10-Q 1 uwhr-10q_20170331.htm 10-Q uwhr-10q_20170331.htm

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

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

For the quarterly period ended March 31, 2017

OR

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

For the transition period from                      to                     .

COMMISSION FILE NUMBER 000-22062

 

UWHARRIE CAPITAL CORP

(Exact name of registrant as specified in its charter)

 

 

NORTH CAROLINA

 

56-1814206

(State or Other Jurisdiction of

Incorporation or Organization)

 

(I.R.S. Employer

Identification No.)

 

 

 

132 NORTH FIRST STREET

ALBEMARLE, NORTH CAROLINA

 

28001

(Address of Principal Executive Offices)

 

(Zip Code)

Registrant’s Telephone number, including area code: (704) 983-6181

N/A

(Former name, former address and former fiscal year, if changed since last report)

 

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      No

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 (Section 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      No  

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

 

Large accelerated filer

 

 

Accelerated filer

 

 

 

 

 

 

 

 

Non-accelerated filer

 

☐ (Do not check if a smaller reporting company.)

 

Smaller reporting company

 

Emerging growth company

 

☐ 

 

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date: 7,004,547 shares of common stock outstanding as of April 26, 2017.

 

 


 

 

Table of Contents

 

 

 

 

 

Page No.

 

 

 

 

 

Part I.

 

FINANCIAL INFORMATION

 

 

 

 

 

 

 

Item 1 -

 

Financial Statements (Unaudited)

 

 

 

 

 

 

 

 

 

Consolidated Balance Sheets March 31, 2017 and December 31, 2016

 

3

 

 

 

 

 

 

 

Consolidated Statements of Income for the Three Months Ended March 31, 2017 and 2016

 

4

 

 

 

 

 

 

 

Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2017 and 2016

 

5

 

 

 

 

 

 

 

Consolidated Statements of Changes in Shareholders’ Equity for the Three Months Ended March 31, 2017

 

6

 

 

 

 

 

 

 

Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2017 and 2016

 

7

 

 

 

 

 

 

 

Notes to Consolidated Financial Statements

 

8

 

 

 

 

 

Item 2 -

 

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

 

27

7

 

 

 

 

Item 3 -

 

Quantitative and Qualitative Disclosures about Market Risk

 

32

 

 

 

 

 

Item 4 -

 

Controls and Procedures

 

32

 

 

 

 

 

Part II.

 

OTHER INFORMATION

 

 

 

 

 

 

 

Item 1 -

 

Legal Proceedings

 

32

 

 

 

 

 

Item 1A -

 

Risk Factors

 

32

 

 

 

 

 

Item 2 -

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

33

 

 

 

 

 

Item 3 -

 

Defaults Upon Senior Securities

 

33

 

 

 

 

 

Item 4 -

 

Mine Safety Disclosures

 

33

 

 

 

 

 

Item 5 -

 

Other Information

 

33

 

 

 

 

 

Item 6 -

 

Exhibits

 

34

 

 

 

 

 

 

 

Signatures

 

35

 

 

 

Exhibit Index

 

36

 

 

 

 

 

 

 

 

 

 

 

-2-


 

Uwharrie Capital Corp and Subsidiaries

Consolidated Balance Sheets

 

Part I. Financial Information

Item 1

Financial Statements

 

 

 

March 31, 2017 (Unaudited)

 

 

December 31, 2016*

 

 

 

(dollars in thousands)

 

ASSETS

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

7,012

 

 

$

9,422

 

Interest-earning deposits with banks

 

 

57,375

 

 

 

36,546

 

Securities available for sale, at fair value

 

 

103,650

 

 

 

105,899

 

Securities held to maturity, at amortized cost (fair value $11,853 and $11,934, respectively)

 

 

11,814

 

 

 

11,990

 

Loans held for sale

 

 

1,315

 

 

 

5,823

 

Loans:

 

 

 

 

 

 

 

 

Loans held for investment

 

 

344,182

 

 

 

341,829

 

Less allowance for loan losses

 

 

(2,677

)

 

 

(2,707

)

Net loans held for investment

 

 

341,505

 

 

 

339,122

 

Premises and equipment, net

 

 

14,154

 

 

 

14,173

 

Interest receivable

 

 

1,599

 

 

 

1,629

 

Restricted stock

 

 

1,067

 

 

 

1,052

 

Bank owned life insurance

 

 

8,450

 

 

 

6,897

 

Other real estate owned

 

 

3,428

 

 

 

4,176

 

Prepaid assets

 

 

1,120

 

 

 

826

 

Other assets

 

 

10,658

 

 

 

10,675

 

Total assets

 

$

563,147

 

 

$

548,230

 

 

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

Demand noninterest-bearing

 

$

118,679

 

 

$

103,138

 

Interest checking and money market accounts

 

 

270,852

 

 

 

272,968

 

Savings deposits

 

 

44,478

 

 

 

42,452

 

Time deposits, $250,000 and over

 

 

7,478

 

 

 

7,472

 

Other time deposits

 

 

58,225

 

 

 

59,689

 

Total deposits

 

 

499,712

 

 

 

485,719

 

Short-term borrowed funds

 

 

2,631

 

 

 

2,674

 

Long-term debt

 

 

9,534

 

 

 

9,534

 

Interest payable

 

 

148

 

 

 

151

 

Other liabilities

 

 

7,112

 

 

 

6,627

 

Total liabilities

 

 

519,137

 

 

 

504,705

 

 

 

 

 

 

 

 

 

 

Off balance sheet items, commitments and contingencies (Note 9)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Common stock, $1.25 par value: 20,000,000 shares authorized; shares issued and

   outstanding 7,004,547 and 7,050,315

 

 

8,756

 

 

 

8,813

 

Additional paid-in capital

 

 

12,356

 

 

 

12,540

 

Undivided profits

 

 

13,338

 

 

 

12,867

 

Accumulated other comprehensive income (loss)

 

 

(1,069

)

 

 

(1,318

)

Total Uwharrie Capital shareholders’ equity

 

 

33,381

 

 

 

32,902

 

Noncontrolling interest

 

 

10,629

 

 

 

10,623

 

Total shareholders’ equity

 

 

44,010

 

 

 

43,525

 

Total liabilities and shareholders’ equity

 

$

563,147

 

 

$

548,230

 

 

(*)

Derived from audited consolidated financial statements

See accompanying notes  

 

 

-3-


 

Uwharrie Capital Corp and Subsidiaries

Consolidated Statements of Income (Unaudited)

 

 

 

 

Three Months Ended March 31,

 

 

 

2017

 

 

2016

 

 

 

(in thousands, except share and per share data)

 

Interest Income

 

 

 

 

 

 

 

 

Loans, including fees

 

$

3,990

 

 

$

3,898

 

Investment securities

 

 

 

 

 

 

 

 

US Treasury

 

 

11

 

 

 

11

 

US Government agencies and corporations

 

 

375

 

 

 

316

 

State and political subdivisions

 

 

123

 

 

 

123

 

Interest-earning deposits with banks and federal funds sold

 

 

104

 

 

 

88

 

Total interest income

 

 

4,603

 

 

 

4,436

 

 

 

 

 

 

 

 

 

 

Interest Expense

 

 

 

 

 

 

 

 

Interest checking and money market accounts

 

 

84

 

 

 

72

 

Savings deposits

 

 

12

 

 

 

11

 

Time deposits, $250,000 and over

 

 

11

 

 

 

18

 

Other time deposits

 

 

47

 

 

 

113

 

Short-term borrowed funds

 

 

7

 

 

 

21

 

Long-term debt

 

 

135

 

 

 

136

 

Total interest expense

 

 

296

 

 

 

371

 

Net interest income

 

 

4,307

 

 

 

4,065

 

Provision for (recovery of) loan losses

 

 

(59

)

 

 

(58

)

Net interest income after provision (recovery of) for loan losses

 

 

4,366

 

 

 

4,123

 

 

 

 

 

 

 

 

 

 

Noninterest Income

 

 

 

 

 

 

 

 

Service charges on deposit accounts

 

 

289

 

 

 

306

 

Other service fees and commissions

 

 

1,197

 

 

 

1,128

 

Gain/(loss) on sale of securities (includes reclassification of $205,000 from accumulated other

   comprehensive income)

 

 

 

 

 

205

 

Income from mortgage loan sales

 

 

871

 

 

 

700

 

Other income

 

 

286

 

 

 

142

 

Total noninterest income

 

 

2,643

 

 

 

2,481

 

 

 

 

 

 

 

 

 

 

Noninterest Expense

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

3,698

 

 

 

3,563

 

Net occupancy expense

 

 

304

 

 

 

257

 

Equipment expense

 

 

152

 

 

 

169

 

Data processing costs

 

 

182

 

 

 

180

 

Office supplies and printing

 

 

25

 

 

 

42

 

Foreclosed real estate expense

 

 

88

 

 

 

77

 

Professional fees and services

 

 

176

 

 

 

192

 

Marketing and donations

 

 

258

 

 

 

201

 

Electronic banking expense

 

 

325

 

 

 

311

 

Software amortization and maintenance

 

 

181

 

 

 

155

 

FDIC insurance

 

 

45

 

 

 

86

 

Other noninterest expense

 

 

701

 

 

 

688

 

Total noninterest expense

 

 

6,135

 

 

 

5,921

 

Income before income taxes

 

 

874

 

 

 

683

 

Income taxes (includes reclassification of

   $79,000 from accumulated other comprehensive income)

 

 

257

 

 

 

173

 

Net income

 

$

617

 

 

$

510

 

 

 

 

 

 

 

 

 

 

Consolidated net income

 

$

617

 

 

$

510

 

Less: net income attributable to noncontrolling Interest

 

 

(146

)

 

 

(147

)

Net income attributable to Uwharrie Capital Corp

 

 

471

 

 

 

363

 

Dividends – preferred stock

 

 

 

 

 

 

Net income (loss) available to common shareholders

 

$

471

 

 

$

363

 

Net income (loss) per common share

 

 

 

 

 

 

 

 

Basic

 

$

0.07

 

 

$

0.05

 

Diluted

 

$

0.07

 

 

$

0.05

 

Weighted average shares outstanding

 

 

 

 

 

 

 

 

Basic

 

 

7,045,090

 

 

 

7,122,677

 

Diluted

 

 

7,045,730

 

 

 

7,122,677

 

 

 

See accompanying notes  

 

 

-4-


 

Uwharrie Capital Corp and Subsidiaries

Consolidated Statements of Comprehensive Income (Unaudited)

 

 

 

 

Three Months Ended March 31,

 

 

 

2017

 

 

2016

 

 

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

Net Income

 

$

617

 

 

$

510

 

 

 

 

 

 

 

 

 

 

Unrealized gain on available for sale securities

 

 

377

 

 

 

948

 

Related tax effect

 

 

(128

)

 

 

(332

)

Reclassification of loss recognized in net income

 

 

 

 

 

(205

)

Related tax effect

 

 

 

 

 

79

 

 

 

 

 

 

 

 

 

 

Total other comprehensive income

 

 

249

 

 

 

490

 

 

 

 

 

 

 

 

 

 

Comprehensive income

 

 

866

 

 

 

1,000

 

 

 

 

 

 

 

 

 

 

Less: Comprehensive income attributable to noncontrolling

   interest

 

 

(146

)

 

 

(147

)

 

 

 

 

 

 

 

 

 

Comprehensive income attributable to Uwharrie Capital

 

$

720

 

 

$

853

 

 

See accompanying notes

 

 

-5-


 

Uwharrie Capital Corp and Subsidiaries

Consolidated Statement of Changes in Shareholders’ Equity (Unaudited)

 

 

 

 

Number of

Common

Shares

Issued

 

 

Common

Stock

 

 

Additional

Paid-in

Capital

 

 

Undivided

Profits

 

 

Accumulated

Other

Comprehensive

Income (Loss)

 

 

Non

Controlling

Interest

 

 

Total

 

 

 

(dollars in thousands, except share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2016

 

 

7,050,315

 

 

$

8,813

 

 

$

12,540

 

 

$

12,867

 

 

$

(1,318

)

 

$

10,623

 

 

$

43,525

 

Net Income

 

 

 

 

 

 

 

 

 

 

 

471

 

 

 

 

 

 

146

 

 

 

617

 

Repurchase of common stock

 

 

(45,768

)

 

 

(57

)

 

 

(184

)

 

 

 

 

 

 

 

 

 

 

 

(241

)

Other comprehensive Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

249

 

 

 

 

 

 

249

 

Record preferred stock dividend Series B

   (noncontrolling interest)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(103

)

 

 

(103

)

Record preferred stock dividend Series C

   (noncontrolling interest)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(37

)

 

 

(37

)

Balance, March 31, 2017

 

 

7,004,547

 

 

$

8,756

 

 

$

12,356

 

 

$

13,338

 

 

$

(1,069

)

 

$

10,629

 

 

$

44,010

 

 

See accompanying notes

 

 

-6-


 

Uwharrie Capital Corp and Subsidiaries

Consolidated Statements of Cash Flows (Unaudited)

 

 

 

 

Three Months Ended March 31,

 

 

 

2017

 

 

2016

 

 

 

(dollars in thousands)

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

Net income

 

$

617

 

 

$

510

 

Adjustments to reconcile net income to net cash

 

 

 

 

 

 

 

 

Provided (used) by operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

217

 

 

 

222

 

Recovery of loan losses

 

 

(59

)

 

 

(58

)

Gain on sale of securities available for sale

 

 

 

 

 

(205

)

Gain on sale of OREO

 

 

(7

)

 

 

(27

)

Net amortization of premium on investment securities AFS

 

 

230

 

 

 

218

 

Net amortization of premium on investment securities HTM

 

 

38

 

 

 

37

 

Net amortization of mortgage servicing rights

 

 

179

 

 

 

171

 

OREO write downs

 

 

48

 

 

 

34

 

Net change in:

 

 

 

 

 

 

 

 

Originations and purchases of mortgage loans for sale

 

 

(22,007

)

 

 

(15,659

)

Proceeds from sales of mortgage loans for sale

 

 

26,336

 

 

 

16,303

 

Accrued interest receivable

 

 

30

 

 

 

16

 

Prepaid Assets

 

 

(294

)

 

 

(216

)

Cash surrender value of life insurance

 

 

(28

)

 

 

(30

)

Miscellaneous other assets

 

 

(105

)

 

 

(316

)

Accrued interest payable

 

 

(3

)

 

 

4

 

Miscellaneous other liabilities

 

 

485

 

 

 

454

 

Net cash provided by operating activities

 

 

5,677

 

 

 

1,458

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

 

 

Proceeds from sales of investment securities available for sale

 

 

 

 

 

10,246

 

Proceeds from maturities, calls & paydowns of investment securities held to maturity

 

 

138

 

 

 

53

 

Proceeds from maturities, calls & paydowns of investment securities available for sale

 

 

2,396

 

 

 

4,503

 

Purchase of investment securities held to maturity

 

 

 

 

 

(1,027

)

Purchase of investment securities available for sale

 

 

 

 

 

(19,590

)

Purchase of life insurance investment

 

 

(1,525

)

 

 

 

Net change in restricted stock

 

 

(15

)

 

 

(12

)

Net decrease (increase) in loans

 

 

(2,435

)

 

 

(2,312

)

Purchase of premises and equipment

 

 

(198

)

 

 

(140

)

Proceeds from sale of OREO

 

 

818

 

 

 

43

 

Net cash provided by (used by) investing activities

 

 

(821

)

 

 

(8,236

)

 

 

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

 

 

Net increase (decrease) in deposit accounts

 

 

13,993

 

 

 

(13,264

)

Net increase (decrease) in federal funds purchased

 

 

 

 

 

 

 

 

and securities sold under agreements to repurcase and other short-term borrowings

 

 

(41

)

 

 

(2,239

)

Repayment of other borrowings

 

 

(2

)

 

 

(4

)

Common stock repurchase

 

 

(241

)

 

 

(6

)

Dividends paid on preferred stock

 

 

(146

)

 

 

(147

)

Net cash provided by (used by) financing activities

 

 

13,563

 

 

 

(15,660

)

Increase (decrease) in cash and cash equivalents

 

 

18,419

 

 

 

(22,438

)

Cash and cash equivalents, beginning of period

 

 

45,968

 

 

 

68,933

 

Cash and cash equivalents, end of period

 

$

64,387

 

 

$

46,495

 

 

 

 

 

 

 

 

 

 

Supplemental Disclosures of Cash Flow Information

 

 

 

 

 

 

 

 

Interest paid

 

$

299

 

 

$

375

 

Income taxes paid

 

 

 

 

 

 

Supplemental Schedule of Non-Cash Activities

 

 

 

 

 

 

 

 

Net change in fair value securities available for sale, net of tax

 

$

(249

)

 

$

490

 

Loans transferred to foreclosed real estate

 

 

111

 

 

 

 

Mortgage servicing rights capitalized

 

 

179

 

 

 

171

 

 

 

See accompanying notes

 

 

-7-


 

UWHARRIE CAPITAL CORP AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

 

 

Note 1 – Basis of Presentation

The financial statements and accompanying notes are presented on a consolidated basis including Uwharrie Capital Corp (the “Company”) and its subsidiaries, Uwharrie Bank (the “Bank”), Uwharrie Investment Advisors, Inc. (“UIA”), and Uwharrie Mortgage, Inc. The Bank consolidates its subsidiaries, the Strategic Alliance Corporation, BOS Agency, Inc. and Gateway Mortgage, Inc., each of which is wholly-owned by the Bank.

The information contained in the consolidated financial statements is unaudited. In the opinion of management, the consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (“GAAP”) and material adjustments necessary for a fair presentation of results of interim periods, all of which are of a normal recurring nature, have been made. The results of operations for the interim periods are not necessarily indicative of the results that may be expected for an entire year. Management is not aware of economic events, outside influences or changes in concentrations of business that would require additional clarification or disclosure in the consolidated financial statements.

The organization and business of the Company, accounting policies followed by the Company and other information are contained in the notes to consolidated financial statements filed as part of the Company’s 2016 Annual Report on Form 10-K. This Quarterly Report should be read in conjunction with such Annual Report.

Use of Estimates

The preparation of financial statements, in conformity with accounting principles generally accepted in the United States of America (“GAAP”), requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change relate to the determination of the allowance for loan losses.

 

 

Note 2 – Comprehensive Income

The Company reports as comprehensive income all changes in shareholders’ equity during the year from sources other than shareholders. Other comprehensive income refers to all components (revenues, expenses, gains, and losses) of comprehensive income that are excluded from net income. The Company’s only component of other comprehensive income is unrealized gains and losses, net of income tax, on investment securities available for sale.

The following table presents the changes in accumulated other comprehensive income for the three months ended March 31, 2017 and 2016:

 

 

 

Unrealized holding gains on available-for-sale securities (net)

 

 

 

For the Three Months Ended March 31,

 

 

 

2017

 

 

2016

 

 

 

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

Beginning Balance

 

$

(1,318

)

 

$

(212

)

 

 

 

 

 

 

 

 

 

Other Comprehensive income (loss) before reclassifications,

   net of $128,000 and $332,000

   tax effect, respectively

 

 

249

 

 

 

616

 

 

 

 

 

 

 

 

 

 

Amounts reclassified from accumulated other

   comprehensive income, net of $79,000 tax effect

 

 

 

 

 

(126

)

 

 

 

 

 

 

 

 

 

Net current-period other comprehensive income (loss)

 

 

249

 

 

 

490

 

 

 

 

 

 

 

 

 

 

Ending Balance

 

$

(1,069

)

 

$

278

 

 

 

-8-


 

Note 3 – Noncontrolling Interest

In January 2013, the Company’s subsidiary banks issued a total of $7.9 million of Fixed Rate Noncumulative Perpetual Preferred Stock, Series B. The preferred stock qualified as Tier 1 capital at each bank and pays dividends at an annual rate of 5.30%. The preferred stock has no voting rights. This capital is presented as noncontrolling interest in the consolidated balance sheets. Dividends declared on this preferred stock are presented as earnings allocated to the noncontrolling interest in the consolidated statements of income. Effective September 1, 2013, the Fixed Rate Noncumulative Perpetual Preferred Stock, Series B was rolled into one issue under Uwharrie Bank in connection with the consolidation and name change.

During 2013, the Company’s subsidiary bank, Uwharrie Bank, raised $2.8 million of Fixed Rate Noncumulative Perpetual Preferred Stock, Series C. The preferred stock qualifies as Tier 1 capital at the bank and pays dividends at an annual rate of 5.30%. The preferred stock has no voting rights.

 

 

Note 4 – Per Share Data

 

Basic and diluted net income per common share is computed based on the weighted average number of shares outstanding during each period after retroactively adjusting for stock dividends. Diluted net income per common share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the net income of the Company. The Company had stock options outstanding covering 13,116 shares of common stock at both March 31, 2017 and December 31, 2016. All of these options were dilutive because strike price was lower than the market price.

Basic and diluted net income per common share have been computed based upon net income available to common shareholders as presented in the accompanying consolidated statements of income divided by the weighted average number of common shares outstanding or assumed to be outstanding.

The computation of basic and diluted earnings per share is summarized below:

 

 

 

For the Three Months Ended March 31,

 

 

 

2017

 

 

2016

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding

 

 

7,045,090

 

 

 

7,122,677

 

 

 

 

 

 

 

 

 

 

Effect of dilutive stock options

 

 

640

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares and dilutive

   potential common shares used in computing diluted net

   income per common share

 

 

7,045,730

 

 

 

7,122,677

 

 

 

Note 5 – Investment Securities

Carrying amounts and fair values of securities available for sale and held to maturity are summarized below:

 

March 31, 2017

 

Amortized

Cost

 

 

Gross

Unrealized

Gains

 

 

Gross

Unrealized

Losses

 

 

Fair

Value

 

 

 

(dollars in thousands)

 

Securities available for sale

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury

 

$

4,015

 

 

$

 

 

$

3

 

 

$

4,012

 

U.S. Government agencies

 

 

58,014

 

 

 

26

 

 

 

760

 

 

 

57,280

 

GSE - Mortgage-backed securities and CMO’s

 

 

24,880

 

 

 

49

 

 

 

394

 

 

 

24,535

 

State and political subdivisions

 

 

13,309

 

 

 

65

 

 

 

609

 

 

 

12,765

 

Corporate bonds

 

 

5,051

 

 

 

30

 

 

 

23

 

 

 

5,058

 

Total securities available for sale

 

$

105,269

 

 

$

170

 

 

$

1,789

 

 

$

103,650

 

-9-


 

 

March 31, 2017

 

Amortized

Cost

 

 

Gross

Unrealized

Gains

 

 

Gross

Unrealized

Losses

 

 

Fair

Value

 

 

 

(dollars in thousands)

 

Securities held to maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government agencies

 

$

1,609

 

 

$

 

 

$

2

 

 

$

1,607

 

State and political subdivisions

 

 

6,962

 

 

 

31

 

 

 

19

 

 

 

6,974

 

Corporate bonds

 

 

3,243

 

 

 

29

 

 

 

 

 

 

3,272

 

Total securities held to maturity

 

$

11,814

 

 

$

60

 

 

$

21

 

 

$

11,853

 

 

December 31, 2016

 

Amortized

Cost

 

 

Gross

Unrealized

Gains

 

 

Gross

Unrealized

Losses

 

 

Fair

Value

 

 

 

(dollars in thousands)

 

Securities available for sale

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury

 

$

4,017

 

 

$

 

 

$

3

 

 

$

4,014

 

U.S. Government agencies

 

 

58,506

 

 

 

28

 

 

 

863

 

 

 

57,671

 

GSE - Mortgage-backed securities and CMO’s

 

 

26,195

 

 

 

39

 

 

 

586

 

 

 

25,648

 

State and political subdivisions

 

 

14,123