10-Q 1 form10q.htm INDEPENDENT BANK CORPORATION 10-Q 9-30-2013
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 September 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).
YESx NO o

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 o
Accelerated filer o
Non-accelerated filer o
Smaller reporting companyx

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
YES o 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
22,813,593
Class
Outstanding at November 6, 2013
 
INDEPENDENT BANK CORPORATION AND SUBSIDIARIES

INDEX

 
 
Number(s)
PART I -
Financial Information
 
Item 1.
3
 
4
 
5
 
6
 
7
 
8-68
Item 2.
69-99
Item 3.
100
Item 4.
100
 
 
 
PART II -
Other Information
 
Item 1A
101
Item 2.
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; and predictions as to our Bank’s ability to maintain certain regulatory capital standards. 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:

· the failure of assumptions underlying the establishment of and provisions made to our allowance for loan losses;
· 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;
· 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
1
· 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
 
 
  
September 30,
2013
    
December 31,
2012
  
 
  
(unaudited)
  
Assets
  
(In thousands, except share amounts)
  
Cash and due from banks
  
$
56,179
    
$
55,487
  
Interest bearing deposits
    
74,766
      
124,295
  
Cash and Cash Equivalents
    
130,945
      
179,782
  
Interest bearing deposits - time
    
16,946
      
-
  
Trading securities
    
308
      
110
  
Securities available for sale
    
415,885
      
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
    
27,622
      
47,487
  
Loans held for sale, carried at lower of cost or fair value
    
-
      
3,292
  
Loans
                
Commercial
    
625,422
      
617,258
  
Mortgage
    
491,525
      
527,340
  
Installment
    
194,542
      
189,849
  
Payment plan receivables
    
68,494
      
84,692
  
Total Loans
    
1,379,983
      
1,419,139
  
Allowance for loan losses
    
(34,437
)
    
(44,275
)
Net Loans
    
1,345,546
      
1,374,864
  
Other real estate and repossessed assets
    
16,637
      
26,133
  
Property and equipment, net
    
47,884
      
47,016
  
Bank-owned life insurance
    
51,916
      
50,890
  
Deferred tax assets, net
    
58,807
      
-
  
Capitalized mortgage loan servicing rights
    
13,051
      
11,013
  
Vehicle service contract counterparty receivables, net
    
9,753
      
18,449
  
Other intangibles
    
3,366
      
3,975
  
Prepaid FDIC deposit insurance assessment
    
-
      
9,448
  
Accrued income and other assets
    
23,342
      
22,157
  
Total Assets
  
$
2,183,504
    
$
2,023,867
  
Liabilities and Shareholders' Equity
                
Deposits
                
Non-interest bearing
  
$
508,983
    
$
488,126
  
Savings and interest-bearing checking
    
908,599
      
871,238
  
Reciprocal
    
55,924
      
33,242
  
Retail time
    
362,585
      
372,340
  
Brokered time
    
13,227
      
14,591
  
Total Deposits
    
1,849,318
      
1,779,537
  
Other borrowings
    
17,282
      
17,625
  
Subordinated debentures
    
50,175
      
50,175
  
Vehicle service contract counterparty payables
    
5,499
      
7,725
  
Accrued expenses and other liabilities
    
34,629
      
33,830
  
Total Liabilities
    
1,956,903
      
1,888,892
  
Shareholders' Equity
                
 
                
Convertible preferred stock, no par value, 200,000 shares authorized; None issued and outstanding at September 30, 2013 and 74,426 shares issued and outstanding at December 31, 2012; liquidation preference: $85,150 at December 31, 2012
    
-
      
84,204
  
Common stock, no par value, 500,000,000 shares authorized; issued and outstanding:  22,808,839 shares at September 30, 2013 and 9,093,732 shares at December 31, 2012
    
350,926
      
251,237
  
Accumulated deficit
    
(115,155
)
    
(192,408
)
Accumulated other comprehensive loss
    
(9,170
)
    
(8,058
)
Total Shareholders' Equity
    
226,601
      
134,975
  
Total Liabilities and Shareholders' Equity
  
$
2,183,504
    
$
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
September 30,
    
Nine Months Ended
September 30,
  
 
  
2013
    
2012
    
2013
    
2012
  
Interest Income
  
(unaudited – in thousands, except per share amounts)
  
Interest and fees on loans
  
$
20,083
    
$
23,385
    
$
61,096
    
$
71,427
  
Interest on securities
                                
Taxable
    
1,109
      
655
      
2,772
      
2,246
  
Tax-exempt
    
282
      
261
      
762
      
801
  
Other investments
    
310
      
432
      
966
      
1,210
  
Total Interest Income
    
21,784
      
24,733
      
65,596
      
75,684
  
Interest Expense
                                
Deposits
    
1,371
      
2,223
      
4,363
      
6,952
  
Other borrowings
    
884
      
1,059
      
2,625
      
3,351
  
Total Interest Expense
    
2,255
      
3,282
      
6,988
      
10,303
  
Net Interest Income
    
19,529
      
21,451
      
58,608
      
65,381
  
Provision for loan losses
    
(355
)
    
251
      
(3,153
)
    
6,438
  
Net Interest Income After Provision for Loan Losses
    
19,884
      
21,200
      
61,761
      
58,943
  
Non-interest Income
                                
Service charges on deposit accounts
    
3,614
      
4,739
      
10,603
      
13,492
  
Interchange income
    
1,852
      
2,324
      
5,542
      
7,053
  
Net gains (losses) on assets
                                
Mortgage loans
    
1,570
      
4,602
      
8,415
      
12,041
  
Securities
    
14
      
301
      
205
      
1,154
  
Other than temporary impairment loss on securities
                                
Total impairment loss
    
-
      
(70
)
    
(26
)
    
(332
)
Loss recognized in other comprehensive loss
    
-
      
-
      
-
      
-
  
Net impairment loss recognized in earnings
    
-
      
(70
)
    
(26
)
    
(332
)
Mortgage loan servicing
    
338
      
(364
)
    
2,614
      
(716
)
Title insurance fees
    
409
      
482
      
1,261
      
1,479
  
(Increase) decrease in fair value of U.S. Treasury warrant
    
-
      
(32
)
    
(1,025
)
    
(211
)
Other
    
2,040
      
2,560
      
6,327
      
8,208
  
Total Non-interest Income
    
9,837
      
14,542
      
33,916
      
42,168
  
Non-interest Expense
                                
Compensation and employee benefits
    
12,591
      
13,610
      
35,613
      
39,598
  
Occupancy, net
    
2,017
      
2,482
      
6,588
      
7,688
  
Data processing
    
2,090
      
2,024
      
6,048
      
5,960
  
Loan and collection
    
1,584
      
2,832
      
5,512
      
8,129
  
Vehicle service contract counterparty contingencies
    
149
      
281
      
3,403
      
1,078
  
Furniture, fixtures and equipment
    
1,051
      
1,083
      
3,171
      
3,490
  
Provision for loss reimbursement on sold loans
    
1,417
      
193
      
2,436
      
751
  
Communications
    
695
      
896
      
2,205
      
2,791
  
FDIC deposit insurance
    
685
      
816
      
2,026
      
2,489
  
Advertising
    
652
      
647
      
1,881
      
1,842
  
Legal and professional
    
487
      
952
      
1,843
      
3,117
  
Interchange expense
    
410
      
468
      
1,238
      
1,321
  
Net losses on other real estate and repossessed assets
    
119
      
291
      
1,091
      
1,911
  
Credit card and bank service fees
    
310
      
433
      
975
      
1,708
  
Write-down of property and equipment held for sale
    
-
      
860
      
-
      
860
  
Cost (recoveries) related to unfunded lending commitments
    
(86
)
    
(538
)
    
(57
)
    
(597
)
Other
    
1,763
      
1,966
      
5,176
      
4,692
  
Total Non-interest Expense
    
25,934
      
29,296
      
79,149
      
86,828
  
Income Before Income Tax
    
3,787
      
6,446
      
16,528
      
14,283
  
Income tax expense (benefit)
    
282
      
-
      
(56,172
)
    
-
  
Net Income
  
$
3,505
    
$
6,446
    
$
72,700
    
$
14,283
  
Preferred stock dividends and discount accretion
    
(749
)
    
(1,093
)
    
(3,001
)
    
(3,241
)
Preferred stock discount
    
7,554
      
-
      
7,554
      
-
  
Net Income Applicable to Common Stock
  
$
10,310
    
$
5,353
    
$
77,253
    
$
11,042
  
Net Income Per Common Share
                                
Basic
  
$
0.73
     $ 0.61    
$
7.03
    
$
1.28
  
Diluted
    
0.17
       0.16      
3.40
      
0.36
  
Dividends Per Common Share
                                
Declared
  
$
0.00
    
$
0.00
    
$
$0.00
     $ 0.00  
Paid
    
0.00
      
0.00
      
0.00
       0.00  
 
See notes to interim condensed consolidated financial statements (unaudited)
4
INDEPENDENT BANK CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Comprehensive Income

 
  
Three months ended
    
Nine months ended
  
 
  
September 30,
    
September 30,
  
 
  
2013
    
2012
    
2013
    
2012
  
 
  
(unaudited - in thousands)
  
Net income
  
$
3,505
    
$
6,446
    
$
72,700
    
$
14,283
  
Other comprehensive income (loss), before tax
Available for sale securities
Unrealized gain (loss) arising during period
    
(2,910
)
    
909
      
(4,399
)
    
2,543
  
Change in unrealized losses for which a portion of other than temporary impairment has been recognized in earnings
    
(108
)
    
770
      
183
      
1,103
  
Reclassification adjustment for other than temporary impairment included in earnings
    
-
      
70
      
26
      
332
  
Reclassification adjustments for (gains) losses included in earnings
    
-
      
(350
)
    
(8
)
    
(1,193
)
Unrealized gains (losses) recognized in other comprehensive income on available for sale securities
    
(3,018
)
    
1,399
      
(4,198
)
    
2,785
  
Income tax benefit
    
(1,056
)
    
-
      
(1,469
)
    
-
  
Unrealized gains (losses) recognized in other comprehensive income on available for sale securities, net of tax
    
(1,962
)
    
1,399
      
(2,729
)
    
2,785
  
Derivative instruments
                                
Unrealized loss arising during period
    
-
      
(54
)
    
(38
)
    
(129
)
Reclassification adjustment for expense recognized in earnings
    
-
      
92
      
208
      
397
  
Reclassification adjustment for accretion on settled derivatives
    
95
      
145
      
95
      
436
  
Unrealized gains recognized in other comprehensive income on derivative instruments
    
95
      
183
      
265
      
704
  
Income tax expense (benefit)
    
33
      
-
      
(1,352
)
    
-
  
Unrealized gains recognized in other comprehensive income on derivative instruments, net of tax
    
62
      
183
      
1,617
      
704
  
Other comprehensive income (loss)
    
(1,900
)
    
1,582
      
(1,112
)
    
3,489
  
Comprehensive income
  
$
1,605
    
$
8,028
    
$
71,588
    
$
17,772
  

 See notes to interim condensed consolidated financial statements (unaudited)
5
INDEPENDENT BANK CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
 
 
  
Nine months ended September 30,
  
 
  
2013
    
2012
  
 
  
(unaudited - in thousands)
  
Net Income
  
$
72,700
    
$
14,283
  
Adjustments to Reconcile Net Income to Net Cash from Operating Activities
                
Proceeds from sales of loans held for sale
    
346,206
      
378,804
  
Disbursements for loans held for sale
    
(317,926
)
    
(363,931
)
Net decrease in loans held for sale relating to branch sale
    
-
      
900
  
Net decrease in deposits held for sale relating to branch sale
     -      
(11,671
)
Provision for loan losses
    
(3,153
 )    
6,438
  
Deferred federal income tax benefit
    
(58,807
)
    
-
  
Deferred loan fees
    
(28
)
    
(501
)
Depreciation, amortization of intangible assets and premiums and accretion of discounts on securities and loans
    
(2,168
)
    
(3,532
)
Write-down of property and equipment held for sale
    
-
      
860
  
Net gains on mortgage loans
    
(8,415
)
    
(12,041
)
Net gains on securities
    
(205
)
    
(1,154
)
Securities impairment recognized in earnings
    
26
      
332
  
Net losses on other real estate and repossessed assets
    
1,091
      
1,911
  
Vehicle service contract counterparty contingencies
    
3,403
      
1,078
  
Share based compensation
    
1,002
      
572
  
(Increase) decrease in accrued income and other assets
    
8,572
      
(5,439
)
Increase (decrease) in accrued expenses and other liabilities
    
(947
)
    
3,957
  
Total Adjustments
    
(31,349
 )    
(3,417
)
Net Cash from Operating Activities
    
41,351
      
10,866
  
Cash Flow used in Investing Activities
                
Proceeds from the sale of securities available for sale
    
2,940
      
37,176
  
Proceeds from the maturity of securities available for sale
    
25,975
      
66,868
  
Principal payments received on securities available for sale
    
28,766
      
18,214
  
Purchases of securities available for sale
    
(266,974
)
    
(192,382
)
Purchases of interest bearing deposits
    
(16,419
 )    
-
  
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)
    
30,255
      
75,148
  
Net proceeds from the sale of watch, substandard and non-performing loans
    
6,721
      
-
  
Proceeds from the collection of vehicle service contract counterparty receivables
    
6,351
      
7,413
  
Proceeds from the sale of other real estate and repossessed assets
    
11,659
      
14,062
  
Proceeds from the sale of property and equipment, net
    
52
      
415
  
Capital expenditures
    
(5,992
)
    
(4,185
)
Net Cash from (used in) Investing Activities
    
(174,032
)
    
23,063
  
Cash Flow from Financing Activities
                
Net increase in total deposits
    
69,781
      
98,836
  
Net increase (decrease) in other borrowings
    
(2
)
    
3
  
Proceeds from Federal Home Loan Bank advances
    
100
      
12,000
  
Payments of Federal Home Loan Bank advances
    
(441
)
    
(27,670
)
Redemption of convertible preferred stock and common stock warrant
    
(81,000
)
    
-
  
Share based compensation withholding obligation
    
(513
)
    
-
  
Net increase (decrease) in vehicle service contract counterparty payables
    
(2,226
)
    
1,781
  
Proceeds from issuance of common stock
    
98,145
      
557
  
Net Cash from Financing Activities
    
83,844
      
85,507
  
Net Increase (Decrease) in Cash and Cash Equivalents
    
(48,837
)
    
119,436
  
Cash and Cash Equivalents at Beginning of Period
    
179,782
      
341,108
  
Cash and Cash Equivalents at End of Period
  
$
130,945
    
$
460,544
  
Cash paid during the period for
                
Interest
  
$
13,853
    
$
8,647
  
Income taxes
    
42
      
198
  
Transfers to other real estate and repossessed assets
    
3,254
      
9,110
  
Transfer of payment plan receivables to vehicle service contract counterparty receivables
    
995
      
1,225
  
Purchase of securities available for sale and interest bearing deposits - time not yet settled
    
3,816
      
-
  
Transfers to loans held for sale
    
-
      
54,127
  
Transfers to fixed assets held for sale
    
-
      
10,884
  
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

 
 
  
Nine months ended
September 30,
  
 
  
2013
    
2012
  
 
  
(unaudited)
  
 
  
(In thousands)
  
Balance at beginning of period
  
$
134,975
    
$
102,627
  
  Net income
    
72,700
      
14,283
  
  Issuance of common stock
    
99,065
      
557
  
  Redemption of convertible preferred stock and common stock warrant
    
(81,000
)
    
-
  
  Common stock warrant
    
1,484
      
-
  
  Share based compensation
    
1,002
      
572
  
  Share based compensation withholding obligation
    
(513
)
    
-
  
Net change in accumulated other comprehensive loss, net of related tax effect
    
(1,112
 )    
3,489
  
Balance at end of period
  
$
226,601
    
$
121,528
  
 
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 September 30, 2013 and December 31, 2012, and the results of operations for the three and nine-month periods ended September 30, 2013 and 2012.  The results of operations for the three and nine-month periods ended September 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)
  
September 30, 2013
  
   
   
   
 
U.S. agency
  
$
23,794
    
$
3
    
$
405
    
$
23,392
  
U.S. agency residential mortgage-backed
    
198,424
      
1,062
      
1,147
      
198,339
  
Private label residential mortgage-backed
    
7,615
      
57
      
779
      
6,893
  
Other asset backed
    
26,877
      
8
      
55
      
26,830
  
Obligations of states and political subdivisions
    
143,957
      
422
      
3,440
      
140,939
  
Corporate
    
17,031
      
22
      
37
      
17,016
  
Trust preferred
    
2,901
      
-
      
425
      
2,476
  
Total
  
$
420,599
    
$
1,574
    
$
6,288
    
$
415,885
  
 
                                
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)
  
 
  
   
   
   
   
   
 
September 30, 2013
  
   
   
   
   
   
 
U.S. agency
  
$
18,090
    
$
405
    
$
-
    
$
-
    
$
18,090
    
$
405
  
U.S. agency residential mortgage-backed
    
84,132
      
1,147
      
-
      
-
      
84,132
      
1,147
  
Private label residential mortgage-backed
    
2,150
      
14
      
4,684
      
765
      
6,834
      
779
  
Other asset backed
    
17,364
      
55
      
-
      
-
      
17,364
      
55
  
Obligations of states and political subdivisions
    
100,584
      
3,210
      
4,940
      
230
      
105,524
      
3,440
  
Corporate
    
10,980
      
37
      
-
      
-
      
10,980
      
37
  
Trust preferred
    
-
      
-
      
2,476
      
425
      
2,476
      
425
  
Total
  
$
233,300
    
$
4,868
    
$
12,100
    
$
1,420
    
$
245,400
    
$
6,288
  
 
                                                
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 September 30, 2013 we had six U.S. Agency and 13 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 September 30, 2013 we had seven of this 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 three 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 (70%) and Alt A (30%) at September 30, 2013.

 
  
September 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
  
$
4,820
    
$
(566
)
  
$
6,041
    
$
(594
)
Alt-A
    
2,073
      
(156
)
    
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 16% 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 after this period 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 September 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 September 30, 2013
  
   
   
   
 
Fair value
  
$
2,584
    
$
1,717
    
$
57
    
$
4,358
  
Amortized cost
    
2,978
      
1,722
      
-
      
4,700
  
Non-credit unrealized loss
    
394
      
5
      
-
      
399
  
Unrealized gain
    
-
      
-
      
57
      
57
  
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 September 30,
                                
2013
  
$
-
    
$
-
    
$
-
    
$
-
  
2012
    
70
      
-
      
-
      
70
  
For the nine months ended September 30,
                                
2013
    
26
      
-
      
-
      
26
  
2012
    
240
      
32
      
60
      
332
  

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

Each of these securities is receiving principal and interest payments similar to principal reductions in the underlying collateral.  One of these securities has an unrealized gain and two have unrealized losses at September 30, 2013.  Prior to the second quarter of 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.  The unrealized loss (based on original amortized cost) for one of these securities is now less than previously recorded credit related OTTI amounts.  The remaining non-credit related unrealized loss in the senior and super senior securities 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.

Other asset backed — at September 30, 2013 we had five other asset backed securities whose fair value is less than amortized cost. The unrealized losses are 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.

Obligations of states and political subdivisions — at September 30, 2013 we had 137 municipal securities whose fair value is less than amortized cost. The increase in unrealized losses during 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 September 30, 2013 we had nine 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 September 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 (a Bank of America issuance) 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 $0.9 million as of September 30, 2013, continues to have satisfactory credit metrics and make interest payments.
12
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

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

 
  
September 30, 2013
    
December 31, 2012
  
 
  
   
Net
    
   
Net
  
 
  
Fair
    
Unrealized
    
Fair
    
Unrealized
  
 
  
Value
    
Loss
    
Value
    
Loss
  
 
  
(In thousands)
  
 
  
   
   
   
 
Trust preferred securities
  
   
   
   
 
Rated issues
  
$
1,620
    
$
(281
)
  
$
1,581
    
$
(316
)
Unrated issues
    
856
      
(144
)
    
1,508
      
(1,299
)

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 zero and $0.070 million during the three month periods ended September 30, 2013 and 2012, respectively and $0.026 million and $0.332 million during the nine month periods ended September 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 nine month periods ending September 30, follows:

 
  
Three months ended
    
Nine months ended
  
 
  
September 30,
    
September 30,
  
 
  
2013
    
2012
    
2013
    
2012
  
 
  
(In thousands)
  
Balance at beginning of period
  
$
1,835
    
$
1,732
    
$
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
    
-
      
70
      
26
      
332
  
Balance at end of period
  
$
1,835
    
$
1,802
    
$
1,835
    
$
1,802
  

The amortized cost and fair value of securities available for sale at September 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
  
$
12,322
    
$
12,325
  
Maturing after one year but within five years
    
70,216
      
70,165
  
Maturing after five years but within ten years
    
29,982
      
29,545
  
Maturing after ten years
    
75,163
      
71,788
  
 
    
187,683
      
183,823
  
U.S. agency residential mortgage-backed
    
198,424
      
198,339
  
Private label residential mortgage-backed
    
7,615
      
6,893
  
Other asset backed
    
26,877
      
26,830
  
Total
  
$
420,599
    
$
415,885
  

13
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

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 nine month periods ending September 30, follows:

 
  
   
Realized
    
 
 
  
Proceeds
    
Gains
    
Losses(1)
  
 
  
(In thousands)
  
2013
  
$
2,940
    
$
15
    
$
7
  
2012
    
37,176
      
1,193
      
-
  
 
(1)
Losses in 2013 and 2012 exclude $0.026 million and $0.332 million, respectively of credit related OTTI recognized in earnings.

During 2013 and 2012 our trading securities consisted of various preferred stocks.  During the first nine months of 2013 and 2012 we recognized gains (losses) on trading securities of $0.20 million and ($0.04) 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 (losses) 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 September 30, follows:

 
  
   
   
   
Payment
    
   
 
 
  
   
   
   
Plan
    
   
 
 
  
Commercial
    
Mortgage
    
Installment
    
Receivables
    
Unallocated
    
Total
  
 
  
(In thousands)
  
2013
  
   
   
   
   
   
 
Balance at beginning of period
  
$
8,236
    
$
18,659
    
$
2,996
    
$
125
    
$
6,770
    
$
36,786
  
Additions (deductions)
Provision for loan losses
    
(709
)
    
712
      
105
      
(37
)
    
(426
)
    
(355
)
Recoveries credited to allowance
    
878
      
343
      
244
      
19
      
-
      
1,484
  
Loans charged against the allowance
    
(1,450
)
    
(1,497
)
    
(534
)
    
3
      
-
      
(3,478
)
Balance at end of period
  
$
6,955
    
$
18,217
    
$
2,811
    
$
110
    
$
6,344
    
$
34,437
  
 
                                                
2012
                                                
Balance at beginning of period
  
$
15,476
    
$
21,271
    
$
4,981
    
$
195
    
$
9,423
    
$
51,346
  
Additions (deductions)
Provision for loan losses
    
18
      
1,839
      
(849
)
    
(17
)
    
(740
)
    
251
  
Recoveries credited to allowance
    
782
      
303
      
287
      
-
      
-
      
1,372
  
Loans charged against the allowance
    
(2,619
)
    
(1,720
)
    
(793
)
    
13
      
-
      
(5,119
)
Reclassification to loans held for sale
    
16
      
136
      
133
      
-
      
(114
)
    
171
  
Balance at end of period
  
$
13,673
    
$
21,829
    
$
3,759
    
$
191
    
$
8,569
    
$
48,021
  

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

An analysis of the allowance for loan losses by portfolio segment for the nine months ended September 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
    
(2,385
)
    
224
      
621
      
(53
)
    
(1,560
)
    
(3,153
)
Recoveries credited to allowance
    
4,595
      
1,415
      
836
      
47
      
-
      
6,893
  
Loans charged against the allowance
    
(6,657
)
    
(4,869
)
    
(2,024
)
    
(28
)
    
-
      
(13,578
)
Balance at end of period
  
$
6,955
    
$
18,217
    
$
2,811
    
$
110
    
$
6,344
    
$
34,437
  
 
                                                
2012
                                                
Balance at beginning of period
  
$
18,183
    
$
22,885
    
$
6,146
    
$
197
    
$
11,473
    
$
58,884
  
Additions (deductions)
Provision for loan losses
    
2,708
      
6,644
      
(331
)
    
6
      
(2,589
)
    
6,438
  
Recoveries credited to allowance
    
2,178
      
1,423
      
1,002
      
-
      
-
      
4,603
  
Loans charged against the allowance
    
(9,242
)
    
(9,067
)
    
(2,973
)
    
(12
)
    
-
      
(21,294
)
Reclassification to loans held for sale
    
(154
)
    
(56
)
    
(85
)
    
-
      
(315
)
    
(610
)
Balance at end of period
  
$
13,673
    
$
21,829
    
$
3,759
    
$
191
    
$
8,569
    
$
48,021
  

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)
  
September 30, 2013
  
   
   
   
   
   
 
Allowance for loan losses:
  
   
   
   
   
   
 
Individually evaluated for impairment
  
$
3,500
    
$
11,318
    
$
1,365
    
$
-
    
$
-
    
$
16,183
  
Collectively evaluated for impairment
    
3,455
      
6,899
      
1,446
      
110
      
6,344
      
18,254
  
Total ending allowance balance
  
$
6,955
    
$
18,217
    
$
2,811
    
$
110
    
$
6,344
    
$
34,437
  
 
                                                
Loans
                                                
Individually evaluated for impairment
  
$
44,789
    
$
79,511
    
$
7,097
    
$
-
            
$
131,397
  
Collectively evaluated for impairment
    
582,213
      
414,311
      
188,104
      
68,494
              
1,253,122
  
Total loans recorded investment
    
627,002
      
493,822
      
195,201
      
68,494
              
1,384,519
  
Accrued interest included in recorded investment
    
1,580
      
2,297
      
659
      
-
              
4,536
  
Total loans
  
$
625,422
    
$
491,525
    
$
194,542
    
$
68,494
            
$
1,379,983
  
 
                                                
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)
  
September 30, 2013
  
   
   
 
Commercial
  
   
   
 
Income producing - real estate
  
$
153
    
$
4,666
    
$
4,819
  
Land, land development and construction - real estate
    
-
      
1,291
      
1,291
  
Commercial and industrial
    
212
      
372
      
584
  
Mortgage
                        
1-4 family
    
-
      
7,520
      
7,520
  
Resort lending
    
-
      
3,039
      
3,039
  
Home equity line of credit - 1st lien
    
-
      
378
      
378
  
Home equity line of credit - 2nd lien
    
-
      
609
      
609
  
Installment
                        
Home equity installment - 1st lien
    
-
      
1,181
      
1,181
  
Home equity installment - 2nd lien
    
-
      
479
      
479
  
Loans not secured by real estate
    
-
      
448
      
448
  
Other
    
-
      
-
      
-
  
Payment plan receivables
                        
Full refund
    
-
      
25
      
25
  
Partial refund
    
-
      
6
      
6
  
Other
    
-
      
-
      
-
  
Total recorded investment
  
$
365
    
$
20,014
    
$
20,379
  
Accrued interest included in recorded investment
  
$
9
    
$
-
    
$
9
  
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)
  
September 30, 2013
  
   
   
   
   
   
 
Commercial
  
   
   
   
   
   
 
Income producing - real estate
  
$
136
    
$
297
    
$
4,495
    
$
4,928
    
$
235,617
    
$
240,545
  
Land, land development and construction - real estate
    
44
      
-
      
296
      
340
      
45,597
      
45,937
  
Commercial and industrial
    
1,700
      
369
      
261
      
2,330
      
338,190
      
340,520
  
Mortgage
                                                
1-4 family
    
2,519
      
910
      
7,520
      
10,949
      
268,098
      
279,047
  
Resort lending
    
646
      
-
      
3,039
      
3,685
      
148,609
      
152,294
  
Home equity line of credit - 1st lien
    
50
      
28
      
378
      
456
      
18,440
      
18,896
  
Home equity line of credit - 2nd lien
    
253
      
257
      
609
      
1,119
      
42,466
      
43,585
  
Installment
                                                
Home equity installment - 1st lien
    
625
      
417
      
1,181
      
2,223
      
26,341
      
28,564
  
Home equity installment - 2nd lien
    
393
      
180
      
479
      
1,052
      
37,188
      
38,240
  
Loans not secured by real estate
    
919
      
188
      
448
      
1,555
      
124,225
      
125,780
  
Other
    
18