| First Defiance Financial Corp. | |
(Exact name of registrant as specified in its charter) |
Ohio | | 34-1803915 |
(State or other jurisdiction of | | (I.R.S. Employer |
incorporation or organization) | | Identification Number) |
601 Clinton Street, Defiance, Ohio | | 43512 |
(Address of principal executive office) | | (Zip Code) |
| Large accelerated filer ¨ | Accelerated filer x |
| Non-accelerated filer ¨ | Smaller reporting company ¨ |
| | Page Number |
PART I-FINANCIAL INFORMATION | | |
| | |
Item 1. | Consolidated Condensed Financial Statements (Unaudited): Consolidated Condensed Statements of Financial Condition September 30, 2013 and December 31, 2012 | 2 |
| | |
| Consolidated Condensed Statements of Income - Three and nine months ended September 30, 2013 and 2012 | 4 |
| | |
| Consolidated Condensed Statements of Comprehensive Income Three and nine months ended September 30, 2013 and 2012 | 5 |
| | |
| Consolidated Condensed Statements of Changes in Stockholders’ Equity Nine months ended September 30, 2013 and 2012 | 6 |
| | |
| Consolidated Condensed Statements of Cash Flows - Nine months ended September 30, 2013 and 2012 | 7 |
| | |
| Notes to Consolidated Condensed Financial Statements | 8 |
| | |
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | 50 |
| | |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 72 |
| | |
Item 4. | Controls and Procedures | 73 |
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PART II-OTHER INFORMATION | | |
| | |
Item 1. | Legal Proceedings | 74 |
| | |
Item 1A. | Risk Factors | 74 |
| | |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 74 |
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Item 3. | Defaults Upon Senior Securities | 74 |
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Item 4. | Mine Safety Disclosures | 74 |
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Item 5. | Other Information | 74 |
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Item 6. | Exhibits | 74 |
| | |
| Signatures | 75 |
1 | ||
FIRST DEFIANCE FINANCIAL CORP. |
Consolidated Condensed Statements of Financial Condition |
(UNAUDITED) |
(Amounts in Thousands, except per share data) |
|
| | September 30, 2013 | | December 31, 2012 | | ||
Assets | | | | | | | |
Cash and cash equivalents: | | | | | | | |
Cash and amounts due from depository institutions | | $ | 42,629 | | $ | 45,832 | |
Federal funds sold | | | 85,000 | | | 91,000 | |
| | | 127,629 | | | 136,832 | |
Securities: | | | | | | | |
Available-for-sale, carried at fair value | | | 184,119 | | | 194,101 | |
Held-to-maturity, carried at amortized cost (fair value $413 and $516 at September 30, 2013 and December 31, 2012, respectively) | | | 407 | | | 508 | |
| | | 184,526 | | | 194,609 | |
Loans held for sale | | | 13,391 | | | 22,064 | |
Loans receivable, net of allowance of $25,964 at September 30, 2013 and $26,711 at December 31, 2012, respectively | | | 1,535,315 | | | 1,498,546 | |
Accrued interest receivable | | | 6,425 | | | 5,594 | |
Federal Home Loan Bank stock | | | 19,350 | | | 20,655 | |
Bank owned life insurance | | | 42,504 | | | 41,832 | |
Premises and equipment | | | 39,066 | | | 39,663 | |
Real estate and other assets held for sale | | | 5,518 | | | 3,805 | |
Goodwill | | | 61,525 | | | 61,525 | |
Core deposit and other intangibles | | | 3,793 | | | 4,738 | |
Mortgage servicing rights | | | 9,182 | | | 7,833 | |
Deferred taxes | | | 2,253 | | | 78 | |
Other assets | | | 7,953 | | | 9,174 | |
Total assets | | $ | 2,058,430 | | $ | 2,046,948 | |
2 | ||
FIRST DEFIANCE FINANCIAL CORP. |
Consolidated Condensed Statements of Financial Condition |
(UNAUDITED) |
(Amounts in Thousands, except per share data) |
|
| | September 30, 2013 | | December 31, 2012 | | ||
Liabilities and stockholders’ equity | | | | | | | |
Liabilities: | | | | | | | |
Deposits | | $ | 1,658,492 | | $ | 1,667,472 | |
Advances from the Federal Home Loan Bank | | | 22,761 | | | 12,796 | |
Subordinated debentures | | | 36,083 | | | 36,083 | |
Securities sold under repurchase agreements | | | 50,822 | | | 51,702 | |
Advance payments by borrowers | | | 1,752 | | | 1,473 | |
Other liabilities | | | 19,161 | | | 19,294 | |
Total liabilities | | | 1,789,071 | | | 1,788,820 | |
| | | | | | | |
Stockholders’ equity: | | | | | | | |
| | | | | | | |
Preferred stock, $.01 par value per share: | | | | | | | |
5,000,000 shares authorized; no shares issued | | | | | | | |
Common stock, $.01 par value per share: | | | | | | | |
25,000,000 shares authorized; 12,735,313 and 12,739,496 shares issued and 9,784,737 and 9,729,466 shares outstanding, respectively | | | 127 | | | 127 | |
Common stock warrant | | | 878 | | | 878 | |
Additional paid-in capital | | | 136,257 | | | 136,046 | |
Accumulated other comprehensive income, net of tax of $152 and $2,301, respectively | | | 282 | | | 4,274 | |
Retained earnings | | | 178,181 | | | 164,103 | |
Treasury stock, at cost, 2,950,576 and 3,010,030 shares respectively | | | (46,366) | | | (47,300) | |
Total stockholders’ equity | | | 269,359 | | | 258,128 | |
| | | | | | | |
Total liabilities and stockholders’ equity | | $ | 2,058,430 | | $ | 2,046,948 | |
3 | ||
FIRST DEFIANCE FINANCIAL CORP. |
Consolidated Condensed Statements of Income |
(UNAUDITED) |
(Amounts in Thousands, except per share data) |
|
| | Three Months Ended | | Nine Months Ended | | ||||||||
| | September 30, | | September 30, | | ||||||||
| | 2013 | | 2012 | | 2013 | | 2012 | | ||||
Interest Income | | | | | | | | | | | | | |
Loans | | $ | 17,197 | | $ | 18,000 | | $ | 51,040 | | $ | 54,847 | |
Investment securities: | | | | | | | | | | | | | |
Taxable | | | 667 | | | 1,093 | | | 2,019 | | | 3,473 | |
Non-taxable | | | 723 | | | 749 | | | 2,180 | | | 2,146 | |
Interest-bearing deposits | | | 44 | | | 43 | | | 174 | | | 249 | |
FHLB stock dividends | | | 205 | | | 213 | | | 631 | | | 656 | |
Total interest income | | | 18,836 | | | 20,098 | | | 56,044 | | | 61,371 | |
Interest Expense | | | | | | | | | | | | | |
Deposits | | | 1,356 | | | 1,909 | | | 4,514 | | | 6,394 | |
FHLB advances and other | | | 116 | | | 759 | | | 298 | | | 2,260 | |
Subordinated debentures | | | 150 | | | 172 | | | 452 | | | 813 | |
Notes payable | | | 58 | | | 83 | | | 178 | | | 284 | |
Total interest expense | | | 1,680 | | | 2,923 | | | 5,442 | | | 9,751 | |
Net interest income | | | 17,156 | | | 17,175 | | | 50,602 | | | 51,620 | |
Provision for loan losses | | | 476 | | | 705 | | | 1,349 | | | 8,306 | |
Net interest income after provision for loan losses | | | 16,680 | | | 16,470 | | | 49,253 | | | 43,314 | |
Non-interest Income | | | | | | | | | | | | | |
Service fees and other charges | | | 2,605 | | | 2,790 | | | 7,539 | | | 8,148 | |
Insurance and investment commission income | | | 2,225 | | | 1,952 | | | 7,538 | | | 6,679 | |
Mortgage banking income | | | 1,846 | | | 2,220 | | | 7,119 | | | 6,924 | |
Gain on sale of non-mortgage loans | | | 35 | | | 8 | | | 52 | | | 50 | |
Gain on sale or call of securities | | | - | | | 103 | | | 97 | | | 528 | |
Trust income | | | 196 | | | 147 | | | 545 | | | 470 | |
Income from bank owned life insurance | | | 212 | | | 244 | | | 672 | | | 683 | |
Other non-interest income | | | 170 | | | 316 | | | 535 | | | 712 | |
Total non-interest income | | | 7,289 | | | 7,780 | | | 24,097 | | | 24,194 | |
Non-interest Expense | | | | | | | | | | | | | |
Compensation and benefits | | | 8,718 | | | 8,245 | | | 25,991 | | | 24,760 | |
Occupancy | | | 1,739 | | | 2,170 | | | 5,087 | | | 5,718 | |
FDIC insurance premium | | | 326 | | | 691 | | | 1,257 | | | 2,031 | |
State franchise tax | | | 580 | | | 623 | | | 1,837 | | | 1,649 | |
Data processing | | | 1,318 | | | 1,140 | | | 3,812 | | | 3,477 | |
Amortization of intangibles | | | 296 | | | 344 | | | 945 | | | 1,068 | |
Other non-interest expense | | | 3,068 | | | 3,237 | | | 9,987 | | | 9,538 | |
Total non-interest expense | | | 16,045 | | | 16,450 | | | 48,916 | | | 48,241 | |
Income before income taxes | | | 7,924 | | | 7,800 | | | 24,434 | | | 19,267 | |
Federal income taxes | | | 2,445 | | | 2,366 | | | 7,286 | | | 5,759 | |
Net Income | | $ | 5,479 | | $ | 5,434 | | $ | 17,148 | | $ | 13,508 | |
| | | | | | | | | | | | | |
Dividends accrued on preferred shares | | $ | - | | $ | (3) | | $ | - | | $ | (900) | |
Accretion on preferred shares | | $ | - | | $ | (8) | | $ | - | | $ | (359) | |
Redemption of preferred shares | | $ | - | | $ | - | | $ | - | | $ | 642 | |
Net income applicable to common shares | | $ | 5,479 | | $ | 5,423 | | $ | 17,148 | | $ | 12,891 | |
| | | | | | | | | | | | | |
Earnings per common share (Note 6) | | | | | | | | | | | | | |
Basic | | $ | 0.56 | | $ | 0.56 | | $ | 1.76 | | $ | 1.33 | |
Diluted | | $ | 0.54 | | $ | 0.54 | | $ | 1.69 | | $ | 1.29 | |
Dividends declared per share (Note 5) | | $ | 0.10 | | $ | 0.05 | | $ | 0.30 | | $ | 0.15 | |
Average common shares outstanding (Note 6) | | | | | | | | | | | | | |
Basic | | | 9,780 | | | 9,729 | | | 9,763 | | | 9,728 | |
Diluted | | | 10,212 | | | 10,000 | | | 10,160 | | | 9,993 | |
4 | ||
FIRST DEFIANCE FINANCIAL CORP. |
Consolidated Condensed Statements of Comprehensive Income |
(UNAUDITED) |
(Amounts in Thousands) |
|
| | Three Months Ended | | Nine Months Ended | | ||||||||
| | September 30, | | September 30, | | ||||||||
| | 2013 | | 2012 | | 2013 | | 2012 | | ||||
Net Income | | $ | 5,479 | | $ | 5,434 | | $ | 17,148 | | $ | 13,508 | |
| | | | | | | | | | | | | |
Other comprehensive income: | | | | | | | | | | | | | |
Unrealized gains (losses) on securities available for sale | | | 120 | | | 1,953 | | | (6,044) | | | 3,397 | |
Reclassification adjustment for security (gains) losses | | | | | | | | | | | | | |
included in net income(1) | | | - | | | (103) | | | (97) | | | (528) | |
Income tax | | | (42) | | | (647) | | | 2,149 | | | (1,003) | |
Other comprehensive income (loss) | | | 78 | | | 1,203 | | | (3,992) | | | 1,866 | |
| | | | | | | | | | | | | |
Comprehensive income | | $ | 5,557 | | $ | 6,637 | | $ | 13,156 | | $ | 15,374 | |
5 | ||
FIRST DEFIANCE FINANCIAL CORP. |
Consolidated Condensed Statements of Changes in Stockholders’ Equity |
(UNAUDITED) |
(Amounts in Thousands) |
|
| | | | | | | | | | | | | | Accumulated | | | | | | | | | | | |
| | | | | | | | Common | | Additional | | Other | | | | | | | | Total | | ||||
| | Preferred | | Common | | Stock | | Paid-In | | Comprehensive | | Retained | | Treasury | | Stockholders’ | | ||||||||
| | Stock | | Stock | | Warrant | | Capital | | Income (Loss) | | Earnings | | Stock | | Equity | | ||||||||
Balance at January 1, 2013 | | $ | - | | $ | 127 | | $ | 878 | | $ | 136,046 | | $ | 4,274 | | $ | 164,103 | | $ | (47,300) | | $ | 258,128 | |
Net income | | | - | | | - | | | - | | | - | | | - | | | 17,148 | | | - | | | 17,148 | |
Other comprehensive loss | | | - | | | - | | | - | | | - | | | (3,992) | | | - | | | - | | | (3,992) | |
Stock option expense | | | - | | | - | | | - | | | 35 | | | - | | | - | | | - | | | 35 | |
20,707 shares issued under stock option plan with no income tax benefit, net of repurchases | | | - | | | - | | | - | | | (21) | | | - | | | (97) | | | 390 | | | 272 | |
Restricted share activity under Stock Incentive Plans including 31,796 shares issued | | | - | | | - | | | - | | | 177 | | | - | | | (45) | | | 500 | | | 632 | |
2,768 shares issued direct purchases | | | - | | | - | | | - | | | 20 | | | - | | | - | | | 44 | | | 64 | |
Common stock dividends declared | | | - | | | - | | | - | | | - | | | - | | | (2,928) | | | - | | | (2,928) | |
Balance at September 30, 2013 | | $ | - | | $ | 127 | | $ | 878 | | $ | 136,257 | | $ | 282 | | $ | 178,181 | | $ | (46,366) | | $ | 269,359 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Balance at January 1, 2012 | | $ | 36,641 | | $ | 127 | | $ | 878 | | $ | 135,825 | | $ | 3,997 | | $ | 148,010 | | $ | (47,351) | | $ | 278,127 | |
Net income | | | - | | | - | | | - | | | - | | | - | | | 13,508 | | | - | | | 13,508 | |
Change in net unrealized gains and losses on available-for-sale securities | | | | | | | | | | | | | | | 1,866 | | | | | | | | | 1,866 | |
Stock option expense | | | - | | | - | | | - | | | 82 | | | - | | | - | | | - | | | 82 | |
500 shares issued under stock option plan, with no income tax benefit | | | - | | | - | | | - | | | - | | | - | | | (4) | | | 8 | | | 4 | |
Restricted share activity under Stock Incentive Plans | | | - | | | - | | | - | | | 230 | | | - | | | - | | | 30 | | | 260 | |
637 shares issued direct purchases | | | - | | | - | | | - | | | 1 | | | - | | | - | | | 10 | | | 11 | |
Preferred Stock Dividends accrued | | | - | | | - | | | - | | | - | | | - | | | (900) | | | - | | | (900) | |
Accretion on preferred shares | | | 359 | | | - | | | - | | | - | | | - | | | (359) | | | - | | | - | |
16,560 shares purchased in U.S. Treasury auction | | | (16,560) | | | - | | | - | | | - | | | - | | | 618 | | | - | | | (15,942) | |
20,440 shares purchased in open market | | | (20,440) | | | - | | | - | | | - | | | - | | | 24 | | | - | | | (20,416) | |
Common stock dividends declared | | | - | | | - | | | - | | | - | | | - | | | (1,464) | | | - | | | (1,464) | |
Balance at September 30, 2012 | | $ | - | | $ | 127 | | $ | 878 | | $ | 136,138 | | $ | 5,863 | | $ | 159,433 | | $ | (47,303) | | $ | 255,136 | |
6 | ||
FIRST DEFIANCE FINANCIAL CORP. |
Consolidated Condensed Statements of Cash Flows |
(UNAUDITED) |
(Amounts in Thousands) |
|
| | Nine Months Ended | | ||||
| | September 30, | | ||||
| | 2013 | | 2012 | | ||
Operating Activities | | | | | | | |
Net income | | $ | 17,148 | | $ | 13,508 | |
Items not requiring (providing) cash | | | | | | | |
Provision for loan losses | | | 1,349 | | | 8,306 | |
Depreciation | | | 2,356 | | | 2,552 | |
Amortization of mortgage servicing rights, net of valuation adjustments | | | 487 | | | 3,465 | |
Amortization of core deposit and other intangible assets | | | 945 | | | 1,068 | |
Net amortization of premiums and discounts on loans and deposits | | | 570 | | | 516 | |
Amortization of premiums and discounts on securities | | | 401 | | | 621 | |
Loss on sale or disposals of property, plant and equipment | | | 1 | | | 43 | |
Change in deferred taxes | | | (27) | | | 1,104 | |
Proceeds from the sale of loans held for sale | | | 271,413 | | | 381,875 | |
Originations of loans held for sale | | | (259,616) | | | (374,872) | |
Gain from sale of loans | | | (5,012) | | | (7,940) | |
Gain from sale or call of securities | | | (97) | | | (528) | |
Loss on sale or write-down of real estate and other assets held for sale | | | 418 | | | 302 | |
Stock option expense | | | 35 | | | 82 | |
Restricted stock expense | | | 632 | | | 260 | |
Income from bank-owned life insurance | | | (672) | | | (683) | |
Changes in: | | | | | | | |
Accrued interest receivable | | | (831) | | | (677) | |
Other assets | | | 1,221 | | | (325) | |
Other liabilities | | | (133) | | | 4,873 | |
Net cash provided by operating activities | | | 30,588 | | | 33,550 | |
| | | | | | | |
Investing Activities | | | | | | | |
Proceeds from maturities of held-to-maturity securities | | | 100 | | | 76 | |
Proceeds from maturities, calls and pay-downs of available-for-sale securities | | | 30,258 | | | 49,571 | |
Proceeds from sale of real estate and other assets held for sale | | | 2,696 | | | 2,901 | |
Proceeds from the sale of available-for-sale securities | | | 4,027 | | | 8,538 | |
Proceeds from sale of non-mortgage loans | | | 11,648 | | | 371 | |
Purchases of available-for-sale securities | | | (30,746) | | | (91,513) | |
Proceeds from Federal Home Loan Bank stock redemption | | | 1,305 | | | - | |
Purchase of bank-owned life insurance | | | - | | | (5,000) | |
Purchases of portfolio mortgage loans | | | (4,545) | | | - | |
Purchases of premises and equipment, net | | | (1,760) | | | (2,874) | |
Net increase in loans receivable | | | (50,568) | | | (43,572) | |
Net cash used in by investing activities | | | (37,585) | | | (81,502) | |
| | | | | | | |
Financing Activities | | | | | | | |
Net increase (decrease) in deposits and advance payments by borrowers | | | (8,699) | | | 12,689 | |
Repayment of Federal Home Loan Bank advances | | | (35) | | | (34) | |
Increase in Federal Home Loan Bank short-term advances | | | 10,000 | | | - | |
Decrease in securities sold under repurchase agreements | | | (880) | | | (8,395) | |
Cash paid for redemption of preferred stock | | | - | | | (36,358) | |
Proceeds from exercise of stock options | | | 272 | | | 4 | |
Proceeds from treasury stock sales | | | 64 | | | 11 | |
Cash dividends paid on common stock | | | (2,928) | | | (1,464) | |
Cash dividends paid on preferred stock | | | - | | | (1,026) | |
Net cash used in financing activities | | | (2,206) | | | (34,573) | |
Decrease in cash and cash equivalents | | | (9,203) | | | (82,525) | |
Cash and cash equivalents at beginning of period | | | 136,832 | | | 174,931 | |
Cash and cash equivalents at end of period | | $ | 127,629 | | $ | 92,406 | |
| | | | | | | |
Supplemental cash flow information: | | | | | | | |
Interest paid | | $ | 5,427 | | $ | 9,814 | |
Income taxes paid | | $ | 8,300 | | $ | 800 | |
Transfers from loans to real estate and other assets held for sale | | $ | 4,827 | | $ | 2,418 | |
7 | ||
FIRST DEFIANCE FINANCIAL CORP. |
Notes to Consolidated Condensed Financial Statements |
(Unaudited at September 30, 2013 and 2012) |
|
1. | Basis of Presentation |
8 | ||
3. | Fair Value |
9 | ||
10 | ||
11 | ||
September 30, 2013 | | Level 1 Inputs | | Level 2 Inputs | | Level 3 Inputs | | Total Fair Value | | ||||
| | (In Thousands) | | ||||||||||
Available for sale securities: | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Obligations of U.S. Government corporations and agencies | | $ | - | | $ | 4,931 | | $ | - | | $ | 4,931 | |
Mortgage-backed - residential | | | - | | | 36,939 | | | - | | | 36,939 | |
Collateralized mortgage obligations | | | - | | | 52,544 | | | - | | | 52,544 | |
Trust preferred stock | | | - | | | - | | | 1,890 | | | 1,890 | |
Preferred stock | | | 476 | | | - | | | - | | | 476 | |
Corporate bonds | | | - | | | 8,968 | | | - | | | 8,968 | |
Obligations of state and political subdivisions | | | - | | | 78,371 | | | | | | 78,371 | |
Mortgage banking derivative - asset | | | - | | | 548 | | | - | | | 548 | |
Mortgage banking derivative - liability | | | - | | | (247) | | | - | | | (247) | |
December 31, 2012 | | Level 1 Inputs | | Level 2 Inputs | | Level 3 Inputs | | Total Fair Value | | ||||
| | (In Thousands) | | ||||||||||
Available for sale securities: | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Obligations of U.S. Government corporations and agencies | | $ | - | | $ | 11,069 | | $ | - | | $ | 11,069 | |
U.S. treasury bonds | | | - | | | 1,002 | | | - | | | 1,002 | |
Mortgage-backed - residential | | | - | | | 31,461 | | | - | | | 31,461 | |
Collateralized mortgage obligations | | | - | | | 57,466 | | | - | | | 57,466 | |
Trust preferred stock | | | - | | | - | | | 1,474 | | | 1,474 | |
Preferred stock | | | 134 | | | - | | | - | | | 134 | |
Corporate bonds | | | - | | | 8,884 | | | - | | | 8,884 | |
Obligations of state and political subdivisions | | | - | | | 82,611 | | | - | | | 82,611 | |
Mortgage banking derivative - asset | | | - | | | 950 | | | - | | | 950 | |
Mortgage banking derivative - liability | | | - | | | (94) | | | - | | | (94) | |
12 | ||
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) (In Thousands) | | |||
Beginning balance, January 1, 2013 | | $ | 1,474 | |
Total gains or losses (realized/unrealized) | | | | |
Included in earnings (realized) | | | - | |
Included in other comprehensive income (presented gross of taxes) | | | 416 | |
Amortization | | | - | |
Sales | | | - | |
Transfers in and/or out of Level 3 | | | - | |
Ending balance, September 30, 2013 | | $ | 1,890 | |
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) (In Thousands) | | |||
Beginning balance, July 1, 2013 | | $ | 1,736 | |
Total gains or losses (realized/unrealized) | | | | |
Included in earnings (realized) | | | - | |
Included in other comprehensive income (presented gross of taxes) | | | 154 | |
Amortization | | | - | |
Sales | | | - | |
Transfers in and/or out of Level 3 | | | - | |
Ending balance, September 30, 2013 | | $ | 1,890 | |
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) (In Thousands) | | |||
Beginning balance, January 1, 2012 | | $ | 1,342 | |
Total gains or losses (realized/unrealized) | | | | |
Included in earnings (realized) | | | 81 | |
Included in other comprehensive income (presented gross of taxes) | | | 151 | |
Amortization | | | - | |
Redemption | | | (266) | |
Transfers in and/or out of Level 3 | | | - | |
Ending balance, September 30, 2012 | | $ | 1,308 | |
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) (In Thousands) | | |||
Beginning balance, July 1, 2012 | | $ | 1,227 | |
Total gains or losses (realized/unrealized) | | | | |
Included in earnings (realized) | | | - | |
Included in other comprehensive income (presented gross of taxes) | | | 81 | |
Amortization | | | - | |
Redemption | | | - | |
Transfers in and/or out of Level 3 | | | - | |
Ending balance, September 30, 2012 | | $ | 1,308 | |
13 | ||
September 30, 2013 | | Level 1 Inputs | | Level 2 Inputs | | Level 3 Inputs | | Total Fair Value | | ||||
| | (In Thousands) | | ||||||||||
Impaired loans | | | | | | | | | | | | | |
Residential Loans | | $ | - | | $ | - | | $ | 353 | | $ | 353 | |
Commercial Loans | | | - | | | - | | | 1,159 | | | 1,159 | |
Home Equity Loans | | | - | | | - | | | 141 | | | 141 | |
Multi Family Loans | | | - | | | - | | | 355 | | | 355 | |
CRE loans | | | - | | | - | | | 6,435 | | | 6,435 | |
Total impaired loans | | | - | | | - | | | 8,443 | | | 8,443 | |
Mortgage servicing rights | | | - | | | 1,495 | | | - | | | 1,495 | |
Real estate held for sale | | | | | | | | | | | | | |
Residential Loans | | | - | | | - | | | 65 | | | 65 | |
CRE loans | | | - | | | - | | | 562 | | | 562 | |
Total Real Estate held for sale | | | - | | | - | | | 627 | | | 627 | |
December 31, 2012 | | Level 1 Inputs | | Level 2 Inputs | | Level 3 Inputs | | Total Fair Value | | ||||
| | (In Thousands) | | ||||||||||
Impaired loans | | | | | | | | | | | | | |
Residential Loans | | $ | - | | $ | - | | $ | 599 | | $ | 599 | |
Commercial Loans | | | - | | | - | | | 771 | | | 771 | |
Home Equity Loans | | | - | | | - | | | 168 | | | 168 | |
Multi Family Loans | | | - | | | - | | | 407 | | | 407 | |
CRE loans | | | - | | | - | | | 12,126 | | | 12,126 | |
Total Impaired loans | | | - | | | - | | | 14,071 | | | 14,071 | |
Mortgage servicing rights | | | - | | | 7,833 | | | - | | | 7,833 | |
Real estate held for sale | | | | | | | | | | | | | |
Residential Loans | | | - | | | - | | | 61 | | | 61 | |
CRE loans | | | - | | | - | | | 385 | | | 385 | |
Total Real Estate held for sale | | | - | | | - | | | 446 | | | 446 | |
14 | ||
| | Fair Value | | Valuation Technique | | Unobservable Inputs | | Range of Inputs | | | Weighted Average | | |
| | (Dollars in Thousands) | | ||||||||||
| | | | | | | | | | | | | |
Trust preferred stock | | $ | 1,890 | | Discounted cash flow | | Constant prepayment rate | | 2-40 | % | | 40 | % |
| | | | | | | Expected asset default | | 0-30 | % | | 15 | % |
| | | | | | | Expected recoveries | | 10-15 | % | | 10 | % |
Impaired Loans- Applies to all loan classes | | $ | 8,443 | | Appraisals | | Discounts for collection issues and changes in market conditions | | 0-10 | % | | 10 | % |
Real estate held for sale Applies to all classes | | $ | 627 | | Appraisals | | Discounts for changes in market conditions | | 0-20 | % | | 20 | % |
| | Fair Value | | Valuation Technique | | Unobservable Inputs | | Range of Inputs | | | Weighted Average | | |
| | (Dollars in Thousands) | | ||||||||||
| | | | | | | | | | | | | |
Trust preferred stock | | $ | 1,474 | | Discounted cash flow | | Constant prepayment rate | | 2-40 | % | | 40 | % |
| | | | | | | Expected asset default | | 0-30 | % | | 15 | % |
| | | | | | | Expected recoveries | | 10-15 | % | | 10 | % |
Impaired Loans- Applies to all loan classes | | $ | 14,071 | | Appraisals | | Discounts for collection issues and changes in market conditions | | 0-10 | % | | 10 | % |
Real estate held for sale Applies to all classes | | $ | 446 | | Appraisals | | Discounts for changes in market conditions | | 0-20 | % | | 20 | % |
15 | ||
16 | ||
| | Carrying | | Fair Value Measurements at September 30, 2013 (In Thousands) | | |||||||||||
| | Value | | Total | | Level 1 | | Level 2 | | Level 3 | | |||||
Financial Assets: | | | | | | | | | | | | | | | | |
Cash and cash equivalents | | $ | 127,629 | | $ | 127,629 | | $ | 127,629 | | $ | - | | $ | - | |
Investment securities | | | 184,526 | | | 184,532 | | | 476 | | | 182,166 | | | 1,890 | |
Federal Home Loan Bank Stock | | | 19,350 | | | N/A | | | N/A | | | N/A | | | N/A | |
Loans, net, including loans held for sale | | | 1,548,706 | | | 1,559,497 | | | - | | | 13,501 | | | 1,545,996 | |
Accrued interest receivable | | | 6,425 | | | 6,425 | | | - | | | 1,163 | | | 5,262 | |
| | | | | | | | | | | | | | | | |
Financial Liabilities: | | | | | | | | | | | | | | | | |
Deposits | | $ | 1,658,492 | | $ | 1,661,109 | | $ | 300,891 | | $ | 1,360,218 | | $ | - | |
Advances from Federal Home Loan Bank | | | 22,761 | | | 23,022 | | | - | | | 23,022 | | | - | |
Securities sold under repurchase agreements | | | 50,822 | | | 50,822 | | | - | | | 50,822 | | | - | |
Subordinated debentures | | | 36,083 | | | 35,333 | | | - | | | - | | | 35,333 | |
17 | ||
| | Carrying | | Fair Value Measurements at December 31, 2012 (In Thousands) | | |||||||||||
| | Value | | Total | | Level 1 | | Level 2 | | Level 3 | | |||||
Financial Assets: | | | | | | | | | | | | | | | | |
Cash and cash equivalents | | $ | 136,832 | | $ | 136,832 | | $ | 136,832 | | $ | - | | $ | - | |
Investment securities | | | 194,609 | | | 194,617 | | | 134 | | | 193,009 | | | 1,474 | |
Federal Home Loan Bank Stock | | | 20,655 | | | N/A | | | N/A | | | N/A | | | N/A | |
Loans, net, including loans held for sale | | | 1,520,610 | | | 1,543,438 | | | - | | | 22,577 | | | 1,520,861 | |
Accrued interest receivable | | | 5,594 | | | 5,594 | | | - | | | 757 | | | 4,837 | |
| | | | | | | | | | | | | | | | |
Financial Liabilities: | | | | | | | | | | | | | | | | |
Deposits | | $ | 1,667,472 | | $ | 1,671,713 | | $ | 315,132 | | $ | 1,356,581 | | $ | - | |
Advances from Federal Home Loan Bank | | | 12,796 | | | 13,466 | | | - | | | 13,466 | | | - | |
Securities sold under repurchase agreements | | | 51,702 | | | 51,702 | | | - | | | 51,702 | | | - | |
Subordinated debentures | | | 36,083 | | | 35,766 | | | - | | | - | | | 35,766 | |
4. | Stock Compensation Plans |
18 | ||
19 | ||
Stock options | | Options Outstanding | | Weighted Average Exercise Price | | Weighted Average Remaining Contractual Term (in years) | | Aggregate Intrinsic Value (in 000’s) | | ||||
Options outstanding, January 1, 2013 | | | 312,350 | | $ | 20.33 | | | | | | | |
Forfeited or cancelled | | | 14,000 | | | 20.66 | | | | | | | |
Exercised | | | 33,580 | | | 17.09 | | | | | | | |
Granted | | | - | | | - | | | | | | | |
Options outstanding, September 30, 2013 | | | 264,770 | | $ | 20.73 | | | 3.47 | | $ | 1,177 | |
Vested or expected to vest at September 30, 2013 | | | 264,770 | | $ | 20.73 | | | 3.47 | | $ | 1,177 | |
Exercisable at September 30, 2013 | | | 251,900 | | $ | 21.30 | | | 3.36 | | $ | 999 | |
| | Restricted Stock Units | | Stock Grants | | ||||||||
| | | | | Weighted-Average | | | | | Weighted-Average | | ||
| | | | | Grant Date | | | | | Grant Date | | ||
Unvested Shares | | Shares | | Fair Value | | Shares | | Fair Value | | ||||
| | | | | | | | | | | | | |
Unvested at January 1, 2013 | | | 38,871 | | $ | 14.74 | | | 11,260 | | $ | 13.28 | |
Granted | | | 91,187 | | | 19.42 | | | 20,639 | | | 15.77 | |
Vested | | | (20,639) | | | 15.77 | | | (31,899) | | | 14.89 | |
Forfeited | | | (3,358) | | | 11.97 | | | - | | | - | |
Unvested at September 30, 2013 | | | 106,061 | | $ | 18.66 | | | - | | $ | - | |
5. | Dividends on Common Stock |
20 | ||
6. | Earnings Per Common Share |
| | Three months ended September 30, | | Nine months ended September 30, | | ||||||||
| | 2013 | | 2012 | | 2013 | | 2012 | | ||||
Numerator for basic and diluted earnings per common share Net income applicable to common shares | | $ | 5,479 | | $ | 5,423 | | $ | 17,148 | | $ | 12,891 | |
Denominator: | | | | | | | | | | | | | |
Denominator for basic earnings per common share weighted average common shares, including participating securities | | | 9,780 | | | 9,729 | | | 9,763 | | | 9,728 | |
Effect of warrants | | | 337 | | | 223 | | | 315 | | | 215 | |
Effect of restricted stock units | | | 38 | | | 20 | | | 29 | | | 25 | |
Effect of employee stock options | | | 57 | | | 28 | | | 53 | | | 25 | |
| | | | | | | | | | | | | |
Denominator for diluted earnings per common share | | | 10,212 | | | 10,000 | | | 10,160 | | | 9,993 | |
Basic earnings per common share | | $ | 0.56 | | $ | 0.56 | | $ | 1.76 | | $ | 1.33 | |
| | | | | | | | | | | | | |
Diluted earnings per common share | | $ | 0.54 | | $ | 0.54 | | $ | 1.69 | | $ | 1.29 | |
21 | ||
7. | Investment Securities |
| | Amortized Cost | | Gross Unrealized Gains | | Gross Unrealized Losses | | Fair Value | | ||||
At September 30, 2013 | | | | | | | | | | | | | |
Available-for-Sale Securities: | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Obligations of U.S. government corporations and agencies | | $ | 5,000 | | $ | - | | $ | (69) | | $ | 4,931 | |
Mortgage-backed securities residential | | | 36,800 | | | 877 | | | (738) | | | 36,939 | |
Collateralized mortgage obligations | | | 52,306 | | | 848 | | | (610) | | | 52,544 | |
Trust preferred securities and preferred stock | | | 3,601 | | | 441 | | | (1,676) | | | 2,366 | |
Corporate bonds | | | 8,839 | | | 138 | | | (9) | | | 8,968 | |
Obligations of state and political subdivisions | | | 76,251 | | | 2,956 | | | (836) | | | 78,371 | |
Totals | | $ | 182,797 | | $ | 5,260 | | $ | (3,938) | | $ | 184,119 | |
| | | | | | | | | | | | | |
Held-to-Maturity Securities*: | | | | | | | | | | | | | |
FHLMC certificates | | $ | 33 | | $ | - | | $ | - | | $ | 33 | |
FNMA certificates | | | 136 | | | 4 | | | - | | | 140 | |
GNMA certificates | | | 52 | | | 2 | | | - | | | 54 | |
Obligations of state and political subdivisions | | | 186 | | | - | | | - | | | 186 | |
Totals | | $ | 407 | | $ | 6 | | $ | - | | $ | 413 | |
At December 31, 2012 | | | | | | | | | | | | | |
Available-for-Sale Securities: | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Obligations of U.S. government corporations and agencies | | $ | 11,000 | | $ | 69 | | $ | - | | $ | 11,069 | |
U.S. treasury bonds | | | 1,000 | | | 2 | | | - | | | 1,002 | |
Mortgage-backed securities residential | | | 30,020 | | | 1,441 | | | - | | | 31,461 | |
Collateralized mortgage obligations | | | 55,962 | | | 1,504 | | | - | | | 57,466 | |
Trust preferred securities and preferred stock | | | 3,600 | | | 99 | | | (2,091) | | | 1,608 | |
Corporate bonds | | | 8,717 | | | 167 | | | - | | | 8,884 | |
Obligations of state and political subdivisions | | | 76,339 | | | 6,277 | | | (5) | | | 82,611 | |
Totals | | $ | 186,638 | | $ | 9,559 | | $ | (2,096) | | $ | 194,101 | |
| | | | | | | | | | | | | |
Held-to-Maturity Securities*: | | | | | | | | | | | | | |
FHLMC certificates | | $ | 69 | | $ | - | | $ | (1) | | $ | 68 | |
FNMA certificates | | | 162 | | | 6 | | | - | | | 168 | |
GNMA certificates | | | 60 | | | 3 | | | - | | | 63 | |
Obligations of state and political subdivisions | | | 217 | | | - | | | - | | | 217 | |
Totals | | $ | 508 | | $ | 9 | | $ | (1) | | $ | 516 | |
22 | ||
| | Available-for-Sale | | Held-to-Maturity | | ||||||||
| | Amortized | | Fair | | Amortized | | Fair | | ||||
| | Cost | | Value | | Cost | | Value | | ||||
| | (In Thousands) | | ||||||||||
Due in one year or less | | $ | 2,255 | | $ | 2,262 | | $ | - | | $ | - | |
Due after one year through five years | | | 6,126 | | | 6,315 | | | 186 | | | 186 | |
Due after five years through ten years | | | 37,483 | | | 38,818 | | | - | | | - | |
Due after ten years | | | 47,827 | | | 47,241 | | | - | | | - | |
MBS/CMO | | | 89,106 | | | 89,483 | | | 221 | | | 227 | |
| | $ | 182,797 | | $ | 184,119 | | $ | 407 | | $ | 413 | |
| | Duration of Unrealized Loss Position | | | | | | | | ||||||||||
| | Less than 12 Months | | 12 Month or Longer | | Total | | ||||||||||||
| | | | | Gross | | | | | Gross | | | | | | | | ||
| | Fair | | Unrealized | | Fair | | Unrealized | | Fair | | Unrealized | | ||||||
| | Value | | Loss | | Value | | Loss | | Value | | Losses | | ||||||
| | (In Thousands) | | ||||||||||||||||
At September 30, 2013 | | | | | | | | | | | | | | | | | | | |
Available-for-sale securities: | | | | | | | | | | | | | | | | | | | |
Obligations of U.S. government corporations and agencies | | $ | 2,931 | | $ | (69) | | $ | - | | $ | - | | $ | 2,931 | | $ | (69) | |
Mortgage-backed - residential | | | 19,456 | | | (738) | | | - | | | - | | | 19,456 | | | (738) | |
Collateralized mortgage obligations | | | 19,948 | | | (610) | | | - | | | - | | | 19,948 | | | (610) | |
Trust preferred stock and preferred stock | | | - | | | - | | | 1,890 | | | (1,676) | | | 1,890 | | | (1,676) | |
Corporate bonds | | | 2,991 | | | (9) | | | - | | | - | | | 2,991 | | | (9) | |
Obligations of state and political subdivisions | | | 16,682 | | | (836) | | | - | | | - | | | 16,682 | | | (836) | |
Total temporarily impaired securities | | $ | 62,008 | | $ | (2,262) | | $ | 1,890 | | $ | (1,676) | | $ | 63,898 | | $ | (3,938) | |
23 | ||
| | Duration of Unrealized Loss Position | | | | | | | | ||||||||||
| | Less than 12 Months | | 12 Months or Longer | | Total | | ||||||||||||
| | | | | Gross | | | | | Gross | | | | | | | | ||
| | Fair | | Unrealized | | Fair | | Unrealized | | Fair | | Unrealized | | ||||||
| | Value | | Loss | | Value | | Loss | | Value | | Loses | | ||||||
| | | (In Thousands) | | |||||||||||||||
At December 31, 2012 | | | | | | | | | | | | | | | | | | | |
Available-for-sale securities: | | | | | | | | | | | | | | | | | | | |
Mortgage-backed securities - residential | | $ | 1 | | $ | - | | $ | - | | $ | - | | $ | 1 | | $ | - | |
Obligations of state and political subdivisions | | | 949 | | | (5) | | | - | | | - | | | 949 | | | (5) | |
Trust preferred stock and preferred stock | | | - | | | - | | | 1,474 | | | (2,091) | | | 1,474 | | | (2,091) | |
Total temporarily impaired securities | | $ | 950 | | $ | (5) | | $ | 1,474 | | $ | (2,091) | | $ | 2,424 | | $ | (2,096) | |
24 | ||
25 | ||
26 | ||
| | | TPREF Funding II | | | Alesco VIII | | | Preferred Term Security XXVII | | | Trapeza CDO I | | | Alesco Preferred Funding VIII | | | Alesco Preferred Funding IX | | | | |
| | | Rated Caa3 | | | Rated Ca | | | Rated C | | | Rated Ca | | | Not Rated | | | Not Rated | | | Total | |
Cumulative OTTI related to credit loss at January 1, 2013 | | $ | 323 | | $ | 1,000 | | $ | 78 | | $ | 857 | | $ | 453 | | $ | 465 | | $ | 3,176 | |
Addition Qtr 1 | | | - | | | - | | | - | | | - | | | - | | | - | | | - | |
Cumulative OTTI related to credit loss at March 31, 2013 | | $ | 323 | | $ | 1,000 | | $ | 78 | | $ | 857 | | $ | 453 | | $ | 465 | | $ | 3,176 | |
Addition Qtr 2 | | | - | | | - | | | - | | | - | | | - | | | - | | | - | |
Cumulative OTTI related to credit loss at June 30, 2013 | | $ | 323 | | $ | 1,000 | | $ | 78 | | $ | 857 | | $ | 453 | | $ | 465 | | $ | 3,176 | |
Addition Qtr 3 | | | - | | | - | | | - | | | - | | | - | | | - | | | - | |
Cumulative OTTI related to credit loss at September 30, 2013 | | $ | 323 | | $ | 1,000 | | $ | 78 | | $ | 857 | | $ | 453 | | $ | 465 | | $ | 3,176 | |
27 | ||
CDO | | Class | | Amortized Cost | | Fair Value | | Unrealized Loss | | OTTI Losses 2013 | | Lowest Rating | | Current Number of Banks and Insurance Companies | | Actual Deferrals and Defaults as a % of Current Collateral | | | Expected Deferrals and Defaults as a % of Remaining Performing Collateral | | | Excess Sub- ordination as a % of Current Performing Collateral | | ||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
TPREF Funding II | | B | | | 673 | | | 271 | | | (402) | | | - | | Caa3 | | 15 | | 43.47 | % | | 15.90 | % | | - | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
I-Preferred Term Sec I | | B-1 | | | 1,000 | | | 686 | | | (314) | | | - | | CCC- | | 14 | | 17.24 | % | | 12.04 | % | | 23.78 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Dekania II CDO | | C-1 | | | 990 | | | 612 | | | (378) | | | - | | CCC | | 31 | | - | % | | 13.29 | % | | 26.51 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Preferred Term Sec XXVII | | C-1 | | | 903 | | | 321 | | | (582) | | | - | | C | | 32 | | 26.15 | % | | 18.83 | % | | 5.99 | % |
Total | | | | $ | 3,566 | | $ | 1,890 | | $ | (1,676) | | $ | - | | | | | | | | | | | | | |
| Three Months Ended | | Nine Months Ended | | ||||||||
| September 30, | | September 30, | | ||||||||
| 2013 | | 2012 | | 2013 | | 2012 | | ||||
| (In thousands) | | (In thousands) | | ||||||||
Proceeds | $ | - | | $ | 2,122 | | $ | 4,027 | | $ | 8,538 | |
Gross realized gains | | - | | | 103 | | | 97 | | | 528 | |
Gross realized losses | | - | | | - | | | - | | | - | |
28 | ||
| | September 30, | | December 31, | | ||
| | 2013 | | 2012 | | ||
Real Estate: | | | | | | | |
Secured by 1-4 family residential | | $ | 191,984 | | $ | 200,826 | |
Secured by multi-family residential | | | 145,704 | | | 122,275 | |
Secured by commercial real estate | | | 675,411 | | | 675,110 | |
Construction | | | 59,567 | | | 37,788 | |
| | | 1,072,666 | | | 1,035,999 | |
Other Loans: | | | | | | | |
Commercial | | | 386,160 | | | 383,817 | |
Home equity and improvement | | | 105,727 | | | 108,718 | |
Consumer Finance | | | 16,659 | | | 15,936 | |
| | | 508,546 | | | 508,471 | |
Total loans | | | 1,581,212 | | | 1,544,470 | |
Deduct: | | | | | | | |
Undisbursed loan funds | | | (19,189) | | | (18,478) | |
Net deferred loan origination fees and costs | | | (744) | | | (735) | |
Allowance for loan loss | | | (25,964) | | | (26,711) | |
Totals | | $ | 1,535,315 | | $ | 1,498,546 | |
Quarter Ended September 30, 2013 | | 1-4 Family Residential Real Estate | | Construction | | Multi- Family Residential Real Estate | | Commercial Real Estate | | Commercial | | Home Equity and Improvement | | Consumer | | Total | | ||||||||
Beginning Allowance | | $ | 3,197 | | $ | 83 | | $ | 2,425 | | $ | 13,140 | | $ | 5,474 | | $ | 1,786 | | $ | 165 | | $ | 26,270 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Charge-Offs | | | (78) | | | - | | | - | | | (829) | | | (39) | | | (170) | | | (33) | | | (1,149) | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Recoveries | | | 23 | | | - | | | - | | | 248 | | | 68 | | | 9 | | | 19 | | | 367 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Provisions | | | (344) | | | 36 | | | 107 | | | 525 | | | 43 | | | 98 | | | 11 | | | 476 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Ending Allowance | | $ | 2,798 | | $ | 119 | | $ | 2,532 | | $ | 13,084 | | $ | 5,546 | | $ | 1,723 | | $ | 162 | | $ | 25,964 | |
Quarter Ended September 30, 2012 | | 1-4 Family Residential Real Estate | | Construction | | Multi- Family Residential Real Estate | | Commercial Real Estate | | Commercial | | Home Equity and Improvement | | Consumer | | Total | | ||||||||
Beginning Allowance | | $ | 3,104 | | $ | 46 | | $ | 2,610 | | $ | 13,914 | | $ | 5,156 | | $ | 1,435 | | $ | 144 | | $ | 26,409 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Charge-Offs | | | (217) | | | - | | | - | | | (780) | | | (355) | | | (203) | | | (19) | | | (1,574) | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Recoveries | | | 26 | | | - | | | 122 | | | 430 | | | 140 | | | 38 | | | 14 | | | 770 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Provisions | | | 83 | | | 17 | | | (261) | | | 225 | | | 162 | | | 471 | | | 8 | | | 705 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Ending Allowance | | $ | 2,996 | | $ | 63 | | $ | 2,471 | | $ | 13,789 | | $ | 5,103 | | $ | 1,741 | | $ | 147 | | $ | 26,310 | |
29 | ||
Year-to-date Ended September 30, 2013 | | 1-4 Family Residential Real Estate | | Construction | | Multi- Family Residential Real Estate | | Commercial Real Estate | | Commercial | | Home Equity and Improvement | | Consumer | | Total | | ||||||||
Beginning Allowance | | $ | 3,506 | | $ | 75 | | $ | 2,197 | | $ | 12,702 | | $ | 6,325 | | $ | 1,759 | | $ | 147 | | $ | 26,711 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Charge-Offs | | | (468) | | | - | | | (6) | | | (1,372) | | | (560) | | | (612) | | | (87) | | | (3,105) | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Recoveries | | | 155 | | | - | | | - | | | 516 | | | 201 | | | 70 | | | 67 | | | 1,009 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Provisions | | | (395) | | | 44 | | | 341 | | | 1,238 | | | (420) | | | 506 | | | 35 | | | 1,349 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Ending Allowance | | $ | 2,798 | | $ | 119 | | $ | 2,532 | | $ | 13,084 | | $ | 5,546 | | $ | 1,723 | | $ | 162 | | $ | 25,964 | |
Year-to-date Ended September 30, 2012 | | 1-4 Family Residential Real Estate | | Construction | | Multi- Family Residential Real Estate | | Commercial Real Estate | | Commercial | | Home Equity and Improvement | | Consumer | | Total | | ||||||||
Beginning Allowance | | $ | 4,095 | | $ | 63 | | $ | 2,850 | | $ | 17,640 | | $ | 6,576 | | $ | 1,856 | | $ | 174 | | $ | 33,254 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Charge-Offs | | | (1,539) | | | - | | | (555) | | | (10,170) | | | (3,507) | | | (668) | | | (74) | | | (16,513) | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Recoveries | | | 150 | | | - | | | 122 | | | 574 | | | 295 | | | 77 | | | 45 | | | 1,263 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Provisions | | | 290 | | | - | | | 54 | | | 5,745 | | | 1,739 | | | 476 | | | 2 | | | 8,306 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Ending Allowance | | $ | 2,996 | | $ | 63 | | $ | 2,471 | | $ | 13,789 | | $ | 5,103 | | $ | 1,741 | | $ | 147 | | $ | 26,310 | |
30 | ||
(In Thousands) | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 1-4 Family | | | | | Multi- Family | | | | | | | | | | | | | | | | | ||
| | Residential | | | | | Residential | | Commercial | | | | | Home Equity | | | | | | | | ||||
| | Real Estate | | Construction | | Real Estate | | Real Estate | | Commercial | | & Improvement | | Consumer | | Total | | ||||||||
Allowance for loan losses: | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Ending allowance balance attributable to loans: | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment | | $ | 234 | | $ | - | | $ | - | | $ | 1,837 | | $ | 305 | | $ | 44 | | $ | - | | $ | 2,420 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Collectively evaluated for impairment | | | 2,564 | | | 119 | | | 2,532 | | | 11,247 | | | 5,241 | | | 1,679 | | | 162 | | | 23,544 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Acquired with deteriorated credit quality | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | | - | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Total ending allowance balance | | $ | 2,798 | | $ | 119 | | $ | 2,532 | | $ | 13,084 | | $ | 5,546 | | $ | 1,723 | | $ | 162 | | $ | 25,964 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Loans: | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Loans individually evaluated for impairment | | $ | 10,514 | | $ | 261 | | $ | 865 | | $ | 40,960 | | $ | 9,729 | | $ | 2,499 | | $ | 71 | | $ | 64,899 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Loans collectively evaluated for impairment | | | 181,870 | | | 40,108 | | | 144,989 | | | 636,481 | | | 377,591 | | | 103,673 | | | 16,574 | | | 1,501,286 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Loans acquired with deteriorated credit quality | | | 31 | | | - | | | - | | | 231 | | | 29 | | | - | | | - | | | 291 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Total ending loans balance | | $ | 192,415 | | $ | 40,369 | | $ | 145,854 | | $ | 677,672 | | $ | 387,349 | | $ | 106,172 | | $ | 16,645 | | $ | 1,566,476 | |
31 | ||
| | 1-4 Family | | | | | Multi- Family | | | | | | | | | | | | | | | | | ||
| | Residential | | | | | Residential | | Commercial | | | | | Home Equity | | | | | | | | ||||
| | Real Estate | | | Construction | | Real Estate | | Real Estate | | Commercial | | & Improvement | | Consumer | | Total | | |||||||
Allowance for loan losses: | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Ending allowance balance attributable to loans: | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment | | $ | 281 | | $ | - | | $ | - | | $ | 1,070 | | $ | 138 | | $ | 2 | | $ | - | | $ | 1,491 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Collectively evaluated for impairment | | | 3,225 | | | 75 | | | 2,197 | | | 11,632 | | | 6,187 | | | 1,757 | | | 147 | | | 25,220 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Acquired with deteriorated credit quality | | | - | | | - | | | - | | | - | | | - | | | - | | | - | | | - | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Total ending allowance balance | | $ | 3,506 | | $ | 75 | | $ | 2,197 | | $ | 12,702 | | $ | 6,325 | | $ | 1,759 | | $ | 147 | | $ | 26,711 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Loans: | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Loans individually evaluated for impairment | | $ | 11,930 | | $ | 45 | | $ | 1,626 | | $ | 46,053 | | $ | 8,830 | | $ | 2,678 | | $ | 124 | | $ | 71,286 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Loans collectively evaluated for impairment | | | 189,348 | | | 19,251 | | | 120,829 | | | 630,534 | | | 376,007 | | | 106,516 | | | 15,815 | | | 1,458,300 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Loans acquired with deteriorated credit quality | | | 36 | | | - | | | - | | | 436 | | | 32 | | | - | | | - | | | 504 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Total ending loans balance | | $ | 201,314 | | $ | 19,296 | | $ | 122,455 | | $ | 677,023 | | $ | 384,869 | | $ | 109,194 | | $ | 15,939 | | $ | 1,530,090 | |
32 | ||
| | Three Months Ended September 30, 2013 | | Nine Months Ended September 30, 2013 | | ||||||||||||||
| | Average Balance | | Interest Income Recognized | | Cash Basis Income Recognized | | Average Balance | | Interest Income Recognized | | Cash Basis Income Recognized | | ||||||
Residential Owner Occupied | | $ | 6,463 | | $ | 88 | | $ | 89 | | $ | 6,705 | | $ | 268 | | $ | 266 | |
Residential Non Owner Occupied | | | 4,261 | | | 42 | | | 43 | | | 4,465 | | | 116 | | | 117 | |
Total Residential Real Estate | | | 10,724 | | | 130 | | | 132 | | | 11,170 | | | 384 | | | 383 | |
Construction | | | 261 | | | 4 | | | 5 | | | 142 | | | 6 | | | 6 | |
Multi-Family | | | 1,078 | | | 9 | | | 9 | | | 1,261 | | | 20 | | | 21 | |
CRE Owner Occupied | | | 14,339 | | | 121 | | | 127 | | | 14,520 | | | 304 | | | 302 | |
CRE Non Owner Occupied | | | 23,254 | | | 237 | | | 264 | | | 23,786 | | | 675 | | | 687 | |
Agriculture Land | | | 674 | | | 4 | | | 2 | | | 800 | | | 21 | | | 13 | |
Other CRE | | | 3,226 | | | 14 | | | 14 | | | 4,297 | | | 28 | | | 24 | |
Total Commercial Real Estate | | | 41,493 | | | 376 | | | 407 | | | 43,403 | | | 1,028 | | | 1,026 | |
Commercial Working Capital | | | 3,058 | | | 13 | | | 14 | | | 2,273 | | | 33 | | | 37 | |
Commercial Other | | | 5,918 | | | 14 | | | 15 | | | 6,449 | | | 64 | | | 58 | |
Total Commercial | | | 8,976 | | | 27 | | | 29 | | | 8,722 | | | 97 | | | 95 | |
Consumer | | | 76 | | | 1 | | | 2 | | | 90 | | | 5 | | | 5 | |
Home Equity and Home Improvement | | | 2,596 | | | 29 | | | 29 | | | 2,684 | | | 95 | | | 91 | |
Total Impaired Loans | | $ | 65,204 | | $ | 576 | | $ | 613 | | $ | 67,472 | | $ | 1,635 | | $ | 1,627 | |
33 | ||
| | Three Months Ended September 30, 2012 | | Nine Months Ended September 30, 2012 | | ||||||||||||||
| | Average Balance | | Interest Income Recognized | | Cash Basis Income Recognized | | Average Balance | | Interest Income Recognized | | Cash Basis Income Recognized | | ||||||
Residential Owner Occupied | | $ | 1,912 | | | 15 | | $ | 14 | | $ | 1,921 | | $ | 45 | | $ | 42 | |
Residential Non Owner Occupied | | | 6,141 | | | 54 | | | 58 | | | 5,397 | | | 126 | | | 129 | |
Total Residential Real Estate | | | 8,053 | | | 69 | | | 72 | | | 7,318 | | | 171 | | | 171 | |
Construction | | | - | | | - | | | - | | | - | | | - | | | - | |
Multi-Family | | | 811 | | | 10 | | | 10 | | | 627 | | | 11 | | | 11 | |
CRE Owner Occupied | | | 12,414 | | | 53 | | | 44 | | | 11,019 | | | 92 | | | 88 | |
CRE Non Owner Occupied | | | 14,881 | | | 104 | | | 161 | | | 15,231 | | | 284 | | | 287 | |
Agriculture Land | | | 773 | | | 6 | | | 1 | | | 1,107 | | | 20 | | | 15 | |
Other CRE | | | 5,987 | | | 1 | | | 1 | | | 7,015 | | | 4 | | | 4 | |
Total Commercial Real Estate | | | 34,055 | | | 164 | | | 207 | | | 34,372 | | | 400 | | | 394 | |
Commercial Working Capital | | | 2,048 | | | 9 | | | 11 | | | 2,005 | | | 13 | | | 15 | |
Commercial Other | | | 4,188 | | | 25 | | | 26 | | | 4,538 | | | 40 | | | 42 | |
Total Commercial | | | 6,236 | | | 34 | | | 37 | | | 6,543 | | | 53 | | | 57 | |
Consumer | | | - | | | - | | | - | | | - | | | - | | | - | |
Home Equity and Home Improvement | | | 36 | | | - | | | - | | | 37 | | | 2 | | | 2 | |
Total Impaired Loans | | $ | 49,191 | | $ | 277 | | $ | 326 | | $ | 48,897 | | $ | 637 | | $ | 635 | |
34 | ||
| | Unpaid Principal Balance | | Recorded Investment | | Allowance for Loan Losses Allocated | | |||
With no allowance recorded: | | | | | | | | | | |
Residential Owner Occupied | | $ | 4,902 | | $ | 4,862 | | $ | - | |
Residential Non Owner Occupied | | | 3,539 | | | 2,806 | | | - | |
Total Residential Real Estate | | | 8,441 | | | 7,668 | | | - | |
Construction | | | 300 | | | 261 | | | - | |
Multi-Family Residential Real Estate | | | 1,014 | | | 865 | | | - | |
CRE Owner Occupied | | | 10,313 | | | 8,552 | | | - | |
CRE Non Owner Occupied | | | 5,364 | | | 4,577 | | | - | |
Agriculture Land | | | 689 | | | 504 | | | - | |
Other CRE | | | 4,948 | | | 3,063 | | | - | |
Total Commercial Real Estate | | | 21,314 | | | 16,696 | | | - | |
Commercial Working Capital | | | 3,835 | | | 3,837 | | | - | |
Commercial Other | | | 4,846 | | | 4,797 | | | - | |
Total Commercial | | | 8,681 | | | 8,634 | | | - | |
Consumer | | | 71 | | | 71 | | | - | |
Home Equity and Home Improvement | | | 2,135 | | | 2,058 | | | - | |
Total loans with no allowance recorded | | $ | 41,956 | | $ | 36,253 | | $ | - | |
| | | | | | | | | | |
With an allowance recorded: | | | | | | | | | | |
Residential Owner Occupied | | $ | 1,534 | | $ | 1,539 | | $ | 211 | |
Residential Non Owner Occupied | | | 1,305 | | | 1,307 | | | 23 | |
Total Residential Real Estate | | | 2,839 | | | 2,846 | | | 234 | |
Construction | | | - | | | - | | | - | |
Multi-Family Residential Real Estate | | | - | | | - | | | - | |
CRE Owner Occupied | | | 7,651 | | | 6,500 | | | 281 | |
CRE Non Owner Occupied | | | 17,905 | | | 17,451 | | | 1,546 | |
Agriculture Land | | | 251 | | | 258 | | | 8 | |
Other CRE | | | 83 | | | 55 | | | 2 | |
Total Commercial Real Estate | | | 25,890 | | | 24,264 | | | 1,837 | |
Commercial Working Capital | | | - | | | - | | | - | |
Commercial Other | | | 1,094 | | | 1,095 | | | 305 | |
Total Commercial | | | 1,094 | | | 1,095 | | | 305 | |
Consumer | | | - | | | - | | | - | |
Home Equity and Home Improvement | | | 439 | | | 441 | | | 44 | |
Total loans with an allowance recorded | | $ | 30,262 | | $ | 28,646 | | $ | 2,420 | |
35 | ||
| | Unpaid Principal Balance | | Recorded Investment | | Allowance for Loan Losses Allocated | | |||
With no allowance recorded: | | | | | | | | | | |
Residential Owner Occupied | | $ | 5,427 | | $ | 5,357 | | $ | - | |
Residential Non Owner Occupied | | | 4,211 | | | 3,420 | | | - | |
Total Residential Real Estate | | | 9,638 | | | 8,777 | | | - | |
Construction | | | 300 | | | 45 | | | - | |
Multi-Family Residential Real Estate | | | 1,775 | | | 1,626 | | | - | |
CRE Owner Occupied | | | 12,314 | | | 9,782 | | | - | |
CRE Non Owner Occupied | | | 11,054 | | | 9,105 | | | - | |
Agriculture Land | | | 1,176 | | | 993 | | | - | |
Other CRE | | | 8,741 | | | 5,527 | | | - | |
Total Commercial Real Estate | | | 33,285 | | | 25,407 | | | - | |
Commercial Working Capital | | | 1,565 | | | 1,565 | | | - | |
Commercial Other | | | 6,367 | | | 5,338 | | | - | |
Total Commercial | | | 7,932 | | | 6,903 | | | - | |
Consumer | | | 125 | | | 124 | | | - | |
Home Equity and Home Improvement | | | 2,777 | | | 2,642 | | | - | |
Total loans with no allowance recorded | | $ | 55,832 | | $ | 45,524 | | $ | - | |
| | | | | | | | | | |
With an allowance recorded: | | | | | | | | | | |
Residential Owner Occupied | | $ | 1,697 | | $ | 1,701 | | $ | 257 | |
Residential Non Owner Occupied | | | 1,449 | | | 1,452 | | | 24 | |
Total Residential Real Estate | | | 3,146 | | | 3,153 | | | 281 | |
Construction | | | - | | | - | | | - | |
Multi-Family Residential Real Estate | | | - | | | - | | | - | |
CRE Owner Occupied | | | 5,735 | | | 5,118 | | | 245 | |
CRE Non Owner Occupied | | | 15,301 | | | 15,357 | | | 820 | |
Agriculture Land | | | 111 | | | 112 | | | 3 | |
Other CRE | | | 88 | | | 59 | | | 2 | |
Total Commercial Real Estate | | | 21,235 | | | 20,646 | | | 1,070 | |
Commercial Working Capital | | | 300 | | | 301 | | | 10 | |
Commercial Other | | | 1,623 | | | 1,626 | | | 128 | |
Total Commercial | | | 1,923 | | | 1,927 | | | 138 | |
Consumer | | | - | | | - | | | - | |
Home Equity and Home Improvement | | | 36 | | | 36 | | | 2 | |
Total loans with an allowance recorded | | $ | 26,340 | | $ | 25,762 | | $ | 1,491 | |
36 | ||
| | September 30, 2013 | | December 31, 2012 | | ||
| | (in thousands) | | ||||
Non-accrual loans | | $ | 30,512 | | $ | 32,570 | |
Loans over 90 days past due and still accruing | | | - | | | - | |
Total non-performing loans | | | 30,512 | | | 32,570 | |
Real estate and other assets held for sale | | | 5,518 | | | 3,805 | |
Total non-performing assets | | $ | 36,030 | | $ | 36,375 | |
| | Current | | 30-59 days | | 60-89 days | | 90+ days | | Total Past Due | | Total Non Accrual | | ||||||
Residential Owner Occupied | | $ | 122,038 | | $ | 593 | | $ | 203 | | $ | 956 | | $ | 1,752 | | $ | 1,117 | |
Residential Non Owner Occupied | | | 67,361 | | | 500 | | | 135 | | | 629 | | | 1,264 | | | 2,040 | |
| | | | | | | | | | | | | | | | | | | |
Total residential real estate | | | 189,399 | | | 1,093 | | | 338 | | | 1,585 | | | 3,016 | | | 3,157 | |
| | | | | | | | | | | | | | | | | | | |
Construction | | | 40,369 | | | - | | | - | | | - | | | - | | | - | |
Multi-Family | | | 145,854 | | | - | | | - | | | - | | | - | | | 613 | |
CRE Owner Occupied | | | 318,420 | | | 489 | | | 631 | | | 1,728 | | | 2,848 | | | 8,416 | |
CRE Non Owner Occupied | | | 227,935 | | | 1,348 | | | 224 | | | 1,286 | | | 2,858 | | | 5,621 | |
Agriculture Land | | | 78,134 | | | 23 | | | 134 | | | 76 | | | 233 | | | 682 | |
Other Commercial Real Estate | | | 45,403 | | | 337 | | | - | | | 1,504 | | | 1,841 | | | 3,094 | |
| | | | | | | | | | | | | | | | | | | |
Total Commercial Real Estate | | | 669,892 | | | 2,197 | | | 989 | | | 4,594 | | | 7,780 | | | 17,813 | |
| | | | | | | | | | | | | | | | | | | |
Commercial Working Capital | | | 156,532 | | | 349 | | | - | | | 433 | | | 782 | | | 3,188 | |
Commercial Other | | | 225,129 | | | 989 | | | 1,032 | | | 2,885 | | | 4,906 | | | 5,567 | |
| | | | | | | | | | | | | | | | | | | |
Total Commercial | | | 381,661 | | | 1,338 | | | 1,032 | | | 3,318 | | | 5,688 | | | 8,755 | |
Consumer | | | 16,602 | | | 31 | | | 12 | | | - | | | 43 | | | - | |
Home Equity / Home Improvement | | | 104,430 | | | 1,416 | | | 149 | | | 177 | | | 1,742 | | | 178 | |
| | | | | | | | | | | | | | | | | | | |
Total Loans | | $ | 1,548,207 | | $ | 6,075 | | $ | 2,520 | | $ | 9,674 | | $ | 18,269 | | $ | 30,516 | |
37 | ||
| | Current | | 30-59 days | | | 60-89 days | | | 90+ days | | | Total Past Due | | | Total Non Accrual | | ||
Residential Owner Occupied | | $ | 125,362 | | $ | 1,238 | | $ | 604 | | $ | 945 | | $ | 2,787 | | $ | 1,125 | |
Residential Non Owner Occupied | | | 71,777 | | | 413 | | | 126 | | | 849 | | | 1,388 | | | 2,473 | |
Total residential real estate | | | 197,139 | | | 1,651 | | | 730 | | | 1,794 | | | 4,175 | | | 3,598 | |
| | | | | | | | | | | | | | | | | | | |
Construction | | | 19,296 | | | - | | | - | | | - | | | - | | | - | |
Multi-Family | | | 122,455 | | | - | | | - | | | - | | | - | | | 1,178 | |
CRE Owner Occupied | | | 321,071 | | | 1,248 | | | 382 | | | 1,622 | | | 3,252 | | | 9,652 | |
CRE Non Owner Occupied | | | 235,592 | | | 134 | | | 1,321 | | | 2,480 | | | 3,935 | | | 6,674 | |
Agriculture Land | | | 72,092 | | | 84 | | | 31 | | | - | | | 115 | | | 813 | |
Other Commercial Real Estate | | | 36,510 | | | 21 | | | 875 | | | 3,560 | | | 4,456 | | | 4,761 | |
Total Commercial Real Estate | | | 665,265 | | | 1,487 | | | 2,609 | | | 7,662 | | | 11,758 | | | 21,900 | |
Commercial Working Capital | | | 161,110 | | | - | | | 155 | | | 1,204 | | | 1,359 | | | 1,528 | |
Commercial Other | | | 218,477 | | | 584 | | | 1,201 | | | 2,138 | | | 3,923 | | | 4,136 | |
Total Commercial | | | 379,587 | | | 584 | | | 1,356 | | | 3,342 | | | 5,282 | | | 5,664 | |
Consumer | | | 15,702 | | | 229 | | | 8 | | | - | | | 237 | | | - | |
Home Equity / Home Improvement | | | 106,458 | | | 2,294 | | | 225 | | | 217 | | | 2,736 | | | 217 | |
| | | | | | | | | | | | | | | | | | | |
Total Loans | | $ | 1,505,902 | | $ | 6,245 | | $ | 4,928 | | $ | 13,015 | | $ | 24,188 | | $ | 32,557 | |
38 | ||
| | Loans Modified as a TDR for the Three Months Ended September 30, 2013 ($ in thousands) | | Loans Modified as a TDR for the Nine Months Ended September 30, 2013 ($ in thousands) | | ||||||
Troubled Debt Restructurings | | Number of Loans | | | Recorded Investment (as of period end) | | Number of Loans | | | Recorded Investment (as of period end) | |
| | | | | | | | | | | |
Residential Owner Occupied | | 0 | | $ | - | | 8 | | $ | 746 | |
| | | | | | | | | | | |
Residential Non Owner Occupied | | 5 | | | 206 | | 6 | | | 393 | |
| | | | | | | | | | | |
CRE Owner Occupied | | 1 | | | 47 | | 5 | | | 802 | |
| | | | | | | | | | | |
CRE Non Owner Occupied | | 0 | | | - | | 1 | | | 1,361 | |
| | | | | | | | | | | |
Agriculture Land | | 0 | | | - | | 1 | | | 214 | |
| | | | | | | | | | | |
Other CRE | | 0 | | | - | | 1 | | | 31 | |
| | | | | | | | | | | |
Commercial / Industrial | | 5 | | | 941 | | 6 | | | 988 | |
| | | | | | | | | | | |
Home Equity / Improvement | | 4 | | | 66 | | 13 | | | 536 | |
| | | | | | | | | | | |
Consumer | | 0 | | | - | | 2 | | | 13 | |
| | | | | | | | | | | |
Total | | 15 | | $ | 1,260 | | 43 | | $ | 5,084 | |
| | | Loans Modified as a TDR for the Three Months Ended September 30, 2012 ($ in thousands) | | | Loans Modified as a TDR for the Nine Months Ended September 30, 2012 ($ in thousands) | | ||||||
Troubled Debt Restructurings | | | Number of Loans | | Recorded Investment (as of period end) | | | Number of Loans | | | Recorded Investment (as of period end) | | |
| | | | | | | | | | | | | |
Residential Owner Occupied | | | 2 | | $ | 221 | | | 7 | | $ | 778 | |
| | | | | | | | | | | | | |
Residential Non Owner Occupied | | | 1 | | | 34 | | | 2 | | | 116 | |
| | | | | | | | | | | | | |
CRE Owner Occupied | | | 3 | | | 565 | | | 5 | | | 1,461 | |
| | | | | | | | | | | | | |
CRE Non Owner Occupied | | | 1 | | | 217 | | | 1 | | | 217 | |
| | | | | | | | | | | | | |
Agriculture Land | | | 1 | | | 127 | | | 2 | | | 439 | |
| | | | | | | | | | | | | |
Other CRE | | | 0 | | | - | | | 1 | | | 61 | |
| | | | | | | | | | | | | |
Commercial / Industrial | | | 2 | | | 34 | | | 2 | | | 34 | |
| | | | | | | | | | | | | |
Home Equity / Improvement | | | 0 | | | - | | | 0 | | | - | |
| | | | | | | | | | | | | |
Consumer | | | 0 | | | - | | | 0 | | | - | |
| | | | | | | | | | | | | |
Total | | | 10 | | $ | 1,198 | | | 20 | | $ | 3,106 | |
39 | ||
| | Three Months Ended September 30, 2013 ($ in thousands) | | Nine Months Ended September 30, 2013 ($ in thousands) | | ||||||||
Troubled Debt Restructurings That Subsequently Defaulted | | Number of Loans | | Recorded Investment (as of period end) | | | Number of Loans | | Recorded Investment (as of period end) | | |||
| | | | | | | | | | | | | |
Residential Owner Occupied | | | 4 | | $ | 339 | | | 5 | | $ | 432 | |
| | | | | | | | | | | | | |
Residential Non Owner Occupied | | | 1 | | | 78 | | | 1 | | | 78 | |
| | | | | | | | | | | | | |
CRE Owner Occupied | | | 0 | | | - | | | 0 | | | - | |
| | | | | | | | | | | | | |
CRE Non Owner Occupied | | | 0 | | | - | | | 1 | | | 212 | |
| | | | | | | | | | | | | |
Agriculture Land | | | 0 | | | - | | | 0 | | | - | |
| | | | | | | | | | | | | |
Other CRE | | | 0 | | | - | | | 0 | | | - | |
| | | | | | | | | | | | | |
Commercial / Industrial | | | 2 | | | 178 | | | 2 | | | 178 | |
| | | | | | | | | | | | | |
Home Equity / Improvement | | | 2 | | | 38 | | | 2 | | | 38 | |
| | | | | | | | | | | | | |
Consumer | | | 0 | | | - | | | 0 | | | - | |
| | | | | | | | | | | | | |
Total | | | 9 | | $ | 633 | | | 11 | | $ | 938 | |
| | Three Months Ended September 30, 2012 ($ in thousands) | | Nine Months Ended September 30, 2012 ($ in thousands) | | ||||||
Troubled Debt Restructurings That Subsequently Defaulted | | Number of Loans | | | Recorded Investment (as of period end) | | Number of Loans | | | Recorded Investment (as of period end) | |
| | | | | | | | | | | |
Residential Owner Occupied | | 0 | | $ | - | | 0 | | $ | - | |
| | | | | | | | | | | |
Residential Non Owner Occupied | | 1 | | | 24 | | 1 | | | 24 | |
| | | | | | | | | | | |
CRE Owner Occupied | | 0 | | | - | | 0 | | | - | |
| | | | | | | | | | | |
CRE Non Owner Occupied | | 2 | | | 351 | | 2 | | | 351 | |
| | | | | | | | | | | |
Agriculture Land | | 0 | | | - | | 0 | | | - | |
| | | | | | | | | | | |
Other CRE | | 0 | | | - | | 0 | | | - | |
| | | | | | | | | | | |
Commercial / Industrial | | 1 | | | 771 | | 2 | | | 1,351 | |
| | | | | | | | | | | |
Home Equity / Improvement | | 0 | | | - | | 0 | | | - | |
| | | | | | | | | | | |
Consumer | | 0 | | | - | | 0 | | | - | |
| | | | | | | | | | | |
Total | | 4 | | $ | 1,146 | | 5 | | $ | 1,726 | |
40 | ||
41 | ||
Category | | Pass | | Special Mention | | Substandard | | Doubtful | | Not Graded | | Total | | ||||||
| | | | | | | | | | | | | | | | | | | |
Residential Owner Occupied | | $ | 4,135 | | $ | 21 | | $ | 2,867 | | $ | - | | $ | 116,765 | | $ | 123,788 | |
Residential Non Owner Occupied | | | 53,120 | | | 3,233 | | | 6,030 | | | - | | | 6,244 | | | 68,627 | |
Total residential real estate | | | 57,255 | | | 3,254 | | | 8,897 | | | - | | | 123,009 | | | 192,415 | |
| | | | | | | | | | | | | | | | | | | |
Construction | | | 30,865 | | | - | | | 261 | | | - | | | 9,243 | | | 40,369 | |
| | | | | | | | | | | | | | | | | | | |
Multi Family | | | 142,044 | | | 654 | | | 2,177 | | | - | | | 979 | | | 145,854 | |
| | | | | | | | | | | | | | | | | | | |
CRE Owner Occupied | | | 291,586 | | | 14,988 | | | 12,808 | | | - | | | 1,886 | | | 321,268 | |
| | | | | | | | | | | | | | | | | | | |
CRE Non Owner Occupied | | | 201,459 | | | 12,571 | | | 16,642 | | | - | | | 121 | | | 230,793 | |
| | | | | | | | | | | | | | | | | | | |
Agriculture Land | | | 76,373 | | | 770 | | | 1,224 | | | - | | | - | | | 78,367 | |
| | | | | | | | | | | | | | | | | | | |
Other CRE | | | 40,935 | | | 1,694 | | | 3,856 | | | - | | | 759 | | | 47,244 | |
Total Commercial Real Estate | | | 610,353 | | | 30,023 | | | 34,530 | | | - | | | 2,766 | | | 677,672 | |
| | | | | | | | | | | | | | | | | | | |
Commercial Working Capital | | | 148,492 | | | 4,389 | | | 4,431 | | | - | | | - | | | 157,312 | |
| | | | | | | | | | | | | | | | | | | |
Commercial Other | | | 215,749 | | | 6,863 | | | 7,425 | | | - | | | - | | | 230,037 | |
Total Commercial | | | 364,241 | | | 11,252 | | | 11,856 | | | - | | | - | | | 387,349 | |
| | | | | | | | | | | | | | | | | | | |
Consumer | | | - | | | - | | | 19 | | | - | | | 16,626 | | | 16,645 | |
| | | | | | | | | | | | | | | | | | | |
Home Equity/Improvement | | | - | | | - | | | 857 | | | 9 | | | 105,306 | | | 106,172 | |
| | | | | | | | | | | | | | | | | | | |
Total | | $ | 1,204,758 | | $ | 45,183 | | $ | 58,597 | | $ | 9 | | $ | 257,929 | | $ | 1,566,476 | |
42 | ||
Category | | Pass | | Special Mention | | Substandard | | Doubtful | | Not Graded | | Total | | ||||||
| | | | | | | | | | | | | | | | | | | |
Residential Owner Occupied | | $ | 4,221 | | $ | 75 | | $ | 3,617 | | $ | 234 | | $ | 120,002 | | $ | 128,149 | |
Residential Non Owner Occupied | | | 55,771 | | | 2,453 | | | 8,248 | | | - | | | 6,693 | | | 73,165 | |
Total residential real estate | | | 59,992 | | | 2,528 | | | 11,865 | | | 234 | | | 126,695 | | | 201,314 | |
Construction | | | 11,360 | | | - | | | 45 | | | - | | | 7,891 | | | 19,296 | |
Multi Family | | | 118,121 | | | 910 | | | 2,404 | | | - | | | 1,020 | | | 122,455 | |
CRE Owner Occupied | | | 292,765 | | | 10,440 | | | 18,740 | | | - | | | 2,378 | | | 324,323 | |
CRE Non Owner Occupied | | | 207,745 | | | 9,077 | | | 22,615 | | | - | | | 90 | | | 239,527 | |
Agriculture Land | | | 69,924 | | | 769 | | | 1,514 | | | - | | | - | | | 72,207 | |
Other CRE | | | 31,875 | | | 891 | | | 7,222 | | | - | | | 978 | | | 40,966 | |
Total Commercial Real Estate | | | 602,309 | | | 21,177 | | | 50,091 | | | - | | | 3,446 | | | 677,023 | |
Commercial Working Capital | | | 156,433 | | | 3,587 | | | 2,449 | | | - | | | - | | | 162,469 | |
Commercial Other | | | 208,783 | | | 5,204 | | | 8,413 | | | - | | | - | | | 222,400 | |
Total Commercial | | | 365,216 | | | 8,791 | | | 10,862 | | | - | | | - | | | 384,869 | |
Consumer | | | - | | | - | | | 70 | | | - | | | 15,869 | | | 15,939 | |
Home Equity/Improvement | | | - | | | - | | | 668 | | | 64 | | | 108,462 | | | 109,194 | |
| | | | | | | | | | | | | | | | | | | |
Total | | $ | 1,156,998 | | $ | 33,406 | | $ | 76,005 | | $ | 298 | | $ | 263,383 | | $ | 1,530,090 | |
| | Three Months Ended September 30, | | Nine Months Ended September 30, | | ||||||||
| | 2013 | | 2012 | | 2013 | | 2012 | | ||||
| | (in thousands) | | (in thousands) | | ||||||||
Gain from sale of mortgage loans | | $ | 894 | | $ | 2,888 | | $ | 4,960 | | $ | 7,890 | |
Mortgage loans servicing revenue (expense): | | | | | | | | | | | | | |
Mortgage loans servicing revenue | | | 901 | | | 824 | | | 2,646 | | | 2,499 | |
Amortization of mortgage servicing rights | | | (429) | | | (892) | | | (1,752) | | | (2,610) | |
Mortgage servicing rights valuation adjustments | | | 480 | | | (600) | | | 1,265 | | | (855) | |
| | | 952 | | | (668) | | | 2,159 | | | (966) | |
| | | | | | | | | | | | | |
Net revenue from sale and servicing of mortgage loans | | $ | 1,846 | | $ | 2,220 | | $ | 7,119 | | $ | 6,924 | |
43 | ||
| | Three Months Ended September 30, | | | Nine Months Ended September 30, | | ||||||||
| | 2013 | | 2012 | | | 2013 | | 2012 | | ||||
| | (in thousands) | | | (in thousands) | | ||||||||
Mortgage servicing assets: | | | | | | | | | | | | | | |
Balance at beginning of period | | $ | 10,234 | | $ | 10,059 | | | $ | 10,121 | | $ | 10,219 | |
Loans sold, servicing retained | | | 400 | | | 969 | | | | 1,836 | | | 2,527 | |
Amortization | | | (429) | | | (892) | | | | (1,752) | | | (2,610) | |
Carrying value before valuation allowance at end of period | | | 10,205 | | | 10,136 | | | | 10,205 | | | 10,136 | |
| | | | | | | | | | | | | | |
Valuation allowance: | | | | | | | | | | | | | | |
Balance at beginning of period | | | (1,503) | | | (1,784) | | | | (2,288) | | | (1,529) | |
Impairment recovery (charges) | | | 480 | | | (600) | | | | 1,265 | | | (855) | |
Balance at end of period | | | (1,023) | | | (2,384) | | | | (1,023) | | | (2,384) | |
Net carrying value of MSRs at end of period | | $ | 9,182 | | $ | 7,752 | | | $ | 9,182 | | $ | 7,752 | |
Fair value of MSRs at end of period | | $ | 9,868 | | $ | 7,752 | | | $ | 9,868 | | $ | 7,752 | |
44 | ||
| | September 30, 2013 | | December 31, 2012 | | ||
Non-interest-bearing checking accounts | | $ | 300,891 | | $ | 315,132 | |
Interest-bearing checking and money market accounts | | | 681,987 | | | 664,857 | |
Savings accounts | | | 182,271 | | | 166,945 | |
Retail certificates of deposit less than $100,000 | | | 318,317 | | | 342,472 | |
Retail certificates of deposit greater than $100,000 | | | 175,026 | | | 176,029 | |
Brokered or national certificates of deposit | | | - | | | 2,037 | |
Total | | $ | 1,658,492 | | $ | 1,667,472 | |
| | September 30, 2013 | | December 31, 2012 | | ||
| | (in thousands) | | ||||
FHLB Advances: | | | | | | | |
Putable advances | | | 12,000 | | | 12,000 | |
Amortizable mortgage advances | | | 10,761 | | | 796 | |
Total | | $ | 22,761 | | $ | 12,796 | |
| | | | | | | |
Junior subordinated debentures owed to unconsolidated subsidiary trusts | | $ | 36,083 | | $ | 36,083 | |
45 | ||
46 | ||
| | September 30, 2013 | | December 31, 2012 | | ||||||||
| | Fixed Rate | | Variable Rate | | Fixed Rate | | Variable Rate | | ||||
Commitments to make loans | | $ | 41,090 | | $ | 46,655 | | $ | 50,205 | | $ | 48,035 | |
Unused lines of credit | | | 19,227 | | | 262,028 | | | 21,975 | | | 228,269 | |
Standby letters of credit | | | - | | | 16,652 | | | - | | | 18,166 | |
Total | | $ | 60,317 | | $ | 325,335 | | $ | 72,180 | | $ | 294,470 | |
| | September 30, 2013 | | December 31, 2012 | | ||||||||||||||
| | Assets | | (Liabilities) | | Derivative | | Assets | | (Liabilities) | | Derivative | | ||||||
| | Carrying | | Carrying | | Net Carrying | | Carrying | | Carrying | | Net Carrying | | ||||||
| | Value | | Value | | Value | | Value | | Value | | Value | | ||||||
| | (In Thousands) | | ||||||||||||||||
Derivatives not designated as hedging instruments | | | | | | | | | | | | | | | | | | | |
Mortgage Banking Derivatives | | $ | 548 | | $ | (247) | | $ | 301 | | $ | 950 | | $ | (94) | | $ | 856 | |
47 | ||
| | Three Months Ended September 30, | | Nine Months Ended September 30, | | ||||||||
| | 2013 | | 2012 | | 2013 | | 2012 | | ||||
| | (In Thousands) | | (In Thousands) | | ||||||||
Derivatives not designated as hedging instruments | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Mortgage Banking Derivatives Gain (Loss) | | $ | (315) | | $ | 28 | | $ | (555) | | $ | 418 | |
| | Before Tax Amount | | Tax Expense (Benefit) | | Net of Tax Amount | | |||
| | (In Thousands) | | |||||||
Three months ended September 30, 2013: | | | | | | | | | | |
Securities available for sale and transferred securities: | | | | | | | | | | |
Change in net unrealized gain/loss during the period | | $ | 120 | | $ | 42 | | $ | 78 | |
Reclassification adjustment for net gains included in net income | | | - | | | - | | | - | |
Total other comprehensive income (loss) | | $ | 120 | | $ | 42 | | $ | 78 | |
| | Before Tax Amount | | Tax Expense (Benefit) | | Net of Tax Amount | | |||
| | (In Thousands) | | |||||||
Nine months ended September 30, 2013: | | | | | | | | | | |
Securities available for sale and transferred securities: | | | | | | | | | | |
Change in net unrealized gain/loss during the period | | $ | (6,044) | | $ | (2,120) | | $ | (3,924) | |
Reclassification adjustment for net gains included in net income | | | (97) | | | (29) | | | (68) | |
Total other comprehensive income (loss) | | $ | (6,141) | | $ | (2,149) | | $ | (3,992) | |
| | Before Tax Amount | | Tax Expense (Benefit) | | Net of Tax Amount | | |||
| | (In Thousands) | | |||||||
Three months ended September 30, 2012: | | | | | | | | | | |
Securities available for sale and transferred securities: | | | | | | | | | | |
Change in net unrealized gain/loss during the period | | $ | 1,953 | | $ | 678 | | $ | 1,275 | |
Reclassification adjustment for net gains included in net income | | | (103) | | | (31) | | | (72) | |
Total other comprehensive income (loss) | | $ | 1,850 | | $ | 647 | | $ | 1,203 | |
| | Before Tax Amount | | Tax Expense (Benefit) | | Net of Tax Amount | | |||
| | (In Thousands) | | |||||||
Nine months ended September 30, 2012: | | | | | | | | | | |
Securities available for sale and transferred securities: | | | | | | | | | | |
Change in net unrealized gain/loss during the period | | $ | 3,397 | | $ | 1,161 | | $ | 2,236 | |
Reclassification adjustment for net gains included in net income | | | (528) | | | (158) | | | (370) | |
Total other comprehensive income (loss) | | $ | 2,869 | | $ | 1,003 | | $ | 1,866 | |
48 | ||
| | | | | | | | Accumulated | | |
| | Securities | | Post- | | Other | | |||
| | Available | | retirement | | Comprehensive | | |||
| | For Sale | | Benefit | | Income | | |||
| | (In Thousands) | | |||||||
Balance January 1, 2013 | | $ | 4,851 | | $ | (577) | | $ | 4,274 | |
Other comprehensive loss before reclassifications | | | (3,924) | | | - | | | (3,924) | |
Amounts reclassified from accumulated other comprehensive loss | | | (68) | | | - | | | (68) | |
| | | | | | | | | | |
Net other comprehensive loss during period | | | (3,992) | | | - | | | (3,992) | |
| | | | | | | | | | |
Balance September 30, 2013 | | $ | 859 | | $ | (577) | | $ | 282 | |
| | | | | | | | | | |
Balance January 1, 2012 | | $ | 4,704 | | $ | (707) | | $ | 3,997 | |
Other comprehensive loss before reclassifications | | | 2,236 | | | - | | | 2,236 | |
Amounts reclassified from accumulated other comprehensive loss | | | (370) | | | - | | | (370) | |
| | | | | | | | | | |
Net other comprehensive loss during period | | | 1,866 | | | - | | | 1,866 | |
| | | | | | | | | | |
Balance September 30, 2012 | | $ | 6,570 | | $ | (707) | | $ | 5,863 | |
49 | ||
50 | ||
51 | ||
52 | ||
53 | ||
54 | ||
55 | ||
56 | ||
57 | ||
| | Three Months Ended September 30, | | |||||||||||||||||
| | 2013 | | 2012 | | |||||||||||||||
| | Average | | | | | Yield/ | | | Average | | | | | Yield/ | | ||||
| | Balance | | Interest (1) | | Rate (2) | | | Balance | | Interest (1) | | Rate (2) | | ||||||
Interest-earning assets: | | | | | | | | | | | | | | | | | | | | |
Loans receivable | | $ | 1,548,718 | | $ | 17,214 | | | 4.41 | % | | $ | 1,481,995 | | $ | 18,024 | | | 4.84 | % |
Securities | | | 184,413 | | | 1,779 | | | 3.83 | | | | 274,327 | | | 2,245 | | | 3.37 | |
Interest bearing deposits | | | 64,142 | | | 44 | | | 0.27 | | | | 72,738 | | | 43 | | | 0.24 | |
FHLB stock | | | 19,353 | | | 205 | | | 4.20 | | | | 20,655 | | | 213 | | | 4.10 | |
Total interest-earning assets | | | 1,816,626 | | | 19,242 | | | 4.20 | | | | 1,849,715 | | | 20,525 | | | 4.44 | |
Non-interest-earning assets | | | 209,651 | | | | | | | | | | 197,424 | | | | | | | |
Total assets | | $ | 2,026,277 | | | | | | | | | $ | 2,047,139 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Interest-bearing liabilities: | | | | | | | | | | | | | | | | | | | | |
Deposits | | $ | 1,330,467 | | $ | 1,356 | | | 0.40 | % | | $ | 1,339,333 | | $ | 1,909 | | | 0.57 | % |
FHLB advances | | | 21,003 | | | 116 | | | 2.19 | | | | 81,812 | | | 759 | | | 3.69 | |
Subordinated debentures | | | 36,130 | | | 150 | | | 1.65 | | | | 36,141 | | | 172 | | | 1.89 | |
Notes payable | | | 52,005 | | | 58 | | | 0.44 | | | | 50,610 | | | 83 | | | 0.65 | |
Total interest-bearing liabilities | | | 1,439,605 | | | 1,680 | | | 0.46 | | | | 1,507,896 | | | 2,923 | | | 0.77 | |
Non-interest bearing deposits | | | 302,245 | | | - | | | | | | | 266,416 | | | - | | | | |
Total including non-interest bearing demand deposits | | | 1,741,850 | | | 1,680 | | | 0.38 | | | | 1,774,312 | | | 2,923 | | | 0.66 | |
Other non-interest-bearing liabilities | | | 18,939 | | | | | | | | | | 21,235 | | | | | | | |
Total liabilities | | | 1,760,789 | | | | | | | | | | 1,795,547 | | | | | | | |
Stockholders' equity | | | 265,488 | | | | | | | | | | 251,592 | | | | | | | |
Total liabilities and stock- holders' equity | | $ | 2,026,277 | | | | | | | | | $ | 2,047,139 | | | | | | | |
Net interest income; interest rate spread | | | | | $ | 17,562 | | | 3.74 | % | | | | | $ | 17,602 | | | 3.67 | % |
Net interest margin (3) | | | | | | | | | 3.84 | % | | | | | | | | | 3.80 | % |
Average interest-earning assets to average interest-bearing liabilities | | | | | | | | | 126 | % | | | | | | | | | 123 | % |
(1) | Interest on certain tax-exempt loans and securities is not taxable for Federal income tax purposes. In order to compare the tax-exempt yields on these assets to taxable yields, the interest earned on these assets is adjusted to a pre-tax equivalent amount based on the marginal corporate federal income tax rate of 35%. | |
(2) | Annualized. | |
(3) | Net interest margin is net interest income divided by average interest-earning assets. | |
58 | ||
| | Nine Months Ended September 30, | | |||||||||||||||||
| | 2013 | | 2012 | | |||||||||||||||
| | Average | | | | | Yield/ | | | Average | | | | | Yield/ | | ||||
| | Balance | | Interest (1) | | Rate (2) | | | Balance | | Interest (1) | | Rate (2) | | ||||||
Interest-earning assets: | | | | | | | | | | | | | | | | | | | | |
Loans receivable | | $ | 1,523,216 | | $ | 51,092 | | | 4.48 | % | | $ | 1,467,038 | | $ | 54,925 | | | 5.00 | % |
Securities | | | 192,309 | | | 5,373 | | | 3.74 | | | | 261,628 | | | 6,775 | | | 3.58 | |
Interest bearing deposits | | | 85,483 | | | 174 | | | 0.27 | | | | 128,711 | | | 249 | | | 0.26 | |
FHLB stock | | | 19,557 | | | 631 | | | 4.31 | | | | 20,655 | | | 656 | | | 4.24 | |
Total interest-earning assets | | | 1,820,565 | | | 57,270 | | | 4.21 | | | | 1,878,032 | | | 62,605 | | | 4.45 | |
Non-interest-earning assets | | | 207,732 | | | | | | | | | | 198,740 | | | | | | | |
Total assets | | $ | 2,028,297 | | | | | | | | | $ | 2,076,772 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Interest-bearing liabilities: | | | | | | | | | | | | | | | | | | | | |
Deposits | | $ | 1,343,564 | | $ | 4,514 | | | 0.45 | % | | $ | 1,357,499 | | $ | 6,394 | | | 0.63 | % |
FHLB advances | | | 16,078 | | | 298 | | | 2.48 | | | | 81,823 | | | 2,260 | | | 3.69 | |
Subordinated debentures | | | 36,134 | | | 452 | | | 1.67 | | | | 36,179 | | | 813 | | | 3.00 | |
Notes payable | | | 49,376 | | | 178 | | | 0.48 | | | | 52,312 | | | 284 | | | 0.73 | |
Total interest-bearing liabilities | | | 1,445,152 | | | 5,442 | | | 0.50 | | | | 1,527,813 | | | 9,751 | | | 0.85 | |
Non-interest bearing deposits | | | 299,190 | | | - | | | | | | | 257,540 | | | - | | | | |
Total including non-interest bearing demand deposits | | | 1,744,342 | | | 5,442 | | | 0.42 | | | | 1,785,353 | | | 9,751 | | | 0.73 | |
Other non-interest-bearing liabilities | | | 20,820 | | | | | | | | | | 20,595 | | | | | | | |
Total liabilities | | | 1,765,162 | | | | | | | | | | 1,805,948 | | | | | | | |
Stockholders' equity | | | 263,135 | | | | | | | | | | 270,824 | | | | | | | |
Total liabilities and stock- holders' equity | | $ | 2,028,297 | | | | | | | | | $ | 2,076,772 | | | | | | | |
Net interest income; interest rate spread | | | | | $ | 51,828 | | | 3.70 | % | | | | | $ | 52,854 | | | 3.60 | % |
Net interest margin (3) | | | | | | | | | 3.82 | % | | | | | | | | | 3.78 | % |
Average interest-earning assets to average interest-bearing liabilities | | | | | | | | | 126 | % | | | | | | | | | 123 | % |
(1) | Interest on certain tax-exempt loans and securities is not taxable for Federal income tax purposes. In order to compare the tax-exempt yields on these assets to taxable yields, the interest earned on these assets is adjusted to a pre-tax equivalent amount based on the marginal corporate federal income tax rate of 35%. | |
(2) | Annualized. | |
(3) | Net interest margin is net interest income divided by average interest-earning assets. | |
59 | ||
60 | ||
61 | ||
| 1) | Changes in international, national and local economic business conditions and developments, including the condition of various market segments. |
| 2) | Changes in the value of underlying collateral for collateral dependent loans. |
| 3) | Changes in the nature and volume in the loan portfolio. |
| 4) | The existence and effect of any concentrations of credit and changes in the level of such concentrations. |
| 5) | Changes in lending policies and procedures, including underwriting standards and collection, charge-off and recovery practices. |
| 6) | Changes in the quality and breadth of the loan review process. |
| 7) | Changes in the experience, ability and depth of lending management and staff. |
| 8) | Changes in the trends of the volume and severity of delinquent and classified loans, and changes in the volume of non-accrual loans, trouble debt restructuring, and other loan modifications. |
| 9) | Changes in the political and regulatory environment. |
62 | ||
63 | ||
| | September 30, | | | December 31, | | ||
| | 2013 | | | 2012 | | ||
| | | | | | | | |
| | (In thousands) | | |||||
Non-performing loans: | | | | | | | | |
Single-family residential | | $ | 3,159 | | | $ | 3,602 | |
Construction | | | - | | | | - | |
Non-residential and multi-family residential real estate | | | 18,426 | | | | 23,090 | |
Commercial | | | 8,749 | | | | 5,661 | |
Consumer finance | | | - | | | | - | |
Home equity and improvement | | | 178 | | | | 217 | |
Total non-performing loans | | | 30,512 | | | | 32,570 | |
Real estate owned and repossessed assets | | | 5,518 | | | | 3,805 | |
Total non-performing assets | | $ | 36,030 | | | $ | 36,375 | |
| | | | | | | | |
Allowance for loan losses as a percentage of total loans* | | | 1.66 | % | | | 1.75 | % |
Allowance for loan losses as a percentage of non-performing assets | | | 72.06 | % | | | 73.43 | % |
Allowance for loan losses as a percentage of non-performing loans | | | 85.09 | % | | | 82.01 | % |
Total non-performing assets as a percentage of total assets | | | 1.75 | % | | | 1.78 | % |
Total non-performing loans as a percentage of total loans* | | | 1.95 | % | | | 2.14 | % |
64 | ||
| For the Nine Months Ended September 30, 2013 | | As of September 30, 2013 | | |||||||||
| Net | | % of Total Net | | | Nonaccrual | | % of Total Non- | | ||||
| Charge-offs | | Charge-offs | | | Loans | | Accrual Loans | | ||||
| (in thousands) | | | (in thousands) | | ||||||||
Residential | $ | 313 | | | 14.93 | % | | $ | 3,159 | | | 10.35 | % |
Construction | | - | | | 0.00 | % | | | - | | | 0.00 | % |
Commercial real estate | | 862 | | | 41.13 | % | | | 18,426 | | | 60.39 | % |
Commercial | | 359 | | | 17.13 | % | | | 8,749 | | | 28.68 | % |
Consumer | | 20 | | | 0.95 | % | | | - | | | 0.00 | % |
Home equity and improvement | | 542 | | | 25.86 | % | | | 178 | | | 0.58 | % |
Total | $ | 2,096 | | | 100.00 | % | | $ | 30,512 | | | 100.00 | % |
| | For the Nine Months Ended September 30, 2012 | | As of September 30, 2012 | | |||||||||
| | Net | | % of Total Net | | | Nonaccrual | | % of Total Non- | | ||||
| | Charge-offs | | Charge-offs | | | Loans | | Accrual Loans | | ||||
| | (in thousands) | | | (in thousands) | | ||||||||
Residential | | $ | 1,389 | | | 9.11 | % | | $ | 5,784 | | | 15.30 | % |
Construction | | | - | | | 0.00 | % | | | - | | | 0.00 | % |
Commercial real estate | | | 10,029 | | | 65.76 | % | | | 24,991 | | | 66.11 | % |
Commercial | | | 3,212 | | | 21.06 | % | | | 6,670 | | | 17.64 | % |
Consumer | | | 29 | | | 0.19 | % | | | 15 | | | 0.04 | % |
Home equity and improvement | | | 591 | | | 3.88 | % | | | 343 | | | 0.91 | % |
Total | | $ | 15,250 | | | 100.00 | % | | $ | 37,803 | | | 100.00 | % |
65 | ||
| | For the Quarter Ended | | |||||||||||||
| | 3rd 2013 | | 2nd 2013 | | 1st 2013 | | 4th 2012 | | 3rd 2012 | | |||||
| | (Dollars in Thousands) | | |||||||||||||
| | | | | | | | | | | | | | | | |
Allowance at beginning of period | | $ | 26,270 | | $ | 26,459 | | $ | 26,711 | | $ | 26,310 | | $ | 26,409 | |
Provision for credit losses | | | 476 | | | 448 | | | 425 | | | 2,619 | | | 705 | |
Charge-offs: | | | | | | | | | | | | | | | | |
Residential | | | 78 | | | 184 | | | 206 | | | 976 | | | 217 | |
Commercial real estate | | | 829 | | | 283 | | | 266 | | | 595 | | | 780 | |
Commercial | | | 39 | | | 316 | | | 205 | | | 540 | | | 355 | |
Consumer finance | | | 33 | | | 8 | | | 46 | | | 59 | | | 19 | |
Home equity and improvement | | | 170 | | | 170 | | | 272 | | | 497 | | | 203 | |
Total charge-offs | | | 1,149 | | | 961 | | | 995 | | | 2,667 | | | 1,574 | |
Recoveries | | | 367 | | | 324 | | | 318 | | | 449 | | | 770 | |
Net charge-offs | | | 782 | | | 637 | | | 677 | | | 2,218 | | | 804 | |
Ending allowance | | $ | 25,964 | | $ | 26,270 | | $ | 26,459 | | $ | 26,711 | | $ | 26,310 | |
| | September 30, 2013 | | | June 30, 2013 | | | March 31, 2013 | | | December 31, 2012 | | | September 30, 2012 | | |||||||||||||||
| | | | | Percent of | | | | | | Percent of | | | | | | Percent of | | | | | | Percent of | | | | | | Percent of | |
| | | | | total loans | | | | | | total loans | | | | | | total loans | | | | | | total loans | | | | | | total loans | |
| | Amount | | by category | | | Amount | | by category | | | Amount | | by category | | | Amount | | by category | | | Amount | | by category | | |||||
Residential | | $ | 2,798 | | 12.14 | % | | $ | 3,197 | | 12.47 | % | | $ | 3,433 | | 13.00 | % | | $ | 3,506 | | 13.00 | % | | $ | 2,996 | | 13.75 | % |
Construction | | | 119 | | 3.77 | % | | | 83 | | 2.63 | % | | | 67 | | 2.20 | % | | | 75 | | 2.45 | % | | | 63 | | 2.06 | % |
Commercial real estate | | | 15,616 | | 51.93 | % | | | 15,565 | | 51.98 | % | | | 15,777 | | 52.74 | % | | | 14,899 | | 51.63 | % | | | 16,260 | | 51.87 | % |
Commercial | | | 5,546 | | 24.42 | % | | | 5,474 | | 25.10 | % | | | 5,304 | | 24.04 | % | | | 6,325 | | 24.85 | % | | | 5,103 | | 23.92 | % |
Consumer | | | 162 | | 1.05 | % | | | 165 | | 1.07 | % | | | 155 | | 1.02 | % | | | 147 | | 1.03 | % | | | 147 | | 1.10 | % |
Home equity and improvement | | | 1,723 | | 6.69 | % | | | 1,786 | | 6.75 | % | | | 1,723 | | 7.00 | % | | | 1,759 | | 7.04 | % | | | 1,741 | | 7.30 | % |
| | $ | 25,964 | | 100.00 | % | | $ | 26,270 | | 100.00 | % | | $ | 26,459 | | 100.00 | % | | $ | 26,711 | | 100.00 | % | | $ | 26,310 | | 100.00 | % |
| | 3rd Qtr 2013 | | | 2nd Qtr 2013 | | | 1st Qtr 2013 | | | 4th Qtr 2012 | | | 3rd Qtr 2012 | | |||||
Allowance for loan losses / loans* | | | 1.66 | % | | | 1.68 | % | | | 1.76 | % | | | 1.75 | % | | | 1.74 | % |
| | | | | | | | | | | | | | | | | | | | |
Allowance for loan losses to net charge-offs | | | 3320.20 | % | | | 4124.02 | % | | | 3908.27 | % | | | 1204.83 | % | | | 3272.39 | % |
| | | | | | | | | | | | | | | | | | | | |
Allowance for loan losses / non-performing assets | | | 72.06 | % | | | 74.64 | % | | | 66.82 | % | | | 73.43 | % | | | 64.73 | % |
| | | | | | | | | | | | | | | | | | | | |
Allowance for loan losses / non-performing loans | | | 85.09 | % | | | 91.69 | % | | | 74.99 | % | | | 82.01 | % | | | 69.60 | % |
| | | | | | | | | | | | | | | | | | | | |
Non-performing assets / loans plus REO* | | | 2.30 | % | | | 2.24 | % | | | 2.62 | % | | | 2.38 | % | | | 2.68 | % |
| | | | | | | | | | | | | | | | | | | | |
Non-performing assets / total assets | | | 1.75 | % | | | 1.70 | % | | | 1.94 | % | | | 1.78 | % | | | 1.98 | % |
| | | | | | | | | | | | | | | | | | | | |
Net charge-offs / average loans (annualized) | | | 0.20 | % | | | 0.17 | % | | | 0.18 | % | | | 0.59 | % | | | 0.22 | % |
66 | ||
67 | ||
68 | ||
69 | ||
70 | ||
71 | ||
| | Actual | | | Minimum Required for Adequately Capitalized | | | Minimum Required for Well Capitalized | | ||||||||||||
| | | Amount | | | Ratio | | | | Amount | | | Ratio | | | | Amount | | | Ratio | |
Tier 1 Capital (1) | | | | | | | | | | | | | | | | | | | | | |
Consolidated | | $ | 243,352 | | | 12.20 | % | | $ | 79,812 | | | 4.0 | % | | | N/A | | | N/A | |
First Federal Bank | | $ | 233,342 | | | 11.71 | % | | $ | 79,708 | | | 4.0 | % | | $ | 99,635 | | | 5.0 | % |
| | | | | | | | | | | | | | | | | | | | | |
Tier 1 Capital (to Risk Weighted Assets) (1) | | | | | | | | | | | | | | | | | | | | | |
Consolidated | | $ | 243,352 | | | 14.04 | % | | $ | 69,348 | | | 4.0 | % | | | N/A | | | N/A | |
First Federal Bank | | $ | 233,342 | | | 13.47 | % | | $ | 69,287 | | | 4.0 | % | | $ | 103,930 | | | 6.0 | % |
| | | | | | | | | | | | | | | | | | | | | |
Total Capital (to Risk Weighted Assets) (1) | | | | | | | | | | | | | | | | | | | | | |
Consolidated | | $ | 265,077 | | | 15.29 | % | | $ | 138,697 | | | 8.0 | % | | | N/A | | | N/A | |
First Federal Bank | | $ | 255,048 | | | 14.72 | % | | $ | 138,574 | | | 8.0 | % | | $ | 173,217 | | | 10.0 | % |
72 | ||
September 30, 2013 | |||||||
Economic Value of Equity | |||||||
Change in Rates | | $ Amount | | $ Change | | % Change | |
(Dollars in Thousands) | | ||||||
+400 bp | | 444,803 | | 33,725 | | 8.20 | % |
+ 300 bp | | 438,909 | | 27,831 | | 6.77 | % |
+ 200 bp | | 430,980 | | 19,902 | | 4.84 | % |
+ 100 bp | | 421,930 | | 10,853 | | 2.64 | % |
0 bp | | 411,078 | | | | | |
- 100 bp | | 397,512 | | (13,566) | | (3.30) | % |
December 31, 2012 | |||||||
Economic Value of Equity | |||||||
Change in Rates | | $ Amount | | $ Change | | % Change | |
(Dollars in Thousands) | | ||||||
+400 bp | | 415,094 | | 46,835 | | 12.72 | % |
+ 300 bp | | 407,337 | | 39,078 | | 10.61 | % |
+ 200 bp | | 398,150 | | 29,891 | | 8.12 | % |
+ 100 bp | | 387,482 | | 19,223 | | 5.22 | % |
0 bp | | 368,259 | | | | | |
- 100 bp | | 343,745 | | (24,514) | | (6.66) | % |
73 | ||
| Exhibit 3.1 | Articles of Incorporation (1) |
| | |
| Exhibit 3.2 | Code of Regulations (1) |
| | |
| Exhibit 3.3 | Amendment to Articles of Incorporation (2) |
| | |
| Exhibit 31.1 | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
| Exhibit 31.2 | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
| Exhibit 32.1 | Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
| Exhibit 32.2 | Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
(1) | Incorporated herein by reference to the like numbered exhibit in the Registrant’s Form S-1 (File No. 33-93354) |
(2) | Incorporated herein by reference to Exhibit 3 in Form 8-K filed December 8, 2008 (Film No. 081236105) |
74 | ||
| First Defiance Financial Corp. | |
| (Registrant) | |
| | |
Date: November 8, 2013 | By: | /s/ William J. Small |
| | William J. Small |
| | Chairman, President and |
| | Chief Executive Officer |
| | |
Date: November 8, 2013 | By: | /s/ Donald P. Hileman |
| | Donald P. Hileman |
| | Executive Vice President and |
| | Chief Financial Officer |
| | (Principal Financial Officer) |
75 | ||
1. | I have reviewed this Quarterly Report on Form 10-Q of First Defiance Financial Corp.; |
| |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| | |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| | |
| (c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| | |
| (d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
| | |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | November 8, 2013 | | /s/ William J. Small |
| | | William J. Small |
| | | Chairman, President and |
| | | Chief Executive Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q of First Defiance Financial Corp.; |
| |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| | |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| | |
| (c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| | |
| (d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
| | |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | November 8, 2013 | | /s/ Donald P. Hileman |
| | | Donald P. Hileman |
| | | Executive Vice President and |
| | | Chief Financial Officer |
1. | The Report fully complies with the requirements of sections 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and |
| |
2. | The information contained in the Report fairly presents, in all material respects, the Company's financial condition and results of operations. |
Date: November 8, 2013 | | | /s/ William J. Small |
| | William J. Small | |
| | Chief Executive Officer |
1. | The Report fully complies with the requirements of sections 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and |
| |
2. | The information contained in the Report fairly presents, in all material respects, the Company's financial condition and results of operations. |
Date: November 8, 2013 | | | /s/ Donald P. Hileman |
| | Donald P. Hileman | |
| | Chief Financial Officer |
Derivative Financial Instruments (Details Textual) (USD $)
In Millions, unless otherwise specified |
Sep. 30, 2013
|
Dec. 31, 2012
|
---|---|---|
Interest Rate Derivative Instruments Not Designated as Hedging Instruments at Fair Value, Net | $ 9.1 | $ 34.0 |
Derivative Asset, Notional Amount | $ 13.3 | $ 53.6 |
Mortgage Banking
|
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2013
|
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Mortgage Banking [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage Banking [Text Block] | 9. Mortgage Banking Net revenues from the sales and servicing of mortgage loans consisted of the following:
The unpaid principal balance of residential mortgage loans serviced for third parties was $1.4 billion at September 30, 2013 and $1.3 billion at December 31, 2012. Activity for capitalized mortgage servicing rights and the related valuation allowance follows for the three and nine months ended September 30, 2013 and 2012:
Amortization of mortgage servicing rights is computed based on payments and payoffs of the related mortgage loans serviced. Estimates of future amortization expense are not easily estimable. An accrual for estimated secondary market buy-back losses of $399,000 was established in the third quarter of 2013. These losses were accrued and expensed as of September 30, 2013 based on an estimated exposure to repurchase requests resulting from notifications received about Freddie Mac’s review process during the third quarter of 2013. An accrual reversal of $498,000 was recorded in the third quarter of 2013 as a result of Fannie Mae completing their post-foreclosure review process that began in the first quarter of 2013. The original accrual of these estimated losses was established in the first quarter of 2013. Secondary market buy-back losses were $(95,000) in the third quarter of 2013 compared to $115,000 for the same period in 2012. Secondary market buy-back losses were $547,000 for the nine months ended September 30, 2013 compared to $188,000 for the same period in 2012. The accrual for estimated buy-back losses was $399,000 at September 30, 2013. |
Investment Securities (Details 5) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2013
|
Sep. 30, 2012
|
Sep. 30, 2013
|
Sep. 30, 2012
|
|
Proceeds | $ 0 | $ 2,122 | $ 4,027 | $ 8,538 |
Gross realized gains | 0 | 103 | 97 | 528 |
Gross realized losses | $ 0 | $ 0 | $ 0 | $ 0 |
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