Ohio
|
34-1585111
|
|||
( State or other
jurisdiction
of incorporation or
organization)
|
( IRS
Employer
Identification
No.)
|
|
1.
|
The Middlefield Banking Company (“MBC”), an Ohio-chartered commercial bank that began operations in 1901. MBC engages in a general commercial banking business in northeastern Ohio. The principal executive office is located at 15985 East High Street, Middlefield, Ohio 44062-0035, and its telephone number is (440) 632-1666.
|
|
2.
|
Emerald Bank (“EB”), an Ohio-chartered commercial bank headquartered in Dublin, Ohio. EB engages in a general commercial banking business in central Ohio. The principal executive office is located at 6215 Perimeter Drive, Dublin Ohio 43017, and its telephone number is (614) 793-4631.
|
|
3.
|
EMORECO Inc., an Ohio asset resolution corporation headquartered in Middlefield, Ohio. EMORECO engages in the resolution and disposition of troubled assets in central Ohio. The principal executive office is located at 15985 East High Street, Middlefield, Ohio 44062-0035, and its telephone number is (440) 632-1666.
|
Loan Portfolio Composition at December 31,
|
|||||||||||||||||||||||||||||||||||
2012
|
2011
|
2010
|
2009
|
2008
|
|||||||||||||||||||||||||||||||
(Dollars in thousands)
|
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
|||||||||||||||||||||||||
Type of loan:
|
|||||||||||||||||||||||||||||||||||
Commercial and industrial
|
$ | 62,188 | 15.23 | % | $ | 59,185 | 14.73 | % | $ | 57,501 | 15.44 | % | $ | 56,969 | 16.11 | % | $ | 66,524 | 20.69 | % | |||||||||||||||
Real estate construction
|
22,522 | 5.51 | 21,545 | 5.36 | 15,845 | 4.25 | 7,837 | 2.22 | 7,965 | 2.48 | |||||||||||||||||||||||||
Mortgage:
|
|||||||||||||||||||||||||||||||||||
Residential
|
203,872 | 49.92 | 208,139 | 51.79 | 209,863 | 56.34 | 205,074 | 58.00 | 199,354 | 61.99 | |||||||||||||||||||||||||
Commercial
|
115,734 | 28.34 | 108,502 | 27.00 | 84,304 | 22.63 | 78,763 | 22.27 | 42,789 | 13.31 | |||||||||||||||||||||||||
Consumer installment
|
4,117 | 1.00 | 4,509 | 1.12 | 4,985 | 1.34 | 4,954 | 1.40 | 4,943 | 1.53 | |||||||||||||||||||||||||
Total loans
|
408,433 | 100.00 |
%
|
401,880 | 100.00 |
%
|
372,498 | 100.00 |
%
|
353,597 | 100.00 |
%
|
321,575 | 100.00 | % | ||||||||||||||||||||
Less:
|
|||||||||||||||||||||||||||||||||||
Allowance for loan losses
|
7,779 | 6,819 | 6,221 | 4,937 | 3,557 | ||||||||||||||||||||||||||||||
Net loans
|
$ | 400,654 | $ | 395,061 | $ | 366,277 | $ | 348,660 | $ | 318,018 |
Loan Portfolio Maturity at December 31,2012
|
||||||||||||||||||||||||
Commercial
and |
Real Estate
|
Mortgage
|
Consumer
|
|||||||||||||||||||||
(Dollars in thousands)
|
Industrial
|
Construction
|
Residential
|
Commercial
|
Installment
|
Total
|
||||||||||||||||||
Amount due:
|
||||||||||||||||||||||||
In one year or less
|
$ | 12,059 | $ | 4,378 | $ | 3,562 | $ | 4,609 | $ | 229 | $ | 24,837 | ||||||||||||
After one year through five years
|
19,503 | 611 | 16,006 | 3,498 | 3,517 | 43,135 | ||||||||||||||||||
After five years
|
30,626 | 17,533 | 184,304 | 107,627 | 371 | 340,461 | ||||||||||||||||||
Total amount due
|
$ | 62,188 | $ | 22,522 | $ | 203,872 | $ | 115,734 | $ | 4,117 | $ | 408,433 |
Fixed
Rate |
Adjustable
Rate |
Total
|
||||||||||
(Dollars in thousands)
|
||||||||||||
Commercial and industrial
|
$ | 24,424 | $ | 37,764 | $ | 62,188 | ||||||
Real estate construction
|
5,837 | 16,685 | 22,522 | |||||||||
Mortgage:
|
||||||||||||
Residential
|
18,197 | 185,675 | 203,872 | |||||||||
Commercial
|
7,777 | 107,957 | 115,734 | |||||||||
Consumer installment
|
4,043 | 74 | 4,117 | |||||||||
$ | 60,278 | $ | 348,155 | $ | 408,433 |
•
|
accounts receivable, inventory and
|
•
|
short-term notes
|
|||
working capital loans
|
•
|
selected guaranteed or subsidized loan programs
|
||||
•
|
renewable operating lines of credit
|
for small businesses
|
||||
•
|
loans to finance capital equipment
|
•
|
loans to professionals
|
|||
•
|
term business loans
|
•
|
commercial real estate loans
|
•
|
residential construction loans to borrowers who will occupy the premises upon completion of construction,
|
•
|
residential construction loans to builders,
|
•
|
commercial construction loans, and
|
•
|
real estate acquisition and development loans.
|
Classified Loans at December 31,
|
||||||||||||||||||||||||||||||||||||||||
2012
|
2011
|
2010
|
2009
|
2008
|
||||||||||||||||||||||||||||||||||||
(Dollars in thousands) |
Amount
|
Percent
of total
loans
|
Amount
|
Percent
of total
loans
|
Amount
|
Percent
of total
loans
|
Amount
|
Percent
of total
loans
|
Amount
|
Percent
of total
loans
|
||||||||||||||||||||||||||||||
Classified loans:
|
||||||||||||||||||||||||||||||||||||||||
Special mention
|
$ | 3,364 | 0.82 | % | $ | 2,653 | 0.66 | % | $ | 2,868 | 0.77 | % | $ | 4,322 | 1.22 | % | $ | 5,134 | 1.60 | % | ||||||||||||||||||||
Substandard
|
26,459 | 6.48 | % | 27,061 | 6.73 | % | 28,178 | 7.56 | % | 18,928 | 5.35 | % | 5,350 | 1.66 | % | |||||||||||||||||||||||||
Doubtful
|
59 | 0.01 | % | 73 | 0.02 | % | 224 | 0.06 | % | 277 | 0.08 | % | 420 | 0.13 | % | |||||||||||||||||||||||||
Total amount due
|
$ | 29,882 | 7.31 | % | $ | 29,787 | 7.41 | % | $ | 31,270 | 8.39 | % | $ | 23,527 | 6.65 | % | $ | 10,904 | 3.39 | % |
Investment Portfolio Amortized Cost and Fair Value at December 31,
|
||||||||||||||||||||||||
2012
|
2011
|
2010
|
||||||||||||||||||||||
(Dollars in thousands)
|
Amortized
cost
|
Fair value
|
Amortized
cost
|
Fair value
|
Amortized
cost
|
Fair value
|
||||||||||||||||||
Available for Sale:
|
||||||||||||||||||||||||
U.S. Government agency securities
|
$ | 24,485 | $ | 24,960 | $ | 31,520 | $ | 31,933 | $ | 33,332 | $ | 32,603 | ||||||||||||
Obligations of states and political subdivisions:
|
||||||||||||||||||||||||
Taxable
|
6,888 | 7,626 | 8,207 | 8,973 | 7,371 | 7,417 | ||||||||||||||||||
Tax-exempt
|
80,391 | 84,970 | 75,807 | 79,427 | 69,363 | 69,463 | ||||||||||||||||||
Mortgage-backed securities in government sponsored entities
|
69,238 | 71,102 | 63,808 | 65,573 | 73,390 | 74,043 | ||||||||||||||||||
Private-label mortgage-backed securities
|
4,553 | 5,064 | 7,005 | 7,321 | 16,636 | 17,326 | ||||||||||||||||||
Equity securities in financial institutions
|
750 | 750 | 750 | 750 | 944 | 920 | ||||||||||||||||||
Total Investment Securities
|
$ | 186,305 | $ | 194,472 | $ | 187,097 | $ | 193,977 | $ | 201,036 | $ | 201,772 |
December 31, 2012
|
||||||||||||||||||||||||||||||||||||||||||||
One year or less
|
More than one to five years
|
More than five to ten years
|
More than ten years
|
Total investment securities
|
||||||||||||||||||||||||||||||||||||||||
Amortized cost
|
Average yield
|
Amortized cost
|
Average yield
|
Amortized cost
|
Average yield
|
Amortized cost
|
Average yield
|
Amortized cost
|
Average yield
|
Fair value
|
||||||||||||||||||||||||||||||||||
(Dollars in thousands)
|
|
|||||||||||||||||||||||||||||||||||||||||||
U.S. Government agency securities
|
$ | - | - | % | $ | - | - | % | $ | 9,874 | 1.81 | % | $ | 14,611 | 3.08 | % | $ | 24,485 | 2.57 | % | $ | 24,960 | ||||||||||||||||||||||
Obligations of states and political subdivisions:
|
||||||||||||||||||||||||||||||||||||||||||||
Taxable
|
- | - | - | - | 820 | 4.96 | 6,068 | 5.37 | 6,888 | 5.32 | 7,626 | |||||||||||||||||||||||||||||||||
Tax-exempt **
|
2,081 | 6.29 | 4,964 | 5.68 | 11,020 | 5.53 | 62,326 | 5.43 | 80,391 | 5.48 | 84,970 | |||||||||||||||||||||||||||||||||
Mortgage-backed securities in government-sponsored entities
|
98 | 3.96 | - | - | 596 | 5.37 | 68,544 | 2.48 | 69,238 | 2.50 | 71,102 | |||||||||||||||||||||||||||||||||
Private-label mortgage-backed securities
|
- | - | 591 | 5.57 | - | - | 3,962 | 4.93 | 4,553 | 5.01 | 5,064 | |||||||||||||||||||||||||||||||||
Total
|
$ | 2,179 | 6.19 | % | $ | 5,555 | 5.67 | % | $ | 22,310 | 3.86 | % | $ | 155,511 | 3.89 | % | $ | 185,555 | 3.97 | % | $ | 193,722 |
(Dollar amounts in thousands)
|
Amount
|
Percent of Total
|
||||||
Within three months
|
$ | 10,031 | 12.55 | % | ||||
Beyond three but within six months
|
9,005 | 11.27 | ||||||
Beyond six but within twelve months
|
18,234 | 22.82 | ||||||
Beyond one year
|
42,648 | 53.36 | ||||||
Total
|
$ | 79,918 | 100.00 | % |
(Dollar amounts in thousands)
|
2012
|
2011
|
2010
|
|||||||||
Balance at year-end
|
$ | 6,538 | $ | 7,392 | $ | 7,632 | ||||||
Average balance outstanding
|
7,005 | 7,276 | 7,320 | |||||||||
Maximum month-end balance
|
7,458 | 7,552 | 8,178 | |||||||||
Weighted-average rate at year-end
|
2.97 |
%
|
3.14 |
%
|
3.10 | % | ||||||
Weighted-average rate during the year
|
3.15 |
%
|
3.23 |
%
|
3.40 | % |
FDIC Regulations
|
|||||||||||||||||
Capital Ratio
|
Adequately
Capitalized
|
Well
Capitalized
|
December 31,
2012
|
December 31,
2011
|
|||||||||||||
Tier I Leverage Capital
|
4.00 | % | 5.00 | % | (1) | 10.61 | % | 9.92 | % | ||||||||
Risk-Based Capital:
|
|||||||||||||||||
Tier I
|
4.00 | 6.00 | 14.16 | 12.57 | |||||||||||||
Total
|
8.00 | 10.00 | 15.45 | 13.82 |
•
|
directly or indirectly acquiring ownership or control of any voting shares of another bank or bank holding company, if after the acquisition the acquiring company would own or control more than 5% of the shares of the other bank or bank holding company (unless the acquiring company already owns or controls a majority of the shares),
|
•
|
acquiring all or substantially all of the assets of another bank, or
|
•
|
merging or consolidating with another bank holding company.
|
•
|
financial in nature or incidental to that financial activity, or
|
•
|
complementary to a financial activity and that does not pose a substantial risk to the safety and soundness of depository institutions or the financial system generally.
|
•
|
acting as principal, agent, or broker for insurance,
|
•
|
underwriting, dealing in, or making a market in securities, and
|
•
|
providing financial and investment advice.
|
Middlefield Banc Corp.
|
The Middlefield Banking Co.
|
Emerald Bank
|
||||||||||||||||||||||
(Dollar amounts in thousands)
|
December 31, 2012
|
December 31, 2012
|
December 31, 2012
|
|||||||||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||||||||||||
Total Capital
|
||||||||||||||||||||||||
(to Risk-weighted Assets)
|
||||||||||||||||||||||||
Actual
|
$ | 57,784 | 13.86 | % | $ | 47,887 | 13.29 | % | $ | 8,440 | 15.45 | % | ||||||||||||
For Capital Adequacy Purposes
|
33,344 | 8.00 | 28,822 | 8.00 | 4,370 | 8.00 | ||||||||||||||||||
To Be Well Capitalized
|
41,680 | 10.00 | 36,027 | 10.00 | 5,463 | 10.00 | ||||||||||||||||||
Tier I Capital
|
||||||||||||||||||||||||
(to Risk-weighted Assets)
|
||||||||||||||||||||||||
Actual
|
$ | 52,543 | 12.61 | % | $ | 43,371 | 12.04 | % | $ | 7,737 | 14.16 | % | ||||||||||||
For Capital Adequacy Purposes
|
16,672 | 4.00 | 14,411 | 4.00 | 2,185 | 4.00 | ||||||||||||||||||
To Be Well Capitalized
|
25,008 | 6.00 | 21,616 | 6.00 | 3,278 | 6.00 | ||||||||||||||||||
Tier I Capital
|
||||||||||||||||||||||||
(to Average Assets)
|
||||||||||||||||||||||||
Actual
|
$ | 52,543 | 7.88 | % | $ | 43,371 | 7.32 | % | $ | 7,737 | 10.61 | % | ||||||||||||
For Capital Adequacy Purposes
|
26,675 | 4.00 | 23,684 | 4.00 | 2,916 | 4.00 | ||||||||||||||||||
To Be Well Capitalized
|
33,344 | 5.00 | 29,605 | 5.00 | 3,646 | 5.00 |
|
•
|
section 111 establishes a new Financial Stability Oversight Council to monitor systemic financial risks. The Board of Governors of the Federal Reserve is given extensive new authorities to impose strict controls on large bank holding companies with total consolidated assets equal to or exceeding $50 billion and systemically significant non-bank financial companies to limit the risk they might pose for the economy and to other large interconnected companies. The Dodd-Frank Act also grants to the Treasury Department, FDIC and the FRB broad new powers to seize, close and wind-down “too big to fail” financial institutions (including non-bank institutions) in an orderly fashion.
|
|
•
|
Title X establishes an independent Federal regulatory body within the Federal Reserve System. Dedicated exclusively to consumer protection and known as the Bureau of Consumer Financial Protection, this new regulatory body has responsibility for most consumer protection laws, with rulemaking, supervisory, examination, and enforcement authority. The Bureau of Consumer Financial Protection will also be in charge of setting appropriate consumer banking fees and caps. According to Dodd-Frank Act section 1025, the new regulatory body has examination and enforcement authority over banks with more than $10 billion in assets, but under section 1026 banks with assets of $10 billion or less will continue to be examined by their bank regulators for consumer law compliance. In addition, the Dodd-Frank Act permits states to adopt consumer protection laws and regulations that are stricter than those regulations promulgated by the Consumer Financial Protection Bureau. Compliance with any such new regulations would increase our cost of operations and could as a result limit our ability to expand into these products and services.
|
|
•
|
section 171 restricts the amount of trust preferred securities that may be considered Tier 1 capital. For depository institution holding companies with total assets of less than $15 billion, trust preferred securities issued before May 19, 2010 may continue to be included in Tier 1 capital, but future issuances of trust preferred securities will no longer be eligible for treatment as Tier 1 capital.
|
|
•
|
under section 334 the FDIC’s minimum reserve ratio is to be increased from 1.15% to 1.35%, with the goal of attaining that 1.35% level by September 30, 2020; however, financial institutions with assets of less than $10 billion are to be exempt from the cost of the increase. The Dodd-Frank Act also removes the upper limit on the designated reserve ratio, which was formerly capped at 1.5%, removing the upper limit on the size of the insurance fund as a consequence. The Dodd-Frank Act gives the FDIC much greater discretion to manage its insurance fund reserves, including where to set the insurance fund’s designated reserve ratio.
|
|
•
|
the deposit insurance cover limit is increased to $250,000 by section 335.
|
|
•
|
section 627 repeals the longstanding prohibition against financial institutions paying interest on checking accounts.
|
|
•
|
section 331 changes the way deposit insurance premiums are calculated by the FDIC as well. That is, deposit insurance premiums are calculated based upon an institution’s so-called assessment base. Until the Dodd-Frank Act became law, the assessment base consisted of an institution’s deposit liabilities. Section 331, however, makes clear that the assessment base shall now be the difference between total assets and tangible equity. In other words, the assessment base will take account of all liabilities, not merely deposit liabilities. This change is likely to have a greater impact on large banks, which tend to rely on a variety of funding sources, than on community banks, which tend to rely primarily on deposit funding.
|
|
•
|
the Office of the Comptroller of the Currency’s ability to preempt state consumer protection laws is constrained by section 1044, and because of section 1042 state attorneys general have greater authority to enforce state consumer protection laws against national banks and their operating subsidiaries.
|
|
•
|
section 604 requires the Federal bank regulatory agencies to take into account the risks to the stability of the U.S. banking or financial system associated with approval of an application for acquisition of a bank, for acquisition of a nonbank company, or for a bank merger transaction.
|
|
•
|
section 619 implements the so-called “Volcker rule,” prohibiting a banking entity from engaging in proprietary trading or from sponsoring or investing in a hedge fund or private equity fund.
|
|
•
|
imposing a 5% risk retention requirement on securitizers of asset-backed securities, section 941 could have an impact on financial institutions that originate mortgages for sale into the secondary market. Like other provisions of the Dodd-Frank Act, the scope and impact of section 941 will be determined by future rulemaking.
|
•
|
limit the extent to which a bank or its subsidiaries may lend to or engage in various other kinds of transactions with any one affiliate to an amount equal to 10% of the institution’s capital and surplus, limiting the aggregate of covered transactions with all affiliates to 20% of capital and surplus,
|
•
|
impose restrictions on investments by a subsidiary bank in the stock or securities of its holding company,
|
•
|
impose restrictions on the use of a holding company’s stock as collateral for loans by the subsidiary bank,
|
•
|
require that affiliate transactions be on terms substantially the same, or at least as favorable to the institution or subsidiary, as those provided to a non-affiliate, and
|
•
|
Impose strict collateral requirements on loans or extensions of credit by a bank to an affiliate
|
|
-
|
total reported loans for construction, land development, and other land represent 100% or more of the institution’s total capital, or
|
|
-
|
total commercial real estate loans represent 300% or more of the institution’s total capital and the outstanding balance of the institution’s commercial real estate loan portfolio has increased by 50% or more during the prior 36 months.
|
|
•
|
incentive compensation arrangements should provide employees incentives that appropriately balance risk and financial results in a manner that does not encourage employees to expose the organization to imprudent risk,
|
|
•
|
these arrangements should be compatible with effective controls and risk management, and
|
|
•
|
these arrangements should be supported by strong corporate governance, including active and effective oversight by the board of directors.
|
|
-
|
a financial institution must establish due diligence policies, procedures, and controls reasonably designed to detect and report money laundering through correspondent accounts and private banking accounts,
|
|
-
|
no bank may establish, maintain, administer, or manage a correspondent account in the United States for a foreign shell bank,
|
|
-
|
financial institutions must abide by Treasury Department regulations encouraging financial institutions, their regulatory authorities, and law enforcement authorities to share information about individuals, entities, and organizations engaged in or suspected of engaging in terrorist acts or money laundering activities,
|
|
-
|
financial institutions must follow Treasury Department regulations setting forth minimum standards regarding customer identification. These regulations require financial institutions to implement reasonable procedures for verifying the identity of any person seeking to open an account, maintain records of the information used to verify the person’s identity, and consult lists of known or suspected terrorists and terrorist organizations provided to the financial institution by government agencies,
|
|
-
|
every financial institution must establish anti-money laundering programs, including the development of internal policies and procedures, designation of a compliance officer, employee training, and an independent audit function.
|
|
•
|
making unaffordable loans based on a borrower’s assets rather than the consumer’s ability to repay an obligation,
|
|
•
|
inducing a consumer to refinance a loan repeatedly in order to charge high points and fees each time the loan is refinanced, or loan flipping, and
|
|
•
|
engaging in fraud or deception to conceal the true nature of the loan obligation from an unsuspecting or unsophisticated consumer.
|
|
•
|
interest rates for first lien mortgage loans more than eight percentage points above the yield on U.S. Treasury securities having a comparable maturity,
|
|
•
|
interest rates for subordinate lien mortgage loans more than 10 percentage points above the yield on U.S. Treasury securities having a comparable maturity, or
|
|
•
|
total points and fees paid in the credit transaction exceed the greater of either 8% of the loan amount or a specified dollar amount that is inflation-adjusted each year.
|
|
•
|
prohibit creditors from extending credit without regard to a consumer’s ability to repay from sources other than the collateral itself,
|
|
•
|
require creditors to verify income and assets relied upon to determine repayment ability,
|
|
•
|
prohibit prepayment penalties except under certain conditions, and
|
|
•
|
require creditors to establish escrow accounts for taxes and insurance in the case of first-lien higher-priced mortgage loans, but permit creditors to allow borrowers to cancel escrows 12 months after loan consummation.
|
|
•
|
the ability to develop, maintain, and build long-term customer relationships based on top quality service, high ethical standards, and safe, sound assets;
|
•
|
the ability to expand the Company’s market position;
|
|
•
|
the scope, relevance, and pricing of products and services offered to meet customer needs and demands;
|
|
•
|
the rate at which the Company introduces new products and services relative to its competitors;
|
•
|
customer satisfaction with the Company’s level of service; and
|
•
|
industry and general economic trends.
|
|
•
|
the time and expense associated with identifying and evaluating potential acquisitions and merger partners;
|
|
•
|
using inaccurate estimates and judgments to evaluate credit, operations, management, and market risks with respect to the target institution or assets;
|
•
|
diluting our existing shareholders in an acquisition;
|
|
•
|
the time and expense associated with evaluating new markets for expansion, hiring experienced local management, and opening new offices;
|
|
•
|
taking a significant amount of time negotiating a transaction or working on expansion plans, resulting in management’s attention being diverted from the operation of our existing business; and
|
|
•
|
the time and expense associated with integrating the operations and personnel of the combined businesses, creating an adverse short-term effect on our results of operations.
|
Location
|
County
|
Owned/Leased
|
Other Information
|
|||
Main Office:
|
||||||
15985 East High Street
|
Geauga
|
Owned
|
||||
Middlefield, Ohio
|
||||||
Branches :
|
||||||
West Branch
|
Geauga
|
Owned
|
||||
15545 West High Street
|
||||||
Middlefield, Ohio
|
||||||
Garrettsville Branch
|
Portage
|
Owned
|
||||
8058 State Street
|
||||||
Garrettsville, Ohio
|
||||||
Mantua Branch
|
Portage
|
Leased
|
three-year lease renewed in November 2010, with option to renew for five additional consecutive three-year terms
|
|||
10519 South Main Street
|
||||||
Mantua, Ohio
|
||||||
Chardon Branch
|
Geauga
|
Owned
|
||||
348 Center Street
|
||||||
Chardon, Ohio
|
||||||
Orwell Branch
|
Ashtabula
|
Owned
|
||||
30 South Maple Avenue
|
||||||
Orwell, Ohio
|
||||||
Newbury Branch
|
Geauga
|
Leased
|
ten-year lease dated December 2006, with option to renew for four additional consecutive five-year terms
|
|||
11110 Kinsman Road
|
||||||
Newbury, Ohio
|
||||||
Cortland Branch
|
Trumbull
|
Owned
|
||||
3450 Niles Cortland Road
|
||||||
Cortland, Ohio
|
||||||
Emerald Bank
|
Franklin
|
Leased
|
twenty-year lease dated Febuary 2004, with the option to purchase after the tenth year
|
|||
6215 Perimeter Drive
|
||||||
Dublin, OH
|
||||||
Westerville Branch (Emerald Bank)
|
Franklin
|
Owned
|
||||
17 North State Street
|
||||||
Westerville, OH
|
||||||
Administrative Offices:
|
Geauga
|
Leased
|
five-year lease dated March 2012
|
|||
15200 Madison Road Suite 108
|
||||||
Middlefield, Ohio 44062
|
Plan Category
|
Number of
Securities |
Weighted-Average
Exercise Price of |
Number of Securities
Remaining Available |
|||||||||
Equity compensation plans approved by security holders:
|
||||||||||||
1999 Stock Option Plan
|
49,318 | $ | 30.85 | - | ||||||||
2007 Omnibus Equity Plan
|
30,375 | 21.41 | 80,307 | |||||||||
Total
|
79,693 | $ | 27.25 | 80,307 |
1. |
the Form 8-K Current Report that we filed with the SEC on August 18, 2011,
|
|
2. |
the August 15, 2011 Stock Purchase Agreement between Middlefield Banc Corp. and Banc Opportunity Fund LLC (exhibit 10.26 to the Form 8-K Current Report filed on August 18, 2011),
|
|
3. |
the First, Second, Third, and Fourth Amendments of the Stock Purchase Agreement (exhibits 10.26.1, 10.26.2, 10.26.3, and 10.26.4 to our Form 10-K Annual Report for the year ended December 31, 2011),
|
|
4. |
the Form 8-K Current Report that we filed with the SEC on March 27, 2012,
|
|
5. |
the Form 8-K Current Report that we filed with the SEC on April 23, 2012,
|
|
6. |
the Fifth Amendment of the Stock Purchase Agreement and the Amended and Restated Purchaser’s Rights and Voting Agreement (exhibits 10.26.6 and 10.28 to the Form 8-K Current Report filed on April 23, 2012),
|
|
7. |
the Form 8-K Current Report that we filed with the SEC on May 4, 2012,
|
|
8. |
the Form 8-K Current Report that we filed with the SEC on August 7, 2012,
|
|
9. |
the Form 8-K Current Report that we filed with the SEC on August 24, 2012,
|
|
10. |
the Sixth Amendment of the Stock Purchase Agreement and the Amendment of the Amended and Restated Purchaser’s Rights and Voting Agreement (exhibits 10.26.7 and 10.28.1 to the Form 8-K Current Report filed on August 24, 2012),
|
|
11. |
Note 7, captioned “Common Stock Issuance,” of the Notes to Unaudited Consolidated Financial Statements included in our Form 10-Q Quarterly Report for the quarter ended September 30, 2012, filed with the SEC on November 8, 2012, and
|
|
12. |
the Form 8-K Current Report that we filed with the SEC on January 18, 2013.
|
|
13. |
Note 18, captioned “Common Stock Offering,” of the Notes to Consolidated Financial Statements accompanying the Consolidated Financial Statements of the Company and subsidiaries as of and for the year ended December 31, 2012, included in the 2012 Annual Report to Shareholders and incorporated herein by reference.
|
(a)
|
Disclosure Controls and Procedures
|
(b)
|
Internal Controls Over Financial Reporting
|
(c)
|
Changes to Internal Control Over Financial Reporting
|
Index to Consolidated Financial Statements :
|
Consolidated Financial Statements as of December 31, 2012 and 2011 and for each of the three years in the period ended December 31, 2012:
|
Report of Independent Registered Public Accounting firm
|
Consolidated Balance Sheets
|
Consolidated Statements of Income
|
Consolidated Statements of Changes in Stockholders’ Equity
|
Consolidated Statements of Cash Flows
|
Notes to Consolidated Financial Statements
|
exhibit
number
|
description
|
location
|
||
3.1
|
Second Amended and Restated Articles of Incorporation of Middlefield Banc Corp., as amended
|
Incorporated by reference to Exhibit 3.1 of Middlefield Banc Corp.’s Annual Report on Form 10-K for the Fiscal Year Ended December 31, 2005, filed on March 29, 2006
|
||
3.2
|
Regulations of Middlefield Banc Corp.
|
Incorporated by reference to Exhibit 3.2 of Middlefield Banc Corp.’s registration statement on Form 10 filed on April 17, 2001
|
||
4.0
|
Specimen stock certificate
|
Incorporated by reference to Exhibit 4 of Middlefield Banc Corp.’s registration statement on Form 10 filed on April 17, 2001
|
||
4.1
|
Amended and Restated Trust Agreement, dated as of December 21, 2006, between Middlefield Banc Corp., as Depositor, Wilmington Trust Company, as Property trustee, Wilmington Trust Company, as Delaware Trustee, and Administrative Trustees
|
Incorporated by reference to Exhibit 4.1 of Middlefield Banc Corp.’s Form 8-K Current Report filed on December 27, 2006
|
||
4.2
|
Junior Subordinated Indenture, dated as of December 21, 2006, between Middlefield Banc Corp. and Wilmington Trust Company
|
Incorporated by reference to Exhibit 4.2 of Middlefield Banc Corp.’s Form 8-K Current Report filed on December 27, 2006
|
||
4.3
|
Guarantee Agreement, dated as of December 21, 2006, between Middlefield Banc Corp. and Wilmington Trust Company
|
Incorporated by reference to Exhibit 4.3 of Middlefield Banc Corp.’s Form 8-K Current Report filed on December 27, 2006
|
||
10.1.0*
|
1999 Stock Option Plan of Middlefield Banc Corp.
|
Incorporated by reference to Exhibit 10.1 of Middlefield Banc Corp.’s registration statement on Form 10 filed on April 17, 2001
|
||
10.1.1*
|
2007 Omnibus Equity Plan
|
Incorporated by reference to Middlefield Banc Corp.’s definitive proxy statement for the 2008 Annual Meeting of Shareholders, Appendix A, filed on April 7, 2008
|
||
10.2*
|
Severance Agreement between Middlefield Banc Corp. and Thomas G. Caldwell, dated January 7, 2008
|
Incorporated by reference to Exhibit 10.2 of Middlefield Banc Corp.’s Form 8-K Current Report filed on January 9, 2008
|
||
10.3*
|
Severance Agreement between Middlefield Banc Corp. and James R. Heslop, II, dated January 7, 2008
|
Incorporated by reference to Exhibit 10.3 of Middlefield Banc Corp.’s Form 8-K Current Report filed on January 9, 2008
|
||
10.4.0*
|
Severance Agreement between Middlefield Banc Corp. and Jay P. Giles, dated January 7, 2008
|
Incorporated by reference to Exhibit 10.4 of Middlefield Banc Corp.’s Form 8-K Current Report filed on January 9, 2008
|
||
10.4.1*
|
Severance Agreement between Middlefield Banc Corp. and Teresa M. Hetrick, dated January 7, 2008
|
Incorporated by reference to Exhibit 10.4.1 of Middlefield Banc Corp.’s Form 8-K Current Report filed on January 9, 2008
|
||
10.4.2
|
[reserved]
|
|||
10.4.3*
|
Severance Agreement between Middlefield Banc Corp. and Donald L. Stacy, dated January 7, 2008
|
Incorporated by reference to Exhibit 10.4.3 of Middlefield Banc Corp.’s Form 8-K Current Report filed on January 9, 2008
|
||
10.4.4*
|
Severance Agreement between Middlefield Banc Corp. and Alfred F. Thompson Jr., dated January 7, 2008
|
Incorporated by reference to Exhibit 10.4.4 of Middlefield Banc Corp.’s Form 8-K Current Report filed on January 9, 2008
|
exhibit
number
|
description
|
location
|
||
10.5
|
Federal Home Loan Bank of Cincinnati Agreement for Advances and Security Agreement dated September 14, 2000
|
Incorporated by reference to Exhibit 10.4 of Middlefield Banc Corp.’s registration statement on Form 10 filed on April 17, 2001
|
||
10.6*
|
Amended Director Retirement Agreement with Richard T. Coyne
|
Incorporated by reference to Exhibit 10.6 of Middlefield Banc Corp.’s Form 8-K Current Report filed on January 9, 2008
|
||
10.7*
|
Amended Director Retirement Agreement with Frances H. Frank
|
Incorporated by reference to Exhibit 10.7 of Middlefield Banc Corp.’s Form 8-K Current Report filed on January 9, 2008
|
||
10.8*
|
Amended Director Retirement Agreement with Thomas C. Halstead
|
Incorporated by reference to Exhibit 10.8 of Middlefield Banc Corp.’s Form 8-K Current Report filed on January 9, 2008
|
||
10.9*
|
Director Retirement Agreement with George F. Hasman
|
Incorporated by reference to Exhibit 10.9 of Middlefield Banc Corp.’s Annual Report on Form 10-K for the Year Ended December 31, 2001, filed on March 28, 2002
|
||
10.10*
|
Director Retirement Agreement with Donald D. Hunter
|
Incorporated by reference to Exhibit 10.10 of Middlefield Banc Corp.’s Annual Report on Form 10-K for the Year Ended December 31, 2001, filed on March 28, 2002
|
||
10.11*
|
Director Retirement Agreement with Martin S. Paul
|
Incorporated by reference to Exhibit 10.11 of Middlefield Banc Corp.’s Annual Report on Form 10-K for the Year Ended December 31, 2001, filed on March 28, 2002
|
||
10.12*
|
Amended Director Retirement Agreement with Donald E. Villers
|
Incorporated by reference to Exhibit 10.12 of Middlefield Banc Corp.’s Form 8-K Current Report filed on January 9, 2008
|
||
10.13*
|
Executive Survivor Income Agreement (aka DBO agreement [death benefit only]) with Donald L. Stacy
|
Incorporated by reference to Exhibit 10.14 of Middlefield Banc Corp.’s Annual Report on Form 10-K for the Year Ended December 31, 2003, filed on March 30, 2004
|
||
10.14*
|
DBO Agreement with Jay P. Giles
|
Incorporated by reference to Exhibit 10.15 of Middlefield Banc Corp.’s Annual Report on Form 10-K for the Year Ended December 31, 2003, filed on March 30, 2004
|
||
10.15*
|
DBO Agreement with Alfred F. Thompson Jr.
|
Incorporated by reference to Exhibit 10.16 of Middlefield Banc Corp.’s Annual Report on Form 10-K for the Year Ended December 31, 2003, filed on March 30, 2004
|
||
10.16
|
[reserved]
|
|||
10.17*
|
DBO Agreement with Theresa M. Hetrick
|
Incorporated by reference to Exhibit 10.18 of Middlefield Banc Corp.’s Annual Report on Form 10-K for the Year Ended December 31, 2003, filed on March 30, 2004
|
||
10.18 *
|
Executive Deferred Compensation Agreement with Jay P. Giles
|
Incorporated by reference to Exhibit 10.18 of Middlefield Banc Corp.’s Annual Report on Form 10-K for the Year Ended December 31, 2011, filed on March 20, 2012
|
exhibit
number
|
description
|
location
|
||
10.19*
|
DBO Agreement with James R. Heslop, II
|
Incorporated by reference to Exhibit 10.20 of Middlefield Banc Corp.’s Annual Report on Form 10-K for the Year Ended December 31, 2003, filed on March 30, 2004
|
||
10.20*
|
DBO Agreement with Thomas G. Caldwell
|
Incorporated by reference to Exhibit 10.21 of Middlefield Banc Corp.’s Annual Report on Form 10-K for the Year Ended December 31, 2003, filed on March 30, 2004
|
||
10.21*
|
Form of Indemnification Agreement with directors of Middlefield Banc Corp. and with executive officers of Middlefield Banc Corp. and The Middlefield Banking Company
|
Incorporated by reference to Exhibit 99.1 of Middlefield Banc Corp.’s registration statement on Form 10, Amendment No. 1, filed on June 14, 2001
|
||
10.22*
|
Annual Incentive Plan Summary
|
Incorporated by reference to the summary description of the annual incentive plan included as Exhibit 10.22 of Middlefield Banc Corp.’s Form 8-K Current Report filed on December 16, 2005
|
||
10.23*
|
Amended Executive Deferred Compensation Agreement with Thomas G. Caldwell
|
Incorporated by reference to Exhibit 10.23 of Middlefield Banc Corp.’s Form 8-K Current Report filed on May 9, 2008
|
||
10.24*
|
Amended Executive Deferred Compensation Agreement with James R. Heslop, II
|
Incorporated by reference to Exhibit 10.24 of Middlefield Banc Corp.’s Form 8-K Current Report filed on May 9, 2008
|
||
10.25*
|
Amended Executive Deferred Compensation Agreement with Donald L. Stacy
|
Incorporated by reference to Exhibit 10.25 of Middlefield Banc Corp.’s Form 8-K Current Report filed on May 9, 2008
|
||
10.26*
|
Stock Purchase Agreement dated August 15, 2011 between Bank Opportunity Fund LLC and Middlefield Banc Corp.
|
Incorporated by reference to Exhibit 10.26 of Middlefield Banc Corp.’s Form 8-K Current Report filed on August 18, 2011
|
||
10.26.1
|
Amendment 1 of the Stock Purchase Agreement with Bank Opportunity Fund LLC (amendment dated September 29, 2011)
|
Incorporated by reference to Exhibit 10.26.1 of Middlefield Banc Corp.’s Annual Report on Form 10-K for the Year Ended December 31, 2011, filed on March 20, 2012
|
||
10.26.2
|
Amendment 2 of the Stock Purchase Agreement with Bank Opportunity Fund LLC (amendment dated October 20, 2011)
|
Incorporated by reference to Exhibit 10.26.2 of Middlefield Banc Corp.’s Annual Report on Form 10-K for the Year Ended December 31, 2011, filed on March 20, 2012
|
||
10.26.3
|
Amendment 3 of the Stock Purchase Agreement with Bank Opportunity Fund LLC (amendment dated November 28, 2011)
|
Incorporated by reference to Exhibit 10.26.3 of Middlefield Banc Corp.’s Annual Report on Form 10-K for the Year Ended December 31, 2011, filed on March 20, 2012
|
||
10.26.4
|
Amendment 4 of the Stock Purchase Agreement with Bank Opportunity Fund LLC (amendment dated December 21, 2011)
|
Incorporated by reference to Exhibit 10.26.4 of Middlefield Banc Corp.’s Annual Report on Form 10-K for the Year Ended December 31, 2011, filed on March 20, 2012
|
||
10.26.5
|
March 21, 2012 letter agreement between Bank Opportunity Fund LLC and Middlefield Banc Corp.
|
Incorporated by reference to Exhibit 10.26.5 of Middlefield Banc Corp.’s Form 8-K Current Report filed on March 27, 2012
|
exhibit
number
|
description
|
location
|
||
10.26.6
|
Amendment 5 of the Stock Purchase Agreement with Bank Opportunity Fund LLC (amendment dated April 17, 2012)
|
Incorporated by reference to Exhibit 10.26.6 of Middlefield Banc Corp.’s Form 8-K Current Report filed on April 23, 2012
|
||
10.26.7
|
Amendment 6 of the Stock Purchase Agreement with Bank Opportunity Fund LLC (amendment dated August 23, 2012)
|
Incorporated by reference to Exhibit 10.26.7 of Middlefield Banc Corp.’s Form 8-K Current Report filed on August 24, 2012
|
||
10.27
|
[reserved]
|
|||
10.28
|
Amended and Restated Purchaser’s Rights and Voting Agreement, dated April 17, 2012, among Bank Opportunity Fund LLC, Middlefield Banc Corp., and directors and officers of Middlefield Banc Corp..
|
Incorporated by reference to Exhibit 10.28 of Middlefield Banc Corp.’s Form 8-K Current Report filed on April 23, 2012
|
||
10.28.1
|
Amendment of the Amended and Restated Purchaser’s Rights and Voting Agreement (amendment dated August 23, 2012)
|
Incorporated by reference to Exhibit 10.28.1 of Middlefield Banc Corp.’s Form 8-K Current Report filed on August 24, 2012
|
||
13
|
Portions of Annual Report to Shareholders for the year ended December 31, 2012 incorporated by reference into this Form 10-K
|
filed herewith
|
||
21
|
Subsidiaries of Middlefield Banc Corp.
|
filed herewith
|
||
23
|
Consent of S.R. Snodgrass, A.C., independent auditors of Middlefield Banc Corp.
|
filed herewith
|
||
31.1
|
Rule 13a-14(a) certification of Chief Executive Officer
|
filed herewith
|
||
31.2
|
Rule 13a-14(a) certification of Chief Financial Officer
|
filed herewith
|
||
32
|
Rule 13a-14(b) certification
|
filed herewith
|
||
101.INS**
|
XBRL Instance
|
furnished herewith
|
||
101.SCH**
|
XBRL Taxonomy Extension Schema
|
furnished herewith
|
||
101.CAL**
|
XBRL Taxonomy Extension Calculation
|
furnished herewith
|
||
101.DEF**
|
XBRL Taxonomy Extension Definition
|
furnished herewith
|
||
101.LAB**
|
XBRL Taxonomy Extension Labels
|
furnished herewith
|
||
101.PRE**
|
XBRL Taxonomy Extension Presentation
|
furnished herewith
|
Middlefield Banc Corp.
|
||||
By:
|
/s/ Thomas G. Caldwell
|
|||
Thomas G. Caldwell
|
||||
President and Chief Executive Officer
|
||||
Date: March 13, 2013
|
/s/ Thomas G. Caldwell
|
March 13, 2013
|
|
Thomas G. Caldwell
|
||
President, Chief Executive Officer, and Director
|
||
/s/ Donald L. Stacy
|
March 13, 2013
|
|
Donald L. Stacy, Treasurer and Chief Financial Officer
|
||
(Principal accounting and financial officer)
|
||
/s/ Richard T. Coyne
|
March 13, 2013
|
|
Richard T. Coyne, Chairman of the Board
|
||
/s/ Eric W. Hummel
|
March 13, 2013
|
|
Eric Hummel, Director
|
||
/s/ James R. Heslop, II
|
March 13, 2013
|
|
James R. Heslop, II, Executive Vice President,
|
||
Chief Operating Officer, and Director
|
||
/s/ Kenneth E. Jones
|
March 13, 2013
|
|
Kenneth E Jones, Director
|
||
/s/ James J. McCaskey
|
March 13, 2013
|
|
James J. McCaskey, Director
|
||
/s/ Carolyn J. Turk
|
March 13, 2013
|
|
Carolyn J. Turk, Director
|
||
/s/ William J. Skidmore
|
March 13, 2013
|
|
William J. Skidmore, Director
|
||
/s/ Robert W. Toth
|
March 13, 2013
|
|
Robert W. Toth, Director
|
/s/ S.R. Snodgrass A.C.
|
|
S.R. Snodgrass A.C.
|
December 31,
|
||||||||
2012
|
2011
|
|||||||
ASSETS
|
||||||||
Cash and due from banks
|
$ | 33,568 | $ | 15,730 | ||||
Federal funds sold
|
11,778 | 18,660 | ||||||
Cash and cash equivalents
|
45,346 | 34,390 | ||||||
Investment securities available for sale, at fair value
|
194,472 | 193,977 | ||||||
Loans
|
408,433 | 401,880 | ||||||
Less allowance for loan losses
|
7,779 | 6,819 | ||||||
Net loans
|
400,654 | 395,061 | ||||||
Premises and equipment, net
|
8,670 | 8,264 | ||||||
Goodwill
|
4,559 | 4,559 | ||||||
Core deposit intangibles
|
195 | 235 | ||||||
Bank-owned life insurance
|
8,536 | 8,257 | ||||||
Accrued interest and other assets
|
7,856 | 9,808 | ||||||
TOTAL ASSETS
|
$ | 670,288 | $ | 654,551 | ||||
LIABILITIES
|
||||||||
Deposits:
|
||||||||
Noninterest-bearing demand
|
$ | 75,912 | $ | 63,348 | ||||
Interest-bearing demand
|
63,915 | 55,853 | ||||||
Money market
|
81,349 | 75,621 | ||||||
Savings
|
175,406 | 167,207 | ||||||
Time
|
196,753 | 218,933 | ||||||
Total deposits
|
593,335 | 580,962 | ||||||
Short-term borrowings
|
6,538 | 7,392 | ||||||
Other borrowings
|
12,970 | 16,831 | ||||||
Accrued interest and other liabilities
|
2,008 | 2,113 | ||||||
TOTAL LIABILITIES
|
614,851 | 607,298 | ||||||
STOCKHOLDERS' EQUITY
|
||||||||
Common stock, no par value; 10,000,000 shares authorized, 2,181,763 and 1,951,868 shares issued
|
34,295 | 31,240 | ||||||
Retained earnings
|
22,485 | 18,206 | ||||||
Accumulated other comprehensive income
|
5,391 | 4,541 | ||||||
Treasury stock, at cost; 189,530 shares
|
(6,734 | ) | (6,734 | ) | ||||
TOTAL STOCKHOLDERS' EQUITY
|
55,437 | 47,253 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
|
$ | 670,288 | $ | 654,551 |
Year Ended December 31,
|
||||||||||||
2012
|
2011
|
2010
|
||||||||||
INTEREST INCOME
|
||||||||||||
Interest and fees on loans
|
$ | 22,418 | $ | 21,854 | $ | 21,084 | ||||||
Interest-bearing deposits in other institutions
|
26 | 14 | 15 | |||||||||
Federal funds sold
|
20 | 12 | 52 | |||||||||
Investment securities:
|
||||||||||||
Taxable interest
|
3,209 | 4,862 | 5,185 | |||||||||
Tax-exempt interest
|
2,976 | 2,883 | 2,650 | |||||||||
Dividends on stock
|
97 | 102 | 108 | |||||||||
Total interest income
|
28,746 | 29,727 | 29,094 | |||||||||
INTEREST EXPENSE
|
||||||||||||
Deposits
|
5,728 | 7,467 | 9,504 | |||||||||
Short-term borrowings
|
261 | 235 | 249 | |||||||||
Other borrowings
|
294 | 400 | 642 | |||||||||
Trust preferred securities
|
164 | 550 | 550 | |||||||||
Total interest expense
|
6,447 | 8,652 | 10,945 | |||||||||
NET INTEREST INCOME
|
22,299 | 21,075 | 18,149 | |||||||||
Provision for loan losses
|
2,168 | 3,085 | 3,580 | |||||||||
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES
|
20,131 | 17,990 | 14,569 | |||||||||
NONINTEREST INCOME
|
||||||||||||
Service charges on deposit accounts
|
1,765 | 1,512 | 1,784 | |||||||||
Investment securities gains (losses), net
|
610 | (173 | ) | 11 | ||||||||
Earnings on bank-owned life insurance
|
279 | 278 | 273 | |||||||||
Gains on sale of loans
|
85 | - | - | |||||||||
Other income
|
712 | 620 | 555 | |||||||||
Total noninterest income
|
3,451 | 2,237 | 2,623 | |||||||||
NONINTEREST EXPENSE
|
||||||||||||
Salaries and employee benefits
|
7,127 | 7,233 | 6,411 | |||||||||
Occupancy expense
|
959 | 953 | 946 | |||||||||
Equipment expense
|
759 | 556 | 626 | |||||||||
Data processing costs
|
772 | 693 | 743 | |||||||||
Ohio state franchise tax
|
590 | 461 | 348 | |||||||||
Federal deposit insurance expense
|
487 | 966 | 1,166 | |||||||||
Professional fees
|
948 | 800 | 678 | |||||||||
Losses on other real estate owned
|
258 | 497 | 783 | |||||||||
Advertising expenses
|
423 | 439 | 401 | |||||||||
Other real estate expenses
|
498 | 194 | 82 | |||||||||
Other expense
|
2,818 | 2,709 | 2,579 | |||||||||
Total noninterest expense
|
15,639 | 15,501 | 14,763 | |||||||||
Income before income taxes
|
7,943 | 4,726 | 2,429 | |||||||||
Income taxes (benefit)
|
1,662 | 596 | (88 | ) | ||||||||
NET INCOME
|
$ | 6,281 | $ | 4,130 | $ | 2,517 | ||||||
EARNINGS PER SHARE
|
||||||||||||
Basic
|
$ | 3.29 | $ | 2.45 | $ | 1.60 | ||||||
Diluted
|
3.28 | 2.45 | 1.60 | |||||||||
DIVIDENDS DECLARED PER SHARE
|
$ | 1.04 | $ | 1.04 | $ | 1.04 |
Year Ended December 31,
|
||||||||||||
2012
|
2011
|
2010
|
||||||||||
Net income
|
$ | 6,281 | $ | 4,130 | $ | 2,517 | ||||||
Other comprehensive income:
|
||||||||||||
Net unrealized holding gain (loss) on available for sale investment securities
|
1,897 | 5,969 | (103 | ) | ||||||||
Tax effect
|
(644 | ) | (2,029 | ) | 35 | |||||||
Reclassification adjustment for investment security (gains) losses included in net income
|
(610 | ) | 173 | (11 | ) | |||||||
Tax effect
|
207 | (59 | ) | 4 | ||||||||
Total other comprehensive income (loss)
|
850 | 4,054 | (75 | ) | ||||||||
Comprehensive income
|
$ | 7,131 | $ | 8,184 | $ | 2,442 |
Common Stock
|
Retained
|
Accumulated
Other |
Treasury
|
Total
Stockholders' |
||||||||||||||||||||
Shares
|
Amount
|
Earnings
|
Income
|
Stock
|
Equity
|
|||||||||||||||||||
Balance, December 31, 2009
|
1,754,112 | $ | 27,919 | $ | 14,960 | $ | 562 | $ | (6,734 | ) | $ | 36,707 | ||||||||||||
Net income
|
2,517 | 2,517 | ||||||||||||||||||||||
Other comprehensive loss
|
(75 | ) | (75 | ) | ||||||||||||||||||||
Dividend reinvestment and purchase plan
|
26,441 | 510 | 510 | |||||||||||||||||||||
Cash dividends ($1.04 per share)
|
(1,637 | ) | (1,637 | ) | ||||||||||||||||||||
Balance, December 31, 2010
|
1,780,553 | $ | 28,429 | $ | 15,840 | $ | 487 | $ | (6,734 | ) | $ | 38,022 | ||||||||||||
Net income
|
4,130 | 4,130 | ||||||||||||||||||||||
Other comprehensive income
|
4,054 | 4,054 | ||||||||||||||||||||||
Stock-based compensation expense
|
2,400 | 59 | 59 | |||||||||||||||||||||
Common stock issuance
|
138,150 | 2,210 | 2,210 | |||||||||||||||||||||
Dividend reinvestment and purchase plan
|
30,765 | 542 | 542 | |||||||||||||||||||||
Cash dividends ($1.04 per share)
|
(1,764 | ) | (1,764 | ) | ||||||||||||||||||||
Balance, December 31, 2011
|
1,951,868 | $ | 31,240 | $ | 18,206 | $ | 4,541 | $ | (6,734 | ) | $ | 47,253 | ||||||||||||
Net income
|
6,281 | 6,281 | ||||||||||||||||||||||
Other comprehensive income
|
850 | 850 | ||||||||||||||||||||||
Stock-based compensation expense
|
1,722 | 32 | 32 | |||||||||||||||||||||
Common stock issuance
|
196,635 | 2,329 | 2,329 | |||||||||||||||||||||
Dividend reinvestment and purchase plan
|
31,538 | 694 | 694 | |||||||||||||||||||||
Cash dividends ($1.04 per share)
|
(2,002 | ) | (2,002 | ) | ||||||||||||||||||||
Balance, December 31, 2012
|
2,181,763 | $ | 34,295 | $ | 22,485 | $ | 5,391 | $ | (6,734 | ) | $ | 55,437 |
Year Ended December 31,
|
||||||||||||
2012
|
2011
|
2010
|
||||||||||
OPERATING ACTIVITIES
|
||||||||||||
Net income
|
$ | 6,281 | $ | 4,130 | $ | 2,517 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||||||
Provision for loan losses
|
2,168 | 3,085 | 3,580 | |||||||||
Investment securities (gains) losses, net
|
(610 | ) | 173 | (11 | ) | |||||||
Depreciation and amortization
|
929 | 731 | 740 | |||||||||
Amortization of premium and discount on investment securities
|
930 | 451 | 6 | |||||||||
Amortization of deferred loan fees, net
|
(188 | ) | (170 | ) | (58 | ) | ||||||
Origination of loans held for sale
|
(1,084 | ) | - | - | ||||||||
Proceeds from sale of loans held for sale
|
1,169 | - | - | |||||||||
Gains on sale of loans
|
(85 | ) | - | - | ||||||||
Earnings on bank-owned life insurance
|
(279 | ) | (278 | ) | (273 | ) | ||||||
Deferred income taxes
|
2 | (97 | ) | (777 | ) | |||||||
Stock-based compensation expense
|
32 | 59 | - | |||||||||
Loss on other real estate owned
|
258 | 497 | 783 | |||||||||
Decrease (increase) in accrued interest receivable
|
71 | 25 | (847 | ) | ||||||||
Decrease in accrued interest payable
|
(153 | ) | (145 | ) | (115 | ) | ||||||
Decrease in prepaid federal deposit insurance
|
486 | 707 | 727 | |||||||||
Other, net
|
355 | (22 | ) | (538 | ) | |||||||
Net cash provided by operating activities
|
10,282 | 9,146 | 5,734 | |||||||||
INVESTING ACTIVITIES
|
||||||||||||
Investment securities available for sale:
|
||||||||||||
Proceeds from repayments and maturities
|
50,919 | 69,264 | 42,815 | |||||||||
Proceeds from sale of securities
|
32,985 | 24,127 | 5,874 | |||||||||
Purchases
|
(83,431 | ) | (80,078 | ) | (113,860 | ) | ||||||
Increase in loans, net
|
(8,435 | ) | (32,956 | ) | (22,992 | ) | ||||||
Proceeds from the sale of other real estate owned
|
954 | 866 | 932 | |||||||||
Purchase of premises and equipment
|
(997 | ) | (583 | ) | (327 | ) | ||||||
Net cash used for investing activities
|
(8,005 | ) | (19,360 | ) | (87,558 | ) | ||||||
FINANCING ACTIVITIES
|
||||||||||||
Net increase in deposits
|
12,373 | 15,711 | 78,145 | |||||||||
(Decrease) increase in short-term borrowings, net
|
(854 | ) | (240 | ) | 832 | |||||||
Repayment of other borrowings
|
(3,861 | ) | (2,490 | ) | (6,544 | ) | ||||||
Common stock issued
|
2,329 | 2,210 | - | |||||||||
Proceeds from dividend reinvestment and purchase plan
|
694 | 542 | 510 | |||||||||
Cash dividends
|
(2,002 | ) | (1,764 | ) | (1,637 | ) | ||||||
Net cash provided by financing activities
|
8,679 | 13,969 | 71,306 | |||||||||
Increase (decrease) in cash and cash equivalents
|
10,956 | 3,755 | (10,518 | ) | ||||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
|
34,390 | 30,635 | 41,153 | |||||||||
CASH AND CASH EQUIVALENTS AT END OF YEAR
|
$ | 45,346 | $ | 34,390 | $ | 30,635 | ||||||
SUPPLEMENTAL INFORMATION
|
||||||||||||
Cash paid during the year for:
|
||||||||||||
Interest on deposits and borrowings
|
$ | 6,600 | $ | 8,797 | $ | 11,060 | ||||||
Income taxes
|
1,550 | 615 | 850 | |||||||||
Non-cash investing transactions:
|
||||||||||||
Transfers from loans to other real estate owned
|
$ | 862 | $ | 1,257 | $ | 2,110 | ||||||
Loans to facilitate the sale of other real estate owned
|
- | - | 257 |
Grant
Year |
Expected
Dividend |
Risk-Free
Interest Rate |
Expected
Volatility |
Expected
Life (in years) |
||||||||||||
2011
|
5.82 | % | 3.00 | % | 21.78 | 9.96 |
2012
|
2011
|
2010
|
||||||||||
Weighted average common shares outstanding
|
2,101,490 | 1,872,582 | 1,764,743 | |||||||||
Average treasury stock shares
|
(189,530 | ) | (189,530 | ) | (189,530 | ) | ||||||
Weighted average common shares and common stock equivalents used to calculate basic earnings per share
|
1,911,960 | 1,683,052 | 1,575,213 | |||||||||
Additional common stock equivalents used to calculate diluted earnings per share
|
4,972 | - | 608 | |||||||||
Weighted average common shares and common stock equivalents used to calculate diluted earnings per share
|
1,916,932 | 1,683,052 | 1,575,821 |
December 31, 2012
|
||||||||||||||||
(Dollar amounts in thousands)
|
Amortized
Cost |
Gross
Unrealized |
Gross
Unrealized |
Fair
Value |
||||||||||||
U.S. government agency securities
|
$ | 24,485 | $ | 566 | (91 | ) | $ | 24,960 | ||||||||
Obligations of states and political subdivisions:
|
||||||||||||||||
Taxable
|
6,888 | 738 | - | 7,626 | ||||||||||||
Tax-exempt
|
80,391 | 4,683 | (104 | ) | 84,970 | |||||||||||
Mortgage-backed securities in government-sponsored entities
|
69,238 | 1,929 | (65 | ) | 71,102 | |||||||||||
Private-label mortgage-backed securities
|
4,553 | 511 | - | 5,064 | ||||||||||||
Total debt securities
|
185,555 | 8,427 | (260 | ) | 193,722 | |||||||||||
Equity securities in financial institutions
|
750 | - | - | 750 | ||||||||||||
Total
|
$ | 186,305 | $ | 8,427 | $ | (260 | ) | $ | 194,472 |
December 31, 2011
|
||||||||||||||||
Amortized
Cost |
Gross
Unrealized |
Gross
Unrealized |
Fair
Value |
|||||||||||||
U.S. government agency securities
|
$ | 31,520 | $ | 427 | $ | (14 | ) | $ | 31,933 | |||||||
Obligations of states and political subdivisions:
|
||||||||||||||||
Taxable
|
8,207 | 766 | - | 8,973 | ||||||||||||
Tax-exempt
|
75,807 | 3,681 | (61 | ) | 79,427 | |||||||||||
Mortgage-backed securities in government-sponsored entities
|
63,808 | 1,819 | (54 | ) | 65,573 | |||||||||||
Private-label mortgage-backed securities
|
7,005 | 411 | (95 | ) | 7,321 | |||||||||||
Total debt securities
|
186,347 | 7,104 | (224 | ) | 193,227 | |||||||||||
Equity securities in financial institutions
|
750 | - | - | 750 | ||||||||||||
Total
|
$ | 187,097 | $ | 7,104 | $ | (224 | ) | $ | 193,977 |
(Dollar amounts in thousands)
|
Amortized
Cost |
Fair
Value |
||||||
Due in one year or less
|
$ | 2,179 | $ | 2,239 | ||||
Due after one year through five years
|
5,555 | 5,870 | ||||||
Due after five years through ten years
|
22,310 | 23,240 | ||||||
Due after ten years
|
155,511 | 162,373 | ||||||
Total
|
$ | 185,555 | $ | 193,722 |
2012
|
2011
|
2010
|
||||||||||
Proceeds from sales
|
$ | 32,985 | 24,127 | 5,874 | ||||||||
Gross realized gains
|
704 | 830 | 74 | |||||||||
Gross realized losses
|
(94 | ) | (809 | ) | (29 | ) | ||||||
Impairment losses
|
- | (194 | ) | (34 | ) |
December 31, 2012
|
||||||||||||||||||||||||
Less than Twelve Months
|
Twelve Months or Greater
|
Total
|
||||||||||||||||||||||
(Dollar amounts in thousands)
|
Fair
Value |
Gross
Unrealized |
Fair
Value |
Gross
Unrealized |
Fair
Value |
Gross
Unrealized |
||||||||||||||||||
U.S. government agency securities
|
$ | 9,938 | $ | (91 | ) | $ | - | $ | - | $ | 9,938 | $ | (91 | ) | ||||||||||
Obligations of states and political subdivisions
|
9,240 | (104 | ) | - | - | 9,240 | (104 | ) | ||||||||||||||||
Mortgage-backed securities in government-sponsored entities
|
12,353 | (65 | ) | - | - | 12,353 | (65 | ) | ||||||||||||||||
Total
|
$ | 31,531 | $ | (260 | ) | $ | - | $ | - | $ | 31,531 | $ | (260 | ) |
December 31, 2011
|
||||||||||||||||||||||||
Less than Twelve Months
|
Twelve Months or Greater
|
Total
|
||||||||||||||||||||||
Fair
Value |
Gross
Unrealized |
Fair
Value |
Gross
Unrealized |
Fair
Value |
Gross
Unrealized |
|||||||||||||||||||
U.S. government agency securities
|
$ | 1,986 | $ | (14 | ) | $ | - | $ | - | $ | 1,986 | $ | (14 | ) | ||||||||||
Obligations of states and political subdivisions
|
2,707 | (40 | ) | 919 | (21 | ) | 3,626 | (61 | ) | |||||||||||||||
Mortgage-backed securities in government-sponsored entities
|
8,992 | (54 | ) | - | - | 8,992 | (54 | ) | ||||||||||||||||
Private-label mortgage-backed securities
|
1,628 | (42 | ) | 398 | (53 | ) | 2,026 | (95 | ) | |||||||||||||||
Total
|
$ | 15,313 | $ | (150 | ) | $ | 1,317 | $ | (74 | ) | $ | 16,630 | $ | (224 | ) |
|
·
|
The length of time and the extent to which the fair value has been less than the amortized cost basis.
|
|
·
|
Changes in the near term prospects of the underlying collateral of a security such as changes in default rates, loss severity given default and significant changes in prepayment assumptions.
|
|
·
|
The level of cash flows generated from the underlying collateral supporting the principal and interest payments of the debt securities.
|
|
·
|
Any adverse change to the credit conditions and liquidity of the issuer, taking into consideration the latest information available about the overall financial condition of the issuer, credit ratings, recent legislation, and government actions affecting the issuer’s industry and actions taken by the issuer to deal with the present economic climate.
|
2012
|
2011
|
|||||||
Commercial and industrial
|
$ | 62,188 | $ | 59,185 | ||||
Real estate - construction
|
22,522 | 21,545 | ||||||
Real estate - mortgage:
|
||||||||
Residential
|
203,872 | 208,139 | ||||||
Commercial
|
115,734 | 108,502 | ||||||
Consumer installment
|
4,117 | 4,509 | ||||||
408,433 | 401,880 | |||||||
Less allowance for loan losses
|
(7,779 | ) | (6,819 | ) | ||||
Net loans
|
$ | 400,654 | $ | 395,061 |
Real Estate- Mortgage
|
||||||||||||||||||||||||
December 31, 2012
|
Commercial
and industrial
|
Real estate- construction
|
Residential
|
Commercial
|
Consumer
installment
|
Total
|
||||||||||||||||||
Loans:
|
||||||||||||||||||||||||
Individually evaluated for impairment
|
$ | 4,592 | $ | 3,993 | $ | 5,761 | $ | 6,914 | $ | 28 | $ | 21,288 | ||||||||||||
Collectively evaluated for impairment
|
57,596 | 18,529 | 198,111 | 108,820 | 4,089 | 387,145 | ||||||||||||||||||
Total loans
|
$ | 62,188 | $ | 22,522 | $ | 203,872 | $ | 115,734 | $ | 4,117 | $ | 408,433 |
Real estate- Mortgage
|
||||||||||||||||||||||||
December 31, 2011
|
Commercial
and industrial
|
Real estate- construction
|
Residential
|
Commercial
|
Consumer
installment
|
Total
|
||||||||||||||||||
Loans:
|
||||||||||||||||||||||||
Individually evaluated for impairment
|
$ | 4,492 | $ | 867 | $ | 4,882 | $ | 6,491 | $ | - | $ | 16,732 | ||||||||||||
Collectively evaluated for impairment
|
54,693 | 20,678 | 203,257 | 102,011 | 4,509 | 385,148 | ||||||||||||||||||
Total loans
|
$ | 59,185 | $ | 21,545 | $ | 208,139 | $ | 108,502 | $ | 4,509 | $ | 401,880 |
Real Estate- Mortgage
|
||||||||||||||||||||||||
December 31, 2012
|
Commercial
and industrial
|
Real estate- construction
|
Residential
|
Commercial
|
Consumer
installment
|
Total
|
||||||||||||||||||
Allowance for loan losses:
|
||||||||||||||||||||||||
Ending allowance balance attributable to loans:
|
||||||||||||||||||||||||
Individually evaluated for impairment
|
$ | 1,189 | $ | 933 | $ | 600 | $ | 960 | $ | 6 | $ | 3,688 | ||||||||||||
Collectively evaluated for impairment
|
543 | 190 | 2,272 | 1,031 | 55 | 4,091 | ||||||||||||||||||
Total ending allowance balance
|
$ | 1,732 | $ | 1,123 | $ | 2,872 | $ | 1,991 | $ | 61 | $ | 7,779 |
Real Estate- Mortgage
|
||||||||||||||||||||||||
December 31, 2011
|
Commercial
and industrial
|
Real estate- construction
|
Residential
|
Commercial
|
Consumer
installment
|
Total
|
||||||||||||||||||
Allowance for loan losses:
|
||||||||||||||||||||||||
Ending allowance balance attributable to loans:
|
||||||||||||||||||||||||
Individually evaluated for impairment
|
$ | 595 | $ | 237 | $ | 685 | $ | 185 | $ | - | $ | 1,702 | ||||||||||||
Collectively evaluated for impairment
|
701 | 201 | 3,046 | 1,121 | 48 | 5,117 | ||||||||||||||||||
Total ending allowance balance
|
$ | 1,296 | $ | 438 | $ | 3,731 | $ | 1,306 | $ | 48 | $ | 6,819 |
Impaired Loans
|
||||||||||||
Recorded
Investment |
Unpaid
Principal
Balance
|
Related
Allowance |
||||||||||
With no related allowance recorded:
|
||||||||||||
Commercial and industrial
|
$ | 1,230 | $ | 1,229 | $ | - | ||||||
Real estate - construction
|
308 | 308 | - | |||||||||
Real estate - mortgage:
|
||||||||||||
Residential
|
2,716 | 2,729 | - | |||||||||
Commercial
|
4,143 | 4,164 | - | |||||||||
Consumer installment
|
11 | 11 | - | |||||||||
Total
|
$ | 8,408 | $ | 8,441 | $ | - | ||||||
With an allowance recorded:
|
||||||||||||
Commercial and industrial
|
$ | 3,362 | $ | 3,367 | $ | 1,189 | ||||||
Real estate - construction
|
3,685 | 3,685 | 933 | |||||||||
Real estate - mortgage:
|
||||||||||||
Residential
|
3,045 | 3,054 | 600 | |||||||||
Commercial
|
2,771 | 2,776 | 960 | |||||||||
Consumer installment
|
17 | 17 | 6 | |||||||||
Total
|
$ | 12,880 | $ | 12,899 | $ | 3,688 | ||||||
Total:
|
||||||||||||
Commercial and industrial
|
$ | 4,592 | $ | 4,596 | $ | 1,189 | ||||||
Real estate - construction
|
3,993 | 3,993 | 933 | |||||||||
Real estate - mortgage:
|
||||||||||||
Residential
|
5,761 | 5,783 | 600 | |||||||||
Commercial
|
6,914 | 6,940 | 960 | |||||||||
Consumer installment
|
28 | 28 | 6 | |||||||||
Total
|
$ | 21,288 | $ | 21,340 | $ | 3,688 |
Impaired Loans
|
||||||||||||
Recorded
Investment |
Unpaid
Principal
Balance
|
Related
Allowance |
||||||||||
With no related allowance recorded:
|
||||||||||||
Commercial and industrial
|
$ | 1,172 | $ | 1,172 | $ | - | ||||||
Real estate - construction
|
4,250 | 4,250 | - | |||||||||
Real estate - mortgage:
|
||||||||||||
Residential
|
3,188 | 3,193 | - | |||||||||
Commercial
|
2,528 | 2,536 | - | |||||||||
Consumer installment
|
24 | 24 | - | |||||||||
Total
|
$ | 11,162 | $ | 11,175 | $ | - | ||||||
With an allowance recorded:
|
||||||||||||
Commercial and industrial
|
$ | 465 | $ | 465 | $ | 196 | ||||||
Real estate - construction
|
271 | 271 | 125 | |||||||||
Real estate - mortgage:
|
||||||||||||
Residential
|
- | - | - | |||||||||
Commercial
|
2,555 | 2,560 | 551 | |||||||||
Total
|
$ | 3,291 | $ | 3,296 | $ | 872 | ||||||
Total:
|
||||||||||||
Commercial and industrial
|
$ | 1,637 | $ | 1,637 | $ | 196 | ||||||
Real estate - construction
|
4,521 | 4,521 | 125 | |||||||||
Real estate - mortgage:
|
||||||||||||
Residential
|
3,188 | 3,193 | - | |||||||||
Commercial
|
5,083 | 5,096 | 551 | |||||||||
Consumer installment
|
24 | 24 | - | |||||||||
Total
|
$ | 14,453 | $ | 14,471 | $ | 872 |
As of December 31, 2012
|
As of December 31, 2011
|
As of December 31, 2010
|
||||||||||||||||||||||
Average
Recorded
Investment
|
Interest
Income
Recognized
|
Average
Recorded
Investment
|
Interest
Income
Recognized
|
Average
Recorded
Investment
|
Interest
Income
Recognized
|
|||||||||||||||||||
Total:
|
||||||||||||||||||||||||
Commercial and industrial
|
$ | 2,776 | $ | 348 | $ | 1,637 | $ | 58 | $ | 3,149 | $ | 13 | ||||||||||||
Real estate - construction
|
2,798 | 156 | 4,521 | 216 | 618 | 1 | ||||||||||||||||||
Real estate - mortgage:
|
||||||||||||||||||||||||
Residential
|
4,263 | 338 | 3,188 | 157 | 594 | - | ||||||||||||||||||
Commercial
|
4,717 | 543 | 5,083 | 97 | 3,320 | 69 | ||||||||||||||||||
Consumer installment
|
27 | 3 | 24 | 2 | - | - |
Modifications
As of December 31, 2012 |
||||||||||||||||
Pre-Modification
|
||||||||||||||||
Number of Contracts
|
Outstanding | |||||||||||||||
Troubled Debt Restructurings
|
Rate
Forgiveness
|
Other
|
Total
|
Recorded
Investment
|
||||||||||||
Commercial and industrial
|
1 | 12 | 13 | $ | 489 | |||||||||||
Real estate- construction:
|
- | - | - | - | ||||||||||||
Real estate- mortgage:
|
||||||||||||||||
Residential | 2 | 7 | 9 | 921 | ||||||||||||
Commercial
|
- | 1 | 1 | 156 | ||||||||||||
Consumer Installment
|
- | 2 | 2 | 11 |
Troubled Debt Restructurings
subsequently defaulted
|
Number of
Contracts
|
Recorded Investment
|
||||||
Commercial and industrial
|
6 | $ | 256 | |||||
Real estate- construction:
|
1 | 3,622 | ||||||
Real estate- mortgage:
|
||||||||
Residential | 2 | 89 | ||||||
Commercial | - | - | ||||||
Consumer Installment
|
1 | 5 |
Modifications
As of December 31, 2011 |
||||||||||||||||
Pre-Modification | ||||||||||||||||
Number of Contracts
|
Outstanding | |||||||||||||||
Troubled Debt Restructurings
|
Rate
Forgiveness
|
Other
|
Total
|
Recorded
Investment
|
||||||||||||
Commercial and industrial
|
- | 8 | 8 | $ | 586 | |||||||||||
Real estate- construction:
|
- | 2 | 2 | 3,883 | ||||||||||||
Real estate- mortgage:
|
||||||||||||||||
Residential
|
- | 10 | 10 | 1,639 | ||||||||||||
Commercial
|
- | 2 | 2 | 1,625 | ||||||||||||
Consumer Installment
|
- | 2 | 2 | 24 |
Troubled Debt Restructurings
subsequently defaulted |
Number of Contracts
|
Recorded Investment
|
||||||
Commercial and industrial
|
3 | $ | 134 | |||||
Real estate- construction:
|
- | - | ||||||
Real estate- mortgage:
|
||||||||
Residential
|
- | - | ||||||
Commercial
|
- | - | ||||||
Consumer Installment
|
2 | 28 |
Modifications
As of December 31, 2010 |
||||||||||||||||
Pre-Modification
|
||||||||||||||||
Number of Contracts
|
Outstanding | |||||||||||||||
Troubled Debt Restructurings
|
Rate
Forgiveness
|
Other
|
Total
|
Recorded
Investment
|
||||||||||||
Commercial and industrial
|
- | 7 | 7 | $ | 668 | |||||||||||
Real estate- mortgage:
|
||||||||||||||||
Residential
|
- | 8 | 8 | 1,230 | ||||||||||||
Commercial
|
- | 3 | 3 | 2,025 | ||||||||||||
Consumer Installment
|
- | 3 | 3 | 43 |
Troubled Debt Restructurings
subsequently defaulted
|
Number of
Contracts
|
Recorded Investment
|
||||||
Commercial and industrial
|
2 | $ | 174 | |||||
Real estate- mortgage:
|
||||||||
Residential
|
3 | 203 | ||||||
Commercial
|
- | - | ||||||
Consumer Installment
|
- | - |
Pass
|
Special
Mention |
Substandard
|
Doubtful
|
Total
Loans |
||||||||||||||||
December 31, 2012
|
||||||||||||||||||||
Commercial and industrial
|
$ | 59,390 | $ | 678 | $ | 2,061 | $ | 59 | $ | 62,188 | ||||||||||
Real estate - construction
|
17,601 | - | 4,921 | - | 22,522 | |||||||||||||||
Real estate - mortgage:
|
||||||||||||||||||||
Residential
|
190,967 | 758 | 12,147 | - | 203,872 | |||||||||||||||
Commercial
|
106,509 | 1,928 | 7,297 | - | 115,734 | |||||||||||||||
Consumer installment
|
4,084 | - | 33 | - | 4,117 | |||||||||||||||
Total
|
$ | 378,551 | $ | 3,364 | $ | 26,459 | $ | 59 | $ | 408,433 |
December 31, 2011
|
Pass
|
Special
Mention |
Substandard
|
Doubtful
|
Total
Loans |
|||||||||||||||
Commercial and industrial
|
$ | 53,645 | $ | 1,104 | $ | 4,363 | $ | 73 | $ | 59,185 | ||||||||||
Real estate - construction
|
20,883 | - | 662 | - | 21,545 | |||||||||||||||
Real estate - mortgage:
|
||||||||||||||||||||
Residential
|
192,534 | 1,100 | 14,505 | - | 208,139 | |||||||||||||||
Commercial
|
100,536 | 443 | 7,523 | - | 108,502 | |||||||||||||||
Consumer installment
|
4,495 | 6 | 8 | - | 4,509 | |||||||||||||||
Total
|
$ | 372,093 | $ | 2,653 | $ | 27,061 | $ | 73 | $ | 401,880 |
Still Accruing
|
||||||||||||||||||||||||||||
Current
|
30-59 Days
Past Due |
60-89 Days
Past Due |
90 Days+
Past Due |
Total
Past Due |
Non-
Accrual |
Total
Loans |
||||||||||||||||||||||
December 31, 2012
|
||||||||||||||||||||||||||||
Commercial and industrial
|
$ | 60,428 | $ | 441 | $ | 63 | $ | 348 | $ | 852 | $ | 908 | $ | 62,188 | ||||||||||||||
Real estate - construction
|
22,158 | - | - | - | - | 364 | 22,522 | |||||||||||||||||||||
Real estate - mortgage:
|
||||||||||||||||||||||||||||
Residential
|
191,349 | 2,614 | 1,401 | 90 | 4,105 | 8,418 | 203,872 | |||||||||||||||||||||
Commercial
|
113,023 | 509 | 97 | - | 606 | 2,105 | 115,734 | |||||||||||||||||||||
Consumer installment
|
4,074 | 25 | - | - | 25 | 18 | 4,117 | |||||||||||||||||||||
Total
|
$ | 391,032 | $ | 3,589 | $ | 1,561 | $ | 438 | $ | 5,588 | $ | 11,813 | $ | 408,433 |
Still Accruing
|
||||||||||||||||||||||||||||
Current
|
30-59 Days
Past Due |
60-89 Days
Past Due |
90 Days+
Past Due |
Total
Past Due |
Non-
Accrual |
Total
Loans |
||||||||||||||||||||||
December 31, 2011
|
||||||||||||||||||||||||||||
Commercial and industrial
|
$ | 57,291 | $ | 258 | $ | 16 | $ | 44 | $ | 318 | $ | 1,576 | $ | 59,185 | ||||||||||||||
Real estate - construction
|
20,862 | 20 | - | - | 20 | 663 | 21,545 | |||||||||||||||||||||
Real estate - mortgage:
|
||||||||||||||||||||||||||||
Residential
|
193,732 | 2,624 | 863 | 275 | 3,762 | 10,645 | 208,139 | |||||||||||||||||||||
Commercial
|
104,086 | 83 | 412 | - | 495 | 3,921 | 108,502 | |||||||||||||||||||||
Consumer installment
|
4,408 | 60 | 41 | - | 101 | - | 4,509 | |||||||||||||||||||||
Total
|
$ | 380,379 | $ | 3,045 | $ | 1,332 | $ | 319 | $ | 4,696 | $ | 16,805 | $ | 401,880 |
Commercial and industrial
|
Real estate- construction
|
Real estate- residential mortgage
|
Real estate- commercial mortgage
|
Consumer installment
|
Total
|
|||||||||||||||||||
ALL balance at December 31, 2011
|
$ | 1,296 | $ | 438 | $ | 3,731 | $ | 1,306 | $ | 48 | $ | 6,819 | ||||||||||||
Charge-offs
|
(230 | ) | (135 | ) | (785 | ) | (123 | ) | (64 | ) | (1,337 | ) | ||||||||||||
Recoveries
|
71 | - | 31 | - | 27 | 129 | ||||||||||||||||||
Provision
|
595 | 820 | (105 | ) | 808 | 50 | 2,168 | |||||||||||||||||
ALL balance at December 31, 2012
|
$ | 1,732 | $ | 1,123 | $ | 2,872 | $ | 1,991 | $ | 61 | $ | 7,779 |
Commercial and industrial
|
Real estate- construction
|
Real estate- residential mortgage
|
Real estate- commercial mortgage
|
Consumer installment
|
Total
|
|||||||||||||||||||
ALL balance at December 31, 2010
|
$ | 1,234 | $ | 356 | $ | 3,392 | $ | 1,143 | $ | 96 | $ | 6,221 | ||||||||||||
Charge-offs
|
(568 | ) | (6 | ) | (1,862 | ) | (265 | ) | (11 | ) | (2,712 | ) | ||||||||||||
Recoveries
|
76 | - | 122 | - | 27 | 225 | ||||||||||||||||||
Provision
|
554 | 88 | 2,079 | 428 | (64 | ) | 3,085 | |||||||||||||||||
ALL balance at December 31, 2011
|
$ | 1,296 | $ | 438 | $ | 3,731 | $ | 1,306 | $ | 48 | $ | 6,819 |
Commercial and industrial
|
Real estate- construction
|
Real estate- residential mortgage
|
Real estate- commercial mortgage
|
Consumer installment
|
Total
|
|||||||||||||||||||
ALL balance at December 31, 2009
|
$ | 864 | $ | - | $ | 2,816 | $ | 1,198 | $ | 59 | $ | 4,937 | ||||||||||||
Charge-offs
|
(450 | ) | - | (1,433 | ) | (428 | ) | (59 | ) | (2,370 | ) | |||||||||||||
Recoveries
|
40 | - | - | - | 34 | 74 | ||||||||||||||||||
Provision
|
780 | 356 | 2,009 | 373 | 62 | 3,580 | ||||||||||||||||||
ALL balance at December 31, 2010
|
$ | 1,234 | $ | 356 | $ | 3,392 | $ | 1,143 | $ | 96 | $ | 6,221 |
(Dollar amounts in thousands)
|
2012
|
2011
|
||||||
Land and land improvements
|
$ | 1,885 | $ | 1,898 | ||||
Building and leasehold improvements
|
9,427 | 9,131 | ||||||
Furniture, fixtures, and equipment
|
3,665 | 2,952 | ||||||
14,977 | 13,981 | |||||||
Less accumulated depreciation and amortization
|
6,307 | 5,717 | ||||||
Total
|
$ | 8,670 | $ | 8,264 |
2013
|
$ | 40,000 | ||
2014
|
40,000 | |||
2015
|
40,000 | |||
2016
|
40,000 | |||
Thereafter
|
35,000 | |||
Total
|
$ | 195,000 |
(Dollar amounts in thousands)
|
2012
|
2011
|
||||||
FHLB stock
|
$ | 1,887 | $ | 1,887 | ||||
Accrued interest on investment securities
|
1,032 | 1,185 | ||||||
Accrued interest on loans
|
1,132 | 1,049 | ||||||
Deferred tax asset, net
|
181 | 621 | ||||||
Prepaid federal deposit insurance
|
513 | 977 | ||||||
Other Real Estate Owned
|
1,846 | 2,196 | ||||||
Other
|
1,460 | 2,128 | ||||||
Total
|
$ | 8,051 | $ | 10,043 |
(Dollar amounts in thousands)
|
Amount
|
Percent of Total
|
||||||
Within three months
|
$ | 10,031 | 12.55 | % | ||||
Beyond three but within six months
|
9,005 | 11.27 | ||||||
Beyond six but within twelve months
|
18,234 | 22.82 | ||||||
Beyond one year
|
42,648 | 53.36 | ||||||
Total
|
$ | 79,918 | 100.00 | % |
(Dollar amounts in thousands)
|
2012
|
2011
|
2010
|
|||||||||
Balance at year-end
|
$ | 6,538 | $ | 7,392 | $ | 7,632 | ||||||
Average balance outstanding
|
7,005 | 7,276 | 7,320 | |||||||||
Maximum month-end balance
|
7,458 | 7,552 | 8,178 | |||||||||
Weighted-average rate at year-end
|
2.97 | % | 3.14 | % | 3.10 | % | ||||||
Weighted-average rate during the year
|
3.15 | % | 3.23 | % | 3.40 | % |
(Dollar amounts in thousands)
|
Maturity range
|
Weighted-
average |
Stated interest
rate range |
||||||||||||||||||||||||
Description
|
from
|
to
|
interest rate
|
from
|
to
|
2012
|
2011
|
||||||||||||||||||||
Fixed rate amortizing
|
01/23/13
|
09/04/28
|
3.99 | % | 2.70 | % | 4.48 | % | $ | 4,722 | $ | 6,576 | |||||||||||||||
Convertible
|
10/09/12
|
10/09/12
|
4.14 | 4.14 | 4.14 | - | 2,007 | ||||||||||||||||||||
Junior subordinated debt
|
12/21/37
|
12/21/37
|
2.50 | 1.98 | 6.58 | 8,248 | 8,248 | ||||||||||||||||||||
Total
|
$ | 12,970 | $ | 16,831 |
(Dollar amounts in thousands)
|
||||||||
Year Ending December 31,
|
Amount
|
Average Rate
|
||||||
2013
|
$ | 1,362 | 3.95 | % | ||||
2014
|
984
|
3.99 | ||||||
2015
|
685
|
4.01 | ||||||
2016
|
502
|
4.00 | ||||||
2017
|
373
|
4.00 | ||||||
Beyond 2017
|
9,065
|
2.17 | ||||||
Total
|
$ | 12,970 | 2.63 | % |
2012
|
2011
|
|||||||
Accrued interest payable
|
$ | 492 | $ | 645 | ||||
Other
|
1,516 | 1,468 | ||||||
Total
|
$ | 2,008 | $ | 2,113 |
(Dollar amounts in thousands)
|
2012
|
2011
|
2010
|
|||||||||
Current payable
|
$ | 1,660 | $ | 693 | $ | 689 | ||||||
Deferred
|
2 | (97 | ) | (777 | ) | |||||||
Total provision (benefit)
|
$ | 1,662 | $ | 596 | $ | (88 | ) |
(Dollar amounts in thousands)
|
2012
|
2011
|
||||||
Deferred tax assets:
|
||||||||
Allowance for loan losses
|
$ | 2,645 | $ | 2,318 | ||||
Supplemental retirement plan
|
218 | 182 | ||||||
Alternative minimum tax credits
|
- | 551 | ||||||
Investment security basis adjustment
|
66 | 66 | ||||||
Nonaccrual interest income
|
508 | 298 | ||||||
Deferred origination fees, net
|
189 | 105 | ||||||
OREO adjustments
|
116 | - | ||||||
Net operating losses
|
86 | 190 | ||||||
Other
|
47 | 125 | ||||||
Gross deferred tax assets
|
3,875 | 3,835 | ||||||
Deferred tax liabilities:
|
||||||||
Premises and equipment
|
434 | 405 | ||||||
Net unrealized gain on securities
|
2,777 | 2,339 | ||||||
FHLB stock dividends
|
225 | 225 | ||||||
Intangibles
|
256 | 208 | ||||||
Other
|
2 | 37 | ||||||
Gross deferred tax liabilities
|
3,694 | 3,214 | ||||||
Net deferred tax assets
|
$ | 181 | $ | 621 |
(Dollar amounts in thousands)
|
2012
|
2011
|
2010
|
|||||||||||||||||||||
Amount
|
% of
Pretax |
Amount
|
% of
Pretax |
Amount
|
% of
Pretax |
|||||||||||||||||||
Provision at statutory rate
|
$ | 2,700 | 34.0 | % | $ | 1,606 | 34.0 | % | $ | 827 | 34.0 | % | ||||||||||||
Tax-free income
|
(1,095 | ) | -13.8 | (1,071 | ) | -22.7 | (993 | ) | -40.9 | |||||||||||||||
Nondeductible interest expense
|
48 | 0.6 | 61 | 1.3 | 76 | 3.1 | ||||||||||||||||||
Other
|
9 | 0.1 | - | 0.0 | 2 | 0.2 | ||||||||||||||||||
Actual tax expense and effective rate
|
$ | 1,662 | 20.9 | % | $ | 596 | 12.6 | % | $ | (88 | ) | (3.6 | ) % |
Projected
Payments
|
||||
2013
|
$ | 34,000 | ||
2014
|
34,000 | |||
2015
|
34,000 | |||
2016
|
29,000 | |||
2017
|
23,000 | |||
Thereafter
|
41,000 | |||
Total
|
$ | 195,000 |
2012
|
Weighted-
average |
2011
|
Weighted-
average |
|||||||||||||
Outstanding, January 1
|
88,774 | $ | 26.81 | 89,077 | $ | 27.87 | ||||||||||
Granted
|
- | - | 9,000 | 17.55 | ||||||||||||
Forfeited
|
(9,081 | ) | 22.94 | (9,303 | ) | 28.03 | ||||||||||
Outstanding, December 31
|
79,693 | $ | 27.25 | 88,774 | $ | 26.81 | ||||||||||
Exercisable, December 31
|
79,693 | $ | 27.25 | 79,774 | $ | 27.85 |
Outstanding
|
Exercisable
|
|||||||||||||||||||||||
Grant Date
|
Exercise
Price |
Shares
|
Contractual
Average |
Average
Exercise |
Shares
|
Average
Exercise |
||||||||||||||||||
December 8, 2003
|
$ | 24.29 | 18,112 | 0.94 | $ | 24.29 | 18,112 | $ | 24.29 | |||||||||||||||
May 12, 2004
|
27.35 | 907 | 1.33 | 27.35 | 907 | 27.35 | ||||||||||||||||||
December 13, 2004
|
30.45 | 11,223 | 1.95 | 30.45 | 11,223 | 30.45 | ||||||||||||||||||
December 14, 2005
|
36.73 | 7,163 | 2.95 | 36.73 | 7,163 | 36.73 | ||||||||||||||||||
December 10, 2006
|
40.24 | 3,150 | 3.95 | 40.24 | 3,150 | 40.24 | ||||||||||||||||||
April 19, 2007
|
37.33 | 3,639 | 4.31 | 37.33 | 3,639 | 37.73 | ||||||||||||||||||
May 16, 2007
|
37.48 | 1,337 | 4.41 | 37.48 | 1,337 | 37.48 | ||||||||||||||||||
December 10, 2007
|
37.00 | 2,450 | 4.95 | 37.00 | 2,450 | 37.00 | ||||||||||||||||||
January 2, 2008
|
36.25 | 1,337 | 5.12 | 36.25 | 1,337 | 36.25 | ||||||||||||||||||
November 10, 2008
|
23.00 | 21,500 | 5.95 | 23.00 | 21,500 | 23.00 | ||||||||||||||||||
May 9, 2011
|
17.55 | 8,875 | 8.41 | 17.55 | 8,875 | 17.55 | ||||||||||||||||||
79,693 | 79,693 |
(Dollar amounts in thousands)
|
2012
|
2011
|
||||||
Commitments to extend credit
|
$ | 91,854 | $ | 81,402 | ||||
Standby letters of credit
|
281 | 639 | ||||||
Total
|
$ | 92,135 | $ | 82,041 |
2013
|
$ | 271 | ||
2014
|
$ | 280 | ||
2015
|
$ | 284 | ||
2016
|
$ | 284 | ||
2017
|
$ | 284 | ||
Thereafter
|
$ | 284 |
(Dollar amounts in thousands)
|
Middlefield Banc Corp.
December 31, 2012 |
The Middlefield Banking Co.
December 31, 2012 |
Emerald Bank
December 31, 2012 |
|||||||||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||||||||||||
Total Capital
|
||||||||||||||||||||||||
(to Risk-weighted Assets)
|
||||||||||||||||||||||||
Actual
|
$ | 57,784 | 13.86 | % | $ | 47,887 | 13.29 | % | $ | 8,440 | 15.45 | % | ||||||||||||
For Capital Adequacy Purposes
|
33,344 | 8.00 | 28,822 | 8.00 | 4,370 | 8.00 | ||||||||||||||||||
To Be Well Capitalized
|
41,680 | 10.00 | 36,027 | 10.00 | 5,463 | 10.00 | ||||||||||||||||||
Tier I Capital
|
||||||||||||||||||||||||
(to Risk-weighted Assets)
|
||||||||||||||||||||||||
Actual
|
$ | 52,543 | 12.61 | % | $ | 43,371 | 12.04 | % | $ | 7,737 | 14.16 | % | ||||||||||||
For Capital Adequacy Purposes
|
16,672 | 4.00 | 14,411 | 4.00 | 2,185 | 4.00 | ||||||||||||||||||
To Be Well Capitalized
|
25,008 | 6.00 | 21,616 | 6.00 | 3,278 | 6.00 | ||||||||||||||||||
Tier I Capital
|
||||||||||||||||||||||||
(to Average Assets)
|
||||||||||||||||||||||||
Actual
|
$ | 52,543 | 7.88 | % | $ | 43,371 | 7.32 | % | $ | 7,737 | 10.61 | % | ||||||||||||
For Capital Adequacy Purposes
|
26,675 | 4.00 | 23,684 | 4.00 | 2,916 | 4.00 | ||||||||||||||||||
To Be Well Capitalized
|
33,344 | 5.00 | 29,605 | 5.00 | 3,646 | 5.00 |
Middlefield Banc Corp.
December 31, 2011 |
The Middlefield Banking Co.
December 31, 2011 |
Emerald Bank
December 31, 2011 |
||||||||||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||||||||||||
Total Capital
|
||||||||||||||||||||||||
(to Risk-weighted Assets)
|
||||||||||||||||||||||||
Actual
|
$ | 49,915 | 12.06 | % | $ | 42,185 | 11.75 | % | $ | 7,456 | 13.82 | % | ||||||||||||
For Capital Adequacy Purposes
|
33,101 | 8.00 | 28,722 | 8.00 | 4,317 | 8.00 | ||||||||||||||||||
To Be Well Capitalized
|
41,376 | 10.00 | 35,903 | 10.00 | 5,396 | 10.00 | ||||||||||||||||||
Tier I Capital
|
||||||||||||||||||||||||
(to Risk-weighted Assets)
|
||||||||||||||||||||||||
Actual
|
$ | 44,723 | 10.81 | % | $ | 37,697 | 10.50 | % | $ | 6,782 | 12.57 | % | ||||||||||||
For Capital Adequacy Purposes
|
16,551 | 4.00 | 14,361 | 4.00 | 2,158 | 4.00 | ||||||||||||||||||
To Be Well Capitalized
|
24,826 | 6.00 | 21,542 | 6.00 | 3,237 | 6.00 | ||||||||||||||||||
Tier I Capital
|
||||||||||||||||||||||||
(to Average Assets)
|
||||||||||||||||||||||||
Actual
|
$ | 44,723 | 7.13 | % | $ | 37,697 | 6.75 | % | $ | 6,782 | 9.92 | % | ||||||||||||
For Capital Adequacy Purposes
|
25,079 | 4.00 | 22,325 | 4.00 | 2,734 | 4.00 | ||||||||||||||||||
To Be Well Capitalized
|
31,349 | 5.00 | 27,906 | 5.00 | 3,417 | 5.00 |
Level I:
|
Quoted prices are available in active markets for identical assets or liabilities as of the reported date.
|
Level II:
|
Pricing inputs are other than the quoted prices in active markets, which are either directly or indirectly observable as of the reported date. The nature of these assets and liabilities includes items for which quoted prices are available but traded less frequently and items that are fair-valued using other financial instruments, the parameters of which can be directly observed.
|
Level III:
|
Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
|
December 31, 2012
|
||||||||||||||||
(Dollar amounts in thousands)
|
Level I
|
Level II
|
Level III
|
Total
|
||||||||||||
Assets measured on a recurring basis:
|
||||||||||||||||
U.S. government agency securities
|
$ | - | $ | 24,960 | $ | - | $ | 24,960 | ||||||||
Obligations of states and political subdivisions
|
- | 92,596 | - | 92,596 | ||||||||||||
Mortgage-backed securities in government- sponsored entities
|
- | 71,102 | - | 71,102 | ||||||||||||
Private-label mortgage-backed securities
|
- | 5,064 | - | 5,064 | ||||||||||||
Total debt securities
|
- | 193,722 | - | 193,722 | ||||||||||||
Equity securities in financial institutions
|
5 | 745 | - | 750 | ||||||||||||
Total
|
$ | 5 | $ | 194,467 | $ | - | $ | 194,472 |
December 31, 2011
|
||||||||||||||||
Level I
|
Level II
|
Level III
|
Total
|
|||||||||||||
Assets measured on a recurring basis:
|
||||||||||||||||
U.S. government agency securities
|
$ | - | $ | 31,933 | $ | - | $ | 31,933 | ||||||||
Obligations of states and political subdivisions
|
- | 88,400 | - | 88,400 | ||||||||||||
Mortgage-backed securities in government- sponsored entities
|
- | 65,573 | - | 65,573 | ||||||||||||
Private-label mortgage-backed securities
|
- | 7,321 | - | 7,321 | ||||||||||||
Total debt securities
|
- | 193,227 | - | 193,227 | ||||||||||||
Equity securities in financial institutions
|
5 | 745 | - | 750 | ||||||||||||
Total
|
$ | 5 | $ | 193,972 | $ | - | $ | 193,977 |
December 31, 2012
|
||||||||||||||||
(Dollar amounts in thousands)
|
Level I
|
Level II
|
Level III
|
Total
|
||||||||||||
Assets measured on a non-recurring basis:
|
||||||||||||||||
Impaired loans
|
$ | - | $ | - | $ | 17,600 | $ | 17,600 | ||||||||
Other real estate owned
|
- | - | 1,846 | 1,846 |
December 31, 2011
|
||||||||||||||||
Level I
|
Level II
|
Level III
|
Total
|
|||||||||||||
Assets measured on a non-recurring basis:
|
||||||||||||||||
Impaired loans
|
$ | - | $ | - | $ | 13,581 | $ | 13,581 | ||||||||
Other real estate owned
|
- | - | 2,196 | 2,196 |
Quantitative Information about Level III Fair Value Measurements
|
||||||||||||||||
(unaudited, in thousands)
|
Estimate
|
Valuation Techniquest
|
Unobservable Input
|
Range (Weighted Average)
|
||||||||||||
December 31, 2012
|
||||||||||||||||
Impaired loans
|
$ | 17,600 |
Appraisal of collateral (1)
|
Appraisal adjustments (2)
|
20.0%
|
to | -68.0% | (-32.4%) | ||||||||
Liquidation expenses (2)
|
0.3%
|
to | -45.8% | (-2.1%) | ||||||||||||
Other real estate owned
|
$ | 1,846 |
Appraisal of collateral (1), (3)
|
(1)
|
Fair value is generally determined through independent appraisals of the underlying collateral, which generally include various level 3 inputs which are not identifiable.
|
(2)
|
Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses. The range and weighted average of liquidation expenses and other appraisal adjustments are presented as a percent of the appraisal.
|
(3)
|
Includes qualitative adjustments by management and estimated liquidation expenses.
|
December 31, 2012
|
||||||||||||||||||||
Carrying
Value |
Level I
|
Level II
|
Level III
|
Total
Fair Value |
||||||||||||||||
(in thousands)
|
||||||||||||||||||||
Financial assets:
|
||||||||||||||||||||
Cash and cash equivalents
|
$ | 45,346 | $ | 45,346 | $ | - | $ | - | $ | 45,346 | ||||||||||
Investment securities
|
||||||||||||||||||||
Available for sale
|
194,472 | 5 | 194,467 | - | 194,472 | |||||||||||||||
Net loans
|
400,654 | - | - | 390,206 | 390,206 | |||||||||||||||
Bank-owned life insurance
|
8,536 | 8,536 | - | - | 8,536 | |||||||||||||||
Federal Home Loan Bank stock
|
1,887 | 1,887 | - | - | 1,887 | |||||||||||||||
Accrued interest receivable
|
2,163 | 2,163 | - | - | 2,163 | |||||||||||||||
Financial liabilities:
|
||||||||||||||||||||
Deposits
|
$ | 593,335 | $ | 396,582 | $ | - | $ | 196,122 | $ | 592,704 | ||||||||||
Short-term borrowings
|
6,538 | 6,538 | - | - | 6,538 | |||||||||||||||
Other borrowings
|
12,970 | - | - | 13,337 | 13,337 | |||||||||||||||
Accrued interest payable
|
492 | 492 | - | - | 492 |
December 31, 2011
|
||||||||||||||||||||
Carrying
Value |
Level I
|
Level II
|
Level III
|
Total
Fair Value |
||||||||||||||||
(in thousands)
|
||||||||||||||||||||
Financial assets:
|
||||||||||||||||||||
Cash and cash equivalents
|
$ | 34,390 | $ | 34,390 | $ | - | $ | - | $ | 34,390 | ||||||||||
Investment securities
|
||||||||||||||||||||
Available for sale
|
193,977 | 5 | 193,972 | - | 193,977 | |||||||||||||||
Net loans
|
395,061 | - | - | 382,542 | 382,542 | |||||||||||||||
Bank-owned life insurance
|
8,257 | 8,257 | - | - | 8,257 | |||||||||||||||
Federal Home Loan Bank stock
|
1,887 | 1,887 | - | - | 1,887 | |||||||||||||||
Accrued interest receivable
|
2,234 | 2,234 | - | - | 2,234 | |||||||||||||||
Financial liabilities:
|
||||||||||||||||||||
Deposits
|
$ | 580,962 | $ | 362,029 | $ | - | $ | 225,149 | $ | 587,178 | ||||||||||
Short-term borrowings
|
7,392 | 7,392 | - | - | 7,392 | |||||||||||||||
Other borrowings
|
16,831 | - | - | 17,327 | 17,327 | |||||||||||||||
Accrued interest payable
|
645 | 645 | - | - | 645 |
(Dollar amounts in thousands)
|
December 31,
|
|||||||
2012
|
2011
|
|||||||
ASSETS
|
||||||||
Cash and due from banks
|
$ | 1,740 | $ | 710 | ||||
Investment securities available for sale
|
751 | 751 | ||||||
Investment in non-bank subsidiary
|
2,664 | 2,944 | ||||||
Investment in subsidiary banks
|
62,002 | 55,256 | ||||||
Other assets
|
1,453 | 1,638 | ||||||
TOTAL ASSETS
|
$ | 68,610 | $ | 61,299 | ||||
LIABILITIES
|
||||||||
Trust preferred securities
|
$ | 8,248 | $ | 8,248 | ||||
Short-term borrowings
|
4,896 | 5,700 | ||||||
Other liabilities
|
29 | 98 | ||||||
TOTAL LIABILITIES
|
13,173 | 14,046 | ||||||
STOCKHOLDERS' EQUITY
|
55,437 | 47,253 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
|
$ | 68,610 | $ | 61,299 |
Year Ended December 31,
|
||||||||||||
(Dollar amounts in thousands)
|
2012
|
2011
|
2010
|
|||||||||
INCOME
|
||||||||||||
Dividends from subsidiary bank
|
$ | 2,327 | $ | 2,403 | $ | 2,061 | ||||||
Interest income
|
- | - | 3 | |||||||||
Other
|
8 | (177 | ) | 17 | ||||||||
Total income | 2,335 | 2,226 | 2,081 | |||||||||
EXPENSES
|
||||||||||||
Interest expense
|
417 | 772 | 773 | |||||||||
Other
|
594 | 370 | 270 | |||||||||
Total expenses | 1,011 | 1,142 | 1,043 | |||||||||
Income before income tax benefit
|
1,324 | 1,084 | 1,038 | |||||||||
Income tax benefit
|
(342 | ) | (449 | ) | (348 | ) | ||||||
Income before equity in undistributed net income of subsidiaries
|
1,666 | 1,533 | 1,386 | |||||||||
Equity in undistributed net income of subsidiaries
|
4,615 | 2,597 | 1,131 | |||||||||
NET INCOME
|
$ | 6,281 | $ | 4,130 | $ | 2,517 | ||||||
Comprehensive Income
|
$ | 7,131 | $ | 8,184 | $ | 2,442 |
Year Ended December 31,
|
||||||||||||
(Dollar amounts in thousands)
|
2012
|
2011
|
2010
|
|||||||||
OPERATING ACTIVITIES
|
||||||||||||
Net income
|
$ | 6,281 | $ | 4,130 | $ | 2,517 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||||||
Equity in undistributed net income of Middlefield Banking Company
|
(4,655 | ) | (3,422 | ) | (2,582 | ) | ||||||
Equity in undistributed net income of Emerald Bank
|
(240 | ) | 384 | 292 | ||||||||
Equity in undistributed net income of EMORECO
|
280 | 441 | 1,159 | |||||||||
Stock-based compensation expense
|
32 | 59 | - | |||||||||
Investment securities losses, net
|
- | 179 | - | |||||||||
Other
|
(885 | ) | (806 | ) | (602 | ) | ||||||
Net cash provided by operating activities
|
813 | 965 | 784 | |||||||||
INVESTING ACTIVITIES
|
||||||||||||
Investment in subsidiary bank
|
- | (1,500 | ) | (500 | ) | |||||||
Net cash used for investing activities
|
- | (1,500 | ) | (500 | ) | |||||||
FINANCING ACTIVITIES
|
||||||||||||
Net decrease in short-term borrowings
|
(804 | ) | - | - | ||||||||
Common stock issued
|
2,329 | 2,210 | - | |||||||||
Proceeds from dividend reinvestment plan
|
694 | 542 | 510 | |||||||||
Cash dividends
|
(2,002 | ) | (1,764 | ) | (1,637 | ) | ||||||
Net cash provided by (used for) financing activities
|
217 | 988 | (1,127 | ) | ||||||||
Increase (decrease) in cash
|
1,030 | 453 | (843 | ) | ||||||||
CASH AT BEGINNING OF YEAR
|
710 | 257 | 1,100 | |||||||||
CASH AT END OF YEAR
|
$ | 1,740 | $ | 710 | $ | 257 |
(Dollar amounts in thousands)
|
Three Months Ended
|
|||||||||||||||
March 31,
2012 |
June 30,
2012 |
September 30,
2012 |
December 31,
2012 |
|||||||||||||
Total interest income
|
$ | 7,232 | $ | 7,223 | $ | 7,342 | $ | 6,949 | ||||||||
Total interest expense
|
1,686 | 1,646 | 1,602 | 1,513 | ||||||||||||
Net interest income
|
5,546 | 5,577 | 5,740 | 5,436 | ||||||||||||
Provision for loan losses
|
600 | 450 | 143 | 975 | ||||||||||||
Net interest income after provision for loan losses
|
4,946 | 5,127 | 5,597 | 4,461 | ||||||||||||
Total noninterest income
|
794 | 1,017 | 868 | 772 | ||||||||||||
Total noninterest expense
|
3,782 | 4,041 | 4,122 | 3,694 | ||||||||||||
Income before income taxes
|
1,958 | 2,103 | 2,343 | 1,539 | ||||||||||||
Income taxes
|
435 | 463 | 494 | 270 | ||||||||||||
Net income
|
$ | 1,523 | $ | 1,640 | $ | 1,849 | $ | 1,269 | ||||||||
Per share data:
|
||||||||||||||||
Net income
|
||||||||||||||||
Basic
|
$ | 0.86 | $ | 0.85 | $ | 0.93 | $ | 0.65 | ||||||||
Diluted
|
0.86 | 0.85 | 0.93 | 0.64 | ||||||||||||
Average shares outstanding:
|
||||||||||||||||
Basic
|
1,763,982 | 1,919,333 | 1,978,181 | 1,984,818 | ||||||||||||
Diluted
|
1,764,585 | 1,921,205 | 1,983,863 | 1,991,354 |
(Dollar amounts in thousands)
|
Three Months Ended
|
|||||||||||||||
March 31,
2011 |
June 30,
2011 |
September 30,
2011 |
December 31,
2011 |
|||||||||||||
Total interest income
|
$ | 7,359 | $ | 7,421 | $ | 7,528 | $ | 7,419 | ||||||||
Total interest expense
|
2,341 | 2,304 | 2,134 | 1,873 | ||||||||||||
Net interest income
|
5,018 | 5,117 | 5,394 | 5,546 | ||||||||||||
Provision for loan losses
|
865 | 700 | 920 | 600 | ||||||||||||
Net interest income after provision for loan losses
|
4,153 | 4,417 | 4,474 | 4,946 | ||||||||||||
Total noninterest income
|
699 | 594 | 686 | 258 | ||||||||||||
Total noninterest expense
|
3,705 | 4,292 | 3,906 | 3,598 | ||||||||||||
Income before income taxes
|
1,147 | 719 | 1,254 | 1,606 | ||||||||||||
Income taxes
|
145 | (1 | ) | 175 | 277 | |||||||||||
Net income
|
$ | 1,002 | $ | 720 | $ | 1,079 | $ | 1,329 | ||||||||
Per share data:
|
||||||||||||||||
Net income
|
||||||||||||||||
Basic
|
$ | 0.62 | $ | 0.44 | $ | 0.63 | $ | 0.76 | ||||||||
Diluted
|
0.62 | 0.44 | 0.63 | 0.76 | ||||||||||||
Average shares outstanding:
|
||||||||||||||||
Basic
|
1,621,889 | 1,647,771 | 1,704,677 | 1,756,157 | ||||||||||||
Diluted
|
1,651,889 | 1,647,920 | 1,704,677 | 1,756,157 |
|
·
|
The length of time and the extent to which the fair value has been less than the amortized cost basis.
|
|
·
|
Changes in the near term prospects of the underlying collateral of a security such as changes in default rates, loss severity given default and significant changes in prepayment assumptions.
|
|
·
|
The level of cash flows generated from the underlying collateral supporting the principal and interest payments of the debt securities.
|
|
·
|
Any adverse change to the credit conditions and liquidity of the issuer, taking into consideration the latest information available about the overall financial condition of the issuer, credit ratings, recent legislation and government actions affecting the issuer’s industry and actions taken by the issuer to deal with the present economic climate.
|
For the Twelve Months Ended December 31,
|
||||||||||||||||||||||||||||||||||||
2012
|
2011
|
2010
|
||||||||||||||||||||||||||||||||||
Average
|
Average
|
Average
|
Average
|
Average
|
Average
|
|||||||||||||||||||||||||||||||
(Dollars in thousands)
|
Balance
|
Interest
|
Yield/Cost
|
Balance
|
Interest
|
Yield/Cost
|
Balance
|
Interest
|
Yield/Cost
|
|||||||||||||||||||||||||||
Interest-earning assets:
|
||||||||||||||||||||||||||||||||||||
Loans receivable
|
$ | 407,154 | $ | 22,418 | 5.51 | % | $ | 383,854 | $ | 21,854 | 5.69 | % | $ | 362,239 | $ | 21,084 | 5.82 | % | ||||||||||||||||||
Investment securities (3)
|
183,507 | 6,185 | 4.21 | % | 195,528 | 7,745 | 4.72 | % | 177,377 | 7,835 | 5.19 | % | ||||||||||||||||||||||||
Interest-bearing deposits with other banks
|
46,306 | 143 | 0.31 | % | 39,162 | 128 | 0.33 | % | 32,466 | 175 | 0.54 | % | ||||||||||||||||||||||||
Total interest-earning assets
|
636,967 | 28,746 | 4.75 | % | 618,544 | 29,727 | 5.05 | % | 572,082 | 29,094 | 5.32 | % | ||||||||||||||||||||||||
Noninterest-earning assets
|
22,701 | 21,554 | 39,896 | |||||||||||||||||||||||||||||||||
Total assets
|
$ | 659,668 | $ | 640,098 | $ | 611,978 | ||||||||||||||||||||||||||||||
Interest-bearing liabilities:
|
||||||||||||||||||||||||||||||||||||
Interest-bearing demand deposits
|
$ | 69,041 | 251 | 0.36 | % | $ | 62,918 | 326 | 0.52 | % | $ | 43,714 | 394 | 0.90 | % | |||||||||||||||||||||
Money market deposits
|
72,614 | 300 | 0.41 | % | 74,565 | 601 | 0.81 | % | 66,392 | 942 | 1.42 | % | ||||||||||||||||||||||||
Savings deposits
|
171,712 | 655 | 0.38 | % | 159,479 | 1,185 | 0.74 | % | 130,107 | 1,616 | 1.24 | % | ||||||||||||||||||||||||
Certificates of deposit
|
206,905 | 4,529 | 2.19 | % | 225,715 | 5,355 | 2.37 | % | 248,445 | 6,552 | 2.64 | % | ||||||||||||||||||||||||
Borrowings
|
22,611 | 719 | 3.18 | % | 25,521 | 1,185 | 4.64 | % | 30,865 | 1,441 | 4.67 | % | ||||||||||||||||||||||||
Total interest-bearing liabilities
|
542,883 | 6,454 | 1.19 | % | 548,198 | 8,653 | 1.58 | % | 519,522 | 10,945 | 2.11 | % | ||||||||||||||||||||||||
Noninterest-bearing liabilities
|
||||||||||||||||||||||||||||||||||||
Other liabilities
|
64,355 | 51,556 | 53,350 | |||||||||||||||||||||||||||||||||
Stockholders' equity
|
52,430 | 40,344 | 39,105 | |||||||||||||||||||||||||||||||||
Total liabilities and stockholders' equity
|
$ | 659,668 | $ | 640,098 | $ | 611,978 | ||||||||||||||||||||||||||||||
Net interest income
|
$ | 22,292 | $ | 21,074 | $ | 18,149 | ||||||||||||||||||||||||||||||
Interest rate spread (1)
|
3.56 | % | 3.47 | % | 3.22 | % | ||||||||||||||||||||||||||||||
Net interest margin (2)
|
3.74 | % | 3.65 | % | 3.41 | % | ||||||||||||||||||||||||||||||
Ratio of average interest-earning assets to average interest-bearing liabilities
|
117.33 | % | 112.83 | % | 110.12 | % |
(1)
|
Interest rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities
|
(2)
|
Net interest margin represents net interest income as a percentage of average interest-earning assets.
|
(3)
|
Tax equivalent adjustments to interest income for tax-exempt securities was $1,533, $1,485, and $1,365 for 2012, 2011, and 2010, respectively.
|
2012 versus 2011
|
2011 versus 2010
|
|||||||||||||||||||||||
Increase (decrease) due to
|
Increase (decrease) due to
|
|||||||||||||||||||||||
(Dollars in thousands)
|
Volume
|
Rate
|
Total
|
Volume
|
Rate
|
Total
|
||||||||||||||||||
Interest-earning assets:
|
||||||||||||||||||||||||
Loans receivable
|
$ | 1,305 | $ | (741 | ) | $ | 564 | $ | 1,244 | $ | (474 | ) | $ | 770 | ||||||||||
Investment securities
|
(537 | ) | (1,023 | ) | (1,560 | ) | 899 | (989 | ) | (90 | ) | |||||||||||||
Interest-bearing deposits with other banks
|
23 | (8 | ) | 15 | 29 | (76 | ) | (47 | ) | |||||||||||||||
Total interest-earning assets
|
791 | (1,772 | ) | (981 | ) | 2,172 | (1,539 | ) | 633 | |||||||||||||||
Interest-bearing liabilities:
|
||||||||||||||||||||||||
Interest-bearing demand deposits
|
27 | (102 | ) | (75 | ) | 136 | (204 | ) | (68 | ) | ||||||||||||||
Money market deposits
|
(12 | ) | (290 | ) | (302 | ) | 91 | (431 | ) | (340 | ) | |||||||||||||
Savings deposits
|
69 | (599 | ) | (530 | ) | 292 | (722 | ) | (431 | ) | ||||||||||||||
Certificates of deposit
|
(429 | ) | (397 | ) | (826 | ) | (569 | ) | (627 | ) | (1,197 | ) | ||||||||||||
Borrowings
|
(114 | ) | (352 | ) | (466 | ) | (249 | ) | (7 | ) | (256 | ) | ||||||||||||
Total interest-bearing liabilities
|
(459 | ) | (1,740 | ) | (2,199 | ) | (299 | ) | (1,993 | ) | (2,292 | ) | ||||||||||||
Net interest income
|
$ | 1,250 | $ | (32 | ) | $ | 1,218 | $ | 2,472 | $ | 453 | $ | 2,925 |
Increase
200 Basis Points
|
Decrease
200 Basis Points
|
|||||||
Net interest income - increase (decrease)
|
(0.28 | )% | 0.22 | % | ||||
Portfolio equity - increase (decrease)
|
(16.65 | )% | (5.80 | )% |
For the Years Ended
December 31, |
||||||||||||
(Dollars in thousands)
|
2012
|
2011
|
2010
|
|||||||||
Allowance balance at beginning of period
|
$ | 6,819 | $ | 6,221 | $ | 4,937 | ||||||
Loans charged off:
|
||||||||||||
Commercial and industrial
|
(230 | ) | (568 | ) | (450 | ) | ||||||
Real estate-construction
|
(135 | ) | (6 | ) | - | |||||||
Real estate-mortgage:
|
||||||||||||
Residential
|
(785 | ) | (1,862 | ) | (1,433 | ) | ||||||
Commercial
|
(123 | ) | (265 | ) | (428 | ) | ||||||
Consumer installment
|
(64 | ) | (11 | ) | (59 | ) | ||||||
Total loans charged off
|
(1,337 | ) | (2,712 | ) | (2,370 | ) | ||||||
Recoveries of loans previously charged-off:
|
||||||||||||
Commercial and industrial
|
71 | 76 | 40 | |||||||||
Real estate-construction
|
- | - | - | |||||||||
Real estate-mortgage:
|
||||||||||||
Residential
|
31 | 122 | - | |||||||||
Commercial
|
- | - | - | |||||||||
Consumer installment
|
27 | 27 | 34 | |||||||||
Total recoveries
|
129 | 225 | 74 | |||||||||
Net loans charged off
|
(1,208 | ) | (2,487 | ) | (2,296 | ) | ||||||
Provision for loan losses
|
2,168 | 3,085 | 3,580 | |||||||||
Allowance balance at end of period
|
$ | 7,779 | $ | 6,819 | $ | 6,221 | ||||||
Loans outstanding:
|
||||||||||||
Average
|
$ | 407,154 | $ | 383,854 | $ | 362,239 | ||||||
End of period
|
408,433 | 401,880 | 372,498 | |||||||||
Ratio of allowance for loan losses to loans outstanding at end of period
|
1.90 | % | 1.70 | % | 1.67 | |||||||
Net charge offs to average loans
|
(0.30 | ) | (0.65 | ) | (0.63 | ) |
At December 31,
|
||||||||||||||||||||||||
2012
|
2011
|
2010
|
||||||||||||||||||||||
Amount
|
Percent of
Loans in Each |
Amount
|
Percent of
Loans in Each |
Amount
|
Percent of
Loans in Each |
|||||||||||||||||||
(Dollars in Thousands)
|
||||||||||||||||||||||||
Type of Loans:
|
||||||||||||||||||||||||
Commercial and industrial
|
$ | 1,732 | 15.2 | % | $ | 1,296 | 14.7 | % | $ | 1,234 | 15.4 | % | ||||||||||||
Real estate construction
|
1,123 | 5.5 | 438 | 5.4 | 356 | 4.3 | ||||||||||||||||||
Mortgage:
|
||||||||||||||||||||||||
Residential
|
2,872 | 49.9 | 3,731 | 51.8 | 3,392 | 56.4 | ||||||||||||||||||
Commercial
|
1,991 | 28.3 | 1,306 | 27.0 | 1,143 | 22.6 | ||||||||||||||||||
Consumer installment
|
61 | 1.0 | 48 | 1.1 | 96 | 1.3 | ||||||||||||||||||
Total
|
$ | 7,779 | 100.0 | % | $ | 6,819 | 100.0 | % | $ | 6,221 | 100.0 | % |
At December 31,
|
||||||||||||
2012
|
2011
|
2010
|
||||||||||
(Dollars in Thousands) | ||||||||||||
Loans accounted for on a nonaccrual basis:
|
||||||||||||
Commercial and industrial
|
$ | 560 | $ | 1,576 | $ | 2,540 | ||||||
Real estate-construction
|
364 | 663 | 648 | |||||||||
Real estate-mortgage:
|
||||||||||||
Residential
|
8,329 | 10,645 | 11,686 | |||||||||
Commercial
|
2,105 | 3,921 | 3,513 | |||||||||
Consumer installment
|
18 | - | 12 | |||||||||
Total nonaccrual loans
|
11,376 | 16,805 | 18,399 | |||||||||
Troubled debt restructuring:
|
||||||||||||
Commercial and industrial
|
503 | 778 | 619 | |||||||||
Real estate-construction
|
- | 3,883 | - | |||||||||
Real estate-mortgage:
|
||||||||||||
Residential
|
1,250 | 797 | 530 | |||||||||
Commercial
|
617 | 1,940 | 428 | |||||||||
Consumer installment
|
11 | 24 | 10 | |||||||||
Total troubled debt restructuring
|
2,381 | 7,422 | 1,587 | |||||||||
Accruing loans which are contractually past due 90 days or more:
|
||||||||||||
Commercial and industrial
|
348 | 44 | - | |||||||||
Real estate-construction
|
- | - | - | |||||||||
Real estate-mortgage:
|
||||||||||||
Residential
|
89 | 275 | - | |||||||||
Commercial
|
- | - | - | |||||||||
Consumer installment
|
- | - | - | |||||||||
Total accruing loans which are contractually past due 90 days or more
|
437 | 319 | - | |||||||||
Total non - performing loans
|
14,194 | 24,546 | 19,986 | |||||||||
Other real estate owned
|
1,846 | 2,196 | 2,302 | |||||||||
Total non-performing assets
|
$ | 16,040 | $ | 26,742 | $ | 22,288 | ||||||
Total non-performing loans to total loans
|
3.48 | % | 6.11 | % | 5.37 | % | ||||||
Total non-performing loans to total assets
|
2.12 | % | 3.75 | % | 3.16 | % | ||||||
Total non-performing assets to total assets
|
2.39 | % | 4.09 | % | 3.53 | % |
High Bid
|
Low Bid
|
Cash Dividends
per share |
||||||||||
2012
|
||||||||||||
First Quarter
|
$ | 21.25 | $ | 17.00 | $ | 0.26 | ||||||
Second Quarter
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$ | 24.50 | $ | 21.25 | $ | 0.26 | ||||||
Third Quarter
|
$ | 25.00 | $ | 21.55 | $ | 0.26 | ||||||
Fourth Quarter
|
$ | 26.70 | $ | 22.25 | $ | 0.26 | ||||||
2011
|
||||||||||||
First Quarter
|
$ | 19.00 | $ | 16.61 | $ | 0.26 | ||||||
Second Quarter
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$ | 19.00 | $ | 17.00 | $ | 0.26 | ||||||
Third Quarter
|
$ | 18.37 | $ | 16.50 | $ | 0.26 | ||||||
Fourth Quarter
|
$ | 17.95 | $ | 16.15 | $ | 0.26 |
|
1
|
The Middlefield Banking Company (“MBC”), an Ohio-chartered commercial bank that began operations in 1901. MBC engages in a general commercial banking business in northeastern Ohio. The principal executive office is located at 15985 East High Street, Middlefield, Ohio 44062-0035.
|
|
2
|
Emerald Bank (“EB”), an Ohio-chartered commercial bank headquartered in Dublin, Ohio. EB engages in a general commercial banking business in central Ohio. The principal executive office is located at 6215 Perimeter Drive, Dublin Ohio 43017.
|
|
3
|
On October 23, 2009 Middlefield received from the Federal Reserve Bank of Cleveland approval to establish an asset resolution subsidiary. Organized as an Ohio corporation under the name EMORECO, Inc. and wholly owned by Middlefield Banc Corp, the purpose of the asset resolution subsidiary is to maintain, manage, and ultimately dispose of nonperforming loans and real estate acquired by subsidiary banks as the result of borrower default on real estate-secured loans.
|
1.
|
I have reviewed this Form 10-K for the year ended December 31, 2012 of Middlefield Banc Corp.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have:
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
Date: March 13, 2013
|
/s/ Thomas G. Caldwell
|
|
Thomas G. Caldwell.
|
||
President and Chief Executive Officer
|
1.
|
I have reviewed this Form 10-K for the year ended December 31, 2012 of Middlefield Banc Corp.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have:
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
Date: March 13, 2013
|
/s/ Donald L. Stacy
|
|
Donald L. Stacy
|
||
Principal Financial and Accounting Officer
|
/s/ Thomas G. Caldwell
|
/s/ Donald L. Stacy
|
|||
Thomas G. Caldwell
|
Donald L. Stacy
|
|||
President and Chief Executive Officer
|
Principal Financial and Accounting Officer
|
Note 10 - Other Borrowings (Tables)
|
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2012
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Schedule of Debt [Table Text Block] |
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Schedule of Maturities of Long-term Debt [Table Text Block] |
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Note 3 - Investment Securities Available For Sale (Detail) - Amortized Cost and Fair Value of Debt Securities by Contractual Maturity (USD $)
In Thousands, unless otherwise specified |
Dec. 31, 2012
|
---|---|
Due in one year or less | $ 2,179 |
Due in one year or less | 2,239 |
Due after one year through five years | 5,555 |
Due after one year through five years | 5,870 |
Due after five years through ten years | 22,310 |
Due after five years through ten years | 23,240 |
Due after ten years | 155,511 |
Due after ten years | 162,373 |
Total | 185,555 |
Total | $ 193,722 |
Note 6 - Goodwill and Intangible Assets (Detail) - Future Amortization Expense (USD $)
|
Dec. 31, 2012
|
Dec. 31, 2011
|
---|---|---|
2013 | $ 40,000 | |
2014 | 40,000 | |
2015 | 40,000 | |
2016 | 40,000 | |
Thereafter | 35,000 | |
Total | $ 195,000 | $ 235,000 |
Note 3 - Investment Securities Available For Sale (Detail) - Sales of Available for Sale Securities (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2012
|
Dec. 31, 2011
|
Dec. 31, 2010
|
|
Proceeds from sales | $ 32,985 | $ 24,127 | $ 5,874 |
Gross realized gains | 704 | 830 | 74 |
Gross realized losses | (94) | (809) | (29) |
Impairment losses | $ (194) | $ (34) |
Note 10 - Other Borrowings (Detail) - Maturities of Other Borrowings (USD $)
In Thousands, unless otherwise specified |
Dec. 31, 2012
|
Dec. 31, 2011
|
---|---|---|
2013 (in Dollars) | $ 1,362 | |
2013 | 3.95% | |
2014 (in Dollars) | 984 | |
2014 | 3.99% | |
2015 (in Dollars) | 685 | |
2015 | 4.01% | |
2016 (in Dollars) | 502 | |
2016 | 4.00% | |
2017 (in Dollars) | 373 | |
2017 | 4.00% | |
Beyond 2017 (in Dollars) | 9,065 | |
Beyond 2017 | 2.17% | |
Total (in Dollars) | $ 12,970 | $ 16,831 |
Total | 2.63% |
Note 19 - Parent Company (Tables)
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12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2012
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Schedule of Condensed Balance Sheet [Table Text Block] |
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Schedule of Condensed Income Statement [Table Text Block] |
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Schedule of Condensed Cash Flow Statement [Table Text Block] |
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Note 4 - Loans And Related Allowance For Loan Losses (Tables)
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12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2012
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Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block] |
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Schedule of Financing Receivable by Segment [Table Text Block] |
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Schedule of Credit Losses for Financing Receivables, Current [Table Text Block] |
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Impaired Financing Receivables [Table Text Block] |
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Troubled Debt Restructurings on Financing Receivables [Table Text Block] |
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Troubled Debt Restructurings That Subsequently Defaulted [Table Text Block] |
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Financing Receivable Credit Quality Indicators [Table Text Block] |
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Past Due Financing Receivables [Table Text Block] |
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Note 11 - Other Liabilities (Detail) - Other Liabilities (USD $)
In Thousands, unless otherwise specified |
Dec. 31, 2012
|
Dec. 31, 2011
|
---|---|---|
Accrued interest payable | $ 492 | $ 645 |
Other | 1,516 | 1,468 |
Total | $ 2,008 | $ 2,113 |
Note 8 - Deposits (Detail) - Maturities on Time Deposits of $100,000 or More (USD $)
|
Dec. 31, 2012
|
Dec. 31, 2011
|
---|---|---|
Within three months (in Dollars) | $ 10,031,000 | |
Within three months | 12.55% | |
Beyond three but within six months (in Dollars) | 9,005,000 | |
Beyond three but within six months | 11.27% | |
Beyond six but within twelve months (in Dollars) | 18,234,000 | |
Beyond six but within twelve months | 22.82% | |
Beyond one year (in Dollars) | 42,648,000 | |
Beyond one year | 53.36% | |
Total (in Dollars) | $ 79,918,000 | $ 86,793,000 |
Total | 100.00% |
Note 14 - Commitments (Detail) - Future Payments under Operating Leases (USD $)
In Thousands, unless otherwise specified |
Dec. 31, 2012
|
---|---|
2013 | $ 271 |
2014 | 280 |
2015 | 284 |
2016 | 284 |
2017 | 284 |
Thereafter | $ 284 |
Note 4 - Loans And Related Allowance For Loan Losses (Detail) (USD $)
|
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2012
|
Dec. 31, 2011
|
Dec. 31, 2010
|
|
Number of Days Past Due | 90 | ||
Financing Receivable, Modifications, Recorded Investment | $ 4,600,000 | $ 10,000,000 | |
Loans and Leases Receivable, Impaired, Interest Lost on Nonaccrual Loans | 756,000 | 859,000 | 470,000 |
Threshold for Loans Evaluated for Impairment [Member] | Outside Consultant [Member]
|
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Loans and Leases Receivable, Gross, Commercial | 250,000 | ||
Threshold for Loans Evaluated for Impairment [Member] | Criticized Relationships [Member]
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Financing Receivable, Gross | 125,000 | ||
Threshold for Loans Evaluated for Impairment [Member]
|
|||
Notes, Loans and Financing Receivable, Gross, Current | 150,000 | ||
Loans and Leases Receivable, Gross, Commercial | $ 200,000 |
Note 10 - Other Borrowings (Detail) (USD $)
|
0 Months Ended | 1 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|---|
Apr. 30, 2012
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Apr. 17, 2012
|
Dec. 31, 2006
|
Dec. 31, 2011
|
Dec. 31, 2006
Mandatorily Redeemable Securities [Member]
Special Purpose Entity [Member]
|
Dec. 31, 2012
Federal Home Loan Bank [Member]
|
|
Line of Credit Facility, Maximum Borrowing Capacity | $ 68,900,000 | |||||
Securities Sold under Agreements to Repurchase | 8,000,000 | |||||
Stock Issued During Period, Shares, New Issues (in Shares) | 103,585 | 93,050 | 248,000 | 138,150 | ||
Notes Payable | $ 8,248,000 |
Note 13 - Employee Benefits (Detail) - Stocks Options Outstanding by Grant Date (USD $)
|
0 Months Ended | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2012
|
Dec. 31, 2011
|
Dec. 31, 2010
|
Dec. 08, 2003
Granted December 8, 2003 [Member]
|
May 12, 2004
Granted May 12, 2004 [Member]
|
Dec. 13, 2004
Granted December 13, 2004 [Member]
|
Dec. 14, 2005
Granted December 14, 2005 [Member]
|
Dec. 10, 2006
Granted December 10, 2006 [Member]
|
Apr. 19, 2007
Granted April 19, 2007 [Member]
|
May 16, 2007
Granted May 16, 2007 [Member]
|
Dec. 10, 2007
Granted December 10, 2007 [Member]
|
Jan. 02, 2008
Granted January 2, 2008 [Member]
|
Nov. 10, 2008
Granted November 10, 2008 [Member]
|
May 09, 2011
Granted May 19, 2011 [Member]
|
|
Exercise Price | $ 27.25 | $ 26.81 | $ 27.87 | $ 24.29 | $ 27.35 | $ 30.45 | $ 36.73 | $ 40.24 | $ 37.33 | $ 37.48 | $ 37.00 | $ 36.25 | $ 23.00 | $ 17.55 |
Shares Outstanding (in Shares) | 79,693 | 88,774 | 89,077 | 18,112 | 907 | 11,223 | 7,163 | 3,150 | 3,639 | 1,337 | 2,450 | 1,337 | 21,500 | 8,875 |
Contractual Average Life | 343 days | 1 year 120 days | 1 year 346 days | 2 years 346 days | 3 years 346 days | 4 years 113 days | 4 years 149 days | 4 years 346 days | 5 years 43 days | 5 years 346 days | 8 years 149 days | |||
Average Exercise Price | $ 27.25 | $ 26.81 | $ 27.87 | $ 24.29 | $ 27.35 | $ 30.45 | $ 36.73 | $ 40.24 | $ 37.33 | $ 37.48 | $ 37.00 | $ 36.25 | $ 23.00 | $ 17.55 |
Shares Exercisable (in Shares) | 79,693 | 79,774 | 18,112 | 907 | 11,223 | 7,163 | 3,150 | 3,639 | 1,337 | 2,450 | 1,337 | 21,500 | 8,875 | |
Average Exercise Price | $ 27.25 | $ 27.85 | $ 24.29 | $ 27.35 | $ 30.45 | $ 36.73 | $ 40.24 | $ 37.73 | $ 37.48 | $ 37.00 | $ 36.25 | $ 23.00 | $ 17.55 |
Note 12 - Income Taxes (Detail) - Deferred Tax Assets and Liabilities (USD $)
In Thousands, unless otherwise specified |
Dec. 31, 2012
|
Dec. 31, 2011
|
---|---|---|
Deferred tax assets: | ||
Allowance for loan losses | $ 2,645 | $ 2,318 |
Supplemental retirement plan | 218 | 182 |
Alternative minimum tax credits | 551 | |
Investment security basis adjustment | 66 | 66 |
Nonaccrual interest income | 508 | 298 |
Deferred origination fees, net | 189 | 105 |
OREO adjustments | 116 | |
Net operating losses | 86 | 190 |
Other | 47 | 125 |
Gross deferred tax assets | 3,875 | 3,835 |
Deferred tax liabilities: | ||
Premises and equipment | 434 | 405 |
Net unrealized gain on securities | 2,777 | 2,339 |
FHLB stock dividends | 225 | 225 |
Intangibles | 256 | 208 |
Other | 2 | 37 |
Gross deferred tax liabilities | 3,694 | 3,214 |
Net deferred tax assets | $ 181 | $ 621 |
Note 14 - Commitments (Detail) (USD $)
|
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2011
|
Dec. 31, 2010
|
Dec. 31, 2009
|
|
Operating Leases, Rent Expense | $ 248,000 | $ 269,000 | |
Operating Leases, Rent Expense, Net | $ 234,000 |
Note 10 - Other Borrowings (Detail) - Other Borrowings (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | |
---|---|---|
Dec. 31, 2012
|
Dec. 31, 2011
|
|
Balance (in Dollars) | $ 12,970 | $ 16,831 |
Minimum [Member] | Fixed Rate Amortizing [Member]
|
||
Stated interest rate | 2.70% | |
Minimum [Member] | Convertible Debt [Member]
|
||
Stated interest rate | 4.14% | |
Minimum [Member] | Junior Subordinated Debt [Member]
|
||
Stated interest rate | 1.98% | |
Maximum [Member] | Fixed Rate Amortizing [Member]
|
||
Stated interest rate | 4.48% | |
Maximum [Member] | Convertible Debt [Member]
|
||
Stated interest rate | 4.14% | |
Maximum [Member] | Junior Subordinated Debt [Member]
|
||
Stated interest rate | 6.58% | |
Fixed Rate Amortizing [Member]
|
||
Earliest Maturity Date | Dec. 31, 2008 | |
Latest Maturity Date | Dec. 31, 2008 | |
Weighted average interest rate | 3.99% | |
Balance (in Dollars) | 4,722 | 6,576 |
Convertible Debt [Member]
|
||
Earliest Maturity Date | Dec. 31, 2008 | |
Latest Maturity Date | Dec. 31, 2008 | |
Weighted average interest rate | 4.14% | |
Balance (in Dollars) | 2,007 | |
Junior Subordinated Debt [Member]
|
||
Earliest Maturity Date | Dec. 31, 2008 | |
Latest Maturity Date | Dec. 31, 2008 | |
Weighted average interest rate | 2.50% | |
Balance (in Dollars) | $ 8,248 | $ 8,248 |
Note 7 - Other Assets (Detail) - Components of Other Assets (USD $)
In Thousands, unless otherwise specified |
Dec. 31, 2012
|
Dec. 31, 2011
|
---|---|---|
FHLB stock | $ 1,887 | $ 1,887 |
Accrued interest | 2,163 | 2,234 |
Deferred tax asset, net | 181 | 621 |
Prepaid federal deposit insurance | 513 | 977 |
Other Real Estate Owned | 1,846 | 2,196 |
Other | 1,460 | 2,128 |
Total | 8,051 | 10,043 |
Investment Securities [Member]
|
||
Accrued interest | 1,032 | 1,185 |
Loans [Member]
|
||
Accrued interest | $ 1,132 | $ 1,049 |
Note 17 - Fair Value Disclosure Measurements
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Fair Value Disclosures [Text Block] |
17.
FAIR
VALUE DISCLOSURE MEASUREMENTS
The
following disclosures show the hierarchal disclosure
framework associated with the level of pricing observations
utilized in measuring assets and liabilities at fair
value. The three broad levels defined by U.S.
generally accepted accounting principles are as
follows:
This
hierarchy requires the use of observable market data when
available.
The
following table presents the assets reported on the balance
sheet at their fair value as of December 31, 2012 and 2011,
by level within the fair value
hierarchy. Financial assets and liabilities are
classified in their entirety based on the lowest level of
input that is significant to the fair value
measurement.
Financial
instruments are considered Level III when their values are
determined using pricing models, discounted cash flow
methodologies or similar techniques and at least one
significant model assumption or input is
unobservable. In addition to these unobservable
inputs, the valuation models for Level III financial
instruments typically also rely on a number of inputs that
are readily observable either directly or
indirectly. Level III financial instruments also
include those for which the determination of fair value
requires significant management judgment or
estimation.
The
following tables present the assets measured on a
nonrecurring basis on the Consolidated Balance Sheet at their
fair value by level within the fair value hierarchy. Impaired
loans that are collateral-dependent are written down to fair
value through the establishment of specific reserves.
Techniques used to value the collateral that secure the
impaired loan include: quoted market prices for identical
assets classified as Level I inputs and observable inputs,
employed by certified appraisers, for similar assets
classified as Level II inputs. In cases where valuation
techniques included inputs that are unobservable and are
based on estimates and assumptions developed by management
based on the best information available under each
circumstance, the asset valuation is classified as Level III
inputs.
The
following table presents additional quantitative information
about assets measured at fair value on a non-recurring basis
and for which the Company uses Level III inputs to determine
fair value:
The
estimated fair value of the Company’s financial
instruments is as follows:
Financial
instruments are defined as cash, evidence of ownership
interest in an entity, or a contract which creates an
obligation or right to receive or deliver cash or another
financial instrument from/to a second entity on potentially
favorable or unfavorable terms.
Fair
value is defined as the amount at which a financial
instrument could be exchanged in a current transaction
between willing parties other than in a forced liquidation
sale. If a quoted market price is available for a
financial instrument, the estimated fair value would be
calculated based upon the market price per trading unit of
the instrument.
If
no readily available market exists, the fair value estimates
for financial instruments should be based upon
management’s judgment regarding current economic
conditions, interest rate risk, expected cash flows, future
estimated losses, and other factors as determined through
various option pricing formulas or simulation
modeling. Since many of these assumptions result
from judgments made by management based upon estimates which
are inherently uncertain, the resulting estimated fair values
may not be indicative of the amount realizable in the sale of
a particular financial instrument. In addition,
changes in assumptions on which the estimated fair values are
based may have a significant impact on the resulting
estimated fair values.
As
certain assets such as deferred tax assets and premises and
equipment are not considered financial instruments, the
estimated fair value of financial instruments would not
represent the full value of the Company.
The
Company employed simulation modeling in determining the
estimated fair value of financial instruments for which
quoted market prices were not available based upon the
following assumptions:
Cash and
Cash Equivalents, Federal Home Loan Bank Stock, Accrued
Interest Receivable, Accrued Interest Payable, and Short-Term
Borrowings
The
fair value is equal to the current carrying value.
Bank-Owned
Life Insurance
The
fair value is equal to the cash surrender value of the life
insurance policies.
Investment
Securities Available for Sale
The
fair value of investment securities is equal to the available
quoted market price. If no quoted market price is
available, fair value is estimated using the quoted market
price for similar securities. Fair value for certain
private-label collateralized mortgage obligations were
determined utilizing discounted cash flow models, due to the
absence of a current market to provide reliable market quotes
for the instruments.
Loans
The
fair value is estimated by discounting future cash flows
using current market inputs at which loans with similar terms
and qualities would be made to borrowers of similar credit
quality. Where quoted market prices were
available, primarily for certain residential mortgage loans,
such market rates were utilized as estimates for fair
value.
Deposits
and Other Borrowed Funds
The
fair values of certificates of deposit and other borrowed
funds are based on the discounted value of contractual cash
flows. The discount rates are estimated using
rates currently offered for similar instruments with similar
remaining maturities. Demand, savings, and money
market deposits are valued at the amount payable on demand as
of year-end.
Commitments
to Extend Credit
These
financial instruments are generally not subject to sale, and
estimated fair values are not readily available. The carrying
value, represented by the net deferred fee arising from the
unrecognized commitment or letter of credit, and the fair
value, determined by discounting the remaining contractual
fee over the term of the commitment using fees currently
charged to enter into similar agreements with similar credit
risk, are not considered material for
disclosure. The contractual amounts of unfunded
commitments and letters of credit are presented in Note
14.
|
Note 2 - Earnings Per Share (Detail) (USD $)
|
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2012
|
Dec. 31, 2011
|
Dec. 31, 2010
|
|
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number (in Shares) | 79,693 | 88,774 | 89,077 |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Lower Range Limit | $ 17.55 | $ 17.55 | $ 22.33 |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Upper Range Limit | $ 40.24 | $ 40.24 | $ 40.24 |
Incremental Common Shares Attributable to Share-based Payment Arrangements (in Shares) | 4,972 | 608 | |
Incremental Common Shares Attributable to Call Options and Warrants (in Shares) | 12,419 | ||
Share Price | $ 16 | ||
Stock Options [Member]
|
|||
Incremental Common Shares Attributable to Share-based Payment Arrangements (in Shares) | 8,875 | 9,561 |
Note 13 - Employee Benefits (Tables)
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12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Schedule of Net Periodic Benefit Cost Not yet Recognized [Table Text Block] |
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Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] |
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Schedule of Other Share-based Compensation, Activity [Table Text Block] |
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Note 9 - Short-Term Borrowings (Detail) - Outstanding Balances and Related Information of Short-Term Borrowings (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2012
|
Dec. 31, 2011
|
Dec. 31, 2010
|
|
Balance at year-end | $ 6,538 | $ 7,392 | $ 7,632 |
Average balance outstanding | 7,005 | 7,276 | 7,320 |
Maximum month-end balance | $ 7,458 | $ 7,552 | $ 8,178 |
Weighted-average rate at year-end | 2.97% | 3.14% | 3.10% |
Weighted-average rate during the year | 3.15% | 3.23% | 3.40% |
Note 19 - Parent Company (Detail) - Condensed Balance Sheet (USD $)
In Thousands, unless otherwise specified |
Dec. 31, 2012
|
Dec. 31, 2011
|
Dec. 31, 2010
|
Dec. 31, 2009
|
---|---|---|---|---|
ASSETS | ||||
Cash and due from banks | $ 33,568 | $ 15,730 | ||
Investment securities available for sale | 194,472 | 193,977 | ||
Other assets | 8,051 | 10,043 | ||
TOTAL ASSETS | 670,288 | 654,551 | ||
LIABILITIES | ||||
Short-term borrowings | 6,538 | 7,392 | 7,632 | |
TOTAL LIABILITIES | 614,851 | 607,298 | ||
STOCKHOLDERS' EQUITY | 55,437 | 47,253 | 38,022 | 36,707 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 670,288 | 654,551 | ||
Non-Bank Subsidiary [Member] | Parent Company [Member]
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ASSETS | ||||
Investment in subsidiaries | 2,664 | 2,944 | ||
Subsidiary Banks [Member] | Parent Company [Member]
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ASSETS | ||||
Investment in subsidiaries | 62,002 | 55,256 | ||
Parent Company [Member]
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ASSETS | ||||
Cash and due from banks | 1,740 | 710 | ||
Investment securities available for sale | 751 | 751 | ||
Other assets | 1,453 | 1,638 | ||
TOTAL ASSETS | 68,610 | 61,299 | ||
LIABILITIES | ||||
Trust preferred securities | 8,248 | 8,248 | ||
Short-term borrowings | 4,896 | 5,700 | ||
Other liabilities | 29 | 98 | ||
TOTAL LIABILITIES | 13,173 | 14,046 | ||
STOCKHOLDERS' EQUITY | 55,437 | 47,253 | ||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 68,610 | $ 61,299 |
Note 8 - Deposits (Tables)
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Dec. 31, 2012
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Schedule of Maturities of Time Deposits of $100,000 or More [Table Text Block] |
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Note 3 - Investment Securities Available For Sale (Detail) (USD $)
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12 Months Ended | 12 Months Ended | ||||||
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Dec. 31, 2012
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Dec. 31, 2011
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Dec. 31, 2012
Private Label Collateralized Mortgage Obligations [Member]
|
Dec. 31, 2012
Mortgage-backed Securities, Issued by Private Enterprises [Member]
|
Dec. 31, 2011
Mortgage-backed Securities, Issued by Private Enterprises [Member]
|
Dec. 31, 2011
Equity Securities in Financial Institutions [Member]
|
Dec. 31, 2012
Equity Securities in Financial Institutions [Member]
|
Dec. 31, 2010
Collateralized Mortgage Obligations [Member]
|
|
Available-for-sale Securities Pledged as Collateral | $ 62,518,000 | $ 53,724,000 | ||||||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions | 34 | |||||||
Available-for-sale Securities, Current | 194,472,000 | 193,977,000 | 4,600,000 | 5,064,000 | 7,321,000 | 750,000 | 750,000 | |
Available-for-sale Securities, Gross Unrealized Gains | 8,427,000 | 7,104,000 | 511,000 | 411,000 | ||||
Other than Temporary Impairment Losses, Investments, Portion Recognized in Earnings, Net, Available-for-sale Securities | $ 194,000 | $ 35,000 |
Note 5 - Premises And Equipment (Detail) (USD $)
|
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2012
|
Dec. 31, 2011
|
Dec. 31, 2010
|
|
Depreciation | $ 591,000 | $ 499,000 | $ 542,000 |
Note 20 - Selected Quarterly Financial Data (Unaudited) (Tables)
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Schedule of Quarterly Financial Information [Table Text Block] |
|
Note 1 - Summary of Significant Accounting Policies
|
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2012
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Significant Accounting Policies [Text Block] |
1.
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
A
summary of the significant accounting and reporting policies
applied in the presentation of the accompanying financial
statements follows:
Nature
of Operations and Basis of Presentation
Middlefield
Banc Corp. (the “Company”) is an Ohio corporation
organized to become the holding company of The Middlefield
Banking Company (“MBC”). MBC is a
state-chartered bank located in Ohio. On April 19,
2007, Middlefield Banc Corp. acquired Emerald Bank
(“EB”), an Ohio-chartered commercial bank
headquartered in Dublin, Ohio. On October 23,
2009, the Company established an asset resolution subsidiary
named EMORECO, Inc. The Company and its
subsidiaries derive substantially all of their income from
banking and bank-related services, which includes interest
earnings on residential real estate, commercial mortgage,
commercial and consumer financings as well as interest
earnings on investment securities and deposit services to its
customers through ten locations. The Company is
supervised by the Board of Governors of the Federal Reserve
System, while MBC and EB are subject to regulation and
supervision by the Federal Deposit Insurance Corporation and
the Ohio Division of Financial Institutions.
The
consolidated financial statements of the Company include its
wholly owned subsidiaries, MBC, EB, and EMORECO, Inc. (the
“Banks”). Significant intercompany
items have been eliminated in preparing the consolidated
financial statements.
The
financial statements have been prepared in conformity with
U.S. generally accepted accounting principles. In
preparing the financial statements, management is required to
make estimates and assumptions that affect the reported
amounts of assets and liabilities as of the balance sheet
date and revenues and expenses for the
period. Actual results could differ significantly
from those estimates.
Investment
Securities
Investment
securities are classified at the time of purchase, based on
management’s intention and ability, as securities held
to maturity or securities available for sale. Debt
securities acquired with the intent and ability to hold to
maturity are stated at cost adjusted for amortization of
premium and accretion of discount, which are computed using a
level yield method and recognized as adjustments of interest
income. Certain other debt securities have been
classified as available for sale to serve principally as a
source of liquidity. Unrealized holding gains and
losses for available-for-sale securities are reported as a
separate component of stockholders’ equity, net of tax,
until realized. Realized security gains and losses
are computed using the specific identification method.
Interest and dividends on investment securities are
recognized as income when earned.
Common
stock of the Federal Home Loan Bank (“FHLB”)
represents ownership in an institution that is wholly owned
by other financial institutions. This equity
security is accounted for at cost and classified with other
assets. While the FHLBs have been negatively
impacted by economic conditions of the past several years,
the FHLB of Cincinnati has reported profits for 2012 and
2011, remains in compliance with regulatory capital and
liquidity requirements, and continues to pay dividends on the
stock and make redemptions at the par value. With
consideration given to these factors, management concluded
that the stock was not impaired at December 31, 2012 or
2011.
Securities
are evaluated on at least a quarterly basis and more
frequently when economic or market conditions warrant such an
evaluation to determine whether a decline in their value is
other than temporary. For debt securities, management
considers whether the present value of cash flows expected to
be collected are less than the security’s amortized
cost basis (the difference defined as the credit loss), the
magnitude and duration of the decline, the reasons underlying
the decline and the Company’s intent to sell the
security or whether it is more likely than not that the
Company would be required to sell the security before its
anticipated recovery in market value, to determine whether
the loss in value is other than temporary. Once a decline in
value is determined to be other than temporary, if the
investor does not intend to sell the security, and it is
more-likely-than-not that it will not be required to sell the
security, before recovery of the security’s amortized
cost basis, the charge to earnings is limited to the amount
of credit loss. Any remaining difference between fair value
and amortized cost (the difference defined as the non-credit
portion) is recognized in other comprehensive income, net of
applicable taxes. Otherwise, the entire difference between
fair value and amortized cost is charged to earnings.
Loans
Loans
that management has the intent and ability to hold for the
foreseeable future or until maturity or payoff generally are
reported at their outstanding unpaid principal balances net
of the allowance for loan losses. Interest income
is recognized as income when earned on the accrual
method. The accrual of interest is discontinued on
a loan when management believes, after considering economic
and business conditions, the borrower’s financial
condition is such that collection of interest is
doubtful. Interest received on nonaccrual loans is
recorded as income or applied against principal according to
management’s judgment as to the collectability of such
principal.
Loan
origination fees and certain direct loan origination costs
are being deferred and the net amount amortized as an
adjustment of the related loan’s
yield. Management is amortizing these amounts over
the contractual life of the related loans.
Allowance
for Loan Losses
The
allowance for loan losses represents the amount which
management estimates is adequate to provide for probable loan
losses inherent in its loan portfolio. The
allowance method is used in providing for loan losses.
Accordingly, all loan losses are charged to the allowance,
and all recoveries are credited to it. The
allowance for loan losses is established through a provision
for loan losses which is charged to
operations. The provision is based on
management’s periodic evaluation of the adequacy of the
allowance for loan losses, which encompasses the overall risk
characteristics of the various portfolio segments, past
experience with losses, the impact of economic conditions on
borrowers, and other relevant factors. The
estimates used in determining the adequacy of the allowance
for loan losses, including the amounts and timing of future
cash flows expected on impaired loans, are particularly
susceptible to significant change in the near term.
A
loan is considered impaired when it is probable the borrower
will not repay the loan according to the original contractual
terms of the loan agreement. Management has
determined that first mortgage loans on one-to-four family
properties and all consumer loans represent large groups of
smaller-balance homogeneous loans that are to be collectively
evaluated. Loans that experience insignificant
payment delays, which are defined as 90 days or less,
generally are not classified as impaired. A loan
is not impaired during a period of delay in payment if the
Company expects to collect all amounts due, including
interest accrued, at the contractual interest rate for the
period of delay. All loans identified as impaired
are evaluated independently by management. The
Company estimates credit losses on impaired loans based on
the present value of expected cash flows or the fair value of
the underlying collateral if the loan repayment is expected
to come from the sale or operation of such
collateral. Impaired loans, or portions thereof,
are charged off when it is determined a realized loss has
occurred. Until such time, an allowance for loan
losses is maintained for estimated losses. Cash
receipts on impaired loans are applied first to accrued
interest receivable unless otherwise required by the loan
terms, except when an impaired loan is also a nonaccrual
loan, in which case the portion of the payment related to
interest is recognized as income.
Mortgage
loans secured by one-to-four family properties and all
consumer loans are large groups of smaller-balance
homogeneous loans and are measured for impairment
collectively. Management determines the
significance of payment delays on a case-by-case basis,
taking into consideration all circumstances concerning the
loan, the creditworthiness and payment history of the
borrower, the length of the payment delay, and the amount
of shortfall in relation to the principal and interest
owed.
Premises
and Equipment
Land
is carried at cost. Premises and equipment are
stated at cost net of accumulated
depreciation. Depreciation is computed on the
straight-line method over the estimated useful lives of the
assets, which range from 3 to 20 years for furniture,
fixtures, and equipment and 3 to 40 years for buildings and
leasehold improvements. Expenditures for
maintenance and repairs are charged against income as
incurred. Costs of major additions and
improvements are capitalized.
Goodwill
The
Company accounts for goodwill using a two-step process for
testing the impairment of goodwill on at least an annual
basis. This approach could cause more volatility
in the Company’s reported net income because impairment
losses, in any, could occur irregularly and in varying
amounts. No impairment of goodwill was recognized
in any of the periods presented.
Intangible
Assets
Intangible
assets include core deposit intangibles, which are a measure
of the value of consumer demand and savings deposits acquired
in business combinations accounted for as purchases. The core
deposit intangibles are being amortized to expense over a 10
year life on a straight-line basis. The recoverability of the
carrying value of intangible assets is evaluated on an
ongoing basis, and permanent declines in value, if any, are
charged to expense.
Bank-Owned
Life Insurance (“BOLI”)
The
Company owns insurance on the lives of a certain group of key
employees. The policies were purchased to help offset the
increase in the costs of various fringe benefit plans
including healthcare. The cash surrender value of these
policies is included as an asset on the Consolidated Balance
Sheet and any increases in the cash surrender value are
recorded as noninterest income on the Consolidated Statement
of Income. In the event of the death of an insured individual
under these policies, the Company would receive a death
benefit, which would be recorded as noninterest
income.
Other
Real Estate Owned
Real
estate properties acquired through foreclosure are initially
recorded at fair value at the date of foreclosure,
establishing a new cost basis. After foreclosure,
management periodically performs valuations and the real
estate is carried at the lower of cost or fair value less
estimated cost to sell. Revenue and expenses from
operations of the properties, gains or losses on sales and
additions to the valuation allowance are included in
operating results.
Income
Taxes
The
Company and its subsidiaries file a consolidated federal
income tax return. Deferred tax assets and
liabilities are reflected at currently enacted income tax
rates applicable to the period in which the deferred tax
assets or liabilities are expected to be realized or
settled. As changes in tax laws or rates are
enacted, deferred tax assets and liabilities are adjusted
through the provision for income taxes.
Earnings
Per Share
The
Company provides dual presentation of basic and diluted
earnings per share. Basic earnings per share are
calculated utilizing net income as reported in the numerator
and average shares outstanding in the denominator. The
computation of diluted earnings per share differs in that the
dilutive effects of any stock options, warrants, and
convertible securities are adjusted in the
denominator.
Stock-Based
Compensation
The
Company accounts for stock compensation based on the grant
date fair value of all share-based payment awards that are
expected to vest, including employee share options to be
recognized as employee compensation expense over the
requisite service period.
For
purposes of computing results, the Company estimated the fair
values of stock options using the Black-Scholes
option-pricing model. The model requires the use
of subjective assumptions that can materially affect fair
value estimates. The fair value of each option is
amortized into compensation expense on a straight-line basis
between the grant date for the option and each vesting date.
The fair value of each stock option granted was estimated
using the following weighted-average assumptions:
During
the years ended December 31, 2012, 2011, and 2010, the
Company recorded $0, $16,000, and $0, of compensation cost
related to vested stock options. As of December 31, 2012,
there was no unrecognized compensation cost related to
unvested stock options. The weighted-average fair value of
the stock option granted for 2011 was $1.75.
The
Company also issued 1,722 and 2,400 shares of restricted
stock and recorded stock-based compensation expense of
$32,000 and $43,000 in 2012 and 2011, respectively.
Cash
Flow Information
The
Company has defined cash and cash equivalents as those
amounts included in the Consolidated Balance Sheet captions
as “Cash and due from banks” and “Federal
funds sold” with original maturities of less than 90
days.
Advertising
Costs
Advertising
costs are expensed as incurred. Advertising
expenses amounted to $423,000, $439,000, and $401,000, for
2012, 2011, and 2010, respectively.
Reclassification
of Comparative Amounts
Certain
comparative amounts for prior years have been reclassified to
conform to current-year presentations. Such
reclassifications did not affect net income or retained
earnings.
Recent
Accounting Pronouncements
In
September 2011, the FASB issued ASU 2011-08, Intangibles
– Goodwill and Other Topics (Topic 350), Testing
Goodwill for Impairment . The objective of
this Update is to simplify how entities, both public and
nonpublic, test goodwill for impairment. The
amendments in the Update permit an entity to first assess
qualitative factors to determine whether it is more likely
than not that the fair value of a reporting unit is less than
its carrying amount as a basis for determining whether it is
necessary to perform the two-step goodwill impairment test
described in Topic 350. The more-likely-than-not
threshold is defined as having a likelihood of more than 50
percent. Under the amendments in this Update, an
entity is not required to calculate the fair value of a
reporting unit unless the entity determines that it is more
likely than not that its fair value is less than its carrying
amount. The amendments in this Update apply to all
entities, both public and nonpublic, that have goodwill
reported in their financial statements and are effective for
interim and annual goodwill impairment tests performed for
fiscal years beginning after December 15,
2011. Early adoption is permitted, including for
annual and interim goodwill impairment tests performed as of
a date before September 15, 2011, if an entity’s
financial statements for the most recent annual or interim
period have not yet been issued or, for nonpublic entities,
have not yet been made available for
issuance. This ASU did not have a significant
impact on the Company’s financial
statements.
In
December 2011, the FASB issued ASU 2011-11, Balance Sheet
(Topic 210): Disclosures about Offsetting Assets
and Liabilities . The amendments in this
Update affect all entities that have financial instruments
and derivative instruments that are either (1) offset in
accordance with either
Section 210-20-45 or
Section 815-10-45 or (2) subject to
an enforceable master netting arrangement or similar
agreement. The requirements amend the disclosure
requirements on offsetting in
Section 210-20-50. This
information will enable users of an entity's financial
statements to evaluate the effect or potential effect of
netting arrangements on an entity's financial position,
including the effect or potential effect of rights of setoff
associated with certain financial instruments and derivative
instruments in the scope of this Update. 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. This ASU is not expected to have a
significant impact on the Company’s financial
statements.
|
Note 4 - Loans And Related Allowance For Loan Losses (Detail) - Additional Information on Impaired Loans (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2012
|
Dec. 31, 2011
|
Dec. 31, 2010
|
|
Commercial and Industrial [Member]
|
|||
Total: | |||
Impaired loans, average recorded investment | $ 2,776 | $ 1,637 | $ 3,149 |
Impaired loans, interest income recognized | 348 | 58 | 13 |
Real Estate Construction [Member]
|
|||
Total: | |||
Impaired loans, average recorded investment | 2,798 | 4,521 | 618 |
Impaired loans, interest income recognized | 156 | 216 | 1 |
Residential Real Estate Mortgage [Member]
|
|||
Total: | |||
Impaired loans, average recorded investment | 4,263 | 3,188 | 594 |
Impaired loans, interest income recognized | 338 | 157 | |
Commercial Real Estate Mortgage [Member]
|
|||
Total: | |||
Impaired loans, average recorded investment | 4,717 | 5,083 | 3,320 |
Impaired loans, interest income recognized | 543 | 97 | 69 |
Consumer Installment [Member]
|
|||
Total: | |||
Impaired loans, average recorded investment | 27 | 24 | |
Impaired loans, interest income recognized | $ 3 | $ 2 |