x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the transition period from _____ to _____
|
1ST CONSTITUTION BANCORP
|
(Exact Name of Registrant as Specified in Its Charter)
|
New Jersey
|
22-3665653
|
|
(State of Other Jurisdiction
of Incorporation or Organization)
|
(I.R.S. Employer Identification No.)
|
2650 Route 130, P.O. Box 634, Cranbury, NJ
|
08512
|
|
(Address of Principal Executive Offices)
|
(Zip Code)
|
(609) 655-4500
|
(Issuer’s Telephone Number, Including Area Code)
|
(Former name, former address and former fiscal year, if changed since last report)
|
Large accelerated filer
|
o
|
Accelerated filer
|
o
|
Non-accelerated filer
(Do not check if a smaller reporting company)
|
o
|
Smaller reporting company
|
x
|
Page
|
||
PART I.
|
FINANCIAL INFORMATION
|
|
1
|
||
1
|
||
2
|
||
3
|
||
4
|
||
5
|
||
6
|
||
33
|
||
51
|
||
51
|
||
PART II.
|
OTHER INFORMATION
|
|
52
|
||
52
|
||
53
|
June 30, 2012
|
December 31, 2011
|
|||||||
ASSETS
|
||||||||
CASH AND DUE FROM BANKS
|
$ | 16,567,985 | $ | 15,183,853 | ||||
FEDERAL FUNDS SOLD / SHORT-TERM INVESTMENTS
|
11,413 | 11,406 | ||||||
Total cash and cash equivalents
|
16,579,398 | 15,195,259 | ||||||
INVESTMENT SECURITIES:
|
||||||||
Available for sale, at fair value
|
97,537,598 | 93,683,774 | ||||||
Held to maturity (fair value of $128,856,455 and $147,621,280 at
June 30, 2012, and December 31, 2011, respectively)
|
122,992,218 | 142,474,423 | ||||||
Total securities
|
220,529,816 | 236,158,197 | ||||||
LOANS HELD FOR SALE
|
16,595,846 | 19,234,111 | ||||||
LOANS
|
479,795,092 | 475,431,771 | ||||||
Less- Allowance for loan losses
|
(6,257,420 | ) | (5,534,450 | ) | ||||
Net loans
|
473,537,672 | 469,897,321 | ||||||
PREMISES AND EQUIPMENT, net
|
10,629,160 | 10,439,304 | ||||||
ACCRUED INTEREST RECEIVABLE
|
2,767,959 | 2,996,848 | ||||||
BANK-OWNED LIFE INSURANCE
|
13,804,079 | 13,578,981 | ||||||
OTHER REAL ESTATE OWNED
|
11,604,744 | 12,409,201 | ||||||
OTHER ASSETS
|
11,449,899 | 11,817,693 | ||||||
Total assets
|
$ | 777,498,573 | $ | 791,726,915 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
||||||||
LIABILITIES:
|
||||||||
Deposits
|
||||||||
Non-interest bearing
|
$ | 129,822,625 | $ | 105,470,543 | ||||
Interest bearing
|
539,248,825 | 518,391,942 | ||||||
|
||||||||
Total deposits
|
669,071,450 | 623,862,485 | ||||||
BORROWINGS
|
25,300,000 | 88,300,000 | ||||||
REDEEMABLE SUBORDINATED DEBENTURES
|
18,557,000 | 18,557,000 | ||||||
ACCRUED INTEREST PAYABLE
|
1,010,905 | 1,186,511 | ||||||
ACCRUED EXPENSES AND OTHER LIABILITIES
|
5,885,943 | 4,821,144 | ||||||
Total liabilities
|
719,825,298 | 736,727,140 | ||||||
COMMITMENTS AND CONTINGENCIES
|
||||||||
SHAREHOLDERS’ EQUITY:
|
||||||||
Preferred stock, no par value; 5,000,000 shares authorized; none issued
Common stock, no par value, 30,000,000 shares authorized; 5,101,907 and
5,096,054 shares issued and 5,093,725 and 5,094,503 shares outstanding as of June 30, 2012 and December 31, 2011 respectively |
41,073,077 | 40,847,929 | ||||||
Retained earnings
|
15,535,446 | 13,070,606 | ||||||
Treasury Stock, at cost, 8,182 and 1,551 shares at June 30, 2012 and
December 31, 2011, respectively
|
(68,492 | ) | (10,222 | ) | ||||
Accumulated other comprehensive income
|
1,133,244 | 1,091,462 | ||||||
Total shareholders’ equity
|
57,673,275 | 54,999,775 | ||||||
Total liabilities and shareholders’ equity
|
$ | 777,498,573 | $ | 791,726,915 |
Three months ended June 30,
|
Six months ended June 30,
|
|||||||||||||||
INTEREST INCOME
|
2012
|
2011
|
2012
|
2011
|
||||||||||||
Loans, including fees
|
$ | 6,319,104 | $ | 5,167,439 | $ | 12,733,563 | $ | 10,521,646 | ||||||||
Securities
|
||||||||||||||||
Taxable
|
1,143,554 | 1,503,134 | 2,327,759 | 2,788,078 | ||||||||||||
Tax-exempt
|
411,225 | 351,728 | 831,794 | 636,800 | ||||||||||||
Federal funds sold and short-term investments
|
33,306 | 63,004 | 48,340 | 72,110 | ||||||||||||
Total interest income
|
7,907,189 | 7,085,305 | 15,941,456 | 14,018,634 | ||||||||||||
INTEREST EXPENSE
|
||||||||||||||||
Deposits
|
1,079,048 | 1,530,274 | 2,265,522 | 2,928,404 | ||||||||||||
Borrowings
|
103,639 | 103,712 | 221,561 | 210,632 | ||||||||||||
Redeemable subordinated debentures
|
96,580 | 237,280 | 195,892 | 501,434 | ||||||||||||
Total interest expense
|
1,279,267 | 1,871,266 | 2,682,975 | 3,640,470 | ||||||||||||
Net interest income
|
6,627,922 | 5,214,039 | 13,258,481 | 10,378,164 | ||||||||||||
PROVISION FOR LOAN LOSSES
|
549,998 | 275,000 | 1,149,996 | 674,998 | ||||||||||||
Net interest income after provision for loan losses
|
6,077,924 | 4,939,039 | 12,108,485 | 9,703,166 | ||||||||||||
NON-INTEREST INCOME
|
||||||||||||||||
Service charges on deposit accounts
|
231,256 | 234,898 | 459,228 | 410,740 | ||||||||||||
Gain on sales of loans
|
495,147 | 411,643 | 963,364 | 848,382 | ||||||||||||
Income on bank-owned life insurance
|
113,176 | 103,522 | 225,098 | 198,659 | ||||||||||||
Other income
|
348,387 | 390,249 | 705,441 | 707,281 | ||||||||||||
Total non-interest income
|
1,187,966 | 1,140,312 | 2,353,131 | 2,165,062 | ||||||||||||
NON-INTEREST EXPENSE
|
||||||||||||||||
Salaries and employee benefits
|
3,154,903 | 2,843,948 | 6,095,253 | 5,420,612 | ||||||||||||
Occupancy expense
|
613,534 | 580,969 | 1,337,320 | 1,147,707 | ||||||||||||
Data processing expenses
|
252,545 | 313,776 | 516,120 | 617,249 | ||||||||||||
FDIC insurance expenses
|
139,873 | 246,458 | 287,266 | 474,005 | ||||||||||||
Other operating expenses
|
1,213,119 | 1,170,634 | 2,750,532 | 2,159,044 | ||||||||||||
Total non-interest expenses
|
5,373,974 | 5,155,785 | 10,986,491 | 9,818,617 | ||||||||||||
Income before income taxes
|
1,891,916 | 923,566 | 3,475,125 | 2,049,611 | ||||||||||||
INCOME TAXES
|
593,808 | 94,650 | 1,010,285 | 430,827 | ||||||||||||
Net income
|
$ | 1,298,108 | $ | 828,916 | $ | 2,464,840 | $ | 1,618,784 | ||||||||
NET INCOME PER SHARE
|
||||||||||||||||
Basic
|
$ | 0.25 | $ | 0.16 | $ | 0.48 | $ | 0.32 | ||||||||
Diluted
|
$ | 0.25 | $ | 0.16 | $ | 0.48 | $ | 0.32 |
Three months ended June 30,
|
Six months ended June 30,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
NET INCOME
|
$ | 1,298,108 | $ | 828,916 | $ | 2,464,840 | $ | 1,618,784 | ||||||||
Other comprehensive income, net of tax
|
||||||||||||||||
Unrealized gains on securities available for sale
|
28,135 | 936,493 | 37,930 | 819,296 | ||||||||||||
Pension liability
|
1,926 | 1,926 | 3,852 | 3,853 | ||||||||||||
Unrealized gain on interest rate swap contract
|
- | 107,191 | - | 211,562 | ||||||||||||
Other comprehensive income
|
30,061 | 1,045,610 | 41,782 | 1,034,711 | ||||||||||||
Comprehensive income
|
$ | 1,328,169 | $ | 1,874,526 | $ | 2,506,622 | $ | 2,653,495 |
Common
Stock
|
Retained
Earnings
|
Treasury
Stock
|
Accumulated
Other
Comprehensive
Income
|
Total
Shareholders’
Equity
|
||||||||||||||||
BALANCE, January 1, 2011
|
$ | 38,899,855 | $ | 10,741,779 | $ | (58,652 | ) | $ | 98,174 | $ | 49,681,156 | |||||||||
Exercise of stock options and issuance of vested shares
under employee benefit programs
|
75,058 | 11,597 | 86,655 | |||||||||||||||||
Share-based compensation
|
27,200 | 27,200 | ||||||||||||||||||
Treasury stock purchased
|
(15,354 | ) | (15,354 | ) | ||||||||||||||||
Net income for the six months ended June 30, 2011
|
1,618,784 | 1,618,784 | ||||||||||||||||||
Other comprehensive income
|
1,034,711 | 1,034,711 | ||||||||||||||||||
Balance, June 30, 2011
|
$ | 39,002,113 | $ | 12,360,563 | $ | (62,409 | ) | $ | 1,132,885 | $ | 52,433,152 | |||||||||
Balance, January 1, 2012
|
$ | 40,847,929 | $ | 13,070,606 | $ | (10,222 | ) | $ | 1,091,462 | $ | 54,999,775 | |||||||||
Exercise of stock options, net, and issuance of vested
shares under employee benefit programs
|
176,371 | 176,371 | ||||||||||||||||||
Share-based compensation
|
48,777 | 48,777 | ||||||||||||||||||
Treasury stock purchased
|
(58,270 | ) | (58,270 | ) | ||||||||||||||||
Net Income for the six months
ended June 30, 2012
|
2,464,840 | 2,464,840 | ||||||||||||||||||
Other comprehensive income
|
41,782 | 41,782 | ||||||||||||||||||
Balance, June 30, 2012
|
$ | 41,073,077 | $ | 15,535,446 | $ | (68,492 | ) | $ | 1,133,244 | $ | 57,673,275 |
Six Months Ended June 30,
|
||||||
2012
|
2011
|
|||||
OPERATING ACTIVITIES:
|
||||||
Net income
|
$ |
2,464,840
|
$ |
1,618,784
|
||
Adjustments to reconcile net income
|
||||||
to net cash provided by operating activities-
|
||||||
Provision for loan losses
|
1,149,996
|
674,998
|
||||
Provision for loss on other real estate owned
|
501,644
|
147,178
|
||||
Depreciation and amortization
|
579,455
|
510,473
|
||||
Net amortization of premiums and discounts on securities
|
750,689
|
815,173
|
||||
Gains on sales of loans held for sale
|
(963,364)
|
(848,382)
|
||||
Originations of loans held for sale
|
(79,079,430)
|
(47,402,373)
|
||||
Proceeds from sales of loans held for sale
|
82,681,059
|
62,498,228
|
||||
Income on Bank – owned life insurance
|
(225,098)
|
(198,659)
|
||||
Share-based compensation expense
|
224,221
|
187,921
|
||||
Decrease (increase) in accrued interest receivable
|
228,889
|
(276,159)
|
||||
Decrease (increase) in other assets
|
211,685
|
(1,574,006)
|
||||
Decrease in accrued interest payable
|
(175,606)
|
(240,064)
|
||||
Increase (decrease) in accrued expenses and other liabilities
|
895,796
|
(914,212)
|
||||
Net cash provided by operating activities
|
9,244,776
|
14,998,900
|
||||
INVESTING ACTIVITIES:
|
||||||
Purchases of securities -
|
||||||
Available for sale
|
(28,280,554)
|
(69,849,189)
|
||||
Held to maturity
|
-
|
(83,188,354)
|
||||
Proceeds from maturities and prepayments of securities -
|
||||||
Available for sale
|
24,322,808
|
44,610,442
|
||||
Held to maturity
|
18,892,905
|
22,600,347
|
||||
Net (increase) decrease in loans
|
(5,260,752)
|
69,306,181
|
||||
Capital expenditures
|
(635,328)
|
(347,008)
|
||||
Additional investment in other real estate owned
|
(81,812)
|
(607,158)
|
||||
Proceeds from sales of other real estate owned
|
855,030
|
1,629,315
|
||||
Cash consideration received in connection with acquisition of branches
|
-
|
101,539,588
|
||||
Net cash provided by investing activities
|
9,812,297
|
85,694,164
|
||||
FINANCING ACTIVITIES:
|
||||||
Exercise of stock options and issuance of vested shares
|
176,371
|
86,655
|
||||
Purchase of Treasury Stock
|
(58,270)
|
(15,354)
|
||||
Net increase (decrease) in demand, savings and time deposits
|
45,208,965
|
(12,517,290)
|
||||
Net (decrease) in borrowings
|
(63,000,000)
|
(15,900,000)
|
||||
Net cash used in financing activities
|
(17,672,934)
|
(28,345,989)
|
||||
Increase in cash and cash equivalents
|
1,384,139
|
72,347,075
|
||||
CASH AND CASH EQUIVALENTS
|
||||||
AT BEGINNING OF PERIOD
|
15,195,259
|
17,710,501
|
||||
CASH AND CASH EQUIVALENTS
|
||||||
AT END OF PERIOD
|
$ |
16,579,398
|
$ |
90,057,576
|
||
SUPPLEMENTAL DISCLOSURES
|
||||||
OF CASH FLOW INFORMATION:
|
||||||
Cash paid during the period for -
|
||||||
Interest
|
$ |
2,858,581
|
$ |
3,880,534
|
||
Income taxes
|
887,000
|
857,000
|
||||
Non-cash investing activities
|
||||||
Real estate acquired in full satisfaction of loans in foreclosure
|
$ |
470,405
|
$ |
3,107,664
|
|
Three Months Ended June 30, 2012
|
|||||||||
Income
|
Weighted-
average
shares
|
Per share
Amount
|
||||||||
Basic earnings per common share:
|
||||||||||
Net income
|
$ |
1,298,108
|
5,096,317
|
$0.25
|
||||||
Effect of dilutive securities:
|
||||||||||
Stock options and unvested stock awards
|
102,094
|
|||||||||
Diluted EPS:
|
||||||||||
Net income plus assumed conversion
|
$ |
1,298,108
|
5,198,411
|
$0.25
|
Three Months Ended June 30, 2011
|
||||||||||
Income
|
Weighted-
average
shares
|
Per share
Amount
|
||||||||
Basic earnings per common share:
|
||||||||||
Net income
|
$ |
828,916
|
5,043,504
|
$0.16
|
||||||
Effect of dilutive securities:
|
||||||||||
Stock options and unvested stock awards
|
48,938
|
|||||||||
Diluted EPS
|
||||||||||
Net income plus assumed conversion
|
$ |
828,916
|
5,092,442
|
$0.16
|
|
Six Months Ended June 30, 2012
|
|||||||||
Income
|
Weighted-
average
shares
|
Per share
Amount
|
||||||||
Basic earnings per share:
|
||||||||||
Net income
|
$ |
2,464,840
|
5,096,252
|
$0.48
|
||||||
Effect of dilutive securities:
|
||||||||||
Stock options and unvested stock awards
|
81,062
|
|||||||||
Diluted EPS
|
||||||||||
Net income plus assumed conversion
|
$ |
2,464,840
|
5,177,314
|
$0.48
|
Six Months Ended June 30, 2011
|
||||||||||
Income
|
Weighted-
average
shares
|
Per share
Amount
|
||||||||
Basic earnings per common share:
|
||||||||||
Net income
|
$ |
1,618,784
|
5,043,324
|
$0.32
|
||||||
Effect of dilutive securities:
|
||||||||||
Stock options and unvested stock awards
|
61,722
|
|||||||||
Diluted EPS:
|
||||||||||
Net income plus assumed conversion
|
$ |
1,618,784
|
5,105,046
|
$0.32
|
Gross
|
Gross
|
|||||||||||||||
Amortized
|
Unrealized
|
Unrealized
|
Fair
|
|||||||||||||
June 30, 2012:
|
Cost
|
Gains
|
Losses
|
Value
|
||||||||||||
Available for sale-
|
||||||||||||||||
U. S. Treasury securities and
|
||||||||||||||||
obligations of U.S. Government
|
||||||||||||||||
sponsored corporations (“GSE”) and agencies
|
$ |
16,984,686
|
$ |
115,414
|
$ |
0
|
$ |
17,100,100
|
||||||||
Residential collateralized
mortgage obligations – GSE
|
11,038,324
|
428,381
|
0
|
11,466,705
|
||||||||||||
Residential collateralized
mortgage obligations – non-GSE
|
3,522,276
|
120,913
|
(10,204)
|
3,632,985
|
||||||||||||
Residential mortgage
backed securities – GSE
|
34,832,648
|
2,045,098
|
(4)
|
36,877,742
|
||||||||||||
Obligations of State and
|
||||||||||||||||
Political subdivisions
|
5,350,838
|
389,276
|
(1,017)
|
5,739,097
|
||||||||||||
Trust preferred debt securities – single issuer
|
2,464,748
|
0
|
(568,775)
|
1,895,973
|
||||||||||||
Corporate Debt Securities
|
19,219,511
|
24,192
|
(167,507)
|
19,076,196
|
||||||||||||
Restricted stock
|
1,723,800
|
0
|
0
|
1,723,800
|
||||||||||||
Mutual fund
|
25,000
|
0
|
0
|
25,000
|
||||||||||||
$ |
95,161,831
|
$ |
3,123,274
|
$ |
(747,507)
|
$ |
97,537,598
|
June 30, 2012:
|
Amortized
Cost
|
Other-Than-
Temporary
Impairment
Recognized In
Accumulated
Other
Comprehensive
Income
|
Carrying
Value
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
||||||||||||||||||
Held to maturity-
|
||||||||||||||||||||||||
U. S. Treasury securities and
|
||||||||||||||||||||||||
obligations of U.S. Government
|
||||||||||||||||||||||||
sponsored corporations (“GSE”) and
agencies |
$ | 3,098,502 | $ | 0 | $ | 3,098,502 | $ | 39,763 | $ | 0 | $ | 3,138,265 | ||||||||||||
Residential collateralized
Mortgage obligations – GSE
|
22,705,219 | 0 | 22,705,219 | 1,105,555 | 0 | 23,810,774 | ||||||||||||||||||
Residential collateralized
Mortgage obligations - non-GSE
|
13,471,005 | 0 | 13,471,005 | 760,872 | 0 | 14,231,877 | ||||||||||||||||||
Residential mortgage backed
securities – GSE
|
18,054,413 | 0 | 18,054,413 | 945,468 | 0 | 18,999,881 | ||||||||||||||||||
Obligations of State and
|
||||||||||||||||||||||||
Political subdivisions
|
43,109,946 | 0 | 43,109,946 | 2,996,861 | 0 | 46,106,807 | ||||||||||||||||||
Trust preferred debt securities – pooled
|
651,788 | (500,944 | ) | 150,844 | 0 | (61,602 | ) | 89,242 | ||||||||||||||||
Corporate debt securities
|
22,402,289 | 0 | 22,402,289 | 89,769 | (12,449 | ) | 22,479,609 | |||||||||||||||||
$ | 123,493,162 | $ | (500,944 | ) | $ | 122,992,218 | $ | 5,938,288 | $ | (74,051 | ) | $ | 128,856,455 |
Gross
|
Gross
|
|||||||||||||||
Amortized
|
Unrealized
|
Unrealized
|
Fair
|
|||||||||||||
December 31, 2011:
|
Cost
|
Gains
|
Losses
|
Value
|
||||||||||||
Available for sale-
|
||||||||||||||||
U. S. Treasury securities and
|
||||||||||||||||
obligations of U.S. Government
|
||||||||||||||||
sponsored corporations (“GSE”) and agencies
|
$
|
19,400,856
|
$
|
71,833
|
$
|
0
|
$
|
19,472,689
|
||||||||
Residential collateralized
mortgage obligations – GSE
|
13,421,544
|
476,589
|
0
|
13,898,133
|
||||||||||||
Residential collateralized
mortgage obligations – non-GSE
|
4,177,115
|
143,480
|
(20,151
|
)
|
4,300,444
|
|||||||||||
Residential mortgage
backed securities – GSE
|
40,655,157
|
2,032,059
|
(7
|
)
|
42,687,209
|
|||||||||||
Obligations of State and
|
||||||||||||||||
Political subdivisions
|
5,366,145
|
339,747
|
(5,378
|
)
|
5,700,514
|
|||||||||||
Trust preferred debt securities – single issuer
|
2,463,296
|
0
|
(712,055
|
)
|
1,751,241
|
|||||||||||
Corporate Debt Securities
|
1,443,762
|
0
|
(7,818
|
)
|
1,435,944
|
|||||||||||
Restricted stock
|
4,412,600
|
0
|
0
|
4,412,600
|
||||||||||||
Mutual fund
|
25,000
|
0
|
0
|
25,000
|
||||||||||||
$
|
91,365,475
|
$
|
3,063,708
|
$
|
(745,409
|
)
|
$
|
93,683,774
|
December 31, 2011:
|
Amortized
Cost
|
Other-Than-
Temporary
Impairment
Recognized In
Accumulated
Other
Comprehensive
Income
|
Carrying
Value
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
||||||||||||||||||
Held to maturity-
|
||||||||||||||||||||||||
U. S. Treasury securities and
|
||||||||||||||||||||||||
obligations of U.S. Government
|
||||||||||||||||||||||||
sponsored corporations (“GSE”) and
agencies
|
$
|
11,118,649
|
$
|
0
|
$
|
11,118,649
|
$
|
59,571
|
$
|
0
|
$
|
11,178,220
|
||||||||||||
Residential collateralized
mortgage obligations – GSE
|
24,705,415
|
0
|
24,705,415
|
1,007,737
|
0
|
25,713,152
|
||||||||||||||||||
Residential mortgage backed
securities – GSE
|
14,386,327
|
0
|
14,386,327
|
704,792
|
0
|
15,091,119
|
||||||||||||||||||
Residential mortgage backed
securities – non-GSE
|
20,260,354
|
0
|
20,260,354
|
801,882
|
0
|
21,062,236
|
||||||||||||||||||
Obligations of State and
|
||||||||||||||||||||||||
Political subdivisions
|
46,820,985
|
0
|
46,820,985
|
2,848,587
|
(2,507
|
)
|
49,667,065
|
|||||||||||||||||
Trust preferred debt securities – pooled
|
646,574
|
(500,944
|
)
|
145,630
|
0
|
(142,122
|
)
|
3,508
|
||||||||||||||||
Corporate debt securities
|
25,037,063
|
0
|
25,037,063
|
85,701
|
(216,784
|
)
|
24,905,980
|
|||||||||||||||||
$
|
142,975,367
|
$
|
(500,944
|
)
|
$
|
142,474,423
|
$
|
5,508,270
|
$
|
(361,413
|
)
|
$
|
147,621,280
|
Amortized
Cost
|
Fair
Value
|
|||||||
Available for sale-
|
||||||||
Due in one year or less
|
||||||||
U.S. Treasury securities and obligations of U.S. Government
sponsored corporations (“GSE”) and agencies
|
$
|
6,033,171
|
$
|
6,063,510
|
||||
Residential backed securities-GSE
|
36,231
|
38,052
|
||||||
Corporate Debt Securities
|
1,755,664
|
1,760,441
|
||||||
Restricted Stock
|
1,723,800
|
1,723,800
|
||||||
Mutual Fund
|
25,000
|
25,000
|
||||||
$
|
9,573,866
|
$
|
9,610,803
|
|||||
Due after one year through five years
|
||||||||
U.S. Treasury securities and obligations of
US Government sponsored corporations (“GSE”)and agencies
|
$
|
10,951,515
|
$
|
11,036,590
|
||||
Residential mortgage backed securities-GSE
|
288,221
|
304,807
|
||||||
Obligations of State and Political subdivisions
|
593,820
|
597,801
|
||||||
Corporate Debt Securities
|
16,376,971
|
16,242,005
|
||||||
$
|
28,210,527
|
$
|
28,181,203
|
|||||
Due after five years through ten years
|
||||||||
Residential collateralized mortgage obligations -GSE
|
$
|
168,877
|
$
|
174,044
|
||||
Residential mortgage backed Securities - GSE
|
3,357,223
|
3,662,711
|
||||||
Obligations of State and Political Subdivisions
|
2,712,683
|
2,991,213
|
||||||
$
|
6,238,783
|
$
|
6,827,968
|
|||||
Due after ten years
|
||||||||
Residential collateralized mortgage obligations -GSE
|
$
|
10,869,447
|
$
|
11,292,661
|
||||
Residential collateralized mortgage obligations –non GSE
|
3,522,276
|
3,632,985
|
||||||
Residential mortgage backed securities - GSE
|
31,150,973
|
32,872,172
|
||||||
Obligations of State and Political subdivisions
|
2,044,335
|
2,150,083
|
||||||
Trust Preferred Debt Securities-single issuer
|
2,464,749
|
1,895,973
|
||||||
Corporate Debt Securities
|
1,086,876
|
1,073,750
|
||||||
$
|
51,138,655
|
$
|
52,917,624
|
|||||
Total
|
$
|
95,161,831
|
$
|
97,537,598
|
Held to maturity-
|
||||||||
Due in one year or less
|
||||||||
Obligations of State and Political subdivisions
|
$
|
1,665,786
|
$
|
1,669,328
|
||||
Corporate Debt Securities
|
|
13,475,530
|
|
13,523,475
|
||||
$
|
15,141,316
|
$
|
15,192,803
|
|||||
Due after one year through five years
|
||||||||
U.S. Treasury securities and obligations of
US Government sponsored corporations (“GSE”) and agencies
|
$
|
3,098,502
|
$
|
3,138,265
|
||||
Obligations of State and Political subdivisions
|
5,198,416
|
5,410,645
|
||||||
Corporate Debt Securities
|
8,926,759
|
8,956,134
|
||||||
$
|
17,223,677
|
$
|
17,505,044
|
|||||
Due after five years through ten years
|
||||||||
Residential collateralized mortgage obligations
– GSE
|
$
|
635,319
|
$
|
651,756
|
||||
Residential mortgage backed securities – GSE
|
4,016,700
|
4,144,974
|
||||||
Obligations of State and Political subdivisions
|
22,961,646
|
24,580,362
|
||||||
$
|
27,613,665
|
$
|
29,377,092
|
|||||
Due after ten years
|
||||||||
U.S. Treasury securities and obligations of US
Government sponsored corporations
(“GSE”) and agencies
|
$
|
0
|
$
|
0
|
||||
Residential collateralized mortgage obligations - GSE
|
22,069,900
|
23,159,018
|
||||||
Residential collateralized mortgage obligations – non GSE
|
13,471,005
|
14,231,877
|
||||||
Residential mortgage backed securities - GSE
|
14,037,713
|
14,854,907
|
||||||
Obligations of State and Political subdivisions
|
13,284,098
|
14,446,472
|
||||||
Trust Preferred Debt Securities - Pooled
|
651,788
|
89,242
|
||||||
$
|
63,514,504
|
$
|
66,781,516
|
|||||
Total
|
$
|
123,493,162
|
$
|
128,856,455
|
||||
June 30, 2012
|
Less than 12 months
|
12 months or longer
|
Total
|
|||||||||||||||||||||||||
Number
of
Securities
|
Fair Value
|
Unrealized
Losses
|
Fair Value
|
Unrealized
Losses
|
Fair Value
|
Unrealized
Losses
|
||||||||||||||||||||||
Residential collateralized mortgage
obligations – non-GSE
|
1
|
$ |
0
|
$ |
0
|
$ |
206,518
|
$ |
(10,204)
|
$ |
206,518
|
$ |
(10,204)
|
|||||||||||||||
Residential mortgage backed
securities - GSE |
1
|
5,113
|
(4)
|
0
|
0
|
5,113
|
(4)
|
|||||||||||||||||||||
Obligations of State and Political
Subdivisions
|
1
|
522,653
|
(1,017)
|
0
|
0
|
522,653
|
(1,017)
|
|||||||||||||||||||||
Trust preferred debt securities –
single issuer
|
4
|
0
|
0
|
1,895,973
|
(568,775)
|
1,895,973
|
(568,775)
|
|||||||||||||||||||||
Trust preferred debt securities –
pooled
|
1
|
0
|
0
|
89,242
|
(562,546)
|
89,242
|
(562,546)
|
|||||||||||||||||||||
Corporate Debt Securities
|
21
|
16,074,746
|
(176,517)
|
1,180,379
|
(3,439)
|
17,255,125
|
(179,956)
|
|||||||||||||||||||||
Total temporarily impaired securities
|
29
|
$ |
16,602,512
|
$ |
(177.538)
|
$ |
3,372,112
|
$ |
(1,144,964)
|
$ |
19,974,624
|
$ |
(1,322,502)
|
December 31, 2011
|
Less than 12 months
|
12 months or longer
|
Total
|
||||||||||||||||||||||
Number
of
Securities
|
Fair Value
|
Unrealized
Losses
|
Fair Value
|
Unrealized
Losses
|
Fair Value
|
Unrealized
Losses
|
|||||||||||||||||||
Residential collateralized mortgage
Obligations – non-GSE
|
1
|
$
|
0
|
$
|
0
|
$
|
251,723
|
$
|
(20,151
|
)
|
$
|
251,723
|
$
|
(20,151
|
)
|
||||||||||
Residential mortgage backed securities
GSE
|
1
|
5,280
|
(7
|
)
|
0
|
0
|
5,280
|
(7
|
)
|
||||||||||||||||
Obligations of State and Political
Subdivisions
|
3
|
1,049,362
|
(7,885
|
)
|
0
|
0
|
1,049,362
|
(7,885
|
)
|
||||||||||||||||
Trust preferred debt securities –
Single issuer
|
4
|
0
|
0
|
1,751,241
|
(712,055
|
)
|
1,751,241
|
(712,055
|
)
|
||||||||||||||||
Trust preferred debt securities –
Pooled
|
1
|
0
|
0
|
3,508
|
(643,066
|
)
|
3,508
|
(643,066
|
)
|
||||||||||||||||
Corporate debt securities
|
25
|
13,668,246
|
(211,075
|
)
|
666,956
|
(13,527
|
)
|
14,335,202
|
(224,602
|
)
|
|||||||||||||||
Total temporarily impaired securities
|
35
|
$
|
14,722,888
|
$
|
(218,967
|
)
|
$
|
2,673,428
|
$
|
(1,388,799
|
)
|
$
|
17,396,316
|
$
|
(1,607,766
|
)
|
|
a.
|
We obtained the PreTSL XXV Depository Institutions Issuer List as of June 30, 2012 from the FTN Financial Corp. (“FTN”) website and reviewed the financial ratios and capital levels of each individual financial institution issuer.
|
|
b.
|
We sorted the financial institutions on the issuer list to develop three “buckets” (or categories) for further deferred/default analysis based upon the indicated “Texas Ratio.” The Texas Ratio is calculated by dividing the institution’s Non-Performing Assets plus loans 90 days past due by the combined total of Tangible Equity plus the Allowance for Loan Losses. The three buckets consisted of those institutions with a Texas Ratio of:
|
|
c.
|
We then applied the following asset specific deferral/default assumptions to each of these buckets:
|
|
d.
|
We then ran a cash flow projection to analyze the impact of future deferral/default activity by applying the following assumption on those institutions in bucket (3) of our analysis:
|
|
·
|
Defaults at 75 basis points applied annually; 15% recovery with a 2-year lag from the initial date of deferral.
|
|
e.
|
This June 30, 2012 projection of future cash flows produced a present value factor that exceeded the carrying value of the pooled trust preferred security; therefore, management concluded that no OTTI issues were present at June 30, 2012.
|
Security
|
Class
|
Amortized Cost
|
Fair
Value
|
Unrealized
(Loss)
|
Percent of
Underlying
Collateral
Performing
|
Percent of
Underlying
Collateral In
Deferral (1)
|
Percent of
Underlying
Collateral In
Default (1)
|
Expected
Deferrals and
Defaults as a
% of Remaining Performing
Collateral
|
Moody's
S&P /
Ratings
|
Excess Subordination (2)
|
|
Amount
|
% of
Current
Performing
Collateral
|
||||||||||
PreTSL
XXV |
B-1
|
$651,788
|
$89,242
|
($562,546)
|
65.8%
|
16.7%
|
17.5%
|
15.6%
|
C/ NR
|
$102,500,000
|
20.0%
|
(1)
|
This percentage represents the amount of specific deferrals / defaults that have occurred, plus those that are known for the following quarters to the total amount of original collateral. Fewer deferrals / defaults produce a lower percentage.
|
(2)
|
“Excess subordination” amount is the additional defaults / deferrals necessary in the next reporting period to deplete the entire credit enhancement (excess interest and over-collateralization) beneath our tranche within each pool to the point that would cause a “break in yield.” This amount assumes that all currently performing collateral continues to perform. A break in yield means that our security would not be expected to receive all the contractual cash flows (principal and interest) by maturity. The “percent of underlying collateral performing” is the ratio of the “excess subordination amount” to current performing collateral - a higher percent means there is more excess subordination to absorb additional defaults / deferrals, and the better our security is protected from loss.
|
(in thousands)
|
Three and six months
ended June 30, 2012 |
Three and six months
ended June 30, 2011 |
||||||
Balance at beginning of period
|
$ | 364 | $ | 364 | ||||
Change during the period
|
- | - | ||||||
Balance at end of period
|
$ | 364 | $ | 364 |
30-59 Days
|
60-89
Days
|
Greater
than 90
Days
|
Total Past
Due
|
Current
|
Total
Loans
Receivable
|
Recorded
Investment
> 90 Days
Accruing
|
Nonaccrual
Loans
|
|||||||||||||||||||||||||
Commercial
|
||||||||||||||||||||||||||||||||
Construction
|
$ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 59,650,806 | $ | 59,650,806 | $ | 0 | $ | 0 | ||||||||||||||||
Commercial Business
|
599,605 | 0 | 262,737 | 862,342 | 57,197,323 | 58,059,665 | 42,320 | 479,072 | ||||||||||||||||||||||||
Commercial Real Estate
|
2,609,703 | 0 | 1,093,793 | 3,703,496 | 103,662,142 | 107,365,638 | 0 | 2,024,487 | ||||||||||||||||||||||||
Mortgage Warehouse
Lines
|
0 | 0 | 0 | 0 | 230,776,678 | 230,776,678 | 0 | 0 | ||||||||||||||||||||||||
Residential Real Estate
|
463,679 | 0 | 0 | 463,679 | 10,860,661 | 11,324,340 | 0 | 140,492 | ||||||||||||||||||||||||
Consumer
|
||||||||||||||||||||||||||||||||
Loans to Individuals
|
0 | 0 | 54,904 | 54,904 | 11,384,790 | 11,439,694 | 0 | 54,904 | ||||||||||||||||||||||||
Other
|
0 | 0 | 0 | 0 | 227,448 | 227,448 | 0 | 0 | ||||||||||||||||||||||||
Deferred Loan Fees
|
0 | 0 | 0 | 0 | 950,823 | 950,823 | 0 | 0 | ||||||||||||||||||||||||
Total
|
$ | 3,762,987 | $ | 0 | $ | 1,411,434 | $ | 5,084,421 | $ | 474,710,671 | $ | 479,795,092 | $ | 42,320 | $ | 2,698,955 |
30-59
Days
|
60-89
Days
|
Greater
than 90
Days
|
Total Past
Due
|
Current
|
Total
Loans
Receivable
|
Recorded
Investment
> 90 Days
Accruing
|
Nonaccrual
Loans
|
||
Commercial
|
Construction
|
$ 0
|
$ 0
|
$ 140,055
|
$ 140,055
|
$ 49,145,728
|
$49,285,783
|
$ 0
|
$ 140,055
|
|
Commercial Business
|
364,743
|
564,152
|
122,535
|
1,051,430
|
49,733,244
|
50,784,674
|
0
|
669,166
|
|
Commercial Real Estate
|
0
|
245,874
|
503,877
|
749,751
|
98,887,225
|
99,636,976
|
0
|
1,443,220
|
|
Mortgage Warehouse Lines
|
0
|
0
|
0
|
0
|
249,345,831
|
249,345,831
|
0
|
0
|
Residential Real Estate
|
905,310
|
0
|
661,171
|
1,566,481
|
11,112,827
|
12,885,352
|
0
|
661,171
|
Consumer
|
Loans to Individuals
|
0
|
144,904
|
77,858
|
222,762
|
11,996,878
|
12,219,640
|
0
|
77,858
|
|
Other
|
0
|
0
|
0
|
0
|
255,556
|
255,556
|
0
|
0
|
Deferred Loan Costs
|
0
|
0
|
0
|
0
|
1,017,959
|
1,017,959
|
0
|
0
|
Total
|
$1,270,053
|
$ 954,930
|
$1,505,496
|
$3,730,479
|
$471,701,292
|
$475,431,771
|
$ 0
|
$ 2,991,470
|
|
·
|
General economic conditions;
|
|
·
|
Trends in charge-offs;
|
|
·
|
Trends and levels of delinquent loans;
|
|
·
|
Trends and levels of non-performing loans, including loans over 90 days delinquent;
|
|
·
|
Trends in volume and terms of loans;
|
|
·
|
Levels of allowance for specific classified loans; and
|
|
·
|
Credit concentrations.
|
|
·
|
Consumer credit scores;
|
|
·
|
Internal credit risk grades;
|
|
·
|
Loan-to-value ratios;
|
|
·
|
Collateral; and
|
|
·
|
Collection experience.
|
Commercial Credit Exposure - By
Internally Assigned Grade
|
Construction
|
Commercial
Business
|
Commercial
Real Estate
|
Mortgage
Warehouse
Lines
|
Residential
Real Estate
|
||
Grade:
|
|||||||
Pass
|
$54,594,154
|
$55,393,231
|
$80,134,127
|
$230,776,678
|
$11,183,848
|
||
Special Mention
|
1,041,045
|
1,159,276
|
19,287,729
|
0
|
0
|
||
Substandard
|
4,015,607
|
1,364,009
|
7,795,550
|
0
|
140,492
|
||
Doubtful
|
0
|
143,149
|
148,232
|
0
|
0
|
||
Total
|
$59,650,806
|
$58,059,665
|
$107,365,638
|
$230,776,678
|
$11,324,340
|
||
Consumer Credit Exposure -
By Payment Activity
|
Loans To
Individuals
|
Other
|
|||||
Performing
|
$11,384,790
|
$227,448
|
|||||
Nonperforming
|
54,904
|
0
|
|||||
Total
|
$11,439,694
|
$227,448
|
Commercial Credit Exposure - By
Internally Assigned Grade
|
Construction
|
Commercial
Business
|
Commercial Real Estate
|
Mortgage
Warehouse
Lines
|
Residential
Real Estate
|
||
Grade:
|
|||||||
Pass
|
$ 44,106,827
|
$ 47,973,545
|
$ 84,642,510
|
$249,345,831
|
$ 12,224,181
|
||
Special Mention
|
5,038,901
|
1,657,993
|
10,574,489
|
0
|
142,477
|
||
Substandard
|
107,405
|
865,160
|
3,823,225
|
0
|
518,694
|
||
Doubtful
|
32,650
|
287,976
|
596,752
|
0
|
0
|
||
Total
|
$ 49,285,783
|
$ 50,784,674
|
$ 99,636,976
|
$249,345,831
|
$ 12,885,352
|
||
Consumer Credit Exposure -
By Payment Activity
|
Loans To
Individuals
|
Other
|
|||||
Performing
|
$ 12,141,782
|
$ 255,556
|
|||||
Nonperforming
|
77,858
|
0
|
|||||
Total
|
$ 12,219,640
|
$ 255,556
|
Period-End Allowance for Credit Losses by Impairment Method – June 30, 2012
|
||||||||||||||||||||||||||||||||||||||||
Commercial
|
Commercial
|
Mortgage
|
Residential
|
Deferred
|
Total
|
|||||||||||||||||||||||||||||||||||
Construction
|
Business
|
Real Estate
|
Warehouse
|
Real Estate
|
Consumer
|
Other
|
Unallocated
|
Fees
|
||||||||||||||||||||||||||||||||
Allowance for credit losses:
|
||||||||||||||||||||||||||||||||||||||||
Ending Balance
|
$ | 1,647,605 | $ | 903,401 | $ | 2,304,010 | $ | 1,153,883 | $ | 122,510 | $ | 123,213 | $ | 2,798 | $ | 0 | $ | 0 | $ | 6,257,420 | ||||||||||||||||||||
Ending Balance
|
||||||||||||||||||||||||||||||||||||||||
Individually evaluated
for impairment
|
0 | 138,597 | 357,074 | 0 | 28,566 | 0 | 0 | 0 | 0 | 524,237 | ||||||||||||||||||||||||||||||
Collectively evaluated
for impairment
|
1,647,605 | 764,804 | 1,946,936 | 1,153,883 | 93,944 | 123,213 | 2,798 | 0 | 0 | 5,733,182 | ||||||||||||||||||||||||||||||
Loans receivables:
|
||||||||||||||||||||||||||||||||||||||||
Ending Balance
|
$ | 59,650,806 | $ | 58,059,665 | $ | 107,365,638 | $ | 230,776,678 | $ | 11,324,340 | $ | 11,439,694 | $ | 227,448 | $ | 0 | $ | 950,823 | $ | 479,795,092 | ||||||||||||||||||||
Individually evaluated
for impairment
|
0 | 851,819 | 2,507,360 | 0 | 140,492 | 54,904 | 0 | 0 | 0 | 3,554,575 | ||||||||||||||||||||||||||||||
Collectively evaluated
for impairment
|
59,650,806 | 57,207,846 | 104,858,278 | 230,776,678 | 11,183,848 | 11,384,790 | 227,448 | 0 | 950,823 | 476,240,517 |
Period-End Allowance for Credit Losses by Impairment Method – December 31, 2011
|
||||||||||||||||||||||||||||||||||||||||
Commercial
|
Commercial
|
Mortgage
|
Residential
|
Deferred
|
Total
|
|||||||||||||||||||||||||||||||||||
Construction
|
Business
|
Real Estate
|
Warehouse
|
Real Estate
|
Consumer
|
Other
|
Unallocated
|
Fees
|
||||||||||||||||||||||||||||||||
Allowance for credit losses:
|
||||||||||||||||||||||||||||||||||||||||
Ending Balance
|
$ | 1,054,695 | $ | 934,642 | $ | 1,597,702 | $ | 1,122,056 | $ | 91,076 | $ | 187,352 | $ | 2,377 | $ | 544,550 | $ | 0 | $ | 5,534,450 | ||||||||||||||||||||
Ending Balance
|
||||||||||||||||||||||||||||||||||||||||
Individually evaluated
for impairment
|
0 | 283,424 | 186,055 | 0 | 11,619 | 77,858 | 0 | 0 | 0 | 558,956 | ||||||||||||||||||||||||||||||
Collectively evaluated
for impairment
|
1,054,695 | 651,218 | 1,411,647 | 1,122,056 | 79,457 | 109,494 | 2,377 | 544,550 | 0 | 4,975,494 | ||||||||||||||||||||||||||||||
Loans receivables:
|
||||||||||||||||||||||||||||||||||||||||
Ending Balance
|
$ | 49,285,783 | $ | 50,784,674 | $ | 99,636,976 | $ | 249,345,831 | $ | 12,885,352 | $ | 12,219,640 | $ | 255,556 | 0 | $ | 1,017,959 | $ | 475,431,771 | |||||||||||||||||||||
Individually evaluated
for impairment
|
140,055 | 952,156 | 1,934,120 | 0 | 661,171 | 77,858 | 0 | 0 | 0 | 3,765,360 | ||||||||||||||||||||||||||||||
Collectively evaluated
for impairment
|
49,145,728 | 49,832,518 | 97,702,856 | 249,345,831 | 12,224,181 | 12,141,782 | 255,556 | 0 | 1,017,959 | 471,666,411 |
Construction
|
Commercial
Business
|
Commercial
Real Estate
|
Mortgage
Warehouse
|
Residential
Real Estate
|
Consumer
|
Other
|
Unallocated
|
Total
|
||||||||||||||||||||||||||||
Balance - December 31, 2011
|
$ | 1,054,695 | $ | 934,642 | $ | 1,597,702 | $ | 1,122,056 | $ | 91,076 | $ | 187,352 | $ | 2,377 | $ | 544,550 | $ | 5,534,450 | ||||||||||||||||||
Provision charged to operations
|
217,501 | 15,757 | 241,180 | (115,451 | ) | 148,497 | 22,076 | 6,803 | 63,635 | 599,998 | ||||||||||||||||||||||||||
Loans charged off
|
(32,650 | ) | (144,827 | ) | 0 | 0 | 0 | (77,858 | ) | (6,001 | ) | 0 | (261,336 | ) | ||||||||||||||||||||||
Recoveries of loans charged off
|
3,403 | 5,427 | 0 | 0 | 0 | 0 | 0 | 0 | 8,830 | |||||||||||||||||||||||||||
Balance - March 31, 2012
|
$ | 1,242,949 | $ | 810,999 | $ | 1,838,882 | $ | 1,006,605 | $ | 239,573 | $ | 131,570 | $ | 3,179 | $ | 608,185 | $ | 5,881,942 | ||||||||||||||||||
Provision charged to operations
|
429,656 | 111,410 | 464,946 | 147,278 | 13,631 | (8,357 | ) | (381 | ) | (608,185 | ) | 549,998 | ||||||||||||||||||||||||
Loans charged off
|
(25,000 | ) | (20,199 | ) | 0 | 0 | (130,694 | ) | 0 | 0 | 0 | (175,893 | ) | |||||||||||||||||||||||
Recoveries of loans charged off
|
0 | 1,191 | 182 | 0 | 0 | 0 | 0 | 0 | 1,373 | |||||||||||||||||||||||||||
Balance - June 30, 2012
|
$ | 1,647,605 | $ | 903,401 | $ | 2,304,010 | $ | 1,153,883 | $ | 122,510 | $ | 123,213 | $ | 2,798 | $ | 0 | $ | 6,257,420 |
Construction
|
Commercial
Business
|
Commercial
Real Estate
|
Mortgage
Warehouse
|
Residential
Real Estate
|
Consumer
|
Other
|
Unallocated
|
Total
|
||||||||||||||||||||||||||||
Balance - December 31, 2010
|
$ | 1,744,068 | $ | 971,994 | $ | 1,723,865 | $ | 763,092 | $ | 67,828 | $ | 192,457 | $ | 1,910 | $ | 297,498 | $ | 5,762,712 | ||||||||||||||||||
Provision charged to operations
|
1,183,736 | (55,760 | ) | (318,432 | ) | (344,826 | ) | 9,777 | (1,990 | ) | 571 | (73,078 | ) | 399,998 | ||||||||||||||||||||||
Loans charged off
|
(366,587 | ) | (46,319 | ) | - | - | - | - | - | - | (412,906 | ) | ||||||||||||||||||||||||
Recoveries of loans charged off
|
- | 239 | - | - | - | - | - | - | 239 | |||||||||||||||||||||||||||
Balance - March 31, 2011
|
$ | 2,561,217 | $ | 870,154 | $ | 1,405,433 | $ | 418,266 | $ | 77,605 | $ | 190,467 | $ | 2,481 | $ | 224,420 | $ | 5,750,043 | ||||||||||||||||||
Provision charged to operations
|
52,940 | 48,806 | 215,679 | 110,442 | (370 | ) | (3,016 | ) | (28 | ) | (149,453 | ) | 275,000 | |||||||||||||||||||||||
Loans charged off
|
(158,900 | ) | - | - | - | - | - | - | - | (158,900 | ) | |||||||||||||||||||||||||
Recoveries of loans charged off
|
- | 3,438 | - | - | - | - | - | - | 3,438 | |||||||||||||||||||||||||||
Balance - June 30, 2011
|
$ | 2,455,257 | $ | 922,398 | $ | 1,621,112 | $ | 528,708 | $ | 77,235 | $ | 187,451 | $ | 2,453 | $ | 74,967 | $ | 5,869,581 |
Impaired Loans Receivables (By Class) – June 30, 2012
|
||||||||||||||||||||||||||||||||||||||||||||
Recorded
Investment
|
Unpaid
Principal
Balance
|
Related
Allowance
|
Quarter-
End June
30, 2012
Average
Recorded
Investment
|
Quarter-
End June
30, 2011
Average
Recorded
Investment
|
Year to
Date 2012
Average
Recorded
Investment
|
Year to
Date 2011
Average
Recorded
Investment
|
Quarter-
End June
30, 2011
Interest
Income
Recognized
|
Quarter-
End June
30, 2011
Interest
Income
Recognized
|
Year to
Date 2012
Interest
Income
Recognized
|
Year to
Date 2011
Interest
Income
Recognized
|
||||||||||||||||||||||||||||||||||
With no
related
allowance:
|
||||||||||||||||||||||||||||||||||||||||||||
Commercial
|
||||||||||||||||||||||||||||||||||||||||||||
Construction
|
$ | 0 | $ | 0 | $ | 0 | $ | 35,802 | $ | 113,947 | $ | 71,603 | $ | 1,555,877 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||||||||||
Commercial
Business |
431,381 | 474,063 | 0 | 423,129 | 348,094 | 415,353 | 286,550 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||||||||
Commercial
Real Estate
|
0 | 0 | 0 | 81,666 | 292,682 | 208,536 | 358,490 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||||||||
Mortgage
Warehouse
Lines
|
0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||
Subtotal
|
431,381 | 474,063 | 0 | 540,597 | 754,723 | 695,492 | 2,200,917 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||||||||
Residential
Real Estate |
0 | 0 | 0 | 0 | 0 | 47,199 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||||||||
Consumer
|
||||||||||||||||||||||||||||||||||||||||||||
Loans to
Individuals
|
54,904 | 54,904 | 0 | 54,904 | 0 | 54,904 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||||||||
Other
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||||||||
Subtotal
|
54,904 | 54,904 | 0 | 54,904 | 0 | 54,904 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||||||||
Subtotal
With no
related
allowance:
|
486,285 | 528,967 | 0 | 595,501 | 754,723 | 797,595 | 2,200,917 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||||||||
With an
allowance:
|
||||||||||||||||||||||||||||||||||||||||||||
Commercial
|
||||||||||||||||||||||||||||||||||||||||||||
Construction
|
0 | 0 | 0 | 0 | 3,268,474 | 0 | 3,154,480 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||||||||
Commercial
Business
|
420,438 | 565,265 | 138,597 | 435,032 | 832,399 | 429,700 | 593,070 | 3,790 | 0 | 7,439 | 0 | |||||||||||||||||||||||||||||||||
Commercial
Real Estate
|
2,507,360 | 2,614,922 | 357,074 | 2,313,770 | 1,111,122 | 1,952,730 | 1,047,746 | 6,792 | 0 | 14,209 | 0 | |||||||||||||||||||||||||||||||||
Mortgage
Warehouse
Lines
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||||||||
Subtotal
|
2,927,798 | 3,180,187 | 495,671 | 2,748,802 | 5,211,995 | 2,382,430 | 4,795,296 | 10,582 | 0 | 21,648 | 0 | |||||||||||||||||||||||||||||||||
Residential
Real Estate
|
140,492 | 140,492 | 28,566 | 313,517 | 519,000 | 439,616 | 432,854 | 0 | 3,028 | 0 | 4,544 | |||||||||||||||||||||||||||||||||
Consumer
|
||||||||||||||||||||||||||||||||||||||||||||
Loans to
Individuals
|
0 | 0 | 0 | 0 | 77,858 | 0 | 77,858 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||||||||
Other
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||||||||
Subtotal
|
0 | 0 | 0 | 0 | 77,858 | 0 | 77,858 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||||||||
Subtotal
with an
allowance:
|
3,068,290 | 3,320,679 | 524,237 | 3,062,319 | 5,808,853 | 2,822,046 | 5,306,008 | 10,582 | 3,028 | 21,648 | 4,544 | |||||||||||||||||||||||||||||||||
Total:
|
||||||||||||||||||||||||||||||||||||||||||||
Commercial
|
3,359,179 | 3,654,250 | 495,671 | 3,289,399 | 5,966,718 | 3,077,922 | 6,996,213 | 10,582 | 0 | 21,648 | 0 | |||||||||||||||||||||||||||||||||
Residential
Real Estate
|
140,492 | 140,492 | 28,566 | 313,517 | 519,000 | 486,815 | 432,854 | 0 | 3,028 | 0 | 4,544 | |||||||||||||||||||||||||||||||||
Consumer
|
54,904 | 54,904 | 0 | 54,904 | 77,858 | 54,904 | 77,858 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||||||||
Total
|
$ | 3,554,575 | $ | 3,849,646 | $ | 524,237 | $ | 3,657,820 | $ | 6,563,576 | $ | 3,619,641 | $ | 7,506,925 | $ | 10,582 | $ | 3,028 | $ | 21,648 | $ | 4,544 |
Impaired Loans Receivables (By Class)
|
|||||
December 31 ,2011
|
|||||
Recorded
Investment
|
Unpaid
Principal Balance
|
Related
Allowance
|
Year to Date
Average
Recorded
Investment
|
Year to Date
Interest Income
Recognized
|
|
With no related allowance:
|
|||||
Commercial
|
Construction
|
$140,055
|
$277,405
|
$0
|
$610,358
|
$0
|
Commercial Business
|
381,190
|
426,803
|
0
|
257,942
|
0
|
Commercial Real Estate
|
503,877
|
611,389
|
0
|
457,464
|
0
|
Mortgage Warehouse Lines
|
0
|
0
|
0
|
0
|
0
|
Subtotal
|
1,025,122
|
1,315,597
|
0
|
1,325,764
|
0
|
Residential Real Estate
|
142,477
|
142,477
|
0
|
11,873
|
|
Consumer
|
|||||
Loans to Individuals
|
0
|
0
|
0
|
0
|
0
|
Other
|
0
|
0
|
0
|
0
|
0
|
Subtotal
|
0
|
0
|
0
|
0
|
0
|
Subtotal with no Related Allowance
|
1,167,599
|
1,315,597
|
0
|
1,337,637
|
0
|
With an allowance:
|
|||||
Commercial
|
|||||
Construction
|
0
|
0
|
0
|
2,389,162
|
0
|
Commercial Business
|
570,966
|
570,966
|
283,424
|
791,808
|
10,001
|
Commercial Real Estate
|
1,430,243
|
1,430,243
|
186,055
|
1,036,007
|
2,294
|
Mortgage Warehouse Lines
|
0
|
0
|
0
|
0
|
0
|
Subtotal
|
2,001,209
|
2,001,209
|
469,479
|
4,216,977
|
12,295
|
Residential Real Estate
|
518,694
|
518,694
|
11,619
|
490,081
|
0
|
Consumer
|
|||||
Loans to Individuals
|
77,858
|
77,858
|
77,858
|
77,858
|
0
|
Other
|
0
|
0
|
0
|
0
|
0
|
Subtotal
|
77,858
|
77,858
|
77,858
|
77,858
|
0
|
Subtotal with an Allowance
|
2,597,761
|
2,597,761
|
558,956
|
4,784,916
|
12,295
|
Total:
|
|||||
Commercial
|
3,026,331
|
3,316,806
|
469,479
|
5,542,741
|
12,295
|
Residential Real Estate
|
661,171
|
518,694
|
11,619
|
501,954
|
0
|
Consumer
|
77,858
|
77,858
|
77,858
|
77,858
|
0
|
Total
|
$3,765,360
|
$3,913,358
|
$558,956
|
$6,122,553
|
$12,295
|
Number of
Contracts
|
Pre-modification
outstanding Recorded
Investment
|
Post-Modification
Outstanding Recorded
Investment
|
||||||||||
Troubled Debt Restructurings:
|
||||||||||||
Commercial
|
1 | $ | 137,028 | $ | 137,028 | |||||||
Number of
Contracts |
Recorded
Investment
|
||||||||||
Troubled Debt Restructurings
During the Prior Twelve Months
that subsequently Defaulted:
|
|||||||||||
Commercial
|
1 | $ | 22,471 | ||||||||
Residential Real Estate
|
1 | $ | 518,694 |
Weighted
|
||||||||||||||||
Average
|
||||||||||||||||
Weighted
|
Remaining
|
Aggregate
|
||||||||||||||
Number of
|
Average
|
Contractual
|
Intrinsic
|
|||||||||||||
Stock Options
|
Shares
|
Exercise Price
|
Term (years)
|
Value
|
||||||||||||
Outstanding at January 1, 2012
|
196,906 | $9.66 | ||||||||||||||
Granted
|
26,670 | 6.42 | ||||||||||||||
Exercised
|
(327 | ) | 5.96 | |||||||||||||
Forfeited
|
- | - | ||||||||||||||
Expired
|
- | - | ||||||||||||||
Outstanding at June 30, 2012
|
223,249 | $9.28 | 6.1 | $ | 293,458 | |||||||||||
Exercisable at June 30, 2012
|
162,094 | $10.25 | 5.1 | $ | 104,972 |
Fair value of options granted
|
$2.20 | |||
Risk-free rate of return
|
0.84 | % | ||
Expected option life in years
|
7 | |||
Expected volatility
|
31.48 | % | ||
Expected dividends (1)
|
- |
Average
|
||||||||
Number of
|
Grant Date
|
|||||||
Non-vested shares
|
Shares
|
Fair Value
|
||||||
Non-vested at January 1, 2012
|
151,753 | $6.87 | ||||||
Granted
|
1,995 | 6.42 | ||||||
Vested
|
(20,875 | ) | 8.12 | |||||
Forfeited
|
- | - | ||||||
Non-vested at June 30, 2012
|
132,873 | $6.67 |
Three months ended
June 30,
|
Six months ended
June 30,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Service cost
|
$ | 61,823 | $ | 68,425 | $ | 123,646 | $ | 136,850 | ||||||||
Interest cost
|
50,073 | 57,057 | 100,146 | 114,114 | ||||||||||||
Actuarial (gain) loss recognized
|
5,300 | (2,062 | ) | 10,600 | (4,124 | ) | ||||||||||
Prior service cost recognized
|
24,858 | 19,859 | 49,716 | 39,718 | ||||||||||||
$ | 142,054 | $ | 143,279 | $ | 284,108 | $ | 286,558 |
June 30,
|
December 31,
|
|||||||
2012
|
2011
|
|||||||
Unrealized holding gains on securities available for sale
|
$ | 2,375,768 | $ | 2,318,299 | ||||
Related income tax effect
|
(807,760 | ) | (788,221 | ) | ||||
1,568,008 | 1,530,078 | |||||||
Unrealized impairment loss on held to maturity security
|
(500,944 | ) | (500,944 | ) | ||||
Related income tax effect
|
170,321 | 170,321 | ||||||
(330,623 | ) | (330,623 | ) | |||||
Pension liability
|
(172,220 | ) | (178,661 | ) | ||||
Related income tax effect
|
68,079 | 70,668 | ||||||
(104,141 | ) | (107,993 | ) | |||||
Accumulated other comprehensive income
|
$ | 1,133,244 | $ | 1,091,462 |
Three months ended
June 30,
|
Six months ended
June 30,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Unrealized holding gains on
securities available for sale
|
$ | 42,628 | $ | 1,418,929 | $ | 57,469 | $ | 1,241,357 | ||||||||
Related income tax effect
|
(14,493 | ) | (482,436 | ) | (19,539 | ) | (422,061 | ) | ||||||||
28,135 | 936,493 | 37,930 | 819,296 | |||||||||||||
Unrealized holding loss
on interest rate swap contract
|
- | 179,773 | - | 353,552 | ||||||||||||
Related income tax effect
|
- | (72,582 | ) | - | (141,990 | ) | ||||||||||
- | 107,191 | - | 211,562 | |||||||||||||
Pension liability
|
3,220 | 3,219 | 6,441 | 6,438 | ||||||||||||
Related income tax effect
|
(1,294 | ) | (1,293 | ) | (2,589 | ) | (2,585 | ) | ||||||||
1,926 | 1,926 | 3,852 | 3,853 | |||||||||||||
Other comprehensive income
|
$ | 30,061 | $ | 1,045,610 | $ | 41,782 | $ | 1,034,711 |
Level 1:
|
Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
|
Level 2:
|
Quoted prices in markets that are not active, or inputs that are observable either directly or indirectly, for substantially the full term of the asset or liability.
|
Level 3:
|
Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported with little or no market activity).
|
Level 1
Inputs
|
Level 2
Inputs
|
Level 3
Inputs
|
Total Fair
Value
|
|||||||||||||
June 30, 2012:
|
||||||||||||||||
Securities available for sale:
|
||||||||||||||||
U. S. Treasury securities and
|
||||||||||||||||
obligations of U.S. Government
|
||||||||||||||||
sponsored corporations (“GSE”) and agencies
|
$ |
17,100,100
|
$ |
-
|
$ |
-
|
$ |
17,100,100
|
||||||||
Residential collateralized mortgage obligations- GSE
|
-
|
11,466,705
|
-
|
11,466,705
|
||||||||||||
Residential collateralized mortgage obligations - non GSE
|
-
|
3,632,985
|
-
|
3,632,985
|
||||||||||||
Residential mortgage backed securities – GSE
|
-
|
36,877,742
|
-
|
36,877,742
|
||||||||||||
Obligations of State and Political subdivisions
|
-
|
5,739,097
|
-
|
5,739,097
|
||||||||||||
Trust preferred debt securities – single issuer
|
-
|
1,895,973
|
-
|
1,895,973
|
||||||||||||
Corporate debt securities
|
-
|
19,076,196
|
-
|
19,076,196
|
||||||||||||
Restricted stock
|
-
|
1,723,800
|
-
|
1,723,800
|
||||||||||||
Mutual fund
|
-
|
25,000
|
-
|
25,000
|
||||||||||||
December 31, 2011:
|
||||||||||||||||
Securities available for sale:
|
||||||||||||||||
U. S. Treasury securities and
|
||||||||||||||||
obligations of U.S. Government
|
||||||||||||||||
sponsored corporations (“GSE”) and agencies
|
$ |
7,108,870
|
$ |
12,363,819
|
-
|
$ |
19,472,689
|
|||||||||
Residential collateralized mortgage obligations- GSE
|
-
|
13,898,133
|
-
|
13,898,133
|
||||||||||||
Residential collateralized mortgage obligations - non GSE
|
-
|
4,300,444
|
-
|
4,300,444
|
||||||||||||
Residential mortgage backed securities – GSE
|
-
|
42,687,209
|
-
|
42,687,209
|
||||||||||||
Obligations of State and Political subdivisions
|
-
|
5,700,514
|
-
|
5,700,514
|
||||||||||||
Trust preferred debt securities – single issuer
|
-
|
1,751,241
|
-
|
1,751,241
|
||||||||||||
Corporate debt securities
|
-
|
1,435,944
|
-
|
1,435,944
|
||||||||||||
Restricted stock
|
-
|
4,412,600
|
-
|
4,412,600
|
||||||||||||
Mutual fund
|
-
|
25,000
|
-
|
25,000
|
Level 1
Inputs
|
Level 2
Inputs
|
Level 3
Inputs
|
Total Fair
Value
|
|||||||||||||
June 30, 2012:
|
||||||||||||||||
Impaired loans
|
-
|
-
|
$ |
2,544,053
|
$ |
2,544,053
|
||||||||||
Other real estate owned
|
-
|
-
|
3,000,619
|
3,000,619
|
||||||||||||
December 31, 2011:
|
||||||||||||||||
Impaired loans
|
-
|
-
|
$ |
2,038,805
|
$ |
2,038,805
|
||||||||||
Other real estate owned
|
-
|
-
|
491,536
|
491,536
|
Quantitative Information about Level 3 Fair Value Measurements
|
||||||||
Fair Value
Estimate
|
Valuation
Techniques
|
Unobservable
Input
|
Range of
Adjustments
|
|||||
June 30, 2012
|
||||||||
Impaired loans
|
$2,544,053 |
Appraisal of
|
Appraisal
|
|||||
collateral (1)
|
adjustments (1)
|
5-50% | ||||||
$3,000,619 | ||||||||
Other Real Estate Owned
|
Appraisal of
|
Appraisal
|
||||||
collateral (1)
|
adjustments (1),(2)
|
8-60%
|
|
(1)
|
Fair value is generally determined through independent appraisals of the underlying collateral, which generally include various Level 3 inputs that are not identifiable.
|
|
(2)
|
Includes qualitative adjustments by management and estimated liquidation expenses
|
December 31, 2011
|
||||||||
Carrying
|
Fair
|
|||||||
Value
|
Value
|
|||||||
Cash and cash equivalents
|
$ |
15,195,259
|
$ |
15,195,259
|
||||
Securities available for sale
|
93,683,774
|
93,683,774
|
||||||
Securities held to maturity
|
142,474,423
|
147,621,280
|
||||||
Loans held for sale
|
19,234,111
|
19,234,111
|
||||||
Loans, net
|
469,897,000
|
471,634,000
|
||||||
Accrued interest receivable
|
2,996,848
|
2,996,848
|
||||||
Deposits
|
(623,862,485
|
)
|
(625,764,000
|
)
|
||||
Borrowings
|
(88,300,000
|
)
|
(90,163,000
|
)
|
||||
Redeemable subordinated debentures
|
(18,557,000
|
)
|
(18,557,000
|
)
|
||||
Accrued interest payable
|
(1,186,511
|
)
|
(1,186,511
|
)
|
June 30, 2012 | |||||||||||||||||
Carrying
|
Level 1
|
Level 2
|
Level 3
|
Fair
|
|||||||||||||
Value
|
Inputs
|
Inputs
|
Inputs
|
Value
|
|||||||||||||
Cash and cash equivalents
|
$16,579,398
|
$
|
-
|
$ |
16,579,398
|
$
|
-
|
$ |
16,579,398
|
||||||||
Securities available for sale
|
97,537,598
|
17,100,100
|
80,437,498
|
-
|
97,537,598
|
||||||||||||
Securities held to maturity
|
122,992,218
|
-
|
128,856,455
|
-
|
128,856,455
|
||||||||||||
Loans held for sale
|
16,595,846
|
16,595,846
|
-
|
-
|
16,595,846
|
||||||||||||
Loans, net
|
473,537,672
|
-
|
-
|
476,920,000
|
476,920,000
|
||||||||||||
Accrued interest receivable
|
2,767,959
|
-
|
2,767,959
|
-
|
2,767,959
|
||||||||||||
Deposits
|
(669,071,450)
|
-
|
(670,964,000)
|
-
|
(670,964,000
|
)
|
|||||||||||
Borrowings
|
(25,300,000)
|
-
|
(26,945,000)
|
-
|
(26,945,000
|
)
|
|||||||||||
Redeemable subordinated debentures
|
(18,557,000)
|
-
|
(18,557,000)
|
-
|
(18,557,000
|
)
|
|||||||||||
Accrued interest payable
|
(1,010,905)
|
-
|
(1,010,905)
|
-
|
(1,010,905
|
)
|
Non-interest Expenses
|
||||||||
Three months ended June 30,
|
||||||||
2012
|
2011
|
|||||||
Salaries and employee benefits
|
$ |
3,154,903
|
$ |
2,843,948
|
||||
Occupancy expenses
|
613,534
|
580,969
|
||||||
Data processing services
|
252,545
|
313,776
|
||||||
Marketing
|
53,789
|
52,021
|
||||||
Regulatory, professional and other fees
|
232,028
|
286,084
|
||||||
FDIC insurance expense
|
139,873
|
246,458
|
||||||
Other real estate owned expenses
|
418,563
|
72,971
|
||||||
Amortization of intangible assets
|
66,991
|
66,992
|
||||||
All other expenses
|
418,748
|
692,566
|
||||||
$ |
5,373,974
|
$ |
5,155,785
|
|||||
Average Balance Sheets with Resultant Interest and Rates
|
||||||||||||||||||||||||
(yields on a tax-equivalent basis)
|
Six months ended June 30, 2012
|
Six months ended June 30, 2011
|
||||||||||||||||||||||
Average
Balance
|
Interest
|
Average
Rate
|
Average
Balance
|
Interest
|
Average
Rate
|
|||||||||||||||||||
Assets:
|
||||||||||||||||||||||||
Federal Funds Sold/Short-Term Investments
|
$ |
36,860,458
|
$ |
48,340
|
0.26%
|
$ |
53,784,770
|
$ |
72,110
|
0.27%
|
||||||||||||||
Investment Securities:
|
||||||||||||||||||||||||
Taxable
|
171,349,167
|
2,327,759
|
2.72%
|
208,521,295
|
2,788,077
|
2.70%
|
||||||||||||||||||
Tax-exempt
|
51,276,230
|
1,230,374
|
4.81%
|
37,213,024
|
942,463
|
5.04%
|
||||||||||||||||||
Total
|
222,625,397
|
3,558,133
|
3.21%
|
245,734,319
|
3,730,540
|
3.06%
|
||||||||||||||||||
Loan Portfolio:
|
||||||||||||||||||||||||
Construction
|
54,948,513
|
1,855,335
|
6.77%
|
64,630,882
|
1,994,670
|
6.22%
|
||||||||||||||||||
Residential real estate
|
12,303,773
|
316,592
|
5.16%
|
10,512,306
|
322,570
|
6.19%
|
||||||||||||||||||
Home Equity
|
10,779,569
|
303,956
|
5.65%
|
12,380,687
|
353,045
|
5.75%
|
||||||||||||||||||
Commercial and commercial real estate
|
144,033,903
|
5,287,559
|
7.36%
|
131,980,885
|
5,047,386
|
7.71%
|
||||||||||||||||||
Mortgage warehouse lines
|
184,622,769
|
4,396,188
|
4.78%
|
95,073,344
|
2,348,262
|
4.98%
|
||||||||||||||||||
Installment
|
378,818
|
12,629
|
6.69%
|
429,371
|
14,948
|
7.02%
|
||||||||||||||||||
All Other Loans
|
32,259,311
|
561,304
|
3.49%
|
23,078,861
|
440,765
|
3.85%
|
||||||||||||||||||
Total
|
439,326,656
|
12,733,563
|
5.81%
|
338,086,336
|
10,521,646
|
6.28%
|
||||||||||||||||||
Total Interest-Earning Assets
|
698,812,511
|
16,340,036
|
4.69%
|
637,605,425
|
14,324,296
|
4.53%
|
||||||||||||||||||
Allowance for Loan Losses
|
(5,955,926)
|
(6,007,813)
|
||||||||||||||||||||||
Cash and Due From Bank
|
12,726,136
|
23,608,726
|
||||||||||||||||||||||
Other Assets
|
52,881,065
|
39,973,930
|
||||||||||||||||||||||
Total Assets
|
$ |
758,463,786
|
$ |
695,180,268
|
||||||||||||||||||||
Liabilities and Shareholders’ Equity:
Interest-Bearing Liabilities:
|
||||||||||||||||||||||||
Money Market and NOW Accounts
|
$ |
204,902,097
|
$ |
542,887
|
0.53%
|
$ |
164,207,897
|
$ |
853,425
|
1.05%
|
||||||||||||||
Savings Accounts
|
191,355,779
|
620,354
|
0.65%
|
179,218,559
|
747,154
|
0.84%
|
||||||||||||||||||
Certificates of Deposit
|
147,499,965
|
1,101,598
|
1.50%
|
157,516,362
|
1,327,825
|
1.70%
|
||||||||||||||||||
Other Borrowed Funds
|
16,220,330
|
221,561
|
2.74%
|
11,396,740
|
210,632
|
3.56%
|
||||||||||||||||||
Trust Preferred Securities
|
18,557,000
|
195,892
|
2.12%
|
18,557,000
|
501,434
|
5.37%
|
||||||||||||||||||
Total Interest-Bearing Liabilities
|
578,535,171
|
2,682,292
|
0.93%
|
531,436,558
|
3,640,470
|
1.38%
|
||||||||||||||||||
Net Interest Spread
|
3.76%
|
3.15%
|
||||||||||||||||||||||
Demand Deposits
|
115,201,429
|
103,997,443
|
||||||||||||||||||||||
Other Liabilities
|
8,634,205
|
9,677,753
|
||||||||||||||||||||||
Total Liabilities
|
702,370,805
|
645,111,754
|
||||||||||||||||||||||
Shareholders’ Equity
|
56,092,981
|
50,068,514
|
||||||||||||||||||||||
Total Liabilities and Shareholders’
Equity
|
$ |
758,463,786
|
$ |
695,180,268
|
||||||||||||||||||||
Net Interest Margin
|
$ |
13,657,744
|
3.92%
|
$ |
10,683,826
|
3.38%
|
||||||||||||||||||
Non-interest Expenses
|
Six months ended June 30,
|
||||
2012
|
2011
|
||||
Salaries and employee benefits
|
$ |
6,095,253
|
$5,420,612
|
||
Occupancy expenses
|
1,337,320
|
1,147,707
|
|||
Data processing services
|
516,120
|
617,249
|
|||
Marketing
|
98,824
|
79,987
|
|||
Regulatory, professional and other fees
|
414,736
|
484,236
|
|||
FDIC insurance expense
|
287,266
|
474,005
|
|||
Other real estate owned expenses
|
819,190
|
309,352
|
|||
Amortization of intangible assets
|
133,983
|
76,170
|
|||
All other expenses
|
1,283,799
|
1,209,299
|
|||
$ |
10,986,491
|
$9,818,617
|
Loan Portfolio Composition
|
June 30, 2012
|
December 31, 2011
|
|||||||||||
Component
|
Amount
|
%
of total
|
Amount
|
%
of total
|
|||||||||
Construction loans
|
$ | 59,650,806 | 12% | $ | 49,285,783 | 10% | |||||||
Residential real estate loans
|
11,324,340 | 2% | 12,885,352 | 3% | |||||||||
Commercial business
|
58,059,665 | 12% | 50,784,674 | 11% | |||||||||
Commercial real estate
|
107,365,638 | 22% | 99,636,976 | 21% | |||||||||
Mortgage warehouse lines
|
230,776,678 | 48% | 249,345,831 | 52% | |||||||||
Loans to individuals
|
11,439,694 | 2% | 12,219,640 | 3% | |||||||||
Deferred loan fees and costs
|
950,823 | 0% | 1,017,959 | 0% | |||||||||
All other loans
|
227,448 | 0% | 255,556 | 0% | |||||||||
$ | 479,795,092 | 100% | $ | 475,431,771 | 100% |
|
|||
Non-Performing Assets and Loans
|
June 30,
|
December 31,
|
|
2012
|
2011
|
||
Non-Performing loans:
|
|||
Loans 90 days or more past due and still accruing
|
$0
|
$0
|
|
Non-accrual loans
|
2,698,955
|
2,991,470
|
|
Total non-performing loans
|
2,698,955
|
2,991,470
|
|
Other real estate owned
|
11,604,744
|
12,409,201
|
|
Total non-performing assets
|
$14,303,699
|
$15,400,671
|
|
Non-performing loans to total loans
|
0.56%
|
0.63%
|
|
Non-performing loans to total loans excluding mortgage warehouse lines
|
1.08%
|
1.32%
|
|
Non-performing assets to total assets
|
1.84%
|
1.95%
|
|
Non-performing assets to total assets excluding mortgage warehouse lines
|
2.62%
|
2.84%
|
|
|
·
|
General economic conditions;
|
|
·
|
Trends in charge-offs;
|
|
·
|
Trends and levels of delinquent loans;
|
|
·
|
Trends and levels of non-performing loans, including loans over 90 days delinquent;
|
|
·
|
Trends in volume and terms of loans;
|
|
·
|
Levels of allowance for specific classified loans; and
|
|
·
|
Credit concentrations:
|
Allowance for Loan Losses
|
||||||||||||
June 30,
|
December 31,
|
June 30,
|
||||||||||
2012
|
2011
|
2011
|
||||||||||
Balance, beginning of period
|
$ | 5,534,450 | $ | 5,762,712 | $ | 5,762,712 | ||||||
Provision charged to operating expenses
|
1,149,996 | 2,558,328 | 674,998 | |||||||||
Loans charged off :
|
||||||||||||
Construction loans
|
(57,650 | ) | (2,361,783 | ) | (525,488 | ) | ||||||
Residential real estate loans
|
(130,694 | ) | - | - | ||||||||
Commercial and commercial real estate
|
(165,026 | ) | (437,699 | ) | (46,319 | ) | ||||||
Loans to individuals
|
(77,858 | ) | - | - | ||||||||
Lease financing
|
- | - | - | |||||||||
All other loans
|
(6,001 | ) | - | - | ||||||||
(437,229 | ) | (2,799,482 | ) | (571,807 | ) | |||||||
Recoveries
|
||||||||||||
Construction loans
|
3,403 | 8,951 | - | |||||||||
Residential real estate loans
|
- | - | - | |||||||||
Commercial and commercial real estate
|
6,800 | 3,941 | 3,678 | |||||||||
Loans to individuals
|
- | - | - | |||||||||
Lease financing
|
- | - | - | |||||||||
All other loans
|
- | - | - | |||||||||
10,203 | 12,892 | 3,678 | ||||||||||
Net (charge offs) / recoveries
|
(427,026 | ) | (2,786,590 | ) | (568,129 | ) | ||||||
Balance, end of period
|
$ | 6,257,420 | $ | 5,534,450 | $ | 5,869,581 | ||||||
Loans :
|
||||||||||||
At period end
|
$ | 479,795,092 | $ | 475,431,771 | $ | 339,867,302 | ||||||
Average during the period
|
421,111,355 | 362,289,390 | 326,804,031 | |||||||||
Net charge offs to average loans outstanding
(annualized)
|
(0.10 | %) | (0.77 | %) | (0.17 | %) | ||||||
Allowance for loan losses to :
|
||||||||||||
Total loans at period end
|
1.30 | % | 1.16 | % | 1.73 | % | ||||||
Total loans at period end excluding mortgage
warehouse lines
|
2.05 | % | 1.95 | % | 2.40 | % | ||||||
Non-performing loans
|
231.85 | % | 185.01 | % | 103.17 | % | ||||||
June 30, 2012
|
December 31, 2011
|
|||||||
Demand
|
||||||||
Non-interest bearing
|
$ |
129,822,625
|
$ |
105,470,543
|
||||
Interest bearing
|
197,636,733
|
201,987,751
|
||||||
Savings
|
190,844,887
|
176,198,907
|
||||||
Time
|
150,767,205
|
140,205,284
|
||||||
$ |
669,071,450
|
$ |
623,862,485
|
|||||
Actual
|
For Capital
Adequacy Purposes
|
To Be Well Capitalized
Under Prompt
Corrective Action
Provision
|
|||||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
||||||||||||||
As of June 30, 2012
|
|||||||||||||||||||
Company
|
|||||||||||||||||||
Total Capital to Risk Weighted Assets
|
$ |
75,505,924
|
12.51%
|
$ |
48,292,720
|
>8%
|
N/A
|
N/A
|
|||||||||||
Tier 1 Capital to Risk Weighted Assets
|
69,248,504
|
11.47%
|
24,146,360
|
>4%
|
N/A
|
N/A
|
|||||||||||||
Tier 1 Capital to Average Assets
|
69,248,504
|
9.16%
|
30,236,111
|
>4%
|
N/A
|
N/A
|
|||||||||||||
Bank
|
|||||||||||||||||||
Total Capital to Risk Weighted Assets
|
$ |
72,789,414
|
12.06%
|
$ |
48,292,720
|
>8%
|
$ |
60,365,900
|
>10%
|
||||||||||
Tier 1 Capital to Risk Weighted Assets
|
66,531,994
|
11.02%
|
24,146,360
|
>4%
|
36,219,540
|
>6%
|
|||||||||||||
Tier 1 Capital to Average Assets
|
66,531,994
|
8.83%
|
30,145,771
|
>4%
|
37,682,241
|
>5%
|
As of December 31, 2011
|
|||||||||||||||||||
Company
|
|||||||||||||||||||
Total Capital to Risk Weighted Assets
|
$ |
72,037,863
|
12.22%
|
$ |
40,335,354
|
>8%
|
N/A
|
N/A
|
|||||||||||
Tier 1 Capital to Risk Weighted Assets
|
66,434,272
|
11.27%
|
20,167,677
|
>4%
|
N/A
|
N/A
|
|||||||||||||
Tier 1 Capital to Average Assets
|
66,434,272
|
8.82%
|
27,196,758
|
>4%
|
N/A
|
N/A
|
|||||||||||||
Bank
|
|||||||||||||||||||
Total Capital to Risk Weighted Assets
|
$ |
69,172,940
|
11.73%
|
$ |
40,272,800
|
>8%
|
$ |
58,956,000
|
>10%
|
||||||||||
Tier 1 Capital to Risk Weighted Assets
|
63,638,489
|
10.79%
|
20,136,400
|
>4%
|
35,373,600
|
>6%
|
|||||||||||||
Tier 1 Capital to Average Assets
|
63,638,489
|
8.49%
|
27,054,854
|
>4%
|
37,479,475
|
>5%
|
|||||||||||||
Period
|
Total
Number
of Shares
Purchased
|
Average
Price Paid
Per Share
|
Total Number of
Shares Purchased As
Part of Publicly
Announced Plan or
Program
|
Maximum Number of
Shares That May Yet
be Purchased Under
the Plan or Program
|
|||||||||||||
Beginning
|
Ending
|
||||||||||||||||
April 1, 2012
|
April 30, 2012
|
-
|
-
|
-
|
178,628
|
||||||||||||
May 1, 2012
|
May 31, 2012
|
-
|
-
|
-
|
178,628
|
||||||||||||
June 1, 2012
|
June 30, 2012
|
-
|
-
|
-
|
178,628
|
||||||||||||
Total
|
-
|
-
|
-
|
178,628
|
(1)
|
The Company’s common stock repurchase program covers a maximum of 195,076 shares of common stock of the Company, representing 5% of the outstanding common stock of the Company on July 21, 2005, as adjusted for the subsequent common stock dividends.
|
Exhibits.
|
31.1
|
*
|
Certification of Robert F. Mangano, principal executive officer of the Company, pursuant to Securities Exchange Act Rule 13a-14(a)
|
31.2
|
*
|
Certification of Joseph M. Reardon, principal financial officer of the Company, pursuant to Securities Exchange Act Rule 13a-14(a)
|
32
|
*
|
Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of The Sarbanes-Oxley Act of 2002, signed by Robert F. Mangano, principal executive officer of the Company, and Joseph M. Reardon, principal financial officer of the Company
|
101.INS
|
*
|
XBRL Instance DocumentX
|
101.SCH
|
*
|
XBRL Taxonomy Extension Schema DocumentX
|
101.CAL
|
*
|
XBRL Taxonomy Extension Calculation Linkbase DocumentX
|
101.DEF
|
*
|
XBRL Taxonomy Extension Definition Linkbase DocumentX
|
101.LAB
|
*
|
XBRL Taxonomy Extension Label Linkbase DocumentX
|
101.PRE
|
*
|
XBRL Taxonomy Extension Presentation Linkbase DocumentX
|
*
|
Filed herewith.
|
X
|
These interactive data files are being furnished as part of this Quarterly Report, and in accordance with Rule 402 of Regulation S-T, shall not be deemed filed for purposes of Section 11 or 12 of the Securities Act of 1933, as amended, or Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability under those sections.
|
1ST CONSTITUTION BANCORP
|
|||
Date: August 14, 2012
|
By:
|
/s/ Robert F. Mangano
|
|
Robert F. Mangano
|
|||
President and Chief Executive Officer
|
|||
(Principal Executive Officer)
|
|||
Date: August 14, 2012
|
By:
|
/s/ Joseph M. Reardon
|
|
Joseph M. Reardon
|
|||
Senior Vice President and Treasurer
|
|||
(Principal Financial and Accounting Officer)
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of 1st Constitution 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 registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
/s/ Robert F. Mangano
|
||
Name:
|
Robert F. Mangano
|
|
Title:
|
President and Chief Executive Officer
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of 1st Constitution 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 registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
/s/ Joseph M. Reardon | ||
Name:
|
Joseph M. Reardon | |
Title:
|
Senior Vice President and | |
Treasurer |
|
(1)
|
The Report 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 the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Robert F. Mangano | ||
Name:
|
Robert F. Mangano
|
|
Title:
|
President and Chief Executive Officer
|
|
Date:
|
August 14, 2012 | |
/s/ Joseph M. Reardon | ||
Name:
|
Joseph M. Reardon
|
|
Title:
|
Senior Vice President and
|
|
Treasurer
|
||
Date:
|
August 14, 2012 |
Allowance for Loan Losses and Credit Quality Disclosure (Narrative)
|
6 Months Ended |
---|---|
Jun. 30, 2012
|
|
Allowance for Loan Losses and Credit Quality Disclosure [Abstract] | |
Loans and Leases Receivable, Impaired, Description | Loans are considered to be impaired when, based on current information and events, it is determined that the Company will not be able to collect all amounts due according to the loan contract, including scheduled interest payments. When a loan is placed on nonaccrual status, it is also considered to be impaired. Loans are placed on nonaccrual status when: (1) the full collection of interest or principal becomes uncertain; or (2) they are contractually past due 90 days or more as to interest or principal payments unless both well secured and in the process of collection. |
Fair Value Disclosures (Fair Value Assets Measured On Nonrecurring Basis Valuation Techniques) (Details) (USD $)
|
Jun. 30, 2012
|
Dec. 31, 2011
|
---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans, fair value disclosure | $ 2,544,053 | $ 2,038,805 |
Other real estate owned, fair value disclosure | 3,000,619 | 491,536 |
Level 3 Inputs [Member]
|
||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans, fair value disclosure | 2,544,053 | 2,038,805 |
Other real estate owned, fair value disclosure | $ 3,000,619 | $ 491,536 |
Share Base Compensation (Share Based Compensation Arrangement By Share Based Payment Award Options Grants In Period Weighted Average Grant Date Fair Value) (Details) (USD $)
|
6 Months Ended |
---|---|
Jun. 30, 2012
|
|
Share-Based Compensation [Abstract] | |
Non-vested at January 1, 2012 Number of Shares | 151,753 |
Non-vested at January 1, 2012 Average Grant Date | $ 6.87 |
Number of Shares Granted | 1,995 |
Average Grant Date Fair Value Granted | $ 6.42 |
Number of Shares Vested | (20,875) |
Average Grant Date Fair Value Vested | $ 8.12 |
Non-vested at June 30, 2012 Number of Shares | 132,873 |
Non-vested at June 30, 2012 Average Grant Date | $ 6.67 |
Fair Value Disclosures (Fair Value AssetsMeasured On NonrecurringBasis Valuation Techniques) (Details)
|
6 Months Ended | |||||
---|---|---|---|---|---|---|
Jun. 30, 2012
|
||||||
Impaired Loans [Member]
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Valuation Techniques | Appraisal of collateral (1) | [1] | ||||
Unobservable Input | Appraisal adjustments (1) | [1] | ||||
Other Real Estate Owned [Member]
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Valuation Techniques | Appraisal of collateral (1) | [1] | ||||
Unobservable Input | Appraisal adjustments (1),(2) | [1],[2] | ||||
Maximum [Member] | Impaired Loans [Member]
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Range of Adjustments | 50.00% | |||||
Maximum [Member] | Other Real Estate Owned [Member]
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Range of Adjustments | 60.00% | |||||
Minimum [Member] | Impaired Loans [Member]
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Range of Adjustments | 5.00% | |||||
Minimum [Member] | Other Real Estate Owned [Member]
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Range of Adjustments | 8.00% | |||||
|
Investment Securities (Available For Sale Securities) (Details) (USD $)
|
Jun. 30, 2012
|
Dec. 31, 2011
|
---|---|---|
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $ 95,161,831 | $ 91,365,475 |
Gross Unrealized Gains | 3,123,274 | 3,063,708 |
Gross Unrealized Losses | (747,507) | (745,409) |
Fair Value | 97,537,598 | 93,683,774 |
U.S Treasury securities and obligations of U.S. Government sponsored corporations("GSE') and agencies [Member]
|
||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 16,984,686 | 19,400,856 |
Gross Unrealized Gains | 115,414 | 71,833 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 17,100,100 | 19,472,689 |
Residential collateralized mortgage obligations- GSE [Member]
|
||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 11,038,324 | 13,421,544 |
Gross Unrealized Gains | 428,381 | 476,589 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 11,466,705 | 13,898,133 |
Residential collateralized mortgage obligations- non GSEs [Member]
|
||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 3,522,276 | 4,177,115 |
Gross Unrealized Gains | 120,913 | 143,480 |
Gross Unrealized Losses | (10,204) | (20,151) |
Fair Value | 3,632,985 | 4,300,444 |
Residential mortgage obligations- GSE [Member]
|
||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 34,832,648 | 40,655,157 |
Gross Unrealized Gains | 2,045,098 | 2,032,059 |
Gross Unrealized Losses | (4) | (7) |
Fair Value | 36,877,742 | 42,687,209 |
Obligations of State and Political subdivisions [Member]
|
||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 5,350,838 | 5,366,145 |
Gross Unrealized Gains | 389,276 | 339,747 |
Gross Unrealized Losses | (1,017) | (5,378) |
Fair Value | 5,739,097 | 5,700,514 |
Trust preferred debt securities - single issuer [Member]
|
||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 2,464,748 | 2,463,296 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (568,775) | (712,055) |
Fair Value | 1,895,973 | 1,751,241 |
Corporate debt securities [Member]
|
||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 19,219,511 | 1,443,762 |
Gross Unrealized Gains | 24,192 | 0 |
Gross Unrealized Losses | (167,507) | (7,818) |
Fair Value | 19,076,196 | 1,435,944 |
Restricted stock [Member]
|
||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 1,723,800 | 4,412,600 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 1,723,800 | 4,412,600 |
Mutual fund [Member]
|
||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 25,000 | 25,000 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | $ 25,000 | $ 25,000 |
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