WVS FINANCIAL CORP [WVFC] Filings

10-Q 1 wvfc20220331_10q.htm FORM 10-Q wvfc20220331_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________

Commission File Number: 0-22444

WVS Financial Corp.

(Exact name of registrant as specified in its charter)

Pennsylvania	25-1710500
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

9001 Perry Highway Pittsburgh, Pennsylvania	15237
(Address of principal executive offices)	(Zip Code)

(412) 364-1911
(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirement for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company,” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13 (a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange on which

registered

Common Stock, par value $.01

WVFC

NASDAQ Global Market ^SM

Shares outstanding as of May 3, 2022: 1,878,056 shares of Common Stock, $.01 par value.

Table of Contents

WVS FINANCIAL CORP. AND SUBSIDIARY

INDEX

		Page
PART I.	Financial Information
Item 1.	Financial Statements
	Consolidated Balance Sheet as of March 31, 2022 and June 30, 2021 (Unaudited)	3
	Consolidated Statement of Income for the Three and Nine Months Ended March 31, 2022 and 2021 (Unaudited)	4
	Consolidated Statement of Comprehensive Income for the Three and Nine Months Ended March 31, 2022 and 2021 (Unaudited)	5
	Consolidated Statement of Changes in Stockholders’ Equity for the Three and Nine Months Ended March 31, 2022 and 2021 (Unaudited)	6
	Consolidated Statement of Cash Flows for the Nine Months Ended March 31, 2022 and 2021 (Unaudited)	8
	Notes to Unaudited Consolidated Financial Statements	10
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30
Item 3	Quantitative and Qualitative Disclosures about Market Risk	36
Item 4	Controls and Procedures	40

PART II.	Other Information	Page
Item 1.	Legal Proceedings	41
Item 1A.	Risk Factors	41
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	41
Item 3.	Defaults Upon Senior Securities	42
Item 4.	Mine Safety Disclosures	42
Item 5.	Other Information	42
Item 6.	Exhibits	42
	Signature	43

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WVS FINANCIAL CORP. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEET

(UNAUDITED)

(In thousands)

	March 31, 2022			June 30, 2021
ASSETS

Cash and due from banks	$	2,833		$	2,514
Interest-earning demand deposits		490			37
Total cash and cash equivalents		3,323			2,551
Certificates of deposit		350			350
Investment securities available-for-sale (amortized cost of $136,126 and $150,886)		135,287			151,577
Investment securities held-to-maturity (fair value of $9,545 and $15,592)		9,954			15,489
Mortgage-backed securities held-to-maturity (fair value of $125,924 and $82,659)		129,413			82,459
Net loans receivable (allowance for loan losses of $513 and $565)		76,166			80,684
Accrued interest receivable		987			749
Federal Home Loan Bank (FHLB) stock, at cost		6,793			6,044
Premises and equipment		590			657
Deferred tax assets (net)		389			245
Bank owned life insurance		5,104			5,021
Other assets		442			252
TOTAL ASSETS	$	368,798		$	346,078
Liabilities and Stockholders’ Equity			)
LIABILITIES

Savings Deposits:
Non-interest-bearing accounts	$	27,741		$	25,452
NOW accounts		28,148			26,881
Savings accounts		50,293			50,058
Money market accounts		24,062			22,995
Certificates of deposit		29,972			29,731
Advance payments by borrowers for taxes and insurance		1,460			2,050
Total Savings Deposits		161,676			157,167

Federal Home Loan Bank advances: long-term – fixed rate		5,000			10,000
Federal Home Loan Bank advances: long-term – variable rate		-			25,000
Federal Home Loan Bank advances: short-term		161,823			113,093
Total Federal Home Loan Bank advances		166,823			148,093

Accrued interest payable		114			155
Other liabilities		2,525			2,274
TOTAL LIABILITIES		331,138			307,689
STOCKHOLDERS' EQUITY

Preferred stock: 5,000,000 authorized, none outstanding		-			-
Common stock: 10,000,000 authorized, 3,805,636 shares issued;		38			38
Additional paid in capital		21,618			21,596
Treasury stock: 1,925,854 and 1,921,522 shares at cost, respectively		(29,185	)		(29,119	)
Retained earnings, substantially restricted		47,603			47,186
Accumulated other comprehensive (loss) income		(701	)		502
Unallocated Employee Stock Ownership Plan (“ESOP”) shares		(1,713	)		(1,814	)
TOTAL STOCKHOLDERS’ EQUITY		37,660			38,389
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	368,798		$	346,078

See accompanying notes to unaudited consolidated financial statements.

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WVS FINANCIAL CORP. AND SUBSIDIARY

CONSOLIDATED STATEMENT OF INCOME

(UNAUDITED)

(In thousands, except per share data)

	Three Months Ended						Nine Months Ended
	March 31,						March 31,
	2022			2021			2022			2021
INTEREST AND DIVIDEND INCOME:
Loans, including fees	$	700		$	753		$	2,113		$	2,422
Investment securities		334			370			1,027			1,205
Mortgage-backed securities		276			149			714			623
Certificates of deposit		1			3			5			13
FHLB Stock		70			38			187			174
Total interest and dividend income		1,381			1,313			4,046			4,437
INTEREST EXPENSE:
Deposits		34			61			106			257
Federal Home Loan Bank advances – long-term – fixed rate		38			76			135			269
Federal Home Loan Bank advances – long-term – variable rate		-			19			35			111
Federal Home Loan Bank advances – short-term		93			25			208			85
Other short-term borrowings		-			-			-			1
Total interest expense		165			181			484			723
NET INTEREST INCOME		1,216			1,132			3,562			3,714
(CREDIT) PROVISION FOR LOAN LOSSES		(16	)		(8	)		(52	)		(15	)
NET INTEREST INCOME AFTER (CREDIT) PROVISION FOR LOAN LOSSES		1,232			1,140			3,614			3,729
NON-INTEREST INCOME:
Service charges on deposits		26			22			74			63
Earnings on Bank Owned Life Insurance		28			28			84			85
Investment securities gains		-			56			74			93
Other than temporary impairment (“OTTI”) losses		-			-			-			(13	)
Portion of loss (gain) recognized in other comprehensive income (before taxes)		-			-			-			-
Net impairment loss recognized in earnings		-			-			-			(13	)
ATM fee income		32			35			108			109
Other		10			11			32			30
Total non-interest income		96			152			372			367
NON-INTEREST EXPENSE:
Salaries and employee benefits		548			632			1,691			1,726
Occupancy and equipment		61			71			225			208
Data processing		59			60			179			181
Correspondent bank service charges		10			10			29			29
Federal deposit insurance premium		25			8			71			62
ATM Network expense		20			21			62			64
Other		151			134			468			422
Total non-interest expense		874			936			2,725			2,692
INCOME BEFORE INCOME TAXES		454			356			1,261			1,404
INCOME TAX EXPENSE		116			91			322			363
NET INCOME	$	338		$	265		$	939		$	1,041
EARNINGS PER SHARE:
Basic	$	0.19		$	0.15		$	0.54		$	0.59
Diluted	$	0.19		$	0.15		$	0.54		$	0.59
AVERAGE SHARES OUTSTANDING:
Basic		1,741,446			1,751,849			1,740,117			1,749,739
Diluted		1,741,446			1,751,849			1,740,117			1,749,739

See accompanying notes to unaudited consolidated financial statements.

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WVS FINANCIAL CORP. AND SUBSIDIARY

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(UNAUDITED)

(In thousands)

	Three Months Ended						Nine Months Ended
	March 31,						March 31,
	2022			2021			2022			2021

NET INCOME	$	338		$	265		$	939		$	1,041
OTHER COMPREHENSIVE INCOME
Investment securities available for sale not other-than-temporarily impaired:
(Losses) gains arising during the year		(890	)		(19	)		(1,454	)		1,358
Less: Income tax effect		188			4			305			(285	)
		(702	)		(15	)		(1,149	)		1,073
(Gains) recognized in earnings		-			(56	)		(74	)		(93	)
Less: Income tax effect		-			12			15			20
		-			(44	)		(59	)		(73	)
Unrealized holding (losses) gains on investment securities available for sale not other-than-temporarily impaired, net of tax		(702	)		(59	)		(1,208	)		1,000
Investment securities held to maturity other-than-temporarily impaired:
Total losses		-			-			-			13
Losses recognized in earnings		-			-			-			13
Gains (losses) recognized in comprehensive income		-			-			-			-
Income tax effect		-			-			-			-
		-			-			-			-
Accretion of other comprehensive gain on other-than-temporarily impaired securities held to maturity		2			4			6			12
Less: Income tax effect		(1	)		(1	)		(1	)		(2	)

Unrealized holding gains on other-than-temporarily impaired securities held to maturity, net of tax		1			3			5			10
Other comprehensive (loss) income		(701	)		(56	)		(1,203	)		1,010
COMPREHENSIVE (LOSS) INCOME	$	(363	)	$	209		$	(264	)	$	2,051

See accompanying notes to unaudited consolidated financial statements.

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WVS FINANCIAL CORP. AND SUBSIDIARY

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

(UNAUDITED)

(In thousands, except per share data)

	Common Stock		Additional Paid-in Capital		Treasury Stock			Retained Earnings – Substantially Restricted			Accumulated Other Comprehensive (Loss) Income			Unallocated ESOP Shares			Total
Balance December 31, 2021	$	38	$	21,611	$	(29,119	)	$	47,439		$	-		$	(1,747	)	$	38,222
Net income		-		-		-			338			-			-			338
Other comprehensive loss		-		-		-			-			(701	)		-			(701	)
Purchase of treasury stock (4,332 shares)		-		-		(66	)		-			-			-			(66	)
Amortization of unallocated ESOP shares		-		7		-			-			-			34			41
Cash dividends declared ($0.10 per share)		-		-		-			(174	)		-			-			(174	)
Balance March 31, 2022	$	38	$	21,618	$	(29,185	)	$	47,603		$	(701	)	$	(1,713	)	$	37,660

	Common Stock		Additional Paid-in Capital		Treasury Stock			Retained Earnings – Substantially Restricted			Accumulated Other Comprehensive (Loss) Income			Unallocated ESOP Shares			Total
Balance June 30, 2021	$	38	$	21,596	$	(29,119	)	$	47,186		$	502		$	(1,814	)	$	38,389
Net income		-		-		-			939			-			-			939
Other comprehensive (loss)		-		-		-			-			(1,203	)		-			(1,203	)
Purchase of treasury stock (4,332 shares)		-		-		(66	)		-			-			-			(66	)
Amortization of unallocated ESOP shares		-		22		-			-			-			101			123
Cash dividends declared ($0.30 per share)		-		-		-			(522	)		-			-			(522	)
Balance March 31, 2022	$	38	$	21,618	$	(29,185	)	$	47,603		$	(701	)	$	(1,713	)	$	37,660

See accompanying notes to unaudited consolidated financial statements.

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WVS FINANCIAL CORP. AND SUBSIDIARY

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

(UNAUDITED)

(In thousands, except per share data)

	Common Stock		Additional Paid-in Capital		Treasury Stock			Retained Earnings – Substantially Restricted			Accumulated Other Comprehensive (Loss) Income			Unallocated ESOP Shares			Total
Balance December 31, 2020	$	38	$	21,581	$	(28,827	)	$	47,016		$	510		$	(1,891	)	$	38,427
Net income		-		-		-			265			-			-			265
Other comprehensive (loss)		-		-		-			-			(56	)		-			(56	)
Amortization of unallocated ESOP shares		-		7		-			-			-			38			45
Cash dividends declared ($0.10 per share)		-		-		-			(175	)		-			-			(175	)
Balance March 31, 2021	$	38	$	21,588	$	(28,827	)	$	47,106		$	454		$	(1,853	)	$	38,506

	Common Stock		Additional Paid-in Capital		Treasury Stock			Retained Earnings – Substantially Restricted			Accumulated Other Comprehensive (Loss) Income			Unallocated ESOP Shares			Total
Balance June 30, 2020	$	38	$	21,577	$	(28,775	)	$	46,590		$	(556	)	$	(1,961	)	$	36,913
Net income		-		-		-			1,041			-			-			1,041
Other comprehensive income		-		-		-			-			1,010			-			1,010
Purchase of treasury stock (4,014 shares)		-		-		(52	)		-			-			-			(52	)
Amortization of unallocated ESOP shares		-		11		-			-			-			108			119
Cash dividends declared ($0.20 per share)		-		-		-			(525	)		-			-			(525	)
Balance March 31, 2021	$	38	$	21,588	$	(28,827	)	$	47,106		$	454		$	(1,853	)	$	38,506

See accompanying notes to unaudited consolidated financial statements.

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WVS FINANCIAL CORP. AND SUBSIDIARY

CONSOLIDATED STATEMENT OF CASH FLOWS

(UNAUDITED)

(In thousands)

	Nine Months Ended
	March 31,
	2022			2021
OPERATING ACTIVITIES
Net income	$	939		$	1,041
Adjustments to reconcile net income to cash (used for) provided by operating activities:
(Credit) Provision for loan losses		(51	)		(15	)
Depreciation		71			53
Investment securities gains		(74	)		(93	)
Net impairment loss recognized in earnings		-			13
Amortization of discounts, premiums and deferred loan fees, net		941			208
Amortization of unallocated ESOP shares		123			119
Deferred income taxes		177			26
Increase (decrease) in accrued income taxes		41			(280	)
Earnings on bank owned life insurance		(84	)		(85	)
Increase in accrued employee benefits		150			770
Increase in accrued interest receivable		(238	)		(18	)
Decrease in accrued interest payable		(41	)		(326	)
Increase in deferred director compensation payable		40			40
Other, net		(169	)		(782	)
Net cash provided by operating activities		1,825			671

INVESTING ACTIVITIES
Available-for-sale:
Purchases of investment securities		(38,698	)		(70,843	)
Proceeds from sale of investments		9,060			8,082
Proceeds from repayments of investment securities		43,570			60,797
Held-to-maturity:
Purchase of mortgage-backed securities		(79,236	)		(13,163	)
Proceeds from repayments of investment securities		5,540			750
Proceeds from repayments of mortgage-backed securities		32,314			51,835
Purchases of certificates of deposit		(100	)		(100	)
Maturities/redemptions of certificates of deposit		100			1,590
Purchase of loans		(3,722	)		(7,950	)
Net decrease in net loans receivable		8,221			12,792
Purchase of FHLB stock		(12,680	)		(12,058	)
Redemption of FHLB stock		11,931			13,773
Acquisition of premises and equipment		(4	)		(132	)
Net cash (used for) provided by investing activities		(23,704	)		45,373

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WVS FINANCIAL CORP. AND SUBSIDIARY

CONSOLIDATED STATEMENT OF CASH FLOWS

(UNAUDITED)

(In thousands)

	Nine Months Ended
	March 31,
	2022			2021
FINANCING ACTIVITIES
Net increase in transaction and savings accounts	$	4,858		$	7,735
Net increase (decrease) in certificates of deposit		241			(3,280	)
Net decrease in advance payments by borrowers for taxes and insurance		(590	)		(576	)
Repayments of Federal Home Loan Bank long-term advances		(30,000	)		(65,000	)
Net increase in FHLB short-term advances		48,730			22,934
Repayments of other short-term borrowings		-			(5,800	)
Purchase of treasury stock		(66	)		(52	)
Cash dividends paid		(522	)		(525	)
Net cash provided by (used for) financing activities		22,651			(44,564	)
Increase in cash and cash equivalents		772			1,480
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD		2,551			2,500
CASH AND CASH EQUIVALENTS AT END OF THE PERIOD	$	3,323		$	3,980

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest on deposits and borrowings	$	525		$	1,049
Income taxes		95			653

See accompanying notes to unaudited consolidated financial statements.

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WVS FINANCIAL CORP. AND SUBSIDIARY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1.	BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements of WVS Financial Corp. (the Company) and subsidiary have been prepared in accordance with the instructions for Form 10-Q and therefore do not include information or footnotes necessary for a complete presentation of financial condition, results of operations, and cash flows in conformity with U.S. generally accepted accounting principles (GAAP). However, all adjustments (consisting only of normal recurring adjustments) which, in the opinion of management, are necessary for a fair presentation have been included. The results of operations for the three and nine months ended March 31, 2022, are not necessarily indicative of the results which may be expected for the entire fiscal year.

The coronavirus (COVID-19) pandemic has negatively impacted the global economy, disrupted global supply chains and increased unemployment levels. The resulting temporary closure of many businesses and the implementation of social distancing and sheltering-in-place policies has and may continue to impact many of the Company’s customers. While the full effects of the pandemic remain unknown, the Company is committed to supporting its customers, employees and communities during this difficult time. The Company has given hardship relief assistance to customers, including the consideration of various loan payment deferral and fee waiver options, and encourages customers to reach out for assistance to support their individual circumstances. The pandemic could result in the recognition of credit losses in our loan portfolios and increases in our allowance for credit losses, particularly if businesses remain closed, the impact on the global economy worsens, or more customers draw on their lines of credit or seek additional loans to help finance their businesses. Similarly, because of changing economic and market conditions affecting issuers, we may be required to recognize impairments on the securities we hold. The extent to which the COVID-19 pandemic impacts our business, results of operations, and financial condition, as well as our regulatory capital and liquidity ratios, will depend on future developments, which are highly uncertain and cannot be predicted, including the scope and duration of the pandemic and actions taken by governmental authorities and other third parties in response to the pandemic.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed by the President of the United States. Certain provisions within the CARES Act encourage financial institutions to practice prudent efforts to work with borrowers impacted by COVID-19. Under these provisions, loan modifications deemed to be COVID-19 related would not be considered a troubled debt restructuring (TDR) if the loan was not more than 30 days past due as of December 31, 2019 and the deferral was executed between March 1, 2020 and the earlier of 60 days after the date of termination of the COVID-19 national emergency or January 1, 2022. The banking regulators issued similar guidance, which also clarified that a COVID-19-related modification should not be considered a TDR if the borrower was current on payments at the time the underlying loan modification program was implemented and if the modification is considered to be short-term. As of January 1, 2022, West View Savings Bank (the Savings Bank) had no loans remaining in deferral.

2.	RECENT ACCOUNTING PRONOUNCEMENTS

In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which changes the impairment model for most financial assets. This ASU is intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. The underlying premise of the ASU is that financial assets measured at amortized cost should be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. The allowance for credit losses should reflect management’s current estimate of credit losses that are expected to occur over the remaining life of a financial asset. The income statement will be affected for the measurement of credit losses for newly recognized financial assets, as well as the expected increases or decreases of expected credit losses that have taken place during the period. ASU 2016-13 is effective for annual and interim periods beginning after December 15, 2019, and early adoption is permitted for annual and interim periods beginning after December 15, 2018. With certain exceptions, transition to the new requirements will be through a cumulative effect adjustment to opening retained earnings as of the beginning of the first reporting period in which the guidance is adopted. In November 2019, the FASB issued ASU 2019-10, Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842). This Update defers the effective date of ASU 2016-13 for SEC filers that are eligible to be smaller reporting companies, non-SEC filers, and all other companies to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. We expect to recognize a one-time cumulative effect adjustment to the allowance for loan losses as of the beginning of the first reporting period in which the new standard is effective, but cannot yet determine the magnitude of any such one-time adjustment or the overall impact of the new guidance on the consolidated financial statements.

In November 2019, the FASB issued ASU 2019- 10, Financial Instruments ‒ Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842). The Update defers the effective dates of ASU 2016- 13 for SEC filers that are eligible to be smaller reporting companies, non-SEC filers, and all other companies to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. This Update also amends the mandatory effective date for the elimination of Step 2 from the goodwill impairment test under ASU No. 2017- 04, Intangibles Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (Goodwill),to align with those used for credit losses. Furthermore, the ASU provides a one-year deferral of the effective dates of the ASUs on derivatives and hedging and leases for companies that are not public business entities. The Company qualifies as a smaller reporting company and does not expect to early adopt these ASUs.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, March 2020, to provide temporary optional expedients and exceptions to the U.S. GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from LIBOR and other interbank offered rates to alternative reference rates, such as Secured Overnight Financing Rate. Entities can elect not to apply certain modification accounting requirements to contracts affected by what the guidance calls reference rate reform, if certain criteria are met. An entity that makes this election would not have to remeasure the contracts at the modification date or reassess a previous accounting determination. Also, entities can elect various optional expedients that would allow them to continue applying hedge accounting for hedging relationships affected by reference rate reform, if certain criteria are met, and can make a one-time election to sell and/or reclassify held-to-maturity debt securities that reference an interest rate affected by reference rate reform. The amendments in this ASU are effective for all entities upon issuance through December 31, 2022. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial position or results of operations.

In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848), which provides optional temporary guidance for entities transitioning away from the London Interbank Offered Rate (LIBOR) and other interbank offered rates (IBORs) to new references rates so that derivatives affected by the discounting transition are explicitly eligible for certain optional expedients and exceptions within Topic 848. ASU 2021-01 clarifies that the derivatives affected by the discounting transition are explicitly eligible for certain optional expedients and exceptions in Topic 848. ASU 2021-01 is effective immediately for all entities. Entities may elect to apply the amendments on a full retrospective basis as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or on a prospective basis to new modifications from any date within an interim period that includes or is subsequent to the date of the issuance of a final update, up to the date that financial statements are available to be issued. The amendments in this update do not apply to contract modifications made, as well as new hedging relationships entered into, after December 31, 2022, and to existing hedging relationships evaluated for effectiveness for periods after December 31, 2022, except for certain hedging relationships existing as of December 31, 2022, that apply certain optional expedients in which the accounting effects are recorded through the end of the hedging relationship. This Update is not expected to have a significant impact on the Company’s financial statements, OR the Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial position or results of operations.

In March 2022, the FASB issued ASU 2022-02, Financial Instruments - Credit Losses (ASC 326): Troubled Debt Restructurings (TDRs) and Vintage Disclosures. The guidance amends ASC 326 to eliminate the accounting guidance for TDRs by creditors, while enhancing disclosure requirements for certain loan refinancing and restructuring activities by creditors when a borrower is experiencing financial difficulty. Specifically, rather than applying TDR recognition and measurement guidance, creditors will determine whether a modification results in a new loan or continuation of existing loan. These amendments are intended to enhance existing disclosure requirements and introduce new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. Additionally, the amendments to ASC 326 require that an entity disclose current-period gross writeoffs by year of origination within the vintage disclosures, which requires that an entity disclose the amortized cost basis of financing receivables by credit quality indicator and class of financing receivable by year of origination. The guidance is only for entities that have adopted the amendments in Update 2016-13 for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. Early adoption using prospective application, including adoption in an interim period where the guidance should be applied as of the beginning of the fiscal year. This Update is not expected to have a significant impact on the Company’s financial statements, OR the Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial position or results of operations.

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3.	REVENUE RECOGNITION

The Company recognizes revenue in accordance with ASC 606, Revenue from contracts with Customers – Topic 606. Management determined that the primary sources of revenue emanating from interest and dividend income on loans and investments along with noninterest revenue resulting from investment security gains, and earnings on bank owned life insurances are not within the scope of ASC 606. The main types of noninterest income within the scope of the standard are as follows: Service Charges on deposit accounts - the Company has contracts with its deposit customers where fees are charged if certain parameters are not met. These agreements can be cancelled at any time by either the Company or the deposit customer. Revenue from these transactions is recognized on a monthly basis as the Company has an unconditional right to the fee consideration. The Company also has transaction fees related to specific transactions or activities resulting from a customer request or activity that include overdraft fees, online banking fees, interchange fees, ATM fees and other transaction fees. All of these fees are attributable to specific performance obligations of the Company where the revenue is recognized at a defined point in time upon the completion of the requested service/transaction.

4.	EARNINGS PER SHARE

The following table sets forth the computation of the weighted-average common shares used to calculate basic and diluted earnings per share.

	Three Months Ended						Nine Months Ended
	March 31,						March 31,
	2022			2021			2022			2021
Weighted average common shares outstanding		3,805,636			3,805,636			3,805,636			3,805,636
Average treasury stock shares		(1,923,257	)		(1,902,946	)		(1,922,092	)		(1,902,562	)
Average unallocated ESOP shares		(140,933	)		(150,841	)		(143,427	)		(153,335	)
Weighted average common shares and common stock equivalents used to calculate basic earnings per share		1,741,446			1,751,849			1,740,117			1,749,739
Weighted average common shares and common stock equivalents used to calculate diluted earnings per share		1,741,446			1,751,849			1,740,117			1,749,739

There are no convertible securities that would affect the numerator in calculating basic and diluted earnings per share; therefore, net income as presented on the Consolidated Statement of Income is used.

The unallocated shares controlled by the ESOP are not considered in the weighted-average shares outstanding until the shares are committed for allocation to an employee’s individual account.

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5.	INVESTMENT SECURITIES

The amortized cost, gross unrealized gains and losses, and fair values of investments are as follows:

			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
	(Dollars in Thousands)
March 31, 2022
AVAILABLE FOR SALE
U.S. government agency securities	$	3,198	$	-	$	(151	)	$	3,047
Corporate debt securities		98,551		157		(623	)		98,085
Foreign debt securities1		33,656		44		(226	)		33,474
Obligations of states and political subdivisions		721		-		(40	)		681
Total	$	136,126	$	201	$	(1,040	)	$	135,287

			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
	(Dollars in Thousands)
March 31, 2022
HELD TO MATURITY
U.S. government agency securities	$	7,749	$	-	$	(437	)	$	7,312
Obligations of states and political subdivisions		2,205		28		-			2,233
Total	$	9,954	$	28	$	(437	)	$	9,545

			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
	(Dollars in Thousands)
June 30, 2021
AVAILABLE FOR SALE
U.S. government agency securities	$	3,215	$	-	$	(1	)	$	3,214
Corporate debt securities		109,501		546		(7	)		110,040
Foreign debt securities1		37,440		179		(21	)		37,598
Obligations of states and political subdivisions		730		-		(5	)		725
Total	$	150,886	$	725	$	(34	)	$	151,577

			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
	(Dollars in Thousands)
June 30, 2021
HELD TO MATURITY
U.S. government agency securities	$	12,744	$	5	$	-	$	12,749
Obligations of states and political subdivisions		2,745		98		-		2,843
Total	$	15,489	$	103	$	-	$	15,592

¹ U.S. dollar denominated investment-grade corporate bonds of large foreign corporate issuers.

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The Company recorded gross realized investment security gains of $0 and $74 thousand during the three and nine months ended March 31, 2022, respectively. Proceeds from the sales of investment securities totaled $0 and $9.1 million during the same periods.

The Company recorded gross realized investment security gains of $56 thousand and $93 thousand during the three and nine months ended March 31, 2021, respectively. Proceeds from the sales of investment securities totaled $1.0 million and $8.1 million during the same periods.

The amortized cost and fair values of debt securities at March 31, 2022, by contractual maturity, are shown below. Expected maturities may differ from the contractual maturities because issuers may have the right to call securities prior to their final maturities.

	Due in one year or less		Due after one through five years		Due after five through ten years		Due after ten years		Total
	(Dollars in Thousands)
AVAILABLE FOR SALE
Amortized cost	$	61,935	$	73,723	$	468	$	-	$	136,126
Fair value		61,835		73,016		436		-		135,287
HELD TO MATURITY
Amortized cost	$	1,185	$	1,020	$	7,749	$	-	$	9,954
Fair value		1,198		1,035		7,312		-		9,545

At March 31, 2022 investment securities with amortized costs of $13.2 million and $29.1 million and fair values of $12.6 million and $29.2 million were pledged to secure borrowings with the Federal Home Loan Bank (“FHLB”) of Pittsburgh and the Federal Reserve Bank of Cleveland (“FRB”), respectively. Of the securities pledged to the FHLB, $142.3 million of amortized cost, and $138.0 million of fair value was excess collateral. Of the securities pledged to the FRB, $29.1 million of amortized cost, and $29.2 million of fair value, was excess collateral. Excess collateral is maintained to support future borrowings and may be withdrawn by the Company at any time.

6.	MORTGAGE-BACKED SECURITIES

Mortgage-backed securities (“MBS”) include mortgage pass-through certificates (“PCs”) and collateralized mortgage obligations (“CMOs”). With a pass-through security, investors own an undivided interest in the pool of mortgages that collateralize the PCs. Principal and interest is passed through to the investor as it is generated by the mortgages underlying the pool. PCs and CMOs may be insured or guaranteed by Freddie Mac (“FHLMC”), Fannie Mae (“FNMA”) and the Government National Mortgage Association (“GNMA”). CMOs may also be privately issued with varying degrees of credit enhancements. A CMO reallocates mortgage pool cash flow to a series of bonds (called traunches) with varying stated maturities, estimated average lives, coupon rates and prepayment characteristics.

The Company’s CMO portfolio is comprised of two segments: CMOs backed by U.S. Government Agencies (“Agency CMOs”) and CMOs backed by single-family whole loans not guaranteed by a U.S. Government Agency (“Private-Label CMOs”).

At March 31, 2022, the Company’s Agency CMOs totaled $129.1 million as compared to $82.1 million at June 30, 2021. The Company’s Private-Label CMOs totaled $359 thousand at March 31, 2022 as compared to $400 thousand at June 30, 2021. The $47.0 million increase in the Agency CMO segment of our MBSportfolio was due to purchases of Agency CMOs which totaled $79.2 million, partially offset by repayments totaling $32.3 million. During the three and nine months ended March 31, 2022, the Company received principal payments totaling $

WVS FINANCIAL CORP [WVFC] Filings
10-Q	[2022-05-13]
10-Q	[2022-02-14]
10-Q	[2021-11-15]
10-K	[2021-09-15]
10-Q	[2021-05-14]
10-Q	[2021-02-12]
10-Q	[2020-11-13]
10-K	[2020-09-11]
10-Q	[2020-05-15]
10-Q	[2020-02-13]
10-Q	[2019-11-13]
10-K	[2019-09-13]
10-Q	[2019-05-14]
10-Q	[2019-02-14]
10-Q	[2018-11-14]
10-K	[2018-09-13]
10-Q	[2018-05-11]
10-Q	[2018-02-12]
10-Q	[2017-11-09]
10-K	[2017-09-14]
10-Q	[2017-05-12]
10-Q	[2017-02-13]
10-Q	[2016-11-14]
10-K	[2016-09-15]
10-Q	[2016-05-16]
10-Q	[2016-02-12]
10-Q	[2015-11-13]
10-K	[2015-09-17]
10-Q	[2015-05-14]
10-Q	[2015-02-13]
10-Q	[2014-11-14]
10-K	[2014-09-18]
10-Q	[2014-05-15]
10-Q	[2014-02-14]
10-Q	[2013-11-14]
10-K	[2013-09-19]
10-Q	[2013-05-13]
10-Q	[2013-02-13]
10-Q	[2012-11-13]
10-K	[2012-09-18]
10-Q	[2012-05-11]
10-Q	[2012-02-10]