Washington, D.C. 20549 |
|
Virginia | 82-0545425 |
(State or other jurisdiction of | (I.R.S. Employer |
incorporation or organization) | Identification No.) |
N/A |
(Former name, former address and former fiscal year, if changed since last report) |
Large accelerated filer ¨ | Accelerated filer x |
Non-accelerated filer ¨ (Do not check if a smaller reporting company) | Smaller reporting company ¨ |
PART I | FINANCIAL INFORMATION | |
| ||
Item 1. | Financial Statements (Unaudited) | |
| Consolidated Balance Sheets, September 30, 2013 and December 31, 2012 | Page 2 |
| Consolidated Statements of Income, three and nine months ended September 30, 2013 and 2012 | Page 3 |
| Consolidated Statements of Comprehensive Income, three and nine months ended September 30, 2013 and 2012 | Page 4 |
| Consolidated Statements of Changes in Shareholders' Equity, nine months ended September 30, 2013 and 2012 | Page 5 |
| Consolidated Statements of Cash Flows, nine months ended September 30, 2013 and 2012 | Page 6 |
| Notes to Consolidated Financial Statements (Unaudited) | Page 7 |
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | Page 33 |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | Page 49 |
Item 4. | Controls and Procedures | Page 50 |
| ||
PART II | OTHER INFORMATION | |
| | |
Item 1. | Legal Proceedings | Page 50 |
Item1A. | Risk Factors | Page 51 |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | Page 52 |
Item 3. | Defaults Upon Senior Securities | Page 52 |
Item 4. | Mine Safety Disclosures | Page 52 |
Item 5. | Other Information | Page 52 |
Item 6. | Exhibits | Page 53 |
| | |
| Signatures | Page 55 |
- 1 - | ||
| | September 30, | | December 31, | | ||
| | 2013 | | 2012 | | ||
| | (Unaudited) | | | | | |
ASSETS | | | | | | | |
| | | | | | | |
Cash and due from banks | | $ | 9,556 | | $ | 15,735 | |
Interest-bearing deposits in other banks and federal funds sold | | | 62,221 | | | 22,206 | |
Securities: | | | | | | | |
Securities available-for-sale, at fair value | | | 72,692 | | | 35,759 | |
Securities held-to-maturity, at amortized cost (fair value of $15,426 and $45,308) | | | 15,856 | | | 44,952 | |
Total investment securities | | | 88,548 | | | 80,711 | |
| | | | | | | |
Restricted stock | | | 3,834 | | | 4,237 | |
Loans held for sale, at fair value | | | 16,376 | | | 111,542 | |
Loans | | | 654,807 | | | 616,978 | |
Allowance for loan losses | | | (13,025) | | | (12,500) | |
Net loans | | | 641,782 | | | 604,478 | |
Premises and equipment, net | | | 8,401 | | | 8,517 | |
Accrued interest receivable | | | 2,254 | | | 2,384 | |
Other assets | | | 13,592 | | | 14,104 | |
Total assets | | $ | 846,564 | | $ | 863,914 | |
| | | | | | | |
LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | | | |
Deposits | | | | | | | |
Noninterest-bearing deposits | | $ | 215,711 | | $ | 164,161 | |
Savings and interest-bearing deposits | | | 213,304 | | | 187,997 | |
Time deposits | | | 246,309 | | | 319,338 | |
Total deposits | | | 675,324 | | | 671,496 | |
Other liabilities | | | | | | | |
Short-term borrowings | | | 64,030 | | | 83,091 | |
Subordinated debentures | | | - | | | 6,186 | |
Other liabilities and accrued expenses | | | 10,792 | | | 11,874 | |
Total liabilities | | $ | 750,146 | | $ | 772,647 | |
| | | | | | | |
SHAREHOLDERS' EQUITY | | | | | | | |
Common stock, par value, $0.835; authorized, 60,000,000 shares; issued and outstanding, 10,321,858 shares at September 30, 2013 and 10,317,767 shares at December 31, 2012 | | $ | 8,619 | | $ | 8,615 | |
Additional paid in capital | | | 16,973 | | | 17,155 | |
Retained earnings | | | 72,324 | | | 65,404 | |
Accumulated other comprehensive income (loss), net | | | (1,498) | | | 93 | |
Total shareholders' equity | | | 96,418 | | | 91,267 | |
Total liabilities and shareholders' equity | | $ | 846,564 | | $ | 863,914 | |
- 2 - | ||
| | Three Months Ended September 30, | | Nine Months Ended September 30, | | ||||||||
| | 2013 | | 2012 | | 2013 | | 2012 | | ||||
Interest and Dividend Income | | | | | | | | | | | | | |
Interest and fees on loans | | $ | 8,262 | | $ | 8,632 | | $ | 25,468 | | $ | 25,672 | |
Interest on deposits in other banks | | | 22 | | | 12 | | | 76 | | | 62 | |
Interest and dividends on securities | | | 457 | | | 528 | | | 1,439 | | | 1,791 | |
Total interest and dividend income | | | 8,741 | | | 9,172 | | | 26,983 | | | 27,525 | |
| | | | | | | | | | | | | |
Interest Expense | | | | | | | | | | | | | |
Interest on deposits | | | 799 | | | 1,089 | | | 2,766 | | | 3,512 | |
Interest on short-term borrowings | | | 34 | | | 20 | | | 62 | | | 165 | |
Interest on long-term borrowings | | | - | | | 28 | | | - | | | 100 | |
Interest on subordinated debentures | | | (3) | | | 56 | | | 103 | | | 169 | |
Total interest expense | | | 830 | | | 1,193 | | | 2,931 | | | 3,946 | |
| | | | | | | | | | | | | |
Net interest income | | | 7,911 | | | 7,979 | | | 24,052 | | | 23,579 | |
Provision for loan losses | | | 450 | | | 150 | | | 675 | | | 1,340 | |
Net interest income after provision for loan losses | | | 7,461 | | | 7,829 | | | 23,377 | | | 22,239 | |
| | | | | | | | | | | | | |
Noninterest Income | | | | | | | | | | | | | |
Service fees on deposit accounts | | | 188 | | | 150 | | | 495 | | | 487 | |
Gain on sale of loans | | | 3,179 | | | 17,479 | | | 18,180 | | | 43,161 | |
Mortgage broker fee income | | | 16 | | | 16 | | | 63 | | | 43 | |
Other income | | | 1,696 | | | (4,920) | | | 5,208 | | | (5,133) | |
Total noninterest income | | | 5,079 | | | 12,725 | | | 23,946 | | | 38,558 | |
| | | | | | | | | | | | | |
Noninterest Expense | | | | | | | | | | | | | |
Salaries and employee benefits | | | 5,672 | | | 8,017 | | | 20,540 | | | 23,826 | |
Occupancy and equipment | | | 641 | | | 711 | | | 1,961 | | | 1,941 | |
Other operating expenses | | | 2,324 | | | 5,336 | | | 9,324 | | | 16,471 | |
Total noninterest expense | | | 8,637 | | | 14,064 | | | 31,825 | | | 42,238 | |
| | | | | | | | | | | | | |
Income before income taxes | | | 3,903 | | | 6,490 | | | 15,498 | | | 18,559 | |
| | | | | | | | | | | | | |
Income tax expense | | | 1,098 | | | 2,358 | | | 5,485 | | | 7,099 | |
NET INCOME | | $ | 2,805 | | $ | 4,132 | | $ | 10,013 | | $ | 11,460 | |
| | | | | | | | | | | | | |
Earnings per common share: | | | | | | | | | | | | | |
Basic | | $ | 0.27 | | $ | 0.40 | | $ | 0.97 | | $ | 1.12 | |
Diluted | | $ | 0.27 | | $ | 0.40 | | $ | 0.96 | | $ | 1.11 | |
| | | | | | | | | | | | | |
Average outstanding shares: | | | | | | | | | | | | | |
Basic | | | 10,306,865 | | | 10,271,246 | | | 10,312,017 | | | 10,236,472 | |
Diluted | | | 10,389,064 | | | 10,389,441 | | | 10,402,178 | | | 10,350,833 | |
- 3 - | ||
| | Three Months Ended September 30, | | Nine Months Ended September 30, | | ||||||||
| | 2013 | | 2012 | | 2013 | | 2012 | | ||||
Net income | | $ | 2,805 | | $ | 4,132 | | $ | 10,013 | | $ | 11,460 | |
| | | | | | | | | | | | | |
Other comprehensive income: | | | | | | | | | | | | | |
Unrealized gains (losses) on securities | | | | | | | | | | | | | |
Unrealized holding gains (losses) arising during period | | | (181) | | | 82 | | | (2,448) | | | 88 | |
Tax effect | | | 63 | | | (30) | | | 857 | | | (32) | |
Net of tax amount | | | (118) | | | 52 | | | (1,591) | | | 56 | |
| | | | | | | | | | | | | |
Comprehensive income | | $ | 2,687 | | $ | 4,184 | | $ | 8,422 | | $ | 11,516 | |
- 4 - | ||
| | | | | | | | | | | Accumulated | | | | | |
| | | | | | | | | | | Other | | | | | |
| | | | | Additional | | | | | Compre- | | | | | ||
| | Common | | Paid in | | Retained | | hensive | | | | | ||||
| | Stock | | Capital | | Earnings | | Income (Loss) | | Total | | |||||
Balance, December 31, 2012 | | $ | 8,615 | | $ | 17,155 | | $ | 65,404 | | $ | 93 | | $ | 91,267 | |
Net income | | | - | | | - | | | 10,013 | | | - | | | 10,013 | |
Other comprehensive loss | | | - | | | - | | | - | | | (1,591) | | | (1,591) | |
Stock option exercises (65,545 shares) | | | 55 | | | 377 | | | - | | | - | | | 432 | |
Repurchased under share repurchase program (61,454 shares) | | | (51) | | | (715) | | | - | | | - | | | (766) | |
Excess tax benefits from stock based payment arrangements | | | - | | | 6 | | | - | | | - | | | 6 | |
Cash dividend | | | - | | | - | | | (3,093) | | | - | | | (3,093) | |
Stock-based compensation expense recognized in earnings | | | - | | | 150 | | | - | | | - | | | 150 | |
| | | | | | | | | | | | | | | | |
Balance, September 30, 2013 | | $ | 8,619 | | $ | 16,973 | | $ | 72,324 | | $ | (1,498) | | $ | 96,418 | |
| | | | | | | | | | | | | | | | |
Balance, December 31, 2011 | | $ | 8,511 | | $ | 16,716 | | $ | 57,529 | | $ | 59 | | $ | 82,815 | |
Net income | | | - | | | - | | | 11,460 | | | - | | | 11,460 | |
Other comprehensive income | | | - | | | - | | | - | | | 56 | | | 56 | |
Stock option exercises (158,918 shares) | | | 133 | | | 702 | | | - | | | - | | | 835 | |
Repurchased under share repurchase program (74,300 shares) | | | (62) | | | (708) | | | - | | | - | | | (770) | |
Cash dividend | | | - | | | - | | | (1,800) | | | - | | | (1,800) | |
Stock-based compensation expense recognized in earnings | | | - | | | 186 | | | - | | | - | | | 186 | |
| | | | | | | | | | | | | | | | |
Balance, September 30, 2012 | | $ | 8,582 | | $ | 16,896 | | $ | 67,189 | | $ | 115 | | $ | 92,782 | |
- 5 - | ||
| | Nine Months Ended September 30, | | ||||
| | 2013 | | 2012 | | ||
Cash Flows from Operating Activities | | | | | | | |
Net income | | $ | 10,013 | | $ | 11,460 | |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | | | | | | | |
Provision for loan losses | | | 675 | | | 1,340 | |
Provision for losses on mortgage loans sold | | | 388 | | | 2,186 | |
Provision for off-balance sheet losses | | | 153 | | | 144 | |
Excess tax benefits | | | 6 | | | - | |
Deferred tax benefit | | | 187 | | | (187) | |
Stock-based compensation | | | 150 | | | 186 | |
Valuation allowance on derivatives | | | 492 | | | (173) | |
Amortization of premiums and discount accretion on securities, net | | | 297 | | | 56 | |
Depreciation and amortization | | | 356 | | | 314 | |
Gain on disposal of assets | | | (1) | | | - | |
Decrease (increase) in valuation of loans held for sale carried at fair value | | | 4,153 | | | (675) | |
Decrease in loans held for sale | | | 91,012 | | | 11,790 | |
Decrease (increase) in other assets | | | 1,605 | | | (879) | |
(Decrease) increase in other liabilities | | | (2,422) | | | 517 | |
Net cash provided by operating activities | | | 107,064 | | | 26,079 | |
Cash Flows from Investing Activities | | | | | | | |
Proceeds from maturities and calls of securities available-for-sale | | | 27,635 | | | 45,212 | |
Proceeds from maturities and calls of securities held-to-maturity | | | 30,000 | | | 20,000 | |
Purchases of securities available-for-sale | | | (66,925) | | | (35,225) | |
Purchases of securities held-to-maturity | | | (889) | | | (44,948) | |
Net increase in loans | | | (37,979) | | | (22,249) | |
Proceeds from sale of equipment | | | 10 | | | - | |
Purchases of premises and equipment | | | (234) | | | (67) | |
Net cash used by investing activities | | | (48,382) | | | (37,277) | |
Cash Flows from Financing Activities | | | | | | | |
Increase in demand, interest-bearing demand and savings deposits | | | 76,857 | | | 90,762 | |
Decrease in time deposits | | | (73,030) | | | (29,994) | |
Decrease in securities sold under agreement to repurchase | | | (14,060) | | | (3,633) | |
Decrease in other short-term borrowings | | | (5,000) | | | (30,000) | |
Decrease in long-term borrowings | | | (6,186) | | | (1,661) | |
Proceeds from issuance of common stock | | | 432 | | | 835 | |
Repurchase of common stock | | | (766) | | | (770) | |
Dividends paid | | | (3,093) | | | (1,800) | |
Net cash provided (used) by financing activities | | | (24,846) | | | 23,739 | |
| | | | | | | |
Increase in cash and cash equivalents | | | 33,836 | | | 12,541 | |
Cash and Cash Equivalents | | | | | | | |
Beginning | | | 37,941 | | | 43,909 | |
Ending | | $ | 71,777 | | $ | 56,450 | |
Supplemental Disclosures of Cash Flow Information | | | | | | | |
Cash payments for interest | | $ | 2,844 | | $ | 4,284 | |
Cash payments for income taxes | | $ | 6,881 | | $ | 7,581 | |
Supplemental Disclosures of Noncash Investing Activities | | | | | | | |
Unrealized (loss) gain on securities available-for-sale | | $ | (2,448) | | $ | 88 | |
- 6 - | ||
- 7 - | ||
| | Nine Months Ended | | |
| | September 30, 2013 | | |
Expected life of options granted, in years | | | 4.36 | |
Risk-free interest rate | | | 0.36 | % |
Expected volatility of stock | | | 42 | % |
Annual expected dividend yield | | | 3 | % |
| | | | |
Fair Value of Granted Options | | $ | 435,035 | |
Non-Vested Options | | | 233,477 | |
| | | | | | | | Weighted Avg. | | | | | |
| | Number of | | Weighted Avg. | | Remaining Contractual | | Aggregate Intrinsic | | ||||
| | Options | | Exercise Price | | Term, in years | | Value | | ||||
Outstanding at beginning of year, in years | | | 274,800 | | $ | 7.72 | | | 2.59 | | $ | 1,450,016 | |
Granted | | | 141,584 | | | 15.31 | | | 4.36 | | | - | |
Exercised | | | (65,545) | | | 6.58 | | | 0.72 | | | 499,741 | |
Lapsed or Canceled | | | (16,654) | | $ | 8.51 | | | 1.98 | | $ | - | |
| | | | | | | | | | | | | |
Outstanding at September 30, 2013 | | | 334,185 | | $ | 11.12 | | | 3.14 | | $ | 1,200,435 | |
| | | | | | | | | | | | | |
Exercisable at September 30, 2013 | | | 100,708 | | $ | 7.30 | | | 1.44 | | $ | 701,250 | |
| | Nine Months Ended | | |
| | September 30, 2012 | | |
Expected life of options granted, in years | | | 4.35 | |
Risk-free interest rate | | | 0.39 | % |
Expected volatility of stock | | | 43 | % |
Annual expected dividend yield | | | 2 | % |
| | | | |
Fair value of granted options | | $ | 330,326 | |
Non-vested options | | | 227,500 | |
| | | | | | | | Weighted Avg. | | | | | |
| | Number of | | Weighted Avg. | | Remaining Contractual | | Aggregate Intrinsic | | ||||
| | Options | | Exercise Price | | Term, in years | | Value | | ||||
Outstanding at beginning of year, in years | | | 385,450 | | $ | 6.04 | | | 1.63 | | $ | 1,064,115 | |
Granted | | | 107,100 | | | 9.32 | | | 4.35 | | | - | |
Exercised | | | (158,918) | | | 5.26 | | | 0.02 | | | 922,767 | |
Lapsed or canceled | | | (12,082) | | $ | 6.17 | | | 1.57 | | $ | - | |
| | | | | | | | | | | | | |
Outstanding at September 30, 2012 | | | 321,550 | | $ | 7.52 | | | 2.61 | | $ | 1,975,545 | |
| | | | | | | | | | | | | |
Exercisable at September 30, 2012 | | | 94,050 | | $ | 6.18 | | | 1.18 | | $ | 703,536 | |
- 8 - | ||
| | September 30, 2013 | | ||||||||||
| | | | | Gross | | Gross | | | | | ||
| | | | | Unrealized | | Unrealized | | Estimated | | |||
| | Amortized Cost | | Gains | | (Losses) | | Fair Value | | ||||
| | (In Thousands) | | ||||||||||
Available-for-sale: | | | | | | | | | | | | | |
U.S. Government agencies | | $ | 36,034 | | $ | 1 | | $ | (1,338) | | $ | 34,697 | |
Mortgage backed securities | | | 27,695 | | | 71 | | | (917) | | | 26,849 | |
Corporate bonds | | | 6,018 | | | 103 | | | (118) | | | 6,003 | |
Other AFS | | | 3,750 | | | - | | | (33) | | | 3,717 | |
CRA mutual fund | | | 1,500 | | | - | | | (74) | | | 1,426 | |
Total | | $ | 74,997 | | $ | 175 | | $ | (2,480) | | $ | 72,692 | |
| | | | | | | | | | | | | |
Held-to-maturity: | | | | | | | | | | | | | |
U.S. Government agencies | | $ | 14,982 | | $ | 5 | | $ | (388) | | $ | 14,599 | |
Municipals - non taxable | | | 874 | | | - | | | (47) | | | 827 | |
Total | | $ | 15,856 | | $ | 5 | | $ | (435) | | $ | 15,426 | |
| | December 31, 2012 | | ||||||||||
| | | | | Gross | | Gross | | Estimated | | |||
| | | | | Unrealized | | Unrealized | | Fair | | |||
| | Amortized Cost | | Gains | | (Losses) | | Value | | ||||
| | (In Thousands) | | ||||||||||
Available-for-sale: | | | | | | | | | | | | | |
U.S. Government agencies | | $ | 15,000 | | $ | 16 | | $ | - | | $ | 15,016 | |
Mortgage backed securities | | | 15,103 | | | 100 | | | (26) | | | 15,177 | |
Corporate bonds | | | 4,012 | | | 92 | | | (25) | | | 4,079 | |
CRA mutual fund | | | 1,500 | | | - | | | (13) | | | 1,487 | |
Total | | $ | 35,615 | | $ | 208 | | $ | (64) | | $ | 35,759 | |
| | | | | | | | | | | | | |
Held-to-maturity: | | | | | | | | | | | | | |
U.S. Government agencies | | $ | 44,952 | | $ | 356 | | $ | - | | $ | 45,308 | |
Total | | $ | 44,952 | | $ | 356 | | $ | - | | $ | 45,308 | |
- 9 - | ||
| | September 30, 2013 | | December 31, 2012 | | ||||||||
| | | | | Estimated | | | | | Estimated | | ||
| | Amortized | | Fair | | Amortized | | Fair | | ||||
| | Cost | | Value | | Cost | | Value | | ||||
| | (In Thousands) | | ||||||||||
Available-for-sale: | | | | | | | | | | | | | |
U.S. Government agencies: | | | | | | | | | | | | | |
Due after one through five years | | $ | 4,373 | | $ | 4,350 | | $ | 5,000 | | $ | 5,003 | |
Due after five through ten years | | | 23,998 | | | 22,922 | | | 5,000 | | | 5,008 | |
Due after ten through fifteen years | | | 4,228 | | | 4,230 | | | 5,000 | | | 5,005 | |
Due after fifteen years | | | 3,434 | | | 3,195 | | | - | | | - | |
Mortgage backed securities: | | | | | | | | | | | | | |
Due after five through ten years | | | 5,755 | | | 5,606 | | | 3,696 | | | 3,745 | |
Due after ten through fifteen years | | | 18,577 | | | 17,942 | | | 10,918 | | | 10,893 | |
Due after fifteen years | | | 3,364 | | | 3,301 | | | 489 | | | 539 | |
Corporate bonds: | | | | | | | | | | | | | |
Due after one through five years | | | 4,011 | | | 4,114 | | | 4,012 | | | 4,079 | |
Due after five through ten years | | | 2,007 | | | 1,889 | | | - | | | - | |
Other-AFS: | | | | | | | | | | | | | |
Due after five through ten years | | | 1,000 | | | 1,000 | | | - | | | - | |
Due after fifteen years | | | 2,750 | | | 2,717 | | | - | | | - | |
CRA Mutual Fund | | | 1,500 | | | 1,426 | | | 1,500 | | | 1,487 | |
Total | | $ | 74,997 | | $ | 72,692 | | $ | 35,615 | | $ | 35,759 | |
| | | | | | | | | | | | | |
Held-to-maturity: | | | | | | | | | | | | | |
U.S. Government agencies: | | | | | | | | | | | | | |
Due after one through five years | | $ | 4,998 | | $ | 5,002 | | $ | 24,981 | | $ | 25,085 | |
Due after five through ten years | | | 5,000 | | | 5,001 | | | 5,000 | | | 5,175 | |
Due after ten through fifteen years | | | 4,984 | | | 4,596 | | | 14,971 | | | 15,048 | |
Municipals non-taxable: | | | | | | | | | | | | | |
Due after ten through fifteen years | | | 874 | | | 827 | | | - | | | - | |
Total | | $ | 15,856 | | $ | 15,426 | | $ | 44,952 | | $ | 45,308 | |
- 10 - | ||
| | Securities in a loss | | Securities in a loss | | | | | | | | ||||||||
| | Position for less than | | Position for 12 Months | | | | | | | | ||||||||
| | 12 Months | | or Longer | | Total | | ||||||||||||
September 30, 2013 | | Estimated | | | | | Estimated | | | | | Estimated | | | | | |||
| | Fair | | Unrealized | | Fair | | Unrealized | | Fair | | Unrealized | | ||||||
| | Value | | Losses | | Value | | Losses | | Value | | Losses | | ||||||
| | (In Thousands) | | ||||||||||||||||
Investment securities available-for-sale: | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Mortgage backed securities | | $ | 22,605 | | $ | (911) | | $ | 934 | | $ | (6) | | $ | 23,539 | | $ | (917) | |
U.S. Government agencies | | | 30,467 | | | (1,338) | | | - | | | - | | | 30,467 | | | (1,338) | |
Other AFS | | | 2,717 | | | (33) | | | - | | | - | | | 2,717 | | | (33) | |
Corporate bonds | | | 1,889 | | | (118) | | | - | | | - | | | 1,889 | | | (118) | |
CRA Mutual fund | | | 1,426 | | | (74) | | | - | | | - | | | 1,426 | | | (74) | |
Total | | $ | 59,104 | | $ | (2,474) | | $ | 934 | | $ | (6) | | $ | 60,038 | | $ | (2,480) | |
| | | | | | | | | | | | | | | | | | | |
Investment securities held-to-maturity: | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
U.S. Government agencies | | $ | 4,596 | | $ | (388) | | $ | - | | $ | - | | $ | 4,596 | | $ | (388) | |
Municipals - non taxable | | | 827 | | | (47) | | | - | | | - | | | 827 | | | (47) | |
Total | | $ | 5,423 | | $ | (435) | | $ | - | | $ | - | | $ | 5,423 | | $ | (435) | |
| | Securities in a loss | | Securities in a loss | | | | | | | | ||||||||
| | Position for less than | | Position for 12 Months | | | | | | | | ||||||||
| | 12 Months | | or Longer | | Total | | ||||||||||||
| | Estimated | | | | | Estimated | | | | | Estimated | | | | | |||
December 31, 2012 | | Fair | | Unrealized | | Fair | | Unrealized | | Fair | | Unrealized | | ||||||
| | Value | | Losses | | Value | | Losses | | Value | | Losses | | ||||||
| | (In Thousands) | | ||||||||||||||||
Investment securities available-for-sale: | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Mortgage backed securities | | $ | 6,361 | | $ | (26) | | $ | - | | $ | - | | $ | 6,361 | | $ | (26) | |
Corporate bonds | | | - | | | - | | | 1,967 | | | (25) | | | 1,967 | | | (25) | |
CRA Mutual fund | | | 1,487 | | | (13) | | | - | | | - | | | 1,487 | | | (13) | |
Total | | $ | 7,848 | | $ | (39) | | $ | 1,967 | | $ | (25) | | $ | 9,815 | | $ | (64) | |
- 11 - | ||
| | September 30, 2013 | | December 31, 2012 | | ||
| | (In Thousands) | | ||||
Restricted Stock: | | | | | | | |
Federal Reserve Bank stock | | $ | 999 | | $ | 999 | |
FHLB stock | | | 2,835 | | | 3,238 | |
| | $ | 3,834 | | $ | 4,237 | |
- 12 - | ||
| | Composition of Loan Portfolio | | |||||||||||
| | September 30, 2013 | | December 31, 2012 | | |||||||||
(Dollars In Thousands) | | Amount | | Percentage of Total | | | Amount | | Percentage of Total | | ||||
| | | | | | | | | | | | | | |
Commercial real estate-owner occupied | | $ | 191,929 | | | 29.31 | % | | $ | 182,655 | | | 29.60 | % |
Commercial real estate-non owner occupied | | | 95,011 | | | 14.51 | | | | 107,213 | | | 17.38 | |
Residential real estate | | | 166,600 | | | 25.44 | | | | 144,521 | | | 23.43 | |
Commercial | | | 160,085 | | | 24.45 | | | | 149,389 | | | 24.21 | |
Real estate construction | | | 36,256 | | | 5.54 | | | | 30,038 | | | 4.87 | |
Consumer | | | 4,926 | | | 0.75 | | | | 3,162 | | | 0.51 | |
Total loans | | $ | 654,807 | | | 100.00 | % | | $ | 616,978 | | | 100.00 | % |
Less allowance for loan losses | | | 13,025 | | | | | | | 12,500 | | | | |
| | $ | 641,782 | | | | | | $ | 604,478 | | | | |
- 13 - | ||
| | Commercial real | | Commercial real | | | | | | | | | | | | | | | | | ||
| | estate - owner | | estate - non-owner | | Residential | | | | | Real estate | | | | | | | | ||||
Three months ended September 30, 2013 | | occupied | | occupied | | real estate | | Commercial | | construction | | Consumer | | Total | | |||||||
| | (In Thousands) | | |||||||||||||||||||
Allowance for credit losses: | | | | |||||||||||||||||||
Beginning Balance | | $ | 4,074 | | $ | 1,824 | | $ | 3,220 | | $ | 3,048 | | $ | 790 | | $ | 51 | | $ | 13,007 | |
Charge-offs | | | - | | | - | | | (46) | | | (430) | | | - | | | - | | | (476) | |
Recoveries | | | - | | | 23 | | | 17 | | | 4 | | | - | | | - | | | 44 | |
Provisions | | | (256) | | | 43 | | | 123 | | | 562 | | | (69) | | | 47 | | | 450 | |
Ending Balance | | $ | 3,818 | | $ | 1,890 | | $ | 3,314 | | $ | 3,184 | | $ | 721 | | $ | 98 | | $ | 13,025 | |
Nine months ended September 30, 2013 | | | | | | | | | | | | | | | | | | | | | | |
Allowance for credit losses: | | | | | | | | | | | | | | | | | | | | | | |
Beginning Balance | | $ | 3,701 | | $ | 2,173 | | $ | 2,924 | | $ | 3,028 | | $ | 610 | | $ | 64 | | $ | 12,500 | |
Charge-offs | | | - | | | - | | | (46) | | | (430) | | | - | | | - | | | (476) | |
Recoveries | | | - | | | 194 | | | 95 | | | 24 | | | - | | | 13 | | | 326 | |
Provisions | | | 117 | | | (477) | | | 341 | | | 562 | | | 111 | | | 21 | | | 675 | |
Ending Balance | | $ | 3,818 | | $ | 1,890 | | $ | 3,314 | | $ | 3,184 | | $ | 721 | | $ | 98 | | $ | 13,025 | |
| | Commercial real | | Commercial real | | | | | | | | | | | | | | | | | ||
| | estate - owner | | estate - non-owner | | Residential | | | | | Real estate | | | | | | | | ||||
Three months ended September 30, 2012 | | occupied | | occupied | | real estate | | Commercial | | construction | | Consumer | | Total | | |||||||
| | (In Thousands) | | |||||||||||||||||||
Allowance for credit losses: | | | | | | | | | | | | | | | | | | | | | | |
Beginning Balance | | $ | 3,720 | | $ | 2,177 | | $ | 2,616 | | $ | 2,897 | | $ | 555 | | $ | 66 | | $ | 12,031 | |
Charge-offs | | | (227) | | | (103) | | | (75) | | | - | | | - | | | 1 | | | (404) | |
Recoveries | | | - | | | 70 | | | 165 | | | 19 | | | - | | | 17 | | | 271 | |
Provisions | | | 236 | | | (14) | | | 95 | | | (173) | | | 13 | | | (7) | | | 150 | |
Ending Balance | | $ | 3,729 | | $ | 2,130 | | $ | 2,801 | | $ | 2,743 | | $ | 568 | | $ | 77 | | $ | 12,048 | |
Nine months ended September 30, 2012 | | | | | | | | | | | | | | | | | | | | | | |
Allowance for credit losses: | | | | | | | | | | | | | | | | | | | | | | |
Beginning Balance | | $ | 3,634 | | $ | 1,747 | | $ | 2,874 | | $ | 3,021 | | $ | 423 | | $ | 39 | | $ | 11,738 | |
Charge-offs | | | (429) | | | (103) | | | (569) | | | (694) | | | - | | | (34) | | | (1,829) | |
Recoveries | | | - | | | 126 | | | 394 | | | 261 | | | - | | | 18 | | | 799 | |
Provisions | | | 524 | | | 360 | | | 102 | | | 155 | | | 145 | | | 54 | | | 1,340 | |
Ending Balance | | $ | 3,729 | | $ | 2,130 | | $ | 2,801 | | $ | 2,743 | | $ | 568 | | $ | 77 | | $ | 12,048 | |
- 14 - | ||
| | Recorded Investment in Loans | | |||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | |
| | Commercial | | Commercial | | | | | | | | | | | | | | | | | ||
| | real estate - | | real estate - | | | | | | | | | | | | | | | | | ||
| | owner | | non-owner | | Residential | | | | | Real estate | | | | | | | | ||||
September 30, 2013 | | occupied | | occupied | | real estate | | Commercial | | construction | | Consumer | | Total | | |||||||
| | (In Thousands) | | |||||||||||||||||||
Allowance | | | | | | | | | | | | | | | | | | | | | | |
Ending balance: | | $ | 3,818 | | $ | 1,890 | | $ | 3,314 | | $ | 3,184 | | $ | 721 | | $ | 98 | | $ | 13,025 | |
Ending balance: individually evaluated for impairment | | $ | 53 | | $ | - | | $ | 45 | | $ | - | | $ | - | | $ | - | | $ | 98 | |
Ending balance: collectively evaluated for impairment | | $ | 3,765 | | $ | 1,890 | | $ | 3,269 | | $ | 3,184 | | $ | 721 | | $ | 98 | | $ | 12,927 | |
Ending balance: loans acquired with deteriorated credit quality | | $ | - | | $ | - | | $ | - | | $ | - | | $ | - | | $ | - | | $ | - | |
| | | | | | | | | | | | | | | | | | | | | | |
Loans | | | | | | | | | | | | | | | | | | | | | | |
Ending balance | | $ | 191,929 | | $ | 95,011 | | $ | 166,600 | | $ | 160,085 | | $ | 36,256 | | $ | 4,926 | | $ | 654,807 | |
Ending balance: individually evaluated for impairment | | $ | - | | $ | - | | $ | 1,226 | | $ | 1,676 | | $ | - | | $ | - | | $ | 2,902 | |
Ending balance: collectively evaluated for impairment | | $ | 191,929 | | $ | 95,011 | | $ | 165,374 | | $ | 158,409 | | $ | 36,256 | | $ | 4,926 | | $ | 651,905 | |
Ending balance: loans acquired with deteriorated credit quality | | $ | - | | $ | - | | $ | - | | $ | - | | $ | - | | $ | - | | $ | - | |
| | Commercial | | Commercial | | | | | | | | | | | | | | | | | ||
| | real estate - | | real estate - | | | | | | | | | | | | | | | | | ||
| | owner | | non-owner | | Residential | | | | | Real estate | | | | | | | | ||||
December 31, 2012 | | occupied | | occupied | | real estate | | Commercial | | construction | | Consumer | | Total | | |||||||
| | (In Thousands) | | |||||||||||||||||||
Allowance | | | | | | | | | | | | | | | | | | | | | | |
Ending balance: | | $ | 3,701 | | $ | 2,173 | | $ | 2,924 | | $ | 3,028 | | $ | 610 | | $ | 64 | | $ | 12,500 | |
Ending balance: individually evaluated for impairment | | $ | 98 | | $ | - | | $ | 230 | | $ | 277 | | $ | - | | $ | - | | $ | 605 | |
Ending balance: collectively evaluated for impairment | | $ | 3,603 | | $ | 2,173 | | $ | 2,694 | | $ | 2,751 | | $ | 610 | | $ | 64 | | $ | 11,895 | |
Ending balance: loans acquired with deteriorated credit quality | | $ | - | | $ | - | | $ | - | | $ | - | | $ | - | | $ | - | | $ | - | |
| | | | | | | | | | | | | | | | | | | | | | |
Loans | | | | | | | | | | | | | | | | | | | | | | |
Ending balance: | | $ | 182,655 | | $ | 107,213 | | $ | 144,521 | | $ | 149,389 | | $ | 30,038 | | $ | 3,162 | | $ | 616,978 | |
Ending balance: individually evaluated for impairment | | $ | 370 | | $ | - | | $ | 922 | | $ | 1,937 | | $ | - | | $ | - | | $ | 3,229 | |
Ending balance: collectively evaluated for impairment | | $ | 182,285 | | $ | 107,213 | | $ | 143,599 | | $ | 147,452 | | $ | 30,038 | | $ | 3,162 | | $ | 613,749 | |
Ending balance: loans acquired with deteriorated credit quality | | $ | - | | $ | - | | $ | - | | $ | - | | $ | - | | $ | - | | $ | - | |
- 15 - | ||
| | Credit Quality Indicators | | ||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Credit Risk Profile by Regulatory Risk Rating | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Commercial real estate - | | Commercial real estate - | | | | | | | | | | | | | | Real Estate | | | | | | | | | | | | | | ||||||||||||
| | owner occupied | | non-owner occupied | | Residential Real Estate | | Commercial | | Construction | | Consumer | | Totals | | ||||||||||||||||||||||||||||
| | 9/30/13 | | 12/31/12 | | 9/30/13 | | 12/31/12 | | 9/30/13 | | 12/31/12 | | 9/30/13 | | 12/31/12 | | 9/30/13 | | 12/31/12 | | 9/30/13 | | 12/31/12 | | 9/30/13 | | 12/31/12 | | ||||||||||||||
| | (In Thousands) | | ||||||||||||||||||||||||||||||||||||||||
Pass | | $ | 175,430 | | $ | 159,413 | | $ | 87,493 | | $ | 100,443 | | $ | 160,540 | | $ | 138,388 | | $ | 145,212 | | $ | 130,885 | | $ | 36,408 | | $ | 30,202 | | $ | 4,926 | | $ | 3,162 | | $ | 610,009 | | $ | 562,493 | |
Special mention | | | 5,157 | | | 11,897 | | | 2,488 | | | 2,402 | | | 3,576 | | | 3,902 | | | 7,871 | | | 12,225 | | | - | | | - | | | - | | | - | | | 19,092 | | | 30,426 | |
Substandard | | | 11,796 | | | 11,852 | | | 5,352 | | | 4,725 | | | 2,704 | | | 2,420 | | | 7,413 | | | 6,724 | | | - | | | - | | | - | | | - | | | 27,265 | | | 25,721 | |
Doubtful | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | | - | |
Loss | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | | - | |
Unearned income | | | (454) | | | (507) | | | (322) | | | (357) | | | (220) | | | (189) | | | (411) | | | (445) | | | (152) | | | (164) | | | - | | | - | | | (1,559) | | | (1,662) | |
Total | | $ | 191,929 | | $ | 182,655 | | $ | 95,011 | | $ | 107,213 | | $ | 166,600 | | $ | 144,521 | | $ | 160,085 | | $ | 149,389 | | $ | 36,256 | | $ | 30,038 | | $ | 4,926 | | $ | 3,162 | | $ | 654,807 | | $ | 616,978 | |
- 16 - | ||
Credit Risk Profile Based on Payment Activity | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Commercial real estate - | | Commercial real estate - | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||
| | owner occupied | | non-owner occupied | | Residential real estate | | Commercial | | Real estate construction | | Consumer | | Totals | | ||||||||||||||||||||||||||||
| | 9/30/13 | | 12/31/12 | | 9/30/13 | | 12/31/12 | | 9/30/13 | | 12/31/12 | | 9/30/13 | | 12/31/12 | | 9/30/13 | | 12/31/12 | | 9/30/13 | | 12/31/12 | | 9/30/13 | | 12/31/12 | | ||||||||||||||
| | (In Thousands) | | ||||||||||||||||||||||||||||||||||||||||
Performing | | $ | 191,929 | | $ | 182,655 | | $ | 95,011 | | $ | 107,213 | | $ | 165,374 | | $ | 143,599 | | $ | 158,409 | | $ | 147,568 | | $ | 36,256 | | $ | 30,038 | | $ | 4,926 | | $ | 3,162 | | $ | 651,905 | | $ | 614,235 | |
Non-performing | | | - | | | - | | | - | | | - | | | 1,226 | | | 922 | | | 1,676 | | | 1,821 | | | - | | | - | | | - | | | - | | | 2,902 | | | 2,743 | |
Total | | $ | 191,929 | | $ | 182,655 | | $ | 95,011 | | $ | 107,213 | | $ | 166,600 | | $ | 144,521 | | $ | 160,085 | | $ | 149,389 | | $ | 36,256 | | $ | 30,038 | | $ | 4,926 | | $ | 3,162 | | $ | 654,807 | | $ | 616,978 | |
| | Age Analysis of Past Due Loans | | |||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | |
| | September 30, 2013 | | |||||||||||||||||||
| | 30-59 Days | | 60-89 Days | | Greater than | | Total Past | | Non-accrual | | Current | | Total | | |||||||
| | Past Due | | Past Due | | 90 Days | | Due | | Loans | | Loans | | Loans | | |||||||
| | | | | | | | | | | | | | | | | | | | | | |
| | (In Thousands) | | |||||||||||||||||||
Commercial real estate - owner occupied | | $ | - | | $ | - | | $ | - | | $ | - | | $ | - | | $ | 191,929 | | $ | 191,929 | |
Commercial real estate - non-owner occupied | | | - | | | - | | | - | | | - | | | - | | | 95,011 | | | 95,011 | |
Residential real estate | | | - | | | - | | | - | | | - | | | 1,226 | | | 165,374 | | | 166,600 | |
Commercial | | | - | | | - | | | - | | | - | | | 1,676 | | | 158,409 | | | 160,085 | |
Real estate construction | | | - | | | - | | | - | | | - | | | - | | | 36,256 | | | 36,256 | |
Consumer | | | - | | | - | | | - | | | - | | | - | | | 4,926 | | | 4,926 | |
Total | | $ | - | | $ | - | | $ | - | | $ | - | | $ | 2,902 | | $ | 651,905 | | $ | 654,807 | |
| | December 31, 2012 | | |||||||||||||||||||
| | 30-59 Days | | 60-89 Days | | Greater than | | Total Past | | Non-accrual | | Current | | Total | | |||||||
| | Past Due | | Past Due | | 90 Days | | Due | | Loans | | Loans | | Loans | | |||||||
| | | | | | | | | | | | | | | | | | | | | | |
| | (In Thousands) | | |||||||||||||||||||
Commercial real estate - owner occupied | | $ | - | | $ | - | | $ | - | | $ | - | | $ | - | | $ | 182,655 | | $ | 182,655 | |
Commercial real estate - non-owner occupied | | | - | | | - | | | - | | | - | | | - | | | 107,214 | | | 107,214 | |
Residential real estate | | | - | | | - | | | - | | | - | | | 922 | | | 143,600 | | | 144,522 | |
Commercial | | | - | | | - | | | - | | | - | | | 1,821 | | | 147,568 | | | 149,389 | |
Real estate construction | | | - | | | - | | | - | | | - | | | - | | | 30,038 | | | 30,038 | |
Consumer | | | - | | | - | | | - | | | - | | | - | | | 3,160 | | | 3,160 | |
Total | | $ | - | | $ | - | | $ | - | | $ | - | | $ | 2,743 | | $ | 614,235 | | $ | 616,978 | |
- 17 - | ||
- 18 - | ||
| | Impaired Loans | | ||||||||||||||||
| | September 30, 2013 | | December 31, 2012 | | ||||||||||||||
| | | | | Unpaid | | | | | | | | Unpaid | | | | | ||
| | Recorded | | principal | | Related | | Recorded | | principal | | Related | | ||||||
| | investment | | balance | | allowance | | investment | | balance | | allowance | | ||||||
| | (In Thousands) | | ||||||||||||||||
With no specific related allowance recorded: | | | | | | | | | | | | | | | | | | | |
Commercial real estate - owner occupied | | $ | - | | $ | - | | $ | - | | $ | - | | $ | - | | $ | - | |
Commercial real estate - non-owner occupied | | | - | | | - | | | - | | | - | | | - | | | - | |
Residential real estate | | | 885 | | | 979 | | | - | | | - | | | - | | | - | |
Commercial | | | 1,758 | | | 2,172 | | | - | | | 154 | | | 165 | | | - | |
Real estate construction | | | - | | | - | | | - | | | - | | | - | | | - | |
Consumer | | | - | | | - | | | - | | | - | | | - | | | - | |
With a specific related allowance recorded: | | | | | | | | | | | | | | | | | | | |
Commercial real estate - owner occupied | | | 365 | | | 365 | | | 53 | | | 370 | | | 370 | | | 98 | |
Commercial real estate - non-owner occupied | | | - | | | - | | | - | | | - | | | - | | | - | |
Residential real estate | | | 340 | | | 452 | | | 45 | | | 922 | | | 1,068 | | | 230 | |
Commercial | | | - | | | - | | | - | | | 1,783 | | | 2,099 | | | 277 | |
Real estate construction | | | - | | | - | | | - | | | - | | | - | | | - | |
Consumer | | | - | | | - | | | - | | | - | | | - | | | - | |
Total: | | | | | | | | | | | | | | | | | | | |
Commercial real estate - owner occupied | | | 365 | | | 365 | | | 53 | | | 370 | | | 370 | | | 98 | |
Commercial real estate - non-owner occupied | | | - | | | - | | | - | | | - | | | - | | | - | |
Residential real estate | | | 1,225 | | | 1,431 | | | 45 | | | 922 | | | 1,068 | | | 230 | |
Commercial | | | 1,758 | | | 2,172 | | | - | | | 1,937 | | | 2,264 | | | 277 | |
Real estate construction | | | - | | | - | | | - | | | - | | | - | | | - | |
Consumer | | | - | | | - | | | - | | | - | | | - | | | - | |
| | $ | 3,348 | | $ | 3,968 | | $ | 98 | | $ | 3,229 | | $ | 3,702 | | $ | 605 | |
| | Three Months Ended | | Nine Months Ended | | ||||||||
| | September 30, 2013 | | September 30, 2012 | | September 30, 2013 | | September 30, 2012 | | ||||
| | | | | | | | | | | | | |
| | Average Recorded | | Average Recorded | | Average Recorded | | Average Recorded | | ||||
| | Investment | | Investment | | Investment | | Investment | | ||||
| | | | | | | | | | | | | |
Commercial real estate - owner occupied | | $ | 365 | | $ | - | | $ | 367 | | $ | - | |
Commercial real estate - non-owner occupied | | | - | | | 614 | | | - | | | 1,333 | |
Residential real estate | | | 1,399 | | | 1,970 | | | 1,406 | | | 2,283 | |
Commercial | | | 2,070 | | | 1,050 | | | 2,129 | | | 1,268 | |
Real estate construction | | | - | | | - | | | - | | | - | |
Consumer | | | - | | | - | | | - | | | - | |
Total | | $ | 3,834 | | $ | 3,634 | | $ | 3,902 | | $ | 4,884 | |
- 19 - | ||
| | Commercial | | Mortgage | | | | | | | | Consolidated | | |||
September 30, 2013 | | Banking | | Banking | | Other | | Eliminations | | Totals | | |||||
| | (In Thousands) | | |||||||||||||
Revenues: | | | | | | | | | | | | | | | | |
Interest income | | $ | 8,630 | | $ | 264 | | $ | 2 | | $ | (155) | | $ | 8,741 | |
Gain on sale of loans | | | 926 | | | 2,253 | | | - | | | - | | | 3,179 | |
Other revenues | | | 546 | | | 1,041 | | | 678 | | | (365) | | | 1,900 | |
Total revenues | | | 10,102 | | | 3,558 | | | 680 | | | (520) | | | 13,820 | |
| | | | | | | | | | | | | | | | |
Expenses: | | | | | | | | | | | | | | | | |
Interest expense | | | 833 | | | 54 | | | 98 | | | (155) | | | 830 | |
Salaries and employee benefits | | | 2,774 | | | 2,622 | | | 276 | | | - | | | 5,672 | |
Other expenses | | | 2,127 | | | 932 | | | 721 | | | (365) | | | 3,415 | |
Total operating expenses | | | 5,734 | | | 3,608 | | | 1,095 | | | (520) | | | 9,917 | |
| | | | | | | | | | | | | | | | |
Income (loss) before income taxes | | $ | 4,368 | | $ | (50) | | $ | (415) | | $ | - | | $ | 3,903 | |
| | | | | | | | | | | | | | | | |
Total assets | | $ | 819,143 | | $ | 28,325 | | $ | 9,167 | | $ | (10,071) | | $ | 846,564 | |
| | Commercial | | Mortgage | | | | | | | | Consolidated | | |||
September 30, 2012 | | Banking | | Banking | | Other | | Eliminations | | Totals | | |||||
| | (In Thousands) | | |||||||||||||
Revenues: | | | | | | | | | | | | | | | | |
Interest income | | $ | 8,967 | | $ | 819 | | $ | 3 | | $ | (617) | | $ | 9,172 | |
Gain on sale of loans | | | - | | | 17,479 | | | - | | | - | | | 17,479 | |
Other revenues | | | 687 | | | (5,492) | | | 522 | | | (471) | | | (4,754) | |
Total revenues | | | 9,654 | | | 12,806 | | | 525 | | | (1,088) | | | 21,897 | |
| | | | | | | | | | | | | | | | |
Expenses: | | | | | | | | | | | | | | | | |
Interest expense | | | 1,158 | | | 494 | | | 159 | | | (617) | | | 1,194 | |
Salaries and employee benefits | | | 2,829 | | | 4,887 | | | 301 | | | - | | | 8,017 | |
Other expenses | | | 1,931 | | | 4,107 | | | 629 | | | (471) | | | 6,196 | |
Total operating expenses | | | 5,918 | | | 9,488 | | | 1,089 | | | (1,088) | | | 15,407 | |
| | | | | | | | | | | | | | | | |
Income (loss) before income taxes | | $ | 3,736 | | $ | 3,318 | | $ | (564) | | $ | - | | $ | 6,490 | |
| | | | | | | | | | | | | | | | |
Total assets | | $ | 776,213 | | $ | 89,337 | | $ | 11,007 | | $ | (27,209) | | $ | 849,348 | |
- 20 - | ||
| | Commercial | | Mortgage | | | | | | | | Consolidated | | |||
September 30, 2013 | | Banking | | Banking | | Other | | Eliminations | | Totals | | |||||
| | (In Thousands) | | |||||||||||||
Revenues: | | | | | | | | | | | | | | | | |
Interest income | | $ | 26,528 | | $ | 1,308 | | $ | 9 | | $ | (862) | | $ | 26,983 | |
Gain on sale of loans | | | 926 | | | 17,253 | | | - | | | - | | | 18,179 | |
Other revenues | | | 1,931 | | | 3,199 | | | 1,824 | | | (1,188) | | | 5,766 | |
Total revenues | | | 29,385 | | | 21,760 | | | 1,833 | | | (2,050) | | | 50,928 | |
| | | | | | | | | | | | | | | | |
Expenses: | | | | | | | | | | | | | | | | |
Interest expense | | | 2,836 | | | 556 | | | 401 | | | (862) | | | 2,931 | |
Salaries and employee benefits | | | 8,552 | | | 11,220 | | | 768 | | | - | | | 20,540 | |
Other expenses | | | 5,604 | | | 5,340 | | | 2,204 | | | (1,188) | | | 11,960 | |
Total operating expenses | | | 16,992 | | | 17,116 | | | 3,373 | | | (2,050) | | | 35,431 | |
| | | | | | | | | | | | | | | | |
Income (loss) before income taxes | | $ | 12,393 | | $ | 4,644 | | $ | (1,540) | | $ | - | | $ | 15,497 | |
| | | | | | | | | | | | | | | | |
Total assets | | $ | 819,143 | | $ | 28,325 | | $ | 9,167 | | $ | (10,071) | | $ | 846,564 | |
| | Commercial | | Mortgage | | | | | | | | Consolidated | | |||
September 30, 2012 | | Banking | | Banking | | Other | | Eliminations | | Totals | | |||||
| | (In Thousands) | | |||||||||||||
Revenues: | | | | | | | | | | | | | | | | |
Interest income | | $ | 26,971 | | $ | 2,179 | | $ | 8 | | $ | (1,633) | | $ | 27,525 | |
Gain on sale of loans | | | - | | | 43,161 | | | - | | | - | | | 43,161 | |
Other revenues | | | 2,005 | | | (6,863) | | | 1,651 | | | (1,396) | | | (4,603) | |
Total revenues | | | 28,976 | | | 38,477 | | | 1,659 | | | (3,029) | | | 66,083 | |
| | | | | | | | | | | | | | | | |
Expenses: | | | | | | | | | | | | | | | | |
Interest expense | | | 3,817 | | | 1,287 | | | 476 | | | (1,634) | | | 3,946 | |
Salaries and employee benefits | | | 8,474 | | | 14,433 | | | 919 | | | - | | | 23,826 | |
Other expenses | | | 6,207 | | | 12,892 | | | 2,048 | | | (1,395) | | | 19,752 | |
Total operating expenses | | | 18,498 | | | 28,612 | | | 3,443 | | | (3,029) | | | 47,524 | |
| | | | | | | | | | | | | | | | |
Income (loss) before income taxes | | $ | 10,478 | | $ | 9,865 | | $ | (1,784) | | $ | - | | $ | 18,559 | |
| | | | | | | | | | | | | | | | |
Total assets | | $ | 776,213 | | $ | 89,337 | | $ | 11,007 | | $ | (27,209) | | $ | 849,348 | |
| | Three Months | | Three Months | | ||
| | Ended | | Ended | | ||
| | September 30, 2013 | | September 30, 2012 | | ||
| | (In Thousands, Except for Share and Per Share Data) | | ||||
| | | | | | | |
BASIC EARNINGS PER SHARE: | | | | | | | |
Net income | | $ | 2,805 | | $ | 4,132 | |
Weighted average shares outstanding | | | 10,306,865 | | | 10,271,246 | |
| | | | | | | |
Basic earnings per share | | $ | 0.27 | | $ | 0.40 | |
| | | | | | | |
DILUTED EARNINGS PER SHARE: | | | | | | | |
Net income | | $ | 2,805 | | $ | 4,132 | |
Weighted average shares outstanding | | | 10,306,865 | | | 10,271,246 | |
Dilutive stock options | | | 82,199 | | | 118,195 | |
Weighted average diluted shares outstanding | | | 10,389,064 | | | 10,389,441 | |
| | | | | | | |
Diluted earnings per share | | $ | 0.27 | | $ | 0.40 | |
| | Nine Months | | Nine Months | | ||
| | Ended | | Ended | | ||
| | September 30, 2013 | | September 30, 2012 | | ||
| | (In Thousands, Except for Share and Per Share Data) | | ||||
| | | | | | | |
BASIC EARNINGS PER SHARE: | | | | | | | |
Net income | | $ | 10,013 | | $ | 11,460 | |
Weighted average shares outstanding | | | 10,312,017 | | | 10,236,472 | |
| | | | | | | |
Basic earnings per share | | $ | 0.97 | | $ | 1.12 | |
| | | | | | | |
DILUTED EARNINGS PER SHARE: | | | | | | | |
Net income | | $ | 10,013 | | $ | 11,460 | |
Weighted average shares outstanding | | | 10,312,017 | | | 10,236,472 | |
Dilutive stock options | | | 90,161 | | | 114,361 | |
Weighted average diluted shares outstanding | | | 10,402,178 | | | 10,350,833 | |
| | | | | | | |
Diluted earnings per share | | $ | 0.96 | | $ | 1.11 | |
- 21 - | ||
- 22 - | ||
- 23 - | ||
| | Fair Value Measurement | | ||||||||||
| | at September 30, 2013 Using | | ||||||||||
Description | | Carrying Value | | Quoted Prices in Active Markets for Identical Assets (Level 1) | | Other Observable Inputs (Level 2) | | Significant Unobservable Inputs (Level 3) | | ||||
Financial Assets-Recurring | | (In Thousands) | | ||||||||||
Available-for-sale investment securities | | | | | | | | | | | | | |
US Government agency | | $ | 34,697 | | $ | - | | $ | 34,697 | | $ | - | |
Mortgage backed | | | 26,849 | | | - | | | 26,849 | | | - | |
Corporate bonds | | | 6,003 | | | - | | | 6,003 | | | - | |
Other AFS | | | 3,717 | | | - | | | 3,717 | | | - | |
CRA Mutual fund | | | 1,426 | | | - | | | 1,426 | | | - | |
Total available-for-sale investment securities | | | 72,692 | | | - | | | 72,692 | | | - | |
| | | | | | | | | | | | | |
Residential loans held for sale | | | 16,376 | | | - | | | 16,376 | | | - | |
Derivative assets | | | 640 | | | - | | | - | | | 640 | |
Total Financial Assets-Recurring | | $ | 89,708 | | $ | - | | $ | 89,068 | | $ | 640 | |
| | | | | | | | | | | | | |
Financial Liabilities-Recurring | | | | | | | | | | | | | |
Derivative liabilities | | $ | 667 | | $ | - | | $ | - | | $ | 667 | |
Total Financial Liabilities-Recurring | | $ | 667 | | $ | - | | $ | - | | $ | 667 | |
| | | | | | | | | | | | | |
Financial Assets-Non-Recurring | | | | | | | | | | | | | |
Impaired loans (1) | | $ | 2,902 | | $ | - | | $ | - | | $ | 2,902 | |
Total Financial Assets-Non-Recurring | | $ | 2,902 | | $ | - | | $ | - | | $ | 2,902 | |
- 24 - | ||
| | Fair Value Measurement | | ||||||||||
| | at December 31, 2012 Using | | ||||||||||
Description | | Carrying Value | | Quoted Prices in Active Markets for Identical Assets (Level 1) | | Other Observable Inputs (Level 2) | | Significant Unobservable Inputs (Level 3) | | ||||
Financial Assets-Recurring | | (In Thousands) | | ||||||||||
Available-for-sale investment securities | | | | | | | | | | | | | |
US Government agency | | $ | 15,016 | | $ | - | | $ | 15,016 | | $ | - | |
Mortgage backed | | | 15,177 | | | - | | | 15,177 | | | - | |
Corporate bonds | | | 4,079 | | | - | | | 4,079 | | | - | |
CRA Mutual fund | | | 1,487 | | | - | | | 1,487 | | | - | |
Total available-for-sale investment securities | | | 35,759 | | | - | | | 35,759 | | | - | |
| | | | | | | | | | | | | |
Residential loans held for sale | | | 111,542 | | | - | | | 111,542 | | | - | |
Derivative assets | | | 1,091 | | | - | | | - | | | 1,091 | |
Total Financial Assets-Recurring | | $ | 148,392 | | $ | - | | $ | 147,301 | | $ | 1,091 | |
| | | | | | | | | | | | | |
Financial Liabilities-Recurring | | | | | | | | | | | | | |
Derivative liabilities | | $ | 626 | | $ | - | | $ | - | | $ | 626 | |
Total Financial Liabilities-Recurring | | $ | 626 | | $ | - | | $ | - | | $ | 626 | |
| | | | | | | | | | | | | |
Financial Assets-Non-Recurring | | | | | | | | | | | | | |
Impaired loans (1) | | $ | 3,229 | | $ | - | | $ | - | | $ | 3,229 | |
Total Financial Assets-Non-Recurring | | $ | 3,229 | | $ | - | | $ | - | | $ | 3,229 | |
| | Three Months Ended September 30, | | ||||
| | 2013 | | 2012 | | ||
| | (In Thousands) | | ||||
Balance, beginning of period | | $ | 795 | | $ | 837 | |
Realized and unrealized losses included in earnings | | | (822) | | | (725) | |
Unrealized gains (losses) included in other comprehensive income | | | - | | | - | |
Purchases, settlements, paydowns, and maturities | | | - | | | - | |
Transfer into Level 3 | | | - | | | - | |
Balance, end of period | | $ | (27) | | $ | 112 | |
- 25 - | ||
| | Nine Months Ended September 30, | | ||||
| | 2013 | | 2012 | | ||
| | (In Thousands) | | ||||
Balance, beginning of period | | $ | 465 | | $ | (61) | |
Realized and unrealized gains (losses) included in earnings | | | (492) | | | 173 | |
Unrealized gains (losses) included in other comprehensive income | | | - | | | - | |
Purchases, settlements, paydowns, and maturities | | | - | | | - | |
Transfer into Level 3 | | | - | | | - | |
Balance, end of period | | $ | (27) | | $ | 112 | |
Description | | Fair Value Estimate | | Valuation Techniques | | Unobservable Input | | Range (Weighted Average) | | |
| | (In Thousands) | | |||||||
Financial Assets - Recurring | | | | | | | | | | |
Derivative assets | | $ | 640 | | Market pricing (3) | | Estimated pullthrough | | 75% - 90% | |
Derivative liabilities | | $ | 667 | | Market pricing (3) | | Estimated pullthrough | | 75% - 90% | |
| | | | | | | | | | |
Financial Assets - Non-recurring | | | | | | | | | | |
Impaired loans - Real estate secured | | $ | 1,676 | | Appraisal of collateral (1) | | Liquidation expenses (2) | | 20% - 30% | |
Impaired loans - Non-real estate secured | | $ | 1,226 | | Cash flow basis | | Liquidation expenses (2) | | 10% - 20% | |
(1) | Fair value is generally determined through independent appraisals of the underlying collateral on real estate secured loans, which generally include various level 3 inputs which are not identifiable. |
| |
(2) | Valuations of impaired loans may be adjusted by management for qualitative factors such as liquidation expenses. The range and weighted average of liquidation expense adjustments are presented as a percent of the appraisal. |
| |
(3) | Market pricing on derivative assets and liabilities is adjusted by management for the anticipated percent of derivative assets and liabilities that will create a realized gain or loss. The range and weighted average of estimated pull-through is presented as a percent of the volume. |
- 26 - | ||
(In Thousands) | | Aggregate Fair Value | | Difference | | Contractual Principal | | |||
Residential mortgage loans held for sale | | $ | 16,376 | | $ | 697 | | $ | 15,679 | |
- 27 - | ||
| | September 30, 2013 | | December 31, 2012 | | ||||||||
| | | | | Estimated | | | | | Estimated | | ||
| | Carrying | | Fair | | Carrying | | Fair | | ||||
| | Amount | | Value | | Amount | | Value | | ||||
| | (In Thousands) | | ||||||||||
Financial assets: | | | | ||||||||||
Cash and short-term investments | | $ | 71,777 | | $ | 71,777 | | $ | 37,941 | | $ | 37,941 | |
Securities available-for-sale | | | 72,692 | | | 72,692 | | | 35,759 | | | 35,759 | |
Securities held-to-maturity | | | 15,856 | | | 15,426 | | | 44,952 | | | 45,308 | |
Restricted stock | | | 3,834 | | | 3,834 | | | 4,237 | | | 4,237 | |
Loans, net of allowance | | | 658,158 | | | 654,106 | | | 716,020 | | | 742,255 | |
Derivatives | | | 640 | | | 640 | | | 1,091 | | | 1,091 | |
Total financial assets | | $ | 822,957 | | $ | 818,475 | | $ | 840,000 | | $ | 866,591 | |
| | | | | | | | | | | | | |
Financial liabilities: | | | | | | | | | | | | | |
Deposits | | $ | 675,324 | | $ | 619,718 | | $ | 671,496 | | $ | 650,619 | |
Short-term borrowings | | | 64,030 | | | 64,012 | | | 83,091 | | | 83,515 | |
Subordinated debentures | | | | | | | | | 6,186 | | | 6,187 | |
Derivatives | | | 667 | | | 667 | | | 626 | | | 626 | |
Total financial liabilities | | $ | 740,021 | | $ | 684,397 | | $ | 761,399 | | $ | 740,947 | |
- 28 - | ||
- 29 - | ||
| | Nine Months ended September30, | | Year ended | | |||||
| | 2013 | | 2012 | | December 31, 2012 | | |||
| | (In Thousands) | | | | | ||||
Allowance for losses on mortgage loans sold -beginning of period | | $ | 4,376 | | $ | 2,616 | | $ | 2,616 | |
Provision charged to operating expense | | | 388 | | | 2,186 | | | 2,510 | |
Recoveries | | | - | | | - | | | - | |
Charge-offs | | | (119) | | | - | | | (750) | |
Allowance for losses on mortgage loans sold - end of period | | $ | 4,645 | | $ | 4,802 | | $ | 4,376 | |
- 30 - | ||
| | Access National Corporation | | |||||||
| | Condensed Consolidated Statement of Income | | |||||||
| | Nine Months Ended September 30, 2013 | | |||||||
| | (In Thousands, Except for Share Data) | | |||||||
| | As Reported | | Adjustment for Mortgage Production Branch Closure | | Pro Forma Totals | | |||
Interest and dividend income | | $ | 26,983 | | $ | (1,177) | | $ | 25,806 | |
| | | | | | | | | | |
Interest expense | | | 2,931 | | | - | | | 2,931 | |
| | | | | | | | | | |
Net interest income | | | 24,052 | | | (1,177) | | | 22,875 | |
Provision for loan losses | | | 675 | | | - | | | 675 | |
Net interest income after provision for loan losses | | | 23,377 | | | (1,177) | | | 22,200 | |
| | | | | | | | | | |
Noninterest income | | | 23,946 | | | (3,193) | | | 20,753 | |
| | | | | | | | | | |
Noninterest expense | | | 31,825 | | | (2,557) | | | 29,268 | |
| | | | | | | | | | |
Income before income taxes | | | 15,498 | | | (1,813) | | | 13,685 | |
| | | | | | | | | | |
Provision for income taxes | | | 5,485 | | | (707) | | | 4,778 | |
| | | | | | | | | | |
Net income | | $ | 10,013 | | $ | (1,107) | | $ | 8,906 | |
| | | | | | | | | | |
Earnings per common share: | | | | | | | | | | |
Basic | | $ | 0.97 | | $ | (0.11) | | $ | 0.86 | |
Diluted | | $ | 0.96 | | $ | (0.11) | | $ | 0.85 | |
| | | | | | | | | | |
Average outstanding shares: | | | | | | | | | | |
Basic | | | 10,312,017 | | | - | | | 10,312,017 | |
Diluted | | | 10,402,178 | | | - | | | 10,402,178 | |
- 31 - | ||
| | Access National Corporation | | |||||||
| | Condensed Consolidated Statement of Income | | |||||||
| | Nine Months Ended September 30, 2012 | | |||||||
| | (In Thousands, Except for Share Data) | | |||||||
| | As Reported | | Adjustment for Mortgage Production Branch Closure | | Pro Forma Totals | | |||
Interest and dividend income | | $ | 27,525 | | $ | (855) | | $ | 26,670 | |
| | | | | | | | | | |
Interest expense | | | 3,946 | | | - | | | 3,946 | |
| | | | | | | | | | |
Net interest income | | | 23,579 | | | (855) | | | 22,724 | |
Provision for loan losses | | | 1,340 | | | - | | | 1,340 | |
Net interest income after provision for loan losses | | | 22,239 | | | (855) | | | 21,384 | |
| | | | | | | | | | |
Noninterest income | | | 38,558 | | | (14,212) | | | 24,346 | |
| | | | | | | | | | |
Noninterest expense | | | 42,238 | | | (9,764) | | | 32,474 | |
| | | | | | | | | | |
Income before income taxes | | | 18,559 | | | (5,303) | | | 13,256 | |
| | | | | | | | | | |
Provision for income taxes | | | 7,099 | | | (2,068) | | | 5,031 | |
| | | | | | | | | | |
Net income | | $ | 11,460 | | $ | (3,235) | | $ | 8,225 | |
| | | | | | | | | | |
Earnings per common share: | | | | | | | | | | |
Basic | | $ | 1.12 | | $ | (0.32) | | $ | 0.80 | |
Diluted | | $ | 1.11 | | $ | (0.31) | | $ | 0.80 | |
| | | | | | | | | | |
Average outstanding shares: | | | | | | | | | | |
Basic | | | 10,236,472 | | | - | | | 10,236,472 | |
Diluted | | | 10,350,833 | | | - | | | 10,350,833 | |
- 32 - | ||
- 33 - | ||
- 34 - | ||
- 35 - | ||
- 36 - | ||
- 37 - | ||
- 38 - | ||
| | September 30, 2013 | | December 31, 2012 | | ||
| | (Dollars In Thousands) | | ||||
Non-accrual loans : | | | | | | | |
Commercial real estate - owner occupied | | $ | - | | $ | - | |
Commercial real estate - non-owner occupied | | | - | | | - | |
Residential real estate | | | 1,676 | | | 922 | |
Commercial | | | 1,226 | | | 1,821 | |
Real estate construction | | | - | | | - | |
Consumer | | | - | | | - | |
Total non-accrual loans | | $ | 2,902 | | $ | 2,743 | |
| | | | | | | |
Other real estate owned ("OREO") | | | - | | | - | |
| | | | | | | |
Total non-performing assets | | $ | 2,902 | | $ | 2,743 | |
| | | | | | | |
Restructured loans included above in non-accrual loans | | $ | 942 | | $ | 759 | |
| | | | | | | |
Ratio of non-performing assets to: | | | | | | | |
Total loans plus OREO | | | 0.44 | % | | 0.44 | % |
| | | | | | | |
Total Assets | | | 0.34 | % | | 0.32 | % |
| | | | | | | |
Accruing Past due loans: | | | | | | | |
90 or more days past due | | $ | - | | $ | - | |
- 39 - | ||
- 40 - | ||
| | September 30, | | December 31, | | | | | ||
| | 2013 | | 2012 | | | | | ||
| | (In Thousands) | | | | | ||||
Tier 1 Capital: | | | | | | | | | | |
Common stock | | $ | 8,619 | | $ | 8,615 | | | | |
Capital surplus | | | 16,973 | | | 17,155 | | | | |
Retained earnings | | | 72,324 | | | 65,404 | | | | |
Less: Net unrealized loss on equity securities | | | (48) | | | - | | | | |
Subordinated debentures | | | - | | | 6,000 | | | | |
Less: Dissallowed servicing assets | | | (273) | | | (80) | | | | |
Total Tier 1 capital | | | 97,595 | | | 97,094 | | | | |
| | | | | | | | | | |
Subordinated debentures not included in Tier 1 | | | - | | | - | | | | |
Allowance for loan losses | | | 9,329 | | | 8,664 | | | | |
| | | 9,329 | | | 8,664 | | | | |
| | | | | | | | | | |
Total risk based capital | | $ | 106,924 | | $ | 105,758 | | | | |
| | | | | | | | | | |
Risk weighted assets | | $ | 742,026 | | $ | 688,782 | | | | |
| | | | | | | | | | |
Quarterly average assets | | $ | 830,814 | | $ | 844,256 | | | | |
| | | | | | | | | Regulatory | |
Capital Ratios: | | | | | | | | | Minimum | |
Tier 1 risk based capital ratio | | | 13.15 | % | | 14.10 | % | | 4.00 | % |
Total risk based capital ratio | | | 14.41 | % | | 15.35 | % | | 8.00 | % |
Leverage ratio | | | 11.75 | % | | 11.50 | % | | 4.00 | % |
- 41 - | ||
- 42 - | ||
| | Three Months Ended September 30, | | |||||||
| | 2013 compared to 2012 | | |||||||
| | Change Due To: | | |||||||
| | Increase / | | | | | | | | |
| | (Decrease) | | Volume | | Rate | | |||
| | (In Thousands) | | |||||||
Interest Earning Assets: | | | | | | | | | | |
Investments | | $ | (71) | | $ | (48) | | $ | (23) | |
Loans held for sale | | | (554) | | | (608) | | | 54 | |
Loans | | | 184 | | | 876 | | | (692) | |
Interest-bearing deposits | | | 10 | | | 4 | | | 6 | |
Total increase (decrease) in interest income | | | (431) | | | 224 | | | (655) | |
| | | | | | | | | | |
Interest-Bearing Liabilities: | | | | | | | | | | |
Interest-bearing demand deposits | | | 3 | | | 2 | | | 1 | |
Money market deposit accounts | | | (56) | | | - | | | (56) | |
Time deposits | | | (237) | | | (216) | | | (21) | |
Total interest-bearing deposits | | | (290) | | | (214) | | | (76) | |
FHLB Advances | | | 16 | | | 29 | | | (13) | |
Securities sold under agreements to repurchase | | | (2) | | | (1) | | | (1) | |
Long-term borrowings | | | (28) | | | (14) | | | (14) | |
Subordinated debentures | | | (59) | | | (18) | | | (41) | |
Total increase (decrease) in interest expense | | | (363) | | | (218) | | | (145) | |
| | | | | | | | | | |
Increase (decrease) in net interest income | | $ | (68) | | $ | 442 | | $ | (510) | |
| | Nine Months Ended September 30, | | |||||||
| | 2013 compared to 2012 | | |||||||
| | Change Due To: | | |||||||
| | Increase / | | | | | | | | |
| | (Decrease) | | Volume | | Rate | | |||
| | (In Thousands) | | |||||||
Interest Earning Assets: | | | | | | | | | | |
Investments | | $ | (352) | | $ | (141) | | $ | (211) | |
Loans held for sale | | | (871) | | | (665) | | | (206) | |
Loans | | | 667 | | | 2,505 | | | (1,838) | |
Interest-bearing deposits | | | 14 | | | 16 | | | (2) | |
Total increase (decrease) in interest income | | | (542) | | | 1,715 | | | (2,257) | |
| | | | | | | | | | |
Interest-Bearing Liabilities: | | | | | | | | | | |
Interest-bearing demand deposits | | | (21) | | | 14 | | | (35) | |
Money market deposit accounts | | | (164) | | | (8) | | | (156) | |
Time deposits | | | (561) | | | (216) | | | (345) | |
Total interest-bearing deposits | | | (746) | | | (210) | | | (536) | |
FHLB Advances | | | 3 | | | 40 | | | (37) | |
Securities sold under agreements to repurchase | | | (8) | | | (1) | | | (7) | |
Long-term borrowings | | | (100) | | | (50) | | | (50) | |
FDIC term note | | | (98) | | | (49) | | | (49) | |
Subordinated debentures | | | (66) | | | (50) | | | (16) | |
Total increase (decrease) in interest expense | | | (1,015) | | | (320) | | | (695) | |
| | | | | | | | | | |
Increase (decrease) in net interest income | | $ | 473 | | $ | 2,035 | | $ | (1,562) | |
- 43 - | ||
| | Yield on Average Earning Assets and Rates on Average Interest-Bearing Liabilities | | |||||||||||||||
| | Three Months Ended | | |||||||||||||||
| | September 30, 2013 | | | September 30, 2012 | | ||||||||||||
| | Average | | Income / | | Yield / | | | Average | | Income / | | Yield / | | ||||
| | Balance | | Expense | | Rate | | | Balance | | Expense | | Rate | | ||||
| | (Dollars In Thousands) | | |||||||||||||||
Assets: | | | | | | | | | | | | | | | | | | |
Interest earning assets: | | | | | | | | | | | | | | | | | | |
Securities | | $ | 94,993 | | $ | 457 | | 1.92 | % | | $ | 104,901 | | $ | 528 | | 2.01 | % |
Loans held for sale | | | 26,335 | | | 264 | | 4.01 | % | | | 87,355 | | | 818 | | 3.75 | % |
Loans(1) | | | 655,162 | | | 7,998 | | 4.88 | % | | | 586,060 | | | 7,814 | | 5.33 | % |
Interest-bearing balances and federal funds sold | | | 39,337 | | | 22 | | 0.22 | % | | | 30,303 | | | 12 | | 0.16 | % |
Total interest earning assets | | | 815,827 | | | 8,741 | | 4.29 | % | | | 808,619 | | | 9,172 | | 4.54 | % |
Noninterest earning assets: | | | | | | | | | | | | | | | | | | |
Cash and due from banks | | | 8,602 | | | | | | | | | 12,110 | | | | | | |
Premises, land and equipment | | | 8,433 | | | | | | | | | 8,486 | | | | | | |
Other assets | | | 11,258 | | | | | | | | | 18,018 | | | | | | |
Less: allowance for loan losses | | | (13,033) | | | | | | | | | (12,103) | | | | | | |
Total noninterest earning assets | | | 15,260 | | | | | | | | | 26,511 | | | | | | |
Total Assets | | $ | 831,087 | | | | | | | | $ | 835,130 | | | | | | |
| | | | | | | | | | | | | | | | | | |
Liabilities and Shareholders' Equity: | | | | | | | | | | | | | | | | | | |
Interest-bearing deposits: | | | | | | | | | | | | | | | | | | |
Interest-bearing demand deposits | | $ | 74,105 | | $ | 38 | | 0.21 | % | | $ | 70,637 | | $ | 35 | | 0.20 | % |
Money market deposit accounts | | | 118,330 | | | 59 | | 0.20 | % | | | 118,330 | | | 115 | | 0.39 | % |
Savings accounts | | | 2,341 | | | 1 | | 0.17 | % | | | 2,600 | | | 1 | | 0.15 | % |
Time deposits | | | 258,076 | | | 701 | | 1.09 | % | | | 337,519 | | | 938 | | 1.11 | % |
Total interest-bearing deposits | | | 452,852 | | | 799 | | 0.71 | % | | | 529,086 | | | 1,089 | | 0.82 | % |
Borrowings: | | | | | | | | | | | | | | | | | | |
FHLB Advances | | | 50,000 | | | 27 | | 0.22 | % | | | 5,557 | | | 11 | | 0.79 | % |
Securities sold under agreements to repurchase and federal funds purchased | | | 23,378 | | | 7 | | 0.12 | % | | | 26,946 | | | 9 | | 0.13 | % |
FHLB Long-term borrowings | | | - | | | - | | 0.00 | % | | | 2,949 | | | 28 | | 3.80 | % |
Subordinated Debentures | | | 269 | | | (3) | | -4.46 | % | | | 6,186 | | | 56 | | 3.62 | % |
Total borrowings | | | 73,647 | | | 31 | | 0.17 | % | | | 41,638 | | | 104 | | 1.00 | % |
Total interest-bearing deposits and borrowings | | | 526,499 | | | 830 | | 0.63 | % | | | 570,724 | | | 1,193 | | 0.84 | % |
Noninterest-bearing liabilities: | | | | | | | | | | | | | | | | | | |
Demand deposits | | | 200,881 | | | | | | | | | 160,787 | | | | | | |
Other liabilities | | | 9,171 | | | | | | | | | 11,413 | | | | | | |
Total liabilities | | | 736,551 | | | | | | | | | 742,924 | | | | | | |
Shareholders' Equity | | | 94,536 | | | | | | | | | 92,206 | | | | | | |
Total Liabilities and Shareholders' Equity: | | $ | 831,087 | | | | | | | | $ | 835,130 | | | | | | |
| | | | | | | | | | | | | | | | | | |
Interest Spread(2) | | | | | | | | 3.66 | % | | | | | | | | 3.70 | % |
| | | | | | | | | | | | | | | | | | |
Net Interest Margin(3) | | | | | $ | 7,911 | | 3.88 | % | | | | | $ | 7,979 | | 3.95 | % |
- 44 - | ||
| | Yield on Average Earning Assets and Rates on Average Interest-Bearing Liabilities | | |||||||||||||||||
| | Nine Months Ended | | |||||||||||||||||
| | September 30, 2013 | | | September 30, 2012 | | ||||||||||||||
| | Average | | Income / | | Yield / | | | Average | | Income / | | Yield / | | ||||||
| | Balance | | Expense | | Rate | | | Balance | | Expense | | Rate | | ||||||
| | (Dollars In Thousands) | | |||||||||||||||||
Assets: | | | | | | | | | | | | | | | | | | | | |
Interest earning assets: | | | | | | | | | | | | | | | | | | | | |
Securities | | $ | 98,640 | | $ | 1,439 | | | 1.95 | % | | $ | 107,545 | | $ | 1,791 | | | 2.22 | % |
Loans held for sale | | | 50,128 | | | 1,308 | | | 3.48 | % | | | 74,929 | | | 2,179 | | | 3.88 | % |
Loans(1) | | | 642,543 | | | 24,160 | | | 5.01 | % | | | 578,014 | | | 23,493 | | | 5.42 | % |
Interest-bearing balances and federal funds sold | | | 45,456 | | | 76 | | | 0.22 | % | | | 36,108 | | | 62 | | | 0.23 | % |
Total interest earning assets | | | 836,767 | | | 26,983 | | | 4.30 | % | | | 796,596 | | | 27,525 | | | 4.61 | % |
Noninterest earning assets: | | | | | | | | | | | | | | | | | | | | |
Cash and due from banks | | | 10,629 | | | | | | | | | | 10,159 | | | | | | | |
Premises, land and equipment | | | 8,491 | | | | | | | | | | 8,563 | | | | | | | |
Other assets | | | 13,456 | | | | | | | | | | 16,926 | | | | | | | |
Less: allowance for loan losses | | | (12,860) | | | | | | | | | | (11,952) | | | | | | | |
Total noninterest earning assets | | | 19,716 | | | | | | | | | | 23,696 | | | | | | | |
Total Assets | | $ | 856,483 | | | | | | | | | $ | 820,292 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Liabilities and Shareholders' Equity: | | | | | | | | | | | | | | | | | | | | |
Interest-bearing deposits: | | | | | | | | | | | | | | | | | | | | |
Interest-bearing demand deposits | | $ | 73,751 | | $ | 105 | | | 0.19 | % | | $ | 65,805 | | $ | 126 | | | 0.26 | % |
Money market deposit accounts | | | 119,906 | | | 221 | | | 0.25 | % | | | 122,543 | | | 385 | | | 0.42 | % |
Savings accounts | | | 2,428 | | | 3 | | | 0.16 | % | | | 2,612 | | | 3 | | | 0.15 | % |
Time deposits | | | 315,924 | | | 2,437 | | | 1.03 | % | | | 341,732 | | | 2,998 | | | 1.17 | % |
Total interest-bearing deposits | | | 512,009 | | | 2,766 | | | 0.72 | % | | | 532,692 | | | 3,512 | | | 0.88 | % |
Borrowings: | | | | | | | | | | | | | | | | | | | | |
FHLB Advances | | | 24,187 | | | 42 | | | 0.23 | % | | | 8,023 | | | 39 | | | 0.65 | % |
Securities sold under agreements to repurchase and federal funds purchased | | | 25,652 | | | 20 | | | 0.10 | % | | | 26,717 | | | 28 | | | 0.14 | % |
FHLB Long-term borrowings | | | - | | | - | | | 0.00 | % | | | 3,649 | | | 100 | | | 3.65 | % |
FDIC Term Note | | | - | | | - | | | 0.00 | % | | | 4,818 | | | 98 | | | 2.71 | % |
Subordinated Debentures | | | 4,192 | | | 103 | | | 3.28 | % | | | 6,186 | | | 169 | | | 3.64 | % |
Total borrowings | | | 54,031 | | | 165 | | | 0.41 | % | | | 49,393 | | | 434 | | | 1.17 | % |
Total interest-bearing deposits and borrowings | | | 566,040 | | | 2,931 | | | 0.69 | % | | | 582,085 | | | 3,946 | | | 0.90 | % |
Noninterest-bearing liabilities: | | | | | | | | | | | | | | | | | | | | |
Demand deposits | | | 187,067 | | | | | | | | | | 136,614 | | | | | | | |
Other liabilities | | | 9,500 | | | | | | | | | | 12,696 | | | | | | | |
Total liabilities | | | 762,607 | | | | | | | | | | 731,395 | | | | | | | |
Shareholders' Equity | | | 93,876 | | | | | | | | | | 88,897 | | | | | | | |
Total Liabilities and Shareholders' Equity: | | $ | 856,483 | | | | | | | | | $ | 820,292 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Interest Spread(2) | | | | | | | | | 3.61 | % | | | | | | | | | 3.70 | % |
| | | | | | | | | | | | | | | | | | | | |
Net Interest Margin(3) | | | | | $ | 24,052 | | | 3.83 | % | | | | | $ | 23,579 | | | 3.95 | % |
- 45 - | ||
- 46 - | ||
| | Nine Months Ended September 30, | | ||||
| | 2013 | | 2012 | | ||
| | (In Thousands) | | ||||
| | | | | | | |
Management fees | | $ | 1,535 | | $ | 4,282 | |
Advertising and promotional | | | 1,064 | | | 2,433 | |
Investor fees | | | 685 | | | 941 | |
Business and franchise tax | | | 628 | | | 548 | |
Data processing | | | 525 | | | 462 | |
Accounting and auditing | | | 459 | | | 459 | |
Consulting fees | | | 440 | | | 389 | |
Provision for losses on mortgage loans sold | | | 388 | | | 2,186 | |
FDIC insurance | | | 335 | | | 261 | |
Director fees | | | 260 | | | 220 | |
Credit report | | | 248 | | | 317 | |
Telephone | | | 223 | | | 167 | |
Publication and subscription | | | 221 | | | 201 | |
Office supplies-stationary print | | | 188 | | | 192 | |
SBA guarantee fee | | | 166 | | | 144 | |
Regulatory examinations | | | 156 | | | 141 | |
Legal fees | | | 151 | | | 175 | |
Stock option expense | | | 150 | | | 186 | |
Disaster recovery expense | | | 137 | | | 127 | |
Early payoff expense | | | 124 | | | 54 | |
Verification fees | | | 104 | | | 174 | |
Education and training | | | 82 | | | 138 | |
Freight and express | | | 71 | | | 11 | |
Appraisal fees | | | 46 | | | 140 | |
Postage | | | 36 | | | 111 | |
Other | | | 902 | | | 2,012 | |
| | $ | 9,324 | | $ | 16,471 | |
- 47 - | ||
| | September 30, 2013 | | December 31, 2012 | | ||
| | (Dollars In Thousands) | | ||||
Borrowings: | | | | | | | |
FHLB advances | | $ | 40,000 | | $ | 45,000 | |
Securities sold under agreements to repurchase and federal funds purchased | | | 24,030 | | | 38,091 | |
Subordinated debentures | | | - | | | 6,186 | |
Total at period end | | $ | 64,030 | | $ | 89,277 | |
| | Nine Months Ended | | | Year Ended | | ||
| | September 30, 2013 | | | December 31, 2012 | | ||
| | (Dollars In Thousands) | | |||||
Borrowings: | | | | | | | | |
Average Balances | | | | | | | | |
FHLB advances | | $ | 24,187 | | | $ | 11,141 | |
FHLB long-term borrowings | | | - | | | | 3,015 | |
Securities sold under agreements to repurchase and federal funds purchased | | | 25,652 | | | | 26,744 | |
Subordinated debentures | | | 4,192 | | | | 6,186 | |
FDIC term note | | | - | | | | 3,607 | |
Total average balance | | $ | 54,031 | | | $ | 50,693 | |
| | | | | | | | |
Average rate paid on all borrowed funds | | | 0.61 | % | | | 1.25 | % |
- 48 - | ||
Increase in Federal Funds Target Rate | | Hypothetical Percentage Change in Earnings September 30, 2013 | | Hypothetical Percentage Change in Earnings December 31, 2012 | |
3.00% | | 15.90% | | 15.35% | |
2.00% | | 10.59% | | 10.03% | |
1.00% | | 4.97% | | 4.46% | |
- 49 - | ||
- 50 - | ||
- 51 - | ||
| | Issuer Purchases of Equity Securities | | ||||||||||
| | | | | | | | (c) Total Number of | | (d) Maximum Number | | ||
| | | | | | | | Shares Purchased as | | of Shares that may | | ||
| | (a) Total Number of | | (b) Average Price | | Part of Publicly | | yet be Purchased | | ||||
Period | | Shares Purchased | | Paid Per Share | | Announced Plan | | Under the Plan | | ||||
July 1 - July 31, 2013 | | | - | | $ | - | | | - | | | 768,781 | |
August 1 - August 31, 2013 | | | - | | | - | | | - | | | 768,781 | |
September 1 - September 30, 2013 | | | - | | | - | | | - | | | 768,781 | |
| | | - | | $ | - | | | - | | | 768,781 | |
- 52 - | ||
| Exhibit No. | | Description |
| | | |
| 3.1 | | Amended and Restated Articles of Incorporation of Access National Corporation (incorporated by reference to Exhibit 3.1 to Form 8-K filed July 18, 2006 (file number 000-49929)) |
| | | |
| 3.1.1 | | Articles of Amendment to Amended and Restated Articles of Incorporation of Access National Corporation (incorporated by reference to Exhibit 3.1.1 to Form 10-Q filed August 15, 2011 (file number 000-49929)) |
| | | |
| 3.2 | | Amended and Restated Bylaws of Access National Corporation (incorporated by reference to Exhibit 3.2 to Form 8-K filed October 24, 2007 (file number 000-49929)) |
| | | |
| 4.0 | | Certain instruments relating to long-term debt as to which the total amount of securities authorized thereunder does not exceed 10% of Access National Corporation’s total assets have been omitted in accordance with Item 601(b)(4)(iii) of Regulation S-K. The registrant will furnish a copy of any such instrument to the Securities and Exchange Commission upon its request. |
| | | |
| 10.11+ | | Termination Agreement between Access National Bank and Charles Wimer, dated as of June 4, 2012 (incorporated by reference to Exhibit 10.11 to Form 10-Q filed August 14, 2012 (file number 000-49929)) |
| | | |
| 10.12+ | | Termination Agreement between Access National Bank and Dean Hackemer, dated as of March 14, 2013 (incorporated by reference to Exhibit 10.12 to Form 10-K filed March 18, 2013 (file number 000-49929)) |
| | | |
| 10.13+ | | Employment Agreement between Access National Bank and Michael W. Clarke (incorporated by reference to Exhibit 10.13 to Form 10-K filed March 18, 2013 (file number 000-49929)) |
| | | |
| 10.14+ | | Employment Agreement between Access National Bank and Robert C. Shoemaker (incorporated by reference to Exhibit 10.14 to Form 10-K filed March 18, 2013 (file number 000-49929)) |
| | | |
| 10.15+ | | Employment Agreement between Access National Bank and Dean Hackemer (incorporated by reference to Exhibit 10.15 to Form 10-K filed March 18, 2013 (file number 000-49929)) |
| | | |
| 10.16+ | | Employment Agreement between Access National Bank and Margaret M. Taylor (incorporated by reference to Exhibit 10.16 to Form 10-Q filed May 10, 2013 (file number 000-49929)) |
| | | |
| 31.1* | | CEO Certification Pursuant to Rule 13a-14(a) |
| | | |
| 31.2* | | CFO Certification Pursuant to Rule 13a-14(a) |
| | | |
| 32* | | CEO/CFO Certification Pursuant to § 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. § 1350) |
| | | |
| 101* | | The following materials from Access National Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2013 formatted in XBRL (Extensible Business Reporting Language), filed herewith: (i) Consolidated Balance Sheets (unaudited), (ii) Consolidated Statements of Income (unaudited), (iii) Consolidated Statements of Comprehensive Income (unaudited), (iv) Consolidated Statements of Changes in Shareholders’ Equity (unaudited), (v) Consolidated Statements of Cash Flows (unaudited), and (vi) Notes to Consolidated Financial Statements (unaudited). |
- 53 - | ||
| 101.INS* | | XBRL Instance Document |
| | | |
| 101.SCH* | | XBRL Taxonomy Extension Schema |
| | | |
| 101.CAL* | | XBRL Taxonomy Extension Calculation Linkbase |
| | | |
| 101.DEF* | | XBRL Taxonomy Extension Definition Linkbase |
| | | |
| 101.LAB* | | XBRL Taxonomy Extension Label Linkbase |
| | | |
| 101.PRE* | | XBRL Taxonomy Extension Presentation Linkbase |
- 54 - | ||
| | Access National Corporation |
| | (Registrant) |
| | |
Date: November 8, 2013 | By: | /s/ Michael W. Clarke |
| | Michael W. Clarke |
| | President and Chief Executive Officer |
| | (Principal Executive Officer) |
| | |
Date: November 8, 2013 | By: | /s/ Margaret M. Taylor |
| | Margaret M. Taylor |
| | Senior Vice President and Chief Financial Officer |
| | (Principal Financial & Accounting Officer) |
- 55 - | ||