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WVS Financial Corp. Reports Operating Results (10-Q)

November 13, 2009 | About:
10qk

10qk

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WVS Financial Corp. (WVFC) filed Quarterly Report for the period ended 2009-09-30.

WVS FINANCIAL is a Pennsylvania-chartered unitary bank holding company of West View Savings Bank. Wvs Financial Corp. has a market cap of $30.01 million; its shares were traded at around $14.5 with a P/E ratio of 13.43 and P/S ratio of 1.66. The dividend yield of Wvs Financial Corp. stocks is 4.41%. Wvs Financial Corp. had an annual average earning growth of 6.8% over the past 10 years.

Highlight of Business Operations:

The Companys assets totaled $370.0 million at September 30, 2009, as compared to $419.4 million at June 30, 2009. The $49.4 million or 11.8% decrease in total assets was primarily comprised of a $21.4 million or 12.3% decrease in mortgage-backed securities (MBS) held to maturity, a $18.5 million or 84.5% decrease in cash and cash equivalents, a $6.2 million or 25.1% decrease in FDIC insured certificates of deposit, a $2.9 million or 2.4% decrease in investment securities held to maturity, and a $320 thousand or 13.6% decrease in accrued interest receivable. The decrease in mortgage-backed securities held to maturity was primarily due to paydowns on the Companys mortgage-backed securities portfolio. During this quarter ended September 30, 2009, overall replacement yields on floating rate MBS were not attractive. As a result, the Company chose to pay down a portion of its short-term borrowings instead of repurchasing floating-rate MBSs. The decrease in FDIC insured certificates of deposit was primarily due to $6.3 million in redemptions of bank certificates of deposit which were partially offset by $100 thousand of purchases of bank certificates of deposit. The decrease in investment securities held to maturity was primarily due to $12.6 million of issuer redemptions prior to maturity (i.e. calls) of fixed-rate U.S. Government agency bonds, $5.7 million of maturities of investment grade corporate bonds and $1.0 million of called tax-free municipal bonds, which were partially offset by purchases of a $9.6 million of fixed-rate investment grade corporate bonds, $3.0 million of U.S. Government agency step-up notes, $954 thousand of floating rate investment grade corporate bonds, $760 thousand of callable fixed rate U.S. Government agency bonds, and $418 thousand of fixed rate investment grade foreign bonds. See Asset and Liability Management.

The Companys total liabilities decreased $49.3 million or 12.7% to $339.0 million as of September 30, 2009 from $388.3 million as of June 30, 2009. The $49.3 million decrease in total liabilities was primarily comprised of a $53.5 million or 49.2% decrease in short-term Federal Reserve Bank borrowings, which was partially offset by a $2.5 million or 1.7% increase in total savings deposits and a $1.7 million or 86.9% increase in other liabilities. The decrease in FRB short-term borrowings was funded primarily by a planned reduction of cash equivalents and investment cash flows received during the quarter. Demand deposits

General. WVS reported net income of $171 thousand or $0.08 diluted earnings per share for the three months ended September 30, 2009. Net income decreased by $586 thousand or 77.4% and diluted earnings per share decreased $0.27 or 77.1% for the three months ended September 30, 2009, when compared to the same period in 2008. The decrease in net income was primarily attributable to a $863 thousand decrease in net interest income and a $14 thousand decrease in non-interest income, which were partially offset by a $237 thousand decrease in income tax expense and a $63 thousand decrease in non-interest expense.

in cash dividends paid on the Companys common stock, which were partially offset by a $2.4 million increase in deposits. The decrease in FRB short-term borrowings reflects lower short-term rates available through the Federal Reserve Bank. The $2.4 million increase in total deposits consisted of a $6.1 million increase in demand deposits, and a $406 thousand increase in passbook accounts, which were partially offset by a $1.7 million decrease in time deposit, a $1.7 million decrease in money market deposits and a $504 thousand decrease in mortgage escrow accounts. The increase in demand deposits is primarily attributable to higher balances held by local tax collectors, while the decrease in time deposits and money market accounts may be attributable to lower market yields on certificates of deposit and money market accounts and increased liquidity preferences by depositors in response to unsettled financial markets. The decreases in escrow accounts were due primarily to the payments of local property taxes by and for customers. Management believes that it currently is maintaining adequate liquidity and continues to match funding sources with lending and investment opportunities.

$862 thousand and one home equity line of credit totaling $300 thousand, which were partially offset by the reclassification of; one multi-family real estate loan totaling $465 thousand and one home equity loan totaling $21 thousand, (both of which paid current in the quarter) to performing, the charge-off of one commercial loan totaling $6 thousand, and paydowns on non-performing loans of $1 thousand.

During the quarter ended September 30, 2009, principal investment purchases were comprised of: fixed-rate investment grade corporate bonds - $9.6 million with a weighted average yield of 3.52%; U.S. Government agency step-up bonds with an initial lock-out periods of 6 months - $3.0 million with a weighted average yield to call of approximately 5.11%; floating-rate investment grade corporate bonds - $954 thousand with a weighted average yield of 2.61%; callable fixed rate U.S. Government agency bonds with initial lock-out periods of 7 8 months - $760 thousand with a weighted average yield to call of 2.90%; fixed rate investment grade foreign bonds - $418 thousand with a weighted average yield of 2.38%; and FDIC insured bank certificates of deposit - $100 thousand with a weighted average yield of 2.45%. Major investment proceeds received during the quarter ended September 30, 2009 were: callable U.S. Government agency bonds - $12.6 million with a weighted average yield of approximately 4.53%; investment grade corporate bonds - $5.3 million with a weighted average yield of approximately 3.71%; tax-free municipal bonds - $1.0 million with a weighted average yield of approximately 6.38%; and investment grade corporate utility first mortgage bonds - $406 thousand with a weighted average yield of approximately 5.84%. The Company also had $6.3 million in FDIC insured bank certificates of deposit redeemed with a weighted average yield of approximately 3.71%.

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