SEC Comment Letter for WGNB CORP (CIK 0001115568) — Nov 4, 2005
WGNB CORP (CIK 0001115568)
Date: Nov. 4, 2005 · CIK: 0001115568 · Accession: 0000000000-05-056248
AI Filing Summary & Sentiment
File numbers found in text: 000-30805
Referenced dates: September 26, 2005
Letter
November 4, 2005 By U.S. Mail and Facsimile to (770) 830-2969 Steven J. Haack Treasurer WGNB Corp. 201 Maple Street P.O. Box 280 Carrollton, Georgia 30117
Re: WGNB Corp. Form 10-K for Fiscal Year Ended December 31, 2004 Filed March 28, 2005 File No. 000-30805
Dear Mr. Haack:
We have reviewed your response filed with the Commission on October 7, 2005, and have the following additional comments. Please provide us with the requested information so we may better understand your disclosure. Please be as detailed as necessary in your explanation. After reviewing this information, we may raise additional comments.
Please understand that the purpose of our review process is to assist you in your compliance with the applicable disclosure requirements and to enhance the overall disclosure in your filing. We look forward to working with you in these respects. We welcome any questions you may have about our comment or any other aspect of our review. Feel free to call us at the telephone numbers listed at the end of this letter.
Summary of Significant Accounting Policies Derivative Instruments and Hedging Activities, page F-11 1. We note your response to comment 2 of our letter dated September 26, 2005. Your response did not fully address the items requested in our comment. You have asserted that your hedge of FHLB convertible advances was designed to remain effective throughout its term, but you have not clearly explained the method you use to assess effectiveness. As previously requested, please provide us with the following with respect to your hedges of FHLB convertible advances:
* Clearly identify whether you use the long-haul method, the short- cut method or matched terms to assess the effectiveness of this hedging strategy.
* Describe the methods used to assess effectiveness and measure hedge ineffectiveness.
* If you apply the short-cut method of assessing hedge effectiveness, tell us how you determined that this hedge met the conditions of paragraph 68 of SFAS 133 to qualify for such treatment.
2. It is our understanding, based on your disclosure on page F-16, that the FHLB advances which you are hedging with an interest rate swap contain an early conversion option that allows the FHLB to convert the advances to a variable interest rate. Please provide us with the following information with respect to this conversion feature:
* Clearly explain what will happen to your advance in the event the conversion option is exercised by the FHLB. For example, explain whether your advance automatically converts to a variable rate advance or whether you can prepay the advance without penalty.
* Tell us whether the interest rate swap contains a call option that allows you to terminate the swap upon exercise of the conversion option by the FHLB.
Please respond to these comments within 10 business days or tell us when you will provide us with a response. Please furnish a cover letter with your response indicating your intent to provide the requested disclosures in future filings. Please provide us drafts of your proposed revisions, where applicable, and any requested information. Detailed cover letters greatly facilitate our review. Please understand that we may have additional comments after reviewing your responses to our comments.
We urge all persons who are responsible for the accuracy and adequacy of the disclosure in the filing to be certain that the filing includes all information required under the Securities Exchange Act of 1934 and that they have provided all information investors require for an informed investment decision. Since the company and its management are in possession of all facts relating to a company`s disclosure, they are responsible for the accuracy and adequacy of the disclosures they have made.
You may contact Margaret Fitzgerald at (202) 551-3556 or me at (202) 551-3426 if you have questions regarding comments on the financial statements and related matters.
Sincerely,
Angela Connell
Senior Accountant
Show Raw Text
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Mail Stop 4561
November 4, 2005
By U.S. Mail and Facsimile to (770) 830-2969
Steven J. Haack
Treasurer
WGNB Corp.
201 Maple Street
P.O. Box 280
Carrollton, Georgia 30117
Re: WGNB Corp.
Form 10-K for Fiscal Year Ended December 31, 2004
Filed March 28, 2005
File No. 000-30805
Dear Mr. Haack:
We have reviewed your response filed with the Commission on
October 7, 2005, and have the following additional comments.
Please
provide us with the requested information so we may better
understand
your disclosure. Please be as detailed as necessary in your
explanation. After reviewing this information, we may raise
additional comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comment or any other aspect
of
our review. Feel free to call us at the telephone numbers listed
at
the end of this letter.
Summary of Significant Accounting Policies
Derivative Instruments and Hedging Activities, page F-11
1. We note your response to comment 2 of our letter dated
September
26, 2005. Your response did not fully address the items requested
in
our comment. You have asserted that your hedge of FHLB
convertible
advances was designed to remain effective throughout its term, but
you have not clearly explained the method you use to assess
effectiveness. As previously requested, please provide us with
the
following with respect to your hedges of FHLB convertible
advances:
* Clearly identify whether you use the long-haul method, the
short-
cut method or matched terms to assess the effectiveness of this
hedging strategy.
* Describe the methods used to assess effectiveness and measure
hedge
ineffectiveness.
* If you apply the short-cut method of assessing hedge
effectiveness,
tell us how you determined that this hedge met the conditions of
paragraph 68 of SFAS 133 to qualify for such treatment.
2. It is our understanding, based on your disclosure on page F-16,
that the FHLB advances which you are hedging with an interest rate
swap contain an early conversion option that allows the FHLB to
convert the advances to a variable interest rate. Please provide
us
with the following information with respect to this conversion
feature:
* Clearly explain what will happen to your advance in the event
the
conversion option is exercised by the FHLB. For example, explain
whether your advance automatically converts to a variable rate
advance or whether you can prepay the advance without penalty.
* Tell us whether the interest rate swap contains a call option
that
allows you to terminate the swap upon exercise of the conversion
option by the FHLB.
Please respond to these comments within 10 business days or
tell us when you will provide us with a response. Please furnish
a
cover letter with your response indicating your intent to provide
the
requested disclosures in future filings. Please provide us drafts
of
your proposed revisions, where applicable, and any requested
information. Detailed cover letters greatly facilitate our
review.
Please understand that we may have additional comments after
reviewing your responses to our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing to be certain that the
filing includes all information required under the Securities
Exchange Act of 1934 and that they have provided all information
investors require for an informed investment decision. Since the
company and its management are in possession of all facts relating
to
a company`s disclosure, they are responsible for the accuracy and
adequacy of the disclosures they have made.
You may contact Margaret Fitzgerald at (202) 551-3556 or me
at
(202) 551-3426 if you have questions regarding comments on the
financial statements and related matters.
Sincerely,
Angela Connell
Senior Accountant
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Steven J. Haack
WGNB Corp.
November 4, 2005
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