash and Cash Equivalents. For purposes of reporting cash flows, cash and cash equivalents includes cash, due from depository institutions and interest-bearing deposits in other depository institutions with original maturities of three months or less. Interest-bearing deposits in other depository institutions were $9,458,219 and $31,047,957 at June 30, 2013 and 2012, respectively. The deposits are held in various commercial banks in amounts not exceeding the FDICs deposit insurance limits, as well as at the Federal Reserve and the Federal Home Loan Bank of Des Moines.
Interest-bearing Time Deposits. Interest-bearing deposits in banks mature within three years and are carried at cost.
Available for Sale Securities. Available for sale securities, which include any security for which the Company has no immediate plan to sell but which may be sold in the future, are carried at fair value. Unrealized gains and losses, net of tax, are reported in accumulated other comprehensive income, a component of stockholders equity. All securities have been classified as available for sale.
Premiums and discounts on debt securities are amortized or accreted as adjustments to income over the estimated life of the security using the level yield method. Realized gains or losses on the sale of securities is based on the specific identification method. The fair value of securities is based on quoted market prices or dealer quotes. If a quoted market price is not available, fair value is estimated using quoted market prices for similar securities.
The Company does not invest in collateralized mortgage obligations that are considered high risk.
When the Company does not intend to sell a debt security, and it is more likely than not the Company will not have to sell the security before recovery of its cost basis, it recognizes the credit component of an other-than-temporary impairment of a debt security in earnings and the remaining portion in other comprehensive income. As a result of this guidance, the Companys consolidated balance sheet for the dates presented reflects the full impairment (that is, the difference between the securitys amortized cost basis and fair value) on debt securities that the Company intends to sell or would more likely than not be required to sell before the expected recovery of the amortized cost basis. For available-for-sale debt securities that management has no intent to sell and believes that it more likely than not will not be required to sell prior to recovery, only the credit loss component of the impairment is recognized in earnings, while the noncredit loss is recognized in accumulated other comprehensive income. The credit loss component recognized in earnings is identified as the amount of principal cash flows not expected to be received over the remaining term of the security as projected based on cash flow projections.
Federal Reserve Bank and Federal Home Loan Bank Stock. The Bank is a member of the Federal Reserve and the Federal Home Loan Bank (FHLB) systems. Capital stock of the Federal Reserve and the FHLB is a required investment based upon a predetermined formula and is carried at cost.
Loans. Loans are generally stated at unpaid principal balances, less the allowance for loan losses and net deferred loan origination fees.
Interest on loans is accrued based upon the principal amount outstanding. The accrual of interest on loans is discontinued when, in managements judgment, the collectability of interest or principal in the normal course of business is doubtful. The Company complies with regulatory guidance which indicates that loans should be placed in nonaccrual status when 90 days past due, unless the loan is both well-secured and in the process of collection. A loan that is in the process of collection may be subject to legal action or, in appropriate circumstances, through other collection efforts reasonably expected to result in repayment or restoration to current status in the near future. A loan is considered delinquent when a payment has not been made by the contractual due date. Interest income previously accrued but not collected at the date a loan is placed on nonaccrual status is reversed against interest income. Cash receipts on a nonaccrual loan are applied to principal and interest in accordance with its contractual terms unless full payment of principal is not expected, in which case cash receipts, whether designated as principal or interest, are applied as a reduction of the carrying value of the loan. A nonaccrual loan is generally returned to accrual status when principal and interest payments are current, full collectability of principal and interest is reasonably assured, and a consistent record of performance has been demonstrated.
The allowance for losses on loans represents managements best estimate of losses probable in the existing loan portfolio. The allowance for losses on loans is increased by the provision for losses on loans charged to expense and reduced by loans charged off, net of recoveries. Loans are charged off in the period deemed uncollectible, based on managements analysis of expected cash flows (for non-collateral dependent loans) or collateral value (for collateral-dependent loans). Subsequent recoveries of loans previously charged off, if any, are credited to the allowance when received. The provision for losses on loans is determined based on managements assessment of several factors: reviews and evaluations of specific loans, changes in the nature and volume of the loan portfolio, current economic conditions and the related impact on specific borrowers and industry groups, historical loan loss experience, the level of classified and nonperforming loans, and the results of regulatory examinations.
Loans are considered impaired if, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Depending on a particular loans circumstances, we measure impairment of a loan based upon either the present value of expected future cash flows discounted at the loans effective interest rate, the loans observable market price, or the fair value of the collateral less estimated costs to sell if the loan is collateral dependent. Valuation allowances are established for collateral-dependent impaired loans for the difference between the loan amount and fair value of collateral less estimated selling costs. For impaired loans that are not collateral dependent, a valuation allowance is established for the difference between the loan amount and the present value of expected future cash flows discounted at the historical effective interest rate or the observable market price of the loan. Impairment losses are recognized through an increase in the required allowance for loan losses. Cash receipts on loans deemed impaired are recorded based on the loans separate status as a nonaccrual loan or an accrual status loan.
Some loans are accounted for in accordance with ASC 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality. For these loans (purchased credit impaired loans), the Company recorded a fair value discount and began carrying them at book value less their face amount (see Note 4). For these loans, we determined the contractual amount and timing of undiscounted principal and interest payments (the undiscounted contractual cash flows), and estimated the amount and timing of undiscounted expected principal and interest payments, including expected prepayments (the undiscounted expected cash flows). Under acquired impaired loan accounting, the difference between the undiscounted contractual cash flows and the undiscounted expected cash flows is the nonaccretable difference. The nonaccretable difference is an estimate of the loss exposure of principal and interest related to the purchased credit impaired loans, and the amount is subject to change over time based on the performance of the loans. The carrying value of purchased credit impaired loans is initially determined as the discounted expected cash flows. The excess of expected cash flows at acquisition over the initial fair value of the purchased credit impaired loans is referred to as the accretable yield and is recorded as interest income over the estimated life of the acquired loans using the level-yield method, if the timing and amount of the future cash flows is reasonably estimable. The carrying value of purchased credit impaired loans is reduced by payments received, both principal and interest, and increased by the portion of the accretable yield recognized as interest income. Subsequent to acquisition, the Company evaluates the purchased credit impaired loans on a quarterly basis. Increases in expected cash flows compared to those previously estimated increase the accretable yield and are recognized as interest income prospectively. Decreases in expected cash flows compared to those previously estimated decrease the accretable yield and may result in the establishment of an allowance for loan losses and a provision for loan losses. Purchased credit impaired loans are generally considered accruing and performing loans, as the loans accrete interest income over the estimated life of the loan when expected cash flows are reasonably estimable. Accordingly, purchased credit impaired loans that are contractually past due are still considered to be accruing and performing as long as there is an expectation that the estimated cash flows will be received. If the timing and amount of cash flows is not reasonably estimable, the loans may be classified as nonaccrual loans.
Loan fees and certain direct loan origination costs are deferred, and the net fee or cost is recognized as an adjustment to interest income using the interest method over the contractual life of the loans.
Foreclosed Real Estate. Real estate acquired by foreclosure or by deed in lieu of foreclosure is initially recorded at fair value less estimated selling costs. Costs for development and improvement of the property are capitalized.
Valuations are periodically performed by management, and an allowance for losses is established by a charge to operations if the carrying value of a property exceeds its estimated fair value, less estimated selling costs.
Loans to facilitate the sale of real estate acquired in foreclosure are discounted if made at less than market rates. Discounts are amortized over the fixed interest period of each loan using the interest method.
Premises and Equipment. Premises and equipment are stated at cost less accumulated depreciation and include expenditures for major betterments and renewals. Maintenance, repairs, and minor renewals are expensed as incurred. When property is retired or sold, the retired asset and related accumulated depreciation are removed from the accounts and the resulting gain or loss taken into income. The Company reviews property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If such assets are considered to be impaired, the impairment loss recognized is measured by the amount by which the carrying amount exceeds the fair value of the assets.
Depreciation is computed by use of straight-line and accelerated methods over the estimated useful lives of the assets. Estimated lives are generally seven to forty years for premises, three to seven years for equipment, and three years for software.
Intangible Assets. The Companys gross amount of intangible assets at June 30, 2013 and 2012 was $4.3 million and $4.5 million, respectively, with accumulated amortization of $3.3 million and $3.0 million, respectively. The Companys intangible assets are being amortized over periods ranging from five to fifteen years, with amortization expense expected to be approximately $417,000 in fiscal 2014, $383,000 in fiscal 2015, and $114,000 in fiscal 2016.
Income Taxes. The Company accounts for income taxes in accordance with income tax accounting guidance (ASC 740, Income Taxes). The income tax accounting guidance results in two components of income tax expense: current and deferred. Current income tax expense reflects taxes to be paid or refunded for the current period by applying the provisions of the enacted tax law to the taxable income or excess of deductions over revenues. The Company determines deferred income taxes using the liability (or balance sheet) method. Under this method, the net deferred tax asset or liability is based on the tax effects of the differences between the book and tax bases of assets and liabilities, and enacted changes in tax rates and laws are recognized in the period in which they occur.
Deferred income tax expense results from changes in deferred tax assets and liabilities between periods. Deferred tax assets are recognized if it is more likely than not, based on the technical merits, that the tax position will be realized or sustained upon examination. The term more likely than not means a likelihood of more than 50 percent; the terms examined and upon examination also include resolution of the related appeals or litigation processes, if any. A tax position that meets the more-likely-than-not recognition threshold is initially and subsequently measured as the largest amount of tax benefit that has a greater than 50 percent likelihood of being realized upon settlement with a taxing authority that has full knowledge of all relevant information. The determination of whether or not a tax position has met the more-likely-than-not recognition threshold considers the facts, circumstances, and information available at the reporting date and is subject to the managements judgment. Deferred tax assets are reduced by a valuation allowance if, based on the weight of evidence available, it is more likely than not that some portion or all of a deferred tax asset will not be realized.
The Company recognizes interest and penalties on income taxes as a component of income tax expense.
The Company files consolidated income tax returns with its subsidiary.
Incentive Plan. The Company accounts for its Management and Recognition Plan (MRP) and Equity Incentive Plan (EIP) in accordance with ASC 718, Share-Based Payment. Compensation expense is based on the market price of the Companys stock on the date the shares are granted and is recorded over the vesting period. The difference between the aggregate purchase price and the fair value on the date the shares are considered earned represents a tax benefit to the Company that is recorded as an adjustment to additional paid in capital.
Outside Directors Retirement. The Bank adopted a directors retirement plan in April 1994 for outside directors. The directors retirement plan provides that each non-employee director (participant) shall receive, upon termination of service on the Board on or after age 60, other than termination for cause, a benefit in equal annual installments over a five year period. The benefit will be based upon the product of the participants vesting percentage and the total Board fees paid to the participant during the calendar year preceding termination of service on the Board. The vesting percentage shall be determined based upon the participants years of service on the Board, whether before or after the reorganization date.
In the event that the participant dies before collecting any or all of the benefits, the Bank shall pay the participants beneficiary. No benefits shall be payable to anyone other than the beneficiary, and shall terminate on the death of the beneficiary.
Stock Options. Compensation cost is measured based on the grant-date fair value of the equity instruments issued, and recognized over the vesting period during which an employee provides service in exchange for the award.
Earnings Per Share. Basic earnings per share available to common stockholders is computed using the weighted-average number of common shares outstanding. Diluted earnings per share available to common stockholders includes the effect of all weighted-average dilutive potential common shares (stock options and warrants) outstanding during each year.
Comprehensive Income. Comprehensive income consists of net income and other comprehensive income, net of applicable income taxes. Other comprehensive income includes unrealized appreciation (depreciation) on available-for-sale securities, unrealized appreciation (depreciation) on available-for-sale securities for which a portion of an other-than-temporary impairment has been recognized in income, and changes in the funded status of defined benefit pension plans.
Treasury Stock. Treasury stock is stated at cost. Cost is determined by the first-in, first-out method.
Reclassification. Certain amounts included in the 2012 and 2011 consolidated financial statements have been reclassified to conform to the 2013 presentation. These reclassifications had no effect on net income.
The following paragraphs summarize the impact of new accounting pronouncements:
In July 2013, the Financial Accounting Standards Board (FASB) issued ASU 2013-10, "Inclusion of the Fed Funds Effective Swap Rate (or Overnight Index Swap Rate) as a Benchmark Interest Rate for Hedge Accounting Purposes, to allow the Fed Funds Effective Swap Rate to be used as a U.S. benchmark interest rate for hedge accounting purposes, in addition to the current benchmark rates of direct Treasury obligations of the U.S. government and LIBOR (London Interbank Offered Rate). The amendments will be effective on a prospective basis for new or newly-designated hedging relationships on July 17, 2013. Adoption is not expected to have a significant effect on the Company's consolidated financial statements.
In February 2013, the FASB issued ASU No. 2013-04, Obligations Resulting From Joint and Several Liability Agreements for Which the Total Amount of the Obligation is Fixed at the Reporting Date, to amend Topic 405, Liabilities, to provide guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this Update is fixed at the reporting date, expect for obligations addressed within existing guidance in U.S. GAAP. The guidance requires an entity to measure those obligations as the sum of the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors and any additional amount the entity expects to pay on behalf of its co-obligors. The guidance also requires an entity to disclose the nature and amount of the obligation as well as other information about the obligation. The ASU is effective for fiscal years beginning after December 31, 2013. Adoption of the ASU is not expected to have a significant effect on the Companys consolidated financial statements.
In February 2013, the FASB issued ASU No. 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, to amend Topic 220, Comprehensive Income, to improve the transparency of reporting reclassifications out of accumulated other comprehensive income. The amendments require an entity to present, either in the income statement or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income, but only if the amount reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety, an entity is required to cross-reference to other disclosures that provide additional detail about those amounts. This ASU will be effective for annual and interim periods beginning January 1, 2013. Adoption of the ASU is not expected to have a significant effect on the Company's consolidated financial statements.
In December 2011, the FASB issued ASU No. 2011-11, Disclosures About Offsetting Assets and Liabilities, to amend Topic 210, Balance Sheet, to enhance current disclosures and increase comparability of GAAP and International Financial Reporting Standards (IFRS) financial statements. Under the ASU, an entity is required to disclose both gross and net information about instruments and transactions eligible for offset in the balance sheet, as well as instruments and transactions subject to an agreement similar to a master netting agreement. In January 2013, the FASB issued ASU No. 2013-01, Clarifying the Scope of Disclosures About Offsetting Assets and Liabilities, to clarify the scope of transactions that are subject to offsetting, to specifically include only derivatives accounted for under Topic 815, repurchase and reverse repurchase agreements, and securities borrowing and lending transactions that are either offset or subject to an enforceable master netting arrangement. Both ASUs were effective for annual and interim periods beginning January 1, 2013. Adoption of the ASU is not expected to have a significant effect on the Company's consolidated financial statements. |
Note 4: Accounting For Certain Loans Acquired in A Transfer
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Jun. 30, 2013
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Note 4: Accounting For Certain Loans Acquired in A Transfer | NOTE 4: Accounting for Certain Loans Acquired in a Transfer
The Company acquired loans in a transfer during the fiscal year ended June 30, 2011. At acquisition, certain transferred loans evidenced deterioration of credit quality since origination and it was probable, at acquisition, that all contractually required payments would not be collected.
Loans purchased with evidence of credit deterioration since origination and for which it is probable that all contractually required payments will not be collected are considered to be credit impaired. Evidence of credit quality deterioration as of the purchase date may include information such as past-due and nonaccrual status, borrower credit scores and recent loan to value percentages. Purchased credit-impaired loans are accounted for under the accounting guidance for loans and debt securities acquired with deteriorated credit quality (ASC 310-30) and initially measured at fair value, which includes estimated future credit losses expected to be incurred over the life of the loan. Accordingly, an allowance for credit losses related to these loans is not carried over and recorded at the acquisition date. Management estimated the cash flows expected to be collected at acquisition using our internal risk models, which incorporate the estimate of current key assumptions, such as default rates, severity and prepayment speeds.
The carrying amount of those loans is included in the balance sheet amounts of loans receivable at June 30, 2013. The amount of these loans is shown below:
Accretable yield, or income expected to be collected, is as follows:
During the fiscal years ended June 30, 2013 and 2012, the Company increased the allowance for the loan losses by a charge to the income statement of $181,000 and $381,000, respectively, related to these purchased credit impaired loans. During the same periods, allowance for loan losses of $5,000 and $105,000, respectively, was reversed.
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Note 2: Available-for-sale Securities
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Note 2: Available-for-sale Securities | NOTE 2: Available-for-Sale Securities
The amortized cost, gross unrealized gains, gross unrealized losses and approximate fair value of securities available for sale consisted of the following:
The amortized cost and fair value of available-for-sale securities, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
The carrying value of investment and mortgage-backed securities pledged as collateral to secure public deposits and securities sold under agreements to repurchase amounted to $61.7 million and $64.5 million at June 30, 2013 and 2012, respectively.
No gains or losses resulted from sales of available-for-sale securities in 2013, 2012, or 2011.
With the exception of U.S. government agencies and corporations, the Company did not hold any securities of a single issuer, payable from and secured by the same source of revenue or taxing authority, the book value of which exceeded 10% of stockholders equity at June 30, 2013.
Certain investments in debt securities are reported in the financial statements at an amount less than their historical cost. Total fair value of these investments at June 30, 2013, was $37.4 million, which is approximately 46.8% of the Companys available for sale investment portfolio, as compared to $8.8 million or approximately 11.6% of the Companys available for sale investment portfolio at June 30, 2012. Except as discussed below, management believes the declines in fair value for these securities to be temporary.
The tables below show our investments gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at June 30, 2013 and 2012.
The unrealized losses on the Companys investments in U.S. government-sponsored enterprises, mortgage-backed securities, and obligations of state and political subdivisions were caused by increases in market interest rates. The contractual terms of these instruments do not permit the issuer to settle the securities at a price less than the amortized cost basis of the investments. Because the Company does not intend to sell the investments and it is not more likely than not the Company will be required to sell the investments before recovery of their amortized cost basis, which may be maturity, the Company does not consider these investments to be other-than-temporarily impaired at June 30, 2013.
Other securities. At June 30, 2013, there were four pooled trust preferred securities with an estimated fair value of $446,000 and unrealized losses of $1.1 million in a continuous unrealized loss position for twelve months or more. These unrealized losses were primarily due to the long-term nature of the pooled trust preferred securities, a lack of demand or inactive market for these securities, and concerns regarding the financial institutions that have issued the underlying trust preferred securities.
The June 30, 2013, cash flow analysis for three of these securities indicated it is probable the Company will receive all contracted principal and related interest projected. The cash flow analysis used in making this determination was based on anticipated default, recovery, and prepayment rates, and the resulting cash flows were discounted based on the yield anticipated at the time the securities were purchased. Other inputs include the actual collateral attributes, which include credit ratings and other performance indicators of the underlying financial institutions, including profitability, capital ratios, and asset quality. Assumptions for these three securities included prepayments by June 2014 by all fixed-rate issuers of asset size greater than $15 billion, and by all variable rate issuers with spreads of greater than 250 basis points, to account for the lack of favorable capital treatment under the Dodd-Frank regulatory reform bill; prepayments by June 2014 by smaller, profitable, and well-capitalized issuers with fixed rate coupons in excess of 8%; and other prepayments of 1% every year thereafter, to account for isolated prepayments; no recoveries on issuers currently in default; recoveries of 8 to 61 percent on currently deferred issuers within the next six months; new defaults of 2% annually for the next two years; annual defaults of 36 basis points thereafter; and recoveries of 10% of new defaults.
One of these three securities continues to receive cash interest payments in full and our cash flow analysis indicates that these payments are likely to continue. Because the Company does not intend to sell this security and it is not more-likely-than-not that the Company will be required to sell the security prior to recovery of its amortized cost basis, which may be maturity, the Company does not consider this investment to be other-than-temporarily impaired at June 30, 2013.
For the other two of these three securities, the Company is receiving principal-in-kind (PIK), in lieu of cash interest. These securities all allow, under the terms of the issue, for issuers to defer interest for up to five consecutive years. After five years, if not cured, the securities are considered to be in default and the trustee may demand payment in full of principal and accrued interest. Issuers are also considered to be in default in the event of the failure of the issuer or a subsidiary. Both deferred and defaulted issuers are considered non-performing, and the trustee calculates, on a quarterly or semi-annual basis, certain coverage tests prior to the payment of cash interest to owners of the various tranches of the securities. The tests must show that performing collateral is sufficient to meet requirements for senior tranches, both in terms of cash flow and collateral value, before cash interest can be paid to subordinate tranches. If the tests are not met, available cash flow is diverted to pay down the principal balance of senior tranches until the coverage tests are met, before cash interest payments to subordinate tranches may resume. The Company is receiving PIK for these two securities due to failure of the required coverage tests described above at senior tranche levels of these securities. The risk to holders of a tranche of a security in PIK status is that the pools total cash flow will not be sufficient to repay all principal and accrued interest related to the investment. The impact of payment of PIK to subordinate tranches is to strengthen the position of senior tranches, by reducing the senior tranches principal balances relative to available collateral and cash flow, while increasing principal balances, decreasing cash flow, and increasing credit risk to the tranches receiving PIK. For our securities in receipt of PIK, the principal balance is increasing, cash flow has stopped, and, as a result, credit risk is increasing. The Company expects these securities to remain in PIK status for a period of one to eight years. Despite these facts, because the Company does not intend to sell these two securities and it is not more-likely-than-not that the Company will be required to sell these two securities prior to recovery of their amortized cost bases, which may be maturity, the Company does not consider these investments to be other-than-temporarily impaired at June 30, 2013.
At December 31, 2008, analysis of the fourth pooled trust preferred security indicated other-than-temporary impairment (OTTI) and the Company performed further analysis to determine the portion of the loss that was related to credit conditions of the underlying issuers. The credit loss was calculated by comparing expected discounted cash flows based on performance indicators of the underlying assets in the security to the carrying value of the investment. The discounted cash flow was based on anticipated default and recovery rates, and resulting projected cash flows were discounted based on the yield anticipated at the time the security was purchased. Based on this analysis, the Company recorded an impairment charge of $375,000 for the credit portion of the unrealized loss for this trust preferred security. This loss established a new, lower amortized cost basis of $125,000 for this security, and reduced non-interest income for the second quarter and the twelve months ended June 30, 2009. At June 30, 2013, cash flow analyses showed it is probable the Company will receive all of the remaining cost basis and related interest projected for the security. The cash flow analysis used in making this determination was based similar inputs and factors as those described above. Assumptions for this security included prepayments by June 2014 by all fixed-rate issuers of asset size greater than $15 billion, and by all variable rate issuers with spreads of greater than 250 basis points, to account for the lack of favorable capital treatment under the Dodd-Frank regulatory reform bill; prepayments by June 2014 by smaller, profitable, and well-capitalized issuers with fixed rate coupons in excess of 8%; and other prepayments of 1% every year thereafter, to account for isolated prepayments; no recoveries on issuers currently in default; recoveries of 72% on currently deferred issuers within the next six months; no net new deferrals for the next two years; and annual defaults of 36 basis points (with 10% recoveries, lagged two years) thereafter. This security is in PIK status due to similar criteria and factors as those described above, with similar impact to the Company. This security is projected to remain in PIK status for a period of two years. Because the Company does not intend to sell this security and it is not more-likely-than-not the Company will be required to sell this security before recovery of its new, lower amortized cost basis, which may be maturity, the Company does not consider the remainder of the investment in this security to be other-than-temporarily impaired at June 30, 2013.
The Company does not believe any other individual unrealized loss as of June 30, 2013, represents OTTI. However, given the recent disruption in the financial markets, the Company may be required to recognize OTTI losses in future periods with respect to its available for sale investment securities portfolio. The amount and timing of any additional OTTI will depend on the decline in the underlying cash flows of the securities. Should the impairment of any of these securities become other-than-temporary, the cost basis of the investment will be reduced and the resulting loss recognized in the period the other-than-temporary impairment is identified.
Credit Losses Recognized on Investments. As described above, some of the Companys investments in trust preferred securities have experienced fair value deterioration due to credit losses, but are not otherwise other-than-temporarily impaired. During fiscal 2009, the Company adopted ASC 820, formerly FASB Staff Position 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. The following table provides information about the trust preferred security for which only a credit loss was recognized in income and other losses are recorded in other comprehensive income (loss) for the years ended June 30, 2013 and 2012.
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Note 3: Loans and Allowance For Loan Losses: Schedule of Debtor Troubled Debt Restructuring, Current Period (Tables)
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Schedule of Debtor Troubled Debt Restructuring, Current Period |
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Note 21: Condensed Parent Company Only Financial Statements
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Note 21: Condensed Parent Company Only Financial Statements | NOTE 21: Condensed Parent Company Only Financial Statements
The following condensed balance sheets, statements of income and comprehensive income and cash flows for Southern Missouri Bancorp, Inc. should be read in conjunction with the consolidated financial statements and the notes thereto:
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Note 2: Available-for-sale Securities: Schedule of Unrealized Loss On Investments Table (Tables)
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Schedule of Unrealized Loss On Investments Table | The tables below show our investments gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at June 30, 2013 and 2012.
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Note 3: Loans and Allowance For Loan Losses: Schedule of Loan Portfolio Aging Analysis (Tables)
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Schedule of Loan Portfolio Aging Analysis |
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Note 22: Quarterly Financial Data (unaudited): Schedule of Quarterly Financial Information (Tables)
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Schedule of Quarterly Financial Information |
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Note 11: Income Taxes: Schedule of Effective Income Tax Rate Reconciliation (Tables)
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Schedule of Effective Income Tax Rate Reconciliation |
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