x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Maryland
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52-1652138
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(State or other jurisdiction of
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(I.R.S. Employer
|
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incorporation or organization)
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Identification No.)
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3035 Leonardtown Road, Waldorf, Maryland
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20601
|
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(Address of principal executive offices)
|
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(Zip Code)
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Large accelerated filer o
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Accelerated filer £
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Non-accelerated filer o
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Smaller reporting company x
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Page
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||
Part I
|
|||
Item 1.
|
Business
|
1
|
|
Item 1A.
|
Risk Factors
|
25
|
|
Item 1B.
|
Unresolved Staff Comments
|
31
|
|
Item 2.
|
Properties
|
31
|
|
Item 3.
|
Legal Proceedings
|
31
|
|
Item 4.
|
[Removed and Reserved]
|
31
|
|
Part II
|
|||
Item 5.
|
Market for Registrant’s Common Equity, Related Stockholder Matters and
|
||
Issuer Purchases of Equity Securities
|
31
|
||
Item 6.
|
Selected Financial Data
|
32
|
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operation
|
33
|
|
Item 7A.
|
Quantitative and Qualitative Disclosures about Market Risk
|
33
|
|
Item 8.
|
Financial Statements and Supplementary Data
|
33
|
|
Item 9.
|
Changes In and Disagreements with Accountants on Accounting and Financial Disclosure
|
33
|
|
Item 9A
|
Controls and Procedures
|
33
|
|
Item 9B.
|
Other Information
|
33
|
|
Part III
|
|||
Item 10.
|
Directors, Executive Officers and Corporate Governance
|
34
|
|
Item 11.
|
Executive Compensation
|
34
|
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management
|
||
and Related Stockholder Matters
|
34
|
||
Item 13.
|
Certain Relationships and Related Transactions and Director Independence
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35
|
|
Item 14.
|
Principal Accountant Fees and Services
|
35
|
|
Part IV
|
|||
Item 15.
|
Exhibits and Financial Statement Schedules
|
35
|
At December 31, | ||||||||||||||||||||||||||||||||||||||||
2010
|
2009
|
2008
|
2007
|
2006
|
||||||||||||||||||||||||||||||||||||
Amount
|
%
|
Amount
|
%
|
Amount
|
%
|
Amount
|
%
|
Amount
|
%
|
|||||||||||||||||||||||||||||||
(Dollars in Thousands)
|
||||||||||||||||||||||||||||||||||||||||
Real Estate Loans
|
||||||||||||||||||||||||||||||||||||||||
Commercial
|
$ | 336,300 | 50.72 | % | $ | 292,988 | 46.88 | % | $ | 236,410 | 43.11 | % | $ | 190,484 | 41.55 | % | $ | 181,933 | 42.63 | % | ||||||||||||||||||||
Residential first mortgage
|
136,048 | 20.52 | % | 116,226 | 18.59 | % | 104,607 | 19.07 | % | 90,932 | 19.83 | % | 80,781 | 18.93 | % | |||||||||||||||||||||||||
Construction and land development
|
42,504 | 6.41 | % | 62,509 | 10.00 | % | 57,565 | 10.50 | % | 50,577 | 11.03 | % | 41,715 | 9.77 | % | |||||||||||||||||||||||||
Home equity and second mortgage
|
24,380 | 3.68 | % | 25,133 | 4.02 | % | 25,412 | 4.63 | % | 24,650 | 5.38 | % | 24,572 | 5.76 | % | |||||||||||||||||||||||||
Commercial loans
|
104,566 | 15.77 | % | 108,658 | 17.38 | % | 101,936 | 18.59 | % | 75,247 | 16.41 | % | 76,651 | 17.96 | % | |||||||||||||||||||||||||
Consumer loans
|
1,273 | 0.19 | % | 1,608 | 0.26 | % | 2,046 | 0.37 | % | 2,465 | 0.54 | % | 2,813 | 0.66 | % | |||||||||||||||||||||||||
Commercial equipment
|
17,984 | 2.71 | % | 17,917 | 2.87 | % | 20,458 | 3.73 | % | 24,113 | 5.26 | % | 18,288 | 4.29 | % | |||||||||||||||||||||||||
Total loans
|
663,055 | 100.00 | % | 625,039 | 100.00 | % | 548,434 | 100.00 | % | 458,468 | 100.00 | % | 426,754 | 100.00 | % | |||||||||||||||||||||||||
Less: Deferred loan fees
|
936 | 975 | 311 | 371 | 490 | |||||||||||||||||||||||||||||||||||
Loan loss reserve
|
7,669 | 7,471 | 5,146 | 4,482 | 3,784 | |||||||||||||||||||||||||||||||||||
Loans receivable, net
|
$ | 654,450 | $ | 616,593 | $ | 542,977 | $ | 453,614 | $ | 422,480 |
Due within one
|
Due after one year through
|
Due more than
|
||||||||||
year after
|
five years from
|
five years from
|
||||||||||
December 31, 2010
|
December 31, 2010
|
December 31, 2010
|
||||||||||
(Dollars in Thousands)
|
||||||||||||
Real Estate Loans
|
||||||||||||
Commercial
|
$ | 34,487 | $ | 54,695 | $ | 247,118 | ||||||
Residential first mortgage
|
30,537 | 59,380 | 46,132 | |||||||||
Construction and land development
|
42,317 | 187 | - | |||||||||
Home equity and second mortgage
|
5,423 | 13,081 | 5,876 | |||||||||
Commercial loans
|
104,566 | - | - | |||||||||
Consumer loans
|
777 | 442 | 54 | |||||||||
Commercial equipment
|
5,481 | 9,313 | 3,190 | |||||||||
Total loans
|
$ | 223,588 | $ | 137,098 | $ | 302,370 |
Floating or
|
||||||||||||
Fixed Rates
|
Adjustable Rates
|
Total
|
||||||||||
(Dollars in Thousands)
|
||||||||||||
Real Estate Loans
|
||||||||||||
Commercial
|
$ | 42,296 | $ | 259,517 | $ | 301,813 | ||||||
Residential first mortgage
|
94,816 | 10,696 | 105,512 | |||||||||
Construction and land development
|
- | 187 | 187 | |||||||||
Home equity and second mortgage
|
2,561 | 16,396 | 18,957 | |||||||||
Commercial loans
|
- | - | - | |||||||||
Consumer loans
|
496 | - | 496 | |||||||||
Commercial equipment
|
11,455 | 1,048 | 12,503 | |||||||||
$ | 151,624 | $ | 287,844 | $ | 439,468 |
At December 31,
|
||||||||||||||||||||
2010
|
2009
|
2008
|
2007
|
2006
|
||||||||||||||||
(Dollars in Thousands)
|
||||||||||||||||||||
Foreclosed real estate
|
$ | 10,469 | $ | 923 | $ | - | $ | - | $ | 461 | ||||||||||
Non-performing loans
|
||||||||||||||||||||
Non-accrual loans with impairment
|
$ | 4,506 | $ | 8,947 | $ | 1,743 | $ | - | $ | - | ||||||||||
Non-accrual loans with no impairment
|
8,715 | 10,340 | 3,193 | 414 | 1,046 | |||||||||||||||
TDRs not performing according to terms
|
297 | - | - | - | - | |||||||||||||||
Total non-performing loans
|
$ | 13,518 | $ | 19,287 | $ | 4,936 | $ | 414 | $ | 1,046 | ||||||||||
Total non-performing assets
|
$ | 23,987 | $ | 20,210 | $ | 4,936 | $ | 414 | $ | 1,507 | ||||||||||
Impaired loans
|
||||||||||||||||||||
Non-accrual loans with impairment
|
$ | 4,506 | $ | 8,947 | $ | 1,743 | $ | - | $ | - | ||||||||||
TDRs not performing according to terms
|
297 | - | - | - | ||||||||||||||||
TDRs performing according to terms
|
16,585 | 11,601 | - | 755 | - | |||||||||||||||
Total impaired loans
|
$ | 21,388 | $ | 20,548 | $ | 1,743 | $ | 755 | $ | - | ||||||||||
Non-performing loans to total loans
|
2.04 | % | 3.09 | % | 0.90 | % | 0.09 | % | 0.25 | % | ||||||||||
Allowance for loan losses to nonperforming loans
|
56.73 | % | 38.74 | % | 104.25 | % | 1082.61 | % | 361.76 | % | ||||||||||
Nonperforming assets to total assets
|
2.71 | % | 2.48 | % | 0.69 | % | 0.07 | % | 0.26 | % | ||||||||||
Nonperforming assets and TDRs to total assets
|
4.58 | % | 3.90 | % | 0.69 | % | 0.20 | % | 0.26 | % |
At December 31,
|
||||||||||||||||||||
2010
|
2009
|
2008
|
2007
|
2006
|
||||||||||||||||
(Dollars in Thousands)
|
||||||||||||||||||||
Loans accounted for on a nonaccrual basis:
|
||||||||||||||||||||
Real Estate Loans
|
||||||||||||||||||||
Commercial
|
$ | 8,243 | $ | 6,367 | $ | 1,208 | $ | - | $ | 390 | ||||||||||
Residential first mortgage
|
1,747 | 339 | - | 274 | 273 | |||||||||||||||
Construction and land development
|
984 | 9,504 | 1,840 | - | - | |||||||||||||||
Home equity and second mortgage
|
233 | - | - | - | - | |||||||||||||||
Commercial loans
|
2,262 | 2,192 | 903 | 60 | 303 | |||||||||||||||
Consumer loans
|
1 | 23 | 148 | 80 | 80 | |||||||||||||||
Commercial equipment
|
48 | 862 | 837 | - | - | |||||||||||||||
Total
|
$ | 13,518 | $ | 19,287 | $ | 4,936 | $ | 414 | $ | 1,046 |
At December 31,
|
||||||||||||||||||||
2010
|
2009
|
2008
|
2007
|
2006
|
||||||||||||||||
(Dollars in Thousands)
|
||||||||||||||||||||
Real Estate Loans
|
||||||||||||||||||||
Commercial
|
$ | 6,848 | $ | 6,706 | $ | - | $ | 755 | $ | - | ||||||||||
Residential first mortgage
|
929 | 394 | - | - | - | |||||||||||||||
Commercial loans
|
8,834 | 4,441 | - | - | - | |||||||||||||||
Commercial equipment
|
271 | 60 | - | - | - | |||||||||||||||
Total
|
$ | 16,882 | $ | 11,601 | $ | - | $ | 755 | $ | - |
At December 31,
|
||||||||||||||||||||
2010
|
2009
|
2008
|
2007
|
2006
|
||||||||||||||||
(Dollars in Thousands)
|
||||||||||||||||||||
Balance at beginning of period
|
$ | 7,471 | $ | 5,146 | $ | 4,482 | $ | 3,784 | $ | 3,383 | ||||||||||
Charge-offs:
|
||||||||||||||||||||
Real Estate Loans
|
||||||||||||||||||||
Commercial
|
526 | - | - | 29 | - | |||||||||||||||
Residential first mortgages
|
63 | - | - | - | - | |||||||||||||||
Construction and land development
|
2,249 | 187 | 287 | - | - | |||||||||||||||
Home equity and second mortgage
|
71 | 98 | - | - | - | |||||||||||||||
Commercial loans
|
569 | 608 | 202 | 73 | - | |||||||||||||||
Consumer loans
|
10 | 32 | 67 | 56 | 8 | |||||||||||||||
Commercial equipment
|
256 | 223 | 83 | - | - | |||||||||||||||
Total Charge-offs:
|
3,744 | 1,148 | 639 | 158 | 8 | |||||||||||||||
Recoveries:
|
||||||||||||||||||||
Construction and land development
|
1 | - | - | - | - | |||||||||||||||
Consumer loans
|
7 | - | 2 | 2 | 3 | |||||||||||||||
Total Recoveries
|
8 | - | 2 | 2 | 3 | |||||||||||||||
Net charge-offs
|
3,736 | 1,148 | 637 | 156 | 5 | |||||||||||||||
Provision for Possible Loan Losses
|
3,934 | 3,473 | 1,301 | 855 | 406 | |||||||||||||||
Balance at End of Period
|
$ | 7,669 | $ | 7,471 | $ | 5,146 | $ | 4,482 | $ | 3,784 | ||||||||||
Allowance for loan losses to total loans
|
1.16 | % | 1.20 | % | 0.94 | % | 0.98 | % | 0.89 | % | ||||||||||
Net charge-offs to average loans
|
0.61 | % | 0.20 | % | 0.13 | % | 0.04 | % | 0.00 | % |
At December 31,
|
||||||||||||||||||||||||||||||||||||||||
2010
|
2009
|
2008
|
2007
|
2006
|
||||||||||||||||||||||||||||||||||||
Percent of
|
Percent of
|
Percent of
|
Percent of
|
Percent of
|
||||||||||||||||||||||||||||||||||||
Loans in
|
Loans in
|
Loans in
|
Loans in
|
Loans in
|
||||||||||||||||||||||||||||||||||||
Each
|
Each
|
Each
|
Each
|
Each
|
||||||||||||||||||||||||||||||||||||
Category
|
Category
|
Category
|
Category
|
Cate gory
|
||||||||||||||||||||||||||||||||||||
to Total
|
to Total
|
to Total
|
to Total
|
to Total
|
||||||||||||||||||||||||||||||||||||
Amount
|
Loans
|
Amount
|
Loans
|
Amount
|
Loans
|
Amount
|
Loans
|
Amount
|
Loans
|
|||||||||||||||||||||||||||||||
(Dollars in Thousands)
|
||||||||||||||||||||||||||||||||||||||||
Real Estate Loans
|
||||||||||||||||||||||||||||||||||||||||
Commercial
|
$ | 3,314 | 50.72 | % | $ | 2,660 | 46.88 | % | $ | 2,009 | 43.11 | % | $ | 1,739 | 41.55 | % | $ | 1,479 | 42.63 | % | ||||||||||||||||||||
Residential first mortgage
|
204 | 20.52 | % | 128 | 18.59 | % | 105 | 19.07 | % | 266 | 19.83 | % | 97 | 18.93 | % | |||||||||||||||||||||||||
Construction and land development
|
1,267 | 6.41 | % | 1,696 | 10.00 | % | 1,295 | 10.50 | % | 1,125 | 11.03 | % | 662 | 9.77 | % | |||||||||||||||||||||||||
Home equity and second mortgage
|
98 | 3.68 | % | 131 | 4.02 | % | 102 | 4.63 | % | 98 | 5.38 | % | 104 | 5.76 | % | |||||||||||||||||||||||||
Commercial loans
|
2,551 | 15.77 | % | 2,110 | 17.38 | % | 1,248 | 18.59 | % | 930 | 16.41 | % | 1,135 | 17.96 | % | |||||||||||||||||||||||||
Consumer loans
|
32 | 0.19 | % | 64 | 0.26 | % | 43 | 0.37 | % | 96 | 0.54 | % | 126 | 0.66 | % | |||||||||||||||||||||||||
Commercial equipment
|
203 | 2.71 | % | 682 | 2.87 | % | 344 | 3.73 | % | 228 | 5.26 | % | 181 | 4.29 | % | |||||||||||||||||||||||||
Total allowance for loan losses
|
$ | 7,669 | 100.00 | % | $ | 7,471 | 100.00 | % | $ | 5,146 | 100.00 | % | $ | 4,482 | 100.00 | % | $ | 3,784 | 100.00 | % |
At December 31,
|
||||||||||||
(Dollars in Thousands)
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
Asset-backed securities:
|
||||||||||||
Freddie Mac and Fannie Mae
|
$ | 144,861 | $ | 121,510 | $ | 93,049 | ||||||
Other
|
12,463 | 19,006 | 25,150 | |||||||||
Total asset-backed securities
|
157,324 | 140,516 | 118,199 | |||||||||
Corporate equity securities
|
37 | 39 | 157 | |||||||||
Bond mutual funds
|
3,820 | 3,654 | 3,560 | |||||||||
Treasury bills
|
753 | - | 1,000 | |||||||||
Other Investments
|
- | 5 | 17 | |||||||||
Total investment securities
|
161,934 | 144,214 | 122,933 | |||||||||
FHLB and Federal Reserve Bank stock
|
6,316 | 6,936 | 6,453 | |||||||||
Total investment securities and FHLB and Federal Reserve Bank stock
|
$ | 168,250 | $ | 151,150 | $ | 129,386 |
After One
|
After Five
|
|||||||||||||||||||||||||||||||
One Year or Less
|
Through Five Years
|
Through Ten Years
|
After Ten Years
|
|||||||||||||||||||||||||||||
Amortized
|
Average
|
Amortized
|
Average
|
Amortized
|
Average
|
Amortized
|
Average
|
|||||||||||||||||||||||||
Cost
|
Yield
|
Cost
|
Yield
|
Cost
|
Yield
|
Cost
|
Yield
|
|||||||||||||||||||||||||
(Dollars in Thousands)
|
||||||||||||||||||||||||||||||||
AFS Investment securities:
|
||||||||||||||||||||||||||||||||
Corporate equity securities
|
$ | 37 | 0.00 | % | $ | - | 0.00 | % | $ | - | 0.00 | % | $ | - | 0.00 | % | ||||||||||||||||
Asset-backed securities
|
11,468 | 2.14 | % | 12,904 | 2.41 | % | 4,327 | 2.41 | % | 1,629 | 2.17 | % | ||||||||||||||||||||
Mutual funds
|
3,697 | 3.41 | % | - | 0.00 | % | - | 0.00 | % | - | 0.00 | % | ||||||||||||||||||||
Total AFS investment securities
|
$ | 15,202 | 2.44 | % | $ | 12,904 | 2.41 | % | $ | 4,327 | 2.41 | % | $ | 1,629 | 2.17 | % | ||||||||||||||||
HTM Investment securities:
|
||||||||||||||||||||||||||||||||
Asset-backed securities
|
$ | 36,223 | 2.66 | % | $ | 61,310 | 2.75 | % | $ | 21,990 | 2.63 | % | $ | 6,712 | 2.29 | % | ||||||||||||||||
Treasury bills
|
753 | 0.36 | % | - | 0.00 | % | - | 0.00 | % | - | 0.00 | % | ||||||||||||||||||||
Other investments
|
- | 0.00 | % | - | 0.00 | % | - | 0.00 | % | - | 0.00 | % | ||||||||||||||||||||
Total HTM investment securities
|
$ | 36,976 | 2.61 | % | $ | 61,310 | 2.75 | % | $ | 21,990 | 2.63 | % | $ | 6,712 | 2.29 | % |
For the Year Ended December 31,
|
||||||||||||||||||||||||
(Dollars in Thousands)
|
||||||||||||||||||||||||
2010
|
2009
|
2008
|
||||||||||||||||||||||
Average
|
Average
|
Average
|
Average
|
Average
|
Average
|
|||||||||||||||||||
Balance
|
Rate
|
Balance
|
Rate
|
Balance
|
Rate
|
|||||||||||||||||||
Savings
|
$ | 30,355 | 0.41 | % | $ | 28,486 | 0.16 | % | $ | 26,434 | 0.59 | % | ||||||||||||
Interest-bearing demand and money market accounts
|
161,494 | 0.94 | % | 142,513 | 1.02 | % | 132,522 | 1.75 | % | |||||||||||||||
Certificates of deposit
|
421,525 | 2.21 | % | 355,489 | 3.02 | % | 268,363 | 3.93 | % | |||||||||||||||
Total interest-bearing deposits
|
613,374 | 526,488 | 427,320 | |||||||||||||||||||||
Noninterest-bearing demand deposits
|
65,041 | 53,584 | 42,955 | |||||||||||||||||||||
$ | 678,415 | 1.61 | % | $ | 580,072 | 2.11 | % | $ | 470,275 | 2.77 | % |
$100K or More
|
$250K or More
|
|||||||
Certificates
|
Certificates
|
|||||||
Maturity Period
|
of Deposit
|
of Deposit
|
||||||
(In Thousands)
|
||||||||
Three months or less
|
$ | 59,417 | $ | 19,965 | ||||
Three through six months
|
38,090 | 13,668 | ||||||
Six through twelve months
|
48,442 | 10,931 | ||||||
Over twelve months
|
86,586 | 40,209 | ||||||
Total
|
$ | 232,535 | $ | 84,773 |
At or for the Year Ended December 31,
|
||||||||||||
(Dollars in Thousands)
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
Long-term debt
|
||||||||||||
Long-term debt outstanding at end of period
|
$ | 70,624 | $ | 75,670 | $ | 104,963 | ||||||
Weighted average rate on outstanding long-term debt at end of period
|
3.24 | % | 3.26 | % | 3.81 | % | ||||||
Maximum outstanding long-term debt of any month end
|
70,666 | 100,692 | 104,998 | |||||||||
Average outstanding long-term debt, during period
|
70,823 | 94,745 | 102,112 | |||||||||
Approximate average rate paid on long-term debt during period
|
3.22 | % | 3.70 | % | 4.09 | % | ||||||
Short-term borrowings
|
||||||||||||
Short-term borrowings outstanding at end of period at end of period
|
$ | 816 | $ | 13,081 | $ | 1,522 | ||||||
Weighted average rate on short-term borrowings at end of period
|
0.00 | % | 0.34 | % | 1.83 | % | ||||||
Maximum outstanding short-term borrowings at any month end during period
|
$ | 11,322 | $ | 13,081 | $ | 20,943 | ||||||
Average outstanding short-term borrowings
|
2,973 | 1,421 | 4,355 | |||||||||
Approximate average rate paid on short-term borrowings
|
1.41 | % | 2.06 | % | 3.59 | % |
|
Ø
|
actual or anticipated fluctuations in our operating results;
|
|
Ø
|
changes in interest rates;
|
|
Ø
|
changes in the legal or regulatory environment in which we operate;
|
|
Ø
|
press releases, announcements or publicity relating to us or our competitors or relating to trends in our industry;
|
|
Ø
|
changes in expectations as to our future financial performance, including financial estimates or recommendations by securities analysts and investors;
|
|
Ø
|
future sales of our common stock;
|
|
Ø
|
changes in economic conditions in our marketplace, general conditions in the U.S. economy, financial markets or the banking industry; and
|
|
Ø
|
other developments affecting our competitors or us.
|
(a)
|
(b)
|
( c )
|
(d)
|
|||||||||||||
Total Number of
|
Maximum Number
|
|||||||||||||||
Total
|
Shares Purchased
|
of Shares that May
|
||||||||||||||
Number of
|
Average
|
as Part of Publicly
|
Yet Be Purchased
|
|||||||||||||
Shares
|
Price Paid
|
Announced Plans
|
Under the Plans or
|
|||||||||||||
Purchased
|
per Share
|
or Programs
|
Programs
|
|||||||||||||
October 1 to October 31
|
- | $ | - | - | 140,146 | |||||||||||
November 1 to November 30
|
- | - | - | 140,146 | ||||||||||||
December 1 to December 31
|
1,500 | 16.00 | 1,500 | 138,646 | ||||||||||||
1,500 | $ | 16.00 | 1,500 | 138,646 |
|
(a)
|
Disclosure Controls and Procedures
|
|
(b)
|
Internal Controls Over Financial Reporting
|
|
Management’s annual report on internal control over financial reporting is incorporated herein by reference to the Company’s audited Consolidated Financial Statements in this Annual Report on Form 10-K.
|
|
(c)
|
Changes to Internal Control Over Financial Reporting
|
(a)
|
(b)
|
(c )
|
||||||||||
Plan Category
|
Number of securities to
be issued upon exercise
of outstanding options,
warrants, and rights
|
Weighted average
exercise price of
outstanding options,
warrants, and rights
|
Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
securities reflected in
column (a)
|
|||||||||
Equity plans approved by security holders
|
253,224 | $ | 17.26 | 120,315 | ||||||||
Equity compensation plans not approved by security holders (1)
|
46,013 | $ | 14.64 | - | ||||||||
Total
|
299,237 | $ | 16.86 | 120,315 |
(1)
|
Consists of the Company’s 1995 Stock Option Plan for Non-Employee Directors, which expired in 2005 and which provided grants of non-incentive stock options to directors who are not employees of the Company or its subsidiaries. Options were granted at an exercise price equal to their fair market value at the date of grant and had a term of ten years. Options are generally exercisable while an optionee serves as a director or within one year thereafter.
|
Report of Independent Registered Public Accounting Firm
|
|
Consolidated Balance Sheets as of December 31, 2010 and 2009
|
|
Consolidated Statements of Income for the Years Ended December 31, 2010 and 2009
|
|
Consolidated Statements of Changes in Stockholders’ Equity for the Years Ended December 31, 2010 and 2009
|
|
Consolidated Statements of Cash Flows for the Years Ended December 31, 2010 and 2009
|
|
Notes to Consolidated Financial Statements
|
|
Exhibit
No
|
Description
|
Incorporated by Reference to
|
||
3.1
|
Articles of Incorporation of Tri-County Financial Corporation
|
Form S-4 (Registration No. 333-31287).
|
||
3.2
|
Amended and Restated Bylaws of Tri-County Financial Corporation
|
Form 8-K as filed on August 27, 2010
|
||
4.1
|
Articles Supplementary establishing Fixed Rate Cumulative Perpetual Preferred Stock, Series A, of Tri-County Financial Corporation
|
Form 8-K as filed on December 22, 2008
|
||
4.2
|
Form of stock certificate for Fixed Rate Cumulative Perpetual Preferred Stock, Series
|
Form 8-K as filed on December 22, 2008
|
||
4.3
|
Articles Supplementary establishing Fixed Rate Cumulative Perpetual Preferred Stock, Series B, of Tri-County Financial Corporation
|
Form 8-K as filed on December 22, 2008
|
||
4.4
|
Form of stock certificate for Fixed Rate Cumulative Perpetual Preferred Stock, Series B
|
Form 8-K as filed on December 22, 2008
|
||
10.1*
|
Tri-County Financial Corporation 1995 Stock Option and Incentive Plan, as amended
|
Form 10-K for the year ended December 31, 2000 as filed on March 30, 2001.
|
||
10.2*
|
Tri-County Financial Corporation 1995 Stock Option Plan for Non-Employee Directors, as amended
|
Form 10-K for the year ended December 31, 2000 as filed on March 30, 2001.
|
||
10.3*
|
Employment Agreement with Michael L. Middleton
|
Form 10-Q for the quarter ended September 30, 2006 as filed on November 14, 2006.
|
||
10.4*
|
Amended and Restated Executive Incentive Compensation Plan
|
Form 10-K/A for the year ended December 31, 2008 as filed on April 20, 2009.
|
||
10.5*
|
Retirement Plan for Directors
|
Form 10-K for the year ended December 31, 2006 as filed on March 27, 2007.
|
||
10.6*
|
Split Dollar Agreements with Michael L. Middleton
|
Form 10-K for the year ended December 31, 2000 as filed on March 30, 2001.
|
||
10.7*
|
Split Dollar Agreement with William J. Pasenelli
|
Form 10-K for the year ended December 31, 2001 as filed on April 1, 2002.
|
||
10.8*
|
Salary Continuation Agreement with Michael L. Middleton, dated September 6, 2003
|
Form 10-K for the year ended December 31, 2003 as filed on March 26, 2004.
|
||
10.9*
|
First Amendment to the Salary Continuation Agreement, dated September 6, 2003, with Michael L. Middleton
|
Form 10-K for the year ended December 31, 2008 as filed on March 9, 2009.
|
10.10*
|
Tri-County Financial Corporation 2005 Equity Compensation Plan
|
Definitive Proxy Statement as filed on April 11, 2005
|
||
10.11*
|
Amendment No. 1 to the Tri-County Financial Corporation 2005 Equity Compensation Plan
|
Form 10-Q for the quarter ended September 30, 2007 as filed on November 13, 2007.
|
||
10.12*
|
Community Bank of Tri-County Executive Deferred Compensation Plan
|
Form 10-K for the year ended December 31, 2006 as filed on March 27, 2007.
|
||
10.13*
|
Amended and Restated Employment Agreement by and among Community Bank of Tri-County, William J. Pasenelli and Tri-County Financial Corporation, as guarantor
|
Form 10-Q for the quarter ended March 31, 2007 as filed on May 11, 2007.
|
||
10.14*
|
Amended and Restated Employment Agreement by and among Community Bank of Tri-County, Gregory C. Cockerham and Tri-County Financial Corporation, as guarantor
|
Form 10-Q for the quarter ended March 31, 2007 as filed on May 11, 2007.
|
||
10.15*
|
Salary Continuation Agreement with Gregory C. Cockerham, dated August 21, 2006
|
Form 10-Q for the quarter ended September 30, 2006 as filed on November 14, 2006.
|
||
10.16*
|
First Amendment to the Salary Continuation Agreement, dated August 21, 2006, with Gregory C. Cockerham
|
Form 10-K/A for the year ended December 31, 2008 as filed on April 20, 2009.
|
||
10.17*
|
Second Amendment to the Salary Continuation Agreement, dated August 21, 2006, with Gregory C. Cockerham
|
Form 10-K/A for the year ended December 31, 2008 as filed on April 20, 2009.
|
||
10.18*
|
Salary Continuation Agreement with William J. Pasenelli, dated August 21, 2006
|
Form 10-Q for the quarter ended September 30, 2006 as filed on November 14, 2006.
|
||
10.19*
|
First Amendment to the Salary Continuation Agreement, dated August 21, 2006, with William J. Pasenelli
|
Form 10-K/A for the year ended December 31, 2008 as filed on April 20, 2009.
|
||
10.20*
|
Second Amendment to the Salary Continuation Agreement, dated August 21, 2006, with William J. Pasenelli
|
Form 10-K/A for the year ended December 31, 2008 as filed on April 20, 2009.
|
||
10.21*
|
Letter Agreement and related Securities Purchase Agreement – Standard Terms, dated December 19, 2008, between Tri-County Financial Corporation and United States Department of the Treasury
|
Form 8-K as filed on December 22, 2008.
|
||
10.22*
|
Form of Waiver executed by each of Michael L. Middleton, Gregory C. Cockerham and William J. Pasenelli
|
Form 8-K as filed on December 22, 2008
|
10.23*
|
Form of Letter Agreement between Tri-County Financial Corporation and each of Michael L. Middleton, Gregory C. Cockerham and William J. Pasenelli
|
Form 8-K as filed on December 22, 2008
|
||
10.24*
|
Salary Continuation Agreement between Gregory C. Cockerham and Community Bank of Tri-County, dated September 6, 2003, as amended on December 22, 2008
|
Form 10-K/A for the year ended December 31, 2008 as filed on April 20, 2009.
|
||
10.25*
|
Salary Continuation Agreement between William J. Pasenelli and Community Bank of Tri-County, dated September 6, 2003, as amended on June 11, 2004 and December 22, 2008
|
Form 10-K/A for the year ended December 31, 2008 as filed on April 20, 2009.
|
||
13.0
|
Annual Report to Stockholders for the year ended December 31, 2010
|
|||
14.0
|
Code of Ethics
|
Form 10-K for the year ended December 31, 2005 as filed on March 30, 2006.
|
||
21.0
|
List of Subsidiaries
|
|||
23.1
|
Consent of Stegman & Company
|
|||
31.1
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
|
|||
31.2
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer
|
|||
32.0
|
Section 1350 Certification of Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer
|
|||
99.1
|
Principal Executive Officer Certification regarding TARP
|
|||
99.2
|
Principal Executive Officer Certification regarding TARP
|
(*)
|
Management contract or compensating arrangement.
|
|
(b)
|
Exhibits. The exhibits required by Item 601 of Regulation S-K are either filed as part of this Annual Report on Form 10-K or incorporated by reference herein.
|
|
(c)
|
Financial Statements and Schedules Excluded From Annual Report. There are no other financial statements and financial statement schedules which were excluded from this Annual Report pursuant to Rule 14a-3(b)(1) which are required to be included herein.
|
TRI-COUNTY FINANCIAL CORPORATION
|
||
Date: March 4, 2011
|
By:
|
/s/ Michael L. Middleton
|
Michael L. Middleton
|
||
President and Chief Executive Officer
|
||
(Duly Authorized Representative)
|
By:
|
/s/ Michael L. Middleton
|
By:
|
/s/ William J. Pasenelli | |
Michael L. Middleton
|
William J. Pasenelli
|
|||
Director, President and Chief Executive Officer
|
Director, Executive Vice President and Chief
|
|||
(Principal Executive Officer)
|
Financial Officer
|
|||
(Principal Financial and Accounting Officer)
|
||||
Date: March 4, 2011
|
Date: March 4, 2011
|
|||
By:
|
/s/ H. Beaman Smith
|
By:
|
/s/ Austin J. Slater, Jr.
|
|
H. Beaman Smith
|
Austin J. Slater, Jr.
|
|||
Director
|
Director
|
|||
Date: March 4, 2011
|
Date: March 4, 2011
|
|||
By:
|
/s/ Louis P. Jenkins, Jr.
|
By:
|
/s/ James R. Shepherd
|
|
Louis P. Jenkins, Jr.
|
James R. Shepherd
|
|||
Director
|
Director
|
|||
Date: March 4, 2011
|
Date: March 4, 2011
|
|||
By:
|
/s/ Philip T. Goldstein |
By:
|
/s/ Joseph V. Stone, Jr.
|
|
Philip T. Goldstein
|
Joseph V. Stone, Jr.
|
|||
Director
|
Director
|
|||
Date: March 4, 2011
|
Date: March 4, 2011
|
|||
By:
|
/s/ Mary Todd Peterson
|
|||
Mary Todd Peterson
|
||||
Director
|
||||
Date: March 4, 2011
|
2010
|
2009
|
|||||||||||||||||||||||
Average
|
Average
|
|||||||||||||||||||||||
Average
|
Yield/
|
Average
|
Yield/
|
|||||||||||||||||||||
dollars in thousands
|
Balance
|
Interest
|
Cost
|
Balance
|
Interest
|
Cost
|
||||||||||||||||||
Assets
|
||||||||||||||||||||||||
Interest-earning assets:
|
||||||||||||||||||||||||
Loan portfolio (1)
|
$ | 615,887 | $ | 34,995 | 5.68 | % | $ | 574,966 | $ | 32,685 | 5.68 | % | ||||||||||||
Investment securities, federal funds sold and interest-bearing deposits
|
165,753 | 4,542 | 2.74 | % | 143,966 | 5,202 | 3.61 | % | ||||||||||||||||
Total interest-earning assets
|
781,640 | 39,537 | 5.06 | % | 718,932 | 37,887 | 5.27 | % | ||||||||||||||||
Cash and cash equivalents
|
13,709 | 13,533 | ||||||||||||||||||||||
Other assets
|
45,107 | 30,138 | ||||||||||||||||||||||
Total Assets
|
$ | 840,456 | $ | 762,603 | ||||||||||||||||||||
Liabilities and Stockholders' Equity
|
||||||||||||||||||||||||
Interest-bearing liabilities:
|
||||||||||||||||||||||||
Savings
|
$ | 30,355 | $ | 123 | 0.41 | % | $ | 28,486 | $ | 46 | 0.16 | % | ||||||||||||
Interest-bearing demand and money market accounts
|
161,494 | 1,510 | 0.94 | % | 142,513 | 1,458 | 1.02 | % | ||||||||||||||||
Certificates of deposit
|
421,525 | 9,305 | 2.21 | % | 355,489 | 10,727 | 3.02 | % | ||||||||||||||||
Long-term debt
|
70,823 | 2,278 | 3.22 | % | 94,745 | 3,502 | 3.70 | % | ||||||||||||||||
Short-term borrowings
|
2,973 | 42 | 1.41 | % | 1,421 | 29 | 2.04 | % | ||||||||||||||||
Guaranteed preferrred beneficial interest in junior subordinated debentures
|
12,000 | 322 | 2.68 | % | 12,000 | 404 | 3.37 | % | ||||||||||||||||
Total interest-bearing liabilities
|
699,170 | 13,580 | 1.94 | % | 634,654 | 16,166 | 2.55 | % | ||||||||||||||||
Noninterest-bearing demand deposits
|
65,041 | 53,584 | ||||||||||||||||||||||
Other liabilities
|
5,772 | 6,000 | ||||||||||||||||||||||
Stockholders' equity
|
70,473 | 68,365 | ||||||||||||||||||||||
Total Liabilities and Stockholders' Equity
|
$ | 840,456 | $ | 762,603 | ||||||||||||||||||||
Net interest income
|
$ | 25,957 | $ | 21,721 | ||||||||||||||||||||
Interest rate spread
|
3.12 | % | 2.72 | % | ||||||||||||||||||||
Net yield on interest-earning assets
|
3.32 | % | 3.02 | % | ||||||||||||||||||||
Ratio of average interest-earning assets to average interest-bearing liabilities
|
111.80 | % | 113.28 | % |
Year ended December 31, 2010
|
||||||||||||
compared to year ended
|
||||||||||||
December 31, 2009
|
||||||||||||
Due to
|
||||||||||||
thousands
|
Volume
|
Rate
|
Total
|
|||||||||
Interest-Earning Assets
|
||||||||||||
Loan portfolio (1)
|
$ | 2,325 | $ | (15 | ) | $ | 2,310 | |||||
Investment securities, federal funds sold and interest bearing deposits
|
597 | (1,257 | ) | (660 | ) | |||||||
Total Interest-Earning Assets
|
$ | 2,922 | $ | (1,272 | ) | $ | 1,650 | |||||
Interest-Bearing Liabilities
|
||||||||||||
Savings
|
8 | 69 | 77 | |||||||||
Interest-bearing demand and money market accounts
|
177 | (125 | ) | 52 | ||||||||
Certificates of deposit
|
1,458 | (2,880 | ) | (1,422 | ) | |||||||
Long-term debt
|
(769 | ) | (455 | ) | (1,224 | ) | ||||||
Short-term debt
|
22 | (9 | ) | 13 | ||||||||
Guaranteed preferrred beneficial interest in junior subordinated debentures
|
- | (82 | ) | (82 | ) | |||||||
Total Interest-Bearing Liabilities
|
$ | 895 | $ | (3,481 | ) | $ | (2,586 | ) | ||||
Net Change in Net Interest Income
|
$ | 2,027 | $ | 2,209 | $ | 4,236 | ||||||
(1) Average balance includes non-accrual loans
|
Years Ended December 31,
|
% change
|
|||||||||||
2010
|
2009
|
2010 vs. 2009
|
||||||||||
Recognition of other than temporary decline in value of investment securities
|
$ | - | $ | (538,614 | ) | (100.00 | )% | |||||
Less: portion recorded as comprehensive income
|
- | 271,870 | (100.00 | )% | ||||||||
Impairment loss on investment securities, net
|
- | (266,744 | ) | (100.00 | )% | |||||||
Loan appraisal, credit, and miscellaneous charges
|
676,805 | 688,101 | (1.64 | )% | ||||||||
Income from bank owned life insurance
|
504,296 | 417,110 | 20.90 | % | ||||||||
Service charges
|
1,905,949 | 1,658,544 | 14.92 | % | ||||||||
Gain on sale of asset
|
22,500 | - | n/a | |||||||||
Gain on sale of loans held for sale
|
470,626 | 325,671 | 44.51 | % | ||||||||
Loss on the sale of investment securities
|
- | (12,863 | ) | (100.00 | )% | |||||||
Total Noninterest Income
|
$ | 3,580,176 | $ | 2,809,819 | 27.42 | % |
Years Ended December 31,
|
% change
|
|||||||||||
2010
|
2009
|
2010 vs. 2009
|
||||||||||
Salary and employee benefits
|
$ | 9,769,401 | $ | 8,607,141 | 13.50 | % | ||||||
Occupancy expense
|
1,772,394 | 1,779,497 | (0.40 | )% | ||||||||
Advertising
|
399,802 | 449,155 | (10.99 | )% | ||||||||
Data processing expense
|
1,044,972 | 914,250 | 14.30 | % | ||||||||
Depreciation of furniture, fixtures, and equipment
|
541,642 | 613,205 | (11.67 | )% | ||||||||
Telephone communications
|
170,566 | 152,649 | 11.74 | % | ||||||||
Office supplies
|
170,447 | 164,154 | 3.83 | % | ||||||||
Professional fees
|
799,377 | 749,467 | 6.66 | % | ||||||||
FDIC insurance
|
1,338,305 | 1,134,926 | 17.92 | % | ||||||||
Valuation allowance on foreclosed real estate
|
287,934 | - | n/a | |||||||||
Other
|
1,900,343 | 2,015,234 | (5.70 | )% | ||||||||
Total Noninterest Expenses
|
$ | 18,195,183 | $ | 16,579,678 | 9.74 | % |
December 31,
|
% change
|
|||||||||||
2010
|
2009
|
2010 vs. 2009
|
||||||||||
Cash and due from banks
|
$ | 8,695,590 | $ | 9,960,787 | (12.70 | )% | ||||||
Federal funds sold
|
615,000 | 695,000 | (11.51 | )% | ||||||||
Interest-bearing deposits with banks
|
512,846 | 592,180 | (13.40 | )% | ||||||||
Securities available for sale (AFS), at fair value
|
34,946,225 | 53,926,109 | (35.20 | )% | ||||||||
Securities held to maturity (HTM), at amortized cost
|
126,988,316 | 90,287,803 | 40.65 | % | ||||||||
Federal Home Loan Bank and Federal Reserve Bank stock- at cost
|
6,315,600 | 6,935,500 | (8.94 | )% | ||||||||
Loans receivable - net of allowance for loan losses of $7,669,147 and $7,471,314
|
654,449,936 | 616,592,976 | 6.14 | % | ||||||||
Premises and equipment, net
|
12,132,141 | 11,987,690 | 1.20 | % | ||||||||
Foreclosed real estate
|
10,469,302 | 922,934 | 1034.35 | % | ||||||||
Accrued interest receivable
|
2,784,396 | 2,925,271 | (4.82 | )% | ||||||||
Investment in bank owned life insurance
|
17,447,692 | 10,943,396 | 59.44 | % | ||||||||
Other assets
|
10,579,058 | 9,272,888 | 14.09 | % | ||||||||
Total Assets
|
$ | 885,936,102 | $ | 815,042,534 | 8.70 | % |
December 31,
|
% change
|
|||||||||||
2010
|
2009
|
2010 vs. 2009
|
||||||||||
Deposits
|
||||||||||||
Noninterest-bearing
|
$ | 75,642,197 | $ | 70,001,444 | 8.06 | % | ||||||
Interest-bearing
|
648,940,129 | 570,417,345 | 13.77 | % | ||||||||
Total deposits
|
724,582,326 | 640,418,789 | 13.14 | % | ||||||||
Short-term borrowings
|
816,422 | 13,080,530 | (93.76 | )% | ||||||||
Long-term debt
|
70,624,044 | 75,669,630 | (6.67 | )% | ||||||||
Guaranteed preferred beneficial interest in junior subordinated debentures
|
12,000,000 | 12,000,000 | 0.00 | % | ||||||||
Accrued expenses and other liabilities
|
6,808,383 | 5,683,736 | 19.79 | % | ||||||||
Total Liabilities
|
$ | 814,831,175 | $ | 746,852,685 | 9.10 | % |
December 31,
|
% change
|
|||||||||||
2010
|
2009
|
2010 vs. 2009
|
||||||||||
Fixed Rate Cumulative Perpetual Preferred Stock, Series A - par value $1,000; authorized 15,540; issued 15,540
|
$ | 15,540,000 | $ | 15,540,000 | 0.00 | % | ||||||
Fixed Rate Cumulative Perpetual Preferred Stock, Series B - par value $1,000; authorized 777; issued 777
|
777,000 | 777,000 | 0.00 | % | ||||||||
Common stock - par value $.01; authorized - 15,000,000 shares; issued 3,002,616 and 2,976,046 shares, respectively
|
30,026 | 29,760 | 0.89 | % | ||||||||
Additional paid in capital
|
16,962,460 | 16,754,627 | 1.24 | % | ||||||||
Retained earnings
|
37,892,557 | 35,193,958 | 7.67 | % | ||||||||
Accumulated other comprehensive gain
|
411,188 | 284,474 | 44.54 | % | ||||||||
Unearned ESOP shares
|
(508,304 | ) | (389,970 | ) | 30.34 | % | ||||||
Total Stockholders' Equity
|
$ | 71,104,927 | $ | 68,189,849 | 4.27 | % |
Dollars in thousands except share data
|
Year Ended December 31,
|
|||||||||||||||||||
2010
|
2009
|
2008
|
2007
|
2006
|
||||||||||||||||
Operations Data
|
||||||||||||||||||||
Net interest income
|
$ | 25,957 | $ | 21,721 | $ | 19,223 | $ | 18,992 | $ | 17,327 | ||||||||||
Provision for loan losses
|
3,933 | 3,473 | 1,301 | 855 | 406 | |||||||||||||||
Noninterest income
|
3,580 | 2,810 | 2,519 | 3,402 | 2,247 | |||||||||||||||
Noninterest expense
|
18,195 | 16,580 | 14,582 | 13,459 | 12,562 | |||||||||||||||
Net income
|
4,766 | 2,867 | 3,815 | 5,106 | 4,441 | |||||||||||||||
Net income available to common shareholders
|
$ | 3,919 | $ | 2,020 | $ | 3,789 | $ | 5,106 | $ | 4,441 | ||||||||||
Share Data
|
||||||||||||||||||||
Basic net income per common share
|
$ | 1.31 | $ | 0.68 | $ | 1.29 | $ | 1.92 | $ | 1.68 | ||||||||||
Diluted net income per common share
|
$ | 1.30 | $ | 0.68 | $ | 1.24 | $ | 1.79 | $ | 1.58 | ||||||||||
Cash dividends paid per common share
|
$ | 0.40 | $ | 0.40 | $ | 0.40 | $ | 0.40 | $ | 0.37 | ||||||||||
Book value per common share
|
$ | 18.25 | $ | 17.43 | $ | 17.23 | $ | 16.79 | $ | 14.28 | ||||||||||
Common shares outstanding
|
3,002,616 | 2,976,046 | 2,947,759 | 2,909,974 | 2,642,288 | |||||||||||||||
Weighted average common shares outstanding:
|
||||||||||||||||||||
Basic
|
2,985,080 | 2,961,293 | 2,943,002 | 2,664,036 | 2,637,531 | |||||||||||||||
Diluted
|
3,008,279 | 2,987,901 | 3,053,690 | 2,852,494 | 2,815,985 | |||||||||||||||
Financial Condition Data
|
||||||||||||||||||||
Total assets
|
$ | 885,936 | $ | 815,043 | $ | 716,685 | $ | 598,406 | $ | 575,496 | ||||||||||
Loans receivable, net
|
654,450 | 616,593 | 542,977 | 453,614 | 422,480 | |||||||||||||||
Foreclosed real estate (OREO)
|
10,469 | 923 | - | - | 461 | |||||||||||||||
Total deposits
|
724,582 | 640,419 | 525,168 | 444,994 | 418,013 | |||||||||||||||
Long and short term debt
|
71,440 | 88,750 | 106,486 | 87,561 | 102,614 | |||||||||||||||
TARP preferred stock
|
16,317 | 16,317 | 16,317 | - | - | |||||||||||||||
Total stockholders’ equity
|
$ | 71,105 | $ | 68,190 | $ | 67,114 | $ | 48,847 | $ | 37,729 | ||||||||||
Other Financial Information
|
||||||||||||||||||||
Nonperforming loans (NPLs)
|
$ | 13,518 | $ | 19,287 | $ | 4,936 | $ | 414 | $ | 1,046 | ||||||||||
Troubled debt restructures (TDRs)
|
16,882 | 11,601 | - | 755 | - | |||||||||||||||
Performance Ratios
|
||||||||||||||||||||
Return on average assets
|
0.57 | % | 0.38 | % | 0.59 | % | 0.87 | % | 0.80 | % | ||||||||||
Return on average equity
|
6.76 | % | 4.19 | % | 7.57 | % | 12.62 | % | 12.13 | % | ||||||||||
Net interest margin
|
3.32 | % | 3.02 | % | 3.13 | % | 3.41 | % | 3.24 | % | ||||||||||
Efficiency ratio
|
61.60 | % | 67.59 | % | 67.07 | % | 60.10 | % | 64.18 | % | ||||||||||
Dividend payout ratio
|
30.77 | % | 58.82 | % | 31.04 | % | 20.80 | % | 21.91 | % | ||||||||||
Capital Ratios:
|
||||||||||||||||||||
Average equity to average assets
|
9.44 | % | 10.03 | % | 11.54 | % | 10.41 | % | 8.74 | % | ||||||||||
Leverage ratio
|
9.44 | % | 10.03 | % | 11.54 | % | 10.41 | % | 8.74 | % | ||||||||||
Total risk-based capital ratio
|
12.94 | % | 13.46 | % | 14.73 | % | 13.80 | % | 11.98 | % | ||||||||||
Asset Quality Ratios
|
||||||||||||||||||||
Allowance for loan losses to total loans
|
1.16 | % | 1.20 | % | 0.94 | % | 0.98 | % | 0.89 | % | ||||||||||
Nonperforming loans to total loans
|
2.04 | % | 3.09 | % | 0.90 | % | 0.25 | % | 0.25 | % | ||||||||||
Allowance for loan losses to Nonperforming loans
|
56.73 | % | 38.74 | % | 104.25 | % | 383.40 | % | 361.59 | % | ||||||||||
Net charge-offs to average loans
|
0.61 | % | 0.20 | % | 0.13 | % | 0.04 | % | 0.00 | % | ||||||||||
Nonperforming assets to total assets (NPLs + OREO)
|
2.71 | % | 2.48 | % | 0.69 | % | 0.07 | % | 0.26 | % | ||||||||||
Nonperforming assets and TDRs to total assets
|
4.58 | % | 3.90 | % | 0.69 | % | 0.20 | % | 0.26 | % |
High
|
Low
|
|||||||
2009
|
||||||||
Fourth Quarter
|
$ | 15.00 | $ | 10.50 | ||||
Third Quarter
|
$ | 13.99 | $ | 11.30 | ||||
Second Quarter
|
$ | 13.85 | $ | 11.50 | ||||
First Quarter
|
$ | 20.00 | $ | 10.50 | ||||
High
|
Low
|
|||||||
2010
|
||||||||
Fourth Quarter
|
$ | 18.00 | $ | 13.25 | ||||
Third Quarter
|
$ | 15.00 | $ | 11.20 | ||||
Second Quarter
|
$ | 12.01 | $ | 11.25 | ||||
First Quarter
|
$ | 15.25 | $ | 10.55 |
Management’s Report on Internal Control over Financial Reporting
|
18
|
Report of Independent Registered Accounting Firm
|
19
|
Consolidated Financial Statements
|
|
Balance Sheets
|
20
|
Statements of Income
|
21
|
Statements of Changes in Stockholders’ Equity
|
22
|
Statements of Cash Flows
|
23
|
Notes to Consolidated Financial Statements
|
25
|
/s/ Stegman & Company
|
December 31,
|
||||||||
2010
|
2009
|
|||||||
Assets
|
||||||||
Cash and due from banks
|
$ | 8,695,590 | $ | 9,960,787 | ||||
Federal funds sold
|
615,000 | 695,000 | ||||||
Interest-bearing deposits with banks
|
512,846 | 592,180 | ||||||
Securities available for sale (AFS), at fair value
|
34,946,225 | 53,926,109 | ||||||
Securities held to maturity (HTM), at amortized cost
|
126,988,316 | 90,287,803 | ||||||
Federal Home Loan Bank and Federal Reserve Bank stock - at cost
|
6,315,600 | 6,935,500 | ||||||
Loans receivable - net of allowance for loan losses of $7,669,147 and $7,471,314
|
654,449,936 | 616,592,976 | ||||||
Premises and equipment, net
|
12,132,141 | 11,987,690 | ||||||
Foreclosed real estate
|
10,469,302 | 922,934 | ||||||
Accrued interest receivable
|
2,784,396 | 2,925,271 | ||||||
Investment in bank owned life insurance
|
17,447,692 | 10,943,396 | ||||||
Other assets
|
10,579,058 | 9,272,888 | ||||||
Total Assets
|
$ | 885,936,102 | $ | 815,042,534 | ||||
Liabilities and Stockholders' Equity
|
||||||||
Deposits
|
||||||||
Noninterest-bearing deposits
|
$ | 75,642,197 | $ | 70,001,444 | ||||
Interest-bearing deposits
|
648,940,129 | 570,417,345 | ||||||
Total deposits
|
724,582,326 | 640,418,789 | ||||||
Short-term borrowings
|
816,422 | 13,080,530 | ||||||
Long-term debt
|
70,624,044 | 75,669,630 | ||||||
Guaranteed preferred beneficial interest in junior subordinated debentures
|
12,000,000 | 12,000,000 | ||||||
Accrued expenses and other liabilities
|
6,808,383 | 5,683,736 | ||||||
Total Liabilities
|
814,831,175 | 746,852,685 | ||||||
Stockholders' Equity
|
||||||||
Fixed Rate Cumulative Perpetual Preferred Stock, Series A - par value $1,000; authorized 15,540; issued 15,540
|
15,540,000 | 15,540,000 | ||||||
Fixed Rate Cumulative Perpetual Preferred Stock, Series B - par value $1,000; authorized 777; issued 777
|
777,000 | 777,000 | ||||||
Common stock - par value $.01; authorized - 15,000,000 shares; issued 3,002,616 and 2,976,046 shares, respectively
|
30,026 | 29,760 | ||||||
Additional paid in capital
|
16,962,460 | 16,754,627 | ||||||
Retained earnings
|
37,892,557 | 35,193,958 | ||||||
Accumulated other comprehensive gain
|
411,188 | 284,474 | ||||||
Unearned ESOP shares
|
(508,304 | ) | (389,970 | ) | ||||
Total Stockholders’ Equity
|
71,104,927 | 68,189,849 | ||||||
Total Liabilities and Stockholders' Equity
|
$ | 885,936,102 | $ | 815,042,534 |
Years Ended December 31,
|
||||||||
2010
|
2009
|
|||||||
Interest and Dividend Income
|
||||||||
Loans, including fees
|
$ | 34,995,425 | $ | 32,685,178 | ||||
Taxable interest and dividends on investment securities
|
4,524,204 | 5,180,535 | ||||||
Interest on deposits with banks
|
17,358 | 21,640 | ||||||
Total Interest and Dividend Income
|
39,536,987 | 37,887,353 | ||||||
Interest Expenses
|
||||||||
Deposits
|
10,938,385 | 12,230,667 | ||||||
Short-term borrowings
|
42,151 | 29,330 | ||||||
Long-term debt
|
2,599,679 | 3,906,131 | ||||||
Total Interest Expenses
|
13,580,215 | 16,166,128 | ||||||
Net Interest Income
|
25,956,772 | 21,721,225 | ||||||
Provision for loan losses
|
3,933,448 | 3,472,608 | ||||||
Net Interest Income After Provision For Loan Losses
|
22,023,324 | 18,248,617 | ||||||
Noninterest Income
|
||||||||
Recognition of other than temporary decline in value of investment securities
|
- | (538,614 | ) | |||||
Less: portion recorded as comprehensive income
|
- | 271,870 | ||||||
Impairment loss on investment securities, net
|
- | (266,744 | ) | |||||
Loan appraisal, credit, and miscellaneous charges
|
676,805 | 688,101 | ||||||
Income from bank owned life insurance
|
504,296 | 417,110 | ||||||
Service charges
|
1,905,949 | 1,658,544 | ||||||
Gain on sale of asset
|
22,500 | - | ||||||
Gain on sale of loans held for sale
|
470,626 | 325,671 | ||||||
Loss on the sale of investment securities
|
- | (12,863 | ) | |||||
Total Noninterest Income
|
3,580,176 | 2,809,819 | ||||||
Noninterest Expenses
|
||||||||
Salary and employee benefits
|
9,769,401 | 8,607,141 | ||||||
Occupancy expense
|
1,772,394 | 1,779,497 | ||||||
Advertising
|
399,802 | 449,155 | ||||||
Data processing expense
|
1,044,972 | 914,250 | ||||||
Depreciation of furniture, fixtures, and equipment
|
541,642 | 613,205 | ||||||
Telephone communications
|
170,566 | 152,649 | ||||||
Office supplies
|
170,447 | 164,154 | ||||||
Professional fees
|
799,377 | 749,467 | ||||||
FDIC insurance
|
1,338,305 | 1,134,926 | ||||||
Valuation allowance on foreclosed real estate
|
287,934 | - | ||||||
Other
|
1,900,343 | 2,015,234 | ||||||
Total Noninterest Expenses
|
18,195,183 | 16,579,678 | ||||||
Income before income taxes
|
7,408,317 | 4,478,758 | ||||||
Income tax expense
|
2,642,616 | 1,611,668 | ||||||
Net Income
|
$ | 4,765,701 | $ | 2,867,090 | ||||
Preferred stock dividends
|
846,930 | 846,930 | ||||||
Net Income Available to Common Shareholders
|
$ | 3,918,771 | $ | 2,020,160 | ||||
Earnings Per Common Share
|
||||||||
Basic
|
$ | 1.31 | $ | 0.68 | ||||
Diluted
|
$ | 1.30 | $ | 0.68 | ||||
Cash dividend paid per common share
|
$ | 0.40 | $ | 0.40 |
Accumulated
|
||||||||||||||||||||||
Other
|
Unearned
|
|||||||||||||||||||||
Preferred
|
Common
|
Paid-in
|
Retained
|
Comprehensive
|
ESOP
|
|||||||||||||||||
Stock
|
Stock
|
Capital
|
Earnings
|
Income (Loss)
|
Shares
|
Total
|
||||||||||||||||
Balance at January 1, 2009
|
$ | 16,317,000 | $ | 29,478 | $ | 16,517,649 | $ | 34,280,719 | $ | 229,848 | $ | (260,275 | ) | $ | 67,114,419 | |||||||
Comprehensive Income
|
||||||||||||||||||||||
Net Income
|
2,867,090 | 2,867,090 | ||||||||||||||||||||
Unrealized holding gains on investment securities net of tax of $120,577
|
234,060 | 234,060 | ||||||||||||||||||||
Other than temporary impairment on HTM securities net of tax of $92,436
|
(179,434 | ) | (179,434 | ) | ||||||||||||||||||
Total Comprehensive Income
|
2,921,716 | |||||||||||||||||||||
Cash dividend $0.40 per share
|
(1,186,907 | ) | (1,186,907 | ) | ||||||||||||||||||
Preferred stock dividends
|
(766,944 | ) | (766,944 | ) | ||||||||||||||||||
Exercise of stock options
|
174 | 122,134 | 122,308 | |||||||||||||||||||
Net change in unearned ESOP shares
|
24 | 1 | (129,695 | ) | (129,670 | ) | ||||||||||||||||
Stock-based compensation
|
84 | 99,896 | 99,980 | |||||||||||||||||||
Tax effect of the exercise of stock-based compensation
|
- | - | 14,947 | - | - | - | 14,947 | |||||||||||||||
Balance at December 31, 2009
|
16,317,000 | 29,760 | 16,754,627 | 35,193,958 | 284,474 | (389,970 | ) | 68,189,849 | ||||||||||||||
Comprehensive Income
|
||||||||||||||||||||||
Net Income
|
4,765,701 | 4,765,701 | ||||||||||||||||||||
Unrealized holding gains on investment securities net of tax of $61,452
|
119,463 | 119,463 | ||||||||||||||||||||
Other than temporary impairment amortization on HTM securities net of tax of $3,735
|
7,251 | 7,251 | ||||||||||||||||||||
Total Comprehensive Income
|
4,892,415 | |||||||||||||||||||||
Cash dividend $0.40 per share
|
(1,196,187 | ) | (1,196,187 | ) | ||||||||||||||||||
Preferred stock dividends
|
(846,930 | ) | (846,930 | ) | ||||||||||||||||||
Exercise of stock options
|
237 | 147,562 | 147,799 | |||||||||||||||||||
Net change in unearned ESOP shares
|
44 | (118,334 | ) | (118,290 | ) | |||||||||||||||||
Repurchase of common stock
|
(15 | ) | (23,985 | ) | (24,000 | ) | ||||||||||||||||
Tax effect of ESOP dividend
|
55,713 | 55,713 | ||||||||||||||||||||
Tax effect of Non-ISO shares
|
- | - | 4,558 | - | - | - | 4,558 | |||||||||||||||
Balance at December 31, 2010
|
$ | 16,317,000 | $ | 30,026 | $ | 16,962,460 | $ | 37,892,557 | $ | 411,188 | $ | (508,304 | ) | $ | 71,104,927 |
2010
|
2009
|
|||||||
Cash Flows from Operating Activities
|
||||||||
Net income
|
$ | 4,765,701 | $ | 2,867,090 | ||||
Adjustments to reconcile net income to net cash provided by operating activities
|
||||||||
Provision for loan losses
|
3,933,448 | 3,472,608 | ||||||
Depreciation and amortization
|
1,042,610 | 1,188,060 | ||||||
Loans originated for resale
|
(14,248,912 | ) | (20,994,916 | ) | ||||
Proceeds from sale of loans held for sale
|
14,653,649 | 21,022,010 | ||||||
Gain on sale of loans held for sale
|
(470,626 | ) | (325,671 | ) | ||||
Gain on sale of asset
|
(22,500 | ) | - | |||||
Loss on sales of investment securities
|
- | 12,863 | ||||||
Other than temporary decline in market value of investment securities
|
- | 266,744 | ||||||
Net amortization of premium/discount on mortgage backed securities and investments
|
(177,420 | ) | (204,963 | ) | ||||
Increase in foreclosed real estate valuation allowance
|
287,934 | - | ||||||
Increase in cash surrender of bank owned life insurance
|
(504,296 | ) | (417,110 | ) | ||||
Deferred income tax benefit
|
(761,235 | ) | (1,659,534 | ) | ||||
Decrease in accrued interest receivable
|
140,875 | 40,542 | ||||||
(Decrease) Increase in deferred loan fees
|
(38,265 | ) | 663,560 | |||||
Increase (Decrease) in accounts payable, accrued expenses and other liabilities
|
1,124,647 | (233,394 | ) | |||||
Increase in other assets
|
(898,148 | ) | (3,523,305 | ) | ||||
Net Cash Provided by Operating Activities
|
8,827,462 | 2,174,584 | ||||||
Cash Flows from Investing Activities
|
||||||||
Purchase of investment securities available for sale
|
(129,159 | ) | (43,335,182 | ) | ||||
Proceeds from sale, redemption or principal payments of investment securities available for sale
|
19,522,952 | 4,060,261 | ||||||
Purchase of investment securities held to maturity
|
(93,208,717 | ) | (8,377,442 | ) | ||||
Proceeds from maturities or principal payments of investment securities held to maturity
|
56,463,705 | 26,380,529 | ||||||
Net decrease (increase) of FHLB and Federal Reserve stock
|
619,900 | (482,500 | ) | |||||
Loans originated or acquired
|
(244,552,180 | ) | (274,171,579 | ) | ||||
Principal collected on loans
|
193,319,561 | 195,795,216 | ||||||
Purchase of bank owned life insurance policies
|
(6,000,000 | ) | - | |||||
Proceeds from disposal of asset
|
22,500 | - | ||||||
Purchase of premises and equipment
|
(1,187,061 | ) | (939,751 | ) | ||||
Net Cash Used in Investing Activities
|
(75,128,499 | ) | (101,070,448 | ) |
2010
|
2009
|
|||||||
Cash Flows from Financing Activities
|
||||||||
Net increase in deposits
|
$ | 84,163,537 | $ | 115,251,223 | ||||
Proceeds from long-term borrowings
|
15,000,000 | 750,000 | ||||||
Payments of long-term borrowings
|
(20,045,586 | ) | (30,043,801 | ) | ||||
Net (decrease) increase in short-term borrowings
|
(12,264,108 | ) | 11,558,163 | |||||
Exercise of stock options
|
147,799 | 222,288 | ||||||
Excess tax benefits on stock based compensation
|
4,558 | 14,947 | ||||||
Dividends paid
|
(2,043,117 | ) | (1,953,851 | ) | ||||
Net change in unearned ESOP shares
|
(62,577 | ) | (129,670 | ) | ||||
Redemption of common stock
|
(24,000 | ) | - | |||||
Net Cash Provided by Financing Activities
|
64,876,506 | 95,669,299 | ||||||
Decrease in Cash and Cash Equivalents
|
(1,424,531 | ) | (3,226,565 | ) | ||||
Cash and Cash Equivalents - January 1
|
11,247,967 | 14,474,532 | ||||||
Cash and Cash Equivalents - December 31
|
$ | 9,823,436 | $ | 11,247,967 | ||||
Supplemental Disclosures of Cash Flow Information
|
||||||||
Cash paid during the year for:
|
||||||||
Interest
|
$ | 13,808,041 | $ | 17,660,936 | ||||
Income taxes
|
$ | 4,597,711 | $ | 2,797,865 | ||||
Supplemental Schedule of Non-Cash Operating Activities
|
||||||||
Issuance of common stock for payment of accrued compensation
|
$ | - | $ | 99,980 | ||||
Transfer of loans to foreclosed real estate
|
$ | 11,480,843 | $ | 922,934 |
Years Ended December 31,
|
||||||||
2010
|
2009
|
|||||||
Net Income
|
$ | 4,765,701 | $ | 2,867,090 | ||||
Less: dividends paid and accrued on preferred stock
|
(846,930 | ) | (846,930 | ) | ||||
Net income available to common shareholders
|
$ | 3,918,771 | $ | 2,020,160 | ||||
Average number of common shares outstanding
|
2,985,080 | 2,961,293 | ||||||
Effect of dilutive options
|
23,199 | 26,608 | ||||||
Average number of shares used to calculate diluted earnings per share
|
3,008,279 | 2,987,901 |
Description of Asset
|
Fair Value
|
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
|
Significant Other
Observable Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||||||
Available for sale securities:
|
||||||||||||||||
Asset-backed securities issued by GSEs
|
||||||||||||||||
CMOs
|
$ | 27,584,731 | $ | - | $ | 27,584,731 | $ | - | ||||||||
MBS
|
3,504,215 | - | 3,504,215 | - | ||||||||||||
Corporate equity securities
|
37,390 | - | 37,390 | - | ||||||||||||
Bond mutual funds
|
3,819,889 | - | 3,819,889 | - | ||||||||||||
Total available for sale securities
|
$ | 34,946,225 | $ | - | $ | 34,946,225 | $ | - |
Description of Asset
|
Fair Value
|
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
|
Significant Other
Observable Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||||||
Loans with Impairment:
|
||||||||||||||||
Commercial real estate
|
$ | 4,742,982 | $ | - | $ | 4,742,982 | $ | - | ||||||||
Commercial loans
|
4,647,399 | - | 4,647,399 | - | ||||||||||||
Total loans with impairment
|
$ | 9,390,381 | $ | - | $ | 9,390,381 | $ | - | ||||||||
Foreclosed Real Estate
|
$ | 10,469,302 | $ | - | $ | 10,469,302 | $ | - |
December 31, 2010
|
||||||||||||||||
Amortized
|
Gross Unrealized
|
Gross Unrealized
|
Estimated
|
|||||||||||||
Cost
|
Gains
|
Losses
|
Fair Value
|
|||||||||||||
Securities available for sale (AFS)
|
||||||||||||||||
Asset-backed securities issued by GSEs
|
$ | 30,327,808 | $ | 761,138 | $ | - | $ | 31,088,946 | ||||||||
Corporate equity securities
|
37,310 | 80 | - | 37,390 | ||||||||||||
Bond mutual funds
|
3,697,208 | 122,681 | - | 3,819,889 | ||||||||||||
Total securities available for sale
|
$ | 34,062,326 | $ | 883,899 | $ | - | $ | 34,946,225 | ||||||||
Securities held to maturity (HTM)
|
||||||||||||||||
Asset-backed securities issued by:
|
||||||||||||||||
GSEs
|
$ | 113,772,011 | $ | 1,761,809 | $ | 782,270 | $ | 114,751,550 | ||||||||
Other
|
12,463,500 | 132,928 | 1,709,386 | 10,887,042 | ||||||||||||
Total debt securities held to maturity
|
126,235,511 | 1,894,737 | 2,491,656 | 125,638,592 | ||||||||||||
U.S. Government obligations
|
752,805 | - | - | 752,805 | ||||||||||||
Other investments
|
- | - | - | - | ||||||||||||
Total securities held to maturity
|
$ | 126,988,316 | $ | 1,894,737 | $ | 2,491,656 | $ | 126,391,397 | ||||||||
December 31, 2009
|
||||||||||||||||
Amortized
|
Gross Unrealized
|
Gross Unrealized
|
Estimated
|
|||||||||||||
Cost
|
Gains
|
Losses
|
Fair Value
|
|||||||||||||
Securities available for sale (AFS)
|
||||||||||||||||
Asset-backed securities issued by GSEs
|
$ | 49,617,856 | $ | 646,198 | $ | 30,628 | $ | 50,233,426 | ||||||||
Corporate equity securities
|
37,310 | 1,416 | 163 | 38,563 | ||||||||||||
Bond mutual funds
|
3,568,050 | 86,070 | - | 3,654,120 | ||||||||||||
Total securities available for sale
|
$ | 53,223,216 | $ | 733,684 | $ | 30,791 | $ | 53,926,109 | ||||||||
Securities held to maturity (HTM)
|
||||||||||||||||
Asset-backed securities issued by:
|
||||||||||||||||
GSEs
|
$ | 71,276,709 | $ | 1,689,252 | $ | 137,919 | $ | 72,828,042 | ||||||||
Other
|
19,005,847 | 12,088 | 3,353,964 | 15,663,971 | ||||||||||||
Total debt securities held to maturity
|
90,282,556 | 1,701,340 | 3,491,883 | 88,492,013 | ||||||||||||
U.S. Government obligations
|
- | - | - | - | ||||||||||||
Other investments
|
5,247 | - | - | 5,247 | ||||||||||||
Total securities held to maturity
|
$ | 90,287,803 | $ | 1,701,340 | $ | 3,491,883 | $ | 88,497,260 |
Continuous unrealized losses existing for
|
||||||||||||||||||||||||
Less Than 12
|
More Than 12
|
|||||||||||||||||||||||
Months
|
Months
|
Total
|
||||||||||||||||||||||
Fair Value
|
Unrealized
Loss
|
Fair Value
|
Unrealized
Loss
|
Fair Value
|
Unrealized
Losses
|
|||||||||||||||||||
Asset-backed securities issued by GSEs
|
$ | 37,344,330 | $ | 782,192 | $ | 200,072 | $ | 78 | $ | 37,544,402 | $ | 782,270 | ||||||||||||
Asset-backed securities issued by other
|
- | - | 8,573,411 | 1,709,386 | 8,573,411 | 1,709,386 | ||||||||||||||||||
$ | 37,344,330 | $ | 782,192 | $ | 8,773,483 | $ | 1,709,465 | $ | 46,117,813 | $ | 2,491,656 |
Available for Sale
|
Held to Maturity
|
|||||||||||||||
Estimated
|
Estimated
|
|||||||||||||||
Amortized
|
Fair
|
Amortized
|
Fair
|
|||||||||||||
Cost
|
Value
|
Cost
|
Value
|
|||||||||||||
Within one year
|
$ | 3,697,208 | $ | 3,819,889 | $ | 752,805 | $ | 752,805 | ||||||||
Asset-backed securites
|
||||||||||||||||
Within one year
|
11,468,202 | 11,756,020 | 36,223,185 | 36,051,899 | ||||||||||||
Over one year through five years
|
12,903,862 | 13,227,711 | 61,310,285 | 61,020,372 | ||||||||||||
Over five years through ten years
|
4,326,438 | 4,435,019 | 21,990,416 | 21,886,432 | ||||||||||||
After ten years
|
1,629,306 | 1,670,196 | 6,711,625 | 6,679,889 | ||||||||||||
Total asset-backed securities
|
30,327,808 | 31,088,946 | 126,235,511 | 125,638,592 | ||||||||||||
$ | 34,025,016 | $ | 34,908,835 | $ | 126,988,316 | $ | 126,391,397 |
Credit Rating
|
Amount
|
|||
AAA
|
$ | 148,916,364 | ||
AA+
|
404,077 | |||
AA-
|
2,121,938 | |||
A-
|
1,147,286 | |||
BBB+
|
104,005 | |||
BBB-
|
805,668 | |||
B+
|
657,727 | |||
CCC+
|
3,167,392 | |||
Total
|
$ | 157,324,457 |
Years Ended December 31,
|
||||||||
2010
|
2009
|
|||||||
Commercial real estate
|
$ | 336,299,836 | $ | 292,987,963 | ||||
Residential first mortgages
|
136,048,577 | 116,225,733 | ||||||
Construction and land development
|
42,504,200 | 62,509,558 | ||||||
Home equity and second mortgage
|
24,379,664 | 25,133,155 | ||||||
Commercial loans
|
104,566,261 | 108,657,910 | ||||||
Consumer loans
|
1,273,080 | 1,607,765 | ||||||
Commercial equipment
|
17,983,648 | 17,916,655 | ||||||
663,055,266 | 625,038,739 | |||||||
Less:
|
||||||||
Deferred loan fees
|
936,183 | 974,449 | ||||||
Allowance for loan loss
|
7,669,147 | 7,471,314 | ||||||
8,605,330 | 8,445,763 | |||||||
$ | 654,449,936 | $ | 616,592,976 |
2010
|
Commercial
Real Estate
|
Residential
First
Mortgage
|
Construction
and Land
Development
|
Home
Equity and
Second Mtg.
|
Commercial
Loans
|
Consumer
Loans
|
Commercial
Equipment
|
Total
|
||||||||||||||||||||||||
Allowance for loan losses:
|
||||||||||||||||||||||||||||||||
Balance at January 1,
|
$ | 2,661,371 | $ | 127,848 | $ | 1,696,396 | $ | 130,692 | $ | 2,109,513 | $ | 63,989 | $ | 681,505 | $ | 7,471,314 | ||||||||||||||||
Charge-offs
|
(525,992 | ) | (62,999 | ) | (2,248,967 | ) | (70,999 | ) | (568,992 | ) | (10,000 | ) | (255,996 | ) | (3,743,945 | ) | ||||||||||||||||
Recoveries
|
- | - | 1,041 | - | - | 7,289 | - | 8,330 | ||||||||||||||||||||||||
Provisions
|
1,178,604 | 139,224 | 1,818,155 | 37,826 | 1,011,518 | (29,069 | ) | (222,810 | ) | 3,933,448 | ||||||||||||||||||||||
Balance at December 31,
|
$ | 3,313,983 | $ | 204,073 | $ | 1,266,625 | $ | 97,519 | $ | 2,552,039 | $ | 32,209 | $ | 202,699 | $ | 7,669,147 | ||||||||||||||||
Ending balance: individually evaluated for impairment
|
$ | 500,000 | $ | - | $ | - | $ | - | $ | 1,449,179 | $ | - | $ | 48,456 | $ | 1,997,635 | ||||||||||||||||
Ending balance: collectively evaluated for impairment
|
$ | 2,813,983 | $ | 204,073 | $ | 1,266,625 | $ | 97,519 | $ | 1,102,860 | $ | 32,209 | $ | 154,243 | $ | 5,671,512 | ||||||||||||||||
Loan receivables:
|
||||||||||||||||||||||||||||||||
Ending balance
|
$ | 336,299,836 | $ | 136,048,577 | $ | 42,504,200 | $ | 24,379,664 | $ | 104,566,261 | $ | 1,273,080 | $ | 17,983,648 | $ | 663,055,266 | ||||||||||||||||
Ending balance: individually evaluated for impairment
|
$ | 20,800,730 | $ | 3,664,442 | $ | 12,221,463 | $ | 319,112 | $ | 19,991,537 | $ | 701 | $ | 319,770 | $ | 57,317,755 | ||||||||||||||||
Ending balance: collectively evaluated for impairment
|
$ | 315,499,106 | $ | 132,384,135 | $ | 30,282,737 | $ | 24,060,552 | $ | 84,574,724 | $ | 1,272,379 | $ | 17,663,878 | $ | 605,737,511 |
2009
|
Commercial
Real Estate
|
Residential
First
Mortgage
|
Construction
and Land
Development
|
Home
Equity and
Second Mtg.
|
Commercial
Loans
|
Consumer
Loans
|
Commercial
Equipment
|
Total
|
||||||||||||||||||||||||
Allowance for loan losses:
|
||||||||||||||||||||||||||||||||
Balance at January 1,
|
$ | 2,008,872 | $ | 104,993 | $ | 1,294,918 | $ | 101,994 | $ | 1,247,921 | $ | 42,997 | $ | 343,978 | $ | 5,145,673 | ||||||||||||||||
Charge-offs
|
- | - | (187,395 | ) | (98,225 | ) | (606,313 | ) | (31,933 | ) | (223,201 | ) | (1,147,067 | ) | ||||||||||||||||||
Recoveries
|
- | - | - | - | - | 99 | - | 99 | ||||||||||||||||||||||||
Provisions
|
652,499 | 22,855 | 588,873 | 126,923 | 1,467,905 | 52,826 | 560,728 | 3,472,608 | ||||||||||||||||||||||||
Balance at December 31,
|
$ | 2,661,371 | $ | 127,848 | $ | 1,696,396 | $ | 130,692 | $ | 2,109,513 | $ | 63,989 | $ | 681,505 | $ | 7,471,314 | ||||||||||||||||
Ending balance: individually evaluated for impairment
|
$ | 50,000 | $ | - | $ | 404,600 | $ | - | $ | 882,745 | $ | - | $ | 500,000 | $ | 1,837,345 | ||||||||||||||||
Ending balance: collectively evaluated for impairment
|
$ | 2,611,371 | $ | 127,848 | $ | 1,291,796 | $ | 130,692 | $ | 1,226,768 | $ | 63,989 | $ | 181,505 | $ | 5,633,969 | ||||||||||||||||
Loan receivables:
|
||||||||||||||||||||||||||||||||
Ending balance
|
$ | 292,987,963 | $ | 116,225,733 | $ | 62,509,558 | $ | 25,133,155 | $ | 108,657,910 | $ | 1,607,765 | $ | 17,916,655 | $ | 625,038,739 | ||||||||||||||||
Ending balance: individually evaluated for impairment
|
$ | 13,688,541 | $ | 3,098,512 | $ | 16,590,479 | $ | 169,103 | $ | 8,630,272 | $ | 1,230 | $ | 5,014,362 | $ | 47,192,499 | ||||||||||||||||
Ending balance: collectively evaluated for impairment
|
$ | 279,299,422 | $ | 113,127,221 | $ | 45,919,079 | $ | 24,964,052 | $ | 100,027,638 | $ | 1,606,535 | $ | 12,902,293 | $ | 577,846,240 |
2010
|
||||
Balance, beginning of year
|
$ | 5,509,870 | ||
New loans made during year
|
1,796,909 | |||
Repayments made during year
|
(1,056,682 | ) | ||
Balance, end of year
|
$ | 6,250,097 |
Years Ended December 31,
|
||||||||||||||||
2010
|
2009
|
|||||||||||||||
Dollars
|
Number
of Loans
|
Dollars
|
Number
of Loans
|
|||||||||||||
Commercial real estate
|
$ | 8,244,683 | 12 | $ | 6,366,672 | 8 | ||||||||||
Residential first mortgages
|
1,746,786 | 6 | 338,806 | 1 | ||||||||||||
Construction and land development
|
983,867 | 1 | 9,504,414 | 5 | ||||||||||||
Home equity and second mortgage
|
232,644 | 5 | - | - | ||||||||||||
Commercial loans
|
2,261,642 | 6 | 2,192,308 | 5 | ||||||||||||
Consumer loans
|
701 | 1 | 22,884 | 2 | ||||||||||||
Commercial equipment
|
48,456 | 1 | 862,399 | 3 | ||||||||||||
$ | 13,518,779 | 32 | $ | 19,287,483 | 24 |
December 31, 2010
|
Current
|
31-60
Days
|
61-90
Days
|
Greater
than 90
Days
|
Total
Past Due
|
Total
Loan
Receivables
|
||||||||||||||||||
Commercial real estate
|
$ | 327,358,352 | $ | 696,801 | $ | - | $ | 8,244,683 | $ | 8,941,484 | $ | 336,299,836 | ||||||||||||
Residential first mortgages
|
134,142,088 | 159,703 | - | 1,746,786 | 1,906,489 | 136,048,577 | ||||||||||||||||||
Construction and land dev.
|
41,520,333 | - | - | 983,867 | 983,867 | 42,504,200 | ||||||||||||||||||
Home equity and second mtg.
|
23,947,389 | 199,631 | - | 232,644 | 432,275 | 24,379,664 | ||||||||||||||||||
Commercial loans
|
102,221,510 | 83,109 | - | 2,261,642 | 2,344,751 | 104,566,261 | ||||||||||||||||||
Consumer loans
|
1,268,738 | 3,141 | 500 | 701 | 4,342 | 1,273,080 | ||||||||||||||||||
Commercial equipment
|
17,935,192 | - | - | 48,456 | 48,456 | 17,983,648 | ||||||||||||||||||
Total
|
$ | 648,393,602 | $ | 1,142,385 | $ | 500 | $ | 13,518,779 | $ | 14,661,664 | $ | 663,055,266 | ||||||||||||
December 31, 2009
|
Current
|
31-60
Days
|
61-90
Days
|
Greater
than 90
Days
|
Total
Past Due
|
Total
Loan
Receivables
|
||||||||||||||||||
Commercial real estate
|
$ | 286,037,954 | $ | 466,930 | $ | 116,407 | $ | 6,366,672 | $ | 6,950,009 | $ | 292,987,963 | ||||||||||||
Residential first mortgages
|
115,358,771 | 528,156 | - | 338,806 | 866,962 | 116,225,733 | ||||||||||||||||||
Construction and land dev.
|
52,009,515 | - | 995,629 | 9,504,414 | 10,500,043 | 62,509,558 | ||||||||||||||||||
Home equity and second mtg.
|
24,873,478 | 259,677 | - | 259,677 | 25,133,155 | |||||||||||||||||||
Commercial loans
|
102,223,293 | 325,555 | 3,916,754 | 2,192,308 | 6,434,617 | 108,657,910 | ||||||||||||||||||
Consumer loans
|
1,472,300 | 100,196 | 12,385 | 22,884 | 135,465 | 1,607,765 | ||||||||||||||||||
Commercial equipment
|
17,054,256 | - | - | 862,399 | 862,399 | 17,916,655 | ||||||||||||||||||
Total
|
$ | 599,029,567 | $ | 1,680,514 | $ | 5,041,175 | $ | 19,287,483 | $ | 26,009,172 | $ | 625,038,739 |
Commercial Real Estate
|
Construction and Land Dev.
|
|||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
Unrated
|
$ | 1,074,330 | $ | 962,169 | $ | - | $ | 635,000 | ||||||||
Pass
|
317,579,637 | 279,447,944 | 30,274,737 | 45,284,080 | ||||||||||||
Special mention
|
3,628,052 | 3,346,443 | 1,585,035 | 4,496,641 | ||||||||||||
Substandard
|
14,017,818 | 9,231,407 | 10,644,428 | 1,392,018 | ||||||||||||
Doubtful
|
- | - | - | 10,701,819 | ||||||||||||
Loss
|
- | - | - | - | ||||||||||||
Total
|
$ | 336,299,836 | $ | 292,987,963 | $ | 42,504,200 | $ | 62,509,558 | ||||||||
Commercial Loans
|
Commercial Equipment
|
|||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Unrated
|
$ | 50,035 | $ | 527,703 | $ | 169,492 | $ | 293,771 | ||||||||
Pass
|
84,946,678 | 94,704,238 | 17,765,700 | 17,488,030 | ||||||||||||
Special mention
|
2,814,668 | 2,668,800 | - | - | ||||||||||||
Substandard
|
12,852,635 | 6,765,846 | - | 74,658 | ||||||||||||
Doubtful
|
3,793,470 | 3,991,323 | 48,456 | 60,196 | ||||||||||||
Loss
|
108,775 | - | - | - | ||||||||||||
Total
|
$ | 104,566,261 | $ | 108,657,910 | $ | 17,983,648 | $ | 17,916,655 |
Residential First Mortgages
|
Home Equity and Second Mtg.
|
Consumer Loans
|
||||||||||||||||||||||
2010 | 2009 | 2010 | 2009 |
2010
|
2009
|
|||||||||||||||||||
Performing
|
$ | 134,301,791 | $ | 115,886,927 | $ | 24,147,019 | $ | 25,133,155 | $ | 1,272,379 | $ | 1,584,881 | ||||||||||||
Nonperforming
|
1,746,786 | 338,806 | 232,645 | - | 701 | 22,884 | ||||||||||||||||||
Total
|
$ | 136,048,577 | $ | 116,225,733 | $ | 24,379,664 | $ | 25,133,155 | $ | 1,273,080 | $ | 1,607,765 |
Unpaid
|
Recorded
|
Recorded
|
||||||||||||||||||||||||||
Contractual
|
Investment
|
Investment
|
Total
|
Average
|
Interest
|
|||||||||||||||||||||||
Principal
|
With No
|
With
|
Recorded
|
Related
|
Recorded
|
Income
|
||||||||||||||||||||||
Balance
|
Allowance
|
Allowance
|
Investment
|
Allowance
|
Investment
|
Recognized
|
||||||||||||||||||||||
Commercial real estate
|
$ | 11,254,896 | $ | 5,624,780 | $ | 5,222,466 | $ | 10,847,246 | $ | 500,000 | $ | 8,710,501 | $ | 329,446 | ||||||||||||||
Residential first mortgages
|
928,847 | 928,847 | - | 928,847 | - | 924,163 | 52,516 | |||||||||||||||||||||
Construction and land dev.
|
- | - | - | - | - | - | - | |||||||||||||||||||||
Home equity and second mtg.
|
- | - | - | - | - | - | - | |||||||||||||||||||||
Commercial loans
|
9,292,145 | 3,195,567 | 6,096,578 | 9,292,145 | 1,449,179 | 9,308,552 | 464,956 | |||||||||||||||||||||
Consumer loans
|
- | - | - | - | - | - | - | |||||||||||||||||||||
Commercial equipment
|
319,769 | 271,313 | 48,456 | 319,769 | 48,456 | 300,533 | 13,836 | |||||||||||||||||||||
Total
|
$ | 21,795,657 | $ | 10,020,507 | $ | 11,367,500 | $ | 21,388,007 | $ | 1,997,635 | $ | 19,243,749 | $ | 860,754 |
Years Ended December 31,
|
||||||||||||||||
2010
|
2009
|
|||||||||||||||
Number
|
Number
|
|||||||||||||||
Dollars
|
of Loans
|
Dollars
|
of Loans
|
|||||||||||||
Commercial real estate
|
$ | 6,847,618 | 6 | $ | 6,706,527 | 5 | ||||||||||
Residential first mortgages
|
928,847 | 2 | 393,812 | 1 | ||||||||||||
Commercial loans
|
8,834,025 | 7 | 4,440,679 | 4 | ||||||||||||
Commercial equipment
|
271,313 | 4 | 60,196 | 1 | ||||||||||||
$ | 16,881,803 | 19 | $ | 11,601,215 | 11 |
Year Ended December 31,
|
||||||||
2010
|
2009
|
|||||||
Balance at beginning of the year
|
$ | 132,859 | $ | - | ||||
Additions
|
103,238 | 152,519 | ||||||
Amortization
|
(39,449 | ) | (19,660 | ) | ||||
$ | 196,648 | $ | 132,859 |
Year Ended December 31,
|
||||||||
2010
|
2009
|
|||||||
Balance at beginning of the year
|
$ | 922,934 | $ | - | ||||
Additions of underlying property
|
11,768,778 | 922,934 | ||||||
Disposals of underlying property
|
(1,934,476 | ) | - | |||||
Valuation allowance
|
(287,934 | ) | - | |||||
Balance at end of year
|
$ | 10,469,302 | $ | 922,934 |
Year Ended December 31,
|
||||||||
2010
|
2009
|
|||||||
Valuation allowance
|
$ | 287,934 | $ | - | ||||
Operating expenses
|
128,465 | 148,156 | ||||||
$ | 416,399 | $ | 148,156 |
2010
|
2009
|
|||||||
Land
|
$ | 3,515,200 | $ | 3,100,039 | ||||
Building and improvements
|
11,092,569 | 10,779,689 | ||||||
Furniture and equipment
|
4,435,489 | 4,081,595 | ||||||
Automobiles
|
223,326 | 214,849 | ||||||
Total cost
|
19,266,584 | 18,176,172 | ||||||
Less accumulated depreciation
|
7,134,443 | 6,188,482 | ||||||
Premises and equipment, net
|
$ | 12,132,141 | $ | 11,987,690 |
2011
|
$ | 478,270 | ||
2012
|
487,978 | |||
2013
|
435,695 | |||
2014
|
448,458 | |||
2015
|
453,336 | |||
Thereafter
|
3,178,121 | |||
Total
|
$ | 5,481,858 |
2010
|
2009
|
|||||||
Noninterest-bearing demand
|
$ | 75,642,197 | $ | 70,001,444 | ||||
Interest-bearing:
|
||||||||
Demand
|
56,727,102 | 58,650,523 | ||||||
Money market deposits
|
122,330,785 | 102,491,488 | ||||||
Savings
|
31,683,368 | 28,017,418 | ||||||
Certificates of deposit
|
438,198,874 | 381,257,916 | ||||||
Total interest-bearing
|
648,940,129 | 570,417,345 | ||||||
Total Deposits
|
$ | 724,582,326 | $ | 640,418,789 |
2011
|
$ | 276,286,346 | ||
2012
|
88,381,395 | |||
2013
|
39,201,130 | |||
2014
|
10,221,249 | |||
2015
|
24,108,754 | |||
$ | 438,198,874 |
Fixed-
|
Fixed-Rate
|
Variable
|
||||||||||
Rate
|
Convertible
|
Convertible
|
||||||||||
2010
|
||||||||||||
Highest rate
|
4.04% | 4.30% | 4.00% | |||||||||
Lowest rate
|
0.84% | 3.47% | 4.00% | |||||||||
Weighted average rate
|
2.74% | 3.88% | 4.00% | |||||||||
Matures through
|
2036 | 2018 | 2020 | |||||||||
2009
|
||||||||||||
Highest rate
|
4.19% | 4.30% | 0.00% | |||||||||
Lowest rate
|
1.00% | 3.47% | 0.00% | |||||||||
Weighted average rate
|
3.71% | 3.88% | 0.00% | |||||||||
Matures through
|
2036 | 2018 | 2020 |
At or for the Year Ended December 31,
|
||||||||
(dollars in thousands)
|
2010
|
2009
|
||||||
Long-term debt
|
||||||||
Long-term debt outstanding at end of period
|
$ | 70,624 | $ | 75,670 | ||||
Weighted average rate on outstanding long-term debt
|
3.24 | % | 3.26 | % | ||||
Maximum outstanding long-term debt of any month end
|
70,666 | 100,692 | ||||||
Average outstanding long-term debt
|
70,823 | 94,745 | ||||||
Approximate average rate paid on long-term debt
|
3.22 | % | 3.70 | % | ||||
Short-term borrowings
|
||||||||
Short-term borrowings outstanding at end of period
|
$ | 816 | $ | 13,081 | ||||
Weighted average rate on short-term borrowings
|
0.00 | % | 0.34 | % | ||||
Maximum outstanding short-term borrowings at any month end
|
11,322 | 13,081 | ||||||
Average outstanding short-term borrowings
|
2,973 | 1,421 | ||||||
Approximate average rate paid on short-term borrowings
|
1.41 | % | 2.06 | % |
December 31, 2010
|
||||||||||||||||
Fixed-
|
Fixed-Rate
|
Variable
|
||||||||||||||
Rate
|
Convertible
|
Convertible
|
Total
|
|||||||||||||
Due in 2011
|
$ | 10,000,000 | $ | - | $ | - | $ | 10,000,000 | ||||||||
Due in 2012
|
- | - | - | - | ||||||||||||
Due in 2013
|
5,000,000 | - | - | 5,000,000 | ||||||||||||
Due in 2014
|
10,750,000 | 10,000,000 | - | 20,750,000 | ||||||||||||
Due in 2015
|
14,000,000 | - | - | 14,000,000 | ||||||||||||
Thereafter
|
874,044 | 10,000,000 | 10,000,000 | 20,874,044 | ||||||||||||
$ | 40,624,044 | $ | 20,000,000 | $ | 10,000,000 | $ | 70,624,044 |
2010
|
2009
|
|||||||
Current
|
||||||||
Federal
|
$ | 2,642,443 | $ | 2,463,419 | ||||
State
|
784,091 | 718,444 | ||||||
3,426,534 | 3,181,863 | |||||||
Deferred
|
||||||||
Federal
|
(671,587 | ) | (1,357,027 | ) | ||||
State
|
(112,331 | ) | (213,168 | ) | ||||
(783,918 | ) | (1,570,195 | ) | |||||
Total income tax expense
|
$ | 2,642,616 | $ | 1,611,668 |
2010
|
2009
|
|||||||||||||||
Amount
|
Percent
of Pre
Tax
Income
|
Amount
|
Percent
of Pre
Tax
Income
|
|||||||||||||
Expected income tax expense at federal tax rate
|
$ | 2,518,828 | 34.00 | % | $ | 1,522,778 | 34.00 | % | ||||||||
State taxes net of federal benefit
|
146,501 | 1.98 | % | 329,641 | 7.36 | % | ||||||||||
Nondeductible expenses
|
24,108 | 0.33 | % | 16,032 | 0.36 | % | ||||||||||
Nontaxable income
|
(312,542 | ) | (4.22 | )% | (272,036 | ) | (6.07 | )% | ||||||||
Other
|
265,721 | 3.59 | % | 15,253 | 0.34 | % | ||||||||||
$ | 2,642,616 | 35.67 | % | $ | 1,611,668 | 35.98 | % |
2010
|
2009
|
|||||||
Deferred tax assets
|
||||||||
Deferred fees
|
$ | 1,410 | $ | 1,470 | ||||
Allowance for loan losses
|
3,025,478 | 2,947,433 | ||||||
Deferred compensation
|
1,624,462 | 1,351,433 | ||||||
Other
|
872,426 | 533,217 | ||||||
5,523,776 | 4,833,553 | |||||||
Deferred tax liabilities
|
||||||||
Unrealized gain on investment securities
|
211,824 | 146,548 | ||||||
FHLB stock dividends
|
156,182 | 156,182 | ||||||
Depreciation
|
94,213 | 166,634 | ||||||
462,219 | 469,364 | |||||||
$ | 5,061,557 | $ | 4,364,189 |
Weighted
|
Weighted-Average
|
|||||||||||||||
Average
|
Aggregate
|
Contractual Life
|
||||||||||||||
Exercise
|
Intrinsic
|
Remaining In
|
||||||||||||||
Shares
|
Price
|
Value
|
Years
|
|||||||||||||
Outstanding at January 1, 2010
|
329,243 | $ | 16.04 | $ | 222,607 | |||||||||||
Granted at fair value
|
- | - | ||||||||||||||
Exercised
|
(29,413 | ) | 7.89 | 209,132 | ||||||||||||
Expired
|
- | - | ||||||||||||||
Forfeited
|
(593 | ) | 7.91 | |||||||||||||
Outstanding at December 31, 2010
|
299,237 | $ | 16.86 | $ | 524,392 | 2.0 | ||||||||||
Exercisable at December 31, 2010
|
299,237 | $ | 16.86 | $ | 524,392 | 2.0 | ||||||||||
Weighted
|
Weighted-Average
|
|||||||||||||||
Average
|
Aggregate
|
Contractual Life
|
||||||||||||||
Exercise
|
Intrinsic
|
Remaining In
|
||||||||||||||
Shares
|
Price
|
Value
|
Years
|
|||||||||||||
Outstanding at January 1, 2009
|
353,217 | $ | 15.49 | $ | 978,371 | |||||||||||
Granted at fair value
|
- | - | ||||||||||||||
Exercised
|
(22,959 | ) | 7.97 | 77,489 | ||||||||||||
Expired
|
(1,013 | ) | 7.88 | |||||||||||||
Forfeited
|
(2 | ) | 7.88 | |||||||||||||
Outstanding at December 31, 2009
|
329,243 | $ | 16.04 | $ | 222,607 | 1.6 | ||||||||||
Exercisable at December 31, 2009
|
329,243 | $ | 16.04 | $ | 222,607 | 1.6 |
Number Outstanding |
Weighted Average
|
Weighted Average
|
|||||||
December 31, 2010 |
Remaining Contractual Life
|
Exercise Price
|
|||||||
26,931 |
1 years
|
$ | 7.92 | ||||||
18,947 |
2 years
|
11.56 | |||||||
62,880 |
3 years
|
12.93 | |||||||
87,955 |
4 years
|
15.89 | |||||||
80,813 |
5 years
|
22.29 | |||||||
21,711 |
7 years
|
27.70 | |||||||
299,237 | 16.86 |
Restricted Stock
|
Restricted Stock Units
|
|||||||||||||||
Number of
Shares
|
Weighted
Average Grant
Date Fair Value
|
Number of
Units
|
Fair Value
|
|||||||||||||
Nonvested at January 1, 2010
|
5,360 | $ | 11.90 | - | $ | - | ||||||||||
Granted
|
- | - | 3,739 | 13.00 | ||||||||||||
Vested
|
(2,640 | ) | 11.90 | - | - | |||||||||||
Nonvested at December 31, 2010
|
2,720 | $ | 11.90 | 3,739 | $ | 16.10 |
Actual
|
Required for Capital
Adequacy Purposes
|
To be Considered
Well Capitalized
Under Prompt
Corrective Action
|
||||||||||||||||||||||
At December 31, 2010
|
||||||||||||||||||||||||
Total Capital (to risk weighted assets)
|
||||||||||||||||||||||||
The Company
|
$ | 90,343 | 12.94 | % | $ | 55,857 | 8.00 | % | ||||||||||||||||
The Bank
|
$ | 88,021 | 12.65 | % | $ | 55,633 | 8.00 | % | $ | 69,542 | 10.00 | % | ||||||||||||
Tier 1 Capital (to risk weighted assets)
|
||||||||||||||||||||||||
The Company
|
$ | 82,694 | 11.84 | % | $ | 27,928 | 4.00 | % | ||||||||||||||||
The Bank
|
$ | 80,372 | 11.56 | % | $ | 27,817 | 4.00 | % | $ | 41,725 | 6.00 | % | ||||||||||||
Tier 1 Capital (to average assets)
|
||||||||||||||||||||||||
The Company
|
$ | 82,694 | 9.44 | % | $ | 35,030 | 4.00 | % | ||||||||||||||||
The Bank
|
$ | 80,372 | 9.20 | % | $ | 34,928 | 4.00 | % | $ | 43,661 | 5.00 | % | ||||||||||||
At December 31, 2009
|
||||||||||||||||||||||||
Total Capital (to risk weighted assets)
|
||||||||||||||||||||||||
The Company
|
$ | 87,416 | 13.46 | % | $ | 51,973 | 8.00 | % | ||||||||||||||||
The Bank
|
$ | 85,028 | 13.14 | % | $ | 51,787 | 8.00 | % | $ | 64,734 | 10.00 | % | ||||||||||||
Tier 1 Capital (to risk weighted assets)
|
||||||||||||||||||||||||
The Company
|
$ | 79,905 | 12.30 | % | $ | 25,987 | 4.00 | % | ||||||||||||||||
The Bank
|
$ | 77,517 | 11.97 | % | $ | 25,894 | 4.00 | % | $ | 38,840 | 6.00 | % | ||||||||||||
Tier 1 Capital (to average assets)
|
||||||||||||||||||||||||
The Company
|
$ | 79,905 | 10.03 | % | $ | 31,880 | 4.00 | % | ||||||||||||||||
The Bank
|
$ | 77,517 | 9.74 | % | $ | 31,840 | 4.00 | % | $ | 39,800 | 5.00 | % |
December 31, 2010
|
December 31, 2009
|
|||||||||||||||
Estimated
|
Estimated
|
|||||||||||||||
Carrying
|
Fair
|
Carrying
|
Fair
|
|||||||||||||
Amount
|
Value
|
Amount
|
Value
|
|||||||||||||
Assets
|
||||||||||||||||
Cash and cash equivalents
|
$ | 9,823,436 | $ | 9,823,436 | $ | 11,247,967 | $ | 11,247,967 | ||||||||
Investment securities and stock in FHLB and FRB
|
168,250,141 | 167,654,621 | 151,149,412 | 148,049,000 | ||||||||||||
Loans receivable, net
|
654,449,936 | 662,813,000 | 616,592,976 | 610,998,000 | ||||||||||||
Foreclosed real estate
|
10,469,302 | 10,469,302 | 922,934 | 922,934 | ||||||||||||
Liabilities
|
||||||||||||||||
Savings, NOW, and money market accounts
|
286,383,452 | 286,383,453 | 259,160,873 | 246,139,000 | ||||||||||||
Time certificates
|
438,198,874 | 444,601,000 | 381,257,916 | 384,848,000 | ||||||||||||
Long-term debt and other borrowed funds
|
71,440,466 | 69,517,422 | 88,750,160 | 83,381,000 | ||||||||||||
Guaranteed preferred beneficial interest in junior subordinated securities
|
12,000,000 | 2,400,000 | 12,000,000 | 2,400,000 |
December 31,
|
||||||||
2010
|
2009
|
|||||||
Assets
|
||||||||
Cash - noninterest-bearing
|
$ | 583,660 | $ | 863,305 | ||||
Investment in wholly owned subsidiaries
|
81,155,647 | 78,173,565 | ||||||
Other assets
|
2,417,496 | 1,955,554 | ||||||
Total Assets
|
$ | 84,156,803 | $ | 80,992,424 | ||||
Liabilities and Stockholders' Equity
|
||||||||
Current liabilities
|
$ | 679,876 | $ | 430,575 | ||||
Guaranteed preferred beneficial interest in junior subordinated debentures
|
12,372,000 | 12,372,000 | ||||||
Total Liabilities
|
13,051,876 | 12,802,575 | ||||||
Stockholders' Equity
|
||||||||
Preferred Stock - Series A
|
15,540,000 | 15,540,000 | ||||||
Preferred Stock - Series B
|
777,000 | 777,000 | ||||||
Common stock
|
30,026 | 29,760 | ||||||
Additional paid in capital
|
16,962,460 | 16,754,627 | ||||||
Retained earnings
|
37,892,557 | 35,193,958 | ||||||
Accumulated other comprehensive income
|
411,188 | 284,474 | ||||||
Unearned ESOP shares
|
(508,304 | ) | (389,970 | ) | ||||
Total Stockholders’ Equity
|
71,104,927 | 68,189,849 | ||||||
Total Liabilities and Stockholders’ Equity
|
$ | 84,156,803 | $ | 80,992,424 |
Years Ended December 31,
|
||||||||
2010
|
2009
|
|||||||
Interest and Dividend Income
|
||||||||
Dividends from subsidiary
|
$ | 2,500,000 | $ | 2,950,000 | ||||
Interest income
|
29,068 | 29,284 | ||||||
Interest expense
|
321,942 | 402,914 | ||||||
Net Interest Income
|
2,207,126 | 2,576,370 | ||||||
Loss on sale of investment securities
|
- | (11,916 | ) | |||||
Miscellaneous expenses
|
(600,562 | ) | (513,795 | ) | ||||
Income before income taxes and equity in undistributed net income of subsidiary
|
1,606,564 | 2,050,659 | ||||||
Federal and state income tax benefit
|
303,768 | 305,775 | ||||||
Equity in undistributed net income of subsidiary
|
2,855,369 | 510,656 | ||||||
Net Income
|
$ | 4,765,701 | $ | 2,867,090 | ||||
Condensed Statements of Cash Flows
|
||||||||
Years Ended December 31,
|
||||||||
2010 | 2009 | |||||||
Cash Flows from Operating Activities
|
||||||||
Net income
|
$ | 4,765,701 | $ | 2,867,090 | ||||
Adjustments to reconcile net income to net cash provided by operating activities
|
||||||||
Equity in undistributed earnings of subsidiary
|
(2,855,369 | ) | (510,656 | ) | ||||
Loss on sale of investment security
|
- | 11,916 | ||||||
Increase in other assets
|
(401,159 | ) | (252,150 | ) | ||||
Deferred income tax benefit
|
(60,782 | ) | (68,991 | ) | ||||
Increase in current liabilities
|
249,301 | 28,970 | ||||||
Net Cash Provided by Operating Activities
|
1,697,692 | 2,076,179 | ||||||
Cash Flows from Investing Activities
|
||||||||
Redemption of investment securities available for sale
|
- | 28,785 | ||||||
Net Cash Provided by Investing Activities
|
- | 28,785 | ||||||
Cash Flows from Financing Activities
|
||||||||
Dividends paid
|
(2,043,117 | ) | (1,953,851 | ) | ||||
Exercise of stock options
|
147,799 | 122,308 | ||||||
Issuance of stock based compensation
|
- | 99,976 | ||||||
Excess tax benefits on stock based compensation
|
4,558 | 14,947 | ||||||
Net change in ESOP loan
|
(62,577 | ) | (129,670 | ) | ||||
Redemption of common stock
|
(24,000 | ) | - | |||||
Net Cash Used in Financing Activities
|
(1,977,337 | ) | (1,846,290 | ) | ||||
(Decrease) Increase in Cash
|
(279,645 | ) | 258,674 | |||||
Cash at Beginning of Year
|
863,305 | 604,631 | ||||||
Cash at End of Year
|
$ | 583,660 | $ | 863,305 |
2010
|
||||||||||||||||
Fourth
|
Third
|
Second
|
First
|
|||||||||||||
Quarter
|
Quarter
|
Quarter
|
Quarter
|
|||||||||||||
Interest and dividend income
|
$ | 9,874,883 | $ | 9,805,485 | $ | 9,893,082 | $ | 9,963,537 | ||||||||
Interest expense
|
3,398,511 | 3,372,947 | 3,329,856 | 3,478,901 | ||||||||||||
Net interest income
|
6,476,372 | 6,432,538 | 6,563,226 | 6,484,636 | ||||||||||||
Provision for loan loss
|
1,149,441 | 1,121,203 | 804,430 | 858,374 | ||||||||||||
Net interest income after provision
|
5,326,931 | 5,311,335 | 5,758,796 | 5,626,262 | ||||||||||||
Noninterest income
|
1,079,848 | 994,759 | 744,344 | 761,225 | ||||||||||||
Noninterest expense
|
4,619,716 | 4,437,425 | 4,899,633 | 4,238,409 | ||||||||||||
Income before income taxes
|
1,787,063 | 1,868,669 | 1,603,507 | 2,149,078 | ||||||||||||
Provision for income taxes
|
621,204 | 669,335 | 567,423 | 784,654 | ||||||||||||
Net income
|
$ | 1,165,859 | $ | 1,199,334 | $ | 1,036,084 | $ | 1,364,424 | ||||||||
Earnings per common share1
|
||||||||||||||||
Basic
|
$ | 0.32 | $ | 0.33 | $ | 0.28 | $ | 0.39 | ||||||||
Diluted
|
$ | 0.32 | $ | 0.33 | $ | 0.27 | $ | 0.38 | ||||||||
2009 | ||||||||||||||||
Fourth
|
Third
|
Second
|
First
|
|||||||||||||
Quarter
|
Quarter
|
Quarter
|
Quarter
|
|||||||||||||
Interest and dividend income
|
$ | 9,713,417 | $ | 9,620,495 | $ | 9,350,365 | $ | 9,203,076 | ||||||||
Interest expense
|
3,648,007 | 4,078,019 | 4,180,031 | 4,260,071 | ||||||||||||
Net interest income
|
6,065,410 | 5,542,476 | 5,170,334 | 4,943,005 | ||||||||||||
Provision for loan loss
|
1,494,680 | 515,555 | 929,488 | 532,885 | ||||||||||||
Net interest income after provision
|
4,570,730 | 5,026,921 | 4,240,846 | 4,410,120 | ||||||||||||
Noninterest income
|
773,244 | 668,347 | 781,771 | 586,457 | ||||||||||||
Noninterest expense
|
4,219,791 | 4,267,052 | 4,278,673 | 3,814,162 | ||||||||||||
Income before income taxes
|
1,124,183 | 1,428,216 | 743,944 | 1,182,415 | ||||||||||||
Provision for income taxes
|
416,723 | 560,640 | 221,730 | 412,575 | ||||||||||||
Net income
|
$ | 707,460 | $ | 867,576 | $ | 522,214 | $ | 769,840 | ||||||||
Earnings per common share1
|
||||||||||||||||
Basic
|
$ | 0.17 | $ | 0.22 | $ | 0.10 | $ | 0.19 | ||||||||
Diluted
|
$ | 0.17 | $ | 0.22 | $ | 0.10 | $ | 0.19 |
Percentage
|
State of
|
||||
Subsidiary
|
Owned
|
Incorporation
|
|||
Community Bank of Tri-County
|
100 | % |
Maryland
|
||
Tri-County Capital Trust I
|
100 | % |
Delaware
|
||
Tri-County Capital Trust II
|
100 | % |
Delaware
|
||
Subsidiaries of Community Bank of Tri-County
|
|||||
Community Mortgage Corporation of Tri-County
|
100 | % |
Maryland
|
/s/ Stegman & Company
|
|
Baltimore, Maryland
|
|
March 7, 2011
|
/s/ Michael L. Middleton
|
|
Michael L. Middleton
|
|
President and Chief Executive Officer
|
|
(Principal Executive Officer)
|
/s/ William J. Pasenelli
|
|
William J. Pasenelli
|
|
Executive Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
|
By:
|
/s/ Michael L. Middleton
|
|
Name: Michael L. Middleton
|
||
Title: President and Chief Executive Officer
|
||
By:
|
/s/ William J. Pasenelli
|
|
Name: William J. Pasenelli
|
||
Title: Executive Vice President and Chief Financial Officer
|
||
Date: March 4, 2011
|
|
(a)
|
SEO compensation plans that could lead SEOs to take unnecessary and excessive risks that could threaten the value of Tri-County Financial Corporation;
|
|
(b)
|
Employee compensation plans that unnecessarily expose Tri-County Financial Corporation to risks; and
|
|
(c)
|
Employee compensation plans that could encourage the manipulation of reported earnings of Tri-County Financial Corporation to enhance the compensation of an employee;
|
Date: March 4, 2011
|
/s/ Michael L. Middleton
|
Michael L. Middleton
|
|
President and Chief Executive Officer
|
|
(a)
|
SEO compensation plans that could lead SEOs to take unnecessary and excessive risks that could threaten the value of Tri-County Financial Corporation;
|
|
(b)
|
Employee compensation plans that unnecessarily expose Tri-County Financial Corporation to risks; and
|
|
(c)
|
Employee compensation plans that could encourage the manipulation of reported earnings of Tri-County Financial Corporation to enhance the compensation of an employee;
|
Date: March 4, 2011
|
/s/ William J. Pasenelli
|
William J. Pasenelli
|
|
Executive Vice President and Chief Financial Officer
|