Incorporated in Iowa
|
I.R.S. Employer Identification
|
|
No. 42-1208067
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Large accelerated filer o
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Accelerated Filer þ
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Non-accelerated filer o
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Small Reporting Company o
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SHARES OUTSTANDING
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|
CLASS
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At October 31, 2012
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Common Stock, no par value
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4,742,954
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Page
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Number
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||
Item 1.
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Financial Statements
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3
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4
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5
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6
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7
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||
9
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||
Item 2.
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34
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Item 3.
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51
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Item 4.
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51
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Part II
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||
OTHER INFORMATION
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||
Item 1.
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52
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Item 1A.
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52
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Item 2.
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52
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Item 3.
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52
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Item 4.
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52
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Item 5.
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52
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Item 6.
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53
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54
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55
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ASSETS
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September 30, 2012
(Unaudited)
|
December 31, 2011
|
||||||
Cash and cash equivalents
|
$ | 79,851 | $ | 29,291 | ||||
Investment securities available for sale at fair value (amortized cost September 30, 2012 $212,601; December 31, 2011 $203,312)
|
219,774 | 211,367 | ||||||
Stock of Federal Home Loan Bank
|
8,960 | 10,728 | ||||||
Loans held for sale
|
16,003 | 24,615 | ||||||
Loans, net of allowance for loan losses (September 30, 2012 $26,170; December 31, 2011 $30,150)
|
1,663,195 | 1,661,916 | ||||||
Property and equipment, net
|
30,928 | 30,321 | ||||||
Tax credit real estate
|
19,193 | 20,130 | ||||||
Accrued interest receivable
|
9,114 | 8,689 | ||||||
Deferred income taxes, net
|
7,339 | 8,531 | ||||||
Other real estate
|
1,121 | 1,327 | ||||||
Goodwill
|
2,500 | 2,500 | ||||||
Prepaid FDIC insurance
|
3,185 | 3,879 | ||||||
Other assets
|
5,868 | 5,003 | ||||||
$ | 2,067,031 | $ | 2,018,297 | |||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
Liabilities
|
||||||||
Noninterest-bearing deposits
|
$ | 234,785 | $ | 223,378 | ||||
Interest-bearing deposits
|
1,372,366 | 1,302,099 | ||||||
Total deposits
|
$ | 1,607,151 | $ | 1,525,477 | ||||
Short-term borrowings
|
45,076 | 52,785 | ||||||
Federal Home Loan Bank borrowings
|
145,000 | 185,000 | ||||||
Accrued interest payable
|
1,437 | 1,625 | ||||||
Other liabilities
|
17,424 | 17,155 | ||||||
$ | 1,816,088 | $ | 1,782,042 | |||||
Redeemable Common Stock Held by Employee Stock Ownership Plan (ESOP)
|
$ | 29,598 | $ | 27,826 | ||||
STOCKHOLDERS' EQUITY
|
||||||||
Capital stock, no par value; authorized 10,000,000 shares; issued September 30, 2012 5,059,980 shares; December 31, 2011 5,051,901 shares
|
$ | - | $ | - | ||||
Paid in capital
|
41,965 | 41,467 | ||||||
Retained earnings
|
224,264 | 207,790 | ||||||
Accumulated other comprehensive income
|
4,429 | 4,974 | ||||||
Unearned ESOP shares
|
(2,017 | ) | (2,017 | ) | ||||
Treasury stock at cost (September 30, 2012 318,073 shares; December 31, 2011 292,083 shares)
|
(17,698 | ) | (15,959 | ) | ||||
$ | 250,943 | $ | 236,255 | |||||
Less maximum cash obligation related to ESOP shares
|
29,598 | 27,826 | ||||||
$ | 221,345 | $ | 208,429 | |||||
$ | 2,067,031 | $ | 2,018,297 |
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Interest income:
|
||||||||||||||||
Loans, including fees
|
$ | 20,907 | $ | 21,977 | $ | 63,291 | $ | 65,084 | ||||||||
Investment securities:
|
||||||||||||||||
Taxable
|
460 | 692 | 1,535 | 2,182 | ||||||||||||
Nontaxable
|
857 | 863 | 2,544 | 2,588 | ||||||||||||
Federal funds sold
|
32 | 1 | 90 | 66 | ||||||||||||
Total interest income
|
$ | 22,256 | $ | 23,533 | $ | 67,460 | $ | 69,920 | ||||||||
Interest expense:
|
||||||||||||||||
Deposits
|
$ | 3,396 | $ | 3,838 | $ | 10,493 | $ | 12,292 | ||||||||
Short-term borrowings
|
61 | 109 | 156 | 305 | ||||||||||||
FHLB borrowings
|
1,983 | 2,012 | 5,963 | 5,983 | ||||||||||||
Total interest expense
|
$ | 5,440 | $ | 5,959 | $ | 16,612 | $ | 18,580 | ||||||||
Net interest income
|
$ | 16,816 | $ | 17,574 | $ | 50,848 | $ | 51,340 | ||||||||
Provision for loan losses
|
(608 | ) | 1,561 | (2,900 | ) | 2,760 | ||||||||||
Net interest income after provision for loan losses
|
$ | 17,424 | $ | 16,013 | $ | 53,748 | $ | 48,580 | ||||||||
Other income:
|
||||||||||||||||
Net gain on sale of loans
|
$ | 1,023 | $ | 546 | $ | 2,589 | $ | 1,199 | ||||||||
Trust fees
|
1,160 | 1,114 | 3,450 | 3,309 | ||||||||||||
Service charges and fees
|
1,970 | 1,937 | 5,802 | 5,669 | ||||||||||||
Rental revenue on tax credit real estate
|
397 | 397 | 1,189 | 1,075 | ||||||||||||
Net gain on sale of other real estate owned and other repossessed assets
|
163 | 119 | 604 | 504 | ||||||||||||
Other noninterest income
|
608 | 580 | 1,880 | 1,985 | ||||||||||||
$ | 5,321 | $ | 4,693 | $ | 15,514 | $ | 13,741 | |||||||||
Other expenses:
|
||||||||||||||||
Salaries and employee benefits
|
$ | 5,782 | $ | 5,532 | $ | 17,725 | $ | 16,616 | ||||||||
Occupancy
|
773 | 809 | 2,469 | 2,464 | ||||||||||||
Furniture and equipment
|
1,183 | 957 | 3,477 | 2,739 | ||||||||||||
Office supplies and postage
|
427 | 308 | 1,145 | 962 | ||||||||||||
Advertising and business development
|
608 | 402 | 1,705 | 1,178 | ||||||||||||
Outside services
|
1,689 | 1,829 | 5,026 | 5,052 | ||||||||||||
Rental expenses on tax credit real estate
|
560 | 648 | 1,774 | 1,530 | ||||||||||||
FDIC insurance assessment
|
259 | 267 | 784 | 1,053 | ||||||||||||
Loss on extinguishment of debt - Federal Home Loan Bank borrowings
|
3,544 | - | 3,544 | - | ||||||||||||
Other noninterest expense
|
447 | 392 | 1,382 | 1,130 | ||||||||||||
$ | 15,272 | $ | 11,144 | $ | 39,031 | $ | 32,724 | |||||||||
Income before income taxes
|
$ | 7,473 | $ | 9,562 | $ | 30,231 | $ | 29,597 | ||||||||
Income taxes
|
1,971 | 2,753 | 8,759 | 8,657 | ||||||||||||
Net income
|
$ | 5,502 | $ | 6,809 | $ | 21,472 | $ | 20,940 | ||||||||
Earnings per share:
|
||||||||||||||||
Basic
|
$ | 1.16 | $ | 1.55 | $ | 4.52 | $ | 4.77 | ||||||||
Diluted
|
$ | 1.16 | $ | 1.55 | $ | 4.51 | $ | 4.76 |
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Net income
|
$ | 5,502 | $ | 6,809 | $ | 21,472 | $ | 20,940 | ||||||||
Other comprehensive income (loss), before tax:
|
||||||||||||||||
Unrealized holding gains (losses) arising during the period
|
152 | 1,589 | (876 | ) | 3,612 | |||||||||||
Less: reclassification adjustments for gains included in net income
|
- | (29 | ) | (6 | ) | (29 | ) | |||||||||
Other comprehensive income (loss), before tax:
|
$ | 152 | $ | 1,560 | $ | (882 | ) | $ | 3,583 | |||||||
Tax (expense) benefit related to other comprehensive income
|
(58 | ) | (597 | ) | 337 | (1,371 | ) | |||||||||
Other comprehensive income (loss), net of tax
|
$ | 94 | $ | 963 | $ | (545 | ) | $ | 2,212 | |||||||
Comprehensive income
|
$ | 5,596 | $ | 7,772 | $ | 20,927 | $ | 23,152 |
Paid In Capital
|
Retained Earnings
|
Accumulated Other
Comprehensive
Income (Loss)
|
Unearned ESOP
Shares
|
Treasury Stock
|
Maximum Cash
Obligation Related
To ESOP Shares
|
Total
|
||||||||||||||||||||||
Balance, December 31, 2010
|
$ | 14,875 | $ | 185,412 | $ | 2,781 | $ | - | $ | (11,854 | ) | $ | (24,945 | ) | $ | 166,269 | ||||||||||||
Issuance of 176,639 shares of common stock
|
11,012 | - | - | - | - | - | 11,012 | |||||||||||||||||||||
Forfeiture of 905 shares of common stock
|
(48 | ) | - | - | - | - | - | (48 | ) | |||||||||||||||||||
Share-based compensation
|
12 | - | - | - | - | - | 12 | |||||||||||||||||||||
Income tax benefit related to share-based compensation
|
49 | - | - | - | - | - | 49 | |||||||||||||||||||||
Change related to ESOP shares
|
- | - | - | - | - | (1,802 | ) | (1,802 | ) | |||||||||||||||||||
Net income
|
- | 20,940 | - | - | - | - | 20,940 | |||||||||||||||||||||
Cash dividends ($1.00 per share)
|
- | (4,399 | ) | - | - | - | - | (4,399 | ) | |||||||||||||||||||
Purchase of 61,182 shares of common stock
|
- | - | - | - | (3,805 | ) | - | (3,805 | ) | |||||||||||||||||||
Other comprehensive income
|
- | - | 2,212 | - | - | - | 2,212 | |||||||||||||||||||||
Balance, September 30, 2011
|
$ | 25,900 | $ | 201,953 | $ | 4,993 | $ | - | $ | (15,659 | ) | $ | (26,747 | ) | $ | 190,440 | ||||||||||||
Balance, December 31, 2011
|
$ | 41,467 | $ | 207,790 | $ | 4,974 | $ | (2,017 | ) | $ | (15,959 | ) | $ | (27,826 | ) | $ | 208,429 | |||||||||||
Issuance of 8,797 shares of common stock
|
488 | - | - | - | - | - | 488 | |||||||||||||||||||||
Forfeiture of 718 shares of common stock
|
(41 | ) | - | - | - | - | - | (41 | ) | |||||||||||||||||||
Share-based compensation
|
13 | - | - | - | - | - | 13 | |||||||||||||||||||||
Income tax benefit related to share-based compensation
|
38 | - | - | - | - | - | 38 | |||||||||||||||||||||
Change related to ESOP shares
|
- | - | - | - | - | (1,772 | ) | (1,772 | ) | |||||||||||||||||||
Net income
|
- | 21,472 | - | - | - | - | 21,472 | |||||||||||||||||||||
Cash dividends ($1.05 per share)
|
- | (4,998 | ) | - | - | - | - | (4,998 | ) | |||||||||||||||||||
Purchase of 25,990 shares of common stock
|
- | - | - | - | (1,739 | ) | - | (1,739 | ) | |||||||||||||||||||
Other comprehensive loss
|
- | - | (545 | ) | - | - | - | (545 | ) | |||||||||||||||||||
Balance, September 30, 2012
|
$ | 41,965 | $ | 224,264 | $ | 4,429 | $ | (2,017 | ) | $ | (17,698 | ) | $ | (29,598 | ) | $ | 221,345 |
Nine Months Ended September 30,
|
||||||||
2012
|
2011
|
|||||||
Cash Flows from Operating Activities
|
||||||||
Net income
|
$ | 21,472 | $ | 20,940 | ||||
Adjustments to reconcile net income to net cash and cash equivalents provided by operating activities:
|
||||||||
Depreciation
|
2,149 | 1,862 | ||||||
Provision for loan losses
|
(2,900 | ) | 2,760 | |||||
Net gain on sale of investment securities
|
(6 | ) | (29 | ) | ||||
Share-based compensation
|
13 | 12 | ||||||
Forfeiture of common stock
|
(41 | ) | (48 | ) | ||||
Compensation expensed through issuance of common stock
|
400 | 364 | ||||||
Excess tax benefits from share-based compensation
|
(38 | ) | (49 | ) | ||||
Provision for deferred income taxes
|
1,529 | (338 | ) | |||||
Net gain on sale of other real estate owned and other repossessed assets
|
(604 | ) | (504 | ) | ||||
Increase in accrued interest receivable
|
(425 | ) | (700 | ) | ||||
Amortization of discount on investment securities, net
|
747 | 723 | ||||||
Decrease in prepaid FDIC insurance
|
694 | 957 | ||||||
Increase in other assets
|
(827 | ) | (1,206 | ) | ||||
Increase in accrued interest payable and other liabilities
|
81 | 6,193 | ||||||
Loans originated for sale
|
(235,155 | ) | (109,364 | ) | ||||
Proceeds on sales of loans
|
246,356 | 98,458 | ||||||
Net gain on sales of loans
|
(2,589 | ) | (1,199 | ) | ||||
Net cash and cash equivalents provided by operating activities
|
$ | 30,856 | $ | 18,832 | ||||
Cash Flows from Investing Activities
|
||||||||
Proceeds from maturities of investment securities available for sale
|
$ | 43,126 | $ | 36,124 | ||||
Proceeds from sales of investment securities available for sale
|
246 | 529 | ||||||
Purchases of investment securities available for sale
|
(51,634 | ) | (45,505 | ) | ||||
Loans made to customers, net of collections
|
(45 | ) | (80,975 | ) | ||||
Proceeds on sale of other real estate owned and other repossessed assets
|
2,476 | 2,731 | ||||||
Purchases of property and equipment
|
(2,756 | ) | (3,288 | ) | ||||
Investment in tax credit real estate, net
|
937 | 966 | ||||||
Net cash and cash equivalents used in investing activities
|
$ | (7,650 | ) | $ | (89,418 | ) | ||
Cash Flows from Financing Activities
|
||||||||
Net increase in deposits
|
$ | 81,674 | $ | 44,549 | ||||
Net decrease in short-term borrowings
|
(7,709 | ) | (1,618 | ) | ||||
Issuance of common stock
|
- | 10,569 | ||||||
Stock options exercised
|
88 | 79 | ||||||
Excess tax benefits related to share-based compensation
|
38 | 49 | ||||||
Payments on FHLB borrowings
|
(40,000 | ) | (10,000 | ) | ||||
Purchase of treasury stock
|
(1,739 | ) | (3,805 | ) | ||||
Dividends paid
|
(4,998 | ) | (4,399 | ) | ||||
Net cash and cash equivalents provided by financing activities
|
$ | 27,354 | $ | 35,424 | ||||
(Continued)
|
Nine Months Ended September 30,
|
||||||||
2012
|
2011
|
|||||||
Increase (decrease) in cash and cash equivalents
|
$ | 50,560 | $ | (35,162 | ) | |||
Cash and cash equivalents:
|
||||||||
Beginning of year
|
29,291 | 62,978 | ||||||
End of period
|
$ | 79,851 | $ | 27,816 | ||||
Supplemental Disclosures
|
||||||||
Cash payments for:
|
||||||||
Interest paid to depositors
|
$ | 10,681 | $ | 12,671 | ||||
Interest paid on other obligations
|
6,119 | 6,288 | ||||||
Income taxes paid
|
8,208 | 8,234 | ||||||
Noncash activities:
|
||||||||
Increase in maximum cash obligation related to ESOP shares
|
$ | 1,772 | $ | 1,802 | ||||
Transfers to other real estate owned
|
1,666 | 1,972 |
Note 1.
|
Summary of Significant Accounting Policies
|
Note 1.
|
Summary of Significant Accounting Policies (continued)
|
Note 2.
|
Earnings Per Share
|
Three months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Common shares outstanding at the beginning of the period
|
4,746,393 | 4,358,392 | 4,759,818 | 4,398,337 | ||||||||||||
Weighted average number of net shares (redeemed) issued
|
(4,818 | ) | 23,248 | (9,203 | ) | (11,985 | ) | |||||||||
Weighted average shares outstanding (basic)
|
4,741,575 | 4,381,640 | 4,750,615 | 4,386,352 | ||||||||||||
Weighted average of potential dilutive shares attributable to stock options granted, computed under the treasury stock method
|
6,777 | 10,705 | 6,954 | 10,773 | ||||||||||||
Weighted average number of shares (diluted)
|
4,748,352 | 4,392,345 | 4,757,569 | 4,397,125 | ||||||||||||
Net income (In thousands)
|
$ | 5,502 | $ | 6,809 | $ | 21,472 | $ | 20,940 | ||||||||
Earnings per share:
|
||||||||||||||||
Basic
|
$ | 1.16 | $ | 1.55 | $ | 4.52 | $ | 4.77 | ||||||||
Diluted
|
$ | 1.16 | $ | 1.55 | $ | 4.51 | $ | 4.76 |
Note 3.
|
Other Comprehensive Income
|
Three Months Ended September 30, 2012
|
Nine Months Ended September 30, 2012
|
|||||||||||||||
Unrealized Gains
on Securities
|
Accumulated Other
Comprehensive
Income
|
Unrealized Gains on
Securities
|
Accumulated Other
Comprehensive
Income
|
|||||||||||||
Balance at the beginning of the period
|
$ | 4,335 | $ | 4,335 | $ | 4,974 | $ | 4,974 | ||||||||
Current period, other comprehensive income (loss)
|
94 | 94 | (545 | ) | (545 | ) | ||||||||||
Balance September 30, 2012
|
$ | 4,429 | $ | 4,429 | $ | 4,429 | $ | 4,429 |
Three Months Ended September 30, 2011
|
Nine Months Ended September 30, 2011
|
|||||||||||||||
Unrealized Gains
on Securities
|
Accumulated Other
Comprehensive
Income
|
Unrealized Gains on
Securities
|
Accumulated Other
Comprehensive
Income
|
|||||||||||||
Balance at the beginning of the period
|
$ | 4,030 | $ | 4,030 | $ | 2,781 | $ | 2,781 | ||||||||
Current period, other comprehensive income
|
963 | 963 | 2,212 | 2,212 | ||||||||||||
Balance September 30, 2011
|
$ | 4,993 | $ | 4,993 | $ | 4,993 | $ | 4,993 |
Three Months Ended September 30, 2012
|
Nine Months Ended September 30, 2012
|
|||||||||||||||||||||||
Before Tax
Amount
|
Tax
(Expense)
Benefit
|
Net of Tax
Amount
|
Before Tax
Amount
|
Tax
(Expense)
Benefit
|
Net of Tax
Amount
|
|||||||||||||||||||
Unrealized gains on securities:
|
||||||||||||||||||||||||
Unrealized holding gains (losses) arising during period
|
$ | 152 | $ | (58 | ) | $ | 94 | $ | (876 | ) | $ | 335 | $ | (541 | ) | |||||||||
Less: reclassification adjustment for gains realized in net income
|
- | - | - | 6 | (2 | ) | 4 | |||||||||||||||||
Other comprehensive income (loss)
|
$ | 152 | $ | (58 | ) | $ | 94 | $ | (882 | ) | $ | 337 | $ | (545 | ) |
Three Months Ended September 30, 2011
|
Nine Months Ended September 30, 2011
|
|||||||||||||||||||||||
Before Tax
Amount
|
Tax
(Expense)
Benefit
|
Net of Tax
Amount
|
Before Tax
Amount
|
Tax
(Expense)
Benefit
|
Net of Tax
Amount
|
|||||||||||||||||||
Unrealized gains on securities:
|
||||||||||||||||||||||||
Unrealized holding gains (losses) arising during period
|
$ | 1,589 | $ | (608 | ) | $ | 981 | $ | 3,612 | $ | (1,382 | ) | $ | 2,230 | ||||||||||
Less: reclassification adjustment for gains realized in net income
|
29 | (11 | ) | 18 | 29 | (11 | ) | 18 | ||||||||||||||||
Other comprehensive income (loss)
|
$ | 1,560 | $ | (597 | ) | $ | 963 | $ | 3,583 | $ | (1,371 | ) | $ | 2,212 |
Note 4.
|
Securities
|
September 30, 2012
|
December 31, 2011
|
|||||||||||||||
Amount
|
Percent
|
Amount
|
Percent
|
|||||||||||||
Securities available for sale
|
||||||||||||||||
Obligations of state and political subdivisions
|
$ | 127,610 | 58.06 | % | $ | 119,431 | 56.50 | % | ||||||||
Other securities (FHLB, FHLMC and FNMA)
|
92,164 | 41.94 | 91,936 | 43.50 | ||||||||||||
Total securities available for sale
|
$ | 219,774 | 100.00 | % | $ | 211,367 | 100.00 | % |
Amortized Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
(Losses)
|
Estimated Fair
Value
|
|||||||||||||
September 30, 2012:
|
||||||||||||||||
State and political subdivisions
|
$ | 121,580 | $ | 6,099 | $ | (69 | ) | $ | 127,610 | |||||||
Other securities (FHLB, FHLMC and FNMA)
|
91,021 | 1,157 | (14 | ) | 92,164 | |||||||||||
Total
|
$ | 212,601 | $ | 7,256 | $ | (83 | ) | $ | 219,774 | |||||||
December 31, 2011:
|
||||||||||||||||
State and political subdivisions
|
$ | 112,959 | $ | 6,524 | $ | (52 | ) | $ | 119,431 | |||||||
Other securities (FHLB, FHLMC and FNMA)
|
90,353 | 1,583 | - | 91,936 | ||||||||||||
Total
|
$ | 203,312 | $ | 8,107 | $ | (52 | ) | $ | 211,367 |
Note 4.
|
Securities (continued)
|
Amortized
Cost
|
Fair Value
|
|||||||
Due in one year or less
|
$ | 23,138 | $ | 23,403 | ||||
Due after one year through five years
|
122,732 | 126,502 | ||||||
Due after five years through ten years
|
66,291 | 69,433 | ||||||
Due over ten years
|
440 | 436 | ||||||
Total
|
$ | 212,601 | $ | 219,774 |
Less than 12 months
|
12 months or more
|
Total
|
||||||||||||||||||||||||||||||||||||||||||||||
September 30, 2012
|
Unrealized
|
Unrealized
|
Unrealized
|
|||||||||||||||||||||||||||||||||||||||||||||
Description of Securities
|
# |
Fair Value
|
Loss
|
%
|
# |
Fair Value
|
Loss
|
%
|
# |
Fair Value
|
Loss
|
%
|
||||||||||||||||||||||||||||||||||||
State and political subdivisions
|
29 | $ | 5,744 | $ | (50 | ) | 0.87 | % | 2 | $ | 481 | $ | (19 | ) | 3.95 | % | 31 | $ | 6,225 | $ | (69 | ) | 1.11 | % | ||||||||||||||||||||||||
Other securities (FHLB, FHLMC and FNMA)
|
5 | 14,369 | (14 | ) | 0.10 | % | - | - | - | - | 5 | 14,369 | (14 | ) | 0.10 | % | ||||||||||||||||||||||||||||||||
Total temporarily impaired securities
|
34 | $ | 20,113 | $ | (64 | ) | 0.32 | % | 2 | $ | 481 | $ | (19 | ) | 3.95 | % | 36 | $ | 20,594 | $ | (83 | ) | 0.40 | % |
Less than 12 months
|
12 months or more
|
Total
|
||||||||||||||||||||||||||||||||||||||||||||||
December 31, 2011
|
Unrealized
|
Unrealized
|
Unrealized
|
|||||||||||||||||||||||||||||||||||||||||||||
Description of Securities
|
# |
Fair Value
|
Loss
|
%
|
# |
Fair Value
|
Loss
|
%
|
# |
Fair Value
|
Loss
|
%
|
||||||||||||||||||||||||||||||||||||
State and political subdivisions
|
2 | $ | 409 | $ | (3 | ) | 0.73 | % | 2 | $ | 453 | $ | (49 | ) | 10.82 | % | 4 | $ | 862 | $ | (52 | ) | 6.03 | % | ||||||||||||||||||||||||
Other securities (FHLB, FHLMC and FNMA)
|
- | - | - | 0.00 | % | - | - | - | - | - | - | - | 0.00 | % | ||||||||||||||||||||||||||||||||||
Total temporarily impaired securities
|
2 | $ | 409 | $ | (3 | ) | 0.73 | % | 2 | $ | 453 | $ | (49 | ) | 10.82 | % | 4 | $ | 862 | $ | (52 | ) | 6.03 | % |
Note 5.
|
Loans
|
September 30, 2012
|
December 31, 2011
|
|||||||
(Amounts In Thousands)
|
||||||||
Agricultural
|
$ | 68,769 | $ | 68,556 | ||||
Commercial and financial
|
142,888 | 143,174 | ||||||
Real estate:
|
||||||||
Construction, 1 to 4 family residential
|
27,368 | 22,308 | ||||||
Construction, land development and commercial
|
79,370 | 84,508 | ||||||
Mortgage, farmland
|
102,457 | 99,799 | ||||||
Mortgage, 1 to 4 family first liens
|
585,577 | 577,881 | ||||||
Mortgage, 1 to 4 family junior liens
|
104,258 | 104,915 | ||||||
Mortgage, multi-family
|
217,737 | 222,851 | ||||||
Mortgage, commercial
|
308,690 | 316,329 | ||||||
Loans to individuals
|
19,117 | 20,598 | ||||||
Obligations of state and political subdivisions
|
33,134 | 31,147 | ||||||
$ | 1,689,365 | $ | 1,692,066 | |||||
Less allowance for loan losses
|
26,170 | 30,150 | ||||||
$ | 1,663,195 | $ | 1,661,916 |
Note 5.
|
Loans (continued)
|
Three Months Ended September 30, 2012
|
||||||||||||||||||||||||||||||||
Agricultural
|
Commercial and
Financial
|
Real Estate:
Construction and
land development
|
Real Estate:
Mortgage,
farmland
|
Real Estate:
Mortgage, 1 to 4
family
|
Real Estate:
Mortgage, multi-
family and
commercial
|
Other
|
Total
|
|||||||||||||||||||||||||
(Amounts In Thousands)
|
||||||||||||||||||||||||||||||||
Allowance for loan losses:
|
||||||||||||||||||||||||||||||||
Beginning balance
|
$ | 1,607 | $ | 5,203 | $ | 4,104 | $ | 1,687 | $ | 8,271 | $ | 5,171 | $ | 627 | $ | 26,670 | ||||||||||||||||
Charge-offs
|
- | (162 | ) | (88 | ) | - | (378 | ) | (3 | ) | (46 | ) | (677 | ) | ||||||||||||||||||
Recoveries
|
10 | 461 | 8 | - | 155 | 99 | 52 | 785 | ||||||||||||||||||||||||
Provision
|
287 | (818 | ) | 8 | (36 | ) | 89 | (186 | ) | 48 | (608 | ) | ||||||||||||||||||||
Ending balance
|
$ | 1,904 | $ | 4,684 | $ | 4,032 | $ | 1,651 | $ | 8,137 | $ | 5,081 | $ | 681 | $ | 26,170 |
Nine Months Ended September 30, 2012
|
||||||||||||||||||||||||||||||||
Agricultural
|
Commercial and
Financial
|
Real Estate:
Construction and
land development
|
Real Estate:
Mortgage,
farmland
|
Real Estate:
Mortgage, 1 to 4
family
|
Real Estate:
Mortgage, multi-
family and
commercial
|
Other
|
Total
|
|||||||||||||||||||||||||
(Amounts In Thousands)
|
||||||||||||||||||||||||||||||||
Allowance for loan losses:
|
||||||||||||||||||||||||||||||||
Beginning balance
|
$ | 1,354 | $ | 6,429 | $ | 4,994 | $ | 1,411 | $ | 9,051 | $ | 6,150 | $ | 761 | $ | 30,150 | ||||||||||||||||
Charge-offs
|
- | (991 | ) | (689 | ) | - | (1,113 | ) | (214 | ) | (136 | ) | (3,143 | ) | ||||||||||||||||||
Recoveries
|
43 | 1,156 | 15 | - | 409 | 225 | 215 | 2,063 | ||||||||||||||||||||||||
Provision
|
507 | (1,910 | ) | (288 | ) | 240 | (210 | ) | (1,080 | ) | (159 | ) | (2,900 | ) | ||||||||||||||||||
Ending balance
|
$ | 1,904 | $ | 4,684 | $ | 4,032 | $ | 1,651 | $ | 8,137 | $ | 5,081 | $ | 681 | $ | 26,170 | ||||||||||||||||
Ending balance, individually evaluated for impairment
|
$ | 3 | $ | 24 | $ | 41 | $ | - | $ | 66 | $ | 82 | $ | - | $ | 216 | ||||||||||||||||
Ending balance, collectively evaluated for impairment
|
$ | 1,901 | $ | 4,660 | $ | 3,991 | $ | 1,651 | $ | 8,071 | $ | 4,999 | $ | 681 | $ | 25,954 | ||||||||||||||||
Loans:
|
||||||||||||||||||||||||||||||||
Ending balance
|
$ | 68,769 | $ | 142,888 | $ | 106,738 | $ | 102,457 | $ | 689,835 | $ | 526,427 | $ | 52,251 | $ | 1,689,365 | ||||||||||||||||
Ending balance, individually evaluated for impairment
|
$ | 14 | $ | 3,012 | $ | 2,136 | $ | 810 | $ | 3,122 | $ | 19,921 | $ | - | $ | 29,015 | ||||||||||||||||
Ending balance, collectively evaluated for impairment
|
$ | 68,755 | $ | 139,876 | $ | 104,602 | $ | 101,647 | $ | 686,713 | $ | 506,506 | $ | 52,251 | $ | 1,660,350 |
Note 5.
|
Loans (continued)
|
Three Months Ended September 30, 2011
|
||||||||||||||||||||||||||||||||
Agricultural
|
Commercial and
Financial
|
Real Estate:
Construction and
land development
|
Real Estate:
Mortgage,
farmland
|
Real Estate:
Mortgage, 1 to 4
family
|
Real Estate:
Mortgage, multi-
family and
commercial
|
Other
|
Total
|
|||||||||||||||||||||||||
(Amounts In Thousands)
|
||||||||||||||||||||||||||||||||
Allowance for loan losses:
|
||||||||||||||||||||||||||||||||
Beginning balance
|
$ | 1,403 | $ | 6,634 | $ | 4,211 | $ | 1,429 | $ | 8,882 | $ | 5,877 | $ | 824 | $ | 29,260 | ||||||||||||||||
Charge-offs
|
(81 | ) | (561 | ) | (205 | ) | - | (518 | ) | (157 | ) | (44 | ) | (1,566 | ) | |||||||||||||||||
Recoveries
|
11 | 179 | 1 | - | 129 | 32 | 42 | 394 | ||||||||||||||||||||||||
Provision
|
216 | 620 | 278 | (8 | ) | 362 | 145 | (51 | ) | 1,562 | ||||||||||||||||||||||
- | ||||||||||||||||||||||||||||||||
Ending balance
|
$ | 1,549 | $ | 6,872 | $ | 4,285 | $ | 1,421 | $ | 8,855 | $ | 5,897 | $ | 771 | $ | 29,650 |
Nine Months Ended September 30, 2011
|
||||||||||||||||||||||||||||||||
Agricultural
|
Commercial and
Financial
|
Real Estate:
Construction and
land development
|
Real Estate:
Mortgage,
farmland
|
Real Estate:
Mortgage, 1 to 4
family
|
Real Estate:
Mortgage, multi-
family and
commercial
|
Other
|
Total
|
|||||||||||||||||||||||||
(Amounts In Thousands)
|
||||||||||||||||||||||||||||||||
Allowance for loan losses:
|
||||||||||||||||||||||||||||||||
Beginning balance
|
$ | 2,170 | $ | 6,742 | $ | 4,394 | $ | 1,482 | $ | 7,952 | $ | 5,657 | $ | 833 | $ | 29,230 | ||||||||||||||||
Charge-offs
|
(81 | ) | (1,668 | ) | (238 | ) | - | (1,766 | ) | (216 | ) | (193 | ) | (4,162 | ) | |||||||||||||||||
Recoveries
|
34 | 642 | 8 | - | 726 | 252 | 160 | 1,822 | ||||||||||||||||||||||||
Provision
|
(574 | ) | 1,156 | 121 | (61 | ) | 1,943 | 204 | (29 | ) | 2,760 | |||||||||||||||||||||
Ending balance
|
$ | 1,549 | $ | 6,872 | $ | 4,285 | $ | 1,421 | $ | 8,855 | $ | 5,897 | $ | 771 | $ | 29,650 | ||||||||||||||||
Ending balance, individually evaluated for impairment
|
$ | - | $ | 99 | $ | - | $ | 20 | $ | 64 | $ | 88 | $ | 1 | $ | 272 | ||||||||||||||||
Ending balance, collectively evaluated for impairment
|
$ | 1,549 | $ | 6,773 | $ | 4,285 | $ | 1,401 | $ | 8,791 | $ | 5,809 | $ | 770 | $ | 29,378 | ||||||||||||||||
Loans:
|
||||||||||||||||||||||||||||||||
Ending balance
|
$ | 65,886 | $ | 148,686 | $ | 109,203 | $ | 94,840 | $ | 672,687 | $ | 523,823 | $ | 52,198 | $ | 1,667,323 | ||||||||||||||||
Ending balance, individually evaluated for impairment
|
$ | - | $ | 1,497 | $ | 1,452 | $ | 1,110 | $ | 4,387 | $ | 17,585 | $ | 3 | $ | 26,034 | ||||||||||||||||
Ending balance, collectively evaluated for impairment
|
$ | 65,886 | $ | 147,189 | $ | 107,751 | $ | 93,730 | $ | 668,300 | $ | 506,238 | $ | 52,195 | $ | 1,641,289 |
Note 5.
|
Loans (continued)
|
Agricultural
|
Commercial and
Financial
|
Real Estate:
Construction, 1 to 4
family residential
|
Real Estate:
Construction, land
development and
commercial
|
|||||||||||||
September 30, 2012
|
||||||||||||||||
Grade:
|
||||||||||||||||
Pass
|
$ | 60,289 | $ | 117,617 | $ | 21,691 | $ | 61,935 | ||||||||
Potential Watch
|
972 | 8,249 | 2,530 | 3,535 | ||||||||||||
Watch
|
3,431 | 8,923 | 1,749 | 5,363 | ||||||||||||
Substandard
|
4,077 | 8,099 | 1,398 | 8,537 | ||||||||||||
Total
|
$ | 68,769 | $ | 142,888 | $ | 27,368 | $ | 79,370 |
Real Estate:
Mortgage,
farmland
|
Real Estate:
Mortgage, 1 to 4
family first liens
|
Real Estate: Mortgage,
1 to 4 family junior
liens
|
Real Estate:
Mortgage, multi-
family
|
|||||||||||||
September 30, 2012
|
||||||||||||||||
Grade:
|
||||||||||||||||
Pass
|
$ | 93,617 | $ | 520,636 | $ | 94,500 | $ | 177,871 | ||||||||
Potential Watch
|
2,439 | 24,503 | 3,688 | 11,493 | ||||||||||||
Watch
|
1,816 | 19,835 | 3,580 | 20,123 | ||||||||||||
Substandard
|
4,585 | 20,603 | 2,490 | 8,250 | ||||||||||||
Total
|
$ | 102,457 | $ | 585,577 | $ | 104,258 | $ | 217,737 |
Real Estate:
Mortgage,
commercial
|
Loans to
individuals
|
Obligations of state and
political subdivisions
|
Total
|
|||||||||||||
September 30, 2012
|
||||||||||||||||
Grade:
|
||||||||||||||||
Pass
|
$ | 259,856 | $ | 18,465 | $ | 32,044 | $ | 1,458,521 | ||||||||
Potential Watch
|
12,388 | 181 | - | 69,978 | ||||||||||||
Watch
|
27,392 | 324 | 1,090 | 93,626 | ||||||||||||
Substandard
|
9,054 | 147 | - | 67,240 | ||||||||||||
Total
|
$ | 308,690 | $ | 19,117 | $ | 33,134 | $ | 1,689,365 |
Note 5.
|
Loans (continued)
|
Agricultural
|
Commercial and
Financial
|
Real Estate:
Construction, 1 to 4
family residential
|
Real Estate:
Construction, land
development and
commercial
|
|||||||||||||
December 31, 2011
|
||||||||||||||||
Grade:
|
||||||||||||||||
Pass
|
$ | 60,745 | $ | 116,234 | $ | 18,726 | $ | 60,279 | ||||||||
Potential Watch
|
1,129 | 5,858 | 878 | 5,171 | ||||||||||||
Watch
|
4,074 | 11,104 | 2,374 | 5,182 | ||||||||||||
Substandard
|
2,608 | 9,978 | 330 | 13,876 | ||||||||||||
Total
|
$ | 68,556 | $ | 143,174 | $ | 22,308 | $ | 84,508 |
Real Estate:
Mortgage,
farmland
|
Real Estate:
Mortgage, 1 to 4
family first liens
|
Real Estate: Mortgage,
1 to 4 family junior
liens
|
Real Estate:
Mortgage, multi-
family
|
|||||||||||||
December 31, 2011
|
||||||||||||||||
Grade:
|
||||||||||||||||
Pass
|
$ | 93,447 | $ | 511,212 | $ | 93,761 | $ | 181,386 | ||||||||
Potential Watch
|
1,393 | 20,532 | 3,021 | 12,561 | ||||||||||||
Watch
|
2,490 | 20,706 | 4,667 | 19,317 | ||||||||||||
Substandard
|
2,469 | 25,431 | 3,466 | 9,587 | ||||||||||||
Total
|
$ | 99,799 | $ | 577,881 | $ | 104,915 | $ | 222,851 |
Real Estate:
Mortgage,
commercial
|
Loans to
individuals
|
Obligations of state and
political subdivisions
|
Total
|
|||||||||||||
December 31, 2011
|
||||||||||||||||
Grade:
|
||||||||||||||||
Pass
|
$ | 259,516 | $ | 19,914 | $ | 31,085 | $ | 1,446,305 | ||||||||
Potential Watch
|
14,401 | 180 | - | 65,124 | ||||||||||||
Watch
|
31,928 | 290 | 62 | 102,194 | ||||||||||||
Substandard
|
10,484 | 214 | - | 78,443 | ||||||||||||
Total
|
$ | 316,329 | $ | 20,598 | $ | 31,147 | $ | 1,692,066 |
Note 5.
|
Loans (continued)
|
90 Days
|
Total
|
Accruing Loans
|
||||||||||||||||||||||||||
30 - 59 Days
|
60 - 89 Days
|
or More
|
Total Past
|
Loans
|
Past Due 90
|
|||||||||||||||||||||||
Past Due
|
Past Due
|
Past Due
|
Due
|
Current
|
Receivable
|
Days or More
|
||||||||||||||||||||||
(Amounts In Thousands)
|
||||||||||||||||||||||||||||
September 30, 2012
|
||||||||||||||||||||||||||||
Agricultural
|
$ | 215 | $ | - | $ | 13 | $ | 228 | $ | 68,541 | $ | 68,769 | $ | 13 | ||||||||||||||
Commercial and financial
|
211 | 555 | 213 | 979 | 141,909 | 142,888 | 28 | |||||||||||||||||||||
Real estate:
|
||||||||||||||||||||||||||||
Construction, 1 to 4 family residential
|
358 | - | - | 358 | 27,010 | 27,368 | - | |||||||||||||||||||||
Construction, land development and commercial
|
- | - | 419 | 419 | 78,951 | 79,370 | 332 | |||||||||||||||||||||
Mortgage, farmland
|
- | - | 512 | 512 | 101,945 | 102,457 | - | |||||||||||||||||||||
Mortgage, 1 to 4 family first liens
|
1,049 | 748 | 1,571 | 3,368 | 582,209 | 585,577 | 1,408 | |||||||||||||||||||||
Mortgage, 1 to 4 family junior liens
|
537 | - | 53 | 590 | 103,668 | 104,258 | 53 | |||||||||||||||||||||
Mortgage, multi-family
|
616 | 33 | 256 | 905 | 216,832 | 217,737 | - | |||||||||||||||||||||
Mortgage, commercial
|
473 | - | 1,542 | 2,015 | 306,675 | 308,690 | 361 | |||||||||||||||||||||
Loans to individuals
|
61 | 3 | - | 64 | 19,053 | 19,117 | - | |||||||||||||||||||||
Obligations of state and political subdivisions
|
- | - | - | - | 33,134 | 33,134 | - | |||||||||||||||||||||
$ | 3,520 | $ | 1,339 | $ | 4,579 | $ | 9,438 | $ | 1,679,927 | $ | 1,689,365 | $ | 2,195 | |||||||||||||||
December 31, 2011:
|
||||||||||||||||||||||||||||
Agricultural
|
$ | 509 | $ | - | $ | 13 | $ | 522 | $ | 68,034 | $ | 68,556 | $ | 13 | ||||||||||||||
Commercial and financial
|
558 | 187 | 849 | 1,594 | 141,580 | 143,174 | 222 | |||||||||||||||||||||
Real estate:
|
||||||||||||||||||||||||||||
Construction, 1 to 4 family residential
|
367 | - | - | 367 | 21,941 | 22,308 | - | |||||||||||||||||||||
Construction, land development and commercial
|
164 | 719 | 327 | 1,210 | 83,298 | 84,508 | 14 | |||||||||||||||||||||
Mortgage, farmland
|
752 | - | - | 752 | 99,047 | 99,799 | - | |||||||||||||||||||||
Mortgage, 1 to 4 family first liens
|
4,042 | 1,012 | 3,414 | 8,468 | 569,413 | 577,881 | 2,673 | |||||||||||||||||||||
Mortgage, 1 to 4 family junior liens
|
454 | 353 | 396 | 1,203 | 103,712 | 104,915 | 105 | |||||||||||||||||||||
Mortgage, multi-family
|
- | - | 267 | 267 | 222,584 | 222,851 | - | |||||||||||||||||||||
Mortgage, commercial
|
838 | 755 | 718 | 2,311 | 314,018 | 316,329 | 185 | |||||||||||||||||||||
Loans to individuals
|
38 | 21 | - | 59 | 20,539 | 20,598 | - | |||||||||||||||||||||
Obligations of state and political subdivisions
|
2,834 | - | - | 2,834 | 28,313 | 31,147 | - | |||||||||||||||||||||
$ | 10,556 | $ | 3,047 | $ | 5,984 | $ | 19,587 | $ | 1,672,479 | $ | 1,692,066 | $ | 3,212 |
Note 5.
|
Loans (continued)
|
September 30, 2012
|
December 31, 2011
|
|||||||
(Amounts In Thousands)
|
||||||||
Non-accrual loans
|
$ | 7,600 | $ | 7,378 | ||||
Accruing loans past due 90 days or more (1)
|
2,195 | 3,212 | ||||||
TDR loans (2)
|
19,220 | 17,889 | ||||||
Total impaired loans
|
29,015 | 28,479 | ||||||
Other real estate
|
1,121 | 1,327 | ||||||
Non-performing assets (includes impaired loans and other real estate)
|
30,136 | 29,806 | ||||||
Loans held for investment
|
1,689,365 | 1,692,066 | ||||||
Ratio of allowance for loan losses to loans held for investment
|
1.55 | % | 1.78 | % | ||||
Ratio of allowance for loan losses to impaired loans
|
90.19 | 105.87 | ||||||
Ratio of impaired loans to total loans held for investment
|
1.72 | 1.68 | ||||||
Ratio of non-performing assets to total assets
|
1.46 | 1.48 |
(1)
|
There were no TDR loans included within accruing loans past due 90 days or more as of September 30, 2012. There were $0.26 million of TDR loans included within accruing loans past due 90 days or more as of December 31, 2011.
|
(2)
|
Total TDR loans were $21.91 million and $21.40 million as of September 30, 2012 and December 31, 2011, respectively. Included in the total nonaccrual loans were $2.69 million and $3.25 million of TDR loans as of September 30, 2012 and December 31, 2011.
|
September 30, 2012
|
December 31, 2011
|
|||||||||||||||||||||||
Non-accrual
loans
|
Accruing loans
past due 90
days or more
|
TDR loans
|
Non-
accrual
loans
|
Accruing
loans past due
90 days or
more
|
TDR loans
|
|||||||||||||||||||
(Amounts In Thousands)
|
(Amounts In Thousands)
|
|||||||||||||||||||||||
Agricultural
|
$ | - | $ | 14 | $ | - | $ | - | $ | 13 | $ | - | ||||||||||||
Commercial and financial
|
1,115 | 28 | 1,869 | 1,286 | 222 | 1,109 | ||||||||||||||||||
Real estate:
|
||||||||||||||||||||||||
Construction, 1 to 4 family residential
|
- | - | - | - | - | - | ||||||||||||||||||
Construction, land development and commercial
|
1,804 | 332 | - | 648 | 14 | - | ||||||||||||||||||
Mortgage, farmland
|
512 | - | 298 | 556 | - | - | ||||||||||||||||||
Mortgage, 1 to 4 family first liens
|
700 | 1,408 | 887 | 1,141 | 2,673 | 541 | ||||||||||||||||||
Mortgage, 1 to 4 family junior liens
|
19 | 52 | 56 | 291 | 105 | 50 | ||||||||||||||||||
Mortgage, multi-family
|
2,051 | - | 5,788 | 2,168 | - | 5,870 | ||||||||||||||||||
Mortgage, commercial
|
1,399 | 361 | 10,322 | 1,288 | 185 | 10,319 | ||||||||||||||||||
Loans to individuals
|
- | - | - | - | - | - | ||||||||||||||||||
$ | 7,600 | $ | 2,195 | $ | 19,220 | $ | 7,378 | $ | 3,212 | $ | 17,889 |
Note 5.
|
Loans (continued)
|
September 30, 2012
|
December 31, 2011
|
|||||||||||||||||||||||
Number
|
Number
|
|||||||||||||||||||||||
of
|
Recorded
|
Commitments
|
of
|
Recorded
|
Commitments
|
|||||||||||||||||||
contracts
|
investment
|
outstanding
|
contracts
|
investment
|
outstanding
|
|||||||||||||||||||
(Amounts In Thousands)
|
(Amounts In Thousands)
|
|||||||||||||||||||||||
Agriculture
|
- | $ | - | $ | - | - | $ | - | $ | - | ||||||||||||||
Commercial and financial
|
11 | 1,895 | 89 | 9 | 1,802 | 108 | ||||||||||||||||||
Real estate:
|
||||||||||||||||||||||||
Construction, 1 to 4 family residential
|
- | - | - | - | - | - | ||||||||||||||||||
Construction, land development and commercial
|
2 | 308 | - | 2 | 335 | 452 | ||||||||||||||||||
Mortgage, farmland
|
1 | 298 | - | - | - | - | ||||||||||||||||||
Mortgage, 1 to 4 family first liens
|
8 | 1,146 | - | 7 | 801 | - | ||||||||||||||||||
Mortgage, 1 to 4 family junior liens
|
2 | 56 | 1 | 1 | 50 | - | ||||||||||||||||||
Mortgage, multi-family
|
5 | 7,427 | - | 4 | 7,597 | - | ||||||||||||||||||
Mortgage, commercial
|
7 | 10,775 | - | 6 | 10,814 | - | ||||||||||||||||||
Loans to individuals
|
- | - | - | - | - | - | ||||||||||||||||||
36 | $ | 21,905 | $ | 90 | 29 | $ | 21,399 | $ | 560 |
Three Months Ended September 30, 2012
|
Nine Months Ended September 30, 2012
|
|||||||||||||||||||||||
Number
|
Pre-modification
|
Post-modification
|
Number
|
Pre-modification
|
Post-modification
|
|||||||||||||||||||
of
|
recorded
|
recorded
|
of
|
recorded
|
recorded
|
|||||||||||||||||||
contracts
|
investment
|
investment
|
contracts
|
investment
|
investment
|
|||||||||||||||||||
(Amounts In Thousands)
|
(Amounts In Thousands)
|
|||||||||||||||||||||||
Commercial and financial
|
- | $ | - | $ | - | 4 | $ | 968 | $ | 968 | ||||||||||||||
Real estate:
|
||||||||||||||||||||||||
Mortgage, farmland
|
- | - | - | 1 | 297 | 297 | ||||||||||||||||||
Mortgage, 1 to 4 family first lien
|
1 | 271 | 271 | 1 | 271 | 271 | ||||||||||||||||||
Mortgage, 1 to 4 family junior liens
|
- | - | - | 1 | 69 | 54 | ||||||||||||||||||
Mortgage, multi-family
|
- | - | - | 1 | 12 | 12 | ||||||||||||||||||
Mortgage, commercial
|
- | - | - | 3 | 885 | 735 | ||||||||||||||||||
1 | $ | 271 | $ | 271 | 11 | $ | 2,502 | $ | 2,337 |
Note 5.
|
Loans (continued)
|
September 30, 2012
|
Three Months Ended September 30, 2012
|
Nine Months Ended September 30, 2012
|
||||||||||||||||||||||||||
Recorded
Investment
|
Unpaid
Principal
Balance
|
Related
Allowance
|
Average Recorded
Investment
|
Interest Income
Recognized
|
Average Recorded
Investment
|
Interest Income
Recognized
|
||||||||||||||||||||||
With no related allowance recorded:
|
(Amounts In Thousands)
|
|||||||||||||||||||||||||||
Agricultural
|
$ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||
Commercial and financial
|
1,223 | 2,827 | - | 1,514 | 1 | 1,459 | 3 | |||||||||||||||||||||
Real estate:
|
||||||||||||||||||||||||||||
Construction, 1 to 4 family residential
|
- | - | - | - | - | - | - | |||||||||||||||||||||
Construction, land development and commercial
|
1,804 | 2,582 | - | 1,869 | - | 2,252 | - | |||||||||||||||||||||
Mortgage, farmland
|
810 | 811 | - | 810 | 5 | 832 | 14 | |||||||||||||||||||||
Mortgage, 1 to 4 family first liens
|
1,078 | 1,455 | - | 1,081 | 9 | 1,093 | 28 | |||||||||||||||||||||
Mortgage, 1 to 4 family junior liens
|
70 | 363 | - | 72 | 1 | 72 | 3 | |||||||||||||||||||||
Mortgage, multi-family
|
2,063 | 2,773 | - | 2,079 | - | 2,115 | - | |||||||||||||||||||||
Mortgage, commercial
|
2,313 | 4,911 | - | 2,579 | 12 | 2,692 | 37 | |||||||||||||||||||||
Loans to individuals
|
- | 20 | - | - | - | - | - | |||||||||||||||||||||
9,361 | 15,742 | - | 10,004 | 28 | 10,515 | 85 | ||||||||||||||||||||||
With an allowance recorded:
|
||||||||||||||||||||||||||||
Agricultural
|
$ | 14 | $ | 14 | $ | 3 | $ | 14 | $ | - | $ | 8 | $ | - | ||||||||||||||
Commercial and financial
|
1,789 | 1,789 | 24 | 1,804 | 24 | 1,907 | 75 | |||||||||||||||||||||
Real estate:
|
||||||||||||||||||||||||||||
Construction, 1 to 4 family residential
|
- | - | - | - | - | - | - | |||||||||||||||||||||
Construction, land development and commercial
|
332 | 332 | 41 | 333 | 5 | 327 | 14 | |||||||||||||||||||||
Mortgage, farmland
|
- | - | - | - | - | - | - | |||||||||||||||||||||
Mortgage, 1 to 4 family first liens
|
1,917 | 2,120 | 65 | 2,002 | 24 | 1,957 | 69 | |||||||||||||||||||||
Mortgage, 1 to 4 family junior liens
|
57 | 57 | 1 | 62 | 1 | 80 | 3 | |||||||||||||||||||||
Mortgage, multi-family
|
5,776 | 5,776 | 50 | 5,789 | 77 | 5,823 | 230 | |||||||||||||||||||||
Mortgage, commercial
|
9,769 | 9,769 | 32 | 9,794 | 145 | 9,845 | 435 | |||||||||||||||||||||
Loans to individuals
|
- | - | - | - | - | - | - | |||||||||||||||||||||
19,654 | 19,857 | 216 | 19,798 | 276 | 19,947 | 826 | ||||||||||||||||||||||
Total:
|
||||||||||||||||||||||||||||
Agricultural
|
$ | 14 | $ | 14 | $ | 3 | $ | 14 | $ | - | $ | 8 | $ | - | ||||||||||||||
Commercial and financial
|
3,012 | 4,616 | 24 | 3,318 | 25 | 3,366 | 78 | |||||||||||||||||||||
Real estate:
|
||||||||||||||||||||||||||||
Construction, 1 to 4 family residential
|
- | - | - | - | - | - | - | |||||||||||||||||||||
Construction, land development and commercial
|
2,136 | 2,914 | 41 | 2,202 | 5 | 2,579 | 14 | |||||||||||||||||||||
Mortgage, farmland
|
810 | 811 | - | 810 | 5 | 832 | 14 | |||||||||||||||||||||
Mortgage, 1 to 4 family first liens
|
2,995 | 3,575 | 65 | 3,083 | 33 | 3,050 | 97 | |||||||||||||||||||||
Mortgage, 1 to 4 family junior liens
|
127 | 420 | 1 | 134 | 2 | 152 | 6 | |||||||||||||||||||||
Mortgage, multi-family
|
7,839 | 8,549 | 50 | 7,868 | 77 | 7,938 | 230 | |||||||||||||||||||||
Mortgage, commercial
|
12,082 | 14,680 | 32 | 12,373 | 157 | 12,537 | 472 | |||||||||||||||||||||
Loans to individuals
|
- | 20 | - | - | - | - | - | |||||||||||||||||||||
29,015 | 35,599 | 216 | 29,802 | 304 | 30,462 | 911 |
Note 5.
|
Loans (continued)
|
Recorded
Investment
|
Unpaid Principal
Balance
|
Related
Allowance
|
||||||||||
With no related allowance recorded:
|
(Amounts In Thousands)
|
|||||||||||
Agricultural
|
$ | - | $ | - | $ | - | ||||||
Commercial and financial
|
793 | 1,679 | - | |||||||||
Real estate:
|
||||||||||||
Construction, 1 to 4 family residential
|
- | - | - | |||||||||
Construction, land development and commercial
|
648 | 765 | - | |||||||||
Mortgage, farmland
|
556 | 556 | - | |||||||||
Mortgage, 1 to 4 family first liens
|
1,512 | 1,905 | - | |||||||||
Mortgage, 1 to 4 family junior liens
|
291 | 568 | - | |||||||||
Mortgage, multi-family
|
5,148 | 5,757 | - | |||||||||
Mortgage, commercial
|
1,986 | 4,305 | - | |||||||||
Loans to individuals
|
- | 21 | - | |||||||||
$ | 10,934 | $ | 15,556 | $ | - | |||||||
With an allowance recorded:
|
||||||||||||
Agricultural
|
$ | 13 | $ | 13 | $ | 1 | ||||||
Commercial and financial
|
1,824 | 2,954 | 97 | |||||||||
Real estate:
|
||||||||||||
Construction, 1 to 4 family residential
|
- | - | - | |||||||||
Construction, land development and commercial
|
14 | 27 | 3 | |||||||||
Mortgage, farmland
|
- | - | - | |||||||||
Mortgage, 1 to 4 family first liens
|
2,843 | 3,187 | 88 | |||||||||
Mortgage, 1 to 4 family junior liens
|
155 | 155 | 5 | |||||||||
Mortgage, multi-family
|
2,890 | 2,890 | 29 | |||||||||
Mortgage, commercial
|
9,806 | 9,806 | 36 | |||||||||
Loans to individuals
|
- | - | - | |||||||||
$ | 17,545 | $ | 19,032 | $ | 259 | |||||||
Total:
|
||||||||||||
Agricultural
|
$ | 13 | $ | 13 | $ | 1 | ||||||
Commercial and financial
|
2,617 | 4,633 | 97 | |||||||||
Real estate:
|
||||||||||||
Construction, 1 to 4 family residential
|
- | - | - | |||||||||
Construction, land development and commercial
|
662 | 792 | 3 | |||||||||
Mortgage, farmland
|
556 | 556 | - | |||||||||
Mortgage, 1 to 4 family first liens
|
4,355 | 5,092 | 88 | |||||||||
Mortgage, 1 to 4 family junior liens
|
446 | 723 | 5 | |||||||||
Mortgage, multi-family
|
8,038 | 8,647 | 29 | |||||||||
Mortgage, commercial
|
11,792 | 14,111 | 36 | |||||||||
Loans to individuals
|
- | 21 | - | |||||||||
$ | 28,479 | $ | 34,588 | $ | 259 |
Note 5.
|
Loans (continued)
|
Note 6.
|
Fair Value Measurements
|
September 30, 2012
|
||||||||||||||||||||
Carrying
Amount
|
Estimated Fair
Value
|
Readily
Available
Market
Prices(1)
|
Observable
Market
Prices(2)
|
Company
Determined
Market
Prices(3)
|
||||||||||||||||
(Amounts In Thousands)
|
||||||||||||||||||||
Financial instrument assets:
|
||||||||||||||||||||
Cash and cash equivalents
|
$ | 79,851 | $ | 79,851 | $ | 79,851 | $ | - | $ | - | ||||||||||
Investment securities
|
228,734 | 228,734 | - | 228,734 | - | |||||||||||||||
Loans held for sale
|
16,003 | 16,003 | 16,003 | |||||||||||||||||
Loans
|
||||||||||||||||||||
Agricultural
|
66,865 | 67,922 | - | - | 67,922 | |||||||||||||||
Commercial and financial
|
138,204 | 139,641 | - | - | 139,641 | |||||||||||||||
Real estate:
|
||||||||||||||||||||
Construction, 1 to 4 family residential
|
26,389 | 26,689 | - | - | 26,689 | |||||||||||||||
Construction, land development and commercial
|
76,317 | 76,964 | - | - | 76,964 | |||||||||||||||
Mortgage, farmland
|
100,806 | 104,042 | - | - | 104,042 | |||||||||||||||
Mortgage, 1 to 4 family first liens
|
579,088 | 600,674 | - | - | 600,674 | |||||||||||||||
Mortgage, 1 to 4 family junior liens
|
102,610 | 105,937 | - | - | 105,937 | |||||||||||||||
Mortgage, multi-family
|
216,083 | 224,905 | - | - | 224,905 | |||||||||||||||
Mortgage, commercial
|
305,263 | 316,636 | - | - | 316,636 | |||||||||||||||
Loans to individuals
|
18,788 | 18,991 | - | - | 18,991 | |||||||||||||||
Obligations of state and political subdivisions
|
32,782 | 32,824 | - | - | 32,824 | |||||||||||||||
Accrued interest receivable
|
9,114 | 9,114 | - | 9,114 | - | |||||||||||||||
Total financial instrument assets
|
$ | 1,996,897 | $ | 2,048,928 | $ | 79,851 | $ | 253,851 | $ | 1,715,226 | ||||||||||
Financial instrument liabilities:
|
||||||||||||||||||||
Deposits
|
||||||||||||||||||||
Noninterest-bearing deposits
|
$ | 234,785 | $ | 234,783 | $ | - | $ | 234,783 | $ | - | ||||||||||
Interest-bearing deposits
|
1,372,366 | 1,384,715 | - | 1,384,715 | - | |||||||||||||||
Short-term borrowings
|
45,076 | 45,076 | - | 45,076 | - | |||||||||||||||
Federal Home Loan Bank borrowings
|
145,000 | 164,546 | - | 164,546 | - | |||||||||||||||
Accrued interest payable
|
1,437 | 1,437 | - | 1,437 | - | |||||||||||||||
Total financial instrument liabilities
|
$ | 1,798,664 | $ | 1,830,557 | $ | - | $ | 1,830,557 | $ | - | ||||||||||
Face Amount
|
||||||||||||||||||||
Financial instrument with off-balance sheet risk:
|
||||||||||||||||||||
Loan commitments
|
$ | 342,943 | $ | - | $ | - | $ | - | $ | - | ||||||||||
Letters of credit
|
10,097 | - | - | - | - | |||||||||||||||
Total financial instrument liabilities with off-balance-sheet risk
|
$ | 353,040 | $ | - | $ | - | $ | - | $ | - |
(1)
|
Considered Level 1 under Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures (“ASC 820”).
|
(2)
|
Considered Level 2 under ASC 820.
|
(3)
|
Considered Level 3 under ASC 820 and are based on valuation models that use significant assumptions that are not observable in an active market.
|
Note 6.
|
Fair Value Measurements (continued)
|
December 31, 2011
|
||||||||||||||||||||
Carrying
Amount
|
Estimated Fair
Value
|
Readily
Available
Market
Prices(1)
|
Observable
Market
Prices(2)
|
Company
Determined
Market
Prices(3)
|
||||||||||||||||
(Amounts In Thousands)
|
||||||||||||||||||||
Financial instrument assets:
|
||||||||||||||||||||
Cash and cash equivalents
|
$ | 29,291 | $ | 29,291 | $ | 29,291 | $ | - | $ | - | ||||||||||
Investment securities
|
222,095 | 222,095 | - | 222,095 | - | |||||||||||||||
Loans held for sale
|
24,615 | 24,615 | 24,615 | |||||||||||||||||
Loans
|
||||||||||||||||||||
Agricultural
|
67,202 | 68,306 | - | - | 68,306 | |||||||||||||||
Commercial and financial
|
136,745 | 135,317 | - | - | 135,317 | |||||||||||||||
Real estate:
|
||||||||||||||||||||
Construction, 1 to 4 family residential
|
21,744 | 22,233 | - | - | 22,233 | |||||||||||||||
Construction, land development and commercial
|
80,078 | 79,527 | - | - | 79,527 | |||||||||||||||
Mortgage, farmland
|
98,388 | 101,743 | - | - | 101,743 | |||||||||||||||
Mortgage, 1 to 4 family first liens
|
570,844 | 591,460 | - | - | 591,460 | |||||||||||||||
Mortgage, 1 to 4 family junior liens
|
102,901 | 105,872 | - | - | 105,872 | |||||||||||||||
Mortgage, multi-family
|
220,963 | 229,779 | - | - | 229,779 | |||||||||||||||
Mortgage, commercial
|
312,067 | 322,922 | - | - | 322,922 | |||||||||||||||
Loans to individuals
|
20,227 | 20,542 | - | - | 20,542 | |||||||||||||||
Obligations of state and political subdivisions
|
30,757 | 30,811 | - | - | 30,811 | |||||||||||||||
Accrued interest receivable
|
8,689 | 8,689 | - | 8,689 | - | |||||||||||||||
Total financial instrument assets
|
$ | 1,946,606 | $ | 1,993,202 | $ | 29,291 | $ | 255,399 | $ | 1,708,512 | ||||||||||
Financial instrument liabilities:
|
||||||||||||||||||||
Deposits
|
||||||||||||||||||||
Noninterest-bearing deposits
|
$ | 223,378 | $ | 223,378 | $ | - | $ | 223,378 | $ | - | ||||||||||
Interest-bearing deposits
|
1,302,099 | 1,309,545 | - | 1,309,545 | - | |||||||||||||||
Short-term borrowings
|
52,785 | 52,785 | - | 52,785 | - | |||||||||||||||
Federal Home Loan Bank borrowings
|
185,000 | 199,008 | - | 199,008 | - | |||||||||||||||
Accrued interest payable
|
1,625 | 1,625 | - | 1,625 | - | |||||||||||||||
Total financial instrument liabilities
|
$ | 1,764,887 | $ | 1,786,341 | $ | - | $ | 1,786,341 | $ | - | ||||||||||
Face Amount
|
||||||||||||||||||||
Financial instrument with off-balance sheet risk:
|
||||||||||||||||||||
Loan commitments
|
$ | 269,687 | $ | - | $ | - | $ | - | $ | - | ||||||||||
Letters of credit
|
12,016 | - | - | - | - | |||||||||||||||
Total financial instrument liabilities with off-balance-sheet risk
|
$ | 281,703 | $ | - | $ | - | $ | - | $ | - |
(1)
|
Considered Level 1 under ASC 820.
|
(2)
|
Considered Level 2 under ASC 820.
|
(3)
|
Considered Level 3 under ASC 820 and are based on valuation models that use significant assumptions that are not observable in an active market.
|
Note 6.
|
Fair Value Measurements (continued)
|
Level 1
|
Quoted prices in active markets for identical assets or liabilities.
|
Level 2
|
Observable inputs other than quoted prices included within Level 1. Observable inputs include the quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and inputs other than quoted prices that are observable for the asset or liability.
|
Level 3
|
Unobservable inputs supported by little or no market activity for financial instruments. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.
|
Note 6.
|
Fair Value Measurements (continued)
|
Note 6.
|
Fair Value Measurements (continued)
|
Note 6.
|
Fair Value Measurements (continued)
|
September 30, 2012
|
||||||||||||||||
Readily
Available
Market
Prices(1)
|
Observable
Market
Prices(2)
|
Company
Determined
Market
Prices(3)
|
Total at Fair
Value
|
|||||||||||||
(Amounts In Thousands)
|
||||||||||||||||
Investment securities available for sale
|
$ | - | $ | 219,774 | $ | - | $ | 219,774 | ||||||||
Total
|
$ | - | $ | 219,774 | $ | - | $ | 219,774 |
December 31, 2011
|
||||||||||||||||
Readily
Available
Market
Prices(1)
|
Observable
Market
Prices(2)
|
Company
Determined
Market
Prices(3)
|
Total at Fair
Value
|
|||||||||||||
(Amounts in Thousands)
|
||||||||||||||||
Investment securities available for sale
|
$ | - | $ | 211,367 | $ | - | $ | 211,367 | ||||||||
Total
|
$ | - | $ | 211,367 | $ | - | $ | 211,367 |
|
(1)
|
Considered Level 1 under ASC 820.
|
|
(2)
|
Considered Level 2 under ASC 820.
|
|
(3)
|
Considered Level 3 under ASC 820 and are based on valuation models that use significant assumptions that are not observable in an active market.
|
Note 6.
|
Fair Value Measurements (continued)
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||||||||||
September 30, 2012
|
September 30, 2012
|
September 30, 2012
|
||||||||||||||||||||||
Readily
Available
Market
Prices(1)
|
Observable
Market
Prices(2)
|
Company
Determined
Market
Prices(3)
|
Total at
Fair
Value
|
Total Losses
|
Total Losses
|
|||||||||||||||||||
(Amounts in Thousands)
|
||||||||||||||||||||||||
Loans (4)
|
||||||||||||||||||||||||
Agricultural
|
$ | - | $ | - | $ | 11 | $ | 11 | ||||||||||||||||
Commercial and financial
|
- | - | 2,988 | 2,988 | $ | 50 | $ | 249 | ||||||||||||||||
Real Estate:
|
||||||||||||||||||||||||
Construction, land development and commercial
|
- | - | 2,095 | 2,095 | - | 563 | ||||||||||||||||||
Mortgage, farmland
|
- | - | 810 | 810 | - | - | ||||||||||||||||||
Mortgage, 1 to 4 family first liens
|
- | - | 2,930 | 2,930 | 145 | 544 | ||||||||||||||||||
Mortgage, 1 to 4 family junior liens
|
- | - | 126 | 126 | 70 | 82 | ||||||||||||||||||
Mortgage, multi-family
|
- | - | 7,789 | 7,789 | - | - | ||||||||||||||||||
Mortgage, commercial
|
- | - | 12,050 | 12,050 | - | 210 | ||||||||||||||||||
Loans to individuals
|
- | - | - | - | - | 12 | ||||||||||||||||||
Foreclosed assets (5)
|
- | - | 301 | 301 | 20 | 140 | ||||||||||||||||||
Total
|
$ | - | $ | - | $ | 29,100 | $ | 29,100 | $ | 285 | $ | 1,800 |
|
(1)
|
Considered Level 1 under ASC 820.
|
|
(2)
|
Considered Level 2 under ASC 820.
|
|
(3)
|
Considered Level 3 under ASC 820 and are based on valuation models that use significant assumptions that are not observable in an active market.
|
|
(4)
|
Represents carrying value and related write-downs of loans for which adjustments are based on the value of the collateral. The carrying value of loans fully-charged off is zero.
|
|
(5)
|
Represents the fair value and related losses of foreclosed real estate and other collateral owned that were measured at fair value subsequent to their initial classification as foreclosed assets.
|
Note 6.
|
Fair Value Measurements (continued)
|
Year Ended
|
||||||||||||||||||||
December 31, 2011
|
December 31, 2011
|
|||||||||||||||||||
Readily
Available
Market
Prices(1)
|
Observable
Market
Prices(2)
|
Company
Determined
Market
Prices(3)
|
Total at Fair Value
|
Total Losses
|
||||||||||||||||
(Amounts in Thousands)
|
||||||||||||||||||||
Loans (4)
|
||||||||||||||||||||
Commercial and financial
|
$ | - | $ | - | $ | 2,163 | $ | 2,163 | $ | 548 | ||||||||||
Real Estate:
|
||||||||||||||||||||
Construction, land development and commercial
|
- | - | 472 | 472 | 30 | |||||||||||||||
Mortgage, farmland
|
- | - | 331 | 331 | - | |||||||||||||||
Mortgage, 1 to 4 family first liens
|
- | - | 7,174 | 7,174 | 1,205 | |||||||||||||||
Mortgage, 1 to 4 family junior liens
|
- | - | 222 | 222 | 207 | |||||||||||||||
Mortgage, multi-family
|
- | - | 613 | 613 | 50 | |||||||||||||||
Mortgage, commercial
|
- | - | 2,297 | 2,297 | 525 | |||||||||||||||
Loans to individuals
|
- | - | - | - | 5 | |||||||||||||||
Foreclosed assets (5)
|
- | - | 286 | 286 | 198 | |||||||||||||||
Total
|
$ | - | $ | - | $ | 13,558 | $ | 13,558 | $ | 2,768 |
|
(1)
|
Considered Level 1 under ASC 820.
|
|
(2)
|
Considered Level 2 under ASC 820.
|
|
(3)
|
Considered Level 3 under ASC 820 and are based on valuation models that use significant assumptions that are not observable in an active market.
|
|
(4)
|
Represents carrying value and related write-downs of loans for which adjustments are based on the value of the collateral. The carrying value of loans fully-charged off is zero.
|
|
(5)
|
Represents the fair value and related losses of foreclosed real estate and other collateral owned that were measured at fair value subsequent to their initial classification as foreclosed assets.
|
Note 7.
|
Stock Repurchase Program
|
Note 8.
|
Commitments and Contingencies
|
September 30, 2012
|
December 31, 2011
|
|||||||
(Amounts In Thousands)
|
||||||||
Firm loan commitments and unused portion of lines of credit:
|
||||||||
Home equity loans
|
$ | 35,528 | $ | 35,345 | ||||
Credit cards
|
44,543 | 42,493 | ||||||
Commercial, real estate and home construction
|
115,466 | 62,388 | ||||||
Commercial lines and real estate purchase loans
|
147,406 | 129,461 | ||||||
Outstanding letters of credit
|
10,097 | 12,016 |
Note 9.
|
Income Taxes
|
|
·
|
The strength of the United States economy in general and the strength of the local economies in which the Company conducts its operations which may be less favorable than expected and may result in, among other things, a deterioration in the credit quality and value of the Company’s assets.
|
|
·
|
The effects of recent financial market disruptions and the current global economic recession, and monetary and other governmental actions designed to address such disruptions and recession.
|
|
·
|
The financial strength of the counterparties with which the Company or the Company’s customers do business and as to which the Company has investment or financial exposure.
|
|
·
|
The credit quality and credit agency ratings of the securities in the Company’s investment securities portfolio, a deterioration or downgrade of which could lead to other-than-temporary impairment of the affected securities and the recognition of an impairment loss.
|
|
·
|
The effects of, and changes in, laws, regulations and policies affecting banking, securities, insurance and monetary and financial matters as well as any laws otherwise affecting the Company.
|
|
·
|
The effects of changes in interest rates (including the effects of changes in the rate of prepayments of the Company’s assets) and the policies of the Board of Governors of the Federal Reserve System.
|
|
·
|
The ability of the Company to compete with other financial institutions as effectively as the Company currently intends due to increases in competitive pressures in the financial services sector.
|
|
·
|
The ability of the Company to obtain new customers and to retain existing customers.
|
|
·
|
The timely development and acceptance of products and services, including products and services offered through alternative electronic delivery channels.
|
|
·
|
Technological changes implemented by the Company and by other parties, including third party vendors, which may be more difficult or more expensive than anticipated or which may have unforeseen consequences to the Company and its customers.
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
|
|
·
|
The ability of the Company to develop and maintain secure and reliable electronic systems.
|
|
·
|
The ability of the Company to retain key executives and employees and the difficulty that the Company may experience in replacing key executives and employees in an effective manner.
|
|
·
|
Consumer spending and saving habits which may change in a manner that affects the Company’s business adversely.
|
|
·
|
The economic impact of natural disasters, terrorist attacks and military actions.
|
|
·
|
Business combinations and the integration of acquired businesses and assets which may be more difficult or expensive than expected.
|
|
·
|
The costs, effects and outcomes of existing or future litigation.
|
|
·
|
Changes in accounting policies and practices that may be adopted by state and federal regulatory agencies and the Financial Accounting Standards Board.
|
|
·
|
The ability of the Company to manage the risks associated with the foregoing as well as anticipated.
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
|
September 30, 2012
|
December 31, 2011
|
|||||||
Shareholders' equity (GAAP)
|
$ | 221,345 | $ | 208,429 | ||||
Shareholders' equity plus common stock in ESOP subject to contingent repurchase obligation (non-GAAP)
|
250,943 | 236,255 | ||||||
Net income (1)
|
27,309 | 26,777 | ||||||
Average shareholders' equity (GAAP) (2)
|
213,822 | 178,984 | ||||||
Average shareholders' equity plus common stock in ESOP subject to contingent repurchase obligation (non-GAAP) (2)
|
238,869 | 205,370 | ||||||
Return on average shareholders' equity (GAAP) (3)
|
12.77 | % | 14.96 | % | ||||
Return on average shareholders' equity plus common stock in ESOP subject to contingent repurchase obligation (non-GAAP) (4)
|
11.43 | % | 13.04 | % |
|
(1)
|
Calculation based on trailing 12 month figures.
|
|
(2)
|
Calculation based on trailing 12 month average.
|
|
(3)
|
Return on average shareholders’ equity (GAAP) equals net income divided by average shareholders’ equity. Average shareholders’ equity is calculated using a trailing 12 month average.
|
|
(4)
|
Return on average shareholders’ equity plus common stock in ESOP subject to contingent repurchase obligation (non-GAAP) equals net income divided by average shareholders’ equity plus common stock in ESOP subject to contingent repurchase obligation. Average shareholders’ equity is calculated using a trailing 12 month average.
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
|
·
|
Total assets were $2.067 billion, an increase of $48.73 million since December 31, 2011.
|
·
|
Cash and cash equivalents were $79.85 million, an increase of $50.56 million since December 31, 2011. The growth in cash and cash equivalents included $46.57 million of temporary public funds.
|
·
|
Net loans were $1.679 billion, a decrease of $7.33 million since December 31, 2011.
|
·
|
Deposit growth of $81.67 million since December 31, 2011. Deposit growth included $46.57 million of temporary public funds.
|
·
|
Federal Home Loan Bank borrowing decreased by $40.00 million since December 31, 2011.
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
|
September 30, 2012
|
December 31, 2011
|
|||||||||||||||
Amount
|
Percent
|
Amount
|
Percent
|
|||||||||||||
(Amounts In Thousands)
|
(Amounts In Thousands)
|
|||||||||||||||
Agricultural
|
$ | 68,769 | 4.07 | % | $ | 68,556 | 4.05 | % | ||||||||
Commercial and financial
|
142,888 | 8.46 | 143,174 | 8.46 | ||||||||||||
Real estate:
|
||||||||||||||||
Construction, 1 to 4 family residential
|
27,368 | 1.62 | 22,308 | 1.32 | ||||||||||||
Construction, land development and commercial
|
79,370 | 4.70 | 84,508 | 4.99 | ||||||||||||
Mortgage, farmland
|
102,457 | 6.07 | 99,799 | 5.90 | ||||||||||||
Mortgage, 1 to 4 family first liens
|
585,577 | 34.66 | 577,881 | 34.16 | ||||||||||||
Mortgage, 1 to 4 family junior liens
|
104,258 | 6.17 | 104,915 | 6.20 | ||||||||||||
Mortgage, multi-family
|
217,737 | 12.89 | 222,851 | 13.17 | ||||||||||||
Mortgage, commercial
|
308,690 | 18.27 | 316,329 | 18.69 | ||||||||||||
Loans to individuals
|
19,117 | 1.13 | 20,598 | 1.22 | ||||||||||||
Obligations of state and political subdivisions
|
33,134 | 1.96 | 31,147 | 1.84 | ||||||||||||
$ | 1,689,365 | 100.00 | % | $ | 1,692,066 | 100.00 | % | |||||||||
Less allowance for loan losses
|
26,170 | 30,150 | ||||||||||||||
$ | 1,663,195 | $ | 1,661,916 |
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
|
September 30, 2012
|
December 31, 2011
|
|||||||||||||||||||||||
Amount
|
% of Total
Allowance
|
% of Loans to
Total Loans
|
Amount
|
% of
Total
Allowance
|
% of Loans
to Total
Loans
|
|||||||||||||||||||
(In Thousands)
|
(In Thousands)
|
|||||||||||||||||||||||
Agricultural
|
$ | 1,904 | 7.28 | % | 4.07 | % | $ | 1,354 | 4.49 | % | 4.05 | % | ||||||||||||
Commercial and financial
|
4,684 | 17.90 | 8.46 | 6,429 | 21.32 | 8.46 | ||||||||||||||||||
Real estate:
|
||||||||||||||||||||||||
Construction, 1 to 4 family residential
|
979 | 3.74 | 1.62 | 564 | 1.87 | 1.32 | ||||||||||||||||||
Construction, land development and commercial
|
3,053 | 11.66 | 4.70 | 4,430 | 14.69 | 4.99 | ||||||||||||||||||
Mortgage, farmland
|
1,651 | 6.31 | 6.07 | 1,411 | 4.68 | 5.90 | ||||||||||||||||||
Mortgage, 1 to 4 family first liens
|
6,489 | 24.79 | 34.66 | 7,037 | 23.34 | 34.16 | ||||||||||||||||||
Mortgage, 1 to 4 family junior liens
|
1,648 | 6.30 | 6.17 | 2,014 | 6.68 | 6.20 | ||||||||||||||||||
Mortgage, multi-family
|
1,654 | 6.32 | 12.89 | 1,888 | 6.26 | 13.17 | ||||||||||||||||||
Mortgage, commercial
|
3,427 | 13.09 | 18.27 | 4,262 | 14.14 | 18.69 | ||||||||||||||||||
Loans to individuals
|
329 | 1.26 | 1.13 | 371 | 1.24 | 1.22 | ||||||||||||||||||
Obligations of state and political subdivisions
|
352 | 1.35 | 1.96 | 390 | 1.29 | 1.84 | ||||||||||||||||||
$ | 26,170 | 100.00 | % | 100.00 | % | $ | 30,150 | 100.00 | % | 100.00 | % |
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
|
·
|
Net interest income decreased by $0.49 million.
|
·
|
The provision for loan losses decreased by $5.66 million.
|
·
|
Other income increased by $1.77 million.
|
·
|
Other expenses increased by $6.31 million.
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
|
Increase (Decrease) in Net Interest Income
|
||||||||||||||||||||
Change in
Average Balance
|
Change in
Average Rate
|
Volume Changes
|
Rate Changes
|
Net Change
|
||||||||||||||||
(Amounts in Thousands)
|
||||||||||||||||||||
Interest income:
|
||||||||||||||||||||
Loans, net
|
$ | 77,277 | (0.41 | )% | $ | 3,169 | $ | (4,938 | ) | $ | (1,769 | ) | ||||||||
Taxable securities
|
(7,334 | ) | (0.66 | ) | (145 | ) | (502 | ) | (647 | ) | ||||||||||
Nontaxable securities
|
5,571 | (0.31 | ) | 201 | (269 | ) | (68 | ) | ||||||||||||
Federal funds sold
|
12,454 | - | 24 | - | 24 | |||||||||||||||
$ | 87,968 | $ | 3,249 | $ | (5,709 | ) | $ | (2,460 | ) | |||||||||||
Interest expense:
|
||||||||||||||||||||
Interest-bearing demand deposits
|
$ | 37,213 | (0.06 | )% | $ | (78 | ) | $ | 139 | $ | 61 | |||||||||
Savings deposits
|
17,411 | (0.09 | ) | (31 | ) | 276 | 245 | |||||||||||||
Time deposits
|
(17,760 | ) | (0.26 | ) | 263 | 1,229 | 1,493 | |||||||||||||
Short-term borrowings
|
(7,500 | ) | (0.30 | ) | 22 | 127 | 149 | |||||||||||||
FHLB borrowings
|
(37,611 | ) | 0.06 | 99 | (79 | ) | 20 | |||||||||||||
$ | (8,247 | ) | $ | 275 | $ | 1,692 | $ | 1,968 | ||||||||||||
Change in net interest income
|
$ | 3,524 | $ | (4,017 | ) | $ | (492 | ) |
(Tax Equivalent Basis)
|
2012
|
2011
|
||||||
Yield on average interest-earning assets
|
4.77 | % | 5.19 | % | ||||
Rate on average interest-bearing liabilities
|
1.40 | 1.60 | ||||||
Net interest spread
|
3.37 | % | 3.59 | % | ||||
Effect of noninterest-bearing funds
|
0.26 | 0.26 | ||||||
Net interest margin (tax equivalent interest income divided by average interest-earning assets)
|
3.63 | % | 3.85 | % |
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
|
Nine Months Ended September 30,
|
||||||||||||||||
2012
|
2011
|
$ Change
|
% Change
|
|||||||||||||
(Amounts in thousands)
|
||||||||||||||||
Net gain on sale of loans
|
$ | 2,589 | $ | 1,199 | $ | 1,390 | 115.93 | % | ||||||||
Trust fees
|
3,450 | 3,309 | 141 | 4.26 | ||||||||||||
Service charges and fees
|
5,802 | 5,669 | 133 | 2.35 | ||||||||||||
Rental revenue on tax credit real estate
|
1,189 | 1,075 | 114 | 10.60 | ||||||||||||
Net gain on sale of other real estate owned and other reposessed assets
|
604 | 504 | 100 | 19.84 | ||||||||||||
Other noninterest income
|
1,880 | 1,985 | (105 | ) | (5.29 | ) | ||||||||||
$ | 15,514 | $ | 13,741 | $ | 1,773 |
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
|
Nine Months Ended September 30,
|
||||||||||||||||
2012
|
2011
|
$ Change
|
% Change
|
|||||||||||||
(Amounts in thousands)
|
||||||||||||||||
Salaries and employee benefits
|
$ | 17,725 | $ | 16,616 | $ | 1,109 | 6.67 | % | ||||||||
Occupancy
|
2,469 | 2,464 | 5 | 0.20 | ||||||||||||
Furniture and equipment
|
3,477 | 2,739 | 738 | 26.94 | ||||||||||||
Office supplies and postage
|
1,145 | 962 | 183 | 19.02 | ||||||||||||
Advertising and business development
|
1,705 | 1,178 | 527 | 44.74 | ||||||||||||
Outside services
|
5,026 | 5,052 | (26 | ) | (0.51 | ) | ||||||||||
Rental expenses on tax credit real estate
|
1,774 | 1,530 | 244 | 15.95 | ||||||||||||
FDIC insurance assessment
|
784 | 1,053 | (269 | ) | (25.55 | ) | ||||||||||
Loss on extinguishment of debt - Federal Home Loan Bank borrowings
|
3,544 | - | 3,544 | 100.00 | ||||||||||||
Other noninterest expense
|
1,382 | 1,130 | 252 | 22.30 | ||||||||||||
$ | 39,031 | $ | 32,724 | $ | 6,307 |
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
|
Increase (Decrease) in Net Interest Income
|
||||||||||||||||||||
Change in
Average Balance
|
Change in
Average Rate
|
Volume Changes
|
Rate Changes
|
Net Change
|
||||||||||||||||
(Amounts in Thousands)
|
||||||||||||||||||||
Interest income:
|
||||||||||||||||||||
Loans, net
|
$ | 53,872 | (0.43 | )% | $ | 636 | $ | (1,705 | ) | $ | (1,069 | ) | ||||||||
Taxable securities
|
(9,692 | ) | (0.23 | ) | (59 | ) | (173 | ) | (232 | ) | ||||||||||
Nontaxable securities
|
7,825 | (0.35 | ) | 93 | (103 | ) | (10 | ) | ||||||||||||
Federal funds sold
|
48,461 | 0.01 | 29 | 2 | 31 | |||||||||||||||
$ | 100,466 | $ | 699 | $ | (1,979 | ) | $ | (1,280 | ) | |||||||||||
Interest expense:
|
||||||||||||||||||||
Interest-bearing demand deposits
|
$ | 43,283 | - | % | $ | (23 | ) | $ | 3 | $ | (20 | ) | ||||||||
Savings deposits
|
29,584 | (0.01 | ) | (17 | ) | 41 | 24 | |||||||||||||
Time deposits
|
(12,331 | ) | (0.24 | ) | 68 | 370 | 438 | |||||||||||||
Short-term borrowings
|
(20,252 | ) | (0.04 | ) | 20 | 28 | 48 | |||||||||||||
FHLB borrowings
|
(3,111 | ) | 0.01 | 33 | (4 | ) | 29 | |||||||||||||
$ | 37,173 | $ | 81 | $ | 438 | $ | 519 | |||||||||||||
Change in net interest income
|
$ | 780 | $ | (1,541 | ) | $ | (761 | ) |
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
|
(Tax Equivalent Basis)
|
2012
|
2011
|
||||||
Yield on average interest-earning assets
|
4.65 | % | 5.18 | % | ||||
Rate on average interest-bearing liabilities
|
1.37 | 1.53 | ||||||
Net interest spread
|
3.28 | % | 3.65 | % | ||||
Effect of noninterest-bearing funds
|
0.27 | 0.26 | ||||||
Net interest margin (tax equivalent interest income divided by average interest-earning assets)
|
3.55 | % | 3.91 | % |
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
|
Three Months Ended September 30,
|
||||||||||||||||
2012
|
2011
|
$ Change
|
% Change
|
|||||||||||||
(Amounts in thousands)
|
||||||||||||||||
Net gain on sale of loans
|
$ | 1,023 | $ | 546 | $ | 477 | 87.36 | |||||||||
Trust fees
|
1,160 | 1,114 | 46 | 4.13 | ||||||||||||
Service charges and fees
|
1,970 | 1,937 | 33 | 1.70 | ||||||||||||
Rental revenue on tax credit real estate
|
397 | 397 | - | - | ||||||||||||
Net gain on sale of other real estate owned and other reposessed assets
|
163 | 119 | 44 | 36.97 | ||||||||||||
Other noninterest income
|
608 | 580 | 28 | 4.83 | ||||||||||||
$ | 5,321 | $ | 4,693 | $ | 628 |
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
|
Three Months Ended September 30,
|
||||||||||||||||
2012
|
2011
|
$ Change
|
% Change
|
|||||||||||||
(Amounts in thousands)
|
||||||||||||||||
Salaries and employee benefits
|
$ | 5,782 | $ | 5,532 | $ | 250 | 4.52 | % | ||||||||
Occupancy
|
773 | 809 | (36 | ) | (4.45 | ) | ||||||||||
Furniture and equipment
|
1,183 | 957 | 226 | 23.62 | ||||||||||||
Office supplies and postage
|
427 | 308 | 119 | 38.64 | ||||||||||||
Advertising and business development
|
608 | 402 | 206 | 51.24 | ||||||||||||
Outside services
|
1,689 | 1,829 | (140 | ) | (7.65 | ) | ||||||||||
Rental expenses on tax credit real estate
|
560 | 648 | (88 | ) | (13.58 | ) | ||||||||||
FDIC insurance assessment
|
259 | 267 | (8 | ) | (3.00 | ) | ||||||||||
Loss on extinguishment of debt - Federal Home Loan Bank borrowings
|
3,544 | - | 3,544 | 100.00 | ||||||||||||
Other noninterest expense
|
447 | 392 | 55 | 14.03 | ||||||||||||
$ | 15,272 | $ | 11,144 | $ | 4,128 |
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
|
Item 4.
|
Item 1.
|
Item 1A.
|
Risk Factors
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Period
|
Total number of shares
purchased
|
Average price paid per
share
|
Total number of shares
purchased as part of publicly
announced plans or
programs
|
Maximum number of
shares that may yet be
purchased under the
plans or programs (1)
|
||||||||||||
July 1 to July 31
|
5,208 | $ | 67.50 | 314,478 | 435,522 | |||||||||||
August 1 to August 31
|
2,170 | 68.31 | 316,648 | 433,352 | ||||||||||||
September 1 to September 30
|
1,425 | 69.00 | 318,073 | 431,927 | ||||||||||||
Total
|
8,803 | $ | 67.94 | 318,073 | 431,927 |
Item 3.
|
Defaults upon Senior Securities
|
Item 4.
|
Item 5.
|
Item 6.
|
3.1
|
Articles of Incorporation of Hills Bancorporation, incorporated by reference to Exhibit 3.1 to the Company’s Form S-3 filed with the Commission on May 12, 2011.
|
3.2
|
By-laws of Hills Bancorporation, incorporated by reference to Exhibit 3.2 to the Company’s Form S-3 filed with the Commission on May 12, 2011.
|
31
|
Certifications under Section 302 of the Sarbanes-Oxley Act of 2002
|
32
|
Certifications under Section 906 of the Sarbanes-Oxley Act of 2002
|
101**
|
The following material from Hills Bancorporation Form 10-Q Report for the quarterly period ended September 30, 2012, formatted in XBRL: (1) Unaudited Condensed Consolidated Balance Sheets, (2) Unaudited Condensed Consolidated Statements of Income, (3) Unaudited Condensed Consolidated Statements of Comprehensive Income, (4) Unaudited Condensed Consolidated Statement of Changes in Stockholders’ Equity, (5) Unaudited Condensed Consolidated Statements of Cash Flows, and (6) the Notes to Unaudited Condensed Consolidated Financial Statements.
|
|
**
|
Users of this data are advised that, pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Section 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934, and are otherwise not subject to liability under these sections.
|
HILLS BANCORPORATION
|
||
Date: November 7, 2012
|
By: /s/ Dwight O. Seegmiller
|
|
Dwight O. Seegmiller, Director, President and Chief Executive Officer
|
||
Date: November 7, 2012
|
By: /s/ Shari DeMaris
|
|
Shari DeMaris, Secretary, Treasurer and Chief Accounting Officer
|
Exhibit
Number
|
Description
|
Page Number In The Sequential
Numbering System September 30, 2012 Form 10-Q
|
Certifications under Section 302 of the Sarbanes-Oxley Act of 2002
|
56-57
|
|
Certifications under Section 906 of the Sarbanes-Oxley Act of 2002
|
58
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Hills Bancorporation;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: November 7, 2012
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By: /s/ Dwight O. Seegmiller
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Dwight O. Seegmiller, Director, President and Chief Executive Officer
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1.
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I have reviewed this quarterly report on Form 10-Q of Hills Bancorporation;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: November 7, 2012
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By: /s/ Shari DeMaris
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Shari DeMaris, Secretary, Treasurer and Chief Accounting Officer
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Date: November 7, 2012
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By: /s/ Dwight O. Seegmiller
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Dwight O. Seegmiller, Director, President and Chief Executive Officer
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Date: November 7, 2012
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By: /s/ Shari DeMaris
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Shari DeMaris, Secretary, Treasurer and Chief Accounting Officer
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Stock Repurchase Program (Details) (USD $)
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3 Months Ended | 9 Months Ended | 86 Months Ended | |
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Sep. 30, 2012
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Sep. 30, 2012
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Sep. 30, 2011
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Sep. 30, 2012
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Stock Repurchase Program [abstract] | ||||
Maximum number of share authorized to repurchase under the program (in shares) | 750,000 | 750,000 | 750,000 | |
Common stock purchased during the period (in shares) | 8,803 | 25,990 | 61,182 | 318,073 |
Average price per share (in dollars per share) | $ 67.94 |
Commitments and Contingencies (Tables)
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9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2012
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Commitments and Contingencies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of banks commitments | The Bank's exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit, credit card participations and standby letters of credit is represented by the contractual amount of those instruments. The Bank uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments. A summary of the Bank's commitments at September 30, 2012 and December 31, 2011 is as follows:
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Fair Value Measurements, Assets and Liabilities Recurring Basis (Details) (USD $)
In Thousands, unless otherwise specified |
Sep. 30, 2012
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Dec. 31, 2011
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Readily Available Market Prices [Member]
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Summary of assets and liabilities measured at fair value on a recurring basis [Abstract] | ||||||||||||
Total | $ 79,851 | [1] | $ 29,291 | [2] | ||||||||
Observable Market Prices [Member]
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Summary of assets and liabilities measured at fair value on a recurring basis [Abstract] | ||||||||||||
Total | 253,851 | [3] | 255,399 | [3] | ||||||||
Company Determined Market Prices [Member]
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Summary of assets and liabilities measured at fair value on a recurring basis [Abstract] | ||||||||||||
Total | 1,715,226 | [4] | 1,708,512 | [4] | ||||||||
Recurring Basis [Member]
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Summary of assets and liabilities measured at fair value on a recurring basis [Abstract] | ||||||||||||
Investment securities available for sale | 219,774 | 211,367 | ||||||||||
Total | 219,774 | 211,367 | ||||||||||
Recurring Basis [Member] | Readily Available Market Prices [Member]
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Summary of assets and liabilities measured at fair value on a recurring basis [Abstract] | ||||||||||||
Investment securities available for sale | 0 | [2] | 0 | [2] | ||||||||
Total | 0 | [2] | 0 | [2] | ||||||||
Recurring Basis [Member] | Observable Market Prices [Member]
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Summary of assets and liabilities measured at fair value on a recurring basis [Abstract] | ||||||||||||
Investment securities available for sale | 219,774 | [3] | 211,367 | [3] | ||||||||
Total | 219,774 | [3] | 211,367 | [3] | ||||||||
Recurring Basis [Member] | Company Determined Market Prices [Member]
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Summary of assets and liabilities measured at fair value on a recurring basis [Abstract] | ||||||||||||
Investment securities available for sale | 0 | [4] | 0 | [4] | ||||||||
Total | $ 0 | [4] | $ 0 | [4] | ||||||||
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Summary of Significant Accounting Policies
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9 Months Ended | ||
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Sep. 30, 2012
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Summary of Significant Accounting Policies [Abstract] | |||
Summary of Significant Accounting Policies |
Basis of Presentation: The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial reporting and with instructions for Form 10-Q and Regulation S-X. These financial statements include all adjustments (consisting of normal recurring accruals) which in the opinion of management are considered necessary for the fair presentation of the financial position and results of operations for the periods shown. Certain prior year amounts may be reclassified to conform to the current year presentation. The Company considers that it operates as one business segment, a commercial bank. Operating results for the nine month period ended September 30, 2012 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2012. For further information, refer to the consolidated financial statements and footnotes thereto included in the Form 10-K Annual Report of Hills Bancorporation and subsidiary (the "Company") for the year ended December 31, 2011 filed with the Securities Exchange Commission on March 9, 2012. The Company evaluated subsequent events through the filing date of its quarterly report on Form 10-Q with the SEC. Recently Adopted Accounting Standards: In April 2011, the FASB issued new standards that revised the determination of when the restructuring of a receivable should be considered a troubled debt restructuring ("TDR"). The standard provides additional guidance for determining whether the debtor is experiencing financial difficulty. The new standard became effective for the Company beginning July 1, 2011. The adoption did not have a material impact on the Company's financial position. Also in April 2011, the FASB issued a new standard that changes the assessment of effective control of a transferor when determining whether repurchase agreements are accounted for as a secured borrowing or sale. The new standard became effective for the Company beginning January 1, 2012. The adoption did not have a material impact on the Company's financial position. In May 2011, the FASB issued a new standard that provides guidance about how fair value should be determined where it already is required or permitted under international financial reporting standards ("IFRS") or accounting principles generally accepted in the United States ("GAAP"). For GAAP, most of the changes were clarifications of existing guidance or wording changes to align with IFRS. The new standard became effective for the Company beginning January 1, 2012. The adoption did not have a material impact on the Company's financial position. The Company added additional disclosure requirements to Note 6: Fair Value Measurements. In September 2011, the FASB issued a new standard that permits the Company to make a qualitative assessment of whether it is more likely than not that the fair value of the portion of the Company to which goodwill relates is less than its carrying amount before applying the two-step goodwill impairment test. The new standard became effective for the Company beginning January 1, 2012. The adoption did not have a material impact on the Company's financial position. In June 2011 and December 2011, the FASB issued standards regarding the presentation of comprehensive income in the consolidated financial statements. The new standard became effective for the Company beginning January 1, 2012. The adoption did not have a material impact on the Company's financial position. The Company now presents comprehensive income in a separate statement of comprehensive income. Recently Issued Accounting Standards: In July 2012, the FASB issued a new standard which permits an entity to make a qualitative assessment to determine whether it is more likely than not that an indefinite-lived intangible asset, other than goodwill, is impaired. This accounting standard was subsequently codified into ASC Topic 350. Under the new standard, if an entity concludes, based on an evaluation of all relevant qualitative factors, that it is not more likely than not that the fair value of an indefinite-lived intangible asset is less than its carrying amount, it will not be required to perform the quantitative impairment test for that asset. The standard is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012, with early adoption permitted. The adoption of this standard is not expected to have a material impact on the consolidated financial statements. |