þ | 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 |
Idaho | 82-0499463 | |
(State or other jurisdiction of | (IRS Employer | |
incorporation or organization) | Identification No.) |
None | None | |
(Title of each class) | (Name of each exchange on which registered) |
Large accelerated filer o | Accelerated filer o | Non-accelerated filer o | Smaller reporting companyþ |
(Do not check if a smaller reporting company) |
EX-31.1 | |
EX-31.2 | |
EX-32 | |
EX-101 |
June 30, 2011 | December 31, 2010 | ||||||
(Dollars in thousands) | |||||||
ASSETS | |||||||
Cash and cash equivalents: | |||||||
Interest-bearing | $ | 77,724 | $ | 132,693 | |||
Non-interest bearing and vault | 13,571 | 11,973 | |||||
Restricted cash | 2,832 | 3,290 | |||||
Available-for-sale securities, at fair value | 210,064 | 183,081 | |||||
Held-to-maturity securities, at amortized cost | 22,154 | 22,217 | |||||
Federal Home Loan Bank (“FHLB”) of Seattle stock, at cost | 2,310 | 2,310 | |||||
Loans held for sale | 1,615 | 3,425 | |||||
Loans receivable, net | 548,195 | 563,228 | |||||
Accrued interest receivable | 4,183 | 4,360 | |||||
Office properties and equipment, net | 38,982 | 40,246 | |||||
Bank-owned life insurance | 8,946 | 8,765 | |||||
Other intangibles | 249 | 310 | |||||
Other real estate owned (“OREO”) | 7,818 | 4,429 | |||||
Prepaid expenses and other assets | 22,037 | 24,782 | |||||
Total assets | $ | 960,680 | $ | 1,005,109 | |||
LIABILITIES | |||||||
Deposits | $ | 736,029 | $ | 778,833 | |||
Securities sold subject to repurchase agreements | 99,687 | 105,116 | |||||
Advances from Federal Home Loan Bank | 34,000 | 34,000 | |||||
Cashier checks issued and payable | 520 | 580 | |||||
Accrued interest payable | 1,484 | 1,406 | |||||
Other borrowings | 16,527 | 16,527 | |||||
Accrued expenses and other liabilities | 11,990 | 9,294 | |||||
Total liabilities | 900,237 | 945,756 | |||||
Commitments and contingent liabilities | |||||||
STOCKHOLDERS’ EQUITY | |||||||
Common stock 300,000,000 shares authorized; 8,428,196 and 8,431,385 shares issued and 8,409,840 and 8,390,877 shares outstanding as of June 30, 2011 and December 31, 2010 | 78,822 | 78,803 | |||||
Preferred stock 1,000,000 shares authorized; 27,000 shares issued and outstanding as of June 30, 2011 and December 31, 2010 | 25,969 | 25,794 | |||||
Accumulated other comprehensive income (loss), net of tax | 1,162 | (1,229 | ) | ||||
Accumulated deficit | (45,510 | ) | (44,015 | ) | |||
Total stockholders’ equity | 60,443 | 59,353 | |||||
Total liabilities and stockholders’ equity | $ | 960,680 | $ | 1,005,109 |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||||||
(Dollars in thousands, except per share data) | |||||||||||||||
Interest income: | |||||||||||||||
Loans | $ | 8,432 | $ | 9,814 | $ | 16,766 | $ | 19,463 | |||||||
Investments | 2,358 | 1,785 | 4,512 | 3,752 | |||||||||||
Total interest income | 10,790 | 11,599 | 21,278 | 23,215 | |||||||||||
Interest expense: | |||||||||||||||
Deposits | 1,134 | 2,051 | 2,382 | 4,441 | |||||||||||
Other borrowings | 671 | 789 | 1,200 | 1,595 | |||||||||||
Total interest expense | 1,805 | 2,840 | 3,582 | 6,036 | |||||||||||
Net interest income | 8,985 | 8,759 | 17,696 | 17,179 | |||||||||||
Provision for losses on loans | (2,712 | ) | (4,914 | ) | (4,345 | ) | (11,723 | ) | |||||||
Net interest income after provision for losses on loans | 6,273 | 3,845 | 13,351 | 5,456 | |||||||||||
Other income: | |||||||||||||||
Fees and service charges | 1,863 | 2,047 | 3,534 | 3,835 | |||||||||||
Loan related fee income | 545 | 799 | 1,120 | 1,293 | |||||||||||
Net gain on sale of securities | — | 70 | — | 142 | |||||||||||
Other-than-temporary impairment (“OTTI”) losses on investments (1) | — | (237 | ) | — | (256 | ) | |||||||||
Bank-owned life insurance | 91 | 95 | 180 | 185 | |||||||||||
Other | 234 | 224 | 562 | 322 | |||||||||||
Total other income | 2,733 | 2,998 | 5,396 | 5,521 | |||||||||||
Operating expenses | 9,611 | 11,274 | 19,351 | 22,835 | |||||||||||
Loss before income taxes | (605 | ) | (4,431 | ) | (604 | ) | (11,858 | ) | |||||||
Income tax benefit | — | 1,934 | — | 5,051 | |||||||||||
Net loss | (605 | ) | (2,497 | ) | (604 | ) | (6,807 | ) | |||||||
Preferred stock dividend | 448 | 428 | 891 | 847 | |||||||||||
Net loss applicable to common stockholders | $ | (1,053 | ) | $ | (2,925 | ) | $ | (1,495 | ) | $ | (7,654 | ) | |||
Loss per share — basic | $ | (0.13 | ) | $ | (0.35 | ) | $ | (0.18 | ) | $ | (0.91 | ) | |||
Loss per share — diluted | $ | (0.13 | ) | $ | (0.35 | ) | $ | (0.18 | ) | $ | (0.91 | ) | |||
Weighted average common shares outstanding — basic | 8,409,786 | 8,388,128 | 8,403,177 | 8,380,265 | |||||||||||
Weighted average common shares outstanding — diluted | 8,409,786 | 8,388,128 | 8,403,177 | 8,380,265 |
Six Months Ended | |||||||
June 30, | |||||||
2011 | 2010 | ||||||
(Dollars in thousands) | |||||||
Cash flows from operating activities: | |||||||
Net loss | $ | (604 | ) | $ | (6,807 | ) | |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||
Depreciation | 1,524 | 1,580 | |||||
Stock-based compensation expense | 122 | 209 | |||||
Net amortization of premiums on securities | 1,171 | 1,751 | |||||
Provisions for losses on loans | 4,345 | 11,723 | |||||
Amortization of core deposit intangibles | 61 | 66 | |||||
(Gain) on sale of loans, investments, property and equipment | (287 | ) | (962 | ) | |||
(Gain) on sale of other real estate owned | (93 | ) | (52 | ) | |||
OTTI credit loss on available-for-sale investments | — | 256 | |||||
Charge down on other real estate owned | 419 | 1,947 | |||||
Accretion of deferred gain on sale of branch property | (8 | ) | (8 | ) | |||
Net accretion of loan and deposit discounts and premiums | (7 | ) | (21 | ) | |||
Increase in cash surrender value of bank-owned life insurance | (181 | ) | (185 | ) | |||
Change in: | |||||||
Accrued interest receivable | 177 | 115 | |||||
Prepaid expenses and other assets | 1,079 | 1,679 | |||||
Accrued interest payable | 78 | 151 | |||||
Accrued expenses and other liabilities | 1,941 | (622 | ) | ||||
Proceeds from sale of loans | 23,728 | 43,931 | |||||
Originations of loans held for sale | (21,630 | ) | (40,238 | ) | |||
Net cash provided by operating activities | 11,835 | 14,513 | |||||
Cash flows from investing activities: | |||||||
Purchases of available-for-sale securities | (47,352 | ) | (36,306 | ) | |||
Proceeds from calls or maturities of available-for-sale securities | 157 | 12,858 | |||||
Principal payments on mortgage-backed securities | 23,000 | 28,035 | |||||
Purchases of held-to-maturity securities | — | (7,927 | ) | ||||
Proceeds from calls or maturities of held-to-maturity securities | 47 | 45 | |||||
Origination of loans, net principal payments | 2,580 | 15,843 | |||||
Purchase of office properties and equipment | (259 | ) | (288 | ) | |||
Proceeds from sale of office properties and equipment | — | 40 | |||||
Proceeds from sale of other real estate owned | 4,400 | 5,817 | |||||
Net change in restricted cash | 459 | (1,054 | ) | ||||
Net cash provided by (used in) investing activities | (16,968 | ) | 17,063 | ||||
Cash flows from financing activities: | |||||||
Net change in demand, money market and savings deposits | (14,526 | ) | 3,704 | ||||
Net change in certificates of deposit | (28,279 | ) | (16,246 | ) | |||
Net change in repurchase agreements | (5,429 | ) | 3,315 | ||||
Retirement of treasury stock | (4 | ) | (4 | ) | |||
Net cash used in financing activities | (48,238 | ) | (9,231 | ) | |||
Net change in cash and cash equivalents | (53,371 | ) | 22,345 | ||||
Cash and cash equivalents, beginning of period | 144,666 | 103,189 | |||||
Cash and cash equivalents, end of period | $ | 91,295 | $ | 125,534 | |||
Supplemental disclosures of cash flow information: | |||||||
Cash paid during the period for: | |||||||
Interest | $ | 3,503 | $ | 5,886 | |||
Income taxes, net of tax refunds received | 8 | (6,894 | ) | ||||
Noncash investing and financing activities: | |||||||
Loans converted to other real estate owned | 8,115 | 4,928 | |||||
Accrual of preferred stock dividend | 716 | 683 |
Three Months Ended | Six Months Ended | |||||||||||||
June 30, | June 30, | |||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||
(Dollars in thousands) | ||||||||||||||
Net loss | $ | (605 | ) | $ | (2,497 | ) | $ | (604 | ) | $ | (6,807 | ) | ||
Other comprehensive income: | ||||||||||||||
Change in unrealized gains on investments, and mortgage backed securities (“MBS”) available for sale, excluding non-credit loss on impairment of securities | 3,719 | 4,291 | 3,945 | 4,906 | ||||||||||
Non-credit loss on impairment on available-for-sale debt | — | (1,292 | ) | — | (1,273 | ) | ||||||||
Less deferred income tax provision | (1,472 | ) | (1,187 | ) | (1,561 | ) | (1,438 | ) | ||||||
Change in fair value of qualifying cash flow hedge | (6 | ) | (75 | ) | 7 | 170 | ||||||||
Net other comprehensive income | 2,241 | 1,737 | 2,391 | 2,365 | ||||||||||
Comprehensive income (loss) | $ | 1,636 | $ | (760 | ) | $ | 1,787 | $ | (4,442 | ) |
Available-for-Sale | |||||||||||||||||||
Amortized Cost | Non-Credit OTTI Recognized in OCI (Losses) | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value/ Carrying Value | |||||||||||||||
June 30, 2011 | |||||||||||||||||||
U.S. treasury securities and obligations of U.S. government agencies | $ | 11,823 | $ | — | $ | 161 | $ | (108 | ) | $ | 11,876 | ||||||||
State and municipal securities | 7,256 | — | 288 | — | 7,544 | ||||||||||||||
Mortgage-backed securities & CMO’s | 188,359 | (1,926 | ) | 5,477 | (1,266 | ) | 190,644 | ||||||||||||
$ | 207,438 | $ | (1,926 | ) | $ | 5,926 | $ | (1,374 | ) | $ | 210,064 | ||||||||
December 31, 2010 | |||||||||||||||||||
U.S. treasury securities and obligations of U.S. government agencies | $ | 4,020 | $ | — | $ | — | $ | (95 | ) | $ | 3,925 | ||||||||
State and municipal securities | 5,251 | — | 28 | (49 | ) | 5,230 | |||||||||||||
Mortgage-backed securities & CMO’s | 175,129 | (1,926 | ) | 3,648 | (2,925 | ) | 173,926 | ||||||||||||
$ | 184,400 | $ | (1,926 | ) | $ | 3,676 | $ | (3,069 | ) | $ | 183,081 | ||||||||
Held-to-Maturity | |||||||||||||||||||
Carrying Value / Amortized Cost | Non-Credit OTTI Recognized in OCI (Losses) | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||||
June 30, 2011 | |||||||||||||||||||
State and municipal securities | $ | 22,154 | $ | — | $ | 547 | $ | (33 | ) | $ | 22,668 | ||||||||
December 31, 2010 | |||||||||||||||||||
State and municipal securities | $ | 22,217 | $ | — | $ | 280 | $ | (385 | ) | $ | 22,112 |
Less Than 12 Months | 12 Months or Longer | Total | |||||||||||||||||||||
June 30, 2011 | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | |||||||||||||||||
U.S. treasury securities and obligations of U.S. government agencies | $ | 3,883 | $ | 108 | $ | — | $ | — | $ | 3,883 | $ | 108 | |||||||||||
State and municipal securities | 2,365 | 33 | — | — | 2,365 | 33 | |||||||||||||||||
Mortgage-backed securities & CMO’s | 5,088 | 37 | 14,954 | 1,229 | 20,042 | 1,266 | |||||||||||||||||
Total | $ | 11,336 | $ | 178 | $ | 14,954 | $ | 1,229 | $ | 26,290 | $ | 1,407 |
Less Than 12 Months | 12 Months or Longer | Total | |||||||||||||||||||||
December 31, 2010 | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | |||||||||||||||||
U.S. treasury securities and obligations of U.S. government agencies | $ | 3,897 | $ | 95 | $ | — | $ | — | $ | 3,897 | $ | 95 | |||||||||||
State and municipal securities | 11,713 | 434 | — | — | 11,713 | 434 | |||||||||||||||||
Mortgage-backed securities & CMO’s | 36,338 | 581 | 14,447 | 2,344 | 50,785 | 2,925 | |||||||||||||||||
Total | $ | 51,948 | $ | 1,110 | $ | 14,447 | $ | 2,344 | $ | 66,395 | $ | 3,454 |
Available-for-Sale | Held-to-Maturity | ||||||||||||||
Amortized Cost | Fair Value | Amortized Cost | Fair Value | ||||||||||||
One year or less | $ | — | $ | — | $ | 295 | $ | 296 | |||||||
After one year through five years | 24 | 24 | 701 | 741 | |||||||||||
After five years through ten years | 13,809 | 13,872 | 9,629 | 9,971 | |||||||||||
After ten years | 5,246 | 5,524 | 11,529 | 11,660 | |||||||||||
Subtotal | 19,079 | 19,420 | 22,154 | 22,668 | |||||||||||
Mortgage-backed securities | 188,359 | 190,644 | — | — | |||||||||||
Total Securities | $ | 207,438 | $ | 210,064 | $ | 22,154 | $ | 22,668 |
2011 | 2010 | ||||||||||||||
Held To Maturity | Available For Sale | Held To Maturity | Available For Sale | ||||||||||||
Total other-than-temporary impairment losses | $ | — | $ | — | $ | — | $ | 1,529 | |||||||
Portion of other-than-temporary impairment losses transferred from (recognized in) other comprehensive income (1) | — | — | — | (1,273 | ) | ||||||||||
Net impairment losses recognized in earnings (2) | $ | — | $ | — | $ | — | $ | 256 |
(1) | Represents other-than-temporary impairment losses related to all other factors. |
(2) | Represents other-than-temporary impairment losses related to credit losses. |
June 30, 2011 | ||||||||||||||
Loans Receivable | % | Individually Evaluated for Impairment | Collectively Evaluated for Impairment | |||||||||||
Commercial | $ | 123,566 | 22.0 | % | $ | 11,536 | $ | 112,030 | ||||||
Commercial real estate | 172,701 | 30.8 | 12,161 | 160,540 | ||||||||||
Commercial construction | 17,694 | 3.1 | 1,735 | 15,959 | ||||||||||
Land and land development loans | 49,197 | 8.8 | 7,134 | 42,063 | ||||||||||
Agriculture | 85,296 | 15.2 | 625 | 84,671 | ||||||||||
Multifamily | 27,112 | 4.8 | — | 27,112 | ||||||||||
Residential real estate | 62,016 | 11.0 | 3,944 | 58,072 | ||||||||||
Residential construction | 4,291 | 0.8 | 185 | 4,106 | ||||||||||
Consumer | 12,535 | 2.2 | 597 | 11,938 | ||||||||||
Municipal | 7,360 | 1.3 | — | 7,360 | ||||||||||
Total loans receivable | 561,768 | 100.0 | % | $ | 37,917 | $ | 523,851 | |||||||
Allowance for loan losses | (13,687 | ) | ||||||||||||
Deferred loan fees, net of direct origination costs | 114 | |||||||||||||
Loans receivable, net | $ | 548,195 | ||||||||||||
Weighted average interest rate | 5.93 | % |
December 31, 2010 | ||||||||||||||
Loans Receivable | % | Individually Evaluated for Impairment | Collectively Evaluated for Impairment | |||||||||||
Commercial | $ | 122,656 | 21.3 | % | $ | 10,698 | $ | 111,958 | ||||||
Commercial real estate | 175,559 | 30.5 | 13,077 | 162,482 | ||||||||||
Commercial construction | 17,951 | 3.1 | 691 | 17,260 | ||||||||||
Land and land development loans | 60,962 | 10.6 | 5,995 | 54,967 | ||||||||||
Agriculture | 87,364 | 15.2 | 1,460 | 85,904 | ||||||||||
Multifamily | 26,417 | 4.6 | — | 26,417 | ||||||||||
Residential real estate | 60,872 | 10.6 | 3,276 | 57,596 | ||||||||||
Residential construction | 3,219 | 0.6 | 277 | 2,942 | ||||||||||
Consumer | 14,095 | 2.4 | 1,094 | 13,001 | ||||||||||
Municipal | 6,528 | 1.1 | — | 6,528 | ||||||||||
Total loans receivable | 575,623 | 100.0 | % | $ | 36,568 | $ | 539,055 | |||||||
Allowance for loan losses | (12,455 | ) | ||||||||||||
Deferred loan fees, net of direct origination costs | 60 | |||||||||||||
Loans receivable, net | $ | 563,228 | ||||||||||||
Weighted average interest rate | 6.04 | % |
June 30, 2011 | |||||||||||
Total Allowance | Individually Evaluated Allowance | Collectively Evaluated Allowance | |||||||||
Commercial | $ | 2,782 | $ | 1,050 | $ | 1,732 | |||||
Commercial real estate | 5,086 | 3,037 | 2,049 | ||||||||
Commercial construction | 728 | 376 | 352 | ||||||||
Land and land development loans | 2,046 | 441 | 1,605 | ||||||||
Agriculture | 909 | 28 | 881 | ||||||||
Multifamily | 90 | — | 90 | ||||||||
Residential real estate | 1,324 | 598 | 726 | ||||||||
Residential construction | 119 | 18 | 101 | ||||||||
Consumer | 577 | 413 | 164 | ||||||||
Municipal | 26 | — | 26 | ||||||||
Total | $ | 13,687 | $ | 5,961 | $ | 7,726 |
December 31, 2010 | |||||||||||
Total Allowance | Individually Evaluated Allowance | Collectively Evaluated Allowance | |||||||||
Commercial | $ | 2,925 | $ | 744 | $ | 2,181 | |||||
Commercial real estate | 3,655 | 1,475 | 2,180 | ||||||||
Commercial construction | 540 | 145 | 395 | ||||||||
Land and land development loans | 2,408 | 770 | 1,638 | ||||||||
Agriculture | 779 | 92 | 687 | ||||||||
Multifamily | 83 | — | 83 | ||||||||
Residential real estate | 1,252 | 545 | 707 | ||||||||
Residential construction | 65 | — | 65 | ||||||||
Consumer | 613 | 449 | 164 | ||||||||
Municipal | 135 | — | 135 | ||||||||
Total | $ | 12,455 | $ | 4,220 | $ | 8,235 |
Current | 30-89 Days Past Due | 90 Days or More Past Due and Accruing | Nonaccrual | Total | |||||||||||||||
Commercial | $ | 118,651 | $ | 515 | $ | — | $ | 4,400 | $ | 123,566 | |||||||||
Commercial real estate | 169,305 | 388 | — | 3,008 | 172,701 | ||||||||||||||
Commercial construction | 17,647 | — | — | 47 | 17,694 | ||||||||||||||
Land and land development loans | 47,184 | 312 | — | 1,701 | 49,197 | ||||||||||||||
Agriculture | 84,826 | 90 | — | 380 | 85,296 | ||||||||||||||
Multifamily | 27,112 | — | — | — | 27,112 | ||||||||||||||
Residential real estate | 60,924 | 288 | — | 804 | 62,016 | ||||||||||||||
Residential construction | 4,273 | — | — | 18 | 4,291 | ||||||||||||||
Consumer | 12,033 | 128 | — | 374 | 12,535 | ||||||||||||||
Municipal | 7,360 | — | — | — | 7,360 | ||||||||||||||
Total | $ | 549,315 | $ | 1,721 | $ | — | $ | 10,732 | $ | 561,768 |
Current | 30-89 Days Past Due | 90 Days or More Past Due and Accruing | Nonaccrual | Total | |||||||||||||||
Commercial | $ | 118,036 | $ | 761 | $ | — | $ | 3,859 | $ | 122,656 | |||||||||
Commercial real estate | 171,633 | 360 | — | 3,566 | 175,559 | ||||||||||||||
Commercial construction | 17,880 | — | — | 71 | 17,951 | ||||||||||||||
Land and land development loans | 58,537 | 515 | — | 1,910 | 60,962 | ||||||||||||||
Agriculture | 86,782 | — | — | 582 | 87,364 | ||||||||||||||
Multifamily | 26,417 | — | — | — | 26,417 | ||||||||||||||
Residential real estate | 58,481 | 1,361 | 66 | 964 | 60,872 | ||||||||||||||
Residential construction | 3,109 | — | — | 110 | 3,219 | ||||||||||||||
Consumer | 13,664 | 42 | — | 389 | 14,095 | ||||||||||||||
Municipal | 6,528 | — | — | — | 6,528 | ||||||||||||||
Total | $ | 561,067 | $ | 3,039 | $ | 66 | $ | 11,451 | $ | 575,623 |
Allowance for Loan Losses June 30, 2011 | |||||||||||||||||||
Balance, Beginning of Year | Charge-Offs Jan 1 through June 30, 2011 | Recoveries Jan 1 through June 30, 2011 | Provision | Balance, End of Period | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Commercial | $ | 2,925 | $ | (803 | ) | $ | 265 | $ | 395 | $ | 2,782 | ||||||||
Commercial real estate | 3,655 | (679 | ) | 150 | 1,960 | 5,086 | |||||||||||||
Commercial construction | 540 | — | — | 188 | 728 | ||||||||||||||
Land and land development loans | 2,408 | (1,593 | ) | 302 | 929 | 2,046 | |||||||||||||
Agriculture | 779 | (331 | ) | 42 | 419 | 909 | |||||||||||||
Multifamily | 83 | — | — | 7 | 90 | ||||||||||||||
Residential real estate | 1,252 | (399 | ) | 60 | 411 | 1,324 | |||||||||||||
Residential construction | 65 | (18 | ) | — | 72 | 119 | |||||||||||||
Consumer | 613 | (191 | ) | 82 | 73 | 577 | |||||||||||||
Municipal | 135 | — | — | (109 | ) | 26 | |||||||||||||
Allowance for loan losses | $ | 12,455 | $ | (4,014 | ) | $ | 901 | $ | 4,345 | $ | 13,687 |
Allowance for Loan Losses June 30, 2010 | |||||||||||||||||||
Balance, Beginning of Year | Charge-Offs Jan 1 through June 30, 2010 | Recoveries Jan 1 through June 30, 2010 | Provision | Balance, End of Period | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Commercial | $ | 4,785 | $ | (4,302 | ) | $ | 312 | $ | 3,529 | $ | 4,324 | ||||||||
Commercial real estate | 3,827 | (2,487 | ) | 80 | 1,560 | 2,980 | |||||||||||||
Commercial construction | 1,671 | (911 | ) | 10 | (245 | ) | 525 | ||||||||||||
Land and land development loans | 2,707 | (5,222 | ) | 32 | 5,552 | 3,069 | |||||||||||||
Agriculture | 1,390 | (689 | ) | — | (253 | ) | 448 | ||||||||||||
Multifamily | 26 | (16 | ) | — | 61 | 71 | |||||||||||||
Residential real estate | 1,412 | (1,220 | ) | 26 | 1,102 | 1,320 | |||||||||||||
Residential construction | 170 | (15 | ) | — | 13 | 168 | |||||||||||||
Consumer | 539 | (286 | ) | 101 | 359 | 713 | |||||||||||||
Municipal | 81 | (1 | ) | — | 45 | 125 | |||||||||||||
Allowances for loan losses | $ | 16,608 | $ | (15,149 | ) | $ | 561 | $ | 11,723 | $ | 13,743 |
June 30, | |||||||
2011 | 2010 | ||||||
(Dollars in thousands) | |||||||
Balance Beginning January 1 | $ | 17 | $ | 11 | |||
Adjustment | (3 | ) | 7 | ||||
Transfers | — | — | |||||
Allowance — Unfunded Commitments at end of period | $ | 14 | $ | 18 |
June 30, 2011 | Six Months Ended June 30, 2011 | ||||||||||||||||||
Recorded Investment | Principal Balance | Related Allowance | Average Recorded Investment | Interest Income Recognized | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
With an allowance recorded: | |||||||||||||||||||
Commercial | $ | 4,196 | $ | 4,273 | $ | 1,050 | $ | 2,823 | $ | 163 | |||||||||
Commercial real estate | 8,767 | 10,292 | 3,037 | 6,525 | 504 | ||||||||||||||
Commercial construction | 1,133 | 1,133 | 376 | 648 | 33 | ||||||||||||||
Land and land development loans | 1,749 | 1,749 | 441 | 2,851 | 63 | ||||||||||||||
Agriculture | 90 | 176 | 28 | 213 | 23 | ||||||||||||||
Multifamily | — | — | — | — | — | ||||||||||||||
Residential real estate | 1,185 | 1,295 | 598 | 1,273 | 64 | ||||||||||||||
Residential construction | 18 | 123 | 18 | 43 | 26 | ||||||||||||||
Consumer | 469 | 482 | 413 | 494 | 21 | ||||||||||||||
Municipal | — | — | — | — | |||||||||||||||
Total | $ | 17,607 | $ | 19,523 | $ | 5,961 | $ | 14,870 | $ | 897 | |||||||||
Without an allowance recorded: | |||||||||||||||||||
Commercial | $ | 7,340 | $ | 12,217 | $ | — | $ | 8,327 | $ | 724 | |||||||||
Commercial real estate | 3,394 | 5,475 | — | 5,728 | 308 | ||||||||||||||
Commercial construction | 602 | 737 | — | 312 | 31 | ||||||||||||||
Land and land development loans | 5,385 | 10,232 | — | 5,721 | 422 | ||||||||||||||
Agriculture | 535 | 1,569 | — | 806 | 83 | ||||||||||||||
Multifamily | — | — | — | — | — | ||||||||||||||
Residential real estate | 2,759 | 3,254 | — | 2,145 | 105 | ||||||||||||||
Residential construction | 167 | 167 | — | 204 | 6 | ||||||||||||||
Consumer | 128 | 148 | — | 270 | 8 | ||||||||||||||
Municipal | — | — | — | — | — | ||||||||||||||
Total | $ | 20,310 | $ | 33,799 | $ | — | $ | 23,513 | $ | 1,687 | |||||||||
Total: | |||||||||||||||||||
Commercial | $ | 11,536 | $ | 16,490 | $ | 1,050 | $ | 11,150 | $ | 887 | |||||||||
Commercial real estate | 12,161 | 15,767 | 3,037 | 12,252 | 812 | ||||||||||||||
Commercial construction | 1,735 | 1,870 | 376 | 960 | 64 | ||||||||||||||
Land and land development loans | 7,134 | 11,981 | 441 | 8,571 | 485 | ||||||||||||||
Agriculture | 625 | 1,745 | 28 | 1,019 | 106 | ||||||||||||||
Multifamily | — | — | — | — | — | ||||||||||||||
Residential real estate | 3,944 | 4,549 | 598 | 3,419 | 169 | ||||||||||||||
Residential construction | 185 | 290 | 18 | 247 | 32 | ||||||||||||||
Consumer | 597 | 630 | 413 | 765 | 29 | ||||||||||||||
Municipal | — | — | — | — | — | ||||||||||||||
Total | $ | 37,917 | $ | 53,322 | $ | 5,961 | $ | 38,383 | $ | 2,584 |
December 31, 2010 | Twelve Months Ended December 31, 2010 | ||||||||||||||||||
Recorded Investment | Principal Balance | Related Allowance | Average Recorded Investment | Interest Income Recognized | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
With an allowance recorded: | |||||||||||||||||||
Commercial | $ | 2,319 | $ | 2,320 | $ | 744 | $ | 3,785 | $ | 173 | |||||||||
Commercial real estate | 4,383 | 5,088 | 1,475 | 4,804 | 381 | ||||||||||||||
Commercial construction | 406 | 407 | 145 | 425 | 17 | ||||||||||||||
Land and land development loans | 1,786 | 1,786 | 770 | 2,411 | 120 | ||||||||||||||
Agriculture | 428 | 463 | 92 | 1,470 | 46 | ||||||||||||||
Multifamily | — | 8 | — | — | 8 | ||||||||||||||
Residential real estate | 1,207 | 1,357 | 545 | 1,303 | 98 | ||||||||||||||
Residential construction | — | — | — | 302 | — | ||||||||||||||
Consumer | 538 | 594 | 449 | 394 | 45 | ||||||||||||||
Municipal | — | — | — | — | — | ||||||||||||||
Total | $ | 11,067 | $ | 12,023 | $ | 4,220 | $ | 14,894 | $ | 888 | |||||||||
Without an allowance recorded: | |||||||||||||||||||
Commercial | $ | 8,379 | $ | 12,362 | $ | — | $ | 5,865 | $ | 1,021 | |||||||||
Commercial real estate | 8,694 | 11,510 | — | 6,589 | 901 | ||||||||||||||
Commercial construction | 285 | 418 | — | 3,852 | 36 | ||||||||||||||
Land and land development loans | 4,209 | 7,573 | — | 9,617 | 575 | ||||||||||||||
Agriculture | 1,032 | 1,885 | — | 2,560 | 192 | ||||||||||||||
Multifamily | — | — | — | 347 | — | ||||||||||||||
Residential real estate | 2,069 | 2,335 | — | 2,689 | 204 | ||||||||||||||
Residential construction | 277 | 363 | — | 420 | 54 | ||||||||||||||
Consumer | 556 | 726 | — | 311 | 75 | ||||||||||||||
Municipal | — | — | — | — | — | ||||||||||||||
Total | $ | 25,501 | $ | 37,172 | $ | — | $ | 32,250 | $ | 3,058 | |||||||||
Total: | |||||||||||||||||||
Commercial | $ | 10,698 | $ | 14,682 | $ | 744 | $ | 9,650 | $ | 1,194 | |||||||||
Commercial real estate | 13,077 | 16,598 | 1,475 | 11,393 | 1,282 | ||||||||||||||
Commercial construction | 691 | 825 | 145 | 4,277 | 53 | ||||||||||||||
Land and land development loans | 5,995 | 9,359 | 770 | 12,028 | 695 | ||||||||||||||
Agriculture | 1,460 | 2,348 | 92 | 4,030 | 238 | ||||||||||||||
Multifamily | — | 8 | — | 347 | 8 | ||||||||||||||
Residential real estate | 3,276 | 3,692 | 545 | 3,992 | 302 | ||||||||||||||
Residential construction | 277 | 363 | — | 722 | 54 | ||||||||||||||
Consumer | 1,094 | 1,320 | 449 | 705 | 120 | ||||||||||||||
Municipal | — | — | — | — | — | ||||||||||||||
Total | $ | 36,568 | $ | 49,195 | $ | 4,220 | $ | 47,144 | $ | 3,946 |
Loan Portfolio Credit Grades by Type June 30, 2011 | |||||||||||||||||||||||
Satisfactory Grade 1-3 | Internal Watch Grade 4 | Special Mention Grade 5 | Substandard Grade 6 | Doubtful Grade 7 | Total | ||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Commercial | $ | 78,314 | $ | 26,626 | $ | 3,579 | $ | 15,047 | $ | — | $ | 123,566 | |||||||||||
Commercial real estate | 111,647 | 44,190 | — | 16,864 | — | 172,701 | |||||||||||||||||
Commercial construction | 3,606 | 5,271 | — | 8,817 | — | 17,694 | |||||||||||||||||
Land and land development loans | 10,788 | 26,278 | 3,699 | 8,432 | — | 49,197 | |||||||||||||||||
Agriculture | 61,047 | 19,602 | 1,573 | 3,074 | — | 85,296 | |||||||||||||||||
Multifamily | 17,298 | 9,814 | — | — | — | 27,112 | |||||||||||||||||
Residential real estate | 46,742 | 9,879 | 54 | 5,341 | — | 62,016 | |||||||||||||||||
Residential construction | 3,551 | 555 | — | 185 | — | 4,291 | |||||||||||||||||
Consumer | 10,665 | 883 | 2 | 985 | — | 12,535 | |||||||||||||||||
Municipal | 7,360 | — | — | — | — | 7,360 | |||||||||||||||||
Loans receivable, net | $ | 351,018 | $ | 143,098 | $ | 8,907 | $ | 58,745 | $ | — | $ | 561,768 |
Loan Portfolio Credit Grades by Type December 31, 2010 | |||||||||||||||||||||||
Satisfactory Grade 1-3 | Internal Watch Grade 4 | Special Mention Grade 5 | Substandard Grade 6 | Doubtful Grade 7 | Total | ||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Commercial | $ | 78,693 | $ | 26,383 | $ | 3,517 | $ | 14,062 | $ | 1 | $ | 122,656 | |||||||||||
Commercial real estate | 113,759 | 43,296 | 2,696 | 15,808 | — | 175,559 | |||||||||||||||||
Commercial construction | 3,921 | 4,976 | 986 | 8,068 | — | 17,951 | |||||||||||||||||
Land and land development loans | 13,825 | 33,688 | 5,409 | 8,040 | — | 60,962 | |||||||||||||||||
Agriculture | 60,508 | 23,199 | 1,277 | 2,380 | — | 87,364 | |||||||||||||||||
Multifamily | 16,455 | 9,962 | — | — | — | 26,417 | |||||||||||||||||
Residential real estate | 46,111 | 10,230 | 54 | 4,477 | — | 60,872 | |||||||||||||||||
Residential construction | 2,497 | 445 | — | 277 | — | 3,219 | |||||||||||||||||
Consumer | 12,302 | 715 | 106 | 972 | — | 14,095 | |||||||||||||||||
Municipal | 6,528 | — | — | — | — | 6,528 | |||||||||||||||||
Loans receivable, net | $ | 354,599 | $ | 152,894 | $ | 14,045 | $ | 54,084 | $ | 1 | $ | 575,623 |
June 30, 2011 | December 31, 2010 | ||||||
(Dollars in thousands) | |||||||
Loans past due in excess of 90 days and still accruing | $ | — | $ | 66 | |||
Non-accrual loans | 10,732 | 11,451 | |||||
Total non-performing loans | 10,732 | 11,517 | |||||
Other real estate owned (“OREO”) | 7,818 | 4,429 | |||||
Total non-performing assets (“NPAs”) | $ | 18,550 | $ | 15,946 | |||
Classified loans (1) | $ | 58,745 | $ | 54,085 | |||
Troubled debt restructured loans | $ | 6,543 | $ | 4,838 |
1) | Classified loan totals are inclusive of non-performing loans and may also include troubled debt restructured loans, depending on the grading of these restructured loans. |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, 2011 | June 30, 2010 | June 30, 2011 | June 30, 2010 | ||||||||||||
(Dollars in thousands) | |||||||||||||||
Balance, beginning of period | $ | 3,686 | $ | 11,538 | $ | 4,429 | $ | 11,538 | |||||||
Additions to OREO | 7,226 | 2,467 | 8,115 | 4,928 | |||||||||||
Proceeds from sale of OREO | (3,130 | ) | (4,133 | ) | (4,400 | ) | (5,817 | ) | |||||||
Valuation Adjustments in the period (1) | 36 | (1,118 | ) | (326 | ) | (1,895 | ) | ||||||||
Balance, end of period, June 30 | $ | 7,818 | $ | 8,754 | $ | 7,818 | $ | 8,754 |
(1) | Amount includes chargedowns and gains/losses on sale of OREO |
June 30, 2011 | December 31, 2010 | ||||||||||||
Single family residence | $ | 540 | 6.9 | % | $ | 2,183 | 49.3 | % | |||||
Developed residential lots | 2,696 | 34.5 | 1,009 | 22.8 | |||||||||
Commercial buildings | 432 | 5.5 | 788 | 17.8 | |||||||||
Raw land | 4,150 | 53.1 | 449 | 10.1 | |||||||||
Total OREO | $ | 7,818 | 100.0 | % | $ | 4,429 | 100.0 | % |
June 30, 2011 | December 31, 2010 | ||||||||||||
Amount | Weighted Average Interest Rate | Amount | Weighted Average Interest Rate | ||||||||||
Due within 1 year | $ | 5,000 | 1.49 | % | $ | 5,000 | 1.49 | % | |||||
Due in 1 to 2 years | 25,000 | 2.06 | — | — | |||||||||
Due in 2 to 3 years | — | — | 25,000 | 2.06 | |||||||||
Due in 3 to 4 years | 4,000 | 3.11 | 4,000 | 3.11 | |||||||||
Due in 4 to 5 years | — | — | — | — | |||||||||
$ | 34,000 | 2.10 | % | $ | 34,000 | 2.10 | % |
June 30, 2011 | December 31, 2010 | ||||||
Term note payable (1) | $ | 8,279 | $ | 8,279 | |||
Term note payable (2) | 8,248 | 8,248 | |||||
Total other borrowings | $ | 16,527 | $ | 16,527 |
(1) | In January 2003, the Company issued $8.0 million of Trust Preferred securities through its subsidiary, Intermountain Statutory Trust I. The debt associated with these securities bears interest on a variable basis tied to the 90-day LIBOR (London Inter-Bank Offering Rate) index plus 3.25%, with interest only paid quarterly. The rate on this borrowing was 3.50% at June 30, 2011. The debt is callable by the Company quarterly and matures in March 2033. During the third quarter of 2008, the Company entered into an interest rate swap contract with Pacific Coast Bankers Bank. The purpose of the $8.2 million notional value swap is to convert the variable rate payments made on our Trust Preferred I obligation to a series of fixed rate payments at 7.38% for five years, as a hedging strategy to help manage the Company’s interest-rate risk. See Note 2A and 2B below: |
(2) | In March 2004, the Company issued $8.0 million of Trust Preferred securities through its subsidiary, Intermountain Statutory Trust II. The debt associated with these securities bears interest on a variable basis tied to the 90-day LIBOR index plus 2.8%, with interest only paid quarterly. The rate on this borrowing was 3.08% at June 30, 2011. The debt is callable by the Company quarterly and matures in April 2034. See Note A and B. |
A) | Intermountain’s obligations under the debentures issued to the trusts referred to above constitute a full and unconditional guarantee by Intermountain of the Statutory Trusts’ obligations under the Trust Preferred Securities. In accordance with ASC 810, Consolidation, the trusts are not consolidated and the debentures and related amounts are treated as debt of Intermountain. |
B) | To conserve the liquid assets of the parent Company, the Company’s Board of Directors decided to defer regularly scheduled interest payments on its outstanding Junior Subordinated Debentures related to its Trust Preferred Securities (“TRUPS Debentures”) beginning in December 2009. The Company is permitted to defer payments of interest on the TRUPS Debentures for up to 20 consecutive quarterly periods without default. During the deferral period, the Company may not pay any dividends or distributions on, or redeem, purchase or acquire, or make a liquidation payment with respect to the Company’s capital stock, or make any payment of principal or interest on, or repay, repurchase or redeem any debt securities of the Company that rank equally or junior to the TRUPS Debentures. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||||||
Numerator: | |||||||||||||||
Net loss — basic and diluted | $ | (605 | ) | $ | (2,497 | ) | $ | (604 | ) | $ | (6,807 | ) | |||
Preferred stock dividend | 448 | 428 | 891 | 847 | |||||||||||
Net loss applicable to commons stockholders | $ | (1,053 | ) | $ | (2,925 | ) | $ | (1,495 | ) | $ | (7,654 | ) | |||
Denominator: | |||||||||||||||
Weighted average shares outstanding — basic | 8,409,786 | 8,388,128 | 8,403,177 | 8,380,265 | |||||||||||
Dilutive effect of common stock options, warrants, restricted stock awards | — | — | — | — | |||||||||||
Weighted average shares outstanding — diluted | 8,409,786 | 8,388,128 | 8,403,177 | 8,380,265 | |||||||||||
Loss per share — basic and diluted: | |||||||||||||||
Loss per share — basic | $ | (0.13 | ) | $ | (0.35 | ) | $ | (0.18 | ) | $ | (0.91 | ) | |||
Effect of dilutive common stock options | — | — | — | — | |||||||||||
Loss per share — diluted | $ | (0.13 | ) | $ | (0.35 | ) | $ | (0.18 | ) | $ | (0.91 | ) | |||
Anti-dilutive securities not included in diluted earnings per share: | |||||||||||||||
Common stock options | 175,444 | 242,157 | 175,444 | 242,157 | |||||||||||
Common stock warrant | 653,226 | 653,226 | 653,226 | 653,226 | |||||||||||
Restricted shares | 18,573 | 44,982 | 25,884 | 54,227 | |||||||||||
Total anti-dilutive shares | 847,243 | 940,365 | 854,554 | 949,610 |
Three Months ended June 30, | Six Months ended June 30, | ||||||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||||||
Salaries and employee benefits | $ | 4,887 | $ | 5,088 | $ | 9,833 | $ | 10,920 | |||||||
Occupancy expense | 1,708 | 1,789 | 3,496 | 3,616 | |||||||||||
Advertising | 214 | 273 | 344 | 495 | |||||||||||
Fees and service charges | 632 | 697 | 1,283 | 1,349 | |||||||||||
Printing, postage and supplies | 302 | 325 | 638 | 714 | |||||||||||
Legal and accounting | 447 | 337 | 682 | 661 | |||||||||||
FDIC Assessment | 331 | 471 | 776 | 939 | |||||||||||
OREO operations | 150 | 1,380 | 626 | 2,410 | |||||||||||
Other expense | 940 | 914 | 1,673 | 1,731 | |||||||||||
Total operating expenses | $ | 9,611 | $ | 11,274 | $ | 19,351 | $ | 22,835 |
June 30, 2011 | ||||||||||||
Receive Rate | Pay Rate | Type of Hedging | ||||||||||
Maturity Date | Notional Amount | Fair Value (Loss) | (LIBOR) | (Fixed) | Relationship | |||||||
Pay Fixed, Receive Variable: | ||||||||||||
October 2013 | $ | 8,248 | $ | (791 | ) | 0.28 | % | 4.58 | % | Cash Flow |
December 31, 2010 | ||||||||||||
Receive Rate | Pay Rate | Type of Hedging | ||||||||||
Maturity Date | Notional Amount | Fair Value (Loss) | (LIBOR) | (Fixed) | Relationship | |||||||
Pay Fixed, Receive Variable: | ||||||||||||
October 2013 | $ | 8,248 | $ | (892 | ) | 0.29 | % | 4.58 | % | Cash Flow |
Six Months Ended | |||||||
June 30, 2011 | June 30, 2010 | ||||||
Unrealized loss at beginning of period | $ | (892 | ) | $ | (678 | ) | |
Amount of gross gain (loss)recognized in earnings gain (loss) | 90 | (90 | ) | ||||
Amount of gross gain (loss) recognized in other comprehensive income gain(loss) | 11 | (161 | ) | ||||
Unrealized loss at end of period | $ | (791 | ) | $ | (929 | ) |
June 30, 2011 | December 31, 2010 | ||||||||||||||
Notional Amount | Fair Value Loss | Notional Amount | Fair Value Loss | ||||||||||||
Interest rate swaps with third party financial institutions | $ | 2,559 | $ | (91 | ) | $ | 2,559 | $ | (38 | ) |
Fair Value Measurements At June 30, 2011, Using | |||||||||||||||
Fair Value | Quoted Prices In Active Markets for Identical Assets | Other Observable Inputs | Significant Unobservable Inputs | ||||||||||||
Description | June 30, 2011 | (Level 1) | (Level 2) | (Level 3) | |||||||||||
Available-for-Sale Securities: | |||||||||||||||
U.S. treasury securities and obligations of U.S. government agencies | $ | 11,876 | $ | — | $ | 11,876 | $ | — | |||||||
State and municipal securities | 7,544 | 7,544 | |||||||||||||
Residential mortgage backed securities (“MBS”) | 190,644 | — | 161,278 | 29,366 | |||||||||||
Other Assets — Derivative | (91 | ) | — | — | (91 | ) | |||||||||
Total Assets Measured at Fair Value | $ | 209,973 | $ | — | $ | 180,698 | $ | 29,275 | |||||||
Other Liabilities — Derivatives | $ | 791 | $ | — | $ | — | $ | 791 |
Fair Value Measurements At December 31, 2010 Using | |||||||||||||||
Fair Value | Quoted Prices In Active Markets for Identical Assets | Other Observable Inputs | Significant Unobservable Inputs | ||||||||||||
Description | December 31, 2010 | (Level 1) | (Level 2) | (Level 3) | |||||||||||
Available-for-Sale Securities: | |||||||||||||||
U.S. treasury securities and obligations of U.S. government agencies | $ | 3,925 | $ | — | $ | 3,925 | $ | — | |||||||
State and municipal securities | 5,230 | 5,230 | |||||||||||||
Residential mortgage backed securities (“MBS”) | 173,926 | — | 144,412 | 29,514 | |||||||||||
Other Assets — Derivative | (38 | ) | — | — | (38 | ) | |||||||||
Total Assets Measured at Fair Value | $ | 183,043 | $ | — | $ | 153,567 | $ | 29,476 | |||||||
Other Liabilities — Derivatives | $ | 892 | $ | — | $ | — | $ | 892 |
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | |||||||||||
Description | Residential MBS | Derivatives | Total | ||||||||
January 1, 2011 Balance | $ | 29,514 | $ | (38 | ) | $ | 29,476 | ||||
Total gains or losses (realized/unrealized) included in earnings | — | (53 | ) | (53 | ) | ||||||
Included in other comprehensive income | 1,833 | — | 1,833 | ||||||||
Principal Payments | (1,981 | ) | — | (1,981 | ) | ||||||
Sales of Securities | — | — | — | ||||||||
Transfers in and /or out of Level 3 | — | — | — | ||||||||
June 30, 2011 Balance | $ | 29,366 | $ | (91 | ) | $ | 29,275 |
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | |
Description | Derivatives |
January 1, 2011 Balance | $892 |
Total gains or losses (realized/unrealized) included in earnings | (90) |
Included in other comprehensive income | (11) |
June 30, 2011 Balance | $791 |
Fair Value Measurements Using Significant Unobservable Inputs ( Level 3) | |||||||||||
Description | Residential MBS | Derivatives | Total | ||||||||
January 1, 2010 Balance | $ | 32,236 | $ | 57 | $ | 32,293 | |||||
Total gains or losses (realized/unrealized) included in earnings | (930 | ) | (95 | ) | (1,025 | ) | |||||
Included in other comprehensive income | 5,642 | — | 5,642 | ||||||||
Principal Payments | (4,971 | ) | — | (4,971 | ) | ||||||
Sales of Securities | (2,463 | ) | — | (2,463 | ) | ||||||
Transfers in and /or out of Level 3 | — | — | — | ||||||||
December 31, 2010 Balance | $ | 29,514 | $ | (38 | ) | $ | 29,476 |
Fair Value Measurements Using Significant Unobservable Inputs ( Level 3) | |||
Description | Derivatives | ||
January 1, 2010 Balance | $ | 678 | |
Total gains or losses (realized/unrealized) included in earnings | 178 | ||
Included in other comprehensive income | 36 | ||
December 31, 2010 Balance | $ | 892 |
Fair Value Measurements At June 30, 2011, Using | |||||||||||||||
Fair Value | Quoted Prices In Active Markets for Identical Assets | Other Observable Inputs | Significant Unobservable Inputs | ||||||||||||
Description | June 30, 2011 | (Level 1) | (Level 2) | (Level 3) | |||||||||||
Loans(1) | $ | 31,957 | $ | — | $ | — | $ | 31,957 | |||||||
OREO | 7,818 | — | — | 7,818 | |||||||||||
Net Deferred Tax Asset, net of valuation | 13,737 | — | — | 13,737 | |||||||||||
Total Assets Measured at Fair Value | $ | 53,512 | $ | — | $ | — | $ | 53,512 |
(1) | Represents impaired loans, net of allowance for loan loss, which are included in loans. |
Fair Value Measurements At December 31,2010, Using | |||||||||||||||
Fair Value | Quoted Prices In Active Markets for Identical Assets | Other Observable Inputs | Significant Unobservable Inputs | ||||||||||||
Description | December 31, 2010 | (Level 1) | (Level 2) | (Level 3) | |||||||||||
Loans(1) | $ | 32,348 | $ | — | $ | — | $ | 32,348 | |||||||
OREO | 4,429 | — | — | 4,429 | |||||||||||
Net Deferred Tax Asset, net of valuation | 15,291 | — | — | 15,291 | |||||||||||
Total Assets Measured at Fair Value | $ | 52,068 | $ | — | $ | — | $ | 52,068 |
(1) | Represents impaired loans, net of allowance for loan loss, which are included in loans. |
• | The length of time and the extent to which the market value of the securities has been lower than their cost; |
• | The financial condition and near-term prospects of the issuer or obligation, including any specific events, which may influence the operations of the issuer or obligation such as credit defaults and losses in mortgages underlying the security, changes in technology that impair the earnings potential of the investment or the discontinuation of a segment of the business that may affect the future earnings potential; and |
• | The intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in market value. |
2011 | 2010 | ||||||||||||||
Held To Maturity | Available For Sale | Held To Maturity | Available For Sale | ||||||||||||
Total other-than-temporary impairment losses | $ | — | $ | — | $ | — | $ | 1,529 | |||||||
Portion of other-than-temporary impairment losses transferred from (recognized in) other comprehensive income (1) | — | — | — | (1,273 | ) | ||||||||||
Net impairment losses recognized in earnings (2) | $ | — | $ | — | $ | — | $ | 256 |
(1) | Represents other-than-temporary impairment losses related to all other factors. |
(2) | Represents other-than-temporary impairment losses related to credit losses. |
June 30, 2011 | December 31, 2010 | ||||||||||||||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||
Financial assets: | |||||||||||||||
Cash, cash equivalents, restricted cash and federal funds sold | $ | 94,127 | $ | 94,127 | $ | 147,956 | $ | 147,956 | |||||||
Interest bearing certificates of deposit | — | — | — | — | |||||||||||
Available-for-sale securities | 210,064 | 210,064 | 183,081 | 183,081 | |||||||||||
Held-to-maturity securities | 22,154 | 22,668 | 22,217 | 22,112 | |||||||||||
Loans held for sale | 1,615 | 1,615 | 3,425 | 3,425 | |||||||||||
Loans receivable, net | 548,195 | 561,829 | 563,228 | 578,080 | |||||||||||
Accrued interest receivable | 4,183 | 4,183 | 4,360 | 4,360 | |||||||||||
BOLI | 8,946 | 8,946 | 8,765 | 8,765 | |||||||||||
Financial liabilities: | |||||||||||||||
Deposit liabilities | 736,029 | 700,798 | 778,833 | 741,426 | |||||||||||
Borrowings | 150,214 | 150,852 | 155,643 | 156,200 | |||||||||||
Accrued interest payable | 1,484 | 1,484 | 1,406 | 1,406 |
• | Maintaining a conservative balance sheet and effectively managing Company risk amidst a still uncertain economic and regulatory environment. |
• | Increasing and diversifying its loan origination activity by pursuing attractive small and mid-market commercial credits in its markets, originating commercial real estate loans to strong borrowers at lower real estate prices, originating and |
• | Increasing the efficiency of its operations by restructuring processes, re-negotiating contracts and rationalizing various business functions. |
• | Increasing local, transactional deposit balances while continuing to minimize interest expense by increasing referral activity and targeting specific business and non-profit groups. |
• | Offsetting anticipated regulatory pressures on current non-interest income streams by expanding its trust, investment and insurance sales, restructuring current product pricing plans, and pursuing opportunities to diversify into new fee-based programs serving both its existing clientele and new potential markets. |
June 30, | ||||||||
2011 | 2010 | |||||||
(Dollars in thousands) | ||||||||
Balance Beginning January 1 | $ | 12,455 | $ | 16,608 | ||||
Charge-Offs | ||||||||
Commercial loans | (803 | ) | (4,302 | ) | ||||
Commercial real estate loans | (679 | ) | (2,487 | ) | ||||
Commercial construction loans | — | (911 | ) | |||||
Land and land development loans | (1,593 | ) | (5,222 | ) | ||||
Agriculture loans | (331 | ) | (689 | ) | ||||
Multifamily loans | — | (16 | ) | |||||
Residential loans | (399 | ) | (1,220 | ) | ||||
Residential construction loans | (18 | ) | (15 | ) | ||||
Consumer loans | (191 | ) | (286 | ) | ||||
Municipal loans | — | (1 | ) | |||||
Total Charge-offs | (4,014 | ) | (15,149 | ) | ||||
Recoveries | ||||||||
Commercial loans | 265 | 312 | ||||||
Commercial real estate loans | 150 | 80 | ||||||
Commercial construction loans | — | — | 10 | |||||
Land and land development loans | 302 | 32 | ||||||
Agriculture loans | 42 | — | ||||||
Multifamily loans | — | — | ||||||
Residential loans | 60 | 26 | ||||||
Residential construction loans | — | — | ||||||
Consumer loans | 82 | 101 | ||||||
Municipal loans | — | — | ||||||
Total Recoveries | 901 | 561 | ||||||
Net charge-offs | (3,113 | ) | (14,588 | ) | ||||
Transfers | — | — | ||||||
Provision for losses on loans | 4,345 | 11,723 | ||||||
Sale of loans | — | — | ||||||
Balance at June 30 | $ | 13,687 | $ | 13,743 | ||||
Allowance — Unfunded Commitments Balance Beginning January 1 | $ | 17 | $ | 11 | ||||
Adjustment | (3 | ) | 7 | |||||
Transfers | — | — | ||||||
Allowance — Unfunded Commitments at June 30 | $ | 14 | $ | 18 |
June 30, 2011 | March 31, 2011 | December 31, 2010 | June 30, 2010 | ||||||||||||
(Dollars in thousands) | |||||||||||||||
Loans past due in excess of 90 days and still accruing | $ | — | $ | 1 | $ | 66 | $ | — | |||||||
Non-accrual loans | 10,732 | 18,716 | 11,451 | 17,765 | |||||||||||
Total non-performing loans (“NPLs”) | 10,732 | 18,717 | 11,517 | 17,765 | |||||||||||
OREO | 7,818 | 3,686 | 4,429 | 8,754 | |||||||||||
Total non-performing assets (“NPAs”) | $ | 18,550 | $ | 22,403 | $ | 15,946 | $ | 26,519 | |||||||
Classified loans (1) | $ | 58,745 | $ | 61,239 | $ | 54,085 | $ | 59,775 | |||||||
Troubled debt restructured loans (2) | $ | 6,543 | $ | 6,360 | $ | 4,838 | $ | 2,562 | |||||||
Total allowance related to non-accrual loans | $ | 731 | $ | 1,254 | $ | 1,192 | $ | 1,503 | |||||||
Interest income recorded on non-accrual loans (3) | $ | 309 | $ | 156 | $ | 848 | $ | 353 | |||||||
Non-accrual loans as a percentage of net loans receivable | 1.96 | % | 3.46 | % | 2.03 | % | 2.85 | % | |||||||
Total non-performing loans as a % of net loans receivable | 1.96 | % | 3.46 | % | 2.04 | % | 2.85 | % | |||||||
Allowance for loan losses (“ALLL”) as a percentage of non-performing loans | 127.5 | % | 66.7 | % | 108.1 | % | 77.4 | % | |||||||
Total NPAs as a % of total assets (4) | 1.93 | % | 2.28 | % | 1.59 | % | 2.49 | % | |||||||
Total NPAs as a % of tangible capital + ALLL (“Texas Ratio”) (4) | 25.11 | % | 31.41 | % | 22.30 | % | 31.09 | % | |||||||
Loan delinquency ratio (30 days and over) | 0.32 | % | 0.54 | % | 0.55 | % | 0.50 | % |
(1) | Classified loan totals are inclusive of non-performing loans and may also include troubled debt restructured loans, depending on the grading of these restructured loans. |
(2) | Represents accruing restructured loans performing according to their modified terms. Restructured loans that are not performing according to their modified terms are included in non-accrual loans. No other funds are available for disbursement on restructured loans. |
(3) | Interest income on non-accrual loans based on year-to-date interest totals |
(4) | NPAs include both nonperforming loans and OREO. |
6/30/2011 | 3/31/2011 | 6/30/2010 | ||||||||||
(Dollars in thousands) | ||||||||||||
Commercial loans | $ | 4,400 | $ | 4,423 | $ | 3,364 | ||||||
Commercial real estate loans | 3,440 | 4,935 | 4,760 | |||||||||
Commercial construction loans | 45 | 46 | 1,931 | |||||||||
Land and land development loans | 8,547 | 9,713 | 11,625 | |||||||||
Agriculture loans | 380 | 614 | 524 | |||||||||
Multifamily loans | — | — | 112 | |||||||||
Residential real estate loans | 1,344 | 2,181 | 3,982 | |||||||||
Residential construction loans | 20 | 111 | 193 | |||||||||
Consumer loans | 374 | 380 | 28 | |||||||||
Total NPAs by Categories | $ | 18,550 | $ | 22,403 | $ | 26,519 | ||||||
NPAs by location June 30, 2011 | North Idaho — Eastern Washington | Magic Valley Idaho | Greater Boise Area | E. Oregon, SW Idaho Excluding Boise | Other | Total | % of Loan Type to Total Non-Performing Assets | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||
Commercial loans | $ | 3,456 | $ | 365 | $ | 267 | $ | 286 | $ | 26 | $ | 4,400 | 23.7 | % | ||||||||||||
Commercial real estate loans | 1,609 | 22 | 343 | 127 | 1,339 | 3,440 | 18.5 | % | ||||||||||||||||||
Commercial construction loans | 45 | — | — | — | — | 45 | 0.2 | % | ||||||||||||||||||
Land and land development loans | 8,064 | 42 | 286 | 137 | 18 | 8,547 | 46.1 | % | ||||||||||||||||||
Agriculture loans | — | — | 88 | 22 | 270 | 380 | 2.1 | % | ||||||||||||||||||
Multifamily loans | — | — | — | — | — | — | — | % | ||||||||||||||||||
Residential real estate loans | 505 | 254 | 159 | 270 | 156 | 1,344 | 7.3 | % | ||||||||||||||||||
Residential construction loans | 20 | — | — | — | — | 20 | 0.1 | % | ||||||||||||||||||
Consumer loans | 366 | — | — | 8 | — | 374 | 2.0 | % | ||||||||||||||||||
Total | $ | 14,065 | $ | 683 | $ | 1,143 | $ | 850 | $ | 1,809 | $ | 18,550 | 100.0 | % | ||||||||||||
Percent of total NPAs | 75.8 | % | 3.7 | % | 6.2 | % | 4.5 | % | 9.8 | % | 100.0 | % | ||||||||||||||
Percent of NPAs to total loans in each region | 4.4 | % | 1.7 | % | 1.8 | % | 0.8 | % | 6.3 | % | 3.3 | % |
NPAs by location December 31, 2010 | North Idaho —Eastern Washington | Magic Valley Idaho | Greater Boise Area | E. Oregon, SW Idaho Excluding Boise | Other | Total | % of Loan Type to Total Non-Performing Assets | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||
Commercial loans | $ | 2,927 | $ | 415 | $ | 135 | $ | 352 | $ | 30 | $ | 3,859 | 24.2 | % | ||||||||||||
Commercial real estate loans | 1,714 | 46 | 453 | 413 | 1,728 | 4,354 | 27.3 | % | ||||||||||||||||||
Commercial construction loans | 69 | — | — | — | — | 69 | 0.4 | % | ||||||||||||||||||
Land and land development loans | 2,600 | 49 | 250 | 269 | 200 | 3,368 | 21.1 | % | ||||||||||||||||||
Agriculture loans | — | — | 157 | 22 | 403 | 582 | 3.7 | % | ||||||||||||||||||
Multifamily loans | — | — | — | — | — | — | — | % | ||||||||||||||||||
Residential real estate loans | 2,013 | 102 | 652 | 259 | 187 | 3,213 | 20.2 | % | ||||||||||||||||||
Residential construction loans | 112 | — | — | — | — | 112 | 0.7 | % | ||||||||||||||||||
Consumer loans | 386 | 3 | — | — | — | 389 | 2.4 | % | ||||||||||||||||||
Total | $ | 9,821 | $ | 615 | $ | 1,647 | $ | 1,315 | $ | 2,548 | $ | 15,946 | 100.0 | % | ||||||||||||
Percent of total NPAs | 61.6 | % | 3.9 | % | 10.3 | % | 8.2 | % | 16.0 | % | 100.0 | % | ||||||||||||||
Percent of NPAs to total loans in each region | 3.0 | % | 1.3 | % | 2.5 | % | 1.2 | % | 9.7 | % | 2.8 | % |
June 30, 2011 | December 31, 2010 | ||||||||||||
Amount | % of Total | Amount | % of Total | ||||||||||
(Dollars in thousands) | |||||||||||||
Commercial loans | $ | 15,047 | 25.6 | % | $ | 14,069 | 26.0 | % | |||||
Commercial real estate loans | 16,864 | 28.7 | 15,807 | 29.2 | |||||||||
Commercial construction loans | 8,817 | 15.0 | 7,832 | 14.5 | |||||||||
Land and land development loans | 8,432 | 14.4 | 8,040 | 14.9 | |||||||||
Agriculture loans | 3,074 | 5.2 | 2,380 | 4.4 | |||||||||
Multifamily loans | — | — | — | — | |||||||||
Residential real estate loans | 5,341 | 9.1 | 4,477 | 8.3 | |||||||||
Residential construction loans | 185 | 0.3 | 277 | 0.5 | |||||||||
Consumer loans | 985 | 1.7 | 1,203 | 2.2 | |||||||||
Municipal loans | — | — | — | — | |||||||||
Total classified loans | $ | 58,745 | 100.0 | % | $ | 54,085 | 100.0 | % |
Three Months Ended | June 30, 2011 | % of | Percent Change | June 30, 2010 | % of | |||||||||||
Other Income | Amount | Total | Prev. Yr. | Amount | Total | |||||||||||
(Dollars in thousands) | ||||||||||||||||
Fees and service charges | $ | 1,863 | 68 | % | (9 | )% | $ | 2,047 | 69 | % | ||||||
Loan related fee income | 545 | 20 | % | (32 | )% | 799 | 27 | % | ||||||||
Net gain (loss) on sale of securities | — | — | % | (100 | )% | 70 | 2 | % | ||||||||
Other-than-temporary credit impairment on investment securities | — | — | % | (100 | )% | (237 | ) | (8 | )% | |||||||
BOLI income | 91 | 3 | % | (4 | )% | 95 | 3 | % | ||||||||
Other income | 234 | 9 | % | 5 | % | 224 | 7 | % | ||||||||
Total | $ | 2,733 | 100 | % | (9 | )% | $ | 2,998 | 100 | % |
Six Months Ended | June 30, 2011 | % of | Percent Change | June 30, 2010 | % of | |||||||||||
Other Income | Amount | Total | Prev. Yr. | Amount | Total | |||||||||||
(Dollars in thousands) | ||||||||||||||||
Fees and service charges | $ | 3,534 | 66 | % | (8 | )% | $ | 3,835 | 70 | % | ||||||
Loan related fee income | 1,120 | 21 | (13 | )% | 1,293 | 23 | ||||||||||
Net gain (loss) on sale of securities | — | — | (100 | )% | 142 | 3 | ||||||||||
Other-than-temporary credit impairment on investment securities | — | — | (100 | )% | (256 | ) | (5 | ) | ||||||||
BOLI income | 180 | 3 | (3 | )% | 185 | 3 | ||||||||||
Other income | 562 | 10 | 75 | % | 322 | 6 | ||||||||||
Total | $ | 5,396 | 100 | % | (3 | )% | $ | 5,521 | 100 | % |
Three Months Ended | June 30, 2011 | % of | Percent Change | June 30, 2010 | % of | |||||||||||
Other Expense | Amount | Total | Prev. Yr. | Amount | Total | |||||||||||
(Dollars in thousands) | ||||||||||||||||
Salaries and employee benefits | $ | 4,887 | 50 | % | (4 | )% | $ | 5,088 | 46 | % | ||||||
Occupancy expense | 1,708 | 18 | % | (5 | )% | 1,789 | 16 | % | ||||||||
Advertising | 214 | 2 | % | (22 | )% | 273 | 2 | % | ||||||||
Fees and service charges | 632 | 7 | % | (9 | )% | 697 | 6 | % | ||||||||
Printing, postage and supplies | 302 | 3 | % | (7 | )% | 325 | 3 | % | ||||||||
Legal and accounting | 447 | 5 | % | 33 | % | 337 | 3 | % | ||||||||
FDIC assessment | 331 | 3 | % | (30 | )% | 471 | 4 | % | ||||||||
OREO operations(1) | 150 | 2 | % | (89 | )% | 1,380 | 12 | % | ||||||||
Other expense | 940 | 10 | % | 3 | % | 914 | 8 | % | ||||||||
Total | $ | 9,611 | 100 | % | (15 | )% | $ | 11,274 | 100 | % |
Six Months Ended | June 30, 2011 | % of | Percent Change | June 30, 2010 | % of | |||||||||||
Other Expense | Amount | Total | Prev. Yr. | Amount | Total | |||||||||||
(Dollars in thousands) | ||||||||||||||||
Salaries and employee benefits | $ | 9,833 | 50 | % | (10 | )% | $ | 10,920 | 47 | % | ||||||
Occupancy expense | 3,496 | 18 | (3 | )% | 3,616 | 16 | ||||||||||
Advertising | 344 | 2 | (31 | )% | 495 | 2 | ||||||||||
Fees and service charges | 1,283 | 7 | (5 | )% | 1,349 | 6 | ||||||||||
Printing, postage and supplies | 638 | 3 | (11 | )% | 714 | 3 | ||||||||||
Legal and accounting | 682 | 4 | 3 | % | 661 | 3 | ||||||||||
FDIC assessment | 776 | 4 | (17 | )% | 939 | 4 | ||||||||||
OREO operations(1) | 626 | 3 | (74 | )% | 2,410 | 11 | ||||||||||
Other expense | 1,673 | 9 | (3 | )% | 1,731 | 8 | ||||||||||
Total | $ | 19,351 | 100 | % | (15 | )% | $ | 22,835 | 100 | % |
(1) | Amount includes chargedowns and gains and losses on sale of OREO |
Principal | Fair | Unrealized | Cumulative OTTI Credit Loss Recorded in | Cumulative OTTI Impairment Loss Recorded in | |||||||||||||||
Security | Balance | Value | (Loss) Gain | Income | OCI | ||||||||||||||
Security 1 | $ | 2,918 | $ | 1,853 | $ | 467 | $ | (947 | ) | $ | (805 | ) | |||||||
Security 2 | 7,030 | 5,742 | 299 | (407 | ) | (1,122 | ) | ||||||||||||
Total | $ | 9,948 | $ | 7,595 | $ | 766 | $ | (1,354 | ) | $ | (1,927 | ) |
June 30, 2011 | December 31, 2010 | ||||||||||
Amount | % | Amount | % | ||||||||
(Dollars in thousands) | |||||||||||
Commercial loans | $ | 123,566 | 22.0 | $ | 122,656 | 21.3 | |||||
Commercial real estate loans | 172,701 | 30.7 | 175,559 | 30.5 | |||||||
Commercial construction loans | 17,694 | 3.2 | 17,951 | 3.1 | |||||||
Land and land development loans | 49,197 | 8.8 | 60,962 | 10.6 | |||||||
Agriculture loans | 85,296 | 15.2 | 87,364 | 15.2 | |||||||
Multifamily loans | 27,112 | 4.8 | 26,417 | 4.6 | |||||||
Residential real estate loans | 62,016 | 11.0 | 60,872 | 10.6 | |||||||
Residential construction loans | 4,291 | 0.8 | 3,219 | 0.6 | |||||||
Consumer loans | 12,535 | 2.2 | 14,095 | 2.4 | |||||||
Municipal loans | 7,360 | 1.3 | 6,528 | 1.1 | |||||||
Total loans | 561,768 | 100.0 | 575,623 | 100.0 | |||||||
Allowance for loan losses | (13,687 | ) | (12,455 | ) | |||||||
Deferred loan fees, net of direct origination costs | 114 | 60 | |||||||||
Loans receivable, net | $ | 548,195 | $ | 563,228 | |||||||
Weighted average interest rate | 5.93 | % | 6.04 | % |
North Idaho — Eastern | Magic Valley | Greater Boise | E. Oregon, SW Idaho, excluding | % of Loan type to total | ||||||||||||||||||||||
Loan Portfolio by Location | Washington | Idaho | Area | Boise | Other | Total | loans | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||
Commercial loans | $ | 85,879 | $ | 7,861 | $ | 10,463 | $ | 17,384 | $ | 1,979 | $ | 123,566 | 22.0 | % | ||||||||||||
Commercial real estate loans | 115,615 | 12,916 | 17,093 | 16,186 | 10,891 | 172,701 | 30.7 | % | ||||||||||||||||||
Commercial construction loans | 6,057 | 3,369 | 8,258 | — | 10 | 17,694 | 3.2 | % | ||||||||||||||||||
Land and land development loans | 36,442 | 4,277 | 5,717 | 1,287 | 1,474 | 49,197 | 8.8 | % | ||||||||||||||||||
Agriculture loans | 2,433 | 6,426 | 16,190 | 58,270 | 1,977 | 85,296 | 15.2 | % | ||||||||||||||||||
Multifamily loans | 17,923 | — | 708 | — | 8,481 | 27,112 | 4.8 | % | ||||||||||||||||||
Residential real estate loans | 41,784 | 4,932 | 3,764 | 8,187 | 3,349 | 62,016 | 11.0 | % | ||||||||||||||||||
Residential construction loans | 3,729 | 417 | 145 | — | — | 4,291 | 0.8 | % | ||||||||||||||||||
Consumer loans | 7,194 | 1,182 | 1,165 | 2,585 | 409 | 12,535 | 2.2 | % | ||||||||||||||||||
Municipal loans | 5,842 | — | 1,518 | — | — | 7,360 | 1.3 | % | ||||||||||||||||||
Total | $ | 322,898 | $ | 41,380 | $ | 65,021 | $ | 103,899 | $ | 28,570 | $ | 561,768 | 100.0 | % | ||||||||||||
Percent of total loans in geographic area | 57.5 | % | 7.4 | % | 11.6 | % | 18.5 | % | 5.0 | % | 100.0 | % | ||||||||||||||
Percent of total loans where real estate is the primary collateral | 68.7 | % | 67.3 | % | 58.2 | % | 36.6 | % | 85.6 | % | 62.3 | % |
North Idaho — Eastern | Magic Valley | Greater Boise | E. Oregon, SW Idaho, excluding | % of Loan type to total | ||||||||||||||||||||||
Loan Portfolio by Location | Washington | Idaho | Area | Boise | Other | Total | loans | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||
Commercial loans | $ | 81,916 | $ | 9,572 | $ | 10,747 | $ | 18,865 | $ | 1,556 | $ | 122,656 | 21.3 | % | ||||||||||||
Commercial real estate loans | 115,721 | 14,536 | 18,295 | 17,465 | 9,542 | 175,559 | 30.5 | % | ||||||||||||||||||
Commercial construction loans | 6,738 | 3,070 | 8,143 | — | — | 17,951 | 3.1 | % | ||||||||||||||||||
Land and land development loans | 47,197 | 4,421 | 5,944 | 1,904 | 1,496 | 60,962 | 10.6 | % | ||||||||||||||||||
Agriculture loans | 1,609 | 7,302 | 16,754 | 59,575 | 2,124 | 87,364 | 15.2 | % | ||||||||||||||||||
Multifamily loans | 18,205 | — | 725 | — | 7,487 | 26,417 | 4.6 | % | ||||||||||||||||||
Residential real estate loans | 39,482 | 5,795 | 3,582 | 8,248 | 3,765 | 60,872 | 10.6 | % | ||||||||||||||||||
Residential construction loans | 2,594 | 287 | 7 | 331 | — | 3,219 | 0.6 | % | ||||||||||||||||||
Consumer loans | 7,802 | 1,580 | 1,318 | 2,960 | 435 | 14,095 | 2.4 | % | ||||||||||||||||||
Municipal loans | 4,955 | 1,573 | — | — | — | 6,528 | 1.1 | % | ||||||||||||||||||
Total | $ | 326,219 | $ | 48,136 | $ | 65,515 | $ | 109,348 | $ | 26,405 | $ | 575,623 | 100.0 | % | ||||||||||||
Percent of total loans in geographic area | 56.4 | % | 8.4 | % | 11.5 | % | 19.1 | % | 4.6 | % | 100.0 | % | ||||||||||||||
Percent of total loans where real estate is the primary collateral | 70.6 | % | 64.5 | % | 59.5 | % | 40.2 | % | 85.4 | % | 63.7 | % |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||
2011 | 2010 | % Change | 2011 | 2010 | % Change | ||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
Commercial loans | $ | 13,308 | $ | 16,742 | (20.5 | ) | $ | 38,281 | $ | 46,902 | (18.4 | )% | |||||||||
Commercial real estate loans | 7,840 | 4,158 | 88.6 | 9,606 | 13,499 | (28.8 | )% | ||||||||||||||
Commercial construction loans | 2,459 | 670 | 267.0 | 2,459 | 7,410 | (66.8 | )% | ||||||||||||||
Land and land development loans | 469 | 1,569 | (70.1 | ) | 1,113 | 2,639 | (57.8 | )% | |||||||||||||
Agriculture loans | 17,587 | 19,850 | (11.4 | ) | 35,995 | 46,352 | (22.3 | )% | |||||||||||||
Multifamily loans | — | — | — | — | — | — | % | ||||||||||||||
Residential real estate loans | 11,289 | 17,668 | (36.1 | ) | 29,856 | 34,931 | (14.5 | )% | |||||||||||||
Residential construction loans | 1,208 | 1,198 | 0.8 | 1,908 | 1,801 | 5.9 | % | ||||||||||||||
Consumer | 1,150 | 1,252 | (8.1 | ) | 2,097 | 2,347 | (10.7 | )% | |||||||||||||
Municipal | 202 | 834 | (75.8 | ) | 16,972 | 834 | 1,935.0 | % | |||||||||||||
Total loans originated | $ | 55,512 | $ | 63,941 | (13.2 | ) | $ | 138,287 | $ | 156,715 | (11.8 | )% |
2011 | 2010 | ||||||
(Dollars in thousands) | |||||||
Balance, beginning of period, January 1 | $ | 4,429 | $ | 11,538 | |||
Additions to OREO | 8,115 | 4,928 | |||||
Proceeds from sale of OREO | (4,400 | ) | (5,817 | ) | |||
Valuation Adjustments in the period(1) | (326 | ) | (1,895 | ) | |||
Balance, end of period, June 30 | $ | 7,818 | $ | 8,754 |
(1) | Amount includes chargedowns and gains/losses on sale of OREO |
June 30, 2011 | December 31, 2010 | ||||||||||||
Amount | % | Amount | % | ||||||||||
(Dollars in thousands) | |||||||||||||
Non-interest bearing demand accounts | $ | 166,261 | 22.7 | % | $ | 168,519 | 21.6 | % | |||||
NOW and money market 0.0% to 4.65% | 315,986 | 42.9 | % | 327,891 | 42.1 | % | |||||||
Savings and IRA 0.0% to 5.75% | 75,024 | 10.2 | % | 75,387 | 9.7 | % | |||||||
Certificate of deposit accounts (CDs) | 68,053 | 9.2 | % | 79,533 | 10.2 | % | |||||||
Jumbo CDs | 65,758 | 8.9 | % | 77,685 | 10.0 | % | |||||||
Brokered CDs | 36,899 | 5.0 | % | 40,899 | 5.3 | % | |||||||
CDARS CDs to local customers | 8,048 | 1.1 | % | 8,919 | 1.1 | % | |||||||
Total deposits | $ | 736,029 | 100.0 | % | $ | 778,833 | 100.0 | % | |||||
Weighted average interest rate on certificates of deposit | 1.55 | % | 1.66 | % | |||||||||
Core Deposits as a percentage of total deposits (1) | 84.6 | % | 83.2 | % | |||||||||
Deposits generated from the Company’s market area as a % of total deposits | 95.0 | % | 94.8 | % |
(1) | Core deposits consist of non-interest bearing checking, money market checking, savings accounts, and certificate of deposit accounts of less than $100,000 (excluding public deposits). |
June 30, 2011 | % of total deposits | December 31, 2010 | % of total deposits | June 30, 2010 | % of total deposits | |||||||||||||||
Deposits by Location | ||||||||||||||||||||
North Idaho — Eastern Washington | $ | 360,124 | 48.9 | % | $ | 374,173 | 48.0 | % | $ | 389,935 | 48.4 | % | ||||||||
Magic Valley Idaho | 65,545 | 8.9 | % | 68,870 | 8.8 | % | 71,047 | 8.8 | % | |||||||||||
Greater Boise Area | 63,838 | 8.7 | % | 79,697 | 10.2 | % | 76,879 | 9.5 | % | |||||||||||
Southwest Idaho — Oregon, excluding Boise | 156,618 | 21.3 | % | 165,505 | 21.3 | % | 166,452 | 20.6 | % | |||||||||||
Administration, Secured Savings | 89,904 | 12.2 | % | 90,588 | 11.7 | % | 102,467 | 12.7 | % | |||||||||||
Total | $ | 736,029 | 100.0 | % | $ | 778,833 | 100.0 | % | $ | 806,780 | 100.0 | % |
Well-Capitalized | ||||||||||||||||||||
Actual | Capital Requirements | Requirements | ||||||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||||||
Total capital (to risk-weighted assets): | ||||||||||||||||||||
The Company | $ | 74,602 | 11.46 | % | $ | 52,059 | 8 | % | $ | 65,074 | 10 | % | ||||||||
Panhandle State Bank | 80,092 | 12.31 | % | 52,060 | 8 | % | 65,075 | 10 | % | |||||||||||
Tier I capital (to risk-weighted assets): | ||||||||||||||||||||
The Company | 66,399 | 10.20 | % | 26,030 | 4 | % | 39,044 | 6 | % | |||||||||||
Panhandle State Bank | 71,889 | 11.05 | % | 26,030 | 4 | % | 39,045 | 6 | % | |||||||||||
Tier I capital (to average assets): | ||||||||||||||||||||
The Company | 66,399 | 6.97 | % | 38,130 | 4 | % | 47,663 | 5 | % | |||||||||||
Panhandle State Bank | 71,889 | 7.54 | % | 38,130 | 4 | % | 47,663 | 5 | % |
Payments Due by Period | |||||||||||||||||||
Total | Less than 1 Year | 1 to 3 Years | Over 3 to 5 Years | More than 5 Years | |||||||||||||||
(in thousands) | |||||||||||||||||||
Long-term debt (1) | $ | 58,754 | $ | 1,183 | $ | 26,593 | $ | 5,143 | $ | 25,835 | |||||||||
Short-term debt | 104,723 | 104,723 | — | — | — | ||||||||||||||
Capital lease obligations | — | — | — | — | — | ||||||||||||||
Operating lease obligations (2) | 13,266 | 1,044 | 1,642 | 1,599 | 8,981 | ||||||||||||||
Direct financing obligations (3) | 33,725 | 1,635 | 3,270 | 3,434 | 25,386 | ||||||||||||||
Total | $ | 210,468 | $ | 108,585 | $ | 31,505 | $ | 10,176 | $ | 60,202 |
(1) | Includes interest payments related to long-term debt agreements. |
(2) | Excludes recurring accounts payable, accrued expenses and other liabilities, repurchase agreements and customer deposits, all of which are recorded on the registrant’s balance sheet. See Notes 5 and 6 of Notes to Consolidated Financial Statements. |
(3) | Sandpoint Center Building lease payments related to direct financing transaction executed in August 2009. |
• | further deterioration in economic conditions that could result in increased loan and lease losses; |
• | risks associated with concentrations in real estate-related loans; |
• | declines in real estate values supporting loan collateral; |
• | our ability to comply with the requirements of regulatory orders issued to us and/or our banking subsidiary; |
• | our ability to raise capital or incur debt on reasonable terms; |
• | regulatory limits on our subsidiary bank’s ability to pay dividends to the Company; |
• | applicable laws and regulations and legislative or regulatory changes, including the ultimate financial and operational burden of financial regulatory reform legislation and related regulations and the restrictions imposed on participants in the Troubled Asset Relief Program (“TARP”) Capital Purchase Program, including the impact of executive compensation restrictions, which may affect our ability to retain and recruit executives in competition with other firms who do not operate under those restrictions; |
• | inflation and interest rate levels, and market and monetary fluctuations; |
• | the risks associated with lending and potential adverse changes in credit quality; |
• | changes in market interest rates and spreads, which could adversely affect our net interest income and profitability; |
• | increased loan delinquency rates; |
• | trade, monetary and fiscal policies and laws, including interest rate and income tax policies of the federal government; |
• | the timely development and acceptance of new products and services of Intermountain; |
• | the willingness of customers to substitute competitors’ products and services for Intermountain’s products and services; |
• | technological and management changes; |
• | our ability to recruit and retain key management and staff; |
• | changes in estimates and assumptions used in financial accounting; |
• | the Company’s critical accounting policies and the implementation of such policies; |
• | growth and acquisition strategies; |
• | lower-than-expected revenue or cost savings or other issues in connection with mergers and acquisitions; |
• | changes in consumer spending, saving and borrowing habits; |
• | the strength of the United States economy in general and the strength of the local economies in which Intermountain conducts its operations; |
• | our ability to attract new deposits and loans and leases; |
• | competitive market pricing factors; |
• | stability of funding sources and continued availability of borrowings; |
• | Intermountain’s success in gaining regulatory approvals, when required; |
• | results of regulatory examinations that could restrict growth; |
• | future legislative or administrative changes to the TARP Capital Purchase Program; and |
• | Intermountain’s success at managing the risks involved in the foregoing. |
• | economic conditions may worsen, increasing the likelihood of credit defaults by borrowers; |
• | loan collateral values, especially as they relate to commercial and residential real estate, may decline further, thereby increasing the severity of loss in the event of loan defaults; |
• | nonperforming assets and write-downs of assets underlying troubled credits could adversely affect our earnings; |
• | demand for banking products and services may decline, including services for low cost and non-interest-bearing deposits; and |
• | changes and volatility in interest rates may negatively impact the yields on earning assets and the cost of interest-bearing liabilities. |
• | any authorization or issuance of shares ranking senior to the Preferred Stock; |
• | any amendments to the rights of the Preferred Stock so as to adversely affect the rights, preferences, privileges or voting power of the Preferred Stock; or |
• | consummation of any merger, share exchange or similar transaction unless the shares of Preferred Stock remain outstanding, or if we are not the surviving entity in such transaction, are converted into or exchanged for preference securities of the surviving entity and the shares of Preferred Stock remaining outstanding or such preference securities have the rights, preferences, privileges and voting power of the Preferred Stock. |
• | ensuring that incentive compensation for senior executives does not encourage unnecessary and excessive risks that threaten the value of Intermountain; |
• | a prohibition on cash incentive bonuses to our five most highly-compensated employees, subject to limited exceptions; |
• | a prohibition on equity compensation awards to our five most highly-compensated employees other than long-term restricted stock that cannot be sold, other than to pay related taxes, except to the extent the Treasury no longer holds the Series A Preferred Stock; |
• | a prohibition on any severance or change-in-control payments to our senior executive officers and next five most highly-compensated employees; |
• | a required recovery or “clawback” of any bonus or incentive compensation paid to a senior executive officer or any of the next twenty most highly compensated employees based on financial or other performance criteria that are later proven to be materially inaccurate; and |
• | an agreement not to deduct for tax purposes annual compensation in excess of $500,000 for each senior executive officer. |
Exhibit No. | Exhibit | ||
10.1 | Form of Securities Purchase Agreement dated April 6, 2011 between the Company and the investors signatory thereto (1) | ||
31.1 | Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes Oxley Act of 2002. | ||
31.2 | Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes Oxley Act of 2002. | ||
32 | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002. | ||
101 | The following financial information from the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2011 is formatted in XBRL: (i) the Unaudited Consolidated Balance Sheets, (ii) the Unaudited Consolidated Statements of Operations, (iii) the Unaudited Consolidated Statements of Changes in Cash Flows, (iv) the Unaudited Consolidated Statements of Comprehensive Income (Loss),and (v) the Notes to Unaudited Consolidated Financial Statements, tagged as blocks of text | ||
* | Furnished herewith | ||
(1 | ) | Incorporated by reference from Exhibit 10.1 to the Company's Current Report on Form 8-K filed April 7, 2011 | |
INTERMOUNTAIN COMMUNITY BANCORP (Registrant) | |||
August 10, 2011 | By: | /s/ Curt Hecker | |
Date | Curt Hecker | ||
President and Chief Executive Officer | |||
August 10, 2011 | By: | /s/ Doug Wright | |
Date | Doug Wright | ||
Executive Vice President and Chief Financial Officer |
1. | I have reviewed this quarterly report of Intermountain 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 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 Rule 13a-15(f) and 15(d)-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Curt Hecker | ||
Curt Hecker President and Chief Executive Officer |
1. | I have reviewed this quarterly report of Intermountain 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 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 Rule 13a-15(f) and 15(d)-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Doug Wright | ||
Doug Wright President and Chief Executive Officer |
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/ Curt Hecker | /s/ Doug Wright | |
Curt Hecker Chief Executive Officer | Doug Wright Chief Financial Officer |
Consolidated Balance Sheets Parenthetical
|
Jun. 30, 2011
|
Dec. 31, 2010
|
---|---|---|
STOCKHOLDERS' EQUITY | ||
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 8,428,196 | 8,431,385 |
Common stock, shares outstanding | 8,409,840 | 8,390,877 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 27,000 | 27,000 |
Preferred stock, shares outstanding | 27,000 | 27,000 |
Consolidated Statements of Operations (USD $)
In Thousands, except Share data |
3 Months Ended | 6 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
|||||||
Interest income: | ||||||||||
Loans | $ 8,432 | $ 9,814 | $ 16,766 | $ 19,463 | ||||||
Investments | 2,358 | 1,785 | 4,512 | 3,752 | ||||||
Total interest income | 10,790 | 11,599 | 21,278 | 23,215 | ||||||
Interest expense: | ||||||||||
Deposits | 1,134 | 2,051 | 2,382 | 4,441 | ||||||
Other borrowings | 671 | 789 | 1,200 | 1,595 | ||||||
Total interest expense | 1,805 | 2,840 | 3,582 | 6,036 | ||||||
Net interest income | 8,985 | 8,759 | 17,696 | 17,179 | ||||||
Provision for losses on loans | (2,712) | (4,914) | (4,345) | (11,723) | ||||||
Net interest income after provision for losses on loans | 6,273 | 3,845 | 13,351 | 5,456 | ||||||
Other income: | ||||||||||
Fees and service charges | 1,863 | 2,047 | 3,534 | 3,835 | ||||||
Loan related fee income | 545 | 799 | 1,120 | 1,293 | ||||||
Net gain on sale of securities | 0 | 70 | 0 | 142 | ||||||
Other-than-temporary impairment (“OTTI”) losses on investments (1) | 0 | [1] | (237) | [1] | 0 | [1] | (256) | [1] | ||
Bank-owned life insurance | 91 | 95 | 180 | 185 | ||||||
Other | 234 | 224 | 562 | 322 | ||||||
Total other income | 2,733 | 2,998 | 5,396 | 5,521 | ||||||
Operating expenses | 9,611 | 11,274 | 19,351 | 22,835 | ||||||
Loss before income taxes | (605) | (4,431) | (604) | (11,858) | ||||||
Income tax benefit | 0 | 1,934 | 0 | 5,051 | ||||||
Net loss | (605) | (2,497) | (604) | (6,807) | ||||||
Preferred stock dividend | 448 | 428 | 891 | 847 | ||||||
Net loss applicable to common stockholders | (1,053) | (2,925) | (1,495) | (7,654) | ||||||
Loss per share — basic | $ (0.13) | $ (0.35) | $ (0.18) | $ (0.91) | ||||||
Loss per share — diluted | $ (0.13) | $ (0.35) | $ (0.18) | $ (0.91) | ||||||
Weighted average common shares outstanding — basic | 8,409,786 | 8,388,128 | 8,403,177 | 8,380,265 | ||||||
Weighted average common shares outstanding — diluted | 8,409,786 | 8,388,128 | 8,403,177 | 8,380,265 | ||||||
Other than Temporary Impairment Losses, Investments | 0 | 1,529 | 0 | 1,529 | ||||||
Other than Temporary Impairment Losses, Investments, Portion in Other Comprehensive Income (Loss), before Tax, Portion Attributable to Parent, Available-for-sale Securities | $ 0 | $ 1,292 | $ 0 | $ 1,273 | ||||||
|
Document and Entity Information
|
6 Months Ended | |
---|---|---|
Jun. 30, 2011
|
Aug. 04, 2011
|
|
Entity Information | ||
Entity Registrant Name | INTERMOUNTAIN COMMUNITY BANCORP | |
Entity Central Index Key | 0001284506 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2011 | |
Document Fiscal Year Focus | 2011 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 8,409,730 |
"+ text.join( "
\n" ) +"
" + text[p] + "
\n"; } } }else{ formatted = '' + raw + '
'; } html = ''+ "\n"+''+ "\n"+''+ "\n"+' formatted: '+ ( this.Default == 'raw' ? 'as Filed' : 'with Text Wrapped' ) +''+ "\n"+' | '+ "\n"+'
'+ "\n"+' | '+ "\n"+' '+ "\n"+'
'+ "\n"+' | '+ "\n"+' '+ "\n"+'
Other Borrowings:
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Borrowings: [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Text Block] | Other Borrowings: The components of other borrowings are as follows (in thousands):
_____________________________
|
Fair Value of Financial Instruments:
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments: [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Text Block] | Fair Value of Financial Instruments: Fair value is defined under ASC 820-10 as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal market for the asset or liability in an orderly transaction between market participants on the measurement date. In support of this principle ASC 820-10 establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. The fair value hierarchy is as follows: Level 1 inputs — Unadjusted quoted prices in active markets for identical assets or liabilities that the entity has the ability to access at the measurement date. Level 2 inputs — Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 inputs — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair values requires significant management judgment or estimation. The following table presents information about the Company’s assets measured at fair value on a recurring basis as of June 30, 2011, and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value (in thousands).
The changes in Level 3 assets and liabilities measured at fair value on a recurring basis as of June 30, 2011 are summarized as follows (in thousands):
Intermountain may be required, from time to time, to measure certain other financial assets at fair value on a non-recurring basis. The following table presents the carrying value for these financial assets as of June 30, 2011 (in thousands):
_____________________________
_____________________________
The loans above represent impaired loans that have been adjusted to fair value. When a loan is identified as impaired, the impairment is measured using either the present value of the estimated future cash flows of the loan or for loans that are collateral dependent, the current fair value of the collateral, less selling costs. Depending on the characteristics of a loan, the fair value of collateral is generally estimated by obtaining external appraisals or other market-based valuation methods. If the value of the impaired loan is determined to be less than the recorded investment in the loan, the impairment is recognized and the carrying value of the loan is adjusted to fair value through the allowance for loan and lease losses. The carrying value of loans fully charged-off is zero. OREO represents real estate which the Company has taken control of in partial or full satisfaction of loans. At the time of foreclosure, OREO is recorded at the lower of the carrying amount of the loan or fair value less costs to sell, which becomes the property’s new basis. Any write-downs based on the asset’s fair value at the date of acquisition are charged to the allowance for loan and lease losses. After foreclosure, management periodically performs valuations such that the real estate is carried at the lower of its new cost basis or fair value, net of estimated costs to sell. Fair value adjustments on other real estate owned are recognized within net loss on real estate owned as a component of non-interest expense. The net deferred tax asset valuation includes a valuation allowance that was recognized in the third and fourth quarter of 2010. Intermountain uses an estimate of future earnings, and an evaluation of its loss carryback ability and tax planning strategies to determine whether or not the benefit of its net deferred tax asset will be realized. Intermountain assessed whether it was more likely than not that it would realize the benefits of its deferred tax asset. During the third quarter of 2010, Intermountain determined that the negative evidence associated with a three-year cumulative loss and continued depressed economic conditions outweighed the positive evidence. As a result, Intermountain established a valuation allowance of $7.4 million against its deferred tax asset. The Company added an additional $1.4 million valuation allowance against its deferred tax asset in the fourth quarter of 2010. The Company analyzes the deferred tax asset on a quarterly basis and may recapture a portion or all of this allowance depending on future profitability. At June 30, 2011, the net deferred tax asset totaled $13.7 million, net of a deferred tax asset valuation of $8.8 million. The following is a further description of the principal valuation methods used by the Company to estimate the fair values of its financial instruments. Securities The fair values of securities, other than those categorized as level 3 described above, are based principally on market prices and dealer quotes. Certain fair values are estimated using pricing models or are based on comparisons to market prices of similar securities. The fair value of stock in the FHLB equals its carrying amount since such stock is only redeemable at its par value. Available for Sale Securities. Securities totaling $161.3 million classified as available for sale are reported at fair value utilizing Level 2 inputs. For these securities, the Company obtained fair value measurements from an independent pricing service and internally validated these measurements. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus, prepayment speeds, credit information and the bond’s terms and conditions, among other things. The available for sale portfolio also includes $29.4 million in super senior or senior tranche collateralized mortgage obligations not backed by a government or other agency guarantee. These securities are collateralized by fixed rate prime or Alt A mortgages, are structured to provide credit support to the senior tranches, and are carefully analyzed and monitored by management. Because of disruptions in the current market for mortgage-backed securities and collateralized mortgage obligations, an active market did not exist for these securities at June 30, 2011. This is evidenced by a significant widening in the bid-ask spread for these types of securities and the limited volume of actual trades made. As a result, less reliance can be placed on easily observable market data, such as pricing on transactions involving similar types of securities, in determining their current fair value. As such, significant adjustments were required to determine the fair value at the June 30, 2011 measurement date. These securities are valued using Level 3 inputs. In valuing these securities, the Company utilized the same independent pricing service as for its other available-for-sale securities and internally validated these measurements. In addition, it utilized FHLB indications, which are backed by significant experience in whole-loan collateralized mortgage obligation valuation and another market source to derive independent valuations and used this data to evaluate and adjust the original values derived. In addition to the observable market-based input including dealer quotes, market spreads, live trading levels and execution data, both the pricing service and the FHLB pricing also employed a present-value income model that considered the nature and timing of the cash flows and the relative risk of receiving the anticipated cash flows as agreed. The discount rates used were based on a risk-free rate, adjusted by a risk premium for each security. In accordance with the requirements of ASC 820-10, the Company has determined that the risk-adjusted discount rates utilized appropriately reflect the Company’s best estimate of the assumptions that market participants would use in pricing the assets in a current transaction to sell the asset at the measurement date. Risks include nonperformance risk (that is, default risk and collateral value risk) and liquidity risk (that is, the compensation that a market participant receives for buying an asset that is difficult to sell under current market conditions). To the extent possible, the pricing services and the Company validated the results from these models with independently observable data. In evaluating securities in the investment portfolio for OTTI, the Company evaluated the following factors:
Based on the factors above, the Company has determined that two securities were subject to OTTI as of June 30, 2011. The following table presents the OTTI losses for the six months ended June 30, 2011 and June 30, 2010 (in thousands):
_____________________________
The existing OTTI recognized on investment securities available for sale primarily relates to two non-agency collateralized mortgage obligations. Each of these securities holds various levels of credit subordination. These securities were valued by third-party pricing services using matrix or model pricing methodologies and were corroborated by broker indicative bids. We estimated the cash flows of the underlying collateral for each security considering credit, interest and prepayment risk models that incorporate management’s estimate of projected key assumptions including prepayment rates, collateral default rates and loss severity. Assumptions utilized vary from security to security, and are influenced by factors such as underlying loan interest rates, geographic location, borrower characteristics, vintage, and historical experience. We then used a third party to obtain information about the structure of each security, including subordination and other credit enhancements, in order to determine how the underlying collateral cash flows will be distributed to each security issued in the structure. These cash flows were then discounted at the interest rate used to recognize interest income on each security. We review the actual collateral performance of these securities on a quarterly basis and update the inputs as appropriate to determine the projected cash flows. Loans. Loans are generally not recorded at fair value on a recurring basis. Periodically, the Company records nonrecurring adjustments to the carrying value of loans based on fair value measurements for partial charge-offs of the uncollectible portions of those loans. Nonrecurring adjustments also include certain impairment amounts for impaired loans when establishing the allowance for credit losses. Such amounts are generally based on either the estimated fair value of the cash flows to be received or the fair value of the underlying collateral supporting the loan less selling costs. Real estate collateral on these loans and the Company’s OREO is typically valued using appraisals or other indications of value based on recent comparable sales of similar properties or assumptions generally observable in the marketplace. Management reviews these valuations and makes additional valuation adjustments, as necessary, including subtracting estimated costs of liquidating the collateral or selling the OREO. The related nonrecurring fair value measurement adjustments have generally been classified as Level 3 because of the significant assumptions required estimating future cash flows on these loans, and the rapidly changing and uncertain collateral values underlying the loans. Extreme volatility and the lack of relevant and current sales data in the Company’s market areas for various types of collateral create additional uncertainties and require the use of multiple sources and management judgment to make adjustments. Loans subject to nonrecurring fair value measurement were $43.9 million at June 30, 2011, all of which were classified as Level 3. Other Real Estate Owned. At the applicable foreclosure date, OREO is recorded at fair value of the real estate, less the estimated costs to sell the real estate. Subsequently, OREO is carried at the lower of cost or net realizable value (fair value less estimated selling costs), and is periodically assessed for impairment based on fair value at the reporting date. Fair value is determined from external appraisals and other valuations using judgments and estimates of external professionals. Many of these inputs are not observable and, accordingly, these measurements are classified as Level 3. The Company’s OREO at June 30, 2011 totaled $7.8 million, all of which was classified as Level 3. Interest Rate Swaps. During the third quarter of 2008, the Company entered into an interest rate swap contract with Pacific Coast Bankers Bank. The purpose of the $8.2 million notional value swap is to convert the variable rate payments made on the Trust Preferred I obligation (see Note 6 — Other Borrowings) to a series of fixed rate payments for five years, as a hedging strategy to help manage the Company’s interest-rate risk. This contract is carried as an asset or liability at fair value, and as of June 30, 2011, it was a liability with a fair value of $791,000. During the first quarter of 2009, the Company entered into an interest rate swap contract with Pacific Coast Bankers Bank. The purpose of the $1.6 million notional value swap is to convert the fixed rate payments earned on a loan receivable to a series of variable rate payments for ten years, as a hedging strategy to help manage the Company’s interest-rate risk. This contract is carried as an asset or liability at fair value, and as of June 30, 2011, it was an asset with a fair value of ($68,000). During the second quarter of 2009, the Company entered into an interest rate swap contract with Pacific Coast Bankers Bank. The purpose of the $1.0 million notional value swap is to convert the fixed rate payments earned on a loan receivable to a series of variable rate payments for ten years, as a hedging strategy to help manage the Company’s interest-rate risk. This contract is carried as an asset or liability at fair value, and as of June 30, 2011, it was an asset with a fair value of ($23,000). Intermountain is required to disclose the estimated fair value of financial instruments, both assets and liabilities on and off the balance sheet, for which it is practicable to estimate fair value. These fair value estimates are made at June 30, 2011 based on relevant market information and information about the financial instruments. Fair value estimates are intended to represent the price an asset could be sold at or the price a liability could be settled for. However, given there is no active market or observable market transactions for many of the Company’s financial instruments, the Company has made estimates of many of these fair values which are subjective in nature, involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimated values. The estimated fair value of the financial instruments as of June 30, 2011 and December 31, 2010, are as follows (in thousands):
The methods and assumptions used to estimate the fair values of each class of financial instruments are as follows: Cash, Cash Equivalents, Federal Funds and Certificates of Deposit The carrying value of cash, cash equivalents, federal funds sold and certificates of deposit approximates fair value due to the relatively short-term nature of these instruments. Investments and BOLI See the discussion above regarding the fair values of investment securities. The fair value of BOLI is equal to the cash surrender value of the life insurance policies. Loans Receivable and Loans Held For Sale The fair value of performing mortgage loans, commercial real estate, construction, consumer and commercial loans is estimated by discounting the cash flows using interest rates that consider the interest rate risk inherent in the loans and current economic and lending conditions. See the above discussion for fair valuation of impaired loans. Non-accrual loans are assumed to be carried at their current fair value and therefore are not adjusted. Deposits The fair values for deposits subject to immediate withdrawal such as interest and non-interest bearing checking, savings and money market deposit accounts are discounted using market rates for replacement dollars and using Company and industry statistics for decay/maturity dates. The carrying amounts for variable-rate certificates of deposit and other time deposits approximate their fair value at the reporting date. Fair values for fixed-rate certificates of deposit are estimated by discounting future cash flows using interest rates currently offered on time deposits with similar remaining maturities. Borrowings The carrying amounts of short-term borrowings under repurchase agreements approximate their fair values due to the relatively short period of time between the origination of the instruments and their expected payment. The fair value of long-term FHLB Seattle advances and other long-term borrowings is estimated using discounted cash flow analyses based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements with similar remaining terms. Accrued Interest The carrying amounts of accrued interest payable and receivable approximate their fair value |
Investments:
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Marketable Securities [Text Block] | Investments: The amortized cost and fair values of investments are as follows (in thousands):
The following table summarizes the duration of Intermountain’s unrealized losses on available-for-sale and held-to-maturity securities as of the dates indicated (in thousands).
At June 30, 2011, the amortized cost and fair value of available-for-sale and held-to-maturity debt securities, by contractual maturity, are as follows (in thousands):
Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. Intermountain’s investment portfolios are managed to provide and maintain liquidity; to maintain a balance of high quality, diversified investments to minimize risk; to offset other asset portfolio elements in managing interest rate risk; to provide collateral for pledging; and to maximize returns. At June 30, 2011, the Company does not intend to sell any of its available-for-sale securities that have a loss position and it is not likely that it will be required to sell the available-for-sale securities before the anticipated recovery of their remaining amortized cost or maturity date. The unrealized losses on residential mortgage-backed securities without other-than-temporary impairment (“OTTI”) were considered by management to be temporary in nature. Investment securities are reviewed on an ongoing basis for the presence of OTTI or permanent impairment, taking into consideration current market conditions, fair value in relationship to cost, the extent and nature of the change in fair value, issuer rating changes and trends, whether we intend to sell a security or if it is likely that we will be required to sell the security before recovery of our amortized cost basis of the investment, which may be at maturity, and other factors. For the calculation and presentation of OTTI of debt securities the Company considers whether they intend to sell a security or if it is likely that they would be required to sell the security before recovery of the amortized cost basis of the investment, which may be maturity. For debt securities, if the Company intends to sell the security or it is likely that it will be required to sell the security before recovering its cost basis, the entire impairment loss would be recognized in earnings as an OTTI. If the Company does not intend to sell the security and it is not likely that it will be required to sell the security but does not expect to recover the entire amortized cost basis of the security, only the portion of the impairment loss representing credit losses would be recognized in earnings. The credit loss on a security is measured as the difference between the amortized cost basis, less prior credit impairment losses taken, and the present value of the cash flows expected to be collected. Projected cash flows are discounted by the original or current effective interest rate depending on the nature of the security being measured for potential OTTI. The remaining impairment related to all other factors, the difference between the present value of the cash flows expected to be collected and fair value, is recognized as a charge to other comprehensive income (“OCI”). Impairment losses related to all other factors are presented as separate categories within OCI. For investment securities held to maturity, this amount is accreted over the remaining life of the debt security prospectively based on the amount and timing of future estimated cash flows. The accretion of the amount recorded in OCI increases the carrying value of the investment and does not affect earnings. If there is an indication of additional credit losses the security is reevaluated according to the procedures described above. The following table presents the OTTI losses for the six months ended June 30, 2011 and June 30, 2010:
_____________________________
The OTTI recognized on investment securities available for sale relates to two non-agency collateralized mortgage obligations. The Company recognized OTTI on the first investment security in the first quarter of 2009 and the second security in the second quarter of 2010. Each of these securities holds various levels of credit subordination. These securities were valued by third-party pricing services using matrix or model pricing methodologies and were corroborated by broker indicative bids. We estimated the cash flows of the underlying collateral for each security considering credit, interest and prepayment risk models that incorporate management’s estimate of projected key assumptions including prepayment rates, collateral default rates and loss severity. Assumptions utilized vary from security to security, and are influenced by factors such as underlying loan interest rates, geographic location, borrower characteristics, vintage, and historical experience. We then used a third party to obtain information about the structure of each security, including subordination and other credit enhancements, in order to determine how the underlying collateral cash flows will be distributed to each security issued in the structure. These cash flows were then discounted at the interest rate equal to the yield anticipated at the time the security was purchased. We review the actual collateral performance of these securities on a quarterly basis and update the inputs as appropriate to determine the projected cash flows. See Note 11 “Fair Value of Financial Instruments” for more information on the calculation of fair or carrying value for the investment securities. |
Operating Expenses:
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating Expenses [Text Block] | Operating Expenses: The following table details Intermountain’s components of total operating expenses (in thousands):
Salaries and employee benefits expense decreased $1.1 million or 10.0%, over the six month period last year as a result of planned staff reductions implemented throughout 2010 and the first half of 2011. The employee full time equivalent (“FTE”) number at June 30, 2011 totaled 332, a reduction of 37 FTEs, or 10.0%, from June 30, 2010. Severance expense for the six months ended June 30, 2011 was $34,000 as compared to $389,000 in the six months ended June 30, 2010. The Company continues to suspend salary increases and bonuses for executive officers, but reinstated merit increases for other employees in the first quarter of 2011. Occupancy expenses decreased $120,000, or 3.3%, for the six month period ended June 30, 2011 compared to the same period one year ago. The decrease reflects lower depreciation and rent expense as a result of reduced purchases of software and equipment and the termination of equipment and administrative office leases no longer needed. The advertising expense decrease of $151,000 or 30.5% for the six month period compared to the same period one year ago is a result of reductions in general advertising and media expenses, as the Company has focused marketing efforts on more targeted audiences and reduced expenditures on broad print, yellow page and other media. Fees and service charges decreased $66,000 for the six month period ended June 30, 2011 compared to the same period one year ago, as lower collection and credit service fees offset increased debit card and computer services expense. Printing, postage and supplies decreased $76,000 for the six month period in comparison to last year’s total, as a result of lower check printing, postage and statement rendering expenses. Legal and accounting fees increased by $21,000 in comparison to the same six-month period in 2010 as cost reductions in legal services were offset by increased consulting expenses related to Company restructuring efforts. The $163,000 decrease in FDIC expenses for the six month period ended June 30, 2011 over last year primarily reflects changes to the FDIC assessment formula in the second quarter of 2011 and lower asset balances. OREO operations, related valuation adjustments and the gain or loss on sale of OREO decreased by $1.8 million for the six month period over the same period last year, as a result of reductions in OREO balances and stabilizing property values. Other expenses decreased $58,000, or 3.4%, for the six month period over the same period last year, reflecting decreases in operational losses and training, travel, courier, armored car and meeting expenses. |
New Accounting Pronouncements:
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
New Accounting Pronouncements: [Abstract] | |
Description of New Accounting Pronouncements Not yet Adopted [Text Block] | New Accounting Pronouncements: In July 2010, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2010-20,”Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses.” This update amends codification topic 310 on receivables to improve the disclosures that an entity provides about the credit quality of its financing receivables and the related allowance for credit losses. As a result of these amendments, an entity is required to disaggregate by portfolio segment or class certain existing disclosures and provide certain new disclosures about its financing receivables and related allowance for credit losses. This guidance was phased in, with the new disclosure requirements for period end balances effective as of December 31, 2010, and the new disclosure requirements for activity during the reporting period effective March 31, 2011. The troubled debt restructuring disclosures in this ASU have been delayed by ASU 2011-01, “Deferral of the Effective Date of Disclosures about Troubled Debt Restructurings in Update No. 2010-20,” which was issued in January 2011. In April 2011, the FASB issued ASU 2011-2, “A Creditor’s Determination of Whether a Restructuring Is a Troubled Debt Restructuring.” This update to codification topic 310 provides guidance for what constitutes a concession, as well as clarity for determining whether a debtor is experiencing financial difficulties. The amendments in this update are effective for the Company on July 1, 2011, with retrospective application from January 1, 2011. This update is not expected to have a material effect on the Company’s consolidated financial statements. In April, 2011, the FASB issued ASU No. 2011-03, “Reconsideration of Effective Control for Repurchase Agreements.” The amendments in this ASU remove from the assessment of effective control the criteria relating to the transferor's ability to repurchase or redeem financial assets on substantially the agreed terms, even in the event of default by the transferee. The amendments in this ASU also eliminate the requirement to demonstrate that the transferor possesses adequate collateral to fund substantially all the cost of purchasing replacement financial assets. The guidance in this ASU is effective for the first interim or annual period beginning on or after December 15, 2011. The guidance should be applied prospectively to transactions or modifications of existing transactions that occur on or after the effective date. Early adoption is not permitted. The Company will adopt the methodologies prescribed by this ASU by the date required, and does not anticipate that the ASU will have a material effect on its financial position or results of operations. In May, 2011, the FASB issued ASU No. 2011-04, “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs.” The amendments in this ASU generally represent clarifications of Topic 820, but also include some instances where a particular principle or requirement for measuring fair value or disclosing information about fair value measurements has changed. This ASU results in common principles and requirements for measuring fair value and for disclosing information about fair value measurements in accordance with U.S. GAAP and IFRSs. The amendments in this ASU are to be applied prospectively. For public entities, the amendments are effective during interim and annual periods beginning after December 15, 2011. Early application by public entities is not permitted. The Company will adopt the methodologies prescribed by this ASU by the date required, and does not anticipate that the ASU will have a material effect on its financial position or results of operations. In June, 2011, the FASB issued ASU No. 2011-05, “Amendments to Topic 220, Comprehensive Income.” Under the amendments in this ASU, an entity has the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. This ASU eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders' equity. The amendments in this ASU do not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income. The amendments in this ASU should be applied retrospectively. For public entities, the amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. Early adoption is permitted, because compliance with the amendments is already permitted. The amendments do not require any transition disclosures. Due to the recency of this pronouncement, the Company is evaluating its timing of adoption of ASU 2011-05, but will adopt the ASU retrospectively by the due date. |
Income Taxes:
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Income Taxes: [Abstract] | |
Income Tax Disclosure [Text Block] | Income Taxes: Intermountain uses an estimate of future earnings, and an evaluation of its loss carryback ability and tax planning strategies to determine whether or not the benefit of its net deferred tax asset will be realized. At June 30, 2011, Intermountain assessed whether it was more likely than not that it would realize the benefits of its deferred tax asset. Intermountain determined that the negative evidence associated with a three-year cumulative loss for the period ended December 31, 2010, and challenging economic conditions continued to outweigh the positive evidence. Therefore, Intermountain maintained a valuation allowance of $8.8 million against its deferred tax asset. The company analyzes the deferred tax asset on a quarterly basis and may recapture a portion or all of this allowance depending on future profitability. Including the valuation allowance, Intermountain had a net deferred tax asset of $13.7 million as of June 30, 2011, compared to a net deferred tax asset of $15.2 million as of December 31, 2010. The decrease in the net deferred tax asset is primarily due to the increase in the unrealized market value of the Company's investment portfolio at June 30, 2011 compared to December 31, 2010. The completion of the $70 million capital raise announced by Intermountain on April 6, 2011 which is expected to close in the third quarter of this year, is likely to trigger Internal Revenue Code Section 382 limitations on the amount of tax benefit from net operating loss carryforwards that the Company can recapture annually, because of the planned level of investments by several of the larger investors. This could impact the amount and timing of the recapture of the valuation allowance, largely depending on the level of market interest rates and the fair value of the Company’s balance sheet at the time the announced offering is completed. |
Earnings Per Share:
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Text Block] | Earnings Per Share: The following table presents the basic and diluted earnings per share computations (numbers in thousands):
Common stock equivalents were calculated using the treasury stock method. |
Consolidated Statements of Comprehensive Income (Loss) (USD $)
In Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
|
Net loss | $ (605) | $ (2,497) | $ (604) | $ (6,807) |
Other comprehensive income: | ||||
Change in unrealized gains on investments, and mortgage backed securities (“MBS”) available for sale, excluding non-credit loss on impairment of securities | 3,719 | 4,291 | 3,945 | 4,906 |
Non-credit loss on impairment on available-for-sale debt | 0 | (1,292) | 0 | (1,273) |
Less deferred income tax provision | (1,472) | (1,187) | (1,561) | (1,438) |
Change in fair value of qualifying cash flow hedge | (6) | (75) | 7 | 170 |
Net other comprehensive income | 2,241 | 1,737 | 2,391 | 2,365 |
Comprehensive income (loss) | $ 1,636 | $ (760) | $ 1,787 | $ (4,442) |
Loans and Allowance for Loan Losses:
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans and Allowance for Loan Losses: [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | Loans and Allowance for Loan Losses: The components of loans receivable are as follows (in thousands):
The components of allowance for loan loss by types are as follows (in thousands):
A summary of current, past due and nonaccrual loans as of June 30, 2011 is as follows, (in thousands):
A summary of current, past due and nonaccrual loans as of December 31, 2010 is as follows, (in thousands):
Troubled Debt Restructures (loans which had been negotiated at below market interest rates or for which other concessions were granted, but are accruing interest) were $6.5 million and $4.8 million at June 30, 2011 and December 31, 2010, respectively. The allowance for loan losses and reserve for unfunded commitments are maintained at levels considered adequate by management to provide for probable loan losses as of the Consolidated Balance Sheet reporting dates. The allowance for loan losses and reserve for unfunded commitments are based on management’s assessment of various factors affecting the loan portfolio, including problem loans, business conditions and loss experience, and an overall evaluation of the quality of the underlying collateral. Changes in the allowance for loan losses and the reserve for unfunded commitments during the six-month period ending June 30 are as follows:
Allowance for Unfunded Commitments
The following table provides information with respect to impaired loans as of the quarter ended June 30, 2011:
The following table provides information with respect to impaired loans as of the year ended December 31, 2010:
Credit quality indicators The loan and lease credit quality indicators for loans are developed through review of individual borrowers on an ongoing basis. Each borrower is evaluated at least annually with more frequent evaluation of larger or potentially riskier loans or leases. The indicators represent the rating for loans or leases as of the date presented based on the most recent assessment performed. These credit quality indicators are defined as follows: Satisfactory — A satisfactory rated loan is not adversely classified because it does not display any of the characteristics for adverse classification. Watch — A watch loan has a solid but vulnerable repayment source. There is loss exposure only if the primary repayment source and collateral experience prolonged deterioration. Loans in this risk grade category are subject to frequent review and change due to the increased vulnerability of repayment sources and collateral valuations. Special mention — A special mention loan has potential weaknesses that deserve management’s close attention. If left uncorrected, such potential weaknesses may result in deterioration of the repayment prospects or collateral position at some future date. Special mention loans are not adversely classified and do not warrant adverse classification. Substandard — A substandard loan is inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans classified as substandard generally have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt. These loans are characterized by the distinct possibility of loss if the deficiencies are not corrected. Doubtful — A loan classified doubtful has all the weaknesses inherent in a loan classified substandard with the added characteristic that the weaknesses make collection or liquidation in full highly questionable and improbable, on the basis of currently existing facts, conditions, and values. Loss — Loans classified loss are considered uncollectible and of such little value that their continuing to be carried as an asset is not warranted. This classification does not necessarily mean that there is to no potential for recovery or salvage value, but rather that it is not appropriate to defer a full write-off even though partial recovery may be realized in the future. Credit quality indicators by loan segment are summarized as follows:
A summary of non-performing assets and classified loans at the dates indicated is as follows:
_____________________________
Classified loans included non-performing loans and performing substandard loans where management believes that the loans may not return principal and interest per their original contractual terms. A loan that is classified may not necessarily result in a loss. In the tables above, the increase in classified loans, loans graded substandard, grade 6, and non-performing assets is largely related to the addition of one large credit relationship to these totals during 2011. The second quarter provision for loan losses and the allowance for loan losses at June 30, 2011 includes a reserve that management believes is sufficient to cover anticipated losses on this relationship. |
Other Real Estate Owned:
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Real Estate Owned: [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate Owned [Text Block] | Other Real Estate Owned: At the applicable foreclosure date, OREO is recorded at the fair value of the real estate, less the estimated costs to sell the real estate. The carrying value of OREO is regularly evaluated and, if necessary, the carrying value is reduced to net realizable value. The following table presents OREO for the periods presented:
_____________________________
The balance of OREO increased by $4.1 million during the second quarter, 2011, primarily as the result of the conversion to OREO of one large credit relationship totaling $5.9 million. For the periods indicated, OREO assets consisted of the following (in thousands):
The Company’s Special Assets Group continues to dispose of OREO properties through a combination of individual sales to investors, bulk sales to investors, and auction sales, generally as a last resort. |
Subsequent Events:
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | Subsequent Events: Intermountain performed an evaluation of subsequent events through the date this report was filed with the Securities and Exchange Commission. |
Advances from the Federal Home Loan Bank of Seattle:
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Advances from the Federal Home Loan Bank of Seattle: [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Federal Home Loan Bank Advances, Disclosure [Text Block] | Advances from the Federal Home Loan Bank of Seattle: Panhandle State Bank, the banking subsidiary of Intermountain, has a credit line with FHLB of Seattle that allows it to borrow funds up to a percentage of its total assets, subject to collateralization requirements. Certain loans are used as collateral for these borrowings. At June 30, 2011 and December 31, 2010, this credit line represented a total borrowing capacity of $106.9 million and $120.2 million, of which $70.3 million and $83.6 million was available, respectively. The advances from FHLB at June 30, 2011 and December 31, 2010 are repayable as follows (in thousands):
Only member institutions have access to funds from the Federal Home Loan Banks. As a condition of membership, Panhandle is required to hold FHLB stock. As of June 30, 2011 and December 31, 2010, Panhandle held $2.3 million for both time periods of FHLB stock. The FHLB of Seattle announced that they would no longer pay dividends or redeem or repurchase capital stock until further notice. Each FHLB continues to monitor its capital and other relevant financial measures as a basis for determining a resumption of dividends and capital stock repurchases at some later date. |
Basis of Presentation:
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Basis of Presentation: [Abstract] | |
Basis of Accounting [Text Block] | Basis of Presentation: The foregoing unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X as promulgated by the Securities and Exchange Commission. Accordingly, these financial statements do not include all of the disclosures required by accounting principles generally accepted in the United States of America for complete financial statements. These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2010. In the opinion of management, the unaudited interim consolidated financial statements furnished herein include adjustments, all of which are of a normal recurring nature, necessary for a fair statement of the results for the interim periods presented. The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and the reported amounts of revenues and expenses during the reporting period. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of Intermountain Community Bancorp’s (“Intermountain’s” or “the Company’s”) consolidated financial statements; accordingly, it is possible that the actual results could differ from these estimates and assumptions, which could have a material effect on the reported amounts of Intermountain’s consolidated financial position and results of operations. |
Derivative Financial Instruments:
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Financial Instruments: [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Text Block] | Derivative Financial Instruments: Management uses derivative financial instruments to protect against the risk of interest rate movements on the value of certain assets and liabilities and on future cash flows. The instruments that have been used by the Company include interest rate swaps and cash flow hedges with indices that relate to the pricing of specific assets and liabilities. Derivative instruments have inherent risks, primarily market risk and credit risk. Market risk is associated with changes in interest rates and credit risk relates to the risk that the counterparty will fail to perform according to the terms of the agreement. The amounts potentially subject to market and credit risks are the streams of interest payments under the contracts and the market value of the derivative instrument which is determined based on the interaction of the notional amount of the contract with the underlying instrument, and not the notional principal amounts used to express the volume of the transactions. Management monitors the market risk and credit risk associated with derivative financial instruments as part of its overall Asset/Liability management process. In accordance with ASC 815, Derivatives and Hedging, the Company recognizes all derivative financial instruments in the consolidated financial statements at fair value regardless of the purpose or intent for holding the instrument. Derivative financial instruments are included in other assets or other liabilities, as appropriate, on the Consolidated Balance Sheet. Changes in the fair value of derivative financial instruments are either recognized periodically in income or in stockholders’ equity as a component of other comprehensive income depending on whether the derivative financial instrument qualifies for hedge accounting, and if so, whether it qualifies as a fair value hedge or cash flow hedge. Generally, changes in fair values of derivatives accounted for as fair value hedges are recorded in income in the same period and in the same income statement line as changes in the fair values of the hedged items that relate to the hedged risk(s). Changes in fair values of derivative financial instruments accounted for as cash flow hedges, to the extent they are effective hedges, are recorded as a component of other comprehensive income, net of deferred taxes. Changes in fair values of derivative financial instruments not qualifying as hedges pursuant to ASC 815 are reported in non-interest income. Derivative contracts are valued by the counter party and are periodically validated by management. Interest Rate Swaps — Designated as Cash Flow Hedges The tables below identify the Company’s interest rate swaps at June 30, 2011 and December 31, 2010, which were entered into to hedge certain LIBOR-based trust preferred debentures and designated as cash flow hedges pursuant to ASC 815 (dollars in thousands):
The fair values, or unrealized losses, of $791,000 at June 30, 2011 and $892,000 at December 31, 2010 are included in other liabilities. The Company has deferred the interest payments on the related Trust Preferred borrowing beginning with the January 2010 scheduled remittance. As a result of the deferred interest payments, a calculation of the effectiveness of the hedge was prepared. It was concluded that although the hedge is generally effective, there is a small amount of ineffectiveness due to the delayed payments. The Company reversed $90,000 in interest expense in the six months ended June 30, 2011 related to the ineffective portion of the hedge as the cash flow hedge became more effective. The changes in fair value, net of tax, are separately disclosed in the statement of changes in stockholders’ equity as a component of comprehensive income (loss). Net cash flows from these interest rate swaps are included in interest expense on trust preferred debentures. The unrealized loss at June 30, 2011 is a component of comprehensive income (loss) for June 30, 2011. At June 30, 2011, Intermountain had $582,000 in restricted cash, $190,000 in Pacific Coast Bankers Bank stock, and 100% of Panhandle State Bank stock pledged as collateral for the cash flow hedge. The following table provides a reconciliation of cash flow hedges measured at fair value during the periods indicated (in thousands):
Interest Rate Swaps — Not Designated as Hedging Instruments Under ASC 815 The Company has purchased certain derivative products to allow the Company to effectively convert a fixed rate loan to a variable rate payment stream. The Company economically hedges derivative transactions by entering into offsetting derivatives executed with third parties upon the origination of a fixed rate loan with a customer. Derivative transactions executed as part of this program are not designated as ASC 815 hedge relationships and are, therefore, marked to market through earnings each period. In most cases the derivatives have mirror-image terms to the underlying transaction being hedged, which result in the positions’ changes in fair value offsetting completely through earnings each period. However, to the extent that the derivatives are not a mirror-image, changes in fair value will not completely offset, resulting in some earnings impact each period. Changes in the fair value of these interest rate swaps are included in other non-interest income. The following table summarizes these interest rate swaps as of June 30, 2011 and December 31, 2010 (in thousands):
At June 30, 2011, loans receivable included ($91,000) of derivative assets and other liabilities included $0 of derivative assets related to these interest rate swap transactions. At June 30, 2011, the interest rate swaps had a maturity date of March 2019 and April 2024 and Intermountain had $72,000 in restricted cash as collateral for the interest rate swaps. |
Consolidated Balance Sheets (USD $)
In Thousands |
Jun. 30, 2011
|
Dec. 31, 2010
|
---|---|---|
Cash and cash equivalents: | ||
Interest-bearing | $ 77,724 | $ 132,693 |
Non-interest bearing and vault | 13,571 | 11,973 |
Restricted cash | 2,832 | 3,290 |
Available-for-sale securities, at fair value | 210,064 | 183,081 |
Held-to-maturity securities, at amortized cost | 22,154 | 22,217 |
Federal Home Loan Bank (“FHLB”) of Seattle stock, at cost | 2,310 | 2,310 |
Loans held for sale | 1,615 | 3,425 |
Loans receivable, net | 548,195 | 563,228 |
Accrued interest receivable | 4,183 | 4,360 |
Office properties and equipment, net | 38,982 | 40,246 |
Bank-owned life insurance | 8,946 | 8,765 |
Other intangibles | 249 | 310 |
Other real estate owned (“OREO”) | 7,818 | 4,429 |
Prepaid expenses and other assets | 22,037 | 24,782 |
Total assets | 960,680 | 1,005,109 |
LIABILITIES | ||
Deposits | 736,029 | 778,833 |
Securities sold subject to repurchase agreements | 99,687 | 105,116 |
Advances from Federal Home Loan Bank | 34,000 | 34,000 |
Cashier checks issued and payable | 520 | 580 |
Accrued interest payable | 1,484 | 1,406 |
Other borrowings | 16,527 | 16,527 |
Accrued expenses and other liabilities | 11,990 | 9,294 |
Total liabilities | 900,237 | 945,756 |
Commitments and contingent liabilities | ||
STOCKHOLDERS’ EQUITY | ||
Common stock 300,000,000 shares authorized; 8,428,196 and 8,431,385 shares issued and 8,409,840 and 8,390,877 shares outstanding as of June 30, 2011 and December 31, 2010 | 78,822 | 78,803 |
Preferred stock 1,000,000 shares authorized; 27,000 shares issued and outstanding as of June 30, 2011 and December 31, 2010 | 25,969 | 25,794 |
Accumulated other comprehensive loss, net of tax | 1,162 | (1,229) |
Accumulated deficit | (45,510) | (44,015) |
Total stockholders’ equity | 60,443 | 59,353 |
Total liabilities and stockholders’ equity | $ 960,680 | $ 1,005,109 |