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

November 13, 2009 | About:
10qk

10qk

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Colonial Bankshares Inc. (COBK) filed Quarterly Report for the period ended 2009-09-30.

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 $29.3 million; its shares were traded at around $6.62 with and P/S ratio of 1.1.

Highlight of Business Operations:

Net loans receivable increased $16.1 million, or 5.3%, to $319.3 million at September 30, 2009 from $303.2 million at December 31, 2008. One- to four-family residential real estate loans increased $4.4 million to $149.7 million at September 30, 2009 from $145.3 million at December 31, 2008. Commercial real estate loans increased $12.1 million, or 14.8%, to $94.1 million at September 30, 2009 from $82.0 million at December 31, 2008. Home equity loans and lines of credit decreased $2.8 million to $38.5 million at September 30, 2009 from $41.3 million at December 31, 2008. Multi-family mortgage loans decreased slightly to $4.6 million at September 30, 2009 from $4.9 million at December 31, 2008. Construction loans increased $2.6 million to $14.8 million at September 30, 2009 from $12.2 million at December 31, 2008. Commercial loans increased by $672 thousand to $17.8 million at September 30, 2009 from $17.2 million at December 31, 2008.

Securities available-for-sale increased $9.2 million to $174.7 million at September 30, 2009 from $165.5 million at December 31, 2008. The increase was the result of purchases in the amount of $66.8 million and increases in market value of $3.8 million offset by $23.4 million in principal amortization and $38.2 million in sales, calls and maturities. In addition, securities held-to-maturity increased by $26.6 million, to $43.5 million at September 30, 2009 from $16.9 million at December 31, 2008. This increase was the result of purchases of $37.8 million offset by principal amortization of $426 thousand and maturities of $10.2 million.

Deposits increased $29.8 million, or 6.5%, to $487.0 million at September 30, 2009 from $457.2 million at December 31, 2008. The largest increase was in NOW accounts, which increased $21.7 million, or 39.2%, to $77.1 million at September 30, 2009 from $55.4 million at December 31, 2008. Savings accounts increased $7.9 million, or 9.7%, to $89.0 million at September 30, 2009 from $81.1 million at December 31, 2008. Money market deposit accounts increased by $14.3 million, or 31.5%, to $59.7 million at September 30, 2009 from $45.4 million at December 31, 2008. Super NOW accounts increased by $2.3 million to $17.8 million at September 30, 2009 from $15.5 million at December 31, 2008, non-interest bearing demand accounts decreased by $334 thousand to $17.8 million at September 30, 2009 from $18.1 million at December 31, 2008 and certificates of deposit decreased by $16.2 million to $225.5 million at September 30, 2009 from $241.7 million at December 31, 2008.

Non-interest Expense. Non-interest expense increased $248 thousand to $2.8 million for the three months ended September 30, 2009 from $2.5 million for the three months ended September 30, 2008. Compensation and benefits expense increased $112 thousand to $1.5 million for the three months ended September 30, 2009 from $1.4 million for the three months ended September 30, 2008. Occupancy and equipment expense increased $51 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 $190 thousand for the three months ended September 30, 2009 from $121 thousand for the three months ended September 30, 2008. This increase was mainly due to increases in the balance and insurance rates of insurable accounts and in the FDIC special assessment. Professional fees increased $28 thousand mainly due to increases in accounting and audit expenses.

Non-interest Income. Non-interest income was $421 thousand for the nine months ended September 30, 2009 and $327 thousand for the nine months ended September 30, 2008. Fees and service charges on deposit accounts increased by $62 thousand to $888 thousand for the nine months ended September 30, 2009 from $826 thousand for the nine months ended September 30, 2008. The increase in fees and service charges is attributed to increases in volume in overdraft fees and ATM fees. Gains on sales of loans totaled $56 thousand for the nine months ended September 30, 2009 compared to $7 thousand for the nine months ended September 30, 2008. Non-interest income for the nine months ended September 30, 2009 was reduced by an other-than-temporary impairment of a mutual fund and corporate bonds in our investment security portfolio. This charge totaled $914 thousand (pre-tax) for the nine months ended September 30, 2009. For the nine months ended September 30, 2008, non-interest income was reduced by an other-than-temporary impairment of the AMF mutual fund in the amount of $844 thousand (pre-tax).

Non-interest Expense. Non-interest expense increased $1.6 million to $8.8 million for the nine months ended September 30, 2009 from $7.2 million for the nine months ended September 30, 2008. Compensation and benefits expense increased $263 thousand to $4.3 million for the nine months ended September 30, 2009 from $4.1 million for the nine months ended September 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 were offset by a decrease in ESOP expense account. Occupancy and equipment expense increased $179 thousand mainly due to increases in heat, light and utilities, repair and maintenance expense and depreciation expense. Federal deposit insurance premiums increased to $787 thousand for the nine months ended September 30, 2009 from $244 thousand for the nine months ended September 30, 2008. This increase was mainly due to increases in the balance and insurance rates of insurable accounts as well as the FDIC special assessment of $259 thousand payable September 30, 2009. Professional fees increased $88 thousand. This increase was due to increases in legal fees due to increased foreclosure activity and accounting and auditing 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.

Read the The complete ReportCOBK is in the portfolios of Third Avenue Management, Martin Whitman of Third Avenue Value Fund.

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10qk
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