# CSB Bancorp, Inc.: Form 10-Q for the period ended Jun 30, 2015

- Company: [CSB Bancorp, Inc.](/companies/csbb.md) (CIK 880417)
- Form: 10-Q
- Filed: 2015-08-13
- Accepted by EDGAR: Aug 13, 2015, 15:20 ET
- Period: 2015-06-30
- Accession: 0001193125-15-289872
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/880417/000119312515289872/d41589d10q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/880417/000119312515289872/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2015-06-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Interest expense | 3 months, 2015-04-01 to 2015-06-30 | $393.0k | us-gaap:InterestExpense |
| Interest expense | 6 months, 2015-01-01 to 2015-06-30 | $786.0k | us-gaap:InterestExpense |
| Income tax | 3 months, 2015-04-01 to 2015-06-30 | $669.0k | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 6 months, 2015-01-01 to 2015-06-30 | $1.3m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2015-04-01 to 2015-06-30 | $1.5m | us-gaap:NetIncomeLoss |
| Net income | 6 months, 2015-01-01 to 2015-06-30 | $2.9m | us-gaap:NetIncomeLoss |
| Diluted EPS | 6 months, 2015-01-01 to 2015-06-30 | $1.04 | us-gaap:EarningsPerShareBasicAndDiluted |
| Operating cash flow | 6 months, 2015-01-01 to 2015-06-30 | $3.6m | us-gaap:NetCashProvidedByUsedInOperatingActivitiesContinuingOperations |
| Capital expenditure | 6 months, 2015-01-01 to 2015-06-30 | $444.0k | us-gaap:PaymentsToAcquireProductiveAssets |
| Dividends paid | 6 months, 2015-01-01 to 2015-06-30 | $521.0k | us-gaap:PaymentsOfDividendsCommonStock |
| Total assets | at 2015-06-30 | $623.0m | us-gaap:Assets |
| Total liabilities | at 2015-06-30 | $564.0m | us-gaap:Liabilities |
| Shareholders' equity | at 2015-06-30 | $59.0m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 23,618 characters.

The following management’s discussion and analysis focuses on the consolidated financial condition of the Company at June 30, 2015 as compared to December 31, 2014, and the consolidated results of operations for the three and six month periods ended June 30, 2015 compared to the same periods in 2014. The purpose of this discussion is to provide the reader with a more thorough understanding of the Consolidated Financial Statements. This discussion should be read in conjunction with the interim Consolidated Financial Statements and related footnotes contained in Part I, Item 1 of this Quarterly Report.

### FORWARD-LOOKING STATEMENTS

Certain statements contained in this Quarterly Report are not historical facts but rather are forward-looking statements that are subject to certain risks and uncertainties. When used herein, the terms “anticipates”, “plans”, “expects”, “believes”, and similar expressions as they relate to the Company or its management are intended to identify forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The Company’s actual results, performance or achievements may materially differ from those expressed or implied in the forward-looking statements. Risks and uncertainties that could cause or contribute to such material differences include, but are not limited to, general economic conditions, interest rate environment, competitive conditions in the financial services industry, changes in law, governmental policies and regulations, and rapidly changing technology affecting financial services. Other factors not currently anticipated may also materially and adversely affect the Company’s results of operations, cash flows and financial position. There can be no assurance that future results will meet expectations. While the Company believes that the forward-looking statements in this report are reasonable, the reader should not place undue reliance on any forward-looking statement.

The Company does not undertake, and specifically disclaims any obligation, to publicly revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events, except as may be required by applicable law.

### FINANCIAL CONDITION

Total assets were $623 million at June 30, 2015, compared to $621 million at December 31, 2014, representing an increase of $2 million, or less than 1%. This growth was funded by a $5 million increase in short-term borrowings during the six month period ended June 30, 2015. Loans and securities increased by $4 million and $3 million respectively, during the six month period while cash and cash equivalents decreased $5 million, or 11%.

Net loans increased $4 million, or 1%, during the six months ended June 30, 2015. Commercial loans including commercial real estate loans increased $5 million, or 2%, while construction and land development loans decreased $2 million, or 13%, with construction projects transferring to permanent financing during the six month period. Residential real estate loans increased $1 million, or 1%, and consumer loans increased 8% from December 31, 2014. Home purchase activity has increased and consumers continued to refinance their mortgage loans for lower long-term rates. Residential mortgage loan originations for the six months ended June 30, 2015 were $15 million as compared to $16 million for the prior year six month period. Originations sold into the secondary market were $6 million during the six month period ended June 30, 2015 as compared to $2 million during the six months ended June 30, 2014. The Bank originates and sells fixed-rate thirty year mortgages into the secondary market.

The allowance for loan losses as a percentage of total loans was 1.12% at June 30, 2015 as compared to 1.07% at December 31, 2014. Outstanding loan balances increased 1% to $415 million at June 30, 2015. A provision of $389 thousand, offset by net charge-offs of $114 thousand, increased the allowance for loan losses for the six months ended June 30, 2015.

Nonaccrual loans decreased during second quarter 2015. For the six months ending June 30, 2015 new loans totaling $99 thousand were placed on nonaccrual status, $93 thousand in charge-offs were recognized, $104 thousand was returned to accrual status and pay downs of $629 thousand were received during the six month period on loans in nonaccrual status.

*(Dollars in thousands)*

|  | June 30, 2015 | December 31, 2014 | June 30, 2014 |
| --- | ---: | ---: | ---: |
| Non-performing loans | $3,117 | $3,949 | $5,031 |
| Other real estate | — | — | — |
| Allowance for loan losses | 4,656 | 4,381 | 5,063 |
| Total loans | 415,198 | 410,903 | 411,930 |
| Allowance: Loans | 1.12% | 1.07% | 1.23% |
| Allowance: Non-performing loans | 1.5 x | 1.1 x | 1.0 x |

The ratio of gross loans to deposits was 84% at June 30, 2015, compared to 82% at December 31, 2014. The increase in this ratio is the result of loan volume increases during the six months ended June 30, 2015.

The Company has no exposure to government-sponsored enterprise preferred stocks, collateralized debt obligations or trust preferred securities. Management has considered industry analyst reports, sector credit reports and the volatility within the bond market in concluding that the gross unrealized losses of $981 thousand within the available-for-sale and held-to-maturity portfolios as of June 30, 2015, were primarily the result of customary and expected fluctuations in the bond market and not necessarily the expected cash flows of the individual securities. As a result, all security impairments on June 30, 2015, are considered temporary and no impairment loss relating to these securities has been recognized.

Deposits decreased $4 million, or less than 1%, from December 31, 2014 with noninterest bearing deposits increasing $352 thousand and interest-bearing deposit accounts decreasing $4 million. Total deposits as of June 30, 2015 are $13 million greater than June 30, 2014 deposit balances. On a year over year comparison, increases were recognized in every deposit category except for interest-bearing demand deposits and time deposits under $100 thousand.

Short-term borrowings consisting of overnight repurchase agreements with retail customers increased $5 million at June 30, 2015 from December 31, 2014 and other borrowings decreased $1 million as the Company repaid FHLB advances with required monthly amortization.

Total shareholders’ equity amounted to $59.0 million, or 9.5% of total assets, at June 30, 2015, compared to $57.5 million, or 9.3% of total assets, at December 31, 2014. The increase in shareholders’ equity during the six months ending June 30, 2015 was due to net income of $2.9 million which was partially offset by other comprehensive losses of $302 thousand and dividends declared of $1.0 million. The Company and the Bank met all regulatory capital requirements at June 30, 2015.

### RESULTS OF OPERATIONS

### Three months ended June 30, 2015 and 2014

For the quarters ended June 30, 2015 and 2014, the Company recorded net income of $1.5 million or $0.55 per share. The $5 thousand decrease in net income for the quarter was primarily the result of noninterest expenses increasing $125 thousand and a $45 thousand increase in provision for loan losses. These increases were partially offset by an increase in net interest income of $130 thousand and noninterest income of $21 thousand. Return on average assets and return on average equity were 0.97% and 10.23%, respectively, for the three month period of 2015, compared to 1.02% and 11.09%, respectively for the same quarter in 2014.

### Average Balance Sheets and Net Interest Margin Analysis

*(Dollars in thousands)*

| ASSETS | For the three months ended June 30, 2015 Average balance | Average rate | 2014 Average balance | Average rate |
| --- | ---: | ---: | ---: | ---: |
| Interest-earning deposits in other banks | $22,496 | 0.29% | $4,137 | 0.19% |
| Federal funds sold | 951 | 0.23 | 82 | 0.28 |
| Taxable securities | 127,134 | 2.11 | 130,171 | 2.27 |
| Tax-exempt securities | 20,536 | 4.05 | 15,657 | 4.46 |
| Loans | 417,347 | 4.57 | 411,016 | 4.53 |
| Total earning assets | 588,464 | 3.85% | 561,063 | 3.97% |
| Other assets | 36,568 |  | 37,030 |  |
| **TOTAL ASSETS** | $625,032 |  | $598,093 |  |
| **LIABILITIES AND SHAREHOLDERS’ EQUITY** |  |  |  |  |
| Interest-bearing demand deposits | $78,180 | 0.04% | $73,147 | 0.06% |
| Savings deposits | 156,168 | 0.07 | 149,799 | 0.09 |
| Time deposits | 126,795 | 0.75 | 129,245 | 0.75 |
| Other borrowed funds | 64,620 | 0.75 | 72,303 | 0.83 |
| Total interest bearing liabilities | 425,763 | 0.37% | 424,494 | 0.41% |
| Non-interest bearing demand deposits | 138,014 |  | 116,647 |  |
| Other liabilities | 1,782 |  | 1,900 |  |
| Shareholders’ Equity | 59,473 |  | 55,052 |  |
| **TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY** | $625,032 |  | $598,093 |  |
| Taxable equivalent net interest spread |  | 3.48% |  | 3.56% |
| Taxable equivalent net interest margin |  | 3.58% |  | 3.66% |

Interest income for the quarter ended June 30, 2015, was $5.6 million representing an $84 thousand increase, or a 2% improvement, compared to the same period in 2014. This increase was primarily due to average loan volume increasing $6 million for the quarter ended June 30, 2015 as compared to the second quarter 2014. Interest expense for the quarter ended June 30, 2015 was $393 thousand, a decrease of $46 thousand, or 10%, from the same period in 2014. The decrease in interest expense occurred primarily due to a decrease of 0.03% in interest rates paid on interest-bearing deposits which decreased from 0.33% in 2014 to 0.30% in 2015 and a rate decrease of 0.08% on all other borrowings which declined from 0.83% in 2014 to 0.75% for the quarter ended June 30, 2015.

The provision for loan losses for the quarter ended June 30, 2015 was $195 thousand, compared to a $150 thousand provision for the same quarter in 2014. The provision for loan losses is determined based on management’s calculation of the adequacy of the allowance for loan losses, which includes provisions for classified loans as well as for the remainder of the portfolio based on historical data, including past charge-offs and current economic trends.

Noninterest income for the quarter ended June 30, 2015, was $1.2 million, an increase of $21 thousand, or 2%, compared to the same quarter in 2014. There was a gain of $21 thousand on sale of investments during second quarter 2015 as compared to a $133 thousand gain on sale of investments in the second quarter 2014. Service charges on deposit accounts decreased $1 thousand, or less than 1%, compared to the same quarter in 2014 primarily from decreases in overdraft fees. Debit card interchange income increased $13 thousand, or 6%, with greater fee income. Fees from trust and brokerage services increased $41 thousand to $243 thousand for the second quarter 2015 as compared to the same quarter in 2014. The gain on the sale of mortgage loans to the secondary market increased to $122 thousand for the quarter ending June 30, 2015, from $44 thousand in the same quarter in 2014. The gain in 2015 was greater due to an additional volume of loans sold during the second quarter 2015.

Noninterest expenses for the quarter ended June 30, 2015 increased $125 thousand, or 3%, compared to the second quarter of 2014. Salaries and employee benefits increased $114 thousand, or 5%, a result of increases in salary and medical benefits. Professional and director fees decreased $12 thousand during for the quarter ended June 30, 2015 as compared to second quarter 2014. Occupancy and equipment expenses decreased $5 thousand in 2015 over the second quarter of 2014. Software expenses increased $41 thousand, or 24%, compared to the second quarter 2014 as a result of discounts received in 2014 on the core system software that have ended in 2015.

Federal income tax expense decreased $14 thousand, or 2%, for the quarter ended June 30, 2015 as compared to the second quarter of 2014. The provision for income taxes was $669 thousand (effective rate of 31%) for the quarter ended June 30, 2015, compared to $683 thousand (effective rate of 31%) for the same quarter ended 2014.

### RESULTS OF OPERATIONS

### Six months ended June 30, 2015 and 2014

Net income for the six months ended June 30, 2015, was $2.9 million or $1.04 per share, as compared to $2.9 million or $1.07 per share during the same period in 2014. Return on average assets and return on average equity were 0.92% and 9.79%, respectively, for the six month period of 2015, compared to 1.00% and 10.90%, respectively for 2014.

Comparative net income decreased as noninterest expenses increased $396 thousand or 5% for the six month period in 2015 as compared to 2014. The provision for loan losses increased $54 thousand or 16% during the same comparative period. Improvements to net income occurred as net interest income increased to $10.2 million for the six months ended June 30, 2015, an increase of $246 thousand or 2% from the same period last year. Noninterest income improved $122 thousand to $2.2 million or 6% for the six month period ending in 2015 as compared to 2014.

Interest income on loans increased $258 thousand, or 3%, for the six months ended June 30, 2015, as compared to the same period in 2014. This increase was primarily due to an average volume increase of $12 million for the comparable six month periods. Interest income on securities decreased $128 thousand, or 7%, as the average yield on securities dropped .11% to 2.42% on a fully taxable equivalent basis and the volume of securities decreased $2 million for the comparable six month periods. Interest income on fed funds sold and interest bearing deposits increased $25 thousand for the six months ended June 30, 2015 as the average fed funds sold and due from banks interest bearing balances increased $19 million, compared to the same period in 2014.

### Average Balance Sheet and Net Interest Margin Analysis

*(Dollars in thousands)*

| ASSETS | For the six months ended June 30, 2015 Average balance | Average rate | 2014 Average balance | Average rate |
| --- | ---: | ---: | ---: | ---: |
| Due from banks-interest bearing | $23,300 | 0.27% | $5,533 | 0.29% |
| Federal funds sold | 1,033 | 0.23 | 89 | 0.23 |
| Taxable securities | 127,395 | 2.15 | 133,468 | 2.30 |
| Tax-exempt securities | 19,685 | 4.14 | 15,640 | 4.49 |
| Loans | 416,062 | 4.53 | 403,563 | 4.54 |
| Total earning assets | 587,475 | 3.82% | 558,293 | 3.96% |
| Other assets | 36,325 |  | 36,262 |  |
| **TOTAL ASSETS** | $623,800 |  | $594,555 |  |
| **LIABILITIES AND SHAREHOLDERS’ EQUITY** |  |  |  |  |
| Interest bearing demand deposits | $76,458 | 0.03% | $72,730 | 0.06% |
| Savings deposits | 157,796 | 0.07 | 150,984 | 0.09 |
| Time deposits | 126,935 | 0.75 | 130,261 | 0.78 |
| Other borrowed funds | 64,549 | 0.76 | 68,575 | 0.84 |
| Total interest bearing liabilities | 425,738 | 0.37% | 422,550 | 0.42% |
| Non-interest bearing demand deposits | 137,218 |  | 115,683 |  |
| Other liabilities | 1,932 |  | 1,951 |  |
| Shareholders’ Equity | 58,912 |  | 54,371 |  |
| **TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY** | $623,800 |  | $594,555 |  |
| Taxable equivalent net interest spread |  | 3.45% |  | 3.54% |
| Taxable equivalent net interest margin |  | 3.55% |  | 3.64% |

Interest expense decreased $91 thousand to $786 thousand for the six months ended June 30, 2015, compared to the same period in 2014. Interest expense on deposits decreased $49 thousand, or 8%, from the same period as last year, while interest expense on short-term and other borrowings decreased $42 thousand or 15%. The decrease in interest expense has been caused by lower interest rates being paid across the board on interest-bearing deposit accounts and borrowings. Additionally, during the comparable six month periods, the Company grew non-interest bearing deposits by $22 million in 2015. Time deposits continue to renew at lower interest rates, and some depositors have moved monies to savings instruments anticipating higher rates than time deposits. Competition for deposits appears to be increasing from a year ago with larger money center banks and community banks increasing rates offered for money market savings accounts. The net interest margin decreased by 9 basis points for the six month period ended June 30, 2015, to 3.55%, from 3.64% for the same period in 2014. This margin decrease is primarily the result of decreased interest yields and the change in the asset mix to a greater percentage of overnight funds.

The provision for loan losses was $389 thousand during the six months of 2015, compared to $335 thousand in the same six month period of 2014. The provision for loan losses is determined based on management’s calculation of the adequacy of the allowance for loan losses, which includes provisions for classified loans as well as for the remainder of the portfolio based on historical data including past charge-offs and current economic trends.

Non-interest income increased $122 thousand during the six months ended June 30, 2015, as compared to the same period in 2014. Gain on the sale of investments decreased by $77 thousand for the six months ended June 30, 2015 as compared to the same period in 2014. Debit card interchange income increased $42 thousand or 10% as a result of increased servicer revenue during the six months of 2015. Service charges on deposits decreased $12 thousand from the same period in 2014 reflecting a decrease in overdraft fees based on volume.

Increases were recognized in gains on mortgage loans sold in the secondary market on a year over year basis as home purchase activity increased in a low interest environment.

Non-interest expenses increased $396 thousand, or 5%, for the six months ended June 30, 2015, compared to the same period in 2014. Professional fees increased $96 thousand, or 24%, as a one-time expense of $110 thousand was incurred during first quarter 2015 to contract a professional firm to assist the company with assessment of market opportunities and long-term strategic goals. Loan legal and collection fees were $86 thousand for the six month period ended June 30, 2015 as compared to a $67 thousand recognized for the six months ended June 30, 2014 as expense recoveries were recognized in 2014. Software expense increased $68 thousand for the six month period in 2015 as compared to the same period in 2014 reflecting the cost and amortization of the new core system that was installed in fourth quarter 2013. The Bank’s FDIC deposit premium increased $5 thousand to $182 thousand for the six months ended 2015 reflecting an increase in assets for the six months ended June 30, 2015 as compared to 2014. Salaries and employee benefits increased $245 thousand, or 6%, primarily the result of salary and medical benefit increases. Occupancy and equipment expense decreased $20 thousand, or 2%, reflecting a decrease in small equipment purchases and equipment lease expense when compared to 2014.

The provision for income taxes was $1.3 million (effective rate of 30%) for the six months ended June 30, 2015, compared to $1.3 million (effective rate of 30%) for the same period in 2014.

### CAPITAL RESOURCES

CSB maintained a strong capital position with tangible common equity to tangible assets of 8.69% at June 30, 2015 compared with 8.26% at June 30, 2014.

The Board of Governors of the Federal Reserve System (the “Federal Reserve”) adopted risk-based capital guidelines on July 2, 2013 for bank holding companies and state member banks, designed to improve the level and quality of capital. CSB became subject to the new capital and risk weighting rules on January 1, 2015 with its first reporting period on March 31, 2015. The quality of capital will be provided by the new measurement of Tier 1 capital called common equity tier 1 or (“CET1”). Effective with the March 31, 2015 Call Report the Bank selected the opt-out election for accumulated other comprehensive income (“AOCI”). This election will neutralize the effects of unrealized gains and losses from available-for-sale securities and other elements of the AOCI account for regulatory capital purposes.

Consistent with the Board of Director’s commitment to public confidence and safe and sound banking operations, capital targets and minimum risk-based capital ratios for CSB were established to maintain excess capital to well-capitalized standards. To be considered well-capitalized, an institution must have a total risk-based capital ratio of at least 10%, a tier 1 capital ratio of at least 8%, a leverage capital ratio of at least 5%, a CET1 ratio of at least 6.5%, and must not be subject to any order or directive requiring the institution to improve its capital level. An adequately capitalized institution has a total risk-based capital ratio of at least 8%, a tier 1 capital ratio of at least 6%, a CET1 ratio of at least 4.5% and a leverage ratio of at least 4%.

Failure to meet specified minimum capital requirements could result in regulatory actions by the Federal Reserve or Ohio Division of Financial Institutions that could have a material effect on the Company’s financial condition or results of operations. Management believes there were no material changes to capital resources as presented in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. As of June 30, 2015 the Company and the Bank met all capital adequacy requirements to which they were subject.

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

| CET1 | Capital Ratios June 30, 2015 | December 31, 2014 |
| --- | ---: | ---: |
| Consolidated | 12.5% | NA |
| Bank | 12.3% | NA |
| Tier 1 ratio |  |  |
| Consolidated | 12.5% | 12.5% |
| Bank | 12.3% | 12.3% |
| Total Capital |  |  |
| Consolidated | 13.6% | 13.6% |
| Bank | 13.4% | 13.4% |

### LIQUIDITY

*(Dollars in millions)*

|  | June 30, 2015 | December 31, 2014 | Change |
| --- | ---: | ---: | ---: |
| Cash and cash equivalents | $39 | $44 | $(5) |
| Unused lines of credit | 52 | 46 | 6 |
| Unpledged securities at fair market value | 48 | 48 | — |
|  | $139 | $138 | $1 |
| Net deposits and short-term liabilities | $490 | $497 | $(7) |
| Liquidity ratio | 28.5% | 27.9% | 0.6 |
| Minimum board approved liquidity ratio | 20.0% | 20.0% | — |

Liquidity refers to the Company’s ability to generate sufficient cash to fund current loan demand, meet deposit withdrawals, pay operating expenses and meet other obligations. Liquidity is monitored by the Company’s Asset Liability Committee. Other sources of liquidity include, but are not limited to, purchases of federal funds, advances from the FHLB, adjustments of interest rates to attract deposits, brokered deposits and borrowing at the Federal Reserve discount window. Management believes that its sources of liquidity are adequate to meet cash flow obligations for the foreseeable future.

The liquidity ratio was 28.5% and 27.9% at June 30, 2015 and December 31, 2014.

### OFF-BALANCE SHEET ARRANGEMENTS

The Company does not have any off-balance sheet arrangements (as such term is defined in applicable Securities and Exchange Commission (the “Commission”) rules) that are reasonably likely to have a current or future material effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

## Market risk

As filed, 1,815 characters.

There have been no material changes in the quantitative and qualitative disclosures about market risks as of June 30, 2015, from the disclosures presented in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014.

Management performs a quarterly analysis of the Company’s interest rate risk over a twenty-four month horizon. The analysis includes two balance sheet models, one based on a static balance sheet and one on a dynamic balance sheet with projected growth in assets and liabilities. All positions are currently within the Company’s board-approved policy.

The following table presents an analysis of the estimated sensitivity of the Company’s annual net interest income to sudden and sustained -100 through +400 basis point changes, in 100 basis point increments, in market interest rates at June 30, 2015 and December 31, 2014. The net interest income reflected is for the first twelve month period of the modeled twenty-four month horizon. The underlying balance sheet for illustrative purposes is dynamic with projected growth in assets and liabilities.

*June 30, 2015*

*(Dollars in thousands)*

| Change in Interest Rates (basis points) | Net Interest Income | Dollar Change | Percentage Change | Board Policy Limits |
| --- | ---: | ---: | ---: | --- |
| +400 | $21,871 | $1,252 | 6.1% | +/-25% |
| +300 | 21,525 | 906 | 4.4 | +/-15 |
| +200 | 21,161 | 542 | 2.6 | +/-10 |
| +100 | 20,839 | 220 | 1.1 | +/-5 |
| 0 | 20,619 | — | — |  |
| -100 | 20,354 | (265) | (1.3) | +/-5 |
| **December 31, 2014** |  |  |  |  |
| +400 | $21,408 | $1,144 | 5.6% | +/-25% |
| +300 | 21,082 | 818 | 4.0 | +/-15 |
| +200 | 20,766 | 502 | 2.5 | +/-10 |
| +100 | 20,454 | 190 | 0.9 | +/-5 |
| 0 | 20,264 | — | — |  |
| -100 | 20,022 | (242) | (1.1) | +/-5 |

34

CONTROLS AND PROCEDURES

## Controls and procedures

As filed, 1,842 characters.

With the participation of the Company’s management, including its Chief Executive Officer and Chief Financial Officer, the Company has evaluated the effectiveness of its disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based upon that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that:

(a) information required to be disclosed by the Company in this Quarterly Report on Form 10-Q would be accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure;

(b) information required to be disclosed by the Company in this Quarterly Report on Form 10-Q would be recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms; and

(c) the Company’s disclosure controls and procedures are effective as of the end of the period covered by this Quarterly Report on Form 10-Q to ensure that material information relating to the Company and its consolidated subsidiary is made known to them, particularly during the period for which the Company’s periodic reports, including this Quarterly Report on Form 10-Q, are being prepared.

### CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There were no changes during the period covered by this Quarterly Report on Form 10-Q in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

FORM 10-Q

Quarter ended June 30, 2015

## Risk factors

As filed, 175 characters.

There have been no material changes to the Company’s risk factors from those disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014.

Filed Aug 13, 2015.
Source: SEC EDGAR, the filing index for accession 0001193125-15-289872. Last ingested by Listed: Nov 2, 2026, 09:27 ET. No prices; not investment advice.