Loan origination commissions increased due to higher residentialmortgage volume related to a decrease in market interest rates
Loan origination commissions increased due to higher residentialmortgage volume related to a decrease in market interest rates. During the firstquarter of 2009, impairment charges of $336,000 were recorded to reduce thecarrying value of the Bank`s investment in two small business investment companylimited partnerships. The increase in the 2009 FDIC assessment was attributableto the expiration of credits during 2008. Computer and electronic bankingservices expense rose as a result of increased telecommunication costs andtransaction activity. Total assets increased $11.4 million, or 1.3%, to $864.5 million at March 31,2009 from $853.1 million at December 31, 2008. Contributing to the increase inassets were increases of $13.9 million in cash and cash equivalents and $6.3million in net loans receivable, offset by a decrease of $8.2 million inavailable for sale securities. The increase in net loans receivable representsan increase in commercial business loans offset by a decrease in residential andcommercial mortgage loans.
Commercial business loans increased as a result ofthe purchase of $14.9 million in USDA and SBA loans that are fully guaranteed bythe U.S government. An increase in residential mortgage loan originations of$21.3 million were partially offset by residential mortgage loan sales of $15.0million during the quarter ended March 31, 2009. Overall loan originationsincreased $4.1 million in the first quarter of 2009 compared to the same periodin 2008. The decrease in available for sale securities reflects the sale ofprimarily mortgage-backed securities. Total liabilities were $792.0 million at March 31, 2009 compared to $780.2million at December 31, 2008. Deposits increased $15.5 million, or 2.5%, whichincluded an increase in NOW and money market accounts of $13.6 million,noninterest-bearing deposits of $989,000 and certificate of deposit accounts of$956,000.
The increase in deposits was due to branch expansion, marketing andpromotional initiatives and competitively priced deposit products. Borrowingsdecreased $2.0 million from $147.8 million at December 31, 2008 to $145.8million at March 31, 2009, resulting from a decrease in Federal Home Loan Bankadvances. Total stockholders` equity decreased $379,000 from $72.9 million at December 31,2008 to $72.5 million at March 31, 2009. The decrease in stockholders` equitywas attributable to an increase in net unrealized holding losses on availablefor sale securities aggregating $3.4 million (net of taxes), offset by acumulative effect adjustment to retained earnings of $2.7 million as a result ofthe adoption of Financial Accounting Standards Board Staff Position FAS 115-2and FAS 124-2, “Recognition and Presentation of Other-Than-TemporaryImpairments” (“FSP FAS 115-2 and FAS 124-2″) and earnings of $56,000. The early adoption of FSP FAS 115-2 and FAS 124-2 during the quarter ended March31, 2009, required management to separately identify whetherother-than-temporary impairment charges totaling $7.1 million that werepreviously recognized in earnings during the third and fourth quarters of 2008were related to credit losses or other noncredit factors at the measurement dateof impairment.