☒ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
New Mexico
|
|
85-0242376
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
|
|
|
1200 Trinity Drive
Los Alamos, New Mexico
|
|
87544
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Large accelerated filer ☐
|
Accelerated filer ☐
|
Non-accelerated filer ☐ (do not check if a smaller reporting company)
|
Smaller reporting company ☒
|
PART I – FINANCIAL INFORMATION
|
|
Item 1. Financial Statements and Supplementary Data
|
2
|
Item 2. Management's Discussions and Analysis of Financial Condition and Results of Operations
|
33
|
Item 3. Quantitative and Qualitative Disclosures About Market Risk
|
34
|
Item 4. Controls and Procedures
|
35
|
PART II – OTHER INFORMATION
|
|
Item 1. Legal Proceedings
|
36
|
Item 1A. Risk Factors
|
39
|
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
|
41
|
Item 3. Defaults Upon Senior Securities
|
63
|
Item 4. Mine Safety Disclosures
|
66
|
Item 5. Other Information
|
117
|
Item 6. Exhibits
|
118
|
Signatures
|
122
|
(In thousands, except share data)
|
||||||||
|
June 30, 2016
|
December 31, 2015
|
||||||
ASSETS
|
||||||||
Cash and due from banks
|
$
|
16,734
|
$
|
13,506
|
||||
Interest-bearing deposits with banks
|
65,769
|
151,049
|
||||||
Securities purchased under resell agreements
|
-
|
24,320
|
||||||
Cash and cash equivalents
|
82,503
|
188,875
|
||||||
Investment securities available for sale, at fair value
|
463,470
|
316,040
|
||||||
Investment securities held to maturity, at amortized cost (fair value of $8,596 and $8,988 as of June 30, 2016 and December 31, 2015, respectively)
|
8,906
|
8,986
|
||||||
Non-marketable equity securities
|
3,856
|
3,854
|
||||||
Loans held for sale
|
2,366
|
3,041
|
||||||
Loans (net of allowance for loan losses of $17,592 and $17,392 as of June 30, 2016 and December 31, 2015, respectively)
|
790,370
|
822,396
|
||||||
Mortgage servicing rights ("MSRs"), net
|
5,311
|
6,882
|
||||||
Bank owned life insurance ("BOLI")
|
10,014
|
-
|
||||||
Premises and equipment, net
|
27,325
|
23,373
|
||||||
Other real estate owned ("OREO"), net
|
8,653
|
8,346
|
||||||
Other assets
|
17,596
|
17,192
|
||||||
Total assets
|
$
|
1,420,370
|
$
|
1,398,985
|
||||
|
||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
Liabilities
|
||||||||
Deposits:
|
||||||||
Noninterest-bearing
|
$
|
168,666
|
$
|
152,888
|
||||
Interest-bearing
|
1,095,628
|
1,101,070
|
||||||
Total deposits
|
1,264,294
|
1,253,958
|
||||||
Borrowings
|
2,300
|
2,300
|
||||||
Junior subordinated debt
|
37,116
|
37,116
|
||||||
Other liabilities
|
31,537
|
26,621
|
||||||
Total liabilities
|
1,335,247
|
1,319,995
|
||||||
|
||||||||
Stock owned by Employee Stock Ownership Plan ("ESOP") participants; 672,654 shares and 672,623 shares as of June 30, 2016 and December 31, 2015, respectively, at fair value
|
$
|
2,689
|
$
|
2,690
|
||||
|
||||||||
Commitments and contingencies (Note 13)
|
||||||||
|
||||||||
Stockholders' equity
|
||||||||
Preferred stock, no par, 1,000,000 shares authorized
|
||||||||
Series A, 9% cumulative perpetual, 35,539 shares issued and outstanding, $1,000 liquidation value per share, at amortized cost
|
$
|
34,963
|
$
|
34,858
|
||||
Series B, 9% cumulative perpetual, 1,777 shares issued and outstanding, $1,000 liquidation value per share, at amortized cost
|
1,866
|
1,882
|
||||||
Common stock, no par; 20,000,000 shares authorized; 6,856,800 shares issued; 6,526,302 shares and 6,491,802 shares outstanding as of June 30, 2016 and December 31, 2015, respectively
|
6,836
|
6,836
|
||||||
Additional paid-in capital
|
394
|
1,153
|
||||||
Retained earnings
|
43,267
|
44,232
|
||||||
Accumulated other comprehensive income (loss)
|
4,091
|
(2,781
|
)
|
|||||
Total stockholders' equity before treasury stock
|
91,417
|
86,180
|
||||||
Treasury stock, at cost; 330,498 shares and 364,998 shares as of June 30, 2016 and December 31, 2015, respectively
|
(8,983
|
)
|
(9,880
|
)
|
||||
Total stockholders' equity
|
82,434
|
76,300
|
||||||
Total liabilities and stockholders' equity
|
$
|
1,420,370
|
$
|
1,398,985
|
(In thousands, except per share data)
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||
2016
|
2015
|
2016
|
2015
|
|||||||||||||
Interest income:
|
||||||||||||||||
Loans, including fees
|
$
|
9,989
|
$
|
10,872
|
$
|
20,119
|
$
|
21,980
|
||||||||
Interest and dividends on investment securities:
|
||||||||||||||||
Taxable
|
1,875
|
823
|
3,606
|
1,762
|
||||||||||||
Nontaxable
|
131
|
45
|
148
|
90
|
||||||||||||
Other interest income
|
178
|
215
|
426
|
429
|
||||||||||||
Total interest income
|
12,173
|
11,955
|
24,299
|
24,261
|
||||||||||||
|
||||||||||||||||
Interest expense:
|
||||||||||||||||
Deposits
|
591
|
753
|
1,214
|
1,542
|
||||||||||||
Borrowings
|
37
|
36
|
73
|
212
|
||||||||||||
Junior subordinated debt
|
730
|
683
|
1,437
|
1,315
|
||||||||||||
Total interest expense
|
1,358
|
1,472
|
2,724
|
3,069
|
||||||||||||
Net interest income
|
10,815
|
10,483
|
21,575
|
21,192
|
||||||||||||
Provision for loan losses
|
-
|
-
|
-
|
-
|
||||||||||||
Net interest income after provision for loan losses
|
10,815
|
10,483
|
21,575
|
21,192
|
||||||||||||
|
||||||||||||||||
Noninterest income:
|
||||||||||||||||
Mortgage loan servicing fees
|
540
|
583
|
1,090
|
1,171
|
||||||||||||
Trust and investment services fees
|
614
|
686
|
1,246
|
1,348
|
||||||||||||
Service charges on deposits
|
272
|
339
|
566
|
683
|
||||||||||||
Net gain on sale of OREO
|
585
|
166
|
843
|
429
|
||||||||||||
Net gain on sale of loans
|
650
|
736
|
1,223
|
1,537
|
||||||||||||
Net gain on sale of securities
|
54
|
-
|
54
|
1
|
||||||||||||
Other fees
|
893
|
1,093
|
1,748
|
1,998
|
||||||||||||
Other noninterest income
|
149
|
(66
|
)
|
201
|
241
|
|||||||||||
Total noninterest income
|
3,757
|
3,537
|
6,971
|
7,408
|
||||||||||||
|
||||||||||||||||
Noninterest expenses:
|
||||||||||||||||
Salaries and employee benefits
|
6,558
|
6,238
|
12,924
|
12,428
|
||||||||||||
Occupancy
|
904
|
930
|
1,743
|
1,900
|
||||||||||||
Data processing
|
700
|
724
|
1,360
|
1,411
|
||||||||||||
Legal, professional and accounting fees
|
2,051
|
2,095
|
3,410
|
4,044
|
||||||||||||
Amortization and valuation on MSR
|
754
|
(407
|
)
|
1,925
|
359
|
|||||||||||
Other noninterest expense
|
3,120
|
2,628
|
5,968
|
5,507
|
||||||||||||
Total noninterest expenses
|
14,087
|
12,208
|
27,330
|
25,649
|
||||||||||||
Income before provision for income taxes
|
485
|
1,812
|
1,216
|
2,951
|
||||||||||||
Provision for income taxes
|
-
|
-
|
-
|
-
|
||||||||||||
Net income
|
485
|
1,812
|
1,216
|
2,951
|
||||||||||||
Dividends and discount accretion on preferred shares
|
1,059
|
968
|
2,093
|
1,915
|
||||||||||||
Net income (loss) available to common stockholders
|
$
|
(574
|
)
|
$
|
844
|
$
|
(877
|
)
|
$
|
1,036
|
||||||
Basic earnings per common share
|
$
|
(0.09
|
)
|
$
|
0.13
|
$
|
(0.13
|
)
|
$
|
0.16
|
||||||
Diluted earnings per common share
|
$
|
(0.09
|
)
|
$
|
0.13
|
$
|
(0.13
|
)
|
$
|
0.16
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||
|
2016
|
2015
|
2016
|
2015
|
||||||||||||
|
(In thousands)
|
|||||||||||||||
Net income
|
$
|
485
|
$
|
1,812
|
$
|
1,216
|
$
|
2,951
|
||||||||
Other comprehensive income (loss):
|
||||||||||||||||
Unrealized gains (losses) on securities available for sale
|
3,469
|
(1,877
|
)
|
6,926
|
(1,155
|
)
|
||||||||||
Securities gains reclassified into earnings
|
(54
|
)
|
-
|
(54
|
)
|
(1
|
)
|
|||||||||
Related income tax benefit (expense)
|
-
|
-
|
-
|
-
|
||||||||||||
Other comprehensive income (loss)
|
3,415
|
(1,877
|
)
|
6,872
|
(1,156
|
)
|
||||||||||
Total comprehensive income (loss)
|
$
|
3,900
|
$
|
(65
|
)
|
$
|
8,088
|
$
|
1,795
|
|
Common stock
|
|||||||||||||||||||||||||||
(In thousands, except per share data)
|
Issued
|
Held in
treasury, at
cost
|
Preferred
stock
|
Additional
paid-in
capital
|
Retained
earnings
|
Accumulated other
comprehensive
income (loss)
|
Total
stockholders'
equity
|
|||||||||||||||||||||
Balance, December 31, 2014
|
$
|
6,836
|
$
|
(10,888
|
)
|
$
|
36,563
|
$
|
1,963
|
$
|
47,084
|
$
|
(555
|
)
|
$
|
81,003
|
||||||||||||
Net income
|
2,951
|
2,951
|
||||||||||||||||||||||||||
Other comprehensive income (loss)
|
(1,156
|
)
|
(1,156
|
)
|
||||||||||||||||||||||||
Dividends declared on preferred shares
|
(1,915
|
)
|
(1,915
|
)
|
||||||||||||||||||||||||
Amortization of preferred stock issuance costs
|
89
|
(89
|
)
|
-
|
||||||||||||||||||||||||
Treasury shares issued for board compensation
|
943
|
(788
|
)
|
155
|
||||||||||||||||||||||||
Net change in the fair value of stock owned by ESOP participants
|
(674
|
)
|
(674
|
)
|
||||||||||||||||||||||||
Balance, June 30, 2015
|
$
|
6,836
|
$
|
(9,945
|
)
|
$
|
36,652
|
$
|
1,175
|
$
|
47,357
|
$
|
(1,711
|
)
|
$
|
80,364
|
|
Common stock
|
|||||||||||||||||||||||||||
(In thousands, except per share data)
|
Issued
|
Held in
treasury, at
cost
|
Preferred
stock
|
Additional
paid-in
capital
|
Retained
earnings
|
Accumulated other
comprehensive
income (loss)
|
Total
stockholders'
equity
|
|||||||||||||||||||||
Balance, December 31, 2015
|
$
|
6,836
|
$
|
(9,880
|
)
|
$
|
36,740
|
$
|
1,153
|
$
|
44,232
|
$
|
(2,781
|
)
|
$
|
76,300
|
||||||||||||
Net income
|
1,216
|
1,216
|
||||||||||||||||||||||||||
Other comprehensive income
|
6,872
|
6,872
|
||||||||||||||||||||||||||
Dividends declared on preferred shares
|
(2,093
|
)
|
(2,093
|
)
|
||||||||||||||||||||||||
Amortization of preferred stock issuance costs
|
89
|
(89
|
)
|
-
|
||||||||||||||||||||||||
Treasury shares issued for board compensation
|
897
|
(759
|
)
|
138
|
||||||||||||||||||||||||
Net change in the fair value of stock owned by ESOP participants
|
1
|
1
|
||||||||||||||||||||||||||
Balance, June 30, 2016
|
$
|
6,836
|
$
|
(8,983
|
)
|
$
|
36,829
|
$
|
394
|
$
|
43,267
|
$
|
4,091
|
$
|
82,434
|
|
Six Months Ended
June 30,
|
|||||||
|
2016
|
2015
|
||||||
Cash Flows From Operating Activities
|
(Dollars in thousands)
|
|||||||
Net income
|
$
|
1,216
|
2,951
|
|||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
768
|
874
|
||||||
Provision for loan losses reversal
|
-
|
-
|
||||||
Net gain on sale of investment securities
|
(54
|
)
|
1
|
|||||
Net gain on sale of loans
|
(1,223
|
)
|
(1,537
|
)
|
||||
Net gain on sale of OREO
|
(751
|
)
|
(403
|
)
|
||||
Loss on disposal of premises and equipment
|
1
|
-
|
||||||
Federal Home Loan Bank stock dividends received
|
1
|
2
|
||||||
Net amortization of MSRs
|
717
|
774
|
||||||
Change in mortgage servicing rights valuation allowance
|
1,208
|
(415
|
)
|
|||||
Changes in operating assets and liabilities:
|
||||||||
Other Assets
|
2,323
|
2,555
|
||||||
Other Liabilities
|
2,821
|
2,079
|
||||||
Net cash provided by operating activities before origination and gross sales of loans held for sale
|
7,027
|
6,881
|
||||||
Gross sales of loans held for sale
|
(33,311
|
)
|
(42,035
|
)
|
||||
Origination of loans held for sale
|
34,854
|
45,204
|
||||||
Net cash provided by operating activities
|
$
|
8,570
|
10,050
|
|
Six Months Ended
June 30,
|
|||||||
|
2016
|
2015
|
||||||
Cash Flows From Investing Activities
|
(Dollars in thousands)
|
|||||||
Proceeds from maturities and paydowns of investment securities, available for sale
|
$
|
22,994
|
$
|
30,014
|
||||
Proceeds from sale of investment securities, available for sale
|
17,716
|
-
|
||||||
Purchase of investment securities, available for sale
|
(183,942
|
)
|
(92,879
|
)
|
||||
Proceeds from maturities and paydowns of investment securities, held to maturity
|
69
|
94
|
||||||
Proceeds from maturities and paydowns of investment securities, other
|
-
|
1,055
|
||||||
Purchase bank owned life insurance
|
(10,000
|
)
|
-
|
|||||
Proceeds from sale of other real estate owned
|
2,358
|
5,619
|
||||||
Loans paid down (funded), net
|
30,109
|
42,327
|
||||||
Purchases of premises and equipment
|
(4,721
|
)
|
(68
|
)
|
||||
Proceeds from sale of premises and equipment
|
-
|
21
|
||||||
Net cash used in investing activities
|
(125,417
|
)
|
(13,817
|
)
|
||||
Cash Flows From Financing Activities
|
||||||||
Net increase in demand deposits, NOW accounts and savings accounts
|
31,751
|
68,729
|
||||||
Net decrease in time deposits
|
(21,414
|
)
|
(32,383
|
)
|
||||
Repayment of borrowings
|
-
|
(20,000
|
)
|
|||||
Issuance of common stock for board compensation
|
138
|
155
|
||||||
Net cash provided by financing activities
|
10,475
|
16,501
|
||||||
Net increase (decrease) in cash and cash equivalents
|
(106,372
|
)
|
12,734
|
|||||
Cash and cash equivalents:
|
||||||||
Beginning of period
|
188,875
|
247,398
|
||||||
End of period
|
$
|
82,503
|
$
|
260,132
|
||||
Supplemental Disclosures of Cash Flow Information
|
||||||||
Cash payments for:
|
||||||||
Interest
|
$
|
1,377
|
$
|
1,532
|
||||
Non-cash investing and financing activities:
|
||||||||
Transfers from loans to other real estate owned
|
2,885
|
2,058
|
||||||
Sales of other real estate owned financed by loans
|
971
|
297
|
||||||
Dividends declared on preferred stock, not yet paid
|
2,093
|
1,915
|
||||||
Change in unrealized gain (loss) on investment securities, net of taxes
|
6,926
|
(1,155
|
)
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||
|
2016
|
2015
|
2016
|
2015
|
||||||||||||
|
(In thousands, except share data)
|
|||||||||||||||
Net income
|
$
|
485
|
$
|
1,812
|
$
|
1,216
|
$
|
2,951
|
||||||||
Dividends and discount accretion on preferred shares
|
1,059
|
968
|
2,093
|
1,915
|
||||||||||||
Net income (loss) available to common stockholders
|
$
|
(574
|
)
|
$
|
844
|
$
|
(877
|
)
|
$
|
1,036
|
||||||
Weighted average common shares issued
|
6,856,800
|
6,856,800
|
6,856,800
|
6,856,800
|
||||||||||||
LESS: Weighted average treasury stock shares
|
(330,498
|
)
|
(369,751
|
)
|
(331,256
|
)
|
(380,317
|
)
|
||||||||
Weighted average common shares outstanding, net
|
6,526,302
|
6,487,049
|
6,525,544
|
6,476,483
|
||||||||||||
Basic income per common share
|
$
|
(0.09
|
)
|
$
|
0.13
|
$
|
(0.13
|
)
|
$
|
0.16
|
||||||
Dilutive effect of stock-based compensation
|
-
|
-
|
-
|
-
|
||||||||||||
Weighted average common shares outstanding including dilutive shares
|
6,526,302
|
6,487,049
|
6,525,544
|
6,476,483
|
||||||||||||
Diluted income per common share
|
$
|
(0.09
|
)
|
$
|
0.13
|
$
|
(0.13
|
)
|
$
|
0.16
|
Securities Available for Sale:
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair Value
|
||||||||||||
|
(In thousands)
|
|||||||||||||||
June 30, 2016
|
||||||||||||||||
U.S. Government sponsored agency
|
$
|
61,863
|
$
|
1,648
|
$
|
-
|
$
|
63,511
|
||||||||
State and political subdivision
|
32,357
|
967
|
-
|
33,324
|
||||||||||||
Residential mortgage backed security
|
201,281
|
965
|
(1,329
|
)
|
200,917
|
|||||||||||
Residential collateralized mortgage obligation
|
35,689
|
392
|
(6
|
)
|
36,075
|
|||||||||||
Commercial mortgage backed security
|
87,343
|
2,140
|
-
|
89,483
|
||||||||||||
SBA pools
|
729
|
-
|
(6
|
)
|
723
|
|||||||||||
Asset-backed security
|
40,116
|
-
|
(679
|
)
|
39,437
|
|||||||||||
Totals
|
$
|
459,378
|
$
|
6,112
|
$
|
(2,020
|
)
|
$
|
463,470
|
|||||||
|
||||||||||||||||
December 31, 2015
|
||||||||||||||||
U.S. Government sponsored agency
|
$
|
69,798
|
$
|
98
|
$
|
(312
|
)
|
$
|
69,584
|
|||||||
State and political subdivision
|
3,429
|
147
|
-
|
3,576
|
||||||||||||
Residential mortgage backed security
|
123,055
|
43
|
(1,501
|
)
|
121,597
|
|||||||||||
Residential collateralized mortgage obligation
|
40,305
|
139
|
(523
|
)
|
39,921
|
|||||||||||
Commercial mortgage backed security
|
41,341
|
15
|
(237
|
)
|
41,119
|
|||||||||||
SBA pools
|
757
|
-
|
(7
|
)
|
750
|
|||||||||||
Asset-backed security
|
40,136
|
-
|
(643
|
)
|
39,493
|
|||||||||||
Totals
|
$
|
318,821
|
$
|
442
|
$
|
(3,223
|
)
|
$
|
316,040
|
Securities Held to Maturity
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair Value
|
||||||||||||
|
(In thousands)
|
|||||||||||||||
June 30, 2016
|
||||||||||||||||
SBA pools
|
$
|
8,906
|
$
|
-
|
$
|
(310
|
)
|
$
|
8,596
|
|||||||
Totals
|
$
|
8,906
|
$
|
-
|
$
|
(310
|
)
|
$
|
8,596
|
|||||||
|
||||||||||||||||
December 31, 2015
|
||||||||||||||||
SBA pools
|
$
|
8,986
|
$
|
2
|
$
|
-
|
$
|
8,988
|
||||||||
Totals
|
$
|
8,986
|
$
|
2
|
$
|
-
|
$
|
8,988
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||
|
2016
|
2015
|
2016
|
2015
|
||||||||||||
(In thousands)
|
||||||||||||||||
Gross realized gains
|
$
|
54
|
$
|
-
|
$
|
54
|
$
|
1
|
||||||||
Gross realized losses
|
-
|
-
|
-
|
-
|
||||||||||||
Net gains
|
$
|
54
|
$
|
-
|
$
|
54
|
$
|
1
|
|
Less than 12 Months
|
12 Months or Longer
|
Total
|
|||||||||||||||||||||
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||
Securities Available for Sale:
|
||||||||||||||||||||||||
June 30, 2016
|
||||||||||||||||||||||||
U.S. Government sponsored agency
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||||||
State and political subdivision
|
200
|
-
|
-
|
-
|
200
|
-
|
||||||||||||||||||
Residential mortgage backed security
|
55,631
|
(219
|
)
|
60,620
|
(1,110
|
)
|
116,251
|
(1,329
|
)
|
|||||||||||||||
Residential collateralized mortgage obligation
|
204
|
(3
|
)
|
3,053
|
(3
|
)
|
3,257
|
(6
|
)
|
|||||||||||||||
SBA pools
|
-
|
-
|
716
|
(6
|
)
|
716
|
(6
|
)
|
||||||||||||||||
Asset-backed security
|
-
|
-
|
39,437
|
(679
|
)
|
39,437
|
(679
|
)
|
||||||||||||||||
Totals
|
$
|
56,035
|
$
|
(222
|
)
|
$
|
103,826
|
$
|
(1,798
|
)
|
$
|
159,861
|
$
|
(2,020
|
)
|
|||||||||
|
||||||||||||||||||||||||
December 31, 2015
|
||||||||||||||||||||||||
U.S. Government sponsored agency
|
$
|
54,804
|
$
|
(312
|
)
|
$
|
-
|
$
|
-
|
$
|
54,804
|
$
|
(312
|
)
|
||||||||||
State and political subdivision
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Residential mortgage backed security
|
54,760
|
(602
|
)
|
48,752
|
(899
|
)
|
103,512
|
(1,501
|
)
|
|||||||||||||||
Residential collateralized mortgage obligation
|
17,237
|
(185
|
)
|
16,252
|
(338
|
)
|
33,489
|
(523
|
)
|
|||||||||||||||
Commercial mortgage backed security
|
26,883
|
(237
|
)
|
-
|
-
|
26,883
|
(237
|
)
|
||||||||||||||||
SBA pools
|
-
|
-
|
742
|
(7
|
)
|
742
|
(7
|
)
|
||||||||||||||||
Asset-backed security
|
39,493
|
(643
|
)
|
-
|
-
|
39,493
|
(643
|
)
|
||||||||||||||||
Totals
|
$
|
193,177
|
$
|
(1,979
|
)
|
$
|
65,746
|
$
|
(1,244
|
)
|
$
|
258,923
|
$
|
(3,223
|
)
|
|||||||||
|
||||||||||||||||||||||||
Securities Held to Maturity:
|
||||||||||||||||||||||||
June 30, 2016
|
||||||||||||||||||||||||
SBA Pools
|
$
|
8,596
|
$
|
(310
|
)
|
$
|
-
|
$
|
-
|
$
|
8,596
|
$
|
(310
|
)
|
||||||||||
Totals
|
$
|
8,596
|
$
|
(310
|
)
|
$
|
-
|
$
|
-
|
$
|
8,596
|
$
|
(310
|
)
|
||||||||||
|
||||||||||||||||||||||||
December 31, 2015
|
||||||||||||||||||||||||
None
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||||||
Totals
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
|
Available for Sale
|
Held to Maturity
|
||||||||||||||
|
Amortized Cost
|
Fair Value
|
Amortized Cost
|
Fair Value
|
||||||||||||
|
(In thousands)
|
|||||||||||||||
One year or less
|
$
|
7,721
|
$
|
7,723
|
$
|
-
|
$
|
-
|
||||||||
One to five years
|
20,946
|
21,299
|
-
|
-
|
||||||||||||
Five to ten years
|
36,321
|
37,803
|
-
|
-
|
||||||||||||
Over ten years
|
70,077
|
70,170
|
8,906
|
8,596
|
||||||||||||
Subtotal
|
135,065
|
136,995
|
8,906
|
8,596
|
||||||||||||
Residential mortgage backed security
|
201,281
|
200,917
|
-
|
-
|
||||||||||||
Residential collateralized mortgage obligation
|
35,689
|
36,075
|
-
|
-
|
||||||||||||
Commercial mortgage backed security
|
87,343
|
89,483
|
||||||||||||||
Total
|
$
|
459,378
|
$
|
463,470
|
$
|
8,906
|
$
|
8,596
|
|
June 30, 2016
|
December 31, 2015
|
||||||
|
(In thousands)
|
|||||||
Commercial
|
$
|
87,482
|
$
|
92,995
|
||||
Commercial real estate
|
380,958
|
371,599
|
||||||
Residential real estate
|
235,404
|
258,606
|
||||||
Construction real estate
|
81,739
|
89,341
|
||||||
Installment and other
|
23,799
|
28,730
|
||||||
Total loans
|
809,382
|
841,271
|
||||||
Unearned income
|
(1,420
|
)
|
(1,483
|
)
|
||||
Gross loans
|
807,962
|
839,788
|
||||||
Allowance for loan losses
|
(17,592
|
)
|
(17,392
|
)
|
||||
Net loans
|
$
|
790,370
|
$
|
822,396
|
|
Current
|
30-59 Days
Past Due
|
60-89 Days
Past Due
|
Loans past
due 90 days
or more
|
Total Past
Due
|
Total
|
||||||||||||||||||
June 30, 2016
|
(In thousands)
|
|||||||||||||||||||||||
Commercial
|
$
|
84,732
|
$
|
984
|
$
|
71
|
$
|
1,695
|
$
|
2,750
|
$
|
87,482
|
||||||||||||
Commercial real estate
|
375,065
|
1,294
|
444
|
4,155
|
5,893
|
380,958
|
||||||||||||||||||
Residential real estate
|
230,694
|
1,337
|
88
|
3,285
|
4,710
|
235,404
|
||||||||||||||||||
Construction real estate
|
73,389
|
733
|
18
|
7,599
|
8,350
|
81,739
|
||||||||||||||||||
Installment and other
|
23,698
|
71
|
27
|
3
|
101
|
23,799
|
||||||||||||||||||
Total loans
|
$
|
787,578
|
$
|
4,419
|
$
|
648
|
$
|
16,737
|
$
|
21,804
|
$
|
809,382
|
||||||||||||
|
||||||||||||||||||||||||
Nonaccrual loan classification
|
$
|
5,285
|
$
|
1,855
|
$
|
550
|
$
|
16,737
|
$
|
19,142
|
$
|
24,427
|
||||||||||||
|
||||||||||||||||||||||||
December 31, 2015
|
||||||||||||||||||||||||
Commercial
|
$
|
90,839
|
$
|
167
|
$
|
131
|
$
|
1,858
|
$
|
2,156
|
$
|
92,995
|
||||||||||||
Commercial real estate
|
363,495
|
1,526
|
704
|
5,874
|
8,104
|
371,599
|
||||||||||||||||||
Residential real estate
|
252,568
|
1,215
|
606
|
4,217
|
6,038
|
258,606
|
||||||||||||||||||
Construction real estate
|
80,629
|
291
|
85
|
8,336
|
8,712
|
89,341
|
||||||||||||||||||
Installment and other
|
28,534
|
110
|
12
|
74
|
196
|
28,730
|
||||||||||||||||||
Total loans
|
$
|
816,065
|
$
|
3,309
|
$
|
1,538
|
$
|
20,359
|
$
|
25,206
|
$
|
841,271
|
||||||||||||
|
||||||||||||||||||||||||
Nonaccrual loan classification
|
$
|
6,202
|
$
|
2,702
|
$
|
1,418
|
$
|
20,003
|
$
|
24,123
|
$
|
30,325
|
|
June 30, 2016
|
December 31, 2015
|
||||||||||||||
|
Nonaccrual
|
Loans past
due 90 days
or more and
still accruing
interest
|
Nonaccrual
|
Loans past
due 90 days
or more and
still accruing
interest
|
||||||||||||
|
(In thousands)
|
|||||||||||||||
Commercial
|
$
|
1,766
|
$
|
-
|
$
|
2,268
|
$
|
-
|
||||||||
Commercial real estate
|
8,945
|
-
|
10,737
|
-
|
||||||||||||
Residential real estate
|
5,962
|
-
|
7,821
|
-
|
||||||||||||
Construction real estate
|
7,680
|
-
|
9,353
|
-
|
||||||||||||
Installment and other
|
74
|
-
|
146
|
-
|
||||||||||||
Total
|
$
|
24,427
|
$
|
-
|
$
|
30,325
|
$
|
-
|
|
Pass
|
Special Mention
|
Substandard
|
Doubtful
|
Total
|
|||||||||||||||
June 30, 2016
|
(In thousands)
|
|||||||||||||||||||
Commercial
|
$
|
66,885
|
$
|
2,265
|
$
|
18,332
|
$
|
-
|
$
|
87,482
|
||||||||||
Commercial real estate
|
339,554
|
10,596
|
30,808
|
-
|
380,958
|
|||||||||||||||
Residential real estate
|
225,639
|
1,474
|
8,291
|
-
|
235,404
|
|||||||||||||||
Construction real estate
|
67,408
|
5,640
|
8,691
|
-
|
81,739
|
|||||||||||||||
Installment and other
|
23,601
|
-
|
198
|
-
|
23,799
|
|||||||||||||||
Total
|
$
|
723,087
|
$
|
19,975
|
$
|
66,320
|
$
|
-
|
$
|
809,382
|
||||||||||
|
||||||||||||||||||||
December 31, 2015
|
||||||||||||||||||||
Commercial
|
$
|
69,221
|
$
|
3,129
|
$
|
20,645
|
$
|
-
|
$
|
92,995
|
||||||||||
Commercial real estate
|
307,700
|
19,512
|
44,387
|
-
|
371,599
|
|||||||||||||||
Residential real estate
|
245,897
|
1,622
|
11,087
|
-
|
258,606
|
|||||||||||||||
Construction real estate
|
71,864
|
6,667
|
10,810
|
-
|
89,341
|
|||||||||||||||
Installment and other
|
28,378
|
2
|
350
|
-
|
28,730
|
|||||||||||||||
Total
|
$
|
723,060
|
$
|
30,932
|
$
|
87,279
|
$
|
-
|
$
|
841,271
|
|
Pass
|
Special Mention
|
Substandard
|
Doubtful
|
Total
|
|||||||||||||||
June 30, 2016
|
(In thousands)
|
|||||||||||||||||||
Current
|
$
|
718,723
|
$
|
19,198
|
$
|
49,657
|
$
|
-
|
$
|
787,578
|
||||||||||
Past due 30-59 days
|
1,416
|
777
|
2,226
|
-
|
4,419
|
|||||||||||||||
Past due 60-89 days
|
98
|
-
|
550
|
-
|
648
|
|||||||||||||||
Past due 90 days or more
|
2,850
|
-
|
13,887
|
-
|
16,737
|
|||||||||||||||
Total
|
$
|
723,087
|
$
|
19,975
|
$
|
66,320
|
$
|
-
|
$
|
809,382
|
||||||||||
|
||||||||||||||||||||
December 31, 2015
|
||||||||||||||||||||
Current
|
$
|
719,752
|
$
|
30,674
|
$
|
65,639
|
$
|
-
|
$
|
816,065
|
||||||||||
Past due 30-59 days
|
349
|
258
|
2,702
|
-
|
3,309
|
|||||||||||||||
Past due 60-89 days
|
109
|
-
|
1,429
|
-
|
1,538
|
|||||||||||||||
Past due 90 days or more
|
2,850
|
-
|
17,509
|
-
|
20,359
|
|||||||||||||||
Total
|
$
|
723,060
|
$
|
30,932
|
$
|
87,279
|
$
|
-
|
$
|
841,271
|
|
June 30, 2016
|
December 31, 2015
|
||||||||||||||||||||||
|
Unpaid
Principal
Balance
|
Recorded
Investment
|
Allowance
for Loan
Losses
Allocated
|
Unpaid
Principal
Balance
|
Recorded
Investment
|
Allowance
for Loan
Losses
Allocated
|
||||||||||||||||||
|
(In thousands)
|
|||||||||||||||||||||||
With no related allowance recorded:
|
||||||||||||||||||||||||
Commercial
|
$
|
13,251
|
$
|
9,593
|
$
|
13,611
|
$
|
10,137
|
||||||||||||||||
Commercial real estate
|
10,641
|
9,981
|
15,872
|
14,198
|
||||||||||||||||||||
Residential real estate
|
6,667
|
5,403
|
9,473
|
7,450
|
||||||||||||||||||||
Construction real estate
|
8,606
|
7,133
|
9,816
|
8,137
|
||||||||||||||||||||
Installment and other
|
415
|
344
|
433
|
416
|
||||||||||||||||||||
With an allowance recorded:
|
||||||||||||||||||||||||
Commercial
|
14,455
|
14,455
|
$
|
387
|
14,958
|
14,956
|
$
|
399
|
||||||||||||||||
Commercial real estate
|
8,989
|
8,989
|
1,632
|
11,050
|
11,050
|
1,295
|
||||||||||||||||||
Residential real estate
|
10,366
|
10,339
|
2,166
|
10,759
|
10,755
|
2,132
|
||||||||||||||||||
Construction real estate
|
3,574
|
3,574
|
246
|
3,688
|
3,688
|
252
|
||||||||||||||||||
Installment and other
|
569
|
569
|
130
|
636
|
636
|
138
|
||||||||||||||||||
Total
|
$
|
77,533
|
$
|
70,380
|
$
|
4,561
|
$
|
90,296
|
$
|
81,423
|
$
|
4,216
|
|
Three Months Ended
|
Six Months Ended
|
||||||||||||||||||||||||||||||
|
June 30, 2016
|
June 30, 2015
|
June 30, 2016
|
June 30, 2015
|
||||||||||||||||||||||||||||
|
Average
Recorded
Investment
|
Interest
Income
Recognized
|
Average
Recorded
Investment
|
Interest
Income
Recognized
|
Average
Recorded
Investment
|
Interest
Income
Recognized
|
Average
Recorded
Investment
|
Interest
Income
Recognized
|
||||||||||||||||||||||||
|
(In thousands)
|
|||||||||||||||||||||||||||||||
With no related allowance recorded:
|
||||||||||||||||||||||||||||||||
Commercial
|
$
|
9,679
|
$
|
157
|
$
|
11,178
|
$
|
152
|
$
|
9,820
|
$
|
314
|
$
|
11,356
|
$
|
303
|
||||||||||||||||
Commercial real estate
|
10,060
|
198
|
20,474
|
436
|
10,112
|
397
|
20,590
|
867
|
||||||||||||||||||||||||
Residential real estate
|
5,452
|
80
|
8,508
|
109
|
5,497
|
161
|
8,797
|
217
|
||||||||||||||||||||||||
Construction real estate
|
7,154
|
87
|
10,221
|
113
|
7,182
|
173
|
10,464
|
225
|
||||||||||||||||||||||||
Installment and other
|
115
|
4
|
543
|
6
|
57
|
8
|
558
|
13
|
||||||||||||||||||||||||
With an allowance recorded:
|
||||||||||||||||||||||||||||||||
Commercial
|
14,539
|
197
|
15,113
|
206
|
14,620
|
395
|
15,191
|
410
|
||||||||||||||||||||||||
Commercial real estate
|
9,019
|
98
|
16,561
|
186
|
9,049
|
195
|
16,621
|
370
|
||||||||||||||||||||||||
Residential real estate
|
10,385
|
97
|
11,621
|
111
|
10,425
|
193
|
11,662
|
221
|
||||||||||||||||||||||||
Construction real estate
|
3,587
|
45
|
4,413
|
57
|
3,605
|
90
|
4,433
|
113
|
||||||||||||||||||||||||
Installment and other
|
575
|
4
|
371
|
7
|
581
|
9
|
247
|
14
|
||||||||||||||||||||||||
Total
|
$
|
70,565
|
$
|
967
|
$
|
99,003
|
$
|
1,383
|
$
|
70,948
|
$
|
1,935
|
$
|
99,919
|
$
|
2,753
|
|
Commercial
|
Commercial real estate
|
Residential real estate
|
Construction real estate
|
Installment and other
|
Unallocated
|
Total
|
|||||||||||||||||||||
|
(In thousands)
|
|||||||||||||||||||||||||||
Three Months Ended June 30, 2016:
|
||||||||||||||||||||||||||||
Beginning balance
|
$
|
2,385
|
$
|
6,720
|
$
|
6,154
|
$
|
1,224
|
$
|
797
|
$
|
25
|
$
|
17,305
|
||||||||||||||
Provision (benefit) for loan losses
|
(210
|
)
|
1,080
|
(669
|
)
|
(201
|
)
|
(2
|
)
|
2
|
-
|
|||||||||||||||||
Charge-offs
|
(93
|
)
|
4
|
(79
|
)
|
(4
|
)
|
(64
|
)
|
-
|
(236
|
)
|
||||||||||||||||
Recoveries
|
138
|
115
|
223
|
20
|
27
|
-
|
523
|
|||||||||||||||||||||
Net charge-offs
|
45
|
119
|
144
|
16
|
(37
|
)
|
-
|
287
|
||||||||||||||||||||
Ending balance
|
$
|
2,220
|
$
|
7,919
|
$
|
5,629
|
$
|
1,039
|
$
|
758
|
$
|
27
|
$
|
17,592
|
||||||||||||||
|
||||||||||||||||||||||||||||
Three Months Ended June 30, 2015:
|
||||||||||||||||||||||||||||
Beginning balance
|
$
|
3,639
|
$
|
8,183
|
$
|
7,193
|
$
|
2,424
|
$
|
790
|
$
|
110
|
$
|
22,339
|
||||||||||||||
Provision (benefit) for loan losses
|
(1,111
|
)
|
451
|
609
|
(61
|
)
|
191
|
(79
|
)
|
-
|
||||||||||||||||||
Charge-offs
|
(261
|
)
|
(88
|
)
|
(227
|
)
|
(69
|
)
|
(141
|
)
|
-
|
(786
|
)
|
|||||||||||||||
Recoveries
|
952
|
324
|
121
|
294
|
36
|
-
|
1,727
|
|||||||||||||||||||||
Net charge-offs
|
691
|
236
|
(106
|
)
|
225
|
(105
|
)
|
-
|
941
|
|||||||||||||||||||
Ending balance
|
$
|
3,219
|
$
|
8,870
|
$
|
7,696
|
$
|
2,588
|
$
|
876
|
$
|
31
|
$
|
23,280
|
||||||||||||||
|
||||||||||||||||||||||||||||
Six Months Ended June 30, 2016:
|
||||||||||||||||||||||||||||
Beginning balance
|
$
|
2,442
|
$
|
6,751
|
$
|
6,082
|
$
|
1,143
|
$
|
940
|
$
|
34
|
$
|
17,392
|
||||||||||||||
Provision (benefit) for loan losses
|
(437
|
)
|
1,039
|
(310
|
)
|
(199
|
)
|
(86
|
)
|
(7
|
)
|
-
|
||||||||||||||||
Charge-offs
|
(275
|
)
|
-
|
(402
|
)
|
(22
|
)
|
(235
|
)
|
-
|
(934
|
)
|
||||||||||||||||
Recoveries
|
490
|
129
|
259
|
117
|
139
|
-
|
1,134
|
|||||||||||||||||||||
Net charge-offs
|
215
|
129
|
(143
|
)
|
95
|
(96
|
)
|
-
|
200
|
|||||||||||||||||||
Ending balance
|
$
|
2,220
|
$
|
7,919
|
$
|
5,629
|
$
|
1,039
|
$
|
758
|
$
|
27
|
$
|
17,592
|
||||||||||||||
Six Months Ended June 30, 2015:
|
||||||||||||||||||||||||||||
Beginning balance
|
$
|
4,031
|
$
|
8,339
|
$
|
7,939
|
$
|
3,323
|
$
|
788
|
$
|
363
|
$
|
24,783
|
||||||||||||||
Provision (benefit) for loan losses
|
(1,184
|
)
|
456
|
808
|
(21
|
)
|
273
|
(332
|
)
|
-
|
||||||||||||||||||
Charge-offs
|
(790
|
)
|
(264
|
)
|
(1,215
|
)
|
(1,031
|
)
|
(251
|
)
|
-
|
(3,551
|
)
|
|||||||||||||||
Recoveries
|
1,162
|
339
|
164
|
317
|
66
|
-
|
2,048
|
|||||||||||||||||||||
Net charge-offs
|
372
|
75
|
(1,051
|
)
|
(714
|
)
|
(185
|
)
|
-
|
(1,503
|
)
|
|||||||||||||||||
Ending balance
|
$
|
3,219
|
$
|
8,870
|
$
|
7,696
|
$
|
2,588
|
$
|
876
|
$
|
31
|
$
|
23,280
|
||||||||||||||
|
Commercial
|
Commercial real estate
|
Residential real estate
|
Construction real estate
|
Installment and other
|
Unallocated
|
Total
|
|||||||||||||||||||||
June 30, 2016
|
(In thousands)
|
|||||||||||||||||||||||||||
Allowance for loan losses allocated to:
|
||||||||||||||||||||||||||||
Loans individually evaluated for impairment
|
$
|
387
|
$
|
1,632
|
$
|
2,166
|
$
|
246
|
$
|
130
|
$
|
-
|
$
|
4,561
|
||||||||||||||
Loans collectively evaluated for impairment
|
1,833
|
6,287
|
3,463
|
793
|
628
|
27
|
13,031
|
|||||||||||||||||||||
Ending balance
|
$
|
2,220
|
$
|
7,919
|
$
|
5,629
|
$
|
1,039
|
$
|
758
|
$
|
27
|
$
|
17,592
|
||||||||||||||
Loans:
|
||||||||||||||||||||||||||||
Individually evaluated for impairment
|
$
|
24,048
|
$
|
18,970
|
$
|
15,742
|
$
|
10,707
|
$
|
913
|
$
|
-
|
$
|
70,380
|
||||||||||||||
Collectively evaluated for impairment
|
63,434
|
361,988
|
219,662
|
71,032
|
22,886
|
-
|
739,002
|
|||||||||||||||||||||
Total ending loans balance
|
$
|
87,482
|
$
|
380,958
|
$
|
235,404
|
$
|
81,739
|
$
|
23,799
|
$
|
-
|
$
|
809,382
|
||||||||||||||
|
||||||||||||||||||||||||||||
December 31, 2015
|
||||||||||||||||||||||||||||
Allowance for loan losses allocated to:
|
||||||||||||||||||||||||||||
Loans individually evaluated for impairment
|
$
|
399
|
$
|
1,295
|
$
|
2,132
|
$
|
252
|
$
|
138
|
$
|
-
|
$
|
4,216
|
||||||||||||||
Loans collectively evaluated for impairment
|
2,043
|
5,456
|
3,950
|
891
|
802
|
34
|
13,176
|
|||||||||||||||||||||
Ending balance
|
$
|
2,442
|
$
|
6,751
|
$
|
6,082
|
$
|
1,143
|
$
|
940
|
$
|
34
|
$
|
17,392
|
||||||||||||||
Loans:
|
||||||||||||||||||||||||||||
Individually evaluated for impairment
|
$
|
25,093
|
$
|
25,248
|
$
|
18,205
|
$
|
11,825
|
$
|
1,052
|
$
|
-
|
$
|
81,423
|
||||||||||||||
Collectively evaluated for impairment
|
67,902
|
346,351
|
240,401
|
77,516
|
27,678
|
-
|
759,848
|
|||||||||||||||||||||
Total ending loans balance
|
$
|
92,995
|
$
|
371,599
|
$
|
258,606
|
$
|
89,341
|
$
|
28,730
|
$
|
-
|
$
|
841,271
|
Three Months Ended June 30, 2016
|
||||||||||||||||
|
Number of
Contracts
|
Pre-
Modification
Outstanding
Recorded
Investment
|
Post-Modification Outstanding Recorded Investment
|
Specific
reserves
allocated
|
||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Installment and other
|
1
|
$
|
43
|
$
|
43
|
$
|
-
|
|||||||||
Total
|
1
|
$
|
43
|
$
|
43
|
$
|
-
|
Six Months Ended June 30, 2016
|
||||||||||||||||
|
Number of
Contracts
|
Pre-
Modification
Outstanding
Recorded
Investment
|
Post-Modification Outstanding Recorded Investment
|
Specific
reserves
allocated
|
||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Installment and other
|
1
|
$
|
43
|
$
|
43
|
$
|
-
|
|||||||||
Total
|
1
|
$
|
43
|
$
|
43
|
$
|
-
|
Three Months Ended June 30, 2015
|
||||||||||||||||
|
Number of
Contracts
|
Pre-
Modification
Outstanding
Recorded
Investment
|
Post-Modification Outstanding Recorded Investment
|
Specific
reserves
allocated
|
||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Installment and other
|
2
|
$
|
45
|
$
|
45
|
$
|
-
|
|||||||||
Total
|
2
|
$
|
45
|
$
|
45
|
$
|
-
|
Six Months Ended June 30, 2015
|
||||||||||||||||
|
Number of
Contracts
|
Pre-
Modification
Outstanding
Recorded
Investment
|
Post-Modification Outstanding Recorded Investment
|
Specific
reserves
allocated
|
||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Installment and other
|
2
|
$
|
45
|
$
|
45
|
$
|
-
|
|||||||||
Total
|
2
|
$
|
45
|
$
|
45
|
$
|
-
|
Six Months Ended June 30, 2016
|
||||||||||||
|
Number of
Contracts
|
Recorded
Investment
|
Specific
reserves
allocated
|
|||||||||
(Dollars in thousands)
|
||||||||||||
Construction real estate
|
2
|
$
|
807
|
$
|
10
|
|||||||
Total
|
2
|
$
|
807
|
$
|
10
|
Six Months Ended June 30, 2015
|
||||||||||||
|
Number of
Contracts
|
Recorded
Investment
|
Specific
reserves
allocated
|
|||||||||
(Dollars in thousands)
|
||||||||||||
Residential real estate
|
1
|
$
|
167
|
$
|
-
|
|||||||
Construction real estate
|
2
|
407
|
-
|
|||||||||
Total
|
3
|
$
|
574
|
$
|
-
|
|
June 30, 2016
|
December 31, 2015
|
||||||||||||||
|
Number of contracts
|
Amount
|
Number of contracts
|
Amount
|
||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Accrual
|
155
|
$
|
48,804
|
$
|
165
|
$
|
53,862
|
|||||||||
Nonaccrual
|
25
|
7,699
|
32
|
10,641
|
||||||||||||
Total
|
180
|
$
|
56,503
|
$
|
197
|
$
|
64,503
|
|
June 30, 2016
|
December 31, 2015
|
||||||
|
(In thousands)
|
|||||||
Balance, beginning
|
$
|
1,933
|
$
|
1,322
|
||||
Additions
|
-
|
438
|
||||||
Changes in Board composition
|
-
|
800
|
||||||
Principal payments and other reductions
|
(1,519
|
)
|
(627
|
)
|
||||
Balance, ending
|
$
|
414
|
$
|
1,933
|
|
June 30, 2016
|
December 31, 2015
|
||||||
|
(In thousands)
|
|||||||
Mortgage loan portfolios serviced for:
|
||||||||
Federal National Mortgage Association ("Fannie Mae")
|
$
|
836,457
|
$
|
865,568
|
||||
Other investors
|
4
|
16
|
||||||
Totals
|
$
|
836,461
|
$
|
865,584
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||
|
2016
|
2015
|
2016
|
2015
|
||||||||||||
|
(In thousands)
|
|||||||||||||||
Balance at beginning of period
|
$
|
8,614
|
$
|
9,318
|
$
|
8,777
|
$
|
9,470
|
||||||||
Servicing rights originated and capitalized
|
197
|
205
|
355
|
448
|
||||||||||||
Amortization
|
(396
|
)
|
(379
|
)
|
(717
|
)
|
(774
|
)
|
||||||||
Balance at end of period
|
$
|
8,415
|
$
|
9,144
|
$
|
8,415
|
$
|
9,144
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||
|
2016
|
2015
|
2016
|
2015
|
||||||||||||
|
(In thousands)
|
|||||||||||||||
Balance at beginning of period
|
$
|
(2,745
|
)
|
$
|
(2,388
|
)
|
$
|
(1,895
|
)
|
$
|
(2,017
|
)
|
||||
Aggregate reduction credited to operations
|
241
|
786
|
451
|
1,384
|
||||||||||||
Aggregate additions credited to operations
|
(600
|
)
|
-
|
(1,660
|
)
|
(969
|
)
|
|||||||||
Balance at end of period
|
$
|
(3,104
|
)
|
$
|
(1,602
|
)
|
$
|
(3,104
|
)
|
$
|
(1,602
|
)
|
|
June 30, 2016
|
|
December 31, 2015
|
||
Weighted Average Public Securities Association (PSA) speed
|
|
300.03%
|
|
|
213.25%
|
Weighted Average Discount rate
|
|
11.20
|
|
|
10.50
|
Weighted Average Earnings rate
|
|
0.98
|
|
|
1.73
|
|
June 30, 2016
|
December 31, 2015
|
||||||
|
(In thousands)
|
|||||||
Commercial real estate
|
$
|
1,510
|
$
|
781
|
||||
Residential real estate
|
2,465
|
3,024
|
||||||
Construction real estate
|
4,678
|
4,541
|
||||||
Total
|
$
|
8,653
|
$
|
8,346
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||
|
2016
|
2015
|
2016
|
2015
|
||||||||||||
|
(In thousands)
|
|||||||||||||||
Balance at beginning of period
|
$
|
8,203
|
$
|
12,200
|
$
|
8,346
|
$
|
13,980
|
||||||||
Transfers in at fair value
|
1,342
|
637
|
2,885
|
2,058
|
||||||||||||
Write-down of value
|
-
|
(23
|
)
|
-
|
(78
|
)
|
||||||||||
Gain (loss) on disposal
|
538
|
156
|
751
|
403
|
||||||||||||
Cash received upon disposition
|
(1,430
|
)
|
(2,226
|
)
|
(2,358
|
)
|
(5,619
|
)
|
||||||||
Sales financed by loans
|
-
|
(297
|
)
|
(971
|
)
|
(297
|
)
|
|||||||||
Balance at end of period
|
$
|
8,653
|
$
|
10,447
|
$
|
8,653
|
$
|
10,447
|
|
June 30, 2016
|
December 31, 2015
|
||||||
|
(In thousands )
|
|||||||
Demand deposits, noninterest bearing
|
$
|
91,759
|
$
|
75,867
|
||||
NOW and money market accounts
|
512,606
|
511,423
|
||||||
Savings deposits
|
394,721
|
380,045
|
||||||
Time certificates, $250,000 or more
|
33,097
|
39,148
|
||||||
Other time certificates
|
232,111
|
247,475
|
||||||
Total
|
$
|
1,264,294
|
$
|
1,253,958
|
Maturity Date
|
Rate
|
Type
|
Principal due
|
June 30, 2016
|
December 31, 2015
|
|||||||||
|
|
|
(In thousands)
|
|||||||||||
April 27, 2021
|
6.343
|
%
|
Fixed
|
At maturity
|
2,300
|
2,300
|
||||||||
|
|
Total
|
$
|
2,300
|
$
|
2,300
|
|
Trust I
|
Trust III
|
Trust IV
|
Trust V
|
||||||||||||
|
(Dollars in thousands)
|
|||||||||||||||
Date of Issue
|
March 23, 2000
|
May 11, 2004
|
June 29, 2005
|
September 21, 2006
|
||||||||||||
Amount of trust preferred securities issued
|
$
|
10,000
|
$
|
6,000
|
$
|
10,000
|
$
|
10,000
|
||||||||
Rate on trust preferred securities
|
10.875
|
%
|
3.3731% (variable)
|
6.88
|
%
|
2.3025% (variable)
|
||||||||||
Maturity
|
March 8, 2030
|
September 8, 2034
|
November 23, 2035
|
December 15, 2036
|
||||||||||||
Date of first redemption
|
March 8, 2010
|
September 8, 2009
|
August 23, 2010
|
September 15, 2011
|
||||||||||||
Common equity securities issued
|
$
|
310
|
$
|
186
|
$
|
310
|
$
|
310
|
||||||||
Junior subordinated deferrable interest debentures owed
|
$
|
10,310
|
$
|
6,186
|
$
|
10,310
|
$
|
10,310
|
||||||||
Rate on junior subordinated deferrable interest debentures
|
10.875
|
%
|
3.3731% (variable)
|
6.88
|
%
|
2.3025% (variable)
|
|
Contract Amount
|
|||||||
|
June 30, 2016
|
December 31, 2015
|
||||||
|
(In thousands)
|
|||||||
Unfunded commitments under lines of credit
|
$
|
97,596
|
$
|
108,966
|
||||
Commercial and standby letters of credit
|
4,874
|
7,608
|
||||||
Commitments to make loans
|
8,090
|
5,105
|
|
Number
of shares
issued
|
Dividend rate
|
Liquidation
value per
share
|
Original
cost, in
thousands
|
||||||||||||
Series A cumulative perpetual preferred shares
|
35,539
|
5% for first 5 years; thereafter 9%
|
$
|
1,000.00
|
$
|
33,437
|
||||||||||
Series B cumulative perpetual preferred shares
|
1,777
|
9
|
%
|
1,000.00
|
2,102
|
|
June 30, 2016
|
December 31, 2015
|
||||||
|
(In thousands)
|
|||||||
Fixed rate (ranging from 2.4% to 13.9%)
|
$
|
15,851
|
$
|
11,913
|
||||
Adjustable rate
|
86,619
|
104,661
|
||||||
Total
|
$
|
102,470
|
$
|
116,574
|
June 30, 2016
|
Total
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
|
(In thousands)
|
|||||||||||||||
Financial Assets:
|
||||||||||||||||
Investment securities available for sale:
|
||||||||||||||||
U.S. Government sponsored agency
|
$
|
63,511
|
$
|
-
|
$
|
63,511
|
$
|
-
|
||||||||
States and political subdivision
|
33,324
|
-
|
33,324
|
-
|
||||||||||||
Mortgage backed security
|
200,917
|
-
|
200,917
|
-
|
||||||||||||
Collateralized mortgage obligation
|
36,075
|
-
|
36,075
|
-
|
||||||||||||
Commercial mortgage backed security
|
89,483
|
-
|
89,483
|
-
|
||||||||||||
SBA Pools
|
723
|
-
|
723
|
-
|
||||||||||||
Asset backed security
|
39,437
|
-
|
39,437
|
-
|
||||||||||||
Interest rate lock commitments, mandatory forward delivery commitments and pair offs
|
302
|
-
|
302
|
-
|
||||||||||||
Total
|
$
|
463,772
|
$
|
-
|
$
|
463,772
|
$
|
-
|
December 31, 2015
|
||||||||||||||||
|
||||||||||||||||
Financial Assets:
|
||||||||||||||||
Investment securities available for sale:
|
||||||||||||||||
U.S. Government sponsored agency
|
$
|
69,584
|
$
|
-
|
$
|
69,584
|
$
|
-
|
||||||||
States and political subdivision
|
3,576
|
-
|
3,576
|
-
|
||||||||||||
Mortgage backed security
|
121,597
|
-
|
121,597
|
-
|
||||||||||||
Collateralized mortgage obligation
|
39,921
|
-
|
39,921
|
-
|
||||||||||||
Commercial mortgage backed security
|
41,119
|
-
|
41,119
|
-
|
||||||||||||
SBA Pools
|
750
|
-
|
750
|
-
|
||||||||||||
Asset backed securities
|
39,493
|
-
|
39,493
|
-
|
||||||||||||
Interest rate lock commitments, mandatory forward delivery commitments and pair offs
|
225
|
-
|
225
|
-
|
||||||||||||
Total
|
$
|
316,265
|
$
|
-
|
$
|
316,265
|
$
|
-
|
`
|
Total
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
|
(In thousands)
|
|||||||||||||||
June 30, 2016
|
||||||||||||||||
Financial Assets
|
||||||||||||||||
Impaired loans
|
$
|
33,365
|
$
|
-
|
$
|
-
|
$
|
33,365
|
||||||||
MSRs
|
5,311
|
-
|
-
|
5,311
|
||||||||||||
|
||||||||||||||||
December 31, 2015
|
||||||||||||||||
Financial Assets
|
||||||||||||||||
Impaired loans
|
$
|
36,870
|
$
|
-
|
$
|
-
|
$
|
36,870
|
||||||||
MSRs
|
6,905
|
-
|
-
|
6,905
|
||||||||||||
Non-Financial Assets
|
||||||||||||||||
OREO
|
2,231
|
-
|
-
|
2,231
|
|
Fair value
|
Valuation
Technique(s)
|
Unobservable Input(s)
|
Adjustment Range,
Weighted Average
|
|||
June 30, 2016
|
(In thousands)
|
|
|
|
|||
Impaired loans
|
|
|
|
||||
Commercial
|
$
|
14,068
|
Sales comparison
|
Adjustments for differences of comparable sales
|
(0.00)% to (13.92)%, (5.79)%
|
||
Commercial real estate
|
7,357
|
Sales comparison
|
Adjustments for differences of comparable sales
|
(0.00) to (6.53), (5.60)
|
|||
Residential real estate
|
8,173
|
Sales comparison
|
Adjustments for differences of comparable sales
|
(3.13) to (8.70), (5.91)
|
|||
Construction real estate
|
3,328
|
Sales comparison
|
Adjustments for differences of comparable sales
|
(4.00) to (7.50), (6.17)
|
|||
Installment and other
|
439
|
Sales comparison
|
Adjustments for differences of comparable sales
|
(4.13) to (8.00), (6.45)
|
|||
Total impaired loans
|
$
|
33,365
|
|
|
|
December 31, 2015
|
|
|
|
||||
Impaired loans
|
|
|
|
||||
Commercial
|
$
|
14,557
|
Sales comparison
|
Adjustments for differences of comparable sales
|
(0.00)% to (13.92)%, (5.70)%
|
||
Commercial real estate
|
9,755
|
Sales comparison
|
Adjustments for differences of comparable sales
|
(4.25) to (7.62), (5.65)
|
|||
Residential real estate
|
8,624
|
Sales comparison
|
Adjustments for differences of comparable sales
|
(0.00) to (8.70), (5.29)
|
|||
Construction real estate
|
3,436
|
Sales comparison
|
Adjustments for differences of comparable sales
|
(4.00) to (7.25), (6.14)
|
|||
Installment and other
|
498
|
Sales comparison
|
Adjustments for differences of comparable sales
|
(4.13) to (9.50), (6.52)
|
|||
Total impaired loans
|
$
|
36,870
|
|
|
|
||
OREO
|
|
|
|
||||
Commercial real estate
|
$
|
217
|
Sales comparison
|
Adjustments for differences of comparable sales
|
(14.55) to (14.55), (14.55)
|
||
Residential real estate
|
1,493
|
Sales comparison
|
Adjustments for differences of comparable sales
|
(8.47) to (91.19) (21.76)
|
|||
Construction real estate
|
521
|
Sales comparison
|
Adjustments for differences of comparable sales
|
(10.70) to (67.45) (57.32)
|
|||
Total OREO
|
$
|
2,231
|
|
|
|
|
Carrying amount
|
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||||
|
(In thousands)
|
|||||||||||||||||||
June 30, 2016
|
||||||||||||||||||||
Financial assets:
|
||||||||||||||||||||
Cash and due from banks
|
$
|
16,734
|
$
|
16,734
|
$
|
-
|
$
|
-
|
$
|
16,734
|
||||||||||
Interest-bearing deposits with banks
|
65,769
|
65,769
|
-
|
-
|
65,769
|
|||||||||||||||
Securities purchased under resell agreements
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Investments:
|
||||||||||||||||||||
Available for sale
|
463,470
|
-
|
463,470
|
-
|
463,470
|
|||||||||||||||
Held to maturity
|
8,906
|
-
|
8,596
|
-
|
8,596
|
|||||||||||||||
Non-marketable equity securities
|
3,856
|
N/A
|
N/A
|
N/A
|
N/A
|
|||||||||||||||
Loans held for sale
|
2,366
|
-
|
-
|
2,366
|
2,366
|
|||||||||||||||
Loans, net
|
790,370
|
-
|
-
|
803,118
|
803,118
|
|||||||||||||||
Accrued interest receivable on securities
|
1,724
|
-
|
1,724
|
-
|
1,724
|
|||||||||||||||
Accrued interest receivable on loans
|
2,424
|
-
|
-
|
2,424
|
2,424
|
|||||||||||||||
Accrued interest receivable other
|
1,557
|
1,557
|
1,557
|
|||||||||||||||||
Interest rate lock commitments, mandatory forward delivery commitments and pair offs
|
302
|
-
|
302
|
-
|
302
|
|||||||||||||||
|
||||||||||||||||||||
Off-balance-sheet instruments:
|
||||||||||||||||||||
Loan commitments and standby letters of credit
|
$
|
11
|
$
|
-
|
$
|
11
|
$
|
-
|
$
|
11
|
||||||||||
|
||||||||||||||||||||
Financial liabilities:
|
||||||||||||||||||||
Non-interest bearing deposits
|
$
|
168,666
|
$
|
168,666
|
$
|
-
|
$
|
-
|
$
|
168,666
|
||||||||||
Interest bearing deposits
|
1,095,628
|
-
|
1,096,629
|
-
|
1,096,629
|
|||||||||||||||
Borrowings
|
2,300
|
-
|
2,834
|
-
|
2,834
|
|||||||||||||||
Junior subordinated debt
|
37,116
|
-
|
-
|
20,665
|
20,665
|
|||||||||||||||
Accrued interest payable
|
8,717
|
-
|
368
|
8,349
|
8,717
|
December 31, 2015
|
||||||||||||||||||||
Financial assets:
|
||||||||||||||||||||
Cash and due from banks
|
$
|
13,506
|
$
|
13,506
|
$
|
-
|
$
|
-
|
$
|
13,506
|
||||||||||
Interest-bearing deposits with banks
|
151,049
|
151,049
|
-
|
-
|
151,049
|
|||||||||||||||
Securities purchased under resell agreements
|
24,320
|
24,320
|
-
|
-
|
24,320
|
|||||||||||||||
Investments:
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Available for sale
|
316,040
|
-
|
316,040
|
-
|
316,040
|
|||||||||||||||
Held to maturity
|
8,986
|
-
|
8,988
|
-
|
8,988
|
|||||||||||||||
Non-marketable equity securities
|
3,854
|
N/A
|
N/A
|
N/A
|
N/A
|
|||||||||||||||
Loans held for sale
|
3,041
|
-
|
-
|
3,041
|
3,041
|
|||||||||||||||
Loans, net
|
822,396
|
-
|
-
|
830,555
|
830,555
|
|||||||||||||||
Accrued interest receivable on securities
|
1,028
|
-
|
1,028
|
-
|
1,028
|
|||||||||||||||
Accrued interest receivable on loans
|
3,795
|
-
|
-
|
3,795
|
3,795
|
|||||||||||||||
Accrued interest receivable other
|
208
|
-
|
-
|
208
|
208
|
|||||||||||||||
Interest rate lock commitments, mandatory forward delivery commitments and pair offs
|
225
|
-
|
225
|
-
|
225
|
|||||||||||||||
|
||||||||||||||||||||
Off-balance-sheet instruments:
|
||||||||||||||||||||
Loan commitments and standby letters of credit
|
$
|
20
|
$
|
-
|
$
|
20
|
$
|
-
|
$
|
20
|
||||||||||
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Financial liabilities:
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Non-interest bearing deposits
|
$
|
152,888
|
$
|
152,888
|
$
|
-
|
$
|
-
|
$
|
152,888
|
||||||||||
Interest bearing deposits
|
1,101,070
|
-
|
1,099,937
|
-
|
1,099,937
|
|||||||||||||||
Long-term borrowings
|
2,300
|
-
|
2,642
|
-
|
2,642
|
|||||||||||||||
Junior subordinated debt
|
37,116
|
-
|
-
|
20,461
|
20,461
|
|||||||||||||||
Accrued interest payable
|
7,370
|
-
|
7,370
|
-
|
7,370
|
|
Actual
|
For Capital Adequacy
Purposes
|
To be well capitalized
under prompt
corrective action
provisions
|
Minimum Levels
Under Order
Provisions
|
||||||||||||||||||||||||||||
|
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
||||||||||||||||||||||||
|
(Dollars in thousands)
|
|||||||||||||||||||||||||||||||
June 30, 2016
|
||||||||||||||||||||||||||||||||
Total capital (to risk-weighted assets):
|
||||||||||||||||||||||||||||||||
Consolidated
|
$
|
127,822
|
14.2159
|
%
|
$
|
71,932
|
8.00
|
%
|
N/A
|
N/A
|
N/A
|
N/A
|
||||||||||||||||||||
Bank only
|
144,416
|
16.1336
|
%
|
71,610
|
8.00
|
%
|
$
|
89,513
|
10.00
|
%
|
$
|
98,464
|
11.00
|
%
|
||||||||||||||||||
Tier 1 capital (to risk weighted assets):
|
||||||||||||||||||||||||||||||||
Consolidated
|
100,756
|
11.2057
|
%
|
53,949
|
6.00
|
%
|
N/A
|
N/A
|
N/A
|
N/A
|
||||||||||||||||||||||
Bank only
|
133,141
|
14.8740
|
%
|
53,708
|
6.00
|
%
|
71,610
|
8.00
|
%
|
N/A
|
N/A
|
|||||||||||||||||||||
Common Equity Tier 1 Capital (to risk weighted assets):
|
||||||||||||||||||||||||||||||||
Consolidated
|
43,669
|
4.8567
|
%
|
40,462
|
4.50
|
%
|
N/A
|
N/A
|
N/A
|
N/A
|
||||||||||||||||||||||
Bank only
|
133,141
|
14.8740
|
%
|
40,281
|
4.50
|
%
|
58,183
|
6.50
|
%
|
N/A
|
N/A
|
|||||||||||||||||||||
Tier 1 leverage (to average assets):
|
||||||||||||||||||||||||||||||||
Consolidated
|
100,756
|
7.1273
|
%
|
56,546
|
4.00
|
%
|
N/A
|
N/A
|
N/A
|
N/A
|
||||||||||||||||||||||
Bank only
|
133,141
|
9.4775
|
%
|
56,193
|
4.00
|
%
|
70,241
|
5.00
|
%
|
112,385
|
8.00
|
%
|
|
Actual
|
For Capital Adequacy
Purposes
|
To be well capitalized
under prompt
corrective action
provisions
|
Minimum Levels
Under Order
Provisions
|
||||||||||||||||||||||||||||
|
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
||||||||||||||||||||||||
|
(Dollars in thousands)
|
|||||||||||||||||||||||||||||||
December 31, 2015
|
||||||||||||||||||||||||||||||||
Total capital (to risk-weighted assets):
|
||||||||||||||||||||||||||||||||
Consolidated
|
$
|
128,272
|
14.10
|
%
|
$
|
72,774
|
8.00
|
%
|
N/A
|
N/A
|
N/A
|
N/A
|
||||||||||||||||||||
Bank only
|
141,486
|
15.62
|
%
|
72,452
|
8.00
|
%
|
$
|
90,565
|
10.00
|
%
|
$
|
99,621
|
11.00
|
%
|
||||||||||||||||||
Tier 1 capital (to risk weighted assets):
|
||||||||||||||||||||||||||||||||
Consolidated
|
101,263
|
11.13
|
%
|
54,580
|
6.00
|
%
|
N/A
|
N/A
|
N/A
|
N/A
|
||||||||||||||||||||||
Bank only
|
130,084
|
14.36
|
%
|
54,339
|
6.00
|
%
|
72,452
|
8.00
|
%
|
N/A
|
N/A
|
|||||||||||||||||||||
Common Equity Tier 1 Capital (to risk weighted assets):
|
||||||||||||||||||||||||||||||||
Consolidated
|
44,080
|
4.85
|
%
|
40,935
|
4.50
|
%
|
N/A
|
N/A
|
N/A
|
N/A
|
||||||||||||||||||||||
Bank only
|
130,084
|
14.36
|
%
|
40,754
|
4.50
|
%
|
58,867
|
6.50
|
%
|
N/A
|
N/A
|
|||||||||||||||||||||
Tier 1 leverage (to average assets):
|
||||||||||||||||||||||||||||||||
Consolidated
|
101,263
|
7.11
|
%
|
56,943
|
4.00
|
%
|
N/A
|
N/A
|
N/A
|
N/A
|
||||||||||||||||||||||
Bank only
|
130,084
|
9.18
|
%
|
56,685
|
4.00
|
%
|
70,856
|
5.00
|
%
|
113,370
|
8.00
|
%
|
|
Three Months Ended June 30,
|
|||||||||||||||||||||||
|
2016
|
2015
|
||||||||||||||||||||||
|
Average
Balance
|
Interest
|
Yield
/Rate
|
Average
Balance
|
Interest
|
Yield
/Rate
|
||||||||||||||||||
|
(Dollars in thousands)
|
|||||||||||||||||||||||
Interest-earning Assets:
|
||||||||||||||||||||||||
Loans(1)
|
$
|
818,009
|
$
|
9,989
|
4.91
|
%
|
$
|
877,124
|
$
|
10,872
|
4.97
|
%
|
||||||||||||
Taxable investment securities
|
413,416
|
1,875
|
1.82
|
%
|
269,847
|
823
|
1.22
|
%
|
||||||||||||||||
Investment securities exempt from federal income taxes
|
28,775
|
131
|
1.83
|
%
|
7,430
|
45
|
2.43
|
%
|
||||||||||||||||
Securities purchased under resell agreements
|
-
|
-
|
0.00
|
%
|
16,465
|
29
|
0.71
|
%
|
||||||||||||||||
Other interest-bearing deposits
|
96,890
|
123
|
0.51
|
%
|
207,387
|
134
|
0.26
|
%
|
||||||||||||||||
Non-marketable equity securities
|
3,999
|
55
|
5.53
|
%
|
4,272
|
52
|
4.88
|
%
|
||||||||||||||||
Total interest-earning assets
|
1,361,089
|
12,173
|
3.60
|
%
|
1,382,525
|
11,955
|
3.47
|
%
|
||||||||||||||||
Non-interest-earning assets
|
64,586
|
62,946
|
||||||||||||||||||||||
Total assets
|
$
|
1,425,675
|
$
|
1,445,471
|
||||||||||||||||||||
Interest-bearing Liabilities:
|
||||||||||||||||||||||||
Deposits:
|
||||||||||||||||||||||||
NOW deposits
|
$
|
172,802
|
$
|
25
|
0.06
|
%
|
$
|
171,796
|
$
|
28
|
0.07
|
%
|
||||||||||||
Money market deposits
|
273,675
|
46
|
0.07
|
%
|
290,058
|
91
|
0.13
|
%
|
||||||||||||||||
Savings deposits
|
393,426
|
83
|
0.08
|
%
|
370,359
|
36
|
0.04
|
%
|
||||||||||||||||
Time deposits over $100,000
|
146,000
|
271
|
0.75
|
%
|
173,684
|
378
|
0.87
|
%
|
||||||||||||||||
Time deposits under $100,000
|
122,585
|
166
|
0.54
|
%
|
142,307
|
220
|
0.62
|
%
|
||||||||||||||||
Long-term borrowings
|
2,300
|
37
|
6.47
|
%
|
2,300
|
36
|
6.28
|
%
|
||||||||||||||||
Long-term capital lease obligation
|
2,211
|
-
|
0.00
|
%
|
2,211
|
-
|
0.00
|
%
|
||||||||||||||||
Junior subordinated debt
|
37,116
|
730
|
7.91
|
%
|
37,116
|
683
|
7.38
|
%
|
||||||||||||||||
Total interest-bearing liabilities
|
1,150,115
|
1,358
|
0.47
|
%
|
1,189,831
|
1,472
|
0.50
|
%
|
||||||||||||||||
Demand deposits, noninterest-bearing
|
163,202
|
146,391
|
||||||||||||||||||||||
Other noninterest-bearing liabilities
|
29,022
|
25,684
|
||||||||||||||||||||||
|
||||||||||||||||||||||||
Stockholders' equity, including stock owned by ESOP
|
83,336
|
83,565
|
||||||||||||||||||||||
Total liabilities and stockholders equity
|
$
|
1,425,675
|
$
|
1,445,471
|
||||||||||||||||||||
Net interest income/interest rate spread (2)
|
$
|
10,815
|
3.12
|
%
|
$
|
10,483
|
2.97
|
%
|
||||||||||||||||
Net interest margin (3)
|
3.05
|
%
|
2.91
|
%
|
(1) |
Average loans include nonaccrual loans of $21.0 million and $35.4 million for the three months ended June 30, 2016 and 2015, respectively. Interest income includes loan origination fees of $385 thousand and $458 thousand for the three months ended June 30, 2016 and 2015, respectively.
|
(2) |
Interest rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities.
|
|
Six Months Ended June 30,
|
|||||||||||||||||||||||
|
2016
|
2015
|
||||||||||||||||||||||
|
Average
Balance
|
Interest
|
Yield
/Rate
|
Average
Balance
|
Interest
|
Yield
/Rate
|
||||||||||||||||||
|
(Dollars in thousands)
|
|||||||||||||||||||||||
Interest-earning Assets:
|
||||||||||||||||||||||||
Loans(1)
|
$
|
823,902
|
$
|
20,119
|
4.91
|
%
|
$
|
891,303
|
$
|
21,980
|
4.97
|
%
|
||||||||||||
Taxable investment securities
|
394,930
|
3,606
|
1.84
|
%
|
254,417
|
1,762
|
1.40
|
%
|
||||||||||||||||
Investment securities exempt from federal income taxes
|
16,101
|
148
|
1.85
|
%
|
7,444
|
90
|
2.44
|
%
|
||||||||||||||||
Securities purchased under resell agreements
|
6,238
|
45
|
1.45
|
%
|
18,437
|
67
|
0.73
|
%
|
||||||||||||||||
Other interest-bearing deposits
|
112,924
|
273
|
0.49
|
%
|
207,207
|
257
|
0.25
|
%
|
||||||||||||||||
Non-marketable equity securities
|
3,999
|
108
|
5.43
|
%
|
4,574
|
105
|
4.63
|
%
|
||||||||||||||||
Total interest-earning assets
|
1,358,094
|
24,299
|
3.60
|
%
|
1,383,382
|
24,261
|
3.54
|
%
|
||||||||||||||||
Non-interest-earning assets
|
60,899
|
64,201
|
||||||||||||||||||||||
Total assets
|
$
|
1,418,993
|
$
|
1,447,583
|
||||||||||||||||||||
Interest-bearing Liabilities:
|
||||||||||||||||||||||||
Deposits:
|
||||||||||||||||||||||||
NOW deposits
|
$
|
173,343
|
$
|
47
|
0.05
|
%
|
$
|
159,462
|
$
|
53
|
0.07
|
%
|
||||||||||||
Money market deposits
|
269,385
|
94
|
0.07
|
%
|
292,304
|
104
|
0.07
|
%
|
||||||||||||||||
Savings deposits
|
388,738
|
164
|
0.08
|
%
|
368,625
|
155
|
0.08
|
%
|
||||||||||||||||
Time deposits over $100,000
|
148,967
|
563
|
0.76
|
%
|
178,923
|
776
|
0.87
|
%
|
||||||||||||||||
Time deposits under $100,000
|
124,936
|
346
|
0.56
|
%
|
145,872
|
454
|
0.63
|
%
|
||||||||||||||||
Short-term borrowings
|
-
|
-
|
0.00
|
%
|
9,006
|
139
|
3.11
|
%
|
||||||||||||||||
Long-term borrowings
|
2,300
|
73
|
6.38
|
%
|
2,300
|
73
|
6.40
|
%
|
||||||||||||||||
Long-term capital lease obligation
|
2,211
|
-
|
0.00
|
%
|
2,211
|
-
|
0.00
|
%
|
||||||||||||||||
Junior subordinated debt
|
37,116
|
1,437
|
7.79
|
%
|
37,116
|
1,315
|
7.14
|
%
|
||||||||||||||||
Total interest-bearing liabilities
|
1,146,997
|
2,724
|
0.48
|
%
|
1,195,818
|
3,069
|
0.52
|
%
|
||||||||||||||||
Demand deposits, noninterest-bearing
|
160,513
|
144,023
|
||||||||||||||||||||||
Other noninterest-bearing liabilities
|
29,546
|
24,274
|
||||||||||||||||||||||
|
||||||||||||||||||||||||
Stockholders' equity, including stock owned by ESOP
|
81,938
|
83,467
|
||||||||||||||||||||||
Total liabilities and stockholders equity
|
$
|
1,418,993
|
$
|
1,447,583
|
||||||||||||||||||||
Net interest income/interest rate spread (2)
|
$
|
21,575
|
3.12
|
%
|
$
|
21,192
|
3.02
|
%
|
||||||||||||||||
Net interest margin (3)
|
3.06
|
%
|
2.95
|
%
|
(1) |
Average loans include nonaccrual loans of $23.0 million and $36.9 million for the six months ended June 30, 2016 and 2015, respectively. Interest income includes loan origination fees of $740 thousand and $814 thousand for the six months ended June 30, 2016 and 2015, respectively.
|
(2) |
Interest rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities.
|
(3) |
Net interest margin represents net interest income as a percentage of average interest-earning assets.
|
|
Three Months Ended June 30,
|
|||||||||||
|
2016 Compared to 2015
|
|||||||||||
|
Change Due to
Volume
|
Change Due to
Rate
|
Total Change
|
|||||||||
|
(In thousands)
|
|||||||||||
Interest-earning Assets:
|
||||||||||||
Loans
|
$
|
(733
|
)
|
$
|
(150
|
)
|
$
|
(883
|
)
|
|||
Taxable investment securities
|
438
|
614
|
1,052
|
|||||||||
Investment securities exempt from federal income taxes
|
129
|
(43
|
)
|
86
|
||||||||
Securities purchased under resell agreements
|
(29
|
)
|
-
|
(29
|
)
|
|||||||
Other interest bearing deposits
|
(71
|
)
|
60
|
(11
|
)
|
|||||||
Non-marketable equity securities
|
(3
|
)
|
6
|
3
|
||||||||
Total (decrease) increase in interest income
|
$
|
(269
|
)
|
$
|
487
|
$
|
218
|
|||||
Interest-bearing Liabilities:
|
||||||||||||
Now deposits
|
$
|
-
|
$
|
(3
|
)
|
$
|
(3
|
)
|
||||
Money market deposits
|
(5
|
)
|
(40
|
)
|
(45
|
)
|
||||||
Savings deposits
|
2
|
45
|
47
|
|||||||||
Time deposits over $100,000
|
(60
|
)
|
(47
|
)
|
(107
|
)
|
||||||
Time deposits under $100,000
|
(30
|
)
|
(24
|
)
|
(54
|
)
|
||||||
Long-term borrowings
|
-
|
1
|
1
|
|||||||||
Capital long-term lease obligation
|
-
|
-
|
-
|
|||||||||
Junior subordinated debt
|
-
|
47
|
47
|
|||||||||
Total increase (decrease) in interest expense
|
$
|
(93
|
)
|
$
|
(21
|
)
|
$
|
(114
|
)
|
|||
Increase (decrease) in net interest income
|
$
|
(176
|
)
|
$
|
508
|
$
|
332
|
|
Six Months Ended June 30,
|
|||||||||||
|
2016 Compared to 2015
|
|||||||||||
|
Change Due to
Volume
|
Change Due to
Rate
|
Total Change
|
|||||||||
|
(In thousands)
|
|||||||||||
Interest-earning Assets:
|
||||||||||||
Loans
|
$
|
(1,662
|
)
|
$
|
(199
|
)
|
$
|
(1,861
|
)
|
|||
Taxable investment securities
|
973
|
871
|
1,844
|
|||||||||
Investment securities exempt from federal income taxes
|
105
|
(47
|
)
|
58
|
||||||||
Securities purchased under resell agreements
|
(44
|
)
|
22
|
(22
|
)
|
|||||||
Other interest bearing deposits
|
(117
|
)
|
133
|
16
|
||||||||
Non-marketable equity securities
|
(13
|
)
|
16
|
3
|
||||||||
Total (decrease) increase in interest income
|
$
|
(758
|
)
|
$
|
796
|
$
|
38
|
|||||
Interest-bearing Liabilities:
|
||||||||||||
Now deposits
|
$
|
5
|
$
|
(11
|
)
|
$
|
(6
|
)
|
||||
Money market deposits
|
(8
|
)
|
(2
|
)
|
(10
|
)
|
||||||
Savings deposits
|
8
|
1
|
9
|
|||||||||
Time deposits over $100,000
|
(130
|
)
|
(83
|
)
|
(213
|
)
|
||||||
Time deposits under $100,000
|
(65
|
)
|
(43
|
)
|
(108
|
)
|
||||||
Short-term borrowings
|
(139
|
)
|
-
|
(139
|
)
|
|||||||
Long-term borrowings
|
-
|
-
|
-
|
|||||||||
Capital long-term lease obligation
|
-
|
-
|
-
|
|||||||||
Junior subordinated debt
|
-
|
122
|
122
|
|||||||||
Total increase (decrease) in interest expense
|
$
|
(329
|
)
|
$
|
(16
|
)
|
$
|
(345
|
)
|
|||
Increase (decrease) in net interest income
|
$
|
(429
|
)
|
$
|
812
|
$
|
383
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||||||||||
|
2016
|
2015
|
Net difference
|
2016
|
2015
|
Net difference
|
||||||||||||||||||
|
(In thousands)
|
|||||||||||||||||||||||
Noninterest income:
|
||||||||||||||||||||||||
Mortgage loan servicing fees
|
$
|
540
|
$
|
583
|
$
|
(43
|
)
|
$
|
1,090
|
$
|
1,171
|
$
|
(81
|
)
|
||||||||||
Trust and investment services fees
|
614
|
686
|
(72
|
)
|
1,246
|
1,348
|
(102
|
)
|
||||||||||||||||
Service charges on deposits
|
272
|
339
|
(66
|
)
|
566
|
683
|
(116
|
)
|
||||||||||||||||
Net gain on sale of OREO
|
585
|
166
|
419
|
843
|
429
|
414
|
||||||||||||||||||
Net gain on sale of loans
|
650
|
736
|
(87
|
)
|
1,223
|
1,537
|
(315
|
)
|
||||||||||||||||
Net gain (loss) on sale of securities
|
54
|
-
|
54
|
54
|
1
|
53
|
||||||||||||||||||
Other fees
|
893
|
1,093
|
(200
|
)
|
1,748
|
1,998
|
(250
|
)
|
||||||||||||||||
Other noninterest income
|
149
|
(66
|
)
|
215
|
201
|
241
|
(40
|
)
|
||||||||||||||||
Total noninterest income
|
$
|
3,757
|
$
|
3,537
|
$
|
221
|
$
|
6,971
|
$
|
7,408
|
$
|
(436
|
)
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||||||||||
|
2016
|
2015
|
Net difference
|
2016
|
2015
|
Net difference
|
||||||||||||||||||
|
(In thousands)
|
|||||||||||||||||||||||
Noninterest expenses:
|
||||||||||||||||||||||||
Salaries and employee benefits
|
$
|
6,558
|
$
|
6,238
|
$
|
320
|
$
|
12,924
|
$
|
12,428
|
$
|
496
|
||||||||||||
Occupancy
|
904
|
930
|
(26
|
)
|
1,743
|
1,900
|
(157
|
)
|
||||||||||||||||
Data processing
|
700
|
724
|
(24
|
)
|
1,360
|
1,411
|
(51
|
)
|
||||||||||||||||
Legal, professional, and accounting fees
|
2,051
|
2,095
|
(44
|
)
|
3,410
|
4,044
|
(634
|
)
|
||||||||||||||||
Amortization and valuation of MSRs
|
754
|
(407
|
)
|
1,161
|
1,925
|
359
|
1,566
|
|||||||||||||||||
Other noninterest expenses:
|
||||||||||||||||||||||||
Marketing
|
434
|
438
|
(4
|
)
|
692
|
779
|
(87
|
)
|
||||||||||||||||
Supplies
|
101
|
97
|
4
|
210
|
239
|
(29
|
)
|
|||||||||||||||||
Postage
|
179
|
192
|
(13
|
)
|
345
|
350
|
(5
|
)
|
||||||||||||||||
Bankcard and ATM network fees
|
602
|
386
|
216
|
1,192
|
836
|
356
|
||||||||||||||||||
FDIC insurance premiums
|
744
|
761
|
(17
|
)
|
1,479
|
1,545
|
(66
|
)
|
||||||||||||||||
Collection expenses
|
296
|
217
|
79
|
428
|
470
|
(42
|
)
|
|||||||||||||||||
Other
|
764
|
537
|
227
|
1,622
|
1,288
|
334
|
||||||||||||||||||
Total other noninterest expenses
|
3,120
|
2,628
|
492
|
5,968
|
5,507
|
461
|
||||||||||||||||||
Total noninterest expenses
|
$
|
14,087
|
$
|
12,208
|
$
|
1,879
|
$
|
27,330
|
$
|
25,649
|
$
|
1,681
|
|
At June 30, 2016
|
At December 31, 2015
|
||||||||||||||
|
Amortized
Cost
|
Fair Value
|
Amortized
Cost
|
Fair Value
|
||||||||||||
|
(In thousands)
|
|||||||||||||||
Securities Available for Sale:
|
||||||||||||||||
U.S. Government sponsored agency
|
$
|
61,863
|
$
|
63,511
|
$
|
69,798
|
$
|
69,584
|
||||||||
State and political subdivision
|
32,357
|
33,324
|
3,429
|
3,576
|
||||||||||||
Residential mortgage-backed security
|
201,281
|
200,917
|
123,055
|
121,597
|
||||||||||||
Residential collateralized mortgage obligation
|
35,689
|
36,075
|
40,305
|
39,921
|
||||||||||||
Commercial mortgage backed security
|
87,343
|
89,483
|
41,341
|
41,119
|
||||||||||||
SBA pools
|
729
|
723
|
757
|
750
|
||||||||||||
Asset-backed security
|
40,116
|
39,437
|
40,136
|
39,493
|
||||||||||||
Totals
|
$
|
459,378
|
$
|
463,470
|
$
|
318,821
|
$
|
316,040
|
||||||||
|
||||||||||||||||
Securities Held to Maturity:
|
||||||||||||||||
SBA pools
|
$
|
8,906
|
$
|
8,596
|
$
|
8,986
|
$
|
8,988
|
||||||||
Totals
|
$
|
8,906
|
$
|
8,596
|
$
|
8,986
|
$
|
8,988
|
|
Due in One Year or Less
|
Due after One Year
through Five Years
|
Due after Five Years
through Ten Years
|
Due after Ten Years or no
stated Maturity
|
||||||||||||||||||||||||||||
|
Balance
|
Weighted
Average
Yield
|
Balance
|
Weighted
Average
Yield
|
Balance
|
Weighted
Average
Yield
|
Balance
|
Weighted
Average
Yield
|
||||||||||||||||||||||||
As of June 30, 2016
|
(Dollars in thousands)
|
|||||||||||||||||||||||||||||||
Securities Available for Sale:
|
||||||||||||||||||||||||||||||||
U.S. Government sponsored agency
|
$
|
7,522
|
0.55
|
%
|
$
|
20,201
|
1.30
|
%
|
$
|
35,788
|
2.20
|
%
|
$
|
-
|
0.00
|
%
|
||||||||||||||||
States and political subdivision (1)
|
200
|
0.55
|
%
|
1,098
|
1.47
|
%
|
2,016
|
2.31
|
%
|
30,010
|
2.27
|
%
|
||||||||||||||||||||
Mortgage backed
|
-
|
0.00
|
%
|
672
|
1.25
|
%
|
68,955
|
2.33
|
%
|
256,848
|
2.01
|
%
|
||||||||||||||||||||
SBA pools
|
-
|
0.00
|
%
|
-
|
0.00
|
%
|
-
|
0.00
|
%
|
723
|
1.29
|
%
|
||||||||||||||||||||
Asset-backed security
|
-
|
0.00
|
%
|
-
|
0.00
|
%
|
-
|
0.00
|
%
|
39,437
|
2.35
|
%
|
||||||||||||||||||||
Totals
|
$
|
7,722
|
0.53
|
%
|
$
|
21,971
|
0.80
|
%
|
$
|
106,759
|
2.13
|
%
|
$
|
327,018
|
1.65
|
%
|
||||||||||||||||
Securities Held to Maturity:
|
||||||||||||||||||||||||||||||||
SBA pools
|
$
|
-
|
0.00
|
%
|
$
|
-
|
0.00
|
%
|
$
|
-
|
0.00
|
%
|
$
|
8,906
|
3.33
|
%
|
||||||||||||||||
Totals
|
$
|
-
|
0.00
|
%
|
$
|
-
|
0.00
|
%
|
$
|
-
|
0.00
|
%
|
$
|
8,906
|
3.33
|
%
|
(1) |
Yield is reflected adjusting for federal and state exemption of interest income and certain other permanent income tax differences.
|
|
June 30, 2016
|
December 31, 2015
|
||||||||||||||
|
Amount
|
Percent
|
Amount
|
Percent
|
||||||||||||
|
(Dollars in thousands)
|
|||||||||||||||
Commercial
|
$
|
87,482
|
10.81
|
%
|
$
|
92,995
|
11.05
|
%
|
||||||||
Commercial real estate
|
380,958
|
47.07
|
%
|
371,599
|
44.17
|
%
|
||||||||||
Residential real estate
|
235,404
|
29.08
|
%
|
258,606
|
30.74
|
%
|
||||||||||
Construction real estate
|
81,739
|
10.10
|
%
|
89,341
|
10.62
|
%
|
||||||||||
Installment and other
|
23,799
|
2.94
|
%
|
28,730
|
3.42
|
%
|
||||||||||
Total loans
|
809,382
|
100.00
|
%
|
841,271
|
100.00
|
%
|
||||||||||
Unearned income
|
(1,420
|
)
|
(1,483
|
)
|
||||||||||||
Gross loans
|
807,962
|
839,788
|
||||||||||||||
Allowance for loan losses
|
(17,592
|
)
|
(17,392
|
)
|
||||||||||||
Net loans
|
$
|
790,370
|
$
|
822,396
|
|
Due in One Year or Less
|
Due after one Year through Five Years
|
Due after Five Years
|
Total
|
||||||||||||||||||||||||||||
|
Fixed Rate
|
Variable
Rate
|
Fixed Rate
|
Variable
Rate
|
Fixed Rate
|
Variable
Rate
|
Fixed Rate
|
Variable
Rate
|
||||||||||||||||||||||||
|
(Dollars in thousands)
|
|||||||||||||||||||||||||||||||
Commercial
|
$
|
17,021
|
$
|
50,434
|
$
|
8,532
|
$
|
1,389
|
$
|
10,106
|
$
|
-
|
$
|
35,659
|
$
|
51,823
|
||||||||||||||||
Commercial real estate
|
12,081
|
143,138
|
65,884
|
51,703
|
82,733
|
25,419
|
160,698
|
220,260
|
||||||||||||||||||||||||
Residential real estate
|
6,399
|
118,398
|
5,882
|
12,041
|
90,444
|
2,240
|
102,725
|
132,679
|
||||||||||||||||||||||||
Construction real estate
|
26,889
|
27,416
|
5,292
|
10,466
|
5,022
|
6,654
|
37,203
|
44,536
|
||||||||||||||||||||||||
Installment and other
|
10,096
|
3,426
|
5,337
|
40
|
4,900
|
-
|
20,333
|
3,466
|
||||||||||||||||||||||||
Total loans
|
$
|
72,486
|
$
|
342,812
|
$
|
90,927
|
$
|
75,639
|
$
|
193,205
|
$
|
34,313
|
$
|
356,618
|
$
|
452,764
|
|
June 30, 2016
|
December 31, 2015
|
||||||
|
(Dollars in thousands)
|
|||||||
Non-accruing loans
|
$
|
24,427
|
$
|
30,325
|
||||
Loans 90 days or more past due, still accruing interest
|
-
|
-
|
||||||
Total non-performing loans
|
24,427
|
30,325
|
||||||
OREO
|
8,653
|
8,346
|
||||||
Total non-performing assets
|
$
|
33,080
|
$
|
38,671
|
||||
TDRs, still accruing interest
|
$
|
48,804
|
$
|
53,592
|
||||
Total non-performing loans to total loans
|
3.02
|
%
|
3.60
|
%
|
||||
Allowance for loan losses to non- performing loans
|
68.48
|
%
|
57.35
|
%
|
||||
Total non-performing assets to total assets
|
2.33
|
%
|
2.76
|
%
|
|
Commercial
|
Commercial real estate
|
Residential real estate
|
|||||||||||||||||||||
Dollar Range
|
Number of
Borrowers
|
Amount
|
Number of
Borrowers
|
Amount
|
Number of
Borrowers
|
Amount
|
||||||||||||||||||
|
(Dollars in thousands)
|
|||||||||||||||||||||||
June 30, 2016
|
||||||||||||||||||||||||
$5.0 million or more
|
-
|
$
|
-
|
-
|
$
|
-
|
-
|
$
|
-
|
|||||||||||||||
$3.0 million to $4.9 million
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
$1.5 million to $2.9 million
|
-
|
-
|
2
|
4,143
|
-
|
-
|
||||||||||||||||||
Under $1.5 million
|
13
|
1,767
|
13
|
4,802
|
41
|
5,962
|
||||||||||||||||||
Total
|
13
|
$
|
1,767
|
15
|
$
|
8,945
|
41
|
$
|
5,962
|
|||||||||||||||
|
||||||||||||||||||||||||
Percentage of individual loan category
|
2.02
|
%
|
2.35
|
%
|
2.53
|
%
|
||||||||||||||||||
|
||||||||||||||||||||||||
December 31, 2015
|
||||||||||||||||||||||||
$5.0 million or more
|
-
|
$
|
-
|
-
|
$
|
-
|
-
|
$
|
-
|
|||||||||||||||
$3.0 million to $4.9 million
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
$1.5 million to $2.9 million
|
-
|
-
|
3
|
5,719
|
-
|
-
|
||||||||||||||||||
Under $1.5 million
|
17
|
2,268
|
16
|
5,019
|
51
|
7,821
|
||||||||||||||||||
Total
|
17
|
$
|
2,268
|
19
|
$
|
10,738
|
51
|
$
|
7,821
|
|||||||||||||||
|
||||||||||||||||||||||||
Percentage of individual loan category
|
2.44
|
%
|
2.89
|
%
|
3.02
|
%
|
|
Construction real estate
|
Installment & other loans
|
Total
|
|||||||||||||||||||||
Dollar Range
|
Number of
Borrowers
|
Amount
|
Number of
Borrowers
|
Amount
|
Number of
Borrowers
|
Amount
|
||||||||||||||||||
|
(Dollars in thousands)
|
|||||||||||||||||||||||
June 30, 2016
|
||||||||||||||||||||||||
$5.0 million or more
|
-
|
$
|
-
|
-
|
$
|
-
|
-
|
$
|
-
|
|||||||||||||||
$3.0 million to $4.9 million
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
$1.5 million to $2.9 million
|
2
|
4,852
|
-
|
-
|
4
|
8,995
|
||||||||||||||||||
Under $1.5 million
|
12
|
2,828
|
2
|
73
|
81
|
15,432
|
||||||||||||||||||
Total
|
14
|
$
|
7,680
|
2
|
$
|
73
|
85
|
$
|
24,427
|
|||||||||||||||
|
||||||||||||||||||||||||
Percentage of individual loan category
|
9.40
|
%
|
0.31
|
%
|
3.02
|
%
|
||||||||||||||||||
|
||||||||||||||||||||||||
December 31, 2015
|
||||||||||||||||||||||||
$5.0 million or more
|
-
|
$
|
-
|
-
|
$
|
-
|
-
|
$
|
-
|
|||||||||||||||
$3.0 million to $4.9 million
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
$1.5 million to $2.9 million
|
2
|
4,851
|
-
|
-
|
5
|
10,570
|
||||||||||||||||||
Under $1.5 million
|
19
|
4,500
|
4
|
146
|
107
|
19,754
|
||||||||||||||||||
Total
|
21
|
$
|
9,351
|
4
|
$
|
146
|
112
|
$
|
30,324
|
|||||||||||||||
|
||||||||||||||||||||||||
Percentage of individual loan category
|
10.47
|
%
|
0.51
|
%
|
3.60
|
%
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||
|
2016
|
2015
|
2016
|
2015
|
||||||||||||
|
(Dollars in thousands)
|
|||||||||||||||
Balance at beginning of year
|
$
|
17,305
|
$
|
22,339
|
$
|
17,392
|
$
|
24,783
|
||||||||
Provision for loan losses
|
-
|
-
|
-
|
-
|
||||||||||||
Charge-offs:
|
||||||||||||||||
Commercial
|
93
|
261
|
275
|
790
|
||||||||||||
Commercial real estate
|
(4
|
)
|
88
|
-
|
264
|
|||||||||||
Residential real estate
|
79
|
227
|
402
|
1,215
|
||||||||||||
Construction real estate
|
4
|
69
|
22
|
1,031
|
||||||||||||
Installment and other
|
64
|
141
|
235
|
251
|
||||||||||||
Total charge-offs
|
236
|
786
|
934
|
3,551
|
||||||||||||
Recoveries :
|
||||||||||||||||
Commercial
|
138
|
952
|
490
|
1,162
|
||||||||||||
Commercial real estate
|
115
|
324
|
129
|
339
|
||||||||||||
Residential real estate
|
223
|
121
|
259
|
164
|
||||||||||||
Construction real estate
|
20
|
294
|
117
|
317
|
||||||||||||
Installment and other
|
27
|
36
|
139
|
66
|
||||||||||||
Total recoveries
|
523
|
1,727
|
1,134
|
2,048
|
||||||||||||
Net charge-offs
|
(287
|
)
|
(941
|
)
|
(200
|
)
|
1,503
|
|||||||||
Balance at end of year
|
$
|
17,592
|
$
|
23,280
|
$
|
17,592
|
$
|
23,280
|
|
June 30, 2016
|
December 31, 2015
|
||||||||||||||
|
Amount
|
Percent
|
Amount
|
Percent
|
||||||||||||
|
(Dollars in thousands)
|
|||||||||||||||
Commercial
|
$
|
2,162
|
12.29
|
%
|
$
|
2,442
|
14.04
|
%
|
||||||||
Commercial and residential real estate
|
8,131
|
46.22
|
%
|
6,751
|
38.82
|
%
|
||||||||||
Residential real estate
|
5,484
|
31.17
|
%
|
6,082
|
34.97
|
%
|
||||||||||
Construction real estate
|
1,039
|
5.91
|
%
|
1,143
|
6.57
|
%
|
||||||||||
Installment and other
|
757
|
4.30
|
%
|
940
|
5.40
|
%
|
||||||||||
Unallocated
|
19
|
0.11
|
%
|
34
|
0.20
|
%
|
||||||||||
Total
|
$
|
17,592
|
100.00
|
%
|
$
|
17,392
|
100.00
|
%
|
|
June 30, 2016
|
December 31, 2015
|
||||||
|
(In thousands)
|
|||||||
Performing loans classified as:
|
||||||||
Substandard
|
$
|
44,744
|
$
|
59,860
|
||||
Total performing adversely classified loans
|
$
|
44,744
|
$
|
59,860
|
||||
Special mention loans
|
$
|
19,975
|
$
|
30,932
|
|
June 30, 2016
(In thousands)
|
|||
Maturing within three months
|
$
|
5,192
|
||
After three but within six months
|
6,396
|
|||
After six but within twelve months
|
9,509
|
|||
After twelve but within three years
|
2,978
|
|||
After three years
|
6,410
|
|||
Total time deposits $250,000 and over
|
$
|
30,485
|
● |
Fed Funds Purchased are limited to 60% of the total Available Lines, leaving 40% available for emergency needs and potential funding needs.
|
● |
FHLB Advances are limited to 75% of the Total Collateral Advance Capacity leaving 25% available for emergency liquidity needs and potential funding needs.
|
● |
Wholesale Repurchase Agreements are limited, in aggregate, to no more than 10% of Total Funding (total assets).
|
● |
Total Borrowings are limited to no more than 25% of Total Funding (which is defined as equal to Total Assets).
|
● |
Wholesale Funds, as that term is defined above, is limited to no more than 25% of the Bank's Total Funding (total assets)
|
● |
Brokered funds are not to exceed 20% of total funding without the prior approval of the Board of Directors.
|
● |
The total aggregate balance of Wholesale Funds, Brokered Funds and Borrowings as defined above is limited to no more than 35% of Total Funding (total assets).
|
● |
The Liquidity Coverage Ratio is defined as the Anticipated Sources of Liquidity divided by the Anticipated Liquidity Needs must be greater than 1.15
|
● |
Cumulative Liquidity Gap (% of cumulative net cash outflow over a six month period under a worst case scenario) at least 100%
|
|
Actual
|
For Capital Adequacy
Purposes
|
To be well capitalized
under prompt
corrective action
provisions
|
Minimum Levels
Under Order
Provisions
|
||||||||||||||||||||||||||||
|
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
||||||||||||||||||||||||
|
(Dollars in thousands )
|
|||||||||||||||||||||||||||||||
June 30, 2016
|
||||||||||||||||||||||||||||||||
Total capital (to risk-weighted assets):
|
||||||||||||||||||||||||||||||||
Consolidated
|
$
|
127,822
|
14.2159
|
%
|
$
|
71,932
|
8.00
|
%
|
N/A
|
N/A
|
N/A
|
N/A
|
||||||||||||||||||||
Bank only
|
144,416
|
16.1336
|
%
|
71,610
|
8.00
|
%
|
$
|
89,513
|
10.00
|
%
|
$
|
98,464
|
11.00
|
%
|
||||||||||||||||||
Tier 1 capital (to risk weighted assets):
|
||||||||||||||||||||||||||||||||
Consolidated
|
100,756
|
11.2057
|
%
|
53,949
|
6.00
|
%
|
N/A
|
N/A
|
N/A
|
N/A
|
||||||||||||||||||||||
Bank only
|
133,141
|
14.8740
|
%
|
53,708
|
6.00
|
%
|
71,610
|
8.00
|
%
|
N/A
|
N/A
|
|||||||||||||||||||||
Common Equity Tier 1 Capital (to risk weighted assets):
|
||||||||||||||||||||||||||||||||
Consolidated
|
43,669
|
4.8567
|
%
|
40,462
|
4.50
|
%
|
N/A
|
N/A
|
N/A
|
N/A
|
||||||||||||||||||||||
Bank only
|
133,141
|
14.8740
|
%
|
40,281
|
4.50
|
%
|
58,183
|
6.50
|
%
|
N/A
|
N/A
|
|||||||||||||||||||||
Tier 1 leverage (to average assets):
|
||||||||||||||||||||||||||||||||
Consolidated
|
100,756
|
7.1273
|
%
|
56,546
|
4.00
|
%
|
N/A
|
N/A
|
N/A
|
N/A
|
||||||||||||||||||||||
Bank only
|
133,141
|
9.4775
|
%
|
56,193
|
4.00
|
%
|
70,241
|
5.00
|
%
|
112,385
|
8.00
|
%
|
June 30, 2016
|
December 31, 2015
|
|||||||||||||||||
Changes in Levels
of Interest Rates
|
Dollar
Change
|
Percent
Change
|
Dollar
Change
|
Percent
Change
|
||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||
+2.00
|
%
|
$
|
724
|
0.82
|
%
|
$
|
3,421
|
3.86
|
%
|
|||||||||
+1.00
|
%
|
947
|
1.07
|
%
|
2,589
|
2.92
|
%
|
|||||||||||
(1.00
|
)%
|
(2,586
|
)
|
(2.93
|
)%
|
(3,522
|
)
|
(3.98
|
)%
|
|||||||||
(2.00
|
)%
|
NA
|
NA
|
NA
|
NA
|
|||||||||||||
(1) |
Internal Control Environment. Weaknesses in the control environment resulted in an environment in which management was able to override controls in the past, including:
|
● |
Sufficient importance and attention was not given to developing, re-assessing and updating policies and procedures for financially significant areas.
|
● |
Training historically focused on the performance of procedures without sufficient attention to the reason or importance of the procedures and controls.
|
(2) |
Information Systems and Reports. Weaknesses in the control environment over implementation, change management and monitoring of in-house systems were present, including:
|
● |
For the third party application used to calculate trust fee income, management relied on the application without performing a review of the SOC/SSAE 16 report as well as the associated Complementary User Entity Controls.
|
● |
A review of user access to financially significant applications had been initiated but not completed in its entirety in calendar year 2015. In addition, security events were not being tracked through available application logs for several of these applications.
|
● |
The core system for loans and deposits did not provide the tools or reports necessary for management to implement an effective set of controls over account-level file maintenance changes.
|
(3) |
Internal Audit and Risk Management. The Company's Internal Audit function did not provide adequate oversight and the Company's Risk Management function lacked formality and structure as follows:
|
● |
Progress occurred in 2015 after the reorganization of the Internal Audit function, but for the majority of the year the Company's Internal Audit function did not provide adequate oversight due to an improper risk assessment process, inaccurate or outdated process and control documentation, untimely testing procedures, and insufficient monitoring over training of Internal Audit personnel. Risk assessment and audit procedures designed did not sufficiently address risks in financial reporting, although improvement occurred after this function was outsourced to a third party during the year.
|
● |
Process and control documentation did not accurately reflect the actual processes and controls in place. In various cases, process and control flow charts include controls that were no longer applicable and do not reflect newly implemented controls.
|
● |
Testing of Internal Controls over Financial Reporting was not completed in a timely manner.
|
● |
The Company did not have a formal risk management function for the majority of 2015.
|
(4) |
Financial Reporting. The Company lacked sufficient staffing over the financial reporting function, resulting in reporting issues, errors and untimely financial reporting, as follows:
|
● |
For the majority of the year the Company lacked sufficient qualified individuals within the financial reporting function. Prior to the arrival of these individuals, undue reliance was placed on results from regulatory and external examinations to identify financial reporting issues and errors.
|
● |
Management reviews of control procedures designed to validate and detect errors at period end were informal in various cases and in most cases lacked the precision necessary to identify material errors.
|
● |
Segregation of duties were not in place in several financially significant areas.
|
● |
Period-end financial reporting procedures were informal and inconsistent for the majority of the year. Similarly, for the majority of the year management did not utilize checklists to:
|
i. |
Track completion of month-end key reconciliations
|
ii. |
Complete and review calculations affecting significant accounting estimates
|
iii. |
Track compliance with GAAP and SEC reporting requirements.
|
iv. |
Document the review of regulatory reporting requirements including call reports.
|
● |
Subsequent event identification procedures were incomplete, resulting in untimely identifications and adjustments.
|
● |
Controls over certain reconciliations were either not in place or not properly designed, resulting in one case where unidentified reconciling items and classification errors were not detected..
|
● |
A control is not in place to validate the completeness of related party loan and deposit disclosures within both regulatory and financial reporting.
|
(5) |
Allowance for Loan Losses. Processes and controls designed to monitor loan quality and determine the allowance for loan loss reserve were inadequate as follows:
|
● |
Reserve calculations and reports utilized to estimate required reserves were subject to informal control procedures, leading to weaknesses in the quality of documentation utilized by management to support loan impairments, specific reserve requirements, and qualitative adjustments.
|
● |
Reports utilized by the Loan Risk Rating Committee were not subject to formal reviews to ensure that decisions are being made based on accurate and complete information.
|
● |
Review of the allowance for loan loss calculation was informal and insufficiently precise, and the quality of documentation surrounding management's analysis was low.
|
31.1
|
Certification of Chief Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a)
|
|
|
31.2
|
Certification on Chief Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a)
|
|
|
32.1
|
Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
32.2
|
Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
101
|
Interactive data files pursuant to Rule 405 of Regulation S-T: (i) Consolidated Balance Sheets as of June 30, 2016 and December 31, 2015; (ii) Consolidated Statements of Operations for the three and six months ended June 30, 2016 and 2015; (iii) Consolidated Statements of Changes in Stockholders' Equity for the six months ended June 30, 2016 and 2015; (iv) Consolidated Statements of Cash Flows for the six months ended June 30, 2016 and 2015; and (v) Notes to Consolidated Financial Statements, tagged as blocks of text
|
TRINITY CAPITAL CORPORATION
|
|||
Date: February 13, 2017
|
|
|
|
|
By:
|
/s/ John S. Gulas
|
|
|
|
John S. Gulas
Chief Executive Officer and President
|
|
By:
|
/s/ Daniel W. Thompson
|
||
Daniel W. Thompson
|
|||
Chief Financial Officer
|
1. |
I have reviewed this quarterly report on Form 10-Q of Trinity Capital Corporation;
|
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 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 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 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:
|
February 14, 2017
|
/s/ John S. Gulas
|
John S. Gulas
|
||
President and Chief Executive Officer
|
1. |
I have reviewed this quarterly report on Form 10-Q of Trinity Capital Corporation;
|
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 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 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 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:
|
February 14, 2017
|
/s/ Daniel W. Thompson
|
Daniel W. Thompson
|
||
Chief Financial Officer
|
(1) |
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Trinity.
|
(1) |
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Trinity.
|
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