Community Financial Corp. (CFFC, Financial) filed Quarterly Report for the period ended 2010-09-30.
Community Financial Corp. has a market cap of $14.4 million; its shares were traded at around $3.3 with a P/E ratio of 4.2 and P/S ratio of 0.5.
due to a slower economy and underwriting changes to limit funding of speculative construction loans. We have experienced reduced construction activity in our market areas while existing commercial real estate activity continues to be moderate. At September 30, 2010, our assets totaled $539.1 million, including net loans receivable of $491.7 million, compared to total assets of $547.2 million, including net loans receivable of $502.1 million, at March 31, 2010. Commercial real estate loans were $173.5 million or 33.9%, residential first mortgage loans were $149.6 million or 29.2%, construction loans totaled $49.3 million or 9.6%, commercial business loans were $49.5 or 9.7%, and home equity loans and lines were $47.6 million or 9.3% of our total loan portfolio at September 30, 2010 compared to commercial real estate loans of $171.8 or 32.7%, residential first mortgage loans of $145.0 or 27.6%, construction loans of $63.8 million or 12.1%, commercial business loans of $53.4 million or 10.2%, and home equity loans and lines of $48.0 million or 9.1% at March 31, 2010.
At September 30, 2010, non-performing assets totaled $19.1 million or 3.54% of assets compared to $17.7 million or 3.24% of assets at March 31, 2010. Our allowance for loan losses to non-performing loans was 69.8% and to total loans was 1.7% at September 30, 2010 compared to 55.3% and 1.6%, respectively at March 31, 2010. The increase in nonperforming assets consisted of $4.0 million of real estate owned and repossessed assets offset by a $2.6 million decrease in nonaccrual loans. Due primarily to the slowing economy, we expect an increase in non-performing assets in the future. Charge-offs of $4.3 million during the six month period consisted primarily of $1.4 million of residential real estate loans, $1.5 million of commercial business loans, $622,000 of construction loans, $333,000 of land loans, $363,000 of commercial real estate loans and $144,000 of automobile loans.
Deposits decreased $11.4 million, or 2.9% to $386.9 million at September 31, 2010, from $398.4 million at March 31, 2010. The decrease was primarily due to decreases in time deposits of $14.5 million and non-interest bearing accounts of $701,000, partially offset by increases in money market and interest checking accounts of $3.7 million. The decrease in deposits was related to the decrease in our assets and funding needs. The decrease in deposits was generally achieved by lowering the rates offered on our deposits products. FHLB advances increased $1.8 million and other borrowings increased $1.1 million at September 30, 2010 from March 31, 2010 to partially offset the decrease in deposits with lower rate funds.
At September 30, 2010, non-performing assets totaled approximately $19.1 million or 3.54% of assets compared to $17.7 million or 3.24% of assets at March 31, 2010. Non-performing assets at September 30, 2010 were comprised of repossessed assets of $7.1 million and non accrual loans of $12.0 million. Included in the total non-performing assets at September 30, 2010, was one relationship of approximately $2.9 million which includes a loan totaling $1.9 million secured by raw land. At September 30, 2010, our allowance for loan losses to non-performing loans was 69.8% and to total loans was 1.7% compared to 55.3% and 1.6%, respectively at March 31, 2010. At September 30, 2010, the percentage of delinquent loans to total loans was 5.53% compared to 6.28% at March 31, 2010. Our allowance for loan losses increased $306,000 at September 30, 2010 compared to March 31, 2010 due to allowances for specific loans. Based on current market values of the properties securing these loans, management anticipates no significant losses in excess of the allowance for losses previously recorded. Although management believes that it uses the best information available to make such determinations, future adjustments to allowances may be necessary, and net income could be significantly affected, if circumstances differ substantially from the assumptions used in making the initial determinations. We also had $5.7 million of loans that were classified as Troubled Debt Restructurings (TDR s) at September 30, 2010 none of which were included in nonaccrual loans. These loans have had their original terms modified to facilitate payment by the borrower. The loans have been classified as TDRs primarily due to a change to interest only payments. The terms of these modified loans will remain until such time that the Bank deems it beneficial to change the terms. The largest loan in this category is a nonresidential property with a loan balance of $1.6 million.
Interest Expense. Total interest expense decreased $1.4 million, or 30.4%, to $3.1 million for the six months ended September 30, 2010, from $4.5 million for the six months ended September 30, 2009. Interest on deposits decreased to $2.7 million for the six months ended September 30, 2010, from $4.0 million for the same period last year due to a decrease in the average rate paid on deposit balances, partially offset by an increase in the average deposit balances. The rate paid on deposits decreased from 2.15% for the six months ended September 30, 2009 to 1.37% for the same period in the current fiscal year. The decrease in the average rate paid on deposits was due primarily to market changes. Interest expense on borrowed money decreased to $431,000 for the six months ended September 30, 2010 from $500,000 for the six months ended September 30, 2009 due to a decrease in the average rate on borrowing balances and decrease in the average outstanding balance on borrowings. The average balance on borrowings decreased from $108.9 million for the six months ended September 30, 2009 to $102.5 million for the six months ended September 30, 2010. The average rate paid on borrowings decreased from .92% for the six months ended September 30, 2009 to .84% for the six month period ended September 30, 2010.
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Community Financial Corp. has a market cap of $14.4 million; its shares were traded at around $3.3 with a P/E ratio of 4.2 and P/S ratio of 0.5.
Highlight of Business Operations:
Net income (loss) for the quarter ended September 30, 2010 decreased $1.6 million to $(525,000) compared to $1.1 million for the quarter ended September 30, 2009. Net income (loss) for the quarter decreased due primarily to a provision for loan loss increase of $2.5 million. Net income for the six months ended September 30, 2010 decreased $1.4 million to $462,000 compared to $1.8 million for the six months ended September 30, 2009. Net income for the six months decreased due primarily to a provision for loan losses increase of $3.5 million, or 373.6%, partially offset by increases in net interest income. The increased provision for the periods was primarily related to higher charge-offs and management s analysis of the Bank s loan portfolio and the related likelihood of future loan losses.due to a slower economy and underwriting changes to limit funding of speculative construction loans. We have experienced reduced construction activity in our market areas while existing commercial real estate activity continues to be moderate. At September 30, 2010, our assets totaled $539.1 million, including net loans receivable of $491.7 million, compared to total assets of $547.2 million, including net loans receivable of $502.1 million, at March 31, 2010. Commercial real estate loans were $173.5 million or 33.9%, residential first mortgage loans were $149.6 million or 29.2%, construction loans totaled $49.3 million or 9.6%, commercial business loans were $49.5 or 9.7%, and home equity loans and lines were $47.6 million or 9.3% of our total loan portfolio at September 30, 2010 compared to commercial real estate loans of $171.8 or 32.7%, residential first mortgage loans of $145.0 or 27.6%, construction loans of $63.8 million or 12.1%, commercial business loans of $53.4 million or 10.2%, and home equity loans and lines of $48.0 million or 9.1% at March 31, 2010.
At September 30, 2010, non-performing assets totaled $19.1 million or 3.54% of assets compared to $17.7 million or 3.24% of assets at March 31, 2010. Our allowance for loan losses to non-performing loans was 69.8% and to total loans was 1.7% at September 30, 2010 compared to 55.3% and 1.6%, respectively at March 31, 2010. The increase in nonperforming assets consisted of $4.0 million of real estate owned and repossessed assets offset by a $2.6 million decrease in nonaccrual loans. Due primarily to the slowing economy, we expect an increase in non-performing assets in the future. Charge-offs of $4.3 million during the six month period consisted primarily of $1.4 million of residential real estate loans, $1.5 million of commercial business loans, $622,000 of construction loans, $333,000 of land loans, $363,000 of commercial real estate loans and $144,000 of automobile loans.
Deposits decreased $11.4 million, or 2.9% to $386.9 million at September 31, 2010, from $398.4 million at March 31, 2010. The decrease was primarily due to decreases in time deposits of $14.5 million and non-interest bearing accounts of $701,000, partially offset by increases in money market and interest checking accounts of $3.7 million. The decrease in deposits was related to the decrease in our assets and funding needs. The decrease in deposits was generally achieved by lowering the rates offered on our deposits products. FHLB advances increased $1.8 million and other borrowings increased $1.1 million at September 30, 2010 from March 31, 2010 to partially offset the decrease in deposits with lower rate funds.
At September 30, 2010, non-performing assets totaled approximately $19.1 million or 3.54% of assets compared to $17.7 million or 3.24% of assets at March 31, 2010. Non-performing assets at September 30, 2010 were comprised of repossessed assets of $7.1 million and non accrual loans of $12.0 million. Included in the total non-performing assets at September 30, 2010, was one relationship of approximately $2.9 million which includes a loan totaling $1.9 million secured by raw land. At September 30, 2010, our allowance for loan losses to non-performing loans was 69.8% and to total loans was 1.7% compared to 55.3% and 1.6%, respectively at March 31, 2010. At September 30, 2010, the percentage of delinquent loans to total loans was 5.53% compared to 6.28% at March 31, 2010. Our allowance for loan losses increased $306,000 at September 30, 2010 compared to March 31, 2010 due to allowances for specific loans. Based on current market values of the properties securing these loans, management anticipates no significant losses in excess of the allowance for losses previously recorded. Although management believes that it uses the best information available to make such determinations, future adjustments to allowances may be necessary, and net income could be significantly affected, if circumstances differ substantially from the assumptions used in making the initial determinations. We also had $5.7 million of loans that were classified as Troubled Debt Restructurings (TDR s) at September 30, 2010 none of which were included in nonaccrual loans. These loans have had their original terms modified to facilitate payment by the borrower. The loans have been classified as TDRs primarily due to a change to interest only payments. The terms of these modified loans will remain until such time that the Bank deems it beneficial to change the terms. The largest loan in this category is a nonresidential property with a loan balance of $1.6 million.
Interest Expense. Total interest expense decreased $1.4 million, or 30.4%, to $3.1 million for the six months ended September 30, 2010, from $4.5 million for the six months ended September 30, 2009. Interest on deposits decreased to $2.7 million for the six months ended September 30, 2010, from $4.0 million for the same period last year due to a decrease in the average rate paid on deposit balances, partially offset by an increase in the average deposit balances. The rate paid on deposits decreased from 2.15% for the six months ended September 30, 2009 to 1.37% for the same period in the current fiscal year. The decrease in the average rate paid on deposits was due primarily to market changes. Interest expense on borrowed money decreased to $431,000 for the six months ended September 30, 2010 from $500,000 for the six months ended September 30, 2009 due to a decrease in the average rate on borrowing balances and decrease in the average outstanding balance on borrowings. The average balance on borrowings decreased from $108.9 million for the six months ended September 30, 2009 to $102.5 million for the six months ended September 30, 2010. The average rate paid on borrowings decreased from .92% for the six months ended September 30, 2009 to .84% for the six month period ended September 30, 2010.
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