10-Q 1 a13-8558_110q.htm 10-Q

Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 


 

FORM 10-Q

 


 

x

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2013

 


 

Commission file number 001-34096

 


 

BRIDGE BANCORP, INC.

(Exact name of registrant as specified in its charter)

 

NEW YORK

 

11-2934195

(State or other jurisdiction of incorporation or organization)

 

(IRS Employer Identification Number)

 

 

 

2200 MONTAUK HIGHWAY, BRIDGEHAMPTON, NEW YORK

 

11932

(Address of principal executive offices)

 

(Zip Code)

 

Registrant’s telephone number, including area code: (631) 537-1000

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No o

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes x No o

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.  (Check one):

 

Large accelerated filer o

 

Accelerated filer x

 

 

 

Non-accelerated filer o (Do not check if a smaller reporting company)

 

Smaller reporting company o

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

 

There were 8,973,568 shares of common stock outstanding as of May 1, 2013.

 

 



Table of Contents

 

 

BRIDGE BANCORP, INC.

 

PART I -

FINANCIAL INFORMATION

 

 

 

 

Item 1.

Financial Statements

3

 

 

 

 

Consolidated Balance Sheets as of March 31, 2013 and December 31, 2012

3

 

 

 

 

Consolidated Statements of Income for the Three Months Ended March 31, 2013 and 2012

4

 

 

 

 

Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2013 and 2012

5

 

 

 

 

Consolidated Statements of Stockholders’ Equity for the Three Months Ended March 31, 2013 and 2012

6

 

 

 

 

Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2013 and 2012

7

 

 

 

 

Condensed Notes to Consolidated Financial Statements

8

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

34

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

47

 

 

 

Item 4.

Controls and Procedures

48

 

 

 

PART II -

OTHER INFORMATION

48

 

 

 

Item 1.

Legal Proceedings

48

 

 

 

Item 1A.

Risk Factors

48

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

48

 

 

 

Item 3.

Defaults Upon Senior Securities

48

 

 

 

Item 4.

Mine Safety Disclosures

49

 

 

 

Item 5.

Other Information

49

 

 

 

Item 6.

Exhibits

49

 

 

 

Signatures

50

 

 



Table of Contents

 

 

Item 1. Financial Statements

BRIDGE BANCORP, INC. AND SUBSIDIARIES

Consolidated Balance Sheets (unaudited)

(In thousands, except share and per share amounts)

 

 

 

March 31,

 

December 31,

 

 

 

2013

 

2012

 

ASSETS

 

 

 

 

 

Cash and due from banks

 

$

18,404

 

$

46,855

 

Interest earning deposits with banks

 

7,007

 

4,394

 

Total cash and cash equivalents

 

25,411

 

51,249

 

 

 

 

 

 

 

Securities available for sale, at fair value

 

455,464

 

529,070

 

Securities held to maturity (fair value of $199,107 and $213,702, respectively)

 

196,314

 

210,735

 

Total securities

 

651,778

 

739,805

 

 

 

 

 

 

 

Securities, restricted

 

3,037

 

2,978

 

 

 

 

 

 

 

Loans held for investments

 

862,096

 

798,446

 

Allowance for loan losses

 

(14,924

)

(14,439

)

Loans, net

 

847,172

 

784,007

 

 

 

 

 

 

 

Premises and equipment, net

 

27,154

 

26,001

 

Accrued interest receivable

 

5,567

 

5,436

 

Goodwill

 

2,034

 

2,034

 

Core deposit intangible

 

233

 

249

 

Other real estate owned

 

250

 

250

 

Other assets

 

14,001

 

12,704

 

Total Assets

 

$

1,576,637

 

$

1,624,713

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

Demand deposits

 

$

410,601

 

$

529,205

 

Savings, NOW and money market deposits

 

804,423

 

722,869

 

Certificates of deposit of $100,000 or more

 

120,801

 

118,724

 

Other time deposits

 

38,376

 

38,524

 

Total deposits

 

1,374,201

 

1,409,322

 

 

 

 

 

 

 

Federal funds purchased and Federal Home Loan Bank overnight borrowings

 

29,000

 

44,500

 

Federal Home Loan Bank term advances

 

15,000

 

15,000

 

Repurchase agreements

 

12,821

 

12,390

 

Junior subordinated debentures

 

16,002

 

16,002

 

Accrued interest payable

 

158

 

147

 

Other liabilities and accrued expenses

 

8,041

 

8,680

 

Total Liabilities

 

1,455,223

 

1,506,041

 

 

 

 

 

 

 

Commitments and Contingencies

 

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

Preferred stock, par value $.01 per share (2,000,000 shares authorized; none issued)

 

 

 

Common stock, par value $.01 per share:

 

 

 

 

 

Authorized: 20,000,000 shares; 8,975,984 and 8,923,010 shares issued, respectively; 8,973,788 and 8,907,890 shares outstanding, respectively

 

90

 

89

 

Surplus

 

64,126

 

64,208

 

Retained earnings

 

58,215

 

55,102

 

Less: Treasury Stock at cost, 2,196 and 15,120 shares, respectively

 

(48

)

(309

)

 

 

122,383

 

119,090

 

Accumulated other comprehensive income (loss):

 

 

 

 

 

Net unrealized gain on securities, net of deferred income taxes of ($1,403) and ($1,803), respectively

 

2,131

 

2,738

 

Pension liability, net of deferred income taxes of $2,011 and $2,036, respectively

 

(3,011

)

(3,050

)

Net unrealized loss on cash flow hedge, net of deferred income taxes of $59 and $70, respectively

 

(89

)

(106

)

Total Stockholders’ Equity

 

121,414

 

118,672

 

Total Liabilities and Stockholders’ Equity

 

$

1,576,637

 

$

1,624,713

 

 

See accompanying condensed notes to the Unaudited Consolidated Financial Statements.

 

3



Table of Contents

 

 

BRIDGE BANCORP, INC. AND SUBSIDIARIES

Consolidated Statements of Income (unaudited)

(In thousands, except per share amounts)

 

 

 

For the

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2013

 

2012

 

Interest income:

 

 

 

 

 

Loans (including fee income)

 

$

10,668

 

$

9,522

 

Mortgage-backed securities, CMOs and other asset-backed securities

 

1,443

 

2,019

 

U.S. GSE securities

 

791

 

772

 

State and municipal obligations

 

680

 

783

 

Corporate Bonds

 

101

 

160

 

Deposits with banks

 

5

 

24

 

Other interest and dividend income

 

43

 

18

 

Total interest income

 

13,731

 

13,298

 

 

 

 

 

 

 

Interest expense:

 

 

 

 

 

Savings, NOW and money market deposits

 

884

 

946

 

Certificates of deposit of $100,000 or more

 

329

 

386

 

Other time deposits

 

85

 

114

 

Federal funds purchased and repurchase agreements

 

124

 

111

 

Federal home loan bank advances

 

40

 

 

Junior subordinated debentures

 

341

 

341

 

Total interest expense

 

1,803

 

1,898

 

 

 

 

 

 

 

Net interest income

 

11,928

 

11,400

 

Provision for loan losses

 

550

 

825

 

Net interest income after provision for loan losses

 

11,378

 

10,575

 

 

 

 

 

 

 

Non interest income:

 

 

 

 

 

Service charges on deposit accounts

 

801

 

809

 

Fees for other customer services

 

653

 

605

 

Net securities gains

 

338

 

272

 

Title fee income

 

286

 

223

 

Other operating income

 

26

 

44

 

Total non interest income

 

2,104

 

1,953

 

 

 

 

 

 

 

Non interest expense:

 

 

 

 

 

Salaries and employee benefits

 

5,394

 

5,111

 

Occupancy and equipment

 

1,191

 

986

 

Technology and communications

 

542

 

502

 

Marketing and advertising

 

348

 

259

 

Professional services

 

309

 

272

 

FDIC assessments

 

216

 

172

 

Amortization of core deposit intangible

 

16

 

18

 

Cost of extinguishment of debt

 

 

158

 

Other operating expenses

 

892

 

743

 

Total non interest expense

 

8,908

 

8,221

 

 

 

 

 

 

 

Income before income taxes

 

4,574

 

4,307

 

Income tax expense

 

1,461

 

1,368

 

Net income

 

$

3,113

 

$

2,939

 

Basic earnings per share

 

$

0.35

 

$

0.35

 

Diluted earnings per share

 

$

0.35

 

$

0.35

 

 

See accompanying condensed notes to the Unaudited Consolidated Financial Statements.

 

4



Table of Contents

 

 

BRIDGE BANCORP, INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income (unaudited)

(In thousands)

 

 

 

For the

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2013

 

2012

 

Net Income

 

$

3,113

 

$

2,939

 

Other comprehensive (loss) income:

 

 

 

 

 

Change in unrealized net gains on securities available for sale, net of reclassification and deferred tax effects

 

(607

)

(426

)

Adjustment to pension liability, net of deferred income taxes

 

39

 

44

 

Unrealized loss on cash flow hedge, net of deferred income taxes

 

17

 

 

Total other comprehensive loss

 

(551

)

(382

)

Comprehensive income

 

$

2,562

 

$

2,557

 

 

See accompanying condensed notes to the Unaudited Consolidated Financial Statements.

 

5



Table of Contents

 

 

BRIDGE BANCORP, INC. AND SUBSIDIARIES

Consolidated Statements of Stockholders’ Equity (unaudited)

(In thousands, except per share amounts)

 

 

 

Common
Stock

 

Surplus

 

Retained
Earnings

 

Treasury
Stock

 

Accumulated
Other
Comprehensive
Loss

 

Total

 

Balance at January 1, 2013

 

$

89

 

$

64,208

 

$

55,102

 

$

(309

)

$

(418

)

$

118,672

 

Net income

 

 

 

 

 

3,113

 

 

 

 

 

3,113

 

Stock awards granted and distributed

 

1

 

(411

)

 

 

410

 

 

 

 

Vesting of stock awards

 

 

 

 

 

 

 

(149

)

 

 

(149

)

Tax effect of stock plans

 

 

 

(9

)

 

 

 

 

 

 

(9

)

Share based compensation expense

 

 

 

338

 

 

 

 

 

 

 

338

 

Other comprehensive loss, net of deferred income taxes

 

 

 

 

 

 

 

 

 

(551

)

(551

)

Balance at March 31, 2013

 

$

90

 

$

64,126

 

$

58,215

 

$

(48

)

$

(969

)

$

121,414

 

 

 

 

Common
Stock

 

Surplus

 

Retained
Earnings

 

Treasury
Stock

 

Accumulated
Other
Comprehensive
Income (Loss)

 

Total

 

Balance at January 1, 2012

 

$

84

 

$

52,962

 

$

52,228

 

$

(715

)

$

2,428

 

$

106,987

 

Net income

 

 

 

 

 

2,939

 

 

 

 

 

2,939

 

Shares issued under the dividend reinvestment plan (“DRP”)

 

1

 

2,087

 

 

 

 

 

 

 

2,088

 

Stock awards granted and distributed

 

 

 

(562

)

 

 

562

 

 

 

 

Stock awards forfeited

 

 

 

4

 

 

 

(4

)

 

 

 

Vesting of stock awards

 

 

 

 

 

 

 

(88

)

 

 

(88

)

Tax effect of stock plans

 

 

 

(10

)

 

 

 

 

 

 

(10

)

Share based compensation expense

 

 

 

366

 

 

 

 

 

 

 

366

 

Cash dividend declared, $0.23 per share

 

 

 

 

 

(1,923

)

 

 

 

 

(1,923

)

Other comprehensive loss, net of deferred income taxes

 

 

 

 

 

 

 

 

 

(382

)

(382

)

Balance at March 31, 2012

 

$

85

 

$

54,847

 

$

53,244

 

$

(245

)

$

2,046

 

$

109,977

 

 

See accompanying condensed notes to the Unaudited Consolidated Financial Statements.

 

6



Table of Contents

 

 

BRIDGE BANCORP, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows (unaudited)

(In thousands)

 

 

 

For the

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2013

 

2012

 

Cash flows from operating activities:

 

 

 

 

 

Net Income

 

$

3,113

 

$

2,939

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

Provision for loan losses

 

550

 

825

 

Depreciation and amortization

 

417

 

435

 

Net amortization on securities

 

1,512

 

958

 

Amortization of core deposit intangible

 

16

 

18

 

Share based compensation expense

 

338

 

366

 

Net securities gains

 

(338

)

(272

)

Increase in accrued interest receivable

 

(131

)

(830

)

(Increase) decrease in other assets

 

(1,268

)

42

 

(Decrease) increase in accrued expenses and other liabilities

 

(202

)

382

 

Net cash provided by operating activities

 

4,007

 

4,863

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

Purchases of securities available for sale

 

(26,033

)

(133,659

)

Purchases of securities, restricted

 

(59

)

(360

)

Purchases of securities held to maturity

 

 

(17,168

)

Proceeds from sales of securities available for sale

 

46,553

 

3,344

 

Maturities, calls and principal payments of securities available for sale

 

51,395

 

63,660

 

Maturities, calls and principal payments of securities held to maturity

 

13,932

 

8,605

 

Net increase in loans

 

(63,715

)

(29,087

)

Purchase of premises and equipment

 

(1,570

)

(692

)

Net cash provided by (used in) investing activities

 

20,503

 

(105,357

)

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

Net (decrease) increase in deposits

 

(35,121

)

14,297

 

Net (decrease) increase in federal funds purchased and FHLB overnight borrowings

 

(15,500

)

36,000

 

Net increase (decrease) in repurchase agreements

 

431

 

(5,359

)

Net proceeds from issuance of common stock

 

 

2,088

 

Repurchase of surrendered stock from vesting of restricted stock awards

 

(149

)

(88

)

Excess tax expense from share based compensation

 

(9

)

(10

)

Cash dividends paid

 

 

(1,923

)

Net cash (used in) provided by financing activities

 

(50,348

)

45,005

 

 

 

 

 

 

 

Net decrease in cash and cash equivalents

 

(25,838

)

(55,489

)

Cash and cash equivalents at beginning of period

 

51,249

 

79,546

 

Cash and cash equivalents at end of period

 

$

25,411

 

$

24,057

 

 

 

 

 

 

 

Supplemental Information-Cash Flows:

 

 

 

 

 

Cash paid for:

 

 

 

 

 

Interest

 

$

1,792

 

$

1,962

 

Income tax

 

$

190

 

$

90

 

 

 

 

 

 

 

Noncash investing and financing activities:

 

 

 

 

 

Securities which settled in the subsequent period

 

$

 

$

894

 

 

See accompanying condensed notes to the Unaudited Consolidated Financial Statements.

 

7



Table of Contents

 

 

BRIDGE BANCORP, INC. AND SUBSIDIARIES

CONDENSED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

 

1. BASIS OF PRESENTATION

 

Bridge Bancorp, Inc. (the “Company”) is a bank holding company incorporated under the laws of the State of New York. The Company’s business currently consists of the operations of its wholly-owned subsidiary, The Bridgehampton National Bank (the “Bank”). The Bank’s operations include its real estate investment trust subsidiary, Bridgehampton Community, Inc. (“BCI”), and a financial title insurance subsidiary, Bridge Abstract LLC (“Bridge Abstract”). In addition to the Bank, the Company has another subsidiary Bridge Statutory Capital Trust II which was formed in 2009. In accordance with current accounting guidance, the trust is not consolidated in the Company’s financial statements.

 

The accompanying Unaudited Consolidated Financial Statements, which include the accounts of the Company and its wholly-owned subsidiary, the Bank, have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. The Unaudited Consolidated Financial Statements included herein reflect all normal recurring adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented. In preparing the interim financial statements, management has made estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reported periods. Such estimates are subject to change in the future as additional information becomes available or previously existing circumstances are modified. Actual future results could differ significantly from those estimates. The annualized results of operations for the three months ended March 31, 2013 are not necessarily indicative of the results of operations that may be expected for the entire fiscal year. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain reclassifications have been made to prior year amounts, and the related discussion and analysis, to conform to the current year presentation. These reclassifications did not have an impact on net income or total stockholders’ equity. The Unaudited Consolidated Financial Statements should be read in conjunction with the Audited Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.

 

2. EARNINGS PER SHARE

 

Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) No. 260-10-45 addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting and, therefore, need to be included in the earnings allocation in computing earnings per share (“EPS”).  The restricted stock awards and restricted stock units granted by the Company contain nonforfeitable rights to dividends and therefore are considered participating securities.  The two-class method for calculating basic EPS excludes dividends paid to participating securities and any undistributed earnings attributable to participating securities.

 

The computation of EPS for the three months ended March 31, 2013 and 2012 is as follows:

 

 

 

Three months ended,

 

 

 

March 31,

 

(In thousands, except per share data)

 

2013

 

2012

 

Net Income

 

$

3,113

 

$

2,939

 

Less: Dividends paid on and earnings allocated to participating securities

 

(80

)

(77

)

Income attributable to common stock

 

$

3,033

 

$

2,862

 

 

 

 

 

 

 

Weighted average common shares outstanding, including participating securities

 

8,978

 

8,447

 

Less: weighted average participating securities

 

(231

)

(224

)

Weighted average common shares outstanding

 

8,747

 

8,223

 

Basic earnings per common share

 

$

0.35

 

$

0.35

 

 

 

 

 

 

 

Income attributable to common stock

 

$

3,033

 

$

2,862

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

8,747

 

8,223

 

Weighted average common equivalent shares outstanding

 

 

1

 

Weighted average common and equivalent shares outstanding

 

8,747

 

8,224

 

Diluted earnings per common share

 

$

0.35

 

$

0.35

 

 

8



Table of Contents

 

 

There were 49,362 and 52,123 options outstanding at March 31, 2013 and March 31, 2012, respectively, that were not included in the computation of diluted earnings per share because the options’ exercise prices were greater than the average market price of common stock and were, therefore, antidilutive. The $16.0 million in convertible trust preferred securities outstanding at March 31, 2013, were not included in the computation of diluted earnings per share because the assumed conversion of the trust preferred securities was antidilutive.

 

3. STOCK BASED COMPENSATION PLANS

 

The Compensation Committee of the Board of Directors determines stock options and restricted stock awarded under the Bridge Bancorp, Inc. Equity Incentive Plan (“Plan”) and the Company accounts for this Plan under the FASB ASC No. 718 and 505. On May 4, 2012, the stockholders of the Company approved the Company’s 2012 Stock-Based Incentive Plan. The plan provides for the grant of stock-based and other incentive awards to officers, employees and directors of the Company.

 

No new grants of stock options were awarded and no compensation expense was attributable to stock options for the three months ended March 31, 2013 and March 31, 2012 because all stock options were vested.

 

The intrinsic value for stock options is calculated based on the exercise price of the underlying awards and the market price of our common stock as of the reporting date.  No stock options were exercised during the first three months of 2013 and 2012. The intrinsic value of options outstanding and exercisable at March 31, 2013 and March 31, 2012 was $0 and $12,000, respectively.

 

A summary of the status of the Company’s stock options as of and for the three months ended March 31, 2013 is as follows:

 

 

 

 

 

 

 

Weighted

 

 

 

 

 

 

 

Weighted

 

Average

 

 

 

 

 

Number

 

Average

 

Remaining

 

Aggregate

 

 

 

of

 

Exercise

 

Contractual

 

Intrinsic

 

(Dollars in thousands, except per share amounts)

 

Options

 

Price

 

Life

 

Value

 

Outstanding, December 31, 2012

 

49,962

 

$

25.32

 

 

 

 

 

Granted

 

 

 

 

 

 

 

Exercised

 

 

 

 

 

 

 

Forfeited

 

 

 

 

 

 

 

Expired

 

(600

)

$

15.47

 

 

 

 

 

Outstanding, March 31, 2013

 

49,362

 

$

25.44

 

3.23 years

 

 

Vested and Exercisable, March 31, 2013

 

49,362

 

$

25.44

 

3.23 years

 

 

 

 

 

Number of

 

Exercise

 

 

 

 

 

Range of Exercise Prices

 

Options

 

Price

 

 

 

 

 

 

 

4,572

 

$

24.00

 

 

 

 

 

 

 

39,659

 

$

25.25

 

 

 

 

 

 

 

3,000

 

$

26.55

 

 

 

 

 

 

 

2,131

 

$

30.60

 

 

 

 

 

 

 

49,362

 

 

 

 

 

 

 

 

During the three months ended March 31, 2013 restricted stock awards of 72,940 shares were granted. Of the 72,940 shares granted, 51,175 shares vest over seven years with a third vesting after years five, six and seven, 12,652 shares vest over five years with a third vesting after years three, four and five and the remaining 9,113 shares vest ratably over approximately five years. During the three months ended March 31, 2012 restricted stock awards of 21,993 shares were granted. These awards vest over approximately five years with a third vesting after years three, four and five. Compensation expense attributable to restricted stock awards was $299,000 and $327,000 for the three months ended March 31, 2013 and 2012, respectively.

 

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A summary of the status of the Company’s unvested restricted stock as of and for the three months ended March 31, 2013 is as follows:

 

 

 

 

 

Weighted

 

 

 

 

 

Average Grant-Date

 

 

 

Shares

 

Fair Value

 

Unvested, December 31, 2012

 

177,927

 

$

21.38

 

Granted

 

72,940

 

$

20.78

 

Vested

 

(31,399

)

$

21.66

 

Forfeited

 

 

 

Unvested, March 31, 2013

 

219,468

 

$

21.14

 

 

In April 2009, the Company adopted a Directors Deferred Compensation Plan. Under the Plan, independent directors may elect to defer all or a portion of their annual retainer fee in the form of restricted stock units. In addition, Directors receive a non-election retainer in the form of restricted stock units.  These restricted stock units vest ratably over one year and have dividend rights but no voting rights. In connection with this Plan, the Company recorded expenses of approximately $39,000 and $39,000 for the three months ended March 31, 2013 and 2012, respectively.

 

4. SECURITIES

 

The following table summarizes the amortized cost and fair value of the available for sale and held to maturity investment securities portfolio at March 31, 2013 and December 31, 2012 and the corresponding amounts of unrealized gains and losses therein:

 

 

 

March 31, 2013

 

 

 

 

 

Gross

 

Gross

 

Estimated

 

 

 

Amortized

 

Unrealized

 

Unrealized

 

Fair

 

(In thousands)

 

Cost

 

Gains

 

Losses

 

Value

 

Available for sale:

 

 

 

 

 

 

 

 

 

U.S. GSE securities

 

$

136,604

 

$

168

 

$

(381

)

$

136,391

 

State and municipal obligations

 

49,212

 

901

 

(20

)

50,093

 

U.S. GSE residential mortgage-backed securities

 

22,561

 

1,023

 

(7

)

23,577

 

U.S. GSE residential collateralized mortgage obligations

 

215,179

 

2,351

 

(593

)

216,937

 

U.S. GSE commercial mortgage-backed securities

 

3,118

 

 

(7

)

3,111

 

U.S. GSE commercial collateralized mortgage obligations

 

5,128

 

214

 

 

5,342

 

Non Agency commercial mortgage-backed securities

 

4,490

 

 

(132

)

4,358

 

Other Asset backed securities

 

15,638

 

103

 

(86

)

15,655

 

Total available for sale

 

451,930

 

4,760

 

(1,226

)

455,464

 

 

 

 

 

 

 

 

 

 

 

Held to maturity:

 

 

 

 

 

 

 

 

 

State and municipal obligations

 

96,143

 

2,085

 

(11

)

98,217

 

U.S. GSE residential mortgage-backed securities

 

9,055

 

 

(33

)

9,022

 

U.S. GSE residential collateralized mortgage obligations

 

53,028

 

691

 

(469

)

53,250

 

U.S. GSE commercial mortgage-backed securities

 

10,275

 

273

 

 

10,548

 

U.S. GSE commercial collateralized mortgage obligations

 

4,976

 

268

 

 

5,244

 

Corporate Bonds

 

22,837

 

205

 

(216

)

22,826

 

Total held to maturity

 

196,314

 

3,522

 

(729

)

199,107

 

Total securities

 

$

648,244

 

$

8,282

 

$

(1,955

)

$

654,571

 

 

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Table of Contents

 

 

 

 

December 31, 2012

 

 

 

 

 

Gross

 

Gross

 

Estimated

 

 

 

Amortized

 

Unrealized

 

Unrealized

 

Fair

 

(In thousands)

 

Cost

 

Gains

 

Losses

 

Value

 

Available for sale:

 

 

 

 

 

 

 

 

 

U.S. GSE securities

 

$

178,421

 

$

377

 

$

(346

)

$

178,452

 

State and municipal obligations

 

58,867

 

1,132

 

(36

)

59,963

 

U.S. GSE residential mortgage-backed securities

 

19,462

 

1,135

 

 

20,597

 

U.S. GSE residential collateralized mortgage obligations

 

224,226

 

2,762

 

(542

)

226,446

 

U.S. GSE commercial mortgage-backed securities

 

3,132

 

6

 

 

3,138

 

U.S. GSE commercial collateralized mortgage obligations

 

9,079

 

278

 

 

9,357

 

Non Agency commercial mortgage-backed securities

 

4,754

 

235

 

 

4,989

 

Other Asset backed securities

 

26,588

 

65

 

(525

)

26,128

 

Total available for sale

 

524,529

 

5,990

 

(1,449

)

529,070

 

 

 

 

 

 

 

 

 

 

 

Held to maturity:

 

 

 

 

 

 

 

 

 

U.S. GSE securities

 

4,992

 

24

 

 

5,016

 

State and municipal obligations

 

98,752

 

2,241

 

(31

)

100,962

 

U.S. GSE residential mortgage-backed securities

 

9,483

 

26

 

 

9,509

 

U.S. GSE residential collateralized mortgage obligations

 

59,388

 

704

 

(404

)

59,688

 

U.S. GSE commercial mortgage-backed securities

 

10,324

 

350

 

 

10,674

 

U.S. GSE commercial collateralized mortgage obligations

 

4,975

 

254

 

 

5,229

 

Corporate Bonds

 

22,821

 

134

 

(331

)

22,624

 

Total held to maturity

 

210,735

 

3,733

 

(766

)

213,702

 

Total securities

 

$

735,264

 

$

9,723

 

$

(2,215

)

$

742,772

 

 

The following table summarizes the amortized cost, fair value and maturities of the available for sale and held to maturity investment securities portfolio at March 31, 2013. 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.

 

 

 

March 31, 2013

 

 

 

Amortized

 

Fair

 

(In thousands)

 

Cost

 

Value

 

Maturity

 

 

 

 

 

Available for sale:

 

 

 

 

 

Within one year

 

$

11,391

 

$

11,412

 

One to five years

 

36,845

 

37,744

 

Five to ten years

 

153,264

 

153,603

 

Beyond ten years

 

250,430

 

252,705

 

Total

 

$

451,930

 

$

455,464

 

 

 

 

 

 

 

Held to maturity:

 

 

 

 

 

Within one year

 

$

47,991

 

$

48,012

 

One to five years

 

47,841

 

48,216

 

Five to ten years

 

19,075

 

19,994

 

Beyond ten years

 

81,407

 

82,885

 

Total

 

$

196,314

 

$

199,107

 

 

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Table of Contents

 

 

Securities with unrealized losses at March 31, 2013 and December 31, 2012, aggregated by category and length of time that individual securities have been in a continuous unrealized loss position, are as follows:

 

 

 

Less than 12 months

 

Greater than 12 months

 

March 31, 2013

 

 

 

Unrealized

 

 

 

Unrealized

 

(In thousands)

 

Fair Value

 

losses

 

Fair Value

 

losses

 

Available for sale:

 

 

 

 

 

 

 

 

 

U.S. GSE securities

 

$

85,313

 

$

381

 

$

 

$

 

State and municipal obligations

 

8,717

 

15

 

1,817

 

5

 

U.S. GSE residential mortgage-backed securities

 

3,259

 

7

 

 

 

U.S. GSE residential collateralized mortgage obligations

 

67,922

 

514

 

5,190

 

79

 

U.S. GSE commercial mortgage-backed securities

 

3,111

 

7

 

 

 

Non Agency commercial mortgage-backed securities

 

4,358

 

132

 

 

 

Other Asset backed securities

 

2,910

 

86

 

 

 

Total available for sale

 

175,590

 

1,142

 

7,007

 

84

 

 

 

 

 

 

 

 

 

 

 

Held to maturity:

 

 

 

 

 

 

 

 

 

State and municipal obligations

 

17,239

 

11

 

 

 

U.S. GSE residential mortgage-backed securities

 

9,022

 

33

 

 

 

U.S. GSE residential collateralized mortgage obligations

 

33,718

 

469

 

 

 

Corporate Bonds

 

 

 

10,784

 

216

 

Total held to maturity

 

$

59,979

 

$

513

 

$

10,784

 

$

216

 

 

 

 

Less than 12 months

 

Greater than 12 months

 

December 31, 2012

 

 

 

Unrealized

 

 

 

Unrealized

 

(In thousands)

 

Fair Value

 

losses

 

Fair Value

 

losses

 

Available for sale:

 

 

 

 

 

 

 

 

 

U.S. GSE securities

 

$

79,692

 

$

346

 

$

 

$

 

State and municipal obligations

 

13,878

 

36

 

226

 

 

U.S. GSE residential mortgage-backed securities

 

90

 

 

 

 

U.S. GSE residential collateralized mortgage obligations

 

65,961

 

542

 

 

 

Other Asset backed securities

 

18,109

 

525

 

 

 

Total available for sale

 

177,730

 

1,449

 

226

 

 

 

 

 

 

 

 

 

 

 

 

Held to maturity:

 

 

 

 

 

 

 

 

 

State and municipal obligations

 

28,939

 

31

 

 

 

U.S. GSE residential collateralized mortgage obligations

 

41,563

 

404

 

 

 

Corporate Bonds

 

 

 

17,669

 

331

 

Total held to maturity

 

$

70,502

 

$

435

 

$

17,669

 

$

331

 

 

Other-Than-Temporary-Impairment

 

Management evaluates securities for other-than-temporary impairment (“OTTI”) at least on a quarterly basis, and more frequently when economic or market conditions warrant. The investment securities portfolio is evaluated for OTTI by segregating the portfolio into two general segments and applying the appropriate OTTI model. Investment securities classified as available for sale or held-to-maturity are generally evaluated for OTTI under FASB ASC 320, Accounting for Certain Investments in Debt and Equity Securities. In determining OTTI under the FASB ASC 320 model, management considers many factors, including: (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, (3) whether the market decline was affected by macroeconomic conditions, and (4) whether the Company has the intent to sell the debt security or more likely than not will be required to sell the debt security before its anticipated recovery. If either of the criteria regarding intent or requirement to sell is met, the entire difference between amortized cost and fair value is recognized as impairment through earnings. For debt securities that do not meet the aforementioned criteria, the amount of impairment is split into two components as follows: (1) OTTI related to credit loss, which must be recognized in the income statement and (2) OTTI related to other factors, which is recognized in other comprehensive income. The credit loss is defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis. The assessment of whether an other-than-temporary decline exists involves a high degree of subjectivity and judgment and is based on the information available to management at a point in time.

 

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Table of Contents

 

 

At March 31, 2013, the majority of unrealized losses on both the available for sale and held to maturity securities are related to the Company’s U.S. GSE residential collateralized mortgage obligations.  The decrease in fair value of the U.S. GSE residential collateralized mortgage obligations is attributable to changes in interest rates and not credit quality.  The Company does not have the intent to sell these securities and it is more likely than not that it will not be required to sell the securities before their anticipated recovery. Therefore, the Company does not consider these securities to be other-than-temporarily impaired at March 31, 2013.

 

Proceeds from sales of securities available for sale were $46.6 million and $3.3 million for the three months ended March 31, 2013 and 2012, respectively. Net gains of $0.3 million were realized on these sales during the three months ended March 31, 2013 and 2012, respectively. Proceeds from calls of securities were $31.7 million and $42.3 million for the three months ended March 31, 2013 and 2012, respectively.

 

Securities having a fair value of approximately $332.9 million and $333.0 million at March 31, 2013 and December 31, 2012, respectively, were pledged to secure public deposits and Federal Home Loan Bank and Federal Reserve Bank overnight borrowings.  The Bank did not hold any trading securities during the three months ended March 31, 2013 or the year ended December 31, 2012.

 

The Bank is a member of the Federal Home Loan Bank (“FHLB”) of New York. Members are required to own a particular amount of stock based on the level of borrowings and other factors, and may invest in additional amounts.  The Bank is a member of the Atlantic Central Banker’s Bank (“ACBB”) and is required to own ACBB stock. The Bank is also a member of the Federal Reserve Bank (“FRB”) system and required to own FRB stock.  FHLB, ACBB and FRB stock is carried at cost and periodically evaluated for impairment based on ultimate recovery of par value.  Both cash and stock dividends are reported as income.  The Bank owned approximately $3.0 million in FHLB, ACBB and FRB stock at March 31, 2013 and December 31, 2012.  These amounts were reported as restricted securities in the consolidated balance sheets.

 

5. ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS

 

FASB ASC No. 820-10 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. FASB ASC 820-10 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair values:

 

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

 

Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

 

Level 3: Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

 

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Table of Contents

 

 

Assets and liabilities measured on a recurring basis:

 

 

 

 

 

Fair Value Measurements at

March 31, 2013 Using:

 

 

 

 

 

 

 

Significant

 

 

 

 

 

 

 

Quoted Prices In

 

Other

 

Significant

 

 

 

 

 

Active Markets for

 

Observable

 

Unobservable

 

 

 

Carrying

 

Identical Assets

 

Inputs

 

Inputs

 

(In thousands)

 

Value

 

(Level 1)

 

(Level 2)

 

(Level 3)

 

Financial Assets:

 

 

 

 

 

 

 

 

 

Available for sale securities:

 

 

 

 

 

 

 

 

 

U.S. GSE securities

 

$

136,391

 

 

 

$

136,391

 

 

 

State and municipal obligations

 

50,093

 

 

 

50,093

 

 

 

U.S. GSE residential mortgage-backed securities

 

23,577

 

 

 

23,577

 

 

 

U.S. GSE residential collateralized mortgage obligations

 

216,937

 

 

 

216,937

 

 

 

U.S. GSE commercial mortgage-backed securities

 

3,111

 

 

 

3,111

 

 

 

U.S. GSE commercial collateralized mortgage obligations

 

5,342

 

 

 

5,342

 

 

 

Non Agency commercial mortgage-backed securities

 

4,358

 

 

 

4,358

 

 

 

Other Asset backed securities

 

15,655

 

 

 

15,655

 

 

 

Total available for sale

 

$

455,464

 

 

 

$

455,464

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial Liabilities:

 

 

 

 

 

 

 

 

 

Derivatives

 

$

(148

)

 

 

$

(148

)

 

 

 

 

 

 

 

Fair Value Measurements at

December 31, 2012 Using:

 

 

 

 

 

 

 

Significant

 

 

 

 

 

 

 

Quoted Prices In

 

Other

 

Significant

 

 

 

 

 

Active Markets for

 

Observable

 

Unobservable

 

 

 

Carrying

 

Identical Assets

 

Inputs

 

Inputs

 

(In thousands)

 

Value

 

(Level 1)

 

(Level 2)

 

(Level 3)

 

Financial Assets:

 

 

 

 

 

 

 

 

 

Available for sale securities:

 

 

 

 

 

 

 

 

 

U.S. GSE securities

 

$

178,452

 

 

 

$

178,452

 

 

 

State and municipal obligations

 

59,963

 

 

 

59,963

 

 

 

U.S. GSE residential mortgage-backed securities

 

20,597

 

 

 

20,597

 

 

 

U.S. GSE residential collateralized mortgage obligations

 

226,446

 

 

 

226,446

 

 

 

U.S. GSE commercial mortgage-backed securities

 

3,138

 

 

 

3,138

 

 

 

U.S. GSE commercial collateralized mortgage obligations

 

9,357

 

 

 

9,357

 

 

 

Non Agency commercial mortgage-backed securities

 

4,989

 

 

 

4,989

 

 

 

Other Asset backed securities

 

26,128

 

 

 

26,128

 

 

 

Total available for sale

 

$

529,070

 

 

 

$

529,070

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial Liabilities:

 

 

 

 

 

 

 

 

 

Derivatives

 

$

(176

)

 

 

$

(176

)

 

 

 

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Table of Contents

 

 

Assets measured at fair value on a non-recurring basis are summarized below:

 

 

 

 

 

Fair Value Measurements at

March 31, 2013 Using:

 

 

 

 

 

 

 

Significant

 

 

 

 

 

 

 

Quoted Prices In

 

Other

 

Significant

 

 

 

 

 

Active Markets for

 

Observable

 

Unobservable

 

 

 

Carrying

 

Identical Assets

 

Inputs

 

Inputs

 

(In thousands)

 

Value

 

(Level 1)

 

(Level 2)

 

(Level 3)

 

Impaired loans

 

$

734

 

 

 

 

 

$

734

 

 

 

 

 

 

Fair Value Measurements at

December 31, 2012 Using:

 

 

 

 

 

 

 

Significant

 

 

 

 

 

 

 

Quoted Prices In

 

Other

 

Significant

 

 

 

 

 

Active Markets for

 

Observable

 

Unobservable

 

 

 

Carrying

 

Identical Assets

 

Inputs

 

Inputs

 

(In thousands)

 

Value

 

(Level 1)

 

(Level 2)

 

(Level 3)

 

Impaired loans

 

$

178

 

 

 

 

 

$

178

 

 

Impaired loans with allocated allowance for loan losses at March 31, 2013, had a carrying amount of $0.7 million, which is made up of the outstanding balance of $1.0 million, net of a valuation allowance of $0.3 million. No additional provision for loan losses was necessary as of March 31, 2013. Impaired loans with allocated allowance for loan losses at December 31, 2012, had a carrying amount of $0.2 million, which is made up of the outstanding balance of $0.5 million, net of a valuation allowance of $0.3 million. This resulted in an additional provision for loan losses of $0.3 million that is included in the amount reported on the income statement.

 

The Company used the following method and assumptions in estimating the fair value of its financial instruments:

 

Cash and Due from Banks and Federal Funds Sold: Carrying amounts approximate fair value, since these instruments are either payable on demand or have short-term maturities. Cash on hand and non-interest due from bank accounts are Level 1 and interest bearing Cash Due from Banks and Federal Funds Sold are Level 2.

 

Securities Available for Sale and Held to Maturity: The estimated fair values are based on independent dealer quotations on nationally recognized securities exchanges, if available (Level 1). For securities where quoted prices are not available, fair value is based on matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2).

 

Restricted Securities: It is not practicable to determine the fair value of FHLB, ACBB and FRB stock due to restrictions placed on its transferability.

 

Derivatives: Represents an interest rate swap and the estimated fair values are based on valuation models using observable market data as of measurement date (Level 2).

 

Loans: The estimated fair values of real estate mortgage loans and other loans receivable are based on discounted cash flow calculations that use available market benchmarks when establishing discount factors for the types of loans resulting in a Level 3 classification. Exceptions may be made for adjustable rate loans (with resets of one year or less), which would be discounted straight to their rate index plus or minus an appropriate spread. All nonaccrual loans are carried at their current fair value. The methods utilized to estimate the fair value of loans do not necessarily represent an exit price and therefore, while permissible for presentation purposed under ASC 825-10, do not conform with ASC 820-10.

 

Impaired Loans: For impaired loans, the Company evaluates the fair value of the loan in accordance with current accounting guidance.  For loans that are collateral dependent, the fair value of the collateral is used to determine the fair value of the loan. The fair value of the collateral is determined based upon recent appraised values. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Adjustments may relate to location, square footage, condition, amenities, market rate of leases as well as timing of comparable sales. Such

 

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Table of Contents

 

 

adjustments are generally capped at 15% of appraised value and typically result in a Level 3 classification of the inputs for determining fair value. These adjustments as of March 31, 2013 and December 31, 2012 were not material to the financial statements. The fair value of the loan is compared to the carrying value to determine if any write-down or specific reserve is required. Impaired loans are evaluated on a quarterly basis for additional impairment and adjusted accordingly.

 

Appraisals for collateral-dependent impaired loans are performed by certified general appraisers (for commercial properties) or certified residential appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by the Company.  Once received, the Credit Administration department reviews the assumptions and approaches utilized in the appraisal as well as the overall resulting fair value in comparison with independent data sources such as recent market data or industry-wide statistics. On a quarterly basis, the Company compares the actual selling price of collateral that has been sold to the most recent appraised value to determine what additional adjustment should be made to the appraisal value to arrive at fair value. Management also considers the appraisal values for commercial properties associated with current loan origination activity.  Collectively, this information is reviewed to help assess current trends in commercial property values. For each collateral dependent impaired loan, management considers information that relates to the type of commercial property to determine if such properties may have appreciated or depreciated in value since the date of the most recent appraisal. Adjustments to fair value are made only when the analysis indicates a probable decline in collateral values.

 

Deposits: The estimated fair value of certificates of deposits are based on discounted cash flow calculations that use a replacement cost of funds approach to establishing discount rates for certificates of deposits maturities resulting in a Level 2 classification. Stated value is fair value for all other deposits resulting in a Level 1 classification.

 

Borrowed Funds: The estimated fair value of borrowed funds are based on discounted cash flow calculations that use a replacement cost of funds approach to establishing discount rates for funding maturities resulting in a Level 2 classification.

 

Junior Subordinated Debentures: The estimated fair value is based on estimates using market data for similarly risk weighted items and takes into consideration the convertible features of the debentures into common stock of the Company which is an unobservable input resulting in a Level 3 classification.

 

Accrued Interest Receivable and Payable: For these short-term instruments, the carrying amount is a reasonable estimate of the fair value resulting in a Level 1 or 2 classification.

 

Off-Balance-Sheet Liabilities: The fair value of off-balance-sheet commitments to extend credit is estimated using fees currently charged to enter into similar agreements. The fair value is immaterial as of March 31, 2013 and December 31, 2012.

 

Fair value estimates are made at specific points in time and are based on existing on-and off-balance sheet financial instruments. Such estimates are generally subjective in nature and dependent upon a number of significant assumptions associated with each financial instrument or group of financial instruments, including estimates of discount rates, risks associated with specific financial instruments, estimates of future cash flows, and relevant available market information. Changes in assumptions could significantly affect the estimates. In addition, fair value estimates do not reflect the value of anticipated future business, premiums or discounts that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument, or the tax consequences of realizing gains or losses on the sale of financial instruments.

 

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Table of Contents

 

 

The estimated fair values and recorded carrying amounts of the Bank’s financial instruments at March 31, 2013 and December 31, 2012 are as follows:

 

 

 

 

 

Fair Value Measurements at

March 31, 2013 Using:

 

 

 

 

 

 

 

 

 

Significant

 

 

 

 

 

 

 

 

 

Quoted Prices In

 

Other

 

Significant

 

 

 

 

 

 

 

Active Markets for

 

Observable

 

Unobservable

 

 

 

 

 

Carrying

 

Identical Assets

 

Inputs

 

Inputs

 

 

 

(In thousands)

 

Amount

 

(Level 1)

 

(Level 2)

 

(Level 3)

 

Total

 

Financial assets:

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

18,404

 

$

18,404

 

$

 

$

 

$

18,404

 

Interest bearing deposits with banks

 

7,007

 

 

7,007

 

 

7,007

 

Securities available for sale

 

455,464

 

 

455,464

 

 

455,464

 

Securities restricted

 

3,037

 

n/a

 

n/a

 

n/a

 

n/a

 

Securities held to maturity

 

196,314

 

 

199,107

 

 

199,107

 

Loans, net

 

847,172

 

 

 

866,577

 

866,577

 

Accrued interest receivable

 

5,567

 

 

2,700

 

2,867

 

5,567

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial liabilities:

 

 

 

 

 

 

 

 

 

 

 

Certificates of deposit

 

159,177

 

 

160,564

 

 

160,564

 

Demand and other deposits

 

1,215,024

 

1,215,024

 

 

 

1,215,024

 

Federal funds purchased and Federal Home Loan Bank overnight borrowings

 

29,000

 

29,000

 

 

 

29,000

 

Federal Home Loan Bank term advances

 

15,000

 

 

15,155

 

 

15,155

 

Repurchase agreements

 

12,821

 

 

13,419

 

 

13,419

 

Junior Subordinated Debentures

 

16,002

 

 

 

16,732

 

16,732

 

Derivatives

 

148

 

 

148

 

 

148

 

Accrued interest payable

 

158

 

20

 

138

 

 

158

 

 

 

 

 

 

Fair Value Measurements at

December 31, 2012 Using:

 

 

 

 

 

 

 

 

 

Significant

 

 

 

 

 

 

 

 

 

Quoted Prices In

 

Other

 

Significant

 

 

 

 

 

 

 

Active Markets for

 

Observable

 

Unobservable

 

 

 

 

 

Carrying

 

Identical Assets

 

Inputs

 

Inputs

 

 

 

(In thousands)

 

Amount

 

(Level 1)

 

(Level 2)

 

(Level 3)

 

Total

 

Financial assets:

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

46,855

 

$

46,855

 

$

 

$

 

$

46,855

 

Interest bearing deposits with banks

 

4,394

 

 

4,394

 

 

4,394