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

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

May 18, 2010

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

By Wendell Dawson, Editor, AVOC, Inc

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.

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

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

Excerpts:

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

PART 1 - FINANCIAL INFORMATION

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)

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”).

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

·	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;

·	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;

·	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;

·	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.

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.