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Colonial Bankshares Inc. Reports Operating Results (10-Q)

August 13, 2009 | About:

Colonial Bankshares Inc. (COBK) filed Quarterly Report for the period ended 2009-06-30.

Colonial Bankshares Inc. is the mid-tier stock holding company ofColonial Bank FSB. Colonial Bankshares Inc. is a federally charteredcorporation and owns 100% of the outstanding common stock of Colonial Bank FSB. Colonial Bankshares Inc. has not engaged in any significant business activity other than owning all of the shares of common stock of Colonial Bank FSB. Colonial Bankshares Inc. has a market cap of $39.6 million; its shares were traded at around $8.95 with a P/E ratio of 27.1 and P/S ratio of 1.3.

Highlight of Business Operations:

Net loans receivable increased $4.1 million, or 1.4%, to $307.3 million at June 30, 2009 from $303.2 million at December 31, 2008. One-to four-family residential real estate loans increased $670 thousand to $146.0 million at June 30, 2009 from $145.3 million at December 31, 2008. Commercial real estate loans increased $7.1 million, or 8.7%, to $89.1 million at June 30, 2009 from $82.0 million at December 31, 2008. Home equity loans and lines of credit decreased $2.7 million to $38.6 million at June 30, 2009 from $41.3 million at December 31, 2008. Multi-family mortgage loans remained constant at $4.9 million at June 30, 2009 and December 31, 2008. Construction loans decreased $2.4 million to $9.8 million at June 30, 2009 from $12.2 million at December 31, 2008. Commercial loans increased by $1.7 million to $18.9 million at June 30, 2009 from $17.2 million at December 31, 2008.

Securities available-for-sale increased $980 thousand to $166.4 million at June 30, 2009 from $165.5 million at December 31, 2008. The increase was the result of purchases in the amount of $42.9 million and increases in market value of $2.0 million offset by $14.8 million in principal amortization and $29.3 million in sales, calls and maturities. In addition, securities held-to-maturity increased by $13.7 million, to $30.6 million at June 30, 2009 from $16.9 million at December 31, 2008. This increase was the result of purchases of $18.5 million offset by principal amortization of $277 thousand and maturities of $4.4 million.

Deposits increased $33.8 million, or 7.4%, to $491.0 million at June 30, 2009 from $457.2 million at December 31, 2008. The largest increase was in NOW accounts, which increased $32.2 million, or 58.1%, to $87.6 million at June 30, 2009 from $55.4 million at December 31, 2008. Savings accounts increased $4.4 million, or 5.4%, to $85.5 million at June 30, 2009 from $81.1 million at December 31, 2008. Money market deposit accounts increased by $8.0 million, or 17.6%, to $53.4 million at June 30, 2009 from $45.4 million at December 31, 2008. Super NOW accounts increased by $2.3 million to $17.8 million at June 30, 2009 from $15.5 million at December 31, 2008, non-interest bearing demand accounts decreased by $1.0 million to $17.1 million at June 30, 2009 from $18.1 million at December 31, 2008 and certificates of deposit decreased by $12.2 million to $229.5 million at June 30, 2009 from $241.7 million at December 31, 2008.

Non-interest Income. Non-interest income was $256 thousand for the three months ended June 30, 2009 and $183 thousand for the three months ended June 30, 2008. There was a net gain on the sale and call of securities of $128 thousand for the three months ended June 30, 2009, compared to a gain of $238 thousand during the same quarter in 2008. Fees and service charges on deposit accounts increased by $20 thousand to $304 thousand for the three months ended June 30, 2009 from $284 thousand for the three months ended June 30, 2008. The increase in fees and service charges was attributed to increases in volume of overdraft fees and ATM fees. Non-interest income for the three months ended June 30, 2009 was reduced by an other-than-temporary impairment of a mutual fund and a corporate bond in our available-for-sale investment security portfolio in the amount of $249 thousand (pre-tax). For the three months ended June 30, 2008, the other-than-temporary impairment of the mutual fund was $368 thousand (pre-tax).

Non-interest Expense. Non-interest expense increased $896 thousand to $3.3 million for the three months ended June 30, 2009 from $2.4 million for the three months ended June 30, 2008. Compensation and benefits expense increased slightly to $1.5 million for the three months ended June 30, 2009 from $1.3 million for the three months ended June 30, 2008. Occupancy and equipment expense increased $70 thousand mainly due to increases in heat, light and utilities, depreciation expense, maintenance and real estate taxes which are attributable to the new branch locations. Federal deposit insurance premiums increased to $206 thousand for the three months ended June 30, 2009 from $81 thousand for the three months ended June 30, 2008. This increase was mainly due to increases in the balance and insurance rates of insurable accounts and in the FDIC special assessment. Data processing expense decreased $13 thousand. Professional fees increased $26 thousand mainly due to increases in legal fees and accounting and audit expenses. Other miscellaneous non-interest expense increased $528 thousand. This increase was mainly due to a pre-payment penalty in the amount of $459 thousand paid on the pay-off of a long-term FHLB advance along with increases in advertising and promotion expense, supervisory examination expense, insurance and surety bond expense and correspondent bank fees.

Non-interest Expense. Non-interest expense increased $1.4 million to $6.1 million for the six months ended June 30, 2009 from $4.7 million for the six months ended June 30, 2008. Compensation and benefits expense increased $151 thousand to $2.8 million for the six months ended June 30, 2009 from $2.7 million for the six months ended June 30, 2008. Normal salary increases, the hiring of personnel to staff our newly opened branch locations, increases in payroll taxes and increases in pension expense offset by a decrease in ESOP expense account for the increase in compensation and benefit expense. Occupancy and equipment expense increased $128 thousand mainly due to increases in heat, light and utilities, repair and maintenance expense and depreciation expense. Federal deposit insurance premiums increased to $597 thousand for the six months ended June 30, 2009 from $122 thousand for the six months ended June 30, 2008. This increase was mainly due to increases in the balance and insurance rates of insurable accounts and in the FDIC special assessment. Data processing expense increased $7 thousand. This increase in data processing costs was due to the increase in the number of savings accounts and loan accounts with our service bureau and line costs associated with the opening of new branches. Professional fees increased $60 thousand. Increases in legal fees and accounting and auditing fees account for the increase in professional fees. Other miscellaneous non-interest expense increased $569 thousand. This was mainly due to a pre-payment penalty in the amount of $459 thousand paid on the pay-off of a long-term FHLB advance along with increases in advertising and promotion expense, supervisory examination expense, insurance and surety bond expense, customer check printing charges and correspondent bank expense.

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