Table
of Contents
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, 2009,
|
|
|
or
|
|
|
o
|
Transition
report pursuant to Section 13 or 15(d) Of the Exchange Act
|
|
|
for the
Transition Period from
to
.
|
Commission File Number No. 0-14555
VIST FINANCIAL CORP.
(Exact name of
Registrant as specified in its charter)
PENNSYLVANIA
|
|
23-2354007
|
(State or other
jurisdiction of
|
|
(I.R.S. Employer
|
Incorporation or
organization)
|
|
Identification
No.)
|
|
|
|
1240
Broadcasting Road
|
Wyomissing,
Pennsylvania 19610
|
(Address of
principal executive offices)
|
|
|
|
(610)
208-0966
|
(Registrants
telephone number, including area code)
|
|
Securities
registered under Section 12(b) of the Exchange Act:
|
|
|
|
Common
Stock, $5.00 Par Value
|
|
The
NASDAQ Stock Market LLC
|
(Title of each class)
|
|
(Name of each exchange on which registered)
|
Securities registered under Section 12(g) of
the Exchange Act:
Indicate by check mark
whether the registrant (1) has filed all reports required to be filed by Section 13
or 15(d) of the Exchange Act during the past 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 (232.405 of this chapter)
during the preceding 12 months (or for such shorter period that the registrant
was required to submit and post such files).
Yes
o
No
o
Indicate by check mark
whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated filer or a smaller reporting company. See definitions of large accelerated filer,
accelerated filer and smaller reporting company in Rule 12b-2 of the
Exchange Act. (Check one):
Large
accelerated filer
o
|
|
Accelerated
filer
x
|
|
|
|
Non-accelerated
filer
o
|
|
Smaller
reporting company
o
|
(Do not check if a 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
o
No
x
State the number of
shares outstanding of each of the issuers classes of common stock, as of the
latest practicable date.
|
|
Number
of Shares Outstanding
|
|
|
as of May 8, 2009
|
COMMON
STOCK ($5.00 Par Value)
|
|
5,790,445
|
(Title of Class)
|
|
(Outstanding
Shares)
|
Table of Contents
FORWARD LOOKING STATEMENTS
VIST Financial Corp. (the
Company), may from time to time make written or oral forward-looking
statements, including statements contained in the Companys filings with the
Securities and Exchange Commission (including this Quarterly Report on Form 10-Q
and the exhibits hereto and thereto), in its reports to shareholders and in
other communications by the Company, which are made in good faith by the
Company pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995.
These forward-looking
statements include statements with respect to the Companys beliefs, plans,
objectives, goals, expectations, anticipations, estimates and intentions, that
are subject to significant risks and uncertainties, and are subject to change
based on various factors (some of which are beyond the Companys control). The words may, could, should, would, believe,
anticipate, estimate, expect, intend, plan and similar expressions
are intended to identify forward-looking statements. The following factors, among others, could
cause the Companys financial performance to differ materially from the plans,
objectives, expectations, estimates and intentions expressed in such
forward-looking statements: the strength of the United States economy in
general and the strength of the local economies in which the Company conducts
operations; the effects of, and changes in, trade, monetary and fiscal policies
and laws, including interest rate policies of the Board of Governors of the
Federal Reserve System; inflation, interest rate, market and monetary
fluctuations; the timely development of and acceptance of new products and
services of the Company and the perceived overall value of these products and
services by users, including the features, pricing and quality compared to
competitors products and services; the willingness of users to substitute
competitors products and services for the Companys products and services; the
success of the Company in gaining regulatory approval of its products and
services, when required; the impact of changes in laws and regulations
applicable to financial institutions (including laws concerning taxes, banking,
securities and insurance); technological changes; acquisitions; changes in
consumer spending and saving habits; the nature, extent, and timing of
governmental actions and reforms, including the rules of participation for
the Trouble Asset Relief Program voluntary Capital Purchase Program under the
Emergency Economic Stabilization Act of 2008, which may be changed unilaterally
and retroactively by legislative or regulatory actions; and the success of the
Company at managing the risks involved in the foregoing.
The Company cautions that
the foregoing list of important factors is not exclusive. Readers are also cautioned not to place undue
reliance on these forward-looking statements, which reflect managements
analysis only as of the date of this report, even if subsequently made
available by the Company on its website or otherwise. The Company does not undertake to update any
forward-looking statement, whether written or oral, that may be made from time
to time by or on behalf of the Company to reflect events or circumstances
occurring after the date of this report.
3
Table
of Contents
PART I
FINANCIAL INFORMATION
Item
1 Financial Statements
VIST FINANCIAL
CORP. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED BALANCE SHEETS
(Dollar amounts in
thousands, except per share data)
|
|
March 31,
|
|
December 31,
|
|
|
|
2009
|
|
2008
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due
from banks
|
|
$
|
20,114
|
|
$
|
18,964
|
|
Federal funds
sold
|
|
13,550
|
|
|
|
Interest-bearing
deposits in banks
|
|
353
|
|
320
|
|
|
|
|
|
|
|
Total cash and
cash equivalents
|
|
34,017
|
|
19,284
|
|
|
|
|
|
|
|
Mortgage loans
held for sale
|
|
2,841
|
|
2,283
|
|
Securities
available for sale
|
|
244,135
|
|
232,380
|
|
Securities held to
maturity, fair value 2009 - $1,767; 2008 - $1,926
|
|
3,054
|
|
3,060
|
|
Loans, net of
allowance for loan losses 2009 - $8,165; 2008 - $8,124
|
|
878,425
|
|
878,181
|
|
Premises and
equipment, net
|
|
6,685
|
|
6,591
|
|
Identifiable
intangible assets
|
|
4,662
|
|
4,833
|
|
Goodwill
|
|
39,732
|
|
39,732
|
|
Bank owned life
insurance
|
|
18,628
|
|
18,552
|
|
Other assets
|
|
26,851
|
|
19,968
|
|
|
|
|
|
|
|
Total
assets
|
|
$
|
1,259,030
|
|
$
|
1,224,864
|
|
|
|
|
|
|
|
LIABILITIES
AND SHAREHOLDERS EQUITY
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
Non-interest
bearing
|
|
$
|
106,510
|
|
$
|
108,645
|
|
Interest bearing
|
|
824,152
|
|
741,955
|
|
|
|
|
|
|
|
Total
deposits
|
|
930,662
|
|
850,600
|
|
|
|
|
|
|
|
Securities sold
under agreements to repurchase
|
|
127,242
|
|
120,086
|
|
Federal funds
purchased
|
|
|
|
53,424
|
|
Long-term debt
|
|
50,000
|
|
50,000
|
|
Junior
subordinated debt, at fair value
|
|
19,805
|
|
19,711
|
|
Other
liabilities
|
|
7,585
|
|
8,554
|
|
|
|
|
|
|
|
Total
liabilities
|
|
1,135,294
|
|
1,102,375
|
|
|
|
|
|
|
|
Shareholders
equity
|
|
|
|
|
|
Preferred stock:
$0.01 par value; authorized 1,000,000 shares; $1,000 liquidation preference
per share; 25,000 shares of Series A 5% cumulative preferred stock issued
and outstanding; Less: discount of $2,208 at March 31, 2009 and a discount
of $2,307 at December 31, 2008
|
|
22,792
|
|
22,693
|
|
Common stock,
$5.00 par value; authorized 20,000,000 shares; issued: 5,800,929 shares at
March 31, 2009 and 5,768,429 shares at December 31, 2008
|
|
29,005
|
|
28,842
|
|
Stock Warrants
|
|
2,307
|
|
2,307
|
|
Surplus
|
|
63,588
|
|
64,349
|
|
Retained
earnings
|
|
14,913
|
|
14,383
|
|
Accumulated
other comprehensive loss
|
|
(8,678
|
)
|
(8,600
|
)
|
Treasury stock;
10,484 shares at March 31, 2009 and 68,354 shares at December 31,
2008, at cost
|
|
(191
|
)
|
(1,485
|
)
|
|
|
|
|
|
|
Total
shareholders equity
|
|
123,736
|
|
122,489
|
|
|
|
|
|
|
|
Total
liabilities and shareholders equity
|
|
$
|
1,259,030
|
|
$
|
1,224,864
|
|
See Notes to Consolidated Financial Statements.
4
Table
of Contents
VIST FINANCIAL
CORP. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(Dollar amounts in
thousands, except per share data)
|
|
Three Months Ended
|
|
|
|
March 31, 2009
|
|
March 31, 2008
|
|
|
|
|
|
|
|
Interest
income:
|
|
|
|
|
|
Interest and
fees on loans
|
|
$
|
12,342
|
|
$
|
14,110
|
|
Interest on
securities:
|
|
|
|
|
|
Taxable
|
|
2,870
|
|
2,254
|
|
Tax-exempt
|
|
286
|
|
213
|
|
Dividend income
|
|
39
|
|
206
|
|
Interest on
federal funds sold
|
|
3
|
|
|
|
Other interest
income
|
|
1
|
|
4
|
|
|
|
|
|
|
|
Total
interest income
|
|
15,541
|
|
16,787
|
|
|
|
|
|
|
|
Interest
expense:
|
|
|
|
|
|
Interest on
deposits
|
|
5,154
|
|
5,503
|
|
Interest on
short-term borrowings
|
|
17
|
|
721
|
|
Interest on
securities sold under agreements to repurchase
|
|
1,063
|
|
954
|
|
Interest on
long-term debt
|
|
505
|
|
599
|
|
Interest on
junior subordinated debt
|
|
315
|
|
405
|
|
|
|
|
|
|
|
Total
interest expense
|
|
7,054
|
|
8,182
|
|
|
|
|
|
|
|
Net
Interest Income
|
|
8,487
|
|
8,605
|
|
Provision for
loan losses
|
|
825
|
|
410
|
|
|
|
|
|
|
|
Net
Interest Income after provision for loan losses
|
|
7,662
|
|
8,195
|
|
|
|
|
|
|
|
Other
income:
|
|
|
|
|
|
Customer service
fees
|
|
658
|
|
620
|
|
Mortgage banking
activities
|
|
267
|
|
323
|
|
Commissions and
fees from insurance sales
|
|
2,958
|
|
2,684
|
|
Brokerage and
investment advisory commissions and fees
|
|
330
|
|
237
|
|
Earnings on
investment in life insurance
|
|
76
|
|
168
|
|
Gain on sale of
loans
|
|
|
|
23
|
|
Other Income
|
|
1,070
|
|
434
|
|
Net realized
gains (losses) on sales of securities
|
|
159
|
|
141
|
|
|
|
|
|
|
|
Total
other income
|
|
5,518
|
|
4,630
|
|
|
|
|
|
|
|
Other
expense:
|
|
|
|
|
|
Salaries and
employee benefits
|
|
5,688
|
|
5,730
|
|
Occupancy
expense
|
|
1,069
|
|
1,129
|
|
Furniture and
equipment expense
|
|
606
|
|
672
|
|
Marketing and
advertising expense
|
|
270
|
|
657
|
|
Amortization of
identifiable intangible assets
|
|
171
|
|
150
|
|
Professional
services
|
|
892
|
|
535
|
|
Outside
processing
|
|
951
|
|
820
|
|
Insurance
expense
|
|
444
|
|
271
|
|
Other expense
|
|
1,188
|
|
1,123
|
|
|
|
|
|
|
|
Total
other expense
|
|
11,279
|
|
11,087
|
|
|
|
|
|
|
|
Income
before income taxes
|
|
1,901
|
|
1,738
|
|
Income taxes
|
|
292
|
|
179
|
|
|
|
|
|
|
|
Net
income
|
|
1,609
|
|
1,559
|
|
Preferred
stock dividends and discount accretion
|
|
(412
|
)
|
|
|
Net
income available to common shareholders
|
|
1,197
|
|
1,559
|
|
|
|
|
|
|
|
|
|
See
Notes to Consolidated Financial Statements.
5
Table of
Contents
VIST FINANCIAL
CORP. AND SUBSIDIARIES
UNAUDITED
CONSOLIDATED STATEMENTS OF INCOME
(Dollar amounts in
thousands, except per share data)
|
|
Three Months Ended
|
|
|
|
March 31, 2009
|
|
March 31, 2008
|
|
|
|
|
|
|
|
EARNINGS
PER SHARE DATA
|
|
|
|
|
|
|
|
|
|
|
|
Average shares
outstanding for basic earnings per share
|
|
5,735,968
|
|
5,673,403
|
|
Basic earnings
per share
|
|
$
|
0.21
|
|
$
|
0.28
|
|
Average shares
outstanding for diluted earnings per share
|
|
5,735,968
|
|
5,688,193
|
|
Diluted earnings
per share
|
|
$
|
0.21
|
|
$
|
0.27
|
|
Cash dividends
declared per actual share outstanding
|
|
$
|
0.10
|
|
$
|
0.20
|
|
See Notes
to Consolidated Financial Statements.
6
Table of Contents
VIST FINANCIAL CORP. AND
SUBSIDIARIES
UNAUDITED
CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
Three Months Ended March 31,
2009 and 2008
(Dollar amounts in thousands,
except per share data)
|
|
Preferred
Stock
|
|
Common
Stock
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
|
Number
of
|
|
|
|
Number
of
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
|
|
|
|
|
Shares
|
|
Liquidation
|
|
Shares
|
|
Par
|
|
Stock
|
|
|
|
Retained
|
|
Comprehensive
|
|
Treasury
|
|
|
|
|
|
Issued
|
|
Value
|
|
Issued
|
|
Value
|
|
Warrants
|
|
Surplus
|
|
Earnings
|
|
Loss
|
|
Stock
|
|
Total
|
|
Balance, January 1, 2009
|
|
25,000
|
|
$
|
22,693
|
|
5,768,429
|
|
$
|
28,842
|
|
$
|
2,307
|
|
$
|
64,349
|
|
$
|
14,383
|
|
$
|
(8,600
|
)
|
$
|
(1,485
|
)
|
$
|
122,489
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,609
|
|
|
|
|
|
1,609
|
|
Change
in net unrealized gains (losses) on securities available for sale, net of tax
effect
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(55
|
)
|
|
|
(55
|
)
|
Change
in net unrealized gains (losses) on cash flow hedge, net of tax effect
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(23
|
)
|
|
|
(23
|
)
|
Total
comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,531
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance
of preferred stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred
stock discount
|
|
|
|
99
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
99
|
|
Stock
Warrants
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(99
|
)
|
|
|
|
|
(99
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reissuance
of 57,870 shares of treasury stock
|
|
|
|
|
|
|
|
|
|
|
|
(870
|
)
|
|
|
|
|
1,294
|
|
424
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
stock issued in connection with directors compensation
|
|
|
|
|
|
28,243
|
|
141
|
|
|
|
78
|
|
|
|
|
|
|
|
219
|
|
Common
stock issued in connection with director and employee stock purchase plans
|
|
|
|
|
|
4,257
|
|
22
|
|
|
|
11
|
|
(4
|
)
|
|
|
|
|
29
|
|
Compensation
expense related to stock options
|
|
|
|
|
|
|
|
|
|
|
|
20
|
|
|
|
|
|
|
|
20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
stock cash dividends paid ($0.10 per share)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(573
|
)
|
|
|
|
|
(573
|
)
|
Preferred
stock cash dividends declared
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(403
|
)
|
|
|
|
|
(403
|
)
|
Balance, March 31, 2009
|
|
25,000
|
|
$
|
22,792
|
|
5,800,929
|
|
$
|
29,005
|
|
$
|
2,307
|
|
$
|
63,588
|
|
$
|
14,913
|
|
$
|
(8,678
|
)
|
$
|
(191
|
)
|
$
|
123,736
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred
Stock
|
|
Common
Stock
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
|
Number
of
|
|
|
|
Number
of
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
|
|
|
|
|
Shares
|
|
Liquidation
|
|
Shares
|
|
Par
|
|
Stock
|
|
|
|
Retained
|
|
Comprehensive
|
|
Treasury
|
|
|
|
|
|
Issued
|
|
Value
|
|
Issued
|
|
Value
|
|
Warrants
|
|
Surplus
|
|
Earnings
|
|
Loss
|
|
Stock
|
|
Total
|
|
Balance, January 1, 2008
|
|
|
|
$
|
|
|
5,746,998
|
|
$
|
28,735
|
|
$
|
|
|
$
|
63,940
|
|
$
|
17,039
|
|
$
|
(1,116
|
)
|
$
|
(2,006
|
)
|
$
|
106,592
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,559
|
|
|
|
|
|
1,559
|
|
Change
in net unrealized gains (losses) on securities available for sale, net of tax
effect
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
139
|
|
|
|
139
|
|
Total
comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,698
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional
consideration in connection with acquisitions (21,499 shares)
|
|
|
|
|
|
|
|
|
|
|
|
(138
|
)
|
|
|
|
|
521
|
|
383
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
stock issued in connection with directors compensation
|
|
|
|
|
|
10,808
|
|
54
|
|
|
|
139
|
|
|
|
|
|
|
|
193
|
|
Common
stock issued in connection with director and employee stock purchase plans
|
|
|
|
|
|
2,600
|
|
13
|
|
|
|
32
|
|
|
|
|
|
|
|
45
|
|
Tax
benefits from employee stock transactions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation
expense related to stock options
|
|
|
|
|
|
|
|
|
|
|
|
77
|
|
|
|
|
|
|
|
77
|
|
Cash
dividends declared ($0.20 per share)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,139
|
)
|
|
|
|
|
(1,139
|
)
|
Balance, March 31, 2008
|
|
$
|
|
|
$
|
|
|
$
|
5,760,406
|
|
$
|
28,802
|
|
$
|
|
|
$
|
64,050
|
|
$
|
17,459
|
|
$
|
(977
|
)
|
$
|
(1,485
|
)
|
$
|
107,849
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Notes
to Consolidated Financial Statements.
7
Table of Contents
VIST FINANCIAL CORP. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollar amounts in thousands)
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
March 31,
|
|
|
|
2009
|
|
2008
|
|
Cash Flows From Operating Activities
|
|
|
|
|
|
Net
income
|
|
$
|
1,609
|
|
$
|
1,559
|
|
Adjustments
to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
Provision
for loan losses
|
|
825
|
|
410
|
|
Provision
for depreciation and amortization of premises and equipment
|
|
343
|
|
386
|
|
Amortization
of identifiable intangible assets
|
|
171
|
|
150
|
|
Deferred
income taxes
|
|
(42
|
)
|
7
|
|
Director
stock compensation
|
|
219
|
|
193
|
|
Net
amortization of securities premiums and discounts
|
|
86
|
|
11
|
|
Decrease
in mortgage servicing rights
|
|
53
|
|
55
|
|
Net
realized losses on sales of foreclosed real estate
|
|
|
|
93
|
|
Net
realized gains on sales of securities
|
|
(159
|
)
|
(141
|
)
|
Proceeds
from sales of loans held for sale
|
|
16,833
|
|
11,649
|
|
Net
gains on sale of loans
|
|
(261
|
)
|
(308
|
)
|
Loans
originated for sale
|
|
(17,130
|
)
|
(11,853
|
)
|
Increase
in investment in life insurance
|
|
(76
|
)
|
(168
|
)
|
Compensation
expense related to stock options
|
|
20
|
|
77
|
|
Net
change in fair value of liabilities
|
|
95
|
|
(197
|
)
|
(Increase)
decrease in accrued interest receivable and other assets
|
|
(411
|
)
|
270
|
|
Decrease
in accrued interest payable and other liabilities
|
|
(1,258
|
)
|
(254
|
)
|
|
|
|
|
|
|
Net Cash Provided by Operating Activities
|
|
917
|
|
1,939
|
|
|
|
|
|
|
|
Cash Flow From Investing Activities
|
|
|
|
|
|
Investment
securities:
|
|
|
|
|
|
Purchases
- available for sale
|
|
(48,927
|
)
|
(21,480
|
)
|
Principal
repayments, maturities and calls - available for sale
|
|
18,011
|
|
9,670
|
|
Principal
repayments, maturities and calls - held to maturity
|
|
|
|
6
|
|
Proceeds
from sales - available for sale
|
|
19,156
|
|
8,963
|
|
Net
increase in loans receivable
|
|
(7,467
|
)
|
(8,133
|
)
|
Proceeds
from sale of loans
|
|
|
|
399
|
|
Net
increase in Federal Home Loan Bank Stock
|
|
|
|
(480
|
)
|
Purchases
of premises and equipment
|
|
(473
|
)
|
(386
|
)
|
Disposals
of premises and equipment
|
|
36
|
|
3
|
|
Net Cash Used In Investing Activities
|
|
(19,664
|
)
|
(11,438
|
)
|
|
|
|
|
|
|
|
|
See Notes to Consolidated Financial Statements.
8
Table of Contents
VIST FINANCIAL CORP. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Dollar amounts in thousands)
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
March 31,
|
|
|
|
2009
|
|
2008
|
|
Cash Flow From Financing Activities
|
|
|
|
|
|
Net
increase in deposits
|
|
80,062
|
|
45,313
|
|
Net
decrease in federal funds purchased
|
|
(53,424
|
)
|
(46,773
|
)
|
Net
increase in securities sold under agreements to repurchase
|
|
7,156
|
|
3,657
|
|
Proceeds
from long-term debt
|
|
|
|
15,000
|
|
Reissuance
of treasury stock
|
|
424
|
|
383
|
|
Proceeds
from the exercise of stock options and stock purchase plans
|
|
29
|
|
45
|
|
Cash
dividends paid on preferred and common stock
|
|
(767
|
)
|
(1,131
|
)
|
Net Cash Provided By Financing Activities
|
|
33,480
|
|
16,494
|
|
|
|
|
|
|
|
Increase
in cash and cash equivalents
|
|
14,733
|
|
6,995
|
|
Cash and Cash Equivalents:
|
|
|
|
|
|
January 1
|
|
19,284
|
|
25,789
|
|
March 31
|
|
$
|
34,017
|
|
$
|
32,784
|
|
|
|
|
|
|
|
Cash Payments For:
|
|
|
|
|
|
Interest
|
|
$
|
7,471
|
|
$
|
8,343
|
|
Taxes
|
|
$
|
|
|
$
|
|
|
|
|
|
|
|
|
Supplemental Schedule of Non-cash Investing and
Financing Activities
|
|
|
|
|
|
Transfer
of loans receivable to real estate owned
|
|
$
|
6,398
|
|
$
|
|
174
|
|
|
|
|
|
|
|
|
|
|
See Notes
to Consolidated Financial Statements.
9
Table of Contents
VIST FINANCIAL CORP.
NOTES TO UNAUDITED
CONSOLIDATED FINANCIAL STATEMENTS
1.
Basis of Presentation
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q. Accordingly,
they do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. All
significant inter-company accounts and transactions have been eliminated. In
the opinion of management, all adjustments (including normal recurring
adjustments) considered necessary for a fair presentation of the results for
the interim periods have been included. Certain prior period amounts have been
reclassified to conform to the current presentation.
The balance sheet at December 31, 2008 has been derived from the
audited financial statements at that date but does not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements.
The results of operations for the three month period ended March 31,
2009 are not necessarily indicative of the results to be expected for the full
year. For purpose of reporting cash flows, cash and cash equivalents include
cash and due from banks, and interest bearing deposits in other banks. For
further information, refer to the Consolidated Financial Statements and
Footnotes included in the Companys Annual Report on Form 10-K for the
year ended December 31, 2008.
2.
Earnings Per
Common Share
Basic earnings per common share is calculated by dividing net income,
less Series A Preferred Stock dividends and discount accretion, by the
weighted average number of shares of common stock outstanding. Diluted earnings
per share is calculated by adjusting the weighted average number of shares of
common stock outstanding to include the effect of stock options, if dilutive,
using the treasury stock method. For 2008, there were no dividends or discount
accretion on the Series A Preferred Stock.
Earnings per common share for the respective periods indicated have
been computed based upon the following:
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
March 31,
|
|
|
|
2009
|
|
2008
|
|
|
|
(Dollar amounts in thousands)
|
|
|
|
|
|
|
|
Net
Income
|
|
$
|
1,609
|
|
$
|
1,559
|
|
Less:
preferred stock dividends
|
|
(313
|
)
|
|
|
Less:
preferred stock discount accretion
|
|
(99
|
)
|
|
|
|
|
|
|
|
|
Net
income available to common shareholders
|
|
$
|
1,197
|
|
$
|
1,559
|
|
|
|
|
|
|
|
Average
shares outstanding
|
|
5,735,968
|
|
5,673,403
|
|
Effect
of dilutive stock options
|
|
|
|
14,790
|
|
|
|
|
|
|
|
Average
number of shares used to calculate diluted earnings per share
|
|
5,735,968
|
|
5,688,193
|
|
10
Table of Contents
3.
Comprehensive
Income
Accounting principles generally require that recognized revenue,
expense, gains and losses be included in net income. Although certain changes
in assets and liabilities, such as unrealized gains and losses on available for
sale securities are reported as a separate component of the equity section of
the balance sheet, such items, along with net income, are components of
comprehensive income. The components of other comprehensive income and related
tax effects were as follows:
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
March 31,
|
|
|
|
2009
|
|
2008
|
|
|
|
(Dollar amounts in thousands)
|
|
|
|
|
|
|
|
Unrealized
holding gains on available for sale securities
|
|
$
|
76
|
|
$
|
351
|
|
Unrealized
holding (losses) on cash flow hedges
|
|
(35
|
)
|
|
|
Reclassification
adjustment for gains realized in income
|
|
(159
|
)
|
(141
|
)
|
Net
unrealized (losses) gains
|
|
(118
|
)
|
210
|
|
Income
tax effect
|
|
40
|
|
(71
|
)
|
Other
comprehensive (loss) income
|
|
$
|
(78
|
)
|
$
|
139
|
|
4.
Guarantees
Outstanding
letters of credit written are conditional commitments issued by the Company to
guarantee the performance of a customer to a third party. The Companys
exposure to credit loss in the event of nonperformance by the other party to
the financial instrument for standby letters of credit is represented by the
contractual amount of those instruments. The Company had $13.6 million and
$14.5 million of financial and performance standby letters of credit as of March 31,
2009 and December 31, 2008, respectively. The Bank uses the same credit
policies in making conditional obligations as it does for on-balance sheet
instruments.
The majority of these standby letters of credit expire within the next
24 months. The credit risk involved in issuing letters of credit is essentially
the same as that involved in extending other loan commitments. The Company
requires collateral and personal guarantees supporting these letters of credit
as deemed necessary. Management believes that the proceeds obtained through a
liquidation of such collateral and the enforcement of personal guarantees would
be sufficient to cover the maximum potential amount of future payments required
under the corresponding guarantees. The current amount of the liability as of March 31,
2009 and December 31, 2008 for guarantees under standby letters of credit
is not material.
11
Table of Contents
5.
Segment Information
The Companys insurance operations, investment operations and mortgage
banking operations are managed separately from the traditional banking and
related financial services that the Company also offers. The mortgage banking operation offers
residential lending products and generates revenue primarily through gains
recognized on loan sales. The insurance
operation utilizes insurance companies and acts as an agent or brokers to
provide coverage for commercial, individual, surety bond, and group and
personal benefit plans. The investment
operation provides services for individual financial planning, retirement and
estate planning, investments, corporate and small business pension and
retirement planning.
|
|
Banking
and
Financial
Services
|
|
Mortgage
Banking
|
|
Insurance
Services
|
|
Investment
Services
|
|
Total
|
|
|
|
(Dollar amounts in thousands)
|
|
Three months ended March 31, 2009
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
income and other income from external sources
|
|
$
|
9,273
|
|
$
|
866
|
|
$
|
3,520
|
|
$
|
346
|
|
$
|
14,005
|
|
Income
before income taxes
|
|
651
|
|
495
|
|
698
|
|
57
|
|
1,901
|
|
Total
Assets
|
|
1,163,071
|
|
77,129
|
|
17,590
|
|
1,240
|
|
1,259,030
|
|
Purchases
of premises and equipment
|
|
472
|
|
|
|
1
|
|
|
|
473
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, 2008
|
|
|
|
|
|
|
|
|
|
|
|
Net
interest income and other income from external sources
|
|
$
|
9,449
|
|
$
|
838
|
|
$
|
2,689
|
|
$
|
259
|
|
$
|
13,235
|
|
Income
(loss) before income taxes
|
|
1,084
|
|
299
|
|
370
|
|
(15
|
)
|
1,738
|
|
Total
Assets
|
|
1,058,447
|
|
65,122
|
|
17,966
|
|
1,288
|
|
1,142,823
|
|
Purchases
of premises and equipment
|
|
347
|
|
1
|
|
37
|
|
1
|
|
386
|
|
6.
Stock Incentive Plans
The Company has an Employee Stock Incentive Plan (ESIP) that covers all
officers and key employees of the Company and its subsidiaries and is
administered by a committee of the Board of Directors. The total number of
shares of common stock that may be issued pursuant to the ESIP is 486,781. The
option price for options issued under the ESIP must be at least equal to 100%
of the fair market value of the common stock on the date of grant and shall not
be less than the stocks par value. Options granted under the ESIP have various
vesting periods ranging from immediate up to 5 years, 20% exercisable not less
than one year after the date of grant, but no later than ten years after the
date of grant in accordance with the vesting. Vested options expire on the
earlier of ten years after the date of grant, three months from the participants
termination of employment or one year from the date of the participants death
or disability. As of March 31, 2009, a total of 148,072 shares have been
issued under the ESIP. The ESIP expired on November 10, 2008.
The Company has an Independent Directors Stock Option Plan (IDSOP). The
total number of shares of common stock that may be issued pursuant to the IDSOP
is 121,695. The IDSOP covers all directors of the Company who are not employees
and former directors who continue to be employed by the Company. The option
price for options issued under the IDSOP will be equal to the fair market value
of the Companys common stock on the date of grant. Options are exercisable
from the date of grant and expire on the earlier of ten years after the date of
grant, three months from the date the participant ceases to be a director of
the Company or the cessation of the participants employment, or twelve months
from the date of the participants death or disability. As of March 31,
2009, a total of 21,166 shares have been issued under the IDSOP. The IDSOP expired
on November 10, 2008.
On April 17, 2007, shareholders approved the VIST Financial Corp.
2007 Equity Incentive Plan (EIP). The total number of shares which may be
granted under the EIP is equal to 12.5% of the outstanding shares of the
Companys common stock on the date of approval of the EIP and is subject to
automatic annual increases by an amount equal to 12.5% of any increase in the
number of the Companys outstanding shares of common stock during the preceding
year or such lesser number as determined by the Companys board of directors. The
total number of shares of common stock that may be issued pursuant to the EIP
is 676,572. The EIP covers all employees and non-employee directors of the
Company
12
Table
of Contents
and its subsidiaries. Incentive
stock options, nonqualified stock options and restricted stock grants are
authorized for issuance under the EIP. The exercise price for stock options
granted under the EIP must equal the fair market value of the Companys common
stock on the date of grant. Vesting of awards under the EIP is determined by
the Human Resources Committee of the board of directors, but must be at least
one year. The Committee may also subject an award to one or more performance
criteria. Stock options and restricted stock awards generally expire upon
termination of employment. In certain instances after an optionee terminates
employment or service, the Committee may extend the exercise period for a
vested nonqualified stock option up to the remaining term of the option. A
vested incentive stock option must be exercised within three months following
termination of employment if such termination is for reasons other than cause. Performance
goals generally cannot be accelerated or waived except in the event of a change
in control or upon death, disability or retirement. As of March 31, 2009,
no shares have been issued under the EIP. The EIP will expire on April 17,
2017.
The Companys total stock-based compensation expense for the three
months ended March 31, 2009 and 2008 was approximately $20,000 and
$77,000, respectively. Total stock-based compensation expense, net of related
tax effects, was approximately $13,000 and $51,000 for the three months ended March 31,
2009 and 2008, respectively. Cash flows from financing activities included in
cash inflows from excess tax benefits related to stock compensation were
approximately $0 for the three months ended March 31, 2009 and 2008. Total
unrecognized compensation costs related to non-vested stock options at March 31,
2009 and 2008 were approximately $326,000 and $521,000, respectively.
Stock option transactions under the Plans for the three months ended March 31,
2009 were as follows:
|
|
|
|
|
|
|
|
Weighted-
|
|
|
|
|
|
Weighted-
|
|
|
|
Average
|
|
|
|
|
|
Average
|
|
Aggregate
|
|
Remaining
|
|
|
|
|
|
Exercise
|
|
Intrinsic
|
|
Term
|
|
|
|
Options
|
|
Price
|
|
Value
|
|
(in years)
|
|
Outstanding
at the beginning of the year
|
|
708,889
|
|
$
|
17.23
|
|
|
|
|
|
Granted
|
|
13,000
|
|
8.50
|
|
|
|
|
|
Exercised
|
|
|
|
|
|
|
|
|
|
Expired
|
|
(4,550
|
)
|
22.85
|
|
|
|
|
|
Forfeited
|
|
(47,736
|
)
|
17.54
|
|
|
|
|
|
Outstanding
as of March 31, 2009
|
|
669,603
|
|
$
|
17.00
|
|
$
|
|
|
7.3
|
|
Exercisable
as of March 31, 2009
|
|
393,819
|
|
$
|
19.70
|
|
$
|
|
|
5.9
|
|
The fair value of options granted for the three month period ended March 31,
2009 were estimated at the date of grant using a Black-Scholes option pricing
model with the following weighted-average assumptions:
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
December 31,
|
|
|
|
2009
|
|
2008
|
|
|
|
|
|
|
|
Dividend
yield
|
|
7.76
|
%
|
6.09
|
%
|
Expected
life
|
|
7 years
|
|
7 years
|
|
Expected
volatility
|
|
25.71
|
%
|
21.52
|
%
|
Risk-free
interest rate
|
|
1.96
|
%
|
2.54
|
%
|
Weighted
average fair value of options granted
|
|
$
|
0.68
|
|
$
|
1.29
|
|
|
|
|
|
|
|
|
|
7.
Investment in Limited Partnership
On December 29, 2003, the Bank entered into a limited partner
subscription agreement with Midland Corporate Tax Credit XVI Limited
Partnership, where the Bank will receive special tax credits and other tax
benefits. The Bank subscribed to a 6.2% interest in the partnership, which is
subject to an adjustment depending on the final size of the partnership at a
13
Table of Contents
purchase price of $5
million. This investment is included in other assets and is not guaranteed. It
is accounted for in accordance with Statement of Position (SOP) 78-9, Accounting
for Investments in Real Estate Ventures, using the equity method. This
agreement was accompanied by a payment of $1.7 million. The associated
non-interest bearing promissory note payable included in other liabilities was
zero at March 31, 2009. Installments were paid as requested.
8.
Recently Issued Accounting
Standards
In January 2009, the FASB issued FSP EITF 99-20-1, Amendments to
the Impairment of Guidance of EITF Issue No. 99-20 (FSP EITF 99-20-1). FSP
EITF 99-20-1 amends the impairment guidance in EITF Issue No. 99-20, Recognition
of Interest Income and Impairment on Purchased Beneficial Interests and
Beneficial Interests That Continue to Be Held by a Transferor in Securitized
Financial Assets, to achieve more consistent determination of whether an
other-than-temporary impairment has occurred. FSP EITF 99-20-1 also retains and
emphasizes the objective of an other-than-temporary impairment assessment and
the related disclosure requirements in SFAS No. 115, Accounting for
Certain Investments in Debt and Equity Securities, and other related guidance.
FSP EITF 99-20-1 is effective for interim and annual reporting periods ending
after December 15, 2008, and shall be applied prospectively. Retrospective
application to a prior interim or annual reporting period is not permitted.
The
implementation of this standard did not have a material impact on the Companys
consolidated financial position and results of operations.
In April 2009,
the Financial Accounting Standards Board (FASB) issued FASB Staff Position
(FSP) No. FAS 157-4, Determining Fair Value When the Volume and Level of
Activity for the Asset or Liability Have Significantly Decreased and
Identifying Transactions That Are Not Orderly (FSP FAS 157-4). FASB Statement
157, Fair Value Measurements, defines fair value as the price that would be
received to sell the asset or transfer the liability in an orderly transaction
(that is, not a forced liquidation or distressed sale) between market
participants at the measurement date under current market conditions. FSP FAS
157-4 provides additional guidance on determining when the volume and level of
activity for the asset or liability has significantly decreased. The FSP also
includes guidance on identifying circumstances when a transaction may not be
considered orderly.
FSP FAS 157-4
provides a list of factors that a reporting entity should evaluate to determine
whether there has been a significant decrease in the volume and level of
activity for the asset or liability in relation to normal market activity for
the asset or liability. When the reporting entity concludes there has been a
significant decrease in the volume and level of activity for the asset or
liability, further analysis of the information from that market is needed and
significant adjustments to the related prices may be necessary to estimate fair
value in accordance with Statement 157.
This FSP clarifies
that when there has been a significant decrease in the volume and level of
activity for the asset or liability, some transactions may not be orderly. In
those situations, the entity must evaluate the weight of the evidence to
determine whether the transaction is orderly. The FSP provides a list of
circumstances that may indicate that a transaction is not orderly. A
transaction price that is not associated with an orderly transaction is given
little, if any, weight when estimating fair value.
This FSP is
effective for interim and annual reporting periods ending after June 15,
2009. The Company is currently reviewing the effect this new pronouncement will
have on its consolidated financial statements.
In April 2009,
the FASB issued FSP No. FAS 115-2 and FAS 124-2, Recognition and
Presentation of Other-Than-Temporary Impairments (FSP FAS 115-2 and FAS 124-2).
FSP FAS 115-2 and FAS 124-2 clarifies the interaction of the factors that
should be considered when determining whether a debt security is
other-than-temporarily impaired. For debt securities, management must assess
whether (a) it has the intent to sell the security and (b) it is more
likely than not that it will be required to sell the security prior to its anticipated
recovery. These steps are done before assessing whether the entity will recover
the cost basis of the investment. Previously, this assessment required
management to assert it has both the intent and the ability to hold a security
for a period of time sufficient to allow for an anticipated recovery in fair
value to avoid recognizing an other-than-temporary impairment. This change does
not affect the need to forecast recovery of the value of the security through
either cash flows or market price.
In instances when
a determination is made that an other-than-temporary impairment exists but the
investor does not intend to sell the debt security and it is not more likely
than not that it will be required to sell the debt security prior to its
anticipated recovery, FSP FAS 115-2 and FAS 124-2 changes the presentation and
amount of the other-than-temporary impairment recognized in the income
statement. The other-than-temporary impairment is separated into (a) the
amount of the total other-than-temporary impairment related to a decrease in
cash flows expected to be collected from the debt security (the credit loss)
and (b) the amount of the total other-than-temporary impairment related to
all other factors. The amount of the total other-than-temporary impairment
related to the credit loss is recognized in earnings. The amount of the total
other-than-temporary impairment related to all other factors is recognized in
other comprehensive income.
This FSP is
effective for interim and annual reporting periods ending after June 15,
2009. The Company is currently reviewing the effect this new pronouncement will
have on its consolidated financial statements.
In April 2009,
the FASB issued FSP No. FAS 107-1 and APB 28-1, Interim Disclosures about
Fair Value of Financial Instruments (FSP FAS 107-1 and APB 28-1). FSP FAS 107-1
and APB 28-1 amends FASB Statement No. 107, Disclosures about Fair Value
of Financial Instruments, to require disclosures about fair value of financial
instruments for interim reporting periods of
14
Table of Contents
publicly traded companies as well as in annual
financial statements. This FSP also amends APB Opinion No. 28, Interim
Financial Reporting, to require those disclosures in summarized financial
information at interim reporting periods.
This FSP is
effective for interim and annual reporting periods ending after June 15,
2009. The Company is currently reviewing the effect this new pronouncement will
have on its consolidated financial statements.
9.
Fair Value Measurements and
Fair Value of Financial Instruments
Management uses
its best judgment in estimating the fair value of the Companys financial
instruments; however, there are inherent weaknesses in any estimation
technique. Therefore, for substantially all financial instruments, the fair
value estimates herein are not necessarily indicative of the amount the Company
could have realized in a sale transaction on the dates indicated. The estimated
fair value amounts have been measured as of their respective year ends and have
not been re-evaluated or updated for purposes of these consolidated financial
statements subsequent to those respective dates. As such, the estimated fair
values of these financial instruments subsequent to the respective reporting
dates may be different than the amounts reported at each year end.
The following
methods and assumptions were used to estimate the fair values of the Companys
financial instruments at March 31, 2009 and December 31, 2008:
SFAS 157 defines fair value as the price that would be received to sell
an asset or paid to transfer a liability in an orderly transaction between
market participants. A fair value measurement assumes that the transaction to
sell the asset or transfer the liability occurs in the principal market for the
asset or liability or, in the absence of a principal market, the most
advantageous market for the asset or liability. The price in the principal (or
most advantageous) market used to measure the fair value of the asset or
liability shall not be adjusted for transaction costs. An orderly transaction
is a transaction that assumes exposure to the market for a period prior to the
measurement date to allow for marketing activities that are usual and customary
for transactions involving such assets and liabilities; it is not a forced
transaction. Market participants are buyers and sellers in the principal market
that are (i) independent, (ii) knowledgeable, (iii) able to
transact and (iv) willing to transact.
SFAS 157 requires the use of valuation techniques that are consistent
with the market approach, the income approach and/or the cost approach. The
market approach uses prices and other relevant information generated by market
transactions involving identical or comparable assets and liabilities. The
income approach uses valuation techniques to convert future amounts, such as
cash flows or earnings, to a single present amount on a discounted basis. The cost
approach is based on the amount that currently would be required to replace the
service capacity of an asset (replacement costs). Valuation techniques should
be consistently applied. Inputs to valuation techniques refer to the
assumptions that market participants would use in pricing the asset or
liability. Inputs may be observable, meaning those that reflect the assumptions
market participants would use in pricing the asset or liability developed based
on market data obtained from independent sources, or unobservable, meaning
those that reflect the reporting entitys own assumptions about the assumptions
market participants would use in pricing the asset or liability developed based
on the best information available in the circumstances. In that regard, SFAS
157 establishes a fair value hierarchy for valuation inputs that gives the
highest priority to quoted prices in active markets for identical assets or
liabilities and the lowest priority to unobservable inputs.
The three levels defined by SFAS 157 hierarchy are as follows:
Level
1:
Quoted prices
are available in active markets for identical assets or liabilities as of the
reported date.
Level 2:
Pricing inputs are other
than quoted prices in active markets, which are either directly or indirectly observable
as of the reported date. The nature of these assets and liabilities include
items for which quoted prices are available but traded less frequently, and
items that are fair valued using other financial instruments, the parameters of
which can be directly observed.
Level 3:
Assets and liabilities that
have little to no pricing observability as of the reported date. These items do
not have two-way markets and are measured using managements best estimate of
fair value, where the inputs into the determination of fair value require
significant management judgment or estimation.
The following table presents the assets and liabilities measured on a
recurring basis reported on the consolidated statements of financial condition
at their fair value by level within the fair value hierarchy.
15
Table of Contents
|
|
As of March 31, 2009
|
|
|
|
Quoted Prices
in Active
Markets for
Identical
Assets
|
|
Significant
Other
Observable
Inputs
|
|
Significant
Unobservable
Inputs
|
|
|
|
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
|
Total
|
|
|
|
(In thousands)
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
Securities
available for sale
|
|
$
|
1,283
|
|
$
|
242,852
|
|
$
|
|
|
$
|
244,135
|
|
Interest
rate swaps
|
|
|
|
(1,540
|
)
|
|
|
(1,540
|
)
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
Junior
subordinated debt
|
|
$
|
|
|
$
|
19,805
|
|
$
|
|
|
$
|
19,805
|
|
|
|
As of December 31, 2008
|
|
|
|
Quoted Prices
in Active
Markets for
Identical
Assets
|
|
Significant
Other
Observable
Inputs
|
|
Significant
Unobservable
Inputs
|
|
|
|
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
|
Total
|
|
|
|
(In thousands)
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
Securities
available for sale
|
|
$
|
1,675
|
|
$
|
230,705
|
|
$
|
|
|
$
|
232,380
|
|
Interest
rate swaps
|
|
|
|
(1,601
|
)
|
|
|
(1,601
|
)
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
Junior
subordinated debt
|
|
$
|
|
|
$
|
19,711
|
|
$
|
|
|
$
|
19,711
|
|
16
Table of Contents
The following table presents the assets and liabilities measured on a
non-recurring basis reported on the consolidated statements of financial
condition at their fair value by level within the fair value hierarchy.
|
|
As of March 31, 2009
|
|
|
|
Quoted Prices
in Active
Markets for
Identical
Assets
|
|
Significant
Other
Observable
Inputs
|
|
Significant
Unobservable
Inputs
|
|
|
|
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
|
Total
|
|
|
|
(In thousands)
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
Loans
held for sale
|
|
$
|
|
|
$
|
2,841
|
|
$
|
|
|
$
|
2,841
|
|
Impaired
loans
|
|
|
|
|
|
5,515
|
|
5,515
|
|
OREO
|
|
|
|
|
|
6,661
|
|
6,661
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2008
|
|
|
|
Quoted Prices
in Active
Markets for
Identical
Assets
|
|
Significant
Other
Observable
Inputs
|
|
Significant
Unobservable
Inputs
|
|
|
|
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
|
Total
|
|
|
|
(In thousands)
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
Loans
held for sale
|
|
$
|
|
|
$
|
2,283
|
|
$
|
|
|
$
|
2,283
|
|
Impaired
loans
|
|
|
|
|
|
5,270
|
|
5,270
|
|
OREO
|
|
|
|
|
|
263
|
|
263
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OREO totaled $6.7 million at March 31, 2009, compared to $0.3
million at December 31, 2008.
As a result of the change in fair value of the junior subordinated
debt, included in other non-interest income for the first three months of 2009
and 2008, are pre-tax (losses) gains of approximately ($94,000) and $197,000,
respectively.
The following
information should not be interpreted as an estimate of the fair value of the
entire Company since a fair value calculation is only provided for a limited
portion of the Companys assets and liabilities. Due to a wide range of
valuation techniques and the degree of subjectivity used in making the estimates,
comparisons between the Companys disclosures and those of other companies may
not be meaningful.
Cash and
cash equivalents:
The carrying
amounts reported in the balance sheet for cash and short-term instruments
approximate those assets fair values.
Investment
Securities Available for Sale:
Securities
classified as available for sale are reported at fair value utilizing Level 1
and Level 2 inputs. For these securities, the Company obtains fair value
measurements from an independent pricing service. The fair value measurements
consider observable data that may include dealer quotes, market spreads, cash
flows, the U. S. Treasury yield curve, live trading levels, trade execution
data, market consensus prepayments speeds, credit information and the bonds
terms and conditions, among other things.
Loans
Held for Sale:
The fair value of
loans held for sale is determined, when possible, using Level 2 quoted
secondary-market prices. If no such quoted price exists, the fair value of a
loan is determined based on expected proceeds based on sales contracts and
commitments.
17
Table of Contents
Impaired Loans:
Impaired loans are those
that are accounted for under FASB Statement No. 114, Accounting by
Creditors for Impairment of a Loan (SFAS114), in which the Company has
measured impairment generally based on the fair value of the loans
collateral. Impaired loans are evaluated
and valued at the time the loan is identified as impaired. Fair value is
measured based on the value of the collateral securing these loans and is
classified at a Level 3 in the fair value hierarchy. Collateral may be real estate and/or business
assets including equipment, inventory and/or accounts receivable and is
determined based on appraisals by qualified licensed appraisers hired by the
Company. Appraised and reported values
may be discounted based on managements historical knowledge, changes in market
conditions from the time of valuation, and/or managements expertise and
knowledge of the client and clients business.
Impaired loans are reviewed and evaluated on a monthly basis for
additional impairment and adjusted accordingly, based on the same factors
identified above.
Other Real Estate Owned:
Foreclosed properties are
adjusted to fair value less estimated selling costs at the time of foreclosure
in preparation for transfer from portfolio loans to other real estate owned (OREO),
establishing a new accounting basis. The Company subsequently adjusts the fair
value on the OREO on a nonrecurring basis to reflect partial write-downs based
on the observable market price, current appraised value of the asset or other
estimates of fair value.
Mortgage
servicing rights:
The fair value of
mortgage servicing rights is based on observable market prices when available
or the present value of expected future cash flows when not available.
Interest Rate Swap Agreements:
Interest rate swap
agreements are measured by alternative pricing sources with reasonable levels
of price transparency in markets that are not active. Based on the complex nature of interest rate
swap agreements, the markets these instruments trade in are not as efficient
and are less liquid than that of the more mature Level 1 markets. These markets do however have comparable,
observable inputs in which an alternative pricing source values these assets in
order to arrive at a fair market value.
These characteristics classify interest rate swap agreements as Level 2
as presented in SFAS No. 157.
Deposit
liabilities:
The fair values disclosed
for demand deposits (e.g., interest and non-interest checking, savings and
certain types of money market accounts) are considered to be equal to the
amount payable on demand at the reporting date (i.e., their carrying
amounts). Fair values for fixed-rate
time deposits are estimated using a discounted cash flow calculation that
applies interest rates currently being offered on time deposits to a schedule
of aggregated expected monthly maturities on time deposits.
Securities
sold under agreements to repurchase and federal funds purchased:
The carrying amounts of
these borrowings approximate their fair values.
Long-term
debt:
The fair value of
long-term debt is calculated based on the discounted value of contractual cash
flows, using rates currently available for borrowings with similar maturities.
Junior Subordinated Debt:
The Company records
selected liabilities at fair value, with unrealized gains and losses reflected
in the consolidated statement of income.
The degree of judgment utilized in measuring the fair value of these
liabilities generally correlates to the level of observable pricing. Pricing observability is impacted by a number
of factors, including the type of liability, whether the liability has an
established market and the characteristics specific to the transaction. Liabilities with readily available active
quoted prices or for which fair value can be measured from actively quoted
prices generally will have a higher degree of pricing observability and a
lesser degree of judgment utilized in measuring fair value. Conversely, liabilities rarely traded or not
quoted will generally have less, or no, pricing observability and a higher
degree of judgment utilized in measuring fair value. Junior Subordinated Debt is reported at fair
value utilizing Level 2 inputs. For
these debt instruments, the Company obtains fair value measurements from an
independent pricing service. The fair
value measurements consider observable data that may include market spreads,
cash flows, trade execution data and credit information, among other things.
Accrued
interest receivable and payable:
The carrying amount of
accrued interest receivable and accrued interest payable approximates its fair
value.
18
Table
of Contents
Off-balance
sheet instruments:
Fair values for the
off-balance sheet instruments are based on fees currently charged to enter into
similar agreements, taking into account the remaining terms of the agreements
and the counterparties credit standing.
Other-Than-Temporary-Impairment
Management evaluates
securities for other-than-temporary impairment at least on a quarterly basis,
and more frequently when economic or market concerns warrant such
evaluation. Consideration is given to (1) the
length of time and the extent to which the fair value has been less than cost, (2) the
financial condition and near-term prospects of the issuer, and (3) the
intent and ability of the Company to retain its investment in the issuer for a
period of time sufficient to allow for any anticipated recovery in fair value.
If a decline in market
value of a security is determined to be other than temporary, under generally
accepted accounting principles, we are required to write these securities down
to their estimated fair value. We own
single issue and pooled trust preferred securities of other financial
institutions and private label collateralized mortgage obligations whose
aggregate historical cost basis is greater than their estimated fair
value. We have reviewed these securities
and determined that the decreases in estimated fair value are temporary. We perform an ongoing analysis of these
securities utilizing both readily available market data and third party
analytical models. Future changes in interest rates or the credit quality and
strength of the underlying issuers may reduce the market value of these and
other securities. If such decline is
determined to be other than temporary, we will write them down through a charge
to earnings to their then current fair value.
19
Table of Contents
Item 2 -
Managements
Discussion and Analysis of Financial Condition and Results of Operations
Critical Accounting
Policies
Note 1 to the Companys
consolidated financial statements (included in Item 8 of the Form 10-K for
the year ended December 31, 2008) lists significant accounting policies
used in the development and presentation of its financial statements. This discussion and analysis, the significant
accounting policies, and other financial statement disclosures identify and
address key variables and other qualitative and quantitative factors that are
necessary for an understanding and evaluation of the Company and its results of
operations.
The preparation of
financial statements in conformity with accounting principles generally
accepted in the United States of America requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from
those estimates. Material estimates that
are particularly susceptible to significant change in the near term relate to
the determination of the allowance for loan losses, revenue recognition for
insurance activities, stock based compensation, derivative financial
instruments, goodwill and intangible assets, other than temporary impairment
losses on available for sale securities and the valuation of deferred tax
assets. In estimating other-than
temporary impairment losses, management considers (1) the length of time
and the extent to which the fair value has been less than cost, (2) the
financial condition and near-term prospects of the issuer, and (3) the
intent and ability of the Company to retain its investment in the issuer for a
period of time sufficient to allow for any anticipated recovery in fair value.
Results of Operations
OVERVIEW
Net
income for the Company for the quarter ended March 31, 2009 was $1.61
million, an increase of 3.2%, as compared to $1.56 million for the same period
in 2008. Basic and diluted earnings per
share for the first quarter of 2009 were $.21 and $.21, respectively, compared
to basic and diluted earnings per share of $.28 and $.27, respectively, for the
same period of 2008.
The
following are the key ratios for the Company as of:
|
|
As Of or For
|
|
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
December 31,
|
|
|
|
2009
|
|
2008
|
|
|
|
|
|
|
|
Return on
average assets
|
|
0.53
|
%
|
0.59
|
%
|
Return on
average shareholders equity
|
|
5.29
|
%
|
6.96
|
%
|
Dividend payout
ratio
|
|
47.62
|
%
|
48.23
|
%
|
Average
shareholders equity to average assets
|
|
9.98
|
%
|
8.45
|
%
|
Net Interest Income
Net
interest income is a primary source of revenue for the Company. Net interest income results from the
difference between the interest and fees earned on loans and investments and
the interest paid on deposits to customers and other non-deposit sources of
funds, such as repurchase agreements and short and long-term borrowed
funds. Net interest margin is the
difference between the gross (tax-effected) yield on earning assets and the
cost of interest bearing funds as a percentage of earning assets. All discussion of net interest margin is on a
fully taxable equivalent basis (FTE).
Net
interest income before the provision for loan losses for the three months ended
March 31, 2009 was $8.5 million, a decrease of $118,000, or 1.4%, compared
to the $8.6 million reported for the same period in 2008. The FTE net interest margin decreased to
3.19% for the first quarter of 2009 from 3.51% for the same period in 2008.
The
following summarizes net interest margin information:
20
Table of Contents
|
|
Three months ended March 31,
|
|
|
|
2009
|
|
2008
|
|
|
|
Average
Balance
|
|
Interest
Income/
Expense
|
|
%
Rate
|
|
Average Balance
|
|
Interest
Income/
Expense
|
|
%
Rate
|
|
|
|
(Dollar amounts in thousands, except percentages)
|
|
Interest-Earning
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans:
(1) (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
$
|
699,514
|
|
$
|
9,938
|
|
5.68
|
|
$
|
656,344
|
|
$
|
11,317
|
|
6.82
|
|
Mortgage
|
|
50,411
|
|
763
|
|
6.06
|
|
46,522
|
|
756
|
|
6.50
|
|
Consumer
|
|
139,792
|
|
1,883
|
|
5.46
|
|
126,922
|
|
2,228
|
|
7.06
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments
(2)
|
|
234,132
|
|
3,360
|
|
5.74
|
|
197,504
|
|
2,853
|
|
5.78
|
|
Federal funds
sold
|
|
6,626
|
|
3
|
|
0
|
|
|
|
|
|
|
|
Other short-term
investments
|
|
346
|
|
1
|
|
0.66
|
|
519
|
|
4
|
|
2.86
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
interest-earning assets
|
|
$
|
1,130,821
|
|
$
|
15,948
|
|
5.64
|
|
$
|
1,027,811
|
|
$
|
17,158
|
|
6.60
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-Bearing
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transaction
accounts
|
|
$
|
320,118
|
|
$
|
1,110
|
|
1.40
|
|
$
|
316,145
|
|
$
|
1,879
|
|
2.39
|
|
Certificates of
deposit
|
|
469,016
|
|
4,044
|
|
3.49
|
|
316,774
|
|
3,624
|
|
4.60
|
|
Securities sold
under agreement to repurchase
|
|
119,503
|
|
1,065
|
|
3.56
|
|
111,150
|
|
954
|
|
3.39
|
|
Short-term
borrowings
|
|
9,914
|
|
17
|
|
0.67
|
|
84,317
|
|
721
|
|
3.38
|
|
Long-term
borrowings
|
|
59,167
|
|
504
|
|
3.41
|
|
59,396
|
|
599
|
|
3.99
|
|
Junior
subordinated debt
|
|
19,712
|
|
314
|
|
6.47
|
|
20,230
|
|
405
|
|
8.06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
interest-bearing liabilities
|
|
997,430
|
|
7,054
|
|
2.87
|
|
908,012
|
|
8,182
|
|
3.62
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing
deposits
|
|
105,444
|
|
|
|
|
|
103,299
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cost of
funds
|
|
$
|
1,102,874
|
|
7,054
|
|
2.59
|
|
$
|
1,011,311
|
|
8,182
|
|
3.25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
margin (fully taxable equivalent)
|
|
|
|
$
|
8,894
|
|
3.19
|
|
|
|
$
|
8,976
|
|
3.51
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Loan
fees have been included in the interest income totals presented. Nonaccrual
loans have been included in average loan balances.
|
|
|
(2)
|
Interest
income on loans and investments is presented on a taxable equivalent basis
using an effective tax rate of 34%.
|
|
|
Average
interest-earning assets for the three months ended March 31, 2009 were
$1.13 billion, a $103.0 million, or 10.0%, increase over average
interest-earning assets of $1.03 billion for the same period in 2008. The yield on average interest-earning assets
decreased by 96 basis points to 5.64% for the first quarter of 2009, compared
to 6.60% for the same period in 2008.
Average
interest-bearing liabilities for the three months ended March 31, 2009
were $997.4 million, an $89.4 million, or 9.8%, increase over average
interest-bearing liabilities of $908.0 million for the same period in
2008. In addition, average
noninterest-bearing deposits increased to $105.4 million for the three months
ended March 31, 2009, from $103.3 million for the same time period of
2008. The interest rate on total
interest-bearing liabilities decreased by 75 basis points to 2.87% for the
three months ended March 31, 2009, compared to 3.62% for the same period
in 2008.
For
the three months ended March 31, 2009, FTE net interest income before the
provision for loan losses decreased 0.9% to $8.9 million compared to $9.0
million for the same period in 2008.
For
the three months ended March 31, 2009, total interest income decreased
7.4% to $15.5 million compared to $16.8 million for the same period in
2008. The decrease in total interest
income for the three months ended March 31, 2009 was primarily the result
of a decrease in the interest rates on average outstanding commercial, mortgage
and consumer loans compared to the same period in 2008. Earning asset yields on average outstanding
loans decreased due mainly to a decrease in the targeted short-term interest
rate, as established by the Federal Reserve Bank (FRB), which resulted in a
decrease in the prime rate from 5.25% at March 31, 2008 to 3.25% at March 31,
2009. Average outstanding commercial loan balances increased by $43.2 million,
or 6.6% from March 31, 2008 to March 31, 2009. Additionally, average outstanding total
investment securities increased by $36.6 million or 18.5% from March 31,
2008 to March 31,
21
Table
of Contents
2009. Earning asset yields on average outstanding
investment securities decreased slightly from 5.8% at March 31, 2008 to
5.7% at March 31, 2009.
For
the three months ended March 31, 2009, total interest expense decreased
13.8% to $7.1 million compared to $8.2 million for the same period in
2008. The decrease in total interest
expense for the three months ended March 31, 2009 resulted primarily from
a decrease in average rates paid on average outstanding interest-bearing
deposits and short-term borrowings compared to the same period in 2008. The average rate paid on total average
outstanding interest-bearing liabilities decreased from 3.62% at March 31,
2008 to 2.87% at March 31, 2009.
Total cost of funds decreased to 2.59% in 2009 from 3.25% in 2008. The decrease in total average
interest-bearing deposit rates was the result of managements disciplined
approach to deposit pricing in response to the decrease in short-term interest
rates. Total average interest-bearing
deposits increased $156.2 million or 24.7% from March 31, 2008 to March 31,
2009 due primarily to growth in time deposits.
The average rate paid on short-term borrowings and securities sold under
agreements to repurchase increased from 3.39% at March 31, 2008 to 3.56%
at March 31, 2009. The decrease in
short-term borrowings and securities sold under agreements to repurchase rates
was the result of decreases in targeted short term interest rates, as
established by the FRB. Average
short-term borrowings and securities sold under agreements to repurchase
decreased $66.1 million or 33.8% from March 31, 2008 to March 31,
2009 due primarily to the growth in total average interest-bearing deposits.
Provision for Loan Losses
The
provision for loan losses for the three months ended March 31, 2009 was
$825,000 compared to $410,000 for the same period of 2008. Net charge-offs to average loans was 0.36%
annualized for the three months ended March 31, 2009 compared to 0.46% for
the year ended December 31, 2008.
The provision reflects the amount deemed appropriate by management to
provide an adequate reserve to meet the present risk characteristics of the
loan portfolio. Management continues to
evaluate and classify the credit quality of the loan portfolio utilizing a
qualitative and quantitative internal loan review process and, based on the
results of the analysis at March 31, 2009, management has determined that
the current allowance for loan losses is adequate as of such date. The ratio of the allowance for loan losses to
loans outstanding at March 31, 2009 and December 31, 2008 was .92%
and .92%, respectively. Please see
further discussion under the caption Allowance for Loan Losses.
Other Non-Interest Income
Total
other income for the three months ended March 31, 2009 totaled $5.5
million, an increase of $0.9 million, or 19.2%, from other income of $4.6
million for the same period in 2008.
Revenue
from customer service fees increased 6.1% to $658,000 for the first three
months of 2009 as compared to $620,000 for the same period in 2008. The increase in customer service fees for the
comparative three months periods is primarily due to an increase in commercial
account analysis fees, uncollected funds charges and non-sufficient funds
charges.
Revenue from mortgage banking activities decreased
17.3% to $267,000 for the first three months of 2009 as compared to $323,000
for the same period in 2008. The
decrease in mortgage banking activities for the comparative three month periods
is primarily due to a decline in the volume of loans sold into the secondary
mortgage market. The Company operates
its mortgage banking activities through VIST Mortgage, a division of VIST Bank.
Revenue
from commissions and fees from insurance sales increased 10.2% to $3.0 million
for the first three months of 2009 as compared to $2.7 million for the same
period in 2008. The increase in
commissions and fees from insurance sales for the comparative three month
periods is mainly attributed to an increase in commission income on group
insurance products offered through VIST Insurance, LLC, a wholly owned
subsidiary of the Company.
Revenue
from brokerage and investment advisory commissions and fees increased 39.2% to
$330,000 in the first three months of 2009 as compared to $237,000 for the same
period in 2008. The increase in
brokerage and investment advisory commissions and fees for the comparative
three month periods is due primarily to an increase in investment advisory
service activity offered through VIST Capital Management, LLC, a wholly owned
subsidiary of the Company.
Revenue
from earnings on investment in life insurance decreased 54.8% to $76,000 in the
first three months of 2009 as compared to $168,000 for the same period in
2008. The decrease in earnings on
investment in life insurance for
22
Table
of Contents
the comparative three month
periods is due primarily to decreased earnings credited on the Companys
separate investment account, bank owned life insurance (BOLI).
Other
income, including gain on sale of loans, increased 134.1% to $1.1 million for
the first three months of 2009 as compared to $457,000 for the same period in
2008. The increase in other income for
the comparative three month periods is due primarily to a settlement of a
previously accrued contingent payment and an increase in network interchange
income.
Net
securities gains were $159,000 for the three months ended March 31, 2009
compared to net securities gains of $141,000 for the same period in 2008. The net securities gains for the first three
months of 2009 are primarily from the planned sale of existing agency
mortgage-backed securities. For the
three months ended March 31, 2008, net security gains were due primarily
to the mandatory redemption of VISA Inc. common stock acquired as a result of
VISAs initial public offering.
Other Non-Interest Expense
Total other expense for the three months ended March 31,
2009 totaled $11.3 million, an increase of $0.2 million, or 1.7%, over total
other expense of $11.1 million for the same period in 2008.
Salaries
and benefits decreased slightly remaining at $5.7 million for the three months
ended March 31, 2009 similar to the $5.7 million for the three months
ended March 31, 2008. Included in salaries
and benefits for the three months ended March 31, 2009 and March 31,
2008 were pre-tax stock-based compensation costs of $20,000 and $77,000,
respectively. Also included in salaries
and benefits for the three months ended March 31, 2009 were total
commissions paid of $384,000 on mortgage origination activity through VIST
Mortgage, insurance sales activity through VIST Insurance and investment
advisory sales through VIST Capital Management compared to $389,000 for the
same period in 2008. Included in
salaries and benefits expense for the three months ended March 31, 2008
are severance costs of approximately $51,000 relating to the outsourcing of the
Companys internal audit function and staff reductions in the mortgage banking
operation. Full-time equivalent (FTE)
employees decreased to 300 at March 31, 2009 from 316 at March 31,
2008.
Occupancy
expense and furniture and equipment expense decreased 7.0% to $1.7 million for
the first three months of 2009 as compared to $1.8 million for the same period
in 2008. The decrease in occupancy
expense and furniture and equipment expense for the comparative three month
periods is due primarily to a decrease in building lease expense, equipment
repairs expense, software maintenance expense, and equipment depreciation.
Marketing
and advertising expense decreased 58.9% to $270,000 for the first three months
of 2009 as compared to $657,000 for the same period in 2008. The decrease in marketing and advertising
expense is due primarily to a reduction in marketing costs associated with
market research, media space, media production and special events.
Professional
services expense increased 66.7% to $892,000 for the first three months of 2009
as compared to $535,000 for the same period in 2008. The increase in professional services expense
is due primarily to increases in legal fees associated with a settlement of a
previously accrued contingent payment, outsourcing of the Companys internal
audit function and other general Company business.
Outside
processing expense increased 16.0% to $951,000 for the first three months of
2009 as compared to $820,000 for the same period in 2008. The increase in outside processing expense is
due primarily to costs incurred for computer services, network fees, data-line
charges and internet banking expenses.
Insurance
expense increased 63.8% to $444,000 for the first three months of 2009 as
compared to $271,000 for the same period in 2008. The increase in insurance expense is due
primarily to higher FDIC deposit insurance premiums resulting from the
implementation of the new FDIC risk-related premium assessment.
Other
expense increased 5.8% to $1.2 million for the first three months of 2009 as
compared to $1.1 million for the same period in 2008. The increase in other expense is primarily
due primarily to an increase in foreclosure and other real estate expense.
23
Table of Contents
Income Taxes
Income
tax expense increased to $292,000 for the first three months of 2009 as
compared to $179,000 for the same period in 2008. The effective income tax rate for the Company
for the first three months ended March 31, 2009 was 15.4% compared to
10.3% for the same period of 2008. The
effective income tax rate increased primarily due to an increase in state tax expense
and tax exempt income remaining relatively flat while net income before income
taxes increased. Included in income tax
expense for the three months ended March 31, 2009 and 2008 is a federal
tax benefit from a $5,000,000 investment in an affordable housing, corporate
tax credit limited partnership.
Financial Condition
The
total assets of the Company at March 31, 2009 were $1.26 billion, an
increase of approximately $34.2 million, or 11.2% annualized, from $1.22
billion at December 31, 2008.
Mortgage Loans Held for
Sale
Mortgage
loans held for sale increased $558,000, or 97.8% annualized, to $2.8 million at
March 31, 2009 from $2.3 million at December 31, 2008. This increase is primarily related to an
increase in loans originated for sale into the secondary residential real
estate loan market through VIST Mortgage.
Securities Available for Sale
Investment
securities available for sale increased $11.8 million, or 20.2% annualized, to
$244.1 million at March 31, 2009 from $232.4 million at December 31,
2008. Investment securities are used to
supplement loan growth as necessary, to generate interest and dividend income,
to manage interest rate risk, and to provide liquidity. The increase in investment securities
available for sale was due to the purchases of mortgage-backed securities used
as collateral for the Companys public funds and structured borrowings.
Loans
Total
loans, net of allowance for loan losses, rose slightly to $878.4 million, or
0.1% annualized, at March 31, 2009 from $878.2 million at December 31,
2008.
The
components of loans were as follows:
|
|
March 31,
|
|
December 31,
|
|
|
|
2009
|
|
2008
|
|
|
|
(Dollar amounts in thousands)
|
|
Residential real
estate - 1 to 4 family
|
|
$
|
181,743
|
|
$
|
185,866
|
|
Residential real
estate - multi family
|
|
$
|
33,778
|
|
34,869
|
|
Commercial
|
|
171,982
|
|
174,219
|
|
Commercial,
secured by real estate
|
|
320,026
|
|
326,442
|
|
Construction
|
|
92,503
|
|
89,556
|
|
Consumer
|
|
4,157
|
|
3,995
|
|
Home equity
lines of credit
|
|
83,189
|
|
72,137
|
|
Loans
|
|
887,378
|
|
887,084
|
|
|
|
|
|
|
|
Net deferred
loan fees
|
|
(788
|
)
|
(779
|
)
|
Allowance for
loan losses
|
|
(8,165
|
)
|
(8,124
|
)
|
Loans, net of
allowance for loan losses
|
|
$
|
878,425
|
|
$
|
878,181
|
|
Loans
secured by real estate (not including home equity lending products) decreased
$11.6 million, or 8.5% annualized, to $535.5 million at March 31, 2009
from $547.2 million at December 31, 2008.
This decrease is primarily due to a decrease in commercial real estate
loan originations and commercial real estate loans moved to real estate owned
included in other assets.
24
Table of Contents
Total
commercial loans decreased to $492.0 million at March 31, 2009 from $500.7
million at December 31, 2008, a decrease of $8.7 million, or 6.9%
annualized. The decrease is due
primarily to a decrease in commercial real estate loans outstanding. There were no SBA loans sold during the
period.
Allowance for Loan Losses
The
allowance for loan losses at March 31, 2009 was $8.2 million compared to
$8.1 million at December 31, 2008.
The allowance at March 31, 2009 was 0.92% of outstanding loans
compared to 0.92% of outstanding loans at December 31, 2008. The provision for loan losses for the three
months ended March 31, 2009 was $825,000 compared to $410,000 for the same
period in 2008. The increase in the
provision is due primarily to an increase in outstanding loans and the result
of managements evaluation and classification of the credit quality of the loan
portfolio utilizing a qualitative and quantitative internal loan review
process. At March 31, 2009, total
non-performing loans were $8.6 million or 1.0% of total loans compared to $10.8
million or 1.2% of total loans at December 31, 2008. The $2.2 million decrease in non-performing
loans from December 31, 2008 to March 31, 2009, was due primarily to
three commercial real estate loans totaling approximately $6.0 million
transferred to other real estate owned offset by net additions to
non-performing loans of approximately $4.0 million. At March 31, 2009, $4.4 million in
commercial properties transferred to other real estate owned were under
contract to sell. For the three months
ended March 31, 2009, net charge-offs to average loans was 0.36%
annualized as compared to 0.46% for the three months ended December 31,
2008.
The
allowance for loan losses is an amount that management believes to be adequate to
absorb potential losses in the loan portfolio.
Additions to the allowance are charged through the provision for loan
losses. Loans deemed to be uncollectible
are charged against the allowance for loan losses, and subsequent recoveries,
if any, are credited to the allowance.
Management regularly assesses the adequacy of the allowance by
performing both quantitative and qualitative evaluations of the loan portfolio,
including such factors as charge-off history, the level of delinquent loans,
the current financial condition of specific borrowers, the value of any
underlying collateral, risk characteristics in the loan portfolio, local and
national economic conditions, and other relevant factors. Significant loans are individually analyzed,
while other smaller balance loans are evaluated by loan category. This
evaluation is inherently subjective as it requires material estimates that may
be susceptible to change. Based upon the
results of such reviews, management believes that the allowance for loan losses
at March 31, 2009 was adequate to absorb credit losses inherent in the
portfolio at that date.
The
following table shows the activity in the Companys allowance for loan losses:
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
|
2009
|
|
2008
|
|
|
|
(Dollar amounts in thousands)
|
|
|
|
|
|
|
|
Balance of
allowance for loan losses, beginning of period
|
|
$
|
8,124
|
|
$
|
7,264
|
|
Loans
charged-off:
|
|
|
|
|
|
Commercial,
financial and agricultural
|
|
(739
|
)
|
(384
|
)
|
Real estate
mortgage
|
|
|
|
(105
|
)
|
Consumer
|
|
(70
|
)
|
(13
|
)
|
Total loans
charged-off
|
|
(809
|
)
|
(502
|
)
|
Recoveries of
loans previously charged-off:
|
|
|
|
|
|
Commercial,
financial and agricultural
|
|
11
|
|
2
|
|
Real estate
mortgage
|
|
|
|
|
|
Consumer
|
|
14
|
|
7
|
|
Total recoveries
|
|
25
|
|
9
|
|
Net loans
(charged-off) recoveries
|
|
(784
|
)
|
(493
|
)
|
Provision for
loan losses
|
|
825
|
|
410
|
|
Balance, end of
period
|
|
$
|
8,165
|
|
$
|
7,181
|
|
|
|
|
|
|
|
Net charge-offs
to average loans (annualized)
|
|
0.36
|
%
|
0.24
|
%
|
Allowance for
loan losses to loans outstanding
|
|
0.92
|
%
|
0.87
|
%
|
Loans
outstanding at end of period (net of unearned income)
|
|
$
|
886,590
|
|
$
|
828,065
|
|
Average balance
of loans outstanding during the period
|
|
$
|
886,482
|
|
$
|
827,730
|
|
The
following table summarizes the Companys non-performing assets:
25
Table
of Contents
|
|
March 31,
|
|
December 31,
|
|
|
|
2009
|
|
2008
|
|
|
|
(Dollar amounts in thousands)
|
|
Non-accrual
loans:
|
|
|
|
|
|
Real estate
|
|
$
|
7,290
|
|
$
|
2,947
|
|
Consumer
|
|
|
|
459
|
|
Commercial,
financial and agricultural
|
|
750
|
|
7,298
|
|
Total
|
|
8,040
|
|
10,704
|
|
|
|
|
|
|
|
Loans past due
90 days or more and still accruing:
|
|
|
|
|
|
Real estate
|
|
557
|
|
28
|
|
Consumer
|
|
6
|
|
|
|
Commercial,
financial and agricultural
|
|
4
|
|
112
|
|
Total
|
|
567
|
|
140
|
|
|
|
|
|
|
|
Total
non-performing loans
|
|
8,607
|
|
10,844
|
|
Other real
estate owned
|
|
6,661
|
|
263
|
|
Total
non-performing assets
|
|
$
|
15,268
|
|
$
|
11,107
|
|
|
|
|
|
|
|
Troubled debt
restructurings
|
|
285
|
|
285
|
|
|
|
|
|
|
|
Non-performing
loans to loans outstanding at end of period (net of unearned income)
|
|
0.97
|
%
|
1.22
|
%
|
Non-performing
assets to loans outstanding at end of period (net of unearned income) plus
OREO
|
|
1.71
|
%
|
1.25
|
%
|
Premises and Equipment
Components
of premises and equipment were as follows:
|
|
March 31,
|
|
December 31,
|
|
|
|
2009
|
|
2008
|
|
|
|
(Dollar amounts in thousands)
|
|
|
|
|
|
|
|
Land and land
improvements
|
|
$
|
263
|
|
$
|
263
|
|
Buildings
|
|
873
|
|
873
|
|
Leasehold
improvements
|
|
3,913
|
|
3,910
|
|
Furniture and
equipment
|
|
11,664
|
|
11,567
|
|
|
|
16,713
|
|
16,613
|
|
|
|
|
|
|
|
Less:
accumulated depreciation
|
|
10,028
|
|
10,022
|
|
Premises and
equipment, net
|
|
$
|
6,685
|
|
$
|
6,591
|
|
Deposits
Total
deposits at March 31, 2009 were $930.7 million compared to $850.6 million
at December 31, 2008, an increase of $80.1 million, or 37.6% annualized.
The
components of deposits were as follows:
26
Table
of Contents
|
|
March 31,
|
|
December 31,
|
|
|
|
2009
|
|
2008
|
|
|
|
(Dollar amounts in thousands)
|
|
|
|
|
|
|
|
Demand,
non-interest bearing
|
|
$
|
106,510
|
|
$
|
108,645
|
|
Demand, interest
bearing
|
|
248,021
|
|
231,504
|
|
Savings
|
|
72,413
|
|
75,706
|
|
Time, $100,000
and over
|
|
261,405
|
|
195,812
|
|
Time, other
|
|
242,313
|
|
238,933
|
|
Total deposits
|
|
$
|
930,662
|
|
$
|
850,600
|
|
The increase in interest bearing deposits is due primarily to an
increase in time deposits with the majority of these deposits maturing in one
year or less. Management continues to
promote these types of deposits through a disciplined pricing strategy as a
means of managing the Companys overall cost of funds, as well as, managements
continuing emphasis on commercial and retail marketing programs and customer
service.
Borrowings
Total
debt decreased by $46.2 million, or 75.9% annualized, to $197.0 million at March 31,
2009 from $243.2 million at December 31, 2008. The decrease in total debt and borrowings was
primarily due to an increase in organic growth in total deposits of $80.1 to
$930.7 million at March 31, 2009 from $850.6 million at December 31,
2008.
Off Balance Sheet Commitments
The
Bank is party to financial instruments with off-balance sheet risk in the
normal course of business to meet the financing needs of its customers. These financial instruments include
commitments to extend credit and letters of credit. Those instruments involve, to varying
degrees, elements of credit and interest rate risk in excess of the amount
recognized in the balance sheet.
The
Banks exposure to credit loss in the event of nonperformance by the other
party to the financial instrument for commitments to extend credit and letters
of credit is represented by the contractual amount of those instruments. The Bank uses the same credit policies in
making commitments and conditional obligations as it does for on-balance sheet
instruments.
A summary of the contractual amount of the Companys financial
instrument commitments is as follows:
|
|
March 31,
|
|
December 31,
|
|
|
|
2009
|
|
2008
|
|
|
|
(Dollar amounts in thousands)
|
|
Commitments to
extend credit:
|
|
|
|
|
|
Loan origination
committments
|
|
$
|
53,122
|
|
$
|
59,093
|
|
Unused home
equity lines of credit
|
|
46,188
|
|
48,919
|
|
Unused business
lines of credit
|
|
150,120
|
|
138,181
|
|
Total
commitments to extend credit
|
|
$
|
249,430
|
|
$
|
246,193
|
|
Standby letters
of credit
|
|
$
|
13,620
|
|
$
|
14,479
|
|
Capital
Total
shareholders equity increased $1.2 million, or 4.1% annualized, to $123.7
million at March 31, 2009 from $122.5 million at December 31,
2008. The increase is the net result of
net income for the period of $1.6 million less common stock dividends declared
of $573,000, preferred stock dividends declared of $403,000, proceeds of
$248,000 from the issuance of shares of common stock under the Companys
employee benefit and director compensation plans, net decrease in the
unrealized loss on securities available for sale and cash flow hedges, net of
tax, of $78,000, the reissuance of treasury stock of $424,000 primarily in
connection with earn-outs of contingent consideration to principals resulting
from the Companys acquisition of VIST Insurance, and stock-based compensation
costs of $20,000.
27
Table
of Contents
Federal
bank regulatory agencies have established certain capital-related criteria that
must be met by banks and bank holding companies. The measurements which
incorporate the varying degrees of risk contained within the balance sheet and
exposure to off-balance sheet commitments were established to provide a
framework for comparing different institutions.
Regulatory guidelines require that Tier 1 capital and total risk-based
capital to risk-adjusted assets must be at least 4.0% and 8.0%, respectively.
Other
than Tier 1 capital restrictions on the Companys junior subordinated debt
discussed later, the Company is not aware of any pending recommendations by
regulatory authorities that would have a material impact on the Companys
capital, resources, or liquidity if they were implemented, nor is the Company
under any agreements with any regulatory authorities.
The
adequacy of the Companys capital is reviewed on an ongoing basis with regard
to size, composition and quality of the Companys resources. An adequate
capital base is important for continued growth and expansion in addition to
providing an added protection against unexpected losses.
An
important indicator in the banking industry is the leverage ratio, defined as
the ratio of common shareholders equity less intangible assets (Tier 1
risk-based capital), to average quarterly assets less intangible assets. The leverage ratio at March 31, 2009 was
8.98% compared to 9.16% at December 31, 2008. This decrease is primarily the result of an
increase in average total assets. For
the three months ended March 31, 2009, the capital ratios were above
minimum regulatory guidelines.
As
required by the federal banking regulatory authorities, guidelines have been
adopted to measure capital adequacy.
Under the guidelines, certain minimum ratios are required for core
capital and total capital as a percentage of risk-weighted assets and other
off-balance sheet instruments. For the
Company, Tier 1 risk-based capital consists of common shareholders equity less
intangible assets plus the junior subordinated debt, and Tier 2 risk-based
capital includes the allowable portion of the allowance for loan losses,
currently limited to 1.25% of risk-weighted assets. By regulatory guidelines, the separate
component of equity for unrealized appreciation or depreciation on available
for sale securities is excluded from Tier 1 risk-based capital. In addition, federal banking regulatory
authorities have issued a final rule restricting the Companys junior
subordinated debt to 25% of Tier 1 risk-based capital. Amounts of junior subordinated debt in excess
of the 25% limit generally may be included in Tier 2 risk-based capital. The final rule provides a five-year
transition period, ending March 31, 2009.
Recently, the Federal Reserve extended this transition period to March 31,
2011. This will allow bank holding
companies more flexibility in managing their compliance with these new limits
in light of the current conditions of the capital markets. At March 31,
2009, the entire amount of these securities was allowable to be included as
Tier 1 risk-based capital for the Company.
For the periods ended March 31, 2009 and December 31, 2008,
the Companys capital ratios were above minimum regulatory guidelines.
On
December 19, 2008, the Company issued to the United States Department of
the Treasury (Treasury) 25,000 shares of Series A, Fixed Rate,
Cumulative Perpetual Preferred Stock (Series A Preferred Stock), with a
par value of $0.01 per share and a liquidation preference of $1,000 per share,
and a warrant (Warrant) to purchase 364,078 shares of the Companys common
stock, par value $5.00 per share, for an aggregate purchase price of
$25,000,000 in cash. The Warrant has a
10-year term and is immediately exercisable upon its issuance, with an exercise
price, subject to anti-dilution adjustments, equal to $10.30 per share of
common stock.
The
Series A Preferred Stock qualifies as Tier 1 capital and will pay
cumulative dividends at a rate of 5% per annum for the first five years, and 9%
per annum thereafter. The Series A
Preferred Stock may be redeemed at any time following consultation by the
Companys primary bank regulator and Treasury.
Under FAQs (Frequently Asked Questions) issued recently by Treasury,
participants in the Capital Purchase Program desiring to repay part of an
investment by Treasury must repay a minimum of 25% of the issue price of the
preferred stock.
28
Table
of Contents
The
following table sets forth the Companys risk-based capital amounts and ratios.
|
|
March 31,
|
|
December 31,
|
|
|
|
2009
|
|
2008
|
|
|
|
(Dollar amounts in thousands)
|
|
|
|
|
|
|
|
Tier I
|
|
|
|
|
|
Common
shareholders equity excluding unrealized gains (losses) on securities
|
|
$
|
123,736
|
|
$
|
122,489
|
|
Disallowed
intangible assets
|
|
(44,169
|
)
|
(44,347
|
)
|
Junior
subordinated debt
|
|
19,655
|
|
19,561
|
|
Tier II
|
|
|
|
|
|
Allowable
portion of allowance for loan losses
|
|
8,165
|
|
8,124
|
|
Unrealized
losses on available for sale equity securities
|
|
7,787
|
|
8,096
|
|
Total risk-based
capital
|
|
$
|
115,174
|
|
$
|
113,923
|
|
Risk adjusted
assets (including off-balance sheet exposures)
|
|
$
|
903,043
|
|
$
|
882,740
|
|
|
|
|
|
|
|
Leverage ratio
|
|
8.98
|
%
|
9.16
|
%
|
Tier I
risk-based capital ratio
|
|
11.85
|
%
|
11.99
|
%
|
Total risk-based
capital ratio
|
|
12.75
|
%
|
12.91
|
%
|
The
Company is not aware of any pending recommendations by regulatory authorities
that would have a material impact on the Companys capital resources, or
liquidity if they were implemented, nor is the Company under any agreements
with any regulatory authorities.
Junior Subordinated Debt
On
March 9, 2000 and September 26, 2002, the Company established First
Leesport Capital Trust I and Leesport Capital Trust II, respectively, in which
the Company owns all of the common equity.
First Leesport Capital Trust I issued $5 million of mandatory redeemable
capital securities carrying an interest rate of 10.875%, and Leesport Capital
Trust II issued $10 million of mandatory redeemable capital securities carrying
a floating interest rate of 3 month LIBOR plus 3.45%. These debentures are the sole assets of the
Trusts. These securities must be
redeemed in March 2030 and September 2032, respectively, but may be
redeemed on or after March 2010 and November 2007, respectively, or
earlier in the event that the interest expense becomes non-deductible for
federal income tax purposes or if the treatment of these securities no longer
qualifies as Tier I capital for the Company.
In October 2002, the Company entered into an interest rate swap
agreement that effectively converts the First Leesport Capital Trust I $5
million of fixed-rate capital securities to a floating interest rate of nine
month LIBOR plus 5.25%. In September 2008,
the Company entered into an interest rate swap agreement that effectively
converts the Leesport Capital Trust II $10 million of adjustable-rate capital
securities to a fixed interest rate of 7.25%.
The effective date of the Leesport Capital Trust II swap transaction was
February 2009.
On
June 26, 2003, Madison established Madison Statutory Trust I in which the
Company owns all of the common equity.
Madison Statutory Trust I issued $5 million of mandatory redeemable
capital securities carrying a floating interest rate of three month LIBOR plus
3.10%. These debentures are the sole
assets of the Trusts. These securities
must be redeemed in June 2033, but may be redeemed on or after September 26,
2008 or earlier in the event that the interest expense becomes non-deductible
for federal income tax purposes or if the treatment of these securities no
longer qualifies as Tier I capital for the Company. In September 2008, the Company entered
into an interest rate swap agreement that effectively converts the Madison
Statutory Trust I $5 million of adjustable-rate capital securities to a fixed
interest rate of 6.90%. The effective
date of the swap transaction was March 2009.
Liquidity and Interest Rate Sensitivity
The
banking industry has been required to adapt to an environment in which interest
rates may be volatile and in which deposit deregulation has provided customers
with the opportunity to invest in liquid, interest rate-sensitive
deposits. The banking industry has
adapted to this environment by using a process known as asset/liability
management.
29
Table
of Contents
Adequate
liquidity means the ability to obtain sufficient cash to meet all current and
projected needs promptly and at a reasonable cost. These needs include deposit withdrawal,
liability runoff, and increased loan demand.
The principal sources of liquidity are deposit generation, overnight
federal funds transactions with other financial institutions, investment
securities portfolio maturities and cash flows, and maturing loans and loan
payments. The Bank can also package and
sell residential mortgage loans into the secondary market. Other sources of liquidity are term
borrowings from the Federal Home Loan Bank, and the discount window of the
Federal Reserve Bank. In view of all
factors involved, the Banks management believes that liquidity is being
maintained at an adequate level.
At
March 31, 2009, the Company had a total of $197.0 million, or 15.7%, of
total assets in borrowed funds. These
borrowings included $127.2 million of repurchase agreements, $50 million of
term borrowings with the Federal Home Loan Bank, and $19.8 million in junior
subordinated debt. The FHLB borrowings
have final maturities ranging from May 2009 through January 2011 at
interest rates ranging from 3.45% to 4.28%.
At March 31, 2009, the Company had a maximum borrowing capacity
with the Federal Home Loan Bank of approximately $238.3 million. The Company remains slightly asset sensitive
and will continue its strategy to originate adjustable rate commercial and
installment loans and use investment security cash flows and non-interest bearing
and core deposits and repurchase agreements to reduce the overnight borrowings
to maintain a more neutral gap position.
Asset/liability
management is intended to provide for adequate liquidity and interest rate
sensitivity by matching interest rate-sensitive assets and liabilities and
coordinating maturities on assets and liabilities. With the exception of the majority of
residential mortgage loans, loans generally are written having terms that
provide for a readjustment of the interest rate at specified times during the
term of the loan. In addition, interest rates offered for all types of deposit
instruments are reviewed weekly and are established on a basis consistent with
funding needs and maintaining a desirable spread between cost and return.
During
October 2002, the Company entered into an interest rate swap agreement
with a notional amount of $5 million.
This derivative financial instrument effectively converted fixed
interest rate obligations of outstanding junior subordinated debt to variable
interest rate obligations, decreasing the asset sensitivity of its balance
sheet by more closely matching the Companys variable rate assets with variable
rate liabilities. The Company considers
the credit risk inherent in the contracts to be negligible.
During
2008, the Company entered into two interest rate swaps to manage its exposure
to interest rate risk. The interest rate
swap transactions involved the exchange of the Companys floating rate interest
rate payment on its $15 million in floating rate junior subordinated debt for a
fixed rate interest payment without the exchange of the underlying principal
amount. The cumulative change in fair
value of the hedging derivative, to the extent that it is expected to be offset
by the cumulative change in anticipated interest cash flows from the hedged
exposure, will be deferred and reported as a component of other comprehensive
income or loss (OCI). Any hedge
ineffectiveness will be charged to current earnings.
30
Table
of Contents
Item
3 - Quantitative and Qualitative Disclosures about Market Risk
There
have been no material changes in the Companys assessment of its sensitivity to
market risk since its presentation in the Annual Report on Form 10-K for
the year ended December 31, 2008 filed with the SEC.
Item
4 - Controls and Procedures
The
Companys management, with the participation of the Chief Executive Officer and
the Chief Financial Officer, has evaluated the effectiveness of the design and
operation of the Companys disclosure controls and procedures, as such term is
defined under Rule 13a-15(e) promulgated under the Securities
Exchange Act of 1934, as amended, as of March 31, 2009. Based on that evaluation, the Companys Chief
Executive Officer and Chief Financial Officer concluded that the Companys
disclosure controls and procedures are effective as of such date.
There
have been no material changes in the Companys internal control over financial
reporting during the first quarter of 2009 that have materially affected, or
are reasonably likely to materially affect, the Companys internal control over
financial reporting.
31
Table
of Contents
PART II
- OTHER INFORMATION
Item 1
Legal
Proceedings None
Item 1A
Risk Factors
There are no material changes to the risk factors set forth in Part I,
Item 1A, Risk Factors, of the Companys Annual Report on Form 10-K for
the year ended December 31, 2008.
Please refer to that section for disclosures regarding the risks and
uncertainties related to the companys business.
Item 2
Unregistered
Sales of Equity Securities and Use of Proceeds
No shares of the Companys common stock were repurchased by the Company
during the three month period ended March 31, 2009. The maximum number of shares that may yet be
purchased under the Companys current stock repurchase program is 115,000
shares.
Item 3
Defaults Upon
Senior Securities None
Item 4
Submission of
Matters to a Vote of Security Holders None
Item 5
Other
Information - None
32
Table
of Contents
Item 6
Exhibits
Exhibit No.
|
|
Title
|
|
|
|
3.1
|
|
|
Articles of Incorporation of VIST Financial Corp.
(incorporated by reference to Exhibit 3.1 to Registrants Current Report
on Form 8-K filed on March 7, 2008).
|
|
|
|
|
3.2
|
|
|
Bylaws of VIST Financial Corp. (incorporated by
reference to Exhibit 3.2 to Registrants Current Report on Form 8-K
filed on March 7, 2008).
|
|
|
|
|
31.1
|
|
|
Rule 13a-14(a)/15d-14(a) Certification of
Chief Executive Officer
|
|
|
|
|
31.2
|
|
|
Rule 13a-14(a)/15d-14(a) Certification of
Chief Financial Officer
|
|
|
|
|
32.1
|
|
|
Rule 1350 Certification of Chief Executive
Officer and Chief Financial Officer
|
SIGNATURES
In accordance with the requirements of the Exchange Act,
the Registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
|
|
VIST FINANCIAL CORP.
|
|
|
(Registrant)
|
|
|
|
Dated: May 8, 2009
|
By
|
/s/Robert D. Davis
|
|
|
|
|
|
Robert D. Davis
|
|
|
President and Chief Executive Officer
|
|
|
|
Dated: May 8, 2009
|
By
|
/s/Edward C. Barrett
|
|
|
|
|
|
Edward C. Barrett
|
|
|
Executive Vice President and Chief Financial Officer
|
33
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