UNITED
STATES
|
||||||||||
SECURITIES
AND EXCHANGE COMMISSION
|
||||||||||
Washington,
D.C. 20429
|
FORM
10-Q
|
(Mark
One)
|
x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
For
the quarterly period ended
|
December 31, 2005
|
o
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
|
For
the transition period from
|
to
|
Commission
file number 0-29709
|
HARLEYSVILLE
SAVINGS FINANCIAL CORPORATION
|
(Exact
name of registrant as specified in its
charter)
|
Pennsylvania
|
23-3028464
|
|||
(State
or other jurisdiction of
|
(I.R.S.
Employer
|
|||
incorporation
or organization)
|
Identification
No.)
|
271
Main Street, Harleysville, Pennsylvania 19438
|
(Address
of principal executive offices)
|
(Zip
Code)
|
(215)
256-8828
|
(Registrant's
telephone number, including area code)
|
(Former
name, former address and former fiscal year, if changed since last
report)
|
Large accelerated filer o | Accelerated filer o | Non-accelerated filer x |
HARLEYSVILLE
SAVINGS FINANCIAL CORPORATION
AND
SUBSIDIARY
|
Index
PAGE(S)
|
|||
Part
I
FINANCIAL INFORMATION
|
|||
Item
1.
|
Financial
Statements
|
||
Unaudited
Condensed Consolidated Statements of Financial Condition as
of
|
|||
December
31, 2005 and September 30, 2005
|
|||
Unaudited
Condensed Consolidated Statements of Income for the Three
|
|||
Months
Ended December 31, 2005 and 2004
|
|||
Unaudited
Condensed Consolidated Statement of Comprehensive Income
|
|||
for
the Three Months Ended December 31, 2005 and 2004
|
|||
Unaudited
Condensed Consolidated Statement of Stockholders' Equity
|
|||
for
the Three Months Ended December 31, 2005
|
|||
Unaudited
Condensed Consolidated Statements of Cash Flows for the Three
Months
|
|||
Ended
December 31, 2005 and 2004
|
|||
Notes
to Unaudited Condensed Consolidated Financial Statements
|
|||
Item
2.
|
Management's
Discussion and Analysis of Financial
|
||
Condition
and Results of Operations
|
|||
Item
3.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
||
Item
4.
|
Control
and Procedures
|
||
Part
II OTHER
INFORMATION
|
|||
Item 1 | Legal Proceedings | ||
Item 1A. | Risk Factors | ||
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | ||
Item 3. | Defaults upon Senior Securities | ||
Item 4. | Submission of Matters to a Vote of Security Holders | ||
Item 5. | Other information | ||
Item 6. | Exhibits | ||
Signatures
|
Condensed
Consolidated Statements of Financial Condition
|
|||||||
December
31,
|
September
30,
|
||||||
2005
|
2005
|
||||||
(Unaudited)
|
|||||||
Assets
|
|||||||
Cash
and amounts due from depository institutions
|
$
|
1,175,728
|
$
|
1,193,285
|
|||
Interest
bearing deposits in other banks
|
6,300,408
|
6,741,695
|
|||||
Total
cash and cash equivalents
|
7,476,136
|
7,934,980
|
|||||
Investment
securities held to maturity (fair value -
|
|||||||
December
31,
$101,186,000; September 30, $88,404,000)
|
101,062,105
|
87,364,445
|
|||||
Investment
securities available-for-sale at fair value
|
2,568,681
|
2,835,244
|
|||||
Mortgage-backed
securities held to maturity (fair value -
|
|||||||
December
31,
$246,349,000; September 30, $259,994,000)
|
251,735,833
|
263,963,765
|
|||||
Mortgage-backed
securities available-for-sale at fair value
|
809,617
|
1,045,087
|
|||||
Loans
receivable (net of allowance for loan losses -
|
|||||||
December
31,
$1,967,000; September 30, $1,968,000)
|
365,811,146
|
366,006,917
|
|||||
Accrued
interest receivable
|
3,596,010
|
3,432,054
|
|||||
Federal
Home Loan Bank stock - at cost
|
14,672,900
|
16,035,900
|
|||||
Office
properties and equipment, net
|
6,363,615
|
5,829,694
|
|||||
Deferred
income taxes
|
395,884
|
339,587
|
|||||
Prepaid
expenses and other assets
|
12,152,051
|
12,202,792
|
|||||
TOTAL
ASSETS
|
$
|
766,643,978
|
$
|
766,990,465
|
|||
Liabilities
and Stockholders' Equity
|
|||||||
Liabilities:
|
|||||||
Deposits
|
$
|
429,513,266
|
$
|
418,979,655
|
|||
Advances
from
Federal Home Loan Bank
|
283,790,774
|
297,268,488
|
|||||
Accrued
interest payable
|
1,315,977
|
1,358,953
|
|||||
Advances
from
borrowers for taxes and insurance
|
2,922,370
|
1,135,429
|
|||||
Accounts
payable and accrued expenses
|
916,325
|
672,124
|
|||||
Total
liabilities
|
718,458,712
|
719,414,649
|
|||||
Commitments
(Note 9)
|
|||||||
Stockholders'
equity:
|
|||||||
Preferred
Stock: $.01 par value;
|
|||||||
12,500,000 shares authorized; none issued
|
|||||||
Common
stock: $.01 par value; 15,000,000
|
|||||||
shares authorized; issued and outstanding
|
|||||||
Dec. 2005, 3,912,794; Sept. 2005, 3,904,136
|
39,128
|
39,041
|
|||||
Additional
Paid-in capital
|
7,840,791
|
7,610,511
|
|||||
Treasury
stock,
at cost (Dec. 2005, 6,255 shares; Sept. 2005, 3,255)
|
(112,307
|
)
|
(60,107
|
)
|
|||
Retained
earnings - partially restricted
|
40,452,635
|
39,995,584
|
|||||
Accumulated
other comprehensive loss
|
(34,981
|
)
|
(9,213
|
)
|
|||
Total
stockholders' equity
|
48,185,266
|
47,575,816
|
|||||
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY
|
$
|
766,643,978
|
$
|
766,990,465
|
|||
See
notes to unaudited condensed consolidated financial
statements.
|
Unaudited
Condensed Consolidated Statements of Income
|
|||||||
For
the Three Months Ended
|
|||||||
December
31,
|
|||||||
2005
|
2004
|
||||||
INTEREST
INCOME:
|
|||||||
Interest
on
mortgage loans
|
$
|
3,933,960
|
$
|
3,807,587
|
|||
Interest
on
mortgage-backed securities
|
2,848,259
|
2,846,287
|
|||||
Interest
on
consumer and other loans
|
1,344,005
|
1,055,729
|
|||||
Interest
and
dividends on tax-exempt investments
|
346,373
|
336,580
|
|||||
Interest
and
dividends on taxable investments
|
990,801
|
539,820
|
|||||
Total
interest income
|
9,463,398
|
8,586,003
|
|||||
Interest
Expense:
|
|||||||
Interest
on
deposits
|
3,113,376
|
2,395,751
|
|||||
Interest
on
borrowings
|
3,308,655
|
2,954,901
|
|||||
Total
interest expense
|
6,422,031
|
5,350,652
|
|||||
Net
Interest Income
|
3,041,367
|
3,235,351
|
|||||
Provision
for loan losses
|
-
|
-
|
|||||
Net
Interest Income after Provision
|
|||||||
for Loan Losses
|
3,041,367
|
3,235,351
|
|||||
Non
interest Income:
|
|||||||
Gain
on
sales of securities
|
-
|
63,743
|
|||||
Other
income
|
329,144
|
342,744
|
|||||
Total
non interest income
|
329,144
|
406,487
|
|||||
Non
interest Expenses:
|
|||||||
Salaries
and
employee benefits
|
1,038,230
|
1,016,619
|
|||||
Occupancy
and
equipment
|
367,973
|
369,511
|
|||||
Deposit
insurance premiums
|
13,797
|
14,670
|
|||||
Other
|
553,319
|
558,143
|
|||||
Total
non interest expenses
|
1,973,319
|
1,958,943
|
|||||
Income
before Income Taxes
|
1,397,192
|
1,682,895
|
|||||
Income
tax expense
|
316,000
|
427,400
|
|||||
Net
Income
|
$
|
1,081,192
|
$
|
1,255,495
|
|||
Basic
Earnings Per Share
|
$
|
0.28
|
$
|
0.33
|
|||
Diluted
Earnings Per Share
|
$
|
0.27
|
$
|
0.32
|
|||
Dividends
Per Share
|
$
|
0.15
|
$
|
0.13
|
|||
See
notes to unaudited condensed consolidated financial
statements.
|
Unaudited
Condensed Consolidated Statement of Comprehensive
Income
|
|||||||
Three
Months Ended
|
|||||||
December
31,
|
|||||||
2005
|
2004
|
||||||
Net
Income
|
$
|
1,081,192
|
$
|
1,255,495
|
|||
Other
Comprehensive Income
|
|||||||
Unrealized
(loss) gain on securities net of tax
|
|||||||
2005,
$9,378; 2004, ($3,653)
|
(25,768
|
)(1)
|
10,037
|
(1) | |||
Total
Comprehensive Income
|
$
|
1,055,424
|
$
|
1,265,532
|
|||
(1)
Disclosure of reclassification amount, net of tax for the years
ended:
|
2005
|
2004
|
|||||
Net
unrealized (loss) gain arising during the year
|
$
|
(25,768
|
)
|
$
|
52,107
|
||
Less:
Reclassification adjustment for net gains included in net
income
|
|||||||
Net
of
tax expense -2005, $0; 2004, $21,673
|
-
|
42,070
|
|||||
Net
unrealized gain on securities
|
$
|
(25,768
|
)
|
$
|
10,037
|
||
See
notes to unaudited condensed consolidated financial
statements.
|
Unaudited
Condensed Consolidated Statement of Stockholders'
Equity
|
||||||||||||||||||||||
Retained
|
Accumulated
|
|||||||||||||||||||||
Common
|
Additional
|
Earnings-
|
Other
|
Total
|
||||||||||||||||||
Stock
|
Common
|
Paid-in
|
Treasury
|
Partially
|
Comprehensive
|
Stockholders'
|
||||||||||||||||
Shares
|
Stock
|
Capital
|
Stock
|
Restricted
|
Loss
|
Equity
|
||||||||||||||||
Balance
at October 1, 2005
|
3,904,136
|
$
|
39,041
|
$
|
7,610,511
|
$
|
(60,107
|
)
|
$
|
39,995,584
|
$
|
(9,213
|
)
|
$
|
47,575,816
|
|||||||
Net
Income
|
1,081,192
|
1,081,192
|
||||||||||||||||||||
Issuance
of Common Stock
|
87
|
152,641
|
152,728
|
|||||||||||||||||||
Dividends
- $.15 per share
|
(624,141
|
)
|
(624,141
|
)
|
||||||||||||||||||
Option
Compensation
|
12,000
|
12,000
|
||||||||||||||||||||
Treasury
stock purchased
|
(52,200
|
)
|
(52,200
|
)
|
||||||||||||||||||
Stock delivered under
|
||||||||||||||||||||||
Dividend Reinvestment Plan
|
65,639
|
65,639
|
||||||||||||||||||||
Unrealized
holding loss on available - for- sale securities, net of tax
|
(25,768
|
)
|
(25,768
|
)
|
||||||||||||||||||
Balance
at December 31, 2005
|
3,912,794
|
$
|
39,128
|
$
|
7,840,791
|
$
|
(112,307
|
)
|
$
|
40,452,635
|
$
|
(34,981
|
)
|
$
|
48,185,266
|
|||||||
See
notes to unaudited condensed consolidated financial
statements.
|
Unaudited
Condensed Consolidated Statements of Cash
Flows
|
|||||||
Three
Months Ended December 31,
|
|||||||
|
2005
|
2004
|
|||||
Operating
Activities:
|
|||||||
Net
Income
|
$
|
1,081,192
|
$
|
1,255,495
|
|||
Adjustments
to reconcile net income to net cash (used in) provided by
|
|||||||
operating
activities:
|
|||||||
Depreciation
|
108,228
|
64,224
|
|||||
Deferred
income
taxes
|
(9,213
|
)
|
|||||
Compensation
charge on stock options
|
12,000
|
||||||
Amortization
of
deferred loan fees
|
(9,546
|
)
|
(54,480
|
)
|
|||
Gain
on
sale of securities
|
(63,743
|
)
|
|||||
Increase
in
cash surrender value
|
(107,999
|
)
|
(112,000
|
)
|
|||
Net
amortization of premiums and discounts
|
135,604
|
180,548
|
|||||
Changes
in assets and liabilities which provided (used) cash:
|
|||||||
Increase in accounts payable and accrued
|
|||||||
expenses
|
244,201
|
232,664
|
|||||
Increase in prepaid expenses and other assets
|
158,740
|
(2,837,755
|
)
|
||||
(Increase) decrease in accrued interest receivable
|
(163,956
|
)
|
74,105
|
||||
(Decrease) increase in accrued interest payable
|
(42,976
|
)
|
56,980
|
||||
Net cash provided by (used in) operating activities
|
1,406,275
|
(1,203,962
|
)
|
||||
Investing
Activities:
|
|||||||
Purchase
of investment securities held to maturity
|
(13,796,875
|
)
|
(11,000,000
|
)
|
|||
Purchase
of investment securities available for sale
|
(201,792
|
)
|
(575,249
|
)
|
|||
Purchase
of mortgage-backed securities held to maturity
|
(2,011,250
|
)
|
(20,131,609
|
)
|
|||
Proceeds
from maturities of investment securities held to maturity
|
99,215
|
8,152,467
|
|||||
Proceeds
from sale of investment securities available for sale
|
468,355
|
4,613,148
|
|||||
Principal
collected on long-term loans & mortgage-backed
securities
|
40,550,809
|
41,135,550
|
|||||
Proceeds
(purchase) of FHLB stock
|
1,363,000
|
(155,600
|
)
|
||||
Long-term
loans originated or acquired
|
(26,076,172
|
)
|
(27,479,179
|
)
|
|||
Purchases
of premises and equipment
|
(645,273
|
)
|
(249,616
|
)
|
|||
Net
cash used in investing activities
|
(249,983
|
)
|
(5,690,088
|
)
|
|||
Financing
Activities:
|
|||||||
Net
(decrease) increase in demand deposits, NOW accounts
|
|||||||
and
savings accounts
|
(2,090,736
|
)
|
1,262,241
|
||||
Net
increase in certificates of deposit
|
12,624,347
|
2,273,518
|
|||||
Cash
dividends
|
(624,141
|
)
|
(505,875
|
)
|
|||
Net
(decrease) increase in FHLB advances
|
(13,477,714
|
)
|
2,269,380
|
||||
Stock
delivered under Dividend Reinvestment Plan
|
65,639
|
129,946
|
|||||
Purchase
of treasury stock
|
(52,200
|
)
|
|||||
Net
proceeds from issuance of stock
|
152,728
|
||||||
Net
increase in advances from borrowers for taxes &
insurance
|
1,786,941
|
1,740,914
|
|||||
Net
cash (used in ) provided by financing activities
|
(1,615,136
|
)
|
7,170,124
|
||||
(DECREASE)
INCREASE IN CASH AND CASH EQUIVALENTS
|
(458,844
|
)
|
276,074
|
||||
CASH
AND CASH EQUIVALENTS AT BEGINNING OF YEAR
|
7,934,980
|
4,718,784
|
|||||
CASH
AND CASH EQUIVALENTS AT END OF PERIOD
|
$
|
7,476,136
|
$
|
4,994,858
|
|||
SUPPLEMENTAL
DISCLOSURES OF CASH FLOW INFORMATION:
|
|||||||
Cash
paid during the period for:
|
|||||||
Income taxes
|
$
|
31,000
|
|||||
Interest expense
|
$
|
6,465,007
|
5,293,672
|
||||
See
notes to unaudited condensed consolidated financial
statements.
|
|||||||
December
31, 2005
|
|||||||||||||
Gross
|
Gross
|
||||||||||||
Amortized
|
Unrealized
|
Unrealized
|
Approximate
|
||||||||||
Cost
|
Gains
|
Losses
|
Fair
Value
|
||||||||||
U.S.
Government Agencies
|
|||||||||||||
Due
after 1 years through 5 years
|
$
|
12,000,000
|
$
|
(246,000
|
)
|
$
|
11,754,000
|
||||||
Due
after 5 years through 10 years
|
26,576,030
|
$
|
41,564
|
(421,594
|
)
|
26,196,000
|
|||||||
Due
after 10 years through 15 years
|
37,664,789
|
(898,789
|
)
|
36,766,000
|
|||||||||
Tax-Exempt
Obligations
|
|||||||||||||
Due
after 10 years through 15 years
|
13,059,876
|
838,124
|
13,898,000
|
||||||||||
Due
after 15 years
|
11,761,410
|
810,590
|
12,572,000
|
||||||||||
Total
Investment Securities
|
$
|
101,062,105
|
$
|
1,690,278
|
$
|
(1,566,383
|
)
|
$
|
101,186,000
|
||||
A
summary of investment with unrealized losses, aggregated by category,
at
December 31, 2005 is as
follows:
|
Less
than 12 Months
|
12
Months or Longer
|
Total
|
Total
|
||||||||||||||||
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
||||||||||||||
US
Government agencies
|
$
|
43,972,738
|
$
|
(677,624
|
)
|
$
|
26,075,210
|
$
|
(888,759
|
)
|
$
|
70,047,948
|
$
|
(1,566,383
|
)
|
||||
Total
|
$
|
43,972,738
|
$
|
(677,624
|
)
|
$
|
26,075,210
|
$
|
(888,759
|
)
|
$
|
70,047,948
|
$
|
(1,566,383
|
)
|
||||
September
30, 2005
|
|||||||||||||
Gross
|
Gross
|
||||||||||||
Unrealized
|
Unrealized
|
Approximate
|
|||||||||||
Cost
|
Gains
|
Losses
|
Fair
Value
|
||||||||||
U.S.
Government Agencies
|
|||||||||||||
Due
after 1 years through 5 years
|
$
|
12,000,000
|
$
|
(197,000
|
)
|
$
|
11,803,000
|
||||||
Due
after 5 years through 10 years
|
25,703,340
|
$
|
77,445
|
(207,785
|
)
|
25,573,000
|
|||||||
Due
after 10 years through 15 years
|
24,862,533
|
5,200
|
(497,733
|
)
|
24,370,000
|
||||||||
Tax-Exempt
Obligations
|
|||||||||||||
Due
after 10 years through 15 years
|
13,050,956
|
949,044
|
14,000,000
|
||||||||||
Due
after 15 years
|
11,747,616
|
910,384
|
12,658,000
|
||||||||||
Total
Investment Securities
|
$
|
87,364,445
|
$
|
1,942,073
|
$
|
(902,518
|
)
|
$
|
88,404,000
|
Less
than 12 Months
|
12
Months or Longer
|
Total
|
Total
|
||||||||||||||||
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
||||||||||||||
Equities
|
$
|
31,567,124
|
$
|
(284,269
|
)
|
$
|
21,339,331
|
$
|
(618,249
|
)
|
$
|
52,906,455
|
$
|
(902,518
|
)
|
||||
Total
|
$
|
31,567,124
|
$
|
(284,269
|
)
|
$
|
21,339,331
|
$
|
(618,249
|
)
|
$
|
52,906,455
|
$
|
(902,518
|
)
|
3.
INVESTMENT SECURITIES AVAILABLE-FOR-SALE
|
||||||||||
A
comparison of amortized cost and approximate fair value of
investment
securities with gross unrealized gains and losses, by
maturities, is as follows:
|
December
31, 2005
|
|||||||||||||
Gross
|
Gross
|
||||||||||||
Amortized
|
Unrealized
|
Unrealized
|
|||||||||||
Cost
|
Gains
|
Losses
|
Fair
Value
|
||||||||||
Equities
|
$
|
1,107,905
|
$
|
12,390
|
$
|
(89,819
|
)
|
$
|
1,030,476
|
||||
Mutual
Funds
|
1,538,205
|
1,538,205
|
|||||||||||
Total
Investment Securities
|
$
|
2,646,110
|
$
|
12,390
|
$
|
(89,819
|
)
|
$
|
2,568,681
|
A
summary of investment with unrealized losses, aggregated by category,
at
December 31, 2005 is as follows:
|
Less
than 12 Months
|
12
Months or Longer
|
Total
|
Total
|
||||||||||||||||
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
||||||||||||||
Equities
|
$
|
919,916
|
$
|
(677,624
|
)
|
$
|
-
|
$
|
-
|
$
|
919,916
|
$
|
(89,819
|
)
|
|||||
Total
|
$
|
919,916
|
$
|
(677,624
|
)
|
$
|
-
|
$
|
-
|
$
|
919,916
|
$
|
(89,819
|
)
|
September
30, 2005
|
|||||||||||||
Gross
|
Gross
|
||||||||||||
Amortized
|
Unrealized
|
Unrealized
|
|||||||||||
Cost
|
Gains
|
Losses
|
Fair
Value
|
||||||||||
Equity
Securities
|
$
|
906,113
|
$
|
9,830
|
$
|
(56,723
|
)
|
$
|
859,220
|
||||
Money
Market Mutual Funds
|
1,976,024
|
1,976,024
|
|||||||||||
Total
Investment Securities
|
$
|
2,882,137
|
$
|
9,830
|
$
|
(56,723
|
)
|
$
|
2,835,244
|
4.
MORTGAGE-BACKED SECURITIES HELD TO MATURITY
|
||||||
A
comparison of amortized cost and approximate fair value of mortgage-backed
securities with gross unrealized gains and losses, by
maturities, is as
follows:
|
December
31,2005
|
|||||||||||||
Gross
|
Gross
|
||||||||||||
Amortized
|
Unrealized
|
Unrealized
|
Approximate
|
||||||||||
Cost
|
Gains
|
Losses
|
Fair
Value
|
||||||||||
Collateralized
mortgage obligations
|
$
|
16,459,880
|
$
|
53,853
|
$
|
(343,733
|
)
|
$
|
16,170,000
|
||||
FHLMC
pass-through certificates
|
112,843,023
|
98,383
|
(2,657,406
|
)
|
110,284,000
|
||||||||
FNMA
pass-through certificates
|
116,510,710
|
133,873
|
(2,885,583
|
)
|
113,759,000
|
||||||||
GNMA
pass-through certificates
|
5,922,220
|
213,780
|
6,136,000
|
||||||||||
Total
Mortgage-Backed Securities
|
$
|
251,735,833
|
$
|
499,889
|
$
|
(5,886,722
|
)
|
$
|
246,349,000
|
||||
A
summary of investment with unrealized losses, aggregated by category,
at
December 31, 2005 is as
follows:
|
Less
than 12 Months
|
12
Months or Longer
|
Total
|
Total
|
||||||||||||||||
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
||||||||||||||
Mortgage-backed
securities held to
maturity
|
$
|
138,826,451
|
$
|
(2,845,173
|
)
|
$
|
90,376,874
|
$
|
(3,041,549
|
)
|
$
|
229,203,325
|
$
|
(5,886,722
|
)
|
||||
Total
|
$
|
138,826,451
|
$
|
(2,845,173
|
)
|
$
|
90,376,874
|
$
|
(3,041,549
|
)
|
$
|
229,203,325
|
$
|
(5,886,722
|
)
|
September
30,2005
|
|||||||||||||
Gross
|
Gross
|
||||||||||||
Amortized
|
Unrealized
|
Unrealized
|
Approximate
|
||||||||||
Cost
|
Gains
|
Losses
|
Fair
Value
|
||||||||||
Collateralized
mortgage obligations
|
$
|
17,089,874
|
$
|
36,738
|
$
|
(278,612
|
)
|
$
|
16,848,000
|
||||
FHLMC
pass-through certificates
|
118,663,486
|
128,502
|
(2,047,988
|
)
|
116,744,000
|
||||||||
FNMA
pass-through certificates
|
121,596,729
|
161,648
|
(2,216,377
|
)
|
119,542,000
|
||||||||
GNMA
pass-through certificates
|
6,613,676
|
246,324
|
6,860,000
|
||||||||||
Total
Mortgage-Backed Securities
|
$
|
263,963,765
|
$
|
573,212
|
$
|
(4,542,977
|
)
|
$
|
259,994,000
|
||||
A
summary of investment with unrealized losses, aggregated by category,
at
September 30, 2005 is as
follows:
|
Less
than 12 Months
|
12
Months or Longer
|
Total
|
Total
|
||||||||||||||||
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
||||||||||||||
Mortgage-backed
securities held to
maturity
|
$
|
178,406,095
|
$
|
(2,751,178
|
)
|
$
|
58,493,074
|
$
|
(1,791,799
|
)
|
$
|
236,899,169
|
$
|
(4,542,977
|
)
|
||||
Total
|
$
|
178,406,095
|
$
|
(2,751,178
|
)
|
$
|
58,493,074
|
$
|
(1,791,799
|
)
|
$
|
236,899,169
|
$
|
(4,542,977
|
)
|
5.
MORTGAGE-BACKED SECURITIES AVAILABLE-FOR-SALE
|
||||||||
A
comparison of amortized cost and approximate fair value of mortgage-backed
securities with gross unrealized gains and losses, by
maturities, is as
follows:
|
December
31,2005
|
|||||||||||||
Gross
|
Gross
|
||||||||||||
Amortized
|
Unrealized
|
Unrealized
|
|||||||||||
Cost
|
Gains
|
Losses
|
Fair
Value
|
||||||||||
FNMA
pass-through certificates
|
$
|
785,187
|
$
|
24,430
|
$
|
-
|
$
|
809,617
|
|||||
Total
Mortgage-Backed Securities
|
$
|
785,187
|
$
|
24,430
|
$
|
-
|
$
|
809,617
|
|||||
September
30,2005
|
|||||||||||||
Gross
|
Gross
|
||||||||||||
Amortized
|
Unrealized
|
Unrealized
|
|||||||||||
Cost
|
Gains
|
Losses
|
Fair
Value
|
||||||||||
FNMA
pass-through certificates
|
$
|
1,012,154
|
$
|
32,933
|
$
|
-
|
$
|
1,045,087
|
|||||
Total
Mortgage-Backed Securities
|
$
|
1,012,154
|
$
|
32,933
|
$
|
-
|
$
|
1,045,087
|
6.
LOANS RECEIVABLE
|
Loans
receivable consist of the
following:
|
December
31, 2005
|
September
30, 2005
|
||||||
Residential
Mortgages
|
$
|
270,653,571
|
$
|
270,940,562
|
|||
Commercial
Mortgages
|
1,980,821
|
2,003,219
|
|||||
Construction
|
7,977,400
|
7,639,300
|
|||||
Savings
Account
|
915,700
|
921,400
|
|||||
Home
Equity
|
61,576,068
|
59,724,004
|
|||||
Automobile
and other
|
773,752
|
771,538
|
|||||
Line
of Credit
|
29,854,501
|
31,579,680
|
|||||
Total
|
373,731,813
|
373,579,703
|
|||||
Undisbursed
portion of loans in process
|
(5,316,280
|
)
|
(4,933,753
|
)
|
|||
Deferred
loan
fees
|
(637,433
|
)
|
(671,426
|
)
|
|||
Allowance
for
loan losses
|
(1,966,954
|
)
|
(1,967,607
|
)
|
|||
Loans
receivable - net
|
$
|
365,811,146
|
$
|
366,006,917
|
The
total amount of loans being serviced for the benefit of others
was
approximately $4.5 million and $4.7 million at
December 31, 2005 and September 30, 2005,
respectively.
|
||||||
The
following schedule summarizes the changes in the allowance for
loan
losses:
|
Three
Months Ended
|
Year
Ended
|
||||||
December
31, 2005
|
September
30, 2005
|
||||||
Balance,
beginning of period
|
$
|
1,967,607
|
$
|
1,976,849
|
|||
Amounts
charged-off
|
(2,158
|
)
|
(92,949
|
)
|
|||
Loan
recoveries
|
1,505
|
83,707
|
|||||
Balance,
end of period
|
$
|
1,966,954
|
$
|
1,967,607
|
7.
OFFICE PROPERTIES AND EQUIPMENT
|
||||
Office
properties and equipment are summarized by major classification
as
follows:
|
December
31, 2005
|
September
30, 2005
|
||||||
Land
|
$
|
184,788
|
$
|
184,788
|
|||
Buildings
|
6,921,976
|
6,383,356
|
|||||
Furniture,
fixtures and equipment
|
3,368,302
|
3,433,247
|
|||||
Automobiles
|
24,896
|
24,896
|
|||||
Total
|
10,499,962
|
10,026,287
|
|||||
Less
accumulated depreciation
|
(4,136,347
|
)
|
(4,196,593
|
)
|
|||
Net
|
$
|
6,363,615
|
$
|
5,829,694
|
8.
DEPOSITS
|
|||||||
Deposits
are summarized as follows:
|
|||||||
December
31, 2005
|
September
30, 2005
|
||||||
Non-interest
bearing checking
|
$
|
9,650,733
|
$
|
9,618,764
|
|||
NOW
accounts
|
17,910,730
|
18,282,489
|
|||||
Checking
accounts
|
14,107,699
|
9,102,649
|
|||||
Money
Market Demand accounts
|
70,172,423
|
76,581,019
|
|||||
Passbook
and Club accounts
|
3,459,199
|
3,806,599
|
|||||
Certificate
accounts
|
314,212,482
|
301,588,135
|
|||||
Total
deposits
|
$
|
429,513,266
|
$
|
418,979,655
|
The
aggregate amount of certificate accounts in denominations of more
than
$100,000 at December 31, 2005 and September 30, 2005 amounted
to approximately $42.5 million and $39.7 million, respectively.
Amounts in
excess of $100,000 may not be federally
insured.
|
9.
COMMITMENTS
|
||||
At
December 31, 2005, the following commitments were
outstanding:
|
||||
Origination
of mortgage loans
|
$
|
6,056,142
|
||
Unused
line of credit loans
|
40,349,972
|
|||
Loans
in process
|
5,316,280
|
|||
Total
|
$
|
51,722,394
|
10.
DIVIDEND
|
|||||||
On
January 25, 2006, the Company's Board of Directors declared a cash
dividend of $.16 per share payable on February 22, 2006 to
the stockholders' of record at the close of business on February
8, 2006.
The number of shares and per share information for
all periods presented has been restated to reflect the five for
three
stock split as of February 24, 2005.
|
|||||||
|
11.
EARNINGS PER SHARE
|
||
The
following shares were used for the computation of earnings per
share:
|
For
the Three Months Ended
|
|||||||
December
31,
|
|||||||
2005
|
2004
|
||||||
Basic
|
3,902,667
|
3,832,345
|
|||||
Diluted
|
3,944,580
|
3,906,358
|
The
difference between the number of shares used for computation of
basic
earnings per share and diluted earnings per share
represents the dilutive effect of stock options.
|
|||||
12.
ADVANCES FROM FEDERAL HOME LOAN BANK
|
|||||
Advances
from the Federal Home Loan Bank consists of the
following:
|
December
31,
|
September
30,
|
||||||||||||
2005
|
2005
|
||||||||||||
Weighted
|
Weighted
|
||||||||||||
Interest
|
Interest
|
||||||||||||
Maturing
Period
|
Amount
|
Rate
|
Amount
|
Rate
|
|||||||||
1 to 12 months
|
$
|
42,966,667
|
3.89
|
%
|
$
|
36,043,911
|
3.73
|
%
|
|||||
13
to 24 months
|
16,737,739
|
3.43
|
%
|
25,446,061
|
3.66
|
%
|
|||||||
25
to 36 months
|
72,367,241
|
4.83
|
%
|
69,114,248
|
4.83
|
%
|
|||||||
37
to 48 months
|
17,244,075
|
3.83
|
%
|
31,484,966
|
3.89
|
%
|
|||||||
49
to 60 months
|
24,074,029
|
5.28
|
%
|
9,302,331
|
3.97
|
%
|
|||||||
61
to 72 months
|
36,761,623
|
4.69
|
%
|
40,208,732
|
5.35
|
%
|
|||||||
73
to 84 months
|
48,639,400
|
4.54
|
%
|
60,668,239
|
4.47
|
%
|
|||||||
85
to 120 months
|
25,000,000
|
3.80
|
%
|
25,000,000
|
3.80
|
%
|
|||||||
Total
|
$
|
283,790,774
|
4.43
|
%
|
$
|
297,268,488
|
4.38
|
%
|
To
Be Considered Well
|
|||||||||||||||||||
Capitalized
Under
|
|||||||||||||||||||
For
Capital
|
Prompt
Corrective
|
||||||||||||||||||
Actual
|
Adequacy
Purposes
|
Action
Provisions
|
|||||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
||||||||||||||
As
of December 31, 2005
|
|||||||||||||||||||
Tier
1
Capital (to assets)
|
$
|
48,102,489
|
6.30
|
%
|
$
|
30,555,600
|
4.00
|
%
|
$
|
38,195,750
|
5.00
|
%
|
|||||||
Tier
1
Capital (to risk weighted assets)
|
48,102,489
|
13.46
|
%
|
14,290,760
|
4.00
|
%
|
21,436,140
|
6.00
|
%
|
||||||||||
Total
Capital (to risk weighted assets)
|
50,069,461
|
14.01
|
%
|
28,581,520
|
8.00
|
%
|
35,726,900
|
10.00
|
%
|
||||||||||
As
of September 30, 2005
|
|||||||||||||||||||
Tier
1
Capital (to assets)
|
$
|
47,524,213
|
6.26
|
%
|
$
|
30,376,680
|
4.00
|
%
|
$
|
37,970,850
|
5.00
|
%
|
|||||||
Tier
1
Capital (to risk weighted assets)
|
47,524,213
|
13.31
|
%
|
14,283,160
|
4.00
|
%
|
21,424,740
|
6.00
|
%
|
||||||||||
Total
Capital (to risk weighted assets)
|
49,491,820
|
13.86
|
%
|
28,566,320
|
8.00
|
%
|
35,707,900
|
10.00
|
%
|
1
Year
|
1
to 3
|
3
to 5
|
Over
5
|
|||||||||||||
or
less
|
Years
|
Years
|
Years
|
Total
|
||||||||||||
Interest-earning
assets
|
||||||||||||||||
Mortgage
loans
|
$
|
36,475
|
$
|
56,440
|
$
|
42,757
|
$
|
134,982
|
$
|
270,654
|
||||||
Mortgage-backed
securities
|
85,396
|
85,247
|
41,771
|
40,131
|
252,545
|
|||||||||||
Consumer
and other loans
|
58,348
|
24,571
|
8,511
|
11,648
|
103,078
|
|||||||||||
Investment
securities and other investments
|
29,399
|
3,414
|
21,698
|
82,872
|
137,383
|
|||||||||||
Total
interest-earning assets
|
209,618
|
169,672
|
114,737
|
269,633
|
763,660
|
|||||||||||
Interest-bearing
liabilities
|
||||||||||||||||
Passbook
and
Club accounts
|
-
|
-
|
-
|
3,459
|
3,459
|
|||||||||||
NOW
and
checking accounts
|
-
|
-
|
-
|
32,019
|
32,019
|
|||||||||||
Money
Market Deposit accounts
|
21,447
|
-
|
-
|
48,725
|
70,172
|
|||||||||||
Choice
Savings
|
-
|
-
|
-
|
|||||||||||||
Certificate
accounts
|
143,554
|
153,919
|
16,739
|
-
|
314,212
|
|||||||||||
Borrowed
money
|
68,021
|
84,443
|
31,549
|
99,778
|
283,791
|
|||||||||||
Total
interest-bearing liabilities
|
233,022
|
238,362
|
48,288
|
183,981
|
703,653
|
|||||||||||
Repricing
GAP during the period
|
$
|
(23,404
|
)
|
$
|
(68,690
|
)
|
$
|
66,449
|
$
|
85,652
|
$
|
60,007
|
||||
Cumulative
GAP
|
$
|
(23,404
|
)
|
$
|
(92,094
|
)
|
$
|
(25,645
|
)
|
$
|
60,007
|
|||||
Ratio
of GAP during the period to total assets
|
-3.05
|
%
|
-8.96
|
%
|
8.67
|
%
|
11.17
|
%
|
||||||||
Ratio
of cumulative GAP to total assets
|
-3.05
|
%
|
-12.01
|
%
|
-3.35
|
%
|
7.83
|
%
|
Period
|
Total
Number of Shares Purchased
|
Average
Price
Paid
per
Share
|
Total
Number of Shares Purchased as Part of Publicly Announced Plans
or
Programs
|
Maximum
Number of Shares that May Yet Be Purchased Under the Plans or
Programs(1)
|
||||||||
October
1-31, 2005
|
135,667
|
|||||||||||
November
1-30, 2005
|
3,000
|
$
|
17.40
|
3,000
|
132,667
|
|||||||
December
1-31, 2005
|
||||||||||||
Total
|
3,000
|
$
|
17.40
|
3,000
|
132,667
|
(a)
|
On
June 18, 2003, the Company announced its current program to repurchase
up
to 5.0% of the outstanding shares of Common Stock of the Company,
or
191,667 shares.
|
(b)
|
The
program does not have an expiration date and all shares are purchased
in
the open market.
|
Certification
of Chief Executive Officer
|
||||||||||
Certification
of Chief Financial Officer
|
||||||||||
Section
1350 Certification of Chief Executive Officer and Chief Financial
Officer
|
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
Registrant
has duly caused this
report to be signed on its behalf by the undersigned thereunto
duly
authorized.
|
HARLEYSVILLE
SAVINGS FINANCIAL CORPORATION
|
||
Date:
February 10, 2006
|
By:
/s/ Edward J. Molnar
|
|
Edward
J. Molnar
|
||
Chief
Executive Officer
|
||
Date:
February 10, 2006
|
By:
/s/ Brendan J. McGill
|
|
Brendan
J. McGill
|
||
Chief
Executive Officer
|
||
Senior
Vice President
|
||
Treasurer
and Chief Financial Officer
|