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5-18-10 Oconee Financial Corp (Parent of Oconee State Bank) making progress with US SEC

Stockholder Equity actually went up in the first quarter of 2010. $ 24,685,613 to $ 25,206,183. .... It is encouraging that Oconee Financial Corporation is making progress.

AVOC

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May 18, 2010

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Oconee Financial Corp (Parent of Oconee State Bank) making progress with US SEC

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By Wendell Dawson, Editor, AVOC, Inc

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According to the May 17, 2010, filing with the U S Securities & Exchange Commission, Oconee State Bank’s situation has improved since the “Cease and Desist Order of August 18, 2009.    While total assets are down, so are liabilities.   The bank has trimmed some of its charge-off problem loans.

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Stockholder Equity actually went up in the first quarter of 2010. $ 24,685,613 to $ 25,206,183.

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The Economy is going to have a long-term recovery in my opinion.   The “Boom Period” of 2002-2006 is over for now and probably for several years.   It is encouraging that Oconee Financial Corporation is making progress.


OCONEE FINANCIAL CORPORATION

FORM 10-Q –Quarterly Report to the U S Securities & Exchange Commission

Dated May 17, 2010

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Excerpts:

http://www.sec.gov/Archives/edgar/data/1076691/000101968710001872/oconee_10q-033110.htm

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PART 1 - FINANCIAL INFORMATION

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Consolidated Balance Sheets

March 31, 2010 and December 31, 2009

 OCONEE FINANCIAL CORPORATION AND SUBSIDIARY

March 31, 2010

(unaudited)

December 31, 2009

Assets

Cash and due from banks, including reserve requirements of $5,000

$

22,669,079

24,736,354

Federal funds sold

-

-

                   Cash and cash equivalents

22,669,079

24,736,354

Investment securities available for sale

63,940,843

66,903,283

Other investments

556,300

556,300

Mortgage loans held for sale

207,160

-

Loans, net of allowance for loan losses of $,684,522 and $,497,292

170,652,697

176,340,490

Premises and equipment, net

6,205,786

6,312,968

Other real estate owned

8,775,372

6,915,161

Accrued interest receivable and other assets

3,239,281

3,534,444

                   Total assets

$

276,246,518

  285,299,000

Liabilities and Stockholders’ Equity

Liabilities:

       Deposits

            Noninterest-bearing

$

28,845,857

28,957,212

            Interest-bearing

211,277,182

221,485,106

                   Total deposits

240,123,039

250,442,318

       Securities sold under repurchase agreements

10,234,754

9,814,023

       Accrued interest payable and other liabilities

682,542

357,046

                   Total liabilities

251,040,335

260,613,387

Stockholders’ equity:

       Common stock, $ par value;

             authorized 1,500,000 shares;

             issued and outstanding 899,815 shares

1,799,630

1,799,630

       Additional paid-in capital

4,243,332

4,243,332

       Retained earnings

18,569,288

18,301,063

       Accumulated other comprehensive income

593,933

341,588

                   Total stockholders’ equity

25,206,183

24,685,613

                   Total liabilities and stockholders’ equity

$

276,246,518

285,299,000

……………………………………..

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Part 2 (Page 13)

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On August 18, 2009, the Bank entered into a Stipulation and Consent to the Issuance of an Order to Cease and Desist (the “Consent Agreement”) with the Federal Deposit Insurance Corporation (the “FDIC”) and the Georgia Department of Banking and Finance (the “GDBF”), whereby the Bank consented to the issuance of an Order to Cease and Desist (the “Order”).

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Among other things, the Order provides that, unless otherwise agreed by the FDIC and GDBF:

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·

the Board of Directors of the Bank must increase its participation in the affairs of the Bank and establish a Board committee responsible for ensuring compliance with the Order;

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the Bank must have and retain qualified management and notify the FDIC and the GDBF in writing when it proposes to add any individual to the Bank’s Board of Directors or employ any individual as a senior executive officer;

·

the Bank must have and maintain a Tier 1 (Leverage) Capital ratio of not less than 8% and a Total Risk-based Capital ratio of at least 10%;

·

the Bank must collect or charge-off problem loans;

·

the Bank must formulate a written plan to reduce the Bank’s adversely classified assets in accordance with a defined asset reduction schedule;

·

the Bank may not extend any additional credit to, or for the benefit of, any borrower who has a loan or other extension of credit from the Bank that has been charged-off or adversely classified and is uncollected;

·

the Bank must strengthen its lending and collection policy to provide effective guidance and control over the Bank’s lending functions;

·

the Bank must perform a risk segmentation analysis with respect to concentrations of credit and reduce such concentrations;

·

the Board of Directors of the Bank must review the adequacy of the allowance for loan and lease losses (the “ALLL”) and establish a comprehensive policy for determining the adequacy of the ALLL;

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the Bank must revise its budget and include formal goals and strategies to improve the Bank’s net interest margin, increase interest income, reduce discretionary expenses and improve and sustain earnings of the Bank;

·

the Bank may not pay a cash dividend to Oconee Financial Corporation;

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the Board of Directors of the Bank must strengthen its asset/liability management and interest rate risk policies and liquidity contingency funding plan,

·

the Bank may not accept, renew or rollover brokered deposits without obtaining a brokered deposit waiver from the FDIC.

·

the Bank must eliminate or correct all violations of law and contraventions of policy;

·

the Bank must submit quarterly reports to the FDIC and GDBF regarding compliance with the Order.

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The provisions of the Order will remain effective until modified, terminated suspended or set aside by the FDIC.  The primary focuses going forward will be reducing classified and non-performing assets, maintaining adequate levels of capital and returning the Bank to profitable operating levels.  As of March 31, 2010, the Bank was in full compliance with the Order.


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