__________
|
|
(334)
files).
Yes ☒ No ☐
Indicate by check mark whether
(Dollars in thousands, except share data) | September 30, 2017 | December 31, 2016 | ||||||
| ||||||||
Assets: | ||||||||
Cash and due from banks | $ | 14,144 | $ | 15,673 | ||||
Federal funds sold | 21,555 | 42,096 | ||||||
Interest bearing bank deposits | 42,391 | 63,508 | ||||||
| ||||||||
Cash and cash equivalents | 78,090 | 121,277 | ||||||
| ||||||||
Securitiesavailable-for-sale | 265,171 | 243,572 | ||||||
Loans held for sale | 924 | 1,497 | ||||||
Loans, net of unearned income | 449,378 | 430,946 | ||||||
Allowance for loan losses | (4,670 | ) | (4,643) | |||||
| ||||||||
Loans, net | 444,708 | 426,303 | ||||||
| ||||||||
Premises and equipment, net | 13,835 | 12,602 | ||||||
Bank-owned life insurance | 18,217 | 17,888 | ||||||
Other real estate owned | 103 | 152 | ||||||
Other assets | 7,498 | 8,652 | ||||||
| ||||||||
Total assets | $ | 828,546 | $ | 831,943 | ||||
| ||||||||
Liabilities: | ||||||||
Deposits: | ||||||||
Noninterest-bearing | $ | 184,752 | $ | 181,890 | ||||
Interest-bearing | 547,896 | 557,253 | ||||||
| ||||||||
Total deposits | 732,648 | 739,143 | ||||||
Federal funds purchased and securities sold under agreements to repurchase | 3,573 | 3,366 | ||||||
Long-term debt | 3,217 | 3,217 | ||||||
Accrued expenses and other liabilities | 2,570 | 4,040 | ||||||
| ||||||||
Total liabilities | 742,008 | 749,766 | ||||||
| ||||||||
Stockholders’ equity: | ||||||||
Preferred stock of $.01 par value; authorized 200,000 shares; no issued shares | — | — | ||||||
Common stock of $.01 par value; authorized 8,500,000 shares; issued 3,957,135 shares | 39 | 39 | ||||||
Additionalpaid-in capital | 3,771 | 3,767 | ||||||
Retained earnings | 89,223 | 85,716 | ||||||
Accumulated other comprehensive income (loss), net | 142 | (708) | ||||||
Less treasury stock, at cost - 313,467 shares and 313,612 shares at September 30, 2017 and December 31, 2016, respectively | (6,637 | ) | (6,637) | |||||
| ||||||||
Total stockholders’ equity | 86,538 | 82,177 | ||||||
| ||||||||
Total liabilities and stockholders’ equity | $ | 828,546 | $ | 831,943 | ||||
|
Quarter ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||
(In thousands, except share and per share data) |
2017 |
2016 |
2017 |
2016 | ||||||||||||||||||||||
| ||||||||||||||||||||||||||
Interest income: | ||||||||||||||||||||||||||
Loans, including fees | $ | 5,296 | $ | 5,105 | $ | 15,398 | $ | 15,373 | ||||||||||||||||||
Securities: | ||||||||||||||||||||||||||
Taxable | 1,071 | 747 | 3,204 | 2,420 | ||||||||||||||||||||||
Tax-exempt | 590 | 616 | 1,758 | 1,864 | ||||||||||||||||||||||
Federal funds sold and interest bearing bank deposits | 215 | 191 | 598 | 473 | ||||||||||||||||||||||
| ||||||||||||||||||||||||||
Total interest income | 7,172 | 6,659 | 20,958 | 20,130 | ||||||||||||||||||||||
| ||||||||||||||||||||||||||
Interest expense: | ||||||||||||||||||||||||||
Deposits | 872 | 984 | 2,600 | 2,932 | ||||||||||||||||||||||
Short-term borrowings | 5 | 4 | 14 | 11 | ||||||||||||||||||||||
Long-term debt | 34 | 63 | 93 | 190 | ||||||||||||||||||||||
| ||||||||||||||||||||||||||
Total interest expense | 911 | 1,051 | 2,707 | 3,133 | ||||||||||||||||||||||
| ||||||||||||||||||||||||||
Net interest income | 6,261 | 5,608 | 18,251 | 16,997 | ||||||||||||||||||||||
Provision for loan losses | — | — | 100 | (600) | ||||||||||||||||||||||
| ||||||||||||||||||||||||||
Net interest income after provision for loan losses | 6,261 | 5,608 | 18,151 | 17,597 | ||||||||||||||||||||||
| ||||||||||||||||||||||||||
Noninterest income: | ||||||||||||||||||||||||||
Service charges on deposit accounts | 191 | 197 | 563 | 588 | ||||||||||||||||||||||
Mortgage lending | 254 | 246 | 558 | 740 | ||||||||||||||||||||||
Bank-owned life insurance | 112 | 114 | 329 | 339 | ||||||||||||||||||||||
Other | 362 | 358 | 1,096 | 1,075 | ||||||||||||||||||||||
Securities gains, net | 49 | 148 | 51 | 148 | ||||||||||||||||||||||
| ||||||||||||||||||||||||||
Total noninterest income | 968 | 1,063 | 2,597 | 2,890 | ||||||||||||||||||||||
| ||||||||||||||||||||||||||
Noninterest expense: | ||||||||||||||||||||||||||
Salaries and benefits | 2,516 | 2,471 | 7,289 | 7,322 | ||||||||||||||||||||||
Net occupancy and equipment | 385 | 389 | 1,117 | 1,107 | ||||||||||||||||||||||
Professional fees | 276 | 220 | 760 | 625 | ||||||||||||||||||||||
FDIC and other regulatory assessments | 79 | 76 | 257 | 320 | ||||||||||||||||||||||
Other real estate owned, net | 4 | (194 | ) | (5 | ) | (217) | ||||||||||||||||||||
Other | 965 | 1,018 | 2,940 | 2,953 | ||||||||||||||||||||||
| ||||||||||||||||||||||||||
Total noninterest expense | 4,225 | 3,980 | 12,358 | 12,110 | ||||||||||||||||||||||
| ||||||||||||||||||||||||||
Earnings before income taxes | 3,004 | 2,691 | 8,390 | 8,377 | ||||||||||||||||||||||
Income tax expense | 868 | 740 | 2,369 | 2,304 | ||||||||||||||||||||||
| ||||||||||||||||||||||||||
Net earnings | $ | 2,136 | $ | 1,951 | $ | 6,021 | $ | 6,073 | ||||||||||||||||||
| ||||||||||||||||||||||||||
Net earnings per share: | ||||||||||||||||||||||||||
Basic and diluted | $ | 0.59 | $ | 0.54 | $ | 1.65 | $ | 1.67 | ||||||||||||||||||
| ||||||||||||||||||||||||||
Weighted average shares outstanding: | ||||||||||||||||||||||||||
Basic and diluted | 3,643,659 | 3,643,506 | 3,643,598 | 3,643,498 | ||||||||||||||||||||||
|
Quarter ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||
(Dollars in thousands) | 2017 | 2016 | 2017 | 2016 | ||||||||||||||||||||
| ||||||||||||||||||||||||
Net earnings | $ | 2,136 | $ | 1,951 | $ | 6,021 | $ | 6,073 | ||||||||||||||||
Other comprehensive income (loss), net of tax: | ||||||||||||||||||||||||
Unrealized net holding gain (loss) on securities | 171 | (792) | 882 | 1,584 | ||||||||||||||||||||
Reclassification adjustment for net gain on securities recognized in net earnings | (31 | ) | (93) | (32 | ) | (93) | ||||||||||||||||||
| ||||||||||||||||||||||||
Other comprehensive income (loss) | 140 | (885) | 850 | 1,491 | ||||||||||||||||||||
| ||||||||||||||||||||||||
Comprehensive income | $ | 2,276 | $ | 1,066 | $ | 6,871 | $ | 7,564 | ||||||||||||||||
|
Accumulated | ||||||||||||||||||||||||||||
Additional | other | |||||||||||||||||||||||||||
Common Stock |
paid-in | Retained | comprehensive | Treasury | ||||||||||||||||||||||||
(Dollars in thousands, except share data)
|
Shares |
Amount | capital | earnings | income (loss) | stock | Total | |||||||||||||||||||||
| ||||||||||||||||||||||||||||
Balance, December 31, 2015 | 3,957,135 | $ | 39 | $ | 3,766 | $ | 80,845 | $ | 1,937 | $ | (6,638 | ) | $ | 79,949 | ||||||||||||||
Net earnings | — | — | — | 6,073 | — | — | 6,073 | |||||||||||||||||||||
Other comprehensive income | — | — | — | — | 1,491 | — | 1,491 | |||||||||||||||||||||
Cash dividends paid ($0.675 per share) | — | — | — | (2,459 | ) | — | — | (2,459) | ||||||||||||||||||||
Sale of treasury stock (45 shares) | — | — | 1 | — | — | — | 1 | |||||||||||||||||||||
| ||||||||||||||||||||||||||||
Balance, Septemer 30, 2016 | 3,957,135 | $ | 39 | $ | 3,767 | $ | 84,459 | $ | 3,428 | $ | (6,638 | ) | $ | 85,055 | ||||||||||||||
| ||||||||||||||||||||||||||||
Balance, December 31, 2016 | 3,957,135 | $ | 39 | $ | 3,767 | $ | 85,716 | $ | (708 | ) | $ | (6,637 | ) | $ | 82,177 | |||||||||||||
Net earnings | — | — | — | 6,021 | — | — | 6,021 | |||||||||||||||||||||
Other comprehensive income | — | — | — | — | 850 | — | 850 | |||||||||||||||||||||
Cash dividends paid ($0.69 per share) | — | — | — | (2,514) | — | — | (2,514) | |||||||||||||||||||||
Sale of treasury stock (145 shares) | — | — | 4 | — | — | — | 4 | |||||||||||||||||||||
| ||||||||||||||||||||||||||||
Balance, September 30, 2017 | 3,957,135 | $ | 39 | $ | 3,771 | $ | 89,223 | $ | 142 | $ | (6,637 | ) | $ | 86,538 | ||||||||||||||
|
Nine months ended September 30, | ||||||||||
(In thousands) |
2017 |
2016 | ||||||||
| ||||||||||
Cash flows from operating activities: | ||||||||||
Net earnings | $ | 6,021 | $ | 6,073 | ||||||
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||||||||||
Provision for loan losses | 100 | (600) | ||||||||
Depreciation and amortization | 772 | 876 | ||||||||
Premium amortization and discount accretion, net | 1,612 | 1,137 | ||||||||
Net gain on securitiesavailable-for-sale | (51 | ) | (148) | |||||||
Net gain on sale of loans held for sale | (366 | ) | (609) | |||||||
(Decrease) increase in MSR valuation allowance | (1 | ) | 21 | |||||||
Net gain on other real estate owned | (11 | ) | (238) | |||||||
Loans originated for sale | (21,957 | ) | (33,331) | |||||||
Proceeds from sale of loans | 22,731 | 34,537 | ||||||||
Increase in cash surrender value of bank-owned life insurance | (329 | ) | (339) | |||||||
Net decrease in other assets | 382 | 196 | ||||||||
Net (decrease) increase in accrued expenses and other liabilities | (1,466 | ) | 577 | |||||||
| ||||||||||
Net cash provided by operating activities | 7,437 | 8,152 | ||||||||
| ||||||||||
Cash flows from investing activities: | ||||||||||
Proceeds from sales of securitiesavailable-for-sale | 10,374 | 5,126 | ||||||||
Proceeds from prepayments and maturities of securitiesavailable-for-sale | 25,909 | 50,934 | ||||||||
Purchase of securitiesavailable-for-sale | (58,097 | ) | (62,556) | |||||||
Increase in loans, net | (18,506 | ) | (189) | |||||||
Net purchases of premises and equipment | (1,549 | ) | (1,173) | |||||||
Increase in FHLB stock | (13 | ) | (25) | |||||||
Proceeds from sale of other real estate owned | 60 | 695 | ||||||||
| ||||||||||
Net cash used in investing activities | (41,822 | ) | (7,188) | |||||||
| ||||||||||
Cash flows from financing activities: | ||||||||||
Net increase in noninterest-bearing deposits | 2,862 | 22,759 | ||||||||
Net (decrease) increase in interest-bearing deposits | (9,357 | ) | 5,529 | |||||||
Net increase in federal funds purchased and securities sold under agreements to repurchase | 207 | 556 | ||||||||
Dividends paid | (2,514 | ) | (2,459) | |||||||
| ||||||||||
Net cash (used in) provided by financing activities | (8,802 | ) | 26,385 | |||||||
| ||||||||||
Net change in cash and cash equivalents | (43,187 | ) | 27,349 | |||||||
Cash and cash equivalents at beginning of period | 121,277 | 113,930 | ||||||||
| ||||||||||
Cash and cash equivalents at end of period | $ | 78,090 | $ | 141,279 | ||||||
| ||||||||||
| ||||||||||
Supplemental disclosures of cash flow information: | ||||||||||
Cash paid during the period for: | ||||||||||
Interest | $ | 2,791 | $ | 3,193 | ||||||
Income taxes | 2,674 | 1,703 | ||||||||
Supplemental disclosure ofnon-cash transactions: | ||||||||||
Real estate acquired through foreclosure | — | 285 | ||||||||
|
2020.
owned (“OREO”).
Quarter ended September 30, | Nine months ended September 30, | |||||||||||||||
(In thousands, except share and per share data) | 2017 | 2016 | 2017 | 2016 | ||||||||||||
| ||||||||||||||||
Basic and diluted: | ||||||||||||||||
Net earnings | $ | 2,136 | $ | 1,951 | $ | 6,021 | $ | 6,073 | ||||||||
Weighted average common shares outstanding | 3,643,659 | 3,643,506 | 3,643,598 | 3,643,498 | ||||||||||||
| ||||||||||||||||
Net earnings per share | $ | 0.59 | $ | 0.54 | $ | 1.65 | $ | 1.67 | ||||||||
|
below
Generally, a variable interest entity (“VIE”) is a corporation, partnership, trust, or other legal structure that does not have equity investors with substantive or proportional voting rights or has equity investors that do not provide sufficient financial resources for the entity to support its activities.
SECURITIES
Trust Preferred Securities
The Company owns the common stock of a subsidiary business trust, Auburn National Bancorporation Capital Trust I (the “Trust”), which issued mandatorily redeemable preferred capital securities (“trust preferred securities”) in the aggregate of approximately $7.0 million at the time of issuance. The Trust meets the definition of a VIE of which the Company is not the primary beneficiary; the Trust’s only assets are junior subordinated debentures issued by the Company, which were acquired by the trust using the proceeds from the issuance of the trust preferred securities and common stock.
In October 2016, the Company purchased $4.0 million par amount of outstanding trust preferred securities issued by the Trust. These securities were sold to us by the FDIC, as receiver of a failed bank that previously held the trust preferred securities. The Company used dividends from the Bank to purchase these trust preferred securities and has deemed an equivalent amount of the related junior subordinated debentures issued by the Company as no longer outstanding. The remaining junior subordinated debentures of approximately $3.2 million are included in long-term debt and the Company’s equity interest of $0.2 million in the Trust is included in other assets. Interest expense on the junior subordinated debentures that remain outstanding is included in interest expense on long-term debt.
The following table summarizes VIEs that are not consolidated by the Company as of September 30, 2017.
|
| |||||||||||
| ||||||||||||
| ||||||||||||
NOTE 4: SECURITIES
At September 30, 2017March 31, 2021 and December 31, 2016,2020, respectively,
|
| |||||||||||||||||||||||||||||||
1 year | 1 to 5 | 5 to 10 | After 10 | Fair | Gross Unrealized | Amortized | ||||||||||||||||||||||||||
(Dollars in thousands) | or less | years | years | years | Value | Gains | Losses | Cost | ||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||
September 30, 2017 | ||||||||||||||||||||||||||||||||
Agency obligations (a) | $ | — | 29,496 | 24,009 | — | 53,505 | 230 | 654 | $ | 53,929 | ||||||||||||||||||||||
Agency RMBS (a) | — | — | 12,028 | 127,778 | 139,806 | 606 | 1,174 | 140,374 | ||||||||||||||||||||||||
State and political subdivisions | — | 2,097 | 10,716 | 59,047 | 71,860 | 1,580 | 363 | 70,643 | ||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||
Totalavailable-for-sale | $ | — | 31,593 | 46,753 | 186,825 | 265,171 | 2,416 | 2,191 | $ | 264,946 | ||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||
December 31, 2016 | ||||||||||||||||||||||||||||||||
Agency obligations (a) | $ | 3,047 | 22,531 | 19,893 | — | 45,471 | 331 | 973 | $ | 46,113 | ||||||||||||||||||||||
Agency RMBS (a) | — | 972 | 16,171 | 110,644 | 127,787 | 551 | 1,805 | 129,041 | ||||||||||||||||||||||||
State and political subdivisions | — | 2,480 | 10,210 | 57,624 | 70,314 | 1,509 | 734 | 69,539 | ||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||
Totalavailable-for-sale | $ | 3,047 | 25,983 | 46,274 | 168,268 | 243,572 | 2,391 | 3,512 | $ | 244,693 | ||||||||||||||||||||||
|
stock, and stock in a privately held financial institution.
Less than 12 Months | 12 Months or Longer | Total | ||||||||||||||||||||||||||
(Dollars in thousands) |
Fair
Value |
Unrealized
Losses |
Fair
Value |
Unrealized
Losses |
Fair
Value |
Unrealized
Losses | ||||||||||||||||||||||
| ||||||||||||||||||||||||||||
September 30, 2017: | ||||||||||||||||||||||||||||
Agency obligations | $ | 9,871 | 67 | 15,655 | 587 | $ | 25,526 | 654 | ||||||||||||||||||||
Agency RMBS | 46,620 | 375 | 34,051 | 799 | 80,671 | 1,174 | ||||||||||||||||||||||
State and political subdivisions | 8,164 | 151 | 7,710 | 212 | 15,874 | 363 | ||||||||||||||||||||||
| ||||||||||||||||||||||||||||
Total | $ | 64,655 | 593 | 57,416 | 1,598 | $ | 122,071 | 2,191 | ||||||||||||||||||||
| ||||||||||||||||||||||||||||
December 31, 2016: | ||||||||||||||||||||||||||||
Agency obligations | $ | 20,352 | 973 | — | — | $ | 20,352 | 973 | ||||||||||||||||||||
Agency RMBS | 89,062 | 1,805 | — | — | 89,062 | 1,805 | ||||||||||||||||||||||
State and political subdivisions | 20,444 | 734 | — | — | 20,444 | 734 | ||||||||||||||||||||||
| ||||||||||||||||||||||||||||
Total | $ | 129,858 | 3,512 | — | — | $ | 129,858 | 3,512 | ||||||||||||||||||||
|
mortgage-backed securities (“MBS”)
Cost-method investments
At September 30, 2017, cost-method investments with an aggregate cost of $1.4 million were not evaluated for impairment because the Company had not identified any events or changes in circumstances that may have a significant adverse effect on the fair value of these cost-method investments.
Quarter ended September 30, | Nine months ended September 30, | |||||||||||||||||||
(Dollars in thousands) | 2017 | 2016 | 2017 | 2016 | ||||||||||||||||
| ||||||||||||||||||||
Gross realized gains | $ | 49 | 148 | $ | 51 | 148 | ||||||||||||||
| ||||||||||||||||||||
Realized gains, net | $ | 49 | 148 | $ | 51 | 148 | ||||||||||||||
|
(In thousands) | September 30,
2017 | December 31,
2016 | ||||||
| ||||||||
Commercial and industrial | $ | 50,101 | $ | 49,850 | ||||
Construction and land development | 47,455 | 41,650 | ||||||
Commercial real estate: | ||||||||
Owner occupied | 41,633 | 49,745 | ||||||
Multi-family | 47,794 | 46,998 | ||||||
Other | 142,953 | 123,696 | ||||||
| ||||||||
Total commercial real estate | 232,380 | 220,439 | ||||||
Residential real estate: | ||||||||
Consumer mortgage | 63,056 | 65,564 | ||||||
Investment property | 47,103 | 45,291 | ||||||
| ||||||||
Total residential real estate | 110,159 | 110,855 | ||||||
Consumer installment | 9,877 | 8,712 | ||||||
| ||||||||
Total loans | 449,972 | 431,506 | ||||||
Less: unearned income | (594) | (560) | ||||||
| ||||||||
Loans, net of unearned income | $ | 449,378 | $ | 430,946 | ||||
|
Constructionborrower, who owns the
Commercial real estate (“CRE”) —includes
rental rates, as well as the financialhealth of the borrower.
(In thousands) | Current | Accruing
30-89 Days
Past Due | Accruing
Greater than
90 days | Total
Accruing
Loans | Non-
Accrual | Total
Loans | ||||||||||||||||||||||
| ||||||||||||||||||||||||||||
September 30, 2017: | ||||||||||||||||||||||||||||
Commercial and industrial | $ | 50,004 | 64 | — | 50,068 | 33 | $ | 50,101 | ||||||||||||||||||||
Construction and land development | 47,280 | 175 | — | 47,455 | — | 47,455 | ||||||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||||||||||
Owner occupied | 41,633 | — | — | 41,633 | — | 41,633 | ||||||||||||||||||||||
Multi-family | 47,794 | — | — | 47,794 | — | 47,794 | ||||||||||||||||||||||
Other | 140,453 | — | — | 140,453 | 2,500 | 142,953 | ||||||||||||||||||||||
| ||||||||||||||||||||||||||||
Total commercial real estate | 229,880 | — | — | 229,880 | 2,500 | 232,380 | ||||||||||||||||||||||
Residential real estate: | ||||||||||||||||||||||||||||
Consumer mortgage | 62,300 | 403 | — | 62,703 | 353 | 63,056 | ||||||||||||||||||||||
Investment property | 46,993 | 110 | — | 47,103 | — | 47,103 | ||||||||||||||||||||||
| ||||||||||||||||||||||||||||
Total residential real estate | 109,293 | 513 | — | 109,806 | 353 | 110,159 | ||||||||||||||||||||||
Consumer installment | 9,823 | 33 | 5 | 9,861 | 16 | 9,877 | ||||||||||||||||||||||
| ||||||||||||||||||||||||||||
Total | $ | 446,280 | 785 | 5 | 447,070 | 2,902 | $ | 449,972 | ||||||||||||||||||||
| ||||||||||||||||||||||||||||
December 31, 2016: | ||||||||||||||||||||||||||||
Commercial and industrial | $ | 49,747 | 66 | — | 49,813 | 37 | $ | 49,850 | ||||||||||||||||||||
Construction and land development | 41,223 | 395 | — | 41,618 | 32 | 41,650 | ||||||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||||||||||
Owner occupied | 49,564 | 43 | — | 49,607 | 138 | 49,745 | ||||||||||||||||||||||
Multi-family | 46,998 | — | — | 46,998 | — | 46,998 | ||||||||||||||||||||||
Other | 121,608 | 199 | — | 121,807 | 1,889 | 123,696 | ||||||||||||||||||||||
| ||||||||||||||||||||||||||||
Total commercial real estate | 218,170 | 242 | — | 218,412 | 2,027 | 220,439 | ||||||||||||||||||||||
Residential real estate: | ||||||||||||||||||||||||||||
Consumer mortgage | 64,059 | 1,282 | — | 65,341 | 223 | 65,564 | ||||||||||||||||||||||
Investment property | 45,243 | 19 | — | 45,262 | 29 | 45,291 | ||||||||||||||||||||||
| ||||||||||||||||||||||||||||
Total residential real estate | 109,302 | 1,301 | — | 110,603 | 252 | 110,855 | ||||||||||||||||||||||
Consumer installment | 8,652 | 38 | — | 8,690 | 22 | 8,712 | ||||||||||||||||||||||
| ||||||||||||||||||||||||||||
Total | $ | 427,094 | 2,042 | — | 429,136 | 2,370 | $ | 431,506 | ||||||||||||||||||||
|
2020.
charged
-off.September 30, 2017 | ||||||||||||||||||||||||
(In thousands) | Commercial and industrial |
Construction and land development | Commercial real estate | Residential real estate | Consumer installment | Total | ||||||||||||||||||
| ||||||||||||||||||||||||
Quarter ended: | ||||||||||||||||||||||||
Beginning balance | $ | 677 | 874 | 2,121 | 1,119 | 174 | $ | 4,965 | ||||||||||||||||
Charge-offs | (449 | ) | — | — | (30 | ) | (10 | ) | (489) | |||||||||||||||
Recoveries | 39 | 133 | — | 20 | 2 | 194 | ||||||||||||||||||
| ||||||||||||||||||||||||
Net (charge-offs) recoveries | (410 | ) | 133 | — | (10 | ) | (8 | ) | (295) | |||||||||||||||
Provision for loan losses | 237 | (156 | ) | (60 | ) | (32 | ) | 11 | — | |||||||||||||||
| ||||||||||||||||||||||||
Ending balance | $ | 504 | 851 | 2,061 | 1,077 | 177 | $ | 4,670 | ||||||||||||||||
| ||||||||||||||||||||||||
Nine months ended: | ||||||||||||||||||||||||
Beginning balance | $ | 540 | 812 | 2,071 | 1,107 | 113 | $ | 4,643 | ||||||||||||||||
Charge-offs | (449 | ) | — | — | (108 | ) | (16 | ) | (573) | |||||||||||||||
Recoveries | 45 | 347 | — | 97 | 11 | 500 | ||||||||||||||||||
| ||||||||||||||||||||||||
Net (charge-offs) recoveries | (404 | ) | 347 | — | (11 | ) | (5 | ) | (73) | |||||||||||||||
Provision for loan losses | 368 | (308 | ) | (10 | ) | (19 | ) | 69 | 100 | |||||||||||||||
| ||||||||||||||||||||||||
Ending balance | $ | 504 | 851 | 2,061 | 1,077 | 177 | $ | 4,670 | ||||||||||||||||
| ||||||||||||||||||||||||
September 30, 2016 | ||||||||||||||||||||||||
(In thousands) | Commercial and industrial |
Construction and land development | Commercial real estate | Residential real estate | Consumer installment | Total | ||||||||||||||||||
| ||||||||||||||||||||||||
Quarter ended: | ||||||||||||||||||||||||
Beginning balance | $ | 506 | 744 | 2,092 | 1,061 | 125 | $ | 4,528 | ||||||||||||||||
Charge-offs | — | — | — | (7 | ) | (1 | ) | (8) | ||||||||||||||||
Recoveries | 3 | 5 | — | 49 | 1 | 58 | ||||||||||||||||||
| ||||||||||||||||||||||||
Net recoveries | 3 | 5 | — | 42 | — | 50 | ||||||||||||||||||
Provision for loan losses | 6 | (76 | ) | 140 | (83 | ) | 13 | — | ||||||||||||||||
| ||||||||||||||||||||||||
Ending balance | $ | 515 | 673 | 2,232 | 1,020 | 138 | $ | 4,578 | ||||||||||||||||
| ||||||||||||||||||||||||
Nine months ended: | ||||||||||||||||||||||||
Beginning balance | $ | 523 | 669 | 1,879 | 1,059 | 159 | $ | 4,289 | ||||||||||||||||
Charge-offs | (83 | ) | — | (194 | ) | (162 | ) | (29 | ) | (468) | ||||||||||||||
Recoveries | 26 | 1,207 | — | 115 | 9 | 1,357 | ||||||||||||||||||
| ||||||||||||||||||||||||
Net (charge-offs) recoveries | (57 | ) | 1,207 | (194 | ) | (47 | ) | (20 | ) | 889 | ||||||||||||||
Provision for loan losses | 49 | (1,203 | ) | 547 | 8 | (1 | ) | (600) | ||||||||||||||||
| ||||||||||||||||||||||||
Ending balance | $ | 515 | 673 | 2,232 | 1,020 | 138 | $ | 4,578 | ||||||||||||||||
|
Collectively evaluated (1) | Individually evaluated (2) | Total | ||||||||||||||||||||||||
(In thousands) |
Allowance
for loan
losses |
Recorded
investment
in loans |
Allowance
for loan
losses |
Recorded
investment
in loans |
Allowance
for loan
losses |
Recorded
investment
in loans | ||||||||||||||||||||
| ||||||||||||||||||||||||||
September 30, 2017: | ||||||||||||||||||||||||||
Commercial and industrial | $ | 471 | 50,068 | 33 | 33 | 504 | 50,101 | |||||||||||||||||||
Construction and land development | 851 | 47,455 | — | — | 851 | 47,455 | ||||||||||||||||||||
Commercial real estate | 2,045 | 229,700 | 16 | 2,680 | 2,061 | 232,380 | ||||||||||||||||||||
Residential real estate | 1,077 | 110,159 | — | — | 1,077 | 110,159 | ||||||||||||||||||||
Consumer installment | 177 | 9,877 | — | — | 177 | 9,877 | ||||||||||||||||||||
| ||||||||||||||||||||||||||
Total | $ | 4,621 | 447,259 | 49 | 2,713 | 4,670 | 449,972 | |||||||||||||||||||
| ||||||||||||||||||||||||||
September 30, 2016: | ||||||||||||||||||||||||||
Commercial and industrial | $ | 515 | 50,858 | — | 23 | 515 | 50,881 | |||||||||||||||||||
Construction and land development | 673 | 43,959 | — | 45 | 673 | 44,004 | ||||||||||||||||||||
Commercial real estate | 2,196 | 209,840 | 36 | 1,718 | 2,232 | 211,558 | ||||||||||||||||||||
Residential real estate | 1,020 | 112,303 | — | — | 1,020 | 112,303 | ||||||||||||||||||||
Consumer installment | 138 | 8,996 | — | — | 138 | 8,996 | ||||||||||||||||||||
| ||||||||||||||||||||||||||
Total | $ | 4,542 | 425,956 | 36 | 1,786 | 4,578 | 427,742 | |||||||||||||||||||
|
2020.
Special Mention Substandard Accruing September 30, 2017: Commercial and industrial Construction and land development Commercial real estate: Owner occupied Multi-family Other Total commercial real estate Residential real estate: Consumer mortgage Investment property Total residential real estate Consumer installment Total December 31, 2016: Commercial and industrial Construction and land development Commercial real estate: Owner occupied Multi-family Other Total commercial real estate Residential real estate: Consumer mortgage Investment property Total residential real estate Consumer installment Total (In thousands) Pass Nonaccrual Total loans $ 49,817 121 130 33 $ 50,101 46,778 404 273 — 47,455 41,048 244 341 — 41,633 47,794 — — — 47,794 139,671 356 426 2,500 142,953 228,513 600 767 2,500 232,380 57,087 2,032 3,584 353 63,056 46,054 109 940 — 47,103 103,141 2,141 4,524 353 110,159 9,694 71 96 16 9,877 $ 437,943 3,337 5,790 2,902 $ 449,972 $ 49,558 22 233 37 $ 49,850 41,165 113 340 32 41,650 48,788 414 405 138 49,745 46,998 — — — 46,998 121,326 32 449 1,889 123,696 217,112 446 854 2,027 220,439 59,450 2,613 3,278 223 65,564 44,109 105 1,048 29 45,291 103,559 2,718 4,326 252 110,855 8,580 20 90 22 8,712 $ 419,974 3,319 5,843 2,370 $ 431,506
September 30, 2017 | ||||||||||||||||||||
(In thousands) | Unpaid principal balance (1) |
Charge-offs and payments applied (2) | Recorded investment (3) | Related allowance | ||||||||||||||||
|
|
| ||||||||||||||||||
With no allowance recorded: | ||||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||
Other | $ | 3,590 | (1,090) | 2,500 | ||||||||||||||||
| ||||||||||||||||||||
Total commercial real estate | 3,590 | (1,090) | 2,500 | |||||||||||||||||
| ||||||||||||||||||||
Total | $ | 3,590 | (1,090) | 2,500 | ||||||||||||||||
| ||||||||||||||||||||
With allowance recorded: |
| |||||||||||||||||||
Commercial and industrial | $ | 53 | (20) | 33 | $ | 33 | ||||||||||||||
Commercial real estate: | ||||||||||||||||||||
Owner occupied | 180 | — | 180 | 16 | ||||||||||||||||
|
|
| ||||||||||||||||||
Total commercial real estate | 180 | — | 180 | 16 | ||||||||||||||||
|
|
| ||||||||||||||||||
Total | 233 | (20) | 213 | 49 | ||||||||||||||||
|
|
| ||||||||||||||||||
Total impaired loans | $ | 3,823 | (1,110) | 2,713 | $ | 49 | ||||||||||||||
|
|
|
December 31, 2016 | ||||||||||||||||||||
(In thousands) | Unpaid principal balance (1) |
Charge-offs and payments applied (2) | Recorded investment (3) | Related allowance | ||||||||||||||||
|
|
| ||||||||||||||||||
With no allowance recorded: | ||||||||||||||||||||
Commercial and industrial | $ | 15 | — | 15 | ||||||||||||||||
Construction and land development | 140 | (108) | 32 | |||||||||||||||||
Commercial real estate: | ||||||||||||||||||||
Other | 2,874 | (984) | 1,890 | |||||||||||||||||
| ||||||||||||||||||||
Total commercial real estate | 2,874 | (984) | 1,890 | |||||||||||||||||
| ||||||||||||||||||||
Total | $ | 3,029 | (1,092) | 1,937 | ||||||||||||||||
| ||||||||||||||||||||
With allowance recorded: | ||||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||
Owner occupied | $ | 193 | — | 193 | $ | 31 | ||||||||||||||
|
|
| ||||||||||||||||||
Total commercial real estate | 193 | — | 193 | 31 | ||||||||||||||||
|
|
| ||||||||||||||||||
Total | 193 | — | 193 | 31 | ||||||||||||||||
|
|
| ||||||||||||||||||
Total impaired loans | $ | 3,222 | (1,092) | 2,130 | $ | 31 | ||||||||||||||
|
|
|
2020.
Quarter ended September 30, 2017 | Nine months ended September 30, 2017 | |||||||||||||||||
Average | Total interest | Average | Total interest | |||||||||||||||
recorded | income | recorded | income | |||||||||||||||
(In thousands) |
investment | recognized | investment | recognized | ||||||||||||||
| ||||||||||||||||||
Impaired loans: |
| |||||||||||||||||
Commercial and industrial | $ | 126 | — | 55 | — | |||||||||||||
Construction and land development | — | — | 15 | — | ||||||||||||||
Commercial real estate: | ||||||||||||||||||
Owner occupied | 182 | 2 | 186 | 8 | ||||||||||||||
Other | 2,148 | — | 1,971 | — | ||||||||||||||
| ||||||||||||||||||
Total commercial real estate | 2,330 | 2 | 2,157 | 8 | ||||||||||||||
| ||||||||||||||||||
Total | $ | 2,456 | 2 | 2,227 | 8 | |||||||||||||
| ||||||||||||||||||
Quarter ended September 30, 2016 | Nine months ended September 30, 2016 | |||||||||||||||||
Average | Total interest | Average | Total interest | |||||||||||||||
recorded | income | recorded | income | |||||||||||||||
(In thousands) |
investment | recognized | investment | recognized | ||||||||||||||
| ||||||||||||||||||
Impaired loans: |
| |||||||||||||||||
Commercial and industrial | $ | 26 | — | 36 | 2 | |||||||||||||
Construction and land development | 48 | — | 111 | — | ||||||||||||||
Commercial real estate: | ||||||||||||||||||
Owner occupied | 465 | 3 | 850 | 29 | ||||||||||||||
Other | 1,532 | — | 1,662 | — | ||||||||||||||
| ||||||||||||||||||
Total commercial real estate | 1,997 | 3 | 2,512 | 29 | ||||||||||||||
| ||||||||||||||||||
Total | $ | 2,071 | 3 | 2,659 | 31 | |||||||||||||
|
TDRs | ||||||||||||||||||||
Related | ||||||||||||||||||||
(In thousands) | Accruing | Nonaccrual | Total | Allowance | ||||||||||||||||
|
|
| ||||||||||||||||||
September 30, 2017 | ||||||||||||||||||||
Commercial and industrial | $ | — | 33 | 33 | $ | 33 | ||||||||||||||
Commercial real estate: | ||||||||||||||||||||
Owner occupied | 180 | — | 180 | 16 | ||||||||||||||||
Other | — | 1,693 | 1,693 | — | ||||||||||||||||
|
|
| ||||||||||||||||||
Total commercial real estate | 180 | 1,693 | 1,873 | 16 | ||||||||||||||||
|
|
| ||||||||||||||||||
Total | $ | 180 | 1,726 | 1,906 | $ | 49 | ||||||||||||||
|
|
| ||||||||||||||||||
December 31, 2016 | ||||||||||||||||||||
Commercial and industrial | $ | 15 | — | 15 | $ | — | ||||||||||||||
Construction and land development | — | 32 | 32 | — | ||||||||||||||||
Commercial real estate: | ||||||||||||||||||||
Owner occupied | 193 | — | 193 | 31 | ||||||||||||||||
Other | — | 1,818 | 1,818 | — | ||||||||||||||||
|
|
| ||||||||||||||||||
Total commercial real estate | 193 | 1,818 | 2,011 | 31 | ||||||||||||||||
|
|
| ||||||||||||||||||
Total | $ | 208 | 1,850 | 2,058 | $ | 31 | ||||||||||||||
|
|
|
The following table summarizes2020,
Quarter ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||
Pre- |
Post - |
Pre- |
Post - | |||||||||||||||||||||
modification |
modification |
modification |
modification | |||||||||||||||||||||
Number |
outstanding |
outstanding |
Number |
outstanding |
outstanding | |||||||||||||||||||
of |
recorded |
recorded |
of |
recorded |
recorded | |||||||||||||||||||
(Dollars in thousands) |
contracts |
investment |
investment |
contracts |
investment |
investment | ||||||||||||||||||
| ||||||||||||||||||||||||
2017: |
| |||||||||||||||||||||||
Commercial and industrial | 1 | $ | 34 | 34 | 1 | $ | 34 | 34 | ||||||||||||||||
Commercial real estate: | ||||||||||||||||||||||||
Other | — | — | — | 1 | 1,275 | 1,266 | ||||||||||||||||||
| ||||||||||||||||||||||||
Total commercial real estate | — | — | — | 1 | 1,275 | 1,266 | ||||||||||||||||||
| ||||||||||||||||||||||||
Total | 1 | $ | 34 | 34 | 2 | $ | 1,309 | 1,300 | ||||||||||||||||
| ||||||||||||||||||||||||
2016: |
| |||||||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||||||
Other | — | — | — | 1 | $ | 1,509 | 1,509 | |||||||||||||||||
| ||||||||||||||||||||||||
Total commercial real estate | — | — | — | 1 | 1,509 | 1,509 | ||||||||||||||||||
| ||||||||||||||||||||||||
Total | — | — | — | 1 | $ | 1,509 | 1,509 | |||||||||||||||||
|
The majority of the loans modified in a TDR during the quarter and nine months ended September 30, 2017 and 2016, included permitting delays in required payments of principal and/or interest or where the only concession granted by the Company was that the interest rate at renewal was considered to be less than a market rate.
2020.
Quarter ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||
(Dollars in thousands) | 2017 | 2016 | 2017 | 2016 | ||||||||||||||||||||
| ||||||||||||||||||||||||
MSRs, net: | ||||||||||||||||||||||||
Beginning balance | $ | 1,762 | $ | 2,146 | $ | 1,952 | $ | 2,316 | ||||||||||||||||
Additions, net | 72 | 97 | 165 | 242 | ||||||||||||||||||||
Amortization expense | (131 | ) | (192 | ) | (415 | ) | (506 | ) | ||||||||||||||||
(Increase) decrease in valuation allowance | — | (20 | ) | 1 | (21 | ) | ||||||||||||||||||
| ||||||||||||||||||||||||
Ending balance | $ | 1,703 | $ | 2,031 | $ | 1,703 | $ | 2,031 | ||||||||||||||||
| ||||||||||||||||||||||||
Valuation allowance included in MSRs, net: |
| |||||||||||||||||||||||
Beginning of period | $ | — | $ | 1 | $ | 1 | $ | — | ||||||||||||||||
End of period | — | 21 | — | 21 | ||||||||||||||||||||
| ||||||||||||||||||||||||
Fair value of amortized MSRs: | ||||||||||||||||||||||||
Beginning of period | $ | 2,520 | $ | 2,539 | $ | 2,678 | $ | 3,086 | ||||||||||||||||
End of period | 2,441 | 2,455 | 2,441 | 2,455 | ||||||||||||||||||||
|
NOTE 7: DERIVATIVE INSTRUMENTS
Financial derivatives quarters ended March 31, 2021 and 2020
Interest rate swap agreements involve the risk of dealing with counterparties and their ability to meet contractual terms. When the fair value of a derivative instrument is positive, this generally indicates that the counterparty or customer owes the Company, and results in credit risk to the Company. When the fair value of a derivative instrument is negative, the Company owes the customer or counterparty and therefore, has no credit risk.
A summary of the Company’s interest rate swap agreements at September 30, 2017 and December 31, 2016 is presented below.
Other | Other | |||||||||||||||
Assets | Liabilities | |||||||||||||||
Estimated | Estimated | |||||||||||||||
(Dollars in thousands) | Notional | Fair Value | Fair Value | |||||||||||||
| ||||||||||||||||
September 30, 2017: | ||||||||||||||||
Pay fixed / receive variable | $ | 3,704 | — | 96 | ||||||||||||
Pay variable / receive fixed | 3,704 | 96 | — | |||||||||||||
| ||||||||||||||||
Total interest rate swap agreements | $ | 7,408 | 96 | 96 | ||||||||||||
| ||||||||||||||||
December 31, 2016: | ||||||||||||||||
Pay fixed / receive variable | $ | 3,967 | — | 241 | ||||||||||||
Pay variable / receive fixed | 3,967 | 241 | — | |||||||||||||
| ||||||||||||||||
Total interest rate swap agreements | $ | 7,934 | 241 | 241 | ||||||||||||
|
period
Interest rate swap agreements
The carrying amount of interest rate swap agreements was included in other assets and accrued expenses and other liabilities on the accompanying consolidated balance sheets. The fair value measurements for our interest rate swap agreements were based on information obtained from a third party bank. This information is periodically tested by the Company and validated against other third party valuations. If needed, other third party market participants may be utilized to corroborate the fair value measurements for our interest rate swap agreements. The Company classified these derivative assets and liabilities within Level 2 of the valuation hierarchy. These swaps qualify as derivatives, but are not designated as hedging instruments.
Quoted Prices in
| Significant
| |||||||||||||||
Active Markets
| Other
| Significant
| ||||||||||||||
for
| Observable
| Unobservable
| ||||||||||||||
Identical Assets
| Inputs
| Inputs
| ||||||||||||||
(Dollars in thousands) | Amount | (Level 1) | (Level 2) | (Level 3) | ||||||||||||
| ||||||||||||||||
September 30, 2017: | ||||||||||||||||
Securitiesavailable-for-sale: | ||||||||||||||||
Agency obligations | $ | 53,505 | — | 53,505 | — | |||||||||||
Agency RMBS | 139,806 | — | 139,806 | — | ||||||||||||
State and political subdivisions | 71,860 | — | 71,860 | — | ||||||||||||
| ||||||||||||||||
Total securitiesavailable-for-sale | 265,171 | — | 265,171 | — | ||||||||||||
Other assets(1) | 96 | — | 96 | — | ||||||||||||
| ||||||||||||||||
Total assets at fair value | $ | 265,267 | — | 265,267 | — | |||||||||||
| ||||||||||||||||
Other liabilities(1) | $ | 96 | — | 96 | — | |||||||||||
| ||||||||||||||||
Total liabilities at fair value | $ | 96 | — | 96 | — | |||||||||||
| ||||||||||||||||
December 31, 2016: | ||||||||||||||||
Securitiesavailable-for-sale: | ||||||||||||||||
Agency obligations | $ | 45,471 | — | 45,471 | — | |||||||||||
Agency RMBS | 127,787 | — | 127,787 | — | ||||||||||||
State and political subdivisions | 70,314 | — | 70,314 | — | ||||||||||||
| ||||||||||||||||
Total securitiesavailable-for-sale | 243,572 | — | 243,572 | — | ||||||||||||
Other assets(1) | 241 | — | 241 | — | ||||||||||||
| ||||||||||||||||
Total assets at fair value | $ | 243,813 | — | 243,813 | — | |||||||||||
| ||||||||||||||||
Other liabilities(1) | $ | 241 | — | 241 | — | |||||||||||
| ||||||||||||||||
Total liabilities at fair value | $ | 241 | — | 241 | — | |||||||||||
|
(1)Represents the
Other real estate owned
Other real estate owned, consisting of properties obtained through foreclosure or in satisfaction of loans, are initially recorded at the lower of the loan’s carrying amount or the fair value of collateral less costs to sell upon transfer of the loans to other real estate. Subsequently, other real estate is carried at the lower of carrying value or fair value less costs to sell. Fair values are generally based on third party appraisals of the property and are classified within Level 3 of the fair value hierarchy. The appraisals are sometimes further discounted based on management’s historical knowledge, and/or changes in market conditions from the date of the most recent appraisal, and/or management’s expertise and knowledge of the customer and the customer’s business. Such discounts are typically significant unobservable inputs for determining fair value. In cases where the carrying amount exceeds the fair value, less costs to sell, a loss is recognized in noninterest expense.
Mortgage servicing rights,
Quoted Prices in | ||||||||||||||||
Active Markets | Other | Significant | ||||||||||||||
for | Observable | Unobservable | ||||||||||||||
Carrying | Identical Assets | Inputs | Inputs | |||||||||||||
(Dollars in thousands) | Amount | (Level 1) | (Level 2) | (Level 3) | ||||||||||||
| ||||||||||||||||
September 30, 2017: | ||||||||||||||||
Loans held for sale | $ | 924 | — | 924 | — | |||||||||||
Loans, net(1) | 2,664 | — | — | 2,664 | ||||||||||||
Other real estate owned | 103 | — | — | 103 | ||||||||||||
Other assets(2) | 1,703 | — | — | 1,703 | ||||||||||||
| ||||||||||||||||
Total assets at fair value | $ | 5,394 | — | 924 | 4,470 | |||||||||||
| ||||||||||||||||
December 31, 2016: | ||||||||||||||||
Loans held for sale | $ | 1,497 | — | 1,497 | — | |||||||||||
Loans, net(1) | 2,099 | — | — | 2,099 | ||||||||||||
Other real estate owned | 152 | — | — | 152 | ||||||||||||
Other assets(2) | 1,952 | — | — | 1,952 | ||||||||||||
| ||||||||||||||||
Total assets at fair value | $ | 5,700 | — | 1,497 | 4,203 | |||||||||||
|
losses
Weighted | ||||||||||
Carrying | Average | |||||||||
(Dollars in thousands) | Amount | Valuation Technique | Significant Unobservable Input | of Input | ||||||
|
|
|
|
| ||||||
Nonrecurring: | ||||||||||
Impaired loans | $ | 2,664 | Appraisal | Appraisal discounts (%) | 16.9% | |||||
Other real estate owned | 103 | Appraisal | Appraisal discounts (%) | 18.9% | ||||||
Mortgage servicing rights, net | 1,703 | Discounted cash flow | Prepayment speed or CPR (%) | 11.0% | ||||||
Discount rate (%) | 10.0% | |||||||||
|
below
loans was measured using an exitprice notion.
Long-term debt
The fair value of the Company’s fixed rate long-term debt is estimated using discounted cash flows based on estimated current market rates for similar types of borrowing arrangements. The carrying amount of the Company’s variable rate long-term debt approximates its fair value.
Fair Value Hierarchy | ||||||||||||||||||||||
Carrying |
Estimated |
Level 1 |
Level 2 |
Level 3 | ||||||||||||||||||
(Dollars in thousands) | amount | fair value | inputs | inputs | Inputs | |||||||||||||||||
| ||||||||||||||||||||||
September 30, 2017: | ||||||||||||||||||||||
Financial Assets: | ||||||||||||||||||||||
Loans, net (1) | $ | 444,708 | $ | 445,776 | $ | — | $ | — | $ | 445,776 | ||||||||||||
Loans held for sale | 924 | 931 | — | 931 | — | |||||||||||||||||
Financial Liabilities: | ||||||||||||||||||||||
Time Deposits | $ | 194,131 | $ | 192,463 | $ | — | $ | 192,463 | $ | — | ||||||||||||
Long-term debt | 3,217 | 3,217 | — | 3,217 | — | |||||||||||||||||
| ||||||||||||||||||||||
December 31, 2016: | ||||||||||||||||||||||
Financial Assets: | ||||||||||||||||||||||
Loans, net (1) | $ | 426,303 | $ | 428,446 | $ | — | $ | — | $ | 428,446 | ||||||||||||
Loans held for sale | 1,497 | 1,507 | — | 1,507 | — | |||||||||||||||||
Financial Liabilities: | ||||||||||||||||||||||
Time Deposits | $ | 208,137 | $ | 207,791 | $ | — | $ | 207,791 | $ | — | ||||||||||||
Long-term debt | 3,217 | 3,217 | — | 3,217 | — | |||||||||||||||||
|
The fair value of loans was measured using an exit price notion.
General
2020.
Certain
Business
Section 21E of the Securities Exchange
Quarter ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||
(Dollars in thousands, except per share amounts) | 2017 | 2016 | 2017 | 2016 | ||||||||||||||||||||
| ||||||||||||||||||||||||
Net interest income (a) | $ | 6,565 | $ | 5,924 | $ | 19,156 | $ | 17,957 | ||||||||||||||||
Less:tax-equivalent adjustment | 304 | 316 | 905 | 960 | ||||||||||||||||||||
| ||||||||||||||||||||||||
Net interest income (GAAP) | 6,261 | 5,608 | 18,251 | 16,997 | ||||||||||||||||||||
Noninterest income | 968 | 1,063 | 2,597 | 2,890 | ||||||||||||||||||||
| ||||||||||||||||||||||||
Total revenue | 7,229 | 6,671 | 20,848 | 19,887 | ||||||||||||||||||||
Provision for loan losses | — | — | 100 | (600) | ||||||||||||||||||||
Noninterest expense | 4,225 | 3,980 | 12,358 | 12,110 | ||||||||||||||||||||
Income tax expense | 868 | 740 | 2,369 | 2,304 | ||||||||||||||||||||
| ||||||||||||||||||||||||
Net earnings | $ | 2,136 | $ | 1,951 | $ | 6,021 | $ | 6,073 | ||||||||||||||||
| ||||||||||||||||||||||||
Basic and diluted earnings per share | $ | 0.59 | $ | 0.54 | $ | 1.65 | $ | 1.67 | ||||||||||||||||
|
"
2020.
The Company recorded a $0.1 millionhad no provision for loan losses forduring the first nine months quarter
Noninterestvarious expenses related to the redevelopment of the
Income tax expense 2021
respectively.
standards with a total
risk-based capital ratio of 18.25%, a tier 1 leverage ratioofthose occur.
charged
-off.continuing
COVID-19 pandemic.Other real estate owned (“OREO”),
Nine months ended September 30, | ||||||||||||||||
2017 | 2016 | |||||||||||||||
(Dollars in thousands) |
Average
Balance |
Yield/
Rate |
Average
Balance |
Yield/
Rate | ||||||||||||
|
|
|
|
| ||||||||||||
Loans and loans held for sale | $ | 437,707 | 4.70% | $ | 432,628 | 4.75% | ||||||||||
Securities - taxable | 198,842 | 2.15% | 161,484 | 2.00% | ||||||||||||
Securities -tax-exempt | 69,770 | 5.10% | 67,701 | 5.57% | ||||||||||||
|
|
|
|
| ||||||||||||
Total securities | 268,612 | 2.92% | 229,185 | 3.06% | ||||||||||||
Federal funds sold | 33,430 | 1.00% | 53,420 | 0.50% | ||||||||||||
Interest bearing bank deposits | 45,310 | 1.03% | 71,384 | 0.51% | ||||||||||||
|
|
|
|
| ||||||||||||
Total interest-earning assets | 785,059 | 3.72% | 786,617 | 3.58% | ||||||||||||
|
|
|
|
| ||||||||||||
Deposits: | ||||||||||||||||
NOW | 125,968 | 0.19% | 123,049 | 0.31% | ||||||||||||
Savings and money market | 232,076 | 0.37% | 232,893 | 0.38% | ||||||||||||
Time Deposits | 200,690 | 1.18% | 213,659 | 1.24% | ||||||||||||
|
|
|
|
| ||||||||||||
Total interest-bearing deposits | 558,734 | 0.62% | 569,601 | 0.69% | ||||||||||||
Short-term borrowings | 3,626 | 0.52% | 2,872 | 0.51% | ||||||||||||
Long-term debt | 3,217 | 3.87% | 7,217 | 3.52% | ||||||||||||
|
|
|
|
| ||||||||||||
Total interest-bearing liabilities | 565,577 | 0.64% | 579,690 | 0.72% | ||||||||||||
|
|
|
|
| ||||||||||||
Net interest income and margin(tax-equivalent) | $ | 19,156 | 3.26% | $ | 17,957 | 3.05% | ||||||||||
|
|
|
|
|
Thetax-equivalent yield on total interest-earning assets increased decreased
the
interest
earning assets.opportunities.
Quarter ended September 30, | Nine months ended September 30, | |||||||||||||||||||
(Dollars in thousands) |
2017 |
2016 |
2017 |
2016 | ||||||||||||||||
| ||||||||||||||||||||
Service charges on deposit accounts | $ | 191 | $ | 197 | $ | 563 | $ | 588 | ||||||||||||
Mortgage lending income | 254 | 246 | 558 | 740 | ||||||||||||||||
Bank-owned life insurance | 112 | 114 | 329 | 339 | ||||||||||||||||
Securities gains, net | 49 | 148 | 51 | 148 | ||||||||||||||||
Other | 362 | 358 | 1,096 | 1,075 | ||||||||||||||||
| ||||||||||||||||||||
Total noninterest income | $ | 968 | $ | 1,063 | $ | 2,597 | $ | 2,890 | ||||||||||||
|
activity as a result of
theQuarter ended September 30, | Nine months ended September 30, | |||||||||||||||
(Dollars in thousands) | 2017 | 2016 | 2017 | 2016 | ||||||||||||
| ||||||||||||||||
Origination income | $ | 190 | $ | 242 | $ | 366 | $ | 609 | ||||||||
Servicing fees, net | 64 | 24 | 191 | 152 | ||||||||||||
(Increase) decrease in MSR valuation allowance | — | (20 | ) | 1 | (21) | |||||||||||
| ||||||||||||||||
Total mortgage lending income | $ | 254 | $ | 246 | $ | 558 | $ | 740 | ||||||||
|
Mortgage
Securities gains, net consists of realized gainsthe
Noninterest Expense
Quarter ended September 30, | Nine months ended September 30, | |||||||||||||||
(Dollars in thousands) | 2017 | 2016 | 2017 | 2016 | ||||||||||||
| ||||||||||||||||
Salaries and benefits | $ | 2,516 | $ | 2,471 | $ | 7,289 | $ | 7,322 | ||||||||
Net occupancy and equipment | 385 | 389 | 1,117 | 1,107 | ||||||||||||
Professional fees | 276 | 220 | 760 | 625 | ||||||||||||
FDIC and other regulatory assessments | 79 | 76 | 257 | 320 | ||||||||||||
Other real estate owned, net | 4 | (194 | ) | (5 | ) | (217) | ||||||||||
Other | 965 | 1,018 | 2,940 | 2,953 | ||||||||||||
| ||||||||||||||||
Total noninterest expense | $ | 4,225 | $ | 3,980 | $ | 12,358 | $ | 12,110 | ||||||||
|
Salaries and benefits decreasednew mortgage loans.
Professional
The increaseredevelopment of the Company’s
downtown Auburn.
2020.
2017 | 2016 | |||||||||||||||||||||
Third |
Second |
First |
Fourth |
Third | ||||||||||||||||||
(In thousands) | Quarter | Quarter | Quarter | Quarter | Quarter | |||||||||||||||||
| ||||||||||||||||||||||
Commercial and industrial | $ | 50,101 | 50,974 | 50,228 | 49,850 | 50,881 | ||||||||||||||||
Construction and land development | 47,455 | 46,386 | 45,098 | 41,650 | 44,004 | |||||||||||||||||
Commercial real estate | 232,380 | 220,863 | 218,739 | 220,439 | 211,558 | |||||||||||||||||
Residential real estate | 110,159 | 110,288 | 108,096 | 110,855 | 112,303 | |||||||||||||||||
Consumer installment | 9,877 | 9,409 | 9,032 | 8,712 | 8,996 | |||||||||||||||||
| ||||||||||||||||||||||
Total loans | 449,972 | 437,920 | 431,193 | 431,506 | 427,742 | |||||||||||||||||
Less: unearned income | (594 | ) | (633 | ) | (640 | ) | (560 | ) | (539 | ) | ||||||||||||
| ||||||||||||||||||||||
Loans, net of unearned income | $ | 449,378 | 437,287 | 430,553 | 430,946 | 427,203 | ||||||||||||||||
|
March 31, 2021.
2020.
no
September 30, | December 31, | |||||||
(In thousands) | 2017 | 2016 | ||||||
| ||||||||
Multi-family residential properties | $ | 47,794 | $ | 46,998 | ||||
Lessors of 1 to 4 family residential properties | 47,103 | 45,291 | ||||||
Shopping centers | 41,118 | 40,925 | ||||||
Office buildings | 24,708 | 22,366 | ||||||
Hotel/motel | 22,691 | 19,312 | ||||||
|
2020.
�� | 2017 | 2016 | ||||||||||||||||||||
Third | Second | First | Fourth | Third | ||||||||||||||||||
(Dollars in thousands) |
Quarter | Quarter | Quarter | Quarter | Quarter | |||||||||||||||||
| ||||||||||||||||||||||
Balance at beginning of period | $ | 4,965 | 4,588 | 4,643 | 4,578 | 4,528 | ||||||||||||||||
Charge-offs: | ||||||||||||||||||||||
Commercial and industrial | (449) | — | — | (14) | — | |||||||||||||||||
Residential real estate | (30) | — | (78) | (20) | (7) | |||||||||||||||||
Consumer installment | (10) | (5) | (1) | (38) | (1) | |||||||||||||||||
| ||||||||||||||||||||||
Total charge-offs | (489) | (5) | (79) | (72) | (8) | |||||||||||||||||
Recoveries | 194 | 282 | 24 | 22 | 58 | |||||||||||||||||
| ||||||||||||||||||||||
Net (charge-offs) recoveries | (295) | 277 | (55) | (50) | 50 | |||||||||||||||||
Provision for loan losses | — | 100 | — | 115 | — | |||||||||||||||||
| ||||||||||||||||||||||
Ending balance | $ | 4,670 | 4,965 | 4,588 | 4,643 | 4,578 | ||||||||||||||||
| ||||||||||||||||||||||
as a % of loans | 1.04 | % | 1.14 | 1.07 | 1.08 | 1.07 | ||||||||||||||||
as a % of nonperforming loans | 161 | % | 220 | 198 | 196 | 284 | ||||||||||||||||
Net charge-offs (recoveries) as % of average loans (a) | 0.27 | % | (0.25) | 0.05 | 0.05 | (0.05) | ||||||||||||||||
|
Net charge-offs were $0.1 million, or 0.02% of average loans in the first nine months of 2017, compared to net recoveries of $0.9 million, or 0.27% of average loans in the first nine months of 2016 primarily due to a recovery of $1.2 million from the payoff of one nonperforming construction and land development loan.
The Company’s recorded investment in loans considered impaired was $2.7 million at September 30, 2017 and $2.1 million at December 31, 2016, respectively, with corresponding valuation allowances (included in the allowance for loan losses) of $49 thousand and $31 thousand at each respective date.
2020,
2017 | 2016 | |||||||||||||||
(Dollars in thousands) |
Third
Quarter | Second
Quarter | First
Quarter | Fourth
Quarter | Third
Quarter | |||||||||||
| ||||||||||||||||
Nonperforming assets: | ||||||||||||||||
Nonaccrual loans | $ | 2,902 | 2,255 | 2,318 | 2,370 | 1,614 | ||||||||||
Other real estate owned | 103 | 103 | 152 | 152 | 37 | |||||||||||
| ||||||||||||||||
Total nonperforming assets | $ | 3,005 | 2,358 | 2,470 | 2,522 | 1,651 | ||||||||||
| ||||||||||||||||
as a % of loans and other real estate owned | 0.67 % | 0.54 | 0.57 | 0.59 | 0.39 | |||||||||||
as a % of total assets | 0.36 % | 0.28 | 0.29 | 0.30 | 0.19 | |||||||||||
Nonperforming loans as a % of total loans | 0.65 % | 0.52 | 0.54 | 0.55 | 0.38 | |||||||||||
Accruing loans 90 days or more past due | $ | 5 | 42 | — | — | 211 | ||||||||||
|
2017 | 2016 | |||||||||||||||||
Third | Second | First | Fourth | Third | ||||||||||||||
(In thousands) |
Quarter | Quarter | Quarter | Quarter | Quarter | |||||||||||||
| ||||||||||||||||||
Nonaccrual loans: | ||||||||||||||||||
Commercial and industrial | $ | 33 | 34 | 35 | 37 | 38 | ||||||||||||
Construction and land development | — | — | 22 | 32 | 45 | |||||||||||||
Commercial real estate | 2,500 | 1,797 | 1,850 | 2,027 | 1,521 | |||||||||||||
Residential real estate | 353 | 406 | 391 | 252 | 10 | |||||||||||||
Consumer installment | 16 | 18 | 20 | 22 | — | |||||||||||||
| ||||||||||||||||||
Total nonaccrual loans | $ | 2,902 | 2,255 | 2,318 | 2,370 | 1,614 | ||||||||||||
|
At September 30, 2017 there were $5 thousand innonaccrual status compared to $0.5 million at December 31,
2020.
2017 | 2016 | |||||||||||||||||||||
Third | Second | First | Fourth | Third | ||||||||||||||||||
(In thousands) |
Quarter | Quarter | Quarter | Quarter | Quarter | |||||||||||||||||
| ||||||||||||||||||||||
Other real estate owned: | ||||||||||||||||||||||
Commercial: | ||||||||||||||||||||||
Developed lots | $ | — | — | 37 | 37 | — | ||||||||||||||||
Residential | 103 | 103 | 115 | 115 | 37 | |||||||||||||||||
| ||||||||||||||||||||||
Total other real estate owned | $ | 103 | 103 | 152 | 152 | 37 | ||||||||||||||||
|
2020.
2017 | 2016 | |||||||||||||||||||||
Third | Second | First | Fourth | Third | ||||||||||||||||||
(In thousands) |
Quarter | Quarter | Quarter | Quarter | Quarter | |||||||||||||||||
| ||||||||||||||||||||||
Potential problem loans: | ||||||||||||||||||||||
Commercial and industrial | $ | 130 | 609 | 210 | 233 | 356 | ||||||||||||||||
Construction and land development | 273 | 286 | 298 | 340 | 352 | |||||||||||||||||
Commercial real estate | 767 | 1,528 | 795 | 854 | 1,184 | |||||||||||||||||
Residential real estate | 4,524 | 4,416 | 4,285 | 4,326 | 4,423 | |||||||||||||||||
Consumer installment | 96 | 97 | 99 | 90 | 89 | |||||||||||||||||
| ||||||||||||||||||||||
Total potential problem loans | $ | 5,790 | 6,936 | 5,687 | 5,843 | 6,404 | ||||||||||||||||
|
At September 30, 2017, approximately $0.8 million, or 14% of total
The following table is a summary of
2017 | 2016 | |||||||||||||||||||||
Third | Second | First | Fourth | Third | ||||||||||||||||||
(In thousands) |
Quarter | Quarter | Quarter | Quarter | Quarter | |||||||||||||||||
| ||||||||||||||||||||||
Performing loans past due 30 to 89 days: | ||||||||||||||||||||||
Commercial and industrial | $ | 64 | 195 | 1 | 66 | 3 | ||||||||||||||||
Construction and land development | 175 | 2 | 3 | 395 | — | |||||||||||||||||
Commercial real estate | — | 748 | — | 242 | — | |||||||||||||||||
Residential real estate | 513 | 496 | 1,186 | 1,301 | 369 | |||||||||||||||||
Consumer installment | 33 | 25 | 17 | 38 | 40 | |||||||||||||||||
| ||||||||||||||||||||||
Total | $ | 785 | 1,466 | 1,207 | 2,042 | 412 | ||||||||||||||||
|
quarters
.2020.
These increases reflect deposits from2020.
2020.
Long-term debt includes subordinated debentures related to trust preferred securities. 2021 and 2020.
The average rate paid on long-term debt was 3.87% in the first nine months of 2017 and 3.52% in the first nine months of 2016.
2020.
March 31, 2021.
expenses.
Contractual Obligations
Since 2009, we have
In
ASU2016-01,Financial Instruments – Overall: Recognition and Measurement of Financial Assets and Financial Liabilities, enhances the reporting model for financial instruments to provide users of financial statements with more decision-useful information. The ASU addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. Some of the amendments include the following: 1) Require equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income; 2) Simplify the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment; 3) Require public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; 4) Require an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value; among others. For public business entities, the amendments of this ASU are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Although the Company has not finalized its evaluation of the impact of adopting ASU No. 2016-01, adoption is not expected to have a material impact on the Company’s consolidated financial statements. Additionally, for purposes of disclosing the fair value of loans carried at amortized cost, we are evaluating our valuation methods to determine the necessary changes to conform to an “exit price” notion as required by the Standard. Accordingly, the fair value amounts disclosed for such loans may change upon adoption.
ASU2016-02,Leases, requires lessees to recognize the assets and liabilities that arise from leases on the balance sheet. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and aright-of-use asset representing its right to use the underlying asset for lease term. The new guidance is effective for annual and interim reporting periods beginning after December 15, 2018. The amendment should be applied at the beginning of the earliest period presented using a modified retrospective approach with earlier application permitted as of the beginning of an interim or annual reporting period. The Company is currently evaluating the impact this ASU will have on its consolidated financial statements.
ASU2016-13,
ASU2016-15,Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, provides guidance on eight specific cash flow issues where current GAAP is either unclear or does not include specific guidance on classification in the statement of cash flows. The new guidance is effective for annual and interim reporting periods in fiscal years beginning after December 15, 2017. 2016-13.
ASU2016-18,Statementnew standardin January
2017 | 2016 | |||||||||||||||||||
Third | Second | First |
Fourth | Third | ||||||||||||||||
(in thousands) |
Quarter | Quarter | Quarter |
Quarter | Quarter | |||||||||||||||
|
|
| ||||||||||||||||||
Net interest income (GAAP) | $ | 6,261 | 6,101 | 5,889 | 5,735 | 5,608 | ||||||||||||||
Tax-equivalent adjustment | 304 | 301 | 300 | 316 | 316 | |||||||||||||||
|
|
| ||||||||||||||||||
Net interest income(Tax-equivalent) | $ | 6,565 | 6,402 | 6,189 | 6,051 | 5,924 | ||||||||||||||
|
|
| ||||||||||||||||||
Nine months ended September 30, | ||||||||||||||||||||
(In thousands) | 2017 | 2016 | ||||||||||||||||||
| ||||||||||||||||||||
Net interest income (GAAP) | $ | 18,251 | 16,997 | |||||||||||||||||
Tax-equivalent adjustment | 905 | 960 | ||||||||||||||||||
| ||||||||||||||||||||
Net interest income(Tax-equivalent) | $ | 19,156 | 17,957 | |||||||||||||||||
|
2017 | 2016 | |||||||||||||||||||
Third | Second | First | Fourth | Third | ||||||||||||||||
(Dollars in thousands, except per share amounts) | Quarter | Quarter | Quarter | Quarter | Quarter | |||||||||||||||
| ||||||||||||||||||||
Results of Operations | ||||||||||||||||||||
Net interest income (a) | $ | 6,565 | 6,402 | 6,189 | 6,051 | 5,924 | ||||||||||||||
Less:tax-equivalent adjustment | 304 | 301 | 300 | 316 | 316 | |||||||||||||||
| ||||||||||||||||||||
Net interest income (GAAP) | 6,261 | 6,101 | 5,889 | 5,735 | 5,608 | |||||||||||||||
Noninterest income | 968 | 793 | 836 | 493 | 1,063 | |||||||||||||||
| ||||||||||||||||||||
Total revenue | 7,229 | 6,894 | 6,725 | 6,228 | 6,671 | |||||||||||||||
Provision for loan losses | — | 100 | — | 115 | — | |||||||||||||||
Noninterest expense | 4,225 | 4,015 | 4,118 | 3,238 | 3,980 | |||||||||||||||
Income tax expense | 868 | 784 | 717 | 798 | 740 | |||||||||||||||
| ||||||||||||||||||||
Net earnings | $ | 2,136 | 1,995 | 1,890 | 2,077 | 1,951 | ||||||||||||||
| ||||||||||||||||||||
Per share data: | ||||||||||||||||||||
Basic and diluted net earnings | $ | 0.59 | 0.55 | 0.52 | 0.57 | 0.54 | ||||||||||||||
Cash dividends declared | 0.23 | 0.23 | 0.23 | 0.225 | 0.225 | |||||||||||||||
Weighted average shares outstanding: | ||||||||||||||||||||
Basic and diluted | 3,643,659 | 3,643,593 | 3,643,541 | 3,643,523 | 3,643,506 | |||||||||||||||
Shares outstanding, at period end | 3,643,668 | 3,643,643 | 3,643,543 | 3,643,523 | 3,643,523 | |||||||||||||||
Book value | $ | 23.75 | 23.36 | 22.88 | 22.55 | 23.34 | ||||||||||||||
Common stock price | ||||||||||||||||||||
High | $ | 37.71 | 37.79 | 33.69 | 31.31 | 28.91 | ||||||||||||||
Low | 34.82 | 32.65 | 30.75 | 27.45 | 27.45 | |||||||||||||||
Period end: | 35.00 | 36.94 | 33.00 | 31.31 | 27.45 | |||||||||||||||
To earnings ratio | 15.70x | 16.94 | 15.28 | 13.98 | 12.48 | |||||||||||||||
To book value | 147 | % | 158 | 144 | 139 | 118 | ||||||||||||||
Performance ratios: | ||||||||||||||||||||
Return on average equity | 9.87 | % | 9.44 | 9.09 | 9.61 | 9.06 | ||||||||||||||
Return on average assets | 1.03 | % | 0.96 | 0.90 | 1.00 | 0.92 | ||||||||||||||
Dividend payout ratio | 38.98 | % | 41.82 | 44.23 | 39.47 | 41.67 | ||||||||||||||
Asset Quality: | ||||||||||||||||||||
Allowance for loan losses as a % of: | ||||||||||||||||||||
Loans | 1.04 | % | 1.14 | 1.07 | 1.08 | 1.07 | ||||||||||||||
Nonperforming loans | 161 | % | 220 | 198 | 196 | 284 | ||||||||||||||
Nonperforming assets as a % of: | ||||||||||||||||||||
Loans and foreclosed properties | 0.67 | % | 0.54 | 0.57 | 0.59 | 0.39 | ||||||||||||||
Total assets | 0.36 | % | 0.28 | 0.29 | 0.30 | 0.19 | ||||||||||||||
Nonperforming loans as a % of total loans | 0.65 | % | 0.52 | 0.54 | 0.55 | 0.38 | ||||||||||||||
Annualized net charge-offs (recoveries) as a % of average loans | 0.27 | % | (0.25) | 0.05 | 0.05 | (0.05) | ||||||||||||||
Capital Adequacy: | ||||||||||||||||||||
CET 1 risk-based capital ratio | 16.15 | % | 16.22 | 16.24 | 16.44 | 15.74 | ||||||||||||||
Tier 1 risk-based capital ratio | 16.71 | % | 16.79 | 16.83 | 17.00 | 17.07 | ||||||||||||||
Total risk-based capital ratio | 17.62 | % | 17.77 | 17.75 | 17.95 | 17.97 | ||||||||||||||
Tier 1 leverage ratio | 10.70 | % | 10.56 | 10.40 | 10.27 | 10.36 | ||||||||||||||
Other financial data: | ||||||||||||||||||||
Net interest margin (a) | 3.32 | % | 3.28 | 3.19 | 3.05 | 2.94 | ||||||||||||||
Effective income tax rate | 28.89 | % | 28.21 | 27.50 | 27.76 | 27.50 | ||||||||||||||
Efficiency ratio (b) | 56.09 | % | 55.80 | 58.62 | 49.48 | 56.96 | ||||||||||||||
Selected average balances: | ||||||||||||||||||||
Securities | $ | 273,280 | 274,493 | 257,894 | 253,820 | 227,076 | ||||||||||||||
Loans, net of unearned income | 443,639 | 436,645 | 429,784 | 429,451 | 429,201 | |||||||||||||||
Total assets | 831,097 | 831,187 | 835,679 | 834,291 | 851,409 | |||||||||||||||
Total deposits | 735,372 | 737,464 | 742,002 | 735,991 | 748,229 | |||||||||||||||
Long-term debt | 3,217 | 3,217 | 3,217 | 4,260 | 7,217 | |||||||||||||||
Total stockholders’ equity | 86,543 | 84,569 | 83,191 | 86,493 | 86,103 | |||||||||||||||
Selected period end balances: | ||||||||||||||||||||
Securities | $ | 265,171 | 277,363 | 273,853 | 243,572 | 249,556 | ||||||||||||||
Loans, net of unearned income | 449,378 | 437,287 | 430,553 | 430,946 | 427,203 | |||||||||||||||
Allowance for loan losses | 4,670 | 4,965 | 4,588 | 4,643 | 4,578 | |||||||||||||||
Total assets | 828,546 | 836,311 | 842,781 | 831,943 | 851,672 | |||||||||||||||
Total deposits | 732,648 | 742,456 | 750,302 | 739,143 | 751,915 | |||||||||||||||
Long-term debt | 3,217 | 3,217 | 3,217 | 3,217 | 7,217 | |||||||||||||||
Total stockholders’ equity | 86,538 | 85,099 | 83,366 | 82,177 | 85,055 | |||||||||||||||
|
"
Nine months ended September 30, | ||||||||
(Dollars in thousands, except per share amounts) | 2017 | 2016 | ||||||
| ||||||||
Results of Operations | ||||||||
Net interest income (a) | $ | 19,156 | 17,957 | |||||
Less:tax-equivalent adjustment | 905 | 960 | ||||||
| ||||||||
Net interest income (GAAP) | 18,251 | 16,997 | ||||||
Noninterest income | 2,597 | 2,890 | ||||||
| ||||||||
Total revenue | 20,848 | 19,887 | ||||||
Provision for loan losses | 100 | (600 | ) | |||||
Noninterest expense | 12,358 | 12,110 | ||||||
Income tax expense | 2,369 | 2,304 | ||||||
| ||||||||
Net earnings | $ | 6,021 | 6,073 | |||||
| ||||||||
Per share data: | ||||||||
Basic and diluted net earnings | $ | 1.65 | 1.67 | |||||
Cash dividends declared | 0.69 | 0.675 | ||||||
Weighted average shares outstanding: | ||||||||
Basic and diluted | 3,643,598 | 3,643,498 | ||||||
Shares outstanding, at period end | 3,643,668 | 3,643,523 | ||||||
Book value | $ | 23.75 | 23.34 | |||||
Common stock price | ||||||||
High | $ | 37.79 | 30.49 | |||||
Low | 30.75 | 24.56 | ||||||
Period end | 35.00 | 27.45 | ||||||
To earnings ratio | 15.70x | 12.48 | ||||||
To book value | 147 | % | 118 | |||||
Performance ratios: | ||||||||
Return on average equity | 9.47 | % | 9.67 | |||||
Return on average assets | 0.96 | % | 0.97 | |||||
Dividend payout ratio | 41.82 | % | 40.42 | |||||
Asset Quality: | ||||||||
Allowance for loan losses as a % of: | ||||||||
Loans | 1.04 | % | 1.07 | |||||
Nonperforming loans | 161 | % | 284 | |||||
Nonperforming assets as a % of: | ||||||||
Loans and other real estate owned | 0.67 | % | 0.39 | |||||
Total assets | 0.36 | % | 0.19 | |||||
Nonperforming loans as a % of total loans | 0.65 | % | 0.38 | |||||
Annualized net charge-offs (recoveries) as a % of average loans | 0.02 | % | (0.27) | |||||
Capital Adequacy: | ||||||||
CET 1 risk-based capital ratio | 16.15 | % | 15.74 | |||||
Tier 1 risk-based capital ratio | 16.71 | % | 17.07 | |||||
Total risk-based capital ratio | 17.62 | % | 17.97 | |||||
Tier 1 leverage ratio | 10.70 | % | 10.36 | |||||
Other financial data: | ||||||||
Net interest margin (a) | 3.26 | % | 3.05 | |||||
Effective income tax rate | 28.24 | % | 27.50 | |||||
Efficiency ratio (b) | 56.81 | % | 58.09 | |||||
Selected average balances: | ||||||||
Securities | $ | 268,612 | 229,185 | |||||
Loans, net of unearned income | 436,740 | 431,213 | ||||||
Total assets | 832,637 | 834,721 | ||||||
Total deposits | 738,255 | 734,241 | ||||||
Long-term debt | 3,217 | 7,217 | ||||||
Total stockholders’ equity | 84,780 | 83,740 | ||||||
Selected period end balances: | ||||||||
Securities | $ | 265,171 | 249,556 | |||||
Loans, net of unearned income | 449,378 | 427,203 | ||||||
Allowance for loan losses | 4,670 | 4,578 | ||||||
Total assets | 828,546 | 851,672 | ||||||
Total deposits | 732,648 | 751,915 | ||||||
Long-term debt | 3,217 | 7,217 | ||||||
Total stockholders’ equity | 86,538 | 85,055 | ||||||
|
(a)Tax-equivalent. See “Table 1 - Explanation ofNon-GAAP Financial Measures.”
(b) Efficiency ratio is the result of noninterest expense divided by the sum of noninterest income andtax-equivalent net interest income.
Table 4 - AverageBalances and Net Interest Income Analysis
Quarter ended September 30, | ||||||||||||||||||||||||||||
2017 |
2016 | |||||||||||||||||||||||||||
(Dollars in thousands) | Average
Balance | Interest
Income/
Expense | Yield/
Rate | Average
Balance | Interest
Income/
Expense | Yield/
Rate | ||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||||||||
Loans and loans held for sale (1) | $ | 444,893 | $ | 5,296 | 4.72% | $ | 430,896 | $ | 5,105 | 4.71% | ||||||||||||||||||
Securities - taxable | 202,690 | 1,071 | 2.10% | 158,525 | 747 | 1.87% | ||||||||||||||||||||||
Securities -tax-exempt (2) | 70,590 | 894 | 5.02% | 68,551 | 932 | 5.41% | ||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||
Total securities | 273,280 | 1,965 | 2.85% | 227,076 | 1,679 | 2.94% | ||||||||||||||||||||||
Federal funds sold | 29,937 | 94 | 1.25% | 44,949 | 56 | 0.50% | ||||||||||||||||||||||
Interest bearing bank deposits | 35,615 | 121 | 1.35% | 99,794 | 135 | 0.54% | ||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||
Total interest-earning assets | 783,725 | $ | 7,476 | 3.78% | 802,715 | $ | 6,975 | 3.46% | ||||||||||||||||||||
Cash and due from banks | 13,131 | 13,515 | ||||||||||||||||||||||||||
Other assets | 34,241 | 35,179 | ||||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||
Total assets | $ | 831,097 | $ | 851,409 | ||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||||||
Deposits: | ||||||||||||||||||||||||||||
NOW | $ | 125,512 | $ | 62 | 0.20% | $ | 121,501 | $ | 91 | 0.30% | ||||||||||||||||||
Savings and money market | 233,944 | 223 | 0.38% | 243,024 | 240 | 0.39% | ||||||||||||||||||||||
Time deposits | 195,773 | 587 | 1.19% | 210,751 | 653 | 1.23% | ||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||
Total interest-bearing deposits | 555,229 | 872 | 0.62% | 575,276 | 984 | 0.68% | ||||||||||||||||||||||
Short-term borrowings | 3,582 | 5 | 0.55% | 2,943 | 4 | 0.54% | ||||||||||||||||||||||
Long-term debt | 3,217 | 34 | 4.19% | 7,217 | 63 | 3.47% | ||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||
Total interest-bearing liabilities | 562,028 | $ | 911 | 0.64% | 585,436 | $ | 1,051 | 0.71% | ||||||||||||||||||||
Noninterest-bearing deposits | 180,144 | 172,953 | ||||||||||||||||||||||||||
Other liabilities | 2,382 | 6,917 | ||||||||||||||||||||||||||
Stockholders’ equity | 86,543 | 86,103 | ||||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 831,097 | $ | 851,409 | ||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||
Net interest income and margin(tax-equivalent) | $ | 6,565 | 3.32% | $ | 5,924 | 2.94% | ||||||||||||||||||||||
|
|
|
|
|
Nine months ended September 30, | ||||||||||||||||||||||||||||
2017 |
2016 | |||||||||||||||||||||||||||
Interest | Interest | |||||||||||||||||||||||||||
Average |
Income/ | Yield/ | Average | Income/ | Yield/ | |||||||||||||||||||||||
(Dollars in thousands) | Balance |
Expense | Rate | Balance | Expense | Rate | ||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||||||||
Loans and loans held for sale (1) | $ | 437,707 | $ | 15,398 | 4.70% | $ | 432,628 | $ | 15,373 | 4.75% | ||||||||||||||||||
Securities - taxable | 198,842 | 3,204 | 2.15% | 161,484 | 2,420 | 2.00% | ||||||||||||||||||||||
Securities -tax-exempt (2) | 69,770 | 2,663 | 5.10% | 67,701 | 2,824 | 5.57% | ||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||
Total securities | 268,612 | 5,867 | 2.92% | 229,185 | 5,244 | 3.06% | ||||||||||||||||||||||
Federal funds sold | 33,430 | 250 | 1.00% | 53,420 | 199 | 0.50% | ||||||||||||||||||||||
Interest bearing bank deposits | 45,310 | 348 | 1.03% | 71,384 | 274 | 0.51% | ||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||
Total interest-earning assets | 785,059 | $ | 21,863 | 3.72% | 786,617 | $ | 21,090 | 3.58% | ||||||||||||||||||||
Cash and due from banks | 13,399 | 13,085 | ||||||||||||||||||||||||||
Other assets | 34,179 | 35,019 | ||||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||
Total assets | $ | 832,637 | $ | 834,721 | ||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||||||
Deposits: | ||||||||||||||||||||||||||||
NOW | $ | 125,968 | $ | 179 | 0.19% | $ | 123,049 | $ | 282 | 0.31% | ||||||||||||||||||
Savings and money market | 232,076 | 644 | 0.37% | 232,893 | 671 | 0.38% | ||||||||||||||||||||||
Time deposits | 200,690 | 1,777 | 1.18% | 213,659 | 1,979 | 1.24% | ||||||||||||||||||||||
|
|
| ||||||||||||||||||||||||||
Total interest-bearing deposits | 558,734 | 2,600 | 0.62% | 569,601 | 2,932 | 0.69% | ||||||||||||||||||||||
Short-term borrowings | 3,626 | 14 | 0.52% | 2,872 | 11 | 0.51% | ||||||||||||||||||||||
Long-term debt | 3,217 | 93 | 3.87% | 7,217 | 190 | 3.52% | ||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||
Total interest-bearing liabilities | 565,577 | $ | 2,707 | 0.64% | 579,690 | $ | 3,133 | 0.72% | ||||||||||||||||||||
Noninterest-bearing deposits | 179,521 | 164,640 | ||||||||||||||||||||||||||
Other liabilities | 2,759 | 6,651 | ||||||||||||||||||||||||||
Stockholders’ equity | 84,780 | 83,740 | ||||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 832,637 | $ | 834,721 | ||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||
Net interest income and margin(tax-equivalent) | $ | 19,156 | 3.26% | $ | 17,957 | 3.05% | ||||||||||||||||||||||
|
|
|
|
|
(1) Average loan balances are shownindustrial
2017 | 2016 | |||||||||||||||||||||||
Third | Second | First | Fourth | Third | ||||||||||||||||||||
(In thousands) |
Quarter | Quarter | Quarter | Quarter | Quarter | |||||||||||||||||||
| ||||||||||||||||||||||||
Commercial and industrial | $ | 50,101 | 50,974 | 50,228 | 49,850 | 50,881 | ||||||||||||||||||
Construction and land development | 47,455 | 46,386 | 45,098 | 41,650 | 44,004 | |||||||||||||||||||
Commercial real estate | 232,380 | 220,863 | 218,739 | 220,439 | 211,558 | |||||||||||||||||||
Residential real estate | 110,159 | 110,288 | 108,096 | 110,855 | 112,303 | |||||||||||||||||||
Consumer installment | 9,877 | 9,409 | 9,032 | 8,712 | 8,996 | |||||||||||||||||||
| ||||||||||||||||||||||||
Total loans | 449,972 | 437,920 | 431,193 | 431,506 | 427,742 | |||||||||||||||||||
Less: unearned income | (594) | (633) | (640) | (560) | (539) | |||||||||||||||||||
| ||||||||||||||||||||||||
Loans, net of unearned income | 449,378 | 437,287 | 430,553 | 430,946 | 427,203 | |||||||||||||||||||
Less: allowance for loan losses | (4,670) | (4,965) | (4,523) | (4,643) | (4,578) | |||||||||||||||||||
| ||||||||||||||||||||||||
Loans, net | $ | 444,708 | 432,322 | 426,030 | 426,303 | 422,625 | ||||||||||||||||||
|
Table 7 5- Allowance for Loan Losses and Nonperforming Assets
2017 | 2016 | |||||||||||||||||||||||
Third | Second | First | Fourth | Third | ||||||||||||||||||||
(Dollars in thousands) |
Quarter | Quarter | Quarter | Quarter | Quarter | |||||||||||||||||||
| ||||||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||||||
Balance at beginning of period | $ | 4,965 | 4,588 | 4,643 | 4,578 | 4,528 | ||||||||||||||||||
Charge-offs: | ||||||||||||||||||||||||
Commercial and industrial | (449) | — | — | (14) | — | |||||||||||||||||||
Residential real estate | (30) | — | (78) | (20) | (7) | |||||||||||||||||||
Consumer installment | (10) | (5) | (1) | (38) | (1) | |||||||||||||||||||
| ||||||||||||||||||||||||
Total charge-offs | (489) | (5) | (79) | (72) | (8) | |||||||||||||||||||
Recoveries | 194 | 282 | 24 | 22 | 58 | |||||||||||||||||||
| ||||||||||||||||||||||||
Net (charge-offs) recoveries | (295) | 277 | (55) | (50) | 50 | |||||||||||||||||||
Provision for loan losses | — | 100 | — | 115 | — | |||||||||||||||||||
| ||||||||||||||||||||||||
Ending balance | $ | 4,670 | 4,965 | 4,588 | 4,643 | 4,578 | ||||||||||||||||||
| ||||||||||||||||||||||||
as a % of loans | 1.04 | % | 1.14 | 1.07 | 1.08 | 1.07 | ||||||||||||||||||
as a % of nonperforming loans | 161 | % | 220 | 198 | 196 | 284 | ||||||||||||||||||
Net charge-offs (recoveries) as % of avg. loans (a) | 0.27 | % | (0.25) | 0.05 | 0.05 | (0.05) | ||||||||||||||||||
| ||||||||||||||||||||||||
Nonperforming assets: | ||||||||||||||||||||||||
Nonaccrual loans | $ | 2,902 | 2,255 | 2,318 | 2,370 | 1,614 | ||||||||||||||||||
Other real estate owned | 103 | 103 | 152 | 152 | 37 | |||||||||||||||||||
| ||||||||||||||||||||||||
Total nonperforming assets | $ | 3,005 | 2,358 | 2,470 | 2,522 | 1,651 | ||||||||||||||||||
| ||||||||||||||||||||||||
as a % of loans and foreclosed properties | 0.67 | % | 0.54 | 0.57 | 0.59 | 0.39 | ||||||||||||||||||
as a % of total assets | 0.36 | % | 0.28 | 0.29 | 0.30 | 0.19 | ||||||||||||||||||
Nonperforming loans as a % of total loans | 0.65 | % | 0.52 | 0.54 | 0.55 | 0.38 | ||||||||||||||||||
Accruing loans 90 days or more past due | $ | 5 | 42 | — | — | 211 | ||||||||||||||||||
|
2017 | 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||
Third Quarter | Second Quarter | First Quarter | Fourth Quarter | Third Quarter | ||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | Amount | %* | Amount | %* | Amount | %* | Amount | %* | Amount | %* | ||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial and industrial | $ | 504 | 11.1 | $ | 677 | 11.6 | $ | 524 | 11.6 | $ | 540 | 11.6 | $ | 515 | 11.9 | |||||||||||||||||||||||||||||||||||
Construction and land development | 851 | 10.5 | 874 | 10.6 | 845 | 10.5 | 812 | 9.7 | 673 | 10.3 | ||||||||||||||||||||||||||||||||||||||||
Commercial real estate | 2,061 | 51.7 | 2,121 | 50.5 | 2,004 | 50.7 | 2,071 | 51.0 | 2,232 | 49.4 | ||||||||||||||||||||||||||||||||||||||||
Residential real estate | 1,077 | 24.5 | 1,119 | 25.2 | 1,064 | 25.1 | 1,107 | 25.7 | 1,020 | 26.3 | ||||||||||||||||||||||||||||||||||||||||
Consumer installment | 177 | 2.2 | 174 | 2.1 | 151 | 2.1 | 113 | 2.0 | 138 | 2.1 | ||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||||
Total allowance for loan losses | $ | 4,670 | $ | 4,965 | $ | 4,588 | $ | 4,643 | $ | 4,578 | ||||||||||||||||||||||||||||||||||||||||
|
| ||||
| ||||
| ||||
| ||||
| ||||
| ||||
SIGNATURES
Pursuant to Rule 13a-14(a) of the requirements Securities ExchangeAct of 1934, As Adopted Pursuant To
Section 302 of the Sarbanes-Oxley Act of 2002, by Robert W. Dumas, Chairman, President and Chief Executive
Officer.
| ||||