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þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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California
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77-0559736
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(State or other jurisdiction
of incorporation)
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(I.R.S. Employer
Identification No.)
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Large accelerated filer o
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Accelerated filer o
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Non-accelerated filer o
(Do not check if a smaller reporting company)
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Smaller reporting company þ
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PART I – FINANCIAL INFORMATION | ||
Item 1. Financial Statements (Unaudited) | 3 | |
Condensed Consolidated Balance Sheets at September 30, 2012 and December 31, 2011
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3 | |
Condensed Consolidated Statements of Operations for the Three-Month and Nine-Month Periods Ended September 30, 2012 and 2011
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4 | |
Consolidated Statements of Comprehensive Income (Loss) for the Three-Month and Nine-Month Periods Ended September 30, 2012 and 2011
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5 | |
Condensed Consolidated Statements of Changes of Shareholders’ Equity for the Nine-Month Period Ended September 30, 2012
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5 | |
Condensed Consolidated Statements of Cash Flows for the Nine-Month Periods Ended September 30, 2012 and 2011
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6 | |
Notes to Consolidated Financial Statements
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7 | |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 30 | |
Item 3. Quantitative and Qualitative Disclosures About Market Risk | 49 | |
Item 4. Controls and Procedures | 49 | |
PART II – OTHER INFORMATION | ||
Item 1. Legal Proceedings | 50 | |
Item 1A. Risk Factors | 50 | |
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 50 | |
Item 3. Defaults Upon Senior Securities | 50 | |
Item 4. Mine Safety Disclosures | 50 | |
Item 5. Other Information | 50 | |
Item 6. Exhibits | 51 |
September 30, 2012
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December 31, 2011
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|||||||
Assets
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||||||||
Cash and due from banks
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$ | 21,197 | $ | 61,621 | ||||
Certificates of deposit in other banks
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5,176 | 3,592 | ||||||
Investment securities available for sale
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147,066 | 128,310 | ||||||
Loans held for sale
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3,490 | 3,720 | ||||||
Loans, net of unearned income
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233,537 | 229,949 | ||||||
Less allowance for loan and lease losses
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(4,100 | ) | (3,326 | ) | ||||
Net loans
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229,437 | 226,623 | ||||||
Federal Home Loan Bank stock and other investments, at cost
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6,699 | 3,926 | ||||||
Premises and equipment
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15,977 | 16,282 | ||||||
Other real estate owned
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1,463 | 5,220 | ||||||
Company owned life insurance
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7,958 | 7,786 | ||||||
Core deposit intangible asset, net of accumulated amortization
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2,866 | 3,170 | ||||||
Accrued interest and other assets
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1,988 | 3,062 | ||||||
Total Assets
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$ | 443,317 | $ | 463,312 | ||||
Liabilities and Shareholders' Equity
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||||||||
Deposits:
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||||||||
Noninterest-bearing demand
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$ | 125,778 | $ | 105,105 | ||||
Money market, NOW and savings
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153,332 | 156,273 | ||||||
Time certificates of deposit
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110,298 | 149,196 | ||||||
Total deposits
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389,408 | 410,574 | ||||||
Other borrowings
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3,800 | - | ||||||
Junior subordinated debt securities
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5,576 | 5,491 | ||||||
Accrued interest and other liabilities
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2,667 | 4,271 | ||||||
Warrant liability
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- | 5,184 | ||||||
Total liabilities
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401,451 | 425,520 | ||||||
Mezzanine financing:
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||||||||
Redeemable Bancorp-issued preferred stock, Series A, B and C; liquidation value of $1,205
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1,205 | 1,205 | ||||||
Redeemable subsidiary-issued preferred stock; liquidation value of $4,800 at September 30, 2012, and $7,000 at December 31, 2011
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4,800 | 7,000 | ||||||
Shareholders' equity:
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||||||||
Common stock - 50,000,000 shares authorized; issued and outstanding: 7,855,066 at September 30, 2012 and 7,755,066 at December 31, 2011
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41,325 | 40,825 | ||||||
Additional paid-in capital
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8,730 | 3,505 | ||||||
Accumulated deficit
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(16,487 | ) | (16,438 | ) | ||||
Accumulated other comprehensive income
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2,293 | 1,695 | ||||||
Total shareholders' equity
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35,861 | 29,587 | ||||||
Total Liabilities and Shareholders' Equity
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$ | 443,317 | $ | 463,312 |
For the Three Months
Ended September 30,
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For the Nine Months
Ended September 30,
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|||||||||||||||
2012
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2011
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2012
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2011
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|||||||||||||
Interest Income
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||||||||||||||||
Interest and fees on loans
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$ | 3,739 | $ | 1,785 | $ | 12,389 | $ | 5,271 | ||||||||
Interest on investment securities
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696 | 470 | 2,035 | 1,350 | ||||||||||||
Other interest income
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17 | 6 | 85 | 22 | ||||||||||||
Total interest income
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4,452 | 2,261 | 14,509 | 6,643 | ||||||||||||
Interest Expense
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||||||||||||||||
Interest on money market, NOW and savings deposits
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71 | 86 | 212 | 305 | ||||||||||||
Interest on time certificates of deposit
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149 | 217 | 601 | 693 | ||||||||||||
Other interest expense
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82 | 25 | 246 | 80 | ||||||||||||
Total interest expense
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302 | 328 | 1,059 | 1,078 | ||||||||||||
Net interest income
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4,150 | 1,933 | 13,450 | 5,565 | ||||||||||||
Provision for loan and lease losses
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225 | 300 | 675 | 300 | ||||||||||||
Net interest income after provision for loan and lease losses
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3,925 | 1,633 | 12,775 | 5,265 | ||||||||||||
Non-interest income
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||||||||||||||||
Service charges on deposit accounts
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236 | 114 | 691 | 312 | ||||||||||||
Gain on sale of SBA-guaranteed loans
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- | 31 | 8 | 172 | ||||||||||||
Net gains(losses) on disposition of other loans held for sale
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685 | 209 | 711 | 255 | ||||||||||||
Loan servicing fees, net of amortization
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37 | 38 | 119 | 97 | ||||||||||||
Gain on sale or call of available-for-sale securities
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407 | 4 | 934 | 4 | ||||||||||||
Gain(loss) or writedown of other real estate owned and premises and equipment
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(170 | ) | (94 | ) | (458 | ) | (71 | ) | ||||||||
Change in fair value of warrant liability
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(11 | ) | 248 | 68 | 1,207 | |||||||||||
Other income and fees
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128 | 138 | 341 | 260 | ||||||||||||
Total non-interest income
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1,312 | 688 | 2,414 | 2,236 | ||||||||||||
Non-interest expense
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||||||||||||||||
Salaries and employee benefits
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2,237 | 1,601 | 7,090 | 4,364 | ||||||||||||
Occupancy expenses
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431 | 341 | 1,353 | 993 | ||||||||||||
Furniture and equipment
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162 | 120 | 597 | 346 | ||||||||||||
Data processing
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464 | 276 | 1,805 | 739 | ||||||||||||
Professional fees
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265 | 369 | 1,000 | 902 | ||||||||||||
Marketing and business development
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96 | 47 | 312 | 140 | ||||||||||||
Office supplies and expenses
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145 | 66 | 537 | 192 | ||||||||||||
Insurance and regulatory assessments
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162 | 86 | 485 | 312 | ||||||||||||
Loan and lease expenses
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56 | 42 | 246 | 202 | ||||||||||||
Other real estate expenses
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89 | 15 | 238 | 113 | ||||||||||||
Provision for unfunded loan commitments
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25 | 180 | 25 | 180 | ||||||||||||
Amortization of core deposit intangible asset
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101 | - | 303 | - | ||||||||||||
Other expenses
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244 | 178 | 744 | 495 | ||||||||||||
Total non-interest expense
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4,477 | 3,321 | 14,735 | 8,978 | ||||||||||||
Income (loss) before income taxes
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760 | (1,000 | ) | 454 | (1,477 | ) | ||||||||||
Income tax expense
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- | 1 | 3 | 6 | ||||||||||||
Net income (loss)
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$ | 760 | $ | (1,001 | ) | $ | 451 | $ | (1,483 | ) | ||||||
Less dividends on preferred stock
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151 | 64 | 500 | 192 | ||||||||||||
Net income (loss) attributable to common stock
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$ | 609 | $ | (1,065 | ) | $ | (49 | ) | $ | (1,675 | ) | |||||
Per Common Share Data:
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||||||||||||||||
Net income (loss) - basic
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$ | 0.08 | $ | (0.15 | ) | $ | (0.01 | ) | $ | (0.24 | ) | |||||
Net income (loss) - diluted
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$ | 0.08 | $ | (0.15 | ) | $ | (0.01 | ) | $ | (0.24 | ) | |||||
Average common shares outstanding - basic
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7,855,066 | 7,094,274 | 7,792,292 | 7,094,274 | ||||||||||||
Average common shares outstanding - diluted
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7,855,066 | N/A | 7,792,292 | N/A |
For the Three Months
Ended September 30,
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For the Nine Months
Ended September 30,
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|||||||||||||||
2012
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2011
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2012
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2011
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|||||||||||||
Net income (loss)
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$ | 760 | $ | (1,001 | ) | $ | 451 | $ | (1,483 | ) | ||||||
Other comprehensive income:
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||||||||||||||||
Unrealized gains arising during the period on available-for-sale securities, net of taxes of $-0-
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565 | 809 | 1,532 | 1,734 | ||||||||||||
Less reclassification adjustment for securities gains included in net income
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(407 | ) | (4 | ) | (934 | ) | (4 | ) | ||||||||
Other comprehensive income
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158 | 805 | 598 | 1,730 | ||||||||||||
Comprehensive income (loss)
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$ | 918 | $ | (196 | ) | $ | 1,049 | $ | 247 |
Common Stock |
Additional
Paid-In |
Accumulated
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Accumulated Other
Comprehensive
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|||||||||||||||||||||
Shares
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Amount
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Capital
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Deficit
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Income
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Total
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|||||||||||||||||||
Balance at December 31, 2011, as previously reported
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7,755,066 | $ | 40,825 | $ | 2,375 | $ | (16,438 | ) | $ | 1,695 | $ | 28,457 | ||||||||||||
Adjustment to net contribution from shareholder recognized in additional paid-in capital for Santa Lucia merger
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- | - | 1,130 | - | - | 1,130 | ||||||||||||||||||
Balance at January 1, 2012, as adjusted
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7,755,066 | $ | 40,825 | $ | 3,505 | $ | (16,438 | ) | $ | 1,695 | $ | 29,587 | ||||||||||||
Exercise of common stock warrants | 100,000 | 500 | 500 | |||||||||||||||||||||
Dividends declared on subsidiary-issued preferred stock
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(500 | ) | (500 | ) | ||||||||||||||||||||
Stock-based compensation
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109 | 109 | ||||||||||||||||||||||
Cancellation of warrants accounted for as liabilities
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5,116 | 5,116 | ||||||||||||||||||||||
Net income
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451 | 451 | ||||||||||||||||||||||
Other comprehensive income
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- | - | - | - | 598 | 598 | ||||||||||||||||||
Balance at September 30, 2012
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7,855,066 | $ | 41,325 | $ | 8,730 | $ | (16,487 | ) | $ | 2,293 | $ | 35,861 |
For the Nine Months Ended
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||||||||
September 30, 2012
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September 30, 2011
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|||||||
Operating Activities
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||||||||
Net income (loss)
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$ | 451 | $ | (1,483 | ) | |||
Adjustments to reconcile net income (loss) income to net cash provided by (used in) operating activities:
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||||||||
Depreciation
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695 | 379 | ||||||
Accretion of discount on securities and loans, net
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1,016 | 431 | ||||||
Amortization of core deposit intangible asset
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303 | - | ||||||
Accretion of discount on assets acquired in merger
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(2,186 | ) | - | |||||
Amortization of discount on liabilities assumed in merger
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84 | - | ||||||
Provision for loan and lease losses
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675 | 300 | ||||||
Provision for losses on unfunded loan commitments
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25 | 180 | ||||||
Stock-based compensation
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109 | 105 | ||||||
Gain on sale or call of available-for-sale securities
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(934 | ) | (4 | ) | ||||
Gain on sale of loans
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(8 | ) | (172 | ) | ||||
Gains on disposition of loans held for sale
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(711 | ) | (255 | ) | ||||
Change in the fair value of warrant liability
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(68 | ) | (1,207 | ) | ||||
Net losses and writedowns of fixed assets or other real estate owned
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458 | 71 | ||||||
Increase in company-owned life insurance
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(172 | ) | (68 | ) | ||||
Other, net
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538 | (66 | ) | |||||
Proceeds from loan sales
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101 | 1,917 | ||||||
Loans originated for sale
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- | (1,988 | ) | |||||
Net cash provided by (used in) operating activities
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376 | (1,860 | ) | |||||
Investing Activities
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||||||||
Net (increase) decrease in deposits in other banks
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(1,584 | ) | 248 | |||||
Purchase of available-for-sale securities
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(106,091 | ) | (26,652 | ) | ||||
Proceeds from maturities, calls and paydowns of available-for-sale securities
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33,021 | 13,180 | ||||||
Proceeds from sales of available-for-sale securities
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54,788 | - | ||||||
Net increase in loans held for investment
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(6,971 | ) | (3,950 | ) | ||||
Net decrease in loans held for sale
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3,962 | 3,878 | ||||||
Net (increase) decrease in Federal Home Loan Bank and other stock
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(2,751 | ) | 272 | |||||
Purchases of premises and equipment
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(431 | ) | (227 | ) | ||||
Additional investments in other real estate owned
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- | (111 | ) | |||||
Proceeds from sale of premises and equipment
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21 | - | ||||||
Proceeds from sale of other real estate owned
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4,780 | 2,574 | ||||||
Net cash used in investing activities
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(21,256 | ) | (10,788 | ) | ||||
Financing Activities
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||||||||
Net increase in demand deposits and savings accounts
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17,732 | 11,327 | ||||||
Net (decrease) increase in time deposits
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(38,898 | ) | 6,979 | |||||
Net Increase (decrease) in other borrowings
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1,600 | (349 | ) | |||||
Additional costs of 2010 shareholder rights offering
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- | (40 | ) | |||||
Proceeds from exercise of common stock warrants
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500 | - | ||||||
Payment of dividends on preferred stock
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(478 | ) | (192 | ) | ||||
Net cash (used in) provided by financing activities
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(19,544 | ) | 17,725 | |||||
Net (decrease) increase in cash and cash equivalents
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(40,424 | ) | 5,077 | |||||
Cash and cash equivalents at beginning of period
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61,621 | 10,817 | ||||||
Cash and cash equivalents at end of period
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$ | 21,197 | $ | 15,894 | ||||
Non-cash changes:
|
||||||||
Change in unrealized gains on available-for-sale securities
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598 | 1,729 | ||||||
Loans reclassified to held for sale
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4,583 | - | ||||||
Real estate acquired by foreclosure
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1,462 | 1,286 | ||||||
Adjustments to net contribution from shareholder recognized in additional paid-in capital for Santa Lucia merger
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1,130 | - | ||||||
Cancellation of warrants accounted for as liabilities
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(5,116 | ) | - | |||||
Supplemental disclosures of cash flow information:
|
||||||||
Interest paid
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1,249 | 1,086 | ||||||
Taxes paid
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3 | 4 |
Date of grant
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1/25/2011
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4/4/2011
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7/26/2011
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|||||||||
Number of options granted
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20,000 | 20,000 | 20,000 | |||||||||
Exercise price
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$ | 5.00 | $ | 5.00 | $ | 5.00 | ||||||
Market price of common stock
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$ | 3.65 | $ | 3.61 | $ | 3.55 | ||||||
Expected stock price volatility
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37.4 | % | 37.3 | % | 36.2 | % | ||||||
Expected option life (years) | 6 | 6 | 6 | |||||||||
Risk-free interest rate
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2.32 | % | 2.53 | % | 2.07 | % | ||||||
Weighted average fair value of all options granted during the period: | ||||||||||||
3 months ended 9/30/11
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$ | 1.03 | ||||||||||
9 months ended 9/30/11
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$ | 1.06 |
October 1 through December 31, 2012
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$ | 35 | ||
2013
|
85 | |||
2014
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29 | |||
2015
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29 | |||
2016
|
19 | |||
Total unrecognized compensation cost
|
$ | 197 |
Shares
|
Weighted-
Average |
Weighted-
Average |
Aggregate
Intrinsic |
|||||||||||||
Outstanding at beginning of period
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297,219 | $ | 7.84 | |||||||||||||
Options granted
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- | |||||||||||||||
Options exercised
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- | |||||||||||||||
Options expired unexercised
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(9,500 | ) | 11.30 | |||||||||||||
Options forfeited
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(19,819 | ) | 20.48 | |||||||||||||
Outstanding at end of period
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267,900 | $ | 6.78 | 7.9 | $ | - | ||||||||||
Options exercisable at end of period
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122,338 | $ | 8.76 | 7.2 | $ | - | ||||||||||
Options Vested or Expected to Vest
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267,900 | $ | 6.78 | 7.9 | $ | - |
(in thousands) |
Amortized
Cost |
Gross
Unrealized |
Gross
Unrealized |
Estimated
Fair |
||||||||||||
September 30, 2012:
|
||||||||||||||||
U.S. Government agencies
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$ | 42,686 | $ | 561 | $ | - | $ | 43,247 | ||||||||
Residential mortgage-backed securities
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68,968 | 1,527 | (16 | ) | 70,479 | |||||||||||
Municipal securities
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16,445 | 202 | (55 | ) | 16,592 | |||||||||||
Corporate debt securities
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3,026 | 4 | (6 | ) | 3,024 | |||||||||||
Asset-backed securities
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13,647 | 77 | - | 13,724 | ||||||||||||
$ | 144,772 | $ | 2,371 | $ | (77 | ) | $ | 147,066 |
December 31, 2011:
|
||||||||||||||||
U.S. Government agencies
|
$ | 26,098 | $ | 331 | $ | (12 | ) | $ | 26,417 | |||||||
Residential mortgage-backed securities
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88,209 | 1,122 | (38 | ) | 89,293 | |||||||||||
Municipal securities
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4,820 | 239 | (2 | ) | 5,057 | |||||||||||
Corporate debt securities
|
2,059 | - | (4 | ) | 2,055 | |||||||||||
Asset-backed securities
|
5,429 | 79 | (20 | ) | 5,488 | |||||||||||
$ | 126,615 | $ | 1,771 | $ | (76 | ) | $ | 128,310 |
(in thousands)
|
Available-for-Sale Securities
|
|||||||
|
Amortized
Cost |
Fair
Value |
||||||
Within one year
|
$ | 6,939 | $ | 6,963 | ||||
Due in one year to five years
|
32,979 | 33,034 | ||||||
Due in five years to ten years
|
39,207 | 39,877 | ||||||
Due in greater than ten years
|
65,647 | 67,192 | ||||||
$ | 144,772 | $ | 147,066 |
(in thousands)
|
Less than 12 Months
|
12 Months or Longer
|
Total
|
|||||||||||||||||||||
Fair
Value |
Unrealized
Losses |
Fair
Value |
Unrealized
Losses |
Fair
Value |
Unrealized
Losses |
|||||||||||||||||||
September 30, 2012:
|
||||||||||||||||||||||||
Residential mortgage-backed securities
|
$ | 9,601 | $ | 16 | $ | - | $ | - | $ | 9,601 | $ | 16 | ||||||||||||
Municipal securities
|
4,986 | 55 | - | - | 4,986 | 55 | ||||||||||||||||||
Corporate debt securities
|
1,994 | 6 | - | - | 1,994 | 6 | ||||||||||||||||||
$ | 16,581 | $ | 77 | $ | - | $ | - | $ | 16,581 | $ | 77 |
December 31, 2011:
|
||||||||||||||||||||||||
U.S. Government agencies
|
$ | 2,082 | $ | 12 | $ | - | $ | - | $ | 2,082 | $ | 12 | ||||||||||||
Residential mortgage-backed securities
|
9,731 | 38 | - | - | 9,731 | 38 | ||||||||||||||||||
Municipal securities
|
240 | 2 | - | - | 240 | 2 | ||||||||||||||||||
Corporate debt securities
|
1,055 | 4 | - | - | 1,055 | 4 | ||||||||||||||||||
Asset-backed securities
|
1,585 | 20 | - | - | 1,585 | 20 | ||||||||||||||||||
$ | 14,693 | $ | 76 | $ | - | $ | - | $ | 14,693 | $ | 76 |
Loan Composition
|
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||
September 30, 2012
|
December 31, 2011
|
|||||||||||||||
Type of Loan
|
Amount
|
Percentage
|
Amount
|
Percentage
|
||||||||||||
Construction and land development
|
$ | 11,695 | 4.9 | % | $ | 18,022 | 7.6 | % | ||||||||
Commercial real estate - owner-occupied
|
69,410 | 29.3 | % | 70,153 | 30.0 | % | ||||||||||
Commercial real estate - non-owner-occupied
|
75,020 | 31.7 | % | 64,382 | 27.6 | % | ||||||||||
Residential real estate
|
32,120 | 13.6 | % | 32,609 | 14.0 | % | ||||||||||
All other real estate loans
|
7,764 | 3.3 | % | 2,321 | 1.0 | % | ||||||||||
Commercial and industrial loans
|
32,826 | 13.8 | % | 30,176 | 12.9 | % | ||||||||||
Agricultural loans
|
3,369 | 1.4 | % | 9,272 | 4.0 | % | ||||||||||
Municipal loans
|
2,352 | 1.0 | % | 2,393 | 1.0 | % | ||||||||||
Leases, net of unearned income
|
1,277 | 0.5 | % | 2,323 | 1.0 | % | ||||||||||
Consumer loans
|
1,194 | 0.5 | % | 2,018 | 0.9 | % | ||||||||||
Total loans
|
$ | 237,027 | 100.0 | % | $ | 233,669 | 100.0 | % |
Loans Held for Sale*
|
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||
September 30, 2012
|
December 31, 2011
|
|||||||||||||||
Type of Loan
|
Amount
|
% of Total Loans
|
Amount
|
% of Total Loans
|
||||||||||||
Commercial
|
$ | 278 | 0.1 | % | $ | 115 | 0.1 | % | ||||||||
Real estate
|
1,656 | 0.7 | % | 3,030 | 1.3 | % | ||||||||||
Construction and land development
|
1,556 | 0.7 | % | 575 | 0.2 | % | ||||||||||
Total loans held for sale
|
$ | 3,490 | 1.5 | % | $ | 3,720 | 1.6 | % |
(in thousands)
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Balance at beginning of period
|
$ | 3,781 | $ | 3,182 | $ | 3,326 | $ | 3,198 | ||||||||
Provision for loan and lease losses charged to expense
|
225 | 300 | 675 | 300 | ||||||||||||
Loans charged off
|
(22 | ) | (360 | ) | (144 | ) | (460 | ) | ||||||||
Recoveries on loans previously charged off
|
116 | 42 | 243 | 126 | ||||||||||||
Balance at end of period
|
$ | 4,100 | $ | 3,164 | $ | 4,100 | $ | 3,164 |
Three Months Ended September 30, 2012
|
||||||||||||||||||||
Loan Portfolio Segment
|
Balance at Beginning of Period
|
Provision for Loan Losses Charged (Credited) to Expense
|
Less Loans Charged Off
|
Plus Recoveries on Loans Previously Charged Off
|
Balance at End of Period
|
|||||||||||||||
Construction and land development
|
$ | 366 | $ | (97 | ) | $ | - | $ | - | $ | 269 | |||||||||
Commercial real estate - owner-occupied
|
505 | 85 | - | 28 | 618 | |||||||||||||||
Commercial real estate - non-owner-occupied
|
883 | 73 | - | - | 956 | |||||||||||||||
Residential real estate
|
658 | 154 | - | - | 812 | |||||||||||||||
All other real estate loans
|
6 | 33 | - | - | 39 | |||||||||||||||
Commercial and industrial loans
|
1,197 | 70 | - | 13 | 1,280 | |||||||||||||||
Consumer and all other loans and lease financing
|
134 | (76 | ) | (22 | ) | 75 | 111 | |||||||||||||
Unallocated
|
32 | (17 | ) | - | - | 15 | ||||||||||||||
Totals
|
$ | 3,781 | $ | 225 | $ | (22 | ) | $ | 116 | $ | 4,100 |
Three Months Ended September 30, 2011
|
||||||||||||||||||||
Loan Portfolio Segment
|
Balance at Beginning of Year
|
Provision for Loan Losses Charged (Credited) to Expense
|
Less Loans Charged Off
|
Plus Recoveries on Loans Previously Charged Off
|
Balance at End of Period
|
|||||||||||||||
Construction and land development
|
$ | 123 | $ | 11 | $ | - | $ | - | $ | 134 | ||||||||||
Commercial real estate - owner-occupied
|
393 | (74 | ) | (22 | ) | - | 297 | |||||||||||||
Commercial real estate - non-owner-occupied
|
714 | 188 | (125 | ) | - | 777 | ||||||||||||||
Residential real estate
|
516 | 29 | (69 | ) | 35 | 511 | ||||||||||||||
All other real estate loans
|
4 | - | - | - | 4 | |||||||||||||||
Commercial and industrial loans
|
1,037 | 383 | (115 | ) | 4 | 1,309 | ||||||||||||||
Consumer and all other loans and lease financing
|
113 | (39 | ) | (29 | ) | 3 | 48 | |||||||||||||
Unallocated
|
282 | (198 | ) | - | - | 84 | ||||||||||||||
Totals
|
$ | 3,182 | $ | 300 | $ | (360 | ) | $ | 42 | $ | 3,164 |
Nine Months Ended September 30, 2012
|
||||||||||||||||||||
Loan Portfolio Segment
|
Balance at Beginning of Period
|
Provision for Loan Losses Charged (Credited) to Expense
|
Less Loans Charged Off
|
Plus Recoveries on Loans Previously Charged Off
|
Balance at End of Period
|
|||||||||||||||
Construction and land development
|
$ | 157 | $ | 112 | $ | - | $ | - | $ | 269 | ||||||||||
Commercial real estate - owner-occupied
|
253 | 335 | - | 30 | 618 | |||||||||||||||
Commercial real estate - non-owner-occupied
|
675 | 281 | - | - | 956 | |||||||||||||||
Residential real estate
|
640 | 172 | - | - | 812 | |||||||||||||||
All other real estate loans
|
4 | 35 | - | - | 39 | |||||||||||||||
Commercial and industrial loans
|
1,363 | (70 | ) | (101 | ) | 88 | 1,280 | |||||||||||||
Consumer and all other loans and lease financing
|
124 | (95 | ) | (43 | ) | 125 | 111 | |||||||||||||
Unallocated
|
110 | (95 | ) | - | - | 15 | ||||||||||||||
Totals
|
$ | 3,326 | $ | 675 | $ | (144 | ) | $ | 243 | $ | 4,100 |
Nine Months Ended September 30, 2011
|
||||||||||||||||||||
Loan Portfolio Segment
|
Balance at Beginning of Year
|
Provision for Loan Losses Charged (Credited) to Expense
|
Less Loans Charged Off
|
Plus Recoveries on Loans Previously Charged Off
|
Balance at End of Period
|
|||||||||||||||
Construction and land development
|
$ | 531 | $ | (397 | ) | $ | - | $ | - | $ | 134 | |||||||||
Commercial real estate - owner-occupied
|
164 | 144 | (21 | ) | 10 | 297 | ||||||||||||||
Commercial real estate - non-owner-occupied
|
697 | 205 | (125 | ) | - | 777 | ||||||||||||||
Residential real estate
|
501 | 114 | (153 | ) | 49 | 511 | ||||||||||||||
All other real estate loans
|
4 | - | - | - | 4 | |||||||||||||||
Commercial and industrial loans
|
1,021 | 350 | (123 | ) | 61 | 1,309 | ||||||||||||||
Consumer and all other loans and lease financing
|
124 | (44 | ) | (38 | ) | 6 | 48 | |||||||||||||
Unallocated
|
156 | (72 | ) | - | - | 84 | ||||||||||||||
Totals
|
$ | 3,198 | $ | 300 | $ | (460 | ) | $ | 126 | $ | 3,164 |
Pass –
|
A pass loan meets all of the Company’s underwriting criteria and provides adequate protection for the Bank through the paying capacity of the borrower and/or the value and marketability of the collateral.
|
Special Mention –
|
A special mention loan has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or in the Company’s credit position at some future date. Special Mention loans are not adversely classified and do not expose the Company to sufficient risk to warrant adverse classification.
|
Substandard –
|
A substandard loan is not adequately protected by the current sound worth and paying capacity of the borrower or the value of the collateral pledged, if any. Loans classified as substandard have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. Substandard loans have a high probability of payment default, or they have other well defined weaknesses, and are generally characterized by current or expected unprofitable operations, inadequate debt service coverage, inadequate liquidity, or marginal capitalization.
|
Doubtful –
|
Loans classified 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 –
|
Loans classified as loss are considered uncollectible and are of such little value that their continuance as bankable assets is not warranted. Loans classified as loss are charged off immediately.
|
Loans by Asset Quality Rating (excluding loans held for sale*)
|
Asset Quality Ratings
|
|||||||||||||||||||
(in thousands)
|
Pass
|
Special
Mention |
Substandard
|
Doubtful
|
Total
Loans |
|||||||||||||||
As of September 30, 2012:
|
||||||||||||||||||||
Construction and land development
|
$ | 9,455 | $ | 100 | $ | 585 | $ | - | $ | 10,140 | ||||||||||
Commercial real estate - owner-occupied
|
62,593 | - | 5,831 | - | 68,424 | |||||||||||||||
Commercial real estate - non-owner-occupied
|
71,595 | 2,409 | 1,178 | - | 75,182 | |||||||||||||||
Residential real estate
|
28,621 | - | 2,284 | 185 | 31,090 | |||||||||||||||
All other real estate
|
7,732 | - | 32 | - | 7,764 | |||||||||||||||
Commercial and industrial
|
34,122 | 324 | 3,765 | - | 38,211 | |||||||||||||||
Consumer and all other loans and lease financing
|
2,726 | - | - | - | 2,726 | |||||||||||||||
Total loans, net of unearned income
|
$ | 216,844 | $ | 2,833 | $ | 13,675 | $ | 185 | $ | 233,537 |
As of December 31, 2011:
|
||||||||||||||||||||
Construction and land development
|
$ | 13,931 | $ | 157 | $ | 3,359 | $ | - | $ | 17,447 | ||||||||||
Commercial real estate - owner-occupied
|
68,899 | - | 4,566 | - | 73,465 | |||||||||||||||
Commercial real estate - non-owner-occupied
|
49,139 | 5,154 | 5,116 | - | 59,409 | |||||||||||||||
Residential real estate
|
27,672 | 491 | 3,365 | - | 31,528 | |||||||||||||||
All other real estate
|
1,895 | 138 | - | - | 2,033 | |||||||||||||||
Commercial and industrial
|
32,154 | 250 | 6,841 | 88 | 39,333 | |||||||||||||||
Consumer and all other loans and lease financing
|
6,734 | - | - | - | 6,734 | |||||||||||||||
Total loans, net of unearned income
|
$ | 200,424 | $ | 6,190 | $ | 23,247 | $ | 88 | $ | 229,949 |
(in thousands) | ||||||||||||||||||||||||||||||||
Commercial Real Estate | Consumer and All | |||||||||||||||||||||||||||||||
Construction and Land Development |
Owner-Occupied
|
Non-Owner-Occupied | Residential Real Estate | All Other Real Estate | Commercial and Industrial | Other Loans and Leases | Total Loans | |||||||||||||||||||||||||
As of September 30, 2012:
|
||||||||||||||||||||||||||||||||
Recorded Balance of Loans Past Due:
|
||||||||||||||||||||||||||||||||
30-59 Days
|
$ | - | $ | 59 | $ | - | $ | 158 | $ | - | $ | 427 | $ | 174 | $ | 818 | ||||||||||||||||
60-89 Days
|
268 | 1,000 | - | - | - | 57 | - | 1,325 | ||||||||||||||||||||||||
90+ Days
|
- | 771 | - | 185 | - | 265 | - | 1,221 | ||||||||||||||||||||||||
Total Past Due
|
268 | 1,830 | - | 343 | - | 749 | 174 | 3,364 | ||||||||||||||||||||||||
Loans in Current Payment Status
|
9,872 | 66,594 | 75,182 | 30,747 | 7,764 | 37,462 | 2,552 | 230,173 | ||||||||||||||||||||||||
Total Loans
|
$ | 10,140 | $ | 68,424 | $ | 75,182 | $ | 31,090 | $ | 7,764 | $ | 38,211 | $ | 2,726 | $ | 233,537 | ||||||||||||||||
Loans 90+ Days Past Due and Accruing1
|
$ | - | $ | - | $ | - | $ | - | $ | - | $ | 120 | $ | 7 | $ | 127 | ||||||||||||||||
Accruing Troubled Debt Restructurings
|
- | - | - | - | - | 711 | - | 711 | ||||||||||||||||||||||||
Loans in Non-accrual Status
|
317 | 2,267 | 866 | 851 | 32 | 1,608 | - | 5,941 |
As of December 31, 2011:
|
||||||||||||||||||||||||||||||||
Recorded Balance of Loans Past Due:
|
||||||||||||||||||||||||||||||||
30-59 Days
|
$ | 492 | $ | 594 | $ | - | $ | - | $ | - | $ | 549 | $ | - | $ | 1,635 | ||||||||||||||||
60-89 Days
|
- | - | - | 423 | - | 220 | - | 643 | ||||||||||||||||||||||||
90+ Days
|
1,323 | 1,033 | 21 | 147 | - | 627 | - | 3,151 | ||||||||||||||||||||||||
Total Past Due
|
1,815 | 1,627 | 21 | 570 | - | 1,396 | - | 5,429 | ||||||||||||||||||||||||
Loans in Current Payment Status
|
15,632 | 71,838 | 59,388 | 30,958 | 2,033 | 37,937 | 6,734 | 224,520 | ||||||||||||||||||||||||
Total Loans
|
$ | 17,447 | $ | 73,465 | $ | 59,409 | $ | 31,528 | $ | 2,033 | $ | 39,333 | $ | 6,734 | $ | 229,949 | ||||||||||||||||
Loans 90+ Days Past Due and Accruing1
|
$ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||
Accruing Troubled Debt Restructurings
|
- | - | - | - | - | - | - | - | ||||||||||||||||||||||||
Loans in Non-accrual Status
|
2,031 | 1,429 | 122 | 1,296 | - | 2,107 | - | 6,985 |
(in thousands)
|
||||||||||||||||||||||||||||||||||||
Commercial Real Estate | Consumer and All | |||||||||||||||||||||||||||||||||||
Construction and Land Development | Owner-Occupied | Non-Owner-Occupied | Residential Real Estate | All Other Real Estate | Commercial and Industrial | Other Loans and Leases | Unallocated | Total Loans | ||||||||||||||||||||||||||||
Loans Held for Investment as of September 30, 2012:
|
||||||||||||||||||||||||||||||||||||
Recorded Investment:
|
||||||||||||||||||||||||||||||||||||
Impaired Loans With an Allowance Recorded
|
$ | 214 | $ | - | $ | 765 | $ | 897 | $ | - | $ | 293 | $ | - | $ | 2,169 | ||||||||||||||||||||
Impaired Loans With No Allowance Recorded
|
372 | 1,893 | - | - | - | 823 | - | 3,088 | ||||||||||||||||||||||||||||
Total Loans Individually Evaluated For Impairment
|
586 | 1,893 | 765 | 897 | - | 1,116 | - | 5,257 | ||||||||||||||||||||||||||||
Loans Collectively Evaluated For Impairment
|
7,079 | 49,524 | 62,865 | 25,655 | 7,764 | 35,964 | 2,543 | 191,394 | ||||||||||||||||||||||||||||
Loans Acquired With Deteriorated Credit Quality
|
2,475 | 17,007 | 11,552 | 4,538 | - | 1,131 | 183 | 36,886 | ||||||||||||||||||||||||||||
Total Loans Held for Investment
|
$ | 10,140 | $ | 68,424 | $ | 75,182 | $ | 31,090 | $ | 7,764 | $ | 38,211 | $ | 2,726 | $ | 233,537 | ||||||||||||||||||||
Unpaid Principal Balance:
|
||||||||||||||||||||||||||||||||||||
Impaired Loans With An Allowance Recorded
|
$ | 223 | $ | - | $ | 765 | $ | 901 | $ | - | $ | 120 | $ | - | $ | 2,009 | ||||||||||||||||||||
Impaired Loans With No Allowance Recorded
|
378 | 2,025 | - | - | - | 817 | - | 3,220 | ||||||||||||||||||||||||||||
Total Loans Individually Evaluated For Impairment
|
601 | 2,025 | 765 | 901 | - | 937 | - | 5,229 | ||||||||||||||||||||||||||||
Loans Collectively Evaluated For Impairment
|
7,079 | 49,524 | 62,865 | 25,655 | 7,764 | 35,964 | 2,543 | 191,394 | ||||||||||||||||||||||||||||
Loans Acquired With Deteriorated Credit Quality
|
6,288 | 18,749 | 13,251 | 6,498 | - | 2,914 | 187 | 47,887 | ||||||||||||||||||||||||||||
Total Loans Held for Investment
|
$ | 13,968 | $ | 70,298 | $ | 76,881 | $ | 33,054 | $ | 7,764 | $ | 39,815 | $ | 2,730 | $ | 244,510 | ||||||||||||||||||||
Related Allowance for Loan and Lease Losses:
|
||||||||||||||||||||||||||||||||||||
Impaired Loans With An Allowance Recorded
|
$ | 86 | $ | - | $ | 79 | $ | 213 | $ | - | $ | 126 | $ | - | $ | 504 | ||||||||||||||||||||
Impaired Loans With No Allowance Recorded
|
- | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||
Total Loans Individually Evaluated For Impairment
|
86 | - | 79 | 213 | - | 126 | - | 504 | ||||||||||||||||||||||||||||
Loans Collectively Evaluated For Impairment
|
183 | 618 | 877 | 599 | 39 | 1,154 | 111 | $ | 15 | 3,596 | ||||||||||||||||||||||||||
Loans Acquired With Deteriorated Credit Quality
|
- | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||
Total Loans Held for Investment
|
$ | 269 | $ | 618 | $ | 956 | $ | 812 | $ | 39 | $ | 1,280 | $ | 111 | $ | 15 | $ | 4,100 | ||||||||||||||||||
For the Nine Months Ended September 30, 2012:
|
||||||||||||||||||||||||||||||||||||
Average Recorded Investment in Impaired Loans:
|
||||||||||||||||||||||||||||||||||||
Impaired Loans With An Allowance Recorded
|
$ | 103 | $ | 145 | $ | 191 | $ | 318 | $ | - | $ | 366 | $ | - | $ | 1,123 | ||||||||||||||||||||
Impaired Loans With No Allowance Recorded
|
229 | 1,447 | - | - | - | 558 | - | 2,234 | ||||||||||||||||||||||||||||
Total Loans Individually Evaluated For Impairment
|
$ | 332 | $ | 1,592 | $ | 191 | $ | 318 | $ | - | $ | 924 | $ | - | $ | 3,357 | ||||||||||||||||||||
Interest Income Recognized on Impaired Loans:
|
||||||||||||||||||||||||||||||||||||
Impaired Loans With An Allowance Recorded
|
$ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||||||
Impaired Loans With No Allowance Recorded
|
13 | - | - | 38 | - | 6 | - | 57 | ||||||||||||||||||||||||||||
Total Loans Individually Evaluated For Impairment
|
$ | 13 | $ | - | $ | - | $ | 38 | $ | - | $ | 6 | $ | - | $ | 57 |
(in thousands)
|
Commercial Real Estate | Consumer and All | ||||||||||||||||||||||||||||||||||
Construction and Land Development | Owner-Occupied | Non-Owner-Occupied | Residential Real Estate | All Other Real Estate | Commercial and Industrial | Other Loans and Leases | Unallocated | Total Loans | ||||||||||||||||||||||||||||
Loans Held for Investment as of December 31, 2011:
|
||||||||||||||||||||||||||||||||||||
Recorded Investment:
|
||||||||||||||||||||||||||||||||||||
Impaired Loans With an Allowance Recorded
|
$ | - | $ | - | $ | - | $ | - | $ | - | $ | 396 | $ | - | $ | 396 | ||||||||||||||||||||
Impaired Loans With No Allowance Recorded
|
- | 1,028 | - | - | - | 423 | - | 1,451 | ||||||||||||||||||||||||||||
Total Loans Individually Evaluated For Impairment
|
- | 1,028 | - | - | - | 819 | - | 1,847 | ||||||||||||||||||||||||||||
Loans Collectively Evaluated For Impairment
|
11,617 | 57,980 | 42,406 | 27,103 | 2,033 | 34,519 | 6,547 | 182,205 | ||||||||||||||||||||||||||||
Loans Acquired With Deteriorated Credit Quality
|
5,830 | 14,457 | 17,003 | 4,425 | - | 3,995 | 187 | 45,897 | ||||||||||||||||||||||||||||
Total Loans Held for Investment
|
$ | 17,447 | $ | 73,465 | $ | 59,409 | $ | 31,528 | $ | 2,033 | $ | 39,333 | $ | 6,734 | $ | 229,949 | ||||||||||||||||||||
Unpaid Principal Balance:
|
||||||||||||||||||||||||||||||||||||
Impaired Loans With An Allowance Recorded
|
$ | - | $ | - | $ | - | $ | - | $ | - | $ | 443 | $ | - | $ | 443 | ||||||||||||||||||||
Impaired Loans With No Allowance Recorded
|
- | 1,045 | - | - | - | 518 | - | 1,563 | ||||||||||||||||||||||||||||
Total Loans Individually Evaluated For Impairment
|
- | 1,045 | - | - | - | 961 | - | 2,006 | ||||||||||||||||||||||||||||
Loans Collectively Evaluated For Impairment
|
11,617 | 57,980 | 42,406 | 27,103 | 2,033 | 34,519 | 6,547 | 182,205 | ||||||||||||||||||||||||||||
Loans Acquired With Deteriorated Credit Quality
|
9,981 | 16,350 | 18,954 | 5,129 | - | 6,132 | 191 | 56,737 | ||||||||||||||||||||||||||||
Total Loans Held for Investment
|
$ | 21,598 | $ | 75,375 | $ | 61,360 | $ | 32,232 | $ | 2,033 | $ | 41,612 | $ | 6,738 | $ | 240,948 | ||||||||||||||||||||
Related Allowance for Loan and Lease Losses:
|
||||||||||||||||||||||||||||||||||||
Impaired Loans With An Allowance Recorded
|
$ | - | $ | - | $ | - | $ | - | $ | - | $ | 81 | $ | - | $ | 81 | ||||||||||||||||||||
Impaired Loans With No Allowance Recorded
|
- | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||
Total Loans Individually Evaluated For Impairment
|
- | - | - | - | - | 81 | - | 81 | ||||||||||||||||||||||||||||
Loans Collectively Evaluated For Impairment
|
157 | 253 | 675 | 640 | 4 | 1,282 | 124 | $ | 110 | 3,245 | ||||||||||||||||||||||||||
Loans Acquired With Deteriorated Credit Quality
|
- | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||
Total Loans Held for Investment
|
$ | 157 | $ | 253 | $ | 675 | $ | 640 | $ | 4 | $ | 1,363 | $ | 124 | $ | 110 | $ | 3,326 | ||||||||||||||||||
For the Year Ended December 31, 2011:
|
||||||||||||||||||||||||||||||||||||
Average Recorded Investment in Impaired Loans:
|
||||||||||||||||||||||||||||||||||||
Impaired Loans With An Allowance Recorded
|
$ | - | $ | - | $ | - | $ | - | $ | - | $ | 224 | $ | - | $ | 224 | ||||||||||||||||||||
Impaired Loans With No Allowance Recorded
|
- | 1,011 | - | - | - | 341 | - | 1,352 | ||||||||||||||||||||||||||||
Total Loans Individually Evaluated For Impairment
|
$ | - | $ | 1,011 | $ | - | $ | - | $ | - | $ | 565 | $ | - | $ | 1,576 | ||||||||||||||||||||
Interest Income Recognized on Impaired Loans: | ||||||||||||||||||||||||||||||||||||
Impaired Loans With An Allowance Recorded
|
$ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||||||
Impaired Loans With No Allowance Recorded
|
- | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||
Total Loans Individually Evaluated For Impairment
|
$ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - |
Nine Months Ended
|
||||
(in thousands)
|
September 30,
|
|||
2012
|
||||
Balance at beginning of period
|
$ | 3,289 | ||
Measurement period adustments to Santa Lucia Bank fair values
|
(428 | ) | ||
Accretion to interest income
|
(844 | ) | ||
Loans reclassified to held for sale
|
(355 | ) | ||
Loans charged off
|
- | |||
Transfers from non-accretable discount to accretable
|
125 | |||
Balance at end of period
|
$ | 1,787 |
Shares
|
Weighted
Average |
|||||||
Outstanding January 1, 2011
|
5,748,672 | 5.00 | ||||||
Warrants granted in 2011
|
2,202,641 | $ | 4.54 | |||||
Warrants exercised in 2011
|
(660,792 | ) | 4.54 | |||||
Outstanding December 31, 2011
|
7,290,521 | $ | 4.90 | |||||
Warrants granted in 2012
|
6,659,780 | $ | 5.00 | |||||
Warrants cancelled in 2012
|
(6,541,849 | ) | 4.89 | |||||
Warrants exercised in 2012
|
(100,000 | ) | 5.00 | |||||
Outstanding September 30, 2012
|
7,308,452 | $ | 5.00 |
(in thousands, except per share data)
|
For the Three Months
Ended September 30,
|
For the Nine Months
Ended September 30,
|
||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Net income (loss)
|
$ | 760 | $ | (1,001 | ) | $ | 451 | $ | (1,483 | ) | ||||||
Less dividends on preferred stock:
|
||||||||||||||||
Non-convertible subsidiary-issued preferred stock
|
151 | - | 500 | - | ||||||||||||
TARP preferred stock (Series D)
|
- | 64 | - | 192 | ||||||||||||
Net income allocated to all classes of preferred stock
|
151 | 64 | 500 | 192 | ||||||||||||
Net income (loss) attributable to common stock
|
$ | 609 | $ | (1,065 | ) | $ | (49 | ) | $ | (1,675 | ) | |||||
Average common shares outstanding
|
7,855,066 | 7,094,274 | 7,792,292 | 7,094,274 | ||||||||||||
Dilutive effect of outstanding stock options
|
- | - | - | - | ||||||||||||
Average common shares used for diluted EPS
|
7,855,066 | 7,094,274 | 7,792,292 | 7,094,274 | ||||||||||||
Basic earnings (loss) per common share
|
$ | 0.08 | $ | (0.15 | ) | $ | (0.01 | ) | $ | (0.24 | ) | |||||
Diluted earnings (loss) per common share
|
$ | 0.08 | $ | (0.15 | ) | $ | (0.01 | ) | $ | (0.24 | ) |
|
·
|
Level 1—Quoted prices in active markets for identical assets or liabilities
|
|
·
|
Level 2—Estimates based on significant other observable inputs that market participants would use in pricing the asset or liability
|
|
·
|
Level 3—Estimates based on significant unobservable inputs that reflect the entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability. Valuation techniques include management’s judgment, which may be a significant factor.
|
As of December 31, 2011
|
||||||||||||
Warrants Granted in
|
||||||||||||
2011
|
June 2010
|
April 2010
|
||||||||||
Outstanding common stock warrants subject to fair value accounting
|
1,541,849 | 3,000,000 | 2,000,000 | |||||||||
Warrant exercise price
|
$ | 4.54 | $ | 5.00 | $ | 5.00 | ||||||
Market price of common stock
|
$ | 3.35 | $ | 3.35 | $ | 3.35 | ||||||
Average risk-free interest rate
|
1.89 | % | 0.36 | % | 0.36 | % | ||||||
Average expected volatility
|
33.57 | % | 44.01 | % | 45.07 | % | ||||||
Average expected life (in years)
|
9.81 | 3.46 | 3.32 | |||||||||
Expected dividend yield
|
0.00 | % | 0.00 | % | 0.00 | % |
Fair Value Measurements Using | ||||||||||||||||
September 30, 2012
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Available for sale securities:
|
||||||||||||||||
U.S. Government agencies
|
$ | - | $ | 43,247 | $ | - | $ | 43,247 | ||||||||
Residential mortgage-backed securities
|
- | 70,479 | - | 70,479 | ||||||||||||
Municipal securities
|
- | 16,592 | - | 16,592 | ||||||||||||
Corporate debt securities
|
- | 3,024 | - | 3,024 | ||||||||||||
Asset-backed securities
|
- | 13,724 | - | 13,724 | ||||||||||||
Total available-for-sale securities
|
- | 147,066 | - | 147,066 | ||||||||||||
Loans held for sale
|
- | - | 3,490 | 3,490 | ||||||||||||
Warrant liability
|
- | - | - | - | ||||||||||||
Total net assets measured at fair value on a recurring basis
|
$ | - | $ | 147,066 | $ | 3,490 | $ | 150,556 |
December 31, 2011
|
||||||||||||||||
Available for sale securities:
|
||||||||||||||||
U.S. Government agencies
|
$ | - | $ | 26,417 | $ | - | $ | 26,417 | ||||||||
Residential mortgage-backed securities
|
- | 89,293 | - | 89,293 | ||||||||||||
Municipal securities
|
- | 5,057 | - | 5,057 | ||||||||||||
Corporate debt securities
|
- | 2,055 | - | 2,055 | ||||||||||||
Asset-backed securities
|
- | 5,488 | - | 5,488 | ||||||||||||
Total available-for-sale securities
|
- | 128,310 | - | 128,310 | ||||||||||||
Loans held for sale
|
- | - | 3,720 | 3,720 | ||||||||||||
Warrant liability
|
- | - | (5,184 | ) | (5,184 | ) | ||||||||||
Total net assets measured at fair value on a recurring basis
|
$ | - | $ | 128,310 | $ | (1,464 | ) | $ | 126,846 |
(in thousands) |
Fair Value Measurements Using
|
Current
Period
Gains
|
||||||||||||||||||
September 30, 2012
|
Level 1
|
Level 2
|
Level 3
|
Total
|
(Losses)
|
|||||||||||||||
Financial assets measured at fair value on a non-recurring basis:
|
||||||||||||||||||||
Impaired loans, net of specific reserves--
|
||||||||||||||||||||
Construction and land development
|
$ | - | $ | - | $ | 500 | $ | 500 | $ | (86 | ) | |||||||||
Commercial real estate - owner-occupied
|
- | - | 1,893 | 1,893 | - | |||||||||||||||
Commercial real estate - non-owner-occupied
|
- | - | 686 | 686 | (79 | ) | ||||||||||||||
Residential real estate
|
- | - | 684 | 684 | (213 | ) | ||||||||||||||
All other real estate
|
- | - | - | - | - | |||||||||||||||
Commercial and industrial
|
- | - | 990 | 990 | (60 | ) | ||||||||||||||
Consumer and all other loans and lease financing
|
- | - | - | - | - | |||||||||||||||
Total impaired loans, net of charge-offs and specific reserves
|
$ | - | $ | - | $ | 4,753 | $ | 4,753 | $ | (438 | ) | |||||||||
Non-financial assets measured at fair value on a non-recurring basis:
|
||||||||||||||||||||
Other real estate owned
|
$ | - | $ | - | $ | 1,463 | $ | 1,463 | $ | (458 | ) |
Fair Value Measurements Using
|
Full Year
Gains
|
|||||||||||||||||||
December 31, 2011
|
Level 1
|
Level 2
|
Level 3
|
Total
|
(Losses)
|
|||||||||||||||
Financial assets measured at fair value on a non-recurring basis:
|
||||||||||||||||||||
Impaired loans, net of specific reserves--
|
||||||||||||||||||||
Commercial and industrial
|
$ | - | $ | - | $ | 521 | $ | 521 | $ | (145 | ) | |||||||||
Residential real estate
|
$ | - | $ | - | $ | - | - | $ | (87 | ) | ||||||||||
Commercial real estate - non-owner-occupied
|
- | - | - | - | (116 | ) | ||||||||||||||
Construction and land development
|
- | - | - | - | (21 | ) | ||||||||||||||
Total impaired loans, net of charge-offs and specific reserves
|
$ | - | $ | - | $ | 521 | $ | 521 | $ | (369 | ) | |||||||||
Non-financial assets measured at fair value on a non-recurring basis:
|
||||||||||||||||||||
Other real estate owned
|
$ | - | $ | - | $ | 5,220 | $ | 5,220 | $ | (113 | ) |
(in thousands)
|
Level 3 Securities Available for Sale, Loans Held for Sale and Warrant Liability
|
|||||||
Nine Months Ended September 30
|
||||||||
2012
|
2011
|
|||||||
Balance at beginning of year
|
$ | (1,464 | ) | $ | 10,086 | |||
Net increase (decrease) in SBA loans held for sale
|
(115 | ) | 232 | |||||
Loans held for sale transfered into Level 3
|
4,283 | - | ||||||
Settlements - principal reductions in loans held for sale
|
(1,857 | ) | (4,252 | ) | ||||
Loan participations sold to related party
|
(1,952 | ) | - | |||||
Loans held for sale transferred to other real estate owned
|
(589 | ) | (1,069 | ) | ||||
Loans held for sale valuation reserve
|
- | (75 | ) | |||||
Cancellation of warrants accounted for as liabilities
|
5,116 | - | ||||||
Changes in fair value of warrant liability
|
68 | 1,207 | ||||||
Balance at end of period
|
$ | 3,490 | $ | 6,129 |
(in thousands)
|
September 30, 2012
|
December 31, 2011
|
||||||||||||||
Carrying Value
|
Fair Value
|
Carrying Value
|
Fair Value
|
|||||||||||||
Financial Assets:
|
||||||||||||||||
Cash and due from banks
|
$ | 21,197 | $ | 21,197 | $ | 61,621 | $ | 61,621 | ||||||||
Interest-bearing deposits in other banks
|
5,176 | 5,176 | 3,592 | 3,592 | ||||||||||||
Investment securities
|
147,066 | 147,066 | 128,310 | 128,310 | ||||||||||||
Loans held for sale
|
3,490 | 3,490 | 3,720 | 3,720 | ||||||||||||
Loans, net of allowance for loan and lease losses
|
229,437 | 225,338 | 226,623 | 224,721 | ||||||||||||
Federal Home Loan Bank and other stocks
|
6,699 | 6,699 | 3,926 | 3,926 | ||||||||||||
Accrued interest receivable
|
1,353 | 1,353 | 1,450 | 1,450 | ||||||||||||
Financial Liabilities:
|
||||||||||||||||
Deposits
|
389,408 | 389,641 | 410,574 | 411,323 | ||||||||||||
Other borrowings
|
3,800 | 3,800 | - | - | ||||||||||||
Junior subordinated debt securities
|
5,576 | 4,188 | 5,491 | 4,527 | ||||||||||||
Accrued interest payable
|
140 | 140 | 330 | 330 | ||||||||||||
Warrant liability
|
- | - | 5,184 | 5,184 |
Recognized amounts of identifiable assets acquired and liabilities assumed:
|
||||
Financial assets--
|
||||
Cash and cash equivalents
|
$ | 53,998 | ||
Investment securities
|
21,487 | |||
Loans
|
122,374 | |||
Federal Home Loan Bank and other stocks
|
1,574 | |||
Company-owned life insurance
|
4,690 | |||
Other financial assets
|
1,024 | |||
Total financial assets
|
205,147 | |||
Premises and equipment
|
13,591 | |||
Other real estate owned
|
2,742 | |||
Identifiable intangible assets
|
3,237 | |||
Other assets
|
289 | |||
Total assets
|
$ | 225,006 | ||
Financial liabilities:
|
||||
Deposits
|
(220,102 | ) | ||
Junior subordinated debt securities
|
(2,380 | ) | ||
Other financial liabilities
|
(162 | ) | ||
Total financial liabilities
|
(222,644 | ) | ||
Other liabilities
|
(325 | ) | ||
Total liabilities
|
$ | (222,969 | ) | |
Identifiable net assets acquired / net contribution from shareholder
|
$ | 2,037 |
Three Months Ended
|
Nine Months Ended
|
|||||||
September 30,
|
September 30,
|
|||||||
(in thousands)
|
2011
|
2011
|
||||||
Interest income
|
$ | 5,564 | $ | 16,919 | ||||
Non-interest income
|
790 | 2,787 | ||||||
Net (loss)
|
(577 | ) | (756 | ) | ||||
Basic and diluted loss per share
|
$ | (0.12 | ) | $ | (0.21 | ) |
|
·
|
The Company earned $760 thousand for the third quarter of 2012, as compared with a net loss of $(1,001) thousand for the third quarter of 2011. Net income applicable to common stock was $609 thousand in the most recent quarter, as compared to a net loss applicable to common stock of $(1,065) thousand for the same period in 2011.
|
|
·
|
For the first nine months of 2012 the Company earned $451 thousand, as compared with a net loss of $(1,483) thousand for the first nine months of 2011. Net loss applicable to common stock was $(49) thousand in the first nine months of 2012, as compared to a net loss applicable to common stock of $(1,675) thousand for the same period in 2011.
|
|
·
|
A $225 thousand provision for loan and lease losses was recorded in the third quarter of 2012, and $675 thousand for the nine months. For the third quarter and first nine months of 2011 the Company recorded a $300 thousand provision for loan and lease losses.
|
|
·
|
Net interest income for the three-month period ended September 30, 2012, was $4.150 million, an increase of $2.217 million from the same period in 2011. For the nine months, net interest income was $13.450 million, as compared to $5.565 million for the first nine months of 2011. The increase in net interest income was primarily due to the acquisition of Santa Lucia Bank in the fourth quarter of 2011.
|
|
·
|
The net interest margin (net interest income as a percentage of average interest earning assets) increased by 50 basis points, to 3.99%, for the three-month period ended September 30, 2012, as compared to the same period in 2011. For the nine month periods, the net interest margin increased by 80 basis points, from 3.47% in 2011 to 4.27% in the first nine months of 2012.
|
|
·
|
For the three months ended September 30, 2012, non-interest income increased by $624 thousand from the same period in 2011. For the nine months, non-interest income increased by $178 thousand. These increases were primarily from gains on the disposition of loans held for sale and on sales of securities, which were partially offset by decreased income from changes in the fair value of warrant liability
|
|
·
|
Non-interest expense increased by $1.156 million for the third quarter of 2012, as compared to the same quarter in 2011. Principal factors relating to the increase were overall increases in salaries and benefits and other operating costs in 2012 with an asset size approximately double that of a year earlier, additional officers hired over the past year in preparation for planned growth, additional software and network management costs related to integrating Santa Lucia Bank, and amortization of the core deposit intangible asset.
|
|
·
|
Total assets decreased by $20.0 million (4.3 %) from December 31, 2011 to September 30, 2012. A $21.2 million decrease in deposits, due to a significant number of higher-cost certificates of deposits maturing and not rolling over, combined with an $18.8 million increase in securities, contributed to a $40.4 million decrease in cash over the nine-month period.
|
|
·
|
Non-performing assets decreased from $13.6 million as of December 31, 2011 to $9.8 million on September 30, 2012, primarily due to sales of foreclosed real estate.
|
(Dollars in thousands)
|
||||||||||||||||||||||||
For the Three Months Ended
|
||||||||||||||||||||||||
September 30, 2012
|
September 30, 2011
|
|||||||||||||||||||||||
Average
Balance |
Interest
|
Average
Rate
|
Average
Balance |
Interest
|
Average
Rate |
|||||||||||||||||||
ASSETS
|
||||||||||||||||||||||||
Interest-earning assets:
|
||||||||||||||||||||||||
Loans, net of unearned income*
|
$ | 223,299 | $ | 3,738 | 6.66 | % * | $ | 119,026 | $ | 1,785 | 5.95 | % * | ||||||||||||
Investment securities*
|
166,351 | 696 | 1.67 | % * | 89,818 | 470 | 2.07 | % * | ||||||||||||||||
Other interest income
|
24,076 | 18 | 0.29 | % | 10,858 | 6 | 0.20 | % | ||||||||||||||||
Total interest-earning assets / interest income
|
413,726 | 4,452 | 4.28 | % | 219,702 | 2,261 | 4.08 | % | ||||||||||||||||
Non-interest-earning assets:
|
||||||||||||||||||||||||
Allowance for loan losses
|
(3,949 | ) | (3,124 | ) | ||||||||||||||||||||
Cash and due from banks
|
6,887 | 1,666 | ||||||||||||||||||||||
Premises and equipment
|
16,080 | 3,101 | ||||||||||||||||||||||
Other assets
|
16,025 | 7,141 | ||||||||||||||||||||||
Total assets
|
$ | 448,769 | $ | 228,486 | ||||||||||||||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
||||||||||||||||||||||||
Interest-bearing liabilities:
|
||||||||||||||||||||||||
Interest-bearing deposits:
|
||||||||||||||||||||||||
Transaction accounts
|
$ | 27,142 | $ | 10 | 0.15 | % | $ | 12,029 | $ | 14 | 0.45 | % | ||||||||||||
Savings and Money Market deposit accounts
|
128,308 | 60 | 0.19 | % | 57,606 | 72 | 0.50 | % | ||||||||||||||||
Certificates of deposit
|
115,881 | 150 | 0.51 | % | 86,986 | 217 | 0.99 | % | ||||||||||||||||
Total interest-bearing deposits
|
271,331 | 220 | 0.32 | % | 156,621 | 303 | 0.77 | % | ||||||||||||||||
Federal Home Loan Bank advances
|
2,495 | 1 | 0.23 | % | 22 | - | 0.11 | % | ||||||||||||||||
Trust preferred securities
|
5,559 | 81 | 5.76 | % | 3,093 | 25 | 3.24 | % | ||||||||||||||||
Total borrowed funds
|
8,054 | 82 | 4.05 | % | 3,115 | 25 | 3.22 | % | ||||||||||||||||
Total interest-bearing liabilities / interest expense
|
279,385 | 302 | 0.43 | % | 159,736 | 328 | 0.81 | % | ||||||||||||||||
Non-interest-bearing liabilities:
|
||||||||||||||||||||||||
Non-interest-bearing deposits
|
124,080 | 28,880 | ||||||||||||||||||||||
Other liabilities
|
9,522 | 5,393 | ||||||||||||||||||||||
Total liabilities
|
412,987 | 194,009 | ||||||||||||||||||||||
Shareholders' equity
|
35,782 | 34,477 | ||||||||||||||||||||||
Total liabilities and shareholders' equity
|
$ | 448,769 | $ | 228,486 | ||||||||||||||||||||
Net interest-rate spread
|
3.85 | % | 3.27 | % | ||||||||||||||||||||
Impact of non-interest-bearing sources and other changes in balance sheet composition
|
0.14 | % | 0.22 | % | ||||||||||||||||||||
Net interest income / margin on earning assets
|
$ | 4,150 | 3.99 | % ** | $ | 1,933 | 3.49 | % ** |
(Dollars in thousands)
|
||||||||||||||||||||||||
For the Nine Months Ended
|
||||||||||||||||||||||||
September 30, 2012
|
September 30, 2011
|
|||||||||||||||||||||||
Average
Balance |
Interest
|
Average
Rate |
Average
Balance |
Interest
|
Average
Rate |
|||||||||||||||||||
ASSETS
|
||||||||||||||||||||||||
Interest-earning assets:
|
||||||||||||||||||||||||
Loans, net of unearned income*
|
$ | 228,782 | $ | 12,389 | 7.23 | % * | $ | 118,740 | $ | 5,271 | 5.94 | % * | ||||||||||||
Investment securities*
|
151,103 | 2,035 | 1.80 | % * | 82,725 | 1,350 | 2.18 | % * | ||||||||||||||||
Other interest income
|
40,467 | 85 | 0.28 | % | 12,733 | 22 | 0.23 | % | ||||||||||||||||
Total interest-earning assets / interest income
|
420,352 | 14,509 | 4.61 | % | 214,198 | 6,643 | 4.15 | % | ||||||||||||||||
Non-interest-earning assets:
|
||||||||||||||||||||||||
Allowance for loan losses
|
(3,678 | ) | (3,200 | ) | ||||||||||||||||||||
Cash and due from banks
|
3,986 | 1,608 | ||||||||||||||||||||||
Premises and equipment
|
15,892 | 3,160 | ||||||||||||||||||||||
Other assets
|
16,642 | 7,696 | ||||||||||||||||||||||
Total assets
|
$ | 453,194 | $ | 223,462 | ||||||||||||||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
||||||||||||||||||||||||
Interest-bearing liabilities:
|
||||||||||||||||||||||||
Interest-bearing deposits:
|
||||||||||||||||||||||||
Interest-bearing demand accounts
|
$ | 27,084 | $ | 32 | 0.16 | % | $ | 11,613 | $ | 52 | 0.60 | % | ||||||||||||
Savings and Money Market deposit accounts
|
128,817 | 180 | 0.19 | % | 54,714 | 253 | 0.62 | % | ||||||||||||||||
Certificates of deposit
|
128,694 | 601 | 0.62 | % | 86,986 | 693 | 1.07 | % | ||||||||||||||||
Total interest-bearing deposits
|
284,595 | 813 | 0.38 | % | 153,313 | 998 | 0.87 | % | ||||||||||||||||
Other short-term borrowings
|
4 | - | 1.09 | % | 127 | 4 | 4.75 | % | ||||||||||||||||
Federal Home Loan Bank advances
|
1,343 | 3 | 0.24 | % | 7 | - | 0.11 | % | ||||||||||||||||
Trust preferred securities
|
5,531 | 243 | 5.87 | % | 3,093 | 76 | 3.27 | % | ||||||||||||||||
Total borrowed funds
|
6,878 | 246 | 4.77 | % | 3,227 | 80 | 3.32 | % | ||||||||||||||||
Total interest-bearing liabilities / interest expense
|
291,473 | 1,059 | 0.49 | % | 156,540 | 1,078 | 0.92 | % | ||||||||||||||||
Non-interest-bearing liabilities:
|
||||||||||||||||||||||||
Non-interest-bearing deposits
|
116,772 | 27,090 | ||||||||||||||||||||||
Other liabilities
|
11,807 | 5,594 | ||||||||||||||||||||||
Total liabilities
|
420,052 | 189,224 | ||||||||||||||||||||||
Shareholders' equity
|
33,142 | 34,238 | ||||||||||||||||||||||
Total liabilities and shareholders' equity
|
$ | 453,194 | $ | 223,462 | ||||||||||||||||||||
Net interest-rate spread
|
4.12 | % | 3.23 | % | ||||||||||||||||||||
Impact of non-interest-bearing sources and other changes in balance sheet composition
|
0.15 | % | 0.24 | % | ||||||||||||||||||||
Net interest income / margin on earning assets
|
$ | 13,450 | 4.27 | % ** | $ | 5,565 | 3.47 | % ** |
(In thousands) |
Three Months Ended September 30, 2012
Compared to 2011 |
|||||||||||
Increase (Decrease)
in interest income and expense |
||||||||||||
Volume
|
Rate
|
Total
|
||||||||||
Interest-earning assets:
|
||||||||||||
Loans, net of unearned income
|
$ | 1,724 | $ | 229 | $ | 1,953 | ||||||
Investment securities
|
335 | (109 | ) | 226 | ||||||||
Other interest income
|
9 | 3 | 12 | |||||||||
Total increase (decrease) in interest income
|
2,068 | 123 | 2,191 | |||||||||
Interest-bearing liabilities:
|
||||||||||||
Transaction accounts
|
9 | (13 | ) | (4 | ) | |||||||
Savings deposits
|
52 | (64 | ) | (12 | ) | |||||||
Certificates of deposit
|
58 | (125 | ) | (67 | ) | |||||||
Total interest-bearing deposits
|
119 | (202 | ) | (83 | ) | |||||||
FHLB advances
|
1 | - | 1 | |||||||||
Trust preferred securities
|
28 | 28 | 56 | |||||||||
Total borrowed funds
|
29 | 28 | 57 | |||||||||
Total increase (decrease) in interest expense
|
148 | (174 | ) | (26 | ) | |||||||
Increase (decrease) in net interest income
|
$ | 1,920 | $ | 297 | $ | 2,217 |
(In thousands)
|
||||||||||||
Nine Months Ended September 30, 2012
Compared to 2011 |
||||||||||||
Increase (Decrease)
in interest income and expense |
||||||||||||
Volume
|
Rate
|
Total
|
||||||||||
Interest-earning assets:
|
||||||||||||
Loans, net of unearned income
|
$ | 5,753 | $ | 1,365 | $ | 7,118 | ||||||
Investment securities
|
954 | (269 | ) | 685 | ||||||||
Other interest income
|
57 | 6 | 63 | |||||||||
Total increase in interest income
|
6,764 | 1,102 | 7,866 | |||||||||
Interest-bearing liabilities:
|
||||||||||||
Transaction accounts
|
36 | (56 | ) | (20 | ) | |||||||
Savings deposits
|
185 | (258 | ) | (73 | ) | |||||||
Certificates of deposit
|
259 | (351 | ) | (92 | ) | |||||||
Total interest-bearing deposits
|
480 | (665 | ) | (185 | ) | |||||||
Other short-term borrowings
|
(2 | ) | (2 | ) | (4 | ) | ||||||
FHLB advances
|
3 | - | 3 | |||||||||
Trust preferred securities
|
83 | 84 | 167 | |||||||||
Total borrowed funds
|
84 | 82 | 166 | |||||||||
Total increase (decrease) in interest expense
|
564 | (583 | ) | (19 | ) | |||||||
Increase in net interest income
|
$ | 6,200 | $ | 1,685 | $ | 7,885 |
(In thousands)
|
For the Three Months Ended September 30,
|
For the Nine Months Ended September 30,
|
||||||||||||||||||||||||||||||
$ Amount
|
Change
|
$ Amount
|
Change
|
|||||||||||||||||||||||||||||
2012
|
2011
|
$ | % | 2012 | 2011 | $ | % | |||||||||||||||||||||||||
Service charges on deposit accounts
|
$ | 236 | $ | 114 | $ | 122 | 107 | % | $ | 691 | $ | 312 | $ | 379 | 121 | % | ||||||||||||||||
Gain on sale of SBA-guaranteed loans
|
- | 31 | (31 | ) | -100 | % | 8 | 172 | (164 | ) | -95 | % | ||||||||||||||||||||
Net gains(losses) on disposition of other loans held for sale
|
685 | 209 | 476 | 228 | % | 711 | 255 | 456 | 179 | % | ||||||||||||||||||||||
Loan servicing fees, net of amortization
|
37 | 38 | (1 | ) | -3 | % | 119 | 97 | 22 | 23 | % | |||||||||||||||||||||
Gain on sale or call of available-for-sale securities
|
407 | 4 | 403 | 10075 | % | 934 | 4 | 930 | 23250 | % | ||||||||||||||||||||||
Net gains(losses) or writedowns of fixed assets or other real estate
|
(170 | ) | (94 | ) | (76 | ) |
nm
|
(458 | ) | (71 | ) | (387 | ) |
nm
|
||||||||||||||||||
Change in fair value of warrant liability
|
(11 | ) | 248 | (259 | ) | -104 | % | 68 | 1,207 | (1,139 | ) | -94 | % | |||||||||||||||||||
Other income and fees
|
128 | 138 | (10 | ) | -7 | % | 341 | 260 | 81 | 31 | % | |||||||||||||||||||||
Total non-interest income
|
$ | 1,312 | $ | 688 | $ | 624 | 91 | % | $ | 2,414 | $ | 2,236 | $ | 178 | 8 | % |
(In thousands)
|
For the Three Months Ended September 30,
|
For the Nine Months Ended September 30,
|
||||||||||||||||||||||||||||||
$ Amount
|
Change
|
$ Amount
|
Change
|
|||||||||||||||||||||||||||||
2012
|
2011
|
$ | % | 2012 | 2011 | $ | % | |||||||||||||||||||||||||
Salaries and employee benefits
|
$ | 2,237 | $ | 1,601 | $ | 636 | 40 | % | $ | 7,090 | $ | 4,364 | $ | 2,726 | 62 | % | ||||||||||||||||
Occupancy expenses
|
431 | 341 | 90 | 26 | % | 1,353 | 993 | 360 | 36 | % | ||||||||||||||||||||||
Furniture and equipment
|
162 | 120 | 42 | 35 | % | 597 | 346 | 251 | 73 | % | ||||||||||||||||||||||
Data processing
|
464 | 276 | 188 | 68 | % | 1,805 | 739 | 1,066 | 144 | % | ||||||||||||||||||||||
Professional fees
|
265 | 369 | (104 | ) | -28 | % | 1,000 | 902 | 98 | 11 | % | |||||||||||||||||||||
Marketing and business development
|
96 | 47 | 49 | 104 | % | 312 | 140 | 172 | 123 | % | ||||||||||||||||||||||
Office supplies and expenses
|
145 | 66 | 79 | 120 | % | 537 | 192 | 345 | 180 | % | ||||||||||||||||||||||
Insurance and regulatory assessments
|
162 | 86 | 76 | 88 | % | 485 | 312 | 173 | 55 | % | ||||||||||||||||||||||
Loan and lease expenses
|
56 | 42 | 14 | 33 | % | 246 | 202 | 44 | 22 | % | ||||||||||||||||||||||
Other real estate expenses
|
89 | 15 | 74 | 493 | % | 238 | 113 | 125 | 111 | % | ||||||||||||||||||||||
Provision for unfunded loan commitments
|
25 | 180 | (155 | ) | -86 | % | 25 | 180 | (155 | ) | -86 | % | ||||||||||||||||||||
Amortization of core deposit intangible asset
|
101 | - | 101 |
nm
|
303 | - | 303 |
nm
|
||||||||||||||||||||||||
Other
|
244 | 178 | 66 | 37 | % | 744 | 495 | 249 | 50 | % | ||||||||||||||||||||||
Total non-interest expense
|
$ | 4,477 | $ | 3,321 | $ | 1,156 | 35 | % | $ | 14,735 | $ | 8,978 | $ | 5,757 | 64 | % |
|
·
|
Salaries and benefits, due to employees added with the Santa Lucia acquisition, as well as additional officers hired over the past year in preparation for planned growth,
|
|
·
|
Software and network management costs, due to the integration of Santa Lucia Bank, including necessary system upgrades (included in data processing expenses in the table above), and
|
|
·
|
Overall increases in operating costs in 2012 with an asset size approximately double that of a year earlier.
|
(dollars in thousands)
|
Increase(Decrease) From Previous Quarter End
|
|||||||||||||||||||||||||||||||||||||||
September 30, 2012
|
June 30, 2012
|
March 31, 2012
|
December 31, 2011
|
September 30, 2011
|
||||||||||||||||||||||||||||||||||||
$ | % | $ | % | $ | % | $ | % | $ | % | |||||||||||||||||||||||||||||||
Total Assets
|
$ | (15,659 | ) | -3.4 | % | $ | 1,202 | 0.3 | % | $ | (5,538 | ) | -1.2 | % | $ | 228,665 | 97.5 | % | $ | 9,378 | 4.2 | % | ||||||||||||||||||
Earning Assets
|
(20,495 | ) | -4.8 | % | 1,300 | 0.3 | % | (2,210 | ) | -0.5 | % | 200,547 | 89.4 | % | 9,092 | 4.2 | % | |||||||||||||||||||||||
Loans
|
13,395 | 6.0 | % | (2,278 | ) | -1.0 | % | (7,699 | ) | -3.3 | % | 114,382 | 95.9 | % | 2,991 | 2.6 | % | |||||||||||||||||||||||
Deposits
|
(19,237 | ) | -4.7 | % | 3,365 | 0.8 | % | (5,294 | ) | -1.3 | % | 219,028 | 114.3 | % | 9,266 | 5.1 | % | |||||||||||||||||||||||
Borrowings
|
3,800 | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||
Shareholders' Equity
|
963 | 2.8 | % | 1,038 | 3.1 | % | 4,273 | 14.4 | % | (3,443 | ) | -10.4 | % | (223 | ) | -0.7 | % |
(Dollars in thousands)
|
||||||||||||||||
September 30, 2012
|
December 31, 2011
|
|||||||||||||||
Type of Loan
|
Amount
|
Percentage
|
Amount
|
Percentage
|
||||||||||||
Construction and land development
|
$ | 11,695 | 4.9 | % | $ | 18,022 | 7.6 | % | ||||||||
Commercial real estate - owner-occupied
|
69,410 | 29.3 | % | 70,153 | 30.0 | % | ||||||||||
Commercial real estate - non-owner-occupied
|
75,020 | 31.7 | % | 64,382 | 27.6 | % | ||||||||||
Residential real estate
|
32,120 | 13.6 | % | 32,609 | 14.0 | % | ||||||||||
All other real estate loans
|
7,764 | 3.3 | % | 2,321 | 1.0 | % | ||||||||||
Commercial and industrial loans
|
32,826 | 13.8 | % | 30,176 | 12.9 | % | ||||||||||
Agricultural loans
|
3,369 | 1.4 | % | 9,272 | 4.0 | % | ||||||||||
Municipal loans
|
2,352 | 1.0 | % | 2,393 | 1.0 | % | ||||||||||
Leases, net of unearned income
|
1,277 | 0.5 | % | 2,323 | 1.0 | % | ||||||||||
Consumer loans
|
1,194 | 0.5 | % | 2,018 | 0.9 | % | ||||||||||
Total loans
|
$ | 237,027 | 100.0 | % | $ | 233,669 | 100.0 | % |
(in thousands) |
September 30
2012 |
December 31
2011 |
September 30
2011 |
|||||||||
Loans in nonaccrual status:
|
||||||||||||
Nonaccrual loans held for investment
|
$ | 5,941 | $ | 6,557 | $ | 2,472 | ||||||
Nonaccrual loans held for sale**
|
1,580 | 1,997 | 4,731 | |||||||||
Loans past due 90 days or more and accruing
|
127 | - | - | |||||||||
Restructured loans in accruing status
|
711 | - | - | |||||||||
Total nonperforming loans
|
8,359 | 8,554 | 7,203 | |||||||||
Foreclosed real estate
|
1,113 | 4,626 | 1,489 | |||||||||
Total nonperforming assets
|
$ | 9,472 | $ | 13,180 | $ | 8,692 | ||||||
Real estate held by parent company
|
350 | 400 | 400 | |||||||||
Total nonperforming loans and other real estate owned
|
$ | 9,822 | $ | 13,580 | $ | 9,092 | ||||||
Allowance for loan and lease losses allocated to impaired loans
|
$ | 504 | $ | 81 | $ | 112 | ||||||
Allowance for loan and lease losses allocated to loans held for sale**
|
- | - | - | |||||||||
Allowance for loan and lease losses allocated to all other loans
|
3,596 | 3,245 | 3,052 | |||||||||
Total allowance for loan and lease losses
|
$ | 4,100 | $ | 3,326 | $ | 3,164 | ||||||
Asset quality ratios:
|
||||||||||||
Non-performing assets to total assets
|
2.14 | % | 2.84 | % | 3.70 | % | ||||||
Excluding loans held for sale**
|
1.79 | % | 2.43 | % | 1.76 | % | ||||||
Non-performing loans to total loans
|
3.53 | % | 3.66 | % | 6.04 | % | ||||||
Excluding loans held for sale**
|
2.90 | % | 2.85 | % | 2.26 | % | ||||||
Allowance for loan and lease losses to total loans
|
1.73 | % | 1.42 | % | 2.65 | % | ||||||
Excluding loans held for sale**
|
1.76 | % | 1.45 | % | 2.90 | % | ||||||
Allowance for loan and lease losses to total non-performing loans
|
49 | % | 39 | % | 44 | % | ||||||
Excluding non-performing loans held for sale**
|
60 | % | 51 | % | 128 | % |
Other Real Estate Owned | ||||
(dollars in thousands) |
Nine Months Ended
September 30, 2012 |
|||
Balance of foreclosed real estate at beginning of year, as previously reported
|
$ | 4,626 | ||
Adjustment to fair value of other real estate acquired in Santa Lucia merger
|
194 | |||
Real estate held by parent company
|
400 | |||
Total other real estate owned at beginning of year, as adjusted
|
$ | 5,220 | ||
Foreclosures during the period
|
1,461 | |||
Sales of other real estate to related party
|
(1,697 | ) | ||
Sales of other real estate to unrelated parties
|
(2,772 | ) | ||
Writedowns on other real estate, net of gains on sale
|
(749 | ) | ||
Balance of other real estate owned at end of period
|
$ | 1,463 |
(dollars in thousands) |
Three Months Ended
September 30, |
Nine Months Ended
September 30, |
||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Balance at beginning of period
|
$ | 3,781 | $ | 3,182 | $ | 3,326 | $ | 3,198 | ||||||||
Provision for loan losses
|
225 | 300 | 675 | 300 | ||||||||||||
Loans charged off
|
(22 | ) | (360 | ) | (144 | ) | (460 | ) | ||||||||
Recoveries of previous charge-offs
|
116 | 42 | 243 | 126 | ||||||||||||
Net (charge-offs) recoveries
|
94 | (318 | ) | 99 | (334 | ) | ||||||||||
Balance at end of period
|
$ | 4,100 | $ | 3,164 | $ | 4,100 | $ | 3,164 | ||||||||
Allowance for loan losses as a percentage of:
|
||||||||||||||||
Period end loans, including loan held for sale
|
1.73 | % | 2.65 | % | 1.73 | % | 2.65 | % | ||||||||
Period end loans, excluding loans held for sale*
|
1.76 | % | 2.90 | % | 1.76 | % | 2.90 | % | ||||||||
Total non-performing loans, including loans held for sale
|
49 | % | 44 | % | 49 | % | 44 | % | ||||||||
Non-performing loans, excluding loans held for sale*
|
60 | % | 128 | % | 60 | % | 128 | % | ||||||||
As a percentage of average loans (annualized):
|
||||||||||||||||
Net charge-offs (recoveries)
|
-0.17 | % | 1.07 | % | -0.06 | % | 0.38 | % | ||||||||
Provision for loan losses
|
0.40 | % | 1.01 | % | 0.39 | % | 0.34 | % | ||||||||
Total loans, including loans held for sale
|
$ | 237,027 | $ | 119,226 | $ | 237,027 | $ | 119,226 | ||||||||
Loans excluding loans held for sale
|
233,537 | 109,275 | 233,537 | 109,275 |
Capital Ratios |
Amount of Capital Required
|
|||||||||||||||||||||||
(dollars in thousands)
|
Actual
|
To Be
Well-Capitalized |
To Be Adequately
Capitalized |
|||||||||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||||||||||||
As of September 30, 2012:
|
||||||||||||||||||||||||
Total Capital (to Risk-Weighted Assets)
|
$ | 39,809 | 13.74 | % | $ | 28,963 | 10.0 | % | $ | 23,171 | 8.0 | % | ||||||||||||
Tier 1 Capital (to Risk-Weighted Assets)
|
$ | 36,178 | 12.49 | % | $ | 17,378 | 6.0 | % | $ | 11,585 | 4.0 | % | ||||||||||||
Tier 1 Capital (to Average Assets)
|
$ | 36,178 | 8.23 | % | $ | 21,976 | 5.0 | % | $ | 17,581 | 4.0 | % |
As of December 31, 2011:
|
||||||||||||||||||||||||
Total Capital (to Risk-Weighted Assets)
|
$ | 36,437 | 13.25 | % | $ | 27,491 | 10.0 | % | $ | 21,992 | 8.0 | % | ||||||||||||
Tier 1 Capital (to Risk-Weighted Assets)
|
$ | 32,997 | 12.00 | % | $ | 16,494 | 6.0 | % | $ | 10,996 | 4.0 | % | ||||||||||||
Tier 1 Capital (to Average Assets)
|
$ | 32,997 | 8.19 | % | $ | 20,145 | 5.0 | % | $ | 16,116 | 4.0 | % |
(in thousands)
|
September 30,
|
December 31,
|
September 30,
|
|||||||||
2012
|
2011
|
2011
|
||||||||||
Commitments to Extend Credit
|
$ | 41,334 | $ | 38,702 | $ | 20,547 | ||||||
Standby Letters of Credit
|
3,179 | 2,444 | 461 | |||||||||
|
$ | 44,513 | $ | 41,146 | $ | 21,008 |
Exhibit #
|
||
2.1
|
Plan of Reorganization and Agreement of Merger dated as of October 4, 2000 (A)
|
|
3.1
|
Restated Articles of Incorporation (I)
|
|
3.2
|
Certificate of Amendment to Articles of Incorporation (L)
|
|
3.3
|
Certificate of Amendment to Articles of Incorporation (Y)
|
|
3.4
|
Amended and Restated Bylaws (DD)
|
|
4.1
|
Certificate of Determination for Series A Non-Voting Preferred Stock (B)
|
|
4.2
|
Certificate of Determination for Series B Non-Voting Preferred Stock (B)
|
|
4.3
|
Certificate of Determination for Series C Non-Voting Preferred Stock (D)
|
|
4.4
|
Indenture dated as of October 14, 2003 by and between Registrant and Wells Fargo Bank, National Association, as trustee (E)
|
|
4.5
|
Declaration of Trust of Mission Community Capital Trust I dated October 10, 2003 (E)
|
|
4.6
|
Amended and Restated Declaration of Trust of Mission Community Capital Trust I dated October 14, 2003 by and among the Registrant, Wells Fargo Delaware Trust Company, as Trustee, and Anita M. Robinson and William C. Demmin, as Administrators (E)
|
|
4.7
|
Guarantee Agreement dated October 14, 2003 between Registrant, as Guarantor, and Wells Fargo Bank, National Association, as Guarantee Trustee (E)
|
|
4.8
|
Certificate of Determination for Series D Preferred Stock (R)
|
|
4.9
|
Form of Common Stock Purchase Warrant (Z)
|
|
4.10
|
Form of Warrant Agreement with Computershare Trust Company, N.A. for warrants issued pursuant to subscription rights (AA)
|
|
4.11
|
Form of Warrant Issued to Replace Warrants Issued in 2010 Private Placement (EE)
|
|
4.12
|
Form of Warrant Issued to Replace Warrants Issued in 2011 Private Placement (EE)
|
|
4.13
|
Amended and Restated Declaration of Trust, dated as of April 28, 2006, of Santa Lucia Bancorp (CA) Capital Trust (FF)
|
|
4.14
|
Indenture dated as of April 28, 2006, between Wells Fargo Bank, National Association, as Trustee, and Santa Lucia Bancorp (FF)
|
|
4.15
|
First Supplemental Indenture dated as of October 21, 2011 between Wells Fargo Bank, National Association, as trustee, and Mission Community Bancorp (FF)
|
|
4.16
|
Amendment No. 1 to Warrant Agreement between the Company and Computershare Trust Company, N.A. (GG) | |
10.1
|
Purchase and Sale Agreement and Lease dated January, 1997, as amended (B)
|
|
10.2
|
Intentionally omitted
|
|
10.3
|
Lease Agreement – Paso Robles (B)
|
|
10.4
|
Lease Agreement – Arroyo Grande (B)
|
|
10.5
|
1998 Stock Option Plan, as amended (B)
|
|
10.6
|
Lease Agreement – 569 Higuera, San Luis Obispo (D)
|
|
10.7
|
Intentionally omitted
|
|
10.8
|
Lease Agreement – 3480 S. Higuera, San Luis Obispo (F)
|
|
10.9
|
Salary Protection Agreement — Mr. Pigeon (G)
|
|
10.10
|
Intentionally omitted
|
Exhibit #
|
||
10.11
|
Employment Agreement dated June 3, 2007 between Brooks Wise and Mission Community Bank (J)
|
|
10.12
|
Financial Advisory Services Agreement dated January 4, 2007 between the Company and Seapower Carpenter Capital, Inc. (K)
|
|
10.13
|
Build-to-Suit Lease Agreement between Walter Bros. Construction Co., Inc. and Mission Community Bank for property at South Higuera Street and Prado Road in San Luis Obispo, California (N)
|
|
10.14
|
Lease Agreement – 1670 South Broadway, Santa Maria (O)
|
|
10.15
|
Mission Community Bancorp 2008 Stock Incentive Plan (P)
|
|
10.16
|
Amendment No. 1 to Second Amended and Restated Employment Agreement dated December 29, 2008 by and among Mission Community Bancorp, Mission Community Bank, and Anita M. Robinson (Q)
|
|
10.17
|
Amendment No. 1 to Employment Agreement dated December 29, 2008 by and among Mission Community Bancorp, Mission Community Bank, and Brooks W. Wise (Q)
|
|
10.18
|
Amended and Restated Salary Protection Agreement dated December 29, 2008 by and between Mission Community Bank and Ronald B. Pigeon (Q)
|
|
10.19
|
Letter Agreement dated January 9, 2009 between Mission Community Bancorp and the United States Department of Treasury, which includes the Securities Purchase Agreement—Standard Terms attached thereto, with respect to the issuance and sale of the Series D Preferred Stock (R)
|
|
10.20
|
Side Letter Agreement dated January 9, 2009 amending the Stock Purchase Agreement between Mission Community Bancorp and the Department of the Treasury (R)
|
|
10.21
|
Side Letter Agreement dated January 9, 2009 between Mission Community Bancorp and The Department of the Treasury regarding maintenance of two open seats on the Board of Directors (R)
|
|
10.22
|
Side Letter Agreement dated January 9, 2009 between Mission Community Bancorp and The Department of the Treasury regarding CDFI status (R)
|
|
10.23
|
Securities Purchase Agreement dated December 22, 2009 between the Company and Carpenter Fund Manager GP, LLC (“Securities Purchase Agreement”) (U)
|
|
10.24
|
Amendment No. 1 to Securities Purchase Agreement dated March 17, 2010 (V)
|
|
10.25
|
Amendment No. 2 to Employment Agreement of Brooks Wise dated March 22, 2010 (W)
|
|
10.26
|
Amendment No. 2 to Securities Purchase Agreement dated March 17, 2010 (X)
|
|
10.27
|
Employment Agreement dated July 1, 2010 between James W. Lokey and Mission Community Bancorp (Y)
|
|
10.28
|
Agreement and Plan of Merger dated as of June 24, 2011 by and among Carpenter Fund Manager GP, LLC; Mission Community Bancorp; Mission Community Bank; Santa Lucia Bancorp and Santa Lucia Bank (BB)
|
|
10.29
|
2011 Equity Incentive Plan (CC)
|
|
31.1
|
Certification of CEO pursuant to Section 302 of Sarbanes Oxley Act
|
|
31.2
|
Certification of CFO pursuant to Section 302 of Sarbanes Oxley Act
|
|
32.1
|
Certification of CEO pursuant to Section 906 of Sarbanes Oxley Act
|
|
32.2
|
Certification of CFO pursuant to Section 906 of Sarbanes Oxley Act
|
|
101
|
Interactive Data Files
|
|
(A) Included in the Company’s Form 8-K filed on December 18, 2000, and incorporated by reference herein.
(B) Included in the Company’s Form 10-KSB filed on April 2, 2001, and incorporated by reference herein.
(C) Included in the Company’s Form 10-QSB filed August 12, 2002, and incorporated by reference herein.
(D) Included in the Company’s Form 10-QSB filed on November 12, 2002, and incorporated by reference herein.
(E) Included in the Company’s Form 8-K filed on October 21, 2003, and incorporated by reference herein.
(F) Included in the Company’s Form 10-QSB filed on August 10, 2004, and incorporated by reference herein.
(G) Included in the Company’s Form 8-K filed on January 19, 2005, and incorporated by reference herein.
(H) Intentionally omitted
|
(I) Included in the Company’s Form 10-QSB filed on August 14, 2006, and incorporated by reference herein.
(J) Included in the Company’s Form 8-K filed on June 13, 2007, and incorporated by reference herein.
(K) Included in the Form SB-2 Registration Statement of the Company filed on June 13, 2007, and incorporated by reference herein.
(L) Included in Pre-Effective Amendment No. 1 to the Form SB-2 Registration Statement of the Company filed on July 24, 2007, and incorporated by reference herein.
(M) Included in the Company’s Form 8-K filed on August 14, 2007, and incorporated by reference herein.
(N) Included in the Company’s Form 8-K filed on October 23, 2007, and incorporated by reference herein.
(O) Included in the Company’s Form 10-KSB filed on March 28, 2008, and incorporated by reference herein.
(P) Included in the Company’s Form 10-Q filed on May 15, 2008, and incorporated by reference herein.
(Q)Included in the Company’s Form 8-K filed on December 30, 2008, and incorporated by reference herein.
(R)Included in the Company’s Form 8-K filed on January 14, 2009, and incorporated by reference herein.
(S)Included in the Company’s Form 10-Q filed on August 14, 2009, and incorporated by reference herein.
(T)Included in the Company’s Form 10-K filed on March 16, 2009, and incorporated by reference herein.
(U)Included in the Company’s From 8-K filed on December 24, 2009, and incorporated by reference herein.
(V)Included in the Company’s Form 8-K filed on March 22, 2010, and incorporated by reference herein.
(W)Included in the Company’s Form 8-K filed on March 26, 2010, and incorporated by reference herein.
(X)Included in the Company’s Form 8-K filed on June 1, 2010, and incorporated by reference herein.
(Y)Included in the Company’s Form 8-K filed on August 2, 2010, and incorporated by reference herein.
(Z)Included in the Company’s Form S-1 Registration Statement filed on August 31, 2010, and incorporated by reference herein.
(AA)Included in Amendment No. 1 to the Company’s Form S-1 Registration Statement filed on October 1, 2010, and incorporated by reference herein.
(BB)Included in the Company’s Form 8-K filed on June 27, 2011, and incorporated by reference herein.
(CC)Included in the Company’s Form 8-K filed on September 30, 2011, and incorporated by reference herein.
(DD)Included in the Company's Form 8-K filed on March 29, 2012, and incorporated herein by reference.
(EE)Included in the Company's Form 8-K on filed on March 26, 2012, and incorporated herein by reference.
(FF)Included in the Company's Form 8-K filed on October 27, 2011, and incorporated herein by reference.
(GG)Included in the Company's Form 8-K filed on September 7, 2012, and incorporated herein by reference.
|
(1)
|
I have reviewed this Form 10-Q of Mission Community Bancorp;
|
(2)
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
(3)
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this report;
|
(4)
|
The issuer’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the issuer 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 issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the issuer’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 issuer’s internal control over financial reporting that occurred during the issuer’s most recent fiscal quarter (the issuer’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the issuer’s internal control over financial reporting; and
|
(5)
|
The issuer’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the issuer’s auditors and the audit committee of the issuer’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 issuer’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 issuer’s internal control over financial reporting.
|
(1)
|
I have reviewed this Form 10-Q of Mission Community Bancorp;
|
(2)
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
(3)
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this report;
|
(4)
|
The issuer’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the issuer 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 issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the issuer’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 issuer’s internal control over financial reporting that occurred during the issuer’s most recent fiscal quarter (the issuer’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the issuer’s internal control over financial reporting; and
|
(5)
|
The issuer’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the issuer’s auditors and the audit committee of the issuer’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 issuer’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 issuer’s internal control over financial reporting.
|
1.
|
This Form 10-Q for the period ended September 30, 2012, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in this Form 10-Q for the period ended September 30, 2012, fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
By: | /s/ James W. Lokey | ||
James W. Lokey
|
|||
Chairman and Chief Executive Officer
|
1.
|
This Form 10-Q for the period ended September 30, 2012, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in this Form 10-Q for the period ended September 30, 2012, fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
By:
|
/s/ Mark R. Ruh | ||
Mark R. Ruh
|
|||
Executive Vice President
|
|||
and Chief Financial Officer
|
Note 5 - Credit Quality and the Allowance for Loan and Lease Losses (Detail) - Changes in the Allowance for Loan and Lease Losses (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2012
|
Sep. 30, 2011
|
Sep. 30, 2012
|
Sep. 30, 2011
|
|
Balance at beginning of period | $ 3,781 | $ 3,182 | $ 3,326 | $ 3,198 |
Provision for loan and lease losses charged to expense | 225 | 300 | 675 | 300 |
Loans charged off | (22) | (360) | (144) | (460) |
Recoveries on loans previously charged off | 116 | 42 | 243 | 126 |
Balance at end of period | $ 4,100 | $ 3,164 | $ 4,100 | $ 3,164 |
Note 9 - Business Combination (Detail) - Identifiable Assets Acquired and Liabilities Assumed (USD $)
In Thousands, unless otherwise specified |
Sep. 30, 2012
|
---|---|
Financial assets-- | |
Cash and cash equivalents | $ 53,998 |
Investment securities | 21,487 |
Loans | 122,374 |
Federal Home Loan Bank and other stocks | 1,574 |
Company-owned life insurance | 4,690 |
Other financial assets | 1,024 |
Total financial assets | 205,147 |
Premises and equipment | 13,591 |
Other real estate owned | 2,742 |
Identifiable intangible assets | 3,237 |
Other assets | 289 |
Total assets | 225,006 |
Financial liabilities: | |
Deposits | (220,102) |
Junior subordinated debt securities | (2,380) |
Other financial liabilities | (162) |
Total financial liabilities | (222,644) |
Other liabilities | (325) |
Total liabilities | (222,969) |
Identifiable net assets acquired / net contribution from shareholder | $ 2,037 |
Note 8 - Fair Value Measurement (Detail) - Fair Value Assumptions (USD $)
|
12 Months Ended | ||||
---|---|---|---|---|---|
Oct. 22, 2021
|
Dec. 31, 2011
|
Dec. 31, 2011
2011 Warrants [Member]
|
Dec. 31, 2011
June 2010 Warrants [Member]
|
Dec. 31, 2011
April 2010 Warrants [Member]
|
|
Outstanding common stock warrants subject to fair value accounting (in Dollars) | $ 5,184,000 | $ 1,541,849 | $ 3,000,000 | $ 2,000,000 | |
Warrant exercise price (in Dollars per Item) | 4.54 | 4.54 | 5.00 | 5.00 | |
Market price of common stock (in Dollars per share) | $ 3.35 | $ 3.35 | $ 3.35 | ||
Average risk-free interest rate | 1.89% | 0.36% | 0.36% | ||
Average expected volatility | 33.57% | 44.01% | 45.07% | ||
Average expected life (in years) | 9 years 295 days | 3 years 167 days | 3 years 116 days | ||
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Note 9 - Business Combination (Detail) - Pro Forma Information For The Acquisition (USD $)
In Thousands, except Per Share data, unless otherwise specified |
3 Months Ended | 9 Months Ended |
---|---|---|
Sep. 30, 2011
|
Sep. 30, 2011
|
|
Net (loss) | $ (577) | $ (756) |
Basic and diluted loss per share (in Dollars per share) | $ (0.12) | $ (0.21) |
Interest Income [Member]
|
||
Pro Forma Revenue | 5,564 | 16,919 |
Non-Interest Income [Member]
|
||
Pro Forma Revenue | $ 790 | $ 2,787 |
Note 6 - Common and Preferred Stock and Earnings (Loss) per Share (Detail) - Activity in the Company’s Outstanding Warrants (Warrant [Member], USD $)
In Thousands, except Per Share data, unless otherwise specified |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2012
|
Dec. 31, 2011
|
|
Warrant [Member]
|
||
Outstanding January 1, 2011 | 7,290,521 | 5,748,672 |
Outstanding January 1, 2011 (in Dollars per share) | $ 4.90 | $ 5.00 |
Outstanding | 7,308,452 | 7,290,521 |
Outstanding weighted average exercise price (in Dollars per share) | $ 5.00 | $ 4.90 |
Warrants granted | 6,659,780 | 2,202,641 |
Warrants granted weighted average exercise price (in Dollars per share) | $ 5.00 | $ 4.54 |
Warrants cancelled in 2012 | (6,541,849) | |
Warrants cancelled in 2012 (in Dollars per share) | $ 4.89 | |
Warrants exercised | (100,000) | (660,792) |
Warrants exercised weighted average exercise price (in Dollars per share) | $ 5.00 | $ 4.54 |
Note 3 - Investment Securities (Detail) - Maturities of Investment Securities (USD $)
In Thousands, unless otherwise specified |
Sep. 30, 2012
|
---|---|
Amortized Cost [Member]
|
|
Within one year | $ 6,939 |
Due in one year to five years | 32,979 |
Due in five years to ten years | 39,207 |
Due in greater than ten years | 65,647 |
144,772 | |
Fair Value [Member]
|
|
Within one year | 6,963 |
Due in one year to five years | 33,034 |
Due in five years to ten years | 39,877 |
Due in greater than ten years | 67,192 |
$ 147,066 |
Note 9 - Business Combination (Tables)
|
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2012
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Acquisition, Pro Forma Information [Table Text Block] |
|
Note 8 - Fair Value Measurement (Detail) - Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis (USD $)
In Thousands, unless otherwise specified |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2012
|
Dec. 31, 2011
|
|
Impaired loans, net of specific reserves-- | ||
Current Period Gains (Losses) | $ (438) | $ (369) |
Non-financial assets measured at fair value on a non-recurring basis: | ||
Current Period Gains (Losses) | (458) | (113) |
Construction and Land Development Loans [Member] | Fair Value, Measurements, Nonrecurring [Member] | Fair Value, Inputs, Level 3 [Member]
|
||
Impaired loans, net of specific reserves-- | ||
Fair Value | 500 | |
Construction and Land Development Loans [Member] | Fair Value, Measurements, Nonrecurring [Member] | Estimate of Fair Value, Fair Value Disclosure [Member]
|
||
Impaired loans, net of specific reserves-- | ||
Fair Value | 500 | |
Construction and Land Development Loans [Member]
|
||
Impaired loans, net of specific reserves-- | ||
Current Period Gains (Losses) | (86) | (21) |
Commercial Real Estate Owner Occupied [Member] | Fair Value, Measurements, Nonrecurring [Member] | Fair Value, Inputs, Level 3 [Member]
|
||
Impaired loans, net of specific reserves-- | ||
Fair Value | 1,893 | |
Commercial Real Estate Owner Occupied [Member] | Fair Value, Measurements, Nonrecurring [Member] | Estimate of Fair Value, Fair Value Disclosure [Member]
|
||
Impaired loans, net of specific reserves-- | ||
Fair Value | 1,893 | |
Commercial Real Estate Non Owner Occupied [Member] | Fair Value, Measurements, Nonrecurring [Member] | Fair Value, Inputs, Level 1 [Member]
|
||
Impaired loans, net of specific reserves-- | ||
Fair Value | 0 | |
Commercial Real Estate Non Owner Occupied [Member] | Fair Value, Measurements, Nonrecurring [Member] | Fair Value, Inputs, Level 2 [Member]
|
||
Impaired loans, net of specific reserves-- | ||
Fair Value | 0 | |
Commercial Real Estate Non Owner Occupied [Member] | Fair Value, Measurements, Nonrecurring [Member] | Fair Value, Inputs, Level 3 [Member]
|
||
Impaired loans, net of specific reserves-- | ||
Fair Value | 686 | |
Commercial Real Estate Non Owner Occupied [Member] | Fair Value, Measurements, Nonrecurring [Member] | Estimate of Fair Value, Fair Value Disclosure [Member]
|
||
Impaired loans, net of specific reserves-- | ||
Fair Value | 686 | |
Commercial Real Estate Non Owner Occupied [Member]
|
||
Impaired loans, net of specific reserves-- | ||
Current Period Gains (Losses) | (79) | (116) |
Residential Real Estate Loans [Member] | Fair Value, Measurements, Nonrecurring [Member] | Fair Value, Inputs, Level 3 [Member]
|
||
Impaired loans, net of specific reserves-- | ||
Fair Value | 684 | |
Residential Real Estate Loans [Member] | Fair Value, Measurements, Nonrecurring [Member] | Estimate of Fair Value, Fair Value Disclosure [Member]
|
||
Impaired loans, net of specific reserves-- | ||
Fair Value | 684 | |
Residential Real Estate Loans [Member]
|
||
Impaired loans, net of specific reserves-- | ||
Current Period Gains (Losses) | (213) | (87) |
All Other Real Estate Loans [Member] | Fair Value, Measurements, Nonrecurring [Member] | Fair Value, Inputs, Level 1 [Member]
|
||
Impaired loans, net of specific reserves-- | ||
Fair Value | 0 | |
All Other Real Estate Loans [Member] | Fair Value, Measurements, Nonrecurring [Member] | Fair Value, Inputs, Level 2 [Member]
|
||
Impaired loans, net of specific reserves-- | ||
Fair Value | 0 | |
All Other Real Estate Loans [Member] | Fair Value, Measurements, Nonrecurring [Member] | Fair Value, Inputs, Level 3 [Member]
|
||
Impaired loans, net of specific reserves-- | ||
Fair Value | 0 | |
All Other Real Estate Loans [Member] | Fair Value, Measurements, Nonrecurring [Member] | Estimate of Fair Value, Fair Value Disclosure [Member]
|
||
Impaired loans, net of specific reserves-- | ||
Fair Value | 0 | |
All Other Real Estate Loans [Member]
|
||
Impaired loans, net of specific reserves-- | ||
Current Period Gains (Losses) | 0 | |
Commercial and Industrial Loans [Member] | Fair Value, Measurements, Nonrecurring [Member] | Fair Value, Inputs, Level 3 [Member]
|
||
Impaired loans, net of specific reserves-- | ||
Fair Value | 990 | 521 |
Commercial and Industrial Loans [Member] | Fair Value, Measurements, Nonrecurring [Member] | Estimate of Fair Value, Fair Value Disclosure [Member]
|
||
Impaired loans, net of specific reserves-- | ||
Fair Value | 990 | 521 |
Commercial and Industrial Loans [Member]
|
||
Impaired loans, net of specific reserves-- | ||
Current Period Gains (Losses) | (60) | (145) |
Fair Value, Measurements, Nonrecurring [Member] | Fair Value, Inputs, Level 3 [Member]
|
||
Impaired loans, net of specific reserves-- | ||
Fair Value | 4,753 | 521 |
Non-financial assets measured at fair value on a non-recurring basis: | ||
Fair Value | 1,463 | 5,220 |
Fair Value, Measurements, Nonrecurring [Member] | Estimate of Fair Value, Fair Value Disclosure [Member]
|
||
Impaired loans, net of specific reserves-- | ||
Fair Value | 4,753 | 521 |
Non-financial assets measured at fair value on a non-recurring basis: | ||
Fair Value | $ 1,463 | $ 5,220 |
Note 4 - Loans (Detail) - Loans Held for Sale (USD $)
In Thousands, unless otherwise specified |
Sep. 30, 2012
|
Dec. 31, 2011
|
---|---|---|
Loans held for sale carrying amount (in Dollars) | $ 3,490 | $ 3,720 |
Loans held for sale percentage of total loans | 1.50% | 1.60% |
Commercial Loan [Member]
|
||
Loans held for sale carrying amount (in Dollars) | 278 | 115 |
Loans held for sale percentage of total loans | 0.10% | 0.10% |
Real Estate Loans [Member]
|
||
Loans held for sale carrying amount (in Dollars) | 1,656 | 3,030 |
Loans held for sale percentage of total loans | 0.70% | 1.30% |
Construction and Land Development Loans [Member]
|
||
Loans held for sale carrying amount (in Dollars) | $ 1,556 | $ 575 |
Loans held for sale percentage of total loans | 0.70% | 0.20% |
Note 6 - Common and Preferred Stock and Earnings (Loss) per Share (Detail) - Calculation of Earnings (Loss) Per Common Share (USD $)
In Thousands, except Share data, unless otherwise specified |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2012
|
Sep. 30, 2011
|
Sep. 30, 2012
|
Sep. 30, 2011
|
|
Net income (loss) | $ 760 | $ (1,001) | $ 451 | $ (1,483) |
Net income (loss) attributable to common stock | 609 | (1,065) | (49) | (1,675) |
Average common shares outstanding (in Shares) | 7,855,066 | 7,094,274 | 7,792,292 | 7,094,274 |
Average common shares used for diluted EPS (in Shares) | 7,855,066 | 7,094,274 | 7,792,292 | 7,094,274 |
Basic earnings (loss) per common share (in Dollars per share) | $ 0.08 | $ (0.15) | $ (0.01) | $ (0.24) |
Diluted earnings (loss) per common share (in Dollars per share) | $ 0.08 | $ (0.15) | $ (0.01) | $ (0.24) |
Non-Convertible Subsidiary Issued-Preferred [Member]
|
||||
Net income (loss) | 151 | 500 | ||
TARP Preferred (Series D) [Member]
|
||||
Net income (loss) | 64 | 192 | ||
Preferred Stock [Member]
|
||||
Net income (loss) | $ 151 | $ 64 | $ 500 | $ 192 |
Note 1 - Basis of Presentation and Management Representations
|
9 Months Ended |
---|---|
Sep. 30, 2012
|
|
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] |
Note
1 – Basis of Presentation and Management
Representations
The
unaudited consolidated financial statements include accounts
of Mission Community Bancorp (“the Company”) and
its subsidiaries, Mission Community Bank (“the
Bank”) and Mission Asset Management, Inc.
(“MAM”), and the Bank’s subsidiary, Mission
Community Development Corporation. All material
inter-company balances and transactions have been
eliminated.
These
financial statements have been prepared in accordance with
the Securities and Exchange Commission’s rules and
regulations for quarterly reporting and, therefore, do not
necessarily include all information and footnote disclosures
normally included in financial statements prepared in
accordance with generally accepted accounting
principles. These financial statements should be
read in conjunction with the Company’s Form 10-K for
the year ended December 31, 2011, which was filed on March
30, 2012.
Operating
results for interim periods are not necessarily indicative of
operating results for an entire fiscal year. In
the opinion of management, the unaudited financial statements
for the three-month and nine-month periods ended September
30, 2012 and 2011 reflect all adjustments, consisting only of
normal recurring adjustments, necessary for a fair
presentation of the Company’s financial position and
results of operations.
The
Bank has been organized as a single reporting segment and
operates five branches in the Central Coast area of
California (in San Luis Obispo, Santa Barbara and Ventura
counties, which include the cities of San Luis Obispo, Paso
Robles, Atascadero, Arroyo Grande and Santa
Maria). In addition, the Bank operates a loan
production office in San Luis Obispo, with a primary focus on
Small Business Administration (“SBA”) lending,
and a Food and Agriculture Division, operating through a loan
production office in Oxnard, California.
The
Bank’s primary source of revenue is providing real
estate, commercial and industrial (including SBA-guaranteed
loans) and agricultural loans to customers, who are
predominately small and middle-market businesses and
individuals.
The
Bank’s deposits are insured by the Federal Deposit
Insurance Corporation (FDIC) up to applicable legal
limits.
Certain
reclassifications have been made to prior period balances to
conform to classifications in 2012, with no impact to
previously reported net loss or shareholders’
equity.
|