NOTE H – INVESTMENT AND MORTGAGE-BACKED SECURITIES (Continued)
The unrealized losses, categorized by the length of time of continuous loss position, and the fair value of related securities available for sale at June 30, 2013 and December 31, 2012 are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In Thousands)
|
|
|
June 30, 2013:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage-backed securities-GSEs
|
|
$
|
3,532
|
|
|
$
|
92
|
|
|
$
|
2,146
|
|
|
$
|
204
|
|
|
$
|
5,678
|
|
|
$
|
295
|
|
|
U.S. Government securities
|
|
|
3,376
|
|
|
|
108
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3,376
|
|
|
|
108
|
|
|
Obligations of state and political subdivisions
|
|
|
463
|
|
|
|
35
|
|
|
|
-
|
|
|
|
-
|
|
|
|
463
|
|
|
|
35
|
|
|
Mutual funds
|
|
|
973
|
|
|
|
37
|
|
|
|
2,977
|
|
|
|
201
|
|
|
|
3,950
|
|
|
|
238
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
8,344
|
|
|
$
|
272
|
|
|
$
|
5,123
|
|
|
$
|
405
|
|
|
$
|
13,467
|
|
|
$
|
677
|
|
|
December 31, 2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage-backed securities-GSEs
|
|
$
|
72
|
|
|
$
|
2
|
|
|
$
|
2,645
|
|
|
$
|
161
|
|
|
$
|
2,717
|
|
|
$
|
163
|
|
|
Obligation of state and political subdivisions
|
|
|
496
|
|
|
|
2
|
|
|
|
-
|
|
|
|
-
|
|
|
|
496
|
|
|
|
2
|
|
|
Corporate bond
|
|
|
-
|
|
|
|
-
|
|
|
|
482
|
|
|
|
18
|
|
|
|
482
|
|
|
|
18
|
|
|
Mutual funds
|
|
|
-
|
|
|
|
-
|
|
|
|
3,048
|
|
|
|
87
|
|
|
|
3,048
|
|
|
|
87
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
568
|
|
|
$
|
4
|
|
|
$
|
6,175
|
|
|
$
|
266
|
|
|
$
|
6,743
|
|
|
$
|
270
|
|
Management evaluates securities for other-than-temporary-impairment (“OTTI”) at least on a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation.
In determining OTTI under the ASC Topic 320, management considers many factors, including: (1) the length of time and the extent to which the fair value has been less than amortized cost; (2) the financial condition and near term prospects of the issuer; (3) whether the market decline was affected by macroeconomic conditions, and (4) whether the entity has the intent to sell the debt security or more likely than not will be required to sell the debt security before its anticipated recovery. The assessment of whether an other-than-temporary-impairment decline exists involves a high degree of subjectivity and judgment and is based on information available to management at a point in time. An OTTI is deemed to have occurred if there has been an adverse change in the remaining expected future cash flows.
When OTTI for debt securities, occurs under the model, the amount of the OTTI recognized in earnings depends on whether an entity intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis. If an entity intends to sell or more likely than not will be required to sell the security before recovery of its amortized cost basis, the OTTI shall be recognized in earnings equal to the entire difference between the investment’s amortized cost basis and its fair value at the balance sheet date. If any entity does not intend to sell the security and it is not more likely than not that the entity will be required to sell the security before recovery of its amortized cost basis, the OTTI shall be separated into the amount representing the credit loss and the amount related to all other factors. The amount of the total OTTI related to the credit loss is determined based on the present value of cash flows expected to be collected and is recognized in earnings. The amount of the total OTTI related to other factors shall be recognized in other comprehensive income, net of applicable tax benefit. The previous amortized cost basis less the OTTI recognized in earnings shall become the new amortized cost basis of the investment.
NOTE H – INVESTMENT AND MORTGAGE-BACKED SECURITIES (Continued)
As of June 30, 2013, the Company’s available for sale portfolio in an unrealized loss position consisted of thirty-six securities. There was one mutual fund, and twenty-one mortgage-backed securities in an unrealized loss position for more than twelve months at June 30, 2013. As of June 30, 2013, there was one mutual fund, one municipal, three government agencies, and nine mortgage backed securities in an unrealized loss position for less than twelve months. As of December 31, 2012, the Company’s available for sale portfolio in an unrealized loss position consisted of twenty-nine securities. There was one mutual fund, one corporate bond, and nineteen mortgage backed securities in an unrealized loss position for more than twelve months at December 31, 2012. There were three mortgage-backed securities, one corporate bond and four government agencies in a loss position for less than twelve months at December 31, 2012.
The available for sale mutual funds are CRA investments that had an unrealized loss for more than twelve months of approximately $201 thousand and $87 thousand at June 30, 2013 and December 31, 2012, respectively. They have been in a loss position for the last two years with the greatest unrealized loss being approximately $201 thousand. Management does not believe the mutual fund securities available for sale are other-than-temporarily impaired due to reasons of credit quality. Unrealized losses in the mortgage-backed securities and corporate bond categories are due to the current interest rate environment and not due to credit concerns. The Company does not intend to sell these securities and it is not more likely than not that we will be required to sell these securities. As of June 30, 2013, management believes the impairments are temporary and no impairment loss has been realized in the Company’s consolidated income statement for the six months ended June 30, 2013.
Proceeds from the sale of securities were $500 thousand with a $1 thousand gain for sale during the six months ended June 30, 2013. Proceeds from the sale of securities available for sale amounted to $1.0 for both the three and six months ended June 30, 2012, with gross realized gains of $13 thousand, and gross realized losses of $-0- thousand.
The amortized cost and estimated fair value of securities available for sale at June 30, 2013 by contractual maturity are shown below. Expected maturities will differ from contractual maturities as borrowers may have the right to call or prepay obligations with or without call or prepayment penalties:
|
|
|
Amortized Cost
|
|
|
Fair Value
|
|
|
|
|
(in Thousands)
|
|
|
|
|
|
|
|
|
|
|
U.S. Government, Obligations of Political Subdivisions and Corporate bond:
|
|
|
|
|
|
|
|
After one to five years
|
|
$
|
5,235
|
|
|
$
|
5,445
|
|
|
After five to ten years
|
|
|
4,000
|
|
|
|
4,025
|
|
|
After ten years
|
|
|
2,559
|
|
|
|
2,577
|
|
|
Total
|
|
|
11,794
|
|
|
|
12,047
|
|
|
Mortgage-backed securities
|
|
|
10,285
|
|
|
|
10,116
|
|
|
Equity securities
|
|
|
50
|
|
|
|
56
|
|
|
Mutual funds
|
|
|
4,189
|
|
|
|
3,951
|
|
|
Total
|
|
$
|
26,318
|
|
|
$
|
26,170
|
|
NOTE H – INVESTMENT AND MORTGAGE-BACKED SECURITIES (Continued)
The following summarizes the amortized cost and estimated fair value of securities held to maturity at June 30, 2013 and December 31, 2012 with gross unrealized gains and losses therein:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In Thousands)
|
|
|
Held to maturity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Government (including agencies):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
After one through five years
|
|
$
|
61,216
|
|
|
$
|
-
|
|
|
$
|
1,363
|
|
|
$
|
59,853
|
|
|
After five through ten years
|
|
|
16,991
|
|
|
|
-
|
|
|
|
645
|
|
|
|
16,346
|
|
|
After ten years
|
|
|
1,000
|
|
|
|
-
|
|
|
|
27
|
|
|
|
973
|
|
|
|
|
|
79,207
|
|
|
|
-
|
|
|
|
2,035
|
|
|
|
77,172
|
|
|
Obligations of state and political subdivisions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less than one year
|
|
|
60
|
|
|
|
1
|
|
|
|
-
|
|
|
|
61
|
|
|
After one through five years
|
|
|
3,683
|
|
|
|
199
|
|
|
|
-
|
|
|
|
3,882
|
|
|
After five through ten years
|
|
|
6,177
|
|
|
|
379
|
|
|
|
36
|
|
|
|
6,520
|
|
|
After ten years
|
|
|
6,201
|
|
|
|
195
|
|
|
|
-
|
|
|
|
6,396
|
|
|
|
|
|
16,121
|
|
|
|
774
|
|
|
|
36
|
|
|
|
16,859
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate and other
|
|
|
1,592
|
|
|
|
9
|
|
|
|
-
|
|
|
|
1,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
96,920
|
|
|
$
|
783
|
|
|
$
|
2,071
|
|
|
$
|
95,632
|
|
NOTE H – INVESTMENT AND MORTGAGE-BACKED SECURITIES (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In Thousands)
|
|
|
Held to maturity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Government (including
agencies):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
After one through five years
|
|
$
|
27,999
|
|
|
$
|
66
|
|
|
$
|
-
|
|
|
$
|
28,065
|
|
|
After five through ten years
|
|
|
81,203
|
|
|
|
192
|
|
|
|
65
|
|
|
|
81,330
|
|
|
After ten years
|
|
|
1,000
|
|
|
|
1
|
|
|
|
-
|
|
|
|
1,001
|
|
|
|
|
|
110,202
|
|
|
|
259
|
|
|
|
65
|
|
|
|
110,396
|
|
|
Obligations of state and political subdivisions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
After one through five years
|
|
|
2,671
|
|
|
|
202
|
|
|
|
-
|
|
|
|
2,873
|
|
|
After five through ten years
|
|
|
4,830
|
|
|
|
514
|
|
|
|
-
|
|
|
|
5,344
|
|
|
After ten years
|
|
|
8,621
|
|
|
|
648
|
|
|
|
-
|
|
|
|
9,269
|
|
|
|
|
|
16,122
|
|
|
|
1,364
|
|
|
|
-
|
|
|
|
17,486
|
|
|
Corporate and other:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
After one through five years
|
|
|
1,490
|
|
|
|
14
|
|
|
|
-
|
|
|
|
1,504
|
|
|
After ten years
|
|
|
102
|
|
|
|
-
|
|
|
|
-
|
|
|
|
102
|
|
|
|
|
|
1,592
|
|
|
|
14
|
|
|
|
-
|
|
|
|
1,606
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
127,916
|
|
|
$
|
1,637
|
|
|
$
|
65
|
|
|
$
|
129,488
|
|
The unrealized losses, categorized by the length of time of continuous loss position, and the fair value of related securities held to maturity are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In Thousands)
|
|
|
June 30, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Government (including
agencies)
|
|
$
|
75,171
|
|
|
$
|
2,035
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
75,171
|
|
|
$
|
2,035
|
|
|
Obligations of state and
Political subdivisions
|
|
|
669
|
|
|
|
36
|
|
|
|
-
|
|
|
|
-
|
|
|
|
669
|
|
|
|
36
|
|
|
|
|
$
|
75,840
|
|
|
$
|
2,071
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
75,840
|
|
|
$
|
2,071
|
|
|
December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Government (including agencies)
|
|
$
|
15,933
|
|
|
$
|
65
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
15,933
|
|
|
$
|
65
|
|
|
|
|
$
|
15,933
|
|
|
$
|
65
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
15,933
|
|
|
$
|
65
|
|
NOTE H – INVESTMENT AND MORTGAGE-BACKED SECURITIES (Continued)
At June 30, 2013, the Company’s held to maturity debt securities portfolio consisted of approximately sixty-four securities, of which thirty-five were in an unrealized loss position for less than twelve months and none were in a loss position for more than twelve months. No OTTI charges were recorded for the three or six months ended June 30, 2013. The Company does not intend to sell these securities and it is not more likely than not that we will be required to sell these securities. Unrealized losses primarily relate to interest rate fluctuations and not credit concerns.
The amortized cost and estimated fair value of securities held to maturity at June 30, 2013 by contractual maturity are shown below. Expected maturities will differ from contractual maturities as borrowers may have the right to call or prepay obligations with or without call or prepayment penalties:
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortized Cost
|
|
Fair Value
|
|
|
|
|
(In Thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
One year or less
|
|
$
|
60
|
|
|
$
|
61
|
|
|
After one to five years
|
|
|
66,491
|
|
|
|
65,336
|
|
|
After five to ten years
|
|
|
23,168
|
|
|
|
22,866
|
|
|
After ten years
|
|
|
7,201
|
|
|
|
7,369
|
|
|
Total
|
|
$
|
96,920
|
|
|
$
|
95,632
|
|
Approximately $106.4 million of securities held to maturity are pledged as collateral for Federal Home Loan Bank of New York (“FHLBNY”) advances, borrowings, and deposits at June 30, 2013.
The following tables set forth the composition of our mortgage-backed securities portfolio as of June 30, 2013 and December 31, 2012:
|
|
|
June 30, 2013
|
|
|
|
|
Amortized
Cost
|
|
|
Gross
Unrealized
Gains
|
|
|
Gross
Unrealized
Losses
|
|
|
Fair Value
|
|
|
|
|
(In Thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Government National Mortgage Association
|
|
$
|
5,613
|
|
|
$
|
194
|
|
|
$
|
219
|
|
|
$
|
5,588
|
|
|
Federal Home Loan Mortgage Corporation
|
|
|
104,211
|
|
|
|
3,182
|
|
|
|
870
|
|
|
|
106,523
|
|
|
Federal National Mortgage Association
|
|
|
186,923
|
|
|
|
6,789
|
|
|
|
1,467
|
|
|
|
192,245
|
|
|
Collateralized mortgage obligations-GSEs
|
|
|
2,679
|
|
|
|
91
|
|
|
|
-
|
|
|
|
2,770
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
299,426
|
|
|
$
|
10,256
|
|
|
$
|
2,556
|
|
|
$
|
307,126
|
|
|
|
|
December 31, 2012
|
|
|
|
|
Amortized
Cost
|
|
|
Gross
Unrealized
Gains
|
|
|
Gross
Unrealized
Losses
|
|
|
Fair Value
|
|
|
|
|
(In Thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Government National Mortgage Association
|
|
$
|
6,254
|
|
|
$
|
243
|
|
|
$
|
194
|
|
|
$
|
6,303
|
|
|
Federal Home Loan Mortgage Corporation
|
|
|
124,408
|
|
|
|
5,863
|
|
|
|
556
|
|
|
|
129,715
|
|
|
Federal National Mortgage Association
|
|
|
209,157
|
|
|
|
15,096
|
|
|
|
1
|
|
|
|
224,252
|
|
|
Collateralized mortgage obligations-GSEs
|
|
|
3,499
|
|
|
|
149
|
|
|
|
-
|
|
|
|
3,648
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
343,318
|
|
|
$
|
21,351
|
|
|
$
|
751
|
|
|
$
|
363,918
|
|
NOTE H – INVESTMENT AND MORTGAGE-BACKED SECURITIES (Continued)
The unrealized losses, categorized by the length of time of continuous loss position, and the fair value of related mortgage-backed securities held to maturity are as follows:
|
|
|
Less than 12 Months
|
|
|
More than 12 Months
|
|
|
Total
|
|
|
|
|
Fair
|
|
|
Unrealized
|
|
|
Fair
|
|
|
Unrealized
|
|
|
Fair
|
|
|
Unrealized
|
|
|
|
|
Value
|
|
|
Losses
|
|
|
Value
|
|
|
Losses
|
|
|
Value
|
|
|
Losses
|
|
|
|
|
(In Thousands)
|
|
J
une 30, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Government National Mortgage Association
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
628
|
|
|
$
|
219
|
|
|
$
|
628
|
|
|
$
|
219
|
|
|
Federal Home Loan
Mortgage Corporation
|
|
|
15,420
|
|
|
|
465
|
|
|
|
7,724
|
|
|
|
405
|
|
|
|
23,144
|
|
|
|
870
|
|
|
Federal National
Mortgage Association
|
|
|
54,217
|
|
|
|
1,460
|
|
|
|
741
|
|
|
|
7
|
|
|
|
54,957
|
|
|
|
1,467
|
|
|
|
|
$
|
71,103
|
|
|
$
|
1,925
|
|
|
$
|
9,093
|
|
|
$
|
630
|
|
|
$
|
78,729
|
|
|
$
|
2,556
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less than 12 Months
|
|
|
More than 12 Months
|
|
|
Total
|
|
|
|
|
Fair
|
|
|
Unraelized
|
|
|
Fair
|
|
|
Unrealized
|
|
|
Fair
|
|
|
Unrealized
|
|
|
|
|
Value
|
|
|
Losses
|
|
|
Value
|
|
|
Losses
|
|
|
Value
|
|
|
Losses
|
|
|
|
|
(In Thousands)
|
|
|
December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Government National Mortgage Association
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
859
|
|
|
$
|
194
|
|
|
$
|
859
|
|
|
$
|
194
|
|
|
Federal Home Loan
Mortgage Corporation
|
|
|
5,616
|
|
|
|
218
|
|
|
|
12,090
|
|
|
|
338
|
|
|
|
17,706
|
|
|
|
556
|
|
|
Federal National
Mortgage Association
|
|
|
164
|
|
|
|
1
|
|
|
|
-
|
|
|
|
-
|
|
|
|
164
|
|
|
|
1
|
|
|
|
|
$
|
5,780
|
|
|
$
|
219
|
|
|
$
|
12,949
|
|
|
$
|
532
|
|
|
$
|
18,729
|
|
|
$
|
751
|
|
As of June 30, 2013, there were three Government National Mortgage Association securities, twenty-six Federal Home Loan Mortgage Corporation securities, thirty-nine Federal National Mortgage Association, and no collateralized mortgage obligation securities in unrealized loss positions. Management does not believe that any of the individual unrealized losses represent an OTTI. The unrealized losses on mortgage-backed securities relate primarily to fixed interest rate and, to a lesser extent, adjustable interest rate securities. Such losses are the result of changes in interest rates and not credit concerns. Roma Bank, the Investment Co. and RomAsia Bank do not intend to sell these securities and it is not more likely than not that they will be required to sell these securities, therefore, no OTTI charge is required.
NOTE H – INVESTMENT AND MORTGAGE-BACKED SECURITIES (Continued)
The amortized cost and estimated fair value of mortgage backed securities held to maturity at June 30, 2013 by contractual maturity are shown below. Expected maturities will differ from contractual maturities as borrowers may have the right to call or prepay obligations with or without call or prepayment penalties:
|
|
|
Amortized Cost
|
|
|
Fair Value
|
|
|
|
|
(In Thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
One year or less
|
|
$
|
11
|
|
|
$
|
11
|
|
|
After one to five years
|
|
|
6,718
|
|
|
|
7,064
|
|
|
After five to ten years
|
|
|
94,154
|
|
|
|
96,427
|
|
|
After ten years
|
|
|
198,543
|
|
|
|
203,624
|
|
|
Total
|
|
$
|
299,426
|
|
|
$
|
307,126
|
|
NOTE I - LOANS RECEIVABLE, NET
Loans receivable, net, at June 30, 2013 and December 31, 2012 were comprised of the following (in thousands):
|
|
|
June 30,
|
|
|
December 31,
|
|
|
|
|
2013
|
|
|
2012
|
|
|
Real estate mortgage loans:
|
|
|
|
|
|
|
|
Residential mortgage
|
|
$
|
466,265
|
|
|
$
|
452,537
|
|
|
Commercial real estate
|
|
|
309,598
|
|
|
|
321,586
|
|
|
|
|
|
775,863
|
|
|
|
774,123
|
|
|
Construction:
|
|
|
|
|
|
|
|
|
|
Commercial real estate
|
|
|
18,662
|
|
|
|
18,139
|
|
|
Residential
|
|
|
8,536
|
|
|
|
7,877
|
|
|
|
|
|
27,198
|
|
|
|
26,016
|
|
|
Consumer:
|
|
|
|
|
|
|
|
|
|
Home equity
|
|
|
205,056
|
|
|
|
216,383
|
|
|
Other
|
|
|
1,091
|
|
|
|
1,354
|
|
|
|
|
|
206,147
|
|
|
|
217,737
|
|
|
Commercial
|
|
|
41,015
|
|
|
|
49,169
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loans
|
|
|
1,050,223
|
|
|
|
1,067,045
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses
|
|
|
8,916
|
|
|
|
8,669
|
|
|
Deferred loan fees
|
|
|
1,273
|
|
|
|
1,469
|
|
|
Loans in process
|
|
|
15,857
|
|
|
|
19,503
|
|
|
|
|
|
26,046
|
|
|
|
29,641
|
|
|
Total loans receivable, net
|
|
$
|
1,024,177
|
|
|
$
|
1,037,404
|
|
NOTE I - LOANS RECEIVABLE, NET (Continued)
The following table presents nonaccrual loans by classes of the loan portfolio as of June 30, 2013 and December 31, 2012:
|
|
|
|
June 30,
2013
|
|
|
December 31,
2012
|
|
|
|
|
|
(In thousands)
|
|
|
|
Commercial
|
|
$
|
1,017
|
|
|
$
|
994
|
|
|
|
Commercial real estate
|
|
|
23,998
|
|
|
|
24,550
|
|
|
|
Commercial real estate – construction
|
|
|
3,069
|
|
|
|
3,158
|
|
|
|
Residential mortgage
|
|
|
7,781
|
|
|
|
10,400
|
|
|
|
Residential construction
|
|
|
4,137
|
|
|
|
5,256
|
|
|
|
Home equity and other consumer
|
|
|
2,437
|
|
|
|
2,955
|
|
|
|
Total
|
|
$
|
42,439
|
|
|
$
|
47,313
|
|
A loan is considered impaired when based on current information and events; it is probable that the Company will be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan. Impaired loans include nonperforming commercial loans but also include loans modified in troubled debt restructurings where concessions have been granted to borrowers experiencing financial difficulties. These concessions could include a reduction in the interest rate on the loans, payment extensions, forgiveness of principal, forbearance or other actions intended to maximize collection.
The following table summarizes information in regards to impaired loans by loan portfolio as of June 30, 2013 and the six months then ended:
|
|
|
Recorded Investment
|
|
Unpaid Principal Balance
|
|
Related Allowance
|
|
|
|
|
|
|
|
|
|
(In Thousands)
|
|
|
|
|
|
|
|
|
With no related allowance recorded:
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
$ 2,455
|
|
$ 3,148
|
|
$ -
|
|
|
|
|
|
|
|
|
Commercial real estate
|
|
41,770
|
|
44,116
|
|
-
|
|
|
|
|
|
|
|
|
Commercial real estate - construction
|
|
3,069
|
|
3,069
|
|
-
|
|
|
|
|
|
|
|
|
Residential mortgage
|
|
15,071
|
|
16,251
|
|
-
|
|
|
|
|
|
|
|
|
Residential construction
|
|
4,440
|
|
5,180
|
|
-
|
|
|
|
|
|
|
|
|
Home equity and other consumer
|
|
4,422
|
|
4,676
|
|
-
|
|
|
|
|
|
|
|
|
|
|
$ 71,227
|
|
$ 76,440
|
|
$ -
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30, 2013
|
|
Six Months Ended
June 30, 2013
|
|
|
|
|
|
|
|
|
Average Recorded Investment
|
|
Interest Income Recognized
|
|
Average Recorded Investment
|
|
Interest Income Recognized
|
|
|
|
|
|
|
|
(In Thousands)
|
|
|
|
|
|
With no related allowance recorded:
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
$ 1,821
|
|
$ 30
|
|
$ 2,021
|
|
$ 51
|
|
|
|
|
|
|
Commercial real estate
|
|
37,170
|
|
72
|
|
38,713
|
|
201
|
|
|
|
|
|
|
Commercial real estate - construction
|
|
3,136
|
|
-
|
|
3,114
|
|
-
|
|
|
|
|
|
|
Residential mortgage
|
|
15,662
|
|
70
|
|
15,517
|
|
159
|
|
|
|
|
|
|
Residential construction
|
|
5,041
|
|
-
|
|
4,995
|
|
-
|
|
|
|
|
|
|
Home equity and other consumer
|
|
4,497
|
|
30
|
|
4,455
|
|
62
|
|
|
|
|
|
|
|
|
$ 67,327
|
|
$ 202
|
|
$ 68,815
|
|
$ 473
|
|
|
|
NOTE I - LOANS RECEIVABLE, NET (Continued)
The following table summarizes information in regards to impaired loans by loan portfolio class segregated by those for which a related allowance was required and those for which a related allowance was not necessary, as of December 31, 2012 and the year then ended:
|
|
|
|
|
|
Unpaid
|
|
|
|
|
|
Average
|
|
|
Interest
|
|
|
|
|
Recorded
|
|
|
Principal
|
|
|
Related
|
|
|
Recorded
|
|
|
Income
|
|
|
|
|
Investment
|
|
|
Balance
|
|
|
Allowance
|
|
|
Investment
|
|
|
Recognized
|
|
|
|
|
(In Thousands)
|
|
|
With no related allowance recorded:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
$
|
1,920
|
|
|
$
|
3,929
|
|
|
$
|
-
|
|
|
$
|
1,761
|
|
|
$
|
102
|
|
|
Commercial real estate
|
|
|
34,570
|
|
|
|
37,267
|
|
|
|
-
|
|
|
|
35,671
|
|
|
|
667
|
|
|
Commercial real estate
|
|
|
3,158
|
|
|
|
3,158
|
|
|
|
-
|
|
|
|
5,224
|
|
|
|
2
|
|
|
Residential mortgage
|
|
|
16,176
|
|
|
|
17,835
|
|
|
|
-
|
|
|
|
17,671
|
|
|
|
399
|
|
|
Residential construction
|
|
|
5,550
|
|
|
|
6,560
|
|
|
|
-
|
|
|
|
7,307
|
|
|
|
17
|
|
|
Home equity and other consumer
|
|
|
4,491
|
|
|
|
4,784
|
|
|
|
-
|
|
|
|
4,090
|
|
|
|
128
|
|
|
|
|
$
|
65,865
|
|
|
$
|
73,533
|
|
|
$
|
-
|
|
|
$
|
71,724
|
|
|
$
|
1,315
|
|
|
Total:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
$
|
1,920
|
|
|
$
|
3,929
|
|
|
$
|
-
|
|
|
$
|
1,761
|
|
|
$
|
102
|
|
|
Commercial real estate
|
|
|
34,570
|
|
|
|
37,267
|
|
|
|
-
|
|
|
|
35,671
|
|
|
|
667
|
|
|
Commercial real estate-construction
|
|
|
3,158
|
|
|
|
3,158
|
|
|
|
-
|
|
|
|
5,224
|
|
|
|
2
|
|
|
Residential mortgage
|
|
|
16,176
|
|
|
|
17,835
|
|
|
|
-
|
|
|
|
17,671
|
|
|
|
399
|
|
|
Residential construction
|
|
|
5,550
|
|
|
|
6,560
|
|
|
|
-
|
|
|
|
7,307
|
|
|
|
17
|
|
|
Home equity and other consumer
|
|
|
4,491
|
|
|
|
4,784
|
|
|
|
-
|
|
|
|
4,090
|
|
|
|
128
|
|
|
|
|
$
|
65,865
|
|
|
$
|
73,533
|
|
|
$
|
-
|
|
|
$
|
71,724
|
|
|
$
|
1,315
|
|
At June 30, 2013, impaired loans included $32.4 million of loans, net of credit marks of $5.2 million, which were acquired in the Company’s acquisition of Sterling Banks Inc. in July 2010. Loans totaling $8.2 million which are performing are also included in this total and classified as impaired because they are troubled debt restructurings.
At December 31, 2012, impaired loans included $32.4 million of loans, net of credit marks of $7.7 million, which were acquired in the Sterling acquisition. Loans totaling $8.7 million which are performing, are also included in this total and classified as impaired because they are troubled debt restructurings.
NOTE I - LOANS RECEIVABLE, NET (Continued)
The performance and credit quality of the loan portfolio is also monitored by analyzing the age of loans receivable by the length of time a recorded payment is past due. The following table presents the classes of the loan portfolio summarized by the past due status as of June 30, 2013 (In thousands):
|
|
|
30-59
Days Past
Due
|
|
|
60-89
Days Past
Due
|
|
|
Greater
than
90 days
|
|
|
Total Past
Due
|
|
|
Current
|
|
|
Total Loans Receivable
|
|
|
Loans
Receivable
>90 Days
and
Accruing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
$
|
58
|
|
|
$
|
-
|
|
|
$
|
994
|
|
|
$
|
1,052
|
|
|
$
|
39,963
|
|
|
$
|
41,015
|
|
|
$
|
-
|
|
|
Commercial real
estate
|
|
|
2,883
|
|
|
|
656
|
|
|
|
16,104
|
|
|
|
19,643
|
|
|
|
289,955
|
|
|
|
309,598
|
|
|
|
-
|
|
|
Commercial real
estate – constr.
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
18,662
|
|
|
|
18,662
|
|
|
|
-
|
|
|
Residential
mortgage
|
|
|
2,788
|
|
|
|
3,376
|
|
|
|
10,842
|
|
|
|
17,006
|
|
|
|
449,259
|
|
|
|
466,265
|
|
|
|
244
|
|
|
Residential
construction
|
|
|
-
|
|
|
|
-
|
|
|
|
4,323
|
|
|
|
4,323
|
|
|
|
4,214
|
|
|
|
8,537
|
|
|
|
-
|
|
|
Home equity and
other consumer
|
|
|
431
|
|
|
|
795
|
|
|
|
2,581
|
|
|
|
3,807
|
|
|
|
202,339
|
|
|
|
206,146
|
|
|
|
-
|
|
|
Total
|
|
$
|
6,160
|
|
|
$
|
4,827
|
|
|
$
|
34,844
|
|
|
$
|
45,831
|
|
|
$
|
1,004,392
|
|
|
$
|
1,050,223
|
|
|
$
|
244
|
|
The following table presents the classes of the loan portfolio summarized by the past due status as of December 31, 2012 (In thousands):
|
|
|
30-59
Days Past
Due
|
|
|
60-89
Days Past
Due
|
|
|
Greater
than
90 days
|
|
|
Total Past
Due
|
|
|
Current
|
|
|
Total Loans Receivable
|
|
|
Loans
Receivable
>90 Days
and
Accruing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
$
|
180
|
|
|
$
|
-
|
|
|
$
|
994
|
|
|
$
|
1,174
|
|
|
$
|
47,995
|
|
|
$
|
49,169
|
|
|
$
|
-
|
|
|
Commercial real
estate
|
|
|
1,857
|
|
|
|
2,479
|
|
|
|
16,014
|
|
|
|
20,350
|
|
|
|
301,236
|
|
|
|
321,586
|
|
|
|
-
|
|
|
Commercial real
estate – constr.
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
18,139
|
|
|
|
18,139
|
|
|
|
-
|
|
|
Residential
mortgage
|
|
|
5,790
|
|
|
|
3,373
|
|
|
|
10,400
|
|
|
|
19,563
|
|
|
|
432,974
|
|
|
|
452,537
|
|
|
|
250
|
|
|
Residential
construction
|
|
|
-
|
|
|
|
306
|
|
|
|
5,256
|
|
|
|
5,562
|
|
|
|
2,315
|
|
|
|
7,877
|
|
|
|
-
|
|
|
Home equity and
other consumer
|
|
|
748
|
|
|
|
1,089
|
|
|
|
2,955
|
|
|
|
4,792
|
|
|
|
212,945
|
|
|
|
217,737
|
|
|
|
-
|
|
|
Total
|
|
$
|
8,575
|
|
|
$
|
7,247
|
|
|
$
|
35,619
|
|
|
$
|
51,441
|
|
|
$
|
1,015,604
|
|
|
$
|
1,067,045
|
|
|
$
|
250
|
|
NOTE I - LOANS RECEIVABLE, NET (Continued)
The following table presents the classes of the loan portfolio summarized by the aggregate pass rating and the classified ratings of special mention, substandard and doubtful in accordance with the Company’s internal risk rating system as of June 30, 2013 (In thousands):
|
|
|
Pass
|
|
|
Special
Mention
|
|
|
Substandard
|
|
|
Doubtful
|
|
|
Total
|
|
|
Commercial
|
|
$
|
38,878
|
|
|
$
|
865
|
|
|
$
|
1,272
|
|
|
$
|
-
|
|
|
$
|
41,015
|
|
|
Commercial real estate
|
|
|
259,226
|
|
|
|
10,571
|
|
|
|
39,801
|
|
|
|
-
|
|
|
|
309,598
|
|
|
Commercial real estate-
construction
|
|
|
15,593
|
|
|
|
-
|
|
|
|
3,069
|
|
|
|
-
|
|
|
|
18,662
|
|
|
Residential mortgage
|
|
|
452,150
|
|
|
|
1,583
|
|
|
|
12,532
|
|
|
|
-
|
|
|
|
466,265
|
|
|
Residential construct.
|
|
|
4,096
|
|
|
|
-
|
|
|
|
4,441
|
|
|
|
-
|
|
|
|
8,537
|
|
|
Home equity and other consumer
|
|
|
202,378
|
|
|
|
390
|
|
|
|
3,378
|
|
|
|
-
|
|
|
|
206,146
|
|
|
Total
|
|
$
|
972,321
|
|
|
$
|
13,409
|
|
|
$
|
64,493
|
|
|
$
|
-
|
|
|
$
|
1,050,223
|
|
The following table presents the classes of the loan portfolio summarized by the aggregate pass rating and the classified ratings of special mention, substandard and doubtful in accordance with the Company’s internal risk rating system as of December 31, 2012: (In thousands)
|
|
|
Pass
|
|
|
Special
Mention
|
|
|
Substandard
|
|
|
Doubtful
|
|
|
Total
|
|
|
Commercial
|
|
$
|
46,749
|
|
|
$
|
207
|
|
|
$
|
2,213
|
|
|
$
|
-
|
|
|
$
|
49,169
|
|
|
Commercial real estate
|
|
|
263,422
|
|
|
|
25,136
|
|
|
|
33,028
|
|
|
|
-
|
|
|
|
321,586
|
|
|
Commercial real estate
(construction)
|
|
|
14,981
|
|
|
|
-
|
|
|
|
3,158
|
|
|
|
-
|
|
|
|
18,139
|
|
|
Residential mortgage
|
|
|
436,964
|
|
|
|
1,737
|
|
|
|
13,836
|
|
|
|
-
|
|
|
|
452,537
|
|
|
Residential construct.
|
|
|
2,327
|
|
|
|
-
|
|
|
|
5,550
|
|
|
|
-
|
|
|
|
7,877
|
|
|
Home equity and other consumer
|
|
|
213,664
|
|
|
|
634
|
|
|
|
3,439
|
|
|
|
-
|
|
|
|
217,737
|
|
|
Total
|
|
$
|
978,107
|
|
|
$
|
27,714
|
|
|
$
|
61,224
|
|
|
$
|
-
|
|
|
$
|
1,067,045
|
|
NOTE I - LOANS RECEIVABLE, NET (Continued)
Allowance for Credit Losses
At and For the Three Months and Six months Ended June 30, 2013 and 2012
|
|
|
|
|
|
|
|
|
Commercial
|
|
|
|
|
|
|
|
|
Home Equity
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
|
Real Estate
-
|
|
|
Residential
|
|
|
Residential
|
|
|
and Other
|
|
|
|
|
|
|
|
Commercial
|
|
|
Real Estate
|
|
|
Construction
|
|
|
Mortgage
|
|
|
Construction
|
|
|
Consumer
|
|
|
Total
|
|
|
Allowance for credit losses:
|
|
(In Thousands)
|
|
|
Three months ended 06/30/12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance
|
|
$
|
786
|
|
|
$
|
3,390
|
|
|
$
|
784
|
|
|
$
|
944
|
|
|
$
|
-
|
|
|
$
|
405
|
|
|
$
|
6,309
|
|
|
Charge-offs
|
|
|
-
|
|
|
|
(828
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(13
|
)
|
|
|
(841
|
)
|
|
Recoveries
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
9
|
|
|
|
-
|
|
|
|
3
|
|
|
|
12
|
|
|
Provisions
|
|
|
298
|
|
|
|
1,125
|
|
|
|
(183
|
)
|
|
|
106
|
|
|
|
-
|
|
|
|
43
|
|
|
|
1,389
|
|
|
Ending Balance
|
|
$
|
1,084
|
|
|
$
|
3,687
|
|
|
$
|
601
|
|
|
$
|
1,059
|
|
|
$
|
-
|
|
|
$
|
438
|
|
|
$
|
6,869
|
|
|
Three months ended 06/30/13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance
|
|
$
|
1,256
|
|
|
$
|
4,382
|
|
|
$
|
904
|
|
|
$
|
1,533
|
|
|
$
|
-
|
|
|
$
|
469
|
|
|
$
|
8,544
|
|
|
Charge-offs
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(8
|
)
|
|
|
(8
|
)
|
|
Recoveries
|
|
|
-
|
|
|
|
36
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1
|
|
|
|
37
|
|
|
Provisions
|
|
|
(197
|
)
|
|
|
444
|
|
|
|
(36
|
)
|
|
|
44
|
|
|
|
-
|
|
|
|
88
|
|
|
|
343
|
|
|
Ending Balance
|
|
$
|
1,059
|
|
|
$
|
4,862
|
|
|
$
|
868
|
|
|
$
|
1,577
|
|
|
$
|
-
|
|
|
$
|
550
|
|
|
$
|
8,916
|
|
|
Six months ended 06/30/12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance
|
|
$
|
199
|
|
|
$
|
2,181
|
|
|
$
|
668
|
|
|
$
|
1,705
|
|
|
$
|
-
|
|
|
$
|
663
|
|
|
$
|
5,416
|
|
|
Charge-offs
|
|
|
(112
|
)
|
|
|
(918
|
)
|
|
|
(162
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(24
|
)
|
|
|
(1,216
|
)
|
|
Recoveries
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
9
|
|
|
|
-
|
|
|
|
8
|
|
|
|
17
|
|
|
Provisions
|
|
|
997
|
|
|
|
2,424
|
|
|
|
95
|
|
|
|
(655
|
)
|
|
|
-
|
|
|
|
(209
|
)
|
|
|
2,652
|
|
|
Ending Balance
|
|
$
|
1,084
|
|
|
$
|
3,687
|
|
|
$
|
601
|
|
|
$
|
1,059
|
|
|
$
|
-
|
|
|
$
|
438
|
|
|
$
|
6,869
|
|
|
Six months ended 06/30/13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance
|
|
$
|
1,465
|
|
|
$
|
4,455
|
|
|
$
|
803
|
|
|
$
|
1,410
|
|
|
$
|
-
|
|
|
$
|
536
|
|
|
$
|
8,669
|
|
|
Charge-offs
|
|
|
-
|
|
|
|
(8
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(16
|
)
|
|
|
(24
|
)
|
|
Recoveries
|
|
|
-
|
|
|
|
65
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
4
|
|
|
|
69
|
|
|
Provisions
|
|
|
(406
|
)
|
|
|
350
|
|
|
|
65
|
|
|
|
167
|
|
|
|
-
|
|
|
|
26
|
|
|
|
202
|
|
|
Ending Balance
|
|
$
|
1,059
|
|
|
$
|
4,862
|
|
|
$
|
868
|
|
|
$
|
1,577
|
|
|
$
|
-
|
|
|
$
|
550
|
|
|
$
|
8,916
|
|
|
Ending Balances:
individually evaluated for impairment
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
collectively evaluated for impairment
|
|
$
|
1,059
|
|
|
$
|
4,862
|
|
|
$
|
868
|
|
|
$
|
1,577
|
|
|
$
|
-
|
|
|
$
|
550
|
|
|
$
|
8,916
|
|
|
loans acquired with deteriorated credit quality*
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
*The Company has taken no subsequent impaired provisions on loans acquired.
NOTE I - LOANS RECEIVABLE, NET (Continued)
Recorded Investment in Financing Receivables
At June 30, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Home
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
|
Real Estate-
|
|
|
Residential
|
|
|
Residential
|
|
|
and Other
|
|
|
|
|
|
|
|
Commercial
|
|
|
Real Estate
|
|
|
Construction
|
|
|
Mortgage
|
|
|
Construction
|
|
|
Consumer
|
|
|
Total
|
|
|
Loans Receivable:
|
|
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance
|
|
$
|
41,015
|
|
|
$
|
309,598
|
|
|
$
|
18,662
|
|
|
$
|
466,265
|
|
|
$
|
8,537
|
|
|
$
|
206,146
|
|
|
$
|
1,050,223
|
|
|
Ending balance:
individually evaluated for
impairment
|
|
|
1,127
|
|
|
|
31,767
|
|
|
|
3,069
|
|
|
|
6,636
|
|
|
|
-
|
|
|
|
2,694
|
|
|
|
45,293
|
|
|
Ending balance: legacy
Roma collectively evaluated
for impairment
|
|
|
34,257
|
|
|
|
224,277
|
|
|
|
15,593
|
|
|
|
417,330
|
|
|
|
3,933
|
|
|
|
171,633
|
|
|
|
867,023
|
|
|
Ending balance: acquired
loans collectively evaluated
for impairment
|
|
|
4,303
|
|
|
|
43,551
|
|
|
|
-
|
|
|
|
33,865
|
|
|
|
163
|
|
|
|
30,091
|
|
|
|
111,973
|
|
|
Ending balance: loans acquired
with deteriorated credit quality
|
|
$
|
1,328
|
|
|
$
|
10,003
|
|
|
$
|
-
|
|
|
$
|
8,434
|
|
|
$
|
4,441
|
|
|
$
|
1,728
|
|
|
$
|
25,934
|
|
NOTE I - LOANS RECEIVABLE, NET (Continued)
Allowance for Credit Losses
At December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Home
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
|
Real Estate-
|
|
|
Residential
|
|
|
Residential
|
|
|
and Other
|
|
|
|
|
|
|
|
Commercial
|
|
|
Real Estate
|
|
|
Construction
|
|
|
Mortgage
|
|
|
Construction
|
|
|
Consumer
|
|
|
Total
|
|
|
|
|
(In thousands)
|
|
|
Allowance for credit losses:
|
|
|
|
|
Ending Balance
|
|
$
|
1,465
|
|
|
$
|
4,455
|
|
|
$
|
803
|
|
|
$
|
1,410
|
|
|
$
|
-
|
|
|
$
|
536
|
|
|
$
|
8,669
|
|
|
Ending Balance:
individually
evaluated for
impairment
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
Ending Balance:
collectively evaluated for
impairment
|
|
$
|
1,465
|
|
|
$
|
4,455
|
|
|
$
|
803
|
|
|
$
|
1,410
|
|
|
$
|
-
|
|
|
$
|
536
|
|
|
$
|
8,669
|
|
|
Ending Balance: *
loans acquired with
deteriorated
credit quality
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
*The Company has taken no subsequent impaired provisions on loans acquired.
NOTE I - LOANS RECEIVABLE, NET (Continued)
Recorded Investment in Financing Receivables
At December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Home
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
|
|
|
|
|
|
|
and
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
|
Real Estate-
|
|
|
Residential
|
|
|
Residential
|
|
|
Other
|
|
|
|
|
|
|
|
Commercial
|
|
|
Real Estate
|
|
|
Construction
|
|
|
Mortgage
|
|
|
Construction
|
|
|
Consumer
|
|
|
Total
|
|
|
|
|
(In thousands)
|
|
|
Loans Receivable:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance
|
|
$
|
49,169
|
|
|
$
|
321,586
|
|
|
$
|
18,139
|
|
|
$
|
452,537
|
|
|
$
|
7,877
|
|
|
$
|
217,737
|
|
|
$
|
1,067,045
|
|
|
Ending balance:
individually evaluated for
impairment
|
|
|
1,388
|
|
|
|
25,150
|
|
|
|
3,158
|
|
|
|
5,154
|
|
|
|
-
|
|
|
|
2,882
|
|
|
|
37,732
|
|
|
Ending balance: legacy
Roma collectively evaluated
for impairment
|
|
|
39,874
|
|
|
|
238,287
|
|
|
|
14,981
|
|
|
|
399,018
|
|
|
|
2,327
|
|
|
|
176,562
|
|
|
|
871,049
|
|
|
Ending balance: acquired
loans collectively evaluated
for impairment
|
|
|
7,375
|
|
|
|
48,729
|
|
|
|
-
|
|
|
|
37,343
|
|
|
|
-
|
|
|
|
36,684
|
|
|
|
130,131
|
|
|
Ending balance: loans acquired
with
deteriorated credit quality
|
|
$
|
532
|
|
|
$
|
9,420
|
|
|
$
|
-
|
|
|
$
|
11,022
|
|
|
$
|
5,550
|
|
|
$
|
1,609
|
|
|
$
|
28,133
|
|
NOTE I - LOANS RECEIVABLE, NET (Continued)
The following table summarizes information regarding troubled debt restructuring as of June 30, 2013 ($ in thousands):
|
|
|
Number of Contracts
|
|
Pre-Modification
Outstanding
Recorded
Investments
|
|
Post-Modification
Outstanding
Recorded
Investments
|
|
Troubled Debt Restructurings
|
|
|
|
|
|
|
|
Commercial Real Estate - Roma Bank
|
|
5
|
|
$ 7,051
|
|
$ 7,496
|
|
Commercial Real Estate - RomAsia
|
|
1
|
|
$721
|
|
$710
|
There have been no modifications that were considered troubled debt restructuring during the three and six month periods ended June 30, 2013 and 2012.
There were no troubled debt restructurings that subsequently defaulted since their restructure.
As indicated in the table above, the Company modified five commercial real estate loans during the year ended December 31, 2011. There have been no modifications that should be considered troubled debt restructuring during 2012. The five loans modified were to one borrower and were restructured into one loan. As a result of the modified terms of the new loan, the Company extended the maturity of three of the modified loans and accelerated the term of the remaining two modified loans. The effective interest rate of the modified loans was reduced when compared to the weighted average interest rate of the original terms of the modified loans. The Company compared the fair value of the modified loans to the carrying amount of the original loans and determined that the modified terms did not require recognition of impairment due to the fair value of the modified loans exceeding the carrying amount of the original loans, combined with the fact that the Company received additional collateral under the terms of the modification. The borrower has remained current since the modification.
The second loan detailed above was modified in the fourth quarter of 2011, RomAsia Bank modified a commercial real estate loan (the second loan above) by reducing the interest rate, waiving principal for a period of three months, and advancing additional funds to bring real estate taxes current. At the time of modification an impairment of $41,000 was recognized. The loan is performing as agreed since the modification.
NOTE J – REAL ESTATE HELD FOR SALE
The Company has a contract for the sale of vacant land at the site of its Center City branch. As of June 30, 2013, the location was classified as held for sale and carried at lower of cost or fair value of $138,000. This sale is expected to close in the third or fourth quarter of 2013. At December, 31,2012, the Company had this location and its former loan center classified as held for sale and carried at lower or cost or fair value of $1,627,000. In January 2013, the loan center location was sold for a gain of $581,000.
NOTE K - DEPOSITS
A summary of deposits by type of account as of June 30, 2013 and December 31, 2012 is as follows (dollars in thousands):
|
|
|
June 30, 2013
|
|
|
December 31, 2012
|
|
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
|
Avg. Int.
|
|
|
|
|
|
Avg. Int.
|
|
|
|
|
Amount
|
|
|
Rate
|
|
|
Amount
|
|
|
Rate
|
|
|
Demand:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest bearing checking
|
|
$
|
78,905
|
|
|
|
0.00
|
%
|
|
$
|
71,287
|
|
|
|
0.00
|
%
|
|
Interest bearing checking
|
|
|
238,290
|
|
|
|
0.11
|
%
|
|
|
243,379
|
|
|
|
0.11
|
%
|
|
|
|
|
317,195
|
|
|
|
0.08
|
%
|
|
|
314,666
|
|
|
|
0.09
|
%
|
|
Savings and club
|
|
|
507,396
|
|
|
|
0.23
|
%
|
|
|
513,696
|
|
|
|
0.26
|
%
|
|
Certificates of deposit
|
|
|
583,262
|
|
|
|
1.22
|
%
|
|
|
656,207
|
|
|
|
1.31
|
%
|
|
Total
|
|
$
|
1,407,853
|
|
|
|
0.61
|
%
|
|
$
|
1,484,569
|
|
|
|
0.69
|
%
|
NOTE L – FEDERAL HOME LOAN BANK ADVANCES AND SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE
At June 30, 2013 and December 31, 2012, Roma Bank and RomAsia Bank had outstanding FHLBNY advances as follows (dollars in thousands):
|
|
|
|
|
|
|
|
|
|
|
June 30,
2013
|
|
December 31, 2012
|
|
Interest Rate
|
|
Maturity Date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ 23,000
|
|
$23,000
|
|
3.90%
|
|
10/29/2017
|
|
|
11,075
|
|
12,553
|
|
1.03%
|
|
01/18/2017
|
|
|
-
|
|
1,500
|
|
2.09%
|
|
03/19/2013
|
|
|
1,360
|
|
1,430
|
|
1.53%
|
|
05/31/2022
|
|
|
1,310
|
|
1,414
|
|
1.05%
|
|
06/03/2019
|
|
|
1,404
|
|
1,403
|
|
0.80%
|
|
08/22/2016
|
|
|
1,119
|
|
1,146
|
|
1.12%
|
|
05/15/2017
|
|
|
1,074
|
|
1,074
|
|
1.21%
|
|
04/12/2017
|
|
|
-
|
|
1,000
|
|
0.51%
|
|
03/19/2013
|
|
|
1,000
|
|
1,000
|
|
0.72%
|
|
03/19/2014
|
|
|
1,000
|
|
1,000
|
|
0.98%
|
|
03/19/2015
|
|
|
870
|
|
870
|
|
1.21%
|
|
04/12/2017
|
|
|
-
|
|
750
|
|
1.17%
|
|
02/22/2013
|
|
|
692
|
|
692
|
|
1.00%
|
|
03/14/2016
|
|
|
500
|
|
500
|
|
1.73%
|
|
02/22/2014
|
|
|
500
|
|
500
|
|
1.52%
|
|
12/23/2013
|
|
|
500
|
|
500
|
|
2.08%
|
|
12/22/2014
|
|
|
500
|
|
500
|
|
2.61%
|
|
12/21/2015
|
|
|
500
|
|
500
|
|
3.08%
|
|
12/21/2016
|
|
|
341
|
|
376
|
|
2.11%
|
|
02/01/2016
|
|
|
578
|
|
677
|
|
1.79%
|
|
03/14/2016
|
|
|
$47,323
|
|
$52,385
|
|
|
|
|
NOTE L – FEDERAL HOME LOAN BANK ADVANCES AND SECURITIES SOLD UNDER AGREEMENT TO REPURCHASE
Securities sold under agreements to repurchase are treated as financings and are reflected as a liability in the consolidated statements of financial condition. Securities sold under an agreement to repurchase amounted to $40.0 million at June 30, 2013 and December 31, 2012. The maturities and respective interest rates are as follows: $10.0 million maturing in 2015, at 3.22%; $20.0 million maturing in 2018, at 3.51%; and $10.0 million maturing in 2018, at 3.955%. The repurchase agreement is collateralized by securities described in the underlying agreement which are held in safekeeping by the FHLBNY. At June 30, 2013 the fair value of the mortgage-backed securities used as collateral under the repurchase agreement was approximately $52.6 million.
On May 1, 2007, Sterling Banks Capital Trust I, a Delaware statutory business trust and a wholly-owned subsidiary of the Company (the “Trust”), issued $6.2 million of variable rate capital trust pass-through securities (“capital securities”) to investors. The variable interest rate reprices quarterly at the three month LIBOR plus 1.7%. The Trust purchased $6.2 million of variable rate junior subordinated debentures from Sterling Banks, Inc. The debentures are the sole asset of the Trust. The fair value of the subordinated debentures at acquisition of Sterling Banks, Inc. was $5.1 million. The terms of the junior subordinated debentures are the same as the terms of the capital securities. The Company has also fully and unconditionally guaranteed the obligations of the Trust under the capital securities. On October 22, 2010, the Company repurchased $4.0 million of these capital securities (market value of $3.2 million). The capital securities remaining were redeemable by the Company on or after May 1, 2012 at par. The Company redeemed the balance of the capital securities in June 2012 for $2.2 million. The carrying value of the debt prior to repayment was $1.9 million, net of a $271 thousand discount at acquisition from Sterling.
NOTE M – RETIREMENT PLANS
Components of net periodic pension cost for the three and six months ended June 30, 2013 and 2012 were as follows (in thousands):
|
|
|
Three Months Ended
June 30,
|
|
|
Six months Ended
June 30,
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service cost
|
|
$
|
279
|
|
|
$
|
179
|
|
|
$
|
558
|
|
|
$
|
358
|
|
|
Interest cost
|
|
|
197
|
|
|
|
180
|
|
|
|
394
|
|
|
|
360
|
|
|
Expected return on plan assets
|
|
|
(245
|
)
|
|
|
(204
|
)
|
|
|
(490
|
)
|
|
|
(408
|
)
|
|
Amortization of unrecognized net loss
|
|
|
215
|
|
|
|
192
|
|
|
|
430
|
|
|
|
384
|
|
|
Amortization of unrecognized past service liability
|
|
|
-
|
|
|
|
3
|
|
|
|
-
|
|
|
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net periodic benefit expense
|
|
$
|
446
|
|
|
$
|
350
|
|
|
$
|
892
|
|
|
$
|
700
|
|
The Company expects to make contributions of approximately $1,154,000 during 2013 which includes the amounts previously contributed in 2013 year to date.
NOTE N – CONTRACTUAL OBLIGATIONS AND OFF-BALANCE SHEET ARRANGEMENTS
In the normal course of business, the Company enters into off-balance sheet arrangements consisting of commitments to fund residential and commercial loans and lines of credit. Outstanding loan commitments at June 30, 2013 were as follows (in thousands):
|
|
|
June 30,
|
|
|
|
|
2013
|
|
|
Residential mortgage and equity loans
|
|
$
|
14,132
|
|
|
Commercial loans committed not closed
|
|
|
12,473
|
|
|
Commercial lines of credit
|
|
|
35,067
|
|
|
Consumer unused lines of credit
|
|
|
65,984
|
|
|
Commercial letters of credit
|
|
|
2,561
|
|
|
|
|
$
|
130,217
|
|
In the ordinary course of business to meet the financial needs of the Company’s customers, the Company is party to financial instruments with off-balance-sheet risk. These financial instruments include unused lines of credit and involve, to varying degrees, elements of credit risk in excess of the amount recognized in the consolidated financial statements. The contract or notional amounts of these instruments express the extent of involvement the Company has in each category of financial instruments.
NOTE N – CONTRACTUAL OBLIGATIONS AND OFF-BALANCE SHEET ARRANGEMENTS (Continued)
The Company’s exposure to credit loss from nonperformance by the other party to the above-mentioned financial instruments is represented by the contractual amount of those instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments. The contract or notional amount of financial instruments which represent credit risk at June 30, 2013 and December 31, 2012 is as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
June 30,
2013
|
|
|
December 31, 2012
|
|
|
Standby by letters of credit
|
|
$
|
2,561
|
|
|
$
|
2,891
|
|
|
Outstanding loan and credit line commitments
|
|
$
|
127,656
|
|
|
$
|
145,412
|
|
|
|
|
|
|
|
|
|
|
|
Standby letters of credit are conditional commitments issued by the Company which guarantee performance by a customer to a third party. The credit risk and underwriting procedures involved in issuing letters of credit are essentially the same as that involved in extending loan facilities to customers. These are irrevocable undertakings by the Company, as guarantor, to make payments in the event a specified third party fails to perform under a non-financial contractual obligation. Most of the Company’s performance standby letters of credit arise in connection with lending relationships and have terms of one year or less. The current amount of the liability related to guarantees under standby letters of credit issued is not material as of June 30, 2013.
Outstanding loan commitments represent the unused portion of loan commitments available to individuals and companies as long as there is no violation of any condition established in the contract. Outstanding loan commitments generally have a fixed expiration date of one year or less, except for home equity lines of credit which generally have an expiration date of up to 15 years. The Company evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral, if any, obtained, upon extension of credit is based upon management’s credit evaluation of the customer. While various types of collateral may be held, property is primarily obtained as security. The credit risk involved in these financial instruments is essentially the same as that involved in extending loan facilities to customers.
The Banks have non-cancelable operating leases for branch offices. The following is a schedule by years of future minimum rental payments required under operating leases that have initial or remaining non-cancelable lease terms in excess of one year at June 30, 2013: (In thousands)
|
Year Ended June 30:
|
|
|
|
|
|
|
|
|
|
2014
|
|
$
|
1,154
|
|
2015
|
|
|
859
|
|
2016
|
|
|
885
|
|
2017
|
|
|
896
|
|
2018
|
|
|
891
|
|
Thereafter
|
|
|
7,310
|
|
Total Minimum Payments Required
|
|
$
|
11,995
|
Included in the total required minimum lease payments is $1,501,597 of payments to the LLC. The Company eliminates these payments in consolidation.
NOTE O – FAIR VALUE MEASUREMENTS AND DISCLOSURES
The Company follows the guidance on fair value measurements now codified as FASB ASC Topic 820,
Fair Value Measurements and Disclosures.
Fair value measurements are not adjusted for transaction costs. ASC Topic 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value.
Management uses its best judgment in estimating the fair value of the Company’s 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 amounts the Company could have realized in a sales transaction on the dates indicated. The estimated fair value amounts have been measured as of their respective period end and have not been re-evaluated or updated for purposes of these 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 period-end.
NOTE O – FAIR VALUE MEASUREMENTS AND DISCLOSURES (Continued)
The fair value measurement hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:
Level 1
: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
Level 2
: Quoted prices in markets that are not active, or inputs that are observable either directly or indirectly, for substantially the full term of the asset or liability.
Level 3
: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported with little or no market activity.
An asset’s or liability’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.
For financial assets measured at fair value on a recurring basis, the fair value measurements by level within the fair value hierarchy used at June 30, 2013 were as follows:
|
|
|
(Level 1)
Quoted Prices in Active Markets for Identical Assets
|
|
|
(Level 2)
Significant
Other
Observable
Inputs
|
|
|
(Level 3)
Significant
Unobservable
Inputs
|
|
|
Total Fair Value June 30, 2013
|
|
|
|
|
(In Thousands)
|
|
|
Mortgage backed securities-U.S. Government Sponsored Enterprises (GSEs)
|
|
$
|
-
|
|
|
$
|
10,116
|
|
|
$
|
-
|
|
|
$
|
10,116
|
|
|
Obligations of state and political subdivisions
|
|
|
-
|
|
|
|
3,707
|
|
|
|
-
|
|
|
|
3,707
|
|
|
U.S. Government (including agencies)
|
|
|
-
|
|
|
|
7,840
|
|
|
|
-
|
|
|
|
7,840
|
|
|
Corporate bond
|
|
|
-
|
|
|
|
500
|
|
|
|
-
|
|
|
|
500
|
|
|
Equity securities
|
|
|
-
|
|
|
|
56
|
|
|
|
-
|
|
|
|
56
|
|
|
Mutual funds
|
|
|
-
|
|
|
|
3,951
|
|
|
|
-
|
|
|
|
3,951
|
|
|
Securities available for sale
|
|
$
|
-
|
|
|
$
|
26,170
|
|
|
$
|
-
|
|
|
$
|
26,170
|
|
NOTE O – FAIR VALUE MEASUREMENTS AND DISCLOSURES (Continued)
For financial assets measured at fair value on a recurring basis, the fair value measurements by level within the fair value hierarchy, used at December 31, 2012 were as follows:
|
|
|
(Level 1)
Quoted Prices in Active Markets for Identical Assets
|
|
|
(Level 2)
Significant
Other
Observable
Inputs
|
|
|
(Level 3)
Significant
Unobservable
Inputs
|
|
|
Total Fair Value December 31, 2012
|
|
|
|
|
(In Thousands)
|
|
|
Mortgage backed securities-U.S. Government Sponsored Enterprises (GSEs)
|
|
$
|
-
|
|
|
$
|
12,279
|
|
|
$
|
-
|
|
|
$
|
12,279
|
|
|
Obligations of state and political subdivisions
|
|
|
-
|
|
|
|
3,900
|
|
|
|
-
|
|
|
|
3,900
|
|
|
U.S. Government (including agencies)
|
|
|
-
|
|
|
|
8,648
|
|
|
|
-
|
|
|
|
8,648
|
|
|
Corporate bond
|
|
|
-
|
|
|
|
991
|
|
|
|
-
|
|
|
|
991
|
|
|
Equity securities
|
|
|
-
|
|
|
|
56
|
|
|
|
-
|
|
|
|
56
|
|
|
Mutual funds
|
|
|
-
|
|
|
|
3,047
|
|
|
|
-
|
|
|
|
3,047
|
|
|
Securities available for sale
|
|
$
|
-
|
|
|
$
|
28,921
|
|
|
$
|
-
|
|
|
$
|
28,921
|
|
For assets measured at fair value on a nonrecurring basis, the fair value measurements by level within the fair value hierarchy used at June 30, 2013, were as follows:
|
|
|
(Level 1)
Quoted Prices in Active Markets for Identical Assets
|
|
|
(Level 2)
Significant
Other
Observable
Inputs
|
|
|
(Level 3)
Significant
Unobservable
Inputs
|
|
|
Total Fair Value
June 30, 2013
|
|
|
|
|
(In Thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impaired loans
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
17,929
|
|
|
$
|
17,929
|
|
|
Real estate and other assets owned
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
6,062
|
|
|
$
|
6,062
|
|
|
Real estate held for sale
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
138
|
|
|
$
|
138
|
|
NOTE O – FAIR VALUE MEASUREMENTS AND DISCLOSURES (Continued)
Assets measured at fair value on a nonrecurring basis and for which Roma Financial Corporation has utilized level 3 inputs to determine fair value were immaterial at June 30, 2013.The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which Roma Financial Corporation has utilized level 3 inputs to determine fair value:
Quantitative Information About Level 3 Fair Value Measurements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In Thousands)
|
|
Impaired loans
|
|
$ 17,929
|
|
Appraisal of collateral (1)
|
|
Liquidation expenses (2)
|
|
5.0% to 20.0% (2)
|
|
Real estate and other
assets owned
|
|
$ 6,062
|
|
Appraisal of collateral (1)
|
|
Liquidation expenses (2)
|
|
5.0% to 10.0% (2)
|
|
Real estate held for sale
|
|
$ 138
|
|
Appraisal of collateral (1)
|
|
Liquidation expenses (2)
|
|
5.0% (2)
|
(1)
Fair value is generally determined through independent appraisals of the underlying collateral, which generally include level 3 inputs which are not identifiable.
(2)
Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses. The range of liquidation expenses are presented as a percent of the appraisal.
The Company’s policy is to recognize transfers between levels as of the actual date of the event or change in circumstances that caused the transfer. There were no transfers between Level 1, 2, and 3 for the six months ended June 30, 2013.
For assets measured at fair value on a nonrecurring basis, the fair value measurements by level within the fair value hierarchy used at December 31, 2012, were as follows:
|
|
|
(Level 1)
Quoted Prices in Active Markets for Identical Assets
|
|
|
(Level 2)
Significant
Other
Observable
Inputs
|
|
|
(Level 3)
Significant
Unobservable
Inputs
|
|
|
Total Fair Value December 31, 2012
|
|
|
|
|
(In Thousands)
|
|
|
Impaired loans
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
17,094
|
|
|
$
|
17,094
|
|
|
Real estate owned
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
8,340
|
|
|
$
|
8,340
|
|
|
Real estate held for sale
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
1,627
|
|
|
$
|
1,627
|
|
NOTE O – FAIR VALUE MEASUREMENTS AND DISCLOSURES (Continued)
The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which Roma Financial Corporation has utilized level 3 inputs to determine fair value:
|
Quantitative Information About Level 3 Fair Value Measurements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In Thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Impaired loans
|
|
$ 17,094
|
|
Appraisal of collateral (1)
|
|
Liquidation expenses (2)
|
|
5.0% to 20.0% (2)
|
|
Real estate and other
assets owned
|
|
$ 8,340
|
|
Appraisal of collateral (1)
|
|
Liquidation expenses (2)
|
|
5.0% to 10.0% (2)
|
|
Real estate held for sale
|
|
$ 1,627
|
|
Appraisal of collateral (1)
|
|
Liquidation expenses (2)
|
|
5.0% (2)
|
Cash and Cash Equivalents (Carried at Cost)
The carrying amounts reported in the balance sheet for cash and short-term instruments approximate those assets’ fair values.
Securities
The fair value of securities available for sale (carried at fair value) and held to maturity (carried at amortized cost) are determined by matrix pricing (Level 2), which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted market prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted prices. Level 2 debt securities are valued by a third-party service commonly used in the banking industry. Level 2 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 date, market consensus, prepayment speeds, credit information and the security’s terms and conditions, among other things.
Loans Receivable (Carried at Cost)
The fair values of loans are estimated using discounted cash flow analyses, using market rates at the balance sheet date that reflect the credit and interest rate-risk inherent in the loans. Projected future cash flows are calculated based upon contractual maturity or call dates, projected repayments and prepayments of principal. Generally, for variable rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values. The fair value measurement of loans receivable is Level 3 in the fair value hierarchy.
Impaired Loans (Generally Carried at Fair Value)
Impaired loans carried at fair value are those impaired loans
in which the Company has measured impairment generally based on the fair value of the related loan’s collateral. Fair value is generally determined based upon independent third-party appraisals of the properties, or discounted cash flows based upon the expected proceeds. These assets are included as Level 3 fair values, based upon the lowest level of input that is significant to the fair value measurements. The fair value at June 30, 2013 consists of the loan balances of $23.10 million, net of cumulative charge offs of $5.2 million. The fair value at December 31, 2012 consists of the loan balances of $22.7 million, net of cumulative charge offs of $5.6 million. The fair value measurement of impaired loans is Level 3 in the fair value hierarchy.
NOTE O – FAIR VALUE MEASUREMENTS AND DISCLOSURES (Continued)
Real Estate Owned
Real estate owned assets are adjusted to fair value, less estimated selling costs, upon transfer of the loans to real estate owned. Subsequently, real estate owned assets are carried at the lower of carrying value or fair value. Fair value is based upon independent market prices, appraised values of the collateral or management’s estimation of the value of the collateral. These assets are included as Level 3 fair values.
Real Estate Held for Sale
Real estate held for sale is adjusted to fair value less estimated selling costs upon transfer of the assets. Subsequently, real estate held for sale assets are carried at the lower of carrying value or fair value. Fair value is based upon independent market prices, appraised values of the collateral or management’s estimation of the value of the collateral. These assets are included as Level 3 fair values.
The following is management’s estimate of the fair value of all financial instruments whether carried at cost or fair value on the Company’s statement of financial condition.
The following information should not be interpreted as an estimate of the fair value of the Company since a fair value calculation is only provided for a limited portion of the Company assets and liabilities. Due to a wide range of valuation techniques and the degree of subjectivity used in making the estimates, comparisons between the Company disclosures and those of other companies may not be meaningful. The following methods and assumptions were used to estimate the fair values of the Company’s financial instruments at June 30, 2013 and December 31, 2012
Mortgage Servicing Rights
Fair value is based on a valuation model that calculates the present value of estimated future net servicing income.
The fair value measurement of mortgage servicing rights is Level 3 in the fair value hierarchy.
Federal Home Loan Bank Stock and ACBB Stock (Carried at Cost)
The carrying amount of this restricted investment’s in bank stock approximates fair value, and considers the limited marketability of such securities.
Accrued Interest Receivable and Payable (Carried at Cost)
The carrying amount of accrued interest receivable and accrued interest payable approximates its fair value.
Deposit Liabilities (Carried at Cost)
The fair values disclosed for demand deposits (e.g., interest and noninterest checking, passbook savings and money market accounts) are, by definition, equal to the amount payable on demand at the reporting date (i.e., their carrying amounts). Fair values for fixed-rate certificates of deposit are estimated using a discounted cash flow calculation that applies interest rates currently being offered in the market on certificates to a schedule of aggregated expected monthly maturities on time deposits. The fair value measurement of deposits is Level 2 in the fair value hierarchy.
Federal Home Loan Bank of New York Advances and Securities Sold Under Agreements to Repurchase (Carried at Cost)
Fair values of FHLB advances are determined by discounting the anticipated future cash payments by using the rates currently available to the Company for debt with similar terms and remaining maturities. Securities sold under agreements to repurchase are estimated using discounted cash flow analysis, based on quoted prices for available borrowings with similar credit risk characteristics, terms and remaining maturity. These prices obtained from this active market represent a market value that is deemed to represent the transfer price if the liability were assumed by a third party. The fair value measurement of FHLBNY Advances and Securities Sold Under Agreement to Repurchase is Level 2 in the fair value hierarchy.
NOTE O – FAIR VALUE MEASUREMENTS AND DISCLOSURES (Continued)
Off-Balance Sheet Financial Instruments (Disclosed at Cost)
Fair values for the Company’s off-balance sheet financial instruments (lending commitments and letters of credit) are based on fees currently charged in the market to enter into similar agreements, taking into account, the remaining terms of the agreements and the counterparties’ credit standing. The fair value of these off-balance sheet financial instruments was not considered material as of June 30, 2013 and December 31, 2012.
The carrying amounts and estimated fair values of financial instruments as of June 30, 2013 are as follows:
|
|
|
Carrying Value
|
|
|
Estimated Fair Value
|
|
|
(Level 1) Quoted Prices in Active Markets for Identical Assets
|
|
|
(Level 2)
Significant Other Observable Inputs
|
|
|
(Level 3) Significant Unobservable Inputs
|
|
|
|
|
(In Thousands)
|
|
|
Financial assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
155,762
|
|
|
$
|
155,762
|
|
|
$
|
155,762
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
Securities available for sale
|
|
|
26,170
|
|
|
|
26,170
|
|
|
|
-
|
|
|
|
26,170
|
|
|
|
-
|
|
|
Investment securities held to maturity
|
|
|
96,920
|
|
|
|
95,632
|
|
|
|
-
|
|
|
|
95,632
|
|
|
|
-
|
|
|
Mortgage-backed securities held to
maturity
|
|
|
299,426
|
|
|
|
307,126
|
|
|
|
|
|
|
|
307,126
|
|
|
|
-
|
|
|
Loans receivable
|
|
|
1,024,177
|
|
|
|
1,042,846
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,042,846
|
|
|
Federal Home Loan Bank of New York and
ACBB Stock
|
|
|
9,159
|
|
|
|
9,159
|
|
|
|
-
|
|
|
|
9,159
|
|
|
|
-
|
|
|
Accrued interest receivable
|
|
|
4,801
|
|
|
|
4,801
|
|
|
|
4,801
|
|
|
|
-
|
|
|
|
-
|
|
|
Mortgage servicing rights
|
|
|
708
|
|
|
|
708
|
|
|
|
-
|
|
|
|
-
|
|
|
|
708
|
|
|
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
|
1,407,853
|
|
|
|
1,424,887
|
|
|
|
-
|
|
|
|
1,424,887
|
|
|
|
-
|
|
|
Federal Home Loan Bank of New York Advances
|
|
|
47,323
|
|
|
|
49,931
|
|
|
|
-
|
|
|
|
49,931
|
|
|
|
-
|
|
|
Securities sold under agreements to
Repurchase
|
|
|
40,000
|
|
|
|
44,288
|
|
|
|
-
|
|
|
|
44,288
|
|
|
|
-
|
|
|
Accrued interest payable
|
|
|
389
|
|
|
|
389
|
|
|
|
389
|
|
|
|
-
|
|
|
|
-
|
|
NOTE O – FAIR VALUE MEASUREMENTS AND DISCLOSURES (Continued)
The carrying amounts and estimated fair values of financial instruments as of December 31, 2012 are as follows:
|
|
|
Carrying Value
|
|
|
Estimated Fair Value
|
|
|
(Level 1) Quoted Prices in Active Markets for Identical Assets
|
|
|
(Level 2)
Significant Other Observable Inputs
|
|
|
(Level 3) Significant Unobservable Inputs
|
|
|
|
|
(In Thousands)
|
|
|
Financial assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
144,451
|
|
|
$
|
144,451
|
|
|
$
|
144,451
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
Securities available for sale
|
|
|
28,921
|
|
|
|
28,921
|
|
|
|
-
|
|
|
|
28,921
|
|
|
|
-
|
|
|
Investment securities held to maturity
|
|
|
127,916
|
|
|
|
129,488
|
|
|
|
-
|
|
|
|
129,488
|
|
|
|
-
|
|
|
Mortgage-backed securities held to
maturity
|
|
|
343,318
|
|
|
|
363,918
|
|
|
|
|
|
|
|
363,918
|
|
|
|
-
|
|
|
Loans receivable
|
|
|
1,037,404
|
|
|
|
1,061,434
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,061,434
|
|
|
Federal Home Loan Bank of New York and
ACBB Stock
|
|
|
9,002
|
|
|
|
9,002
|
|
|
|
-
|
|
|
|
9,002
|
|
|
|
-
|
|
|
Accrued interest receivable
|
|
|
5,474
|
|
|
|
5,474
|
|
|
|
5,474
|
|
|
|
-
|
|
|
|
-
|
|
|
Mortgage servicing rights
|
|
|
657
|
|
|
|
657
|
|
|
|
-
|
|
|
|
-
|
|
|
|
657
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
|
1,484,569
|
|
|
|
1,495,149
|
|
|
|
-
|
|
|
|
1,495,149
|
|
|
|
-
|
|
|
Federal Home Loan Bank of New York Advances
|
|
|
52,385
|
|
|
|
56,500
|
|
|
|
-
|
|
|
|
56,500
|
|
|
|
-
|
|
|
Securities sold under agreements to
Repurchase
|
|
|
40,000
|
|
|
|
46,142
|
|
|
|
-
|
|
|
|
46,142
|
|
|
|
-
|
|
|
Accrued interest payable
|
|
|
450
|
|
|
|
450
|
|
|
|
450
|
|
|
|
-
|
|
|
|
-
|
|
Limitations
The fair value estimates are made at a discrete point in time based on relevant market information and information about the financial instruments. Fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors.
These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates. Further, the foregoing estimates may not reflect the actual amount that could be realized if all or substantially all of the financial instruments were offered for sale. This is due to the fact that no market exists for a sizable portion of the loan, deposit and off balance sheet instruments.
In addition, the fair value estimates are based on existing on-and-off balance sheet financial instruments without attempting to value anticipated future business and the value of assets and liabilities that are not considered financial instruments. Other significant assets that are not considered financial assets include premises and equipment. In addition, the tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in any of the estimates.
Finally, reasonable comparability between financial institutions may not be likely due to the wide range of permitted valuation techniques and numerous estimates which must be made given the absence of active secondary markets for many of the financial instruments. This lack of uniform valuation methodologies introduces a greater degree of subjectivity to these estimated fair values.
NOTE P –ACCUMULATED OTHER COMPREHENSIVE LOSS
Components of accumulated other comprehensive loss at June 30, 2013 and December 31, 2012 were as follows (in thousands):
|
|
June 30,
2013
|
|
|
December 31,
2012
|
|
|
|
(In Thousands)
|
|
|
|
|
|
|
|
|
|
Net unrealized gain (loss) on securities available for sale
|
$
|
(148
|
)
|
|
$
|
763
|
|
|
Tax effect
|
|
59
|
|
|
|
(326
|
)
|
|
Net of tax amount
|
|
(89
|
)
|
|
|
437
|
|
|
|
|
|
|
|
|
|
|
|
Minimum pension liability
|
|
(10,003
|
)
|
|
|
(10,003
|
)
|
|
Tax effect
|
|
4,001
|
|
|
|
4,001
|
|
|
Net of tax amount
|
|
(6,002
|
)
|
|
|
(6,002
|
)
|
|
|
|
|
|
|
|
|
|
|
Accumulated other comprehensive loss
|
|
(6,091
|
)
|
|
|
( 5,565
|
)
|
|
Accumulated other comprehensive loss attributable to noncontrolling interest
|
|
(3
|
)
|
|
|
(33
|
)
|
|
Accumulated other comprehensive loss
|
$
|
(6,094
|
)
|
|
$
|
( 5,598
|
)
|
NOTE Q–REGULATORY AGREEMENT
On September 21, 2012, Roma bank entered into an agreement with the Office of the Comptroller of the Currency (the “OCC Agreement”), Roma Bank’s primary regulator. The OCC Agreement requires Roma Bank to take certain actions, including, but not limited to:
|
·
|
Establishing a compliance committee to oversee Roma Bank’s obligations under the OCC Agreement and to prepare and submit written progress reports to the OCC on a periodic basis regarding Roma Bank’s compliance with the terms of the Agreement;
|
|
·
|
Completing a review of the Board’s processes regarding oversight of management and risk management and adopting and implementing a plan, acceptable to the OCC to strengthen oversight of management and operations;
|
|
·
|
Adopting a plan, acceptable to the OCC, to strengthen Roma Bank’s credit risk management practices;
|
|
·
|
Adopting and implementing a program, acceptable to the OCC, for the maintenance of an adequate allowance for loan and lease
losses;
|
|
·
|
Adopting and implementing a program, acceptable to the OCC, to reduce Roma Bank’s interest in criticized or classified assets;
|
|
·
|
Adopting and implementing an updated program, acceptable to the OCC, to ensure Roma Bank’s compliance with the Bank Secrecy
|
|
·
|
Act and to ensure implementation of a Bank Secrecy Act/Anti-Money laundering Risk Assessment Process;
|
|
·
|
Adopting, implementing and ensuring compliance with an independent internal audit program acceptable to the OCC, and;
|
|
·
|
Establishing a committee to ensure oversight of the Bank’s information technology activities.
|
While we are subject to the OCC Agreement, we expect that our management and board of directors will be required to focus considerable time and attention on taking corrective actions to comply with its terms. There also is no assurance that we will successfully address the OCC’s concerns in the OCC Agreement or that we will be able to fully comply with the OCC Agreement. If we do not fully comply with the OCC Agreement, the Bank could be subject to further regulatory actions, including enforcement actions. As of June 30, 2013, Roma Bank has complied with the terms of the OCC Agreement and met all timelines established in the OCC Agreement.
NOTE R- MERGER AGREEMENT
On December 19, 2012, Roma Financial Corporation, Roma Bank and Roma Financial Corporation, MHC entered into an Agreement and Plan of Merger with Investors Bancorp, Inc., Investors Bank, and Investors Bancorp, MHC which contemplates the consummation of a series of related merger transactions (“the Mergers”). Pursuant to the terms of the Agreement and Plan of Merger, each share of Roma Financial common stock issued and outstanding immediately prior to the effective date of the Merger will be converted into the right to receive 0.8653 shares of Investors Bancorp common stock. The Mergers are intended to qualify as a tax-free reorganizations for federal income tax purposes. The Mergers and the Agreement and Plan of Merger were approved by the stockholders of both the Company and Investors in June although the parties are still awaiting final regulatory approval. The Mergers are expected to close during the third quarter of 2013. Merger costs in the amount of $672,000 and $953,000 have been expensed for the three and six months ended June 30, 2013.