Virginia |
54-1280811
|
|
(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer Identification No.) |
Large accelerated filer o
Non-accelerated filer o (Do not check if a smaller reporting company)
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Accelerated filer o
Smaller reporting Company x
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Page
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PART I
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||
Item 1
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Business
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2
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Item 1A
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Risk Factors
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7
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Item 1B
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Unresolved Staff Comments
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11
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Item 2
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Properties
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12
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Item 3
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Legal Proceedings
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12
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Item 4
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Mine Safety Disclosures
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12
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PART II
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||
Item 5
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
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13
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Item 6
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Selected Financial Data
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15
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Item 7
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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16
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Item 8
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Financial Statements and Supplementary Data
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38
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Item 9
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Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
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81
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Item 9A
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Controls and Procedures
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81
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Item 9B
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Other Information
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81
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PART III
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||
Item 10
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Directors, Executive Officers and Corporate Governance
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82
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Item 11
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Executive Compensation
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82
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Item 12
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
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81
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Item 13
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Certain Relationships and Related Transactions and Director Independence
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82
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Item 14
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Principal Accounting Fees and Services
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82
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PART IV
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||
Item 15
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Exhibits and Financial Statement Schedules
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83
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Signatures
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84
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●
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Changes in the quality or composition of our loan or investment portfolios, including adverse developments in borrower industries, declines in real estate values in our markets, or in the repayment ability of individual borrowers or issuers;
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●
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The strength of the economy in our target market area, as well as general economic, market, or business conditions;
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●
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Aninsufficient allowance for loan losses as a result of inaccurate assumptions;
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●
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Ourability to maintain our “well-capitalized” regulatory status;
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●
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Changesin the interest rates affecting our deposits and our loans;
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●
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Changes in our competitive position, competitive actions by other financial institutions and the competitive nature of the financial services industry and our ability to compete effectively against other financial institutions in our banking markets;
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●
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Ourability to manage growth;
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●
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Our potential growth, including our entrance or expansion into new markets, the opportunities that may be presented to and pursued by us and the need for sufficient capital to support that growth;
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●
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Ourexposure to operational risk;
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●
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Ourability to raise capital as needed by our business;
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●
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Changesin laws, regulations and the policies of federal or state regulators and agencies; and
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●
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Othercircumstances, many of which are beyond our control.
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·
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excessive upfront points and fees (those exceeding 3% of the total loan amount, less “bona fide discount points” for prime loans);
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·
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interest-only payments;
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·
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negative-amortization; and
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·
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terms longer than 30 years.
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Timberville Branch and Administrative Offices
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Elkton Branch
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205 South Main Street
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127 West Rockingham Street
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Timberville, VA 22853
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Elkton, VA 22827
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Broadway Branch
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Port Road Branch
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126 Timberway
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1085 Port Republic Road
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Broadway, VA 22815
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Harrisonburg, VA 22801
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Bridgewater Branch
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Edinburg Branch
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100 Plaza Drive
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120 South Main Street
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Bridgewater, VA 22812
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Edinburg, VA 22824
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Woodstock Branch
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Crossroads Branch
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161 South Main Street
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80 Cross Keys Road
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Woodstock, VA 22664
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Harrisonburg, VA 22801
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Luray Branch
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Dealer Finance Division
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700 East Main Street
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4759 Spotswood Trail
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Luray, VA 22835
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Penn Laird, VA 22846
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Fishersville Loan Production Office
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North Augusta Branch
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1842 Jefferson Hwy
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2813 North Augusta Street
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Fishersville, VA 22939
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Staunton, VA 22401
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Craigsville Branch
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125 W. Craig Street
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Craigsville, VA 24430
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Harrisonburg Office
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Woodstock Office |
Fishersville Loan Production Office
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2040 Deyerle Avenue
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161 South Main Street
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1842 Jefferson Hwy 161
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Suite 107
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Woodstock, VA 22664
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Fishersville, VA 22939
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Harrisonburg, VA 22801
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Period Ending
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||||||||||||||||||||||||
Index
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12/31/10
|
12/31/11
|
12/31/12
|
12/31/13
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12/31/14
|
12/31/15
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||||||||||||||||||
F & M Bank Corp.
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100.00 | 98.06 | 113.68 | 143.51 | 156.93 | 189.07 | ||||||||||||||||||
Russell 2000
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100.00 | 95.82 | 111.49 | 154.78 | 162.35 | 155.18 | ||||||||||||||||||
SNL Bank
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100.00 | 77.44 | 104.51 | 143.49 | 160.40 | 163.14 | ||||||||||||||||||
2015
|
2014
|
|||||||||||||||||||||||
Stock Price Range
|
Per Share
|
Stock Price Range
|
Per Share
|
|||||||||||||||||||||
Quarter
|
Low
|
High
|
Dividends Declared
|
Low
|
High
|
Dividends Declared
|
||||||||||||||||||
1st
|
19.30 | 20.95 | $ | .18 | 17.21 | 18.00 | $ | .17 | ||||||||||||||||
2nd
|
20.00 | 24.50 | .18 | 17.27 | 19.90 | .17 | ||||||||||||||||||
3rd
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20.98 | 22.45 | .18 | 17.70 | 19.08 | .17 | ||||||||||||||||||
4th
|
21.10 | 24.47 | .19 | 17.83 | 19.73 | .17 | ||||||||||||||||||
Total
|
$ | .73 | $ | .68 |
(Dollars in thousands, except per share data)
|
2015
|
2014
|
2013
|
2012
|
2011
|
|||||||||||||||
Income Statement Data:
|
||||||||||||||||||||
Interest and Dividend Income
|
$ | 29,353 | $ | 26,772 | $ | 25,966 | $ | 27,225 | $ | 27,680 | ||||||||||
Interest Expense
|
2,876 | 3,648 | 4,773 | 6,294 | 7,719 | |||||||||||||||
Net Interest Income
|
26,477 | 23,124 | 21,193 | 20,931 | 19,961 | |||||||||||||||
Provision for Loan Losses
|
300 | 2,250 | 3,775 | 4,200 | 4,000 | |||||||||||||||
Net Interest Income after Provision for Loan Losses
|
26,177 | 20,874 | 17,418 | 16,731 | 15,961 | |||||||||||||||
Noninterest Income
|
3,732
|
3,485
|
3,925
|
3,627
|
3,118
|
|||||||||||||||
Low Income Housing Partnership Losses
|
(620 | ) | (608 | ) | (856 | ) | (621 | ) | (467 | ) | ||||||||||
Securities Gains (Losses)
|
- | - | - | - | 1,024 | |||||||||||||||
Noninterest Expenses
|
17,986 | 15,656 | 14,720 | 13,362 | 12,892 | |||||||||||||||
Income before Income Taxes
|
11,303 | 8,095 | 5,767 | 6,375 | 6,744 | |||||||||||||||
Income Tax Expense
|
2,886 | 2,293 | 1,051 | 1,474 | 2,056 | |||||||||||||||
Net Income
|
$ | 8,417 | $ | 5,802 | $ | 4,716 | $ | 4,901 | $ | 4,688 | ||||||||||
Per Share Data:
|
||||||||||||||||||||
Net Income – basic
|
$ | 2.40 | $ | 1.82 | $ | 1.88 | $ | 1.96 | $ | 1.91 | ||||||||||
Net Income - diluted
|
$ | 2.25 | $ | 1.80 | $ | - | $ | - | $ | - | ||||||||||
Dividends Declared
|
.73 | .68 | .68 | .64 | .60 | |||||||||||||||
Book Value per Common Share
|
22.38 | 20.77 | 21.56 | 19.76 | 18.53 | |||||||||||||||
Balance Sheet Data:
|
||||||||||||||||||||
Assets
|
$ | 665,357 | $ | 605,308 | $ | 552,788 | $ | 596,904 | $ | 566,734 | ||||||||||
Loans Held for Investment
|
544,053 | 518,202 | 478,453 | 465,819 | 451,570 | |||||||||||||||
Loans Held for Sale
|
57,806 | 13,382 | 3,804 | 77,207 | 60,543 | |||||||||||||||
Securities
|
25,329 | 22,305 | 38,486 | 18,807 | 22,108 | |||||||||||||||
Deposits
|
494,670 | 491,505 | 464,149 | 453,796 | 435,947 | |||||||||||||||
Short-Term Debt
|
24,954 | 14,358 | 3,423 | 34,597 | 18,539 | |||||||||||||||
Long-Term Debt
|
48,161 | 9,875 | 21,691 | 47,905 | 57,298 | |||||||||||||||
Stockholders’ Equity
|
82,950 | 77,798 | 54,141 | 49,384 | 46,180 | |||||||||||||||
Average Common Shares Outstanding – basic
|
3,291 | 3,119 | 2,504 | 2,496 | 2,450 | |||||||||||||||
Average Common Shares Outstanding – diluted
|
3,735 | 3,230 | - | - | - | |||||||||||||||
Financial Ratios:
|
||||||||||||||||||||
Return on Average Assets1
|
1.31 | % | 1.00 | % | .82 | % | .86 | % | .84 | % | ||||||||||
Return on Average Equity1
|
10.46 | % | 8.65 | % | 9.11 | % | 10.26 | % | 10.41 | % | ||||||||||
Net Interest Margin
|
4.43 | % | 4.30 | % | 4.02 | % | 3.95 | % | 3.87 | % | ||||||||||
Efficiency Ratio 2
|
58.96 | % | 58.51 | % | 58.15 | % | 54.03 | % | 55.43 | % | ||||||||||
Dividend Payout Ratio - Common
|
30.42 | % | 37.36 | % | 36.17 | % | 32.65 | % | 31.41 | % | ||||||||||
Capital and Credit Quality Ratios:
|
||||||||||||||||||||
Average Equity to Average Assets1
|
12.49 | % | 11.59 | % | 9.00 | % | 8.35 | % | 8.14 | % | ||||||||||
Allowance for Loan Losses to Loans3
|
1.61 | % | 1.68 | % | 1.71 | % | 1.75 | % | 1.54 | % | ||||||||||
Nonperforming Loans to Total Assets4
|
.98 | % | 1.15 | % | 2.28 | % | 2.24 | % | 2.61 | % | ||||||||||
Nonperforming Assets to Total Assets5
|
1.34 | % | 1.73 | % | 2.75 | % | 2.73 | % | 3.15 | % | ||||||||||
Net Charge-offs to Total Loans3
|
.04 | % | .33 | % | .78 | % | .64 | % | .63 | % |
1
|
Ratios are primarily based on daily average balances.
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2
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The Efficiency Ratio equals noninterest expenses divided by the sum of tax equivalent net interest income and noninterest income. Noninterest expenses exclude intangible asset amortization. Noninterest income excludes gains (losses) on securities transactions and LIH Partnership losses.
|
3
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Calculated based on Loans Held for Investment, excludes Loans Held for Sale.
|
4
|
Calculated based on 90 day past due and non-accrual to Total Assets.
|
5
|
Calculated based on 90 day past due, non-accrual and OREO to Total Assets
|
2015
|
2014
|
|||||||
to 2014
|
to 2013
|
|||||||
Prior Year Net Income Per Common Share
|
$ | 1.82 | $ | 1.88 | ||||
Change from differences in:
|
||||||||
Net interest income
|
1.02 | .77 | ||||||
Provision for credit losses
|
.59 | .61 | ||||||
Noninterest income, excluding securities gains
|
.08 | (.18 | ) | |||||
Noninterest expenses
|
(.71 | ) | (.37 | ) | ||||
Income taxes
|
(.18 | ) | (.40 | ) | ||||
Effect of common stock raise
|
- | (.49 | ) | |||||
Effect of preferred stock dividend
|
(.12 | ) | - | |||||
Effect of increase in average shares outstanding
|
(.10 | ) | - | |||||
Total Change
|
.58 | (.06 | ) | |||||
Net Income Per Common Share
|
$ | 2.40 | $ | 1.82 |
2015
|
2014
|
2013
|
||||||||||||||||||||||||||||||||||
Balance
|
Interest
|
Rate
|
Balance
|
Interest
|
Rate
|
Balance
|
Interest
|
Rate
|
||||||||||||||||||||||||||||
ASSETS
|
||||||||||||||||||||||||||||||||||||
Loans2
|
||||||||||||||||||||||||||||||||||||
Commercial
|
$ | 170,272 | $ | 8,103 | 4.76 | % | $ | 164,666 | $ | 7,810 | 4.74 | % | $ | 169,431 | $ | 7,896 | 4.66 | % | ||||||||||||||||||
Real estate
|
295,892 | 14,976 | 5.06 | % | 281,052 | 14,542 | 5.17 | % | 268,902 | 14,796 | 5.50 | % | ||||||||||||||||||||||||
Installment
|
65,870 | 4,981 | 7.56 | % | 50,695 | 3,960 | 7.81 | % | 33,625 | 2,467 | 7.34 | % | ||||||||||||||||||||||||
Loans held for investment4
|
532,034 | 28,060 | 5.27 | % | 496,413 | 26,312 | 5.30 | % | 471,958 | 25,159 | 5.33 | % | ||||||||||||||||||||||||
Loans held for sale
|
40,450 | 1,099 | 2.72 | % | 9,072 | 312 | 3.44 | % | 21,298 | 648 | 3.04 | % | ||||||||||||||||||||||||
Investment securities3
|
||||||||||||||||||||||||||||||||||||
Fully taxable
|
17,372 | 303 | 1.74 | % | 13,392 | 205 | 1.53 | % | 11,718 | 194 | 1.66 | % | ||||||||||||||||||||||||
Partially taxable
|
125 | - | .- | 116 | - | .- | 107 | - | .- | |||||||||||||||||||||||||||
Tax exempt
|
- | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Total investment securities
|
17,497 | 303 | 1.74 | % | 13,508 | 205 | 1.53 | % | 11,825 | 194 | 1.66 | % | ||||||||||||||||||||||||
Interest bearing deposits in banks
|
1,223 | - | - | 896 | - | - | 1,084 | 4 | .37 | % | ||||||||||||||||||||||||||
Federal funds sold
|
9,310 | 21 | .23 | % | 20,602 | 44 | .21 | % | 23,094 | 50 | .22 | % | ||||||||||||||||||||||||
Total Earning Assets
|
600,514 | 29,483 | 4.91 | % | 540,491 | 26,873 | 4.97 | % | 529,259 | 26,055 | 4.92 | % | ||||||||||||||||||||||||
Allowance for loan losses
|
(8,933 | ) | (8,476 | ) | (8,384 | ) | ||||||||||||||||||||||||||||||
Nonearning assets
|
52,378 | 47,036 | 48,565 | |||||||||||||||||||||||||||||||||
Total Assets
|
$ | 643,959 | $ | 579,051 | $ | 569,440 | ||||||||||||||||||||||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||||||||||||||||||||||||||||||
Deposits
|
||||||||||||||||||||||||||||||||||||
Demand –interest bearing
|
$ | 112,334 | $ | 539 | .48 | % | $ | 117,396 | $ | 664 | .57 | % | $ | 120,482 | $ | 792 | .66 | % | ||||||||||||||||||
Savings
|
76,491 | 212 | .28 | % | 60,460 | 122 | .20 | % | 52,714 | 119 | .23 | % | ||||||||||||||||||||||||
Time deposits
|
171,829 | 1,402 | .82 | % | 195,933 | 1,704 | .87 | % | 198,786 | 2,331 | 1.17 | % | ||||||||||||||||||||||||
Total interest bearing deposits
|
360,654 | 2,153 | .60 | % | 373,789 | 2,490 | .67 | % | 371,982 | 3,242 | .87 | % | ||||||||||||||||||||||||
Short-term debt
|
32,017 | 69 | .22 | % | 3,872 | 9 | .23 | % | 6,171 | 24 | .39 | % | ||||||||||||||||||||||||
Long-term debt
|
31,856 | 654 | 2.05 | % | 21,501 | 1,149 | 5.34 | % | 36,280 | 1,507 | 4.15 | % | ||||||||||||||||||||||||
Total interest bearing liabilities
|
424,527 | 2,876 | .68 | % | 399,162 | 3,648 | .91 | % | 414,433 | 4,773 | 1.15 | % | ||||||||||||||||||||||||
Noninterest bearing deposits
|
125,665 | 107,647 | 90,170 | |||||||||||||||||||||||||||||||||
Other liabilities
|
13,318 | 5,134 | 13,074 | |||||||||||||||||||||||||||||||||
Total liabilities
|
563,510 | 511,943 | 517,677 | |||||||||||||||||||||||||||||||||
Stockholders’ equity
|
80,449 | 67,108 | 51,763 | |||||||||||||||||||||||||||||||||
Total liabilities and stockholders’ equity
|
$ | 643,959 | $ | 579,051 | $ | 569,440 | ||||||||||||||||||||||||||||||
Net interest earnings
|
$ | 26,607 | $ | 23,225 | $ | 21,282 | ||||||||||||||||||||||||||||||
Net yield on interest earning assets (NIM)
|
4.43 | % | 4.30 | % | 4.02 | % | ||||||||||||||||||||||||||||||
|
1
|
Income and yields are presented on a tax-equivalent basis using the applicable federal income tax rate.
|
|
2
|
Interest income on loans includes loan fees.
|
|
3
|
Average balance information is reflective of historical cost and has not been adjusted for changes in market value.
|
|
4
|
Includes nonaccrual loans.
|
2015 Compared to 2014
|
2014 Compared to 2013
|
|||||||||||||||||||||||
Increase (Decrease)
|
Increase (Decrease)
|
|||||||||||||||||||||||
Due to Change
|
Increase
|
Due to Change
|
Increase
|
|||||||||||||||||||||
in Average:
|
Or
|
in Average:
|
or
|
|||||||||||||||||||||
Volume
|
Rate
|
(Decrease)
|
Volume
|
Rate
|
(Decrease)
|
|||||||||||||||||||
Interest income
|
||||||||||||||||||||||||
Loans held for investment
|
$ | 1,888 | $ | (140 | ) | $ | 1,748 | $ | 1,303 | $ | (150 | ) | $ | 1,153 | ||||||||||
Loans held for sale
|
1,079 | (292 | ) | 787 | (372 | ) | 36 | (336 | ) | |||||||||||||||
Investment securities
|
||||||||||||||||||||||||
Taxable
|
61 | 37 | 98 | 28 | (17 | ) | 11 | |||||||||||||||||
Partially taxable
|
- | - | - | - | - | - | ||||||||||||||||||
Tax exempt
|
- | - | - | - | - | - | ||||||||||||||||||
Interest bearing deposits in banks
|
- | - | - | (1 | ) | (3 | ) | (4 | ) | |||||||||||||||
Federal funds sold
|
(24 | ) | 1 | (23 | ) | (5 | ) | (1 | ) | (6 | ) | |||||||||||||
Total Interest Income
|
3,004 | (394 | ) | 2,610 | 953 | (135 | ) | 818 | ||||||||||||||||
Interest expense
|
||||||||||||||||||||||||
Deposits
|
||||||||||||||||||||||||
Demand
|
(29 | ) | (96 | ) | (125 | ) | (20 | ) | (108 | ) | (128 | ) | ||||||||||||
Savings
|
32 | 58 | 90 | 18 | (15 | ) | 3 | |||||||||||||||||
Time deposits
|
(210 | ) | (92 | ) | (302 | ) | (33 | ) | (594 | ) | (627 | ) | ||||||||||||
Short-term debt
|
65 | (5 | ) | 60 | (9 | ) | (6 | ) | (15 | ) | ||||||||||||||
Long-term debt
|
553 | (1,048 | ) | (495 | ) | (613 | ) | 255 | (358 | ) | ||||||||||||||
Total Interest Expense
|
411 | (1,183 | ) | (772 | ) | (657 | ) | (468 | ) | (1,125 | ) | |||||||||||||
Net Interest Income
|
$ | 2,593 | $ | 789 | $ | 3,382 | $ | 1 ,610 | $ | 333 | $ | 1,943 |
GAAP Financial Measurements:
(Dollars in thousands).
|
2015
|
2014
|
2013
|
|||||||||
Interest Income – Loans
|
$ | 29,029 | $ | 26,522 | $ | 25,718 | ||||||
Interest Income - Securities and Other Interest-Earnings Assets
|
324 | 249 | 248 | |||||||||
Interest Expense – Deposits
|
2,153 | 2,490 | 3,242 | |||||||||
Interest Expense - Other Borrowings
|
723 | 1,158 | 1,531 | |||||||||
Total Net Interest Income
|
26,477 | 23,123 | 21,193 | |||||||||
Non-GAAP Financial Measurements:
|
||||||||||||
Add: Tax Benefit on Tax-Exempt Interest Income – Loans
|
130 | 102 | 89 | |||||||||
Add: Tax Benefit on Tax-Exempt Interest Income - Securities and Other Interest-Earnings Assets
|
- | - | - | |||||||||
Total Tax Benefit on Tax-Exempt Interest Income
|
130 | 102 | 89 | |||||||||
Tax-Equivalent Net Interest Income
|
$ | 26,607 | $ | 23,225 | $ | 21,282 |
(Dollars in thousands)
|
2015
|
2014
|
2013
|
|||||||||
Available for Sale1
|
||||||||||||
U.S. Treasury, Agency and Government Sponsored Enterprises (GSE)
|
$ | 12,095 | $ | 12,058 | $ | 29,065 | ||||||
Mortgage-backed2
|
817 | 1,022 | 1,201 | |||||||||
Marketable equity securities
|
135 | 135 | - | |||||||||
Total
|
13,047 | 13,215 | 30,266 | |||||||||
Held to Maturity
|
||||||||||||
U.S. Treasury and Agency
|
125 | 125 | 106 | |||||||||
Total
|
125 | 125 | 106 | |||||||||
Other Equity Investments
|
12,157 | 8,965 | 8,114 | |||||||||
Total Securities
|
$ | 25,329 | $ | 22,305 | $ | c38,486 |
Less
|
One to
|
Five to
|
Over
|
|||||||||||||||||||||||||||||||||||||
Than one Year
|
Five Years
|
Ten Years
|
Ten Years
|
|||||||||||||||||||||||||||||||||||||
(Dollars in thousands)
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
Total
|
Yield
|
||||||||||||||||||||||||||||||
Debt Securities Available for Sale
|
||||||||||||||||||||||||||||||||||||||||
U.S. Treasury, Agency & GSE
|
$ | 4,075 | .99 | % | $ | 8,020 | .78 | % | $ | - | $ | - |
|
$ | 12,095 | .85 | % | |||||||||||||||||||||||
Mortgage-backed
|
817 | 2.35 | % | 817 | 2.35 | % | ||||||||||||||||||||||||||||||||||
Marketable equities
|
- | - | - | 135 | 135 | |||||||||||||||||||||||||||||||||||
Total
|
$ | 4,075 | .99 | % | $ | 8,020 | .78 | % | $ | - | $ | 952 | 2.29 | % | $ | 13,047 | .94 | % | ||||||||||||||||||||||
Debt Securities Held to Maturity
|
||||||||||||||||||||||||||||||||||||||||
U.S. Treasury & Agency
|
$ | 125 | .28 | % | $ | 125 | .28 | % | ||||||||||||||||||||||||||||||||
Total
|
$ | 125 | .28 | % | $ | 125 | .28 | % |
December 31
|
||||||||||||||||||||
(Dollars in thousands)
|
2015
|
2014
|
2013
|
2012
|
2011
|
|||||||||||||||
Real estate – mortgage
|
$ | 232,321 | $ | 223,824 | $ | 212,630 | $ | 204,812 | $ | 193,280 | ||||||||||
Real estate – construction
|
69,759 | 67,180 | 68,512 | 71,251 | 72,224 | |||||||||||||||
Consumer installment
|
62,239 | 49,615 | 30,643 | 15,753 | 13,015 | |||||||||||||||
Commercial
|
153,691 | 147,599 | 135,835 | 147,089 | 141,014 | |||||||||||||||
Agricultural
|
15,672 | 15,374 | 16,265 | 14,099 | 15,985 | |||||||||||||||
Multi-family residential
|
7,559 | 11,775 | 11,797 | 9,357 | 13,157 | |||||||||||||||
Credit cards
|
2,745 | 2,705 | 2,680 | 2,788 | 2,812 | |||||||||||||||
Other
|
67 | 130 | 91 | 670 | 83 | |||||||||||||||
Total Loans
|
$ | 544,053 | $ | 518,202 | $ | 478,453 | $ | 465,819 | $ | 451,570 |
Less Than
|
1-5 |
Over
|
||||||||||||||
(Dollars in thousands)
|
1 Year
|
Years
|
5 Years
|
Total
|
||||||||||||
Commercial and
|
||||||||||||||||
agricultural loans
|
$ | 42,132 | $ | 113,729 | $ | 13,503 | $ | 169,364 | ||||||||
Multi-family residential
|
2,078 | 4,883 | 597 | 7,558 | ||||||||||||
Real Estate – mortgage
|
84,888 | 147,124 | 309 | 232,321 | ||||||||||||
Real Estate – construction
|
53,860 | 15,479 | 420 | 69,759 | ||||||||||||
Consumer – installment/other
|
7,519 | 45,811 | 11,721 | 65,051 | ||||||||||||
Total
|
$ | 190,477 | $ | 327,026 | $ | 26,550 | $ | 544,053 | ||||||||
Loans with predetermined rates
|
$ | 28,667 | $ | 60,484 | $ | 15,062 | $ | 104,213 | ||||||||
Loans with variable or
|
||||||||||||||||
adjustable rates
|
161,810 | 266,542 | 11,488 | 439,840 | ||||||||||||
Total
|
$ | 190,477 | $ | 327,026 | $ | 26,550 | $ | 544,053 |
(Dollars in thousands)
|
2015
|
2014
|
2013
|
2012
|
2011
|
|||||||||||||||
Nonaccrual Loans:
|
||||||||||||||||||||
Real Estate - 2011 includes $1,040 of restructured loans
|
$ | 5,698 | $ | 5,481 | $ | 9,963 | $ | 9,611 | $ | 7,671 | ||||||||||
Commercial - 2011 includes $309 of restructured loans
|
109 | 1,179 | 1,890 | 2,914 | 5,888 | |||||||||||||||
Home Equity
|
40 | 153 | 402 | 740 | 266 | |||||||||||||||
Other
|
108 | 161 | - | 121 | 39 | |||||||||||||||
Loans past due 90 days or more:
|
||||||||||||||||||||
Real Estate
|
272 | 0 | 246 | - | 646 | |||||||||||||||
Commercial
|
25 | 0 | 4 | - | - | |||||||||||||||
Home Equity
|
107 | 0 | 61 | - | 260 | |||||||||||||||
Other
|
167 | 1 | 16 | - | 6 | |||||||||||||||
Total Nonperforming loans
|
$ | 6,526 | $ | 6,975 | $ | 12,582 | $ | 13,386 | $ | 14,776 | ||||||||||
Restructured Loans current and performing:
|
||||||||||||||||||||
Real Estate
|
8,713 | 3,913 | 7,484 | 6,572 | 4,335 | |||||||||||||||
Commercial
|
1,463 | 518 | 3,989 | 3,753 | 1,292 | |||||||||||||||
Home Equity
|
1,414 | 290 | 727 | 450 | 451 | |||||||||||||||
Other
|
91 | 22 | - | - | - | |||||||||||||||
Nonperforming loans as a percentage of loans held for investment
|
1.20 | % | 1.35 | % | 2.63 | % | 2.87 | % | 3.27 | % | ||||||||||
Net Charge Offs to Total Loans Held for Investment(1)
|
0.04 | % | 0.33 | % | 0.78 | % | 0.64 | % | 0.63 | % | ||||||||||
Allowance for loan and lease losses to nonperforming loans
|
134.55 | % | 125.09 | % | 65.04 | % | 60.91 | % | 46.95 | % |
(Dollars in thousands)
|
2015
|
2014
|
2013
|
2012
|
2011
|
|||||||||||||||
Balance at beginning of period
|
$ | 8,725 | $ | 8,184 | $ | 8,154 | $ | 6,937 | $ | 5,786 | ||||||||||
Provision charged to expenses
|
300 | 2,250 | 3,775 | 4,200 | 4,000 | |||||||||||||||
Loan losses:
|
||||||||||||||||||||
Construction/land development
|
156 | 1,611 | 2,127 | 1,480 | 1,263 | |||||||||||||||
Farmland
|
- | - | - | - | - | |||||||||||||||
Real Estate
|
25 | 208 | 173 | 482 | 474 | |||||||||||||||
Multi-family
|
- | - | - | - | - | |||||||||||||||
Commercial Real Estate
|
- | - | 201 | 424 | 381 | |||||||||||||||
Home Equity – closed end
|
26 | - | 159 | 69 | 222 | |||||||||||||||
Home Equity – open end
|
51 | 80 | 68 | - | 83 | |||||||||||||||
Commercial & Industrial – Non Real Estate
|
- | 385 | 986 | 776 | 423 | |||||||||||||||
Consumer
|
32 | 33 | 173 | 45 | 90 | |||||||||||||||
Dealer Finance
|
251 | 107 | 17 | - | - | |||||||||||||||
Credit Cards
|
60 | 46 | 121 | 71 | 106 | |||||||||||||||
Total loan losses
|
601 | 2,470 | 4,025 | 3,347 | 3,042 | |||||||||||||||
Recoveries:
|
||||||||||||||||||||
Construction/land development
|
85 | 223 | 40 | 192 | - | |||||||||||||||
Farmland
|
- | - | - | 3 | - | |||||||||||||||
Real Estate
|
37 | - | - | - | 8 | |||||||||||||||
Multi-family
|
- | - | - | - | 48 | |||||||||||||||
Commercial Real Estate
|
65 | 108 | 42 | 48 | 16 | |||||||||||||||
Home Equity – closed end
|
6 | - | - | - | 3 | |||||||||||||||
Home Equity – open end
|
- | - | 29 | - | 27 | |||||||||||||||
Commercial & Industrial – Non Real Estate
|
62 | 356 | 127 | 62 | 24 | |||||||||||||||
Consumer
|
32 | 33 | 14 | 27 | 42 | |||||||||||||||
Dealer Finance
|
24 | 6 | - | - | - | |||||||||||||||
Credit Cards
|
46 | 35 | 28 | 32 | 25 | |||||||||||||||
Total recoveries
|
357 | 761 | 280 | 364 | 193 | |||||||||||||||
Net loan losses
|
(244 | ) | (1,709 | ) | (3,745 | ) | (2,983 | ) | (2,849 | ) | ||||||||||
Balance at end of period
|
$ | 8,781 | $ | 8,725 | $ | 8,184 | $ | 8,154 | $ | 6,937 | ||||||||||
Allowance for loan losses as a
|
||||||||||||||||||||
percentage of loans
|
1.61 | % | 1.68 | % | 1.71 | % | 1.75 | % | 1.54 | % | ||||||||||
Net loan losses to loans held for investment
|
.04 | % | .33 | % | .78 | % | .64 | % | .63 | % |
ALLOCATION OF THE ALLOWANCE FOR LOAN LOSSES
|
||||||||||||||||||||||||||||||||||||||||
2015
|
2014
|
2013
|
2012* | 2011* | ||||||||||||||||||||||||||||||||||||
Allowance for loan losses:
(in thousands)
|
Balance
|
Percentage of Loans in Each Category
|
Balance
|
Percentage of Loans in Each Category
|
Balance
|
Percentage of Loans in Each Category
|
Balance
|
Percentage of Loans in Each Category
|
Balance
|
Percentage of Loans in Each Category
|
||||||||||||||||||||||||||||||
Construction/Land Development
|
$ | 4,442 | 50.59 | % | $ | 4,738 | 54.30 | % | $ | 4,007 | 45.93 | % | $ | 2,771 | 33.86 | % | $ | - | - | |||||||||||||||||||||
Real Estate
|
806 | 9.18 | % | 623 | 7.14 | % | 400 | 4.58 | % | 924 | 11.29 | % | - | - | ||||||||||||||||||||||||||
Commercial, Financial and Agricultural
|
1,666 | 18.97 | % | 1,337 | 15.33 | % | 2,239 | 25.66 | % | 3,187 | 38.94 | % | 2,984 | 36.60 | % | |||||||||||||||||||||||||
Consumer
|
1,059 | 12.06 | % | 1,685 | 19.31 | % | 905 | 10.37 | % | 253 | 3.09 | % | 298 | 3.65 | % | |||||||||||||||||||||||||
Home Equity
|
808 | 9.20 | % | 342 | 3.92 | % | 633 | 7.26 | % | 1,019 | 12.45 | % | 920 | 11.28 | % | |||||||||||||||||||||||||
Total
|
$ | 8,781 | 100.00 | % | $ | 8,725 | 100.00 | % | $ | 8,184 | 93.80 | % | $ | 8,154 | 99.63 | % | $ | 6,937 | 85.07 | % | ||||||||||||||||||||
* Allocation detail for Construction/Land Development verses Real Estate is not readily available.
|
December 31,
|
||||||||||||||||||||||||
2015
|
2014
|
2013
|
||||||||||||||||||||||
Amount
|
Rate
|
Amount
|
Rate
|
Amount
|
Rate
|
|||||||||||||||||||
Noninterest-bearing
|
$ | 125,665 | $ | 107,647 | $ | 90,170 | ||||||||||||||||||
Interest-bearing:
|
||||||||||||||||||||||||
Interest Checking
|
$ | 112,334 | .48 | % | $ | 117,396 | .57 | % | $ | 120,482 | .66 | % | ||||||||||||
Savings Accounts
|
76,491 | .28 | % | 60,460 | .20 | % | 52,714 | .23 | % | |||||||||||||||
Time Deposits:
|
||||||||||||||||||||||||
CDARS
|
11,247 | .18 | % | 19,771 | .21 | % | 8,581 | .53 | % | |||||||||||||||
$100,000 or more
|
66,719 | .55 | % | 74,743 | .61 | % | 69,130 | .87 | % | |||||||||||||||
Less than $100,000
|
93,863 | 1.08 | % | 101,419 | 1.19 | % | 121,075 | 1.39 | % | |||||||||||||||
Total Interest-bearing
|
360,654 | .60 | % | 373,789 | .67 | % | 371,982 | .87 | % | |||||||||||||||
Total deposits
|
$ | 486,319 | .44 | % | $ | 481,436 | .52 | % | $ | 462,152 | .70 | % |
(Actual Dollars in thousands)
|
2015
|
2014
|
||||||
Less than 3 months
|
$ | 5,238 | $ | 32,378 | ||||
3 to 6 months
|
12,478 | 6,915 | ||||||
6 to 12 months
|
8,008 | 7,439 | ||||||
1 year to 5 years
|
27,901 | 33,080 | ||||||
Total
|
$ | 53,625 | $ | 79,812 |
December 31, 2015
|
||||||||||||||||||||
Less than
|
One Year Through
|
Three Years Through
|
More than
|
|||||||||||||||||
One Year
|
Three Years
|
Five Years
|
Five Years
|
Total
|
||||||||||||||||
Securities sold under agreements to repurchase
|
$ | 3,995 | $ | - | $ | - | $ | - | $ | 3,995 | ||||||||||
FHLB Short term advances
|
20,000 | - | - | - | 20,000 | |||||||||||||||
Federal Funds Purchased
|
959 | - | - | - | 959 | |||||||||||||||
FHLB long term advances
|
3,929 | 12,857 | 20,357 | 11,018 | 48,161 | |||||||||||||||
Subordinated Debt
|
- | - | - | - | - | |||||||||||||||
Total
|
$ | 28,883 | $ | 12,857 | $ | 20,357 | $ | 11,018 | $ | 73,115 |
1-90 | 91-365 | 1-5 |
Over 5
|
Not
|
||||||||||||||||||||
(Dollars in thousands)
|
Days
|
Days
|
Years
|
Years
|
Classified
|
Total
|
||||||||||||||||||
Rate Sensitive Assets:
|
||||||||||||||||||||||||
Loans held for investment
|
$ | 122,425 | $ | 65,307 | $ | 327,026 | $ | 26,550 | $ | - | $ | 541,308 | ||||||||||||
Loans held for sale
|
57,806 | - | - | - | - | 57,806 | ||||||||||||||||||
Federal funds sold
|
- | - | - | - | - | - | ||||||||||||||||||
Investment securities
|
125 | 4,075 | 8,020 | 817 | 135 | 13,172 | ||||||||||||||||||
Credit Cards
|
2,745 | - | - | - | - | 2,745 | ||||||||||||||||||
Interest bearing bank deposits
|
1,596 | - | - | - | - | 1,596 | ||||||||||||||||||
Total
|
184,697 | 69,382 | 335,046 | 27,367 | 135 | 616,627 | ||||||||||||||||||
Rate Sensitive Liabilities:
|
||||||||||||||||||||||||
Interest bearing demand deposits
|
- | 29,783 | 62,379 | 16,298 | - | 108,460 | ||||||||||||||||||
Savings deposits
|
- | 18,076 | 54,230 | 18,077 | - | 90,383 | ||||||||||||||||||
Certificates of deposit $100,000 and over
|
5,239 | 20,486 | 27,900 | - | - | 53,625 | ||||||||||||||||||
Other certificates of deposit
|
14,683 | 40,827 | 51,905 | - | - | 107,415 | ||||||||||||||||||
Total Deposits
|
19,922 | 109,172 | 196,414 | 34,375 | - | 359,883 | ||||||||||||||||||
Short-term debt
|
24,954 | - | - | - | - | 24,954 | ||||||||||||||||||
Long-term debt
|
982 | 2,947 | 33,214 | 11,018 | - | 48,161 | ||||||||||||||||||
Total
|
45,858 | 112,119 | 229,628 | 45,393 | - | 432,998 | ||||||||||||||||||
Discrete Gap
|
138,839 | (42,737 | ) | 105,418 | (18,026 | ) | 135 | 183,629 | ||||||||||||||||
Cumulative Gap
|
138,839 | 96,102 | 201,520 | 183,494 | 183,629 | |||||||||||||||||||
As a % of Earning Assets
|
22.52 | % | 15.59 | % | 32.68 | % | 29.76 | % | 29.78 | % |
·
|
In preparing the above table, no assumptions are made with respect to loan prepayments or deposit run off. Loan principal payments are included in the earliest period in which the loan matures or can be repriced. Principal payments on installment loans scheduled prior to maturity are included in the period of maturity or repricing. Proceeds from the redemption of investments and deposits are included in the period of maturity. Estimated maturities on deposits which have no stated maturity dates were derived from guidance contained in FDICIA 305.
|
2015 | ||||||||||||||||||||
(Dollars in thousands)
|
Fourth
|
Third | Second | First | Total | |||||||||||||||
Interest and Dividend Income
|
$ | 7,518 | $ | 7,451 | $ | 7,373 | $ | 7,011 | $ | 29,353 | ||||||||||
Interest Expense
|
771 | 722 | 698 | 685 | 2,876 | |||||||||||||||
Net Interest Income
|
6,747 | 6,729 | 6,675 | 6,326 | 26,477 | |||||||||||||||
Provision for Loan Losses
|
- | - | - | 300 | 300 | |||||||||||||||
Net Interest Income after Provision, For Loan Losses
|
6,747 | 6,729 | 6,675 | 6,026 | 26,177 | |||||||||||||||
Non-Interest Income
|
813 | 797 | 783 | 719 | 112 | |||||||||||||||
Non-Interest Expense
|
4,614 | 4,494 | 4,496 | 4,382 | 17,986 | |||||||||||||||
Income before taxes
|
2,946 | 3,032 | 2,962 | 2,363 | 11,303 | |||||||||||||||
Income Tax Expense
|
766 | 842 | 786 | 492 | 2,886 | |||||||||||||||
Net Income
|
$ | 2,180 | $ | 2,190 | $ | 2,176 | $ | 1,871 | $ | 8,417 | ||||||||||
Net Income Per Average Common Share
|
$ | .62 | $ | .63 | $ | .62 | $ | .53 | $ | 2.40 |
2014 | ||||||||||||||||||||
(Dollars in thousands)
|
Fourth
|
Third | Second | First | Total | |||||||||||||||
Interest and Dividend Income
|
$ |
6,934
|
$ |
6,873
|
$ |
6,674
|
$ |
6,291
|
$ |
26,772
|
||||||||||
Interest Expense
|
871
|
908
|
919
|
950
|
3,648
|
|||||||||||||||
Net Interest Income
|
6,063
|
5,965
|
5,755
|
5,341
|
23,124
|
|||||||||||||||
Provision for Loan Losses
|
- |
750
|
750
|
750
|
2,250
|
|||||||||||||||
Net Interest Income after Provision, For Loan Losses
|
6,063
|
5,215
|
5,005
|
4,591
|
20,874
|
|||||||||||||||
Non-Interest Income
|
780
|
789
|
738
|
570
|
2,877
|
|||||||||||||||
Non-Interest Expense
|
4,194
|
3,923
|
3,801
|
3,738
|
15,656
|
|||||||||||||||
Income before taxes
|
2,649
|
2,081
|
1,942
|
1,423
|
8,095
|
|||||||||||||||
Income Tax Expense
|
1,057
|
520
|
446
|
270
|
2,293
|
|||||||||||||||
Net Income
|
$ |
1,592
|
$ |
1,561
|
$ |
1,496
|
$ |
1,153
|
$ |
5,802
|
||||||||||
Net Income Per Average Common Share
|
$ | .43 | $ | .48 | $ |
.45
|
$ |
.46
|
$ |
1.82
|
2015
|
2014
|
|||||||
Assets
|
||||||||
Cash and due from banks (notes 3 and 15)
|
$ | 6,923,065 | $ | 6,241,016 | ||||
Money market funds
|
1,596,382 | 910,527 | ||||||
Federal funds sold
|
- | 16,051,000 | ||||||
Cash and cash equivalents
|
8,519,447 | 23,202,543 | ||||||
Securities:
|
||||||||
Held to maturity - fair value of $125,043 and $125,150 in 2015 and 2014, respectively (note 4)
|
125,043 | 125,150 | ||||||
Available for sale (note 4)
|
13,046,945 | 13,215,112 | ||||||
Other investments (note 4)
|
12,157,115 | 8,964,640 | ||||||
Loans held for sale
|
57,805,529 | 13,381,941 | ||||||
Loans held for investment (notes 5)
|
544,053,477 | 518,201,574 | ||||||
Less: allowance for loan losses (note 6)
|
(8,781,453 | ) | (8,724,731 | ) | ||||
Net loans held for investment
|
535,272,024 | 509,476,843 | ||||||
Other real estate owned (note 9)
|
2,127,685 | 3,507,153 | ||||||
Bank premises and equipment, net (note 8)
|
7,542,078 | 6,458,254 | ||||||
Interest receivable
|
1,708,617 | 1,674,846 | ||||||
Goodwill (note 23)
|
2,669,517 | 2,669,517 | ||||||
Bank owned life insurance (note 24)
|
13,046,111 | 12,581,210 | ||||||
Other assets
|
11,336,735 | 10,050,893 | ||||||
Total Assets
|
$ | 665,356,846 | $ | 605,308,102 | ||||
Liabilities
|
||||||||
Deposits: (note 10)
|
||||||||
Noninterest bearing
|
$ | 134,786,875 | $ | 112,197,722 | ||||
Interest bearing:
|
||||||||
Demand
|
81,491,760 | 93,693,468 | ||||||
Money market accounts
|
26,967,837 | 25,900,061 | ||||||
Savings
|
90,383,486 | 64,249,199 | ||||||
Time deposits over $100,000
|
53,624,554 | 79,812,757 | ||||||
All other time deposits
|
107,415,244 | 115,651,329 | ||||||
Total deposits
|
494,669,756 | 491,504,536 | ||||||
Short-term debt (note 11)
|
24,954,051 | 14,358,492 | ||||||
Accrued liabilities
|
14,621,913 | 11,771,671 | ||||||
Federal Home Loan Bank debt (note 12)
|
48,160,714 | 9,875,000 | ||||||
Total Liabilities
|
582,406,434 | 527,509,699 | ||||||
Commitments and contingencies (notes 4 and 16)
|
||||||||
Stockholders’ Equity (Note 22)
|
||||||||
Preferred Stock $5 par value, 400,000 shares authorized, issued and outstanding for 2015
|
9,425,123 | 9,425,123 | ||||||
Common stock $5 par value, 6,000,000 shares authorized, 3,285,404 and 3,291,766
|
||||||||
shares issued and outstanding at December 31, 2015 and 2014, respectively
|
16,427,020 | 16,458,830 | ||||||
Additional paid in capital – common stock
|
11,149,104 | 11,259,995 | ||||||
Retained earnings (note 19)
|
48,056,300 | 42,554,421 | ||||||
Noncontrolling interest
|
572,680 | 426,365 | ||||||
Accumulated other comprehensive loss
|
(2,679,815 | ) | (2,326,331 | ) | ||||
Total Stockholders' Equity
|
82,950,412 | 77,798,403 | ||||||
Total Liabilities and Stockholders' Equity
|
$ | 665,356,846 | $ | 605,308,102 |
2015
|
2014
|
2013
|
||||||||||
Interest and Dividend Income
|
||||||||||||
Interest and fees on loans held for investment
|
$ | 27,930,151 | $ | 26,210,609 | $ | 25,070,039 | ||||||
Interest from loans held for sale
|
1,099,419 | 312,364 | 647,622 | |||||||||
Interest from deposits and federal funds sold
|
20,990 | 44,435 | 54,679 | |||||||||
Interest from debt securities
|
302,117 | 204,649 | 193,244 | |||||||||
Total interest and dividend Income
|
29,352,677 | 26,772,057 | 25,965,584 | |||||||||
Interest Expense
|
||||||||||||
Interest from demand deposits
|
539,469 | 663,618 | 791,245 | |||||||||
Interest from savings deposits
|
212,186 | 121,808 | 119,020 | |||||||||
Interest from time deposits over $100,000
|
485,285 | 589,673 | 781,950 | |||||||||
Interest from all other time deposits
|
916,219 | 1,114,470 | 1,549,273 | |||||||||
Total interest on deposits
|
2,153,159 | 2,489,569 | 3,241,488 | |||||||||
Interest from short-term debt
|
69,179 | 9,437 | 23,956 | |||||||||
Interest from long-term debt
|
653,271 | 1,148,716 | 1,507,299 | |||||||||
Total interest expense
|
2,875,609 | 3,647,722 | 4,772,743 | |||||||||
Net Interest Income
|
26,477,068 | 23,124,335 | 21,192,841 | |||||||||
Provision for Loan and Lease losses (note 6)
|
300,000 | 2,250,000 | 3,775,000 | |||||||||
Net Interest Income After Provision for Loan Losses
|
26,177,068 | 20,874,335 | 17,417,841 | |||||||||
Noninterest Income
|
||||||||||||
Service charges on deposit accounts
|
963,459 | 1,033,959 | 1,117,910 | |||||||||
Insurance and other commissions
|
1,058,281 | 635,543 | 868,464 | |||||||||
Other operating income
|
1,401,162 | 1,393,897 | 1,537,397 | |||||||||
Income from bank owned life insurance
|
473,098 | 466,936 | 508,658 | |||||||||
Low income housing partnership losses | (619,534 | ) | (608,360 | ) | (855,527 | ) | ||||||
Total noninterest income
|
3,276,466 | 2,921,975 | 3,176,902 | |||||||||
Noninterest Expenses
|
||||||||||||
Salaries
|
7,816,214 | 6,898,400 | 6,524,515 | |||||||||
Employee benefits (note 14)
|
2,239,258 | 1,911,250 | 2,146,871 | |||||||||
Occupancy expense
|
678,799 | 621,855 | 606,935 | |||||||||
Equipment expense
|
651,113 | 589,919 | 547,948 | |||||||||
FDIC insurance assessment
|
587,000 | 690,000 | 704,103 | |||||||||
Other real estate owned expenses
|
566,147 | 407,219 | 214,832 | |||||||||
Other operating expenses
|
5,447,347 | 4,537,269 | 3,974,791 | |||||||||
Total noninterest expenses
|
17,985,878 | 15,655,912 | 14,719,995 | |||||||||
Income before income taxes
|
11,467,656 | 8,140,398 | 5,874,748 | |||||||||
Income Tax Expense (note 13)
|
2,886,072 | 2,293,136 | 1,051,770 | |||||||||
Consolidated Net Income – F & M Bank Corp.
|
8,581,584 | 5,847,262 | 4,822,978 | |||||||||
Net Income attributed to Noncontrolling interest
|
(164,575 | ) | (45,653 | ) | (107,185 | ) | ||||||
Net Income-F & M Bank Corp.
|
$ | 8,417,009 | $ | 5,801,609 | $ | 4,715,793 | ||||||
Dividends paid/accumulated on preferred stock
|
510,000 | 127,500 | - | |||||||||
Net income available to common stockholders
|
$ | 7,907,009 | $ | 5,674,109 | $ | 4,715,793 | ||||||
Per Common Share Data
|
||||||||||||
Net income - basic
|
2.40 | 1.82 | 1.88 | |||||||||
Net income - diluted
|
2.25 | 1.80 | 1.88 | |||||||||
Cash dividends on common stock
|
.73 | .68 | .68 | |||||||||
Weighted average common shares outstanding – basic
|
3,290,812 | 3,119,333 | 2,504,015 | |||||||||
Weighted average common shares outstanding – diluted
|
3,735,212 | 3,229,942 | 2,504,015 |
|
Years Ended December 31,
|
|||||||||||
2015
|
2014
|
2013
|
||||||||||
Net Income:
|
||||||||||||
Net income – F & M Bank Corp
|
$ | 8,417,009 | $ | 5,801,609 | $ | 4,715,793 | ||||||
Net income attributable to noncontrolling interest
|
164,575 | 45,653 | 107,185 | |||||||||
Total net income
|
8,581,584 | 5,847,262 | 4,822,978 | |||||||||
Other comprehensive income (loss):
|
||||||||||||
Pension plan adjustment
|
(537,005 | ) | (2,145,868 | ) | 2,314,274 | |||||||
Tax effect
|
182,582 | 729,595 | (786,853 | ) | ||||||||
Pension plan adjustment, net of tax
|
(354,423 | ) | (1,416,273 | ) | 1,527,421 | |||||||
Unrealized holding gains (losses)
|
||||||||||||
on available-for-sale securities
|
1,423 | 22,386 | (75,127 | ) | ||||||||
Tax effect
|
(484 | ) | (7,611 | ) | 25,543 | |||||||
Unrealized holding gain (losses), net of tax
|
939 | 14,775 | (49,584 | ) | ||||||||
Other comprehensive income
|
(353,484 | ) | (1,401,498 | ) | 1,477,837 | |||||||
Total comprehensive income
|
$ | 8,228,100 | $ | 4,445,764 | $ | 6,300,815 |
|
Accumulated
|
|||||||||||||||||||||||||||
Other
|
||||||||||||||||||||||||||||
Comprehensive
|
||||||||||||||||||||||||||||
Preferred
|
Common
|
Additional Paid in
|
Retained
|
Noncontrolling
|
Income
|
|||||||||||||||||||||||
Stock
|
Stock
|
Capital
|
Earnings
|
Interest
|
(Loss)
|
Total
|
||||||||||||||||||||||
Balance December 31, 2012
|
$ | - | $ | 12,497,720 | $ | 2,951,967 | $ | 35,974,812 | $ | 362,131 | $ | (2,402,670 | ) | $ | 49,383,960 | |||||||||||||
Net income consolidated
|
4,715,793 | 107,185 | 4,822,978 | |||||||||||||||||||||||||
Other comprehensive income (loss)
|
1,477,837 | 1,477,837 | ||||||||||||||||||||||||||
Minority Interest Contributed Capital (Distributions)
|
(51,088 | ) | (51,088 | ) | ||||||||||||||||||||||||
Dividends on common stock
|
(1,705,881 | ) | (1,705,881 | ) | ||||||||||||||||||||||||
Common stock issued (12,141 shares)
|
60,955 | 152,474 | - | - | - | 213,429 | ||||||||||||||||||||||
Balance December 31, 2013
|
$ | - | $ | 12,558,675 | $ | 3,104,441 | $ | 38,984,724 | $ | 418,228 | $ | (924,833 | ) | $ | 54,141,235 | |||||||||||||
Net income consolidated
|
5,801,609 | 45,653 | 5,847,262 | |||||||||||||||||||||||||
Other comprehensive income (loss)
|
(1,401,498 | ) | (1,401,498 | ) | ||||||||||||||||||||||||
Minority Interest Contributed Capital (Distributions)
|
(37,516 | ) | (37,516 | ) | ||||||||||||||||||||||||
Dividends on preferred stock
|
(127,500 | ) | (127,500 | ) | ||||||||||||||||||||||||
Dividends on common stock
|
(2,104,412 | ) | (2,104,412 | ) | ||||||||||||||||||||||||
Preferred stock issued (400,000 shares)
|
9,425,123 | 9,425,123 | ||||||||||||||||||||||||||
Common Stock issued (780,031 shares)
|
- | 3,900,155 | 8,155,554 | - | - | - | 12,055,709 | |||||||||||||||||||||
Balance December 31, 2014
|
$ | 9,425,123 | $ | 16,458,830 | $ | 11,259,995 | $ | 42,554,421 | $ | 426,365 | $ | (2,326,331 | ) | $ | 77,798,403 | |||||||||||||
Net income consolidated
|
8,417,009 | 164,575 | 8,581,584 | |||||||||||||||||||||||||
Other comprehensive income (loss)
|
(353,484 | ) | (353,484 | ) | ||||||||||||||||||||||||
Minority Interest Distribution
|
(18,260 | ) | (18,260 | ) | ||||||||||||||||||||||||
Dividends on preferred stock
|
(510,000 | ) | (510,000 | ) | ||||||||||||||||||||||||
Dividends on common stock
|
(2,405,130 | ) | (2,405,130 | ) | ||||||||||||||||||||||||
Common stock repurchased (13,277 shares)
|
(66,390 | ) | (222,729 | ) | (289,119 | ) | ||||||||||||||||||||||
Common Stock issued (6,916 shares)
|
34,580 | 111,838 | - | - | - | 146,418 | ||||||||||||||||||||||
Balance December 31, 2015
|
$ | 9,425,123 | $ | 16,427,020 | $ | 11,149,104 | $ | 48,056,300 | $ | 572,680 | $ | (2,679,815 | ) | $ | 82,950,412 |
|
2015
|
2014
|
2013
|
|||||||||
Cash Flows from Operating Activities
|
||||||||||||
Net income
|
$ | 8,417,009 | $ | 5,801,609 | $ | 4,715,793 | ||||||
Adjustments to reconcile net income to net cash
|
||||||||||||
provided by (used in) operating activities:
|
||||||||||||
Depreciation
|
709,237 | 612,116 | 581,625 | |||||||||
Amortization of securities
|
147,407 | 76,057 | 45,416 | |||||||||
Sale of loans held for sale originated
|
75,364,878 | 56,210,640 | 79,778,381 | |||||||||
Loans held for sale originated
|
(77,151,936 | ) | (56,044,669 | ) | (71,169,362 | ) | ||||||
Provision for loan losses
|
300,000 | 2,250,000 | 3,775,000 | |||||||||
Benefit (expense) for deferred taxes
|
340,941 | (515,538 | ) | (568,858 | ) | |||||||
(Increase) decrease in interest receivable
|
(33,771 | ) | (176,734 | ) | 204,735 | |||||||
Increase in other assets
|
(457,010 | ) | (1,473,634 | ) | (967,516 | ) | ||||||
Increase in accrued expenses
|
1,480,074 | 1,159,913 | 1,731,973 | |||||||||
Amortization of limited partnership investments
|
627,326 | 608,360 | 581,737 | |||||||||
Loss on sale and valuation adjustments of other real estate owned
|
488,583 | 318,714 | 97,155 | |||||||||
Income from life insurance investment
|
(473,098 | ) | (466,936 | ) | (508,658 | ) | ||||||
Net Cash Provided by Operating Activities
|
9,759,640 | 8,359,898 | 18,297,421 | |||||||||
Cash Flows from Investing Activities
|
||||||||||||
Decrease in interest bearing bank deposits
|
- | - | 248,000 | |||||||||
Proceeds from maturities of securities available for sale
|
8,242,751 | 27,495,319 | 10,712,508 | |||||||||
Proceeds from maturities of securities held to maturity
|
- | 106,000 | ||||||||||
Purchases of securities available for sale
|
(12,040,262 | ) | (11,957,235 | ) | (31,093,384 | ) | ||||||
Purchases of securities held to maturity
|
- | (125,250 | ) | |||||||||
Net increase in loans held for investment
|
(25,892,052 | ) | (43,642,033 | ) | (17,149,156 | ) | ||||||
Net (increase) decrease in loans held for sale participations
|
(42,636,530 | ) | (9,743,487 | ) | 64,793,073 | |||||||
Net purchase of property and equipment
|
(1,793,061 | ) | (545,313 | ) | (661,621 | ) | ||||||
Proceeds from sale of other real estate owned
|
687,756 | 986,373 | 928,897 | |||||||||
Net Cash Provided by (Used in) Investing Activities
|
(73,431,398 | ) | (37,425,626 | ) | 27,778,317 | |||||||
Cash Flows from Financing Activities
|
||||||||||||
Net change in demand and savings deposits
|
37,589,508 | 27,894,981 | 15,867,944 | |||||||||
Net change in time deposits
|
(34,424,288 | ) | (539,689 | ) | (5,514,239 | ) | ||||||
Net change in short-term debt
|
10,595,559 | 10,935,414 | (31,174,274 | ) | ||||||||
Dividends paid in cash
|
(2,915,130 | ) | (2,231,912 | ) | (1,705,881 | ) | ||||||
Proceeds from long-term debt
|
40,000,000 | 10,000,000 | - | |||||||||
Proceeds from issuance of preferred stock
|
- | 6,831,123 | - | |||||||||
Proceeds from issuance of common stock
|
146,418 | 12,055,709 | 213,429 | |||||||||
Repurchase of common stock
|
(289,119 | ) | ||||||||||
Repayments of long-term debt
|
(1,714,286 | ) | (19,222,000 | ) | (26,214,286 | ) | ||||||
Net Cash Provided by (Used in) Financing Activities
|
48,988,662 | 45,723,626 | (48,527,307 | ) | ||||||||
Net Increase (Decrease) in Cash and Cash Equivalents
|
(14,683,096 | ) | 16,657,898 | (2,451,569 | ) | |||||||
Cash and Cash Equivalents, Beginning of Year
|
23,202,543 | 6,544,645 | 8,996,214 | |||||||||
Cash and Cash Equivalents, End of Year
|
$ | 8,519,447 | $ | 23,202,543 | $ | 6,544,645 | ||||||
Supplemental Disclosure:
|
||||||||||||
Cash paid for:
|
||||||||||||
Interest expense
|
$ | 2,854,119 | $ | 3,703,190 | $ | 6,500,592 | ||||||
Income taxes
|
1,500,000 | 1,607,000 | 800,000 | |||||||||
Transfers from loans to other real estate owned
|
125,000 | 2,914,958 | 1,337,890 | |||||||||
Loans originated for the sale of other real estate owned
|
(328,129 | ) | (780,097 | ) | (569,245 | ) | ||||||
Conversion of subordinated debt to preferred stock
|
- | 2,594,000 |
Buildings and Improvements
|
10 - 40 years
|
Furniture and Fixtures
|
5 - 20 years
|
For the year ended
|
||||||||
December 31, 2015
|
December 31, 2014
|
|||||||
Earnings Available to Common Stockholders:
|
||||||||
Net Income
|
$ | 8,581,584 | $ | 5,847,262 | ||||
Minority interest
|
$ | 164,575 | $ | 45,653 | ||||
Preferred Stock Dividends
|
510,000 | 127,500 | ||||||
Net Income Available to Common Stockholders
|
$ | 7,907,009 | $ | 5,674,109 |
Year ended
|
||||||||||||||||||||||||
12/31/2015
|
12/31/2014
|
|||||||||||||||||||||||
Income
|
Shares
|
Per Share Amounts
|
Income
|
Shares
|
Per Share Amounts
|
|||||||||||||||||||
Basic EPS
|
$ | 7,907,009 | 3,735,212 | $ | 2.40 | $ | 5,674,109 | 3,229,942 | $ | 1.82 | ||||||||||||||
Effect of Dilutive Securities:
|
||||||||||||||||||||||||
Convertible Preferred Stock
|
510,000 | 444,400 | (0.15 | ) | 127,500 | 110,631 | (0.02 | ) | ||||||||||||||||
Diluted EPS
|
$ | 8,417,009 | 3,290,812 | $ | 2.25 | $ | 5,801,609 | 3,119,311 | $ | 1.80 |
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
||||||||||||
December 31, 2015
|
||||||||||||||||
U. S. Treasuries
|
$ | 125,043 | $ | - | $ | - | $ | 125,043 | ||||||||
December 31, 2014
|
||||||||||||||||
U. S. Treasuries
|
$ | 125,150 | $ | - | $ | - | $ | 125,150 |
Amortized Cost
|
Gross Unrealized Gains
|
Gross Unrealized Losses
|
Fair Value
|
|||||||||||||
December 31, 2015
|
||||||||||||||||
U. S. Treasuries
|
$ | 4,015,440 | $ | 5,840 | $ | - | $ | 4,021,280 | ||||||||
Government sponsored enterprises
|
8,080,540 | 3,780 | 10,600 | 8,073,720 | ||||||||||||
Mortgage-backed obligations of federal agencies
|
810,802 | 6,143 | - | 816,945 | ||||||||||||
Marketable equities
|
135,000 | - | - | 135,000 | ||||||||||||
Total Securities Available for Sale
|
$ | 13,041,782 | $ | 15,763 | $ | 10,600 | $ | 13,046,945 | ||||||||
December 31, 2014
|
||||||||||||||||
U. S. Treasuries
|
$ | 4,025,740 | $ | - | $ | 6,100 | $ | 4,019,640 | ||||||||
Government sponsored enterprises
|
8,039,540 | 8,940 | 9,880 | 8,038,600 | ||||||||||||
Mortgage-backed obligations of federal agencies
|
1,011,092 | 10,780 | - | 1,021,872 | ||||||||||||
Marketable equities
|
135,000 | - | - | 135,000 | ||||||||||||
Total Securities Available for Sale
|
$ | 13,211,372 | $ | 19,720 | $ | 15,980 | $ | 13,215,112 |
Securities Held to Maturity | Securities Available for Sale | |||||||||||||||
Amortized Cost | Fair Value |
Amortized Cost
|
Fair Value | |||||||||||||
Due in one year or less
|
$ | 125,043 | $ | 125,043 | $ | 4,015,440 | $ | 4,021,280 | ||||||||
Due after one year through five years
|
- | - | 8,080,540 | 8,073,720 | ||||||||||||
Due after five years
|
- | - | 945,802 | 951,945 | ||||||||||||
Total
|
$ | 125,043 | $ | 125,043 | $ | 13,041,782 | $ | 13,046,945 |
Less than 12 Months
|
More than 12 Months
|
Total
|
||||||||||||||||||||||
Fair Value
|
Unrealized Losses
|
Fair Value
|
Unrealized Losses
|
Fair Value
|
Unrealized Losses
|
|||||||||||||||||||
2015
|
||||||||||||||||||||||||
U. S. Treasuries
|
$ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||
Government sponsored enterprises
|
6,056 | (11 | ) | - | - | 6,056 | (11 | ) | ||||||||||||||||
Mortgage-backed obligations
|
- | - | - | - | - | - | ||||||||||||||||||
Total
|
$ | 6,056 | $ | (11 | ) | $ | - | $ | - | $ | 6,056 | $ | (11 | ) | ||||||||||
2014
|
||||||||||||||||||||||||
U. S. Treasuries
|
$ | 4,020 | $ | (6 | ) | $ | - | $ | - | $ | 4,020 | $ | (6 | ) | ||||||||||
Government sponsored enterprises
|
2,004 | (2 | ) | 1,991 | (8 | ) | 3,995 | (10 | ) | |||||||||||||||
Mortgage-backed obligations
|
- | - | - | - | - | - | ||||||||||||||||||
Total
|
$ | 6,024 | $ | (8 | ) | $ | 1,991 | $ | (8 | ) | $ | 8,015 | $ | (16 | ) |
2015
|
2014
|
|||||||
Construction/Land Development
|
$ | 69,759,401 | $ | 67,180,467 | ||||
Farmland
|
13,377,740 | 12,507,446 | ||||||
Real Estate
|
166,586,877 | 162,248,606 | ||||||
Multi-Family
|
7,558,460 | 11,775,205 | ||||||
Commercial Real Estate
|
128,031,686 | 122,305,417 | ||||||
Home Equity – closed end
|
9,135,433 | 9,393,805 | ||||||
Home Equity – open end
|
56,599,337 | 52,181,679 | ||||||
Commercial & Industrial – Non-Real Estate
|
27,954,171 | 28,160,584 | ||||||
Consumer
|
8,219,391 | 9,109,994 | ||||||
Dealer Finance
|
54,085,791 | 40,633,086 | ||||||
Credit Cards
|
2,745,190 | 2,745,190 | ||||||
Total
|
$ | 544,053,477 | $ | 518,201,574 |
Unpaid
|
Average
|
Interest
|
||||||||||||||||||
December 31, 2015
|
Recorded
|
Principal
|
Related
|
Recorded
|
Income
|
|||||||||||||||
Investment
|
Balance
|
Allowance
|
Investment
|
Recognized
|
||||||||||||||||
Impaired loans without a valuation allowance:
|
||||||||||||||||||||
Construction/Land Development
|
$ | 1,361 | $ | 1,499 | $ | - | $ | 3,622 | $ | 73 | ||||||||||
Farmland
|
- | - | - | - | - | |||||||||||||||
Real Estate
|
1,097 | 1,097 | - | 734 | 58 | |||||||||||||||
Multi-Family
|
- | - | - | - | - | |||||||||||||||
Commercial Real Estate
|
307 | 307 | - | 874 | 17 | |||||||||||||||
Home Equity – closed end
|
- | - | - | - | - | |||||||||||||||
Home Equity – open end
|
1,159 | 1,159 | - | 1,513 | 82 | |||||||||||||||
Commercial & Industrial – Non-Real Estate
|
181 | 181 | - | 186 | 10 | |||||||||||||||
Consumer
|
18 | 18 | - | 7 | - | |||||||||||||||
Credit Cards
|
- | - | - | - | - | |||||||||||||||
Dealer Finance
|
4 | 4 | - | 1 | 4 | |||||||||||||||
4,127 | 4,265 | - | 6,937 | 244 | ||||||||||||||||
Impaired loans with a valuation allowance
|
||||||||||||||||||||
Construction/Land Development
|
11,534 | 11,534 | 2,373 | 12,884 | 299 | |||||||||||||||
Farmland
|
- | - | - | - | - | |||||||||||||||
Real Estate
|
324 | 324 | 238 | 699 | 46 | |||||||||||||||
Multi-Family
|
- | - | - | - | - | |||||||||||||||
Commercial Real Estate
|
890 | 890 | 18 | 900 | 15 | |||||||||||||||
Home Equity – closed end
|
- | - | - | - | - | |||||||||||||||
Home Equity – open end
|
1,414 | 1,414 | 269 | 613 | 75 | |||||||||||||||
Commercial & Industrial – Non-Real Estate
|
- | - | - | - | - | |||||||||||||||
Consumer
|
- | - | - | - | - | |||||||||||||||
Credit cards
|
- | - | - | - | - | |||||||||||||||
Dealer Finance
|
68 | 68 | 17 | 38 | 5 | |||||||||||||||
14,230 | 14,230 | 2,915 | 15,134 | 440 | ||||||||||||||||
Total impaired loans
|
$ | 18,357 | $ | 18,495 | $ | 2,915 | $ | 22,071 | $ | 684 |
Unpaid
|
Average
|
Interest
|
||||||||||||||||||
December 31, 2014
|
Recorded
|
Principal
|
Related
|
Recorded
|
Income
|
|||||||||||||||
Investment
|
Balance
|
Allowance
|
Investment
|
Recognized
|
||||||||||||||||
Impaired loans without a valuation allowance:
|
||||||||||||||||||||
Construction/Land Development
|
$ | 4,982 | $ | 5,402 | $ | - | $ | 5,412 | $ | 251 | ||||||||||
Farmland
|
- | - | - | 1,163 | - | |||||||||||||||
Real Estate
|
141 | 141 | - | 85 | 5 | |||||||||||||||
Multi-Family
|
- | - | - | - | - | |||||||||||||||
Commercial Real Estate
|
1,159 | 1,459 | - | 1,450 | 66 | |||||||||||||||
Home Equity – closed end
|
- | - | - | 123 | - | |||||||||||||||
Home Equity – open end
|
1,649 | 1,649 | - | 330 | 57 | |||||||||||||||
Commercial & Industrial – Non-Real Estate
|
191 | 191 | - | 237 | 11 | |||||||||||||||
Consumer
|
- | - | - | - | - | |||||||||||||||
Credit cards
|
- | - | - | - | - | |||||||||||||||
Dealer Finance
|
- | - | - | - | - | |||||||||||||||
8,122 | 8,842 | - | 8,800 | 390 | ||||||||||||||||
Impaired loans with a valuation allowance
|
||||||||||||||||||||
Construction/Land Development
|
12,976 | 14,749 | 1,469 | 12,056 | 326 | |||||||||||||||
Farmland
|
- | - | - | - | - | |||||||||||||||
Real Estate
|
926 | 926 | 101 | 988 | 105 | |||||||||||||||
Multi-Family
|
- | - | - | - | - | |||||||||||||||
Commercial Real Estate
|
938 | 938 | 47 | 1,030 | 4 | |||||||||||||||
Home Equity – closed end
|
- | - | - | 72 | - | |||||||||||||||
Home Equity – open end
|
- | - | - | 40 | - | |||||||||||||||
Commercial & Industrial – Non-Real Estate
|
- | - | - | - | - | |||||||||||||||
Consumer
|
- | - | - | - | - | |||||||||||||||
Credit cards
|
- | - | - | - | - | |||||||||||||||
Dealer Finance
|
- | - | - | - | - | |||||||||||||||
14,840 | 16,613 | 1,617 | 14,186 | 435 | ||||||||||||||||
Total impaired loans
|
$ | 22,962 | $ | 25,455 | $ | 1,617 | $ | 22,986 | $ | 825 |
December 31, 2015
(in thousands)
|
Beginning Balance
|
Charge-offs
|
Recoveries
|
Provision
|
Ending Balance
|
Individually Evaluated for Impairment
|
Collectively Evaluated for Impairment
|
|||||||||||||||||||||
Allowance for loan losses:
|
||||||||||||||||||||||||||||
Construction/Land Development
|
$ | 4,738 | $ | 156 | $ | 85 | $ | (225 | ) | $ | 4,442 | $ | 2,373 | $ | 2,069 | |||||||||||||
Farmland
|
- | - | - | 95 | 95 | - | 95 | |||||||||||||||||||||
Real Estate
|
623 | 25 | 37 | 171 | 806 | 238 | 568 | |||||||||||||||||||||
Multi-Family
|
- | - | - | 71 | 71 | - | 71 | |||||||||||||||||||||
Commercial Real Estate
|
126 | - | 65 | 254 | 445 | 18 | 427 | |||||||||||||||||||||
Home Equity – closed end
|
188 | 26 | 6 | 6 | 174 | - | 174 | |||||||||||||||||||||
Home Equity – open end
|
154 | 51 | - | 531 | 634 | 269 | 365 | |||||||||||||||||||||
Commercial & Industrial – Non-Real Estate
|
1,211 | - | 62 | (218 | ) | 1,055 | - | 1,055 | ||||||||||||||||||||
Consumer
|
214 | 32 | 32 | (106 | ) | 108 | - | 108 | ||||||||||||||||||||
Dealer Finance
|
1,336 | 251 | 24 | (273 | ) | 836 | 17 | 819 | ||||||||||||||||||||
Credit Cards
|
135 | 60 | 46 | (6 | ) | 115 | - | 115 | ||||||||||||||||||||
Total
|
$ | 8,725 | $ | 601 | $ | 357 | $ | 300 | $ | 8,781 | $ | 2,915 | $ | 5,866 |
December 31, 2014
(in thousands)
|
Beginning Balance
|
Charge-offs
|
Recoveries
|
Provision
|
Ending Balance
|
Individually Evaluated for Impairment
|
Collectively Evaluated for Impairment
|
|||||||||||||||||||||
Allowance for loan losses:
|
||||||||||||||||||||||||||||
Construction/Land Development
|
$ | 4,007 | $ | 1,611 | $ | 223 | $ | 2,119 | $ | 4,738 | $ | 1,469 | $ | 3,269 | ||||||||||||||
Farmland
|
(2 | ) | - | - | 2 | - | - | - | ||||||||||||||||||||
Real Estate
|
400 | 208 | - | 431 | 623 | 101 | 522 | |||||||||||||||||||||
Multi-Family
|
- | - | - | - | - | - | - | |||||||||||||||||||||
Commercial Real Estate
|
777 | - | 108 | (759 | ) | 126 | 47 | 79 | ||||||||||||||||||||
Home Equity – closed end
|
157 | - | - | 31 | 188 | - | 188 | |||||||||||||||||||||
Home Equity – open end
|
476 | 80 | - | (242 | ) | 154 | - | 154 | ||||||||||||||||||||
Commercial & Industrial – Non-Real Estate
|
1,464 | 385 | 356 | (224 | ) | 1,211 | - | 1,211 | ||||||||||||||||||||
Consumer
|
156 | 33 | 33 | 58 | 214 | - | 214 | |||||||||||||||||||||
Dealer Finance
|
628 | 107 | 6 | 809 | 1,336 | - | 1,336 | |||||||||||||||||||||
Credit Cards
|
121 | 46 | 35 | 25 | 135 | - | 135 | |||||||||||||||||||||
Total
|
$ | 8,184 | $ | 2,470 | $ | 761 | $ | 2,250 | $ | 8,725 | $ | 1,617 | $ | 7,108 |
December 31, 2015
|
Loan Receivable
|
Individually Evaluated for Impairment
|
Collectively Evaluated for Impairment
|
|||||||||
Construction/Land Development
|
$ | 69,759 | $ | 12,895 | $ | 56,864 | ||||||
Farmland
|
13,378 | - | 13,378 | |||||||||
Real Estate
|
166,587 | 1,421 | 165,167 | |||||||||
Multi-Family
|
7,559 | - | 7,559 | |||||||||
Commercial Real Estate
|
128,032 | 1,197 | 126,835 | |||||||||
Home Equity – closed end
|
9,135 | - | 9,135 | |||||||||
Home Equity –open end
|
56,599 | 2,573 | 54,026 | |||||||||
Commercial & Industrial – Non-Real Estate
|
27,954 | 181 | 27,773 | |||||||||
Consumer
|
8,219 | 18 | 8,201 | |||||||||
Dealer Finance
|
54,086 | 72 | 54,013 | |||||||||
Credit Cards
|
2,745 | - | 2,745 | |||||||||
$ | 544,053 | $ | 18,357 | $ | 525,696 | |||||||
Total
|
December 31, 2014
|
Loan Receivable
|
Individually Evaluated for Impairment
|
Collectively Evaluated for Impairment
|
|||||||||
Construction/Land Development
|
$ | 67,181 | $ | 17,958 | $ | 49,223 | ||||||
Farmland
|
12,507 | - | 12,507 | |||||||||
Real Estate
|
162,249 | 1,067 | 161,182 | |||||||||
Multi-Family
|
11,775 | - | 11,775 | |||||||||
Commercial Real Estate
|
122,305 | 2,097 | 120,208 | |||||||||
Home Equity – closed end
|
9,394 | - | 9,394 | |||||||||
Home Equity –open end
|
52,182 | 1,649 | 50,533 | |||||||||
Commercial & Industrial – Non-Real Estate
|
28,161 | 191 | 27,970 | |||||||||
Consumer
|
9,110 | - | 9,110 | |||||||||
Dealer Finance
|
40,633 | 40,633 | ||||||||||
Credit Cards
|
2,705 | - | 2,705 | |||||||||
$ | 518,202 | $ | 22,962 | $ | 495,240 | |||||||
Total
|
30-59 Days Past due
|
60-89 Days Past Due
|
Greater than 90 Days (excluding non-accrual)
|
Non-Accrual Loans
|
Total Past Due
|
Current
|
Total Loan Receivable
|
||||||||||||||||||||||
December 31, 2015
|
||||||||||||||||||||||||||||
Construction/Land Development
|
$ | 104 | $ | - | $ | - | $ | 4,688 | $ | 4,792 | $ | 64,967 | $ | 69,759 | ||||||||||||||
Farmland
|
- | - | - | - | - | 13,378 | 13,378 | |||||||||||||||||||||
Real Estate
|
2,684 | 1,332 | 272 | 1,010 | 5,298 | 161,289 | 166,587 | |||||||||||||||||||||
Multi-Family
|
- | - | - | - | - | 7,559 | 7,559 | |||||||||||||||||||||
Commercial Real Estate
|
340 | 241 | - | - | 581 | 127,451 | 128,032 | |||||||||||||||||||||
Home Equity – closed end
|
41 | 7 | - | - | 48 | 9,087 | 9,135 | |||||||||||||||||||||
Home Equity – open end
|
918 | 46 | 107 | 40 | 1,111 | 55,488 | 56,599 | |||||||||||||||||||||
Commercial & Industrial – Non- Real Estate
|
114 | 3 | 25 | 109 | 251 | 27,703 | 27,954 | |||||||||||||||||||||
Consumer
|
120 | 10 | - | - | 130 | 8,089 | 8,219 | |||||||||||||||||||||
Dealer Finance
|
905 | 183 | 152 | 108 | 1,348 | 52,738 | 54,086 | |||||||||||||||||||||
Credit Cards
|
10 | 13 | 15 | - | 38 | 2,707 | 2,745 | |||||||||||||||||||||
Total
|
$ | 5,236 | $ | 1,835 | $ | 571 | $ | 5,955 | $ | 13,597 | $ | 530,456 | $ | 544,053 |
30-59 Days Past due
|
60-89 Days Past Due
|
Greater than 90 Days (excluding non-accrual)
|
Non-Accrual Loans
|
Total Past Due
|
Current
|
Total Loan Receivable
|
||||||||||||||||||||||
December 31, 2014
|
||||||||||||||||||||||||||||
Construction/Land Development
|
$ | 205 | $ | 166 | $ | - | $ | 4,508 | $ | 4,879 | $ | 62,302 | $ | 67,181 | ||||||||||||||
Farmland
|
- | - | - | - | - | 12,507 | 12,507 | |||||||||||||||||||||
Real Estate
|
5,085 | 635 | - | 973 | 6,693 | 155,556 | 162,249 | |||||||||||||||||||||
Multi-Family
|
- | - | - | - | - | 11,775 | 11,775 | |||||||||||||||||||||
Commercial Real Estate
|
747 | - | - | 1,165 | 1,912 | 120,393 | 122,305 | |||||||||||||||||||||
Home Equity – closed end
|
162 | 15 | - | 10 | 187 | 9,207 | 9,394 | |||||||||||||||||||||
Home Equity – open end
|
730 | 25 | - | 143 | 898 | 51,284 | 52,182 | |||||||||||||||||||||
Commercial & Industrial – Non- Real Estate
|
- | - | - | 14 | 14 | 28,147 | 28,161 | |||||||||||||||||||||
Consumer
|
290 | 9 | - | - | 299 | 8,811 | 9,110 | |||||||||||||||||||||
Dealer Finance
|
696 | 189 | - | 161 | 1,046 | 39,587 | 40,633 | |||||||||||||||||||||
Credit Cards
|
36 | - | 1 | - | 37 | 2,668 | 2,705 | |||||||||||||||||||||
Total
|
$ | 7,951 | $ | 1,039 | $ | 1 | $ | 6,974 | $ | 15,965 | $ | 502,237 | $ | 518,202 |
CREDIT QUALITY INDICATORS (in thousands)
|
||||||||||||||||||||||||||||||||||||
AS OF DECEMBER 31, 2015
|
||||||||||||||||||||||||||||||||||||
Corporate Credit Exposure
|
||||||||||||||||||||||||||||||||||||
Credit Risk Profile by Creditworthiness Category
|
||||||||||||||||||||||||||||||||||||
Grade 1 Minimal Risk
|
Grade 2 Modest Risk
|
Grade 3 Average Risk
|
Grade 4 Acceptable Risk
|
Grade 5 Marginally Acceptable
|
Grade 6 Watch
|
Grade 7 Substandard
|
Grade 8 Doubtful
|
Total
|
||||||||||||||||||||||||||||
Construction/Land Development
|
$ | - | $ | 485 | $ | 8,410 | $ | 31,783 | $ | 14,260 | $ | 3,216 | $ | 11,605 | $ | - | $ | 69,759 | ||||||||||||||||||
Farmland
|
66 | - | 2,615 | 3,768 | 4,952 | 1,977 | - | - | 13,378 | |||||||||||||||||||||||||||
Real Estate
|
- | 955 | 54,400 | 76,545 | 23,695 | 8,334 | 2,658 | - | 166,587 | |||||||||||||||||||||||||||
Multi-Family
|
- | 391 | 3,925 | 3,046 | 197 | - | - | - | 7,559 | |||||||||||||||||||||||||||
Commercial Real Estate
|
- | 2,087 | 25,889 | 74,337 | 20,271 | 4,149 | 1,299 | - | 128,032 | |||||||||||||||||||||||||||
Home Equity – closed end
|
- | - | 3,549 | 3,792 | 1,661 | 114 | 19 | - | 9,135 | |||||||||||||||||||||||||||
Home Equity – open end
|
- | 1,657 | 15,043 | 31,455 | 4,827 | 398 | 3,219 | - | 56,599 | |||||||||||||||||||||||||||
Commercial & Industrial (Non-Real Estate)
|
896 | 646 | 6,423 | 17,053 | 2,281 | 517 | 138 | - | 27,954 | |||||||||||||||||||||||||||
Total
|
$ | 962 | $ | 6,221 | $ | 120,254 | $ | 241,779 | $ | 72,144 | $ | 18,705 | $ | 18,938 | $ | - | $ | 479,003 |
Consumer Credit Exposure
|
||||||||
Credit Risk Profile Based on Payment Activity
|
||||||||
Credit Cards
|
Consumer
|
|||||||
Performing
|
$ | 2,730 | $ | 62,046 | ||||
Non performing
|
15 | 259 | ||||||
Total
|
$ | 2,745 | $ | 62,305 |
CREDIT QUALITY INDICATORS (in thousands)
|
||||||||||||||||||||||||||||||||||||
AS OF DECEMBER 31, 2014
|
||||||||||||||||||||||||||||||||||||
Corporate Credit Exposure
|
||||||||||||||||||||||||||||||||||||
Credit Risk Profile by Creditworthiness Category
|
||||||||||||||||||||||||||||||||||||
Grade 1 Minimal Risk
|
Grade 2 Modest Risk
|
Grade 3 Average Risk
|
Grade 4 Acceptable Risk
|
Grade 5 Marginally Acceptable
|
Grade 6 Watch
|
Grade 7 Substandard
|
Grade 8 Doubtful
|
Total
|
||||||||||||||||||||||||||||
Construction/Land Development
|
$ | - | $ | 165 | $ | 8,460 | $ | 24,227 | $ | 9,605 | $ | 3,815 | $ | 20,909 | $ | - | $ | 67,181 | ||||||||||||||||||
Farmland
|
68 | - | 1,640 | 3,451 | 5,228 | - | 2,120 | - | 12,507 | |||||||||||||||||||||||||||
Real Estate
|
- | 629 | 60,290 | 66,464 | 23,934 | 7,083 | 3,849 | - | 162,249 | |||||||||||||||||||||||||||
Multi-Family
|
- | 468 | 4,145 | 2,183 | 4,979 | - | - | - | 11,775 | |||||||||||||||||||||||||||
Commercial Real Estate
|
- | 1,687 | 22,800 | 65,653 | 19,058 | 10,571 | 2,536 | - | 122,305 | |||||||||||||||||||||||||||
Home Equity – closed end
|
- | - | 4,327 | 3,090 | 1,812 | 154 | 11 | - | 9,394 | |||||||||||||||||||||||||||
Home Equity – open end
|
- | 1,555 | 13,433 | 28,425 | 4,309 | 1,936 | 2,524 | - | 52,182 | |||||||||||||||||||||||||||
Commercial & Industrial (Non-Real Estate)
|
643 | 74 | 4,692 | 18,039 | 3,948 | 735 | 30 | - | 28,161 | |||||||||||||||||||||||||||
Total
|
$ | 711 | $ | 4,578 | $ | 119,787 | $ | 211,532 | $ | 72,873 | $ | 24,294 | $ | 31,979 | $ | - | $ | 465.754 |
Consumer Credit Exposure
|
||||||||
Credit Risk Profile Based on Payment Activity
|
||||||||
Credit Cards
|
Consumer
|
|||||||
Performing
|
$ | 2,704 | $ | 49,582 | ||||
Non performing
|
1 | 161 | ||||||
Total
|
$ | 2,705 | $ | 49,743 |
NOTE 7
|
TROUBLED DEBT RESTRUCTURING
|
During the twelve months ended December 31, 2015, the Bank modified 16 loans that were considered to be troubled debt restructurings. These modifications include rate adjustments, revisions to amortization schedules, suspension of principal payments for a temporary period, re-advancing funds to be applied as payments to bring the loan(s) current, or any combination thereof.
|
December 31, 2015
|
||||||||||||
Pre-Modification
|
Post-Modification
|
|||||||||||
(in thousands)
|
Outstanding
|
Outstanding
|
||||||||||
Troubled Debt Restructurings
|
Number of Contracts
|
Recorded Investment
|
Recorded Investment
|
|||||||||
Commercial
|
1 | $ | 974 | $ | 974 | |||||||
Real Estate
|
5 | 1,408 | 1,408 | |||||||||
Home Equity
|
4 | 1,414 | 1,414 | |||||||||
Consumer
|
6 | 73 | 73 | |||||||||
Total
|
16 | $ | 3,869 | $ | 3,869 |
NOTE 7
|
TROUBLED DEBT RESTRUCTURING (CONTINUED):
|
During the twelve months ended December 31, 2014, the Bank modified 3 loans that were considered to be troubled debt restructurings. These modifications include rate adjustments, revisions to amortization schedules, suspension of principal payments for a temporary period, re-advancing funds to be applied as payments to bring the loan(s) current, or any combination thereof.
|
December 31, 2014
|
||||||||||||
Pre-Modification
|
Post-Modification
|
|||||||||||
(in thousands)
|
Outstanding
|
Outstanding
|
||||||||||
Number of Contracts
|
Recorded Investment
|
Recorded Investment
|
||||||||||
Troubled Debt Restructurings
|
||||||||||||
Real Estate
|
2 | $ | 179 | $ | 179 | |||||||
Consumer
|
1 | 22 | 22 | |||||||||
3 | $ | 201 | $ | 201 |
NOTE 8
|
BANK PREMISES AND EQUIPMENT
|
2015
|
2014
|
|||||||
Land
|
$ | 1,868,709 | $ | 1,418,003 | ||||
Buildings and improvements
|
7,209,427 | 6,793,644 | ||||||
Furniture and equipment
|
7,397,173 | 6,479,815 | ||||||
16,475,309 | 14,691,462 | |||||||
Less - accumulated depreciation
|
(8,933,231 | ) | (8,233,208 | ) | ||||
Net
|
$ | 7,542,078 | $ | 6,458,254 |
Other Real Estate Owned
|
||||||||
2015
|
2014
|
|||||||
Balance as of January 1
|
$ | 3,507,153 | $ | 2,628,418 | ||||
Property acquired at foreclosure
|
125,000 | 2,914,958 | ||||||
Capital improvements on foreclosed property
|
98,929 | 48,961 | ||||||
Sale of other real estate owned financed by Bank
|
(328,129 | ) | (780,097 | ) | ||||
Sales of foreclosed properties
|
(737,663 | ) | (1,029,452 | ) | ||||
Write down of OREO
|
(537,605 | ) | (275,635 | ) | ||||
Balance as of December 31
|
$ | 2,127,685 | $ | 3,507,153 |
December 31,
|
||||||||
2015
|
2014
|
|||||||
Noninterest bearing demand deposits
|
$ | 134,786,875 | $ | 112,197,722 | ||||
Savings and interest bearing demand deposits:
|
||||||||
Interest checking accounts
|
108,459,597 | 119,593,529 | ||||||
Savings accounts
|
90,383,486 | 64,249,199 | ||||||
Time Deposits:
|
||||||||
Balances of less than $100,000
|
107,415,244 | 115,651,329 | ||||||
Balances of $100,000 and more
|
53,624,554 | 79,812,757 | ||||||
Total Deposits
|
$ | 494,669,756 | $ | 491,504,536 |
2016
|
$ | 68,800,143 | ||
2017
|
38,529,664 | |||
2018
|
27,310,066 | |||
2019
|
12,595,076 | |||
2020 and after
|
13,804,849 | |||
Total
|
$ | 161,039,798 |
Maximum
|
Weighted
|
|||||||||||||||||||
Outstanding
|
Outstanding
|
Average
|
Average
|
Year End
|
||||||||||||||||
at any
|
at
|
Balance
|
Interest
|
Interest
|
||||||||||||||||
Month End
|
Year End
|
Outstanding
|
Rate
|
Rate
|
||||||||||||||||
2015
|
||||||||||||||||||||
Federal funds purchased
|
$ | 8,843,000 | $ | 959,217 | $ | 833,907 | .02 | % | .78 | % | ||||||||||
FHLB short term
|
45,000 ,000 | 20,000,000 | 26,739,726 | .16 | % | .19 | % | |||||||||||||
Securities sold under agreements to repurchase
|
4,697,341 | 3,994,834 | 4,443,753 | .04 | % | .25 | % | |||||||||||||
Totals
|
$ | 24,954,051 | $ | 32,017,386 | .21 | % | .22 | % | ||||||||||||
2014
|
||||||||||||||||||||
Federal funds purchased
|
$ | 491,000 | $ | - | $ | 7,704 | .001 | % | .61 | % | ||||||||||
FHLB short term
|
10,000 ,000 | 10,000,000 | 27,397 | .001 | % | .17 | % | |||||||||||||
Securities sold under agreements to repurchase
|
5,066,238 | 4,358,492 | 3,837,612 | .23 | % | .24 | % | |||||||||||||
Totals
|
$ | 14,358,492 | $ | 3,872,713 | .23 | % | .23 | % |
2016
|
$ | 3,929,000 | ||
2017
|
3,929,000 | |||
2018
|
8,929,000 | |||
2019
|
6,429,000 | |||
2020
|
13,929,000 | |||
Thereafter
|
11,016,000 | |||
Total
|
$ | 48,161,000 |
2015
|
2014
|
2013
|
||||||||||
Current expense
|
||||||||||||
Federal
|
$ | 3,227,013 | $ | 1,777,598 | $ | 482,912 | ||||||
Deferred (benefit) expense
|
||||||||||||
Federal
|
(340,941 | ) | 505,684 | 636,452 | ||||||||
State
|
- | 9,854 | (67,594 | ) | ||||||||
Total Deferred (benefit) expense
|
(340,941 | ) | 515,538 | 568,858 | ||||||||
Total Income Tax Expense
|
$ | 2,886,072 | $ | 2,293,136 | $ | 1,051,770 |
Deferred Tax Assets:
|
2015
|
2014
|
||||||
Allowance for loan losses
|
$ | 2,564,214 | $ | 2,201,291 | ||||
Split Dollar Life Insurance
|
4,440 | 4,440 | ||||||
Nonqualified deferred compensation
|
702,440 | 594,132 | ||||||
Low income housing partnerships losses
|
210,107 | 308,539 | ||||||
Core deposit amortization
|
176,605 | 72,188 | ||||||
Other real estate owned
|
269,610 | 3,746 | ||||||
Pension plan
|
1,382,268 | 1,199,686 | ||||||
Total Assets
|
$ | 5,309,684 | $ | 4,384,022 |
Deferred Tax Liabilities:
|
2015
|
2014
|
||||||
Unearned low income housing credits
|
$ | 418,416 | $ | 523,769 | ||||
Depreciation
|
359,406 | 320,743 | ||||||
Pension
|
1,988,736 | 1,864,964 | ||||||
Goodwill tax amortization
|
901,340 | 853,880 | ||||||
Securities available for sale
|
1,757 | 1,272 | ||||||
Total Liabilities
|
3,669,655 | 3,564,628 | ||||||
Net Deferred Tax Asset (included in Other Assets on Balance Sheet)
|
$ | 1,640,029 | $ | 819,394 |
2015
|
2014
|
2013
|
||||||||||
Tax expense at federal statutory rates
|
$ |
3,843,048
|
$ | 2,959,056 | $ | 2,251,851 | ||||||
Increases (decreases) in taxes resulting from:
|
||||||||||||
State income taxes, net of federal benefit
|
8,087 | 8,659 | 9,229 | |||||||||
Partially tax-exempt income
|
(46,348 | ) | (54,529 | ) | (44,676 | ) | ||||||
Tax-exempt income
|
(222,672 | ) | (190,192 | ) | (197,482 | ) | ||||||
Prior year LIH credits
|
(132,028 | ) | (21,787 | ) | (61,768 | ) | ||||||
LIH and historic credits
|
(568,854 | ) | (484,955 | ) | (611,795 | ) | ||||||
Deferred Tax Asset Valuation Allowance - reversal
|
- | 396,440 | - | |||||||||
Other
|
4,840 | (112,714 | ) | (2,710 | ) | |||||||
Total Income Tax Expense
|
$ | 2,886,072 | $ | 2,293,136 | $ | 1,051,770 |
2015
|
2014
|
2013
|
||||||||||
Change in Benefit Obligation
|
||||||||||||
Benefit obligation, beginning
|
$ | 10,777,415 | $ | 7,933,568 | $ | 8,931,940 | ||||||
Service cost
|
648,334 | 501,032 | 599,933 | |||||||||
Interest cost
|
410,944 | 377,706 | 350,314 | |||||||||
Actuarial gain (loss)
|
(137,048 | ) | 2,030,583 | (1,300,094 | ) | |||||||
Benefits paid
|
(754,987 | ) | (65,474 | ) | (648,525 | ) | ||||||
Benefit obligation, ending
|
$ | 10,944,658 | $ | 10,777,415 | $ | 7,933,568 | ||||||
Change in Plan Assets
|
||||||||||||
Fair value of plan assets, beginning
|
$ | 11,683,845 | $ | 9,687,226 | $ | 8,123,437 | ||||||
Actual return on plan assets
|
(640 | ) | 562,093 | 1,462,314 | ||||||||
Employer contribution
|
750,000 | 1,500,000 | 750,000 | |||||||||
Benefits paid
|
(754,987 | ) | (65,474 | ) | (648,525 | ) | ||||||
Fair value of plan assets, ending
|
11,678,218 | 11,683,845 | 9,687,226 | |||||||||
Funded status at the end of the year
|
$ | 733,560 | $ | 906,430 | $ | 1,753,658 |
2015
|
2014
|
2013
|
||||||||||
Amount recognized in the Balance Sheet
|
||||||||||||
Accrued prepaid benefit cost
|
$ | 4,799,051 | $ | 4,434,917 | $ | 3,136,277 | ||||||
Unfunded pension benefit obligation under ASC 325-960
|
(4,065,491 | ) | (3,528,487 | ) | (1,382,619 | ) | ||||||
Amount recognized in accumulated other
|
||||||||||||
comprehensive income
|
||||||||||||
Net Gain/(Loss)
|
$ | (4,137,855 | ) | $ | (3,616,087 | ) | $ | (1,485,455 | ) | |||
Prior service cost
|
72,364 | 87,600 | 102,836 | |||||||||
Amount recognized
|
(4,065,491 | ) | (3,528,487 | ) | (1,382,619 | ) | ||||||
Deferred Taxes
|
1,382,267 | 1,199,686 | 470,090 | |||||||||
Amount recognized in accumulated
|
||||||||||||
comprehensive income
|
$ | (2,683,224 | ) | $ | (2,328,801 | ) | $ | (912,529 | ) | |||
(Accrued) Prepaid benefit detail
|
||||||||||||
Benefit obligation
|
$ | (10,944,658 | ) | $ | (10,777,415 | ) | $ | (7,933,568 | ) | |||
Fair value of assets
|
11,678,218 | 11,683,845 | 9,687,226 | |||||||||
Unrecognized net actuarial loss
|
4,137,855 | 3,616,087 | 1,485,455 | |||||||||
Unrecognized prior service cost
|
(72,364 | ) | (87,600 | ) | (102,836 | ) | ||||||
Prepaid (accrued) benefits
|
$ | 4,799,051 | $ | 4,434,917 | $ | 3,136,277 | ||||||
Components of net periodic benefit cost
|
||||||||||||
Service cost
|
$ | 648,334 | $ | 501,032 | $ | 599,933 | ||||||
Interest cost
|
410,944 | 377,706 | 350,314 | |||||||||
Expected return on plan assets
|
(838,818 | ) | (698,252 | ) | (636,081 | ) | ||||||
Amortization of prior service cost
|
(15,236 | ) | (15,236 | ) | (15,236 | ) | ||||||
Recognized net actuarial (gain) loss
|
180,642 | 36,110 | 203,183 | |||||||||
Net periodic benefit cost
|
$ | 385,866 | $ | 201,360 | $ | 502,113 | ||||||
Additional disclosure information
|
||||||||||||
Accumulated benefit obligation
|
$ | 7,601,249 | $ | 7,543,340 | $ | 5,474,048 | ||||||
Vested benefit obligation
|
$ | 7,539,365 | $ | 7,408,014 | $ | 5,388,808 | ||||||
Discount rate used for net pension cost
|
4.00 | % | 5.00 | % | 4.00 | % | ||||||
Discount rate used for disclosure
|
4.25 | % | 4.00 | % | 5.00 | % | ||||||
Expected return on plan assets
|
7.50 | % | 7.50 | % | 8.00 | % | ||||||
Rate of compensation increase
|
3.00 | % | 3.00 | % | 3.00 | % | ||||||
Average remaining service (years)
|
13 | 14 | 14 |
2016
|
$ | 582,606 | ||
2017
|
48,333 | |||
2018
|
1,249,321 | |||
2019
|
662,704 | |||
2020
|
543,814 | |||
2021-2025
|
4,568,645 | |||
$ | 7,655,423 |
2015
|
2014
|
|||||||
Commitments to loan money
|
$ | 135,138,834 | $ | 120,922,771 | ||||
Standby letters of credit
|
1,344,191 | 2,077,870 | ||||||
2016
|
$ | 160,882 | ||
2017
|
116,899 | |||
2018
|
73,226 | |||
2019
|
74,349 | |||
2020
|
75,500 |
NOTE 17
|
ON BALANCE SHEET DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES:
|
2015
|
2014
|
|||||||
Notional amount
|
$ | 189,629 | $ | 87,782 | ||||
Fair market value of contracts
|
15,162 | 32,795 |
2015
|
2014
|
|||||||
Total loans, beginning of year
|
$ | 7,449,140 | $ | 7,786,058 | ||||
New loans
|
5,226,432 | 5,249,565 | ||||||
Relationship change
|
(44,948 | ) | - | |||||
Repayments
|
(5,450,520 | ) | (5,586,483 | ) | ||||
Total loans, end of year
|
$ | 7,180,104 | $ | 7,449,140 |
2015
|
2014
|
|||||||||||||||
Estimated
|
Carrying
|
Estimated
|
Carrying
|
|||||||||||||
Fair Value
|
Value
|
Fair Value
|
Value
|
|||||||||||||
Financial Assets (in thousands)
|
||||||||||||||||
Loans
|
$ | 555,762 | $ | 544,053 | $ | 551,338 | $ | 518,202 | ||||||||
Financial Liabilities
|
||||||||||||||||
Time deposits
|
162,524 | 161,040 | 196,826 | 195,464 | ||||||||||||
Long-term debt
|
48,565 | 48,161 | 9,862 | 9,875 |
Level 1 -
|
Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
|
Level 2 -
|
Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
|
Level 3 -
|
Inputs to the valuation methodology are unobservable and significant to the fair value measurement.
|
Fair Value at December 31, 2015
|
Valuation Technique
|
Significant Unobservable Inputs
|
Range
|
||||||||
Impaired Loans
|
$ | 11,315 |
Discounted appraised value
|
Discount for selling costs and age of appraisals
|
15%-55 | % | |||||
Other Real Estate Owned
|
$ | 2,128 |
Discounted appraised value
|
Discount for selling costs and age of appraisals
|
15%-55 | % |
Fair Value at December 31, 2014
|
Valuation Technique
|
Significant Unobservable Inputs
|
Range
|
||||||||
Impaired Loans
|
$ | 13,223 |
Discounted appraised value
|
Discount for selling costs and age of appraisals
|
15%-55 | % | |||||
Other Real Estate Owned
|
$ | 3,507 |
Discounted appraised value
|
Discount for selling costs and age of appraisals
|
15%-55 | % |
December 31, 2015
|
Total
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
U. S. Treasuries
|
$ | 4,021 | $ | - | $ | 4,021 | $ | - | ||||||||
Government sponsored enterprises
|
8,074 | - | 8,074 | - | ||||||||||||
Mortgage-backed obligations of federal agencies
|
817 | - | 817 | - | ||||||||||||
Marketable equities
|
135 | - | 135 | - | ||||||||||||
Investment securities available for sale
|
13,047 | - | 13,047 | - | ||||||||||||
Total assets at fair value
|
$ | 13,047 | $ | - | $ | 13,047 | $ | - | ||||||||
Total liabilities at fair value
|
$ | - | $ | - | $ | - | $ | - | ||||||||
Derivative financial instruments at fair value
|
$ | 15 | $ | - | $ | 15 | $ | - |
December 31, 2014
|
Total
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
U. S. Treasuries
|
$ | 4,020 | $ | - | $ | 4,020 | $ | - | ||||||||
Government sponsored enterprises
|
8,038 | - | 8,038 | - | ||||||||||||
Mortgage-backed obligations of federal agencies
|
1,022 | - | 1,022 | - | ||||||||||||
Marketable equities
|
135 | - | 135 | - | ||||||||||||
Investment securities available for sale
|
13,215 | - | 13,215 | - | ||||||||||||
Total assets at fair value
|
$ | 13,215 | $ | - | $ | 13,215 | $ | - | ||||||||
Total liabilities at fair value
|
$ | - | $ | - | $ | - | $ | - | ||||||||
Derivative financial instruments at fair value
|
$ | 33 | $ | - | $ | 33 | $ | - |
December 31, 2015
|
Total
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
Other Real Estate Owned
|
$ | 2,128 | - | - | $ | 2,128 | ||||||||||
- | - | |||||||||||||||
Construction/Land Development
|
9,161 | - | - | 9,161 | ||||||||||||
Farmland
|
- | - | - | - | ||||||||||||
Real Estate
|
85 | - | - | 85 | ||||||||||||
Multi-Family
|
- | - | - | - | ||||||||||||
Commercial Real Estate
|
872 | - | - | 872 | ||||||||||||
Home Equity – closed end
|
- | - | - | - | ||||||||||||
Home Equity – open end
|
1,145 | - | - | 1,145 | ||||||||||||
Commercial & Industrial – Non-Real Estate
|
- | - | - | - | ||||||||||||
Consumer
|
- | - | - | - | ||||||||||||
Credit cards
|
- | - | - | - | ||||||||||||
Dealer Finance
|
52 | - | - | 52 | ||||||||||||
Impaired loans
|
11,315 | - | - | 11,315 | ||||||||||||
Total assets at fair value
|
$ | 13,443 | - | $ | - | $ | 13,443 | |||||||||
Total liabilities at fair value
|
$ | - | $ | - | $ | - | $ | - |
December 31, 2014
|
Total
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
Other Real Estate Owned
|
$ | 3,507 | - | - | $ | 3,507 | ||||||||||
- | - | |||||||||||||||
Construction/Land Development
|
11,507 | - | - | 11,507 | ||||||||||||
Farmland
|
- | - | - | - | ||||||||||||
Real Estate
|
825 | - | - | 825 | ||||||||||||
Multi-Family
|
- | - | - | - | ||||||||||||
Commercial Real Estate
|
891 | - | - | 891 | ||||||||||||
Home Equity – closed end
|
- | - | - | - | ||||||||||||
Home Equity – open end
|
- | - | - | - | ||||||||||||
Commercial & Industrial – Non-Real Estate
|
- | - | - | - | ||||||||||||
Consumer
|
- | - | - | - | ||||||||||||
Credit cards
|
- | - | - | - | ||||||||||||
Dealer Finance
|
- | - | - | - | ||||||||||||
Impaired loans
|
13,223 | - | - | 13,223 | ||||||||||||
Total assets at fair value
|
$ | 16,730 | - | $ | - | $ | 16,730 | |||||||||
Total liabilities at fair value
|
$ | - | $ | - | $ | - | $ | - |
Analysis of Capital
|
Regulatory Requirements
|
||||||||||||||||||
At December 31,
|
Adequately
|
Well
|
|||||||||||||||||
2015
|
2014
|
2013
|
Capitalized
|
Capitalized
|
|||||||||||||||
Tier1 capital:
|
|||||||||||||||||||
Preferred stock
|
$ | 9,425 | $ | 9,425 | $ | - | |||||||||||||
Common stock
|
16,427 | 16,459 | 12,559 | ||||||||||||||||
Retained earnings
|
59,205 | 53,815 | 42,089 | ||||||||||||||||
Intangible assets
|
(2,670 | ) | (2,670 | ) | (2,670 | ) | |||||||||||||
Accumulated other comprehensive income
|
(2,680 | ) | - | - | |||||||||||||||
Total Tier 1 Capital
|
$ | 79,707 | $ | 77,029 | $ | 51,978 | |||||||||||||
Tier 2 capital:
|
|||||||||||||||||||
Qualifying subordinated debt
|
$ | - | $ | - | $ | 8,487 | |||||||||||||
Allowance for loan losses
|
7,073 | 6,018 | 5,389 | ||||||||||||||||
Unrealized gains on AFS equity securities
|
- | - | - | ||||||||||||||||
Total risked based capital
|
$ | 86,780 | $ | 83,047 | $ | 65,854 | |||||||||||||
Common Equity Tier 1 Capital (Tier 1 less preferred stock)
|
$ | 70,282 | $ | - | $ | - | |||||||||||||
Risk-weighted assets
|
$ | 564,106 | $ | 478,725 | $ | 428,349 | |||||||||||||
Capital ratios:
|
|||||||||||||||||||
Total risk-based ratio
|
15.38 | % | 17.35 | % | 15.37 | % |
8.00
|
% |
10.00
|
% | |||||||||
Tier 1 risk-based ratio
|
14.13 | % | 16.09 | % | 12.13 | % |
4.00
|
% |
6.00
|
% | |||||||||
Common equity tier 1
|
12.46 | % |
4.5
|
% |
6.5
|
% | |||||||||||||
Total assets leverage ratio
|
12.18 | % | 12.88 | % | 9.37 | % |
3.00
|
% |
5.00
|
% |
Analysis of Capital
|
Regulatory Requirements
|
|||||||||||||||||||
At December 31,
|
Adequately
|
Well
|
||||||||||||||||||
2015
|
2014
|
2013
|
Capitalized
|
Capitalized
|
||||||||||||||||
Common Equity Tier 1 capital:
|
||||||||||||||||||||
Common stock
|
$ | 500 | $ | 500 | $ | 500 | ||||||||||||||
Capital surplus
|
37,971 | 37,971 | 18,971 | |||||||||||||||||
Retained earnings
|
45,855 | 40,114 | 35,361 | |||||||||||||||||
Intangible assets
|
(2,670 | ) | (2,670 | ) | (2,670 | ) | ||||||||||||||
Accumulated other comprehensive income
|
(2,680 | ) | - | - | ||||||||||||||||
Total Common Equity Tier 1 Capital
|
$ | 78,976 | $ | 75,915 | $ | 52,162 | ||||||||||||||
Tier 2 capital:
|
||||||||||||||||||||
Qualifying subordinated debt
|
$ | - | $ | - | $ | 8,487 | ||||||||||||||
Allowance for loan losses
|
7,077 | 6,006 | 5,384 | |||||||||||||||||
Unrealized gains on AFS securities
|
- | - | - | |||||||||||||||||
Total risked based capital
|
$ | 86,053 | $ | 81,921 | $ | 66,033 | ||||||||||||||
Risk-weighted assets
|
$ | 564,469 | $ | 478,512 | $ | 427,957 | ||||||||||||||
Capital ratios:
|
||||||||||||||||||||
Total risk-based ratio
|
15.24 | % | 17.12 | % | 15.43 | % | 8.00 | % | 10.00 | % | ||||||||||
Tier 1 risk-based ratio
|
13.99 | % | 15.86 | % | 12.19 | % | 4.00 | % | 6.00 | % | ||||||||||
Common equity tier 1
|
13.99 | % | 4.5 | % | 6.5 | % | ||||||||||||||
Total assets leverage ratio
|
12.06 | % | 12.70 | % | 9.41 | % | 3.00 | % | 5.00 | % |
2015
|
2014
|
|||||||
Assets
|
||||||||
Cash and cash equivalents
|
$ | 1,907,581 | $ | 1,214,140 | ||||
Investment in subsidiaries
|
81,646,312 | 76,684,121 | ||||||
Securities available for sale
|
135,000 | 135,000 | ||||||
Income tax receivable (including due from subsidiary)
|
- | 453,585 | ||||||
Total Assets
|
$ | 83,688,893 | $ | 78,486,846 | ||||
Liabilities
|
||||||||
Other liabilities
|
$ | - | $ | 137,977 | ||||
Income tax payable (including due form subsidiary)
|
847,001 | - | ||||||
Deferred income taxes
|
301,870 | 383,125 | ||||||
Demand obligations for low income housing investment
|
162,290 | 167,341 | ||||||
Total Liabilities
|
$ | 1,311,161 | $ | 688,443 | ||||
Stockholders’ Equity
|
||||||||
Preferred stock par value $5 per share, 400,000 shares authorized, issued and outstanding
|
$ | 9,425,123 | $ | 9,425,123 | ||||
Common stock par value $5 per share, 6,000,000 shares authorized, 3,285,404 and 3,291,766 shares issued and outstanding for 2015 and 2014, respectively
|
16,427,020 | 16,458,830 | ||||||
Retained earnings
|
59,205,404 | 53,814,416 | ||||||
Noncontrolling interest
|
- | 426,365 | ||||||
Accumulated other comprehensive income (loss)
|
(2,679,815 | ) | (2,326,331 | ) | ||||
Total Stockholders' Equity
|
82,377,732 | 77,798,403 | ||||||
Total Liabilities and Stockholders' Equity
|
$ | 83,688,893 | $ | 78,486,846 |
2015
|
2014
|
2013
|
||||||||||
Income
|
||||||||||||
Dividends from affiliate
|
$ | 2,500,000 | $ | 1,300,000 | $ | 1,550,000 | ||||||
Interest Income
|
- | - | 5 | |||||||||
Net limited partnership income (loss)
|
4,792 | - | (65,165 | ) | ||||||||
Total Income
|
2,504,792 | 1,300,000 | 1,484,840 | |||||||||
Expenses
|
||||||||||||
Other expense
|
21,316 | 7,100 | - | |||||||||
Administrative expenses
|
- | - | 60,209 | |||||||||
Total Expenses
|
21,316 | 7,100 | 60,209 | |||||||||
Net income before income tax expense (benefit)
|
||||||||||||
and undistributed subsidiary net income
|
2,483,476 | 1,292,900 | 1,424,631 | |||||||||
Income Tax Expense (Benefit)
|
(191,494 | ) | 243,492 | (239,908 | ) | |||||||
Income before undistributed subsidiary
|
||||||||||||
net income
|
2,674,970 | 1,049,408 | 1,664,539 | |||||||||
Undistributed subsidiary net income
|
5,742,039 | 4,752,201 | 3,051,254 | |||||||||
Net Income F&M Bank Corp.
|
$ | 8,417,009 | $ | 5,801,609 | $ | 4,715,793 |
2015
|
2014
|
2013
|
||||||||||
Cash Flows from Operating Activities
|
||||||||||||
Net income
|
$ | 8,417,009 | $ | 5,801,609 | $ | 4,715,793 | ||||||
Adjustments to reconcile net income to net
|
||||||||||||
cash provided by operating activities:
|
||||||||||||
Undistributed subsidiary income
|
(5,742,039 | ) | (4,752,201 | ) | (3,051,254 | ) | ||||||
Deferred tax (benefit) expense
|
(81,256 | ) | 279,928 | 8,577 | ||||||||
Decrease (increase) in other assets
|
1,300,586 | (444,885 | ) | (174,367 | ) | |||||||
Increase (decrease) in other liabilities
|
(143,028 | ) | 137,817 | (1,109,728 | ) | |||||||
Net change in deferred tax credits
|
- | - | (27,918 | ) | ||||||||
Amortization of limited partnership investments
|
- | - | 65,165 | |||||||||
Net Cash Provided by Operating Activities
|
3,751,272 | 1,022,268 | 426,268 | |||||||||
Cash Flows from Investing Activities
|
||||||||||||
Change in loans receivable
|
- | - | 1,000,000 | |||||||||
Purchase of securities available for sale
|
- | (135,000 | ) | - | ||||||||
Net Cash Provided by (Used in) Investing Activities
|
- | (135,000 | ) | 1,000,000 | ||||||||
Cash Flows from Financing Activities
|
||||||||||||
Capital contributed to subsidiary
|
- | (19,000,000 | ) | - | ||||||||
Proceeds from issuance of preferred stock
|
- | 9,425,123 | - | |||||||||
Repurchase of common stock
|
(289,119 | ) | - | - | ||||||||
Proceeds from issuance of common stock
|
146,418 | 12,055,709 | 213,429 | |||||||||
Dividends paid in cash
|
(2,915,130 | ) | (2,231,912 | ) | (1,705,881 | ) | ||||||
Net Provided by (Cash Used) in Financing Activities
|
(3,057,831 | ) | 248,920 | (1,492,452 | ) | |||||||
Net Increase (decreases) in Cash and Cash Equivalents
|
693,441 | 1,136,188 | (66,184 | ) | ||||||||
Cash and Cash Equivalents, Beginning of Year
|
1,214,140 | 77,952 | 144,136 | |||||||||
Cash and Cash Equivalents, End of Year
|
$ | 1,907,581 | $ | 1,214,140 | $ | 77,952 |
2015
|
2014
|
|||||||
Assets
|
||||||||
Cash and cash equivalents
|
$ | 1,071,293 | $ | 610,973 | ||||
Loans Receivable
|
763,534 | 818,054 | ||||||
Property and equipment, net
|
79,038 | 45,600 | ||||||
Other Assets
|
266,073 | 162,304 | ||||||
Total Assets
|
$ | 2,179,938 | $ | 1,636,931 | ||||
Liabilities
|
||||||||
Other liabilities
|
271,004 | 215,713 | ||||||
Total Liabilities
|
$ | 271,004 | $ | 215,713 | ||||
Equity
|
||||||||
Capital
|
219,634 | 219,634 | ||||||
Retained earnings
|
1,689,300 | 1,201,584 | ||||||
Total Equity
|
$ | 1,908,934 | $ | 1,421,218 | ||||
Total Liabilities and Equity
|
$ | 2,179,938 | $ | 1,636,931 |
2015
|
2014
|
2013
|
||||||||||
Income
|
||||||||||||
Mortgage origination income
|
$ | 2,645,235 | $ | 1,907,804 | $ | 2,528,108 | ||||||
Other Income
|
51,175 | 53,528 | 42,092 | |||||||||
Total Income
|
2,696,410 | 1,961,332 | 2,570,200 | |||||||||
Expenses
|
||||||||||||
Salaries and employee benefits
|
1,413,107 | 1,105,902 | 1,461,797 | |||||||||
Occupancy and equipment expense
|
212,858 | 177,014 | 164,717 | |||||||||
Management and professional fees
|
290,102 | 321,053 | 301,558 | |||||||||
Other
|
231,757 | 205,188 | 284,845 | |||||||||
Total Expenses
|
2,147,824 | 1,809,157 | 2,212,917 | |||||||||
Net income(loss)
|
$ | 548,586 | $ | 152,175 | $ | 357,283 |
Consolidated Balance Sheets - December 31, 2015 and 2014
|
38 |
Consolidated Statements of Income - Years ended December 31, 2015, 2014 and 2013
|
39 |
Consolidated Statements of Comprehensive Income - Years ended December 31, 2015, 2014 and 2013
|
40 |
Consolidated Statements of Changes in Stockholders’ Equity – Years ended December 31, 2015, 2014 and 2013
|
41 |
Consolidated Statements of Cash Flows - Years ended December 31, 2015, 2014 and 2013
|
42 |
Notes to the Consolidated Financial Statements
|
43 |
Report of Independent Registered Public Accounting Firm
|
80 |
3.1
|
Restated Articles of Incorporation of F & M Bank Corp., incorporated herein by reference from F & M Bank Corp.’s, Quarterly Report on Form 10-Q, filed November 14, 2013.
|
3.2
|
Articles of Amendment to the Articles of Incorporation of F&M Bank Corp. designating the Series A Preferred Stock incorporated herein by reference from F&M Bank Corp,’s current report on Form 8-K filed December 4, 2014.
|
3.3
|
Amended and Restated Bylaws of F & M Bank Corp., incorporated herein by reference from F & M Bank Corp.’s, Annual Report on Form 10-K, filed March 8, 2002.
|
10.1
|
Change in Control Severance Plan, incorporated herein by reference from Exhibit 10.1 to F&M Bank Corp.’s Registration Statement on Form S-1, filed December 22, 2010.
|
10.2
|
VBA Executives Deferred Compensation Plan for Farmers & Merchants Bank, incorporated herein by reference from F & M Bank Corp.’s Annual Report on Form 10-K, filed March 28, 2014.
|
10.3
|
VBA Directors Non-Qualified Deferred Compensation Plan for Farmers & Merchants Bank, incorporated herein by reference from F & M Bank Corp.’s Annual Report on Form 10-K, filed March 28, 2014.
|
21.0
|
Subsidiaries of the Registrant
|
23.1
|
Consent of Elliott Davis Decosimo, LLC
|
31.1
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
31.2
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
32.1
|
Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
101
|
The following materials from F&M Bank Corp.’s Annual Report on Form 10-K for the year ended December 31, 2015, formatted in Extensible Business Reporting Language (XBRL), include: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Income, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Changes in Stockholders’ Equity, (v) Consolidated Statements of Cash Flows and (vi) related notes (furnished herewith).
|
F & M Bank Corp
(Registrant)
|
|||
By:
|
/s/ Dean W. Withers
|
March 29, 2016
|
|
Dean W. Withers
|
Date
|
||
Director, President and Chief Executive Officer
|
|||
By:
|
/s/ Carrie A. Comer
|
March 29, 2016
|
|
Carrie A. Comer
|
Date
|
||
Senior Vice President and Chief Financial Officer
|
Signature
|
Title
|
Date
|
/s/ Larry A. Caplinger
|
Director
|
March 29, 2016
|
Larry A. Caplinger
|
||
/s/ Thomas L. Cline
|
Director, Chairman
|
March 29, 2016
|
Thomas L. Cline
|
||
/s/ John N. Crist
|
Director
|
March 29, 2016
|
John N. Crist
|
||
/s/ Ellen R. Fitzwater
|
Director
|
March 29, 2016
|
Ellen R. Fitzwater
|
||
/s/ Daniel J. Harshman
|
Director
|
March 29, 2016
|
Daniel J. Harshman
|
||
/s/ Richard S. Myers
|
Director
|
March 29, 2016
|
Richard S. Myers
|
||
/s/ Michael W. Pugh
|
Director
|
March 29, 2016
|
Michael W. Pugh
|
||
/s/ Christopher S. Runion
|
Director
|
March 29, 2016
|
Christopher S. Runion
|
||
/s/ Ronald E. Wampler
|
Director
|
March 29, 2016
|
Ronald E. Wampler
|
||
/s/ E. Ray Burkholder | Director |
March 29, 2016
|
E. Ray Burkholder
|
||
3.1
|
Restated Articles of Incorporation of F & M Bank Corp., incorporated herein by reference from F & M Bank Corp.’s, Quarterly Report on Form 10-Q, filed November 14, 2013.
|
3.2
|
Articles
|
3.3
|
Amended and Restated Bylaws of F & M Bank Corp., incorporated herein by reference from F & M Bank Corp.’s, Annual Report on Form 10-K, filed March 8, 2002.
|
10.1
|
Change in Control Severance Plan, incorporated herein by reference from Exhibit 10.1 to F&M Bank Corp.’s Registration Statement on Form S-1, filed December 22, 2010.
|
10.2
|
VBA Executives Deferred Compensation Plan for Farmers & Merchants Bank, incorporated herein by reference from F & M Bank Corp.’s Annual Report on Form 10-K, filed March 28, 2014.
|
10.3
|
VBA Directors Non-Qualified Deferred Compensation Plan for Farmers & Merchants Bank, incorporated herein by reference from F & M Bank Corp.’s Annual Report on Form 10-K, filed March 28, 2014.
|
21.0
|
Subsidiaries of the Registrant
|
23.1
|
Consent of Elliott Davis Decosimo, LLC
|
31.1
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
31.2
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
32.1
|
Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
101
|
The following materials from F&M Bank Corp.’s Annual Report on Form 10-K for the year ended December 31, 2015, formatted in Extensible Business Reporting Language (XBRL), include: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Income, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Changes in Stockholders’ Equity, (v) Consolidated Statements of Cash Flows and (vi) related notes (furnished herewith).
|
|
I, Dean W. Withers, certify that:
|
|
1.
|
I have reviewed this annual report on Form 10-K of F & M Bank Corp.:
|
|
2.
|
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;
|
|
3.
|
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;
|
|
4.
|
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)) for the registrant and have:
|
(a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and
|
|
(d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officers 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 function):
|
|
(a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.
|
Date: March 28, 2016
|
||
/s/ Dean W. Withers
|
||
Dean W. Withers
President and Chief Executive Officer
|
|
I, Carrie A. Comer, certify that:
|
|
1.
|
I have reviewed this annual report on Form 10-K of F & M Bank Corp.:
|
|
2.
|
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;
|
|
3.
|
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;
|
|
4.
|
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)) for the registrant and have:
|
|
(a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and
|
(d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officers 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 function):
|
|
(a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.
|
Date: March 29, 2016
|
||
/s/ Carrie A. Comer
|
||
Carrie A. Comer
Senior Vice President and Chief Financial Officer
|
/s/ Dean W. Withers
|
|
Dean W. Withers
|
/s/ Carrie A. Comer
|
|
Carrie A. Comer
|
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Document and Entity Information - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Mar. 21, 2016 |
Jun. 30, 2015 |
|
Employee Benefits Tables | |||
Entity Registrant Name | F&M BANK CORP | ||
Entity Central Index Key | 0000740806 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Is Entity a Well-known Seasoned Issuer? | No | ||
Is Entity a Voluntary Filer? | No | ||
Is Entity's Reporting Status Current? | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Common Stock, Shares Outstanding | 3,298,983 | ||
Entity Public Float | $ 66,066,952 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2015 |
Consolidated Balance Sheets (Parenthetical) - USD ($) |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Assets | ||
Held to maturity - fair value | $ 125,043 | $ 125,150 |
Time deposits | $ 100,000 | $ 100,000 |
STOCKHOLDERS EQUITY: | ||
Preferred Stock,par value | $ 5 | $ 5 |
Preferred Stock,shares authorized | 400,000 | 400,000 |
Preferred Stock,shares issued | 400,000 | 400,000 |
Preferred Stock,shares outstanding | 400,000 | 400,000 |
Common stock, par value | $ 5 | $ 5 |
Common stock shares authorized | 6,000,000 | 6,000,000 |
Common stock shares issued | 3,285,404 | 3,291,766 |
Common stock shares outstanding | 3,285,404 | 3,291,766 |
Consolidated Statements of Income (Parenthetical) |
12 Months Ended |
---|---|
Dec. 31, 2015
USD ($)
| |
Income Statement [Abstract] | |
Deposits | $ 100,000 |
Consolidated Statements of Comprehensive Income - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Net Income: | |||
Net Income - F & M Bank Corp | $ 8,417,009 | $ 5,801,609 | $ 4,715,793 |
Net Income attributable to noncontrolling interest | 164,575 | 45,653 | 107,185 |
Total net income | 8,581,584 | 5,847,262 | 4,822,978 |
Other comprehensive income (loss): | |||
Pension plan adjustment | (537,005) | (2,145,868) | 2,314,274 |
Tax effect | 182,582 | 729,595 | (786,853) |
Pension plan adjustment, net of tax | (354,423) | (1,416,273) | 1,527,421 |
Unrealized holding gains (losses) on available-for-sale securities | 1,423 | 22,386 | (75,127) |
Tax effect | (484) | (7,611) | 25,543 |
Unrealized holding gain (losses), net of tax | 939 | 14,775 | (49,584) |
Other comprehensive income | (353,484) | (1,401,498) | 1,477,837 |
Total comprehensive income | $ 8,228,100 | $ 4,445,764 | $ 6,300,815 |
Consolidated Statements of Changes in Stockholders' Equity - USD ($) |
Preferred Stock |
Common Stock |
Additional Paid In Capital |
Retained Earnings |
Noncontrolling Interest |
Accumulated Other comprehensive Income (Loss) |
Total |
---|---|---|---|---|---|---|---|
Begining balance, Amount at Dec. 31, 2012 | $ 12,497,720 | $ 2,951,967 | $ 35,974,812 | $ 362,131 | $ (2,402,670) | $ 49,383,960 | |
Net income consolidated | $ 4,715,793 | $ 107,185 | 4,822,978 | ||||
Other comprehensive income (loss) | $ 1,477,837 | 1,477,837 | |||||
Minority Interest Contributed Capital (Distributions) | $ (51,088) | (51,088) | |||||
Dividends on preferred stock | 0 | ||||||
Dividends on common stock | $ (1,705,881) | (1,705,881) | |||||
Common stock repurchased | 0 | ||||||
Common Stock issued | $ 60,955 | $ 152,474 | 213,429 | ||||
Ending balance, Amount at Dec. 31, 2013 | $ 12,558,675 | $ 3,104,441 | $ 38,984,724 | $ 418,228 | $ (924,833) | 54,141,235 | |
Net income consolidated | $ 5,801,609 | $ 45,653 | 5,847,262 | ||||
Other comprehensive income (loss) | $ (1,401,498) | (1,401,498) | |||||
Minority Interest Contributed Capital (Distributions) | $ (37,516) | (37,516) | |||||
Dividends on preferred stock | $ (127,500) | (127,500) | |||||
Dividends on common stock | $ (2,104,412) | (2,104,412) | |||||
Preferred stock issued | $ 9,425,123 | 9,425,123 | |||||
Common stock repurchased | 0 | ||||||
Common Stock issued | $ 3,900,155 | $ 8,155,554 | 12,055,709 | ||||
Ending balance, Amount at Dec. 31, 2014 | $ 9,425,123 | $ 16,458,830 | $ 11,259,995 | $ 42,554,421 | $ 426,365 | $ (2,326,331) | 77,798,403 |
Net income consolidated | $ 8,417,009 | $ 164,575 | 8,581,584 | ||||
Other comprehensive income (loss) | $ (353,484) | (353,484) | |||||
Minority Interest Contributed Capital (Distributions) | $ (18,260) | (18,260) | |||||
Dividends on preferred stock | $ (510,000) | (510,000) | |||||
Dividends on common stock | $ (2,405,130) | (2,405,130) | |||||
Common stock repurchased | $ (66,390) | $ (222,729) | (289,119) | ||||
Common Stock issued | 34,580 | 111,838 | 146,418 | ||||
Ending balance, Amount at Dec. 31, 2015 | $ 9,425,123 | $ 16,427,020 | $ 11,149,104 | $ 48,056,300 | $ 572,680 | $ (2,679,815) | $ 82,950,412 |
Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - shares |
12 Months Ended | ||
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Dec. 31, 2014 |
Dec. 31, 2013 |
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Statement of Stockholders' Equity [Abstract] | |||
Preferred stock issued | 400,000 | ||
Common Stock issued | 6,916 | 780,031 | 12,141 |
Common stock repurchased | 13,277 |
1. NATURE OF OPERATIONS |
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Dec. 31, 2015 | |
Nature Of Operations | |
NOTE 1. NATURE OF OPERATIONS |
F & M Bank Corp. (the Company), through its subsidiary Farmers & Merchants Bank (the Bank), operates under a charter issued by the Commonwealth of Virginia and provides commercial banking services. As a state chartered bank, the Bank is subject to regulation by the Virginia Bureau of Financial Institutions and the Federal Reserve Bank. The Bank provides services to customers located mainly in Rockingham, Shenandoah, Page and Augusta Counties in Virginia, and the adjacent county of Hardy, West Virginia. Services are provided at eleven branch offices, a Dealer Finance Division and a loan production office. The Company offers insurance, mortgage lending and financial services through its subsidiaries, TEB Life Insurance, Inc., Farmers & Merchants Financial Services, Inc, and VBS Mortgage, LLC. |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | The accounting and reporting policies of the Company and its subsidiaries conform to generally accepted accounting principles and to accepted practice within the banking industry.
The following is a summary of the more significant policies:
Principles of Consolidation
The consolidated financial statements include the accounts of Farmers and Merchants Bank, TEB Life Insurance Company, Farmers & Merchants Financial Services, Inc. and VBS Mortgage, LLC, (net of minority interest). Significant inter-company accounts and transactions have been eliminated.
Use of Estimates in the Preparation of Financial Statements
In preparing the financial statements, management is required to make estimates and assumptions that affect the reported amounts in those statements; actual results could differ significantly from those estimates. Material estimates that are particularly susceptible to significant changes in the near term are the determination of the allowance for loan losses, which is sensitive to changes in local and national economic conditions, and the other than temporary impairment of investments in the investment portfolio.
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits at other financial institutions whose initial maturity is ninety days or less and Federal funds sold.
Investment Securities
Management reviews the securities portfolio and classifies all securities as either held to maturity or available for sale at the date of acquisition. Securities that the Company has both the positive intent and ability to hold to maturity (at time of purchase) are classified as held to maturity securities. All other securities are classified as available for sale. Securities held to maturity are carried at historical cost and adjusted for amortization of premiums and accretion of discounts, using the effective interest method. Securities available for sale are carried at fair value with any valuation adjustments reported, net of deferred taxes, as a part of other accumulated comprehensive income.
Interest, amortization of premiums and accretion of discounts on securities are reported as interest income using the effective interest method. Gains (losses) realized on sales and calls of securities are determined on the specific identification method.
Accounting for Historic Rehabilitation and Low Income Housing Partnerships
The Company periodically invests in low income housing partnerships whose primary benefit is the distribution of federal income tax credits to partners. The Company recognizes these benefits and the cost of the investments over the life of the partnership (usually 15 years). In addition, state and federal historic rehabilitation credits are generated from some of the partnerships. Amortization of these investments is prorated based on the amount of benefits received in each year to the total estimated benefits over the life of the projects. The effective yield method is used to record the income statement effects of these investments.
Income Taxes
Amounts provided for income tax expense are based on income reported for financial statement purposes rather than amounts currently payable under income tax laws. Deferred taxes, which arise principally from temporary differences between the period in which certain income and expenses are recognized for financial accounting purposes and the period in which they affect taxable income, are included in the amounts provided for income taxes.
Loans Held for Investment
Loans are carried on the balance sheet net of any unearned interest and the allowance for loan losses. Interest income on loans is determined using the effective interest method on the daily amount of principal outstanding except where serious doubt exists as to collectability of the loan, in which case the accrual of income is discontinued.
Loans Held for Sale
These loans consists of fixed rate loans made through its subsidiary, VBS Mortgage and loans purchased from Gateway Savings Bank, Oakland, CA and Northpointe Bank, Grand Rapids, MI.
VBS Mortgage originates conforming mortgage loans for sale in the secondary market. The bank (VBS) gives the customer a rate commitment at the time the rate is locked. The bank then immediately gets a rate lock-in from the investor that will be buying the loan upon closing. Both the rate lock and the purchase commitments (which is a blanket agreement) are best effort agreements, subject to final approval and underwriting. Because either party can walk away from these agreements prior to closing, neither the rate lock commitment nor the purchase commitment is considered a derivative contract. The bank provides a warehouse line for the Mortgage subsidiary after closing, until the loan is purchased by the investor. The average time on the line is two or three weeks. Although VBS does have a line, loans are actually assigned to the bank at closing and then reassigned prior to purchase from investor. There were $3.6 million of these mortgage loans held for resale at the end of the year. All of these loans are under contract to deliver to an investor as a specified price. Because of this and the short holding period, these loans are carried at par and a gain is recorded at transfer to the investor. The effect of not marking these loans to market is not material to the current year financial statements.
Gateway Savings Bank (Gateway) loans are originated by a network of mortgage loan originators throughout the United States. A takeout commitment is in place at the time the loans are purchased. The Gateway arrangement has been used since 2003 as a higher yielding alternative to federal funds sold or investment securities. These loans are short-term, residential real estate loans that have an average life in our portfolio of approximately two weeks. The Bank holds these loans during the period of time between loan closing and when the loan is paid off by the ultimate secondary market purchaser. Gateway Savings Bank discontinued the loan participation program in December of 2014 and the Company became a participant with Northpointe Bank which obtained the Gateway Savings Bank program and incorporated it into their existing program. The Northpointe Bank program and procedures are the same as described above for Gateway.
Allowance for Loan and Lease Losses
The provision for loan losses charged to operations is an amount sufficient to bring the allowance for loan losses to an estimated balance that management considers adequate to absorb potential losses in the portfolio. Loans are charged against the allowance when management believes the collectability of the principal is unlikely. Recoveries of amounts previously charged-off are credited to the allowance. Managements determination of the adequacy of the allowance is based on an evaluation of the composition of the loan portfolio, the value and adequacy of collateral, current economic conditions, historical loan loss experience, and other risk factors. Management believes that the allowance for loan losses is adequate. While management uses available information to recognize losses on loans, future additions to the allowance may be necessary based on changes in economic conditions, particularly those affecting real estate values. In addition, regulatory agencies, as an integral part of their examination process, periodically review the Companys allowance for loan losses. Such agencies may require the Company to recognize additions to the allowance based on their judgments about information available to them at the time of their examination.
A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrowers prior payment record, and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan by loan basis for commercial and construction loans by either the present value of expected future cash flows discounted at the loans effective interest rate, the loans obtainable market price, or the fair value of the collateral if the loan is collateral dependent.
Other Real Estate Owned (OREO)
As of December 31, 2015, the Bank had $2.1 million classified as OREO on the balance sheet, compared to $3.5 million as of December 31, 2014. The table in Note 9 reflects the OREO activity in 2015. The Companys policy is to carry OREO on its balance sheet at the lower of cost or market. Values are reviewed periodically and additional losses are recognized if warranted based on market conditions.
Nonaccrual Loans
Loans are placed on nonaccrual status when they become ninety days or more past due, unless there is an expectation that the loan will either be brought current or paid in full in a reasonable period of time.
Bank Premises and Equipment
Bank premises and equipment are stated at cost less accumulated depreciation. Depreciation is charged to income over the estimated useful lives of the assets on a combination of the straight-line and accelerated methods. The ranges of the useful lives of the premises and equipment are as follows:
Maintenance, repairs, and minor improvements are charged to operations as incurred. Gains and losses on dispositions are reflected in other income or expense.
Goodwill
The Company accounts for goodwill and intangible assets under ASC 805, Business Combination and ASC 350 Intangibles, respectively.
Goodwill totaled $2,669,517 at December 31, 2015 and 2014. The goodwill is no longer amortized, but instead tested for impairment at least annually. Based on the testing, there were no impairment charges for 2015, 2014 or 2013.
Pension Plans
The Bank has a qualified noncontributory defined benefit pension plan which covers all full time employees hired prior to April 1, 2012. The benefits are primarily based on years of service and earnings. The Company complies with ASC 325-960 Defined Benefit Pension Plans which requires recognition of the over-funded or under-funded status of pension and other postretirement benefit plans on the balance sheet. Under ASC 325-960, gains and losses, prior service costs and credits, and any remaining transition amounts that have not yet been recognized through net periodic benefit cost will be recognized in accumulated other comprehensive income, net of tax effects, until they are amortized as a component of net periodic cost.
Advertising Costs
The Company follows the policy of charging the cost of advertising to expense as incurred. Total advertising costs included in other operating expenses for 2015, 2014, and 2013 were $401,138, $317,780, and $278,555, respectively.
Comprehensive Income
Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income. Certain changes in assets and liabilities and changes in pension plan funding status, such as unrealized gains and losses on available-for-sale securities and gains or losses on certain derivative contracts, are reported as a separate component of the equity section of the balance sheet. Such items, along with operating net income, are components of comprehensive income.
Derivative Financial Instruments and Change in Accounting Principle
On January 1, 2001, the Company adopted ASC 815 Derivative and Hedging Investments (formerly SFAS No. 133). This statement requires that all derivatives be recognized as assets or liabilities in the balance sheet and measured at fair value.
Under ASC 815, the gain or loss on a derivative designated and qualifying as a fair value hedging instrument, as well as the offsetting gain or loss on the hedging item attributable to the risk being hedged, is recognized currently in earnings in the same accounting period. The effective portion of the gain or loss on a derivative designated and qualifying as a cash flow hedging instrument is initially reported as a component of other comprehensive income and subsequently reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. The ineffective portion of the gain or loss on the derivative instrument, if any, is recognized currently in earnings.
Interest rate derivative financial instruments receive hedge accounting treatment only if they are designated as a hedge and are expected to be, and are, effective in substantially reducing interest rate risk arising from the assets and liabilities identified as exposing the Company to risk. Those derivative financial instruments that do not meet the hedging criteria discussed below would be classified as trading activities and would be recorded at fair value with changes in fair value recorded in income. Derivative hedge contracts must meet specific effectiveness tests (i.e., over time the change in their fair values due to the designated hedge risk must be within 80 to 125 percent of the opposite change in the fair value of the hedged assets or liabilities). Changes in fair value of the derivative financial instruments must be effective at offsetting changes in the fair value of the hedging items due to the designated hedge risk during the term of the hedge. Further, if the underlying financial instrument differs from the hedged asset or liability, there must be a clear economic relationship between the prices of the two financial instruments. If periodic assessment indicates derivatives no longer provide an effective hedge, the derivatives contracts would be closed out and settled or classified as a trading activity.
Earnings per Share
Accounting guidance specifies the computation, presentation and disclosure requirements for earnings per share (EPS) for entities with publicly held common stock or potential common stock such as options, warrants, convertible securities or contingent stock agreements if those securities trade in a public market. Basic EPS is computed by dividing net income by the weighted average number of common shares outstanding. Diluted EPS is similar to the computation of basic EPS except that the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive common shares had been issued. The dilutive effect of conversion of preferred stock is reflected in the diluted earnings per common share calculation.
Net income available to common stockholders represents consolidated net income adjusted for preferred dividends declared.
The following table provides a reconciliation of net income to net income available to common stockholders for the periods presented:
The following table shows the effect of dilutive preferred stock conversion on the Company's earnings per share for the periods indicated:
There were no dilutive securities for the years ended December 31, 2013.
Recent Accounting Pronouncements
In May 2014, the Financial Accounting Standards Board (FASB) issued guidance to change the recognition of revenue from contracts with customers. The core principle of the new guidance is that an entity should recognize revenue to reflect the transfer of goods and services to customers in an amount equal to the consideration the entity receives or expects to receive. The guidance will be effective for the Company for reporting periods beginning after December 15, 2017. Management is currently analyzing the impact of the adoption of this guidance on the Companys consolidated financial statements. The Company does not expect these amendments to have a material effect on its financial statements.
In January 2015, the FASB issued guidance to eliminate from U.S. GAAP the concept of an extraordinary item, which is an event or transaction that is both (1) unusual in nature and (2) infrequently occurring. Under the new guidance, an entity will no longer (1) segregate an extraordinary item from the results of ordinary operations; (2) separately present an extraordinary item on its income statement, net of tax, after income from continuing operations; or (3) disclose income taxes and earnings-per-share data applicable to an extraordinary item. The amendments will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015, with early adoption permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. The Company will apply the guidance prospectively. The Company does not expect these amendments to have a material effect on its financial statements.
In February 2015, the FASB issued guidance which amends the consolidation requirements and significantly changes the consolidation analysis required under U.S. GAAP. Although the amendments are expected to result in the deconsolidation of many entities, the Company will need to reevaluate all its previous consolidation conclusions. The amendments will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015, with early adoption permitted (including during an interim period), provided that the guidance is applied as of the beginning of the annual period containing the adoption date. The Company does not expect these amendments to have a material effect on its financial statements.
In April 2015, the FASB issued guidance which provides a practical expedient that permits the Company to measure defined benefit plan assets and obligations using the month-end that is closest to the Companys fiscal year-end. The amendments will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015, with early adoption permitted. The Company does not expect these amendments to have a material effect on its financial statements.
In April 2015, the FASB issued guidance which provides guidance to customers about whether a cloud computing arrangement includes a software license. The amendments will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015, with early adoption permitted. The Company does not expect these amendments to have a material effect on its financial statements.
In June 2015, the FASB issued amendments to clarify the Accounting Standards Codification (ASC), correct unintended application of guidance, and make minor improvements to the ASC that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. The amendments were effective upon issuance (June 12, 2015) for amendments that do not have transition guidance. Amendments that are subject to transition guidance will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. The Company does not expect these amendments to have a material effect on its financial statements.
In August 2015, the FASB deferred the effective date of ASU 2014-09, Revenue from Contracts with Customers. As a result of the deferral, the guidance in ASU 2014-09 will be effective for the Company for reporting periods beginning after December 15, 2017. Management is currently analyzing the impact of the adoption of this guidance on the Companys consolidated financial statements. The Company does not expect these amendments to have a material effect on its financial statements.
In September 2015, the FASB amended the Business Combinations topic of the Accounting Standards Codification to simplify the accounting for adjustments made to provisional amounts recognized in a business combination by eliminating the requirement to retrospectively account for those adjustments. The amendments will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015, with early adoption permitted for financial statements that have not been issued. All entities are required to apply the amendments prospectively to adjustments to provisional amounts that occur after the effective date. The Company does not expect these amendments to have a material effect on its financial statements.
In November 2015, the FASB amended the Income Taxes topic of the Accounting Standards Codification simplify the presentation of deferred income taxes by requiring that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The amendments will be effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods, with early adoption permitted as of the beginning of an interim or annual reporting period. The Company will apply the guidance prospectively. The Company does not expect these amendments to have a material effect on its financial statements.
In January 2016, the FASB amended the Financial Instruments topic of the Accounting Standards Codification to address certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The amendments will be effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company will apply the guidance by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. The amendments related to equity securities without readily determinable fair values will be applied prospectively to equity investments that exist as of the date of adoption of the amendments. The Company does not expect these amendments to have a material effect on its financial statements.
In February 2016, the FASB issued new guidance to change accounting for leases and that will generally require most leases to be recognized on the balance sheet. The new lease standard only contains targeted changes to accounting by lessors, however, lessees will be required to recognize most leases in their balance sheets as lease liabilities for lease payments and right-of-use assets representing the lessees rights to use the underlying assets for the lease terms for lease arrangements longer than 12 months. Under this approach, a lessee will account for most existing capital/finance leases as Type A leases and most existing operating leases as Type B leases. Type A and Type B leases have unique accounting and disclosure requirements. Existing sale-leaseback guidance, including guidance for real estate, will be replaced with a new model applicable to both lessees and lessors. The new guidance will be effective for fiscal years (and interim periods within those fiscal years) beginning after December 15, 2018. Early adoption is permitted for all companies and organizations. Management is currently analyzing the impact of the adoption of this guidance on the Companys consolidated financial statements, including assessing changes that might be necessary to information technology systems, processes and internal controls to capture new data and address changes in financial reporting.
Standards that have been issued or proposed by the FASB or other standards-setting bodies are not expected to have a material impact on the Companys financial position, results of operations or cash flows.
Subsequent Events
In preparing these financial statements, the Company has evaluated events and transactions for potential recognition or disclosure through the date the financial statements were issued. |
3. CASH AND DUE FROM BANKS |
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Accounting Policies [Abstract] | |
NOTE 3. CASH AND DUE FROM BANKS | The Bank is required to maintain average reserve balances based on a percentage of deposits. The average balance of cash, which the Federal Reserve Bank requires to be on reserve, was $25,000 for the years ended December 31, 2015 and 2014. |
4. INVESTMENT SECURITIES |
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NOTE 4. INVESTMENT SECURITIES | The amortized cost and fair value of securities held to maturity are as follows:
The amortized cost and fair value of securities available for sale are as follows:
The amortized cost and fair value of securities at December 31, 2015, by contractual maturity are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
There were no sales of debt or equity securities during 2015, 2014 or 2013.
The carrying value (which approximates fair value) of securities pledged by the Bank to secure deposits and for other purposes amounted to $12,912,000 at December 31, 2015 and $13,080,000 at December 31, 2014.
Other investments consist of investments in nineteen low-income housing and historic equity partnerships (carrying basis of $7,213,000), stock in the Federal Home Loan Bank (carrying basis of $3,441,000), and various other investments (carrying basis of $1,503,000). The interests in the low-income housing and historic equity partnerships have limited transferability and the interests in the other stocks are restricted as to sales. The market values of these securities are estimated to approximate their carrying value as of December 31, 2015. At December 31, 2015, the Company was committed to invest an additional $4,358,041 in eight low-income housing limited partnerships. These funds will be paid as requested by the general partner to complete the projects. This additional investment has been reflected in the above carrying basis and in accrued liabilities on the balance sheet.
The primary purpose of the investment portfolio is to generate income and meet liquidity needs of the Company through readily saleable financial instruments. The portfolio includes fixed rate bonds, whose prices move inversely with rates and variable rate bonds. At the end of any accounting period, the investment portfolio has unrealized gains and losses. The Company monitors the portfolio, which is subject to liquidity needs, market rate changes and credit risk changes, to see if adjustments are needed. The primary concern in a loss situation is the credit quality of the business behind the instrument. Bonds deteriorate in value due to credit quality of the individual issuer and changes in market conditions. These losses relate to market conditions and the timing of purchases.
A summary of these losses (in thousands) is as follows:
Management evaluates securities for other-than-temporary impairment on at least a quarterly basis, and more frequently when economic or market conditions warrant such evaluation. Consideration is given to (1) the length of time and the extent to which the fair value has been less than the cost, (2) the financial condition and near-term prospects of the issuer, and (3) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery of fair value. The Company does not intend to sell these securities and it is more likely than not that the Company will not be required to sell these securities before recovery of their amortized cost. The Company did not recognize any other-than-temporary impairment losses in 2015, 2014 or 2013. |
5. LOANS |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTE 5. LOANS | Loans held for investment as of December 31:
The Company has pledged loans as collateral for borrowings with the Federal Home Loan Bank of Atlanta totaling $182,312,000 and $183,483,000 as of December 31, 2015 and 2014, respectively. The Company maintains a blanket lien on its entire residential real estate portfolio and also began pledges commercial and home equity loans.
The following is a summary of information pertaining to impaired loans (in thousands):
The following is a summary of information pertaining to impaired loans (in thousands):
The Recorded Investment is defined as the principal balance less principal payments and charge-offs.
Loans held for sale consists of loans originated by VBS Mortgage and the Banks commitment to purchase residential mortgage loan participations from Gateway Bank and Northpointe Bank. The volume of loans purchased fluctuates due to a number of factors including changes in secondary market rates, which affects demand for mortgage loans; the number of participating banks involved in the program; the number of mortgage loan originators selling loans to the lead bank and the funding capabilities of the lead bank. Loans held for sale as of December 31, 2015 and 2014 were $57,805,529 and $13,381,941, respectively. |
6. ALLOWANCE FOR LOAN LOSSES |
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Notes to Financial Statements | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTE 6. ALLOWANCE FOR LOAN LOSSES | A summary of changes in the allowance for loan losses is shown in the following schedule:
A summary of changes in the allowance for loan losses is shown in the following schedule:
Recorded Investment in Loan Receivables (in thousands):
Aging of Past Due Loans Receivable (in thousands)
Description of loan grades:
Grade 1 Minimal Risk: Excellent credit, superior asset quality, excellent debt capacity and coverage, and recognized management capabilities.
Grade 2 Modest Risk: Borrower consistently generates sufficient cash flow to fund debt service, excellent credit, above average asset quality and liquidity.
Grade 3 Average Risk: Borrower generates sufficient cash flow to fund debt service. Employment (or business) is stable with good future trends. Credit is very good.
Grade 4 Acceptable Risk: Borrowers cash flow is adequate to cover debt service; however, unusual expenses or capital expenses must by covered through additional long term debt. Employment (or business) stability is reasonable, but future trends may exhibit slight weakness. Credit history is good. No unpaid judgments or collection items appearing on credit report.
Grade 5 Marginally acceptable: Credit to borrowers who may exhibit declining earnings, may have leverage that is materially above industry averages, liquidity may be marginally acceptable. Employment or business stability may be weak or deteriorating. May be currently performing as agreed, but would be adversely affected by developing factors such as layoffs, illness, reduced hours or declining business prospects. Credit history shows weaknesses, past dues, paid or disputed collections and judgments, but does not include borrowers that are currently past due on obligations or with unpaid, undisputed judgments.
Grade 6 Watch: Loans are currently protected, but are weak due to negative balance sheet or income statement trends. There may be a lack of effective control over collateral or the existence of documentation deficiencies. These loans have potential weaknesses that deserve managements close attention. Other reasons supporting this classification include adverse economic or market conditions, pending litigation or any other material weakness. Existing loans that become 60 or more days past due are placed in this category pending a return to current status.
Grade 7 Substandard: Loans having well-defined weaknesses where a payment default and or loss is possible, but not yet probable. Cash flow is inadequate to service the debt under the current payment, or terms, with prospects that the condition is permanent. Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the borrower and there is the likelihood that collateral will have to be liquidated and/or guarantor(s) called upon to repay the debt. Generally, the loan is considered collectible as to both principal and interest, primarily because of collateral coverage, however, if the deficiencies are not corrected quickly; there is a probability of loss.
Grade 8 Doubtful: The loan has all the characteristics of a substandard credit, but available information indicates it is unlikely the loan will be repaid in its entirety. Cash flow is insufficient to service the debt. It may be difficult to project the exact amount of loss, but the probability of some loss is great. Loans are to be placed on non-accrual status when any portion is classified doubtful. |
7. TROUBLED DEBT RESTRUCTURING |
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Notes to Financial Statements | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTE 7. TROUBLED DEBT RESTRUCTURING | In the determination of the allowance for loan losses, management considers troubled debt restructurings and subsequent defaults in these restructurings by adjusting the loan grades of such loans, which figure into the environmental factors associated with the allowance. Defaults resulting in charge-offs affect the historical loss experience ratios which are a component of the allowance calculation. Additionally, specific reserves may be established on restructured loans evaluated individually.
During the twelve months ended December 31, 2015, the Bank modified 16 loans that were considered to be troubled debt restructurings. These modifications include rate adjustments, revisions to amortization schedules, suspension of principal payments for a temporary period, re-advancing funds to be applied as payments to bring the loan(s) current, or any combination thereof.
As of December 31, 2015, there were no loans restructured in the previous twelve months, in default. A restructured loan is considered in default when it becomes 90 days past due.
During the twelve months ended December 31, 2014, the Bank modified 3 loans that were considered to be troubled debt restructurings. These modifications include rate adjustments, revisions to amortization schedules, suspension of principal payments for a temporary period, re-advancing funds to be applied as payments to bring the loan(s) current, or any combination thereof.
As of December 31, 2014, there was one loan restructured in the previous twelve months, in default. This was a real estate loan totaling $97,000. A restructured loan is considered in default when it becomes 90 days past due. |
8. BANK PREMISES AND EQUIPMENT |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Notes to Financial Statements | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTE 8. BANK PREMISES AND EQUIPMENT | Bank premises and equipment as of December 31 are summarized as follows:
Provisions for depreciation of $709,237 in 2015, $612,116 in 2014, and $581,625 in 2013 were charged to operations. |
9. OTHER REAL ESTATE OWNED |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes to Financial Statements | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTE 9. OTHER REAL ESTATE OWNED | The tables below reflect OREO activity for 2015 and 2014:
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10. DEPOSITS |
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Banking and Thrift [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTE 10. DEPOSITS | The composition of deposits at December 31, 2015 and 2014 was as follows:
The Companys deposits over $250,000 were not readily available from their data processing system.
At December 31, 2015, the scheduled maturities of time deposits are as follows:
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11. SHORT-TERM DEBT |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTE 11. SHORT-TERM DEBT |
Short-term debt, all maturing within 12 months, information is summarized as follows:
Repurchase agreements are secured transactions with customers and generally mature the day following the date sold. Federal funds purchased are unsecured overnight borrowings from other financial institutions. FHLB daily rate credit, which is secured by the loan portfolio, is a variable rate loan that acts as a line of credit to meet financing needs.
As of December 31, 2015, the Company had unsecured lines of credit with correspondent banks totaling $26,000,000, which may be used in the management of short-term liquidity. |
12. LONG-TERM DEBT |
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Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||
NOTE 12. LONG-TERM DEBT | The Company borrowed $40,000,000 from the Federal Home Loan Bank of Atlanta (FHLB) in 2015 to fund loan growth and extend maturities of long term debt at lower rates. They borrowed $10,000,000 in 2014 and there were no new borrowings from FHLB in 2013. The interest rates on the notes payable are fixed at the time of the advance and range from 1.16% to 2.56%; the weighted average interest rate was 1.86% and 2.33% at December 31, 2015 and 2014, respectively. The balance of these obligations at December 31, 2015 and December 31, 2014 were $48,161,000 and $9,875,000, respectively. The long-term debt is secured by qualifying mortgage loans owned by the Company.
The maturities of long-term Federal Home Loan Bank borrowings as of December 31, 2015 are as follows:
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13. INCOME TAX EXPENSE |
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Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTE 13. INCOME TAX EXPENSE | The components of the income tax expense are as follows:
The components of the deferred taxes as of December 31 are as follows:
The following table summarizes the differences between the actual income tax expense and the amounts computed using the federal statutory tax rates:
Management evaluated the likelihood of recognizing the Companys deferred tax asset. Based on the evidence supporting this asset, it was decided to record a partial valuation allowance against the asset on the Companys books in the amount of $582,778 for the years ended 2015 and 2014. A deferred tax asset is created from the difference between book income using Generally Accepted Accounting Principles and taxable income.
The Corporation has analyzed the tax positions taken or expected to be taken in its tax returns and concluded it has no liability related to uncertain tax positions in accordance with accounting guidance related to income taxes.
The Corporation and its subsidiaries file federal income tax returns and state income tax returns. With few exceptions, the Corporation is no longer subject to federal or state income tax examinations by tax authorities for years before 2012. |
14. EMPLOYEE BENEFITS |
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NOTE 14. EMPLOYEE BENEFITS | Defined Benefit Pension Plan
The Bank has a qualified noncontributory defined benefit pension plan which covers substantially all of its employees hired before April 1, 2012. The benefits are primarily based on years of service and earnings.
The following table provides a reconciliation of the changes in the benefit obligations and fair value of plan assets for 2015, 2014 and 2013:
The fair value of plan assets is measured based on the fair value hierarchy as discussed in Note 21, Fair Value Measurements to the Consolidated Financial Statements. The valuations are based on third party data received as of the balance sheet date. All plan assets are considered Level 1 assets, as quoted prices exist in active markets for identical assets.
Funding Policy
The Companys contributions for 2015, 2014 and 2013 were $750,000, $1,500,000, and $750,000, respectively. Due to the current funding status of the plan, the Company will not make a contribution in 2016. The net periodic pension cost of the plan for 2016 will be approximately $438,000.
Long-Term Rate of Return
The plan sponsor selects the expected long-term rate of return on assets assumption in consultation with their advisors and the plan actuary, and with concurrence from their auditor. This rate is intended to reflect the average rate of earnings expected to be earned on the funds invested or to be invested to provide plan benefits. Historical performance is reviewed, especially with respect to real rates of return (net of inflation) for the major asset classes held or anticipated to be held by the trust. Undue weight is not given to recent experience, which may not continue over the measurement period, with higher significance placed on current forecasts of future long-term economic conditions.
Because assets are held in a qualified trust, anticipated returns are not reduced for taxes. Further solely for this purpose the plan is assumed to continue in force and not terminate during the period during which the assets are invested. However, consideration is given to the potential impact of current and future investment policy, cash flow into and out of the trust, and expenses (both investment and non-investment) typically paid from plan assets (to the extent such expenses are not explicitly estimated within periodic cost).
Asset Allocation
The trust fund is sufficiently diversified to maintain a reasonable level of risk without imprudently sacrificing return, with a targeted asset allocation of 40% fixed income and 60% equity. The Investment Manager selects investment fund managers with demonstrated experience and expertise, and funds with demonstrated historical performance, for the implementation of the Plans investment strategy. The Investment Manager will consider both actively and passively managed investment strategies and will allocate funds across the asset classes to develop an efficient investment structure. The pension plans allocations as of December 31, 2015 and 2014 were 60% equity and 40% fixed and 61% equity and 39% fixed, respectively.
Estimated Future Benefit Payments
Employee Stock Ownership Plan (ESOP)
The Company sponsors an ESOP which provides stock ownership to substantially all employees of the Bank. The Plan provides total vesting upon the attainment of five years of service. Contributions to the plan are made at the discretion of the Board of Directors and are allocated based on the compensation of each employee relative to total compensation paid by the Bank. All shares issued and held by the Plan are considered outstanding in the computation of earnings per share. Dividends on Company stock are allocated and paid to participants at least annually. Shares of Company stock, when distributed, have restrictions on transferability. The Company contributed $420,000 in 2015, $360,000 in 2014, and $360,000 in 2013 to the Plan and charged this expense to operations. The shares held by the ESOP totaled 188,596 and 188,396 at December 31, 2015 and 2014, respectively.
401(K) Plan
The Company sponsors a 401(k) savings plan under which eligible employees may choose to save up to 20 percent of their salary on a pretax basis, subject to certain IRS limits. Under the Federal Safe Harbor rules employees are automatically enrolled at 3% (in the third year this increases by 1% per year up to 6%) of their salary unless elected otherwise. The Company matches a hundred percent of the first 1% contributed by the employee and fifty percent from 2% to 6% of employee contributions. Vesting in the contributions made by the Company is 100% after two years of service. Contributions under the plan amounted to $211,987, $190,057 and $183,468 in 2015, 2014 and 2013, respectively.
Deferred Compensation Plan
The Company has a nonqualified deferred compensation plan for several of its key employees and directors. The Company may make annual contributions to the plan, and the employee or director has the option to defer a portion of their salary or bonus based on qualifying annual elections. Contributions to the plan totaled $110,000 in 2015, $100,000 in 2014 and $90,000 in 2013. |
15. CONCENTRATIONS OF CREDIT |
12 Months Ended |
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Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
NOTE 15. CONCENTRATIONS OF CREDIT | The Company had cash deposits in other commercial banks totaling $2,156,006 and $1,731,223 at December 31, 2015 and 2014, respectively.
The Company grants commercial, residential real estate and consumer loans to customers located primarily in the northwestern portion of the State of Virginia. Loan concentration areas greater than 25% of capital include land development. Collateral required by the Company is determined on an individual basis depending on the purpose of the loan and the financial condition of the borrower. Approximately 83% of the loan portfolio is secured by real estate. |
16. COMMITMENTS |
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Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTE 16. COMMITMENTS | The Company makes commitments to extend credit in the normal course of business and issues standby letters of credit to meet the financing needs of its customers. The amount of the commitments represents the Company's exposure to credit loss that is not included in the balance sheet. As of the balance sheet dates, the Company had the following commitments outstanding:
The Company uses the same credit policies in making commitments to lend money and issue standby letters of credit as it does for the loans reflected in the balance sheet.
Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer's creditworthiness on a case-by-case basis. Collateral required, if any, upon extension of credit is based on management's credit evaluation of the borrowers ability to pay. Collateral held varies but may include accounts receivable, inventory, property, plant and equipment.
The Bank leases four of its branch offices and both of its loan production offices under long term lease arrangements which had initial terms of either three, five or ten years. Lease expense was $164,294, $120,728 and $121,025 for 2015, 2014 and 2013, respectively. As of December 31, 2015, the required lease payments for the next five years are as follows:
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17. ON BALANCE SHEET DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES |
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Notes to Financial Statements | |||||||||||||||||||||||||||||||||||||
NOTE 17. ON BALANCE SHEET DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | Derivative Financial Instruments
The Company has stand alone derivative financial instruments in the form of forward option contracts. These transactions involve both credit and market risk. The notional amounts are amounts on which calculations, payments, and the value of the derivative are based. Notional amounts do not represent direct credit exposures. Direct credit exposure is limited to the net difference between the calculated amounts to be received and paid, if any. Such difference, which represents the fair value of the derivative instruments, is reflected on the Companys balance sheet as derivative assets and derivative liabilities.
The Company is exposed to credit-related losses in the event of nonperformance by the counterparties to these agreements. The Company controls the credit risk of its financial contracts through credit approvals, limits and monitoring procedures, and does not expect any counterparties to fail their obligations. The Company deals only with primary dealers.
Derivative instruments are generally either negotiated OTC contracts or standardized contracts executed on a recognized exchange. Negotiated OTC derivative contracts are generally entered into between two counterparties that negotiate specific agreement terms, including the underlying instrument, amount, exercise prices and maturity.
The Company issues to customers certificates of deposit with an interest rate that is derived from the rate of return on the stock of the companies that comprise The Dow Jones Industrial Average. In order to manage the interest rate risk associated with this deposit product, the Company has purchased a series of forward option contracts. These contracts provide the Company with a rate of return commensurate with the return of The Dow Jones Industrial Average from the time of the contract until maturity of the related certificate of deposit. These contracts are accounted for as fair value hedges. Because the certificates of deposit can be redeemed by the customer at any time and the related forward options contracts cannot be cancelled by the Company, the hedge is not considered effective. The ineffective portion of the gain or loss on the derivative instrument, if any, is recognized currently in earnings.
At December 31, the information pertaining to the forward option contracts, included in other assets and other liabilities on the balance sheet, is as follows:
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18. TRANSACTIONS WITH RELATED PARTIES |
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Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes to Financial Statements | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTE 18. TRANSACTIONS WITH RELATED PARTIES |
During the year, officers and directors (and companies controlled by them) were customers of and had transactions with the Company in the normal course of business. These transactions were made on substantially the same terms as those prevailing for other customers and did not involve any abnormal risk..
Loan transactions with related parties are shown in the following schedule:
Deposit of executive officers and directors and their affiliates were $4,529,503 and $3,430,336 on December 31, 2015 and 2014 respectively. These deposits were made under the same terms available to other customers of the bank. |
19. DIVIDEND LIMITATIONS ON SUBSIDIARY BANK |
12 Months Ended |
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Dec. 31, 2015 | |
Notes to Financial Statements | |
NOTE 19. DIVIDEND LIMITATIONS ON SUBSIDIARY BANK |
The principal source of funds of F & M Bank Corp. is dividends paid by the Farmers and Merchants Bank. The Federal Reserve Act restricts the amount of dividends the Bank may pay. Approval by the Board of Governors of the Federal Reserve System is required if the dividends declared by a state member bank, in any year, exceed the sum of (1) net income of the current year and (2) income net of dividends for the preceding two years. As of January 1, 2015, approximately $10,494,000 was available for dividend distribution without permission of the Board of Governors. Dividends paid by the Bank to the Company totaled $2,500,000 in 2015, $1,300,000 in 2014 and $1,550,000 in 2013. |
20. DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS |
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NOTE 20. DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS |
ASC 825 Financial Instruments (formerly SFAS 107) defines the fair value of a financial instrument as the amount at which a financial instrument could be exchanged in a current transaction between willing parties, other than in a forced liquidation or sale. As the majority of the Bank's financial instruments lack an available trading market, significant estimates, assumptions and present value calculations are required to determine estimated fair value. The following presents the carrying amount, fair value and placement in the fair value hierarchy of the Companys financial instruments as of December 31, 2015 and December 31, 2014. This table excludes financial instruments for which the carrying amount approximates the fair value, which would be Level 1; inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. All financial instruments below are considered Level 2 (except for impaired loans which are level 3); inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
The carrying value of cash and cash equivalents, other investments, deposits with no stated maturities, short-term borrowings, and accrued interest approximate fair value. The fair value of securities was calculated using the most recent transaction price or a pricing model, which takes into consideration maturity, yields and quality. The remaining financial instruments were valued based on the present value of estimated future cash flows, discounted at various rates in effect for similar instruments entered into during the month of December of each year. |
21. FAIR VALUE MEASUREMENTS |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTE 21. FAIR VALUE MEASUREMENTS | Accounting Standards Codification (ASC 820), Fair Value Measurement Disclosures (formerly FAS No. 157), defines fair value, establishes a framework for measuring fair value, establishes a three-level valuation hierarchy for disclosure of fair value measurement and enhances disclosure requirements for fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels are defined as follows:
The following sections provide a description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy:
Securities: Where quoted prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. Level 1 securities would include highly liquid government bonds, mortgage products and exchange traded equities. If quoted market prices are not available, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics, or discounted cash flow. Level 2 securities would include U.S. agency securities, mortgage-backed agency securities, obligations of states and political subdivisions and certain corporate, asset backed and other securities. In certain cases where there is limited activity or less transparency around inputs to the valuation, securities are classified within Level 3 of the valuation hierarchy.
Loans Held for Sale: Loans held for sale are short-term loans purchased at par for resale to investors at the par value of the loan. These loans are generally repurchased within 15 days. Because of the short-term nature and fixed repurchased price, the book value of these loans approximates fair value.
Impaired Loans: ASC 310 applies to loans measured for impairment using the practical expedients permitted by SFAS No. 114, Accounting by Creditors for Impairment of a Loan, including impaired loans measured at an observable market price (if available), or at the fair value of the loans collateral (if the loan is collateral dependent). Fair value of the loans collateral, when the loan is dependent on collateral, is determined by appraisals or independent valuation which is then adjusted for the cost related to liquidation of the collateral.
Other Real Estate Owned: Certain assets such as other real estate owned (OREO) are initially measured at fair value less cost to sell. We believe that the fair value component in its valuation follows the provisions of ASC 310.
For level 3 assets and liabilities measured at fair value on a recurring basis or non-recurring basis as of December 31, 2015 and 2014 significant unobservable inputs used in the fair value measurements were as follows:
Assets and Liabilities Recorded at Fair Value on a Recurring Basis (in thousands)
Assets and Liabilities Recorded at Fair Value on a Non-Recurring Basis (in thousands)
Assets and Liabilities Recorded at Fair Value on a Non-Recurring Basis (in thousands)
The table below presents the recorded amount of assets and liabilities measured at fair value on a non-recurring basis.
There were no significant transfers between levels 1 and 2. Level 3 assets consist of Other Real Estate Owned and Impaired loans. These assets have been valued based on Managements estimate. These estimates were derived from a review of appraisals, tax assessments and discussions with appraisers and realtors. |
22. REGULATORY MATTERS |
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NOTE 22. REGULATORY MATTERS | The Company and its subsidiary bank are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Companys financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company must meet specific capital guidelines that involve quantitative measures of the Companys assets, liabilities, and certain off balance-sheet items as calculated under regulatory accounting practices. The Companys capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.
Quantitative measures established by regulation, to ensure capital adequacy, require the Company to maintain minimum amounts and ratios. These ratios are defined in the regulations and the amounts are set forth in the table below. Management believes, as of December 31, 2015, that the Company and its subsidiary bank meet all capital adequacy requirements to which they are subject.
As of the most recent notification from the Federal Reserve Bank Report of Examination (which was as of February 23, 2015), the subsidiary bank was categorized as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Company must maintain minimum total risk based, Tier I risk-based, and Tier I leverage ratios as set forth in the table. There are no conditions or events since that notification that management believes have changed the institutions category.
The Companys actual consolidated capital ratios are presented in the following table (dollars in thousands):
The actual capital ratios for the subsidiary bank are presented in the following table (dollars in thousands):
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23. INTANGIBLES |
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Notes to Financial Statements | |
NOTE 23. INTANGIBLES | Goodwill associated with the purchase of the Edinburg and Woodstock branches and VBS Mortgage totaled $2,638,677 and $30,840, respectively, at the acquisition date. |
24. INVESTMENTS IN LIFE INSURANCE CONTRACTS |
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Notes to Financial Statements | |
NOTE 24. INVESTMENTS IN LIFE INSURANCE CONTRACTS | The Bank currently offers a variety of benefit plans to all full time employees. While the costs of these plans are generally tax deductible to the Bank, the cost has been escalating greatly in recent years. To help offset escalating benefit costs and to attract and retain qualified employees, the Bank purchased Bank Owned Life Insurance (BOLI) contracts that will provide benefits to employees during their lifetime. Dividends received on these policies are tax-deferred and the death benefits under the policies are tax exempt. Rates of return on a tax-equivalent basis are very favorable when compared to other long-term investments which the Bank might make. |
25. PARENT CORPORATION ONLY FINANCIAL STATEMENTSz |
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NOTE 25. PARENT CORPORATION ONLY FINANCIAL STATEMENTS | Balance Sheets December 31, 2015 and 2014
Statements of Net Income For the years ended December 31, 2015, 2014 and 2013
Statements of Cash Flows For the years ended December 31, 2015, 2014 and 2013
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26. INVESTMENT IN VBS MORTGAGE, LLC |
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NOTE 26. INVESTMENT IN VBS MORTGAGE, LLC | On November 3, 2008, the Bank acquired a 70% ownership interest in VBS Mortgage, LLC (formerly Valley Broker Services, DBA VBS Mortgage). VBS originates both conventional and government sponsored mortgages for sale in the secondary market. As of December 31, 2015 and 2014, VBS summarized balance sheet and income statement were as follows:
Balance Sheets December 31, 2015 and 2014
Statements of Income For the years ended December 31, 2015, 2014 and 2013
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1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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Notes to Financial Statements | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Principles of Consolidation | The consolidated financial statements include the accounts of Farmers and Merchants Bank, TEB Life Insurance Company, Farmers & Merchants Financial Services, Inc. and VBS Mortgage, LLC, (net of minority interest). Significant inter-company accounts and transactions have been eliminated. |
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Use of Estimates in the Preparation of Financial Statements | In preparing the financial statements, management is required to make estimates and assumptions that affect the reported amounts in those statements; actual results could differ significantly from those estimates. Material estimates that are particularly susceptible to significant changes in the near term are the determination of the allowance for loan losses, which is sensitive to changes in local and national economic conditions, and the other than temporary impairment of investments in the investment portfolio. |
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Cash and Cash Equivalents | Cash and cash equivalents include cash on hand, deposits at other financial institutions whose initial maturity is ninety days or less and Federal funds sold. |
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Investment Securities | Management reviews the securities portfolio and classifies all securities as either held to maturity or available for sale at the date of acquisition. Securities that the Company has both the positive intent and ability to hold to maturity (at time of purchase) are classified as held to maturity securities. All other securities are classified as available for sale. Securities held to maturity are carried at historical cost and adjusted for amortization of premiums and accretion of discounts, using the effective interest method. Securities available for sale are carried at fair value with any valuation adjustments reported, net of deferred taxes, as a part of other accumulated comprehensive income.
Interest, amortization of premiums and accretion of discounts on securities are reported as interest income using the effective interest method. Gains (losses) realized on sales and calls of securities are determined on the specific identification method. |
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Accounting for Historic Rehabilitation and Low Income Housing Partnerships | The Company periodically invests in low income housing partnerships whose primary benefit is the distribution of federal income tax credits to partners. The Company recognizes these benefits and the cost of the investments over the life of the partnership (usually 15 years). In addition, state and federal historic rehabilitation credits are generated from some of the partnerships. Amortization of these investments is prorated based on the amount of benefits received in each year to the total estimated benefits over the life of the projects. The effective yield method is used to record the income statement effects of these investments. |
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Income Taxes | Amounts provided for income tax expense are based on income reported for financial statement purposes rather than amounts currently payable under income tax laws. Deferred taxes, which arise principally from temporary differences between the period in which certain income and expenses are recognized for financial accounting purposes and the period in which they affect taxable income, are included in the amounts provided for income taxes. |
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Loans Held for Investment | Loans are carried on the balance sheet net of any unearned interest and the allowance for loan losses. Interest income on loans is determined using the effective interest method on the daily amount of principal outstanding except where serious doubt exists as to collectability of the loan, in which case the accrual of income is discontinued. |
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Loans Held for Sale | These loans consists of fixed rate loans made through its subsidiary, VBS Mortgage and loans purchased from Gateway Savings Bank, Oakland, CA and Northpointe Bank, Grand Rapids, MI.
VBS Mortgage originates conforming mortgage loans for sale in the secondary market. The bank (VBS) gives the customer a rate commitment at the time the rate is locked. The bank then immediately gets a rate lock-in from the investor that will be buying the loan upon closing. Both the rate lock and the purchase commitments (which is a blanket agreement) are best effort agreements, subject to final approval and underwriting. Because either party can walk away from these agreements prior to closing, neither the rate lock commitment nor the purchase commitment is considered a derivative contract. The bank provides a warehouse line for the Mortgage subsidiary after closing, until the loan is purchased by the investor. The average time on the line is two or three weeks. Although VBS does have a line, loans are actually assigned to the bank at closing and then reassigned prior to purchase from investor. There were $3.6 million of these mortgage loans held for resale at the end of the year. All of these loans are under contract to deliver to an investor as a specified price. Because of this and the short holding period, these loans are carried at par and a gain is recorded at transfer to the investor. The effect of not marking these loans to market is not material to the current year financial statements.
Gateway Savings Bank (Gateway) loans are originated by a network of mortgage loan originators throughout the United States. A takeout commitment is in place at the time the loans are purchased. The Gateway arrangement has been used since 2003 as a higher yielding alternative to federal funds sold or investment securities. These loans are short-term, residential real estate loans that have an average life in our portfolio of approximately two weeks. The Bank holds these loans during the period of time between loan closing and when the loan is paid off by the ultimate secondary market purchaser. Gateway Savings Bank discontinued the loan participation program in December of 2014 and the Company became a participant with Northpointe Bank which obtained the Gateway Savings Bank program and incorporated it into their existing program. The Northpointe Bank program and procedures are the same as described above for Gateway. |
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Allowance for Loan and Lease Losses | The provision for loan losses charged to operations is an amount sufficient to bring the allowance for loan losses to an estimated balance that management considers adequate to absorb potential losses in the portfolio. Loans are charged against the allowance when management believes the collectability of the principal is unlikely. Recoveries of amounts previously charged-off are credited to the allowance. Managements determination of the adequacy of the allowance is based on an evaluation of the composition of the loan portfolio, the value and adequacy of collateral, current economic conditions, historical loan loss experience, and other risk factors. Management believes that the allowance for loan losses is adequate. While management uses available information to recognize losses on loans, future additions to the allowance may be necessary based on changes in economic conditions, particularly those affecting real estate values. In addition, regulatory agencies, as an integral part of their examination process, periodically review the Companys allowance for loan losses. Such agencies may require the Company to recognize additions to the allowance based on their judgments about information available to them at the time of their examination.
A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrowers prior payment record, and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan by loan basis for commercial and construction loans by either the present value of expected future cash flows discounted at the loans effective interest rate, the loans obtainable market price, or the fair value of the collateral if the loan is collateral dependent. |
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Other Real Estate Owned (OREO) | As of December 31, 2015, the Bank had $2.1 million classified as OREO on the balance sheet, compared to $3.5 million as of December 31, 2014. The table in Note 9 reflects the OREO activity in 2015. The Companys policy is to carry OREO on its balance sheet at the lower of cost or market. Values are reviewed periodically and additional losses are recognized if warranted based on market conditions. |
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Nonaccrual Loans | Loans are placed on nonaccrual status when they become ninety days or more past due, unless there is an expectation that the loan will either be brought current or paid in full in a reasonable period of time. |
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Bank Premises and Equipment | Bank premises and equipment are stated at cost less accumulated depreciation. Depreciation is charged to income over the estimated useful lives of the assets on a combination of the straight-line and accelerated methods. The ranges of the useful lives of the premises and equipment are as follows:
Maintenance, repairs, and minor improvements are charged to operations as incurred. Gains and losses on dispositions are reflected in other income or expense. |
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Goodwill | The Company accounts for goodwill and intangible assets under ASC 805, Business Combination and ASC 350 Intangibles, respectively.
Goodwill totaled $2,669,517 at December 31, 2015 and 2014. The goodwill is no longer amortized, but instead tested for impairment at least annually. Based on the testing, there were no impairment charges for 2015, 2014 or 2013. |
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Pension Plans | The Bank has a qualified noncontributory defined benefit pension plan which covers all full time employees hired prior to April 1, 2012. The benefits are primarily based on years of service and earnings. The Company complies with ASC 325-960 Defined Benefit Pension Plans which requires recognition of the over-funded or under-funded status of pension and other postretirement benefit plans on the balance sheet. Under ASC 325-960, gains and losses, prior service costs and credits, and any remaining transition amounts that have not yet been recognized through net periodic benefit cost will be recognized in accumulated other comprehensive income, net of tax effects, until they are amortized as a component of net periodic cost. |
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Advertising Costs | The Company follows the policy of charging the cost of advertising to expense as incurred. Total advertising costs included in other operating expenses for 2015, 2014, and 2013 were $401,138, $317,780, and $278,555, respectively. |
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Comprehensive Income | Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income. Certain changes in assets and liabilities and changes in pension plan funding status, such as unrealized gains and losses on available-for-sale securities and gains or losses on certain derivative contracts, are reported as a separate component of the equity section of the balance sheet. Such items, along with operating net income, are components of comprehensive income. |
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Derivative Financial Instruments and Change in Accounting Principle | On January 1, 2001, the Company adopted ASC 815 Derivative and Hedging Investments (formerly SFAS No. 133). This statement requires that all derivatives be recognized as assets or liabilities in the balance sheet and measured at fair value.
Under ASC 815, the gain or loss on a derivative designated and qualifying as a fair value hedging instrument, as well as the offsetting gain or loss on the hedging item attributable to the risk being hedged, is recognized currently in earnings in the same accounting period. The effective portion of the gain or loss on a derivative designated and qualifying as a cash flow hedging instrument is initially reported as a component of other comprehensive income and subsequently reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. The ineffective portion of the gain or loss on the derivative instrument, if any, is recognized currently in earnings.
Interest rate derivative financial instruments receive hedge accounting treatment only if they are designated as a hedge and are expected to be, and are, effective in substantially reducing interest rate risk arising from the assets and liabilities identified as exposing the Company to risk. Those derivative financial instruments that do not meet the hedging criteria discussed below would be classified as trading activities and would be recorded at fair value with changes in fair value recorded in income. Derivative hedge contracts must meet specific effectiveness tests (i.e., over time the change in their fair values due to the designated hedge risk must be within 80 to 125 percent of the opposite change in the fair value of the hedged assets or liabilities). Changes in fair value of the derivative financial instruments must be effective at offsetting changes in the fair value of the hedging items due to the designated hedge risk during the term of the hedge. Further, if the underlying financial instrument differs from the hedged asset or liability, there must be a clear economic relationship between the prices of the two financial instruments. If periodic assessment indicates derivatives no longer provide an effective hedge, the derivatives contracts would be closed out and settled or classified as a trading activity. |
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Earnings per Share | Accounting guidance specifies the computation, presentation and disclosure requirements for earnings per share (EPS) for entities with publicly held common stock or potential common stock such as options, warrants, convertible securities or contingent stock agreements if those securities trade in a public market. Basic EPS is computed by dividing net income by the weighted average number of common shares outstanding. Diluted EPS is similar to the computation of basic EPS except that the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive common shares had been issued. The dilutive effect of conversion of preferred stock is reflected in the diluted earnings per common share calculation.
Net income available to common stockholders represents consolidated net income adjusted for preferred dividends declared.
The following table provides a reconciliation of net income to net income available to common stockholders for the periods presented:
The following table shows the effect of dilutive preferred stock conversion on the Company's earnings per share for the periods indicated:
There were no dilutive securities for the years ended December 31, 2013. |
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Recent Accounting Pronouncements | Recent Accounting Pronouncements
In May 2014, the Financial Accounting Standards Board (FASB) issued guidance to change the recognition of revenue from contracts with customers. The core principle of the new guidance is that an entity should recognize revenue to reflect the transfer of goods and services to customers in an amount equal to the consideration the entity receives or expects to receive. The guidance will be effective for the Company for reporting periods beginning after December 15, 2017. Management is currently analyzing the impact of the adoption of this guidance on the Companys consolidated financial statements. The Company does not expect these amendments to have a material effect on its financial statements.
In January 2015, the FASB issued guidance to eliminate from U.S. GAAP the concept of an extraordinary item, which is an event or transaction that is both (1) unusual in nature and (2) infrequently occurring. Under the new guidance, an entity will no longer (1) segregate an extraordinary item from the results of ordinary operations; (2) separately present an extraordinary item on its income statement, net of tax, after income from continuing operations; or (3) disclose income taxes and earnings-per-share data applicable to an extraordinary item. The amendments will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015, with early adoption permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. The Company will apply the guidance prospectively. The Company does not expect these amendments to have a material effect on its financial statements.
In February 2015, the FASB issued guidance which amends the consolidation requirements and significantly changes the consolidation analysis required under U.S. GAAP. Although the amendments are expected to result in the deconsolidation of many entities, the Company will need to reevaluate all its previous consolidation conclusions. The amendments will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015, with early adoption permitted (including during an interim period), provided that the guidance is applied as of the beginning of the annual period containing the adoption date. The Company does not expect these amendments to have a material effect on its financial statements.
In April 2015, the FASB issued guidance which provides a practical expedient that permits the Company to measure defined benefit plan assets and obligations using the month-end that is closest to the Companys fiscal year-end. The amendments will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015, with early adoption permitted. The Company does not expect these amendments to have a material effect on its financial statements.
In April 2015, the FASB issued guidance which provides guidance to customers about whether a cloud computing arrangement includes a software license. The amendments will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015, with early adoption permitted. The Company does not expect these amendments to have a material effect on its financial statements.
In June 2015, the FASB issued amendments to clarify the Accounting Standards Codification (ASC), correct unintended application of guidance, and make minor improvements to the ASC that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. The amendments were effective upon issuance (June 12, 2015) for amendments that do not have transition guidance. Amendments that are subject to transition guidance will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. The Company does not expect these amendments to have a material effect on its financial statements.
In August 2015, the FASB deferred the effective date of ASU 2014-09, Revenue from Contracts with Customers. As a result of the deferral, the guidance in ASU 2014-09 will be effective for the Company for reporting periods beginning after December 15, 2017. Management is currently analyzing the impact of the adoption of this guidance on the Companys consolidated financial statements. The Company does not expect these amendments to have a material effect on its financial statements.
In September 2015, the FASB amended the Business Combinations topic of the Accounting Standards Codification to simplify the accounting for adjustments made to provisional amounts recognized in a business combination by eliminating the requirement to retrospectively account for those adjustments. The amendments will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015, with early adoption permitted for financial statements that have not been issued. All entities are required to apply the amendments prospectively to adjustments to provisional amounts that occur after the effective date. The Company does not expect these amendments to have a material effect on its financial statements.
In November 2015, the FASB amended the Income Taxes topic of the Accounting Standards Codification simplify the presentation of deferred income taxes by requiring that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The amendments will be effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods, with early adoption permitted as of the beginning of an interim or annual reporting period. The Company will apply the guidance prospectively. The Company does not expect these amendments to have a material effect on its financial statements.
In January 2016, the FASB amended the Financial Instruments topic of the Accounting Standards Codification to address certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The amendments will be effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company will apply the guidance by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. The amendments related to equity securities without readily determinable fair values will be applied prospectively to equity investments that exist as of the date of adoption of the amendments. The Company does not expect these amendments to have a material effect on its financial statements.
In February 2016, the FASB issued new guidance to change accounting for leases and that will generally require most leases to be recognized on the balance sheet. The new lease standard only contains targeted changes to accounting by lessors, however, lessees will be required to recognize most leases in their balance sheets as lease liabilities for lease payments and right-of-use assets representing the lessees rights to use the underlying assets for the lease terms for lease arrangements longer than 12 months. Under this approach, a lessee will account for most existing capital/finance leases as Type A leases and most existing operating leases as Type B leases. Type A and Type B leases have unique accounting and disclosure requirements. Existing sale-leaseback guidance, including guidance for real estate, will be replaced with a new model applicable to both lessees and lessors. The new guidance will be effective for fiscal years (and interim periods within those fiscal years) beginning after December 15, 2018. Early adoption is permitted for all companies and organizations. Management is currently analyzing the impact of the adoption of this guidance on the Companys consolidated financial statements, including assessing changes that might be necessary to information technology systems, processes and internal controls to capture new data and address changes in financial reporting.
Standards that have been issued or proposed by the FASB or other standards-setting bodies are not expected to have a material impact on the Companys financial position, results of operations or cash flows. |
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Subsequent Events | In preparing these financial statements, the Company has evaluated events and transactions for potential recognition or disclosure through the date the financial statements were issued. |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) |
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Summary Of Significant Accounting Policies Tables | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings per Share | The following table provides a reconciliation of net income to net income available to common stockholders for the periods presented:
The following table shows the effect of dilutive preferred stock conversion on the Company's earnings per share for the periods indicated:
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4. INVESTMENT SECURITIES (Tables) |
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Notes to Financial Statements | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Amortized Cost and Fair Value for Securities | The amortized cost and fair value of securities held to maturity are as follows:
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Amortized cost and fair value of securities | The amortized cost and fair value of securities available for sale are as follows:
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Schedule of gain and losses on sales of debt and equity securities | Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
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Schedule of Securities with Unrealized Losses | A summary of these losses (in thousands) is as follows:
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5. LOANS (Tables) |
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Schedule of Loans Outstanding | Loans held for investment as of December 31:
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||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Impaired Loans | The following is a summary of information pertaining to impaired loans (in thousands):
The Recorded Investment is defined as the principal balance less principal payments and charge-offs.
|
6. ALLOWANCE FOR LOAN LOSSES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes to Financial Statements | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary Loan Loss Allowance Transactions | A summary of changes in the allowance for loan losses is shown in the following schedule:
A summary of changes in the allowance for loan losses is shown in the following schedule:
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Schedule of Aging of Past Due Receivables | Recorded Investment in Loan Receivables (in thousands):
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Consumer Credit Exposure | Aging of Past Due Loans Receivable (in thousands)
|
7. TROUBLED DEBT RESTRUCTURING (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Troubled Debt Restructuring Tables | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Troubled Debt Restructurings |
|
8. BANK PREMISES AND EQUIPMENT (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Bank Premises And Equipment Tables | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Bank premises and equipment | Bank premises and equipment as of December 31 are summarized as follows:
|
9. OTHER REAL ESTATE OWNED (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Real Estate Owned Tables | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Real Estate Owned Activity | The tables below reflect OREO activity for 2015 and 2014:
|
10. DEPOSITS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deposits Tables | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Composition of deposits | The composition of deposits at December 31, 2015 and 2014 was as follows:
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Maturity of Deposits | At December 31, 2015, the scheduled maturities of time deposits are as follows:
|
11. SHORT-TERM DEBT (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short-Term Debt Tables | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short-term debt | Short-term debt information is summarized as follows:
|
12. LONG-TERM DEBT (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||
Long-Term Debt Tables | ||||||||||||||||||||||||||||||||||||
Maturities of long-term debt | The maturities of long-term Federal Home Loan Bank borrowings as of December 31, 2015 are as follows:
|
13. INCOME TAX EXPENSE (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Expense Tables | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of the income tax expense | The components of the income tax expense are as follows:
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Components of the deferred taxes | The components of the deferred taxes as of December 31 are as follows:
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Differences in actual income tax expense and the amounts computed using the federal statutory tax rates | The following table summarizes the differences between the actual income tax expense and the amounts computed using the federal statutory tax rates:
|
14. EMPLOYEE BENEFITS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EmployeeBenefitsTablesAbstract | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of the changes in the benefit obligations and fair value of plan assets | The following table provides a reconciliation of the changes in the benefit obligations and fair value of plan assets for 2015, 2014 and 2013:
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Fair value of plan assets | The valuations are based on third party data received as of the balance sheet date. All plan assets are considered Level 1 assets, as quoted prices exist in active markets for identical assets.
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Estimated Future Benefit Payments | Estimated Future Benefit Payments
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16. COMMITMENTS (Tables) |
12 Months Ended | |||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 | ||||||||||||||||||||||||||||
Commitments Tables | ||||||||||||||||||||||||||||
Commitments outstanding | As of the balance sheet dates, the Company had the following commitments outstanding:
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Long term lease arrangements | As of December 31, 2015, the required lease payments for the next five years are as follows:
|
17. ON BALANCE SHEET DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||
On Balance Sheet Derivative Instruments And Hedging Activities Tables | |||||||||||||||||||||||||||||||||||||
Forward option contracts | At December 31, the information pertaining to the forward option contracts, included in other assets and other liabilities on the balance sheet, is as follows:
|
18. TRANSACTIONS WITH RELATED PARTIES (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Transactions With Related Parties Tables | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loan transactions with related parties | Loan transactions with related parties are shown in the following schedule:
|
20. DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DisclosuresAboutFairValueOfFinancialInstrumentsTablesAbstract | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Carrying Value and Estimated Fair Value for Financial Instruments |
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21. FAIR VALUE MEASUREMENTS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements Tables | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value measurements | For level 3 assets and liabilities measured at fair value on a recurring basis or non-recurring basis as of December 31, 2014 significant unobservable inputs used in the fair value measurements were as follows:
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Assets and liabilities measured at fair value on a recurring basis | Assets and Liabilities Recorded at Fair Value on a Recurring Basis (in thousands)
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Assets and Liabilities Recorded at Fair Value on a Non-Recurring Basis | Assets and Liabilities Recorded at Fair Value on a Non-Recurring Basis (in thousands)
The table below presents the recorded amount of assets and liabilities measured at fair value on a non-recurring basis.
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22. REGULATORY MATTERS (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Regulatory Matters Tables | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Actual consolidated capital ratios | The Companys actual consolidated capital ratios are presented in the following table (dollars in thousands):
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Actual capital ratios for the subsidiary bank | The actual capital ratios for the subsidiary bank are presented in the following table (dollars in thousands):
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25. PARENT CORPORATION ONLY FINANCIAL STATEMENTS (Tables) - Parent [Member] |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance Sheets | Balance Sheets December 31, 2015 and 2014
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Statements of Net Income and Retained Earnings | Statements of Net Income For the years ended December 31, 2015, 2014 and 2013
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Statements of Cash Flows | Statements of Cash Flows For the years ended December 31, 2015, 2014 and 2013
|
26. INVESTMENT IN VBS MORTGAGE, LLC (Tables) - VBS MORTGAGE, LLC [Member] |
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Balance Sheets | Balance Sheets December 31, 2015 and 2014
|
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Statements of Income | Statements of Income For the years ended December 31, 2015, 2014 and 2013
|
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) |
12 Months Ended |
---|---|
Dec. 31, 2015 | |
Buildings and Improvements [Member] | Minimum [Member] | |
Property, Plant and Equipment, Estimated Useful Lives | 10 years |
Buildings and Improvements [Member] | Maximum [Member] | |
Property, Plant and Equipment, Estimated Useful Lives | 40 years |
Furniture and Fixtures [Member] | Minimum [Member] | |
Property, Plant and Equipment, Estimated Useful Lives | 5 years |
Furniture and Fixtures [Member] | Maximum [Member] | |
Property, Plant and Equipment, Estimated Useful Lives | 20 years |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Earnings Available to Common Stockholders: | |||
Net Income | $ 8,581,584 | $ 5,847,262 | $ 4,822,978 |
Minority interest | 164,575 | 45,653 | |
Preferred Stock Dividends | 510,000 | 127,500 | 0 |
Net Income Available to Common Stockolders | $ 7,907,009 | $ 5,674,109 | $ 4,715,793 |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Accounting Policies [Abstract] | |||
Basic EPS, Income | $ 7,907,009 | $ 5,674,109 | $ 4,715,793 |
Effect of Dilutive Securities Convertible Preferred Stock, Income | 510,000 | 127,500 | 0 |
Diluted EPS Net income | $ 8,417,009 | $ 5,801,609 | $ 4,715,793 |
Basic EPS, Shares | 3,735,212 | 3,229,942 | |
Effect of Dilutive Securities Convertible Preferred Stock, Shares | 444,400 | 110,631 | |
Diluted EPS, Shares | 3,290,812 | 3,119,311 | |
Basic EPS, Per Share Amounts | $ 2.40 | $ 1.82 | $ 1.88 |
Effect of Dilutive Securities Convertible Preferred Stock, Per Share Amounts | (0.15) | (0.02) | |
Diluted EPS, Per Share Amounts | $ 2.25 | $ 1.80 | $ 1.88 |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Summary Of Significant Accounting Policies Details Narrative | |||
OREO on balance sheet | $ 2,127,685 | $ 3,507,153 | |
Goodwill | 2,669,517 | 2,669,517 | |
Advertising costs | $ 401,138 | $ 317,780 | $ 278,555 |
3. CASH AND DUE FROM BANKS (Details Narrative) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Cash And Due From Banks Details Narrative | ||
Average balance of cash | $ 25,000 | $ 25,000 |
4. INVESTMENT SECURITIES (Details 1) - USD ($) |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Total, Amortized Cost | $ 125,043 | $ 125,150 |
Securities Held to Maturity [Member] | ||
Due in one year or less, Amortized Cost | 125,043 | |
Due in one year or less, Fair Value | 125,043 | |
Due after one year through five years, Amortized Cost | 0 | |
Due after one year through five years, Fair Value | 0 | |
Due after five years, Amortized Cost | 0 | |
Due after five years, Fair Value | 0 | |
Total, Amortized Cost | 125,043 | |
Total, Fair Value | 125,043 | |
Securities Available for Sale [Member] | ||
Due in one year or less, Amortized Cost | 4,015,440 | |
Due in one year or less, Fair Value | 4,021,280 | |
Due after one year through five years, Amortized Cost | 8,080,540 | |
Due after one year through five years, Fair Value | 8,073,720 | |
Due after five years, Amortized Cost | 945,802 | |
Due after five years, Fair Value | 951,945 | |
Total, Amortized Cost | 13,041,782 | |
Total, Fair Value | $ 13,046,945 |
4. INVESTMENT SECURITIES (Details Narrative) - USD ($) |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Investment Securities Details Narrative | ||
Carrying value of securities pledged by Bank | $ 12,912,000 | $ 13,080,000 |
Committment to invest eight low-income housing limited partnerships | $ 4,358,041 |
5. LOANS (Details) - USD ($) |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Loans held for investment | $ 544,053,477 | $ 518,201,574 |
Construction/Land Development [Member] | ||
Loans held for investment | 69,759,401 | 67,180,467 |
Farmland [Member] | ||
Loans held for investment | 13,377,740 | 12,507,446 |
Real Estate [Member] | ||
Loans held for investment | 166,586,877 | 162,248,606 |
Multi-Family [Member] | ||
Loans held for investment | 7,558,460 | 11,775,205 |
Commercial Real Estate [Member] | ||
Loans held for investment | 128,031,686 | 122,305,417 |
Home Equity - Closed End [Member] | ||
Loans held for investment | 9,135,433 | 9,393,805 |
Home Equity - Open End [Member] | ||
Loans held for investment | 56,599,337 | 52,181,679 |
Commercial and Industrial Non-Real Estate [Member] | ||
Loans held for investment | 27,954,171 | 28,160,584 |
Consumer [Member] | ||
Loans held for investment | 8,219,391 | 9,109,994 |
Dealer Finance [Member] | ||
Loans held for investment | 54,085,791 | 40,633,086 |
Credit Cards [Member] | ||
Loans held for investment | $ 2,745,190 | $ 2,745,190 |
5. LOANS (Details Narrative) - USD ($) |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Loans Details Narrative | ||
Federal Home Loan Bank of Atlanta | $ 182,312,000 | $ 183,483,000 |
Loans held for sale | $ 57,805,529 | $ 13,381,941 |
6. ALLOWANCE FOR LOAN LOSSES (Details 4) - USD ($) |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Credit cards | $ 2,745,000 | $ 2,705,000 |
Consumer | 62,305,000 | 49,743,000 |
Performing Financing Receivable [Member] | ||
Credit cards | 2,730,000 | 2,704,000 |
Consumer | 62,046,000 | 49,582,000 |
Nonperforming Financing Receivable [Member] | ||
Credit cards | 15,000 | 1,000 |
Consumer | $ 259,000 | $ 161,000 |
7. TROUBLED DEBT RESTRUCTURING (Details Narrative) |
Dec. 31, 2015
USD ($)
|
---|---|
Notes to Financial Statements | |
Real estate loan | $ 97,000 |
8. BANK PREMISES AND EQUIPMENT (Details) - USD ($) |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Notes to Financial Statements | ||
Land | $ 1,868,709 | $ 1,418,003 |
Buildings and improvements | 7,209,427 | 6,793,644 |
Furniture and equipment | 7,397,173 | 6,479,815 |
Gross | 16,475,309 | 14,691,462 |
Less - accumulated depreciation | (8,933,231) | (8,233,208) |
Net | $ 7,542,078 | $ 6,458,254 |
8. BANK PREMISES AND EQUIPMENT (Details Narrative) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Notes to Financial Statements | |||
Provisions for depreciation | $ 709,237 | $ 612,116 | $ 581,625 |
9. OTHER REAL ESTATE OWNED (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Other Real Estate Owned Details | ||
Balance as of January 1 | $ 3,507,153 | $ 2,628,418 |
Property acquired at foreclosure | 125,000 | 2,914,958 |
Capital improvements on foreclosed property | 98,929 | 48,961 |
Sale of other real estate owned financed by Bank | (328,129) | (780,097) |
Sales of foreclosed properties | (737,663) | (1,029,452) |
Write down of OREO | (537,605) | (275,635) |
Balance as of December 31 | $ 2,127,685 | $ 3,507,153 |
10. DEPOSITS (Details) - USD ($) |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Banking and Thrift [Abstract] | ||
Noninterest bearing demand deposits | $ 134,786,875 | $ 112,197,722 |
Savings and interest bearing demand deposits: | ||
Interest checking accounts | 108,459,597 | 119,593,529 |
Savings accounts | 90,383,486 | 64,249,199 |
Time Deposits: | ||
Balances of less than $100,000 | 107,415,244 | 115,651,329 |
Balances of $100,000 and more | 53,624,554 | 79,812,757 |
Total Deposits | $ 494,669,756 | $ 491,504,536 |
10. DEPOSITS (Details 1) |
Dec. 31, 2015
USD ($)
|
---|---|
Banking and Thrift [Abstract] | |
2016 | $ 68,800,143 |
2017 | 38,529,664 |
2018 | 27,310,066 |
2019 | 12,595,076 |
2020 and after | 13,804,849 |
Total | $ 161,039,798 |
11. SHORT-TERM DEBT (Details Narrative) |
Dec. 31, 2015
USD ($)
|
---|---|
Debt Disclosure [Abstract] | |
Unsecured lines of credit | $ 26,000,000 |
12. LONG-TERM DEBT (Details) |
Dec. 31, 2015
USD ($)
|
---|---|
Debt Disclosure [Abstract] | |
2016 | $ 3,929,000 |
2017 | 3,929,000 |
2018 | 8,929,000 |
2019 | 6,429,000 |
2020 | 13,929,000 |
Thereafter | 11,016,000 |
Total | $ 48,161,000 |
12.LONG-TERM DEBT (Details Narrative) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Debt Disclosure [Abstract] | |||
New borrowings from the Federal Home Loan Bank of Atlanta | $ 40,000,000 | $ 10,000,000 | $ 0 |
Interest rates on the notes payable | The interest rates on the notes payable range from 1.16% to 2.56% | ||
Weighted average interest | 1.86% | 2.33% | |
Balance of obligations | $ 48,161,000 | $ 9,875,000 |
13. INCOME TAX EXPENSE (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Current expense | |||
Federal | $ 3,227,013 | $ 1,777,598 | $ 482,912 |
Deferred (benefit) expense | |||
Federal | (340,941) | 505,684 | 636,452 |
State | 0 | 9,854 | (67,594) |
Total Deferred (benefit) expense | (340,941) | 515,538 | 568,858 |
Total Income Tax Expense | $ 2,886,072 | $ 2,293,136 | $ 1,051,770 |
13. INCOME TAX EXPENSE (Details 1) - USD ($) |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Deferred Tax Assets: | ||
Allowance for loan losses | $ 2,564,214 | $ 2,201,291 |
Split Dollar Life Insurance | 4,440 | 4,440 |
Nonqualified deferred compensation | 702,440 | 594,132 |
Low income housing partnerships losses | 210,107 | 308,539 |
Core deposit amortization | 176,605 | 72,188 |
Other real estate owned | 269,610 | 3,746 |
Pension plan | 1,382,268 | 1,199,686 |
Total Assets | 5,309,684 | 4,384,022 |
Deferred Tax Liabilities: | ||
Unearned low income housing credits | 418,416 | 523,769 |
Depreciation | 359,406 | 320,743 |
Pension | 1,988,736 | 1,864,964 |
Goodwill tax amortization | 901,340 | 853,880 |
Securities available for sale | 1,757 | 1,272 |
Total Liabilities | 3,669,655 | 3,564,628 |
Net Deferred Tax Asset (included in Other Assets on Balance Sheet) | $ 1,640,029 | $ 819,394 |
13. INCOME TAX EXPENSE (Details 2) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Income Tax Disclosure [Abstract] | |||
Tax expense at federal statutory rates | $ 3,843,048 | $ 2,959,056 | $ 2,251,851 |
Increases (decreases) in taxes resulting from: | |||
State income taxes, net of federal benefit | 8,087 | 8,659 | 9,229 |
Partially tax-exempt income | (46,348) | (54,529) | (44,676) |
Tax-exempt income | (222,672) | (190,192) | (197,482) |
Prior year LIH credits | (132,028) | (21,787) | (61,768) |
LIH and historic credits | (568,854) | (484,955) | (611,795) |
Deferred Tax Asset Valuation Allowance - reversal | 0 | 396,440 | 0 |
Other | 4,840 | (112,714) | (2,710) |
Total Income Tax Expense | $ 2,886,072 | $ 2,293,136 | $ 1,051,770 |
13. INCOME TAX EXPENSE (Details Narrative) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Income Tax Disclosure [Abstract] | ||
Valuation allowance | $ 582,778 | $ 582,778 |
14. EMPLOYEE BENEFITS (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Change in Benefit Obligation | |||
Benefit obligation, beginning | $ 10,777,415 | $ 7,933,568 | $ 8,931,940 |
Service cost | 648,334 | 501,032 | 599,933 |
Interest cost | 410,944 | 377,706 | 350,314 |
Actuarial gain (loss) | (137,048) | 2,030,583 | (1,300,094) |
Benefits paid | (754,987) | (65,474) | (648,525) |
Benefit obligation, ending | 10,944,658 | 10,777,415 | 7,933,568 |
Change in Plan Assets | |||
Fair value of plan assets, beginning | 11,683,845 | 9,687,226 | 8,123,437 |
Actual return on plan assets | (640) | 562,093 | 1,462,314 |
Employer contribution | 750,000 | 1,500,000 | 750,000 |
Benefits paid | (754,987) | (65,474) | (648,525) |
Fair value of plan assets, ending | 11,678,218 | 11,683,845 | 9,687,226 |
Funded status at the end of the year | $ 733,560 | $ 906,430 | $ 1,753,658 |
14. EMPLOYEE BENEFITS (Details 2) |
Dec. 31, 2015
USD ($)
|
---|---|
Notes to Financial Statements | |
2016 | $ 582,606 |
2017 | 48,333 |
2018 | 1,249,321 |
2019 | 662,704 |
2020 | 543,814 |
2021-2025 | 4,568,645 |
Total | $ 7,655,423 |
14. EMPLOYEE BENEFITS (Details Narrative) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Pension contributions | $ 750,000 | $ 1,500,000 | $ 750,000 |
Shares held by ESOP | 188,596 | 188,396 | |
Contributions under employee benefit plan - 401K Plan | $ 211,987 | $ 190,057 | 183,468 |
ESOP Contributions | $ 420,000 | 360,000 | 360,000 |
Pension plan's allocations | The pension plans allocations as of December 31, 2015 and 2014 were 60% equity and 40% fixed and 61% equity and 39% fixed, respectively. | ||
Deferred Compensation Plan [Member] | |||
Contributions to employee benefit plan - Deferred Compensation Plan | $ 110,000 | $ 100,000 | $ 90,000 |
15. CONCENTRATIONS OF CREDIT (Details Narrative) - USD ($) |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Concentrations Of Credit Details Narrative | ||
Cash deposits in other commercial banks | $ 2,156,006 | $ 1,731,223 |
16. COMMITMENTS (Details) - USD ($) |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Commitments Details | ||
Commitments to loan money | $ 135,138,834 | $ 120,922,771 |
Standby letters of credit | $ 1,344,191 | $ 2,077,870 |
16. COMMITMENTS (Details 1) |
Dec. 31, 2015
USD ($)
|
---|---|
Operating Leases | |
2016 | $ 160,882 |
2017 | 116,899 |
2018 | 73,226 |
2019 | 74,349 |
2020 | $ 75,500 |
16. COMMITMENTS (Details Narrative) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Commitments Details Narrative | |||
Lease expense | $ 164,294 | $ 120,728 | $ 121,025 |
17. ON BALANCE SHEET DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Details) - USD ($) |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
On Balance Sheet Derivative Instruments And Hedging Activities Details | ||
Notional amount | $ 189,629 | $ 87,782 |
Fair market value of contracts | $ 15,162 | $ 32,795 |
18. TRANSACTIONS WITH RELATED PARTIES (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Transactions With Related Parties Details | ||
Total loans, beginning of year | $ 7,449,140 | $ 7,786,058 |
New loans | 5,226,432 | 5,249,565 |
Relationship Change | (44,948) | 0 |
Repayments | (5,450,520) | (5,586,483) |
Total loans, end of year | $ 7,180,104 | $ 7,449,140 |
19. DIVIDEND LIMITATIONS ON SUBSIDIARY BANK (Details Narrative) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Dividend Limitations On Subsidiary Bank Details Narrative | |||
Dividends paid | $ 2,500,000 | $ 1,300,000 | $ 1,550,000 |
20. DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($) |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Financial Assets | ||
Loans, Estimated Fair Value | $ 555,762 | $ 551,338 |
Loans, Carrying value | 544,053 | 518,202 |
Financial Liabilities | ||
Time deposits, Estimated Fair Value | 162,524 | 196,826 |
Time deposits, Carrying Value | 161,040 | 195,464 |
Long-term debt, Estimated Fair Value | 48,565 | 9,862 |
Long-term debt, Carrying Value | $ 48,161 | $ 9,875 |
25. PARENT CORPORATION ONLY FINANCIAL STATEMENTS (Details 1) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Income | |||
Interest Income | $ 302,117 | $ 204,649 | $ 193,244 |
Expenses | |||
Other expense | 2,875,609 | 3,647,722 | 4,772,743 |
Income Tax Expense (Benefit) | 2,886,072 | 2,293,136 | 1,051,770 |
Income before undistributed subsidiary net income | 8,581,584 | 5,847,262 | 4,822,978 |
Undistributed subsidiary net income | (164,575) | (45,653) | (107,185) |
Net income | 8,417,009 | 5,801,609 | 4,715,793 |
Parent [Member] | |||
Income | |||
Dividends from affiliate | 2,500,000 | 1,300,000 | 1,550,000 |
Interest Income | 0 | 0 | 5 |
Net limited partnership income (loss) | 4,792 | 0 | (65,165) |
Total Income | 2,504,792 | 1,300,000 | 1,484,840 |
Expenses | |||
Other expense | 21,316 | 7,100 | 0 |
Administrative expenses | 0 | 0 | 60,209 |
Total Expenses | 21,316 | 7,100 | 60,209 |
Net income before income tax expense (benefit) and undistributed subsidiary net income | 2,483,476 | 1,292,900 | 1,424,631 |
Income Tax Expense (Benefit) | (191,494) | 243,492 | (239,908) |
Income before undistributed subsidiary net income | 2,674,970 | 1,049,408 | 1,664,539 |
Undistributed subsidiary net income | 5,742,039 | 4,752,201 | 3,051,254 |
Net income | $ 8,417,009 | $ 5,801,609 | $ 4,715,793 |
26. INVESTMENT IN VBS MORTGAGE, LLC (Details) - USD ($) |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
Dec. 31, 2012 |
---|---|---|---|---|
Assets | ||||
Cash and cash equivalents | $ 8,519,447 | $ 23,202,543 | ||
Property and equipment, net | 7,542,078 | 6,458,254 | ||
Other Assets | 11,336,735 | 10,050,893 | ||
Total Assets | 665,356,846 | 605,308,102 | ||
Liabilities | ||||
Total Liabilities | 582,406,434 | 527,509,699 | ||
STOCKHOLDERS EQUITY: | ||||
Retained earnings | 48,056,300 | 42,554,421 | ||
Total Equity | 82,950,412 | 77,798,403 | $ 54,141,235 | $ 49,383,960 |
Total Liabilities and Equity | 665,356,846 | 605,308,102 | ||
VBS MORTGAGE, LLC [Member] | ||||
Assets | ||||
Cash and cash equivalents | 1,071,293 | 610,973 | ||
Loans Receivable | 763,534 | 818,054 | ||
Property and equipment, net | 79,038 | 45,600 | ||
Other Assets | 266,073 | 162,304 | ||
Total Assets | 2,179,938 | 1,636,931 | ||
Liabilities | ||||
Other liabilities | 271,004 | 215,713 | ||
Total Liabilities | 271,004 | 215,713 | ||
STOCKHOLDERS EQUITY: | ||||
Capital | 219,634 | 219,634 | ||
Retained earnings | 1,689,300 | 1,201,584 | ||
Total Equity | 1,908,934 | 1,421,218 | ||
Total Liabilities and Equity | $ 2,179,938 | $ 1,636,931 |
26. INVESTMENT IN VBS MORTGAGE, LLC (Details 1) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Expenses | |||
Net income | $ 8,417,009 | $ 5,801,609 | $ 4,715,793 |
VBS MORTGAGE, LLC [Member] | |||
Income | |||
Mortgage origination income | 2,645,235 | 1,907,804 | 2,528,108 |
Other Income | 51,175 | 53,528 | 42,092 |
Total Income | 2,696,410 | 1,961,332 | 2,570,200 |
Expenses | |||
Salaries and employee benefits | 1,413,107 | 1,105,902 | 1,461,797 |
Occupancy and equipment expense | 212,858 | 177,014 | 164,717 |
Management and professional fees | 290,102 | 321,053 | 301,558 |
Other | 231,757 | 205,188 | 284,845 |
Total Expenses | 2,147,824 | 1,809,157 | 2,212,917 |
Net income | $ 548,586 | $ 152,175 | $ 357,283 |
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