x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Virginia
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54-1680165
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
|
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802 Main Street West Point, VA
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23181
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(Address of principal executive offices)
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(Zip Code)
|
Large accelerated filer
|
¨
|
Accelerated filer
|
¨
|
Non-accelerated filer
|
¨ (Do not check if a smaller reporting company)
|
Smaller reporting company
|
x
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Page
|
||
Part I - Financial Information
|
||
Item 1.
|
Financial Statements
|
|
|
2
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|
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3
|
|
4
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||
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5
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|
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6
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|
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7
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Item 2.
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26
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Item 3.
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42
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Item 4.
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42
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Part II - Other Information
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||
Item 1A.
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43
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Item 2.
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43
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Item 6.
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43
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44
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ITEM 1.
|
FINANCIAL STATEMENTS
|
March 31,
2012
|
December 31,
2011
|
|||||||
(Unaudited)
|
|
|||||||
ASSETS
|
|
|
||||||
Cash and due from banks
|
$ | 6,310 | $ | 5,787 | ||||
Interest-bearing deposits in other banks
|
20,116 | 5,720 | ||||||
Total cash and cash equivalents
|
26,426 | 11,507 | ||||||
Securities-available for sale at fair value, amortized cost of $136,605 and $137,575, respectively
|
143,868 | 144,646 | ||||||
Loans held for sale, net
|
63,756 | 70,062 | ||||||
Loans, net of allowance for loan losses of $34,757 and $33,677, respectively
|
626,069 | 616,984 | ||||||
Federal Home Loan Bank stock, at cost
|
3,767 | 3,767 | ||||||
Corporate premises and equipment, net
|
28,184 | 28,462 | ||||||
Other real estate owned, net of valuation allowance of $3,986 and $3,927, respectively
|
5,209 | 6,059 | ||||||
Accrued interest receivable
|
5,224 | 5,242 | ||||||
Goodwill
|
10,724 | 10,724 | ||||||
Other assets
|
32,244 | 30,671 | ||||||
Total assets
|
$ | 945,471 | $ | 928,124 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
||||||||
Deposits
|
||||||||
Noninterest-bearing demand deposits
|
$ | 105,542 | $ | 95,556 | ||||
Savings and interest-bearing demand deposits
|
244,846 | 242,917 | ||||||
Time deposits
|
310,166 | 307,943 | ||||||
Total deposits
|
660,554 | 646,416 | ||||||
Short-term borrowings
|
4,797 | 7,544 | ||||||
Long-term borrowings
|
132,988 | 132,987 | ||||||
Trust preferred capital notes
|
20,620 | 20,620 | ||||||
Accrued interest payable
|
1,107 | 1,111 | ||||||
Other liabilities
|
25,936 | 23,356 | ||||||
Total liabilities
|
846,002 | 832,034 | ||||||
Commitments and contingencies
|
— | — | ||||||
Shareholders’ equity
|
||||||||
Preferred stock ($1.00 par value, 3,000,000 shares authorized, 10,000 shares issued and outstanding)
|
10 | 10 | ||||||
Common stock ($1.00 par value, 8,000,000 shares authorized, 3,199,314 and 3,178,510 shares issued and outstanding, respectively)
|
3,105 | 3,091 | ||||||
Additional paid-in capital
|
13,866 | 13,438 | ||||||
Retained earnings
|
78,969 | 76,167 | ||||||
Accumulated other comprehensive income, net
|
3,519 | 3,384 | ||||||
Total shareholders’ equity
|
99,469 | 96,090 | ||||||
Total liabilities and shareholders’ equity
|
$ | 945,471 | $ | 928,124 |
Three Months Ended March 31,
|
||||||||
2012
|
2011
|
|||||||
Interest income
|
|
|
||||||
Interest and fees on loans
|
$ | 17,476 | $ | 16,346 | ||||
Interest on money market investments
|
8 | 15 | ||||||
Interest and dividends on securities
|
||||||||
U.S. government agencies and corporations
|
57 | 51 | ||||||
Tax-exempt obligations of states and political subdivisions
|
1,187 | 1,194 | ||||||
Corporate bonds and other
|
28 | 26 | ||||||
Total interest income
|
18,756 | 17,632 | ||||||
Interest expense
|
||||||||
Savings and interest-bearing deposits
|
253 | 332 | ||||||
Certificates of deposit, $100 thousand or more
|
640 | 673 | ||||||
Other time deposits
|
724 | 850 | ||||||
Borrowings
|
973 | 966 | ||||||
Trust preferred capital notes
|
249 | 243 | ||||||
Total interest expense
|
2,839 | 3,064 | ||||||
Net interest income
|
15,917 | 14,568 | ||||||
Provision for loan losses
|
2,725 | 2,820 | ||||||
Net interest income after provision for loan losses
|
13,192 | 11,748 | ||||||
Noninterest income
|
||||||||
Gains on sales of loans
|
4,103 | 3,800 | ||||||
Service charges on deposit accounts
|
801 | 848 | ||||||
Other service charges and fees
|
1,368 | 1,092 | ||||||
Net gains on calls and sales of available for sale securities
|
— | — | ||||||
Other income
|
1,111 | 717 | ||||||
Total noninterest income
|
7,383 | 6,457 | ||||||
Noninterest expenses
|
||||||||
Salaries and employee benefits
|
9,742 | 8,492 | ||||||
Occupancy expenses
|
1,721 | 1,526 | ||||||
Other expenses
|
3,594 | 3,931 | ||||||
Total noninterest expenses
|
15,057 | 13,949 | ||||||
Income before income taxes
|
5,518 | 4,256 | ||||||
Income tax expense
|
1,738 | 1,287 | ||||||
Net income
|
3,780 | 2,969 | ||||||
Effective dividends on preferred stock
|
146 | 289 | ||||||
Net income available to common shareholders
|
$ | 3,634 | $ | 2,680 | ||||
Per common share data
|
||||||||
Net income – basic
|
$ | 1.14 | $ | 0.86 | ||||
Net income – assuming dilution
|
$ | 1.11 | $ | 0.85 | ||||
Cash dividends declared
|
$ | 0.26 | $ | 0.25 | ||||
Weighted average number of shares – basic
|
3,190,518 | 3,123,868 | ||||||
Weighted average number of shares – assuming dilution
|
3,264,975 | 3,167,160 |
Three Months Ended March 31,
|
||||||||
2012
|
2011
|
|||||||
Net income
|
$ | 3,780 | $ | 2,969 | ||||
Other comprehensive income, net
|
||||||||
Changes in defined benefit plan assets and benefit obligations, net
|
7 | 4 | ||||||
Unrealized gain on cash flow hedging instruments, net
|
3 | 54 | ||||||
Unrealized holding gains on securities, net of reclassification adjustment
|
125 | 555 | ||||||
Comprehensive income, net
|
$ | 3,915 | $ | 3,582 |
Preferred
Stock
|
Common
Stock
|
Additional
Paid-In
Capital
|
Retained
Earnings
|
Accumulated
Other
Comprehensive
Income, Net
|
Total
Shareholders’
Equity
|
|||||||||||||||||||
Balance December 31, 2011
|
$ | 10 | $ | 3,091 | $ | 13,438 | $ | 76,167 | $ | 3,384 | $ | 96,090 | ||||||||||||
Comprehensive income:
|
||||||||||||||||||||||||
Net income
|
— | — | — | 3,780 | — | 3,780 | ||||||||||||||||||
Other comprehensive income, net
|
— | — | — | — | 135 | 135 | ||||||||||||||||||
Comprehensive income
|
— | — | — | — | — | 3,915 | ||||||||||||||||||
Stock options exercised
|
— | 12 | 247 | — | — | 259 | ||||||||||||||||||
Share-based compensation
|
— | — | 120 | — | — | 120 | ||||||||||||||||||
Accretion of preferred stock discount
|
— | — | 21 | (21 | ) | — | — | |||||||||||||||||
Common stock issued
|
— | 2 | 40 | — | — | 42 | ||||||||||||||||||
Cash dividends paid – common stock ($0.26 per share)
|
— | — | — | (832 | ) | — | (832 | ) | ||||||||||||||||
Cash dividends paid – preferred stock (5% per annum)
|
— | — | — | (125 | ) | — | (125 | ) | ||||||||||||||||
Balance March 31, 2012
|
$ | 10 | $ | 3,105 | $ | 13,866 | $ | 78,969 | $ | 3,519 | $ | 99,469 | ||||||||||||
Preferred
Stock
|
Common
Stock
|
Additional
Paid-In
Capital
|
Retained
Earnings
|
Accumulated
Other
Comprehensive
Income, Net
|
Total
Shareholders’
Equity
|
|||||||||||||||||||
Balance December 31, 2010
|
$ | 20 | $ | 3,032 | $ | 22,112 | $ | 67,542 | $ | 71 | $ | 92,777 | ||||||||||||
Comprehensive income:
|
||||||||||||||||||||||||
Net income
|
— | — | — | 2,969 | — | 2,969 | ||||||||||||||||||
Other comprehensive income, net
|
— | — | — | — | 613 | 613 | ||||||||||||||||||
Comprehensive income
|
— | — | — | — | — | 3,582 | ||||||||||||||||||
Share-based compensation
|
— | — | 107 | — | — | 107 | ||||||||||||||||||
Accretion of preferred stock discount
|
— | — | 39 | (39 | ) | — | — | |||||||||||||||||
Cash dividends paid – common stock ($0.25 per share)
|
— | — | — | (781 | ) | — | (781 | ) | ||||||||||||||||
Cash dividends paid – preferred stock (5% per annum)
|
— | — | — | (250 | ) | — | (250 | ) | ||||||||||||||||
Balance March 31, 2011
|
$ | 20 | $ | 3,032 | $ | 22,258 | $ | 69,441 | $ | 684 | $ | 95,435 |
Three Months Ended March 31,
|
||||||||
2012
|
2011
|
|||||||
Operating activities:
|
|
|
||||||
Net income
|
$ | 3,780 | $ | 2,969 | ||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Depreciation
|
560 | 515 | ||||||
Provision for loan losses
|
2,725 | 2,820 | ||||||
Provision for indemnifications
|
125 | 231 | ||||||
Provision for other real estate owned losses
|
200 | 161 | ||||||
Share-based compensation
|
120 | 107 | ||||||
Accretion of discounts and amortization of premiums on securities, net
|
191 | 199 | ||||||
Net realized gain on securities
|
— | — | ||||||
Realized loss on sales of other real estate owned
|
13 | 9 | ||||||
Sales of loans held for sale
|
179,602 | 163,066 | ||||||
Origination of loans held for sale
|
(173,296 | ) | (124,077 | ) | ||||
Change in other assets and liabilities:
|
||||||||
Accrued interest receivable
|
18 | (17 | ) | |||||
Other assets
|
(1,645 | ) | (1,111 | ) | ||||
Accrued interest payable
|
(4 | ) | 9 | |||||
Other liabilities
|
2,470 | 94 | ||||||
Net cash provided by operating activities
|
14,859 | 44,975 | ||||||
Investing activities:
|
||||||||
Proceeds from maturities, calls and sales of securities available for sale
|
7,802 | 6,825 | ||||||
Purchases of securities available for sale
|
(7,023 | ) | (11,725 | ) | ||||
Net increase in customer loans
|
(11,912 | ) | (6,953 | ) | ||||
Other real estate owned improvements
|
(205 | ) | — | |||||
Proceeds from sales of other real estate owned
|
944 | 3,516 | ||||||
Purchases of corporate premises and equipment, net
|
(282 | ) | (536 | ) | ||||
Net cash used in investing activities
|
(10,676 | ) | (8,873 | ) | ||||
Financing activities:
|
||||||||
Net increase in demand, interest-bearing demand and savings deposits
|
11,915 | 6,702 | ||||||
Net increase (decrease) in time deposits
|
2,223 | (1,828 | ) | |||||
Net decrease in borrowings
|
(2,746 | ) | (5,296 | ) | ||||
Proceeds from exercise of stock options
|
259 | — | ||||||
Issuance of common stock
|
42 | — | ||||||
Cash dividends
|
(957 | ) | (1,031 | ) | ||||
Net cash provided by (used in) financing activities
|
10,736 | (1,453 | ) | |||||
Net increase in cash and cash equivalents
|
14,919 | 34,649 | ||||||
Cash and cash equivalents at beginning of period
|
11,507 | 9,680 | ||||||
Cash and cash equivalents at end of period
|
$ | 26,426 | $ | 44,329 | ||||
Supplemental disclosure
|
||||||||
Interest paid
|
$ | 2,843 | $ | 3,055 | ||||
Income taxes paid
|
228 | 384 | ||||||
Supplemental disclosure of noncash investing and financing activities
|
||||||||
Unrealized gains on securities available for sale
|
192 | 854 | ||||||
Loans transferred to other real estate owned
|
102 | 2,976 | ||||||
Pension adjustment
|
9 | 5 | ||||||
Unrealized gain on cash flow hedging instrument
|
5 | 89 |
Shares
|
Exercise
Price*
|
Remaining
Contractual
Life
(in years)*
|
Intrinsic
Value of
Unexercised
In-The
Money
Options
(in 000’s)
|
|||||||||||||
Options outstanding at January 1, 2012
|
325,067 | $ | 36.68 | 3.0 |
|
|||||||||||
Exercised
|
11,500 | 22.53 |
|
|||||||||||||
Options outstanding and exercisable at March 31, 2012
|
313,567 | $ | 37.20 | 2.8 | $ | 261 |
*
|
Weighted average
|
Shares
|
Weighted-
Average
Grant Date
Fair Value
|
|||||||
Unvested, January 1, 2012
|
87,125 | $ | 22.59 | |||||
Granted
|
7,750 | $ | 28.45 | |||||
Vested
|
(900 | ) | $ | 22.75 | ||||
Unvested, March 31, 2012
|
93,975 | $ | 23.07 |
March 31, 2012
|
||||||||||||||||
(Dollars in thousands)
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Estimated
Fair Value
|
||||||||||||
U.S. government agencies and corporations
|
$ | 13,906 | $ | 28 | $ | (8 | ) | $ | 13,926 | |||||||
Mortgage-backed securities
|
2,895 | 82 | — | 2,977 | ||||||||||||
Obligations of states and political subdivisions
|
119,777 | 7,197 | (75 | ) | 126,899 | |||||||||||
Preferred stock
|
27 | 39 | — | 66 | ||||||||||||
|
$ | 136,605 | $ | 7,346 | $ | (83 | ) | $ | 143,868 | |||||||
December 31, 2011
|
||||||||||||||||
(Dollars in thousands)
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Estimated
Fair Value
|
||||||||||||
U.S. government agencies and corporations
|
$ | 15,248 | $ | 39 | $ | (4 | ) | $ | 15,283 | |||||||
Mortgage-backed securities
|
2,135 | 81 | — | 2,216 | ||||||||||||
Obligations of states and political subdivisions
|
120,165 | 6,998 | (84 | ) | 127,079 | |||||||||||
Preferred stock
|
27 | 41 | — | 68 | ||||||||||||
|
$ | 137,575 | $ | 7,159 | $ | (88 | ) | $ | 144,646 |
March 31, 2012
|
||||||||
(Dollars in thousands)
|
Amortized
Cost
|
Estimated
Fair Value
|
||||||
Due in one year or less
|
$ | 28,727 | $ | 28,883 | ||||
Due after one year through five years
|
34,406 | 35,738 | ||||||
Due after five years through ten years
|
47,462 | 50,949 | ||||||
Due after ten years
|
25,983 | 28,232 | ||||||
Preferred stock
|
27 | 66 | ||||||
|
$ | 136,605 | $ | 143,868 |
Less Than 12 Months
|
12 Months or More
|
Total
|
||||||||||||||||||||||
(Dollars in thousands)
|
Fair
Value
|
Unrealized
Loss
|
Fair
Value
|
Unrealized
Loss
|
Fair
Value
|
Unrealized
Loss
|
||||||||||||||||||
U.S. government agencies and corporations
|
$ | 3,415 | $ | 8 | $ | — | $ | — | $ | 3,415 | $ | 8 | ||||||||||||
Obligations of states and political subdivisions
|
2,233 | 29 | 969 | 46 | 3,202 | 75 | ||||||||||||||||||
Total temporarily impaired securities
|
$ | 5,648 | $ | 37 | $ | 969 | $ | 46 | $ | 6,617 | $ | 83 |
Less Than 12 Months
|
12 Months or More
|
Total
|
||||||||||||||||||||||
(Dollars in thousands)
|
Fair
Value
|
Unrealized
Loss
|
Fair
Value
|
Unrealized
Loss
|
Fair
Value
|
Unrealized
Loss
|
||||||||||||||||||
U.S. government agencies and corporations
|
$ | 2,064 | $ | 4 | $ | — | $ | — | $ | 2,064 | $ | 4 | ||||||||||||
Obligations of states and political subdivisions
|
3,305 | 35 | 1,328 | 49 | 4,633 | 84 | ||||||||||||||||||
Total temporarily impaired securities
|
$ | 5,369 | $ | 39 | $ | 1,328 | $ | 49 | $ | 6,697 | $ | 88 |
(Dollars in thousands)
|
March 31,
2012
|
December 31,
2011
|
||||||
Real estate – residential mortgage
|
$ | 146,867 | $ | 147,135 | ||||
Real estate – construction
|
4,461 | 5,737 | ||||||
Commercial, financial and agricultural 1
|
218,472 | 212,235 | ||||||
Equity lines
|
33,335 | 33,192 | ||||||
Consumer
|
5,422 | 6,057 | ||||||
Consumer finance
|
252,269 | 246,305 | ||||||
660,826 | 650,661 | |||||||
Less allowance for loan losses
|
(34,757 | ) | (33,677 | ) | ||||
Loans, net
|
$ | 626,069 | $ | 616,984 |
1
|
Includes the Corporation’s commercial real estate lending, land acquisition and development lending, builder line lending and commercial business lending.
|
(Dollars in thousands)
|
March 31,
2012
|
December 31,
2011
|
||||||
Real estate – residential mortgage
|
$ | 2,934 | $ | 2,440 | ||||
Real estate – construction:
|
||||||||
Construction lending
|
— | — | ||||||
Consumer lot lending
|
— | — | ||||||
Commercial, financial and agricultural:
|
||||||||
Commercial real estate lending
|
5,515 | 5,093 | ||||||
Land acquisition and development lending
|
2,821 | — | ||||||
Builder line lending
|
2,024 | 2,303 | ||||||
Commercial business lending
|
746 | 673 | ||||||
Equity lines
|
10 | 123 | ||||||
Consumer
|
— | — | ||||||
Consumer finance
|
375 | 381 | ||||||
Total loans on nonaccrual status
|
$ | 14,425 | $ | 11,013 |
(Dollars in thousands)
|
30-59 Days
Past Due
|
60-89 Days
Past Due
|
90+ Days Past
Due
|
Total Past
Due
|
Current
|
Total Loans
|
90+ Days
Past Due and
Accruing
|
|||||||||||||||||||||
Real estate – residential mortgage
|
$ | 1,124 | $ | 373 | $ | 2,181 | $ | 3,678 | $ | 143,189 | $ | 146,867 | $ | — | ||||||||||||||
Real estate – construction:
|
||||||||||||||||||||||||||||
Construction lending
|
— | — | — | — | 3,084 | 3,084 | — | |||||||||||||||||||||
Consumer lot lending
|
— | — | — | — | 1,377 | 1,377 | — | |||||||||||||||||||||
Commercial, financial and agricultural:
|
||||||||||||||||||||||||||||
Commercial real estate lending
|
711 | 491 | — | 1,202 | 125,957 | 127,159 | — | |||||||||||||||||||||
Land acquisition and development lending
|
2,821 | — | — | 2,821 | 31,226 | 34,047 | — | |||||||||||||||||||||
Builder line lending
|
160 | — | — | 160 | 18,518 | 18,678 | — | |||||||||||||||||||||
Commercial business lending
|
214 | 24 | 166 | 404 | 38,184 | 38,588 | — | |||||||||||||||||||||
Equity lines
|
328 | — | — | 328 | 33,007 | 33,335 | — | |||||||||||||||||||||
Consumer
|
78 | — | — | 78 | 5,344 | 5,422 | 2 | |||||||||||||||||||||
Consumer finance
|
2,950 | 728 | 375 | 4,053 | 248,216 | 252,269 | — | |||||||||||||||||||||
Total
|
$ | 8,386 | $ | 1,616 | $ | 2,722 | $ | 12,724 | $ | 648,102 | $ | 660,826 | $ | 2 |
(Dollars in thousands)
|
30-59 Days
Past Due
|
60-89 Days
Past Due
|
90+ Days Past
Due
|
Total Past
Due
|
Current
|
Total Loans
|
90+ Days
Past Due and
Accruing
|
|||||||||||||||||||||
Real estate – residential mortgage
|
$ | 1,270 | $ | 1,445 | $ | 533 | $ | 3,248 | $ | 143,887 | $ | 147,135 | $ | 65 | ||||||||||||||
Real estate – construction:
|
||||||||||||||||||||||||||||
Construction lending
|
— | — | — | — | 5,084 | 5,084 | — | |||||||||||||||||||||
Consumer lot lending
|
— | — | — | — | 653 | 653 | — | |||||||||||||||||||||
Commercial, financial and agricultural:
|
||||||||||||||||||||||||||||
Commercial real estate lending
|
986 | 1,311 | — | 2,297 | 114,475 | 116,772 | — | |||||||||||||||||||||
Land acquisition and development lending
|
— | — | — | — | 32,645 | 32,645 | — | |||||||||||||||||||||
Builder line lending
|
— | — | — | — | 17,637 | 17,637 | — | |||||||||||||||||||||
Commercial business lending
|
480 | — | — | 480 | 44,701 | 45,181 | — | |||||||||||||||||||||
Equity lines
|
69 | 90 | 33 | 192 | 33,000 | 33,192 | — | |||||||||||||||||||||
Consumer
|
13 | — | — | 13 | 6,044 | 6,057 | 3 | |||||||||||||||||||||
Consumer finance
|
5,327 | 1,041 | 381 | 6,749 | 239,556 | 246,305 | — | |||||||||||||||||||||
Total
|
$ | 8,145 | $ | 3,887 | $ | 947 | $ | 12,979 | $ | 637,682 | $ | 650,661 | $ | 68 |
(Dollars in thousands)
|
Recorded
Investment in
Loans
|
Unpaid
Principal
Balance
|
Related
Allowance
|
Average
Balance Impaired
Loans
|
Interest
Income
Recognized
|
|||||||||||||||
Real estate – residential mortgage
|
$ | 3,351 | $ | 3,572 | $ | 636 | $ | 3,431 | $ | 32 | ||||||||||
Real estate – construction:
|
||||||||||||||||||||
Construction lending
|
— | — | — | — | — | |||||||||||||||
Consumer lot lending
|
— | — | — | — | — | |||||||||||||||
Commercial, financial and agricultural:
|
||||||||||||||||||||
Commercial real estate lending
|
5,792 | 5,916 | 1,588 | 5,815 | 39 | |||||||||||||||
Land acquisition and development lending
|
8,310 | 8,634 | 1,782 | 6,450 | 88 | |||||||||||||||
Builder line lending
|
2,007 | 2,007 | 384 | 2,101 | — | |||||||||||||||
Commercial business lending
|
641 | 644 | 129 | 646 | 3 | |||||||||||||||
Equity lines
|
— | — | — | — | — | |||||||||||||||
Consumer
|
432 | 432 | 65 | 432 | 4 | |||||||||||||||
Total
|
$ | 20,533 | $ | 21,205 | $ | 4,584 | $ | 18,875 | $ | 166 |
(Dollars in thousands)
|
Recorded
Investment in
Loans
|
Unpaid
Principal
Balance
|
Related
Allowance
|
Average
Balance Impaired
Loans
|
Interest
Income
Recognized
|
|||||||||||||||
Real estate – residential mortgage
|
$ | 3,482 | $ | 3,698 | $ | 657 | $ | 3,723 | $ | 137 | ||||||||||
Real estate – construction:
|
||||||||||||||||||||
Construction lending
|
— | — | — | — | — | |||||||||||||||
Consumer lot lending
|
— | — | — | — | — | |||||||||||||||
Commercial, financial and agricultural:
|
||||||||||||||||||||
Commercial real estate lending
|
5,861 | 5,957 | 1,464 | 6,195 | 102 | |||||||||||||||
Land acquisition and development lending
|
5,490 | 5,814 | 1,331 | 6,116 | 372 | |||||||||||||||
Builder line lending
|
2,285 | 2,285 | 318 | 2,397 | — | |||||||||||||||
Commercial business lending
|
652 | 654 | 161 | 663 | 6 | |||||||||||||||
Equity lines
|
— | — | — | — | — | |||||||||||||||
Consumer
|
324 | 324 | 49 | 324 | 14 | |||||||||||||||
Total
|
$ | 18,094 | $ | 18,732 | $ | 3,980 | $ | 19,418 | $ | 631 |
Three Months Ended March 31,
|
||||||||
(Dollars in thousands)
|
2012
|
2011
|
||||||
Real estate – residential mortgage – interest rate concession
|
$ | — | $ | 122 | ||||
Commercial, financial and agricultural:
|
||||||||
Commercial business lending – interest rate concession
|
— | 86 | ||||||
Consumer – interest reduction
|
108 | — | ||||||
Total
|
$ | 108 | $ | 208 |
Three Months Ended March 31,
|
||||||||
(Dollars in thousands)
|
2012
|
2011
|
||||||
Real estate – residential mortgage
|
$ | — | $ | 84 | ||||
Consumer
|
— | 4 | ||||||
Total
|
$ | — | $ | 88 |
(Dollars in thousands)
|
Real Estate
Residential
Mortgage
|
Real Estate
Construction
|
Commercial,
Financial and
Agricultural
|
Equity Lines
|
Consumer
|
Consumer
Finance
|
Total
|
|||||||||||||||||||||
Allowance for loan losses:
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Balance at December 31, 2011
|
$ | 2,379 | $ | 480 | $ | 10,040 | $ | 912 | $ | 319 | $ | 19,547 | $ | 33,677 | ||||||||||||||
Provision charged to operations
|
386 | (13 | ) | 335 | 126 | (9 | ) | 1,900 | 2,725 | |||||||||||||||||||
Loans charged off
|
(122 | ) | — | — | (121 | ) | (90 | ) | (2,200 | ) | (2,533 | ) | ||||||||||||||||
Recoveries of loans previously charged off
|
10 | — | 35 | — | 49 | 794 | 888 | |||||||||||||||||||||
Balance at March 31, 2012
|
$ | 2,653 | $ | 467 | $ | 10,410 | $ | 917 | $ | 269 | $ | 20,041 | $ | 34,757 |
(Dollars in thousands)
|
Real Estate
Residential
Mortgage
|
Real Estate
Construction
|
Commercial,
Financial and
Agricultural
|
Equity Lines
|
Consumer
|
Consumer
Finance
|
Total
|
|||||||||||||||||||||
Allowance for loan losses:
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Balance December 31, 2010
|
$ | 1,442 | $ | 581 | $ | 8,688 | $ | 380 | $ | 307 | $ | 17,442 | $ | 28,840 | ||||||||||||||
Provision charged to operations
|
377 | 139 | 486 | 24 | 44 | 1,750 | 2,820 | |||||||||||||||||||||
Loans charged off
|
(145 | ) | — | (1,581 | ) | (9 | ) | (70 | ) | (1,689 | ) | (3,494 | ) | |||||||||||||||
Recoveries of loans previously charged off
|
11 | — | 17 | — | 22 | 549 | 599 | |||||||||||||||||||||
Balance March 31, 2011
|
$ | 1,685 | $ | 720 | $ | 7,610 | $ | 395 | $ | 303 | $ | 18,052 | $ | 28,765 |
(Dollars in thousands)
|
Real Estate
Residential
Mortgage
|
Real Estate
Construction
|
Commercial,
Financial and
Agricultural
|
Equity Lines
|
Consumer
|
Consumer
Finance
|
Total
|
|||||||||||||||||||||
Allowance for loan losses:
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Balance at March 31, 2012
|
$ | 2,653 | $ | 467 | $ | 10,410 | $ | 917 | $ | 269 | $ | 20,041 | $ | 34,757 | ||||||||||||||
Ending balance: individually evaluated for impairment
|
$ | 636 | $ | — | $ | 3,883 | $ | — | $ | 65 | $ | — | $ | 4,584 | ||||||||||||||
Ending balance: collectively evaluated for impairment
|
$ | 2,017 | $ | 467 | $ | 6,527 | $ | 917 | $ | 204 | $ | 20,041 | $ | 30,173 | ||||||||||||||
Loans:
|
||||||||||||||||||||||||||||
Balance March 31, 2012
|
$ | 146,867 | $ | 4,461 | $ | 218,472 | $ | 33,335 | $ | 5,422 | $ | 252,269 | $ | 660,826 | ||||||||||||||
Ending balance: individually evaluated for impairment
|
$ | 3,351 | $ | — | $ | 16,750 | $ | — | $ | 432 | $ | — | $ | 20,533 | ||||||||||||||
Ending balance: collectively evaluated for impairment
|
$ | 143,516 | $ | 4,461 | $ | 201,722 | $ | 33,335 | $ | 4,990 | $ | 252,269 | $ | 640,293 |
(Dollars in thousands)
|
Real Estate
Residential
Mortgage
|
Real Estate
Construction
|
Commercial,
Financial and
Agricultural
|
Equity Lines
|
Consumer
|
Consumer
Finance
|
Total
|
|||||||||||||||||||||
Allowance for loan losses:
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Balance at December 31, 2011
|
$ | 2,379 | $ | 480 | $ | 10,040 | $ | 912 | $ | 319 | $ | 19,547 | $ | 33,677 | ||||||||||||||
Ending balance: individually evaluated for impairment
|
$ | 657 | $ | — | $ | 3,274 | $ | — | $ | 49 | $ | — | $ | 3,980 | ||||||||||||||
Ending balance: collectively evaluated for impairment
|
$ | 1,722 | $ | 480 | $ | 6,766 | $ | 912 | $ | 270 | $ | 19,547 | $ | 29,697 | ||||||||||||||
Loans:
|
||||||||||||||||||||||||||||
Balance at December 31, 2011
|
$ | 147,135 | $ | 5,737 | $ | 212,235 | $ | 33,192 | $ | 6,057 | $ | 246,305 | $ | 650,661 | ||||||||||||||
Ending balance: individually evaluated for impairment
|
$ | 3,482 | $ | — | $ | 14,288 | $ | — | $ | 324 | $ | — | $ | 18,094 | ||||||||||||||
Ending balance: collectively evaluated for impairment
|
$ | 143,653 | $ | 5,737 | $ | 197,947 | $ | 33,192 | $ | 5,733 | $ | 246,305 | $ | 632,567 |
(Dollars in thousands)
|
Pass
|
Special
Mention
|
Substandard
|
Substandard
Nonaccrual
|
Total1
|
|||||||||||||||
Real estate – residential mortgage
|
$ | 139,794 | $ | 1,419 | $ | 2,721 | $ | 2,933 | $ | 146,867 | ||||||||||
Real estate – construction:
|
||||||||||||||||||||
Construction lending
|
213 | — | 2,871 | — | 3,084 | |||||||||||||||
Consumer lot lending
|
1,377 | — | — | — | 1,377 | |||||||||||||||
Commercial, financial and agricultural:
|
||||||||||||||||||||
Commercial real estate lending
|
107,385 | 5,359 | 8,900 | 5,515 | 127,159 | |||||||||||||||
Land acquisition and development lending
|
15,035 | 9,923 | 6,268 | 2,821 | 34,047 | |||||||||||||||
Builder line lending
|
13,756 | 1,446 | 1,452 | 2,024 | 18,678 | |||||||||||||||
Commercial business lending
|
35,073 | 1,870 | 899 | 746 | 38,588 | |||||||||||||||
Equity lines
|
32,194 | 295 | 836 | 10 | 33,335 | |||||||||||||||
Consumer
|
4,543 | — | 879 | — | 5,422 | |||||||||||||||
|
$ | 349,370 | $ | 20,312 | $ | 24,826 | $ | 14,049 | $ | 408,557 |
(Dollars in thousands)
|
Performing
|
Non-Performing
|
Total
|
|||||||||
Consumer finance
|
$ | 251,894 | $ | 375 | $ | 252,269 |
1
|
At March 31, 2012, the Corporation did not have any loans classified as Doubtful or Loss.
|
(Dollars in thousands)
|
Pass
|
Special
Mention
|
Substandard
|
Substandard
Nonaccrual
|
Total1
|
|||||||||||||||
Real estate – residential mortgage
|
$ | 140,304 | $ | 1,261 | $ | 3,130 | $ | 2,440 | $ | 147,135 | ||||||||||
Real estate – construction:
|
||||||||||||||||||||
Construction lending
|
2,214 | — | 2,870 | — | 5,084 | |||||||||||||||
Consumer lot lending
|
653 | — | — | — | 653 | |||||||||||||||
Commercial, financial and agricultural:
|
||||||||||||||||||||
Commercial real estate lending
|
96,773 | 5,413 | 9,493 | 5,093 | 116,772 | |||||||||||||||
Land acquisition and development lending
|
13,605 | 9,939 | 9,101 | — | 32,645 | |||||||||||||||
Builder line lending
|
12,480 | 1,434 | 1,420 | 2,303 | 17,637 | |||||||||||||||
Commercial business lending
|
41,590 | 2,001 | 917 | 673 | 45,181 | |||||||||||||||
Equity lines
|
31,935 | 298 | 836 | 123 | 33,192 | |||||||||||||||
Consumer
|
5,271 | 10 | 776 | — | 6,057 | |||||||||||||||
|
$ | 344,825 | $ | 20,356 | $ | 28,543 | $ | 10,632 | $ | 404,356 |
(Dollars in thousands)
|
Performing
|
Non-Performing
|
Total
|
|||||||||
Consumer finance
|
$ | 245,924 | $ | 381 | $ | 246,305 |
1
|
At December 31, 2011, the Corporation did not have any loans classified as Doubtful or Loss.
|
(Dollars in thousands)
|
March 31,
|
|||||||
2012
|
2011
|
|||||||
Net unrealized gains on securities
|
$ | 4,721 | $ | 1,055 | ||||
Net unrecognized loss on cash flow hedges
|
(311 | ) | (36 | ) | ||||
Net unrecognized losses on defined benefit pension plan
|
(891 | ) | (335 | ) | ||||
Total cumulative other comprehensive income
|
$ | 3,519 | $ | 684 |
(Dollars in thousands)
|
Unrealized
Loss on Cash
Flow Hedging
Instruments
|
Unrealized
Holding Gains
on Securities
|
Defined
Benefit
Pension Plan
Assets and
Benefit
Obligations
|
Total
|
||||||||||||
Balance December 31, 2011
|
$ | (314 | ) | $ | 4,596 | $ | (898 | ) | $ | 3,384 | ||||||
Net change for the first quarter of 2012
|
3 | 125 | 7 | 135 | ||||||||||||
Balance at March 31, 2012
|
$ | (311 | ) | $ | 4,721 | $ | (891 | ) | $ | 3,519 |
(Dollars in thousands)
|
Unrealized
Loss on Cash
Flow Hedging
Instruments
|
Unrealized
Holding Gains
on Securities
|
Defined
Benefit
Pension Plan
Assets and
Benefit
Obligations
|
Total
|
||||||||||||
Balance December 31, 2010
|
$ | (90 | ) | $ | 500 | $ | (339 | ) | $ | 71 | ||||||
Net change for the first quarter of 2011
|
54 | 555 | 4 | 613 | ||||||||||||
Balance at March 31, 2011
|
$ | (36 | ) | $ | 1,055 | $ | (335 | ) | $ | 684 |
(Dollars in thousands)
|
Three Months Ended March 31, 2012
|
|||||||||||
Pre-Tax
|
Tax Expense
(Benefit)
|
Net-of-Tax
|
||||||||||
Defined benefit pension plan:
|
|
|
|
|||||||||
Net loss
|
$ | 26 | $ | 8 | $ | 18 | ||||||
Amortization of prior service costs
|
(17 | ) | (6 | ) | (11 | ) | ||||||
Defined benefit pension plan assets and benefit obligations, net
|
9 | 2 | 7 | |||||||||
Unrealized gain on cash flow hedging instruments
|
5 | 2 | 3 | |||||||||
Unrealized holding gains on securities
|
193 | 68 | 125 | |||||||||
Total increase in other comprehensive income
|
$ | 207 | $ | 72 | $ | 135 |
(Dollars in thousands)
|
Three Months Ended March 31, 2011
|
|||||||||||
Pre-Tax
|
Tax Expense
(Benefit)
|
Net-of-Tax
|
||||||||||
Defined benefit pension plan:
|
|
|
|
|||||||||
Net loss
|
$ | 16 | $ | 5 | $ | 11 | ||||||
Amortization of prior service costs
|
(9 | ) | (3 | ) | (6 | ) | ||||||
Amortization of net obligation at transition
|
(1 | ) | -- | (1 | ) | |||||||
Defined benefit pension plan assets and benefit obligations, net
|
6 | 2 | 4 | |||||||||
Unrealized gain on cash flow hedging instruments
|
83 | 29 | 54 | |||||||||
Unrealized holding gains on securities
|
854 | 299 | 555 | |||||||||
Total increase in other comprehensive income
|
$ | 943 | $ | 330 | $ | 613 |
(Dollars in thousands)
|
Three Months Ended March 31,
|
|||||||
2012
|
2011
|
|||||||
Net income
|
$ | 3,780 | $ | 2,969 | ||||
Accumulated dividends on Series A Preferred Stock
|
(125 | ) | (250 | ) | ||||
Accretion of Series A Preferred Stock discount
|
(21 | ) | (39 | ) | ||||
Net income available to common shareholders
|
$ | 3,634 | $ | 2,680 | ||||
Weighted average number of common shares used in earnings per common share—basic
|
3,190,518 | 3,123,868 | ||||||
Effect of dilutive securities:
|
||||||||
Stock option awards and Warrant
|
74,457 | 43,292 | ||||||
Weighted average number of common shares used in earnings per common share—assuming dilution
|
3,264,975 | 3,167,160 |
(Dollars in thousands)
|
Three Months Ended
March 31,
|
|||||||
2012
|
2011
|
|||||||
Service cost
|
$ | 159 | $ | 153 | ||||
Interest cost
|
99 | 109 | ||||||
Expected return on plan assets
|
(158 | ) | (145 | ) | ||||
Amortization of net obligation at transition
|
-- | (1 | ) | |||||
Amortization of prior service cost
|
(17 | ) | (17 | ) | ||||
Amortization of net loss
|
26 | 16 | ||||||
Net periodic benefit cost
|
$ | 109 | $ | 115 |
|
●
|
Level 1—Valuation is based upon quoted prices for identical instruments traded in active markets. Level 1 assets and liabilities include debt and equity securities traded in an active exchange market, as well as U.S. Treasury securities.
|
|
●
|
Level 2—Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Valuations of other real estate owned are based upon appraisals by independent, licensed appraisers, general market conditions and recent sales of like properties.
|
|
●
|
Level 3—Valuation is determined using model-based techniques with significant assumptions not observable in the market.
|
March 31, 2012
|
||||||||||||||||
Fair Value Measurements Using
|
Assets at Fair
Value
|
|||||||||||||||
(Dollars in thousands)
|
Level 1
|
Level 2
|
Level 3
|
|||||||||||||
Assets:
|
|
|
|
|
||||||||||||
Securities available for sale
|
|
|
|
|
||||||||||||
U.S. government agencies and corporations
|
$ | — | $ | 13,926 | $ | — | $ | 13,926 | ||||||||
Mortgage-backed securities
|
— | 2,977 | — | 2,977 | ||||||||||||
Obligations of states and political subdivisions
|
— | 126,899 | — | 126,899 | ||||||||||||
Preferred stock
|
— | 66 | — | 66 | ||||||||||||
Total securities available for sale
|
$ | — | $ | 143,868 | $ | — | $ | 143,868 | ||||||||
Liabilities:
|
||||||||||||||||
Derivative payable
|
$ | — | $ | 509 | $ | — | $ | 509 |
December 31, 2011
|
||||||||||||||||
(Dollars in thousands)
|
Fair Value Measurements Using
|
Assets at Fair
Value
|
||||||||||||||
Level 1
|
Level 2
|
Level 3
|
||||||||||||||
Assets:
|
|
|
|
|
||||||||||||
Securities available for sale
|
|
|
|
|
||||||||||||
U.S. government agencies and corporations
|
$ | — | $ | 15,283 | $ | — | $ | 15,283 | ||||||||
Mortgage-backed securities
|
— | 2,216 | — | 2,216 | ||||||||||||
Obligations of states and political subdivisions
|
— | 127,079 | — | 127,079 | ||||||||||||
Preferred stock
|
— | 68 | — | 68 | ||||||||||||
Total securities available for sale
|
$ | — | $ | 144,646 | $ | — | $ | 144,646 | ||||||||
Liabilities:
|
||||||||||||||||
Derivative payable
|
$ | — | $ | 515 | $ | — | $ | 515 |
March 31, 2012
|
||||||||||||||||
Fair Value Measurements Using
|
Assets at Fair
Value
|
|||||||||||||||
(Dollars in thousands)
|
Level 1
|
Level 2
|
Level 3
|
|||||||||||||
Impaired loans, net
|
$ | — | $ | 15,949 | $ | — | $ | 15,949 | ||||||||
OREO, net
|
— | 5,209 | — | 5,209 | ||||||||||||
December 31, 2011
|
||||||||||||||||
Fair Value Measurements Using
|
Assets at Fair
Value
|
|||||||||||||||
(Dollars in thousands)
|
Level 1
|
Level 2
|
Level 3
|
|||||||||||||
Impaired loans, net
|
$ | — | $ | 14,114 | $ | — | $ | 14,114 | ||||||||
OREO, net
|
— | 6,059 | — | 6,059 |
Fair Value Measurements at March 31, 2012 Using
|
||||||||||||||||||||
Quoted
Prices in
Active
Markets
for
Identical
Assets
|
Significant
Other
Observable
Inputs
|
Significant
Unobservable
Inputs
|
||||||||||||||||||
(Dollars in thousands)
|
Carrying Value
|
Level 1
|
Level 2
|
Level 3
|
Balance
|
|||||||||||||||
Financial assets:
|
||||||||||||||||||||
Cash and short-term investments
|
$ | 26,426 | $ | 26,426 | $ | -- | $ | — | $ | 26,426 | ||||||||||
Securities
|
143,868 | — | 143,868 | — | 143,868 | |||||||||||||||
Loans, net
|
626,069 | — | 632,778 | — | 632,778 | |||||||||||||||
Loans held for sale, net
|
63,756 | — | 65,314 | — | 65,314 | |||||||||||||||
Accrued interest receivable
|
5,224 | — | 5,224 | — | 5,224 | |||||||||||||||
Financial liabilities:
|
||||||||||||||||||||
Demand deposits
|
$ | 350,388 | $ | — | $ | 350,388 | $ | — | $ | 350,388 | ||||||||||
Time deposits
|
310,166 | — | 314,134 | — | 314,134 | |||||||||||||||
Borrowings
|
158,405 | — | 154,601 | — | 154,601 | |||||||||||||||
Derivative payable
|
509 | — | 509 | — | 509 | |||||||||||||||
Accrued interest payable
|
1,107 | — | 1,107 | — | 1,107 |
2011
|
||||||||
Carrying
|
Estimated
|
|||||||
(Dollars in thousands)
|
Amount
|
Fair Value
|
||||||
Financial assets:
|
|
|
||||||
Cash and short-term investments
|
$ | 11,507 | $ | 11,507 | ||||
Securities
|
144,646 | 144,646 | ||||||
Loans, net
|
616,984 | 624,219 | ||||||
Loans held for sale, net
|
70,062 | 72,859 | ||||||
Accrued interest receivable
|
5,242 | 5,242 | ||||||
Financial liabilities:
|
||||||||
Demand deposits
|
338,473 | 338,473 | ||||||
Time deposits
|
307,943 | 312,095 | ||||||
Borrowings
|
161,151 | 157,863 | ||||||
Derivative payable
|
515 | 515 | ||||||
Accrued interest payable
|
1,111 | 1,111 |
Three Months Ended March 31, 2012
|
||||||||||||||||||||||||
(Dollars in thousands)
|
Retail
Banking
|
Mortgage
Banking
|
Consumer
Finance
|
Other
|
Eliminations
|
Consolidated
|
||||||||||||||||||
Revenues:
|
|
|
|
|
|
|
||||||||||||||||||
Interest income
|
$ | 8,066 | $ | 574 | $ | 11,340 | $ | — | $ | (1,224 | ) | $ | 18,756 | |||||||||||
Gains on sales of loans
|
— | 4,103 | — | — | — | 4,103 | ||||||||||||||||||
Other noninterest income
|
1,566 | 1,115 | 260 | 337 | 2 | 3,280 | ||||||||||||||||||
Total operating income
|
9,632 | 5,792 | 11,600 | 337 | (1,222 | ) | 26,139 | |||||||||||||||||
Expenses:
|
||||||||||||||||||||||||
Interest expense
|
2,158 | 106 | 1,550 | 249 | (1,224 | ) | 2,839 | |||||||||||||||||
Provision for loan losses
|
750 | 75 | 1,900 | — | — | 2,725 | ||||||||||||||||||
Salaries and employee benefits
|
4,006 | 3,582 | 1,876 | 278 | — | 9,742 | ||||||||||||||||||
Other noninterest expenses
|
2,909 | 1,332 | 923 | 151 | — | 5,315 | ||||||||||||||||||
Total operating expenses
|
9,823 | 5,095 | 6,249 | 678 | (1,224 | ) | 20,621 | |||||||||||||||||
Income (loss) before income taxes
|
(191 | ) | 697 | 5,351 | (341 | ) | 2 | 5,518 | ||||||||||||||||
Provision for (benefit from) income taxes
|
(498 | ) | 279 | 2,087 | (130 | ) | — | 1,738 | ||||||||||||||||
Net income (loss)
|
$ | 307 | $ | 418 | $ | 3,264 | $ | (211 | ) | $ | 2 | $ | 3,780 | |||||||||||
Total assets
|
$ | 786,829 | $ | 75,864 | $ | 254,913 | $ | 3,077 | $ | (175,212 | ) | $ | 945,471 | |||||||||||
Capital expenditures
|
$ | 173 | $ | 51 | $ | 58 | $ | — | $ | — | $ | 282 | ||||||||||||
(Dollars in thousands)
|
Three Months Ended March 31, 2011
|
|||||||||||||||||||||||
Retail
Banking
|
Mortgage
Banking
|
Consumer
Finance
|
Other
|
Eliminations
|
Consolidated
|
|||||||||||||||||||
Revenues:
|
||||||||||||||||||||||||
Interest income
|
$ | 8,030 | $ | 401 | $ | 10,209 | $ | — | $ | (1,008 | ) | $ | 17,632 | |||||||||||
Gains on sales of loans
|
— | 3,800 | — | — | — | 3,800 | ||||||||||||||||||
Other noninterest income
|
1,474 | 739 | 182 | 262 | — | 2,657 | ||||||||||||||||||
Total operating income
|
9,504 | 4,940 | 10,391 | 262 | (1,008 | ) | 24,089 | |||||||||||||||||
Expenses:
|
||||||||||||||||||||||||
Interest expense
|
2,387 | 62 | 1,373 | 252 | (1,010 | ) | 3,064 | |||||||||||||||||
Provision for loan losses
|
1,050 | 20 | 1,750 | — | — | 2,820 | ||||||||||||||||||
Salaries and employee benefits
|
3,900 | 2,745 | 1,655 | 192 | — | 8,492 | ||||||||||||||||||
Other noninterest expenses
|
2,996 | 1,551 | 761 | 149 | — | 5,457 | ||||||||||||||||||
Total operating expenses
|
10,333 | 4,378 | 5,539 | 593 | (1,010 | ) | 19,833 | |||||||||||||||||
Income (loss) before income taxes
|
(829 | ) | 562 | 4,852 | (331 | ) | 2 | 4,256 | ||||||||||||||||
Provision for (benefit from) income taxes
|
(705 | ) | 225 | 1,892 | (126 | ) | 1 | 1,287 | ||||||||||||||||
Net income (loss)
|
$ | (124 | ) | $ | 337 | $ | 2,960 | $ | (205 | ) | $ | 1 | $ | 2,969 | ||||||||||
Total assets
|
$ | 756,904 | $ | 39,404 | $ | 232,359 | $ | 2,761 | $ | (124,427 | ) | $ | 907,001 | |||||||||||
Capital expenditures
|
$ | 249 | $ | 77 | $ | 208 | $ | 2 | $ | — | $ | 536 |
Three Months Ended
March 31,
|
||||||||
(Dollars in thousands)
|
2012
|
2011
|
||||||
Allowance, beginning of period
|
$ | 1,702 | $ | 1,291 | ||||
Provision for indemnification losses
|
125 | 231 | ||||||
Payments
|
— | — | ||||||
Allowance, end of period
|
$ | 1,827 | $ | 1,522 |
Three Months Ended
March 31,
|
||||||||
(Dollars in thousands)
|
2012
|
2011
|
||||||
Professional fees
|
$ | 456 | $ | 553 | ||||
Data processing fees
|
496 | 551 | ||||||
Loan and OREO expenses
|
349 | 470 | ||||||
Telecommunication expenses
|
284 | 263 | ||||||
FDIC expenses
|
159 | 248 | ||||||
All other noninterest expenses
|
1,850 | 1,615 | ||||||
Total other noninterest expenses
|
$ | 3,594 | $ | 3,931 |
|
●
|
interest rates
|
|
●
|
general business conditions, as well as conditions within the financial markets
|
|
●
|
general economic conditions, including unemployment levels
|
|
●
|
the legislative/regulatory climate, including the Dodd-Frank Act and regulations promulgated thereunder and the Consumer Financial Protection Bureau (CFPB) and the regulatory and enforcement activities of the CFPB
|
|
●
|
monetary and fiscal policies of the U.S. Government, including policies of the Treasury and the Federal Reserve Board
|
|
●
|
the value of securities held in the Corporation’s investment portfolios
|
|
●
|
the quality or composition of the loan portfolios and the value of the collateral securing those loans
|
|
●
|
the inventory level and pricing of used automobiles
|
|
●
|
the level of net charge-offs on loans and the adequacy of our allowance for loan losses
|
|
●
|
the level of indemnification losses related to mortgage loans sold
|
|
●
|
demand for loan products
|
|
●
|
deposit flows
|
|
●
|
the strength of the Corporation’s counterparties
|
|
●
|
competition from both banks and non-banks
|
|
●
|
demand for financial services in the Corporation’s market area
|
|
●
|
technology
|
|
●
|
reliance on third parties for key services
|
|
●
|
the commercial and residential real estate markets
|
|
●
|
demand in the secondary residential mortgage loan markets
|
|
●
|
the Corporation’s expansion and technology initiatives
|
|
●
|
accounting principles, policies and guidelines
|
Three Months Ended March 31,
|
||||||||||||||||||||||||
2012
|
2011
|
|||||||||||||||||||||||
(Dollars in thousands)
|
Average
Balance
|
Income/
Expense
|
Yield/
Rate
|
Average
Balance
|
Income/
Expense
|
Yield/
Rate
|
||||||||||||||||||
Assets
|
|
|
|
|
|
|
||||||||||||||||||
Securities:
|
|
|
|
|
|
|
||||||||||||||||||
Taxable
|
$ | 21,365 | $ | 86 | 1.61 | % | $ | 20,727 | $ | 77 | 1.49 | % | ||||||||||||
Tax-exempt
|
118,595 | 1,798 | 6.06 | 115,159 | 1,809 | 6.28 | ||||||||||||||||||
Total securities
|
139,960 | 1,884 | 5.38 | 135,886 | 1,886 | 5.55 | ||||||||||||||||||
Loans, net
|
711,451 | 17,490 | 9.86 | 669,122 | 16,361 | 9.78 | ||||||||||||||||||
Interest-bearing deposits in other banks and Fed funds sold
|
15,383 | 8 | 0.21 | 29,116 | 15 | 0.21 | ||||||||||||||||||
Total earning assets
|
866,794 | 19,382 | 8.94 | 834,124 | 18,262 | 8.76 | ||||||||||||||||||
Allowance for loan losses
|
(34,116 | ) | (29,215 | ) | ||||||||||||||||||||
Total non-earning assets
|
93,045 | 94,986 | ||||||||||||||||||||||
Total assets
|
$ | 925,723 | $ | 899,895 | ||||||||||||||||||||
Liabilities and Shareholders’ Equity
|
||||||||||||||||||||||||
Time and savings deposits:
|
||||||||||||||||||||||||
Interest-bearing deposits
|
$ | 112,868 | $ | 142 | 0.50 | % | $ | 115,721 | $ | 192 | 0.66 | % | ||||||||||||
Money market deposit accounts
|
86,512 | 100 | 0.46 | 71,288 | 130 | 0.73 | ||||||||||||||||||
Savings accounts
|
44,057 | 10 | 0.09 | 41,808 | 10 | 0.10 | ||||||||||||||||||
Certificates of deposit, $100 or more
|
139,219 | 641 | 1.85 | 133,635 | 673 | 2.01 | ||||||||||||||||||
Other certificates of deposit
|
168,516 | 724 | 1.72 | 175,979 | 850 | 1.93 | ||||||||||||||||||
Total time and savings deposits
|
551,172 | 1,617 | 1.17 | 538,431 | 1,855 | 1.38 | ||||||||||||||||||
Borrowings
|
159,017 | 1,222 | 3.07 | 160,088 | 1,209 | 3.02 | ||||||||||||||||||
Total interest-bearing liabilities
|
710,189 | 2,839 | 1.60 | 698,519 | 3,064 | 1.75 | ||||||||||||||||||
Demand deposits
|
94,394 | 87,235 | ||||||||||||||||||||||
Other liabilities
|
22,627 | 20,285 | ||||||||||||||||||||||
Total liabilities
|
827,210 | 806,039 | ||||||||||||||||||||||
Shareholders’ equity
|
98,513 | 93,856 | ||||||||||||||||||||||
Total liabilities and shareholders’ equity
|
$ | 925,723 | $ | 899,895 | ||||||||||||||||||||
Net interest income
|
$ | 16,543 | $ | 15,198 | ||||||||||||||||||||
Interest rate spread
|
7.34 | % | 7.01 | % | ||||||||||||||||||||
Interest expense to average earning assets (annualized)
|
1.31 | % | 1.47 | % | ||||||||||||||||||||
Net interest margin (annualized)
|
7.63 | % | 7.29 | % |
March 31,
2012 from 2011
|
||||||||||||
Increase (Decrease)
Due to
|
Total
Increase
(Decrease)
|
|||||||||||
(Dollars in thousands)
|
Rate
|
Volume
|
||||||||||
Interest income:
|
|
|
|
|||||||||
Loans
|
$ | 129 | $ | 1,000 | $ | 1,129 | ||||||
Securities:
|
||||||||||||
Taxable
|
7 | 2 | 9 | |||||||||
Tax-exempt
|
(237 | ) | 226 | (11 | ) | |||||||
Interest-bearing deposits in other banks and Fed funds sold
|
— | (7 | ) | (7 | ) | |||||||
Total interest income
|
(101 | ) | 1,221 | 1,120 | ||||||||
Interest expense:
|
||||||||||||
Time and savings deposits:
|
||||||||||||
Interest-bearing deposits
|
(45 | ) | (5 | ) | (50 | ) | ||||||
Money market deposit accounts
|
(159 | ) | 129 | (30 | ) | |||||||
Savings accounts
|
(3 | ) | 3 | — | ||||||||
Certificates of deposit, $100 thousand or more
|
(169 | ) | 137 | (32 | ) | |||||||
Other certificates of deposit
|
(90 | ) | (36 | ) | (126 | ) | ||||||
Total time and savings deposits
|
(466 | ) | 228 | (238 | ) | |||||||
Borrowings
|
57 | (44 | ) | 13 | ||||||||
Total interest expense
|
(409 | ) | 184 | (225 | ) | |||||||
Change in net interest income
|
$ | 308 | $ | 1,037 | $ | 1,345 |
(Dollars in thousands)
|
Three Months Ended March 31, 2012
|
|||||||||||||||||||
Retail
Banking
|
Mortgage
Banking
|
Consumer
Finance
|
Other and
Eliminations
|
Total
|
||||||||||||||||
Gains on sales of loans
|
$ | — | $ | 4,103 | $ | — | $ | — | $ | 4,103 | ||||||||||
Service charges on deposit accounts
|
801 | — | — | — | 801 | |||||||||||||||
Other service charges and fees
|
569 | 760 | 4 | 35 | 1,368 | |||||||||||||||
Gains on calls of available for sale securities
|
— | — | — | — | — | |||||||||||||||
Other income
|
196 | 355 | 256 | 304 | 1,111 | |||||||||||||||
Total noninterest income
|
$ | 1,566 | $ | 5,218 | $ | 260 | $ | 339 | $ | 7,383 | ||||||||||
(Dollars in thousands)
|
Three Months Ended March 31, 2011
|
|||||||||||||||||||
Retail
Banking
|
Mortgage
Banking
|
Consumer
Finance
|
Other and
Eliminations
|
Total
|
||||||||||||||||
Gains on sales of loans
|
$ | — | $ | 3,800 | $ | — | $ | — | $ | 3,800 | ||||||||||
Service charges on deposit accounts
|
848 | — | — | — | 848 | |||||||||||||||
Other service charges and fees
|
519 | 529 | 2 | 42 | 1,092 | |||||||||||||||
Gains on calls of available for sale securities
|
— | — | — | — | — | |||||||||||||||
Other income
|
107 | 210 | 180 | 220 | 717 | |||||||||||||||
Total noninterest income
|
$ | 1,474 | $ | 4,539 | $ | 182 | $ | 262 | $ | 6,457 |
(Dollars in thousands)
|
Three Months Ended March 31, 2012
|
|||||||||||||||||||
Retail
Banking
|
Mortgage
Banking
|
Consumer
Finance
|
Other and
Eliminations
|
Total
|
||||||||||||||||
Salaries and employee benefits
|
$ | 4,006 | $ | 3,582 | $ | 1,876 | $ | 278 | $ | 9,742 | ||||||||||
Occupancy expenses
|
1,032 | 476 | 205 | 8 | 1,721 | |||||||||||||||
Other expenses:
|
||||||||||||||||||||
OREO expenses
|
142 | — | — | — | 142 | |||||||||||||||
Provision for indemnification losses
|
— | 125 | — | — | 125 | |||||||||||||||
Other expenses
|
1,735 | 731 | 718 | 143 | 3,327 | |||||||||||||||
Total other expenses
|
1,877 | 856 | 718 | 143 | 3,594 | |||||||||||||||
Total noninterest expenses
|
$ | 6,915 | $ | 4,914 | $ | 2,799 | $ | 429 | $ | 15,057 | ||||||||||
(Dollars in thousands)
|
Three Months Ended March 31, 2011
|
|||||||||||||||||||
Retail
Banking
|
Mortgage
Banking
|
Consumer
Finance
|
Other and
Eliminations
|
Total
|
||||||||||||||||
Salaries and employee benefits
|
$ | 3,900 | $ | 2,745 | $ | 1,655 | $ | 192 | $ | 8,492 | ||||||||||
Occupancy expenses
|
929 | 486 | 105 | 6 | 1,526 | |||||||||||||||
Other expenses:
|
||||||||||||||||||||
OREO expenses
|
357 | — | — | — | 357 | |||||||||||||||
Provision for indemnification losses
|
— | 231 | — | — | 231 | |||||||||||||||
Other expenses
|
1,710 | 834 | 656 | 143 | 3,343 | |||||||||||||||
Total other expenses
|
2,067 | 1,065 | 656 | 143 | 3,931 | |||||||||||||||
Total noninterest expenses
|
$ | 6,896 | $ | 4,296 | $ | 2,416 | $ | 341 | $ | 13,949 |
Three Months Ended March 31,
|
||||||||
(Dollars in thousands)
|
2012
|
2011
|
||||||
Allowance, beginning of period
|
$ | 33,677 | $ | 28,840 | ||||
Provision for loan losses:
|
||||||||
Retail Banking segment
|
750 | 1,050 | ||||||
Mortgage Banking segment
|
75 | 20 | ||||||
Consumer Finance segment
|
1,900 | 1,750 | ||||||
Total provision for loan losses
|
2,725 | 2,820 | ||||||
Loans charged off:
|
||||||||
Real estate—residential mortgage
|
122 | 145 | ||||||
Real estate—construction
|
— | — | ||||||
Commercial, financial and agricultural 1
|
— | 1,581 | ||||||
Equity lines
|
121 | 9 | ||||||
Consumer
|
90 | 70 | ||||||
Consumer finance
|
2,200 | 1,689 | ||||||
Total loans charged off
|
2,533 | 3,494 | ||||||
Recoveries of loans previously charged off:
|
||||||||
Real estate—residential mortgage
|
10 | 11 | ||||||
Real estate—construction
|
— | — | ||||||
Commercial, financial and agricultural 1
|
35 | 17 | ||||||
Equity lines
|
— | — | ||||||
Consumer
|
49 | 22 | ||||||
Consumer finance
|
794 | 549 | ||||||
Total recoveries
|
888 | 599 | ||||||
Net loans charged off
|
1,645 | 2,895 | ||||||
Allowance, end of period
|
$ | 34,757 | $ | 28,765 | ||||
Ratio of annualized net charge-offs to average total loans outstanding during period for Retail Banking and Mortgage Banking
|
0.24 | % | 1.71 | % | ||||
Ratio of annualized net charge-offs to average total loans outstanding during period for Consumer Finance
|
2.26 | % | 2.03 | % |
(Dollars in thousands)
|
March 31,
2012
|
December 31,
2011
|
||||||
Allocation of allowance for loan losses:
|
|
|
||||||
Real estate—residential mortgage
|
$ | 2,653 | $ | 2,379 | ||||
Real estate—construction
|
467 | 480 | ||||||
Commercial, financial and agricultural 1
|
10,410 | 10,040 | ||||||
Equity lines
|
917 | 912 | ||||||
Consumer
|
269 | 319 | ||||||
Consumer finance
|
20,041 | 19,547 | ||||||
Balance
|
$ | 34,757 | $ | 33,677 |
1
|
Includes the Corporation’s commercial real estate lending, land acquisition and development lending, builder line lending and commercial business lending.
|
|
●
|
Pass rated loans are to persons or business entities with an acceptable financial condition, appropriate collateral margins, appropriate cash flow to service the existing loan, and an appropriate leverage ratio. The borrower has paid all obligations as agreed and it is expected that this type of payment history will continue. When necessary, acceptable personal guarantors support the loan.
|
|
●
|
Special mention loans have a specifically identified weakness in the borrower’s operations and in the borrower’s ability to generate positive cash flow on a sustained basis. The borrower’s recent payment history is characterized by late payments. The Corporation’s risk exposure is mitigated by collateral supporting the loan. The collateral is considered to be well-margined, well maintained, accessible and readily marketable.
|
|
●
|
Substandard loans are considered to have specific and well-defined weaknesses that jeopardize the viability of the Corporation’s credit extension. The payment history for the loan has been inconsistent and the expected or projected primary repayment source may be inadequate to service the loan. The estimated net liquidation value of the collateral pledged and/or ability of the personal guarantor(s) to pay the loan may not adequately protect the Corporation. There is a distinct possibility that the Corporation will sustain some loss if the deficiencies associated with the loan are not corrected in the near term. A substandard loan would not automatically meet our definition of impaired unless the loan is significantly past due and the borrower’s performance and financial condition provide evidence that it is probable that the Corporation will be unable to collect all amounts due.
|
|
●
|
Substandard nonaccrual loans have the same characteristics as substandard loans; however, they have a nonaccrual classification because it is probable that the Corporation will not be able to collect all amounts due.
|
|
●
|
Doubtful loans have all the weaknesses inherent in a loan that is classified substandard but with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. The possibility of loss is extremely high.
|
|
●
|
Loss loans are not considered collectible under normal circumstances and there is no realistic expectation for any future payment on the loan. Loss rated loans are fully charged off.
|
(Dollars in thousands)
|
Pass
|
Special
Mention
|
Substandard
|
Substandard
Nonaccrual
|
Total1
|
|||||||||||||||
Real estate—residential mortgage
|
$ | 139,794 | $ | 1,419 | $ | 2,721 | $ | 2,933 | $ | 146,867 | ||||||||||
Real estate—construction
|
1,590 | — | 2,871 | — | 4,461 | |||||||||||||||
Commercial, financial and agricultural 2
|
171,249 | 18,598 | 17,519 | 11,106 | 218,472 | |||||||||||||||
Equity lines
|
32,194 | 295 | 836 | 10 | 33,335 | |||||||||||||||
Consumer
|
4,543 | — | 879 | — | 5,422 | |||||||||||||||
|
$ | 349,370 | $ | 20,312 | $ | 24,826 | $ | 14,049 | $ | 408,557 |
(Dollars in thousands)
|
Performing
|
Non-performing
|
Total
|
|||||||||
Consumer finance
|
$ | 251,894 | $ | 375 | $ | 252,269 |
1
|
At March 31, 2012, the Corporation did not have any loans classified as Doubtful or Loss.
|
2
|
Includes the Corporation’s commercial real estate lending, land acquisition and development lending, builder line lending and commercial business lending.
|
(Dollars in thousands)
|
Pass
|
Special
Mention
|
Substandard
|
Substandard
Nonaccrual
|
Total1
|
|||||||||||||||
Real estate—residential mortgage
|
$ | 140,304 | $ | 1,261 | $ | 3,130 | $ | 2,440 | $ | 147,135 | ||||||||||
Real estate—construction
|
2,867 | — | 2,870 | — | 5,737 | |||||||||||||||
Commercial, financial and agricultural 2
|
164,448 | 18,787 | 20,931 | 8,069 | 212,235 | |||||||||||||||
Equity lines
|
31,935 | 298 | 836 | 123 | 33,192 | |||||||||||||||
Consumer
|
5,271 | 10 | 776 | — | 6,057 | |||||||||||||||
|
$ | 344,825 | $ | 20,356 | $ | 28,543 | $ | 10,632 | $ | 404,356 |
(Dollars in thousands)
|
Performing
|
Non-performing
|
Total
|
|||||||||
Consumer finance
|
$ | 245,924 | $ | 381 | $ | 246,305 |
1
|
At December 31, 2011, the Corporation did not have any loans classified as Doubtful or Loss.
|
2
|
Includes the Corporation’s commercial real estate lending, land acquisition and development lending, builder line lending and commercial business lending.
|
(Dollars in thousands)
|
March 31,
2012
|
December 31,
2011
|
||||||
Nonaccrual loans - Retail Banking
|
$ | 13,428 | $ | 10,011 | ||||
Nonaccrual loans - Mortgage Banking
|
621 | 621 | ||||||
OREO* - Retail Banking
|
5,209 | 6,059 | ||||||
OREO* - Mortgage Banking
|
— | — | ||||||
Total nonperforming assets
|
$ | 19,258 | $ | 16,691 | ||||
Accruing loans past due for 90 days or more
|
$ | 2 | $ | 68 | ||||
Troubled debt restructurings
|
$ | 16,712 | $ | 17,094 | ||||
Total loans
|
$ | 408,557 | $ | 404,356 | ||||
Allowance for loan losses
|
$ | 14,716 | $ | 14,130 | ||||
Nonperforming assets to total loans and OREO*
|
4.65 | % | 4.07 | % | ||||
Allowance for loan losses to total loans
|
3.60 | 3.49 | ||||||
Allowance for loan losses to nonaccrual loans
|
104.75 | 132.90 |
*
|
OREO is recorded at its estimated fair value less cost to sell.
|
(Dollars in thousands)
|
March 31,
2012
|
December 31,
2011
|
||||||
Nonaccrual loans
|
$ | 375 | $ | 381 | ||||
Accruing loans past due for 90 days or more
|
$ | — | $ | — | ||||
Total loans
|
$ | 252,269 | $ | 246,305 | ||||
Allowance for loan losses
|
$ | 20,041 | $ | 19,547 | ||||
Nonaccrual consumer finance loans to total consumer finance loans
|
0.15 | % | 0.15 | % | ||||
Allowance for loan losses to total consumer finance loans
|
7.94 | 7.94 |
(Dollars in thousands)
|
Recorded
Investment in
Loans
|
Unpaid
Principal
Balance
|
Related
Allowance
|
Average
Balance Impaired
Loans
|
Interest
Income
Recognized
|
|||||||||||||||
Real estate – residential mortgage
|
$ | 3,351 | $ | 3,572 | $ | 636 | $ | 3,431 | $ | 32 | ||||||||||
Commercial, financial and agricultural:
|
||||||||||||||||||||
Commercial real estate lending
|
5,792 | 5,916 | 1,588 | 5,815 | 39 | |||||||||||||||
Land acquisition and development lending
|
8,310 | 8,634 | 1,782 | 6,450 | 88 | |||||||||||||||
Builder line lending
|
2,007 | 2,007 | 384 | 2,101 | — | |||||||||||||||
Commercial business lending
|
641 | 644 | 129 | 646 | 3 | |||||||||||||||
Consumer
|
432 | 432 | 65 | 432 | 4 | |||||||||||||||
Total
|
$ | 20,533 | $ | 21,205 | $ | 4,584 | $ | 18,875 | $ | 166 |
(Dollars in thousands)
|
Recorded
Investment in
Loans
|
Unpaid
Principal
Balance
|
Related
Allowance
|
Average
Balance Impaired
Loans
|
Interest
Income
Recognized
|
|||||||||||||||
Real estate – residential mortgage
|
$ | 3,482 | $ | 3,698 | $ | 657 | $ | 3,723 | $ | 137 | ||||||||||
Commercial, financial and agricultural:
|
||||||||||||||||||||
Commercial real estate lending
|
5,861 | 5,957 | 1,464 | 6,195 | 102 | |||||||||||||||
Land acquisition and development lending
|
5,490 | 5,814 | 1,331 | 6,116 | 372 | |||||||||||||||
Builder line lending
|
2,285 | 2,285 | 318 | 2,397 | — | |||||||||||||||
Commercial business lending
|
652 | 654 | 161 | 663 | 6 | |||||||||||||||
Equity lines
|
— | — | — | — | — | |||||||||||||||
Consumer
|
324 | 324 | 49 | 324 | 14 | |||||||||||||||
Total
|
$ | 18,094 | $ | 18,732 | $ | 3,980 | $ | 19,418 | $ | 631 |
(Dollars in thousands)
|
March 31,
2012
|
December 31,
2011
|
||||||
Accruing TDRs
|
$ | 8,137 | $ | 8,653 | ||||
Nonaccrual TDRs1
|
8,575 | 8,441 | ||||||
Total TDRs2
|
$ | 16,712 | $ | 17,094 |
1
|
Included in nonaccrual loans in Table 8: Nonperforming Assets.
|
2
|
Included in impaired loans in Table 9: Impaired Loans.
|
March 31, 2012
|
December 31, 2011
|
|||||||||||||||
(Dollars in thousands)
|
Amount
|
Percent
|
Amount
|
Percent
|
||||||||||||
Real estate – residential mortgage
|
$ | 146,867 | 22 | % | $ | 147,135 | 22 | % | ||||||||
Real estate – construction
|
4,461 | 1 | 5,737 | 1 | ||||||||||||
Commercial, financial and agricultural 1
|
218,472 | 33 | 212,235 | 33 | ||||||||||||
Equity lines
|
33,335 | 5 | 33,192 | 5 | ||||||||||||
Consumer
|
5,422 | 1 | 6,057 | 1 | ||||||||||||
Consumer finance
|
252,269 | 38 | 246,305 | 38 | ||||||||||||
Total loans
|
660,826 | 100 | % | 650,661 | 100 | % | ||||||||||
Less allowance for loan losses
|
(34,757 | ) | (33,677 | ) | ||||||||||||
Total loans, net
|
$ | 626,069 | $ | 616,984 |
1
|
Includes loans secured by real estate for builder lines, acquisition and development and commercial development, as well as commercial loans secured by personal property.
|
March 31, 2012
|
December 31, 2011
|
|||||||||||||||
(Dollars in thousands)
|
Amount
|
Percent
|
Amount
|
Percent
|
||||||||||||
U.S. government agencies and corporations
|
$ | 13,926 | 10 | % | $ | 15,283 | 10 | % | ||||||||
Mortgage-backed securities
|
2,977 | 2 | 2,216 | 2 | ||||||||||||
Obligations of states and political subdivisions
|
126,899 | 88 | 127,079 | 88 | ||||||||||||
Total debt securities
|
143,802 | 100 | 144,578 | 100 | ||||||||||||
Preferred stock
|
66 | * | 68 | * | ||||||||||||
Total available for sale securities at fair value
|
$ | 143,868 | 100 | % | $ | 144,646 | 100 | % |
*
|
Less than one percent.
|
March 31, 2012
|
||||||||||||
(Dollars in thousands)
|
Capacity
|
Outstanding
|
Available
|
|||||||||
Federal funds purchased
|
$ | 59,000 | $ | — | $ | 59,000 | ||||||
Repurchase agreements
|
5,000 | 5,000 | — | |||||||||
Borrowings from FHLB
|
111,708 | 52,500 | 59,208 | |||||||||
Borrowings from Federal Reserve Bank
|
59,024 | — | 59,024 | |||||||||
Revolving line of credit
|
120,000 | 75,488 | 44,512 | |||||||||
Total
|
$ | 354,732 | $ | 132,988 | $ | 221,744 |
Actual
|
Minimum
Capital
Requirements
|
Minimum To Be
Well Capitalized
Under Prompt
Corrective Action
Provisions
|
||||||||||||||||||||||
(Dollars in thousands)
|
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
||||||||||||||||||
As of March 31, 2012:
|
||||||||||||||||||||||||
Total Capital (to Risk-Weighted Assets)
|
||||||||||||||||||||||||
Corporation
|
$ | 116,751 | 16.8 | % | $ | 55,643 | 8.0 | % | N/A | N/A | ||||||||||||||
Bank
|
114,598 | 16.5 | 55,443 | 8.0 | $ | 69,304 | 10.0 | % | ||||||||||||||||
Tier 1 Capital (to Risk-Weighted Assets)
|
||||||||||||||||||||||||
Corporation
|
107,735 | 15.5 | 27,822 | 4.0 | N/A | N/A | ||||||||||||||||||
Bank
|
105,613 | 15.2 | 27,722 | 4.0 | 41,582 | 6.0 | ||||||||||||||||||
Tier 1 Capital (to Average Assets)
|
||||||||||||||||||||||||
Corporation
|
107,735 | 11.7 | 36,700 | 4.0 | N/A | N/A | ||||||||||||||||||
Bank
|
105,613 | 11.5 | 36,596 | 4.0 | 45,745 | 5.0 | ||||||||||||||||||
As of December 31, 2011:
|
||||||||||||||||||||||||
Total Capital (to Risk-Weighted Assets)
|
||||||||||||||||||||||||
Corporation
|
$ | 113,427 | 16.4 | % | $ | 55,205 | 8.0 | % | N/A | N/A | ||||||||||||||
Bank
|
111,029 | 16.2 | 54,999 | 8.0 | $ | 68,749 | 10.0 | % | ||||||||||||||||
Tier 1 Capital (to Risk-Weighted Assets)
|
||||||||||||||||||||||||
Corporation
|
104,492 | 15.1 | 27,603 | 4.0 | N/A | N/A | ||||||||||||||||||
Bank
|
102,126 | 14.9 | 27,500 | 4.0 | 41,249 | 6.0 | ||||||||||||||||||
Tier 1 Capital (to Average Assets)
|
||||||||||||||||||||||||
Corporation
|
104,492 | 11.5 | 36,362 | 4.0 | N/A | N/A | ||||||||||||||||||
Bank
|
102,126 | 11.3 | 36,252 | 4.0 | 45,315 | 5.0 |
ITEM 4.
|
ITEM 1A.
|
ITEM 6.
|
3.1
|
Articles of Incorporation of C&F Financial Corporation (incorporated by reference to Exhibit 3.1 to Form 10-KSB filed March 29, 1996)
|
3.1.1
|
Amendment to Articles of Incorporation of C&F Financial Corporation establishing Series A Preferred Stock, effective January 8, 2009 (incorporated by reference to Exhibit 3.1.1 to Form 8-K filed January 14, 2009)
|
3.2
|
Amended and Restated Bylaws of C&F Financial Corporation, as adopted October 16, 2007 (incorporated by reference to Exhibit 3.2 to Form 8-K filed October 22, 2007)
|
4.1
|
Certificate of Designations for 20,000 shares of Fixed Rate Cumulative Perpetual Preferred Stock, Series A (incorporated by reference to Exhibit 3.1.1 to Form 8-K filed January 14, 2009)
|
4.2
|
Warrant to Purchase up to 167,504 shares of Common Stock, dated January 9, 2009 (incorporated by reference to Exhibit 4.2 to Form 8-K filed January 14, 2009)
|
10.3.1
|
Amendment to Amended and Restated Change in Control Agreement dated March 1, 2012 between C&F Financial Corporation and Thomas F. Cherry (incorporated by reference to Exhibit 10.3.1 to Form 10-K filed March 5, 2012)
|
10.14.1
|
Amendment to Amended and Restated Change in Control Agreement dated March 1, 2012 between C&F Financial Corporation and Bryan McKernon (incorporated by reference to Exhibit 10.14.1 to Form 10-K filed March 5, 2012)
|
10.28
|
Letter Agreement, dated April 11, 2012, between C&F Financial Corporation and the United States Department of the Treasury (incorporated by reference to Exhibit 10.28 to Form 8-K filed April 12, 2012)
|
Certification of CEO pursuant to Rule 13a-14(a)
|
|
Certification of CFO pursuant to Rule 13a-14(a)
|
|
Certification of CEO/CFO pursuant to 18 U.S.C. Section 1350
|
101.INS
|
XBRL Instance Document
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE
|
XBRL Taxonomy Presentation Linkbase Document
|
|
|
C&F FINANCIAL CORPORATION
|
||
|
|
|
(Registrant)
|
|
Date |
May 8, 2012
|
|
|
/s/ Larry G. Dillon
|
|
|
|
Larry G. Dillon
|
|
|
|
|
Chairman, President and Chief Executive Officer
(Principal Executive Officer)
|
|
Date |
May 8, 2012
|
|
|
/s/ Thomas F. Cherry
|
|
|
|
Thomas F. Cherry
|
|
|
|
|
Executive Vice President,
Chief Financial Officer and Secretary
(Principal Financial and Accounting Officer)
|
Date | May 8, 2012 | ||
/s/ Larry G. Dillon
|
|||
Larry G. Dillon, President and Chief Executive Officer
|
Date |
May 8, 2012
|
||
/s/ Thomas F. Cherry
|
|||
Thomas F. Cherry, Executive Vice President and
Chief Financial Officer
|
Date: |
May 8, 2012
|
/s/ Larry G. Dillon
|
|
|
Larry G. Dillon
|
||
|
President and Chief Executive Officer
|
||
Date: |
May 8, 2012
|
/s/ Thomas F. Cherry
|
|
|
Thomas F. Cherry
|
||
|
Executive Vice President and Chief Financial Officer
|
Summary of Significant Accounting Policies
|
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2012
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | NOTE 1: Summary of Significant Accounting Policies Principles of Consolidation: The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) for interim financial reporting and with applicable quarterly reporting regulations of the Securities and Exchange Commission (the SEC). They do not include all of the information and notes required by U.S. GAAP for complete financial statements. Therefore, these consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the C&F Financial Corporation Annual Report on Form 10-K for the year ended December 31, 2011. The unaudited consolidated financial statements include the accounts of C&F Financial Corporation (the Corporation) and its wholly-owned subsidiary, Citizens and Farmers Bank (the Bank or C&F Bank). All significant intercompany accounts and transactions have been eliminated in consolidation. In addition, C&F Financial Corporation owns C&F Financial Statutory Trust I and C&F Financial Statutory Trust II, which are unconsolidated subsidiaries. The subordinated debt owed to these trusts is reported as a liability of the Corporation. Nature of Operations: The Corporation is a bank holding company incorporated under the laws of the Commonwealth of Virginia. The Corporation owns all of the stock of its subsidiary, C&F Bank, which is an independent commercial bank chartered under the laws of the Commonwealth of Virginia. The Bank and its subsidiaries offer a wide range of banking and related financial services to both individuals and businesses. The Bank has five wholly-owned subsidiaries: C&F Mortgage Corporation and Subsidiaries (C&F Mortgage), C&F Finance Company (C&F Finance), C&F Title Agency, Inc., C&F Investment Services, Inc. and C&F Insurance Services, Inc., all incorporated under the laws of the Commonwealth of Virginia. C&F Mortgage, organized in September 1995, was formed to originate and sell residential mortgages and through its subsidiaries, Hometown Settlement Services LLC and Certified Appraisals LLC, provides ancillary mortgage loan production services, such as loan settlements, title searches and residential appraisals. C&F Finance, acquired on September 1, 2002, is a regional finance company providing automobile loans. C&F Title Agency, Inc., organized in October 1992, primarily sells title insurance to the mortgage loan customers of the Bank and C&F Mortgage. C&F Investment Services, Inc., organized in April 1995, is a full-service brokerage firm offering a comprehensive range of investment services. C&F Insurance Services, Inc., organized in July 1999, owns an equity interest in an insurance agency that sells insurance products to customers of the Bank, C&F Mortgage and other financial institutions that have an equity interest in the agency. Business segment data is presented in Note 8. Basis of Presentation: The preparation of financial statements in conformity with U.S. GAAP requires management to make 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 revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, the allowance for indemnifications, impairment of loans, impairment of securities, the valuation of other real estate owned, the projected benefit obligation under the defined benefit pension plan, the valuation of deferred taxes, the valuation of derivative financial instruments and goodwill impairment. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, which are necessary for a fair presentation of the results of operations in these financial statements, have been made. Certain reclassifications have been made to prior period amounts to conform to the current period presentation. Derivative Financial Instruments: The Corporation recognizes derivative financial instruments at fair value as either an other asset or other liability in the consolidated balance sheets. The derivative financial instruments have been designated as and qualify as cash flow hedges. The effective portion of the gain or loss on cash flow hedges is reported as a component of other comprehensive income, net of deferred income taxes, and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Share-Based Compensation: Compensation expense for the first quarter of 2012 included $120,000 ($74,000 after tax) for restricted stock granted since 2007. As of March 31, 2012, there was $1.37 million of total unrecognized compensation expense related to unvested restricted stock that will be recognized over the remaining requisite service periods. Stock option activity during the first quarter of 2012 and stock options outstanding as of March 31, 2012 are summarized below:
A summary of activity for restricted stock awards during the first quarter of 2012 is presented below:
Recent Significant Accounting Pronouncements: In April 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2011-03, Transfers and Servicing - Reconsideration of Effective Control for Repurchase Agreements. The amendments in this ASU remove from the assessment of effective control (1) the criterion requiring the transferor to have the ability to repurchase or redeem the financial assets on substantially the agreed terms, even in the event of default by the transferee and (2) the collateral maintenance implementation guidance related to that criterion. The amendments in this ASU are effective for the first interim or annual period beginning on or after December 15, 2011. The guidance should be applied prospectively to transactions or modifications of existing transactions that occur on or after the effective date. Early adoption was not permitted. The adoption of the new guidance did not have a material effect on the Corporation's financial statements. In May 2011, the FASB issued ASU 2011-04, Fair Value Measurement - Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. This ASU is the result of joint efforts by the FASB and the International Accounting Standards Board to develop a single, converged fair value framework on how (not when) to measure fair value and what disclosures to provide about fair value measurements. The ASU is largely consistent with existing fair value measurement principles in U.S. GAAP (Topic 820), with many of the amendments made to eliminate unnecessary wording differences between U.S. GAAP and International Financial Reporting Standards. The amendments are effective for interim and annual periods beginning after December 15, 2011 with prospective application. Early application was not permitted. The Corporation has included the required disclosures in its consolidated financial statements. In June 2011, the FASB issued ASU 2011-05, Comprehensive Income - Presentation of Comprehensive Income. The objective of this ASU is to improve the comparability, consistency and transparency of financial reporting and to increase the prominence of items reported in other comprehensive income by eliminating the option to present components of other comprehensive income as part of the statement of changes in stockholders' equity. The amendments require that all non-owner changes in stockholders' equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The amendments do not change the items that must be reported in other comprehensive income, the option for an entity to present components of other comprehensive income either net of related tax effects or before related tax effects, or the calculation or reporting of earnings per share. The amendments in this ASU should be applied retrospectively. The amendments are effective for fiscal years and interim periods within those years beginning after December 15, 2011. The amendments do not require transition disclosures. The Corporation has included the required disclosures in its consolidated financial statements. In September 2011, the FASB issued ASU 2011-08, Intangible - Goodwill and Other - Testing Goodwill for Impairment. The amendments in this ASU permit an entity to first assess qualitative factors related to goodwill to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill test described in Topic 350. The more-likely-than-not threshold is defined as having a likelihood of more than 50 percent. Under the amendments in this ASU, an entity is not required to calculate the fair value of a reporting unit unless the entity determines that it is more likely than not that its fair value is less than its carrying amount. The amendments in this ASU are effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. Early adoption is permitted, including for annual and interim goodwill impairment tests performed as of a date before September 15, 2011, if an entity's financial statements for the most recent annual or interim period have not yet been issued. The adoption of the new guidance did not have a material effect on the Corporation's consolidated financial statements. In December 2011, the FASB issued ASU 2011-12, Comprehensive Income - Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in ASU 2011-05. The amendments are being made to allow the FASB time to redeliberate whether to present on the face of the financial statements the effects of reclassifications out of accumulated other comprehensive income on the components of net income and other comprehensive income for all periods presented. While the FASB is considering the operational concerns about the presentation requirements for reclassification adjustments and the needs of financial statement users for additional information about reclassification adjustments, entities should continue to report reclassifications out of accumulated other comprehensive income consistent with the presentation requirements in effect before ASU 2011-05. All other requirements in ASU 2011-05 are not affected by ASU 2011-12, including the requirement to report comprehensive income either in a single continuous financial statement or in two separate but consecutive financial statements. Public entities should apply these requirements for fiscal years, and interim periods within those years, beginning after December 15, 2011. The Corporation has included the required disclosures in its consolidated financial statements. |