UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
Amendment No. 1
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2010
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number: 0-22140
META FINANCIAL GROUP, INC. ®
(Exact name of registrant as specified in its charter)
Delaware |
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42-1406262 |
(State or other jurisdiction of |
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(I.R.S. Employer Identification No.) |
incorporation or organization) |
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121 East Fifth Street, Storm Lake, Iowa 50588
(Address of principal executive offices)
(712) 732-4117
(Registrants telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES x NO o
Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files). YES o NO o.
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. (Check one):
Large accelerated filer o |
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Accelerated filer o |
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Non-accelerated filer o |
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Smaller Reporting Company x |
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). o YES x NO
Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the latest practicable date.
Class: |
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Outstanding at May 13, 2010: |
Common Stock, $.01 par value |
|
3,082,362 Common Shares |
Explanatory Note
This Amendment No. 1 on Form 10-Q/A (Amendment No. 1) is being filed by Meta Financial Group, Inc. to amend the Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2010 filed with the Securities and Exchange Commission on May 11, 2010 (the Initial Report). The sole purpose for filing this Amendment No. 1 is to disclose developments in the legal proceedings discussed in Note 5 to the Notes to Condensed Consolidated Financial Statements in the Initial Report. No other changes have been made to the Initial Report, nor does Amendment No. 1 change previously reported financial results or other financial disclosures contained in the Initial Report. This Amendment No. 1 has not been updated to reflect events occurring after the filing of the Initial Report.
META FINANCIAL GROUP, INC.
FORM 10-Q/A
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Page No. |
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Part I. Financial Information |
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Item 1. |
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Financial Statements (Unaudited): |
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Condensed Consolidated Statements of Financial Condition as of March 31, 2010 and September 30, 2009 |
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1 |
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2 |
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3 |
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4 |
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Condensed Consolidated Statements of Cash Flows for the Six Months Ended March 31, 2010 and 2009 |
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5 |
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6 |
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Managements Discussion and Analysis of Financial Condition and Results of Operations |
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20 |
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34 |
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36 |
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37 |
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37 |
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37 |
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37 |
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37 |
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37 |
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37 |
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38 |
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META FINANCIAL GROUP, INC.
AND SUBSIDIARIES
Condensed Consolidated Statements of Financial Condition (Unaudited)
(Dollars in Thousands, Except Share and Per Share Data)
|
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March 31, 2010 |
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September 30, 2009 |
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ASSETS |
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Cash and cash equivalents |
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$ |
16,570 |
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$ |
6,168 |
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Federal funds sold |
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|
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9 |
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Investment securities available for sale |
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19,351 |
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17,566 |
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Mortgage-backed securities available for sale |
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483,931 |
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347,272 |
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Loans receivable - net of allowance for loan losses of $17,521 at March 31, 2010 and $6,993 at September 30, 2009 |
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382,519 |
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391,609 |
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Federal Home Loan Bank Stock, at cost |
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6,961 |
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7,050 |
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Accrued interest receivable |
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4,330 |
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4,344 |
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Bond insurance receivable |
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3,993 |
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4,118 |
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Premises, furniture, and equipment, net |
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21,251 |
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21,989 |
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Bank-owned life insurance |
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13,532 |
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13,270 |
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Foreclosed real estate and repossessed assets |
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1,247 |
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2,053 |
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Goodwill and intangible assets |
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2,720 |
|
2,215 |
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MPS accounts receivable |
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7,222 |
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5,381 |
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Other assets |
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18,283 |
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11,733 |
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Total assets |
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$ |
981,910 |
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$ |
834,777 |
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LIABILITIES AND SHAREHOLDERS EQUITY |
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LIABILITIES |
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Non-interest-bearing checking |
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$ |
590,684 |
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$ |
442,158 |
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Interest-bearing checking |
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20,076 |
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15,602 |
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Savings deposits |
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10,534 |
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10,001 |
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Money market deposits |
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33,252 |
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39,823 |
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Time certificates of deposit |
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124,830 |
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146,163 |
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Total deposits |
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779,376 |
|
653,747 |
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Advances from Federal Home Loan Bank |
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98,300 |
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74,800 |
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Other borrowings from Federal Reserve Bank |
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25,000 |
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Securities sold under agreements to repurchase |
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7,407 |
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6,686 |
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Subordinated debentures |
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10,310 |
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10,310 |
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Accrued interest payable |
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338 |
|
447 |
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Contingent liability |
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4,118 |
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4,268 |
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Accrued expenses and other liabilities |
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20,943 |
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12,174 |
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Total liabilities |
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920,792 |
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787,432 |
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SHAREHOLDERS EQUITY |
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Preferred stock, 800,000 shares authorized, no shares issued or outstanding |
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Common stock, $.01 par value; 5,200,000 shares authorized, 3,372,999 shares issued, 3,072,502 and 2,634,215 shares outstanding at March 31, 2010 and September 30, 2009, respectively |
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34 |
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30 |
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Additional paid-in capital |
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31,942 |
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23,551 |
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Retained earnings - substantially restricted |
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37,251 |
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31,626 |
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Accumulated other comprehensive (loss) |
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(2,746 |
) |
(1,838 |
) |
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Treasury stock, 300,497 and 323,784 common shares, at cost, at March 31, 2010 and September 30, 2009, respectively |
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(5,363 |
) |
(6,024 |
) |
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Total shareholders equity |
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61,118 |
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47,345 |
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Total liabilities and shareholders equity |
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$ |
981,910 |
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$ |
834,777 |
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See Notes to Condensed Consolidated Financial Statements.
META FINANCIAL GROUP, INC.
AND SUBSIDIARIES
Condensed Consolidated Statements of Operations (Unaudited)
(Dollars in Thousands, Except Share and Per Share Data)
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Three Months Ended |
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Six Months Ended |
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March 31, |
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March 31, |
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2010 |
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2009 |
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2010 |
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2009 |
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Interest and dividend income: |
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Loans receivable, including fees |
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$ |
7,376 |
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$ |
7,536 |
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$ |
14,101 |
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$ |
13,908 |
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Mortgage-backed securities |
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2,827 |
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2,797 |
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4,982 |
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4,805 |
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Other investments |
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180 |
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200 |
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364 |
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547 |
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10,383 |
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10,533 |
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19,447 |
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19,260 |
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Interest expense: |
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Deposits |
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949 |
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1,429 |
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2,037 |
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2,973 |
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FHLB advances and other borrowings |
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433 |
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860 |
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1,090 |
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1,882 |
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1,382 |
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2,289 |
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3,127 |
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4,855 |
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Net interest income |
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9,001 |
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8,244 |
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16,320 |
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14,405 |
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Provision for loan losses |
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9,478 |
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10,270 |
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14,169 |
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12,399 |
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Net interest income after provision for loan losses |
|
(477 |
) |
(2,026 |
) |
2,151 |
|
2,006 |
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Non-interest income: |
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Card fees |
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37,116 |
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32,988 |
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56,660 |
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48,086 |
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Gain on sale of securities available for sale, net |
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9 |
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1,854 |
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9 |
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Deposit fees |
|
190 |
|
177 |
|
394 |
|
378 |
|
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Bank-owned life insurance income |
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132 |
|
131 |
|
262 |
|
258 |
|
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Loan fees |
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65 |
|
231 |
|
178 |
|
330 |
|
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Other income |
|
133 |
|
75 |
|
326 |
|
85 |
|
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Total non-interest income |
|
37,636 |
|
33,611 |
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59,674 |
|
49,146 |
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Non-interest expense: |
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Card processing expense |
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14,095 |
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14,861 |
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22,447 |
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20,111 |
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Compensation and benefits |
|
8,861 |
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8,342 |
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17,532 |
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15,781 |
|
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Occupancy and equipment expense |
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2,159 |
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2,049 |
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4,234 |
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3,853 |
|
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Legal and consulting expense |
|
835 |
|
925 |
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1,826 |
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2,045 |
|
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Marketing |
|
483 |
|
474 |
|
838 |
|
812 |
|
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Data processing expense |
|
177 |
|
816 |
|
369 |
|
1,272 |
|
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Other expense |
|
2,256 |
|
2,183 |
|
4,423 |
|
4,328 |
|
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Total non-interest expense |
|
28,866 |
|
29,650 |
|
51,669 |
|
48,202 |
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Income before income tax expense |
|
8,293 |
|
1,935 |
|
10,156 |
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2,950 |
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|
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Income tax expense |
|
3,119 |
|
760 |
|
3,790 |
|
1,102 |
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Net income |
|
$ |
5,174 |
|
$ |
1,175 |
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$ |
6,366 |
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$ |
1,848 |
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Earnings per common share: |
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Basic |
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$ |
1.76 |
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$ |
0.45 |
|
$ |
2.29 |
|
$ |
0.71 |
|
Diluted |
|
$ |
1.74 |
|
$ |
0.45 |
|
$ |
2.26 |
|
$ |
0.71 |
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Dividends declared per common share: |
|
$ |
0.13 |
|
$ |
0.13 |
|
$ |
0.26 |
|
$ |
0.26 |
|
See Notes to Condensed Consolidated Financial Statements.
META FINANCIAL GROUP, INC.®
AND SUBSIDIARIES
Condensed Consolidated Statements of Comprehensive Income (Unaudited)
(Dollars in Thousands)
|
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Three Months Ended |
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Six Months Ended |
|
||||||||
|
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March 31, |
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March 31, |
|
||||||||
|
|
2010 |
|
2009 |
|
2010 |
|
2009 |
|
||||
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|
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Net income |
|
$ |
5,174 |
|
$ |
1,175 |
|
$ |
6,366 |
|
$ |
1,848 |
|
|
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|
|
|
|
|
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Other comprehensive income (loss): |
|
|
|
|
|
|
|
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|
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Change in net unrealized gains (losses) on securities available for sale |
|
1,525 |
|
(1,243 |
) |
(3,301 |
) |
(196 |
) |
||||
Gains realized in net income |
|
|
|
9 |
|
1,854 |
|
9 |
|
||||
|
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1,525 |
|
(1,234 |
) |
(1,447 |
) |
(187 |
) |
||||
Deferred income tax effect |
|
569 |
|
(460 |
) |
(539 |
) |
(70 |
) |
||||
Total other comprehensive income (loss) |
|
956 |
|
(774 |
) |
(908 |
) |
(117 |
) |
||||
Total comprehensive income |
|
$ |
6,130 |
|
$ |
401 |
|
$ |
5,458 |
|
$ |
1,731 |
|
See Notes to Condensed Consolidated Financial Statements.
META FINANCIAL GROUP, INC.®
AND SUBSIDIARIES
Condensed Consolidated Statements of Changes in Shareholders Equity (Unaudited)
For the Six Months Ended March 31, 2010 and 2009
(Dollars in Thousands, Except Share and Per Share Data)
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Accumulated |
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|
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Other |
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|
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Additional |
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Comprehensive |
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Total |
|
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Common |
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Paid-in |
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Retained |
|
(Loss), |
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Treasury |
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Shareholders |
|
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|
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Stock |
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Capital |
|
Earnings |
|
Net of Tax |
|
Stock |
|
Equity |
|
||||||
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|
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|
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|
||||||
Balance, September 30, 2008 |
|
$ |
30 |
|
$ |
23,058 |
|
$ |
34,442 |
|
$ |
(5,022 |
) |
$ |
(6,775 |
) |
$ |
45,733 |
|
|
|
|
|
|
|
|
|
|
|
|
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|
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Cash dividends declared on common stock ($.26 per share) |
|
|
|
|
|
(675 |
) |
|
|
|
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(675 |
) |
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|
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|
|
|
|
|
|
|
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|
||||||
Stock compensation |
|
|
|
290 |
|
|
|
|
|
|
|
290 |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Change in net unrealized losses on securities available for sale |
|
|
|
|
|
|
|
(117 |
) |
|
|
(117 |
) |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net income for six months ended March 31, 2009 |
|
|
|
|
|
1,848 |
|
|
|
|
|
1,848 |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Balance, March 31, 2009 |
|
$ |
30 |
|
$ |
23,348 |
|
$ |
35,615 |
|
$ |
(5,139 |
) |
$ |
(6,775 |
) |
$ |
47,079 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Balance, September 30, 2009 |
|
$ |
30 |
|
$ |
23,551 |
|
$ |
31,626 |
|
$ |
(1,838 |
) |
$ |
(6,024 |
) |
$ |
47,345 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Cash dividends declared on common stock ($.26 per share) |
|
|
|
|
|
(741 |
) |
|
|
|
|
(741 |
) |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Issuance of 415,000 common shares from the sales of equity securities |
|
4 |
|
8,571 |
|
|
|
|
|
|
|
8,575 |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Issuance of 23,287 common shares from treasury stock due to issuance of restricted stock and exercise of stock options |
|
|
|
(271 |
) |
|
|
|
|
661 |
|
390 |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Stock compensation |
|
|
|
91 |
|
|
|
|
|
|
|
91 |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Change in net unrealized losses on securities available for sale |
|
|
|
|
|
|
|
(908 |
) |
|
|
(908 |
) |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net income for six months ended March 31, 2010 |
|
|
|
|
|
6,366 |
|
|
|
|
|
6,366 |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Balance, March 31, 2010 |
|
$ |
34 |
|
$ |
31,942 |
|
$ |
37,251 |
|
$ |
(2,746 |
) |
$ |
(5,363 |
) |
$ |
61,118 |
|
See Notes to Condensed Consolidated Financial Statements.
META FINANCIAL GROUP, INC.®
AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows (Unaudited)
(Dollars in Thousands)
|
|
Six Months Ended March 31, |
|
||||
|
|
2010 |
|
2009 |
|
||
|
|
|
|
|
|
||
Cash flows from operating activities: |
|
|
|
|
|
||
Net income |
|
$ |
6,366 |
|
$ |
1,848 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
||
Depreciation, amortization and accretion, net |
|
6,053 |
|
1,983 |
|
||
Provision for loan losses |
|
14,169 |
|
12,399 |
|
||
Loss (gain) on sale of other |
|
5 |
|
(39 |
) |
||
(Gain) on sale of available for sale securities, net |
|
(1,854 |
) |
(9 |
) |
||
Net change in accrued interest receivable |
|
14 |
|
408 |
|
||
Net change in other assets |
|
(9,033 |
) |
1,254 |
|
||
Net change in accrued interest payable |
|
(109 |
) |
166 |
|
||
Net change in accrued expenses and other liabilities |
|
8,619 |
|
5,225 |
|
||
Net cash provided by operating activities |
|
24,230 |
|
23,235 |
|
||
|
|
|
|
|
|
||
Cash flow from investing activities: |
|
|
|
|
|
||
Purchase of securities available for sale |
|
(287,973 |
) |
(156,114 |
) |
||
Net change in federal funds sold |
|
9 |
|
4,972 |
|
||
Proceeds from sales of securities available for sale |
|
38,401 |
|
903 |
|
||
Proceeds from maturities and principal repayments of securities available for sale |
|
107,379 |
|
23,040 |
|
||
Loans purchased |
|
(392 |
) |
(7,054 |
) |
||
Net other change in loans receivable |
|
(4,653 |
) |
(408 |
) |
||
Proceeds from sales of foreclosed real estate |
|
807 |
|
|
|
||
Net change in Federal Home Loan Bank stock |
|
89 |
|
1,305 |
|
||
Proceeds from the sale of premises and equipment |
|
|
|
1 |
|
||
Purchase of premises and equipment |
|
(1,199 |
) |
(2,309 |
) |
||
Other, net |
|
539 |
|
70 |
|
||
Net cash used in investing activities |
|
(146,993 |
) |
(135,594 |
) |
||
|
|
|
|
|
|
||
Cash flows from financing activities: |
|
|
|
|
|
||
Net change in checking, savings, and money market deposits |
|
146,962 |
|
123,305 |
|
||
Net change in time deposits |
|
(21,333 |
) |
17,365 |
|
||
Net change in advances from Federal Home Loan Bank and other borrowings |
|
(1,500 |
) |
(31,075 |
) |
||
Net change in securities sold under agreements to repurchase |
|
721 |
|
16,911 |
|
||
Cash dividends paid |
|
(741 |
) |
(675 |
) |
||
Proceeds from issuance of equity securities |
|
8,575 |
|
|
|
||
Stock compensation |
|
91 |
|
290 |
|
||
Proceeds from exercise of stock options |
|
390 |
|
|
|
||
Net cash provided by financing activities |
|
133,165 |
|
126,121 |
|
||
|
|
|
|
|
|
||
Net change in cash and cash equivalents |
|
10,402 |
|
13,762 |
|
||
|
|
|
|
|
|
||
Cash and cash equivalents at beginning of period |
|
6,168 |
|
2,963 |
|
||
Cash and cash equivalents at end of period |
|
$ |
16,570 |
|
$ |
16,725 |
|
|
|
|
|
|
|
||
Supplemental disclosure of cash flow information |
|
|
|
|
|
||
Cash paid during the period for: |
|
|
|
|
|
||
Interest |
|
$ |
3,235 |
|
$ |
4,689 |
|
Income taxes |
|
64 |
|
2,055 |
|
||
|
|
|
|
|
|
||
Supplemental schedule of non-cash investing and financing activities: |
|
|
|
|
|
||
Loans transferred to foreclosed real estate |
|
$ |
|
|
$ |
3,775 |
|
See Notes to Condensed Consolidated Financial Statements.
META FINANCIAL GROUP, INC. ®
AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Unaudited)
NOTE 1. BASIS OF PRESENTATION
The interim unaudited condensed consolidated financial statements contained herein should be read in conjunction with the audited consolidated financial statements and accompanying notes to the consolidated financial statements for the fiscal year ended September 30, 2009 included in Meta Financial Group, Inc.s (Meta Financial or the Company) Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on December 10, 2009. Accordingly, footnote disclosures, which would substantially duplicate the disclosure contained in the audited consolidated financial statements, have been omitted.
The financial information of the Company included herein has been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial reporting and has been prepared pursuant to the rules and regulations for reporting on Form 10-Q and Rule 10-01 of Regulation S-X. Such information reflects all adjustments (consisting of normal recurring adjustments), that are, in the opinion of management, necessary for a fair presentation of the financial position and results of operations for the periods presented. The results of the interim period ended March 31, 2010, are not necessarily indicative of the results expected for the year ending September 30, 2010.
NOTE 2. ALLOWANCE FOR LOAN LOSSES
At March 31, 2010 the Companys allowance for loan losses was $17.5 million, an increase of $10.5 million from $7.0 million at September 30, 2009. During the six months ended March 31, 2010 the Company recorded a provision for loan losses of $14.2 million. $11.1 million related to the Companys Meta Payment Systems® (MPS) division, of which $10.5 million related to loan originations offered in collaboration with a nationally known tax preparation firm. This level of anticipated losses is within the financial model for this program. In addition to the Companys loss provision, the contractual arrangement with this firm provides for substantial, but not full, reimbursement of financial losses, if any. During the six months ended March 31, 2010, the Company recorded a retail bank provision in the amount of $3.1 million due to increases in the general reserves and in the historical loss rates for commercial real estate and multi-family loans. Two loans with commercial borrowers were partially charged off in the amount of $4.2 million during the second quarter of fiscal 2010. These two loans were previously reserved for and classified as doubtful.
During the three months ended March 31, 2010, the Company recorded a provision for loan losses in the amount of $9.5 million, consisting of $7.5 million related to the MPS tax loan portfolio and $2.0 million primarily related to increases in the general reserves and in the historical loss rates for commercial real estate and multi-family loans. The Companys total net charge-offs for the three and six months ended March 31, 2010 were $4.1 million and $3.6 million, respectively, due to recoveries exceeding charged-off loans by $0.5 million in the first fiscal quarter. Further discussion of this change in the allowance is included in Financial Condition - Non-performing Assets and Allowance for Loan Loss in Managements Discussion and Analysis.
NOTE 3. EARNINGS PER COMMON SHARE (EPS)
Basic EPS is computed by dividing income (loss) available to common shareholders (the numerator) by the weighted average number of common shares outstanding (the denominator) during the period. Shares issued during the period and shares reacquired during the period are weighted for the portion of the period that they were outstanding. Diluted EPS shows the dilutive effect of additional common shares issuable pursuant to stock option agreements.
A reconciliation of the income and common stock share amounts used in the computation of basic and diluted EPS for the three and six months ended March 31, 2010 and 2009 is presented below.
Three Months Ended March 31, |
|
2010 |
|
2009 |
|
||
(Dollars in Thousands, Except Share and Per Share Data) |
|
|
|
|
|
||
|
|
|
|
|
|
||
Earnings |
|
|
|
|
|
||
Net Income |
|
$ |
5,174 |
|
$ |
1,175 |
|
|
|
|
|
|
|
||
Basic EPS |
|
|
|
|
|
||
Weighted average common shares outstanding |
|
2,942,383 |
|
2,602,655 |
|
||
Less weighted average unallocated ESOP and nonvested shares |
|
(3,334 |
) |
(5,000 |
) |
||
Weighted average common shares outstanding |
|
2,939,049 |
|
2,597,655 |
|
||
|
|
|
|
|
|
||
Earnings Per Common Share |
|
|
|
|
|
||
Basic |
|
$ |
1.76 |
|
$ |
0.45 |
|
|
|
|
|
|
|
||
Diluted EPS |
|
|
|
|
|
||
Weighted average common shares outstanding for basic earnings per common share |
|
2,939,049 |
|
2,597,655 |
|
||
Add dilutive effect of assumed exercises of stock options, net of tax benefits |
|
33,710 |
|
|
|
||
Weighted average common and dilutive potential common shares outstanding |
|
2,972,759 |
|
2,597,655 |
|
||
|
|
|
|
|
|
||
Earnings Per Common Share |
|
|
|
|
|
||
Diluted |
|
$ |
1.74 |
|
$ |
0.45 |
|
Six Months Ended March 31, |
|
2010 |
|
2009 |
|
||
(Dollars in Thousands, Except Share and Per Share Data) |
|
|
|
|
|
||
|
|
|
|
|
|
||
Earnings |
|
|
|
|
|
||
Net Income |
|
$ |
6,366 |
|
$ |
1,848 |
|
|
|
|
|
|
|
||
Basic EPS |
|
|
|
|
|
||
Weighted average common shares outstanding |
|
2,788,866 |
|
2,602,655 |
|
||
Less weighted average unallocated ESOP and nonvested shares |
|
(3,334 |
) |
(5,000 |
) |
||
Weighted average common shares outstanding |
|
2,785,532 |
|
2,597,655 |
|
||
|
|
|
|
|
|
||
Earnings Per Common Share |
|
|
|
|
|
||
Basic |
|
$ |
2.29 |
|
$ |
0.71 |
|
|
|
|
|
|
|
||
Diluted EPS |
|
|
|
|
|
||
Weighted average common shares outstanding for basic earnings per common share |
|
2,785,532 |
|
2,597,655 |
|
||
Add dilutive effect of assumed exercises of stock options, net of tax benefits |
|
36,630 |
|
|
|
||
Weighted average common and dilutive potential common shares outstanding |
|
2,822,162 |
|
2,597,655 |
|
||
|
|
|
|
|
|
||
Earnings Per Common Share |
|
|
|
|
|
||
Diluted |
|
$ |
2.26 |
|
$ |
0.71 |
|
Stock options totaling 363,464 and 348,014 were not considered in computing diluted EPS for the three and six months ended March 31, 2010, respectively, because they were not dilutive. Stock options totaling 301,468 and 511,674 were not considered in computing diluted EPS for the three and six months ended March 31, 2009, respectively, because they were not dilutive. The calculation of the diluted EPS for the three and six months ended March 31, 2009 does not reflect the assumed exercise of 34,395 and 39,933 stock options, respectively, because the effect would have been anti-dilutive for the period.
NOTE 4. SECURITIES
The amortized cost, gross unrealized gains and losses and estimated fair values of available for sale securities as of March 31, 2010 and September 30, 2009 are presented below.
|
|
|
|
GROSS |
|
GROSS |
|
|
|
||||
|
|
AMORTIZED |
|
UNREALIZED |
|
UNREALIZED |
|
FAIR |
|
||||
|
|
COST |
|
GAINS |
|
(LOSSES) |
|
VALUE |
|
||||
|
|
(Dollars in Thousands) |
|
||||||||||
March 31, 2010 |
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Debt securities |
|
|
|
|
|
|
|
|
|
||||
Trust preferred and corporate securities |
|
$ |
25,810 |
|
$ |
|
|
$ |
(8,798 |
) |
$ |
17,012 |
|
Obligations of states and political subdivisions |
|
2,255 |
|
84 |
|
|
|
2,339 |
|
||||
Mortgage-backed securities |
|
479,596 |
|
5,950 |
|
(1,615 |
) |
483,931 |
|
||||
Total debt securities |
|
$ |
507,661 |
|
$ |
6,034 |
|
$ |
(10,413 |
) |
$ |
503,282 |
|
|
|
|
|
GROSS |
|
GROSS |
|
|
|
||||
|
|
AMORTIZED |
|
UNREALIZED |
|
UNREALIZED |
|
FAIR |
|
||||
|
|
COST |
|
GAINS |
|
(LOSSES) |
|
VALUE |
|
||||
|
|
(Dollars in Thousands) |
|
||||||||||
September 30, 2009 |
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Debt securities |
|
|
|
|
|
|
|
|
|
||||
Trust preferred and corporate securities |
|
$ |
25,805 |
|
$ |
|
|
$ |
(10,604 |
) |
$ |
15,201 |
|
Obligations of states and political subdivisions |
|
2,258 |
|
107 |
|
|
|
2,365 |
|
||||
Mortgage-backed securities |
|
339,706 |
|
7,662 |
|
(96 |
) |
347,272 |
|
||||
Total debt securities |
|
$ |
367,769 |
|
$ |
7,769 |
|
$ |
(10,700 |
) |
$ |
364,838 |
|
Gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in continuous unrealized loss position at March 31, 2010 and September 30, 2009 are as follows:
|
|
LESS THAN 12 MONTHS |
|
OVER 12 MONTHS |
|
TOTAL |
|
||||||||||||
|
|
Fair |
|
Unrealized |
|
Fair |
|
Unrealized |
|
Fair |
|
Unrealized |
|
||||||
|
|
Value |
|
(Losses) |
|
Value |
|
(Losses) |
|
Value |
|
(Losses) |
|
||||||
|
|
(Dollars in Thousands) |
|
||||||||||||||||
March 31, 2010 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Debt securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Trust preferred and corporate securities |
|
$ |
|
|
$ |
|
|
$ |
17,012 |
|
$ |
(8,798 |
) |
$ |
17,012 |
|
$ |
(8,798 |
) |
Mortgage-backed securities |
|
206,910 |
|
(1,615 |
) |
|
|
|
|
206,910 |
|
(1,615 |
) |
||||||
Total debt securities |
|
$ |
206,910 |
|
$ |
(1,615 |
) |
$ |
17,012 |
|
$ |
(8,798 |
) |
$ |
223,922 |
|
$ |
(10,413 |
) |
|
|
LESS THAN 12 MONTHS |
|
OVER 12 MONTHS |
|
TOTAL |
|
||||||||||||
|
|
Fair |
|
Unrealized |
|
Fair |
|
Unrealized |
|
Fair |
|
Unrealized |
|
||||||
|
|
Value |
|
(Losses) |
|
Value |
|
(Losses) |
|
Value |
|
(Losses) |
|
||||||
|
|
(Dollars in Thousands) |
|
||||||||||||||||
September 30, 2009 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Debt securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Trust preferred and corporate securities |
|
$ |
|
|
$ |
|
|
$ |
15,201 |
|
$ |
(10,604 |
) |
$ |
15,201 |
|
$ |
(10,604 |
) |
Mortgage-backed securities |
|
17,780 |
|
(37 |
) |
10,782 |
|
(59 |
) |
28,562 |
|
(96 |
) |
||||||
Total debt securities |
|
$ |
17,780 |
|
$ |
(37 |
) |
$ |
28,348 |
|
$ |
(10,663 |
) |
$ |
46,128 |
|
$ |
(10,700 |
) |
NOTE 5. COMMITMENTS AND CONTINGENCIES
At March 31, 2010 and September 30, 2009, the Company had outstanding commitments to originate and purchase loans totaling $39.9 million and $51.8 million, respectively. It is expected that outstanding loan commitments will be funded with existing liquid assets. At March 31, 2010, the Company had commitments to purchase securities available for sale totaling $63.5 million. There were no commitments to sell securities available for sale.
Legal Proceedings
Lawsuits against MetaBank involving the sale of purported MetaBank certificates of deposit continue to be addressed. Since its filing of Form 10-K for the year ended September 30, 2009, the matter of Methodist Hospitals of Dallas v. MetaBank and Meta Financial Group, Inc., filed in the 95th Judicial District Court of Dallas County, TX, Cause No. 08-06994, has been settled for a payment (see below) and the matter dismissed with prejudice. In all, nine cases have been filed to date, and of those nine, two have been dismissed, and three have been settled for payments that the Company deemed reasonable under the circumstances, including the costs of litigation. Of the four remaining cases, two are class action cases. On May 5, 2010, in one of these two cases, Guardian Angel Credit Union v. MetaBank et al., Case No. 08-cv-261-PB (USDC, District of NH), the court granted the plaintiffs motion to certify the class. The other two cases, not styled as class actions, are cases in which each plaintiff seeks recovery of $99,000 and other specified damages, in connection with a fraudulent CD. This matter was first disclosed in the Company's quarterly report for the period ended December 31, 2007, which stated that an employee of the Bank had sold fraudulent CDs for her own benefit. The unauthorized and illegal actions of the employee have since prompted a number of demands and lawsuits seeking recovery on the bogus CDs to be filed against the Bank, which have been disclosed in subsequent filings. The employee was prosecuted, convicted and is scheduled for sentencing in June, 2010. Notwithstanding the nature of her crimes, which were secreted from the Bank and its management, plaintiffs in the four remaining cases seek to impose liability on the Bank under a number of legal theories with respect to the remaining $3.8 million of bogus CDs that were issued by the former employee. The Bank and its insurer, which has assumed defense of the action and which is advancing defense costs subject to a reservation of rights, continue to vigorously contest liability in the remaining actions.
Cedar Rapids Bank & Trust Company v MetaBank, Case No. LACV007196. In a separate matter, on November 3, 2009, Cedar Rapids Bank & Trust Company (CRBT) filed a Petition against MetaBank in the Iowa District Court in and for Linn County claiming an unspecified amount of money damages against MetaBank arising from CRBTs participation in loans originated by MetaBank to companies owned or controlled by Dan Nelson. The complaint states that the Nelson companies eventually filed for bankruptcy and the loans, including CRBTs portion, were not fully repaid. Under a variety of theories, CRBT claims that MetaBank had material negative information about Dan Nelson, his companies and the loans that it did not share with CRBT prior to CRBT taking a participation interest in them. MetaBank believes that CRBTs loss of principal was limited to approximately $200,000, and in any event intends to vigorously defend its actions.
In addition, since the filing of the Companys Form 10-K for the year ended September 30, 2009, the matter of Parallel Communications, Inc et al v. MetaBank et al., filed in the United States District Court for the Southern District of South Dakota, Docket Number 09-4031, has been settled and the suit will be dismissed shortly.
Other than the matters set forth above, there are no other new material pending legal proceedings or updates to which the Company or its subsidiaries is a party other than ordinary routine litigation to their respective businesses.
NOTE 6. STOCK OPTION PLAN
The Company maintains the 2002 Omnibus Incentive Plan, which, among other things, provides for the awarding of stock options and nonvested (restricted) shares to certain officers and directors of the Company. Awards are granted by the Stock Option Committee of the Board of Directors based on the performance of the award recipients or other relevant factors.
In accordance with ASC 718, compensation expense for share based awards is recorded over the vesting period at the fair value of the award at the time of grant. The exercise price of options or fair value of nonvested shares
granted under the Companys incentive plans is equal to the fair market value of the underlying stock at the grant date. The Company assumes no projected forfeitures on its stock based compensation, since actual historical forfeiture rates on its stock based incentive awards has been negligible.
A summary of option activity for the six months ended March 31, 2010 is presented below:
|
|
|
|
|
|
Weighted |
|
|
|
||
|
|
|
|
Weighted |
|
Average |
|
|
|
||
|
|
Number |
|
Average |
|
Remaining |
|
Aggregate |
|
||
|
|
of |
|
Exercise |
|
Contractual |
|
Intrinsic |
|
||
|
|
Shares |
|
Price |
|
Term (Yrs) |
|
Value |
|
||
|
|
(Dollars in Thousands, Except Share and Per Share Data) |
|
||||||||
|
|
|
|
|
|
|
|
|
|
||
Options outstanding, September 30, 2009 |
|
577,921 |
|
$ |
23.74 |
|
7.12 |
|
$ |
1,836 |
|
Granted |
|
1,000 |
|
21.40 |
|
|
|
|
|
||
Exercised |
|
(20,434 |
) |
15.81 |
|
|
|
|
|
||
Forfeited or expired |
|
(19,454 |
) |
27.00 |
|
|
|
|
|
||
Options outstanding, March 31, 2010 |
|
539,033 |
|
$ |
23.89 |
|
6.64 |
|
$ |
2,231 |
|
|
|
|
|
|
|
|
|
|
|
||
Options exercisable, March 31, 2010 |
|
459,891 |
|
$ |
23.18 |
|
6.59 |
|
$ |
2,003 |
|
A summary of nonvested share activity for the six months ended March 31, 2010 is presented below:
|
|
Number of |
|
Weighted Average |
|
|
|
|
Shares |
|
Fair Value at Grant |
|
|
|
|
(Dollars in Thousands, Except Share and Per Share Data) |
|
|||
|
|
|
|
|
|
|
Nonvested shares outstanding, September 30, 2009 |
|
3,334 |
|
$ |
24.43 |
|
Granted |
|
3,600 |
|
23.01 |
|
|
Vested |
|
(3,600 |
) |
23.01 |
|
|
Forfeited or expired |
|
|
|
|
|
|
Nonvested shares outstanding, March 31, 2010 |
|
3,334 |
|
$ |
24.43 |
|
As of March 31, 2010, stock based compensation expense not yet recognized in income totaled $170,000 which is expected to be recognized over a weighted average remaining period of 0.85 years.
NOTE 7. SEGMENT INFORMATION
An operating segment is generally defined as a component of a business for which discrete financial information is available and whose results are reviewed by the chief operating decision-maker. Operating segments are aggregated into reportable segments if certain criteria are met. The Company has determined that it has two reportable segments. The first reportable segment, Traditional Banking, along with the second reportable segment, MPS, comprise the entirety of its banking subsidiary, MetaBank (the Bank). The Bank operates as a traditional community bank providing deposit, loan and other related products to individuals and small businesses, primarily in the communities where their offices are located. MPS provides a number of products and services to financial institutions and other businesses. These products and services include issuance of prepaid debit cards, sponsorship of ATMs into the debit networks, credit programs, ACH origination services, gift card programs, rebate programs, travel programs and tax related programs. The remaining grouping under the caption All Others consists of the operations of Meta Financial Group, Inc. and Meta Trust Company® and inter-segment eliminations. Transactions between affiliates, the resulting revenues of which are shown in the
intersegment revenue category, are conducted at market prices, meaning prices that would be paid if the companies were not affiliates. The following tables present segment data for the Company for the three and six months ended March 31, 2010 and 2009, respectively.
|
|
Traditional |
|
Meta Payment |
|
|
|
|
|
||||
|
|
Banking |
|
Systems® |
|
All Others |
|
Total |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Three Months Ended March 31, 2010 |
|
|
|
|
|
|
|
|
|
||||
Interest income |
|
$ |
5,944 |
|
$ |
4,445 |
|
$ |
(6 |
) |
$ |
10,383 |
|
Interest expense |
|
1,132 |
|
136 |
|
114 |
|
1,382 |
|
||||
Net interest income (loss) |
|
4,812 |
|
4,309 |
|
(120 |
) |
9,001 |
|
||||
Provision for loan losses |
|
2,000 |
|
7,478 |
|
|
|
9,478 |
|
||||
Non-interest income |
|
483 |
|
37,122 |
|
31 |
|
37,636 |
|
||||
Non-interest expense |
|
5,044 |
|
23,587 |
|
235 |
|
28,866 |
|
||||
Income (loss) before tax |
|
(1,749 |
) |
10,366 |
|
(324 |
) |
8,293 |
|
||||
Income tax expense (benefit) |
|
(673 |
) |
3,903 |
|
(111 |
) |
3,119 |
|
||||
Net income (loss) |
|
$ |
(1,076 |
) |
$ |
6,463 |
|
$ |
(213 |
) |
$ |
5,174 |
|
|
|
|
|
|
|
|
|
|
|
||||
Inter-segment revenue (expense) |
|
$ |
2,577 |
|
$ |
(2,577 |
) |
$ |
|
|
$ |
|
|
Total assets |
|
384,032 |
|
596,918 |
|
960 |
|
981,910 |
|
||||
Total deposits |
|
210,725 |
|
570,898 |
|
(2,247 |
) |
779,376 |
|
|
|
Traditional |
|
Meta Payment |
|
|
|
|
|
||||
|
|
Banking |
|
Systems® |
|
All Others |
|
Total |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Three Months Ended March 31, 2009 |
|
|
|
|
|
|
|
|
|
||||
Interest income |
|
$ |
7,126 |
|
$ |
3,378 |
|
$ |
29 |
|
$ |
10,533 |
|
Interest expense |
|
1,864 |
|
271 |
|
154 |
|
2,289 |
|
||||
Net interest income (loss) |
|
5,262 |
|
3,107 |
|
(125 |
) |
8,244 |
|
||||
Provision for loan losses |
|
4,173 |
|
6,097 |
|
|
|
10,270 |
|
||||
Non-interest income |
|
584 |
|
33,009 |
|
18 |
|
33,611 |
|
||||
Non-interest expense |
|
4,781 |
|
24,455 |
|
414 |
|
29,650 |
|
||||
Income (loss) before tax |
|
(3,108 |
) |
5,564 |
|
(521 |
) |
1,935 |
|
||||
Income tax expense (benefit) |
|
(1,167 |
) |
2,092 |
|
(165 |
) |
760 |
|
||||
Net income (loss) |
|
$ |
(1,941 |
) |
$ |
3,472 |
|
$ |
(356 |
) |
$ |
1,175 |
|
|
|
|
|
|
|
|
|
|
|
||||
Inter-segment revenue (expense) |
|
$ |
2,203 |
|
$ |
(2,203 |
) |
$ |
|
|
$ |
|
|
Total assets |
|
384,175 |
|
504,704 |
|
768 |
|
889,647 |
|
||||
Total deposits |
|
220,535 |
|
466,487 |
|
(380 |
) |
686,642 |
|
|
|
Traditional |
|
Meta Payment |
|
|
|
|
|
||||
|
|
Banking |
|
Systems® |
|
All Others |
|
Total |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Six Months Ended March 31, 2010 |
|
|
|
|
|
|
|
|
|
||||
Interest income |
|
$ |
11,608 |
|
$ |
7,825 |
|
$ |
14 |
|
$ |
19,447 |
|
Interest expense |
|
2,668 |
|
216 |
|
243 |
|
3,127 |
|
||||
Net interest income (loss) |
|
8,940 |
|
7,609 |
|
(229 |
) |
16,320 |
|
||||
Provision for loan losses |
|
3,100 |
|
11,069 |
|
|
|
14,169 |
|
||||
Non-interest income |
|
2,975 |
|
56,644 |
|
55 |
|
59,674 |
|
||||
Non-interest expense |
|
9,825 |
|
41,443 |
|
401 |
|
51,669 |
|
||||
Income (loss) before tax |
|
(1,010 |
) |
11,741 |
|
(575 |
) |
10,156 |
|
||||
Income tax expense (benefit) |
|
(389 |
) |
4,377 |
|
(198 |
) |
3,790 |
|
||||
Net income (loss) |
|
$ |
(621 |
) |
$ |
7,364 |
|
$ |
(377 |
) |
$ |
6,366 |
|
|
|
|
|
|
|
|
|
|
|
||||
Inter-segment revenue (expense) |
|
$ |
4,952 |
|
$ |
(4,952 |
) |
$ |
|
|
$ |
|
|
Total assets |
|
384,032 |
|
596,918 |
|
960 |
|
981,910 |
|
||||
Total deposits |
|
210,725 |
|
570,898 |
|
(2,247 |
) |
779,376 |
|
|
|
Traditional |
|
Meta Payment |
|
|
|
|
|
||||
|
|
Banking |
|
Systems® |
|
All Others |
|
Total |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Six Months Ended March 31, 2009 |
|
|
|
|
|
|
|
|
|
||||
Interest income |
|
$ |
12,997 |
|
$ |
6,205 |
|
$ |
58 |
|
$ |
19,260 |
|
Interest expense |
|
3,887 |
|
630 |
|
338 |
|
4,855 |
|
||||
Net interest income (loss) |
|
9,110 |
|
5,575 |
|
(280 |
) |
14,405 |
|
||||
Provision for loan losses |
|
5,023 |
|
7,376 |
|
|
|
12,399 |
|
||||
Non-interest income |
|
972 |
|
48,133 |
|
41 |
|
49,146 |
|
||||
Non-interest expense |
|
9,649 |
|
37,866 |
|
687 |
|
48,202 |
|
||||
Income (loss) before tax |
|
(4,590 |
) |
8,466 |
|
(926 |
) |
2,950 |
|
||||
Income tax expense (benefit) |
|
(1,696 |
) |
3,122 |
|
(324 |
) |
1,102 |
|
||||
Net income (loss) |
|
$ |
(2,894 |
) |
$ |
5,344 |
|
$ |
(602 |
) |
$ |
1,848 |
|
|
|
|
|
|
|
|
|
|
|
||||
Inter-segment revenue (expense) |
|
$ |
4,076 |
|
$ |
(4,076 |
) |
$ |
|
|
$ |
|
|
Total assets |
|
384,175 |
|
504,704 |
|
768 |
|
889,647 |
|
||||
Total deposits |
|
220,535 |
|
466,487 |
|
(380 |
) |
686,642 |
|
NOTE 8. NEW ACCOUNTING PRONOUNCEMENTS
In June 2009, the FASB issued an accounting standard which amends current GAAP related to the accounting for transfers and servicing of financial assets and extinguishments of liabilities, including the removal of the concept of a qualifying special-purpose entity from GAAP. This new accounting standard also clarifies that a transferor must evaluate whether it has maintained effective control of a financial asset by considering its continuing direct or indirect involvement with the transferred financial asset. This accounting standard was subsequently codified into ASC Topic 860, Accounting for Transfers of Financial Assets. This accounting standard is effective as of the beginning of each reporting entitys first annual reporting period that begins after November 15, 2009, for interim periods within that first annual reporting period and for interim and annual reporting periods thereafter. The adoption of ASC Topic 860 is not anticipated to have a material impact on the Companys consolidated financial statements.
In June 2009, the FASB issued an accounting standard which will require a qualitative rather than quantitative analysis to determine the primary beneficiary of a variable interest entity for consolidation purposes. This accounting standard requires an enterprise to perform an analysis and ongoing reassessments to determine
whether the enterprises variable interest or interests give it a controlling financial interest in a variable interest entity and amends certain guidance for determining whether an entity is a variable interest entity. It also requires enhanced disclosures that will provide users of financial statements with more transparent information about an enterprises involvement in a variable interest entity. This accounting standard was subsequently codified into ASC Topic 810, Improvements for Financial Reporting by Enterprises Involved with Variable Interest Entities. This accounting standard is effective as of the beginning of each reporting entitys first annual reporting period that begins after November 15, 2009, and for all interim reporting periods after that. The adoption of ASC Topic 810 is not anticipated to have a material impact on the Companys consolidated financial statements.
In January 2010, the FASB issued an accounting standard which requires (i) fair value disclosures by each class of assets and liabilities (generally a subset within a line item as presented in the statement of financial position) rather than a major category, (ii) for items measured at fair value on a recurring basis, the amounts of significant transfers between Levels 1 and 2, and transfers into and out of Level 3, and the reasons for those transfers, including separate discussion related to the transfers into each level apart from transfers out of each level, and (iii) gross presentation of the amounts of purchases, sales, issuances and settlements in the Level 3 recurring measurement reconciliation. Additionally, the standard clarifies that a description of the valuation technique(s) and inputs used to measure fair values is required for both recurring and nonrecurring fair value measurements. Also, if a valuation technique has changed, entities should disclose that change and the reason for the changes. This accounting standard was subsequently codified into ASC Topic 820, Improving Disclosures about Fair Value Measurements. Disclosures other than the gross presentation changes in the Level 3 reconciliation are effective for the first reported period beginning after December 31, 2009. The requirement to present the Level 3 activity of purchases, sales, issuances, and settlements on a gross basis will be effective for fiscal years beginning after December 15, 2010 and is not anticipated to have a material impact on the Companys consolidated financial statements.
NOTE 9. FAIR VALUE MEASUREMENTS
Effective October 1, 2008, the Company adopted the provisions of ASC 820, Fair Value Measurements. ASC 820 defines fair value, establishes a framework for measuring the fair value of assets and liabilities using a hierarchy system and expands disclosures about fair value measurement. It clarifies that fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the market in which the reporting entity transacts.
The fair value hierarchy is as follows:
Level 1 Inputs Valuation is based upon quoted prices for identical instruments traded in active markets that the Company has the ability to access at measurement date.
Level 2 Inputs Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in active markets that are not active and model-based valuation techniques for which significant assumptions are observable in the market.
Level 3 Inputs Valuation is generated from model-based techniques that use significant assumptions not observable in the market and are used only to the extent that observable inputs are not available. These unobservable assumptions reflect the Companys own estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include use of option pricing models, discounted cash flow models and similar techniques.
Securities Available for Sale. Securities available for sale are recorded at fair value on a recurring basis. Fair value measurement is based upon quoted prices, if available. If quoted prices are not available, fair values are measured using an independent pricing service. Level 1 securities include those traded on an active exchange,
such as the New York Stock Exchange, as well as U.S. Treasury and other U.S. government and agency securities that are traded by dealers or brokers in active over-the-counter markets. The Company had no Level 1 securities at March 31, 2010. Level 2 securities include agency mortgage-backed securities and private collateralized mortgage obligations, municipal bonds and corporate debt securities.
The following table summarizes the assets of the Company for which fair values are determined on a recurring basis as of March 31, 2010.
|
|
Fair Value at March 31, 2010 |
|
||||||||||
(Dollars in Thousands) |
|
Total |
|
Level 1 |
|
Level 2 |
|
Level 3 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Securities available for sale |
|
$ |
503,282 |
|
$ |
|
|
$ |
503,282 |
|
$ |
|
|
Included in securities available for sale are trust preferred securities as follows:
At March 31, 2010
|
|
|
|
|
|
Unrealized |
|
S&P |
|
Moody |
|
|||
Issuer(1) |
|
Book Value |
|
Fair Value |
|
(Loss) |
|
Credit Rating |
|
Credit Rating |
|
|||
|
|
(Dollars in Thousands) |
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||
Key Corp. Capital I |
|
$ |
4,980 |
|
$ |
3,319 |
|
$ |
(1,661 |
) |
BB |
|
Baa3 |
|
Huntington Capital Trust II SE |
|
4,970 |
|
2,764 |
|
(2,206 |
) |
B |
|
Ba1 |
|
|||
Bank Boston Capital Trust IV (2) |
|
4,961 |
|
3,441 |
|
(1,520 |
) |
BB |
|
Baa3 |
|
|||
Bank America Capital III |
|
4,949 |
|
3,438 |
|
(1,511 |
) |
BB |
|
Baa3 |
|
|||
PNC Capital Trust |
|
4,950 |
|
3,800 |
|
(1,150 |
) |
BBB |