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K-Fed Bancorp 10-Q 2008 UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
10-Q
x QUARTERLY REPORT
PURSUANT TO SECTION 13 OR 15(d) of
THE
SECURITIES EXCHANGE ACT OF 1934
For
the quarterly period ended: September 30,
2008
OR
o 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: 000-50592
K-FED
BANCORP
(Exact
name of registrant as specified in its charter)
(800)
524-2274
(Registrant’s
telephone number, including area code)
Indicate
by check mark whether the registrant: (1) has filed all reports required to be
filed by Sections 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 requirements for
the past 90 days.
Yes x
Noo
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company. See
definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange act. (Check one):
Large
accelerated filer o Accelerated
filer o
Non-accelerated filer o
Smaller Reporting Company x
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).
Yes o
No x
APPLICABLE
ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of
the issuer’s classes of common stock, as of the latest practicable
date:
Common
Stock, $.01 par value – 13,414,813 shares outstanding as of November 3,
2008.
Form
10-Q
K-FED
BANCORP
Table
of Contents
Part
I — FINANCIAL INFORMATION
Item
1. Financial Statements
K-FED
BANCORP AND SUBSIDIARY
Consolidated
Statements of Financial Condition
(Unaudited)
(Dollars
in thousands, except share data)
1
Consolidated
Statements of Income and Comprehensive Income
(Unaudited)
(Dollars
in thousands, except per share data)
2
K-FED
BANCORP AND SUBSIDIARY
And
Other Comprehensive Income
(Unaudited)
(Dollars
in thousands, except share and per share data)
3
K-FED
BANCORP AND SUBSIDIARY
(Unaudited)
(Dollars
in thousands)
4
K-FED
BANCORP AND SUBSIDIARY
(Unaudited)
Note
1 – Nature of Business
and Significant Accounting Policies
The
Company’s business activities generally are limited to passive investment
activities and oversight of our investment in the Bank. Unless the context
otherwise requires, all references to the Company include the Bank and the
Company on a consolidated basis.
The
results of operations for the three months ended September 30, 2008 are not
necessarily indicative of the results of operations that may be expected for any
other interim period or for the fiscal year ending June 30, 2009. Certain
information and note disclosures normally included in the Company’s annual
financial statements have been condensed or omitted. Therefore, these
consolidated financial statements and notes thereto should be read in
conjunction with the consolidated financial statements and notes included in the
2008 Annual Report on Form 10-K filed with the Securities and Exchange
Commission.
Newly
Issued Accounting Standards:
In
December 2007, the Financial Accounting Standards Board (“FASB”) issued
Statement of Financial Accounting Standards (“SFAS”) No. 141R, Business Combinations. SFAS
141R replaces the current standard on business combinations and will
significantly change the accounting for and reporting of business combinations
in consolidated financial statements. This statement requires an entity to
measure the business acquired at fair value and to recognize goodwill
attributable to any noncontrolling interests (previously referred to as minority
interests) rather than just the portion attributable to the
acquirer. The statement will also result in fewer exceptions to the
principle of measuring assets acquired and liabilities assumed in a business
combination at fair value. In addition, the statement will result in
payments to third parties for consulting, legal, and similar services associated
with an acquisition to be recognized as expenses when incurred rather than
capitalized as part of the business combination. SFAS 141R is
effective for fiscal years beginning on or after December 15, 2008. The adoption
of the is statement is not expected to bave a material effect on the financial
statements of the Company.
5
Adoption
of New Accounting Standards:
In
September 2006, the FASB issued Statement No. 157, Fair Value Measurements. This
Statement defines fair value, establishes a framework for measuring fair value
and expands disclosures about fair value measurements. This Statement
establishes a fair value hierarchy about the assumptions used to measure fair
value and clarifies assumptions about risk and the effect of a restriction on
the sale or use of an asset. The standard is effective for fiscal years
beginning after November 15, 2007. In February 2008, the FASB issued Staff
Position (FSP) 157-2, Effective Date of FASB Statement No. 157. This FSP delays
the effective date of FAS 157 for all nonfinancial assets and nonfinancial
liabilities, except those that are recognized or disclosed at fair value on a
recurring basis (at least annually) to fiscal years beginning after November 15,
2008, and interim periods within those fiscal years. The impact of adoption was
not material. See Note 3, “Fair Value” for disclosures related to the
adoption of SFAS 157.
In
February 2007, the FASB issued Statement No. 159, The Fair Value Option for
Financial Assets and Financial Liabilities. The standard provides companies with
an option to report selected financial assets and liabilities at fair value and
establishes presentation and disclosure requirements designed to facilitate
comparisons between companies that choose different measurement attributes for
similar types of assets and liabilities. The Company did not elect the fair
value option for any financial assets or financial liabilities as of July 1,
2008, the effective date of the standard.
Note
2 – Earnings Per
Share
Basic
earnings per common share is net income divided by the weighted average number
of common shares outstanding during the period. ESOP shares are considered
outstanding for this calculation unless unearned. Diluted earnings per common
share includes the dilutive effect of additional potential common shares
issuable under stock options and stock awards.
For the
three ended September 30, 2008 and 2007, outstanding stock options to purchase
322,400 and 348,400,shares, respectively, were anti-dilutive and not
considered in computing diluted earnings per common share.
Note 3 –
Fair
Value>
Statement
157 establishes a fair value hierarchy which requires an entity to maximize the
use of observable inputs and minimize the use of unobservable inputs when
measuring fair value. The standard describes three levels of inputs that may be
used to measure fair value:
6
The fair
values of securities available for sale are determined by obtaining quoted
prices on nationally recognized securities exchanges (Level 1inputs) or matrix
pricing, which is a mathematical technique widely used to in the industry to
value debt securities without relying exclusively on quoted prices for the
specific securities but rather by relying on the securities’ relationship to
other benchmark quoted securities (Level 2 inputs).
Assets
and liabilities measured at fair value on a recurring basis are summarized
below:
The
following assets and liabilities were measured at fair value on a non-recurring
basis:
Impaired
loans, which are measured for impairment using the fair value of the collateral
for collateral dependent loans, had a carrying amount of $5,603,000 as compared
to $3,842,000 at June 30, 2008. The fair value of collateral is
calculated using a third party appraisal. The valuation allowance for
these loans was $738,000 at September 30, 2008 as compared to $334,000 at June
30, 2008. An additional provision for loan losses of $404,000 was
made during the quarter ended September 30, 2008 relating to impaired
loans. (Level 3 inputs).
Real
estate owned of $1,079,000 was based on the fair value of the collateral (Level
3 inputs).
Forward-Looking
Information
This Quarterly Report on Form 10-Q
contains certain forward-looking statements and information relating to the
Company and the Bank that are based on the beliefs of management as well as
assumptions made by and information currently available to management. In
addition, in portions of this document the words “anticipate,” “believe,”
“estimate,” “expect,” “intend,” “should” and similar expressions or the negative
thereof, as they relate to the Company or the Bank or their management, are
intended to identify forward-looking statements. Such statements reflect the
current views of the Company and/or the Bank with respect to forward-looking
events and are subject to certain risks, uncertainties and assumptions. Should
one or more of these risks or uncertainties materialize or should underlying
assumptions prove incorrect, actual results may vary materially from those
described herein as anticipated, believed, estimated, expected or intended. The
Company does not intend to update these forward-looking
statements.
7
Comparison
of Financial Condition at September 30, 2008 and June 30, 2008.
Our
investment portfolio decreased $964,000, or 6.0% to $15.1 million at September
30, 2008 from $16.0 million at June 30, 2008. The decrease was attributable to
maturities and normal repayments of principal on our mortgage-backed securities
and collateralized mortgage obligations.
Our gross
loan portfolio decreased by $2.8 million, or 0.4% to $742.7 million at September
30, 2008 from $745.4 million at June 30, 2008. The decrease was primarily due to
slowing loan demand resulting from the current weak market conditions. One-to
four-family real estate loans decreased $8.9 million, or 2.1% to $419.8 million
at September 30, 2008 from $428.7 million at June 30,
2008. Commercial real estate loans decreased $684,000, or 0.6% to
$115.1 million at September 30, 2008 from $115.8 million at June 30,
2008. Multi-family loans increased $12.1 million, or 9.2% to $144.4
million at September 30, 2008 from $132.3 million at June 30,
2008. Other loans which are comprised primarily of automobile loans
decreased $5.3 million, or 7.8% to $63.3 million at September 30, 2008 from
$68.6 million at June 30, 2008. Real estate loans comprised 91.5% of the total
loan portfolio at September 30, 2008, compared with 90.8% at June 30,
2008.
Stockholders’ Equity:>
Stockholders’ equity increased $356,000 to $91.1 million at September 30, 2008
from $90.7 million at June 30, 2008 primarily as a result of $1.4 million in net
income earned for the three months ended September 30, 2008, an increase in the
unrealized gain on securities of $3,000 net of tax and the allocation of ESOP
shares, stock awards, and stock options earned totaling $291,000. This increase
was offset by cash payments of $874 for the purchase of treasury shares and
$473,000 in dividends paid to stockholders of record, excluding shares held by
K-Fed Mutual Holding Company, of $0.10 per share.
8
Average
Balances, Net Interest Income, Yields Earned and Rates Paid
9
Comparison
of Results of Operations for the Three Months Ended September 30, 2008 and
September 30, 2007.
Interest
income on securities decreased by $199,000 or 53.4%, to $174,000 for the three
months ended September 30, 2008 from $373,000 for the three months ended
September 30, 2007. The decrease was attributable to a $18.6 million decrease in
the average balance of investment securities from $34.1 million for the three
months ended September 30, 2007 to $15.5 million for the three months ended
September 30, 2008. The decrease was attributable to maturities and
normal repayments of principal on our mortgage-backed securities and
collateralized mortgage obligations.
Other
interest income increased by $17,000 or 7.7% to $239,000 for the three months
ended September 30, 2008 from $222,000 for the three months ended September 30,
2007. The primary factor for the increase in other interest income was an
increase in the average balance of federal funds sold of $28.1 million or
238.1%, from $11.8 million for the three months ended September 30, 2007 to
$39.9 million for the three months ended September 30, 2008. Other interest
income was also negatively impacted by a 299 basis point decrease in the average
yield earned on Federal funds sold from 5.01% for the three months ended
September 30, 2007 to 2.02% for the three months ended September 30,
2008. The decrease in the average yield on federal funds sold was
primarily attributable to declines in the federal funds rate during the
comparable periods as a result of actions taken by the Federal Reserve in
lowering the federal funds rate.
10
The loss
ratio analysis component of the allowance is calculated by applying loss factors
to outstanding loans based on the internal risk evaluation of the loans or pools
of loans. Changes in risk evaluations of both performing and nonperforming loans
affect the amount of the formula allowance. Loss factors are based both on our
historical loss experience as well as on significant factors that, in
management’s judgment, affect the collectability of the portfolio as of the
evaluation date.
The
appropriateness of the allowance is reviewed and established by management based
upon its evaluation of then-existing economic and business conditions affecting
our key lending areas and other conditions, such as credit quality trends
(including trends in nonperforming loans expected to result from existing
conditions), collateral values, loan volumes and concentrations, specific
industry conditions within portfolio segments and recent loss experience in
particular segments of the portfolio that existed as of the balance sheet date
and the impact that such conditions were believed to have had on the
collectability of the loan. Senior management reviews these conditions quarterly
in discussions with our senior credit officers. To the extent that any of these
conditions is evidenced by a specifically identifiable problem credit or
portfolio segment as of the evaluation date, management’s estimate of the effect
of such condition may be reflected as a specific allowance applicable to such
credit or portfolio segment. Where any of these conditions is not evidenced by a
specifically identifiable problem credit or portfolio segment as of the
evaluation date, management’s evaluation of the loss related to this condition
is reflected in the general allowance. The evaluation of the inherent loss with
respect to these conditions is subject to a higher degree of uncertainty because
they are not identified with specific problem credits or portfolio
segments.
Management
also evaluates the adequacy of the allowance for loan losses based on a review
of individual loans, historical loan loss experience, the value and adequacy of
collateral and economic conditions in our market area. This evaluation is
inherently subjective as it requires material estimates, including the amounts
and timing of future cash flows expected to be received on impaired loans that
may be susceptible to significant change. For all specifically reviewed loans
for which it is probable that we will be unable to collect all amounts due
according to the terms of the loan agreement, we determine impairment by
computing a fair value either based on discounted cash flows using the loan’s
initial interest rate or the fair value of the collateral if the loan is
collateral dependent. Large groups of smaller balance homogeneous loans that are
collectively evaluated for impairment and are excluded from specific impairment
evaluation, and their allowance for loan losses is calculated in accordance with
the allowance for loan losses policy described above.
Because
the allowance for loan losses is based on estimates of losses inherent in the
loan portfolio, actual losses can vary significantly from the estimated amounts.
Our methodology as described above permits adjustments to any loss factor used
in the computation of the formula allowance in the event that, in management’s
judgment, significant factors which affect the collectability of the portfolio
as of the evaluation date are not reflected in the loss factors. By assessing
the estimated losses inherent in the loan portfolio on a quarterly basis, we are
able to adjust specific and inherent loss estimates based upon any more recent
information that has become available. In addition, management’s determination
as to the amount of our allowance for loan losses is subject to review by the
Office of Thrift Supervision and the FDIC, which may require the establishment
of additional general or specific allowances based upon their judgment of the
information available to them at the time of their examination of Kaiser Federal
Bank.
Our
provision for loan losses was $363,000 for the three months ended September 30,
2008 compared to $168,000 for the three months ended September 30, 2007. The
allowance for loan losses as a percent of total loans was 0.44% at September 30,
2008 as compared to 0.41% at September 30, 2007. Net charge-offs totaled
$315,000 or 0.17% of average loans for the three months ended September 30, 2008
as compared to $31,000 or 0.02% of average loans for the three months ended
September30, 2007. The increase in provision for loan losses was primarily
attributable to an increase in real estate loan delinquencies as well as loan
volume increases in multi-family and commercial real estate lending. The
assumptions are based both on current industry and economic trends in addition
to our internal loan loss history. We used the same methodology and
generally similar assumptions in assessing the adequacy of the allowance for
consumer and real estate loans for both periods.
11
Asset
Quality
The asset
quality of the Bank has remained strong and consistent over the past quarter.
This has been accomplished by the strict adherence to its long standing
disciplined credit culture that emphasizes the consistent application of
underwriting standards to all loans. In this regard, the Bank fully underwrites
all loans based on an applicant’s employment history, credit history and an
appraised value of the subject property. With respect to purchased loans, the
Bank underwrites each loan based upon our own underwriting standards prior to
making the purchase.
The
following underwriting guidelines have been used by the Bank as underwriting
tools to further limit the Bank’s potential loss exposure:
Additionally,
the Bank’s portfolio has remained strongly anchored in traditional mortgage
products. In this regard, we do not originate or purchase construction loans,
payment option-ARM loans, negatively amortizing loans or high LTV
loans.
12
Delinquent
Loans. The
following table sets forth certain information with respect to our loan
portfolio delinquencies at the dates indicated.
13
Non-Performing
Assets. >The following table sets forth the amounts and categories of
non-performing assets in our loan portfolio. Non-performing assets consist of
non-accrual loans and foreclosed assets. Loans to a customer whose financial
condition has deteriorated are considered for non-accrual status whether or not
the loan is 90 days and over past due. All loans past due 90 days and over are
classified as non-accrual. On non-accrual loans, interest income is not
recognized until actually collected. At the time the loan is placed on
non-accrual status, interest previously accrued but not collected is reversed
and charged against current income. Interest is not accrued on loans
greater than 90 days or more delinquent. At each date presented, we had no
troubled debt restructurings (loans for which a portion of interest or principal
has been forgiven and loans modified at interest rates less than current market
rates).
Foreclosed
assets consist of real estate and other assets which have been acquired through
foreclosure on loans. At the time of foreclosure, assets are recorded at the
lower of their estimated fair value less selling costs or the loan balance, with
any write-down charged against the allowance for loan losses.
14
Liquidity
and Commitments
Liquidity
may increase or decrease depending upon the availability of funds and
comparative yields on investments in relation to the return on loans.
Historically, we have maintained liquid assets at levels above the minimum
requirements imposed by Office of Thrift Supervision regulations and above
levels believed to be adequate to meet the requirements of normal operations,
including potential deposit outflows. Cash flow projections are regularly
reviewed and updated to assure that adequate liquidity is maintained. See
“Consolidated Statements of Cash Flows” contained in the unaudited Consolidated
Financial Statements included in this document.
Our
liquidity, represented by cash and cash equivalents and mortgage-backed and
related securities, is a product of operating, investing and financing
activities. Our primary sources of funds are deposits; amortization, prepayments
and maturities of outstanding loans and mortgage-backed and related securities,
and other short-term investments; and funds provided from operations. While
scheduled payments from the amortization of loans and mortgage-backed related
securities and maturing investment securities and short-term investments are
relatively predictable sources of funds, deposit flows and loan prepayments are
greatly influenced by general interest rates, economic conditions, and
competition. In addition, we invest excess funds in short-term interest-earning
assets, which provide liquidity to meet lending requirements. We also generate
cash through borrowings. We utilize Federal Home Loan Bank advances to leverage
our capital base and provide funds for our lending and investment activities and
enhance our interest rate risk management.
Liquidity
management is both a daily and long-term function of business management. Excess
liquidity is generally invested in short-term investments such as overnight
deposits. On a longer-term basis, we maintain a strategy of investing in various
lending products. We use our sources of funds primarily to meet ongoing
commitments, to pay maturing time deposits and savings withdrawals, to fund loan
commitments and to maintain our portfolio of mortgage-backed and related
securities. At September 30, 2008, the total approved loan commitments unfunded
amounted to $8.3 million, which includes the unfunded portion of loans of $5.5
million.
The Bank
pledged certain investment securities and mortgage loans to obtain $25.0 million
in deposits with the State of California through the state’s time deposit
program. Time deposits and advances from the Federal Home Loan Bank
of San Francisco scheduled to mature in one year or less at September 30, 2008,
totaled $93.0 million and $38.0 million, respectively. Based on historical
experience, management believes that a significant portion of maturing deposits
will remain with Kaiser Federal Bank. We anticipate that we will continue to
have sufficient funds, through deposits and borrowings, to meet our current
commitments.
At
September 30, 2008, we had available additional advances from the Federal Home
Loan Bank of San Francisco in the amount of $83.0 million. Kaiser
Federal Bank’s credit limit with the Federal Home Loan Bank is limited to 40% of
the Bank’s total assets.
Capital
The table
below sets forth Kaiser Federal Bank’s capital position relative to its Office
of Thrift Supervision capital requirements at September 30, 2008. The
definitions of the terms used in the table are those provided in the capital
regulations issued by the Office of Thrift Supervision.
Consistent
with our goal to operate a sound and profitable financial organization, we
actively seek to maintain a “well capitalized” institution in accordance with
regulatory standards. At September 30, 2008, Kaiser Federal Bank was
a “well-capitalized” institution under regulatory standards. 15
Impact
of Inflation
The
consolidated financial statements presented herein have been prepared in
accordance with GAAP. These principles require the measurement of financial
position and operating results in terms of historical dollars, without
considering changes in the relative purchasing power of money over time due to
inflation.
Our
primary assets and liabilities are monetary in nature. As a result, interest
rates have a more significant impact on our performance than the effects of
general levels of inflation. Interest rates, however, do not necessarily move in
the same direction or with the same magnitude as the price of goods and
services, since such prices are affected by inflation. In a period of rapidly
rising interest rates, the liquidity and maturity structure of our assets and
liabilities are critical to the maintenance of acceptable performance
levels.
The
principal effect of inflation, as distinct from levels of interest rates, on
earnings is in the area of noninterest expense. Such expense items as employee
compensation, employee benefits and occupancy and equipment costs may be subject
to increases as a result of inflation. An additional effect of inflation is the
possible increase in the dollar value of the collateral securing loans that we
have made. We are unable to determine the extent, if any, to which properties
securing our loans have appreciated in dollar value due to
inflation.
ITEM
3. Quantitative and Qualitative Disclosures About Market Risk
How We Measure Our Risk of Interest
Rate Changes. >As part of our attempt to manage our exposure to changes in
interest rates and comply with applicable regulations, we monitor our interest
rate risk. In monitoring interest rate risk we continually analyze and manage
assets and liabilities based on their payment streams and interest rates, the
timing of their maturities, and their sensitivity to actual or potential changes
in market interest rates.
In order
to minimize the potential for adverse effects of material and prolonged
increases in interest rates on our results of operations, we have adopted
investment/asset and liability management policies to better match the
maturities and repricing terms of our interest-earning assets and
interest-bearing liabilities. The board of directors sets and recommends the
asset and liability policies of Kaiser Federal Bank, which are implemented by
the asset/liability management committee.
The
purpose of the asset/liability management committee is to communicate,
coordinate and control asset/liability management consistent with our business
plan and board approved policies. The committee establishes and monitors the
volume and mix of assets and funding sources taking into account relative costs
and spreads, interest rate sensitivity and liquidity needs. The objectives are
to manage assets and funding sources to produce results that are consistent with
liquidity, capital adequacy, growth, risk and profitability goals.
The
asset/liability management committee generally meets on a weekly basis to
review, among other things, economic conditions and interest rate outlook,
current and projected liquidity needs and capital position, anticipated changes
in the volume and mix of assets and liabilities and interest rate risk exposure
limits versus current projections pursuant to net present value of portfolio
equity analysis and income simulations. The asset/liability management committee
regularly reviews interest rate risk by forecasting the impact of alternative
interest rate environments on net interest income and market value of portfolio
equity, which is defined as the net present value of an institution’s existing
assets, liabilities and off-balance sheet instruments, and evaluating such
impacts against the maximum potential changes in net interest income and market
value of portfolio equity that are authorized by the board of directors of
Kaiser Federal Bank. The asset/liability management committee recommends
appropriate strategy changes based on this review. The chairman or his designee
is responsible for reviewing and reporting on the effects of the policy
implementations and strategies to the board of directors at least
quarterly.
16
In order
to manage our assets and liabilities and achieve the desired liquidity, credit
quality, interest rate risk, profitability and capital targets, we have focused
our strategies on: (1) originating and purchasing adjustable rate loans; (2)
originating a reasonable volume of short- and intermediate-term consumer loans;
(3) managing our deposits to establish stable deposit relationships; and (4)
using Federal Home Loan Bank advances, and pricing on fixed-term non-core
deposits to align maturities and repricing terms.
At times,
depending on the level of general interest rates, the relationship between long-
and short-term interest rates, market conditions and competitive factors, the
asset/liability management committee may determine to increase our interest rate
risk position somewhat in order to maintain our net interest margin. In the
future, we intend to continue our existing strategy of originating and
purchasing relatively short-term and/or adjustable rate loans. The Bank does not
maintain any securities for trading purposes. The Bank does not currently engage
in trading activities or use instruments such as interest rate swaps, hedges, or
other similar derivatives to control interest rate risk.
The
Office of Thrift Supervision provides Kaiser Federal Bank with the information
presented in the following table, which is based on information provided to the
Office of Thrift Supervision by Kaiser Federal Bank. It presents the change in
Kaiser Federal Bank’s net portfolio value at June 30, 2008 which is the latest
information available that would occur upon an immediate change in interest
rates based on Office of Thrift Supervision assumptions but without giving
effect to any steps that management might take to counteract that
change.
The
Office of Thrift Supervision uses certain assumptions in assessing the interest
rate risk of savings associations. These assumptions relate to interest rates,
loan prepayment rates, deposit decay rates, and the market values of certain
assets under differing interest rate scenarios.
As with
any method of measuring interest rate risk, shortcomings are inherent in the
method of analysis presented in the foregoing tables. For example, although
assets and liabilities may have similar maturities or periods to repricing, they
may react in different degrees to changes in the market interest rates. Also,
the interest rates on certain types of assets and liabilities may fluctuate in
advance of changes in market interest rates, while interest rates on other types
may lag behind changes in market rates. Additionally, certain assets, such as
adjustable rate mortgage loans, have features, that restrict changes in interest
rates on a short-term basis and over the life of the asset. Further, if interest
rates change, expected rates of prepayments on loans and early withdrawals from
certificates of deposit could deviate significantly from those assumed in
calculating the table.
ITEM
4. Controls and Procedures
Our
management evaluated, with the participation of our Chief Executive Officer and
Chief Financial Officer, the effectiveness of our disclosure controls and
procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934 (the “Act”)) as of the end of the period covered by this
report. The Company’s Chief Executive Officer and Chief Financial Officer
concluded that the Company’s disclosure controls and procedures as of the end of
the period covered by this report are effective in ensuring that the information
required to be disclosed by the Company in the reports it files or submits under
the Act is (i) accumulated and communicated to the Company’s management
(including the Chief Executive Officer and Chief Financial Officer) in a timely
manner, and (ii) recorded, processed, summarized, and reported within the time
periods specified in the SEC’s rules and forms.
17
There
have been no changes in our internal control over financial reporting (as
defined in Rule 13a-15(f) under the Act) that occurred during the quarter ended
September 30, 2008 that has materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting.
PART
II. OTHER INFORMATION
None.
There
have been no material changes to the risk factors that were previously disclosed
in the Company’s annual report on Form 10-K for the fiscal year ended June 30,
2008.
Issuer
Purchases of Equity Securities
* On
August 27, 2008, the Company announced its intention to repurchase an additional
5% of its outstanding publicly held common stock, or 228,354 shares of
stock.
None.
None.
Item
5. Other Information
None.
31.1 Certification
of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
Act
31.1 Certification
of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
Act
32.1 Certification
of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley
Act
32.2 Certification
of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley
Act
18
SIGNATURES
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.
K-Fed
Bancorp
Registrant
Date:
November 4,
2008
/s/ Kay M.
Hoveland
Kay M.
Hoveland
President, Chief
Executive Officer
/s/ Dustin
Luton
Dustin
Luton
Chief Financial
Officer
19
EXHIBIT
31.1
Certification
of the Chief Executive Officer
Pursuant
to Section 302 of the Sarbanes-Oxley Act
I, Kay M.
Hoveland, certify that:
Date: November 4,
2008 /s/ Kay M.
Hoveland
Kay M. Hoveland
President and Chief Executive
Officer
EXHIBIT
31.2
Certification
of the Chief Financial Officer
Pursuant
to Section 302 of the Sarbanes-Oxley Act
I, Dustin
Luton, certify that:
Date: November 4,
2008 /s/ Dustin
Luton
Dustin Luton
Chief Financial
Officer EXHIBIT
32.1
Certification
of the Chief Executive Officer
Pursuant
to 18 U.S.C. Section 1350,
as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
In
connection with the Quarterly Report of K-Fed Bancorp (the “Company”) on Form
10-Q for the period ended September 30, 2008 as filed with the Securities and
Exchange Commission on the date hereof (the “Report”), I, Kay M. Hoveland, Chief
Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and in
connection with this quarterly report on Form 10-Q that:
Date:
November 4,
2008 /s/ Kay M.
Hoveland
Kay M. Hoveland
Chief Executive Officer
EXHIBIT
32.2
Certification
of the Chief Financial Officer
Pursuant
to 18 U.S.C. Section 1350,
as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
In
connection with the Quarterly Report of K-Fed Bancorp (the “Company”) on Form
10-Q for the period ended September 30, 2008 as filed with the Securities and
Exchange Commission on the date hereof (the “Report”), I, Dustin Luton, Chief
Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and in
connection with this quarterly report on Form 10-Q that:
Date:
November 4,
2008 /s/ Dustin
Luton
Dustin Luton
Chief Financial
Officer | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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