10-Q 1 form10q.htm INDEPENDENT BANK CORPORATION 10-Q 6-30-2013
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.  20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED June 30, 2013

Commission file number   0-7818

INDEPENDENT BANK CORPORATION
(Exact name of registrant as specified in its charter)

Michigan
 
38-2032782
(State or jurisdiction of Incorporation or Organization)
 
(I.R.S. Employer Identification Number)

230 West Main Street, P.O. Box 491, Ionia, Michigan  48846
(Address of principal executive offices)

(616) 527-5820
(Registrant's telephone number, including area code)

NONE
Former name, address and fiscal year, if changed since last report.

Indicate by check mark whether the registrant (1) has filed all documents and reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.      YES   x       NO o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
YES  x     NO ¨

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, non-accelerated filer or smaller reporting company.
Large accelerated filer ¨ Accelerated filer ¨ Non-accelerated filer ¨ Smaller reporting company x

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
YES ¨       NO x

     Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Common stock, no par value
9,493,399
Class
Outstanding at August 7, 2013
 
INDEPENDENT BANK CORPORATION AND SUBSIDIARIES

INDEX
 
 
Number(s)
PART I -
Financial Information
 
Item 1.
3
 
4
 
5
 
6
 
7
 
8-67
Item 2.
68-99
Item 3.
100
Item 4.
100
 
 
 
PART II -
Other Information
 
Item 1A
101
Item 2.
101
Item 3b.
101
Item 6.
102

Discussions and statements in this report that are not statements of historical fact, including, without limitation, statements that include terms such as “will,” “may,” “should,” “believe,” “expect,” “forecast,” “anticipate,” “estimate,” “project,” “intend,” “likely,” “optimistic” and “plan,” and statements about future or projected financial and operating results, plans, projections, objectives, expectations, and intentions and other statements that are not historical facts, are forward-looking statements. Forward-looking statements include, but are not limited to, descriptions of plans and objectives for future operations, products or services; projections of our future revenue, earnings or other measures of economic performance; forecasts of credit losses and other asset quality trends; predictions as to our Bank’s ability to maintain certain regulatory capital standards; our expectation that we will have sufficient cash on hand to meet expected obligations during 2013; and descriptions of steps we may take to improve our capital position. These forward-looking statements express our current expectations, forecasts of future events, or long-term goals and, by their nature, are subject to assumptions, risks, and uncertainties.  Although we believe that the expectations, forecasts, and goals reflected in these forward-looking statements are reasonable, actual results could differ materially for a variety of reasons, including, among others:
 
·
our ability to successfully raise new equity capital, effect a redemption of our outstanding convertible preferred stock held by the U.S. Treasury, exit the Troubled Asset Relief Program (“TARP”), bring quarterly payments on our trust preferred securities current, and otherwise implement our capital plan;
·
our receipt of regulatory approvals necessary for us to take certain actions pursuant to our capital plan, including a reclassification of the equity of our subsidiary bank, the return of capital by our subsidiary bank to our holding company, our payment of accrued but unpaid dividends on our trust preferred securities, and our redemption of the preferred stock and warrant held by the U.S. Treasury;
·
the failure of assumptions underlying the establishment of and provisions made to our allowance for loan losses;
1
 
·
the timing and pace of an economic recovery in Michigan and the United States in general, including regional and local real estate markets;
·
the ability of our Bank to remain well-capitalized;
·
the failure of assumptions underlying our estimate of probable incurred losses from vehicle service contract payment plan counterparty contingencies, including our assumptions regarding future cancellations of vehicle service contracts, the value to us of collateral that may be available to recover funds due from our counterparties, and our ability to enforce the contractual obligations of our counterparties to pay amounts owing to us;
·
further adverse developments in the vehicle service contract industry;
·
the risk that sales of our common stock could trigger a reduction in the amount of net operating loss carryforwards that we may be able to utilize for income tax purposes;
·
the continued services of our management team; and
·
implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act or other new legislation, which may have significant effects on us and the financial services industry, the exact nature and extent of which cannot be determined at this time.

This list provides examples of factors that could affect the results described by forward-looking statements contained in this report, but the list is not intended to be all inclusive.  The risk factors disclosed in Part I – Item A of our Annual Report on Form 10-K for the year ended December 31, 2012, as updated by any new or modified risk factors disclosed in Part II – Item 1A of any subsequently filed Quarterly Report on Form 10-Q, include all known risks that our management believes could materially affect the results described by forward-looking statements in this report.  However, those risks may not be the only risks we face.  Our results of operations, cash flows, financial position, and prospects could also be materially and adversely affected by additional factors that are not presently known to us, that we currently consider to be immaterial, or that develop after the date of this report.  We cannot assure you that our future results will meet expectations. While we believe the forward-looking statements in this report are reasonable, you should not place undue reliance on any forward-looking statement. In addition, these statements speak only as of the date made. We do not undertake, and expressly disclaim, any obligation to update or alter any statements, whether as a result of new information, future events, or otherwise, except as required by applicable law.

2
Part I - Item 1.     
INDEPENDENT BANK CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Financial Condition
 
 
  
June 30,
    
December 31,
  
 
  
2013
    
2012
  
 
  
(unaudited)
  
Assets
  
(In thousands, except share amounts)
  
Cash and due from banks
  
$
47,512
    
$
55,487
  
Interest bearing deposits
    
92,863
      
124,295
  
Cash and Cash Equivalents
    
140,375
      
179,782
  
Interest bearing deposits - time
    
8,698
      
-
  
Trading securities
    
293
      
110
  
Securities available for sale
    
353,775
      
208,413
  
Federal Home Loan Bank and Federal Reserve Bank stock, at cost
    
21,496
      
20,838
  
Loans held for sale, carried at fair value
    
35,529
      
47,487
  
Loans held for sale, carried at lower of cost or fair value
    
-
      
3,292
  
Loans
                
Commercial
    
617,050
      
617,258
  
Mortgage
    
503,042
      
527,340
  
Installment
    
190,041
      
189,849
  
Payment plan receivables
    
75,949
      
84,692
  
Total Loans
    
1,386,082
      
1,419,139
  
Allowance for loan losses
    
(36,786
)
    
(44,275
)
Net Loans
    
1,349,296
      
1,374,864
  
Other real estate and repossessed assets
    
17,790
      
26,133
  
Property and equipment, net
    
47,450
      
47,016
  
Bank-owned life insurance
    
51,564
      
50,890
  
Deferred tax assets, net
    
58,066
      
-
  
Capitalized mortgage loan servicing rights
    
13,037
      
11,013
  
Vehicle service contract counterparty receivables, net
    
15,091
      
18,449
  
Other intangibles
    
3,569
      
3,975
  
Prepaid FDIC deposit insurance assessment
    
-
      
9,448
  
Accrued income and other assets
    
18,645
      
22,157
  
Total Assets
  
$
2,134,674
    
$
2,023,867
  
Liabilities and Shareholders' Equity
                
Deposits
                
Non-interest bearing
  
$
498,511
    
$
488,126
  
Savings and interest-bearing checking
    
898,782
      
871,238
  
Reciprocal
    
46,722
      
33,242
  
Retail time
    
358,849
      
372,340
  
Brokered time
    
13,225
      
14,591
  
Total Deposits
    
1,816,089
      
1,779,537
  
Other borrowings
    
17,503
      
17,625
  
Subordinated debentures
    
50,175
      
50,175
  
Vehicle service contract counterparty payables
    
6,292
      
7,725
  
Accrued expenses and other liabilities
    
35,780
      
33,830
  
Total Liabilities
    
1,925,839
      
1,888,892
  
Shareholders' Equity
                
Convertible preferred stock, no par value, 200,000 shares authorized; 74,426 shares issued and outstanding at June 30, 2013 and December 31, 2012; liquidation preference: $87,292 at June 30, 2013 and $85,150 at December 31, 2012
    
 
86,455
      
 
84,204
  
Common stock, no par value, 500,000,000 shares authorized; issued and outstanding:  9,481,505 shares at June 30, 2013 and 9,093,732 shares at December 31, 2012
    
255,114
      
251,237
  
Accumulated deficit
    
(125,464
)
    
(192,408
)
Accumulated other comprehensive loss
    
(7,270
)
    
(8,058
)
Total Shareholders' Equity
    
208,835
      
134,975
  
Total Liabilities and Shareholders' Equity
  
$
2,134,674
    
$
2,023,867
  

See notes to interim condensed consolidated financial statements (unaudited)
3
INDEPENDENT BANK CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
 
 
  
Three Months Ended
    
Six Months Ended
  
 
  
June 30,
    
June 30,
  
 
  
2013
    
2012
    
2013
    
2012
  
 
  
(unaudited)
  
 
  
(In thousands)
  
Interest Income
  
   
   
   
 
Interest and fees on loans
  
$
20,303
    
$
23,696
    
$
41,013
    
$
48,042
  
Interest on securities
                                
Taxable
    
993
      
933
      
1,663
      
1,591
  
Tax-exempt
    
242
      
244
      
480
      
540
  
Other investments
    
324
      
382
      
656
      
778
  
Total Interest Income
    
21,862
      
25,255
      
43,812
      
50,951
  
Interest Expense
                                
Deposits
    
1,463
      
2,305
      
2,992
      
4,729
  
Other borrowings
    
876
      
1,120
      
1,741
      
2,292
  
Total Interest Expense
    
2,339
      
3,425
      
4,733
      
7,021
  
Net Interest Income
    
19,523
      
21,830
      
39,079
      
43,930
  
Provision for loan losses
    
(2,107
)
    
1,056
      
(2,798
)
    
6,187
  
Net Interest Income After Provision for Loan Losses
    
21,630
      
20,774
      
41,877
      
37,743
  
Non-interest Income
                                
Service charges on deposit accounts
    
3,583
      
4,552
      
6,989
      
8,753
  
Interchange income
    
1,933
      
2,407
      
3,690
      
4,729
  
Net gains (losses) on assets
                                
Mortgage loans
    
3,208
      
3,579
      
6,845
      
7,439
  
Securities
    
107
      
169
      
191
      
853
  
Other than temporary impairment loss on securities
                                
Total impairment loss
    
(26
)
    
(85
)
    
(26
)
    
(262
)
Loss recognized in other comprehensive loss
    
-
      
-
      
-
      
-
  
Net impairment loss recognized in earnings
    
(26
)
    
(85
)
    
(26
)
    
(262
)
Mortgage loan servicing
    
1,654
      
(1,088
)
    
2,276
      
(352
)
Title insurance fees
    
368
      
489
      
852
      
997
  
(Increase) decrease in fair value of U.S. Treasury warrant
    
20
      
(25
)
    
(1,025
)
    
(179
)
Other
    
2,164
      
3,044
      
4,287
      
5,648
  
Total Non-interest Income
    
13,011
      
13,042
      
24,079
      
27,626
  
Non-interest Expense
                                
Compensation and employee benefits
    
11,715
      
13,506
      
23,022
      
25,988
  
Occupancy, net
    
2,147
      
2,490
      
4,571
      
5,206
  
Data processing
    
2,042
      
2,003
      
3,958
      
3,936
  
Loan and collection
    
1,702
      
2,407
      
3,928
      
5,297
  
Vehicle service contract counterparty contingencies
    
3,127
      
326
      
3,254
      
797
  
Furniture, fixtures and equipment
    
1,088
      
1,211
      
2,120
      
2,407
  
Communications
    
730
      
922
      
1,510
      
1,895
  
Legal and professional
    
664
      
1,268
      
1,356
      
2,165
  
FDIC deposit insurance
    
711
      
816
      
1,341
      
1,673
  
Advertising
    
659
      
639
      
1,229
      
1,195
  
Provision for loss reimbursement on sold loans
    
356
      
126
      
1,019
      
558
  
Net losses on other real estate and repossessed assets
    
320
      
633
      
972
      
1,620
  
Interchange expense
    
418
      
447
      
828
      
853
  
Credit card and bank service fees
    
331
      
624
      
665
      
1,275
  
Cost (recoveries) related to unfunded lending commitments
    
48
      
(12
)
    
29
      
(59
 )
Other
    
1,684
      
2,077
      
3,413
      
2,726
  
Total Non-interest Expense
    
27,742
      
29,483
      
53,215
      
57,532
  
Income Before Income Tax
    
6,899
      
4,333
      
12,741
      
7,837
  
Income tax benefit
    
(56,489
)
    
-
      
(56,454
)
    
-
  
Net Income
  
$
63,388
    
$
4,333
    
$
69,195
    
$
7,837
  
Preferred stock dividends and discount accretion
    
1,157
      
1,092
      
2,252
      
2,148
  
Net Income Applicable to Common Stock
  
$
62,231
    
$
3,241
    
$
66,943
    
$
5,689
  
Net Income Per Common Share
                                
Basic
  
$
6.56
    
$
0.38
    
$
7.14
    
$
0.66
  
Diluted
    
2.64
      
0.11
      
2.90
      
0.19
  
Dividends Per Common Share
                                
Declared
  
$
.00
    
$
.00
    
$
.00
    
$
.00
  
Paid
    
.00
      
.00
      
.00
      
.00
  
 
See notes to interim condensed consolidated financial statements (unaudited)

4
INDEPENDENT BANK CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Comprehensive Income

 
  
Three months ended
    
Six months ended
  
 
  
June 30,
    
June 30,
  
 
  
2013
    
2012
    
2013
    
2012
  
 
  
(unaudited)
    
(unaudited)
  
 
  
(In thousands)
    
(In thousands)
  
Net income
  
$
63,388
    
$
4,333
    
$
69,195
    
$
7,837
  
Other comprehensive income (loss), before tax
                                
Available for sale securities
                                
Unrealized gain (loss) arising during period
    
(2,463
)
    
2,671
      
(1,489
)
    
1,634
  
Change in unrealized losses for which a portion of other than temporary impairment has been recognized in earnings
    
258
      
204
      
291
      
333
  
Reclassification adjustment for other than temporary impairment included in earnings
    
26
      
85
      
26
      
262
  
Reclassification adjustments for (gains) losses included in earnings
    
(15
)
    
(151
)
    
(8
)
    
(843
)
Unrealized gains (losses) recognized in other comprehensive income on available for sale securities
    
(2,194
)
    
2,809
      
(1,180
)
    
1,386
  
Income tax benefit
    
(413
)
    
-
      
(413
)
    
-
  
Unrealized gains (losses) recognized in other comprehensive income on available for sale securities, net of tax
    
(1,781
)
    
2,809
      
(767
)
    
1,386
  
Derivative instruments
                                
Unrealized loss arising during period
    
(35
)
    
(24
)
    
(38
)
    
(75
)
Reclassification adjustment for expense recognized in earnings
    
114
      
120
      
208
      
305
  
Reclassification adjustment for accretion on settled derivatives
    
-
      
146
      
-
      
291
  
Unrealized gains recognized in other comprehensive income on derivative instruments
    
79
      
242
      
170
      
521
  
Income tax benefit
    
(1,385
)
    
-
      
(1,385
)
    
-
  
Unrealized gains recognized in other comprehensive income on derivative instruments, net of tax
    
1,464
      
242
      
1,555
      
521
  
Other comprehensive income (loss)
    
(317
)
    
3,051
      
788
      
1,907
  
Comprehensive income
  
$
63,071
    
$
7,384
    
$
69,983
    
$
9,744
  

See notes to interim condensed consolidated financial statements (unaudited)

5
INDEPENDENT BANK CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
 
 
  
Six months ended June 30,
  
 
  
2013
    
2012
  
 
  
(unaudited - In thousands)
  
Net Income
  
$
69,195
    
$
7,837
  
Adjustments to Reconcile Net Income to Net Cash from Operating Activities
                
Proceeds from sales of loans held for sale
    
249,123
      
246,587
  
Disbursements for loans held for sale
    
(230,320
)
    
(237,733
)
Provision for loan losses
    
(2,798
)
    
6,187
  
Deferred federal income tax benefit
    
(58,066
)
    
-
  
Deferred loan fees
    
(86
)
    
(404
)
Depreciation, amortization of intangible assets and premiums and accretion of discounts on securities and loans
    
(1,735
)
    
(2,351
)
Net gains on mortgage loans
    
(6,845
)
    
(7,439
)
Net gains on securities
    
(191
)
    
(853
)
Securities impairment recognized in earnings
    
26
      
262
  
Net losses on other real estate and repossessed assets
    
972
      
1,620
  
Vehicle service contract counterparty contingencies
    
3,254
      
797
  
Share based compensation
    
427
      
304
  
Increase in accrued income and other assets
    
12,210
      
3,288
  
Increase in accrued expenses and other liabilities
    
1,228
      
4,262
  
Total Adjustments
    
(32,801
)
    
14,527
  
Net Cash from Operating Activities
    
36,394
      
22,364
  
Cash Flow used in Investing Activities
                
Proceeds from the sale of securities available for sale
    
2,940
      
18,999
  
Proceeds from the maturity of securities available for sale
    
23,750
      
60,728
  
Principal payments received on securities available for sale
    
14,697
      
11,220
  
Purchases of securities available for sale
    
(185,450
)
    
(179,262
)
Purchases of interest bearing deposits
    
(8,488
)
    
-
  
Purchase of Federal Reserve Bank stock
    
(658
)
    
-
  
Redemption of Federal Reserve Bank stock
    
-
      
334
  
Net cash from branch sale
    
3,292
      
-
  
Net decrease in portfolio loans (loans originated, net of principal payments)
    
24,938
      
53,220
  
Net proceeds from the sale of watch, substandard and non-performing loans
    
6,721
      
-
  
Proceeds from the collection of vehicle service contract counterparty receivables
    
560
      
396
  
Proceeds from the sale of other real estate and repossessed assets
    
9,821
      
8,912
  
Proceeds from the sale of property and equipment, net
    
3
      
352
  
Capital expenditures
    
(3,881
)
    
(3,609
)
Net Cash used in Investing Activities
    
(111,755
)
    
(28,710
)
Cash Flow from Financing Activities
                
Net increase in total deposits
    
36,552
      
99,472
  
Net increase in other borrowings
    
-
      
9
  
Proceeds from Federal Home Loan Bank advances
    
100
      
12,000
  
Payments of Federal Home Loan Bank advances
    
(222
)
    
(27,467
)
Net increase (decrease) in vehicle service contract counterparty payables
    
(1,433
)
    
485
  
Proceeds from issuance of common stock
    
957
      
497
  
Net Cash from Financing Activities
    
35,954
      
84,996
  
Net Increase (Decrease) in Cash and Cash Equivalents
    
(39,407
)
    
78,650
  
Cash and Cash Equivalents at Beginning of Period
    
179,782
      
341,108
  
Cash and Cash Equivalents at End of Period
  
$
140,375
    
$
419,758
  
Cash paid during the period for
                
Interest
  
$
3,617
    
$
5,914
  
Income taxes
    
76
      
186
  
Transfers to other real estate and repossessed assets
    
2,450
      
5,994
  
Transfer of payment plan receivables to vehicle service contract counterparty receivables
    
418
      
849
  
Purchase of securities available for sale and interest bearing deposits - time not yet settled
    
3,211
      
-
  
Transfers to loans held for sale
    
-
      
54,127
  
Transfers to fixed assets held for sale
    
-
      
11,065
  
Transfers to deposits held for sale
    
-
      
420,261
  

See notes to interim condensed consolidated financial statements (unaudited)
6
INDEPENDENT BANK CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Shareholders' Equity

 
  
Six months ended
  
 
  
June 30,
  
 
  
2013
    
2012
  
 
  
(unaudited)
  
 
  
(In thousands)
  
 
  
   
 
Balance at beginning of period
  
$
134,975
    
$
102,627
  
Net income
    
69,195
      
7,837
  
Issuance of common stock
    
1,966
      
497
  
Common stock warrant
    
1,484
      
-
  
Share based compensation
    
427
      
304
  
Net change in accumulated other comprehensive loss, net of related tax effect
    
788
      
1,907
  
Balance at end of period
  
$
208,835
    
$
113,172
  

See notes to interim condensed consolidated financial statements (unaudited)
7
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

1.
Preparation of Financial Statements

The condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and note disclosures normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to those rules and regulations, although we believe that the disclosures made are adequate to make the information not misleading.  The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes for the year ended December 31, 2012 included in our Annual Report on Form 10-K.

In our opinion, the accompanying unaudited condensed consolidated financial statements contain all the adjustments necessary to present fairly our consolidated financial condition as of June 30, 2013 and December 31, 2012, and the results of operations for the three and six-month periods ended June 30, 2013 and 2012.  The results of operations for the three and six-month periods ended June 30, 2013, are not necessarily indicative of the results to be expected for the full year.  Certain reclassifications have been made in the prior period financial statements to conform to the current period presentation.  Our critical accounting policies include the assessment for other than temporary impairment (“OTTI”) on investment securities,  the determination of the allowance for loan losses, the determination of vehicle service contract counterparty contingencies, the valuation of originated mortgage loan servicing rights and the valuation of deferred tax assets.  Refer to our 2012 Annual Report on Form 10-K for a disclosure of our accounting policies.

2.
New Accounting Standards

In February, 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2013-02, “Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income”. This ASU amended guidance on the reporting of reclassifications out of accumulated other comprehensive income.  The amendments in this guidance require an entity to report the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income if the amount being reclassified is required under GAAP to be reclassified in its entirety to net income. For other amounts that are not required under 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 GAAP that provide additional detail about those amounts.  This amended guidance became effective for us at January 1, 2013 and was applied prospectively.  The effect of adopting this standard did not have a material impact on our consolidated operating results or financial condition, but the additional disclosures are included in note #16.
8
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

3.
Securities

Securities available for sale consist of the following:

 
  
Amortized
    
Unrealized
    
 
 
  
Cost
    
Gains
    
Losses
    
Fair Value
  
 
  
(In thousands)
  
June 30, 2013
  
   
   
   
 
U.S. agency
  
$
13,565
    
$
-
    
$
151
    
$
13,414
  
U.S. agency residential mortgage-backed
    
184,074
      
1,492
      
306
      
185,260
  
Private label residential mortgage-backed
    
8,105
      
94
      
717
      
7,482
  
Other asset backed
    
10,979
      
-
      
-
      
10,979
  
Obligations of states and political subdivisions
    
125,963
      
481
      
2,011
      
124,433
  
Corporate
    
9,886
      
1
      
75
      
9,812
  
Trust preferred
    
2,899
      
-
      
504
      
2,395
  
Total
  
$
355,471
    
$
2,068
    
$
3,764
    
$
353,775
  
 
                                
December 31, 2012
                                
U.S. agency
  
$
30,620
    
$
70
    
$
23
    
$
30,667
  
U.S. agency residential mortgage-backed
    
126,151
      
1,264
      
3
      
127,412
  
Private label residential mortgage-backed
    
9,070
      
-
      
876
      
8,194
  
Obligations of states and political subdivisions
    
38,384
      
736
      
69
      
39,051
  
Trust preferred
    
4,704
      
-
      
1,615
      
3,089
  
Total
  
$
208,929
    
$
2,070
    
$
2,586
    
$
208,413
  

Our investments’ gross unrealized losses and fair values aggregated by investment type and length of time that individual securities have been at a continuous unrealized loss position follows:
 
 
  
Less Than Twelve Months
    
Twelve Months or More
    
Total
  
 
  
   
Unrealized
    
   
Unrealized
    
   
Unrealized
  
 
  
Fair Value
    
Losses
    
Fair Value
    
Losses
    
Fair Value
    
Losses
  
 
  
(In thousands)
  
 
  
   
   
   
   
   
 
June 30, 2013
  
   
   
   
   
   
 
U.S. agency
  
$
13,414
    
$
151
    
$
-
    
$
-
    
$
13,414
    
$
151
  
U.S. agency residential mortgage-backed
    
60,581
      
306
      
-
      
-
      
60,581
      
306
  
Private label residential mortgage-backed
    
483
      
7
      
5,103
      
710
      
5,586
      
717
  
Obligations of states and political subdivisions
    
89,833
      
1,964
      
1,209
      
47
      
91,042
      
2,011
  
Corporate
    
7,812
      
75
      
-
      
-
      
7,812
      
75
  
Trust preferred
    
-
      
-
      
2,395
      
504
      
2,395
      
504
  
Total
  
$
172,123
    
$
2,503
    
$
8,707
    
$
1,261
    
$
180,830
    
$
3,764
  
 
                                                
December 31, 2012
                                                
U.S. agency
  
$
8,097
    
$
23
    
$
-
    
$
-
    
$
8,097
    
$
23
  
U.S. agency residential mortgage-backed
    
-
      
-
      
457
      
3
      
457
      
3
  
Private label residential mortgage-backed
    
-
      
-
      
8,192
      
876
      
8,192
      
876
  
Obligations of states and political subdivisions
    
7,384
      
69
      
-
      
-
      
7,384
      
69
  
Trust preferred
    
-
      
-
      
3,089
      
1,615
      
3,089
      
1,615
  
Total
  
$
15,481
    
$
92
    
$
11,738
    
$
2,494
    
$
27,219
    
$
2,586
  

9
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

Our portfolio of available-for-sale securities is reviewed quarterly for impairment in value. In performing this review management considers (1) the length of time and extent that fair value has been less than cost, (2) the financial condition and near term prospects of the issuer, (3) the impact of changes in market interest rates on the market value of the security and (4) an assessment of whether we intend to sell, or it is more likely than not that we will be required to sell a security in an unrealized loss position before recovery of its amortized cost basis. For securities that do not meet the aforementioned recovery criteria, the amount of impairment recognized in earnings is limited to the amount related to credit losses, while impairment related to other factors is recognized in other comprehensive income or loss.

U.S. agency and U.S. agency residential mortgage-backed securities — at June 30, 2013 we had four U.S. Agency and nine U.S. Agency residential mortgage-backed securities whose fair market value is less than amortized cost. The unrealized losses are largely attributed to rises in term interest rates and widening spreads to Treasury bonds. As management does not intend to liquidate these securities and it is more likely than not that we will not be required to sell these securities prior to recovery of these unrealized losses, no declines are deemed to be other than temporary.

Private label residential mortgage backed securities — at June 30, 2013 we had six of these type of securities whose fair value is less than amortized cost. Two of the issues are rated by a major rating agency as investment grade while two are below investment grade and two are split rated. Three of these bonds have impairment in excess of 10% and four of these holdings have been impaired for more than 12 months.

The unrealized losses are largely attributable to credit spread widening on these securities since their acquisition.  The underlying loans within these securities include Jumbo (71%) and Alt A (29%) at June 30, 2013.

 
  
June 30, 2013
    
December 31, 2012
  
 
  
   
Net
    
   
Net
  
 
  
Fair
    
Unrealized
    
Fair
    
Unrealized
  
 
  
Value
    
Gain (Loss)
    
Value
    
Gain (Loss)
  
 
  
(In thousands)
  
 
  
   
   
   
 
Private label residential mortgage-backed
  
   
   
   
 
Jumbo
  
$
5,299
    
$
(483
)
  
$
6,041
    
$
(594
)
Alt-A
    
2,183
      
(140
)
    
2,153
      
(282
)

All of these securities are receiving some principal and interest payments. Most of these transactions are passthrough structures, receiving pro rata principal and interest payments from a dedicated collateral pool for loans that are performing. The nonreceipt of interest cash flows is not expected and thus not presently considered in our discounted cash flow methodology discussed below.
10
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

All private label residential mortgage-backed securities are reviewed for OTTI utilizing a cash flow projection. The cash flow analysis forecasts cash flow from the underlying loans in each transaction and then applies these cash flows to the bonds in the securitization. The cash flows from the underlying loans consider contractual payment terms (scheduled amortization), prepayments, defaults and severity of loss given default. The analysis uses dynamic assumptions for prepayments, defaults and loss severity. Near term prepayment assumptions are based on recently observed prepayment rates. More weight is given to longer term historic performance (12 months). In some cases, recently observed prepayment rates are lower than historic norms due to a minimal amount of new jumbo loan issuances. This loan market is heavily dependent upon securitization for funding, and new securitization transactions have been minimal. Our model projections anticipate that prepayment rates gradually revert to historical levels. For seasoned ARM transactions, normalized prepayment rates range from 12% to 24% CPR. For fixed rate collateral (one transaction), the prepayment speeds are projected to remain stable.

Default assumptions are largely based on the volume of existing real estate owned, pending foreclosures and severe delinquencies. Other considerations include the quality of loan underwriting, recent default experience, realized loss performance and the volume of less severe delinquencies. Default levels generally are projected to remain elevated or increase for a period of time sufficient to address the level of distressed loans in the transaction. Our projections expect defaults to then decline, generally beginning in year three. Current loss severity assumptions are based on recent observations when meaningful data is available. Loss severity is expected to remain elevated for the next 18 months. Severity is expected to decline beginning in year two due to improving overall economic conditions, improving real estate prices and a reduced inventory of foreclosed properties on the market. Except for three securities discussed in further detail below (all three are currently below investment grade), our cash flow analysis forecasts complete recovery of our cost basis for each reviewed security.

At June 30, 2013 three below investment grade private label residential mortgage-backed securities had credit related OTTI and are summarized as follows:

 
  
   
Super
    
Senior
    
 
 
  
Senior
    
Senior
    
Support
    
 
 
  
Security
    
Security
    
Security
    
Total
  
 
  
(In thousands)
  
 
  
   
   
   
 
As of June 30, 2013
  
   
   
   
 
Fair value
  
$
2,903
    
$
1,838
    
$
57
    
$
4,798
  
Amortized cost
    
3,231
      
1,801
      
-
      
5,032
  
Non-credit unrealized loss
    
328
      
-
      
-
      
328
  
Unrealized gain
    
-
      
37
      
57
      
94
  
Cumulative credit related OTTI
    
748
      
457
      
380
      
1,585
  
 
                                
Credit related OTTI recognized in our Condensed
                                
Consolidated Statements of Operations
                                
For the three months ended June 30,
                                
2013
  
$
26
    
$
-
    
$
-
    
$
26
  
2012
    
85
      
-
      
-
      
85
  
For the six months ended June 30,
                                
2013
    
26
      
-
      
-
      
26
  
2012
    
170
      
32
      
60
      
262
  

11
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

Each of these securities are receiving principal and interest payments similar to principal reductions in the underlying collateral.  Two of these securities have an unrealized gain and one has an unrealized loss at June 30, 2013.  Prior to June 30, 2013 all three of these securities had an unrealized loss.  The original amortized cost for each of these securities has been permanently adjusted downward for previously recorded credit related OTTI.  During the second quarter of 2013, the unrealized losses (based on original amortized cost) for two of these securities are now less than previously recorded credit related OTTI amounts.  The remaining non-credit related unrealized loss in the senior security is attributed to other factors and is reflected in other comprehensive income during those same periods.

As management does not intend to liquidate these securities and it is more likely than not that we will not be required to sell these securities prior to recovery of these unrealized losses, no other declines discussed above are deemed to be other than temporary.

Obligations of states and political subdivisions — at June 30, 2013 we had 97 municipal securities whose fair value is less than amortized cost. The increase in unrealized losses during the first half of 2013 is primarily due to increases in interest rates.  As management does not intend to liquidate these securities and it is more likely than not that we will not be required to sell these securities prior to recovery of these unrealized losses, no declines are deemed to be other than temporary.

Corporate — at June 30, 2013 we had six corporate securities whose fair value is less than amortized cost. The unrealized losses are primarily due to credit spread widening.  As management does not intend to liquidate these securities and it is more likely than not that we will not be required to sell these securities prior to recovery of these unrealized losses, no declines are deemed to be other than temporary.

Trust preferred securities — at June 30, 2013 we had three trust preferred securities whose fair value is less than amortized cost. All of our trust preferred securities are single issue securities issued by a trust subsidiary of a bank holding company. The pricing of trust preferred securities over the past several years has suffered from credit spread widening fueled by uncertainty regarding potential losses of financial companies and repricing of risk related to these hybrid capital securities.

One of the three securities is rated by two major rating agencies as investment grade, while one is rated below investment grade by two major rating agencies and the other one is non-rated. The non-rated issue is a relatively small bank and was never rated. The issuer of this non-rated trust preferred security, which had a total amortized cost of $1.0 million and total fair value of $0.8 million as of June 30, 2013, continues to have satisfactory credit metrics and make interest payments.

The following table breaks out our trust preferred securities in further detail as of June 30, 2013 and December 31, 2012:

 
  
June 30, 2013
    
December 31, 2012
  
 
  
   
Net
    
   
Net
  
 
  
Fair
    
Unrealized
    
Fair
    
Unrealized
  
 
  
Value
    
Loss
    
Value
    
Loss
  
 
  
(In thousands)
  
 
  
   
   
   
 
Trust preferred securities
  
   
   
   
 
Rated issues
  
$
1,615
    
$
(284
)
  
$
1,581
    
$
(316
)
Unrated issues
    
780
      
(220
)
    
1,508
      
(1,299
)

12
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

As management does not intend to liquidate these securities and it is more likely than not that we will not be required to sell these securities prior to recovery of these unrealized losses, no declines are deemed to be other than temporary.

We recorded credit related OTTI charges in earnings on securities available for sale of $0.026 million and $0.085 million during the three month periods ended June 30, 2013 and 2012, respectively and $0.026 million and $0.262 million during the six month periods ended June 30, 2013 and 2012, respectively (see discussion above).

A roll forward of credit losses recognized in earnings on securities available for sale for the three and six month periods ending June 30, follows:

 
  
Three months ended
    
Six months ended
  
 
  
June 30,
    
June 30,
  
 
  
2013
    
2012
    
2013
    
2012
  
 
  
(In thousands)
  
Balance at beginning of period
  
$
1,809
    
$
1,647
    
$
1,809
    
$
1,470
  
Additions to credit losses on securities for which no previous OTTI was recognized
    
-
      
-
      
-
      
-
  
Increases to credit losses on securities for which OTTI was previously recognized
    
26
      
85
      
26
      
262
  
Balance at end of period
  
$
1,835
    
$
1,732
    
$
1,835
    
$
1,732
  

The amortized cost and fair value of securities available for sale at June 30, 2013, by contractual maturity, follow. The actual maturity may differ from the contractual maturity because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

 
  
Amortized
    
Fair
  
 
  
Cost
    
Value
  
 
  
(In thousands)
  
Maturing within one year
  
$
5,428
    
$
5,435
  
Maturing after one year but within five years
    
42,273
      
42,308
  
Maturing after five years but within ten years
    
26,061
      
26,062
  
Maturing after ten years
    
78,551
      
76,249
  
 
    
152,313
      
150,054
  
U.S. agency residential mortgage-backed
    
184,074
      
185,260
  
Private label residential mortgage-backed
    
8,105
      
7,482
  
Other asset backed
    
10,979
      
10,979
  
Total
  
$
355,471
    
$
353,775
  

Gains and losses realized on the sale of securities available for sale are determined using the specific identification method and are recognized on a trade-date basis.  A summary of proceeds from the sale of securities available for sale and gains and losses for the six month periods ending June 30, follows:

 
  
   
Realized
    
 
 
  
Proceeds
    
Gains
    
Losses(1)
  
 
  
(In thousands)
  
2013
  
$
2,940
    
$
15
    
$
7
  
2012
    
18,999
      
843
      
-
  
 
(1)
Losses in 2013 and 2012 exclude $0.026 million and $0.262 million, respectively of credit related OTTI recognized in earnings.
13
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

During 2013 and 2012 our trading securities consisted of various preferred stocks.  During the first six months of 2013 and 2012 we recognized gains on trading securities of $0.183 million and $0.010 million, respectively, that are included in net gains (losses) on securities in the Condensed Consolidated Statements of Operations.  Both of these amounts, relate to gains  recognized on trading securities still held at each respective period end.

4.
Loans

Our assessment of the allowance for loan losses is based on an evaluation of the loan portfolio, recent loss experience, current economic conditions and other pertinent factors.

An analysis of the allowance for loan losses by portfolio segment for the three months ended June 30, follows:

 
  
   
   
   
Payment
    
   
 
 
  
   
   
   
Plan
    
   
 
 
  
Commercial
    
Mortgage
    
Installment
    
Receivables
    
Unallocated
    
Total
  
 
  
(In thousands)
  
2013
  
   
   
   
   
   
 
Balance at beginning of period
  
$
10,058
    
$
20,163
    
$
3,162
    
$
129
    
$
7,253
    
$
40,765
  
Additions (deductions)
                                                
Provision for loan losses
    
(1,404
)
    
(349
)
    
141
      
(12
)
    
(483
)
    
(2,107
)
Recoveries credited to allowance
    
3,181
      
450
      
306
      
21
      
-
      
3,958
  
Loans charged against the allowance
    
(3,599
)
    
(1,605
)
    
(613
)
    
(13
)
    
-
      
(5,830
)
Balance at end of period
  
$
8,236
    
$
18,659
    
$
2,996
    
$
125
    
$
6,770
    
$
36,786
  
 
                                                
2012
                                                
Balance at beginning of period
  
$
16,441
    
$
23,271
    
$
5,534
    
$
206
    
$
10,554
    
$
56,006
  
Additions (deductions)
                                                
Provision for loan losses
    
1,194
      
570
      
229
      
(7
)
    
(930
)
    
1,056
  
Recoveries credited to allowance
    
390
      
572
      
389
      
-
      
-
      
1,351
  
Loans charged against the allowance
    
(2,379
)
    
(2,950
)
    
(953
)
    
(4
)
    
-
      
(6,286
)
Reclassification to loans held for sale
    
(170
)
    
(192
)
    
(218
)
    
-
      
(201
)
    
(781
)
Balance at end of period
  
$
15,476
    
$
21,271
    
$
4,981
    
$
195
    
$
9,423
    
$
51,346
  

14
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

An analysis of the allowance for loan losses by portfolio segment for the six months ended June 30, follows:

 
  
   
   
   
Payment
    
   
 
 
  
   
   
   
Plan
    
   
 
 
  
Commercial
    
Mortgage
    
Installment
    
Receivables
    
Unallocated
    
Total
  
 
  
(In thousands)
  
2013
  
   
   
   
   
   
 
Balance at beginning of period
  
$
11,402
    
$
21,447
    
$
3,378
    
$
144
    
$
7,904
    
$
44,275
  
Additions (deductions)
                                                
Provision for loan losses
    
(1,676
)
    
(488
)
    
516
      
(16
)
    
(1,134
)
    
(2,798
)
Recoveries credited to allowance
    
3,717
      
1,072
      
592
      
28
      
-
      
5,409
  
Loans charged against the allowance
    
(5,207
)
    
(3,372
)
    
(1,490
)
    
(31
)
    
-
      
(10,100
)
Balance at end of period
  
$
8,236
    
$
18,659
    
$
2,996
    
$
125
    
$
6,770
    
$
36,786
  
 
                                                
2012
                                                
Balance at beginning of period
  
$
18,183
    
$
22,885
    
$
6,146
    
$
197
    
$
11,473
    
$
58,884
  
Additions (deductions)
                                                
Provision for loan losses
    
2,690
      
4,805
      
518
      
23
      
(1,849
)
    
6,187
  
Recoveries credited to allowance
    
1,396
      
1,120
      
715
      
-
      
-
      
3,231
  
Loans charged against the allowance
    
(6,623
)
    
(7,347
)
    
(2,180
)
    
(25
)
    
-
      
(16,175
)
Reclassification to loans held for sale
    
(170
)
    
(192
)
    
(218
)
    
-
      
(201
)
    
(781
)
Balance at end of period
  
$
15,476
    
$
21,271
    
$
4,981
    
$
195
    
$
9,423
    
$
51,346
  

15
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

Allowance for loan losses and recorded investment in loans by portfolio segment follows:

 
  
   
   
   
Payment
    
   
 
 
  
   
   
   
Plan
    
   
 
 
  
Commercial
    
Mortgage
    
Installment
    
Receivables
    
Unallocated
    
Total
  
 
  
(In thousands)
  
June 30, 2013
  
   
   
   
   
   
 
Allowance for loan losses:
  
   
   
   
   
   
 
Individually evaluated for impairment
  
$
4,446
    
$
11,637
    
$
1,398
    
$
-
    
$
-
    
$
17,481
  
Collectively evaluated for impairment
    
3,790
      
7,022
      
1,598
      
125
      
6,770
      
19,305
  
Total ending allowance balance
  
$
8,236
    
$
18,659
    
$
2,996
    
$
125
    
$
6,770
    
$
36,786
  
 
                                                
Loans
                                                
Individually evaluated for impairment
  
$
47,559
    
$
82,838
    
$
7,184
    
$
-
            
$
137,581
  
Collectively evaluated for impairment
    
571,150
      
422,710
      
183,612
      
75,949
              
1,253,421
  
Total loans recorded investment
    
618,709
      
505,548
      
190,796
      
75,949
              
1,391,002
  
Accrued interest included in recorded investment
    
1,659
      
2,506
      
755
      
-
              
4,920
  
Total loans
  
$
617,050
    
$
503,042
    
$
190,041
    
$
75,949
            
$
1,386,082
  
 
                                                
December 31, 2012
                                                
Allowance for loan losses:
                                                
Individually evaluated for impairment
  
$
6,558
    
$
12,869
    
$
1,582
    
$
-
    
$
-
    
$
21,009
  
Collectively evaluated for impairment
    
4,844
      
8,578
      
1,796
      
144
      
7,904
      
23,266
  
Total ending allowance balance
  
$
11,402
    
$
21,447
    
$
3,378
    
$
144
    
$
7,904
    
$
44,275
  
 
                                                
Loans
                                                
Individually evaluated for impairment
  
$
55,634
    
$
88,028
    
$
7,505
    
$
-
            
$
151,167
  
Collectively evaluated for impairment
    
563,316
      
441,703
      
183,090
      
84,692
              
1,272,801
  
Total loans recorded investment
    
618,950
      
529,731
      
190,595
      
84,692
              
1,423,968
  
Accrued interest included in recorded investment
    
1,692
      
2,391
      
746
      
-
              
4,829
  
Total loans
  
$
617,258
    
$
527,340
    
$
189,849
    
$
84,692
            
$
1,419,139
  

16
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

Loans on non-accrual status and past due more than 90 days (“Non-performing Loans”) follow:

 
  
90+ and
    
   
Total Non-
  
 
  
Still
    
Non-
    
Performing
  
 
  
Accruing
    
Accrual
    
Loans
  
 
  
(In thousands)
  
June 30, 2013
  
   
   
 
Commercial
  
   
   
 
Income producing - real estate
  
$
120
    
$
1,580
    
$
1,700
  
Land, land development and construction - real estate
    
-
      
1,775
      
1,775
  
Commercial and industrial
    
9
      
1,503
      
1,512
  
Mortgage
                        
1-4 family
    
3
      
7,901
      
7,904
  
Resort lending
    
-
      
3,780
      
3,780
  
Home equity line of credit - 1st lien
    
-
      
429
      
429
  
Home equity line of credit - 2nd lien
    
-
      
729
      
729
  
Installment
                        
Home equity installment - 1st lien
    
-
      
1,284
      
1,284
  
Home equity installment - 2nd lien
    
-
      
494
      
494
  
Loans not secured by real estate
    
-
      
431
      
431
  
Other
    
-
      
-
      
-
  
Payment plan receivables
                        
Full refund
    
-
      
57
      
57
  
Partial refund
    
-
      
10
      
10
  
Other
    
-
      
-
      
-
  
Total recorded investment
  
$
132
    
$
19,973
    
$
20,105
  
Accrued interest included in recorded investment
  
$
1
    
$
-
    
$
1
  
December 31, 2012
                        
Commercial
                        
Income producing - real estate
  
$
-
    
$
5,611
    
$
5,611
  
Land, land development and construction - real estate
    
-
      
4,062
      
4,062
  
Commercial and industrial
    
-
      
5,080
      
5,080
  
Mortgage
                        
1-4 family
    
7
      
9,654
      
9,661
  
Resort lending
    
-
      
4,861
      
4,861
  
Home equity line of credit - 1st lien
    
-
      
529
      
529
  
Home equity line of credit - 2nd lien
    
-
      
685
      
685
  
Installment
                        
Home equity installment - 1st lien
    
-
      
1,278
      
1,278
  
Home equity installment - 2nd lien
    
-
      
675
      
675
  
Loans not secured by real estate
    
-
      
390
      
390
  
Other
    
-
      
-
      
-
  
Payment plan receivables
                        
Full refund
    
-
      
57
      
57
  
Partial refund
    
-
      
38
      
38
  
Other
    
-
      
9
      
9
  
Total recorded investment
  
$
7
    
$
32,929
    
$
32,936
  
Accrued interest included in recorded investment
  
$
-
    
$
-
    
$
-
  

17
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

An aging analysis of loans by class follows:

 
  
Loans Past Due
    
Loans not
    
Total
  
 
  
30-59 days
    
60-89 days
    
90+ days
    
Total
    
Past Due
    
Loans
  
 
  
(In thousands)
  
June 30, 2013
  
   
   
   
   
   
 
Commercial
  
   
   
   
   
   
 
Income producing - real estate
  
$
185
    
$
315
    
$
1,229
    
$
1,729
    
$
233,654
    
$
235,383
  
 
                                                
Land, land development and construction - real estate
    
-
      
-
      
427
      
427
      
39,071
      
39,498
  
Commercial and industrial
    
1,190
      
995
      
495
      
2,680
      
341,148
      
343,828
  
Mortgage
                                                
1-4 family
    
4,292
      
805
      
7,904
      
13,001
      
271,706
      
284,707
  
Resort lending
    
124
      
-
      
3,780
      
3,904
      
154,302
      
158,206
  
Home equity line of credit - 1st lien
    
369
      
-
      
429
      
798
      
17,779
      
18,577
  
Home equity line of credit - 2nd lien
    
470
      
194
      
729
      
1,393
      
42,665
      
44,058
  
Installment
                                                
Home equity installment - 1st lien
    
624
      
170
      
1,284
      
2,078
      
27,441
      
29,519
  
Home equity installment - 2nd lien
    
429
      
110
      
494
      
1,033
      
37,150
      
38,183
  
Loans not secured by real estate
    
797
      
213
      
431
      
1,441
      
119,039
      
120,480
  
Other
    
38
      
10
      
-
      
48
      
2,566
      
2,614
  
Payment plan receivables
                                                
Full refund
    
1,817
      
753
      
57
      
2,627
      
68,853
      
71,480
  
Partial refund
    
98
      
29