x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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VIRGINIA
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54-1265373
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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Large accelerated filer o
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Accelerated filer o
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Non-accelerated filer o
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Smaller reporting company ■
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(Do not check if a smaller reporting company) |
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Page
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Item 1
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1
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1
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2
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3
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4
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5
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6
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Item 2.
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30
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Item 3.
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42
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Item 4.
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42
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PART II - OTHER INFORMATION
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Item 1.
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43
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Item 1A.
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43
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Item 2.
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43
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Item 3.
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43
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Item 4.
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43
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Item 5.
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43
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Item 6.
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43
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44
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Old Point Financial Corporation and Subsidiaries
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||||||||
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||||||||
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June 30,
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December 31,
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||||||
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2013
|
2012
|
||||||
|
(unaudited)
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|||||||
Assets
|
||||||||
|
||||||||
Cash and due from banks
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$
|
14,012,831
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$
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15,982,070
|
||||
Interest-bearing due from banks
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40,214,328
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24,732,329
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||||||
Federal funds sold
|
943,365
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1,602,847
|
||||||
Cash and cash equivalents
|
55,170,524
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42,317,246
|
||||||
Securities available-for-sale, at fair value
|
258,583,381
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329,455,812
|
||||||
Securities held-to-maturity (fair value approximates $11,402,809 and $573,500)
|
11,412,681
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570,000
|
||||||
Restricted securities
|
2,378,100
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2,561,900
|
||||||
Loans, net of allowance for loan losses of $7,295,952 and $7,324,310
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462,211,798
|
463,808,457
|
||||||
Premises and equipment, net
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35,508,997
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32,528,350
|
||||||
Bank-owned life insurance
|
22,256,631
|
21,824,197
|
||||||
Foreclosed assets, net of valuation allowance of $1,723,658 and $1,870,285
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6,559,191
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6,573,398
|
||||||
Other assets
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12,800,048
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7,859,344
|
||||||
Total assets
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$
|
866,881,351
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$
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907,498,704
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||||
|
||||||||
Liabilities & Stockholders' Equity
|
||||||||
|
||||||||
Deposits:
|
||||||||
Noninterest-bearing deposits
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$
|
177,839,199
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$
|
176,740,312
|
||||
Savings deposits
|
270,821,034
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268,252,782
|
||||||
Time deposits
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281,707,695
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308,822,642
|
||||||
Total deposits
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730,367,928
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753,815,736
|
||||||
Overnight repurchase agreements
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25,641,883
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35,945,800
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||||||
Term repurchase agreements
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410,651
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1,279,574
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||||||
Federal Home Loan Bank advances
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25,000,000
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25,000,000
|
||||||
Accrued expenses and other liabilities
|
2,963,605
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2,157,558
|
||||||
Total liabilities
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784,384,067
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818,198,668
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||||||
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||||||||
Commitments and contingencies
|
||||||||
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||||||||
Stockholders' equity:
|
||||||||
Common stock, $5 par value, 10,000,000 shares authorized;4,959,009 shares issued and outstanding
|
24,795,045
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24,795,045
|
||||||
Additional paid-in capital
|
16,391,845
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16,391,845
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||||||
Retained earnings
|
49,724,841
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48,304,609
|
||||||
Accumulated other comprehensive loss, net
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(8,414,447
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)
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(191,463
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)
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||||
Total stockholders' equity
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82,497,284
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89,300,036
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||||||
Total liabilities and stockholders' equity
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$
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866,881,351
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$
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907,498,704
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Old Point Financial Corporation and Subsidiaries
|
||||||||||||||||
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Three Months Ended
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Six Months Ended
|
||||||||||||||
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June 30,
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June 30,
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||||||||||||||
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2013
|
2012
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2013
|
2012
|
||||||||||||
|
(unaudited)
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(unaudited)
|
||||||||||||||
Interest and Dividend Income:
|
||||||||||||||||
Interest and fees on loans
|
$
|
5,891,576
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$
|
6,749,689
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$
|
11,899,269
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$
|
13,818,466
|
||||||||
Interest on due from banks
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18,782
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10,008
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32,807
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26,280
|
||||||||||||
Interest on federal funds sold
|
291
|
460
|
751
|
763
|
||||||||||||
Interest on securities:
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||||||||||||||||
Taxable
|
1,252,486
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1,379,414
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2,576,536
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2,600,900
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||||||||||||
Tax-exempt
|
287,389
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148,232
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551,982
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242,209
|
||||||||||||
Dividends and interest on all other securities
|
26,023
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23,815
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44,118
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45,192
|
||||||||||||
Total interest and dividend income
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7,476,547
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8,311,618
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15,105,463
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16,733,810
|
||||||||||||
|
||||||||||||||||
Interest Expense:
|
||||||||||||||||
Interest on savings deposits
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68,669
|
94,184
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155,855
|
188,239
|
||||||||||||
Interest on time deposits
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795,843
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963,549
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1,649,735
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1,938,978
|
||||||||||||
Interest on federal funds purchased, securities sold under agreements to repurchase and other borrowings
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7,875
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15,627
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19,441
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32,023
|
||||||||||||
Interest on Federal Home Loan Bank advances
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305,229
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425,046
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607,104
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850,092
|
||||||||||||
Total interest expense
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1,177,616
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1,498,406
|
2,432,135
|
3,009,332
|
||||||||||||
Net interest income
|
6,298,931
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6,813,212
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12,673,328
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13,724,478
|
||||||||||||
Provision for loan losses
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300,000
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1,000,000
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500,000
|
1,200,000
|
||||||||||||
Net interest income, after provision for loan losses
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5,998,931
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5,813,212
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12,173,328
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12,524,478
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||||||||||||
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||||||||||||||||
Noninterest Income:
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||||||||||||||||
Income from fiduciary activities
|
865,689
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793,005
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1,765,494
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1,619,651
|
||||||||||||
Service charges on deposit accounts
|
1,036,265
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1,073,004
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2,032,865
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2,103,309
|
||||||||||||
Other service charges, commissions and fees
|
911,619
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880,032
|
1,770,590
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1,677,061
|
||||||||||||
Income from bank-owned life insurance
|
216,519
|
225,201
|
431,826
|
448,881
|
||||||||||||
Income from Old Point Mortgage
|
217,799
|
94,311
|
304,324
|
125,298
|
||||||||||||
Gain (loss) on sale of available-for-sale securities, net
|
(20,532
|
)
|
769,474
|
(20,532
|
)
|
1,083,869
|
||||||||||
Other operating income
|
56,874
|
45,821
|
112,935
|
90,664
|
||||||||||||
Total noninterest income
|
3,284,233
|
3,880,848
|
6,397,502
|
7,148,733
|
||||||||||||
|
||||||||||||||||
Noninterest Expense:
|
||||||||||||||||
Salaries and employee benefits
|
4,805,584
|
5,219,885
|
9,726,510
|
10,180,162
|
||||||||||||
Occupancy and equipment
|
1,078,684
|
1,069,180
|
2,190,883
|
2,162,933
|
||||||||||||
Data processing
|
412,884
|
391,376
|
834,460
|
773,903
|
||||||||||||
FDIC insurance
|
173,914
|
286,314
|
356,975
|
567,152
|
||||||||||||
Customer development
|
205,372
|
202,992
|
411,478
|
406,888
|
||||||||||||
Legal and audit expense
|
123,537
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224,182
|
234,661
|
408,112
|
||||||||||||
Other outside service fees
|
112,510
|
140,981
|
208,888
|
293,367
|
||||||||||||
Employee professional development
|
181,367
|
187,643
|
312,781
|
329,984
|
||||||||||||
Postage and courier expense
|
120,166
|
118,984
|
243,031
|
243,311
|
||||||||||||
Advertising
|
124,320
|
146,594
|
247,370
|
291,612
|
||||||||||||
Stationery and supplies
|
95,414
|
113,304
|
215,723
|
217,839
|
||||||||||||
Loss on write-down/sale of foreclosed assets
|
77,223
|
380,050
|
203,676
|
636,634
|
||||||||||||
Other operating expense
|
537,800
|
465,165
|
1,088,141
|
984,191
|
||||||||||||
Total noninterest expense
|
8,048,775
|
8,946,650
|
16,274,577
|
17,496,088
|
||||||||||||
Income before income taxes
|
1,234,389
|
747,410
|
2,296,253
|
2,177,123
|
||||||||||||
Income tax expense
|
219,574
|
109,203
|
380,121
|
460,615
|
||||||||||||
Net income
|
$
|
1,014,815
|
$
|
638,207
|
$
|
1,916,132
|
$
|
1,716,508
|
||||||||
|
||||||||||||||||
Basic Earnings per Share:
|
||||||||||||||||
Average shares outstanding
|
4,959,009
|
4,959,009
|
4,959,009
|
4,959,009
|
||||||||||||
Net income per share of common stock
|
$
|
0.21
|
$
|
0.13
|
$
|
0.39
|
$
|
0.35
|
||||||||
|
||||||||||||||||
Diluted Earnings per Share:
|
||||||||||||||||
Average shares outstanding
|
4,959,009
|
4,959,009
|
4,959,009
|
4,959,009
|
||||||||||||
Net income per share of common stock
|
$
|
0.21
|
$
|
0.13
|
$
|
0.39
|
$
|
0.35
|
Old Point Financial Corporation
|
||||||||||||||||
|
Three Months Ended
|
Six Months Ended
|
||||||||||||||
|
June 30,
|
June 30,
|
||||||||||||||
|
2013
|
2012
|
2013
|
2012
|
||||||||||||
|
(unaudited)
|
(unaudited)
|
||||||||||||||
|
||||||||||||||||
Net income
|
$
|
1,014,815
|
$
|
638,207
|
$
|
1,916,132
|
$
|
1,716,508
|
||||||||
Other comprehensive income (loss), net
|
||||||||||||||||
Unrealized gains (losses) on securities, net of reclassification adjustment
|
(6,496,437
|
)
|
1,004,031
|
(8,222,984
|
)
|
249,407
|
||||||||||
Comprehensive income (loss)
|
$
|
(5,481,622
|
)
|
$
|
1,642,238
|
$
|
(6,306,852
|
)
|
$
|
1,965,915
|
Old Point Financial Corporation and Subsidiaries
|
||||||||||||||||||||||||
(unaudited)
|
Shares of
Common
Stock
|
Common
Stock
|
Additional
Paid-in
Capital
|
Retained
Earnings
|
Accumulated
Other
Comprehensive
Income (Loss)
|
Total
|
||||||||||||||||||
|
||||||||||||||||||||||||
SIX MONTHS ENDED JUNE 30, 2013
|
||||||||||||||||||||||||
|
||||||||||||||||||||||||
Balance at beginning of period
|
4,959,009
|
$
|
24,795,045
|
$
|
16,391,845
|
$
|
48,304,609
|
$
|
(191,463
|
)
|
$
|
89,300,036
|
||||||||||||
Net income
|
0
|
0
|
0
|
1,916,132
|
0
|
1,916,132
|
||||||||||||||||||
Other comprehensive loss, net of tax
|
0
|
0
|
0
|
0
|
(8,222,984
|
)
|
(8,222,984
|
)
|
||||||||||||||||
Cash dividends ($0.10 per share)
|
0
|
0
|
0
|
(495,900
|
)
|
0
|
(495,900
|
)
|
||||||||||||||||
|
||||||||||||||||||||||||
Balance at end of period
|
4,959,009
|
$
|
24,795,045
|
$
|
16,391,845
|
$
|
49,724,841
|
$
|
(8,414,447
|
)
|
$
|
82,497,284
|
||||||||||||
|
||||||||||||||||||||||||
SIX MONTHS ENDED JUNE 30, 2012
|
||||||||||||||||||||||||
|
||||||||||||||||||||||||
Balance at beginning of period
|
4,959,009
|
$
|
24,795,045
|
$
|
16,309,983
|
$
|
45,109,268
|
$
|
(349,581
|
)
|
$
|
85,864,715
|
||||||||||||
Net income
|
0
|
0
|
0
|
1,716,508
|
0
|
1,716,508
|
||||||||||||||||||
Other comprehensive income, net of tax
|
0
|
0
|
0
|
0
|
249,407
|
249,407
|
||||||||||||||||||
Stock compensation expense
|
0
|
0
|
55,330
|
0
|
0
|
55,330
|
||||||||||||||||||
Cash dividends ($0.10 per share)
|
0
|
0
|
0
|
(495,901
|
)
|
0
|
(495,901
|
)
|
||||||||||||||||
|
||||||||||||||||||||||||
Balance at end of period
|
4,959,009
|
$
|
24,795,045
|
$
|
16,365,313
|
$
|
46,329,875
|
$
|
(100,174
|
)
|
$
|
87,390,059
|
Old Point Financial Corporation and Subsidiaries
|
||||||||
|
Six Months Ended
|
|||||||
|
June 30,
|
|||||||
|
2013
|
2012
|
||||||
|
(unaudited)
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
||||||||
Net income
|
$
|
1,916,132
|
$
|
1,716,508
|
||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
979,896
|
938,719
|
||||||
Provision for loan losses
|
500,000
|
1,200,000
|
||||||
Net (gain) loss on sale of available-for-sale securities
|
20,532
|
(1,083,869
|
)
|
|||||
Net amortization of securities
|
1,318,419
|
572,773
|
||||||
Net loss on disposal of premises and equipment
|
16,416
|
52
|
||||||
Net loss on write-down/sale of foreclosed assets
|
203,676
|
636,634
|
||||||
Income from bank owned life insurance
|
(431,826
|
)
|
(448,881
|
)
|
||||
Stock compensation expense
|
0
|
55,330
|
||||||
Deferred tax (benefit) expense
|
(116,994
|
)
|
20,688
|
|||||
(Increase) decrease in other assets
|
(522,292
|
)
|
1,379,570
|
|||||
Increase in other liabilities
|
806,047
|
534,406
|
||||||
Net cash provided by operating activities
|
4,690,006
|
5,521,930
|
||||||
|
||||||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
||||||||
Purchases of available-for-sale securities
|
(11,377,086
|
)
|
(186,286,377
|
)
|
||||
Purchases of held-to-maturity securities
|
(10,853,837
|
)
|
0
|
|||||
Proceeds from sales of restricted securities
|
183,800
|
341,200
|
||||||
Proceeds from maturities and calls of securities
|
29,161,524
|
37,873,835
|
||||||
Decrease in loans made to customers
|
230,300
|
41,245,918
|
||||||
Proceeds from sales of foreclosed assets
|
1,117,240
|
2,170,889
|
||||||
Purchases of premises and equipment
|
(4,483,255
|
)
|
(1,028,992
|
)
|
||||
Net cash provided by (used in) investing activities
|
43,279,820
|
(14,678,372
|
)
|
|||||
|
||||||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
||||||||
Increase in noninterest-bearing deposits
|
1,098,887
|
9,939,550
|
||||||
Increase in savings deposits
|
2,568,252
|
11,483,949
|
||||||
Increase (decrease) in time deposits
|
(27,114,947
|
)
|
11,873,082
|
|||||
Decrease in federal funds purchased, repurchase agreements and other borrowings
|
(11,172,840
|
)
|
(12,541,091
|
)
|
||||
Cash dividends paid on common stock
|
(495,900
|
)
|
(495,901
|
)
|
||||
Net cash provided by (used in) financing activities
|
(35,116,548
|
)
|
20,259,589
|
|||||
|
||||||||
Net increase in cash and cash equivalents
|
12,853,278
|
11,103,147
|
||||||
Cash and cash equivalents at beginning of period
|
42,317,246
|
24,854,656
|
||||||
Cash and cash equivalents at end of period
|
$
|
55,170,524
|
$
|
35,957,803
|
||||
|
||||||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
|
||||||||
Cash payments for:
|
||||||||
Interest
|
$
|
2,504,764
|
$
|
3,021,805
|
||||
Income tax
|
$
|
450,000
|
$
|
600,000
|
||||
|
||||||||
SUPPLEMENTAL SCHEDULE OF NONCASH TRANSACTIONS
|
||||||||
Unrealized gain (loss) on securities available-for-sale
|
$
|
(12,459,065
|
)
|
$
|
377,890
|
|||
Loans transferred to foreclosed assets
|
$
|
866,359
|
$
|
564,480
|
||||
Former branch site transferred from fixed assets to foreclosed properties
|
$
|
506,296
|
$
|
0
|
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
||||||||||||
|
(in thousands)
|
|||||||||||||||
June 30, 2013
|
||||||||||||||||
Obligations of U.S. Government agencies
|
$
|
570
|
$
|
3
|
$
|
(3
|
)
|
$
|
570
|
|||||||
Obligations of state and political subdivisions
|
10,843
|
9
|
(19
|
)
|
10,833
|
|||||||||||
Total
|
$
|
11,413
|
$
|
12
|
$
|
(22
|
)
|
$
|
11,403
|
|||||||
|
||||||||||||||||
December 31, 2012
|
||||||||||||||||
Obligations of U.S. Government agencies
|
$
|
570
|
$
|
4
|
$
|
0
|
$
|
574
|
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
||||||||||||
|
(in thousands)
|
|||||||||||||||
June 30, 2013
|
||||||||||||||||
Obligations of U.S. Government agencies
|
$
|
25,372
|
$
|
551
|
$
|
(118
|
)
|
$
|
25,805
|
|||||||
Obligations of state and political subdivisions
|
50,997
|
160
|
(2,393
|
)
|
48,764
|
|||||||||||
Mortgage-backed securities
|
189,456
|
0
|
(7,613
|
)
|
181,843
|
|||||||||||
Money market investments
|
801
|
0
|
0
|
801
|
||||||||||||
Corporate bonds
|
1,399
|
0
|
(29
|
)
|
1,370
|
|||||||||||
Total
|
$
|
268,025
|
$
|
711
|
$
|
(10,153
|
)
|
$
|
258,583
|
|||||||
|
||||||||||||||||
December 31, 2012
|
||||||||||||||||
Obligations of U.S. Government agencies
|
$
|
35,787
|
$
|
1,314
|
$
|
(13
|
)
|
$
|
37,088
|
|||||||
Obligations of state and political subdivisions
|
43,276
|
712
|
(214
|
)
|
43,774
|
|||||||||||
Mortgage-backed securities
|
246,132
|
1,966
|
(743
|
)
|
247,355
|
|||||||||||
Money market investments
|
541
|
0
|
0
|
541
|
||||||||||||
Corporate bonds and other securities
|
700
|
0
|
(2
|
)
|
698
|
|||||||||||
Total
|
$
|
326,436
|
$
|
3,992
|
$
|
(972
|
)
|
$
|
329,456
|
|
June 30, 2013
|
|||||||||||||||||||||||||||
|
Less Than Twelve Months
|
More Than Twelve Months
|
Total
|
|||||||||||||||||||||||||
|
Gross
Unrealized
Losses
|
Fair
Value
|
Gross
Unrealized
Losses
|
Fair
Value
|
Gross
Unrealized
Losses
|
Fair
Value
|
Number
of
Securities
|
|||||||||||||||||||||
|
(in thousands)
|
|||||||||||||||||||||||||||
Securities Available-for-Sale
|
||||||||||||||||||||||||||||
Debt securities:
|
||||||||||||||||||||||||||||
Obligations of U.S. Government agencies
|
$
|
118
|
$
|
4,890
|
$
|
0
|
$
|
0
|
$
|
118
|
$
|
4,890
|
1
|
|||||||||||||||
Obligations of state and political subdivisions
|
2,393
|
37,905
|
0
|
0
|
2,393
|
37,905
|
69
|
|||||||||||||||||||||
Mortgage-backed securities
|
7,613
|
181,843
|
0
|
0
|
7,613
|
181,843
|
19
|
|||||||||||||||||||||
Corporate bonds
|
29
|
1,370
|
0
|
0
|
29
|
1,370
|
11
|
|||||||||||||||||||||
Total securities available-for-sale
|
$
|
10,153
|
$
|
226,008
|
$
|
0
|
$
|
0
|
$
|
10,153
|
$
|
226,008
|
100
|
|||||||||||||||
|
||||||||||||||||||||||||||||
Securities Held-to-Maturity
|
||||||||||||||||||||||||||||
Obligations of U.S. Government agencies
|
$
|
3
|
$
|
97
|
$
|
0
|
$
|
0
|
$
|
3
|
$
|
97
|
1
|
|||||||||||||||
Obligations of state and political subdivisions
|
19
|
857
|
0
|
0
|
19
|
857
|
1
|
|||||||||||||||||||||
Total securities held-to-maturity
|
$
|
22
|
$
|
954
|
$
|
0
|
$
|
0
|
$
|
22
|
$
|
954
|
2
|
|
December 31, 2012
|
|||||||||||||||||||||||||||
|
Less Than Twelve Months
|
More Than Twelve Months
|
Total
|
|||||||||||||||||||||||||
|
Gross
Unrealized
Losses
|
Fair
Value
|
Gross
Unrealized
Losses
|
Fair
Value
|
Gross
Unrealized
Losses
|
Fair
Value
|
Number
of
Securities
|
|||||||||||||||||||||
|
(in thousands)
|
|||||||||||||||||||||||||||
Securities Available-for-Sale
|
||||||||||||||||||||||||||||
Debt securities:
|
||||||||||||||||||||||||||||
Obligations of U. S. Government agencies
|
$
|
13
|
$
|
5,103
|
$
|
0
|
$
|
0
|
$
|
13
|
$
|
5,103
|
1
|
|||||||||||||||
Obligations of state and political subdivisions
|
214
|
9,535
|
0
|
0
|
214
|
9,535
|
24
|
|||||||||||||||||||||
Mortgage-backed securities
|
743
|
104,066
|
0
|
0
|
743
|
104,066
|
9
|
|||||||||||||||||||||
Corporate bonds and other securities
|
2
|
700
|
0
|
0
|
2
|
700
|
2
|
|||||||||||||||||||||
Total securities available-for-sale
|
$
|
972
|
$
|
119,404
|
$
|
0
|
$
|
0
|
$
|
972
|
$
|
119,404
|
36
|
|
June 30,
2013
|
December 31,
2012
|
||||||
|
(in thousands)
|
|||||||
Mortgage loans on real estate:
|
||||||||
Residential 1-4 family
|
$
|
80,553
|
$
|
77,267
|
||||
Commercial
|
273,498
|
274,613
|
||||||
Construction
|
13,493
|
12,005
|
||||||
Second mortgages
|
12,242
|
14,315
|
||||||
Equity lines of credit
|
31,201
|
32,327
|
||||||
Total mortgage loans on real estate
|
410,987
|
410,527
|
||||||
Commercial loans
|
28,687
|
25,341
|
||||||
Consumer loans
|
10,985
|
13,146
|
||||||
Other
|
18,849
|
22,119
|
||||||
Total loans
|
469,508
|
471,133
|
||||||
Less: Allowance for loan losses
|
(7,296
|
)
|
(7,324
|
)
|
||||
Loans, net of allowance and deferred fees
|
$
|
462,212
|
$
|
463,809
|
· | Pass: Loans are of acceptable risk. |
· | Other Assets Especially Mentioned (OAEM): Loans have potential weaknesses that deserve management’s close attention. |
· | Substandard: Loans reflect significant deficiencies due to several adverse trends of a financial, economic or managerial nature. |
· | Doubtful: Loans have all the weaknesses inherent in a substandard loan with added characteristics that make collection or liquidation in full based on currently existing facts, conditions and values highly questionable or improbable. |
· | Loss: Loans have been charged off because they are considered uncollectible and of such little value that their continuance as bankable assets is not warranted. |
Credit Quality Information
As of June 30, 2013
|
||||||||||||||||
(in thousands)
|
||||||||||||||||
|
Pass
|
OAEM
|
Substandard
|
Total
|
||||||||||||
Mortgage loans on real estate:
|
||||||||||||||||
Residential 1-4 family
|
$
|
73,496
|
$
|
1,746
|
$
|
5,311
|
$
|
80,553
|
||||||||
Commercial
|
256,142
|
7,708
|
9,648
|
273,498
|
||||||||||||
Construction
|
10,374
|
239
|
2,880
|
13,493
|
||||||||||||
Second mortgages
|
11,895
|
238
|
109
|
12,242
|
||||||||||||
Equity lines of credit
|
30,598
|
0
|
603
|
31,201
|
||||||||||||
Total mortgage loans on real estate
|
382,505
|
9,931
|
18,551
|
410,987
|
||||||||||||
Commercial loans
|
27,533
|
112
|
1,042
|
28,687
|
||||||||||||
Consumer loans
|
10,956
|
0
|
29
|
10,985
|
||||||||||||
Other
|
18,849
|
0
|
0
|
18,849
|
||||||||||||
Total
|
$
|
439,843
|
$
|
10,043
|
$
|
19,622
|
$
|
469,508
|
Credit Quality Information
As of December 31, 2012
|
||||||||||||||||
(in thousands)
|
||||||||||||||||
|
Pass
|
OAEM
|
Substandard
|
Total
|
||||||||||||
Mortgage loans on real estate:
|
||||||||||||||||
Residential 1-4 family
|
$
|
70,961
|
$
|
1,711
|
$
|
4,595
|
$
|
77,267
|
||||||||
Commercial
|
258,195
|
6,781
|
9,637
|
274,613
|
||||||||||||
Construction
|
8,651
|
254
|
3,100
|
12,005
|
||||||||||||
Second mortgages
|
13,488
|
242
|
585
|
14,315
|
||||||||||||
Equity lines of credit
|
31,704
|
239
|
384
|
32,327
|
||||||||||||
Total mortgage loans on real estate
|
382,999
|
9,227
|
18,301
|
410,527
|
||||||||||||
Commercial loans
|
23,997
|
209
|
1,135
|
25,341
|
||||||||||||
Consumer loans
|
13,042
|
0
|
104
|
13,146
|
||||||||||||
Other
|
22,119
|
0
|
0
|
22,119
|
||||||||||||
Total
|
$
|
442,157
|
$
|
9,436
|
$
|
19,540
|
$
|
471,133
|
Age Analysis of Past Due Loans as of June 30, 2013
|
||||||||||||||||||||||||||||
|
30 - 59
Days Past
Due
|
60 - 89
Days Past
Due
|
90 or More
Days Past
Due
|
Total Past
Due
|
Total
Current
Loans (1)
|
Total
Loans
|
Recorded
Investment
> 90 Days
Past Due
and
Accruing
|
|||||||||||||||||||||
|
(in thousands)
|
|||||||||||||||||||||||||||
Mortgage loans on real estate:
|
||||||||||||||||||||||||||||
Residential 1-4 family
|
$
|
1,752
|
$
|
38
|
$
|
3,306
|
$
|
5,096
|
$
|
75,457
|
$
|
80,553
|
$
|
258
|
||||||||||||||
Commercial
|
0
|
200
|
716
|
916
|
272,582
|
273,498
|
0
|
|||||||||||||||||||||
Construction
|
404
|
0
|
2,880
|
3,284
|
10,209
|
13,493
|
0
|
|||||||||||||||||||||
Second mortgages
|
46
|
35
|
20
|
101
|
12,141
|
12,242
|
20
|
|||||||||||||||||||||
Equity lines of credit
|
175
|
75
|
0
|
250
|
30,951
|
31,201
|
0
|
|||||||||||||||||||||
Total mortgage loans on real estate
|
2,377
|
348
|
6,922
|
9,647
|
401,340
|
410,987
|
278
|
|||||||||||||||||||||
Commercial loans
|
54
|
49
|
0
|
103
|
28,584
|
28,687
|
0
|
|||||||||||||||||||||
Consumer loans
|
80
|
40
|
13
|
133
|
10,852
|
10,985
|
13
|
|||||||||||||||||||||
Other
|
65
|
9
|
5
|
79
|
18,770
|
18,849
|
5
|
|||||||||||||||||||||
Total
|
$
|
2,576
|
$
|
446
|
$
|
6,940
|
$
|
9,962
|
$
|
459,546
|
$
|
469,508
|
$
|
296
|
(1)
|
For purposes of this table, Total Current Loans includes loans that are 1 - 29 days past due.
|
Age Analysis of Past Due Loans as of December 31, 2012
|
||||||||||||||||||||||||||||
|
30 - 59
Days Past
Due
|
60 - 89
Days Past
Due
|
90 or More
Days Past
Due
|
Total Past
Due
|
Total
Current
Loans (1)
|
Total
Loans
|
Recorded
Investment
> 90 Days
Past Due
and
Accruing
|
|||||||||||||||||||||
|
(in thousands)
|
|||||||||||||||||||||||||||
Mortgage loans on real estate:
|
||||||||||||||||||||||||||||
Residential 1-4 family
|
$
|
1,115
|
$
|
0
|
$
|
3,783
|
$
|
4,898
|
$
|
72,369
|
$
|
77,267
|
$
|
348
|
||||||||||||||
Commercial
|
207
|
0
|
724
|
931
|
273,682
|
274,613
|
0
|
|||||||||||||||||||||
Construction
|
140
|
0
|
2,925
|
3,065
|
8,940
|
12,005
|
0
|
|||||||||||||||||||||
Second mortgages
|
113
|
0
|
544
|
657
|
13,658
|
14,315
|
60
|
|||||||||||||||||||||
Equity lines of credit
|
90
|
0
|
287
|
377
|
31,950
|
32,327
|
0
|
|||||||||||||||||||||
Total mortgage loans on real estate
|
1,665
|
0
|
8,263
|
9,928
|
400,599
|
410,527
|
408
|
|||||||||||||||||||||
Commercial loans
|
275
|
13
|
122
|
410
|
24,931
|
25,341
|
25
|
|||||||||||||||||||||
Consumer loans
|
85
|
22
|
11
|
118
|
13,028
|
13,146
|
11
|
|||||||||||||||||||||
Other
|
54
|
7
|
3
|
64
|
22,055
|
22,119
|
3
|
|||||||||||||||||||||
Total
|
$
|
2,079
|
$
|
42
|
$
|
8,399
|
$
|
10,520
|
$
|
460,613
|
$
|
471,133
|
$
|
447
|
(1)
|
For purposes of this table, Total Current Loans includes loans that are 1 - 29 days past due.
|
Nonaccrual Loans by Class
|
||||||||
|
June 30, 2013
|
December 31, 2012
|
||||||
|
(in thousands)
|
|||||||
Mortgage loans on real estate:
|
||||||||
Residential 1-4 family
|
$
|
3,363
|
$
|
3,663
|
||||
Commercial
|
2,965
|
3,037
|
||||||
Construction
|
2,880
|
3,065
|
||||||
Second mortgages
|
35
|
484
|
||||||
Equity lines of credit
|
0
|
286
|
||||||
Total mortgage loans on real estate
|
9,243
|
10,535
|
||||||
Commercial loans
|
0
|
97
|
||||||
Consumer loans
|
0
|
0
|
||||||
Total
|
$
|
9,243
|
$
|
10,632
|
|
Six Months Ended June 30,
|
|||||||
|
2013
|
2012
|
||||||
|
(in thousands)
|
|||||||
Interest income that would have been recorded under original loan terms
|
$
|
275
|
$
|
275
|
||||
Actual interest income recorded for the period
|
51
|
32
|
||||||
Reduction in interest income on nonaccrual loans
|
$
|
224
|
$
|
243
|
Troubled Debt Restructurings by Class
For the Six Months Ended June 30, 2013
|
||||||||||||||||
(dollars in thousands)
|
||||||||||||||||
|
Number of
Modifications
|
Recorded
Investment
Prior to
Modification
|
Recorded
Investment
After
Modification
|
Current
Investment on
June 30, 2013
|
||||||||||||
Mortgage loans on real estate:
|
||||||||||||||||
Residential 1-4 family
|
3
|
$
|
676
|
$
|
676
|
$
|
673
|
|||||||||
Commercial
|
1
|
207
|
207
|
203
|
||||||||||||
Total
|
4
|
$
|
883
|
$
|
883
|
$
|
876
|
Troubled Debt Restructurings by Class
For the Six Months Ended June 30, 2012
|
||||||||||||||||
(dollars in thousands)
|
||||||||||||||||
|
Number of
Modifications
|
Recorded
Investment
Prior to
Modification
|
Recorded
Investment
After
Modification
|
Current
Investment on
June 30, 2012
|
||||||||||||
Mortgage loans on real estate:
|
||||||||||||||||
Commercial
|
2
|
$
|
3,019
|
$
|
2,461
|
$
|
2,373
|
|||||||||
Second mortgages
|
1
|
111
|
145
|
140
|
||||||||||||
Total
|
3
|
$
|
3,130
|
$
|
2,606
|
$
|
2,513
|
Impaired Loans by Class
(in thousands)
|
||||||||||||||||||||||||
|
As of June 30, 2013
|
For the six months ended
June 30, 2013
|
||||||||||||||||||||||
Recorded Investment
|
||||||||||||||||||||||||
|
Unpaid
Principal
Balance
|
Without
Valuation
Allowance
|
With
Valuation
Allowance
|
Associated
Allowance
|
Average
Recorded
Investment
|
Interest
Income
Recognized
|
||||||||||||||||||
Mortgage loans on real estate:
|
||||||||||||||||||||||||
Residential 1-4 family
|
$
|
4,546
|
$
|
872
|
$
|
3,415
|
$
|
237
|
$
|
4,738
|
$
|
16
|
||||||||||||
Commercial
|
13,702
|
3,683
|
7,082
|
1,261
|
10,910
|
269
|
||||||||||||||||||
Construction
|
3,639
|
0
|
2,880
|
360
|
2,891
|
0
|
||||||||||||||||||
Second mortgages
|
183
|
43
|
136
|
47
|
745
|
4
|
||||||||||||||||||
Equity lines of credit
|
50
|
50
|
0
|
0
|
193
|
1
|
||||||||||||||||||
Total mortgage loans on real estate
|
$
|
22,120
|
$
|
4,648
|
$
|
13,513
|
$
|
1,905
|
$
|
19,477
|
$
|
290
|
||||||||||||
Commercial loans
|
0
|
0
|
0
|
0
|
12
|
0
|
||||||||||||||||||
Consumer loans
|
16
|
16
|
0
|
0
|
18
|
1
|
||||||||||||||||||
Total
|
$
|
22,136
|
$
|
4,664
|
$
|
13,513
|
$
|
1,905
|
$
|
19,507
|
$
|
291
|
Impaired Loans by Class
(in thousands)
|
||||||||||||||||||||||||
|
As of December 31, 2012
|
For the year ended
December 31, 2012
|
||||||||||||||||||||||
Recorded Investment
|
||||||||||||||||||||||||
|
Unpaid
Principal
Balance
|
Without
Valuation
Allowance
|
With
Valuation
Allowance
|
Associated
Allowance
|
Average
Recorded
Investment
|
Interest
Income
Recognized
|
||||||||||||||||||
Mortgage loans on real estate:
|
||||||||||||||||||||||||
Residential 1-4 family
|
$
|
4,100
|
$
|
681
|
$
|
3,235
|
$
|
226
|
$
|
2,354
|
$
|
136
|
||||||||||||
Commercial
|
12,459
|
3,741
|
5,817
|
180
|
10,151
|
242
|
||||||||||||||||||
Construction
|
3,782
|
3,064
|
0
|
0
|
3,320
|
(9
|
)
|
|||||||||||||||||
Second mortgages
|
695
|
583
|
47
|
5
|
542
|
12
|
||||||||||||||||||
Equity lines of credit
|
370
|
286
|
0
|
0
|
391
|
(2
|
)
|
|||||||||||||||||
Total mortgage loans on real estate
|
$
|
21,406
|
$
|
8,355
|
$
|
9,099
|
$
|
411
|
$
|
16,758
|
$
|
379
|
||||||||||||
Commercial loans
|
117
|
0
|
97
|
33
|
104
|
(14
|
)
|
|||||||||||||||||
Consumer loans
|
17
|
17
|
0
|
0
|
26
|
1
|
||||||||||||||||||
Total
|
$
|
21,540
|
$
|
8,372
|
$
|
9,196
|
$
|
444
|
$
|
16,888
|
$
|
366
|
· | Commercial: Commercial loans carry risks associated with the successful operation of a business or project, in addition to other risks associated with the ownership of a business. The repayment of these loans may be dependent upon the profitability and cash flows of the business. In addition, there is risk associated with the value of collateral other than real estate which may depreciate over time and cannot be appraised with as much precision. |
· | Real estate-construction: Construction loans carry risks that the project will not be finished according to schedule, the project will not be finished according to budget and the value of the collateral may at any point in time be less than the principal amount of the loan. Construction loans also bear the risk that the general contractor, who may or may not be the loan customer, may be unable to finish the construction project as planned because of financial pressure unrelated to the project. |
· | Real estate-mortgage: Residential mortgage loans and equity lines of credit carry risks associated with the continued credit-worthiness of the borrower and changes in the value of the collateral. Commercial real estate loans carry risks associated with the successful operation of a business if owner occupied. If non-owner occupied, the repayment of these loans may be dependent upon the profitability and cash flow from rent receipts. |
· | Consumer loans: Consumer loans carry risks associated with the continued credit-worthiness of the borrowers and the value of the collateral. Consumer loans are more likely than real estate loans to be immediately adversely affected by job loss, divorce, illness or personal bankruptcy. |
· | Other loans: Other loans are loans to mortgage companies, loans for purchasing or carrying securities, and loans to insurance, investment and finance companies. These loans carry risks associated with the successful operation of a business. In addition, there is risk associated with the value of collateral other than real estate which may depreciate over time, depend on interest rates or fluctuate in active trading markets. |
ALLOWANCE FOR LOAN LOSSES AND RECORDED INVESTMENT IN LOANS
|
||||||||||||||||||||||||
|
(in thousands)
|
|||||||||||||||||||||||
For the Six Months Ended June 30, 2013
|
Commercial
|
Real Estate -
Construction
|
Real Estate -
Mortgage
|
Consumer
|
Other
|
Total
|
||||||||||||||||||
Allowance for Loan Losses:
|
||||||||||||||||||||||||
Balance at the beginning of period
|
$
|
677
|
$
|
187
|
$
|
6,179
|
$
|
204
|
$
|
77
|
$
|
7,324
|
||||||||||||
Charge-offs
|
(106
|
)
|
(100
|
)
|
(413
|
)
|
(66
|
)
|
(79
|
)
|
(764
|
)
|
||||||||||||
Recoveries
|
43
|
3
|
121
|
34
|
35
|
236
|
||||||||||||||||||
Provision for loan losses
|
(339
|
)
|
429
|
421
|
(22
|
)
|
11
|
500
|
||||||||||||||||
Ending balance
|
$
|
275
|
$
|
519
|
$
|
6,308
|
$
|
150
|
$
|
44
|
$
|
7,296
|
||||||||||||
Ending balance individually evaluated for impairment
|
$
|
0
|
$
|
360
|
$
|
1,545
|
$
|
0
|
$
|
0
|
$
|
1,905
|
||||||||||||
Ending balance collectively evaluated for impairment
|
275
|
159
|
4,763
|
150
|
44
|
5,391
|
||||||||||||||||||
Ending balance
|
$
|
275
|
$
|
519
|
$
|
6,308
|
$
|
150
|
$
|
44
|
$
|
7,296
|
||||||||||||
Loan Balances:
|
||||||||||||||||||||||||
Ending balance individually evaluated for impairment
|
$
|
0
|
$
|
2,880
|
$
|
15,281
|
$
|
16
|
$
|
0
|
$
|
18,177
|
||||||||||||
Ending balance collectively evaluated for impairment
|
28,687
|
10,613
|
382,213
|
10,969
|
18,849
|
451,331
|
||||||||||||||||||
Ending balance
|
$
|
28,687
|
$
|
13,493
|
$
|
397,494
|
$
|
10,985
|
$
|
18,849
|
$
|
469,508
|
For the Year Ended
December 31, 2012
|
Commercial
|
Real Estate -
Construction
|
Real Estate -
Mortgage
|
Consumer
|
Other
|
Total
|
||||||||||||||||||
Allowance for Loan Losses:
|
||||||||||||||||||||||||
Balance at the beginning of period
|
$
|
1,011
|
$
|
323
|
$
|
6,735
|
$
|
300
|
$
|
129
|
$
|
8,498
|
||||||||||||
Charge-offs
|
(138
|
)
|
(831
|
)
|
(2,554
|
)
|
(259
|
)
|
(187
|
)
|
(3,969
|
)
|
||||||||||||
Recoveries
|
67
|
30
|
162
|
70
|
66
|
395
|
||||||||||||||||||
Provision for loan losses
|
(263
|
)
|
665
|
1,836
|
93
|
69
|
2,400
|
|||||||||||||||||
Ending balance
|
$
|
677
|
$
|
187
|
$
|
6,179
|
$
|
204
|
$
|
77
|
$
|
7,324
|
||||||||||||
Ending balance individually evaluated for impairment
|
$
|
33
|
$
|
0
|
$
|
411
|
$
|
0
|
$
|
0
|
$
|
444
|
||||||||||||
Ending balance collectively evaluated for impairment
|
644
|
187
|
5,768
|
204
|
77
|
6,880
|
||||||||||||||||||
Ending balance
|
$
|
677
|
$
|
187
|
$
|
6,179
|
$
|
204
|
$
|
77
|
$
|
7,324
|
||||||||||||
Loan Balances:
|
||||||||||||||||||||||||
Ending balance individually evaluated for impairment
|
$
|
97
|
$
|
3,064
|
$
|
14,390
|
$
|
17
|
$
|
0
|
$
|
17,568
|
||||||||||||
Ending balance collectively evaluated for impairment
|
25,244
|
8,941
|
384,132
|
13,129
|
22,119
|
453,565
|
||||||||||||||||||
Ending balance
|
$
|
25,341
|
$
|
12,005
|
$
|
398,522
|
$
|
13,146
|
$
|
22,119
|
$
|
471,133
|
|
Shares
|
Weighted
Average
Exercise
Price
|
Weighted
Average
Remaining
Contractual
Life
(in years)
|
Aggregate
Intrinsic
Value
(in thousands)
|
||||||||||||
Options outstanding, January 1, 2013
|
156,960
|
$
|
21.63
|
|||||||||||||
Granted
|
0
|
0
|
||||||||||||||
Exercised
|
0
|
0
|
||||||||||||||
Canceled or expired
|
(2,500
|
)
|
21.94
|
|||||||||||||
Options outstanding, June 30, 2013
|
154,460
|
$
|
21.63
|
2.96
|
$
|
0
|
||||||||||
Options exercisable, June 30, 2013
|
154,460
|
$
|
21.63
|
2.96
|
$
|
0
|
Three months ended June 30,
|
2013
|
2012
|
||||||
|
Pension Benefits
|
|||||||
Interest cost
|
$
|
62,983
|
$
|
71,750
|
||||
Expected return on plan assets
|
(88,399
|
)
|
(97,500
|
)
|
||||
Amortization of net loss
|
74,524
|
56,250
|
||||||
Net periodic pension plan cost
|
$
|
49,108
|
$
|
30,500
|
||||
|
||||||||
Six months ended June 30,
|
2013
|
2012
|
||||||
|
Pension Benefits
|
|||||||
Interest cost
|
$
|
125,966
|
$
|
143,500
|
||||
Expected return on plan assets
|
(176,798
|
)
|
(195,000
|
)
|
||||
Amortization of net loss
|
149,048
|
112,500
|
||||||
Net periodic pension plan cost
|
$
|
98,216
|
$
|
61,000
|
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
Affected Line Item on
|
||||||||||||||
|
2013
|
2012
|
2013
|
2012
|
Consolidated Statement of Income
|
||||||||||||
|
(in thousands)
|
|
|||||||||||||||
Available-for-sale securities
|
|
||||||||||||||||
Realized gains (losses) on sales of securities
|
$
|
(21
|
)
|
$
|
769
|
$
|
(21
|
)
|
$
|
1,084
|
Gain (loss) on sale of available-for-sale securities, net
|
||||||
Tax effect
|
(7
|
)
|
262
|
(7
|
)
|
369
|
Income tax expense
|
||||||||||
|
$
|
(14
|
)
|
$
|
507
|
$
|
(14
|
)
|
$
|
715
|
Net of tax
|
|
Unrealized
Gains
(Losses) on
Securities
|
Defined
Benefit
Pension
Plans
|
Accumulated
Other
Comprehensive
Loss
|
|||||||||
|
(in thousands)
|
|||||||||||
|
||||||||||||
SIX MONTHS ENDED JUNE 30, 2013
|
||||||||||||
|
||||||||||||
Balance at beginning of period
|
$
|
1,993
|
$
|
(2,184
|
)
|
$
|
(191
|
)
|
||||
Net change for the period
|
(8,223
|
)
|
0
|
(8,223
|
)
|
|||||||
Balance at end of period
|
$
|
(6,230
|
)
|
$
|
(2,184
|
)
|
$
|
(8,414
|
)
|
|
Unrealized
Gains
(Losses) on
Securities
|
Defined
Benefit
Pension
Plans
|
Accumulated
Other
Comprehensive
Loss
|
|||||||||
|
(in thousands)
|
|||||||||||
|
||||||||||||
SIX MONTHS ENDED JUNE 30, 2012
|
||||||||||||
|
||||||||||||
Balance at beginning of period
|
$
|
1,526
|
$
|
(1,875
|
)
|
$
|
(349
|
)
|
||||
Net change for the period
|
249
|
0
|
249
|
|||||||||
Balance at end of period
|
$
|
1,775
|
$
|
(1,875
|
)
|
$
|
(100
|
)
|
|
Six Months Ended June 30, 2013
|
|||||||||||
|
Pretax
|
Tax Expense
(Benefit)
|
Net-of-Tax
|
|||||||||
|
(in thousands)
|
|||||||||||
Unrealized losses on securities
|
||||||||||||
Unrealized holding losses arising during the period
|
$
|
(12,480
|
)
|
$
|
(4,243
|
)
|
$
|
(8,237
|
)
|
|||
Less reclassification adjustment for losses recognized in income
|
(21
|
)
|
(7
|
)
|
(14
|
)
|
||||||
Net unrealized losses on securities
|
(12,459
|
)
|
(4,236
|
)
|
(8,223
|
)
|
||||||
|
||||||||||||
Total decrease in other comprehensive loss
|
$
|
(12,459
|
)
|
$
|
(4,236
|
)
|
$
|
(8,223
|
)
|
|
Six Months Ended June 30, 2012
|
|||||||||||
|
Pretax
|
Tax Expense
(Benefit)
|
Net-of-Tax
|
|||||||||
|
(in thousands)
|
|||||||||||
Unrealized gains on securities
|
||||||||||||
Unrealized holding gains arising during the period
|
$
|
1,461
|
$
|
497
|
$
|
964
|
||||||
Less reclassification adjustment for gains recognized in income
|
1,084
|
369
|
715
|
|||||||||
Net unrealized gains on securities
|
377
|
128
|
249
|
|||||||||
|
||||||||||||
Total increase in other comprehensive loss
|
$
|
377
|
$
|
128
|
$
|
249
|
Level 1 – | Valuation is based on quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 1 assets and liabilities generally include debt and equity securities that are traded in an active exchange market. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities. |
Level 2 – | Valuation is based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. The valuation may be based on quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability. |
Level 3 – | Valuation is based on 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 determination of fair value requires significant management judgment or estimation. |
|
Fair Value Measurements at June 30, 2013 Using
|
|||||||||||||||
|
(in thousands)
|
|||||||||||||||
Description
|
Balance
|
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
|
Significant
Other
Observable
Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||||||
Available-for-sale securities
|
||||||||||||||||
Obligations of U.S. Government agencies
|
$
|
25,805
|
$
|
0
|
$
|
25,805
|
$
|
0
|
||||||||
Obligations of state and political subdivisions
|
48,764
|
0
|
48,764
|
0
|
||||||||||||
Mortgage-backed securities
|
181,843
|
0
|
181,843
|
0
|
||||||||||||
Money market investments
|
801
|
0
|
801
|
0
|
||||||||||||
Corporate bonds
|
1,370
|
0
|
1,370
|
0
|
||||||||||||
Total available-for-sale securities
|
$
|
258,583
|
$
|
0
|
$
|
258,583
|
$
|
0
|
|
Fair Value Measurements at December 31, 2012 Using
|
|||||||||||||||
|
(in thousands)
|
|||||||||||||||
Description
|
Balance
|
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
|
Significant
Other
Observable
Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||||||
Available-for-sale securities
|
||||||||||||||||
Obligations of U.S. Government agencies
|
37,088
|
0
|
37,088
|
0
|
||||||||||||
Obligations of state and political subdivisions
|
43,774
|
0
|
43,774
|
0
|
||||||||||||
Mortgage-backed securities
|
247,355
|
0
|
247,355
|
0
|
||||||||||||
Money market investments
|
541
|
0
|
541
|
0
|
||||||||||||
Corporate bonds
|
698
|
0
|
698
|
0
|
||||||||||||
Total available-for-sale securities
|
$
|
329,456
|
$
|
0
|
$
|
329,456
|
$
|
0
|
|
Carrying Value at June 30, 2013 Using
|
|||||||||||||||
|
(in thousands)
|
|||||||||||||||
|
Fair Value
|
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
|
Significant
Other
Observable
Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||||||
Impaired loans
|
||||||||||||||||
Mortgage loans on real estate:
|
||||||||||||||||
Residential 1-4 family
|
$
|
3,006
|
$
|
0
|
$
|
0
|
$
|
3,006
|
||||||||
Commercial
|
2,776
|
0
|
0
|
2,776
|
||||||||||||
Construction
|
2,520
|
0
|
0
|
2,520
|
||||||||||||
Second mortgages
|
88
|
0
|
0
|
88
|
||||||||||||
Total
|
$
|
8,390
|
$
|
0
|
$
|
0
|
$
|
8,390
|
||||||||
|
||||||||||||||||
Foreclosed assets
|
||||||||||||||||
Residential 1-4 family
|
$
|
521
|
$
|
0
|
$
|
0
|
$
|
521
|
||||||||
Commercial
|
2,286
|
0
|
0
|
2,286
|
||||||||||||
Construction
|
3,752
|
0
|
0
|
3,752
|
||||||||||||
Total
|
$
|
6,559
|
$
|
0
|
$
|
0
|
$
|
6,559
|
|
Carrying Value at December 31, 2012 Using
|
|||||||||||||||
|
(in thousands)
|
|||||||||||||||
Description
|
Fair Value
|
Quoted Prices in
Active Markets for
Identical
Assets
(Level 1)
|
Significant
Other
Observable
Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||||||
Assets:
|
||||||||||||||||
Impaired loans
|
||||||||||||||||
Mortgage loans on real estate:
|
||||||||||||||||
Residential 1-4 family
|
$
|
3,009
|
$
|
0
|
$
|
0
|
$
|
3,009
|
||||||||
Commercial
|
2,271
|
0
|
0
|
2,271
|
||||||||||||
Second mortgages
|
42
|
0
|
0
|
42
|
||||||||||||
Total mortgage loans on real estate
|
$
|
5,322
|
$
|
0
|
$
|
0
|
$
|
5,322
|
||||||||
Commercial loans
|
64
|
0
|
0
|
64
|
||||||||||||
Total
|
$
|
5,386
|
$
|
0
|
$
|
0
|
$
|
5,386
|
||||||||
|
||||||||||||||||
Foreclosed assets
|
||||||||||||||||
Residential 1-4 family
|
$
|
676
|
$
|
0
|
$
|
0
|
$
|
676
|
||||||||
Commercial
|
2,094
|
0
|
0
|
2,094
|
||||||||||||
Construction
|
3,804
|
0
|
0
|
3,804
|
||||||||||||
Total
|
$
|
6,574
|
$
|
0
|
$
|
0
|
$
|
6,574
|
|
Quantitative Information About Level 3 Fair Value Measurements
|
||||||||||
Description
|
Fair Value at
June 30, 2013
(in thousands)
|
Valuation Techniques
|
Unobservable Input
|
Range (Average)
|
|||||||
Impaired loans
|
|
|
|||||||||
Residential 1-4 family real estate
|
3,006
|
Market comparables
|
Selling costs
|
5% - 6% (5%)
|
|||||||
|
|
Liquidation discount
|
1.25%
|
|
|||||||
Commercial real estate
|
2,776
|
Market comparables
|
Selling costs
|
6% - 20% (10%)
|
|||||||
|
|
Age of appraisal
|
46%
|
||||||||
Construction
|
2,520
|
Market comparables
|
Selling costs
|
20%
|
|||||||
|
|
Liquidation discount
|
1.25%
|
||||||||
Second mortgages
|
88
|
Market comparables
|
Selling costs
|
6%
|
|||||||
|
|
Liquidation discount
|
1.25%
|
||||||||
|
|
|
|||||||||
Foreclosed assets
|
|
|
|||||||||
Residential 1-4 family
|
521
|
Market comparables
|
Selling costs
|
6% - 10% (6%)
|
|||||||
Commercial
|
2,286
|
Market comparables
|
Selling costs
|
6% - 10% (6%)
|
|||||||
Construction
|
3,752
|
Market comparables
|
Selling costs
|
6% - 10% (6%)
|
|
Quantitative Information About Level 3 Fair Value Measurements
|
||||||||||
Description
|
Fair Value at
December 31, 2012
(in thousands)
|
Valuation Techniques
|
Unobservable Input
|
Range (Average)
|
|||||||
Impaired loans
|
|
|
|||||||||
Residential 1-4 family real estate
|
3,009
|
Market comparables
|
Differences in comparables
|
0% - 5% (5%)
|
|||||||
|
|
Selling costs
|
4.75% - 6% (6%)
|
||||||||
Commercial real estate
|
2,271
|
Market comparables
|
Selling costs
|
0% - 6% (4%)
|
|||||||
Second mortgages
|
42
|
Market comparables
|
Selling costs
|
6%
|
|||||||
Commercial loans
|
64
|
Market comparables
|
Differences in comparables
|
25%
|
|||||||
|
|
|
|||||||||
|
|
|
|||||||||
Foreclosed assets
|
|
|
|||||||||
Residential 1-4 family
|
676
|
Market comparables
|
Selling costs
|
6% - 10% (6%)
|
|||||||
Commercial
|
2,094
|
Market comparables
|
Selling costs
|
6% - 10% (6%)
|
|||||||
Construction
|
3,804
|
Market comparables
|
Selling costs
|
6% - 10% (6%)
|
|
Fair Value Measurements at June 30, 2013 Using
|
|||||||||||||||
|
(in thousands)
|
|||||||||||||||
|
Carrying Value
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
Significant Other Observable Inputs
(Level 2)
|
Significant Unobservable Inputs
(Level 3)
|
||||||||||||
Assets
|
||||||||||||||||
Cash and cash equivalents
|
$
|
55,171
|
$
|
55,171
|
$
|
0
|
$
|
0
|
||||||||
Securities available-for-sale
|
258,583
|
0
|
258,583
|
0
|
||||||||||||
Securities held-to-maturity
|
11,413
|
0
|
11,403
|
0
|
||||||||||||
Restricted securities
|
2,378
|
0
|
2,378
|
0
|
||||||||||||
Loans, net of allowances for loan losses
|
462,212
|
0
|
0
|
467,676
|
||||||||||||
Bank owned life insurance
|
22,257
|
0
|
22,257
|
0
|
||||||||||||
Accrued interest receivable
|
2,593
|
0
|
2,593
|
0
|
||||||||||||
|
||||||||||||||||
Liabilities
|
||||||||||||||||
Deposits
|
$
|
730,368
|
$
|
0
|
$
|
734,412
|
$
|
0
|
||||||||
Overnight repurchase agreements
|
25,642
|
0
|
25,642
|
0
|
||||||||||||
Term repurchase agreements
|
411
|
0
|
411
|
0
|
||||||||||||
Federal Home Loan Bank advances
|
25,000
|
0
|
27,992
|
0
|
||||||||||||
Accrued interest payable
|
366
|
0
|
366
|
0
|
|
Fair Value Measurements at December 31, 2012 Using
|
|||||||||||||||
|
(in thousands)
|
|||||||||||||||
|
Carrying
Value
|
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
|
Significant
Other
Observable
Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||||||
Assets
|
||||||||||||||||
Cash and cash equivalents
|
$
|
42,317
|
$
|
42,317
|
$
|
0
|
$
|
0
|
||||||||
Securities available-for-sale
|
329,456
|
0
|
329,456
|
0
|
||||||||||||
Securities held-to-maturity
|
570
|
0
|
574
|
0
|
||||||||||||
Restricted securities
|
2,562
|
0
|
2,562
|
0
|
||||||||||||
Loans, net of allowances for loan losses
|
463,809
|
0
|
0
|
466,492
|
||||||||||||
Bank owned life insurance
|
21,824
|
0
|
21,824
|
0
|
||||||||||||
Accrued interest receivable
|
2,420
|
0
|
2,420
|
0
|
||||||||||||
|
||||||||||||||||
Liabilities
|
||||||||||||||||
Deposits
|
$
|
753,816
|
$
|
0
|
$
|
757,923
|
$
|
0
|
||||||||
Overnight repurchase agreements
|
35,946
|
0
|
35,946
|
0
|
||||||||||||
Term repurchase agreements
|
1,280
|
0
|
1,282
|
0
|
||||||||||||
Federal Home Loan Bank advances
|
25,000
|
0
|
28,681
|
0
|
||||||||||||
Accrued interest payable
|
439
|
0
|
439
|
0
|
|
Three Months Ended June 30, 2013
|
|||||||||||||||||||
|
Bank
|
Trust
|
Unconsolidated
Parent
|
Eliminations
|
Consolidated
|
|||||||||||||||
Revenues
|
||||||||||||||||||||
Interest and dividend income
|
$
|
7,466,917
|
$
|
9,933
|
$
|
1,095,279
|
$
|
(1,095,582
|
)
|
$
|
7,476,547
|
|||||||||
Income from fiduciary activities
|
0
|
865,689
|
0
|
0
|
865,689
|
|||||||||||||||
Other income
|
2,299,848
|
133,972
|
50,100
|
(65,376
|
)
|
2,418,544
|
||||||||||||||
Total operating income
|
9,766,765
|
1,009,594
|
1,145,379
|
(1,160,958
|
)
|
10,760,780
|
||||||||||||||
|
||||||||||||||||||||
Expenses
|
||||||||||||||||||||
Interest expense
|
1,177,919
|
0
|
0
|
(303
|
)
|
1,177,616
|
||||||||||||||
Provision for loan losses
|
300,000
|
0
|
0
|
0
|
300,000
|
|||||||||||||||
Salaries and employee benefits
|
4,144,898
|
552,616
|
108,070
|
0
|
4,805,584
|
|||||||||||||||
Other expenses
|
3,018,514
|
226,099
|
63,954
|
(65,376
|
)
|
3,243,191
|
||||||||||||||
Total operating expenses
|
8,641,331
|
778,715
|
172,024
|
(65,679
|
)
|
9,526,391
|
||||||||||||||
|
||||||||||||||||||||
Income before taxes
|
1,125,434
|
230,879
|
973,355
|
(1,095,279
|
)
|
1,234,389
|
||||||||||||||
|
||||||||||||||||||||
Income tax expense (benefit)
|
182,701
|
78,333
|
(41,460
|
)
|
0
|
219,574
|
||||||||||||||
|
||||||||||||||||||||
Net income
|
$
|
942,733
|
$
|
152,546
|
$
|
1,014,815
|
$
|
(1,095,279
|
)
|
$
|
1,014,815
|
|||||||||
|
||||||||||||||||||||
Total assets
|
$
|
862,066,454
|
$
|
5,502,315
|
$
|
82,499,916
|
$
|
(83,187,334
|
)
|
$
|
866,881,351
|
|
Three Months Ended June 30, 2012
|
|||||||||||||||||||
|
Bank
|
Trust
|
Unconsolidated
Parent
|
Eliminations
|
Consolidated
|
|||||||||||||||
Revenues
|
||||||||||||||||||||
Interest and dividend income
|
$
|
8,301,983
|
$
|
9,368
|
$
|
668,104
|
$
|
(667,837
|
)
|
$
|
8,311,618
|
|||||||||
Income from fiduciary activities
|
0
|
793,005
|
0
|
0
|
793,005
|
|||||||||||||||
Other income
|
2,943,305
|
160,014
|
165,000
|
(180,476
|
)
|
3,087,843
|
||||||||||||||
Total operating income
|
11,245,288
|
962,387
|
833,104
|
(848,313
|
)
|
12,192,466
|
||||||||||||||
|
||||||||||||||||||||
Expenses
|
||||||||||||||||||||
Interest expense
|
1,498,747
|
0
|
1,567
|
(1,908
|
)
|
1,498,406
|
||||||||||||||
Provision for loan losses
|
1,000,000
|
0
|
0
|
0
|
1,000,000
|
|||||||||||||||
Salaries and employee benefits
|
4,524,216
|
563,640
|
132,029
|
0
|
5,219,885
|
|||||||||||||||
Other expenses
|
3,602,522
|
239,708
|
65,011
|
(180,476
|
)
|
3,726,765
|
||||||||||||||
Total operating expenses
|
10,625,485
|
803,348
|
198,607
|
(182,384
|
)
|
11,445,056
|
||||||||||||||
|
||||||||||||||||||||
Income before taxes
|
619,803
|
159,039
|
634,497
|
(665,929
|
)
|
747,410
|
||||||||||||||
|
||||||||||||||||||||
Income tax expense (benefit)
|
59,007
|
53,906
|
(3,710
|
)
|
0
|
109,203
|
||||||||||||||
|
||||||||||||||||||||
Net income
|
$
|
560,796
|
$
|
105,133
|
$
|
638,207
|
$
|
(665,929
|
)
|
$
|
638,207
|
|||||||||
|
||||||||||||||||||||
Total assets
|
$
|
868,035,982
|
$
|
5,229,142
|
$
|
87,516,934
|
$
|
(88,463,223
|
)
|
$
|
872,318,835
|
|
Six Months Ended June 30, 2013
|
|||||||||||||||||||
|
Bank
|
Trust
|
Unconsolidated
Parent
|
Eliminations
|
Consolidated
|
|||||||||||||||
Revenues
|
||||||||||||||||||||
Interest and dividend income
|
$
|
15,086,945
|
$
|
19,210
|
$
|
2,056,841
|
$
|
(2,057,533
|
)
|
$
|
15,105,463
|
|||||||||
Income from fiduciary activities
|
0
|
1,765,494
|
0
|
0
|
1,765,494
|
|||||||||||||||
Other income
|
4,417,970
|
244,740
|
100,200
|
(130,902
|
)
|
4,632,008
|
||||||||||||||
Total operating income
|
19,504,915
|
2,029,444
|
2,157,041
|
(2,188,435
|
)
|
21,502,965
|
||||||||||||||
|
||||||||||||||||||||
Expenses
|
||||||||||||||||||||
Interest expense
|
2,432,827
|
0
|
0
|
(692
|
)
|
2,432,135
|
||||||||||||||
Provision for loan losses
|
500,000
|
0
|
0
|
0
|
500,000
|
|||||||||||||||
Salaries and employee benefits
|
8,438,820
|
1,068,666
|
219,024
|
0
|
9,726,510
|
|||||||||||||||
Other expenses
|
6,140,976
|
443,618
|
94,375
|
(130,902
|
)
|
6,548,067
|
||||||||||||||
Total operating expenses
|
17,512,623
|
1,512,284
|
313,399
|
(131,594
|
)
|
19,206,712
|
||||||||||||||
|
||||||||||||||||||||
Income before taxes
|
1,992,292
|
517,160
|
1,843,642
|
(2,056,841
|
)
|
2,296,253
|
||||||||||||||
|
||||||||||||||||||||
Income tax expense (benefit)
|
277,109
|
175,502
|
(72,490
|
)
|
0
|
380,121
|
||||||||||||||
|
||||||||||||||||||||
Net income
|
$
|
1,715,183
|
$
|
341,658
|
$
|
1,916,132
|
$
|
(2,056,841
|
)
|
$
|
1,916,132
|
|||||||||
|
||||||||||||||||||||
Total assets
|
$
|
862,066,454
|
$
|
5,502,315
|
$
|
82,499,916
|
$
|
(83,187,334
|
)
|
$
|
866,881,351
|
|
Six Months Ended June 30, 2012
|
|||||||||||||||||||
|
Bank
|
Trust
|
Unconsolidated
Parent
|
Eliminations
|
Consolidated
|
|||||||||||||||
Revenues
|
||||||||||||||||||||
Interest and dividend income
|
$
|
16,714,277
|
$
|
18,952
|
$
|
1,760,508
|
$
|
(1,759,927
|
)
|
$
|
16,733,810
|
|||||||||
Income from fiduciary activities
|
0
|
1,619,651
|
0
|
0
|
1,619,651
|
|||||||||||||||
Other income
|
5,295,982
|
264,352
|
330,000
|
(361,252
|
)
|
5,529,082
|
||||||||||||||
Total operating income
|
22,010,259
|
1,902,955
|
2,090,508
|
(2,121,179
|
)
|
23,882,543
|
||||||||||||||
|
||||||||||||||||||||
Expenses
|
||||||||||||||||||||
Interest expense
|
3,009,967
|
0
|
3,134
|
(3,769
|
)
|
3,009,332
|
||||||||||||||
Provision for loan losses
|
1,200,000
|
0
|
0
|
0
|
1,200,000
|
|||||||||||||||
Salaries and employee benefits
|
8,812,752
|
1,100,653
|
266,757
|
0
|
10,180,162
|
|||||||||||||||
Other expenses
|
7,088,935
|
485,024
|
103,219
|
(361,252
|
)
|
7,315,926
|
||||||||||||||
Total operating expenses
|
20,111,654
|
1,585,677
|
373,110
|
(365,021
|
)
|
21,705,420
|
||||||||||||||
|
||||||||||||||||||||
Income before taxes
|
1,898,605
|
317,278
|
1,717,398
|
(1,756,158
|
)
|
2,177,123
|
||||||||||||||
|
||||||||||||||||||||
Income tax expense (benefit)
|
352,186
|
107,539
|
890
|
0
|
460,615
|
|||||||||||||||
|
||||||||||||||||||||
Net income
|
$
|
1,546,419
|
$
|
209,739
|
$
|
1,716,508
|
$
|
(1,756,158
|
)
|
$
|
1,716,508
|
|||||||||
|
||||||||||||||||||||
Total assets
|
$
|
868,035,982
|
$
|
5,229,142
|
$
|
87,516,934
|
$
|
(88,463,223
|
)
|
$
|
872,318,835
|
AVERAGE BALANCE SHEETS, NET INTEREST INCOME* AND RATES*
|
||||||||||||||||||||||||
|
For the quarter ended June 30,
|
|||||||||||||||||||||||
|
2013
|
2012
|
||||||||||||||||||||||
|
Average
Balance
|
Interest
Income/
Expense
|
Yield/
Rate**
|
Average
Balance
|
Interest
Income/
Expense
|
Yield/
Rate**
|
||||||||||||||||||
|
(dollars in thousands) | |||||||||||||||||||||||
ASSETS
|
||||||||||||||||||||||||
Loans*
|
$
|
462,256
|
$
|
5,899
|
5.10
|
%
|
$
|
481,072
|
$
|
6,765
|
5.62
|
%
|
||||||||||||
Investment securities:
|
||||||||||||||||||||||||
Taxable
|
265,181
|
1,253
|
1.89
|
%
|
261,492
|
1,380
|
2.11
|
%
|
||||||||||||||||
Tax-exempt*
|
45,720
|
435
|
3.81
|
%
|
21,918
|
224
|
4.09
|
%
|
||||||||||||||||
Total investment securities
|
310,901
|
1,688
|
2.17
|
%
|
283,410
|
1,604
|
2.26
|
%
|
||||||||||||||||
Interest-bearing due from banks
|
28,995
|
19
|
0.26
|
%
|
23,474
|
9
|
0.15
|
%
|
||||||||||||||||
Federal funds sold
|
1,784
|
1
|
0.22
|
%
|
1,732
|
1
|
0.23
|
%
|
||||||||||||||||
Other investments
|
3,411
|
26
|
3.05
|
%
|
4,174
|
24
|
2.30
|
%
|
||||||||||||||||
Total earning assets
|
807,347
|
$
|
7,633
|
3.78
|
%
|
793,862
|
$
|
8,403
|
4.23
|
%
|
||||||||||||||
Allowance for loan losses
|
(7,417
|
)
|
(7,723
|
)
|
||||||||||||||||||||
Other nonearning assets
|
85,479
|
78,764
|
||||||||||||||||||||||
Total assets
|
$
|
885,409
|
$
|
864,903
|
||||||||||||||||||||
|
||||||||||||||||||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||||||||||||||
Time and savings deposits:
|
||||||||||||||||||||||||
Interest-bearing transaction accounts
|
$
|
11,700
|
$
|
1
|
0.03
|
%
|
$
|
11,834
|
$
|
2
|
0.07
|
%
|
||||||||||||
Money market deposit accounts
|
194,811
|
53
|
0.11
|
%
|
176,465
|
79
|
0.18
|
%
|
||||||||||||||||
Savings accounts
|
61,731
|
15
|
0.10
|
%
|
52,924
|
13
|
0.10
|
%
|
||||||||||||||||
Time deposits, $100,000 or more
|
128,465
|
369
|
1.15
|
%
|
127,708
|
415
|
1.30
|
%
|
||||||||||||||||
Other time deposits
|
160,595
|
427
|
1.06
|
%
|
173,708
|
548
|
1.26
|
%
|
||||||||||||||||
Total time and savings deposits
|
557,302
|
865
|
0.62
|
%
|
542,639
|
1,057
|
0.78
|
%
|
||||||||||||||||
Federal funds purchased, repurchase agreements and other borrowings
|
30,860
|
7
|
0.09
|
%
|
30,339
|
16
|
0.21
|
%
|
||||||||||||||||
Federal Home Loan Bank advances
|
25,000
|
305
|
4.88
|
%
|
35,000
|
425
|
4.86
|
%
|
||||||||||||||||
Total interest-bearing liabilities
|
613,162
|
1,177
|
0.77
|
%
|
607,978
|
1,498
|
0.99
|
%
|
||||||||||||||||
Demand deposits
|
180,838
|
167,452
|
||||||||||||||||||||||
Other liabilities
|
3,095
|
2,149
|
||||||||||||||||||||||
Stockholders' equity
|
88,314
|
87,324
|
||||||||||||||||||||||
Total liabilities and stockholders' equity
|
$
|
885,409
|
$
|
864,903
|
||||||||||||||||||||
Net interest margin
|
$
|
6,456
|
3.20
|
%
|
$
|
6,905
|
3.48
|
%
|
*
|
Computed on a fully tax-equivalent basis using a 34% rate
|
**
|
Annualized
|
|
For the six months ended June 30,
|
|||||||||||||||||||||||
|
2013
|
2012
|
||||||||||||||||||||||
|
Average
Balance
|
Interest
Income/
Expense
|
Yield/
Rate**
|
Average
Balance
|
Interest
Income/
Expense
|
Yield/
Rate**
|
||||||||||||||||||
|
(dollars in thousands) | |||||||||||||||||||||||
ASSETS
|
||||||||||||||||||||||||
Loans*
|
$
|
462,759
|
$
|
11,916
|
5.15
|
%
|
$
|
488,346
|
$
|
13,855
|
5.67
|
%
|
||||||||||||
Investment securities:
|
||||||||||||||||||||||||
Taxable
|
275,152
|
2,577
|
1.87
|
%
|
246,091
|
2,601
|
2.11
|
%
|
||||||||||||||||
Tax-exempt*
|
42,919
|
836
|
3.90
|
%
|
17,923
|
367
|
4.10
|
%
|
||||||||||||||||
Total investment securities
|
318,071
|
3,413
|
2.15
|
%
|
264,014
|
2,968
|
2.25
|
%
|
||||||||||||||||
Interest-bearing due from banks
|
26,467
|
33
|
0.25
|
%
|
27,382
|
26
|
0.19
|
%
|
||||||||||||||||
Federal funds sold
|
1,857
|
1
|
0.11
|
%
|
1,843
|
1
|
0.11
|
%
|
||||||||||||||||
Other investments
|
3,492
|
44
|
2.52
|
%
|
4,273
|
45
|
2.11
|
%
|
||||||||||||||||
Total earning assets
|
812,646
|
$
|
15,407
|
3.79
|
%
|
785,858
|
$
|
16,895
|
4.30
|
%
|
||||||||||||||
Allowance for loan losses
|
(7,414
|
)
|
(8,159
|
)
|
||||||||||||||||||||
Other nonearning assets
|
84,136
|
79,787
|
||||||||||||||||||||||
Total assets
|
$
|
889,368
|
$
|
857,486
|
||||||||||||||||||||
|
||||||||||||||||||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||||||||||||||
Time and savings deposits:
|
||||||||||||||||||||||||
Interest-bearing transaction accounts
|
$
|
11,370
|
$
|
3
|
0.05
|
%
|
$
|
11,498
|
$
|
4
|
0.07
|
%
|
||||||||||||
Money market deposit accounts
|
194,956
|
124
|
0.13
|
%
|
174,434
|
158
|
0.18
|
%
|
||||||||||||||||
Savings accounts
|
59,885
|
29
|
0.10
|
%
|
52,010
|
26
|
0.10
|
%
|
||||||||||||||||
Time deposits, $100,000 or more
|
131,712
|
765
|
1.16
|
%
|
126,551
|
830
|
1.31
|
%
|
||||||||||||||||
Other time deposits
|
164,847
|
885
|
1.07
|
%
|
172,205
|
1,109
|
1.29
|
%
|
||||||||||||||||
Total time and savings deposits
|
562,770
|
1,806
|
0.64
|
%
|
536,698
|
2,127
|
0.79
|
%
|
||||||||||||||||
Federal funds purchased, repurchase agreements and other borrowings
|
31,628
|
19
|
0.12
|
%
|
31,551
|
32
|
0.20
|
%
|
||||||||||||||||
Federal Home Loan Bank advances
|
25,000
|
607
|
4.86
|
%
|
35,000
|
850
|
4.86
|
%
|
||||||||||||||||
Total interest-bearing liabilities
|
619,398
|
2,432
|
0.79
|
%
|
603,249
|
3,009
|
1.00
|
%
|
||||||||||||||||
Demand deposits
|
178,556
|
165,373
|
||||||||||||||||||||||
Other liabilities
|
2,993
|
2,023
|
||||||||||||||||||||||
Stockholders' equity
|
88,421
|
86,841
|
||||||||||||||||||||||
Total liabilities and stockholders' equity
|
$
|
889,368
|
$
|
857,486
|
||||||||||||||||||||
Net interest margin
|
$
|
12,975
|
3.19
|
%
|
$
|
13,886
|
3.53
|
%
|
*
|
Computed on a fully tax-equivalent basis using a 34% rate
|
**
|
Annualized
|
NONPERFORMING ASSETS
|
||||||||||||
|
June 30,
2013
|
December 31,
2012
|
Increase
(Decrease)
|
|||||||||
|
(in thousands)
|
|||||||||||
Nonaccrual loans
|
||||||||||||
Commercial
|
$
|
0
|
$
|
97
|
$
|
(97
|
)
|
|||||
Real estate-construction
|
2,880
|
3,065
|
(185
|
)
|
||||||||
Real estate-mortgage (1)
|
6,363
|
7,470
|
(1,107
|
)
|
||||||||
Total nonaccrual loans
|
$
|
9,243
|
$
|
10,632
|
$
|
(1,389
|
)
|
|||||
Loans past due 90 days or more and accruing interest
|
||||||||||||
Commercial
|
$
|
0
|
$
|
25
|
$
|
(25
|
)
|
|||||
Real estate-mortgage (1)
|
278
|
408
|
(130
|
)
|
||||||||
Consumer loans
|
13
|
11
|
2
|
|||||||||
Other
|
5
|
3
|
2
|
|||||||||
Total loans past due 90 days or more and accruing interest
|
$
|
296
|
$
|
447
|
$
|
(151
|
)
|
|||||
Restructured loans
|
||||||||||||
Real estate-mortgage (1)
|
$
|
9,577
|
$
|
8,810
|
$
|
767
|
||||||
Consumer loans
|
16
|
16
|
0
|
|||||||||
Total restructured loans
|
$
|
9,593
|
$
|
8,826
|
$
|
767
|
||||||
Less nonaccrual restructured loans (included above)
|
1,843
|
1,908
|
(65
|
)
|
||||||||
Less restructured loans currently in compliance (2)
|
7,750
|
6,918
|
832
|
|||||||||
Net nonperforming, accruing restructured loans
|
$
|
0
|
$
|
0
|
$
|
0
|
||||||
|
||||||||||||
Foreclosed assets
|
||||||||||||
Construction, land development, and other land
|
$
|
3,752
|
3,804
|
$
|
(52
|
)
|
||||||
1-4 family residential properties
|
521
|
676
|
(155
|
)
|
||||||||
Nonfarm nonresidential properties
|
1,780
|
2,094
|
(314
|
)
|
||||||||
Former branch site
|
506
|
0
|
506
|
|||||||||
|
$
|
6,559
|
$
|
6,574
|
$
|
(15
|
)
|
|||||
|
||||||||||||
Total nonperforming assets
|
$
|
16,098
|
$
|
17,653
|
$
|
(1,555
|
)
|
1. | Specific identification (regardless of risk rating) |
2. | Pool–substandard |
3. | Pool–other assets especially mentioned (rated just above substandard) |
4. | Pool–pass loans (all other loans) |
Loans Secured by 1 - 4 Family First Mortgages,
1 - 4 Family Open-end and 1 - 4 Family Junior Liens
As of June 30, 2013
(dollars in thousands)
|
||||||||
|
||||||||
|
Amount
|
Percent
|
||||||
Subprime
|
$
|
18,717
|
17.88
|
%
|
||||
Non-subprime
|
85,951
|
82.12
|
%
|
|||||
|
$
|
104,668
|
100.00
|
%
|
||||
|
||||||||
Total loans
|
$
|
469,508
|
||||||
Percentage of Real Estate-Secured Subprime Loans to Total Loans
|
3.99
|
%
|
2013
|
|
|
Regulatory
|
June 30, 2013
|
|
Minimums
|
|
|
Tier 1 Leverage
|
4.00%
|
10.27%
|
Tier 1
|
4.00%
|
15.27%
|
Total Capital
|
8.00%
|
16.50%
|
Exhibit No.
|
|
Description
|
3.1
|
|
Articles of Incorporation of Old Point Financial Corporation, as amended effective June 22, 2000 (incorporated by reference to Exhibit 3.1 to Form 10-K filed March 12, 2009)
|
|
|
|
3.2
|
|
Bylaws of Old Point Financial Corporation, as amended and restated March 8, 2011 (incorporated by reference to Exhibit 3.2 to Form 8-K filed March 10, 2011)
|
|
|
|
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
101
|
|
The following materials from Old Point Financial Corporation’s quarterly report on Form 10-Q for the quarter ended June 30, 2013, formatted in XBRL (Extensible Business Reporting Language), furnished herewith: (i) Consolidated Balance Sheets (unaudited for March 31, 2013), (ii) Consolidated Statements of Income (unaudited), (iii) Consolidated Statements of Comprehensive Income (unaudited), (iv) Consolidated Statements of Changes in Stockholders’ Equity (unaudited), (v) Consolidated Statements of Cash Flows (unaudited), and (vi) Notes to Consolidated Financial Statements (unaudited)
|
|
|
OLD POINT FINANCIAL CORPORATION
|
|
|
|
|
|
August 9, 2013
|
|
/s/Robert F. Shuford, Sr.
|
|
|
|
Robert F. Shuford, Sr.
|
|
|
|
Chairman, President & Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
August 9, 2013
|
|
/s/Laurie D. Grabow
|
|
|
|
Laurie D. Grabow
|
|
|
|
Chief Financial Officer & Senior Vice President/Finance
|
|
|
|
(Principal Financial & Accounting Officer)
|
|
Date: August 9, 2013
|
|
|
|
|
|
|
/s/Robert F. Shuford, Sr.
|
|
|
Robert F. Shuford, Sr.
|
|
|
Chairman, President & 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 as of and for the periods covered in the Report.
|
/s/Robert F. Shuford, Sr.
|
|
Robert F. Shuford, Sr.
|
|
Chairman, President & Chief Executive Officer
|
|
|
|
August 9, 2013
|
|
|
|
/s/Laurie D. Grabow
|
|
Laurie D. Grabow
|
|
Chief Financial Officer & Senior Vice President/Finance
|
|
|
|
August 9, 2013
|
|
Date: August 9, 2013
|
|
|
|
|
|
|
/s/Laurie D. Grabow
|
|
|
Laurie D. Grabow
|
|
|
Chief Financial Officer & Senior Vice President/Finance
|
Segment Reporting
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting | Note 9. Segment Reporting The Company operates in a decentralized fashion in three principal business segments: The Old Point National Bank of Phoebus (the Bank), Old Point Trust & Financial Services, N. A. (Trust), and the Company as a separate segment (for purposes of this Note, the Parent). Revenues from the Bank’s operations consist primarily of interest earned on loans and investment securities and service charges on deposit accounts. Trust’s operating revenues consist principally of income from fiduciary activities. The Parent’s revenues are mainly interest and dividends received from the Bank and Trust companies. The Company has no other segments. The Company’s reportable segments are strategic business units that offer different products and services. They are managed separately because each segment appeals to different markets and, accordingly, requires different technologies and marketing strategies. Information about reportable segments, and reconciliation of such information to the consolidated financial statements as of and for the three and six months ended June 30, 2013 and 2012 follows:
The accounting policies of the segments are the same as those described in the summary of significant accounting policies reported in the Company’s 2012 annual report on Form 10-K. The Company evaluates performance based on profit or loss from operations before income taxes, not including nonrecurring gains or losses. Both the Parent and the Trust companies maintain deposit accounts with the Bank, on terms substantially similar to those available to other customers. These transactions are eliminated to reach consolidated totals. |
Consolidated Statements of Income (unaudited) (USD $)
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3 Months Ended | 6 Months Ended | ||
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Interest and Dividend Income: | ||||
Interest and fees on loans | $ 5,891,576 | $ 6,749,689 | $ 11,899,269 | $ 13,818,466 |
Interest on due from banks | 18,782 | 10,008 | 32,807 | 26,280 |
Interest on federal funds sold | 291 | 460 | 751 | 763 |
Interest on securities: | ||||
Taxable | 1,252,486 | 1,379,414 | 2,576,536 | 2,600,900 |
Tax-exempt | 287,389 | 148,232 | 551,982 | 242,209 |
Dividends and interest on all other securities | 26,023 | 23,815 | 44,118 | 45,192 |
Total interest and dividend income | 7,476,547 | 8,311,618 | 15,105,463 | 16,733,810 |
Interest Expense: | ||||
Interest on savings deposits | 68,669 | 94,184 | 155,855 | 188,239 |
Interest on time deposits | 795,843 | 963,549 | 1,649,735 | 1,938,978 |
Interest on federal funds purchased, securities sold under agreements to repurchase and other borrowings | 7,875 | 15,627 | 19,441 | 32,023 |
Interest on Federal Home Loan Bank advances | 305,229 | 425,046 | 607,104 | 850,092 |
Total interest expense | 1,177,616 | 1,498,406 | 2,432,135 | 3,009,332 |
Net interest income | 6,298,931 | 6,813,212 | 12,673,328 | 13,724,478 |
Provision for loan losses | 300,000 | 1,000,000 | 500,000 | 1,200,000 |
Net interest income, after provision for loan losses | 5,998,931 | 5,813,212 | 12,173,328 | 12,524,478 |
Noninterest Income: | ||||
Income from fiduciary activities | 865,689 | 793,005 | 1,765,494 | 1,619,651 |
Service charges on deposit accounts | 1,036,265 | 1,073,004 | 2,032,865 | 2,103,309 |
Other service charges, commissions and fees | 911,619 | 880,032 | 1,770,590 | 1,677,061 |
Income from bank-owned life insurance | 216,519 | 225,201 | 431,826 | 448,881 |
Income from Old Point Mortgage | 217,799 | 94,311 | 304,324 | 125,298 |
Gain (loss) on sale of available-for-sale securities, net | (20,532) | 769,474 | (20,532) | 1,083,869 |
Other operating income | 56,874 | 45,821 | 112,935 | 90,664 |
Total noninterest income | 3,284,233 | 3,880,848 | 6,397,502 | 7,148,733 |
Noninterest Expense: | ||||
Salaries and employee benefits | 4,805,584 | 5,219,885 | 9,726,510 | 10,180,162 |
Occupancy and equipment | 1,078,684 | 1,069,180 | 2,190,883 | 2,162,933 |
Data processing | 412,884 | 391,376 | 834,460 | 773,903 |
FDIC insurance | 173,914 | 286,314 | 356,975 | 567,152 |
Customer development | 205,372 | 202,992 | 411,478 | 406,888 |
Legal and audit expense | 123,537 | 224,182 | 234,661 | 408,112 |
Other outside service fees | 112,510 | 140,981 | 208,888 | 293,367 |
Employee professional development | 181,367 | 187,643 | 312,781 | 329,984 |
Postage and courier expense | 120,166 | 118,984 | 243,031 | 243,311 |
Advertising | 124,320 | 146,594 | 247,370 | 291,612 |
Stationery and supplies | 95,414 | 113,304 | 215,723 | 217,839 |
Loss on write-down/sale of foreclosed assets | 77,223 | 380,050 | 203,676 | 636,634 |
Other operating expense | 537,800 | 465,165 | 1,088,141 | 984,191 |
Total noninterest expense | 8,048,775 | 8,946,650 | 16,274,577 | 17,496,088 |
Income before income taxes | 1,234,389 | 747,410 | 2,296,253 | 2,177,123 |
Income tax expense | 219,574 | 109,203 | 380,121 | 460,615 |
Net income | $ 1,014,815 | $ 638,207 | $ 1,916,132 | $ 1,716,508 |
Basic Earnings per Share: | ||||
Average shares outstanding (in shares) | 4,959,009 | 4,959,009 | 4,959,009 | 4,959,009 |
Net income per share of common stock (in dollars per share) | $ 0.21 | $ 0.13 | $ 0.39 | $ 0.35 |
Diluted Earnings per Share: | ||||
Average shares outstanding (in shares) | 4,959,009 | 4,959,009 | 4,959,009 | 4,959,009 |
Net income per share of common stock (in dollars per share) | $ 0.21 | $ 0.13 | $ 0.39 | $ 0.35 |
Securities
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Jun. 30, 2013
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Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Securities | Note 2. Securities Amortized costs and fair values of securities held-to-maturity as of the dates indicated are as follows:
Amortized costs and fair values of securities available-for-sale as of the dates indicated are as follows:
OTHER-THAN-TEMPORARILY IMPAIRED SECURITIES Management assesses whether the Company intends to sell or it is more-likely-than-not that the Company will be required to sell a security before recovery of its amortized cost basis less any current-period credit losses. For debt securities that are considered other-than-temporarily impaired and that the Company does not intend to sell and will not be required to sell prior to recovery of the amortized cost basis, the Company separates the amount of the impairment into the amount that is credit related (credit loss component) and the amount due to all other factors. The credit loss component is recognized in earnings and is the difference between the security’s amortized cost basis and the present value of its expected future cash flows. The remaining difference between the security’s fair value and the present value of future expected cash flows is due to factors that are not credit related and is recognized in other comprehensive income. The present value of expected future cash flows is determined using the best-estimate cash flows discounted at the effective interest rate implicit to the security at the date of purchase or the current yield to accrete an asset-backed or floating rate security. The methodology and assumptions for establishing the best-estimate cash flows vary depending on the type of security. The asset-backed securities cash flow estimates are based on bond specific facts and circumstances that may include collateral characteristics, expectations of delinquency and default rates, loss severity and prepayment speeds, and structural support, including subordination and guarantees. The Company has a process in place to identify debt securities that could potentially have a credit or interest-rate related impairment that is other-than-temporary. This process involves monitoring late payments, pricing levels, downgrades by rating agencies, key financial ratios, financial statements, revenue forecasts, and cash flow projections as indicators of credit issues. On a quarterly basis, management reviews all securities to determine whether an other-than-temporary decline in value exists and whether losses should be recognized. Management considers relevant facts and circumstances in evaluating whether a credit or interest rate-related impairment of a security is other-than-temporary. Relevant facts and circumstances considered include: (a) the extent and length of time the fair value has been below cost; (b) the reasons for the decline in value; (c) the financial position and access to capital of the issuer, including the current and future impact of any specific events; and (d) for fixed maturity securities, the Company’s intent to sell a security or whether it is more-likely-than-not the Company will be required to sell the security before the recovery of its amortized cost which, in some cases, may extend to maturity and for equity securities, the Company’s ability and intent to hold the security for a period of time that allows for the recovery in value. The Company has not recorded impairment charges through income on securities for the three or six months ended June 30, 2013 or the year ended December 31, 2012. TEMPORARILY IMPAIRED SECURITIES The following table shows the gross unrealized losses and fair value of the Company’s investments with unrealized losses that are deemed to be temporarily impaired, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of the dates indicated. The Company had no held-to-maturity securities with unrealized losses at December 31, 2012.
Certain investments within the Company’s portfolio had unrealized losses at June 30, 2013 and December 31, 2012, as shown in the tables above. The unrealized losses were caused by increases in market interest rates. Because the Company does not intend to sell the investments and management believes it is unlikely that the Company will be required to sell the investments before recovery of their amortized cost basis, which may be maturity, the Company does not consider the investments to be other-than-temporarily impaired at June 30, 2013 or December 31, 2012. Restricted Securities The restricted security category is comprised of stock in the Federal Home Loan Bank of Atlanta (FHLB) and the Federal Reserve Bank (FRB). These stocks are classified as restricted securities because their ownership is restricted to certain types of entities and the securities lack a market. Therefore, FHLB and FRB stock is carried at cost and evaluated for impairment. When evaluating these stocks for impairment, their value is determined based on the ultimate recoverability of the par value rather than by recognizing temporary declines in value. Restricted stock is viewed as a long-term investment and management believes that the Company has the ability and the intent to hold this stock until its value is recovered. |
Fair Value Measurements (Tables)
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Jun. 30, 2013
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Fair Value Measurements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets measured at fair value on a recurring basis | The following table presents the balances of certain assets measured at fair value on a recurring basis as of the dates indicated:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets measured at fair value on a nonrecurring basis | The following table presents the assets carried on the consolidated balance sheets for which a nonrecurring change in fair value has been recorded. Assets are shown by class of loan and by level in the fair value hierarchy, as of the dates indicated. Certain impaired loans are valued by the present value of the loan’s expected future cash flows, discounted at the interest rate of the loan rather than at a market rate. These loans are not carried on the consolidated balance sheets at fair value and, as such, are not included in the table below.
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Fair Value Inputs, Assets, Quantitative Information | The following table displays quantitative information about Level 3 Fair Value Measurements as of the date indicated (dollars in thousands):
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||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Estimated fair values and related carrying or notional amounts of financial instruments | The estimated fair values, and related carrying or notional amounts, of the Company's financial instruments as of the dates indicated are as follows:
|
Commitments and Contingencies
|
6 Months Ended |
---|---|
Jun. 30, 2013
|
|
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | Note 10. Commitments and Contingencies There have been no material changes in the Company’s commitments and contingencies from those disclosed in the Company’s 2012 annual report on Form 10-K. For a discussion of the Company’s branch office expansion, see Note 1 of the Notes to the Consolidated Financial Statements included in this quarterly report on Form 10-Q. |
Fair Value Measurements (Details) (USD $)
In Thousands, unless otherwise specified |
6 Months Ended | 6 Months Ended | 12 Months Ended | 6 Months Ended | 12 Months Ended | 6 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | 6 Months Ended | 3 Months Ended | 12 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
Dec. 31, 2012
|
Jun. 30, 2013
Carrying Value [Member]
|
Dec. 31, 2012
Carrying Value [Member]
|
Jun. 30, 2013
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
|
Dec. 31, 2012
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
|
Jun. 30, 2013
Significant Other Observable Inputs (Level 2) [Member]
|
Dec. 31, 2012
Significant Other Observable Inputs (Level 2) [Member]
|
Jun. 30, 2013
Significant Unobservable Inputs (Level 3) [Member]
|
Dec. 31, 2012
Significant Unobservable Inputs (Level 3) [Member]
|
Jun. 30, 2013
Impaired Loans, Residential 1-4 Family Real Estate [Member]
Market Comparables [Member]
|
Dec. 31, 2012
Impaired Loans, Residential 1-4 Family Real Estate [Member]
Market Comparables [Member]
|
Jun. 30, 2013
Impaired Loans, Residential 1-4 Family Real Estate [Member]
Market Comparables [Member]
Minimum [Member]
|
Dec. 31, 2012
Impaired Loans, Residential 1-4 Family Real Estate [Member]
Market Comparables [Member]
Minimum [Member]
|
Jun. 30, 2013
Impaired Loans, Residential 1-4 Family Real Estate [Member]
Market Comparables [Member]
Maximum [Member]
|
Dec. 31, 2012
Impaired Loans, Residential 1-4 Family Real Estate [Member]
Market Comparables [Member]
Maximum [Member]
|
Jun. 30, 2013
Impaired Loans, Residential 1-4 Family Real Estate [Member]
Market Comparables [Member]
Average [Member]
|
Dec. 31, 2012
Impaired Loans, Residential 1-4 Family Real Estate [Member]
Market Comparables [Member]
Average [Member]
|
Jun. 30, 2013
Impaired Loans, Commercial Real Estate [Member]
Market Comparables [Member]
|
Dec. 31, 2012
Impaired Loans, Commercial Real Estate [Member]
Market Comparables [Member]
|
Jun. 30, 2013
Impaired Loans, Commercial Real Estate [Member]
Market Comparables [Member]
Minimum [Member]
|
Dec. 31, 2012
Impaired Loans, Commercial Real Estate [Member]
Market Comparables [Member]
Minimum [Member]
|
Jun. 30, 2013
Impaired Loans, Commercial Real Estate [Member]
Market Comparables [Member]
Maximum [Member]
|
Dec. 31, 2012
Impaired Loans, Commercial Real Estate [Member]
Market Comparables [Member]
Maximum [Member]
|
Jun. 30, 2013
Impaired Loans, Commercial Real Estate [Member]
Market Comparables [Member]
Average [Member]
|
Dec. 31, 2012
Impaired Loans, Commercial Real Estate [Member]
Market Comparables [Member]
Average [Member]
|
Jun. 30, 2013
Impaired Loans, Construction Loans [Member]
Market Comparables [Member]
|
Jun. 30, 2013
Impaired Loans, Second Mortgages [Member]
Market Comparables [Member]
|
Dec. 31, 2012
Impaired Loans, Second Mortgages [Member]
Market Comparables [Member]
|
Jun. 30, 2013
Impaired Loans, Second Mortgages [Member]
Market Comparables [Member]
Maximum [Member]
|
Dec. 31, 2012
Impaired Loans, Second Mortgages [Member]
Market Comparables [Member]
Maximum [Member]
|
Dec. 31, 2012
Impaired Loans, Commercial Loans [Member]
Market Comparables [Member]
|
Dec. 31, 2012
Impaired Loans, Commercial Loans [Member]
Market Comparables [Member]
Maximum [Member]
|
Jun. 30, 2013
Foreclosed Assets, Residential 1-4 Family [Member]
Market Comparables [Member]
|
Dec. 31, 2012
Foreclosed Assets, Residential 1-4 Family [Member]
Market Comparables [Member]
|
Jun. 30, 2013
Foreclosed Assets, Residential 1-4 Family [Member]
Market Comparables [Member]
Minimum [Member]
|
Dec. 31, 2012
Foreclosed Assets, Residential 1-4 Family [Member]
Market Comparables [Member]
Minimum [Member]
|
Jun. 30, 2013
Foreclosed Assets, Residential 1-4 Family [Member]
Market Comparables [Member]
Maximum [Member]
|
Dec. 31, 2012
Foreclosed Assets, Residential 1-4 Family [Member]
Market Comparables [Member]
Maximum [Member]
|
Jun. 30, 2013
Foreclosed Assets, Residential 1-4 Family [Member]
Market Comparables [Member]
Average [Member]
|
Dec. 31, 2012
Foreclosed Assets, Residential 1-4 Family [Member]
Market Comparables [Member]
Average [Member]
|
Jun. 30, 2013
Foreclosed Assets, Commercial [Member]
Market Comparables [Member]
|
Dec. 31, 2012
Foreclosed Assets, Commercial [Member]
Market Comparables [Member]
|
Jun. 30, 2013
Foreclosed Assets, Commercial [Member]
Market Comparables [Member]
Minimum [Member]
|
Dec. 31, 2012
Foreclosed Assets, Commercial [Member]
Market Comparables [Member]
Minimum [Member]
|
Jun. 30, 2013
Foreclosed Assets, Commercial [Member]
Market Comparables [Member]
Maximum [Member]
|
Dec. 31, 2012
Foreclosed Assets, Commercial [Member]
Market Comparables [Member]
Maximum [Member]
|
Jun. 30, 2013
Foreclosed Assets, Commercial [Member]
Market Comparables [Member]
Average [Member]
|
Dec. 31, 2012
Foreclosed Assets, Commercial [Member]
Market Comparables [Member]
Average [Member]
|
Jun. 30, 2013
Foreclosed Assets, Construction [Member]
Market Comparables [Member]
|
Dec. 31, 2012
Foreclosed Assets, Construction [Member]
Market Comparables [Member]
|
Jun. 30, 2013
Foreclosed Assets, Construction [Member]
Market Comparables [Member]
Minimum [Member]
|
Dec. 31, 2012
Foreclosed Assets, Construction [Member]
Market Comparables [Member]
Minimum [Member]
|
Jun. 30, 2013
Foreclosed Assets, Construction [Member]
Market Comparables [Member]
Maximum [Member]
|
Dec. 31, 2012
Foreclosed Assets, Construction [Member]
Market Comparables [Member]
Maximum [Member]
|
Jun. 30, 2013
Foreclosed Assets, Construction [Member]
Market Comparables [Member]
Average [Member]
|
Dec. 31, 2012
Foreclosed Assets, Construction [Member]
Market Comparables [Member]
Average [Member]
|
|
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value | $ 3,006 | $ 3,009 | $ 2,776 | $ 2,271 | $ 88 | $ 42 | $ 64 | $ 521 | $ 676 | $ 2,286 | $ 2,094 | $ 3,752 | $ 3,804 | ||||||||||||||||||||||||||||||||||||||||||||
Selling costs (in hundredths) | 5.00% | 4.75% | 6.00% | 6.00% | 5.00% | 6.00% | 6.00% | 0.00% | 20.00% | 6.00% | 10.00% | 4.00% | 20.00% | 6.00% | 6.00% | 6.00% | 6.00% | 10.00% | 10.00% | 6.00% | 6.00% | 6.00% | 6.00% | 10.00% | 10.00% | 6.00% | 6.00% | 6.00% | 6.00% | 10.00% | 10.00% | 6.00% | 6.00% | ||||||||||||||||||||||||
Age of appraisal (in hundredths) | 46.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Liquidation discount | 1.25% | 1.25% | 1.25% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Difference in comparables (in hundredths) | 0.00% | 5.00% | 5.00% | 25.00% | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash and Cash Equivalents | 55,171 | 42,317 | 55,171 | 42,317 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||
Securities available-for-sale | 258,583 | 329,456 | 258,583 | 329,456 | 0 | 0 | 258,583 | 329,456 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||
Securities held-to-maturity | 11,403 | 11,413 | 570 | 0 | 0 | 11,403 | 574 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||
Restricted securities | 2,378 | 2,562 | 0 | 0 | 2,378 | 2,562 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||
Loans, net of allowances for loan losses | 462,212 | 463,809 | 0 | 0 | 0 | 0 | 467,676 | 466,492 | |||||||||||||||||||||||||||||||||||||||||||||||||
Bank owned life insurance | 22,257 | 21,824 | 0 | 0 | 22,257 | 21,824 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Interest Receivable | 2,593 | 2,420 | 0 | 0 | 2,593 | 2,420 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||
Financial liabilities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deposits | 730,368 | 753,816 | 0 | 0 | 734,412 | 757,923 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||
Overnight repurchase agreements | 25,642 | 35,946 | 0 | 0 | 25,642 | 35,946 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||
Term repurchase agreements | 411 | 1,280 | 0 | 0 | 411 | 1,282 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||
Federal Home Loan Bank advances | 25,000 | 25,000 | 0 | 0 | 27,992 | 28,681 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||
Accrued interest payable | $ 366 | $ 439 | $ 0 | $ 0 | $ 366 | $ 439 | $ 0 | $ 0 |
General (Details) (USD $)
In Millions, unless otherwise specified |
6 Months Ended | |||
---|---|---|---|---|
Jun. 30, 2013
|
Oct. 16, 2012
|
Apr. 19, 2012
|
Jun. 30, 2013
New General Contractor Contract [Member]
|
|
Subsequent Event [Line Items] | ||||
Subsequent Event, Description | The Company is expanding the building of a current branch office. | |||
Contract, Date | Apr. 19, 2012 | |||
Contractor contract fees | $ 12.2 | $ 2.1 | ||
Contractor fees paid | 6.5 | |||
Lower range of the expected cost of the project for next one to two years | 13.0 | |||
Higher range of the expected cost of the project over the next one or two years | $ 15.0 |
Loans and the Allowance for Loan Losses, Troubled Debt Restructuring (Details) (Total Mortgage Loans on Real Estate [Member], USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2012
Contract
|
Jun. 30, 2013
Contract
|
Jun. 30, 2012
Contract
|
Jun. 30, 2013
Residential 1-4 Family [Member]
Contract
|
Jun. 30, 2013
Residential 1-4 Family [Member]
Contract
|
Jun. 30, 2012
Residential 1-4 Family [Member]
Contract
|
Jun. 30, 2012
Commercial [Member]
Contract
|
Jun. 30, 2013
Commercial [Member]
Contract
|
Jun. 30, 2012
Commercial [Member]
Contract
|
Jun. 30, 2012
Second Mortgage [Member]
Contract
|
Jun. 30, 2012
Second Mortgage [Member]
Contract
|
|
Financing Receivable, Modifications [Line Items] | |||||||||||
Number of Modifications | 2 | 4 | 6 | 2 | 3 | 1 | 1 | 1 | 1 | 1 | 4 |
Recorded Investment Prior to Modification | $ 2,591 | $ 883 | $ 1,321 | $ 285 | $ 676 | $ 93 | $ 2,480 | $ 207 | $ 539 | $ 111 | $ 689 |
Recorded Investment After Modification | 2,100 | 883 | 1,064 | 285 | 676 | 60 | 1,955 | 207 | 506 | 145 | 498 |
Current Investment | $ 2,513 | $ 876 | $ 1,005 | $ 284 | $ 673 | $ 57 | $ 2,373 | $ 203 | $ 474 | $ 140 | $ 474 |
Segment Reporting (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of assets and revenues from segment to consolidated | Information about reportable segments, and reconciliation of such information to the consolidated financial statements as of and for the three and six months ended June 30, 2013 and 2012 follows:
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Consolidated Statements of Changes in Stockholders' Equity (unaudited) (USD $)
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Common Stock [Member]
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Additional Paid-in Capital [Member]
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Retained Earnings [Member]
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Accumulated Other Comprehensive Income (Loss) [Member]
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Total
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Balance at Dec. 31, 2011 | $ 24,795,045 | $ 16,309,983 | $ 45,109,268 | $ (349,581) | $ 85,864,715 |
Balance (in shares) at Dec. 31, 2011 | 4,959,009 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 0 | 0 | 1,716,508 | 0 | 1,716,508 |
Other comprehensive loss, net of tax | 0 | 0 | 0 | 249,407 | 249,407 |
Stock compensation expense | 0 | 55,330 | 0 | 0 | 55,330 |
Cash dividends | 0 | 0 | (495,901) | 0 | (495,901) |
Balance at Jun. 30, 2012 | 24,795,045 | 16,365,313 | 46,329,875 | (100,174) | 87,390,059 |
Balance (in shares) at Jun. 30, 2012 | 4,959,009 | ||||
Balance at Dec. 31, 2012 | 24,795,045 | 16,391,845 | 48,304,609 | (191,463) | 89,300,036 |
Balance (in shares) at Dec. 31, 2012 | 4,959,009 | 4,959,009 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 0 | 0 | 1,916,132 | 0 | 1,916,132 |
Other comprehensive loss, net of tax | 0 | 0 | 0 | (8,222,984) | (8,222,984) |
Cash dividends | 0 | 0 | (495,900) | 0 | (495,900) |
Balance at Jun. 30, 2013 | $ 24,795,045 | $ 16,391,845 | $ 49,724,841 | $ (8,414,447) | $ 82,497,284 |
Balance (in shares) at Jun. 30, 2013 | 4,959,009 | 4,959,009 |
Loans and the Allowance for Loan Losses
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Loans and the Allowance for Loan Losses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans and the Allowance for Loan Losses | Note 3. Loans and the Allowance for Loan Losses The following is a summary of the balances in each class of the Company’s loan portfolio as of the dates indicated:
Overdrawn deposit accounts are reclassified as loans and included in the Other category in the table above. Overdrawn deposit accounts totaled $587 thousand and $1.6 million at June 30, 2013 and December 31, 2012, respectively. CREDIT QUALITY INFORMATION The Company uses internally-assigned risk grades to estimate the capability of borrowers to repay the contractual obligations of their loan agreements as scheduled or at all. The Company’s internal risk grade system is based on experiences with similarly graded loans. Credit risk grades are updated at least quarterly as additional information becomes available, at which time management analyzes the resulting scores to track loan performance. The Company’s internally assigned risk grades are as follows:
The following table presents credit quality exposures by internally assigned risk ratings as of the dates indicated:
As of June 30, 2013 and December 31, 2012 the Company did not have any loans internally classified as Loss or Doubtful. AGE ANALYSIS OF PAST DUE LOANS BY CLASS All classes of loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Interest and fees continue to accrue on past due loans until the date the loan is placed in nonaccrual status, if applicable. The following table includes an aging analysis of the recorded investment in past due loans as of the dates indicated. Also included in the table below are loans that are 90 days or more past due as to interest and principal and still accruing interest, because they are well-secured and in the process of collection. Loans in nonaccrual status that are also past due are included in the aging categories in the table below.
NONACCRUAL LOANS The Company generally places non-consumer loans in nonaccrual status when the full and timely collection of interest or principal becomes uncertain, part of the principal balance has been charged off and no restructuring has occurred or the loan reaches 90 days past due, unless the credit is well-secured and in the process of collection. Under regulatory rules, consumer loans, which are loans to individuals for household, family and other personal expenditures, and loans secured by 1-4 family residential properties are not required to be placed in nonaccrual status. Although consumer loans and loans secured by 1-4 family residential property are not required to be placed in nonaccrual status, the Company may place a consumer loan or loan secured by 1-4 family residential property in nonaccrual status, if necessary to avoid a material overstatement of interest income. Generally, consumer loans not secured by real estate are placed in nonaccrual status only when part of the principal has been charged off. These loans are charged off or written down to the net realizable value of the collateral when deemed uncollectible, due to bankruptcy or other factors, or when they are past due based on loan product, industry practice, terms and other factors. When management places a loan in nonaccrual status, the accrued unpaid interest receivable is reversed against interest income and the loan is accounted for by the cash or cost recovery method, until it qualifies for return to accrual status or is charged off. Generally, management returns a loan to accrual status if (a) all delinquent interest and principal payments become current under the terms of the loan agreement or (b) the loan is both well-secured and in the process of collection and collectability is no longer doubtful. The following table presents loans in nonaccrual status by class of loan as of the dates indicated:
The following table presents the interest income that the Company would have earned under the original terms of its nonaccrual loans and the actual interest recorded by the Company on nonaccrual loans for the periods presented:
TROUBLED DEBT RESTRUCTURINGS The Company’s loan portfolio includes certain loans that have been modified in a troubled debt restructuring (TDR), where economic concessions have been granted to borrowers who are experiencing financial difficulties. These concessions typically result from the Company’s loss mitigation activities and could include reduction in the interest rate below current market rates for borrowers with similar risk profiles, payment extensions, forgiveness of principal, forbearance or other actions intended to maximize collection. The Company defines a TDR as nonperforming if the TDR is in nonaccrual status or 90 days or more past due and still accruing interest at the report date. When the Company modifies a loan, management evaluates any possible impairment as stated in the impaired loan section below. The following table presents TDRs during the period indicated, by class of loan:
The four loans restructured in the first six months of 2013 were all given below-market rates for debt with similar risk characteristics. The restructurings during the first six months of 2012 were given principal reductions, with the principal forgiveness on all loans in the table totaling $525 thousand. One loan restructured during the first six months of 2012 was also given a below-market rate for debt with similar risk characteristics. As of June 30, 2013 and June 30, 2012, there were no TDRs for which there was a payment default where the default occurred within twelve months of restructuring. A TDR is considered in default when it is 90 days or more past due or has been charged off. The TDRs in the tables above are factored into the determination of the allowance for loan losses as of the periods indicated. These loans are included in the impaired loan analysis, as discussed below. IMPAIRED LOANS A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan. Impaired loans include nonperforming commercial loans and loans modified in a TDR. When management identifies a loan as impaired, the impairment is measured based on the present value of expected future cash flows, discounted at the loan’s effective interest rate, except when the sole or remaining source of repayment for the loan is the operation or liquidation of the collateral. In these cases, management uses the current fair value of the collateral, less selling costs, when foreclosure is probable, instead of the discounted cash flows. If management determines that the value of the impaired loan is less than the recorded investment in the loan (net of previous charge-offs, deferred loan fees or costs and unamortized premium or discount), impairment is recognized through an allowance estimate or a charge-off to the allowance. When the ultimate collectability of the total principal of an impaired loan is in doubt and the loan is in nonaccrual status, all payments are applied to principal under the cost-recovery method. For financial statement purposes, the recorded investment in the loan is the actual principal balance reduced by payments that would otherwise have been applied to interest. When reporting information on these loans to the applicable customers, the unpaid principal balance is reported as if payments were applied to principal and interest under the original terms of the loan agreements. Therefore, the unpaid principal balance reported to the customer would be higher than the recorded investment in the loan for financial statement purposes. When the ultimate collectability of the total principal of the impaired loan is not in doubt and the loan is in nonaccrual status, contractual interest is credited to interest income when received under the cash-basis method. The following table includes the recorded investment and unpaid principal balances (a portion of which may have been charged off) for impaired loans with the associated allowance amount, if applicable, as of the dates presented. Also presented are the average recorded investments in the impaired loans and the related amount of interest recognized for the periods presented. The average balances are calculated based on daily average balances.
MONITORING OF LOANS AND EFFECT OF MONITORING FOR THE ALLOWANCE FOR LOAN LOSSES Loan officers are responsible for continual portfolio analysis and prompt identification and reporting of problem loans, which includes assigning a risk grade to each applicable loan at its origination and revising such grade as the situation dictates. Loan officers maintain frequent contact with borrowers, which should enable the loan officer to identify potential problems before other personnel. In addition, meetings with loan officers and upper management are held to discuss problem loans and review risk grades. Nonetheless, in order to avoid over-reliance upon loan officers for problem loan identification, the Company’s loan review system provides for review of loans and risk grades by individuals who are independent of the loan approval process. Risk grades and historical loss rates by risk grades are used as a component of the calculation of the allowance for loan losses. ALLOWANCE FOR LOAN LOSSES Management has an established methodology to determine the adequacy of the allowance for loan losses that assesses the risks and losses inherent in the loan portfolio. For purposes of determining the allowance for loan losses, the Company has segmented certain loans in the portfolio by product type. Loans are segmented into the following pools: commercial, real estate-construction, real estate-mortgage, consumer and other loans. The Company also sub-segments the real estate-mortgage segment into four classes: residential 1-4 family, commercial real estate, second mortgages and equity lines of credit. The Company uses an internally developed risk evaluation model in the estimation of the credit risk process. The model and assumptions used to determine the allowance are independently validated and reviewed to ensure that the theoretical foundation, assumptions, data integrity, computational processes and reporting practices are appropriate and properly documented. Each portfolio segment has risk characteristics as follows:
To determine the balance of the allowance account for each segment of the loan portfolio, management pools each segment by risk grade individually and applies a historical loss percentage. At June 30, 2013 and December 31, 2012, the historical loss percentage was based on losses sustained in each segment of the portfolio over the previous eight quarters. Management also provides an allocated component of the allowance for loans that are classified as impaired. An allocated allowance is established when the discounted value of future cash flows from the impaired loan (or the collateral value or observable market price of the impaired loan) is lower than the carrying value of that loan. Based on credit risk assessments and management’s analysis of qualitative factors, additional loss factors are applied to loan balances. These additional qualitative factors include: economic conditions, trends in growth, loan concentrations, changes in certain loans, changes in underwriting, changes in management and changes in the legal and regulatory environment. THE COMPANY’S ESTIMATION PROCESS The allowance for loan losses is the accumulation of various components that are calculated based on independent methodologies. Management’s estimate is based on certain observable, historical data that management believes are most reflective of the underlying credit losses being estimated. In addition, impaired loans are separately identified for evaluation and are measured based on the present value of expected future cash flows, the observable market price of the loans or the fair value of the collateral. Also, various qualitative factors are applied to each segment of the loan portfolio. ALLOWANCE FOR LOAN LOSSES BY SEGMENT The total allowance reflects management’s estimate of loan losses inherent in the loan portfolio at the balance sheet date. The Company considers the allowance for loan losses of $7.3 million adequate to cover loan losses inherent in the loan portfolio at June 30, 2013. The following table presents, by portfolio segment, the changes in the allowance for loan losses and the recorded investment in loans for the periods presented. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.
CHANGES IN ACCOUNTING METHODOLOGY There were no changes in the Company’s accounting methodology for the allowance for loan losses in the first six months of 2013. |
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General | Note 1. General The accompanying unaudited consolidated financial statements of Old Point Financial Corporation (the Company) and its subsidiaries have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information. All significant intercompany balances and transactions have been eliminated. In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments and reclassifications of a normal and recurring nature considered necessary to present fairly the financial positions at June 30, 2013 and December 31, 2012, the results of operations and statements of comprehensive income for the three and six months ended June 30, 2013 and 2012, and the statements of changes in stockholders’ equity and statements of cash flows for the six months ended June 30, 2013 and 2012. The results of operations for the interim periods are not necessarily indicative of the results that may be expected for the full year. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's 2012 annual report on Form 10-K. Certain previously reported amounts have been reclassified to conform to current period presentation. AVAILABLE INFORMATION The Company maintains a website on the Internet at www.oldpoint.com. The Company makes available free of charge, on or through its website, its proxy statements, annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports as soon as reasonably practicable after such material is electronically filed with the Securities and Exchange Commission (SEC). The information available on the Company’s Internet website is not part of this Form 10-Q or any other report filed by the Company with the SEC. The public may read and copy any documents the Company files at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The Company’s SEC filings can also be obtained on the SEC’s website on the Internet at www.sec.gov. SUBSEQUENT EVENTS In accordance with ASC 855-10, “Subsequent Events,” the Company evaluates subsequent events that have occurred after the balance sheet date but before the financial statements are issued. There are two types of subsequent events: (1) recognized, or those that provide additional evidence about conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial statements, and (2) nonrecognized, or those that provide evidence about conditions that did not exist at the date of the balance sheet but arose after that date. The Company is expanding the building of a current branch office. The Company signed a contract with a general contractor on April 19, 2012. The contract entitles the contractor to $2.1 million for Phase I of the construction, which includes site work and construction of the building shell. The Company signed an amendment to the contract with the general contractor on October 16, 2012 for the remainder of the construction. The revised contract entitles the contractor to $12.2 million for the construction of the building. As of the writing of this quarterly report on Form 10-Q, $6.5 million had been disbursed to the contractor. The Company anticipates that the total project will likely cost between $13.0 million and $15.0 million and be completed in the next nine months. Other than those discussed above, the Company did not identify any recognized or nonrecognized subsequent events that would have required adjustment to or disclosure in the financial statements. |