x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED June 30, 2013. |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO . |
VIRGINIA
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54-1284688
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(State or other jurisdiction of
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(I.R.S. Employer
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incorporation or organization)
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Identification No.)
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628 Main Street
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Danville, Virginia
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24541
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(Address of principal executive offices)
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(Zip Code)
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Yes
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x
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No
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¨
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Yes
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x
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No
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¨
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Large accelerated filer o
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Accelerated filer x
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Non-accelerated filer o
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Yes
|
¨
|
No
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x
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Page
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Part I.
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FINANCIAL INFORMATION
|
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Item 1.
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Financial Statements
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3
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4
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5
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6
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7
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8
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9
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Item 2.
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36
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Item 3.
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56
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Item 4.
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57
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Part II.
|
OTHER INFORMATION
|
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Item 1.
|
58
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|
|
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Item 1A.
|
58
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Item 2.
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58
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Item 3.
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58
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Item 4.
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58
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Item 5.
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58
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Item 6.
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58
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59
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Item 1. | Financial Statements |
American National Bankshares Inc. and Subsidiaries
|
(Dollars in thousands, except share data)
|
|
(Unaudited)
|
(Audited)
|
||||||
|
June 30,
|
December 31,
|
||||||
Assets
|
2013
|
2012
|
||||||
Cash and due from banks
|
$
|
18,994
|
$
|
20,435
|
||||
Interest-bearing deposits in other banks
|
37,720
|
27,007
|
||||||
|
||||||||
Securities available for sale, at fair value
|
340,135
|
335,246
|
||||||
Restricted stock, at cost
|
4,880
|
5,287
|
||||||
Loans held for sale
|
4,098
|
13,852
|
||||||
|
||||||||
Loans, net of unearned income
|
794,045
|
788,705
|
||||||
Less allowance for loan losses
|
(12,676
|
)
|
(12,118
|
)
|
||||
Net loans
|
781,369
|
776,587
|
||||||
|
||||||||
Premises and equipment, net
|
24,269
|
24,543
|
||||||
Other real estate owned, net
|
5,569
|
6,193
|
||||||
Goodwill
|
39,043
|
39,043
|
||||||
Core deposit intangibles, net
|
3,819
|
4,660
|
||||||
Bank owned life insurance
|
14,495
|
14,289
|
||||||
Accrued interest receivable and other assets
|
19,626
|
16,545
|
||||||
Total assets
|
$
|
1,294,017
|
$
|
1,283,687
|
||||
|
||||||||
Liabilities
|
||||||||
Liabilities:
|
||||||||
Demand deposits -- noninterest bearing
|
$
|
213,123
|
$
|
217,275
|
||||
Demand deposits -- interest bearing
|
169,204
|
153,578
|
||||||
Money market deposits
|
173,696
|
166,111
|
||||||
Savings deposits
|
84,489
|
81,135
|
||||||
Time deposits
|
405,882
|
409,568
|
||||||
Total deposits
|
1,046,394
|
1,027,667
|
||||||
|
||||||||
Customer repurchase agreements
|
41,972
|
49,942
|
||||||
Long-term borrowings
|
10,015
|
10,079
|
||||||
Trust preferred capital notes
|
27,368
|
27,317
|
||||||
Accrued interest payable and other liabilities
|
5,332
|
5,436
|
||||||
Total liabilities
|
1,131,081
|
1,120,441
|
||||||
|
||||||||
Shareholders' equity
|
||||||||
Preferred stock, $5 par, 2,000,000 shares authorized, none outstanding
|
-
|
-
|
||||||
Common stock, $1 par, 20,000,000 shares authorized, 7,872,250 shares outstanding at June 30, 2013 and 7,846,912 shares outstanding at December 31, 2012
|
7,872
|
7,847
|
||||||
Capital in excess of par value
|
57,581
|
57,211
|
||||||
Retained earnings
|
95,333
|
90,591
|
||||||
Accumulated other comprehensive income, net
|
2,150
|
7,597
|
||||||
Total shareholders' equity
|
162,936
|
163,246
|
||||||
Total liabilities and shareholders' equity
|
$
|
1,294,017
|
$
|
1,283,687
|
(Dollars in thousands, except share and per share data) (Unaudited)
|
|
Three Months Ended
|
|||||||
|
June 30
|
|||||||
|
2013
|
2012
|
||||||
Interest and Dividend Income:
|
||||||||
Interest and fees on loans
|
$
|
11,358
|
$
|
12,683
|
||||
Interest and dividends on securities:
|
||||||||
Taxable
|
851
|
1,056
|
||||||
Tax-exempt
|
1,045
|
1,077
|
||||||
Dividends
|
54
|
52
|
||||||
Other interest income
|
39
|
18
|
||||||
Total interest and dividend income
|
13,347
|
14,886
|
||||||
|
||||||||
Interest Expense:
|
||||||||
Interest on deposits
|
1,369
|
1,729
|
||||||
Interest on short-term borrowings
|
14
|
51
|
||||||
Interest on long-term borrowings
|
82
|
84
|
||||||
Interest on trust preferred capital notes
|
189
|
206
|
||||||
Total interest expense
|
1,654
|
2,070
|
||||||
|
||||||||
Net Interest Income
|
11,693
|
12,816
|
||||||
Provision for Loan Losses
|
-
|
733
|
||||||
|
||||||||
Net Interest Income After Provision for Loan Losses
|
11,693
|
12,083
|
||||||
|
||||||||
Noninterest Income:
|
||||||||
Trust fees
|
944
|
966
|
||||||
Service charges on deposit accounts
|
429
|
413
|
||||||
Other fees and commissions
|
463
|
445
|
||||||
Mortgage banking income
|
531
|
519
|
||||||
Securities gains, net
|
1
|
160
|
||||||
Other
|
318
|
297
|
||||||
Total noninterest income
|
2,686
|
2,800
|
||||||
|
||||||||
Noninterest Expense:
|
||||||||
Salaries
|
3,503
|
3,809
|
||||||
Employee benefits
|
867
|
799
|
||||||
Occupancy and equipment
|
872
|
1,048
|
||||||
FDIC assessment
|
161
|
213
|
||||||
Bank franchise tax
|
185
|
182
|
||||||
Core deposit intangible amortization
|
421
|
546
|
||||||
Foreclosed real estate, net
|
193
|
171
|
||||||
Merger related expenses
|
-
|
(202
|
)
|
|||||
Other
|
2,226
|
2,267
|
||||||
Total noninterest expense
|
8,428
|
8,833
|
||||||
Income Before Income Taxes
|
5,951
|
6,050
|
||||||
Income Taxes
|
1,741
|
1,776
|
||||||
Net Income
|
$
|
4,210
|
$
|
4,274
|
||||
|
||||||||
Net Income Per Common Share:
|
||||||||
Basic
|
$
|
0.54
|
$
|
0.55
|
||||
Diluted
|
$
|
0.53
|
$
|
0.54
|
||||
Average Common Shares Outstanding:
|
||||||||
Basic
|
7,867,222
|
7,832,162
|
||||||
Diluted
|
7,876,969
|
7,849,142
|
(Dollars in thousands, except share and per share data) (Unaudited)
|
|
Six Months Ended
|
|||||||
|
June 30
|
|||||||
|
2013
|
2012
|
||||||
Interest and Dividend Income:
|
||||||||
Interest and fees on loans
|
$
|
22,753
|
$
|
25,803
|
||||
Interest and dividends on securities:
|
||||||||
Taxable
|
1,729
|
2,135
|
||||||
Tax-exempt
|
2,097
|
2,159
|
||||||
Dividends
|
109
|
103
|
||||||
Other interest income
|
68
|
28
|
||||||
Total interest and dividend income
|
26,756
|
30,228
|
||||||
|
||||||||
Interest Expense:
|
||||||||
Interest on deposits
|
2,805
|
3,566
|
||||||
Interest on short-term borrowings
|
35
|
94
|
||||||
Interest on long-term borrowings
|
164
|
168
|
||||||
Interest on trust preferred capital notes
|
377
|
412
|
||||||
Total interest expense
|
3,381
|
4,240
|
||||||
|
||||||||
Net Interest Income
|
23,375
|
25,988
|
||||||
Provision for Loan Losses
|
294
|
1,466
|
||||||
|
||||||||
Net Interest Income After Provision for Loan Losses
|
23,081
|
24,522
|
||||||
|
||||||||
Noninterest Income:
|
||||||||
Trust fees
|
1,532
|
1,848
|
||||||
Service charges on deposit accounts
|
838
|
901
|
||||||
Other fees and commissions
|
922
|
902
|
||||||
Mortgage banking income
|
1,249
|
1,050
|
||||||
Securities gains, net
|
199
|
160
|
||||||
Other
|
716
|
1,173
|
||||||
Total noninterest income
|
5,456
|
6,034
|
||||||
|
||||||||
Noninterest Expense:
|
||||||||
Salaries
|
6,942
|
7,920
|
||||||
Employee benefits
|
1,766
|
1,877
|
||||||
Occupancy and equipment
|
1,788
|
2,013
|
||||||
FDIC assessment
|
322
|
446
|
||||||
Bank franchise tax
|
372
|
365
|
||||||
Core deposit intangible amortization
|
841
|
1,093
|
||||||
Foreclosed real estate, net
|
436
|
18
|
||||||
Merger related expenses
|
-
|
49
|
||||||
Other
|
4,279
|
4,979
|
||||||
Total noninterest expense
|
16,746
|
18,760
|
||||||
Income Before Income Taxes
|
11,791
|
11,796
|
||||||
Income Taxes
|
3,430
|
3,347
|
||||||
Net Income
|
$
|
8,361
|
$
|
8,449
|
||||
|
||||||||
Net Income Per Common Share:
|
||||||||
Basic
|
$
|
1.06
|
$
|
1.08
|
||||
Diluted
|
$
|
1.06
|
$
|
1.08
|
||||
Average Common Shares Outstanding:
|
||||||||
Basic
|
7,862,719
|
7,827,195
|
||||||
Diluted
|
7,872,351
|
7,839,364
|
American National Bankshares Inc. and Subsidiaries
|
(Dollars in thousands) (Unaudited)
|
|
Three Months Ended
|
|||||||
|
June 30
|
|||||||
|
2013
|
2012
|
||||||
|
||||||||
Net income
|
$
|
4,210
|
$
|
4,274
|
||||
|
||||||||
Other comprehensive income (loss):
|
||||||||
|
||||||||
Unrealized gains (losses) on securities available for sale
|
(7,299
|
)
|
1,285
|
|||||
Income tax benefit (expense)
|
2,554
|
(450
|
)
|
|||||
|
||||||||
Reclassification adjustment for (gains) on securities
|
(1
|
)
|
(160
|
)
|
||||
Income tax expense
|
1
|
56
|
||||||
|
||||||||
Other comprehensive income (loss)
|
(4,745
|
)
|
731
|
|||||
|
||||||||
Comprehensive income (loss)
|
$
|
(535
|
)
|
$
|
5,005
|
|
Six Months Ended
|
|||||||
|
June 30
|
|||||||
|
2013
|
2012
|
||||||
|
||||||||
Net income
|
$
|
8,361
|
$
|
8,449
|
||||
|
||||||||
Other comprehensive income (loss):
|
||||||||
|
||||||||
Unrealized gains (losses) on securities available for sale
|
(8,181
|
)
|
608
|
|||||
Income tax benefit (expense)
|
2,863
|
(213
|
)
|
|||||
|
||||||||
Reclassification adjustment for (gains) on securities
|
(199
|
)
|
(160
|
)
|
||||
Income tax expense
|
70
|
56
|
||||||
|
||||||||
Other comprehensive income (loss)
|
(5,447
|
)
|
291
|
|||||
|
||||||||
Comprehensive income
|
$
|
2,914
|
$
|
8,740
|
Six Months Ended June 30, 2013 and 2012
|
(Dollars in thousands) (Unaudited)
|
|
Accumulated
|
|||||||||||||||||||
|
Capital in
|
Other
|
Total
|
|||||||||||||||||
|
Common
|
Excess of
|
Retained
|
Comprehensive
|
Shareholders'
|
|||||||||||||||
|
Stock
|
Par Value
|
Earnings
|
Income
|
Equity
|
|||||||||||||||
|
||||||||||||||||||||
|
||||||||||||||||||||
Balance, December 31, 2011
|
$
|
7,807
|
$
|
56,395
|
$
|
81,797
|
$
|
6,830
|
$
|
152,829
|
||||||||||
|
||||||||||||||||||||
Net income
|
-
|
-
|
8,449
|
-
|
8,449
|
|||||||||||||||
|
||||||||||||||||||||
Other comprehensive income
|
-
|
-
|
-
|
291
|
291
|
|||||||||||||||
|
||||||||||||||||||||
Stock options exercised
|
3
|
42
|
-
|
-
|
45
|
|||||||||||||||
|
||||||||||||||||||||
Equity based compensation
|
26
|
388
|
-
|
-
|
414
|
|||||||||||||||
|
||||||||||||||||||||
Cash dividends declared, $0.46 per share
|
-
|
-
|
(3,604
|
)
|
-
|
(3,604
|
)
|
|||||||||||||
|
||||||||||||||||||||
Balance, June 30, 2012
|
$
|
7,836
|
$
|
56,825
|
$
|
86,642
|
$
|
7,121
|
$
|
158,424
|
||||||||||
|
||||||||||||||||||||
Balance, December 31, 2012
|
$
|
7,847
|
$
|
57,211
|
$
|
90,591
|
$
|
7,597
|
$
|
163,246
|
||||||||||
|
||||||||||||||||||||
Net income
|
-
|
-
|
8,361
|
-
|
8,361
|
|||||||||||||||
|
||||||||||||||||||||
Other comprehensive loss
|
-
|
-
|
-
|
(5,447
|
)
|
(5,447
|
)
|
|||||||||||||
|
||||||||||||||||||||
Stock options exercised
|
6
|
96
|
-
|
-
|
102
|
|||||||||||||||
|
||||||||||||||||||||
Equity based compensation
|
19
|
274
|
-
|
-
|
293
|
|||||||||||||||
|
||||||||||||||||||||
Cash dividends declared, $0.46 per share
|
-
|
-
|
(3,619
|
)
|
-
|
(3,619
|
)
|
|||||||||||||
|
||||||||||||||||||||
Balance, June 30, 2013
|
$
|
7,872
|
$
|
57,581
|
$
|
95,333
|
$
|
2,150
|
$
|
162,936
|
Six Months Ended June 30, 2013 and 2012
|
(Dollars in thousands) (Unaudited)
|
|
2013
|
2012
|
||||||
Cash Flows from Operating Activities:
|
||||||||
Net income
|
$
|
8,361
|
$
|
8,449
|
||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Provision for loan losses
|
294
|
1,466
|
||||||
Depreciation
|
854
|
865
|
||||||
Net accretion of purchase accounting adjustments
|
(4,050
|
)
|
(5,306
|
)
|
||||
Core deposit intangible amortization
|
841
|
1,093
|
||||||
Net amortization (accretion) of securities
|
1,617
|
1,667
|
||||||
Net gain on sale or call of securities
|
(199
|
)
|
(160
|
)
|
||||
Gain on sale of loans held for sale
|
(1,099
|
)
|
(926
|
)
|
||||
Proceeds from sales of loans held for sale
|
58,268
|
41,030
|
||||||
Originations of loans held for sale
|
(47,415
|
)
|
(42,989
|
)
|
||||
Net gain on foreclosed real estate
|
(139
|
)
|
(381
|
)
|
||||
Valuation allowance on foreclosed real estate
|
294
|
219
|
||||||
Net gain on sale of premises and equipment
|
-
|
(495
|
)
|
|||||
Equity based compensation expense
|
293
|
414
|
||||||
Deferred income tax expense (benefit)
|
(1,874
|
)
|
2,238
|
|||||
Net change in interest receivable
|
(99
|
)
|
(12
|
)
|
||||
Net change in other assets
|
1,619
|
(4,596
|
)
|
|||||
Net change in interest payable
|
(51
|
)
|
(71
|
)
|
||||
Net change in other liabilities
|
(53
|
)
|
(597
|
)
|
||||
Net cash provided by operating activities
|
17,462
|
1,908
|
||||||
|
||||||||
Cash Flows from Investing Activities:
|
||||||||
Proceeds from sales of securities available for sale
|
2,627
|
4,209
|
||||||
Proceeds from maturities, calls and paydowns of securities available for sale
|
32,216
|
33,574
|
||||||
Purchases of securities available for sale
|
(49,530
|
)
|
(39,999
|
)
|
||||
Net change in restricted stock
|
407
|
(249
|
)
|
|||||
Net (increase) decrease in loans
|
(2,222
|
)
|
19,186
|
|||||
Proceeds from sale of premises and equipment
|
-
|
563
|
||||||
Purchases of premises and equipment
|
(580
|
)
|
(573
|
)
|
||||
Proceeds from sales of foreclosed real estate
|
1,518
|
3,489
|
||||||
Net cash (used in) provided by investing activities
|
(15,564
|
)
|
20,200
|
|||||
|
||||||||
Cash Flows from Financing Activities:
|
||||||||
Net change in demand, money market, and savings deposits
|
22,413
|
(29,597
|
)
|
|||||
Net change in time deposits
|
(3,477
|
)
|
13,602
|
|||||
Net change in customer repurchase agreements
|
(7,970
|
)
|
538
|
|||||
Net change in other short-term borrowings
|
-
|
(3,000
|
)
|
|||||
Net change in long-term borrowings
|
(75
|
)
|
(76
|
)
|
||||
Common stock dividends paid
|
(3,619
|
)
|
(3,604
|
)
|
||||
Proceeds from exercise of stock options
|
102
|
45
|
||||||
Net cash provided by (used in) financing activities
|
7,374
|
(22,092
|
)
|
|||||
|
||||||||
Net Increase in Cash and Cash Equivalents
|
9,272
|
16
|
||||||
|
||||||||
Cash and Cash Equivalents at Beginning of Period
|
47,442
|
28,893
|
||||||
|
||||||||
Cash and Cash Equivalents at End of Period
|
$
|
56,714
|
$
|
28,909
|
Consideration Paid:
|
||||
Common shares issued (1,626,157)
|
$
|
29,905
|
||
Cash paid to Shareholders
|
12
|
|||
Fair Value of Options
|
132
|
|||
Preferred shares issued (5,000)
|
5,000
|
|||
Value of consideration
|
35,049
|
|||
|
||||
Assets acquired:
|
||||
Cash and cash equivalents
|
34,783
|
|||
Investment securities
|
51,442
|
|||
Loans held for sale
|
113
|
|||
Loans, net of unearned income
|
328,123
|
|||
Premises and equipment, net
|
5,708
|
|||
Deferred income taxes
|
15,310
|
|||
Core deposit intangible
|
6,556
|
|||
Other real estate owned
|
3,538
|
|||
Other assets
|
13,535
|
|||
Total assets
|
459,108
|
|||
|
||||
Liabilities assumed:
|
||||
Deposits
|
420,248
|
|||
FHLB advances
|
9,858
|
|||
Other borrowings
|
6,546
|
|||
Other liabilities
|
3,982
|
|||
Total labilities
|
440,634
|
|||
Net assets acquired
|
18,474
|
|||
Goodwill resulting from merger with MidCarolina
|
$
|
16,575
|
$
|
56,681
|
|||
Contractual cash flows not expected to be collected (nonaccretable difference)
|
17,472
|
|||
Expected cash flows at acquisition
|
39,209
|
|||
Interest component of expected cash flows (accretable discount)
|
1,663
|
|||
Fair value of acquired loans accounted for under FASB ASC 310-30
|
$
|
37,546
|
|
June 30, 2013
|
|||||||||||||||
(in thousands)
|
Amortized
|
Unrealized
|
Unrealized
|
Estimated
|
||||||||||||
|
Cost
|
Gains
|
Losses
|
Fair Value
|
||||||||||||
Securities available for sale:
|
||||||||||||||||
Federal agencies and GSEs
|
$
|
54,965
|
$
|
172
|
$
|
496
|
$
|
54,641
|
||||||||
Mortgage-backed and CMOs
|
74,299
|
1,074
|
446
|
74,927
|
||||||||||||
State and municipal
|
193,223
|
7,092
|
486
|
199,829
|
||||||||||||
Corporate
|
10,952
|
2
|
216
|
10,738
|
||||||||||||
Total securities available for sale
|
$
|
333,439
|
$
|
8,340
|
$
|
1,644
|
$
|
340,135
|
|
December 31, 2012
|
|||||||||||||||
(in thousands)
|
Amortized
|
Unrealized
|
Unrealized
|
Estimated
|
||||||||||||
|
Cost
|
Gains
|
Losses
|
Fair Value
|
||||||||||||
Securities available for sale:
|
||||||||||||||||
Federal agencies and GSE
|
$
|
42,458
|
$
|
306
|
$
|
5
|
$
|
42,759
|
||||||||
Mortgage-backed and CMOs
|
81,585
|
1,829
|
106
|
83,308
|
||||||||||||
State and municipal
|
189,810
|
12,935
|
14
|
202,731
|
||||||||||||
Corporate
|
6,317
|
131
|
-
|
6,448
|
||||||||||||
Total securities available for sale
|
$
|
320,170
|
$
|
15,201
|
$
|
125
|
$
|
335,246
|
|
Total
|
Less than 12 Months
|
12 Months or More
|
|||||||||||||||||||||
(in thousands)
|
Estimated
Fair
Value
|
Unrealized
Loss
|
Estimated
Fair
Value
|
Unrealized
Loss
|
Estimated
Fair
Value
|
Unrealized
Loss
|
||||||||||||||||||
Federal agencies and GSEs
|
$
|
39,222
|
$
|
496
|
$
|
39,222
|
$
|
496
|
$
|
-
|
$
|
-
|
||||||||||||
Mortgage-backed and CMOs
|
28,184
|
446
|
23,012
|
374
|
5,172
|
72
|
||||||||||||||||||
State and municipal
|
29,771
|
486
|
29,771
|
486
|
-
|
-
|
||||||||||||||||||
Corporate
|
8,582
|
216
|
8,582
|
216
|
-
|
-
|
||||||||||||||||||
Total
|
$
|
105,759
|
$
|
1,644
|
$
|
100,587
|
$
|
1,572
|
$
|
5,172
|
$
|
72
|
|
Total
|
Less than 12 Months
|
12 Months or More
|
|||||||||||||||||||||
(in thousands)
|
Estimated
Fair
Value
|
Unrealized
Loss
|
Estimated
Fair
Value
|
Unrealized
Loss
|
Estimated
Fair
Value
|
Unrealized
Loss
|
||||||||||||||||||
Federal agencies and GSEs
|
$
|
5,501
|
$
|
5
|
$
|
5,501
|
$
|
5
|
$
|
-
|
$
|
-
|
||||||||||||
Mortgage-backed and CMOs
|
16,353
|
106
|
12,941
|
42
|
3,412
|
64
|
||||||||||||||||||
State and municipal
|
4,329
|
14
|
4,329
|
14
|
-
|
-
|
||||||||||||||||||
Total
|
$
|
26,183
|
$
|
125
|
$
|
22,771
|
$
|
61
|
$
|
3,412
|
$
|
64
|
|
June 30,
|
December 31,
|
||||||
(in thousands)
|
2013
|
2012
|
||||||
|
||||||||
Commercial
|
$
|
130,721
|
$
|
126,192
|
||||
Commercial real estate:
|
||||||||
Construction and land development
|
44,029
|
48,812
|
||||||
Commercial real estate
|
354,323
|
355,433
|
||||||
Residential real estate:
|
||||||||
Residential
|
168,965
|
161,033
|
||||||
Home equity
|
89,688
|
91,313
|
||||||
Consumer
|
6,319
|
5,922
|
||||||
Total loans
|
$
|
794,045
|
$
|
788,705
|
|
June 30,
|
December 31,
|
||||||
(in thousands)
|
2013
|
2012
|
||||||
Oustanding principal balance
|
$
|
173,073
|
$
|
219,569
|
||||
Carrying amount
|
160,672
|
203,981
|
June 30,
|
December 31,
|
|||||||
(in thousands)
|
2013
|
2012
|
||||||
Oustanding principal balance
|
$
|
23,672
|
$
|
26,349
|
||||
Carrying amount
|
17,999
|
20,182
|
|
Accretable
|
|||
(in thousands)
|
Discount
|
|||
Balance at December 31, 2012
|
$
|
2,165
|
||
Accretion
|
(1,222
|
)
|
||
Reclassification from nonaccretable difference
|
1,026
|
|||
Balance at June 30, 2013
|
$
|
1,969
|
|
90 Days +
|
|||||||||||||||||||||||||||
|
Past Due
|
Non-
|
Total
|
|||||||||||||||||||||||||
|
30- 59 Days
|
60-89 Days
|
and Still
|
Accrual
|
Past
|
Total
|
||||||||||||||||||||||
(in thousands)
|
Past Due
|
Past Due
|
Accruing
|
Loans
|
Due
|
Current
|
Loans
|
|||||||||||||||||||||
|
||||||||||||||||||||||||||||
Commercial
|
$
|
78
|
$
|
-
|
$
|
-
|
$
|
19
|
$
|
97
|
$
|
130,624
|
$
|
130,721
|
||||||||||||||
Commercial real estate:
|
||||||||||||||||||||||||||||
Construction and land development
|
-
|
6
|
-
|
1,056
|
1,062
|
42,967
|
44,029
|
|||||||||||||||||||||
Commercial real estate
|
-
|
13
|
-
|
2,561
|
2,574
|
351,749
|
354,323
|
|||||||||||||||||||||
Residential:
|
||||||||||||||||||||||||||||
Residential
|
215
|
291
|
-
|
1,804
|
2,310
|
166,655
|
168,965
|
|||||||||||||||||||||
Home equity
|
103
|
36
|
-
|
379
|
518
|
89,170
|
89,688
|
|||||||||||||||||||||
Consumer
|
11
|
-
|
-
|
9
|
20
|
6,299
|
6,319
|
|||||||||||||||||||||
|
||||||||||||||||||||||||||||
Total
|
$
|
407
|
$
|
346
|
$
|
-
|
$
|
5,828
|
$
|
6,581
|
$
|
787,464
|
$
|
794,045
|
|
90 Days +
|
|||||||||||||||||||||||||||
|
Past Due
|
Non-
|
Total
|
|||||||||||||||||||||||||
|
30- 59 Days
|
60-89 Days
|
and Still
|
Accrual
|
Past
|
Total
|
||||||||||||||||||||||
(in thousands)
|
Past Due
|
Past Due
|
Accruing
|
Loans
|
Due
|
Current
|
Loans
|
|||||||||||||||||||||
|
||||||||||||||||||||||||||||
Commercial
|
$
|
219
|
$
|
-
|
$
|
-
|
$
|
52
|
$
|
271
|
$
|
125,921
|
$
|
126,192
|
||||||||||||||
Commercial real estate:
|
||||||||||||||||||||||||||||
Construction and land development
|
417
|
-
|
-
|
1,208
|
1,625
|
47,187
|
48,812
|
|||||||||||||||||||||
Commercial real estate
|
1,120
|
-
|
-
|
1,526
|
2,646
|
352,787
|
355,433
|
|||||||||||||||||||||
Residential:
|
||||||||||||||||||||||||||||
Residential
|
672
|
168
|
-
|
2,130
|
2,970
|
158,063
|
161,033
|
|||||||||||||||||||||
Home equity
|
144
|
-
|
-
|
397
|
541
|
90,772
|
91,313
|
|||||||||||||||||||||
Consumer
|
33
|
-
|
-
|
3
|
36
|
5,886
|
5,922
|
|||||||||||||||||||||
Total
|
$
|
2,605
|
$
|
168
|
$
|
-
|
$
|
5,316
|
$
|
8,089
|
$
|
780,616
|
$
|
788,705
|
Unpaid
|
Average
|
Interest
|
||||||||||||||||||
(in thousands)
|
Recorded
|
Principal
|
Related
|
Recorded
|
Income
|
|||||||||||||||
|
Investment
|
Balance
|
Allowance
|
Investment
|
Recognized
|
|||||||||||||||
With no related allowance recorded:
|
||||||||||||||||||||
Commercial
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||||
Commercial real estate:
|
||||||||||||||||||||
Construction and land development
|
825
|
837
|
-
|
939
|
-
|
|||||||||||||||
Commercial real estate
|
333
|
334
|
-
|
327
|
7
|
|||||||||||||||
Residential:
|
||||||||||||||||||||
Residential
|
261
|
539
|
-
|
265
|
-
|
|||||||||||||||
Home equity
|
10
|
10
|
-
|
11
|
-
|
|||||||||||||||
Consumer
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
|
$
|
1,429
|
$
|
1,720
|
$
|
-
|
$
|
1,542
|
$
|
7
|
||||||||||
With a related allowance recorded:
|
||||||||||||||||||||
Commercial
|
10
|
10
|
7
|
10
|
-
|
|||||||||||||||
Commercial real estate:
|
||||||||||||||||||||
Construction and land development
|
890
|
929
|
82
|
988
|
-
|
|||||||||||||||
Commercial real estate
|
959
|
959
|
331
|
959
|
-
|
|||||||||||||||
Residential
|
||||||||||||||||||||
Residential
|
90
|
90
|
15
|
90
|
-
|
|||||||||||||||
Home equity
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Consumer
|
19
|
19
|
19
|
20
|
-
|
|||||||||||||||
|
$
|
1,968
|
$
|
2,007
|
$
|
454
|
$
|
2,067
|
$
|
-
|
||||||||||
Total:
|
||||||||||||||||||||
Commercial
|
$
|
10
|
$
|
10
|
$
|
7
|
$
|
10
|
$
|
-
|
||||||||||
Commercial real estate:
|
||||||||||||||||||||
Construction and land development
|
1,715
|
1,766
|
82
|
1,927
|
-
|
|||||||||||||||
Commercial real estate
|
1,292
|
1,293
|
331
|
1,286
|
7
|
|||||||||||||||
Residential:
|
||||||||||||||||||||
Residential
|
351
|
629
|
15
|
355
|
-
|
|||||||||||||||
Home equity
|
10
|
10
|
-
|
11
|
-
|
|||||||||||||||
Consumer
|
19
|
19
|
19
|
20
|
-
|
|||||||||||||||
|
$
|
3,397
|
$
|
3,727
|
$
|
454
|
$
|
3,609
|
$
|
7
|
|
Unpaid
|
Average
|
Interest
|
|||||||||||||||||
(in thousands)
|
Recorded
|
Principal
|
Related
|
Recorded
|
Income
|
|||||||||||||||
|
Investment
|
Balance
|
Allowance
|
Investment
|
Recognized
|
|||||||||||||||
With no related allowance recorded:
|
||||||||||||||||||||
Commercial
|
$
|
39
|
$
|
39
|
$
|
-
|
$
|
276
|
$
|
11
|
||||||||||
Commercial real estate:
|
||||||||||||||||||||
Construction and land development
|
2,302
|
2,335
|
-
|
1,562
|
-
|
|||||||||||||||
Commercial real estate
|
305
|
306
|
-
|
557
|
8
|
|||||||||||||||
Residential:
|
||||||||||||||||||||
Residential
|
270
|
541
|
-
|
861
|
15
|
|||||||||||||||
Consumer:
|
||||||||||||||||||||
Consumer
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
|
$
|
2,916
|
$
|
3,221
|
$
|
-
|
$
|
3,256
|
$
|
34
|
||||||||||
With a related allowance recorded:
|
||||||||||||||||||||
Commercial
|
$
|
110
|
$
|
110
|
$
|
107
|
$
|
35
|
$
|
-
|
||||||||||
Commercial real estate:
|
||||||||||||||||||||
Construction and land development
|
-
|
|||||||||||||||||||
Commercial real estate
|
-
|
|||||||||||||||||||
Residential:
|
||||||||||||||||||||
Residential
|
-
|
|||||||||||||||||||
Home equity
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Consumer
|
21
|
21
|
21
|
10
|
||||||||||||||||
Consumer
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
|
$
|
131
|
$
|
131
|
$
|
128
|
$
|
45
|
$
|
-
|
||||||||||
Total:
|
||||||||||||||||||||
Commercial
|
$
|
149
|
$
|
149
|
$
|
107
|
$
|
311
|
$
|
11
|
||||||||||
Commercial real estate:
|
||||||||||||||||||||
Construction and land development
|
2,302
|
2,335
|
-
|
1,562
|
-
|
|||||||||||||||
Commercial real estate
|
305
|
306
|
-
|
557
|
8
|
|||||||||||||||
Residential:
|
||||||||||||||||||||
Residential
|
270
|
541
|
-
|
861
|
15
|
|||||||||||||||
Home equity
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Consumer:
|
||||||||||||||||||||
Consumer
|
21
|
21
|
21
|
10
|
-
|
|||||||||||||||
|
$
|
3,047
|
$
|
3,352
|
$
|
128
|
$
|
3,301
|
$
|
34
|
|
Loans Modified as a TDR for the
|
|||||||||||
|
Three Months Ended June 30, 2012
|
|||||||||||
|
Pre-Modification
|
Post-Modification
|
||||||||||
|
Number of
|
Outstanding Recorded
|
Oustanding Recorded
|
|||||||||
(dollars in thousands)
|
Contracts
|
Investment
|
Investment
|
|||||||||
Commercial
|
1
|
$
|
11
|
$
|
11
|
|||||||
Commercial real estate:
|
||||||||||||
Construction and land development
|
2
|
1,411
|
1,411
|
|||||||||
Home Equity
|
-
|
-
|
-
|
|||||||||
Commercial real estate
|
1
|
4
|
4
|
|||||||||
Consumer
|
-
|
-
|
-
|
|||||||||
Total
|
4
|
$
|
1,426
|
$
|
1,426
|
|
Loans Modified as a TDR for the
|
|||||||||||
|
Six Months Ended June 30, 2012
|
|||||||||||
|
Pre-Modification
|
Post-Modification
|
||||||||||
|
Number of
|
Outstanding Recorded
|
Oustanding Recorded
|
|||||||||
(dollars in thousands)
|
Contracts
|
Investment
|
Investment
|
|||||||||
Commercial
|
1
|
$
|
11
|
$
|
11
|
|||||||
Commercial real estate:
|
||||||||||||
Construction and land development
|
7
|
2,188
|
2,081
|
|||||||||
Home Equity
|
-
|
-
|
-
|
|||||||||
Commercial real estate
|
1
|
4
|
4
|
|||||||||
Consumer
|
-
|
-
|
-
|
|||||||||
Total
|
9
|
$
|
2,203
|
$
|
2,096
|
|
Commercial
|
Commercial
|
||||||||||||||||||
|
Real Estate
|
Real Estate
|
Home
|
|||||||||||||||||
|
Commercial
|
Construction
|
Other
|
Residential
|
Equity
|
|||||||||||||||
|
||||||||||||||||||||
Pass
|
$
|
129,226
|
$
|
35,940
|
$
|
341,474
|
$
|
155,507
|
$
|
86,850
|
||||||||||
Special Mention
|
1,414
|
1,635
|
6,349
|
10,192
|
1,777
|
|||||||||||||||
Substandard
|
81
|
6,454
|
6,500
|
3,266
|
1,061
|
|||||||||||||||
Doubtful
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Total
|
$
|
130,721
|
$
|
44,029
|
$
|
354,323
|
$
|
168,965
|
$
|
89,688
|
|
Consumer
|
|||
|
||||
Performing
|
$
|
6,307
|
||
Nonperforming
|
12
|
|||
Total
|
$
|
6,319
|
|
||||||||||||||||||||
|
Commercial
|
Commercial
|
||||||||||||||||||
|
Real Estate
|
Real Estate
|
Home
|
|||||||||||||||||
|
Commercial
|
Construction
|
Other
|
Residential
|
Equity
|
|||||||||||||||
|
||||||||||||||||||||
Pass
|
$
|
125,072
|
$
|
39,417
|
$
|
340,094
|
$
|
146,875
|
$
|
89,066
|
||||||||||
Special Mention
|
922
|
2,287
|
10,321
|
10,731
|
1,060
|
|||||||||||||||
Substandard
|
198
|
7,108
|
5,018
|
3,427
|
1,187
|
|||||||||||||||
Doubtful
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Total
|
$
|
126,192
|
$
|
48,812
|
$
|
355,433
|
$
|
161,033
|
$
|
91,313
|
|
Consumer
|
|||
|
||||
Performing
|
$
|
5,856
|
||
Nonperforming
|
66
|
|||
Total
|
$
|
5,922
|
(in thousands)
|
Six Months Ended
June 30, 2013
|
Year Ended
December 31, 2012
|
Six Months Ended
June 30, 2012
|
|||||||||
|
||||||||||||
Allowance for Loan Losses
|
||||||||||||
Balance, beginning of period
|
$
|
12,118
|
$
|
10,529
|
$
|
10,529
|
||||||
Provision for loan losses
|
294
|
2,133
|
1,466
|
|||||||||
Charge-offs
|
(467
|
)
|
(2,086
|
)
|
(1,068
|
)
|
||||||
Recoveries
|
731
|
1,542
|
1,172
|
|||||||||
Balance, end of period
|
$
|
12,676
|
$
|
12,118
|
$
|
12,099
|
||||||
|
||||||||||||
Reserve for Unfunded Lending Commitments
|
||||||||||||
Balance, beginning of period
|
$
|
201
|
$
|
200
|
$
|
200
|
||||||
Provision for loan losses
|
2
|
1
|
6
|
|||||||||
Charge-offs
|
-
|
-
|
-
|
|||||||||
Balance, end of period
|
$
|
203
|
$
|
201
|
$
|
206
|
|
Commercial
|
Residential
|
||||||||||||||||||
|
Commercial
|
Real Estate
|
Real Estate
|
Consumer
|
Total
|
|||||||||||||||
(in thousands)
|
||||||||||||||||||||
|
||||||||||||||||||||
Allowance for Loan Losses
|
||||||||||||||||||||
Balance as of December 31, 2012
|
$
|
1,450
|
$
|
6,822
|
$
|
3,638
|
$
|
208
|
$
|
12,118
|
||||||||||
Charge-offs
|
(109
|
)
|
(23
|
)
|
(230
|
)
|
(105
|
)
|
(467
|
)
|
||||||||||
Recoveries
|
241
|
268
|
145
|
77
|
731
|
|||||||||||||||
Provision for loan losses
|
35
|
166
|
88
|
5
|
294
|
|||||||||||||||
Balance as of June 30, 2013
|
$
|
1,617
|
$
|
7,233
|
$
|
3,641
|
$
|
185
|
$
|
12,676
|
||||||||||
|
||||||||||||||||||||
Balance as of June 30, 2013
|
||||||||||||||||||||
|
||||||||||||||||||||
Allowance for Loan Losses
|
||||||||||||||||||||
Individually evaluated for impairment
|
$
|
7
|
$
|
413
|
$
|
15
|
$
|
19
|
$
|
454
|
||||||||||
Collectively evaluated for impairment
|
1,610
|
6,506
|
3,577
|
166
|
11,859
|
|||||||||||||||
Loans acquired with deteriorated credit quality
|
-
|
314
|
49
|
-
|
363
|
|||||||||||||||
Total
|
$
|
1,617
|
$
|
7,233
|
$
|
3,641
|
$
|
185
|
$
|
12,676
|
||||||||||
|
||||||||||||||||||||
Loans
|
||||||||||||||||||||
Individually evaluated for impairment
|
$
|
10
|
$
|
3,007
|
$
|
361
|
$
|
19
|
$
|
3,397
|
||||||||||
Collectively evaluated for impairment
|
130,431
|
383,541
|
251,511
|
6,300
|
771,783
|
|||||||||||||||
Loans acquired with deteriorated credit quality
|
280
|
11,804
|
6,781
|
-
|
18,865
|
|||||||||||||||
Total
|
$
|
130,721
|
$
|
398,352
|
$
|
258,653
|
$
|
6,319
|
$
|
794,045
|
Commercial
|
Commercial
Real Estate
|
Residential
Real Estate
|
Consumer
|
Total
|
||||||||||||||||
(in thousands)
|
||||||||||||||||||||
|
||||||||||||||||||||
Allowance for Loan Losses
|
||||||||||||||||||||
Balance as of December 31, 2011
|
$
|
1,236
|
$
|
5,719
|
$
|
3,412
|
$
|
162
|
$
|
10,529
|
||||||||||
Charge-offs
|
(748
|
)
|
(572
|
)
|
(694
|
)
|
(72
|
)
|
(2,086
|
)
|
||||||||||
Recoveries
|
707
|
475
|
279
|
81
|
1,542
|
|||||||||||||||
Provision
|
255
|
1,200
|
641
|
37
|
2,133
|
|||||||||||||||
Balance as of December 31, 2012
|
$
|
1,450
|
$
|
6,822
|
$
|
3,638
|
$
|
208
|
$
|
12,118
|
||||||||||
|
||||||||||||||||||||
Balance as of December 31, 2012:
|
||||||||||||||||||||
|
||||||||||||||||||||
Allowance for Loan Losses
|
||||||||||||||||||||
Individually evaluated for impairment
|
$
|
107
|
$
|
-
|
$
|
-
|
$
|
21
|
$
|
128
|
||||||||||
Collectively evaluated for impairment
|
1,343
|
6,376
|
3,609
|
187
|
11,515
|
|||||||||||||||
Loans acquired with deteriorated credit quality
|
-
|
446
|
29
|
-
|
475
|
|||||||||||||||
Total
|
$
|
1,450
|
$
|
6,822
|
$
|
3,638
|
$
|
208
|
$
|
12,118
|
||||||||||
|
||||||||||||||||||||
Loans
|
||||||||||||||||||||
Individually evaluated for impairment
|
$
|
149
|
$
|
2,607
|
$
|
270
|
$
|
21
|
$
|
3,047
|
||||||||||
Collectively evaluated for impairment
|
125,707
|
388,495
|
245,373
|
5,901
|
765,476
|
|||||||||||||||
Loans acquired with deteriorated credit quality
|
336
|
13,143
|
6,703
|
-
|
20,182
|
|||||||||||||||
Total
|
$
|
126,192
|
$
|
404,245
|
$
|
252,346
|
$
|
5,922
|
$
|
788,705
|
||||||||||
|
||||||||||||||||||||
Balances at December 31, 2011:
|
||||||||||||||||||||
|
||||||||||||||||||||
Allowance for Loan Losses
|
||||||||||||||||||||
Balance as of December 31, 2010
|
$
|
751
|
$
|
4,631
|
$
|
2,921
|
$
|
117
|
$
|
8,420
|
||||||||||
Charge-offs
|
(163
|
)
|
(702
|
)
|
(871
|
)
|
(127
|
)
|
(1,863
|
)
|
||||||||||
Recoveries
|
373
|
306
|
50
|
73
|
802
|
|||||||||||||||
Provision
|
275
|
1,484
|
1,312
|
99
|
3,170
|
|||||||||||||||
Balance as of December 31, 2011
|
$
|
1,236
|
$
|
5,719
|
$
|
3,412
|
$
|
162
|
$
|
10,529
|
||||||||||
|
||||||||||||||||||||
Allowance for Loan Losses
|
||||||||||||||||||||
Individually evaluated for impairment
|
$
|
-
|
$
|
129
|
$
|
1
|
$
|
-
|
$
|
130
|
||||||||||
Collectively evaluated for impairment
|
1,236
|
5,590
|
3,411
|
162
|
10,399
|
|||||||||||||||
Total
|
$
|
1,236
|
$
|
5,719
|
$
|
3,412
|
$
|
162
|
$
|
10,529
|
||||||||||
|
||||||||||||||||||||
Loans
|
||||||||||||||||||||
Individually evaluated for impairment
|
$
|
-
|
$
|
1,894
|
$
|
1,295
|
$
|
49
|
$
|
3,238
|
||||||||||
Collectively evaluated for impairment
|
131,755
|
381,175
|
266,421
|
8,142
|
787,493
|
|||||||||||||||
Loans acquired with deteriorated credit quality
|
2,411
|
23,325
|
8,291
|
-
|
34,027
|
|||||||||||||||
Total
|
$
|
134,166
|
$
|
406,394
|
$
|
276,007
|
$
|
8,191
|
$
|
824,758
|
|
Goodwill
|
Intangibles
|
||||||
Balance as of December 31, 2012
|
$
|
39,043
|
$
|
4,660
|
||||
Additions
|
-
|
-
|
||||||
Amortization
|
-
|
(841
|
)
|
|||||
Impairment
|
-
|
-
|
||||||
Balance as of June 30, 2013
|
$
|
39,043
|
$
|
3,819
|
|
June 30,
2013
|
December 31,
2012
|
||||||
|
||||||||
Customer repurchase agreements
|
$
|
41,972
|
$
|
49,942
|
||||
FHLB overnight borrowings
|
-
|
-
|
||||||
|
$
|
41,972
|
$
|
49,942
|
June 30, 2013
|
December 31, 2012
|
|||||||||||||||||
Due by
|
Advance
Amount
|
Weighted
Average
Rate
|
Due by
|
Advance Amount
|
Weighted
Average
Rate
|
|||||||||||||
|
|
|||||||||||||||||
April 2014
|
$
|
113
|
3.78
|
%
|
April 2014
|
$
|
188
|
3.78
|
%
|
|||||||||
November 2017
|
9,902
|
2.98
|
November 2017
|
9,891
|
2.98
|
|||||||||||||
|
$
|
10,015
|
3.00
|
%
|
|
$
|
10,079
|
3.01
|
%
|
(Amounts in thousands)
|
||||||||||||||||||||
|
Date
|
Interest
|
Maturity
|
Principal Amount
|
||||||||||||||||
Issuing Entity
|
Issued
|
Rate
|
Date
|
June 30, 2013
|
December 31, 2012
|
|||||||||||||||
|
||||||||||||||||||||
AMNB Trust I
|
04-07-06
|
Libor plus
|
06-30-36
|
$
|
20,619
|
$
|
20,619
|
|||||||||||||
|
1.35
|
%
|
||||||||||||||||||
|
||||||||||||||||||||
MidCarolina I
|
10-29-02
|
Libor plus
|
11-07-32
|
4,070
|
4,042
|
|||||||||||||||
|
3.45
|
%
|
||||||||||||||||||
|
||||||||||||||||||||
MidCarolina II
|
12-03-03
|
Libor plus
|
10-07-33
|
2,679
|
2,656
|
|||||||||||||||
|
2.95
|
%
|
||||||||||||||||||
|
||||||||||||||||||||
|
$
|
27,368
|
$
|
27,317
|
|
Option
Shares
|
Weighted
Average
Exercise
Price
|
Weighted
Average
Remaining
Contractual Term
|
Aggregate
Intrinsic
Value
($000)
|
|||||||||
|
|
||||||||||||
Outstanding at December 31, 2012
|
240,517
|
$
|
24.28
|
|
|||||||||
Granted
|
-
|
-
|
|
||||||||||
Exercised
|
6,000
|
17.00
|
|
||||||||||
Forfeited
|
11,795
|
27.64
|
|
||||||||||
Expired
|
4,000
|
24.00
|
|
||||||||||
Outstanding at June 30, 2013
|
218,722
|
$
|
24.31
|
3.45 years
|
$
|
329
|
|||||||
Exercisable at June 30, 2013
|
218,722
|
$
|
24.31
|
3.45 years
|
$
|
329
|
Restricted Stock
|
Shares
|
Weighted Average Grant Date Value
|
||||||
|
||||||||
Nonvested at January 1, 2013
|
39,327
|
$
|
20.17
|
|||||
Granted
|
12,121
|
20.47
|
||||||
Vested
|
12,830
|
22.77
|
||||||
Forfeited
|
-
|
-
|
||||||
Nonvested at June 30, 2013
|
38,618
|
$
|
19.40
|
|
Three Months Ended
|
|||||||||||||||
|
June 30,
|
|||||||||||||||
|
2013
|
2012
|
||||||||||||||
|
Per
|
Per
|
||||||||||||||
|
Share
|
Share
|
||||||||||||||
|
Shares
|
Amount
|
Shares
|
Amount
|
||||||||||||
Basic
|
7,867,222
|
$
|
0.54
|
7,832,162
|
$
|
0.55
|
||||||||||
Effect of dilutive securities - stock options
|
9,747
|
(0.01
|
)
|
16,980
|
(0.01
|
)
|
||||||||||
Diluted
|
7,876,969
|
$
|
0.53
|
7,849,142
|
$
|
0.54
|
|
Six Months Ended
|
|||||||||||||||
|
June 30,
|
|||||||||||||||
|
2013
|
2012
|
||||||||||||||
|
Per
|
Per
|
||||||||||||||
|
Share
|
Share
|
||||||||||||||
|
Shares
|
Amount
|
Shares
|
Amount
|
||||||||||||
Basic
|
7,862,719
|
$
|
1.06
|
7,827,195
|
$
|
1.08
|
||||||||||
Effect of dilutive securities - stock options
|
9,632
|
-
|
12,169
|
-
|
||||||||||||
Diluted
|
7,872,351
|
$
|
1.06
|
7,839,364
|
$
|
1.08
|
Components of Net Periodic Benefit Cost
|
Three Months Ended
|
Six Months Ended
|
||||||||||||||
(in thousands)
|
June 30,
|
June 30,
|
||||||||||||||
|
2013
|
2012
|
2013
|
2012
|
||||||||||||
Service cost
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||
Interest cost
|
72
|
97
|
144
|
194
|
||||||||||||
Expected return on plan assets
|
(128
|
)
|
(135
|
)
|
(256
|
)
|
(270
|
)
|
||||||||
Recognized net actuarial loss
|
69
|
83
|
138
|
166
|
||||||||||||
|
||||||||||||||||
Net periodic benefit cost
|
$
|
13
|
$
|
45
|
$
|
26
|
$
|
90
|
Three Months Ended June 30, 2013
|
||||||||||||||||||||
|
Trust and
|
|||||||||||||||||||
(in thousands)
|
Community
|
Investment
|
Intersegment
|
|||||||||||||||||
|
Banking
|
Services
|
Other
|
Eliminations
|
Total
|
|||||||||||||||
Interest income
|
$
|
13,347
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
13,347
|
||||||||||
Interest expense
|
1,465
|
-
|
189
|
-
|
1,654
|
|||||||||||||||
Noninterest income
|
1,608
|
1,073
|
5
|
-
|
2,686
|
|||||||||||||||
Income before income taxes
|
5,558
|
682
|
(289
|
)
|
-
|
5,951
|
||||||||||||||
Net income
|
3,918
|
483
|
(191
|
)
|
-
|
4,210
|
||||||||||||||
Depreciation and amortization
|
847
|
4
|
-
|
-
|
851
|
|||||||||||||||
Total assets
|
1,292,099
|
-
|
1,918
|
-
|
1,294,017
|
|||||||||||||||
Capital expenditures
|
402
|
-
|
-
|
-
|
402
|
|
Three Months Ended June 30, 2012
|
|||||||||||||||||||
|
Trust and
|
|||||||||||||||||||
|
Community
|
Investment
|
Intersegment
|
|||||||||||||||||
|
Banking
|
Services
|
Other
|
Eliminations
|
Total
|
|||||||||||||||
Interest income
|
$
|
14,886
|
$
|
-
|
$
|
2
|
$
|
(2
|
)
|
$
|
14,886
|
|||||||||
Interest expense
|
1,865
|
-
|
207
|
(2
|
)
|
2,070
|
||||||||||||||
Noninterest income
|
1,715
|
1,079
|
6
|
-
|
2,800
|
|||||||||||||||
Income before income taxes
|
5,704
|
650
|
(304
|
)
|
-
|
6,050
|
||||||||||||||
Net income
|
4,014
|
461
|
(201
|
)
|
-
|
4,274
|
||||||||||||||
Depreciation and amortization
|
984
|
5
|
-
|
-
|
989
|
|||||||||||||||
Total assets
|
1,289,971
|
-
|
921
|
-
|
1,290,892
|
|||||||||||||||
Capital expenditures
|
-
|
-
|
-
|
-
|
-
|
|
Six Months Ended June 30, 2013
|
|||||||||||||||||||
|
Trust and
|
|||||||||||||||||||
|
Community
|
Investment
|
Intersegment
|
|||||||||||||||||
|
Banking
|
Services
|
Other
|
Eliminations
|
Total
|
|||||||||||||||
Interest income
|
$
|
26,756
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
26,756
|
||||||||||
Interest expense
|
3,004
|
-
|
377
|
-
|
3,381
|
|||||||||||||||
Noninterest income
|
3,686
|
1,760
|
10
|
-
|
5,456
|
|||||||||||||||
Income before income taxes
|
11,329
|
978
|
(516
|
)
|
-
|
11,791
|
||||||||||||||
Net income
|
8,009
|
693
|
(341
|
)
|
8,361
|
|||||||||||||||
Depreciation and amortization
|
1,687
|
8
|
0
|
-
|
1,695
|
|||||||||||||||
Total assets
|
1,292,099
|
-
|
1,918
|
-
|
1,294,017
|
|||||||||||||||
Capital expenditures
|
580
|
-
|
-
|
-
|
580
|
|
Six Months Ended June 30, 2012
|
|||||||||||||||||||
|
Trust and
|
|||||||||||||||||||
|
Community
|
Investment
|
Intersegment
|
|||||||||||||||||
|
Banking
|
Services
|
Other
|
Eliminations
|
Total
|
|||||||||||||||
Interest income
|
$
|
30,228
|
$
|
-
|
$
|
5
|
$
|
(5
|
)
|
$
|
30,228
|
|||||||||
Interest expense
|
3,832
|
-
|
413
|
(5
|
)
|
4,240
|
||||||||||||||
Noninterest income
|
3,961
|
2,062
|
11
|
-
|
6,034
|
|||||||||||||||
Operating income before income taxes
|
11,187
|
1,208
|
(599
|
)
|
-
|
11,796
|
||||||||||||||
Net income
|
7,984
|
865
|
(400
|
)
|
8,449
|
|||||||||||||||
Depreciation and amortization
|
1,948
|
10
|
0
|
-
|
1,958
|
|||||||||||||||
Total assets
|
1,289,971
|
-
|
921
|
-
|
1,290,892
|
|||||||||||||||
Capital expenditures
|
573
|
-
|
-
|
-
|
573
|
Level 1 – | Valuation is based on quoted prices in active markets for identical assets and liabilities. |
Level 2 – | Valuation is based on observable inputs including quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar assets and liabilities in less active markets, and model-based valuation techniques for which significant assumptions can be derived primarily from or corroborated by observable data in the market. |
Level 3 – | Valuation is based on model-based techniques that use one or more significant inputs or assumptions that are unobservable in the market. |
|
Fair Value Measurements at June 30, 2013 Using
|
|||||||||||||||
|
|
Balance as of
June 30,
|
Quoted Prices in Active Markets for Identical Assets
|
Significant Other Observable Inputs
|
Significant Unobservable Inputs
|
|||||||||||
Description
|
2013
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
Assets:
|
||||||||||||||||
Securities available for sale:
|
||||||||||||||||
Federal agencies and GSEs
|
$
|
54,641
|
$
|
-
|
$
|
54,641
|
$
|
-
|
||||||||
Mortgage-backed and CMOs
|
74,927
|
-
|
74,927
|
-
|
||||||||||||
State and municipal
|
199,829
|
-
|
199,829
|
-
|
||||||||||||
Corporate
|
10,738
|
-
|
10,738
|
-
|
||||||||||||
Total
|
$
|
340,135
|
$
|
-
|
$
|
340,135
|
$
|
-
|
|
Fair Value Measurements at December 31, 2012 Using
|
|||||||||||||||
|
Balance as of
December 31,
|
Quoted Prices in Active Markets for Identical Assets
|
Significant Other Observable Inputs
|
Significant Unobservable Inputs
|
||||||||||||
Description
|
2012
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
Assets:
|
||||||||||||||||
Securities available for sale:
|
||||||||||||||||
Federal agencies and GSEs
|
$
|
42,759
|
$
|
-
|
$
|
42,759
|
$
|
-
|
||||||||
Mortgage-backed and CMOs
|
83,308
|
-
|
83,308
|
-
|
||||||||||||
State and municipal
|
202,731
|
2,110
|
200,621
|
-
|
||||||||||||
Corporate
|
6,448
|
-
|
6,097
|
351
|
||||||||||||
Total
|
$
|
335,246
|
$
|
2,110
|
$
|
332,785
|
$
|
351
|
|
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
|
|||||||||||||||||||||||
|
Total Realized / Unrealized Gains
|
|||||||||||||||||||||||
|
(Losses) Included in
|
|||||||||||||||||||||||
|
Balance as of
January 1,
2013
|
Net Income
|
Other Comprehensive Income
|
Purchases, Sales, Issuances and Settlements, Net
|
Transfer In (Out) of Level 3
|
Balance as of June 30, 2013
|
||||||||||||||||||
Securities available for sale:
|
||||||||||||||||||||||||
|
||||||||||||||||||||||||
Corporate
|
$
|
351
|
$
|
136
|
$
|
-
|
$
|
(487
|
)
|
$
|
-
|
$
|
-
|
|||||||||||
|
||||||||||||||||||||||||
Total assets
|
$
|
351
|
$
|
136
|
$
|
-
|
$
|
(487
|
)
|
$
|
-
|
$
|
-
|
|
Fair Value Measurements at June 30, 2013 Using
|
|||||||||||||||
|
Balance as of
June 30,
|
Quoted Prices in Active Markets for Identical Assets
|
Significant Other Observable Inputs
|
Significant Unobservable Inputs
|
||||||||||||
Description
|
2013
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
Assets:
|
||||||||||||||||
Loans held for sale
|
$
|
4,098
|
$
|
-
|
$
|
4,098
|
$
|
-
|
||||||||
Impaired loans, net of valuation allowance
|
1,514
|
-
|
-
|
1,514
|
||||||||||||
Other real estate owned
|
5,569
|
-
|
-
|
5,569
|
|
Fair Value Measurements at December 31, 2012 Using
|
|||||||||||||||
|
Balance as of
December 31,
|
Quoted Prices in Active Markets for Identical Assets
|
Significant Other Observable Inputs
|
Significant Unobservable Inputs
|
||||||||||||
Description
|
2012
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
Assets:
|
||||||||||||||||
Loans held for sale
|
$
|
13,852
|
$
|
-
|
$
|
13,852
|
$
|
-
|
||||||||
Impaired loans, net of valuation allowance
|
3
|
-
|
-
|
3
|
||||||||||||
Other real estate owned
|
6,193
|
-
|
-
|
6,193
|
Assets
|
Valuation Technique
|
Unobservable Input
|
Weighted
Rate |
|||||
|
|
|
||||||
Impaired loans
|
Discounted appraised value
|
Selling cost
|
6
|
%
|
||||
|
|
|
||||||
Other real estate owned
|
Discounted appraised value
|
Selling cost
|
6
|
%
|
||||
Other real estate owned
|
Discounted appraised value
|
Discount for lack of marketability
and age of appraisal
|
9
|
%
|
Assets
|
Valuation Technique
|
Unobservable Input
|
Weighted
Rate |
|||||
|
|
|
||||||
Securities available for sale
|
Discounted cash flow analysis
|
Discount rate
|
38
|
%
|
||||
|
|
|
||||||
Impaired loans
|
Discounted appraised value
|
Selling cost
|
6
|
%
|
||||
|
|
|
||||||
Other real estate owned
|
Discounted appraised value
|
Selling cost
|
6
|
%
|
||||
Other real estate owned
|
Discounted appraised value
|
Discount for lack of marketability and age of appraisal
|
9
|
%
|
|
Fair Value Measurements at June 30, 2013 using
|
|||||||||||||||||||
|
Quoted Prices in Active Markets for Identical Assets
|
Significant Other Observable Inputs
|
Significant Unobservable Inputs
|
Fair Value
|
||||||||||||||||
|
Carrying Value
|
Level 1
|
Level 2
|
Level 3
|
Balance
|
|||||||||||||||
Financial Assets:
|
||||||||||||||||||||
Cash and cash equivalents
|
$
|
56,714
|
$
|
56,714
|
$
|
-
|
$
|
-
|
$
|
56,714
|
||||||||||
Securities available for sale
|
340,135
|
-
|
340,135
|
-
|
340,135
|
|||||||||||||||
Loans held for sale
|
4,098
|
-
|
4,098
|
-
|
4,098
|
|||||||||||||||
Loans, net of allowance
|
781,369
|
-
|
-
|
779,287
|
779,287
|
|||||||||||||||
Bank owned life insurance
|
14,495
|
14,495
|
-
|
-
|
14,495
|
|||||||||||||||
Accrued interest receivable
|
4,810
|
4,810
|
-
|
-
|
4,810
|
|||||||||||||||
|
||||||||||||||||||||
Financial Liabilities:
|
||||||||||||||||||||
Deposits
|
$
|
1,046,394
|
$
|
579,833
|
$
|
-
|
$
|
409,501
|
$
|
989,334
|
||||||||||
Repurchase agreements
|
41,972
|
41,972
|
-
|
-
|
41,972
|
|||||||||||||||
Other borrowings
|
10,015
|
-
|
-
|
10,633
|
10,633
|
|||||||||||||||
Trust preferred capital notes
|
27,368
|
-
|
-
|
19,089
|
19,089
|
|||||||||||||||
Accrued interest payable
|
704
|
704
|
-
|
-
|
704
|
|
Fair Value Measurements at December 31, 2012 using
|
|||||||||||||||||||
|
Quoted Prices in Active Markets for Identical Assets
|
Significant Other Observable Inputs
|
Significant Unobservable Inputs
|
Fair Value
|
||||||||||||||||
|
Carrying Value
|
Level 1
|
Level 2
|
Level 3
|
Balance
|
|||||||||||||||
Financial Assets:
|
||||||||||||||||||||
Cash and cash equivalents
|
$
|
47,442
|
$
|
47,442
|
$
|
-
|
$
|
-
|
$
|
47,442
|
||||||||||
Securities available for sale
|
335,246
|
2,110
|
332,785
|
351
|
335,246
|
|||||||||||||||
Loans held for sale
|
13,852
|
-
|
13,852
|
-
|
13,852
|
|||||||||||||||
Loans, net of allowance
|
776,587
|
-
|
-
|
777,761
|
777,761
|
|||||||||||||||
Bank owned life insurance
|
14,289
|
14,289
|
-
|
-
|
14,289
|
|||||||||||||||
Accrued interest receivable
|
4,711
|
4,711
|
-
|
-
|
4,711
|
|||||||||||||||
|
||||||||||||||||||||
Financial Liabilities:
|
||||||||||||||||||||
Deposits
|
$
|
1,027,667
|
$
|
582,633
|
$
|
-
|
$
|
424,378
|
$
|
1,007,011
|
||||||||||
Repurchase agreements
|
49,942
|
49,942
|
-
|
-
|
49,942
|
|||||||||||||||
Other borrowings
|
10,079
|
-
|
-
|
11,062
|
11,062
|
|||||||||||||||
Trust preferred capital notes
|
27,317
|
-
|
-
|
22,524
|
22,524
|
|||||||||||||||
Accrued interest payable
|
755
|
755
|
-
|
-
|
755
|
|
Six Months Ended
June 30,
|
|||||||
|
2013
|
2012
|
||||||
Supplemental Schedule of Cash and Cash Equivalents:
|
||||||||
Cash and due from banks
|
$
|
18,994
|
$
|
18,529
|
||||
Interest-bearing deposits in other banks
|
37,720
|
10,380
|
||||||
|
||||||||
|
$
|
56,714
|
$
|
28,909
|
||||
|
||||||||
Supplemental Disclosure of Cash Flow Information:
|
||||||||
Cash paid for:
|
||||||||
Interest on deposits and borrowed funds
|
$
|
3,432
|
$
|
4,547
|
||||
Income taxes
|
3,190
|
-
|
||||||
Noncash investing and financing activities:
|
||||||||
Transfer of loans to other real estate owned
|
1,049
|
2,705
|
||||||
Unrealized loss on securities available for sale
|
(8,380
|
)
|
448
|
For the Three Month Period
|
Net Unrealized Gains (Losses) on Securities
|
Adjustments Related to Pension Benefits
|
Accumulated Other Comprehensive Income
|
|||||||||
|
||||||||||||
Balance at March 31, 2012
|
$
|
8,392
|
$
|
(2,002
|
)
|
$
|
6,390
|
|||||
|
||||||||||||
Net unrealized gains on securities available for sale, net of tax, $450
|
835
|
-
|
835
|
|||||||||
|
||||||||||||
Reclassification adjustment for gains on securities, net of tax, $(56)
|
(104
|
)
|
-
|
(104
|
)
|
|||||||
|
||||||||||||
Balance at June 30, 2012
|
$
|
9,123
|
$
|
(2,002
|
)
|
$
|
7,121
|
|||||
|
||||||||||||
Balance at March 31, 2013
|
$
|
9,098
|
$
|
(2,203
|
)
|
$
|
6,895
|
|||||
|
||||||||||||
Net unrealized losses on securities available for sale, net of tax, $(2,554)
|
(4,745
|
)
|
-
|
(4,745
|
)
|
|||||||
|
||||||||||||
Balance at June 30, 2013
|
$
|
4,353
|
$
|
(2,203
|
)
|
$
|
2,150
|
For the Six Month Period
|
Net Unrealized Gains (Losses) on Securities
|
Adjustments Related to Pension Benefits
|
Accumulated Other Comprehensive Income
|
|||||||||
|
||||||||||||
Balance at December 31, 2011
|
$
|
8,832
|
$
|
(2,002
|
)
|
$
|
6,830
|
|||||
|
||||||||||||
Net unrealized gains on securities available for sale, net of tax, $213
|
395
|
-
|
395
|
|||||||||
|
||||||||||||
Reclassification adjustment for gains on securities, net of tax, $(56)
|
(104
|
)
|
-
|
(104
|
)
|
|||||||
|
||||||||||||
Balance at June 30, 2012
|
$
|
9,123
|
$
|
(2,002
|
)
|
$
|
7,121
|
|||||
|
||||||||||||
Balance at December 31, 2012
|
$
|
9,800
|
$
|
(2,203
|
)
|
$
|
7,597
|
|||||
|
||||||||||||
Net unrealized losses on securities available for sale, net of tax, $(2,863)
|
(5,318
|
)
|
-
|
(5,318
|
)
|
|||||||
|
||||||||||||
Reclassification adjustment for gains on securities, net of tax, $(70)
|
(129
|
)
|
-
|
(129
|
)
|
|||||||
|
||||||||||||
Balance at June 30, 2013
|
$
|
4,353
|
$
|
(2,203
|
)
|
$
|
2,150
|
For the Three Month Period
|
Amount
|
Affected Line Item in
|
|||
|
Reclassified
|
the Statement of Where
|
|||
Details about AOCI Components
|
from AOCI
|
Net Income is Presented
|
|||
|
|
||||
Available for sale securities:
|
|
||||
Realized gain on sale of securities
|
$
|
1
|
Securities gains, net
|
||
|
(1
|
)
|
Income tax expense
|
||
Total reclassifications
|
$
|
-
|
Net of tax
|
For the Six Month Period
|
Amount
|
Affected Line Item in
|
|||
|
Reclassified
|
the Statement of Where
|
|||
Details about AOCI Components
|
from AOCI
|
Net Income is Presented
|
|||
|
|
||||
Available for sale securities:
|
|
||||
Realized gain on sale of securities
|
$
|
199
|
Securities gains, net
|
||
|
(70
|
)
|
Income tax expense
|
||
Total reclassifications
|
$
|
129
|
Net of tax
|
· | Financial market volatility including the level of interest rates could affect the values of financial instruments and the amount of net interest income earned; |
· | General economic or business conditions, either nationally or in the market areas in which the Company does business, may be less favorable than expected, resulting in deteriorating credit quality, reduced demand for credit, or a weakened ability to generate deposits; |
· | Competition among financial institutions may increase and competitors may have greater financial resources and develop products and technology that enable those competitors to compete more successfully than the Company; |
· | Businesses that the Company is engaged in may be adversely affected by legislative or regulatory changes, including changes in accounting standards; |
· | The ability to retain key personnel; |
· | The failure of assumptions underlying the allowance for loan losses; and |
· | Risks associated with mergers and other acquisitions and other expansion activities. |
For the three months ended June 30,
|
2013
|
2012
|
$ Change
|
% Change
|
||||||||||||
|
||||||||||||||||
Interest income
|
$
|
13,347
|
$
|
14,886
|
$
|
(1,539
|
)
|
-10.3
|
%
|
|||||||
Interest expense
|
(1,654
|
)
|
(2,070
|
)
|
416
|
-20.1
|
%
|
|||||||||
Net interest income
|
11,693
|
12,816
|
(1,123
|
)
|
-8.8
|
%
|
||||||||||
Provision for loan losses
|
-
|
(733
|
)
|
733
|
-100.0
|
%
|
||||||||||
Noninterest income
|
2,686
|
2,800
|
(114
|
)
|
-4.1
|
%
|
||||||||||
Noninterest expense
|
(8,428
|
)
|
(8,833
|
)
|
405
|
-4.6
|
%
|
|||||||||
Income tax expense
|
(1,741
|
)
|
(1,776
|
)
|
35
|
-2.0
|
%
|
|||||||||
|
||||||||||||||||
Net income
|
$
|
4,210
|
$
|
4,274
|
$
|
(64
|
)
|
-1.5
|
%
|
For the six months ended June 30,
|
2013
|
2012
|
$ Change
|
% Change
|
||||||||||||
|
||||||||||||||||
Interest income
|
$
|
26,756
|
$
|
30,228
|
$
|
(3,472
|
)
|
-11.5
|
%
|
|||||||
Interest expense
|
(3,381
|
)
|
(4,240
|
)
|
859
|
-20.3
|
%
|
|||||||||
Net interest income
|
23,375
|
25,988
|
(2,613
|
)
|
-10.1
|
%
|
||||||||||
Provision for loan losses
|
(294
|
)
|
(1,466
|
)
|
1,172
|
-79.9
|
%
|
|||||||||
Noninterest income
|
5,456
|
6,034
|
(578
|
)
|
-9.6
|
%
|
||||||||||
Noninterest expense
|
(16,746
|
)
|
(18,760
|
)
|
2,014
|
-10.7
|
%
|
|||||||||
Income tax expense
|
(3,430
|
)
|
(3,347
|
)
|
(83
|
)
|
2.5
|
%
|
||||||||
|
||||||||||||||||
Net income
|
$
|
8,361
|
$
|
8,449
|
$
|
(88
|
)
|
-1.0
|
%
|
Net Interest Income Analysis
|
For the Three Months Ended June 30, 2013 and 2012
|
(in thousands, except rates)
|
|
Interest
|
|||||||||||||||||||||||
|
Average Balance
|
Income/Expense
|
Yield/Rate
|
|||||||||||||||||||||
|
||||||||||||||||||||||||
|
2013
|
2012
|
2013
|
2012
|
2013
|
2012
|
||||||||||||||||||
Loans:
|
||||||||||||||||||||||||
Commercial
|
$
|
132,381
|
$
|
130,697
|
$
|
1,605
|
$
|
1,727
|
4.86
|
%
|
5.30
|
%
|
||||||||||||
Real estate
|
656,995
|
681,870
|
9,682
|
10,859
|
5.89
|
6.37
|
||||||||||||||||||
Consumer
|
6,097
|
7,294
|
102
|
139
|
6.71
|
7.64
|
||||||||||||||||||
Total loans
|
795,473
|
819,861
|
11,389
|
12,725
|
5.73
|
6.21
|
||||||||||||||||||
|
||||||||||||||||||||||||
Securities:
|
||||||||||||||||||||||||
Federal agencies & GSEs
|
53,349
|
41,517
|
126
|
155
|
0.94
|
1.49
|
||||||||||||||||||
Mortgage-backed & CMOs
|
76,999
|
99,391
|
338
|
486
|
1.76
|
1.96
|
||||||||||||||||||
State and municipal
|
191,536
|
182,499
|
1,927
|
1,975
|
4.02
|
4.33
|
||||||||||||||||||
Other
|
13,362
|
12,589
|
95
|
117
|
2.84
|
3.72
|
||||||||||||||||||
Total securities
|
335,246
|
335,996
|
2,486
|
2,733
|
2.97
|
3.25
|
||||||||||||||||||
|
||||||||||||||||||||||||
Deposits in other banks
|
46,817
|
17,630
|
39
|
18
|
0.33
|
0.41
|
||||||||||||||||||
|
||||||||||||||||||||||||
Total interest-earning assets
|
1,177,536
|
1,173,487
|
13,914
|
15,476
|
4.73
|
5.28
|
||||||||||||||||||
|
||||||||||||||||||||||||
Non-earning assets
|
124,955
|
134,897
|
||||||||||||||||||||||
|
||||||||||||||||||||||||
Total assets
|
$
|
1,302,491
|
$
|
1,308,384
|
||||||||||||||||||||
|
||||||||||||||||||||||||
Deposits:
|
||||||||||||||||||||||||
Demand
|
$
|
164,094
|
$
|
155,550
|
28
|
54
|
0.07
|
0.14
|
||||||||||||||||
Money market
|
169,417
|
172,439
|
78
|
127
|
0.18
|
0.30
|
||||||||||||||||||
Savings
|
84,471
|
78,608
|
17
|
30
|
0.08
|
0.15
|
||||||||||||||||||
Time
|
410,862
|
448,076
|
1,246
|
1,518
|
1.22
|
1.36
|
||||||||||||||||||
Total deposits
|
828,844
|
854,673
|
1,369
|
1,729
|
0.66
|
0.81
|
||||||||||||||||||
|
||||||||||||||||||||||||
Customer repurchase agreements
|
47,081
|
48,742
|
14
|
49
|
0.12
|
0.40
|
||||||||||||||||||
Other short-term borrowings
|
-
|
1,878
|
-
|
2
|
-
|
0.43
|
||||||||||||||||||
Long-term borrowings
|
37,393
|
37,419
|
271
|
290
|
2.90
|
3.10
|
||||||||||||||||||
Total interest-bearing liabilities
|
913,318
|
942,712
|
1,654
|
2,070
|
0.73
|
0.88
|
||||||||||||||||||
|
||||||||||||||||||||||||
Noninterest bearing demand deposits
|
216,600
|
199,754
|
||||||||||||||||||||||
Other liabilities
|
6,423
|
8,528
|
||||||||||||||||||||||
Shareholders' equity
|
166,150
|
157,390
|
||||||||||||||||||||||
Total liabilities and shareholders' equity
|
$
|
1,302,491
|
$
|
1,308,384
|
||||||||||||||||||||
|
||||||||||||||||||||||||
Interest rate spread
|
4.00
|
%
|
4.40
|
%
|
||||||||||||||||||||
Net interest margin
|
4.16
|
%
|
4.57
|
%
|
||||||||||||||||||||
|
||||||||||||||||||||||||
Net interest income (taxable equivalent basis)
|
12,260
|
13,406
|
||||||||||||||||||||||
Less: Taxable equivalent adjustment
|
567
|
590
|
||||||||||||||||||||||
Net interest income
|
$
|
11,693
|
$
|
12,816
|
|
Three Months Ended June 30
|
|||||||||||
|
2013 vs. 2012
|
|||||||||||
|
Interest
|
Change
|
||||||||||
|
Increase
|
Attributable to
|
||||||||||
Interest income
|
(Decrease)
|
Rate
|
Volume
|
|||||||||
Loans:
|
||||||||||||
Commercial
|
$
|
(122
|
)
|
$
|
(144
|
)
|
$
|
22
|
||||
Real Estate
|
(1,177
|
)
|
(791
|
)
|
(386
|
)
|
||||||
Consumer
|
(37
|
)
|
(16
|
)
|
(21
|
)
|
||||||
Total loans
|
(1,336
|
)
|
(951
|
)
|
(385
|
)
|
||||||
Securities:
|
||||||||||||
Federal agencies
|
(29
|
)
|
(66
|
)
|
37
|
|||||||
Mortgage-backed
|
(148
|
)
|
(46
|
)
|
(102
|
)
|
||||||
State and municipal
|
(48
|
)
|
(143
|
)
|
95
|
|||||||
Other securities
|
(22
|
)
|
(29
|
)
|
7
|
|||||||
Total securities
|
(247
|
)
|
(284
|
)
|
37
|
|||||||
Deposits in other banks
|
21
|
(4
|
)
|
25
|
||||||||
Total interest income
|
(1,562
|
)
|
(1,239
|
)
|
(323
|
)
|
||||||
|
||||||||||||
Interest expense
|
||||||||||||
Deposits:
|
||||||||||||
Demand
|
(26
|
)
|
(29
|
)
|
3
|
|||||||
Money market
|
(49
|
)
|
(47
|
)
|
(2
|
)
|
||||||
Savings
|
(13
|
)
|
(15
|
)
|
2
|
|||||||
Time
|
(272
|
)
|
(152
|
)
|
(120
|
)
|
||||||
Total deposits
|
(360
|
)
|
(243
|
)
|
(117
|
)
|
||||||
|
||||||||||||
Customer repurchase agreements
|
(35
|
)
|
(33
|
)
|
(2
|
)
|
||||||
Other borrowings
|
(21
|
)
|
(7
|
)
|
(14
|
)
|
||||||
Total interest expense
|
(416
|
)
|
(283
|
)
|
(133
|
)
|
||||||
Net interest income
|
$
|
(1,146
|
)
|
$
|
(956
|
)
|
$
|
(190
|
)
|
Net Interest Income Analysis
|
For the Six Months Ended June 30, 2013 and 2012
|
(in thousands, except rates)
|
|
Interest
|
|||||||||||||||||||||||
|
Average Balance
|
Income/Expense
|
Yield/Rate
|
|||||||||||||||||||||
|
||||||||||||||||||||||||
|
2013
|
2012
|
2013
|
2012
|
2013
|
2012
|
||||||||||||||||||
Loans:
|
||||||||||||||||||||||||
Commercial
|
$
|
128,022
|
$
|
137,057
|
$
|
3,195
|
$
|
3,538
|
5.03
|
%
|
5.18
|
%
|
||||||||||||
Real estate
|
659,254
|
674,964
|
19,410
|
21,977
|
5.89
|
6.51
|
||||||||||||||||||
Consumer
|
6,100
|
10,181
|
212
|
366
|
7.01
|
7.21
|
||||||||||||||||||
Total loans
|
793,376
|
822,202
|
22,817
|
25,881
|
5.76
|
6.30
|
||||||||||||||||||
|
||||||||||||||||||||||||
Securities:
|
||||||||||||||||||||||||
Federal agencies & GSEs
|
49,698
|
36,178
|
242
|
317
|
0.97
|
1.75
|
||||||||||||||||||
Mortgage-backed & CMOs
|
78,208
|
99,255
|
718
|
1,015
|
1.84
|
2.05
|
||||||||||||||||||
State and municipal
|
190,303
|
181,683
|
3,859
|
3,951
|
4.06
|
4.35
|
||||||||||||||||||
Other
|
12,612
|
10,462
|
190
|
211
|
3.01
|
4.03
|
||||||||||||||||||
Total securities
|
330,821
|
327,578
|
5,009
|
5,494
|
3.03
|
3.35
|
||||||||||||||||||
|
||||||||||||||||||||||||
Deposits in other banks
|
50,299
|
24,624
|
68
|
28
|
0.27
|
0.23
|
||||||||||||||||||
|
||||||||||||||||||||||||
Total interest-earning assets
|
1,174,496
|
1,174,404
|
27,894
|
31,403
|
4.75
|
5.35
|
||||||||||||||||||
|
||||||||||||||||||||||||
Non-earning assets
|
124,892
|
135,949
|
||||||||||||||||||||||
|
||||||||||||||||||||||||
Total assets
|
$
|
1,299,388
|
$
|
1,310,353
|
||||||||||||||||||||
|
||||||||||||||||||||||||
Deposits:
|
||||||||||||||||||||||||
Demand
|
$
|
159,351
|
$
|
163,014
|
60
|
110
|
0.08
|
0.14
|
||||||||||||||||
Money market
|
170,940
|
179,180
|
171
|
288
|
0.20
|
0.32
|
||||||||||||||||||
Savings
|
83,589
|
77,557
|
37
|
59
|
0.09
|
0.15
|
||||||||||||||||||
Time
|
412,467
|
447,720
|
2,537
|
3,109
|
1.24
|
1.39
|
||||||||||||||||||
Total deposits
|
826,347
|
867,471
|
2,805
|
3,566
|
0.68
|
0.82
|
||||||||||||||||||
|
||||||||||||||||||||||||
Customer repurchase agreements
|
48,679
|
47,986
|
35
|
92
|
0.14
|
0.38
|
||||||||||||||||||
Other short-term borrowings
|
-
|
997
|
-
|
2
|
-
|
0.40
|
||||||||||||||||||
Long-term borrowings
|
37,396
|
37,420
|
541
|
580
|
2.89
|
3.10
|
||||||||||||||||||
Total interest-bearing liabilities
|
912,422
|
953,874
|
3,381
|
4,240
|
0.75
|
0.89
|
||||||||||||||||||
|
||||||||||||||||||||||||
Noninterest bearing demand deposits
|
215,463
|
191,517
|
||||||||||||||||||||||
Other liabilities
|
6,164
|
8,925
|
||||||||||||||||||||||
Shareholders' equity
|
165,339
|
156,037
|
||||||||||||||||||||||
Total liabilities and shareholders' equity
|
$
|
1,299,388
|
$
|
1,310,353
|
||||||||||||||||||||
|
||||||||||||||||||||||||
Interest rate spread
|
4.00
|
%
|
4.46
|
%
|
||||||||||||||||||||
Net interest margin
|
4.18
|
%
|
4.63
|
%
|
||||||||||||||||||||
|
||||||||||||||||||||||||
Net interest income (taxable equivalent basis)
|
24,513
|
27,163
|
||||||||||||||||||||||
Less: Taxable equivalent adjustment
|
1,138
|
1,175
|
||||||||||||||||||||||
Net interest income
|
$
|
23,375
|
$
|
25,988
|
|
Six Months Ended June 30
|
|||||||||||
|
2013 vs. 2012
|
|||||||||||
|
Interest
|
Change
|
||||||||||
|
Increase
|
Attributable to
|
||||||||||
Interest income
|
(Decrease)
|
Rate
|
Volume
|
|||||||||
Loans:
|
||||||||||||
Commercial
|
$
|
(343
|
)
|
$
|
(115
|
)
|
$
|
(228
|
)
|
|||
Real Estate
|
(2,567
|
)
|
(2,065
|
)
|
(502
|
)
|
||||||
Consumer
|
(154
|
)
|
(12
|
)
|
(142
|
)
|
||||||
Total loans
|
(3,064
|
)
|
(2,192
|
)
|
(872
|
)
|
||||||
Securities:
|
||||||||||||
Federal agencies
|
(75
|
)
|
(169
|
)
|
94
|
|||||||
Mortgage-backed
|
(297
|
)
|
(97
|
)
|
(200
|
)
|
||||||
State and municipal
|
(92
|
)
|
(274
|
)
|
182
|
|||||||
Other securities
|
(21
|
)
|
(59
|
)
|
38
|
|||||||
Total securities
|
(485
|
)
|
(599
|
)
|
114
|
|||||||
Deposits in other banks
|
40
|
6
|
34
|
|||||||||
Total interest income
|
(3,509
|
)
|
(2,785
|
)
|
(724
|
)
|
||||||
|
||||||||||||
Interest expense
|
||||||||||||
Deposits:
|
||||||||||||
Demand
|
(50
|
)
|
(48
|
)
|
(2
|
)
|
||||||
Money market
|
(117
|
)
|
(104
|
)
|
(13
|
)
|
||||||
Savings
|
(22
|
)
|
(26
|
)
|
4
|
|||||||
Time
|
(572
|
)
|
(339
|
)
|
(233
|
)
|
||||||
Total deposits
|
(761
|
)
|
(517
|
)
|
(244
|
)
|
||||||
|
||||||||||||
Repurchase agreements
|
(57
|
)
|
(58
|
)
|
1
|
|||||||
Other borrowings
|
(41
|
)
|
(26
|
)
|
(15
|
)
|
||||||
Total interest expense
|
(859
|
)
|
(601
|
)
|
(258
|
)
|
||||||
Net interest income
|
$
|
(2,650
|
)
|
$
|
(2,184
|
)
|
$
|
(466
|
)
|
|
June 30, 2013
|
|||||||||||||||||||
(in thousands)
|
Income Statement Effect
|
Remaining Premium/ (Discount) Balance on December 31, 2012
|
For the three months ended
|
For the Six months ended
|
Remaining Premium/ (Discount) Balance
|
|||||||||||||||
|
|
|||||||||||||||||||
Interest income/(expense):
|
|
|||||||||||||||||||
Loans
|
Income
|
$
|
(9,631
|
)
|
$
|
1,078
|
$
|
2,681
|
$
|
(6,939
|
)
|
(1
|
)
|
|||||||
Accretable portion of loans acquired with deteriorated credit quality
|
Income
|
(2,165
|
)
|
915
|
1,222
|
(1,969
|
)
|
(2
|
)
|
|||||||||||
Time deposits - brokered
|
Income
|
(278
|
)
|
104
|
209
|
(69
|
)
|
|||||||||||||
FHLB advances
|
Expense
|
109
|
(6
|
)
|
(11
|
)
|
98
|
|||||||||||||
Trust preferred securities
|
Expense
|
2,066
|
(29
|
)
|
(51
|
)
|
2,015
|
|||||||||||||
Net Interest Income
|
|
2,062
|
4,050
|
|||||||||||||||||
|
|
|||||||||||||||||||
Non-interest (expense)
|
|
|||||||||||||||||||
Amortization of core deposit intangible
|
Expense
|
$
|
4,094
|
(326
|
)
|
(652
|
)
|
$
|
3,442
|
|||||||||||
Net non-interest expense
|
|
(326
|
)
|
(652
|
)
|
|||||||||||||||
|
|
|||||||||||||||||||
Change in pretax income
|
|
$
|
1,736
|
$
|
3,398
|
(in thousands)
|
Income
Statement
Effect
|
Remaining Premium/ (Discount) Balance on December 31, 2011
|
For the three months ended June 30, 2012
|
For the Six months ended June 30, 2012
|
Remaining Premium/ (Discount) Balance on June 30, 2012
|
||||||||||||||
|
|
||||||||||||||||||
Interest income/(expense):
|
|
||||||||||||||||||
Loans
|
Income
|
$
|
(15,908
|
)
|
$
|
1,646
|
$
|
3,361
|
$
|
(12,394
|
)
|
(1) | |||||||
Accretable portion of loans acquired with deteriorated credit quality
|
Income
|
(1,056
|
)
|
804
|
1,737
|
(1,235
|
)
|
(2) | |||||||||||
Time deposits
|
Income
|
(110
|
)
|
33
|
66
|
(44
|
)
|
||||||||||||
Time deposits - brokered
|
Income
|
(694
|
)
|
104
|
208
|
(486
|
)
|
||||||||||||
FHLB advances
|
Expense
|
(131
|
)
|
(6
|
)
|
(12
|
)
|
(119
|
)
|
||||||||||
Trust preferred securities
|
Expense
|
(2,171
|
)
|
(29
|
)
|
(54
|
)
|
(2,117
|
)
|
||||||||||
Net Interest Income
|
|
2,552
|
5,306
|
||||||||||||||||
|
|
||||||||||||||||||
Non-interest (expense)
|
|
||||||||||||||||||
Amortization of core deposit intangible
|
Expense
|
$
|
5,652
|
(452
|
)
|
(904
|
)
|
$
|
4,748
|
||||||||||
Net non-interest expense
|
|
(452
|
)
|
(904
|
)
|
||||||||||||||
|
|
||||||||||||||||||
Change in pretax income
|
|
$
|
2,100
|
$
|
4,402
|
|
June 30,
|
December 31,
|
||||||
(in thousands)
|
2013
|
2012
|
||||||
|
||||||||
Commercial
|
$
|
130,721
|
$
|
126,192
|
||||
Commercial real estate:
|
||||||||
Construction and land development
|
44,029
|
48,812
|
||||||
Commercial real estate
|
354,323
|
355,433
|
||||||
Residential real estate:
|
||||||||
Residential
|
168,965
|
161,033
|
||||||
Home equity
|
89,688
|
91,313
|
||||||
Consumer
|
6,319
|
5,922
|
||||||
Total loans
|
$
|
794,045
|
$
|
788,705
|
|
Six Months
Ended
|
Year Ended
|
||||||
|
June 30,
|
December 31,
|
||||||
|
2013
|
2012
|
||||||
|
||||||||
Balance at beginning of period
|
$
|
12,118
|
$
|
10,529
|
||||
|
||||||||
Charge-offs:
|
||||||||
Construction and land development
|
-
|
202
|
||||||
Commercial real estate
|
23
|
370
|
||||||
Residential real estate
|
109
|
579
|
||||||
Home equity
|
121
|
115
|
||||||
Total real estate
|
253
|
1,266
|
||||||
Commercial and industrial
|
109
|
748
|
||||||
Consumer
|
105
|
72
|
||||||
Total charge-offs
|
467
|
2,086
|
||||||
|
||||||||
Recoveries:
|
||||||||
Construction and land development
|
216
|
87
|
||||||
Commercial real estate
|
52
|
388
|
||||||
Residential real estate
|
89
|
252
|
||||||
Home equity
|
56
|
27
|
||||||
Total real estate
|
413
|
754
|
||||||
Commercial and industrial
|
241
|
707
|
||||||
Consumer
|
77
|
81
|
||||||
Total recoveries
|
731
|
1,542
|
||||||
|
||||||||
Net charge-offs (recoveries)
|
(264
|
)
|
544
|
|||||
Provision for loan losses
|
294
|
2,133
|
||||||
Balance at end of period
|
$
|
12,676
|
$
|
12,118
|
|
June 30,
|
December 31,
|
||||||
|
2013
|
2012
|
||||||
|
||||||||
Allowance to loans
|
1.60
|
%
|
1.54
|
%
|
||||
Net charge-offs (recoveries) to allowance (1)
|
(4.17
|
)
|
4.49
|
|||||
Net charge-offs (recoveries) to average loans (1)
|
(0.07
|
)
|
0.07
|
|||||
Nonperforming assets to total assets
|
0.88
|
0.90
|
||||||
Nonperforming loans to loans
|
0.73
|
0.67
|
||||||
Provision to net charge-offs (recoveries) (1)
|
(55.68
|
)
|
392.10
|
|||||
Provision to average loans (1)
|
0.04
|
0.26
|
||||||
Allowance to nonperforming loans
|
217.50
|
227.95
|
||||||
(1) - annualized
|
|
June 30,
|
December 31,
|
||||||
|
2013
|
2012
|
||||||
Nonaccrual loans:
|
||||||||
Real estate
|
$
|
5,800
|
$
|
5,261
|
||||
Commercial
|
19
|
52
|
||||||
Consumer
|
9
|
3
|
||||||
Total nonaccrual loans
|
5,828
|
5,316
|
||||||
|
||||||||
Loans past due 90 days and accruing interest:
|
||||||||
Real estate
|
-
|
-
|
||||||
Total past due loans
|
-
|
-
|
||||||
|
||||||||
Total nonperforming loans
|
5,828
|
5,316
|
||||||
|
||||||||
Foreclosed real estate
|
5,569
|
6,193
|
||||||
|
||||||||
Total nonperforming assets
|
$
|
11,397
|
$
|
11,509
|
|
June 30,
|
December 31,
|
||||||
|
2013
|
2012
|
||||||
|
||||||||
Accruing
|
$
|
290
|
$
|
499
|
||||
Nonaccruing
|
3,107
|
2,548
|
||||||
Total impaired loans
|
$
|
3,397
|
$
|
3,047
|
|
June 30,
|
December 31,
|
||||||
|
2013
|
2012
|
||||||
|
||||||||
Construction and land development
|
$
|
2,528
|
$
|
3,290
|
||||
Farmland
|
221
|
236
|
||||||
1-4 family residential
|
1,483
|
1,090
|
||||||
Multifamily (5 or more) residential
|
1,011
|
1,012
|
||||||
Commercial real estate
|
326
|
565
|
||||||
|
$
|
5,569
|
$
|
6,193
|
|
June 30,
2013
|
December 31,
2012
|
||||||
|
||||||||
Commitments to extend credit
|
$
|
171,561
|
$
|
170,202
|
||||
Standby letters of credit
|
4,754
|
4,591
|
||||||
Mortgage loan rate-lock commitments
|
9,996
|
9,486
|
|
June 30, 2013
|
|||||||
|
Change in Net Interest Income
|
|||||||
|
||||||||
Change in interest rates
|
Amount
|
Percent
|
||||||
|
||||||||
Up 4%
|
$
|
8,457
|
19.5
|
%
|
||||
Up 3%
|
6,325
|
14.6
|
%
|
|||||
Up 2%
|
4,101
|
9.5
|
%
|
|||||
Up 1%
|
1,870
|
4.3
|
%
|
Estimated Changes in Economic Value of Equity
|
||||||||||||
(dollars in thousands)
|
||||||||||||
|
||||||||||||
|
June 30, 2013
|
|||||||||||
|
||||||||||||
Change in interest rates
|
Amount
|
$ Change
|
% Change
|
|||||||||
|
||||||||||||
Up 4%
|
$
|
214,477
|
$
|
31,765
|
17.4
|
%
|
||||||
Up 3%
|
209,958
|
27,246
|
14.9
|
%
|
||||||||
Up 2%
|
203,958
|
21,246
|
11.6
|
%
|
||||||||
Up 1%
|
196,431
|
13,719
|
7.5
|
%
|
||||||||
Flat
|
182,712
|
-
|
Item 6. | Exhibits | |
|
11.0
|
Refer to EPS calculation in the Notes to Financial Statements
|
|
Section 302 Certification of Jeffrey V. Haley, President and Chief Executive Officer
|
|
|
||
|
Section 906 Certification of Jeffrey V. Haley, President and Chief Executive Officer
|
|
|
Section 906 Certification of William W. Traynham, Senior Vice President and Chief Financial Officer
|
|
/s/ Jeffrey V. Haley
|
|
|
Jeffrey V. Haley
|
|
Date – August 9, 2013
|
President and Chief Executive Officer
|
|
|
|
|
|
/s/ William W. Traynham
|
|
|
William W. Traynham
|
|
|
Senior Vice President and
|
|
Date – August 9, 2013
|
Chief Financial Officer
|
|
1. | I have reviewed this quarterly report on Form 10-Q of American National Bankshares Inc.; |
Trust Preferred Capital Notes
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Trust Preferred Capital Notes [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Trust Preferred Capital Notes | Note 9 – Trust Preferred Capital Notes On April 7, 2006, the AMNB Trust, a Delaware statutory trust and a wholly owned subsidiary of the Company, issued $20,000,000 of preferred securities in a private placement pursuant to an applicable exemption from registration. The Trust Preferred Securities mature on September 30, 2036, but may be redeemed at the Company's option (which option became effective beginning on September 30, 2011). Initially, the securities required quarterly distributions by the AMNB Trust to the holder of the Trust Preferred Securities at a fixed rate of 6.66%. Effective September 30, 2011, the rate resets quarterly at the three-month LIBOR plus 1.35%. Distributions are cumulative and will accrue from the date of original issuance, but may be deferred by the Company from time to time for up to 20 consecutive quarterly periods. The Company has guaranteed the payment of all required distributions on the Trust Preferred Securities. The proceeds of the Trust Preferred Securities received by the AMNB Trust, along with proceeds of $619,000 received by the trust from the issuance of common securities by the trust to the Company, were used to purchase $20,619,000 of the Company's junior subordinated debt securities (the "Trust Preferred Capital Notes"), issued pursuant to a junior subordinated debentures entered into between the Company and Wilmington Trust Company, as trustee. The proceeds of the Trust Preferred Capital Notes were used to fund the cash portion of the merger consideration to the former shareholders of Community First in connection with the Company's acquisition of that company, and for general corporate purposes. On July 1, 2011, in connection with the MidCarolina merger, the Company assumed $8,764,000 in junior subordinated debentures to the MidCarolina Trusts, to fully and unconditionally guarantee the preferred securities issued by the MidCarolina Trusts. These long-term obligations, which currently qualify as Tier 1 capital, constitute a full and unconditional guarantee by the Company of the MidCarolina Trusts' obligations. The MidCarolina Trusts are not consolidated in the Company's financial statements. In accordance with FASB ASC 810-10-15-14, the Company did not eliminate through consolidation the Company's $619,000 equity investment in AMNB Statutory Trust I or the $264,000 equity investment in the MidCarolina Trusts. Instead, the Company reflected this equity investment in the "Accrued interest receivable and other assets" line item in the consolidated balance sheets. A description of the junior subordinated debt securities outstanding payable to the trusts is shown below:
The principal amounts reflected for the MidCarolina Trusts are net of valuation allowances of $1,085,000 and $930,000, respectively. The original valuation allowances of $1,197,000 and $1,021,000 were recorded as a result of the merger with MidCarolina on July 1, 2011, and are being amortized into interest expense over the remaining lives of the respective borrowings. |
Trust Preferred Capital Notes, Debt Items (Details) (USD $)
|
6 Months Ended | 6 Months Ended | 6 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
MidCarolina I [Member]
|
Jul. 01, 2011
MidCarolina I [Member]
|
Jun. 30, 2013
MidCarolina II [Member]
|
Jul. 01, 2011
MidCarolina II [Member]
|
Jul. 01, 2011
MidCarolina Trust [Member]
|
Jun. 30, 2013
Junior Subordinated Debt Securities [Member]
|
Dec. 31, 2012
Junior Subordinated Debt Securities [Member]
|
Jun. 30, 2013
Junior Subordinated Debt Securities [Member]
AMNB Trust I [Member]
|
Dec. 31, 2012
Junior Subordinated Debt Securities [Member]
AMNB Trust I [Member]
|
Jun. 30, 2013
Junior Subordinated Debt Securities [Member]
MidCarolina I [Member]
|
Dec. 31, 2012
Junior Subordinated Debt Securities [Member]
MidCarolina I [Member]
|
Jun. 30, 2013
Junior Subordinated Debt Securities [Member]
MidCarolina II [Member]
|
Dec. 31, 2012
Junior Subordinated Debt Securities [Member]
MidCarolina II [Member]
|
|
Debt Instrument [Line Items] | |||||||||||||
Date Issued | Apr. 07, 2006 | Oct. 29, 2002 | Dec. 03, 2003 | ||||||||||
Interest Rate | Libor plus 1.35% | Libor plus 3.45% | Libor plus 2.95% | ||||||||||
Variable Rate Basis | Libor plus | Libor plus | Libor plus | ||||||||||
Basis Spread on Variable Rate (in hundredths) | 1.35% | 3.45% | 2.95% | ||||||||||
Maturity Date | Jun. 30, 2036 | Nov. 07, 2032 | Oct. 07, 2033 | ||||||||||
Principal Amount | $ 8,764,000 | $ 27,368,000 | $ 27,317,000 | $ 20,619,000 | $ 20,619,000 | $ 4,070,000 | $ 4,042,000 | $ 2,679,000 | $ 2,656,000 | ||||
Valuation allowance associated with junior subordinated debenture | $ 1,085,000 | $ 930,000 | $ 1,197,000 | $ 1,021,000 |
Consolidated Statements of Income (Unaudited) (USD $)
In Thousands, except Share data, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
|
Interest and Dividend Income: | ||||
Interest and fees on loans | $ 11,358 | $ 12,683 | $ 22,753 | $ 25,803 |
Interest and dividends on securities: | ||||
Taxable | 851 | 1,056 | 1,729 | 2,135 |
Tax-exempt | 1,045 | 1,077 | 2,097 | 2,159 |
Dividends | 54 | 52 | 109 | 103 |
Other interest income | 39 | 18 | 68 | 28 |
Total interest and dividend income | 13,347 | 14,886 | 26,756 | 30,228 |
Interest Expense: | ||||
Interest on deposits | 1,369 | 1,729 | 2,805 | 3,566 |
Interest on short-term borrowings | 14 | 51 | 35 | 94 |
Interest on long-term borrowings | 82 | 84 | 164 | 168 |
Interest on trust preferred capital notes | 189 | 206 | 377 | 412 |
Total interest expense | 1,654 | 2,070 | 3,381 | 4,240 |
Net Interest Income | 11,693 | 12,816 | 23,375 | 25,988 |
Provision for Loan Losses | 0 | 733 | 294 | 1,466 |
Net Interest Income After Provision for Loan Losses | 11,693 | 12,083 | 23,081 | 24,522 |
Noninterest Income: | ||||
Trust fees | 944 | 966 | 1,532 | 1,848 |
Service charges on deposit accounts | 429 | 413 | 838 | 901 |
Other fees and commissions | 463 | 445 | 922 | 902 |
Mortgage banking income | 531 | 519 | 1,249 | 1,050 |
Securities gains, net | 1 | 160 | 199 | 160 |
Other | 318 | 297 | 716 | 1,173 |
Total noninterest income | 2,686 | 2,800 | 5,456 | 6,034 |
Noninterest Expense: | ||||
Salaries | 3,503 | 3,809 | 6,942 | 7,920 |
Employee benefits | 867 | 799 | 1,766 | 1,877 |
Occupancy and equipment | 872 | 1,048 | 1,788 | 2,013 |
FDIC assessment | 161 | 213 | 322 | 446 |
Bank franchise tax | 185 | 182 | 372 | 365 |
Core deposit intangible amortization | 421 | 546 | 841 | 1,093 |
Foreclosed real estate, net | 193 | 171 | 436 | 18 |
Merger related expenses | 0 | (202) | 0 | 49 |
Other | 2,226 | 2,267 | 4,279 | 4,979 |
Total noninterest expense | 8,428 | 8,833 | 16,746 | 18,760 |
Income Before Income Taxes | 5,951 | 6,050 | 11,791 | 11,796 |
Income Taxes | 1,741 | 1,776 | 3,430 | 3,347 |
Net Income | $ 4,210 | $ 4,274 | $ 8,361 | $ 8,449 |
Net Income Per Common Share: | ||||
Basic (in dollars per share) | $ 0.54 | $ 0.55 | $ 1.06 | $ 1.08 |
Diluted (in dollars per share) | $ 0.53 | $ 0.54 | $ 1.06 | $ 1.08 |
Average Common Shares Outstanding: | ||||
Basic (in shares) | 7,867,222 | 7,832,162 | 7,862,719 | 7,827,195 |
Diluted (in shares) | 7,876,969 | 7,849,142 | 7,872,351 | 7,839,364 |
Merger with MidCarolina
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Jun. 30, 2013
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Merger with MidCarolina [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Merger with MidCarolina | Note 2 – Merger with MidCarolina On July 1, 2011, the Company completed its merger with MidCarolina Financial Corporation pursuant to the Agreement and Plan of Reorganization, dated December 15, 2010, between the Company and MidCarolina (the "merger agreement"). MidCarolina was headquartered in Burlington, North Carolina, and engaged in banking operations through its subsidiary bank, MidCarolina Bank. The transaction has significantly expanded the Company's footprint in North Carolina, adding eight branches in Alamance and Guilford Counties. Pursuant to the terms of the merger agreement, as a result of the merger, the holders of shares of MidCarolina common stock received 0.33 shares of the Company's common stock for each share of MidCarolina common stock held immediately prior to the effective date of the merger. Each option to purchase a share of MidCarolina common stock outstanding immediately prior to the effective date of the merger was converted into an option to purchase shares of Company common stock, adjusted for the 0.33 exchange ratio. Additionally, the holders of shares of noncumulative perpetual Series A preferred stock of MidCarolina received one share of a newly authorized noncumulative perpetual Series A preferred stock of the Company for each MidCarolina preferred share held immediately before the merger. The Company's Series A preferred stock was issued with terms, preferences, rights and limitations that are identical in all material respects to the MidCarolina Series A preferred stock. The Company issued 1,626,157 shares of common stock in connection with the MidCarolina merger. MidCarolina Bank was merged with and into the Bank on July 1, 2011. The merger with MidCarolina was accounted for using the acquisition method of accounting and, accordingly, assets acquired, liabilities assumed and consideration paid were recorded at their estimated fair values as of the merger date. The excess of consideration paid over the fair value of net assets acquired was originally recorded as goodwill in the amount of approximately $16.5 million, which will not be amortizable and is not deductible for tax purposes. The Company allocated the total balance of goodwill to its community banking segment. The Company also recorded $6.6 million in core deposit intangibles which will be amortized over nine years using a declining balance method. In connection with the merger, the consideration paid, and the fair value of identifiable assets acquired and liabilities assumed as of the merger date are summarized in the following table.
In many cases, the fair values of assets acquired and liabilities assumed were determined by estimating the cash flows expected to result from those assets and liabilities and discounting them at appropriate market rates. The most significant category of assets for which this procedure was used was that of acquired loans. The Company acquired the $367.4 million loan portfolio at a fair value discount of $39.9 million. The estimated fair value of the performing portion of the portfolio was $286.5 million. The excess of expected cash flows above the fair value of the performing portion of loans will be accreted to interest income over the remaining lives of the loans in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 310-20 (formerly SFAS 91). Certain loans, those for which specific credit-related deterioration since origination was identified, are recorded at fair value, reflecting the present value of the amounts expected to be collected. Income recognition on these loans is based on reasonable expectations about the timing and amount of cash flows to be collected. Acquired loans deemed impaired and considered collateral dependent, with the timing of the sale of loan collateral indeterminate, remain on non-accrual status and have no accretable yield. The following table details the acquired loans that are accounted for in accordance with FASB ASC 310-30 (formerly Statement of Position ("SOP") 03-3) as of July 1, 2011 (in thousands).
In accordance with GAAP, there was no carryover of the allowance for loan losses that had been previously recorded by MidCarolina. In connection with the merger with MidCarolina, the Company acquired an investment portfolio with a fair value of $51.4 million. The fair value of the investment portfolio was determined by taking into account market prices obtained from independent valuation sources. In connection with the merger with MidCarolina, the Company recorded a deferred income tax asset of $15.3 million related to MidCarolina's valuation allowance on foreclosed real estate and bad debt expenses, as well as other tax attributes of the acquired company, along with the effects of fair value adjustments resulting from applying the acquisition method of accounting. In connection with the merger with MidCarolina, the Company acquired other real estate owned with a fair value of $3.5 million. Other real estate owned was measured at fair value less estimated cost to sell. In connection with the merger with MidCarolina, the Company acquired premises and equipment with a fair value of $5.7 million. Property appraisals for all owned locations were obtained. The fair value adjustment will be amortized as expense over the remaining lives of the properties. The Company also acquired several lease obligations in connection with the merger. The unfavorable lease position will be amortized over the remaining lives of the leases. The fair value of savings and transaction deposit accounts acquired from MidCarolina was assumed to approximate their carrying value as these accounts have no stated maturity and are payable on demand. Certificates of deposit accounts were valued by comparing the contractual cost of the portfolio to an identical portfolio bearing current market rates. The portfolio was segregated into pools based on segments: retail, individual retirement accounts brokered, and Certificate of Deposit Account Registry Service® (often referred to as "CDARS"). For each segment, the projected cash flows from maturing certificates were then calculated based on contractual rates and prevailing market rates. The valuation adjustment for each segment is equal to the present value of the difference of these two cash flows, discounted at the assumed market rate for a certificate with a corresponding maturity. This valuation adjustment will be accreted to reduce interest expense over the remaining maturities of the respective pools. The fair value of the Federal Home Loan Bank of Atlanta ("FHLB") advances was determined based on the discounted cash flows of future payments. This adjustment to the face value of the borrowings will be amortized to increase interest expense over the remaining lives of the respective borrowings. The fair value of junior subordinated debentures (Other Borrowings) was determined based on the fair value of similar debt or equity instruments with reasonably comparable terms. This adjustment to the face value of the borrowings will be amortized to increase interest expense over the remaining lives of the respective borrowings. Direct costs related to the acquisition were expensed as incurred. During the entire year of 2011, the Company incurred $1,600,000 in merger and acquisition expenses. During 2012, the Company incurred $251,000 in merger related expense. There were no merger related expenses in the three or six months ended June 30, 2013. |
Accumulated Other Comprehensive Income
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Jun. 30, 2013
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Accumulated Other Comprehensive Income [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income | Note 16 – Accumulated Other Comprehensive Income Changes in each component of accumulated other comprehensive income for the three and six months ended June 30, 2013 and 2012 were as follows (in thousands):
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Employee Benefit Plans (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2013
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Jun. 30, 2012
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Jun. 30, 2013
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Jun. 30, 2012
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Components of Net Periodic Benefit Cost [Abstract] | ||||
Service cost | $ 0 | $ 0 | $ 0 | $ 0 |
Interest cost | 72 | 97 | 144 | 194 |
Expected return on plan assets | (128) | (135) | (256) | (270) |
Recognized net actuarial loss | 69 | 83 | 138 | 166 |
Net periodic benefit cost | $ 13 | $ 45 | $ 26 | $ 90 |
Stock Based Compensation
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Jun. 30, 2013
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Stock-Based Compensation [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Note 10 – Stock Based Compensation The Company's 2008 Stock Incentive Plan ("2008 Plan") was adopted by the Board of Directors of the Company on February 19, 2008, and approved by shareholders on April 22, 2008, at the Company's 2008 Annual Meeting of Shareholders. The 2008 Plan provides for the granting of restricted stock awards and incentive and non-statutory options to employees and directors on a periodic basis, at the discretion of the Board of Directors or a Board designated committee. The 2008 Plan authorizes the issuance of up to 500,000 shares of common stock. The 2008 Plan replaced the Company's stock option plan that was approved by the shareholders at the 1997 Annual Meeting, which plan terminated in 2006. Stock Options Accounting guidance requires that compensation cost relating to share-based payment transactions be recognized in the financial statements with measurement based upon the fair value of the equity or liability instruments issued. A summary of stock option transactions for the six months ended June 30, 2013 is as follows:
The fair value of options is estimated at the date of grant using the Black-Scholes option pricing model and expensed over the options' vesting period. As of June 30, 2013, there was no unrecognized compensation expenses related to nonvested stock option grants. Restricted Stock The Company from time-to-time grants shares of restricted stock to key employees and non-employee directors. These awards help align the interests of these employees and directors with the interests of the shareholders of the Company by providing economic value directly related to increases in the value of the Company's common stock. The value of the stock awarded is established as the fair market value of the stock at the time of the grant. The Company recognizes expense, equal to the total value of such awards, ratably over the vesting period of the stock grants. Restricted stock granted cliff vests over 24 to 36 months based on the term of the award. Nonvested restricted stock activity for the six months ended June 30, 2013 is summarized in the following table.
As of June 30, 2013 and December 31, 2012, there was 431,000 and $525,000 in unrecognized compensation cost related to nonvested restricted stock granted under the 2008 Plan. The weighted average period over which this cost is expected to be recognized is 1.24 years. The share based compensation expense for nonvested restricted stock was $140,000 and $174,000 during the first six months of 2013 and 2012, respectively. Starting in 2010, the Company began offering its outside directors alternatives with respect to director compensation. For 2012, the regular quarterly board retainer could be received in the form of either (i) $3,000 in cash or (ii) shares of immediately vested, but restricted stock with a market value of $4,688. Monthly meeting fees can also be received as $600 per meeting in cash or $750 in immediately vested, but restricted stock. For 2013, all 11 outside directors have elected to receive stock in lieu of cash for their monthly retainer board meeting fees. Only outside directors receive board fees. The Company issued 7,217 and 11,136 shares and recognized share based compensation expense of $153,000 and $240,000 during the first six months of 2013 and 2012, respectively. |
Fair Value of Financial Instruments (Tables)
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Schedule of fair value assets and liabilities measured on recurring basis | The following table presents the balances of financial assets and liabilities measured at fair value on a recurring basis during the period (in thousands):
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Schedule of fair value measurements using significant unobservable inputs (Level 3) |
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Schedule of assets that were measured at fair value on a nonrecurring basis | The following table summarizes the Company's assets that were measured at fair value on a nonrecurring basis at the dates indicated, (in thousands):
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Schedule of quantitative information of assets measured at Level 3 | The following tables present quantitative information about Level 3 Fair Value Measurements as of June 30, 2013 and December 31, 2012.
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Schedule of carrying values and estimated fair values of the entity's financial instruments | The carrying values and estimated fair values of the Company's financial instruments at June 30, 2013 are as follows (in thousands):
The carrying values and estimated fair values of the Company's financial instruments at December 31, 2012 are as follows (in thousands):
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Securities (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of amortized cost and estimated fair value of investments in debt securities | The amortized cost and estimated fair value of investments in debt and equity securities at June 30, 2013 and December 31, 2012 were as follows:
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Schedule of available for sale securities, continuous unrealized loss position | Available for sale securities that have been in a continuous unrealized loss position are as follows:
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Merger with MidCarolina (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Merger with MidCarolina [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of consideration paid, and the fair value of identifiable assets acquired and liabilities assumed | In connection with the merger, the consideration paid, and the fair value of identifiable assets acquired and liabilities assumed as of the merger date are summarized in the following table.
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Schedule of acquired loans that are accounted for in accordance with FASB ASC 310-30 | The following table details the acquired loans that are accounted for in accordance with FASB ASC 310-30 (formerly Statement of Position ("SOP") 03-3) as of July 1, 2011 (in thousands).
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Stock Based Compensation (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Stock-Based Compensation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of summary of stock option transactions | A summary of stock option transactions for the six months ended June 30, 2013 is as follows:
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Schedule of nonvested restricted stock activity | Nonvested restricted stock activity for the six months ended June 30, 2013 is summarized in the following table.
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Accumulated Other Comprehensive Income (Tables)
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6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Accumulated Other Comprehensive Income [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Component of accumulated other comprehensive income (loss) | Changes in each component of accumulated other comprehensive income for the three and six months ended June 30, 2013 and 2012 were as follows (in thousands):
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Reclassification out of accumulated other comprehensive income |
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Goodwill and Other Intangible Assets (Details) (USD $)
|
3 Months Ended | 6 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
MidCarolina [Member]
|
Jul. 01, 2011
MidCarolina [Member]
|
Jun. 30, 2013
Community First [Member]
|
|
Acquired Finite-Lived Intangible Assets [Line Items] | |||||||
Core deposit intangible | $ 6,556,000 | $ 6,556,000 | $ 3,112,000 | ||||
Amortization period of intangible | 9 years | 108 months | 99 months | ||||
Changes in the carrying amount of goodwill [Roll Forward] | |||||||
Goodwill, beginning of period | 39,043,000 | 16,575,000 | |||||
Goodwill, Additions | 0 | ||||||
Goodwill, Amortization | 0 | ||||||
Goodwill, Impairment | 0 | ||||||
Goodwill, end of period | 39,043,000 | 39,043,000 | 16,575,000 | ||||
Finite-lived Intangible Assets [Roll Forward] | |||||||
Intangibles, Beginning Balance | 4,660,000 | ||||||
Intangibles, Additions | 0 | ||||||
Intangibles, Amortization | (421,000) | (546,000) | (841,000) | (1,093,000) | |||
Intangibles, Impairment | 0 | ||||||
Intangibles, Ending Balance | $ 3,819,000 | $ 3,819,000 |
Short-term Borrowings (Tables)
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6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Short-term Borrowings [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
Schedule of short-term borrowings | Short-term borrowings consist of customer repurchase agreements, overnight borrowings from the FHLB, and Federal Funds purchased. Customer repurchase agreements are collateralized by securities of the U.S. Government or its agencies or GSEs. They mature daily. The interest rates may be changed at the discretion of the Company. The securities underlying these agreements remain under the Company's control. FHLB overnight borrowings contain floating interest rates that may change daily at the discretion of the FHLB. Federal Funds purchased are unsecured overnight borrowings from other financial institutions. Short-term borrowings consisted of the following as of June 30, 2013 and December 31, 2012 (in thousands):
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Recent Accounting Pronouncements
|
6 Months Ended |
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Jun. 30, 2013
|
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Recent Accounting Pronouncements [Abstract] | |
Recent Accounting Pronouncements | Note 17 – Recent Accounting Pronouncements In December 2011, the FASB issued ASU 2011-11, "Balance Sheet (Topic 210) – Disclosures about Offsetting Assets and Liabilities." This ASU requires entities to disclose both gross information and net information about both instruments and transactions eligible for offset in the balance sheet and instruments and transactions subject to an agreement similar to a master netting arrangement. An entity is required to apply the amendments for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. An entity should provide the disclosures required by those amendments retrospectively for all comparative periods presented. The adoption of the new guidance did not have a material impact on the Company's consolidated financial statements. In July 2012, the FASB issued ASU 2012-02, "Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment." The amendments in this ASU apply to all entities that have indefinite-lived intangible assets, other than goodwill, reported in their financial statements. The amendments in this ASU provide an entity with the option to make a qualitative assessment about the likelihood that an indefinite-lived intangible asset is impaired to determine whether it should perform a quantitative impairment test. The amendments also enhance the consistency of impairment testing guidance among long-lived asset categories by permitting an entity to assess qualitative factors to determine whether it is necessary to calculate the asset's fair value when testing an indefinite-lived intangible asset for impairment. The amendments are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted. The adoption of the new guidance did not have a material impact on the Company's consolidated financial statements. In January 2013, the FASB issued ASU 2013-01, "Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities." The amendments in this ASU clarify the scope for derivatives accounted for in accordance with Topic 815, Derivatives and Hedging, including bifurcated embedded derivatives, repurchase agreements and reverse repurchase agreements and securities borrowing and securities lending transactions that are either offset or subject to netting arrangements. An entity is required to apply the amendments for fiscal years, and interim periods within those years, beginning on or after January 1, 2013. The adoption of the new guidance did not have a material impact on the Company's consolidated financial statements. In February 2013, the FASB issued ASU 2013-02, "Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income." The amendments in this ASU require an entity to present (either on the face of the statement where net income is presented or in the notes) the effects on the line items of net income of significant amounts reclassified out of accumulated other comprehensive income. In addition, the amendments require a cross-reference to other disclosures currently required for other reclassification items to be reclassified directly to net income in their entirety in the same reporting period. Companies should apply these amendments for fiscal years, and interim periods within those years, beginning on or after December 15, 2012. The Company has included the required disclosures from ASU 2013-02 in the consolidated financial statements. Refer to the Company's Annual Report on Form 10-K for the year ended December 31, 2012 for previously announced accounting pronouncements. |
Consolidated Statements of Changes in Shareholders' Equity (Unaudited) (USD $)
In Thousands, unless otherwise specified |
Common Stock [Member]
|
Capital in Excess of Par Value [Member]
|
Retained Earnings [Member]
|
Accumulated Other Comprehensive Income (Loss) [Member]
|
Total
|
---|---|---|---|---|---|
Balance at Dec. 31, 2011 | $ 7,807 | $ 56,395 | $ 81,797 | $ 6,830 | $ 152,829 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 0 | 0 | 8,449 | 0 | 8,449 |
Other comprehensive loss | 0 | 0 | 0 | 291 | 291 |
Stock options exercised | 3 | 42 | 0 | 0 | 45 |
Equity based compensation | 26 | 388 | 0 | 0 | 414 |
Cash dividends declared | 0 | 0 | (3,604) | 0 | (3,604) |
Balance at Jun. 30, 2012 | 7,836 | 56,825 | 86,642 | 7,121 | 158,424 |
Balance at Dec. 31, 2012 | 7,847 | 57,211 | 90,591 | 7,597 | 163,246 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 0 | 0 | 8,361 | 0 | 8,361 |
Other comprehensive loss | 0 | 0 | 0 | (5,447) | (5,447) |
Stock options exercised | 6 | 96 | 0 | 0 | 102 |
Equity based compensation | 19 | 274 | 0 | 0 | 293 |
Cash dividends declared | 0 | 0 | (3,619) | 0 | (3,619) |
Balance at Jun. 30, 2013 | $ 7,872 | $ 57,581 | $ 95,333 | $ 2,150 | $ 162,936 |
Securities
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6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Securities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Securities | Note 3 – Securities The amortized cost and estimated fair value of investments in debt and equity securities at June 30, 2013 and December 31, 2012 were as follows:
Temporarily Impaired Securities The following table shows estimated fair value and gross unrealized losses, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at June 30, 2013. The reference point for determining when securities are in an unrealized loss position is month-end. Therefore, it is possible that a security's market value exceeded its amortized cost on other days during the past twelve-month period. Available for sale securities that have been in a continuous unrealized loss position are as follows:
GSE debt securities: The unrealized losses on the Company's investment in 17 government sponsored entities ("GSE") were caused by interest rate increases. The contractual terms of those investments do not permit the issuer to settle the securities at a price less than the amortized cost bases of the investments. Because the Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost bases, which may be maturity, the Company does not consider those investments to be other-than-temporarily impaired at June 30, 2013. Mortgage-backed securities and CMOs: The unrealized losses on the Company's investment in 22 GSE mortgage-backed securities and CMOs were caused by interest rate increases. The contractual cash flows of those investments are guaranteed by an agency of the U.S. Government. Accordingly, it is expected that the securities would not be settled at a price less than the amortized cost basis of the Company's investments. Because the decline in market value is attributable to changes in interest rates and not credit quality, and because the Company does not intend to sell the investments and it is not more likely than not 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 those investments to be other-than-temporarily impaired at June 30, 2013. State and municipal securities: The unrealized losses on 35 state and municipal securities were caused by interest rate increases. The contractual terms of those investments do not permit the issuer to settle the securities at a price less than the amortized cost basis of the investments. Because the Company does not intend to sell the investments and it is not more likely than not 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 those investments to be other-than-temporarily impaired at June 30, 2013. Corporate securities: The unrealized losses on eight investments in corporate securities were caused by interest rate increases. The contractual terms of those investments do not permit the issuer to settle the securities at a price less than the amortized cost basis of the investments. Because the Company does not intend to sell the investments and it is not more likely than not 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 those investments to be other-than-temporarily impaired at June 30, 2013. The Company's investment in FHLB stock totaled $2,000,000 at June 30, 2013. FHLB stock is generally viewed as a long-term investment and as a restricted investment security, which is carried at cost, because there is no market for the stock, other than the FHLB or member institutions. Therefore, when evaluating FHLB stock for impairment, its value is based on the ultimate recoverability of the par value rather than by recognizing temporary declines in value. The Company does not consider this investment to be other-than-temporarily impaired at June 30, 2013 and no impairment has been recognized. FHLB stock is shown in restricted stock on the balance sheet and is not a part of the available for sale securities portfolio. The table below shows gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities had been in a continuous unrealized loss position, at December 31, 2012.
Other-Than-Temporary-Impaired Securities As of June 30, 2013 and December 31, 2012, there were no securities classified as having other-than-temporary impairment. |
Basis of Presentation
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6 Months Ended |
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Jun. 30, 2013
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Basis of Presentation [Abstract] | |
Basis of Presentation | Note 1 – Basis of Presentation The consolidated financial statements include the accounts of American National Bankshares Inc. (the "Company") and its wholly owned subsidiary, American National Bank and Trust Company (the "Bank"). The Bank offers a wide variety of retail, commercial, secondary market mortgage lending, and trust and investment services which also include non-deposit products such as mutual funds and insurance policies. The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, pension obligations, the valuation of foreclosed real estate, goodwill and intangible assets, the valuation of deferred tax assets, other-than-temporary impairments of securities, acquired loans with specific credit-related deterioration, and the fair value of financial instruments. In April 2006, AMNB Statutory Trust I, a Delaware statutory trust (the "AMNB Trust") and a wholly owned subsidiary of the Company, was formed for the purpose of issuing preferred securities (the "Trust Preferred Securities") in a private placement pursuant to an applicable exemption from registration. Proceeds from the securities were used to fund the acquisition of Community First Financial Corporation ("Community First") which occurred in April 2006. On July 1, 2011, the Company completed its merger with MidCarolina Financial Corporation ("MidCarolina"). MidCarolina was headquartered in Burlington, North Carolina, and engaged in banking operations through its subsidiary bank, MidCarolina Bank. In July 2011, and in connection with its acquisition of MidCarolina, the Company assumed the liabilities of the MidCarolina I and MidCarolina Trust II, two separate Delaware statutory trusts (the "MidCarolina Trusts"), which were also formed for the purpose of issuing preferred securities. Refer to Note 9 for further details concerning these entities. All significant inter-company transactions and accounts are eliminated in consolidation, with the exception of the AMNB Trust and the MidCarolina Trusts, as detailed in Note 9. In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of normal recurring accruals) necessary to present fairly the Company's financial position as of June 30, 2013; the consolidated statements of income for the three and six months ended June 30, 2013 and 2012; the consolidated statements of comprehensive income (loss) for the three and six months ended June 30, 2013 and 2012; the consolidated statements of changes in shareholders' equity for the six months ended June 30, 2013 and 2012; and the consolidated statements of cash flows for the six months ended June 30, 2013 and 2012. Operating results for the three and six month periods ended June 30, 2013 are not necessarily indicative of the results that may occur for the year ending December 31, 2013. Certain reclassifications have been made to prior period balances to conform to the current period presentation. These statements should be read in conjunction with the Notes to Consolidated Financial Statements included in the Company's Form 10-K for the year ended December 31, 2012. |
Loans (Tables)
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Jun. 30, 2013
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Loans [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of loans, excluding loans held for sale | Loans, excluding loans held for sale, were comprised of the following:
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Schedule stating outstanding principal balance and the carrying amount of loan acquired | Interest income, including accretion, on loans acquired from MidCarolina for the six months ended June 30, 2013 was approximately $9.5 million. This included $3.9 million in accretion income of which $976,000 was related to loan pay-offs and renewals. The outstanding principal balance and the carrying amount of these loans included in the consolidated balance sheet at June 30, 2013 and December 31, 2012 are as follows:
The outstanding principal balance and related carrying amount of acquired impaired loans, for which the Company applies ASC 310-30 (formerly SOP 03-3), to account for interest earned, at June 30, 2013 and December 31, 2012 are as follows:
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Schedule of changes in the accretable discount on acquired loans | The following table presents changes in the accretable discount on acquired impaired loans, for which the Company applies ASC 310-30 (formerly SOP 03-3), for the six months ended June 30, 2013. The accretion reflected below includes $976,000 related to loan payoffs.
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Schedule of analysis by portfolio segment of the entity's past due loans | The following table shows an analysis by portfolio segment of the Company's past due loans at June 30, 2013.
The following table shows an analysis by portfolio segment of the Company's past due loans at December 31, 2012.
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Schedule of impaired loan balances by portfolio segment | The following table presents the Company's impaired loan balances by portfolio segment, excluding loans acquired with deteriorated credit quality, at June 30, 2013.
The following table presents the Company's impaired loan balances by portfolio segment, excluding loans acquired with deteriorated credit quality, at December 31, 2012.
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Schedule of detail of loans modified as troubled debt restructurings | There were no loans modified as a troubled debt restructuring ("TDR") for the three or six months ended June 30, 2013. The following table shows the detail of loans modified as TDRs during the three and six months ended June 30, 2012 included in the impaired loan balances.
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Schedule of commercial loan portfolio broken down by internal risk grading | The following table shows the Company's commercial loan portfolio broken down by internal risk grading as of June 30, 2013.
The following table shows the Company's commercial loan portfolio broken down by internal risk grading as of December 31, 2012.
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Long-term Borrowings (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Long-term Borrowings [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of long term advances with federal home loan bank | Under the terms of its collateral agreement with the FHLB, the Company provides a blanket lien covering all of its residential first mortgage loans, second mortgage loans, home equity lines of credit, and commercial real estate loans. In addition, the Company pledges as collateral its capital stock in the FHLB and deposits with the FHLB. The Company has a line of credit with the FHLB equal to 30% of the Company's assets, subject to the amount of collateral pledged. As of June 30, 2013, $392,781,000 in eligible collateral was pledged under the blanket floating lien agreement which covers both short-term and long-term borrowings. Long-term borrowings consisted of the following fixed rate, long-term advances as of June 30, 2013 and December 31, 2012 (dollars in thousands):
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Segment and Related Information (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Segment and Related Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of segment information | Segment information as of and for the three and six months ended June 30, 2013 and 2012, is shown in the following table.
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Earnings Per Share (Details) (USD $)
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3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2013
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Jun. 30, 2012
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Jun. 30, 2013
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Jun. 30, 2012
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Shares [Abstract] | ||||
Basic earnings per share (in shares) | 7,867,222 | 7,832,162 | 7,862,719 | 7,827,195 |
Effect of dilutive securities - stock options (in shares) | 9,747 | 16,980 | 9,632 | 12,169 |
Diluted earnings per share (in shares) | 7,876,969 | 7,849,142 | 7,872,351 | 7,839,364 |
Per Share Amount [Abstract] | ||||
Basic earnings per share (in dollars per share) | $ 0.54 | $ 0.55 | $ 1.06 | $ 1.08 |
Effect of dilutive securities - stock options (in dollars per share) | $ (0.01) | $ (0.01) | $ 0 | $ 0 |
Diluted earnings per share (in dollars per share) | $ 0.53 | $ 0.54 | $ 1.06 | $ 1.08 |
Stock Options [Member]
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Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities not included in computation of earning per share (in shares) | 182,620 | 196,394 |
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