Putnam Town Crier - Bank pg 3 2-4-10

Details: Category: Past Issues

PUTNAM --- PSB Holdings, Inc., the holding company for Putnam Bank, reported net income for the quarter ended December 31, 2009 of $528,000 or $.08 per basic and diluted share as compared to net income of $2.0 million or $.31 per basic and diluted share for the quarter ended December 31, 2008. The net income for the December 31, 2008 quarter was due to the previously reported tax benefit related to write-downs of Freddie Mac pass-through auction-rate securities that had primarily been recorded during the quarter ended September 30, 2008. For the six months ended December 31, 2009, net income totaled $931,000 or $.15 per basic and diluted share as compared to a net loss of $2.0 million or $.33 per basic and $.32 per diluted share for the six months ended December 31, 2008. The net loss was primarily due to other-than-temporarily impaired investment write-downs of $5.8 million recorded during the six months ended December 31, 2008. The write-downs included $3.95 million in Freddie Mac pass-through auction-rate securities issued by trusts consisting solely of Freddie Mac preferred stock and $1.83 million in Lehman Brothers corporate debt.
Net interest and dividend income decreased $107,000 or 3.2% to $3.2 million for the quarter ended December 31, 2009 compared to $3.3 million for the quarter ended December 31, 2008. Net interest rate spread remained unchanged at 2.57% for the quarter ended December 31, 2009 and 2008, respectively. Net interest margin decreased five basis points to 2.86% from 2.91% for the same periods. Net interest and dividend income decreased $136,000 or 2.1% to $6.34 million for the six months ended December 31, 2009 compared to $6.48 million for the six months ended December 31, 2008. Net interest rate spread increased ten basis points to 2.53% from 2.43% for the six months ended December 31, 2009 and 2008, respectively. Net interest margin increased one basis point to 2.82% from 2.81% for the same periods.
The provision for loan losses decreased $58,000 or 18.0% to $265,000 for the quarter ended December 31, 2009 compared to $323,000 for the quarter ended December 31, 2008. The ratio of the allowance to gross loans outstanding was .84% as of December 31, 2009 and .75% as of December 31, 2008. The ratio of the allowance to nonperforming loans was 21.9% as of December 31, 2009 compared to 57.8% as of December 31, 2008. The provision for loan losses decreased $90,000 or 15.1% to $507,000 for the six months ended December 31, 2009 compared to $597,000 for the six months ended December 31, 2008.
Noninterest income increased $101,000 or 16.9% to $700,000 for the quarter ended December 31, 2009 compared to noninterest income of $599,000 for the quarter ended December 31, 2008. This was primarily due to an increase of $512,000 in net gains on sales of securities and an increase of $49,000 in gain on loan sales. This was partially offset by an increase of $299,000 in write-downs of investments and a decrease of $156,000 in BOLI income. The impairment charges for the quarter ended December 31, 2009 consisted of private label CMOs. The impairment charges for the quarter ended December 31, 2008 consisted of Freddie Mac pass-through auction-rate securities issued by trusts consisting solely of Freddie Mac preferred stock and Lehman Brothers corporate debt.
Noninterest income increased to $1.5 million for the six months ended December 31, 2009 from a noninterest charge of $4.1 million for the six months ended December 31, 2008. This was primarily due to write-downs of investments of $5.8 million for the six months ended December 31, 2008 compared to $932,000 for the six months ended December 31, 2009. The impairment charges for the six months ended December 31, 2009 consisted of private label CMOs. The impairment charges for the six months ended December 31, 2008 consisted of Freddie Mac pass-through auction-rate securities issued by trusts consisting solely of Freddie Mac preferred stock and Lehman Brothers corporate debt. Net gains on sales of securities increased $842,000 for the six months ended December 31, 2009 compared to the six months ended December 31, 2008.
Noninterest expense increased $295,000 or 11.3% to $2.9 million for the quarter ended December 31, 2009 compared to $2.6 million for the quarter ended December 31, 2008. Salaries and benefits increased $22,000 or 1.5% to $1.52 million for the quarter ended December 31, 2009 compared to $1.50 million for the quarter ended December 31, 2008. Occupancy expense increased $28,000 or 10.3% to $301,000 for the quarter ended December 31, 2009 compared to $273,000 for the quarter ended December 31, 2008. This increase includes expenses related to the opening of the Bank’s new branch in Norwich, CT in September 2009. All other noninterest expenses increased $245,000 or 28.9% to $1.1 million for the quarter ended December 31, 2009 compared to $849,000 for the quarter ended December 31, 2008. This increase was primarily due to increases in FDIC assessments and one-time prepayment penalties on Federal Home Loan Bank advances during the quarter ended December 31, 2009, described below. Noninterest expense increased $909,000 or 17.5% to $6.1 million for the six months ended December 31, 2009 compared to $5.2 million for the six months ended December 31, 2008. Salaries and benefits increased $59,000 or 2.0% to $3.02 million for the six months ended December 31, 2009 compared to $2.96 million for the six ended December 31, 2008. Occupancy expense increased $63,000 or 11.6% to $606,000 for the six months ended December 31, 2009 compared to $543,000 for the six months ended December 31, 2008. This increase includes expenses related to the opening of the Bank’s new branch in Norwich, CT in September 2009. All other noninterest expenses increased $787,000 or 46.9% to $2.5 million for the six months ended December 31, 2009 compared to $1.7 million for the six months ended December 31, 2008. This increase was primarily due to other real estate owned write-downs of $321,000 on a property sold in October 2009, an increase in FDIC assessments of $251,000 and $172,000 in one-time prepayment penalties on $18.0 million of Federal Home Loan Bank advances, with a weighted average rate of 4.71%, paid off prior to maturity during the six months ended December 31, 2009.
Income tax expense amounted to $189,000 for the quarter ended December 31, 2009 compared to a tax benefit of $1.0 million for the quarter ended December 31, 2008. The tax benefit related to the Freddie Mac write-down was not available until the quarter ending December 31, 2008. Income tax expense amounted to $296,000 for the six months ended December 31, 2009 compared to a tax benefit of $1.3 million for the six months ended December 31, 2008.
Total assets of the Company were $480.3 million at December 31, 2009 compared to $477.3 million at June 30, 2009. Loans decreased $4.0 million during the six months ended December 31, 2009 and represented $263.7 million or 54.9% of total assets at December 31, 2009 as compared to $267.7 million or 56.1% of total assets at June 30, 2009. Securities available for sale decreased $44.1 million during the six months ended December 31, 2009, and represented $120.7 million or 25.1% of total assets at December 31, 2009 as compared to $164.9 million or 34.5% of total assets at June 30, 2009. Securities held to maturity increased $35.4 million during the six months ended December 31, 2009 and represented $37.4 million or 7.8% of total assets at December 31, 2009 as compared to $2.0 million or 0.4% at June 30, 2009.
Total liabilities of the Company decreased to $436.2 million at December 31, 2009 from $437.5 million at June 30, 2009. Borrowed funds decreased $16.5 million during the six months ended December 31, 2009, and represented $108.5 million or 22.6% of total assets as of December 31, 2009 as compared to $125.0 million or 26.2% of total assets as of June 30, 2009. This included a reduction in FHLB borrowings of $18.0 million. Total deposits increased $16.1 million during the six months ended December 31, 2009, and represented $324.2 million or 67.5% of total assets at December 31, 2009 as compared to $308.1 million or 64.5% of total assets at June 30, 2009.
Stockholders’ equity increased to $44.1 million at December 31, 2009 from $40.0 million at June 30, 2009, primarily due to a decrease in accumulated other comprehensive loss of $3.1 million and net income for the six months ended December 31, 2009.