Kansas
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6022
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48-1070996
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(State or other jurisdiction of incorporation or organization)
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(Primary Standard Industrial
Classification Code Number)
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(I.R.S. Employer
Identification No.)
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Agent for Service:
Robert D. Regnier
President and Chief Executive Officer
Blue Valley Ban Corp.
11935 Riley
Overland Park, Kansas 66225-6128
(913) 338-1000
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Copies of Communications to:
Steven F. Carman, Esq.
Husch Blackwell LLP
4801 Main Street, Suite 1000
Kansas City, Missouri 64112
(816) 983-8000
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Title of Each Class
of Securities to
be Registered
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Amount to be
Registered
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Proposed Offering Price Per Share
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Proposed Aggregate Offering Price
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Amount of
Registration Fee
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Nontransferable common
stock subscription rights
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[ ] | ----- | ------ | ----- (1) |
Common Stock, par value $1.00 per share | [ ] | $ [ ] |
$10,000,000 (2)
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$1,288.00 |
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(1)
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The nontransferable subscription rights are being issued without consideration. Pursuant to Rule 457(g) under the Securities Act of 1933, as amended, no separate registration fee is required because the rights are being registered in the same registration statement as the securities to be offered pursuant thereto.
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(2)
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Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended. In no event will the aggregate maximum offering price of all securities issued pursuant to this registration statement exceed $10,000,000.
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Per Share
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Total
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Minimum
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Maximum
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Minimum
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Maximum
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|||||
Subscription Price
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$
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$
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$
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$
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Estimated Expenses
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$
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$
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$
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$
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Proceeds to us
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$
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$
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$
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$
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About This Prospectus
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ii
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Cautionary Note regarding Forward-Looking Statements
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ii
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Questions and Answers About The Rights Offering
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iv
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Prospectus Summary
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1
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Use of Proceeds
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5
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Risk Factors
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6
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The Rights Offering
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14
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The Company
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18
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Capitalization
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35
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Selected Consolidated Financial Data
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36
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Market Price and Dividends on Our Common Stock
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38
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Dividends
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38
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Dilution
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38
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Material U.S. Federal Income Tax Consequences
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39
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Plan of Distribution
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41
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Description of Securities To Be Registered
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42
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Management’s Discussion and Analysis Of Financial Condition and Results of Operations
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47
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Management
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79
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Beneficial Ownership Table
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82
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Certain Relationships and Related Party Transactions
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84
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Indemnification of Directors, Officers, and Employees
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84
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Executive Compensation
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85
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Legal Matters
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89
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Experts
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89
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Index to Financial Statements
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F-1
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•
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general economic conditions, either nationally or locally in some or all of the areas in which we do business, or conditions in the securities or real estate markets or the banking industry may be less favorable than we currently anticipate;
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•
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the timing and occurrence or non-occurrence of events may be subject to circumstances beyond our control;
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•
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there may be increases in competitive pressure among financial institutions or from non-financial institutions;
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•
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changes in the interest rate environment could adversely affect our results of operations and financial condition;
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•
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changes in accounting principles, policies or guidelines;
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•
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legislative or regulatory changes may adversely affect our business;
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•
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changes in management’s estimate of the adequacy of the allowance for loan losses;
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•
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litigation or matters before regulatory agencies, whether currently existing or commencing in the future, may delay the occurrence or non-occurrence of events longer than we anticipate;
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•
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changes in deposit flows, loan demand or real estate values may adversely affect our business;
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•
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the Company’s non-payment of dividends and accrued interest on its trust preferred securities or fixed rate cumulative preferred stock;
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•
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technological changes may be more difficult or expensive than we anticipate; and
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•
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success or consumption of new business initiatives may be more difficult or expensive than we anticipate.
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Q:
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What is the rights offering?
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A:
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The rights offering is a distribution to holders of our common stock, at no charge, of nontransferable rights to purchase shares of our common stock based on your ownership of common stock as of ______, the record date. You may purchase one whole share of our common stock at $____ per share for every ____ rights granted to you.
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Q:
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What is a subscription right?
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A:
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A subscription right is the right to purchase a portion of a share of our common stock. Because we have 2,938,871 shares of common stock outstanding and we are targeting the sale of a maximum of _______ shares in connection with this rights offering, each subscription right carries with it a basic subscription right to purchase _____ of a share of our common stock. Each subscription right also includes an oversubscription right to purchase additional shares of our common stock.
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Q:
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Why do I need to exercise _____ rights to purchase one share of common stock?
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A:
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As of June 30, 2013 we had outstanding 2,938,871 shares of our common stock. By granting one right for each share of common stock, we have granted an aggregate of 2,938,871 rights. As a result, because we are targeting the sale of a maximum of ______ shares of common stock in this rights offering, you must exercise _____ rights to acquire one share.
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Q:
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What is the basic subscription right?
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A:
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Each whole subscription right entitles you to purchase _____ of a share of our common stock at the subscription price of $____ per share. We have granted to you, as a stockholder of record on the record date, a subscription right for each share of our common stock you owned at that time. Fractional shares of our common stock resulting from the exercise of the basic subscription right will be eliminated by rounding down to the nearest whole share, with the total subscription payment being adjusted accordingly. For example, if you owned 1,000 shares of our common stock on the record date, your basic subscription right would permit the purchase of ___ shares (1,000 purchase rights / __________, with fractional shares rounded down to the nearest whole number). You may exercise all or a portion of your basic subscription right, or you may choose not to exercise any subscription rights at all. However, if you exercise less than your full basic subscription right, you will not be entitled to purchase shares under your oversubscription right.
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If you hold your shares in the name of a custodian bank, broker, dealer or other nominee, you will not receive a rights certificate. Instead, the Depository Trust Company, or DTC, will issue the appropriate number of subscription rights to your nominee record holder based on the shares of our common stock that you own at the record date. If you are not contacted by your nominee, you should contact your nominee as soon as possible.
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Q:
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What is the oversubscription right?
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A:
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If any holders of subscription rights do not fully exercise their basic subscription rights as of the expiration time of the rights offering, we will permit stockholders who do fully exercise their basic subscription rights to subscribe for additional shares of our common stock at the same subscription price per share, on the pro rata basis described below, rounded down to the nearest whole share number. This oversubscription right will be available only to stockholders who exercise their basic subscription rights in full. We may elect, in our sole discretion, to honor some or all of the oversubscription rights.
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If oversubscription requests exceed the number of shares of common stock we elect to sell, we will allocate the available shares of common stock among stockholders who oversubscribed by multiplying the number of shares requested by each stockholder through the exercise of their oversubscription rights by a fraction that equals (x) the number of shares we elect to issue through oversubscription rights divided by (y) the total number of shares requested by all subscribers through the exercise of their oversubscription rights. As described above for the basic subscription right, we will not issue fractional shares through the exercise of oversubscription rights.
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Q:
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How many shares may I purchase if I exercise my subscription rights?
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A:
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The number of shares of common stock you can purchase under your basic subscription rights will depend on the number of subscription rights you receive and whether we elect to sell common shares pursuant to the oversubscription right. You will receive one basic subscription right for each share of our common stock you hold on the record date. Each basic subscription right entitles you to purchase ____ of a share of our common stock at the subscription price of $____ per share.
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Upon exercising your oversubscription rights, you may request to subscribe for additional shares on your subscription rights certificate. However, the actual number of shares for which you will be entitled to subscribe under your oversubscription rights will not be determinable until after the expiration time of the rights offering and the pro rata allocation.
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Q:
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What if there is an insufficient number of shares to satisfy the oversubscription requests?
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A:
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If there is an insufficient number of shares to fully satisfy the oversubscription requests of rightsholders, each subscription rightsholder who exercised his or her oversubscription right will receive a pro rata number of the shares we elect to sell, rounded down to the nearest whole share number, as described above. Any excess subscription payments will be returned, without interest or deduction, promptly after the expiration of this rights offering.
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Q:
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Am I required to participate in the rights offering?
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A:
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No.
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Q:
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Why are we conducting the rights offering?
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A:
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We are conducting the rights offering to improve our earnings by eliminating double interest and compounding interest. We will achieve this goal by bringing current all previously accrued and unpaid dividends on our Subordinated Debentures, with any additional proceeds to be used for general corporate purposes. Our Board of Directors has chosen to raise capital through a rights offering to give our stockholders the opportunity to limit ownership dilution from a capital raise by allowing our current stockholders to purchase additional shares of our common stock. We cannot determine the amount of dilution that a stockholder will experience or whether the rights offering will be successful. See the section of this prospectus captioned “Use of Proceeds,” for more details.
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Q:
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Will the Company be issuing fractional shares of common stock?
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A:
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No. You may not purchase fractional shares of common stock pursuant to the exercise of subscription rights. We
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will accept any subscription indicating a purchase of fractional shares by rounding down to the nearest whole share number and promptly refunding without interest any payment received for a fractional share. | |||
Q:
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If I wish to exercise my rights, do I have to exercise all of my rights?
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A:
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No. You may exercise some or all of your rights. However, if you subscribe for fewer than all the shares represented by your basic subscription rights, your remaining rights are non-transferable and will expire at the expiration time of the rights offering. You may not sell your remaining rights. In addition, you may only participate in the oversubscription portion of this rights offering if you exercise your basic subscription rights in full.
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Q:
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How long will the rights offering remain open?
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A:
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The rights offering will commence on ______________, 2013. The rights offering will remain open for [16] days after commencement, and the rights will expire at 5:00 p.m., Eastern Time, on _______, 2013 unless we extend the rights offering. We reserve the right to extend the rights offering at our discretion for a period not to exceed 45 additional days beyond ______, 2013, in which event the term “expiration time” will mean the latest date and time to which the rights offering has been extended. We will make a public announcement of any extension by issuing a press release prior to 9:00 a.m., Eastern Time, on the next business day after the previously scheduled expiration time. In addition, if the commencement of the rights offering is delayed, the expiration time of the rights offering will be similarly delayed. In that event, we will notify you by issuing a press release.
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Q:
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When must I exercise my oversubscription rights?
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A:
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You must exercise your oversubscription rights when you exercise your basic subscription rights in full. However, the number of shares for which you will be able to purchase by exercise of your oversubscription rights cannot be determined until after the expiration time of the rights offering period.
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Q:
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What happens if I choose not to exercise my subscription rights?
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A:
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You will retain your current number of shares of our common stock held by you even if you do not exercise your subscription rights. If you choose not to exercise your subscription rights, upon completion of the offering the percentage of our capital stock held by you will decrease, however, the magnitude of the reduction will depend upon the extent to which other rightsholders subscribe in the rights offering.
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Q:
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Will I be charged a sales commission or a fee by the Company if I exercise my subscription rights?
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A:
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No. We will not charge a brokerage commission or a fee to rightsholders for exercising their subscription rights. However, if you exercise your subscription rights through a broker or nominee, then you will be responsible for any transaction fees charged by your broker or nominee.
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Q:
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What is the Board of Directors’ recommendation regarding whether I should exercise my rights in the rights offering?
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A:
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Our Board of Directors is not making any recommendation as to whether you should exercise your subscription rights. You are urged to make your decision based on your own assessment of our business and the rights offering.
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Q:
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Are there any conditions to completing the rights offering?
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A:
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Yes. We must sell the minimum offering amount of at least $5.0 million (_______ shares) of common stock for the rights offering to be completed.
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Q:
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If the rights offering is not completed, will my subscription payment be refunded to me?
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A:
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Yes. The subscription agent will hold all funds it receives in escrow until completion of the rights offering. If the rights offering is not completed, the subscription agent will return promptly, without interest, all subscription payments. We reserve the right to terminate the offering at any time if, due to market conditions or otherwise, the Board of Directors deems it advisable not to proceed with the rights offering.
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Q:
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Will our directors and executive officers participate in the rights offering?
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A:
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We expect that certain of our directors and executive officers, and certain of the directors of our primary wholly-owned subsidiary Bank of Blue Valley (the “Bank”), together with their affiliates, will participate in the rights offering, although they are not obligated to do so. We also expect that certain of our officers and directors will, if necessary, subscribe for additional shares of common stock in the aggregate amount required to raise the minimum gross proceeds. The purchase price paid by them will be the same paid by all other persons who purchase shares of our common stock in the rights offering.
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Q:
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How was the subscription price established?
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A:
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In determining the subscription price, our Board of Directors considered a number of factors, including: a fairness opinion issued by our financial advisor, Keefe, Bruyette & Woods, Inc. (“KBW”), the price at which our stockholders might be willing to participate in the rights offering, historical and current trading prices for our common stock, the need for liquidity and capital, potential market conditions, and the desire to provide an opportunity to our stockholders to participate in the rights offering on a pro rata basis. In conjunction with its review of these factors, our Board of Directors also reviewed our history and prospects, including our past and present earnings, our prospects for future earnings, our current financial condition and regulatory status. The subscription price is not necessarily related to our book value, net worth or any other established criteria of value and may or may not be considered the fair value of our common stock. You should not assume or expect that, after this offering, our shares of common stock will trade at or above the $_____ per share purchase price.
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Q:
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What is the role of KBW in the rights offering?
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A:
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We have entered into an agreement with KBW pursuant to which they are acting as our financial and marketing advisor in connection with the rights offering and providing an opinion as to the fairness, from a financial point of view, of the rights offering. We have agreed to pay certain fees to, and expenses of, KBW including $200,000 for the fairness opinion.
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Q:
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Is exercising my subscription rights risky?
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A:
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Yes. Investing in our securities involves risks. Exercising your rights should be considered as carefully as any other equity investment. Some of the risks include the following:
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•
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You may not revoke your subscription rights once you exercise them and so you could be committed to buying shares above the prevailing market value of our common stock.
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•
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If you do not act promptly and follow subscription instructions, then we may reject your exercise of subscription rights.
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•
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For a more complete discussion of the risks associated with an investment in our common stock, you should carefully review the section captioned “Risk Factors”.
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Q:
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May I transfer my subscription rights if I do not want to purchase any shares?
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A:
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No. Your subscription rights are not transferable.
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Q:
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Is there a minimum subscription required to complete the rights offering?
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A:
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There is no individual minimum purchase requirement in the rights offering. However, we will not complete the rights offering unless we receive aggregate subscriptions of at least $5.0 million (__________ shares) of common stock in the rights offering.
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Q:
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Is there a limit to how much common stock will be issued in the rights offering?
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A:
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We will accept subscriptions for a maximum of $10.0 million (_______ shares) of common stock in the rights offering.
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Q:
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How many shares will be outstanding after the rights offering?
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A:
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There were 2,938,871 shares of our common stock outstanding as of June 30, 2013. If the maximum number of shares are sold in the rights offering we expect there will be __________ shares of our common stock outstanding. If the minimum number of shares are sold in the rights offering, we expect there will be _______ shares of our common stock outstanding.
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Q:
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After I exercise my subscription rights, can I change my mind and cancel my purchase?
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A:
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No. All exercises of subscription rights are irrevocable.
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Q:
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What are the federal income tax consequences of receiving or exercising my subscription rights as a holder of common stock?
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A:
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A holder of common stock will not recognize income or loss for federal income tax purposes in connection with the receipt or exercise of subscription rights in the rights offering. We urge you to consult your own tax adviser with respect to the particular tax consequences of the rights offering or any related share purchases by you. See section captioned, “Material U.S. Federal Income Tax Consequences,” for more details.
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Q:
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To whom should I send my forms and payment?
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A:
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If your shares are held in the name of a broker, or other nominee holder, then you should send your subscription documents, subscription rights certificate, notices of guaranteed delivery, and subscription payment to that record holder. If you are the record holder, then you should send your subscription documents and subscription payment to Computershare, Inc. at:
By Mail, By Hand, or By Overnight Courier
American Stock Transfer & Trust Company, LLC
6201 15th Avenue
Brooklyn, NY 11219
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You are solely responsible for completing delivery to the subscription agent of your subscription documents, and subscription payment. We urge you to allow sufficient time for delivery of your subscription documents and subscription payment to the subscription agent so that they are received by the subscription agent by 5:00 p.m., Eastern Time, on _________, 2013.
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If you send a payment that is insufficient to purchase the number of shares you requested, or if the number of shares you requested is not specified in the forms, the payment received will be applied to exercise your subscription rights to the fullest extent possible based on the amount of the payment received, subject to our decision to sell shares under the oversubscription right and the elimination of fractional shares. Any excess subscription payments received by the subscription agent will be returned, without interest, as soon as practicable following the expiration of the rights offering.
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Q:
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What form of payment is required to purchase the shares of our common stock?
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A:
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As described in the subscription rights certificate, payments submitted to the subscription agent must be made in full United States currency by:
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•
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personal or certified check to American Stock Transfer & Trust Company, LLC, drawn upon a United States bank;
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•
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postal, telegraphic or express money order payable to American Stock Transfer & Trust Company, LLC; or
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•
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wire transfer of immediately available funds to accounts maintained by American Stock Transfer & Trust Company, LLC
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Q:
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What should I do if I want to participate in the rights offering but my shares are held in the name of my broker, custodian bank, or other nominee?
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A:
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If you hold shares of our common stock through a broker, custodian bank, or other nominee, then we will ask your broker, custodian bank, or other nominee to notify you of the rights offering. If you wish to exercise your subscription rights, then you will need to have your broker, custodian bank, or other nominee act for you.
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Q:
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When will I receive my new shares?
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A:
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If you purchase stock in the rights offering by submitting a subscription rights certificate and payment, we will mail you a stock certificate representing your new shares as soon as practicable after the expiration of the rights offering; however, we will not be able to begin calculations for any oversubscription pro rata allocations and adjustments until [three] days after the expiration time of the rights offering, which is the latest date for our stockholders to deliver the subscription rights certificate according to the guaranteed delivery procedures. If your shares are held by your nominee, and you participate in the rights offering, you will not receive a stock certificate for your new shares. Your nominee will be credited with the shares of common stock you purchase in the rights offering as soon as practicable after the expiration of the rights offering.
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Q:
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What should I do if I have other questions?
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A:
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If you have questions or need assistance about the procedure for exercising your rights, including the procedure if you have lost your rights certificate, please contact, American Stock Transfer & Trust Company, LLC, which is acting as our subscription agent and transfer agent, at:
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You may also contact Bob Regnier, our President and Chief Executive Officer, at (913) 234-2240 or Mark Fortino our Chief Financial Officer, at (913) 234-2345 from 7:00 a.m. to 6:00 p.m., Central Time, Monday through Friday, if you have any questions.
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PROSPECTUS SUMMARY
This summary highlights information contained elsewhere in this prospectus or incorporated herein. Because this is a summary, it does not contain all the information that may be important to you. For a more complete understanding, you should carefully read the more detailed information set out in this prospectus, especially the “Risk Factors” section, as well as the financial statements and the related notes to those statements included elsewhere in this prospectus.
The Company
Blue Valley, a Kansas corporation, is a bank holding company organized in 1989. The Bank, the Company’s primary wholly-owned subsidiary, was also organized in 1989 to provide banking services to closely-held businesses and their owners, professionals and residents in Johnson County, Kansas, a high growth, demographically attractive area within the Kansas City, Missouri — Kansas Metropolitan Statistical Area (the “Kansas City MSA”). The focus of Blue Valley has been to take advantage of the current and anticipated growth in our market area as well as to serve the needs of small and mid-sized commercial customers. We believe that these customers are underserved as a result of banking consolidation in the industry generally and within our market specifically. We are an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012, or JOBS Act and, as such, may elect to comply with certain reduced public company reporting requirements for future filings. We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.0 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700 million as of the prior June 30th, or (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.
The Bank operates a total of five banking center locations in Johnson County, Kansas, including our main office, which includes a lobby banking center in Overland Park, as well as full-service offices in Leawood, Lenexa, Olathe, and Shawnee, Kansas.
The Company’s lending activities are focused on commercial, commercial real estate, construction, home equity and residential real estate lending. In addition, the Bank infrequently engages in lease financing and provides consumer lending. The Company strives to identify, develop and maintain diversified lines of business that provide acceptable risk-adjusted returns.
The Company seeks to develop lines of business that diversify the Bank’s revenue sources, increase the Bank’s non-interest income and offer additional value-added services to the Bank’s customers. We develop these new or existing lines of business while monitoring related risk factors. In addition to fees generated in conjunction with lending activities, the Bank derives non-interest income by providing mortgage origination, deposit and cash management services, as well as trust and investment brokerage services.
In addition to the Bank, the Company has two wholly-owned subsidiaries, BVBC Capital Trust II and BVBC Capital Trust III, which issued the Subordinated Debentures.
We have had a history of losses since 2008 and the book valud of our common stock has decreased from $19.97 on December 31, 2008 to $5.42 on June 30, 2012.
On December 5, 2008, we issued and sold 21,750 shares of Fixed Rate Cumulative Preferred Stock, along with a ten year warrant to purchase 111,083 shares of our common stock for $29.37 per share, for a total cash price of $21.75 million. The Fixed Rate Cumulative Preferred Stock is now held by third party investors unaffiliated with the U.S. government and, except for certain certification and disclosure requirements, we are no longer subject to the rules and regulations that were established with the Capital Purchase Program pursuant to which they were initially sold.
The Board of Directors of the Company and the Bank entered into a written agreement with the Federal Reserve Bank of Kansas City as of November 4, 2009. This agreement was a result of an examination that was completed by the regulators in May 2009, and related primarily to the Bank’s asset quality. Under the terms of the agreement, the Company and the Bank agreed, among other things, to submit an enhanced written plan to strengthen credit risk
1
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management practices and improve the Bank’s position on past due loans, classified loans, and other real estate owned; review and revise its allowance for loan and lease loss methodology and maintain an adequate allowance for loan loss; maintain sufficient capital at the Company and Bank level; and improve the Bank’s earnings and overall condition. The Company and Bank also agreed not to increase or guarantee any debt, purchase or redeem any shares of stock or declare or pay any dividends without prior written approval from the Federal Reserve Bank. The Company and the Bank substantially complied with all terms of the written agreement.
As a result of a November 12, 2012 regulatory examination, which noted the improved financial condition of the Company and the Bank, satisfactory risk management processes, and senior management oversight, as well as full compliance with all actionable provisions of the Written Agreement, the Federal Reserve Bank of Kansas City terminated the November 4, 2009 Written Agreement and, effective January 11, 2013, replaced it with a Memorandum of Understanding (“MOU”). The MOU’s purpose is to maintain the financial soundness of the Company and the Bank, and provides, among other things, the Company and the Bank will continue to work on improvement of asset quality, maintain an adequate allowance for loan losses, maintain adequate capital, improve earnings, and not declare or pay any dividends or increase or guarantee any debt without prior written approval from the Federal Reserve Bank and the Office of the State Banking Commissioner of Kansas (“OSBC”).
Under the MOU, prior regulatory approval is currently required before the payment of any dividends by the Bank. In prior years, the Company has relied on dividends from the Bank to assist in making debt service and dividend payments. There is no assurance that the Company will resume paying dividends on its common stock. Even if the Company resumes paying dividends, future payment of cash dividends on its common stock, if any, will be subject to the prior payment of all unpaid dividends and deferred distributions on the Fixed Rate Cumulative Preferred Stock. All dividends are declared and paid at the discretion of the Company’s Board of Directors and are dependent upon our liquidity, financial condition, results of operations, capital requirements and such other factors as our Board of Directors may deem relevant.
The Company has also agreed at the request of the Federal Reserve Bank of Kansas City to defer interest payments and not pay dividends on the Subordinated Debentures without prior regulatory approval in an effort to preserve capital. As a result, the Company has deferred the payment of quarterly interest related to the Subordinated Debentures issued by BVBC Capital Trust III since March 31, 2009 and the payment of quarterly interest related to the Subordinated Debentures issued by BVBC Capital Trust II since April 24, 2009. As of October 31, 2013, the Company has deferred 19 scheduled quarterly interest payments on the Subordinated Debentures issued by BVBC Capital Trust III and 19 scheduled quarterly interest payments on the Subordinated Debentures issued by BVBC Capital Trust II. As of June 30, 2013 and December 31, 2012, the Company had accrued $3.7 million and $3.2 million, respectively, for interest on the Subordinated Debentures.
In addition, at the request of the Federal Reserve Bank of Kansas City, the Company has deferred the payment of quarterly dividends on the Fixed Rate Cumulative Preferred Stock since May 15, 2009. The Fixed Rate Cumulative Preferred Stock carries a 5% per year cumulative preferred dividend rate, payable quarterly. The dividend rate increases to 9% beginning with the May 15, 2014 quarterly payment. Dividends compound if they accrue and are not paid. Failure by the Company to pay dividends on the Fixed Rate Cumulative Preferred Stock is not an event of default. However, a failure to pay a total of six preferred share dividends, whether or not consecutive, gives the holders of the Fixed Rate Cumulative Preferred Stock the right to elect two directors to the Company’s Board of Directors. That right continues until the Company pays all dividends in arrears. As of October 31, 2013, the Company has deferred 18 dividend payments. In 2012, the holder of the Fixed Rate Cumulative Preferred Stock elected one director to serve on the Company’s Board of Directors. As of June 30, 2013 and December 31, 2012, the Company had accrued $5.1 million and $4.5 million, respectively, for dividends and interest on the Fixed Rate Cumulative Preferred Stock. The proceeds from this rights offering will improve our earnings by eliminating double interest and compounding interest by bringing current all previously accrued and unpaid dividends on our Subordinated Debentures, with any additional proceeds to be used for general corporate purposes. See the section of this prospectus captioned “Use of Proceeds” for further details.
Our principal executive offices are located at 11935 Riley, Overland Park, Kansas 66225-6128, and our telephone number is (913) 338-1000. Our website address is http://www.bankbv.com. Information included or referred to on our website is not incorporated by reference in or otherwise a part of this prospectus.
|
|||
2 | |||
The Rights Offering
|
||||
Securities Offered By Us: | We are distributing to you, at no charge, a non-transferable subscription right for each share of our common stock that you owned as of 5:00 p.m., Eastern Time, on October 29, 2013, the record date, either as a holder of record or, in the case of shares held of record by custodian banks, brokers, dealers, or other nominees on your behalf, as a beneficial owner of such shares. If the rights offering is fully subscribed, the gross proceeds from the rights offering will be $10.0 million. | |||
Subscription Price: | $_____ per share | |||
Minimum Offering: | The rights offering is conditioned upon the receipt of minimum gross proceeds of $5.0 million. | |||
Maximum Offering: | The rights offering is subject to a limit of $10.0 million in gross proceeds, including any oversubscription rights that we, in our sole discretion, elect to honor. | |||
Common Stock to be Outstanding Immediately After This Offering: | Assuming no options are exercised prior to the expiration of the rights offering and assuming the minimum or maximum number of shares are sold in the rights offering, we expect approximately ______ or ______ shares of our common stock will be outstanding, respectively, immediately after completion of the rights offering. | |||
Record Date: | 5:00 p.m. Eastern Time on October 29, 2013. | |||
Basic Rights of Common Stockholders: | As a common stockholder, you are entitled to receive a subscription right for each whole share of our common stock you owned on the record date. For each basic subscription right you hold, you may purchase _____ shares of our common stock. | |||
Oversubscription Right:
|
In the event that you purchase all of the shares of our common stock available to you pursuant to your basic subscription rights, you may also choose to purchase a portion of any shares of our common stock that our other stockholders do not purchase through the exercise of their basic subscription rights. The number of shares of our common stock that you purchase pursuant to this oversubscription right will be determined on a pro rata basis and will be subject to our decision to honor, in our sole discretion, the oversubscription rights.
|
|||
Nontransferability: | You may not transfer your subscription rights. | |||
Irrevocability: | Once you submit a subscription, you may not revoke it. | |||
Best Efforts Offering: | We are offering the shares on a best efforts basis. This means there is no guarantee that we will be able to sell all or any of the shares offered. We intend to pay no commissions on shares we sell in this offering. However, we have reserved the right to retain brokers or sales agents to assist us in selling the shares, if we deem it necessary. | |||
No Recommendation: | Our Board of Directors is making no recommendation as to whether you should subscribe for shares pursuant to either your basic right or your oversubscription right. | |||
3
|
Board and Executive Officer Commitment:
|
We expect that certain of our directors and executive officers, and certain of the directors of the Bank, together with their affiliates, will participate in the rights offering, although they are not required to do so. The purchase price paid by them will be the same paid by all other persons who purchase shares of our common stock in the rights offering. We also expect that certain of our officers and directors will, if necessary, subscribe for additional shares of common stock in the aggregate amount required to raise the minimum gross proceeds.
|
|||
Use Of Proceeds:
|
We intend to use the first $4.1 million of net proceeds of the rights offering to bring current all previously accrued and unpaid dividends on the Subordinated Debentures. This will improve our earnings by eliminating double interest and compounding interest currently being paid on the Subordinated Debentures. We intend to use any remaining proceeds for general corporate purposes. See the section of this prospectus captioned “Use of Proceeds” for further details.
|
|||
Fees and Expenses:
|
We will pay the fees and expenses of the rights offering, including $200,000 to KBW for the fairness opinion.
|
|||
Risk Factors:
|
See the section of this prospectus captioned “Risk Factors” on page __ and other information included in this prospectus for a discussion of certain factors that you should carefully consider before making a decision to invest in our common stock.
|
|||
Expiration Date:
|
The offering will terminate on _________, 2013, unless extended by our Board of Directors for up to an additional 45 days.
|
|||
Subscription Agent and Transfer Agent:
|
We have retained American Stock Transfer & Trust Company, LLC to act as the subscription agent and information agent for the rights offering. The process for you to follow in communicating with American Stock Transfer & Trust Company, LLC is set forth in the section of this prospectus captioned “QUESTIONS AND ANSWERS ABOUT THE RIGHTS OFFERING”.
|
|||
4
|
|
·
|
Stockholder A would receive 25 additional shares pursuant to the over-subscription privilege, calculated as:
|
|
o
|
50 divided by 200 (50 plus 150) equals 0.25
|
|
o
|
100 multiplied by 0.25 equals 25
|
|
·
|
Stockholder B would receive 75 additional shares pursuant to the over-subscription privilege, calculated as:
|
|
o
|
150 divided by 200 (50 plus 150) equals 0.75
|
|
o
|
100 multiplied by 0.75 equals 75
|
|
·
|
personal or certified check to American Stock Transfer & Trust Company, LLC, drawn upon a United States bank;
|
|
·
|
postal, telegraphic or express money order payable to American Stock Transfer & Trust Company, LLC; or
|
|
·
|
wire transfer of immediately available funds to accounts maintained by American Stock Transfer & Trust Company, LLC
|
As of June 30, 2013
|
|||||
Amount
|
Percent
|
||||
(In thousands)
|
|||||
Commercial
|
$ 119,435
|
29.27%
|
|||
Commercial real estate
|
133,304
|
32.67%
|
|||
Construction
|
47,082
|
11.54%
|
|||
Home equity
|
45,412
|
11.13%
|
|||
Residential real estate
|
46,616
|
11.42%
|
|||
Lease financing
|
9,512
|
2.33%
|
|||
Consumer
|
6,704
|
1.64%
|
|||
Total loans and leases
|
408,065
|
100.00%
|
|||
Less allowance for loan losses
|
8,655
|
||||
Loans receivable, net
|
$ 399,410
|
|
·
|
Establishes a new oversight regulator, the Financial Stability Oversight Council, to monitor the financial system for systemic risk and to determine which entities pose significant risk, as well as monitor financial regulatory proposals and standards.
|
|
·
|
Centralizes responsibility for consumer financial protection by creating a new agency, the Consumer Financial Protection Bureau, with broad powers to enforce consumer protection laws and ensure that markets for consumer financial products and services are fair, transparent and competitive.
|
|
·
|
Amends Sarbanes-Oxley Act 404(b) to make permanent the temporary exemption for smaller reporting companies (filers with less than $75 million in market cap – Blue Valley Ban Corp. is a smaller reporting company) to comply with the independent auditor attestation requirement on the company’s evaluation of the effectiveness of internal controls over financial reporting.
|
|
·
|
Changes the assessment base for FDIC insurance assessments from the amount of total domestic deposits to average consolidated total assets less average tangible equity (Tier 1 Capital) and sets a target size for the Deposit Insurance Fund.
|
|
·
|
Permanently increases the FDIC deposit insurance per depositor from $100,000 to $250,000.
|
|
·
|
Repeals the federal prohibitions on the payment of interest on demand deposits, thus permitting depository institutions to pay interest on business transactions and other accounts.
|
|
·
|
Requires the Federal Reserve to issue rules to limit the amount of any debit card interchange fee that an issuer may receive or charge with respect to electronic debit card transactions to be reasonable and proportional to the cost incurred by the issuer with respect to the transaction. Cards issued by banks with less than $10 billion in assets are to be exempt from this requirement, thus Blue Valley Ban Corp. would be exempt from this requirement.
|
|
·
|
Implements corporate governance revisions for public companies, including proxy access requirements for stockholders and stockholder non-binding vote on executive compensation and “golden parachute’ payments.
|
|
·
|
Restricts the ability of banks to apply trust preferred securities toward regulatory capital requirements. However, Tier 1 Capital treatment for trust preferred securities issued before May 19, 2010 is grandfathered for bank holding companies with less than $15 billion in total assets. Blue Valley Ban Corp.’s Subordinated Debentures are grandfathered under this provision.
|
|
·
|
Mortgage reform and anti-predatory lending provision places new regulations on mortgage originators to ensure a borrower’s ability to repay and imposes new disclosure requirements and appraisal reforms.
|
|
·
|
Acquiring, directly or indirectly, ownership or control of any voting shares of another bank or bank holding company if, after the acquisition, it would own or control more than 5% of the shares of the bank or bank holding company (unless it already owns or controls the majority of the shares);
|
|
·
|
Acquiring all or substantially all of the assets of another bank or bank holding company; or
|
|
·
|
Merging or consolidating with another bank holding company.
|
|
·
|
Acquiring or retaining direct or indirect ownership or control of more than 5% of the voting shares of any company that is not a bank or bank holding company; and
|
|
·
|
Engaging, directly or indirectly, in any business other than that of banking, managing and controlling banks or furnishing services to banks and their subsidiaries.
|
|
·
|
“Well capitalized” if the institution has a total risk-based capital ratio of 10% or greater, a Tier 1 risk-based capital ratio of 6% or greater, and a leverage ratio of 5% or greater, and the institution is not subject to an order, written agreement, capital directive, or prompt corrective action directive to meet and maintain a specific capital level for any capital measure.
|
|
·
|
“Adequately capitalized” if the institution has a total risk-based capital ratio of 8% or greater, a Tier 1 risk-based capital ratio of 4% or greater, and a leverage ratio of 4% or greater.
|
|
·
|
“Undercapitalized” if the institution has a total risk-based capital ratio that is less than 8%, a Tier 1 risk-based capital ratio that is less than 4%, or a leverage ratio that is less than 4%.
|
|
·
|
“Significantly undercapitalized” if the institution has a total risk-based capital ratio that is less than 6%, a Tier 1 risk-based capital ratio that is less than 3%, or a leverage ratio that is less than 3%.
|
|
·
|
“Critically undercapitalized” if the institution has a ratio of tangible equity to total assets that is equal to or less than 2%.
|
|
·
|
Placing limits on asset growth and restrictions on activities, including the establishment of new branches;
|
|
·
|
Requiring the institution to issue additional capital stock (including additional voting stock) or to be acquired;
|
|
·
|
Restricting transactions with affiliates;
|
|
·
|
Restricting the interest rate the institution may pay on deposits;
|
|
·
|
Requiring that senior executive officers or directors be dismissed;
|
|
·
|
Requiring the institution to divest subsidiaries;
|
|
·
|
Prohibiting the payment of principal or interest on subordinated debt; and
|
|
·
|
Appointing a receiver for the institution.
|
Location
|
Year Occupied
|
Mortgage Indebtedness as of June 30, 2013
|
Occupancy
|
Overland Park Banking Center
11935 Riley
Overland Park, KS *
|
1994
|
None
|
100%
|
Olathe Banking Center
1235 E. Santa Fe
Olathe, KS **
|
2001
|
None
|
100%
|
Shawnee Banking Center
5520 Hedge Lane Terrace
Shawnee, KS **
|
2001
|
None
|
100%
|
College Boulevard Office
7900 College Boulevard
Overland Park, KS *
|
2003
|
None
|
25% by Bank
13% by Sublessor
62% Marketed for Sublease
|
Leawood Banking Center
|
2004
|
None
|
46% by Bank
|
13401 Mission Road
Leawood, KS *
|
|
51% by Sublessor
3% Marketed for Sublease
|
|
Lenexa Banking Center
9500 Lackman Road
Lenexa, KS **
|
2007
|
None
|
100%
|
As of and For the Six Months Ended June 30, 2013
|
||||||||||||
Pro Forma With Deployment of Proceeds from
|
||||||||||||
Actual
|
$5 Million
Rights Offering
|
$10 Million
Rights Offering
|
||||||||||
Selected Financial Condition Data
(at end of period)
|
||||||||||||
Total assets
|
$ | 636,776 | $ | 637,818 | $ | 637,718 | ||||||
Total liabilities
|
599,181 | 595,523 | 590,523 | |||||||||
Total stockholders’ equity
|
37,595 | 41,895 | 46,895 | |||||||||
Selected Financial Ratios and Other Data
|
||||||||||||
Net income (annualized)
|
$ | 797 | $ | 1,168 | $ | 1,168 | ||||||
Earnings per share (basic)
|
(0.10 | ) | 0.02 | 0.02 | ||||||||
Earnings per share (diluted)
|
(0.10 | ) | 0.02 | 0.02 | ||||||||
Capital Ratios (% except as otherwise noted):
|
||||||||||||
Total equity to total assets
|
5.90 | 6.57 | 7.36 | |||||||||
Total capital to risk-weighted assets ratio
|
12.67 | 13.50 | 14.47 | |||||||||
Tier 1 capital to risk-weighted assets ratio
|
10.29 | 11.12 | 12.09 | |||||||||
Tier 1 capital to average assets ratio
|
8.29 | 8.29 | 8.29 | |||||||||
Book value per share
|
$ | 5.37 | $ | 5.49 | $ | 5.74 |
As of and For the Six Months Ended
June 30,
|
As of and For the Year Ended December 31,
|
|||||||||||||||||
2013
|
2012
|
2011
|
2010
|
2009
|
2008
|
|||||||||||||
Selected Statement of Income Data
|
||||||||||||||||||
Interest income:
|
||||||||||||||||||
Interest and fees on loans
|
$ 10,485
|
$ |
22,853
|
$ |
25,277
|
$ |
28,011
|
$ |
33,996
|
$ |
41,245
|
|||||||
Federal funds sold and short-term investments
|
79
|
193
|
151
|
245
|
144
|
378
|
||||||||||||
Available-for sale securities
|
694
|
1,097
|
1,202
|
1,825
|
1,943
|
3,375
|
||||||||||||
Dividends on Federal Home Loan Bank
|
||||||||||||||||||
and Federal Reserve Bank Stock
|
124
|
240
|
225
|
222
|
211
|
265
|
||||||||||||
Total interest and dividend income
|
11,382
|
24,383
|
26,855
|
30,303
|
36,294
|
45,263
|
||||||||||||
Interest expense:
|
||||||||||||||||||
Interest-bearing demand deposits
|
$ |
160
|
$ |
700
|
$ |
1,611
|
$ |
2,343
|
$ |
2,589
|
$ |
1,394
|
||||||
Savings and money market deposit
|
||||||||||||||||||
accounts
|
138
|
291
|
346
|
438
|
490
|
`
|
2,402
|
|||||||||||
Other time deposits
|
902
|
2,487
|
3,755
|
7,746
|
10,742
|
12,139
|
||||||||||||
Funds borrowed and other interest-bearing liabilities
|
1,838
|
3,714
|
3,543
|
3,836
|
4,166
|
5,756
|
||||||||||||
Total interest expense
|
3,038
|
7,192
|
9,255
|
14,363
|
17,987
|
21,691
|
||||||||||||
Net interest income
|
8,344
|
17,191
|
17,600
|
15,940
|
18,307
|
23,572
|
||||||||||||
Provision for loan losses
|
(500
|
) |
1,200
|
3,300
|
3,095
|
21,635
|
17,025
|
|||||||||||
Net interest income (loss) after
|
|
|||||||||||||||||
provision for loan losses
|
8,844
|
15,991
|
14,300
|
12,845
|
(3,328
|
) |
6,567
|
|||||||||||
Non-interest income:
|
||||||||||||||||||
Loans held for sale fee income
|
770
|
2,447
|
2,120
|
3,506
|
2,785
|
2,136
|
||||||||||||
Service fees
|
1,696
|
3,452
|
3,220
|
3,083
|
3,250
|
3,299
|
||||||||||||
Realized gains on available-for-sale
|
||||||||||||||||||
securities
|
127
|
-
|
-
|
885
|
346
|
702
|
||||||||||||
Gain on settlement of litigation
|
-
|
-
|
-
|
-
|
-
|
1,000
|
||||||||||||
Other income
|
901
|
1,535
|
984
|
1,145
|
1,664
|
1,010
|
||||||||||||
Total non-interest income
|
3,494
|
7,434
|
6,324
|
8,619
|
8,045
|
8,147
|
||||||||||||
Non-interest expense:
|
||||||||||||||||||
Salaries and employee benefits
|
5,322
|
10,587
|
10,955
|
11,753
|
12,272
|
12,500
|
||||||||||||
Net occupancy expense
|
1,309
|
2,568
|
2,599
|
2,756
|
2,811
|
3,144
|
||||||||||||
Goodwill impairment
|
-
|
-
|
-
|
-
|
4,821
|
|||||||||||||
Foreclosed asset expense
|
2,198
|
2,647
|
5,219
|
2,708
|
3,862
|
944
|
||||||||||||
Other operating expense
|
3,114
|
7,506
|
7,851
|
8,550
|
8,896
|
7,360
|
||||||||||||
Total non-interest expense
|
11,943
|
23,308
|
26,624
|
25,767
|
27,841
|
28,769
|
||||||||||||
Income (loss) before income taxes
|
395
|
117
|
(6,000)
|
(4,303)
|
(23,124
|
) |
(14,075
|
) | ||||||||||
Provision (benefit) for income taxes
|
-
|
(150
|
) |
9,823
|
(1,561)
|
(8,514
|
) |
(3,824
|
||||||||||
Net Income
|
395
|
267
|
(15,823
|
) |
(2,742)
|
(14,610
|
) |
(10,251
|
) | |||||||||
Dividends and Accretion on Preferred Stock
|
544
|
1,106
|
1,106
|
1,105
|
1,045
|
-
|
||||||||||||
Net Income (Loss) to Common Stockholders
|
$ |
(149
|
) | $ |
$ (839
|
) | $ |
(16,929
|
) | $ |
$(3,847)
|
$ |
(15,655
|
) |
$(10,251
|
) | ||
Per Share Data
|
||||||||||||||||||
Basic earnings
|
$ |
(0.05
|
) | $ |
(0.29
|
) | $ |
(6.03
|
) | $ |
(1.38
|
) | $ |
(5.68
|
) | $ |
(4.20
|
) |
Diluted earnings
|
(0.05
|
) |
(0.29
|
) |
(6.03
|
) |
(1.38
|
) |
(5.68
|
) |
(4.20
|
) | ||||||
Dividends
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||
Book value, basic (at end of period)
|
5.42
|
6.20
|
6.60
|
12.66
|
14.09
|
19.97
|
||||||||||||
Weighted average common shares
|
||||||||||||||||||
outstanding
|
||||||||||||||||||
Basic
|
2,907,302
|
2,855,566
|
2,806,299
|
2,773,039
|
2,754,419
|
2,438,809
|
||||||||||||
Diluted
|
2,925,256
|
2,867,563
|
2,827,888
|
2,788,154
|
2,762,603
|
2,460,045
|
||||||||||||
Dividend payout ratio
|
0.00
|
% |
0.00
|
% |
0.00
|
% |
0.00
|
% |
0.00
|
% |
0.00
|
% | ||||||
Selected Financial Condition Data
|
||||||||||||||||||
(at end of period)
|
||||||||||||||||||
Total available for-sale securities
|
$ |
87,868
|
$ |
77,845
|
$ |
61,790
|
$ |
63,640
|
$ |
72,757
|
$ |
68,681
|
||||||
Total mortgage loans held for sale, fair value
|
5,956
|
7,621
|
5,686
|
8,162
|
8,752
|
8,157
|
||||||||||||
Total loans
|
408,065
|
415,671
|
435,843
|
492,454
|
554,111
|
662,401
|
||||||||||||
Total assets
|
636,776
|
657,005
|
654,452
|
723,101
|
773,967
|
815,700
|
||||||||||||
Total deposits
|
452,168
|
484,466
|
490,413
|
541,218
|
590,110
|
600,868
|
||||||||||||
Funds borrowed and other interest-bearing liabilities
|
136,080
|
122,779
|
115,806
|
118,505
|
118,208
|
135,129
|
||||||||||||
Total stockholders’ equity
|
37,594
|
39,815
|
40,455
|
57,164
|
60,603
|
76,439
|
||||||||||||
Trust assets under administration
|
148,207
|
140,976
|
129,580
|
125,702
|
105,071
|
112,688
|
||||||||||||
Selected Financial Ratios and Other Data
|
||||||||||||||||||
Performance Ratios (%):
|
||||||||||||||||||
Net Interest Margin (1)
|
2.99
|
2.92
|
2.91
|
2.23
|
2.43
|
3.20
|
||||||||||||
Non-interest income to average assets
|
1.11
|
1.14
|
0.93
|
1.09
|
0.99
|
1.04
|
||||||||||||
Non-interest expense to average assets
|
3.80
|
3.57
|
3.90
|
3.26
|
3.42
|
3.67
|
||||||||||||
Net overhead ratio (2)
|
2.68
|
2.43
|
2.97
|
2.14
|
2.40
|
2.59
|
||||||||||||
Efficiency ratio (3)
|
100.89
|
94.65
|
111.29
|
104.92
|
105.65
|
90.70
|
||||||||||||
Return on average assets (4)
|
0.13
|
0.04
|
(2.32
|
) |
(0.35
|
) |
(1.79
|
) |
(1.31
|
) | ||||||||
Return on average equity (5)
|
(1.72
|
(4.97
|
) |
(51.84
|
) |
(10.25
|
) |
(33.07
|
) |
(17.53
|
) | |||||||
Asset Quality Ratios (%):
|
||||||||||||||||||
Non-performing loans to total loans
|
1.33
|
1.16
|
2.58
|
6.16
|
6.30
|
6.54
|
||||||||||||
Allowance for possible loan losses to:
|
||||||||||||||||||
Total loans
|
2.12
|
2.18
|
3.01
|
2.99
|
3.61
|
1.87
|
||||||||||||
Non-performing loans
|
159.54
|
187.23
|
116.46
|
48.53
|
57.33
|
28.54
|
||||||||||||
Net charge-offs to average loans
|
(0.02)
|
1.24
|
1.04
|
1.61
|
2.30
|
2.16
|
||||||||||||
Non-performing loans to total assets
|
0.85
|
0.74
|
1.73
|
4.20
|
4.51
|
5.31
|
||||||||||||
Non-performing assets to total assets
|
5.25
|
5.60
|
6.20
|
6.98
|
7.02
|
5.90
|
||||||||||||
OREO to Non-performing assets
|
83.77
|
86.85
|
72.09
|
39.89
|
35.71
|
9.92
|
||||||||||||
Texas Ratio (6)
|
54.30
|
69.43
|
78.92
|
77.44
|
73.73
|
51.50
|
||||||||||||
Classified asset ratio (classified assets to Tier 1
Capital and ALLI
|
30.71
|
30.97
|
58.71
|
83.70
|
108.06
|
88.87
|
||||||||||||
Balance Sheet Ratios (%):
|
||||||||||||||||||
Loans to deposits
|
90.25
|
85.80
|
89.48
|
90.99
|
93.90
|
110.24
|
||||||||||||
Average interest-earning assets to
|
||||||||||||||||||
average interest-bearing liabilities
|
117.32
|
118.52
|
116.17
|
113.18
|
115.08
|
116.25
|
||||||||||||
Capital Ratios-Consolidated (%):
|
||||||||||||||||||
Total equity to total assets
|
5.90
|
6.06
|
6.18
|
7.91
|
7.83
|
9.37
|
||||||||||||
Total capital to risk-weighted assets ratio
|
12.68
|
12.01
|
12.08
|
12.66
|
12.54
|
13.82
|
||||||||||||
Tier 1 capital to risk-weighted assets ratio
|
10.29
|
9.70
|
9.80
|
11.39
|
11.26
|
12.57
|
||||||||||||
Tier 1 capital to average assets ratio
|
8.36
|
8.10
|
8.04
|
9.04
|
9.07
|
11.50
|
||||||||||||
Average equity to average assets ratio
|
6.19
|
6.07
|
7.97
|
7.48
|
8.47
|
7.66
|
||||||||||||
Capital Ratios-Bank (%):
|
||||||||||||||||||
Total equity to total assets
|
10.19
|
10.04
|
9.83
|
10.77
|
10.30
|
10.22
|
||||||||||||
Total capital to risk-weighted assets ratio
|
14.30
|
13.37
|
12.98
|
13.15
|
12.67
|
12.22
|
||||||||||||
Tier 1 capital to risk weighted assets ratio
|
13.04
|
12.11
|
11.72
|
11.88
|
11.39
|
10.97
|
||||||||||||
Tier 1 capital to average assets ratio
|
10.57
|
10.08
|
9.61
|
9.41
|
9.16
|
10.00
|
||||||||||||
Average equity to average assets ratio
|
10.39
|
9.91
|
11.16
|
10.01
|
10.42
|
10.74
|
||||||||||||
(1)
|
Net interest income, on a full tax-equivalent basis, divided by average-earning assets.
|
(2)
|
Non-interest expense less non-interest income divided by average total assets
|
(3)
|
Non-interest expense divided by the sum of net interest income plus non-interest income.
|
(4)
|
Net income (loss) divided by average total assets.
|
(5)
|
Net loss available to common stockholders divided by average common equity.
|
(6)
|
The sum of non-performing assets and loans plus past due loans > 90 days divided by tangible equity capital plus the allowance for loan losses (Bank ratio)
|
2013
|
2012
|
2011 |
Fiscal Quarter
|
High
|
Low
|
High
|
Low
|
High
|
Low
|
||||||||
First
|
||||||||||||||
Second | $ | 9.50 | $ | 4.50 | $ | 4.50 | $ | 4.00 | $ | 8.00 | $ | 6.50 | ||
Third | 7.90 | 7.25 | 4.50 | 3.55 | 8.00 | 5.50 | ||||||||
Fourth | NA | NA | 4.50 | 3.55 | 8.00 | 4.80 | ||||||||
NA | NA | 4.50 | 4.00 | 6.00 | 4.10 |
•
|
amend or alter the Company’s Articles of Incorporation or the Certificate of Designations for the Fixed Rate Cumulative Preferred Stock to authorize or create or increase the authorized amount of, or any issuance of, any shares of, or any securities convertible into or exchangeable or exercisable for shares of, any class or series of the Company’s capital stock ranking senior to the Fixed Rate Cumulative Preferred Stock with respect to either or both the payment of dividends and/or the distribution of assets on any liquidation, dissolution or winding up of the Company; or
|
•
|
amend, alter or repeal any provision of the Company’s Articles of Incorporation or the Certificate of Designations for the Fixed Rate Cumulative Preferred Stock in a manner that adversely affects the rights, preferences, privileges or voting powers of the Fixed Rate Cumulative Preferred Stock; or
|
•
|
consummate a binding share exchange or reclassification involving the Fixed Rate Cumulative Preferred Stock or a merger or consolidation of the Company with another entity, unless (i) the Fixed Rate Cumulative Preferred Stock remains outstanding or, in the case of a merger or consolidation in which the Company is not the surviving or resulting entity, are converted into or exchanged for preference securities of the surviving or resulting entity or its ultimate parent, and (ii) the Fixed Rate Cumulative Preferred Stock remaining outstanding or such preference securities, have such rights, preferences, privileges, voting powers, limitations and restrictions, taken as a whole, as are not materially less favorable than the rights, preferences, privileges, voting powers, limitations and restrictions of the Fixed Rate Cumulative Preferred Stock immediately prior to consummation of the transaction, taken as a whole;
|
Six Months Ended June 30, | |||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||
Average Balance
|
Interest
|
Avg. Yield/Rate
|
Average Balance
|
Interest
|
Avg. Yield/Rate
|
||||||||||||||||||||
(unaudited, in thousands)
|
|||||||||||||||||||||||||
Assets
|
|||||||||||||||||||||||||
Federal funds sold and other short-term investments | $ | 63,657 | $ | 79 | 0.25 | % | $ | 80,090 | $ | 97 | 0.24 | % | |||||||||||||
Available-for-sale securities – taxable | 67,676 | 523 | 1.56 | % | 58,557 | 484 | 1.66 | % | |||||||||||||||||
Available-for-sale securities – non taxable | 14,029 | 301 | 4.33 | % | 885 | 18 | 4.19 | % | |||||||||||||||||
Mortgage loans held for sale | 6,585 | 79 | 3.23 | % | 2,676 | 50 | 3.74 | % | |||||||||||||||||
Loans, net of unearned discount and fees | 414,181 | 10,406 | 5.07 | % | 438,176 | 11,523 | 5.29 | % | |||||||||||||||||
FHLBank and Federal Reserve Bank Stock | 4,913 | 124 | 3.79 | % | 6,453 | 117 | 3.64 | % | |||||||||||||||||
Total earning assets | 571,040 | 11,512 | 4.07 | % | 586,837 | 12,289 | 4.21 | % | |||||||||||||||||
Cash and due from banks – non-interest bearing | 17,351 | 27,351 | |||||||||||||||||||||||
Allowance for loan losses | (9,089 | ) | (11,668 | ) | |||||||||||||||||||||
Premises and equipment, net | 15,520 | 15,880 | |||||||||||||||||||||||
Other assets | 39,766 | 37,870 | |||||||||||||||||||||||
Total assets | $ | 634,588 | $ | 656,270 | |||||||||||||||||||||
Liabilities and Stockholders’ Equity | |||||||||||||||||||||||||
Deposits-interest bearing: | |||||||||||||||||||||||||
Interest-bearing demand accounts | $ | 122,026 | $ | 160 | 0.26 | % | $ | 133,143 | $ | 465 | 0.71 | % | |||||||||||||
Savings and money market deposits | 107,813 | 138 | 0.29 | % | 91,620 | 154 | 0.34 | % | |||||||||||||||||
Time deposits | 126,694 | 902 | 1.44 | % | 169,687 | 1,355 | 1.61 | % | |||||||||||||||||
Total interest-bearing deposits | 356,533 | 1,200 | 0.68 | % | 392,450 | 1,974 | 1.01 | % | |||||||||||||||||
Other interest-bearing liabilities
|
$ |
29,463
|
$ |
12
|
0.08
|
% | $ |
16,461
|
$ |
20
|
0.25
|
% | |||||||||||||||
Long-term debt
|
100,721
|
1,826
|
3.66
|
% |
100,043
|
1,825
|
3.67
|
% | |||||||||||||||||||
Total interest-bearing liabilities
|
486,717
|
3,038
|
1.26
|
% |
508,954
|
3,819
|
1.51
|
% | |||||||||||||||||||
Non-interest bearing deposits
|
97,692
|
98,593
|
|||||||||||||||||||||||||
Other liabilities
|
10,920
|
8,870
|
|||||||||||||||||||||||||
Stockholders’ equity
|
39,259
|
39,853
|
|||||||||||||||||||||||||
Total liabilities and stockholders’ equity
|
$ |
634,588
|
$ |
$656,270
|
|||||||||||||||||||||||
FTE Net interest income/spread
|
$ |
8,474
|
2.81
|
% | $ |
8,470
|
2.70
|
% | |||||||||||||||||||
FTE Net interest margin
|
2.99
|
% |
2.90
|
% |
Year Ended December 31,
|
|||||||||||||||||||||||||
2012 | 2011 | ||||||||||||||||||||||||
Average Balance
|
Interest
|
Avg. Yield/Rate
|
Average Balance
|
Interest
|
Avg. Yield/Rate
|
||||||||||||||||||||
(unaudited, in thousands)
|
|||||||||||||||||||||||||
Assets
|
|||||||||||||||||||||||||
Federal funds sold and other short-term investments | $ |
83,186
|
$ |
193
|
0.23 | % | $ | 63,635 | $ | 151 | 0.24 | % | |||||||||||||
Available-for-sale securities – taxable |
61,710
|
958
|
1.55
|
% |
66,913
|
1202
|
1.80
|
% | |||||||||||||||||
Available-for-sale securities – non taxable | 5,084 | 197 | 3.88 | % | - | - | |||||||||||||||||||
Mortgage loans held for sale | 4,107 | 143 | 3.47 | % | 3,820 | 152 | 3.98 | % | |||||||||||||||||
Loans, net of unearned discount and fees | 430,008 | 22,710 | 5.28 | % | 465,053 | 25,125 | 5.40 | % | |||||||||||||||||
FHLBank and Federal Reserve Bank Stock | 6,473 | 240 | 3.71 | % | 6,377 | 225 | 3.53 | % | |||||||||||||||||
Total earning assets | 590,568 | 24,441 | 4.14 | % | 605,798 | 26,855 | 4.43 | % | |||||||||||||||||
Cash and due from banks – non-interest bearing | 17,366 | 33,724 | |||||||||||||||||||||||
Allowance for loan losses | (10,544 | ) | (13,708 | ) | |||||||||||||||||||||
Premises and equipment, net | 15,742 | 16,048 | |||||||||||||||||||||||
Other assets | 39,832 | 41,104 | |||||||||||||||||||||||
Total assets | $ | 652,964 | $ | 682,966 | |||||||||||||||||||||
Liabilities and Stockholders’ Equity | |||||||||||||||||||||||||
Deposits-interest bearing: | |||||||||||||||||||||||||
Interest-bearing demand accounts | $ |
126,500
|
$ |
700
|
0.55
|
% | $ |
133,531
|
$ |
1,611
|
1.21
|
% | |||||||||||||
Savings and money market deposits | 96,176 | 291 | 0.30 | % | 82,462 | 346 | 0.42 | % | |||||||||||||||||
Time deposits | 156,739 | 2,487 | 1.59 | % | 188,906 | 3,755 | 1.99 | % | |||||||||||||||||
Total interest-bearing deposits | 379,415 | 3,478 | 0.92 | % | 404,899 | 5,712 | 1.41 | % | |||||||||||||||||
Other interest-bearing liabilities
|
18,674
|
44
|
0.23
|
% |
17,045
|
41
|
0.24
|
% | |||||||||||||||||
Long-term debt
|
100,213
|
3,670
|
3.66
|
% |
99,537
|
3,502
|
3.52
|
% | |||||||||||||||||
Total interest-bearing liabilities
|
498,302
|
7,192
|
1.44
|
% |
521,481
|
9,255
|
1.77
|
% | |||||||||||||||||
Non-interest bearing deposits |
105,226
|
98,927
|
|||||||||||||||||||||||
Other liabilities
|
9,779
|
8,151
|
|||||||||||||||||||||||
Stockholders’ equity |
39,657
|
54,407
|
|||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ |
652,964
|
$ |
$682,966
|
|||||||||||||||||||||
FTE Net interest income/spread |
17,249
|
2.70
|
% | $ |
17,600
|
2.66
|
% | ||||||||||||||||||
FTE Net interest margin |
2.92
|
% |
2.91
|
% | |||||||||||||||||||||
|
·
|
changes in rate, reflecting changes in rate multiplied by the prior period volume; and
|
|
·
|
changes in volume, reflecting changes in volume multiplied by the current period rate.
|
Six Months Ended June 30,
|
Year Ended December 31,
|
|||||||||||||||||||||||
2013 Compared to 2012
|
2012 Compared to 2011
|
|||||||||||||||||||||||
(unaudited)
|
||||||||||||||||||||||||
Change Due to Rate
|
Change Due to Volume
|
Total Change
|
Change Due to Rate
|
Change Due to Volume
|
Total Change
|
|||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||
Federal funds sold and other short-term investments
|
$ |
3
|
$ |
(21
|
) | $ |
(18
|
) | $ |
(3
|
) | $ |
45
|
$ |
42
|
|||||||||
Available-for-sale securities – taxable
|
(30
|
) |
69
|
39
|
(163
|
) |
(81
|
) |
(244
|
) | ||||||||||||||
Available-for-sale securities – non taxable
|
1
|
282
|
283
|
-
|
197
|
197
|
||||||||||||||||||
Mortgage loans held for sale
|
(7
|
) |
36
|
29
|
(19
|
) |
10
|
(9
|
) | |||||||||||||||
Loans, net of unearned discount and fees
|
(496
|
) |
(621
|
) |
(1,117
|
) |
(564
|
) |
(1,851
|
) |
(2,415
|
) | ||||||||||||
FHL Bank and Federal Reserve Bank Stock
|
4
|
3
|
7
|
11
|
4
|
15
|
||||||||||||||||||
Total interest income
|
(525
|
) |
(252
|
) |
(777
|
) |
(738
|
) |
(1,676
|
) |
(2,414
|
) | ||||||||||||
Interest-bearing demand accounts
|
(293
|
) |
(12
|
) |
(305
|
) |
(873
|
) |
(38
|
) |
(911
|
) | ||||||||||||
Savings and money market deposits
|
(37
|
) |
21
|
(16
|
) |
(97
|
) |
42
|
(55
|
) | ||||||||||||||
Time deposits
|
(144
|
) |
(309
|
) |
(453
|
) |
(754
|
) |
(514
|
) |
(1,268
|
) | ||||||||||||
Other interest-bearing liabilities
|
(13
|
) |
5
|
(8
|
) |
(1
|
) |
4
|
3
|
|||||||||||||||
Long-term debt
|
(8
|
) |
9
|
1
|
143
|
25
|
168
|
|||||||||||||||||
Total interest expense
|
(495
|
) |
(286
|
) |
(781
|
) |
(1,582
|
) |
(481
|
) |
(2,063
|
) | ||||||||||||
Net interest income
|
$ |
(30
|
) | $ |
34
|
$ |
4
|
$ |
844
|
$ |
(1,195
|
) |
$ (351
|
) | ||||||||||
Six months ended June 30,
(unaudited)
|
Year ended December 31,
|
|||||||||||||||||||
2013
|
2012
|
2012
|
2011
|
2010
|
||||||||||||||||
(in thousands)
|
||||||||||||||||||||
Loans held for sale fee income
|
$
|
770
|
$
|
931
|
$
|
2,447
|
$
|
2,120
|
$
|
3,506
|
||||||||||
NSF charges and service fees
|
169
|
198
|
980
|
944
|
1,062
|
|||||||||||||||
Other service charges
|
1,527
|
1,554
|
2,472
|
2,276
|
2,021
|
|||||||||||||||
Realized gains on available-for-sale securities
|
127
|
-
|
-
|
-
|
885
|
|||||||||||||||
Other income
|
901
|
605
|
1,535
|
984
|
1,145
|
|||||||||||||||
Total non-interest income
|
$
|
3,494
|
$
|
3,288
|
$
|
7,434
|
$
|
6,324
|
$
|
8,619
|
||||||||||
NON-INTEREST EXPENSE
|
||||||||||||||||||||
Six months ended June 30,
(unaudited)
|
Year ended December 31,
|
|||||||||||||||||||
|
||||||||||||||||||||
2013
|
2012
|
2012
|
2011
|
2010
|
||||||||||||||||
(in thousands)
|
||||||||||||||||||||
Salaries and employee benefits
|
$
|
5,322
|
$
|
5,105
|
$
|
10,587
|
$
|
10,955
|
$
|
11,753
|
||||||||||
Net occupancy expense
|
1,309
|
1,265
|
2,568
|
2,599
|
2,756
|
|||||||||||||||
Foreclosed assets expense
|
2,198
|
1,372
|
2,647
|
5,219
|
2,708
|
|||||||||||||||
Other operating expense
|
3,114
|
3,854
|
7,506
|
7,851
|
8,550
|
|||||||||||||||
Total non-interest expenses
|
$
|
11,943
|
$
|
11,596
|
$
|
23,308
|
$
|
26,624
|
$
|
25,767
|
||||||||||
INVESTMENT SECURITIES PORTFOLIO COMPOSITION
|
|||||||||||
At June 30,
|
At December 31,
|
||||||||||
2013
|
2012
|
2011
|
|||||||||
(unaudited)
|
|||||||||||
(in thousands)
|
|||||||||||
U.S. government sponsored agency securities
|
$
|
61,133
|
$
|
63,148
|
$
|
61,171
|
|||||
Municipal securities
|
15,946
|
14,074
|
-
|
||||||||
Mortgage backed securities
|
5,015
|
-
|
-
|
||||||||
SBA pool securities
|
5,175
|
-
|
-
|
||||||||
Equity and other securities
|
599
|
623
|
619
|
||||||||
Total
|
$
|
87,868
|
$
|
77,845
|
$
|
61,790
|
|||||
One Year or Less
|
One to Five Years
|
Five to Ten Years
|
More Than Ten Years
|
Total Investment Securities
|
||||||||||||||||||||||||||||||
Carrying Value
|
Average Yield
|
Carrying Value
|
Average Yield
|
Carrying Value
|
Average Yield
|
Carrying Value
|
Average Yield
|
Carrying Value
|
Average Yield
|
|||||||||||||||||||||||||
(unaudited, in thousands)
|
||||||||||||||||||||||||||||||||||
Available-For-Sale
|
||||||||||||||||||||||||||||||||||
U.S. government
sponsored agency
|
$ | - | $ | - | $ | - | $ | 61,133 | 1.59 | % | $ | 61,133 | 1.59 | % | ||||||||||||||||||||
Municipal securities
|
- | - | 388 | 2.22 | % | 15,558 | 3.36 | % | 15,946 | 3.33 | % | |||||||||||||||||||||||
Mortgage backed Securities with no defined maturity
|
- | - | 5,015 | 1.92 | % | - | 5,015 | 1.92 | % | |||||||||||||||||||||||||
SBA pool securities with no defined maturity
|
- | - | - | 5,175 | 2.27 | % | 5,175 | 2.27 | % | |||||||||||||||||||||||||
Equity and other
securities with no defined
maturity
|
- | - | - | - | 599 | 2.04 | % | |||||||||||||||||||||||||||
Total available-for-sale
|
$ | - | $ | - | $ | 5,403 | 1.94 | % | $ | 81,866 | 1.97 | % | $ | 87,868 | 2.06 | % |
As of December 31
|
|||||||||||||||||||||||||||||||||||||||||||||||||
June 30, 2013
|
2012
|
2011
|
2010
|
2009
|
2008
|
||||||||||||||||||||||||||||||||||||||||||||
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
||||||||||||||||||||||||||||||||||||||
(in thousands)
|
(unaudited)
|
||||||||||||||||||||||||||||||||||||||||||||||||
Commercial
|
$ | 119,435 | 29.27 | % | $ | 115,520 | 27.79 | % | $ | 130,398 | 29.71 | % | $ | 144,181 | 29.28 | % | $ | 142,528 | 25.72 |
%
|
$ | 172,647 | 26.06 | % | |||||||||||||||||||||||||
Commercial real estate
|
133,304 | 32.67 | 143,198 | 34.45 | 154,109 | 35.12 | 169,253 | 34.37 | 167,581 | 30.24 | 170,697 | 25.77 | |||||||||||||||||||||||||||||||||||||
Construction
|
47,082 | 11.54 | 46,515 | 11.19 | 48,438 | 11.04 | 64,641 | 13.13 | 113,077 | 20.41 | 182,933 | 27.62 | |||||||||||||||||||||||||||||||||||||
Home equity
|
45,412 | 11.13 | 49,529 | 11.92 | 59,750 | 13.61 | 64,289 | 13.05 | 66,586 | 12.02 | 59,257 | 8.94 | |||||||||||||||||||||||||||||||||||||
Residential real estate
|
46,616 | 11.42 | 43,584 | 10.49 | 37,882 | 8.63 | 36,903 | 7.49 | 45,014 | 8.12 | 43,695 | 6.60 | |||||||||||||||||||||||||||||||||||||
Lease financing
|
9,512 | 2.33 | 10,054 | 2.42 | 2,268 | 0.52 | 5,530 | 1.12 | 11,259 | 2.03 |
`
|
18,927 | 2.86 | ||||||||||||||||||||||||||||||||||||
Consumer
|
6,704 | 1.64 | 7,271 | 1.74 | 5,998 | 1.37 | 7,657 | 1.56 | 8,066 | 1.46 | 14,245 | 2.15 | |||||||||||||||||||||||||||||||||||||
Total loans and
leases
|
408,065 | 100.00 | % | 415,671 | 100.00 | % | 438,843 | 100.00 | % | 492,454 | 100.00 | % | 554,111 | 100.00 |
%
|
662,401 | 100.00 | % | |||||||||||||||||||||||||||||||
Less allowance for loan losses
|
8,655 | 9,057 | 13,189 | 14,731 | 20,000 | 12,368 | |||||||||||||||||||||||||||||||||||||||||||
Loans, net
|
$ | 399,410 | $ | 406,614 | $ | 425,654 | $ | 477,723 | $ | 534,111 | $ | 650,033 |
As of June 30, 2013
|
||||||||||||||||||||||||
More than One Year
|
||||||||||||||||||||||||
Less than
one year
|
One to
five years
|
Over five
years
|
Total
|
Fixed
|
Variable
|
|||||||||||||||||||
(unaudited, in thousands)
|
||||||||||||||||||||||||
Commercial
|
$ | 63,188 | $ | 46,045 | $ | 10,203 | $ | 119,436 | $ | 29,886 | $ | 26,362 | ||||||||||||
Commercial Real Estate
|
54,662 | 58,545 | 20,098 | 133,305 | 55,432 | 23,211 | ||||||||||||||||||
Construction
|
26,460 | 17,163 | 3,459 | 47,082 | 3,938 | 16,683 |
NON-PERFORMING ASSETS
|
||||||||||||||||||||||||
As of
June 30, 2013
|
As of December 31,
|
|||||||||||||||||||||||
2012
|
2011
|
2010
|
2009
|
2008
|
||||||||||||||||||||
(in thousands)
|
(unaudited)
|
|||||||||||||||||||||||
Commercial and all other loans:
|
||||||||||||||||||||||||
Past due 90 days or more
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||||||
Non-accrual
|
890
|
1,131
|
2,029
|
2,896
|
1,327
|
2,143
|
||||||||||||||||||
Commercial real estate loans:
|
||||||||||||||||||||||||
Past due 90 days or more
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Non-accrual
|
1,511
|
1,537
|
1,340
|
10,088
|
13,267
|
1,951
|
||||||||||||||||||
Construction loans:
|
||||||||||||||||||||||||
Past due 90 days or more
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Non-accrual
|
910
|
910
|
3,058
|
10,417
|
11,205
|
32,110
|
||||||||||||||||||
Home equity loans:
|
||||||||||||||||||||||||
Past due 90 days or more
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Non-accrual
|
171
|
1,084
|
2,676
|
1,211
|
344
|
488
|
||||||||||||||||||
Residential real estate loans:
|
||||||||||||||||||||||||
Past due 90 days or more
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Non-accrual
|
1,942
|
175
|
2,204
|
5,553
|
8,404
|
6,129
|
||||||||||||||||||
Lease financing:
|
||||||||||||||||||||||||
Past due 90 days or more
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Non-accrual
|
-
|
-
|
18
|
140
|
335
|
475
|
||||||||||||||||||
Consumer loans:
|
||||||||||||||||||||||||
Past due 90 days or more
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Non-accrual
|
-
|
-
|
-
|
52
|
6
|
36
|
||||||||||||||||||
Debt securities and other assets (excluding other real estate owned and other repossessed assets):
|
||||||||||||||||||||||||
Past due 90 days or more
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Non-accrual
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Total non-performing loans
|
5,424
|
4,837
|
11,325
|
30,357
|
34,888
|
43,332
|
||||||||||||||||||
Foreclosed assets held for sale
|
27,993
|
31,936
|
29,246
|
20,144
|
19,434
|
4,783
|
||||||||||||||||||
Total non-performing assets
|
$ |
33,417
|
$ |
36,773
|
$ |
40,571
|
$ |
50,501
|
$ |
54,322
|
$ |
48,115
|
||||||||||||
Total non-performing loans to total loans
|
1.33
|
%
|
1.16
|
%
|
2.58
|
%
|
6.16
|
%
|
6.30
|
%
|
6.54
|
%
|
||||||||||||
Total non-performing loans to total assets
|
0.85
|
%
|
0.74
|
%
|
1.73
|
%
|
4.20
|
%
|
4.51
|
%
|
5.31
|
%
|
||||||||||||
Allowance for loan losses to non-performing loans
|
159.54
|
%
|
187.22
|
%
|
116.46
|
%
|
48.53
|
%
|
57.33
|
%
|
28.54
|
%
|
||||||||||||
Non-performing assets to loans and foreclosed assets held for sale
|
7.82
|
%
|
8.22
|
%
|
8.67
|
%
|
9.85
|
%
|
9.47
|
%
|
7.21
|
%
|
Six Months Ended
June 30, 2013
|
Year Ended
December 31, 2012
|
|||||||
(in thousands)
|
(unaudited)
|
|||||||
Gross interest income (since date of non-accrual) if the loans had been current and accruing interest
|
$
|
447
|
$
|
510
|
||||
Interest income reversed at time loan placed on non-accrual
|
14
|
159
|
||||||
Cash interest received during the period
|
22
|
199
|
As of and for the Year Ended December 31,
|
||||||||||||||||||||||||
June 30, 2013
|
2012
|
2011
|
2010
|
2009
|
2010
|
|||||||||||||||||||
(in thousands)
|
(unaudited)
|
|||||||||||||||||||||||
Balance at beginning of period
|
$ | 9,057 | $ | 13,189 | $ | 14,731 | $ | 20,000 | $ | 12,368 | $ | 8,982 | ||||||||||||
Loans charged-off:
|
||||||||||||||||||||||||
Commercial loans
|
44 | 2,030 | 582 | 1,364 | 4,713 | 6,603 | ||||||||||||||||||
Commercial real estate loans
|
- | 2,239 | 1,218 | 2,985 | 374 | 262 | ||||||||||||||||||
Construction loans
|
- | 882 | 2,352 | 3,662 | 7,716 | 6,022 | ||||||||||||||||||
Home equity loans
|
- | 417 | 725 | 387 | 653 | 127 | ||||||||||||||||||
Residential real estate loans
|
68 | 540 | 637 | 660 | 1,480 | 424 | ||||||||||||||||||
Lease financing
|
- | 9 | - | 43 | 109 | 372 | ||||||||||||||||||
Consumer loans .
|
- | - | - | 7 | 58 | 112 | ||||||||||||||||||
Total loans charged-off
|
112 | 6,117 | 5,514 | 9,108 | 15,103 | 13,922 | ||||||||||||||||||
Recoveries:
|
||||||||||||||||||||||||
Commercial loans
|
59 | 179 | 282 | 390 | 259 | 223 | ||||||||||||||||||
Commercial real estate loans
|
12 | 20 | 91 | 171 | 123 | - | ||||||||||||||||||
Construction loans
|
86 | 481 | 60 | 123 | 592 | 24 | ||||||||||||||||||
Home equity loans
|
21 | 58 | 48 | 17 | 31 | - | ||||||||||||||||||
Residential real estate loans
|
30 | 43 | 157 | 11 | 72 | 1 | ||||||||||||||||||
Lease financing
|
- | - | 25 | 14 | 21 | 29 | ||||||||||||||||||
Consumer loans .
|
2 | 4 | 9 | 18 | 2 | 6 | ||||||||||||||||||
Total recoveries
|
210 | 785 | 672 | 744 | 1,100 | 283 | ||||||||||||||||||
Net loans charged-off
|
(98 | ) | 5,332 | 4,842 | 8,364 | 14,003 | 13,639 | |||||||||||||||||
Provision for loan losses
|
(500 | ) | 1,200 | 3,300 | 3,095 | 21,635 | 17,025 | |||||||||||||||||
Balance at end of period
|
$ | 8,655 | $ | 9,057 | $ | 13,189 | $ | 14,731 | $ | 20,000 | $ | 12,368 | ||||||||||||
Loans outstanding:
|
||||||||||||||||||||||||
Average
|
$ | 414,181 | $ | 430,008 | $ | 465,053 | $ | 518,010 | $ | 608,080 | $ | 631,673 | ||||||||||||
End of period
|
408,065 | 415,671 | 438,843 | 492,454 | 554,111 | 662,401 | ||||||||||||||||||
Ratio of allowance for loan losses to loans
outstanding:
|
||||||||||||||||||||||||
Average
|
2.09 | % | 2.11 | % | 2.84 | % | 2.84 | % | 3.29 | % | 1.96 | % | ||||||||||||
End of period
|
2.12 | % | 2.18 | % | 3.01 | % | 2.99 | % | 3.61 | % | 1.87 | % | ||||||||||||
Ratio of net charge-offs to:
|
||||||||||||||||||||||||
Average
|
-0.02 | % | 1.24 | % | 1.04 | % | 1.61 | % | 2.30 | % | 2.16 | % | ||||||||||||
End of period
|
-0.02 | % | 1.28 | % | 1.10 | % | 1.70 | % | 2.53 | % | 2.06 | % |
As of June 30,
|
As of December 31,
|
||||||||||||||||||||||||||||||||||
2013
|
2012
|
2011
|
2010
|
2009
|
2008
|
||||||||||||||||||||||||||||||
Amount
|
% of Total Allowance
|
Amount
|
% of Total Allowance
|
Amount
|
% of Total Allowance
|
Amount
|
% of Total Allowance
|
Amount
|
% of Total Allowance
|
Amount
|
% of Total Allowance
|
||||||||||||||||||||||||
(in thousands)
|
(unaudited)
|
||||||||||||||||||||||||||||||||||
Commercial
|
$1,555
|
17.97
|
%
|
$2,097
|
23.15
|
%
|
$2,987
|
22.65
|
%
|
$3,339
|
22.67
|
%
|
$3,630
|
18.15
|
%
|
$3,040
|
24.58
|
%
|
|||||||||||||||||
Commercial real estate
|
2,527
|
29.20
|
3,582
|
39.55
|
3,772
|
28.60
|
3,974
|
26.98
|
7,253
|
36.27
|
2,507
|
20.27
|
|||||||||||||||||||||||
Construction
|
2,692
|
31.10
|
1,543
|
17.04
|
2,721
|
20.63
|
4,579
|
31.08
|
5,929
|
29.65
|
4,695
|
37.96
|
|||||||||||||||||||||||
Home equity
|
730
|
8.43
|
634
|
7.00
|
1,338
|
10.14
|
1,262
|
8.57
|
1,061
|
5.31
|
409
|
3.31
|
|||||||||||||||||||||||
Residential real estate
|
1,111
|
12.84
|
1,138
|
12.56
|
2,312
|
17.53
|
1,488
|
10.10
|
1,737
|
8.69
|
1,201
|
9.71
|
|||||||||||||||||||||||
Lease financing
|
21
|
0.24
|
46
|
0.51
|
30
|
0.23
|
38
|
0.26
|
238
|
1.19
|
449
|
3.63
|
|||||||||||||||||||||||
Consumer
|
19
|
0.22
|
17
|
0.19
|
29
|
0.22
|
51
|
0.35
|
152
|
0.76
|
67
|
0.54
|
|||||||||||||||||||||||
Total
|
$8,655
|
100.00
|
%
|
$9,057
|
100.00
|
%
|
$13,189
|
100.00
|
%
|
$14,731
|
100.00
|
%
|
$20,000
|
100.00
|
%
|
$12,368
|
100.00
|
%
|
DEPOSITS
|
||||||||||||||||||||||||||||||||||||||||||||||||
June 30,
|
December 31,
|
|||||||||||||||||||||||||||||||||||||||||||||||
2013
|
2012
|
2011
|
2010
|
|||||||||||||||||||||||||||||||||||||||||||||
Balance
|
Percent of
Deposits
|
Weighted
Average
Rate
|
Balance
|
Percent of
Deposits
|
Weighted
Average
Rate
|
Balance
|
Percent of
Deposit
|
Weighted
Average
Rate
|
Balance
|
Percent of
Deposit
|
Weighted
Average
Rate
|
|||||||||||||||||||||||||||||||||||||
(in thousands)
|
(unaudited)
|
|||||||||||||||||||||||||||||||||||||||||||||||
Demand
|
$ | 101,931 | 22.54 | % | 0.00 | % | $ | 113,698 | 22.54 | % | 0.00 | % | $ | 100,842 | 20.56 | % | 0.00 | % | $ | 100,975 | 18.65 | % | 0.00 | % | ||||||||||||||||||||||||
Savings
|
16,445 | 3.64 | 0.05 | % | 16,243 | 3.64 | 0.12 | % | 13,814 | 2.82 | 0.19 | % | 11,040 | 2.04 | 0.19 | % | ||||||||||||||||||||||||||||||||
Interest-bearing demand
|
118,648 | 26.24 | 0.13 | % | 127,597 | 26.24 | 0.55 | % | 133,702 | 27.26 | 1.21 | % | 140,697 | 26.00 | 1.21 | % | ||||||||||||||||||||||||||||||||
Money Market
|
92,748 | 20.51 | 0.14 | % | 91,792 | 20.51 | 0.34 | % | 75,468 | 15.39 | 0.46 | % | 66,670 | 12.32 | 0.46 | % | ||||||||||||||||||||||||||||||||
Time Deposits
|
122,397 | 27.07 | 0.71 | % | 135,136 | 27.07 | 1.59 | % | 166,587 | 33.97 | 1.99 | % | 221,836 | 40.99 | 1.99 | % | ||||||||||||||||||||||||||||||||
Total deposits
|
$ | 452,169 | 100.00 | % | $ | 484,466 | 100.00 | % | $ | 490,413 | 100.00 | % | $ | 541,218 | 100.00 | % |
AMOUNTS AND MATURITIES OF TIME DEPOSITS OF $100,000 OR MORE
|
||||||||
As of June 30, 2013
|
||||||||
Amount
|
Weighted Average Rate
|
|||||||
(in thousands)
|
||||||||
Three months or less
|
$
|
22,102
|
0.66
|
%
|
||||
Over three months through six months
|
3,266
|
1.35
|
%
|
|||||
Over six months through twelve months
|
9,836
|
0.70
|
%
|
|||||
Over twelve months
|
22,789
|
1.63
|
%
|
|||||
Total
|
$
|
57,993
|
1.09
|
%
|
SHORT-TERM DEBT
|
||||||||||||||||||||
Amount outstanding at period end
|
Average amount outstanding during the period (1)
|
Maximum Outstanding At any Month End
|
Weighted average interest rate during the period
|
Weighted Average interest rate at period end
|
||||||||||||||||
(in thousands)
|
||||||||||||||||||||
At or for the six months ended June 30, 2013 (unaudited):
|
||||||||||||||||||||
Federal Home Loan Bank borrowings
|
$
|
-
|
$
|
1
|
$
|
-
|
0.25
|
%
|
||||||||||||
Federal Funds purchased
|
-
|
-
|
-
|
0.56
|
%
|
|||||||||||||||
Federal Reserve Bank line of credit
|
-
|
-
|
-
|
|||||||||||||||||
Repurchase agreements and other interest bearing liabilities
|
34,631
|
29,462
|
34,631
|
0.08
|
%
|
0.08
|
%
|
|||||||||||||
Total
|
$
|
34,631
|
$
|
29,463
|
0.08
|
%
|
0.08
|
%
|
||||||||||||
At or for the year ended December 31, 2012:
|
||||||||||||||||||||
Federal Home Loan Bank borrowings
|
$
|
-
|
$
|
3
|
$
|
-
|
0.23
|
%
|
||||||||||||
Federal Funds purchased
|
-
|
3
|
-
|
1.05
|
%
|
|||||||||||||||
Federal Reserve Bank line of credit
|
-
|
-
|
-
|
|||||||||||||||||
Repurchase agreements and other interest bearing liabilities
|
21,668
|
18,668
|
22,071
|
0.23
|
%
|
0.23
|
%
|
|||||||||||||
Total
|
$
|
21,668
|
$
|
18,674
|
0.23
|
%
|
0.23
|
%
|
||||||||||||
At or for the year ended December 31, 2011:
|
||||||||||||||||||||
Federal Home Loan Bank borrowings
|
$
|
-
|
$
|
2
|
$
|
-
|
0.24
|
%
|
||||||||||||
Federal Funds purchased
|
-
|
2
|
-
|
1.14
|
%
|
|||||||||||||||
Federal Reserve Bank line of credit
|
-
|
-
|
-
|
|||||||||||||||||
Repurchase agreements and other interest bearing liabilities
|
15,372
|
17,041
|
20,111
|
0.24
|
%
|
0.24
|
%
|
|||||||||||||
Total
|
$
|
15,372
|
$
|
17,045
|
0.24
|
%
|
0.24
|
%
|
||||||||||||
At or for the year ended December 31, 2009
|
||||||||||||||||||||
Federal Home Loan Bank borrowings
|
$
|
-
|
$
|
3
|
$
|
-
|
0.26
|
%
|
||||||||||||
Federal Funds purchased
|
-
|
2
|
-
|
0.98
|
%
|
|||||||||||||||
Federal Reserve Bank line of credit
|
-
|
-
|
-
|
|||||||||||||||||
Repurchase agreements and other interest bearing liabilities…..….…………..….…………..….………
|
18,748
|
18,472
|
22,071
|
0.24
|
%
|
0.24
|
%
|
|||||||||||||
Total……………………………………………………...
|
$
|
18,748
|
$
|
18,477
|
0.24
|
%
|
0.24
|
%
|
||||||||||||
(1) Calculations are based on daily averages where available and monthly averages otherwise.
|
RISK-BASED CAPITAL
|
||||||||||||||||
June 30,
|
December 31,
|
|||||||||||||||
2013
|
2012
|
2011
|
2010
|
|||||||||||||
(in thousands)
|
(unaudited)
|
|||||||||||||||
Tier 1 capital Stockholders’ equity
|
$
|
37,594
|
$
|
39,815
|
$
|
40,455
|
$
|
57,164
|
||||||||
Intangible assets
|
(107
|
)
|
(179
|
)
|
(321
|
)
|
(464
|
)
|
||||||||
Unrealized (appreciation) depreciation on available-for-sale securities and derivative instruments
|
2,080
|
(43
|
)
|
(123
|
)
|
(30
|
)
|
|||||||||
Disallowed deferred tax asset
|
-
|
-
|
-
|
(9,684
|
)
|
|||||||||||
Trust preferred securities (1)
|
13,224
|
13,257
|
13,444
|
19,000
|
||||||||||||
Total Tier 1 capital
|
52,791
|
52,850
|
53,455
|
65,986
|
||||||||||||
Tier 2 capital
|
||||||||||||||||
Qualifying allowance for loan losses
|
6,431
|
6,838
|
6,897
|
7,334
|
||||||||||||
Trust preferred securities (1)
|
5,776
|
|
5,743
|
5,556
|
-
|
|||||||||||
Qualifying unrealized gains on available-for-sale equity securities
|
-
|
9
|
9
|
-
|
||||||||||||
Total Tier 2 capital
|
12,206
|
12,590
|
12,462
|
7,334
|
||||||||||||
Total risk-based capital
|
$
|
64,997
|
$
|
65,440
|
$
|
65,917
|
$
|
73,320
|
||||||||
Risk weighted assets
|
$
|
512,831
|
$
|
544,847
|
$
|
545,494
|
$
|
579,334
|
||||||||
Ratios at end of period
|
||||||||||||||||
Total capital to risk-weighted assets ratio
|
12.77
|
%
|
12.01
|
%
|
12.08
|
%
|
12.66
|
%
|
||||||||
Tier 1 capital to risk-weighted assets ratio
|
10.29
|
%
|
9.70
|
%
|
9.80
|
%
|
11.39
|
%
|
||||||||
Tier 1 capital to average assets ratio (leverage ratio)
|
8.36
|
%
|
8.10
|
%
|
8.04
|
%
|
9.04
|
%
|
||||||||
Minimum guidelines
|
||||||||||||||||
Total capital to risk-weighted assets ratio
|
8.00
|
%
|
8.00
|
%
|
8.00
|
%
|
8.00
|
%
|
||||||||
Tier 1 capital to risk-weighted assets ratio
|
4.00
|
%
|
4.00
|
%
|
4.00
|
%
|
4.00
|
%
|
||||||||
Tier 1 capital to average assets ratio (leverage ratio)
|
4.00
|
%
|
4.00
|
%
|
4.00
|
%
|
4.00
|
%
|
||||||||
(1) Federal Reserve guidelines for calculation of Tier 1 capital limit the amount of cumulative trust preferred securities which can be included in Tier 1 capital to 25% of total Tier 1 capital (Tier 1 capital before reduction of intangibles). Only $13.2 million, $13.3 million and $13.4 million of the trust preferred securities balance of $19.0 million was included in Tier 1 capital as of June 30, 2013, December 31, 2012 and December 31, 2011. All of the trust preferred securities balance of $19.0 million were included as Tier 1 capital
|
|
•
|
The Fixed Rate Cumulative Preferred Stock has a senior rank. The Company is not free to issue other preferred stock that is senior to the Fixed Rate Cumulative Preferred Stock.
|
|
•
|
If the Company were to pay a cash dividend in the future, any such dividend would have to be discontinued if a dividend were missed on the Fixed Rate Cumulative Preferred Stock. Thereafter, dividends on common stock could be resumed only if all preferred share dividends in arrears were paid. Similar restrictions apply to the Company’s ability to repurchase common stock if dividends on the Fixed Rate Cumulative Preferred Stock are missed.
|
|
•
|
Failure to pay dividends on the Fixed Rate Cumulative Preferred Stock is not an event of default. However, a failure to pay a total of six dividends, whether or not consecutive, gives the holders of the Fixed Rate Cumulative Preferred Stock the right to elect two directors to the Company’s Board of Directors. That right continues until the Company pays all dividends in arrears. As of October 31, 2013, the Company has deferred 18 dividend payments on the Fixed Rate Cumulative Preferred Stock. In 2012, the holder of the Fixed Rate Cumulative Preferred Stock elected one director to serve on the Company’s Board of Directors.
|
Payments due by Period
|
||||||||||||||||||||||||
Total
|
Amortization
|
Less than 1 year
|
1-3 years
|
3-5 years
|
More than 5 years
|
|||||||||||||||||||
(unaudited, in thousands)
|
||||||||||||||||||||||||
Time deposit obligations
|
$
|
122,397
|
$
|
-
|
$
|
65,191
|
$
|
47,115
|
$
|
9,166
|
$
|
924
|
||||||||||||
Long-term debt obligations
|
102,088
|
-
|
20,000
|
27,500
|
35,000
|
19,588
|
||||||||||||||||||
Less: Deferred prepayment penalty on modification of Federal Home Loan Bank advances
|
(639
|
)
|
(639
|
)
|
-
|
-
|
-
|
-
|
||||||||||||||||
Total obligations
|
$
|
223,846
|
$
|
(639
|
)
|
$
|
85,191
|
$
|
74,615
|
$
|
44,166
|
$
|
20,512
|
Changes in Interest Rates
|
Net Interest Income
(next 12 months)
|
Net Economic Value of
Equity at Risk
|
||
400 basis point rise
|
35.61%
|
-7.94%
|
||
300 basis point rise
|
25.11%
|
-6.30%
|
||
200 basis point rise
|
13.71%
|
-4.89%
|
||
100 basis point rise
|
4.44%
|
-2.68%
|
||
Base Rate Scenario
|
-
|
-
|
||
100 basis point decline
|
-4.85%
|
0.68%
|
INTEREST-RATE SENSITIVITY ANALYSIS
|
||||||||||||||||||||||||||||
Expected Maturity or Repricing Date
|
||||||||||||||||||||||||||||
(unaudited, in thousands)
|
||||||||||||||||||||||||||||
0-90 Days
|
91-365 Days
|
1 Year
|
1-2 years
|
2-5 years
|
Thereafter
|
Total
|
||||||||||||||||||||||
Interest-Earning Assets:
|
||||||||||||||||||||||||||||
Fixed Rate Loans
|
$
|
28,625
|
$
|
27,016
|
$
|
55,641
|
$
|
28,678
|
$
|
63,396
|
$
|
32,005
|
$
|
179,720
|
||||||||||||||
Average Interest Rate
|
5.64
|
%
|
6.23
|
%
|
5.92
|
%
|
0.00
|
%
|
0.00
|
%
|
4.99
|
%
|
4.40
|
%
|
||||||||||||||
Variable Rate Loans
|
207,776
|
8,068
|
215,844
|
16,496
|
1,962
|
-
|
234,301
|
|||||||||||||||||||||
Average Interest Rate
|
4.53
|
%
|
3.54
|
%
|
4.50
|
%
|
5.15
|
%
|
4.20
|
%
|
0.00
|
%
|
4.54
|
%
|
||||||||||||||
Fixed Rate Investments
|
-
|
-
|
-
|
-
|
-
|
87,269
|
87,269
|
|||||||||||||||||||||
Average Interest Rate
|
-
|
-
|
-
|
-
|
-
|
2.16
|
%
|
2.16
|
%
|
|||||||||||||||||||
Variable Rate Investments
|
599
|
-
|
599
|
-
|
-
|
-
|
599
|
|||||||||||||||||||||
Average Interest Rate
|
2.04
|
%
|
-
|
2.04
|
%
|
-
|
-
|
-
|
2.04
|
%
|
||||||||||||||||||
Interest Bearing Deposits
|
56,455
|
-
|
56,455
|
-
|
-
|
-
|
56,455
|
|||||||||||||||||||||
Average Interest Rate
|
0.21
|
%
|
-
|
0.21
|
%
|
-
|
-
|
-
|
0.21
|
%
|
||||||||||||||||||
Federal Funds Sold
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||
Average Interest Rate
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||
Total interest-earning assets
|
$
|
293,454
|
$
|
35,084
|
$
|
328,538
|
$
|
45,174
|
$
|
65,358
|
$
|
119,274
|
$
|
558,344
|
||||||||||||||
Interest-Bearing Liabilities:
|
||||||||||||||||||||||||||||
Interest-bearing demand
|
$
|
118,623
|
$
|
-
|
$
|
118,623
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
118,623
|
||||||||||||||
Average Interest Rate
|
0.40
|
%
|
-
|
0.40
|
%
|
-
|
-
|
-
|
0.40
|
%
|
||||||||||||||||||
Savings and money market
|
109,218
|
-
|
109,218
|
-
|
-
|
-
|
109,218
|
|||||||||||||||||||||
Average Interest Rate
|
0.26
|
%
|
-
|
0.26
|
%
|
-
|
-
|
-
|
0.26
|
%
|
||||||||||||||||||
Time Deposits
|
34,605
|
30,586
|
65,191
|
31,218
|
25,064
|
924
|
122,397
|
|||||||||||||||||||||
Average Interest Rate
|
0.79
|
%
|
0.96
|
%
|
0.87
|
%
|
1.84
|
%
|
2.17
|
%
|
1.69
|
%
|
1.15
|
%
|
||||||||||||||
Funds Borrowed
|
109,166
|
-
|
109,166
|
7,400
|
19,514
|
-
|
136,080
|
|||||||||||||||||||||
Average Interest Rate
|
2.31
|
%
|
-
|
1.61
|
%
|
1.53
|
%
|
2.46
|
%
|
-
|
0.72
|
%
|
||||||||||||||||
Total interest-bearing liab
|
$
|
371,612
|
$
|
30,586
|
$
|
402,197
|
$
|
36,618
|
$
|
44,518
|
$
|
924
|
$
|
486,318
|
||||||||||||||
Cumulative:
|
||||||||||||||||||||||||||||
Rate sensitive assets (RSA)
|
$
|
293,454
|
$
|
35,083
|
$
|
328,538
|
$
|
373,712
|
$
|
439,070
|
$
|
558,344
|
$
|
558,344
|
||||||||||||||
Rate sensitive liabilities (RSL)
|
371,533
|
30,351
|
401,884
|
440,363
|
485,394
|
486,318
|
486,318
|
|||||||||||||||||||||
GAP (GAP = RSA – RSL)
|
-78,079
|
4.732
|
-73,346
|
-66,651
|
-46,323
|
72,026
|
72,026
|
|||||||||||||||||||||
RSA/RSL
|
78.98
|
%
|
115.59
|
%
|
81.75
|
%
|
84.86
|
%
|
90.46
|
%
|
114.81
|
%
|
||||||||||||||||
RSA/Total assets
|
46.08
|
%
|
5.51
|
%
|
51.59
|
%
|
58.69
|
%
|
68.95
|
%
|
87.68
|
%
|
||||||||||||||||
RSL/Total assets
|
58.35
|
%
|
4.77
|
%
|
63.11
|
%
|
69.16
|
%
|
76.23
|
%
|
76.37
|
%
|
||||||||||||||||
GAP/Total assets
|
-12.26
|
%
|
0.74
|
%
|
-11.52
|
%
|
-10.47
|
%
|
-7.27
|
%
|
11.31
|
%
|
||||||||||||||||
GAP/RSA
|
-26.61
|
%
|
13.49
|
%
|
-22.33
|
%
|
-17.83
|
%
|
-10.55
|
%
|
12.90
|
%
|
Name
|
Age
|
Positions
|
Directors
|
||
Robert D. Regnier
|
64
|
President, Chief Executive Officer and Chairman of the Board of Directors of Blue Valley; President, Chief Executive Officer and Chairman of the Board of Directors of the Bank
|
Donald H. Alexander
|
75
|
Director of Blue Valley and the Bank
|
Robert D. Taylor
|
66
|
Director of Blue Valley
|
James L. Gegg
|
62
|
Director of Blue Valley
|
Additional Directors of the Bank
|
||
Harvey S. Bodker
|
77
|
Director of the Bank
|
Richard L. Bond
|
77
|
Director of the Bank
|
Suzanne E. Dotson
|
66
|
Director of the Bank
|
Charles H. Hunter
|
71
|
Director of the Bank
|
Executive Officers who are not Directors
|
||
Mark A. Fortino
|
47
|
Executive Vice President and Chief Financial Officer of the Bank; Chief Financial Officer of Blue Valley
|
Bruce Easterly
|
54
|
Executive Vice President and Chief Lending Officer for the Bank
|
Bonnie McConnaughy
|
54
|
Senior Vice President, Operations – Retail Division of the Bank
|
Proposed Purchases of Common Stock in the Rights Offering
|
|||||||||
Common Stock Beneficially (2) Owned Before Rights Offering
|
Percentage of Class Before Rights Offering
|
Number of Shares
|
Amount
|
Common Stock to be Beneficially (2) Owned After Rights Offering
|
|||||
Robert D. Regnier
|
760,906
|
(1)(3)
|
25.89%
|
(4)
|
|||||
Donald H. Alexander
|
230,848
|
(1)
|
7.86%
|
(5)
|
|||||
Thomas A. McDonnell
|
212,225
|
(1)(6)
|
6.49%
|
(7)
|
|||||
Robert D. Taylor
|
22,742
|
(1)
|
0.77%
|
||||||
James L. Gegg
|
1,745
|
(1)
|
0.06%
|
||||||
Mark A. Fortino
|
17,338
|
(1)(12)
|
0.59%
|
(13)
|
|||||
Bruce A. Easterly
|
10,556
|
(1)(14)
|
0.36%
|
(13)
|
|||||
Bonnie M. McConnaughy
|
8,700
|
(1)(15)
|
0.30%
|
(13)
|
|||||
All Directors beneficial owners of more than 5% of our common stock and Executive Officers, 8 in number, as a Group
|
1,265,060
|
42.32%
|
-
|
$ |
-
|
-
|
|
(1)
|
All entries based on information provided to us by our directors and executive officers.
|
|
(2)
|
For purposes of this table, a person is considered to beneficially own shares of common stock if he or she directly or indirectly has or shares voting power, which includes the power to vote or to direct the voting of the shares, or investment power, which includes the power to dispose or direct the disposition of the shares, or if he/she has the right to acquire the shares under options which are exercisable currently or within 60 days of June 30, 2013. Each person named in the above table has sole voting power and sole investment power with respect to the indicated shares unless otherwise noted. A person is considered to have shared voting and investment power over shares indicated as being owned by the spouse or the IRA of the spouse of that person.
|
|
(3)
|
Includes 16,585 shares held in family limited partnerships and a corporate entity; 628,993 shares held individually; 25,930 shares issued to Mr. Regnier under the restricted stock award program; and 89,398 shares held in a family limited partnership with his spouse.
|
|
(4)
|
Consists of ____shares acquired once Mr. Regnier and related entities exercise their basic subscription rights; and ___ shares acquired once Mr. Regnier and related entities exercise their oversubscription rights, if available.
|
|
(5)
|
Consists of ____shares acquired once Mr. Alexander exercises his basic subscription rights; and ___ shares acquired once Mr. Alexander exercises his oversubscription rights, if available.
|
|
(6)
|
Consists of 3,600 shares held individually; 208,625 shares jointly held by Mr. McDonnell and his spouse in a trust. Mr. McDonnell is not a director or executive officer of the Company, but is a beneficial owner of over five percent of the outstanding common stock.
|
|
(7)
|
Consists of ___ shares acquired once Mr. McDonnell exercises his basic subscription rights; and ___ shares acquired once Mr. McDonnell exercises his oversubscription rights, if available.
|
|
(8)
|
|
(9)
|
|
(10)
|
|
(11)
|
|
(12)
|
Consists of 5,283 shares held individually; 1,600 shares issued to Mr. Fortino under the restricted stock award program; 9,567 shares jointly held by Mr. Fortino and his spouse in a trust; and 888 shares held individually by his spouse.
|
|
(13)
|
Consists of ___ shares acquired once Mr. Fortino exercises his basic subscription rights; and ___ shares to be acquired once Mr. Fortino exercises his oversubscription rights, if available.
|
|
(14)
|
Consists of 8,956 shares held individually; 1,600 shares issued to Mr. Easterly under the restricted stock award program.
|
|
(15)
|
Consists of 6,000 shares held individually; 1,100 shares jointly held by Ms. McConnaughy and her spouse; 1,600 shares issued to Ms. McConnaughy under the restricted stock award program.
|
|
·
|
were made in the ordinary course of business;
|
|
·
|
were made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other persons; and
|
|
·
|
did not involve more than the normal risk of collectability or present other unfavorable features.
|
2013
|
2012
|
||||||||
(in thousands)
|
(in thousands)
|
||||||||
Balance, beginning of year
|
$ | 13,632 | $ | 12,967 | |||||
New loans and advances
|
1,477 | 4,060 | |||||||
Repayments and reclassifications
|
(1,150 | ) | (3,395 | ) | |||||
Balance, end of period
|
$ | 13,959 | $ | 13,632 |
SUMMARY COMPENSATION TABLE
|
|||||||||||
Name and Principal Positions
|
Year
|
Salary
|
Bonus (1)
|
Long Term Retention Bonus (2)
|
Stock Awards (3)
|
All Other Comp (4)
|
Total
|
||||
Robert D. Regnier
President, Chief Executive Officer and Chairman of the Board of Directors of the Company; President, Chief Executive Officer and Director of the Bank
|
2012
|
$ |
272,700
|
$ |
-
|
$ |
-
|
$ 37,953
|
$ 12,254
|
$ 322,907
|
|
2011
|
$ |
265,200
|
$ |
-
|
$ |
-
|
$ 34,400
|
$ 12,082
|
$ 311,682
|
||
2010
|
$ |
265,200
|
$ |
-
|
$ |
-
|
$ 37,500
|
$ 12,472
|
$ 315,172
|
||
$ |
Mark A. Fortino
Chief Financial Officer of the Company; Executive Vice President and Chief Financial Officer of the Bank
|
2012
|
$ |
177,500
|
$ |
10,872
|
$ |
-
|
$ 8,500
|
$ 8,052
|
$ 204,924
|
|
2011
|
$ |
170,000
|
$ |
-
|
$ |
-
|
$ 4,300
|
$ 7,016
|
$ 181,316
|
||
2010
|
$ |
155,000
|
$ |
-
|
$ |
-
|
$ 4,500
|
$ 6,326
|
$ 165,826
|
||
Bruce A. Easterly
Executive Vice President – Chief Lending Officer of the Bank
|
2012
|
$ |
172,500
|
$ |
10,566
|
$ |
-
|
$ 8,500
|
$ 8,240
|
$ 199,806
|
|
2011
|
$ |
165,000
|
$ |
-
|
$ |
-
|
$ 4,300
|
$ 6,917
|
$ 176,217
|
||
2010
|
$ |
150,000
|
$ |
-
|
$ |
-
|
$ 4,500
|
$ 6,276
|
$ 160,776
|
||
Bonnie M. McConnaughy
Senior Vice President – Deposit Operations and e-Business Solutions if the Bank
|
2012
|
$ |
117,500
|
$ |
7,197
|
$ |
-
|
$ 8,500
|
$ 5,405
|
$ 138,602
|
|
2011
|
$ |
110,000
|
$ |
-
|
$ |
-
|
$ 4,300
|
$ 4,566
|
$ 118,866
|
||
2010
|
$ |
100,000
|
$ |
-
|
$ |
-
|
$ 4,500
|
$ 4,450
|
$ 108,950
|
(1)
|
Discretionary Bonus.
|
(2)
|
The Company did not meet the ROE requirements for bonus and thus no long term retention bonus was recorded for 2012, 2011 and 2010. Future payout of the award cannot be determined at this time and is dependent on several factors including future financial performance of the Company, as discussed under the Long-Term Retention Bonus Plan portion of the Compensation Discussion and Analysis.
|
(3)
|
In December 2012, the Board approved restricted stock awards for 2012 performance with a grant date of December 19, 2012. Mr. Regnier was awarded 8,930 shares of stock, which will not vest for the duration of the period that the Treasury holds any equity or debt position in the Company acquired under the CPP. Mr. Fortino, Mr. Easterly, and Ms. McConnaughy were each awarded 2,000 shares of restricted stock which vested immediately. Management’s estimate of the fair value of our common stock at grant date, December 19, 2012, was $4.25 per share based upon the last trade which occurred on December 19, 2012. In December 2011, the Board approved restricted stock awards for 2011 performance with a grant date of December 21, 2011. Mr. Regnier was awarded 8,000 shares of stock, which will not vest for the duration of the period that the Treasury holds any equity or debt position in the Company acquired under the CPP. Mr. Fortino, Mr. Easterly, and Ms. McConnaughy were each awarded 1,000 shares of restricted stock which vest on December 21. 2014. Management’s estimate of the fair value of our common stock at grant date, December 21, 2011, was $4.30 per share based upon the last trade which occurred on December 21, 2011. In December 2010, the Board approved restricted stock awards for 2010 performance with a grant date of December 15, 2010. Mr. Regnier was awarded 5,000 shares of stock, which will not vest for the duration of the period that the Treasury holds any equity or debt position in the Company acquired under the CPP. Mr. Fortino, Mr. Easterly, and Ms. McConnaughy were each awarded 600 shares of restricted stock
|
|
which vest on December 15, 2013. Management’s estimate of the fair value of our common stock at grant date, December 15, 2010, was $7.50 per share based upon the last trade which occurred on December 9, 2010.
|
(4)
|
All Other Compensation is comprised of the following amounts:
|
Name
|
401(k) Match
|
Profit Sharing Contribution
|
Premiums for Group Term Life Insurance
|
Cash Dividends Paid on Stock Awards (a)
|
Perquisites(b)
|
Service Awards
|
Total All Other Compensation
|
|
Robert D. Regnier
|
2012
|
$ 10,000
|
$ -
|
$ 1,650
|
$ -
|
$ 604
|
$ -
|
$ 12,254
|
2011
|
$ 9,800
|
$ -
|
$ 1,584
|
$ -
|
$ 698
|
$ -
|
$ 12,082
|
|
2010
|
$ 9,800
|
$ -
|
$ 1,584
|
$ -
|
$ 1,088
|
$ -
|
$ 12,472
|
|
Mark A. Fortino
|
2012
|
$ 7,812
|
$ -
|
$ 240
|
$ -
|
$ -
|
$ -
|
$ 8,052
|
2011
|
$ 6,800
|
$ -
|
$ 216
|
$ -
|
$ -
|
$ -
|
$ 7,016
|
|
2010
|
$ 6,200
|
$ -
|
$ 126
|
$ -
|
$ -
|
$ -
|
$ 6,326
|
|
Bruce A. Easterly
|
2012
|
$ 7,636
|
$ -
|
$ 354
|
$ -
|
$ -
|
$ 250
|
$ 8,240
|
2011
|
$ 6,601
|
$ -
|
$ 317
|
$ -
|
$ -
|
$ -
|
$ 6,918
|
|
2010
|
$ 6,000
|
$ -
|
$ 276
|
$ -
|
$ -
|
$ -
|
$ 6,276
|
|
Bonnie M. McConnaughy
|
2012
|
$ 5,209
|
$ -
|
$ 196
|
$ -
|
$ -
|
$ -
|
$ 5,405
|
2011
|
$ 4,400
|
$ -
|
$ 166
|
$ -
|
$ -
|
$ -
|
$ 4,566
|
|
|
(a)
|
No cash dividends were paid in 2012, 2011 and 2010.
|
|
(b)
|
Perquisites for Mr. Regnier include personal use of the Company car.
|
|
1.
|
Entitlement to a salary, adjusted annually by the Board;
|
|
2.
|
Eligibility for incentive awards under the 1998 Equity Incentive Plan, as determined by the Board;
|
|
3.
|
Entitlement to medical and disability insurance and other forms of health, life and other insurance and/or benefits provided by the Company to its employees; and
|
|
4.
|
Entitlement to paid time off and all other employee benefits provided by the Company to its employees, except for Mr. Regnier who is not eligible to participate in the Employee Stock Purchase Plan due to his greater than 5% ownership in the Company.
|
Plan Category
|
Number of
Common Shares to
be Issued upon
Exercise of
Outstanding Options, Warrants
and Rights
|
Weighted Average
Exercise Price of
Outstanding
Options, Warrants
and Rights
|
Number of
Common Shares
Remaining
Available for
Future Issuance
Under Equity Plans
(Excluding Shares
Reflected in
Column (a))
|
||
(a)
|
(b)
|
||||
Equity compensation plans approved by
stockholders
|
-
|
-
|
-
|
||
Equity compensation plans not approved by
stockholders
|
-
|
-
|
-
|
||
Total
|
$ -
|
$ -
|
$ -
|
||
Fees
Earned or
Paid in Cash(1)
|
Stock Awards (2)
|
Option Awards
|
Non –Equity Incentive Plan Compensation
|
All Other Compensation
|
Total Compensation
|
||||||
Name
|
Year
|
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
||||
Donald H. Alexander
|
2012
|
$ |
37,500
|
$ |
8,500
|
-
|
-
|
-
|
$ |
45,500
|
|
Robert D. Taylor
|
2012
|
$ |
17,950
|
$ |
8,500
|
-
|
-
|
-
|
$ |
26,450
|
|
James L. Gegg
|
2012
|
$ |
3,350
|
$ |
4,250
|
-
|
-
|
-
|
$ |
7,600
|
|
(1)
|
Fees earned were converted to shares of the Company’s common stock during 2012. In December, 2012, the following shares of common stock were issued to the non-employee directors: Mr. Alexander – 8,223 shares; Mr. Taylor – 3,989 shares; and Mr. Gegg – 745 shares.
|
(2)
|
All non-employee directors received 2,000 shares, except M. Gegg, who received 1,000 shares, which vested immediately. Management’s estimate of the fair value of our common stock at December 24, 2012, the grant date, was $4.25 per share based upon the last trade which occurred on December 19, 2012.
|
SEC registration fee
|
$1,288.00
|
||
Printing expenses
|
(1) *
|
||
Legal fees and expenses
|
(1) *
|
||
Accounting fees and expenses
|
(1) *
|
||
Blue sky fees and expenses
|
(1) *
|
||
Miscellaneous
|
(1) *
|
||
Total
|
(1) *
|
||
(1) To be filed by amendment.
|
|||
* Estimated pursuant to instruction to Rule 511 of Regulation S-K.
|
Exhibit No.
|
Description
|
|
3.1
|
Amended and Restated Articles of Incorporation of Blue Valley Ban Corp.
|
|
3.2
|
Bylaws, as amended, of Blue Valley Ban Corp.
|
|
3.3
|
Certificate of Designations dated December 3, 2008*
|
|
4.1
|
1998 Equity Incentive Plan*
|
|
4.2
|
1994 Stock Option Plan*
|
|
4.3
|
Agreement as to Expenses and Liabilities*
|
|
4.4
|
Indenture dated April 10, 2003, between Blue Valley Ban Corp. and Wilmington Trust Company*
|
|
4.5
|
Amended and Restated Declaration of Trust dated April 10, 2003*
|
|
4.6
|
Guarantee Agreement dated April 10, 2003*
|
|
4.7
|
Fee Agreement dated April 10, 2003*
|
|
4.8
|
Specimen of Floating Rate Junior Subordinated Debt Security*
|
|
4.9
|
Junior Subordinated Indenture dated as of July 29, 2005 between Blue Valley Ban Corp. and Wilmington Trust Company*
|
|
4.10
|
Amended and Restated Declaration of Trust dated July 29, 2005*
|
|
4.11
|
Guarantee Agreement dated July 29, 2005.*
|
|
4.12
|
Warrant to purchase Common Stock dated December 5, 2008*
|
|
5.1
|
Opinion of Husch Blackwell LLP
|
|
10.1
|
Promissory Note of Blue Valley Building dated July 15, 1994*
|
|
10.2
|
Mortgage, Assignment of Leases and Rents and Security Agreement between Blue Valley Building and Businessmen’s Assurance Company of America, dated July 15, 1994*
|
|
10.3
|
Assignment of Leases and Rents between Blue Valley Building and Businessmen’s Assurance Company of America dated July 15, 1994*
|
|
10.4
|
Line of Credit Note with JP Morgan Chase dated June 15, 2005*
|
|
10.5
|
Term Note with JP Morgan Chase dated June 15, 2005*
|
|
10.6
|
Letter Agreement dated December 5, 2008, including Securities Purchase Agreement – Standard Terms, incorporated by reference herein, between Blue Valley Ban Corp. and the United States Department of Treasury*
|
|
10.7
|
Amendment and Waiver by and among Bank of Blue Valley, Blue Valley Ban Corp. and its Senior Executive Officers*
|
|
11
|
Computation of per share earnings*
|
|
21
|
Subsidiaries of Blue Valley Ban Corp.*
|
|
23.1
|
Consent of BKD, LLP
|
|
23.2
|
Consent of Husch Blackwell LLP (included in Exhibit 5)
|
|
24
|
Power of attorney (contained in the signature page of the registration statement)
|
|
99 | Confidential draft registration statement submitted September 11, 2013 |
BLUE VALLEY BAN CORP. | |||
By: | /s/ Robert D. Regnier | ||
Robert D. Regnier, President, Chief Executive Officer
and Director (Principal Executive Officer)
|
|||
Signature
|
Title
|
Date
|
/s/ Robert D. Regnier | President, Chief Executive Officer and Director (Principal Executive Officer) | October 28, 2013 |
Robert D. Regnier
|
|
|
/s/ Mark A. Fortino | Chief Financial Officer (Principal Financial and Accounting Officer) | October 28, 2013 |
Mark A. Fortino
|
||
/s/ Donald H. Alexander | Director | October 28, 2013 |
Donald H. Alexander
|
||
/s/ Robert D Taylor | Director | October 28, 2013 |
Robert D. Taylor
|
|
|
/s/ James L. Gegg | Director | October 28, 2013 |
James L. Gegg
|
|
Exhibit No.
|
Description
|
|
3.1
|
Amended and Restated Articles of Incorporation of Blue Valley Ban Corp.
|
|
3.2
|
Bylaws, as amended, of Blue Valley Ban Corp.
|
|
3.3
|
Certificate of Designations dated December 3, 2008*
|
|
4.1
|
1998 Equity Incentive Plan*
|
|
4.2
|
1994 Stock Option Plan*
|
|
4.3
|
Agreement as to Expenses and Liabilities*
|
|
4.4
|
Indenture dated April 10, 2003, between Blue Valley Ban Corp. and Wilmington Trust Company*
|
|
4.5
|
Amended and Restated Declaration of Trust dated April 10, 2003*
|
|
4.6
|
Guarantee Agreement dated April 10, 2003*
|
|
4.7
|
Fee Agreement dated April 10, 2003*
|
|
4.8
|
Specimen of Floating Rate Junior Subordinated Debt Security*
|
|
4.9
|
Junior Subordinated Indenture dated as of July 29, 2005 between Blue Valley Ban Corp. and Wilmington Trust Company*
|
|
4.10
|
Amended and Restated Declaration of Trust dated July 29, 2005*
|
|
4.11
|
Guarantee Agreement dated July 29, 2005.*
|
|
4.12
|
Warrant to purchase Common Stock dated December 5, 2008*
|
|
5.1
|
Opinion of Husch Blackwell LLP
|
|
10.1
|
Promissory Note of Blue Valley Building dated July 15, 1994*
|
|
10.2
|
Mortgage, Assignment of Leases and Rents and Security Agreement between Blue Valley Building and Businessmen’s Assurance Company of America, dated July 15, 1994*
|
|
10.3
|
Assignment of Leases and Rents between Blue Valley Building and Businessmen’s Assurance Company of America dated July 15, 1994*
|
|
10.4
|
Line of Credit Note with JP Morgan Chase dated June 15, 2005*
|
|
10.5
|
Term Note with JP Morgan Chase dated June 15, 2005*
|
|
10.6
|
Letter Agreement dated December 5, 2008, including Securities Purchase Agreement – Standard Terms, incorporated by reference herein, between Blue Valley Ban Corp. and the United States Department of Treasury*
|
|
10.7
|
Amendment and Waiver by and among Bank of Blue Valley, Blue Valley Ban Corp. and its Senior Executive Officers*
|
|
11
|
Computation of per share earnings*
|
|
21
|
Subsidiaries of Blue Valley Ban Corp.*
|
|
23.1
|
Consent of BKD, LLP
|
|
23.2
|
Consent of Husch Blackwell LLP (included in Exhibit 5)
|
|
24
|
Power of attorney (contained in the signature page of the registration statement)
|
|
99 | Confidential draft registration statement submitted September 11, 2013 |
Report of Independent Registered Public Accounting Firm
|
F-2
|
|||
Condensed Consolidated Balance Sheets as of
June 30, 2012 and December 31, 2012
|
F-3
|
|||
Condensed Consolidated Statements of Operations as of
June 30, 2012 and December 31, 2012
|
F-5
|
|||
Condensed Consolidated Statements of Comprehensive Loss for the Six Months Ended
June 30, 2012 and 2012
|
F-6
|
|||
Condensed Consolidated Statements of Stockholders’ Equity for the
Six Months Ended June 30, 2012 and 2012
|
F-7
|
|||
Condensed Consolidated Statements of Cash Flows for the
Six Months Ended June 30, 2012 and 2012
|
F-8
|
|||
Notes To Condensed Consolidated Financial Statements for the
Six Months Ended June 30, 2012 and 2012
|
F-10
|
|||
Audited Financial Statements
|
||||
Report Of Independent Registered Public Accounting Firm
|
F-35
|
|||
Consolidated Balance Sheet for fiscal years ended
December 31, 2012, 2011 and 2010
|
F-36
|
|||
Consolidated Statement of Operations for fiscal years ended
December 31, 2012, 2011 and 2010
|
F-38
|
|||
Consolidated Statement Of Comprehensive Income (Loss) for fiscal years ended
December 31, 2012, 2011
|
F-39
|
|||
Consolidated Statements of Stockholders’ Equity for fiscal years ended
December 31, 2012, 2011 and 2010
|
F-40
|
|||
Consolidated Statements Of Cash Flow for fiscal years ended
December 31, 2012, 2011 and 2010
|
F-41
|
|||
Consolidated Notes To Financial Statements for fiscal years ended
December 31, 2012, 2011 and 2010
|
F-43
|
ASSETS
|
||||||||
(Unaudited)
|
||||||||
Cash and due from banks
|
$ | 24,911 | $ | 33,353 | ||||
Interest-bearing deposits in other financial institutions
|
56,455 | 67,724 | ||||||
Cash and cash equivalents
|
81,366 | 101,077 | ||||||
Available-for-sale securities
|
87,868 | 77,845 | ||||||
Mortgage loans held for sale, fair value
|
5,956 | 7,621 | ||||||
Loans, net of allowance for loan losses of $8,665 and $9,057 in 2013 and 2012,
|
||||||||
respectively
|
399,410 | 406,614 | ||||||
Premises and equipment, net
|
15,680 | 15,448 | ||||||
Foreclosed assets held for sale, net
|
27,993 | 31,936 | ||||||
Interest receivable
|
1,537 | 1,529 | ||||||
Deferred income taxes
|
2,537 | 1,121 | ||||||
Prepaid expenses and other assets
|
6,714 | 6,095 | ||||||
FHLBank stock, Federal Reserve Bank stock, and
|
7,608 | 7,540 | ||||||
other securities
|
||||||||
Core deposit intangible asset, at amortized cost
|
107 | 179 | ||||||
Total assets
|
$ | 636,776 | $ | 657,005 |
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
June 30, 2013
|
December 31, 2012
|
|||||||
(Unaudited)
|
||||||||
LIABILITIES
|
||||||||
Deposits
|
||||||||
Demand | ||||||||
Savings, NOW and money market
|
227,841 | 235,632 | ||||||
Time
|
122,397 | 135,136 | ||||||
Total deposits
|
452,169 | 484,466 | ||||||
Other interest-bearing liabilities
|
34,361 | 21,668 | ||||||
Long-term debt
|
101,449 | 101,111 | ||||||
Interest payable and other liabilities
|
10,932 | 9,945 | ||||||
Total liabilities
|
599,181 | 617,190 | ||||||
STOCKHOLDERS’ EQUITY
|
||||||||
Capital stock
|
||||||||
Preferred stock, $1 par value, $1,000 liquidation preference;
|
||||||||
Authorized 15,000,000 shares; issued and outstanding
|
||||||||
2013 – 21,750 shares; 2012 – 21,750 shares
|
22 | 22 | ||||||
Common stock, par value $1 per share;
|
||||||||
Authorized 15,000,000 shares; issued and outstanding
|
||||||||
2013 – 2,938,871 shares; 2012 – 2,934,123 shares
|
2,939 | 2,934 | ||||||
Additional paid in capital
|
38,792 | 38,746 | ||||||
Accumulated deficit
|
(2,079 | ) | (1,930 | ) | ||||
Accumulated other comprehensive (loss) income, net of income taxes
(credit) of $(1,386) in 2013 and $29 in 2012
|
(2,079 | ) | 43 | |||||
Total stockholders’ equity
|
37,595 | 39,815 | ||||||
Total liabilities and stockholders’ equity
|
$ | 636,776 | $ | 657,005 |
Six Months Ended
|
||||||||
June 30, 2013
|
June 30, 2012 | |||||||
(Unaudited)
|
(Unaudited) | |||||||
INTEREST AND DIVIDEND INCOME
|
||||||||
Interest and fees on loans
|
$ |
10,485
|
$ |
11,573
|
||||
Federal funds sold and other short-term investments
|
79
|
96
|
||||||
Available-for-sale securities
|
694
|
498
|
||||||
Dividends on FHLBank and Federal Reserve Bank stock
|
124
|
|
117
|
|||||
Total interest and dividend income
|
11,382
|
12,284
|
||||||
INTEREST EXPENSE
|
||||||||
Interest-bearing demand deposits
|
160
|
|
465
|
|||||
Savings and money market deposit accounts
|
138
|
|
154
|
|||||
Other time deposits
|
902
|
|
1,355
|
|||||
Federal funds purchased and other interest-bearing liabilities
|
12
|
|
20
|
|||||
Long-term debt, net
|
1,826
|
|
1,825
|
|||||
Total interest expense
|
3,038
|
|
3,819
|
|||||
NET INTEREST INCOME
|
8,344
|
|
8,465
|
|||||
|
||||||||
PROVISION FOR LOAN LOSSES
|
(500)
|
|
550
|
|||||
|
||||||||
NET INTEREST INCOME AFTER PROVISION FOR LOAN
|
|
|||||||
LOSSES
|
8,844
|
7,915
|
||||||
NON-INTEREST INCOME
|
||||||||
Loans held for sale fee income
|
770
|
931
|
||||||
Service fees
|
1,696
|
1,752
|
||||||
Realized gains on available-for-sale securities
|
127
|
- | ||||||
Other income
|
901
|
|
605
|
|||||
Total non-interest income
|
3,494
|
3,288
|
||||||
NON-INTEREST EXPENSE
|
||||||||
Salaries and employee benefits
|
5,322
|
5,105
|
||||||
Net occupancy expense
|
1,309
|
1,265
|
||||||
Foreclosed assets expense
|
2,198
|
1,372
|
||||||
Other operating expense
|
3,114
|
3,854
|
||||||
Total non-interest expense
|
11,943
|
|
11,596
|
|||||
|
||||||||
INCOME (LOSS) BEFORE INCOME TAXES
|
395
|
|
(393)
|
|||||
|
||||||||
BENEFIT FOR INCOME TAXES
|
-
|
|
(2)
|
|||||
|
||||||||
NET INCOME (LOSS)
|
395
|
|
(391)
|
|||||
|
||||||||
DIVIDENDS ON PREFERRED STOCK
|
544
|
|
544
|
|||||
|
||||||||
NET LOSS AVAILABLE TO COMMON STOCKHOLDERS
|
$(149)
|
$
|
(935)
|
|||||
|
||||||||
BASIC LOSS PER SHARE
|
$(0.05)
|
$
|
(0.33)
|
|||||
DILUTED LOSS PER SHARE
|
$(0.05)
|
$
|
(0.33)
|
Six Months Ended
|
||||||||
June 30, 2013
|
June 30, 2012
|
|||||||
(Unaudited)
|
(Unaudited)
|
|||||||
NET INCOME (LOSS)
|
$ | 395 | $ | (391 | ) | |||
OTHER COMPREHENSIVE INCOME (LOSS)
|
||||||||
Change in unrealized appreciation (depreciation) on available-for-sale securities,
|
||||||||
net of income taxes (credit) of $(1,415) and $85 for 2013 and 2012, respectively
|
(2,047 | ) | (128 | ) | ||||
Less: reclassification adjustment for realized (gains) losses included in
|
||||||||
net income, net of income tax credit of $51 for 2013
|
(76 | ) | - | |||||
Comprehensive loss
|
$ | (1,576 | ) | $ | (519 | ) |
Preferred
Stock
|
Common
Stock
|
Additional
Paid-In
Capital
|
Accumulated
Deficit
|
Accumulated
Other
Comprehensive
Income (Loss)
|
Total
|
|||||||||||||||||||
BALANCE, DECEMBER 31, 2011
|
$ | 22 | $ | 2,879 | $ | 38,511 | $ | (1,091 | ) | $ | 134 | $ | 40,455 | |||||||||||
Forfeiture of 5,440 shares of
|
||||||||||||||||||||||||
restricted stock
|
- | (5 | ) | 29 | - | - | 24 | |||||||||||||||||
Issuance of 6,508 shares common stock for
|
||||||||||||||||||||||||
the employee stock purchase plan
|
- | 6 | 20 | - | - | 26 | ||||||||||||||||||
Dividends on preferred stock
|
- | - | - | (544 | ) | - | (544 | ) | ||||||||||||||||
Net loss
|
- | - | - | (391 | ) | - | (391 | ) | ||||||||||||||||
Change in unrealized appreciation on
|
||||||||||||||||||||||||
available-for-sale securities, net of income
|
||||||||||||||||||||||||
tax credit of $85
|
- | - | - | - | (128 | ) | (128 | ) | ||||||||||||||||
BALANCE, JUNE 30, 2012
|
$ | 22 | $ | 2,880 | $ | 38,560 | $ | (2,026 | ) | $ | 6 | $ | 39,442 | |||||||||||
BALANCE, DECEMBER 31, 2012
|
$ | 22 | $ | 2,934 | $ | 38,746 | $ | (1,930 | ) | $ | 43 | $ | 39,815 | |||||||||||
Restricted stock earned
|
- | - | 31 | - | - | 31 | ||||||||||||||||||
Issuance of 4,748 shares common stock for
|
||||||||||||||||||||||||
the employee stock purchase plan
|
- | 5 | 15 | - | - | 20 | ||||||||||||||||||
Dividends on preferred stock
|
- | - | - | (544 | ) | - | (544 | ) | ||||||||||||||||
Net income
|
- | - | - | 395 | - | 395 | ||||||||||||||||||
Change in unrealized appreciation on
|
||||||||||||||||||||||||
available-for-sale securities, net of income
|
||||||||||||||||||||||||
tax credit of $1,415
|
- | - | - | - | (2,122 | ) | (2,122 | ) | ||||||||||||||||
BALANCE, JUNE 30, 2013
|
$ | 22 | $ | 2,939 | $ | 38,792 | $ | (2,079 | ) | $ | (2,079 | ) | $ | 37,595 |
Six Months Ended
|
||||||||
June 30, 2013
|
June 30, 2012
|
|||||||
(Unaudited)
|
(Unaudited)
|
|||||||
OPERATING ACTIVITIES
|
||||||||
Net income (loss)
|
$ | 395 | $ | (393 | ) | |||
Adjustments to reconcile net income (loss) to net cash
|
||||||||
From operating activities:
|
||||||||
Depreciation and amortization
|
833 | 834 | ||||||
Amortization (accretion) of premiums and discounts on available-for-sale securities
|
87 | (42 | ) | |||||
Provision for loan losses
|
(500 | ) | 550 | |||||
Provision for losses on foreclosed assets held for sale
|
1,473 | 427 | ||||||
Deferred income taxes
|
- | (3 | ) | |||||
Stock dividends on FHLBank ("FHLB") stock
|
(68 | ) | (58 | ) | ||||
Increase in value of bank owned life insurance
|
(170 | ) | (75 | ) | ||||
Net realized gains on available-for-sale securities
|
(127 | ) | - | |||||
Net loss (gain) on sale of foreclosed assets
|
121 | (68 | ) | |||||
Restricted stock earned and forfeited
|
31 | 24 | ||||||
Compensation expense related to the Employee Stock Purchase Plan
|
3 | 1 | ||||||
Originations of loans held for sale
|
(33,731 | ) | (31,492 | ) | ||||
Proceeds from the sale of loans held for sale
|
35,229 | 34,793 | ||||||
Realized (gain) loss on loans held for sale fair value adjustment
|
167 | (6 | ) | |||||
Changes in:
|
||||||||
Interest receivable
|
(8 | ) | 128 | |||||
Net fair value of loan related commitments
|
(92 | ) | (55 | ) | ||||
Prepaid expenses and other assets
|
(357 | ) | (244 | ) | ||||
Interest payable and other liabilities
|
441 | 842 | ||||||
Net cash provided by operating activities
|
3,727 | 5,163 | ||||||
INVESTING ACTIVITIES
|
||||||||
Net change in loans
|
4,226 | (5,020 | ) | |||||
Proceeds from sale of loan participations
|
2,930 | 2,396 | ||||||
Purchase of premises and equipment
|
(655 | ) | (256 | ) | ||||
Proceeds from the sale of foreclosed assets, net of expenses
|
3,275 | 3,607 | ||||||
Purchase of priority lien on foreclosed assets
|
(378 | ) | - | |||||
Purchases of available-for-sale securities
|
(48,844 | ) | (59,961 | ) | ||||
Proceeds from maturities of available-for-sale securities
|
29,923 | 56,000 | ||||||
Proceeds from the redemption of FHLB and Federal Reserve Bank stock
|
- | 31 | ||||||
Proceeds from sale of available-for-sale securities
|
5,399 | - | ||||||
Net cash used in investing activities
|
(4,124 | ) | (3,203 | ) | ||||
FINANCING ACTIVITIES
|
||||||||
Net increase (decrease) in demand deposits, money market, NOW and savings accounts
|
(19,558 | ) | 7,866 | |||||
Net decrease in time deposits
|
(12,739 | ) | (8,672 | ) | ||||
Net increase in federal funds purchased and other interest-bearing liabilities
|
12,963 | 2,101 | ||||||
Net proceeds from the sale of stock through Employee Stock Purchase Plan
|
20 | 27 | ||||||
Net cash provided by (used in) financing activities
|
(19,314 | ) | 1,322 | |||||
Increase (decrease) in cash and cash equivalents
|
(19,711 | ) | 3,282 | |||||
Cash and cash equivalents, beginning of period
|
101,077 | 99,899 | ||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD
|
$ | 81,366 | $ | 103,181 |
Six Months Ended
|
||||||||
June 30, 2013
|
June 30, 2012
|
|||||||
(Unaudited)
|
(Unaudited)
|
|||||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION
|
||||||||
Cash paid during the year for:
|
||||||||
Interest
|
$ | 2,551 | $ | 2,881 | ||||
Noncash investing and financing activities:
|
||||||||
Transfer of loans to foreclosed property, net of specific allowance
|
$ | 545 | $ | 8,536 | ||||
Preferred dividends accrued but not paid
|
$ | 544 | $ | 544 | ||||
Sale and financing of foreclosed assets
|
$ | - | $ | 736 |
Six Months Ended June 30,
|
||||||||
2013
|
2012
|
|||||||
(amounts in thousands, except share and per share data)
|
||||||||
Net income (loss)
|
$ | 395 | $ | (391 | ) | |||
Preferred dividends
|
(544 | ) | (544 | ) | ||||
Net loss available to common stockholders
|
$ | (149 | ) | $ | (935 | ) | ||
Average common shares outstanding
|
2,907,302 | 2,850,354 | ||||||
Average common share stock options outstanding and
|
||||||||
restricted stock (B)
|
17,954 | 13,865 | ||||||
Average diluted common shares (B)
|
2,925,256 | 2,864,219 | ||||||
Basic loss per share
|
$ | (0.05 | ) | $ | (0.33 | ) | ||
Diluted loss per share (A)
|
$ | (0.05 | ) | $ | (0.33 | ) |
(A)
|
No shares or stock options, restricted stock or warrants were included in the computation of diluted earnings per share for any period there was a loss.
|
(B)
|
Warrants to purchase 111,083 shares of common stock at an exercise price of $29.37 per share were outstanding at June 30, 2013 and 2012 , but were not included in the computation of diluted earnings per share because the warrants’ exercise price was greater than the average market price of the common shares, thus making the warrants anti-dilutive. Stock options to purchase 0 and 10,575 shares of common stock were outstanding at June 30, 2013 and 2012, respectively, but were not included in the computation of diluted earnings per share because the option's exercise price was greater than the average market price of the common shares, thus making the options anti-dilutive.
|
June 30, 2013
|
||||||||||||||||
Amortized Cost
|
Gross Unrealized Gains
|
Gross Unrealized Losses
|
Fair Value
|
|||||||||||||
(in thousands)
|
||||||||||||||||
U.S. Government sponsored agencies
|
$ | 63,125 | $ | - | $ | (1,992 | ) | $ | 61,133 | |||||||
Municipal securities
|
17,295 | - | (1,349 | ) | 15,946 | |||||||||||
U.S. Government sponsored agency mortgage backed securities
|
5,037 | - | (22 | ) | 5,015 | |||||||||||
U.S. Small Business Administration loan pool certificates
|
5,277 | - | (102 | ) | 5,175 | |||||||||||
Equity and other securities
|
600 | - | (1 | ) | 599 | |||||||||||
$ | 91,334 | $ | - | $ | (3,466 | ) | $ | 87,868 | ||||||||
December 31, 2012
|
||||||||||||||||
Amortized Cost
|
Gross Unrealized Gains
|
Gross Unrealized Losses
|
Fair Value
|
|||||||||||||
(in thousands)
|
||||||||||||||||
U.S. Government sponsored agencies
|
$ | 63,123 | $ | 68 | $ | (43 | ) | $ | 63,148 | |||||||
Municipal securities
|
14,051 | 176 | (153 | ) | 14,074 | |||||||||||
Equity and other securities
|
600 | 23 | - | 623 | ||||||||||||
$ | 77,774 | $ | 267 | $ | (196 | ) | $ | 77,845 | ||||||||
Amortized Cost
|
Fair Value
|
|||||||
(in thousands)
|
||||||||
Due in one year or less
|
$ | - | $ | - | ||||
Due after one year through five years
|
- | - | ||||||
Due after five years through ten years
|
409 | 388 | ||||||
Due after ten years
|
80,011 | 76,691 | ||||||
Total
|
80,420 | 77,079 | ||||||
U.S. Government sponsored agency mortgage backed securities
|
5,037 | 5,015 | ||||||
U.S. Small Business Administration loan pool certificates
|
5,277 | 5,175 | ||||||
Equity and other securities
|
600 | 599 | ||||||
$ | 91,334 | $ | 87,868 |
June 30, 2013
|
||||||||||||||||||||||||
Less than 12 Months
|
12 Months or More
|
Total
|
||||||||||||||||||||||
Description of Securities
|
Fair Value
|
Unrealized Losses
|
Fair Value
|
Unrealized Losses
|
Fair Value
|
Unrealized Losses
|
||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||
U.S. Government sponsored agencies
|
$ | 56,133 | $ | 1,992 | $ | - | $ | - | $ | 56,133 | $ | 1,992 | ||||||||||||
Municipal securities
|
15,050 | 1,349 | - | - | 15,050 | 1,349 | ||||||||||||||||||
U.S. Government sponsored agency
|
5,015 | 22 | - | - | 5,015 | 22 | ||||||||||||||||||
mortgage backed securities
|
||||||||||||||||||||||||
U.S. Small Business Administration
|
5,175 | 102 | - | - | 5,175 | 102 | ||||||||||||||||||
loan pool certificates
|
||||||||||||||||||||||||
Equity and other securities
|
599 | 1 | - | - | 599 | 1 | ||||||||||||||||||
Total temporarily impaired securities
|
$ | 81,972 | $ | 3,466 | $ | - | $ | - | $ | 81,972 | $ | 3,466 | ||||||||||||
December 31, 2012
|
||||||||||||||||||||||||
Description of Securities
|
Less than 12 Months
|
12 Months or More
|
Total
|
|||||||||||||||||||||
Fair Value
|
Unrealized Losses
|
Fair Value
|
Unrealized Losses
|
Fair Value
|
Unrealized Losses
|
|||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||
U.S. Government sponsored agencies
|
$ | 27,832 | $ | 43 | $ | - | $ | - | $ | 27,832 | $ | 43 | ||||||||||||
Municipal securities
|
6,153 | 153 | - | - | 6,153 | 153 | ||||||||||||||||||
Total temporarily impaired securities
|
$ | 33,985 | $ | 196 | $ | - | $ | - | $ | 33,985 | $ | 196 |
June 30,
|
December 31,
|
|||||||
2013
|
2012
|
|||||||
(in thousands)
|
||||||||
Balance
|
$ | 34,631 | $ | 21,668 | ||||
Carrying value of securities pledged to secure agreements to repurchase
|
$ | 36,724 | $ | 37,059 | ||||
Average balance during the period of securities sold under agreements
|
||||||||
to repurchase during six month period ending June 30, 2013 and year ending December 31, 2012
|
$ | 29,462 | $ | 18,663 | ||||
Maximum amount outstanding at any month-end during the six-month
|
||||||||
period ending June 30, 2013 and year ending December 31, 2012
|
$ | 34,631 | $ | 22,071 |
Amounts Reclassified From
Accumulated Other
Comprehensive Income
Six Months Ended
|
||||||
June 30, 2013
|
June 30, 2012
|
Affected line items in the Condensed
Consolidated Statements of Operations
|
||||
(Unaudited
|
(Unaudited)
|
|||||
(in thousands)
|
||||||
Unrealized gains on available-for-sale securities
|
$ |
127
|
$ |
-
|
Realized gains on available-for-sale securities
(Total reclassified amount before tax)
|
|
Income Taxes
|
51
|
-
|
Benefit for income taxes
|
|||
Total reclassifications out of accumulated other comprehensive income
|
$ |
76
|
$ |
-
|
||
June 30,
|
December 31,
|
|||||||
2013
|
2012
|
|||||||
(in thousands)
|
||||||||
Commercial loans
|
$ | 119,435 | $ | 115,520 | ||||
Commercial real estate loans
|
133,304 | 143,198 | ||||||
Construction loans
|
47,082 | 46,515 | ||||||
Home equity loans
|
45,412 | 49,529 | ||||||
Residential real estate loans
|
46,616 | 43,584 | ||||||
Lease financing
|
9,512 | 10,054 | ||||||
Consumer loans
|
6,704 | 7,271 | ||||||
Total loans
|
408,065 | 415,671 | ||||||
Less: Allowance for loan losses
|
8,655 | 9,057 | ||||||
Net loans
|
$ | 399,410 | $ | 406,614 |
As of or For the Six Months Ended June 30, 2013
|
||||||||||||||||||||||||||||||||
Commercial
|
Commercial
Real Estate
|
Construction
|
Home
Equity
|
Real Estate
|
Lease
Financing
|
Consumer
|
Total
|
|||||||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||||||||||
Allowance for loan losses:
|
||||||||||||||||||||||||||||||||
Balance, beginning of period
|
$ | 2,097 | $ | 3,582 | $ | 1,543 | $ | 634 | $ | 1,138 | $ | 46 | $ | 17 | $ | 9,057 | ||||||||||||||||
Provision charged to
|
(557 | ) | (1,067 | ) | 1,063 | 75 | 11 | (25 | ) | - | (500 | ) | ||||||||||||||||||||
expense
|
||||||||||||||||||||||||||||||||
Losses charged off
|
(44 | ) | - | - | - | (68 | ) | - | - | (112 | ) | |||||||||||||||||||||
Recoveries
|
59 | 12 | 86 | 21 | 30 | - | 2 | 210 | ||||||||||||||||||||||||
Balance, end of period
|
$ | 1,555 | $ | 2,527 | $ | 2,692 | $ | 730 | 1,111 | $ | 21 | $ | 19 | $ | 8,655 | |||||||||||||||||
As of or For the Six Months Ended June 30, 2012
|
||||||||||||||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||||||||||
Allowance for loan losses:
|
||||||||||||||||||||||||||||||||
Balance, beginning of period
|
$ | 2,987 | $ | 3,772 | $ | 2,721 | $ | 1,338 | $ | 2,312 | $ | 30 | $ | 29 | $ | 13,189 | ||||||||||||||||
Provision charged to
|
1,575 | 247 | (210 | ) | (334 | ) | (700 | ) | (11 | ) | (17 | ) | 550 | |||||||||||||||||||
expense
|
||||||||||||||||||||||||||||||||
Losses charged off
|
(1,875 | ) | (1,335 | ) | (883 | ) | (104 | ) | (488 | ) | - | - | (4,685 | ) | ||||||||||||||||||
Recoveries
|
102 | 8 | 176 | 39 | 18 | - | 2 | 345 | ||||||||||||||||||||||||
Balance, end of period
|
$ | 2,789 | $ | 2,692 | $ | 1,804 | $ | 939 | $ | 1,142 | $ | 19 | $ | 14 | $ | 9,399 |
June 30, 2013 | |||||||||||||||
Commercial
|
Commercial
Real Estate
|
Construction
|
Home
Equity
|
Residential
Real Estate
|
Lease
Financing
|
Consumer
|
Total
|
||||||||
(in thousands)
|
||||||||||||||||||||||||||||||||||
Allowance for loan losses:
|
||||||||||||||||||||||||||||||||||
Individually evaluated
|
||||||||||||||||||||||||||||||||||
for impairment
|
$ | 359 | $ | 758 | $ | 1,638 | $ | 129 | $ | 553 | $ | - | $ | - | $ | 3,437 | ||||||||||||||||||
Collectively evaluated
|
||||||||||||||||||||||||||||||||||
for impairment
|
1,196 | 1,769 | 1,054 | 601 | 558 | 21 | 19 | 5,218 | ||||||||||||||||||||||||||
Total
|
$ | 1,555 | $ | 2,527 | $ | 2,692 | $ | 730 | $ | 1,111 | $ | 21 | $ | 19 | $ | 8,655 | ||||||||||||||||||
Loans:
|
||||||||||||||||||||||||||||||||||
Individually evaluated for
|
||||||||||||||||||||||||||||||||||
impairment
|
$ | 14,746 | $ | 7,590 | $ | 13,503 | $ | 1,072 | $ | 4,010 | $ | - | $ | 2 | $ | 40,923 | ||||||||||||||||||
Collectively evaluated for
|
||||||||||||||||||||||||||||||||||
impairment
|
104,689 | 125,714 | 33,579 | 44,340 | 42,606 | 9,512 | 6,702 | 367,142 | ||||||||||||||||||||||||||
Total
|
$ | 119,435 | $ | 133,304 | $ | 47,082 | $ | 45,412 | $ | 46,616 | $ | 9,512 | $ | 6,704 | $ | 408,065 | ||||||||||||||||||
December 31, 2012
|
Commercial
|
Commercial
Real Estate
|
Construction
|
Home
Equity
|
Residential
Real Estate
|
Lease
Financing
|
Consumer
|
Total
|
(in thousands)
|
||||||||||||||||||||||||||||||||||
Allowance for loan losses:
|
||||||||||||||||||||||||||||||||||
Individually evaluated for
|
||||||||||||||||||||||||||||||||||
impairment
|
$ | 550 | $ | 1,812 | $ | 564 | $ | 143 | $ | 331 | $ | - | $ | - | $ | 3,400 | ||||||||||||||||||
Collectively evaluated for
|
||||||||||||||||||||||||||||||||||
impairment
|
1,547 | 1,770 | 979 | 491 | 807 | 46 | 17 | 5,657 | ||||||||||||||||||||||||||
Total
|
$ | 2,097 | $ | 3,582 | $ | 1,543 | $ | 634 | $ | 1,138 | $ | 46 | $ | 17 | $ | 9,057 | ||||||||||||||||||
Loans:
|
||||||||||||||||||||||||||||||||||
Individually evaluated for
|
||||||||||||||||||||||||||||||||||
impairment
|
$ | 15,092 | $ | 9,437 | $ | 12,548 | $ | 1,315 | $ | 4,135 | $ | - | $ | - | 42,527 | |||||||||||||||||||
Collectively evaluated for
|
||||||||||||||||||||||||||||||||||
impairment
|
100,428 | 133,761 | 33,967 | 48,214 | 39,449 | 10,054 | 7,271 | 373,144 | ||||||||||||||||||||||||||
Total
|
115,520 | 143,198 | 46,515 | 49,529 | 43,584 | 10,054 | 7,271 | 415,671 |
|
Pass – loans that exhibit acceptable financial performance cash flow, leverage and where the probability of default is considered low.
|
|
Classified – loans are inadequately protected by the current payment capacity of the obligor or by the collateral pledged. These loans are characterized by the distinct probability that the Company will sustain some loss or added expenses if the deficiencies are not corrected.
|
June 30, 2013
|
December 31, 2012
|
Pass
|
Classified
|
Total
|
Pass
|
Classified
|
Total
|
|
||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||
Commercial
|
$ | 116,833 | $ | 2,602 | $ | 119,435 | $ | 112,679 | $ | 2,841 | $ | 115,520 | ||||||||||||
Commercial real estate
|
128,043 | 5,261 | 133,304 | 136,397 | 6,801 | 143,198 | ||||||||||||||||||
Construction
|
35,061 | 12,021 | 47,082 | 35,589 | 10,926 | 46,515 | ||||||||||||||||||
Home equity
|
45,176 | 236 | 45,412 | 49,299 | 230 | 49,529 | ||||||||||||||||||
Residential real estate
|
43,562 | 3,054 | 46,616 | 41,228 | 2,356 | 43,584 | ||||||||||||||||||
Lease financing
|
9,512 | - | 9,512 | 10,054 | - | 10,054 | ||||||||||||||||||
Consumer
|
6,704 | - | 6,704 | 7,271 | - | 7,271 | ||||||||||||||||||
Total
|
$ | 384,891 | $ | 23,174 | $ | 408,065 | $ | 392,517 | $ | 23,154 | $ | 415,671 |
June 30, 2013
|
||||||||||||||||||||||||||||
Total Loans >
|
||||||||||||||||||||||||||||
30-59 Days
|
60-89 Days
|
Greater than
|
Total Past
|
Total Loans
|
90 Days and
|
|||||||||||||||||||||||
(in thousands)
|
Past Due
|
Past Due
|
90 Days
|
Due
|
Current
|
Receivable
|
Accruing
|
|||||||||||||||||||||
Commercial
|
$ | 105 | $ | 29 | $ | 101 | $ | 234 | $ | 119,201 | $ | 119,435 | - | |||||||||||||||
Commercial real estate
|
- | - | - | - | 133,304 | 133,304 | - | |||||||||||||||||||||
Construction
|
- | - | 910 | 910 | 46,172 | 47,082 | - | |||||||||||||||||||||
Home equity
|
8 | - | - | 8 | 45,404 | 45,412 | - | |||||||||||||||||||||
Residential real estate
|
229 | 185 | 1,345 | 1,759 | 44,857 | 46,616 | - | |||||||||||||||||||||
Lease financing
|
- | - | - | - | 9,512 | 9,512 | - | |||||||||||||||||||||
Consumer
|
- | - | - | - | 6,704 | 6,704 | - | |||||||||||||||||||||
Total
|
$ | 342 | $ | 213 | $ | 2,356 | $ | 2,911 | $ | 405,154 | $ | 408,065 | - | |||||||||||||||
December 31, 2012
|
||||||||||||||||||||||||||||
Commercial
|
$ | 110 | $ | - | $ | 365 | $ | 475 | $ | 115,045 | $ | 115,520 | - | |||||||||||||||
Commercial real estate
|
- | - | - | - | 143,198 | 143,198 | - | |||||||||||||||||||||
Construction
|
- | - | 910 | 910 | 45,605 | 46,515 | - | |||||||||||||||||||||
Home equity
|
- | - | - | - | 49,529 | 49,529 | - | |||||||||||||||||||||
Residential real estate
|
766 | 605 | 569 | 1,940 | 41,644 | 43,584 | - | |||||||||||||||||||||
Lease financing
|
- | - | - | - | 10,054 | 10,054 | - | |||||||||||||||||||||
Consumer
|
- | - | - | - | 7,271 | 7,271 | - | |||||||||||||||||||||
Total
|
$ | 876 | $ | 605 | $ | 1,844 | $ | 3,325 | $ | 412,346 | $ | 415,671 | - |
June 30, 2013
|
||||||||||||||||||||
(in thousands)
|
Recorded Balance
|
Unpaid Principal Balance
|
Specific Allowance
|
Average Investment in Impaired Loans
|
Interest Income Recognized
|
|||||||||||||||
Loans without a specific valuation allowance:
|
||||||||||||||||||||
Commercial
|
$ | 620 | $ | 670 | $ | - | $ | 959 | $ | 14 | ||||||||||
Commercial real estate
|
509 | 509 | - | 513 | 18 | |||||||||||||||
Construction
|
1,677 | 1,677 | - | 1,680 | 24 | |||||||||||||||
Home equity
|
- | - | - | - | - | |||||||||||||||
Residential real estate
|
3,287 | 3,465 | - | 3,261 | 73 | |||||||||||||||
Lease financing
|
204 | 204 | - | 226 | 7 | |||||||||||||||
Consumer
|
- | - | - | - | - | |||||||||||||||
Loans with a specific valuation allowance:
|
||||||||||||||||||||
Commercial
|
$ | 555 | $ | 578 | $ | 175 | $ | 592 | $ | 9 | ||||||||||
Commercial real estate
|
1,537 | 1,568 | 954 | 1,526 | - | |||||||||||||||
Construction
|
2,250 | 2,250 | 142 | 8,601 | 231 | |||||||||||||||
Home equity
|
175 | 176 | 69 | 174 | - | |||||||||||||||
Residential real estate
|
1,124 | 1,171 | 538 | 1,508 | 1 | |||||||||||||||
Lease financing
|
- | - | - | - | - | |||||||||||||||
Consumer
|
- | - | - | - | - | |||||||||||||||
Total:
|
||||||||||||||||||||
Commercial
|
$ | 1,175 | $ | 1,248 | $ | 175 | $ | 1,551 | $ | 23 | ||||||||||
Commercial real estate
|
$ | 2,046 | $ | 2,077 | $ | 954 | $ | 2,039 | $ | 18 | ||||||||||
Construction
|
$ | 3,927 | $ | 3,927 | $ | 142 | $ | 10,281 | $ | 255 | ||||||||||
Home equity
|
$ | 175 | $ | 176 | $ | 69 | $ | 174 | $ | - | ||||||||||
Residential real estate
|
$ | 4,411 | $ | 4,636 | $ | 538 | $ | 4,770 | $ | 75 | ||||||||||
Lease financing
|
$ | 204 | $ | 204 | $ | - | $ | 226 | $ | 7 | ||||||||||
Consumer
|
$ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
Total
|
$ | 11,938 | $ | 12,268 | $ | 1,878 | $ | 19,041 | $ | 377 |
December 31, 2012
|
||||||||||||||||||||
(in thousands)
|
Recorded Balance
|
Unpaid Principal Balance
|
Specific Allowance
|
Average Investment in Impaired Loans
|
Interest Income Recognized
|
|||||||||||||||
Loans without a specific valuation allowance:
|
||||||||||||||||||||
Commercial
|
$ | 877 | $ | 916 | $ | - | $ | 694 | $ | 106 | ||||||||||
Commercial real estate
|
521 | 521 | - | 1,798 | 71 | |||||||||||||||
Construction
|
1,684 | 1,684 | - | 1,699 | 40 | |||||||||||||||
Home equity
|
- | - | - | 287 | 4 | |||||||||||||||
Residential real estate
|
1,201 | 1,336 | - | 847 | 57 | |||||||||||||||
Lease financing
|
233 | 233 | - | 169 | 16 | |||||||||||||||
Consumer
|
- | - | - | - | - | |||||||||||||||
Loans with a specific valuation allowance:
|
||||||||||||||||||||
Commercial
|
$ | 643 | $ | 657 | $ | 241 | $ | 2,240 | $ | 42 | ||||||||||
Commercial real estate
|
1,537 | 1,567 | 1,000 | 2,741 | 49 | |||||||||||||||
Construction
|
10,016 | 10,016 | 490 | 10,915 | 466 | |||||||||||||||
Home equity
|
175 | 176 | 81 | 1,919 | - | |||||||||||||||
Residential real estate
|
3,332 | 3,376 | 1,262 | 3,016 | 183 | |||||||||||||||
Lease financing
|
- | - | - | 100 | - | |||||||||||||||
Consumer
|
- | - | - | - | - | |||||||||||||||
Total:
|
||||||||||||||||||||
Commercial
|
$ | 1,520 | $ | 1,573 | $ | 241 | $ | 2,934 | $ | 148 | ||||||||||
Commercial real estate
|
$ | 2,058 | $ | 2,088 | $ | 1,000 | $ | 4,539 | $ | 120 | ||||||||||
Construction
|
$ | 11,700 | $ | 11,700 | $ | 490 | $ | 12,614 | $ | 506 | ||||||||||
Home equity
|
$ | 175 | $ | 176 | $ | 81 | $ | 2,206 | $ | 4 | ||||||||||
Residential real estate
|
$ | 4,533 | $ | 4,712 | $ | 1,262 | $ | 3,863 | $ | 240 | ||||||||||
Lease financing
|
$ | 233 | $ | 233 | $ | - | $ | 269 | $ | 16 | ||||||||||
Consumer
|
$ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
Total
|
$ | 20,219 | $ | 20,482 | $ | 3,074 | $ | 26,425 | $ | 1,034 |
June 30, 2013
|
December 31, 2012
|
|||||
(in thousands)
|
||||||
Commercial
|
$ |
890
|
$ |
1,131
|
||
Commercial real estate
|
1,511
|
1,537
|
||||
Construction
|
910
|
910
|
||||
Home equity
|
171
|
175
|
||||
Residential real estate
|
1,942
|
1,084
|
||||
Lease financing
|
-
|
-
|
||||
Consumer
|
-
|
-
|
||||
$ |
5,425
|
$ |
4,837
|
June 30, 2013
|
December 31, 2012
|
|||||||||||||||||||||||
Number of Loans
|
Pre-Modification Outstanding Recorded Balance
|
Post-Modification Outstanding Recorded Balance
|
Number of Loans
|
Pre-Modification Outstanding Recorded Balance
|
Post-Modification Outstanding Recorded Balance
|
|||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||
Commercial
|
- | $ | - | $ | - | 1 | $ | 85 | $ | 85 | ||||||||||||||
Commercial real estate
|
- | - | - | - | - | - | ||||||||||||||||||
Construction
|
- | - | - | - | - | - | ||||||||||||||||||
Home equity
|
- | - | - | - | - | - | ||||||||||||||||||
Residential real estate
|
- | - | - | 1 | 371 | 371 | ||||||||||||||||||
Lease financing
|
- | - | - | - | - | - | ||||||||||||||||||
Consumer
|
- | - | - | - | - | - | ||||||||||||||||||
- | $ | - | $ | - | 2 | $ | 456 | $ | 456 |
June 30, 2013
|
December 31, 2012
|
|||||||||
(in thousands)
|
||||||||||
FHLBank advances (A)
|
$ |
82,500
|
$ |
82,500
|
||||||
Less: Deferred prepayment penalty on modification of FHLB advances
|
(639
|
) |
(977
|
) | ||||||
Net FHLBank advances
|
81,861
|
81,523
|
||||||||
Subordinated Debentures – BVBC Capital Trust II (B)
|
7,732
|
7,732
|
||||||||
Subordinated Debentures – BVBC Capital Trust III (C)
|
11,856
|
11,856
|
||||||||
Total long-term debt
|
$ |
101,449
|
$ |
101,111
|
(A) | Due in 2013, 2014, 2015, 2016 and 2018; collateralized by various assets including mortgage-backed loans and available for sale securities. The interest rates on the advances range from 0.37% to 4.26%. Federal Home Loan Bank advance availability is determined quarterly and at June 30, 2013, approximately $6,952,216 was available. In the third quarter of 2010, the Company repaid $42,500,000 of FHLB advances by rolling the net present value of the advances being repaid into the funding cost of $42,500,000 of new advances. A $2,569,000 penalty was associated with paying off the original FHLB advances which will be amortized as an adjustment of interest expense over the remaining term of the new FHLB advances using the straight line method. This transaction reduced the effective interest rate, as well as modified the maturity date on these borrowings. | ||
(B)
|
Due in 2033; interest only at LIBOR + 3.25% (3.52% at June 30, 2013 and 3.56% at December 31, 2012) due quarterly; fully and unconditionally guaranteed by the Company on a subordinated basis to the extent that the funds are held by the Trust. BVBC Capital Trust II issued and sold $7,500,000 in Capital Securities to third parties and $232,000 of Common Securities to the Company. The Company may prepay the subordinated debentures beginning in 2008, in whole or in part, at their face value plus accrued interest. | ||
(C) | Due in 2035; interest only at LIBOR + 1.60% (1.87% at June 30, 2013 and 1.91% at December 31, 2012) due quarterly; fully and unconditionally guaranteed by the Company on a subordinated basis to the extent that the funds are held by the Trust. BVBC Capital Trust III issued and sold $11,500,000 in Preferred Securities to third parties and $356,000 in Common Securities to the Company. Subordinated to the trust preferred securities (B) due in 2033. The Company may prepay the subordinated debentures, in whole or in part, at their face value plus accrued interest. |
(in thousands)
|
||||
July 1 to December 31, 2013
|
$ | 20,000 | ||
2014
|
7,500 | |||
2015
|
20,000 | |||
2016
|
10,000 | |||
2017
|
- | |||
Thereafter
|
44,588 | |||
102,088 | ||||
Less: Deferred prepayment penalty on modification of FHLB advances
|
(639 | ) | ||
$ | 101,449 |
Level 1
|
Quoted prices in active markets for identical assets or liabilities
|
|
Level 2
|
Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
|
|
Level 3
|
Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
|
Fair Value Measurements Using
|
||||||||||||||||
Quoted Prices in Active Markets for Identical Assets
|
Significant Other Observable Inputs
|
Unobservable Inputs
|
||||||||||||||
Fair Value
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
|||||||||||||
(in thousands)
|
||||||||||||||||
June 30, 2013:
|
||||||||||||||||
Assets:
|
||||||||||||||||
Available-for-sale securities:
|
||||||||||||||||
U.S. Government sponsored agencies
|
$ | 61,133 | $ | - | $ | 61,133 | $ | - | ||||||||
Municipal securities
|
15,946 | - | 15,946 | - | ||||||||||||
U.S Government sponsored agency mortgage backed securities
|
5,015 | - | 5,015 | - | ||||||||||||
U.S Small Business Administration loan pool certificates
|
5,175 | - | 5,175 | - | ||||||||||||
Equity and other securities
|
599 | 599 | - | - | ||||||||||||
Mortgage loans held for sale
|
5,956 | - | 5,956 | - | ||||||||||||
Commitments to originate loans
|
- | - | - | - | ||||||||||||
Forward sales commitments
|
292 | - | - | 292 | ||||||||||||
Total assets
|
$ | 94,116 | $ | 599 | $ | 93,225 | $ | 292 | ||||||||
Liabilities:
|
||||||||||||||||
Commitments to originate loans
|
$ | - | $ | - | $ | - | $ | - | ||||||||
Forward sales commitments
|
- | - | - | - | ||||||||||||
Total liabilities
|
$ | - | $ | - | $ | - | $ | - | ||||||||
December 31, 2012:
|
||||||||||||||||
Assets:
|
||||||||||||||||
Available-for-sale securities:
|
||||||||||||||||
U.S. Government sponsored agencies
|
$ | 63,148 | $ | - | $ | 63,148 | $ | - | ||||||||
Municipal securities
|
14,074 | - | 14,074 | - | ||||||||||||
Equity and other securities
|
623 | 623 | - | - | ||||||||||||
Mortgage loans held for sale
|
7,621 | - | 7,621 | - | ||||||||||||
Commitments to originate loans
|
- | - | - | - | ||||||||||||
Forward sales commitments
|
184 | - | - | 184 | ||||||||||||
Total assets
|
$ | 85,650 | $ | 623 | $ | 84,843 | $ | 184 | ||||||||
Liabilities:
|
||||||||||||||||
Commitments to originate loans
|
$ | - | $ | - | $ | - | $ | - | ||||||||
Forward sales commitments
|
1 | - | - | 1 | ||||||||||||
Total liabilities
|
$ | 1 | $ | - | $ | - | $ | 1 |
Commitments to Originate Loans
|
Forward Sales Commitments
|
|||||||
(in thousands)
|
||||||||
Balance as of December 31, 2012
|
$ | - | $ | 183 | ||||
Total realized and unrealized gains (losses)
|
||||||||
Included in net income
|
- | 109 | ||||||
Balance as of June 30, 2013
|
$ | - | $ | 292 | ||||
Balance as of December 31, 2011
|
$ | 7 | $ | 100 | ||||
Total realized and unrealized gains (losses)
|
||||||||
Included in net income
|
(3 | ) | (53 | ) | ||||
Balance as of June 30, 2012
|
$ | 4 | $ | 47 |
Fair Value Measurements Using
|
||||||||||||||||
Fair Value
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
Significant Other Observable Inputs (Level 2)
|
Unobservable Inputs (Level 3)
|
|||||||||||||
(in thousands)
|
||||||||||||||||
June 30, 2013:
|
||||||||||||||||
Impaired loans, net of reserves
|
$ | 917 | $ | - | $ | - | $ | 917 | ||||||||
Foreclosed assets held for sale, net
|
8,712 | - | - | 8,712 | ||||||||||||
Total
|
$ | 9,629 | $ | - | $ | - | $ | 9,629 | ||||||||
December 31, 2012:
|
||||||||||||||||
Impaired loans, net of reserves
|
$ | 5,480 | $ | - | $ | - | $ | 5,480 | ||||||||
Foreclosed assets held for sale, net
|
17,894 | - | - | 17,894 | ||||||||||||
Total
|
$ | 23,374 | $ | - | $ | - | $ | 23,374 | ||||||||
Fair Value at
June 30, 2013
|
Valuation
Technique
|
Unobservable Inputs
|
Range
(Weighted
Average)
|
|||||||
Forward sales commitments
|
$ | 292 |
Market comparable
|
Quoted prices for similar loans
|
2.75%-4.125% | |||||
prices
|
(3.32%) | |||||||||
Collateral-dependent
|
$ | 917 |
Market comparable
|
Quoted prices for similar loans
|
9.00%-85.00% | |||||
impaired loans
|
properties
|
(25.00%) | ||||||||
Foreclosed assets held for
|
$ | 8,712 |
Market comparable
|
Comparability adjustments (%)
|
Not available
|
|||||
sale, net
|
properties
|
June 30, 2013
|
December 31, 2012
|
|||||||||||||||
Carrying Amount
|
Fair Value
|
Carrying Amount
|
Fair Value
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Financial assets:
|
||||||||||||||||
Cash and cash equivalents (Level 1)
|
$ | 81,366 | $ | 81,366 | $ | 101,077 | $ | 101,077 | ||||||||
Loans, net of allowance for loan losses (Level 3)
|
399,410 | 402,500 | 406,614 | 408,041 | ||||||||||||
FHLBank stock, Federal Reserve
|
||||||||||||||||
Bank stock, and other securities (Level 3)
|
7,608 | 7,608 | 7,540 | 7,540 | ||||||||||||
Interest receivable (Level 3)
|
1,537 | 1,537 | 1,529 | 1,529 | ||||||||||||
Financial liabilities:
|
||||||||||||||||
Deposits (Level 3)
|
452,169 | 454,199 | 484,466 | 487,059 | ||||||||||||
Securities sold under agreement to repurchase
|
||||||||||||||||
and other interest-bearing liabilities (Level 3)
|
34,631 | 34,631 | 21,668 | 21,668 | ||||||||||||
Long-term debt (Level 3)
|
101,449 | 94,091 | 101,111 | 95,216 | ||||||||||||
Interest payable (Level 3)
|
4,652 | 4,652 | 4,166 | 4,166 | ||||||||||||
Unrecognized financial instruments
|
||||||||||||||||
(net of amortization):
|
||||||||||||||||
Commitments to extend credit (Level 3)
|
- | - | - | - | ||||||||||||
Letters of credit (Level 3)
|
- | - | - | - | ||||||||||||
Lines of credit (Level 3)
|
- | - | - | - | ||||||||||||
2012
|
2011
|
|||||||
Cash and due from banks
|
$ | 33,353 | $ | 23,480 | ||||
Interest bearing deposits in other financial institutions
|
67,724 | 76,419 | ||||||
Federal funds sold
|
– | – | ||||||
Cash and cash equivalents
|
101,077 | 99,899 | ||||||
Available-for-sale securities
|
77,845 | 61,790 | ||||||
Mortgage loans held for sale, fair value
|
7,621 | 5,686 | ||||||
Loans, net of allowance for loan losses of $9,057 and $13,189 in 2012 and 2011, respectively
|
406,614 | 425,654 | ||||||
Premises and equipment, net
|
15,448 | 15,897 | ||||||
Foreclosed assets held for sale, net
|
31,936 | 29,246 | ||||||
Interest receivable
|
1,529 | 1,573 | ||||||
Deferred income taxes
|
1,121 | 911 | ||||||
Prepaid expenses and other assets
|
6,095 | 6,106 | ||||||
Federal Home Loan Bank stock, Federal Reserve Bank stock, and
other securities
|
7,540 | 7,369 | ||||||
Core deposit intangible asset, at amortized cost
|
179 | 321 | ||||||
Total assets
|
$ | 657,005 | $ | 654,452 |
2012
|
2011
|
|||||||
LIABILITIES
|
||||||||
Deposits
|
||||||||
Demand
|
$ | 113,698 | $ | 100,842 | ||||
Savings, NOW and money market
|
235,632 | 222,984 | ||||||
Time
|
135,136 | 166,587 | ||||||
Total deposits
|
484,466 | 490,413 | ||||||
Other interest-bearing liabilities
|
21,668 | 15,372 | ||||||
Long-term debt
|
101,111 | 100,434 | ||||||
Interest payable and other liabilities
|
9,945 | 7,778 | ||||||
Total liabilities
|
617,190 | 613,997 | ||||||
STOCKHOLDERS’ EQUITY
|
||||||||
Capital stock
|
||||||||
Preferred stock, $1 par value, $1,000 liquidation preference
Authorized 15,000,000 shares; issued and outstanding
2012 – 21,750 shares; 2011 – 21,750 shares
|
22 | 22 | ||||||
Common stock, par value $1 per share;
Authorized 15,000,000 shares; issued and outstanding
2012 – 2,934,123 shares; 2011 – 2,879,158 shares
|
2,934 | 2,879 | ||||||
Additional paid-in capital
|
38,746 | 38,511 | ||||||
Accumulated deficit
|
(1,930 | ) | (1,091 | ) | ||||
Accumulated other comprehensive income, net of income tax of
$29 in 2012 and $89 in 2011
|
43 | 134 | ||||||
Total stockholders’ equity
|
39,815 | 40,455 | ||||||
Total liabilities and stockholders’ equity
|
$ | 657,005 | $ | 654,452 | ||||
2012
|
2011
|
2010
|
||||||||||
INTEREST AND DIVIDEND INCOME
|
||||||||||||
Interest and fees on loans
|
$ | 22,853 | $ | 25,277 | $ | 28,011 | ||||||
Federal funds sold and other short-term investments
|
193 | 151 | 245 | |||||||||
Available-for-sale securities
|
1,097 | 1,202 | 1,825 | |||||||||
Dividends on Federal Home Loan Bank and
Federal Reserve Bank stock
|
240 | 225 | 222 | |||||||||
Total interest and dividend income
|
24,383 | 26,855 | 30,303 | |||||||||
INTEREST EXPENSE
|
||||||||||||
Interest-bearing demand deposits
|
700 | 1,611 | 2,343 | |||||||||
Savings and money market deposit accounts
|
291 | 346 | 438 | |||||||||
Other time deposits
|
2,487 | 3,755 | 7,746 | |||||||||
Federal funds purchased and other interest-bearing liabilities
|
44 | 41 | 45 | |||||||||
Long-term debt, net
|
3,670 | 3,502 | 3,791 | |||||||||
Total interest expense
|
7,192 | 9,255 | 14,363 | |||||||||
NET INTEREST INCOME
|
17,191 | 17,600 | 15,940 | |||||||||
PROVISION FOR LOAN LOSSES
|
1,200 | 3,300 | 3,095 | |||||||||
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES
|
15,991 | 14,300 | 12,845 | |||||||||
NON-INTEREST INCOME
|
||||||||||||
Loans held for sale fee income
|
2,447 | 2,120 | 3,506 | |||||||||
NSF charges and service fees
|
980 | 944 | 1,062 | |||||||||
Other service charges
|
2,472 | 2,276 | 2,021 | |||||||||
Realized gains on available-for-sale securities
|
– | – | 885 | |||||||||
Other income
|
1,535 | 984 | 1,145 | |||||||||
Total non-interest income
|
7,434 | 6,324 | 8,619 | |||||||||
NON-INTEREST EXPENSE
|
||||||||||||
Salaries and employee benefits
|
10,587 | 10,955 | 11,753 | |||||||||
Net occupancy expense
|
2,568 | 2,599 | 2,756 | |||||||||
Foreclosed assets expense
|
2,647 | 5,219 | 2,708 | |||||||||
Other operating expense
|
7,506 | 7,851 | 8,550 | |||||||||
Total non-interest expense
|
23,308 | 26,624 | 25,767 | |||||||||
INCOME (LOSS) BEFORE INCOME TAXES
|
117 | (6,000 | ) | (4,303 | ) | |||||||
PROVISION (BENEFIT) FOR INCOME TAXES
|
||||||||||||
Provision (benefit) for income taxes
|
50 | (2,777 | ) | (1,561 | ) | |||||||
Valuation allowance for deferred tax asset
|
(200 | ) | 12,600 | – | ||||||||
Total provision (benefit) for income taxes
|
(150 | ) | 9,823 | (1,561 | ) | |||||||
NET INCOME (LOSS)
|
267 | (15,823 | ) | (2,742 | ) | |||||||
DIVIDENDS AND ACCRETION ON PREFERRED STOCK
|
1,106 | 1,106 | 1,105 | |||||||||
NET LOSS AVAILABLE TO COMMON SHAREHOLDERS
|
$ | (839 | ) | $ | (16,929 | ) | $ | (3,847 | ) | |||
BASIC LOSS PER SHARE
|
$ | (0.29 | ) | $ | (6.03 | ) | $ | (1.38 | ) | |||
DILUTED LOSS PER SHARE
|
$ | (0.29 | ) | $ | (6.03 | ) | $ | (1.38 | ) |
2012
|
2011
|
2010
|
||||||||||
NET INCOME (LOSS)
|
$ | 267 | $ | (15,823 | ) | $ | (2,742 | ) | ||||
OTHER COMPREHENSIVE INCOME (LOSS)
|
||||||||||||
Change in unrealized appreciation on available-for-sale securities, net of income taxes (credit) of $(60) in 2012, $69 in 2011 and $305 in 2010
|
(91 | ) | 104 | 458 | ||||||||
Less: reclassification adjustment for realized gains (losses) included in net loss, net of income tax credit of $354 in 2010
|
– | – | (531 | ) | ||||||||
Comprehensive income (loss)
|
176 | (15,719 | ) | (2,815 | ) |
Retained
|
Accumulated
|
|||||||||||||||||||||||
Additional
|
Earnings
|
Other
|
||||||||||||||||||||||
Preferred
|
Common
|
Paid-In
|
(Accumulated
|
Comprehensive
|
||||||||||||||||||||
Stock
|
Stock
|
Capital
|
Deficit)
|
Income (Loss)
|
Total
|
|||||||||||||||||||
BALANCE, DECEMBER 31, 2009
|
$ | 22 | $ | 2,818 | $ | 37,975 | $ | 19,685 | $ | 103 | $ | 60,603 | ||||||||||||
Issuance of 29,640 shares of restricted stock, net of forfeitures of 7,454
|
22 | 406 | 428 | |||||||||||||||||||||
Issuance of 3,645 shares of common stock for the employee stock purchase plan
|
3 | 32 | 35 | |||||||||||||||||||||
Net loss
|
(2,742 | ) | (2,742 | ) | ||||||||||||||||||||
Accretion of discount on preferred shares
|
18 | (18 | ) | – | ||||||||||||||||||||
Dividend on preferred shares
|
(1,087 | ) | (1,087 | ) | ||||||||||||||||||||
Change in unrealized appreciation on available-for-sale securities, net of income taxes (credit) of $(49)
|
(73 | ) | (73 | ) | ||||||||||||||||||||
BALANCE, DECEMBER 31, 2010
|
$ | 22 | $ | 2,843 | $ | 38,431 | $ | 15,838 | $ | 30 | $ | 57,164 | ||||||||||||
Issuance of 40,666 shares of restricted stock, net of forfeitures of 7,437
|
33 | 44 | 77 | |||||||||||||||||||||
Issuance of 2,628 shares of common stock for the employee stock purchase plan
|
3 | 18 | 21 | |||||||||||||||||||||
Net loss
|
(15,823 | ) | (15,823 | ) | ||||||||||||||||||||
Accretion of discount on preferred shares
|
18 | (18 | ) | – | ||||||||||||||||||||
Dividend on preferred shares
|
(1,088 | ) | (1,088 | ) | ||||||||||||||||||||
Change in unrealized appreciation on available-for-sale securities, net of income taxes of $69
|
104 | 104 | ||||||||||||||||||||||
BALANCE, DECEMBER 31, 2011
|
$ | 22 | $ | 2,879 | $ | 38,511 | $ | (1,091 | ) | $ | 134 | $ | 40,455 | |||||||||||
Issuance of 55,155 shares of restricted stock, net of forfeitures of 6,698
|
48 | 197 | 245 | |||||||||||||||||||||
Issuance of 6,508 shares of common stock for the employee stock purchase plan
|
7 | 20 | 27 | |||||||||||||||||||||
Net income
|
267 | 267 | ||||||||||||||||||||||
Accretion of discount on preferred shares
|
18 | (18 | ) | – | ||||||||||||||||||||
Dividend on preferred shares
|
(1,088 | ) | (1,088 | ) | ||||||||||||||||||||
Change in unrealized appreciation on available-for-sale securities, net of income taxes (credit) of $(60)
|
(91 | ) | (91 | ) | ||||||||||||||||||||
BALANCE, DECEMBER 31, 2012
|
$ | 22 | $ | 2,934 | $ | 38,746 | $ | (1,930 | ) | $ | 43 | $ | 39,815 |
2012
|
2011
|
2010
|
||||||||||
OPERATING ACTIVITIES
|
||||||||||||
Net income (loss)
|
$ | 267 | $ | (15,823 | ) | $ | (2,742 | ) | ||||
Adjustments to reconcile net income (loss) to net cash provided
by operating activities:
|
||||||||||||
Depreciation and amortization
|
1,686 | 1,661 | 1,298 | |||||||||
Accretion, net of amortization of premiums and discounts on available-for-sale securities
|
(14 | ) | (62 | ) | (73 | ) | ||||||
Provision for loan losses
|
1,200 | 3,300 | 3,095 | |||||||||
Provision for losses on foreclosed assets held for sale
|
867 | 3,159 | 734 | |||||||||
Deferred income taxes
|
(150 | ) | 9,823 | (1,561 | ) | |||||||
Stock dividends on FHLBank (FHLB) stock
|
(124 | ) | (106 | ) | (104 | ) | ||||||
Increase in value of bank owned life insurance
|
(170 | ) |
─
|
─
|
||||||||
Net realized gains on available-for-sale securities
|
─
|
─
|
(885 | ) | ||||||||
Net gain on sale of foreclosed assets
|
(337 | ) | (555 | ) | (168 | ) | ||||||
Restricted stock earned and forfeited
|
245 | 77 | 428 | |||||||||
Compensation expense related to the Employee Stock Purchase Plan
|
3 | 4 | 3 | |||||||||
Originations of loans held for sale
|
(83,477 | ) | (66,014 | ) | (135,930 | ) | ||||||
Proceeds from the sale of loans held for sale
|
81,540 | 68,668 | 136,487 | |||||||||
Realized (gain) loss on loans held for sale fair value adjustment
|
2 | (178 | ) | 33 | ||||||||
Changes in:
|
||||||||||||
Interest receivable
|
44 | 210 | 520 | |||||||||
Net fair value of loan related commitments
|
(92 | ) | 257 | (128 | ) | |||||||
Income taxes receivable
|
─
|
─
|
2,746 | |||||||||
Prepaid expenses and other assets
|
270 | (172 | ) | 981 | ||||||||
Interest payable and other liabilities
|
1,077 | 490 | 116 | |||||||||
Net cash provided by operating activities
|
2,837 | 4,739 | 4,850 | |||||||||
INVESTING ACTIVITIES
|
||||||||||||
Net change in loans
|
5,666 | 28,561 | 42,909 | |||||||||
Proceeds from sale of loan participations
|
2,675 | 2,854 | 32 | |||||||||
Purchase of premises and equipment
|
(417 | ) | (499 | ) | (226 | ) | ||||||
Proceeds from the sale of foreclosed assets, net of expenses
|
6,281 | 5,638 | 9,077 | |||||||||
Purchases of available-for-sale securities
|
(107,192 | ) | (64,915 | ) | (134,932 | ) | ||||||
Proceeds from maturities of available-for-sale securities
|
91,000 | 67,000 | 115,000 | |||||||||
Proceeds from sale of available-for-sale securities
|
─
|
─
|
29,885 | |||||||||
Purchases of bank owned life insurance
|
─
|
(4,000 | ) |
─
|
||||||||
Purchases of FHLB and Federal Reserve Bank stock
and other securities
|
(79 | ) | (100 | ) |
─
|
|||||||
Proceeds from the redemption of FHLB stock, Federal Reserve Bank stock, and other securities
|
31 |
─
|
─
|
|||||||||
Net cash provided by (used in) investing activities
|
(2,035 | ) | 34,539 | 61,745 | ||||||||
FINANCING ACTIVITIES
|
||||||||||||
Net increase in demand deposits, money market, NOW and savings accounts
|
25,504 | 4,444 | 23,979 | |||||||||
Net decrease in time deposits
|
(31,451 | ) | (55,249 | ) | (72,871 | ) | ||||||
Net increase (decrease) in federal funds purchased and other interest-bearing liabilities
|
6,296 | (3,376 | ) | 2,628 | ||||||||
Repayments of long-term debt
|
─
|
─
|
(42,500 | ) | ||||||||
Proceeds from long-term debt
|
─
|
─
|
42,500 | |||||||||
Prepayment penalty on modification of FHLB advances
|
─
|
─
|
(2,569 | ) | ||||||||
Net proceeds from the sale of stock through Employee Stock Purchase Plan
|
27 | 21 | 35 | |||||||||
Net cash provided by (used in) financing activities
|
376 | (54,160 | ) | (48,798 | ) | |||||||
Increase (decrease) in cash and cash equivalents
|
1,178 | (14,882 | ) | 17,797 | ||||||||
Cash and cash equivalents, beginning of year
|
99,899 | 114,781 | 96,984 | |||||||||
CASH AND CASH EQUIVALENTS, END OF YEAR
|
$ | 101,077 | $ | 99,899 | $ | 114,781 |
2012
|
2011
|
2010
|
SUPPLEMENTAL CASH FLOWS INFORMATION
|
||||||||||||
Cash paid during the year for:
|
||||||||||||
Interest
|
$ | 6,254 | $ | 8,717 | $ | 14,372 | ||||||
Income taxes, net of refunds | $ | - | $ | 1 | $ | (2,750 | ) | |||||
Noncash investing and financing activities:
|
||||||||||||
Transfer of loans to foreclosed property, net of specific allowance
|
$ | 10,518 | $ | 17,354 | $ | 10,352 | ||||||
Restricted stock issued
|
$ | 48 | $ | 33 | $ | 22 | ||||||
Preferred dividends accrued but not paid
|
$ | 1,088 | $ | 1,088 | $ | 1,087 | ||||||
Sale and financing of foreclosed assets
|
$ | 1,018 | $ | 268 | $ | 819 |
Buildings and improvements
|
35-40 years
|
Furniture and equipment
|
3-10 years
|
2012
|
2011
|
2010
|
||||||||||
(In thousands, except share and per share data)
|
||||||||||||
Net Income (loss)
|
$ | 267 | $ | (15,823 | ) | $ | (2,742 | ) | ||||
Dividends and accretion on preferred stock
|
(1,106 | ) | (1,106 | ) | (1,105 | ) | ||||||
Net loss available to common shareholders
|
$ | (839 | ) | $ | (16,929 | ) | $ | (3,847 | ) | |||
Average common shares outstanding
|
2,855,566 | 2,806,299 | 2,773,039 | |||||||||
Average common share stock options outstanding and restricted stock (B)
|
11,997 | 21,589 | 15,115 | |||||||||
Average diluted common shares (B)
|
2,867,563 | 2,827,888 | 2,788,154 | |||||||||
Basic loss per share
|
$(0.29 | ) | $(6.03 | ) | $(1.38 | ) | ||||||
Diluted loss per share (A)
|
$(0.29 | ) | $(6.03 | ) | $(1.38 | ) | ||||||
(A) | No shares of stock options, restricted stock or warrants were included in the computation of diluted earnings per share for any period there was a loss. | ||
(B) | Warrants to purchase 111,083 shares of common stock at an exercise price of $29.37 per share were outstanding at December 31, 2012, 2011 and 2010, but were not included in the computation of diluted earnings per share because the warrant’s exercise price was greater than the average market price of the common shares, thus making the warrants anti-dilutive. Stock options to purchase 0, 10,575, and 24,375 shares of common stock were outstanding at December 31, 2012, 2011 and 2010 respectively, but were not included in the computation of diluted earnings per share because the option’s exercise price was greater than the average market price of the common shares, thus making the options anti-dilutive. |
December 31, 2012
|
||||||||||||||||
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair Value
|
|||||||||||||
(In thousands)
|
||||||||||||||||
U.S. Government sponsored agencies
|
$ | 63,123 | $ | 68 | $ | (43 | ) | $ | 63,148 | |||||||
Municipal securities
|
14,051 | 176 | (153 | ) | 14,074 | |||||||||||
Equity and other securities
|
600 | 23 | – | 623 | ||||||||||||
$ | 77,774 | $ | 267 | $ | (196 | ) | $ | 77,845 |
December 31, 2011
|
||||||||||||||||
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair Value
|
|||||||||||||
(In thousands)
|
||||||||||||||||
U.S. Government sponsored agencies
|
$ | 60,967 | $ | 228 | $ | (24 | ) | $ | 61,171 | |||||||
Equity and other securities
|
600 | 19 | – | 619 | ||||||||||||
$ | 61,567 | $ | 247 | $ | (24 | ) | $ | 61,790 |
Amortized
Cost
|
Fair Value
|
|||||||
(In thousands)
|
||||||||
Due in one year or less
|
$ | 0 | $ | 0 | ||||
Due after one year through five years
|
0 | 0 | ||||||
Due after five years through ten years
|
410 | 407 | ||||||
Due after ten years
|
76,764 | 76,815 | ||||||
Total
|
77,174 | 77,222 | ||||||
Equity and other securities
|
600 | 623 | ||||||
$ | 77,774 | $ | 77,845 |
December 31, 2012
|
||||||||||||||||||||||||
Less than 12 Months
|
12 Months or More
|
Total
|
Total
|
|||||||||||||||||||||
Description of
Securities
|
Fair Value
|
Unrealized
Losses
|
Fair Value
|
Unrealized
Losses
|
Fair Value
|
Unrealized
Losses
|
||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||
U.S. Government sponsored agencies
|
$ | 27,832 | $ | 43 | $ | – | $ | – | $ | 27,832 | $ | 43 | ||||||||||||
Municipal securities
|
6,153 | 153 | – | – | 6,153 | 153 | ||||||||||||||||||
Total temporarily impaired securities
|
$ | 33,985 | $ | 196 | $ | – | $ | – | $ | 33,985 | $ | 196 |
December 31, 2011
|
||||||||||||||||||||||||
Less than 12 Months
|
12 Months or More
|
Total
|
Total
|
|||||||||||||||||||||
Description of
Securities
|
Fair Value
|
Unrealized
Losses
|
Fair Value
|
Unrealized
Losses
|
Fair Value
|
Unrealized
Losses
|
||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||
U.S. Government sponsored agencies
|
$ | 19,973 | $ | 24 | $ | – | $ | – | $ | 19,973 | $ | 24 | ||||||||||||
Total temporarily impaired securities
|
$ | 19,973 | $ | 24 | $ | – | $ | – | $ | 19,973 | $ | 24 |
2012
|
2011
|
|||||||
(In thousands)
|
||||||||
Balance as of December 31
|
$ | 21,668 | $ | 14,413 | ||||
Carrying value of securities pledged to secure agreements to repurchases
at December 31
|
$ | 37,059 | $ | 24,131 | ||||
Average balance during the year of securities sold under agreements to repurchase
|
$ | 18,663 | $ | 16,405 | ||||
Maximum amount outstanding at any month-end during the year
|
$ | 22,071 | $ | 18,633 |
2012
|
2011
|
|||||||
(In thousands)
|
||||||||
Commercial loans
|
$ | 115,520 | $ | 130,398 | ||||
Commercial real estate loans
|
143,198 | 154,109 | ||||||
Construction loans
|
46,515 | 48,438 | ||||||
Home equity loans
|
49,529 | 59,750 | ||||||
Residential real estate loans
|
43,584 | 37,882 | ||||||
Lease financing
|
10,054 | 2,268 | ||||||
Consumer loans
|
7,271 | 5,998 | ||||||
Total loans
|
415,671 | 438,843 | ||||||
Less: Allowance for loan losses
|
9,057 | 13,189 | ||||||
Net loans
|
$ | 406,614 | $ | 425,654 |
For the Year Ended December 31, 2012
|
||||||||||||||||||||||||||||||||
(In thousands)
|
Commercial
|
Commercial Real Estate
|
Construction
|
Home Equity
|
Residential Real Estate
|
Lease Financing
|
Consumer
|
Total
|
||||||||||||||||||||||||
Allowance for loan losses:
|
||||||||||||||||||||||||||||||||
Balance, beginning of year
|
$ | 2,987 | $ | 3,772 | $ | 2,721 | $ | 1,338 | $ | 2,312 | $ | 30 | $ | 29 | $ | 13,189 | ||||||||||||||||
Provision charged to expense
|
961 | 2,029 | (777 | ) | (345 | ) | (677 | ) | 25 | (16 | ) | 1,200 | ||||||||||||||||||||
Losses charged off
|
(2,030 | ) | (2,239 | ) | (882 | ) | (417 | ) | (540 | ) | (9 | ) | – | (6,117 | ) | |||||||||||||||||
Recoveries
|
179 | 20 | 481 | 58 | 43 | - | 4 | 785 | ||||||||||||||||||||||||
Balance, end of year
|
$ | 2,097 | $ | 3,582 | $ | 1,543 | $ | 634 | $ | 1,138 | $ | 46 | $ | 17 | $ | 9,057 | ||||||||||||||||
For the Year Ended December 31, 2011
|
||||||||||||||||||||||||||||||||
Commercial
|
Commercial Real Estate
|
Construction
|
Home Equity
|
Residential Real Estate
|
Lease Financing
|
Consumer
|
Total
|
|||||||||||||||||||||||||
Allowance for loan losses:
|
||||||||||||||||||||||||||||||||
Balance, beginning of year
|
$ | 3,339 | $ | 3,974 | $ | 4,579 | $ | 1,262 | $ | 1,488 | $ | 38 | $ | 51 | $ | 14,731 | ||||||||||||||||
Provision charged to expense
|
(52 | ) | 925 | 434 | 753 | 1,304 | (33 | ) | (31 | ) | 3,300 | |||||||||||||||||||||
Losses charged off
|
(582 | ) | (1,218 | ) | (2,352 | ) | (725 | ) | (637 | ) | – | – | (5,514 | ) | ||||||||||||||||||
Recoveries
|
282 | 91 | 60 | 48 | 157 | 25 | 9 | 672 | ||||||||||||||||||||||||
Balance, end of year
|
$ | 2,987 | $ | 3,772 | $ | 2,721 | $ | 1,338 | $ | 2,312 | $ | 30 | $ | 29 | $ | 13,189 | ||||||||||||||||
For the Year Ended December 31, 2010
|
||||||||||||||||||||||||||||||||
Commercial
|
Commercial Real Estate
|
Construction
|
Home Equity
|
Residential Real Estate
|
Lease Financing
|
Consumer
|
Total
|
|||||||||||||||||||||||||
Allowance for loan losses:
|
||||||||||||||||||||||||||||||||
Balance, beginning of year
|
$ | 3,630 | $ | 7,253 | $ | 5,929 | $ | 1,061 | $ | 1,737 | $ | 238 | $ | 152 | $ | 20,000 | ||||||||||||||||
Provision charged to expense
|
683 | (465 | ) | 2,189 | 571 | 400 | (171 | ) | (112 | ) | 3,095 | |||||||||||||||||||||
Losses charged off
|
(1,364 | ) | (2,985 | ) | (3,662 | ) | (387 | ) | (660 | ) | (43 | ) | (7 | ) | (9,108 | ) | ||||||||||||||||
Recoveries
|
390 | 171 | 123 | 17 | 11 | 14 | 18 | 744 | ||||||||||||||||||||||||
Balance, end of year
|
$ | 3,339 | $ | 3,974 | $ | 4,579 | $ | 1,262 | $ | 1,488 | $ | 38 | $ | 51 | $ | 14,731 | ||||||||||||||||
NOTE 3: LOANS AND ALLOWANCE FOR LOAN LOSSES (Continued)
The following tables present the balance in the allowance for loan losses and the recorded investment in loans based on portfolio segment and impairment methods as of December 31, 2012 and 2011:
|
||||||||||||||||||||||||||||||||
December 31, 2012
|
||||||||||||||||||||||||||||||||
(In thousands)
|
Commercial
|
Commercial Real Estate
|
Construction
|
Home Equity
|
Residential Real Estate
|
Lease Financing
|
Consumer
|
Total
|
||||||||||||||||||||||||
Allowance for loan losses:
|
||||||||||||||||||||||||||||||||
Individually evaluated for
impairment
|
$ | 550 | $ | 1,812 | $ | 564 | $ | 143 | $ | 331 | $ | – | $ | – | $ | 3,400 | ||||||||||||||||
Collectively evaluated for impairment
|
1,547 | 1,770 | 979 | 491 | 807 | 46 | 17 | 5,657 | ||||||||||||||||||||||||
Total
|
$ | 2,097 | $ | 3,582 | $ | 1,543 | $ | 634 | $ | 1,138 | $ | 46 | $ | 17 | $ | 9,057 | ||||||||||||||||
Loans:
|
||||||||||||||||||||||||||||||||
Individually evaluated for
impairment
|
$ | 15,092 | $ | 9,437 | $ | 12,548 | $ | 1,315 | $ | 4,135 | $ | – | $ | – | $ | 42,527 | ||||||||||||||||
Collectively evaluated for impairment
|
100,428 | 133,761 | 33,967 | 48,214 | 39,449 | 10,054 | 7,271 | 373,144 | ||||||||||||||||||||||||
Total
|
$ | 115,520 | $ | 143,198 | $ | 46,515 | $ | 49,529 | $ | 43,584 | $ | 10,054 | $ | 7,271 | $ | 415,671 | ||||||||||||||||
December 31, 2011
|
||||||||||||||||||||||||||||||||
Commercial
|
Commercial Real Estate
|
Construction
|
Home Equity
|
Residential Real Estate
|
Lease Financing
|
Consumer
|
Total
|
|||||||||||||||||||||||||
Allowance for loan losses:
|
||||||||||||||||||||||||||||||||
Individually evaluated for
impairment
|
$ | 1,825 | $ | 3,055 | $ | 1,462 | $ | 565 | $ | 1,727 | $ | 26 | $ | – | $ | 8,660 | ||||||||||||||||
Collectively evaluated for
impairment
|
1,162 | 717 | 1,259 | 773 | 585 | 4 | 29 | 4,529 | ||||||||||||||||||||||||
Total
|
$ | 2,987 | $ | 3,772 | $ | 2,721 | $ | 1,338 | $ | 2,312 | $ | 30 | $ | 29 | $ | 13,189 | ||||||||||||||||
Loans:
|
||||||||||||||||||||||||||||||||
Individually evaluated for
impairment
|
$ | 24,625 | $ | 18,099 | $ | 16,535 | $ | 3,836 | $ | 6,981 | $ | 648 | $ | 2 | $ | 70,726 | ||||||||||||||||
Collectively evaluated for
impairment
|
105,773 | 136,010 | 31,903 | 55,914 | 30,901 | 1,620 | 5,996 | 368,117 | ||||||||||||||||||||||||
Total
|
$ | 130,398 | $ | 154,109 | $ | 48,438 | $ | 59,750 | $ | 37,882 | $ | 2,268 | $ | 5,998 | $ | 438,843 |
2012
|
2011
|
|||||||||||||||||||||||
(In thousands)
|
Pass
|
Classified
|
Total
|
Pass
|
Classified
|
Total
|
||||||||||||||||||
Commercial
|
$ | 112,679 | $ | 2,841 | $ | 115,520 | $ | 118,396 | $ | 12,002 | $ | 130,398 | ||||||||||||
Commercial real estate
|
136,397 | 6,801 | 143,198 | 144,693 | 9,416 | 154,109 | ||||||||||||||||||
Construction
|
35,589 | 10,926 | 46,515 | 33,792 | 14,646 | 48,438 | ||||||||||||||||||
Home equity
|
49,299 | 230 | 49,529 | 56,779 | 2,971 | 59,750 | ||||||||||||||||||
Residential real estate
|
41,228 | 2,356 | 43,584 | 32,002 | 5,880 | 37,882 | ||||||||||||||||||
Lease financing
|
10,054 | – | 10,054 | 1,960 | 308 | 2,268 | ||||||||||||||||||
Consumer
|
7,271 | – | 7,271 | 5,998 | – | 5,998 | ||||||||||||||||||
Total
|
$ | 392,517 | $ | 23,154 | $ | 415,671 | $ | 393,620 | $ | 45,223 | $ | 438,843 | ||||||||||||
December 31, 2012
|
||||||||||||||||||||||||||||
(In thousands)
|
30-59 Days Past Due
|
60-89 Days Past Due
|
Greater than 90 Days Past Due
|
Total
Past Due
|
Current
|
Total Loans Receivable
|
Total Loans > 90 Days & Accruing
|
|||||||||||||||||||||
Commercial
|
$ | 110 | $ | – | $ | 365 | $ | 475 | $ | 115,045 | $ | 115,520 | $ | – | ||||||||||||||
Commercial real estate
|
– | – | – | – | 143,198 | 143,198 | – | |||||||||||||||||||||
Construction
|
– | – | 910 | 910 | 45,605 | 46,515 | – | |||||||||||||||||||||
Home equity
|
– | – | 49,529 | 49,529 | – | |||||||||||||||||||||||
Residential real estate
|
766 | 605 | 569 | 1,940 | 41,644 | 43,584 | – | |||||||||||||||||||||
Lease financing
|
– | – | – | – | 10,054 | 10,054 | – | |||||||||||||||||||||
Consumer
|
– | – | – | – | 7,271 | 7,271 | – | |||||||||||||||||||||
Total
|
$ | 876 | $ | 606 | $ | 1,844 | $ | 3,325 | $ | 412,346 | $ | 415,671 | $ | – | ||||||||||||||
December 31, 2011
|
||||||||||||||||||||||||||||
30-59 Days Past Due
|
60-89 Days Past Due
|
Greater than 90 Days Past Due
|
Total
Past Due
|
Current
|
Total Loans Receivable
|
Total Loans > 90 Days & Accruing
|
||||||||||||||||||||||
Commercial
|
$ | 703 | $ | 200 | $ | 928 | $ | 1,831 | $ | 128,567 | $ | 130,398 | $ | – | ||||||||||||||
Commercial real estate
|
– | – | 143 | 143 | 153,966 | 154,109 | – | |||||||||||||||||||||
Construction
|
1,376 | – | 1,781 | 3,157 | 45,281 | 48,438 | – | |||||||||||||||||||||
Home equity
|
– | 2,165 | – | 2,165 | 57,585 | 59,750 | – | |||||||||||||||||||||
Residential real estate
|
678 | 717 | 1,367 | 2,762 | 35,120 | 37,882 | – | |||||||||||||||||||||
Lease financing
|
104 | – | 18 | 122 | 2,146 | 2,268 | – | |||||||||||||||||||||
Consumer
|
– | – | – | – | 5,998 | 5,998 | – | |||||||||||||||||||||
Total
|
$ | 2,861 | $ | 3,082 | $ | 4,237 | $ | 10,180 | $ | 428,663 | $ | 438,843 | $ | – | ||||||||||||||
December 31, 2012
|
||||||||||||||||||||
(In thousands)
|
Recorded Balance
|
Unpaid Principal Balance
|
Specific Allowance
|
Average Investment in Impaired Loans
|
Interest Income Recognized
|
|||||||||||||||
Loans without a specific valuation allowance:
|
||||||||||||||||||||
Commercial
|
$ | 877 | $ | 916 | $ | – | $ | 694 | $ | 106 | ||||||||||
Commercial real estate
|
521 | 521 | – | 1,798 | 71 | |||||||||||||||
Construction
|
1,684 | 1,684 | – | 1,699 | 40 | |||||||||||||||
Home equity
|
– | – | – | 287 | 4 | |||||||||||||||
Residential real estate
|
1,201 | 1,336 | – | 847 | 57 | |||||||||||||||
Lease financing
|
233 | 233 | – | 169 | 16 | |||||||||||||||
Consumer
|
– | – | – | – | – | |||||||||||||||
Loans with a specific valuation allowance:
|
||||||||||||||||||||
Commercial
|
$ | 643 | $ | 657 | $ | 241 | $ | 2,240 | $ | 42 | ||||||||||
Commercial real estate
|
1,537 | 1,567 | 1,000 | 2,741 | 49 | |||||||||||||||
Construction
|
10,016 | 10,016 | 490 | 10,915 | 466 | |||||||||||||||
Home equity
|
175 | 176 | 81 | 1,919 | – | |||||||||||||||
Residential real estate
|
3,332 | 3,376 | 1,262 | 3,016 | 183 | |||||||||||||||
Lease financing
|
– | – | – | 100 | – | |||||||||||||||
Consumer
|
– | – | – | – | – | |||||||||||||||
Total impaired loans:
|
||||||||||||||||||||
Commercial
|
$ | 1,520 | $ | 1,573 | $ | 241 | $ | 2,934 | $ | 148 | ||||||||||
Commercial real estate
|
2,058 | 2,088 | 1,000 | 4,539 | 120 | |||||||||||||||
Construction
|
11,700 | 11,700 | 490 | 12,614 | 506 | |||||||||||||||
Home equity
|
175 | 176 | 81 | 2,206 | 4 | |||||||||||||||
Residential real estate
|
4,533 | 4,712 | 1,262 | 3,863 | 240 | |||||||||||||||
Lease financing
|
233 | 233 | – | 269 | 16 | |||||||||||||||
Consumer
|
– | – | – | – | – | |||||||||||||||
Total
|
$ | 20,219 | $ | 20,482 | $ | 3,074 | $ | 26,425 | $ | 1,034 |
December 31, 2011
|
||||||||||||||||||||
(In thousands)
|
Recorded Balance
|
Unpaid Principal Balance
|
Specific Allowance
|
Average Investment in Impaired Loans
|
Interest Income Recognized
|
|||||||||||||||
Loans without a specific valuation allowance:
|
||||||||||||||||||||
Commercial
|
$ | 16 | $ | 32 | $ | – | $ | 223 | $ | 56 | ||||||||||
Commercial real estate
|
482 | 514 | – | 1,781 | 109 | |||||||||||||||
Construction
|
101 | 101 | – | 1,427 | – | |||||||||||||||
Home equity
|
468 | 500 | – | 532 | 3 | |||||||||||||||
Residential real estate
|
904 | 1,014 | – | 1,140 | 17 | |||||||||||||||
Lease financing
|
– | – | – | 25 | 67 | |||||||||||||||
Consumer
|
– | – | – | 28 | 1 | |||||||||||||||
Loans with a specific valuation allowance
|
||||||||||||||||||||
Commercial
|
$ | 3,709 | $ | 3,850 | $ | 1,281 | $ | 4,298 | $ | 171 | ||||||||||
Commercial real estate
|
4,819 | 5,357 | 2,257 | 6,793 | 107 | |||||||||||||||
Construction
|
14,313 | 14,776 | 1,353 | 18,080 | 454 | |||||||||||||||
Home equity
|
2,208 | 2,242 | 296 | 940 | 3 | |||||||||||||||
Residential real estate
|
3,838 | 4,416 | 1,389 | 3,791 | 149 | |||||||||||||||
Lease financing
|
307 | 307 | 25 | 324 | 21 | |||||||||||||||
Consumer
|
– | – | – | – | – | |||||||||||||||
Total impaired loans:
|
||||||||||||||||||||
Commercial
|
$ | 3,725 | $ | 3,882 | $ | 1,281 | $ | 4,521 | $ | 227 | ||||||||||
Commercial real estate
|
5,301 | 5,871 | 2,257 | 8,574 | 216 | |||||||||||||||
Construction
|
14,414 | 14,877 | 1,353 | 19,507 | 454 | |||||||||||||||
Home equity
|
2,676 | 2,742 | 296 | 1,472 | 6 | |||||||||||||||
Residential real estate
|
4,742 | 5,430 | 1,389 | 4,931 | 166 | |||||||||||||||
Lease financing
|
307 | 307 | 25 | 349 | 88 | |||||||||||||||
Consumer
|
– | – | – | 28 | 1 | |||||||||||||||
Total
|
$ | 31,165 | $ | 33,109 | $ | 6,601 | $ | 39,382 | $ | 1,158 | ||||||||||
December 31, 2010
|
||||||||||||||||||||
(In thousands)
|
Recorded Balance
|
Unpaid Principal Balance
|
Specific Allowance
|
Average Investment in Impaired Loans
|
Interest Income Recognized
|
|||||||||||||||
Loans without a specific valuation allowance:
|
||||||||||||||||||||
Commercial
|
$ | 220 | $ | 315 | $ | – | $ | 627 | $ | 24 | ||||||||||
Commercial real estate
|
4,080 | 4,700 | – | 3,891 | 37 | |||||||||||||||
Construction
|
3,203 | 3,203 | – | 3,384 | – | |||||||||||||||
Home equity
|
585 | 587 | – | 102 | – | |||||||||||||||
Residential real estate
|
1,279 | 1,924 | – | 1,391 | – | |||||||||||||||
Lease financing
|
140 | 256 | – | 254 | 2 | |||||||||||||||
Consumer
|
52 | 54 | – | 50 | 3 | |||||||||||||||
Loans with a specific valuation allowance
|
||||||||||||||||||||
Commercial
|
$ | 5,541 | $ | 5,585 | $ | 1,133 | $ | 2,834 | $ | 7 | ||||||||||
Commercial real estate
|
8,022 | 8,092 | 1,110 | 10,760 | – | |||||||||||||||
Construction
|
22,318 | 22,430 | 3,039 | 23,662 | 20 | |||||||||||||||
Home equity
|
626 | 648 | 299 | 411 | – | |||||||||||||||
Residential real estate
|
4,618 | 5,480 | 577 | 6,150 | – | |||||||||||||||
Lease financing
|
402 | 402 | 3 | 302 | – | |||||||||||||||
Consumer
|
– | – | – | 12 | – | |||||||||||||||
Total:
|
||||||||||||||||||||
Commercial
|
$ | 5,761 | $ | 5,900 | $ | 1,133 | $ | 3,461 | $ | 31 | ||||||||||
Commercial real estate
|
12,102 | 12,792 | 1,110 | 14,651 | 37 | |||||||||||||||
Construction
|
25,521 | 25,633 | 3,039 | 27,046 | 20 | |||||||||||||||
Home equity
|
1,211 | 1,235 | 299 | 513 | – | |||||||||||||||
Residential real estate
|
5,897 | 7,404 | 577 | 7,541 | – | |||||||||||||||
Lease financing
|
542 | 658 | 3 | 556 | 2 | |||||||||||||||
Consumer
|
52 | 54 | – | 62 | 3 |
Total
|
$ 51,086
|
$ 53,676
|
$ 6,161
|
$ 53,830
|
$ 93
|
2012
|
2011
|
|||||||
(In thousands)
|
||||||||
Commercial
|
$ | 1,131 | $ | 2,029 | ||||
Commercial real estate
|
1,537 | 1,340 | ||||||
Construction
|
910 | 3,058 | ||||||
Home equity
|
1,084 | 2,676 | ||||||
Residential real estate
|
175 | 2,204 | ||||||
Lease financing
|
– | 18 | ||||||
Consumer
|
– | – | ||||||
$ | 4,837 | $ | 11,325 |
December 31, 2012
|
December 31, 2011
|
|||||||||||||||||||||||
(In thousands)
|
Number
of Loans
|
Pre-Modification
Outstanding
Recorded
Balance
|
Post-Modification Outstanding
Recorded
Balance
|
Number
of Loans
|
Pre-Modification
Outstanding
Recorded
Balance
|
Post-Modification Outstanding
Recorded
Balance
|
||||||||||||||||||
Commercial
|
1 | $ | 85 | $ | 85 | 6 | $ | 1,417 | $ | 1,408 | ||||||||||||||
Commercial real estate
|
– | – | – | 5 | 3,498 | 3,498 | ||||||||||||||||||
Construction
|
– | – | – | 3 | 3,724 | 3,724 | ||||||||||||||||||
Home equity
|
– | – | – | – | – | – | ||||||||||||||||||
Residential real estate
|
1 | 371 | 371 | – | – | – | ||||||||||||||||||
Lease financing
|
– | – | – | – | – | – | ||||||||||||||||||
Consumer
|
– | – | – | – | – | – | ||||||||||||||||||
Total
|
2 | $ | 456 | $ | 456 | 14 | $ | 8,639 | $ | 8,630 |
December 31, 2012
|
||||||||
Number
of Loans
|
Recorded
Balance
|
|||||||
(In thousands)
|
||||||||
Commercial
|
1 | $ | 79 | |||||
Commercial real estate
|
– | – | ||||||
Construction
|
– | – | ||||||
Home equity
|
– | – | ||||||
Residential real estate
|
– | – | ||||||
Lease financing
|
– | – | ||||||
Consumer
|
– | – | ||||||
1 | $ | 79 |
2012
|
2011
|
|||||||
(In thousands)
|
||||||||
Land
|
$ | 5,154 | $ | 5,154 | ||||
Buildings and improvements
|
15,984 | 15,898 | ||||||
Furniture and equipment
|
8,382 | 8,110 | ||||||
29,520 | 29,162 | |||||||
Less accumulated depreciation
|
14,072 | 13,265 | ||||||
Total premises and equipment
|
$ | 15,448 | $ | 15,897 |
|
2012
|
2011
|
2010
|
|||||||||
(In thousands)
|
||||||||||||
Balance, beginning of year
|
$ | 2,985 | $ | 481 | $ | 166 | ||||||
Provision charged to expense
|
867 | 3,159 | 734 | |||||||||
Charge offs, net of recoveries
|
(668 | ) | (655 | ) | (419 | ) | ||||||
Balance, end of year
|
$ | 3,184 | $ | 2,985 | $ | 481 |
|
2012
|
2011
|
2010
|
|||||||||
(In thousands)
|
||||||||||||
Net gains on sale of foreclosed assets
|
$ | (349 | ) | $ | (555 | ) | $ | (168 | ) | |||
Provision for losses
|
867 | 3,159 | 734 | |||||||||
Operating expenses, net of rental income
|
1,361 | 1,921 | 1,656 | |||||||||
$ | 1,879 | $ | 4,525 | $ | 2,222 |
2012
|
2011
|
|||||||||||||||
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Gross
Carrying
Amount
|
Accumulated
Amortization
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Core Deposit Intangible
|
$ | 1,000 | $ | (821 | ) | $ | 1,000 | $ | (679 | ) |
(In thousands)
|
||||
2013
|
$ | 143 | ||
2014
|
36 |
(In thousands)
|
||||
2013
|
81,516 | |||
2014
|
18,481 | |||
2015
|
18,529 | |||
2016
|
10,345 | |||
2017
|
4,920 | |||
Thereafter
|
1,345 | |||
$ | 135,136 |
(In thousands)
|
||||
2013
|
$ | 344 | ||
2014
|
96 | |||
2015
|
8 | |||
$ | 448 |
2012
|
2011
|
|||||||
(In thousands)
|
|
|||||||
FHLBank advances (A)
|
$ | 82,500 | $ | 82,500 | ||||
Less: Deferred prepayment penalty on modification of FHLB
advances
|
(977 | ) | (1,654 | ) | ||||
Net FHLBank advances
|
81,523 | 80,846 | ||||||
Subordinated Debentures – BVBC Capital Trust II (B)
|
7,732 | 7,732 | ||||||
Subordinated Debentures – BVBC Capital Trust III (C)
|
11,856 | 11,856 | ||||||
Total long-term debt
|
$ | 101,111 | $ | 100,434 |
(A) |
Due in 2013, 2014, 2015, 2016 and 2018; collateralized by various assets including mortgage-backed loans and available-for-sale securities totaling $159,011,000 at December 31, 2012. Advances, at interest rates from 0.37% to 4.26% are subject to restrictions or penalties in the event of prepayment. FHLB advance availability is determined quarterly and at December 31, 2012, approximately $2,467,000 was available. Advances are made at the discretion of the FHLBank Topeka.
In the third quarter of 2010, the Company repaid $42,500,000 of FHLB advances by rolling the net present value of the repaid advances into the funding cost of $42,500,000 of new advances. A $2,569,000 modification fee was associated with the pay-off of the original FHLB advances which is amortized as an adjustment of interest expense over the remaining term of the new FHLB advances using the straight line method. The unamortized modification fee at December 31, 2012 was approximately $977,000. This transaction reduced the effective interest rate, as well as modified the maturity date on these borrowings.
|
||
(B) | Due in 2033; interest only at three month LIBOR + 3.25% (3.56% at December 31, 2012 and 3.68% at December 31, 2011) due quarterly; fully and unconditionally guaranteed by the Company on a subordinated basis to the extent that the funds are held by the Trust. BVBC Capital Trust II issued and sold $7,500,000 in Capital Securities to third parties and $232,000 of Common Securities to the Company. As of 2008, the Company may prepay the subordinated debentures, in whole or in part, at their face value plus accrued interest. | ||
(C) | Due in 2035; interest only at three month LIBOR + 1.60% (1.91% at December 31, 2012 and 2.18% at December 31, 2011) due quarterly; fully and unconditionally guaranteed by the Company on a subordinated basis to the extent that the funds are held by the Trust. BVBC Capital Trust III issued and sold $11,500,000 in Preferred Securities to third parties and $356,000 in Common Securities to the Company. Subordinated to the trust preferred securities (B) due in 2033. As of 2010, the Company may prepay the subordinated debentures, in whole or in part, at their face value plus accrued interest |
(In thousands)
|
||||
2013
|
$ | 20,000 | ||
2014
|
7,500 | |||
2015
|
20,000 | |||
2016
|
10,000 | |||
2017
|
- | |||
Thereafter
|
44,588 | |||
102,088 | ||||
Less:Deferred prepayment penalty on modification of FHLB advances
|
(977 | ) | ||
$ | 101,111 |
2012
|
2011
|
2010
|
||||||||||
(In thousands)
|
||||||||||||
Taxes currently (refundable) payable
|
$ | – | $ | – | $ | – | ||||||
Deferred income taxes
|
(150 | ) | 9,823 | (1,561 | ) | |||||||
$ | (150 | ) | $ | 9,823 | $ | (1,561 | ) |
2012
|
2011
|
2010
|
||||||||||
(In thousands)
|
||||||||||||
Computed at the statutory rate (34%)
|
$ | 40 | $ | (2,040 | ) | $ | (1,463 | ) | ||||
Increase (decrease) resulting from:
|
||||||||||||
Tax-exempt interest
|
(87 | ) | (50 | ) | (5 | ) | ||||||
State income taxes
|
77 | (20 | ) | 124 | ||||||||
Changes in the deferred tax asset valuation allowance
|
(200 | ) | 12,600 | – | ||||||||
Other
|
20 | (667 | ) | (217 | ) | |||||||
Actual tax provision
|
$ | (150 | ) | $ | 9,823 | $ | (1,561 | ) |
2012
|
2011
|
|||||||
(In thousands)
|
||||||||
Deferred tax assets:
|
||||||||
Allowance for loan losses
|
$ | 3,351 | $ | 4,880 | ||||
Net Operating Loss from Blue Valley Ban Corp. and subsidiary
|
9,153 | 7,733 | ||||||
Deferred compensation
|
80 | 123 | ||||||
Offering costs
|
180 | 190 | ||||||
Non-accrual loan interest
|
46 | 59 | ||||||
Other real estate owned reserve
|
1,178 | 1,215 | ||||||
Other
|
639 | 516 | ||||||
14,627 | 14,716 | |||||||
Deferred tax liabilities:
|
||||||||
Accumulated depreciation
|
(253 | ) | (321 | |||||
FHLB stock basis
|
(557 | ) | (511 | ) | ||||
Accumulated appreciation on available-for-sale securities
|
(29 | ) | (89 | ) | ||||
Prepaid intangibles
|
(177 | ) | (185 | ) | ||||
Core Deposit Intangible related to Unison Bancorp Inc. and subsidiary acquisition
|
(45 | ) | (90 | ) | ||||
Other
|
(9 | ) | (9 | ) | ||||
(1,070 | ) | (1,205 | ) | |||||
Net deferred tax asset before valuation allowance
|
13,557 | 13,511 | ||||||
Valuation allowance:
|
||||||||
Beginning balance
|
(12,600 | ) | – | |||||
(Increase) decrease during the period
|
164 | (12,600 | ) | |||||
Ending balance
|
(12,436 | ) | (12,600 | ) | ||||
Net deferred tax asset
|
$ | 1,121 | $ | 911 |
Actual
|
For Capital
Adequacy Purposes
|
To Be Well Capitalized
Under Prompt Corrective
Action Provisions
|
||||||||||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||
December 31, 2012:
|
||||||||||||||||||||||||
Total Capital
(to Risk Weighted Assets)
|
||||||||||||||||||||||||
Consolidated
|
$ | 65,441 | 12.01 | % | $ | 43,588 | 8.00 | % | N/A | |||||||||||||||
Bank Only
|
$ | 72,542 | 13.33 | % | $ | 43,539 | 8.00 | % | $ | 54,424 | 10.00 | % | ||||||||||||
Tier 1 Capital
(to Risk Weighted Assets)
|
||||||||||||||||||||||||
Consolidated
|
$ | 52,851 | 9.70 | % | $ | 21,794 | 4.00 | % | N/A | |||||||||||||||
Bank Only
|
$ | 65,702 | 12.07 | % | $ | 21,769 | 4.00 | % | $ | 32,654 | 6.00 | % | ||||||||||||
Tier 1 Capital
(to Average Assets)
|
||||||||||||||||||||||||
Consolidated
|
$ | 52,851 | 8.10 | % | $ | 26,084 | 4.00 | % | N/A | |||||||||||||||
Bank Only
|
$ | 65,702 | 10.08 | % | $ | 26,060 | 4.00 | % | $ | 32,574 | 5.00 | % |
Actual
|
For Capital
Adequacy Purposes
|
To Be Well Capitalized
Under Prompt Corrective
Action Provisions
|
||||||||||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||
December 31, 2011:
|
||||||||||||||||||||||||
Total Capital
(to Risk Weighted Assets)
|
||||||||||||||||||||||||
Consolidated
|
$ | 65,917 | 12.08 | % | $ | 43,640 | 8.00 | % | N/A | |||||||||||||||
Bank Only
|
$ | 70,736 | 12.98 | % | $ | 43,587 | 8.00 | % | $ | 54,484 | 10.00 | % | ||||||||||||
Tier 1 Capital
(to Risk Weighted Assets)
|
||||||||||||||||||||||||
Consolidated
|
$ | 53,455 | 9.80 | % | $ | 21,820 | 4.00 | % | N/A | |||||||||||||||
Bank Only
|
$ | 63,838 | 11.72 | % | $ | 21,794 | 4.00 | % | $ | 32,691 | 6.00 | % | ||||||||||||
Tier 1 Capital
(to Average Assets)
|
||||||||||||||||||||||||
Consolidated
|
$ | 53,455 | 8.04 | % | $ | 26,609 | 4.00 | % | N/A | |||||||||||||||
Bank Only
|
$ | 63,838 | 9.61 | % | $ | 26,571 | 4.00 | % | $ | 33,214 | 5.00 | % |
•
|
The Preferred Shares have a senior rank. The Company is not free to issue other preferred stock that is senior to the Preferred Shares.
|
•
|
Until the third anniversary of the sale of the Preferred Shares, unless the Preferred Shares have been redeemed in whole or the Treasury has transferred all of the shares to a non-affiliated third party, the Company may not declare or pay a common stock dividend in an amount greater than the amount of the last quarterly cash dividend per share declared prior to October 14, 2008, or repurchase common stock or other equity shares (subject to certain limited exceptions) without the Treasury’s approval.
|
•
|
If the Company were to pay a cash dividend in the future, any such dividend would have to be discontinued if a Preferred Share dividend were missed. Thereafter, dividends on common stock could be resumed only if all Preferred Share dividends in arrears were paid. Similar restrictions apply to the Company’s ability to repurchase common stock if Preferred Share dividends are missed.
|
•
|
Failure to pay the Preferred Share dividend is not an event of default. However, a failure to pay a total of six Preferred Share dividends, whether or not consecutive, gives the holders of the Preferred Shares the right to elect two directors to the Company’s Board of Directors. That right would continue until the Company pays all dividends in arrears.
|
•
|
In conformity with requirements of the SPA and Section 111(b) of the Emergency Economic Stabilization Act of 2008 (the “EESA”), the Company and its subsidiary, Bank of Blue Valley, and each of its senior executive officers agreed to limit certain compensation, bonus, incentive and other benefits plans, arrangements, and policies with respect to the senior executive officers during the period that the Treasury owns any debt or equity securities acquired in connection with the Transaction. The applicable senior executive officers have entered into letter agreements with the Company consenting to the foregoing and have executed a waiver voluntarily waiving any claim against the Treasury or the Company for any changes to such senior executive officer’s compensation or benefits that are required to comply with Section 111(b) of EESA.
|
|
The Company’s preferred stock qualifies as Tier 1 capital in accordance with regulatory capital requirements.
|
2012
|
2011
|
|||||||
(In thousands)
|
|
|||||||
Balance, beginning of year
|
$ | 12,967 | $ | 20,549 | ||||
New loans and advances
|
4,060 | 7,191 | ||||||
Repayments and reclassifications
|
(3,395 | ) | (14,773 | ) | ||||
Balance, end of year
|
$ | 13,632 | $ | 12,967 |
2012
|
2011
|
2010
|
||||||||||||||||||||||
Shares
|
Weighted
Average
Exercise
Price
|
Shares
|
Weighted
Average
Exercise
Price
|
Shares
|
Weighted
Average
Exercise
Price
|
|||||||||||||||||||
Outstanding, beginning of year
|
10,575 | $ | 25.00 | 24,375 | $ | 22.07 | 33,875 | $ | 20.51 | |||||||||||||||
Exercised
|
– | – | – | – | – | – | ||||||||||||||||||
Forfeited
|
10,575 | 25.00 | 13,800 | 19.82 | 9,500 | 16.50 | ||||||||||||||||||
Outstanding, end of year
|
0 | $ | 0.00 | 10,575 | $ | 25.00 | 24,375 | $ | 22.07 | |||||||||||||||
Intrinsic value of shares exercised
|
$ | – | $ | – | $ | – | ||||||||||||||||||
Options exercisable, end of year
|
0 | $ | 0.00 | 10,575 | $ | 25.00 | 24,375 | $ | 22.07 |
Plan year ending January
|
Employee Stock Purchase Plan Activity
Shares purchased
|
Purchase Price
|
||
2012
|
6,508 | $3.49 | ||
2011
|
2,628 | $6.80 | ||
2010
|
3,465 | $8.71 |
2012
|
2011
|
2010
|
||||||||||
(In thousands)
|
||||||||||||
Rental income
|
$ | 556 | $ | 378 | $ | 264 | ||||||
Realized gain on foreclosed assets
|
521 | 578 | 434 | |||||||||
Other income
|
458 | 28 | 447 | |||||||||
Total
|
$ | 1,535 | $ | 984 | $ | 1,145 |
2012
|
2011
|
2010
|
||||||||||
(In thousands)
|
||||||||||||
FDIC assessments
|
$ | 1,324 | $ | 1,509 | $ | 2,076 | ||||||
Professional fees
|
1,383 | 1,237 | 1,520 | |||||||||
Data processing
|
1,104 | 1,110 | 1,278 | |||||||||
ATM and network fees
|
745 | 758 | 743 | |||||||||
Loan processing fees
|
194 | 283 | 308 | |||||||||
Other expense
|
2,756 | 2,954 | 2,625 | |||||||||
Total
|
$ | 7,506 | $ | 7,851 | $ | 8,550 |
Level 1
|
Quoted prices in active markets for identical assets or liabilities
|
|
Level 2
|
Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
|
|
Level 3
|
Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
|
Fair Value Measurements Using
|
||||||||||||||||
Fair Value
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
Significant Other Observable Inputs
(Level 2)
|
Unobservable
Inputs
(Level 3)
|
|||||||||||||
(In thousands)
|
||||||||||||||||
December 31, 2012:
|
||||||||||||||||
Assets:
|
||||||||||||||||
Available-for-sale securities:
|
||||||||||||||||
U.S. Government sponsored agencies
|
$ | 63,148 | $ | – | $ | 63,148 | $ | – | ||||||||
State and political subdivision securities
|
14,074 | – | 14,074 | – | ||||||||||||
Equity and other securities
|
623 | 623 | – | – | ||||||||||||
Mortgage loans held for sale
|
7,621 | – | 7,621 | – | ||||||||||||
Commitments to originate loans
|
– | – | – | – | ||||||||||||
Forward sales commitments
|
184 | – | – | 184 | ||||||||||||
Total assets
|
$ | 85,650 | $ | 623 | $ | 84,843 | $ | 184 | ||||||||
Liabilities:
|
||||||||||||||||
Commitments to originate loans
|
$ | – | $ | – | $ | – | $ | – | ||||||||
Forward sales commitments
|
1 | – | – | 1 | ||||||||||||
Total liabilities
|
$ | 1 | $ | – | $ | – | $ | 1 | ||||||||
December 31, 2011:
|
||||||||||||||||
Assets:
|
||||||||||||||||
Available-for-sale securities:
|
||||||||||||||||
U.S. Government sponsored agencies
|
$ | 61,171 | $ | – | $ | 61,171 | $ | – | ||||||||
Equity and other securities
|
619 | 619 | – | – | ||||||||||||
Mortgage loans held for sale
|
5,686 | – | 5,686 | – | ||||||||||||
Commitments to originate loans
|
8 | – | – | 8 | ||||||||||||
Forward sales commitments
|
100 | – | – | 100 | ||||||||||||
Total assets
|
$ | 67,584 | $ | 619 | $ | 66,857 | $ | 108 | ||||||||
Liabilities:
|
||||||||||||||||
Commitments to originate loans
|
$ | 1 | $ | – | $ | – | $ | 1 | ||||||||
Forward sales commitments
|
– | – | – | – | ||||||||||||
Total liabilities
|
$ | 1 | $ | – | $ | – | $ | 1 |
Commitments to Originate Loans
|
Forward Sales Commitments
|
|||||||
(In thousands)
|
||||||||
Balance as of December 31, 2011
|
$ | 7 | $ | 100 | ||||
Total realized and unrealized gains (losses):
|
||||||||
Included in net income (loss)
|
(7 | ) | 83 | |||||
Balance as of December 31, 2012
|
$ | – | $ | 183 | ||||
Balance as of December 31, 2010
|
$ | (8 | ) | $ | 372 | |||
Total realized and unrealized gains (losses):
|
||||||||
Included in net income (loss)
|
15 | (272 | ) | |||||
Balance as of December 31, 2011
|
$ | 7 | $ | 100 |
Fair Value Measurements Using
|
||||||||||||||||
Fair Value
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
Significant Other Observable Inputs
(Level 2)
|
Unobservable
Inputs
(Level 3)
|
|||||||||||||
(In thousands)
|
||||||||||||||||
December 31, 2012:
|
||||||||||||||||
Impaired loans, net of reserves
|
$ | 5,480 | $ | – | $ | – | $ | 5,480 | ||||||||
Foreclosed assets held for sale, net
|
17,894 | – | – | 17,894 | ||||||||||||
$ | 23,374 | $ | – | $ | – | $ | 23,374 | |||||||||
December 31, 2011:
|
||||||||||||||||
Impaired loans, net of reserves
|
$ | 21,139 | $ | – | $ | – | $ | 21,139 | ||||||||
Foreclosed assets held for sale, net
|
12,826 | – | – | 12,826 | ||||||||||||
$ | 33,965 | $ | – | $ | – | $ | 33,965 |
Fair Value at 12/31/12
|
Valuation Technique
|
Unobservable Inputs
|
Range
(Weighted Average)
|
|||||||
Commitments to Originate Loans
|
$ | – |
Market comparable
prices
|
Quoted prices for similar loans
Estimated Customer Fallout Rate
|
NA
|
|||||
Forward Sales Commitments
|
$ | 183 |
Market comparable
prices
|
Quoted prices for similar loans
|
2.75%-3.375%
(3.17%)
|
|||||
Collateral-dependent impaired loans
|
$ | 5,480 |
Market comparable
properties
|
Quoted prices for similar loans
|
9.00%-80.00%
(18.00%)
|
|||||
Foreclosed assets held for Sale, net
|
$ | 17,894 |
Market comparable
properties
|
Comparability adjustments (%)
|
Not available
|
2012
|
2011
|
|||||||||||||||
(In thousands)
|
Carrying
Amount
|
Fair
Value
|
Carrying
Amount
|
Fair
Value
|
||||||||||||
Financial assets:
|
||||||||||||||||
Cash and cash equivalents (Level 1)
|
$ | 101,077 | $ | 101,077 | $ | 99,899 | $ | 99,899 | ||||||||
Loans, net of allowance for loan losses (Level 3)
|
406,614 | 408,041 | 425,654 | 428,698 | ||||||||||||
Federal Home Loan Bank stock, Federal Reserve Bank stock, and other securities (Level 3)
|
7,540 | 7,540 | 7,369 | 7,369 | ||||||||||||
Interest receivable (Level 3)
|
1,529 | 1,529 | 1,573 | 1,573 | ||||||||||||
Financial liabilities:
|
||||||||||||||||
Deposits (Level 3)
|
484,466 | 487,059 | 490,413 | 492,688 | ||||||||||||
Securities sold under agreement to repurchase and other interest-bearing liabilities (Level 3)
|
21,668 | 21,668 | 15,372 | 15,372 | ||||||||||||
Long-term debt (Level 3)
|
101,111 | 95,216 | 100,434 | 94,411 | ||||||||||||
Interest payable (Level 3)
|
4,166 | 4,166 | 3,228 | 3,228 | ||||||||||||
Unrecognized financial instruments
(net of amortization):
|
||||||||||||||||
Commitments to extend credit (Level 3)
|
– | – | – | – | ||||||||||||
Letters of credit (Level 3)
|
– | – | – | – | ||||||||||||
Lines of credit (Level 3)
|
– | – | – | – |
2012
|
2011
|
|||||||||||||||||||||||||||||||||
Fourth
|
Third
|
Second
|
First
|
Fourth
|
Third
|
Second
|
First
|
|||||||||||||||||||||||||||
Quarter
|
Quarter
|
Quarter
|
Quarter
|
Quarter
|
Quarter
|
Quarter
|
Quarter
|
|||||||||||||||||||||||||||
(In Thousands, except per share data) | ||||||||||||||||||||||||||||||||||
Interest income
|
$ | 6,002 | $ | 6,097 | $ | 6,060 | $ | 6,224 | $ | 6,736 | $ | 6,837 | $ | 6,631 | $ | 6,651 | ||||||||||||||||||
Interest expense
|
1,636 | 1,737 | 1,849 | 1,970 | 2,098 | 2,207 | 2,410 | 2,540 | ||||||||||||||||||||||||||
Net interest income
|
4,366 | 4,360 | 4,211 | 4,254 | 4,638 | 4,630 | 4,221 | 4,111 | ||||||||||||||||||||||||||
Provision for loan losses
|
- | 650 | 100 | 450 | 600 | 700 | 2,000 | - | ||||||||||||||||||||||||||
Net interest income after
|
||||||||||||||||||||||||||||||||||
provision for loan losses
|
4,366 | 3,710 | 4,111 | 3,804 | 4,038 | 3,930 | 2,221 | 4,111 | ||||||||||||||||||||||||||
Non-interest income
|
1,981 | 2,165 | 1,678 | 1,610 | 1,758 | 1,717 | 1,445 | 1,404 | ||||||||||||||||||||||||||
Non-interest expense
|
6,188 | 5,524 | 5,866 | 5,730 | 6,882 | 7,672 | 5,882 | 6,188 | ||||||||||||||||||||||||||
Income (loss) before income taxes
|
159 | 351 | (77 | ) | (316 | ) | (1,086 | ) | (2,025 | ) | (2,216 | ) | (673 | ) | ||||||||||||||||||||
Provision (benefit) for income taxes
|
(147 | ) | (1 | ) | (1 | ) | (1 | ) | 10,136 | - | (69 | ) | (244 | ) | ||||||||||||||||||||
Net income (loss)
|
306 | 352 | (76 | ) | (315 | ) | (11,222 | ) | (2,025 | ) | (2,147 | ) | (429 | ) | ||||||||||||||||||||
Dividends on preferred shares
|
290 | 272 | 272 | 272 | 290 | 290 | 272 | 272 | ||||||||||||||||||||||||||
Net income (loss) available to
|
||||||||||||||||||||||||||||||||||
common shareholders
|
$ | 16 | $ | 80 | $ | (348 | ) | $ | (587 | ) | $ | (11,512 | ) | $ | (2,297 | ) | $ | (2,419 | ) | $ | (701 | ) | ||||||||||||
Net Income (loss) per Share Data
|
||||||||||||||||||||||||||||||||||
Basic
|
$ | 0.01 | $ | 0.03 | $ | (0.12 | ) | $ | (0.21 | ) | $ | (4.10 | ) | $ | (0.82 | ) | $ | (0.86 | ) | $ | (0.25 | ) | ||||||||||||
Diluted
|
$ | 0.01 | $ | 0.03 | $ | (0.12 | ) | $ | (0.21 | ) | $ | (4.10 | ) | $ | (0.82 | ) | $ | (0.86 | ) | $ | (0.25 | ) | ||||||||||||
Balance Sheet
|
||||||||||||||||||||||||||||||||||
Total assets
|
$ | 657,005 | $ | 662,917 | $ | 656,457 | $ | 671,946 | $ | 654,452 | $ | 677,511 | $ | 691,580 | $ | 693,776 | ||||||||||||||||||
Total loans, net
|
406,614 | 421,243 | 419,928 | 427,094 | 425,654 | 442,496 | 443,878 | 462,009 | ||||||||||||||||||||||||||
Stockholders' equity
|
39,815 | 39,573 | 39,440 | 39,833 | 40,455 | 51,912 | 54,310 | 56,368 |
2012
|
2011
|
|||||||
(In thousands)
|
||||||||
ASSETS
|
||||||||
Cash and cash equivalents
|
$ | 646 | $ | 743 | ||||
Investments in subsidiaries:
|
||||||||
Bank of Blue Valley
|
65,924 | 64,282 | ||||||
BVBC Capital Trust II
|
232 | 232 | ||||||
BVBC Capital Trust III
|
356 | 356 | ||||||
Other assets
|
18 | 55 | ||||||
Total Assets
|
$ | 67,176 | $ | 65,668 | ||||
LIABILITIES
|
||||||||
Subordinated debentures
|
$ | 19,588 | $ | 19,588 | ||||
Other liabilities
|
7,773 | 5,625 | ||||||
Total Liabilities
|
27,361 | 25,213 | ||||||
STOCKHOLDERS’ EQUITY
|
||||||||
Preferred Stock
|
22 | 22 | ||||||
Common stock
|
2,934 | 2,879 | ||||||
Additional paid-in capital
|
38,746 | 38,511 | ||||||
Retained earnings (Accumulated deficit)
|
(1,930 | ) | (1,091 | ) | ||||
Accumulated other comprehensive income, net of income tax of $29 and $89 as of December 31, 2012 and 2011, respectively
|
43 | 134 | ||||||
Total Stockholders’ Equity
|
39,815 | 40,455 | ||||||
Total Liabilities and Stockholders’ Equity
|
$ | 67,176 | $ | 65,668 |
2012
|
2011
|
2010
|
||||||||||
(In thousands)
|
||||||||||||
Income
|
||||||||||||
Dividends from subsidiaries
|
$ | – | $ | – | $ | – | ||||||
Other income
|
20 | 19 | 20 | |||||||||
20 | 19 | 20 | ||||||||||
Expenses
|
1,486 | 1,291 | 1,496 | |||||||||
Loss before income taxes and equity in undistributed net loss of subsidiaries
|
(1,466 | ) | (1,272 | ) | (1,476 | ) | ||||||
Income tax (benefit) | (494 | ) | (1,142 | ) | (531 | ) | ||||||
Valuation allowance on deferred tax asset
|
494 | 2,169 | – | |||||||||
|
||||||||||||
Loss before equity in undistributed net loss of subsidiaries
|
(1,466 | ) | (2,299 | ) | (945 | ) | ||||||
Equity in undistributed net loss of subsidiaries
|
1,733 | (13,524 | ) | (1,797 | ) | |||||||
Net income (loss)
|
$ | 267 | $ | (15,823 | ) | $ | (2,742 | ) | ||||
2012
|
2011
|
2010
|
||||||||||
(In thousands)
|
||||||||||||
Net income (loss)
|
$ | 267 | $ | (15,823 | ) | $ | (2,742 | ) | ||||
Other comprehensive income (loss)
|
||||||||||||
Change in unrealized appreciation on available-for-sale securities, net of income taxes (credit) of $(60) in 2012, $69 in 2011 and $(49) in 2010
|
(91 | ) | 104 | (73 | ) | |||||||
Comprehensive income (loss)
|
$ | 176 | $ | (15,719 | ) | $ | (2,815 | ) |
2012
|
2011
|
2010
|
||||||||||
(In thousands)
|
||||||||||||
OPERATING ACTIVITIES
|
||||||||||||
Net Income (loss)
|
$ | 267 | $ | (15,823 | ) | $ | (2,742 | ) | ||||
Items not requiring (providing) cash:
|
||||||||||||
Deferred income taxes
|
0 | 1,197 | (417 | ) | ||||||||
Equity in undistributed net loss (income) of subsidiaries
|
(1,733 | ) | 13,524 | 1,797 | ||||||||
Restricted stock earned
|
245 | 77 | 428 | |||||||||
Changes in:
|
||||||||||||
Other assets
|
37 | (38 | ) | – | ||||||||
Other liabilities
|
1060 | 943 | 842 | |||||||||
Net cash used in operating activities
|
(124 | ) | (120 | ) | (92 | ) | ||||||
INVESTING ACTIVITIES
|
||||||||||||
Capital contributed to subsidiary
|
– | – | – | |||||||||
Net cash used in investing activities
|
– | – | – | |||||||||
FINANCING ACTIVITIES
|
||||||||||||
Proceeds from sale of common stock through Employee Stock Purchase Plan (ESPP)
|
27 | 21 | 35 | |||||||||
Net cash provided by financing activities
|
27 | 21 | 35 | |||||||||
DECREASE IN CASH AND CASH EQUIVALENTS
|
(97 | ) | (99 | ) | (57 | ) | ||||||
CASH AND CASH EQUIVALENTS,
BEGINNING OF YEAR
|
743 | 842 | 899 | |||||||||
CASH AND CASH EQUIVALENTS,
END OF YEAR
|
$ | 646 | $ | 743 | $ | 842 |
|
|
A.
|
The stockholder must be a stockholder of record on the record date for such annual meeting, must continue to be a stockholder of record at the time of such meeting, and must be entitled to vote thereat.
|
|
B.
|
The stockholder must deliver or cause to be delivered a written notice to the secretary of the Corporation. Such notice must be received by the secretary no less than one hundred twenty (120) days prior to the day corresponding to the date on which the Corporation released its proxy statement in connection with the
|
|
previous year’s annual meeting; provided, however, that if the date of the annual meeting has been changed by more than thirty (30) days from the date of the previous year’s annual meeting, such notice must be received by the secretary a reasonable time prior to the time at which notice of such meeting is delivered to the stockholders. The notice shall specify (a) the name and address of the stockholder as they appear on the books of the Corporation, (b) the class and number of shares of the Corporation which are beneficially owned by the stockholder; (c) any material interest of the stockholder in the proposed business described in the notice; (d) if such business is a nomination for director, each nomination sought to be made, together with the reasons for each nomination, a description of the qualifications and business or professional experience of each proposed nominee and a statement signed by each nominee indicating his or her willingness to serve if elected, and disclosing the information about him or her that is required by the Securities Exchange Act of 1934, as amended (the “1934 Act”), and the rules and regulations promulgated thereunder to be disclosed in the proxy materials for the meeting involved if he or she were a nominee of the Corporation for election as one of its directors; (e) if such business is other than a nomination for director, the nature of the business, the reasons why it is sought to be raised and submitted for a vote of the stockholders and if and why it is deemed by the stockholder to be beneficial to the Corporation, and (f) if so requested by the Corporation, all other information that would be required to be filed with the Securities and Exchange Commission if, with respect to the business proposed to be brought before the meeting, the person proposing such business was a participant in a solicitation subject to Section 14 of the 1934 Act.
|
|
C.
|
Notwithstanding satisfaction of the provisions of subsection A and subsection B, the proposed business described in the notice may be deemed not to be properly brought before the meeting if, pursuant to state law or to any rule or regulation of the Securities and Exchange Commission, it was offered as a stockholder proposal and was omitted, or had it been so offered, it could have been omitted, from the notice of, and proxy material for, the meeting (or any supplement thereto) authorized by the Board of Directors.
|
|
D.
|
In the event such notice is timely given pursuant to subsection B and the business described therein is not disqualified pursuant to subsection C, such business may be presented by, and only by, the stockholder who shall have given the notice required by subsection A or a representative of such stockholder who is qualified under the law of the State of Kansas to present the proposal on the stockholder’s behalf at the meeting.
|
Dated: January 12, 2000 | BLUE VALLEY BAN CORP. | ||
By: | /s/ Robert D. Regnier | ||
Robert D. Regnier | |||
President |
Blue Valley Ban Corp.
11935 Riley
Overland Park, KS 66225-6128
|
Very truly yours, | |||
/s/ Husch Blackwell LLP | |||
Husch Blackwell LLP |
Kansas
|
6022
|
48-1070996
|
(State or other jurisdiction of incorporation or organization)
|
(Primary Standard Industrial
Classification Code Number)
|
(I.R.S. Employer
Identification No.)
|
Agent for Service:
Robert D. Regnier
President and Chief Executive Officer
Blue Valley Ban Corp.
11935 Riley
Overland Park, Kansas 66225-6128
(913) 338-1000
|
Copies of Communications to:
Steven F. Carman, Esq.
Husch Blackwell LLP
4801 Main Street, Suite 1000
Kansas City, Missouri 64112
(816) 983-8000
|
CALCULATION OF REGISTRATION FEE | |||||||
Title of Each Class
of Securities to
be Registered
|
Amount to be
Registered
|
Proposed
Offering
Price Per
Share
|
Proposed
Aggregate
Offering Price
|
Amount of
Registration Fee
|
|||
Nontransferable common
stock subscription rights
|
________ | ______ | ______ | ______(1) | |||
Common Stock, par value $1.00 per share | ________ | $________ (2) | $________ (2) | $________ |
|
(1)
|
The nontransferable subscription rights are being issued without consideration. Pursuant to Rule 457(g) under the Securities Act of 1933, as amended, no separate registration fee is required because the rights are being registered in the same registration statement as the securities to be offered pursuant thereto.
|
|
(2)
|
Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended.
|
Per Share
|
Total
|
|||||||
Minimum
|
Maximum
|
Minimum
|
Maximum
|
|||||
Subscription Price
|
$
|
$
|
$
|
$
|
||||
Estimated Expenses
|
$
|
$
|
$
|
$
|
||||
Proceeds to us
|
$
|
$
|
$
|
$
|
About This Prospectus
|
ii
|
|||
Cautionary Note regarding Forward-Looking Statements
|
ii
|
|||
Questions and Answers About The Rights Offering
|
iv
|
|||
Prospectus Summary
|
1
|
|||
Use of Proceeds
|
4
|
|||
Risk Factors
|
5
|
|||
The Rights Offering
|
12
|
|||
The Company
|
17
|
|||
Capitalization
|
35
|
|||
Selected Consolidated Financial Data
|
36
|
|||
Market Price and Dividends on Our Common Stock
|
38
|
|||
Dividends
|
38
|
|||
Dilution
|
38
|
|||
Material U.S. Federal Income Tax Consequences
|
39
|
|||
Plan of Distribution
|
42
|
|||
Description of Securities To Be Registered
|
42
|
|||
Management’s Discussion and Analysis Of Financial Condition and Results of Operations
|
47
|
|||
Management
|
78
|
|||
Beneficial Ownership Table
|
81
|
|||
Certain Relationships and Related Party Transactions
|
83
|
|||
Indemnification of Directors, Officers, and Employees
|
83
|
|||
Executive Compensation
|
86
|
|||
Legal Matters
|
88
|
|||
Experts
|
88
|
|||
Index to Financial Statements
|
F-1
|
•
|
general economic conditions, either nationally or locally in some or all of the areas in which we do business, or conditions in the securities or real estate markets or the banking industry may be less favorable than we currently anticipate;
|
||
•
|
the timing and occurrence or non-occurrence of events may be subject to circumstances beyond our control;
|
•
|
there may be increases in competitive pressure among financial institutions or from non-financial institutions;
|
•
|
changes in the interest rate environment could adversely affect our results of operations and financial condition;
|
•
|
changes in accounting principles, policies or guidelines;
|
•
|
legislative or regulatory changes may adversely affect our business;
|
•
|
changes in management’s estimate of the adequacy of the allowance for loan losses;
|
•
|
litigation or matters before regulatory agencies, whether currently existing or commencing in the future, may delay the occurrence or non-occurrence of events longer than we anticipate;
|
•
|
changes in deposit flows, loan demand or real estate values may adversely affect our business;
|
•
|
the Company’s non-payment of dividends and accrued interest on its trust preferred securities or fixed rate cumulative preferred stock;
|
||
•
|
technological changes may be more difficult or expensive than we anticipate; and
|
•
|
success or consumption of new business initiatives may be more difficult or expensive than we anticipate.
|
Q:
|
What is the rights offering?
|
||
A:
|
The rights offering is a distribution to holders of our common stock, at no charge, of nontransferable rights to purchase shares of our common stock based on your ownership of common stock as of ______, the record date. You may purchase one whole share of our common stock at $____ per share for every ____ rights granted to you.
|
||
Q:
|
Why do I need to exercise _____ rights to purchase one share of common stock?
|
||
A:
|
As of June 30, 2013 we had outstanding 2,938,871 shares of our common stock. By granting one right for each share of common stock, we have granted an aggregate of 2,938,871 rights. As a result, because we are targeting the sale of a maximum of ______ shares of common stock in this rights offering, you must exercise _____ rights to acquire one share.
|
||
Q:
|
What is a subscription right?
|
||
A:
|
A subscription right is the right to purchase shares of our common stock. Because we have 2,938,871 shares of common stock outstanding and we are targeting the sale of a maximum of _______ shares in connection with this rights offering, each subscription right carries with it a basic subscription right to purchase _____ of a share of our common stock. Each subscription right also includes an oversubscription right to purchase additional shares of our common stock.
|
||
Q:
|
What is the basic subscription right?
|
||
A:
|
Each whole subscription right entitles you to purchase _____ of a share of our common stock at the subscription price of $____ per share. We have granted to you, as a stockholder of record on the record date, a subscription right for each share of our common stock you owned at that time. Fractional shares of our common stock resulting from the exercise of the basic subscription right will be eliminated by rounding down to the nearest whole share, with the total subscription payment being adjusted accordingly. For example, if you owned 1,000 shares of our common stock on the record date, your basic subscription right would permit the purchase of ___ shares (1,000 purchase rights / __________, with fractional shares rounded down to the nearest whole number). You may exercise all or a portion of your basic subscription right, or you may choose not to exercise any subscription rights at all. However, if you exercise less than your full basic subscription right, you will not be entitled to purchase shares under your oversubscription right.
|
||
If you hold your shares in the name of a custodian bank, broker, dealer or other nominee, you will not receive a rights certificate. Instead, the Depository Trust Company, or DTC, will issue the appropriate number of subscription rights to your nominee record holder based on the shares of our common stock that you own at the record date. If you are not contacted by your nominee, you should contact your nominee as soon as possible.
|
Q:
|
What is the oversubscription right?
|
||
A:
|
If any holders of subscription rights do not fully exercise their basic subscription rights as of the expiration time of the rights offering, we will permit stockholders who do fully exercise their basic subscription rights to subscribe for additional shares of our common stock at the same subscription price per share, on the pro rata basis described below, rounded down to the nearest whole share number. This oversubscription right will be available only to stockholders who exercise their basic subscription rights in full.
|
||
If sufficient shares of common stock are available, we will seek to honor your oversubscription request in full. If, however, oversubscription requests exceed the number of shares of common stock available, we will allocate the available shares of common stock among stockholders who oversubscribed by multiplying the number of shares requested by each stockholder through the exercise of their oversubscription rights by a fraction that equals (x) the number of shares available to be issued through oversubscription rights divided by (y) the total number of shares requested by all subscribers through the exercise of their oversubscription rights. As described above for the basic subscription right, we will not issue fractional shares through the exercise of oversubscription rights.
The proceeds from the rights offering will improve our earnings by eliminating double interest and compounding interest by bringing current all previously accrued and unpaid dividends on our trust preferred securities issued by BVBC Capital Trust II and BVBC Capital Trust III (the “Subordinated Debentures”) and our Fixed Rate Cumulative Preferred Stock, Series A issued and sold to the United States Department of Treasury (the “Fixed Rate Cumulative Preferred Stock”). Any additional proceeds will be used for general corporate purposes. See section captioned “Use of Proceeds,” for more details.
|
|||
Q:
|
How many shares may I purchase if I exercise my subscription rights?
|
||
A:
|
The number of shares of common stock you can purchase under your basic subscription rights will depend on the number of subscription rights you receive. You will receive one basic subscription right for each share of our common stock you hold on the record date. Each basic subscription right entitles you to purchase ____ of a share of our common stock at the subscription price of $____ per share.
|
||
Upon exercising your oversubscription rights, you may request to subscribe for additional shares on your subscription rights certificate. However, the actual number of shares for which you will be entitled to subscribe under your oversubscription rights will not be determinable until after the expiration time of the rights offering and the pro rata allocation.
|
|||
Q:
|
What if there is an insufficient number of shares to satisfy the oversubscription requests?
|
||
A:
|
If there is an insufficient number of shares available to fully satisfy the oversubscription requests of rightsholders, each subscription rightsholder who exercised his or her oversubscription right will receive the available shares pro rata, rounded down to the nearest whole share number, as described above. Any excess subscription payments will be returned, without interest or deduction, promptly after the expiration of this rights offering.
|
||
Q:
|
Am I required to participate in the rights offering?
|
||
A:
|
No.
|
Q:
|
Why are we conducting the rights offering?
|
||
A:
|
We are conducting the rights offering to improve our earnings by eliminating double interest and compounding interest by bringing current all previously accrued and unpaid dividends on our Subordinated Debentures and our Fixed Rate Cumulative Preferred Stock, with any additional proceeds to be used for general corporate purposes. Our Board of Directors has chosen to raise capital through a rights offering to give our stockholders the opportunity to limit ownership dilution from a capital raise by allowing our current stockholders to purchase additional shares of our common stock. We cannot determine the amount of dilution that a stockholder will experience or whether the rights offering will be successful. See section of this prospectus captioned “Use of Proceeds,” for more details.
|
||
Q:
|
Will the Company be issuing fractional shares of common stock?
|
||
A:
|
No. You may not purchase fractional shares of common stock pursuant to the exercise of subscription rights. We will accept any subscription indicating a purchase of fractional shares by rounding down to the nearest whole share number and promptly refunding without interest any payment received for a fractional share.
|
||
Q:
|
If I wish to exercise my rights, do I have to exercise all of my rights?
|
||
A:
|
No. You may exercise some or all of your rights. However, if you subscribe for fewer than all the shares represented by your basic subscription rights, your remaining rights are non-transferable and will expire at the expiration time of the rights offering. You may not sell your remaining rights. In addition, you may only participate in the oversubscription portion of this rights offering if you exercise your basic subscription rights in full.
|
||
Q:
|
How long will the rights offering remain open?
|
||
A:
|
The rights offering will commence on the day this registration statement becomes effective. The rights offering will remain open for [16] days after commencement, and the rights will expire at 5:00 p.m., Eastern Time, on _______, 2013 unless we extend the rights offering. We reserve the right to extend the rights offering at our discretion for a period not to exceed 45 additional days beyond ______, 2013, in which event the term “expiration time” will mean the latest date and time to which the rights offering has been extended. We will make a public announcement of any extension by issuing a press release prior to 9:00 a.m., Eastern Time, on the next business day after the previously scheduled expiration time and filing a Current Report on Form 8-K with the Securities and Exchange Commission. In addition, if the commencement of the rights offering is delayed, the expiration time of the rights offering will be similarly delayed. In that event, we will notify you by issuing a press release and filing a Current Report on Form 8-K with the Securities and Exchange Commission.
|
||
Q:
|
When must I exercise my oversubscription rights?
|
||
A:
|
You must exercise your oversubscription rights when you exercise your basic subscription rights in full. However, the number of shares for which you will be entitled to subscribe under your oversubscription rights cannot be determined until after the expiration time of the rights offering period.
|
||
Q:
|
What happens if I choose not to exercise my subscription rights?
|
||
A:
|
You will retain your current number of shares of our common stock held by you even if you do not exercise your subscription rights. If you choose not to exercise your subscription rights, then the percentage of our capital stock held by you will decrease, however, the magnitude of the reduction will depend upon the extent to which other rightsholders subscribe in the rights offering.
|
Q:
|
Will I be charged a sales commission or a fee by the Company if I exercise my subscription rights?
|
||
A:
|
No. We will not charge a brokerage commission or a fee to rightsholders for exercising their subscription rights. However, if you exercise your subscription rights through a broker or nominee, then you will be responsible for any transaction fees charged by your broker or nominee.
|
||
Q:
|
What is the Board of Directors’ recommendation regarding whether I should exercise my rights in the rights offering?
|
||
A:
|
Our Board of Directors is not making any recommendation as to whether you should exercise your subscription rights. You are urged to make your decision based on your own assessment of our business and the rights offering.
|
||
Q:
|
Are there any conditions to completing the rights offering?
|
||
A:
|
Yes. We must sell the minimum offering amount of at least $5.0 million (_______ shares) of common stock for the rights offering to be completed.
|
||
Q:
|
If the rights offering is not completed, will my subscription payment be refunded to me?
|
||
A:
|
Yes. The subscription agent will hold all funds it receives in escrow until completion of the rights offering. If the right offering is not completed, the subscription agent will return promptly, without interest, all subscription payments. We reserve the right to terminate the offering at any time if, due to market conditions or otherwise, the Board of Directors deems it advisable not to proceed with the rights offering.
|
||
Q:
|
Will our directors and executive officers participate in the rights offering?
|
||
A:
|
We expect our directors and executive officers and the directors of our primary wholly-owned subsidiary, Bank of Blue Valley (the “Bank”), together with their affiliates, to subscribe for, in the aggregate, ______ shares of common stock in the rights offering, which includes shares acquired in connection with their oversubscription rights. The purchase price paid by them will be $_____ per share, the same paid by all other persons who purchase shares of our common stock in the stock offerings. Assuming our directors and their affiliates purchase the number of shares in this rights offering reflected herein, and assuming we sell ______ shares of stock in the rights offering, our directors, together with their affiliates, are expected to own approximately _______ shares of common stock, which represents approximately ___% of our total outstanding shares of common stock.
|
||
Q:
|
How was the subscription price established?
|
||
A:
|
In determining the subscription price, our Board of Directors considered a number of factors, including: the price at which our stockholders might be willing to participate in the rights offering, historical and current trading prices for our common stock, the need for liquidity and capital, potential market conditions, and the desire to provide an opportunity to our stockholders to participate in the rights offering on a pro rata basis. In conjunction with its review of these factors, our Board of Directors also reviewed our history and prospects, including our past and present earnings, our prospects for future earnings, our current financial condition and regulatory status. Although we did not seek or obtain an opinion of a financial advisor in establishing the subscription price, a special committee of the Board of Directors was provided with financial information concerning current market conditions, trading values of other bank holding companies, recent public common stock offerings, and other recent capital raising efforts of bank holding companies. The subscription price is not necessarily related to our book value, net worth or any other established criteria of value and may or may not be considered the fair value of our common stock. You should not assume or expect that, after this offering, our shares of common stock will trade at or above the $_____ per share purchase price.
|
Q:
|
Is exercising my subscription rights risky?
|
A:
|
Yes. Investing in our securities involves risks. Exercising your rights should be considered as carefully as any other equity investment. Some of the risks include the following:
|
||
•
|
You may not revoke your subscription rights once you exercise them and so you could be committed to buying shares above the prevailing market value of our common stock.
|
||
•
|
If you do not act promptly and follow subscription instructions, then we may reject your exercise of subscription rights.
|
||
•
|
For a more complete discussion of the risks associated with an investment in our common stock, you should carefully review the section captioned “Risk Factors”.
|
||
Q:
|
May I transfer my subscription rights if I do not want to purchase any shares?
|
||
A:
|
No. Your subscription rights are not transferable.
|
||
Q:
|
Is there a minimum subscription required to complete the rights offering?
|
||
A:
|
There is no individual minimum purchase requirement in the rights offering. However, we will not complete the rights offering unless we receive aggregate subscriptions of at least $5.0 million (__________ shares) of common stock in the rights offering.
|
||
Q:
|
Is there a limit to how much common stock will be issued in the rights offering?
|
||
A:
|
We will accept subscriptions for a maximum of $10.0 million (_______ shares) of common stock in the rights offering.
|
||
Q:
|
How many shares will be outstanding after the rights offering?
|
||
A:
|
There were 2,938,871 shares of our common stock outstanding as of June 30, 2013. If the maximum number of shares are sold in the rights offering we expect there will be __________ shares of our common stock outstanding. If the minimum number of shares are sold in the rights offering, we expect there will be _______ shares of our common stock outstanding.
|
||
Q:
|
After I exercise my subscription rights, can I change my mind and cancel my purchase?
|
||
A:
|
No. All exercises of subscription rights are irrevocable.
|
||
Q:
|
What are the federal income tax consequences of receiving or exercising my subscription rights as a holder of common stock?
|
||
A:
|
A holder of common stock will not recognize income or loss for federal income tax purposes in connection with the receipt or exercise of subscription rights in the rights offering. We urge you to consult your own tax adviser with respect to the particular tax consequences of the rights offering or any related share purchases by you. See section captioned, “Material U.S. Federal Income Tax Consequences,” for more details.
|
||
Q:
|
To whom should I send my forms and payment?
|
||
A:
|
If your shares are held in the name of a broker, or other nominee holder, then you should send your subscription documents, subscription rights certificate, notices of guaranteed delivery, and subscription payment to that record holder. If you are the record holder, then you should send your subscription documents, [subscription rights certificate], notices of guaranteed delivery, and subscription payment to Computershare, Inc. at:
|
By Mail, By Hand, or By Overnight Courier
American Stock Transfer & Trust Company, LLC
6201 15th Avenue
Brooklyn, NY 11219
|
You are solely responsible for completing delivery to the subscription agent of your subscription documents, [subscription rights certificate], notices of guaranteed delivery, and subscription payment. We urge you to allow sufficient time for delivery of your subscription materials to the subscription agent so that they are received by the subscription agent by 5:00 p.m., Eastern Time, on _________, 2013.
|
|||
If you send a payment that is insufficient to purchase the number of shares you requested, or if the number of shares you requested is not specified in the forms, the payment received will be applied to exercise your subscription rights to the fullest extent possible based on the amount of the payment received, subject to the availability of shares under the oversubscription right and the elimination of fractional shares. Any excess subscription payments received by the subscription agent will be returned, without interest, as soon as practicable following the expiration of the rights offering.
|
|||
Q:
|
What form of payment is required to purchase the shares of our common stock?
|
||
A:
|
As described in the subscription rights certificate, payments submitted to the subscription agent must be made in full United States currency by:
|
||
•
|
personal or certified check to American Stock Transfer & Trust Company, LLC, drawn upon a United States bank;
|
||
•
|
postal, telegraphic or express money order payable to American Stock Transfer & Trust Company, LLC; or
|
||
•
|
wire transfer of immediately available funds to accounts maintained by American Stock Transfer & Trust Company, LLC
|
||
Q:
|
What should I do if I want to participate in the rights offering but my shares are held in the name of my broker, custodian bank, or other nominee?
|
||
A:
|
If you hold shares of our common stock through a broker, custodian bank, or other nominee, then we will ask your broker, custodian bank, or other nominee to notify you of the rights offering. If you wish to exercise your subscription rights, then you will need to have your broker, custodian bank, or other nominee act for you.
|
||
Q:
|
When will I receive my new shares?
|
||
A:
|
If you purchase stock in the rights offering by submitting a subscription rights certificate and payment, we will mail you a stock certificate representing your new shares as soon as practicable after the expiration of the rights offering; however, we will not be able to begin calculations for any oversubscription pro rata allocations and adjustments until [three] days after the expiration time of the rights offering, which is the latest date for our stockholders to deliver the subscription rights certificate according to the guaranteed delivery procedures. If your shares are held by your nominee, and you participate in the rights offering, you will not receive a stock certificate for your new shares. Your nominee will be credited with the shares of common stock you purchase in the rights offering as soon as practicable after the expiration of the rights offering.
|
||
Q:
|
What should I do if I have other questions?
|
||
A:
|
If you have questions or need assistance about the procedure for exercising your rights, [including the procedure if you have lost your rights certificate], please contact, American Stock Transfer & Trust Company, LLC, which is acting as our subscription agent and transfer agent, at:
|
You may also contact Bob Regnier, our President and Chief Executive Officer, at (913) 234-2240 or Mark Fortino our Chief Financial Officer, at (913) 234-2345 from 7:00 a.m. to 6:00 p.m., Central Time, Monday through Friday, if you have any questions.
|
PROSPECTUS SUMMARY
This summary highlights information contained elsewhere in this prospectus or incorporated herein. Because this is a summary, it does not contain all the information that may be important to you. For a more complete understanding, you should carefully read the more detailed information set out in this prospectus, especially the “Risk Factors” section, as well as the financial statements and the related notes to those statements included elsewhere in this prospectus.
The Company
Blue Valley, a Kansas corporation, is a bank holding company organized in 1989. The Bank, the Company’s primary wholly-owned subsidiary, was also organized in 1989 to provide banking services to closely-held businesses and their owners, professionals and residents in Johnson County, Kansas, a high growth, demographically attractive area within the Kansas City, Missouri — Kansas Metropolitan Statistical Area (the “Kansas City MSA”). The focus of Blue Valley has been to take advantage of the current and anticipated growth in our market area as well as to serve the needs of small and mid-sized commercial customers. We believe that these customers are underserved as a result of banking consolidation in the industry generally and within our market specifically.
The Bank operates a total of five banking center locations in Johnson County, Kansas, including our main office, which includes a lobby banking center in Overland Park, as well as full-service offices in Leawood, Lenexa, Olathe, and Shawnee, Kansas.
The Company’s lending activities are focused on commercial, commercial real estate, construction, home equity and residential real estate lending. In addition, the Bank infrequently engages in lease financing and provides consumer lending. The Company strives to identify, develop and maintain diversified lines of business that provide acceptable risk-adjusted returns.
The Company seeks to develop lines of business that diversify the Bank’s revenue sources, increase the Bank’s non-interest income and offer additional value-added services to the Bank’s customers. We develop these new or existing lines of business while monitoring related risk factors. In addition to fees generated in conjunction with lending activities, the Bank derives non-interest income by providing mortgage origination, deposit and cash management services, as well as trust and investment brokerage services.
In addition to the Bank, the Company has two wholly-owned subsidiaries, BVBC Capital Trust II and BVBC Capital Trust III, which issued the Subordinated Debentures.
The proceeds from this rights offering will improve our earnings by eliminating double interest and compounding interest by bringing current all previously accrued and unpaid dividends on our Subordinated Debentures and Fixed Rate Cumulative Preferred Stock, with any additional proceeds to be used for general corporate purposes. See the section of this prospectus captioned “Use of Proceeds” for further details.
Our principal executive offices are located at 11935 Riley, Overland Park, Kansas 66225-6128, and our telephone number is (913) 338-1000. Our website address is http://www.bankbv.com. Information included or referred to on our website is not incorporated by reference in or otherwise a part of this prospectus.
|
|||
1
|
The Rights Offering | |||||
Securities Offered By Us:
|
We are distributing to you, at no charge, a non-transferable subscription right for each share of our common stock that you owned as of 5:00 p.m., Eastern Time, on ______, the record date, either as a holder of record or, in the case of shares held of record by custodian banks, brokers, dealers, or other nominees on your behalf, as a beneficial owner of such shares. If the rights offering is fully subscribed, the gross proceeds from the rights offering will be $__________.
|
||||
Subscription Price:
|
$_____ per share
|
||||
Minimum Offering:
|
The rights offering is conditioned upon the receipt of minimum gross proceeds of $5.0 million.
|
||||
Maximum Offering:
|
The rights offering is subject to a limit of $10.0 million in gross proceeds.
|
||||
Common Stock to be
Outstanding Immediately
After This Offering:
|
Assuming no options are exercised prior to the expiration of the rights offering and assuming the minimum and maximum number of shares are sold in the rights offering, we expect approximately ______ and ______ shares of our common stock will be outstanding, respectively, immediately after completion of the rights offering.
|
||||
Record Date:
|
5:00 p.m. Eastern Time on [record date]
|
||||
Basic Rights of Common
Stockholders:
|
As a common stockholder, you are entitled to receive a subscription right for each whole share of our common stock you owned on the record date. For each basic subscription right you hold, you may purchase _____ shares of our common stock.
|
||||
Oversubscription Right:
|
In the event that you purchase all of the shares of our common stock available to you pursuant to your basic subscription rights, you may also choose to purchase a portion of any shares of our common stock that our other stockholders do not purchase through the exercise of their basic subscription rights. The number of shares of our common stock that you purchase pursuant to this oversubscription right will be determined on a pro rata basis.
|
||||
Nontransferability:
|
You may not transfer your subscription rights.
|
||||
Maximum Offering:
|
The maximum number of shares to be sold in this offering is ______ plus any oversubscription rights that the Board of Directors, in its sole discretion, elects to honor in an amount up to an additional _______ shares.
|
||||
Irrevocability:
|
Once you submit a subscription, you may not revoke it.
|
||||
Best Efforts Offering:
|
We are offering the shares on a best efforts basis. This means there is no guarantee that we will be able to sell all or any of the shares offered. We intend to pay no commissions on shares we sell in this offering. However, we have reserved the right to retain brokers or sales agents to assist us in selling the shares, if we deem it necessary.
|
||||
No Recommendation:
|
Our Board of Directors is making no recommendation as to whether you should subscribe for shares pursuant to either your basic right or your oversubscription right.
|
||||
2
|
Board and Executive Officer Commitment: |
We expect our directors and executive officers and the directors of the Bank, together with their affiliates, to subscribe for, in the aggregate ______ shares of common stock in the rights offering, which includes shares acquired in connection with their oversubscription rights. The purchase price paid by them will be $_____ per share, the same paid by all other persons who purchase shares of our common stock in the stock offerings.
|
||||
Use Of Proceeds:
|
We intend to use the first $4.1 million of net proceeds of the rights offering to bring current all previously accrued and unpaid dividends on the Subordinated Debentures. This will improve our earnings by eliminating double interest and compounding interest currently being paid on the Subordinated Debentures. We intend to use the next $4.6 million to bring current all previously accrued and unpaid dividends and interest on the Fixed Rate Cumulative Preferred Stock. This will improve our earnings by eliminating compounding interest currently being paid on the Fixed Rate Cumulative Preferred Stock. Any remaining proceeds will be used for general corporate purposes. See the section of this prospectus captioned “Use of Proceeds” for further details.
|
||||
Risk Factors: |
See the section of this prospectus captioned “Risk Factors” on page __ and other information included in this prospectus for a discussion of certain factors that you should carefully consider before making a decision to invest in our common stock.
|
||||
Expiration Date: |
The offering will terminate on _________, 2013, unless extended by our Board of Directors for up to an additional __ days.
|
||||
Subscription Agent and Transfer Agent: | We have retained American Stock Transfer & Trust Company, LLC to act as the subscription agent and information agent for the rights offering. The process for you to follow in communicating with American Stock Transfer & Trust Company, LLC is set forth in the section of this prospectus captioned “QUESTIONS AND ANSWERS ABOUT THE RIGHTS OFFERING”. | ||||
3
|
|
·
|
Stockholder A would receive 25 additional shares pursuant to the over-subscription privilege, calculated as:
|
|
o
|
50 divided by 200 (50 plus 150) equals 0.25
|
|
o
|
100 multiplied by 0.25 equals 25
|
|
·
|
Stockholder B would receive 75 additional shares pursuant to the over-subscription privilege, calculated as:
|
|
o
|
150 divided by 200 (50 plus 150) equals 0.75
|
|
o
|
100 multiplied by 0.75 equals 75
|
|
·
|
personal or certified check to American Stock Transfer & Trust Company, LLC, drawn upon a United States bank;
|
|
·
|
postal, telegraphic or express money order payable to American Stock Transfer & Trust Company, LLC; or
|
|
·
|
wire transfer of immediately available funds to accounts maintained by American Stock Transfer & Trust Company, LLC
|
As of June 30, 2013
|
||||||||||
Amount
|
Percent
|
|||||||||
(In thousands)
|
||||||||||
Commercial
|
$ | 119,435 | 29.27 | % | ||||||
Commercial real estate
|
133,304 | 32.67 | % | |||||||
Construction
|
47,082 | 11.54 | % | |||||||
Home equity
|
45,412 | 11.13 | % | |||||||
Residential real estate
|
46,616 | 11.42 | % | |||||||
Lease financing
|
9,512 | 2.33 | % | |||||||
Consumer
|
6,704 | 1.64 | % | |||||||
Total loans and leases
|
408,065 | 100.00 | % | |||||||
Less allowance for loan losses
|
8,655 | |||||||||
Loans receivable, net
|
$ | 399,410 |
|
·
|
Establishes a new oversight regulator, the Financial Stability Oversight Council, to monitor the financial system for systemic risk and to determine which entities pose significant risk, as well as monitor financial regulatory proposals and standards.
|
|
·
|
Centralizes responsibility for consumer financial protection by creating a new agency, the Consumer Financial Protection Bureau, with broad powers to enforce consumer protection laws and ensure that markets for consumer financial products and services are fair, transparent and competitive.
|
|
·
|
Amends Sarbanes-Oxley Act 404(b) to make permanent the temporary exemption for smaller reporting companies (filers with less than $75 million in market cap – Blue Valley Ban Corp. is a smaller reporting company) to comply with the independent auditor attestation requirement on the company’s evaluation of the effectiveness of internal controls over financial reporting.
|
|
·
|
Changes the assessment base for FDIC insurance assessments from the amount of total domestic deposits to average consolidated total assets less average tangible equity (Tier 1 Capital) and sets a target size for the Deposit Insurance Fund.
|
|
·
|
Permanently increases the FDIC deposit insurance per depositor from $100,000 to $250,000.
|
|
·
|
Repeals the federal prohibitions on the payment of interest on demand deposits, thus permitting depository institutions to pay interest on business transactions and other accounts.
|
|
·
|
Requires the Federal Reserve to issue rules to limit the amount of any debit card interchange fee that an issuer may receive or charge with respect to electronic debit card transactions to be reasonable and proportional to the cost incurred by the issuer with respect to the transaction. Cards issued by banks with less than $10 billion in assets are to be exempt from this requirement, thus Blue Valley Ban Corp. would be exempt from this requirement.
|
|
·
|
Implements corporate governance revisions for public companies, including proxy access requirements for stockholders and stockholder non-binding vote on executive compensation and “golden parachute’ payments.
|
|
·
|
Restricts the ability of banks to apply trust preferred securities toward regulatory capital requirements. However, Tier 1 Capital treatment for trust preferred securities issued before May 19, 2010 is grandfathered for bank holding companies with less than $15 billion in total assets. Blue Valley Ban Corp.’s Subordinated Debentures are grandfathered under this provision.
|
|
·
|
Mortgage reform and anti-predatory lending provision places new regulations on mortgage originators to ensure a borrower’s ability to repay and imposes new disclosure requirements and appraisal reforms.
|
|
·
|
Bonus, incentive compensation, and retention payments made to the Senior Executive Officers and the next 20 most highly compensated employees are subject to recovery or “clawback” by the Company if the payments were based on materially inaccurate financial statements or any other materially inaccurate performance metric criteria;
|
|
·
|
Prohibits paying any “golden parachute” payment to any Senior Executive Officer or any of the next five most-highly compensated employees, generally meaning any payment in the nature of compensation to (or for the benefit of) an executive officer made in connection with an applicable severance from employment other than compensation earned for services rendered or accrued benefits;
|
|
·
|
Prohibits paying or accruing any bonus, retention award or incentive compensation to the most highly compensated employee, except for awards of long-term restricted stock that have a value equal to no greater than one-third of such executive’s annual compensation and do not fully vest during the restricted period; and
|
|
·
|
Review of bonuses, retention awards, and other compensation paid to the Senior Executive Officers and the next 20 most-highly compensated employees to determine whether any such payments were inconsistent with the purposes of the TARP or otherwise against public interest.
|
|
·
|
Acquiring, directly or indirectly, ownership or control of any voting shares of another bank or bank holding company if, after the acquisition, it would own or control more than 5% of the shares of the bank or bank holding company (unless it already owns or controls the majority of the shares);
|
|
·
|
Acquiring all or substantially all of the assets of another bank or bank holding company; or
|
|
·
|
Merging or consolidating with another bank holding company.
|
|
·
|
Acquiring or retaining direct or indirect ownership or control of more than 5% of the voting shares of any company that is not a bank or bank holding company; and
|
|
·
|
Engaging, directly or indirectly, in any business other than that of banking, managing and controlling banks or furnishing services to banks and their subsidiaries.
|
|
·
|
“Well capitalized” if the institution has a total risk-based capital ratio of 10% or greater, a Tier 1 risk-based capital ratio of 6% or greater, and a leverage ratio of 5% or greater, and the institution is not subject to an order, written agreement, capital directive, or prompt corrective action directive to meet and maintain a specific capital level for any capital measure. Although the Company is subject to a written agreement, the written agreement does not contain any prompt corrective action directives to meet and maintain a specific capital level for any capital measure.
|
|
·
|
“Adequately capitalized” if the institution has a total risk-based capital ratio of 8% or greater, a Tier 1 risk-based capital ratio of 4% or greater, and a leverage ratio of 4% or greater.
|
|
·
|
“Undercapitalized” if the institution has a total risk-based capital ratio that is less than 8%, a Tier 1 risk-based capital ratio that is less than 4%, or a leverage ratio that is less than 4%.
|
|
·
|
“Significantly undercapitalized” if the institution has a total risk-based capital ratio that is less than 6%, a Tier 1 risk-based capital ratio that is less than 3%, or a leverage ratio that is less than 3%.
|
|
·
|
“Critically undercapitalized” if the institution has a ratio of tangible equity to total assets that is equal to or less than 2%.
|
|
·
|
Placing limits on asset growth and restrictions on activities, including the establishment of new branches;
|
|
·
|
Requiring the institution to issue additional capital stock (including additional voting stock) or to be acquired;
|
|
·
|
Restricting transactions with affiliates;
|
|
·
|
Restricting the interest rate the institution may pay on deposits;
|
|
·
|
Requiring that senior executive officers or directors be dismissed;
|
|
·
|
Requiring the institution to divest subsidiaries;
|
|
·
|
Prohibiting the payment of principal or interest on subordinated debt; and
|
|
·
|
Appointing a receiver for the institution.
|
Location
|
Year Occupied
|
Mortgage
Indebtedness as
of June 30, 2013
|
Occupancy
|
||
Overland Park Banking Center
11935 Riley
Overland Park, KS *
|
1994
|
None
|
100%
|
||
Olathe Banking Center
1235 E. Santa Fe
Olathe, KS **
|
2001
|
None
|
100%
|
||
Shawnee Banking Center
5520 Hedge Lane Terrace
Shawnee, KS **
|
2001
|
None
|
100%
|
College Boulevard Office
7900 College Boulevard
Overland Park, KS *
|
2003
|
None
|
|||
Leawood Banking Center
13401 Mission Road
Leawood, KS *
|
2004
|
None
|
|||
Lenexa Banking Center
9500 Lackman Road
Lenexa, KS **
|
2007
|
None
|
100%
|
As of and For the Six Months Ended June 30, 2013
|
|||||||
Pro Forma With Deployment of Proceeds from
|
|||||||
Actual
|
$5 Million Rights Offering
|
$10 Million Rights Offering
|
|||||
Selected Financial Condition Data
(at end of period)
|
|||||||
Total assets
|
636,776
|
637,818
|
637,718
|
||||
Total liabilities
|
599,181
|
595,523
|
590,523
|
||||
Total stockholders’ equity
|
37,595
|
42,295
|
47,195
|
||||
Selected Financial Ratios and Other Data
|
|||||||
Net income (annualized)
|
$
|
797
|
$
|
1,168
|
$
|
1,418
|
|
Earnings per share (basic)
|
(0.10)
|
0.02
|
0.13
|
||||
Earnings per share (diluted)
|
(0.10)
|
0.02
|
0.13
|
||||
Capital Rations (% except as otherwise noted):
|
|||||||
Total equity to total assets
|
5.90
|
6.63
|
7.40
|
||||
Total capital to risk-weighted assets ratio
|
12.67
|
13.56
|
14.52
|
||||
Tier 1 capital to risk-weighted assets ratio
|
10.29
|
11.19
|
12.14
|
||||
Tier 1 capital to average assets ratio
|
8.29
|
8.29
|
8.29
|
||||
Book value per share
|
$
|
5.37
|
$
|
5.60
|
$
|
5.81
|
As of and For the Six Months Ended June 30,
|
As of and For the Year Ended December 31,
|
|||||||||||||||||||||||
2013
|
2012
|
2011
|
2010
|
2009
|
2008
|
|||||||||||||||||||
(in thousands, except per share data)
|
(unaudited)
|
|||||||||||||||||||||||
Selected Statement of Income Data
|
||||||||||||||||||||||||
Interest income:
|
||||||||||||||||||||||||
Interest and fees on loans
|
$ | 10,485 | $ | 22,853 | $ | 25,277 | $ | 28,011 | $ | 33,996 | $ | 41,245 | ||||||||||||
Federal funds sold and short-term investments
|
79 | 193 | 151 | 245 | 144 | 378 | ||||||||||||||||||
Available-for sale securities
|
694 | 1,097 | 1,202 | 1,825 | 1,943 | 3,375 | ||||||||||||||||||
Dividends on Federal Home Loan Bank
|
||||||||||||||||||||||||
and Federal Reserve Bank Stock
|
124 | 240 | 225 | 222 | 211 | 265 | ||||||||||||||||||
Total interest and dividend income
|
11,382 | 24,383 | 26,855 | 30,303 | 36,294 | 45,263 | ||||||||||||||||||
Interest expense:
|
||||||||||||||||||||||||
Interest-bearing demand deposits
|
$ | 160 | $ | 700 | $ | 1,611 | $ | 2,343 | $ | 2,589 | $ | 1,394 | ||||||||||||
Savings and money market deposit
|
||||||||||||||||||||||||
accounts
|
138 | 291 | 346 | 438 | 490 | 2,402 | ||||||||||||||||||
Other time deposits
|
902 | 2,487 | 3,755 | 7,746 | 10,742 | 12,139 | ||||||||||||||||||
Funds borrowed and other interest-bearing liabilities
|
1,838 | 3,714 | 3,543 | 3,836 | 4,166 | 5,756 | ||||||||||||||||||
Total interest expense
|
3,038 | 7,192 | 9,255 | 14,363 | 17,987 | 21,691 | ||||||||||||||||||
Net interest income
|
8,344 | 17,191 | 17,600 | 15,940 | 18,307 | 23,572 | ||||||||||||||||||
Provision for loan losses
|
(500 | ) | 1,200 | 3,300 | 3,095 | 21,635 | 17,025 | |||||||||||||||||
Net intest income (loss) after
|
||||||||||||||||||||||||
provision for loan losses
|
8,844 | 15,991 | 14,300 | 12,845 | (3,328 | ) | 6,547 | |||||||||||||||||
Non-interest income:
|
||||||||||||||||||||||||
Loans held for sale fee income
|
770 | 2,447 | 2,120 | 3,506 | 2,785 | 2,136 | ||||||||||||||||||
Service fees
|
1,696 | 3,452 | 3,220 | 3,083 | 3,250 | 3,299 | ||||||||||||||||||
Realized gains on available-for-sale
|
||||||||||||||||||||||||
securities
|
127 | - | - | 885 | 346 | 702 | ||||||||||||||||||
Gain on settlement of litigation
|
- | - | - | - | - | 1,000 | ||||||||||||||||||
Other income
|
901 | 1,535 | 984 | 1,145 | 1,664 | 1,010 | ||||||||||||||||||
Total non-interest income
|
3,494 | 7,434 | 6,324 | 8,619 | 8,045 | 8,147 | ||||||||||||||||||
Non-interest expense:
|
||||||||||||||||||||||||
Salaries and employee benefits
|
5,322 | 10,587 | 10,955 | 11,753 | 12,272 | 12,500 | ||||||||||||||||||
Net occupancy expense
|
1,309 | 2,568 | 2,599 | 2,756 | 2,811 | 3,144 | ||||||||||||||||||
Goodwill impairment
|
- | - | - | - | - | 4,821 | ||||||||||||||||||
Foreclosed asset expense
|
2,198 | 2,647 | 5,219 | 2,708 | 3,862 | 944 | ||||||||||||||||||
Other operating expense
|
3,114 | 7,506 | 7,851 | 8,550 | 8,896 | 7,360 | ||||||||||||||||||
Total non-interest expense
|
11,943 | 23,308 | 26,624 | 25,767 | 27,841 | 28,769 | ||||||||||||||||||
Income (loss) before income taxes
|
395 | 117 | (6,000 | ) | (4,303 | ) | (23,124 | ) | (14,075 | ) | ||||||||||||||
Provision (benefit) for income taxes
|
- | (150 | ) | 9,823 | (1,561 | ) | (8,514 | ) | (3,824 | ) | ||||||||||||||
Net Income
|
395 | 267 | (15,823 | ) | (2,742 | ) | (14,610 | ) | (10,251 | ) | ||||||||||||||
Dividends and Accretion on Preferred Stock
|
544 | 1,106 | 1,106 | 1,105 | 1,045 | - | ||||||||||||||||||
Net Income (Loss) to Common Shareholders
|
(149 | ) | (839 | ) | (16,929 | ) | (3,847 | ) | (15,655 | ) | (10,251 | ) | ||||||||||||
Per Share Data
|
||||||||||||||||||||||||
Basic earnings
|
$ | (0.05 | ) | $ | (0.29 | ) | $ | (6.03 | ) | $ | (1.38 | ) | $ | (5.68 | ) | $ | (4.20 | ) | ||||||
Diluted earnings
|
(0.05 | ) | (0.29 | ) | (6.03 | ) | (1.38 | ) | (5.68 | ) | (4.20 | ) | ||||||||||||
Dividends
|
- | - | - | - | - | - | ||||||||||||||||||
Book value, basic (at end of period)
|
5.42 | 6.20 | 6.60 | 12.66 | 14.09 | 19.97 | ||||||||||||||||||
Weighted average common shares
|
||||||||||||||||||||||||
outstanding
|
||||||||||||||||||||||||
Basic
|
2,907,302 | 2,855,566 | 2,806,299 | 2,773,039 | 2,754,419 | 2,438,809 | ||||||||||||||||||
Diluted
|
2,925,256 | 2,867,563 | 2,827,888 | 2,788,154 | 2,762,603 | 2,460,045 | ||||||||||||||||||
Dividend payout ratio
|
0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % |
As of and For the Six Months Ended June 30
|
As of and for the
Year Ended December 31
|
||||||||||||||
2013
|
2012
|
2011
|
2010
|
2009
|
2008
|
||||||||||
Selected Financial Condition Data
|
|||||||||||||||
(at end of period)
|
|||||||||||||||
Total available-for-sale securities
|
$ 87,868
|
$ 77,845
|
$ 61,790
|
$ 63,640
|
$ 72,757
|
$ 68,681
|
|||||||||
Total mortgage loans held for sale, fair value
|
5,956
|
7,621
|
5,686
|
8,162
|
8,752
|
8,157
|
|||||||||
Total loans
|
408,065
|
415,671
|
438,843
|
492,454
|
554,111
|
662,401
|
|||||||||
Total assets
|
636,776
|
657,005
|
654,452
|
723,101
|
773,967
|
815,700
|
|||||||||
Total deposits
|
452,168
|
484,466
|
490,413
|
541,218
|
590,110
|
600,868
|
|||||||||
Funds borrowed and other interest-bearing liabilities
|
136,080
|
122,779
|
115,806
|
118,505
|
118,208
|
135,129
|
|||||||||
Total stockholders' equity
|
37,594
|
39,815
|
40,455
|
57,164
|
60,603
|
76,439
|
|||||||||
Trust assets under administration
|
148,207
|
140,976
|
129,580
|
125,702
|
105,071
|
112,688
|
|||||||||
Selected Financial Ratios and Other Data
|
|||||||||||||||
Performance Ratios (%):
|
|||||||||||||||
Net Interest Margin (1)
|
2.99
|
2.92
|
2.91
|
2.23
|
2.43
|
3.20
|
|||||||||
Non-interest income to average assets
|
1.11
|
1.14
|
0.93
|
1.09
|
0.99
|
1.04
|
|||||||||
Non-interest expense to average assets
|
3.80
|
3.57
|
3.90
|
3.26
|
3.42
|
3.67
|
|||||||||
Net overhead ratio (2)
|
2.68
|
2.43
|
2.97
|
2.14
|
2.40
|
2.59
|
|||||||||
Efficiency ratio (3)
|
100.89
|
94.65
|
111.29
|
104.92
|
105.65
|
90.70
|
|||||||||
Return on average assets (4)
|
0.13
|
0.04
|
(2.32)
|
(0.35)
|
(1.79)
|
(1.31)
|
|||||||||
Return on average equity (5)
|
(1.72)
|
(4.97)
|
(51.84)
|
(10.25)
|
(33.07)
|
(17.53)
|
|||||||||
Asset Quality Ratios (%):
|
|||||||||||||||
Non-performing loans to total loans
|
1.33
|
1.16
|
2.58
|
6.16
|
6.30
|
6.54
|
|||||||||
Allowance for possible loan losses to:
|
|||||||||||||||
Total loans
|
2.12
|
2.18
|
3.01
|
2.99
|
3.61
|
1.87
|
|||||||||
Non-performing loans
|
159.54
|
187.23
|
116.46
|
48.53
|
57.33
|
28.54
|
|||||||||
Net charge-offs to average loans
|
(0.02)
|
1.24
|
1.04
|
1.61
|
2.30
|
2.16
|
|||||||||
Non-performing loans to total assets
|
0.85
|
0.74
|
1.73
|
4.20
|
4.51
|
5.31
|
|||||||||
Non-performing assets to total assets
|
5.25
|
5.60
|
6.20
|
6.98
|
7.02
|
5.90
|
|||||||||
OREO to Non-performing assets
|
83.77
|
86.85
|
72.09
|
39.89
|
35.71
|
9.92
|
|||||||||
Texas Ratio (6)
|
54.05
|
69.13
|
78.25
|
76.19
|
73.28
|
50.78
|
|||||||||
Classified asset ratio (classified assets to Tier 1
|
|||||||||||||||
Capital and ALLL)
|
30.71
|
30.97
|
58.71
|
83.70
|
108.06
|
88.87
|
|||||||||
Balance Sheet Ratios (%):
|
|||||||||||||||
Loans to deposits
|
90.25
|
85.80
|
89.48
|
90.99
|
93.90
|
110.24
|
|||||||||
Average interest-earning assets to
|
|||||||||||||||
average interest-bearing liabilities
|
117.32
|
118.52
|
116.17
|
113.18
|
115.08
|
116.25
|
|||||||||
Capital Ratios-Consolidated (%):
|
|||||||||||||||
Total equity to total assets
|
5.90
|
6.06
|
6.18
|
7.91
|
7.83
|
9.37
|
|||||||||
Total capital to risk-weighted assets ratio
|
12.68
|
12.01
|
12.08
|
12.66
|
12.54
|
13.82
|
|||||||||
Tier 1 capital to risk weighted assets ratio
|
10.29
|
9.70
|
9.80
|
11.39
|
11.26
|
12.57
|
|||||||||
Tier 1 capital to average assets ratio
|
8.36
|
8.10
|
8.04
|
9.04
|
9.07
|
11.50
|
|||||||||
Average equity to average assets ratio
|
6.19
|
6.07
|
7.97
|
7.48
|
8.47
|
7.66
|
|||||||||
Capital Ratios-Bank (%):
|
|||||||||||||||
Total equity to total assets
|
10.19
|
10.04
|
9.83
|
10.77
|
10.30
|
10.22
|
|||||||||
Total capital to risk-weighted assets ratio
|
14.30
|
13.37
|
12.98
|
13.15
|
12.67
|
12.22
|
|||||||||
Tier 1 capital to risk weighted assets ratio
|
13.04
|
12.11
|
11.72
|
11.88
|
11.39
|
10.97
|
|||||||||
Tier 1 capital to average assets ratio
|
10.57
|
10.08
|
9.61
|
9.41
|
9.16
|
10.00
|
|||||||||
Average equity to average assets ratio
|
10.39
|
9.91
|
11.16
|
10.01
|
10.42
|
10.74
|
|
(1)
|
Net interest income, on a full tax-equivalent basis, divided by average-earning assets.
|
|
(2)
|
Non-interest expense less non-interest income divided by average total assets
|
|
(3)
|
Non-interest expense divided by the sum of net interest income plus non-interest income.
|
|
(4)
|
Net income (loss) divided by average total assets
|
|
(5)
|
Net loss available to common shareholders divided by average common equity
|
|
(6)
|
The sum of non-performing assets and loans plus past due loans > 90 days divided by tangible capital equity plus the allowance for loan losses
|
2013
|
2012
|
2011
|
Fiscal Quarter | High | Low | High | Low | High | Low | |
First
|
$ 9.50
|
$ 4.50
|
$ 4.50
|
$ 4.00
|
$ 8.00
|
$ 6.50
|
|
Second
|
7.90
|
7.25
|
4.50
|
3.55
|
8.00
|
5.50
|
|
Third
|
NA
|
NA
|
4.50
|
3.55
|
8.00
|
4.80
|
|
Fourth
|
NA
|
NA
|
4.50
|
4.00
|
6.00
|
4.10
|
•
|
amend or alter the Company’s Articles of Incorporation or the Certificate of Designations for the Fixed Rate Cumulative Preferred Stock to authorize or create or increase the authorized amount of, or any issuance of, any shares of, or any securities convertible into or exchangeable or exercisable for shares of, any class or series of the Company’s capital stock ranking senior to the Fixed Rate Cumulative Preferred Stock with respect to either or both the payment of dividends and/or the distribution of assets on any liquidation, dissolution or winding up of the Company; or
|
•
|
amend, alter or repeal any provision of the Company’s Articles of Incorporation or the Certificate of Designations for the Fixed Rate Cumulative Preferred Stock in a manner that adversely affects the rights, preferences, privileges or voting powers of the Fixed Rate Cumulative Preferred Stock; or
|
•
|
consummate a binding share exchange or reclassification involving the Fixed Rate Cumulative Preferred Stock or a merger or consolidation of the Company with another entity, unless (i) the Fixed Rate Cumulative Preferred Stock remains outstanding or, in the case of a merger or consolidation in which the Company is not the surviving or resulting entity, are converted into or exchanged for preference securities of the surviving or resulting entity or its ultimate parent, and (ii) the Fixed Rate Cumulative Preferred Stock remaining outstanding or such preference securities, have such rights, preferences, privileges, voting powers, limitations and restrictions, taken as a whole, as are not materially less favorable than the rights, preferences, privileges, voting powers, limitations and restrictions of the Fixed Rate Cumulative Preferred Stock immediately prior to consummation of the transaction, taken as a whole;
|
|
·
|
management’s judgment with respect to current economic conditions and their impact on the existing loan portfolio.
|
Average Balances, Yields and Rates
|
|||||||||||||
Six Months Ended June 30,
|
|||||||||||||
2013
|
2012
|
||||||||||||
Average Balance
|
Interest
|
Avg. Yield/Rate
|
Average Balance
|
Interest
|
Avg. Yield/Rate
|
||||||||
(In thousands)
|
|||||||||||||
Assets
|
|||||||||||||
Federal funds sold and other short-term investments
|
$ 63,657
|
$ 79
|
0.25%
|
$ 80,090
|
$ 97
|
0.24%
|
|||||||
Available-for-sale securities – taxable
|
67,676
|
523
|
1.56%
|
58,557
|
484
|
1.66%
|
|||||||
Available-for-sale securities – nontaxable | 14,029 | 301 | 4.33% | 885 | 18 | 4.19% | |||||||
Mortgage loans held for sale
|
6,585
|
79
|
3,23%
|
2,676
|
50
|
3.74%
|
|||||||
Loans, net of unearned discount and fees
|
414,181
|
10,406
|
5.07%
|
438,176
|
11,523
|
5.29%
|
|||||||
Federal Home Loan and Federal Reserve Bank Stock
|
4,912
|
124
|
3.79%
|
6,453
|
117
|
3.64%
|
|||||||
Total earning assets
|
571,040
|
11,512
|
4.07%
|
586,837
|
12,289
|
4.21%
|
|||||||
Cash and due from banks – non-interest bearing
|
17,351
|
27,351
|
|||||||||||
Allowance for possible loan losses
|
(9,089)
|
(11,668)
|
|||||||||||
Premises and equipment, net
|
15,520
|
15,880
|
|||||||||||
Other assets
|
39,766
|
37,870
|
|||||||||||
Total assets
|
634,588
|
656,270
|
|||||||||||
Liabilities and Stockholders’ Equity
|
|||||||||||||
Deposits-interest bearing:
|
|||||||||||||
Interest-bearing demand accounts
|
$122,026
|
$ 160
|
0.26%
|
$131,143
|
$ 465
|
0.71%
|
|||||||
Savings and money market deposits
|
107,813
|
138
|
0.26%
|
91,620
|
154
|
0.34%
|
|||||||
Time deposits
|
126,694
|
902
|
1.44%
|
169,687
|
1,355
|
1.61%
|
|||||||
Total interest-bearing deposits
|
356,533
|
1,200
|
0.68%
|
392,450
|
1,974
|
1.01%
|
|||||||
Other interest-bearing liabilities
|
29,463
|
12
|
0.08%
|
16,461
|
20
|
0.25%
|
|||||||
Long-term debt
|
100,721
|
1,826
|
3.66%
|
100,043
|
1,825
|
3.67%
|
|||||||
Total interest-bearing liabilities
|
486,717
|
3,038
|
1.26%
|
508,954
|
3,819
|
1.51%
|
|||||||
Non-interest bearing deposits
|
97,692
|
98,593
|
|||||||||||
Other liabilities
|
10,920
|
8,870
|
|||||||||||
Stockholders’ equity
|
39,259
|
39,853
|
|||||||||||
Total liabilities and stockholders’ equity
|
634,588
|
656,270
|
|||||||||||
FTE Net interest income/spread
|
8,474
|
2.81%
|
8,470
|
2.70%
|
|||||||||
FTE Net interest margin
|
2.99%
|
2.90%
|
|||||||||||
Year Ended December 31,
|
|||||||||||||
2012
|
2011
|
||||||||||||
Average Balance
|
Interest
|
Avg. Yield/Rate
|
Average Balance
|
Interest
|
Avg. Yield/Rate
|
||||||||
(in thousands)
|
(in thousands)
|
||||||||||||
Assets
|
|||||||||||||
Federal funds sold and other short-term investments
|
$ 83,186
|
$ 193
|
0.23%
|
$ 63,635
|
$ 151
|
0.24%
|
|||||||
Available-for-sale securities – taxable
|
61,710
|
958
|
1.55%
|
66,913
|
1202
|
1.80%
|
|||||||
Available-for-sale securities – non taxable
|
5,084
|
197
|
3.88%
|
-
|
-
|
||||||||
Mortgage loans held for sale
|
4,107
|
143
|
3.47%
|
3,820
|
152
|
3.98%
|
|||||||
Loans, net of unearned discount and fees
|
430,008
|
22,710
|
5.28%
|
465,053
|
25,125
|
5.40%
|
|||||||
Federal Home Loan and Federal Reserve Bank Stock
|
6,473
|
240
|
3.71%
|
6,377
|
225
|
3.53%
|
|||||||
Total earning assets
|
590,568
|
24,441
|
4.14%
|
605,798
|
26,855
|
4.43%
|
|||||||
Cash and due from banks – non-interest bearing
|
17,366
|
33,724
|
|||||||||||
Allowance for loan losses
|
(10,544)
|
(13,708)
|
|||||||||||
Premises and equipment, net
|
15,742
|
16,048
|
|||||||||||
Other assets
|
39,832
|
41,104
|
|||||||||||
Total assets
|
652,964
|
682,966
|
|||||||||||
Liabilities and Stockholders’ Equity
|
|||||||||||||
Deposits-interest bearing:
|
|||||||||||||
Interest-bearing demand accounts
|
$ 126,500
|
$ 700
|
0.55%
|
$ 133,531
|
$ 1,611
|
1.21%
|
|||||||
Savings and money market deposits
|
96,176
|
291
|
0.30%
|
82,462
|
346
|
0.42%
|
|||||||
Time deposits
|
156,739
|
2,487
|
1.59%
|
188,906
|
3,755
|
1.99%
|
|||||||
Total interest-bearing deposits
|
379,415
|
3,478
|
0.92%
|
404,899
|
5,712
|
1.41%
|
|||||||
Other interest-bearing liabilities
|
18,674
|
44
|
0.23%
|
17,045
|
41
|
0.24%
|
|||||||
Long-term debt
|
100,213
|
3,670
|
3.66%
|
99,537
|
3,502
|
3.52%
|
|||||||
Total interest-bearing liabilities
|
498,302
|
7,192
|
1.44%
|
521,481
|
9,255
|
1.77%
|
|||||||
Non-interest bearing deposits
|
105,226
|
98,927
|
|||||||||||
Other liabilities
|
9,779
|
8,151
|
|||||||||||
Stockholders’ equity
|
39,657
|
54,407
|
|||||||||||
Total liabilities and stockholders’ equity
|
652,964
|
682,966
|
|||||||||||
FTE Net interest income/spread
|
$ 17,249
|
2.70%
|
$ 17,600
|
2.66%
|
|||||||||
FTE Net interest margin
|
2.92%
|
2.91%
|
|||||||||||
|
·
|
changes in rate, reflecting changes in rate multiplied by the prior period volume; and
|
|
·
|
changes in volume, reflecting changes in volume multiplied by the current period rate.
|
CHANGES IN INTEREST INCOME AND EXPENSE VOLUME AND RATE VARIANCES
|
||||||||||||||||||||||||
Six Months Ended June 30,
|
Year Ended December 31,
|
|||||||||||||||||||||||
2013 Compared to 2012
|
2012 Compared to 2011
|
|||||||||||||||||||||||
(unaudited)
|
||||||||||||||||||||||||
Change Due to Rate
|
Change Due to Volume
|
Total Change
|
Change Due to Rate
|
Change Due to Volume
|
Total Change
|
|||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||
Federal funds sold and other short-term investments
|
$ | 3 | $ | (21 | ) | $ | (18 | ) | $ | (3 | ) | $ | 45 | $ | 42 | |||||||||
Available-for-sale securities – taxable
|
(30 | ) | 69 | 39 | (163 | ) | (81 | ) | (244 | ) | ||||||||||||||
Available-for-sale securities – non taxable
|
1 | 282 | 283 | - | 197 | 197 | ||||||||||||||||||
Mortgage loans held for sale
|
(7 | ) | 36 | 29 | (19 | ) | 10 | (9 | ) | |||||||||||||||
Loans, net of unearned discount and fees
|
(496 | ) | (621 | ) | (1,117 | ) | (564 | ) | (1,851 | ) | (2,415 | ) | ||||||||||||
Federal Home Loan and Federal Reserve Bank Stock
|
4 | 3 | 7 | 11 | 4 | 15 | ||||||||||||||||||
Total interest income
|
(525 | ) | (252 | ) | (777 | ) | (738 | ) | (1,676 | ) | (2,414 | ) | ||||||||||||
Interest-bearing demand accounts
|
(293 | ) | (12 | ) | (305 | ) | (873 | ) | (38 | ) | (911 | ) | ||||||||||||
Savings and money market deposits
|
(37 | ) | 21 | (16 | ) | (97 | ) | 42 | (55 | ) | ||||||||||||||
Time deposits
|
(144 | ) | (309 | ) | (453 | ) | (754 | ) | (514 | ) | (1,268 | ) | ||||||||||||
Other interest-bearing liabilities
|
(13 | ) | 5 | (8 | ) | (1 | ) | 4 | 3 | |||||||||||||||
Long-term debt
|
(8 | ) | 9 | 1 | 143 | 25 | 168 | |||||||||||||||||
Total interest expense
|
(495 | ) | (286 | ) | (781 | ) | (1,582 | ) | (481 | ) | (2,063 | ) | ||||||||||||
Net interest income
|
$ | (30 | ) | $ | 34 | $ | 4 | $ | 844 | $ | (1,195 | ) | $ | (351 | ) | |||||||||
NON-INTEREST INCOME
|
||||||||||||||||||||
Six months ended June 30,
|
Year ended December 31,
|
|||||||||||||||||||
2013
|
2012
|
2012
|
2011
|
2010
|
||||||||||||||||
(In thousands)
|
||||||||||||||||||||
Loans held for sale fee income
|
$ | 770 | $ | 931 | $ | 2,447 | $ | 2,120 | $ | 3,506 | ||||||||||
NSF charges and service fees
|
169 | 198 | 980 | 944 | 1,062 | |||||||||||||||
Other service charges
|
1,527 | 1,554 | 2,472 | 2,276 | 2,021 | |||||||||||||||
Realized gains on available-for-sale securities
|
127 | - | - | - | 885 | |||||||||||||||
Other income
|
901 | 605 | 1,535 | 984 | 1,145 | |||||||||||||||
Total non-interest income
|
$ | 3,494 | $ | 3,288 | $ | 7,434 | $ | 6,324 | $ | 8,619 | ||||||||||
NON-INTEREST EXPENSE
|
||||||||||||||||||||
Six months ended June 30,
|
Year ended December 31,
|
|||||||||||||||||||
2013
|
2012
|
2012
|
2011
|
2010
|
||||||||||||||||
(In thousands)
|
||||||||||||||||||||
Salaries and employee benefits
|
$ | 5,322 | $ | 5,105 | $ | 10,587 | $ | 10,955 | $ | 11,753 | ||||||||||
Net occupancy expense
|
1,309 | 1,265 | 2,568 | 2,599 | 2,756 | |||||||||||||||
Foreclosed assets expense
|
2,198 | 1,372 | 2,647 | 5,219 | 2,708 | |||||||||||||||
Other operating expense
|
3,114 | 3,854 | 7,506 | 7,851 | 8,550 | |||||||||||||||
Total non-interest expenses
|
$ | 11,943 | $ | 11,596 | $ | 23,308 | $ | 26,624 | $ | 25,767 | ||||||||||
INVESTMENT SECURITIES PORTFOLIO COMPOSITION
|
||||||||||||
At June 30,
|
At December 31,
|
|||||||||||
2013
|
2012
|
2011
|
||||||||||
(In thousands)
|
||||||||||||
U.S. government sponsored agency securities…...
|
$ | 61,133 | $ | 63,148 | $ | 61,171 | ||||||
Municipal securities………………………………………………….
|
15,946 | 14,074 | - | |||||||||
Mortgage backed securities…………………………………………….
|
5,015 | - | - | |||||||||
SBA pool securities……………………………………….
|
5,175 | - | - | |||||||||
Equity and other securities………………………………………...
|
599 | 623 | 619 | |||||||||
Total……………………………………………...
|
$ | 87,868 | $ | 77,845 | $ | 61,790 | ||||||
MATURITY OF INVESTMENTS IN AVAILABLE-FOR-SALE SECURITIES
|
||||||||||||||||||||||||||||||||||
One Year or Less
|
One to Five Years
|
Five to Ten Years
|
More Than
Ten Years
|
Total Investment
Securities
|
||||||||||||||||||||||||||||||
Carrying
|
Average
|
Carrying
|
Average
|
Carrying
|
Average
|
Carrying
|
Average
|
Carrying
|
Average
|
|||||||||||||||||||||||||
Value
|
Yield
|
Value
|
Yield
|
Value
|
Yield
|
Value
|
Yield
|
Value
|
Yield
|
|||||||||||||||||||||||||
(In thousands)
|
|
|||||||||||||||||||||||||||||||||
Available-For-Sale
|
||||||||||||||||||||||||||||||||||
U.S. government sponsored agency
|
$ | - | $ | - | $ | - | $ | 61,133 | 1.59 | % | $ | 61,133 | 1.59 | % | ||||||||||||||||||||
Municipal securities
|
- | - | 388 | 2.22 | % | 15,558 | 3.36 | % | 15,946 | 3.33 | % | |||||||||||||||||||||||
Mortgage backed securities
|
- | - | 5,015 | 1.92 | % | - | 5,015 | 1.92 | % | |||||||||||||||||||||||||
SBA pool securities
|
- | - | - | 5,175 | 2.27 | % | 5,175 | 2.27 | % | |||||||||||||||||||||||||
Equity and other securities with no defined maturity
|
599 |
2.04%
|
- | - | - | 599 | 2.04 | % | ||||||||||||||||||||||||||
Total available-for-sale
|
$ | 599 | $ | - | $ | 5,403 | 1.94 | % | $ | 81,866 | 1.97 | % | $ | 87,868 | 2.06 | % |
As of December 31,
|
||||||||||||||||||||||||||||||||||||||||||||||||
June 30, 2013
|
2012
|
2011
|
2010
|
2009
|
2008
|
|||||||||||||||||||||||||||||||||||||||||||
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
|||||||||||||||||||||||||||||||||||||
(in thousands)
|
(unaudited)
|
|||||||||||||||||||||||||||||||||||||||||||||||
Commercial
|
$ | 119,435 | 29.27 | % | $ | 115,520 | 27.79 | % | $ | 130,398 | 29.71 | % | $ | 144,181 | 29.28 | % | $ | 142,528 | 25.72 | % | $ | 172,647 | 26.06 | % | ||||||||||||||||||||||||
Commercial real estate
|
133,304 | 32.67 | 143,198 | 34.45 | 154,109 | 35.12 | 169,253 | 34.37 | 167,581 | 30.24 | 170,697 | 25.77 | ||||||||||||||||||||||||||||||||||||
Construction
|
47,082 | 11.54 | 46,515 | 11.19 | 48,438 | 11.04 | 64,641 | 13.13 | 113,077 | 20.41 | 182,933 | 27.62 | ||||||||||||||||||||||||||||||||||||
Home equity
|
45,412 | 11.13 | 49,529 | 11.92 | 59,750 | 13.61 | 64,289 | 13.05 | 66,586 | 12.02 | 59,257 | 8.94 | ||||||||||||||||||||||||||||||||||||
Residential real estate
|
46,616 | 11.42 | 43,584 | 10.49 | 37,882 | 8.63 | 36,903 | 7.49 | 45,014 | 8.12 | 43,695 | 6.60 | ||||||||||||||||||||||||||||||||||||
Lease financing
|
9,512 | 2.33 | 10,054 | 2.42 | 2,268 | 0.52 | 5,530 | 1.12 | 11,259 | 2.03 | 18,927 | 2.86 | ||||||||||||||||||||||||||||||||||||
Consumer
|
6,704 | 1.64 | 7,271 | 1.74 | 5,998 | 1.37 | 7,657 | 1.56 | 8,066 | 1.46 | 14,245 | 2.15 | ||||||||||||||||||||||||||||||||||||
Total loans and leases
|
408,065 | 100.00 | % | 415,671 | 100.00 | % | 438,843 | 100.00 | % | 492,454 | 100.00 | % | 554,111 | 100.00 | % | 662,401 | 100.00 | % | ||||||||||||||||||||||||||||||
Less allowance for loan losses
|
8,655 | 9,057 | 13,189 | 14,731 | 20,000 | 12,368 | ||||||||||||||||||||||||||||||||||||||||||
Loans, net
|
$ | 399,410 | $ | 406,614 | $ | 425,654 | $ | 477,723 | $ | 534,111 | $ | 650,033 | ||||||||||||||||||||||||||||||||||||
MATURITIES AND SENSITIVITIES OF LOANS TO CHANGES IN INTEREST RATES
|
||||||||||||||||||||||||
As of June 30, 2013
|
||||||||||||||||||||||||
More than One Year
|
||||||||||||||||||||||||
Less than
|
One to
|
Over five
|
||||||||||||||||||||||
one year
|
five years
|
years
|
Total
|
Fixed
|
Variable
|
|||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||
Commercial
|
$ | 63,188 | $ | 46,045 | $ | 10,203 | $ | 119,436 | $ | 29,886 | $ | 26,362 | ||||||||||||
Commercial Real Estate
|
54,662 | 58,545 | 20,098 | 133,305 | 55,432 | 23,211 | ||||||||||||||||||
Construction
|
26,460 | 17,163 | 3,459 | 47,082 | 3,938 | 16,683 |
NON-PERFORMING ASSETS
|
||||||||||||||||||||||||
As of June 30, 2013
|
As of December 31,
|
|||||||||||||||||||||||
2012
|
2011
|
2010
|
2009
|
2008
|
||||||||||||||||||||
(In thousands)
|
(unaudited)
|
|||||||||||||||||||||||
Commercial and all other loans:
|
||||||||||||||||||||||||
Past due 90 days or more
|
$ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||
Non-accrual
|
890 | 1,131 | 2,029 | 2,896 | 1,327 | 2,143 | ||||||||||||||||||
Commercial real estate loans:
|
||||||||||||||||||||||||
Past due 90 days or more
|
- | - | - | - | - | - | ||||||||||||||||||
Non-accrual
|
1,511 | 1,537 | 1,340 | 10,088 | 13,267 | 1,951 | ||||||||||||||||||
Construction loans:
|
||||||||||||||||||||||||
Past due 90 days or more
|
- | - | - | - | - | - | ||||||||||||||||||
Non-accrual
|
910 | 910 | 3,058 | 10,417 | 11,205 | 32,110 | ||||||||||||||||||
Home equity loans:
|
||||||||||||||||||||||||
Past due 90 days or more
|
- | - | - | - | - | - | ||||||||||||||||||
Non-accrual
|
171 | 1,084 | 2,676 | 1,211 | 344 | 488 | ||||||||||||||||||
Residential real estate loans:
|
||||||||||||||||||||||||
Past due 90 days or more
|
- | - | - | - | - | - | ||||||||||||||||||
Non-accrual
|
1,942 | 175 | 2,204 | 5,553 | 8,404 | 6,129 | ||||||||||||||||||
Lease financing:
|
||||||||||||||||||||||||
Past due 90 days or more
|
- | - | - | - | - | - | ||||||||||||||||||
Non-accrual
|
- | - | 18 | 140 | 335 | 475 | ||||||||||||||||||
Consumer loans:
|
||||||||||||||||||||||||
Past due 90 days or more
|
- | - | - | - | - | - | ||||||||||||||||||
Non-accrual
|
- | - | - | 52 | 6 | 36 | ||||||||||||||||||
Debt securities and other assets (excluding other real estate owned and other repossessed assets):
|
||||||||||||||||||||||||
Past due 90 days or more
|
- | - | - | - | - | - | ||||||||||||||||||
Non-accrual
|
- | - | - | - | - | - | ||||||||||||||||||
Total non-performing loans
|
5,424 | 4,837 | 11,325 | 30,357 | 34,888 | 43,332 | ||||||||||||||||||
Foreclosed assets held for sale
|
27,993 | 31,936 | 29,246 | 20,144 | 19,434 | 4,783 | ||||||||||||||||||
Total non-performing assets
|
33,417 | 36,773 | 40,571 | 50,501 | 54,322 | 48,115 | ||||||||||||||||||
Total non-performing loans to total loans
|
1.33 | % | 1.16 | % | 2.58 | % | 6.16 | % | 6.30 | % | 6.54 | % | ||||||||||||
Total non-performing loans to total assets
|
0.85 | % | 0.74 | % | 1.73 | % | 4.20 | % | 4.51 | % | 5.31 | % | ||||||||||||
Allowance for loan losses to non-performing loans
|
159.54 | % | 187.22 | % | 116.46 | % | 48.53 | % | 57.33 | % | 28.54 | % | ||||||||||||
Non-performing assets to loans and foreclosed assets held for sale
|
7.82 | % | 8.22 | % | 8.67 | % | 9.85 | % | 9.47 | % | 7.21 | % |
Six Months Ended
June 30, 2013
|
Year Ended
December 31, 2012
|
|||||||
(In thousands)
|
||||||||
Gross interest income (since date of non-accrual) if the loans had been current and accruing interest………………………..…………………………………………..
|
$ | 447 | $ | 510 | ||||
Interest income reversed at time loan placed on non-accrual……………………..
|
14 | 159 | ||||||
Cash interest received during the period……………………...……………………
|
22 | 199 |
As of and for the Year Ended December 31,
|
||||||||||||||||||||||||
June 30, 2013
|
2012
|
2011
|
2010
|
2009
|
2008
|
|||||||||||||||||||
(In thousands)
|
(unaudited)
|
|||||||||||||||||||||||
Balance at beginning of period……………..
|
$ | 9,057 | $ | 13,189 | $ | 14,731 | $ | 20,000 | $ | 12,368 | $ | 8,982 | ||||||||||||
Loans charged-off:
|
||||||||||||||||||||||||
Commercial loans……………........…...
|
44 | 2,030 | 582 | 1,364 | 4,713 | 6,603 | ||||||||||||||||||
Commercial real estate loans…….………
|
- | 2,239 | 1,218 | 2,985 | 374 | 262 | ||||||||||||||||||
Construction loans………………...……..
|
- | 882 | 2,352 | 3,662 | 7,716 | 6,022 | ||||||||||||||||||
Home equity loans…………..…………..
|
- | 417 | 725 | 387 | 653 | 127 | ||||||||||||||||||
Residential real estate loans…………......
|
68 | 540 | 637 | 660 | 1,480 | 424 | ||||||||||||||||||
Lease financing………….....…………....
|
- | 9 | - | 43 | 109 | 372 | ||||||||||||||||||
Consumer loans…………………….……
|
- | - | - | 7 | 58 | 112 | ||||||||||||||||||
Total loans charged-off
|
112 | 6,117 | 5,514 | 9,108 | 15,103 | 13,922 | ||||||||||||||||||
Recoveries:
|
||||||||||||||||||||||||
Commercial loans…………………...…...
|
59 | 179 | 282 | 390 | 259 | 223 | ||||||||||||||||||
Commercial real estate loans…...……….
|
12 | 20 | 91 | 171 | 123 | - | ||||||||||||||||||
Construction loans……………………….
|
86 | 481 | 60 | 123 | 592 | 24 | ||||||||||||||||||
Home equity loans……………………….
|
21 | 58 | 48 | 17 | 31 | - | ||||||||||||||||||
Residential real estate loans……….…….
|
30 | 43 | 157 | 11 | 72 | 1 | ||||||||||||||||||
Lease financing………….………………
|
- | - | 25 | 14 | 21 | 29 | ||||||||||||||||||
Consumer loans………………………….
|
2 | 4 | 9 | 18 | 2 | 6 | ||||||||||||||||||
Total recoveries…………………..………….
|
210 | 785 | 672 | 744 | 1,100 | 283 | ||||||||||||||||||
Net loans charged-off…………………..........
|
(98 | ) | 5,332 | 4,842 | 8,364 | 14,003 | 13,639 | |||||||||||||||||
Provision for loan losses……………………..
|
(500 | ) | 1,200 | 3,300 | 3,095 | 21,635 | 17,025 | |||||||||||||||||
Balance at end of period……………………..
|
$ | 8,655 | $ | 9,057 | $ | 13,189 | $ | 14,731 | $ | 20,000 | $ | 12,368 | ||||||||||||
Loans outstanding:
|
||||||||||||||||||||||||
Average………………………………….
|
$ | 414,181 | $ | 430,008 | $ | 465,053 | $ | 518,010 | $ | 608,080 | $ | 631,673 | ||||||||||||
End of period…………………………….
|
408,065 | 415,671 | 438,843 | 492,454 | 554,111 | 662,401 | ||||||||||||||||||
Ratio of allowance for loan losses to loans outstanding:
|
||||||||||||||||||||||||
Average………………………………….
|
2.09 | % | 2.11 | % | 2.84 | % | 2.84 | % | 3.29 | % | 1.96 | % | ||||||||||||
End of period…………………………….
|
2.12 | % | 2.18 | % | 3.01 | % | 2.99 | % | 3.61 | % | 1.87 | % | ||||||||||||
Ratio of net charge-offs to:
|
||||||||||||||||||||||||
Average………………………………….
|
-0.02 | % | 1.24 | % | 1.04 | % | 1.61 | % | 2.30 | % | 2.16 | % | ||||||||||||
End of period…………………………….
|
-0.02 | % | 1.28 | % | 1.10 | % | 1.70 | % | 2.53 | % | 2.06 | % |
As of June 30,
|
As of December 31,
|
||||||||||||||||||||||||||||||||||||||||||||||||||||
2013
|
2012
|
2011
|
2010
|
2009
|
2008
|
||||||||||||||||||||||||||||||||||||||||||||||||
Amount
|
% of Total Allowance
|
Amount
|
% of Total Allowance
|
Amount
|
% of Total Allowance
|
Amount
|
% of Total Allowance
|
Amount
|
% of Total Allowance
|
Amount
|
% of Total Allowance
|
||||||||||||||||||||||||||||||||||||||||||
(In thousands)
|
(unaudited)
|
||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial
|
$1,555
|
17.97
|
%
|
$2,097
|
23.15
|
%
|
$2,987
|
22.65
|
%
|
$3,339
|
22.67
|
%
|
$3,630
|
18.15
|
%
|
$3,040
|
24.58
|
%
|
|||||||||||||||||||||||||||||||||||
Commercial real estate
|
2,527
|
29.20
|
3,582
|
39.55
|
3,772
|
28.60
|
3,974
|
26.98
|
7,253
|
36.27
|
2,507
|
20.27
|
|||||||||||||||||||||||||||||||||||||||||
Construction
|
2,692
|
31.10
|
1,543
|
17.04
|
2,721
|
20.63
|
4,579
|
31.08
|
5,929
|
29.65
|
4,695
|
37.96
|
|||||||||||||||||||||||||||||||||||||||||
Home equity
|
730
|
8.43
|
634
|
7.00
|
1,338
|
10.14
|
1,262
|
8.57
|
1,061
|
5.31
|
409
|
3.31
|
|||||||||||||||||||||||||||||||||||||||||
Residential real estate
|
1,111
|
12.84
|
1,138
|
12.56
|
2,312
|
17.53
|
1,488
|
10.10
|
1,737
|
8.69
|
1,201
|
9.71
|
|||||||||||||||||||||||||||||||||||||||||
Lease financing
|
21
|
0.24
|
46
|
0.51
|
30
|
0.23
|
38
|
0.26
|
238
|
1.19
|
449
|
3.63
|
|||||||||||||||||||||||||||||||||||||||||
Consumer
|
19
|
0.22
|
17
|
0.19
|
29
|
0.22
|
51
|
0.35
|
152
|
0.76
|
67
|
0.54
|
|||||||||||||||||||||||||||||||||||||||||
Total
|
$8,655
|
100.00
|
%
|
$9,057
|
100.00
|
%
|
$13,189
|
100.00
|
%
|
$14,731
|
100.00
|
%
|
$20,000
|
100.00
|
%
|
$12,368
|
100.00
|
%
|
DEPOSITS
|
||||||||||||||||||||||||||||||||||||||||||||||
June 30,
|
December 31,
|
|||||||||||||||||||||||||||||||||||||||||||||
2013
|
2012
|
2011
|
||||||||||||||||||||||||||||||||||||||||||||
(unaudited)
|
||||||||||||||||||||||||||||||||||||||||||||||
Balance
|
Percent of Deposits
|
Weighted Average Rate
|
Balance
|
Percent of Deposits
|
Weighted Average Rate
|
Balance
|
Percent of Deposits
|
|||||||||||||||||||||||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||||||||||||||||||||||||
Demand
|
$ | 101,931 | 22.54 | % | 0.00 | % | $ | 113,698 | 23.47 | % | 0.00 | % | $ | 100,842 | 20.56 | % | 0.00 | % | $ | 100,975 | ||||||||||||||||||||||||||
Savings
|
16,445 | 3.64 | 0.05 | % | 16,243 | 3.35 | 0.12 | % | 13,814 | 2.82 | 0.19 | % | 11,040 | |||||||||||||||||||||||||||||||||
Interest-bearing demand
|
118,648 | 26.24 | 0.13 | % | 127,597 | 26.34 | 0.55 | % | 133,702 | 27.26 | 1.21 | % | 140,697 | |||||||||||||||||||||||||||||||||
Money Market
|
92,748 | 20.51 | 0.14 | % | 91,792 | 18.95 | 0.34 | % | 75,468 | 15.39 | 0.46 | % | 66,670 | |||||||||||||||||||||||||||||||||
Time Deposits
|
122,397 | 27.07 | 0.71 | % | 135,136 | 27.89 | 1.59 | % | 166,587 | 33.97 | 1.99 | % | 221,836 | |||||||||||||||||||||||||||||||||
Total deposits | $ | 452,169 | 100.00 | % | $ | 484,466 | 100.00 | % | $ | 490,413 | 100 | % | $ | 541,218 |
AMOUNTS AND MATURITIES OF TIME DEPOSITS OF $100,000 OR MORE
|
|||||||||
As of June 30, 2013
|
|
||||||||
Amount
|
Weighted Average Rate
|
||||||||
(In thousands)
|
|||||||||
Three months or less………………………….…………..
|
$ | 22,102 | 0.66 | % | |||||
Over three months through six months………………..…………………………………...
|
3,266 | 1.35 | % | ||||||
Over six months through twelve months…………………
|
9,836 | 0.70 | % | ||||||
Over twelve months……………………………...……………………..
|
22,789 | 1.63 | % | ||||||
Total………………………………………………......
|
$ | 57,994 | 1.09 | % |
SHORT-TERM DEBT
|
||||||||||||||||||||
Amount outstanding at period end
|
Average amount outstanding during the period (1)
|
Maximum Outstanding At any Month End
|
Weighted average interest rate during the period
|
Weighted Average interest rate at period end
|
||||||||||||||||
(in thousands)
|
||||||||||||||||||||
At or for the six months ended June 30, 2013 (unaudited):
|
||||||||||||||||||||
Federal Home Loan Bank borrowings…………………………………………..
|
$ | - | $ | 1 | $ | - | 0.25 | % | ||||||||||||
Federal Funds purchased…………………………………………….
|
- | - | - | 0.56 | % | |||||||||||||||
Federal Reserve Bank line of credit…………………………………....
|
- | - | - | |||||||||||||||||
Repurchase agreements and other interest bearing liabilities…..
|
34,631 | 29,462 | 34,631 | 0.08 | % | 0.08 | % | |||||||||||||
Total……………………………………………………………...
|
$ | 34,631 | $ | 29,463 | 0.08 | % | 0.08 | % | ||||||||||||
At or for the year ended December 31, 2012:
|
||||||||||||||||||||
Federal Home Loan Bank borrowings…………………………………………..
|
$ | - | $ | 3 | $ | - | 0.23 | % | ||||||||||||
Federal Funds purchased…………………………………………….
|
- | 3 | - | 1.05 | % | |||||||||||||||
Federal Reserve Bank line of credit…………………………………....
|
- | - | - | |||||||||||||||||
Repurchase agreements and other interest bearing liabilities…..
|
21,668 | 18,668 | 22,071 | 0.23 | % | 0.23 | % | |||||||||||||
Total……………………………………………………………...
|
$ | 21,668 | $ | 18,674 | 0.23 | % | 0.23 | % | ||||||||||||
At or for the year ended December 31, 2011:
|
||||||||||||||||||||
Federal Home Loan Bank borrowings…………………………………………..
|
$ | - | $ | 2 | $ | - | 0.24 | % | ||||||||||||
Federal Funds purchased…………………………………………….
|
- | 2 | - | 1.14 | % | |||||||||||||||
Federal Reserve Bank line of credit…………………………………....
|
- | - | - | |||||||||||||||||
Repurchase agreements and other interest bearing liabilities…..
|
15,372 | 17,041 | 20,111 | 0.24 | % | 0.24 | % | |||||||||||||
Total……………………………………………………………...
|
$ | 15,372 | $ | 17,045 | 0.24 | % | 0.24 | % | ||||||||||||
At or for the year ended December 31, 2009:
|
||||||||||||||||||||
Federal Home Loan Bank borrowings…………………………………………..
|
$ | - | $ | 3 | $ | - | 0.26 | % | ||||||||||||
Federal Funds purchased…………………………………………….
|
- | 2 | - | 0.98 | % | |||||||||||||||
Federal Reserve Bank line of credit…………………………………....
|
- | - | - | |||||||||||||||||
Repurchase agreements and other interest bearing liabilities…..
|
18,748 | 18,472 | 22,071 | 0.24 | % | 0.24 | % | |||||||||||||
Total……………………………………………………………...
|
$ | 18,748 | $ | 18,472 | 0.24 | % | 0.24 | % | ||||||||||||
(1) Calculations are based on daily averages where available and monthly averages otherwise.
|
RISK-BASED CAPITAL
|
|||||||||||||||||||
June 30,
|
December 31,
|
||||||||||||||||||
2013
|
2012
|
2011
|
2010
|
|
|||||||||||||||
(in thousands)
|
(unaudited)
|
||||||||||||||||||
Tier 1 capital Stockholders’ equity
|
$ | 37,594 | $ | 39,815 | $ | 40,455 | $ | 57,164 | |||||||||||
Intangible assets
|
(107 | ) | (179 | ) | (321 | ) | (464 | ) | |||||||||||
Unrealized (appreciation) depreciation on available-for-sale securities and derivative instruments
|
2,080 | (43 | ) | (123 | ) | (30 | ) | ||||||||||||
Disallowed deferred tax asset
|
- | - | - | (9,684 | ) | ||||||||||||||
Trust preferred securities (1)
|
13,224 | 13,257 | 13,444 | 19,000 | |||||||||||||||
Total Tier 1 capital
|
52,791 | 52,850 | 53,455 | 65,986 | |||||||||||||||
Tier 2 capital
|
|||||||||||||||||||
Qualifying allowance for loan losses
|
6,897 | 6,816 | 6,897 | 7,334 | |||||||||||||||
Trust preferred securities (1)
|
5,776 | 5,743 | 5,556 | - | |||||||||||||||
Qualifying unrealized gains on available-for-sale equity securities
|
- | 9 | 9 | - | |||||||||||||||
Total Tier 2 capital
|
12,673 | 12,649 | 12,462 | 7,334 | |||||||||||||||
Total risk-based capital
|
$ | 65,464 | $ | 65,499 | $ | 65,917 | $ | 73,320 | |||||||||||
Risk weighted assets
|
$ | 512,831 | $ | 544,847 | $ | 545,494 | $ | 579,334 | |||||||||||
Ratios at end of period
|
|||||||||||||||||||
Total capital to risk-weighted assets ratio
|
12.77 | % | 12.01 | % | 12.08 | % | 12.66 | % | |||||||||||
Tier 1 capital to risk-weighted assets ratio
|
10.29 | % | 9.70 | % | 9.80 | % | 11.39 | % | |||||||||||
Tier 1 capital to average assets ratio (leverage ratio)
|
8.36 | % | 8.10 | % | 8.04 | % | 9.04 | % | |||||||||||
Minimum guidelines
|
|||||||||||||||||||
Total capital to risk-weighted assets ratio
|
8.00 | % | 8.00 | % | 8.00 | % | 8.00 | % | |||||||||||
Tier 1 capital to risk-weighted assets ratio
|
4.00 | % | 4.00 | % | 4.00 | % | 4.00 | % | |||||||||||
Tier 1 capital to average assets ratio (leverage ratio)
|
4.00 | % | 4.00 | % | 4.00 | % | 4.00 | % | |||||||||||
(1) Federal Reserve guidelines for calculation of Tier 1 capital limits the amount of cumulative trust preferred securities which can be included in Tier 1 capital to 25% of total Tier 1 capital (Tier 1 capital before reduction of intangibles). Only $13.2 million, $13.3 million and $13.4 million of the trust preferred securities balance of $19.0 million was included in Tier 1 capital as of June 30, 2013, December 31, 2012 and December 31, 2011. All of the trust preferred securities balance of $19.0 million were included as Tier 1 capital as of December 31, 2010.
|
|||||||||||||||||||
|
•
|
The Fixed Rate Cumulative Preferred Stock has a senior rank. The Company is not free to issue other preferred stock that is senior to the Fixed Rate Cumulative Preferred Stock.
|
|
•
|
If the Company were to pay a cash dividend in the future, any such dividend would have to be discontinued if a dividend were missed on the Fixed Rate Cumulative Preferred Stock. Thereafter, dividends on common stock could be resumed only if all preferred share dividends in arrears were paid. Similar restrictions apply to the Company’s ability to repurchase common stock if dividends on the Fixed Rate Cumulative Preferred Stock are missed.
|
|
•
|
Failure to pay dividends on the Fixed Rate Cumulative Preferred Stock is not an event of default. However, a failure to pay a total of six dividends, whether or not consecutive, gives the holders of the Fixed Rate Cumulative Preferred Stock the right to elect two directors to the Company’s Board of Directors. That right continues until the Company pays all dividends in arrears. As of September 1, 2013, the Company has deferred 18 dividend payments on the Fixed Rate Cumulative Preferred Stock.
|
|
•
|
In conformity with requirements of the Securities Purchase Agreement-Standard Terms and Section 111(b) of the Emergency Economic Stabilization Act of 2008, the Company and its subsidiary, Bank of Blue Valley, and each of its senior executive officers agreed to limit certain compensation, bonus, incentive and other benefits plans, arrangements, and policies with respect to the senior executive officers during the period that the Treasury owns any debt or equity securities acquired in connection with the Transaction. The applicable senior executive officers have entered into letter agreements with the Company consenting to the foregoing and have executed a waiver voluntarily waiving any claim against the Treasury or the Company for any changes to such senior executive officer’s compensation or benefits that are required to comply with Section 111(b) of EESA.
|
Payments due by Period
|
||||||||||||||||||||||||
Total
|
Amortization
|
Less than 1 year
|
1-3 years
|
3-5 years
|
More than 5 years
|
|||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||
Time deposit obligations
|
$ | 122,397 | $ | - | $ | 65,191 | $ | 47,115 | $ | 9,166 | $ | 924 | ||||||||||||
Long-term debt obligations
|
102,088 | - | 20,000 | 27,500 | 35,000 | 19,588 | ||||||||||||||||||
Less: Deferred prepayment penalty on modification of Federal Home Loan Bank advances
|
(639 | ) | (639 | ) | - | - | - | - | ||||||||||||||||
Total obligations
|
$ | 223,846 | $ | (639 | ) | $ | 101,516 | $ | 64,510 | $ | 25,265 | $ | 45,933 |
Changes in Interest Rates
|
Net Interest Income
(next 12 months)
|
Net Economic Value of
Equity at Risk
|
||
400 basis point rise
|
35.61%
|
-7.94%
|
||
300 basis point rise
|
25.11%
|
-6.30%
|
||
200 basis point rise
|
13.71%
|
-4.89%
|
||
100 basis point rise
|
4.44%
|
-2.68%
|
||
Base Rate Scenario
|
-
|
-
|
||
100 basis point decline
|
-4.85%
|
0.68%
|
INTEREST-RATE SENSITIVITY ANALYSIS
|
||||||||||||||||||||||||||||
Expected Maturity or Repricing Date | ||||||||||||||||||||||||||||
(unaudited, in thousands) | ||||||||||||||||||||||||||||
0-90 Days
|
91-365 Days
|
1 Year
|
1-2 years
|
2-5 years
|
Thereafter
|
Total
|
||||||||||||||||||||||
Interest-Earning Assets:
|
||||||||||||||||||||||||||||
Fixed Rate Loans
|
$ | 28,625 | $ | 27,016 | $ | 55,641 | $ | 28,678 | $ | 63,396 | $ | 32,005 | $ | 179,720 | ||||||||||||||
Average Interest Rate
|
5.64 | % | 6.23 | % | 5.92 | % | 0.00 | % | 0.00 | % | 4.99 | % | 4.40 | % | ||||||||||||||
Variable Rate Loans
|
207,776 | 8,068 | 215,844 | 16,496 | 1,962 | - | 234,301 | |||||||||||||||||||||
Average Interest Rate
|
4.53 | % | 3.54 | % | 4.50 | % | 5.15 | % | 4.20 | % | 0.00 | % | 4.54 | % | ||||||||||||||
Fixed Rate Investments
|
- | - | - | - | - | 87,269 | 87,269 | |||||||||||||||||||||
Average Interest Rate
|
0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 2.16 | % | 2.16 | % | ||||||||||||||
Variable Rate Investments
|
599 | - | 599 | - | - | - | 599 | |||||||||||||||||||||
Average Interest Rate…
|
2.04 | % | - | 2.04 | % | - | - | - | 2.04 | % | ||||||||||||||||||
Interest Bearing Deposits
|
56,455 | - | 56,455 | - | - | - | 56,455 | |||||||||||||||||||||
Average Interest Rate
|
0.21 | % | - | 0.21 | % | - | - | - | 0.21 | % | ||||||||||||||||||
Federal Funds Sold
|
0 | - | 0 | - | - | - | 0 | |||||||||||||||||||||
Average Interest Rate
|
0.00 | - | 0.00 | - | - | - | 0.00 | |||||||||||||||||||||
Total interest-earning
assets
|
$ | 293,454 | $ | 35,083 | $ | 328,538 | $ | 45,174 | $ | 65,358 | $ | 119,274 | $ | 558,344 | ||||||||||||||
Interest-Bearing Liabilities:
|
||||||||||||||||||||||||||||
Interest-bearing demand
|
$ | 118,623 | $ | - | $ | 118,623 | $ | - | $ | - | $ | - | $ | 118,623 | ||||||||||||||
Average Interest Rate
|
0.40 | % | - | 0.40 | % | - | - | - | 0.40 | % | ||||||||||||||||||
Savings and money market
|
109,218 | - | 109,218 | - | - | - | 109,218 | |||||||||||||||||||||
Average Interest Rate
|
0.26 | % | - | 0.26 | % | - | - | - | 0.26 | % | ||||||||||||||||||
Time Deposits
|
34,605 | 30,586 | 65,191 | 31,218 | 25,064 | 924 | 122,397 | |||||||||||||||||||||
Average Interest Rate
|
0.79 | % | 0.96 | % | 0.87 | % | 1.84 | % | 2.17 | % | 1.69 | % | 1.15 | % | ||||||||||||||
Funds Borrowed
|
109,087 | (235 | ) | 108,853 | 7,261 | 19,967 | - | 136,080 | ||||||||||||||||||||
Average Interest Rate
|
0.00 | % | - | 1.63 | % | 1.53 | % | 2.40 | % | - | 0.72 | % | ||||||||||||||||
Total interest-bearing liab
|
$ | 371,533 | $ | 30,351 | $ | 401,884 | $ | 38,479 | $ | 45,031 | $ | 924 | $ | 486,318 | ||||||||||||||
Cumulative:
|
||||||||||||||||||||||||||||
Rate sensitive assets (RSA)
|
$ | 293,454 | $ | 328,538 | $ | 328,538 | $ | 373,712 | $ | 439,070 | $ | 558,344 | $ | 558,344 | ||||||||||||||
Rate sensitive liabilities (RSL)
|
371,533 | 401,884 | 401,884 | 440,363 | 485,394 | 486,318 | 486,318 | |||||||||||||||||||||
GAP (GAP = RSA – RSL)
|
-78,079 | -73,346 | -73,346 | -66,651 | -46,323 | 72,026 | 72,026 | |||||||||||||||||||||
RSA/RSL
|
78.98 | % | 81.75 | % | 81.75 | % | 84.86 | % | 90.46 | % | 114.81 | % | ||||||||||||||||
RSA/Total assets
|
46.08 | % | 51.59 | % | 51.59 | % | 58.69 | % | 68.95 | % | 87.68 | % | ||||||||||||||||
RSL/Total assets
|
58.35 | % | 63.11 | % | 63.11 | % | 69.16 | % | 76.23 | % | 76.37 | % | ||||||||||||||||
GAP/Total assets
|
-12.26 | % | -11.52 | % | -11.52 | % | -10.47 | % | -7.27 | % | 11.31 | % | ||||||||||||||||
GAP/RSA
|
-26.61 | % | -22.33 | % | -22.33 | % | -17.83 | % | -10.55 | % | 12.90 | % |
Name
|
Age
|
Positions
|
Directors
|
||
Robert D. Regnier
|
64
|
President, Chief Executive Officer and Chairman of the Board of Directors of Blue Valley; President, Chief Executive Officer and Chairman of the Board of Directors of the Bank
|
Donald H. Alexander
|
75
|
Director of Blue Valley and the Bank
|
Robert D. Taylor
|
66
|
Director of Blue Valley
|
James L. Gegg
|
62
|
Director of Blue Valley
|
Additional Directors of the Bank
|
||
Harvey S. Bodker
|
77
|
Director of the Bank
|
Richard L. Bond
|
77
|
Director of the Bank
|
Suzanne E. Dotson
|
66
|
Director of the Bank
|
Charles H. Hunter
|
71
|
Director of the Bank
|
Executive Officers who are not Directors
|
||
Mark A. Fortino
|
47
|
Executive Vice President and Chief Financial Officer of the Bank; Chief Financial Officer of Blue Valley
|
Bruce Easterly
|
54
|
Senior Vice President – Commercial Lending, Mortgage Originations and Business Development for the BankExecutive Vice President and Chief Lending Officer
|
Bonnie McConnaughy
|
54
|
Senior Vice President, Operations – Retail Division of the Bank
|
Proposed Purchases of Common Stock in the Rights Offering
|
|||||||
Common Stock Beneficially (2) Owned Before Rights Offering
|
Percentage of Class Before Rights Offering
|
Number of Shares
|
Amount
|
Common Stock to be Beneficially (2) Owned After Rights Offering
|
|||
Robert D. Regnier
|
760,906
|
(1)(3)
|
25.89%
|
||||
Donald H. Alexander
|
230,848
|
(1)
|
7.86%
|
(4)
|
|||
Thomas A. McDonnell
|
212,225
|
(1)(5)
|
6.49%
|
(6)
|
|||
Robert D. Taylor
|
22,742
|
(1)
|
0.77%
|
||||
James L. Gegg
|
1,745
|
(1)
|
0.06%
|
||||
Mark A. Fortino
|
17,338
|
(1)(12)
|
0.59%
|
(13)
|
|||
Bruce A. Easterly
|
10,556
|
(1)(14)
|
0.36%
|
(13)
|
|||
Bonnie M. McConnaughy
|
8,700
|
(1)(15)
|
0.30%
|
(13)
|
|||
All Directors and Executive Officers, 8 in number, as a Group
|
1,265,060
|
42.32%
|
-
|
$ -
|
-
|
||
|
(1)
|
All entries based on information provided to us by our directors and executive officers.
|
|
(2)
|
For purposes of this table, a person is considered to beneficially own shares of common stock if he or she directly or indirectly has or shares voting power, which includes the power to vote or to direct the voting of the shares, or investment power, which includes the power to dispose or direct the disposition of the shares, or if he/she has the right to acquire the shares under options which are exercisable currently or within 60 days of June 30, 2013. Each person named in the above table has sole voting power and sole investment power with respect to the indicated shares unless otherwise noted. A person is considered to have shared voting and investment power over shares indicated as being owned by the spouse or the IRA of the spouse of that person.
|
|
(3)
|
Includes 16,585 shares held in family limited partnerships and a corporate entity; 628,993 shares held individually; 25,930 shares issued to Mr. Regnier under the restricted stock award program; and 89,398 shares held in a family limited partnership with his spouse.
|
|
(4)
|
Consists of ____shares acquired once Mr. Alexander exercises his basic subscription rights; and ___ shares acquired once Mr. Alexander exercises his oversubscription rights, if available.
|
|
(5)
|
Consists of 3,600 shares held individually; 208,625 shares jointly held by Mr. McDonnell and his spouse in a trust. Mr. McDonnell is not a director or executive officer of the Company, but is a beneficial owner of over five percent of the outstanding common stock.
|
|
(6)
|
Consists of ___ shares acquired once Mr. McDonnell exercises his basic subscription rights; and ___ shares acquired once Mr. McDonnell exercises his oversubscription rights, if available.
|
|
(7)
|
|
(8)
|
|
(9)
|
|
(10)
|
|
(11)
|
(12)
|
Consists of 5,283 shares held individually; 1,600 shares issued to Mr. Fortino under the restricted stock award program; 9,567 shares jointly held by Mr. Fortino and his spouse in a trust; and 888 shares held individually by his spouse.
|
(13)
|
Consists of ___ shares acquired once Mr. Fortino exercises his basic subscription rights; and ___ shares to be acquired once Mr. Fortino exercises his oversubscription rights, if available.
|
(14)
|
Consists of ___ shares acquired once Mr. Fortino exercises his basic subscription rights; and ___ shares to be acquired once Mr. Fortino exercises his oversubscription rights, if available.
|
(15)
|
Consists of 6,000 shares held individually; 1,100 shares jointly held by Ms. McConnaughy and her spouse; 1,600 shares issued to Ms. McConnaughy under the restricted stock award program.
|
(16)
|
Consists of 39,768 shares held individually; 600 shares issued to Mr. Bodker under the restricted stock award program; and 26,664 shares jointly held in a family trust.
|
(17)
|
Consists of 39,768 shares
|
(18)
|
Consists of 14,900 shares held individually; 600 shares issued to Ms. Dotson under the restricted stock award program; and 12,400 shares Ms. Dotson has the right to acquire under vested stock options that she has not exercised.
|
(19)
|
Consists of 10,748 shares held individually; 600 shares issued to Mr. Hunter under the restricted stock award program; and 7,400 shares Mr. Hunter has the right to acquire under vested stock options that he has not exercised.
|
|
·
|
were made in the ordinary course of business;
|
|
·
|
were made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other persons; and
|
|
·
|
did not involve more than the normal risk of collectability or present other unfavorable features.
|
2013
|
2012
|
||||||||
(In Thousands)
|
(In Thousands)
|
||||||||
Balance, beginning of year
|
$ | 13,632 | $ | 12,967 | |||||
New loans and advances
|
1,477 | 4,060 | |||||||
Repayments and reclassifications
|
(1,150 | ) | (3,395 | ) | |||||
Balance, end of period
|
$ | 13,959 | $ | 13,632 |
·
|
require that bonus, incentive compensation, and retention payments made to our Senior Executive Officers and the next 20 most highly compensated employees are subject to recovery or “clawback” by the Company if the payments were based on materially inaccurate financial statements or any other materially inaccurate performance metric criteria;
|
·
|
prohibit paying any “golden parachute” payment to any Senior Executive Officer or any of the next five most-highly compensated employees, generally meaning any payment in the nature of compensation to (or for the benefit of) an executive officer made in connection with an applicable severance from employment other than compensation earned for services rendered or accrued benefits;
|
·
|
prohibit paying or accruing any bonus, retention award or incentive compensation to the most highly compensated employee, except for awards of long-term restricted stock that have a value equal to no greater than one-third of such executive’s annual compensation and do not fully vest during the Restricted Period; and
|
·
|
review of bonuses, retention awards, and other compensation paid to the Senior Executive Officers and the next 20 most-highly compensated employees to determine whether any such payments were inconsistent with the purposes of the TARP or otherwise against public interest.
|
SUMMARY COMPENSATION TABLE
|
|||||||||||
Name and Principal Positions
|
Year
|
Salary
|
Bonus (1)
|
Long Term Retention Bonus (2)
|
Stock Awards (3)
|
All Other Comp (4)
|
Total
|
||||
Robert D. Regnier
President, Chief Executive Officer and Chairman of the Board of Directors of the Company; President, Chief Executive Officer and Director of the Bank
|
2012
|
$ |
272,700
|
$ |
-
|
$ |
-
|
$ 37,953
|
$ 12,254
|
$ 322,907
|
|
2011
|
$ |
265,200
|
$ |
-
|
$ |
-
|
$ 34,400
|
$ 12,082
|
$ 311,682
|
||
2010
|
$ |
265,200
|
$ |
-
|
$ |
-
|
$ 37,500
|
$ 12,472
|
$ 315,172
|
||
$ |
Mark A. Fortino
Chief Financial Officer of the Company; Executive Vice President and Chief Financial Officer of the Bank
|
2012
|
$ |
177,500
|
$ |
10,872
|
$ |
-
|
$ 8,500
|
$ 8,052
|
$ 204,924
|
|
2011
|
$ |
170,000
|
$ |
-
|
$ |
-
|
$ 4,300
|
$ 7,016
|
$ 181,316
|
||
2010
|
$ |
155,000
|
$ |
-
|
$ |
-
|
$ 4,500
|
$ 6,326
|
$ 165,826
|
||
Bruce A. Easterly
Executive Vice President – Chief Lending Officer of the Bank
|
2012
|
$ |
172,500
|
$ |
10,566
|
$ |
-
|
$ 8,500
|
$ 8,240
|
$ 199,806
|
|
2011
|
$ |
165,000
|
$ |
-
|
$ |
-
|
$ 4,300
|
$ 6,917
|
$ 176,217
|
||
2010
|
$ |
150,000
|
$ |
-
|
$ |
-
|
$ 4,500
|
$ 6,276
|
$ 160,776
|
||
Bonnie M. McConnaughy
Senior Vice President – Deposit Operations and e-Business Solutions if the Bank
|
2012
|
$ |
117,500
|
$ |
7,197
|
$ |
-
|
$ 8,500
|
$ 5,405
|
$ 138,602
|
|
2011
|
$ |
110,000
|
$ |
-
|
$ |
-
|
$ 4,300
|
$ 4,566
|
$ 118,866
|
||
2010
|
$ |
100,000
|
$ |
-
|
$ |
-
|
$ 4,500
|
$ 4,450
|
$ 108,950
|
(1)
|
Discretionary Bonus.
|
(2)
|
The Company did not meet the ROE requirements for bonus and thus no long term retention bonus was recorded for 2012, 2011 and 2010. Future payout of the award cannot be determined at this time and is dependent on several factors including future financial performance of the Company, as discussed under the Long-Term Retention Bonus Plan portion of the Compensation Discussion and Analysis.
|
(3)
|
In December 2012, the Board approved restricted stock awards for 2012 performance with a grant date of
|
|
December 19, 2012. Mr. Regnier was awarded 8,930 shares of stock, which will not vest for the duration of the period that the Treasury holds any equity or debt position in the Company acquired under the CPP. Mr. Fortino, Mr. Easterly, and Ms. McConnaughy were each awarded 2,000 shares of restricted stock which vested immediately. Management’s estimate of the fair value of our common stock at grant date, December 19, 2012, was $4.25 per share based upon the last trade which occurred on December 19, 2012. In December 2011, the Board approved restricted stock awards for 2011 performance with a grant date of December 21, 2011. Mr. Regnier was awarded 8,000 shares of stock, which will not vest for the duration of the period that the Treasury holds any equity or debt position in the Company acquired under the CPP. Mr. Fortino, Mr. Easterly, and Ms. McConnaughy were each awarded 1,000 shares of restricted stock which vest on December 21. 2014. Management’s estimate of the fair value of our common stock at grant date, December 21, 2011, was $4.30 per share based upon the last trade which occurred on December 21, 2011. In December 2010, the Board approved restricted stock awards for 2010 performance with a grant date of December 15, 2010. Mr. Regnier was awarded 5,000 shares of stock, which will not vest for the duration of the period that the Treasury holds any equity or debt position in the Company acquired under the CPP. Mr. Fortino, Mr. Easterly, and Ms. McConnaughy were each awarded 600 shares of restricted stock which vest on December 15, 2013. Management’s estimate of the fair value of our common stock at grant date, December 15, 2010, was $7.50 per share based upon the last trade which occurred on December 9, 2010.
|
(4)
|
All Other Compensation is comprised of the following amounts:
|
Name
|
401(k) Match
|
Profit Sharing Contribution
|
Premiums for Group Term Life Insurance
|
Cash Dividends Paid on Stock Awards (a)
|
Perquisites(b)
|
Service Awards
|
Total All Other Compensation
|
|
Robert D. Regnier
|
2012
|
$ 10,000
|
$ -
|
$ 1,650
|
$ -
|
$ 604
|
$ -
|
$ 12,254
|
2011
|
$ 9,800
|
$ -
|
$ 1,584
|
$ -
|
$ 698
|
$ -
|
$ 12,082
|
|
2010
|
$ 9,800
|
$ -
|
$ 1,584
|
$ -
|
$ 1,088
|
$ -
|
$ 12,472
|
|
Mark A. Fortino
|
2012
|
$ 7,812
|
$ -
|
$ 240
|
$ -
|
$ -
|
$ -
|
$ 8,052
|
2011
|
$ 6,800
|
$ -
|
$ 216
|
$ -
|
$ -
|
$ -
|
$ 7,016
|
|
2010
|
$ 6,200
|
$ -
|
$ 126
|
$ -
|
$ -
|
$ -
|
$ 6,326
|
|
Bruce A. Easterly
|
2012
|
$ 7,636
|
$ -
|
$ 354
|
$ -
|
$ -
|
$ 250
|
$ 8,240
|
2011
|
$ 6,601
|
$ -
|
$ 317
|
$ -
|
$ -
|
$ -
|
$ 6,918
|
|
2010
|
$ 6,000
|
$ -
|
$ 276
|
$ -
|
$ -
|
$ -
|
$ 6,276
|
|
Bonnie M. McConnaughy
|
2012
|
$ 5,209
|
$ -
|
$ 196
|
$ -
|
$ -
|
$ -
|
$ 5,405
|
2011
|
$ 4,400
|
$ -
|
$ 166
|
$ -
|
$ -
|
$ -
|
$ 4,566
|
|
2010
|
$ 4,012
|
$ -
|
$ 138
|
$ -
|
$ -
|
$ 300
|
$ 4,450
|
|
|
(a)
|
No cash dividends were paid in 2012, 2011 and 2010.
|
|
(b)
|
Perquisites for Mr. Regnier include personal use of the Company car.
|
|
1.
|
Entitlement to a salary, adjusted annually by the Board;
|
|
2.
|
Eligibility for incentive awards under the 1998 Equity Incentive Plan, as determined by the Board;
|
|
3.
|
Entitlement to medical and disability insurance and other forms of health, life and other insurance and/or benefits provided by the Company to its employees; and
|
|
4.
|
Entitlement to paid time off and all other employee benefits provided by the Company to its employees, except for Mr. Regnier who is not eligible to participate in the Employee Stock Purchase Plan due to his greater than 5% ownership in the Company.
|
Plan Category
|
Number of
Common Shares to
be Issued upon
Exercise of
Outstanding Options, Warrants
and Rights
|
Weighted Average
Exercise Price of
Outstanding
Options, Warrants
and Rights
|
Number of
Common Shares
Remaining
Available for
Future Issuance
Under Equity Plans
(Excluding Shares
Reflected in
Column (a))
|
||
(a)
|
(b)
|
||||
Equity compensation plans approved by
stockholders
|
-
|
-
|
-
|
||
Equity compensation plans not approved by
stockholders
|
-
|
-
|
-
|
||
Total
|
$ -
|
$ -
|
$ -
|
||
Fees
Earned or
Paid in Cash(1)
|
Stock Awards (2)
|
Option Awards
|
Non –Equity Incentive Plan Compensation
|
All Other Compensation
|
Total Compensation
|
|||
Name
|
Year
|
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
|
Donald H. Alexander
|
2012
|
$ 37,500
|
$ 8,500
|
-
|
-
|
-
|
$ 45,500
|
|
Robert D. Taylor
|
2012
|
$ 17,950
|
$ 8,500
|
-
|
-
|
-
|
$ 26,450
|
|
James L. Gegg
|
2012
|
$ 3,350
|
$ 4,250
|
-
|
-
|
-
|
$ 7,600
|
|
(1)
|
Fees earned were converted to shares of the Company’s common stock during 2012. In December, 2012, the following shares of common stock were issued to the non-employee directors: Mr. Alexander – 8,223 shares; Mr. Taylor – 3,989 shares; and Mr. Gegg – 745 shares.
|
(2)
|
All non-employee directors received 2,000 shares, except M. Gegg, who received 1,000 shares, which vested immediately. Management’s estimate of the fair value of our common stock at December 24, 2012, the grant date, was $4.25 per share based upon the last trade which occurred on December 19, 2012.
|
SEC registration fee
|
$
|
||
Printing expenses
|
*
|
||
Legal fees and expenses
|
*
|
||
Accounting fees and expenses
|
*
|
||
Blue sky fees and expenses
|
*
|
||
Miscellaneous
|
*
|
||
Total
|
*
|
||
* Estimated pursuant to instruction to Rule 511 of Regulation S-K.
|
*
|
Exhibit No.
|
Description
|
BLUE VALLEY BAN CORP. | |||
By: /s/ Robert D. Regnier | |||
Robert D. Regnier, President, Chief Executive Officer and
Director (Principal Executive Officer)
|
Signature
|
Title
|
Date
|
/s/ Robert D. Regnier
|
President, Chief Executive Officer and
Director (Principal Executive Officer)
|
__________, 2013
|
Robert D. Regnier | ||
/s/ Mark A. Fortino
|
Chief Financial Officer (Principal
Financial [and Accounting] Officer)
|
__________, 2013
|
Mark A. Fortino | ||
/s/ Donald H. Alexander
|
Director
|
__________, 2013
|
Donald H. Alexander | ||
/s/ Robert D Taylor
|
Director
|
__________, 2013
|
Robert D. Taylor | ||
/s/ James L. Gegg_______
|
Director
|
__________, 2013
|
James L. Gegg |
Exhibit No.
|
Description
|
|
Report of Independent Registered Public Accounting Firm
|
F-2
|
|||
Condensed Consolidated Balance Sheets as of
June 30, 2012 and December 31, 2012
|
F-3
|
|||
Condensed Consolidated Statements of Operations as of
June 30, 2012 and December 31, 2012
|
F-5
|
|||
Condensed Consolidated Statements of Comprehensive Loss for the Six Months Ended
June 30, 2012 and 2012
|
F-6
|
|||
Condensed Consolidated Statements of Stockholders’ Equity for the
Six Months Ended June 30, 2012 and 2012
|
F-7
|
|||
Condensed Consolidated Statements of Cash Flows for the
Six Months Ended June 30, 2012 and 2012
|
F-8
|
|||
Notes To Condensed Consolidated Financial Statements for the
Six Months Ended June 30, 2012 and 2012
|
F-10
|
|||
Audited Financial Statements
|
||||
Report Of Independent Registered Public Accounting Firm
|
F-33
|
|||
Consolidated Balance Sheet for fiscal years ended
December 31, 2012, 2011 and 2010
|
F-34
|
|||
Consolidated Statement of Operations for fiscal years ended
December 31, 2012, 2011 and 2010
|
F-36
|
|||
Consolidated Statement Of Comprehensive Income (Loss) for fiscal years ended
December 31, 2012, 2011
|
F-37
|
|||
Consolidated Statements of Stockholders’ Equity for fiscal years ended
December 31, 2012, 2011 and 2010
|
F-38
|
|||
Consolidated Statements Of Cash Flow for fiscal years ended
December 31, 2012, 2011 and 2010
|
F-39
|
|||
Consolidated Notes To Financial Statements for fiscal years ended
December 31, 2012, 2011 and 2010
|
F-41
|
ASSETS
|
||||||||||||||||
June 30, 2013
|
December 31, 2012
|
$ Chg
|
% Chg
|
|||||||||||||
(Unaudited)
|
||||||||||||||||
Cash and due from banks
|
$ | 24,911 | $ | 33,353 | (8,442 | ) | -25.31 | % | ||||||||
Interest-bearing deposits in other financial institutions
|
56,455 | 67,724 | (11,269 | ) | -16.64 | % | ||||||||||
Cash and cash equivalents
|
81,366 | 101,077 | (19,711 | ) | -19.50 | % | ||||||||||
- | ||||||||||||||||
Available-for-sale securities
|
87,868 | 77,845 | 10,023 | 12.88 | % | |||||||||||
Mortgage loans held for sale, fair value
|
5,956 | 7,621 | (1,665 | ) | -21.85 | % | ||||||||||
- | ||||||||||||||||
Loans, net of allowance for loan losses of $8,665 and $9,057 in 2013 and 2012,
|
(7,204 | ) | -1.77 | % | ||||||||||||
respectively
|
399,410 | 406,614 | - | |||||||||||||
- | ||||||||||||||||
Premises and equipment, net
|
15,680 | 15,448 | 232 | 1.50 | % | |||||||||||
Foreclosed assets held for sale, net
|
27,993 | 31,936 | (3,943 | ) | -12.35 | % | ||||||||||
Interest receivable
|
1,537 | 1,529 | 8 | 0.55 | % | |||||||||||
Deferred income taxes
|
2,537 | 1,121 | 1,416 | 126.31 | % | |||||||||||
Prepaid expenses and other assets
|
6,714 | 6,095 | 619 | 10.15 | % | |||||||||||
FHLBank stock, Federal Reserve Bank stock, and
|
7,608 | 7,540 | 68 | 0.90 | % | |||||||||||
other securities
|
||||||||||||||||
Core deposit intangible asset, at amortized cost
|
107 | 179 | (72 | ) | -40.15 | % | ||||||||||
- | ||||||||||||||||
Total assets
|
$ | 636,776 | $ | 657,005 | (20,229 | ) | -3.08 | % |
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||||||||||
June 30, 2013
|
December 31, 2012
|
|||||||||||||||
(Unaudited)
|
||||||||||||||||
LIABILITIES
|
||||||||||||||||
Deposits
|
||||||||||||||||
Demand
|
$ | 101,931 | $ | 113,698 | ||||||||||||
Savings, NOW and money market
|
227,841 | 235,632 | ||||||||||||||
Time
|
122,397 | 135,136 | ||||||||||||||
Total deposits
|
452,169 | 484,466 | (32,297 | ) | -6.67 | % | ||||||||||
Other interest-bearing liabilities
|
34,361 | 21,668 | ||||||||||||||
Long-term debt
|
101,449 | 101,111 | ||||||||||||||
Interest payable and other liabilities
|
10,932 | 9,945 | ||||||||||||||
Total liabilities
|
599,181 | 617,190 | ||||||||||||||
STOCKHOLDERS’ EQUITY
|
||||||||||||||||
Capital stock
|
||||||||||||||||
Preferred stock, $1 par value, $1,000 liquidation preference;
|
||||||||||||||||
Authorized 15,000,000 shares; issued and outstanding
|
||||||||||||||||
2013 – 21,750 shares; 2012 – 21,750 shares
|
22 | 22 | ||||||||||||||
Common stock, par value $1 per share;
|
||||||||||||||||
Authorized 15,000,000 shares; issued and outstanding
|
||||||||||||||||
2013 – 2,938,871 shares; 2012 – 2,934,123 shares
|
2,939 | 2,934 | ||||||||||||||
Additional paid in capital
|
38,792 | 38,746 | ||||||||||||||
Accumulated deficit
|
(2,079 | ) | (1,930 | ) | ||||||||||||
Accumulated other comprehensive (loss) income, net of income taxes
(credit) of $(1,386) in 2013 and $29 in 2012
|
(2,079 | ) | 43 | (2,122 | ) | 4935.68 | % | |||||||||
Total stockholders’ equity
|
37,595 | 39,815 | (2,220 | ) | -5.58 | % | ||||||||||
Total liabilities and stockholders’ equity
|
$ | 636,776 | $ | 657,005 |
Six Months Ended
|
||||||||||
June 30, 2013
|
June 30, 2012
|
|||||||||
(Unaudited)
|
(Unaudited)
|
|||||||||
INTEREST AND DIVIDEND INCOME
|
||||||||||
Interest and fees on loans
|
$10,485
|
$11,573
|
(1,088)
|
-9.40%
|
||||||
Federal funds sold and other short-term investments
|
79
|
96
|
(17)
|
-17.32%
|
||||||
Available-for-sale securities
|
694
|
498
|
196
|
39.32%
|
||||||
Dividends on FHLBank and Federal Reserve Bank stock
|
124
|
117
|
7
|
5.74%
|
||||||
Total interest and dividend income
|
11,382
|
12,284
|
(902)
|
-7.34%
|
||||||
INTEREST EXPENSE
|
-
|
|||||||||
Interest-bearing demand deposits
|
160
|
465
|
(305)
|
-65.55%
|
||||||
Savings and money market deposit accounts
|
138
|
154
|
(16)
|
-10.69%
|
||||||
Other time deposits
|
902
|
1,355
|
(453)
|
-33.42%
|
||||||
Federal funds purchased and other interest-bearing liabilities
|
12
|
20
|
(8)
|
-40.69%
|
||||||
Long-term debt, net
|
1,826
|
1,825
|
1
|
0.05%
|
||||||
Total interest expense
|
3,038
|
3,819
|
(781)
|
-20.46%
|
||||||
-
|
||||||||||
NET INTEREST INCOME
|
8,344
|
8,465
|
(121)
|
-1.42%
|
||||||
-
|
||||||||||
PROVISION FOR LOAN LOSSES
|
(500)
|
550
|
(1,050)
|
-190.91%
|
||||||
-
|
||||||||||
NET INTEREST INCOME AFTER PROVISION FOR LOAN
|
-
|
|||||||||
LOSSES
|
8,844
|
7,915
|
929
|
11.74%
|
||||||
-
|
||||||||||
NON-INTEREST INCOME
|
-
|
|||||||||
Loans held for sale fee income
|
770
|
931
|
(161)
|
-17.29%
|
||||||
Service fees
|
1,696
|
1,752
|
(56)
|
-3.18%
|
||||||
Realized gains on available-for-sale securities
|
127
|
-
|
127
|
|||||||
Other income
|
901
|
605
|
296
|
48.89%
|
||||||
Total non-interest income
|
3,494
|
3,288
|
206
|
6.27%
|
||||||
NON-INTEREST EXPENSE
|
-
|
|||||||||
Salaries and employee benefits
|
5,322
|
5,105
|
217
|
4.25%
|
||||||
Net occupancy expense
|
1,309
|
1,265
|
44
|
3.48%
|
||||||
Foreclosed assets expense
|
2,198
|
1,372
|
826
|
60.20%
|
||||||
Other operating expense
|
3,114
|
3,854
|
(740)
|
-19.20%
|
||||||
Total non-interest expense
|
11,943
|
11,596
|
347
|
2.99%
|
||||||
-
|
||||||||||
INCOME (LOSS) BEFORE INCOME TAXES
|
395
|
(393)
|
788
|
-200.62%
|
||||||
-
|
||||||||||
BENEFIT FOR INCOME TAXES
|
-
|
(2)
|
2
|
-100.00%
|
||||||
-
|
||||||||||
NET INCOME (LOSS)
|
395
|
(391)
|
786
|
-201.13%
|
||||||
-
|
||||||||||
DIVIDENDS ON PREFERRED STOCK
|
544
|
544
|
(0)
|
-0.05%
|
||||||
-
|
||||||||||
NET LOSS AVAILABLE TO COMMON STOCKHOLDERS
|
$(149)
|
$(935)
|
786
|
-84.11%
|
||||||
-
|
||||||||||
BASIC LOSS PER SHARE
|
$(0.05)
|
$ (0.33)
|
0.28
|
-84.85%
|
||||||
DILUTED LOSS PER SHARE
|
$(0.05)
|
$ (0.33)
|
0.28
|
-84.85%
|
Six Months Ended
|
||||||||
June 30, 2013
|
June 30, 2012
|
|||||||
(Unaudited)
|
(Unaudited)
|
|||||||
NET INCOME (LOSS)
|
$ | 395 | $ | (391 | ) | |||
OTHER COMPREHENSIVE INCOME (LOSS)
|
||||||||
Change in unrealized appreciation (depreciation) on available-for-sale securities,
|
||||||||
net of income taxes (credit) of $(1,415) and $85 for 2013 and 2012, respectively
|
(2,047 | ) | (128 | ) | ||||
Less: reclassification adjustment for realized (gains) losses included in
|
||||||||
net income, net of income tax credit of $51 for 2013
|
(76 | ) | - | |||||
Comprehensive loss
|
$ | (1,576 | ) | $ | (519 | ) |
Preferred Stock
|
Common Stock
|
Additional Paid-In Capital
|
Accumulated Deficit
|
Accumulated Other Comprehensive Income (Loss)
|
Total
|
|||||||||||||||||||
BALANCE, DECEMBER 31, 2011
|
$ | 22 | $ | 2,879 | $ | 38,511 | $ | (1,091 | ) | $ | 134 | $ | 40,455 | |||||||||||
Forfeiture of 5,440 shares of
|
||||||||||||||||||||||||
restricted stock
|
- | (5 | ) | 29 | - | - | 24 | |||||||||||||||||
Issuance of 6,508 shares common stock for
|
||||||||||||||||||||||||
the employee stock purchase plan
|
- | 6 | 20 | - | - | 26 | ||||||||||||||||||
Dividends on preferred stock
|
- | - | - | (544 | ) | - | (544 | ) | ||||||||||||||||
Net loss
|
- | - | - | (391 | ) | - | 91 | ) | ||||||||||||||||
Change in unrealized appreciation on
|
||||||||||||||||||||||||
available-for-sale securities, net of income
|
||||||||||||||||||||||||
tax credit of $85
|
- | - | - | - | (128 | ) | (128 | ) | ||||||||||||||||
BALANCE, JUNE 30, 2012
|
$ | 22 | $ | 2,880 | $ | 38,560 | $ | (2,026 | ) | $ | 6 | $ | 39,442 | |||||||||||
BALANCE, DECEMBER 31, 2012
|
$ | 22 | $ | 2,934 | $ | 38,746 | $ | (1,930 | ) | $ | 43 | $ | 39,815 | |||||||||||
Restricted stock earned
|
- | - | 31 | - | - | 31 | ||||||||||||||||||
Issuance of 4,748 shares common stock for
|
||||||||||||||||||||||||
the employee stock purchase plan
|
- | 5 | 15 | - | - | 20 | ||||||||||||||||||
Dividends on preferred stock
|
- | - | - | (544 | ) | - | (544 | ) | ||||||||||||||||
Net income
|
- | - | - | 395 | - | 395 | ||||||||||||||||||
Change in unrealized appreciation on
|
||||||||||||||||||||||||
available-for-sale securities, net of income
|
||||||||||||||||||||||||
tax credit of $1,415
|
- | - | - | - | (2,122 | ) | (2,122 | ) | ||||||||||||||||
BALANCE, JUNE 30, 2013
|
$ | 22 | $ | 2,939 | $ | 38,792 | $ | (2,079 | ) | $ | (2,079 | ) | $ | 37,595 |
Six Months Ended
|
||||||||
June 30, 2013
|
June 30, 2012
|
|||||||
(Unaudited)
|
(Unaudited)
|
|||||||
OPERATING ACTIVITIES
|
||||||||
Net income (loss)
|
$ | 395 | $ | (393 | ) | |||
Adjustments to reconcile net income (loss) to net cash
|
||||||||
From operating activities:
|
||||||||
Depreciation and amortization
|
833 | 834 | ||||||
Amortization (accretion) of premiums and discounts on available-for-sale securities
|
87 | (42 | ) | |||||
Provision for loan losses
|
(500 | ) | 550 | |||||
Provision for losses on foreclosed assets held for sale
|
1,473 | 427 | ||||||
Deferred income taxes
|
- | (3 | ) | |||||
Stock dividends on FHLBank ("FHLB") stock
|
(68 | ) | (58 | ) | ||||
Increase in value of bank owned life insurance
|
(170 | ) | (75 | ) | ||||
Net realized gains on available-for-sale securities
|
(127 | ) | - | |||||
Net loss (gain) on sale of foreclosed assets
|
121 | (68 | ) | |||||
Restricted stock earned and forfeited
|
31 | 24 | ||||||
Compensation expense related to the Employee Stock Purchase Plan
|
3 | 1 | ||||||
Originations of loans held for sale
|
(33,731 | ) | (31,492 | ) | ||||
Proceeds from the sale of loans held for sale
|
35,229 | 34,793 | ||||||
Realized (gain) loss on loans held for sale fair value adjustment
|
167 | (6 | ) | |||||
Changes in:
|
||||||||
Interest receivable
|
(8 | ) | 128 | |||||
Net fair value of loan related commitments
|
(92 | ) | (55 | ) | ||||
Prepaid expenses and other assets
|
(357 | ) | (244 | ) | ||||
Interest payable and other liabilities
|
441 | 842 | ||||||
Net cash provided by operating activities
|
3,727 | 5,163 | ||||||
INVESTING ACTIVITIES
|
||||||||
Net change in loans
|
4,226 | (5,020 | ) | |||||
Proceeds from sale of loan participations
|
2,930 | 2,396 | ||||||
Purchase of premises and equipment
|
(655 | ) | (256 | ) | ||||
Proceeds from the sale of foreclosed assets, net of expenses
|
3,275 | 3,607 | ||||||
Purchase of priority lien on foreclosed assets
|
(378 | ) | - | |||||
Purchases of available-for-sale securities
|
(48,844 | ) | (59,961 | ) | ||||
Proceeds from maturities of available-for-sale securities
|
29,923 | 56,000 | ||||||
Proceeds from the redemption of FHLB and Federal Reserve Bank stock
|
- | 31 | ||||||
Proceeds from sale of available-for-sale securities
|
5,399 | - | ||||||
Net cash used in investing activities
|
(4,124 | ) | (3,203 | ) | ||||
FINANCING ACTIVITIES
|
||||||||
Net increase (decrease) in demand deposits, money market, NOW and savings accounts
|
(19,558 | ) | 7,866 | |||||
Net decrease in time deposits
|
(12,739 | ) | (8,672 | ) | ||||
Net increase in federal funds purchased and other interest-bearing liabilities
|
12,963 | 2,101 | ||||||
Net proceeds from the sale of stock through Employee Stock Purchase Plan
|
20 | 27 | ||||||
Net cash provided by (used in) financing activities
|
(19,314 | ) | 1,322 | |||||
Increase (decrease) in cash and cash equivalents
|
(19,711 | ) | 3,282 | |||||
Cash and cash equivalents, beginning of period
|
101,077 | 99,899 | ||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD
|
$ | 81,366 | $ | 103,181 |
Six Months Ended
|
||||||||
June 30, 2013
|
June 30, 2012
|
|||||||
(Unaudited)
|
(Unaudited)
|
|||||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION
|
||||||||
Cash paid during the year for:
|
||||||||
Interest
|
$ | 2,551 | $ | 2,881 | ||||
Noncash investing and financing activities:
|
||||||||
Transfer of loans to foreclosed property, net of specific allowance
|
$ | 545 | $ | 8,536 | ||||
Preferred dividends accrued but not paid
|
$ | 544 | $ | 544 | ||||
Sale and financing of foreclosed assets
|
$ | - | $ | 736 |
Six Months Ended June 30,
|
||||||||
2013
|
2012
|
|||||||
(amounts in thousands, except share and per share data)
|
||||||||
Net income (loss)
|
$ | 395 | $ | (391 | ) | |||
Preferred dividends
|
(544 | ) | (544 | ) | ||||
Net loss available to common stockholders
|
$ | (149 | ) | $ | (935 | ) | ||
Average common shares outstanding
|
2,907,302 | 2,850,354 | ||||||
Average common share stock options outstanding and
|
||||||||
restricted stock (B)
|
17,954 | 13,865 | ||||||
Average diluted common shares (B)
|
2,925,256 | 2,864,219 | ||||||
Basic loss per share
|
$ | (0.05 | ) | $ | (0.33 | ) | ||
Diluted loss per share (A)
|
$ | (0.05 | ) | $ | (0.33 | ) |
(A)
|
No shares or stock options, restricted stock or warrants were included in the computation of diluted earnings per share for any period there was a loss.
|
(B)
|
Warrants to purchase 111,083 shares of common stock at an exercise price of $29.37 per share were outstanding at June 30, 2013 and 2012 , but were not included in the computation of diluted earnings per share because the warrants’ exercise price was greater than the average market price of the common shares, thus making the warrants anti-dilutive. Stock options to purchase 0 and 10,575 shares of common stock were outstanding at June 30, 2013 and 2012, respectively, but were not included in the computation of diluted earnings per share because the option's exercise price was greater than the average market price of the common shares, thus making the options anti-dilutive.
|
June 30, 2013
|
||||||||||||||||
Amortized Cost
|
Gross Unrealized Gains
|
Gross Unrealized Losses
|
Fair Value
|
|||||||||||||
(in thousands)
|
||||||||||||||||
U.S. Government sponsored agencies
|
$ | 63,125 | $ | - | $ | (1,992 | ) | $ | 61,133 | |||||||
Municipal securities
|
17,295 | - | (1,349 | ) | 15,946 | |||||||||||
U.S. Government sponsored agency mortgage backed securities
|
5,037 | - | (22 | ) | 5,015 | |||||||||||
U.S. Small Business Administration loan pool certificates
|
5,277 | - | (102 | ) | 5,175 | |||||||||||
Equity and other securities
|
600 | - | (1 | ) | 599 | |||||||||||
$ | 91,334 | $ | - | $ | (3,466 | ) | $ | 87,868 | ||||||||
December 31, 2012
|
||||||||||||||||
Amortized Cost
|
Gross Unrealized Gains
|
Gross Unrealized Losses
|
Fair Value
|
|||||||||||||
(in thousands)
|
||||||||||||||||
U.S. Government sponsored agencies
|
$ | 63,123 | $ | 68 | $ | (43 | ) | $ | 63,148 | |||||||
Municipal securities
|
14,051 | 176 | (153 | ) | 14,074 | |||||||||||
Equity and other securities
|
600 | 23 | - | 623 | ||||||||||||
$ | 77,774 | $ | 267 | $ | (196 | ) | $ | 77,845 | ||||||||
Amortized Cost
|
Fair Value
|
|||||||
(in thousands)
|
||||||||
Due in one year or less
|
$ | - | $ | - | ||||
Due after one year through five years
|
- | - | ||||||
Due after five years through ten years
|
409 | 388 | ||||||
Due after ten years
|
80,011 | 76,691 | ||||||
Total
|
80,420 | 77,079 | ||||||
U.S. Government sponsored agency mortgage backed securities
|
5,037 | 5,015 | ||||||
U.S. Small Business Administration loan pool certificates
|
5,277 | 5,175 | ||||||
Equity and other securities
|
600 | 599 | ||||||
$ | 91,334 | $ | 87,868 |
June 30, 2013
|
||||||||||||||||||||||||
Less than 12 Months
|
12 Months or More
|
Total
|
||||||||||||||||||||||
Description of Securities
|
Fair Value
|
Unrealized Losses
|
Fair Value
|
Unrealized Losses
|
Fair Value
|
Unrealized Losses
|
||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||
U.S. Government sponsored agencies
|
$ | 56,133 | $ | 1,992 | $ | - | $ | - | $ | 56,133 | $ | 1,992 | ||||||||||||
Municipal securities
|
15,050 | 1,349 | - | - | 15,050 | 1,349 | ||||||||||||||||||
U.S. Government sponsored agency
|
5,015 | 22 | - | - | 5,015 | 22 | ||||||||||||||||||
mortgage backed securities
|
||||||||||||||||||||||||
U.S. Small Business Administration
|
5,175 | 102 | - | - | 5,175 | 102 | ||||||||||||||||||
loan pool certificates
|
||||||||||||||||||||||||
Equity and other securities
|
599 | 1 | - | - | 599 | 1 | ||||||||||||||||||
Total temporarily impaired securities
|
$ | 81,972 | $ | 3,466 | $ | - | $ | - | $ | 81,972 | $ | 3,466 | ||||||||||||
December 31, 2012
|
||||||||||||||||||||||||
Description of Securities
|
Less than 12 Months
|
12 Months or More
|
Total
|
|||||||||||||||||||||
Fair Value
|
Unrealized Losses
|
Fair Value
|
Unrealized Losses
|
Fair Value
|
Unrealized Losses
|
|||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||
U.S. Government sponsored agencies
|
$ | 27,832 | $ | 43 | $ | - | $ | - | $ | 27,832 | $ | 43 | ||||||||||||
Municipal securities
|
6,153 | 153 | - | - | 6,153 | 153 | ||||||||||||||||||
Total temporarily impaired securities
|
$ | 33,985 | $ | 196 | $ | - | $ | - | $ | 33,985 | $ | 196 |
June 30,
|
December 31,
|
|||||||
2013
|
2012
|
|||||||
(in thousands)
|
||||||||
Balance
|
$ | 34,631 | $ | 21,668 | ||||
Carrying value of securities pledged to secure agreements to repurchase
|
$ | 36,724 | $ | 37,059 | ||||
Average balance during the period of securities sold under agreements
|
||||||||
to repurchase during six month period ending June 30, 2013 and year ending December 31, 2012
|
$ | 29,462 | $ | 18,663 | ||||
Maximum amount outstanding at any month-end during the six-month
|
||||||||
period ending June 30, 2013 and year ending December 31, 2012
|
$ | 34,631 | $ | 22,071 |
Amounts Reclassified From
Accumulated Other
Comprehensive Income
Six Months Ended
|
||||||
June 30, 2013
|
June 30, 2012
|
Affected line items in the Condensed
Consolidated Statements of Operations
|
||||
(Unaudited
|
(Unaudited)
|
|||||
(in thousands)
|
||||||
Unrealized gains on available-for-sale securities
|
$ 127
|
$ -
|
Realized gains on available-for-sale securities (Total reclassified amount before tax)
|
|||
Income Taxes
|
51
|
-
|
Benefit for income taxes
|
|||
Total reclassifications out of accumulated other comprehensive income
|
$ 76
|
$ -
|
||||
June 30,
|
December 31,
|
|||||||
2013
|
2012
|
|||||||
(in thousands)
|
||||||||
Commercial loans
|
$ | 119,435 | $ | 115,520 | ||||
Commercial real estate loans
|
133,304 | 143,198 | ||||||
Construction loans
|
47,082 | 46,515 | ||||||
Home equity loans
|
45,412 | 49,529 | ||||||
Residential real estate loans
|
46,616 | 43,584 | ||||||
Lease financing
|
9,512 | 10,054 | ||||||
Consumer loans
|
6,704 | 7,271 | ||||||
Total loans
|
408,065 | 415,671 | ||||||
Less: Allowance for loan losses
|
8,655 | 9,057 | ||||||
Net loans
|
$ | 399,410 | $ | 406,614 |
As of or For the Six Months Ended June 30, 2013
|
||||||||||||||||||||||||||||||||
Commercial
|
Commercial
Real Estate
|
Construction
|
Home
Equity
|
Real Estate
|
Lease
Financing
|
Consumer
|
Total
|
|||||||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||||||||||
Allowance for loan losses:
|
||||||||||||||||||||||||||||||||
Balance, beginning of period
|
$ | 2,097 | $ | 3,582 | $ | 1,543 | $ | 634 | $ | 1,138 | $ | 46 | $ | 17 | $ | 9,057 | ||||||||||||||||
Provision charged to
|
(557 | ) | (1,067 | ) | 1,063 | 75 | 11 | (25 | ) | - | (500 | ) | ||||||||||||||||||||
expense
|
||||||||||||||||||||||||||||||||
Losses charged off
|
(44 | ) | - | - | - | (68 | ) | - | - | (112 | ) | |||||||||||||||||||||
Recoveries
|
59 | 12 | 86 | 21 | 30 | - | 2 | 210 | ||||||||||||||||||||||||
Balance, end of period
|
$ | 1,555 | $ | 2,527 | $ | 2,692 | $ | 730 | 1,111 | $ | 21 | $ | 19 | $ | 8,655 | |||||||||||||||||
As of or For the Six Months Ended June 30, 2012
|
||||||||||||||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||||||||||
Allowance for loan losses:
|
||||||||||||||||||||||||||||||||
Balance, beginning of period
|
$ | 2,987 | $ | 3,772 | $ | 2,721 | $ | 1,338 | $ | 2,312 | $ | 30 | $ | 29 | $ | 13,189 | ||||||||||||||||
Provision charged to
|
1,575 | 247 | (210 | ) | (334 | ) | (700 | ) | (11 | ) | (17 | ) | 550 | |||||||||||||||||||
expense
|
||||||||||||||||||||||||||||||||
Losses charged off
|
(1,875 | ) | (1,335 | ) | (883 | ) | (104 | ) | (488 | ) | - | - | (4,685 | ) | ||||||||||||||||||
Recoveries
|
102 | 8 | 176 | 39 | 18 | - | 2 | 345 | ||||||||||||||||||||||||
Balance, end of period
|
$ | 2,789 | $ | 2,692 | $ | 1,804 | $ | 939 | $ | 1,142 | $ | 19 | $ | 14 | $ | 9,399 |
June 30, 2013
|
|||||||||||||||||||
Commercial
|
Home
|
Residential
|
Lease
|
||||||||||||||||
Commercial
|
Real Estate
|
Construction
|
Equity
|
Real Estate
|
Financing
|
Consumer
|
Total
|
||||||||||||
(in thousands)
|
|||||||||||||||||||
Allowance for loan losses:
|
|||||||||||||||||||
Individually evaluated
|
|||||||||||||||||||
for impairment
|
$ 359
|
$ 758
|
$ 1,638
|
$ 129
|
$ 553
|
$ -
|
$ -
|
$ 3,437
|
|||||||||||
Collectively evaluated
|
|||||||||||||||||||
for impairment
|
1,196
|
1,769
|
1,054
|
601
|
558
|
21
|
19
|
5,218
|
|||||||||||
Total
|
$ 1,555
|
$ 2,527
|
$ 2,692
|
$ 730
|
$ 1,111
|
$ 21
|
$ 19
|
$ 8,655
|
|||||||||||
Loans:
|
|||||||||||||||||||
Individually evaluated for
|
|||||||||||||||||||
impairment
|
$ 14,746
|
$ 7,590
|
$ 13,503
|
$ 1,072
|
$ 4,010
|
$ -
|
$ 2
|
$ 40,923
|
|||||||||||
Collectively evaluated for
|
|||||||||||||||||||
impairment
|
104,689
|
125,714
|
33,579
|
44,340
|
42,606
|
9,512
|
6,702
|
367,142
|
|||||||||||
Total
|
$ 119,435
|
$ 133,304
|
$ 47,082
|
$ 45,412
|
$ 46,616
|
$ 9,512
|
$ 6,704
|
$408,065
|
|||||||||||
December 31, 2012
|
|||||||||||||||||||
Commercial
|
Home
|
Residential
|
Lease
|
||||||||||||||||
Commercial
|
Real Estate
|
Construction
|
Equity
|
Real Estate
|
Financing
|
Consumer
|
Total
|
||||||||||||
(in thousands)
|
|||||||||||||||||||
Allowance for loan losses:
|
|||||||||||||||||||
Individually evaluated for
|
|||||||||||||||||||
impairment
|
$ 550
|
$ 1,812
|
$ 564
|
$ 143
|
$ 331
|
$ -
|
$ -
|
$ 3,400
|
|||||||||||
Collectively evaluated for
|
|||||||||||||||||||
impairment
|
1,547
|
1,770
|
979
|
491
|
807
|
46
|
17
|
5,657
|
|||||||||||
Total
|
$ 2,097
|
$ 3,582
|
$ 1,543
|
$ 634
|
$ 1,138
|
$ 46
|
$ 17
|
$ 9,057
|
|||||||||||
Loans:
|
|||||||||||||||||||
Individually evaluated for
|
|||||||||||||||||||
impairment
|
$ 15,092
|
$ 9,437
|
$ 12,548
|
$ 1,315
|
$ 4,135
|
$ -
|
$ -
|
42,527
|
|||||||||||
Collectively evaluated for
|
|||||||||||||||||||
impairment
|
100,428
|
133,761
|
33,967
|
48,214
|
39,449
|
10,054
|
7,271
|
373,144
|
|||||||||||
Total
|
115,520
|
143,198
|
46,515
|
49,529
|
43,584
|
10,054
|
7,271
|
415,671
|
|
Pass – loans that exhibit acceptable financial performance cash flow, leverage and where the probability of default is considered low.
|
|
Classified – loans are inadequately protected by the current payment capacity of the obligor or by the collateral pledged. These loans are characterized by the distinct probability that the Company will sustain some loss or added expenses if the deficiencies are not corrected.
|
June 30, 2013
|
December 31, 2012
|
December 31, 2012
|
|||||||||||||||||||||||||||||||||||
Pass
|
Classified
|
Total
|
Pass
|
Classified
|
Total
|
Pass
|
Classified
|
Total
|
|||||||||||||||||||||||||||||
(in thousands)
|
|||||||||||||||||||||||||||||||||||||
Commercial
|
$ | 116,833 | $ | 2,602 | $ | 119,435 | $ | 112,679 | $ | 2,841 | $ | 115,520 | $ | 119,622 | $ | 3,627 | $ | 123,249 | |||||||||||||||||||
Commercial real estate
|
128,043 | 5,261 | 133,304 | 136,397 | 6,801 | 143,198 | 139,733 | 7,586 | 147,319 | ||||||||||||||||||||||||||||
Construction
|
35,061 | 12,021 | 47,082 | 35,589 | 10,926 | 46,515 | 39,707 | 12,047 | 51,754 | ||||||||||||||||||||||||||||
Home equity
|
45,176 | 236 | 45,412 | 49,299 | 230 | 49,529 | 54,579 | 1,960 | 56,539 | ||||||||||||||||||||||||||||
Residential real estate
|
43,562 | 3,054 | 46,616 | 41,228 | 2,356 | 43,584 | 40,131 | 2,219 | 42,349 | ||||||||||||||||||||||||||||
Lease financing
|
9,512 | - | 9,512 | 10,054 | - | 10,054 | 1,171 | 301 | 1,472 | ||||||||||||||||||||||||||||
Consumer
|
6,704 | - | 6,704 | 7,271 | - | 7,271 | 6,636 | 10 | 6,646 | ||||||||||||||||||||||||||||
Total
|
$ | 384,891 | $ | 23,174 | $ | 408,065 | $ | 392,517 | $ | 23,154 | $ | 415,671 | $ | 401,578 | $ | 27,750 | $ | 429,328 |
June 30, 2013
|
||||||||||||||||||||||||||||
Total Loans >
|
||||||||||||||||||||||||||||
30-59 Days
|
60-89 Days
|
Greater than
|
Total Past
|
Total Loans
|
90 Days and
|
|||||||||||||||||||||||
(in thousands)
|
Past Due
|
Past Due
|
90 Days
|
Due
|
Current
|
Receivable
|
Accruing
|
|||||||||||||||||||||
Commercial
|
$ | 105 | $ | 29 | $ | 101 | $ | 234 | $ | 119,201 | $ | 119,435 | - | |||||||||||||||
Commercial real estate
|
- | - | - | - | 133,304 | 133,304 | - | |||||||||||||||||||||
Construction
|
- | - | 910 | 910 | 46,172 | 47,082 | - | |||||||||||||||||||||
Home equity
|
8 | - | - | 8 | 45,404 | 45,412 | - | |||||||||||||||||||||
Residential real estate
|
229 | 185 | 1,345 | 1,759 | 44,857 | 46,616 | - | |||||||||||||||||||||
Lease financing
|
- | - | - | - | 9,512 | 9,512 | - | |||||||||||||||||||||
Consumer
|
- | - | - | - | 6,704 | 6,704 | - | |||||||||||||||||||||
Total
|
$ | 342 | $ | 213 | $ | 2,356 | $ | 2,911 | $ | 405,154 | $ | 408,065 | - | |||||||||||||||
December 31, 2012
|
||||||||||||||||||||||||||||
Commercial
|
$ | 110 | $ | - | $ | 365 | $ | 475 | $ | 115,045 | $ | 115,520 | - | |||||||||||||||
Commercial real estate
|
- | - | - | - | 143,198 | 143,198 | - | |||||||||||||||||||||
Construction
|
- | - | 910 | 910 | 45,605 | 46,515 | - | |||||||||||||||||||||
Home equity
|
- | - | - | - | 49,529 | 49,529 | - | |||||||||||||||||||||
Residential real estate
|
766 | 605 | 569 | 1,940 | 41,644 | 43,584 | - | |||||||||||||||||||||
Lease financing
|
- | - | - | - | 10,054 | 10,054 | - | |||||||||||||||||||||
Consumer
|
- | - | - | - | 7,271 | 7,271 | - | |||||||||||||||||||||
Total
|
$ | 876 | $ | 605 | $ | 1,844 | $ | 3,325 | $ | 412,346 | $ | 415,671 | - |
June 30, 2013
|
||||||||||||||||||||
(in thousands)
|
Recorded Balance
|
Unpaid Principal Balance
|
Specific Allowance
|
Average Investment in Impaired Loans
|
Interest Income Recognized
|
|||||||||||||||
Loans without a specific valuation allowance:
|
||||||||||||||||||||
Commercial
|
$ | 620 | $ | 670 | $ | - | $ | 959 | $ | 14 | ||||||||||
Commercial real estate
|
509 | 509 | - | 513 | 18 | |||||||||||||||
Construction
|
1,677 | 1,677 | - | 1,680 | 24 | |||||||||||||||
Home equity
|
- | - | - | - | - | |||||||||||||||
Residential real estate
|
3,287 | 3,465 | - | 3,261 | 73 | |||||||||||||||
Lease financing
|
204 | 204 | - | 226 | 7 | |||||||||||||||
Consumer
|
- | - | - | - | - | |||||||||||||||
Loans with a specific valuation allowance:
|
||||||||||||||||||||
Commercial
|
$ | 555 | $ | 578 | $ | 175 | $ | 592 | $ | 9 | ||||||||||
Commercial real estate
|
1,537 | 1,568 | 954 | 1,526 | - | |||||||||||||||
Construction
|
2,250 | 2,250 | 142 | 8,601 | 231 | |||||||||||||||
Home equity
|
175 | 176 | 69 | 174 | - | |||||||||||||||
Residential real estate
|
1,124 | 1,171 | 538 | 1,508 | 1 | |||||||||||||||
Lease financing
|
- | - | - | - | - | |||||||||||||||
Consumer
|
- | - | - | - | - | |||||||||||||||
Total:
|
||||||||||||||||||||
Commercial
|
$ | 1,175 | $ | 1,248 | $ | 175 | $ | 1,551 | $ | 23 | ||||||||||
Commercial real estate
|
$ | 2,046 | $ | 2,077 | $ | 954 | $ | 2,039 | $ | 18 | ||||||||||
Construction
|
$ | 3,927 | $ | 3,927 | $ | 142 | $ | 10,281 | $ | 255 | ||||||||||
Home equity
|
$ | 175 | $ | 176 | $ | 69 | $ | 174 | $ | - | ||||||||||
Residential real estate
|
$ | 4,411 | $ | 4,636 | $ | 538 | $ | 4,770 | $ | 75 | ||||||||||
Lease financing
|
$ | 204 | $ | 204 | $ | - | $ | 226 | $ | 7 | ||||||||||
Consumer
|
$ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
Total
|
$ | 11,938 | $ | 12,268 | $ | 1,878 | $ | 19,041 | $ | 377 |
December 31, 2012
|
||||||||||||||||||||
(in thousands)
|
Recorded Balance
|
Unpaid Principal Balance
|
Specific Allowance
|
Average Investment in Impaired Loans
|
Interest Income Recognized
|
|||||||||||||||
Loans without a specific valuation allowance:
|
||||||||||||||||||||
Commercial
|
$ | 877 | $ | 916 | $ | - | $ | 694 | $ | 106 | ||||||||||
Commercial real estate
|
521 | 521 | - | 1,798 | 71 | |||||||||||||||
Construction
|
1,684 | 1,684 | - | 1,699 | 40 | |||||||||||||||
Home equity
|
- | - | - | 287 | 4 | |||||||||||||||
Residential real estate
|
1,201 | 1,336 | - | 847 | 57 | |||||||||||||||
Lease financing
|
233 | 233 | - | 169 | 16 | |||||||||||||||
Consumer
|
- | - | - | - | - | |||||||||||||||
Loans with a specific valuation allowance:
|
||||||||||||||||||||
Commercial
|
$ | 643 | $ | 657 | $ | 241 | $ | 2,240 | $ | 42 | ||||||||||
Commercial real estate
|
1,537 | 1,567 | 1,000 | 2,741 | 49 | |||||||||||||||
Construction
|
10,016 | 10,016 | 490 | 10,915 | 466 | |||||||||||||||
Home equity
|
175 | 176 | 81 | 1,919 | - | |||||||||||||||
Residential real estate
|
3,332 | 3,376 | 1,262 | 3,016 | 183 | |||||||||||||||
Lease financing
|
- | - | - | 100 | - | |||||||||||||||
Consumer
|
- | - | - | - | - | |||||||||||||||
Total:
|
||||||||||||||||||||
Commercial
|
$ | 1,520 | $ | 1,573 | $ | 241 | $ | 2,934 | $ | 148 | ||||||||||
Commercial real estate
|
$ | 2,058 | $ | 2,088 | $ | 1,000 | $ | 4,539 | $ | 120 | ||||||||||
Construction
|
$ | 11,700 | $ | 11,700 | $ | 490 | $ | 12,614 | $ | 506 | ||||||||||
Home equity
|
$ | 175 | $ | 176 | $ | 81 | $ | 2,206 | $ | 4 | ||||||||||
Residential real estate
|
$ | 4,533 | $ | 4,712 | $ | 1,262 | $ | 3,863 | $ | 240 | ||||||||||
Lease financing
|
$ | 233 | $ | 233 | $ | - | $ | 269 | $ | 16 | ||||||||||
Consumer
|
$ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
Total
|
$ | 20,219 | $ | 20,482 | $ | 3,074 | $ | 26,425 | $ | 1,034 |
June 30, 2013
|
December 31, 2012
|
|||
(in thousands)
|
||||
Commercial
|
$ 890
|
$ 1,131
|
||
Commercial real estate
|
1,511
|
1,537
|
||
Construction
|
910
|
910
|
||
Home equity
|
171
|
175
|
||
Residential real estate
|
1,942
|
1,084
|
||
Lease financing
|
-
|
-
|
||
Consumer
|
-
|
-
|
||
$ 5,425
|
$ 4,837
|
June 30, 2013
|
December 31, 2012
|
|||||||||||||||||||||||
Number of Loans
|
Pre-Modification Outstanding Recorded Balance
|
Post-Modification Outstanding Recorded Balance
|
Number of Loans
|
Pre-Modification Outstanding Recorded Balance
|
Post-Modification Outstanding Recorded Balance
|
|||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||
Commercial
|
- | $ | - | $ | - | 1 | $ | 85 | $ | 85 | ||||||||||||||
Commercial real estate
|
- | - | - | - | - | - | ||||||||||||||||||
Construction
|
- | - | - | - | - | - | ||||||||||||||||||
Home equity
|
- | - | - | - | - | - | ||||||||||||||||||
Residential real estate
|
- | - | - | 1 | 371 | 371 | ||||||||||||||||||
Lease financing
|
- | - | - | - | - | - | ||||||||||||||||||
Consumer
|
- | - | - | - | - | - | ||||||||||||||||||
- | $ | - | $ | - | 2 | $ | 456 | $ | 456 |
June 30, 2013
|
December 31, 2012
|
||||||
(in thousands)
|
|||||||
FHLBank advances (A)
|
$ 82,500
|
$ 82,500
|
|||||
Less: Deferred prepayment penalty on modification of FHLB advances
|
(639)
|
(977)
|
|||||
Net FHLBank advances
|
81,861
|
81,523
|
|||||
Subordinated Debentures – BVBC Capital Trust II (B)
|
7,732
|
7,732
|
|||||
Subordinated Debentures – BVBC Capital Trust III (C)
|
11,856
|
11,856
|
|||||
Total long-term debt
|
$ 101,449
|
$ 101,111
|
(A)
|
Due in 2013, 2014, 2015, 2016 and 2018; collateralized by various assets including mortgage-backed loans and available for sale securities. The interest rates on the advances range from 0.37% to 4.26%. Federal Home Loan Bank advance availability is determined quarterly and at June 30, 2013, approximately $6,952,216 was available.
|
||||||
In the third quarter of 2010, the Company repaid $42,500,000 of FHLB advances by rolling the net present value of the advances being repaid into the funding cost of $42,500,000 of new advances. A $2,569,000 penalty was associated with paying off the original FHLB advances which will be amortized as an adjustment of interest expense over the remaining term of the new FHLB advances using the straight line method. This transaction reduced the effective interest rate, as well as modified the maturity date on these borrowings.
|
|||||||
(B)
|
Due in 2033; interest only at LIBOR + 3.25% (3.52% at June 30, 2013 and 3.56% at December 31, 2012) due quarterly; fully and unconditionally guaranteed by the Company on a subordinated basis to the extent that the funds are held by the Trust. BVBC Capital Trust II issued and sold $7,500,000 in Capital Securities to third parties and $232,000 of Common Securities to the Company. The Company may prepay the subordinated debentures beginning in 2008, in whole or in part, at their face value plus accrued interest.
|
||||||
(C)
|
Due in 2035; interest only at LIBOR + 1.60% (1.87% at June 30, 2013 and 1.91% at December 31, 2012) due quarterly; fully and unconditionally guaranteed by the Company on a subordinated basis to the extent that the funds are held by the Trust. BVBC Capital Trust III issued and sold $11,500,000 in Preferred Securities to third parties and $356,000 in Common Securities to the Company. Subordinated to the trust preferred securities (B) due in 2033. The Company may prepay the subordinated debentures, in whole or in part, at their face value plus accrued interest.
|
||||||
(in thousands)
|
||||
July 1 to December 31, 2013
|
$ | 20,000 | ||
2014
|
7,500 | |||
2015
|
20,000 | |||
2016
|
10,000 | |||
2017
|
- | |||
Thereafter
|
44,588 | |||
102,088 | ||||
Less: Deferred prepayment penalty on modification of FHLB advances
|
(639 | ) | ||
$ | 101,449 |
Level 1
|
Quoted prices in active markets for identical assets or liabilities
|
|
Level 2
|
Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
|
|
Level 3
|
Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
|
Fair Value Measurements Using
|
||||||||||||||||
Quoted Prices in Active Markets for Identical Assets
|
Significant Other Observable Inputs
|
Unobservable Inputs
|
||||||||||||||
Fair Value
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
|||||||||||||
(in thousands)
|
||||||||||||||||
June 30, 2013:
|
||||||||||||||||
Assets:
|
||||||||||||||||
Available-for-sale securities:
|
||||||||||||||||
U.S. Government sponsored agencies
|
$ | 61,133 | $ | - | $ | 61,133 | $ | - | ||||||||
Municipal securities
|
15,946 | - | 15,946 | - | ||||||||||||
U.S Government sponsored agency mortgage backed securities
|
5,015 | - | 5,015 | - | ||||||||||||
U.S Small Business Administration loan pool certificates
|
5,175 | - | 5,175 | - | ||||||||||||
Equity and other securities
|
599 | 599 | - | - | ||||||||||||
Mortgage loans held for sale
|
5,956 | - | 5,956 | - | ||||||||||||
Commitments to originate loans
|
- | - | - | - | ||||||||||||
Forward sales commitments
|
292 | - | - | 292 | ||||||||||||
Total assets
|
$ | 94,116 | $ | 599 | $ | 93,225 | $ | 292 | ||||||||
Liabilities:
|
||||||||||||||||
Commitments to originate loans
|
$ | - | $ | - | $ | - | $ | - | ||||||||
Forward sales commitments
|
- | - | - | - | ||||||||||||
Total liabilities
|
$ | - | $ | - | $ | - | $ | - | ||||||||
December 31, 2012:
|
||||||||||||||||
Assets:
|
||||||||||||||||
Available-for-sale securities:
|
||||||||||||||||
U.S. Government sponsored agencies
|
$ | 63,148 | $ | - | $ | 63,148 | $ | - | ||||||||
Municipal securities
|
14,074 | - | 14,074 | - | ||||||||||||
Equity and other securities
|
623 | 623 | - | - | ||||||||||||
Mortgage loans held for sale
|
7,621 | - | 7,621 | - | ||||||||||||
Commitments to originate loans
|
- | - | - | - | ||||||||||||
Forward sales commitments
|
184 | - | - | 184 | ||||||||||||
Total assets
|
$ | 85,650 | $ | 623 | $ | 84,843 | $ | 184 | ||||||||
Liabilities:
|
||||||||||||||||
Commitments to originate loans
|
$ | - | $ | - | $ | - | $ | - | ||||||||
Forward sales commitments
|
1 | - | - | 1 | ||||||||||||
Total liabilities
|
$ | 1 | $ | - | $ | - | $ | 1 |
Commitments to Originate Loans
|
Forward Sales Commitments
|
|||||||
(in thousands)
|
||||||||
Balance as of December 31, 2012
|
$ | - | $ | 183 | ||||
Total realized and unrealized gains (losses)
|
||||||||
Included in net income
|
- | 109 | ||||||
Balance as of June 30, 2013
|
$ | - | $ | 292 | ||||
Balance as of December 31, 2011
|
$ | 7 | $ | 100 | ||||
Total realized and unrealized gains (losses)
|
||||||||
Included in net income
|
(3 | ) | (53 | ) | ||||
Balance as of June 30, 2012
|
$ | 4 | $ | 47 |
Fair Value Measurements Using
|
||||||||||||||||
Fair Value
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
Significant Other Observable Inputs (Level 2)
|
Unobservable Inputs (Level 3)
|
|||||||||||||
(in thousands)
|
||||||||||||||||
June 30, 2013:
|
||||||||||||||||
Impaired loans, net of reserves
|
$ | 917 | $ | - | $ | - | $ | 917 | ||||||||
Foreclosed assets held for sale, net
|
8,712 | - | - | 8,712 | ||||||||||||
Total
|
$ | 9,629 | $ | - | $ | - | $ | 9,629 | ||||||||
December 31, 2012:
|
||||||||||||||||
Impaired loans, net of reserves
|
$ | 5,480 | $ | - | $ | - | $ | 5,480 | ||||||||
Foreclosed assets held for sale, net
|
17,894 | - | - | 17,894 | ||||||||||||
Total
|
$ | 23,374 | $ | - | $ | - | $ | 23,374 | ||||||||
Fair Value at June 30, 2013
|
Valuation Technique
|
Unobservable Inputs
|
Range (Weighted Average)
|
|||||||
Forward sales commitments
|
$ | 292 |
Market comparable
|
Quoted prices for similar loans
|
2.75%-4.125% | |||||
prices
|
(3.32%) | |||||||||
Collateral-dependent
|
$ | 917 |
Market comparable
|
Quoted prices for similar loans
|
9.00%-85.00% | |||||
impaired loans
|
properties
|
(25.00%) | ||||||||
Foreclosed assets held for
|
$ | 8,712 |
Market comparable
|
Comparability adjustments (%)
|
Not available
|
|||||
sale, net
|
properties
|
|||||||||
June 30, 2013
|
December 31, 2012
|
|||||||||||||||
Carrying Amount
|
Fair Value
|
Carrying Amount
|
Fair Value
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Financial assets:
|
||||||||||||||||
Cash and cash equivalents (Level 1)
|
$ | 81,366 | $ | 81,366 | $ | 101,077 | $ | 101,077 | ||||||||
Loans, net of allowance for loan losses (Level 3)
|
399,410 | 402,500 | 406,614 | 408,041 | ||||||||||||
FHLBank stock, Federal Reserve
|
||||||||||||||||
Bank stock, and other securities (Level 3)
|
7,608 | 7,608 | 7,540 | 7,540 | ||||||||||||
Interest receivable (Level 3)
|
1,537 | 1,537 | 1,529 | 1,529 | ||||||||||||
Financial liabilities:
|
||||||||||||||||
Deposits (Level 3)
|
452,169 | 454,199 | 484,466 | 487,059 | ||||||||||||
Securities sold under agreement to repurchase
|
||||||||||||||||
and other interest-bearing liabilities (Level 3)
|
34,631 | 34,631 | 21,668 | 21,668 | ||||||||||||
Long-term debt (Level 3)
|
101,449 | 94,091 | 101,111 | 95,216 | ||||||||||||
Interest payable (Level 3)
|
4,652 | 4,652 | 4,166 | 4,166 | ||||||||||||
Unrecognized financial instruments
|
||||||||||||||||
(net of amortization):
|
||||||||||||||||
Commitments to extend credit (Level 3)
|
- | - | - | - | ||||||||||||
Letters of credit (Level 3)
|
- | - | - | - | ||||||||||||
Lines of credit (Level 3)
|
- | - | - | - | ||||||||||||
2012
|
2011
|
|||||||
Cash and due from banks
|
$ | 33,353 | $ | 23,480 | ||||
Interest bearing deposits in other financial institutions
|
67,724 | 76,419 | ||||||
Federal funds sold
|
– | – | ||||||
Cash and cash equivalents
|
101,077 | 99,899 | ||||||
Available-for-sale securities
|
77,845 | 61,790 | ||||||
Mortgage loans held for sale, fair value
|
7,621 | 5,686 | ||||||
Loans, net of allowance for loan losses of $9,057 and $13,189 in 2012 and 2011, respectively
|
406,614 | 425,654 | ||||||
Premises and equipment, net
|
15,448 | 15,897 | ||||||
Foreclosed assets held for sale, net
|
31,936 | 29,246 | ||||||
Interest receivable
|
1,529 | 1,573 | ||||||
Deferred income taxes
|
1,121 | 911 | ||||||
Prepaid expenses and other assets
|
6,095 | 6,106 | ||||||
Federal Home Loan Bank stock, Federal Reserve Bank stock, and
other securities
|
7,540 | 7,369 | ||||||
Core deposit intangible asset, at amortized cost
|
179 | 321 | ||||||
Total assets
|
$ | 657,005 | $ | 654,452 |
2012
|
2011
|
|||||||
LIABILITIES
|
||||||||
Deposits
|
||||||||
Demand
|
$ | 113,698 | $ | 100,842 | ||||
Savings, NOW and money market
|
235,632 | 222,984 | ||||||
Time
|
135,136 | 166,587 | ||||||
Total deposits
|
484,466 | 490,413 | ||||||
Other interest-bearing liabilities
|
21,668 | 15,372 | ||||||
Long-term debt
|
101,111 | 100,434 | ||||||
Interest payable and other liabilities
|
9,945 | 7,778 | ||||||
Total liabilities
|
617,190 | 613,997 | ||||||
STOCKHOLDERS’ EQUITY
|
||||||||
Capital stock
|
||||||||
Preferred stock, $1 par value, $1,000 liquidation preference
Authorized 15,000,000 shares; issued and outstanding
2012 – 21,750 shares; 2011 – 21,750 shares
|
22 | 22 | ||||||
Common stock, par value $1 per share;
Authorized 15,000,000 shares; issued and outstanding
2012 – 2,934,123 shares; 2011 – 2,879,158 shares
|
2,934 | 2,879 | ||||||
Additional paid-in capital
|
38,746 | 38,511 | ||||||
Accumulated deficit
|
(1,930 | ) | (1,091 | ) | ||||
Accumulated other comprehensive income, net of income tax of
$29 in 2012 and $89 in 2011
|
43 | 134 | ||||||
Total stockholders’ equity
|
39,815 | 40,455 | ||||||
Total liabilities and stockholders’ equity
|
$ | 657,005 | $ | 654,452 | ||||
2012
|
2011
|
2010
|
||||||||||
INTEREST AND DIVIDEND INCOME
|
||||||||||||
Interest and fees on loans
|
$ | 22,853 | $ | 25,277 | $ | 28,011 | ||||||
Federal funds sold and other short-term investments
|
193 | 151 | 245 | |||||||||
Available-for-sale securities
|
1,097 | 1,202 | 1,825 | |||||||||
Dividends on Federal Home Loan Bank and
Federal Reserve Bank stock
|
240 | 225 | 222 | |||||||||
Total interest and dividend income
|
24,383 | 26,855 | 30,303 | |||||||||
INTEREST EXPENSE
|
||||||||||||
Interest-bearing demand deposits
|
700 | 1,611 | 2,343 | |||||||||
Savings and money market deposit accounts
|
291 | 346 | 438 | |||||||||
Other time deposits
|
2,487 | 3,755 | 7,746 | |||||||||
Federal funds purchased and other interest-bearing liabilities
|
44 | 41 | 45 | |||||||||
Long-term debt, net
|
3,670 | 3,502 | 3,791 | |||||||||
Total interest expense
|
7,192 | 9,255 | 14,363 | |||||||||
NET INTEREST INCOME
|
17,191 | 17,600 | 15,940 | |||||||||
PROVISION FOR LOAN LOSSES
|
1,200 | 3,300 | 3,095 | |||||||||
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES
|
15,991 | 14,300 | 12,845 | |||||||||
NON-INTEREST INCOME
|
||||||||||||
Loans held for sale fee income
|
2,447 | 2,120 | 3,506 | |||||||||
NSF charges and service fees
|
980 | 944 | 1,062 | |||||||||
Other service charges
|
2,472 | 2,276 | 2,021 | |||||||||
Realized gains on available-for-sale securities
|
– | – | 885 | |||||||||
Other income
|
1,535 | 984 | 1,145 | |||||||||
Total non-interest income
|
7,434 | 6,324 | 8,619 | |||||||||
NON-INTEREST EXPENSE
|
||||||||||||
Salaries and employee benefits
|
10,587 | 10,955 | 11,753 | |||||||||
Net occupancy expense
|
2,568 | 2,599 | 2,756 | |||||||||
Foreclosed assets expense
|
2,647 | 5,219 | 2,708 | |||||||||
Other operating expense
|
7,506 | 7,851 | 8,550 | |||||||||
Total non-interest expense
|
23,308 | 26,624 | 25,767 | |||||||||
INCOME (LOSS) BEFORE INCOME TAXES
|
117 | (6,000 | ) | (4,303 | ) | |||||||
PROVISION (BENEFIT) FOR INCOME TAXES
|
||||||||||||
Provision (benefit) for income taxes
|
50 | (2,777 | ) | (1,561 | ) | |||||||
Valuation allowance for deferred tax asset
|
(200 | ) | 12,600 | – | ||||||||
Total provision (benefit) for income taxes
|
(150 | ) | 9,823 | (1,561 | ) | |||||||
NET INCOME (LOSS)
|
267 | (15,823 | ) | (2,742 | ) | |||||||
DIVIDENDS AND ACCRETION ON PREFERRED STOCK
|
1,106 | 1,106 | 1,105 | |||||||||
NET LOSS AVAILABLE TO COMMON SHAREHOLDERS
|
$ | (839 | ) | $ | (16,929 | ) | $ | (3,847 | ) | |||
BASIC LOSS PER SHARE
|
$ | (0.29 | ) | $ | (6.03 | ) | $ | (1.38 | ) | |||
DILUTED LOSS PER SHARE
|
$ | (0.29 | ) | $ | (6.03 | ) | $ | (1.38 | ) |
2012
|
2011
|
2010
|
||||||||||
NET INCOME (LOSS)
|
$ | 267 | $ | (15,823 | ) | $ | (2,742 | ) | ||||
OTHER COMPREHENSIVE INCOME (LOSS)
|
||||||||||||
Change in unrealized appreciation on available-for-sale securities, net of income taxes (credit) of $(60) in 2012, $69 in 2011 and $305 in 2010
|
(91 | ) | 104 | 458 | ||||||||
Less: reclassification adjustment for realized gains (losses) included in net loss, net of income tax credit of $354 in 2010
|
– | – | (531 | ) | ||||||||
Comprehensive income (loss)
|
176 | (15,719 | ) | (2,815 | ) |
Retained
|
Accumulated
|
|||||||||||||||||||||||
Additional
|
Earnings
|
Other
|
||||||||||||||||||||||
Preferred
|
Common
|
Paid-In
|
(Accumulated
|
Comprehensive
|
||||||||||||||||||||
Stock
|
Stock
|
Capital
|
Deficit)
|
Income (Loss)
|
Total
|
|||||||||||||||||||
BALANCE, DECEMBER 31, 2009
|
$ | 22 | $ | 2,818 | $ | 37,975 | $ | 19,685 | $ | 103 | $ | 60,603 | ||||||||||||
Issuance of 29,640 shares of restricted stock, net of forfeitures of 7,454
|
22 | 406 | 428 | |||||||||||||||||||||
Issuance of 3,645 shares of common stock for the employee stock purchase plan
|
3 | 32 | 35 | |||||||||||||||||||||
Net loss
|
(2,742 | ) | (2,742 | ) | ||||||||||||||||||||
Accretion of discount on preferred shares
|
18 | (18 | ) | – | ||||||||||||||||||||
Dividend on preferred shares
|
(1,087 | ) | (1,087 | ) | ||||||||||||||||||||
Change in unrealized appreciation on available-for-sale securities, net of income taxes (credit) of $(49)
|
(73 | ) | (73 | ) | ||||||||||||||||||||
BALANCE, DECEMBER 31, 2010
|
$ | 22 | $ | 2,843 | $ | 38,431 | $ | 15,838 | $ | 30 | $ | 57,164 | ||||||||||||
Issuance of 40,666 shares of restricted stock, net of forfeitures of 7,437
|
33 | 44 | 77 | |||||||||||||||||||||
Issuance of 2,628 shares of common stock for the employee stock purchase plan
|
3 | 18 | 21 | |||||||||||||||||||||
Net loss
|
(15,823 | ) | (15,823 | ) | ||||||||||||||||||||
Accretion of discount on preferred shares
|
18 | (18 | ) | – | ||||||||||||||||||||
Dividend on preferred shares
|
(1,088 | ) | (1,088 | ) | ||||||||||||||||||||
Change in unrealized appreciation on available-for-sale securities, net of income taxes of $69
|
104 | 104 | ||||||||||||||||||||||
BALANCE, DECEMBER 31, 2011
|
$ | 22 | $ | 2,879 | $ | 38,511 | $ | (1,091 | ) | $ | 134 | $ | 40,455 | |||||||||||
Issuance of 55,155 shares of restricted stock, net of forfeitures of 6,698
|
48 | 197 | 245 | |||||||||||||||||||||
Issuance of 6,508 shares of common stock for the employee stock purchase plan
|
7 | 20 | 27 | |||||||||||||||||||||
Net income
|
267 | 267 | ||||||||||||||||||||||
Accretion of discount on preferred shares
|
18 | (18 | ) | – | ||||||||||||||||||||
Dividend on preferred shares
|
(1,088 | ) | (1,088 | ) | ||||||||||||||||||||
Change in unrealized appreciation on available-for-sale securities, net of income taxes (credit) of $(60)
|
(91 | ) | (91 | ) | ||||||||||||||||||||
BALANCE, DECEMBER 31, 2012
|
$ | 22 | $ | 2,934 | $ | 38,746 | $ | (1,930 | ) | $ | 43 | $ | 39,815 |
2012
|
2011
|
2010
|
||||||||||
OPERATING ACTIVITIES
|
||||||||||||
Net income (loss)
|
$ | 267 | $ | (15,823 | ) | $ | (2,742 | ) | ||||
Adjustments to reconcile net income (loss) to net cash provided
by operating activities:
|
||||||||||||
Depreciation and amortization
|
1,686 | 1,661 | 1,298 | |||||||||
Accretion, net of amortization of premiums and discounts on available-for-sale securities
|
(14 | ) | (62 | ) | (73 | ) | ||||||
Provision for loan losses
|
1,200 | 3,300 | 3,095 | |||||||||
Provision for losses on foreclosed assets held for sale
|
867 | 3,159 | 734 | |||||||||
Deferred income taxes
|
(150 | ) | 9,823 | (1,561 | ) | |||||||
Stock dividends on FHLBank (FHLB) stock
|
(124 | ) | (106 | ) | (104 | ) | ||||||
Increase in value of bank owned life insurance
|
(170 | ) |
─
|
─
|
||||||||
Net realized gains on available-for-sale securities
|
─
|
─
|
(885 | ) | ||||||||
Net gain on sale of foreclosed assets
|
(337 | ) | (555 | ) | (168 | ) | ||||||
Restricted stock earned and forfeited
|
245 | 77 | 428 | |||||||||
Compensation expense related to the Employee Stock Purchase Plan
|
3 | 4 | 3 | |||||||||
Originations of loans held for sale
|
(83,477 | ) | (66,014 | ) | (135,930 | ) | ||||||
Proceeds from the sale of loans held for sale
|
81,540 | 68,668 | 136,487 | |||||||||
Realized (gain) loss on loans held for sale fair value adjustment
|
2 | (178 | ) | 33 | ||||||||
Changes in:
|
||||||||||||
Interest receivable
|
44 | 210 | 520 | |||||||||
Net fair value of loan related commitments
|
(92 | ) | 257 | (128 | ) | |||||||
Income taxes receivable
|
─
|
─
|
2,746 | |||||||||
Prepaid expenses and other assets
|
270 | (172 | ) | 981 | ||||||||
Interest payable and other liabilities
|
1,077 | 490 | 116 | |||||||||
Net cash provided by operating activities
|
2,837 | 4,739 | 4,850 | |||||||||
INVESTING ACTIVITIES
|
||||||||||||
Net change in loans
|
5,666 | 28,561 | 42,909 | |||||||||
Proceeds from sale of loan participations
|
2,675 | 2,854 | 32 | |||||||||
Purchase of premises and equipment
|
(417 | ) | (499 | ) | (226 | ) | ||||||
Proceeds from the sale of foreclosed assets, net of expenses
|
6,281 | 5,638 | 9,077 | |||||||||
Purchases of available-for-sale securities
|
(107,192 | ) | (64,915 | ) | (134,932 | ) | ||||||
Proceeds from maturities of available-for-sale securities
|
91,000 | 67,000 | 115,000 | |||||||||
Proceeds from sale of available-for-sale securities
|
─
|
─
|
29,885 | |||||||||
Purchases of bank owned life insurance
|
─
|
(4,000 | ) |
─
|
||||||||
Purchases of FHLB and Federal Reserve Bank stock
and other securities
|
(79 | ) | (100 | ) |
─
|
|||||||
Proceeds from the redemption of FHLB stock, Federal Reserve Bank stock, and other securities
|
31 |
─
|
─
|
|||||||||
Net cash provided by (used in) investing activities
|
(2,035 | ) | 34,539 | 61,745 | ||||||||
FINANCING ACTIVITIES
|
||||||||||||
Net increase in demand deposits, money market, NOW and savings accounts
|
25,504 | 4,444 | 23,979 | |||||||||
Net decrease in time deposits
|
(31,451 | ) | (55,249 | ) | (72,871 | ) | ||||||
Net increase (decrease) in federal funds purchased and other interest-bearing liabilities
|
6,296 | (3,376 | ) | 2,628 | ||||||||
Repayments of long-term debt
|
─
|
─
|
(42,500 | ) | ||||||||
Proceeds from long-term debt
|
─
|
─
|
42,500 | |||||||||
Prepayment penalty on modification of FHLB advances
|
─
|
─
|
(2,569 | ) | ||||||||
Net proceeds from the sale of stock through Employee Stock Purchase Plan
|
27 | 21 | 35 | |||||||||
Net cash provided by (used in) financing activities
|
376 | (54,160 | ) | (48,798 | ) | |||||||
Increase (decrease) in cash and cash equivalents
|
1,178 | (14,882 | ) | 17,797 | ||||||||
Cash and cash equivalents, beginning of year
|
99,899 | 114,781 | 96,984 | |||||||||
CASH AND CASH EQUIVALENTS, END OF YEAR
|
$ | 101,077 | $ | 99,899 | $ | 114,781 |
2012
|
2011
|
2010
|
SUPPLEMENTAL CASH FLOWS INFORMATION
|
||||||||||||
Cash paid during the year for:
|
||||||||||||
Interest
|
$ | 6,254 | $ | 8,717 | $ | 14,372 | ||||||
Income taxes, net of refunds
|
$ ─
|
$ | 1 | $ | (2,750 | ) | ||||||
Noncash investing and financing activities:
|
||||||||||||
Transfer of loans to foreclosed property, net of specific allowance
|
$ | 10,518 | $ | 17,354 | $ | 10,352 | ||||||
Restricted stock issued
|
$ | 48 | $ | 33 | $ | 22 | ||||||
Preferred dividends accrued but not paid
|
$ | 1,088 | $ | 1,088 | $ | 1,087 | ||||||
Sale and financing of foreclosed assets
|
$ | 1,018 | $ | 268 | $ | 819 |
Buildings and improvements
|
35-40 years
|
Furniture and equipment
|
3-10 years
|
|
Transfers of Financial Assets
|
|
Transfers between Fair Value Hierarchy Levels
|
2012
|
2011
|
2010
|
||||||||||
(In thousands, except share and per share data)
|
||||||||||||
Net Income (loss)
|
$ | 267 | $ | (15,823 | ) | $ | (2,742 | ) | ||||
Dividends and accretion on preferred stock
|
(1,106 | ) | (1,106 | ) | (1,105 | ) | ||||||
Net loss available to common shareholders
|
$ | (839 | ) | $ | (16,929 | ) | $ | (3,847 | ) | |||
Average common shares outstanding
|
2,855,566 | 2,806,299 | 2,773,039 | |||||||||
Average common share stock options outstanding and restricted stock (B)
|
11,997 | 21,589 | 15,115 | |||||||||
Average diluted common shares (B)
|
2,867,563 | 2,827,888 | 2,788,154 | |||||||||
Basic loss per share
|
$ | (0.29 | ) | $ | (6.03 | ) | $ | (1.38 | ) | |||
Diluted loss per share (A)
|
$ | (0.29 | ) | $ | (6.03 | ) | $ | (1.38 | ) | |||
(A)No shares of stock options, restricted stock or warrants were included in the computation of diluted earnings per share for any period there was a loss.
|
||||||||||||
(B)Warrants to purchase 111,083 shares of common stock at an exercise price of $29.37 per share were outstanding at December 31, 2012, 2011 and 2010, but were not included in the computation of diluted earnings per share because the warrant’s exercise price was greater than the average market price of the common shares, thus making the warrants anti-dilutive. Stock options to purchase 0, 10,575, and 24,375 shares of common stock were outstanding at December 31, 2012, 2011 and 2010 respectively, but were not included in the computation of diluted earnings per share because the option’s exercise price was greater than the average market price of the common shares, thus making the options anti-dilutive.
|
December 31, 2012
|
||||||||||||||||
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair Value
|
|||||||||||||
(In thousands)
|
||||||||||||||||
U.S. Government sponsored agencies
|
$ | 63,123 | $ | 68 | $ | (43 | ) | $ | 63,148 | |||||||
Municipal securities
|
14,051 | 176 | (153 | ) | 14,074 | |||||||||||
Equity and other securities
|
600 | 23 | – | 623 | ||||||||||||
$ | 77,774 | $ | 267 | $ | (196 | ) | $ | 77,845 |
December 31, 2011
|
||||||||||||||||
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair Value
|
|||||||||||||
(In thousands)
|
||||||||||||||||
U.S. Government sponsored agencies
|
$ | 60,967 | $ | 228 | $ | (24 | ) | $ | 61,171 | |||||||
Equity and other securities
|
600 | 19 | – | 619 | ||||||||||||
$ | 61,567 | $ | 247 | $ | (24 | ) | $ | 61,790 |
Amortized
Cost
|
Fair Value
|
|||||||
(In thousands)
|
||||||||
Due in one year or less
|
$ | 0 | $ | 0 | ||||
Due after one year through five years
|
0 | 0 | ||||||
Due after five years through ten years
|
410 | 407 | ||||||
Due after ten years
|
76,764 | 76,815 | ||||||
Total
|
77,174 | 77,222 | ||||||
Equity and other securities
|
600 | 623 | ||||||
$ | 77,774 | $ | 77,845 |
December 31, 2012
|
||||||||||||||||||||||||
Less than 12 Months
|
12 Months or More
|
Total
|
Total
|
|||||||||||||||||||||
Description of
Securities
|
Fair Value
|
Unrealized
Losses
|
Fair Value
|
Unrealized
Losses
|
Fair Value
|
Unrealized
Losses
|
||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||
U.S. Government sponsored agencies
|
$ | 27,832 | $ | 43 | $ | – | $ | – | $ | 27,832 | $ | 43 | ||||||||||||
Municipal securities
|
6,153 | 153 | – | – | 6,153 | 153 | ||||||||||||||||||
Total temporarily impaired securities
|
$ | 33,985 | $ | 196 | $ | – | $ | – | $ | 33,985 | $ | 196 |
December 31, 2011
|
||||||||||||||||||||||||
Less than 12 Months
|
12 Months or More
|
Total
|
Total
|
|||||||||||||||||||||
Description of
Securities
|
Fair Value
|
Unrealized
Losses
|
Fair Value
|
Unrealized
Losses
|
Fair Value
|
Unrealized
Losses
|
||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||
U.S. Government sponsored agencies
|
$ | 19,973 | $ | 24 | $ | – | $ | – | $ | 19,973 | $ | 24 | ||||||||||||
Total temporarily impaired securities
|
$ | 19,973 | $ | 24 | $ | – | $ | – | $ | 19,973 | $ | 24 |
2012
|
2011
|
|||||||
(In thousands)
|
||||||||
Balance as of December 31
|
$ | 21,668 | $ | 14,413 | ||||
Carrying value of securities pledged to secure agreements to repurchases
at December 31
|
$ | 37,059 | $ | 24,131 | ||||
Average balance during the year of securities sold under agreements to repurchase
|
$ | 18,663 | $ | 16,405 | ||||
Maximum amount outstanding at any month-end during the year
|
$ | 22,071 | $ | 18,633 |
2012
|
2011
|
|||||||
(In thousands)
|
||||||||
Commercial loans
|
$ | 115,520 | $ | 130,398 | ||||
Commercial real estate loans
|
143,198 | 154,109 | ||||||
Construction loans
|
46,515 | 48,438 | ||||||
Home equity loans
|
49,529 | 59,750 | ||||||
Residential real estate loans
|
43,584 | 37,882 | ||||||
Lease financing
|
10,054 | 2,268 | ||||||
Consumer loans
|
7,271 | 5,998 | ||||||
Total loans
|
415,671 | 438,843 | ||||||
Less: Allowance for loan losses
|
9,057 | 13,189 | ||||||
Net loans
|
$ | 406,614 | $ | 425,654 |
For the Year Ended December 31, 2012
|
||||||||||||||||||||||||||||||||
(In thousands)
|
Commercial
|
Commercial Real Estate
|
Construction
|
Home Equity
|
Residential Real Estate
|
Lease Financing
|
Consumer
|
Total
|
||||||||||||||||||||||||
Allowance for loan losses:
|
||||||||||||||||||||||||||||||||
Balance, beginning of year
|
$ | 2,987 | $ | 3,772 | $ | 2,721 | $ | 1,338 | $ | 2,312 | $ | 30 | $ | 29 | $ | 13,189 | ||||||||||||||||
Provision charged to expense
|
961 | 2,029 | (777 | ) | (345 | ) | (677 | ) | 25 | (16 | ) | 1,200 | ||||||||||||||||||||
Losses charged off
|
(2,030 | ) | (2,239 | ) | (882 | ) | (417 | ) | (540 | ) | (9 | ) | – | (6,117 | ) | |||||||||||||||||
Recoveries
|
179 | 20 | 481 | 58 | 43 | - | 4 | 785 | ||||||||||||||||||||||||
Balance, end of year
|
$ | 2,097 | $ | 3,582 | $ | 1,543 | $ | 634 | $ | 1,138 | $ | 46 | $ | 17 | $ | 9,057 | ||||||||||||||||
For the Year Ended December 31, 2011
|
||||||||||||||||||||||||||||||||
Commercial
|
Commercial Real Estate
|
Construction
|
Home Equity
|
Residential Real Estate
|
Lease Financing
|
Consumer
|
Total
|
|||||||||||||||||||||||||
Allowance for loan losses:
|
||||||||||||||||||||||||||||||||
Balance, beginning of year
|
$ | 3,339 | $ | 3,974 | $ | 4,579 | $ | 1,262 | $ | 1,488 | $ | 38 | $ | 51 | $ | 14,731 | ||||||||||||||||
Provision charged to expense
|
(52 | ) | 925 | 434 | 753 | 1,304 | (33 | ) | (31 | ) | 3,300 | |||||||||||||||||||||
Losses charged off
|
(582 | ) | (1,218 | ) | (2,352 | ) | (725 | ) | (637 | ) | – | – | (5,514 | ) | ||||||||||||||||||
Recoveries
|
282 | 91 | 60 | 48 | 157 | 25 | 9 | 672 | ||||||||||||||||||||||||
Balance, end of year
|
$ | 2,987 | $ | 3,772 | $ | 2,721 | $ | 1,338 | $ | 2,312 | $ | 30 | $ | 29 | $ | 13,189 | ||||||||||||||||
For the Year Ended December 31, 2010
|
||||||||||||||||||||||||||||||||
Commercial
|
Commercial Real Estate
|
Construction
|
Home Equity
|
Residential Real Estate
|
Lease Financing
|
Consumer
|
Total
|
|||||||||||||||||||||||||
Allowance for loan losses:
|
||||||||||||||||||||||||||||||||
Balance, beginning of year
|
$ | 3,630 | $ | 7,253 | $ | 5,929 | $ | 1,061 | $ | 1,737 | $ | 238 | $ | 152 | $ | 20,000 | ||||||||||||||||
Provision charged to expense
|
683 | (465 | ) | 2,189 | 571 | 400 | (171 | ) | (112 | ) | 3,095 | |||||||||||||||||||||
Losses charged off
|
(1,364 | ) | (2,985 | ) | (3,662 | ) | (387 | ) | (660 | ) | (43 | ) | (7 | ) | (9,108 | ) | ||||||||||||||||
Recoveries
|
390 | 171 | 123 | 17 | 11 | 14 | 18 | 744 | ||||||||||||||||||||||||
Balance, end of year
|
$ | 3,339 | $ | 3,974 | $ | 4,579 | $ | 1,262 | $ | 1,488 | $ | 38 | $ | 51 | $ | 14,731 | ||||||||||||||||
NOTE 3: LOANS AND ALLOWANCE FOR LOAN LOSSES (Continued)
The following tables present the balance in the allowance for loan losses and the recorded investment in loans based on portfolio segment and impairment methods as of December 31, 2012 and 2011:
|
||||||||||||||||||||||||||||||||
December 31, 2012
|
||||||||||||||||||||||||||||||||
(In thousands)
|
Commercial
|
Commercial Real Estate
|
Construction
|
Home Equity
|
Residential Real Estate
|
Lease Financing
|
Consumer
|
Total
|
||||||||||||||||||||||||
Allowance for loan losses:
|
||||||||||||||||||||||||||||||||
Individually evaluated for impairment
|
$ | 550 | $ | 1,812 | $ | 564 | $ | 143 | $ | 331 | $ | – | $ | – | $ | 3,400 | ||||||||||||||||
Collectively evaluated for impairment
|
1,547 | 1,770 | 979 | 491 | 807 | 46 | 17 | 5,657 | ||||||||||||||||||||||||
Total
|
$ | 2,097 | $ | 3,582 | $ | 1,543 | $ | 634 | $ | 1,138 | $ | 46 | $ | 17 | $ | 9,057 | ||||||||||||||||
Loans:
|
||||||||||||||||||||||||||||||||
Individually evaluated for impairment
|
$ | 15,092 | $ | 9,437 | $ | 12,548 | $ | 1,315 | $ | 4,135 | $ | – | $ | – | $ | 42,527 | ||||||||||||||||
Collectively evaluated for impairment
|
100,428 | 133,761 | 33,967 | 48,214 | 39,449 | 10,054 | 7,271 | 373,144 | ||||||||||||||||||||||||
Total
|
$ | 115,520 | $ | 143,198 | $ | 46,515 | $ | 49,529 | $ | 43,584 | $ | 10,054 | $ | 7,271 | $ | 415,671 | ||||||||||||||||
December 31, 2011
|
||||||||||||||||||||||||||||||||
Commercial
|
Commercial Real Estate
|
Construction
|
Home Equity
|
Residential Real Estate
|
Lease Financing
|
Consumer
|
Total
|
|||||||||||||||||||||||||
Allowance for loan losses:
|
||||||||||||||||||||||||||||||||
Individually evaluated for impairment
|
$ | 1,825 | $ | 3,055 | $ | 1,462 | $ | 565 | $ | 1,727 | $ | 26 | $ | – | $ | 8,660 | ||||||||||||||||
Collectively evaluated for impairment
|
1,162 | 717 | 1,259 | 773 | 585 | 4 | 29 | 4,529 | ||||||||||||||||||||||||
Total
|
$ | 2,987 | $ | 3,772 | $ | 2,721 | $ | 1,338 | $ | 2,312 | $ | 30 | $ | 29 | $ | 13,189 | ||||||||||||||||
Loans:
|
||||||||||||||||||||||||||||||||
Individually evaluated for impairment
|
$ | 24,625 | $ | 18,099 | $ | 16,535 | $ | 3,836 | $ | 6,981 | $ | 648 | $ | 2 | $ | 70,726 | ||||||||||||||||
Collectively evaluated for impairment
|
105,773 | 136,010 | 31,903 | 55,914 | 30,901 | 1,620 | 5,996 | 368,117 | ||||||||||||||||||||||||
Total
|
$ | 130,398 | $ | 154,109 | $ | 48,438 | $ | 59,750 | $ | 37,882 | $ | 2,268 | $ | 5,998 | $ | 438,843 |
2012
|
2011
|
|||||||||||||||||||||||
(In thousands)
|
Pass
|
Classified
|
Total
|
Pass
|
Classified
|
Total
|
||||||||||||||||||
Commercial
|
$ | 112,679 | $ | 2,841 | $ | 115,520 | $ | 118,396 | $ | 12,002 | $ | 130,398 | ||||||||||||
Commercial real estate
|
136,397 | 6,801 | 143,198 | 144,693 | 9,416 | 154,109 | ||||||||||||||||||
Construction
|
35,589 | 10,926 | 46,515 | 33,792 | 14,646 | 48,438 | ||||||||||||||||||
Home equity
|
49,299 | 230 | 49,529 | 56,779 | 2,971 | 59,750 | ||||||||||||||||||
Residential real estate
|
41,228 | 2,356 | 43,584 | 32,002 | 5,880 | 37,882 | ||||||||||||||||||
Lease financing
|
10,054 | – | 10,054 | 1,960 | 308 | 2,268 | ||||||||||||||||||
Consumer
|
7,271 | – | 7,271 | 5,998 | – | 5,998 | ||||||||||||||||||
Total
|
$ | 392,517 | $ | 23,154 | $ | 415,671 | $ | 393,620 | $ | 45,223 | $ | 438,843 | ||||||||||||
December 31, 2012
|
||||||||||||||||||||||||||||
(In thousands)
|
30-59 Days Past Due
|
60-89 Days Past Due
|
Greater than 90 Days Past Due
|
Total
Past Due
|
Current
|
Total Loans Receivable
|
Total Loans > 90 Days & Accruing
|
|||||||||||||||||||||
Commercial
|
$ | 110 | $ | – | $ | 365 | $ | 475 | $ | 115,045 | $ | 115,520 | $ | – | ||||||||||||||
Commercial real estate
|
– | – | – | – | 143,198 | 143,198 | – | |||||||||||||||||||||
Construction
|
– | – | 910 | 910 | 45,605 | 46,515 | – | |||||||||||||||||||||
Home equity
|
– | – | 49,529 | 49,529 | – | |||||||||||||||||||||||
Residential real estate
|
766 | 605 | 569 | 1,940 | 41,644 | 43,584 | – | |||||||||||||||||||||
Lease financing
|
– | – | – | – | 10,054 | 10,054 | – | |||||||||||||||||||||
Consumer
|
– | – | – | – | 7,271 | 7,271 | – | |||||||||||||||||||||
Total
|
$ | 876 | $ | 606 | $ | 1,844 | $ | 3,325 | $ | 412,346 | $ | 415,671 | $ | – | ||||||||||||||
December 31, 2011
|
||||||||||||||||||||||||||||
30-59 Days Past Due
|
60-89 Days Past Due
|
Greater than 90 Days Past Due
|
Total
Past Due
|
Current
|
Total Loans Receivable
|
Total Loans > 90 Days & Accruing
|
||||||||||||||||||||||
Commercial
|
$ | 703 | $ | 200 | $ | 928 | $ | 1,831 | $ | 128,567 | $ | 130,398 | $ | – | ||||||||||||||
Commercial real estate
|
– | – | 143 | 143 | 153,966 | 154,109 | – | |||||||||||||||||||||
Construction
|
1,376 | – | 1,781 | 3,157 | 45,281 | 48,438 | – | |||||||||||||||||||||
Home equity
|
– | 2,165 | – | 2,165 | 57,585 | 59,750 | – | |||||||||||||||||||||
Residential real estate
|
678 | 717 | 1,367 | 2,762 | 35,120 | 37,882 | – | |||||||||||||||||||||
Lease financing
|
104 | – | 18 | 122 | 2,146 | 2,268 | – | |||||||||||||||||||||
Consumer
|
– | – | – | – | 5,998 | 5,998 | – | |||||||||||||||||||||
Total
|
$ | 2,861 | $ | 3,082 | $ | 4,237 | $ | 10,180 | $ | 428,663 | $ | 438,843 | $ | – | ||||||||||||||
December 31, 2012
|
||||||||||||||||||||
(In thousands)
|
Recorded Balance
|
Unpaid Principal Balance
|
Specific Allowance
|
Average Investment in Impaired Loans
|
Interest Income Recognized
|
|||||||||||||||
Loans without a specific valuation allowance:
|
||||||||||||||||||||
Commercial
|
$ | 877 | $ | 916 | $ | – | $ | 694 | $ | 106 | ||||||||||
Commercial real estate
|
521 | 521 | – | 1,798 | 71 | |||||||||||||||
Construction
|
1,684 | 1,684 | – | 1,699 | 40 | |||||||||||||||
Home equity
|
– | – | – | 287 | 4 | |||||||||||||||
Residential real estate
|
1,201 | 1,336 | – | 847 | 57 | |||||||||||||||
Lease financing
|
233 | 233 | – | 169 | 16 | |||||||||||||||
Consumer
|
– | – | – | – | – | |||||||||||||||
Loans with a specific valuation allowance:
|
||||||||||||||||||||
Commercial
|
$ | 643 | $ | 657 | $ | 241 | $ | 2,240 | $ | 42 | ||||||||||
Commercial real estate
|
1,537 | 1,567 | 1,000 | 2,741 | 49 | |||||||||||||||
Construction
|
10,016 | 10,016 | 490 | 10,915 | 466 | |||||||||||||||
Home equity
|
175 | 176 | 81 | 1,919 | – | |||||||||||||||
Residential real estate
|
3,332 | 3,376 | 1,262 | 3,016 | 183 | |||||||||||||||
Lease financing
|
– | – | – | 100 | – | |||||||||||||||
Consumer
|
– | – | – | – | – | |||||||||||||||
Total impaired loans:
|
||||||||||||||||||||
Commercial
|
$ | 1,520 | $ | 1,573 | $ | 241 | $ | 2,934 | $ | 148 | ||||||||||
Commercial real estate
|
2,058 | 2,088 | 1,000 | 4,539 | 120 | |||||||||||||||
Construction
|
11,700 | 11,700 | 490 | 12,614 | 506 | |||||||||||||||
Home equity
|
175 | 176 | 81 | 2,206 | 4 | |||||||||||||||
Residential real estate
|
4,533 | 4,712 | 1,262 | 3,863 | 240 | |||||||||||||||
Lease financing
|
233 | 233 | – | 269 | 16 | |||||||||||||||
Consumer
|
– | – | – | – | – | |||||||||||||||
Total
|
$ | 20,219 | $ | 20,482 | $ | 3,074 | $ | 26,425 | $ | 1,034 |
December 31, 2011
|
||||||||||||||||||||
(In thousands)
|
Recorded Balance
|
Unpaid Principal Balance
|
Specific Allowance
|
Average Investment in Impaired Loans
|
Interest Income Recognized
|
|||||||||||||||
Loans without a specific valuation allowance:
|
||||||||||||||||||||
Commercial
|
$ | 16 | $ | 32 | $ | – | $ | 223 | $ | 56 | ||||||||||
Commercial real estate
|
482 | 514 | – | 1,781 | 109 | |||||||||||||||
Construction
|
101 | 101 | – | 1,427 | – | |||||||||||||||
Home equity
|
468 | 500 | – | 532 | 3 | |||||||||||||||
Residential real estate
|
904 | 1,014 | – | 1,140 | 17 | |||||||||||||||
Lease financing
|
– | – | – | 25 | 67 | |||||||||||||||
Consumer
|
– | – | – | 28 | 1 | |||||||||||||||
Loans with a specific valuation allowance
|
||||||||||||||||||||
Commercial
|
$ | 3,709 | $ | 3,850 | $ | 1,281 | $ | 4,298 | $ | 171 | ||||||||||
Commercial real estate
|
4,819 | 5,357 | 2,257 | 6,793 | 107 | |||||||||||||||
Construction
|
14,313 | 14,776 | 1,353 | 18,080 | 454 | |||||||||||||||
Home equity
|
2,208 | 2,242 | 296 | 940 | 3 | |||||||||||||||
Residential real estate
|
3,838 | 4,416 | 1,389 | 3,791 | 149 | |||||||||||||||
Lease financing
|
307 | 307 | 25 | 324 | 21 | |||||||||||||||
Consumer
|
– | – | – | – | – | |||||||||||||||
Total impaired loans:
|
||||||||||||||||||||
Commercial
|
$ | 3,725 | $ | 3,882 | $ | 1,281 | $ | 4,521 | $ | 227 | ||||||||||
Commercial real estate
|
5,301 | 5,871 | 2,257 | 8,574 | 216 | |||||||||||||||
Construction
|
14,414 | 14,877 | 1,353 | 19,507 | 454 | |||||||||||||||
Home equity
|
2,676 | 2,742 | 296 | 1,472 | 6 | |||||||||||||||
Residential real estate
|
4,742 | 5,430 | 1,389 | 4,931 | 166 | |||||||||||||||
Lease financing
|
307 | 307 | 25 | 349 | 88 | |||||||||||||||
Consumer
|
– | – | – | 28 | 1 | |||||||||||||||
Total
|
$ | 31,165 | $ | 33,109 | $ | 6,601 | $ | 39,382 | $ | 1,158 | ||||||||||
December 31, 2010
|
||||||||||||||||||||
(In thousands)
|
Recorded Balance
|
Unpaid Principal Balance
|
Specific Allowance
|
Average Investment in Impaired Loans
|
Interest Income Recognized
|
|||||||||||||||
Loans without a specific valuation allowance:
|
||||||||||||||||||||
Commercial
|
$ | 220 | $ | 315 | $ | – | $ | 627 | $ | 24 | ||||||||||
Commercial real estate
|
4,080 | 4,700 | – | 3,891 | 37 | |||||||||||||||
Construction
|
3,203 | 3,203 | – | 3,384 | – | |||||||||||||||
Home equity
|
585 | 587 | – | 102 | – | |||||||||||||||
Residential real estate
|
1,279 | 1,924 | – | 1,391 | – | |||||||||||||||
Lease financing
|
140 | 256 | – | 254 | 2 | |||||||||||||||
Consumer
|
52 | 54 | – | 50 | 3 | |||||||||||||||
Loans with a specific valuation allowance
|
||||||||||||||||||||
Commercial
|
$ | 5,541 | $ | 5,585 | $ | 1,133 | $ | 2,834 | $ | 7 | ||||||||||
Commercial real estate
|
8,022 | 8,092 | 1,110 | 10,760 | – | |||||||||||||||
Construction
|
22,318 | 22,430 | 3,039 | 23,662 | 20 | |||||||||||||||
Home equity
|
626 | 648 | 299 | 411 | – | |||||||||||||||
Residential real estate
|
4,618 | 5,480 | 577 | 6,150 | – | |||||||||||||||
Lease financing
|
402 | 402 | 3 | 302 | – | |||||||||||||||
Consumer
|
– | – | – | 12 | – | |||||||||||||||
Total:
|
||||||||||||||||||||
Commercial
|
$ | 5,761 | $ | 5,900 | $ | 1,133 | $ | 3,461 | $ | 31 | ||||||||||
Commercial real estate
|
12,102 | 12,792 | 1,110 | 14,651 | 37 | |||||||||||||||
Construction
|
25,521 | 25,633 | 3,039 | 27,046 | 20 | |||||||||||||||
Home equity
|
1,211 | 1,235 | 299 | 513 | – | |||||||||||||||
Residential real estate
|
5,897 | 7,404 | 577 | 7,541 | – | |||||||||||||||
Lease financing
|
542 | 658 | 3 | 556 | 2 | |||||||||||||||
Consumer
|
52 | 54 | – | 62 | 3 |
Total
|
$ 51,086
|
$ 53,676
|
$ 6,161
|
$ 53,830
|
$ 93
|
2012
|
2011
|
|||||||
(In thousands)
|
||||||||
Commercial
|
$ | 1,131 | $ | 2,029 | ||||
Commercial real estate
|
1,537 | 1,340 | ||||||
Construction
|
910 | 3,058 | ||||||
Home equity
|
1,084 | 2,676 | ||||||
Residential real estate
|
175 | 2,204 | ||||||
Lease financing
|
– | 18 | ||||||
Consumer
|
– | – | ||||||
$ | 4,837 | $ | 11,325 |
December 31, 2012
|
December 31, 2011
|
|||||||||||||||||||||||
(In thousands)
|
Number
of Loans
|
Pre-Modification Outstanding Recorded Balance
|
Post-Modification Outstanding Recorded Balance
|
Number
of Loans
|
Pre-Modification Outstanding Recorded Balance
|
Post-Modification Outstanding Recorded Balance
|
||||||||||||||||||
Commercial
|
1 | $ | 85 | $ | 85 | 6 | $ | 1,417 | $ | 1,408 | ||||||||||||||
Commercial real estate
|
– | – | – | 5 | 3,498 | 3,498 | ||||||||||||||||||
Construction
|
– | – | – | 3 | 3,724 | 3,724 | ||||||||||||||||||
Home equity
|
– | – | – | – | – | – | ||||||||||||||||||
Residential real estate
|
1 | 371 | 371 | – | – | – | ||||||||||||||||||
Lease financing
|
– | – | – | – | – | – | ||||||||||||||||||
Consumer
|
– | – | – | – | – | – | ||||||||||||||||||
Total
|
2 | $ | 456 | $ | 456 | 14 | $ | 8,639 | $ | 8,630 |
December 31, 2012
|
||||||||
Number
of Loans
|
Recorded
Balance
|
|||||||
(In thousands)
|
||||||||
Commercial
|
1 | $ | 79 | |||||
Commercial real estate
|
– | – | ||||||
Construction
|
– | – | ||||||
Home equity
|
– | – | ||||||
Residential real estate
|
– | – | ||||||
Lease financing
|
– | – | ||||||
Consumer
|
– | – | ||||||
1 | $ | 79 |
2012
|
2011
|
|||||||
(In thousands)
|
||||||||
Land
|
$ | 5,154 | $ | 5,154 | ||||
Buildings and improvements
|
15,984 | 15,898 | ||||||
Furniture and equipment
|
8,382 | 8,110 | ||||||
29,520 | 29,162 | |||||||
Less accumulated depreciation
|
14,072 | 13,265 | ||||||
Total premises and equipment
|
$ | 15,448 | $ | 15,897 |
|
2012
|
2011
|
2010
|
|||||||||
(In thousands)
|
||||||||||||
Balance, beginning of year
|
$ | 2,985 | $ | 481 | $ | 166 | ||||||
Provision charged to expense
|
867 | 3,159 | 734 | |||||||||
Charge offs, net of recoveries
|
(668 | ) | (655 | ) | (419 | ) | ||||||
Balance, end of year
|
$ | 3,184 | $ | 2,985 | $ | 481 |
|
2012
|
2011
|
2010
|
|||||||||
(In thousands)
|
||||||||||||
Net gains on sale of foreclosed assets
|
$ | (349 | ) | $ | (555 | ) | $ | (168 | ) | |||
Provision for losses
|
867 | 3,159 | 734 | |||||||||
Operating expenses, net of rental income
|
1,361 | 1,921 | 1,656 | |||||||||
$ | 1,879 | $ | 4,525 | $ | 2,222 |
2012
|
2011
|
|||||||||||||||
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Gross
Carrying
Amount
|
Accumulated
Amortization
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Core Deposit Intangible
|
$ | 1,000 | $ | (821 | ) | $ | 1,000 | $ | (679 | ) |
(In thousands)
|
||||
2013
|
$ | 143 | ||
2014
|
36 |
(In thousands)
|
||||
2013
|
81,516 | |||
2014
|
18,481 | |||
2015
|
18,529 | |||
2016
|
10,345 | |||
2017
|
4,920 | |||
Thereafter
|
1,345 | |||
$ | 135,136 |
(In thousands)
|
||||
2013
|
$ | 344 | ||
2014
|
96 | |||
2015
|
8 | |||
$ | 448 |
2012
|
2011
|
|||||||
(In thousands)
|
|
|||||||
FHLBank advances (A)
|
$ | 82,500 | $ | 82,500 | ||||
Less: Deferred prepayment penalty on modification of FHLB advances
|
(977 | ) | (1,654 | ) | ||||
Net FHLBank advances
|
81,523 | 80,846 | ||||||
Subordinated Debentures – BVBC Capital Trust II (B)
|
7,732 | 7,732 | ||||||
Subordinated Debentures – BVBC Capital Trust III (C)
|
11,856 | 11,856 | ||||||
Total long-term debt
|
$ | 101,111 | $ | 100,434 |
(A)Due in 2013, 2014, 2015, 2016 and 2018; collateralized by various assets including mortgage-backed loans and available-for-sale securities totaling $159,011,000 at December 31, 2012. Advances, at interest rates from 0.37% to 4.26% are subject to restrictions or penalties in the event of prepayment. FHLB advance availability is determined quarterly and at December 31, 2012, approximately $2,467,000 was available. Advances are made at the discretion of the FHLBank Topeka.
In the third quarter of 2010, the Company repaid $42,500,000 of FHLB advances by rolling the net present value of the repaid advances into the funding cost of $42,500,000 of new advances. A $2,569,000 modification fee was associated with the pay-off of the original FHLB advances which is amortized as an adjustment of interest expense over the remaining term of the new FHLB advances using the straight line method. The unamortized modification fee at December 31, 2012 was approximately $977,000. This transaction reduced the effective interest rate, as well as modified the maturity date on these borrowings.
|
(B)Due in 2033; interest only at three month LIBOR + 3.25% (3.56% at December 31, 2012 and 3.68% at December 31, 2011) due quarterly; fully and unconditionally guaranteed by the Company on a subordinated basis to the extent that the funds are held by the Trust. BVBC Capital Trust II issued and sold $7,500,000 in Capital Securities to third parties and $232,000 of Common Securities to the Company. As of 2008, the Company may prepay the subordinated debentures, in whole or in part, at their face value plus accrued interest.
|
(C)Due in 2035; interest only at three month LIBOR + 1.60% (1.91% at December 31, 2012 and 2.18% at December 31, 2011) due quarterly; fully and unconditionally guaranteed by the Company on a subordinated basis to the extent that the funds are held by the Trust. BVBC Capital Trust III issued and sold $11,500,000 in Preferred Securities to third parties and $356,000 in Common Securities to the Company. Subordinated to the trust preferred securities (B) due in 2033. As of 2010, the Company may prepay the subordinated debentures, in whole or in part, at their face value plus accrued interest.
|
(In thousands)
|
||||
2013
|
$ | 20,000 | ||
2014
|
7,500 | |||
2015
|
20,000 | |||
2016
|
10,000 | |||
2017
|
- | |||
Thereafter
|
44,588 | |||
102,088 | ||||
Less:Deferred prepayment penalty on modification of FHLB advances
|
(977 | ) | ||
$ | 101,111 |
2012
|
2011
|
2010
|
||||||||||
(In thousands)
|
||||||||||||
Taxes currently (refundable) payable
|
$ | – | $ | – | $ | – | ||||||
Deferred income taxes
|
(150 | ) | 9,823 | (1,561 | ) | |||||||
$ | (150 | ) | $ | 9,823 | $ | (1,561 | ) |
2012
|
2011
|
2010
|
||||||||||
(In thousands)
|
||||||||||||
Computed at the statutory rate (34%)
|
$ | 40 | $ | (2,040 | ) | $ | (1,463 | ) | ||||
Increase (decrease) resulting from:
|
||||||||||||
Tax-exempt interest
|
(87 | ) | (50 | ) | (5 | ) | ||||||
State income taxes
|
77 | (20 | ) | 124 | ||||||||
Changes in the deferred tax asset valuation allowance
|
(200 | ) | 12,600 | – | ||||||||
Other
|
20 | (667 | ) | (217 | ) | |||||||
Actual tax provision
|
$ | (150 | ) | $ | 9,823 | $ | (1,561 | ) |
2012
|
2011
|
||||||||
(In thousands)
|
|||||||||
Deferred tax assets:
|
|||||||||
Allowance for loan losses
|
$ | 3,351 | $ | 4,880 | |||||
Net Operating Loss from Blue Valley Ban Corp. and subsidiary
|
9,153 | 7,733 | |||||||
Deferred compensation
|
80 | 123 | |||||||
Offering costs
|
180 | 190 | |||||||
Non-accrual loan interest
|
46 | 59 | |||||||
Other real estate owned reserve
|
1,178 | 1,215 | |||||||
Other
|
639 | 516 | |||||||
14,627 | 14,716 | ||||||||
Deferred tax liabilities:
|
|||||||||
Accumulated depreciation
|
(253 | ) | (321 | ) (346) | |||||
FHLB stock basis
|
(557 | ) | (511 | ) | |||||
Accumulated appreciation on available-for-sale securities
|
(29 | ) | (89 | ) | |||||
Prepaid intangibles
|
(177 | ) | (185 | ) | |||||
Core Deposit Intangible related to Unison Bancorp Inc. and subsidiary acquisition
|
(45 | ) | (90 | ) | |||||
Other
|
(9 | ) | (9 | ) | |||||
(1,070 | ) | (1,205 | ) | ||||||
Net deferred tax asset before valuation allowance
|
13,557 | 13,511 | |||||||
Valuation allowance:
|
|||||||||
Beginning balance
|
(12,600 | ) | – | ||||||
(Increase) decrease during the period
|
164 | (12,600 | ) | ||||||
Ending balance
|
(12,436 | ) | (12,600 | ) | |||||
Net deferred tax asset
|
$ | 1,121 | $ | 911 |
Actual
|
For Capital
Adequacy Purposes
|
To Be Well Capitalized
Under Prompt Corrective
Action Provisions
|
||||||||||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||
December 31, 2012:
|
||||||||||||||||||||||||
Total Capital
(to Risk Weighted Assets)
|
||||||||||||||||||||||||
Consolidated
|
$ | 65,441 | 12.01 | % | $ | 43,588 | 8.00 | % | N/A | |||||||||||||||
Bank Only
|
$ | 72,542 | 13.33 | % | $ | 43,539 | 8.00 | % | $ | 54,424 | 10.00 | % | ||||||||||||
Tier 1 Capital
(to Risk Weighted Assets)
|
||||||||||||||||||||||||
Consolidated
|
$ | 52,851 | 9.70 | % | $ | 21,794 | 4.00 | % | N/A | |||||||||||||||
Bank Only
|
$ | 65,702 | 12.07 | % | $ | 21,769 | 4.00 | % | $ | 32,654 | 6.00 | % | ||||||||||||
Tier 1 Capital
(to Average Assets)
|
||||||||||||||||||||||||
Consolidated
|
$ | 52,851 | 8.10 | % | $ | 26,084 | 4.00 | % | N/A | |||||||||||||||
Bank Only
|
$ | 65,702 | 10.08 | % | $ | 26,060 | 4.00 | % | $ | 32,574 | 5.00 | % |
Actual
|
For Capital
Adequacy Purposes
|
To Be Well Capitalized
Under Prompt Corrective
Action Provisions
|
||||||||||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||
December 31, 2011:
|
||||||||||||||||||||||||
Total Capital
(to Risk Weighted Assets)
|
||||||||||||||||||||||||
Consolidated
|
$ | 65,917 | 12.08 | % | $ | 43,640 | 8.00 | % | N/A | |||||||||||||||
Bank Only
|
$ | 70,736 | 12.98 | % | $ | 43,587 | 8.00 | % | $ | 54,484 | 10.00 | % | ||||||||||||
Tier 1 Capital
(to Risk Weighted Assets)
|
||||||||||||||||||||||||
Consolidated
|
$ | 53,455 | 9.80 | % | $ | 21,820 | 4.00 | % | N/A | |||||||||||||||
Bank Only
|
$ | 63,838 | 11.72 | % | $ | 21,794 | 4.00 | % | $ | 32,691 | 6.00 | % | ||||||||||||
Tier 1 Capital
(to Average Assets)
|
||||||||||||||||||||||||
Consolidated
|
$ | 53,455 | 8.04 | % | $ | 26,609 | 4.00 | % | N/A | |||||||||||||||
Bank Only
|
$ | 63,838 | 9.61 | % | $ | 26,571 | 4.00 | % | $ | 33,214 | 5.00 | % |
•
|
The Preferred Shares have a senior rank. The Company is not free to issue other preferred stock that is senior to the Preferred Shares.
|
•
|
Until the third anniversary of the sale of the Preferred Shares, unless the Preferred Shares have been redeemed in whole or the Treasury has transferred all of the shares to a non-affiliated third party, the Company may not declare or pay a common stock dividend in an amount greater than the amount of the last quarterly cash dividend per share declared prior to October 14, 2008, or repurchase common stock or other equity shares (subject to certain limited exceptions) without the Treasury’s approval.
|
•
|
If the Company were to pay a cash dividend in the future, any such dividend would have to be discontinued if a Preferred Share dividend were missed. Thereafter, dividends on common stock could be resumed only if all Preferred Share dividends in arrears were paid. Similar restrictions apply to the Company’s ability to repurchase common stock if Preferred Share dividends are missed.
|
•
|
Failure to pay the Preferred Share dividend is not an event of default. However, a failure to pay a total of six Preferred Share dividends, whether or not consecutive, gives the holders of the Preferred Shares the right to elect two directors to the Company’s Board of Directors. That right would continue until the Company pays all dividends in arrears.
|
•
|
In conformity with requirements of the SPA and Section 111(b) of the Emergency Economic Stabilization Act of 2008 (the “EESA”), the Company and its subsidiary, Bank of Blue Valley, and each of its senior executive officers agreed to limit certain compensation, bonus, incentive and other benefits plans, arrangements, and policies with respect to the senior executive officers during the period that the Treasury owns any debt or equity securities acquired in connection with the Transaction. The applicable senior executive officers have entered into letter agreements with the Company consenting to the foregoing and have executed a waiver voluntarily waiving any claim against the Treasury or the Company for any changes to such senior executive officer’s compensation or benefits that are required to comply with Section 111(b) of EESA.
|
|
The Company’s preferred stock qualifies as Tier 1 capital in accordance with regulatory capital requirements.
|
2012
|
2011
|
|||||||
(In thousands)
|
|
|||||||
Balance, beginning of year
|
$ | 12,967 | $ | 20,549 | ||||
New loans and advances
|
4,060 | 7,191 | ||||||
Repayments and reclassifications
|
(3,395 | ) | (14,773 | ) | ||||
Balance, end of year
|
$ | 13,632 | $ | 12,967 |
2012
|
2011
|
2010
|
||||||||||||||||||||||
Shares
|
Weighted
Average
Exercise
Price
|
Shares
|
Weighted
Average
Exercise
Price
|
Shares
|
Weighted
Average
Exercise
Price
|
|||||||||||||||||||
Outstanding, beginning of year
|
10,575 | $ | 25.00 | 24,375 | $ | 22.07 | 33,875 | $ | 20.51 | |||||||||||||||
Exercised
|
– | – | – | – | – | – | ||||||||||||||||||
Forfeited
|
10,575 | 25.00 | 13,800 | 19.82 | 9,500 | 16.50 | ||||||||||||||||||
Outstanding, end of year
|
0 | $ | 0.00 | 10,575 | $ | 25.00 | 24,375 | $ | 22.07 | |||||||||||||||
Intrinsic value of shares exercised
|
$ | – | $ | – | $ | – | ||||||||||||||||||
Options exercisable, end of year
|
0 | $ | 0.00 | 10,575 | $ | 25.00 | 24,375 | $ | 22.07 |
Employee Stock Purchase Plan Activity
|
||||||||
Plan year ending January
|
Shares purchased
|
Purchase Price
|
||||||
2012
|
6,508 | $ | 3.49 | |||||
2011
|
2,628 | $ | 6.80 | |||||
2010
|
3,465 | $ | 8.71 |
2012
|
2011
|
2010
|
||||||||||
(In thousands)
|
||||||||||||
Rental income
|
$ | 556 | $ | 378 | $ | 264 | ||||||
Realized gain on foreclosed assets
|
521 | 578 | 434 | |||||||||
Other income
|
458 | 28 | 447 | |||||||||
Total
|
$ | 1,535 | $ | 984 | $ | 1,145 |
2012
|
2011
|
2010
|
||||||||||
(In thousands)
|
||||||||||||
FDIC assessments
|
$ | 1,324 | $ | 1,509 | $ | 2,076 | ||||||
Professional fees
|
1,383 | 1,237 | 1,520 | |||||||||
Data processing
|
1,104 | 1,110 | 1,278 | |||||||||
ATM and network fees
|
745 | 758 | 743 | |||||||||
Loan processing fees
|
194 | 283 | 308 | |||||||||
Other expense
|
2,756 | 2,954 | 2,625 | |||||||||
Total
|
$ | 7,506 | $ | 7,851 | $ | 8,550 |
Level 1
|
Quoted prices in active markets for identical assets or liabilities
|
|
Level 2
|
Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
|
|
Level 3
|
Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
|
Fair Value Measurements Using
|
||||||||||||||||
Fair Value
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
Significant Other Observable Inputs
(Level 2)
|
Unobservable
Inputs
(Level 3)
|
|||||||||||||
(In thousands)
|
||||||||||||||||
December 31, 2012:
|
||||||||||||||||
Assets:
|
||||||||||||||||
Available-for-sale securities:
|
||||||||||||||||
U.S. Government sponsored agencies
|
$ | 63,148 | $ | – | $ | 63,148 | $ | – | ||||||||
State and political subdivision securities
|
14,074 | – | 14,074 | – | ||||||||||||
Equity and other securities
|
623 | 623 | – | – | ||||||||||||
Mortgage loans held for sale
|
7,621 | – | 7,621 | – | ||||||||||||
Commitments to originate loans
|
– | – | – | – | ||||||||||||
Forward sales commitments
|
184 | – | – | 184 | ||||||||||||
Total assets
|
$ | 85,650 | $ | 623 | $ | 84,843 | $ | 184 | ||||||||
Liabilities:
|
||||||||||||||||
Commitments to originate loans
|
$ | – | $ | – | $ | – | $ | – | ||||||||
Forward sales commitments
|
1 | – | – | 1 | ||||||||||||
Total liabilities
|
$ | 1 | $ | – | $ | – | $ | 1 | ||||||||
December 31, 2011:
|
||||||||||||||||
Assets:
|
||||||||||||||||
Available-for-sale securities:
|
||||||||||||||||
U.S. Government sponsored agencies
|
$ | 61,171 | $ | – | $ | 61,171 | $ | – | ||||||||
Equity and other securities
|
619 | 619 | – | – | ||||||||||||
Mortgage loans held for sale
|
5,686 | – | 5,686 | – | ||||||||||||
Commitments to originate loans
|
8 | – | – | 8 | ||||||||||||
Forward sales commitments
|
100 | – | – | 100 | ||||||||||||
Total assets
|
$ | 67,584 | $ | 619 | $ | 66,857 | $ | 108 | ||||||||
Liabilities:
|
||||||||||||||||
Commitments to originate loans
|
$ | 1 | $ | – | $ | – | $ | 1 | ||||||||
Forward sales commitments
|
– | – | – | – | ||||||||||||
Total liabilities
|
$ | 1 | $ | – | $ | – | $ | 1 |
Commitments to Originate Loans
|
Forward Sales Commitments
|
|||||||
(In thousands)
|
||||||||
Balance as of December 31, 2011
|
$ | 7 | $ | 100 | ||||
Total realized and unrealized gains (losses):
|
||||||||
Included in net income (loss)
|
(7 | ) | 83 | |||||
Balance as of December 31, 2012
|
$ | – | $ | 183 | ||||
Balance as of December 31, 2010
|
$ | (8 | ) | $ | 372 | |||
Total realized and unrealized gains (losses):
|
||||||||
Included in net income (loss)
|
15 | (272 | ) | |||||
Balance as of December 31, 2011
|
$ | 7 | $ | 100 |
Fair Value Measurements Using
|
||||||||||||||||
Fair Value
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
Significant Other Observable Inputs
(Level 2)
|
Unobservable
Inputs
(Level 3)
|
|||||||||||||
(In thousands)
|
||||||||||||||||
December 31, 2012:
|
||||||||||||||||
Impaired loans, net of reserves
|
$ | 5,480 | $ | – | $ | – | $ | 5,480 | ||||||||
Foreclosed assets held for sale, net
|
17,894 | – | – | 17,894 | ||||||||||||
$ | 23,374 | $ | – | $ | – | $ | 23,374 | |||||||||
December 31, 2011:
|
||||||||||||||||
Impaired loans, net of reserves
|
$ | 21,139 | $ | – | $ | – | $ | 21,139 | ||||||||
Foreclosed assets held for sale, net
|
12,826 | – | – | 12,826 | ||||||||||||
$ | 33,965 | $ | – | $ | – | $ | 33,965 |
Fair Value at 12/31/12
|
Valuation Technique
|
Unobservable Inputs
|
Range
(Weighted Average)
|
|||||||
Commitments to Originate Loans
|
$ | – |
Market comparable prices
|
Quoted prices for similar loans
Estimated Customer Fallout Rate
|
NA
|
|||||
Forward Sales Commitments
|
$ | 183 |
Market comparable prices
|
Quoted prices for similar loans
|
2.75%-3.375% | (3.17%) | ||||
Collateral-dependent impaired loans
|
$ | 5,480 |
Market comparable properties
|
Quoted prices for similar loans
|
9.00%-80.00% | (18.00%) | ||||
Foreclosed assets held for Sale, net
|
$ | 17,894 |
Market comparable properties
|
Comparability adjustments (%)
|
Not available
|
2012
|
2011
|
|||||||||||||||
(In thousands)
|
Carrying
Amount
|
Fair
Value
|
Carrying
Amount
|
Fair
Value
|
||||||||||||
Financial assets:
|
||||||||||||||||
Cash and cash equivalents (Level 1)
|
$ | 101,077 | $ | 101,077 | $ | 99,899 | $ | 99,899 | ||||||||
Loans, net of allowance for loan losses (Level 3)
|
406,614 | 408,041 | 425,654 | 428,698 | ||||||||||||
Federal Home Loan Bank stock, Federal Reserve Bank stock, and other securities (Level 3)
|
7,540 | 7,540 | 7,369 | 7,369 | ||||||||||||
Interest receivable (Level 3)
|
1,529 | 1,529 | 1,573 | 1,573 | ||||||||||||
Financial liabilities:
|
||||||||||||||||
Deposits (Level 3)
|
484,466 | 487,059 | 490,413 | 492,688 | ||||||||||||
Securities sold under agreement to repurchase and other interest-bearing liabilities (Level 3)
|
21,668 | 21,668 | 15,372 | 15,372 | ||||||||||||
Long-term debt (Level 3)
|
101,111 | 95,216 | 100,434 | 94,411 | ||||||||||||
Interest payable (Level 3)
|
4,166 | 4,166 | 3,228 | 3,228 | ||||||||||||
Unrecognized financial instruments
(net of amortization):
|
||||||||||||||||
Commitments to extend credit (Level 3)
|
– | – | – | – | ||||||||||||
Letters of credit (Level 3)
|
– | – | – | – | ||||||||||||
Lines of credit (Level 3)
|
– | – | – | – |
2012
|
2011
|
|||||||||||||||||||||||||||||||||||
Fourth
|
Third
|
Second
|
First
|
Fourth
|
Third
|
Second
|
First
|
|||||||||||||||||||||||||||||
Quarter
|
Quarter
|
Quarter
|
Quarter
|
Quarter
|
Quarter
|
Quarter
|
Quarter
|
|||||||||||||||||||||||||||||
(In thousands, except per share data)
|
||||||||||||||||||||||||||||||||||||
Interest income
|
$ | 6,002 | $ | 6,097 | $ | 6,060 | $ | 6,224 | $ | 6,736 | $ | 6,837 | $ | 6,631 | $ | 6,651 | ||||||||||||||||||||
Interest expense
|
1,636 | 1,737 | 1,849 | 1,970 | 2,098 | 2,207 | 2,410 | 2,540 | ||||||||||||||||||||||||||||
Net interest income
|
4,366 | 4,360 | 4,211 | 4,254 | 4,638 | 4,638 | 4,630 | 4,221 | 4,111 | |||||||||||||||||||||||||||
Provision for loan losses
|
- | 650 | 100 | 450 | 600 | 700 | 2,000 | - | ||||||||||||||||||||||||||||
Net interest income after
|
||||||||||||||||||||||||||||||||||||
provision for loan losses
|
4,366 | 3,710 | 4,111 | 3,804 | 4,038 | 3,930 | 2,221 | 4,111 | ||||||||||||||||||||||||||||
Non-interest income
|
1,981 | 2,165 | 1,678 | 1,610 | 1,758 | 1,717 | 1,445 | 1,404 | ||||||||||||||||||||||||||||
Non-interest expense
|
6,188 | 5,524 | 5,866 | 5,730 | 6,882 | 7,672 | 5,882 | 6,188 | ||||||||||||||||||||||||||||
Income (loss) before income taxes
|
159 | 351 | (77 | ) | (316 | ) | (1,086 | ) | (2,025 | ) | (2,216 | ) | (673 | ) | ||||||||||||||||||||||
Provision (benefit) for income taxes
|
(147 | ) | (1 | ) | (1 | ) | (1 | ) | 10,136 | - | (69 | ) | (244 | ) | ||||||||||||||||||||||
Net income (loss)
|
306 | 352 | (76 | ) | (315 | ) | (11,222 | ) | (2,025 | ) | (2,147 | ) | (429 | ) | ||||||||||||||||||||||
Dividends on preferred shares
|
290 | 272 | 272 | 272 | 290 | 290 | 272 | 272 | ||||||||||||||||||||||||||||
Net income (loss) available to
|
||||||||||||||||||||||||||||||||||||
common shareholders
|
$ | 16 | $ | 80 | $ | (348 | ) | $ | (587 | ) | $ | (11,512 | ) | $ | (2,297 | ) | $ | (2,419 | ) | $ | (701 | ) | ||||||||||||||
Net Income (loss) per Share Data
|
||||||||||||||||||||||||||||||||||||
Basic
|
$ | 0.01 | $ | 0.03 | $ | (0.12 | ) | $ | (0.21 | ) | $ | (4.10 | ) | $ | (0.82 | ) | $ | (0.86 | ) | $ | (0.25 | ) | ||||||||||||||
Diluted
|
$ | 0.01 | $ | 0.03 | $ | (0.12 | ) | $ | (0.21 | ) | $ | (4.10 | ) | $ | (0.82 | ) | $ | (0.86 | ) | $ | (0.25 | ) | ||||||||||||||
Balance Sheet
|
||||||||||||||||||||||||||||||||||||
Total assets
|
$ | 657,005 | $ | 662,917 | $ | 656,457 | $ | 671,946 | $ | 654,452 | $ | 677,511 | $ | 691,580 | $ | 693,776 | ||||||||||||||||||||
Total loans, net
|
406,614 | 421,243 | 419,928 | 427,094 | 425,654 | 442,496 | 443,878 | 462,009 | ||||||||||||||||||||||||||||
Stockholders' equity
|
39,815 | 39,573 | 39,440 | 39,833 | 40,455 | 51,912 | 54,310 | 56,368 |
2012
|
2011
|
|||||||
(In thousands)
|
||||||||
ASSETS
|
||||||||
Cash and cash equivalents
|
$ | 646 | $ | 743 | ||||
Investments in subsidiaries:
|
||||||||
Bank of Blue Valley
|
65,924 | 64,282 | ||||||
BVBC Capital Trust II
|
232 | 232 | ||||||
BVBC Capital Trust III
|
356 | 356 | ||||||
Other assets
|
18 | 55 | ||||||
Total Assets
|
$ | 67,176 | $ | 65,668 | ||||
LIABILITIES
|
||||||||
Subordinated debentures
|
$ | 19,588 | $ | 19,588 | ||||
Other liabilities
|
7,773 | 5,625 | ||||||
Total Liabilities
|
27,361 | 25,213 | ||||||
STOCKHOLDERS’ EQUITY
|
||||||||
Preferred Stock
|
22 | 22 | ||||||
Common stock
|
2,934 | 2,879 | ||||||
Additional paid-in capital
|
38,746 | 38,511 | ||||||
Retained earnings (Accumulated deficit)
|
(1,930 | ) | (1,091 | ) | ||||
Accumulated other comprehensive income, net of income tax of $29 and $89 as of December 31, 2012 and 2011, respectively
|
43 | 134 | ||||||
Total Stockholders’ Equity
|
39,815 | 40,455 | ||||||
Total Liabilities and Stockholders’ Equity
|
$ | 67,176 | $ | 65,668 |
2012
|
2011
|
2010
|
||||||||||
(In thousands)
|
||||||||||||
Income
|
||||||||||||
Dividends from subsidiaries
|
$ | – | $ | – | $ | – | ||||||
Other income
|
20 | 19 | 20 | |||||||||
20 | 19 | 20 | ||||||||||
Expenses
|
1,486 | 1,291 | 1,496 | |||||||||
Loss before income taxes and equity in undistributed net loss of subsidiaries
Income tax (benefit)
|
(1,466 | ) (494) | (1,272 | ) (1,142) | (1,476 | ) (531) | ||||||
Valuation allowance on deferred tax asset
|
494 | 2,169 | – | |||||||||
|
||||||||||||
Loss before equity in undistributed net loss of subsidiaries
|
(1,466 | ) | (2,299 | ) | (945 | ) | ||||||
Equity in undistributed net loss of subsidiaries
|
1,733 | (13,524 | ) | (1,797 | ) | |||||||
Net income (loss)
|
$ | 267 | $ | (15,823 | ) | $ | (2,742 | ) | ||||
2012
|
2011
|
2010
|
||||||||||
(In thousands)
|
||||||||||||
Net income (loss)
|
$ | 267 | $ | (15,823 | ) | $ | (2,742 | ) | ||||
Other comprehensive income (loss)
|
||||||||||||
Change in unrealized appreciation on available-for-sale securities, net of income taxes (credit) of $(60) in 2012, $69 in 2011 and $(49) in 2010
|
(91 | ) | 104 | (73 | ) | |||||||
Comprehensive income (loss)
|
$ | 176 | $ | (15,719 | ) | $ | (2,815 | ) |
2012
|
2011
|
2010
|
||||||||||
(In thousands)
|
||||||||||||
OPERATING ACTIVITIES
|
||||||||||||
Net Income (loss)
|
$ | 267 | $ | (15,823 | ) | $ | (2,742 | ) | ||||
Items not requiring (providing) cash:
|
||||||||||||
Deferred income taxes
|
0 | 1,197 | (417 | ) | ||||||||
Equity in undistributed net loss (income) of subsidiaries
|
(1,733 | ) | 13,524 | 1,797 | ||||||||
Restricted stock earned
|
245 | 77 | 428 | |||||||||
Changes in:
|
||||||||||||
Other assets
|
37 | (38 | ) | – | ||||||||
Other liabilities
|
1060 | 943 | 842 | |||||||||
Net cash used in operating activities
|
(124 | ) | (120 | ) | (92 | ) | ||||||
INVESTING ACTIVITIES
|
||||||||||||
Capital contributed to subsidiary
|
– | – | – | |||||||||
Net cash used in investing activities
|
– | – | – | |||||||||
FINANCING ACTIVITIES
|
||||||||||||
Proceeds from sale of common stock through Employee Stock Purchase Plan (ESPP)
|
27 | 21 | 35 | |||||||||
Net cash provided by financing activities
|
27 | 21 | 35 | |||||||||
DECREASE IN CASH AND CASH EQUIVALENTS
|
(97 | ) | (99 | ) | (57 | ) | ||||||
CASH AND CASH EQUIVALENTS,
BEGINNING OF YEAR
|
743 | 842 | 899 | |||||||||
CASH AND CASH EQUIVALENTS,
END OF YEAR
|
$ | 646 | $ | 743 | $ | 842 |
|