| First Defiance Financial Corp. | |
(Exact name of registrant as specified in its charter) |
Ohio | | 34-1803915 |
(State or other jurisdiction of | | (I.R.S. Employer |
incorporation or organization) | | Identification Number) |
601 Clinton Street, Defiance, Ohio | | 43512 |
(Address of principal executive office) | | (Zip Code) |
| Large accelerated filer ¨ | Accelerated filer x |
| Non-accelerated filer ¨ | Smaller reporting company ¨ |
| | Page Number |
PART I-FINANCIAL INFORMATION | | |
| | |
Item 1. | Consolidated Condensed Financial Statements (Unaudited): Consolidated Condensed Statements of Financial Condition September 30, 2013 and December 31, 2012 | 2 |
| | |
| Consolidated Condensed Statements of Income - Three and nine months ended September 30, 2013 and 2012 | 4 |
| | |
| Consolidated Condensed Statements of Comprehensive Income Three and nine months ended September 30, 2013 and 2012 | 5 |
| | |
| Consolidated Condensed Statements of Changes in Stockholders’ Equity Nine months ended September 30, 2013 and 2012 | 6 |
| | |
| Consolidated Condensed Statements of Cash Flows - Nine months ended September 30, 2013 and 2012 | 7 |
| | |
| Notes to Consolidated Condensed Financial Statements | 8 |
| | |
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | 50 |
| | |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 72 |
| | |
Item 4. | Controls and Procedures | 73 |
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PART II-OTHER INFORMATION | | |
| | |
Item 1. | Legal Proceedings | 74 |
| | |
Item 1A. | Risk Factors | 74 |
| | |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 74 |
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Item 3. | Defaults Upon Senior Securities | 74 |
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Item 4. | Mine Safety Disclosures | 74 |
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Item 5. | Other Information | 74 |
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Item 6. | Exhibits | 74 |
| | |
| Signatures | 75 |
1 | ||
FIRST DEFIANCE FINANCIAL CORP. |
Consolidated Condensed Statements of Financial Condition |
(UNAUDITED) |
(Amounts in Thousands, except per share data) |
|
| | September 30, 2013 | | December 31, 2012 | | ||
Assets | | | | | | | |
Cash and cash equivalents: | | | | | | | |
Cash and amounts due from depository institutions | | $ | 42,629 | | $ | 45,832 | |
Federal funds sold | | | 85,000 | | | 91,000 | |
| | | 127,629 | | | 136,832 | |
Securities: | | | | | | | |
Available-for-sale, carried at fair value | | | 184,119 | | | 194,101 | |
Held-to-maturity, carried at amortized cost (fair value $413 and $516 at September 30, 2013 and December 31, 2012, respectively) | | | 407 | | | 508 | |
| | | 184,526 | | | 194,609 | |
Loans held for sale | | | 13,391 | | | 22,064 | |
Loans receivable, net of allowance of $25,964 at September 30, 2013 and $26,711 at December 31, 2012, respectively | | | 1,535,315 | | | 1,498,546 | |
Accrued interest receivable | | | 6,425 | | | 5,594 | |
Federal Home Loan Bank stock | | | 19,350 | | | 20,655 | |
Bank owned life insurance | | | 42,504 | | | 41,832 | |
Premises and equipment | | | 39,066 | | | 39,663 | |
Real estate and other assets held for sale | | | 5,518 | | | 3,805 | |
Goodwill | | | 61,525 | | | 61,525 | |
Core deposit and other intangibles | | | 3,793 | | | 4,738 | |
Mortgage servicing rights | | | 9,182 | | | 7,833 | |
Deferred taxes | | | 2,253 | | | 78 | |
Other assets | | | 7,953 | | | 9,174 | |
Total assets | | $ | 2,058,430 | | $ | 2,046,948 | |
2 | ||
FIRST DEFIANCE FINANCIAL CORP. |
Consolidated Condensed Statements of Financial Condition |
(UNAUDITED) |
(Amounts in Thousands, except per share data) |
|
| | September 30, 2013 | | December 31, 2012 | | ||
Liabilities and stockholders’ equity | | | | | | | |
Liabilities: | | | | | | | |
Deposits | | $ | 1,658,492 | | $ | 1,667,472 | |
Advances from the Federal Home Loan Bank | | | 22,761 | | | 12,796 | |
Subordinated debentures | | | 36,083 | | | 36,083 | |
Securities sold under repurchase agreements | | | 50,822 | | | 51,702 | |
Advance payments by borrowers | | | 1,752 | | | 1,473 | |
Other liabilities | | | 19,161 | | | 19,294 | |
Total liabilities | | | 1,789,071 | | | 1,788,820 | |
| | | | | | | |
Stockholders’ equity: | | | | | | | |
| | | | | | | |
Preferred stock, $.01 par value per share: | | | | | | | |
5,000,000 shares authorized; no shares issued | | | | | | | |
Common stock, $.01 par value per share: | | | | | | | |
25,000,000 shares authorized; 12,735,313 and 12,739,496 shares issued and 9,784,737 and 9,729,466 shares outstanding, respectively | | | 127 | | | 127 | |
Common stock warrant | | | 878 | | | 878 | |
Additional paid-in capital | | | 136,257 | | | 136,046 | |
Accumulated other comprehensive income, net of tax of $152 and $2,301, respectively | | | 282 | | | 4,274 | |
Retained earnings | | | 178,181 | | | 164,103 | |
Treasury stock, at cost, 2,950,576 and 3,010,030 shares respectively | | | (46,366) | | | (47,300) | |
Total stockholders’ equity | | | 269,359 | | | 258,128 | |
| | | | | | | |
Total liabilities and stockholders’ equity | | $ | 2,058,430 | | $ | 2,046,948 | |
3 | ||
FIRST DEFIANCE FINANCIAL CORP. |
Consolidated Condensed Statements of Income |
(UNAUDITED) |
(Amounts in Thousands, except per share data) |
|
| | Three Months Ended | | Nine Months Ended | | ||||||||
| | September 30, | | September 30, | | ||||||||
| | 2013 | | 2012 | | 2013 | | 2012 | | ||||
Interest Income | | | | | | | | | | | | | |
Loans | | $ | 17,197 | | $ | 18,000 | | $ | 51,040 | | $ | 54,847 | |
Investment securities: | | | | | | | | | | | | | |
Taxable | | | 667 | | | 1,093 | | | 2,019 | | | 3,473 | |
Non-taxable | | | 723 | | | 749 | | | 2,180 | | | 2,146 | |
Interest-bearing deposits | | | 44 | | | 43 | | | 174 | | | 249 | |
FHLB stock dividends | | | 205 | | | 213 | | | 631 | | | 656 | |
Total interest income | | | 18,836 | | | 20,098 | | | 56,044 | | | 61,371 | |
Interest Expense | | | | | | | | | | | | | |
Deposits | | | 1,356 | | | 1,909 | | | 4,514 | | | 6,394 | |
FHLB advances and other | | | 116 | | | 759 | | | 298 | | | 2,260 | |
Subordinated debentures | | | 150 | | | 172 | | | 452 | | | 813 | |
Notes payable | | | 58 | | | 83 | | | 178 | | | 284 | |
Total interest expense | | | 1,680 | | | 2,923 | | | 5,442 | | | 9,751 | |
Net interest income | | | 17,156 | | | 17,175 | | | 50,602 | | | 51,620 | |
Provision for loan losses | | | 476 | | | 705 | | | 1,349 | | | 8,306 | |
Net interest income after provision for loan losses | | | 16,680 | | | 16,470 | | | 49,253 | | | 43,314 | |
Non-interest Income | | | | | | | | | | | | | |
Service fees and other charges | | | 2,605 | | | 2,790 | | | 7,539 | | | 8,148 | |
Insurance and investment commission income | | | 2,225 | | | 1,952 | | | 7,538 | | | 6,679 | |
Mortgage banking income | | | 1,846 | | | 2,220 | | | 7,119 | | | 6,924 | |
Gain on sale of non-mortgage loans | | | 35 | | | 8 | | | 52 | | | 50 | |
Gain on sale or call of securities | | | - | | | 103 | | | 97 | | | 528 | |
Trust income | | | 196 | | | 147 | | | 545 | | | 470 | |
Income from bank owned life insurance | | | 212 | | | 244 | | | 672 | | | 683 | |
Other non-interest income | | | 170 | | | 316 | | | 535 | | | 712 | |
Total non-interest income | | | 7,289 | | | 7,780 | | | 24,097 | | | 24,194 | |
Non-interest Expense | | | | | | | | | | | | | |
Compensation and benefits | | | 8,718 | | | 8,245 | | | 25,991 | | | 24,760 | |
Occupancy | | | 1,739 | | | 2,170 | | | 5,087 | | | 5,718 | |
FDIC insurance premium | | | 326 | | | 691 | | | 1,257 | | | 2,031 | |
State franchise tax | | | 580 | | | 623 | | | 1,837 | | | 1,649 | |
Data processing | | | 1,318 | | | 1,140 | | | 3,812 | | | 3,477 | |
Amortization of intangibles | | | 296 | | | 344 | | | 945 | | | 1,068 | |
Other non-interest expense | | | 3,068 | | | 3,237 | | | 9,987 | | | 9,538 | |
Total non-interest expense | | | 16,045 | | | 16,450 | | | 48,916 | | | 48,241 | |
Income before income taxes | | | 7,924 | | | 7,800 | | | 24,434 | | | 19,267 | |
Federal income taxes | | | 2,445 | | | 2,366 | | | 7,286 | | | 5,759 | |
Net Income | | $ | 5,479 | | $ | 5,434 | | $ | 17,148 | | $ | 13,508 | |
| | | | | | | | | | | | | |
Dividends accrued on preferred shares | | $ | - | | $ | (3) | | $ | - | | $ | (900) | |
Accretion on preferred shares | | $ | - | | $ | (8) | | $ | - | | $ | (359) | |
Redemption of preferred shares | | $ | - | | $ | - | | $ | - | | $ | 642 | |
Net income applicable to common shares | | $ | 5,479 | | $ | 5,423 | | $ | 17,148 | | $ | 12,891 | |
| | | | | | | | | | | | | |
Earnings per common share (Note 6) | | | | | | | | | | | | | |
Basic | | $ | 0.56 | | $ | 0.56 | | $ | 1.76 | | $ | 1.33 | |
Diluted | | $ | 0.54 | | $ | 0.54 | | $ | 1.69 | | $ | 1.29 | |
Dividends declared per share (Note 5) | | $ | 0.10 | | $ | 0.05 | | $ | 0.30 | | $ | 0.15 | |
Average common shares outstanding (Note 6) | | | | | | | | | | | | | |
Basic | | | 9,780 | | | 9,729 | | | 9,763 | | | 9,728 | |
Diluted | | | 10,212 | | | 10,000 | | | 10,160 | | | 9,993 | |
4 | ||
FIRST DEFIANCE FINANCIAL CORP. |
Consolidated Condensed Statements of Comprehensive Income |
(UNAUDITED) |
(Amounts in Thousands) |
|
| | Three Months Ended | | Nine Months Ended | | ||||||||
| | September 30, | | September 30, | | ||||||||
| | 2013 | | 2012 | | 2013 | | 2012 | | ||||
Net Income | | $ | 5,479 | | $ | 5,434 | | $ | 17,148 | | $ | 13,508 | |
| | | | | | | | | | | | | |
Other comprehensive income: | | | | | | | | | | | | | |
Unrealized gains (losses) on securities available for sale | | | 120 | | | 1,953 | | | (6,044) | | | 3,397 | |
Reclassification adjustment for security (gains) losses | | | | | | | | | | | | | |
included in net income(1) | | | - | | | (103) | | | (97) | | | (528) | |
Income tax | | | (42) | | | (647) | | | 2,149 | | | (1,003) | |
Other comprehensive income (loss) | | | 78 | | | 1,203 | | | (3,992) | | | 1,866 | |
| | | | | | | | | | | | | |
Comprehensive income | | $ | 5,557 | | $ | 6,637 | | $ | 13,156 | | $ | 15,374 | |
5 | ||
FIRST DEFIANCE FINANCIAL CORP. |
Consolidated Condensed Statements of Changes in Stockholders’ Equity |
(UNAUDITED) |
(Amounts in Thousands) |
|
| | | | | | | | | | | | | | Accumulated | | | | | | | | | | | |
| | | | | | | | Common | | Additional | | Other | | | | | | | | Total | | ||||
| | Preferred | | Common | | Stock | | Paid-In | | Comprehensive | | Retained | | Treasury | | Stockholders’ | | ||||||||
| | Stock | | Stock | | Warrant | | Capital | | Income (Loss) | | Earnings | | Stock | | Equity | | ||||||||
Balance at January 1, 2013 | | $ | - | | $ | 127 | | $ | 878 | | $ | 136,046 | | $ | 4,274 | | $ | 164,103 | | $ | (47,300) | | $ | 258,128 | |
Net income | | | - | | | - | | | - | | | - | | | - | | | 17,148 | | | - | | | 17,148 | |
Other comprehensive loss | | | - | | | - | | | - | | | - | | | (3,992) | | | - | | | - | | | (3,992) | |
Stock option expense | | | - | | | - | | | - | | | 35 | | | - | | | - | | | - | | | 35 | |
20,707 shares issued under stock option plan with no income tax benefit, net of repurchases | | | - | | | - | | | - | | | (21) | | | - | | | (97) | | | 390 | | | 272 | |
Restricted share activity under Stock Incentive Plans including 31,796 shares issued | | | - | | | - | | | - | | | 177 | | | - | | | (45) | | | 500 | | | 632 | |
2,768 shares issued direct purchases | | | - | | | - | | | - | | | 20 | | | - | | | - | | | 44 | | | 64 | |
Common stock dividends declared | | | - | | | - | | | - | | | - | | | - | | | (2,928) | | | - | | | (2,928) | |
Balance at September 30, 2013 | | $ | - | | $ | 127 | | $ | 878 | | $ | 136,257 | | $ | 282 | | $ | 178,181 | | $ | (46,366) | | $ | 269,359 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Balance at January 1, 2012 | | $ | 36,641 | | $ | 127 | | $ | 878 | | $ | 135,825 | | $ | 3,997 | | $ | 148,010 | | $ | (47,351) | | $ | 278,127 | |
Net income | | | - | | | - | | | - | | | - | | | - | | | 13,508 | | | - | | | 13,508 | |
Change in net unrealized gains and losses on available-for-sale securities | | | | | | | | | | | | | | | 1,866 | | | | | | | | | 1,866 | |
Stock option expense | | | - | | | - | | | - | | | 82 | | | - | | | - | | | - | | | 82 | |
500 shares issued under stock option plan, with no income tax benefit | | | - | | | - | | | - | | | - | | | - | | | (4) | | | 8 | | | 4 | |
Restricted share activity under Stock Incentive Plans | | | - | | | - | | | - | | | 230 | | | - | | | - | | | 30 | | | 260 | |
637 shares issued direct purchases | | | - | | | - | | | - | | | 1 | | | - | | | - | | | 10 | | | 11 | |
Preferred Stock Dividends accrued | | | - | | | - | | | - | | | - | | | - | | | (900) | | | - | | | (900) | |
Accretion on preferred shares | | | 359 | | | - | | | - | | | - | | | - | | | (359) | | | - | | | - | |
16,560 shares purchased in U.S. Treasury auction | | | (16,560) | | | - | | | - | | | - | | | - | | | 618 | | | - | | | (15,942) | |
20,440 shares purchased in open market | | | (20,440) | | | - | | | - | | | - | | | - | | | 24 | | | - | | | (20,416) | |
Common stock dividends declared | | | - | | | - | | | - | | | - | | | - | | | (1,464) | | | - | | | (1,464) | |
Balance at September 30, 2012 | | $ | - | | $ | 127 | | $ | 878 | | $ | 136,138 | | $ | 5,863 | | $ | 159,433 | | $ | (47,303) | | $ | 255,136 | |
6 | ||
FIRST DEFIANCE FINANCIAL CORP. |
Consolidated Condensed Statements of Cash Flows |
(UNAUDITED) |
(Amounts in Thousands) |
|
| | Nine Months Ended | | ||||
| | September 30, | | ||||
| | 2013 | | 2012 | | ||
Operating Activities | | | | | | | |
Net income | | $ | 17,148 | | $ | 13,508 | |
Items not requiring (providing) cash | | | | | | | |
Provision for loan losses | | | 1,349 | | | 8,306 | |
Depreciation | | | 2,356 | | | 2,552 | |
Amortization of mortgage servicing rights, net of valuation adjustments | | | 487 | | | 3,465 | |
Amortization of core deposit and other intangible assets | | | 945 | | | 1,068 | |
Net amortization of premiums and discounts on loans and deposits | | | 570 | | | 516 | |
Amortization of premiums and discounts on securities | | | 401 | | | 621 | |
Loss on sale or disposals of property, plant and equipment | | | 1 | | | 43 | |
Change in deferred taxes | | | (27) | | | 1,104 | |
Proceeds from the sale of loans held for sale | | | 271,413 | | | 381,875 | |
Originations of loans held for sale | | | (259,616) | | | (374,872) | |
Gain from sale of loans | | | (5,012) | | | (7,940) | |
Gain from sale or call of securities | | | (97) | | | (528) | |
Loss on sale or write-down of real estate and other assets held for sale | | | 418 | | | 302 | |
Stock option expense | | | 35 | | | 82 | |
Restricted stock expense | | | 632 | | | 260 | |
Income from bank-owned life insurance | | | (672) | | | (683) | |
Changes in: | | | | | | | |
Accrued interest receivable | | | (831) | | | (677) | |
Other assets | | | 1,221 | | | (325) | |
Other liabilities | | | (133) | | | 4,873 | |
Net cash provided by operating activities | | | 30,588 | | | 33,550 | |
| | | | | | | |
Investing Activities | | | | | | | |
Proceeds from maturities of held-to-maturity securities | | | 100 | | | 76 | |
Proceeds from maturities, calls and pay-downs of available-for-sale securities | | | 30,258 | | | 49,571 | |
Proceeds from sale of real estate and other assets held for sale | | | 2,696 | | | 2,901 | |
Proceeds from the sale of available-for-sale securities | | | 4,027 | | | 8,538 | |
Proceeds from sale of non-mortgage loans | | | 11,648 | | | 371 | |
Purchases of available-for-sale securities | | | (30,746) | | | (91,513) | |
Proceeds from Federal Home Loan Bank stock redemption | | | 1,305 | | | - | |
Purchase of bank-owned life insurance | | | - | | | (5,000) | |
Purchases of portfolio mortgage loans | | | (4,545) | | | - | |
Purchases of premises and equipment, net | | | (1,760) | | | (2,874) | |
Net increase in loans receivable | | | (50,568) | | | (43,572) | |
Net cash used in by investing activities | | | (37,585) | | | (81,502) | |
| | | | | | | |
Financing Activities | | | | | | | |
Net increase (decrease) in deposits and advance payments by borrowers | | | (8,699) | | | 12,689 | |
Repayment of Federal Home Loan Bank advances | | | (35) | | | (34) | |
Increase in Federal Home Loan Bank short-term advances | | | 10,000 | | | - | |
Decrease in securities sold under repurchase agreements | | | (880) | | | (8,395) | |
Cash paid for redemption of preferred stock | | | - | | | (36,358) | |
Proceeds from exercise of stock options | | | 272 | | | 4 | |
Proceeds from treasury stock sales | | | 64 | | | 11 | |
Cash dividends paid on common stock | | | (2,928) | | | (1,464) | |
Cash dividends paid on preferred stock | | | - | | | (1,026) | |
Net cash used in financing activities | | | (2,206) | | | (34,573) | |
Decrease in cash and cash equivalents | | | (9,203) | | | (82,525) | |
Cash and cash equivalents at beginning of period | | | 136,832 | | | 174,931 | |
Cash and cash equivalents at end of period | | $ | 127,629 | | $ | 92,406 | |
| | | | | | | |
Supplemental cash flow information: | | | | | | | |
Interest paid | | $ | 5,427 | | $ | 9,814 | |
Income taxes paid | | $ | 8,300 | | $ | 800 | |
Transfers from loans to real estate and other assets held for sale | | $ | 4,827 | | $ | 2,418 | |
7 | ||
FIRST DEFIANCE FINANCIAL CORP. |
Notes to Consolidated Condensed Financial Statements |
(Unaudited at September 30, 2013 and 2012) |
|
1. | Basis of Presentation |
8 | ||
3. | Fair Value |
9 | ||
10 | ||
11 | ||
September 30, 2013 | | Level 1 Inputs | | Level 2 Inputs | | Level 3 Inputs | | Total Fair Value | | ||||
| | (In Thousands) | | ||||||||||
Available for sale securities: | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Obligations of U.S. Government corporations and agencies | | $ | - | | $ | 4,931 | | $ | - | | $ | 4,931 | |
Mortgage-backed - residential | | | - | | | 36,939 | | | - | | | 36,939 | |
Collateralized mortgage obligations | | | - | | | 52,544 | | | - | | | 52,544 | |
Trust preferred stock | | | - | | | - | | | 1,890 | | | 1,890 | |
Preferred stock | | | 476 | | | - | | | - | | | 476 | |
Corporate bonds | | | - | | | 8,968 | | | - | | | 8,968 | |
Obligations of state and political subdivisions | | | - | | | 78,371 | | | | | | 78,371 | |
Mortgage banking derivative - asset | | | - | | | 548 | | | - | | | 548 | |
Mortgage banking derivative - liability | | | - | | | (247) | | | - | | | (247) | |
December 31, 2012 | | Level 1 Inputs | | Level 2 Inputs | | Level 3 Inputs | | Total Fair Value | | ||||
| | (In Thousands) | | ||||||||||
Available for sale securities: | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Obligations of U.S. Government corporations and agencies | | $ | - | | $ | 11,069 | | $ | - | | $ | 11,069 | |
U.S. treasury bonds | | | - | | | 1,002 | | | - | | | 1,002 | |
Mortgage-backed - residential | | | - | | | 31,461 | | | - | | | 31,461 | |
Collateralized mortgage obligations | | | - | | | 57,466 | | | - | | | 57,466 | |
Trust preferred stock | | | - | | | - | | | 1,474 | | | 1,474 | |
Preferred stock | | | 134 | | | - | | | - | | | 134 | |
Corporate bonds | | | - | | | 8,884 | | | - | | | 8,884 | |
Obligations of state and political subdivisions | | | - | | | 82,611 | | | - | | | 82,611 | |
Mortgage banking derivative - asset | | | - | | | 950 | | | - | | | 950 | |
Mortgage banking derivative - liability | | | - | | | (94) | | | - | | | (94) | |
12 | ||
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) (In Thousands) | | |||
Beginning balance, January 1, 2013 | | $ | 1,474 | |
Total gains or losses (realized/unrealized) | | | | |
Included in earnings (realized) | | | - | |
Included in other comprehensive income (presented gross of taxes) | | | 416 | |
Amortization | | | - | |
Sales | | | - | |
Transfers in and/or out of Level 3 | | | - | |
Ending balance, September 30, 2013 | | $ | 1,890 | |
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) (In Thousands) | | |||
Beginning balance, July 1, 2013 | | $ | 1,736 | |
Total gains or losses (realized/unrealized) | | | | |
Included in earnings (realized) | | | - | |
Included in other comprehensive income (presented gross of taxes) | | | 154 | |
Amortization | | | - | |
Sales | | | - | |
Transfers in and/or out of Level 3 | | | - | |
Ending balance, September 30, 2013 | | $ | 1,890 | |
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) (In Thousands) | | |||
Beginning balance, January 1, 2012 | | $ | 1,342 | |
Total gains or losses (realized/unrealized) | | | | |
Included in earnings (realized) | | | 81 | |
Included in other comprehensive income (presented gross of taxes) | | | 151 | |
Amortization | | | - | |
Redemption | | | (266) | |
Transfers in and/or out of Level 3 | | | - | |
Ending balance, September 30, 2012 | | $ | 1,308 | |
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) (In Thousands) | | |||
Beginning balance, July 1, 2012 | | $ | 1,227 | |
Total gains or losses (realized/unrealized) | | | | |
Included in earnings (realized) | | | - | |
Included in other comprehensive income (presented gross of taxes) | | | 81 | |
Amortization | | | - | |
Redemption | | | - | |
Transfers in and/or out of Level 3 | | | - | |
Ending balance, September 30, 2012 | | $ | 1,308 | |
13 | ||
September 30, 2013 | | Level 1 Inputs | | Level 2 Inputs | | Level 3 Inputs | | Total Fair Value | | ||||
| | (In Thousands) | | ||||||||||
Impaired loans | | | | | | | | | | | | | |
Residential Loans | | $ | - | | $ | - | | $ | 353 | | $ | 353 | |
Commercial Loans | | | - | | | - | | | 1,159 | | | 1,159 | |
Home Equity Loans | | | - | | | - | | | 141 | | | 141 | |
Multi Family Loans | | | - | | | - | | | 355 | | | 355 | |
CRE loans | | | - | | | - | | | 6,435 | | | 6,435 | |
Total impaired loans | | | - | | | - | | | 8,443 | | | 8,443 | |
Mortgage servicing rights | | | - | | | 1,495 | | | - | | | 1,495 | |
Real estate held for sale | | | | | | | | | | | | | |
Residential Loans | | | - | | | - | | | 65 | | | 65 | |
CRE loans | | | - | | | - | | | 562 | | | 562 | |
Total Real Estate held for sale | | | - | | | - | | | 627 | | | 627 | |
December 31, 2012 | | Level 1 Inputs | | Level 2 Inputs | | Level 3 Inputs | | Total Fair Value | | ||||
| | (In Thousands) | | ||||||||||
Impaired loans | | | | | | | | | | | | | |
Residential Loans | | $ | - | | $ | - | | $ | 599 | | $ | 599 | |
Commercial Loans | | | - | | | - | | | 771 | | | 771 | |
Home Equity Loans | | | - | | | - | | | 168 | | | 168 | |
Multi Family Loans | | | - | | | - | | | 407 | | | 407 | |
CRE loans | | | - | | | - | | | 12,126 | | | 12,126 | |
Total Impaired loans | | | - | | | - | | | 14,071 | | | 14,071 | |
Mortgage servicing rights | | | - | | | 7,833 | | | - | | | 7,833 | |
Real estate held for sale | | | | | | | | | | | | | |
Residential Loans | | | - | | | - | | | 61 | | | 61 | |
CRE loans | | | - | | | - | | | 385 | | | 385 | |
Total Real Estate held for sale | | | - | | | - | | | 446 | | | 446 | |
14 | ||
| | Fair Value | | Valuation Technique | | Unobservable Inputs | | Range of Inputs | | | Weighted Average | | |
| | (Dollars in Thousands) | | ||||||||||
| | | | | | | | | | | | | |
Trust preferred stock | | $ | 1,890 | | Discounted cash flow | | Constant prepayment rate | | 2-40 | % | | 40 | % |
| | | | | | | Expected asset default | | 0-30 | % | | 15 | % |
| | | | | | | Expected recoveries | | 10-15 | % | | 10 | % |
Impaired Loans- Applies to all loan classes | | $ | 8,443 | | Appraisals | | Discounts for collection issues and changes in market conditions | | 0-10 | % | | 10 | % |
Real estate held for sale Applies to all classes | | $ | 627 | | Appraisals | | Discounts for changes in market conditions | | 0-20 | % | | 20 | % |
| | Fair Value | | Valuation Technique | | Unobservable Inputs | | Range of Inputs | | | Weighted Average | | |
| | (Dollars in Thousands) | | ||||||||||
| | | | | | | | | | | | | |
Trust preferred stock | | $ | 1,474 | | Discounted cash flow | | Constant prepayment rate | | 2-40 | % | | 40 | % |
| | | | | | | Expected asset default | | 0-30 | % | | 15 | % |
| | | | | | | Expected recoveries | | 10-15 | % | | 10 | % |
Impaired Loans- Applies to all loan classes | | $ | 14,071 | | Appraisals | | Discounts for collection issues and changes in market conditions | | 0-10 | % | | 10 | % |
Real estate held for sale Applies to all classes | | $ | 446 | | Appraisals | | Discounts for changes in market conditions | | 0-20 | % | | 20 | % |
15 | ||
16 | ||
| | Carrying | | Fair Value Measurements at September 30, 2013 (In Thousands) | | |||||||||||
| | Value | | Total | | Level 1 | | Level 2 | | Level 3 | | |||||
Financial Assets: | | | | | | | | | | | | | | | | |
Cash and cash equivalents | | $ | 127,629 | | $ | 127,629 | | $ | 127,629 | | $ | - | | $ | - | |
Investment securities | | | 184,526 | | | 184,532 | | | 476 | | | 182,166 | | | 1,890 | |
Federal Home Loan Bank Stock | | | 19,350 | | | N/A | | | N/A | | | N/A | | | N/A | |
Loans, net, including loans held for sale | | | 1,548,706 | | | 1,559,497 | | | - | | | 13,501 | | | 1,545,996 | |
Accrued interest receivable | | | 6,425 | | | 6,425 | | | - | | | 1,163 | | | 5,262 | |
| | | | | | | | | | | | | | | | |
Financial Liabilities: | | | | | | | | | | | | | | | | |
Deposits | | $ | 1,658,492 | | $ | 1,661,109 | | $ | 300,891 | | $ | 1,360,218 | | $ | - | |
Advances from Federal Home Loan Bank | | | 22,761 | | | 23,022 | | | - | | | 23,022 | | | - | |
Securities sold under repurchase agreements | | | 50,822 | | | 50,822 | | | - | | | 50,822 | | | - | |
Subordinated debentures | | | 36,083 | | | 35,333 | | | - | | | - | | | 35,333 | |
17 | ||
| | Carrying | | Fair Value Measurements at December 31, 2012 (In Thousands) | | |||||||||||
| | Value | | Total | | Level 1 | | Level 2 | | Level 3 | | |||||
Financial Assets: | | | | | | | | | | | | | | | | |
Cash and cash equivalents | | $ | 136,832 | | $ | 136,832 | | $ | 136,832 | | $ | - | | $ | - | |
Investment securities | | | 194,609 | | | 194,617 | | | 134 | | | 193,009 | | | 1,474 | |
Federal Home Loan Bank Stock | | | 20,655 | | | N/A | | | N/A | | | N/A | | | N/A | |
Loans, net, including loans held for sale | | | 1,520,610 | | | 1,543,438 | | | - | | | 22,577 | | | 1,520,861 | |
Accrued interest receivable | | | 5,594 | | | 5,594 | | | - | | | 757 | | | 4,837 | |
| | | | | | | | | | | | | | | | |
Financial Liabilities: | | | | | | | | | | | | | | | | |
Deposits | | $ | 1,667,472 | | $ | 1,671,713 | | $ | 315,132 | | $ | 1,356,581 | | $ | - | |
Advances from Federal Home Loan Bank | | | 12,796 | | | 13,466 | | | - | | | 13,466 | | | - | |
Securities sold under repurchase agreements | | | 51,702 | | | 51,702 | | | - | | | 51,702 | | | - | |
Subordinated debentures | | | 36,083 | | | 35,766 | | | - | | | - | | | 35,766 | |
4. | Stock Compensation Plans |
18 | ||
19 | ||
Stock options | | Options Outstanding | | Weighted Average Exercise Price | | Weighted Average Remaining Contractual Term (in years) | | Aggregate Intrinsic Value (in 000’s) | | ||||
Options outstanding, January 1, 2013 | | | 312,350 | | $ | 20.33 | | | | | | | |
Forfeited or cancelled | | | 14,000 | | | 20.66 | | | | | | | |
Exercised | | | 33,580 | | | 17.09 | | | | | | | |
Granted | | | - | | | - | | | | | | | |
Options outstanding, September 30, 2013 | | | 264,770 | | $ | 20.73 | | | 3.47 | | $ | 1,177 | |
Vested or expected to vest at September 30, 2013 | | | 264,770 | | $ | 20.73 | | | 3.47 | | $ | 1,177 | |
Exercisable at September 30, 2013 | | | 251,900 | | $ | 21.30 | | | 3.36 | | $ | 999 | |
| | Restricted Stock Units | | Stock Grants | | ||||||||
| | | | | Weighted-Average | | | | | Weighted-Average | | ||
| | | | | Grant Date | | | | | Grant Date | | ||
Unvested Shares | | Shares | | Fair Value | | Shares | | Fair Value | | ||||
| | | | | | | | | | | | | |
Unvested at January 1, 2013 | | | 38,871 | | $ | 14.74 | | | 11,260 | | $ | 13.28 | |
Granted | | | 91,187 | | | 19.42 | | | 20,639 | | | 15.77 | |
Vested | | | (20,639) | | | 15.77 | | | (31,899) | | | 14.89 | |
Forfeited | | | (3,358) | | | 11.97 | | | - | | | - | |
Unvested at September 30, 2013 | | | 106,061 | | $ | 18.66 | | | - | | $ | - | |
5. | Dividends on Common Stock |
20 | ||
6. | Earnings Per Common Share |
| | Three months ended September 30, | | Nine months ended September 30, | | ||||||||
| | 2013 | | 2012 | | 2013 | | 2012 | | ||||
Numerator for basic and diluted earnings per common share Net income applicable to common shares | | $ | 5,479 | | $ | 5,423 | | $ | 17,148 | | $ | 12,891 | |
Denominator: | | | | | | | | | | | | | |
Denominator for basic earnings per common share weighted average common shares, including participating securities | | | 9,780 | | | 9,729 | | | 9,763 | | | 9,728 | |
Effect of warrants | | | 337 | | | 223 | | | 315 | | | 215 | |
Effect of restricted stock units | | | 38 | | | 20 | | | 29 | | | 25 | |
Effect of employee stock options | | | 57 | | | 28 | | | 53 | | | 25 | |
| | | | | | | | | | | | | |
Denominator for diluted earnings per common share | | | 10,212 | | | 10,000 | | | 10,160 | | | 9,993 | |
Basic earnings per common share | | $ | 0.56 | | $ | 0.56 | | $ | 1.76 | | $ | 1.33 | |
| | | | | | | | | | | | | |
Diluted earnings per common share | | $ | 0.54 | | $ | 0.54 | | $ | 1.69 | | $ | 1.29 | |
21 | ||
7. | Investment Securities |
| | Amortized Cost | | Gross Unrealized Gains | | Gross Unrealized Losses | | Fair Value | | ||||
At September 30, 2013 | | | | | | | | | | | | | |
Available-for-Sale Securities: | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Obligations of U.S. government corporations and agencies | | $ | 5,000 | | $ | - | | $ | (69) | | $ | 4,931 | |
Mortgage-backed securities residential | | | 36,800 | | | 877 | | | (738) | | | 36,939 | |
Collateralized mortgage obligations | | | 52,306 | | | 848 | | | (610) | | | 52,544 | |
Trust preferred securities and preferred stock | | | 3,601 | | | 441 | | | (1,676) | | | 2,366 | |
Corporate bonds | | | 8,839 | | | 138 | | | (9) | | | 8,968 | |
Obligations of state and political subdivisions | | | 76,251 | | | 2,956 | | | (836) | | | 78,371 | |
Totals | | $ | 182,797 | | $ | 5,260 | | $ | (3,938) | | $ | 184,119 | |
| | | | | | | | | | | | | |
Held-to-Maturity Securities*: | | | | | | | | | | | | | |
FHLMC certificates | | $ | 33 | | $ | - | | $ | - | | $ | 33 | |
FNMA certificates | | | 136 | | | 4 | | | - | | | 140 | |
GNMA certificates | | | 52 | | | 2 | | | - | | | 54 | |
Obligations of state and political subdivisions | | | 186 | | | - | | | - | | | 186 | |
Totals | | $ | 407 | | $ | 6 | | $ | - | | $ | 413 | |
At December 31, 2012 | | | | | | | | | | | | | |
Available-for-Sale Securities: | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Obligations of U.S. government corporations and agencies | | $ | 11,000 | | $ | 69 | | $ | - | | $ | 11,069 | |
U.S. treasury bonds | | | 1,000 | | | 2 | | | - | | | 1,002 | |
Mortgage-backed securities residential | | | 30,020 | | | 1,441 | | | - | | | 31,461 | |
Collateralized mortgage obligations | | | 55,962 | | | 1,504 | | | - | | | 57,466 | |
Trust preferred securities and preferred stock | | | 3,600 | | | 99 | | | (2,091) | | | 1,608 | |
Corporate bonds | | | 8,717 | | | 167 | | | - | | | 8,884 | |
Obligations of state and political subdivisions | | | 76,339 | | | 6,277 | | | (5) | | | 82,611 | |
Totals | | $ | 186,638 | | $ | 9,559 | | $ | (2,096) | | $ | 194,101 | |
| | | | | | | | | | | | | |
Held-to-Maturity Securities*: | | | | | | | | | | | | | |
FHLMC certificates | | $ | 69 | | $ | - | | $ | (1) | | $ | 68 | |
FNMA certificates | | | 162 | | | 6 | | | - | | | 168 | |
GNMA certificates | | | 60 | | | 3 | | | - | | | 63 | |
Obligations of state and political subdivisions | | | 217 | | | - | | | - | | | 217 | |
Totals | | $ | 508 | | $ | 9 | | $ | (1) | | $ | 516 | |
22 | ||
| | Available-for-Sale | | Held-to-Maturity | | ||||||||
| | Amortized | | Fair | | Amortized | | Fair | | ||||
| | Cost | | Value | | Cost | | Value | | ||||
| | (In Thousands) | | ||||||||||
Due in one year or less | | $ | 2,255 | | $ | 2,262 | | $ | - | | $ | - | |
Due after one year through five years | | | 6,126 | | | 6,315 | | | 186 | | | 186 | |
Due after five years through ten years | | | 37,483 | | | 38,818 | | | - | | | - | |
Due after ten years | | | 47,827 | | | 47,241 | | | - | | | - | |
MBS/CMO | | | 89,106 | | | 89,483 | | | 221 | | | 227 | |
| | $ | 182,797 | | $ | 184,119 | | $ | 407 | | $ | 413 | |
| | Duration of Unrealized Loss Position | | | | | | | | ||||||||||
| | Less than 12 Months | | 12 Month or Longer | | Total | | ||||||||||||
| | | | | Gross | | | | | Gross | | | | | | | | ||
| | Fair | | Unrealized | | Fair | | Unrealized | | Fair | | Unrealized | | ||||||
| | Value | | Loss | | Value | | Loss | | Value | | Losses | | ||||||
| | (In Thousands) | | ||||||||||||||||
At September 30, 2013 | | | | | | | | | | | | | | | | | | | |
Available-for-sale securities: | | | | | | | | | | | | | | | | | | | |
Obligations of U.S. government corporations and agencies | | $ | 2,931 | | $ | (69) | | $ | - | | $ | - | | $ | 2,931 | | $ | (69) | |
Mortgage-backed - residential | | | 19,456 | | | (738) | | | - | | | - | | | 19,456 | | | (738) | |
Collateralized mortgage obligations | | | 19,948 | | | (610) | | | - | | | - | | | 19,948 | | | (610) | |
Trust preferred stock and preferred stock | | | - | | | - | | | 1,890 | | | (1,676) | | | 1,890 | | | (1,676) | |
Corporate bonds | | | 2,991 | | | (9) | | | - | | | - | | | 2,991 | | | (9) | |
Obligations of state and political subdivisions | | | 16,682 | | | (836) | | | - | | | - | | | 16,682 | | | (836) | |
Total temporarily impaired securities | | $ | 62,008 | | $ | (2,262) | | $ | 1,890 | | $ | (1,676) | | $ | 63,898 | | $ | (3,938) | |
23 | ||
| | Duration of Unrealized Loss Position | | | | | | | | ||||||||||
| | Less than 12 Months | | 12 Months or Longer | | Total | | ||||||||||||
| | | | | Gross | | | | | Gross | | | | | | | | ||
| | Fair | | Unrealized | | Fair | | Unrealized | | Fair | | Unrealized | | ||||||
| | Value | | Loss | | Value | | Loss | | Value | | Loses | | ||||||
| | | (In Thousands) | | |||||||||||||||
At December 31, 2012 | | | | | | | | | | | | | | | | | | | |
Available-for-sale securities: | | | | | | | | | | | | | | | | | | | |
Mortgage-backed securities - residential | | $ | 1 | | $ | - | | $ | - | | $ | - | | $ | 1 | | $ | - | |
Obligations of state and political subdivisions | | | 949 | | | (5) | | | - | | | - | | | 949 | | | (5) | |
Trust preferred stock and preferred stock | | | - | | | - | | | 1,474 | | | (2,091) | | | 1,474 | | | (2,091) | |
Total temporarily impaired securities | | $ | 950 | | $ | (5) | | $ | 1,474 | | $ | (2,091) | | $ | 2,424 | | $ | (2,096) | |
24 | ||
25 | ||
26 | ||
| | | TPREF Funding II | | | Alesco VIII | | | Preferred Term Security XXVII | | | Trapeza CDO I | | | Alesco Preferred Funding VIII | | | Alesco Preferred Funding IX | | | | |
| | | Rated Caa3 | | | Rated Ca | | | Rated C | | | Rated Ca | | | Not Rated | | | Not Rated | | | Total | |
Cumulative OTTI related to credit loss at January 1, 2013 | | $ | 323 | | $ | 1,000 | | $ | 78 | | $ | 857 | | $ | 453 | | $ | 465 | | $ | 3,176 | |
Addition Qtr 1 | | | - | | | - | | | - | | | - | | | - | | | - | | | - | |
Cumulative OTTI related to credit loss at March 31, 2013 | | $ | 323 | | $ | 1,000 | | $ | 78 | | $ | 857 | | $ | 453 | | $ | 465 | | $ | 3,176 | |
Addition Qtr 2 | | | - | | | - | | | - | | | - | | | - | | | - | | | - | |
Cumulative OTTI related to credit loss at June 30, 2013 | | $ | 323 | | $ | 1,000 | | $ | 78 | | $ | 857 | | $ | 453 | | $ | 465 | | $ | 3,176 | |
Addition Qtr 3 | | | - | | | - | | | - | | | - | | | - | | | - | | | - | |
Cumulative OTTI related to credit loss at September 30, 2013 | | $ | 323 | | $ | 1,000 | | $ | 78 | | $ | 857 | | $ | 453 | | $ | 465 | | $ | 3,176 | |
27 | ||
CDO | | Class | | Amortized Cost | | Fair Value | | Unrealized Loss | | OTTI Losses 2013 | | Lowest Rating | | Current Number of Banks and Insurance Companies | | Actual Deferrals and Defaults as a % of Current Collateral | | | Expected Deferrals and Defaults as a % of Remaining Performing Collateral | | | Excess Sub- ordination as a % of Current Performing Collateral | | ||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
TPREF Funding II | | B | | | 673 | | | 271 | | | (402) | | | - | | Caa3 | | 15 | | 43.47 | % | | 15.90 | % | | - | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
I-Preferred Term Sec I | | B-1 | | | 1,000 | | | 686 | | | (314) | | | - | | CCC- | | 14 | | 17.24 | % | | 12.04 | % | | 23.78 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Dekania II CDO | | C-1 | | | 990 | | | 612 | | | (378) | | | - | | CCC | | 31 | | - | % | | 13.29 | % | | 26.51 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Preferred Term Sec XXVII | | C-1 | | | 903 | | | 321 | | | (582) | | | - | | C | | 32 | | 26.15 | % | | 18.83 | % | | 5.99 | % |
Total | | | | $ | 3,566 | | $ | 1,890 | | $ | (1,676) | | $ | - | | | | | | | | | | | | | |
| Three Months Ended | | Nine Months Ended | | ||||||||
| September 30, | | September 30, | | ||||||||
| 2013 | | 2012 | | 2013 | | 2012 | | ||||
| (In thousands) | | (In thousands) | | ||||||||
Proceeds | $ | - | | $ | 2,122 | | $ | 4,027 | | $ | 8,538 | |
Gross realized gains | | - | | | 103 | | | 97 | | | 528 | |
Gross realized losses | | - | | | - | | | - | | | - | |
28 | ||
| | September 30, | | December 31, | | ||
| | 2013 | | 2012 | | ||
Real Estate: | | | | | | | |
Secured by 1-4 family residential | | $ | 191,984 | | $ | 200,826 | |
Secured by multi-family residential | | | 145,704 | | | 122,275 | |
Secured by commercial real estate | | | 675,411 | | | 675,110 | |
Construction | | | 59,567 | | | 37,788 | |
| | | 1,072,666 | | | 1,035,999 | |
Other Loans: | | | | | | | |
Commercial | | | 386,160 | | | 383,817 | |
Home equity and improvement | | | 105,727 | | | 108,718 | |
Consumer Finance | | | 16,659 | | | 15,936 | |
| | | 508,546 | | | 508,471 | |
Total loans | | | 1,581,212 | | | 1,544,470 | |
Deduct: | | | | | | | |
Undisbursed loan funds | | | (19,189) | | | (18,478) | |
Net deferred loan origination fees and costs | | | (744) | | | (735) | |
Allowance for loan loss | | | (25,964) | | | (26,711) | |
Totals | | $ | 1,535,315 | | $ | 1,498,546 | |
Quarter Ended September 30, 2013 | | 1-4 Family Residential Real Estate | | Construction | | Multi- Family Residential Real Estate | | Commercial Real Estate | | Commercial | | Home Equity and Improvement | | Consumer | | Total | | ||||||||
Beginning Allowance | | $ | 3,197 | | $ | 83 | | $ | 2,425 | | $ | 13,140 | | $ | 5,474 | | $ | 1,786 | | $ | 165 | | $ | 26,270 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Charge-Offs | | | (78) | | | - | | | - | | | (829) | | | (39) | | | (170) | | | (33) | | | (1,149) | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Recoveries | | | 23 | | | - | | | - | | | 248 | | | 68 | | | 9 | | | 19 | | | 367 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Provisions | | | (344) | | | 36 | | | 107 | | | 525 | | | 43 | | | 98 | | | 11 | | | 476 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Ending Allowance | | $ | 2,798 | | $ | 119 | | $ | 2,532 | | $ | 13,084 | | $ | 5,546 | | $ | 1,723 | | $ | 162 | | $ | 25,964 | |
Quarter Ended September 30, 2012 | | 1-4 Family Residential Real Estate | | Construction | | Multi- Family Residential Real Estate | | Commercial Real Estate | | Commercial | | Home Equity and Improvement | | Consumer | | Total | | ||||||||
Beginning Allowance | | $ | 3,104 | | $ | 46 | | $ | 2,610 | | $ | 13,914 | | $ | 5,156 | | $ | 1,435 | | $ | 144 | | $ | 26,409 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Charge-Offs | | | (217) | | | - | | | - | | | (780) | | | (355) | | | (203) | | | (19) | | | (1,574) | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Recoveries | | | 26 | | | - | | | 122 | | | 430 | | | 140 | | | 38 | | | 14 | | | 770 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Provisions | | | 83 | | | 17 | | | (261) | | | 225 | | | 162 | | | 471 | | | 8 | | | 705 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Ending Allowance | | $ | 2,996 | | $ | 63 | | $ | 2,471 | | $ | 13,789 | | $ | 5,103 | | $ | 1,741 | | $ | 147 | | $ | 26,310 | |
29 | ||
Year-to-date Ended September 30, 2013 | | 1-4 Family Residential Real Estate | | Construction | | Multi- Family Residential Real Estate | | Commercial Real Estate | | Commercial | | Home Equity and Improvement | | Consumer | | Total | | ||||||||
Beginning Allowance | | $ | 3,506 | | $ | 75 | | $ | 2,197 | | $ | 12,702 | | $ | 6,325 | | $ | 1,759 | | $ | 147 | | $ | 26,711 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Charge-Offs | | | (468) | | | - | | | (6) | | | (1,372) | | | (560) | | | (612) | | | (87) | | | (3,105) | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Recoveries | | | 155 | | | - | | | - | | | 516 | | | 201 | | | 70 | | | 67 | | | 1,009 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Provisions | | | (395) | | | 44 | | | 341 | | | 1,238 | | | (420) | | | 506 | | | 35 | | | 1,349 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Ending Allowance | | $ | 2,798 | | $ | 119 | | $ | 2,532 | | $ | 13,084 | | $ | 5,546 | | $ | 1,723 | | $ | 162 | | $ | 25,964 | |
Year-to-date Ended September 30, 2012 | | 1-4 Family Residential Real Estate | | Construction | | Multi- Family Residential Real Estate | | Commercial Real Estate | | Commercial | | Home Equity and Improvement | | Consumer | | Total | | ||||||||
Beginning Allowance | | $ | 4,095 | | $ | 63 | | $ | 2,850 | | $ | 17,640 | | $ | 6,576 | | $ | 1,856 | | $ | 174 | | $ | 33,254 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Charge-Offs | | | (1,539) | | | - | | | (555) | | | (10,170) | | | (3,507) | | | (668) | | | (74) | | | (16,513) | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Recoveries | | | 150 | | | - | | | 122 | | | 574 | | | 295 | | | 77 | | | 45 | | | 1,263 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Provisions | | | 290 | | | - | | | 54 | | | 5,745 | | | 1,739 | | | 476 | | | 2 | | | 8,306 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Ending Allowance | | $ | 2,996 | | $ | 63 | | $ | 2,471 | | $ | 13,789 | | $ | 5,103 | | $ | 1,741 | | $ | 147 | | $ | 26,310 | |
30 | ||
(In Thousands) | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 1-4 Family | | | | | Multi- Family | | | | | | | | | | | | | | | | | ||
| | Residential | | | | | Residential | | Commercial | | | | | Home Equity | | | | | | | | ||||
| | Real Estate | | Construction | | Real Estate | | Real Estate | | Commercial | | & Improvement | | Consumer | | Total | | ||||||||
Allowance for loan losses: | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Ending allowance balance attributable to loans: | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment | | $ | 234 | | $ | - | | $ | - | | $ | 1,837 | | $ | 305 | | $ | 44 | | $ | - | | $ | 2,420 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Collectively evaluated for impairment | | | 2,564 | | | 119 | | | 2,532 | | | 11,247 | | | 5,241 | | | 1,679 | | | 162 | | | 23,544 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Acquired with deteriorated credit quality | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | | - | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Total ending allowance balance | | $ | 2,798 | | $ | 119 | | $ | 2,532 | | $ | 13,084 | | $ | 5,546 | | $ | 1,723 | | $ | 162 | | $ | 25,964 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Loans: | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Loans individually evaluated for impairment | | $ | 10,514 | | $ | 261 | | $ | 865 | | $ | 40,960 | | $ | 9,729 | | $ | 2,499 | | $ | 71 | | $ | 64,899 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Loans collectively evaluated for impairment | | | 181,870 | | | 40,108 | | | 144,989 | | | 636,481 | | | 377,591 | | | 103,673 | | | 16,574 | | | 1,501,286 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Loans acquired with deteriorated credit quality | | | 31 | | | - | | | - | | | 231 | | | 29 | | | - | | | - | | | 291 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Total ending loans balance | | $ | 192,415 | | $ | 40,369 | | $ | 145,854 | | $ | 677,672 | | $ | 387,349 | | $ | 106,172 | | $ | 16,645 | | $ | 1,566,476 | |
31 | ||
| | 1-4 Family | | | | | Multi- Family | | | | | | | | | | | | | | | | | ||
| | Residential | | | | | Residential | | Commercial | | | | | Home Equity | | | | | | | | ||||
| | Real Estate | | | Construction | | Real Estate | | Real Estate | | Commercial | | & Improvement | | Consumer | | Total | | |||||||
Allowance for loan losses: | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Ending allowance balance attributable to loans: | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment | | $ | 281 | | $ | - | | $ | - | | $ | 1,070 | | $ | 138 | | $ | 2 | | $ | - | | $ | 1,491 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Collectively evaluated for impairment | | | 3,225 | | | 75 | | | 2,197 | | | 11,632 | | | 6,187 | | | 1,757 | | | 147 | | | 25,220 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Acquired with deteriorated credit quality | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | | - | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Total ending allowance balance | | $ | 3,506 | | $ | 75 | | $ | 2,197 | | $ | 12,702 | | $ | 6,325 | | $ | 1,759 | | $ | 147 | | $ | 26,711 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Loans: | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Loans individually evaluated for impairment | | $ | 11,930 | | $ | 45 | | $ | 1,626 | | $ | 46,053 | | $ | 8,830 | | $ | 2,678 | | $ | 124 | | $ | 71,286 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Loans collectively evaluated for impairment | | | 189,348 | | | 19,251 | | | 120,829 | | | 630,534 | | | 376,007 | | | 106,516 | | | 15,815 | | | 1,458,300 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Loans acquired with deteriorated credit quality | | | 36 | | | - | | | - | | | 436 | | | 32 | | | - | | | - | | | 504 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Total ending loans balance | | $ | 201,314 | | $ | 19,296 | | $ | 122,455 | | $ | 677,023 | | $ | 384,869 | | $ | 109,194 | | $ | 15,939 | | $ | 1,530,090 | |
32 | ||
| | Three Months Ended September 30, 2013 | | Nine Months Ended September 30, 2013 | | ||||||||||||||
| | Average Balance | | Interest Income Recognized | | Cash Basis Income Recognized | | Average Balance | | Interest Income Recognized | | Cash Basis Income Recognized | | ||||||
Residential Owner Occupied | | $ | 6,463 | | $ | 88 | | $ | 89 | | $ | 6,705 | | $ | 268 | | $ | 266 | |
Residential Non Owner Occupied | | | 4,261 | | | 42 | | | 43 | | | 4,465 | | | 116 | | | 117 | |
Total Residential Real Estate | | | 10,724 | | | 130 | | | 132 | | | 11,170 | | | 384 | | | 383 | |
Construction | | | 261 | | | 4 | | | 5 | | | 142 | | | 6 | | | 6 | |
Multi-Family | | | 1,078 | | | 9 | | | 9 | | | 1,261 | | | 20 | | | 21 | |
CRE Owner Occupied | | | 14,339 | | | 121 | | | 127 | | | 14,520 | | | 304 | | | 302 | |
CRE Non Owner Occupied | | | 23,254 | | | 237 | | | 264 | | | 23,786 | | | 675 | | | 687 | |
Agriculture Land | | | 674 | | | 4 | | | 2 | | | 800 | | | 21 | | | 13 | |
Other CRE | | | 3,226 | | | 14 | | | 14 | | | 4,297 | | | 28 | | | 24 | |
Total Commercial Real Estate | | | 41,493 | | | 376 | | | 407 | | | 43,403 | | | 1,028 | | | 1,026 | |
Commercial Working Capital | | | 3,058 | | | 13 | | | 14 | | | 2,273 | | | 33 | | | 37 | |
Commercial Other | | | 5,918 | | | 14 | | | 15 | | | 6,449 | | | 64 | | | 58 | |
Total Commercial | | | 8,976 | | | 27 | | | 29 | | | 8,722 | | | 97 | | | 95 | |
Consumer | | | 76 | | | 1 | | | 2 | | | 90 | | | 5 | | | 5 | |
Home Equity and Home Improvement | | | 2,596 | | | 29 | | | 29 | | | 2,684 | | | 95 | | | 91 | |
Total Impaired Loans | | $ | 65,204 | | $ | 576 | | $ | 613 | | $ | 67,472 | | $ | 1,635 | | $ | 1,627 | |
33 | ||
| | Three Months Ended September 30, 2012 | | Nine Months Ended September 30, 2012 | | ||||||||||||||
| | Average Balance | | Interest Income Recognized | | Cash Basis Income Recognized | | Average Balance | | Interest Income Recognized | | Cash Basis Income Recognized | | ||||||
Residential Owner Occupied | | $ | 1,912 | | | 15 | | $ | 14 | | $ | 1,921 | | $ | 45 | | $ | 42 | |
Residential Non Owner Occupied | | | 6,141 | | | 54 | | | 58 | | | 5,397 | | | 126 | | | 129 | |
Total Residential Real Estate | | | 8,053 | | | 69 | | | 72 | | | 7,318 | | | 171 | | | 171 | |
Construction | | | - | | | - | | | - | | | - | | | - | | | - | |
Multi-Family | | | 811 | | | 10 | | | 10 | | | 627 | | | 11 | | | 11 | |
CRE Owner Occupied | | | 12,414 | | | 53 | | | 44 | | | 11,019 | | | 92 | | | 88 | |
CRE Non Owner Occupied | | | 14,881 | | | 104 | | | 161 | | | 15,231 | | | 284 | | | 287 | |
Agriculture Land | | | 773 | | | 6 | | | 1 | | | 1,107 | | | 20 | | | 15 | |
Other CRE | | | 5,987 | | | 1 | | | 1 | | | 7,015 | | | 4 | | | 4 | |
Total Commercial Real Estate | | | 34,055 | | | 164 | | | 207 | | | 34,372 | | | 400 | | | 394 | |
Commercial Working Capital | | | 2,048 | | | 9 | | | 11 | | | 2,005 | | | 13 | | | 15 | |
Commercial Other | | | 4,188 | | | 25 | | | 26 | | | 4,538 | | | 40 | | | 42 | |
Total Commercial | | | 6,236 | | | 34 | | | 37 | | | 6,543 | | | 53 | | | 57 | |
Consumer | | | - | | | - | | | - | | | - | | | - | | | - | |
Home Equity and Home Improvement | | | 36 | | | - | | | - | | | 37 | | | 2 | | | 2 | |
Total Impaired Loans | | $ | 49,191 | | $ | 277 | | $ | 326 | | $ | 48,897 | | $ | 637 | | $ | 635 | |
34 | ||
| | Unpaid Principal Balance | | Recorded Investment | | Allowance for Loan Losses Allocated | | |||
With no allowance recorded: | | | | | | | | | | |
Residential Owner Occupied | | $ | 4,902 | | $ | 4,862 | | $ | - | |
Residential Non Owner Occupied | | | 3,539 | | | 2,806 | | | - | |
Total Residential Real Estate | | | 8,441 | | | 7,668 | | | - | |
Construction | | | 300 | | | 261 | | | - | |
Multi-Family Residential Real Estate | | | 1,014 | | | 865 | | | - | |
CRE Owner Occupied | | | 10,313 | | | 8,552 | | | - | |
CRE Non Owner Occupied | | | 5,364 | | | 4,577 | | | - | |
Agriculture Land | | | 689 | | | 504 | | | - | |
Other CRE | | | 4,948 | | | 3,063 | | | - | |
Total Commercial Real Estate | | | 21,314 | | | 16,696 | | | - | |
Commercial Working Capital | | | 3,835 | | | 3,837 | | | - | |
Commercial Other | | | 4,846 | | | 4,797 | | | - | |
Total Commercial | | | 8,681 | | | 8,634 | | | - | |
Consumer | | | 71 | | | 71 | | | - | |
Home Equity and Home Improvement | | | 2,135 | | | 2,058 | | | - | |
Total loans with no allowance recorded | | $ | 41,956 | | $ | 36,253 | | $ | - | |
| | | | | | | | | | |
With an allowance recorded: | | | | | | | | | | |
Residential Owner Occupied | | $ | 1,534 | | $ | 1,539 | | $ | 211 | |
Residential Non Owner Occupied | | | 1,305 | | | 1,307 | | | 23 | |
Total Residential Real Estate | | | 2,839 | | | 2,846 | | | 234 | |
Construction | | | - | | | - | | | - | |
Multi-Family Residential Real Estate | | | - | | | - | | | - | |
CRE Owner Occupied | | | 7,651 | | | 6,500 | | | 281 | |
CRE Non Owner Occupied | | | 17,905 | | | 17,451 | | | 1,546 | |
Agriculture Land | | | 251 | | | 258 | | | 8 | |
Other CRE | | | 83 | | | 55 | | | 2 | |
Total Commercial Real Estate | | | 25,890 | | | 24,264 | | | 1,837 | |
Commercial Working Capital | | | - | | | - | | | - | |
Commercial Other | | | 1,094 | | | 1,095 | | | 305 | |
Total Commercial | | | 1,094 | | | 1,095 | | | 305 | |
Consumer | | | - | | | - | | | - | |
Home Equity and Home Improvement | | | 439 | | | 441 | | | 44 | |
Total loans with an allowance recorded | | $ | 30,262 | | $ | 28,646 | | $ | 2,420 | |
35 | ||
| | Unpaid Principal Balance | | Recorded Investment | | Allowance for Loan Losses Allocated | | |||
With no allowance recorded: | | | | | | | | | | |
Residential Owner Occupied | | $ | 5,427 | | $ | 5,357 | | $ | - | |
Residential Non Owner Occupied | | | 4,211 | | | 3,420 | | | - | |
Total Residential Real Estate | | | 9,638 | | | 8,777 | | | - | |
Construction | | | 300 | | | 45 | | | - | |
Multi-Family Residential Real Estate | | | 1,775 | | | 1,626 | | | - | |
CRE Owner Occupied | | | 12,314 | | | 9,782 | | | - | |
CRE Non Owner Occupied | | | 11,054 | | | 9,105 | | | - | |
Agriculture Land | | | 1,176 | | | 993 | | | - | |
Other CRE | | | 8,741 | | | 5,527 | | | - | |
Total Commercial Real Estate | | | 33,285 | | | 25,407 | | | - | |
Commercial Working Capital | | | 1,565 | | | 1,565 | | | - | |
Commercial Other | | | 6,367 | | | 5,338 | | | - | |
Total Commercial | | | 7,932 | | | 6,903 | | | - | |
Consumer | | | 125 | | | 124 | | | - | |
Home Equity and Home Improvement | | | 2,777 | | | 2,642 | | | - | |
Total loans with no allowance recorded | | $ | 55,832 | | $ | 45,524 | | $ | - | |
| | | | | | | | | | |
With an allowance recorded: | | | | | | | | | | |
Residential Owner Occupied | | $ | 1,697 | | $ | 1,701 | | $ | 257 | |
Residential Non Owner Occupied | | | 1,449 | | | 1,452 | | | 24 | |
Total Residential Real Estate | | | 3,146 | | | 3,153 | | | 281 | |
Construction | | | - | | | - | | | - | |
Multi-Family Residential Real Estate | | | - | | | - | | | - | |
CRE Owner Occupied | | | 5,735 | | | 5,118 | | | 245 | |
CRE Non Owner Occupied | | | 15,301 | | | 15,357 | | | 820 | |
Agriculture Land | | | 111 | | | 112 | | | 3 | |
Other CRE | | | 88 | | | 59 | | | 2 | |
Total Commercial Real Estate | | | 21,235 | | | 20,646 | | | 1,070 | |
Commercial Working Capital | | | 300 | | | 301 | | | 10 | |
Commercial Other | | | 1,623 | | | 1,626 | | | 128 | |
Total Commercial | | | 1,923 | | | 1,927 | | | 138 | |
Consumer | | | - | | | - | | | - | |
Home Equity and Home Improvement | | | 36 | | | 36 | | | 2 | |
Total loans with an allowance recorded | | $ | 26,340 | | $ | 25,762 | | $ | 1,491 | |
36 | ||
| | September 30, 2013 | | December 31, 2012 | | ||
| | (in thousands) | | ||||
Non-accrual loans | | $ | 30,512 | | $ | 32,570 | |
Loans over 90 days past due and still accruing | | | - | | | - | |
Total non-performing loans | | | 30,512 | | | 32,570 | |
Real estate and other assets held for sale | | | 5,518 | | | 3,805 | |
Total non-performing assets | | $ | 36,030 | | $ | 36,375 | |
| | Current | | 30-59 days | | 60-89 days | | 90+ days | | Total Past Due | | Total Non Accrual | | ||||||
Residential Owner Occupied | | $ | 122,038 | | $ | 593 | | $ | 203 | | $ | 956 | | $ | 1,752 | | $ | 1,117 | |
Residential Non Owner Occupied | | | 67,361 | | | 500 | | | 135 | | | 629 | | | 1,264 | | | 2,040 | |
| | | | | | | | | | | | | | | | | | | |
Total residential real estate | | | 189,399 | | | 1,093 | | | 338 | | | 1,585 | | | 3,016 | | | 3,157 | |
| | | | | | | | | | | | | | | | | | | |
Construction | | | 40,369 | | | - | | | - | | | - | | | - | | | - | |
Multi-Family | | | 145,854 | | | - | | | - | | | - | | | - | | | 613 | |
CRE Owner Occupied | | | 318,420 | | | 489 | | | 631 | | | 1,728 | | | 2,848 | | | 8,416 | |
CRE Non Owner Occupied | | | 227,935 | | | 1,348 | | | 224 | | | 1,286 | | | 2,858 | | | 5,621 | |
Agriculture Land | | | 78,134 | | | 23 | | | 134 | | | 76 | | | 233 | | | 682 | |
Other Commercial Real Estate | | | 45,403 | | | 337 | | | - | | | 1,504 | | | 1,841 | | | 3,094 | |
| | | | | | | | | | | | | | | | | | | |
Total Commercial Real Estate | | | 669,892 | | | 2,197 | | | 989 | | | 4,594 | | | 7,780 | | | 17,813 | |
| | | | | | | | | | | | | | | | | | | |
Commercial Working Capital | | | 156,532 | | | 349 | | | - | | | 433 | | | 782 | | | 3,188 | |
Commercial Other | | | 225,129 | | | 989 | | | 1,032 | | | 2,885 | | | 4,906 | | | 5,567 | |
| | | | | | | | | | | | | | | | | | | |
Total Commercial | | | 381,661 | | | 1,338 | | | 1,032 | | | 3,318 | | | 5,688 | | | 8,755 | |
Consumer | | | 16,602 | | | 31 | | | 12 | | | - | | | 43 | | | - | |
Home Equity / Home Improvement | | | 104,430 | | | 1,416 | | | 149 | | | 177 | | | 1,742 | | | 178 | |
| | | | | | | | | | | | | | | | | | | |
Total Loans | | $ | 1,548,207 | | $ | 6,075 | | $ | 2,520 | | $ | 9,674 | | $ | 18,269 | | $ | 30,516 | |
37 | ||
| | Current | | 30-59 days | | | 60-89 days | | | 90+ days | | | Total Past Due | | | Total Non Accrual | | ||
Residential Owner Occupied | | $ | 125,362 | | $ | 1,238 | | $ | 604 | | $ | 945 | | $ | 2,787 | | $ | 1,125 | |
Residential Non Owner Occupied | | | 71,777 | | | 413 | | | 126 | | | 849 | | | 1,388 | | | 2,473 | |
Total residential real estate | | | 197,139 | | | 1,651 | | | 730 | | | 1,794 | | | 4,175 | | | 3,598 | |
| | | | | | | | | | | | | | | | | | | |
Construction | | | 19,296 | | | - | | | - | | | - | | | - | | | - | |
Multi-Family | | | 122,455 | | | - | | | - | | | - | | | - | | | 1,178 | |
CRE Owner Occupied | | | 321,071 | | | 1,248 | | | 382 | | | 1,622 | | | 3,252 | | | 9,652 | |
CRE Non Owner Occupied | | | 235,592 | | | 134 | | | 1,321 | | | 2,480 | | | 3,935 | | | 6,674 | |
Agriculture Land | | | 72,092 | | | 84 | | | 31 | | | - | | | 115 | | | 813 | |
Other Commercial Real Estate | | | 36,510 | | | 21 | | | 875 | | | 3,560 | | | 4,456 | | | 4,761 | |
Total Commercial Real Estate | | | 665,265 | | | 1,487 | | | 2,609 | | | 7,662 | | | 11,758 | | | 21,900 | |
Commercial Working Capital | | | 161,110 | | | - | | | 155 | | | 1,204 | | | 1,359 | | | 1,528 | |
Commercial Other | | | 218,477 | | | 584 | | | 1,201 | | | 2,138 | | | 3,923 | | | 4,136 | |
Total Commercial | | | 379,587 | | | 584 | | | 1,356 | | | 3,342 | | | 5,282 | | | 5,664 | |
Consumer | | | 15,702 | | | 229 | | | 8 | | | - | | | 237 | | | - | |
Home Equity / Home Improvement | | | 106,458 | | | 2,294 | | | 225 | | | 217 | | | 2,736 | | | 217 | |
| | | | | | | | | | | | | | | | | | | |
Total Loans | | $ | 1,505,902 | | $ | 6,245 | | $ | 4,928 | | $ | 13,015 | | $ | 24,188 | | $ | 32,557 | |
38 | ||
| | Loans Modified as a TDR for the Three Months Ended September 30, 2013 ($ in thousands) | | Loans Modified as a TDR for the Nine Months Ended September 30, 2013 ($ in thousands) | | ||||||
Troubled Debt Restructurings | | Number of Loans | | | Recorded Investment (as of period end) | | Number of Loans | | | Recorded Investment (as of period end) | |
| | | | | | | | | | | |
Residential Owner Occupied | | 0 | | $ | - | | 8 | | $ | 746 | |
| | | | | | | | | | | |
Residential Non Owner Occupied | | 5 | | | 206 | | 6 | | | 393 | |
| | | | | | | | | | | |
CRE Owner Occupied | | 1 | | | 47 | | 5 | | | 802 | |
| | | | | | | | | | | |
CRE Non Owner Occupied | | 0 | | | - | | 1 | | | 1,361 | |
| | | | | | | | | | | |
Agriculture Land | | 0 | | | - | | 1 | | | 214 | |
| | | | | | | | | | | |
Other CRE | | 0 | | | - | | 1 | | | 31 | |
| | | | | | | | | | | |
Commercial / Industrial | | 5 | | | 941 | | 6 | | | 988 | |
| | | | | | | | | | | |
Home Equity / Improvement | | 4 | | | 66 | | 13 | | | 536 | |
| | | | | | | | | | | |
Consumer | | 0 | | | - | | 2 | | | 13 | |
| | | | | | | | | | | |
Total | | 15 | | $ | 1,260 | | 43 | | $ | 5,084 | |
| | | Loans Modified as a TDR for the Three Months Ended September 30, 2012 ($ in thousands) | | | Loans Modified as a TDR for the Nine Months Ended September 30, 2012 ($ in thousands) | | ||||||
Troubled Debt Restructurings | | | Number of Loans | | Recorded Investment (as of period end) | | | Number of Loans | | | Recorded Investment (as of period end) | | |
| | | | | | | | | | | | | |
Residential Owner Occupied | | | 2 | | $ | 221 | | | 7 | | $ | 778 | |
| | | | | | | | | | | | | |
Residential Non Owner Occupied | | | 1 | | | 34 | | | 2 | | | 116 | |
| | | | | | | | | | | | | |
CRE Owner Occupied | | | 3 | | | 565 | | | 5 | | | 1,461 | |
| | | | | | | | | | | | | |
CRE Non Owner Occupied | | | 1 | | | 217 | | | 1 | | | 217 | |
| | | | | | | | | | | | | |
Agriculture Land | | | 1 | | | 127 | | | 2 | | | 439 | |
| | | | | | | | | | | | | |
Other CRE | | | 0 | | | - | | | 1 | | | 61 | |
| | | | | | | | | | | | | |
Commercial / Industrial | | | 2 | | | 34 | | | 2 | | | 34 | |
| | | | | | | | | | | | | |
Home Equity / Improvement | | | 0 | | | - | | | 0 | | | - | |
| | | | | | | | | | | | | |
Consumer | | | 0 | | | - | | | 0 | | | - | |
| | | | | | | | | | | | | |
Total | | | 10 | | $ | 1,198 | | | 20 | | $ | 3,106 | |
39 | ||
| | Three Months Ended September 30, 2013 ($ in thousands) | | Nine Months Ended September 30, 2013 ($ in thousands) | | ||||||||
Troubled Debt Restructurings That Subsequently Defaulted | | Number of Loans | | Recorded Investment (as of period end) | | | Number of Loans | | Recorded Investment (as of period end) | | |||
| | | | | | | | | | | | | |
Residential Owner Occupied | | | 4 | | $ | 339 | | | 5 | | $ | 432 | |
| | | | | | | | | | | | | |
Residential Non Owner Occupied | | | 1 | | | 78 | | | 1 | | | 78 | |
| | | | | | | | | | | | | |
CRE Owner Occupied | | | 0 | | | - | | | 0 | | | - | |
| | | | | | | | | | | | | |
CRE Non Owner Occupied | | | 0 | | | - | | | 1 | | | 212 | |
| | | | | | | | | | | | | |
Agriculture Land | | | 0 | | | - | | | 0 | | | - | |
| | | | | | | | | | | | | |
Other CRE | | | 0 | | | - | | | 0 | | | - | |
| | | | | | | | | | | | | |
Commercial / Industrial | | | 2 | | | 178 | | | 2 | | | 178 | |
| | | | | | | | | | | | | |
Home Equity / Improvement | | | 2 | | | 38 | | | 2 | | | 38 | |
| | | | | | | | | | | | | |
Consumer | | | 0 | | | - | | | 0 | | | - | |
| | | | | | | | | | | | | |
Total | | | 9 | | $ | 633 | | | 11 | | $ | 938 | |
| | Three Months Ended September 30, 2012 ($ in thousands) | | Nine Months Ended September 30, 2012 ($ in thousands) | | ||||||
Troubled Debt Restructurings That Subsequently Defaulted | | Number of Loans | | | Recorded Investment (as of period end) | | Number of Loans | | | Recorded Investment (as of period end) | |
| | | | | | | | | | | |
Residential Owner Occupied | | 0 | | $ | - | | 0 | | $ | - | |
| | | | | | | | | | | |
Residential Non Owner Occupied | | 1 | | | 24 | | 1 | | | 24 | |
| | | | | | | | | | | |
CRE Owner Occupied | | 0 | | | - | | 0 | | | - | |
| | | | | | | | | | | |
CRE Non Owner Occupied | | 2 | | | 351 | | 2 | | | 351 | |
| | | | | | | | | | | |
Agriculture Land | | 0 | | | - | | 0 | | | - | |
| | | | | | | | | | | |
Other CRE | | 0 | | | - | | 0 | | | - | |
| | | | | | | | | | | |
Commercial / Industrial | | 1 | | | 771 | | 2 | | | 1,351 | |
| | | | | | | | | | | |
Home Equity / Improvement | | 0 | | | - | | 0 | | | - | |
| | | | | | | | | | | |
Consumer | | 0 | | | - | | 0 | | | - | |
| | | | | | | | | | | |
Total | | 4 | | $ | 1,146 | | 5 | | $ | 1,726 | |
40 | ||
41 | ||
Category | | Pass | | Special Mention | | Substandard | | Doubtful | | Not Graded | | Total | | ||||||
| | | | | | | | | | | | | | | | | | | |
Residential Owner Occupied | | $ | 4,135 | | $ | 21 | | $ | 2,867 | | $ | - | | $ | 116,765 | | $ | 123,788 | |
Residential Non Owner Occupied | | | 53,120 | | | 3,233 | | | 6,030 | | | - | | | 6,244 | | | 68,627 | |
Total residential real estate | | | 57,255 | | | 3,254 | | | 8,897 | | | - | | | 123,009 | | | 192,415 | |
| | | | | | | | | | | | | | | | | | | |
Construction | | | 30,865 | | | - | | | 261 | | | - | | | 9,243 | | | 40,369 | |
| | | | | | | | | | | | | | | | | | | |
Multi Family | | | 142,044 | | | 654 | | | 2,177 | | | - | | | 979 | | | 145,854 | |
| | | | | | | | | | | | | | | | | | | |
CRE Owner Occupied | | | 291,586 | | | 14,988 | | | 12,808 | | | - | | | 1,886 | | | 321,268 | |
| | | | | | | | | | | | | | | | | | | |
CRE Non Owner Occupied | | | 201,459 | | | 12,571 | | | 16,642 | | | - | | | 121 | | | 230,793 | |
| | | | | | | | | | | | | | | | | | | |
Agriculture Land | | | 76,373 | | | 770 | | | 1,224 | | | - | | | - | | | 78,367 | |
| | | | | | | | | | | | | | | | | | | |
Other CRE | | | 40,935 | | | 1,694 | | | 3,856 | | | - | | | 759 | | | 47,244 | |
Total Commercial Real Estate | | | 610,353 | | | 30,023 | | | 34,530 | | | - | | | 2,766 | | | 677,672 | |
| | | | | | | | | | | | | | | | | | | |
Commercial Working Capital | | | 148,492 | | | 4,389 | | | 4,431 | | | - | | | - | | | 157,312 | |
| | | | | | | | | | | | | | | | | | | |
Commercial Other | | | 215,749 | | | 6,863 | | | 7,425 | | | - | | | - | | | 230,037 | |
Total Commercial | | | 364,241 | | | 11,252 | | | 11,856 | | | - | | | - | | | 387,349 | |
| | | | | | | | | | | | | | | | | | | |
Consumer | | | - | | | - | | | 19 | | | - | | | 16,626 | | | 16,645 | |
| | | | | | | | | | | | | | | | | | | |
Home Equity/Improvement | | | - | | | - | | | 857 | | | 9 | | | 105,306 | | | 106,172 | |
| | | | | | | | | | | | | | | | | | | |
Total | | $ | 1,204,758 | | $ | 45,183 | | $ | 58,597 | | $ | 9 | | $ | 257,929 | | $ | 1,566,476 | |
42 | ||
Category | | Pass | | Special Mention | | Substandard | | Doubtful | | Not Graded | | Total | | ||||||
| | | | | | | | | | | | | | | | | | | |
Residential Owner Occupied | | $ | 4,221 | | $ | 75 | | $ | 3,617 | | $ | 234 | | $ | 120,002 | | $ | 128,149 | |
Residential Non Owner Occupied | | | 55,771 | | | 2,453 | | | 8,248 | | | - | | | 6,693 | | | 73,165 | |
Total residential real estate | | | 59,992 | | | 2,528 | | | 11,865 | | | 234 | | | 126,695 | | | 201,314 | |
Construction | | | 11,360 | | | - | | | 45 | | | - | | | 7,891 | | | 19,296 | |
Multi Family | | | 118,121 | | | 910 | | | 2,404 | | | - | | | 1,020 | | | 122,455 | |
CRE Owner Occupied | | | 292,765 | | | 10,440 | | | 18,740 | | | - | | | 2,378 | | | 324,323 | |
CRE Non Owner Occupied | | | 207,745 | | | 9,077 | | | 22,615 | | | - | | | 90 | | | 239,527 | |
Agriculture Land | | | 69,924 | | | 769 | | | 1,514 | | | - | | | - | | | 72,207 | |
Other CRE | | | 31,875 | | | 891 | | | 7,222 | | | - | | | 978 | | | 40,966 | |
Total Commercial Real Estate | | | 602,309 | | | 21,177 | | | 50,091 | | | - | | | 3,446 | | | 677,023 | |
Commercial Working Capital | | | 156,433 | | | 3,587 | | | 2,449 | | | - | | | - | | | 162,469 | |
Commercial Other | | | 208,783 | | | 5,204 | | | 8,413 | | | - | | | - | | | 222,400 | |
Total Commercial | | | 365,216 | | | 8,791 | | | 10,862 | | | - | | | - | | | 384,869 | |
Consumer | | | - | | | - | | | 70 | | | - | | | 15,869 | | | 15,939 | |
Home Equity/Improvement | | | - | | | - | | | 668 | | | 64 | | | 108,462 | | | 109,194 | |
| | | | | | | | | | | | | | | | | | | |
Total | | $ | 1,156,998 | | $ | 33,406 | | $ | 76,005 | | $ | 298 | | $ | 263,383 | | $ | 1,530,090 | |
| | Three Months Ended September 30, | | Nine Months Ended September 30, | | ||||||||
| | 2013 | | 2012 | | 2013 | | 2012 | | ||||
| | (in thousands) | | (in thousands) | | ||||||||
Gain from sale of mortgage loans | | $ | 894 | | $ | 2,888 | | $ | 4,960 | | $ | 7,890 | |
Mortgage loans servicing revenue (expense): | | | | | | | | | | | | | |
Mortgage loans servicing revenue | | | 901 | | | 824 | | | 2,646 | | | 2,499 | |
Amortization of mortgage servicing rights | | | (429) | | | (892) | | | (1,752) | | | (2,610) | |
Mortgage servicing rights valuation adjustments | | | 480 | | | (600) | | | 1,265 | | | (855) | |
| | | 952 | | | (668) | | | 2,159 | | | (966) | |
| | | | | | | | | | | | | |
Net revenue from sale and servicing of mortgage loans | | $ | 1,846 | | $ | 2,220 | | $ | 7,119 | | $ | 6,924 | |
43 | ||
| | Three Months Ended September 30, | | | Nine Months Ended September 30, | | ||||||||
| | 2013 | | 2012 | | | 2013 | | 2012 | | ||||
| | (in thousands) | | | (in thousands) | | ||||||||
Mortgage servicing assets: | | | | | | | | | | | | | | |
Balance at beginning of period | | $ | 10,234 | | $ | 10,059 | | | $ | 10,121 | | $ | 10,219 | |
Loans sold, servicing retained | | | 400 | | | 969 | | | | 1,836 | | | 2,527 | |
Amortization | | | (429) | | | (892) | | | | (1,752) | | | (2,610) | |
Carrying value before valuation allowance at end of period | | | 10,205 | | | 10,136 | | | | 10,205 | | | 10,136 | |
| | | | | | | | | | | | | | |
Valuation allowance: | | | | | | | | | | | | | | |
Balance at beginning of period | | | (1,503) | | | (1,784) | | | | (2,288) | | | (1,529) | |
Impairment recovery (charges) | | | 480 | | | (600) | | | | 1,265 | | | (855) | |
Balance at end of period | | | (1,023) | | | (2,384) | | | | (1,023) | | | (2,384) | |
Net carrying value of MSRs at end of period | | $ | 9,182 | | $ | 7,752 | | | $ | 9,182 | | $ | 7,752 | |
Fair value of MSRs at end of period | | $ | 9,868 | | $ | 7,752 | | | $ | 9,868 | | $ | 7,752 | |
44 | ||
| | September 30, 2013 | | December 31, 2012 | | ||
Non-interest-bearing checking accounts | | $ | 300,891 | | $ | 315,132 | |
Interest-bearing checking and money market accounts | | | 681,987 | | | 664,857 | |
Savings accounts | | | 182,271 | | | 166,945 | |
Retail certificates of deposit less than $100,000 | | | 318,317 | | | 342,472 | |
Retail certificates of deposit greater than $100,000 | | | 175,026 | | | 176,029 | |
Brokered or national certificates of deposit | | | - | | | 2,037 | |
Total | | $ | 1,658,492 | | $ | 1,667,472 | |
| | September 30, 2013 | | December 31, 2012 | | ||
| | (in thousands) | | ||||
FHLB Advances: | | | | | | | |
Putable advances | | | 12,000 | | | 12,000 | |
Amortizable mortgage advances | | | 10,761 | | | 796 | |
Total | | $ | 22,761 | | $ | 12,796 | |
| | | | | | | |
Junior subordinated debentures owed to unconsolidated subsidiary trusts | | $ | 36,083 | | $ | 36,083 | |
45 | ||
46 | ||
| | September 30, 2013 | | December 31, 2012 | | ||||||||
| | Fixed Rate | | Variable Rate | | Fixed Rate | | Variable Rate | | ||||
Commitments to make loans | | $ | 41,090 | | $ | 46,655 | | $ | 50,205 | | $ | 48,035 | |
Unused lines of credit | | | 19,227 | | | 262,028 | | | 21,975 | | | 228,269 | |
Standby letters of credit | | | - | | | 16,652 | | | - | | | 18,166 | |
Total | | $ | 60,317 | | $ | 325,335 | | $ | 72,180 | | $ | 294,470 | |
| | September 30, 2013 | | December 31, 2012 | | ||||||||||||||
| | Assets | | (Liabilities) | | Derivative | | Assets | | (Liabilities) | | Derivative | | ||||||
| | Carrying | | Carrying | | Net Carrying | | Carrying | | Carrying | | Net Carrying | | ||||||
| | Value | | Value | | Value | | Value | | Value | | Value | | ||||||
| | (In Thousands) | | ||||||||||||||||
Derivatives not designated as hedging instruments | | | | | | | | | | | | | | | | | | | |
Mortgage Banking Derivatives | | $ | 548 | | $ | (247) | | $ | 301 | | $ | 950 | | $ | (94) | | $ | 856 | |
47 | ||
| | Three Months Ended September 30, | | Nine Months Ended September 30, | | ||||||||
| | 2013 | | 2012 | | 2013 | | 2012 | | ||||
| | (In Thousands) | | (In Thousands) | | ||||||||
Derivatives not designated as hedging instruments | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Mortgage Banking Derivatives Gain (Loss) | | $ | (315) | | $ | 28 | | $ | (555) | | $ | 418 | |
| | Before Tax Amount | | Tax Expense (Benefit) | | Net of Tax Amount | | |||
| | (In Thousands) | | |||||||
Three months ended September 30, 2013: | | | | | | | | | | |
Securities available for sale and transferred securities: | | | | | | | | | | |
Change in net unrealized gain/loss during the period | | $ | 120 | | $ | 42 | | $ | 78 | |
Reclassification adjustment for net gains included in net income | | | - | | | - | | | - | |
Total other comprehensive income (loss) | | $ | 120 | | $ | 42 | | $ | 78 | |
| | Before Tax Amount | | Tax Expense (Benefit) | | Net of Tax Amount | | |||
| | (In Thousands) | | |||||||
Nine months ended September 30, 2013: | | | | | | | | | | |
Securities available for sale and transferred securities: | | | | | | | | | | |
Change in net unrealized gain/loss during the period | | $ | (6,044) | | $ | (2,120) | | $ | (3,924) | |
Reclassification adjustment for net gains included in net income | | | (97) | | | (29) | | | (68) | |
Total other comprehensive income (loss) | | $ | (6,141) | | $ | (2,149) | | $ | (3,992) | |
| | Before Tax Amount | | Tax Expense (Benefit) | | Net of Tax Amount | | |||
| | (In Thousands) | | |||||||
Three months ended September 30, 2012: | | | | | | | | | | |
Securities available for sale and transferred securities: | | | | | | | | | | |
Change in net unrealized gain/loss during the period | | $ | 1,953 | | $ | 678 | | $ | 1,275 | |
Reclassification adjustment for net gains included in net income | | | (103) | | | (31) | | | (72) | |
Total other comprehensive income (loss) | | $ | 1,850 | | $ | 647 | | $ | 1,203 | |
| | Before Tax Amount | | Tax Expense (Benefit) | | Net of Tax Amount | | |||
| | (In Thousands) | | |||||||
Nine months ended September 30, 2012: | | | | | | | | | | |
Securities available for sale and transferred securities: | | | | | | | | | | |
Change in net unrealized gain/loss during the period | | $ | 3,397 | | $ | 1,161 | | $ | 2,236 | |
Reclassification adjustment for net gains included in net income | | | (528) | | | (158) | | | (370) | |
Total other comprehensive income (loss) | | $ | 2,869 | | $ | 1,003 | | $ | 1,866 | |
48 | ||
| | | | | | | | Accumulated | | |
| | Securities | | Post- | | Other | | |||
| | Available | | retirement | | Comprehensive | | |||
| | For Sale | | Benefit | | Income | | |||
| | (In Thousands) | | |||||||
Balance January 1, 2013 | | $ | 4,851 | | $ | (577) | | $ | 4,274 | |
Other comprehensive loss before reclassifications | | | (3,924) | | | - | | | (3,924) | |
Amounts reclassified from accumulated other comprehensive loss | | | (68) | | | - | | | (68) | |
| | | | | | | | | | |
Net other comprehensive loss during period | | | (3,992) | | | - | | | (3,992) | |
| | | | | | | | | | |
Balance September 30, 2013 | | $ | 859 | | $ | (577) | | $ | 282 | |
| | | | | | | | | | |
Balance January 1, 2012 | | $ | 4,704 | | $ | (707) | | $ | 3,997 | |
Other comprehensive loss before reclassifications | | | 2,236 | | | - | | | 2,236 | |
Amounts reclassified from accumulated other comprehensive loss | | | (370) | | | - | | | (370) | |
| | | | | | | | | | |
Net other comprehensive loss during period | | | 1,866 | | | - | | | 1,866 | |
| | | | | | | | | | |
Balance September 30, 2012 | | $ | 6,570 | | $ | (707) | | $ | 5,863 | |
49 | ||
50 | ||
51 | ||
52 | ||
53 | ||
54 | ||
55 | ||
56 | ||
57 | ||
| | Three Months Ended September 30, | | |||||||||||||||||
| | 2013 | | 2012 | | |||||||||||||||
| | Average | | | | | Yield/ | | | Average | | | | | Yield/ | | ||||
| | Balance | | Interest (1) | | Rate (2) | | | Balance | | Interest (1) | | Rate (2) | | ||||||
Interest-earning assets: | | | | | | | | | | | | | | | | | | | | |
Loans receivable | | $ | 1,548,718 | | $ | 17,214 | | | 4.41 | % | | $ | 1,481,995 | | $ | 18,024 | | | 4.84 | % |
Securities | | | 184,413 | | | 1,779 | | | 3.83 | | | | 274,327 | | | 2,245 | | | 3.37 | |
Interest bearing deposits | | | 64,142 | | | 44 | | | 0.27 | | | | 72,738 | | | 43 | | | 0.24 | |
FHLB stock | | | 19,353 | | | 205 | | | 4.20 | | | | 20,655 | | | 213 | | | 4.10 | |
Total interest-earning assets | | | 1,816,626 | | | 19,242 | | | 4.20 | | | | 1,849,715 | | | 20,525 | | | 4.44 | |
Non-interest-earning assets | | | 209,651 | | | | | | | | | | 197,424 | | | | | | | |
Total assets | | $ | 2,026,277 | | | | | | | | | $ | 2,047,139 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Interest-bearing liabilities: | | | | | | | | | | | | | | | | | | | | |
Deposits | | $ | 1,330,467 | | $ | 1,356 | | | 0.40 | % | | $ | 1,339,333 | | $ | 1,909 | | | 0.57 | % |
FHLB advances | | | 21,003 | | | 116 | | | 2.19 | | | | 81,812 | | | 759 | | | 3.69 | |
Subordinated debentures | | | 36,130 | | | 150 | | | 1.65 | | | | 36,141 | | | 172 | | | 1.89 | |
Notes payable | | | 52,005 | | | 58 | | | 0.44 | | | | 50,610 | | | 83 | | | 0.65 | |
Total interest-bearing liabilities | | | 1,439,605 | | | 1,680 | | | 0.46 | | | | 1,507,896 | | | 2,923 | | | 0.77 | |
Non-interest bearing deposits | | | 302,245 | | | - | | | | | | | 266,416 | | | - | | | | |
Total including non-interest bearing demand deposits | | | 1,741,850 | | | 1,680 | | | 0.38 | | | | 1,774,312 | | | 2,923 | | | 0.66 | |
Other non-interest-bearing liabilities | | | 18,939 | | | | | | | | | | 21,235 | | | | | | | |
Total liabilities | | | 1,760,789 | | | | | | | | | | 1,795,547 | | | | | | | |
Stockholders' equity | | | 265,488 | | | | | | | | | | 251,592 | | | | | | | |
Total liabilities and stock- holders' equity | | $ | 2,026,277 | | | | | | | | | $ | 2,047,139 | | | | | | | |
Net interest income; interest rate spread | | | | | $ | 17,562 | | | 3.74 | % | | | | | $ | 17,602 | | | 3.67 | % |
Net interest margin (3) | | | | | | | | | 3.84 | % | | | | | | | | | 3.80 | % |
Average interest-earning assets to average interest-bearing liabilities | | | | | | | | | 126 | % | | | | | | | | | 123 | % |
(1) | Interest on certain tax-exempt loans and securities is not taxable for Federal income tax purposes. In order to compare the tax-exempt yields on these assets to taxable yields, the interest earned on these assets is adjusted to a pre-tax equivalent amount based on the marginal corporate federal income tax rate of 35%. | |
(2) | Annualized. | |
(3) | Net interest margin is net interest income divided by average interest-earning assets. | |
58 | ||
| | Nine Months Ended September 30, | | |||||||||||||||||
| | 2013 | | 2012 | | |||||||||||||||
| | Average | | | | | Yield/ | | | Average | | | | | Yield/ | | ||||
| | Balance | | Interest (1) | | Rate (2) | | | Balance | | Interest (1) | | Rate (2) | | ||||||
Interest-earning assets: | | | | | | | | | | | | | | | | | | | | |
Loans receivable | | $ | 1,523,216 | | $ | 51,092 | | | 4.48 | % | | $ | 1,467,038 | | $ | 54,925 | | | 5.00 | % |
Securities | | | 192,309 | | | 5,373 | | | 3.74 | | | | 261,628 | | | 6,775 | | | 3.58 | |
Interest bearing deposits | | | 85,483 | | | 174 | | | 0.27 | | | | 128,711 | | | 249 | | | 0.26 | |
FHLB stock | | | 19,557 | | | 631 | | | 4.31 | | | | 20,655 | | | 656 | | | 4.24 | |
Total interest-earning assets | | | 1,820,565 | | | 57,270 | | | 4.21 | | | | 1,878,032 | | | 62,605 | | | 4.45 | |
Non-interest-earning assets | | | 207,732 | | | | | | | | | | 198,740 | | | | | | | |
Total assets | | $ | 2,028,297 | | | | | | | | | $ | 2,076,772 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Interest-bearing liabilities: | | | | | | | | | | | | | | | | | | | | |
Deposits | | $ | 1,343,564 | | $ | 4,514 | | | 0.45 | % | | $ | 1,357,499 | | $ | 6,394 | | | 0.63 | % |
FHLB advances | | | 16,078 | | | 298 | | | 2.48 | | | | 81,823 | | | 2,260 | | | 3.69 | |
Subordinated debentures | | | 36,134 | | | 452 | | | 1.67 | | | | 36,179 | | | 813 | | | 3.00 | |
Notes payable | | | 49,376 | | | 178 | | | 0.48 | | | | 52,312 | | | 284 | | | 0.73 | |
Total interest-bearing liabilities | | | 1,445,152 | | | 5,442 | | | 0.50 | | | | 1,527,813 | | | 9,751 | | | 0.85 | |
Non-interest bearing deposits | | | 299,190 | | | - | | | | | | | 257,540 | | | - | | | | |
Total including non-interest bearing demand deposits | | | 1,744,342 | | | 5,442 | | | 0.42 | | | | 1,785,353 | | | 9,751 | | | 0.73 | |
Other non-interest-bearing liabilities | | | 20,820 | | | | | | | | | | 20,595 | | | | | | | |
Total liabilities | | | 1,765,162 | | | | | | | | | | 1,805,948 | | | | | | | |
Stockholders' equity | | | 263,135 | | | | | | | | | | 270,824 | | | | | | | |
Total liabilities and stock- holders' equity | | $ | 2,028,297 | | | | | | | | | $ | 2,076,772 | | | | | | | |
Net interest income; interest rate spread | | | | | $ | 51,828 | | | 3.70 | % | | | | | $ | 52,854 | | | 3.60 | % |
Net interest margin (3) | | | | | | | | | 3.82 | % | | | | | | | | | 3.78 | % |
Average interest-earning assets to average interest-bearing liabilities | | | | | | | | | 126 | % | | | | | | | | | 123 | % |
(1) | Interest on certain tax-exempt loans and securities is not taxable for Federal income tax purposes. In order to compare the tax-exempt yields on these assets to taxable yields, the interest earned on these assets is adjusted to a pre-tax equivalent amount based on the marginal corporate federal income tax rate of 35%. | |
(2) | Annualized. | |
(3) | Net interest margin is net interest income divided by average interest-earning assets. | |
59 | ||
60 | ||
61 | ||
| 1) | Changes in international, national and local economic business conditions and developments, including the condition of various market segments. |
| 2) | Changes in the value of underlying collateral for collateral dependent loans. |
| 3) | Changes in the nature and volume in the loan portfolio. |
| 4) | The existence and effect of any concentrations of credit and changes in the level of such concentrations. |
| 5) | Changes in lending policies and procedures, including underwriting standards and collection, charge-off and recovery practices. |
| 6) | Changes in the quality and breadth of the loan review process. |
| 7) | Changes in the experience, ability and depth of lending management and staff. |
| 8) | Changes in the trends of the volume and severity of delinquent and classified loans, and changes in the volume of non-accrual loans, trouble debt restructuring, and other loan modifications. |
| 9) | Changes in the political and regulatory environment. |
62 | ||
63 | ||
| | September 30, | | | December 31, | | ||
| | 2013 | | | 2012 | | ||
| | | | | | | | |
| | (In thousands) | | |||||
Non-performing loans: | | | | | | | | |
Single-family residential | | $ | 3,159 | | | $ | 3,602 | |
Construction | | | - | | | | - | |
Non-residential and multi-family residential real estate | | | 18,426 | | | | 23,090 | |
Commercial | | | 8,749 | | | | 5,661 | |
Consumer finance | | | - | | | | - | |
Home equity and improvement | | | 178 | | | | 217 | |
Total non-performing loans | | | 30,512 | | | | 32,570 | |
Real estate owned and repossessed assets | | | 5,518 | | | | 3,805 | |
Total non-performing assets | | $ | 36,030 | | | $ | 36,375 | |
| | | | | | | | |
Allowance for loan losses as a percentage of total loans* | | | 1.66 | % | | | 1.75 | % |
Allowance for loan losses as a percentage of non-performing assets | | | 72.06 | % | | | 73.43 | % |
Allowance for loan losses as a percentage of non-performing loans | | | 85.09 | % | | | 82.01 | % |
Total non-performing assets as a percentage of total assets | | | 1.75 | % | | | 1.78 | % |
Total non-performing loans as a percentage of total loans* | | | 1.95 | % | | | 2.14 | % |
64 | ||
| For the Nine Months Ended September 30, 2013 | | As of September 30, 2013 | | |||||||||
| Net | | % of Total Net | | | Nonaccrual | | % of Total Non- | | ||||
| Charge-offs | | Charge-offs | | | Loans | | Accrual Loans | | ||||
| (in thousands) | | | (in thousands) | | ||||||||
Residential | $ | 313 | | | 14.93 | % | | $ | 3,159 | | | 10.35 | % |
Construction | | - | | | 0.00 | % | | | - | | | 0.00 | % |
Commercial real estate | | 862 | | | 41.13 | % | | | 18,426 | | | 60.39 | % |
Commercial | | 359 | | | 17.13 | % | | | 8,749 | | | 28.68 | % |
Consumer | | 20 | | | 0.95 | % | | | - | | | 0.00 | % |
Home equity and improvement | | 542 | | | 25.86 | % | | | 178 | | | 0.58 | % |
Total | $ | 2,096 | | | 100.00 | % | | $ | 30,512 | | | 100.00 | % |
| | For the Nine Months Ended September 30, 2012 | | As of September 30, 2012 | | |||||||||
| | Net | | % of Total Net | | | Nonaccrual | | % of Total Non- | | ||||
| | Charge-offs | | Charge-offs | | | Loans | | Accrual Loans | | ||||
| | (in thousands) | | | (in thousands) | | ||||||||
Residential | | $ | 1,389 | | | 9.11 | % | | $ | 5,784 | | | 15.30 | % |
Construction | | | - | | | 0.00 | % | | | - | | | 0.00 | % |
Commercial real estate | | | 10,029 | | | 65.76 | % | | | 24,991 | | | 66.11 | % |
Commercial | | | 3,212 | | | 21.06 | % | | | 6,670 | | | 17.64 | % |
Consumer | | | 29 | | | 0.19 | % | | | 15 | | | 0.04 | % |
Home equity and improvement | | | 591 | | | 3.88 | % | | | 343 | | | 0.91 | % |
Total | | $ | 15,250 | | | 100.00 | % | | $ | 37,803 | | | 100.00 | % |
65 | ||
| | For the Quarter Ended | | |||||||||||||
| | 3rd 2013 | | 2nd 2013 | | 1st 2013 | | 4th 2012 | | 3rd 2012 | | |||||
| | (Dollars in Thousands) | | |||||||||||||
| | | | | | | | | | | | | | | | |
Allowance at beginning of period | | $ | 26,270 | | $ | 26,459 | | $ | 26,711 | | $ | 26,310 | | $ | 26,409 | |
Provision for credit losses | | | 476 | | | 448 | | | 425 | | | 2,619 | | | 705 | |
Charge-offs: | | | | | | | | | | | | | | | | |
Residential | | | 78 | | | 184 | | | 206 | | | 976 | | | 217 | |
Commercial real estate | | | 829 | | | 283 | | | 266 | | | 595 | | | 780 | |
Commercial | | | 39 | | | 316 | | | 205 | | | 540 | | | 355 | |
Consumer finance | | | 33 | | | 8 | | | 46 | | | 59 | | | 19 | |
Home equity and improvement | | | 170 | | | 170 | | | 272 | | | 497 | | | 203 | |
Total charge-offs | | | 1,149 | | | 961 | | | 995 | | | 2,667 | | | 1,574 | |
Recoveries | | | 367 | | | 324 | | | 318 | | | 449 | | | 770 | |
Net charge-offs | | | 782 | | | 637 | | | 677 | | | 2,218 | | | 804 | |
Ending allowance | | $ | 25,964 | | $ | 26,270 | | $ | 26,459 | | $ | 26,711 | | $ | 26,310 | |
| | September 30, 2013 | | | June 30, 2013 | | | March 31, 2013 | | | December 31, 2012 | | | September 30, 2012 | | |||||||||||||||
| | | | | Percent of | | | | | | Percent of | | | | | | Percent of | | | | | | Percent of | | | | | | Percent of | |
| | | | | total loans | | | | | | total loans | | | | | | total loans | | | | | | total loans | | | | | | total loans | |
| | Amount | | by category | | | Amount | | by category | | | Amount | | by category | | | Amount | | by category | | | Amount | | by category | | |||||
Residential | | $ | 2,798 | | 12.14 | % | | $ | 3,197 | | 12.47 | % | | $ | 3,433 | | 13.00 | % | | $ | 3,506 | | 13.00 | % | | $ | 2,996 | | 13.75 | % |
Construction | | | 119 | | 3.77 | % | | | 83 | | 2.63 | % | | | 67 | | 2.20 | % | | | 75 | | 2.45 | % | | | 63 | | 2.06 | % |
Commercial real estate | | | 15,616 | | 51.93 | % | | | 15,565 | | 51.98 | % | | | 15,777 | | 52.74 | % | | | 14,899 | | 51.63 | % | | | 16,260 | | 51.87 | % |
Commercial | | | 5,546 | | 24.42 | % | | | 5,474 | | 25.10 | % | | | 5,304 | | 24.04 | % | | | 6,325 | | 24.85 | % | | | 5,103 | | 23.92 | % |
Consumer | | | 162 | | 1.05 | % | | | 165 | | 1.07 | % | | | 155 | | 1.02 | % | | | 147 | | 1.03 | % | | | 147 | | 1.10 | % |
Home equity and improvement | | | 1,723 | | 6.69 | % | | | 1,786 | | 6.75 | % | | | 1,723 | | 7.00 | % | | | 1,759 | | 7.04 | % | | | 1,741 | | 7.30 | % |
| | $ | 25,964 | | 100.00 | % | | $ | 26,270 | | 100.00 | % | | $ | 26,459 | | 100.00 | % | | $ | 26,711 | | 100.00 | % | | $ | 26,310 | | 100.00 | % |
| | 3rd Qtr 2013 | | | 2nd Qtr 2013 | | | 1st Qtr 2013 | | | 4th Qtr 2012 | | | 3rd Qtr 2012 | | |||||
Allowance for loan losses / loans* | | | 1.66 | % | | | 1.68 | % | | | 1.76 | % | | | 1.75 | % | | | 1.74 | % |
| | | | | | | | | | | | | | | | | | | | |
Allowance for loan losses to net charge-offs | | | 3320.20 | % | | | 4124.02 | % | | | 3908.27 | % | | | 1204.83 | % | | | 3272.39 | % |
| | | | | | | | | | | | | | | | | | | | |
Allowance for loan losses / non-performing assets | | | 72.06 | % | | | 74.64 | % | | | 66.82 | % | | | 73.43 | % | | | 64.73 | % |
| | | | | | | | | | | | | | | | | | | | |
Allowance for loan losses / non-performing loans | | | 85.09 | % | | | 91.69 | % | | | 74.99 | % | | | 82.01 | % | | | 69.60 | % |
| | | | | | | | | | | | | | | | | | | | |
Non-performing assets / loans plus REO* | | | 2.30 | % | | | 2.24 | % | | | 2.62 | % | | | 2.38 | % | | | 2.68 | % |
| | | | | | | | | | | | | | | | | | | | |
Non-performing assets / total assets | | | 1.75 | % | | | 1.70 | % | | | 1.94 | % | | | 1.78 | % | | | 1.98 | % |
| | | | | | | | | | | | | | | | | | | | |
Net charge-offs / average loans (annualized) | | | 0.20 | % | | | 0.17 | % | | | 0.18 | % | | | 0.59 | % | | | 0.22 | % |
66 | ||
67 | ||
68 | ||
69 | ||
70 | ||
71 | ||
| | Actual | | | Minimum Required for Adequately Capitalized | | | Minimum Required for Well Capitalized | | ||||||||||||
| | | Amount | | | Ratio | | | | Amount | | | Ratio | | | | Amount | | | Ratio | |
Tier 1 Capital (1) | | | | | | | | | | | | | | | | | | | | | |
Consolidated | | $ | 243,352 | | | 12.20 | % | | $ | 79,812 | | | 4.0 | % | | | N/A | | | N/A | |
First Federal Bank | | $ | 233,342 | | | 11.71 | % | | $ | 79,708 | | | 4.0 | % | | $ | 99,635 | | | 5.0 | % |
| | | | | | | | | | | | | | | | | | | | | |
Tier 1 Capital (to Risk Weighted Assets) (1) | | | | | | | | | | | | | | | | | | | | | |
Consolidated | | $ | 243,352 | | | 14.04 | % | | $ | 69,348 | | | 4.0 | % | | | N/A | | | N/A | |
First Federal Bank | | $ | 233,342 | | | 13.47 | % | | $ | 69,287 | | | 4.0 | % | | $ | 103,930 | | | 6.0 | % |
| | | | | | | | | | | | | | | | | | | | | |
Total Capital (to Risk Weighted Assets) (1) | | | | | | | | | | | | | | | | | | | | | |
Consolidated | | $ | 265,077 | | | 15.29 | % | | $ | 138,697 | | | 8.0 | % | | | N/A | | | N/A | |
First Federal Bank | | $ | 255,048 | | | 14.72 | % | | $ | 138,574 | | | 8.0 | % | | $ | 173,217 | | | 10.0 | % |
72 | ||
September 30, 2013 | |||||||
Economic Value of Equity | |||||||
Change in Rates | | $ Amount | | $ Change | | % Change | |
(Dollars in Thousands) | | ||||||
+400 bp | | 444,803 | | 33,725 | | 8.20 | % |
+ 300 bp | | 438,909 | | 27,831 | | 6.77 | % |
+ 200 bp | | 430,980 | | 19,902 | | 4.84 | % |
+ 100 bp | | 421,930 | | 10,853 | | 2.64 | % |
0 bp | | 411,078 | | | | | |
- 100 bp | | 397,512 | | (13,566) | | (3.30) | % |
December 31, 2012 | |||||||
Economic Value of Equity | |||||||
Change in Rates | | $ Amount | | $ Change | | % Change | |
(Dollars in Thousands) | | ||||||
+400 bp | | 415,094 | | 46,835 | | 12.72 | % |
+ 300 bp | | 407,337 | | 39,078 | | 10.61 | % |
+ 200 bp | | 398,150 | | 29,891 | | 8.12 | % |
+ 100 bp | | 387,482 | | 19,223 | | 5.22 | % |
0 bp | | 368,259 | | | | | |
- 100 bp | | 343,745 | | (24,514) | | (6.66) | % |
73 | ||
| Exhibit 3.1 | Articles of Incorporation (1) |
| | |
| Exhibit 3.2 | Code of Regulations (1) |
| | |
| Exhibit 3.3 | Amendment to Articles of Incorporation (2) |
| | |
| Exhibit 31.1 | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
| Exhibit 31.2 | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
| Exhibit 32.1 | Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
| Exhibit 32.2 | Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
(1) | Incorporated herein by reference to the like numbered exhibit in the Registrant’s Form S-1 (File No. 33-93354) |
(2) | Incorporated herein by reference to Exhibit 3 in Form 8-K filed December 8, 2008 (Film No. 081236105) |
74 | ||
| First Defiance Financial Corp. | |
| (Registrant) | |
| | |
Date: November 8, 2013 | By: | /s/ William J. Small |
| | William J. Small |
| | Chairman, President and |
| | Chief Executive Officer |
| | |
Date: November 8, 2013 | By: | /s/ Donald P. Hileman |
| | Donald P. Hileman |
| | Executive Vice President and |
| | Chief Financial Officer |
| | (Principal Financial Officer) |
75 | ||