Central Bancorp Inc (CEBK, Financial) filed Quarterly Report for the period ended 2009-12-31.
Central Bancorp Inc has a market cap of $13.58 million; its shares were traded at around $8.28 with and P/S ratio of 0.61. The dividend yield of Central Bancorp Inc stocks is 2.42%. Central Bancorp Inc had an annual average earning growth of 3.1% over the past 10 years.
The allowance for loan losses totaled $2.8 million at December 31, 2009 compared to $3.2 million at March 31, 2009, representing a net decrease of $403 thousand, or 12.6%. This net decrease was primarily due to decreases of $744 thousand related to charge-offs on eleven loans, and increases in the provision of $350 thousand resulting from managements review of the adequacy of the allowance for loan losses. Of the $744 thousand in charge-offs, $213 thousand was related to a mixed-use condominium loan which was written down to fair value less estimated selling costs, $115 thousand was related to the partial charge-off of a hotel loan, $125 thousand resulted from the sale to a third party of residential apartments which secured a commercial real estate loan, $89 thousand resulted from the sale to a third party a residential property which secured a residential real estate loan, $25 thousand resulted from the charge-off of a commercial and industrial loan, and $21 thousand resulted from a residential condominium loan which was written down to fair value less estimated selling costs immediately prior to its transfer to OREO. The remaining $156 thousand of charge-offs related to five impaired residential loans. Based upon managements regular analysis of the adequacy of the allowance for loan losses, management considered the allowance for loan losses to be adequate at both December 31, 2009 and March 31, 2009. See -Provision for Loan Losses.
Cash and cash equivalents totaled $18.5 million at December 31, 2009 compared to $42.4 million at March 31, 2009, representing a decrease of $23.9 million, or 56.5%, related to a $23.9 million decrease in short-term investments. Management utilized excess cash and short-term investments to fund certain maturing high-cost certificates of deposit in an effort to improve the Companys net interest rate spread and net interest margin. Investment securities totaled $47.9 million at December 31, 2009 compared to $45.3 million at March 31, 2009, representing an increase of $2.6 million, or 5.7%. The increase in investment securities is primarily due to the purchase of $11.0 million in mortgage-backed securities during the nine months ended December 31, 2009 and a net increase of $3.8 million in the market value of available for sale securities partially offset by the repayment of $10.4 million in principal on mortgage-backed securities. Stock in the Federal Home Loan Bank of Boston totaled $8.5 million at both December 31, 2009 and March 31, 2009.
Net income available to common shareholders for the quarter ended December 31, 2009 was $213 thousand, or $0.14 per diluted share, as compared to a net income available to common shareholders of $3.9 million or $2.76 per diluted share, for the comparable prior year quarter. The decrease is the net effect of a $462 thousand increase in net interest and dividend income, a $192 thousand increase in noninterest expenses, and a $100 thousand increase in the provision for loan losses, partially offset by a $53 thousand decrease in noninterest income. The tax benefit of $3.4 million recorded during the quarter ended December 31, 2008 was primarily the result of the September 2008 conservatorship of the Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corporation (Freddie Mac) that resulted in a $9.4 million impairment of the value of the Companys investment in the preferred stock of those companies. No tax benefit was recorded during the quarter ended September 2008 in connection with the impairment charge as the losses were initially considered capital losses and there were insufficient capital gains to offset such losses. However, during the subsequent quarter ended December 31, 2008, the Company recognized a tax benefit of approximately $3.5 million on the Fannie Mae and Freddie Mac impairment charges due to the October 3, 2008 enactment of the Emergency Economic Stabilization Act of 2008, which permitted the Company to treat losses incurred on the Fannie Mae and Freddie Mac preferred stock as ordinary losses for federal income tax purposes. Additionally, for the quarters ended December 31, 2009 and 2008, net income was reduced by $153 thousand and $45 thousand, respectively, allocated to preferred shareholders related to the Companys December 2008 sale of $10.0 million of preferred stock and warrant to purchase common stock to the U.S. Treasury Department as a participant in the federal governments TARP Capital Purchase Program.
Interest Expense. Interest expense decreased by $792 thousand, or 22.6%, to $2.7 million for the quarter ended December 31, 2009 as compared to $3.5 million for the same period of 2008 due to decreases in the average rates paid on deposits, FHLB borrowings, and other borrowings. The cost of deposits decreased by 93 basis points from 2.13% at quarter ended December 31, 2008 to 1.20% at December 31, 2009, as some high-cost certificates of deposit were either not renewed or were replaced by lower-costing deposits. The average balance of certificates of deposit totaled $137.2 million for the quarter ended December 31, 2009, compared to $170.3 million for the same period in 2008, a decline of $33.1 million. The average balance of lower-costing non-maturity deposits increased by $21.4 million to $161.5 million for the quarter ended December 31, 2009, as compared to an average balance of $140.1 million during the same period of 2008. The average balance of FHLB of Boston borrowings increased by $4.7 million, from $144.6 million at December 31, 2008 to $149.3 million at December 31, 2009. The decrease in the average cost of these funds was the result of a relatively high coupon rate advance which matured and were replaced by lower advances during the quarter ended December 31, 2009. The average cost of other borrowings decreased as a portion of these borrowings are adjustable and the average rate paid for the quarter ended December 31, 2009 was 4.93%, compared to an average rate of 5.74% for the quarter ended December 31, 2008.
Noninterest Income. Noninterest income decreased by $53 thousand from $432 thousand during the quarter ended December 31, 2008 to $379 thousand during the quarter ended December 31, 2009. There were no gains or losses on sales or write-downs of securities during the quarter ended December 31, 2008 compared to a net loss of $81 thousand during the quarter ended December 31, 2009. Gains on the sale of loans increased from $30 thousand during the quarter ended December 31, 2008 to $63 thousand during the quarter ended December 31, 2009 due to increased loan origination and sale activity during the 2009 period. Other noninterest income decreased by $5 thousand during the 2009 period primarily due to a $28 thousand decrease in third party brokerage income.
Read the The complete Report
Central Bancorp Inc has a market cap of $13.58 million; its shares were traded at around $8.28 with and P/S ratio of 0.61. The dividend yield of Central Bancorp Inc stocks is 2.42%. Central Bancorp Inc had an annual average earning growth of 3.1% over the past 10 years.
Highlight of Business Operations:
Total assets were $558.4 million at December 31, 2009 compared to $575.8 million at March 31, 2009, representing a decrease of $17.4 million, or 3.0%. Total loans (excluding loans held for sale) were $467.6 million at December 31, 2009, compared to $460.7 million at March 31, 2009, representing an increase of $6.9 million, or 1.5%. This increase was primarily due to increases in residential and home equity loans of $37.4 million and $1.2 million, respectively, substantially offset by decreases in construction and commercial real estate of $30.4 million. Construction and commercial real estate loans declined as management de-emphasized these types of lending in the current economic environment. Residential and home equity loans increased from $190.7 million at March 31, 2009 to $229.3 million at December 31, 2009 due to managements increased emphasis on these types of lending. Commercial and industrial loans decreased from $4.8 million at March 31, 2009 to $3.8 million at December 31, 2009.The allowance for loan losses totaled $2.8 million at December 31, 2009 compared to $3.2 million at March 31, 2009, representing a net decrease of $403 thousand, or 12.6%. This net decrease was primarily due to decreases of $744 thousand related to charge-offs on eleven loans, and increases in the provision of $350 thousand resulting from managements review of the adequacy of the allowance for loan losses. Of the $744 thousand in charge-offs, $213 thousand was related to a mixed-use condominium loan which was written down to fair value less estimated selling costs, $115 thousand was related to the partial charge-off of a hotel loan, $125 thousand resulted from the sale to a third party of residential apartments which secured a commercial real estate loan, $89 thousand resulted from the sale to a third party a residential property which secured a residential real estate loan, $25 thousand resulted from the charge-off of a commercial and industrial loan, and $21 thousand resulted from a residential condominium loan which was written down to fair value less estimated selling costs immediately prior to its transfer to OREO. The remaining $156 thousand of charge-offs related to five impaired residential loans. Based upon managements regular analysis of the adequacy of the allowance for loan losses, management considered the allowance for loan losses to be adequate at both December 31, 2009 and March 31, 2009. See -Provision for Loan Losses.
Cash and cash equivalents totaled $18.5 million at December 31, 2009 compared to $42.4 million at March 31, 2009, representing a decrease of $23.9 million, or 56.5%, related to a $23.9 million decrease in short-term investments. Management utilized excess cash and short-term investments to fund certain maturing high-cost certificates of deposit in an effort to improve the Companys net interest rate spread and net interest margin. Investment securities totaled $47.9 million at December 31, 2009 compared to $45.3 million at March 31, 2009, representing an increase of $2.6 million, or 5.7%. The increase in investment securities is primarily due to the purchase of $11.0 million in mortgage-backed securities during the nine months ended December 31, 2009 and a net increase of $3.8 million in the market value of available for sale securities partially offset by the repayment of $10.4 million in principal on mortgage-backed securities. Stock in the Federal Home Loan Bank of Boston totaled $8.5 million at both December 31, 2009 and March 31, 2009.
Net income available to common shareholders for the quarter ended December 31, 2009 was $213 thousand, or $0.14 per diluted share, as compared to a net income available to common shareholders of $3.9 million or $2.76 per diluted share, for the comparable prior year quarter. The decrease is the net effect of a $462 thousand increase in net interest and dividend income, a $192 thousand increase in noninterest expenses, and a $100 thousand increase in the provision for loan losses, partially offset by a $53 thousand decrease in noninterest income. The tax benefit of $3.4 million recorded during the quarter ended December 31, 2008 was primarily the result of the September 2008 conservatorship of the Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corporation (Freddie Mac) that resulted in a $9.4 million impairment of the value of the Companys investment in the preferred stock of those companies. No tax benefit was recorded during the quarter ended September 2008 in connection with the impairment charge as the losses were initially considered capital losses and there were insufficient capital gains to offset such losses. However, during the subsequent quarter ended December 31, 2008, the Company recognized a tax benefit of approximately $3.5 million on the Fannie Mae and Freddie Mac impairment charges due to the October 3, 2008 enactment of the Emergency Economic Stabilization Act of 2008, which permitted the Company to treat losses incurred on the Fannie Mae and Freddie Mac preferred stock as ordinary losses for federal income tax purposes. Additionally, for the quarters ended December 31, 2009 and 2008, net income was reduced by $153 thousand and $45 thousand, respectively, allocated to preferred shareholders related to the Companys December 2008 sale of $10.0 million of preferred stock and warrant to purchase common stock to the U.S. Treasury Department as a participant in the federal governments TARP Capital Purchase Program.
Interest Expense. Interest expense decreased by $792 thousand, or 22.6%, to $2.7 million for the quarter ended December 31, 2009 as compared to $3.5 million for the same period of 2008 due to decreases in the average rates paid on deposits, FHLB borrowings, and other borrowings. The cost of deposits decreased by 93 basis points from 2.13% at quarter ended December 31, 2008 to 1.20% at December 31, 2009, as some high-cost certificates of deposit were either not renewed or were replaced by lower-costing deposits. The average balance of certificates of deposit totaled $137.2 million for the quarter ended December 31, 2009, compared to $170.3 million for the same period in 2008, a decline of $33.1 million. The average balance of lower-costing non-maturity deposits increased by $21.4 million to $161.5 million for the quarter ended December 31, 2009, as compared to an average balance of $140.1 million during the same period of 2008. The average balance of FHLB of Boston borrowings increased by $4.7 million, from $144.6 million at December 31, 2008 to $149.3 million at December 31, 2009. The decrease in the average cost of these funds was the result of a relatively high coupon rate advance which matured and were replaced by lower advances during the quarter ended December 31, 2009. The average cost of other borrowings decreased as a portion of these borrowings are adjustable and the average rate paid for the quarter ended December 31, 2009 was 4.93%, compared to an average rate of 5.74% for the quarter ended December 31, 2008.
Noninterest Income. Noninterest income decreased by $53 thousand from $432 thousand during the quarter ended December 31, 2008 to $379 thousand during the quarter ended December 31, 2009. There were no gains or losses on sales or write-downs of securities during the quarter ended December 31, 2008 compared to a net loss of $81 thousand during the quarter ended December 31, 2009. Gains on the sale of loans increased from $30 thousand during the quarter ended December 31, 2008 to $63 thousand during the quarter ended December 31, 2009 due to increased loan origination and sale activity during the 2009 period. Other noninterest income decreased by $5 thousand during the 2009 period primarily due to a $28 thousand decrease in third party brokerage income.
Read the The complete Report
