|
x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Pennsylvania
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74-2705050
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(State or Other Jurisdiction of Incorporation
or Organization)
|
(I.R.S. Employer Identification No.)
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3 Penns Trail, Newtown, Pennsylvania
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18940
|
(Address of Principal Executive Offices)
|
(Zip Code)
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Title of each class
|
Name of each exchange on which registered
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Common Stock, par value $.10 per share
|
The Nasdaq Stock Market LLC
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Large accelerated filer o
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Accelerated filer o
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Non-accelerated filer o
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Smaller reporting company x
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1.
|
Portions of the Annual Report to Stockholders for the Fiscal Year Ended December 31, 2012. (Parts I, II and IV)
|
2.
|
Portions of the Proxy Statement for the 2013 Annual Meeting of Stockholders. (Part III)
|
Item 1.
|
Business
|
|
Pending Acquisition of Roebling Financial Corp, Inc.
|
|
Market Area
|
|
Competition
|
Market Share for
|
Market Share for ZIP Codes
|
|||
County, State
|
Entire County
|
Including Company Branches
|
||
Philadelphia, Pennsylvania
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0.51%
|
9.66%
|
||
Bucks, Pennsylvania
|
1.45%
|
4.48%
|
||
Mercer, New Jersey
|
0.75%
|
6.44%
|
|
Lending Activities
|
At December 31,
|
||||||||||||||||||||||||||||||||||||||||
2012
|
2011
|
2010
|
2009
|
2008
|
||||||||||||||||||||||||||||||||||||
Amount
|
Percent
of Total
|
Amount
|
Percent
of Total
|
Amount
|
Percent
of Total
|
Amount
|
Percent
of Total
|
Amount
|
Percent
of Total
|
|||||||||||||||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||||||||||||||||||
Loans receivable:
|
||||||||||||||||||||||||||||||||||||||||
Mortgage loans:
|
||||||||||||||||||||||||||||||||||||||||
Residential mortgages
|
$ | 323,665 | 60.84 | % | $ | 277,824 | 55.44 | % | $ | 269,077 | 52.84 | % | $ | 271,651 | 50.85 | % | $ | 281,870 | 51.48 | % | ||||||||||||||||||||
Commercial – real estate secured
|
145,454 | 27.34 | % | 156,450 | 31.22 | % | 163,910 | 32.19 | % | 168,098 | 31.46 | % | 168,231 | 30.73 | % | |||||||||||||||||||||||||
Construction loans
|
16,288 | 3.06 | % | 16,336 | 3.26 | % | 18,799 | 3.69 | % | 29,671 | 5.55 | % | 30,633 | 5.60 | % | |||||||||||||||||||||||||
Total mortgage loans
|
485,407 | 91.24 | % | 450,610 | 89.92 | % | 451,786 | 88.72 | % | 469,420 | 87.86 | % | 480,734 | 87.81 | % | |||||||||||||||||||||||||
Consumer loans:
|
||||||||||||||||||||||||||||||||||||||||
Home equity and second mortgage
|
40,143 | 7.55 | % | 44,165 | 8.81 | % | 49,430 | 9.71 | % | 54,811 | 10.26 | % | 56,233 | 10.27 | % | |||||||||||||||||||||||||
Other consumer
|
1,835 | 0.34 | % | 1,971 | 0.39 | % | 2,407 | 0.47 | % | 2,565 | 0.48 | % | 2,287 | 0.42 | % | |||||||||||||||||||||||||
Total consumer and other loans
|
41,978 | 7.89 | % | 46,136 | 9.20 | % | 51,837 | 10.18 | % | 57,376 | 10.74 | % | 58,520 | 10.69 | % | |||||||||||||||||||||||||
Commercial loans:
|
||||||||||||||||||||||||||||||||||||||||
Commercial and industrial loans
|
4,646 | 0.87 | % | 4,414 | 0.88 | % | 5,575 | 1.10 | % | 7,462 | 1.40 | % | 8,227 | 1.50 | % | |||||||||||||||||||||||||
Total commercial-business loans
|
4,646 | 0.87 | % | 4,414 | 0.88 | % | 5,575 | 1.10 | % | 7,462 | 1.40 | % | 8,227 | 1.50 | % | |||||||||||||||||||||||||
Total loans
|
532,031 | 100.00 | % | 501,160 | 100.00 | % | 509,198 | 100.00 | % | 534,258 | 100.00 | % | 547,481 | 100.00 | % | |||||||||||||||||||||||||
Net of:
|
||||||||||||||||||||||||||||||||||||||||
Deferred loan origination costs and
unamortized premiums
|
1,611 | 1,065 | 658 | 609 | 704 | |||||||||||||||||||||||||||||||||||
Allowance for loan losses
|
(6,922 | ) | (8,100 | ) | (8,328 | ) | (5,215 | ) | (3,855 | ) | ||||||||||||||||||||||||||||||
Total loans, held for investment, net
|
$ | 526,720 | $ | 494,125 | $ | 501,528 | $ | 529,652 | $ | 544,330 | ||||||||||||||||||||||||||||||
Loans held for sale:
|
||||||||||||||||||||||||||||||||||||||||
Mortgage loans:
|
||||||||||||||||||||||||||||||||||||||||
Residential mortgages
|
$ | 706 | 100.00 | % | $ | 488 | 100.00 | % | $ | 130 | 100.00 | % | $ | 1,082 | 100.00 | % | $ | 1,659 | 100.00 | % | ||||||||||||||||||||
Total loans held for sale
|
$ | 706 | 100.00 | % | $ | 488 | 100.00 | % | $ | 130 | 100.00 | % | $ | 1,082 | 100.00 | % | $ | 1,659 | 100.00 | % | ||||||||||||||||||||
Mortgage-backed securities
held to maturity:
|
||||||||||||||||||||||||||||||||||||||||
Federal Home Loan Mortgage
Corporation (“FHLMC”)
|
$ | 342 | 17.40 | % | $ | 449 | 17.35 | % | $ | 566 | 17.86 | % | $ | 754 | 20.20 | % | $ | 1,100 | 23.04 | % | ||||||||||||||||||||
Federal National Mortgage Association
(“FNMA”)
|
895 | 45.55 | % | 1,242 | 47.99 | % | 1,489 | 46.99 | % | 1,698 | 45.49 | % | 2,141 | 44.85 | % | |||||||||||||||||||||||||
Government National Mortgage
Association (“GNMA”)
|
728 | 37.05 | % | 897 | 34.66 | % | 1,114 | 35.15 | % | 1,281 | 34.31 | % | 1,533 | 32.11 | % | |||||||||||||||||||||||||
Total mortgage-backed
securities held to maturity
|
$ | 1,965 | 100.00 | % | $ | 2,588 | 100.00 | % | $ | 3,169 | 100.00 | % | $ | 3,733 | 100.00 | % | $ | 4,774 | 100.00 | % | ||||||||||||||||||||
Mortgage-backed securities
available-for-sale:
|
||||||||||||||||||||||||||||||||||||||||
FHLMC
|
$ | 2,159 | 5.06 | % | $ | 3,586 | 6.36 | % | $ | 2,355 | 3.54 | % | $ | 3,440 | 4.40 | % | $ | 4,504 | 4.20 | % | ||||||||||||||||||||
FNMA
|
30,001 | 70.30 | % | 23,454 | 41.60 | % | 9,734 | 14.64 | % | 9,146 | 11.70 | % | 12,320 | 11.49 | % | |||||||||||||||||||||||||
GNMA
|
726 | 1.70 | % | 1,140 | 2.02 | % | 1,637 | 2.46 | % | 1,886 | 2.41 | % | — | — | % | |||||||||||||||||||||||||
Real estate investment mortgage
conduit ("REMICs")
|
9,788 | 22.94 | % | 28,202 | 50.02 | % | 52,765 | 79.36 | % | 63,726 | 81.49 | % | 90,393 | 84.31 | % | |||||||||||||||||||||||||
Total mortgage-backed
securities available for sale
|
$ | 42,674 | 100.00 | % | $ | 56,382 | 100.00 | % | $ | 66,491 | 100.00 | % | $ | 78,198 | 100.00 | % | $ | 107,217 | 100.00 | % |
Due 1/1/13 -
|
Due 1/1/14 -
|
Due After
|
||||||||||
12/31/13
|
12/31/17
|
12/31/17
|
||||||||||
(In thousands)
|
||||||||||||
Loans held for sale:
|
||||||||||||
Residential mortgages
|
$ | — | $ | — | $ | 706 | ||||||
Total loans held for sale
|
$ | — | $ | — | $ | 706 | ||||||
Loans receivable:
|
||||||||||||
Residential mortgages
|
$ | 243 | $ | 7,743 | $ | 315,679 | ||||||
Commercial – real estate secured
|
15,277 | 5,902 | 124,275 | |||||||||
Construction loans
|
16,288 | — | — | |||||||||
Consumer and other
|
159 | 3,725 | 38,094 | |||||||||
Commercial and industrial loans
|
988 | 1,245 | 2,413 | |||||||||
Total loans receivable
|
$ | 32,955 | $ | 18,615 | $ | 480,461 |
Predetermined
|
Floating or
|
|||||||
Rates
|
Adjustable Rate
|
|||||||
(In thousands)
|
||||||||
Loans held for sale:
|
||||||||
Residential mortgages
|
$ | 706 | $ | — | ||||
Total loans held for sale
|
$ | 706 | $ | — | ||||
Loans receivable:
|
||||||||
Residential mortgages
|
$ | 275,616 | $ | 47,806 | ||||
Commercial – real estate secured
|
18,325 | 111,852 | ||||||
Consumer and other
|
21,098 | 20,721 | ||||||
Commercial and industrial loans
|
3,479 | 179 | ||||||
Total loans receivable
|
$ | 318,518 | $ | 180,558 |
At December 31,
|
||||||||||||
2012
|
2011
|
2010
|
||||||||||
(In thousands)
|
||||||||||||
Held to maturity:
|
||||||||||||
GNMA-fixed rate
|
$ | 728 | $ | 897 | $ | 1,114 | ||||||
FHLMC ARMs
|
5 | 9 | 14 | |||||||||
FHLMC-fixed rate
|
337 | 440 | 552 | |||||||||
FNMA-fixed rate
|
895 | 1,242 | 1,489 | |||||||||
Total mortgage-backed securities held to maturity
|
$ | 1,965 | $ | 2,588 | $ | 3,169 | ||||||
Available-for-sale:
|
||||||||||||
GNMA-fixed rate
|
$ | 726 | $ | 1,140 | $ | 1,637 | ||||||
FHLMC-fixed rate
|
2,159 | 3,586 | 2,355 | |||||||||
FNMA-fixed rate
|
30,001 | 23,454 | 9,734 | |||||||||
REMICs-fixed rate
|
9,788 | 28,202 | 52,765 | |||||||||
Total mortgage-backed securities available for sale
|
$ | 42,674 | $ | 56,382 | $ | 66,491 |
Held
|
Available
|
|||||||||||||||
Contractually Due
|
to Maturity
|
WAC |
for Sale
|
WAC | ||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Less than 1 year
|
$ | — | — | % | $ | 347 | 4.83 | % | ||||||||
1 to 3 years
|
— | — | % | 2,098 | 5.10 | % | ||||||||||
3 to 5 years
|
20 | 6.96 | % | — | — | % | ||||||||||
5 to 10 years
|
218 | 4.96 | % | 9,642 | 3.72 | % | ||||||||||
10 to 20 years
|
1,727 | 6.36 | % | 22,110 | 3.38 | % | ||||||||||
Over 20 years
|
— | — | % | 8,477 | 4.38 | % | ||||||||||
Total mortgage-backed securities
|
$ | 1,965 | 6.21 | % | $ | 42,674 | 3.75 | % |
|
Nonperforming and Problem Assets
|
At December 31,
|
||||||||||||||||||||
2012
|
2011
|
2010
|
2009
|
2008
|
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
Loans accounted for on a nonaccrual basis:
|
||||||||||||||||||||
Residential mortgages
|
$ | 2,265 | $ | 5,502 | $ | 3,618 | $ | 1,117 | $ | 780 | ||||||||||
Commercial – real estate secured
|
1,149 | 2,711 | 9,594 | 2,506 | 1,356 | |||||||||||||||
Construction loans
|
4,794 | 4,044 | 4,307 | 4,554 | 3,017 | |||||||||||||||
Consumer and other
|
151 | 278 | 1,415 | 107 | 126 | |||||||||||||||
Commercial and industrial loans
|
— | 6 | 44 | — | — | |||||||||||||||
Total nonaccrual loans
|
8,359 | 12,541 | 18,978 | 8,284 | 5,279 | |||||||||||||||
Real estate owned, net
|
7,282 | 11,730 | 7,482 | 1,279 | — | |||||||||||||||
Total nonperforming assets
|
$ | 15,641 | $ | 24,271 | $ | 26,460 | $ | 9,563 | $ | 5,279 | ||||||||||
Total nonaccrual loans to loans
|
1.56 | % | 2.49 | % | 3.72 | % | 1.55 | % | 0.96 | % | ||||||||||
Total nonaccrual loans to total assets
|
1.17 | % | 1.84 | % | 2.74 | % | 1.16 | % | 0.72 | % | ||||||||||
Total nonperforming assets to total assets
|
2.20 | % | 3.56 | % | 3.82 | % | 1.34 | % | 0.72 | % |
For the Years Ended December 31,
|
||||||||||||||||||||
2012
|
2011
|
2010
|
2009
|
2008
|
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
Balance at beginning of period
|
$ | 8,100 | $ | 8,328 | $ | 5,215 | $ | 3,855 | $ | 2,842 | ||||||||||
Provision for loan losses
|
2,400 | 3,728 | 4,241 | 2,930 | 1,500 | |||||||||||||||
Charge-offs:
|
||||||||||||||||||||
Residential mortgages
|
(768 | ) | (172 | ) | (49 | ) | (149 | ) | (12 | ) | ||||||||||
Commercial – real estate secured
|
(1,438 | ) | (2,041 | ) | (831 | ) | (278 | ) | — | |||||||||||
Construction loans
|
(1,182 | ) | (1,521 | ) | (59 | ) | (1,092 | ) | (347 | ) | ||||||||||
Consumer and other
|
(116 | ) | (237 | ) | (53 | ) | (88 | ) | (55 | ) | ||||||||||
Commercial and industrial loans
|
(156 | ) | (44 | ) | (146 | ) | (9 | ) | (160 | ) | ||||||||||
Recoveries:
|
||||||||||||||||||||
Residential mortgages
|
56 | 12 | — | — | — | |||||||||||||||
Construction loans
|
— | 1 | — | 5 | — | |||||||||||||||
Consumer and other
|
4 | 8 | 9 | 13 | 19 | |||||||||||||||
Commercial and industrial loans
|
22 | 38 | 1 | 28 | 68 | |||||||||||||||
Balance at end of year
|
$ | 6,922 | $ | 8,100 | $ | 8,328 | $ | 5,215 | $ | 3,855 | ||||||||||
Ratio of net charge-offs
during the period to
average loans outstanding
during the period
|
0.70 | % | 0.79 | % | 0.22 | % | 0.29 | % | 0.09 | % | ||||||||||
Ratio of allowance for loan
losses to nonperforming
loans at the end of the
period
|
82.81 | % | 64.59 | % | 43.88 | % | 63.00 | % | 73.00 | % | ||||||||||
Ratio of allowance for loan
losses to loans receivable
at the end of the period
|
1.30 | % | 1.61 | % | 1.63 | % | 0.98 | % | 0.71 | % |
At December 31,
|
||||||||||||||||||||||||||||||||||||||||
2012
|
2011
|
2010
|
2009
|
2008
|
||||||||||||||||||||||||||||||||||||
Amount
|
Percent of Loans
to Total Loans
|
Amount
|
Percent of Loans
to Total Loans
|
Amount
|
Percent of Loans
to Total Loans
|
Amount
|
Percent of Loans
to Total Loans
|
Amount
|
Percent of Loans
to Total Loans
|
|||||||||||||||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||||||||||||||||||
At end of period allocated to:
|
||||||||||||||||||||||||||||||||||||||||
Residential mortgages
|
$ | 1,849 | 60.8 | % | $ | 2,194 | 55.5 | % | $ | 1,839 | 52.8 | % | $ | 962 | 50.9 | % | $ | 1,461 | 51.5 | % | ||||||||||||||||||||
Commercial – real estate secured
|
2,607 | 27.3 | % | 3,071 | 31.2 | % | 3,099 | 32.2 | % | 2,031 | 31.5 | % | 1,108 | 30.7 | % | |||||||||||||||||||||||||
Construction loans
|
1,697 | 3.1 | % | 1,830 | 3.2 | % | 2,479 | 3.7 | % | 1,736 | 5.5 | % | 953 | 5.6 | % | |||||||||||||||||||||||||
Consumer and other loans
|
262 | 7.9 | % | 470 | 9.2 | % | 623 | 10.2 | % | 317 | 10.7 | % | 259 | 10.7 | % | |||||||||||||||||||||||||
Commercial and industrial loans
|
119 | 0.9 | % | 138 | 0.9 | % | 76 | 1.1 | % | 169 | 1.4 | % | 74 | 1.5 | % | |||||||||||||||||||||||||
Unallocated
|
388 | — | % | 397 | — | % | 212 | — | % | — | — | % | — | — | % | |||||||||||||||||||||||||
Total allowance
|
$ | 6,922 | 100.0 | % | $ | 8,100 | 100.0 | % | $ | 8,328 | 100.0 | % | $ | 5,215 | 100.0 | % | $ | 3,855 | 100.0 | % |
|
Investment Securities
|
At December 31,
|
||||||||||||||||||||||||
2012
|
2011
|
2010
|
||||||||||||||||||||||
Amortized
Cost
|
Fair
Value
|
Amortized
Cost
|
Fair
Value
|
Amortized
Cost
|
Fair
Value
|
|||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||
Interest-earning deposits
|
$ | 26,440 | $ | 26,440 | $ | 10,430 | $ | 10,430 | $ | 4,219 | $ | 4,219 | ||||||||||||
Securities available for sale:
|
||||||||||||||||||||||||
U.S. government and agency obligations
|
$ | — | $ | — | $ | 2,995 | $ | 3,030 | $ | 6,000 | $ | 6,059 | ||||||||||||
State and political subdivisions
|
55,254 | 59,610 | 51,287 | 55,091 | 47,348 | 48,208 | ||||||||||||||||||
Corporate debt securities
|
— | — | — | — | 3,340 | 3,563 | ||||||||||||||||||
Total
|
$ | 55,254 | $ | 59,610 | $ | 54,282 | $ | 58,121 | $ | 56,688 | $ | 57,830 | ||||||||||||
|
Investment Portfolio Maturities
|
One Year or Less
|
One to Five Years
|
Five to Ten Years
|
More than Ten Years
|
Total Investment Securities
|
||||||||||||||||||||||||||||||||||||||||
Amortized
|
Average
|
Amortized
|
Average
|
Amortized
|
Average
|
Amortized
|
Average
|
Amortized
|
Average
|
Fair
|
||||||||||||||||||||||||||||||||||
Cost
|
Yield
|
Cost
|
Yield
|
Cost
|
Yield
|
Cost
|
Yield
|
Cost
|
Yield
|
Value
|
||||||||||||||||||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||||||||||||||||||||||
State and
political
subdivisions
|
$ | 602 | 5.18 | % | $ | 9,514 | 5.30 | % | $ | 25,154 | 5.11 | % | $ | 19,984 | 5.20 | % | $ | 55,254 | 5.18 | % | $ | 59,610 |
At December 31,
|
||||||||||||||||||||||||||||||||||||
2012
|
2011
|
2010
|
||||||||||||||||||||||||||||||||||
Amount
|
Percent of Total Deposits
|
Weighted Average Nominal
Rate
|
Amount
|
Percent of Total Deposits
|
Weighted Average Nominal
Rate
|
Amount
|
Percent of Total Deposits
|
Weighted Average Nominal
Rate
|
||||||||||||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||||||||||||||
Transaction Accounts:
|
||||||||||||||||||||||||||||||||||||
Interest-bearing checking accounts
|
$ | 76,370 | 13.63 | % | 0.23 | % | $ | 65,677 | 11.91 | % | 0.34 | % | $ | 56,157 | 10.21 | % | 0.31 | % | ||||||||||||||||||
Money market accounts
|
153,827 | 27.45 | % | 0.51 | % | 155,010 | 28.12 | % | 0.62 | % | 149,744 | 27.22 | % | 0.80 | % | |||||||||||||||||||||
Noninterest-bearing checking accounts
|
52,433 | 9.36 | % | — | 43,910 | 7.96 | % | — | 40,389 | 7.34 | % | — | ||||||||||||||||||||||||
Total transaction accounts
|
282,630 | 50.44 | % | 0.34 | % | 264,597 | 47.99 | % | 0.45 | % | 246,290 | 44.77 | % | 0.56 | % | |||||||||||||||||||||
Passbook accounts
|
106,268 | 18.97 | % | 0.23 | % | 105,617 | 19.16 | % | 0.39 | % | 99,686 | 18.12 | % | 0.46 | % | |||||||||||||||||||||
Certificates of deposit
|
171,417 | 30.59 | % | 1.06 | % | 181,074 | 32.85 | % | 1.56 | % | 204,159 | 37.11 | % | 2.08 | % | |||||||||||||||||||||
Total deposits
|
$ | 560,315 | 100.00 | % | 0.54 | % | $ | 551,288 | 100.00 | % | 0.79 | % | $ | 550,135 | 100.00 | % | 1.10 | % |
Maturing Period
|
Amount
|
|||
(In thousands)
|
||||
Three months or less
|
$ | 5,651 | ||
Over three through six months
|
6,829 | |||
Over six through 12 months
|
20,393 | |||
Over 12 months
|
17,841 | |||
Total
|
$ | 50,714 |
At December 31,
|
||||||||||||
2012
|
2011
|
2010
|
||||||||||
(Dollars in thousands)
|
||||||||||||
|
||||||||||||
FHLB advances
|
$ | 60,656 | $ | 46,908 | $ | 61,987 | ||||||
Weighted average interest rate
|
1.88 | % | 3.37 | % | 3.73 | % |
Years Ended December 31,
|
||||||||||||
2012
|
2011
|
2010
|
||||||||||
(Dollars in thousands)
|
||||||||||||
Maximum balance of FHLB advances
|
$ | 83,238 | $ | 65,001 | $ | 82,299 | ||||||
Weighted average balance of FHLB advances
|
56,837 | 55,274 | 74,758 | |||||||||
Weighted average interest rate of FHLB advances
|
2.47 | % | 3.52 | % | 3.93 | % |
|
Subsidiary Activity
|
|
Personnel
|
·
|
Merges the Office of Thrift Supervision (“OTS”) into the Office of the Comptroller of the Currency (“OCC”) and restructures the authority of the other two bank regulatory agencies. The federal thrift charter is preserved with the Federal Reserve given authority over savings and loan holding companies.
|
||
·
|
Creates a new agency, the Bureau of Consumer Financial Protection (“CFPB”), to centralize responsibility for consumer financial protection responsible for implementing, examining and enforcing compliance with federal consumer financial laws such as the Truth in Lending Act, the Equal Credit Opportunity Act, the Real Estate Settlement Procedures Act and the Truth in Saving Act, among others. Depository institutions that have assets of $10 billion or less, such as us, will continue to be supervised by their primary federal regulators. The CFPB will also have data collecting powers for fair lending purposes for small business and mortgage loans, as well as authority to prevent unfair, deceptive and abusive practices.
|
||
·
|
Imposes new consumer protection requirements in mortgage loan transactions, including requiring creditors to make reasonable, good faith determinations that consumers have a reasonable ability to repay mortgage loans, prohibiting originators of residential mortgage loans from being paid compensation (such as a “yield spread premium”) that varies based on the terms of the loan other than the principal amount of the loan, requiring new disclosure requirements for residential mortgage loans, requiring additional disclosures in periodic loan account statements, amending the Truth-in-Lending Act’s “high-cost” mortgage provisions, and adopting certain other revisions.
|
||
·
|
Changes the assessment base for federal deposit insurance from the amount of insured deposits to consolidated assets less tangible capital, eliminates the ceiling on the size of the FDIC’s Deposit Insurance Fund (“DIF”), and increases the required minimum reserve ratio for the DIF, from 1.15% to 1.35% of insured deposits.
|
·
|
Increases the maximum amount of deposit insurance for banks, savings institutions and credit unions to $250,000 per depositor, retroactive to January 1, 2008, with noninterest-bearing transaction accounts having unlimited deposit insurance through December 31, 2012.
|
||
·
|
Adopts changes to corporate governance requirements, including requiring shareholder votes on executive compensation and proxy access by shareholders that apply to all public companies.
|
·
|
Repeals various banking law provisions prohibiting the payment of interest on demand deposits.
|
||
·
|
Requires the Federal Reserve to adopt rules to regulate the reasonableness of debit card interchange fees charged by financial institutions with $10 billion or more in assets with respect to electronic debit transactions. The amount of such fees must be “reasonable and proportional” to the cost incurred by the issuer. Issuers that, together with their affiliates, have assets of less than $10 billion would not be covered by the rules.
|
|
Company Regulation
|
|
Bank Regulation
|
Item 1A.
|
Risk Factors
|
Item 1B.
|
Unresolved Staff Comments
|
Item 2.
|
Properties
|
Location
|
Leased or Owned
|
|
ADMINISTRATIVE OFFICE
|
||
Newtown Office
|
Owned
|
|
3 Penns Trail
|
||
Newtown, PA 18940
|
||
BRANCH AND LOAN OFFICES
|
||
Frankford Office
|
Leased
|
|
4625 Frankford Avenue
|
||
Philadelphia, PA 19124
|
||
Ewing Office
|
Owned
|
|
2075 Pennington Road
|
||
Ewing, NJ 08618
|
Hamilton Office
|
Owned
|
|
1850 Route 33
|
||
Hamilton Square, NJ 08690
|
||
Fishtown Office
|
Owned
|
|
York & Memphis Streets
|
||
Philadelphia, PA 19125
|
||
Cross Keys Office
|
Owned
|
|
834 North Easton Road
|
||
Doylestown, PA 18902
|
||
Bridesburg Office
|
Owned
|
|
Orthodox & Almond Streets
|
||
Philadelphia, PA 19137
|
||
New Britain Office
|
Leased
|
|
600 Town Center
|
||
New Britain, PA 18901
|
||
Newtown Office
|
Leased
|
|
950 Newtown Yardley Road
|
||
Newtown, PA 18940
|
||
Mayfair Office
|
Owned
|
|
Roosevelt Blvd. at Unruh
|
||
Philadelphia, PA 19149
|
||
Doylestown Office
|
Owned
|
|
60 North Main Street
|
||
Doylestown, PA 18901
|
||
Feasterville Office
|
Leased
|
|
1201 Buck Road
|
||
Feasterville, PA 19053
|
||
Woodhaven Office
|
Leased
|
|
12051 Knights Road
|
||
Philadelphia, PA 19154
|
||
Girard Office
|
Leased
|
|
136 West Girard Avenue
|
||
Philadelphia, PA 19123
|
||
PROCESSING OPERATIONS
|
||
Operations Center
|
Owned
|
|
62-66 Walker Lane
|
||
Newtown, PA 18940
|
||
Operations Center
|
Leased
|
|
98 Walker Lane
|
||
Newtown, PA 18940
|
Item 3.
|
Legal Proceedings
|
Item 4.
|
Mine Safety Disclosures
|
Item 5.
|
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
Total Number of
|
Maximum Number of
|
|||||||
Shares Purchased as
|
Shares that may yet
|
|||||||
Part of Publicly
|
be Purchased Under
|
|||||||
Total Number of
|
Average Price
|
Announced Plan or
|
the Plans or
|
|||||
Month |
Shares Purchased
|
Paid per Share
|
Program
|
Programs
|
||||
October 1, 2012 - October 31, 2012
|
—
|
|
—
|
|
—
|
|
101,957
|
|
|
|
|
|
|
|
|||
November 1, 2012 - November 30, 2012
|
—
|
|
—
|
|
—
|
|
101,957
|
|
|
|
|
|
|
|
|
||
December 1, 2012 - December 31, 2012
|
—
|
|
—
|
|
—
|
|
101,957
|
Item 6.
|
Selected Financial Data
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
Item 7A.
|
Quantitative and Qualitative Disclosures about Market Risk
|
Item 8.
|
Financial Statements and Supplementary Data
|
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
Item 9A.
|
Controls and Procedures
|
(a)
|
Disclosure Controls and Procedures
|
(b)
|
Internal Control Over Financial Reporting
|
(c)
|
Changes in Internal Control Over Financial Reporting.
|
Item 9B.
|
Other Information
|
Item 10.
|
Directors, Executive Officers and Corporate Governance
|
Item 11.
|
Executive Compensation
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters
|
|
(a)
|
Security Ownership of Certain Beneficial Owners
|
|
(b)
|
Security Ownership of Management
|
|
(c)
|
Management of the Company knows of no arrangements, including any pledge by any person of securities of the Company, the operation of which may at a subsequent date result in a change in control of the registrant.
|
|
(d)
|
Securities Authorized for Issuance Under Equity Compensation Plans
|
EQUITY COMPENSATION PLAN INFORMATION
(a)
|
(b)
|
(c)
|
||||||||||
Number of Securities to be issued upon exercise of outstanding options, warrants and rights
|
Weighted-average exercise price of outstanding options, warrants and rights
|
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)
|
||||||||||
Equity compensation plans approved by shareholders
|
89,279 | $ | 24.08 | 275,000 | ||||||||
Equity compensation plans not approved by shareholders
|
— | — | — | |||||||||
Total
|
89,279 | $ | 24.08 | 275,000 |
|
For information regarding the material features of the Registrant’s equity compensation plans, see Note 1 and Note 10 to the Consolidated Financial Statements included as part of Exhibit 13 to this report.
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence
|
Item 14.
|
Principal Accountant Fees and Services
|
Item 15.
|
Exhibits and Financial Statement Schedules
|
(a)
|
The following documents are filed as a part of this report(1):
|
(1)
|
The following financial statements and the reports of the independent auditor of the Company included in the Company’s 2012 Annual Report to Stockholders are incorporated herein by reference.
|
|
Management’s Report on Internal Control Over Financial Reporting
|
|
Report of Independent Registered Public Accounting Firm
|
|
Consolidated Balance Sheets as of December 31, 2012 and 2011
|
|
Consolidated Statements of Income For the Years Ended December 31, 2012 and 2011
|
|
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2012 and 2011
|
|
Consolidated Statements of Changes in Stockholders’ Equity for the Years Ended December 31, 2012 and 2011
|
|
Consolidated Statements of Cash Flows for the Years Ended December 31, 2012 and 2011
|
|
Notes to Consolidated Financial Statements
|
2.1
|
Agreement and Plan of Merger, dated December 28, 2012, by and among TF Financial Corporation, 3rd Fed Bank, Roebling Financial Corp, Inc. and Roebling Bank (1)
|
3.1
|
Amended and Restated Articles of Incorporation of TF Financial Corporation (2)
|
3.2
|
|
4.0
|
Stock Certificate of TF Financial Corporation (3)
|
10.1
|
Third Federal Savings and Loan Association Management Stock Bonus Plan (3)
|
10.2
|
Third Federal Savings Bank Directors Consultation and Retirement Plan (4)
|
10.3
|
Severance Agreement with Kent C. Lufkin (5)
|
10.4
|
Agreement and General Release with Floyd P. Haggar (6)
|
10.5
|
Severance Agreement with Dennis R. Stewart (7)
|
10.6
|
TF Financial Corporation 1997 Stock Option Plan (8)
|
10.7
|
Severance Agreement with Robert N. Dusek (9)
|
10.8
|
TF Financial Corporation Incentive Compensation Plan (10)
|
10.9
|
TF Financial Corporation 2005 Stock-Based Incentive Plan (11)
|
10.10
|
Severance Agreement with Elizabeth Kaspern (12)
|
10.11
|
TF Financial Corporation Stock Repurchase Plan (13)
|
10.12
|
TF Financial Corporation 2011 Directors Stock Compensation Plan (14)
|
10.13
|
|
10.14
|
Agreement by and among TF Financial Corporation, Dennis Pollack, Lawrence B. Seidman, 2514 Multi-Strategy Fund, LP, Broad Park Investors, LLC, CBPS, LLC, LSBK06-08, LLC, Seidman and Associates, LLC, Seidman Investment Partnership, LP and Seidman Investment Partnership II, LP (15)
|
10.15
|
Amendment No. 1 to Agreement by and among TF Financial Corporation, Dennis Pollack, Lawrence B. Seidman, 2514 Multi-Strategy Fund, LP, Broad Park Investors, LLC, CBPS, LLC, LSBK06-08, LLC, Seidman and Associates, LLC, Seidman Investment Partnership, LP and Seidman Investment Partnership II, LP (16)
|
13.0
|
|
21.0
|
|
23.0
|
|
31.1
|
|
31.2
|
|
32.0
|
|
101.INS
|
XBRL Instance Document *
|
101.SCH
|
XBRL Taxonomy Extension Schema Document *
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document *
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document *
|
101.LAB
|
XBRL Taxonomy Extension Labels Linkbase Document *
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document *
|
*
|
Submitted as Exhibits 101 to this Form 10-K are documents formatted in XBRL (Extensible Business Reporting Language). Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability.
|
(1)
|
Incorporated herein by reference to the Registrant’s Form 8-K filed with the Securities and Exchange Commission on December 28, 2012.
|
(2)
|
Incorporated herein by reference to the Registrant’s Form 8-K filed with the Securities and Exchange Commission on May 4, 2011.
|
(3)
|
Incorporated herein by reference to the Exhibits to Form S-1, Registration Statement, File No. 33-76960.
|
(4)
|
Incorporated herein by reference to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1995.
|
(5)
|
Incorporated herein by reference to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2000.
|
(6)
|
Incorporated herein by reference to the Registrant’s Form 8-K/A filed with the Securities and Exchange Commission on February 21, 2013.
|
(7)
|
Incorporated herein by reference to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1999.
|
(8)
|
Incorporated herein by reference to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1997.
|
(9)
|
Incorporated herein by reference to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001.
|
(10)
|
Incorporated herein by reference to the Registrant’s Form 8-K filed with the Securities and Exchange Commission on October 20, 2004.
|
(11)
|
Incorporated herein by reference to the Registrant’s Form S-8 filed with the Securities and Exchange Commission on May 20, 2005.
|
(12)
|
Incorporated herein by reference to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006.
|
(13)
|
Incorporated herein by reference to the Registrant’s Form 8-K filed with the Securities and Exchange Commission on October 25, 2007.
|
(14)
|
Incorporated herein by reference to the Registrant’s Form S-8 filed with the Securities and Exchange Commission on June 29, 2011.
|
(15)
|
Incorporated herein by reference to the Registrant’s Form 8-K filed with the Securities and Exchange Commission on November 7, 2011.
|
(16)
|
Incorporated herein by reference to the Registrant’s Form 8-K filed with the Securities and Exchange Commission on December 5, 2012.
|
TF FINANCIAL CORPORATION
|
||
Dated: March 27, 2013
|
By:
|
/s/ Kent C. Lufkin
|
Kent C. Lufkin
|
||
President and Chief Executive Officer
|
||
(Duly Authorized Representative)
|
By:
|
/s/ Kent C. Lufkin
|
By:
|
/s/ Dennis R. Stewart
|
|
Kent C. Lufkin
|
Dennis R. Stewart
|
|||
President and Chief Executive Officer
(Principal Executive Officer)
|
Executive Vice President, Chief Financial Officer and Treasurer
(Principal Financial and Accounting Officer)
|
|||
By:
|
/s/ Robert N. Dusek
|
By:
|
/s/ Carl F. Gregory
|
|
Robert N. Dusek
|
Carl F. Gregory
|
|||
Chairman of the Board
|
Director
|
|||
By:
|
/s/ Dennis Pollack
|
By:
|
/s/ Joseph F. Slabinski, III
|
|
Dennis Pollack
|
Joseph F. Slabinski, III
|
|||
Director
|
Director
|
|||
By:
|
/s/ Kenneth A. Swanstrom
|
By:
|
/s/ Albert M. Tantala, Sr.
|
|
Kenneth A. Swanstrom
|
Albert M. Tantala, Sr.
|
|||
Director
|
Director
|
|||
By:
|
/s/ James B. Wood
|
|||
James B. Wood
|
||||
Director
|
|
2.
|
determine the type, number, vesting requirements and other features and conditions of such Awards,
|
|
4.
|
make all other decisions relating to the operation of the Plan.
|
|
5.
|
the manner, time, and rate (cumulative or otherwise) of exercise or vesting of such Award; and
|
|
6.
|
the restrictions, if any, placed upon such Award, or upon shares which may be issued upon exercise of such Award.
|
|
1.
|
the determination of forms of payment to be made by or received by the Plan and
|
|
2.
|
the execution of any Award Agreement.
|
10.
|
ADJUSTMENTS IN CAPITAL STRUCTURE; ACCELERATION UPON A CHANGE IN CONTROL.
|
|
(a)
|
proportionately adjust any or all of: (1) the number and type of shares of Common Stock (or other securities) that thereafter may be made the subject of Awards (including the specific share limits, maximums and numbers of shares set forth elsewhere in this Plan); (2) the number, amount and type of shares of Common Stock (or other securities or property) subject to any or all outstanding Awards; (3) the grant, purchase, or Exercise Price of any or all outstanding Awards; (4) the securities, cash or other property deliverable upon exercise or payment of any outstanding Awards; or (5) the performance standards applicable to any outstanding Awards; or
|
|
(b)
|
make provision for a cash payment or for the assumption, substitution or exchange of any or all outstanding Awards, based upon the distribution or consideration payable to holders of the Common Stock.
|
|
Tax Withholding. Upon any exercise, vesting, or payment of any Award, the Corporation shall have the right, within its sole discretion, to:
|
|
(i)
|
require the Participant (or the Participant’s personal representative or Beneficiary, as the case may be) to pay or provide for payment of at least the minimum amount of any taxes which the Corporation may be required to withhold with respect to such Award or payment; or
|
|
(ii)
|
deduct from any amount otherwise payable in cash to the Participant (or the Participant’s personal representative or Beneficiary, as the case may be) the minimum amount of any taxes which the Corporation may be required to withhold with respect to such cash payment, or
|
|
(iii)
|
in any case where tax withholding is required in connection with the delivery of shares of Common Stock under this Plan, the Committee may, in its sole discretion, pursuant to such rules and subject to such conditions as the Committee may establish, reduce the number of shares to be delivered to the Participant by the appropriate number of shares, valued in a consistent manner at their Fair Market Value as necessary to satisfy the minimum applicable withholding obligation. In no event shall the shares withheld exceed the minimum whole number of shares required for tax withholding under applicable law.
|
|
11.6
|
Effective Date, Termination and Suspension, Amendments.
|
|
(a)
|
Effective Date and Termination. This Plan is effective upon the later of approval of the Plan by the Board of Directors of the Corporation or the vote of approval by the stockholders of the Corporation (“Approval Date”). Unless earlier terminated by the Board, this Plan shall terminate at the close of business on the day before the tenth anniversary of the Approval Date. After the termination of this Plan either upon such stated expiration date or its earlier termination by the Board, no additional Awards may be granted under this Plan, but previously granted Awards (and the authority of the Committee with respect thereto, including the authority to amend such Awards) shall remain outstanding in accordance with their applicable terms and conditions and the terms and conditions of this Plan.
|
|
(b)
|
Board Authorization. Subject to applicable laws and regulations, the Board of Directors may, at any time, terminate or, from time to time, amend, modify or suspend this Plan, in whole or in part; provided, however, that no such amendment may have the effect of repricing the Exercise Price of Options. No Awards may be granted during any period that the Board of Directors suspends this Plan.
|
|
(c)
|
Stockholder Approval. The Plan must be approved by a majority of votes cast by stockholders of the Corporation by proxy or in person within 12 months of the date the Plan is approved by the Board.
|
|
(d)
|
Limitations on Amendments to Plan and Awards. No amendment, suspension or termination of this Plan or change affecting any outstanding Award shall, without the written consent of the Participant, affect in any manner materially adverse to the Participant any rights or benefits of the Participant or obligations of the Corporation under any Award granted under this Plan prior to the effective date of such change. Changes, settlements and other actions contemplated by Section 10 shall not be deemed to constitute changes or amendments for purposes of this Section 11.6.
|
|
11.7
|
Governing Law; Compliance with Regulations; Construction; Severability.
|
|
(a)
|
Construction. This Plan, the Awards, all documents evidencing Awards and all other related documents shall be governed by, and construed in accordance with, the laws of the United States and the laws of the Commonwealth of Pennsylvania to the extent not preempted by Federal law.
|
|
(b)
|
Severability. If a court of competent jurisdiction holds any provision invalid and unenforceable, the remaining provisions of this Plan shall continue in effect.
|
|
(c)
|
Section 16 of Exchange Act. It is the intent of the Corporation that the Awards and transactions permitted by Awards be interpreted in a manner that, in the case of Participants who are or may be subject to Section 16 of the Exchange Act, qualify, to the maximum extent compatible with the express terms of the Award, for exemption from matching liability under Rule 16b-3 promulgated under the Exchange Act. Notwithstanding the foregoing, the Corporation shall have no liability to any Participant for Section 16 consequences of Awards or events affecting Awards if an Award or event does not so qualify.
|
|
(d)
|
Compliance with Law. Shares of Common Stock shall not be issued with respect to any Award granted under the Plan unless the issuance and delivery of such shares shall comply with all relevant provisions of applicable law, including, without limitation, the Securities Act of 1933, as amended, the rules and regulations promulgated thereunder, any applicable state securities laws and the requirements of any stock exchange upon which the shares may then be listed.
|
|
(e)
|
Necessary Approvals. The inability of the Corporation to obtain any necessary authorizations, approvals or letters of non-objection from any
|
|
(f)
|
Representations and Warranties of Participants. As a condition to the exercise of any Option or the delivery of shares in accordance with an Award, the Corporation may require the person exercising the Option or receiving delivery of the shares to make such representations and warranties as may be necessary to assure the availability of an exemption from the registration requirements of federal or state securities law.
|
|
(g)
|
Cash Payment in Lieu of Delivery of Shares. Upon the exercise of an Option, the Committee, in its sole and absolute discretion, may make a cash payment to the Participant, in whole or in part, in lieu of the delivery of shares of Common Stock. Such cash payment to be paid in lieu of delivery of Common Stock shall be equal to the difference between the Fair Market Value of the Common Stock on the date of the Option exercise and the exercise price per share of the Option. Such cash payment shall be in exchange for the cancellation of such Option. Such cash payment shall not be made in the event that such transaction would result in liability to the Participant or the Corporation under Section 16(b) of the Exchange Act and regulations promulgated thereunder, or subject the Participant to additional tax liabilities related to such cash payments pursuant to Section 409A of the Code.
|
|
(h)
|
Forfeiture of Awards in Certain Circumstances. In addition to any forfeiture or reimbursement conditions the Committee may impose upon an Award, a Participant may be required to forfeit an Award, or reimburse the Corporation for the value of a prior Award, by virtue of the requirement of Section 304 of the Sarbanes-Oxley Act of 2002 (or by virtue of any other applicable statutory or regulatory requirement), but only to the extent that such forfeiture or reimbursement is required by such statutory or regulatory provision. Unless otherwise determined by the Committee, in the event of a forfeiture of an Award with respect to which a Participant paid cash consideration, the Participant shall be repaid the amount of such cash consideration.
|
|
(i)
|
Termination for Cause. Notwithstanding anything herein to the contrary, upon the Termination for Cause of a Participant by the Bank or the Corporation as determined by the Board of Directors or the Committee, all Awards held by such Participant which have not yet been delivered shall be forfeited by such Participant as of the date of such termination of employment or service.
|
1.
|
The capital of the Company is adequate for the current and projected business operations of the Company.
|
2.
|
The liquidity of the Company after the payment of the dividend is adequate to fund the operations of the Company for a reasonable period of time into the future.
|
3.
|
In light of the fact that the primary source of liquidity with which to pay dividends is dividend payments from the subsidiary Bank, the Board considers a number of factors specifically applicable to the Bank, such as its expected level of earnings and capital, and the possibility of regulatory restrictions. Among other limitations, 3rd Fed may not declare or pay a cash dividend on any of its stock if the effect thereof would cause 3rd Fed’s regulatory capital to be reduced below (1) the amount required for the liquidation account established in connection with 3rd Fed’s conversion from mutual to stock form, or (2) the regulatory capital requirements imposed by federal banking agencies.
|
Quoted market price
|
Dividend paid
|
|||||||||||
Quarter ended
|
High
|
Low
|
per share | |||||||||
December 31, 2012
|
$ | 24.84 | $ | 22.06 | $ | 0.05 | ||||||
September 30, 2012
|
$ | 24.90 | $ | 22.50 | $ | 0.05 | ||||||
June 30, 2012
|
$ | 26.47 | $ | 22.26 | $ | 0.05 | ||||||
March 31, 2012
|
$ | 25.96 | $ | 22.30 | $ | 0.05 | ||||||
December 31, 2011
|
$ | 23.00 | $ | 18.54 | $ | 0.05 | ||||||
September 30, 2011
|
$ | 22.38 | $ | 19.17 | $ | 0.05 | ||||||
June 30, 2011
|
$ | 22.09 | $ | 20.92 | $ | 0.05 | ||||||
March 31, 2011
|
$ | 22.76 | $ | 20.37 | $ | 0.05 |
For the year ended December 31,
|
||||||||||||||||||||||||
2012
|
2011
|
|||||||||||||||||||||||
Average
|
Average
|
Average
|
Average
|
|||||||||||||||||||||
balance | Interest | yld/cost | balance | Interest | yld/cost | |||||||||||||||||||
ASSETS
|
||||||||||||||||||||||||
Interest-earning assets:
|
||||||||||||||||||||||||
Loans receivable, net (1)
|
$ | 513,178 | $ | 25,205 | 4.91 | % | $ | 500,095 | $ | 26,373 | 5.27 | % | ||||||||||||
Mortgage-backed securities
|
57,164 | 1,933 | 3.38 | % | 64,416 | 2,718 | 4.22 | % | ||||||||||||||||
Investment securities (2)
|
65,813 | 2,849 | 4.33 | % | 67,747 | 2,885 | 4.26 | % | ||||||||||||||||
Other interest-earning assets (3)
|
6,155 | 8 | 0.13 | % | 5,406 | 3 | 0.06 | % | ||||||||||||||||
Total interest-earning assets
|
642,310 | 29,995 | 4.67 | % | 637,664 | 31,979 | 5.02 | % | ||||||||||||||||
Noninterest-earning assets
|
47,726 | 50,390 | ||||||||||||||||||||||
Total assets
|
$ | 690,036 | $ | 688,054 | ||||||||||||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||||||||||||||||||
Interest-bearing liabilities:
|
||||||||||||||||||||||||
Deposits
|
$ | 545,677 | 3,532 | 0.65 | % | $ | 550,019 | 5,467 | 0.99 | % | ||||||||||||||
Advances from the FHLB
|
56,837 | 1,405 | 2.47 | % | 55,274 | 1,948 | 3.52 | % | ||||||||||||||||
Total interest-bearing liabilities
|
602,514 | 4,937 | 0.82 | % | 605,293 | 7,415 | 1.23 | % | ||||||||||||||||
Noninterest-bearing liabilities
|
6,957 | 6,802 | ||||||||||||||||||||||
Total liabilities
|
609,471 | 612,095 | ||||||||||||||||||||||
Stockholders’ equity
|
80,565 | 75,959 | ||||||||||||||||||||||
Total liabilities and stockholders’ equity
|
$ | 690,036 | $ | 688,054 | ||||||||||||||||||||
Net interest income—tax equivalent basis
|
25,058 | 24,564 | ||||||||||||||||||||||
Interest rate spread (4)—tax equivalent basis
|
3.85 | % | 3.79 | % | ||||||||||||||||||||
Net yield on interest-earning assets (5)—tax
equivalent basis
|
3.90 | % | 3.85 | % | ||||||||||||||||||||
Ratio of average interest-earning assets to
average interest-bearing liabilities
|
106.60 | % | 105.35 | % | ||||||||||||||||||||
Less: tax equivalent interest adjustment
|
(775 | ) | (691 | ) | ||||||||||||||||||||
Net interest income
|
$ | 24,283 | $ | 23,873 | ||||||||||||||||||||
Interest rate spread (4)
|
3.73 | % | 3.68 | % | ||||||||||||||||||||
Net yield on interest-earning assets (5)
|
3.78 | % | 3.74 | % |
|
(1)
|
Nonaccrual loans have been included in the appropriate average loan balance category, but interest on nonaccrual loans has not been included for purposes of determining interest income.
|
|
(2)
|
Tax equivalent adjustments to interest on investment securities were $775,000 and $691,000 for the years ended December 31, 2012 and 2011 respectively. Tax equivalent interest income is based upon a marginal effective tax rate of 34%.
|
|
(3)
|
Includes interest-bearing deposits in other banks.
|
|
(4)
|
Interest rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities.
|
|
(5)
|
Net yield on interest-earning assets represents net interest income as a percentage of average interest-earning assets.
|
For the year ended December 31,
|
||||||||||||
2012 vs 2011
Increase (decrease) due to
|
||||||||||||
Volume
|
Rate
|
Net
|
||||||||||
(in thousands)
|
||||||||||||
Interest income:
|
||||||||||||
Loans receivable, net
|
$ | 677 | $ | (1,845 | ) | $ | (1,168 | ) | ||||
Mortgage-backed securities
|
(284 | ) | (501 | ) | (785 | ) | ||||||
Investment securities (1)
|
(83 | ) | 47 | (36 | ) | |||||||
Other interest-earning assets
|
1 | 4 | 5 | |||||||||
Total interest-earning assets
|
311 | (2,295 | ) | (1,984 | ) | |||||||
Interest expense:
|
||||||||||||
Deposits
|
(43 | ) | (1,892 | ) | (1,935 | ) | ||||||
Advances from the FHLB
|
54 | (597 | ) | (543 | ) | |||||||
Total interest-bearing liabilities
|
11 | (2,489 | ) | (2,478 | ) | |||||||
Net change in net interest income
|
$ | 300 | $ | 194 | $ | 494 |
|
(1)
|
Tax equivalent adjustments to interest on investment securities were $775,000 and $691,000 for the years ended December 31, 2012 and 2011 respectively. Tax equivalent interest income is based upon a marginal effective rate of 34%.
|
NPV Amount
|
NPV Ratio
|
|||||||||||||||||||||||
Change in Interest
Rates
|
NPV Amount
|
NPV Ratio
|
% Change
|
Policy Limitation
|
% Change
|
Policy Limitation
|
||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||
+400 Basis Points
|
$ | 90,180 | 14.50 | % | -26 | % | -50 | % | -2.64 | % | -5.00 | % | ||||||||||||
+300 Basis Points
|
95,585 | 14.90 | % | -22 | % | -45 | % | -2.24 | % | -5.00 | % | |||||||||||||
+200 Basis Points
|
103,848 | 15.63 | % | -15 | % | -35 | % | -1.51 | % | -6.00 | % | |||||||||||||
+100 Basis Points
|
113,032 | 16.43 | % | -7 | % | -25 | % | -0.71 | % | -7.00 | % | |||||||||||||
Flat Rates
|
121,848 | 17.14 | % | — | % | — | % | — | % | — | % | |||||||||||||
-100 Basis Points
|
122,097 | 16.73 | % | — | % | -20 | % | -0.41 | % | -7.00 | % |
![]() |
![]() |
Kent C. Lufkin
President and Chief Executive Officer
|
Dennis R. Stewart
Executive Vice President and Chief Financial Officer
|
At December 31,
|
||||||||
2012
|
2011
|
|||||||
(in thousands)
|
||||||||
ASSETS
|
||||||||
Cash and cash equivalents
|
$ | 31,137 | $ | 14,928 | ||||
Investment securities
|
||||||||
Available for sale
|
102,284 | 114,503 | ||||||
Held to maturity (fair value of $2,271 and $2,928 as of
December 31, 2012 and 2011, respectively)
|
1,965 | 2,588 | ||||||
Loans receivable, net
|
526,720 | 494,125 | ||||||
Loans receivable, held for sale
|
706 | 488 | ||||||
Federal Home Loan Bank stock—at cost
|
5,431 | 7,657 | ||||||
Accrued interest receivable
|
2,460 | 2,610 | ||||||
Premises and equipment, net
|
6,108 | 6,559 | ||||||
Goodwill
|
4,324 | 4,324 | ||||||
Bank owned life insurance
|
19,109 | 18,506 | ||||||
Other assets
|
11,592 | 15,641 | ||||||
TOTAL ASSETS
|
$ | 711,836 | $ | 681,929 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Liabilities
|
||||||||
Deposits
|
$ | 560,315 | $ | 551,288 | ||||
Advances from the FHLB
|
60,656 | 46,908 | ||||||
Advances from borrowers for taxes and insurance
|
2,880 | 2,322 | ||||||
Accrued interest payable
|
817 | 1,375 | ||||||
Other liabilities
|
4,223 | 2,628 | ||||||
Total liabilities
|
628,891 | 604,521 | ||||||
Stockholders’ equity
|
||||||||
Preferred stock, no par value; 2,000,000 shares authorized at
December 31, 2012 and 2011, none issued
|
— | — | ||||||
Common stock, $0.10 par value; 10,000,000 shares authorized,
5,290,000 shares issued, 2,838,493 and 2,831,874 shares
outstanding at December 31, 2012 and 2011, respectively,
net of shares in treasury: 2012-2,451,507; 2011-2,458,126.
|
529 | 529 | ||||||
Additional paid-in capital
|
54,328 | 54,118 | ||||||
Unearned ESOP shares
|
(970 | ) | (1,097 | ) | ||||
Treasury stock—at cost
|
(50,896 | ) | (51,032 | ) | ||||
Retained earnings
|
78,984 | 74,144 | ||||||
Accumulated other comprehensive income
|
970 | 746 | ||||||
Total stockholders’ equity
|
82,945 | 77,408 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$ | 711,836 | $ | 681,929 |
For the year ended
December 31,
|
||||||||
2012
|
2011
|
|||||||
(in thousands, except
per share data)
|
||||||||
Interest income
|
||||||||
Loans, including fees
|
$ | 25,205 | $ | 26,373 | ||||
Investment securities
|
||||||||
Fully taxable
|
2,315 | 3,406 | ||||||
Exempt from federal taxes
|
1,692 | 1,506 | ||||||
Interest-bearing deposits and other
|
8 | 3 | ||||||
TOTAL INTEREST INCOME
|
29,220 | 31,288 | ||||||
Interest expense
|
||||||||
Deposits
|
3,532 | 5,467 | ||||||
Borrowings
|
1,405 | 1,948 | ||||||
TOTAL INTEREST EXPENSE
|
4,937 | 7,415 | ||||||
NET INTEREST INCOME
|
24,283 | 23,873 | ||||||
Provision for loan losses
|
2,400 | 3,728 | ||||||
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES
|
21,883 | 20,145 | ||||||
Noninterest income
|
||||||||
Service fees, charges and other operating income
|
1,771 | 1,698 | ||||||
Gain on sale of investment securities
|
85 | 760 | ||||||
Bank owned life insurance
|
603 | 638 | ||||||
Gain on sale of loans
|
1,350 | 524 | ||||||
Gain on disposition of premises and equipment
|
277 | — | ||||||
TOTAL NONINTEREST INCOME
|
4,086 | 3,620 | ||||||
Noninterest expense
|
||||||||
Compensation and benefits
|
10,982 | 10,525 | ||||||
Occupancy and equipment
|
2,795 | 2,972 | ||||||
Federal deposit insurance premiums
|
596 | 675 | ||||||
Professional fees
|
1,284 | 1,331 | ||||||
Marketing and advertising
|
346 | 312 | ||||||
Foreclosed real estate expense
|
811 | 805 | ||||||
Other operating
|
2,047 | 2,197 | ||||||
TOTAL NONINTEREST EXPENSE
|
18,861 | 18,817 | ||||||
INCOME BEFORE INCOME TAXES
|
7,108 | 4,948 | ||||||
Income tax expense
|
1,725 | 1,019 | ||||||
NET INCOME
|
$ | 5,383 | $ | 3,929 | ||||
Earnings per share—basic
|
$ | 1.97 | $ | 1.45 | ||||
Earnings per share—diluted
|
$ | 1.97 | $ | 1.45 | ||||
Weighted average shares outstanding:
|
||||||||
Basic
|
2,726,133 | 2,702,200 | ||||||
Diluted
|
2,729,762 | 2,702,710 |
For the year ended
December 31,
|
||||||||
2012
|
2011
|
|||||||
(in thousands)
|
||||||||
Net income
|
$ | 5,383 | $ | 3,929 | ||||
Other comprehensive income:
|
||||||||
Investment securities available for sale:
|
||||||||
Unrealized holding gains
|
321 | 3,023 | ||||||
Tax effect
|
(109 | ) | (1,028 | ) | ||||
Reclassification adjustment for gains realized in net income
|
(85 | ) | (760 | ) | ||||
Tax effect
|
29 | 258 | ||||||
Net of tax amount
|
156 | 1,493 | ||||||
Pension plan benefit adjustment:
|
||||||||
Related to actuarial losses and prior service cost
|
103 | (2,059 | ) | |||||
Tax effect
|
(35 | ) | 701 | |||||
Net of tax amount
|
68 | (1,358 | ) | |||||
Total other comprehensive income
|
224 | 135 | ||||||
Comprehensive income
|
$ | 5,607 | $ | 4,064 |
Accumulated
|
||||||||||||||||||||||||||||||||
Common Stock
|
Additional
|
Unearned
|
other
|
|||||||||||||||||||||||||||||
Par
|
paid-in
|
ESOP
|
Treasury
|
Retained
|
comprehensive
|
|||||||||||||||||||||||||||
Shares |
value
|
capital
|
shares
|
stock
|
Earnings
|
income (loss)
|
Total
|
|||||||||||||||||||||||||
(in thousands, except share data)
|
||||||||||||||||||||||||||||||||
Balance at December 31, 2010
|
2,694,676 | $ | 529 | $ | 53,964 | $ | (1,217 | ) | $ | (51,220 | ) | $ | 70,749 | $ | 611 | $ | 73,416 | |||||||||||||||
Allocation of ESOP shares
|
12,018 | — | 136 | 120 | — | — | — | 256 | ||||||||||||||||||||||||
Purchase of treasury stock
|
(5,439 | ) | — | — | — | (122 | ) | — | — | (122 | ) | |||||||||||||||||||||
Cash dividends-common stock
($0.20 per share)
|
— | — | — | — | — | (534 | ) | — | (534 | ) | ||||||||||||||||||||||
Director compensation
|
3,248 | — | — | — | 69 | — | — | 69 | ||||||||||||||||||||||||
Compensation expense-
restricted shares
|
— | — | 13 | — | — | — | — | 13 | ||||||||||||||||||||||||
Exercise of options
|
10,916 | — | (16 | ) | — | 227 | — | — | 211 | |||||||||||||||||||||||
Income tax benefit arising
from stock compensation
|
— | — | 3 | — | — | — | — | 3 | ||||||||||||||||||||||||
Stock option expense
|
— | — | 32 | — | — | — | — | 32 | ||||||||||||||||||||||||
Vesting of restricted stock grant
|
700 | — | (14 | ) | — | 14 | — | — | — | |||||||||||||||||||||||
Unrealized gains on securities,
net of tax
|
— | — | — | — | — | — | 1,493 | 1,493 | ||||||||||||||||||||||||
Adjustment to record funded
status of pension, net of tax
|
— | — | — | — | — | — | (1,358 | ) | (1,358 | ) | ||||||||||||||||||||||
Net income for the year ended
December 31, 2011
|
— | — | — | — | — | 3,929 | — | 3,929 | ||||||||||||||||||||||||
Balance at December 31, 2011
|
2,716,119 | 529 | 54,118 | (1,097 | ) | (51,032 | ) | 74,144 | 746 | 77,408 | ||||||||||||||||||||||
Allocation of ESOP shares
|
13,104 | — | 190 | 127 | — | — | — | 317 | ||||||||||||||||||||||||
Cash dividends-common stock
($0.20 per share)
|
— | — | — | — | — | (543 | ) | — | (543 | ) | ||||||||||||||||||||||
Director compensation
|
6,304 | — | 20 | — | 129 | — | — | 149 | ||||||||||||||||||||||||
Exercise of options
|
315 | — | — | — | 7 | — | — | 7 | ||||||||||||||||||||||||
Deferred tax adjustment arising
from stock compensation
|
— | — | (27 | ) | — | — | — | — | (27 | ) | ||||||||||||||||||||||
Stock option expense
|
— | — | 27 | — | — | — | — | 27 | ||||||||||||||||||||||||
Unrealized gains on securities,
net of tax
|
— | — | — | — | — | — | 156 | 156 | ||||||||||||||||||||||||
Adjustment to record funded
status of pension, net of tax
|
— | — | — | — | — | — | 68 | 68 | ||||||||||||||||||||||||
Net income for the year ended
December 31, 2012
|
— | — | — | — | — | 5,383 | — | 5,383 | ||||||||||||||||||||||||
Balance at December 31, 2012
|
2,735,842 | $ | 529 | $ | 54,328 | $ | (970 | ) | $ | (50,896 | ) | $ | 78,984 | $ | 970 | $ | 82,945 |
For the year ended
December 31,
|
||||||||
2012
|
2011
|
|||||||
(in thousands)
|
||||||||
OPERATING ACTIVITIES
|
||||||||
Net income
|
$ | 5,383 | $ | 3,929 | ||||
Adjustments to reconcile net income to net cash
provided by operating activities:
|
||||||||
Amortization and impairment adjustment of mortgage loan
servicing rights
|
358 | 353 | ||||||
Premiums and discounts on investment securities, net
|
245 | 135 | ||||||
Premiums and discounts on mortgage-backed securities, net
|
320 | 166 | ||||||
Deferred loan origination costs, net
|
150 | 194 | ||||||
Deferred income taxes
|
1,194 | (77 | ) | |||||
Provision for loan losses
|
2,400 | 3,728 | ||||||
Depreciation of premises and equipment
|
781 | 853 | ||||||
Increase in value of bank owned life insurance
|
(603 | ) | (638 | ) | ||||
Stock-based compensation
|
493 | 370 | ||||||
Proceeds from sale of loans originated for sale
|
53,521 | 26,453 | ||||||
Origination of loans held for sale
|
(52,940 | ) | (26,525 | ) | ||||
Loss on foreclosed real estate
|
471 | 459 | ||||||
Gain on:
|
||||||||
Sale of investment securities
|
(85 | ) | (760 | ) | ||||
Sale of loans held for sale
|
(1,350 | ) | (524 | ) | ||||
Disposition of premises and equipment
|
(277 | ) | — | |||||
Decrease (increase) in:
|
||||||||
Accrued interest receivable
|
150 | 128 | ||||||
Other assets
|
(248 | ) | 419 | |||||
(Decrease) increase in:
|
||||||||
Accrued interest payable
|
(558 | ) | (409 | ) | ||||
Other liabilities
|
307 | 426 | ||||||
NET CASH PROVIDED BY OPERATING ACTIVITIES
|
$ | 9,712 | $ | 8,680 |
For the year ended
December 31,
|
||||||||
2012
|
2011
|
|||||||
(in thousands)
|
||||||||
INVESTING ACTIVITIES
|
||||||||
Loan originations
|
$ | (132,292 | ) | $ | (94,586 | ) | ||
Loan principal payments
|
93,622 | 92,523 | ||||||
Proceeds from sale of foreclosed real estate
|
7,626 | 836 | ||||||
Proceeds from disposition of premises and equipment
|
356 | — | ||||||
Proceeds from maturities of investment securities available for sale
|
5,765 | 6,860 | ||||||
Principal repayments on mortgage-backed securities held to maturity
|
622 | 583 | ||||||
Principal repayments on mortgage-backed securities available for sale
|
26,195 | 26,651 | ||||||
Proceeds from sale of investment securities available for sale
|
— | 9,206 | ||||||
Proceeds from sale of mortgage-backed securities available for sale
|
3,822 | 1,518 | ||||||
Purchase of investment securities available for sale
|
(6,982 | ) | (13,051 | ) | ||||
Purchase of mortgage-backed securities available for sale
|
(16,824 | ) | (18,646 | ) | ||||
Purchase of premises and equipment
|
(409 | ) | (615 | ) | ||||
Redemption of Federal Home Loan Bank stock
|
2,226 | 1,744 | ||||||
NET CASH (USED) PROVIDED BY INVESTING ACTIVITIES
|
(16,273 | ) | 13,023 | |||||
FINANCING ACTIVITIES
|
||||||||
Net increase in customer deposits
|
9,027 | 1,153 | ||||||
Proceeds of long-term FHLB borrowings
|
39,197 | 6,573 | ||||||
Repayment of long-term FHLB borrowings
|
(25,449 | ) | (21,652 | ) | ||||
Net increase in advances from borrowers for taxes and insurance
|
558 | 156 | ||||||
Treasury stock acquired
|
— | (122 | ) | |||||
Exercise of stock options
|
7 | 211 | ||||||
Deferred tax adjustment arising from stock compensation
|
(27 | ) | — | |||||
Tax benefit arising from stock compensation
|
— | 3 | ||||||
Common stock dividends paid
|
(543 | ) | (534 | ) | ||||
NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES
|
22,770 | (14,212 | ) | |||||
NET INCREASE IN CASH AND CASH EQUIVALENTS
|
16,209 | 7,491 | ||||||
Cash and cash equivalents at beginning of period
|
14,928 | 7,437 | ||||||
Cash and cash equivalents at end of period
|
$ | 31,137 | $ | 14,928 | ||||
Supplemental disclosure of cash flow information
|
||||||||
Cash paid for:
|
||||||||
Interest on deposits and borrowings
|
$ | 5,495 | $ | 7,824 | ||||
Income taxes
|
$ | 475 | $ | 1,030 | ||||
Noncash transactions:
|
||||||||
Capitalization of mortgage servicing rights
|
$ | 551 | $ | 238 | ||||
Transfers from loans to foreclosed real estate
|
$ | 3,525 | $ | 5,544 |
At December 31,
|
||||||||
2012
|
2011
|
|||||||
(in thousands)
|
||||||||
Cash and due from banks
|
$ | 4,697 | $ | 4,498 | ||||
Interest-bearing deposits in other financial institutions
|
26,440 | 10,430 | ||||||
$ | 31,137 | $ | 14,928 |
At December 31, 2012
|
||||||||||||||||
Gross
|
Gross
|
|||||||||||||||
Amortized
|
unrealized
|
unrealized
|
Fair
|
|||||||||||||
cost
|
gains
|
losses
|
value
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Available for sale
|
||||||||||||||||
State and political subdivisions
|
$ | 55,254 | $ | 4,360 | $ | (4 | ) | $ | 59,610 | |||||||
Residential mortgage-backed securities
issued by quasi-governmental agencies
|
41,265 | 1,409 | — | 42,674 | ||||||||||||
Total investment securities available for sale
|
96,519 | 5,769 | (4 | ) | 102,284 | |||||||||||
Held to maturity
|
||||||||||||||||
Residential mortgage-backed securities
issued by quasi-governmental agencies
|
1,965 | 306 | — | 2,271 | ||||||||||||
Total investment securities
|
$ | 98,484 | $ | 6,075 | $ | (4 | ) | $ | 104,555 |
At December 31, 2011
|
||||||||||||||||
Gross
|
Gross
|
|||||||||||||||
Amortized
|
unrealized
|
unrealized
|
Fair
|
|||||||||||||
cost
|
gains
|
losses
|
value
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Available for sale
|
||||||||||||||||
U.S. Government and federal agencies
|
$ | 2,995 | $ | 35 | $ | — | $ | 3,030 | ||||||||
State and political subdivisions
|
51,287 | 3,804 | — | 55,091 | ||||||||||||
Residential mortgage-backed securities
issued by quasi-governmental agencies
|
45,969 | 1,525 | — | 47,494 | ||||||||||||
Residential mortgage-backed securities
privately issued
|
8,723 | 195 | (30 | ) | 8,888 | |||||||||||
Total investment securities available for sale
|
108,974 | 5,559 | (30 | ) | 114,503 | |||||||||||
Held to maturity
|
||||||||||||||||
Residential mortgage-backed securities
issued by quasi-governmental agencies
|
2,588 | 340 | — | 2,928 | ||||||||||||
Total investment securities
|
$ | 111,562 | $ | 5,899 | $ | (30 | ) | $ | 117,431 |
At December 31, 2012
|
||||||||||||||||
Available for sale
|
Held to maturity
|
|||||||||||||||
Amortized
|
Fair
|
Amortized
|
Fair
|
|||||||||||||
cost
|
value
|
cost
|
value
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Investment securities
|
||||||||||||||||
Due in one year or less
|
$ | 602 | $ | 608 | $ | — | $ | — | ||||||||
Due after one year through five years
|
9,514 | 10,040 | — | — | ||||||||||||
Due after five years through ten years
|
25,154 | 26,848 | — | — | ||||||||||||
Due after ten years
|
19,984 | 22,114 | — | — | ||||||||||||
55,254 | 59,610 | — | — | |||||||||||||
Mortgage-backed securities
|
41,265 | 42,674 | 1,965 | 2,271 | ||||||||||||
Total investment securities
|
$ | 96,519 | $ | 102,284 | $ | 1,965 | $ | 2,271 |
Number
|
Less than
12 months
|
12 months
or longer
|
Total
|
|||||||||||||||||||||||||
of | Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | ||||||||||||||||||||||
Description of Securities | Securities | Value | Loss | Value | Loss | Value | Loss | |||||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||||||||||
State and political subdivisions
|
1 | $ | 617 | $ | (4 | ) | $ | — | $ | — | $ | 617 | $ | (4 | ) | |||||||||||||
Total temporarily impaired
securities
|
1 | $ | 617 | $ | (4 | ) | $ | — | $ | — | $ | 617 | $ | (4 | ) |
Number | Less than
12 months
|
12 months
or longer
|
Total | |||||||||||||||||||||||||
of | Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | ||||||||||||||||||||||
Description of Securities | Securities | Value | Loss | Value | Loss | Value | Loss | |||||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||||||||||
Residential mortgage-backed
securities privately issued
|
2 | $ | 3,442 | $ | (30 | ) | $ | — | $ | — | $ | 3,442 | $ | (30 | ) | |||||||||||||
Total temporarily impaired
securities
|
2 | $ | 3,442 | $ | (30 | ) | $ | — | $ | — | $ | 3,442 | $ | (30 | ) |
At December 31,
|
||||||||
2012
|
2011
|
|||||||
(in thousands)
|
||||||||
Held for investment:
|
||||||||
Residential
|
||||||||
Residential mortgages
|
$ | 323,665 | $ | 277,824 | ||||
Commercial
|
||||||||
Real estate-commercial
|
104,766 | 110,743 | ||||||
Real estate-residential
|
21,570 | 25,801 | ||||||
Real estate-multi-family
|
19,118 | 19,906 | ||||||
Construction loans
|
16,288 | 16,336 | ||||||
Commercial and industrial loans
|
4,646 | 4,414 | ||||||
Total commercial loans
|
166,388 | 177,200 | ||||||
Consumer
|
||||||||
Home equity and second mortgage
|
40,143 | 44,165 | ||||||
Other consumer
|
1,835 | 1,971 | ||||||
Total consumer loans
|
41,978 | 46,136 | ||||||
Total loans
|
532,031 | 501,160 | ||||||
Net deferred loan origination costs and unamortized premiums
|
1,611 | 1,065 | ||||||
Less allowance for loan losses
|
(6,922 | ) | (8,100 | ) | ||||
Total loans receivable
|
$ | 526,720 | $ | 494,125 | ||||
Held for sale:
|
||||||||
Residential
|
||||||||
Residential mortgages
|
$ | 706 | $ | 488 |
At December 31, 2012
|
||||||||||||||||||||
Special
|
||||||||||||||||||||
Pass | mention | Substandard | Doubtful | Total | ||||||||||||||||
(in thousands)
|
||||||||||||||||||||
Real estate-commercial
|
$ | 91,446 | $ | 4,192 | $ | 9,128 | $ | — | $ | 104,766 | ||||||||||
Real estate-residential
|
19,244 | 1,018 | 1,308 | — | 21,570 | |||||||||||||||
Real estate-multi-family
|
15,751 | — | 3,367 | — | 19,118 | |||||||||||||||
Construction loans
|
7,397 | 4,097 | 4,794 | — | 16,288 | |||||||||||||||
Commercial and industrial loans
|
4,565 | 81 | — | — | 4,646 | |||||||||||||||
Total
|
$ | 138,403 | $ | 9,388 | $ | 18,597 | $ | — | $ | 166,388 |
At December 31, 2011
|
||||||||||||||||||||
Special
|
||||||||||||||||||||
Pass | mention | Substandard | Doubtful | Total | ||||||||||||||||
(in thousands)
|
||||||||||||||||||||
Real estate-commercial
|
$ | 95,719 | $ | 6,189 | $ | 8,835 | $ | — | $ | 110,743 | ||||||||||
Real estate-residential
|
21,447 | 2,891 | 1,463 | — | 25,801 | |||||||||||||||
Real estate-multi-family
|
12,753 | 3,768 | 3,385 | — | 19,906 | |||||||||||||||
Construction loans
|
4,452 | 4,312 | 7,572 | — | 16,336 | |||||||||||||||
Commercial and industrial loans
|
4,139 | 100 | 175 | — | 4,414 | |||||||||||||||
Total
|
$ | 138,510 | $ | 17,260 | $ | 21,430 | $ | — | $ | 177,200 |
At December 31, 2012
|
||||||||||||
Performing
|
Nonperforming
|
Total
|
||||||||||
(in thousands)
|
||||||||||||
Residential mortgages
|
$ | 321,400 | $ | 2,265 | $ | 323,665 | ||||||
Home equity and second mortgage
|
40,000 | 143 | 40,143 | |||||||||
Other consumer
|
1,827 | 8 | 1,835 | |||||||||
Total
|
$ | 363,227 | $ | 2,416 | $ | 365,643 |
At December 31, 2011
|
||||||||||||
Performing
|
Nonperforming
|
Total
|
||||||||||
(in thousands)
|
||||||||||||
Residential mortgages
|
$ | 272,322 | $ | 5,502 | $ | 277,824 | ||||||
Home equity and second mortgage
|
43,888 | 277 | 44,165 | |||||||||
Other consumer
|
1,970 | 1 | 1,971 | |||||||||
Total
|
$ | 318,180 | $ | 5,780 | $ | 323,960 |
At December 31,
|
||||||||
2012
|
2011
|
|||||||
(in thousands)
|
||||||||
Residential
|
||||||||
Residential mortgages
|
$ | 2,265 | $ | 5,502 | ||||
Commercial
|
||||||||
Real estate-commercial
|
1,098 | 2,711 | ||||||
Real estate-residential
|
51 | — | ||||||
Construction loans
|
4,794 | 4,044 | ||||||
Commercial and industrial loans
|
— | 6 | ||||||
Consumer
|
||||||||
Home equity and second mortgage
|
143 | 277 | ||||||
Other consumer
|
8 | 1 | ||||||
Total nonperforming loans
|
$ | 8,359 | $ | 12,541 | ||||
Total loans past due 90 days as to interest or principal and accruing interest
|
$ | — | $ | — |
At December 31, 2012
|
||||||||||||||||||||
Recorded investment
|
Unpaid principal balance
|
Related
allowance
|
Average recorded investment
|
Interest income recognized
|
||||||||||||||||
With an allowance recorded:
|
(in thousands)
|
|||||||||||||||||||
Residential
|
||||||||||||||||||||
Residential mortgages
|
$ | 2,137 | $ | 2,214 | $ | 218 | $ | 2,061 | $ | — | ||||||||||
Commercial
|
||||||||||||||||||||
Real estate-commercial
|
546 | 1,497 | 296 | 697 | — | |||||||||||||||
Real estate-residential
|
51 | 51 | 4 | 298 | — | |||||||||||||||
Construction loans
|
4,737 | 5,137 | 1,029 | 3,604 | — | |||||||||||||||
Commercial and industrial loans
|
— | — | — | 2 | — | |||||||||||||||
7,471 | 8,899 | 1,547 | 6,662 | — | ||||||||||||||||
With no allowance recorded:
|
||||||||||||||||||||
Residential
|
||||||||||||||||||||
Residential mortgages
|
— | — | — | 698 | — | |||||||||||||||
Commercial
|
||||||||||||||||||||
Real estate-commercial
|
552 | 552 | — | 1,012 | — | |||||||||||||||
Real estate-residential
|
— | — | — | 216 | — | |||||||||||||||
Construction loans
|
57 | 116 | — | 1,932 | — | |||||||||||||||
609 | 668 | — | 3,858 | — | ||||||||||||||||
Total
|
$ | 8,080 | $ | 9,567 | $ | 1,547 | $ | 10,520 | $ | — |
At December 31, 2011
|
||||||||||||||||||||
Recorded investment
|
Unpaid principal balance
|
Related
allowance
|
Average recorded investment
|
Interest income recognized
|
||||||||||||||||
With an allowance recorded:
|
(in thousands)
|
|||||||||||||||||||
Residential
|
||||||||||||||||||||
Residential mortgages
|
$ | 1,252 | $ | 1,252 | $ | 388 | $ | 751 | $ | — | ||||||||||
Commercial
|
||||||||||||||||||||
Real estate-commercial
|
1,497 | 1,497 | 877 | 3,581 | — | |||||||||||||||
Real estate-residential
|
— | — | — | 497 | — | |||||||||||||||
Construction loans
|
3,816 | 3,816 | 1,035 | 4,143 | — | |||||||||||||||
Commercial and industrial loans
|
6 | 6 | 3 | 72 | — | |||||||||||||||
6,571 | 6,571 | 2,303 | 9,044 | — | ||||||||||||||||
With no allowance recorded:
|
||||||||||||||||||||
Residential
|
||||||||||||||||||||
Residential mortgages
|
2,381 | 2,381 | — | 1,497 | — | |||||||||||||||
Commercial
|
||||||||||||||||||||
Real estate-commercial
|
1,214 | 1,214 | — | 1,270 | — | |||||||||||||||
Real estate-residential
|
— | — | — | 459 | — | |||||||||||||||
Construction loans
|
228 | 228 | — | 1,642 | — | |||||||||||||||
3,823 | 3,823 | — | 4,868 | — | ||||||||||||||||
Total
|
$ | 10,394 | $ | 10,394 | $ | 2,303 | $ | 13,912 | $ | — |
At December 31, 2012
|
||||||||||||||||||||||||||||
Current
|
30-59
Days
past due
|
60-89
Days
past due
|
Loans
past due
90 days
or more
|
Total
past due
|
Total
loans
|
Recorded investment
over 90 days
and accruing interest
|
||||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||||||
Residential
|
||||||||||||||||||||||||||||
Residential mortgages
|
$ | 319,982 | $ | 1,161 | $ | 329 | $ | 2,193 | $ | 3,683 | $ | 323,665 | $ | — | ||||||||||||||
Commercial
|
||||||||||||||||||||||||||||
Real estate-commercial
|
102,868 | 800 | — | 1,098 | 1,898 | 104,766 | — | |||||||||||||||||||||
Real estate-residential
|
21,488 | 31 | — | 51 | 82 | 21,570 | — | |||||||||||||||||||||
Real estate-multi-family
|
19,118 | — | — | — | — | 19,118 | — | |||||||||||||||||||||
Construction loans
|
11,494 | — | — | 4,794 | 4,794 | 16,288 | — | |||||||||||||||||||||
Commercial and industrial loans
|
4,646 | — | — | — | — | 4,646 | — | |||||||||||||||||||||
Consumer
|
||||||||||||||||||||||||||||
Home equity and second mortgage
|
39,842 | 34 | 124 | 143 | 301 | 40,143 | — | |||||||||||||||||||||
Other consumer
|
1,824 | — | 3 | 8 | 11 | 1,835 | — | |||||||||||||||||||||
Total
|
$ | 521,262 | $ | 2,026 | $ | 456 | $ | 8,287 | $ | 10,769 | $ | 532,031 | $ | — |
At December 31, 2011
|
||||||||||||||||||||||||||||
Current
|
30-59
Days
past due
|
60-89
Days
past due
|
Loans
past due
90 days
or more
|
Total
past due
|
Total
loans
|
Recorded investment
over 90 days
and accruing interest
|
||||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||||||
Residential
|
||||||||||||||||||||||||||||
Residential mortgages
|
$ | 273,231 | $ | 98 | $ | 153 | $ | 4,342 | $ | 4,593 | $ | 277,824 | $ | — | ||||||||||||||
Commercial
|
||||||||||||||||||||||||||||
Real estate-commercial
|
108,382 | — | — | 2,361 | 2,361 | 110,743 | — | |||||||||||||||||||||
Real estate-residential
|
25,489 | 312 | — | — | 312 | 25,801 | — | |||||||||||||||||||||
Real estate-multi-family
|
19,906 | — | — | — | — | 19,906 | — | |||||||||||||||||||||
Construction loans
|
9,151 | — | 3,141 | 4,044 | 7,185 | 16,336 | — | |||||||||||||||||||||
Commercial and industrial loans
|
4,408 | — | — | 6 | 6 | 4,414 | — | |||||||||||||||||||||
Consumer
|
||||||||||||||||||||||||||||
Home equity and second mortgage
|
43,712 | 165 | 11 | 277 | 453 | 44,165 | — | |||||||||||||||||||||
Other consumer
|
1,956 | 6 | 8 | 1 | 15 | 1,971 | — | |||||||||||||||||||||
Total
|
$ | 486,235 | $ | 581 | $ | 3,313 | $ | 11,031 | $ | 14,925 | $ | 501,160 | $ | — |
Balance
January 1,
2012
|
Provision
|
Charge-offs
|
Recoveries
|
Balance
December 31,
2012
|
||||||||||||||||
(in thousands)
|
||||||||||||||||||||
Residential
|
||||||||||||||||||||
Residential mortgages
|
$ | 2,194 | $ | 367 | $ | (768 | ) | $ | 56 | $ | 1,849 | |||||||||
Commercial
|
||||||||||||||||||||
Real estate-commercial
|
2,352 | 353 | (951 | ) | — | 1,754 | ||||||||||||||
Real estate-residential
|
369 | 726 | (487 | ) | — | 608 | ||||||||||||||
Real estate-multi-family
|
350 | (105 | ) | — | — | 245 | ||||||||||||||
Construction loans
|
1,830 | 1,049 | (1,182 | ) | — | 1,697 | ||||||||||||||
Commercial and industrial loans
|
138 | 115 | (156 | ) | 22 | 119 | ||||||||||||||
Consumer
|
||||||||||||||||||||
Home equity and second mortgage
|
448 | (104 | ) | (93 | ) | — | 251 | |||||||||||||
Other consumer
|
22 | 8 | (23 | ) | 4 | 11 | ||||||||||||||
Unallocated
|
397 | (9 | ) | — | — | 388 | ||||||||||||||
Total
|
$ | 8,100 | $ | 2,400 | $ | (3,660 | ) | $ | 82 | $ | 6,922 |
Balance
January 1,
2011
|
Provision
|
Charge-offs
|
Recoveries
|
Balance
December 31,
2011
|
||||||||||||||||
(in thousands)
|
||||||||||||||||||||
Residential
|
||||||||||||||||||||
Residential mortgages
|
$ | 1,839 | $ | 515 | $ | (172 | ) | $ | 12 | $ | 2,194 | |||||||||
Commercial
|
||||||||||||||||||||
Real estate-commercial
|
3,281 | 82 | (1,011 | ) | — | 2,352 | ||||||||||||||
Real estate-residential
|
534 | 865 | (1,030 | ) | — | 369 | ||||||||||||||
Real estate-multi-family
|
399 | (49 | ) | — | — | 350 | ||||||||||||||
Construction loans
|
1,363 | 1,987 | (1,521 | ) | 1 | 1,830 | ||||||||||||||
Commercial and industrial loans
|
77 | 67 | (44 | ) | 38 | 138 | ||||||||||||||
Consumer
|
||||||||||||||||||||
Home equity and second mortgage
|
607 | 62 | (221 | ) | — | 448 | ||||||||||||||
Other consumer
|
16 | 14 | (16 | ) | 8 | 22 | ||||||||||||||
Unallocated
|
212 | 185 | — | — | 397 | |||||||||||||||
Total
|
$ | 8,328 | $ | 3,728 | $ | (4,015 | ) | $ | 59 | $ | 8,100 |
Evaluated for impairment
|
||||||||||||
Allowance
|
Individually
|
Collectively
|
Total
|
|||||||||
(in thousands)
|
||||||||||||
Residential
|
||||||||||||
Residential mortgages
|
$ | 218 | $ | 1,631 | $ | 1,849 | ||||||
Commercial
|
||||||||||||
Real estate-commercial
|
296 | 1,458 | 1,754 | |||||||||
Real estate-residential
|
4 | 604 | 608 | |||||||||
Real estate-multi-family
|
— | 245 | 245 | |||||||||
Construction loans
|
1,029 | 668 | 1,697 | |||||||||
Commercial and industrial loans
|
— | 119 | 119 | |||||||||
Consumer
|
||||||||||||
Home equity and second mortgage
|
— | 251 | 251 | |||||||||
Other consumer
|
— | 11 | 11 | |||||||||
Unallocated
|
— | 388 | 388 | |||||||||
Total
|
$ | 1,547 | $ | 5,375 | $ | 6,922 |
Evaluated for impairment
|
||||||||||||
Loan balance
|
Individually
|
Collectively
|
Total
|
|||||||||
(in thousands)
|
||||||||||||
Residential
|
||||||||||||
Residential mortgages
|
$ | 2,137 | $ | 321,528 | $ | 323,665 | ||||||
Commercial
|
||||||||||||
Real estate-commercial
|
1,098 | 103,668 | 104,766 | |||||||||
Real estate-residential
|
51 | 21,519 | 21,570 | |||||||||
Real estate-multi-family
|
— | 19,118 | 19,118 | |||||||||
Construction loans
|
4,794 | 11,494 | 16,288 | |||||||||
Commercial and industrial loans
|
— | 4,646 | 4,646 | |||||||||
Consumer
|
||||||||||||
Home equity and second mortgage
|
— | 40,143 | 40,143 | |||||||||
Other consumer
|
— | 1,835 | 1,835 | |||||||||
Total
|
$ | 8,080 | $ | 523,951 | $ | 532,031 |
Evaluated for impairment
|
||||||||||||
Allowance
|
Individually
|
Collectively
|
Total
|
|||||||||
(in thousands)
|
||||||||||||
Residential
|
||||||||||||
Residential mortgages
|
$ | 388 | $ | 1,806 | $ | 2,194 | ||||||
Commercial
|
||||||||||||
Real estate-commercial
|
877 | 1,475 | 2,352 | |||||||||
Real estate-residential
|
— | 369 | 369 | |||||||||
Real estate-multi-family
|
— | 350 | 350 | |||||||||
Construction loans
|
1,035 | 795 | 1,830 | |||||||||
Commercial and industrial loans
|
3 | 135 | 138 | |||||||||
Consumer
|
||||||||||||
Home equity and second mortgage
|
— | 448 | 448 | |||||||||
Other consumer
|
— | 22 | 22 | |||||||||
Unallocated
|
— | 397 | 397 | |||||||||
Total
|
$ | 2,303 | $ | 5,797 | $ | 8,100 |
Evaluated for impairment
|
||||||||||||
Loan balance
|
Individually
|
Collectively
|
Total
|
|||||||||
(in thousands)
|
||||||||||||
Residential
|
||||||||||||
Residential mortgages
|
$ | 3,633 | $ | 274,191 | $ | 277,824 | ||||||
Commercial
|
||||||||||||
Real estate-commercial
|
2,711 | 108,032 | 110,743 | |||||||||
Real estate-residential
|
— | 25,801 | 25,801 | |||||||||
Real estate-multi-family
|
— | 19,906 | 19,906 | |||||||||
Construction loans
|
4,044 | 12,292 | 16,336 | |||||||||
Commercial and industrial loans
|
6 | 4,408 | 4,414 | |||||||||
Consumer
|
||||||||||||
Home equity and second mortgage
|
— | 44,165 | 44,165 | |||||||||
Other consumer
|
— | 1,971 | 1,971 | |||||||||
Total
|
$ | 10,394 | $ | 490,766 | $ | 501,160 |
For the year ended
December 31, 2012
|
For the year ended
December 31, 2011
|
|||||||||||||||||||||||
Number
of
Contracts
|
Pre-
Modification Outstanding Recorded Investment
|
Post
Modification Outstanding Recorded Investment
|
Number
of
Contracts
|
Pre-
Modification Outstanding Recorded Investment
|
Post
Modification Outstanding Recorded Investment
|
|||||||||||||||||||
Residential
|
(dollars in thousands)
|
|||||||||||||||||||||||
Residential mortgage
|
2 | $ | 950 | $ | 923 | 2 | $ | 510 | $ | 507 | ||||||||||||||
Total
|
2 | $ | 950 | $ | 923 | 2 | $ | 510 | $ | 507 |
For the year ended
December 31, 2011
|
||||||||
Number of Contracts
|
Recorded Investment
|
|||||||
Residential
|
(dollars in thousands)
|
|||||||
Residential mortgage
|
1 | $ | 169 | |||||
Total
|
1 | $ | 169 |
At December 31,
|
||||||||
2012
|
2011
|
|||||||
(in thousands)
|
||||||||
Mortgage loan servicing portfolios
|
||||||||
FHLMC
|
$ | 235 | $ | 285 | ||||
FNMA
|
127,677 | 108,275 | ||||||
Other investors
|
8,294 | 10,434 | ||||||
$ | 136,206 | $ | 118,994 |
At December 31,
|
|||||||||
Estimated
useful lives
|
2012
|
2011
|
|||||||
(in thousands)
|
|||||||||
Buildings
|
30 years
|
$ | 7,614 | $ | 7,669 | ||||
Leasehold improvements
|
5-10 years
|
3,243 | 3,262 | ||||||
Furniture, fixtures and equipment
|
3-7 years
|
7,292 | 8,688 | ||||||
18,149 | 19,619 | ||||||||
Less accumulated depreciation
|
13,640 | 14,752 | |||||||
4,509 | 4,867 | ||||||||
Land
|
1,599 | 1,692 | |||||||
$ | 6,108 | $ | 6,559 |
At December 31,
|
||||||||
2012
|
2011
|
|||||||
(in thousands)
|
||||||||
Deposit Type
|
||||||||
Demand
|
$ | 52,433 | $ | 43,910 | ||||
NOW
|
76,370 | 65,677 | ||||||
Money market
|
153,827 | 155,010 | ||||||
Passbook savings
|
106,268 | 105,617 | ||||||
Total demand, transaction and passbook deposits
|
388,898 | 370,214 | ||||||
Certificates of deposit
|
171,417 | 181,074 | ||||||
$ | 560,315 | $ | 551,288 |
Maturity year
|
||||||||||||||||||||||||||
2013
|
2014
|
2015
|
2016
|
2017
|
Thereafter
|
Total
|
||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||||
$ | 114,386 | $ | 32,593 | $ | 12,868 | $ | 7,964 | $ | 3,441 | $ | 165 | $ | 171,417 |
At December 31,
|
||||||||||||||||
2012
|
2011
|
|||||||||||||||
Weighted
|
Weighted
|
|||||||||||||||
Principal payments due during |
Amount
|
average rate
|
Amount
|
average rate
|
||||||||||||
(in thousands)
|
||||||||||||||||
2012
|
$ | — | — | % | $ | 25,259 | 3.88 | % | ||||||||
2013
|
14,754 | 2.79 | % | 10,187 | 3.30 | % | ||||||||||
2014
|
4,287 | 2.40 | % | 3,398 | 2.52 | % | ||||||||||
2015
|
3,669 | 2.16 | % | 2,767 | 2.28 | % | ||||||||||
2016
|
10,887 | 1.38 | % | 3,969 | 2.22 | % | ||||||||||
2017
|
14,895 | 1.12 | % | 961 | 2.19 | % | ||||||||||
Thereafter
|
12,164 | 2.43 | % | 367 | 2.08 | % | ||||||||||
$ | 60,656 | 1.88 | % | $ | 46,908 | 3.37 | % |
At December 31,
|
||||||||
2012
|
2011
|
|||||||
(in thousands)
|
||||||||
Reconciliation of projected benefit obligation
|
||||||||
Benefit obligation at beginning of year
|
$ | 8,045 | $ | 5,837 | ||||
Service cost
|
736 | 565 | ||||||
Interest cost
|
360 | 328 | ||||||
Actuarial loss
|
339 | 1,411 | ||||||
Amendments
|
— | — | ||||||
Benefits paid
|
(540 | ) | (96 | ) | ||||
Benefit obligation at end of year
|
$ | 8,940 | $ | 8,045 | ||||
Reconciliation of fair value of assets
|
||||||||
Fair value of plan assets at beginning of year
|
$ | 8,006 | $ | 7,761 | ||||
Actual return on plan assets
|
801 | (145 | ) | |||||
Employer contribution
|
1,500 | 486 | ||||||
Benefits paid
|
(540 | ) | (96 | ) | ||||
Fair value of plan assets at end of year
|
$ | 9,767 | $ | 8,006 | ||||
Funded status at end of year
|
$ | 827 | $ | (39 | ) |
At December 31,
|
||||||||
2012
|
2011
|
|||||||
(in thousands)
|
||||||||
Net loss
|
$ | (4,270 | ) | $ | (4,372 | ) | ||
Prior service cost
|
(27 | ) | (28 | ) | ||||
Total
|
$ | (4,297 | ) | $ | (4,400 | ) |
At December 31,
|
|||
2012
|
2011
|
||
Weighted-average assumptions used to determine benefit obligations:
|
|||
Discount rate
|
4.00%
|
4.50%
|
|
Rate of compensation increase
|
3.00%
|
4.00%
|
For the year ended
December 31,
|
||||||||
2012
|
2011
|
|||||||
(in thousands)
|
||||||||
Components of net periodic benefit cost
|
||||||||
Service cost
|
$ | 736 | $ | 565 | ||||
Interest cost
|
360 | 328 | ||||||
Expected return on plan assets
|
(644 | ) | (619 | ) | ||||
Amortization of prior service cost
|
2 | 2 | ||||||
Recognized net actuarial loss
|
283 | 115 | ||||||
Net periodic benefit cost
|
$ | 737 | $ | 391 |
For the year ended
December 31,
|
|||
2012
|
2011
|
||
Weighted-average assumptions used to determine net benefit costs:
|
|||
Discount rate
|
4.50%
|
5.75%
|
|
Expected return on plan assets
|
8.00%
|
8.00%
|
|
Rate of compensation increase
|
4.00%
|
4.00%
|
Year ending December 31,
|
Amount
|
|||
(in thousands)
|
||||
2013
|
$ | 125 | ||
2014
|
213 | |||
2015
|
239 | |||
2016
|
275 | |||
2017
|
278 | |||
2018-2022
|
1,864 |
Balance as of
|
||||||||||||||||
Fair value hierarchy levels
|
December 31,
|
|||||||||||||||
Level 1
|
Level 2
|
Level 3
|
2012
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Assets
|
||||||||||||||||
Collective investment trust funds
|
$ | — | $ | 9,767 | $ | — | $ | 9,767 | ||||||||
Total plan assets at fair value
|
$ | — | $ | 9,767 | $ | — | $ | 9,767 |
Balance as of
|
||||||||||||||||
Fair value hierarchy levels
|
December 31,
|
|||||||||||||||
Level 1
|
Level 2
|
Level 3
|
2011
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Assets
|
||||||||||||||||
Collective investment trust funds
|
$ | — | $ | 8,006 | $ | — | $ | 8,006 | ||||||||
Total plan assets at fair value
|
$ | — | $ | 8,006 | $ | — | $ | 8,006 |
Percentage of plan assets
at December 31,
|
|||||
2012
|
2011
|
||||
Asset Category
|
|||||
Mutual funds
|
100.00
|
%
|
100.00
|
%
|
|
Total
|
100.00
|
%
|
100.00
|
%
|
At December 31,
|
||||||||
2012
|
2011
|
|||||||
Allocated shares
|
184,000 | 177,000 | ||||||
Unreleased shares
|
103,000 | 115,000 | ||||||
Total ESOP shares
|
287,000 | 292,000 | ||||||
Fair value of unreleased shares (in thousands)
|
$ | 2,446 | $ | 2,615 |
2012
|
2011
|
|||||||||||||||
Number
of
shares
|
Weighted average
exercise
price per
share
|
Number
of
shares
|
Weighted average
exercise
price per
share
|
|||||||||||||
Outstanding at beginning of year
|
109,765 | $ | 24.41 | 126,257 | $ | 24.04 | ||||||||||
Options granted
|
— | — | — | — | ||||||||||||
Options exercised
|
(315 | ) | 19.67 | (10,916 | ) | 19.33 | ||||||||||
Options forfeited
|
(1,904 | ) | 28.59 | (3,370 | ) | 26.10 | ||||||||||
Options expired
|
(18,267 | ) | 25.68 | (2,206 | ) | 25.44 | ||||||||||
Outstanding at end of year
|
89,279 | 24.08 | 109,765 | 24.41 | ||||||||||||
Options exercisable
|
80,652 | $ | 24.55 | 92,328 | $ | 25.31 |
Options outstanding
|
Options exercisable
|
|||||||||||||||||||||
Range of exercise prices
|
Number
|
Weighted
average
remaining
contractual
life (years)
|
Weighted
average
exercise
price
|
Number
|
Weighted
average
exercise
price
|
|||||||||||||||||
$ 19.67 - 28.42 | 73,126 | 2.16 | $ | 22.21 | 64,499 | $ | 22.55 | |||||||||||||||
$ 28.43 - 32.51 | 16,153 | 0.96 | 32.51 | 16,153 | 32.51 | |||||||||||||||||
89,279 | 2.60 | 24.08 | 80,652 | 24.55 |
For the year ended
December 31,
|
||||||||
2012
|
2011
|
|||||||
(in thousands)
|
||||||||
Aggregate intrinsic value of
|
||||||||
Options outstanding
|
$ | 179 | $ | 133 | ||||
Options exercisable
|
144 | 80 | ||||||
Options exercised
|
1 | 30 | ||||||
Cash receipts
|
7 | 211 |
For the year ended
December 31,
|
||||||||
2012
|
2011
|
|||||||
(in thousands)
|
||||||||
Stock-based compensation expense
|
||||||||
Director fees
|
$ | 149 | $ | 69 | ||||
Stock grant expense
|
— | 13 | ||||||
Stock option expense
|
27 | 32 | ||||||
Total stock-based compensation expense
|
$ | 176 | $ | 114 |
2011
|
||||||||
Number
of
shares
|
Weighted average
grant
price per
share
|
|||||||
Total non-vested restricted stock grants at January 1, 2011
|
700 | $ | 19.67 | |||||
Restricted stock grant
|
— | — | ||||||
Vesting of restricted stock
|
(700 | ) | 19.67 | |||||
Forfeitures of restricted stock
|
— | — | ||||||
Total non-vested restricted stock grants at December 31, 2011
|
— | $ | — |
For the year ended December 31,
|
||||||||
2012
|
2011
|
|||||||
(in thousands)
|
||||||||
Federal
|
||||||||
Current
|
$ | 524 | $ | 1,085 | ||||
Charge in lieu of income tax relation to stock compensation
|
— | 3 | ||||||
Deferred
|
1,194 | (77 | ) | |||||
1,718 | 1,011 | |||||||
State and local – current
|
7 | 8 | ||||||
Income tax provision
|
$ | 1,725 | $ | 1,019 |
For the year ended December 31,
|
|||||
2012
|
2011
|
||||
Statutory federal income tax
|
34.0
|
%
|
34.0
|
%
|
|
(Decrease) increase resulting from
|
|||||
Tax-exempt income
|
(10.3)
|
(14.0)
|
|||
State tax, net of federal benefit
|
0.1
|
0.1
|
|||
Other
|
0.5
|
0.4
|
|||
24.3
|
%
|
20.5
|
%
|
At December 31,
|
||||||||
2012
|
2011
|
|||||||
(in thousands)
|
||||||||
Deferred tax assets
|
||||||||
Deferred compensation
|
$ | 138 | $ | 137 | ||||
Allowance for loan losses, net
|
2,353 | 2,754 | ||||||
Stock compensation
|
78 | 106 | ||||||
Adjustment to record funded status of pension plan
|
1,462 | 1,497 | ||||||
Nonaccrual interest
|
333 | 336 | ||||||
Adjustment for real estate acquired thru foreclosure
|
20 | 182 | ||||||
Other
|
5 | 34 | ||||||
$ | 4,389 | $ | 5,046 | |||||
Deferred tax liabilities
|
||||||||
Accrued pension expense
|
$ | 1,704 | $ | 1,444 | ||||
Unrealized gain on securities available for sale
|
1,960 | 1,880 | ||||||
Prepaid expenses
|
151 | 180 | ||||||
Deferred loan costs
|
1,172 | 831 | ||||||
Amortization of goodwill
|
1,470 | 1,470 | ||||||
Other
|
296 | 296 | ||||||
6,753 | 6,101 | |||||||
Net deferred tax liability
|
$ | (2,364 | ) | $ | (1,055 | ) |
Actual
|
For capital adequacy
purposes
|
To be well capitalized
under prompt
corrective action
provision
|
||||||||||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||||||||||||
At December 31, 2012
|
||||||||||||||||||||||||
Tangible capital (to tangible assets)
|
$ | 73,612 | 10.45 | % | $ | 10,562 | 1.50 | % | $ | — | N/A | |||||||||||||
Core capital (to adjusted tangible assets)
|
73,612 | 10.45 | % | 28,164 | 4.00 | % | 35,206 | 5.00 | % | |||||||||||||||
Tier 1 capital (to risk weighted assets)
|
73,612 | 16.63 | % | 17,703 | 4.00 | % | 26,555 | 6.00 | % | |||||||||||||||
Total Risk
|
79,161 | 17.89 | % | 35,407 | 8.00 | % | 44,259 | 10.00 | % | |||||||||||||||
At December 31, 2011
|
||||||||||||||||||||||||
Tangible capital (to tangible assets)
|
69,144 | 10.21 | % | 10,154 | 1.50 | % | — | N/A | ||||||||||||||||
Core capital (to adjusted tangible assets)
|
69,144 | 10.21 | % | 27,078 | 4.00 | % | 33,847 | 5.00 | % | |||||||||||||||
Tier 1 capital (to risk weighted assets)
|
69,144 | 17.31 | % | 15,976 | 4.00 | % | 23,965 | 6.00 | % | |||||||||||||||
Total Risk
|
74,147 | 18.56 | % | 31,953 | 8.00 | % | 39,941 | 10.00 | % |
At December 31,
|
||||||||
2012
|
2011
|
|||||||
(in thousands)
|
||||||||
Commitments to extend credit
|
$ | 74,571 | $ | 67,435 | ||||
Standby letters of credit
|
780 | 710 | ||||||
Loans sold with recourse
|
50 | 52 | ||||||
$ | 75,401 | $ | 68,197 |
Year ending December 31,
|
2012
|
|||
(in thousands)
|
||||
2013
|
$ | 470 | ||
2014
|
399 | |||
2015
|
236 | |||
2016
|
168 | |||
2017
|
133 | |||
Thereafter
|
948 | |||
Total
|
$ | 2,354 |
Balance as of
|
||||||||||||||||
Fair value hierarchy levels
|
December 31,
|
|||||||||||||||
Level 1
|
Level 2
|
Level 3
|
2012
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Assets
|
||||||||||||||||
Investment securities available for sale
|
||||||||||||||||
State and political subdivisions
|
$ | — | $ | 59,610 | $ | — | $ | 59,610 | ||||||||
Residential mortgage-backed
securities issued by quasi-
governmental agencies
|
— | 42,674 | — | 42,674 | ||||||||||||
Total investment securities available for sale
|
$ | — | $ | 102,284 | $ | — | $ | 102,284 | ||||||||
Loans receivable, held for sale
|
$ | — | $ | 706 | $ | — | $ | 706 |
Balance as of
|
||||||||||||||||
Fair value hierarchy levels
|
December 31,
|
|||||||||||||||
Level 1
|
Level 2
|
Level 3
|
2011
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Assets
|
||||||||||||||||
Investment securities available for sale
|
||||||||||||||||
U.S. Government and federal agencies
|
$ | — | $ | 3,030 | $ | — | $ | 3,030 | ||||||||
State and political subdivisions
|
— | 55,091 | — | 55,091 | ||||||||||||
Residential mortgage-backed
securities issued by quasi-
governmental agencies
|
— | 47,494 | — | 47,494 | ||||||||||||
Residential real estate mortgage-backed
securities privately issued
|
— | 8,888 | — | 8,888 | ||||||||||||
Total investment securities available for sale
|
$ | — | $ | 114,503 | $ | — | $ | 114,503 | ||||||||
Loans receivable, held for sale
|
$ | — | $ | 488 | $ | — | $ | 488 |
Balance as of
|
||||||||||||||||
Fair value hierarchy levels
|
December 31,
|
|||||||||||||||
Level 1
|
Level 2
|
Level 3
|
2012
|
|||||||||||||
Impaired loans
|
$ | — | $ | — | $ | 6,533 | $ | 6,533 | ||||||||
Real estate acquired through foreclosure
|
— | — | 7,282 | 7,282 | ||||||||||||
Mortgage servicing rights
|
— | 956 | — | 956 |
Fair value
|
Valuation
|
Unobservable
|
Range of
|
|||||||
Description
|
estimate
|
technique
|
Input
|
inputs
|
||||||
(in thousands)
|
||||||||||
Impaired loans
|
$ | 6,533 |
Appraisal of collateral (1)
|
Discount rate to
reflect current market
conditions and
ultimate
recoverability
|
5%-15 | % | ||||
Real estate acquired through foreclosure
|
7,282 |
Appraisal of collateral (1)
|
Discount rate to
reflect current market
conditions and
liquidation expenses
|
5%-20 | % |
|
(1)
|
Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses.
|
Balance as of
|
||||||||||||||||
Fair value hierarchy levels
|
December 31,
|
|||||||||||||||
Level 1
|
Level 2
|
Level 3
|
2011
|
|||||||||||||
Impaired loans
|
$ | — | $ | — | $ | 8,091 | $ | 8,091 | ||||||||
Real estate acquired through foreclosure
|
— | — | 11,730 | 11,730 | ||||||||||||
Mortgage servicing rights
|
— | 763 | — | 763 |
Carrying
|
Fair
|
Fair value hierarchy levels
|
||||||||||||||||||
value
|
value
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||||||
Assets
|
(in thousands)
|
|||||||||||||||||||
Cash and cash equivalents
|
$ | 31,137 | $ | 31,137 | $ | 31,137 | $ | — | $ | — | ||||||||||
Investment securities
|
59,610 | 59,610 | — | 59,610 | — | |||||||||||||||
Mortgage-backed securities
|
44,639 | 44,945 | — | 44,945 | — | |||||||||||||||
Loans receivable
|
527,426 | 539,665 | — | 706 | 538,959 | |||||||||||||||
Liabilities
|
||||||||||||||||||||
Deposits with stated maturities
|
$ | 171,417 | $ | 175,025 | $ | — | $ | — | $ | 175,025 | ||||||||||
Deposits with no stated maturities
|
388,898 | 388,898 | 388,898 | — | — | |||||||||||||||
Borrowings with stated maturities
|
60,656 | 60,939 | — | — | 60,939 |
At December 31, 2011
|
||||||||
Carrying value
|
Fair value
|
|||||||
(in thousands)
|
||||||||
Assets
|
||||||||
Cash and cash equivalents
|
$ | 14,928 | $ | 14,928 | ||||
Investment securities
|
58,121 | 58,121 | ||||||
Mortgage-backed securities
|
58,970 | 59,310 | ||||||
Loans receivable
|
494,613 | 516,359 | ||||||
Liabilities
|
||||||||
Deposits with stated maturities
|
$ | 181,074 | $ | 183,306 | ||||
Deposits with no stated maturities
|
370,214 | 370,214 | ||||||
Borrowings with stated maturities
|
46,908 | 48,092 |
For the year ended December 31,
|
||||||||
2012
|
2011
|
|||||||
(in thousands)
|
||||||||
Service fees, charges and other operating income
|
||||||||
Loan servicing fees, net
|
$ | 139 | $ | 25 | ||||
Late charge income
|
117 | 110 | ||||||
Deposit service charges
|
581 | 666 | ||||||
Debit card income
|
539 | 512 | ||||||
Other income
|
395 | 385 | ||||||
$ | 1,771 | $ | 1,698 | |||||
Other operating expense
|
||||||||
Insurance and surety bond
|
$ | 178 | $ | 192 | ||||
Office supplies
|
184 | 164 | ||||||
Loan expense
|
228 | 310 | ||||||
Debit card and ATM expense
|
272 | 245 | ||||||
Postage
|
246 | 231 | ||||||
Telephone
|
288 | 261 | ||||||
Supervisory examination fees
|
73 | 169 | ||||||
Other expenses
|
578 | 625 | ||||||
$ | 2,047 | $ | 2,197 |
For the year ended December 31, 2012
|
||||||||||||
Weighted
|
||||||||||||
average
|
||||||||||||
Income
|
shares
|
Per share
|
||||||||||
(numerator)
|
(denominator)
|
Amount
|
||||||||||
(dollars in thousands, except share data)
|
||||||||||||
Basic earnings per share
|
||||||||||||
Income available to common stockholders
|
$ | 5,383 | 2,726,133 | $ | 1.97 | |||||||
Effect of dilutive securities
|
||||||||||||
Stock compensation plans
|
— | 3,629 | — | |||||||||
Diluted earnings per share
|
||||||||||||
Income available to common stockholders plus effect of
dilutive securities
|
$ | 5,383 | 2,729,762 | $ | 1.97 |
For the year ended December 31, 2011
|
||||||||||||
Weighted
|
||||||||||||
average
|
||||||||||||
Income
|
shares
|
Per share
|
||||||||||
(numerator)
|
(denominator)
|
Amount
|
||||||||||
(dollars in thousands, except share data)
|
||||||||||||
Basic earnings per share
|
||||||||||||
Income available to common stockholders
|
$ | 3,929 | 2,702,200 | $ | 1.45 | |||||||
Effect of dilutive securities
|
||||||||||||
Stock compensation plans
|
— | 510 | — | |||||||||
Diluted earnings per share
|
||||||||||||
Income available to common stockholders plus effect of
dilutive securities
|
$ | 3,929 | 2,702,710 | $ | 1.45 |
At December 31,
|
||||||||
2012
|
2011
|
|||||||
(in thousands)
|
||||||||
ASSETS
|
||||||||
Cash
|
$ | 2,031 | $ | 1,414 | ||||
Investment in 3rd Fed
|
78,032 | 73,117 | ||||||
Investment in Penns Trail Development
|
1,077 | 1,087 | ||||||
Notes receivable ESOP
|
1,208 | 1,352 | ||||||
Other assets
|
723 | 465 | ||||||
Total assets
|
$ | 83,071 | $ | 77,435 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Total liabilities
|
$ | 126 | $ | 27 | ||||
Stockholders’ equity
|
82,945 | 77,408 | ||||||
Total liabilities and stockholders’ equity
|
$ | 83,071 | $ | 77,435 |
For the year ended
December 31,
|
||||||||
2012
|
2011
|
|||||||
(in thousands)
|
||||||||
INCOME
|
||||||||
Equity in earnings of subsidiaries
|
$ | 5,963 | $ | 4,432 | ||||
Interest and dividend income
|
22 | 6 | ||||||
Total income
|
5,985 | 4,438 | ||||||
EXPENSES
|
||||||||
Other
|
602 | 509 | ||||||
Total expenses
|
602 | 509 | ||||||
NET INCOME
|
5,383 | 3,929 | ||||||
Total other comprehensive income (2)
|
224 | 135 | ||||||
Total comprehensive income
|
$ | 5,607 | $ | 4,064 |
|
(2)
|
See Consolidated Statements of Comprehensive Income for other comprehensive income detail.
|
For the year ended
December 31,
|
||||||||
2012
|
2011
|
|||||||
(in thousands)
|
||||||||
Cash flows from operating activities
|
||||||||
Net income
|
$ | 5,383 | $ | 3,929 | ||||
Adjustments to reconcile net income to net cash used in operating activities
|
||||||||
Stock compensation plans
|
176 | 114 | ||||||
Equity in earnings of subsidiaries
|
(5,963 | ) | (4,432 | ) | ||||
Net change in assets and liabilities
|
(16 | ) | (300 | ) | ||||
Net cash used in operating activities
|
(420 | ) | (689 | ) | ||||
Cash flows from investing activities
|
||||||||
Capital distribution from subsidiaries
|
1,600 | 1,548 | ||||||
Net cash provided by investing activities
|
1,600 | 1,548 | ||||||
Cash flows from financing activities
|
||||||||
Common stock dividends paid
|
(543 | ) | (534 | ) | ||||
Treasury stock acquired
|
— | (122 | ) | |||||
Exercise of stock options
|
7 | 211 | ||||||
Deferred tax adjustment arising from stock compensation
|
(27 | ) | — | |||||
Tax benefit arising from stock compensation
|
— | 3 | ||||||
Net cash used in financing activities
|
(563 | ) | (442 | ) | ||||
NET INCREASE IN CASH
|
617 | 417 | ||||||
Cash at beginning of year
|
1,414 | 997 | ||||||
Cash at end of year
|
$ | 2,031 | $ | 1,414 |
Subsidiaries
|
Percentage
Owned
|
Jurisdiction of
Incorporation
|
|
3rd Fed Bank(a)
|
100%
|
Pennsylvania
|
|
Teragon Financial Corporation(a)(b)
|
100%
|
Pennsylvania
|
|
Penns Trail Development Corporation(a)
|
100%
|
Delaware
|
|
Third Delaware Corporation(a)(b)
|
100%
|
Delaware
|
/s/S.R. Snodgrass, A.C.
|
|
Wexford, Pennsylvania
|
|
March 27, 2013
|
Date:
|
March 27, 2013
|
/s/ KENT C. LUFKIN
|
|
Kent C. Lufkin
|
|||
President and Chief Executive Officer
|
|||
(Principal Executive Officer)
|
Date:
|
March 27, 2013
|
/s/ DENNIS R. STEWART
|
|
Dennis R. Stewart
|
|||
Executive Vice President and Chief Financial Officer
|
|||
(Principal Financial & Accounting Officer)
|
/s/ KENT C. LUFKIN
|
/s/ DENNIS R. STEWART
|
|
Kent C. Lufkin
|
Dennis R. Stewart
|
|
President and Chief Executive Officer
|
Executive Vice President and Chief Financial Officer
|
|
March 27, 2013
|
March 27, 2013
|
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end
REGULATORY MATTERS (Tables)
|
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2012
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
REGULATORY MATTERS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Regulatory Capital | The Bank's actual capital amounts and ratios are presented in the following table:
|
BENEFIT PLANS, Defined Contribution Plan (Details) (USD $)
|
12 Months Ended | |
---|---|---|
Dec. 31, 2012
|
Dec. 31, 2011
|
|
Defined Contribution Plan [Abstract] | ||
Maximum annual contribution of pretax eligible compensation (in hundredths) | 15.00% | |
Employer matching contribution of the initial 1,000 deferral (in hundredths) | 75.00% | |
Initial deferral threshold for matching contribution | $ 1,000 | |
Matching contribution amount | $ 78,000 | $ 78,000 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $)
In Millions, unless otherwise specified |
12 Months Ended | |
---|---|---|
Dec. 31, 2012
Segment
|
Dec. 31, 2011
|
|
Foreclosed Real Estate [Abstract] | ||
Foreclosed real estate | $ 7.3 | $ 11.7 |
Bank Owned Life Insurance [Abstract] | ||
Cash surrender values of policies | $ 19.1 | $ 18.5 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Option terms | P10Y | |
Segment Reporting [Abstract] | ||
Number of reportable segments | 1 | |
Number of operating segments | 1 | |
Minimum [Member]
|
||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 3 years | |
Maximum [Member]
|
||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 5 years | |
Pennsylvania [Member]
|
||
Entity Location [Line Items] | ||
Full service branches | 11 | |
New Jersey [Member]
|
||
Entity Location [Line Items] | ||
Full service branches | 2 |
LOAN SERVICING (Tables)
|
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2012
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LOAN SERVICING [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage Loans Serviced for Others | Mortgage loans serviced for others are not included in the accompanying consolidated balance sheets. The unpaid principal balances of these loans are summarized as follows:
|
SERVICE FEES, CHARGES AND OTHER OPERATING INCOME AND OTHER OPERATING EXPENSE
|
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2012
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SERVICE FEES, CHARGES AND OTHER OPERATING INCOME AND OTHER OPERATING EXPENSE [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SERVICE FEES, CHARGES AND OTHER OPERATING INCOME AND OTHER OPERATING EXPENSE | NOTE 17—SERVICE FEES, CHARGES AND OTHER OPERATING INCOME AND OTHER OPERATING EXPENSE
|
LOAN SERVICING (Details) (USD $)
|
12 Months Ended | |
---|---|---|
Dec. 31, 2012
|
Dec. 31, 2011
|
|
Mortgage loan servicing portfolios [Abstract] | ||
Loans serviced for others | $ 136,206,000 | $ 118,994,000 |
Custodial balances maintained in connection with the foregoing loan servicing | 2,800,000 | 1,200,000 |
Net servicing (loss) | (66,000) | (98,000) |
FHLMC [Member]
|
||
Mortgage loan servicing portfolios [Abstract] | ||
Loans serviced for others | 235,000 | 285,000 |
FNMA [Member]
|
||
Mortgage loan servicing portfolios [Abstract] | ||
Loans serviced for others | 127,677,000 | 108,275,000 |
Other investors [Member]
|
||
Mortgage loan servicing portfolios [Abstract] | ||
Loans serviced for others | $ 8,294,000 | $ 10,434,000 |
FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)
|
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2012
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets Measured at Fair Value on a Recurring Basis | Determination of the appropriate level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement for the instrument or security. Assets and liabilities measured at fair value on a recurring basis segregated by fair value hierarchy level are summarized below:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets Measured at Fair Value on a Nonrecurring Basis | Assets and liabilities measured at fair value on a nonrecurring basis segregated by fair value hierarchy level are summarized below:
The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which the Bank has utilized Level 3 inputs to determine fair value at December 31, 2012:
The fair value of impaired loans is generally determined through independent appraisals of the underlying collateral, which generally include Level 3 inputs that are not identifiable. Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses. Impaired loans are evaluated and valued while the loan is identified as impaired, at the lower of the recorded investment in the loan or fair value. The range and weighted average of liquidation expenses are presented as a percent of the appraised value. The significant unobservable inputs used in the fair value measurements of the Company's impaired loans using discounted cash flow valuation technique include temporary changes in payment amounts and the probability of default. Significant increases (decreases) in payment amounts would result in significantly higher (lower) fair value measurements. The probability of default is 0% for impaired loans using the discounted cash flow valuation technique because all defaulted impaired loans are valued using the appraisal of collateral valuation technique. Real estate acquired through foreclosure is initially valued at the lower of the recorded investment in the loan or fair value at foreclosure and subsequently adjusted for further decreases in market value, if necessary. Fair value is determined by using the value of the real estate acquired through foreclosure based on appraisals prepared by qualified independent licensed appraisers contracted by the Company to perform the assessment and is therefore classified as a Level 3 hierarchy. Assets measured at fair value on a nonrecurring basis segregated by fair value hierarchy level at December 31, 2011 are summarized below:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Carrying Amounts And Fair Values | Fair values have been estimated using data which management considered the best available, as generally provided by estimation methodologies deemed suitable for the pertinent category of financial instrument. The recorded carrying amounts and fair values segregated by fair value hierarchy level at December 31, 2012 are summarized below:
The recorded carrying amounts and fair values at December 31, 2011 are summarized below:
|
BENEFIT PLANS (Tables)
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12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2012
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BENEFIT PLANS [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated and Projected Benefit Obligations | The following tables set forth the projected benefit obligation, the fair value of assets of the plan and funded status of the defined benefit pension plan as reflected in the consolidated balance sheets:
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Schedule of Amounts Recognized in Other Comprehensive Income (Loss) | The following table sets forth the amounts recognized in accumulated other comprehensive income for the years ended:
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Weighted-average Assumptions Used to Determine Benefit Obligations and Net Benefit Costs |
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Summary of Estimated Future Benefits Payments | Estimated future benefits payments are as follows:
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Schedule of Plan Assets at Fair Value | The following table sets forth by level, within the fair value hierarchy, the plan's financial assets at fair value as of December 31, 2012:
The following table sets forth by level, within the fair value hierarchy, the plan's financial assets at fair value as of December 31, 2011:
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Schedule of Weighted-average Allocation of Plan Assets | The plan's weighted-average asset allocations by asset category are as follows:
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Summary Disclosure of ESOP Plan | The Company has an internally leveraged ESOP for eligible employees who have completed six months of service with the Company or its subsidiaries. The ESOP borrowed $4.2 million from the Company in 1996 to purchase 423,200 newly issued shares of common stock. Any dividends received by the ESOP will be used to pay debt service. The Company makes discretionary contributions to the ESOP in order to service the ESOP's debt if necessary. The ESOP shares are pledged as collateral for its debt. As the debt is repaid, shares are released from collateral based on the proportion of debt service paid in the year and allocated to qualifying employees. The Company reports compensation expense in the amount equal to the fair value of shares allocated from the ESOP to employees less dividends received on the allocated shares in the plan used for debt service. The allocated shares are included in outstanding shares for earnings per share computations. ESOP compensation expense included in stock-based compensation totaled $286,000 and $222,000 for the years ended December 31, 2012 and 2011, respectively.
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Summary Status of Stock Option Plan | A summary of the status of the Company's stock option plans as of December 31, 2012 and 2011, and changes for each of the years in the periods then ended, is as follows:
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Summary of Stock Options Outstanding | The following table summarizes information about stock options outstanding at December 31, 2012:
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Summary of Aggregate Intrinsic Value of Options and Cash Receipts From Option Exercises | The following table reflects information on the aggregate intrinsic value of options as well as cash receipts from option exercises:
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Summary of Stock-based Compensation Expense | The following table provides information regarding the Company's stock-based compensation expense associated with stock options and grants:
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Summary of Changes in Non-vested Restricted Stock | The table below summarizes the changes in non-vested restricted stock for the year ended December 31, 2011. There were no stock grants during 2012.
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DEPOSITS (Details) (USD $)
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Dec. 31, 2012
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Dec. 31, 2011
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DEPOSITS [Abstract] | ||
Demand | $ 52,433,000 | $ 43,910,000 |
NOW | 76,370,000 | 65,677,000 |
Money market | 153,827,000 | 155,010,000 |
Passbook savings | 106,268,000 | 105,617,000 |
Total demand, transaction and passbook deposits | 388,898,000 | 370,214,000 |
Certificates of deposit | 171,417,000 | 181,074,000 |
Deposits | 560,315,000 | 551,288,000 |
Certificates of deposit with a minimum of $100,000 | 50,700,000 | 45,300,000 |
Scheduled maturities of certificates of deposit [Abstract] | ||
2013 | 114,386,000 | |
2014 | 32,593,000 | |
2015 | 12,868,000 | |
2016 | 7,964,000 | |
2017 | 3,441,000 | |
Thereafter | 165,000 | |
Certificates of deposit | 171,417,000 | 181,074,000 |
Related party deposits | $ 5,000,000 | $ 4,200,000 |
COMMITMENTS AND CONTINGENCIES (Details) (USD $)
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12 Months Ended | |
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Dec. 31, 2012
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Dec. 31, 2011
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Commitments [Line Items] | ||
Rental expense | $ 554,000 | $ 574,000 |
Minimum annual rental commitments of the Bank under all non-cancelable leases [Abstract] | ||
2013 | 470,000 | |
2014 | 399,000 | |
2015 | 236,000 | |
2016 | 168,000 | |
2017 | 133,000 | |
Thereafter | 948,000 | |
Total | 2,354,000 | |
Contingent liability benefit reimbursement period | 1 year | |
Change of control contingent liability | 2,300,000 | |
Maximum [Member]
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Commitments [Line Items] | ||
Lease terms | 10 years | |
Optional commitments to sell mortgage loans to investors [Member]
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Commitments [Line Items] | ||
Commitments | $ 7,500,000 | $ 5,300,000 |
CASH AND CASH EQUIVALENTS (Details) (USD $)
In Thousands, unless otherwise specified |
Dec. 31, 2012
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Dec. 31, 2011
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Cash and Cash Equivalents [Line Items] | ||
Cash and cash equivalents | $ 31,137 | $ 14,928 |
Cash and due from banks [Member]
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Cash and Cash Equivalents [Line Items] | ||
Cash and cash equivalents | 4,697 | 4,498 |
Interest-bearing deposits in other financial institutions [Member]
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Cash and Cash Equivalents [Line Items] | ||
Cash and cash equivalents | $ 26,440 | $ 10,430 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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12 Months Ended |
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Dec. 31, 2012
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES TF Financial Corporation (the "Company") is a unitary savings and loan holding company, organized under the laws of the Commonwealth of Pennsylvania, which conducts its consumer banking operations primarily through its wholly owned subsidiary, 3rd Fed Bank ("3rd Fed" or the "Bank"). 3rd Fed is a Pennsylvania-chartered stock savings bank insured by the Federal Deposit Insurance Corporation (the "FDIC"). 3rd Fed is a community-oriented savings institution and conducts operations from its main office in Newtown, Pennsylvania, eleven full-service branch offices located in Philadelphia and Bucks Counties, Pennsylvania, and two full-service branch offices located in Mercer County, New Jersey. The Bank competes with other banking and financial institutions in its primary market communities, including financial institutions with resources substantially greater than its own. Commercial banks, savings banks, savings and loan associations, credit unions and money market funds actively compete for savings and time deposits and loans. Such institutions, as well as consumer finance and insurance companies, may be considered competitors of the Bank with respect to one or more of the services it renders. The Bank is subject to regulations of certain state and federal agencies and, accordingly, those regulatory authorities conduct periodic examinations. As a consequence of the extensive regulation of commercial banking activities, the Bank's business is particularly susceptible to being affected by state and federal legislation and regulations. a. Principles of Consolidation and Basis of Presentation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries: Penns Trail Development Corporation and 3rd Fed, including 3rd Fed's wholly owned subsidiaries, Third Delaware Corporation and Teragon Financial Corporation (collectively, the "Company"). All material intercompany balances and transactions have been eliminated in consolidation. The accounting policies of the Company conform to accounting principles generally accepted in the United States of America ("US GAAP") and predominant practices within the banking industry. The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The more significant accounting policies are summarized below. b. Cash and Cash Equivalents The Company considers cash, due from banks, and interest-bearing deposits in other financial institutions, with original terms to maturity of less than three months, as cash equivalents for presentation purposes in the consolidated balance sheets and cash flows. The Company is required to maintain certain cash reserves relating to deposit liabilities. This requirement is ordinarily satisfied by cash on hand. c. Investment and Mortgage-Backed Securities The Company classifies its investment and mortgage-backed securities in one of three categories: held to maturity, trading, or available for sale. The Company does not presently engage in security trading activities. Investment and mortgage-backed securities available for sale are stated at fair value, with net unrealized gains and losses excluded from income and reported in other comprehensive income. See Note 16-Fair Value Measurements and Fair Value of Financial Instruments which defines the basis for determining fair value. Realized gains and losses on the sale of securities are recognized using the specific identification method. Mortgage-backed securities held to maturity are carried at cost, net of unamortized premiums and discounts, which are recognized in interest income using the interest method. On a quarterly basis, temporarily impaired securities are evaluated to determine whether such impairment is other-than-temporary impairment ("OTTI"). This evaluation involves consideration of the length of time and the amount by which the fair value has been lower than amortized cost, the financial condition and credit rating of the issuer, the changes in fair value in relation to the change in market interest rates and other relevant information. In addition, with respect to mortgage-backed securities issued by government and quasi-governmental agencies (i.e. Government National Mortgage Association ("GNMA"), Federal Home Loan Mortgage Corporation ("FHLMC") and Federal National Mortgage Association ("FNMA")), the Company considers the ultimate payment of principal and interest as an obligation of the United States Government and thus assured. With respect to mortgage-backed securities issued by private parties, the Company studies delinquencies, loss rates, loss severity and other information related to the underlying loans in order to form an opinion regarding the possibility of a cash flow shortfall. The Company also evaluates its intent to hold, intent to sell or need to sell the securities in light of its investment strategy, cash flow needs, interest rate risk position, prospects for the issuer and all other relevant factors. d. Loans Receivable, net Loans receivable that management has the intent and ability to hold for the foreseeable future, or until maturity or payoff, are stated at unpaid principal balances less the allowance for loan losses, and net of deferred loan origination fees and direct origination costs. Loan origination fees and costs on loans are amortized to income using the interest method over the remaining period to contractual maturity, adjusted for actual prepayments. The Bank provides valuation allowances for estimated losses from uncollectible loans. The allowance is increased by provisions charged to expense and reduced by net charge-offs. On a quarterly basis, the Bank prepares an allowance for loan losses ("ALLL") analysis. In the analysis, the loan portfolio is segmented into groups of homogeneous loans that share similar risk characteristics: owner and non-owner occupied commercial, multi-family real estate, construction, commercial and industrial, one-to four-family residential, and consumer which is predominately real estate secured junior liens and home equity lines of credit as well as other consumer loans. Each segment is assigned reserve factors based on quantitative and qualitative measurements. In addition, the Bank reviews its internally classified loans, its loans classified for regulatory purposes, delinquent loans, and other relevant information in order to isolate loans for further scrutiny as potentially impaired loans. Quantitative factors include an actual expected loss factor based on historical loss experience over a relevant look-back period. Quantitative factors also include the Bank's actual risk ratings for the commercial loan segments as determined in accordance with loan review and loan grading policies and procedures, and additional factors as determined by management to be representative of additional risk due to the loan's geographic location, type, and other attributes. These quantitative factors are adjusted if necessary, up or down, based on actual experience and an evaluation of qualitative factors. Qualitative factors are based upon: (1) changes in lending policies and procedures, including but not limited to changes in underwriting standards and collection, charge-off, and recovery practices not considered elsewhere in estimating credit losses; (2) changes in international, national, regional, and local economic and business conditions and developments that affect the collectability of the portfolio, including the condition of various market segments; (3) changes in the nature and volume of the portfolio and in the terms of loans; (4) changes in the experience, ability, and depth of lending management and other relevant staff; (5) changes in the volume and severity of past due loans, the volume of nonaccrual loans, and the volume and severity of adversely classified or graded loans; (6) changes in the quality of the loan review system; (7) changes in the value of underlying collateral for collateral dependent loans; (8) the existence and effect of any concentration of credit, and changes in the level of such concentrations; and (9) the effect of other external factors such as competition and legal and regulatory requirements on the level of estimated credit losses in the existing loan portfolio. Potentially impaired loans selected for individual evaluation are reviewed in accordance with US GAAP which governs the accounting for impaired assets and consideration of regulatory guidance regarding treatment of troubled, collateral dependent loans. Each potentially impaired loan is evaluated using all available information such as recent appraisals, whether the loan is currently on accrual or nonaccrual status, discounted cash flow analyses, guarantor financial strength, the value of additional collateral, and the loan's and borrower's past performance to determine whether in management's best judgment it is probable that the Bank will be unable to collect all contractual interest and principal in accordance with the loan's terms. Loans deemed impaired are generally assigned a reserve derived from the value of the underlying collateral. Loans deemed not to be impaired are assigned a reserve factor based upon the class from which they were selected. The ALLL needed as a result of the foregoing evaluations is compared with the unadjusted amount, and an adjustment is made by means of a provision charged to expense for loan losses. Recognizing the inherently imprecise nature of the loss estimates and the large number of assumptions needed in order to perform the analysis, there may be an unallocated portion of the ALLL. Management adjusts the unallocated portion to an amount which management considers reasonable under the circumstances. The Bank provides an allowance for accrued but uncollected interest when a loan becomes more than ninety days past due or is identified as impaired. The allowance is established by a charge to interest income equal to all interest previously accrued, and income is subsequently recognized only to the extent that cash payments are received until, in management's judgment, the borrower's ability to make periodic interest and principal payments is no longer impaired, in which case the loan is returned to accrual status. e. Loans Receivable, Held-for-Sale Mortgage loans originated and intended for sale in the secondary market are carried at fair value on an individual basis. Any resulting gain or loss is included in other operating income. f. Troubled Debt Restructurings Loans whose terms are modified are classified as Troubled Debt Restructurings ("TDRs") if the Company grants such borrowers concessions and it is deemed that those borrowers are experiencing financial difficulty. Concessions granted under a troubled debt restructuring may include extending the maturity date of the loan, reducing the interest rate on the loan to a rate which is below market, a combination of rate adjustments and maturity extensions, or by other means including covenant modifications, forbearances or other concessions. Interest income is not accrued on loans that had been placed on nonaccrual prior to the troubled debt restructuring until they have performed in accordance with their restructured terms for a period of at least six months. The Company evaluates the ALLL needed with respect to TDRs under the same policy and guidelines as all other loans, and TDRs are evaluated individually for impairment. g. Transfers of Financial Assets The Company accounts for the transfers of financial assets using the financial–components approach. This approach recognizes the financial and servicing assets it controls and the liabilities it has incurred, derecognizes financial assets when control has been surrendered and derecognizes liabilities when extinguished. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity. Mortgage servicing rights ("MSRs") are recognized as separate assets when rights are acquired through purchase or through sale of financial assets. Under the applicable accounting guidance regarding servicing assets and liabilities, servicing rights resulting from the sale of loans originated by the Company are initially measured at fair value at the date of transfer. Fair value is based on market prices for comparable mortgage servicing rights, when available, or alternatively is based on a valuation model that calculates the present value of estimated future net servicing income. The Company subsequently recognizes mortgage servicing expense for each class of servicing assets using the amortization method. MSRs are amortized into noninterest income in proportion to, and over the period of, the estimated future net servicing income of the underlying financial assets. Servicing assets are evaluated quarterly for impairment based upon the fair value of the rights as compared to amortized cost. Impairment is determined by stratifying rights into tranches based on predominant risk characteristics, such as interest rate, loan type and investor type. Impairment is recognized through a valuation allowance charged to servicing fee income for an individual tranche, to the extent that fair value is less than the amortized cost for the tranche. If the Company later determines that all or a portion of the impairment no longer exists for a particular tranche, a reduction of the allowance may be recorded as an increase to other operating income. These servicing rights are included in other assets in the Consolidated Balance Sheets and are discussed in Note 16-Fair Value Measurements and Fair Value of Financial Instruments. Servicing fee income is recorded for fees earned for servicing loans. The fees are based on a contractual percentage of the outstanding principal, or a fixed amount per loan, and are recorded as income when earned. The amortization of loan servicing rights is recorded as a reduction of service fee income. h. Premises and Equipment Land is carried at cost. Buildings and furniture, fixtures and equipment are carried at cost less accumulated depreciation. Depreciation is provided by the straight-line method over the estimated useful lives of the assets. The Company records any impairment of long-lived assets to be held and used or to be disposed of by sale. The Company had no impaired long-lived assets at December 31, 2012 and 2011. i. Foreclosed Real Estate Real estate acquired through, or in lieu of, loan foreclosure is carried at the fair value of the property, based on an appraisal less estimated cost to sell. Revenue and expenses from operations and changes in the valuation allowance (any direct write-down) are included in foreclosed real estate expense. Included in other assets is foreclosed real estate of $7.3 million and $11.7 million at December 31, 2012 and 2011, respectively. j. Goodwill Goodwill does not require amortization but is subject to impairment testing. Goodwill impairment testing allows entities to first assess qualitative factors and circumstance to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. At December 31, 2012, the Company performed an assessment of key factors and determined that impairment of goodwill was not likely. k. Bank Owned Life Insurance The Company maintains life insurance policies on the lives of executives and officers. The Company is the owner and beneficiary of the policies. The cash surrender values of the policies were approximately $19.1 million and $18.5 million at December 31, 2012 and 2011, respectively. l. Benefit Plans The Company has established an ESOP covering eligible employees with six months of service, as defined by the ESOP. The Company records compensation expense in the amount equal to the fair value of shares committed to be released from the ESOP to employees less dividends received on the allocated shares applied to the required debt service of the plan. The Company has a defined benefit pension plan covering substantially all full-time employees meeting certain requirements. The Company recognizes the overfunded or underfunded status of the defined benefit postretirement plan as an asset or liability in its Consolidated Balance Sheets and recognizes changes in that funded status, including the gains and or losses and prior service costs or credits that were not recognized as components of net periodic benefit cost, in the year in which the changes occur through accumulated other comprehensive income. The Company measures the funded status of a plan as of the date of its year-end Consolidated Balance Sheet. m. Stock-Based Compensation The Company has stock benefit plans that allow the Company to grant options and stock to employees and directors and which are more fully discussed in Note 10-Benefit Plans. The options, which have a term of up to 10 years when issued, vest over a three to five year period. The exercise price of each option equals the market price of the Company's stock on the date of the grant. The Company measures compensation cost at the grant date based on the fair value of the award. Compensation is then recognized over the service period which is usually the vesting period. There were no options granted in 2012 or 2011. n. Income Taxes The Company accounts for income taxes under the liability method whereby deferred income taxes are recognized for the tax consequences of "temporary differences" by applying enacted statutory tax rates applicable to future years to differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. The effect on deferred taxes due to change in tax rates is recognized in income in the period that includes the enactment date. o. Advertising Costs The Company expenses marketing and advertising costs as incurred. p. Earnings Per Share Basic earnings per share is computed by dividing income available to common shareholders by the weighted average common shares outstanding during the period. Diluted earnings per share takes into account the potential dilution that could occur if securities or other contracts to issue common stock were exercised and converted into common stock. q. Segment Reporting The Company has one reportable segment, "Community Banking." All of the Company's activities are interrelated, and each activity is dependent and assessed based on how each of the activities of the Company supports the others. For example, commercial lending is dependent upon the ability of the Bank to fund itself with retail deposits and other borrowings and to manage interest rate and credit risk. This situation is also similar for consumer and residential mortgage lending. Accordingly, all significant operating decisions are based upon analysis of the Company as one operating segment or unit. r. Fair Value of Financial Instruments Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in Note 16-Fair Value Measurements and Fair Value of Financial Instruments. Fair value estimates involve uncertainties and matters of significant judgment. Changes in assumptions or in market conditions could significantly affect the estimates. |
SIGNIFICANT CONCENTRATIONS OF CREDIT RISK (Details) (Product Concentration Risk [Member])
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12 Months Ended |
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Dec. 31, 2012
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Product Concentration Risk [Member]
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Concentration Risk [Line Items] | |
Maximum amortization terms on loan origination | 30 years |
Loan to value ratio (in hundredths) | 80.00% |