R
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
£
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Indiana
|
35-2042093
|
|||
(State or other jurisdiction
|
(I.R.S. Employer
|
|||
of incorporation or organization)
|
Identification No.)
|
|||
707 Ridge Road, Munster, Indiana
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46321
|
|||
(Address of principal executive offices)
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(Zip code)
|
|||
(219) 836-2960
|
||||
(Registrant’s telephone number, including area code)
|
Large accelerated filer £
|
Accelerated filer £
|
|
Non-accelerated filer £ (Do not check if a smaller reporting company)
|
Smaller reporting company R
|
Page
|
||
PART I - FINANCIAL INFORMATION
|
||
Financial Statements (Unaudited)
|
||
Condensed Consolidated Statements of Condition
|
3
|
|
Condensed Consolidated Statements of Income
|
4
|
|
Condensed Consolidated Statements of Changes in Shareholders’ Equity
|
5
|
|
Condensed Consolidated Statements of Cash Flows
|
6
|
|
Notes to Condensed Consolidated Financial Statements
|
7
|
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
26
|
|
Quantitative and Qualitative Disclosures about Market Risk
|
51
|
|
Controls and Procedures
|
53
|
|
PART II - OTHER INFORMATION
|
||
Legal Proceedings
|
53
|
|
Risk Factors
|
53
|
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
54
|
|
Defaults Upon Senior Securities
|
54
|
|
(Removed and Reserved)
|
54
|
|
Other Information
|
54
|
|
Exhibits
|
54
|
|
55
|
||
Certifications of Principal Executive Officer and Principal Financial Officer | 56 | |
Exhibit 31.1 | ||
Exhibit 31.2 | ||
Exhibit 32.0 |
March 31, 2011
|
December 31, 2010
|
|||||||
(Unaudited)
|
||||||||
ASSETS
|
(Dollars in thousands)
|
|||||||
Cash and amounts due from depository institutions
|
$ | 19,211 | $ | 24,624 | ||||
Interest-bearing deposits
|
38,757 | 37,130 | ||||||
Cash and cash equivalents
|
57,968 | 61,754 | ||||||
Investment securities available-for-sale, at fair value
|
239,012 | 197,101 | ||||||
Investment securities held-to-maturity, at cost
|
16,764 | 17,201 | ||||||
Federal Home Loan Bank stock, at cost
|
10,282 | 20,282 | ||||||
Loans receivable
|
724,223 | 732,584 | ||||||
Allowance for loan losses
|
(17,095 | ) | (17,179 | ) | ||||
Net loans
|
707,128 | 715,405 | ||||||
Bank-owned life insurance
|
35,669 | 35,463 | ||||||
Accrued interest receivable
|
3,265 | 3,162 | ||||||
Other real estate owned
|
23,567 | 22,324 | ||||||
Office properties and equipment
|
18,514 | 20,464 | ||||||
Net deferred tax assets
|
17,146 | 17,923 | ||||||
Other assets
|
14,726 | 10,597 | ||||||
Total assets
|
$ | 1,144,041 | $ | 1,121,676 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
||||||||
Deposits
|
$ | 980,517 | $ | 945,884 | ||||
Borrowed funds
|
40,658 | 53,550 | ||||||
Advance payments by borrowers for taxes and insurance
|
4,785 | 4,618 | ||||||
Other liabilities
|
4,317 | 4,696 | ||||||
Total liabilities
|
1,030,277 | 1,008,748 | ||||||
Commitments and contingencies
|
||||||||
Shareholders’ equity:
|
||||||||
Preferred stock, $.01 par value; 15,000,000 shares authorized
|
— | — | ||||||
Common stock, $.01 par value; 85,000,000 shares authorized;
|
||||||||
23,423,306 shares issued; 10,869,236 and 10,850,040 shares
outstanding
|
234 | 234 | ||||||
Additional paid-in capital
|
186,929 | 187,164 | ||||||
Retained earnings
|
83,957 | 83,592 | ||||||
Treasury stock, at cost; 12,554,070 and 12,573,266 shares
|
(154,877 | ) | (155,112 | ) | ||||
Accumulated other comprehensive loss, net of tax
|
(2,479 | ) | (2,950 | ) | ||||
Total shareholders’ equity
|
113,764 | 112,928 | ||||||
Total liabilities and shareholders’ equity
|
$ | 1,144,041 | $ | 1,121,676 |
Three Months Ended March 31,
|
||||||||
2011
|
2010
|
|||||||
(Unaudited)
|
||||||||
(Dollars in thousands, except
share and per share data)
|
||||||||
Interest income:
|
||||||||
Loans receivable
|
$ | 8,811 | $ | 9,678 | ||||
Investment securities
|
2,045 | 2,213 | ||||||
Other interest-earning assets
|
157 | 124 | ||||||
Total interest income
|
11,013 | 12,015 | ||||||
Interest expense:
|
||||||||
Deposits
|
1,894 | 2,053 | ||||||
Borrowed funds
|
262 | 519 | ||||||
Total interest expense
|
2,156 | 2,572 | ||||||
Net interest income
|
8,857 | 9,443 | ||||||
Provision for loan losses
|
903 | 1,710 | ||||||
Net interest income after provision for loan losses
|
7,954 | 7,733 | ||||||
Non-interest income:
|
||||||||
Service charges and other fees
|
1,076 | 1,220 | ||||||
Card-based fees
|
475 | 437 | ||||||
Commission income
|
45 | 54 | ||||||
Net gain (loss) on sale of:
|
||||||||
Investment securities
|
519 | 456 | ||||||
Loans receivable
|
32 | ― | ||||||
Other assets
|
(5 | ) | 1 | |||||
Income from bank-owned life insurance
|
206 | 223 | ||||||
Other income
|
103 | 150 | ||||||
Total non-interest income
|
2,451 | 2,541 | ||||||
Non-interest expense:
|
||||||||
Compensation and employee benefits
|
5,239 | 4,668 | ||||||
Net occupancy expense
|
765 | 755 | ||||||
FDIC insurance premiums and OTS assessments
|
653 | 600 | ||||||
Professional fees
|
388 | 593 | ||||||
Furniture and equipment expense
|
463 | 533 | ||||||
Data processing
|
442 | 430 | ||||||
Marketing
|
187 | 114 | ||||||
Other real estate owned related expense, net
|
592 | 631 | ||||||
Loan collection expense
|
120 | 169 | ||||||
Severance and early retirement expense
|
― | 4 | ||||||
Other general and administrative expenses
|
1,118 | 970 | ||||||
Total non-interest expense
|
9,967 | 9,467 | ||||||
Income before income taxes
|
438 | 807 | ||||||
Income tax (benefit) expense
|
(34 | ) | 109 | |||||
Net income
|
$ | 472 | $ | 698 | ||||
Per share data:
|
||||||||
Basic earnings per share
|
$ | .04 | $ | .07 | ||||
Diluted earnings per share
|
.04 | .07 | ||||||
Cash dividends declared per share
|
.01 | .01 | ||||||
Weighted-average common and common share equivalents outstanding:
|
||||||||
Basic
|
10,650,743 | 10,581,770 | ||||||
Diluted
|
10,706,677 | 10,673,776 |
Accumulated | |||||||||||||||||||||||
Additional | Other | ||||||||||||||||||||||
Common | Paid-In | Retained | Treasury | Comprehensive | |||||||||||||||||||
Stock | Capital | Earnings | Stock | Loss | Total | ||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||
(Dollars in thousands, except per share data) | |||||||||||||||||||||||
Balance at January 1, 2010
|
$ |
234
|
$ |
188,930
|
$ |
80,564
|
$ |
(157,041
|
)
|
$ |
(2,314
|
) |
$
|
110,373
|
|||||||||
Net income
|
—
|
—
|
698
|
|
—
|
—
|
698
|
||||||||||||||||
Other comprehensive income:
|
|||||||||||||||||||||||
Change in unrealized appreciation
|
|||||||||||||||||||||||
on investment securities available-for-sale,
|
|||||||||||||||||||||||
net of reclassification and tax
|
—
|
—
|
—
|
—
|
229
|
229
|
|||||||||||||||||
Total comprehensive income
|
—
|
—
|
—
|
—
|
—
|
927
|
|||||||||||||||||
Net purchases of Rabbi Trust shares
|
—
|
—
|
—
|
(1
|
)
|
—
|
(1
|
)
|
|||||||||||||||
Forfeiture of restricted stock awards
|
—
|
205
|
—
|
(205
|
)
|
—
|
—
|
||||||||||||||||
Unearned compensation restricted stock award
|
—
|
(395
|
) |
|
—
|
395
|
—
|
—
|
|||||||||||||||
Dividends declared on common stock
($.01 per share)
|
—
|
—
|
(106
|
)
|
—
|
—
|
(106
|
)
|
|||||||||||||||
Balance at March 31, 2010
|
$ |
234
|
$ |
188,740
|
$ |
81,156
|
$ |
(156,852
|
)
|
$ |
(2,085
|
) |
$
|
111,193
|
|||||||||
Balance at January 1, 2011
|
$ |
234
|
$ |
187,164
|
$ |
83,592
|
$ |
(155,112
|
)
|
$ |
(2,950
|
) |
$
|
112,928
|
|||||||||
Net income
|
—
|
—
|
472
|
—
|
—
|
472
|
|||||||||||||||||
Other comprehensive income:
|
|||||||||||||||||||||||
Change in unrealized appreciation
|
|||||||||||||||||||||||
on investment securities available-for-sale,
|
|||||||||||||||||||||||
net of reclassification and tax
|
—
|
—
|
—
|
—
|
471
|
471
|
|||||||||||||||||
Total comprehensive income
|
—
|
—
|
—
|
—
|
—
|
943
|
|||||||||||||||||
Forfeiture of restricted stock awards
|
—
|
437
|
2
|
(437
|
)
|
—
|
2
|
||||||||||||||||
Unearned compensation restricted stock awards
|
—
|
(672
|
) |
|
—
|
672
|
—
|
—
|
|||||||||||||||
Dividends declared on common stock
($.01 per share)
|
—
|
—
|
(109
|
)
|
—
|
—
|
(109
|
)
|
|||||||||||||||
Balance at March 31, 2011
|
$ |
234
|
$ |
186,929
|
$ |
83,957
|
$ |
(154,877
|
)
|
$ |
(2,479
|
) |
$
|
113,764
|
Three Months Ended
March 31,
|
||||||||
2011
|
2010
|
|||||||
(Unaudited)
|
||||||||
(Dollars in thousands)
|
||||||||
OPERATING ACTIVITIES:
|
||||||||
Net income
|
$ | 472 | $ | 698 | ||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Provision for loan losses
|
903 | 1,710 | ||||||
Depreciation and amortization
|
380 | 404 | ||||||
Net discount accretion on investment securities available-for-sale
|
(83 | ) | (198 | ) | ||||
Net premium amortization on investment securities held-to-maturity
|
40 | — | ||||||
Net (gain) loss on sale of:
|
||||||||
Loans held-for-sale
|
(32 | ) | — | |||||
Investment securities
|
(519 | ) | (456 | ) | ||||
Other assets
|
5 | (1 | ) | |||||
Write down on transfer of future branch sites to other real estate owned
|
396 | — | ||||||
Write down of construction-in-progress
|
106 | — | ||||||
Deferred income tax expense
|
515 | 110 | ||||||
Proceeds from sale of loans held-for-sale
|
1,231 | — | ||||||
Origination of loans held-for-sale
|
(899 | ) | — | |||||
Increase in cash surrender value of bank-owned life insurance
|
(206 | ) | (223 | ) | ||||
(Increase) decrease in other assets
|
(4,456 | ) | 1,275 | |||||
Increase (decrease) in other liabilities
|
(125 | ) | 288 | |||||
Net cash provided by (used in) operating activities
|
(2,272 | ) | 3,607 | |||||
INVESTING ACTIVITIES:
|
||||||||
Proceeds from sale of:
|
||||||||
Investment securities, available-for-sale
|
6,405 | 9,603 | ||||||
Other real estate owned
|
402 | 57 | ||||||
Proceeds from maturities and paydowns of:
|
||||||||
Investment securities, available-for-sale
|
21,086 | 19,043 | ||||||
Investment securities, held-to-maturity
|
397 | — | ||||||
Purchases of:
|
||||||||
Investment securities, available-for-sale
|
(68,070 | ) | (22,871 | ) | ||||
Properties and equipment
|
(43 | ) | (150 | ) | ||||
Redemption of Federal Home Loan Bank stock
|
10,000 | — | ||||||
Net loan repayments (fundings)
|
6,537 | (4,059 | ) | |||||
Net cash flows provided by (used in) investing activities
|
(23,286 | ) | 1,623 | |||||
FINANCING ACTIVITIES:
|
||||||||
Net increase (decrease) in:
|
||||||||
Deposit accounts
|
34,606 | 37,348 | ||||||
Advance payments by borrowers for taxes and insurance
|
167 | 493 | ||||||
Short-term borrowed funds
|
2,158 | (9,321 | ) | |||||
Proceeds from Federal Home Loan Bank advances
|
— | 18,000 | ||||||
Repayments of Federal Home Loan Bank advances
|
(15,050 | ) | (37,047 | ) | ||||
Dividends paid on common stock
|
(109 | ) | (109 | ) | ||||
Net purchase of Rabbi Trust shares
|
— | (1 | ) | |||||
Net cash flows provided by financing activities
|
21,772 | 9,363 | ||||||
Increase (decrease) in cash and cash equivalents
|
(3,786 | ) | 14,593 | |||||
Cash and cash equivalents at beginning of period
|
61,754 | 24,428 | ||||||
Cash and cash equivalents at end of period
|
$ | 57,968 | $ | 39,021 | ||||
Supplemental disclosures:
|
||||||||
Loans and land transferred to other real estate owned
|
$ | 1,672 | $ | 1,845 | ||||
Cash paid for interest on deposits
|
1,890 | 2,044 | ||||||
Cash paid for interest on borrowed funds
|
289 | 543 | ||||||
Cash paid for income taxes
|
— | 275 |
1.
|
Basis of Presentation
|
2.
|
Earnings Per Share
|
Three Months Ended
March 31,
|
|||||||
2011
|
2010
|
||||||
(Dollars in thousands, except per
share data)
|
|||||||
Net income
|
$ |
472
|
$ |
698
|
|||
Weighted-average common shares:
|
|||||||
Outstanding
|
10,650,743
|
10,581,770
|
|||||
Equivalents (1)
|
55,934
|
92,006
|
|||||
Total
|
10,706,677
|
10,673,776
|
|||||
Earnings per share:
|
|||||||
Basic
|
$ |
.04
|
$ |
.07
|
|||
Diluted
|
.04
|
.07
|
|||||
Number of anti-dilutive stock options excluded from the diluted
earnings per share calculation
|
647,995
|
740,995
|
|||||
Weighted-average exercise price of anti-dilutive option shares
|
$ |
13.46
|
$ |
13.24
|
(1)
|
|
Assumes exercise of dilutive stock options, a portion of the unearned restricted stock awards, and treasury shares held in Rabbi Trust accounts.
|
Gross
|
Gross
|
|||||||||||||||||||
Par
|
Amortized
|
Unrealized
|
Unrealized
|
Fair
|
||||||||||||||||
Value
|
Cost
|
Gains
|
Losses
|
Value
|
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
At March 31, 2011:
|
||||||||||||||||||||
Available-for-sale investment securities:
|
||||||||||||||||||||
U.S. Treasury securities
|
$ | 21,000 | $ | 20,946 | $ | 24 | $ | (202 | ) | $ | 20,768 | |||||||||
Government sponsored entity (GSE) securities
|
68,800 | 69,724 | 370 | (219 | ) | 69,875 | ||||||||||||||
Corporate bonds
|
4,000 | 3,645 | — | (43 | ) | 3,602 | ||||||||||||||
Collateralized mortgage obligations
|
54,340 | 51,021 | 2,062 | (97 | ) | 52,986 | ||||||||||||||
Commercial mortgage-backed securities
|
70,218 | 71,341 | 1,418 | (252 | ) | 72,507 | ||||||||||||||
Pooled trust preferred securities
|
29,285 | 26,386 | — | (7,124 | ) | 19,262 | ||||||||||||||
GSE preferred stock
|
200 | — | 12 | — | 12 | |||||||||||||||
Total available-for-sale securities
|
$ | 247,843 | $ | 243,063 | $ | 3,886 | $ | (7,937 | ) | $ | 239,012 | |||||||||
Held-to-maturity investment securities:
|
||||||||||||||||||||
Asset backed securities
|
$ | 9,447 | $ | 9,824 | $ | 112 | $ | — | $ | 9,936 | ||||||||||
Municipals
|
6,940 | 6,940 | 113 | — | 7,053 | |||||||||||||||
Total held-to-maturity investment securities
|
$ | 16,387 | $ | 16,764 | $ | 225 | $ | — | $ | 16,989 |
Gross
|
Gross
|
|||||||||||||||||||
Par
|
Amortized
|
Unrealized
|
Unrealized
|
Fair
|
||||||||||||||||
Value
|
Cost
|
Gains
|
Losses
|
Value
|
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
At December 31, 2010:
|
||||||||||||||||||||
Available-for-sale investment securities:
|
||||||||||||||||||||
U.S. Treasury securities
|
$ | 15,000 | $ | 14,975 | $ | 3 | $ | (159 | ) | $ | 14,819 | |||||||||
Government sponsored entity (GSE) securities
|
30,800 | 30,717 | 421 | (118 | ) | 31,020 | ||||||||||||||
Corporate bonds
|
4,000 | 3,629 | — | (43 | ) | 3,586 | ||||||||||||||
Collateralized mortgage obligations
|
62,512 | 59,037 | 2,071 | (353 | ) | 60,755 | ||||||||||||||
Commercial mortgage-backed securities
|
66,282 | 67,052 | 1,804 | (158 | ) | 68,698 | ||||||||||||||
Pooled trust preferred securities
|
29,409 | 26,473 | — | (8,348 | ) | 18,125 | ||||||||||||||
GSE preferred stock
|
5,837 | — | 98 | — | 98 | |||||||||||||||
Total available-for-sale securities
|
$ | 213,840 | $ | 201,883 | $ | 4,397 | $ | (9,179 | ) | $ | 197,101 | |||||||||
Held-to-maturity investment securities:
|
||||||||||||||||||||
Asset backed securities
|
$ | 9,844 | $ | 10,261 | $ | 126 | $ | (7 | ) | $ | 10,380 | |||||||||
Municipals
|
6,940 | 6,940 | 106 | — | 7,046 | |||||||||||||||
Total held-to-maturity investment securities
|
$ | 16,784 | $ | 17,201 | $ | 232 | $ | (7 | ) | $ | 17,426 |
March 31, 2011
|
||||||||||||||||||||||||
Less than 12 Months
|
12 Months or More
|
Total
|
||||||||||||||||||||||
Fair
|
Unrealized
|
Fair
|
Unrealized
|
Fair
|
Unrealized
|
|||||||||||||||||||
Value
|
Losses
|
Value
|
Losses
|
Value
|
Losses
|
|||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||
U.S. Treasury Securities
|
$ | 14,773 | $ | (202 | ) | $ | — | $ | — | $ | 14,773 | $ | (202 | ) | ||||||||||
GSE securities
|
29,478 | (219 | ) | — | — | 29,478 | (219 | ) | ||||||||||||||||
Corporate bonds
|
3,602 | (43 | ) | — | — | 3,602 | (43 | ) | ||||||||||||||||
Collateralized mortgage obligations
|
8,557 | (81 | ) | 39 | (16 | ) | 8,596 | (97 | ) | |||||||||||||||
Commercial mortgage-backed securities
|
21,538 | (252 | ) | — | — | 21,538 | (252 | ) | ||||||||||||||||
Pooled trust preferred securities
|
— | — | 19,262 | (7,124 | ) | 19,262 | (7,124 | ) | ||||||||||||||||
$ | 77,948 | $ | (797 | ) | $ | 19,301 | $ | (7,140 | ) | $ | 97,249 | $ | (7,937 | ) |
December 31, 2010
|
||||||||||||||||||||||||
Less than 12 Months
|
12 Months or More
|
Total
|
||||||||||||||||||||||
Fair
|
Unrealized
|
Fair
|
Unrealized
|
Fair
|
Unrealized
|
|||||||||||||||||||
Value
|
Losses
|
Value
|
Losses
|
Value
|
Losses
|
|||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||
U.S. Treasury securities
|
$ | 11,905 | $ | (159 | ) | $ | — | $ | — | $ | 11,905 | $ | (159 | ) | ||||||||||
GSE securities
|
5,870 | (118 | ) | — | — | 5,870 | (118 | ) | ||||||||||||||||
Corporate bonds
|
3,586 | (43 | ) | — | — | 3,586 | (43 | ) | ||||||||||||||||
Collateralized mortgage obligations
|
8,538 | (323 | ) | 1,204 | (30 | ) | 9,742 | (353 | ) | |||||||||||||||
Commercial mortgage-backed securities
|
10,255 | (158 | ) | — | — | 10,255 | (158 | ) | ||||||||||||||||
Pooled trust preferred securities
|
— | — | 18,125 | (8,348 | ) | 18,125 | (8,348 | ) | ||||||||||||||||
$ | 40,154 | $ | (801 | ) | $ | 19,329 | $ | (8,378 | ) | $ | 59,483 | $ | (9,179 | ) |
Available-for-Sale
|
||||||||
Amortized
|
Fair
|
|||||||
Cost
|
Value
|
|||||||
(Dollars in thousands)
|
||||||||
U.S. Treasury securities:
|
||||||||
Due in one year or less
|
$ | 3,013 | $ | 3,015 | ||||
Due after one year through five years
|
17,933 | 17,753 | ||||||
GSE securities — Due after one year through five years
|
69,724 | 69,875 | ||||||
Corporate bonds — Due after five years
|
3,645 | 3,602 | ||||||
Collateralized mortgage obligations:
|
||||||||
Due after one year through five years
|
1,047 | 1,054 | ||||||
Due after five years
|
49,973 | 51,932 | ||||||
Commercial mortgage-backed securities
|
71,341 | 72,507 | ||||||
Pooled trust preferred securities
|
26,386 | 19,262 | ||||||
GSE preferred stock
|
— | 12 | ||||||
$ | 243,062 | $ | 239,012 |
Held-to-Maturity
|
||||||||
Amortized
|
Fair
|
|||||||
Cost
|
Value
|
|||||||
(Dollars in thousands)
|
||||||||
Asset backed securities — Due after five years
|
$ | 9,824 | $ | 9,936 | ||||
State and municipal securities:
|
||||||||
Due in one year or less
|
2,970 | 3,003 | ||||||
Due after one year through five years
|
3,970 | 4,050 | ||||||
$ | 16,764 | $ | 16,989 |
March 31,
2011
|
March 31,
2010
|
|||||||
(Dollars in thousands)
|
||||||||
Available-for-sale securities:
|
||||||||
Gross realized gains
|
$ |
519
|
$ |
456
|
||||
Gross realized losses
|
—
|
—
|
||||||
Impairment losses
|
—
|
—
|
||||||
Net realized gains
|
$ |
519
|
$ |
456
|
||||
Income tax expense on realized gains
|
$ |
189
|
$ |
155
|
March 31,
2011
|
December 31,
2010
|
|||||||
(Dollars in thousands)
|
||||||||
Commercial loans:
|
||||||||
Commercial and industrial
|
$ | 68,381 | $ | 74,940 | ||||
Commercial real estate – owner occupied
|
102,053 | 99,435 | ||||||
Commercial real estate – non-owner occupied
|
191,443 | 191,998 | ||||||
Commercial real estate – multifamily
|
74,552 | 72,080 | ||||||
Commercial construction and land development
|
21,130 | 24,310 | ||||||
Commercial participations
|
22,419 | 23,594 | ||||||
Total commercial loans
|
479,978 | 486,357 | ||||||
Retail loans:
|
||||||||
One-to-four family residential
|
183,623 | 185,321 | ||||||
Home equity lines of credit
|
55,649 | 56,177 | ||||||
Retail construction
|
3,328 | 3,176 | ||||||
Other
|
2,192 | 2,122 | ||||||
Total retail loans
|
244,792 | 246,796 | ||||||
Total loans receivable
|
724,770 | 733,153 | ||||||
Net deferred loan fees
|
(547 | ) | (569 | ) | ||||
Total loans receivable, net of deferred fees
|
$ | 724,223 | $ | 732,584 |
Commercial
|
Commercial Real Estate —
|
Construction
|
One-to-four
|
Total
|
|||||||||||||||||||||||||||||
and
|
Owner
|
Non-Owner
|
and Land
|
Commercial
|
Family
|
Retail
|
Loans
|
||||||||||||||||||||||||||
Industrial
|
Occupied
|
Occupied
|
Multifamily
|
Development
|
Participations
|
Residential
|
HELOC
|
Construction
|
Other
|
Receivable
|
|||||||||||||||||||||||
(Dollars in thousands)
|
|||||||||||||||||||||||||||||||||
Allowance for loan losses:
|
|||||||||||||||||||||||||||||||||
Balance at12/31/10
|
$ 1,279
|
$ 1,090
|
$ 6,906
|
$ 350
|
$ 188
|
$ 4,559
|
$ 1,356
|
$ 1,309
|
$ 7
|
$ 135
|
$ 17,179
|
||||||||||||||||||||||
Provision for loan losses
|
(13
|
)
|
(78
|
)
|
(197
|
)
|
315
|
(30
|
)
|
863
|
(11
|
)
|
65
|
2
|
(13
|
)
|
903
|
||||||||||||||||
Loans charged-off:
|
|||||||||||||||||||||||||||||||||
Current year charge-offs
|
—
|
—
|
—
|
(204
|
)
|
(4
|
)
|
(703
|
)
|
(23
|
)
|
(52
|
)
|
—
|
(28
|
)
|
(1,014
|
)
|
|||||||||||||||
Previously established
specific allowance
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||||||
Total loans charged-
off:
|
—
|
—
|
—
|
(204
|
)
|
(4
|
)
|
(703
|
)
|
(23
|
)
|
(52
|
)
|
—
|
(28
|
)
|
(1,014
|
)
|
|||||||||||||||
Recoveries
|
2
|
—
|
8
|
—
|
—
|
—
|
1
|
5
|
—
|
11
|
27
|
||||||||||||||||||||||
Balance at 3/31/11
|
$ 1,268
|
$ 1,012
|
$ 6,717
|
$ 461
|
$ 154
|
$ 4,719
|
$ 1,323
|
$ 1,327
|
$ 9
|
$ 105
|
$ 17,095
|
||||||||||||||||||||||
Ending balance:
|
|||||||||||||||||||||||||||||||||
Individually evaluated
for impairment
|
$ —
|
$ 380
|
$ 4,387
|
$ —
|
$ —
|
$ 3,573
|
$ —
|
$ —
|
$ —
|
$ —
|
$ 8,340
|
||||||||||||||||||||||
Collectively evaluated
for impairment
|
$ 1,268
|
$ 632
|
$ 2,330
|
$ 461
|
$ 154
|
$ 1,146
|
$ 1,323
|
$ 1,327
|
$ 9
|
$ 105
|
$ 8,755
|
||||||||||||||||||||||
Loans receivable:
|
|||||||||||||||||||||||||||||||||
Balance at 3/31/11 | $ 68,381 | $ 102,053 | $ 191,443 | $ 74,552 | $ 21,130 | $ 22,419 | $ 183,623 | $ 55,649 | $ 3,328 | $ 2,192 | $ 724,770 | ||||||||||||||||||||||
Individually evaluated
for impairment
|
$ 3,168 | $ 12,313 | $ 24,400 | $ 263 | $ 9,183 | $ 8,796 |
$ —
|
$ —
|
$ —
|
$ —
|
$ 58,123 | ||||||||||||||||||||||
Collectively evaluated
for impairment
|
$ 65,213 | $ 89,740 | $ 167,043 | $ 74,289 | $ 11,947 | $ 13,623 | $ 183,623 | $ 55,649 | $ 3,328 | $ 2,192 | $ 666,647 |
Commercial
|
Commercial Real Estate —
|
Construction
|
One-to-four
|
Total
|
|||||||||||||||||||||||||||||
and
|
Owner
|
Non-Owner
|
and Land
|
Commercial
|
Family
|
Retail
|
Loans
|
||||||||||||||||||||||||||
Industrial
|
Occupied
|
Occupied
|
Multifamily
|
Development
|
Participations
|
Residential
|
HELOC
|
Construction
|
Other
|
Receivable
|
|||||||||||||||||||||||
(Dollars in thousands)
|
|||||||||||||||||||||||||||||||||
Allowance for loan losses:
|
|||||||||||||||||||||||||||||||||
Balance at12/31/10
|
$ 1,279
|
$ 1,090
|
$ 6,906
|
$ 350
|
$ 188
|
$ 4,559
|
$ 1,356
|
$ 1,309
|
$ 7
|
$ 135
|
$ 17,179
|
||||||||||||||||||||||
Ending balance:
|
|||||||||||||||||||||||||||||||||
Individually evaluated
for impairment
|
$ —
|
$ 433
|
$ 4,492
|
$ —
|
$ —
|
$ 3,497
|
$ —
|
$ —
|
$ —
|
$ —
|
$ 8,422
|
||||||||||||||||||||||
Collectively evaluated
for impairment
|
$ 1,279
|
$ 657
|
$ 2,414
|
$ 350
|
$ 188
|
$ 1,062
|
$ 1,356
|
$ 1,309
|
$ 7
|
$ 135
|
$ 8,757
|
||||||||||||||||||||||
Loans receivable:
|
|||||||||||||||||||||||||||||||||
Balance at 12/31/10 | $ 74,940 | $ 99,435 | $ 191,998 | $ 72,080 | $ 24,310 | $ 23,594 | $ 185,321 | $ 56,177 | $ 3,176 | $ 2,122 | $ 733,153 | ||||||||||||||||||||||
Individually evaluated
for impairment
|
$ 3,692 | $ 11,135 | $ 21,218 | $ 264 | $ 9,183 | $ 9,499 |
$ —
|
$ —
|
$ —
|
$ —
|
$ 54,991 | ||||||||||||||||||||||
Collectively evaluated
for impairment
|
$ 71,248 | $ 88,300 | $ 170,780 | $ 71,816 | $ 15,127 | $ 14,095 | $ 185,321 | $ 56,177 | $ 3,176 | $ 2,122 | $ 678,162 |
●
|
Pass. Loans that meet the conservative underwriting guidelines that include core credit attributes noted above as measured by the loan grading matrices at levels that are in excess of the minimum amounts required to adequately service the loans.
|
●
|
Pass Watch. Loans which are performing per their contractual terms and are not necessarily demonstrating signs of credit or operational weakness, including but not limited to delinquency. Loans in this category are monitored by management for timely payments. Current financial information may be pending or, based upon the most recent analysis of the loan, possess credit attributes that are sufficient to adequately service the loan, but are less than the parameters required for a pass risk rating. This rating is considered transitional because management does not have current financial information to determine the appropriate risk grade or the quality of the loan appears to be changing. Loans may be graded as pass watch when a single event may have occurred that could be indicative of an emerging issue or indicate trending that would warrant a change in the risk rating.
|
●
|
Special Mention. Loans that have a potential weakness that will be closely monitored by management. A credit graded special mention does not expose the Company to elevated risk that would warrant an adverse classification.
|
●
|
Substandard. Loans that are inadequately protected by the current net worth and paying capacity of the borrower, guarantor, or the collateral pledged. Loans classified as substandard have a well-defined weakness or weaknesses, characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.
|
●
|
Doubtful. Loans that have the same weaknesses as those classified as substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.
|
Special
|
||||||||||||||||||||||||
Pass
|
Pass Watch
|
Mention
|
Substandard
|
Doubtful
|
Total
|
|||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||
Commercial loans:
|
||||||||||||||||||||||||
Commercial and industrial
|
$ | 60,944 | $ | 5,915 | $ | 937 | $ | 578 | $ | 7 | $ | 68,381 | ||||||||||||
Commercial real estate – owner
occupied
|
66,639 | 20,636 | 1,030 | 13,748 | — | 102,053 | ||||||||||||||||||
Commercial real estate –
non-owner occupied
|
142,744 | 23,047 | 2,106 | 23,546 | — | 191,443 | ||||||||||||||||||
Commercial real estate – multifamily
|
70,660 | 2,381 | — | 1,511 | — | 74,552 | ||||||||||||||||||
Commercial construction and
land development
|
6,517 | 4,894 | — | 9,719 | — | 21,130 | ||||||||||||||||||
Commercial participations
|
13,623 | — | — | 8,796 | — | 22,419 | ||||||||||||||||||
Total commercial loans
|
361,127 | 56,873 | 4,073 | 57,898 | 7 | 479,978 | ||||||||||||||||||
Retail loans:
|
||||||||||||||||||||||||
One-to-four family residential
|
179,829 | — | — | 3,794 | — | 183,623 | ||||||||||||||||||
Home equity lines of credit
|
55,038 | — | — | 611 | — | 55,649 | ||||||||||||||||||
Retail construction
|
3,159 | — | — | 169 | — | 3,328 | ||||||||||||||||||
Other
|
2,188 | — | — | 4 | — | 2,192 | ||||||||||||||||||
Total retail loans
|
240,214 | — | — | 4,578 | — | 244,792 | ||||||||||||||||||
Total loans
|
$ | 601,341 | 56,873 | $ | 4,073 | $ | 62,476 | $ | 7 | $ | 724,770 |
Special
|
||||||||||||||||||||||||
Pass
|
Pass Watch
|
Mention
|
Substandard
|
Doubtful
|
Total
|
|||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||
Current
|
$ | 593,220 | $ | 55,254 | $ | 3,790 | $ | 11,386 | $ | 7 | $ | 663,657 | ||||||||||||
Delinquent:
|
||||||||||||||||||||||||
30-59 days
|
5,226 | 1,319 | — | 2,594 | — | 9,139 | ||||||||||||||||||
60-89 days
|
2,558 | 300 | 283 | — | — | 3,141 | ||||||||||||||||||
90 days or more
|
337 | — | — | 48,496 | — | 48,833 | ||||||||||||||||||
Total loans
|
$ | 601,341 | $ | 56,873 | $ | 4,073 | $ | 62,476 | $ | 7 | $ | 724,770 |
Special
|
||||||||||||||||||||||||
Pass
|
Pass Watch
|
Mention
|
Substandard
|
Doubtful
|
Total
|
|||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||
Commercial loans:
|
||||||||||||||||||||||||
Commercial and industrial
|
$ | 62,969 | $ | 3,908 | $ | 7,813 | $ | 228 | $ | 22 | $ | 74,940 | ||||||||||||
Commercial real estate – owner
occupied
|
65,768 | 20,239 | 4,310 | 9,118 | — | 99,435 | ||||||||||||||||||
Commercial real estate –
non-owner occupied
|
142,636 | 25,191 | 2,448 | 21,723 | — | 191,998 | ||||||||||||||||||
Commercial real estate – multifamily
|
61,822 | 8,238 | 708 | 1,312 | — | 72,080 | ||||||||||||||||||
Commercial construction and
land development
|
10,138 | 4,989 | — | 9,183 | — | 24,310 | ||||||||||||||||||
Commercial participations
|
14,095 | — | — | 9,499 | — | 23,594 | ||||||||||||||||||
Total commercial loans
|
357,428 | 62,565 | 15,279 | 51,063 | 22 | 486,357 | ||||||||||||||||||
Retail loans:
|
||||||||||||||||||||||||
One-to-four family residential
|
181,991 | — | 107 | 3,223 | — | 185,321 | ||||||||||||||||||
Home equity lines of credit
|
55,688 | — | — | 489 | — | 56,177 | ||||||||||||||||||
Retail construction
|
2,973 | — | — | 203 | — | 3,176 | ||||||||||||||||||
Other
|
2,118 | — | — | 4 | — | 2,122 | ||||||||||||||||||
Total retail loans
|
242,770 | — | 107 | 3,919 | — | 246,796 | ||||||||||||||||||
Total loans
|
$ | 600,198 | $ | 62,565 | $ | 15,386 | $ | 54,982 | $ | 22 | $ | 733,153 |
Special
|
||||||||||||||||||||||||
Pass
|
Pass Watch
|
Mention
|
Substandard
|
Doubtful
|
Total
|
|||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||
Current
|
$ | 589,067 | $ | 61,449 | $ | 11,857 | $ | 13,770 | $ | 22 | $ | 676,165 | ||||||||||||
Delinquent:
|
||||||||||||||||||||||||
30-59 days
|
5,347 | 457 | 415 | 540 | — | 6,759 | ||||||||||||||||||
60-89 days
|
5,322 | 536 | 768 | 321 | — | 6,947 | ||||||||||||||||||
90 days or more
|
462 | 123 | 2,346 | 40,351 | — | 43,282 | ||||||||||||||||||
Total loans
|
$ | 600,198 | $ | 62,565 | $ | 15,386 | $ | 54,982 | $ | 22 | $ | 733,153 |
Loans
|
||||||||||||||||||||||||||||
30-59 | 60-89 |
Greater
|
Total
|
Total
|
> 90 Days
|
|||||||||||||||||||||||
Days Past
|
Days Past
|
Than 90
|
Past
|
Loans
|
And
|
|||||||||||||||||||||||
Due
|
Due
|
Days
|
Due
|
Current
|
Receivable
|
Accruing
|
||||||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||||||
Commercial loans:
|
||||||||||||||||||||||||||||
Commercial and industrial
|
$ | 184 | $ | 833 | $ | 544 | $ | 1,561 | $ | 66,820 | $ | 68,381 | $ | — | ||||||||||||||
Commercial real estate – owner
occupied
|
148 | 1,705 | 13,114 | 14,967 | 87,086 | 102,053 | — | |||||||||||||||||||||
Commercial real estate –
non-owner occupied
|
2,130 | 444 | 12,028 | 14,602 | 176,841 | 191,443 | 1,183 | |||||||||||||||||||||
Commercial real estate – multifamily
|
1,594 | — | 471 | 2,065 | 72,487 | 74,552 | 241 | |||||||||||||||||||||
Commercial construction and
land development
|
— | — | 9,719 | 9,719 | 11,411 | 21,130 | — | |||||||||||||||||||||
Commercial participations
|
— | — | 8,796 | 8,796 | 13,623 | 22,419 | — | |||||||||||||||||||||
Total commercial loans
|
4,056 | 2,982 | 44,672 | 51,710 | 428,268 | 479,978 | 1,424 | |||||||||||||||||||||
Retail loans:
|
||||||||||||||||||||||||||||
One-to-four family residential
|
4,308 | 29 | 3,503 | 7,840 | 175,783 | 183,623 | — | |||||||||||||||||||||
Home equity lines of credit
|
495 | 130 | 485 | 1,110 | 54,539 | 55,649 | — | |||||||||||||||||||||
Retail construction
|
275 | — | 169 | 444 | 2,884 | 3,328 | — | |||||||||||||||||||||
Other
|
5 | — | 4 | 9 | 2,183 | 2,192 | — | |||||||||||||||||||||
Total retail loans
|
5,083 | 159 | 4,161 | 9,403 | 235,389 | 244,792 | — | |||||||||||||||||||||
Total loans receivable
|
$ | 9,139 | $ | 3,141 | $ | 48,833 | $ | 61,113 | $ | 663,657 | $ | 724,770 | $ | 1,424 |
Loans
|
||||||||||||||||||||||||||||
30-59 | 60-89 |
Greater
|
Total
|
Total
|
> 90 Days
|
|||||||||||||||||||||||
Days Past
|
Days Past
|
Than 90
|
Past
|
Loans
|
And
|
|||||||||||||||||||||||
Due
|
Due
|
Days
|
Due
|
Current
|
Receivable
|
Accruing
|
||||||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||||||
Commercial loans:
|
||||||||||||||||||||||||||||
Commercial and industrial
|
$ | 448 | $ | 664 | $ | 180 | $ | 1,292 | $ | 73,648 | $ | 74,940 | $ | — | ||||||||||||||
Commercial real estate – owner
occupied
|
678 | 3,691 | 11,464 | 15,833 | 83,602 | 99,435 | 2,346 | |||||||||||||||||||||
Commercial real estate –
non-owner occupied
|
361 | 216 | 9,081 | 9,658 | 182,340 | 191,998 | 123 | |||||||||||||||||||||
Commercial real estate – multifamily
|
656 | — | 436 | 1,092 | 70,988 | 72,080 | — | |||||||||||||||||||||
Commercial construction and
land development
|
— | 536 | 9,023 | 9,559 | 14,751 | 24,310 | — | |||||||||||||||||||||
Commercial participations
|
— | — | 9,660 | 9,660 | 13,934 | 23,594 | — | |||||||||||||||||||||
Total commercial loans
|
2,143 | 5,107 | 39,844 | 47,094 | 439,263 | 486,357 | 2,469 | |||||||||||||||||||||
Retail loans:
|
||||||||||||||||||||||||||||
One-to-four family residential
|
4,229 | 1,832 | 2,589 | 8,650 | 176,671 | 185,321 | — | |||||||||||||||||||||
Home equity lines of credit
|
386 | 8 | 642 | 1,036 | 55,141 | 56,177 | — | |||||||||||||||||||||
Retail construction
|
— | — | 203 | 203 | 2,973 | 3,176 | — | |||||||||||||||||||||
Other
|
1 | — | 4 | 5 | 2,117 | 2,122 | — | |||||||||||||||||||||
Total retail loans
|
4,616 | 1,840 | 3,438 | 9,894 | 236,902 | 246,796 | — | |||||||||||||||||||||
Total loans receivable
|
$ | 6,759 | $ | 6,947 | $ | 43,282 | $ | 56,988 | $ | 676,165 | $ | 733,153 | $ | 2,469 |
Unpaid
|
Average
|
Interest
|
||||||||||||||||||
Recorded
|
Principal
|
Related
|
Recorded
|
Income
|
||||||||||||||||
Investment
|
Balance
|
Allowance
|
Investment
|
Recognized
|
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
Loans without a specific valuation allowance:
|
||||||||||||||||||||
Commercial and industrial
|
$ | 3,168 | $ | 3,168 | $ | — | $ | 3,697 | $ | — | ||||||||||
Commercial real estate – owner occupied
|
9,559 | 9,619 | — | 9,641 | — | |||||||||||||||
Commercial real estate – non-owner
occupied
|
7,198 | 7,424 | — | 7,393 | 41 | |||||||||||||||
Commercial real estate – multifamily
|
263 | 263 | — | 264 | 3 | |||||||||||||||
Commercial construction and land
development
|
9,183 | 11,498 | — | 11,498 | — | |||||||||||||||
Commercial participations
|
3,494 | 8,012 | — | 7,881 | — | |||||||||||||||
Retail
|
7,372 | 7,415 | — | 7,670 | 50 | |||||||||||||||
Loans with a specific valuation allowance:
|
||||||||||||||||||||
Commercial real estate – owner occupied
|
$ | 2,754 | $ | 3,168 | $ | 380 | $ | 2,778 | $ | — | ||||||||||
Commercial real estate – non-owner
occupied
|
17,202 | 17,710 | 4,387 | 17,243 | — | |||||||||||||||
Commercial participations
|
5,302 | 5,443 | 3,573 | 5,443 | — | |||||||||||||||
Total impaired loans:
|
||||||||||||||||||||
Commercial
|
$ | 58,123 | $ | 66,305 | $ | 8,340 | $ | 65,838 | $ | 44 | ||||||||||
Retail
|
7,372 | 7,415 | — | 7,670 | 50 |
Unpaid
|
Average
|
Interest
|
||||||||||||||||||
Recorded
|
Principal
|
Related
|
Recorded
|
Income
|
||||||||||||||||
Investment
|
Balance
|
Allowance
|
Investment
|
Recognized
|
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
Loans without a specific valuation allowance:
|
||||||||||||||||||||
Commercial and industrial
|
$ | 3,692 | $ | 3,976 | $ | — | $ | 4,738 | $ | 128 | ||||||||||
Commercial real estate – owner occupied
|
5,041 | 5,082 | — | 5,059 | — | |||||||||||||||
Commercial real estate – non-owner
occupied
|
6,664 | 6,834 | — | 6,695 | 144 | |||||||||||||||
Commercial real estate – multifamily
|
264 | 264 | — | 268 | 4 | |||||||||||||||
Commercial construction and land
development
|
9,183 | 11,498 | — | 9,313 | — | |||||||||||||||
Commercial participations
|
4,197 | 8,012 | — | 4,397 | — | |||||||||||||||
One-to-four family residential
|
2,847 | 2,891 | — | 2,758 | 122 | |||||||||||||||
Loans with a specific valuation allowance:
|
||||||||||||||||||||
Commercial real estate – owner occupied
|
$ | 2,798 | $ | 3,168 | $ | 433 | $ | 2,900 | $ | — | ||||||||||
Commercial real estate – non-owner
occupied
|
17,850 | 18,311 | 4,492 | 18,066 | — | |||||||||||||||
Commercial participations
|
5,302 | 5,443 | 3,497 | 5,302 | — | |||||||||||||||
Total impaired loans:
|
||||||||||||||||||||
Commercial
|
$ | 54,991 | $ | 62,588 | $ | 8,422 | $ | 56,738 | $ | 276 | ||||||||||
Retail
|
2,847 | 2,891 | — | 2,758 | 122 |
March 31,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
(Dollars in thousands)
|
||||||||
Commercial loans:
|
||||||||
Commercial and industrial
|
$ | 578 | $ | 228 | ||||
Commercial real estate – owner occupied
|
13,748 | 9,119 | ||||||
Commercial real estate – non-owner occupied
|
21,320 | 21,512 | ||||||
Commercial real estate – multifamily
|
855 | 1,071 | ||||||
Commercial construction and land development
|
9,719 | 9,183 | ||||||
Commercial participations
|
8,796 | 9,499 | ||||||
Total commercial loans
|
55,016 | 50,612 | ||||||
Retail loans:
|
||||||||
One-to-four family residential
|
3,862 | 2,955 | ||||||
Home equity lines of credit
|
610 | 718 | ||||||
Retail construction
|
169 | 203 | ||||||
Other
|
4 | 4 | ||||||
Total retail loans
|
4,645 | 3,880 | ||||||
Total non-accrual loans
|
$ | 59,661 | $ | 54,492 |
Fair Value Measurements at March 31, 2011
|
||||||||||||||||
Fair Value
|
Quoted Prices
in Active Markets for Identical
Assets
(Level 1)
|
Significant
Other
Observable Inputs
(Level 2)
|
Significant Unobservable Inputs
(Level 3)
|
|||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Investment securities available-for-sale:
|
||||||||||||||||
U.S. Treasury securities
|
$ | 20,768 | $ | — | $ | 20,768 | $ | — | ||||||||
GSE securities
|
69,875 | — | 69,875 | — | ||||||||||||
Corporate bonds
|
3,602 | — | 3,602 | — | ||||||||||||
Collateralized mortgage obligations
|
52,986 | — | 52,986 | — | ||||||||||||
Commercial mortgage-backed securities
|
72,507 | — | 72,507 | — | ||||||||||||
Pooled trust preferred securities
|
19,262 | — | — | 19,262 | ||||||||||||
GSE preferred stock
|
12 | 12 | — | — |
Fair Value Measurements at December 31, 2010
|
||||||||||||||||
Fair Value
|
Quoted Prices
in Active Markets for Identical
Assets
(Level 1)
|
Significant Other Observable Inputs
(Level 2)
|
Significant Unobservable Inputs
(Level 3)
|
|||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Investment securities available-for-sale:
|
||||||||||||||||
U.S. Treasury securities
|
$ | 14,819 | $ | — | $ | 14,819 | $ | — | ||||||||
GSE securities
|
31,020 | — | 31,020 | — | ||||||||||||
Corporate bonds
|
3,586 | — | 3,586 | — | ||||||||||||
Collateralized mortgage obligations
|
60,755 | — | 60,755 | — | ||||||||||||
Commercial mortgage-backed securities
|
68,698 | — | 68,698 | — | ||||||||||||
Pooled trust preferred securities
|
18,125 | — | — | 18,125 | ||||||||||||
GSE preferred stock
|
98 | 98 | — | — |
Investment Securities
Available-For-Sale
|
||||||||
Three Months Ended
March 31,
|
||||||||
2011
|
2010
|
|||||||
(Dollars in thousands)
|
||||||||
Beginning balance
|
$ | 18,125 | $ | 20,012 | ||||
Total realized and unrealized gains and losses:
|
||||||||
Included in accumulated other comprehensive income (loss)
|
1,224 | 3 | ||||||
Principal repayments
|
(87 | ) | (114 | ) | ||||
Ending balance
|
$ | 19,262 | $ | 19,901 |
Fair Value Measurements at March 31, 2011
|
||||||||||||||||
Fair Value
|
Quoted Prices
in Active Markets for Identical
Assets
(Level 1)
|
Significant
Other
Observable Inputs
(Level 2)
|
Significant Unobservable Inputs
(Level 3)
|
|||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Impaired loans
|
$ | 2,262 | $ | — | $ | — | $ | 2,262 | ||||||||
Other real estate owned
|
991 | — | — | 991 |
Fair Value Measurements at December 31, 2010
|
||||||||||||||||
Fair Value
|
Quoted Prices
in Active Markets for Identical
Assets
(Level 1)
|
Significant
Other
Observable Inputs
(Level 2)
|
Significant Unobservable Inputs
(Level 3)
|
|||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Impaired loans
|
$ | 15,258 | $ | — | $ | — | $ | 15,258 | ||||||||
Other real estate owned
|
4,837 | — | — | 4,837 |
March 31, 2011
|
December 31, 2010
|
|||||||||||||||
Carrying
|
Fair
|
Carrying
|
Fair
|
|||||||||||||
Amount
|
Value
|
Amount
|
Value
|
|||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Financial Assets:
|
||||||||||||||||
Cash and cash equivalents
|
$ | 57,968 | $ | 57,968 | $ | 61,754 | $ | 61,754 | ||||||||
Investment securities, available-for-sale
|
239,012 | 239,012 | 197,101 | 197,101 | ||||||||||||
Investment securities, held-to-maturity
|
16,764 | 16,989 | 17,201 | 17,426 | ||||||||||||
Federal Home Loan Bank stock
|
10,282 | 10,282 | 20,282 | 20,282 | ||||||||||||
Loans receivable, net of allowance for loan losses | 707,128 | 708,766 | 715,405 | 718,556 | ||||||||||||
Interest receivable
|
3,265 | 3,265 | 3,162 | 3,162 | ||||||||||||
Total financial assets | $ | 1,034,419 | $ | 1,036,282 | $ | 1,014,905 | $ | 1,018,281 | ||||||||
Financial Liabilities:
|
||||||||||||||||
Deposits | $ | 980,517 | $ | 983,076 | $ | 945,884 | $ | 948,804 | ||||||||
Borrowed funds
|
40,658 | 42,530 | 53,550 | 55,572 | ||||||||||||
Interest payable
|
83 | 83 | 106 | 106 | ||||||||||||
Total financial liabilities | $ | 1,021,258 | $ | 1,025,689 | $ | 999,540 | $ | 1,004,482 |
6.
|
Share-Based Compensation
|
Weighted-Average
|
||||||||||||
Number of
|
Grant-Date
|
|||||||||||
Shares
|
Fair Value
|
|||||||||||
Unvested at December 31, 2010
|
188,027 | $ | 4.98 | |||||||||
2011 Awards:
|
||||||||||||
Granted
|
54,915 | 5.62 | ||||||||||
Forfeited
|
— | — | ||||||||||
Net 2011 grant awards
|
54,915 | 5.62 | ||||||||||
Vested
|
— | — | ||||||||||
Forfeited
|
(35,745 | ) | 3.53 | |||||||||
Unvested as of March 31, 2011
|
207,197 | $ | 5.40 |
2011
|
||||||||
Weighted-
|
||||||||
Average
|
||||||||
Number of
|
Exercise
|
|||||||
Options
|
Price
|
|||||||
Options outstanding and exercisable at December 31, 2010
|
650,995 | $ | 13.44 | |||||
Granted
|
— | — | ||||||
Exercised
|
— | — | ||||||
Forfeited
|
— | — | ||||||
Expired unexercised
|
(3,000 | ) | 13.16 | |||||
Options outstanding and exercisable at March 31, 2011
|
647,995 | $ | 13.45 |
7.
|
Other Comprehensive Income
|
Three Months Ended
March 31,
|
||||||||
2011
|
2010
|
|||||||
(Dollars in thousands)
|
||||||||
Unrealized holding gains arising during the period:
|
||||||||
Unrealized net gains
|
$ | 1,250 | $ | 802 | ||||
Related tax expense
|
(449 | ) | (272 | ) | ||||
Net unrealized gains
|
801 | 530 | ||||||
Less: reclassification adjustment for net gains realized
during the period:
|
||||||||
Realized net gains
|
519 | 456 | ||||||
Related tax expense
|
(189 | ) | (155 | ) | ||||
Net realized gains
|
330 | 301 | ||||||
Total other comprehensive income
|
$ | 471 | $ | 229 |
8.
|
Recent Accounting Pronouncements
|
Three Months Ended
March 31,
|
||||||||
2011
|
2010
|
|||||||
(Dollars in thousands)
|
||||||||
Net income
|
$ | 472 | $ | 698 | ||||
Diluted earnings per share
|
.04 | .07 | ||||||
Pre-tax, pre-provision earnings from core operations (1)
|
1,539 | 2,864 | ||||||
Return on average assets (2)
|
.17 | % | .26 | % | ||||
Return on average equity (2)
|
1.69 | 2.55 | ||||||
Average interest-earning assets
|
$ | 1,012,431 | $ | 982,630 | ||||
Net interest income
|
8,857 | 9,443 | ||||||
Net interest margin
|
3.55 | % | 3.90 | % | ||||
Non-interest income
|
$ | 2,451 | $ | 2,541 | ||||
Non-interest expense
|
9,967 | 9,467 | ||||||
Efficiency ratio (3)
|
92.34 | % | 82.13 | % |
(1) See “Non-GAAP Financial Information” on page 33.
|
||||||||
(2) Annualized.
|
||||||||
(3) The efficiency ratio is calculated by dividing non-interest expense by the sum of net interest income and non-interest
income, excluding net gain on sales of investment securities and other assets.
|
March 31,
2011
|
December 31,
2010
|
March 31,
2010
|
||||||||||
Book value per share
|
$ | 10.47 | $ | 10.41 | $ | 10.28 | ||||||
Shareholders’ equity to total assets
|
9.94 | % | 10.07 | % | 10.18 | % | ||||||
Tangible capital ratio (Bank only)
|
8.94 | 9.07 | 8.92 | |||||||||
Core capital ratio (Bank only)
|
8.94 | 9.07 | 8.92 | |||||||||
Risk based capital ratio (Bank only)
|
13.22 | 13.32 | 12.63 |
Three Months Ended
March 31,
|
||||||||
2011
|
2010
|
|||||||
(Dollars in thousands)
|
||||||||
Reconciliation of Income Before Income Taxes to Pre-Tax,
Pre-Provision Earnings from Core Operations:
|
||||||||
Income before income taxes
|
$ | 438 | $ | 807 | ||||
Provision for loan losses
|
903 | 1,710 | ||||||
Pre-tax, pre-provision earnings
|
1,341 | 2,517 | ||||||
Adjustments:
|
||||||||
Net (gain) loss on sale of:
|
||||||||
Investment securities
|
(519 | ) | (456 | ) | ||||
Other assets
|
5 | (1 | ) | |||||
Other real estate owned expense, net
|
592 | 631 | ||||||
Loan collection expense
|
120 | 169 | ||||||
Severance and early retirement expense
|
― | 4 | ||||||
Pre-tax, pre-provision earnings from core operations
|
$ | 1,539 | $ | 2,864 | ||||
Pre-tax, pre-provision earnings from core operations to average assets
|
.55 | % | 1.07 | % |
Three Months Ended March 31,
|
||||||||||||||||||||||||
2011
|
2010
|
|||||||||||||||||||||||
Average
|
Average
|
Average
|
Average
|
|||||||||||||||||||||
Balance
|
Interest
|
Yield/Cost
|
Balance
|
Interest
|
Yield/Cost
|
|||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||
Interest-earning assets:
|
||||||||||||||||||||||||
Loans receivable (1)
|
$ | 727,422 | $ | 8,811 | 4.91 | % | $ | 760,822 | $ | 9,678 | 5.16 | % | ||||||||||||
Investment securities (2)
|
239,070 | 2,045 | 3.42 | 194,812 | 2,213 | 4.54 | ||||||||||||||||||
Other interest-earning assets (3)
|
45,939 | 157 | 1.39 | 26,996 | 124 | 1.86 | ||||||||||||||||||
Total interest-earning assets
|
1,012,431 | 11,013 | 4.41 | 982,630 | 12,015 | 4.96 | ||||||||||||||||||
Non-interest earning assets
|
117,646 | 100,684 | ||||||||||||||||||||||
Total assets
|
$ | 1,130,077 | $ | 1,083,314 | ||||||||||||||||||||
Interest-bearing liabilities:
|
||||||||||||||||||||||||
Deposits:
|
||||||||||||||||||||||||
Checking accounts
|
$ | 157,782 | 112 | .29 | $ | 134,715 | 67 | .20 | ||||||||||||||||
Money market accounts
|
183,431 | 249 | .55 | 152,912 | 246 | .65 | ||||||||||||||||||
Savings accounts
|
124,096 | 76 | .25 | 115,497 | 94 | .33 | ||||||||||||||||||
Certificates of deposit
|
404,475 | 1,457 | 1.46 | 368,106 | 1,646 | 1.81 | ||||||||||||||||||
Total deposits
|
869,784 | 1,894 | .88 | 771,230 | 2,053 | 1.08 | ||||||||||||||||||
Borrowed funds:
|
||||||||||||||||||||||||
Other short-term borrowed funds
|
14,199 | 18 | .51 | 16,711 | 21 | .51 | ||||||||||||||||||
FHLB advances
|
25,657 | 244 | 3.80 | 80,147 | 498 | 2.49 | ||||||||||||||||||
Total borrowed funds
|
39,856 | 262 | 2.63 | 96,858 | 519 | 2.14 | ||||||||||||||||||
Total interest-bearing liabilities
|
909,640 | 2,156 | .96 | 868,088 | 2,572 | 1.20 | ||||||||||||||||||
Non-interest bearing deposits
|
95,596 | 93,620 | ||||||||||||||||||||||
Non-interest bearing liabilities
|
11,451 | 10,425 | ||||||||||||||||||||||
Total liabilities
|
1,016,687 | 972,133 | ||||||||||||||||||||||
Shareholders’ equity
|
113,390 | 111,181 | ||||||||||||||||||||||
Total liabilities and shareholders’ equity
|
$ | 1,130,077 | $ | 1,083,314 | ||||||||||||||||||||
Net interest-earning assets
|
$ | 102,791 | $ | 114,542 | ||||||||||||||||||||
Net interest income/ interest rate spread
|
$ | 8,857 | 3.45 | % | $ | 9,443 | 3.76 | % | ||||||||||||||||
Net interest margin
|
3.55 | % | 3.90 | % | ||||||||||||||||||||
Ratio of average interest-earning assets to
|
||||||||||||||||||||||||
average interest-bearing liabilities
|
111.30 | % | 113.19 | % |
(1)
|
The average balance of loans receivable includes loans held for sale and non-performing loans, interest on which is recognized on a cash basis.
|
|
(2)
|
Average balances of investment securities are based on amortized cost.
|
|
(3)
|
Includes FHLB stock and interest-earning bank deposits.
|
Rate / Volume Analysis
|
Three Months Ended March 31,
|
||||||||||||
2011 Compared to 2010
|
||||||||||||
Change
due to
Rate
|
Change
due to
Volume
|
Total
Change
|
||||||||||
(Dollars in thousands)
|
||||||||||||
Interest income:
|
||||||||||||
Loans receivable
|
$ | (452 | ) | $ | (415 | ) | $ | (867 | ) | |||
Investment securities
|
(612 | ) | 444 | (168 | ) | |||||||
Other interest-earning assets
|
(38 | ) | 71 | 33 | ||||||||
Total
|
(1,102 | ) | 100 | (1,002 | ) | |||||||
Interest expense:
|
||||||||||||
Deposits:
|
||||||||||||
Checking accounts
|
33 | 12 | 45 | |||||||||
Money market accounts
|
(41 | ) | 44 | 3 | ||||||||
Savings accounts
|
(25 | ) | 7 | (18 | ) | |||||||
Certificates of deposit
|
(341 | ) | 152 | (189 | ) | |||||||
Total deposits
|
(374 | ) | 215 | (159 | ) | |||||||
Borrowed funds:
|
||||||||||||
Other short-term borrowed funds
|
― | (3 | ) | (3 | ) | |||||||
FHLB advances
|
186 | (440 | ) | (254 | ) | |||||||
Total borrowed funds
|
186 | (443 | ) | (257 | ) | |||||||
Total
|
(188 | ) | (228 | ) | (416 | ) | ||||||
Net change in net interest income
|
$ | (914 | ) | $ | 328 | $ | (586 | ) |
Three Months Ended
|
||||||||||||||||
March 31,
|
||||||||||||||||
2011
|
2010
|
$ Change
|
% Change
|
|||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Service charges and other fees
|
$ | 1,076 | $ | 1,220 | $ | (144 | ) | (11.8 | )% | |||||||
Card-based fees
|
475 | 437 | 38 | 8.7 | ||||||||||||
Commission income
|
45 | 54 | (9 | ) | (16.7 | ) | ||||||||||
Subtotal fee based revenues
|
1,596 | 1,711 | (115 | ) | (6.7 | ) | ||||||||||
Income from bank-owned life insurance
|
206 | 223 | (17 | ) | (7.6 | ) | ||||||||||
Other income
|
103 | 150 | (47 | ) | (31.3 | ) | ||||||||||
Subtotal
|
1,905 | 2,084 | (179 | ) | (8.6 | ) | ||||||||||
Net gain on sale of investment securities
|
519 | 456 | 63 | (13.8 | ) | |||||||||||
Net gain on sale of loans receivable
|
32 | ― | 32 |
NM
|
||||||||||||
Net gain (loss) on sale of other assets
|
(5 | ) | 1 | (6 | ) |
NM
|
||||||||||
Total non-interest income
|
$ | 2,451 | $ | 2,541 | $ | (90 | ) | (3.5 | ) % |
Three Months Ended
|
||||||||||||||||
March 31,
|
||||||||||||||||
2011
|
2010
|
$ Change
|
% Change
|
|||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Compensation and mandatory benefits
|
$ | 4,469 | $ | 4,080 | $ | 389 | 9.5 | % | ||||||||
Retirement and stock related compensation
|
213 | 194 | 19 | 9.8 | ||||||||||||
Medical and life benefits
|
547 | 375 | 172 | 45.9 | ||||||||||||
Other employee benefits
|
10 | 19 | (9 | ) | 47.4 | |||||||||||
Subtotal compensation and employee benefits
|
5,239 | 4,668 | 571 | 12.2 | ||||||||||||
Net occupancy expense
|
765 | 755 | 10 | 1.3 | ||||||||||||
FDIC insurance premiums and OTS assessments
|
653 | 600 | 53 | 8.8 | ||||||||||||
Professional fees
|
388 | 593 | (205 | ) | (34.8 | ) | ||||||||||
Furniture and equipment expense
|
463 | 533 | (70 | ) | (13.1 | ) | ||||||||||
Data processing
|
442 | 430 | 12 | 2.8 | ||||||||||||
Marketing
|
187 | 114 | 73 | 64.0 | ||||||||||||
Other real estate owned related expense, net
|
592 | 631 | (39 | ) | (6.2 | ) | ||||||||||
Loan collection expense
|
120 | 169 | (49 | ) | (29.0 | ) | ||||||||||
Severance and early retirement expense
|
― | 4 | (4 | ) |
NM
|
|||||||||||
Other general and administrative expenses
|
1,118 | 970 | 148 | 15.3 | ||||||||||||
Total non-interest expense
|
$ | 9,967 | $ | 9,467 | $ | 500 | 5.3 | % |
March 31,
2011
|
December 31,
2010
|
$ Change
|
% Change
|
|||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Assets:
|
||||||||||||||||
Cash and cash equivalents
|
$ | 57,968 | $ | 61,754 | $ | (3,786 | ) | (6.1 | )% | |||||||
Investment securities available-for-sale, at fair value
|
239,012 | 197,101 | 41,911 | 21.3 | ||||||||||||
Investment securities held-to-maturity, at cost
|
16,764 | 17,201 | (437 | ) | (2.5 | ) | ||||||||||
Federal Home Loan Bank stock, at cost
|
10,282 | 20,282 | (10,000 | ) | (49.3 | ) | ||||||||||
Loans receivable, net
|
707,128 | 715,405 | (8,277 | ) | (1.2 | ) | ||||||||||
Bank-owned life insurance
|
35,669 | 35,463 | 206 | .6 | ||||||||||||
Other real estate owned
|
23,567 | 22,324 | 1,243 | 5.6 | ||||||||||||
Other assets
|
53,651 | 52,146 | 1,505 | 2.9 | ||||||||||||
Total assets
|
$ | 1,144,041 | $ | 1,121,676 | $ | 22,365 | 2.0 | % | ||||||||
Liabilities and Equity:
|
||||||||||||||||
Deposits
|
$ | 980,517 | $ | 945,884 | $ | 34,633 | 3.7 | % | ||||||||
Borrowed funds
|
40,658 | 53,550 | (12,892 | ) | (24.1 | ) | ||||||||||
Other liabilities
|
9,102 | 9,314 | (212 | ) | (2.3 | ) | ||||||||||
Total liabilities
|
1,030,277 | 1,008,748 | 21,529 | 2.1 | ||||||||||||
Shareholders’ equity
|
113,764 | 112,928 | 836 | .7 | ||||||||||||
Total liabilities and equity
|
$ | 1,144,041 | $ | 1,121,676 | $ | 22,365 | 2.0 | % |
March 31, 2011
|
December 31, 2010
|
|||||||||||||||||||
Amount
|
% of Total
|
Amount
|
% of Total
|
% Change
|
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
Commercial loans: | ||||||||||||||||||||
Commercial and industrial
|
$ | 68,381 | 9.5 | % | $ | 74,940 | 10.3 | % | (8.8 | )% | ||||||||||
Commercial real estate – owner occupied
|
102,053 | 14.1 | 99,435 | 13.6 | 2.6 | |||||||||||||||
Commercial real estate – non-owner occupied
|
191,443 | 26.4 | 191,998 | 26.2 | (.3 | ) | ||||||||||||||
Commercial real estate – multifamily
|
74,552 | 10.3 | 72,080 | 9.8 | 3.4 | |||||||||||||||
Commercial construction and land development
|
21,130 | 2.9 | 24,310 | 3.3 | (13.1 | ) | ||||||||||||||
Commercial participations
|
22,419 | 3.1 | 23,594 | 3.2 | (5.0 | ) | ||||||||||||||
Total commercial loans
|
479,978 | 66.3 | 486,357 | 66.4 | (1.3 | ) | ||||||||||||||
Retail loans:
|
||||||||||||||||||||
One-to-four family residential
|
183,623 | 25.3 | 185,321 | 25.3 | (.9 | ) | ||||||||||||||
Home equity lines of credit
|
55,649 | 7.7 | 56,177 | 7.7 | (.9 | ) | ||||||||||||||
Retail construction
|
3,328 | .5 | 3,176 | .4 | 4.8 | |||||||||||||||
Other
|
2,192 | .3 | 2,122 | .3 | 3.3 | |||||||||||||||
Total retail loans
|
244,792 | 33.8 | 246,796 | 33.7 | (.8 | ) | ||||||||||||||
Total loans receivable
|
724,770 | 100.1 | 733,153 | 100.1 | (1.1 | ) | ||||||||||||||
Net deferred loan fees
|
(547 | ) | (.1 | ) | (569 | ) | (.1 | ) | (3.9 | ) | ||||||||||
Total loans receivable, net of deferred fees
|
$ | 724,223 | 100.0 | % | $ | 732,584 | 100.0 | % | (1.1 | )% |
March 31, 2011
|
December 31, 2010
|
|||||||||||||||||||
Amount
|
% of Total
|
Amount
|
% of Total
|
% Change
|
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
Commercial and industrial
|
$ | 216 | .9 | % | $ | 226 | 1.0 | % | (4.4 | )% | ||||||||||
Commercial real estate – owner occupied
|
105 | .5 | 83 | .3 | 26.5 | |||||||||||||||
Commercial real estate – non-owner occupied
|
18,604 | 83.0 | 19,064 | 80.8 | (2.4 | ) | ||||||||||||||
Commercial construction and land development
|
3,494 | 15.6 | 4,221 | 17.9 | (17.2 | ) | ||||||||||||||
Total commercial participations
|
$ | 22,419 | 100.0 | % | $ | 23,594 | 100.0 | % | (5.0 | )% |
March 31, 2011
|
December 31, 2010
|
|||||||||||||||||||
Amount
|
% of Total
|
Amount
|
% of Total
|
% Change
|
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
Illinois
|
$ | 4,797 | 21.4 | % | $ | 4,988 | 21.1 | % | (3.8 | )% | ||||||||||
Indiana
|
5,767 | 25.7 | 5,774 | 24.5 | (.1 | ) | ||||||||||||||
Ohio
|
7,228 | 32.2 | 7,332 | 31.1 | (1.4 | ) | ||||||||||||||
Florida
|
1,140 | 5.1 | 1,843 | 7.8 | (38.1 | ) | ||||||||||||||
Colorado
|
1,925 | 8.6 | 2,075 | 8.8 | (7.2 | ) | ||||||||||||||
Texas
|
1,562 | 7.0 | 1,582 | 6.7 | (1.3 | ) | ||||||||||||||
Total commercial participations
|
$ | 22,419 | 100.0 | % | $ | 23,594 | 100.0 | % | (5.0 | )% |
Gross
|
Gross
|
|||||||||||||||||||
Par
|
Amortized
|
Unrealized
|
Unrealized
|
Fair
|
||||||||||||||||
Value
|
Cost
|
Gains
|
Losses
|
Value
|
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
At March 31, 2011:
|
||||||||||||||||||||
U.S. Treasury securities
|
$ | 21,000 | $ | 20,946 | $ | 24 | $ | (202 | ) | $ | 20,768 | |||||||||
Government sponsored entity (GSE)
securities
|
68,800 | 69,724 | 370 | (219 | ) | 69,875 | ||||||||||||||
Corporate bonds
|
4,000 | 3,645 | — | (43 | ) | 3,602 | ||||||||||||||
Collateralized mortgage obligations
|
54,340 | 51,021 | 2,062 | (97 | ) | 52,986 | ||||||||||||||
Commercial mortgage-backed securities
|
70,218 | 71,341 | 1,418 | (252 | ) | 72,507 | ||||||||||||||
Pooled trust preferred securities
|
29,285 | 26,386 | — | (7,124 | ) | 19,262 | ||||||||||||||
GSE preferred stock
|
200 | — | 12 | — | 12 | |||||||||||||||
$ | 247,843 | $ | 243,063 | $ | 3,886 | $ | (7,937 | ) | $ | 239,012 |
Gross
|
Gross
|
|||||||||||||||||||
Par
|
Amortized
|
Unrealized
|
Unrealized
|
Fair
|
||||||||||||||||
Value
|
Cost
|
Gains
|
Losses
|
Value
|
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
At December 31, 2010:
|
||||||||||||||||||||
U.S. Treasury securities
|
$ | 15,000 | $ | 14,975 | $ | 3 | $ | (159 | ) | $ | 14,819 | |||||||||
Government sponsored entity (GSE)
securities
|
30,800 | 30,717 | 421 | (118 | ) | 31,020 | ||||||||||||||
Corporate bonds
|
4,000 | 3,629 | — | (43 | ) | 3,586 | ||||||||||||||
Collateralized mortgage obligations
|
62,512 | 59,037 | 2,071 | (353 | ) | 60,755 | ||||||||||||||
Commercial mortgage-backed securities
|
66,282 | 67,052 | 1,804 | (158 | ) | 68,698 | ||||||||||||||
Pooled trust preferred securities
|
29,409 | 26,473 | — | (8,348 | ) | 18,125 | ||||||||||||||
GSE preferred stock
|
5,837 | — | 98 | — | 98 | |||||||||||||||
$ | 213,840 | $ | 201,883 | $ | 4,397 | $ | (9,179 | ) | $ | 197,101 |
March 31, 2011
|
December 31, 2010
|
|||||||||||||||||||
Amount
|
% of Total
|
Amount
|
% of Total
|
% Change
|
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
Checking accounts:
|
||||||||||||||||||||
Non-interest bearing
|
$ | 101,126 | 10.3 | % | $ | 90,315 | 9.5 | % | 12.0 | % | ||||||||||
Interest-bearing
|
158,473 | 16.2 | 149,948 | 15.9 | 5.7 | |||||||||||||||
Money market accounts
|
189,034 | 19.3 | 177,566 | 18.8 | 6.5 | |||||||||||||||
Savings accounts
|
127,902 | 13.0 | 121,504 | 12.8 | 5.3 | |||||||||||||||
Core deposits
|
576,535 | 58.8 | 539,333 | 57.0 | 6.9 | |||||||||||||||
Certificates of deposit accounts
|
403,982 | 41.2 | 406,551 | 43.0 | (.6 | ) | ||||||||||||||
Total deposits
|
$ | 980,517 | 100.0 | % | $ | 945,884 | 100.0 | % | 3.7 | % |
March 31, 2011
|
December 31, 2010
|
|||||||||||||||
Weighted-
|
Weighted-
|
|||||||||||||||
Average
|
Average
|
|||||||||||||||
Contractual
|
Contractual
|
|||||||||||||||
Amount
|
Rate
|
Amount
|
Rate
|
|||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Advances from FHLB of Indianapolis:
|
||||||||||||||||
Fixed rate advances due in:
|
||||||||||||||||
2011
|
$ | — | — | % | $ | 15,000 | 3.75 | % | ||||||||
2013
|
15,000 | 2.22 | 15,000 | 2.22 | ||||||||||||
2014 (1)
|
1,096 | 6.71 | 1,096 | 6.71 | ||||||||||||
2018 (1)
|
2,513 | 5.54 | 2,513 | 5.54 | ||||||||||||
2019 (1)
|
6,539 | 6.30 | 6,589 | 6.30 | ||||||||||||
Total FHLB advances
|
25,148 | 3.81 | 40,198 | 3.79 | ||||||||||||
Short-term variable-rate borrowed funds - repo sweep accounts
|
15,510 | .50 | 13,352 | .50 | ||||||||||||
Total borrowed funds
|
$ | 40,658 | 2.55 | % | $ | 53,550 | 2.97 | % |
(1)
|
|
These are amortizing advances and are listed by their contractual final maturity date.
|
March 31,
2011
|
December 31, 2010
|
|||||||
(Dollars in thousands)
|
||||||||
Non-performing loans:
|
||||||||
Commercial loans:
|
||||||||
Commercial and industrial
|
$ | 578 | $ | 228 | ||||
Commercial real estate – owner occupied
|
13,748 | 9,119 | ||||||
Commercial real estate – non-owner occupied
|
21,320 | 21,512 | ||||||
Commercial real estate – multifamily
|
855 | 1,071 | ||||||
Commercial construction and land development
|
9,719 | 9,183 | ||||||
Commercial participations
|
8,796 | 9,499 | ||||||
Total commercial loans
|
55,016 | 50,612 | ||||||
Retail loans:
|
||||||||
One-to-four family residential
|
3,862 | 2,955 | ||||||
Home equity lines of credit
|
610 | 718 | ||||||
Retail construction
|
169 | 203 | ||||||
Other
|
4 | 4 | ||||||
Total retail loans
|
4,645 | 3,880 | ||||||
Total non-performing loans
|
59,661 | 54,492 | ||||||
Other real estate owned, net
|
23,567 | 22,324 | ||||||
Total non-performing assets
|
83,228 | 76,816 | ||||||
90 days past due loans still accruing interest
|
1,424 | 2,469 | ||||||
Total non-performing assets plus 90 days past due
|
||||||||
loans still accruing interest
|
$ | 84,652 | $ | 79,285 | ||||
Non-performing assets to total assets
|
7.27 | % | 6.85 | % | ||||
Non-performing loans to total loans, net of deferred fees
|
8.24 | 7.44 |
March 31,
2011
|
December 31, 2010
|
% Change
|
||||||||||
(Dollars in thousands)
|
||||||||||||
Commercial real estate – non-owner occupied
|
$ | 5,302 | $ | 5,302 | ― | % | ||||||
Commercial construction and land development
|
3,494 | 4,197 | (16.8 | ) | ||||||||
Total non-performing syndications and
purchased participations
|
$ | 8,796 | $ | 9,499 | (7.4 | ) | ||||||
Percentage of total non-performing loans
|
14.7 | % | 17.4 | % | ||||||||
Percentage of total syndications and purchased participations
|
39.2 | 40.3 |
March 31,
2011
|
December 31,
2010
|
% Change
|
||||||||||
(Dollars in thousands)
|
||||||||||||
Illinois
|
$ | 2,354 | $ | 2,354 | ― | % | ||||||
Indiana
|
5,302 | 5,302 | ― | |||||||||
Florida
|
1,140 | 1,843 | (38.1 | ) | ||||||||
Total non-performing syndications and
purchased participations
|
$ | 8,796 | $ | 9,499 | (7.4 | ) |
Three Months Ended March 31,
|
||||||||
2011
|
2010
|
|||||||
(Dollars in thousands)
|
||||||||
Balance at beginning of period
|
$ | 17,179 | $ | 19,461 | ||||
Loan charge-offs
|
(1,014 | ) | (881 | ) | ||||
Recoveries of loans previously charged-off
|
27 | 112 | ||||||
Net loan charge-offs
|
(987 | ) | (769 | ) | ||||
Provision for loan losses
|
903 | 1,710 | ||||||
Balance at end of period
|
$ | 17,095 | $ | 20,402 |
March 31,
2011
|
December 31,
2010
|
March 31,
2010
|
||||||||||
(Dollars in thousands)
|
||||||||||||
Allowance for loan losses
|
$ | 17,095 | $ | 17,179 | $ | 20,402 | ||||||
Total loans receivable, net of unearned fees
|
724,223 | 732,584 | 763,767 | |||||||||
Allowance for loan losses to total loans
|
2.36 | % | 2.34 | % | 2.67 | % | ||||||
Allowance for loan losses to non-performing loans
|
28.65 | 31.53 | 35.29 |
|
•
|
deposits and Repo Sweeps;
|
|
•
|
scheduled payments of amortizing loans and mortgage-backed investment securities;
|
|
•
|
prepayments and maturities of outstanding loans and mortgage-backed investment securities;
|
|
•
|
maturities of investment securities and other short-term investments;
|
|
•
|
funds provided from operations;
|
|
•
|
federal funds line of credit; and
|
|
•
|
borrowed funds from the FHLB and Federal Reserve Bank.
|
• | purchases of investment securities totaling $68.1 million and |
• | repayment of FHLB advances totaling $15.1 million. |
• | increases in deposit accounts totaling $34.6 million; |
• | proceeds from sales, maturities, and paydowns of investment securities aggregating $27.9 million; |
• | redemption of FHLB stock of $10.0 million; and |
• | net loan repayments totaling $6.5 million. |
Payments Due By Period
|
||||||||||||||||||||
Over One
|
Over Three
|
Over
|
||||||||||||||||||
One Year
|
through
|
through
|
Five
|
|||||||||||||||||
or less
|
Three Years
|
Five Years
|
Years
|
Total
|
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
Certificates of deposit
|
$ | 299,350 | $ | 81,539 | $ | 22,511 | $ | 582 | $ | 403,982 | ||||||||||
FHLB advances (1)
|
336 | 15,746 | 1,789 | 7,277 | 25,148 | |||||||||||||||
Short-term borrowed funds (2)
|
15,510 | ― | ― | ― | 15,510 | |||||||||||||||
Service bureau contract
|
1,548 | 3,096 | 3,096 |
―
|
7,740 | |||||||||||||||
Operating leases
|
374 | 403 | 255 | 1,967 | 2,999 | |||||||||||||||
Dividends payable on common stock
|
109 | ― |
―
|
― | 109 | |||||||||||||||
$ | 317,227 | $ | 100,784 | $ | 27,651 | $ | 9,826 | $ | 455,488 |
Over One
|
||||||||||||||||||||
through
|
Over Three
|
Over
|
||||||||||||||||||
One Year
|
Three
|
through
|
Five
|
|||||||||||||||||
or Less
|
Years
|
Five Years
|
Years
|
Total
|
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
Commitments to extend credit:
|
||||||||||||||||||||
Commercial and industrial
|
$ | 11,038 | $ | — | $ | — | $ | 247 | $ | 11,285 | ||||||||||
Commercial real estate – owner occupied
|
13,070 | — | 135 | — | 13,205 | |||||||||||||||
Commercial real estate – non-owner occupied
|
1,355 | — | — | — | 1,355 | |||||||||||||||
Commercial real estate – multifamily
|
1,467 | — | — | — | 1,467 | |||||||||||||||
Commercial construction and land development
|
10,875 | 137 | — | — | 11,012 | |||||||||||||||
Commercial participations
|
— | 48 | — | — | 48 | |||||||||||||||
Retail
|
3,737 | — | — | — | 3,737 | |||||||||||||||
Commitments to fund unused:
|
||||||||||||||||||||
Equity lines of credit
|
12,408 | — | — | 40,553 | 52,961 | |||||||||||||||
Commercial business lines
|
42,541 | 2,600 | 21 | — | 45,162 | |||||||||||||||
Construction loans
|
2,254 | — | — | — | 2,254 | |||||||||||||||
Credit enhancements
|
3,984 | — | — | 13,518 | 17,502 | |||||||||||||||
Letters of credit
|
4,373 | 12 | — | — | 4,385 | |||||||||||||||
$ | 107,102 | $ | 2,797 | $ | 156 | $ | 54,318 | $ | 164,373 |
To Be Well Capitalized
|
|||||||||||||||||||
For Capital Adequacy
|
Under Prompt Corrective
|
||||||||||||||||||
Actual
|
Purposes
|
Action Provisions
|
|||||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
||||||||||||||
(Dollars in thousands)
|
|||||||||||||||||||
As of March 31, 2011:
|
|||||||||||||||||||
Tangible capital to adjusted total assets
|
$ | 101,563 | 8.94 | % | $ | 17,039 | >=1.5 | % | $ | 22,718 | >=2.0 | % | |||||||
Tier 1 (core) capital to adjusted total assets
|
101,563 | 8.94 | 45,437 | >=4.0 | 56,796 | >=5.0 | |||||||||||||
Tier 1 (core) capital to risk-weighted assets
|
101,563 | 12.18 | 33,366 | >=4.0 | 50,049 | >=6.0 | |||||||||||||
Total capital to risk-weighted assets
|
110,301 | 13.22 | 66,732 | >=8.0 | 83,416 | >=10.0 | |||||||||||||
As of December 31, 2010:
|
|||||||||||||||||||
Tangible capital to adjusted total assets
|
$ | 101,144 | 9.07 | % | $ | 16,719 | >=1.5 | % | $ | 22,292 | >=2.0 | % | |||||||
Tier 1 (core) capital to adjusted total assets
|
101,144 | 9.07 | 44,583 | >=4.0 | 55,729 | >=5.0 | |||||||||||||
Tier 1 (core) capital to risk-weighted assets
|
101,144 | 12.26 | 33,005 | >=4.0 | 49,508 | >=6.0 | |||||||||||||
Total capital to risk-weighted assets
|
109,869 | 13.32 | 66,011 | >=8.0 | 82,514 | >=10.0 |
Tangible
|
Core
|
Risk-Based
|
||||||||||
(Dollars in thousands)
|
||||||||||||
Shareholders’ equity of the Bank
|
$ | 112,072 | $ | 112,072 | $ | 112,072 | ||||||
Disallowed deferred tax asset
|
(12,159 | ) | (12,159 | ) | (12,159 | ) | ||||||
Adjustment for unrealized losses on available-for-sale securities
|
2,487 | 2,487 | 2,487 | |||||||||
Other
|
(837 | ) | (837 | ) | (837 | ) | ||||||
General allowance for loan losses
|
― | ― | 8,738 | |||||||||
Regulatory capital of the Bank
|
$ | 101,563 | $ | 101,563 | $ | 110,301 |
Net Portfolio Value
|
|||||||||||||||||||||||||
At March 31, 2011 | At December 31, 2010 | ||||||||||||||||||||||||
$ Amount | $ Change |
% Change
|
$ Amount | $ Change | % Change | ||||||||||||||||||||
(Dollars in thousands)
|
|||||||||||||||||||||||||
Assumed Change in Interest Rates
|
|||||||||||||||||||||||||
(Basis Points)
|
|
|
|||||||||||||||||||||||
+300 | $ |
132,593
|
$ |
5,257
|
4.1
|
% | $ |
135,273
|
$ |
5,530
|
4.3
|
%
|
|||||||||||||
+200 | 132,381 | 5,044 | 4.0 |
135,380
|
5,637
|
4.3
|
|||||||||||||||||||
+100 | 130,800 | 3,464 | 2.7 |
132,500
|
2,757
|
2.1
|
|||||||||||||||||||
0 | 127,337 |
—
|
— |
129,743
|
—
|
—
|
|||||||||||||||||||
-100 | 117,130 | (10,206 | ) | (8.0 | ) |
119,664
|
(10,079 | ) |
(7.8
|
)
|
|||||||||||||||
-200 | 108,366 | (18,971 | ) | (19.6 | ) |
111,927
|
(21,763 | ) |
(16.8
|
)
|
Change In | ||||||||||||||||||
Net Interest Income | ||||||||||||||||||
Over a Twelve | ||||||||||||||||||
Month Period | ||||||||||||||||||
March 31, 2011 | December 31, 2010 | |||||||||||||||||
$ Change | % Change | $ Change | % Change | |||||||||||||||
(Dollars in thousands) | ||||||||||||||||||
Assumed Change in Interest Rates | ||||||||||||||||||
(Basis Points) | ||||||||||||||||||
+300 | $ | (1,663 | ) | (4.4 | )% | $ | (504 | ) | (1.3 | )% | ||||||||
+200 | (1,291 | ) | (3.4 | ) | (334 | ) | (.9 | ) | ||||||||||
+100 | (823 | ) | (2.2 | ) | (231 | ) | (.6 | ) | ||||||||||
-100 | 1,516 | 4.0 | 1,276 | 3.4 | ||||||||||||||
-200 | 1,120 | 3.0 | 808 | 2.2 |
(a)
|
Not applicable.
|
(b)
|
Not applicable.
|
(c)
|
We did not repurchase any shares of our common stock during the quarter ended March 31, 2011. Under our repurchase plan publicly announced on March 20, 2008 for 530,000 shares, we have 448,612 shares that may yet be purchased. We are currently prohibited from repurchasing our common stock without prior approval pursuant to an informal regulatory agreement with the OTS.
|
(a)
|
None.
|
(b)
|
Not applicable.
|
(a)
|
Not applicable.
|
(b)
|
None.
|
(a)
|
List of exhibits (filed herewith unless otherwise noted).
|
3.1
|
Articles of Incorporation of CFS Bancorp, Inc. (1)
|
3.2
|
Amended and Restated Bylaws of CFS Bancorp, Inc. (2)
|
4.0
|
Form of Stock Certificate of CFS Bancorp, Inc. (3)
|
10.25
|
Employment Agreement entered into between CFS Bancorp, Inc., Citizens Financial Bank, and Jerry A. Weberling (4)
|
31.1
|
Rule 13a-14(a) Certification of Chief Executive Officer
|
31.2
|
Rule 13a-14(a) Certification of Chief Financial Officer
|
32.0
|
Section 1350 Certifications
|
________
|
____________
|
(1)
|
Incorporated herein by Reference to the Company’s Definitive Proxy Statement from the Annual Meeting of Shareholders filed with the SEC on March 25, 2005 (File No. 000-24611).
|
(2)
|
Incorporated herein by Reference to the Company’s Form 8-K filed with the SEC on December 17, 2010.
|
(3)
|
Incorporated herein by Reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 2006 filed with the SEC on March 15, 2007.
|
(4)
|
Incorporated herein by Reference to the Company’s Form 8-K filed with the SEC on February 23, 2011.
|
Date: April 29, 2011
|
By:
|
/s/ Thomas F. Prisby
|
Thomas F. Prisby, Chairman of the Board and
|
||
Chief Executive Officer
|
||
Date: April 29, 2011
|
By:
|
/s/ Jerry A. Weberling
|
Jerry A. Weberling, Executive Vice President
|
||
and Chief Financial Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of CFS Bancorp, Inc. (Registrant);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the Registrant as of, and for, the periods presented in this report;
|
4.
|
The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
|
5.
|
The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of Registrant’s board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize, and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.
|
Date: April 29, 2011
|
/s/ Thomas F. Prisby
|
Thomas F. Prisby
|
|
Chairman of the Board and Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of CFS Bancorp, Inc. (Registrant);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the Registrant as of, and for, the periods presented in this report;
|
4.
|
The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
|
5.
|
The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of Registrant’s board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize, and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.
|
Date: April 29, 2011
|
/s/ Jerry A. Weberling
|
Jerry A. Weberling
|
|
Executive Vice President and Chief Financial Officer
|
|
(1)
|
The Quarterly Report on Form 10-Q of the Company for the three months ended March 31, 2011 (Report) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C 78m(a) or 78o(d)), and
|
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date:
|
April 29, 2011
|
By:
|
/s/ Thomas F. Prisby
|
Thomas F. Prisby
|
|||
Chairman of the Board and
Chief Executive Officer
|
|||
Date:
|
April 29, 2011
|
By:
|
/s/ Jerry A. Weberling
|
Jerry A. Weberling
|
|||
Executive Vice President and
Chief Financial Officer
|