PENNSYLVANIA
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25-1440803
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(State or other jurisdiction of
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(I.R.S. Employer
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incorporation or organization)
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Identification No.)
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Part I - FINANCIAL INFORMATION
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||
Item 1 - Financial Statements
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3 | |
Consolidated Balance Sheets as of March 31, 2011 and December 31, 2010 (unaudited)
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3 | |
Consolidated Statements of Income for the Three Months ended March 31, 2011 and 2010 (unaudited)
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4 | |
Consolidated Statements of Changes in Shareholders’ Equity for the Three Months ended March 31, 2011 and 2010 (unaudited)
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5 | |
Consolidated Statements of Cash Flows for the Three Months ended March 31, 2011 and 2010 (unaudited)
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6 | |
Notes to Consolidated Financial Statements (unaudited)
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7 | |
Item 2 - Management’s Discussion and Analysis of Results of Operations and Financial Condition
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26 | |
Item 3 – Quantitative and Qualitative Disclosures about Market Risk
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47 | |
Item 4 – Controls and Procedures
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47 | |
Part II - OTHER INFORMATION
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||
Item 1 – Legal Proceedings
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48 | |
Item 1A – Risk Factors
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48 | |
Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds
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48 | |
Item 3 – Defaults by the Company on its Senior Securities
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48 | |
Item 4 – Removed and Reserved
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48 | |
Item 5 – Other Information
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48 | |
Item 6 – Exhibits
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48 | |
SIGNATURE PAGE
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49 | |
EXHIBITS
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March 31
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December 31
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|||||||
2011
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2010
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|||||||
|
||||||||
Assets
|
||||||||
Cash and due from banks
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$ | 12,512 | $ | 11,528 | ||||
Interest-bearing deposits in other banks
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9,468 | 10,578 | ||||||
Total cash and cash equivalents
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21,980 | 22,106 | ||||||
Investment securities available for sale , at fair value
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123,467 | 117,616 | ||||||
Restricted stock
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5,852 | 6,159 | ||||||
Loans
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763,518 | 748,642 | ||||||
Allowance for loan losses
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(9,198 | ) | (8,801 | ) | ||||
Net Loans
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754,320 | 739,841 | ||||||
Premises and equipment, net
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16,392 | 16,592 | ||||||
Bank owned life insurance
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19,756 | 19,591 | ||||||
Goodwill
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9,016 | 9,016 | ||||||
Other intangible assets
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1,894 | 2,004 | ||||||
Other assets
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19,306 | 18,964 | ||||||
Total assets
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$ | 971,983 | $ | 951,889 | ||||
Liabilities
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||||||||
Deposits
|
||||||||
Demand (noninterest-bearing)
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$ | 100,647 | $ | 90,317 | ||||
Savings and interest checking
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455,947 | 441,819 | ||||||
Time
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200,713 | 202,195 | ||||||
Total Deposits
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757,307 | 734,331 | ||||||
Securities sold under agreements to repurchase
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54,366 | 51,164 | ||||||
Long-term debt
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61,712 | 70,885 | ||||||
Other liabilities
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14,258 | 12,870 | ||||||
Total liabilities
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887,643 | 869,250 | ||||||
Shareholders' equity
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||||||||
Common stock $1 par value per share, 15,000,000 shares authorized
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||||||||
with 4,330,848 shares issued and 3,932,924 shares outstanding at
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||||||||
March 31, 2011 and 4,317,058 shares issued and 3,919,108 shares
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||||||||
outstanding at December 31, 2010
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4,331 | 4,317 | ||||||
Capital stock without par value, 5,000 shares authorized
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||||||||
with no shares issued or outstanding
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- | - | ||||||
Additional paid-in capital
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33,354 | 33,096 | ||||||
Retained earnings
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58,775 | 57,984 | ||||||
Accumulated other comprehensive loss
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(5,005 | ) | (5,642 | ) | ||||
Treasury stock, 397,924 shares and 397,950 shares at cost at March 31,
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||||||||
2011 and December 31, 2010, respectively
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(7,115 | ) | (7,116 | ) | ||||
Total shareholders' equity
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84,340 | 82,639 | ||||||
Total liabilities and shareholders' equity
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$ | 971,983 | $ | 951,889 |
For the Three Months Ended
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||||||||
March 31
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||||||||
2011
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2010
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|||||||
Interest income
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||||||||
Loans, including fees
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$ | 9,342 | $ | 9,551 | ||||
Interest and dividends on investments:
|
||||||||
Taxable interest
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583 | 870 | ||||||
Tax exempt interest
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343 | 472 | ||||||
Dividend income
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25 | 16 | ||||||
Deposits and obligations of other banks
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7 | 7 | ||||||
Total interest income
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10,300 | 10,916 | ||||||
Interest expense
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||||||||
Deposits
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1,670 | 2,360 | ||||||
Securities sold under agreements to repurchase
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33 | 38 | ||||||
Short-term borrowings
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1 | - | ||||||
Long-term debt
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701 | 973 | ||||||
Total interest expense
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2,405 | 3,371 | ||||||
Net interest income
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7,895 | 7,545 | ||||||
Provision for loan losses
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900 | 625 | ||||||
Net interest income after provision for loan losses
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6,995 | 6,920 | ||||||
Noninterest income
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||||||||
Investment and trust services fees
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932 | 1,017 | ||||||
Loan service charges
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481 | 197 | ||||||
Mortgage banking activities
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10 | 69 | ||||||
Deposit service charges and fees
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536 | 577 | ||||||
Other service charges and fees
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362 | 326 | ||||||
Increase in cash surrender value of life insurance
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165 | 166 | ||||||
Other
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25 | 49 | ||||||
OTTI losses on securities
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- | (689 | ) | |||||
Loss recognized in other comprehensive income (before taxes)
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- | (434 | ) | |||||
Net OTTI losses recognized in earnings
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- | (255 | ) | |||||
Securities gains, net
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11 | 249 | ||||||
Total noninterest income
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2,522 | 2,395 | ||||||
Noninterest Expense
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||||||||
Salaries and benefits
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3,713 | 3,441 | ||||||
Net occupancy expense
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531 | 526 | ||||||
Furniture and equipment expense
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223 | 192 | ||||||
Advertising
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292 | 301 | ||||||
Legal and professional fees
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271 | 395 | ||||||
Data processing
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381 | 377 | ||||||
Pennsylvania bank shares tax
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165 | 156 | ||||||
Intangible amortization
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111 | 114 | ||||||
FDIC insurance
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311 | 292 | ||||||
Other
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1,024 | 866 | ||||||
Total noninterest expense
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7,022 | 6,660 | ||||||
Income before federal income taxes
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2,495 | 2,655 | ||||||
Federal income tax expense
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646 | 681 | ||||||
Net income
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$ | 1,849 | $ | 1,974 | ||||
Per share
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||||||||
Basic earnings per share
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$ | 0.47 | $ | 0.51 | ||||
Diluted earnings per share
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$ | 0.47 | $ | 0.51 | ||||
Cash dividends declared per share
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$ | 0.27 | $ | 0.27 |
Accumulated
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||||||||||||||||||||||||
Additional
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Other
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|||||||||||||||||||||||
Common
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Paid-in
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Retained
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Comprehensive
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Treasury
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||||||||||||||||||||
(Dollars in thousands, except per share data)
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Stock
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Capital
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Earnings
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Loss
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Stock
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Total
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||||||||||||||||||
Balance at December 31, 2009
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$ | 4,299 | $ | 32,832 | $ | 54,566 | $ | (5,138 | ) | $ | (7,793 | ) | $ | 78,766 | ||||||||||
Comprehensive income:
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||||||||||||||||||||||||
Net income
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- | - | 1,974 | - | - | 1,974 | ||||||||||||||||||
Unrealized gain on securities,
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||||||||||||||||||||||||
net of reclassification adjustments and taxes
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- | - | - | 951 | - | 951 | ||||||||||||||||||
Unrealized loss on hedging activities,
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net of reclassification adjustments and taxes
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- | - | - | (104 | ) | - | (104 | ) | ||||||||||||||||
Pension adjustment, net of tax
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(126 | ) | (126 | ) | ||||||||||||||||||||
Total Comprehensive income
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- | 2,695 | ||||||||||||||||||||||
Cash dividends declared, $.27 per share
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- | - | (1,042 | ) | - | - | (1,042 | ) | ||||||||||||||||
Treasury shares issued to dividend reinvestment plan: 12,885 shares
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- | (26 | ) | - | - | 230 | 204 | |||||||||||||||||
Balance at March 31, 2010
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$ | 4,299 | $ | 32,806 | $ | 55,498 | $ | (4,417 | ) | $ | (7,563 | ) | $ | 80,623 | ||||||||||
Balance at December 31, 2010
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$ | 4,317 | $ | 33,096 | $ | 57,984 | $ | (5,642 | ) | $ | (7,116 | ) | $ | 82,639 | ||||||||||
Comprehensive income:
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||||||||||||||||||||||||
Net income
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- | - | 1,849 | - | - | 1,849 | ||||||||||||||||||
Unrealized gain on securities,
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||||||||||||||||||||||||
net of reclassification adjustments and taxes
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- | - | - | 479 | - | 479 | ||||||||||||||||||
Unrealized gain on hedging activities,
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||||||||||||||||||||||||
net of reclassification adjustments and taxes
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- | - | - | 158 | - | 158 | ||||||||||||||||||
Pension adjustment, net of tax
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- | - | - | - | - | - | ||||||||||||||||||
Total Comprehensive income
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2,486 | |||||||||||||||||||||||
Cash dividends declared, $.27 per share
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- | - | (1,058 | ) | - | - | (1,058 | ) | ||||||||||||||||
Common stock issued under stock option plans, 26 shares
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- | - | - | - | 1 | 1 | ||||||||||||||||||
Common stock issued under dividend reinvestment plan, 13,790 shares
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14 | 258 | - | - | - | 272 | ||||||||||||||||||
Balance at March 31, 2011
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$ | 4,331 | $ | 33,354 | $ | 58,775 | $ | (5,005 | ) | $ | (7,115 | ) | $ | 84,340 |
For the Three Months Ended March 31
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||||||||
2011
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2010
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|||||||
(Amounts in thousands)
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||||||||
Cash flows from operating activities
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||||||||
Net income
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$ | 1,849 | $ | 1,974 | ||||
Adjustments to reconcile net income to net cash provided by operating activities:
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||||||||
Depreciation and amortization
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349 | 336 | ||||||
Net amortization (accretion) of loans and investment securities
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159 | 40 | ||||||
Amortization and net change in mortgage servicing rights valuation
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36 | 9 | ||||||
Amortization of intangibles
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110 | 114 | ||||||
Provision for loan losses
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900 | 625 | ||||||
Net realized gains on sales of securities
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(11 | ) | (249 | ) | ||||
Other-than-temporary-impairment losses on securities
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- | 255 | ||||||
Loans originated for sale
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- | (121 | ) | |||||
Proceeds from sale of loans
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- | 137 | ||||||
Gain on sales of loans
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- | (16 | ) | |||||
Net loss on sale or disposal of other real estate/other repossessed assets
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- | 18 | ||||||
Increase in cash surrender value of life insurance
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(165 | ) | (166 | ) | ||||
Contribution to pension plan
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(102 | ) | (321 | ) | ||||
Increase in interest receivable and other assets
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(51 | ) | (481 | ) | ||||
Increase in interest payable and other liabilities
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1,622 | 1,038 | ||||||
Other, net
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533 | (171 | ) | |||||
Net cash provided by operating activities
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5,229 | 3,021 | ||||||
Cash flows from investing activities
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||||||||
Proceeds from sales and calls of investment securities available for sale
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880 | 4,408 | ||||||
Proceeds from maturities and paydowns of investment securities available for sale
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4,094 | 9,503 | ||||||
Purchase of investment securities available for sale
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(11,223 | ) | (1,853 | ) | ||||
Decrease in restricted stock
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307 | - | ||||||
Net increase in loans
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(15,636 | ) | (10,806 | ) | ||||
Proceeds from sale of other real estate/other repossessed assets
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124 | 391 | ||||||
Capital expenditures
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(121 | ) | (319 | ) | ||||
Net cash (used in) provided by investing activities
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(21,575 | ) | 1,324 | |||||
Cash flows from financing activities
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||||||||
Net increase in demand deposits, NOW accounts and savings accounts
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24,458 | 24,298 | ||||||
Net decrease in time deposits
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(1,482 | ) | (35,983 | ) | ||||
Net increase in short-term borrowings and repurchase agreements
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3,202 | 3,815 | ||||||
Long-term debt payments
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(9,173 | ) | (444 | ) | ||||
Dividends paid
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(1,058 | ) | (1,042 | ) | ||||
Common stock issued to dividend reinvestment plan
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- | 204 | ||||||
Common stock issued under dividend reinvestment plan
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272 | - | ||||||
Common stock issued under stock options plans
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1 | - | ||||||
Net cash provided by (used in) financing activities
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16,220 | (9,152 | ) | |||||
Decrease in cash and cash equivalents
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(126 | ) | (4,807 | ) | ||||
Cash and cash equivalents at beginning of period
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22,106 | 33,248 | ||||||
Cash and cash equivalents at end of period
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$ | 21,980 | $ | 28,441 | ||||
Supplemental Disclosures of Cash Flow Information
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||||||||
Cash paid during the year for:
|
||||||||
Interest on deposits and other borrowed funds
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$ | 2,271 | $ | 3,311 | ||||
Income taxes
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$ | - | $ | 1,002 | ||||
Noncash Activities
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||||||||
Loans transferred to Other Real Estate
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$ | 207 | $ | 413 |
For the Three Months Ended
|
||||||||
March 31
|
||||||||
(In thousands, except per share data)
|
2011
|
2010
|
||||||
Weighted average shares outstanding (basic)
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3,925 | 3,868 | ||||||
Impact of common stock equivalents
|
5 | - | ||||||
Weighted average shares outstanding (diluted)
|
3,931 | 3,868 | ||||||
Anti-dilutive options excluded from the calculation
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70 | 102 | ||||||
Net income
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$ | 1,849 | $ | 1,974 | ||||
Basic earnings per share
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$ | 0.47 | $ | 0.51 | ||||
Diluted earnings per share
|
$ | 0.47 | $ | 0.51 |
For the Three Months Ended
|
||||||||
(Amounts in thousands)
|
March 31
|
|||||||
2011
|
2010
|
|||||||
Net Income
|
$ | 1,849 | $ | 1,974 | ||||
Securities:
|
||||||||
Unrealized gains arising during the period
|
737 | 1,435 | ||||||
Reclassification adjustment for (gains) losses included in net income
|
(11 | ) | 6 | |||||
Net unrealized gains
|
726 | 1,441 | ||||||
Tax effect
|
(247 | ) | (490 | ) | ||||
Net of tax amount
|
479 | 951 | ||||||
Derivatives:
|
||||||||
Unrealized gains (losses) arising during the period
|
66 | (338 | ) | |||||
Reclassification adjustment for losses included in net income
|
175 | 181 | ||||||
Net unrealized gains (losses)
|
241 | (157 | ) | |||||
Tax effect
|
(82 | ) | 53 | |||||
Net of tax amount
|
158 | (104 | ) | |||||
Pension:
|
||||||||
Change in plan assets and benefit obligations
|
- | (191 | ) | |||||
Reclassification adjustment for losses included in net income
|
- | - | ||||||
Net unrealized losses
|
- | (191 | ) | |||||
Tax effect
|
- | 65 | ||||||
Net of tax amount
|
- | (126 | ) | |||||
Total other comprehensive income
|
637 | 721 | ||||||
Total Comprehensive Income
|
$ | 2,486 | $ | 2,695 |
(Amounts in thousands)
|
March 31
|
December 31
|
||||||
2011
|
2010
|
|||||||
Net unrealized losses on securities
|
$ | (300 | ) | $ | (1,026 | ) | ||
Tax effect
|
102 | 349 | ||||||
Net of tax amount
|
(198 | ) | (677 | ) | ||||
Net unrealized losses on derivatives
|
(1,511 | ) | (1,752 | ) | ||||
Tax effect
|
513 | 596 | ||||||
Net of tax amount
|
(998 | ) | (1,156 | ) | ||||
Accumulated pension adjustment
|
(5,771 | ) | (5,771 | ) | ||||
Tax effect
|
1,962 | 1,962 | ||||||
Net of tax amount
|
(3,809 | ) | (3,809 | ) | ||||
Total accumulated other comprehensive loss
|
$ | (5,005 | ) | $ | (5,642 | ) |
(Amounts in thousands)
|
Gross
|
Gross
|
Estimated
|
|||||||||||||
Amortized
|
unrealized
|
unrealized
|
fair
|
|||||||||||||
March 31, 2011
|
cost
|
gains
|
losses
|
value
|
||||||||||||
Equity securities
|
$ | 3,258 | $ | 58 | $ | (454 | ) | $ | 2,862 | |||||||
Obligations of U.S. Government agencies
|
17,562 | 61 | (46 | ) | 17,577 | |||||||||||
Obligations of state and political subdivisions
|
38,908 | 1,203 | (99 | ) | 40,012 | |||||||||||
Corporate debt securities
|
2,615 | 69 | (25 | ) | 2,659 | |||||||||||
Preferred securities
|
5,881 | - | (1,363 | ) | 4,518 | |||||||||||
Mortgage-backed securities
|
||||||||||||||||
Agency
|
51,305 | 863 | (148 | ) | 52,020 | |||||||||||
Non-Agency
|
4,167 | 20 | (419 | ) | 3,768 | |||||||||||
Asset-backed securities
|
71 | - | (20 | ) | 51 | |||||||||||
$ | 123,767 | $ | 2,274 | $ | (2,574 | ) | $ | 123,467 |
|
Gross
|
Gross
|
Estimated
|
|||||||||||||
(Amounts in thousands)
|
Amortized
|
unrealized
|
unrealized
|
fair
|
||||||||||||
December 31, 2010
|
cost
|
gains
|
losses
|
value
|
||||||||||||
Equity securities
|
$ | 4,126 | $ | 50 | $ | (538 | ) | $ | 3,638 | |||||||
Obligations of U.S. Government agencies
|
14,780 | 61 | (56 | ) | 14,785 | |||||||||||
Obligations of state and political subdivisions
|
39,477 | 894 | (419 | ) | 39,952 | |||||||||||
Corporate debt securities
|
2,646 | 64 | (44 | ) | 2,666 | |||||||||||
Preferred securities
|
5,876 | - | (1,680 | ) | 4,196 | |||||||||||
Mortgage-backed securities
|
||||||||||||||||
Agency
|
47,239 | 1,104 | (46 | ) | 48,297 | |||||||||||
Non-Agency
|
4,424 | 20 | (415 | ) | 4,029 | |||||||||||
Asset-backed securities
|
74 | - | (21 | ) | 53 | |||||||||||
$ | 118,642 | $ | 2,193 | $ | (3,219 | ) | $ | 117,616 |
Estimated
|
||||||||
Amortized
|
fair
|
|||||||
(Amounts in thousands)
|
cost
|
value
|
||||||
Due in one year or less
|
$ | 5,378 | $ | 5,411 | ||||
Due after one year through five years
|
14,235 | 14,647 | ||||||
Due after five years through ten years
|
17,491 | 17,997 | ||||||
Due after ten years
|
27,933 | 26,762 | ||||||
65,037 | 64,817 | |||||||
Mortgage-backed securities
|
55,472 | 55,788 | ||||||
|
$ | 120,509 | $ | 120,605 |
March 31, 2011
|
||||||||||||||||||||||||||||||||||||
Less than 12 months
|
12 months or more
|
Total
|
||||||||||||||||||||||||||||||||||
Fair
|
Unrealized
|
Fair
|
Unrealized
|
Fair
|
Unrealized
|
|||||||||||||||||||||||||||||||
(Amounts in thousands)
|
Value
|
Losses
|
Number
|
Value
|
Losses
|
Number
|
Value
|
Losses
|
Number
|
|||||||||||||||||||||||||||
Equity securities
|
$ | 813 | $ | (19 | ) | 2 | $ | 1,334 | $ | (435 | ) | 18 | $ | 2,147 | $ | (454 | ) | 20 | ||||||||||||||||||
Obligations of U.S. Government agencies
|
1,039 | (16 | ) | 3 | 6,326 | (30 | ) | 12 | 7,365 | (46 | ) | 15 | ||||||||||||||||||||||||
Obligations of state and political subdivisions
|
5,637 | (86 | ) | 12 | 293 | (13 | ) | 1 | 5,930 | (99 | ) | 13 | ||||||||||||||||||||||||
Corporate debt securities
|
- | - | - | 1,987 | (25 | ) | 2 | 1,987 | (25 | ) | 2 | |||||||||||||||||||||||||
Preferred Securities
|
- | - | - | 4,517 | (1,363 | ) | 7 | 4,517 | (1,363 | ) | 7 | |||||||||||||||||||||||||
Mortgage-backed securities
|
||||||||||||||||||||||||||||||||||||
Agency
|
16,749 | (148 | ) | 12 | - | - | - | 16,749 | (148 | ) | 12 | |||||||||||||||||||||||||
Non-Agency
|
450 | (1 | ) | 1 | 2,028 | (418 | ) | 4 | 2,478 | (419 | ) | 5 | ||||||||||||||||||||||||
Asset-backed securities
|
- | - | - | 52 | (20 | ) | 3 | 52 | (20 | ) | 3 | |||||||||||||||||||||||||
Total temporarily impaired securities
|
$ | 24,688 | $ | (270 | ) | 30 | $ | 16,537 | $ | (2,304 | ) | 47 | $ | 41,225 | $ | (2,574 | ) | 77 | ||||||||||||||||||
December 31, 2010
|
||||||||||||||||||||||||||||||||||||
Less than 12 months
|
12 months or more
|
Total
|
||||||||||||||||||||||||||||||||||
Fair
|
Unrealized
|
Fair
|
Unrealized
|
Fair
|
Unrealized
|
|||||||||||||||||||||||||||||||
(Amounts in thousands)
|
Value
|
Losses
|
Number
|
Value
|
Losses
|
Number
|
Value
|
Losses
|
Number
|
|||||||||||||||||||||||||||
Equity securities
|
$ | 1 | $ | (1 | ) | 1 | $ | 3,261 | $ | (537 | ) | 20 | $ | 3,262 | $ | (538 | ) | 21 | ||||||||||||||||||
Obligations of U.S. Government agencies
|
3,476 | (17 | ) | 2 | 6,433 | (39 | ) | 14 | 9,909 | (56 | ) | 16 | ||||||||||||||||||||||||
Obligations of state and political subdivisions
|
11,861 | (405 | ) | 24 | 292 | (14 | ) | 1 | 12,153 | (419 | ) | 25 | ||||||||||||||||||||||||
Corporate debt securities
|
- | - | - | 1,968 | (44 | ) | 2 | 1,968 | (44 | ) | 2 | |||||||||||||||||||||||||
Preferred Securities
|
- | - | - | 4,196 | (1,680 | ) | 7 | 4,196 | (1,680 | ) | 7 | |||||||||||||||||||||||||
Mortgage-backed securities
|
||||||||||||||||||||||||||||||||||||
Agency
|
9,859 | (46 | ) | 6 | - | - | - | 9,859 | (46 | ) | 6 | |||||||||||||||||||||||||
Non-Agency
|
- | - | - | 2,676 | (415 | ) | 5 | 2,676 | (415 | ) | 5 | |||||||||||||||||||||||||
Asset-backed securities
|
- | - | - | 53 | (21 | ) | 3 | 53 | (21 | ) | 3 | |||||||||||||||||||||||||
Total temporarily impaired securities
|
$ | 25,197 | $ | (469 | ) | 33 | $ | 18,879 | $ | (2,750 | ) | 52 | $ | 44,076 | $ | (3,219 | ) | 85 |
Trust Preferred Securities
|
||||||||||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||||
Deal Name
|
Single
Issuer or
Pooled
|
Class
|
Amortized
Cost
|
Estimated
Fair Value
|
Gross
Unrealized
Gain (Loss)
|
Lowest
Credit
Rating
Assigned
|
Number of
Banks
Currently
Performing
|
Deferrals
and Defaults
as % of
Original
Collateral
|
Expected Deferral/
Defaults as a
Percentage of
Remaining Performing
Collateral
|
|||||||||||||||||
Huntington Cap Trust
|
Single
|
Preferred Stock
|
$ | 928 | $ | 593 | $ | (335 | ) | B | 1 |
None
|
None
|
|||||||||||||
Huntington Cap Trust II
|
Single
|
Preferred Stock
|
873 | 561 | (312 | ) | B | 1 |
None
|
None
|
||||||||||||||||
BankAmerica Cap III
|
Single
|
Preferred Stock
|
956 | 760 | (196 | ) |
BB
|
1 |
None
|
None
|
||||||||||||||||
Wachovia Cap Trust II
|
Single
|
Preferred Stock
|
273 | 235 | (38 | ) |
Baa2
|
1 |
None
|
None
|
||||||||||||||||
Corestates Captl Tr II
|
Single
|
Preferred Stock
|
924 | 781 | (143 | ) |
Baa1
|
1 |
None
|
None
|
||||||||||||||||
Chase Cap VI JPM
|
Single
|
Preferred Stock
|
956 | 828 | (128 | ) |
BBB
|
1 |
None
|
None
|
||||||||||||||||
Fleet Cap Tr V
|
Single
|
Preferred Stock
|
971 | 761 | (210 | ) |
BB
|
1 |
None
|
None
|
||||||||||||||||
$ | 5,881 | $ | 4,519 | $ | (1,362 | ) |
Private Label Mortgage Backed Securities
|
||||||||||||||||||||||||||
(Dollars in thousands)
|
Gross
|
Cummulative
|
||||||||||||||||||||||||
Orgination
|
Amortized
|
Fair
|
Unrealized
|
Collateral
|
Lowest Credit
|
Credit
|
OTTI
|
|||||||||||||||||||
Decscription
|
Date
|
Cost
|
Value
|
Gain (Loss)
|
Type
|
Rating Assigned
|
Support %
|
Charges
|
||||||||||||||||||
RALI 2003-QS15 A1
|
8/1/2003
|
$ | 451 | $ | 450 | $ | (1 | ) |
ALT A
|
Aa2
|
11.60 | $ | - | |||||||||||||
RALI 2004-QS4 A7
|
3/1/2004
|
564 | 566 | 2 |
ALT A
|
AAA
|
12.81 | - | ||||||||||||||||||
MALT 2004-6 7A1
|
6/1/2004
|
706 | 724 | 18 |
ALT A
|
BBB
|
10.70 | - | ||||||||||||||||||
RALI 2005-QS2 A1
|
2/1/2005
|
630 | 574 | (56 | ) |
ALT A
|
B | 7.64 | - | |||||||||||||||||
RALI 2006-QS4 A2
|
4/1/2006
|
912 | 686 | (226 | ) |
ALT A
|
D | - | 202 | |||||||||||||||||
GSR 2006-5F 2A1
|
5/1/2006
|
397 | 361 | (36 | ) |
Prime
|
CCC
|
4.14 | - | |||||||||||||||||
RALI 2006-QS8 A1
|
7/28/2006
|
507 | 407 | (100 | ) |
ALT A
|
D | - | 133 | |||||||||||||||||
$ | 4,167 | $ | 3,768 | $ | (399 | ) | $ | 335 |
Change
|
||||||||||||||||
(Amounts in thousands)
|
March 31, 2011
|
December 31, 2010
|
Amount
|
%
|
||||||||||||
Residential Real Estate 1-4 Family
|
||||||||||||||||
First liens
|
$ | 144,174 | $ | 144,128 | $ | 46 | - | |||||||||
Junior liens and lines of credit
|
54,323 | 56,694 | (2,371 | ) | (4.2 | ) | ||||||||||
Total
|
198,497 | 200,822 | (2,325 | ) | (1.2 | ) | ||||||||||
Residential real estate - construction
|
81,184 | 79,557 | 1,627 | 2.0 | ||||||||||||
Commercial, industrial and agricultural real estate
|
303,153 | 304,195 | (1,042 | ) | (0.3 | ) | ||||||||||
Commercial, industrial and agricultural
|
164,712 | 146,672 | 18,040 | 12.3 | ||||||||||||
Consumer
|
15,972 | 17,396 | (1,424 | ) | (8.2 | ) | ||||||||||
763,518 | 748,642 | 14,876 | 2.0 | |||||||||||||
Less: Allowance for loan losses
|
(9,198 | ) | (8,801 | ) | (397 | ) | 4.5 | |||||||||
Net Loans
|
$ | 754,320 | $ | 739,841 | $ | 14,479 | 2.0 | |||||||||
Included in the loan balances are the following:
|
||||||||||||||||
Net unamortized deferred loan costs
|
$ | 566 | $ | 567 | ||||||||||||
Unamortized discount on purchased loans
|
$ | (208 | ) | $ | (220 | ) | ||||||||||
Loans pledged as collateral for borrowings and commitments from:
|
||||||||||||||||
FHLB
|
$ | 702,866 | $ | 648,272 | ||||||||||||
Federal Reserve Bank
|
49,343 | 53,682 | ||||||||||||||
$ | 752,209 | $ | 701,954 |
|
|
Commercial
|
||||||||||||||||||||||||||
Residential Real Estate 1-4 Family
|
Industrial &
|
Commercial
|
||||||||||||||||||||||||||
|
Junior Liens &
|
|
Agricultural
|
Industrial &
|
||||||||||||||||||||||||
(Dollars in thousands)
|
First Liens
|
Lines of Credit
|
Construction
|
Real Estate
|
Agricultural
|
Consumer
|
Total
|
|||||||||||||||||||||
ALL at December 31, 2010
|
$ | 600 | $ | 352 | $ | 2,596 | $ | 3,358 | $ | 1,578 | $ | 317 | $ | 8,801 | ||||||||||||||
Charge-offs
|
(107 | ) | (5 | ) | (400 | ) | (161 | ) | - | (64 | ) | (737 | ) | |||||||||||||||
Recoveries
|
11 | - | - | 193 | - | 30 | 234 | |||||||||||||||||||||
Provision
|
108 | (55 | ) | 146 | 826 | (131 | ) | 6 | 900 | |||||||||||||||||||
ALL at March 31, 2011
|
$ | 612 | $ | 292 | $ | 2,342 | $ | 4,216 | $ | 1,447 | $ | 289 | $ | 9,198 | ||||||||||||||
ALL at December 31, 2009
|
$ | 550 | $ | 278 | $ | 3,087 | $ | 4,175 | $ | 752 | $ | 95 | $ | 8,937 | ||||||||||||||
Charge-offs
|
(107 | ) | (165 | ) | (982 | ) | (1,736 | ) | (232 | ) | (452 | ) | (3,674 | ) | ||||||||||||||
Recoveries
|
19 | 10 | 53 | 18 | 61 | 142 | 303 | |||||||||||||||||||||
Provision
|
138 | 229 | 438 | 901 | 997 | 532 | 3,235 | |||||||||||||||||||||
ALL at December 31, 2010
|
$ | 600 | $ | 352 | $ | 2,596 | $ | 3,358 | $ | 1,578 | $ | 317 | $ | 8,801 |
|
|
Commercial
|
||||||||||||||||||||||||||
Residential Real Estate 1-4 Family
|
Industrial &
|
Commercial
|
||||||||||||||||||||||||||
|
Junior Liens &
|
|
Agricultural
|
Industrial &
|
||||||||||||||||||||||||
(Dollars in thousands)
|
First Liens
|
Lines of Credit
|
Construction
|
Real Estate
|
Agricultural
|
Consumer
|
Total
|
|||||||||||||||||||||
March 31, 2011
|
||||||||||||||||||||||||||||
Loans evaluated for allowance:
|
||||||||||||||||||||||||||||
Individually
|
$ | 1,016 | $ | 308 | $ | 9,283 | $ | 18,155 | $ | 2,291 | $ | 3 | $ | 31,056 | ||||||||||||||
Collectively
|
143,158 | 54,015 | 71,901 | 284,998 | 162,421 | 15,969 | 732,462 | |||||||||||||||||||||
Total
|
$ | 144,174 | $ | 54,323 | $ | 81,184 | $ | 303,153 | $ | 164,712 | $ | 15,972 | $ | 763,518 | ||||||||||||||
ALL established for loans evaluated:
|
||||||||||||||||||||||||||||
Individually
|
$ | 171 | $ | - | $ | 1,284 | $ | 3,006 | $ | 693 | $ | - | $ | 5,154 | ||||||||||||||
Collectively
|
441 | 292 | 1,058 | 1,210 | 754 | 289 | 4,044 | |||||||||||||||||||||
ALL at March 31, 2011
|
$ | 612 | $ | 292 | $ | 2,342 | $ | 4,216 | $ | 1,447 | $ | 289 | $ | 9,198 | ||||||||||||||
December 31, 2010
|
||||||||||||||||||||||||||||
Loans evaluated for allowance:
|
||||||||||||||||||||||||||||
Individually
|
$ | 965 | $ | 408 | $ | 7,988 | $ | 21,425 | $ | 2,398 | $ | 3 | $ | 33,187 | ||||||||||||||
Collectively
|
143,163 | 56,286 | 71,569 | 282,770 | 144,274 | 17,393 | 715,455 | |||||||||||||||||||||
Total
|
$ | 144,128 | $ | 56,694 | $ | 79,557 | $ | 304,195 | $ | 146,672 | $ | 17,396 | $ | 748,642 | ||||||||||||||
ALL established for loans evaluated:
|
||||||||||||||||||||||||||||
Individually
|
$ | 179 | $ | 4 | $ | 1,566 | $ | 2,170 | $ | 854 | $ | 3 | $ | 4,776 | ||||||||||||||
Collectively
|
421 | 348 | 1,030 | 1,188 | 724 | 314 | 4,025 | |||||||||||||||||||||
ALL at December 31, 2010
|
$ | 600 | $ | 352 | $ | 2,596 | $ | 3,358 | $ | 1,578 | $ | 317 | $ | 8,801 |
Unpaid
|
Average
|
Interest
|
||||||||||||||||||
Recorded
|
Principal
|
Related
|
Recorded
|
Income
|
||||||||||||||||
(Dollars in thousands)
|
Investment
|
Balance
|
Allowance
|
Investment
|
Recognized
|
|||||||||||||||
March 31, 2011
|
||||||||||||||||||||
Impaired loans with no specific allowance
|
||||||||||||||||||||
Residential Real Estate 1-4 Family
|
||||||||||||||||||||
First liens
|
$ | 615 | $ | 615 | $ | - | $ | 622 | $ | 10 | ||||||||||
Junior liens and lines of credit
|
270 | 270 | - | 263 | - | |||||||||||||||
Total
|
885 | 885 | - | 885 | 10 | |||||||||||||||
Residential real estate - construction
|
3,958 | 3,958 | - | 3,958 | - | |||||||||||||||
Commercial, industrial and agricultural real estate
|
388 | 388 | - | 436 | 2 | |||||||||||||||
Commercial, industrial and agricultural
|
49 | 49 | - | 51 | 4 | |||||||||||||||
Consumer
|
3 | 3 | - | 3 | - | |||||||||||||||
Total
|
$ | 5,283 | $ | 5,283 | $ | - | $ | 5,333 | $ | 16 | ||||||||||
Impaired loans with specific allowance
|
||||||||||||||||||||
Residential Real Estate 1-4 Family
|
||||||||||||||||||||
First liens
|
$ | 401 | $ | 401 | $ | 171 | $ | 399 | $ | - | ||||||||||
Junior liens and lines of credit
|
38 | 38 | - | 38 | 1 | |||||||||||||||
Total
|
439 | 439 | 171 | 437 | 1 | |||||||||||||||
Residential real estate - construction
|
5,325 | 5,325 | 1,284 | 5,530 | 36 | |||||||||||||||
Commercial, industrial and agricultural real estate
|
17,767 | 18,000 | 3,006 | 18,044 | 115 | |||||||||||||||
Commercial, industrial and agricultural
|
2,242 | 2,285 | 693 | 2,285 | 7 | |||||||||||||||
Consumer
|
- | - | - | - | - | |||||||||||||||
Total
|
$ | 25,773 | $ | 26,049 | $ | 5,154 | $ | 26,296 | $ | 159 |
Unpaid
|
Average
|
Interest
|
||||||||||||||||||
Recorded
|
Principal
|
Related
|
Recorded
|
Income
|
||||||||||||||||
(Dollars in thousands)
|
Investment
|
Balance
|
Allowance
|
Investment
|
Recognized
|
|||||||||||||||
December 31, 2010
|
||||||||||||||||||||
Impaired loans with no specific allowance
|
||||||||||||||||||||
Residential Real Estate 1-4 Family
|
||||||||||||||||||||
First liens
|
$ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
Junior liens and lines of credit
|
122 | 122 | - | 122 | - | |||||||||||||||
Total
|
122 | 122 | - | 122 | - | |||||||||||||||
Residential real estate - construction
|
3,958 | 3,958 | - | 3,412 | - | |||||||||||||||
Commercial, industrial and agricultural real estate
|
7,307 | 7,378 | - | 7,939 | 248 | |||||||||||||||
Commercial, industrial and agricultural
|
51 | 52 | - | 52 | - | |||||||||||||||
Consumer
|
- | - | - | - | - | |||||||||||||||
Total
|
$ | 11,438 | $ | 11,510 | $ | - | $ | 11,525 | $ | 248 | ||||||||||
Impaired loans with specific allowance
|
||||||||||||||||||||
Residential Real Estate 1-4 Family
|
||||||||||||||||||||
First liens
|
$ | 965 | $ | 971 | $ | 179 | $ | 991 | $ | 41 | ||||||||||
Junior liens and lines of credit
|
286 | 286 | 4 | 301 | 2 | |||||||||||||||
Total
|
1,251 | 1,257 | 183 | 1,292 | 43 | |||||||||||||||
Residential real estate - construction
|
4,030 | 4,030 | 1,566 | 4,477 | 37 | |||||||||||||||
Commercial, industrial and agricultural real estate
|
14,118 | 14,312 | 2,170 | 14,279 | 483 | |||||||||||||||
Commercial, industrial and agricultural
|
2,347 | 2,386 | 854 | 2,444 | 95 | |||||||||||||||
Consumer
|
3 | 3 | 3 | 4 | - | |||||||||||||||
Total
|
$ | 21,749 | $ | 21,988 | $ | 4,776 | $ | 22,496 | $ | 658 |
March 31, 2011
|
December 31, 2010
|
|||||||||||||||
% of Loan
|
% of Loan
|
|||||||||||||||
(Dollars in thousands)
|
Balance
|
Segment
|
Balance
|
Segment
|
||||||||||||
Nonaccrual loans
|
||||||||||||||||
Residential Real Estate 1-4 Family
|
||||||||||||||||
First liens
|
$ | 987 | 0.68 | % | $ | 691 | 0.48 | % | ||||||||
Junior liens and lines of credit
|
34 | 0.06 | % | 122 | 0.22 | % | ||||||||||
Total
|
1,021 | 0.51 | % | 813 | 0.40 | % | ||||||||||
Residential real estate - construction
|
7,579 | 9.34 | % | 6,500 | 8.17 | % | ||||||||||
Commercial, industrial and agricultural real estate
|
10,482 | 3.46 | % | 13,003 | 4.27 | % | ||||||||||
Commercial, industrial and agricultural
|
1,609 | 0.98 | % | 1,668 | 1.14 | % | ||||||||||
Consumer
|
- | - | - | - | ||||||||||||
Total nonaccrual loans
|
$ | 20,691 | $ | 21,984 | ||||||||||||
Loans past due 90 days or more and not included above
|
||||||||||||||||
Residential Real Estate 1-4 Family
|
||||||||||||||||
First liens
|
$ | 583 | $ | 1,093 | ||||||||||||
Junior liens and lines of credit
|
765 | 833 | ||||||||||||||
Total
|
1,348 | 1,926 | ||||||||||||||
Residential real estate - construction
|
136 | 911 | ||||||||||||||
Commercial, industrial and agricultural real estate
|
4,086 | 2,343 | ||||||||||||||
Commercial, industrial and agricultural
|
170 | 244 | ||||||||||||||
Consumer
|
23 | 125 | ||||||||||||||
Total loans past due 90 days or more and still accruing
|
5,763 | 5,549 | ||||||||||||||
Total nonperforming loans
|
26,454 | 27,533 | ||||||||||||||
Foreclosed real estate
|
635 | 618 | ||||||||||||||
Total nonperforming assets
|
$ | 27,089 | $ | 28,151 | ||||||||||||
Restructured Loans (TDRs)
|
||||||||||||||||
Performing
|
$ | - | $ | 656 | ||||||||||||
Non-performing (included above)
|
637 | - | ||||||||||||||
Total TDRs
|
$ | 637 | $ | 656 | ||||||||||||
Nonaccrual loans to total gross loans
|
2.71 | % | 2.94 | % | ||||||||||||
Nonperforming loans to total gross loans
|
3.46 | % | 3.68 | % | ||||||||||||
Nonperforming assets to total assets
|
2.79 | % | 2.96 | % | ||||||||||||
Allowance for loan losses to nonperforming loans
|
34.77 | % | 31.97 | % |
Loans Past Due
|
Total
|
|||||||||||||||||||||||||||
Current
|
30-59 Days
|
60-89 Days
|
90 Days+
|
Total
|
Non-Accrual
|
Loans
|
||||||||||||||||||||||
March 31, 2011
|
||||||||||||||||||||||||||||
Residential Real Estate 1-4 Family
|
||||||||||||||||||||||||||||
First liens
|
$ | 140,668 | $ | 1,026 | $ | 910 | $ | 583 | $ | 2,519 | $ | 987 | $ | 144,174 | ||||||||||||||
Junior liens and lines of credit
|
52,888 | 518 | 118 | 765 | 1,401 | 34 | 54,323 | |||||||||||||||||||||
Total
|
193,556 | 1,544 | 1,028 | 1,348 | 3,920 | 1,021 | 198,497 | |||||||||||||||||||||
Residential real estate - construction
|
70,238 | 631 | 2,600 | 136 | 3,367 | 7,579 | 81,184 | |||||||||||||||||||||
Commercial, industrial and agricultural real estate
|
281,185 | 7,113 | 287 | 4,086 | 11,486 | 10,482 | 303,153 | |||||||||||||||||||||
Commercial, industrial and agricultural
|
160,700 | 680 | 1,553 | 170 | 2,403 | 1,609 | 164,712 | |||||||||||||||||||||
Consumer
|
15,667 | 259 | 23 | 23 | 305 | - | 15,972 | |||||||||||||||||||||
Total
|
$ | 721,346 | $ | 10,227 | $ | 5,491 | $ | 5,763 | $ | 21,481 | $ | 20,691 | $ | 763,518 | ||||||||||||||
December 31, 2010
|
||||||||||||||||||||||||||||
Residential Real Estate 1-4 Family
|
||||||||||||||||||||||||||||
First liens
|
$ | 140,711 | $ | 979 | $ | 654 | $ | 1,093 | $ | 2,726 | $ | 691 | $ | 144,128 | ||||||||||||||
Junior liens and lines of credit
|
55,723 | 16 | - | 833 | 849 | 122 | 56,694 | |||||||||||||||||||||
Total
|
196,434 | 995 | 654 | 1,926 | 3,575 | 813 | 200,822 | |||||||||||||||||||||
Residential real estate - construction
|
72,146 | - | - | 911 | 911 | 6,500 | 79,557 | |||||||||||||||||||||
Commercial, industrial and agricultural real estate
|
285,050 | 3,786 | 13 | 2,343 | 6,142 | 13,003 | 304,195 | |||||||||||||||||||||
Commercial, industrial and agricultural
|
142,829 | 1,786 | 145 | 244 | 2,175 | 1,668 | 146,672 | |||||||||||||||||||||
Consumer
|
17,077 | 164 | 30 | 125 | 319 | - | 17,396 | |||||||||||||||||||||
Total
|
$ | 713,536 | $ | 6,731 | $ | 842 | $ | 5,549 | $ | 13,122 | $ | 21,984 | $ | 748,642 |
Special
|
||||||||||||||||||||
Pass
|
Mention
|
Substandard
|
Doubtful
|
Total
|
||||||||||||||||
March 31, 2011
|
||||||||||||||||||||
Residential Real Estate 1-4 Family
|
||||||||||||||||||||
First liens
|
$ | 44,021 | $ | 2,754 | $ | 2,460 | $ | - | $ | 49,235 | ||||||||||
Junior liens and lines of credit
|
9,816 | 245 | 429 | - | 10,490 | |||||||||||||||
Total
|
53,837 | 2,999 | 2,889 | - | 59,725 | |||||||||||||||
Residential real estate - construction
|
64,199 | 6,916 | 8,736 | - | 79,851 | |||||||||||||||
Commercial, industrial and agricultural real estate
|
269,574 | 15,509 | 17,790 | - | 302,873 | |||||||||||||||
Commercial, industrial and agricultural
|
150,388 | 6,473 | 7,122 | - | 163,983 | |||||||||||||||
Total
|
$ | 537,998 | $ | 31,897 | $ | 36,537 | $ | - | $ | 606,432 | ||||||||||
December 31, 2010
|
||||||||||||||||||||
Residential Real Estate 1-4 Family
|
||||||||||||||||||||
First liens
|
$ | 40,051 | $ | 1,821 | $ | 3,299 | $ | - | $ | 45,171 | ||||||||||
Junior liens and lines of credit
|
10,565 | 68 | 391 | - | 11,024 | |||||||||||||||
Total
|
50,616 | 1,889 | 3,690 | - | 56,195 | |||||||||||||||
Residential real estate - construction
|
59,097 | 6,671 | 11,892 | - | 77,660 | |||||||||||||||
Commercial, industrial and agricultural real estate
|
273,279 | 8,481 | 22,435 | - | 304,195 | |||||||||||||||
Commercial, industrial and agricultural
|
132,981 | 6,383 | 7,308 | - | 146,672 | |||||||||||||||
Total
|
$ | 515,973 | $ | 23,424 | $ | 45,325 | $ | - | $ | 584,722 |
March 31, 2011
|
||||||||||||||||||||
Consumer
|
Residential Real Estate
|
|||||||||||||||||||
Lines of Credit
|
Installment
|
Home Equity Lines
|
Mortgages
|
Total
|
||||||||||||||||
Performing
|
$ | 3,259 | $ | 12,690 | $ | 17,763 | $ | 121,882 | $ | 155,594 | ||||||||||
Non-performing
|
1 | 22 | 8 | 1,461 | 1,492 | |||||||||||||||
Total
|
$ | 3,260 | $ | 12,712 | $ | 17,771 | $ | 123,343 | $ | 157,086 | ||||||||||
December 31, 2010
|
||||||||||||||||||||
Consumer
|
Residential Real Estate
|
|||||||||||||||||||
Lines of Credit
|
Installment
|
Home Equity Lines
|
Mortgages
|
Total
|
||||||||||||||||
Performing
|
$ | 3,231 | $ | 14,040 | $ | 17,939 | $ | 127,236 | $ | 162,446 | ||||||||||
Non-performing
|
11 | 114 | 99 | 1,250 | 1,474 | |||||||||||||||
Total
|
$ | 3,242 | $ | 14,154 | $ | 18,038 | $ | 128,486 | $ | 163,920 |
New Troubled Debt
|
Troubled Debt Restructings
|
|||||||||||||||||||||||
Restructings in
|
that Subsequently Defaulted
|
|||||||||||||||||||||||
Troubled Debt Restructings
|
YTD Period
|
during YTD Period
|
||||||||||||||||||||||
Number of
|
Recorded
|
Number of
|
Recorded
|
Number of
|
Recorded
|
|||||||||||||||||||
Contracts
|
Investment
|
Contracts
|
Investment
|
Contracts
|
Investment
|
|||||||||||||||||||
March 31, 2011
|
||||||||||||||||||||||||
Commercial, industrial and agricultural
|
1 | $ | 637 | - | $ | - | 1 | $ | 637 | |||||||||||||||
Total
|
1 | $ | 637 | - | $ | - | - | $ | 637 | |||||||||||||||
December 31, 2010
|
||||||||||||||||||||||||
Commercial, industrial and agricultural
|
1 | $ | 656 | - | $ | - | - | $ | - | |||||||||||||||
Total
|
1 | $ | 656 | - | $ | - | - | $ | - |
Three Months Ended
|
||||||||
March 31
|
||||||||
(Amounts in thousands)
|
2011
|
2010
|
||||||
Components of net periodic cost:
|
||||||||
Service cost
|
$ | 103 | $ | 91 | ||||
Interest cost
|
182 | 185 | ||||||
Expected return on plan assets
|
(188 | ) | (209 | ) | ||||
Recognized net actuarial loss
|
89 | 43 | ||||||
Net periodic cost
|
$ | 186 | $ | 110 |
Three Months Ended
|
||||||||
March 31
|
||||||||
(Amounts in thousands)
|
2011
|
2010
|
||||||
Cost of mortgage servicing rights:
|
||||||||
Beginning balance
|
$ | 933 | $ | 1,190 | ||||
Originations
|
- | 6 | ||||||
Amortization
|
(48 | ) | (69 | ) | ||||
Ending balance
|
$ | 885 | $ | 1,127 | ||||
Valuation allowance:
|
||||||||
Beginning balance
|
$ | (330 | ) | $ | (477 | ) | ||
Valuation charges
|
- | - | ||||||
Valuation reversals
|
12 | 60 | ||||||
Ending balance
|
$ | (318 | ) | $ | (417 | ) | ||
Mortgage servicing rights cost
|
$ | 885 | $ | 1,127 | ||||
Valuation allowance
|
(318 | ) | (417 | ) | ||||
Carrying value
|
$ | 567 | $ | 710 | ||||
Fair value
|
$ | 567 | $ | 710 |
The estimated fair value of the Corporation's financial instruments are as follows:
|
||||||||||||||||
March 31, 2011
|
December 31, 2010
|
|||||||||||||||
Carrying
|
Fair
|
Carrying
|
Fair
|
|||||||||||||
(Amounts in thousands)
|
Amount
|
Value
|
Amount
|
Value
|
||||||||||||
Financial assets:
|
||||||||||||||||
Cash and cash equivalents
|
$ | 21,980 | $ | 21,980 | $ | 22,106 | $ | 22,106 | ||||||||
Investment securities available for sale
|
123,467 | 123,467 | 117,616 | 117,616 | ||||||||||||
Restricted stock
|
5,852 | 5,852 | 6,159 | 6,159 | ||||||||||||
Net loans
|
754,320 | 753,693 | 739,841 | 750,944 | ||||||||||||
Accrued interest receivable
|
3,630 | 3,630 | 3,662 | 3,662 | ||||||||||||
Mortgage servicing rights
|
567 | 567 | 603 | 603 | ||||||||||||
Financial liabilities:
|
||||||||||||||||
Deposits
|
$ | 757,307 | $ | 759,917 | $ | 734,331 | $ | 737,274 | ||||||||
Securities sold under agreements to repurchase
|
54,366 | 54,366 | 51,164 | 51,164 | ||||||||||||
Long-term debt
|
61,712 | 64,699 | 70,885 | 74,695 | ||||||||||||
Accrued interest payable
|
892 | 892 | 757 | 757 | ||||||||||||
Interest rate swaps
|
1,511 | 1,511 | 1,752 | 1,752 |
Level 1:
|
Valuation is based on unadjusted, quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
|
|
Level 2:
|
Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.
|
|
Level 3:
|
Valuation is generated from model-based techniques that use significant assumptions not observable in the market. These unobservable assumptions reflect the Corporation’s assumptions regarding what market participants would assume when pricing a financial instrument.
|
(Dollars in Thousands)
|
Fair Value at March 31, 2011
|
|||||||||||||||
Asset Description
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Equity securities
|
$ | 2,862 | $ | - | $ | - | $ | 2,862 | ||||||||
Obligations of U.S. Government agencies
|
- | 17,577 | - | 17,577 | ||||||||||||
Obligations of state and political subdivisions
|
- | 40,012 | - | 40,012 | ||||||||||||
Corporate debt securities
|
- | 2,659 | - | 2,659 | ||||||||||||
Preferred Securities
|
1 | 4,518 | - | 4,518 | ||||||||||||
Mortgage-backed securities
|
||||||||||||||||
Agency
|
- | 52,020 | - | 52,020 | ||||||||||||
Non-Agency
|
- | 3,768 | - | 3,768 | ||||||||||||
Asset-backed securities
|
- | 51 | - | 51 | ||||||||||||
Total assets
|
$ | 2,863 | $ | 120,605 | $ | - | $ | 123,467 | ||||||||
Liability Description
|
||||||||||||||||
Interest rate swaps
|
$ | - | $ | 1,511 | $ | - | $ | 1,511 | ||||||||
Total liabilities
|
$ | - | $ | 1,511 | $ | - | $ | 1,511 | ||||||||
(Dollars in Thousands)
|
Fair Value at December 31, 2010
|
|||||||||||||||
Asset Description
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Equity securities
|
$ | 3,638 | $ | - | $ | - | $ | 3,638 | ||||||||
Obligations of U.S. Government agencies
|
- | 14,785 | - | 14,785 | ||||||||||||
Obligations of state and political subdivisions
|
- | 39,952 | - | 39,952 | ||||||||||||
Corporate debt securities
|
- | 2,666 | - | 2,666 | ||||||||||||
Preferred Securities
|
- | 4,196 | - | 4,196 | ||||||||||||
Mortgage-backed securities
|
||||||||||||||||
Agency
|
- | 48,297 | - | 48,297 | ||||||||||||
Non-Agency
|
- | 4,029 | - | 4,029 | ||||||||||||
Asset-backed securities
|
- | 53 | - | 53 | ||||||||||||
Total assets
|
$ | 3,638 | $ | 113,978 | $ | - | $ | 117,616 | ||||||||
Liability Description
|
||||||||||||||||
Interest rate swaps
|
$ | - | $ | 1,752 | $ | - | $ | 1,752 | ||||||||
Total liabilities
|
$ | - | $ | 1,752 | $ | - | $ | 1,752 |
(Dollars in Thousands)
|
||||||||||||||||
Fair Value at March 31, 2011
|
||||||||||||||||
Asset Description
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Impaired loans
|
$ | - | $ | - | $ | 20,619 | $ | 20,619 | ||||||||
Other real estate owned
|
- | - | 635 | 635 | ||||||||||||
Mortgage servicing rights
|
- | - | 567 | 567 | ||||||||||||
Total assets
|
$ | - | $ | - | $ | 21,821 | $ | 21,821 | ||||||||
(Dollars in Thousands)
|
Fair Value at December 31, 2010
|
|||||||||||||||
Asset Description
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Impaired loans
|
$ | - | $ | - | $ | 16,973 | $ | 16,973 | ||||||||
Other real estate owned
|
- | - | 618 | 618 | ||||||||||||
Mortgage servicing rights
|
- | - | 603 | 603 | ||||||||||||
Total assets
|
$ | - | $ | - | $ | 18,194 | $ | 18,194 |
(Dollars in thousands)
|
Amount Expected to
|
||||||||||||||
be Expensed into
|
|||||||||||||||
Notional
|
Maturity
|
Interest Rate
|
Earnings within the
|
||||||||||||
Amount
|
Date
|
Fixed
|
Variable
|
next 12 Months
|
|||||||||||
$ | 10,000 |
5/30/2013
|
3.60 | % | 0.10 | % | $ | 350 | |||||||
$ | 10,000 |
5/30/2015
|
3.87 | % | 0.10 | % | $ | 377 |
Fair Value of Derivative Instruments
|
||||||||
(Dollars in thousands)
|
Balance Sheet
|
|||||||
Date
|
Type
|
Location
|
Fair Value
|
|||||
March 31, 2011
|
Interest rate contracts
|
Other liabilities
|
$ | 1,511 | ||||
December 31, 2010
|
Interest rate contracts
|
Other liabilities
|
$ | 1,752 |
Derivatives in ASC Topic 815 Cash Flow Hedging Relationships
|
||||||||||||||
(Dollars in thousands)
|
Amount of Gain
|
|||||||||||||
Location of
|
or (Loss)
|
|||||||||||||
Gain or (Loss)
|
Recognized in
|
|||||||||||||
Recognized in
|
Income on
|
|||||||||||||
Location of
|
Amount of Gain
|
Income on
|
Derivatives
|
|||||||||||
Amount of Gain
|
Gain or (Loss)
|
or (Loss)
|
Derivative (Ineffective
|
(Ineffective Portion
|
||||||||||
or (Loss)
|
Reclassified from
|
Reclassified from
|
Portion and Amount
|
and Amount
|
||||||||||
Recognized in OCI
|
Accumulated OCI
|
Accumulated OCI
|
Excluded from
|
Excluded from
|
||||||||||
net of tax on Derivative
|
into Income
|
into Income
|
Effectiveness
|
Effectiveness
|
||||||||||
Date / Type
|
(Effective Portion)
|
(Effective Portion)
|
(Effective Portion)
|
Testing)
|
Testing)
|
|||||||||
March 31, 2011
|
||||||||||||||
Interest rate contracts
|
$ | 158 |
Interest Expense
|
$ | (175 | ) |
Other income (expense)
|
$ | - | |||||
March 31, 2010
|
||||||||||||||
Interest rate contracts
|
$ | (104 | ) |
Interest Expense
|
$ | (181 | ) |
Other income (expense)
|
$ | - |
2011
|
2010
|
|||||||
Return on average equity (ROE)
|
8.98 | % | 10.00 | % | ||||
Return on average assets (ROA)
|
.78 | % | .82 | % | ||||
Return on average tangible average equity(1)
|
10.74 | % | 12.02 | % | ||||
Return on average tangible average assets(1)
|
.81 | % | .85 | % | ||||
Net interest margin
|
3.71 | % | 3.46 | % | ||||
Efficiency ratio
|
66.55 | % | 65.17 | % |
GAAP Measurement
|
Calculation
|
|
Return on Average Assets
|
Net Income / Average Assets
|
|
Return on Average Equity
|
Net Income / Average Equity
|
|
Non- GAAP Measurement
|
Calculation
|
|
Return on Average Tangible Assets
|
Net Income plus Intangible Amortization /
|
|
Average Assets less Average Intangible Assets
|
||
Return on Average Tangible Equity
|
Net Income plus Intangible Amortization /
|
|
Average Equity less Average Intangible Assets
|
||
Efficiency Ratio
|
Noninterest Expense / Tax Equivalent Net Interest Income
|
|
|
plus Noninterest Income (excluding Security Gains/Losses and Other Than Temporary Impairment)
|
For the Three Months Ended March 31
|
||||||||||||||||||||||||
2011 | 2010 | |||||||||||||||||||||||
Tax
|
Tax
|
|||||||||||||||||||||||
Average
|
Equivalent
|
Average
|
Average
|
Equivalent
|
Average
|
|||||||||||||||||||
(Dollars in thousands)
|
balance
|
Interest
|
yield/rate
|
balance
|
Interest
|
yield/rate
|
||||||||||||||||||
Interest-earning assets
|
||||||||||||||||||||||||
Federal funds sold and interest-bearing balances
|
$ | 10,908 | $ | 7 | 0.26 | % | $ | 10,636 | $ | 7 | 0.25 | % | ||||||||||||
Investment securities
|
125,721 | 1,128 | 3.59 | % | 148,326 | 1,576 | 4.25 | % | ||||||||||||||||
Loans
|
755,092 | 9,418 | 5.08 | % | 746,523 | 9,607 | 5.18 | % | ||||||||||||||||
Total interest-earning assets
|
$ | 891,721 | 10,553 | 4.80 | % | $ | 905,485 | 11,190 | 4.97 | % | ||||||||||||||
Interest-bearing liabilities
|
||||||||||||||||||||||||
Interest-bearing deposits
|
$ | 644,878 | 1,670 | 1.05 | % | $ | 647,079 | 2,360 | 1.48 | % | ||||||||||||||
Securities sold under agreements to repurchase
|
54,268 | 33 | 0.25 | % | 60,612 | 38 | 0.25 | % | ||||||||||||||||
Short-term borrowings
|
722 | 1 | 0.73 | % | 223 | - | 0.65 | % | ||||||||||||||||
Long-term debt
|
67,062 | 701 | 4.24 | % | 94,416 | 973 | 4.18 | % | ||||||||||||||||
Total interest-bearing liabilities
|
$ | 766,930 | 2,405 | 1.27 | % | $ | 802,330 | 3,371 | 1.70 | % | ||||||||||||||
Interest spread
|
3.53 | % | 3.27 | % | ||||||||||||||||||||
Tax equivalent Net interest income/Net interest margin
|
8,148 | 3.71 | % | 7,819 | 3.46 | % | ||||||||||||||||||
Tax equivalent adjustment
|
(253 | ) | (274 | ) | ||||||||||||||||||||
Net interest income
|
$ | 7,895 | $ | 7,545 |
For the Three Months Ended
|
||||||||||||||||
March 31
|
Change
|
|||||||||||||||
2011
|
2010
|
Amount
|
%
|
|||||||||||||
Noninterest Income
|
|
|
|
|
||||||||||||
Investment and trust services fees
|
$ | 932 | $ | 1,017 | $ | (85 | ) | (8.4 | ) | |||||||
Loan service charges
|
481 | 197 | 284 | 144.2 | ||||||||||||
Mortgage banking activities
|
10 | 69 | (59 | ) | (85.5 | ) | ||||||||||
Deposit service charges and fees
|
536 | 577 | (41 | ) | (7.1 | ) | ||||||||||
Other service charges and fees
|
362 | 326 | 36 | 11.0 | ||||||||||||
Increase in cash surrender value of life insurance
|
165 | 166 | (1 | ) | (0.6 | ) | ||||||||||
Other
|
25 | 49 | (24 | ) | (49.0 | ) | ||||||||||
OTTI losses on securities
|
- | (689 | ) | 689 | N/A | |||||||||||
Less: Loss recognized in other comprehensive income (before taxes)
|
- | (434 | ) | 434 | N/A | |||||||||||
Net OTTI losses recognized in earnings
|
- | (255 | ) | 255 | N/A | |||||||||||
Securities gains, net
|
11 | 249 | (238 | ) | (95.6 | ) | ||||||||||
Total noninterest income
|
$ | 2,522 | $ | 2,395 | $ | 127 | 5.3 |
For the Three Months Ended
|
||||||||||||||||
March 31
|
Change
|
|||||||||||||||
2011
|
2010
|
Amount
|
%
|
|||||||||||||
Noninterest Expense
|
||||||||||||||||
Salaries and benefits
|
$ | 3,713 | $ | 3,441 | $ | 272 | 7.9 | |||||||||
Net occupancy expense
|
531 | 526 | 5 | 1.0 | ||||||||||||
Furniture and equipment expense
|
223 | 192 | 31 | 16.1 | ||||||||||||
Advertising
|
292 | 301 | (9 | ) | (3.0 | ) | ||||||||||
Legal and professional fees
|
271 | 395 | (124 | ) | (31.4 | ) | ||||||||||
Data processing
|
381 | 377 | 4 | 1.1 | ||||||||||||
Pennsylvania bank shares tax
|
165 | 156 | 9 | 5.8 | ||||||||||||
Intangible amortization
|
111 | 114 | (3 | ) | (2.6 | ) | ||||||||||
FDIC insurance
|
311 | 292 | 19 | 6.5 | ||||||||||||
Other
|
1,024 | 866 | 158 | 18.2 | ||||||||||||
Total noninterest expense
|
$ | 7,022 | $ | 6,660 | $ | 362 | 5.4 |
(Amounts in thousands)
|
Gross
|
Gross
|
Estimated
|
|||||||||||||
Amortized
|
unrealized
|
unrealized
|
fair
|
|||||||||||||
March 31, 2011
|
cost
|
gains
|
losses
|
value
|
||||||||||||
Equity securities
|
$ | 3,258 | $ | 58 | $ | (454 | ) | $ | 2,862 | |||||||
Obligations of U.S. Government agencies
|
17,562 | 61 | (46 | ) | 17,577 | |||||||||||
Obligations of state and political subdivisions
|
38,908 | 1,203 | (99 | ) | 40,012 | |||||||||||
Corporate debt securities
|
2,615 | 69 | (25 | ) | 2,659 | |||||||||||
Preferred securities
|
5,881 | - | (1,363 | ) | 4,518 | |||||||||||
Mortgage-backed securities
|
||||||||||||||||
Agency
|
51,305 | 863 | (148 | ) | 52,020 | |||||||||||
Non-Agency
|
4,167 | 20 | (419 | ) | 3,768 | |||||||||||
Asset-backed securities
|
71 | - | (20 | ) | 51 | |||||||||||
$ | 123,767 | $ | 2,274 | $ | (2,574 | ) | $ | 123,467 | ||||||||
Gross
|
Gross
|
Estimated
|
||||||||||||||
(Amounts in thousands)
|
Amortized
|
unrealized
|
unrealized
|
fair
|
||||||||||||
December 31, 2010
|
cost
|
gains
|
losses
|
value
|
||||||||||||
Equity securities
|
$ | 4,126 | $ | 50 | $ | (538 | ) | $ | 3,638 | |||||||
Obligations of U.S. Government agencies
|
14,780 | 61 | (56 | ) | 14,785 | |||||||||||
Obligations of state and political subdivisions
|
39,477 | 894 | (419 | ) | 39,952 | |||||||||||
Corporate debt securities
|
2,646 | 64 | (44 | ) | 2,666 | |||||||||||
Preferred securities
|
5,876 | - | (1,680 | ) | 4,196 | |||||||||||
Mortgage-backed securities
|
||||||||||||||||
Agency
|
47,239 | 1,104 | (46 | ) | 48,297 | |||||||||||
Non-Agency
|
4,424 | 20 | (415 | ) | 4,029 | |||||||||||
Asset-backed securities
|
74 | - | (21 | ) | 53 | |||||||||||
$ | 118,642 | $ | 2,193 | $ | (3,219 | ) | $ | 117,616 |
Trust Preferred Securities
|
|||||||||||||||||||||||||
(Dollars in thousands)
|
|||||||||||||||||||||||||
Deal Name
|
Single
Issuer or
Pooled
|
Class
|
Amortized
Cost
|
Estimated
Fair Value
|
Gross
Unrealized
Gain (Loss)
|
Lowest
Credit
Rating
Assigned
|
Number of
Banks
Currently
Performing
|
Deferrals
and Defaults
as % of
Original
Collateral
|
Expected Deferral/
Defaults as a
Percentage of
Remaining Performing
Collateral
|
||||||||||||||||
Huntington Cap Trust
|
Single
|
Preferred Stock
|
$ | 928 | $ | 593 | $ | (335 | ) |
B
|
1 |
None
|
None
|
||||||||||||
Huntington Cap Trust II
|
Single
|
Preferred Stock
|
873 | 561 | (312 | ) |
B
|
1 |
None
|
None
|
|||||||||||||||
BankAmerica Cap III
|
Single
|
Preferred Stock
|
956 | 760 | (196 | ) |
BB
|
1 |
None
|
None
|
|||||||||||||||
Wachovia Cap Trust II
|
Single
|
Preferred Stock
|
273 | 235 | (38 | ) |
Baa2
|
1 |
None
|
None
|
|||||||||||||||
Corestates Captl Tr II
|
Single
|
Preferred Stock
|
924 | 781 | (143 | ) |
Baa1
|
1 |
None
|
None
|
|||||||||||||||
Chase Cap VI JPM
|
Single
|
Preferred Stock
|
956 | 828 | (128 | ) |
BBB
|
1 |
None
|
None
|
|||||||||||||||
Fleet Cap Tr V
|
Single
|
Preferred Stock
|
971 | 761 | (210 | ) |
BB
|
1 |
None
|
None
|
|||||||||||||||
|
$ | 5,881 | $ | 4,519 | $ | (1,362 | ) |
Private Label Mortgage Backed Securities
|
|||||||||||||||||||||||||
(Dollars in thousands)
|
Gross
|
Cummulative
|
|||||||||||||||||||||||
Orgination
|
Amortized
|
Fair
|
Unrealized
|
Collateral
|
Lowest Credit
|
Credit
|
OTTI
|
||||||||||||||||||
Decscription
|
Date
|
Cost
|
Value
|
Gain (Loss)
|
Type
|
Rating Assigned
|
Support %
|
Charges
|
|||||||||||||||||
RALI 2003-QS15 A1
|
8/1/2003
|
$ | 451 | $ | 450 | $ | (1 | ) |
ALT A
|
Aa2
|
11.60 | $ | - | ||||||||||||
RALI 2004-QS4 A7
|
3/1/2004
|
564 | 566 | 2 |
ALT A
|
AAA
|
12.81 | - | |||||||||||||||||
MALT 2004-6 7A1
|
6/1/2004
|
706 | 724 | 18 |
ALT A
|
BBB
|
10.70 | - | |||||||||||||||||
RALI 2005-QS2 A1
|
2/1/2005
|
630 | 574 | (56 | ) |
ALT A
|
B
|
7.64 | - | ||||||||||||||||
RALI 2006-QS4 A2
|
4/1/2006
|
912 | 686 | (226 | ) |
ALT A
|
D
|
- | 202 | ||||||||||||||||
GSR 2006-5F 2A1
|
5/1/2006
|
397 | 361 | (36 | ) |
Prime
|
CCC
|
4.14 | - | ||||||||||||||||
RALI 2006-QS8 A1
|
7/28/2006
|
507 | 407 | (100 | ) |
ALT A
|
D
|
- | 133 | ||||||||||||||||
$ | 4,167 | $ | 3,768 | $ | (399 | ) | $ | 335 |
March 31, 2011
|
||||||||||||||||||||||||||||||||||||
Less than 12 months
|
12 months or more
|
Total
|
||||||||||||||||||||||||||||||||||
Fair
|
Unrealized
|
Fair
|
Unrealized
|
Fair
|
Unrealized
|
|||||||||||||||||||||||||||||||
(Amounts in thousands)
|
Value
|
Losses
|
Number
|
Value
|
Losses
|
Number
|
Value
|
Losses
|
Number
|
|||||||||||||||||||||||||||
Equity securities
|
$ | 813 | $ | (19 | ) | 2 | $ | 1,334 | $ | (435 | ) | 18 | $ | 2,147 | $ | (454 | ) | 20 | ||||||||||||||||||
Obligations of U.S. Government agencies
|
1,039 | (16 | ) | 3 | 6,326 | (30 | ) | 12 | 7,365 | (46 | ) | 15 | ||||||||||||||||||||||||
Obligations of state and political subdivisions
|
5,637 | (86 | ) | 12 | 293 | (13 | ) | 1 | 5,930 | (99 | ) | 13 | ||||||||||||||||||||||||
Corporate debt securities
|
- | - | - | 1,987 | (25 | ) | 2 | 1,987 | (25 | ) | 2 | |||||||||||||||||||||||||
Preferred Securities
|
- | - | - | 4,517 | (1,363 | ) | 7 | 4,517 | (1,363 | ) | 7 | |||||||||||||||||||||||||
Mortgage-backed securities
|
||||||||||||||||||||||||||||||||||||
Agency
|
16,749 | (148 | ) | 12 | - | - | - | 16,749 | (148 | ) | 12 | |||||||||||||||||||||||||
Non-Agency
|
450 | (1 | ) | 1 | 2,028 | (418 | ) | 4 | 2,478 | (419 | ) | 5 | ||||||||||||||||||||||||
Asset-backed securities
|
- | - | - | 52 | (20 | ) | 3 | 52 | (20 | ) | 3 | |||||||||||||||||||||||||
Total temporarily impaired securities
|
$ | 24,688 | $ | (270 | ) | 30 | $ | 16,537 | $ | (2,304 | ) | 47 | $ | 41,225 | $ | (2,574 | ) | 77 | ||||||||||||||||||
December 31, 2010
|
||||||||||||||||||||||||||||||||||||
Less than 12 months
|
12 months or more
|
Total
|
||||||||||||||||||||||||||||||||||
Fair
|
Unrealized
|
Fair
|
Unrealized
|
Fair
|
Unrealized
|
|||||||||||||||||||||||||||||||
(Amounts in thousands)
|
Value
|
Losses
|
Number
|
Value
|
Losses
|
Number
|
Value
|
Losses
|
Number
|
|||||||||||||||||||||||||||
Equity securities
|
$ | 1 | $ | (1 | ) | 1 | $ | 3,261 | $ | (537 | ) | 20 | $ | 3,262 | $ | (538 | ) | 21 | ||||||||||||||||||
Obligations of U.S. Government agencies
|
3,476 | (17 | ) | 2 | 6,433 | (39 | ) | 14 | 9,909 | (56 | ) | 16 | ||||||||||||||||||||||||
Obligations of state and political subdivisions
|
11,861 | (405 | ) | 24 | 292 | (14 | ) | 1 | 12,153 | (419 | ) | 25 | ||||||||||||||||||||||||
Corporate debt securities
|
- | - | - | 1,968 | (44 | ) | 2 | 1,968 | (44 | ) | 2 | |||||||||||||||||||||||||
Preferred Securities
|
- | - | - | 4,196 | (1,680 | ) | 7 | 4,196 | (1,680 | ) | 7 | |||||||||||||||||||||||||
Mortgage-backed securities
|
||||||||||||||||||||||||||||||||||||
Agency
|
9,859 | (46 | ) | 6 | - | - | - | 9,859 | (46 | ) | 6 | |||||||||||||||||||||||||
Non-Agency
|
- | - | - | 2,676 | (415 | ) | 5 | 2,676 | (415 | ) | 5 | |||||||||||||||||||||||||
Asset-backed securities
|
- | - | - | 53 | (21 | ) | 3 | 53 | (21 | ) | 3 | |||||||||||||||||||||||||
Total temporarily impaired securities
|
$ | 25,197 | $ | (469 | ) | 33 | $ | 18,879 | $ | (2,750 | ) | 52 | $ | 44,076 | $ | (3,219 | ) | 85 |
Three Months
|
||||
Ended
|
||||
March 31, 2011
|
||||
Balance of cumulative credit losses on securities, January 1, 2011
|
$ | 335 | ||
Additions for credit losses recorded which were not previously recognized as componenets of earnings
|
- | |||
Balance of cumulative credit losses on securities, March 31, 2011
|
$ | 335 |
Change
|
||||||||||||||||
(Amounts in thousands)
|
March 31, 2011
|
December 31, 2010
|
Amount
|
%
|
||||||||||||
Residential Real Estate 1-4 Family
|
||||||||||||||||
First liens
|
$ | 144,174 | $ | 144,128 | $ | 46 | - | |||||||||
Junior liens and lines of credit
|
54,323 | 56,694 | (2,371 | ) | (4.2 | ) | ||||||||||
Total
|
198,497 | 200,822 | (2,325 | ) | (1.2 | ) | ||||||||||
Residential real estate - construction
|
81,184 | 79,557 | 1,627 | 2.0 | ||||||||||||
Commercial, industrial and agricultural real estate
|
303,153 | 304,195 | (1,042 | ) | (0.3 | ) | ||||||||||
Commercial, industrial and agricultural
|
164,712 | 146,672 | 18,040 | 12.3 | ||||||||||||
Consumer
|
15,972 | 17,396 | (1,424 | ) | (8.2 | ) | ||||||||||
763,518 | 748,642 | 14,876 | 2.0 | |||||||||||||
Less: Allowance for loan losses
|
(9,198 | ) | (8,801 | ) | (397 | ) | 4.5 | |||||||||
Net Loans
|
$ | 754,320 | $ | 739,841 | $ | 14,479 | 2.0 | |||||||||
Included in the loan balances are the following:
|
||||||||||||||||
Net unamortized deferred loan costs
|
$ | 566 | $ | 567 | ||||||||||||
Unamortized discount on purchased loans
|
$ | (208 | ) | $ | (220 | ) | ||||||||||
Loans pledged as collateral for borrowings and commitments from:
|
||||||||||||||||
FHLB
|
$ | 702,866 | $ | 648,272 | ||||||||||||
Federal Reserve Bank
|
49,343 | 53,682 | ||||||||||||||
$ | 752,209 | $ | 701,954 |
March 31, 2011
|
December 31, 2010
|
|||||||||||||||
% of Loan
|
% of Loan
|
|||||||||||||||
(Dollars in thousands)
|
Balance
|
Segment
|
Balance
|
Segment
|
||||||||||||
Nonaccrual loans
|
||||||||||||||||
Residential Real Estate 1-4 Family
|
||||||||||||||||
First liens
|
$ | 987 | 0.68 | % | $ | 691 | 0.48 | % | ||||||||
Junior liens and lines of credit
|
34 | 0.06 | % | 122 | 0.22 | % | ||||||||||
Total
|
1,021 | 0.51 | % | 813 | 0.40 | % | ||||||||||
Residential real estate - construction
|
7,579 | 9.34 | % | 6,500 | 8.17 | % | ||||||||||
Commercial, industrial and agricultural real estate
|
10,482 | 3.46 | % | 13,003 | 4.27 | % | ||||||||||
Commercial, industrial and agricultural
|
1,609 | 0.98 | % | 1,668 | 1.14 | % | ||||||||||
Consumer
|
- | - | - | - | ||||||||||||
Total nonaccrual loans
|
$ | 20,691 | $ | 21,984 | ||||||||||||
Loans past due 90 days or more and not included above
|
||||||||||||||||
Residential Real Estate 1-4 Family
|
||||||||||||||||
First liens
|
$ | 583 | $ | 1,093 | ||||||||||||
Junior liens and lines of credit
|
765 | 833 | ||||||||||||||
Total
|
1,348 | 1,926 | ||||||||||||||
Residential real estate - construction
|
136 | 911 | ||||||||||||||
Commercial, industrial and agricultural real estate
|
4,086 | 2,343 | ||||||||||||||
Commercial, industrial and agricultural
|
170 | 244 | ||||||||||||||
Consumer
|
23 | 125 | ||||||||||||||
Total loans past due 90 days or more and still accruing
|
5,763 | 5,549 | ||||||||||||||
Total nonperforming loans
|
26,454 | 27,533 | ||||||||||||||
Foreclosed real estate
|
635 | 618 | ||||||||||||||
Total nonperforming assets
|
$ | 27,089 | $ | 28,151 | ||||||||||||
Restructured Loans (TDRs)
|
||||||||||||||||
Performing
|
$ | - | $ | 656 | ||||||||||||
Non-performing (included above)
|
637 | - | ||||||||||||||
Total TDRs
|
$ | 637 | $ | 656 | ||||||||||||
Nonaccrual loans to total gross loans
|
2.71 | % | 2.94 | % | ||||||||||||
Nonperforming loans to total gross loans
|
3.46 | % | 3.68 | % | ||||||||||||
Nonperforming assets to total assets
|
2.79 | % | 2.96 | % | ||||||||||||
Allowance for loan losses to nonperforming loans
|
34.77 | % | 31.97 | % |
Significant Nonaccrual Loans
|
||||||||||||||||||||
March 31, 2011
|
||||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
Orgination
|
|
ALL
|
Nonaccrual
|
Last
|
||||||||||||||||
Date
|
Balance
|
Reserve
|
Date
|
Collateral
|
Location
|
Appraisal(1)
|
||||||||||||||
Credit 1
|
||||||||||||||||||||
Residential real estate construction
|
2006
|
$ | 2,133 | $ | 637 |
May-09
|
1st lien residential building lots
|
PA
|
Nov-10
|
|||||||||||
and development , 1-4 family
|
2nd & 3rd lien single family residential
|
MD
|
$ | 4,205 | ||||||||||||||||
rental property
|
||||||||||||||||||||
Credit 2
|
|
|
|
|||||||||||||||||
Agricultural
|
2004 - 2006 | 1,620 | 127 |
Mar-09
|
1st and 2nd lien on agricultural real estate,
|
PA
|
Dec-09
|
|||||||||||||
4 separate notes
|
|
farm equipment, livestock and a 70% FSA
|
|
$ | 3,049 | |||||||||||||||
|
guarantee on a $352 thousand note
|
|
||||||||||||||||||
Credit 3
|
||||||||||||||||||||
Residential real estate construction and development , 1-4 family 18 separate notes
|
2007 - 2009 | 3,412 | - |
Jun-10
|
Joint and several liability of principals
|
N/A
|
N/A
|
|||||||||||||
Credit 4
|
2005 - 2010 | 2,817 | 128 |
Dec-10
|
1st, 2nd and 3rd lien on 600+ acres
|
PA
|
Jan-10
|
|||||||||||||
Agricultural
|
of farm real estate, equipment and
|
$ | 4,446 | |||||||||||||||||
7 separate notes
|
inventory
|
|||||||||||||||||||
Credit 5
|
2008 | 6,500 | 1,594 |
Dec-10
|
1st lien on 92 acres undeveloped
|
PA
|
Jan-11
|
|||||||||||||
Commercial real estate
|
commercial real estate
|
$ | 5,629 | |||||||||||||||||
$ | 16,482 | $ | 2,486 |
Foreclosed Real Estate
|
||||||||||||
March 31, 2011
|
||||||||||||
(Dollars in thousands)
|
Date
|
Last
|
||||||||||
Acquired
|
Balance
|
Collateral
|
Location
|
Appraisal
|
||||||||
Property 1
|
2009
|
$ | 91 |
4 residential building lots
|
PA
|
Sep-09
|
||||||
Property 2
|
2009
|
138 |
farmland - 36 acres
|
PA
|
Apr-09
|
|||||||
Property 3
|
2010
|
30 |
residential property
|
PA
|
May-10
|
|||||||
Property 4
|
2010
|
87 |
residential property
|
PA
|
Dec-10
|
|||||||
Property 5
|
2010
|
148 |
residential property
|
PA
|
Jul-10
|
|||||||
Property 6
|
2011
|
141 |
residential property
|
PA
|
Feb-11
|
|||||||
$ | 635 |
Commercial
|
||||||||||||||||||||||||||||
Residential Real Estate 1-4 Family
|
Industrial &
|
Commercial
|
||||||||||||||||||||||||||
Junior Liens &
|
Agricultural
|
Industrial &
|
||||||||||||||||||||||||||
(Dollars in thousands)
|
First Liens
|
Lines of Credit
|
Construction
|
Real Estate
|
Agricultural
|
Consumer
|
Total
|
|||||||||||||||||||||
March 31, 2011
|
||||||||||||||||||||||||||||
Loans evaluated for allowance:
|
||||||||||||||||||||||||||||
Individually
|
$ | 1,016 | $ | 308 | $ | 9,283 | $ | 18,155 | $ | 2,291 | $ | 3 | $ | 31,056 | ||||||||||||||
Collectively
|
143,158 | 54,015 | 71,901 | 284,998 | 162,421 | 15,969 | 732,462 | |||||||||||||||||||||
Total
|
$ | 144,174 | $ | 54,323 | $ | 81,184 | $ | 303,153 | $ | 164,712 | $ | 15,972 | $ | 763,518 | ||||||||||||||
Allowance established for loans evaluated:
|
||||||||||||||||||||||||||||
Individually
|
$ | 171 | $ | - | $ | 1,284 | $ | 3,006 | $ | 693 | $ | - | $ | 5,154 | ||||||||||||||
Collectively
|
441 | 292 | 1,058 | 1,210 | 754 | 289 | 4,044 | |||||||||||||||||||||
Allowance at March 31, 2011
|
$ | 612 | $ | 292 | $ | 2,342 | $ | 4,216 | $ | 1,447 | $ | 289 | $ | 9,198 |
Commercial
|
||||||||||||||||||||||||||||
Residential Real Estate 1-4 Family
|
Industrial &
|
Commercial
|
||||||||||||||||||||||||||
Junior Liens &
|
Agricultural
|
Industrial &
|
||||||||||||||||||||||||||
(Dollars in thousands)
|
First Liens
|
Lines of Credit
|
Construction
|
Real Estate
|
Agricultural
|
Consumer
|
Total
|
|||||||||||||||||||||
Allowance at December 31, 2010
|
$ | 600 | $ | 352 | $ | 2,596 | $ | 3,358 | $ | 1,578 | $ | 317 | $ | 8,801 | ||||||||||||||
Charge-offs
|
(107 | ) | (5 | ) | (400 | ) | (161 | ) | - | (64 | ) | (737 | ) | |||||||||||||||
Recoveries
|
11 | - | - | 193 | - | 30 | 234 | |||||||||||||||||||||
Provision
|
108 | (55 | ) | 146 | 826 | (131 | ) | 6 | 900 | |||||||||||||||||||
Allowance at March 31, 2011
|
$ | 612 | $ | 292 | $ | 2,342 | $ | 4,216 | $ | 1,447 | $ | 289 | $ | 9,198 |
Allowance for Loan Loss Ratios:
|
3/31/2011
|
12/31/2010
|
3/31/2010
|
|||||||||
Net loans charged-off as a percentage of average gross loans
|
0.27 | % | 0.45 | % | 0.21 | % | ||||||
Net loans charged-off as a percentage of the provision for loan losses
|
55.89 | % | 104.20 | % | 64.75 | % | ||||||
Allowance as a percentage of loans
|
1.20 | % | 1.18 | % | 1.27 | % |
Change
|
||||||||||||||||
(Amounts in thousands)
|
3/31/2011
|
12/31/2010
|
Amount
|
%
|
||||||||||||
Demand, noninterest-bearing checking
|
$ | 100,647 | $ | 90,317 | $ | 10,330 | 11.4 | |||||||||
Interest-bearing checking
|
108,309 | 103,918 | 4,391 | 4.2 | ||||||||||||
Money market accounts
|
297,453 | 289,763 | 7,690 | 2.7 | ||||||||||||
Savings accounts
|
50,185 | 48,138 | 2,047 | 4.3 | ||||||||||||
Total interest-bearing checking and savings
|
455,947 | 441,819 | 14,128 | 3.2 | ||||||||||||
Retail time deposits
|
156,258 | 161,399 | (5,141 | ) | (3.2 | ) | ||||||||||
Brokered time deposits
|
44,455 | 40,796 | 3,659 | 9.0 | ||||||||||||
Total time deposits
|
200,713 | 202,195 | (1,482 | ) | (0.7 | ) | ||||||||||
Total deposits
|
$ | 757,307 | $ | 734,331 | $ | 22,976 | 3.1 | |||||||||
Overdrawn deposit accounts reclassified as loan balances
|
$ | 126 | $ | 74 |
Regulatory Ratios
|
||||||||||||||||
Well Capitalized
|
||||||||||||||||
March 31, 2011
|
December 31, 2010
|
Minimum
|
Minimum
|
|||||||||||||
Total Risk Based Capital Ratio (1)
|
||||||||||||||||
Franklin Financial Services Corporation
|
11.74 | % | 11.73 | % | 8.00 | % | n/a | |||||||||
Farmers & Merchants Trust Company
|
11.21 | % | 11.22 | % | 8.00 | % | 10.00 | % | ||||||||
Tier 1 Capital Ratio (2)
|
||||||||||||||||
Franklin Financial Services Corporation
|
10.51 | % | 10.54 | % | 4.00 | % | n/a | |||||||||
Farmers & Merchants Trust Company
|
9.98 | % | 10.02 | % | 4.00 | % | 6.00 | % | ||||||||
Leverage Ratio (3)
|
||||||||||||||||
Franklin Financial Services Corporation
|
8.27 | % | 8.16 | % | 4.00 | % | n/a | |||||||||
Farmers & Merchants Trust Company
|
7.83 | % | 7.73 | % | 4.00 | % | 5.00 | % |
3/31/2011
|
12/31/2010
|
|||||||
Unemployment Rate (seasonally adjusted)
|
||||||||
Market area range (1)
|
7.30 - 12.2 | % | 7.3% - 12.5 | % | ||||
Pennsylvania
|
8.2 | % | 8.9 | % | ||||
United States
|
9.0 | % | 9.6 | % | ||||
Housing Price Index - year over year change
|
||||||||
PA, nonmetropolitan statistical area
|
0.7 | % | -1.5 | % | ||||
United States
|
-1.3 | % | -1.2 | % | ||||
Franklin County Building Permits - year over year change
|
||||||||
Residential, estimated
|
26.8 | % | 26.8 | % | ||||
Multifamily, estimated
|
-10.9 | % | -10.9 | % | ||||
Mortgage Delinquency
|
||||||||
Market area range (1)
|
1.8 - 3.0 | % | 1.8% - 3.0 | % | ||||
National
|
5.30 | % | 5.30 | % |
Franklin Financial Services Corporation
|
|||
May 10, 2011
|
/s/ William E. Snell, Jr.
|
||
William E. Snell, Jr.
|
|||
President and Chief Executive Officer
|
|||
(Authorized Officer)
|
|||
May 10, 2011
|
/s/ Mark R. Hollar
|
||
Mark R. Hollar
|
|||
Treasurer and Chief Financial Officer
|
|||
(Principal Financial Officer)
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Franklin Financial Services Corporation;
|
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 and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) ) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter 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 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:
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
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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.
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/s/ William E. Snell, Jr.
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William E. Snell, Jr.
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President and Chief Executive Officer
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(Principal Executive Officer)
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1.
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I have reviewed this quarterly report on Form 10-Q of Franklin Financial Services Corporation;
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2.
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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;
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3.
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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;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have:
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a)
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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;
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b)
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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;
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c)
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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
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d)
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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 that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting and
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5.
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The registrant’s other certifying officer 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:
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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c)
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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.
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/s/ Mark R. Hollar
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Mark R. Hollar
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Treasurer and Chief Financial Officer
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(1)
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The report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
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/s/ William E. Snell, Jr.
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William E. Snell, Jr.
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Chief Executive Officer
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(Principal Executive Officer)
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May 10, 2011
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(1)
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The report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
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/s/ Mark R. Hollar
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Mark R. Hollar
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Chief Financial Officer
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(Principal Financial Officer)
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May 10, 2011
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