Virginia | 20-1417448 |
(State or other jurisdiction | (I.R.S. Employer Identification No.) |
of incorporation or organization) |
Large accelerated filer o | Accelerated filer x | Smaller reporting company o |
Non-accelerated filer o (Do not check if a smaller reporting company) |
PAGE
|
||||
PART 1 - FINANCIAL INFORMATION
|
||||
Item 1 -
|
Financial Statements
|
|||
Consolidated Balance Sheets as of June 30, 2013 and December 31,
2012 |
2
|
|||
Consolidated Statements of Comprehensive Income
for the three and six months ended June 30, 2013 and 2012 |
3
|
|||
Consolidated Statements of Changes in Stockholders’ Equity
for the six months ended June 30, 2013 |
4
|
|||
Consolidated Statements of Cash Flows for the six months ended
June 30, 2013 and 2012 |
5
|
|||
Notes to Consolidated Financial Statements
|
6- 27
|
|||
Item 2 -
|
Management’s Discussion and Analysis of
Financial Condition and Results of Operations |
28- 41
|
||
Item 3 – Quantitative and Qualitative Disclosures about Market Risk |
42-45
|
|||
Item 4 – Controls and Procedures |
46
|
|||
PART II - OTHER INFORMATION
|
||||
Item 1 – Legal Proceedings |
46
|
|||
Item 1A – Risk Factors |
46
|
|||
Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds |
46
|
|||
Item 3 – Defaults Upon Senior Securities |
46
|
|||
Item 4 – Mine Safety Disclosures |
46
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|||
Item 5 – Other Information |
46
|
|||
Item 6 - Exhibits |
47
|
|||
Signatures
|
48
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|||
Certifications
|
49-51
|
ITEM I - FINANCIAL INFORMATION
|
||||||||
PART I - FINANCIAL STATEMENTS
|
||||||||
SOUTHERN NATIONAL BANCORP OF VIRGINIA, INC.
|
||||||||
CONSOLIDATED BALANCE SHEETS
|
||||||||
(dollars in thousands, except per share amounts) (Unaudited)
|
||||||||
June 30,
|
December 31,
|
|||||||
2013
|
2012
|
|||||||
ASSETS
|
||||||||
Cash and cash equivalents:
|
||||||||
Cash and due from financial institutions
|
$ | 3,349 | $ | 4,553 | ||||
Interest-bearing deposits in other financial institutions
|
25,196 | 34,647 | ||||||
Total cash and cash equivalents
|
28,545 | 39,200 | ||||||
Securities available for sale, at fair value
|
2,034 | 2,391 | ||||||
Securities held to maturity, at amortized cost (fair value of $79,635 and $84,827, respectively)
|
83,354 | 84,051 | ||||||
Covered loans
|
59,819 | 71,328 | ||||||
Non-covered loans
|
464,465 | 458,823 | ||||||
Total loans
|
524,284 | 530,151 | ||||||
Less allowance for loan losses
|
(7,296 | ) | (7,066 | ) | ||||
Net loans | 516,988 | 523,085 | ||||||
Stock in Federal Reserve Bank and Federal Home Loan Bank
|
5,240 | 6,212 | ||||||
Bank premises and equipment, net
|
6,286 | 6,552 | ||||||
Goodwill
|
9,160 | 9,160 | ||||||
Core deposit intangibles, net
|
1,035 | 1,280 | ||||||
FDIC indemnification asset
|
6,308 | 6,735 | ||||||
Bank-owned life insurance
|
18,079 | 17,782 | ||||||
Other real estate owned
|
14,955 | 13,836 | ||||||
Deferred tax assets, net
|
8,262 | 8,174 | ||||||
Other assets
|
6,478 | 5,354 | ||||||
Total assets | $ | 706,724 | $ | 723,812 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Noninterest-bearing demand deposits
|
$ | 45,339 | $ | 49,644 | ||||
Interest-bearing deposits:
|
||||||||
NOW accounts
|
22,008 | 22,774 | ||||||
Money market accounts
|
146,461 | 163,233 | ||||||
Savings accounts
|
12,148 | 9,618 | ||||||
Time deposits
|
319,682 | 305,708 | ||||||
Total interest-bearing deposits
|
500,299 | 501,333 | ||||||
Total deposits
|
545,638 | 550,977 | ||||||
|
||||||||
Securities sold under agreements to repurchase and other short-term borrowings
|
20,530 | 33,411 | ||||||
Federal Home Loan Bank (FHLB) advances
|
30,250 | 30,250 | ||||||
Other liabilities
|
5,370 | 5,998 | ||||||
Total liabilities
|
601,788 | 620,636 | ||||||
Commitments and contingencies (See Note 5)
|
- | - | ||||||
Stockholders’ equity:
|
||||||||
Preferred stock, $.01 par value. Authorized 5,000,000 shares; no shares issued and outstanding
|
- | - | ||||||
Common stock, $.01 par value. Authorized 45,000,000 shares; issued and outstanding, 11,590,212 shares at June 30, 2013 and December 31, 2012
|
116 | 116 | ||||||
Additional paid in capital
|
96,966 | 96,840 | ||||||
Retained earnings
|
11,007 | 9,201 | ||||||
Accumulated other comprehensive loss
|
(3,153 | ) | (2,981 | ) | ||||
Total stockholders’ equity | 104,936 | 103,176 | ||||||
Total liabilities and stockholders’ equity
|
$ | 706,724 | $ | 723,812 | ||||
See accompanying notes to consolidated financial statements.
|
2 |
SOUTHERN NATIONAL BANCORP OF VIRGINIA, INC.
|
||||||||||||||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
|
||||||||||||||||
(dollars in thousands, except per share amounts) (Unaudited)
|
||||||||||||||||
For the Three Months Ended
|
For the Six Months Ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
2013
|
2012
|
2013
|
2012
|
|||||||||||||
Interest and dividend income:
|
||||||||||||||||
Interest and fees on loans
|
$ | 7,765 | $ | 8,768 | $ | 16,109 | $ | 17,379 | ||||||||
Interest and dividends on taxable securities
|
507 | 509 | 1,036 | 911 | ||||||||||||
Interest and dividends on tax exepmt securities
|
50 | - | 88 | - | ||||||||||||
Interest and dividends on other earning assets
|
227 | 84 | 339 | 145 | ||||||||||||
Total interest and dividend income
|
8,549 | 9,361 | 17,572 | 18,435 | ||||||||||||
Interest expense:
|
||||||||||||||||
Interest on deposits
|
1,020 | 1,301 | 2,120 | 2,499 | ||||||||||||
Interest on borrowings
|
155 | 227 | 308 | 463 | ||||||||||||
Total interest expense
|
1,175 | 1,528 | 2,428 | 2,962 | ||||||||||||
Net interest income
|
7,374 | 7,833 | 15,144 | 15,473 | ||||||||||||
Provision for loan losses
|
725 | 1,325 | 1,818 | 2,775 | ||||||||||||
Net interest income after provision for loan losses
|
6,649 | 6,508 | 13,326 | 12,698 | ||||||||||||
Noninterest income:
|
||||||||||||||||
Account maintenance and deposit service fees
|
203 | 206 | 396 | 402 | ||||||||||||
Income from bank-owned life insurance
|
148 | 347 | 297 | 500 | ||||||||||||
Bargain purchase gain on acquisition
|
- | 3,484 | - | 3,484 | ||||||||||||
Gain on sale of loans
|
- | - | - | 657 | ||||||||||||
Gain on other assets
|
13 | - | 13 | 14 | ||||||||||||
Net gain (loss) on sale of available for sale securities
|
- | (13 | ) | 142 | (13 | ) | ||||||||||
Total other-than-temporary impairment losses (OTTI)
|
- | (235 | ) | (3 | ) | (241 | ) | |||||||||
Portion of OTTI recognized in other comprehensive income (before taxes)
|
- | - | - | 4 | ||||||||||||
Net credit related OTTI recognized in earnings
|
- | (235 | ) | (3 | ) | (237 | ) | |||||||||
Other
|
84 | 81 | 139 | 135 | ||||||||||||
Total noninterest income
|
448 | 3,870 | 984 | 4,942 | ||||||||||||
Noninterest expenses:
|
||||||||||||||||
Salaries and benefits
|
2,176 | 1,970 | 4,422 | 3,795 | ||||||||||||
Occupancy expenses
|
753 | 705 | 1,513 | 1,287 | ||||||||||||
Furniture and equipment expenses
|
171 | 143 | 327 | 299 | ||||||||||||
Amortization of core deposit intangible
|
123 | 228 | 246 | 458 | ||||||||||||
Virginia franchise tax expense
|
115 | 145 | 242 | 291 | ||||||||||||
Merger expenses
|
- | 349 | - | 349 | ||||||||||||
FDIC assessment
|
224 | 142 | 458 | 271 | ||||||||||||
Data processing expense
|
154 | 162 | 302 | 299 | ||||||||||||
Telephone and communication expense
|
163 | 133 | 341 | 235 | ||||||||||||
Change in FDIC indemnification asset
|
107 | 253 | 237 | 239 | ||||||||||||
Net loss on other real estate owned
|
62 | 2,201 | 118 | 2,400 | ||||||||||||
Other operating expenses
|
750 | 732 | 1,543 | 1,752 | ||||||||||||
Total noninterest expenses
|
4,798 | 7,163 | 9,749 | 11,675 | ||||||||||||
Income before income taxes
|
2,299 | 3,215 | 4,561 | 5,965 | ||||||||||||
Income tax expense
|
744 | 1,000 | 1,480 | 1,907 | ||||||||||||
Net income
|
$ | 1,555 | $ | 2,215 | $ | 3,081 | $ | 4,058 | ||||||||
Other comprehensive income (loss):
|
||||||||||||||||
Unrealized gain (loss) on available for sale securities
|
$ | (194 | ) | $ | 65 | $ | (195 | ) | $ | 94 | ||||||
Realized amount on securities sold, net
|
- | - | (142 | ) | - | |||||||||||
Non-credit component of other-than-temporary impairment on held-to-maturity securities
|
- | 205 | 97 | 201 | ||||||||||||
Accretion of amounts previously recorded upon transfer to held-to-maturity from available-for-sale
|
(12 | ) | (28 | ) | (20 | ) | (60 | ) | ||||||||
Net unrealized gain (loss)
|
(206 | ) | 242 | (260 | ) | 235 | ||||||||||
Tax effect
|
70 | (82 | ) | 88 | (80 | ) | ||||||||||
Other comprehensive income (loss)
|
(136 | ) | 160 | (172 | ) | 155 | ||||||||||
Comprehensive income
|
$ | 1,419 | $ | 2,375 | $ | 2,909 | $ | 4,213 | ||||||||
Earnings per share, basic and diluted
|
$ | 0.13 | $ | 0.19 | $ | 0.27 | $ | 0.35 | ||||||||
See accompanying notes to consolidated financial statements.
|
3 |
SOUTHERN NATIONAL BANCORP OF VIRGINIA, INC.
|
||||||||||||||||||||
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
|
||||||||||||||||||||
FOR THE SIX MONTHS ENDED JUNE 30, 2013
|
||||||||||||||||||||
(dollars in thousands, except per share amounts) (Unaudited)
|
||||||||||||||||||||
Accumulated
|
||||||||||||||||||||
Additional
|
Other
|
|||||||||||||||||||
Common
|
Paid in
|
Retained
|
Comprehensive
|
|||||||||||||||||
Stock
|
Capital
|
Earnings
|
Loss
|
Total
|
||||||||||||||||
Balance - January 1, 2013
|
$ | 116 | $ | 96,840 | $ | 9,201 | $ | (2,981 | ) | $ | 103,176 | |||||||||
Comprehensive income:
|
||||||||||||||||||||
Net income
|
3,081 | 3,081 | ||||||||||||||||||
Change in unrealized loss on securities available for sale (net of tax benefit, $115)
|
(222 | ) | (222 | ) | ||||||||||||||||
Change in unrecognized loss on securities held to maturity for which a portion of OTTI has been recognized (net of tax, $27 and accretion, $20 and amounts recorded into other comprehensive income at transfer)
|
50 | 50 | ||||||||||||||||||
Dividends on common stock ($.11 per share)
|
(1,275 | ) | (1,275 | ) | ||||||||||||||||
Stock-based compensation expense
|
126 | 126 | ||||||||||||||||||
Balance - June 30, 2013
|
$ | 116 | $ | 96,966 | $ | 11,007 | $ | (3,153 | ) | $ | 104,936 | |||||||||
See accompanying notes to consolidated financial statements.
|
4 |
SOUTHERN NATIONAL BANCORP OF VIRGINIA, INC.
|
||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
||||||||
FOR THE SIX MONTHS ENDED JUNE 30, 2013 AND 2012
|
||||||||
(dollars in thousands) (Unaudited)
|
||||||||
2013
|
2012
|
|||||||
Operating activities:
|
||||||||
Net income
|
$ | 3,081 | $ | 4,058 | ||||
Adjustments to reconcile net income to net cash and
|
||||||||
cash equivalents provided by operating activities:
|
||||||||
Depreciation
|
329 | 289 | ||||||
Amortization of core deposit intangible
|
246 | 458 | ||||||
Other amortization, net
|
200 | 114 | ||||||
Accretion of loan discount
|
(1,577 | ) | (2,360 | ) | ||||
Amortization of FDIC indemnification asset
|
237 | 239 | ||||||
Provision for loan losses
|
1,818 | 2,775 | ||||||
Earnings on bank-owned life insurance
|
(297 | ) | (500 | ) | ||||
Stock based compensation expense
|
126 | 97 | ||||||
Bargain purchase gain on acquisition
|
- | (3,484 | ) | |||||
Net (gain) loss on sale of available for sale securities
|
(142 | ) | 13 | |||||
Gain on sale of loans
|
- | (657 | ) | |||||
Impairment on securities
|
3 | 237 | ||||||
Net loss on other real estate owned
|
118 | 2,400 | ||||||
Net decrease in other assets
|
621 | 204 | ||||||
Net increase (decrease) in other liabilities
|
(628 | ) | 72 | |||||
Net cash and cash equivalents provided by operating activities
|
4,135 | 3,955 | ||||||
Investing activities:
|
||||||||
Purchases of available for sale securities
|
- | (3,128 | ) | |||||
Proceeds from sales of available for sale securities
|
159 | 14,414 | ||||||
Proceeds from paydowns, maturities and calls of available for sale securities
|
- | 946 | ||||||
Purchases of held to maturity securities
|
(11,345 | ) | (5,000 | ) | ||||
Proceeds from paydowns, maturities and calls of held to maturity securities
|
12,014 | 5,375 | ||||||
Loan originations and payments, net
|
220 | 3,020 | ||||||
Proceeds from sale of HarVest loans
|
- | 7,568 | ||||||
Proceeds from sale of SBA loans
|
- | 5,713 | ||||||
Net cash received in HarVest acquisition
|
- | 47,257 | ||||||
Net decrease in stock in Federal Reserve Bank and Federal Home Loan Bank
|
972 | 1,790 | ||||||
Proceeds from cash surrender value of bank-owned life insurance
|
- | 395 | ||||||
Payments received on FDIC indemnification asset
|
171 | 89 | ||||||
Proceeds from sale of other real estate owned
|
2,578 | 1,107 | ||||||
Purchases of bank premises and equipment
|
(64 | ) | (72 | ) | ||||
Net cash and cash equivalents provided by investing activities
|
4,705 | 79,474 | ||||||
Financing activities:
|
||||||||
Net decrease in deposits
|
(5,339 | ) | (57,577 | ) | ||||
Cash dividends paid - common stock
|
(1,275 | ) | (349 | ) | ||||
Repayment of Federal Home Loan Bank advances
|
- | (16,488 | ) | |||||
Net increase (decrease) in securities sold under agreement to repurchase and other short-term borrowings
|
(12,881 | ) | 13,293 | |||||
Net cash and cash equivalents used in financing activities
|
(19,495 | ) | (61,121 | ) | ||||
Increase (decrease) in cash and cash equivalents
|
(10,655 | ) | 22,308 | |||||
Cash and cash equivalents at beginning of period
|
39,200 | 5,035 | ||||||
Cash and cash equivalents at end of period
|
$ | 28,545 | $ | 27,343 | ||||
Supplemental disclosure of cash flow information
|
||||||||
Cash payments for:
|
||||||||
Interest
|
$ | 2,326 | $ | 2,985 | ||||
Income taxes
|
2,238 | 1,200 | ||||||
Supplemental schedule of noncash investing and financing activities
|
||||||||
Transfer from non-covered loans to other real estate owned
|
1,605 | 1,959 | ||||||
Transfer from covered loans to other real estate owned
|
4,031 | - | ||||||
See accompanying notes to consolidated financial statements.
|
5 |
6 |
Expected life
|
10 years
|
|||
Expected volatility
|
34.21 | % | ||
Risk-free interest rate
|
2.42 | % | ||
Weighted average fair value per option granted
|
$ | 3.58 | ||
Dividend yield
|
1.29 | % |
7 |
Weighted
|
||||||||||||||||
Weighted
|
Average
|
|||||||||||||||
Average
|
Remaining
|
Aggregate
|
||||||||||||||
Exercise
|
Contractual
|
Intrinsic
|
||||||||||||||
Shares
|
Price
|
Term
|
Value
|
|||||||||||||
Options outstanding, beginning of period
|
512,825 | $ | 7.98 | |||||||||||||
Granted
|
120,250 | 9.18 | ||||||||||||||
Forfeited
|
- | - | ||||||||||||||
Exercised
|
- | - | ||||||||||||||
Options outstanding, end of period
|
633,075 | $ | 8.21 | 6.5 | $ | 1,011 | ||||||||||
Vested or expected to vest
|
633,075 | $ | 8.21 | 6.5 | $ | 1,011 | ||||||||||
Exercisable at end of period
|
304,775 | $ | 8.35 | 4.0 | $ | 451 |
Amortized
|
Gross Unrealized
|
Fair
|
||||||||||||||
June 30, 2013
|
Cost
|
Gains
|
Losses
|
Value
|
||||||||||||
Obligations of states and political subdivisions
|
$ | 2,305 | $ | - | $ | (271 | ) | $ | 2,034 | |||||||
Amortized
|
Gross Unrealized
|
Fair
|
||||||||||||||
December 31, 2012
|
Cost
|
Gains
|
Losses
|
Value
|
||||||||||||
Obligations of states and political subdivisions
|
$ | 2,309 | $ | 2 | $ | (22 | ) | $ | 2,289 | |||||||
FHLMC preferred stock
|
16 | 86 | - | 102 | ||||||||||||
Total
|
$ | 2,325 | $ | 88 | $ | (22 | ) | $ | 2,391 |
Amortized
|
Gross Unrecognized
|
Fair
|
||||||||||||||
June 30, 2013
|
Cost
|
Gains
|
Losses
|
Value
|
||||||||||||
Residential government-sponsored mortgage-backed securities
|
$ | 29,029 | $ | 769 | $ | (206 | ) | $ | 29,592 | |||||||
Residential government-sponsored collateralized mortgage obligations
|
4,844 | 5 | (233 | ) | 4,616 | |||||||||||
Government-sponsored agency securities
|
29,969 | - | (2,084 | ) | 27,885 | |||||||||||
Obligations of states and political subdivisions
|
11,012 | - | (883 | ) | 10,129 | |||||||||||
Other residential collateralized mortgage obligations
|
741 | 27 | 768 | |||||||||||||
Trust preferred securities
|
7,759 | 1,071 | (2,185 | ) | 6,645 | |||||||||||
$ | 83,354 | $ | 1,872 | $ | (5,591 | ) | $ | 79,635 |
Amortized
|
Gross Unrecognized
|
Fair
|
||||||||||||||
December 31, 2012
|
Cost
|
Gains
|
Losses
|
Value
|
||||||||||||
Residential government-sponsored mortgage-backed securities
|
$ | 35,375 | $ | 1,559 | $ | - | $ | 36,934 | ||||||||
Residential government-sponsored collateralized mortgage obligations
|
5,444 | 81 | - | 5,525 | ||||||||||||
Government-sponsored agency securities
|
29,983 | 52 | (4 | ) | 30,031 | |||||||||||
Obligations of states and political subdivisions
|
4,689 | 1 | (69 | ) | 4,621 | |||||||||||
Other residential collateralized mortgage obligations
|
817 | - | (24 | ) | 793 | |||||||||||
Trust preferred securities
|
7,743 | 1,422 | (2,242 | ) | 6,923 | |||||||||||
$ | 84,051 | $ | 3,115 | $ | (2,339 | ) | $ | 84,827 |
8 |
Held to Maturity
|
Available for Sale
|
|||||||||||||||
Amortized
|
Amortized
|
|||||||||||||||
Cost
|
Fair Value
|
Cost
|
Fair Value
|
|||||||||||||
Due in five to ten years
|
$ | 4,257 | $ | 4,015 | $ | - | $ | - | ||||||||
Due after ten years
|
44,483 | 40,644 | 2,305 | 2,034 | ||||||||||||
Residential government-sponsored mortgage-backed securities
|
29,029 | 29,592 | - | - | ||||||||||||
Residential government-sponsored collateralized mortgage obligations
|
4,844 | 4,616 | - | - | ||||||||||||
Other residential collateralized mortgage obligations
|
741 | 768 | - | - | ||||||||||||
Total
|
$ | 83,354 | $ | 79,635 | $ | 2,305 | $ | 2,034 |
9 |
June 30, 2013
|
||||||||||||||||||||||||
Less than 12 months
|
12 Months or More
|
Total
|
||||||||||||||||||||||
Available for Sale
|
Fair value
|
Unrealized
Losses |
Fair value
|
Unrealized
Losses |
Fair value
|
Unrealized
Losses |
||||||||||||||||||
Obligations of states and political subdivisions
|
$ | 2,034 | $ | (271 | ) | $ | - | $ | - | $ | 2,034 | $ | (271 | ) | ||||||||||
Less than 12 months
|
12 Months or More
|
Total
|
||||||||||||||||||||||
Held to Maturity
|
Fair value
|
Unrecognized
Losses |
Fair value
|
Unrecognized
Losses |
Fair value
|
Unrecognized
Losses |
||||||||||||||||||
Residential government-sponsored mortgage-backed securities
|
$ | 15,439 | $ | (206 | ) | $ | - | $ | - | $ | 15,439 | $ | (206 | ) | ||||||||||
Residential government-sponsored collateralized mortgage obligations
|
3,337 | (233 | ) | - | - | 3,337 | (233 | ) | ||||||||||||||||
Government-sponsored agency securities
|
27,885 | (2,084 | ) | - | - | 27,885 | (2,084 | ) | ||||||||||||||||
Obligations of states and political subdivisions
|
10,129 | (883 | ) | $ | 10,129 | $ | (883 | ) | ||||||||||||||||
Trust preferred securities
|
- | - | 4,352 | (2,185 | ) | 4,352 | (2,185 | ) | ||||||||||||||||
$ | 56,790 | $ | (3,406 | ) | $ | 4,352 | $ | (2,185 | ) | $ | 61,142 | $ | (5,591 | ) | ||||||||||
December 31, 2012
|
||||||||||||||||||||||||
Less than 12 months
|
12 Months or More
|
Total
|
||||||||||||||||||||||
Available for Sale
|
Fair value
|
Unrealized
Losses |
Fair value
|
Unrealized
Losses |
Fair value
|
Unrealized
Losses |
||||||||||||||||||
Obligations of states and political subdivisions
|
$ | 1,552 | $ | (22 | ) | $ | - | $ | - | $ | 1,552 | $ | (22 | ) |
Less than 12 months
|
12 Months or More
|
Total
|
||||||||||||||||||||||
Held to Maturity
|
Fair value
|
Unrecognized
Losses |
Fair value
|
Unrecognized
Losses |
Fair value
|
Unrecognized
Losses |
||||||||||||||||||
Obligations of states and political subdivisions
|
$ | 4,189 | $ | (69 | ) | $ | - | $ | - | $ | 4,189 | $ | (69 | ) | ||||||||||
Government-sponsored agency securities
|
4,996 | (4 | ) | - | - | 4,996 | (4 | ) | ||||||||||||||||
Other residential collateralized mortgage obligations
|
793 | (24 | ) | - | - | 793 | (24 | ) | ||||||||||||||||
Trust preferred securities
|
- | - | 4,849 | (2,242 | ) | 4,849 | (2,242 | ) | ||||||||||||||||
$ | 9,978 | $ | (97 | ) | $ | 4,849 | $ | (2,242 | ) | $ | 14,827 | $ | (2,339 | ) |
Previously
|
||||||||||||||||||||||||||||||||||||
% of Current
|
Recognized
|
|||||||||||||||||||||||||||||||||||
Defaults and
|
Cumulative
|
|||||||||||||||||||||||||||||||||||
Ratings
|
Estimated
|
Deferrals to
|
Other
|
|||||||||||||||||||||||||||||||||
Tranche
|
When Purchased
|
Current Ratings
|
Fair
|
Total
|
Comprehensive
|
|||||||||||||||||||||||||||||||
Security
|
Level
|
Moody’s
|
Fitch
|
Moody’s
|
Fitch
|
Par Value
|
Book Value
|
Value
|
Collateral
|
Loss (1)
|
||||||||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||||||||||||||
ALESCO VII A1B
|
Senior
|
Aaa
|
AAA
|
Baa3
|
BB
|
$ | 6,777 | $ | 6,124 | $ | 4,097 | 24 | % | $ | 281 | |||||||||||||||||||||
MMCF III B
|
Senior Sub
|
A3 | A- |
Ba1
|
CC
|
421 | 413 | 255 | 30 | % | 8 | |||||||||||||||||||||||||
7,198 | 6,537 | 4,352 | $ | 289 | ||||||||||||||||||||||||||||||||
Cumulative Other
|
Cumulative
|
|||||||||||||||||||||||||||||||||||
Comprehensive
|
OTTI Related to
|
|||||||||||||||||||||||||||||||||||
Other Than Temporarily Impaired:
|
Loss (2)
|
Credit Loss (2)
|
||||||||||||||||||||||||||||||||||
TPREF FUNDING II
|
Mezzanine
|
A1 | A- |
Caa3
|
C | 1,500 | 515 | 520 | 44 | % | 626 | $ | 359 | |||||||||||||||||||||||
TRAP 2007-XII C1
|
Mezzanine
|
A3 | A | C | C | 2,132 | 56 | 140 | 39 | % | 783 | 1,293 | ||||||||||||||||||||||||
TRAP 2007-XIII D
|
Mezzanine
|
NR
|
A- |
NR
|
C | 2,039 | - | 103 | 29 | % | 7 | 2,032 | ||||||||||||||||||||||||
MMC FUNDING XVIII
|
Mezzanine
|
A3 | A- |
Ca
|
C | 1,081 | 27 | 254 | 30 | % | 363 | 691 | ||||||||||||||||||||||||
ALESCO V C1
|
Mezzanine
|
A2 | A | C | C | 2,150 | 475 | 548 | 23 | % | 1,014 | 661 | ||||||||||||||||||||||||
ALESCO XV C1
|
Mezzanine
|
A3 | A- | C | C | 3,210 | 30 | 152 | 35 | % | 621 | 2,559 | ||||||||||||||||||||||||
ALESCO XVI C
|
Mezzanine
|
A3 | A- | C | C | 2,136 | 119 | 576 | 16 | % | 837 | 1,180 | ||||||||||||||||||||||||
14,248 | 1,222 | 2,293 | $ | 4,251 | $ | 8,775 | ||||||||||||||||||||||||||||||
Total
|
$ | 21,446 | $ | 7,759 | $ | 6,645 |
|
●
|
.5% of the remaining performing collateral will default or defer per annum.
|
10 |
|
●
|
Recoveries ranging from 25% to 46% with a two year lag on all defaults and deferrals.
|
|
●
|
No prepayments for 10 years and then 1% per annum for the remaining life of the security.
|
|
●
|
Additionally banks with assets over $15 billion will no longer be allowed to count down streamed trust preferred proceeds as Tier 1 capital (although it will still be counted as Tier 2 capital). That will incent the large banks to prepay their trust preferred securities if they can or if it is economically desirable. As a consequence, we have projected in all of our pools that 25% of the collateral issued by banks with assets over $15 billion will prepay in 2013.
|
|
●
|
Our securities have been modeled using the above assumptions by independent third parties using the forward LIBOR curve to discount projected cash flows to present values.
|
2013
|
2012
|
|||||||
|
||||||||
Amount of cumulative other-than-temporary impairment related to credit loss prior to January 1
|
$ | 8,964 | $ | 8,277 | ||||
Amounts related to credit loss for which an other-than-temporary impairment was not previously recognized
|
- | - | ||||||
Amounts related to credit loss for which an other-than-temporary impairment was previously recognized
|
3 | 237 | ||||||
Reductions due to realized losses
|
(32 | ) | (89 | ) | ||||
Amount of cumulative other-than-temporary impairment related to credit loss as of June 30
|
$ | 8,935 | $ | 8,425 |
11 |
Unrealized Holding
|
||||||||||||
Gains (Losses) on
|
||||||||||||
For the three months ended June 30, 2013
|
Available for Sale
|
Held to Maturity
|
||||||||||
Securities
|
Securities
|
Total
|
||||||||||
Beginning balance
|
$ | (50 | ) | $ | (2,967 | ) | $ | (3,017 | ) | |||
Other comprehensive income/(loss) before reclassifications
|
(128 | ) | (8 | ) | (136 | ) | ||||||
Amounts reclassified from accumulated other comprehensive income/(loss)
|
- | - | - | |||||||||
Net current-period other comprehensive income/(loss)
|
(128 | ) | (8 | ) | (136 | ) | ||||||
Ending balance
|
$ | (178 | ) | $ | (2,975 | ) | $ | (3,153 | ) | |||
Unrealized Holding
|
||||||||||||
Gains (Losses) on
|
||||||||||||
For the six months ended June 30, 2013
|
Available for Sale
|
Held to Maturity
|
||||||||||
Securities
|
Securities
|
Total
|
||||||||||
Beginning balance
|
$ | 44 | $ | (3,025 | ) | $ | (2,981 | ) | ||||
Other comprehensive income/(loss) before reclassifications
|
(129 | ) | 52 | (77 | ) | |||||||
Amounts reclassified from accumulated other comprehensive income/(loss)
|
(93 | ) | (2 | ) | (95 | ) | ||||||
Net current-period other comprehensive income/(loss)
|
(222 | ) | 50 | (172 | ) | |||||||
Ending balance
|
$ | (178 | ) | $ | (2,975 | ) | $ | (3,153 | ) |
Covered
|
Non-covered
|
Total
|
Covered
|
Non-covered
|
Total
|
|||||||||||||||||||
Loans (1)
|
Loans
|
Loans
|
Loans (1)
|
Loans
|
Loans
|
|||||||||||||||||||
June 30, 2013
|
December 31, 2012
|
|||||||||||||||||||||||
Loans secured by real estate:
|
||||||||||||||||||||||||
Commercial real estate - owner-occupied
|
$ | 3,662 | $ | 93,837 | $ | 97,499 | $ | 4,143 | $ | 93,288 | $ | 97,431 | ||||||||||||
Commercial real estate - non-owner-occupied
|
6,028 | 140,929 | 146,957 | 10,246 | 130,152 | 140,398 | ||||||||||||||||||
Secured by farmland
|
103 | 517 | 620 | - | 1,479 | 1,479 | ||||||||||||||||||
Construction and land loans
|
52 | 31,076 | 31,128 | 1,261 | 44,946 | 46,207 | ||||||||||||||||||
Residential 1-4 family
|
19,067 | 62,544 | 81,611 | 21,005 | 61,319 | 82,324 | ||||||||||||||||||
Multi- family residential
|
598 | 21,924 | 22,522 | 614 | 18,774 | 19,388 | ||||||||||||||||||
Home equity lines of credit
|
28,954 | 7,776 | 36,730 | 31,292 | 9,178 | 40,470 | ||||||||||||||||||
Total real estate loans
|
58,464 | 358,603 | 417,067 | 68,561 | 359,136 | 427,697 | ||||||||||||||||||
Commercial loans
|
1,261 | 105,752 | 107,013 | 2,672 | 99,081 | 101,753 | ||||||||||||||||||
Consumer loans
|
87 | 1,338 | 1,425 | 88 | 1,623 | 1,711 | ||||||||||||||||||
Gross loans
|
59,812 | 465,693 | 525,505 | 71,321 | 459,840 | 531,161 | ||||||||||||||||||
Less deferred fees on loans
|
7 | (1,228 | ) | (1,221 | ) | 7 | (1,017 | ) | (1,010 | ) | ||||||||||||||
Loans, net of deferred fees
|
$ | 59,819 | $ | 464,465 | $ | 524,284 | $ | 71,328 | $ | 458,823 | $ | 530,151 | ||||||||||||
(1) Covered Loans were acquired in the Greater Atlantic transaction and are covered under an FDIC loss-share agreement.
|
12 |
June 30, 2013
|
Covered Loans
|
Non-covered Loans
|
Total Loans
|
|||||||||||||||||||||||||||||||||
Unpaid
|
Unpaid
|
Unpaid
|
||||||||||||||||||||||||||||||||||
Recorded
|
Principal
|
Related
|
Recorded
|
Principal
|
Related
|
Recorded
|
Principal
|
Related
|
||||||||||||||||||||||||||||
Investment
|
Balance
|
Allowance
|
Investment (1)
|
Balance
|
Allowance
|
Investment
|
Balance
|
Allowance
|
||||||||||||||||||||||||||||
With no related allowance recorded
|
||||||||||||||||||||||||||||||||||||
Commercial real estate - owner occupied
|
$ | 136 | $ | 231 | $ | - | $ | 7,605 | $ | 7,605 | $ | - | $ | 7,741 | $ | 7,836 | $ | - | ||||||||||||||||||
Commercial real estate - non-owner occupied (2)
|
1,461 | 2,315 | - | 1,061 | 1,154 | - | 2,522 | 3,469 | - | |||||||||||||||||||||||||||
Construction and land development
|
- | - | - | 3,582 | 3,582 | - | 3,582 | 3,582 | - | |||||||||||||||||||||||||||
Commercial loans
|
45 | 75 | - | 2,723 | 2,860 | - | 2,768 | 2,935 | - | |||||||||||||||||||||||||||
Residential 1-4 family
|
1,790 | 2,176 | - | 3,638 | 3,638 | - | 5,428 | 5,814 | - | |||||||||||||||||||||||||||
Other consumer loans
|
- | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Total
|
$ | 3,432 | $ | 4,797 | $ | - | $ | 18,609 | $ | 18,839 | $ | - | $ | 22,041 | $ | 23,636 | $ | - | ||||||||||||||||||
With an allowance recorded
|
||||||||||||||||||||||||||||||||||||
Commercial real estate - owner occupied
|
$ | - | $ | - | $ | - | $ | 120 | $ | 120 | $ | 120 | $ | 120 | $ | 120 | $ | 120 | ||||||||||||||||||
Commercial real estate - non-owner occupied (2)
|
- | - | - | 970 | 970 | 61 | 970 | 970 | 61 | |||||||||||||||||||||||||||
Construction and land development
|
- | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Commercial loans
|
- | - | - | 2,491 | 2,491 | 450 | 2,491 | 2,491 | 450 | |||||||||||||||||||||||||||
Residential 1-4 family
|
- | - | - | 5,335 | 5,335 | 440 | 5,335 | 5,335 | 440 | |||||||||||||||||||||||||||
Other consumer loans
|
- | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Total
|
$ | - | $ | - | $ | - | $ | 8,916 | $ | 8,916 | $ | 1,071 | $ | 8,916 | $ | 8,916 | $ | 1,071 | ||||||||||||||||||
Grand total
|
$ | 3,432 | $ | 4,797 | $ | - | $ | 27,525 | $ | 27,755 | $ | 1,071 | $ | 30,957 | $ | 32,552 | $ | 1,071 |
(1) Recorded investment is after cumulative prior charge offs of $3.2 million. These loans also have aggregate SBA guarantees of $1.6 million.
|
(2) Includes loans secured by farmland and multi-family residential loans.
|
(3) The Bank recognizes loan impairment and may concurrently record a charge off to the allowance for loan losses.
|
December 31, 2012
|
Covered Loans
|
Non-covered Loans
|
Total Loans
|
|||||||||||||||||||||||||||||||||
Unpaid
|
Unpaid
|
Unpaid
|
||||||||||||||||||||||||||||||||||
Recorded
|
Principal
|
Related
|
Recorded
|
Principal
|
Related
|
Recorded
|
Principal
|
Related
|
||||||||||||||||||||||||||||
Investment
|
Balance
|
Allowance
|
Investment (1)
|
Balance
|
Allowance
|
Investment
|
Balance
|
Allowance
|
||||||||||||||||||||||||||||
With no related allowance recorded
|
||||||||||||||||||||||||||||||||||||
Commercial real estate - owner occupied
|
$ | 138 | $ | 234 | $ | - | $ | 3,318 | $ | 3,357 | $ | - | $ | 3,456 | $ | 3,591 | $ | - | ||||||||||||||||||
Commercial real estate - non-owner occupied (2)
|
2,114 | 3,543 | - | 1,705 | 1,802 | - | 3,819 | 5,345 | - | |||||||||||||||||||||||||||
Construction and land development
|
1,108 | 1,852 | - | 2,981 | 2,981 | - | 4,089 | 4,833 | - | |||||||||||||||||||||||||||
Commercial loans
|
212 | 359 | - | 5,212 | 5,349 | - | 5,424 | 5,708 | - | |||||||||||||||||||||||||||
Residential 1-4 family
|
1,555 | 1,805 | - | 3,368 | 3,471 | - | 4,923 | 5,276 | - | |||||||||||||||||||||||||||
Other consumer loans
|
- | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||
Total
|
$ | 5,127 | $ | 7,793 | $ | - | $ | 16,584 | $ | 16,960 | $ | - | $ | 21,711 | $ | 24,753 | $ | - | ||||||||||||||||||
With an allowance recorded
|
||||||||||||||||||||||||||||||||||||
Commercial real estate - owner occupied
|
$ | - | $ | - | $ | - | $ | 137 | $ | 137 | $ | 137 | $ | 137 | $ | 137 | $ | 137 | ||||||||||||||||||
Commercial real estate - non-owner occupied (2)
|
- | - | - | 1,177 | 1,177 | 260 | 1,177 | 1,177 | 260 | |||||||||||||||||||||||||||
Construction and land development
|
- | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||
Commercial loans
|
- | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||
Residential 1-4 family
|
- | - | - | 5,791 | 5,791 | 440 | 5,791 | 5,791 | 440 | |||||||||||||||||||||||||||
Other consumer loans
|
- | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Total
|
$ | - | $ | - | $ | - | $ | 7,105 | $ | 7,105 | $ | 837 | $ | 7,105 | $ | 7,105 | $ | 837 | ||||||||||||||||||
Grand total
|
$ | 5,127 | $ | 7,793 | $ | - | $ | 23,689 | $ | 24,065 | $ | 837 | $ | 28,816 | $ | 31,858 | $ | 837 |
(1) Recorded investment is after cumulative prior charge offs of $4.7 million. These loans also have aggregate SBA guarantees of $2.6 million.
|
(2) Includes loans secured by farmland and multi-family residential loans.
|
(3) The Bank recognizes loan impairment and may concurrently record a charge off to the allowance for loan losses.
|
13 |
Three months ended June 30, 2013
|
||||||||||||||||||||||||
Covered Loans
|
Non-covered Loans
|
Total Loans
|
||||||||||||||||||||||
Average
|
Interest
|
Average
|
Interest
|
Average
|
Interest
|
|||||||||||||||||||
Recorded
|
Income
|
Recorded
|
Income
|
Recorded
|
Income
|
|||||||||||||||||||
Investment
|
Recognized
|
Investment
|
Recognized
|
Investment
|
Recognized
|
|||||||||||||||||||
With no related allowance recorded
|
||||||||||||||||||||||||
Commercial real estate - owner occupied
|
$ | 137 | $ | 4 | $ | 7,625 | $ | 131 | $ | 7,762 | $ | 135 | ||||||||||||
Commercial real estate - non-owner occupied (2)
|
1,463 | 30 | 963 | 21 | 2,426 | 51 | ||||||||||||||||||
Construction and land development
|
- | - | 2,044 | - | 2,044 | - | ||||||||||||||||||
Commercial loans
|
45 | 1 | 2,165 | 8 | 2,210 | 9 | ||||||||||||||||||
Residential 1-4 family
|
1,789 | 15 | 3,462 | 33 | 5,251 | 48 | ||||||||||||||||||
Other consumer loans
|
- | - | - | - | - | - | ||||||||||||||||||
Total
|
$ | 3,434 | $ | 50 | $ | 16,259 | $ | 193 | $ | 19,693 | $ | 243 | ||||||||||||
With an allowance recorded
|
||||||||||||||||||||||||
Commercial real estate - owner occupied
|
$ | - | $ | - | $ | 122 | $ | 5 | $ | 122 | $ | 5 | ||||||||||||
Commercial real estate - non-owner occupied (2)
|
- | - | 971 | 17 | 971 | 17 | ||||||||||||||||||
Construction and land development
|
- | - | - | - | - | - | ||||||||||||||||||
Commercial loans
|
- | - | 2,625 | - | 2,625 | - | ||||||||||||||||||
Residential 1-4 family
|
- | - | 5,401 | 80 | 5,401 | 80 | ||||||||||||||||||
Other consumer loans
|
- | - | - | - | - | - | ||||||||||||||||||
Total
|
$ | - | $ | - | $ | 9,119 | $ | 102 | $ | 9,119 | $ | 102 | ||||||||||||
Grand total
|
$ | 3,434 | $ | 50 | $ | 25,378 | $ | 295 | $ | 28,812 | $ | 345 | ||||||||||||
(2) Includes loans secured by farmland and multi-family residential loans.
|
||||||||||||||||||||||||
Three months ended June 30, 2012
|
||||||||||||||||||||||||
Covered Loans
|
Non-covered Loans
|
Total Loans
|
||||||||||||||||||||||
Average
|
Interest
|
Average
|
Interest
|
Average
|
Interest
|
|||||||||||||||||||
Recorded
|
Income
|
Recorded
|
Income
|
Recorded
|
Income
|
|||||||||||||||||||
Investment
|
Recognized
|
Investment
|
Recognized
|
Investment
|
Recognized
|
|||||||||||||||||||
With no related allowance recorded
|
||||||||||||||||||||||||
Commercial real estate - owner occupied
|
$ | 134 | $ | 4 | $ | 288 | $ | - | $ | 422 | $ | 4 | ||||||||||||
Commercial real estate - non-owner occupied (2)
|
2,280 | 3 | 2,050 | - | 4,330 | 3 | ||||||||||||||||||
Construction and land development
|
1,111 | 26 | 2,347 | 43 | 3,458 | 69 | ||||||||||||||||||
Commercial loans
|
210 | 5 | 3,488 | 41 | 3,698 | 46 | ||||||||||||||||||
Residential 1-4 family
|
1,170 | 9 | 367 | 9 | 1,537 | 18 | ||||||||||||||||||
Other consumer loans
|
- | - | - | - | - | - | ||||||||||||||||||
Total
|
$ | 4,905 | $ | 47 | $ | 8,540 | $ | 93 | $ | 13,445 | $ | 140 | ||||||||||||
With an allowance recorded
|
||||||||||||||||||||||||
Commercial real estate - owner occupied
|
$ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||
Commercial real estate - non-owner occupied (2)
|
- | - | 1,523 | 51 | 1,523 | 51 | ||||||||||||||||||
Construction and land development
|
- | - | 3,063 | 44 | 3,063 | 44 | ||||||||||||||||||
Commercial loans
|
- | - | - | - | - | - | ||||||||||||||||||
Residential 1-4 family
|
- | - | - | - | - | - | ||||||||||||||||||
Other consumer loans
|
- | - | - | - | - | - | ||||||||||||||||||
Total
|
$ | - | $ | - | $ | 4,586 | $ | 95 | $ | 4,586 | $ | 95 | ||||||||||||
Grand total
|
$ | 4,905 | $ | 47 | $ | 13,126 | $ | 188 | $ | 18,031 | $ | 235 | ||||||||||||
(2) Includes loans secured by farmland and multi-family residential loans.
|
14 |
Six months ended June 30, 2013
|
||||||||||||||||||||||||
Covered Loans
|
Non-covered Loans
|
Total Loans
|
||||||||||||||||||||||
Average
|
Interest
|
Average
|
Interest
|
Average
|
Interest
|
|||||||||||||||||||
Recorded
|
Income
|
Recorded
|
Income
|
Recorded
|
Income
|
|||||||||||||||||||
Investment
|
Recognized
|
Investment
|
Recognized
|
Investment
|
Recognized
|
|||||||||||||||||||
With no related allowance recorded
|
||||||||||||||||||||||||
Commercial real estate - owner occupied
|
$ | 137 | $ | 9 | $ | 5,536 | $ | 176 | $ | 5,673 | $ | 185 | ||||||||||||
Commercial real estate - non-owner occupied (2)
|
1,471 | 62 | 1,028 | 42 | 2,499 | 104 | ||||||||||||||||||
Construction and land development
|
- | - | 1,699 | 23 | 1,699 | 23 | ||||||||||||||||||
Commercial loans
|
45 | 2 | 2,178 | 20 | 2,223 | 22 | ||||||||||||||||||
Residential 1-4 family
|
1,757 | 37 | 3,185 | 67 | 4,942 | 104 | ||||||||||||||||||
Other consumer loans
|
- | - | - | - | - | - | ||||||||||||||||||
Total
|
$ | 3,410 | $ | 110 | $ | 13,626 | $ | 328 | $ | 17,036 | $ | 438 | ||||||||||||
With an allowance recorded
|
||||||||||||||||||||||||
Commercial real estate - owner occupied
|
$ | - | $ | - | $ | 127 | $ | 9 | $ | 127 | $ | 9 | ||||||||||||
Commercial real estate - non-owner occupied (2)
|
- | - | 974 | 33 | 974 | 33 | ||||||||||||||||||
Construction and land development
|
- | - | - | - | - | - | ||||||||||||||||||
Commercial loans
|
- | - | 2,663 | - | 2,663 | - | ||||||||||||||||||
Residential 1-4 family
|
- | - | 5,480 | 168 | 5,480 | 168 | ||||||||||||||||||
Other consumer loans
|
- | - | - | - | - | - | ||||||||||||||||||
Total
|
$ | - | $ | - | $ | 9,244 | $ | 210 | $ | 9,244 | $ | 210 | ||||||||||||
Grand total
|
$ | 3,410 | $ | 110 | $ | 22,870 | $ | 538 | $ | 26,280 | $ | 648 | ||||||||||||
(2) Includes loans secured by farmland and multi-family residential loans.
|
||||||||||||||||||||||||
Six months ended June 30, 2012
|
||||||||||||||||||||||||
Covered Loans
|
Non-covered Loans
|
Total Loans
|
||||||||||||||||||||||
Average
|
Interest
|
Average
|
Interest
|
Average
|
Interest
|
|||||||||||||||||||
Recorded
|
Income
|
Recorded
|
Income
|
Recorded
|
Income
|
|||||||||||||||||||
Investment
|
Recognized
|
Investment
|
Recognized
|
Investment
|
Recognized
|
|||||||||||||||||||
With no related allowance recorded
|
||||||||||||||||||||||||
Commercial real estate - owner occupied
|
$ | 135 | $ | 9 | $ | 287 | $ | 11 | $ | 422 | $ | 20 | ||||||||||||
Commercial real estate - non-owner occupied (2)
|
2,131 | 42 | 2,319 | 37 | 4,450 | 79 | ||||||||||||||||||
Construction and land development
|
1,081 | 51 | 3,005 | 74 | 4,086 | 125 | ||||||||||||||||||
Commercial loans
|
211 | 11 | 3,682 | 83 | 3,893 | 94 | ||||||||||||||||||
Residential 1-4 family
|
1,165 | 15 | 1,267 | 12 | 2,432 | 27 | ||||||||||||||||||
Other consumer loans
|
- | - | - | - | - | - | ||||||||||||||||||
Total
|
$ | 4,723 | $ | 128 | $ | 10,560 | $ | 217 | $ | 15,283 | $ | 345 | ||||||||||||
With an allowance recorded
|
||||||||||||||||||||||||
Commercial real estate - owner occupied
|
$ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||
Commercial real estate - non-owner occupied (2)
|
- | - | 1,492 | 51 | 1,492 | 51 | ||||||||||||||||||
Construction and land development
|
- | - | 2,546 | 58 | 2,546 | 58 | ||||||||||||||||||
Commercial loans
|
- | - | - | - | - | - | ||||||||||||||||||
Residential 1-4 family
|
- | - | - | - | - | - | ||||||||||||||||||
Other consumer loans
|
- | - | - | - | - | - | ||||||||||||||||||
Total
|
$ | - | $ | - | $ | 4,038 | $ | 109 | $ | 4,038 | $ | 109 | ||||||||||||
Grand total
|
$ | 4,723 | $ | 128 | $ | 14,598 | $ | 326 | $ | 19,321 | $ | 454 | ||||||||||||
(2) Includes loans secured by farmland and multi-family residential loans.
|
15 |
June 30, 2013
|
30 - 59 | 60 - 89 | ||||||||||||||||||||||||||
Days
|
Days
|
90 Days
|
Total
|
Nonaccrual
|
Loans Not
|
Total
|
||||||||||||||||||||||
Past Due
|
Past Due
|
or More
|
Past Due
|
Loans
|
Past Due
|
Loans
|
||||||||||||||||||||||
Covered loans:
|
||||||||||||||||||||||||||||
Commercial real estate - owner occupied
|
$ | 337 | $ | - | $ | - | $ | 337 | $ | - | $ | 3,325 | $ | 3,662 | ||||||||||||||
Commercial real estate - non-owner occupied (1)
|
389 | - | - | 389 | 268 | 6,072 | 6,729 | |||||||||||||||||||||
Construction and land development
|
- | 41 | - | 41 | - | 11 | 52 | |||||||||||||||||||||
Commercial loans
|
- | - | - | - | - | 1,261 | 1,261 | |||||||||||||||||||||
Residential 1-4 family
|
317 | - | - | 317 | 1,624 | 46,080 | 48,021 | |||||||||||||||||||||
Other consumer loans
|
2 | - | 2 | - | 85 | 87 | ||||||||||||||||||||||
Total
|
$ | 1,043 | $ | 43 | $ | - | $ | 1,086 | $ | 1,892 | $ | 56,834 | $ | 59,812 | ||||||||||||||
Non-covered loans:
|
||||||||||||||||||||||||||||
Commercial real estate - owner occupied
|
$ | 2,293 | $ | - | $ | - | $ | 2,293 | $ | - | $ | 91,544 | $ | 93,837 | ||||||||||||||
Commercial real estate - non-owner occupied (1)
|
1,285 | - | - | 1,285 | - | 162,085 | 163,370 | |||||||||||||||||||||
Construction and land development
|
- | 2,332 | - | 2,332 | 1,275 | 27,469 | 31,076 | |||||||||||||||||||||
Commercial loans
|
1,396 | 866 | - | 2,262 | 4,132 | 99,358 | 105,752 | |||||||||||||||||||||
Residential 1-4 family
|
6,240 | 2,523 | - | 8,763 | 868 | 60,689 | 70,320 | |||||||||||||||||||||
Other consumer loans
|
5 | - | - | 5 | - | 1,333 | 1,338 | |||||||||||||||||||||
Total
|
$ | 11,219 | $ | 5,721 | $ | - | $ | 16,940 | $ | 6,275 | $ | 442,478 | $ | 465,693 | ||||||||||||||
Total loans:
|
||||||||||||||||||||||||||||
Commercial real estate - owner occupied
|
$ | 2,630 | $ | - | $ | - | $ | 2,630 | $ | - | $ | 94,869 | $ | 97,499 | ||||||||||||||
Commercial real estate - non-owner occupied (1)
|
1,674 | - | - | 1,674 | 268 | 168,157 | 170,099 | |||||||||||||||||||||
Construction and land development
|
- | 2,373 | - | 2,373 | 1,275 | 27,480 | 31,128 | |||||||||||||||||||||
Commercial loans
|
1,396 | 866 | - | 2,262 | 4,132 | 100,619 | 107,013 | |||||||||||||||||||||
Residential 1-4 family
|
6,557 | 2,523 | - | 9,080 | 2,492 | 106,769 | 118,341 | |||||||||||||||||||||
Other consumer loans
|
5 | 2 | - | 7 | - | 1,418 | 1,425 | |||||||||||||||||||||
Total
|
$ | 12,262 | $ | 5,764 | $ | - | $ | 18,026 | $ | 8,167 | $ | 499,312 | $ | 525,505 | ||||||||||||||
December 31, 2012
|
30 - 59 | 60 - 89 | ||||||||||||||||||||||||||
Days
|
Days
|
90 Days
|
Total
|
Nonaccrual
|
Loans Not
|
Total
|
||||||||||||||||||||||
Past Due
|
Past Due
|
or More
|
Past Due
|
Loans
|
Past Due
|
Loans
|
||||||||||||||||||||||
Covered loans:
|
||||||||||||||||||||||||||||
Commercial real estate - owner occupied
|
$ | 373 | $ | - | $ | - | $ | 373 | $ | - | $ | 3,770 | $ | 4,143 | ||||||||||||||
Commercial real estate - non-owner occupied (1)
|
151 | 2,321 | - | 2,472 | - | 8,388 | 10,860 | |||||||||||||||||||||
Construction and land development
|
72 | - | - | 72 | 51 | 1,138 | 1,261 | |||||||||||||||||||||
Commercial loans
|
143 | - | - | 143 | 1,963 | 566 | 2,672 | |||||||||||||||||||||
Residential 1-4 family
|
257 | - | - | 257 | 1,555 | 50,485 | 52,297 | |||||||||||||||||||||
Other consumer loans
|
- | - | - | - | - | 88 | 88 | |||||||||||||||||||||
Total
|
$ | 996 | $ | 2,321 | $ | - | $ | 3,317 | $ | 3,569 | $ | 64,435 | $ | 71,321 | ||||||||||||||
Non-covered loans:
|
||||||||||||||||||||||||||||
Commercial real estate - owner occupied
|
$ | 2,025 | $ | - | $ | - | $ | 2,025 | $ | 580 | $ | 90,683 | $ | 93,288 | ||||||||||||||
Commercial real estate - non-owner occupied (1)
|
861 | - | - | 861 | 626 | 148,918 | 150,405 | |||||||||||||||||||||
Construction and land development
|
35 | - | - | 35 | 1,484 | 43,427 | 44,946 | |||||||||||||||||||||
Commercial loans
|
1,164 | 191 | - | 1,355 | 4,469 | 93,257 | 99,081 | |||||||||||||||||||||
Residential 1-4 family
|
3,586 | 2,888 | - | 6,474 | 469 | 63,554 | 70,497 | |||||||||||||||||||||
Other consumer loans
|
150 | - | - | 150 | - | 1,473 | 1,623 | |||||||||||||||||||||
Total
|
$ | 7,821 | $ | 3,079 | $ | - | $ | 10,900 | $ | 7,628 | $ | 441,312 | $ | 459,840 | ||||||||||||||
Total loans:
|
||||||||||||||||||||||||||||
Commercial real estate - owner occupied
|
$ | 2,398 | $ | - | $ | - | $ | 2,398 | $ | 580 | $ | 94,453 | $ | 97,431 | ||||||||||||||
Commercial real estate - non-owner occupied (1)
|
1,012 | 2,321 | - | 3,333 | 626 | 157,306 | 161,265 | |||||||||||||||||||||
Construction and land development
|
107 | - | - | 107 | 1,535 | 44,565 | 46,207 | |||||||||||||||||||||
Commercial loans
|
1,307 | 191 | - | 1,498 | 6,432 | 93,823 | 101,753 | |||||||||||||||||||||
Residential 1-4 family
|
3,843 | 2,888 | - | 6,731 | 2,024 | 114,039 | 122,794 | |||||||||||||||||||||
Other consumer loans
|
150 | - | - | 150 | - | 1,561 | 1,711 | |||||||||||||||||||||
Total
|
$ | 8,817 | $ | 5,400 | $ | - | $ | 14,217 | $ | 11,197 | $ | 505,747 | $ | 531,161 | ||||||||||||||
(1) Includes loans secured by farmland and multi-family residential loans.
|
16 |
Commercial
|
Commercial
|
|||||||||||||||||||||||||||||||
Real Estate
|
Real Estate
|
Construction
|
Other
|
|||||||||||||||||||||||||||||
Non-covered loans:
|
Owner
|
Non-owner
|
and Land
|
Commercial
|
1-4 Family
|
Consumer
|
||||||||||||||||||||||||||
Three months ended June 30, 2013
|
Occupied
|
Occupied (1)
|
Development
|
Loans
|
Residential
|
Loans
|
Unallocated
|
Total
|
||||||||||||||||||||||||
Allowance for loan losses:
|
||||||||||||||||||||||||||||||||
Beginning balance
|
$ | 898 | $ | 1,191 | $ | 1,048 | $ | 2,095 | $ | 1,296 | $ | 64 | $ | 560 | $ | 7,152 | ||||||||||||||||
Charge offs
|
- | - | - | (266 | ) | (480 | ) | (1 | ) | - | (747 | ) | ||||||||||||||||||||
Recoveries
|
8 | 51 | 3 | 35 | 2 | 1 | - | 100 | ||||||||||||||||||||||||
Provision
|
(174 | ) | (152 | ) | (25 | ) | 878 | 589 | (9 | ) | (382 | ) | 725 | |||||||||||||||||||
Ending balance
|
$ | 732 | $ | 1,090 | $ | 1,026 | $ | 2,742 | $ | 1,407 | $ | 55 | $ | 178 | $ | 7,230 | ||||||||||||||||
Three months ended June 30, 2012
|
||||||||||||||||||||||||||||||||
Allowance for loan losses:
|
||||||||||||||||||||||||||||||||
Beginning balance
|
$ | 649 | $ | 1,666 | $ | 500 | $ | 2,552 | $ | 948 | $ | 38 | $ | 549 | $ | 6,902 | ||||||||||||||||
Charge offs
|
- | (32 | ) | (1,280 | ) | (344 | ) | (190 | ) | (3 | ) | - | (1,849 | ) | ||||||||||||||||||
Recoveries
|
- | - | - | 261 | 12 | 4 | - | 277 | ||||||||||||||||||||||||
Provision
|
(24 | ) | (619 | ) | 2,254 | 75 | 115 | (4 | ) | (472 | ) | 1,325 | ||||||||||||||||||||
Ending balance
|
$ | 625 | $ | 1,015 | $ | 1,474 | $ | 2,544 | $ | 885 | $ | 35 | $ | 77 | $ | 6,655 |
Commercial
|
Commercial
|
|||||||||||||||||||||||||||||||
Real Estate
|
Real Estate
|
Construction
|
Other
|
|||||||||||||||||||||||||||||
Non-covered loans:
|
Owner
|
Non-owner
|
and Land
|
Commercial
|
1-4 Family
|
Consumer
|
||||||||||||||||||||||||||
Six months ended June 30, 2013
|
Occupied
|
Occupied (1)
|
Development
|
Loans
|
Residential
|
Loans
|
Unallocated
|
Total
|
||||||||||||||||||||||||
Allowance for loan losses:
|
||||||||||||||||||||||||||||||||
Beginning balance
|
$ | 932 | $ | 1,474 | $ | 970 | $ | 2,110 | $ | 1,163 | $ | 33 | $ | 285 | $ | 6,967 | ||||||||||||||||
Charge offs
|
- | (199 | ) | (300 | ) | (665 | ) | (518 | ) | (141 | ) | - | (1,823 | ) | ||||||||||||||||||
Recoveries
|
8 | 51 | 5 | 74 | 123 | 1 | - | 262 | ||||||||||||||||||||||||
Provision
|
(208 | ) | (236 | ) | 351 | 1,223 | 639 | 162 | (107 | ) | 1,824 | |||||||||||||||||||||
Ending balance
|
$ | 732 | $ | 1,090 | $ | 1,026 | $ | 2,742 | $ | 1,407 | $ | 55 | $ | 178 | $ | 7,230 | ||||||||||||||||
Six months ended June 30, 2012
|
||||||||||||||||||||||||||||||||
Allowance for loan losses:
|
||||||||||||||||||||||||||||||||
Beginning balance
|
$ | 627 | $ | 1,011 | $ | 1,367 | $ | 2,227 | $ | 1,021 | $ | 42 | $ | - | $ | 6,295 | ||||||||||||||||
Charge offs
|
- | (32 | ) | (1,280 | ) | (1,167 | ) | (222 | ) | (6 | ) | - | (2,707 | ) | ||||||||||||||||||
Recoveries
|
- | - | - | 273 | 13 | 6 | - | 292 | ||||||||||||||||||||||||
Provision
|
(2 | ) | 36 | 1,387 | 1,211 | 73 | (7 | ) | 77 | 2,775 | ||||||||||||||||||||||
Ending balance
|
$ | 625 | $ | 1,015 | $ | 1,474 | $ | 2,544 | $ | 885 | $ | 35 | $ | 77 | $ | 6,655 | ||||||||||||||||
Commercial
|
Commercial
|
|||||||||||||||||||||||||||||||
Real Estate
|
Real Estate
|
Construction
|
Other
|
|||||||||||||||||||||||||||||
Covered loans:
|
Owner
|
Non-owner
|
and Land
|
Commercial
|
1-4 Family
|
Consumer
|
||||||||||||||||||||||||||
Three months ended June 30, 2013
|
Occupied
|
Occupied (1)
|
Development
|
Loans
|
Residential
|
Loans
|
Unallocated
|
Total
|
||||||||||||||||||||||||
Allowance for loan losses:
|
||||||||||||||||||||||||||||||||
Beginning balance
|
$ | - | $ | 45 | $ | - | $ | - | $ | - | $ | 21 | $ | - | $ | 66 | ||||||||||||||||
Charge offs
|
- | - | - | - | - | - | - | - | ||||||||||||||||||||||||
Recoveries
|
- | - | - | - | - | - | - | - | ||||||||||||||||||||||||
Adjustments (2)
|
- | - | - | - | - | - | - | - | ||||||||||||||||||||||||
Provision
|
- | - | - | - | - | - | - | - | ||||||||||||||||||||||||
Ending balance
|
$ | - | $ | 45 | $ | - | $ | - | $ | - | $ | 21 | $ | - | $ | 66 |
17 |
Commercial
|
Commercial
|
|||||||||||||||||||||||||||||||
Real Estate
|
Real Estate
|
Construction
|
Other
|
|||||||||||||||||||||||||||||
Covered loans:
|
Owner
|
Non-owner
|
and Land
|
Commercial
|
1-4 Family
|
Consumer
|
||||||||||||||||||||||||||
Six months ended June 30, 2013
|
Occupied
|
Occupied (1)
|
Development
|
Loans
|
Residential
|
Loans
|
Unallocated
|
Total
|
||||||||||||||||||||||||
Allowance for loan losses:
|
||||||||||||||||||||||||||||||||
Beginning balance
|
$ | - | $ | 45 | $ | - | $ | 43 | $ | - | $ | 11 | $ | - | $ | 99 | ||||||||||||||||
Charge offs
|
- | - | - | - | - | - | - | - | ||||||||||||||||||||||||
Recoveries
|
- | - | - | - | - | - | - | - | ||||||||||||||||||||||||
Adjustments (2)
|
- | - | - | (35 | ) | - | 8 | - | (27 | ) | ||||||||||||||||||||||
Provision
|
- | - | - | (8 | ) | - | 2 | - | (6 | ) | ||||||||||||||||||||||
Ending balance
|
$ | - | $ | 45 | $ | - | $ | - | $ | - | $ | 21 | $ | - | $ | 66 | ||||||||||||||||
Commercial
|
Commercial
|
|||||||||||||||||||||||||||||||
Real Estate
|
Real Estate
|
Construction
|
Other
|
|||||||||||||||||||||||||||||
Owner
|
Non-owner
|
and Land
|
Commercial
|
1-4 Family
|
Consumer
|
|||||||||||||||||||||||||||
Non-covered loans:
|
Occupied
|
Occupied (1)
|
Development (2)
|
Loans
|
Residential
|
Loans
|
Unallocated
|
Total
|
||||||||||||||||||||||||
June 30, 2013
|
||||||||||||||||||||||||||||||||
Ending allowance balance attributable to loans:
|
||||||||||||||||||||||||||||||||
Individually evaluated for impairment
|
$ | 120 | $ | 61 | $ | 300 | $ | 450 | $ | 440 | $ | - | $ | - | $ | 1,371 | ||||||||||||||||
Collectively evaluated for impairment
|
612 | 1,029 | 726 | 2,292 | 967 | 55 | 178 | 5,859 | ||||||||||||||||||||||||
Total ending allowance
|
$ | 732 | $ | 1,090 | $ | 1,026 | $ | 2,742 | $ | 1,407 | $ | 55 | $ | 178 | $ | 7,230 | ||||||||||||||||
Loans:
|
||||||||||||||||||||||||||||||||
Individually evaluated for impairment
|
$ | 7,725 | $ | 2,031 | $ | 3,582 | $ | 5,214 | $ | 8,973 | $ | - | $ | - | $ | 27,525 | ||||||||||||||||
Collectively evaluated for impairment
|
86,112 | 161,339 | 27,494 | 100,538 | 61,347 | 1,338 | - | 438,168 | ||||||||||||||||||||||||
Total ending loan balances
|
$ | 93,837 | $ | 163,370 | $ | 31,076 | $ | 105,752 | $ | 70,320 | $ | 1,338 | $ | - | $ | 465,693 | ||||||||||||||||
December 31, 2012
|
||||||||||||||||||||||||||||||||
Ending allowance balance attributable to loans:
|
||||||||||||||||||||||||||||||||
Individually evaluated for impairment
|
$ | 137 | $ | 260 | $ | - | $ | - | $ | 440 | $ | - | $ | - | $ | 837 | ||||||||||||||||
Collectively evaluated for impairment
|
795 | 1,214 | 970 | 2,110 | 723 | 33 | 285 | 6,130 | ||||||||||||||||||||||||
Total ending allowance
|
$ | 932 | $ | 1,474 | $ | 970 | $ | 2,110 | $ | 1,163 | $ | 33 | $ | 285 | $ | 6,967 | ||||||||||||||||
Loans:
|
||||||||||||||||||||||||||||||||
Individually evaluated for impairment
|
$ | 3,455 | $ | 2,882 | $ | 2,981 | $ | 5,212 | $ | 9,159 | $ | - | $ | - | $ | 23,689 | ||||||||||||||||
Collectively evaluated for impairment
|
89,833 | 147,523 | 41,965 | 93,869 | 61,338 | 1,623 | - | 436,151 | ||||||||||||||||||||||||
Total ending loan balances
|
$ | 93,288 | $ | 150,405 | $ | 44,946 | $ | 99,081 | $ | 70,497 | $ | 1,623 | $ | - | $ | 459,840 |
18 |
Commercial
|
Commercial
|
|||||||||||||||||||||||||||||||
Real Estate
|
Real Estate
|
Construction
|
Other
|
|||||||||||||||||||||||||||||
Owner
|
Non-owner
|
and Land
|
Commercial
|
1-4 Family
|
Consumer
|
|||||||||||||||||||||||||||
Covered loans:
|
Occupied
|
Occupied (1)
|
Development
|
Loans
|
Residential
|
Loans
|
Unallocated
|
Total
|
||||||||||||||||||||||||
June 30, 2013
|
||||||||||||||||||||||||||||||||
Ending allowance balance attributable to loans:
|
||||||||||||||||||||||||||||||||
Individually evaluated for impairment
|
$ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||
Collectively evaluated for impairment
|
- | 45 | - | - | - | 21 | - | 66 | ||||||||||||||||||||||||
Total ending allowance
|
$ | - | $ | 45 | $ | - | $ | - | $ | - | $ | 21 | $ | - | $ | 66 | ||||||||||||||||
Loans:
|
||||||||||||||||||||||||||||||||
Individually evaluated for impairment
|
$ | 136 | $ | 1,461 | $ | - | $ | 45 | $ | 1,790 | $ | - | $ | - | $ | 3,432 | ||||||||||||||||
Collectively evaluated for impairment
|
3,526 | 5,268 | 52 | 1,216 | 46,231 | 87 | - | 56,380 | ||||||||||||||||||||||||
Total ending loan balances
|
$ | 3,662 | $ | 6,729 | $ | 52 | $ | 1,261 | $ | 48,021 | $ | 87 | $ | - | $ | 59,812 | ||||||||||||||||
December 31, 2012
|
||||||||||||||||||||||||||||||||
Ending allowance balance attributable to loans:
|
||||||||||||||||||||||||||||||||
Individually evaluated for impairment
|
$ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||
Collectively evaluated for impairment
|
- | 45 | - | 43 | - | 11 | - | 99 | ||||||||||||||||||||||||
Total ending allowance
|
$ | - | $ | 45 | $ | - | $ | 43 | $ | - | $ | 11 | $ | - | $ | 99 | ||||||||||||||||
Loans:
|
||||||||||||||||||||||||||||||||
Individually evaluated for impairment
|
$ | 138 | $ | 2,114 | $ | 1,108 | $ | 212 | $ | 1,555 | $ | - | $ | - | $ | 5,127 | ||||||||||||||||
Collectively evaluated for impairment
|
4,005 | 8,746 | 153 | 2,460 | 50,742 | 88 | - | 66,194 | ||||||||||||||||||||||||
Total ending loan balances
|
$ | 4,143 | $ | 10,860 | $ | 1,261 | $ | 2,672 | $ | 52,297 | $ | 88 | $ | - | $ | 71,321 | ||||||||||||||||
19 |
June 30, 2013
|
Covered Loans
|
Non-covered Loans
|
Total Loans
|
|||||||||||||||||||||||||||||||||||||
Classified/
|
Special
|
Classified/
|
||||||||||||||||||||||||||||||||||||||
Criticized (1)
|
Pass
|
Total
|
Mention
|
Substandard (3)
|
Pass
|
Total
|
Criticized
|
Pass
|
Total
|
|||||||||||||||||||||||||||||||
Commercial real estate - owner occupied
|
$ | 136 | $ | 3,526 | $ | 3,662 | $ | 813 | $ | 7,725 | $ | 85,299 | $ | 93,837 | $ | 8,674 | $ | 88,825 | $ | 97,499 | ||||||||||||||||||||
Commercial real estate - non-owner occupied (2)
|
1,461 | 5,268 | 6,729 | 102 | 2,031 | 161,237 | 163,370 | 3,594 | 166,505 | 170,099 | ||||||||||||||||||||||||||||||
Construction and land development
|
- | 52 | 52 | 643 | 3,582 | 26,851 | 31,076 | 4,225 | 26,903 | 31,128 | ||||||||||||||||||||||||||||||
Commercial loans
|
45 | 1,216 | 1,261 | 425 | 5,214 | 100,113 | 105,752 | 5,684 | 101,329 | 107,013 | ||||||||||||||||||||||||||||||
Residential 1-4 family
|
1,790 | 46,231 | 48,021 | - | 8,973 | 61,347 | 70,320 | 10,763 | 107,578 | 118,341 | ||||||||||||||||||||||||||||||
Other consumer loans
|
- | 87 | 87 | - | - | 1,338 | 1,338 | - | 1,425 | 1,425 | ||||||||||||||||||||||||||||||
Total
|
$ | 3,432 | $ | 56,380 | $ | 59,812 | $ | 1,983 | $ | 27,525 | $ | 436,185 | $ | 465,693 | $ | 32,940 | $ | 492,565 | $ | 525,505 |
December 31, 2012
|
Covered Loans
|
Non-covered Loans
|
Total Loans
|
|||||||||||||||||||||||||||||||||||||
Classified/
|
Special
|
Classified/
|
||||||||||||||||||||||||||||||||||||||
Criticized (1)
|
Pass
|
Total
|
Mention
|
Substandard (3)
|
Pass
|
Total
|
Criticized
|
Pass
|
Total
|
|||||||||||||||||||||||||||||||
Commercial real estate - owner occupied
|
$ | 138 | $ | 4,005 | $ | 4,143 | $ | 821 | $ | 3,455 | $ | 89,012 | $ | 93,288 | $ | 4,414 | $ | 93,017 | $ | 97,431 | ||||||||||||||||||||
Commercial real estate - non-owner occupied (2)
|
2,114 | 8,746 | 10,860 | - | 2,882 | 147,523 | 150,405 | 4,996 | 156,269 | 161,265 | ||||||||||||||||||||||||||||||
Construction and land development
|
1,108 | 153 | 1,261 | - | 2,981 | 41,965 | 44,946 | 4,089 | 42,118 | 46,207 | ||||||||||||||||||||||||||||||
Commercial loans
|
212 | 2,460 | 2,672 | 32 | 5,212 | 93,837 | 99,081 | 5,456 | 96,297 | 101,753 | ||||||||||||||||||||||||||||||
Residential 1-4 family
|
1,555 | 50,742 | 52,297 | - | 9,159 | 61,338 | 70,497 | 10,714 | 112,080 | 122,794 | ||||||||||||||||||||||||||||||
Other consumer loans
|
- | 88 | 88 | - | - | 1,623 | 1,623 | - | 1,711 | 1,711 | ||||||||||||||||||||||||||||||
Total
|
$ | 5,127 | $ | 66,194 | $ | 71,321 | $ | 853 | $ | 23,689 | $ | 435,298 | $ | 459,840 | $ | 29,669 | $ | 501,492 | $ | 531,161 | ||||||||||||||||||||
20 |
Weighted
|
||||||||||||
Average
|
||||||||||||
Income
|
Shares
|
Per Share
|
||||||||||
(Numerator)
|
(Denominator)
|
Amount
|
||||||||||
For the three months ended June 30, 2013
|
||||||||||||
Basic EPS
|
$ | 1,555 | 11,590 | $ | 0.13 | |||||||
Effect of dilutive stock options and warrants
|
- | 44 | - | |||||||||
Diluted EPS
|
$ | 1,555 | 11,634 | $ | 0.13 | |||||||
For the three months ended June 30, 2012
|
||||||||||||
Basic EPS
|
$ | 2,215 | 11,590 | $ | 0.19 | |||||||
Effect of dilutive stock options and warrants
|
- | 4 | - | |||||||||
Diluted EPS
|
$ | 2,215 | 11,594 | $ | 0.19 | |||||||
For the six months ended June 30, 2013
|
||||||||||||
Basic EPS
|
$ | 3,081 | 11,590 | $ | 0.27 | |||||||
Effect of dilutive stock options and warrants
|
- | 33 | - | |||||||||
Diluted EPS
|
$ | 3,081 | 11,623 | $ | 0.27 | |||||||
For the six months ended June 30, 2012
|
||||||||||||
Basic EPS
|
$ | 4,058 | 11,590 | $ | 0.35 | |||||||
Effect of dilutive stock options and warrants
|
- | 3 | - | |||||||||
Diluted EPS
|
$ | 4,058 | 11,593 | $ | 0.35 |
21 |
22 |
Fair Value Measurements Using
|
||||||||||||||||
Significant
|
||||||||||||||||
Quoted Prices in
|
Other
|
Significant
|
||||||||||||||
Active Markets for
|
Observable
|
Unobservable
|
||||||||||||||
Total at
|
Identical Assets
|
Inputs
|
Inputs
|
|||||||||||||
(dollars in thousands)
|
June 30, 2013
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
||||||||||||
Financial assets:
|
||||||||||||||||
Available for sale securities
|
||||||||||||||||
Obligations of states and political subdivisions
|
$ | 2,034 | $ | - | $ | 2,034 | $ | - | ||||||||
Fair Value Measurements Using
|
||||||||||||||||
Significant
|
||||||||||||||||
Quoted Prices in
|
Other
|
Significant
|
||||||||||||||
Active Markets for
|
Observable
|
Unobservable
|
||||||||||||||
Total at
|
Identical Assets
|
Inputs
|
Inputs
|
|||||||||||||
(dollars in thousands)
|
December 31, 2012
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
||||||||||||
Financial assets:
|
||||||||||||||||
Available for sale securities
|
||||||||||||||||
Obligations of states and political subdivisions
|
$ | 2,289 | $ | - | $ | 2,289 | $ | - | ||||||||
FHLMC preferred stock
|
102 | 102 | - | - | ||||||||||||
Total available-for-sale securities
|
$ | 2,391 | $ | 102 | $ | 2,289 | $ | - |
23 |
Fair Value Measurements Using
|
||||||||||
Significant
|
||||||||||
Quoted Prices in
|
Other
|
Significant
|
||||||||
Active Markets for
|
Observable
|
Unobservable
|
||||||||
Total at
|
Identical Assets
|
Inputs
|
Inputs
|
|||||||
(dollars in thousands)
|
June 30, 2013
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
||||||
Impaired non-covered loans:
|
||||||||||
Commercial real estate - owner occupied
|
7,605 | 7,605 | ||||||||
Commercial real estate - non-owner occupied (1)
|
1,970 | 1,970 | ||||||||
Construction and land development
|
3,582 | 3,582 | ||||||||
Commercial loans
|
4,764 | 4,764 | ||||||||
Residential 1-4 family
|
8,533 | 8,533 | ||||||||
Impaired covered loans:
|
||||||||||
Commercial real estate - owner occupied
|
136 | 136 | ||||||||
Commercial real estate - non-owner occupied (1)
|
1,461 | 1,461 | ||||||||
Commercial loans
|
45 | 45 | ||||||||
Residential 1-4 family
|
1,790 | 1,790 | ||||||||
Non-covered other real estate owned:
|
||||||||||
Commercial real estate - owner occupied
|
713 | 713 | ||||||||
Commercial real estate - non-owner occupied (1)
|
1,342 | 1,342 | ||||||||
Construction and land development
|
5,746 | 5,746 | ||||||||
Residential 1-4 family
|
4,318 | 4,318 | ||||||||
Covered other real estate owned:
|
||||||||||
Commercial real estate - owner occupied
|
557 | 557 | ||||||||
Commercial real estate - non-owner occupied (1)
|
2,200 | 2,200 | ||||||||
Commercial
|
79 | 79 |
24 |
Fair Value Measurements Using
|
||||||||||
Significant
|
||||||||||
Quoted Prices in
|
Other
|
Significant
|
||||||||
Active Markets for
|
Observable
|
Unobservable
|
||||||||
Total at
|
Identical Assets
|
Inputs
|
Inputs
|
|||||||
(dollars in thousands)
|
December 31, 2012
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
||||||
Impaired non-covered loans:
|
||||||||||
Commercial real estate - owner occupied
|
$ | 3,318 | $ | 3,318 | ||||||
Commercial real estate - non-owner occupied (1)
|
2,622 | 2,622 | ||||||||
Construction and land development
|
2,981 | 2,981 | ||||||||
Commercial loans
|
5,212 | 5,212 | ||||||||
Residential 1-4 family
|
8,719 | 8,719 | ||||||||
Impaired covered loans:
|
||||||||||
Commercial real estate - owner occupied
|
138 | 138 | ||||||||
Commercial real estate - non-owner occupied (1)
|
2,114 | 2,114 | ||||||||
Construction and land development
|
1,108 | 1,108 | ||||||||
Commercial loans
|
212 | 212 | ||||||||
Residential 1-4 family
|
1,555 | 1,555 | ||||||||
Non-covered other real estate owned:
|
||||||||||
Commercial real estate - owner occupied
|
461 | 461 | ||||||||
Commercial real estate - non-owner occupied (1)
|
1,342 | 1,342 | ||||||||
Construction and land development
|
6,484 | 6,484 | ||||||||
Residential 1-4 family
|
4,913 | 4,913 | ||||||||
Covered other real estate owned:
|
||||||||||
Commercial real estate - owner occupied
|
557 | 557 | ||||||||
Commercial
|
79 | 79 |
June 30, 2013
|
December 31, 2012
|
||||||||||||||||||
Fair Value
|
Carrying
|
Fair
|
Carrying
|
Fair
|
|||||||||||||||
Hierarchy Level
|
Amount
|
Value
|
Amount
|
Value
|
|||||||||||||||
Financial assets:
|
|||||||||||||||||||
Cash and cash equivalents
|
Level 1
|
$ | 28,545 | $ | 28,545 | $ | 39,200 | $ | 39,200 | ||||||||||
Securities available for sale
|
See previous table
|
2,034 | 2,034 | 2,391 | 2,391 | ||||||||||||||
Securities held to maturity
|
Level 2 & Level 3
|
83,354 | 79,635 | 84,051 | 84,827 | ||||||||||||||
Stock in Federal Reserve Bank and Federal
|
|||||||||||||||||||
Home Loan Bank
|
n/a | 5,240 | n/a | 6,212 | n/a | ||||||||||||||
Net non-covered loans
|
Level 3
|
457,235 | 461,148 | 451,757 | 457,906 | ||||||||||||||
Net covered loans
|
Level 3
|
59,753 | 63,910 | 71,328 | 77,976 | ||||||||||||||
Accrued interest receivable
|
Level 2 & Level 3
|
2,222 | 2,222 | 2,455 | 2,455 | ||||||||||||||
FDIC indemnification asset
|
Level 3
|
6,308 | 4,671 | 6,735 | 6,735 | ||||||||||||||
Financial liabilities:
|
|||||||||||||||||||
Demand deposits
|
Level 1
|
67,347 | 67,347 | 72,418 | 72,418 | ||||||||||||||
Money market and savings accounts
|
Level 1
|
158,609 | 158,609 | 172,851 | 172,851 | ||||||||||||||
Certificates of deposit
|
Level 3
|
319,682 | 321,203 | 305,708 | 308,160 | ||||||||||||||
Securities sold under agreements to
|
|||||||||||||||||||
repurchase and other short-term borrowings
|
Level 1
|
20,530 | 20,530 | 33,411 | 33,411 | ||||||||||||||
FHLB advances
|
Level 3
|
30,250 | 31,848 | 30,250 | 31,380 | ||||||||||||||
Accrued interest payable
|
Level 1 & Level 3
|
360 | 360 | 258 | 258 |
25 |
Assets
|
||||
Cash and cash equivalents
|
$ | 21,704 | ||
Consideration due from the FDIC
|
25,553 | |||
Investment securities
|
38,379 | |||
Loans
|
64,966 | |||
Loans held for sale
|
7,568 | |||
Federal Home Loan Bank stock
|
1,167 | |||
Other real estate owned
|
750 | |||
Core deposit intangible
|
179 | |||
Other assets
|
576 | |||
Total assets acquired
|
$ | 160,842 | ||
Liabilities
|
||||
Deposits
|
$ | 140,484 | ||
FHLB Advances
|
16,738 | |||
Other liabilities
|
136 | |||
Total liabilities
|
$ | 157,358 | ||
Net assets acquired (bargain purchase gain)
|
$ | 3,484 |
26 |
27 |
|
●
|
the effects of future economic, business and market conditions and changes, domestic and foreign;
|
|
●
|
changes in the local economies in our market areas adversely affect our customers and their ability to transact profitable business with us, including the ability of our borrowers to repay their loans according to their terms or a change in the value of the related collateral;
|
|
●
|
changes in the availability of funds resulting in increased costs or reduced liquidity;
|
|
●
|
a deterioration or downgrade in the credit quality and credit agency ratings of the securities in our securities portfolio;
|
|
●
|
impairment concerns and risks related to our investment portfolio of collateralized mortgage obligations, agency mortgage-backed securities, obligations of states and political subdivisions and pooled trust preferred securities;
|
|
●
|
the incurrence and possible impairment of goodwill associated with an acquisition and possible adverse short-term effects on our results of operations;
|
|
●
|
increased credit risk in our assets and increased operating risk caused by a material change in commercial, consumer and/or real estate loans as a percentage of our total loan portfolio;
|
|
●
|
the concentration of our loan portfolio in loans collateralized by real estate;
|
|
●
|
our level of construction and land development and commercial real estate loans;
|
|
●
|
changes in the levels of loan prepayments and the resulting effects on the value of our loan portfolio;
|
|
●
|
the failure of assumptions and estimates underlying the establishment of and provisions made to the allowance for loan losses;
|
|
●
|
our ability to expand and grow our business and operations, including the establishment of additional branches and acquisition of additional branches and banks, and our ability to realize the cost savings and revenue enhancements we expect from such activities;
|
|
●
|
changes in governmental monetary and fiscal policies, including interest rate policies of the Board of Governors of the Federal Reserve System, or changes in interest rates and market prices, which could reduce our net interest margins, asset valuations and expense expectations;
|
28 |
|
●
|
increased competition for deposits and loans adversely affecting rates and terms;
|
|
●
|
the continued service of key management personnel;
|
|
●
|
the potential payment of interest on demand deposit accounts to effectively compete for customers;
|
|
●
|
potential environmental liability risk associated with lending activities;
|
|
●
|
increased asset levels and changes in the composition of assets and the resulting impact on our capital levels and regulatory capital ratios;
|
|
●
|
risks of mergers and acquisitions, including the related time and cost of implementing transactions and the potential failure to achieve expected gains, revenue growth or expense savings;
|
|
●
|
legislative and regulatory changes, including changes in banking, securities and tax laws and regulations and their application by our regulators, including those associated with the Dodd Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and changes in the scope and cost of Federal Deposit Insurance Corporation (“FDIC”) insurance and other coverage;
|
|
●
|
increases in regulatory capital requirements for banking organizations generally, which may adversely affect our ability to expand our business or could cause us to shrink our business;
|
|
●
|
the effects of war or other conflicts, acts of terrorism or other catastrophic events that may affect general economic conditions;
|
|
●
|
changes in accounting policies, rules and practices and applications or determinations made thereunder;
|
|
●
|
the risk that our deferred tax assets could be reduced if future taxable income is less than currently estimated, if corporate tax rates in the future are less than current rates, or if sales of our capital stock trigger limitations on the amount of net operating loss carryforwards that we may utilize for income tax purposes; and
|
|
●
|
other factors and risks described under “Risk Factors” herein and in any of our subsequent reports that we make with the Securities and Exchange Commission (the “Commission” or “SEC”) under the Exchange Act.
|
29 |
30 |
Average Balance Sheets and Net Interest
|
||||||||||||||||||||||||
Analysis For the Quarters Ended
|
||||||||||||||||||||||||
6/30/2013
|
6/30/2012
|
|||||||||||||||||||||||
Interest
|
Interest
|
|||||||||||||||||||||||
Average
|
Income/
|
Yield/
|
Average
|
Income/
|
Yield/
|
|||||||||||||||||||
Balance
|
Expense
|
Rate
|
Balance
|
Expense
|
Rate
|
|||||||||||||||||||
(Dollar amounts in thousands)
|
||||||||||||||||||||||||
Assets
|
||||||||||||||||||||||||
Interest-earning assets:
|
||||||||||||||||||||||||
Loans, net of unearned income (1) (2)
|
$ | 505,106 | $ | 7,765 | 6.17 | % | $ | 539,322 | $ | 8,768 | 6.54 | % | ||||||||||||
Investment securities
|
83,521 | 557 | 2.67 | % | 65,483 | 509 | 3.11 | % | ||||||||||||||||
Other earning assets
|
58,488 | 227 | 1.56 | % | 15,965 | 84 | 2.12 | % | ||||||||||||||||
Total earning assets
|
647,115 | 8,549 | 5.30 | % | 620,770 | 9,361 | 6.07 | % | ||||||||||||||||
Allowance for loan losses
|
(7,304 | ) | (7,032 | ) | ||||||||||||||||||||
Total non-earning assets
|
72,567 | 72,680 | ||||||||||||||||||||||
Total assets
|
$ | 712,378 | $ | 686,418 | ||||||||||||||||||||
Liabilities and stockholders’ equity
|
||||||||||||||||||||||||
Interest-bearing liabilities:
|
||||||||||||||||||||||||
NOW accounts
|
$ | 23,101 | 16 | 0.28 | % | $ | 19,160 | 22 | 0.46 | % | ||||||||||||||
Money market accounts
|
155,843 | 124 | 0.32 | % | 163,001 | 327 | 0.81 | % | ||||||||||||||||
Savings accounts
|
10,759 | 16 | 0.60 | % | 8,321 | 13 | 0.61 | % | ||||||||||||||||
Time deposits
|
322,638 | 864 | 1.07 | % | 287,092 | 939 | 1.32 | % | ||||||||||||||||
Total interest-bearing deposits
|
512,341 | 1,020 | 0.80 | % | 477,574 | 1,301 | 1.10 | % | ||||||||||||||||
Borrowings
|
45,799 | 155 | 1.36 | % | 51,788 | 227 | 1.76 | % | ||||||||||||||||
Total interest-bearing liabilities
|
558,140 | 1,175 | 0.84 | % | 529,362 | 1,528 | 1.16 | % | ||||||||||||||||
Noninterest-bearing liabilities:
|
||||||||||||||||||||||||
Demand deposits
|
43,920 | 43,228 | ||||||||||||||||||||||
Other liabilities
|
5,550 | 12,106 | ||||||||||||||||||||||
Total liabilites
|
607,610 | 584,696 | ||||||||||||||||||||||
Stockholders’ equity
|
104,768 | 101,722 | ||||||||||||||||||||||
Total liabilities and stockholders’ equity
|
$ | 712,378 | $ | 686,418 | ||||||||||||||||||||
Net interest income
|
7,374 | 7,833 | ||||||||||||||||||||||
Interest rate spread
|
4.45 | % | 4.90 | % | ||||||||||||||||||||
Net interest margin
|
4.57 | % | 5.07 | % | ||||||||||||||||||||
(1) Includes loan fees in both interest income and the calculation of the yield on loans.
|
||||||||||||||||||||||||
(2) Calculations include non-accruing loans in average loan amounts outstanding.
|
31 |
Average Balance Sheets and Net Interest
|
||||||||||||||||||||||||
Analysis For the Six Months Ended
|
||||||||||||||||||||||||
6/30/2013
|
6/30/2012
|
|||||||||||||||||||||||
Interest
|
Interest
|
|||||||||||||||||||||||
Average
|
Income/
|
Yield/
|
Average
|
Income/
|
Yield/
|
|||||||||||||||||||
Balance
|
Expense
|
Rate
|
Balance
|
Expense
|
Rate
|
|||||||||||||||||||
(Dollar amounts in thousands)
|
||||||||||||||||||||||||
Assets
|
||||||||||||||||||||||||
Interest-earning assets:
|
||||||||||||||||||||||||
Loans, net of unearned income (1) (2)
|
$ | 509,514 | $ | 16,109 | 6.38 | % | $ | 513,970 | $ | 17,379 | 6.80 | % | ||||||||||||
Investment securities
|
84,041 | 1,124 | 2.67 | % | 55,008 | 911 | 3.31 | % | ||||||||||||||||
Other earning assets
|
48,659 | 339 | 1.40 | % | 16,269 | 145 | 1.79 | % | ||||||||||||||||
Total earning assets
|
642,214 | 17,572 | 5.52 | % | 585,247 | 18,435 | 6.33 | % | ||||||||||||||||
Allowance for loan losses
|
(7,478 | ) | (6,989 | ) | ||||||||||||||||||||
Total non-earning assets
|
71,364 | 71,899 | ||||||||||||||||||||||
Total assets
|
$ | 706,100 | $ | 650,157 | ||||||||||||||||||||
Liabilities and stockholders’ equity
|
||||||||||||||||||||||||
Interest-bearing liabilities:
|
||||||||||||||||||||||||
NOW accounts
|
$ | 23,927 | 31 | 0.26 | % | $ | 17,911 | 33 | 0.37 | % | ||||||||||||||
Money market accounts
|
157,263 | 314 | 0.40 | % | 156,091 | 626 | 0.81 | % | ||||||||||||||||
Savings accounts
|
10,424 | 29 | 0.56 | % | 7,340 | 22 | 0.60 | % | ||||||||||||||||
Time deposits
|
313,652 | 1,746 | 1.12 | % | 270,896 | 1,818 | 1.35 | % | ||||||||||||||||
Total interest-bearing deposits
|
505,266 | 2,120 | 0.85 | % | 452,238 | 2,499 | 1.11 | % | ||||||||||||||||
Borrowings
|
46,522 | 308 | 1.34 | % | 49,446 | 463 | 1.88 | % | ||||||||||||||||
Total interest-bearing liabilities
|
551,788 | 2,428 | 0.89 | % | 501,684 | 2,962 | 1.19 | % | ||||||||||||||||
Noninterest-bearing liabilities:
|
||||||||||||||||||||||||
Demand deposits
|
44,751 | 39,402 | ||||||||||||||||||||||
Other liabilities
|
5,270 | 8,102 | ||||||||||||||||||||||
Total liabilites
|
601,809 | 549,188 | ||||||||||||||||||||||
Stockholders’ equity
|
104,291 | 100,969 | ||||||||||||||||||||||
Total liabilities and stockholders’ equity
|
$ | 706,100 | $ | 650,157 | ||||||||||||||||||||
Net interest income
|
$ | 15,144 | $ | 15,473 | ||||||||||||||||||||
Interest rate spread
|
4.63 | % | 5.14 | % | ||||||||||||||||||||
Net interest margin
|
4.76 | % | 5.32 | % | ||||||||||||||||||||
(1) Includes loan fees in both interest income and the calculation of the yield on loans.
|
||||||||||||||||||||||||
(2) Calculations include non-accruing loans in average loan amounts outstanding.
|
32 |
For the Three Months Ended
|
||||||||||||
June 30,
|
||||||||||||
2013
|
2012
|
Change
|
||||||||||
(dollars in thousands)
|
||||||||||||
Account maintenance and deposit service fees
|
$ | 203 | $ | 206 | $ | (3 | ) | |||||
Income from bank-owned life insurance
|
148 | 347 | (199 | ) | ||||||||
Bargain purchase gain on acquisition
|
- | 3,484 | (3,484 | ) | ||||||||
Net loss on sale of available for sale securities
|
- | (13 | ) | 13 | ||||||||
Net impairment losses recognized in earnings
|
- | (235 | ) | 235 | ||||||||
Gain on other assets
|
13 | - | 13 | |||||||||
Other
|
84 | 81 | 3 | |||||||||
Total noninterest income
|
$ | 448 | $ | 3,870 | $ | (3,422 | ) | |||||
For the Six Months Ended
|
||||||||||||
June 30,
|
||||||||||||
2013 | 2012 |
Change
|
||||||||||
(dollars in thousands)
|
||||||||||||
Account maintenance and deposit service fees
|
$ | 396 | $ | 402 | $ | (6 | ) | |||||
Income from bank-owned life insurance
|
297 | 500 | (203 | ) | ||||||||
Bargain purchase gain on acquisition
|
- | 3,484 | (3,484 | ) | ||||||||
Gain on sale of loans
|
- | 657 | (657 | ) | ||||||||
Gain on other assets
|
13 | 14 | (1 | ) | ||||||||
Net gain (loss) on sale of available for sale securities
|
142 | (13 | ) | 155 | ||||||||
Net impairment losses recognized in earnings
|
(3 | ) | (237 | ) | 234 | |||||||
Other
|
139 | 135 | 4 | |||||||||
Total noninterest income
|
$ | 984 | $ | 4,942 | $ | (3,958 | ) |
33 |
For the Three Months Ended
|
||||||||||||
June 30,
|
||||||||||||
2013
|
2012
|
Change
|
||||||||||
(dollars in thousands)
|
||||||||||||
Salaries and benefits
|
$ | 2,176 | $ | 1,970 | $ | 206 | ||||||
Occupancy expenses
|
753 | 705 | 48 | |||||||||
Furniture and equipment expenses
|
171 | 143 | 28 | |||||||||
Amortization of core deposit intangible
|
123 | 228 | (105 | ) | ||||||||
Virginia franchise tax expense
|
115 | 145 | (30 | ) | ||||||||
Merger expenses
|
- | 349 | (349 | ) | ||||||||
FDIC assessment
|
224 | 142 | 82 | |||||||||
Data processing expense
|
154 | 162 | (8 | ) | ||||||||
Telephone and communication expense
|
163 | 133 | 30 | |||||||||
Change in FDIC indemnification asset
|
107 | 253 | (146 | ) | ||||||||
Net loss on other real estate owned
|
62 | 2,201 | (2,139 | ) | ||||||||
Other operating expenses
|
750 | 732 | 18 | |||||||||
Total noninterest expense
|
$ | 4,798 | $ | 7,163 | $ | (2,365 | ) | |||||
For the Six Months Ended
|
||||||||||||
June 30,
|
||||||||||||
2013 | 2012 |
Change
|
||||||||||
(dollars in thousands)
|
||||||||||||
Salaries and benefits
|
$ | 4,422 | $ | 3,795 | $ | 627 | ||||||
Occupancy expenses
|
1,513 | 1,287 | 226 | |||||||||
Furniture and equipment expenses
|
327 | 299 | 28 | |||||||||
Amortization of core deposit intangible
|
246 | 458 | (212 | ) | ||||||||
Virginia franchise tax expense
|
242 | 291 | (49 | ) | ||||||||
Merger expenses
|
- | 349 | (349 | ) | ||||||||
FDIC assessment
|
458 | 271 | 187 | |||||||||
Data processing expense
|
302 | 299 | 3 | |||||||||
Telephone and communication expense
|
341 | 235 | 106 | |||||||||
Change in FDIC indemnification asset
|
237 | 239 | (2 | ) | ||||||||
Net loss on other real estate owned
|
118 | 2,400 | (2,282 | ) | ||||||||
Other operating expenses
|
1,543 | 1,752 | (209 | ) | ||||||||
Total noninterest expense
|
$ | 9,749 | $ | 11,675 | $ | (1,926 | ) |
34 |
35 |
Covered
|
Non-covered
|
Total
|
Covered
|
Non-covered
|
Total
|
|||||||||||||||||||
Loans (1)
|
Loans
|
Loans
|
Loans (1)
|
Loans
|
Loans
|
|||||||||||||||||||
June 30, 2013
|
December 31, 2012
|
|||||||||||||||||||||||
Loans secured by real estate:
|
||||||||||||||||||||||||
Commercial real estate - owner-occupied
|
$ | 3,662 | $ | 93,837 | $ | 97,499 | $ | 4,143 | $ | 93,288 | $ | 97,431 | ||||||||||||
Commercial real estate - non-owner-occupied
|
6,028 | 140,929 | 146,957 | 10,246 | 130,152 | 140,398 | ||||||||||||||||||
Secured by farmland
|
103 | 517 | 620 | - | 1,479 | 1,479 | ||||||||||||||||||
Construction and land loans
|
52 | 31,076 | 31,128 | 1,261 | 44,946 | 46,207 | ||||||||||||||||||
Residential 1-4 family
|
19,067 | 62,544 | 81,611 | 21,005 | 61,319 | 82,324 | ||||||||||||||||||
Multi- family residential
|
598 | 21,924 | 22,522 | 614 | 18,774 | 19,388 | ||||||||||||||||||
Home equity lines of credit
|
28,954 | 7,776 | 36,730 | 31,292 | 9,178 | 40,470 | ||||||||||||||||||
Total real estate loans
|
58,464 | 358,603 | 417,067 | 68,561 | 359,136 | 427,697 | ||||||||||||||||||
Commercial loans
|
1,261 | 105,752 | 107,013 | 2,672 | 99,081 | 101,753 | ||||||||||||||||||
Consumer loans
|
87 | 1,338 | 1,425 | 88 | 1,623 | 1,711 | ||||||||||||||||||
Gross loans
|
59,812 | 465,693 | 525,505 | 71,321 | 459,840 | 531,161 | ||||||||||||||||||
Less deferred fees on loans
|
7 | (1,228 | ) | (1,221 | ) | 7 | (1,017 | ) | (1,010 | ) | ||||||||||||||
Loans, net of deferred fees
|
$ | 59,819 | $ | 464,465 | $ | 524,284 | $ | 71,328 | $ | 458,823 | $ | 530,151 | ||||||||||||
(1) Covered Loans were acquired in the Greater Atlantic transaction and are covered under an FDIC loss-share agreement.
|
36 |
June 30,
|
December 31,
|
|||||||
2013
|
2012
|
|||||||
Nonaccrual loans
|
$ | 6,275 | $ | 7,628 | ||||
Loans past due 90 days and accruing interest
|
- | - | ||||||
Total nonperforming loans
|
6,275 | 7,628 | ||||||
Other real estate owned
|
12,119 | 13,200 | ||||||
Total nonperforming assets
|
$ | 18,394 | $ | 20,828 | ||||
SBA guaranteed amounts included in nonaccrual loans
|
$ | 1,641 | $ | 2,607 | ||||
Allowance for loan losses to nonperforming loans
|
115.22 | % | 91.33 | % | ||||
Allowance for loan losses to total non-covered loans
|
1.55 | % | 1.52 | % | ||||
Nonperforming assets excluding SBA guaranteed loans to total non-covered assets
|
2.60 | % | 2.80 | % |
37 |
38 |
Rating
|
Amount
|
||||||
Service
|
Rating
|
(in thousands)
|
|||||
Moody’s
|
Aaa
|
$ | 505 | ||||
Moody’s
|
Aa2
|
3,208 | |||||
Moody’s
|
Aa3
|
724 | |||||
Standard & Poor’s
|
AAA
|
2,682 | |||||
Standard & Poor’s
|
AA
|
3,690 | |||||
Standard & Poor’s
|
AA-
|
2,237 | |||||
$ | 13,046 |
Previously
|
||||||||||||||||||||||||||||||||||||
% of Current
|
Recognized
|
|||||||||||||||||||||||||||||||||||
Defaults and
|
Cumulative
|
|||||||||||||||||||||||||||||||||||
Ratings
|
Estimated
|
Deferrals to
|
Other
|
|||||||||||||||||||||||||||||||||
Tranche
|
When Purchased
|
Current Ratings
|
Fair
|
Total
|
Comprehensive
|
|||||||||||||||||||||||||||||||
Security
|
Level
|
Moody’s
|
Fitch
|
Moody’s
|
Fitch
|
Par Value
|
Book Value
|
Value
|
Collateral
|
Loss (1)
|
||||||||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||||||||||||||
ALESCO VII A1B
|
Senior
|
Aaa
|
AAA
|
Baa3
|
BB
|
$ | 6,777 | $ | 6,124 | $ | 4,097 | 24 | % | $ | 281 | |||||||||||||||||||||
MMCF III B
|
Senior Sub
|
A3 | A- |
Ba1
|
CC
|
421 | 413 | 255 | 30 | % | 8 | |||||||||||||||||||||||||
7,198 | 6,537 | 4,352 | $ | 289 | ||||||||||||||||||||||||||||||||
Other Than Temporarily Impaired:
|
Cumulative Other
Comprehensive |
Cumulative
OTTI Related to |
||||||||||||||||||||||||||||||||||
TPREF FUNDING II
|
Mezzanine
|
A1 | A- |
Caa3
|
C | 1,500 | 515 | 520 | 44 | % | 626 | $ | 359 | |||||||||||||||||||||||
TRAP 2007-XII C1
|
Mezzanine
|
A3 | A | C | C | 2,132 | 56 | 140 | 39 | % | 783 | 1,293 | ||||||||||||||||||||||||
TRAP 2007-XIII D
|
Mezzanine
|
NR
|
A- |
NR
|
C | 2,039 | - | 103 | 29 | % | 7 | 2,032 | ||||||||||||||||||||||||
MMC FUNDING XVIII
|
Mezzanine
|
A3 | A- |
Ca
|
C | 1,081 | 27 | 254 | 30 | % | 363 | 691 | ||||||||||||||||||||||||
ALESCO V C1
|
Mezzanine
|
A2 | A | C | C | 2,150 | 475 | 548 | 23 | % | 1,014 | 661 | ||||||||||||||||||||||||
ALESCO XV C1
|
Mezzanine
|
A3 | A- | C | C | 3,210 | 30 | 152 | 35 | % | 621 | 2,559 | ||||||||||||||||||||||||
ALESCO XVI C
|
Mezzanine
|
A3 | A- | C | C | 2,136 | 119 | 576 | 16 | % | 837 | 1,180 | ||||||||||||||||||||||||
14,248 | 1,222 | 2,293 | $ | 4,251 | $ | 8,775 | ||||||||||||||||||||||||||||||
Total
|
$ | 21,446 | $ | 7,759 | $ | 6,645 |
39 |
40 |
Required
|
||||||||||||||||||||||||
For Capital
|
To Be Categorized as
|
|||||||||||||||||||||||
Actual
|
Adequacy Purposes
|
Well Capitalized
|
||||||||||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||||||||||||
June 30, 2013
|
||||||||||||||||||||||||
Southern National
|
||||||||||||||||||||||||
Tier 1 risk-based capital ratio
|
$ | 97,761 | 18.84 | % | $ | 20,754 | 4.00 | % | $ | 31,130 | 6.00 | % | ||||||||||||
Total risk-based capital ratio
|
104,243 | 20.09 | % | 41,507 | 8.00 | % | 51,884 | 10.00 | % | |||||||||||||||
Leverage ratio
|
97,761 | 13.92 | % | 28,097 | 4.00 | % | 35,121 | 5.00 | % | |||||||||||||||
Sonabank
|
||||||||||||||||||||||||
Tier 1 risk-based capital ratio
|
$ | 97,143 | 18.73 | % | $ | 20,742 | 4.00 | % | $ | 31,113 | 6.00 | % | ||||||||||||
Total risk-based capital ratio
|
103,620 | 19.98 | % | 41,484 | 8.00 | % | 51,855 | 10.00 | % | |||||||||||||||
Leverage ratio
|
97,143 | 13.84 | % | 28,085 | 4.00 | % | 35,107 | 5.00 | % | |||||||||||||||
December 31, 2012
|
||||||||||||||||||||||||
Southern National
|
||||||||||||||||||||||||
Tier 1 risk-based capital ratio
|
$ | 95,539 | 18.33 | % | $ | 20,853 | 4.00 | % | $ | 31,280 | 6.00 | % | ||||||||||||
Total risk-based capital ratio
|
102,048 | 19.57 | % | 41,707 | 8.00 | % | 52,133 | 10.00 | % | |||||||||||||||
Leverage ratio
|
95,539 | 13.69 | % | 27,908 | 4.00 | % | 34,884 | 5.00 | % | |||||||||||||||
Sonabank
|
||||||||||||||||||||||||
Tier 1 risk-based capital ratio
|
$ | 94,754 | 18.18 | % | $ | 20,842 | 4.00 | % | $ | 31,264 | 6.00 | % | ||||||||||||
Total risk-based capital ratio
|
101,260 | 19.43 | % | 41,685 | 8.00 | % | 52,106 | 10.00 | % | |||||||||||||||
Leverage ratio
|
94,754 | 13.59 | % | 27,896 | 4.00 | % | 34,871 | 5.00 | % |
41 |
42 |
Sensitivity of Economic Value of Equity
|
||||||||||||||||||||
As of June 30, 2013
|
||||||||||||||||||||
Economic Value of
|
||||||||||||||||||||
Change in
|
Economic Value of Equity
|
Equity as a % of
|
||||||||||||||||||
Interest Rates
|
||||||||||||||||||||
in Basis Points
|
$ Change
|
% Change
|
Total
|
Equity
|
||||||||||||||||
(Rate Shock)
|
Amount
|
From Base
|
From Base
|
Assets
|
Book Value
|
|||||||||||||||
(Dollar amounts in thousands)
|
||||||||||||||||||||
Up 400
|
$ | 100,937 | $ | (13,373 | ) | -11.70 | % | 14.28 | % | 96.19 | % | |||||||||
Up 300
|
103,061 | (11,249 | ) | -9.84 | % | 14.58 | % | 98.21 | % | |||||||||||
Up 200
|
106,221 | (8,089 | ) | -7.08 | % | 15.03 | % | 101.22 | % | |||||||||||
Up 100
|
111,010 | (3,300 | ) | -2.89 | % | 15.71 | % | 105.79 | % | |||||||||||
Base
|
114,310 | - | 0.00 | % | 16.17 | % | 108.93 | % | ||||||||||||
Down 100
|
110,949 | (3,361 | ) | -2.94 | % | 15.70 | % | 105.73 | % | |||||||||||
Down 200
|
107,258 | (7,052 | ) | -6.17 | % | 15.18 | % | 102.21 | % | |||||||||||
Sensitivity of Economic Value of Equity
|
||||||||||||||||||||
As of December 31, 2012
|
||||||||||||||||||||
Economic Value of
|
||||||||||||||||||||
Change in
|
Economic Value of Equity
|
Equity as a % of
|
||||||||||||||||||
Interest Rates
|
||||||||||||||||||||
in Basis Points
|
$ Change
|
% Change
|
Total
|
Equity
|
||||||||||||||||
(Rate Shock)
|
Amount
|
From Base
|
From Base
|
Assets
|
Book Value
|
|||||||||||||||
(Dollar amounts in thousands)
|
||||||||||||||||||||
Up 400
|
$ | 105,710 | $ | (11,198 | ) | -9.58 | % | 14.60 | % | 102.46 | % | |||||||||
Up 300
|
107,601 | (9,307 | ) | -7.96 | % | 14.87 | % | 104.29 | % | |||||||||||
Up 200
|
110,442 | (6,466 | ) | -5.53 | % | 15.26 | % | 107.04 | % | |||||||||||
Up 100
|
115,426 | (1,482 | ) | -1.27 | % | 15.95 | % | 111.87 | % | |||||||||||
Base
|
116,908 | - | 0.00 | % | 16.15 | % | 113.31 | % | ||||||||||||
Down 100
|
111,153 | (5,755 | ) | -4.92 | % | 15.36 | % | 107.73 | % | |||||||||||
Down 200
|
111,252 | (5,656 | ) | -4.84 | % | 15.37 | % | 107.83 | % |
43 |
Sensitivity of Net Interest Income
|
||||||||||||||||
As of June 30, 2013
|
||||||||||||||||
Change in
|
Adjusted Net Interest Income
|
Net Interest Margin
|
||||||||||||||
Interest Rates
|
||||||||||||||||
in Basis Points
|
$ Change
|
% Change
|
||||||||||||||
(Rate Shock)
|
Amount
|
From Base
|
Percent
|
From Base
|
||||||||||||
(Dollar amounts in thousands)
|
||||||||||||||||
Up 400
|
$ | 32,639 | $ | 6,643 | 4.90 | % | 0.98 | % | ||||||||
Up 300
|
30,496 | 4,500 | 4.58 | % | 0.66 | % | ||||||||||
Up 200
|
28,488 | 2,492 | 4.29 | % | 0.37 | % | ||||||||||
Up 100
|
26,954 | 958 | 4.06 | % | 0.14 | % | ||||||||||
Base
|
25,996 | - | 3.92 | % | 0.00 | % | ||||||||||
Down 100
|
25,757 | (239 | ) | 3.89 | % | -0.03 | % | |||||||||
Down 200
|
25,281 | (715 | ) | 3.82 | % | -0.10 | % | |||||||||
Sensitivity of Net Interest Income
|
||||||||||||||||
As of December 31, 2012
|
||||||||||||||||
Change in
|
Adjusted Net Interest Income
|
Net Interest Margin
|
||||||||||||||
Interest Rates
|
||||||||||||||||
in Basis Points
|
$ Change
|
% Change
|
||||||||||||||
(Rate Shock)
|
Amount
|
From Base
|
Percent
|
From Base
|
||||||||||||
(Dollar amounts in thousands)
|
||||||||||||||||
Up 400
|
$ | 34,211 | $ | 6,829 | 4.93 | % | 0.97 | % | ||||||||
Up 300
|
32,008 | 4,626 | 4.62 | % | 0.66 | % | ||||||||||
Up 200
|
29,925 | 2,543 | 4.33 | % | 0.37 | % | ||||||||||
Up 100
|
28,423 | 1,041 | 4.11 | % | 0.15 | % | ||||||||||
Base
|
27,382 | - | 3.96 | % | 0.00 | % | ||||||||||
Down 100
|
27,663 | 281 | 4.00 | % | 0.04 | % | ||||||||||
Down 200
|
27,755 | 373 | 4.02 | % | 0.06 | % |
44 |
45 |
46 |
Exhibit No.
|
Description | ||
31.1*
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
||
31.2*
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
||
32.1**
|
Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
||
* | Filed with this Quarterly Report on Form 10-Q | ||
** | Furnished with this Quarterly Report on Form 10-Q |
47 |
Southern National Bancorp of Virginia, Inc.
|
||||
(Registrant) | ||||
August 9, 2013
|
/s/ Georgia S. Derrico | |||
(Date) | Georgia S. Derrico, | |||
Chairman of the Board and Chief Executive Officer | ||||
August 9, 2013 | /s/ William H. Lagos | |||
(Date) | William H. Lagos, | |||
Senior Vice President and Chief Financial Officer | ||||
48 |
CERTIFICATIONS
|
I, Georgia S. Derrico, certify that:
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: August 9, 2013 | ||
/s/ Georgia S. Derrico | ||
Georgia S. Derrico, | ||
Chairman of the Board and Chief Executive Officer |
CERTIFICATIONS
|
I, William H. Lagos, certify that:
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: August 9, 2013 | ||
/s/ William H. Lagos | ||
William H. Lagos, | ||
Senior Vice President and Chief Financial Officer |
/s/ Georgia S. Derrico | |
Georgia S. Derrico, Chief Executive Officer | |
/s/ William H. Lagos | |
William H. Lagos, Chief Financial Officer | |
August 9, 2013 |
STOCK- BASED COMPENSATION (Tables)
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6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of weighted-average assumptions used to value options |
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Schedule of activity in the stock option plan |
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FAIR VALUE - Assets measured at fair value on recurring basis (Details) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2013
|
Dec. 31, 2012
|
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Available for sale securities | ||
Securities available for sale, at fair value | $ 2,034 | $ 2,391 |
Fair Value, Measurements, Recurring | Fair Value
|
||
Available for sale securities | ||
Securities available for sale, at fair value | 2,391 | |
Fair Value, Measurements, Recurring | Fair Value | Obligations of states and political subdivisions
|
||
Available for sale securities | ||
Securities available for sale, at fair value | 2,034 | 2,289 |
Fair Value, Measurements, Recurring | Fair Value | FHLMC preferred stock
|
||
Available for sale securities | ||
Securities available for sale, at fair value | 102 | |
Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1)
|
||
Available for sale securities | ||
Securities available for sale, at fair value | 102 | |
Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Obligations of states and political subdivisions
|
||
Available for sale securities | ||
Securities available for sale, at fair value | ||
Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | FHLMC preferred stock
|
||
Available for sale securities | ||
Securities available for sale, at fair value | 102 | |
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2)
|
||
Available for sale securities | ||
Securities available for sale, at fair value | 2,289 | |
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | Obligations of states and political subdivisions
|
||
Available for sale securities | ||
Securities available for sale, at fair value | 2,034 | 2,289 |
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | FHLMC preferred stock
|
||
Available for sale securities | ||
Securities available for sale, at fair value | ||
Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3)
|
||
Available for sale securities | ||
Securities available for sale, at fair value | ||
Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3) | Obligations of states and political subdivisions
|
||
Available for sale securities | ||
Securities available for sale, at fair value | ||
Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3) | FHLMC preferred stock
|
||
Available for sale securities | ||
Securities available for sale, at fair value |
SECURITIES
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SECURITIES | 3. SECURITIES
The amortized cost and fair value of available for sale securities and the related gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) were as follows (in thousands):
The amortized cost, unrecognized gains and losses, and fair value of securities held to maturity were as follows (in thousands):
The amortized cost amounts are net of recognized other than temporary impairment.
During the six months ended June 30, 2013, we sold 55 thousand shares of available for sale FHLMC preferred stock resulting in a gain of $142 thousand.
The fair value and carrying amount, if different, of debt securities as of June 30, 2013, by contractual maturity were as follows (in thousands). Securities not due at a single maturity date, primarily mortgage-backed securities and collateralized mortgage obligations, are shown separately.
Securities with a carrying amount of approximately $66.7 million and $62.3 million at June 30, 2013 and December 31, 2012, respectively, were pledged to secure public deposits, repurchase agreements and a line of credit for advances from the Federal Home Loan Bank of Atlanta (“FHLB”).
Southern National monitors the portfolio for indicators of other than temporary impairment. At June 30, 2013 and December 31, 2012, certain securities’ fair values were below cost. As outlined in the table below, there were securities with fair values totaling approximately $63.2 million in the portfolio with the carrying value exceeding the estimated fair value that are considered temporarily impaired at June 30, 2013. Because the decline in fair value is attributable to changes in interest rates and market illiquidity, and not credit quality, and because we do not have the intent to sell these securities and it is likely that we will not be required to sell the securities before their anticipated recovery, management does not consider these securities to be other-than-temporarily impaired as of June 30, 2013. The following tables present information regarding securities in a continuous unrealized loss position as of June 30, 2013 and December 31, 2012 (in thousands) by duration of time in a loss position:
As of June 30, 2013, we owned pooled trust preferred securities as follows:
(1) Pre-tax, and represents unrealized losses at date of transfer from available-for-sale to held-to-maturity, net of accretion
(2) Pre-tax
Each of these securities has been evaluated for other than temporary impairment (“OTTI”). In performing a detailed cash flow analysis of each security, Sonabank works with independent third parties to estimate expected cash flows and assist with the evaluation of other than temporary impairment. The cash flow analyses performed included the following assumptions:
We recognized no OTTI charges during the second quarter of 2013 and recognized OTTI charges of $3 thousand during the first six months of 2013 compared to OTTI charges related to credit on the trust preferred securities totaling $235 thousand and $237 thousand during the same periods of 2012.
The following table presents a roll forward of the credit losses on our securities held to maturity recognized in earnings for the six months ended June 30, 2013 and 2012 (in thousands):
Changes in accumulated other comprehensive income by component for the three and six months ended June 30, 2013 are shown in the table below. All amounts are net of tax (in thousands).
|
STOCK- BASED COMPENSATION - Weighted-average assumptions (Details) (Stock Options, USD $)
|
6 Months Ended |
---|---|
Jun. 30, 2013
|
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Stock Options
|
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Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected life | 10 years |
Expected volatility | 34.21% |
Risk-free interest rate | 2.42% |
Weighted average fair value per option granted | $ 3.58 |
Dividend yield | 1.29% |
FAIR VALUE (Details Textuals) (Trust Preferred Securities Classified As Held-To-Maturity)
|
6 Months Ended |
---|---|
Jun. 30, 2013
|
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Minimum
|
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Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Liquidity premiums | 2.00% |
Adjusted discount rates | 10.42% |
Maximum
|
|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Liquidity premiums | 5.00% |
Adjusted discount rates | 14.33% |
SECURITIES (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of amortized cost and fair value of securities available-for-sale |
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Schedule of carrying amount and fair value of securities held-to-maturity |
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Schedule of fair value and carrying amount, if different, of debt securities, by contractual maturity |
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Schedule of present information regarding securities in a continuous unrealized loss position by duration of time in a loss position |
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Schedule of owned pooled trust preferred securities |
(1) Pre-tax, and represents unrealized losses at date of transfer from available-for-sale to held-to-maturity, net of accretion
(2) Pre-tax
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Schedule of the credit losses for the trust preferred securities and the residential collateralized mortgage obligation recognized in earnings |
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Schedule of changes in accumulated other comprehensive income by component |
|
LOANS AND ALLOWANCE FOR LOAN LOSSES (Details Textuals 2) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2013
|
---|---|
Construction and Land Loans
|
|
Financing Receivable, Impaired [Line Items] | |
Amount of modified unpaid principal balances | $ 1,300 |
Commercial real estate - non-owner occupied
|
|
Financing Receivable, Impaired [Line Items] | |
Amount of modified unpaid principal balances | $ 712 |
FAIR VALUE (Details Textuals 1) (Fair Value, Measurements, Nonrecurring, Other Residential Collateralized Mortgage Obligation Classified as Held-to Maturity)
|
3 Months Ended |
---|---|
Jun. 30, 2013
|
|
Fair Value, Measurements, Nonrecurring | Other Residential Collateralized Mortgage Obligation Classified as Held-to Maturity
|
|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Prepayment speed | 3.70% |
Default rate | 9.20% |
Loss severity | 47.00% |
Accounting yield | 2.57% |
SECURITIES - Amortized cost and fair value of securities (Details) (USD $)
In Thousands, unless otherwise specified |
6 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2013
|
Dec. 31, 2012
|
|
Schedule Of Available For Sale and Held To Maturity Securities [Line Items] | ||
Amortized Cost | $ 2,325 | |
Gross Unrealized Gains | 88 | |
Gross Unrealized Losses | (22) | |
Securities available for sale, at fair value | 2,034 | 2,391 |
Obligations of states and political subdivisions
|
||
Schedule Of Available For Sale and Held To Maturity Securities [Line Items] | ||
Amortized Cost | 2,305 | 2,309 |
Gross Unrealized Gains | 2 | |
Gross Unrealized Losses | (271) | (22) |
Securities available for sale, at fair value | 2,034 | 2,289 |
FHLMC preferred stock
|
||
Schedule Of Available For Sale and Held To Maturity Securities [Line Items] | ||
Amortized Cost | 16 | |
Gross Unrealized Gains | 86 | |
Gross Unrealized Losses | ||
Securities available for sale, at fair value | $ 102 |
STOCK- BASED COMPENSATION (Detail Textuals) (USD $)
|
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 63,000 | $ 47,000 | $ 126,000 | $ 96,000 |
Unrecognized compensation expense associated with the stock options | $ 1,100,000 | $ 1,100,000 | ||
Unrecognized compensation cost weighted average recognition period | 4 years | |||
Stock Options
|
||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted (in shares) | 120,250 | |||
Stock Option Plan 2004 | Stock Options
|
||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares authorized for reservation (in shares) | 302,500 | 302,500 | ||
Options to purchase an aggregate common stock (in shares) | 302,500 | 302,500 | ||
Stock Awards and Incentive Plan 2010 | Stock Options
|
||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares authorized for reservation (in shares) | 700,000 | 700,000 |
LOANS AND ALLOWANCE FOR LOAN LOSSES (Details Textuals) (Total Loans, USD $)
In Millions, unless otherwise specified |
Jun. 30, 2013
|
Dec. 31, 2012
|
---|---|---|
Covered loans | Greater Atlantic Bank
|
||
Mortgage loans on real estate: | ||
Loss sharing agreement | $ 143.4 | |
Non-covered Loans | HarVest Bank of Maryland
|
||
Mortgage loans on real estate: | ||
Loss sharing agreement | 47.8 | |
Accretable discount on the acquired covered loans | $ 10.1 | $ 11.7 |
SECURITIES (Details Textuals 1) (USD $)
Share data in Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
FHLMC preferred stock
|
Jun. 30, 2013
Federal Home Loan Bank of Atlanta
|
Dec. 31, 2012
Federal Home Loan Bank of Atlanta
|
|
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||||||
Securities with a carrying amount were pledged to secure public deposits | $ 66,700,000 | $ 62,300,000 | ||||
Temporarily impaired securities | 235,000 | 3,000 | 237,000 | 63,200,000 | ||
Gain on sale of preferred stock | $ 142,000 | |||||
Number of preferred stock sold | 55 |
LOANS AND ALLOWANCE FOR LOAN LOSSES - Aging of recorded investment (Details 3) (Total Loans, USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2013
|
Dec. 31, 2012
|
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---|---|---|---|---|---|---|---|---|---|---|
Financing Receivable, Impaired [Line Items] | ||||||||||
Recorded Investment, 30 to 59 Days Past Due | $ 12,262 | $ 8,817 | ||||||||
Recorded Investment, 60 - 89 Days Past Due | 5,764 | 5,400 | ||||||||
Recorded Investment, 90 Days or More | ||||||||||
Recorded Investment, Total Past Due | 18,026 | 14,217 | ||||||||
Recorded Investment, Nonaccrual Loans | 8,167 | 11,197 | ||||||||
Recorded Investment, Loans Not Past Due | 499,312 | 505,747 | ||||||||
Gross loans | 525,505 | 531,161 | ||||||||
Commercial real estate - owner occupied
|
||||||||||
Financing Receivable, Impaired [Line Items] | ||||||||||
Recorded Investment, 30 to 59 Days Past Due | 2,630 | 2,398 | ||||||||
Recorded Investment, 60 - 89 Days Past Due | ||||||||||
Recorded Investment, 90 Days or More | ||||||||||
Recorded Investment, Total Past Due | 2,630 | 2,398 | ||||||||
Recorded Investment, Nonaccrual Loans | 580 | |||||||||
Recorded Investment, Loans Not Past Due | 94,869 | 94,453 | ||||||||
Gross loans | 97,499 | 97,431 | ||||||||
Commercial real estate - non-owner occupied
|
||||||||||
Financing Receivable, Impaired [Line Items] | ||||||||||
Recorded Investment, 30 to 59 Days Past Due | 1,674 | [1] | 1,012 | [1] | ||||||
Recorded Investment, 60 - 89 Days Past Due | [1] | 2,321 | [1] | |||||||
Recorded Investment, 90 Days or More | [1] | [1] | ||||||||
Recorded Investment, Total Past Due | 1,674 | [1] | 3,333 | [1] | ||||||
Recorded Investment, Nonaccrual Loans | 268 | [1] | 626 | [1] | ||||||
Recorded Investment, Loans Not Past Due | 168,157 | [1] | 157,306 | [1] | ||||||
Gross loans | 170,099 | [1] | 161,265 | [1] | ||||||
Construction and land development
|
||||||||||
Financing Receivable, Impaired [Line Items] | ||||||||||
Recorded Investment, 30 to 59 Days Past Due | 107 | |||||||||
Recorded Investment, 60 - 89 Days Past Due | 2,373 | |||||||||
Recorded Investment, 90 Days or More | ||||||||||
Recorded Investment, Total Past Due | 2,373 | 107 | ||||||||
Recorded Investment, Nonaccrual Loans | 1,275 | 1,535 | ||||||||
Recorded Investment, Loans Not Past Due | 27,480 | 44,565 | ||||||||
Gross loans | 31,128 | 46,207 | ||||||||
Commercial loans
|
||||||||||
Financing Receivable, Impaired [Line Items] | ||||||||||
Recorded Investment, 30 to 59 Days Past Due | 1,396 | 1,307 | ||||||||
Recorded Investment, 60 - 89 Days Past Due | 866 | 191 | ||||||||
Recorded Investment, 90 Days or More | ||||||||||
Recorded Investment, Total Past Due | 2,262 | 1,498 | ||||||||
Recorded Investment, Nonaccrual Loans | 4,132 | 6,432 | ||||||||
Recorded Investment, Loans Not Past Due | 100,619 | 93,823 | ||||||||
Gross loans | 107,013 | 101,753 | ||||||||
Residential 1-4 family
|
||||||||||
Financing Receivable, Impaired [Line Items] | ||||||||||
Recorded Investment, 30 to 59 Days Past Due | 6,557 | 3,843 | ||||||||
Recorded Investment, 60 - 89 Days Past Due | 2,523 | 2,888 | ||||||||
Recorded Investment, 90 Days or More | ||||||||||
Recorded Investment, Total Past Due | 9,080 | 6,731 | ||||||||
Recorded Investment, Nonaccrual Loans | 2,492 | 2,024 | ||||||||
Recorded Investment, Loans Not Past Due | 106,769 | 114,039 | ||||||||
Gross loans | 118,341 | 122,794 | ||||||||
Other consumer loans
|
||||||||||
Financing Receivable, Impaired [Line Items] | ||||||||||
Recorded Investment, 30 to 59 Days Past Due | 5 | 150 | ||||||||
Recorded Investment, 60 - 89 Days Past Due | 2 | |||||||||
Recorded Investment, 90 Days or More | ||||||||||
Recorded Investment, Total Past Due | 7 | 150 | ||||||||
Recorded Investment, Nonaccrual Loans | ||||||||||
Recorded Investment, Loans Not Past Due | 1,418 | 1,561 | ||||||||
Gross loans | 1,425 | 1,711 | ||||||||
Covered loans
|
||||||||||
Financing Receivable, Impaired [Line Items] | ||||||||||
Recorded Investment, 30 to 59 Days Past Due | 1,043 | 996 | ||||||||
Recorded Investment, 60 - 89 Days Past Due | 43 | 2,321 | ||||||||
Recorded Investment, 90 Days or More | ||||||||||
Recorded Investment, Total Past Due | 1,086 | 3,317 | ||||||||
Recorded Investment, Nonaccrual Loans | 1,892 | 3,569 | ||||||||
Recorded Investment, Loans Not Past Due | 56,834 | 64,435 | ||||||||
Gross loans | 59,812 | [2] | 71,321 | [2] | ||||||
Covered loans | Commercial real estate - owner occupied
|
||||||||||
Financing Receivable, Impaired [Line Items] | ||||||||||
Recorded Investment, 30 to 59 Days Past Due | 337 | 373 | ||||||||
Recorded Investment, 60 - 89 Days Past Due | ||||||||||
Recorded Investment, 90 Days or More | ||||||||||
Recorded Investment, Total Past Due | 337 | 373 | ||||||||
Recorded Investment, Nonaccrual Loans | ||||||||||
Recorded Investment, Loans Not Past Due | 3,325 | 3,770 | ||||||||
Gross loans | 3,662 | 4,143 | ||||||||
Covered loans | Commercial real estate - non-owner occupied
|
||||||||||
Financing Receivable, Impaired [Line Items] | ||||||||||
Recorded Investment, 30 to 59 Days Past Due | 389 | [1] | 151 | [1] | ||||||
Recorded Investment, 60 - 89 Days Past Due | [1] | 2,321 | [1] | |||||||
Recorded Investment, 90 Days or More | [1] | [1] | ||||||||
Recorded Investment, Total Past Due | 389 | [1] | 2,472 | [1] | ||||||
Recorded Investment, Nonaccrual Loans | 268 | [1] | [1] | |||||||
Recorded Investment, Loans Not Past Due | 6,072 | [1] | 8,388 | [1] | ||||||
Gross loans | 6,729 | [1] | 10,860 | [1] | ||||||
Covered loans | Construction and land development
|
||||||||||
Financing Receivable, Impaired [Line Items] | ||||||||||
Recorded Investment, 30 to 59 Days Past Due | 72 | |||||||||
Recorded Investment, 60 - 89 Days Past Due | 41 | |||||||||
Recorded Investment, 90 Days or More | ||||||||||
Recorded Investment, Total Past Due | 41 | 72 | ||||||||
Recorded Investment, Nonaccrual Loans | 51 | |||||||||
Recorded Investment, Loans Not Past Due | 11 | 1,138 | ||||||||
Gross loans | 52 | 1,261 | ||||||||
Covered loans | Commercial loans
|
||||||||||
Financing Receivable, Impaired [Line Items] | ||||||||||
Recorded Investment, 30 to 59 Days Past Due | 143 | |||||||||
Recorded Investment, 60 - 89 Days Past Due | ||||||||||
Recorded Investment, 90 Days or More | ||||||||||
Recorded Investment, Total Past Due | 143 | |||||||||
Recorded Investment, Nonaccrual Loans | 1,963 | |||||||||
Recorded Investment, Loans Not Past Due | 1,261 | 566 | ||||||||
Gross loans | 1,261 | 2,672 | ||||||||
Covered loans | Residential 1-4 family
|
||||||||||
Financing Receivable, Impaired [Line Items] | ||||||||||
Recorded Investment, 30 to 59 Days Past Due | 317 | 257 | ||||||||
Recorded Investment, 60 - 89 Days Past Due | ||||||||||
Recorded Investment, 90 Days or More | ||||||||||
Recorded Investment, Total Past Due | 317 | 257 | ||||||||
Recorded Investment, Nonaccrual Loans | 1,624 | 1,555 | ||||||||
Recorded Investment, Loans Not Past Due | 46,080 | 50,485 | ||||||||
Gross loans | 48,021 | 52,297 | ||||||||
Covered loans | Other consumer loans
|
||||||||||
Financing Receivable, Impaired [Line Items] | ||||||||||
Recorded Investment, 30 to 59 Days Past Due | ||||||||||
Recorded Investment, 60 - 89 Days Past Due | 2 | |||||||||
Recorded Investment, 90 Days or More | ||||||||||
Recorded Investment, Total Past Due | 2 | |||||||||
Recorded Investment, Nonaccrual Loans | ||||||||||
Recorded Investment, Loans Not Past Due | 85 | 88 | ||||||||
Gross loans | 87 | 88 | ||||||||
Non-covered Loans
|
||||||||||
Financing Receivable, Impaired [Line Items] | ||||||||||
Recorded Investment, 30 to 59 Days Past Due | 11,219 | 7,821 | ||||||||
Recorded Investment, 60 - 89 Days Past Due | 5,721 | 3,079 | ||||||||
Recorded Investment, 90 Days or More | ||||||||||
Recorded Investment, Total Past Due | 16,940 | 10,900 | ||||||||
Recorded Investment, Nonaccrual Loans | 6,275 | 7,628 | ||||||||
Recorded Investment, Loans Not Past Due | 442,478 | 441,312 | ||||||||
Gross loans | 465,693 | 459,840 | ||||||||
Non-covered Loans | Commercial real estate - owner occupied
|
||||||||||
Financing Receivable, Impaired [Line Items] | ||||||||||
Recorded Investment, 30 to 59 Days Past Due | 2,293 | 2,025 | ||||||||
Recorded Investment, 60 - 89 Days Past Due | ||||||||||
Recorded Investment, 90 Days or More | ||||||||||
Recorded Investment, Total Past Due | 2,293 | 2,025 | ||||||||
Recorded Investment, Nonaccrual Loans | 580 | |||||||||
Recorded Investment, Loans Not Past Due | 91,544 | 90,683 | ||||||||
Gross loans | 93,837 | 93,288 | ||||||||
Non-covered Loans | Commercial real estate - non-owner occupied
|
||||||||||
Financing Receivable, Impaired [Line Items] | ||||||||||
Recorded Investment, 30 to 59 Days Past Due | 1,285 | [1] | 861 | [1] | ||||||
Recorded Investment, 60 - 89 Days Past Due | [1] | [1] | ||||||||
Recorded Investment, 90 Days or More | [1] | [1] | ||||||||
Recorded Investment, Total Past Due | 1,285 | [1] | 861 | [1] | ||||||
Recorded Investment, Nonaccrual Loans | [1] | 626 | [1] | |||||||
Recorded Investment, Loans Not Past Due | 162,085 | [1] | 148,918 | [1] | ||||||
Gross loans | 163,370 | [1] | 150,405 | [1] | ||||||
Non-covered Loans | Construction and land development
|
||||||||||
Financing Receivable, Impaired [Line Items] | ||||||||||
Recorded Investment, 30 to 59 Days Past Due | 35 | |||||||||
Recorded Investment, 60 - 89 Days Past Due | 2,332 | |||||||||
Recorded Investment, 90 Days or More | ||||||||||
Recorded Investment, Total Past Due | 2,332 | 35 | ||||||||
Recorded Investment, Nonaccrual Loans | 1,275 | 1,484 | ||||||||
Recorded Investment, Loans Not Past Due | 27,469 | 43,427 | ||||||||
Gross loans | 31,076 | [3] | 44,946 | [3] | ||||||
Non-covered Loans | Commercial loans
|
||||||||||
Financing Receivable, Impaired [Line Items] | ||||||||||
Recorded Investment, 30 to 59 Days Past Due | 1,396 | 1,164 | ||||||||
Recorded Investment, 60 - 89 Days Past Due | 866 | 191 | ||||||||
Recorded Investment, 90 Days or More | ||||||||||
Recorded Investment, Total Past Due | 2,262 | 1,355 | ||||||||
Recorded Investment, Nonaccrual Loans | 4,132 | 4,469 | ||||||||
Recorded Investment, Loans Not Past Due | 99,358 | 93,257 | ||||||||
Gross loans | 105,752 | 99,081 | ||||||||
Non-covered Loans | Residential 1-4 family
|
||||||||||
Financing Receivable, Impaired [Line Items] | ||||||||||
Recorded Investment, 30 to 59 Days Past Due | 6,240 | 3,586 | ||||||||
Recorded Investment, 60 - 89 Days Past Due | 2,523 | 2,888 | ||||||||
Recorded Investment, 90 Days or More | ||||||||||
Recorded Investment, Total Past Due | 8,763 | 6,474 | ||||||||
Recorded Investment, Nonaccrual Loans | 868 | 469 | ||||||||
Recorded Investment, Loans Not Past Due | 60,689 | 63,554 | ||||||||
Gross loans | 70,320 | 70,497 | ||||||||
Non-covered Loans | Other consumer loans
|
||||||||||
Financing Receivable, Impaired [Line Items] | ||||||||||
Recorded Investment, 30 to 59 Days Past Due | 5 | 150 | ||||||||
Recorded Investment, 60 - 89 Days Past Due | ||||||||||
Recorded Investment, 90 Days or More | ||||||||||
Recorded Investment, Total Past Due | 5 | 150 | ||||||||
Recorded Investment, Nonaccrual Loans | ||||||||||
Recorded Investment, Loans Not Past Due | 1,333 | 1,473 | ||||||||
Gross loans | $ 1,338 | $ 1,623 | ||||||||
|
FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK (Detail Textuals) (USD $)
In Millions, unless otherwise specified |
Jun. 30, 2013
|
Dec. 31, 2012
|
---|---|---|
Line of Credit Facility [Line Items] | ||
Letter of Credit outstanding | $ 6.8 | $ 10.3 |
SECURITIES - Owned pooled trust preferred securities (Details 4) (USD $)
In Thousands, unless otherwise specified |
6 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Dec. 31, 2012
|
||||||
Other than temporarily impaired | ||||||||
Cumulative Other Comprehensive Loss | $ (4) | |||||||
Cumulative OTTI Related to Credit Loss | ||||||||
Estimated fair value | 79,635 | 84,827 | ||||||
Trust preferred securities
|
||||||||
Security | ||||||||
Par value - security | 7,198 | |||||||
Book value - security | 6,537 | |||||||
Estimated fair value - security | 4,352 | |||||||
Previously Recognized Cumulative Other Comprehensive Loss | 289 | [1] | ||||||
Other than temporarily impaired | ||||||||
Par value - other than temporarily impaired | 14,248 | |||||||
Book value - other than temporarily impaired | 1,222 | |||||||
Estimated fair value - other than temporarily impaired | 2,293 | |||||||
Cumulative Other Comprehensive Loss | 4,251 | [2] | ||||||
Cumulative OTTI Related to Credit Loss | 8,775 | [2] | ||||||
Par value | 21,446 | |||||||
Book value | 7,759 | |||||||
Estimated fair value | 6,645 | 6,923 | ||||||
Trust preferred securities | ALESCO VII A1B | Rating Of Moody Aaa Fitch AAA When Purchased and Current Moody Baa3 Fitch BB
|
||||||||
Security | ||||||||
Par value - security | 6,777 | |||||||
Book value - security | 6,124 | |||||||
Estimated fair value - security | 4,097 | |||||||
Previously Recognized Cumulative Other Comprehensive Loss | 281 | [1] | ||||||
Other than temporarily impaired | ||||||||
Percentage of current defaults and deferrals | 24.00% | |||||||
Trust preferred securities | MMCF III B Senior Sub | Rating Of Moody A3 Fitch A- When Purchased and Current Moody Ba1 Fitch CC
|
||||||||
Security | ||||||||
Par value - security | 421 | |||||||
Book value - security | 413 | |||||||
Estimated fair value - security | 255 | |||||||
Previously Recognized Cumulative Other Comprehensive Loss | 8 | [1] | ||||||
Other than temporarily impaired | ||||||||
Percentage of current defaults and deferrals | 30.00% | |||||||
Trust preferred securities | TPREF FUNDING II Mezzanine | Rating Of Moody A1 Fitch A- When Purchased and Current Moody Caa3 Fitch C
|
||||||||
Other than temporarily impaired | ||||||||
Par value - other than temporarily impaired | 1,500 | |||||||
Book value - other than temporarily impaired | 515 | |||||||
Estimated fair value - other than temporarily impaired | 520 | |||||||
Cumulative Other Comprehensive Loss | 626 | [2] | ||||||
Cumulative OTTI Related to Credit Loss | 359 | [2] | ||||||
Percentage of current defaults and deferrals | 44.00% | |||||||
Trust preferred securities | TRAP 2007-XII C1 Mezzanine | Rating Of Moody A3 Fitch A When Purchased and Current Moody C Fitch C
|
||||||||
Other than temporarily impaired | ||||||||
Par value - other than temporarily impaired | 2,132 | |||||||
Book value - other than temporarily impaired | 56 | |||||||
Estimated fair value - other than temporarily impaired | 140 | |||||||
Cumulative Other Comprehensive Loss | 783 | [2] | ||||||
Cumulative OTTI Related to Credit Loss | 1,293 | [2] | ||||||
Percentage of current defaults and deferrals | 39.00% | |||||||
Trust preferred securities | TRAP 2007-XIII D Mezzanine | Rating Of Fitch A- When Purchased and Current Fitch C
|
||||||||
Other than temporarily impaired | ||||||||
Par value - other than temporarily impaired | 2,039 | |||||||
Book value - other than temporarily impaired | ||||||||
Estimated fair value - other than temporarily impaired | 103 | |||||||
Cumulative Other Comprehensive Loss | 7 | [2] | ||||||
Cumulative OTTI Related to Credit Loss | 2,032 | [2] | ||||||
Percentage of current defaults and deferrals | 29.00% | |||||||
Trust preferred securities | MMC FUNDING XVIII Mezzanine | Rating Of Moody A3 Fitch A- When Purchased and Current Moody Ca Fitch C
|
||||||||
Other than temporarily impaired | ||||||||
Par value - other than temporarily impaired | 1,081 | |||||||
Book value - other than temporarily impaired | 27 | |||||||
Estimated fair value - other than temporarily impaired | 254 | |||||||
Cumulative Other Comprehensive Loss | 363 | [2] | ||||||
Cumulative OTTI Related to Credit Loss | 691 | [2] | ||||||
Percentage of current defaults and deferrals | 30.00% | |||||||
Trust preferred securities | ALESCO V C1 Mezzanine | Rating Of Moody A2 Fitch A When Purchased and Current Moody C Fitch C
|
||||||||
Other than temporarily impaired | ||||||||
Par value - other than temporarily impaired | 2,150 | |||||||
Book value - other than temporarily impaired | 475 | |||||||
Estimated fair value - other than temporarily impaired | 548 | |||||||
Cumulative Other Comprehensive Loss | 1,014 | [2] | ||||||
Cumulative OTTI Related to Credit Loss | 661 | [2] | ||||||
Percentage of current defaults and deferrals | 23.00% | |||||||
Trust preferred securities | ALESCO XV C1Mezzanine | Rating Of Moody A3 Fitch A- When Purchased and Current Moody C Fitch C
|
||||||||
Other than temporarily impaired | ||||||||
Par value - other than temporarily impaired | 3,210 | |||||||
Book value - other than temporarily impaired | 30 | |||||||
Estimated fair value - other than temporarily impaired | 152 | |||||||
Cumulative Other Comprehensive Loss | 621 | [2] | ||||||
Cumulative OTTI Related to Credit Loss | 2,559 | [2] | ||||||
Percentage of current defaults and deferrals | 35.00% | |||||||
Trust preferred securities | ALESCO XVI C Mezzanine | Rating Of Moody A3 Fitch A- When Purchased and Current Moody C Fitch C
|
||||||||
Other than temporarily impaired | ||||||||
Par value - other than temporarily impaired | 2,136 | |||||||
Book value - other than temporarily impaired | 119 | |||||||
Estimated fair value - other than temporarily impaired | 576 | |||||||
Cumulative Other Comprehensive Loss | 837 | [2] | ||||||
Cumulative OTTI Related to Credit Loss | $ 1,180 | [2] | ||||||
Percentage of current defaults and deferrals | 16.00% | |||||||
|
LOANS AND ALLOWANCE FOR LOAN LOSSES -Allowance for loan losses and recorded investment in non covered loans by portfolio segment (Details 6) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2013
|
Mar. 31, 2013
|
Dec. 31, 2012
|
Jun. 30, 2012
|
Mar. 31, 2012
|
Dec. 31, 2011
|
||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Ending allowance balance attributable to loans: | ||||||||||||||||
Total ending allowance | $ 7,296 | $ 7,066 | ||||||||||||||
Total Loans
|
||||||||||||||||
Loans: | ||||||||||||||||
Total ending loan balances | 525,505 | 531,161 | ||||||||||||||
Total Loans | Commercial real estate - owner occupied
|
||||||||||||||||
Loans: | ||||||||||||||||
Total ending loan balances | 97,499 | 97,431 | ||||||||||||||
Total Loans | Commercial real estate - non-owner occupied
|
||||||||||||||||
Loans: | ||||||||||||||||
Total ending loan balances | 170,099 | [1] | 161,265 | [1] | ||||||||||||
Total Loans | Construction and land development
|
||||||||||||||||
Loans: | ||||||||||||||||
Total ending loan balances | 31,128 | 46,207 | ||||||||||||||
Total Loans | Commercial loans
|
||||||||||||||||
Loans: | ||||||||||||||||
Total ending loan balances | 107,013 | 101,753 | ||||||||||||||
Total Loans | 1-4 Family Residential
|
||||||||||||||||
Loans: | ||||||||||||||||
Total ending loan balances | 118,341 | 122,794 | ||||||||||||||
Total Loans | Other consumer loans
|
||||||||||||||||
Loans: | ||||||||||||||||
Total ending loan balances | 1,425 | 1,711 | ||||||||||||||
Total Loans | Non-covered Loans
|
||||||||||||||||
Ending allowance balance attributable to loans: | ||||||||||||||||
Individually evaluated for impairment | 1,371 | 837 | ||||||||||||||
Collectively evaluated for impairment | 5,859 | 6,130 | ||||||||||||||
Total ending allowance | 7,230 | 7,152 | 6,967 | 6,655 | 6,902 | 6,295 | ||||||||||
Loans: | ||||||||||||||||
Individually evaluated for impairment | 27,525 | 23,689 | ||||||||||||||
Collectively evaluated for impairment | 438,168 | 436,151 | ||||||||||||||
Total ending loan balances | 465,693 | 459,840 | ||||||||||||||
Total Loans | Non-covered Loans | Commercial real estate - owner occupied
|
||||||||||||||||
Ending allowance balance attributable to loans: | ||||||||||||||||
Individually evaluated for impairment | 120 | 137 | ||||||||||||||
Collectively evaluated for impairment | 612 | 795 | ||||||||||||||
Total ending allowance | 732 | 898 | 932 | 625 | 649 | 627 | ||||||||||
Loans: | ||||||||||||||||
Individually evaluated for impairment | 7,725 | 3,455 | ||||||||||||||
Collectively evaluated for impairment | 86,112 | 89,833 | ||||||||||||||
Total ending loan balances | 93,837 | 93,288 | ||||||||||||||
Total Loans | Non-covered Loans | Commercial real estate - non-owner occupied
|
||||||||||||||||
Ending allowance balance attributable to loans: | ||||||||||||||||
Individually evaluated for impairment | 61 | [1] | 260 | [1] | ||||||||||||
Collectively evaluated for impairment | 1,029 | [1] | 1,214 | [1] | ||||||||||||
Total ending allowance | 1,090 | [1] | 1,191 | [1] | 1,474 | [1] | 1,015 | [1] | 1,666 | [1] | 1,011 | [1] | ||||
Loans: | ||||||||||||||||
Individually evaluated for impairment | 2,031 | [1] | 2,882 | [1] | ||||||||||||
Collectively evaluated for impairment | 161,339 | [1] | 147,523 | [1] | ||||||||||||
Total ending loan balances | 163,370 | [1] | 150,405 | [1] | ||||||||||||
Total Loans | Non-covered Loans | Construction and land development
|
||||||||||||||||
Ending allowance balance attributable to loans: | ||||||||||||||||
Individually evaluated for impairment | 300 | [2] | [2] | |||||||||||||
Collectively evaluated for impairment | 726 | [2] | 970 | [2] | ||||||||||||
Total ending allowance | 1,026 | 1,048 | 970 | 1,474 | 500 | 1,367 | ||||||||||
Loans: | ||||||||||||||||
Individually evaluated for impairment | 3,582 | [2] | 2,981 | [2] | ||||||||||||
Collectively evaluated for impairment | 27,494 | [2] | 41,965 | [2] | ||||||||||||
Total ending loan balances | 31,076 | [2] | 44,946 | [2] | ||||||||||||
Total Loans | Non-covered Loans | Commercial loans
|
||||||||||||||||
Ending allowance balance attributable to loans: | ||||||||||||||||
Individually evaluated for impairment | 450 | |||||||||||||||
Collectively evaluated for impairment | 2,292 | 2,110 | ||||||||||||||
Total ending allowance | 2,742 | 2,095 | 2,110 | 2,544 | 2,552 | 2,227 | ||||||||||
Loans: | ||||||||||||||||
Individually evaluated for impairment | 5,214 | 5,212 | ||||||||||||||
Collectively evaluated for impairment | 100,538 | 93,869 | ||||||||||||||
Total ending loan balances | 105,752 | 99,081 | ||||||||||||||
Total Loans | Non-covered Loans | 1-4 Family Residential
|
||||||||||||||||
Ending allowance balance attributable to loans: | ||||||||||||||||
Individually evaluated for impairment | 440 | 440 | ||||||||||||||
Collectively evaluated for impairment | 967 | 723 | ||||||||||||||
Total ending allowance | 1,407 | 1,296 | 1,163 | 885 | 948 | 1,021 | ||||||||||
Loans: | ||||||||||||||||
Individually evaluated for impairment | 8,973 | 9,159 | ||||||||||||||
Collectively evaluated for impairment | 61,347 | 61,338 | ||||||||||||||
Total ending loan balances | 70,320 | 70,497 | ||||||||||||||
Total Loans | Non-covered Loans | Other consumer loans
|
||||||||||||||||
Ending allowance balance attributable to loans: | ||||||||||||||||
Individually evaluated for impairment | ||||||||||||||||
Collectively evaluated for impairment | 55 | 33 | ||||||||||||||
Total ending allowance | 55 | 64 | 33 | 35 | 38 | 42 | ||||||||||
Loans: | ||||||||||||||||
Individually evaluated for impairment | ||||||||||||||||
Collectively evaluated for impairment | 1,338 | 1,623 | ||||||||||||||
Total ending loan balances | 1,338 | 1,623 | ||||||||||||||
Total Loans | Non-covered Loans | Unallocated Loan
|
||||||||||||||||
Ending allowance balance attributable to loans: | ||||||||||||||||
Individually evaluated for impairment | ||||||||||||||||
Collectively evaluated for impairment | 178 | 285 | ||||||||||||||
Total ending allowance | 178 | 560 | 285 | 77 | 549 | |||||||||||
Loans: | ||||||||||||||||
Individually evaluated for impairment | ||||||||||||||||
Collectively evaluated for impairment | ||||||||||||||||
Total ending loan balances | ||||||||||||||||
|
STOCK- BASED COMPENSATION - Activity in stock option plan (Details 1) (Stock Options, USD $)
In Thousands, except Share data, unless otherwise specified |
6 Months Ended |
---|---|
Jun. 30, 2013
|
|
Stock Options
|
|
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Options outstanding, beginning of period (in shares) | 512,825 |
Granted (in shares) | 120,250 |
Forfeited (in shares) | |
Exercised (in shares) | |
Options outstanding, end of period (in shares) | 633,075 |
Vested or expected to vest (in shares) | 633,075 |
Exercisable at end of period (in shares) | 304,775 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | |
Options outstanding, beginning of period - Weighted Average Exercise Price | $ 7.98 |
Granted Weighted Average Exercise Price | $ 9.18 |
Forfeited Weighted Average Exercise Price | |
Exercised Exercises in Period, Weighted Average Exercise Price | |
Options outstanding, end of period - Weighted Average Exercise Price | $ 8.21 |
Vested or expected to vest - Weighted Average Exercise Price | $ 8.21 |
Exercisable at end of period - Weighted Average Exercise Price | $ 8.35 |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | |
Options outstanding, end of period - Weighted Average Remaining Contractual Term | 6 years 6 months |
Vested or expected to vest - Weighted Average Remaining Contractual Term | 6 years 6 months |
Exercisable at end of period - Weighted Average Remaining Contractual Term | 4 years |
Options outstanding, end of period - Aggregate Intrinsic Value | $ 1,011 |
Vested or expected to vest - Aggregate Intrinsic Value | 1,011 |
Exercisable at end of period - Aggregate Intrinsic Value | $ 451 |
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited) (Parentheticals) (USD $)
In Thousands, except Per Share data, unless otherwise specified |
6 Months Ended |
---|---|
Jun. 30, 2013
|
|
Statement Of Stockholders Equity [Abstract] | |
Tax on change in unrealized gain on securities available for sale | $ 115 |
Tax on change in unrecognized loss on securities held to maturity, portion of OTTI | 27 |
Accretion in change in unrecognized loss on securities held to maturity, portion of OTTI | $ 20 |
Common stock dividends per share (in dollars per share) | $ 0.11 |
ACCOUNTING POLICIES
|
6 Months Ended |
---|---|
Jun. 30, 2013
|
|
Accounting Policies [Abstract] | |
ACCOUNTING POLICIES | 1. ACCOUNTING POLICIES
Southern National Bancorp of Virginia, Inc. (“Southern National”) is a corporation formed on July 28, 2004 under the laws of the Commonwealth of Virginia and is the holding company for Sonabank (“Sonabank”) a Virginia state chartered bank which commenced operations on April 14, 2005. The principal activities of Sonabank are to attract deposits and originate loans as permitted under applicable banking regulations. Sonabank has fifteen branches in Virginia, located in Fairfax County (Reston, McLean and Fairfax), in Charlottesville, Warrenton (2), Middleburg, Leesburg (2), South Riding, Front Royal, New Market, Haymarket, Richmond and Clifton Forge, and five branches in Maryland, in Rockville, Shady Grove, Germantown, Frederick and Bethesda.
The consolidated financial statements include the accounts of Southern National Bancorp of Virginia, Inc. and its subsidiary. Significant inter-company accounts and transactions have been eliminated in consolidation.
The unaudited consolidated financial statements have been prepared in accordance with U. S. generally accepted accounting principles (“U. S. GAAP”) for interim financial information and instructions for Form 10-Q and follow general practice within the banking industry. Accordingly, the unaudited consolidated financial statements do not include all of the information and footnotes required by U. S. GAAP for complete financial statements. However, in the opinion of management, all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation of the results of the interim periods presented have been made. The results of operations for the interim periods are not necessarily indicative of the results that may be expected for the full year. For further information, refer to the consolidated financial statements and footnotes thereto included in Southern National’s Form 10-K for the year ended December 31, 2012.
Use of Estimates
The preparation of the consolidated financial statements in conformity with U. S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, the carrying value of investment securities, other than temporary impairment of investment securities, the valuation of goodwill and intangible assets, the FDIC indemnification asset, mortgage servicing rights, other real estate owned and deferred tax assets.
Recent Accounting Pronouncements
In February 2013, the FASB issued ASU 2013-02, Comprehensive Income (Topic 220), Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. This standard update requires companies to report the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in the consolidated statements of comprehensive income if the amount being reclassified is required under U.S. GAAP to be reclassified in its entirety to net income. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income in the same reporting period, an entity is required to cross-reference other disclosures required under U.S. GAAP that provide additional detail about those amounts. We adopted this standard in the first quarter of 2013 and have included the additional disclosures. |
LOANS AND ALLOWANCE FOR LOAN LOSSES
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LOANS AND ALLOWANCE FOR LOAN LOSSES | 4. LOANS AND ALLOWANCE FOR LOAN LOSSES
The following table summarizes the composition of our loan portfolio as of June 30, 2013 and December 31, 2012:
Accounting policy related to the allowance for loan losses is considered a critical policy given the level of estimation, judgment, and uncertainty in evaluation of the levels of the allowance required to account for the inherent probable losses in the loan portfolio and the material effect such estimation, judgment, and uncertainty can have on the consolidated financial results.
As part of the Greater Atlantic acquisition, the Bank and the FDIC entered into a loss sharing agreement on approximately $143.4 million (contractual basis) of Greater Atlantic Bank’s assets. The Bank will share in the losses on the loans and foreclosed loan collateral with the FDIC as specified in the loss sharing agreement; we refer to these assets collectively as “covered assets.” Loans that are not covered in the loss sharing agreement are referred to as “non-covered loans.” Non-covered loans included $47.8 million of loans acquired in the HarVest acquisition. Accretable discount on the acquired covered loans and the HarVest loans was $10.1 million and $11.7 million at June 30, 2013 and December 31, 2012, respectively.
Credit-impaired covered loans are those loans which presented evidence of credit deterioration at the date of acquisition and it is probable that Southern National would not collect all contractually required principal and interest payments. Generally, acquired loans that meet Southern National’s definition for nonaccrual status fell within the definition of credit-impaired covered loans.
Impaired loans for the covered and non-covered portfolios were as follows (in thousands):
The following tables present the average recorded investment and interest income for impaired loans recognized by class of loans for the three and six months ended June 30, 2013 and 2012 (in thousands):
The following tables present the aging of the recorded investment in past due loans by class of loans as of June 30, 2013 and December 31, 2012 (in thousands):
Non-covered nonaccrual loans include SBA guaranteed amounts totaling $1.6 million and $2.6 million at June 30, 2013 and December 31, 2012, respectively.
Activity in the allowance for non-covered loan and lease losses for the three and six months ended June 30, 2013 and 2012 is summarized below (in thousands):
(1) Includes loans secured by farmland and multi-family residential loans.
Activity in the allowance for covered loan and lease losses by class of loan for the three and six months ended June 30, 2013 is summarized below (in thousands). There was no allowance for loan and lease losses for covered loans recorded in the six months ended June 30, 2012.
(1) Includes loans secured by farmland and multi-family residential loans.
(2) Represents the portion of decreased expected losses which is covered by the loss sharing agreement with the FDIC.
The following tables present the balance in the allowance for loan losses and the recorded investment in non-covered loans by portfolio segment and based on impairment method as of June 30, 2013 and December 31, 2012 (in thousands):
(1) Includes loans secured by farmland and multi-family residential loans.
(2) Includes an allowance for a loan that was evaluated but not considered impaired at June 30, 2013.
The following tables present the balance in the allowance for covered loan losses and the recorded investment in covered loans by portfolio segment and based on impairment method as of June 30, 2013 and December 31, 2012 (in thousands):
(1) Includes loans secured by farmland and multi-family residential loans.
Troubled Debt Restructurings
A modification is classified as a troubled debt restructuring (“TDR”) if both of the following exist: (1) the borrower is experiencing financial difficulty and (2) the Bank has granted a concession to the borrower. The Bank determines that a borrower may be experiencing financial difficulty if the borrower is currently delinquent on any of its debt, or if the Bank is concerned that the borrower may not be able to perform in accordance with the current terms of the loan agreement in the foreseeable future. Many aspects of the borrower’s financial situation are assessed when determining whether they are experiencing financial difficulty, particularly as it relates to commercial borrowers due to the complex nature of the loan structure, business/industry risk and borrower/guarantor structures. Concessions may include the reduction of an interest rate at a rate lower than current market rate for a new loan with similar risk, extension of the maturity date, reduction of accrued interest, or principal forgiveness. When evaluating whether a concession has been granted, the Bank also considers whether the borrower has provided additional collateral or guarantors and whether such additions adequately compensate the Bank for the restructured terms, or if the revised terms are consistent with those currently being offered to new loan customers. The assessments of whether a borrower is experiencing (or is likely to experience) financial difficulty and whether a concession has been granted is subjective in nature and management’s judgment is required when determining whether a modification is a TDR.
Although each occurrence is unique to the borrower and is evaluated separately, for all portfolio segments, TDRs are typically modified through reduction in interest rates, reductions in payments, changing the payment terms from principal and interest to interest only, and/or extensions in term maturity.
As of June 30, 2013, we had one construction and land loan modified in a troubled debt restructuring with an unpaid principal balance of $1.3 million which was restructured by reducing the interest rate and modifying other terms. The unpaid principal balance did not change. This loan defaulted subsequent to restructuring, and is now a nonaccrual loan. There is no additional commitment to lend to this borrower. We also had one commercial real estate owner-occupied loan modified in a troubled debt restructuring with an unpaid principal balance of $712 thousand which was restructured by reducing the principal portion of the contractual principal and interest payment without modifying the interest rate. There is no additional commitment to lend to this borrower.
Credit Quality Indicators
Through its system of internal controls Southern National evaluates and segments loan portfolio credit quality on a quarterly basis using regulatory definitions for Special Mention, Substandard and Doubtful. Special Mention loans are considered to be criticized. Substandard and Doubtful loans are considered to be classified. Southern National had no loans classified Doubtful at June 30, 2013 or December 31, 2012.
Special Mention loans are loans that have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position.
Substandard loans may be inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.
Doubtful loans have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.
As of June 30, 2013 and December 31, 2012, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows (in thousands):
(1) Credit quality is enhanced by a loss sharing agreement with the FDIC in the covered portfolio. The same credit quality indicators used in the non-covered portfolio are combined.
(2) Includes loans secured by farmland and multi-family residential loans.
(3) Includes SBA guarantees of $1.6 million and $2.6 million as of June 30, 2013 and December 31, 2012, respectively.
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STOCK- BASED COMPENSATION
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6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCK-BASED COMPENSATION | 2. STOCK- BASED COMPENSATION
In 2004, the Board of Directors adopted a stock option plan that authorized the reservation of up to 302,500 shares of common stock and provided for the granting of stock options to certain directors, officers and employees. As of June 30, 2013, options to purchase an aggregate of 302,500 shares of common stock were outstanding and no shares remained available for issuance. The 2010 Stock Awards and Incentive Plan was approved by the Board of Directors in January 2010 and approved by the stockholders at the Annual Meeting in April 2010. The 2010 plan authorized the reservation of 700,000 shares of common stock for the granting of stock awards. The options granted to officers and employees are incentive stock options and the options granted to non-employee directors are non-qualified stock options. The purpose of the plan is to afford key employees an incentive to remain in the employ of Southern National and to assist in the attracting and retaining of non-employee directors by affording them an opportunity to share in Southern National’s future success. Under the plan, the option’s price cannot be less than the fair market value of the stock on the grant date. The maximum term of the options is ten years and options granted may be subject to a graded vesting schedule.
Southern National granted 120,250 options during the first six months of 2013. The fair value of each option granted is estimated on the date of grant using the Black-Scholes options-pricing model. The following weighted-average assumptions were used to value options granted in the six months ended June 30, 2013:
The risk-free interest rate was developed using the U. S. Treasury yield curve for periods equal to the expected life of the options on the grant date. An increase in the risk-free interest rate will increase stock compensation expense on future option grants.
For the three and six months ended June 30, 2013 and 2012, stock-based compensation expense was $63 thousand and $126 thousand, respectively, compared to $47 thousand and $96 thousand for the same periods last year. As of June 30, 2013, unrecognized compensation expense associated with the stock options was $1.1 million, which is expected to be recognized over a weighted average period of 4.0 years.
A summary of the activity in the stock option plan during the six months ended June 30, 2013 follows (dollars in thousands):
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LOANS AND ALLOWANCE FOR LOAN LOSSES - Allowance for loan and lease losses (Details 4) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
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Allowance for Loan and Lease Losses [Roll Forward] | ||||||||||
Beginning balance | $ 7,066 | |||||||||
Charge offs | 746 | 1,400 | 1,200 | 1,600 | ||||||
Provision for loan losses | 725 | 1,325 | 1,818 | 2,775 | ||||||
Ending balance | 7,296 | 7,296 | ||||||||
Total Loans | Non-covered Loans
|
||||||||||
Allowance for Loan and Lease Losses [Roll Forward] | ||||||||||
Beginning balance | 7,152 | 6,902 | 6,967 | 6,295 | ||||||
Charge offs | (747) | (1,849) | (1,823) | (2,707) | ||||||
Recoveries | 100 | 277 | 262 | 292 | ||||||
Provision for loan losses | 725 | 1,325 | 1,824 | 2,775 | ||||||
Ending balance | 7,230 | 6,655 | 7,230 | 6,655 | ||||||
Total Loans | Non-covered Loans | Commercial real estate - owner occupied
|
||||||||||
Allowance for Loan and Lease Losses [Roll Forward] | ||||||||||
Beginning balance | 898 | 649 | 932 | 627 | ||||||
Charge offs | ||||||||||
Recoveries | 8 | 8 | ||||||||
Provision for loan losses | (174) | (24) | (208) | (2) | ||||||
Ending balance | 732 | 625 | 732 | 625 | ||||||
Total Loans | Non-covered Loans | Commercial Real Estate Non-owner Occupied
|
||||||||||
Allowance for Loan and Lease Losses [Roll Forward] | ||||||||||
Beginning balance | 1,191 | [1] | 1,666 | [1] | 1,474 | [1] | 1,011 | [1] | ||
Charge offs | [1] | (32) | [1] | (199) | [1] | (32) | [1] | |||
Recoveries | 51 | [1] | [1] | 51 | [1] | [1] | ||||
Provision for loan losses | (152) | [1] | (619) | [1] | (236) | [1] | 36 | [1] | ||
Ending balance | 1,090 | [1] | 1,015 | [1] | 1,090 | [1] | 1,015 | [1] | ||
Total Loans | Non-covered Loans | Construction and Land Loans
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Allowance for Loan and Lease Losses [Roll Forward] | ||||||||||
Beginning balance | 1,048 | 500 | 970 | 1,367 | ||||||
Charge offs | (1,280) | (300) | (1,280) | |||||||
Recoveries | 3 | 5 | ||||||||
Provision for loan losses | (25) | 2,254 | 351 | 1,387 | ||||||
Ending balance | 1,026 | 1,474 | 1,026 | 1,474 | ||||||
Total Loans | Non-covered Loans | Commercial loans
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||||||||||
Allowance for Loan and Lease Losses [Roll Forward] | ||||||||||
Beginning balance | 2,095 | 2,552 | 2,110 | 2,227 | ||||||
Charge offs | (266) | (344) | (665) | (1,167) | ||||||
Recoveries | 35 | 261 | 74 | 273 | ||||||
Provision for loan losses | 878 | 75 | 1,223 | 1,211 | ||||||
Ending balance | 2,742 | 2,544 | 2,742 | 2,544 | ||||||
Total Loans | Non-covered Loans | 1-4 Family Residential
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Allowance for Loan and Lease Losses [Roll Forward] | ||||||||||
Beginning balance | 1,296 | 948 | 1,163 | 1,021 | ||||||
Charge offs | (480) | (190) | (518) | (222) | ||||||
Recoveries | 2 | 12 | 123 | 13 | ||||||
Provision for loan losses | 589 | 115 | 639 | 73 | ||||||
Ending balance | 1,407 | 885 | 1,407 | 885 | ||||||
Total Loans | Non-covered Loans | Other consumer loans
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Allowance for Loan and Lease Losses [Roll Forward] | ||||||||||
Beginning balance | 64 | 38 | 33 | 42 | ||||||
Charge offs | (1) | (3) | (141) | (6) | ||||||
Recoveries | 1 | 4 | 1 | 6 | ||||||
Provision for loan losses | (9) | (4) | 162 | (7) | ||||||
Ending balance | 55 | 35 | 55 | 35 | ||||||
Total Loans | Non-covered Loans | Unallocated
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Allowance for Loan and Lease Losses [Roll Forward] | ||||||||||
Beginning balance | 560 | 549 | 285 | |||||||
Charge offs | ||||||||||
Recoveries | ||||||||||
Provision for loan losses | (382) | (472) | (107) | 77 | ||||||
Ending balance | $ 178 | $ 77 | $ 178 | $ 77 | ||||||
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SECURITIES - Carrying amount and fair value of securities (Details 1) (USD $)
In Thousands, unless otherwise specified |
6 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2013
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Dec. 31, 2012
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Schedule Of Available For Sale and Held To Maturity Securities [Line Items] | ||
Securities held to maturity, at amortized cost | $ 83,354 | $ 84,051 |
Gross unrecognized gains | 1,872 | 3,115 |
Gross unrecognized losses | (5,591) | (2,339) |
Securities held to maturity fair value (in dollars) | 79,635 | 84,827 |
Residential government-sponsored mortgage-backed securities
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Schedule Of Available For Sale and Held To Maturity Securities [Line Items] | ||
Securities held to maturity, at amortized cost | 29,029 | 35,375 |
Gross unrecognized gains | 769 | 1,559 |
Gross unrecognized losses | (206) | |
Securities held to maturity fair value (in dollars) | 29,592 | 36,934 |
Residential government-sponsored collateralized mortgage obligations
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Schedule Of Available For Sale and Held To Maturity Securities [Line Items] | ||
Securities held to maturity, at amortized cost | 4,844 | 5,444 |
Gross unrecognized gains | 5 | 81 |
Gross unrecognized losses | (233) | |
Securities held to maturity fair value (in dollars) | 4,616 | 5,525 |
Government-sponsored agency securities
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Schedule Of Available For Sale and Held To Maturity Securities [Line Items] | ||
Securities held to maturity, at amortized cost | 29,969 | 29,983 |
Gross unrecognized gains | 52 | |
Gross unrecognized losses | (2,084) | (4) |
Securities held to maturity fair value (in dollars) | 27,885 | 30,031 |
Obligations of states and political subdivisions
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Schedule Of Available For Sale and Held To Maturity Securities [Line Items] | ||
Securities held to maturity, at amortized cost | 11,012 | 4,689 |
Gross unrecognized gains | 1 | |
Gross unrecognized losses | (883) | (69) |
Securities held to maturity fair value (in dollars) | 10,129 | 4,621 |
Other residential collateralized mortgage obligations
|
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Schedule Of Available For Sale and Held To Maturity Securities [Line Items] | ||
Securities held to maturity, at amortized cost | 741 | 817 |
Gross unrecognized gains | 27 | |
Gross unrecognized losses | (24) | |
Securities held to maturity fair value (in dollars) | 768 | 793 |
Trust preferred securities
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Schedule Of Available For Sale and Held To Maturity Securities [Line Items] | ||
Securities held to maturity, at amortized cost | 7,759 | 7,743 |
Gross unrecognized gains | 1,071 | 1,422 |
Gross unrecognized losses | (2,185) | (2,242) |
Securities held to maturity fair value (in dollars) | $ 6,645 | $ 6,923 |
SECURITIES - Roll forward of credit losses (Details 5) (USD $)
In Thousands, unless otherwise specified |
6 Months Ended | |
---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
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Other than Temporary Impairment, Credit Losses Recognized in Earnings [Roll Forward] | ||
Amount of cumulative other-than-temporary impairment related to credit loss prior to January 1 | $ 8,964 | $ 8,277 |
Amounts related to credit loss for which an other-than-temporary impairment was not previously recognized | ||
Amounts related to credit loss for which an other-than-temporary impairment was previously recognized | 3 | 237 |
Reductions due to realized losses | (32) | (89) |
Amount of cumulative other-than-temporary impairment related to credit loss as of June 30 | $ 8,935 | $ 8,425 |
LOANS AND ALLOWANCE FOR LOAN LOSSES - Summary (Details) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2013
|
Dec. 31, 2012
|
||||
---|---|---|---|---|---|---|
Mortgage loans on real estate: | ||||||
Loans, net of deferred fees | $ 516,988 | $ 523,085 | ||||
Total Loans
|
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Mortgage loans on real estate: | ||||||
Commercial real estate - owner-occupied | 97,499 | 97,431 | ||||
Commercial real estate - non-owner-occupied | 146,957 | 140,398 | ||||
Secured by farmland | 620 | 1,479 | ||||
Construction and land loans | 31,128 | 46,207 | ||||
Residential 1-4 family | 81,611 | 82,324 | ||||
Multi- family residential | 22,522 | 19,388 | ||||
Home equity lines of credit | 36,730 | 40,470 | ||||
Total real estate loans | 417,067 | 427,697 | ||||
Commercial loans | 107,013 | 101,753 | ||||
Consumer loans | 1,425 | 1,711 | ||||
Gross loans | 525,505 | 531,161 | ||||
Less deferred fees on loans | (1,221) | (1,010) | ||||
Loans, net of deferred fees | 524,284 | 530,151 | ||||
Total Loans | Covered loans
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Mortgage loans on real estate: | ||||||
Commercial real estate - owner-occupied | 3,662 | [1] | 4,143 | [1] | ||
Commercial real estate - non-owner-occupied | 6,028 | [1] | 10,246 | [1] | ||
Secured by farmland | 103 | [1] | [1] | |||
Construction and land loans | 52 | [1] | 1,261 | [1] | ||
Residential 1-4 family | 19,067 | [1] | 21,005 | [1] | ||
Multi- family residential | 598 | [1] | 614 | [1] | ||
Home equity lines of credit | 28,954 | [1] | 31,292 | [1] | ||
Total real estate loans | 58,464 | [1] | 68,561 | [1] | ||
Commercial loans | 1,261 | [1] | 2,672 | [1] | ||
Consumer loans | 87 | [1] | 88 | [1] | ||
Gross loans | 59,812 | [1] | 71,321 | [1] | ||
Less deferred fees on loans | 7 | [1] | 7 | [1] | ||
Loans, net of deferred fees | 59,819 | [1] | 71,328 | [1] | ||
Total Loans | Non-covered Loans
|
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Mortgage loans on real estate: | ||||||
Commercial real estate - owner-occupied | 93,837 | 93,288 | ||||
Commercial real estate - non-owner-occupied | 140,929 | 130,152 | ||||
Secured by farmland | 517 | 1,479 | ||||
Construction and land loans | 31,076 | 44,946 | ||||
Residential 1-4 family | 62,544 | 61,319 | ||||
Multi- family residential | 21,924 | 18,774 | ||||
Home equity lines of credit | 7,776 | 9,178 | ||||
Total real estate loans | 358,603 | 359,136 | ||||
Commercial loans | 105,752 | 99,081 | ||||
Consumer loans | 1,338 | 1,623 | ||||
Gross loans | 465,693 | 459,840 | ||||
Less deferred fees on loans | (1,228) | (1,017) | ||||
Loans, net of deferred fees | $ 464,465 | $ 458,823 | ||||
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FAIR VALUE - Fair Value of Financial Instruments (Details 2) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2013
|
Dec. 31, 2012
|
Jun. 30, 2012
|
Dec. 31, 2011
|
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---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Financial assets: | ||||||||||||||
Cash and cash equivalents | $ 28,545 | $ 39,200 | $ 27,343 | $ 5,035 | ||||||||||
Securities available for sale, at fair value | 2,034 | 2,391 | ||||||||||||
Securities held to maturity | 83,354 | 84,051 | ||||||||||||
Stock in Federal Reserve Bank and Federal Home Loan Bank | 5,240 | 6,212 | ||||||||||||
FDIC indemnification asset | 6,308 | 6,735 | ||||||||||||
Deposits: | ||||||||||||||
Certificates of deposit | 319,682 | 305,708 | ||||||||||||
Securities sold under agreements to repurchase and other short-term borrowings | 20,530 | 33,411 | ||||||||||||
FHLB advances | 30,250 | 30,250 | ||||||||||||
Carrying Amount
|
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Financial assets: | ||||||||||||||
Cash and cash equivalents | 28,545 | 39,200 | ||||||||||||
Securities available for sale, at fair value | 2,034 | 2,391 | ||||||||||||
Securities held to maturity | 83,354 | 84,051 | ||||||||||||
Stock in Federal Reserve Bank and Federal Home Loan Bank | 5,240 | 6,212 | ||||||||||||
Net non-covered loans | 457,235 | 451,757 | ||||||||||||
Net covered loans | 59,753 | 71,328 | ||||||||||||
Accrued interest receivable | 2,222 | 2,455 | ||||||||||||
FDIC indemnification asset | 6,308 | 6,735 | ||||||||||||
Deposits: | ||||||||||||||
Demand deposits | 67,347 | 72,418 | ||||||||||||
Money market and savings accounts | 158,609 | 172,851 | ||||||||||||
Certificates of deposit | 319,682 | 305,708 | ||||||||||||
Securities sold under agreements to repurchase and other short-term borrowings | 20,530 | 33,411 | ||||||||||||
FHLB advances | 30,250 | 30,250 | ||||||||||||
Accrued interest payable | 360 | 258 | ||||||||||||
Fair Value
|
||||||||||||||
Financial assets: | ||||||||||||||
Cash and cash equivalents | 28,545 | [1] | 39,200 | [1] | ||||||||||
Securities available for sale, at fair value | 2,034 | 2,391 | ||||||||||||
Securities held to maturity | 79,635 | [2] | 84,827 | [2] | ||||||||||
Net non-covered loans | 461,148 | [3] | 457,906 | [3] | ||||||||||
Net covered loans | 63,910 | [3] | 77,976 | [3] | ||||||||||
Accrued interest receivable | 2,222 | [2] | 2,455 | [2] | ||||||||||
FDIC indemnification asset | 4,671 | [3] | 6,735 | [3] | ||||||||||
Deposits: | ||||||||||||||
Demand deposits | 67,347 | [1] | 72,418 | [1] | ||||||||||
Money market and savings accounts | 158,609 | [1] | 172,851 | [1] | ||||||||||
Certificates of deposit | 321,203 | [3] | 308,160 | [3] | ||||||||||
Securities sold under agreements to repurchase and other short-term borrowings | 20,530 | [1] | 33,411 | [1] | ||||||||||
FHLB advances | 31,848 | [3] | 31,380 | [3] | ||||||||||
Accrued interest payable | $ 360 | [4] | $ 258 | [4] | ||||||||||
|
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