q33112.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549
 
FORM 10-Q

[ X]
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2012
or

[  ]
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: 001-33795
 
HOME FEDERAL BANCORP, INC.
(Exact name of registrant as specified in its charter)
 
 
Maryland
  
68-0666697
(State or other jurisdiction of incorporation
or organization)
  
(I.R.S. Employer
Identification Number)
     
500 12th Avenue South, Nampa, Idaho
   83651
(Address of principal executive offices)
    (Zip Code)
     
                                   Registrant’s telephone number, including area code:     (208) 466-4634
     
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 [   ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes [X] No [   ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
 
  Large accelerated filer   [   ]    Accelerated filer  [X] 
  Non-accelerated filer  [   ]    Smaller reporting company  [   ] 
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes [   ] No [X]

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:  Common Stock, $.01 par value per share, 15,702,640 shares outstanding as of May 1, 2012.


 
 
 


HOME FEDERAL BANCORP, INC.
FORM 10-Q
TABLE OF CONTENTS
 

 
PART I – FINANCIAL INFORMATION
     
 
ITEM 1.  FINANCIAL STATEMENTS
  2
     
 
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
 29 
     
 
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 46 
     
 
ITEM 4. CONTROLS AND PROCEDURES
 46 
     
PART II – OTHER INFORMATION  
     
 
ITEM 1. LEGAL PROCEEDINGS
 48 
     
 
ITEM 1A. RISK FACTORS
 48 
     
 
ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 48 
     
 
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
 48 
     
 
ITEM 4. MINE SAFETY DISCLOSURES
 48 
     
  ITEM 5. OTHER INFORMATION  48 
     
  SIGNATURES  50 
 
 
 
 

Item 1.  Financial Statements

HOME FEDERAL BANCORP, INC. AND SUBSIDIARY
            
CONSOLIDATED BALANCE SHEETS
            
(In thousands, except share data) (unaudited)
            
   
March 31,
    
December 31,
  
   
2012
    
2011
  
ASSETS
            
Cash and cash equivalents
   $ 140,517     $ 144,293  
Investments available-for-sale, at fair value
     412,669       399,877  
Loans and leases receivable, net of allowance for loan and lease
   losses of $13,739 and $14,171
     435,713       449,908  
Accrued interest receivable
     2,997       2,857  
Federal Deposit Insurance Corporation (“FDIC”)
indemnification receivable, net
     20,160       23,676  
Bank owned life insurance
     15,571       15,450  
Real estate owned and other repossessed assets (“REO”)
     15,965       19,827  
Federal Home Loan Bank (“FHLB”) stock, at cost
     17,717       17,717  
Property and equipment, net
     30,830       31,522  
Core deposit intangible
     2,935       3,086  
Other assets
     12,724       8,221  
TOTAL ASSETS
   $ 1,107,798     $ 1,116,434  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY
                
LIABILITIES
                
Deposit accounts:
                
Noninterest-bearing demand
   $ 129,950     $ 127,553  
Interest-bearing demand
     251,632       249,215  
Money market
     184,158       178,377  
Savings
     81,663       78,492  
Certificates
     251,329       272,462  
Total deposit accounts
     898,732       906,099  
                 
Advances by borrowers for taxes and insurance
     832       358  
Accrued interest payable
     197       219  
Repurchase agreements
     4,676       4,913  
Deferred compensation
     5,933       5,871  
Other liabilities
     5,594       7,704  
Total liabilities
     915,964       925,164  
                 
STOCKHOLDERS’ EQUITY
                
Serial preferred stock, $.01 par value; 10,000,000 authorized;
    issued and outstanding: none
     --       --  
Common stock, $.01 par value; 90,000,000 authorized; issued
and outstanding:
     157       157  
      Mar. 31, 2012 - 17,512,197 issued; 15,702,640 outstanding
                
      Dec. 31, 2011 - 17,512,197 issued; 15,664,706 outstanding
                
Additional paid-in capital
     143,485       143,280  
Retained earnings
     49,324       49,443  
Unearned shares issued to employee stock ownership plan
     (7,392 )     (7,581 )
Accumulated other comprehensive income
     6,260       5,971  
Total stockholders’ equity
     191,834       191,270  
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
   $ 1,107,798     $ 1,116,434  
                 
 
 
2
 
 
HOME FEDERAL BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data) (unaudited)
 
   
Three Months Ended
March 31,
  
Interest income:
   2012     2011  
Loans and leases
   $ 11,217     $ 8,395  
Investment securities
     2,204       2,256  
Other interest
     70       134  
Total interest income
     13,491       10,785  
Interest expense:
                
Deposits
     1,102       1,692  
FHLB advances and other borrowings
     21       558  
Total interest expense
     1,123       2,250  
Net interest income
     12,368       8,535  
Provision for loan losses
     (783 )     3,000  
Net interest income after provision for loan losses
     13,151       5,535  
                 
Noninterest income:
                
Service charges and fees
     2,107       2,232  
Gain on sale of loans
     1       187  
Gain on sale of securities
     535       --  
Gain (loss) on sale of fixed assets and repossessed assets
     220       (52 )
FDIC indemnification (recovery)
     (819 )     2,850  
Accretion (impairment) of FDIC indemnification asset
     (3,343 )     649  
Other
     192       228  
Total noninterest income
     (1,107 )     6,094  
                 
Noninterest expense:
                
Compensation and benefits
     6,137       7,181  
Occupancy and equipment
     1,563       1,877  
Data processing
     1,005       950  
Advertising
     154       262  
Postage and supplies
     306       349  
Professional services
     639       1,036  
Insurance and taxes
     521       1,026  
Amortization of intangibles
     152       186  
Provision for REO
     107       357  
Other
     376       499  
Total noninterest expense
     10,960       13,723  
                 
Income (loss) before income taxes
     1,084       (2,094 )
                 
Income tax provision (benefit)
     382       (892 )
Net income (loss)
   $ 702     $ (1,202 )
                 
Earnings (loss) per common share:
          
Basic
   $ 0.05     $ (0.08 )
Diluted
     0.05       (0.08 )
                 
Weighted average number of shares outstanding:
                
Basic
     14,771,849       15,648,721  
Diluted
     14,771,849       15,648,721  
                 
Dividends declared per share:
   $ 0.055     $ 0.055  


See accompanying notes.
 
3
 

 
HOME FEDERAL BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF COMPREHENSIVE
INCOME (LOSS)  (In thousands) (unaudited)
 
   
Three Months Ended
March 31,
  
    2012     2011  
Net income (loss)
   $ 702     $ (1,202 )
                 
Other comprehensive income:
                
                 
Change in unrealized holding gain on investments
     available-for-sale, net of taxes of $393 and $48,
     respectively
     616       75  
Adjustment for realized gains on sales of investments,
     net of taxes of  ($208) and $0, respectively
     (327 )     --  
                 
Other comprehensive income
     289       75  
Comprehensive income (loss)
   $ 991     $ (1,127 )
                 



See accompanying notes.
 

 
4
 


HOME FEDERAL BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(In thousands, except share data) (Unaudited)

         
Additional
 Paid-In
Capital
  
Retained
Earnings
  
Unearned
Shares
Issued to
ESOP
  
Accumulated
Other
Comprehensive
Income (Loss)
  
Total
 
Common Stock
          
 
Shares
  
Amount
          
                           
Balance at January 1, 2012
15,664,706
  
$    157
  
$143,280
  
$49,443
  
$(7,581)
  
$    5,971
  
$191,270 
                           
Restricted stock issued, net of forfeitures
       43,534
      
    (4)
              
     (4)
ESOP shares committed to be released
        
  13
      
189
      
     202 
Share-based compensation
        
   251
              
     251 
Stock repurchase
         (5,600)
  
         --
  
      (55)
              
       (55)
Dividends paid ($0.055 per share)
            
      (821)
          
         (821)
                           
Net income
            
702
          
     702 
Other comprehensive income
                    
289
  
     289 
                           
Balance at March 31, 2012
15,702,640
  
$    157
  
$143,485
  
$49,324
  
$(7,392)
  
$    6,260
  
$191,834 
                              


See accompanying notes.
 
5
 


HOME FEDERAL BANCORP, INC. AND SUBSIDIARY
      
CONSOLIDATED STATEMENTS OF CASH FLOWS
      
(In thousands) (unaudited)
      
   
Three Months Ended
March 31,
  
   
2012
    
2011
  
CASH FLOWS FROM OPERATING ACTIVITIES:
            
Net income (loss)
   $ 702     $ (1,202 )
Adjustments to reconcile net income (loss) to cash provided by operating activities:
                
Depreciation and amortization
     780       538  
Amortization of core deposit intangible
     151       186  
Impairment (accretion) of FDIC indemnification receivable
     3,343       (649 )
Net amortization of premiums and discounts on investments
     1,327       1,588  
Gain on sale of loans, net
     (1 )     (187 )
Gain on sale of securities available-for-sale, net
     (535 )     --  
(Gain) loss on sale of fixed assets and repossessed assets, net
     (220 )     52  
ESOP shares committed to be released
     202       313  
Share based compensation expense
     251       220  
Provision for loan losses
     (783 )     3,000  
Valuation provision on real estate and other property owned
     107       357  
Accrued deferred compensation expense, net
     62       24  
Net deferred loan fees
     (25 )     20  
Deferred income tax (provision) benefit
     (2,011 )     773  
Proceeds from sale of loans held for sale
     1       6,239  
Originations of loans held for sale
     --       (3,460 )
Net increase in cash surrender value of bank owned life insurance
     (120 )     (101 )
Change in assets and liabilities:
                
Interest receivable
     (140 )     (131 )
Other assets
     (2,520 )     (1,673 )
Interest payable
     (22 )     (88 )
Other liabilities
     (2,114 )     (4,130 )
Net cash provided from (used by) operating activities
     (1,565 )     1,689  
                 
CASH FLOWS FROM INVESTING ACTIVITIES:
                
Principal repayments, maturities and calls of securities available-for-sale
     23,853       31,004  
Proceeds from sales of securities available-for-sale
     25,712       --  
Purchase of securities available–for-sale
     (62,676 )     (46,078 )
Reimbursement of loan losses under loss share agreement
     636       --  
Net decrease in loans
     11,910       30,746  
Proceeds from sales of fixed assets and repossessed assets
     6,411       7,822  
Purchases of property and equipment
     (50 )     (661 )
Net cash provided from investing activities
     5,796       22,833  
                 
CASH FLOWS FROM FINANCING ACTIVITIES:
                
Net decrease in deposits
     (7,367 )     (31,753 )
Net decrease in advances by borrowers for taxes and insurance
     474       467  
Repayment of FHLB borrowings
     --       (3,998 )
Net decrease in securities sold under obligation to repurchase
     (238 )     (3,069 )
Proceeds from exercise of stock options
     --       307  
Repurchases of common stock
     (55 )     (2,140 )
Dividends paid
     (821 )     (862 )
Net cash used by financing activities
     (8,007 )     (41,048 )
NET DECREASE IN CASH AND CASH EQUIVALENTS
     (3,776 )     (16,526 )
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
     144,293       212,246  
CASH AND CASH EQUIVALENTS, END OF PERIOD
   $ 140,517     $ 195,720  

(Continued)

 
6
 

HOME FEDERAL BANCORP, INC. AND SUBSIDIARY
      
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
      
(In thousands) (unaudited)
      
   
Three Months Ended
March 31,
  
   
2012
    
2011
  
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
            
Cash paid (received) during the period for:
            
Interest
   $ 1,145     $ 2,338  
Taxes
     4,914       (110 )
                 
NONCASH INVESTING AND FINANCING ACTIVITIES:
                
Acquisition of real estate owned and other assets in settlement of loans
   $ 3,086     $ 8,311  
Fair value adjustment to securities available-for-sale, net of taxes
     289       75  




See accompanying notes.
 
7
 

HOME FEDERAL BANCORP, INC. AND SUBSIDIARY
SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Note 1 - Basis of Presentation

The consolidated financial statements presented in this report include the accounts of Home Federal Bancorp, Inc., a Maryland corporation (the “Company”), and its wholly-owned subsidiary, Home Federal Bank (the “Bank”), which is a state-chartered commercial bank headquartered in Nampa, Idaho.  As used throughout this report, the term the “Company” refers to Home Federal Bancorp and its consolidated subsidiary, unless the context otherwise requires.

The consolidated financial statements of the Company have been prepared in conformity with U.S. generally accepted accounting principles for interim financial information and are unaudited. All significant intercompany transactions and balances have been eliminated. In the opinion of the Company’s management, all adjustments consisting of normal recurring adjustments necessary for a fair presentation of the financial condition and results of operations for the interim periods included herein have been made. Operating results for the three month period ended March 31, 2012, are not necessarily indicative of the results that may be expected for future periods.

On January 24, 2012, the Company reported its decision to change its fiscal year end to December 31 from a fiscal year ending on September 30. This change in fiscal year end makes the Company’s and the Bank’s year-end coincide with the regulatory reporting periods now effective with the Company’s reorganization to a bank holding company and the Bank’s conversion to a commercial bank that occurred on May 31, 2011. As a result of the change in fiscal year, the Company filed a transition report on Form 10-QT covering the transition period from October 1, 2011 to December 31, 2011. References the Company makes to a particular year (for example, 2010) in this report applies to the Company’s fiscal year and not the calendar year, unless otherwise noted.

On July 30, 2010, the Bank entered into a purchase and assumption agreement with the FDIC to assume all of the deposits and acquire certain assets of LibertyBank, headquartered in Eugene, Oregon (the “LibertyBank Acquisition”). In August 2009, the Bank entered into a purchase and assumption agreement with the FDIC to assume all of the deposits and certain assets of Community First Bank, headquartered in Prineville, Oregon (the “CFB Acquisition”).  All of the loans purchased in the CFB Acquisition and the majority of loans and leases purchased in the LibertyBank Acquisition are included under the loss sharing agreements with the FDIC and are referred to as “covered loans.”  All real estate owned and repossessed assets (“REO”) acquired in the CFB Acquisition and the LibertyBank Acquisition are also included in the loss sharing agreements and are referred to as “covered REO.”  The covered loans and covered REO are collectively referred to as “covered assets.” Loans and foreclosed and repossessed assets not subject to loss sharing agreements with the FDIC are referred to as “noncovered loans” or “noncovered assets.”

Certain information and note disclosures normally included in the Company’s annual consolidated financial statements have been condensed or omitted. Therefore, these consolidated financial statements and notes thereto should be read in conjunction with the audited financial statements and notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2011 (“2011 Form 10-K”), filed with the Securities and Exchange Commission (“SEC”) on December 14, 2011.

Certain reclassifications have been made to prior year’s financial statements in order to conform to the current year presentation. The reclassifications had no effect on previously reported net income (loss) or equity.

Note 2 - Recent Accounting Pronouncements

In December 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2011-12, Comprehensive Income (Topic 220) – Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05. ASU 2011-12 defers changes in ASU 2011-05 that relate to the presentation of reclassification adjustments to allow the FASB time to redeliberate whether to require presentation of such adjustments on the face of the financial statements to show the effects of reclassifications out of accumulated other comprehensive income on the components of net income and other comprehensive income. ASU 2011-12 allows entities to continue to
 
 
 
 
 
8
 
report reclassifications out of accumulated other comprehensive income consistent with the presentation requirements in effect before ASU 2011-05. All other requirements in ASU 2011-05 are not affected by ASU 2011-12.  ASU 2011-12 did not have a significant impact on the Company’s Consolidated Financial Statements.

In May 2011, the FASB issued ASU 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs (International Financial Reporting Standards).  This guidance is effective for the first interim or annual period beginning on or after December 15, 2011, and will be applied prospectively beginning in the period of adoption.  The amendments change the wording used to describe requirements for measuring fair value under U.S. GAAP to be more consistent with IFRSs.  The adoption of this guidance is not expected to have a material effect on the Company’s Consolidated Financial Statements.

Note 3 - Earnings (Loss) Per Share

The Company has granted stock compensation awards with non-forfeitable dividend rights, which are considered participating securities. Accordingly, earnings (loss) per share (“EPS”) is computed using the two-class method as required by ASC 260-10-45. Basic EPS is computed by dividing net income (or loss) allocated to common stock by the weighted average number of common shares outstanding during the period which excludes the participating securities. Diluted EPS includes the dilutive effect of additional potential common shares from stock compensation awards, but excludes awards considered participating securities. ESOP shares are not considered outstanding for EPS until they are committed to be released. The following table presents the computation of basic and diluted EPS for the periods indicated (in thousands, except share and per share data):

   
Three Months Ended
March 31,
  
   
2012
    
2011
  
             
Net income (loss)
   $ 702     $ (1,202 )
Allocated to participating securities
     (7 )     12  
                 
Net income (loss) allocated to common shareholders
   $ 695     $ (1,190 )
                 
Weighted average common shares outstanding, gross
     15,672,016       16,641,011  
Less:  Average unearned ESOP shares
     (758,941 )     (837,349 )
Less:  Average participating securities
     (141,226 )     (154,941 )
Weighted average common shares outstanding, net
     14,771,849       15,648,721  
                 
Net effect of dilutive restricted stock
     --       --  
                 
Weighted average shares and common stock equivalents
     14,771,849       15,648,721  
                 
Income (loss) per common share:
                
Basic
   $ 0.05     $ (0.08 )
Diluted
     0.05       (0.08 )
                 
Options excluded from the calculation due to their anti-
    dilutive effect on EPS
     1,002,233       895,460  


 
9
 


Note 4 - Investment securities

Investment securities available-for-sale consisted of the following at the dates indicated (dollars in thousands):

   
Amortized
Cost
    
Gross
Unrealized
Gains
    
Gross
Unrealized
Losses
    
Fair Value
    
Percent of
Total
  
March 31, 2012
                              
Obligations of U.S. Government-sponsored
    enterprises (“GSE”)
   $ 65,558     $ 786     $ --     $ 66,344       16.1 %
U.S. Treasury securities
     19,890       --       (712 )     19,178       4.7  
Obligations of states and political subdivisions
     26,101       1,219       (32 )     27,288       6.6  
Corporate note, FDIC-guaranteed
     1,002       --       --       1,002       0.2  
Mortgage-backed securities, GSE-issued
     289,516       9,064       (50 )     298,530       72.3  
Mortgage-backed securities, private label
     348       --       (21 )     327       0.1  
                                         
Total
   $ 402,415     $ 11,069     $ (815 )   $ 412,669       100.0 %
                                         
December 31, 2011
                                        
Obligations of U.S. GSE
   $ 65,345     $ 650     $ (11 )   $ 65,984       16.5 %
Obligations of states and political subdivisions
     20,850       992       (33 )     21,809       5.4  
Corporate note, FDIC-guaranteed
     1,005       2       --       1,007       0.3  
Mortgage-backed securities, GSE-issued
     302,539       8,480       (253 )     310,766       77.7  
Mortgage-backed securities, private label
     357       --       (46 )     311       0.1  
                                         
Total
   $ 390,096     $ 10,124     $ (343 )   $ 399,877       100.0 %
                                         

For the quarter ended March 31, 2012, proceeds from sales of securities available-for-sale amounted to $25.7 million.  Gross realized gains on these sales totaled $535,000, partially offset by a tax provision of $209,000.  There were no gross realized losses.  We did not sell any securities during the quarter ended March 31, 2011.

The fair value of impaired securities, the amount of unrealized losses and the length of time these unrealized losses existed for the periods indicated were as follows (in thousands):

   
Less Than 12 Months
    
12 Months or Longer
    
Total
  
   
Fair Value
    
Unrealized
Losses
    
Fair Value
    
Unrealized
Losses
    
Fair Value
    
Unrealized
Losses
  
March 31, 2012
                                    
Obligations of U.S. GSE
   $ 38     $ --     $ --     $ --     $ 38     $ --  
U.S. Treasury securities
     19,178       (712 )     --       --       19,178       (712 )
Obligations of states and
    political subdivisions
     2,231       (32 )     --       --       2,231       (32 )
Mortgage-backed securities,
    GSE-issued
     12,458       (50 )     10       --       12,468       (50 )
Mortgage-backed securities,
    private label
     --       --       327       (21 )     327       (21 )
                                                 
Total
   $ 33,905     $ (794 )   $ 337     $ (21 )   $ 34,242     $ (815 )
                                                 
December 31, 2011
                                                
Obligations of U.S. GSE
   $ 1,739     $ (11 )   $ --     $ --     $ 1,739     $ (11 )
Obligations of states and
    political subdivisions
     2,802       (33 )     --       --       2,802       (33 )
Mortgage-backed securities,
    GSE-issued
     38,732       (245 )     4,010       (8 )     42,742       (253 )
Mortgage-backed securities,
     private label
     --       --       311       (46 )     311       (46 )
                                                 
Total
   $ 43,273     $ (289 )   $ 4,321     $ (54 )   $ 47,594     $ (343 )
                                                 
 

 
 
10
 
Management has evaluated these securities and has determined that the decline in fair value is not other than temporary. These securities have contractual maturity dates and management believes it is probable that principal and interest balances on these securities will be collected based on the performance, underwriting, credit support and vintage of the loans underlying the securities. However, continued deteriorating economic conditions may result in degradation in the performance of the loans underlying these securities in the future. The Company has the ability and intent to hold these securities for a reasonable period of time for a forecasted recovery of the amortized cost. The Company does not intend to sell these securities and it is not likely that the Company would be required to sell securities in an unrealized loss position before recovery of its cost basis.

The contractual maturities of investment securities available-for-sale are shown below (in thousands). Expected maturities may differ from the contractual maturities of such securities because borrowers have the right to prepay obligations without prepayment penalties.

   
March 31, 2012
    
December 31, 2011
  
   
Amortized
Cost
    
Fair Value
    
Amortized
Cost
    
Fair Value
  
                         
Due within one year
   $ 13,465     $ 13,504     $ 13,418     $ 13,455  
Due after one year through five years
     21,651       21,832       23,982       24,175  
Due after five years through ten years
     17,945       18,686       12,457       13,046  
Due after ten years
     59,490       59,790       37,343       38,124  
                                 
Mortgage-backed securities
     289,864       298,857       302,896       311,077  
                                 
    Total
   $ 402,415     $ 412,669     $ 390,096     $ 399,877  
                                 

As of March 31, 2012 and December 31, 2011, the Bank pledged investment securities for the following obligations (in thousands):

   
March 31, 2012
    
December 31, 2011
  
   
Amortized
Cost
    
Fair
 Value
    
Amortized
Cost
    
Fair
 Value
  
                         
FHLB borrowing line of credit
   $ 31,004     $ 33,510     $ 33,782     $ 36,460  
Federal Reserve Bank
     1,621       1,709       1,787       1,874  
Repurchase agreements
     6,776       7,162       7,458       7,858  
Deposits of municipalities and public units
     14,101       15,092       15,499       16,513  
Total
   $ 53,502     $ 57,473     $ 58,526     $ 62,705  
                                 


 
11
 


Note 5 - Loans Receivable and Allowance for Loan Losses

Loans receivable are summarized by collateral type as follows (dollars in thousands):

   
March 31, 2012
    
December 31, 2011
  
   
Amount
    
Percent
of Gross
    
Amount
    
Percent
of Gross
  
Real estate:
                        
One-to-four family residential
   $ 109,016       24.2 %   $ 115,403       24.8 %
Multifamily residential
     21,260       4.7       21,036       4.5  
Commercial real estate
     199,769       44.4       206,215       44.4  
Total real estate
     330,045       73.3       342,654       73.7  
                                 
Real estate construction:
                                
One-to-four family residential
     10,301       2.3       9,355       2.0  
Commercial and land development
     18,305       4.1       16,928       3.6  
Total real estate construction
     28,606       6.4       26,283       5.6  
                                 
Consumer:
                                
Home equity
     45,772       10.2       47,192       10.2  
Automobile
     930       0.2       946       0.2  
Other consumer
     4,143       0.9       4,580       1.0  
Total consumer
     50,845       11.3       52,718       11.4  
                                 
Commercial business
     39,103       8.7       40,953       8.8  
Leases
     1,515       0.3       2,159       0.5  
Gross loans
     450,114       100.0 %     464,767       100.0 %
                                 
Deferred loan fees
     (662 )             (688 )        
Allowance for loan losses
     (13,739 )             (14,171 )        
                                 
Loans receivable, net
   $ 435,713             $ 449,908          
                                 


 
12
 


The following tables present loans at their recorded investment; therefore, the balances in the tables below may differ from the loan portfolio table above. Recorded investment includes the unpaid principal balance or the carrying amount of loans plus accrued interest less charge offs and net deferred loan fees. Accrued interest on loans was $1.2 million and $1.3 million as of March 31, 2012 and December 31, 2011, respectively.

Delinquent and nonaccrual loans. The following tables present the recorded investment in nonperforming loans and an aging of performing loans by class as of March 31, 2012 and December 31, 2011 (in thousands):

   
March 31, 2012
  
   
Nonperforming Loans
                          
   
Nonaccrual
    
Past Due 90
or More
Days, Still
Accruing
    
Total
    
Loans
Delinquent
30-59 Days
    
Loans
Delinquent
 60-89 Days
    
Loans Not
Past Due
    
Total
Loans
  
Noncovered loans
                                          
Real estate:
                                          
One-to-four family residential
 $ 4,665     $ --     $ 4,665     $ 1,063     $ 123     $ 90,366     $ 96,217  
Multifamily residential
     --       --       --       --       --       14,979       14,979  
Commercial real estate
     10,862       --       10,862       --       --       132,224       143,086  
Total real estate
     15,527       --       15,527       1,063       123       237,569       254,282  
                                                         
Real estate construction:
                                                        
One-to-four family residential
 401       --       401       --       --       9,676       10,077  
Commercial real estate
     366       --       366       --       --       11,106       11,472  
Total real estate construction
 767       --       767       --       --       20,782       21,549  
                                                         
Consumer:
                                                        
Home equity
     497       --       497       52       32       32,633       33,214  
Automobile
     --       --       --       --       1       670       671  
Other consumer
     --       --       --       --       --       3,291       3,291  
Total consumer
     497       --       497       52       33       36,594       37,176  
                                                         
Commercial business
     381       --       381       --       --       9,492       9,873  
Leases
     --       --       --       --       --       228       228  
                                                         
Total noncovered loans
     17,172       --       17,172       1,115       156       304,665       323,108  
                                                         
Covered loans
                                                        
Real estate:
                                                        
One-to-four family residential
 670       --       670       --       --       12,221       12,891  
Multifamily residential
     --       --       --       --       --       6,281       6,281  
Commercial real estate
     5,166       --       5,166       409       --       51,108       56,683  
Total real estate
     5,836       --       5,836       409       --       69,610       75,855  
                                                         
Real estate construction:
                                                        
One-to-four family residential
 --       --       --       --       --       224       224  
Commercial real estate
     533       --       533       --       --       6,299       6,832  
Total real estate construction
 533       --       533       --       --       6,523       7,056  
                                                         
Consumer:
                                                        
Home equity
     208       --       208       --       --       12,457       12,665  
Automobile
     --       --       --       --       --       259       259  
Other consumer
     --       --       --       --       --       868       868  
Total consumer
     208       --       208       --       --       13,584       13,792  
                                                         
Commercial business
     682       --       682       --       --       28,824       29,506  
Leases
     --       --       --       --       --       1,287       1,287  
                                                         
Total covered loans
     7,259       --       7,259       409       --       119,828       127,496  
Total gross loans
   $ 24,431     $ --     $ 24,431     $ 1,524     $ 156     $ 424,493     $ 450,604  
                                                         


 
13
 


   
December 31, 2011
  
   
Nonperforming Loans
                          
   
Nonaccrual
    
Past Due 90
 or More
Days, Still
Accruing
    
Total
    
Loans
Delinquent
30-59 Days
    
Loans
Delinquent
60-89 Days
    
Loans Not
Past Due
    
Total
Loans
  
Noncovered loans
                                          
Real estate:
                                          
One-to-four family residential
 $ 5,446     $ --     $ 5,446     $ 1,435     $ 149     $ 96,307     $ 103,337  
Multifamily residential
     --       --       --       --       --       13,184       13,184  
Commercial real estate
     7,601       --       7,601       --       --       137,480       145,081  
Total real estate
     13,047       --       13,047       1,435       149       246,971       261,602  
                                                         
Real estate construction:
                                                        
One-to-four family residential
 415       --       415       --       --       7,921       8,336  
Commercial real estate
     1,132       --       1,132       --       --       8,778       9,910  
Total real estate construction
 1,547       --       1,547       --       --       16,699       18,246  
                                                         
Consumer:
                                                        
Home equity
     676       --       676       55       114       33,894       34,739  
Automobile
     --       --       --       --       --       665       665  
Other consumer
     2       --       2       6       8       3,620       3,636  
Total consumer
     678       --       678       61       122       38,179       39,040  
                                                         
Commercial business
     422       --       422       --       --       5,796       6,218  
Leases
     --       --       --       --