North Carolina (State or Other Jurisdiction of Incorporation or Organization) | 56-1980549 (I.R.S. Employer Identification No.) | |
2634 Durham Chapel Hill Blvd. Durham, North Carolina (Address of Principal Executive Offices) | 27707-2800 (Zip Code) |
Large accelerated filer o | Accelerated filer o | Non-accelerated filer o | Smaller reporting company x |
(Do not check here if a smaller reporting Company) |
PART I | |
FINANCIAL INFORMATION | |
PART II | |
OTHER INFORMATION | |
Item 1 - | Financial Statements (unaudited) |
CONSOLIDATED BALANCE SHEETS | ||||||||
(Dollars in thousands) | September 30, 2012 | December 31, 2011 | ||||||
(Unaudited) | *** | |||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 51,516 | $ | 61,296 | ||||
Investment securities available for sale, at fair value | 62,933 | 37,595 | ||||||
Other invested assets | 489 | 638 | ||||||
Loans, net of unearned income and deferred fees | 178,941 | 188,084 | ||||||
Allowances for loan losses | (3,498 | ) | (3,850 | ) | ||||
Loans, net | 175,443 | 184,234 | ||||||
Interest receivable | 850 | 764 | ||||||
Bank premises and equipment, net | 4,661 | 4,654 | ||||||
Cash surrender value of bank-owned life insurance | 5,926 | 5,768 | ||||||
Other real estate owned | 3,072 | 3,215 | ||||||
Deferred tax assets and taxes receivable, net | 4,329 | 4,703 | ||||||
Other assets | 1,390 | 1,589 | ||||||
TOTAL ASSETS | $ | 310,609 | $ | 304,456 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Deposits | ||||||||
Interest-bearing deposits | $ | 212,874 | $ | 209,291 | ||||
Noninterest-bearing deposits | 48,498 | 49,853 | ||||||
Total deposits | 261,372 | 259,144 | ||||||
Other borrowings | 2,987 | 2,939 | ||||||
Other liabilities | 9,358 | 5,976 | ||||||
Total liabilities | 273,717 | 268,059 | ||||||
COMMITMENTS AND CONTINGENCIES- NOTE 8 | ||||||||
Stockholders' equity: | ||||||||
Series B Preferred Stock- $1,000 liquidation value per share, 11,735 shares issued and outstanding | 11,725 | 11,724 | ||||||
Common stock, no par value 10,000,000 shares authorized; 2,031,337 shares issued and outstanding | 8,732 | 8,732 | ||||||
Retained earnings | 17,721 | 17,380 | ||||||
Accumulated other comprehensive loss | (1,286 | ) | (1,439 | ) | ||||
Total stockholders' equity | 36,892 | 36,397 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 310,609 | $ | 304,456 |
CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||||
(Dollars in thousands except for share and per share data) | For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||
(Unaudited) | 2012 | 2011 | 2012 | 2011 | |||||||||||
Interest income: | |||||||||||||||
Loans, including fees | $ | 2,775 | $ | 2,783 | $ | 7,969 | $ | 8,524 | |||||||
Investment securities, including dividends | |||||||||||||||
Taxable | 229 | 186 | 636 | 472 | |||||||||||
Tax-exempt | 23 | 73 | 91 | 204 | |||||||||||
Other | 21 | 36 | 94 | 116 | |||||||||||
Total interest income | 3,048 | 3,078 | 8,790 | 9,316 | |||||||||||
Interest expense: | |||||||||||||||
Deposits | 227 | 341 | 695 | 1,102 | |||||||||||
Borrowings | 7 | 26 | 46 | 70 | |||||||||||
Total interest expense | 234 | 367 | 741 | 1,172 | |||||||||||
Net interest income | 2,814 | 2,711 | 8,049 | 8,144 | |||||||||||
Less provision for loan losses | 122 | 264 | 166 | 437 | |||||||||||
Net interest income after provision for loan losses | 2,692 | 2,447 | 7,883 | 7,707 | |||||||||||
Noninterest income: | |||||||||||||||
Service charges | 362 | 364 | 1,024 | 1,079 | |||||||||||
Rental income | 92 | 88 | 273 | 261 | |||||||||||
Cash surrender value of life insurance | 52 | 50 | 152 | 147 | |||||||||||
Realized gain on sale of securities | 67 | 69 | 256 | 106 | |||||||||||
Realized (loss) gain on sale of other real estate owned | 4 | 21 | (42 | ) | 162 | ||||||||||
Realized gain on disposal of assets | — | — | — | 104 | |||||||||||
Other income | 1 | 1 | 4 | 3 | |||||||||||
Total noninterest income | 578 | 593 | 1,667 | 1,862 | |||||||||||
Noninterest expense: | |||||||||||||||
Salaries and employee benefits | 1,491 | 1,376 | 4,387 | 4,112 | |||||||||||
Occupancy and equipment | 400 | 372 | 1,124 | 1,148 | |||||||||||
Directors fees | 67 | 63 | 218 | 217 | |||||||||||
Marketing | 75 | 55 | 164 | 198 | |||||||||||
Professional fees | 166 | 335 | 627 | 818 | |||||||||||
Information technology | 233 | 203 | 696 | 590 | |||||||||||
FDIC deposit insurance | 131 | 144 | 395 | 468 | |||||||||||
OREO expense, net | 61 | 35 | 190 | 185 | |||||||||||
Delivery expenses | 48 | 46 | 150 | 180 | |||||||||||
Other | 318 | 251 | 883 | 850 | |||||||||||
Total noninterest expense | 2,990 | 2,880 | 8,834 | 8,766 | |||||||||||
Income before income taxes | 280 | 160 | 716 | 803 | |||||||||||
Income tax expense | 87 | 24 | 196 | 205 | |||||||||||
Net income | 193 | 136 | 520 | 598 | |||||||||||
Less preferred stock dividends and accretion | 59 | 59 | 179 | 176 | |||||||||||
Net income available to common stockholders | $ | 134 | $ | 77 | $ | 341 | $ | 422 | |||||||
Basic and diluted earnings per share of common stock: | $ | 0.07 | $ | 0.04 | $ | 0.17 | $ | 0.21 | |||||||
Weighted average shares of common stock outstanding: | |||||||||||||||
Basic and diluted | 2,031,337 | 2,031,337 | 2,031,337 | 2,031,337 | |||||||||||
Dividends per share of common stock | $ | — | $ | — | $ | — | $ | — |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||||||||||||||
(Dollars in thousands) | For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||
(Unaudited) | 2012 | 2011 | 2012 | 2011 | |||||||||||
Net income | $ | 193 | $ | 136 | $ | 520 | $ | 598 | |||||||
Items of other comprehensive income, before tax: | |||||||||||||||
Unrealized gains on securities available for sale, net of taxes | 408 | 295 | 523 | 800 | |||||||||||
Reclassification adjustments for gains included in income before income tax expense | (67 | ) | (69 | ) | (256 | ) | (106 | ) | |||||||
Other comprehensive income before tax expense | 341 | 226 | 267 | 694 | |||||||||||
Less: Changes in deferred income taxes related to change in unrealized gains on securities available for sale | 120 | 33 | 114 | 160 | |||||||||||
Other comprehensive income, net of taxes | 221 | 193 | 153 | 534 | |||||||||||
Total comprehensive income | $ | 414 | $ | 329 | $ | 673 | $ | 1,132 |
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY | ||||||||||||||||||||||
NINE MONTHS ENDED SEPTEMBER 30, 2012 AND 2011 | ||||||||||||||||||||||
(Dollars in thousands except for share data) (Unaudited) | Number of Shares | Common Stock | Preferred Stock | Retained Earnings | Accumulated Other Comprehensive Loss | Total | ||||||||||||||||
Balances as of December 31, 2010 | 2,031,337 | $ | 8,732 | $ | 11,722 | $ | 17,264 | $ | (1,308 | ) | $ | 36,410 | ||||||||||
Accretion of Series B preferred stock issuance costs | 1 | (1 | ) | — | ||||||||||||||||||
Comprehensive income: | ||||||||||||||||||||||
Net income | 598 | 598 | ||||||||||||||||||||
Other comprehensive income, net of tax expense of $160 | 534 | 534 | ||||||||||||||||||||
Total comprehensive income, net of tax expense of $365 | 1,132 | |||||||||||||||||||||
Dividends declared on preferred stock | (175 | ) | (175 | ) | ||||||||||||||||||
Balances as of September 30, 2011 | 2,031,337 | $ | 8.732 | $ | 11.723 | $ | 17.686 | $ | (774 | ) | $ | 37,367 | ||||||||||
Balances as of December 31, 2011 | 2,031,337 | $ | 8,732 | $ | 11,724 | $ | 17,380 | $ | (1,439 | ) | $ | 36,397 | ||||||||||
Accretion of Series B preferred stock issuance costs | 1 | (1 | ) | — | ||||||||||||||||||
Comprehensive income: | ||||||||||||||||||||||
Net income | 520 | 520 | ||||||||||||||||||||
Other comprehensive loss, net of tax benefit of $114 | 153 | 153 | ||||||||||||||||||||
Total comprehensive income, net of tax expense of $310 | 673 | |||||||||||||||||||||
Dividends declared on preferred stock | (178 | ) | (178 | ) | ||||||||||||||||||
Balances as of September 30, 2012 | 2,031,337 | $ | 8,732 | $ | 11,725 | $ | 17,721 | $ | (1,286 | ) | $ | 36,892 |
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
NINE MONTHS ENDED SEPTEMBER 30, | ||||||||
(Dollars in thousands) | ||||||||
(Unaudited) | 2012 | 2011 | ||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 520 | $ | 598 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Provision for loan losses | 166 | 437 | ||||||
Depreciation and amortization | 256 | 260 | ||||||
Gain on disposition of asset | — | (104 | ) | |||||
Amortization of discounts/premiums on investments, net | 75 | 18 | ||||||
Loan purchase accounting amortization, net | 130 | 130 | ||||||
Deferred loan origination fees and costs, net | 108 | 71 | ||||||
Gains on sale of available for sale securities | (256 | ) | (106 | ) | ||||
Increase in cash surrender value of bank owned life insurance | (152 | ) | (147 | ) | ||||
Loss (gain) on sale of other real estate owned | 42 | (162 | ) | |||||
Write-down of other real estate owned | 38 | 80 | ||||||
Changes in: | ||||||||
Accrued interest receivable and other assets | 374 | (400 | ) | |||||
Other liabilities | 3,382 | (440 | ) | |||||
Net cash provided by operating activities | 4,683 | 235 | ||||||
Cash flows from investing activities: | ||||||||
Activity in available-for-sale securities: | ||||||||
Sales | 7,224 | 3,687 | ||||||
Maturities, prepayments and calls | 819 | 1,723 | ||||||
Principal collections | 7,478 | 2,407 | ||||||
Purchases | (40,263 | ) | (17,289 | ) | ||||
Net decrease in loans | 8,050 | 5,392 | ||||||
Purchases of bank premises and equipment | (263 | ) | (46 | ) | ||||
Payment of BOLI premium | (6 | ) | (6 | ) | ||||
Proceeds from disposition of asset | — | 110 | ||||||
Proceeds from sale of real estate owned | 400 | 914 | ||||||
Net cash used in investing activities | (16,561 | ) | (3,108 | ) | ||||
Cash flows from financing activities: | ||||||||
Net increase (decrease) in deposits | 2,228 | (9,065 | ) | |||||
Net increase (decrease) in other borrowings | 48 | (14 | ) | |||||
Cash dividends | (178 | ) | (175 | ) | ||||
Net cash provided by (used in) financing activities | 2,098 | (9,254 | ) | |||||
Net decrease in cash and cash equivalents | (9,780 | ) | (12,127 | ) | ||||
Cash and cash equivalents as of the beginning of the period | 61,296 | 74,575 | ||||||
Cash and cash equivalents as of the end of the period | $ | 51,516 | $ | 62,448 | ||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | ||||||||
Increase in unrealized gains on available for sale securities | 267 | 694 | ||||||
Net transfers in to other real estate owned from loans | 337 | 1,326 | ||||||
Accretion of Series B preferred stock issuance costs | 1 | 1 | ||||||
Cash paid during period for: | ||||||||
Interest | $ | 813 | $ | 1,023 | ||||
Income taxes | 181 | 181 |
1. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
2. | INVESTMENT SECURITIES |
• | U.S. Government agency securities (“U.S. Agencies”) |
• | U.S. Government sponsored residential mortgage backed securities (“MBS”), |
• | Non-Government sponsored residential MBS, and |
• | Municipal securities (“Municipals”) |
(Dollars in thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||
(Unaudited) | ||||||||||||||||
September 30, 2012 | ||||||||||||||||
U.S. Agencies | $ | 1,363 | $ | 7 | $ | — | $ | 1,370 | ||||||||
Government sponsored MBS | ||||||||||||||||
Residential | 57,605 | 679 | (5 | ) | 58,279 | |||||||||||
Non-Government sponsored MBS | ||||||||||||||||
Residential | 98 | 3 | — | 101 | ||||||||||||
Municipal securities | ||||||||||||||||
North Carolina | 2,969 | 214 | — | 3,183 | ||||||||||||
Total at September 30, 2012 | $ | 62,035 | $ | 903 | $ | (5 | ) | $ | 62,933 | |||||||
December 31, 2011 | ||||||||||||||||
U.S. Agencies | $ | 483 | $ | — | $ | — | $ | 483 | ||||||||
Government sponsored MBS | ||||||||||||||||
Residential | $ | 30,399 | $ | 416 | $ | (26 | ) | $ | 30,789 | |||||||
Non-Government sponsored MBS | ||||||||||||||||
Residential | 133 | 2 | — | 135 | ||||||||||||
Municipals | ||||||||||||||||
North Carolina | 3,505 | 197 | — | 3,702 | ||||||||||||
Out of state | 2,444 | 42 | — | 2,486 | ||||||||||||
Total at December 31, 2011 | $ | 36,964 | $ | 657 | $ | (26 | ) | $ | 37,595 |
(Dollars in thousands) | September 30, 2012 | |||||||
(Unaudited) | Fair Value | Amortized Cost | ||||||
U.S. Agencies | ||||||||
Due after one year through five years | $ | 1,007 | $ | 1,000 | ||||
Due after five years through ten years | 363 | 363 | ||||||
Total US Agencies | $ | 1,370 | $ | 1,363 | ||||
Government sponsored MBS | ||||||||
Residential | ||||||||
Due after one year through five years | $ | 147 | $ | 137 | ||||
Due after five years through ten years | 181 | 169 | ||||||
Due after ten years | 57,951 | 57,299 | ||||||
Total government sponsored MBS | $ | 58,279 | $ | 57,605 | ||||
Non-Government sponsored MBS | ||||||||
Residential | ||||||||
Due after ten years | $ | 101 | $ | 98 | ||||
Municipals (all North Carolina) | ||||||||
Due within one year | 492 | 466 | ||||||
Due after one year through five years | $ | 2,082 | $ | 1,895 | ||||
Due after five years through ten years | 609 | 608 | ||||||
Total municipals | $ | 3,183 | $ | 2,969 |
(Dollars in thousands) | Less Than 12 Months | 12 Months or Greater | Total | |||||||||||||||||||||
Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | |||||||||||||||||||
September 30, 2012 | ||||||||||||||||||||||||
Government sponsored MBS | ||||||||||||||||||||||||
Residential | $ | 2,535 | $ | (5 | ) | $ | — | $ | — | $ | 2,535 | $ | (5 | ) | ||||||||||
Municipals | ||||||||||||||||||||||||
Total at September 30, 2012 | $ | 2,535 | $ | (5 | ) | $ | — | $ | — | $ | 2,535 | $ | (5 | ) |
(Dollars in thousands) | Less Than 12 Months | 12 Months or Greater | Total | |||||||||||||||||||||
Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | |||||||||||||||||||
December 31, 2011 | ||||||||||||||||||||||||
Government sponsored MBS | ||||||||||||||||||||||||
Residential | $ | 9,669 | $ | (26 | ) | $ | — | $ | — | $ | 9,669 | $ | (26 | ) | ||||||||||
Total at December 31, 2011 | $ | 9,669 | $ | (26 | ) | $ | — | $ | — | $ | 9,669 | $ | (26 | ) |
3. | RECONCILIATIONS OF BASIC AND DILUTED EARNINGS PER COMMON SHARE ("EPS") |
4. | LOANS AND ALLOWANCE FOR LOAN LOSSES |
• | Changes in lending policies and procedures, including underwriting standards and collection practices, and charge-off and recovery experience; |
• | Changes in national economic and business conditions and developments and the effect of unemployment on African Americans, who are the majority of our customers; |
• | Changes in the nature and volume of the loan portfolio; |
• | Changes in the experience, ability, and depth of lending management and staff; |
• | Changes in trends of the volume and severity of past due and classified loans; and changes in trends in the volume of non-accrual loans, troubled debt restructurings and classified loans; |
• | Changes in the quality of the loan review system and the degree of oversight by the Bank's Board of Directors; |
• | The existence and effect of any concentrations of credit, and changes in the level of such concentrations; and |
• | The effect of external factors such as competition and legal and regulatory requirements. |
September 30, 2012 | December 31, 2011 | ||||||
(Dollars in thousands) | |||||||
Commercial | $ | 5,540 | $ | 7,688 | |||
Commercial real estate: | |||||||
Construction | 1,726 | 1,871 | |||||
Owner occupied | 20,051 | 20,352 | |||||
Other | 26,628 | 24,831 | |||||
Faith-based non-profit: | |||||||
Construction | 1,910 | 2,287 | |||||
Owner occupied | 77,137 | 78,161 | |||||
Other | 6,861 | 8,703 | |||||
Residential real estate: | |||||||
First mortgage | 25,120 | 27,896 | |||||
Multifamily | 5,904 | 7,207 | |||||
Home equity | 3,420 | 4,457 | |||||
Construction | 381 | — | |||||
Consumer | 1,455 | 1,667 | |||||
Other loans | 2,808 | 2,964 | |||||
Loans, net of deferred fees | 178,941 | 188,084 | |||||
Allowance for loan losses | (3,498 | ) | (3,850 | ) | |||
Loans, net of allowance for losses | $ | 175,443 | $ | 184,234 |
Allowance for loan losses: | Individually evaluated for impairment | Collectively evaluated for impairment | Outstanding as of September 30, 2012 | ||||||||
(Dollars in thousands) | |||||||||||
Commercial | $ | — | $ | 25 | $ | 25 | |||||
Commercial real estate | $ | 313 | $ | 856 | $ | 1,169 | |||||
Faith-based non-profit | $ | 52 | $ | 979 | $ | 1,031 | |||||
Residential real estate | $ | 342 | $ | 832 | $ | 1,174 | |||||
Consumer | $ | — | $ | 52 | $ | 52 | |||||
Other loans | $ | — | $ | 47 | $ | 47 | |||||
Total | $ | 707 | $ | 2,791 | $ | 3,498 | |||||
Loans: | |||||||||||
(Dollars in thousands) | |||||||||||
Commercial | $ | 590 | $ | 4,950 | $ | 5,540 | |||||
Commercial real estate | 9,134 | 39,271 | 48,405 | ||||||||
Faith-based non-profit | 13,557 | 72,351 | 85,908 | ||||||||
Residential real estate | 2,186 | 32,639 | 34,825 | ||||||||
Consumer | — | 1,455 | 1,455 | ||||||||
Other loans | — | 2,808 | 2,808 | ||||||||
Total | $ | 25,467 | $ | 153,474 | $ | 178,941 |
Allowance for loan losses: | Individually evaluated for impairment | Collectively evaluated for impairment | Outstanding as of December 31, 2011 | ||||||||
(Dollars in thousands) | |||||||||||
Commercial | $ | — | $ | 348 | $ | 348 | |||||
Commercial real estate | 119 | 852 | 971 | ||||||||
Faith-based non-profit | 56 | 1,072 | 1,128 | ||||||||
Residential real estate | 543 | 756 | 1,299 | ||||||||
Consumer | 2 | 60 | 62 | ||||||||
Other loans | — | 42 | 42 | ||||||||
Total | $ | 720 | $ | 3,130 | $ | 3,850 | |||||
Loans: | |||||||||||
(Dollars in thousands) | |||||||||||
Commercial | $ | 590 | $ | 7,098 | $ | 7,688 | |||||
Commercial real estate | 6,828 | 40,226 | 47,054 | ||||||||
Faith-based non-profit | 13,816 | 75,335 | 89,151 | ||||||||
Residential real estate | 2,180 | 37,380 | 39,560 | ||||||||
Consumer | 2 | 1,665 | 1,667 | ||||||||
Other loans | — | 2,964 | 2,964 | ||||||||
Total | $ | 23,416 | $ | 164,668 | $ | 188,084 |
(Dollars in thousands) | September 30, 2012 | December 31, 2011 | |||||
Loans with no allocated allowance for loan losses | $ | 490 | $ | 3,214 | |||
Loans with allocated allowance for loan losses | 2,809 | 1,545 | |||||
Total | $ | 3,299 | $ | 4,759 | |||
Amount of the allowance for loan losses allocated | $ | 493 | $ | 600 |
(Dollars in thousands) | For the Nine Months Ended | For the Three Months Ended | For the Nine Months Ended | For the Three Months Ended | |||||||||||
Average of impaired loans during the periods ended | September 30, 2012 | September 30, 2011 | |||||||||||||
Commercial | $ | — | $ | — | $ | 15 | $ | 15 | |||||||
Commercial real estate: | |||||||||||||||
Owner occupied | 296 | 44 | 1,051 | 1,042 | |||||||||||
Other | 874 | 1,653 | 109 | 117 | |||||||||||
Faith-based non-profit: | |||||||||||||||
Owner occupied | 2,522 | 2,522 | 5,948 | 6,057 | |||||||||||
Residential real estate: | |||||||||||||||
First mortgage | 1,202 | 1,222 | 799 | 1,071 | |||||||||||
Multifamily | — | — | 547 | 629 | |||||||||||
Home equity | 274 | 267 | 190 | 278 | |||||||||||
Consumer | 2 | 5 | 5 | ||||||||||||
Average impaired loans | $ | 5,170 | $ | 5,708 | $ | 8,712 | $ | 9,214 |
(Dollars in thousands) | September 30, 2012 | December 31, 2011 | |||||
Loans with no allocated allowance for loan losses | $ | 21,004 | $ | 16,919 | |||
Loans with allocated allowance for loan losses | 1,163 | 1,738 | |||||
Total | $ | 22,167 | $ | 18,657 | |||
Amount of the allowance for loan losses allocated | $ | 214 | $ | 120 |
For the Nine Months Ended | For the Three Months Ended | For the Nine Months Ended | For the Three Months Ended | ||||||||||||
(Dollars in thousands) | September 30, 2012 | September 30, 2011 | |||||||||||||
Commercial | $ | 590 | $ | 590 | $ | 1,180 | $ | 1,180 | |||||||
Commercial real estate: | |||||||||||||||
Construction | 687 | 374 | 1,029 | 1,021 | |||||||||||
Owner occupied | 998 | 856 | 609 | 606 | |||||||||||
Other | 5,433 | 6,195 | 3,039 | 3,045 | |||||||||||
Faith-based non-profit: | |||||||||||||||
Owner occupied | 11,792 | 12,342 | 5,798 | 7,080 | |||||||||||
Residential real estate: | |||||||||||||||
First mortgage | 618 | 598 | 345 | 401 | |||||||||||
Average TDR loans | $ | 20,118 | $ | 20,955 | $ | 12,000 | $ | 13,333 |
September 30, 2012 | |||||||||||||||||||
(Dollars in thousands) | Unpaid Principal Balance | Recorded Investment | Allowance for Loan Losses Allocated | Interest Earned Nine Months | Interest Earned Three Months | ||||||||||||||
Without allowance recorded: | |||||||||||||||||||
Commercial real estate: | |||||||||||||||||||
Owner occupied | $ | 42 | $ | 42 | $ | — | $ | — | $ | — | |||||||||
Other | 50 | 50 | — | — | — | ||||||||||||||
Residential real estate: | |||||||||||||||||||
First mortgage | 398 | 398 | — | 6 | — | ||||||||||||||
Total impaired loans without allowance recorded | $ | 490 | $ | 490 | $ | — | $ | 6 | $ | — | |||||||||
With an allowance recorded: | |||||||||||||||||||
Commercial real estate: | |||||||||||||||||||
Other | 1,591 | 1,591 | 156 | 65 | — | ||||||||||||||
Residential real estate: | |||||||||||||||||||
First mortgage | 1,218 | 1,218 | 337 | 40 | 11 | ||||||||||||||
Total impaired loans with allowance recorded | $ | 2,809 | $ | 2,809 | $ | 493 | $ | 105 | $ | 11 | |||||||||
Total impaired loans | $ | 3,299 | $ | 3,299 | $ | 493 | $ | 111 | $ | 11 |
December 31, 2011 | September 30, 2011 | |||||||||||||||
Unpaid Principal Balance | Allowance for Loan Losses Allocated | Interest Earned Nine Months | Interest Earned Three Months | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
With no related allowance recorded: | ||||||||||||||||
Commercial real estate: | ||||||||||||||||
Owner occupied | 322 | — | 17 | 17 | ||||||||||||
Other | 56 | — | — | — | ||||||||||||
Faith-based non-profit: | ||||||||||||||||
Owner occupied | 2,522 | — | 61 | 61 | ||||||||||||
Residential real estate: | ||||||||||||||||
First mortgage | 402 | — | — | — | ||||||||||||
Total impaired loans without allowance recorded | $ | 3,302 | $ | — | $ | 78 | $ | 78 | ||||||||
With an allowance recorded: | ||||||||||||||||
Commercial real estate: | ||||||||||||||||
Owner occupied | $ | 279 | $ | 47 | $ | — | $ | — | ||||||||
Other | 40 | 10 | — | — | ||||||||||||
Residential real estate: | ||||||||||||||||
First mortgage | 763 | 290 | 26 | 9 | ||||||||||||
Home equity | 462 | 251 | — | — | ||||||||||||
Consumer | 2 | 2 | — | — | ||||||||||||
Total impaired loans with allowance recorded | $ | 1,546 | $ | 600 | $ | 26 | $ | 9 | ||||||||
Total impaired loans | $ | 4,848 | $ | 600 | $ | 104 | $ | 87 |
September 30, 2012 | |||||||||||||||||||||||||||
(Dollars in thousands) | Impaired Balance | Liquid Collateral | Total Exposure | Recorded Investment | Allowance for Loan Losses Allocated | Interest Earned Nine Months | Interest Earned Three Months | ||||||||||||||||||||
Without related allowance recorded: | |||||||||||||||||||||||||||
Commercial | $ | 1,567 | $ | — | $ | 1,567 | $ | 590 | $ | — | $ | — | $ | — | |||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||
Construction | 374 | — | 374 | 374 | — | 24 | 7 | ||||||||||||||||||||
Owner occupied | 509 | — | 509 | 509 | — | 28 | 6 | ||||||||||||||||||||
Other | 4,912 | — | 4,912 | 5,914 | — | 143 | 58 | ||||||||||||||||||||
Faith-based non-profit: | |||||||||||||||||||||||||||
Owner occupied | 13,133 | 103 | 13,030 | 13,126 | — | 331 | 69 | ||||||||||||||||||||
Residential real estate: | |||||||||||||||||||||||||||
First mortgage | 491 | — | 491 | 491 | — | 12 | 4 | ||||||||||||||||||||
Total TDRs without allowance recorded | $ | 20,986 | $ | 103 | $ | 20,883 | $ | 21,004 | $ | — | $ | 538 | $ | 144 | |||||||||||||
With an allowance recorded: | |||||||||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||
Owner occupied | 239 | — | 239 | 239 | 102 | 12 | 3 | ||||||||||||||||||||
Other | 414 | — | 414 | 414 | 55 | 26 | 6 | ||||||||||||||||||||
Faith-based non-profit | |||||||||||||||||||||||||||
Owner occupied | 430 | — | 430 | 430 | 52 | 22 | 5 | ||||||||||||||||||||
Residential real estate: | |||||||||||||||||||||||||||
First mortgage | 80 | 6 | 74 | 80 | 5 | 4 | 1 | ||||||||||||||||||||
Total TDRs with allowance recorded | $ | 1,163 | $ | 6 | $ | 1,157 | $ | 1,163 | $ | 214 | $ | 64 | $ | 15 | |||||||||||||
Total TDRs | $ | 22,149 | $ | 109 | $ | 22,040 | $ | 22,167 | $ | 214 | $ | 602 | $ | 159 |
December 31, 2011 | September 30, 2011 | |||||||||||||||||||||||||||
Impaired Balance | Liquid Collateral | Total Exposure | Recorded Investment | Allowance for Loan Losses Allocated | Interest Earned Nine Months | Interest Earned Three Months | ||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||
With no related allowance recorded: | ||||||||||||||||||||||||||||
Commercial | $ | 1,567 | $ | — | $ | 1,567 | $ | 590 | $ | — | $ | — | — | |||||||||||||||
Commercial real estate: | ||||||||||||||||||||||||||||
Construction | 628 | — | 628 | 628 | — | — | — | |||||||||||||||||||||
Owner occupied | 893 | — | 893 | 895 | — | 20 | 16 | |||||||||||||||||||||
Other | 5,112 | — | 5,112 | 3,814 | — | 4 | — | |||||||||||||||||||||
Faith-based non-profit: | ||||||||||||||||||||||||||||
Owner occupied | 10,391 | (103 | ) | 10,288 | 10,385 | — | 297 | 110 | ||||||||||||||||||||
Residential real estate: | ||||||||||||||||||||||||||||
First mortgage | 617 | (9 | ) | 608 | 607 | — | 4 | 1 | ||||||||||||||||||||
Total TDRs with no allowance recorded | $ | 19,208 | $ | (112 | ) | $ | 19,096 | $ | 16,919 | $ | — | $ | 325 | $ | 127 | |||||||||||||
With an allowance recorded: | ||||||||||||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||||||||||
Construction | 378 | — | 378 | 378 | 15 | 24 | 9 | |||||||||||||||||||||
Owner occupied | 416 | — | 416 | 416 | 47 | — | — | — | ||||||||||||||||||||
Other | — | — | — | — | — | 19 | 3 | |||||||||||||||||||||
Faith-based non-profit: | ||||||||||||||||||||||||||||
Construction | — | — | — | — | — | — | ||||||||||||||||||||||
Owner occupied | 908 | — | 908 | 909 | 56 | 33 | 15 | |||||||||||||||||||||
Other | — | — | — | — | — | — | — | |||||||||||||||||||||
Residential real estate: | ||||||||||||||||||||||||||||
First mortgage | 35 | — | 35 | 35 | 2 | — | — | |||||||||||||||||||||
Multifamily | — | — | — | — | — | — | — | |||||||||||||||||||||
Home equity | — | — | — | — | — | — | — | |||||||||||||||||||||
Construction | — | — | — | — | — | — | — | |||||||||||||||||||||
Consumer | — | — | — | — | — | — | — | |||||||||||||||||||||
Total TDRs with allowance recorded | $ | 1,737 | $ | — | $ | 1,737 | $ | 1,738 | $ | 120 | $ | 76 | $ | 27 | ||||||||||||||
Total TDRs | $ | 20,945 | $ | (112 | ) | $ | 20,833 | $ | 18,657 | $ | 120 | $ | 401 | $ | 154 |
For the Three Months Ended | ||||||||||||||
September 30, 2012 | ||||||||||||||
Number of Loans | Recorded Investment | Unpaid Principal Balance | Allowance | Concession | Performing or not | |||||||||
(Dollars in thousands) | ||||||||||||||
Faith-based non-profit | ||||||||||||||
Owner occupied | 1 | $ | 2,522 | $ | 2,522 | — | Below market interest rate and extended repayment terms | Not yet due as of 9-30-12 | ||||||
Total TDR Loans | $ | 1 | $ | 2,522 | $ | 2,522 | $ | — | ||||||
For the Nine Months Ended | ||||||||||||||
September 30, 2012 | ||||||||||||||
Number of Loans | Recorded Investment | Unpaid Principal Balance | Allowance | Concession | Performing or not | |||||||||
(Dollars in thousands) | ||||||||||||||
Commercial real estate: | ||||||||||||||
Owner occupied | 1 | $ | 80 | $ | 80 | — | Extended repayment terms | Performing | ||||||
Other | 1 | 1,353 | 1,353 | — | Extended repayment terms | Performing | ||||||||
Faith-based non-profit | ||||||||||||||
Owner occupied | 1 | 2,522 | 2,522 | — | Below market interest rate and extended repayment terms | Not yet due as of 9-30-12 | ||||||||
Total TDR Loans | $ | 3 | $ | 3,955 | $ | 3,955 | $ | — |
(Dollars in thousands) | Nonaccrual | Number | Loans Past Due Over 90 Days Still Accruing | Number | |||||||||
Commercial | $ | 590 | 1 | $ | — | — | |||||||
Commercial real estate: | |||||||||||||
Owner occupied | 42 | 1 | 170 | 3 | |||||||||
Other | 50 | 1 | — | — | |||||||||
Faith-based non-profit: | |||||||||||||
Owner occupied | 5,600 | 4 | 145 | 1 | |||||||||
Residential real estate: | |||||||||||||
First mortgage | 3,400 | 42 | 89 | 2 | |||||||||
Home equity | 20 | 3 | — | — | |||||||||
Consumer | 18 | 3 | — | — | |||||||||
Total | $ | 9,720 | 55 | $ | 404 | 6 |
Nonaccrual | Number | Loans Past Due Over 90 Days Still Accruing | Number | ||||||||||
(Dollars in thousands) | |||||||||||||
Commercial | $ | 590 | 1 | $ | — | — | |||||||
Commercial real estate: | |||||||||||||
Construction | 628 | 1 | — | — | |||||||||
Owner occupied | 772 | 4 | 52 | 1 | |||||||||
Other | 3,503 | 4 | 1 | 1 | |||||||||
Faith-based non-profit: | |||||||||||||
Owner occupied | 5,497 | 3 | — | — | |||||||||
Residential real estate: | |||||||||||||
First mortgage | 3,749 | 39 | 47 | 1 | |||||||||
Multifamily | — | — | 114 | 1 | |||||||||
Home equity | 582 | 8 | — | — | |||||||||
Consumer | 5 | 2 | — | — | |||||||||
Total | $ | 15,326 | 62 | $ | 214 | 4 |
(Dollars in thousands) | 30 – 59 Days Past Due | 60 – 89 Days Past Due | Greater than 90 Days Past Due | Total Past Due | Loans Not Past Due | Total | |||||||||||||||||
Commercial | $ | 6 | $ | — | $ | 590 | $ | 596 | $ | 4,944 | $ | 5,540 | |||||||||||
Commercial real estate: | |||||||||||||||||||||||
Construction | — | — | — | — | 1,726 | 1,726 | |||||||||||||||||
Owner occupied | — | — | 213 | 213 | 19,838 | 20,051 | |||||||||||||||||
Other | — | 353 | 50 | 403 | 26,225 | 26,628 | |||||||||||||||||
Faith-based non-profit: | |||||||||||||||||||||||
Construction | — | — | — | — | 1,910 | 1,910 | |||||||||||||||||
Owner occupied | 833 | 51 | 2,930 | 3,814 | 73,323 | 77,137 | |||||||||||||||||
Other | — | — | — | — | 6,861 | 6,861 | |||||||||||||||||
Residential real estate: | |||||||||||||||||||||||
First mortgage | 468 | 319 | 2,554 | 3,341 | 21,779 | 25,120 | |||||||||||||||||
Multifamily | — | — | — | — | 5,904 | 5,904 | |||||||||||||||||
Home equity | 157 | — | 7 | 164 | 3,256 | 3,420 | |||||||||||||||||
Construction | — | — | — | — | 381 | 381 | |||||||||||||||||
Consumer | 14 | 2 | — | 16 | 1,439 | 1,455 | |||||||||||||||||
Other loans | — | — | — | — | 2,808 | 2,808 | |||||||||||||||||
Total | $ | 1,478 | $ | 725 | $ | 6,344 | $ | 8,547 | $ | 170,394 | $ | 178,941 |
30 – 59 Days Past Due | 60 – 89 Days Past Due | Greater than 90 Days Past Due | Total Past Due | Loans Not Past Due | Total | ||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Commercial | $ | 2 | $ | — | $ | 590 | $ | 592 | $ | 7,096 | $ | 7,688 | |||||||||||
Commercial real estate: | |||||||||||||||||||||||
Construction | 378 | — | 628 | 1,006 | 865 | 1,871 | |||||||||||||||||
Owner occupied | 343 | — | 824 | 1,167 | 19,185 | 20,352 | |||||||||||||||||
Other | — | — | 3,503 | 3,503 | 21,328 | 24,831 | |||||||||||||||||
Faith-based and non-profit: | |||||||||||||||||||||||
Construction | — | — | — | — | 2,287 | 2,287 | |||||||||||||||||
Owner occupied | — | — | 2,522 | 2,522 | 75,639 | 78,161 | |||||||||||||||||
Other | — | — | — | — | 8,703 | 8,703 | |||||||||||||||||
Residential real estate: | |||||||||||||||||||||||
First mortgage | 643 | 309 | 2,805 | 3,757 | 24,139 | 27,896 | |||||||||||||||||
Multifamily | — | — | 114 | 114 | 7,093 | 7,207 | |||||||||||||||||
Home equity | — | 127 | 567 | 694 | 3,763 | 4,457 | |||||||||||||||||
Construction | — | — | — | — | — | — | |||||||||||||||||
Consumer | 10 | — | — | 10 | 1,657 | 1,667 | |||||||||||||||||
Other loans | — | — | — | — | 2,964 | 2,964 | |||||||||||||||||
Total | $ | 1,376 | $ | 436 | $ | 11,553 | $ | 13,365 | $ | 174,719 | $ | 188,084 |
(Dollars in thousands) | September 30, 2012 | ||||||
Amount | Number | ||||||
Loans past due over 90 days still on accrual | $ | 404 | 6 | ||||
Nonaccrual loans past due | |||||||
Less than 30 days | $ | 3,436 | 12 | ||||
30-59 days | 308 | 3 | |||||
60-89 days | 35 | 1 | |||||
90+ days | 5,941 | 39 | |||||
Nonaccrual loans | $ | 9,720 | 55 |
For the Three Months Ended | |||||||||||||||||||
September 30, 2012 | |||||||||||||||||||
(Dollars in thousands) | June 30, 2012 | Charge-offs | Recoveries | Provision/ (Recovery) | September 30, 2012 | ||||||||||||||
Commercial | $ | 61 | $ | — | $ | — | $ | (36 | ) | $ | 25 | ||||||||
Commercial real estate | 1,187 | — | — | (18 | ) | 1,169 | |||||||||||||
Faith-based non-profit | 1,091 | — | — | (60 | ) | 1,031 | |||||||||||||
Residential real estate | 1,243 | (303 | ) | 4 | 230 | 1,174 | |||||||||||||
Consumer | 46 | — | 4 | 2 | 52 | ||||||||||||||
Other | 51 | (8 | ) | — | 4 | 47 | |||||||||||||
Total | $ | 3,679 | $ | (311 | ) | $ | 8 | $ | 122 | $ | 3,498 | ||||||||
For the Nine Months Ended | |||||||||||||||||||
September 30, 2012 | |||||||||||||||||||
December 31, 2011 | Charge-offs | Recoveries | Provision/ (Recovery) | September 30, 2012 | |||||||||||||||
Commercial | $ | 348 | $ | (323 | ) | $ | 25 | ||||||||||||
Commercial real estate | 971 | (56 | ) | 1 | 253 | 1,169 | |||||||||||||
Faith-based non-profit | 1,128 | (97 | ) | 1,031 | |||||||||||||||
Residential real estate | 1,299 | (539 | ) | 93 | 321 | 1,174 | |||||||||||||
Consumer | 62 | (1 | ) | 1 | (10 | ) | 52 | ||||||||||||
Other | 42 | (26 | ) | 9 | 22 | 47 | |||||||||||||
Total | $ | 3,850 | $ | (622 | ) | $ | 104 | $ | 166 | $ | 3,498 |
For the Three Months Ended | |||||||||||||||||||
(Dollars in thousands) | June 30, 2011 | Charge-offs | Recoveries | Provision/ (Recovery) | September 30, 2011 | ||||||||||||||
Commercial | $ | 582 | $ | (14 | ) | $ | — | $ | (10 | ) | $ | 558 | |||||||
Commercial real estate | 840 | (19 | ) | 3 | 27 | 851 | |||||||||||||
Faith-based non-profit | 1,220 | — | — | 13 | 1,233 | ||||||||||||||
Residential real estate | 1,457 | (181 | ) | — | 242 | 1,518 | |||||||||||||
Consumer | 43 | (8 | ) | — | 26 | 61 | |||||||||||||
Other | 103 | (6 | ) | 2 | (34 | ) | 65 | ||||||||||||
Total | $ | 4,245 | $ | (228 | ) | $ | 5 | $ | 264 | $ | 4,286 | ||||||||
For the Nine Months Ended | |||||||||||||||||||
December 31, 2010 | Charge-offs | Recoveries | Provision/ (Recovery) | September 30, 2011 | |||||||||||||||
Commercial | $ | 651 | $ | (14 | ) | $ | 95 | $ | (174 | ) | $ | 558 | |||||||
Commercial real estate | 651 | (19 | ) | 129 | 90 | 851 | |||||||||||||
Faith-based non-profit | 1,289 | — | — | (56 | ) | 1,233 | |||||||||||||
Residential real estate | 1,045 | (181 | ) | 2 | 652 | 1,518 | |||||||||||||
Consumer | 105 | (8 | ) | 6 | (42 | ) | 61 | ||||||||||||
Other | 110 | (23 | ) | 11 | (33 | ) | 65 | ||||||||||||
Total | $ | 3,851 | $ | (245 | ) | $ | 243 | $ | 437 | $ | 4,286 |
• | Special Mention. Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date. These loans exhibit a moderate likelihood of some loss related to those loans and leases. |
• | Substandard. Loans classified as substandard are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of or repayment according to the original terms of the debt. Substandard loans include loans within the mortgage and consumer portfolio segments that are past due 90 days or more as to principal or interest if the loan to value does not support full repayment. Substandard loans are evaluated for impairment on an individual loan basis unless the substandard loan is a smaller balance homogenous loan that is not a TDR. These loans exhibit a distinct possibility that the Bank will sustain some loss if the deficiencies related to the loans are not corrected in a timely manner. |
• | Doubtful. Loans classified as doubtful have all the weaknesses inherent in 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. |
• | Loss. Based on current facts and circumstances, loans classified as loss are not expected to be repaid, or that collateral will be difficult to liquidate. Loans classified as loss are charged off to the ALLL with board approval. |
• | Pass (includes internal watch). Loans are classified as pass in all classes within the portfolio that are not identified as special mention, substandard, doubtful, or loss, are contractually current as to principal and interest, and are otherwise in compliance with the contractual terms of the loan agreement. These loans exhibit a low likelihood of loss. |
(Dollars in thousands) | Pass | Special Mention | Substandard | Doubtful | Total | ||||||||||||||
Commercial | $ | 4,941 | $ | — | $ | 9 | $ | 590 | $ | 5,540 | |||||||||
Commercial real estate: | |||||||||||||||||||
Construction | 1,352 | — | 374 | — | 1,726 | ||||||||||||||
Owner occupied | 14,492 | 3,730 | 1,829 | — | 20,051 | ||||||||||||||
Other | 16,176 | 982 | 9,470 | — | 26,628 | ||||||||||||||
Faith-based and non-profit: | |||||||||||||||||||
Construction | 1,910 | — | — | — | 1,910 | ||||||||||||||
Owner occupied | 56,091 | 5,829 | 15,217 | — | 77,137 | ||||||||||||||
Other | 6,780 | 77 | 4 | — | 6,861 | ||||||||||||||
Residential real estate: | |||||||||||||||||||
First mortgage | 19,735 | 1,468 | 3,917 | — | 25,120 | ||||||||||||||
Multifamily | 5,777 | 63 | 64 | — | 5,904 | ||||||||||||||
Home equity | 3,125 | — | 295 | — | 3,420 | ||||||||||||||
Construction | 381 | — | — | — | 381 | ||||||||||||||
Consumer | 1,427 | 4 | 24 | — | 1,455 | ||||||||||||||
Other loans | 2,808 | — | — | — | 2,808 | ||||||||||||||
Total | $ | 134,995 | $ | 12,153 | $ | 31,203 | $ | 590 | $ | 178,941 |
(Dollars in thousands) | Pass | Special Mention | Substandard | Doubtful | Total | ||||||||||||||
Commercial | $ | 24 | $ | — | $ | 1 | $ | — | $ | 25 | |||||||||
Commercial real estate: | |||||||||||||||||||
Construction | 20 | — | — | — | 20 | ||||||||||||||
Owner occupied | 294 | 89 | 127 | — | 510 | ||||||||||||||
Other | 370 | 23 | 246 | — | 639 | ||||||||||||||
Faith-based and non-profit: | |||||||||||||||||||
Construction | 26 | — | — | — | 26 | ||||||||||||||
Owner occupied | 751 | 113 | 48 | — | 912 | ||||||||||||||
Other | 92 | 1 | — | — | 93 | ||||||||||||||
Residential real estate: | |||||||||||||||||||
First mortgage | 571 | 35 | 400 | — | 1,006 | ||||||||||||||
Multifamily | 114 | 1 | 1 | — | 116 | ||||||||||||||
Home equity | 38 | — | 9 | — | 47 | ||||||||||||||
Construction | 5 | — | — | — | 5 | ||||||||||||||
Consumer | 51 | — | 1 | — | 52 | ||||||||||||||
Other loans | 47 | 47 | |||||||||||||||||
Total | $ | 2,403 | $ | 262 | $ | 833 | $ | — | $ | 3,498 |
Pass | Special Mention | Substandard | Doubtful | Total | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Commercial | $ | 6,882 | $ | 204 | $ | 12 | $ | 590 | $ | 7,688 | |||||||||
Commercial real estate: | |||||||||||||||||||
Construction | 857 | — | 1,014 | — | 1,871 | ||||||||||||||
Owner occupied | 15,766 | 1,996 | 2,590 | — | 20,352 | ||||||||||||||
Other | 14,938 | 1,004 | 8,889 | — | 24,831 | ||||||||||||||
Faith-based and non-profit: | |||||||||||||||||||
Construction | 2,287 | — | — | — | 2,287 | ||||||||||||||
Owner occupied | 51,354 | 10,766 | 16,041 | — | 78,161 | ||||||||||||||
Other | 8,125 | 572 | 6 | — | 8,703 | ||||||||||||||
Residential real estate: | |||||||||||||||||||
First mortgage | 21,938 | 1,363 | 4,595 | — | 27,896 | ||||||||||||||
Multifamily | 6,661 | 42 | 504 | — | 7,207 | ||||||||||||||
Home equity | 3,529 | — | 928 | — | 4,457 | ||||||||||||||
Construction | — | — | — | — | — | ||||||||||||||
Consumer | 1,644 | 14 | 7 | 2 | 1,667 | ||||||||||||||
Other loans | 2,964 | — | — | — | 2,964 | ||||||||||||||
Total | $ | 136,945 | $ | 15,961 | $ | 34,586 | $ | 592 | $ | 188,084 |
Pass | Special Mention | Substandard | Doubtful | Total | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Commercial | $ | 347 | $ | — | $ | 1 | $ | — | $ | 348 | |||||||||
Commercial real estate: | |||||||||||||||||||
Construction | 12 | — | 16 | — | 28 | ||||||||||||||
Owner occupied | 328 | 41 | 71 | — | 440 | ||||||||||||||
Other | 322 | 23 | 158 | — | 503 | ||||||||||||||
Faith-based and non-profit: | |||||||||||||||||||
Construction | 32 | — | — | — | 32 | ||||||||||||||
Owner occupied | 740 | 156 | 88 | — | 984 | ||||||||||||||
Other | 104 | 8 | — | — | 112 | ||||||||||||||
Residential real estate: | |||||||||||||||||||
First mortgage | 444 | 31 | 347 | — | 822 | ||||||||||||||
Multifamily | 128 | 1 | 11 | — | 140 | ||||||||||||||
Home equity | 72 | — | 265 | — | 337 | ||||||||||||||
Construction | — | — | — | — | — | ||||||||||||||
Consumer | 56 | — | — | 6 | 62 | ||||||||||||||
Other loans | 42 | — | — | — | 42 | ||||||||||||||
Total | $ | 2,627 | $ | 260 | $ | 957 | $ | 6 | $ | 3,850 |
5. | OTHER REAL ESTATE OWNED ("OREO") |
(Dollars in thousands) | June 30, 2012 | Sales (Cash) | Losses | Additions | September 30, 2012 | ||||||||||||||
Commercial real estate | $ | 2,447 | $ | (203 | ) | $ | — | $ | — | $ | 2,244 | ||||||||
Faith-based non-profit | 199 | — | — | — | 199 | ||||||||||||||
Residential | 420 | (56 | ) | (1 | ) | — | 363 | ||||||||||||
Land | 307 | (3 | ) | (38 | ) | — | 266 | ||||||||||||
Total | $ | 3,373 | $ | (262 | ) | $ | (39 | ) | $ | — | $ | 3,072 |
(Dollars in thousands) | December 31, 2011 | Sales (Cash) | Losses | Additions | September 30, 2012 | ||||||||||||||
Commercial | $ | 2,481 | $ | (203 | ) | $ | (33 | ) | $ | 2,245 | |||||||||
Faith-based and non-profit | 253 | (52 | ) | (3 | ) | 198 | |||||||||||||
Residential | 174 | (142 | ) | (6 | ) | 337 | 363 | ||||||||||||
Land | 307 | (3 | ) | (38 | ) | 266 | |||||||||||||
Total | $ | 3,215 | $ | (400 | ) | $ | (80 | ) | $ | 337 | $ | 3,072 |
6. | FHLB ADVANCES |
(Dollars in thousands) | September 30, 2012 | ||||||||
Amount | Maturity Date | Rate | |||||||
Fixed Rate Note | $ | 708 | 2020 | 0.50 | % |
December 31, 2011 | |||||||||
Amount | Maturity Date | Rate | |||||||
Fixed Rate Note | $ | 725 | 2020 | 0.50 | % |
7. | EMPLOYEE BENEFIT PLANS |
Cash Balance Plan | SERP | Total | |||||||||||||||||||||
(Dollars in thousands) | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | |||||||||||||||||
Service cost | $ | 107 | $ | 103 | $ | — | $ | — | $ | 107 | $ | 103 | |||||||||||
Interest cost | 167 | 187 | 71 | 80 | 238 | 267 | |||||||||||||||||
Expected return on plan assets | (199 | ) | (181 | ) | — | — | (199 | ) | (181 | ) | |||||||||||||
Amortization of prior service costs | 1 | 1 | — | 3 | 1 | 4 | |||||||||||||||||
Recognized net actuarial gain | 159 | 114 | 13 | 3 | 172 | 117 | |||||||||||||||||
Net periodic cost | $ | 235 | $ | 224 | $ | 84 | $ | 86 | $ | 319 | $ | 310 | |||||||||||
The SERP and the Cash Balance Plan components of the net periodic benefit cost reflected in salaries and employee benefits expense for the three months ended September 30, 2012 and September 30, 2011 were: | |||||||||||||||||||||||
(Dollars in thousands) | Cash Balance Plan | SERP | Total | ||||||||||||||||||||
2012 | 2011 | 2012 | 2011 | 2012 | 2011 | ||||||||||||||||||
Service cost | $ | 36 | $ | 34 | $ | — | $ | — | $ | 36 | $ | 34 | |||||||||||
Interest cost | 56 | 62 | 23 | 27 | 79 | 89 | |||||||||||||||||
Expected return on plan assets | (66 | ) | (60 | ) | — | — | (66 | ) | (60 | ) | |||||||||||||
Amortization of prior service costs | — | — | — | 1 | — | 1 | |||||||||||||||||
Recognized net actuarial gain | 53 | 38 | 4 | 1 | 57 | 39 | |||||||||||||||||
Net periodic cost | $ | 79 | $ | 74 | $ | 27 | $ | 29 | $ | 106 | $ | 103 |
• | U.S. Large Cap Equities: S&P 500, Russell 1000, Russell 1000 Value, and Russell 1000 Growth |
• | U.S. Mid Cap Equities: S&P 400 Mid Cap, Russell Mid Cap Value, and Russell Mid Cap Growth |
• | U.S. Small Cap Equities: S&P 600 Small Cap, Russell 2000 Value, and Russell 2000 Growth |
• | Non-U.S. Equities: MSCI EAFE IL |
• | Fixed Income: Barclay's Capital Intermediate Government/Credit Index |
• | Cash: U.S. 3-Month Treasury Bill |
8. | COMMITMENTS AND CONTINGENCIES |
(Dollars in thousands) | Commercial letters of credit | Other commercial loan commitments | Total commitments | ||||||||
Less than one year | $ | 435 | $ | 17,290 | $ | 17,725 | |||||
One to three years | — | 701 | 701 | ||||||||
Three to five years | 71 | 4,859 | 4,930 | ||||||||
More than five years | — | 2,150 | 2,150 | ||||||||
Total | $ | 506 | $ | 25,000 | $ | 25,506 |
9. | FAIR VALUE MEASUREMENT |
(Dollars in thousands) | |||||||||||||||
Description | September 30, 2012 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||
Recurring: | |||||||||||||||
US Agencies | $ | 1,370 | $ | — | $ | 1,370 | $ | — | |||||||
Government sponsored MBS | |||||||||||||||
Residential | 58,279 | — | 58,279 | — | |||||||||||
Non-Government sponsored MBS | |||||||||||||||
Residential | 101 | — | 101 | — | |||||||||||
Municipal securities | |||||||||||||||
North Carolina | 3,183 | — | 3,183 | — | |||||||||||
Mortgage Servicing Rights | 41 | — | — | 41 | |||||||||||
Total | $ | 62,974 | $ | — | $ | 62,933 | $ | 41 |
(Dollars in thousands) | |||||||||||||||
Description | December 31, 2011 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||
Recurring: | |||||||||||||||
US Agencies | $ | 483 | $ | — | $ | 483 | $ | — | |||||||
Government sponsored MBS | |||||||||||||||
Residential | 30,789 | — | 30,789 | — | |||||||||||
Non-Government sponsored MBS | |||||||||||||||
Residential | 135 | — | 135 | — | |||||||||||
Municipal securities | |||||||||||||||
North Carolina | 3,702 | — | 3,702 | — | |||||||||||
Out of state | 2,486 | — | 2,486 | — | |||||||||||
Mortgage Servicing Rights | 46 | — | — | 46 | |||||||||||
$ | 37,641 | $ | — | $ | 37,595 | $ | 46 |
(Dollars in thousands) | Mortgage Servicing Rights | ||
Beginning balance (December 31, 2011) | $ | 46 | |
Amortization | (3 | ) | |
Ending Balance (June 30, 2012) | $ | 43 | |
Amortization | (2 | ) | |
Ending Balance (September 30, 2012) | $ | 41 |
(Dollars in thousands) | |||||||||||||||
Description | September 30, 2012 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||
Nonrecurring: | |||||||||||||||
Other real estate owned | $ | 3,072 | $ | — | $ | — | $ | 3,072 | |||||||
Impaired and TDR Loans: | |||||||||||||||
Commercial | 590 | — | — | 590 | |||||||||||
Commercial real estate | 8,821 | — | — | 8,821 | |||||||||||
Faith-based non-profit | 13,505 | — | — | 13,505 | |||||||||||
Residential real estate | 1,844 | — | — | 1,844 | |||||||||||
Total | $ | 27,832 | $ | — | $ | — | $ | 27,832 | |||||||
Description | December 31, 2011 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||
Nonrecurring: | |||||||||||||||
Other real estate owned | $ | 3,215 | $ | — | $ | — | $ | 3,215 | |||||||
Impaired and TDR Loans: | |||||||||||||||
Commercial | 590 | — | — | 590 | |||||||||||
Commercial real estate | 6,709 | — | — | 6,709 | |||||||||||
Faith-based non-profit | 13,760 | — | — | 13,760 | |||||||||||
Residential real estate | 1,637 | — | — | 1,637 | |||||||||||
Total | $ | 25,911 | $ | — | $ | — | $ | 25,911 |
Description | September 30, 2012 | Valuation Technique | Significant Unobservable Inputs | Significant Unobservable Input Value | ||||||
Nonrecurring: | ||||||||||
Other real estate owned | $ | 3,072 | discounted appraisals | collateral discounts | 6 | -20% | ||||
Impaired and TDR loans | 24,760 | discounted appraisals | collateral discounts | 6 | -20% | |||||
Mortgage Servicing Rights | 41 | discounted cash flow | Public Securities Association ("PSA") speed | 374 | % | |||||
cost to service | 5.50 | % | ||||||||
investor yield | 9.00 | % | ||||||||
Total | $ | 27,873 | ||||||||
Description | December 31, 2011 | Valuation Technique | Significant Unobservable Inputs | Significant Unobservable Input Value | ||||||
Nonrecurring: | ||||||||||
Other real estate owned | $ | 3,215 | discounted appraisals | collateral discounts | 6 | -20% | ||||
Impaired and TDR loans | 22,696 | discounted appraisals | collateral discounts | 6 | -20% | |||||
Mortgage Servicing Rights | 46 | discounted cash flow | PSA speed | 306 | % | |||||
cost to service | 5.50 | % | ||||||||
investor yield | 9.00 | % | ||||||||
Total | $ | 25,957 |
(Dollars in thousands) | September 30, 2012 | ||||||||||||||||||
Carrying Amount | Estimated Fair Value | Level 1 | Level 2 | Level 3 | |||||||||||||||
Assets: | |||||||||||||||||||
Cash and cash equivalents | $ | 51,516 | $ | 51,516 | $ | 51,516 | $ | — | $ | — | |||||||||
Marketable securities | 62,933 | 62,933 | — | 62,933 | — | ||||||||||||||
Loans, net of allowances for loan losses | 175,443 | 177,389 | — | — | 177,389 | ||||||||||||||
Accrued interest receivable | 850 | 850 | 850 | — | — | ||||||||||||||
Liabilities: | |||||||||||||||||||
Non-maturity deposits | $ | 123,304 | $ | 123,304 | $ | 123,304 | $ | — | $ | — | |||||||||
Maturity deposits | 138,068 | 137,853 | — | 137,853 | — | ||||||||||||||
Other borrowings | 2,987 | 2,879 | — | — | 2,879 | ||||||||||||||
Accrued interest payable | 81 | 81 | 81 | — | — | ||||||||||||||
December 31, 2011 | |||||||||||||||||||
Assets: | Carrying Amount | Estimated Fair Value | Level 1 | Level 2 | Level 3 | ||||||||||||||
Cash and cash equivalents | $ | 61,296 | $ | 61,296 | $ | 61,296 | $ | — | $ | — | |||||||||
Marketable securities | 37,595 | 37,595 | — | 37,595 | — | ||||||||||||||
Loans, net of allowances for loan losses | 184,234 | 188,545 | — | — | 188,545 | ||||||||||||||
Accrued interest receivable | 764 | 764 | 764 | — | — | ||||||||||||||
Liabilities: | |||||||||||||||||||
Non-maturity deposits | $ | 123,488 | $ | 123,488 | $ | 123,488 | $ | — | $ | — | |||||||||
Maturity deposits | 135,656 | 135,348 | — | 135,348 | — | ||||||||||||||
Other borrowings | 2,939 | 2,676 | — | — | 2,676 | ||||||||||||||
Accrued interest payable | 196 | 196 | 196 | — | — |
Item 2 - | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Selected Balance Sheet Data | |||||||
(Dollars in thousands) | September 30, 2012 | December 31, 2011 | |||||
Cash and due from banks | $ | 51,516 | $ | 61,296 | |||
Securities | 62,933 | 37,595 | |||||
Gross loans | 178,941 | 188,084 | |||||
Allowance for loan losses | (3,498 | ) | (3,850 | ) | |||
Total assets | 310,609 | 304,456 | |||||
Deposits | 261,372 | 259,144 | |||||
Borrowings | 2,987 | 2,939 | |||||
Stockholders' equity | 36,892 | 36,397 |
Summary of Operations | For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||
(Dollars in thousands) | 2012 | 2011 | 2012 | 2011 | |||||||||||
Interest income | $ | 3,048 | $ | 3,078 | $ | 8,790 | $ | 9,316 | |||||||
Interest expense | 234 | 367 | 741 | 1,172 | |||||||||||
Net interest income | 2,814 | 2,711 | 8,049 | 8,144 | |||||||||||
Provision for loan losses | 122 | 264 | 166 | 437 | |||||||||||
Net interest income after provision for loan losses | 2,692 | 2,447 | 7,883 | 7,707 | |||||||||||
Other operating income | 578 | 593 | 1,667 | 1,862 | |||||||||||
Other operating expense | 2,990 | 2,880 | 8,834 | 8,766 | |||||||||||
Pre-tax net income | 280 | 160 | 716 | 803 | |||||||||||
Income tax expense | 87 | 24 | 196 | 205 | |||||||||||
Less: Preferred dividends and accretion | 59 | 59 | 179 | 176 | |||||||||||
Net income (1) | $ | 134 | $ | 77 | $ | 342 | $ | 422 |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Per Share Data (1) | |||||||||||||||
Net income-basic and diluted | $ | 0.07 | $ | 0.04 | $ | 0.17 | $ | 0.21 | |||||||
Common stock dividends | $ | — | $ | — | $ | — | $ | — | |||||||
Book value per share of common stock (2) | $ | 12.38 | $ | 12.62 | $ | 12.38 | $ | 12.62 | |||||||
Average common shares outstanding | 2,031,337 | 2,031,337 | 2,031,337 | 2,031,337 | |||||||||||
Selected Ratios (1) | |||||||||||||||
Return on average assets | 0.18 | % | 0.10 | % | 0.15 | % | 0.18 | % | |||||||
Return on average stockholders' equity | 1.46 | 0.83 | 1.25 | 1.52 | |||||||||||
Dividend payout ratio | — | — | — | — | |||||||||||
Average stockholders' equity to average total assets | 12.35 | 12.26 | 12.23 | 12.11 | |||||||||||
Net interest margin (3) | 4.10 | % | 3.76 | % | 3.87 | % | 3.81 | % |
• | Net income before preferred stock dividends was $193 thousand for the three months ended September 30, 2012 and $136 thousand for the three months ended September 30, 2011. For the three months ended September 30, 2012, net income available to common stockholders was $134 thousand, or $0.07 per common share. For the three months ended September 30, 2011, net income available to common stockholders was $77 thousand, or $0.04 per common share. |
• | Interest income on loans decreased by $8 thousand for the three months ended September 30, 2012 compared to the three months ended September 30, 2011, while interest income on investments and cash decreased $22 thousand resulting in total interest income being lower by $30 thousand in the three months ended September 30, 2012 compared to the three months ended September 30, 2011. Average loans outstanding for the three months ended September 30, 2012 decreased $17.6 million from the September 30, 2011 level of $199.0 million, and the rate for average loan interest earned increased 53 basis points ("bps") compared to September 30, 2011. The three months ended September 30, 2012 benefited from interest income from a significant loan relationship that was returned to accrual status in June 2012, partially offsetting the loss of interest income caused by the decrease in average loans outstanding. |
• | Interest expense on deposits decreased $114 thousand and interest expense on borrowings decreased $19 thousand, resulting in total interest expense being $133.0 thousand less in the three months ended September 30, 2012 compared to the three months ended September 30, 2011. Average interest-bearing deposits outstanding decreased $22.7 million during the three months ended September 30, 2012 from the September 30, 2011 level of $220.4 million; and the average cost of those deposits decreased 16 bps in the three months ended September 30, 2012 compared to the same period ending September 30, 2011. Average borrowings in the three months ended September 30, 2012 decreased slightly compared to the September 30, 2011 balance, and the average rate paid on borrowings decreased to 0.92%. |
• | Due to the above factors, net interest income increased $103 thousand, or 3.80% in the three months ended September 30, 2012 compared to the three months ended September 30, 2011. The net interest margin, on a tax equivalent (“TE”) basis for the three months ended September 30, 2012 was 4.10% compared to 3.76% for the three months ended September 30, 2011, an increase of 34bps. |
• | The ending balance of the Allowance for Loan Losses ("ALLL") as a percentage of loans outstanding decreased in the three months ended September 30, 2012 to 1.95% compared to 2.05% as of December 31, 2011. The provision for loan losses decreased by $142 thousand in the three months ended September 30, 2012 compared from $264 thousand for the three months ended September 30, 2011 to $122 thousand for the three months ended September 30, 2012. Net loans outstanding as of September 30, 2011 totaled $194.8 million million, decreasing 15.9 million to the balance as of September 30, 2012. The quantitative loss history decreased from 62 basis points as of September 30, 2011 to 46 basis points as of September 30, 2012. The combination of the decrease in loans outstanding and the loss history were the main contributors to the decrease in the coverage of allowance to loans. |
• | Noninterest income was relatively flat in the quarter ended September 30, 2012 compared to the same period in 2011. |
• | Noninterest expense increased $110 thousand in the three months ended September 30, 2012 over the same period in 2011. Increases in salaries and employees benefits, marketing, directors' fees, and information technology, and miscellaneous expenses were partially offset by declines in professional fees, and Federal Deposit Insurance Corporation ("FDIC") deposit insurance expenses. |
• | Preferred stock dividends in the quarters ended September 30, 2012 and September 30, 2011 were $59 thousand. |
• | Net income before preferred stock dividends was $520 thousand for the nine months ended September 30, 2012 and $598 thousand for the nine months ended September 30, 2011. For the nine months ended September 30, 2012, net income available to common stockholders was $342 thousand, or $0.17 per common share. For the nine months ended September 30, 2011, net income available to common stockholders was $422 thousand, or $0.21 per common share. |
• | Interest income on loans decreased by $555 thousand or 6.51% while interest income on investments and cash increased$29 thousand resulting in total interest income declining $526 thousand in the nine months ended September 30, 2012 compared to the nine months ended September 30, 2011. Average loans outstanding for the nine months ended September 30, 2012 decreased $18.5 million from the September 30, 2011 level, and the rate for average loan interest increased 17 bps compared to the nine months ended September 30, 2011. The rate for the nine months ended September 30, 2012 benefited from interest income from a significant loan relationship that was returned to accrual status in June 2012. |
• | Interest expense on deposits decreased $407 thousand and interest expense on borrowings decreased $24 thousand, resulting in total interest expense being $24 thousand less in the nine months ended September 30, 2012 compared to the nine months ended September 30, 2011. Average interest-bearing deposits outstanding decreased $17.3 million during the nine months ended September 30, 2012 from September 30, 2011; and the average cost of those deposits decreased |
• | Net interest income, due to the above factors, decreased $95 thousand in the nine months ended September 30, 2012 compared to the nine months ended September 30, 2011. The net interest margin, on a TE basis for the nine months ended September 30, 2012 was 3.87% compared to 3.81% for the nine months ended September 30, 2011, a increase of 6 bps. |
• | The ending balance of the ALLL as a percentage of loans outstanding decreased to 1.95% as of September 30, 2012 compared to 2.05% as of December 31, 2011. The $15.9 million decrease in loans outstanding compared to September 30, 2011, and net charge offs of $518 thousand during the nine months ended September 30, 2012 compared to net charge offs of $245 thousand in the nine months ended September 30, 2011, caused the Company to record a loan loss provision of $166 thousand for the nine months ended September 30, 2012, and $437.0 thousand for the nine months ended September 30, 2011 based on management's estimate of inherent losses in the loan portfolio. |
• | Noninterest income decreased by $195 thousand in the nine months ended September 30, 2012 over the same period in 2011, mainly due to net realized losses on the sales of Other real estate owned ("OREO") in nine months ended September 30, 2012 compared to net realized gains in the nine months ended September 30, 2011 resulting in a net decrease of $204 thousand. Decreases in service charge fees of $55 thousand and the decline in OREO was partially offset with an increase in the realized gains from available for sale securities of $150 thousand in the nine months ended September 30, 2012 over the same period in 2011. |
• | Noninterest expense increased by $68 thousand in the nine months ended September 30, 2012 over the same period in 2011. Increases in salaries and employees benefits and information technology expense were partially offset by declines in marketing, professional fees, and delivery expenses. |
• | Preferred stock dividends in the nine months ended September 30, 2012 and September 30, 2011 were $0.2 million. |
• | Allowance for Loan Losses – The Company records an estimated ALLL based on known problem loans and estimated risks inherent within the existing loan portfolio. The allowance calculation takes into account historical loss trends and current market and economic conditions. If economic conditions were to decline significantly or the financial condition of the Company’s customers were to deteriorate further, resulting in an impairment of their ability to make payments, additional increases to the allowance may be required. |
• | Investments – The Company records an investment impairment charge when it believes an investment has experienced a decline in value that is other-than-temporary. Future adverse changes in market conditions and associated market values of investments could result in losses or an inability to recover the carrying value of the investments that may not be reflected in an investment’s current carrying value, thereby possibly requiring an impairment charge in the future. |
• | Deferred Taxes – The Company assesses the need to record a valuation allowance to reduce its deferred tax assets to the amount that is more likely than not to be realized. The Company considers anticipated future taxable income and ongoing |
• | Foreclosed Assets– Foreclosed assets (also known as "Other real estate owned", or "OREO") represent properties acquired through foreclosure or physical possession. Write-downs to fair value of foreclosed assets at the time of transfer are charged to allowance for loan losses. Subsequent to foreclosure, the Company periodically evaluates the value of foreclosed assets held for sale and records an impairment charge for any subsequent declines in fair value less selling costs. Subsequent declines in value are charged to operations. Fair value is based on an assessment of information available at the end of a reporting period and depends upon a number of factors, including historical experience, economic conditions, and issues specific to individual properties. The evaluation of these factors involves subjective estimates and judgments that may change. |
• | Fair Value Estimates– Fair value is the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for an asset or liability in an orderly transaction between market participants at the measurement date. The degree of management judgment involved in determining the fair value of a financial instrument is dependent upon the availability of quoted market prices or observable market inputs. For financial instruments that are traded actively and have quoted market prices or observable market inputs, there is minimal subjectivity involved in measuring fair value. However, when quoted market prices or observable market inputs are not fully available, significant management judgment may be necessary to estimate fair value. In developing our fair value measurements, we maximize the use of observable inputs and minimize the use of unobservable inputs. |
• | The fair value hierarchy defines Level 1 and 2 valuations as those that are based on quoted prices for identical instruments traded in active markets and quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market. Level 3 valuations are based on model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that we believe market participants would use in pricing the asset or liability. Financial assets that are recorded at fair value on a recurring basis include available-for-sale investment securities, and mortgage servicing rights. |
• | Net income before preferred stock dividends was $193 thousand and $136 thousand for the three months ended September 30, 2012 and September 30, 2011, respectively. Net income available to common stockholders for the three months ended September 30, 2012 was $134 thousand or $0.07 per share. Net income available to common stockholders for the three months ended September 30, 2011 was $77 thousand or $0.04 per share. |
• | Net operating income before income taxes and preferred dividends for the three months ended September 30, 2012 and September 30, 2011 was $280 thousand and $160 thousand, respectively. |
◦ | Net interest margin on a TE basis increased from 3.76% for the three months ended September 30, 2011 to 4.10% for the three months ended September 30, 2012 due to: |
▪ | Average loans outstanding decreased $17.6 million in 2012 over 2011, while yields on average loans increased from 5.59% for the three months ending September 30, 2011 to 6.12% for the three months ending September 30, 2012, resulting in $8 thousand lower interest income from loans. Income from loans decreased mainly due to the decrease in average loans outstanding offset by the increase in average yields. The three months ended September 30, 2012 benefited from interest income from a significant loan relationship that was returned to accrual status in June 2012, making up for the loss of interest income from the decrease in average loans outstanding. |
▪ | Average interest bearing deposits outstanding decreased $22.7 million in 2012 over 2011. The decrease in average deposits led to a decline in interest expense of $114 thousand in the three months ended September 30, 2012 compared to the same period in 2011 due to a the lower average deposits and the reduction in our average yield on deposits. |
▪ | Average borrowings outstanding decreased $34.0 thousand from the 2011 to the 2012 average balance, and the average rate paid on borrowings decreased from 3.37% to 0.92%. |
◦ | Noninterest income was relatively flat when comparing 2012 and 2011. |
◦ | Noninterest expense increased in 2012 by $110 thousand. Increases in salaries and employees benefits, marketing, board fees, and information technology expense were partially offset by declines in professional fees, and FDIC deposit insurance expenses. |
◦ | The above increase in the net interest income was offset by a decrease in the loan loss provision from $264 thousand to $122 thousand for the three months ended September 30, 2011, and September 30, 2012, respectively. |
Average Balances, Interest Earned or Paid, and Interest Yields/Rates For the Three Months Ended September 30, 2012 and 2011 | ||||||||||||||||||||||
(Dollars in thousands) | 2.012 | 2.011 | ||||||||||||||||||||
Average Balance | Amount Earned/Paid | Average Rate | Average Balance | Amount Earned/Paid | Average Rate | |||||||||||||||||
Assets | ||||||||||||||||||||||
Loans receivable (1): | $ | 181,376 | $ | 2,775 | 6.12 | % | $ | 199,006 | $ | 2,783 | 5.59 | % | ||||||||||
Taxable securities | 58,616 | 229 | 1.56 | 21,306 | 186 | 3.49 | ||||||||||||||||
Nontaxable securities(2) | 2,362 | 23 | 3.90 | 6,584 | 73 | 4.43 | ||||||||||||||||
Federal funds sold and other interest on short-term investments | 33,636 | 21 | 0.25 | 66,263 | 36 | 0.22 | ||||||||||||||||
Total interest earning assets | 275,990 | 3,048 | 4.44 | % | 293,159 | 3,078 | 4.26 | % | ||||||||||||||
Cash and due from banks | 3,518 | 2,133 | ||||||||||||||||||||
Other assets | 20,854 | 19,340 | ||||||||||||||||||||
Allowance for loan losses | (3,728 | ) | (3,847 | ) | ||||||||||||||||||
Total assets | $ | 296,634 | $ | 310,785 | ||||||||||||||||||
Liabilities and Equity | ||||||||||||||||||||||
Savings deposits | $ | 51,322 | $ | 26 | 0.20 | % | $ | 61,136 | $ | 45 | 0.29 | % | ||||||||||
Interest-bearing demand deposits | 22,572 | 7 | 0.12 | 24,534 | 14 | 0.23 | ||||||||||||||||
Time deposits | 123,785 | 194 | 0.63 | 134,716 | 282 | 0.84 | ||||||||||||||||
Total interest-bearing deposits | 197,679 | 227 | 0.46 | 220,386 | 341 | 0.62 | ||||||||||||||||
Borrowed funds | 3,048 | 7 | 0.92 | 3,082 | 26 | 3.37 | ||||||||||||||||
Total interest-bearing liabilities | 200,727 | 234 | 0.47 | % | 223,468 | 367 | 0.66 | % | ||||||||||||||
Non-interest-bearing deposits | 53,155 | 44,730 | ||||||||||||||||||||
Other liabilities | 6,103 | 5,549 | ||||||||||||||||||||
Total liabilities | 259,985 | 273,747 | ||||||||||||||||||||
Stockholders' equity | 36,649 | 37,038 | ||||||||||||||||||||
Total liabilities and stockholders' equity | $ | 296,634 | $ | 310,785 | ||||||||||||||||||
Net interest income | $ | 2,814 | $ | 2,711 | ||||||||||||||||||
Non-taxable securities | 23 | 73 | ||||||||||||||||||||
Tax equivalent adjustment (3) | 14 | 46 | ||||||||||||||||||||
Tax equivalent net interest income | $ | 2,828 | $ | 2,757 | ||||||||||||||||||
Net interest spread (4) | 3.97 | % | 3.60 | % | ||||||||||||||||||
Net interest margin (5) | 4.10 | % | 3.76 | % |
• | Net income before preferred stock dividends was $520 thousand and $598 thousand for the nine months ended September 30, 2012 and September 30, 2011, respectively. Net income available to common stockholders for the nine months ended September 30, 2012 was $342 thousand or $0.17 per share. Net income available to common stockholders for the nine months ended September 30, 2011 was $422 thousand or $0.21 per share. |
• | Net operating income before income taxes and preferred dividends for the nine months ended September 30, 2012 and September 30, 2011 was $716 thousand and $803 thousand, respectively |
◦ | Net interest margin on a TE basis increased from 3.81% for the nine months ended September 30, 2011 to 3.87%% for the nine months ended September 30, 2012 due to: |
▪ | Average loans outstanding decreased $18.5 million in 2012 from the the same period in 2011 and average yields increased from 5.68% for the nine months ended September 30, 2011 to 5.85% for the nine months ended September 30, 2012, resulting in $555 thousand less interest income from loans. Interest income from loans decreased mainly due to the decrease in average loans outstanding. |
▪ | Average interest bearing deposits outstanding decreased $17.3 million in 2012 from 2011. Due to the decrease in average deposits, interest expense declined by $407 thousand in the nine months ended September 30, 2012 compared to the same period in 2011 due to a reduction in our average yield on deposits. |
▪ | Average borrowings outstanding increased $248.0 thousand from the 2011 average balance, and the average rate paid on borrowings decreased from 3.49% in 2011 to 2.10% in 2012. The cause of the borrowing rate decrease was mainly due to a decline in the effective yield on participations sold (that do not qualify for "sale" treatment under GAAP). |
◦ | Noninterest income decreased $195 thousand in 2012 from 2011, mainly due to net realized losses on the sale of OREO in the nine months ended September 30, 2012 compared to net realized gains in the nine months ended September 30, 2011. The decline in OREO realized gains along with declines in service charge fees was partially offset with an increase in the realized gains in available for sale securities and rental income for the nine months ended September 30, 2012 over the same period in 2011. |
◦ | Noninterest expense increased in 2012 by $68 thousand. An increase in salaries and employee benefits was partially offset by declines in FDIC deposit insurance expense, and professional fees. |
◦ | The loan loss provision decreased to $166 thousand for the nine months ended September 30, 2012 from $437 thousand for the nine months ended September 30, 2011, mainly due to total loans outstanding decreasing from $196.6 million as of September 30, 2011 to $178.9 million as of September 30, 2012. In addition, the quantitative loss history for the eight quarters ended September 30, 2012 decreased to 46 bps from 62 bps as of September 30, 2011, resulting in a lower provision for loans collectively evaluated under ASC 450. |
Average Balances, Interest Earned or Paid, and Interest Yields/Rates For the Nine Months Ended September 30, 2012 and 2011 | ||||||||||||||||||||||
(Dollars in thousands) | 2012 | 2011 | ||||||||||||||||||||
Average Balance | Amount Earned/Paid | Average Rate | Average Balance | Amount Earned/Paid | Average Rate | |||||||||||||||||
Assets | ||||||||||||||||||||||
Loans receivable (1): | $ | 181,493 | $ | 7,969 | 5.85 | % | $ | 199,964 | $ | 8,524 | 5.68 | % | ||||||||||
Taxable securities | 45,318 | 636 | 1.87 | 18,032 | 472 | 3.49 | ||||||||||||||||
Nontaxable securities (2) | 3,081 | 91 | 3.94 | 6,461 | 204 | 4.21 | ||||||||||||||||
Federal funds sold and other interest on short-term investments | 49,415 | 94 | 0.25 | 65,287 | 116 | 0.24 | ||||||||||||||||
Total interest earning assets | 279,307 | 8,790 | 4.20 | % | 289,744 | 9,316 | 6.52 | % | ||||||||||||||
Cash and due from banks | 2,545 | 2,217 | ||||||||||||||||||||
Other assets | 20,739 | 19,246 | ||||||||||||||||||||
Allowance for loan losses | (3,793 | ) | (3,864 | ) | ||||||||||||||||||
Total assets | $ | 298,798 | $ | 307,343 | ||||||||||||||||||
Liabilities and Equity | ||||||||||||||||||||||
Savings deposits | $ | 54,104 | $ | 86 | 0.21 | % | $ | 61,598 | $ | 146 | 0.32 | % | ||||||||||
Interest-bearing demand deposits | 23,881 | 24 | 0.13 | 25,138 | 47 | 0.25 | ||||||||||||||||
Time deposits | 122,935 | 585 | 0.63 | 131,513 | 909 | 0.92 | ||||||||||||||||
Total interest-bearing deposits | 200,920 | 695 | 0.46 | 218,249 | 1,102 | 0.67 | ||||||||||||||||
Borrowed funds | 2,921 | 46 | 2.10 | 2,673 | 70 | 3.49 | ||||||||||||||||
Total interest-bearing liabilities | 203,841 | 741 | 0.48 | % | 220,922 | 1,172 | 0.71 | % | ||||||||||||||
Non-interest-bearing deposits | 52,730 | 44,108 | ||||||||||||||||||||
Other liabilities | 5,681 | 5,556 | ||||||||||||||||||||
Total liabilities | 262,252 | 270,586 | ||||||||||||||||||||
Stockholders' equity | 36,546 | 36,757 | ||||||||||||||||||||
Total liabilities and stockholders' equity | $ | 298,798 | $ | 307,343 | ||||||||||||||||||
Net interest income | $ | 8,049 | $ | 8,144 | ||||||||||||||||||
Non-taxable securities | 91 | 204 | ||||||||||||||||||||
Tax equivalent adjustment (3) | 57 | 128 | ||||||||||||||||||||
Tax equivalent net interest income | $ | 8,106 | $ | 8,272 | ||||||||||||||||||
Net interest spread (4) | 3.72 | % | 5.81 | % | ||||||||||||||||||
Net interest margin (5) | 3.87 | % | 3.81 | % |
• | Changes in lending policies and procedures, including underwriting standards and collection, charge-off, and recovery practices; |
• | Changes in national economic and business conditions and developments and the effect of unemployment on African Americans, who are the majority of our customers; |
• | Changes in the nature and volume of the loan portfolio; |
• | Changes in the experience, ability, and depth of lending management and staff; |
• | Changes in trends of the volume and severity of past due and classified loans; and changes in trends in the volume of non-accrual loans, troubled debt restructurings and classified loans; |
• | Changes in the quality of the loan review system and the degree of oversight by the Bank's Board of Directors; |
• | The existence and effect of any concentrations of credit, and changes in the level of such concentrations; and |
• | The effect of external factors such as competition and legal and regulatory requirements. |
(Dollars in thousands) | September 30, 2012 | December 31, 2011 | |||||
Commercial | $ | 5,540 | $ | 7,688 | |||
Commercial real estate: | |||||||
Construction | 1,726 | 1,871 | |||||
Owner occupied | 20,051 | 20,352 | |||||
Other | 26,628 | 24,831 | |||||
Faith-based non-profit: | |||||||
Construction | 1,910 | 2,287 | |||||
Owner occupied | 77,137 | 78,161 | |||||
Other | 6,861 | 8,703 | |||||
Residential real estate: | |||||||
First mortgage | 25,120 | 27,896 | |||||
Multifamily | 5,904 | 7,207 | |||||
Home equity | 3,420 | 4,457 | |||||
Construction | 381 | — | |||||
Consumer | 1,455 | 1,667 | |||||
Other loans | 2,808 | 2,964 | |||||
Loans, net of deferred fees | 178,941 | 188,084 | |||||
Allowance for loan losses | (3,498 | ) | (3,850 | ) | |||
Loans, net of allowance for losses | $ | 175,443 | $ | 184,234 |
For the Three Months Ended | |||||||||||||||||||
September 30, 2012 | |||||||||||||||||||
(Dollars in thousands) | June 30, 2012 | Charge-offs | Recoveries | Provision/ (Recovery) | September 30, 2012 | ||||||||||||||
Commercial | $ | 61 | $ | — | $ | — | $ | (36 | ) | $ | 25 | ||||||||
Commercial real estate | 1,187 | — | — | (18 | ) | 1,169 | |||||||||||||
Faith-based non-profit | 1,091 | — | — | (60 | ) | 1,031 | |||||||||||||
Residential real estate | 1,243 | (303 | ) | 4 | 230 | 1,174 | |||||||||||||
Consumer | 46 | — | 4 | 2 | 52 | ||||||||||||||
Other | 51 | (8 | ) | — | 4 | 47 | |||||||||||||
Unallocated | — | — | |||||||||||||||||
Total | $ | 3,679 | $ | (311 | ) | $ | 8 | $ | 122 | $ | 3,498 | ||||||||
For the Nine Months Ended | |||||||||||||||||||
September 30, 2012 | |||||||||||||||||||
December 31, 2011 | Charge-offs | Recoveries | Provision/ (Recovery) | September 30, 2012 | |||||||||||||||
Commercial | $ | 348 | $ | (323 | ) | $ | 25 | ||||||||||||
Commercial real estate | 971 | (56 | ) | 1 | 253 | 1,169 | |||||||||||||
Faith-based non-profit | 1,128 | (97 | ) | 1,031 | |||||||||||||||
Residential real estate | 1,299 | (539 | ) | 93 | 321 | 1,174 | |||||||||||||
Consumer | 62 | (1 | ) | 1 | (10 | ) | 52 | ||||||||||||
Other | 42 | (26 | ) | 9 | 22 | 47 | |||||||||||||
Unallocated | — | — | — | ||||||||||||||||
Total | $ | 3,850 | $ | (622 | ) | $ | 104 | $ | 166 | $ | 3,498 | ||||||||
For the Three Months Ended | |||||||||||||||||||
September 30, 2011 | |||||||||||||||||||
(Dollars in thousands) | June 30, 2011 | Charge-offs | Recoveries | Provision/ (Recovery) | September 30, 2011 | ||||||||||||||
Commercial | 582 | (14 | ) | — | (10 | ) | 558 | ||||||||||||
Commercial real estate | 840 | (19 | ) | 3 | 27 | 851 | |||||||||||||
Faith-based non-profit | 1,220 | — | — | 13 | 1,233 | ||||||||||||||
Residential real estate | 1,457 | (181 | ) | — | 242 | 1,518 | |||||||||||||
Consumer | 43 | (8 | ) | — | 26 | 61 | |||||||||||||
Other | 103 | (6 | ) | 2 | (34 | ) | 65 | ||||||||||||
Total | $ | 4,245 | $ | (228 | ) | $ | 5 | $ | 264 | $ | 4,286 | ||||||||
For the Nine Months Ended | |||||||||||||||||||
September 30, 2011 | |||||||||||||||||||
December 31, 2010 | Charge-offs | Recoveries | Provision/ (Recovery) | September 30, 2011 | |||||||||||||||
Commercial | $ | 651 | $ | (14 | ) | $ | 95 | $ | (174 | ) | $ | 558 | |||||||
Commercial real estate | 651 | (19 | ) | 129 | 90 | 851 | |||||||||||||
Faith-based non-profit | 1,289 | — | — | (56 | ) | 1,233 | |||||||||||||
Residential real estate | 1,045 | (181 | ) | 2 | 652 | 1,518 | |||||||||||||
Consumer | 105 | (8 | ) | 6 | (42 | ) | 61 | ||||||||||||
Other | 110 | (23 | ) | 11 | (33 | ) | 65 | ||||||||||||
Total | $ | 3,851 | $ | (245 | ) | $ | 243 | $ | 437 | $ | 4,286 |
Allowance for loan losses: | Individually evaluated for impairment | Collectively evaluated for impairment | Outstanding as of September 30, 2012 | ||||||||
(Dollars in thousands) | |||||||||||
Commercial | $ | — | $ | 25 | $ | 25 | |||||
Commercial real estate | 313 | 856 | 1,169 | ||||||||
Faith-based non-profit | 52 | 979 | 1,031 | ||||||||
Residential real estate | 342 | 832 | 1,174 | ||||||||
Consumer | — | 52 | 52 | ||||||||
Other loans | — | 47 | 47 | ||||||||
Total | $ | 707 | $ | 2,791 | $ | 3,498 | |||||
Loans: | |||||||||||
(Dollars in thousands) | |||||||||||
Commercial | $ | 590 | $ | 4,950 | $ | 5,540 | |||||
Commercial real estate | 9,134 | 39,271 | 48,405 | ||||||||
Faith-based non-profit | 13,557 | 72,351 | 85,908 | ||||||||
Residential real estate | 2,186 | 32,639 | 34,825 | ||||||||
Consumer | — | 1,455 | 1,455 | ||||||||
Other loans | — | 2,808 | 2,808 | ||||||||
Total | $ | 25,467 | $ | 153,474 | $ | 178,941 |
September 30, 2012 | |||||||||||||||||||||||
(Dollars in thousands) | Unpaid Principal Balance | Total Exposure | Recorded Investment | Allowance for Loan Losses Allocated | Interest Earned Nine Months | Interest Earned Three Months | |||||||||||||||||
Without related allowance recorded: | |||||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||
Owner occupied | 42 | 42 | 42 | — | — | — | |||||||||||||||||
Other | 50 | 50 | 50 | — | — | — | |||||||||||||||||
Residential real estate: | |||||||||||||||||||||||
First mortgage | 398 | 398 | 398 | — | 6 | — | |||||||||||||||||
Total impaired loans without allowance recorded | $ | 490 | $ | 490 | $ | 490 | $ | — | $ | 6 | $ | — | |||||||||||
With an allowance recorded: | |||||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||
Other | 1,591 | 1,591 | 1,591 | 156 | 65 | — | |||||||||||||||||
Residential real estate: | |||||||||||||||||||||||
First mortgage | 1,218 | 1,218 | 1,218 | 337 | 40 | 11 | |||||||||||||||||
Total impaired loans with allowance recorded | $ | 2,809 | $ | 2,809 | $ | 2,809 | $ | 493 | $ | 105 | $ | 11 | |||||||||||
Total impaired loans | $ | 3,299 | $ | 3,299 | $ | 3,299 | $ | 493 | $ | 111 | $ | 11 |
December 31, 2011 | September 30, 2011 | ||||||||||||||||||
Unpaid Principal Balance | Recorded Investment | Allowance for Loan Losses Allocated | Interest Earned Nine Months | Interest Earned Three Months | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
With no related allowance recorded: | |||||||||||||||||||
Commercial real estate: | |||||||||||||||||||
Owner occupied | 322 | 322 | — | 17 | 17 | ||||||||||||||
Other | 56 | 56 | — | — | — | ||||||||||||||
Faith-based non-profit: | |||||||||||||||||||
Owner occupied | 2,522 | 2,522 | — | 61 | 61 | ||||||||||||||
Residential real estate: | |||||||||||||||||||
First mortgage | 402 | 314 | — | — | — | ||||||||||||||
Total impaired loans without allowance recorded | $ | 3,302 | $ | 3,214 | $ | — | $ | 78 | $ | 78 | |||||||||
With an allowance recorded: | |||||||||||||||||||
Commercial real estate: | |||||||||||||||||||
Owner occupied | 279 | 279 | 47 | — | — | ||||||||||||||
Other | 40 | 40 | 10 | — | — | ||||||||||||||
Residential real estate: | |||||||||||||||||||
First mortgage | 763 | 762 | 290 | 26 | 9 | ||||||||||||||
Home equity | 462 | 462 | 251 | — | — | ||||||||||||||
Consumer | 2 | 2 | 2 | — | — | ||||||||||||||
Total impaired loans with allowance recorded | $ | 1,546 | $ | 1,545 | $ | 600 | $ | 26 | $ | 9 | |||||||||
Total impaired loans | $ | 4,848 | $ | 4,759 | $ | 600 | $ | 104 | $ | 87 |
(Dollars in thousands) | For the Nine Months Ended | For the Three Months Ended | For the Nine Months Ended | For the Three Months Ended | |||||||||||
Average of impaired loans during the periods ended | September 30, 2012 | September 30, 2011 | |||||||||||||
Commercial | $ | — | $ | — | $ | 15 | $ | 15 | |||||||
Commercial real estate: | |||||||||||||||
Owner occupied | 296 | 44 | 1,051 | 1,042 | |||||||||||
Other | 874 | 1,653 | 109 | 117 | |||||||||||
Faith-based non-profit: | |||||||||||||||
Owner occupied | 2,522 | 2,522 | 5,948 | 6,057 | |||||||||||
Other | 48 | — | |||||||||||||
Residential real estate: | |||||||||||||||
First mortgage | 1,202 | 1,222 | 799 | 1,071 | |||||||||||
Multifamily | 547 | 629 | |||||||||||||
Home equity | 274 | 267 | 190 | 278 | |||||||||||
Consumer | 2 | 5 | 5 | ||||||||||||
Average impaired loans | $ | 5,170 | $ | 5,708 | $ | 8,712 | $ | 9,214 |
September 30, 2012 | |||||||||||||||||||||||||||
(Dollars in thousands) | Impaired Balance | Liquid Collateral | Total Exposure | Recorded Investment | Allowance for Loan Losses Allocated | Interest Earned Nine Months | Interest Earned Three Months | ||||||||||||||||||||
Without related allowance recorded: | |||||||||||||||||||||||||||
Commercial | $ | 1,567 | $ | — | $ | 1,567 | $ | 590 | $ | — | $ | — | $ | — | |||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||
Construction | 374 | — | 374 | 374 | — | 24 | 7 | ||||||||||||||||||||
Owner occupied | 509 | — | 509 | 509 | — | 28 | 6 | ||||||||||||||||||||
Other | 4,912 | — | 4,912 | 5,914 | — | 143 | 58 | ||||||||||||||||||||
Faith-based non-profit: | |||||||||||||||||||||||||||
Owner occupied | 13,133 | 103 | 13,030 | 13,126 | — | 331 | 69 | ||||||||||||||||||||
Residential real estate: | |||||||||||||||||||||||||||
First mortgage | 491 | — | 491 | 491 | — | 12 | 4 | ||||||||||||||||||||
Total TDRs without allowance recorded | $ | 20,986 | $ | 103 | $ | 20,883 | $ | 21,004 | $ | — | $ | 538 | $ | 144 | |||||||||||||
With an allowance recorded: | |||||||||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||
Owner occupied | $ | 239 | $ | — | $ | 239 | $ | 239 | $ | 102 | $ | 12 | $ | 3 | |||||||||||||
Other | 414 | — | 414 | 414 | 55 | 26 | 6 | ||||||||||||||||||||
Faith-based non-profit | |||||||||||||||||||||||||||
Owner occupied | 430 | — | 430 | 430 | 52 | 22 | 5 | ||||||||||||||||||||
Residential real estate: | |||||||||||||||||||||||||||
First mortgage | 80 | 6 | 74 | 80 | 5 | 4 | 1 | ||||||||||||||||||||
Total TDRs with allowance recorded | $ | 1,163 | $ | 6 | $ | 1,157 | $ | 1,163 | $ | 214 | $ | 64 | $ | 15 | |||||||||||||
Total TDRs | $ | 22,149 | $ | 109 | $ | 22,040 | $ | 22,167 | $ | 214 | $ | 602 | $ | 159 |
December 31, 2011 | September 30, 2011 | |||||||||||||||||||||||||||
Impaired Balance | Liquid Collateral | Total Exposure | Recorded Investment | Allowance for Loan Losses Allocated | Interest Earned Nine Months | Interest Earned Three Months | ||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||
With no related allowance recorded: | ||||||||||||||||||||||||||||
Commercial | $ | 1,567 | $ | — | $ | 1,567 | $ | 590 | $ | — | $ | — | — | |||||||||||||||
Commercial real estate: | ||||||||||||||||||||||||||||
Construction | 628 | — | 628 | 628 | — | — | — | |||||||||||||||||||||
Owner occupied | 893 | — | 893 | 895 | — | 20 | 16 | |||||||||||||||||||||
Other | 5,112 | — | 5,112 | 3,814 | — | 4 | — | |||||||||||||||||||||
Faith-based non-profit: | ||||||||||||||||||||||||||||
Owner occupied | 10,391 | (103 | ) | 10,288 | 10,385 | — | 297 | 110 | ||||||||||||||||||||
Residential real estate: | ||||||||||||||||||||||||||||
First mortgage | 617 | (9 | ) | 608 | 607 | — | 4 | 1 | ||||||||||||||||||||
Total TDRs with no allowance recorded | $ | 19,208 | $ | (112 | ) | $ | 19,096 | $ | 16,919 | $ | — | $ | 325 | $ | 127 | |||||||||||||
With an allowance recorded: | ||||||||||||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||||||||||
Construction | $ | 378 | $ | — | $ | 378 | $ | 378 | $ | 15 | $ | 24 | $ | 9 | ||||||||||||||
Owner occupied | 416 | — | 416 | 416 | 47 | — | — | — | ||||||||||||||||||||
Other | — | — | — | — | — | 19 | 3 | |||||||||||||||||||||
Faith-based non-profit: | ||||||||||||||||||||||||||||
Owner occupied | 908 | — | 908 | 909 | 56 | 33 | 15 | |||||||||||||||||||||
Residential real estate: | ||||||||||||||||||||||||||||
First mortgage | 35 | — | 35 | 35 | 2 | — | — | |||||||||||||||||||||
Total TDRs with allowance recorded | $ | 1,737 | $ | — | $ | 1,737 | $ | 1,738 | $ | 120 | $ | 76 | $ | 27 | ||||||||||||||
Total TDRs | $ | 20,945 | $ | (112 | ) | $ | 20,833 | $ | 18,657 | $ | 120 | $ | 401 | $ | 154 |
(Dollars in thousands) | Nonaccrual | Number | Loans Past Due Over 90 Days Still Accruing | Number | |||||||||
Commercial | $ | 590 | 1 | $ | — | — | |||||||
Commercial real estate: | |||||||||||||
Owner occupied | 42 | 1 | 170 | 3 | |||||||||
Other | 50 | 1 | — | — | |||||||||
Faith-based non-profit: | |||||||||||||
Owner occupied | 5,600 | 4 | 145 | 1 | |||||||||
Residential real estate: | |||||||||||||
First mortgage | 3,400 | 42 | 89 | 2 | |||||||||
Home equity | 20 | 3 | — | — | |||||||||
Consumer | 18 | 3 | — | — | |||||||||
Total | $ | 9,720 | 55 | $ | 404 | 6 |
Nonaccrual | Number | Loans Past Due Over 90 Days Still Accruing | Number | ||||||||||
(Dollars in thousands) | |||||||||||||
Commercial | $ | 590 | 1 | $ | — | — | |||||||
Commercial real estate: | |||||||||||||
Construction | 628 | 1 | — | — | |||||||||
Owner occupied | 772 | 4 | 52 | 1 | |||||||||
Other | 3,503 | 4 | 1 | 1 | |||||||||
Faith-based non-profit: | |||||||||||||
Owner occupied | 5,497 | 3 | — | — | |||||||||
Residential real estate: | |||||||||||||
First mortgage | 3,749 | 39 | 47 | 1 | |||||||||
Multifamily | — | — | 114 | 1 | |||||||||
Home equity | 582 | 8 | — | — | |||||||||
Consumer | 5 | 2 | — | — | |||||||||
Total | $ | 15,326 | 62 | $ | 214 | 4 |
(Dollars in thousands) | 30 – 59 Days Past Due | 60 – 89 Days Past Due | Greater than 90 Days Past Due | Total Past Due | Loans Not Past Due | Total | |||||||||||||||||
Commercial | $ | 6 | $ | — | $ | 590 | $ | 596 | $ | 4,944 | $ | 5,540 | |||||||||||
Commercial real estate: | |||||||||||||||||||||||
Construction | — | — | — | — | 1,726 | 1,726 | |||||||||||||||||
Owner occupied | — | — | 213 | 213 | 19,838 | 20,051 | |||||||||||||||||
Other | — | 353 | 50 | 403 | 26,225 | 26,628 | |||||||||||||||||
Faith-based non-profit: | |||||||||||||||||||||||
Construction | — | — | — | — | 1,910 | 1,910 | |||||||||||||||||
Owner occupied | 833 | 51 | 2,930 | 3,814 | 73,323 | 77,137 | |||||||||||||||||
Other | — | — | — | — | 6,861 | 6,861 | |||||||||||||||||
Residential real estate: | |||||||||||||||||||||||
First mortgage | 468 | 319 | 2,554 | 3,341 | 21,779 | 25,120 | |||||||||||||||||
Multifamily | — | — | — | — | 5,904 | 5,904 | |||||||||||||||||
Home equity | 157 | — | 7 | 164 | 3,256 | 3,420 | |||||||||||||||||
Construction | — | — | — | — | 381 | 381 | |||||||||||||||||
Consumer | 14 | 2 | — | 16 | 1,439 | 1,455 | |||||||||||||||||
Other loans | — | — | — | — | 2,808 | 2,808 | |||||||||||||||||
Total | $ | 1,478 | $ | 725 | $ | 6,344 | $ | 8,547 | $ | 170,394 | $ | 178,941 |
• | Special Mention. Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date. These loans exhibit a moderate likelihood of some loss related to those loans and leases. |
• | Substandard. Loans classified as substandard are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of or repayment according to the original terms of the debt. Substandard loans include loans within the mortgage and consumer portfolio segments that are past due 90 days or more as to principal or interest if the loan to value does not support full repayment. Substandard loans are evaluated for impairment on an individual loan basis unless the substandard loan is a smaller balance homogenous loan that is not a TDR. These loans exhibit a distinct possibility that the Bank will sustain some loss if the deficiencies related to the loans are not corrected in a timely manner. |
• | Doubtful. Loans classified as doubtful have all the weaknesses inherent in 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. |
• | Loss. Based on current facts and circumstances, loans classified as loss are not expected to be repaid, or that collateral will be difficult to liquidate. |
• | Pass. (includes internal watch) Loans are classified as pass in all classes within the portfolio that are not identified as special mention, substandard, or doubtful, are contractually current as to principal and interest, and are otherwise in compliance with the contractual terms of the loan agreement. These loans exhibit a low likelihood of loss. |
Pass | Special Mention | Substandard | Doubtful | Total | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Commercial | $ | 4,941 | $ | — | $ | 9 | $ | 590 | $ | 5,540 | |||||||||
Commercial real estate: | |||||||||||||||||||
Construction | 1,352 | — | 374 | — | 1,726 | ||||||||||||||
Owner occupied | 14,492 | 3,730 | 1,829 | — | 20,051 | ||||||||||||||
Other | 16,176 | 982 | 9,470 | — | 26,628 | ||||||||||||||
Faith-based and non-profit: | |||||||||||||||||||
Construction | 1,910 | — | — | — | 1,910 | ||||||||||||||
Owner occupied | 56,091 | 5,829 | 15,217 | — | 77,137 | ||||||||||||||
Other | 6,780 | 77 | 4 | — | 6,861 | ||||||||||||||
Residential real estate: | |||||||||||||||||||
First mortgage | 19,735 | 1,468 | 3,917 | — | 25,120 | ||||||||||||||
Multifamily | 5,777 | 63 | 64 | — | 5,904 | ||||||||||||||
Home equity | 3,125 | — | 295 | — | 3,420 | ||||||||||||||
Construction | 381 | — | — | — | 381 | ||||||||||||||
Consumer | 1,427 | 4 | 24 | — | 1,455 | ||||||||||||||
Other loans | 2,808 | — | — | — | 2,808 | ||||||||||||||
Total | $ | 134,995 | $ | 12,153 | $ | 31,203 | $ | 590 | $ | 178,941 |
(Dollars in thousands) | Pass | Special Mention | Substandard | Doubtful | Total | ||||||||||||||
Commercial | $ | 24 | $ | — | $ | 1 | $ | — | $ | 25 | |||||||||
Commercial real estate: | |||||||||||||||||||
Construction | 20 | — | — | — | 20 | ||||||||||||||
Owner occupied | 294 | 89 | 127 | — | 510 | ||||||||||||||
Other | 370 | 23 | 246 | — | 639 | ||||||||||||||
Faith-based and non-profit: | |||||||||||||||||||
Construction | 26 | — | — | — | 26 | ||||||||||||||
Owner occupied | 751 | 113 | 48 | — | 912 | ||||||||||||||
Other | 92 | 1 | — | — | 93 | ||||||||||||||
Residential real estate: | |||||||||||||||||||
First mortgage | 571 | 35 | 400 | — | 1,006 | ||||||||||||||
Multifamily | 114 | 1 | 1 | — | 116 | ||||||||||||||
Home equity | 38 | — | 9 | — | 47 | ||||||||||||||
Construction | 5 | — | — | — | 5 | ||||||||||||||
Consumer | 51 | — | 1 | — | 52 | ||||||||||||||
Other loans | 47 | 47 | |||||||||||||||||
Total | $ | 2,403 | $ | 262 | $ | 833 | $ | — | $ | 3,498 |
September 30, 2012 | |||||||||||||||||||||
(Dollars in thousands) | Actual | For Capital Adequacy Purposes | To Be Well Capitalized | ||||||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||||||
Total capital (to risk weighted assets) | |||||||||||||||||||||
Company | $ | 36,494 | 21.45 | % | $ | 13,608 | 8.00 | % | $ | 17,010 | 10.00 | % | |||||||||
Bank | 34,750 | 18.99 | 14,639 | 8.00 | 18,299 | 10.00 | |||||||||||||||
Tier 1 (to risk weighted assets) | |||||||||||||||||||||
Company | $ | 34,356 | 20.20 | % | $ | 6,804 | 4.00 | % | $ | 10,206 | 6.00 | % | |||||||||
Bank | 32,454 | 17.74 | 7,319 | 4.00 | 10,979 | 6.00 | |||||||||||||||
Tier 1 (to average total assets) | |||||||||||||||||||||
Company | $ | 34,356 | 11.76 | % | $ | 11,687 | 4.00 | % | $ | 14,609 | 5.00 | % | |||||||||
Bank | 32,454 | 11.21 | 11,582 | 4.00 | 1,477 | 5.00 |
December 31, 2011 | |||||||||||||||||||||
(Dollars in thousands) | Actual | For Capital Adequacy Purposes | To Be Well Capitalized | ||||||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||||||
Total capital (to risk weighted assets) | |||||||||||||||||||||
Company | $ | 36,476 | 18.86 | % | $ | 15,469 | 8.00 | % | $ | 19,336 | 10.00 | % | |||||||||
Bank | 34,282 | 17.96 | 15,269 | 8.00 | 19,086 | 10.00 | |||||||||||||||
Tier 1 (to risk weighted assets) | |||||||||||||||||||||
Company | $ | 34,047 | 17.61 | % | $ | 7,735 | 4.00 | % | $ | 11,602 | 6.00 | % | |||||||||
Bank | 31,884 | 16.71 | 7,635 | 4.00 | 11,452 | 6.00 | |||||||||||||||
Tier 1 (to average total assets) | |||||||||||||||||||||
Company | $ | 34,047 | 11.21 | % | $ | 12,151 | 4.00 | % | $ | 15,189 | 5.00 | % | |||||||||
Bank | 31,884 | 10.64 | 11,992 | 4.00 | 14,990 | 5.00 |
Item 4 - | Controls and Procedures |
Item 6. | Exhibits |
Exhibit No. | Exhibit Description | |
Exhibit 3(i)(a) | Amended and Restated Articles of Incorporation of the Company, incorporated by reference to Exhibit 3(i) to the Form 10-QSB, filed with the SEC on November 15, 1999. | |
Exhibit 3(i)(b) | Articles of Amendment, adopted by the shareholders of the Company on May 3, 2000, filed with the North Carolina Department of the Secretary of State on July 12, 2000, and incorporated by reference to Exhibit 3(v) to the Form 10-KSB, filed with the SEC on March 31, 2006. | |
Exhibit 3(i)(c) | Articles of Amendment, adopted by the shareholders of the Company on June 9, 2009, filed with the North Carolina Department of the Secretary of State on June 11, 2009, and incorporated by reference to Exhibit 4.1 to the Form 8-K filed with the SEC on June 26, 2009. | |
Exhibit 3(i)(d) | Articles of Amendment, adopted by the Board of Directors of the Company on June 10, 2009, filed with the North Carolina Department of the Secretary of State on June 25, 2009, and incorporated by reference to Exhibit 4.2 to the Form 8-K filed with the SEC on June 26, 2009. | |
Exhibit 3(i)(e) | Articles of Amendment, adopted by the Board of Directors of the Company on July 27, 2010, filed with the North Carolina Department of the Secretary of State on August 20, 2010, and incorporated by reference to Exhibit 4.1 to the Form 8-K filed with the SEC on August 23, 2010. | |
Exhibit 3(ii) | Restated Bylaws of the Company, incorporated by reference to Exhibit 99.1 to the Form 8K filed with the SEC on April 6, 2009. | |
Exhibit 4(i) | Specimen Stock Certificate, incorporated by reference to Exhibit 4 to the Form 10-KSB, filed with the SEC on April 2, 2001. | |
Exhibit 4(ii) | Form of Certificate for the Fixed Rate Cumulative Perpetual Preferred Stock, Series B, incorporated by reference to Exhibit 4.2 to the Form 8-K filed with the SEC on August 23, 2010. | |
Exhibit 10(i) * | Employment Agreement dated January 12, 2007 by and among Kim D. Saunders, the Company and the Bank, incorporated by reference to Exhibit 99.1 to the Form 8-K filed with the SEC on January 18, 2007. | |
Exhibit 10(ii) | Letter Agreement and certain side letters, all dated August 20, 2010, between the Company and the United States Department of the Treasury, with respect to the issuance and sale of the Fixed Rate Cumulative Perpetual Preferred Stock, Series B, incorporated by reference to Exhibit 10.1 to the Form 8-K filed with the SEC on August 23, 2010. | |
Exhibit 10(iii) * | Employment Agreement Amendment, dated June 26, 2009, among the Company, the Bank and Kim D. Saunders, incorporated by reference to Exhibit 10.2 to the Form 8-K filed with the SEC on June 26, 2009. |
Exhibit 31(i) | Certification of Kim D. Saunders. | |
Exhibit 31(ii) | Certification of Lyn Hittle. | |
Exhibit 32 | Certification pursuant to 18 U.S.C. Section 1350. | |
Exhibit 101 | Financial Statements filed in XBRL format | |
*management contracts and compensatory arrangements |
M&F Bancorp, Inc. | |||
Date: | November 13, 2012 | By: | /s/ Kim D. Saunders |
Kim D. Saunders | |||
President, Chief Executive Officer | |||
By: | /s/ Lyn Hittle | ||
Lyn Hittle | |||
Senior Vice President, Chief Financial Officer |
Exhibit 31(i) | Certification of Kim D. Saunders. | |
Exhibit 31(ii) | Certification of Lyn Hittle. | |
Exhibit 32 | Certification pursuant to 18 U.S.C. Section 1350. |
1. | I have reviewed this quarterly report on Form 10-Q of M & F Bancorp, Inc.: |
2. | Based on my knowledge, this quarterly 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 and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Securities Exchange Act Rules 13a-15(e) and 15d-15(e)) 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 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 the 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: | November 13, 2012 | /s/ Kim D. Saunders | |
Kim D. Saunders | |||
President and Chief Executive Officer | |||
M&F Bancorp, Inc. |
1. | I have reviewed this quarterly report on Form 10-Q of M & F Bancorp, Inc.: |
2. | Based on my knowledge, this quarterly 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 and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Securities Exchange Act Rules 13a-15(e) and 15d-15(e)) 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 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 the 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: | November 13, 2012 | /s/ Lyn Hittle | |
Lyn Hittle | |||
Chief Financial Officer | |||
M&F Bancorp, Inc. |
Dated: | November 13, 2012 | /s/ Kim D. Saunders | |
Kim D. Saunders | |||
President, Chief Executive Officer | |||
Dated: | November 13, 2012 | /s/ Lyn Hittle | |
Lyn Hittle | |||
Chief Financial Officer |
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LOANS AND ALLOWANCE FOR LOAN LOSSES Nonaccrual loans by deliquency (Details) (USD $)
|
Sep. 30, 2012
|
---|---|
Loans and Allowance for Loan Losses [Abstract] | |
Deliquent loans still accruing | $ 404 |
Number loans deliquent longer than 90 days | 6 |
Number of nonaccrual loans deliquent less than 30 days | 12 |
Nonaccrual loans deliquent less than 30 days | 3,436 |
Nonaccrual loans deliquent 30-59 days | 308 |
Number of nonaccrual loans deliquent 30-59 days | 3 |
Nonaccrual loans deliquent 60-89 days | 35 |
Number of nonaccrual loans deliquent 60-89 days | 1 |
Nonaccrual loans deliquent greater than 90 days | 5,941 |
Number of nonaccrual loans deliquent greater than 90 days | 39 |
Nonaccrual loans | $ 9,720 |
number of nonaccrual loans | 55 |
LOANS AND ALLOWANCE FOR LOAN LOSSES Average impaired loans (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2012
|
Sep. 30, 2011
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Sep. 30, 2012
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Sep. 30, 2011
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Commercial Loan [Member]
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||||
Average impaired loans including TDR's [Line Items] | ||||
Average balance of impaired loans | $ 0 | $ 15 | $ 0 | $ 15 |
Commercial Loans secured by Real Estate, Owner Occupied [Member]
|
||||
Average impaired loans including TDR's [Line Items] | ||||
Average balance of impaired loans | 44 | 1,042 | 296 | 1,051 |
Commercial Loans secured by Real Estate, Other [Member]
|
||||
Average impaired loans including TDR's [Line Items] | ||||
Average balance of impaired loans | 1,653 | 117 | 874 | 109 |
Faith Based Real Estate Secured, owner occupied [Member]
|
||||
Average impaired loans including TDR's [Line Items] | ||||
Average balance of impaired loans | 2,522 | 6,057 | 2,522 | 5,948 |
Residential real estate- First Mortgage [Member]
|
||||
Average impaired loans including TDR's [Line Items] | ||||
Average balance of impaired loans | 1,222 | 1,071 | 1,202 | 799 |
Residential real estate- multifamily [Member]
|
||||
Average impaired loans including TDR's [Line Items] | ||||
Average balance of impaired loans | 629 | 547 | ||
Residential real estate- Home equity [Member]
|
||||
Average impaired loans including TDR's [Line Items] | ||||
Average balance of impaired loans | 267 | 278 | 274 | 190 |
Unsecured consumer loans [Member]
|
||||
Average impaired loans including TDR's [Line Items] | ||||
Average balance of impaired loans | 5 | 2 | 5 | |
Average impaired loans [Member]
|
||||
Average impaired loans including TDR's [Line Items] | ||||
Average balance of impaired loans | $ 5,708 | $ 9,214 | $ 5,170 | $ 8,712 |
FAIR VALUE MEASUREMENT (Tables)
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Sep. 30, 2012
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FAIR VALUE MEASUREMENT [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, Assets Measured on Recurring Basis [Table Text Block] | Assets measured at fair value on a recurring basis as of September 30, 2012 were:
Assets measured at fair value on a recurring basis as of December 31, 2011 were:
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Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block] | The table below displays the change in all recurring Level 3 Assets between December 31, 2011 and September 30, 2012:
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Fair Value Schedule of Financial Assets Measured on a Nonrecurring Basis [Table Text Block] | Assets measured at fair value on a nonrecurring basis as of September 30, 2012 and December 31, 2011 were:
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Fair Value, Measurement Inputs, Disclosure [Table Text Block] |
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Fair Value Schedule of Financial Assets and Liabilities measured on a recurring and nonrecurring basis [Table Text Block] | As of September 30, 2012 and December 31, 2011, the carrying amounts and associated estimated fair value of financial assets and liabilities of the Company are as follows:
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COMMITMENTS AND CONTINGENCIES (Details) (USD $)
In Thousands, unless otherwise specified |
Sep. 30, 2012
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Commercial Letters of Credit- Maturity Less Than 1 Year [Member]
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Guarantor Obligations [Line Items] | |
Letters of Credit Outstanding, Amount | $ 435 |
Other Loan Commitments- Maturity Less than 1 Year [Member]
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Guarantor Obligations [Line Items] | |
Other Loan Commitments | 17,290 |
Total Loan Commitments- Maturity Less than 1 Years [Member]
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Guarantor Obligations [Line Items] | |
Total Commitments | 17,725 |
Commercial Letters of Credit- Maturity Between 1 and 3 Year [Member]
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Guarantor Obligations [Line Items] | |
Letters of Credit Outstanding, Amount | 0 |
Other Loan Commitments | 701 |
Total Loan Commitments- Maturity Between 1 and 3 Years [Member]
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Guarantor Obligations [Line Items] | |
Total Commitments | 701 |
Commercial Letters of Credit- Maturity Between 3 and 5 Years [Member]
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Guarantor Obligations [Line Items] | |
Letters of Credit Outstanding, Amount | 71 |
Other loan commitments- maturity 3 and 5 years [Member]
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Guarantor Obligations [Line Items] | |
Other Loan Commitments | 4,859 |
Total Loan Commitments- Maturity Between 3 and 5 Years [Member]
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Guarantor Obligations [Line Items] | |
Total Commitments | 4,930 |
Commercial Letters of Credit- Maturity Greater than 5 Years [Member]
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Guarantor Obligations [Line Items] | |
Letters of Credit Outstanding, Amount | 0 |
Other loan committments-maturity greater than 5 years [Member]
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Guarantor Obligations [Line Items] | |
Other Loan Commitments | 2,150 |
Total Loan Commitments- Maturity Greater than 5 Years [Member]
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Guarantor Obligations [Line Items] | |
Total Commitments | 2,150 |
Total Commercial Letters of Credit [Member]
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Guarantor Obligations [Line Items] | |
Letters of Credit Outstanding, Amount | 506 |
Total Other Loan Commitments [Member]
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Guarantor Obligations [Line Items] | |
Other Loan Commitments | 25,000 |
Total Loan Commitments [Member]
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Guarantor Obligations [Line Items] | |
Total Commitments | $ 25,506 |
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