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OmniAmerican Bancorp Inc. Reports Operating Results (10-Q)

August 11, 2010 | About:
10qk

10qk

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OmniAmerican Bancorp Inc. (OABC) filed Quarterly Report for the period ended 2010-06-30.

Omniamerican Bancorp Inc. has a market cap of $133.1 million; its shares were traded at around $11.18 .

Highlight of Business Operations:

Cash and Cash Equivalents. Total cash and cash equivalents decreased $107.5 million, or 76.7%, to $32.6 million at June 30, 2010 from $140.1 million at December 31, 2009 primarily due to $164.9 million in cash used to purchase securities classified as available for sale, $118.9 million used to originate and purchase loans, and $10.4 million used to repay Federal Home Loan Bank advances during the six months ended June 30, 2010. These cash decreases were partially offset by $102.4 million in cash received from loan principal repayments, $40.3 million of proceeds from sales, principal repayments and maturities of securities classified as available for sale and $34.6 million of proceeds from the sales of longer term (greater than 15 years) one- to four-family residential mortgage loans during the six months ended June 30, 2010.

Commercial business loans decreased $4.9 million, or 8.2%, to $54.5 million at June 30, 2010. The decrease in commercial business loans was primarily attributable to a $6.8 million decrease in participation interests in Shared National Credits, to $9.8 million at June 30, 2010 from $16.6 million at December 31, 2009 due to the Companys efforts to reduce its exposure to Shared National Credits and to focus our commercial business lending on small-to-medium size businesses in our local market area. Real estate construction loans decreased $2.2 million, or 5.9%, to $34.7 million at June 30, 2010 and commercial real estate loans decreased $768,000, or 0.8%, to $100.2 million, primarily due to the economic downturn in our market area. One- to four-family residential mortgage loans increased $6.9 million, or 2.7%, to $264.1 million at June 30, 2010 from $257.3 million at December 31, 2009 as $67.4 million in originations and purchases of one- to four-family residential mortgage loans were offset by sales of $30.8 million, repayments of $28.3 million and a $1.4 million reclassification to other real estate owned.

Allowance for Loan Losses. The allowance for loan losses decreased $325,000, or 3.9%, to $8.0 million at June 30, 2010 from $8.3 million at December 31, 2009, while total loans decreased $18.9 million, or 2.7%, to $688.9 million at June 30, 2010 from $707.8 million at December 31, 2009. Decreases in the allowance for loan losses attributable to automobile and commercial real estate loans were partially offset by an increase in the allowance for loan losses related to commercial business loans. At June 30, 2010, the allowance for loan losses represented 1.16% of total loans compared to 1.18% of total loans at December 31, 2009. Included in the allowance for loan losses at June 30, 2010 were specific allowances for loan losses of $889,000 related to six impaired loans with balances totaling $5.3 million. In addition, impaired loans with balances totaling $17.6 million did not require specific allowances for loan losses at June 30, 2010. The allowance for loan losses at December 31, 2009 included a $687,000 specific allowance for loan losses on five impaired loans with balances totaling of $6.6 million. Impaired loans with balances totaling $10.6 million did not require a specific valuation allowance at December 31, 2009. The balance of unimpaired loans decreased $24.6 million, or 3.6%, to $666.0 million at June 30, 2010 from $690.6 million at December 31, 2009. The allowance for loan losses related to

Deposits. Deposits decreased $112.2 million, or 12.3%, to $797.8 million at June 30, 2010 from $910.0 million at December 31, 2009. Our core deposits (consisting of interest-bearing and non-interest-bearing demand accounts, money market accounts and savings accounts) decreased $135.1 million, or 23.4%, to $441.0 million at June 30, 2010 from $576.2 million at December 31, 2009. The core deposit balance at December 31, 2009 included $159.5 million in subscriptions for the purchase of shares of common stock in our stock offering, which was completed on January 20, 2010. Certificates of deposit increased $22.9 million, or 6.9%, to $356.7 million at June 30, 2010 from $333.8 million at December 31, 2009.

Interest Expense. Interest expense decreased by $1.8 million, or 34.0%, to $3.5 million for the three months ended June 30, 2010 from $5.3 million for the three months ended June 30, 2009. The decrease resulted primarily from decreases in interest expense on deposits of $905,000 and interest expense on borrowed funds of $845,000. The average rate we paid on deposits decreased 58 basis points to 1.37% for the three months ended June 30, 2010 from 1.95% for the three months ended June 30, 2009. Partially offsetting the decrease in average rates paid on deposits was an increase in the average balance of interest-bearing deposits of $26.4 million, or 3.8%, to $718.8 million for the three months ended June 30, 2010 from $692.4 million for the three months ended June 30, 2009. The increase in the average balance of our deposits was primarily due to a $20.5 million increase in the average balance of our core deposits (consisting of demand accounts, money market accounts and savings accounts), and a $5.9 million increase in the average balance of our certificates of deposit.

Provision for Loan Losses. We recorded a provision for loan losses of $1.5 million for the three months ended June 30, 2010 compared to a provision for loan losses of $900,000 for the three months ended June 30, 2009. This increase was primarily due to a $1.3 million increase in net charge-offs to $2.1 million for the three months ended June 30, 2010 from $829,000 for the three months ended June 30, 2009. Net charge-offs increased to 1.24% of average loans outstanding for the three months ended June 30, 2010 from 0.45% for the three months ended June 30, 2009. Substandard loans decreased $10.6 million, or 30.3%, to $24.4 million at June 30, 2010 from $35.0 million at June 30, 2009. At June 30, 2010, we identified 86 impaired loans with balances totaling $22.9 million. Eight of these impaired loans with balances totaling $5.3 million had specific allowance for loan losses totaling $889,000. Included in the substandard loan total at June 30, 2009 were impaired loans totaling $5.1 million with a specific allowance for loan losses of $1.3 million. In addition, five loans with balances totaling $900,000 were reclassified to other real estate owned during the three months ended June 30, 2010. The allowance for loan losses to total loans receivable decreased to 1.16% at June 30, 2010 from 1.20% at June 30, 2009 primarily due to the charge-off of loans for which specific allowance for loan losses had previously been established.

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