Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Mar. 27, 2015 | Jun. 30, 2014 | |
Document And Entity Information | |||
Entity Registrant Name | HCSB FINANCIAL CORP | ||
Entity Central Index Key | 1091491 | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Amendment Flag | TRUE | ||
Current Fiscal Year End Date | -19 | ||
Entity a Well-known Seasoned Issuer | No | ||
Entity a Voluntary Filer | No | ||
Entity's Reporting Status Current | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $2,383,752 | ||
Entity Common Stock, Shares Outstanding | 3,816,340 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2014 | ||
Amendment Description | EXPLANATORY NOTE | ||
HCSB Financial Corporation is filing this Amendment No. 1 (this “Amendment No. 1”) to our Annual Report on Form 10-K for the year ended December 31, 2014 (the “Form 10-K”), originally filed with the Securities and Exchange Commission on March 30, 2015, for the sole purpose of furnishing the Interactive Data File with detailed note tagging as Exhibit 101 to the Form 10-K in accordance with Rule 405 of Regulation S-T. Exhibit 101 provides the financial statements and related notes in the Form 10-K formatted in XBRL (eXtensible Business Reporting Language). | |||
No other changes have been made to the Form 10-K. This Amendment No. 1 does not reflect events that may have occurred subsequent to the original filing date and does not modify or update in any way the disclosures made in the original Form 10-K filed on March 30, 2015. |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |||
Cash and cash equivalents: | |||
Cash and due from banks | $28,527 | $28,081 | $46,600 |
Investment securities: | |||
Securities available-for-sale | 106,674 | 94,602 | 77,320 |
Nonmarketable equity securities | 1,342 | 1,743 | 1,983 |
Total investment securities | 108,016 | 96,345 | 79,303 |
Loans receivable | 235,543 | 256,424 | 302,234 |
Less allowance for loan losses | -5,787 | -9,443 | -14,150 |
Loans, net | 229,756 | 246,981 | 288,084 |
Premises, furniture and equipment, net | 20,292 | 20,802 | 21,694 |
Accrued interest receivable | 1,973 | 2,197 | 2,370 |
Cash value of life insurance | 11,002 | 11,002 | 10,655 |
Other real estate owned | 19,501 | 24,972 | 19,464 |
Other assets | 2,504 | 4,206 | 826 |
Total assets | 421,571 | 434,586 | 468,996 |
Deposits: | |||
Noninterest-bearing transaction accounts | 40,172 | 33,081 | 33,103 |
Interest-bearing transaction accounts | 44,283 | 42,723 | 43,053 |
Money market savings accounts | 75,811 | 78,829 | 84,776 |
Other savings accounts | 10,272 | 8,872 | 7,900 |
Time deposits $100 and over | 150,020 | 156,582 | 155,786 |
Other time deposits | 70,779 | 85,957 | 111,243 |
Total deposits | 391,337 | 406,044 | 435,861 |
Repurchase Agreements | 1,612 | 1,337 | 1,303 |
Advances from the Federal Home Loan Bank | 17,000 | 22,000 | 22,000 |
Subordinated debentures | 11,062 | 11,062 | 12,062 |
Junior subordinated debentures | 6,186 | 6,186 | 6,186 |
Accrued interest payable | 4,583 | 3,305 | 2,207 |
Other liabilities | 1,038 | 1,094 | 1,139 |
Total liabilities | 432,818 | 451,028 | 480,758 |
Commitments and contingencies (Notes 5, 13, & 14) | |||
Shareholders' Equity | |||
Preferred stock, $1,000 par value; 5,000,000 shares authorized; 12,895 shares issued and outstanding | 12,895 | 12,838 | 12,639 |
Common stock, $0.01 par value; 500,000,000 shares authorized; 3,816,340, 3,738,337 and 3,738,337 issued and outstanding at December 31, 2014, 2013 and 2012, respectively | 38 | 37 | 37 |
Capital surplus | 30,214 | 30,157 | 30,157 |
Common stock warrants | 1,012 | 1,012 | 1,012 |
Retained deficit | -54,561 | -54,213 | -55,777 |
Accumulated other comprehensive income (loss) | -845 | -6,273 | 170 |
Total shareholders' deficit | -11,247 | -16,442 | -11,762 |
Total liabilities and shareholders' deficit | $421,571 | $434,586 | $468,996 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Statement of Financial Position [Abstract] | |||
Preferred stock, par value (in dollars per share) | $1,000 | $1,000 | $1,000 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 12,895 | 12,895 | 12,895 |
Preferred stock, shares outstanding | 12,895 | 12,895 | 12,895 |
Common stock, par value (in dollars per share) | $0.01 | $0.01 | $0.01 |
Common stock, shares authorized | 500,000,000 | 500,000,000 | 500,000,000 |
Common stock, shares issued | 3,816,340 | 3,738,337 | 3,738,337 |
Common stock, shares outstanding | 3,816,340 | 3,738,337 | 3,738,337 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Interest income: | |||
Loans, including fees | $13,417 | $14,693 | $17,301 |
Investment securities: | |||
Taxable | 2,542 | 2,212 | 2,818 |
Tax-exempt | 14 | 45 | 115 |
Nonmarketable equity securities | 60 | 44 | 47 |
Other interest income | 62 | 77 | 90 |
Total | 16,095 | 17,071 | 20,371 |
Interest expense: | |||
Deposits | 2,995 | 3,273 | 3,961 |
Borrowings | 2,059 | 2,028 | 2,300 |
Total | 5,054 | 5,301 | 6,261 |
Net interest income | 11,041 | 11,770 | 14,110 |
Provision for loan losses | 1,061 | -1,497 | 10,530 |
Net interest income after provision for loan losses | 9,980 | 13,267 | 3,580 |
Noninterest income: | |||
Service charges on deposit accounts | 880 | 927 | 1,114 |
Credit life insurance commissions | 9 | 12 | 18 |
Gains on sales of residential mortgage loans | 229 | 254 | 375 |
Brokerage commissions | 79 | 165 | 140 |
Other fees and commissions | 438 | 472 | 402 |
Gain on sale of securities available-for-sale | 201 | 298 | 1,643 |
Income from cash value life insurance | 440 | 448 | 465 |
Net gains (losses) on sales of assets | 6 | -10 | 155 |
Forgiveness of debt | 1,000 | ||
Proceeds from bank owned life insurance | 940 | ||
Other operating income | 334 | 390 | 262 |
Total | 3,556 | 3,956 | 4,574 |
Noninterest expense: | |||
Salaries and employee benefits | 5,606 | 5,985 | 6,093 |
Net occupancy expense | 1,220 | 1,200 | 1,220 |
Furniture and equipment | 1,023 | 1,026 | 1,171 |
Net cost of operations of other real estate owned | 1,411 | 1,373 | 3,539 |
FDIC insurance premiums | 1,574 | 1,564 | 1,759 |
Other operating expenses | 2,915 | 4,312 | 3,899 |
Total | 13,749 | 15,460 | 17,681 |
Net income (loss) before income taxes | -213 | 1,763 | -9,527 |
Income tax expense | 78 | ||
Net income (loss) | -291 | 1,763 | -9,527 |
Accretion of preferred stock to redemption value | -57 | -199 | -217 |
Preferred dividends accrued | -1,055 | -653 | -652 |
Net income (loss) available to common shareholders | ($1,403) | $911 | ($10,396) |
Net income (loss) per common share, basic | ($0.37) | $0.24 | ($2.78) |
Net income (loss) per common share, diluted | ($0.37) | $0.24 | ($2.78) |
Weighted average common shares outstanding | |||
Basic and diluted (in shares) | 3,770,355 | 3,738,337 | 3,738,337 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) | ($291) | $1,763 | ($9,527) |
Unrealized gains (losses) on securities available-for-sale: | |||
Unrealized holding gains (losses) arising during the period | 5,629 | -6,145 | 3,815 |
Tax expense | |||
Reclassification to realized gains | -201 | -298 | -1,643 |
Tax expense | |||
Valuation allowance on deferred tax asset on available-for-sale securities | 809 | ||
Other comprehensive income (loss) | 5,428 | -6,443 | 2,981 |
Comprehensive income (loss) | $5,137 | ($4,680) | ($6,546) |
CONSOLIDATED_STATEMENTS_OF_CHA
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (USD $) | Common Stock [Member] | Common Stock Warrant [Member] | Preferred Stock [Member] | Capital Surplus [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Total |
In Thousands, except Share data, unless otherwise specified | |||||||
Beginning Balance at Dec. 31, 2011 | $37 | $1,012 | $12,422 | $30,157 | ($46,033) | ($2,811) | ($5,216) |
Beginning Balance, shares at Dec. 31, 2011 | 3,738,337 | 12,895 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income ( loss) | -9,527 | -9,527 | |||||
Other comprehensive income ( loss) | 2,981 | 2,981 | |||||
Accretion of preferred stock to redemption value | 217 | -217 | 217 | ||||
Ending Balance at Dec. 31, 2012 | 37 | 1,012 | 12,639 | 30,157 | -55,777 | 170 | -11,762 |
Ending Balance, shares at Dec. 31, 2012 | 3,738,337 | 12,895 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income ( loss) | 1,763 | 1,763 | |||||
Other comprehensive income ( loss) | -6,443 | -6,443 | |||||
Accretion of preferred stock to redemption value | 199 | -199 | 199 | ||||
Ending Balance at Dec. 31, 2013 | 37 | 1,012 | 12,838 | 30,157 | -54,213 | -6,273 | -16,442 |
Ending Balance, shares at Dec. 31, 2013 | 3,738,337 | 12,895 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income ( loss) | -291 | -291 | |||||
Other comprehensive income ( loss) | 5,428 | 5,428 | |||||
Sale of common stock | 1 | 57 | 58 | ||||
Sale of common stock,shares | 78,003 | ||||||
Accretion of preferred stock to redemption value | 57 | -57 | 57 | ||||
Ending Balance at Dec. 31, 2014 | $38 | $1,012 | $12,895 | $30,214 | ($54,561) | ($845) | ($11,247) |
Ending Balance, shares at Dec. 31, 2014 | 3,816,340 | 12,895 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Cash flows from operating activities: | |||
Net income (loss) | ($291) | $1,763 | ($9,527) |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||
Provision for loan losses | 1,061 | -1,497 | 10,530 |
Depreciation expense | 789 | 824 | 923 |
Forgiveness of debt | -1,000 | ||
Amortization net of accretion on investments | 266 | 151 | -180 |
Gains on sales of securities available-for-sale | -201 | -298 | -1,643 |
(Gains) losses on sales of other real estate owned | 26 | -721 | 658 |
Writedowns of other real estate owned | 317 | 768 | 2,760 |
Gain (loss) on sale of other assets | -6 | 10 | -155 |
Decrease in accrued interest receivable | 224 | 173 | 406 |
Increase (decrease) in accrued interest payable | 1,278 | 1,098 | 1,192 |
(Increase) decrease in other assets | 1,708 | -3,390 | 116 |
Income (net of mortality costs) on cash value of life insurance | -347 | -370 | |
Decrease in other liabilities | -56 | -45 | -167 |
Net cash provided by (used by) operating activities | 5,115 | -2,511 | 4,543 |
Cash flows from investing activities: | |||
Purchases of securities available-for-sale | -59,354 | -62,559 | -78,053 |
Maturities and paydowns of securities available-for-sale | 19,822 | 13,095 | 59,016 |
Proceeds from sales of securities available-for-sale | 32,823 | 25,886 | 46,728 |
Net decrease in loans receivable | 13,981 | 24,941 | 32,805 |
Net purchases of premises, furniture and equipment | -279 | 68 | -103 |
Proceeds from sales of other real estate owned | 7,311 | 12,104 | 7,181 |
Redemptions of nonmarketable equity securities | 401 | 240 | 1,992 |
Net cash provided by investing activities | 14,705 | 13,775 | 69,566 |
Cash flows from financing activities: | |||
Net increase (decrease) in demand deposits,interest-bearing transaction and savings accounts | 7,033 | -5,327 | -45,788 |
Net decrease in time deposits | -21,740 | -24,490 | -9,204 |
Net decrease in FHLB borrowings | -5,000 | ||
Net increase (decrease) in repurchase agreements | 275 | 34 | -6,189 |
Sale of common stock | 58 | ||
Net cash used by financing activities | -19,374 | -29,783 | -61,181 |
Net increase (decrease) in cash and cash equivalents | 446 | -18,519 | 12,928 |
Cash and cash equivalents, beginning of year | 28,081 | 46,600 | 33,672 |
Cash and cash equivalents, end of year | 28,527 | 28,081 | 46,600 |
Supplemental information: | |||
Cash paid for interest | 3,776 | 4,203 | 5,069 |
Cash paid for income taxes | 78 | ||
Supplemental noncash investing and financing activities: | |||
Transfers of loans to other real estate owned | $2,183 | $17,659 | $14,398 |
ORGANIZATION_AND_SIGNIFICANT_A
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES |
Basis of Presentation and Consolidation - The accompanying consolidated financial statements include the accounts of HCSB Financial Corporation which was incorporated on June 10, 1999 (the “Company”) to serve as a bank holding company for its wholly owned subsidiary, Horry County State Bank (the “Bank”). The Bank was incorporated on December 18, 1987, and opened for operations on January 4, 1988. The principal business activity of the Company is to provide commercial banking services in Horry County, South Carolina, and in Columbus and Brunswick Counties, North Carolina. The Bank is a state-chartered bank, and its deposits are insured by the Federal Deposit Insurance Corporation (the “FDIC”). HCSB Financial Trust I (the “Trust”) is a special purpose subsidiary organized for the sole purpose of issuing trust preferred securities. The operations of the Trust have not been consolidated in these financial statements. | |
Management’s Estimates - In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the balance sheet date and income and expenses for the period. Actual results could differ significantly from those estimates. | |
Material estimates that are particularly susceptible to significant change relate to the determination of the allowance for loan losses, including valuation allowances for impaired loans, and the carrying amount of real estate acquired in connection with foreclosures or in satisfaction of loans. Management must also make estimates in determining the estimated useful lives and methods for depreciating premises and equipment. | |
While management uses available information to recognize losses on loans and foreclosed real estate, future additions to the allowance may be necessary based on changes in local economic conditions. In addition, regulatory agencies, as an integral part of their examination process, periodically review the Company’s allowances for losses on loans and foreclosed real estate. Such agencies may require the Company to recognize additions to the allowances based on their judgments about information available to them at the time of their examination. Because of these factors, it is reasonably possible that the allowances for losses on loans and foreclosed real estate may change materially in the near term. | |
Investment Securities - Investment securities available-for-sale owned by the Company are carried at amortized cost and adjusted to their estimated fair value for reporting purposes. The unrealized gain or loss is recorded in shareholders’ equity net of any deferred tax effects. Management does not actively trade securities classified as available-for-sale, but intends to hold these securities for an indefinite period of time and may sell them prior to maturity to achieve certain objectives. Reductions in fair value considered by management to be other than temporary are reported as a realized loss and a reduction in the cost basis in the security. The adjusted cost basis of securities available-for-sale is determined by specific identification and is used in computing the realized gain or loss from a sales transaction. | |
Nonmarketable Equity Securities - Nonmarketable equity securities include the Company’s investments in the stock of the Federal Home Loan Bank (the “FHLB”). The stocks are carried at cost because they have no quoted market value and no ready market exists. Investment in Federal Home Loan Bank stock is a condition of borrowing from the Federal Home Loan Bank, and the stock is pledged to collateralize the borrowings. Dividends received on Federal Home Loan Bank stock are included as a separate component in interest income. | |
At December 31, 2014, 2013 and 2012, the investment in FHLB stock was $1.2 million, $1.6 million and $1.8 million, respectively. The Company also had an investment in the holding company of a community bank originally purchased at $25 thousand. This investment was written down to zero in 2012. Also included in nonmarketable equities is investment in the Trust, which totaled $186 thousand at December 31, 2014, 2013 and 2012. | |
Loans Receivable - Loans receivable are stated at their unpaid principal balance less any charge-offs. Interest income on loans is computed based upon the unpaid principal balance. Interest income is recorded in the period earned. | |
The accrual of interest income is generally discontinued when a loan becomes contractually 90 days past due as to principal or interest. Management may elect to continue the accrual of interest when the estimated net realizable value of collateral exceeds the principal balance and accrued interest. | |
Loan origination and commitment fees and certain direct loan origination costs (principally salaries and employee benefits) are deferred and amortized to income over the contractual life of the related loans or commitments, adjusted for prepayments, using the straight-line method. | |
Loans are impaired when it is probable that a creditor will be unable to collect all amounts due according to the contractual terms of the loan agreement. All loans are subject to these criteria except for smaller balance homogeneous loans that are collectively evaluated for impairment and loans measured at fair value or at the lower of cost or fair value. The Company considers its consumer installment portfolio and home equity lines as such exceptions. Therefore, loans within the real estate and commercial loan portfolios are reviewed individually. | |
Impairment of a loan is measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate or the fair value of the collateral if the loan is collateral dependent. When management determines that a loan is impaired, the difference between the Company’s investment in the related loan and the present value of the expected future cash flows, or the fair value of the collateral, is charged off with a corresponding entry to the allowance for loan losses. The accrual of interest is discontinued on an impaired loan when management determines the borrower may be unable to meet payments as they become due. | |
Concentrations of Credit Risk - Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of loans receivable, investment securities, federal funds sold and amounts due from banks. | |
The Company makes loans to individuals and small businesses for various personal and commercial purposes primarily throughout Horry County in South Carolina and Columbus and Brunswick counties of North Carolina. The Company’s loan portfolio is not concentrated in loans to any single borrower or a relatively small number of borrowers. Additionally, management is not aware of any concentrations of loans to classes of borrowers or industries that would be similarly affected by economic conditions except for loans secured by residential and commercial real estate and commercial and industrial non-real estate loans. These concentrations of residential and commercial real estate loans and commercial and industrial non-real estate loans totaled $198.4 million and $30.9 million, respectively, at December 31, 2014, representing 84.24% and 13.12%, respectively, of gross loans receivable for the Company at December 31, 2014. | |
In addition to monitoring potential concentrations of loans to particular borrowers or groups of borrowers, industries and geographic regions, management monitors exposure to credit risk from concentrations of lending products and practices such as loans that subject borrowers to substantial payment increases (e.g. principal deferral periods, loans with initial interest-only periods, etc.), and loans with high loan-to-value ratios. Management has determined that there is no concentration of credit risk associated with its lending policies or practices. Additionally, there are industry practices that could subject the Company to increased credit risk should economic conditions change over the course of a loan’s life. For example, the Company makes variable rate loans and fixed rate principal-amortizing loans with maturities prior to the loan being fully paid (i.e. balloon payment loans). These loans are underwritten and monitored to manage the associated risks. Therefore, management believes that these particular practices do not subject the Company to unusual credit risk. | |
The Company’s investment portfolio consists principally of obligations of the United States, its agencies or its corporations and general obligation municipal securities. In the opinion of management, there is no concentration of credit risk in its investment portfolio. The Company places its deposits and correspondent accounts with and sells its federal funds to high quality institutions. Management believes credit risk associated with correspondent accounts is not significant. | |
Allowance for Loan Losses - The allowance for loan losses is established as losses are estimated to have occurred through a provision for loan losses charged to earnings. Loan losses are charged against the allowance when management believes the uncollectability of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. The allowance for loan losses is evaluated on a regular basis by management and is based upon management’s periodic review of the collectability of the loans in light of historical experiences, the nature and volume of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available. Management’s judgments about the adequacy of the allowance are based on numerous assumptions about current events, which management believes to be reasonable, but which may or may not prove to be accurate. Thus, there can be no assurance that loan losses in future periods will not exceed the current allowance amount or that future increases in the allowance will not be required. No assurance can be given that management’s ongoing evaluation of the loan portfolio in light of changing economic conditions and other relevant circumstances will not require significant future additions to the allowance, thus adversely affecting the operating results of the Company. | |
The allowance is subject to examination by regulatory agencies, which may consider such factors as the methodology used to determine adequacy and the size of the allowance relative to that of peer institutions, and other adequacy tests. In addition, such regulatory agencies could require the Company to adjust its allowance based on information available to them at the time of their examination. | |
The methodology used to determine the reserve for unfunded lending commitments, which is included in other liabilities, is inherently similar to that used to determine the allowance for loan losses adjusted for factors specific to binding commitments, including the probability of funding and historical loss ratio. | |
Premises, Furniture and Equipment - Premises, furniture and equipment are stated at cost less accumulated depreciation. The provision for depreciation is computed by the straight-line method. Rates of depreciation are generally based on the following estimated useful lives: buildings - 40 years; furniture and equipment - 3 to 25 years. The cost of assets sold or otherwise disposed of and the related accumulated depreciation is eliminated from the accounts, and the resulting gains or losses are reflected in the income statement. | |
Maintenance and repairs are charged to current expense as incurred, and the costs of major renewals and improvements are capitalized. | |
Other Real Estate Owned - Other real estate owned includes real estate acquired through foreclosure. Other real estate owned is initially recorded at appraised value, less estimated costs to sell. | |
Any write-downs at the dates of acquisition are charged to the allowance for loan losses. Expenses to maintain such assets, subsequent write-downs, and gains and losses on disposal are included in net cost of operations of other real estate. | |
Income and Expense Recognition - The accrual method of accounting is used for all significant categories of income and expense. Immaterial amounts of insurance commissions and other miscellaneous fees are reported when received. | |
Income Taxes – The Company files consolidated federal and state income tax returns. Federal income tax expense or benefit has been allocated to subsidiaries on a separate return basis. The Company accounts for income taxes based on two components of income tax expense: current and deferred. Current income tax expense approximates taxes to be paid or refunded for the current period and includes income tax expense related to uncertain tax positions, if any. | |
Deferred income taxes are determined using the balance sheet method. Under this method, the net deferred tax asset or liability is based on the tax impacts of the differences between the book and tax bases of assets and liabilities and recognizes enacted changes in tax rates and laws in the period in which they occur. Deferred income tax expense results from changes in deferred tax assets and liabilities between periods. Deferred tax assets are recognized subject to the Company’s judgment that realization is more likely than not. A tax position that meets the more likely than not recognition threshold is measured to determine the amount of benefit to recognize. The tax position is measured at the largest amount of benefit that is greater than 50% likely of being realized upon settlement. Interest and penalties, if any, are recognized as a component of income tax expense. | |
The Company reviews the deferred tax assets for recoverability based on history of earnings, expectations for future earnings and expected timing of reversals of temporary differences. Realization of a deferred tax asset ultimately depends on the existence of sufficient taxable income available under tax law, including future reversals of existing temporary differences, future taxable income exclusive of reversing differences, taxable income in prior carryback years, projections of future operating results, cumulative tax losses over the past three years, tax loss deductibility limitations, and available tax planning strategies. If, based on available information, it is more likely than not that the deferred income tax asset will not be realized, a valuation allowance against the deferred tax asset must be established with a corresponding charge to income tax expense. The deferred tax assets and valuation allowance are evaluated each quarter, and a portion of the valuation allowance may be reversed in future periods. The determination of how much of the valuation allowance that may be reversed and the timing is based on future results of operation and the amount and timing of actual loan charge-offs and asset write-downs. At December 31, 2014, 2013 and 2012, the Company’s deferred tax asset was offset in its entirety by a valuation allowance. | |
The Company believes that its income tax filing positions taken or expected to be taken in its tax returns will more likely than not be sustained upon audit by the taxing authorities and does not anticipate any adjustments that will result in a material adverse impact on the Company’s financial condition, results of operations, or cash flow. Therefore no reserves for uncertain income tax positions have been recorded. | |
Advertising Expense - Advertising and public relations costs are generally expensed as incurred. External costs incurred in producing media advertising are expensed the first time the advertising takes place. External costs relating to direct mailing costs are expensed in the period in which the direct mailings are sent. Advertising and public relations costs of $16 thousand, $19 thousand and $22 thousand were included in the Company’s results of operations in marketing and advertising expense for 2014, 2013 and 2012, respectively. | |
Net Income (Loss) Per Common Share - Basic income (loss) per common share is calculated by dividing net income (loss) by the weighted-average number of common shares outstanding during the year. Diluted net income per common share is computed based on net income divided by the weighted average number of common and potential common shares. The computation of diluted net loss per share does not include potential common shares as their effect would be anti-dilutive. The only potential common share equivalents are those related to the warrant issued to the U.S. Treasury under the Capital Purchase Program (the “CPP”). | |
Comprehensive Income - Accounting principles generally require recognized income, expenses, gains, and losses to be included in net income. Although certain changes in assets and liabilities, such as unrealized gains and losses on available-for-sale securities, are reported as a separate component of the equity section of the balance sheet, such items, along with net income, are components of comprehensive income and are also presented in a separate statement of comprehensive income. Accumulated other comprehensive income consists entirely of unrealized holding gains and losses on available for sale securities. | |
Statements of Cash Flows - For purposes of reporting cash flows, the Company considers certain highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. Cash equivalents include amounts due from banks, federal funds sold, and interest-bearing deposits with other banks. | |
Off-Balance Sheet Financial Instruments - In the ordinary course of business, the Company enters into off-balance sheet financial instruments consisting of commitments to extend credit and letters of credit. These financial instruments are recorded in the financial statements when they become payable by the customer. | |
Recently Issued Accounting Pronouncements – The following is a summary of recent authoritative pronouncements. | |
In January 2014, the Financial Accounting Standards Board (“FASB”) amended Receivables topic of the Accounting Standards Codification. The amendments are intended to resolve diversity in practice with respect to when a creditor should reclassify a collateralized consumer mortgage loan to other real estate owned (“OREO”). In addition, the amendments require a creditor reclassify a collateralized consumer mortgage loan to OREO upon obtaining legal title to the real estate collateral, or the borrower voluntarily conveying all interest in the real estate property to the lender to satisfy the loan through a deed in lieu of foreclosure or similar legal agreement. The amendments will be effective for the Company for annual periods, and interim periods within those annual period beginning after December 15, 2014, with early implementation of the guidance permitted. In implementing this guidance, assets that are reclassified from real estate to loans are measured at the carrying value of the real estate at the date of adoption. Assets reclassified from loans to real estate are measured at the lower of the net amount of the loan receivable or the fair value of the real estate less costs to sell at the date of adoption. The Company does not expect these amendments to have a material effect on its financial statements. | |
In May 2014, the FASB issued guidance to change the recognition of revenue from contracts with customers. The core principle of the new guidance is that an entity should recognize revenue to reflect the transfer of goods and services to customers in an amount equal to the consideration the entity receives or expects to receive. The guidance will be effective for the Company for reporting periods beginning after December 15, 2016. The Company does not expect these amendments to have a material effect on its financial statements. | |
In June 2014, the FASB issued guidance which makes limited amendments to the guidance on accounting for certain repurchase agreements. The new guidance (1) requires entities to account for repurchase-to-maturity transactions as secured borrowings (rather than as sales with forward repurchase agreements), (2) eliminates accounting guidance on linked repurchase financing transactions, and (3) expands disclosure requirements related to certain transfers of financial assets that are accounted for as sales and certain transfers (specifically, repos, securities lending transactions, and repurchase-to-maturity transactions) accounted for as secured borrowings. The amendments will be effective for the Company for the first interim or annual period beginning after December 15, 2014. The Company will apply the guidance by making a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. The Company does not expect these amendments to have a material effect on its financial statements. | |
In August 2014, the FASB issued guidance that is intended to define management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures. In connection with preparing financial statements, management will need to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the organization’s ability to continue as a going concern within one year after the date that the financial statements are issued. The amendments will be effective for the Company for annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. The Company does not expect these amendments to have a material effect on its financial statements. | |
In January 2015, the FASB issued guidance that eliminated the concept of extraordinary items from U.S. GAAP. Existing U.S. GAAP required that an entity separately classify, present, and disclose extraordinary events and transactions. The amendments will eliminate the requirements for reporting entities to consider whether an underlying event or transaction is extraordinary, however, the presentation and disclosure guidance for items that are unusual in nature or occur infrequently will be retained and will be expanded to include items that are both unusual in nature and infrequently occurring. The amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. The amendments may be applied either prospectively or retrospectively to all prior periods presented in the financial statements. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. The Company does not expect these amendments to have a material effect on its financial statements. | |
Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies are not expected to have a material impact on the Company’s financial position, results of operations or cash flows. | |
Risks and Uncertainties - In the normal course of its business, the Company encounters two significant types of risks: economic and regulatory. There are three main components of economic risk: interest rate risk, credit risk and market risk. The Company is subject to interest rate risk to the degree that its interest-bearing liabilities mature or reprice at different speeds, or on different basis, than its interest-earning assets. Credit risk is the risk of default on the Company’s loan portfolio that results from a borrower’s inability or unwillingness to make contractually required payments. Market risk reflects changes in the value of collateral underlying loans receivable and the valuation of real estate held by the Company. | |
The Company is subject to the regulations of various governmental agencies. These regulations can and do change significantly from period to period. The Company also undergoes periodic examinations by the regulatory agencies, which may subject it to further changes with respect to asset valuations, amounts of required loss allowances and operating restrictions from the regulators’ judgments based on information available to them at the time of their examination. | |
Additionally, the Company is subject to certain regulations due to our participation in the CPP. Pursuant to the terms of the CPP Purchase Agreement between us and the Treasury, we adopted certain standards for executive compensation and corporate governance for the period during which the Treasury holds the equity issued pursuant to the CPP Purchase Agreement, including the common stock which may be issued pursuant to the CPP Warrant. These standards generally apply to our named executive officers. The standards include (1) ensuring that incentive compensation for senior executives does not encourage unnecessary and excessive risks that threaten the value of the financial institution; (2) required clawback of any bonus or incentive compensation paid to a senior executive based on statements of earnings, gains or other criteria that are later proven to be materially inaccurate; (3) prohibition on making golden parachute payments to senior executives; (4) prohibition on providing tax gross-up provisions; and (5) agreement not to deduct for tax purposes executive compensation in excess of $500 thousand for each senior executive. In particular, the change to the deductibility limit on executive compensation will likely increase the overall cost of our compensation programs in future periods and may make it more difficult to attract suitable candidates to serve as executive officers. | |
In February 2005 the Bank purchased a $500 thousand 15-year renewable and convertible term life insurance policy through Banner Life Insurance Company on the life of James R. Clarkson, President and CEO. The Bank is both the owner and the beneficiary of this key person policy. The purpose of securing this policy was to provide the Bank with financial protection in the event of the unexpected death of Mr. Clarkson and better enable the Bank to attract a qualified replacement for Mr. Clarkson in such a situation. | |
Legislation that has been adopted after we closed on our sale of Series T Preferred Stock and Warrant to the Treasury for $12.9 million pursuant to the CPP on March 6, 2009, or any legislation or regulations that may be implemented in the future, may have a material impact on the terms of our CPP transaction with the Treasury. If we determine that any such legislation or any regulations, in whole or in part, alter the terms of our CPP transaction with the Treasury in ways that we believe are adverse to our ability to effectively manage our business, then it is possible that we may seek to unwind, in whole or in part, the CPP transaction by repurchasing some or all of the preferred stock and warrants that we sold to the Treasury pursuant to the CPP. If we were to repurchase all or a portion of such preferred stock or warrants, then our capital levels could be materially reduced. | |
Reclassifications - Certain captions and amounts in the 2013 and 2012 financial statements were reclassified to conform to the 2014 presentation. |
REGULATORY_MATTERS_AND_FUTURE_
REGULATORY MATTERS AND FUTURE OPERATIONS | 12 Months Ended | ||
Dec. 31, 2014 | |||
Regulatory Matters And Going Concern Considerations [Abstract] | |||
REGULATORY MATTERS AND FUTURE OPERATIONS | NOTE 2 – REGULATORY MATTERS AND GOING CONCERN CONSIDERATIONS | ||
Consent Order with the Federal Deposit Insurance Corporation and South Carolina Board of Financial Institutions | |||
On February 10, 2011, the Bank entered into a Consent Order with the FDIC and the State Board. | |||
The Consent Order conveys specific actions needed to address the Bank’s current financial condition, primarily related to capital planning, liquidity/funds management, policy and planning issues, management oversight, loan concentrations and classifications, and non-performing loans. A summary of the requirements of the Consent Order and the Bank’s status on complying with the Consent Order is as follows: | |||
Requirements of the Consent Order | Bank’s Compliance Status | ||
Achieve and maintain, by July 10, 2011, Total Risk Based capital at least equal to 10% of risk-weighted assets and Tier 1 capital at least equal to 8% of total assets. | The Bank did not meet the capital ratios as specified in the Consent Order and, as a result, submitted a revised capital restoration plan to the FDIC on July 15, 2011. The revised capital restoration plan was determined by the FDIC to be insufficient and, as a result, we submitted a further revised capital restoration plan to the FDIC on September 30, 2011. We received the FDIC’s non-objection to the further revised capital restoration plan on December 6, 2011. | ||
The Bank is working diligently to increase its capital ratios in order to strengthen its balance sheet and satisfy the commitments required under the Consent Order. The Bank has engaged independent third parties to assist the Bank in its efforts to increase its capital ratios. In addition to continuing to search for additional capital, the Bank is also searching for a potential merger partner. Although the Bank is pursuing both of these approaches simultaneously, given the lack of a market for bank mergers, particularly in the Southeast, as a result of the current economic and regulatory climate, and the lack of success the Company has had to date in attempting to raise capital, there can be no assurances the Company will either raise additional capital or find a merger partner. | |||
Submit, by April 11, 2011, a written capital plan to the supervisory authorities. | We believe we have complied with this provision of the Consent Order. | ||
Establish, by March 12, 2011, a plan to monitor compliance with the Consent Order, which shall be monitored by the Bank’s Directors’ Committee. | We believe we have complied with this provision of the Consent Order. The Directors’ Committee meets monthly and each meeting includes reviews and discussions of all areas required in the Consent Order. | ||
Develop, by May 11, 2011, a written analysis and assessment of the Bank’s management and staffing needs. | We believe we have complied with this provision of the Consent Order. In 2011, the Bank engaged an independent third party to perform an assessment of the Bank’s staffing needs to ensure the Bank has an appropriate organizational structure with qualified management in place. The Board of Directors has reviewed all recommendations regarding the Bank’s organizational structure. | ||
Notify the supervisory authorities in writing of the resignation or termination of any of the Bank’s directors or senior executive officers. | We believe we have complied with this provision of the Consent Order. | ||
Eliminate, by March 12, 2011, by charge-off or collection, all assets or portions of assets classified “Loss” and 50% of those assets classified “Doubtful.” | We believe we have complied with this provision of the Consent Order. | ||
Review and update, by April 11, 2011, its policy to ensure the adequacy of the Bank’s allowance for loan and lease losses, which must provide for a review of the | We believe we have complied with this provision of the Consent Order. | ||
Bank’s allowance for loan and lease losses at least once each calendar quarter. | |||
Submit, by April 11, 2011, a written plan to the supervisory authorities to reduce classified assets, which shall include, among other things, a reduction of the Bank’s risk exposure in relationships with assets in excess of $750,000 which are criticized as “Substandard” or “Doubtful”. In accordance with the approved plan, reduce assets classified in the June 30, 2010 Report of Examination by 65% by August 11, 2012 and by 75% by February 9, 2013. | We were not in compliance with this provision of the Consent Order on December 31, 2014. The written plan was submitted and approved; however, assets classified in the June 30, 2010 Report of Examination had only been reduced by 74.7% as of December 31, 2014. As of January 31, 2015, however, those assets had been reduced by 75.9%. | ||
Revise, by April 11, 2011, its policies and procedures for managing the Bank’s Adversely Classified Other Real Estate Owned. | We believe we have complied with this provision of the Consent Order. | ||
Not extend any additional credit to any borrower who has a loan or other extension of credit from the Bank that has been charged-off or classified, in whole or in part, “Loss” or “Doubtful” and is uncollected. In addition, the Bank may not extend any additional credit to any borrower who has a loan or other extension of credit from the Bank that has been criticized, in whole or in part, “Substandard” and is uncollected, unless the Bank’s board of directors determines that failure to extend further credit to a particular borrower would be detrimental to the best interests of the Bank. | We believe we have complied with this provision of the Consent Order. In the second quarter of 2010, the Bank engaged the services of an independent firm to perform an extensive review of the Bank’s credit portfolio and help management implement a more comprehensive lending and collection policy and more enhanced loan review. An independent review of the Bank’s credit portfolio was most recently completed in the second quarter of 2014. | ||
Perform, by April 11, 2011, a risk segmentation analysis with respect to the Bank’s Concentrations of Credit and develop a written plan to systematically reduce any segment of the portfolio that is an undue concentration of credit. | We believe we have complied with this provision of the Consent Order. | ||
Review, by April 11, 2011 and annually thereafter, the Bank’s loan policies and procedures for adequacy and, based upon this review, make all appropriate revisions to the policies and procedures necessary to enhance the Bank’s lending functions and ensure their implementation. | We believe we have complied with this provision of the Consent Order. As noted above, the Bank engaged the services of an independent firm to perform an extensive review of the Bank’s credit portfolio and help management implement a more comprehensive lending and collection policy and more enhanced loan review. | ||
Adopt, by May 11, 2011, an effective internal loan review and grading system to provide for the periodic review of the Bank’s loan portfolio in order to identify and categorize the Bank’s loans, and other extensions of credit which are carried on the Bank’s books as loans, on the basis of credit quality. | We believe we have complied with this provision of the Consent Order. As noted above, the Bank engaged the services of an independent firm to perform an extensive review of the Bank’s credit portfolio and help management implement a more comprehensive lending and collection policy and more enhanced loan review. | ||
Review and update, by May 11, 2011, its written profit plan to ensure the Bank has a realistic, comprehensive budget for all categories of income and expense, which must address, at minimum, goals and strategies for improving and sustaining the earnings of the Bank, the major areas in and means by which the Bank will seek to improve the Bank’s operating performance, realistic and comprehensive budgets, a budget review process to monitor income and expenses of the Bank to compare actual results with budgetary projections, assess that operating assumptions that form the basis for budget projections and adequately support major projected income and expense components of the plan, and coordination of the Bank’s loan, investment, and operating policies and budget and profit planning with the funds management policy. | We believe we have complied with this provision of the Consent Order. The Bank engaged an independent third party to assist management with a strategic plan to help restructure its balance sheet, increase capital ratios, return to profitability and maintain adequate liquidity. | ||
Review and update, by May 11, 2011, its written plan addressing liquidity, contingent funding, and asset liability management. | We believe we have complied with this provision of the Consent Order. In 2011, the Bank engaged an independent third party to assist management in its development of a strategic plan that achieves all requirements of the Consent Order. The strategic plan reflects the Bank’s plans to restructure its balance sheet, increase capital ratios, return to profitability, and maintain adequate liquidity. The Board of Directors has reviewed and adopted the Bank’s strategic plan. | ||
Eliminate, by March 12, 2011, all violations of law and regulation or contraventions of policy set forth in the FDIC’s safety and soundness examination of the Bank in November 2009. | We believe we have complied with this provision of the Consent Order. | ||
Not accept, renew, or rollover any brokered deposits unless it is in compliance with the requirements of 12 C.F.R. § 337.6(b). | Since entering into the Consent Order, the Bank has not accepted, renewed, or rolled-over any brokered deposits. Therefore we believe we have complied with this provision of the Consent Order. | ||
Limit asset growth to 5% per annum. | We believe we have complied with this provision of the Consent Order. | ||
Not declare or pay any dividends or bonuses or make any distributions of interest, principal, or other sums on subordinated debentures without the prior approval of the supervisory authorities. | We believe we have complied with this provision of the Consent Order. | ||
The Bank shall comply with the restrictions on the effective yields on deposits as described in 12 C.F.R. § 337.6. | We believe we have complied with this provision of the Consent Order. | ||
Furnish, by March 12, 2011 and within 30 days of the end of each quarter thereafter, written progress reports to the supervisory authorities detailing the form and manner of any actions taken to secure compliance with the Consent Order. | We believe we have complied with this provision of the Consent Order, and we have submitted the required progress reports to the supervisory authorities. | ||
Submit, by March 12, 2011, a written plan to the supervisory authorities for eliminating its reliance on brokered deposits. | We believe we have complied with this provision of the Consent Order. | ||
Adopt, by April 11, 2011, an employee compensation plan after undertaking an independent review of compensation paid to all of the Bank’s senior executive officers. | We believe we have complied with this provision of the Consent Order. | ||
Prepare and submit, by May 11, 2011, its written strategic plan to the supervisory authorities. | We believe we have complied with this provision of the Consent Order. In 2011, the Bank engaged an independent third party to assist management in its development of a strategic plan that achieves all requirements of the Consent Order. The Board of Directors has reviewed and adopted the Bank’s strategic plan. | ||
There can be no assurance that the Bank will be able to comply fully with the provisions of the Consent Order, and the determination of the Bank’s compliance will be made by the FDIC and the State Board. However, we believe we are currently in substantial compliance with the Consent Order except for the requirements to achieve and maintain Total Risk Based capital at least equal to 10% of risk-weighted assets and Tier 1 capital at least equal to 8% of total assets. Should we fail to comply with the capital requirements in the Consent Order, or suffer a continued deterioration in our financial condition, the Bank may be placed into a federal conservatorship or receivership by the FDIC, with the FDIC appointed as conservator or receiver. In addition, the supervisory authorities may amend the Consent Order based on the results of their ongoing examinations. | |||
As of December 31, 2014, the Company was categorized as “critically undercapitalized” and the Bank was categorized as “significantly undercapitalized.” Our losses over the past few years have materially adversely impacted our capital. As a result, we have been pursuing a plan through which to achieve the capital requirements set forth under the Consent Order which includes, among other things, the sale of assets, reduction in total assets, and reduction of overhead expenses, as well as raising additional capital at either the Bank or the holding company level and attempting to find a merger partner for the Company or the Bank. | |||
We anticipate that we will need to raise a material amount of capital to return the Bank to an adequate level of capitalization and have been exploring a number of potential sources of capital. We have not had any success to date in raising this capital, and there are no assurances that we will be able to raise this capital on a timely basis or at all. | |||
We are also working to improve asset quality and to reduce the Bank’s investment in commercial real estate loans as a percentage of Tier 1 capital. The Company is reducing its reliance on brokered deposits and is committed to improving the Bank’s capital position. | |||
Written Agreement | |||
On May 9, 2011, the Company entered into a Written Agreement with the Federal Reserve Bank of Richmond. The Written Agreement is designed to enhance the Company’s ability to act as a source of strength to the Bank. | |||
The Written Agreement contains provisions similar to those in the Bank’s Consent Order. Specifically, pursuant to the Written Agreement, the Company agreed, among other things, to seek the prior written approval of the Federal Reserve Bank of Richmond before undertaking any of the following activities: | |||
• | declaring or paying any dividends, | ||
• | directly or indirectly taking dividends or any other form of payment representing a reduction in capital from the Bank, | ||
• | making any distributions of interest, principal or other sums on subordinated debentures or trust preferred securities, | ||
• | directly or indirectly, incurring, increasing or guarantying any debt, and | ||
• | directly or indirectly, purchasing or redeeming any shares of its stock. | ||
The Company also agreed to comply with certain notice provisions set forth in the Federal Deposit Insurance Act and regulations of the Board of Governors of the Federal Reserve System (the “Federal Reserve”) in appointing any new director or senior executive officer, or changing the responsibilities of any senior executive officer so that the officer would assume a different senior executive officer position. The Company is also required to comply with certain restrictions on indemnification and severance payments pursuant to the Federal Deposit Insurance Act and FDIC regulations. | |||
We believe we are currently in substantial compliance with the Written Agreement. | |||
In addition, the Federal Reserve Bank of Richmond has informed the Company that it is required to contribute $1 million to the Bank as soon as the Company has the funds available to do so for repayment of a loan deemed made from the Bank to the Company in such amount. The Bank is a general unsecured creditor of the Company with respect to this amount. | |||
Going Concern Considerations | |||
The going concern assumption is a fundamental principle in the preparation of financial statements. It is the responsibility of management to assess the Company’s ability to continue as a going concern. In assessing this assumption, the Company has taken into account all available information about the future, which is at least, but is not limited to, twelve months from the balance sheet date of December 31, 2014. The Company had a history of profitable operations and sufficient sources of liquidity to meet its short-term and long-term funding needs. However, the Bank’s financial condition has suffered during the past few years from the extraordinary effects of what may ultimately be the worst economic downturn since the Great Depression. | |||
The effects of the current economic environment are being felt across many industries, with financial services and residential real estate being particularly hard hit. The Bank, with a loan portfolio consisting of a concentration in commercial real estate loans, has seen a decline in the value of the collateral securing its portfolio as well as rapid deterioration in its borrowers’ cash flow and ability to repay their outstanding loans to the Bank. As a result, the Bank’s level of nonperforming assets increased substantially during 2010 and 2011. However, since 2012, the Bank’s nonperforming assets have begun to stabilize. The Bank’s nonperforming assets equaled $31.3 million, or 7.43% of assets, as of December 31, 2014 compared to $35.6 million and $42.2 million, or 8.19% and 9.00% of assets, as of December 31, 2013 and 2012, respectively. While management recognizes the possibility of further deterioration in the loan portfolio, net loan charge-offs decreased from $17.6 million in 2012 to $3.2 million in 2013. Net charge-offs were $4.7 million for the year ended December 31, 2014. | |||
The Company and the Bank operate in a highly regulated industry and must plan for the liquidity needs of each entity separately. A variety of sources of liquidity have historically been available to the Bank to meet its short-term and long-term funding needs. Although a number of these sources have been limited following execution of the Consent Order, management has prepared forecasts of these sources of funds and the Bank’s projected uses of funds during 2014 in an effort to ensure that the sources available are sufficient to meet the Bank’s projected liquidity needs for this period. | |||
Prior to the economic downturn, the Company, if needed, would have relied on dividends from the Bank as its primary source of liquidity. Currently, however, the Company has no available sources of liquidity. The Company is a legal entity separate and distinct from the Bank. Various legal limitations restrict the Bank from lending or otherwise supplying funds to the Company to meet its obligations, including paying dividends. In addition, the terms of the Consent Order described below further limits the Bank’s ability to pay dividends to the Company to satisfy its funding needs. Unless the Company is able to raise capital, it will have no means of satisfying its funding needs. | |||
Management believes the Bank’s liquidity sources are adequate to meet its needs for at least the next 12 months, but if the Bank is unable to meet its liquidity needs, then the Bank may be placed into a federal conservatorship or receivership by the FDIC, with the FDIC appointed conservator or receiver. | |||
The Company will also need to raise substantial additional capital to increase the Bank’s capital levels to meet the standards set forth by the FDIC. Receivership by the FDIC is based on the Bank’s capital ratios rather than those of the Company. As of December 31, 2014, the Bank is categorized as significantly undercapitalized. | |||
There can be no assurances that the Company or the Bank will be able to raise additional capital. An equity financing transaction by the Company would result in substantial dilution to the Company’s current shareholders and could adversely affect the market price of the Company’s common stock. Likewise, an equity financing transaction by the Bank would result in substantial dilution to the Company’s ownership interest in the Bank. It is difficult to predict if these efforts will be successful, either on a short-term or long-term basis. Should these efforts be unsuccessful, the Company would be unable to realize its assets and discharge its liabilities in the normal course of business. | |||
The Company has been deferring interest payments on its trust preferred securities since March 2011 and has deferred interest payments for 16 consecutive quarters. The Company is allowed to defer payments for up to 20 consecutive quarterly periods, although interest will also accrue and compound quarterly from the date such deferred interest would have been payable were it not for the extension period. All of the deferred interest, including interest accrued on such deferred interest, is due and payable at the end of the applicable deferral period, which is in March 2016. At December 31, 2014, total accrued interest equaled $714 thousand. The Company will not be able to pay this interest when it becomes due if we are not able to raise a sufficient amount of additional capital for the Bank to be in compliance with the Consent Order and for the Company to make the payments due under the subordinated notes, which are senior to the trust preferred securities. Even if the Company succeeds in raising this capital, it will have to be released from the Written Agreement or obtain approval from the Federal Reserve Bank of Richmond to pay this interest on the trust preferred securities. If this interest is not paid by March 2016, the Company will be in default under the terms of the indenture related to the trust preferred securities. If the Company fails to pay the deferred and compounded interest at the end of the deferral period, the trustee or the holders of 25% of the aggregate trust preferred securities outstanding, by providing written notice to the Company, may declare the entire principal and unpaid interest amounts of the trust preferred securities immediately due and payable. The aggregate principal amount of these trust preferred securities is $6.0 million. The trust preferred securities are junior to the subordinated notes, so even if a default is declared, the trust preferred securities cannot be repaid prior to repayment of the subordinated notes. However, if the trustee or the holders of the trust preferred securities declare a default under the trust preferred securities, the Company could be forced into involuntary bankruptcy. | |||
As a result of management’s assessment of the Company’s ability to continue as a going concern, the accompanying consolidated financial statements for the Company have been prepared on a going concern basis, which contemplates the realization of assets and the discharge of liabilities in the normal course of business for the foreseeable future, and does not include any adjustments to reflect the possible future effects on the recoverability or classification of assets. There is substantial doubt about the Company’s ability to continue as a going concern. |
CASH_AND_DUE_FROM_BANKS
CASH AND DUE FROM BANKS | 12 Months Ended |
Dec. 31, 2014 | |
Cash and Due from Banks [Abstract] | |
CASH AND DUE FROM BANKS | NOTE 3 - CASH AND DUE FROM BANKS |
The Bank is required by regulation to maintain an average cash reserve balance based on a percentage of deposits. At December 31, 2014, 2013 and 2012, the requirements were satisfied by amounts on deposit with the Federal Reserve Bank and cash on hand. |
INVESTMENT_SECURITIES
INVESTMENT SECURITIES | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||
INVESTMENT SECURITIES | NOTE 4 - INVESTMENT SECURITIES | ||||||||||||||||||||||||
Securities available-for-sale consisted of the following: | |||||||||||||||||||||||||
Amortized | Gross Unrealized | Estimated | |||||||||||||||||||||||
Cost | Gains | Losses | Fair Value | ||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||
31-Dec-14 | |||||||||||||||||||||||||
Government-sponsored enterprises | $ | 40,952 | $ | 7 | $ | (877 | ) | $ | 40,082 | ||||||||||||||||
Mortgage-backed securities | 65,328 | 447 | (427 | ) | 65,348 | ||||||||||||||||||||
Obligations of state and local governments | 1,239 | 10 | (5 | ) | 1,244 | ||||||||||||||||||||
Total | $ | 107,519 | $ | 464 | $ | (1,309 | ) | $ | 106,674 | ||||||||||||||||
31-Dec-13 | |||||||||||||||||||||||||
Government-sponsored enterprises | $ | 60,628 | $ | — | $ | (5,553 | ) | $ | 55,075 | ||||||||||||||||
Mortgage-backed securities | 37,731 | 167 | (864 | ) | 37,034 | ||||||||||||||||||||
Obligations of state and local governments | 2,516 | 113 | (136 | ) | 2,493 | ||||||||||||||||||||
Total | $ | 100,875 | $ | 280 | $ | (6,553 | ) | $ | 94,602 | ||||||||||||||||
31-Dec-12 | |||||||||||||||||||||||||
Government-sponsored enterprises | $ | 27,024 | $ | 111 | $ | (27 | ) | $ | 27,108 | ||||||||||||||||
Mortgage-backed securities | 44,557 | 391 | (486 | ) | 44,462 | ||||||||||||||||||||
Obligations of state and local governments | 5,569 | 193 | (12 | ) | 5,750 | ||||||||||||||||||||
Total | $ | 77,150 | $ | 695 | $ | (525 | ) | $ | 77,320 | ||||||||||||||||
The following is a summary of maturities of securities available-for-sale as of December 31, 2014. The amortized cost and estimated fair values are based on the contractual maturity dates. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without penalty. | |||||||||||||||||||||||||
Securities | |||||||||||||||||||||||||
Available-For-Sale | |||||||||||||||||||||||||
Amortized | Estimated | ||||||||||||||||||||||||
(Dollars in thousands) | Cost | Fair Value | |||||||||||||||||||||||
Due after one year but within five years | $ | 1,492 | $ | 1,500 | |||||||||||||||||||||
Due after five years but within ten years | 16,364 | 16,308 | |||||||||||||||||||||||
Due after ten years | 89,663 | 88,866 | |||||||||||||||||||||||
Total | $ | 107,519 | $ | 106,674 | |||||||||||||||||||||
The following table shows gross unrealized losses and fair value, aggregated by investment category, and length of time that individual securities have been in a continuous unrealized loss position, at: | |||||||||||||||||||||||||
31-Dec-14 | Less than twelve months | Twelve months or more | Total | ||||||||||||||||||||||
Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | ||||||||||||||||||||
(Dollars in thousands) | Value | Losses | Value | Losses | Value | Losses | |||||||||||||||||||
Government-sponsored enterprises | $ | — | $ | — | $ | 38,076 | $ | (877 | ) | $ | 38,076 | $ | (877 | ) | |||||||||||
Mortgage-backed securities | 22,024 | (244 | ) | 7,458 | (183 | ) | 29,482 | (427 | ) | ||||||||||||||||
Obligations of state and local governments | — | — | 623 | (5 | ) | 623 | (5 | ) | |||||||||||||||||
Total | $ | 22,024 | $ | (244 | ) | $ | 46,157 | $ | (1,065 | ) | $ | 68,181 | $ | (1,309 | ) | ||||||||||
31-Dec-13 | Less than twelve months | Twelve months or more | Total | ||||||||||||||||||||||
Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | ||||||||||||||||||||
(Dollars in thousands) | Value | Losses | Value | Losses | Value | Losses | |||||||||||||||||||
Government-sponsored enterprises | $ | 47,311 | $ | (4,433 | ) | $ | 7,764 | $ | (1,120 | ) | $ | 55,075 | $ | (5,553 | ) | ||||||||||
Mortgage-backed securities | 17,826 | (471 | ) | 7,373 | (393 | ) | 25,199 | (864 | ) | ||||||||||||||||
Obligations of state and local governments | 552 | (67 | ) | 568 | (69 | ) | 1,120 | (136 | ) | ||||||||||||||||
Total | $ | 65,689 | $ | (4,971 | ) | $ | 15,705 | $ | (1,582 | ) | $ | 81,394 | $ | (6,553 | ) | ||||||||||
31-Dec-12 | Less than twelve months | Twelve months or more | Total | ||||||||||||||||||||||
Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | ||||||||||||||||||||
(Dollars in thousands) | Value | Losses | Value | Losses | Value | Losses | |||||||||||||||||||
Government-sponsored enterprises | $ | 6,003 | (27 | ) | $ | — | $ | — | $ | 6,003 | $ | (27 | ) | ||||||||||||
Mortgage-backed securities | 9,881 | (380 | ) | 5,299 | (106 | ) | 15,180 | (486 | ) | ||||||||||||||||
Obligations of state and local governments | 635 | (12 | ) | — | — | 635 | (12 | ) | |||||||||||||||||
Total | $ | 16,519 | (419 | ) | $ | 5,299 | $ | (106 | ) | $ | 21,818 | $ | (525 | ) | |||||||||||
Management evaluates its investment portfolio periodically to identify any impairment that is other than temporary. At December 31, 2014, the Company had 17 government-sponsored enterprise securities, six mortgage-backed securities, and one state and local government obligation security that have been in an unrealized loss position for more than twelve months. Management believes these losses are temporary and are a result of the current interest rate environment. The Company does not intend to sell these securities and it is more likely than not that the Company will not be required to sell these securities before recovery of their amortized cost. | |||||||||||||||||||||||||
At December 31, 2014, 2013 and 2012, investment securities with a book value of $42.8 million, $40.1 million, and $30.4 million, respectively, and a market value of $42.2 million, $36.8 million and $30.6 million, respectively, were pledged to secure deposits. | |||||||||||||||||||||||||
Proceeds from sales of available-for-sale securities were $32.8 million, $25.9 million and $46.7 million for the years ended December 31, 2014, 2013, and 2012 respectively. Gross realized gains and losses on sales of available for sale securities for the years ended were as follows: | |||||||||||||||||||||||||
Years ended | |||||||||||||||||||||||||
(Dollars in thousands) | December 31, | ||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
Gross realized gains | $ | 269 | $ | 298 | 1,643 | ||||||||||||||||||||
Gross realized losses | (68 | ) | — | — | |||||||||||||||||||||
Net gain | $ | 201 | $ | 298 | $ | 1,643 |
LOAN_PORTFOLIO
LOAN PORTFOLIO | 12 Months Ended | ||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||
Loans and Leases Receivable Disclosure [Abstract] | |||||||||||||||||||||||||||||
LOAN PORTFOLIO | NOTE 5 – LOAN PORTFOLIO | ||||||||||||||||||||||||||||
Loans consisted of the following: | |||||||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||||||||||||||||||
Residential | $ | 84,568 | $ | 84,335 | $ | 91,606 | |||||||||||||||||||||||
Commercial Real Estate | 113,852 | 130,450 | 161,335 | ||||||||||||||||||||||||||
Commercial | 30,894 | 33,711 | 41,200 | ||||||||||||||||||||||||||
Consumer | 6,229 | 7,928 | 8,093 | ||||||||||||||||||||||||||
Total gross loans | $ | 235,543 | $ | 256,424 | $ | 302,234 | |||||||||||||||||||||||
Certain parties (principally certain directors and officers of the Company, their immediate families, and business interests) were loan customers and had other transactions in the normal course of business with the Company. Related party loans are made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with persons not related to the lender and do not involve more than normal risk of collectibility. Related party loans consisted of the following: | |||||||||||||||||||||||||||||
For the Year ended December 31, | |||||||||||||||||||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||||||||||||||||||
Beginning balance | $ | 3,088 | $ | 2,867 | $ | 4,325 | |||||||||||||||||||||||
New loans and advances | 1,785 | 1,195 | 1,645 | ||||||||||||||||||||||||||
Repayments | (1,016 | ) | (974 | ) | (3,103 | ) | |||||||||||||||||||||||
Ending balance | $ | 3,857 | $ | 3,088 | $ | 2,867 | |||||||||||||||||||||||
Provision and Allowance for Loan Losses | |||||||||||||||||||||||||||||
An allowance for loan losses is maintained at a level deemed appropriate by management to adequately provide for known and inherent losses in the loan portfolio. The allowance for loan losses is established as losses are estimated to have occurred through a provision for loan losses charged to earnings. Loan losses are charged against the allowance when management believes the uncollectability of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. | |||||||||||||||||||||||||||||
In evaluating the adequacy of the Company’s loan loss reserves, management identifies loans believed to be impaired. Impaired loans are those not likely to be repaid as to principal and interest in accordance with the terms of the loan agreement. Impaired loans are reviewed individually by management and the net present value of the collateral is estimated. Reserves are maintained for each loan in which the principal balance of the loan exceeds the net present value of the collateral. In addition to the specific allowance for individually reviewed loans, a general allowance for potential loan losses is established based on management’s review of the composition of the loan portfolio with the purpose of identifying any concentrations of risk, and an analysis of historical loan charge-offs and recoveries. The final component of the allowance for loan losses incorporates management’s evaluation of current economic conditions and other risk factors which may impact the inherent losses in the loan portfolio. These evaluations are highly subjective and require that a great degree of judgmental assumptions be made by management. This component of the allowance for loan losses includes additional estimated reserves for internal factors such as changes in lending staff, loan policy and underwriting guidelines, and loan seasoning and quality, and external factors such as national and local economic trends and conditions. | |||||||||||||||||||||||||||||
The following tables detail the activity within our allowance for loan losses as of and for the years ended December 31, 2014, 2013 and 2012, by portfolio segment: | |||||||||||||||||||||||||||||
31-Dec-14 | |||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||
Commercial | |||||||||||||||||||||||||||||
Commercial | Real Estate | Consumer | Residential | Total | |||||||||||||||||||||||||
Allowance for loan losses: | |||||||||||||||||||||||||||||
Beginning balance | $ | 1,020 | $ | 5,312 | $ | 144 | $ | 2,967 | $ | 9,443 | |||||||||||||||||||
Charge-offs | (1,068 | ) | (4,646 | ) | (343 | ) | (974 | ) | (7,031 | ) | |||||||||||||||||||
Recoveries | 549 | 1,117 | 38 | 610 | 2,314 | ||||||||||||||||||||||||
Provision | 96 | 1,808 | 346 | (1,189 | ) | 1,061 | |||||||||||||||||||||||
Ending balance | $ | 597 | $ | 3,591 | $ | 185 | $ | 1,414 | $ | 5,787 | |||||||||||||||||||
Ending balances: | |||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 151 | $ | 1,008 | $ | 11 | $ | 737 | $ | 1,907 | |||||||||||||||||||
Collectively evaluated for impairment | $ | 446 | $ | 2,583 | $ | 174 | $ | 677 | $ | 3,880 | |||||||||||||||||||
Loans receivable: | |||||||||||||||||||||||||||||
Ending balance, total | $ | 30,894 | $ | 113,852 | $ | 6,229 | $ | 84,568 | $ | 235,543 | |||||||||||||||||||
Ending balances: | |||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 3,644 | $ | 25,146 | $ | 175 | $ | 12,418 | $ | 41,383 | |||||||||||||||||||
Collectively evaluated for impairment | $ | 27,250 | $ | 88,706 | $ | 6,054 | $ | 72,150 | $ | 194,160 | |||||||||||||||||||
31-Dec-13 | |||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||
Commercial | |||||||||||||||||||||||||||||
Commercial | Real Estate | Consumer | Residential | Total | |||||||||||||||||||||||||
Allowance for loan losses: | |||||||||||||||||||||||||||||
Beginning balance | $ | 1,982 | $ | 7,587 | $ | 124 | $ | 4,457 | $ | 14,150 | |||||||||||||||||||
Charge-offs | (1,691 | ) | (3,927 | ) | (217 | ) | (1,641 | ) | (7,476 | ) | |||||||||||||||||||
Recoveries | 724 | 2,230 | 48 | 1,264 | 4,266 | ||||||||||||||||||||||||
Provision | 5 | (578 | ) | 189 | (1,113 | ) | (1,497 | ) | |||||||||||||||||||||
Ending balance | $ | 1,020 | $ | 5,312 | $ | 144 | $ | 2,967 | $ | 9,443 | |||||||||||||||||||
Ending balances: | |||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 218 | $ | 2,455 | $ | 18 | $ | 1,105 | $ | 3,796 | |||||||||||||||||||
Collectively evaluated for impairment | $ | 802 | $ | 2,857 | $ | 126 | $ | 1,862 | $ | 5,647 | |||||||||||||||||||
Loans receivable: | |||||||||||||||||||||||||||||
Ending balance, total | $ | 33,711 | $ | 130,450 | $ | 7,928 | $ | 84,335 | $ | 256,424 | |||||||||||||||||||
Ending balances: | |||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 3,946 | $ | 29,540 | $ | 223 | $ | 11,970 | $ | 45,679 | |||||||||||||||||||
Collectively evaluated for impairment | $ | 29,765 | $ | 100,910 | $ | 7,705 | $ | 72,365 | $ | 210,745 | |||||||||||||||||||
31-Dec-12 | |||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||
Commercial | |||||||||||||||||||||||||||||
Commercial | Real Estate | Consumer | Residential | Total | |||||||||||||||||||||||||
Allowance for loan losses: | |||||||||||||||||||||||||||||
Beginning balance | $ | 3,239 | $ | 10,240 | $ | 103 | $ | 7,596 | $ | 21,178 | |||||||||||||||||||
Charge-offs | (3,242 | ) | (10,045 | ) | (106 | ) | (5,148 | ) | (18,541 | ) | |||||||||||||||||||
Recoveries | 284 | 331 | 12 | 356 | 983 | ||||||||||||||||||||||||
Provision | 1,701 | 7,061 | 115 | 1,653 | 10,530 | ||||||||||||||||||||||||
Ending balance | $ | 1,982 | $ | 7,587 | $ | 124 | $ | 4,457 | $ | 14,150 | |||||||||||||||||||
Ending balances: | |||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 833 | $ | 3,499 | $ | 15 | $ | 1,236 | $ | 5,583 | |||||||||||||||||||
Collectively evaluated for impairment | $ | 1,149 | $ | 4,088 | $ | 109 | $ | 3,221 | $ | 8,567 | |||||||||||||||||||
Loans receivable: | |||||||||||||||||||||||||||||
Ending balance, total | $ | 41,200 | $ | 161,335 | $ | 8,093 | $ | 91,606 | $ | 302,234 | |||||||||||||||||||
Ending balances: | |||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 4,957 | $ | 45,208 | $ | 239 | $ | 11,179 | $ | 61,583 | |||||||||||||||||||
Collectively evaluated for impairment | $ | 36,243 | $ | 116,127 | $ | 7,854 | $ | 80,427 | $ | 240,651 | |||||||||||||||||||
Loan Performance and Asset Quality | |||||||||||||||||||||||||||||
Generally, a loan will be placed on nonaccrual status when it becomes 90 days past due as to principal or interest, or when management believes, after considering economic and business conditions and collection efforts, that the borrower’s financial condition is such that collection of the loan is doubtful. When a loan is placed in nonaccrual status, interest accruals are discontinued and income earned but not collected is reversed. Cash receipts on nonaccrual loans are not recorded as interest income, but are used to reduce principal. | |||||||||||||||||||||||||||||
The following chart summarizes delinquencies and nonaccruals, by portfolio class, as of December 31, 2014, 2013 and 2012. | |||||||||||||||||||||||||||||
31-Dec-14 | |||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||
30-59 Days | 60-89 Days | 90+ Days | Total | Total Loans | Non- | ||||||||||||||||||||||||
Past Due | Past Due | Past Due | Past Due | Current | Receivable | accrual | |||||||||||||||||||||||
Commercial | $ | 282 | $ | 27 | $ | — | $ | 309 | $ | 30,585 | $ | 30,894 | $ | 633 | |||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||
Construction | 199 | — | 364 | 563 | 30,907 | 31,470 | 4,464 | ||||||||||||||||||||||
Other | 493 | 283 | 2,023 | 2,799 | 79,583 | 82,382 | 2,643 | ||||||||||||||||||||||
Real Estate: | |||||||||||||||||||||||||||||
Residential | 2,576 | 372 | 2,810 | 5,758 | 78,810 | 84,568 | 3,917 | ||||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||||
Other | 101 | 2 | — | 103 | 5,449 | 5,552 | — | ||||||||||||||||||||||
Revolving credit | 4 | 4 | 1 | 9 | 668 | 677 | 4 | ||||||||||||||||||||||
Total | $ | 3,655 | $ | 688 | $ | 5,198 | $ | 9,541 | $ | 226,002 | $ | 235,543 | $ | 11,661 | |||||||||||||||
31-Dec-13 | |||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||
30-59 Days | 60-89 Days | 90+ Days | Total | Total Loans | Non- | ||||||||||||||||||||||||
Past Due | Past Due | Past Due | Past Due | Current | Receivable | accrual | |||||||||||||||||||||||
Commercial | $ | 771 | $ | 146 | $ | 407 | $ | 1,324 | $ | 32,387 | $ | 33,711 | $ | 430 | |||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||
Construction | 215 | 33 | 2,243 | 2,491 | 36,408 | 38,899 | 4,208 | ||||||||||||||||||||||
Other | 1,156 | — | 3,414 | 4,570 | 86,981 | 91,551 | 4,017 | ||||||||||||||||||||||
Real Estate: | |||||||||||||||||||||||||||||
Residential | 2,188 | 830 | 1,381 | 4,399 | 79,936 | 84,335 | 1,936 | ||||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||||
Other | 191 | 219 | 35 | 445 | 6,710 | 7,155 | 40 | ||||||||||||||||||||||
Revolving credit | 18 | 3 | — | 21 | 752 | 773 | — | ||||||||||||||||||||||
Total | $ | 4,539 | $ | 1,231 | $ | 7,480 | $ | 13,250 | $ | 243,174 | $ | 256,424 | $ | 10,631 | |||||||||||||||
31-Dec-12 | |||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||
30-59 Days | 60-89 Days | 90+ Days | Total | Total Loans | Non- | ||||||||||||||||||||||||
Past Due | Past Due | Past Due | Past Due | Current | Receivable | accrual | |||||||||||||||||||||||
Commercial | $ | 767 | $ | 730 | $ | 956 | $ | 2,453 | $ | 38,747 | $ | 41,200 | $ | 1,197 | |||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||
Construction | 2,350 | 882 | 15,189 | 18,421 | 39,853 | 58,274 | 15,189 | ||||||||||||||||||||||
Other | 3,626 | 1,903 | 4,170 | 9,699 | 93,362 | 103,061 | 4,129 | ||||||||||||||||||||||
Real Estate: | |||||||||||||||||||||||||||||
Residential | 3,100 | 691 | 1,846 | 5,637 | 85,969 | 91,606 | 1,919 | ||||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||||
Other | 120 | 132 | 118 | 370 | 6,896 | 7,266 | 129 | ||||||||||||||||||||||
Revolving credit | 7 | 10 | 4 | 21 | 806 | 827 | 4 | ||||||||||||||||||||||
Total | $ | 9,970 | $ | 4,348 | $ | 22,283 | $ | 36,601 | $ | 265,633 | $ | 302,234 | $ | 22,567 | |||||||||||||||
At December 31, 2014, one residential real estate loan in the amount of $170 thousand was past due more than 90 days and still accruing interest. There were no loans outstanding 90 days or more and still accruing interest at December 31, 2013. One commercial real estate loan in the amount of $115 thousand and one residential real estate loan in the amount of $42 thousand were past due more than 90 days and still accruing interest at December 31, 2012. | |||||||||||||||||||||||||||||
The following tables summarize management’s internal credit risk grades, by portfolio class, as of December 31: | |||||||||||||||||||||||||||||
31-Dec-14 | |||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||
Commercial | |||||||||||||||||||||||||||||
Commercial | Real Estate | Consumer | Residential | Total | |||||||||||||||||||||||||
Grade 1 - Minimal | $ | 1,093 | $ | — | $ | 531 | $ | — | $ | 1,624 | |||||||||||||||||||
Grade 2 – Modest | 1,164 | 679 | 93 | 1,216 | 3,152 | ||||||||||||||||||||||||
Grade 3 – Average | 3,868 | 5,618 | 156 | 4,688 | 14,330 | ||||||||||||||||||||||||
Grade 4 – Satisfactory | 16,367 | 59,536 | 4,928 | 56,758 | 137,589 | ||||||||||||||||||||||||
Grade 5 – Watch | 2,905 | 16,091 | 178 | 4,695 | 23,869 | ||||||||||||||||||||||||
Grade 6 – Special Mention | 1,191 | 4,249 | 132 | 3,747 | 9,319 | ||||||||||||||||||||||||
Grade 7 – Substandard | 4,306 | 27,679 | 211 | 13,464 | 45,660 | ||||||||||||||||||||||||
Grade 8 – Doubtful | — | — | — | — | — | ||||||||||||||||||||||||
Grade 9 – Loss | — | — | — | — | — | ||||||||||||||||||||||||
Total loans receivable | $ | 30,894 | $ | 113,852 | $ | 6,229 | $ | 84,568 | $ | 235,543 | |||||||||||||||||||
31-Dec-13 | |||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||
Commercial | |||||||||||||||||||||||||||||
Commercial | Real Estate | Consumer | Residential | Total | |||||||||||||||||||||||||
Grade 1 - Minimal | $ | 1,364 | $ | — | $ | 775 | $ | — | $ | 2,139 | |||||||||||||||||||
Grade 2 – Modest | 314 | 1,066 | 98 | 1,835 | 3,313 | ||||||||||||||||||||||||
Grade 3 – Average | 4,782 | 6,412 | 914 | 3,437 | 15,545 | ||||||||||||||||||||||||
Grade 4 – Satisfactory | 17,092 | 67,453 | 5,045 | 53,868 | 143,458 | ||||||||||||||||||||||||
Grade 5 – Watch | 3,204 | 17,288 | 221 | 6,933 | 27,646 | ||||||||||||||||||||||||
Grade 6 – Special Mention | 1,788 | 10,028 | 133 | 5,127 | 17,076 | ||||||||||||||||||||||||
Grade 7 – Substandard | 5,167 | 28,203 | 742 | 13,135 | 47,247 | ||||||||||||||||||||||||
Grade 8 – Doubtful | — | — | — | — | — | ||||||||||||||||||||||||
Grade 9 – Loss | — | — | — | — | — | ||||||||||||||||||||||||
Total loans receivable | $ | 33,711 | $ | 130,450 | $ | 7,928 | $ | 84,335 | $ | 256,424 | |||||||||||||||||||
31-Dec-12 | |||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||
Commercial | |||||||||||||||||||||||||||||
Commercial | Real Estate | Consumer | Residential | Total | |||||||||||||||||||||||||
Grade 1 - Minimal | $ | 1,345 | $ | — | $ | 822 | $ | — | $ | 2,167 | |||||||||||||||||||
Grade 2 – Modest | 546 | 2,412 | 67 | 2,517 | 5,542 | ||||||||||||||||||||||||
Grade 3 – Average | 4,508 | 5,871 | 228 | 4,094 | 14,701 | ||||||||||||||||||||||||
Grade 4 – Satisfactory | 18,554 | 63,658 | 6,038 | 53,955 | 142,205 | ||||||||||||||||||||||||
Grade 5 – Watch | 6,997 | 32,640 | 366 | 10,923 | 50,926 | ||||||||||||||||||||||||
Grade 6 – Special Mention | 2,603 | 10,893 | 258 | 8,443 | 22,197 | ||||||||||||||||||||||||
Grade 7 – Substandard | 6,544 | 44,521 | 314 | 11,674 | 63,053 | ||||||||||||||||||||||||
Grade 8 – Doubtful | 103 | 1,340 | — | — | 1,443 | ||||||||||||||||||||||||
Grade 9 – Loss | — | — | — | — | — | ||||||||||||||||||||||||
Total loans receivable | $ | 41,200 | $ | 161,335 | $ | 8,093 | $ | 91,606 | $ | 302,234 | |||||||||||||||||||
Loans graded one through four are considered “pass” credits. As of December 31, 2014, $156.7 million, or 66.5% of the loan portfolio had a credit grade of “minimal,” “modest,” “average” or “satisfactory.” For loans to qualify for this grade, they must be performing relatively close to expectations, with no significant departures from the intended source and timing of repayment. | |||||||||||||||||||||||||||||
Loans with a credit grade of “watch” and “special mention” are not considered classified; however, they are categorized as a watch list credit and are considered potential problem loans. This classification is utilized by us when there is an initial concern about the financial health of a borrower. These loans are designated as such in order to be monitored more closely than other credits in the portfolio. Loans on the watch list are not considered problem loans until they are determined by management to be classified as substandard. As of December 31, 2014, loans with a credit grade of “watch” and “special mention” totaled $33.2 million. Watch list loans are considered potential problem loans and are monitored as they may develop into problem loans in the future. | |||||||||||||||||||||||||||||
Loans graded “substandard” or greater are considered classified credits. At December 31, 2014, classified loans totaled $45.7 million, with $41.1 million being collateralized by real estate. Classified credits are evaluated for impairment on a quarterly basis. This amount included $33.2 million in TDRs, of which $28.2 million were considered to be performing at December 31, 2014. Classified loans included $31.5 million in TDRs, of which $25.0 million were considered to be performing at December 31, 2013. | |||||||||||||||||||||||||||||
The Bank identifies impaired loans through its normal internal loan review process. A loan is considered impaired when, based on current information and events, it is probable that we will be unable to collect the scheduled payments of principal or interest when due, according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Impairment is measured on a loan-by-loan basis by calculating either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price, or the fair value of the collateral if the loan is collateral dependent. Any resultant shortfall is charged to provision for loan losses and is classified as a specific reserve. When an impaired loan is ultimately charged-off, the charge-off is taken against the specific reserve. | |||||||||||||||||||||||||||||
Large groups of smaller balance homogeneous loans are collectively evaluated for impairment. Impaired consumer and residential loans are identified for impairment disclosures, however, it is policy to individually evaluate for impairment all loans with a credit grade of “substandard” or greater that have an outstanding balance of $50 thousand or greater, and all loans with a credit grade of “special mention” that have outstanding principal balance of $100 thousand or greater. | |||||||||||||||||||||||||||||
Impaired loans are valued on a nonrecurring basis at the lower of cost or market value of the underlying collateral. Market values were obtained using independent appraisals, updated in accordance with our reappraisal policy, or other market data such as recent offers to the borrower. At December 31, 2014, the recorded investment in impaired loans was $41.4 million, compared to $45.7 million and $61.6 million at December 31, 2013 and 2012, respectively. | |||||||||||||||||||||||||||||
The following chart details our impaired loans, which includes troubled debt restructurings (“TDRs”) totaling $33.2 million, $31.5 million and $44.9 million, by category as of December 31, 2014, 2013 and 2012, respectively: | |||||||||||||||||||||||||||||
31-Dec-14 | |||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||
Unpaid | Average | Interest | |||||||||||||||||||||||||||
Recorded- | Principal | Related | Recorded | Income | |||||||||||||||||||||||||
Investment | Balance | Allowance | Investment | Recognized | |||||||||||||||||||||||||
With no related allowance recorded: | |||||||||||||||||||||||||||||
Commercial | $ | 1,852 | $ | 2,678 | $ | — | $ | 2,649 | $ | 79 | |||||||||||||||||||
Commercial real estate | 19,156 | 24,441 | — | 22,377 | 1,083 | ||||||||||||||||||||||||
Residential | 5,950 | 6,528 | — | 6,249 | 268 | ||||||||||||||||||||||||
Consumer | 32 | 32 | — | 34 | 3 | ||||||||||||||||||||||||
Total: | $ | 26,990 | $ | 33,679 | $ | — | $ | 31,309 | $ | 1,433 | |||||||||||||||||||
With an allowance recorded: | |||||||||||||||||||||||||||||
Commercial | 1,792 | 1,792 | 151 | 1,892 | 81 | ||||||||||||||||||||||||
Commercial real estate | 5,990 | 6,194 | 1,008 | 6,143 | 282 | ||||||||||||||||||||||||
Residential | 6,468 | 6,468 | 737 | 6,506 | 271 | ||||||||||||||||||||||||
Consumer | 143 | 143 | 11 | 150 | 8 | ||||||||||||||||||||||||
Total: | $ | 14,393 | $ | 14,597 | $ | 1,907 | $ | 14,691 | $ | 642 | |||||||||||||||||||
Total: | |||||||||||||||||||||||||||||
Commercial | 3,644 | 4,470 | 151 | 4,541 | 160 | ||||||||||||||||||||||||
Commercial real estate | 25,146 | 30,635 | 1,008 | 28,520 | 1,365 | ||||||||||||||||||||||||
Residential | 12,418 | 12,996 | 737 | 12,755 | 539 | ||||||||||||||||||||||||
Consumer | 175 | 175 | 11 | 184 | 11 | ||||||||||||||||||||||||
Total: | $ | 41,383 | $ | 48,276 | $ | 1,907 | $ | 46,000 | $ | 2,075 | |||||||||||||||||||
31-Dec-13 | |||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||
Unpaid | Average | Interest | |||||||||||||||||||||||||||
Recorded- | Principal | Related | Recorded | Income | |||||||||||||||||||||||||
Investment | Balance | Allowance | Investment | Recognized | |||||||||||||||||||||||||
With no related allowance recorded: | |||||||||||||||||||||||||||||
Commercial | $ | 1,464 | $ | 1,657 | $ | — | $ | 1,621 | $ | 50 | |||||||||||||||||||
Commercial real estate | 14,120 | 17,052 | — | 14,275 | 606 | ||||||||||||||||||||||||
Residential | 3,729 | 4,366 | — | 3,901 | 206 | ||||||||||||||||||||||||
Consumer | 55 | 79 | — | 60 | 7 | ||||||||||||||||||||||||
Total: | $ | 19,368 | $ | 23,154 | $ | — | $ | 19,857 | $ | 869 | |||||||||||||||||||
With an allowance recorded: | |||||||||||||||||||||||||||||
Commercial | 2,482 | 2,482 | 218 | 2,556 | 106 | ||||||||||||||||||||||||
Commercial real estate | 15,420 | 15,747 | 2,455 | 15,674 | 469 | ||||||||||||||||||||||||
Residential | 8,241 | 8,454 | 1,105 | 8,381 | 384 | ||||||||||||||||||||||||
Consumer | 168 | 168 | 18 | 163 | 8 | ||||||||||||||||||||||||
Total: | $ | 26,311 | $ | 26,851 | $ | 3,796 | $ | 26,774 | $ | 967 | |||||||||||||||||||
Total: | |||||||||||||||||||||||||||||
Commercial | 3,946 | 4,139 | 218 | 4,177 | 156 | ||||||||||||||||||||||||
Commercial real estate | 29,540 | 32,799 | 2,455 | 29,949 | 1,075 | ||||||||||||||||||||||||
Residential | 11,970 | 12,820 | 1,105 | 12,282 | 590 | ||||||||||||||||||||||||
Consumer | 223 | 247 | 18 | 223 | 15 | ||||||||||||||||||||||||
Total: | $ | 45,679 | $ | 50,005 | $ | 3,796 | $ | 46,631 | $ | 1,836 | |||||||||||||||||||
31-Dec-12 | |||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||
Unpaid | Average | Interest | |||||||||||||||||||||||||||
Recorded | Principal | Related | Recorded | Income | |||||||||||||||||||||||||
Investment | Balance | Allowance | Investment | Recognized | |||||||||||||||||||||||||
With no related allowance recorded: | |||||||||||||||||||||||||||||
Commercial | $ | 1,347 | $ | 1,367 | $ | — | $ | 1,660 | $ | 45 | |||||||||||||||||||
Commercial real estate | 18,926 | 24,381 | — | 26,255 | 708 | ||||||||||||||||||||||||
Residential | 3,504 | 4,288 | — | 3,523 | 118 | ||||||||||||||||||||||||
Consumer | 99 | 100 | — | 100 | 4 | ||||||||||||||||||||||||
Total: | $ | 23,876 | $ | 30,136 | $ | — | $ | 31,538 | $ | 875 | |||||||||||||||||||
With an allowance recorded: | |||||||||||||||||||||||||||||
Commercial | 3,610 | 3,719 | 833 | 3,521 | 143 | ||||||||||||||||||||||||
Commercial real estate | 26,282 | 27,904 | 3,499 | 21,704 | 542 | ||||||||||||||||||||||||
Residential | 7,675 | 8,033 | 1,236 | 7,917 | 369 | ||||||||||||||||||||||||
Consumer | 140 | 140 | 15 | 141 | 3 | ||||||||||||||||||||||||
Total: | $ | 37,707 | $ | 39,796 | $ | 5,583 | $ | 33,283 | $ | 1,057 | |||||||||||||||||||
Total: | |||||||||||||||||||||||||||||
Commercial | 4,957 | 5,086 | 833 | 5,181 | 188 | ||||||||||||||||||||||||
Commercial real estate | 45,208 | 52,285 | 3,499 | 47,959 | 1,250 | ||||||||||||||||||||||||
Residential | 11,179 | 12,321 | 1,236 | 11,440 | 487 | ||||||||||||||||||||||||
Consumer | 239 | 240 | 15 | 241 | 7 | ||||||||||||||||||||||||
Total: | $ | 61,583 | $ | 69,932 | $ | 5,583 | $ | 64,821 | $ | 1,932 | |||||||||||||||||||
TDRs are loans which have been restructured from their original contractual terms and include concessions that would not otherwise have been granted outside of the financial difficulty of the borrower. The Bank only restructures loans for borrowers in financial difficulty that have designed a viable business plan to fully pay off all obligations, including outstanding debt, interest and fees, either by generating additional income from the business or through liquidation of assets. Generally, these loans are restructured to provide the borrower additional time to execute upon their plans. | |||||||||||||||||||||||||||||
With respect to restructured loans, we grant concessions by (1) reduction of the stated interest rate for the remaining original life of the debt, or (2) extension of the maturity date at a stated interest rate lower than the current market rate for new debt with similar risk. We do not generally grant concessions through forgiveness of principal or accrued interest. Restructured loans where a concession has been granted through extension of the maturity date generally include extension of payments in an interest only period, extension of payments with capitalized interest and extension of payments through a forbearance agreement. These extended payment terms are also combined with a reduction of the stated interest rate in certain cases. | |||||||||||||||||||||||||||||
Success in restructuring loans has been mixed but it has proven to be a useful tool in certain situations to protect collateral values and allow certain borrowers additional time to execute upon defined business plans. In situations where a TDR is unsuccessful and the borrower is unable to follow through with terms of the restricted agreement, the loan is placed on nonaccrual status and continues to be written down to the underlying collateral value. | |||||||||||||||||||||||||||||
Our policy with respect to accrual of interest on loans restructured in a TDR follows relevant supervisory guidance. That is, if a borrower has demonstrated performance under the previous loan terms and shows capacity to perform under the restructured loan terms, continued accrual of interest at the restructured interest rate is likely. If a borrower was materially delinquent on payments prior to the restructuring but shows capacity to meet the restructured loan terms, the loan will likely continue as nonaccrual going forward. Lastly, if the borrower does not perform under the restructured terms, the loan is placed on nonaccrual status. | |||||||||||||||||||||||||||||
We will continue to closely monitor these loans and will cease accruing interest on them if management believes that the borrowers may not continue performing based on the restructured note terms. If, after previously being classified as a TDR, a loan is restructured a second time, then that loan is automatically placed on nonaccrual status. Our policy with respect to nonperforming loans requires the borrower to make a minimum of six consecutive payments in accordance with the loan terms before that loan can be placed back on accrual status. Further, the borrower must show capacity to continue performing into the future prior to restoration of accrual status. To date, we have not restored any nonaccrual loan classified as a TDR to accrual status. We believe that all of our modified loans meet the definition of a TDR. | |||||||||||||||||||||||||||||
The following is a summary of information pertaining to our TDRs: | |||||||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||||||||||||||||||
Nonperforming TDRs | $ | 5,013 | $ | 6,443 | $ | 14,891 | |||||||||||||||||||||||
Performing TDRs: | |||||||||||||||||||||||||||||
Commercial | 2,942 | 3,496 | 3,611 | ||||||||||||||||||||||||||
Commercial real estate | 17,499 | 14,673 | 20,343 | ||||||||||||||||||||||||||
Residential | 7,537 | 6,690 | 5,967 | ||||||||||||||||||||||||||
Consumer | 175 | 151 | 73 | ||||||||||||||||||||||||||
Total performing TDRs | 28,153 | 25,010 | 29,994 | ||||||||||||||||||||||||||
Total TDRs | $ | 33,166 | $ | 31,453 | $ | 44,885 | |||||||||||||||||||||||
The following table summarizes how loans that were considered TDRs were modified during the years indicated: | |||||||||||||||||||||||||||||
For the Year Ended December 31, 2014 | |||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||
TDRs that are in compliance | TDRs that subsequently defaulted(1) | ||||||||||||||||||||||||||||
with the terms of the agreement | |||||||||||||||||||||||||||||
Number | Pre- | Post | Number | Pre- | Post- | ||||||||||||||||||||||||
of | modification | modification | of | modification | modification | ||||||||||||||||||||||||
contracts | outstanding | outstanding | contracts | outstanding | outstanding | ||||||||||||||||||||||||
recorded | recorded | recorded | recorded | ||||||||||||||||||||||||||
investment | investment | investment | investment | ||||||||||||||||||||||||||
Commercial real estate | 25 | $ | 6,016 | $ | 5,837 | 1 | $ | 36 | $ | 36 | |||||||||||||||||||
Residential | 19 | 3,171 | 2,992 | 3 | 518 | 518 | |||||||||||||||||||||||
Commercial | 5 | 455 | 455 | — | — | — | |||||||||||||||||||||||
Consumer | 2 | 31 | 31 | — | — | — | |||||||||||||||||||||||
Total | 51 | $ | 9,673 | $ | 9,315 | 4 | $ | 554 | $ | 554 | |||||||||||||||||||
For the Year Ended December 31, 2013 | |||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||
TDRs that are in compliance | TDRs that subsequently defaulted(1) | ||||||||||||||||||||||||||||
with the terms of the agreement | |||||||||||||||||||||||||||||
Number | Pre- | Post | Number | Pre- | Post- | ||||||||||||||||||||||||
of | modification | modification | of | modification | modification | ||||||||||||||||||||||||
contracts | outstanding | outstanding | contracts | outstanding | outstanding | ||||||||||||||||||||||||
recorded | recorded | recorded | recorded | ||||||||||||||||||||||||||
investment | investment | investment | investment | ||||||||||||||||||||||||||
Commercial real estate | 4 | $ | 1,309 | $ | 1,309 | — | $ | — | $ | — | |||||||||||||||||||
Residential | 6 | 1,401 | 1,401 | — | — | — | |||||||||||||||||||||||
Commercial | 12 | 636 | 636 | — | — | — | |||||||||||||||||||||||
Consumer | 5 | 84 | 84 | — | — | — | |||||||||||||||||||||||
Total | 27 | $ | 3,430 | $ | 3,430 | — | $ | — | $ | — | |||||||||||||||||||
For the Year Ended December 31, 2012 | |||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||
TDRs that are in compliance | TDRs that subsequently defaulted(1) | ||||||||||||||||||||||||||||
with the terms of the agreement | |||||||||||||||||||||||||||||
Number | Pre- | Post | Number | Pre- | Post- | ||||||||||||||||||||||||
of | modification | modification | of | modification | modification | ||||||||||||||||||||||||
contracts | outstanding | outstanding | contracts | outstanding | outstanding | ||||||||||||||||||||||||
recorded | recorded | recorded | recorded | ||||||||||||||||||||||||||
investment | investment | investment | investment | ||||||||||||||||||||||||||
Commercial real estate | 7 | $ | 9,326 | $ | 9,326 | 4 | $ | 2,730 | $ | 2,730 | |||||||||||||||||||
Residential | 4 | 2,182 | 2,182 | — | — | — | |||||||||||||||||||||||
Commercial | 15 | 756 | 756 | 1 | 91 | 91 | |||||||||||||||||||||||
Consumer | — | — | — | — | — | — | |||||||||||||||||||||||
Total | 26 | $ | 12,264 | $ | 12,264 | 5 | $ | 2,821 | $ | 2,821 | |||||||||||||||||||
(1) Loans past due 90 days or more are considered to be in default. | |||||||||||||||||||||||||||||
Portions of the allowance for loan losses may be allocated for specific loans or portfolio segments. However, the entire allowance for loan losses is available for any loan that, in management’s judgment, should be charged-off. While management utilizes the best judgment and information available to it, the ultimate adequacy of the allowance for loan losses depends on a variety of factors beyond our control, including the performance of our loan portfolio, the economy, changes in interest rates, and the view of the regulatory authorities toward loan classifications. If delinquencies and defaults increase, we may be required to increase our provision for loan losses, which would adversely affect our results of operations and financial condition. There can be no assurance that charge-offs of loans in future periods will not exceed the allowance for loan losses as estimated at any point in time or that provisions for loan losses will not be significant to a particular accounting period. | |||||||||||||||||||||||||||||
The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. These instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the balance sheets. | |||||||||||||||||||||||||||||
The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit is represented by the contractual or notional amount of those instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance-sheet instruments. | |||||||||||||||||||||||||||||
Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loans to customers. The fair value of standby letters of credit is insignificant. | |||||||||||||||||||||||||||||
Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since some of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation of the counter-party. | |||||||||||||||||||||||||||||
Collateral held for commitments to extend credit and standby letters of credit varies but may include accounts receivable, inventory, property, plant, equipment, and income-producing commercial properties. The following table summarizes the Company’s off-balance sheet financial instruments whose contract amounts represent credit risk: | |||||||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||||||||||||||||||
Commitments to extend credit | $ | 27,017 | $ | 29,836 | $ | 29,473 | |||||||||||||||||||||||
Standby letters of credit | 247 | 361 | 490 |
PREMISES_FURNITURE_AND_EQUIPME
PREMISES, FURNITURE AND EQUIPMENT | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||
PREMISES, FURNITURE AND EQUIPMENT | NOTE 6 - PREMISES, FURNITURE AND EQUIPMENT | ||||||||||||
Premises, furniture and equipment consisted of the following: | |||||||||||||
December 31, | |||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||
Land | $ | 7,099 | $ | 7,099 | $ | 7,099 | |||||||
Buildings and land improvements | 16,082 | 16,134 | 16,213 | ||||||||||
Furniture and equipment | 7,874 | 7,608 | 7,599 | ||||||||||
Leasehold improvements | 65 | 65 | 65 | ||||||||||
31,120 | 30,906 | 30,976 | |||||||||||
Less accumulated depreciation | (10,828 | ) | (10,104 | ) | (9,282 | ) | |||||||
Premises, furniture and equipment, net | $ | 20,292 | $ | 20,802 | $ | 21,694 | |||||||
Depreciation expense for the years ended December 31, 2014, 2013 and 2012 was $789 thousand, $824 thousand, and $923 thousand, respectively. In January 2012, we closed our Meeting Street and Homewood’s branches to reduce our expenses, and wrote those properties down to appraised value, less costs to sell, in 2012. |
OTHER_REAL_ESTATE_OWNED
OTHER REAL ESTATE OWNED | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Other Real Estate [Abstract] | |||||||||||||
OTHER REAL ESTATE OWNED | NOTE 7 – OTHER REAL ESTATE OWNED | ||||||||||||
Transactions in other real estate owned for the years ended December 31: | |||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||
Balance, beginning of year | $ | 24,972 | $ | 19,464 | $ | 15,665 | |||||||
Additions | 2,183 | 17,659 | 14,398 | ||||||||||
Sales | (7,337 | ) | (11,383 | ) | (7,839 | ) | |||||||
Write-downs | (317 | ) | (768 | ) | (2,760 | ) | |||||||
Balance, end of period | $ | 19,501 | $ | 24,972 | $ | 19,464 |
OTHER_ASSETS
OTHER ASSETS | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||
OTHER ASSETS | NOTE 8 - OTHER ASSETS | ||||||||||||
Other assets consisted of the following at December 31: | |||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||
Prepaid expenses and insurance | $ | 736 | $ | 471 | $ | 603 | |||||||
Unamortized software | 52 | 29 | 42 | ||||||||||
Receivable from sale of other real estate owned | — | 3,348 | — | ||||||||||
Proceeds due from life insurance | 1,208 | — | — | ||||||||||
Other | 508 | 358 | 181 | ||||||||||
Total | $ | 2,504 | $ | 4,206 | $ | 826 |
DEPOSITS
DEPOSITS | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Deposits: | |||||
DEPOSITS | NOTE 9 - DEPOSITS | ||||
At December 31, 2014, the scheduled maturities of time deposits were as follows (in thousands): | |||||
Maturing in: | Amount | ||||
Less than one year | $ | 115,492 | |||
One to three years | 77,616 | ||||
Three to five years | 25,801 | ||||
Beyond five years | 1,890 | ||||
$ | 220,799 | ||||
Time deposits in excess of the FDIC insurance limit of $250 thousand were $40.1 million, $47.7 million, $69.9 million as of December 31, 2014, 2013, and 2012, respectively. | |||||
Overdrawn transaction accounts in the amount of $17 thousand, $41 thousand and $43 thousand were classified as loans as of December 31, 2014, 2013 and 2012, respectively. | |||||
Brokered deposits were $14.1 million, $18.6 million and $43.1 million as of December 31, 2014, 2013 and 2012, respectively. | |||||
Related party deposits by directors including their affiliates and executive officers totaled approximately $1.4 million, $589 thousand and $618 thousand at December 31, 2014, 2013 and 2012, respectively. |
ADVANCES_FROM_THE_FEDERAL_HOME
ADVANCES FROM THE FEDERAL HOME LOAN BANK | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Federal Home Loan Bank, Advances, General Debt Obligations, Disclosures [Abstract] | ||||||||||||||
ADVANCES FROM THE FEDERAL HOME LOAN BANK | NOTE 10 - ADVANCES FROM THE FEDERAL HOME LOAN BANK | |||||||||||||
Advances from the Federal Home Loan Bank consisted of the following at December 31, 2014: | ||||||||||||||
(Dollars in thousands) | Advance | Advance | Advance | Maturing | ||||||||||
Type | Amount | Rate | On | |||||||||||
Convertible Advance | $ | 2,000 | 3.60% | 9/4/18 | ||||||||||
Convertible Advance | 5,000 | 3.45% | 9/10/18 | |||||||||||
Convertible Advance | 5,000 | 2.95% | 9/18/18 | |||||||||||
Fixed Rate | 5,000 | 3.86% | 8/20/19 | |||||||||||
$ | 17,000 | |||||||||||||
As of December 31, 2014 we had advances totaling $17.0 million with various interest rates and maturity dates. Interest on fixed rate advances is generally payable monthly and interest on fixed rate advances is payable quarterly. Convertible advances are callable by the Federal Home Loan Bank on their respective call dates. The Company has the option to either repay any advance that has been called or to refinance the advance as a convertible advance. | ||||||||||||||
At December 31, 2014, the Company had pledged as collateral for FHLB advances approximately $791 thousand of one-to-four family first mortgage loans, $3.7 million of commercial real estate loans, $4.7 million in home equity lines of credit, $45 thousand in multifamily loans and $21.2 million of agency and private issue mortgage-backed securities. The Company has an investment in Federal Home Loan Bank stock of $1.2 million. The Company has $11.6 million in excess borrowing capacity with the Federal Home Loan Bank that is available if liquidity needs should arise. As a result of negative financial performance indicators, there is also a risk that the Bank’s ability to borrow from the FHLB could be curtailed or eliminated, although to date the Bank has not been denied advances from the FHLB or had to pledge additional collateral for its borrowings. | ||||||||||||||
As of December 31, 2014, scheduled principal reductions include $12.0 million in 2018, and $5.0 million in 2019. |
JUNIOR_SUBORDINATED_DEBENTURES
JUNIOR SUBORDINATED DEBENTURES | 12 Months Ended |
Dec. 31, 2014 | |
Junior Subordinated Notes [Abstract] | |
JUNIOR SUBORDINATED DEBENTURES | NOTE 11 – JUNIOR SUBORDINATED DEBENTURES |
On December 21, 2004, HCSB Financial Trust I, (a non-consolidated subsidiary) issued $6.0 million floating rate trust preferred securities with a maturity of December 31, 2034. In accordance with current accounting standards, the trust has not been consolidated in these financial statements. The Company received from the Trust the $6.0 million proceeds from the issuance of the securities and the $186 thousand initial proceeds from the capital investment in the Trust and, accordingly, has shown the funds due to the trust as a $6.2 million junior subordinated debenture. The current regulatory rules allow certain amounts of junior subordinated debentures to be included in the calculation of regulatory capital. The debenture issuance costs, net of accumulated amortization, totaled $73 thousand at December 31, 2014 and are included in other assets on the consolidated balance sheet. Amortization of debt issuance costs totaled approximately $4 thousand for each of the years ended December 31, 2014, 2013 and 2012. The Federal Reserve Bank of Richmond has prohibited the Company from paying interest due on the trust preferred securities since February 2011 and as a result, the Company has deferred interest payments in the amount of approximately $714 thousand as of December 31, 2014. All of the deferred interest, including interest accrued on such deferred interest, is due and payable at the end of the applicable deferral period, which is in March 2016. The Company will not be able to pay this interest when it becomes due if it is not able to raise a sufficient amount of additional capital for the Bank to be in compliance with the Consent Order and for the Company to make the payments due under the subordinated notes, which are senior to the trust preferred securities. Even if the Company succeeds in raising this capital, it will have to be released from the Written Agreement or obtain approval from the Federal Reserve Bank of Richmond to pay this interest on the trust preferred securities. If this interest is not paid by March 2016, the Company will be in default under the terms of the indenture related to the trust preferred securities. If the Company fails to pay the deferred and compounded interest at the end of the deferral period, the trustee or the holders of 25% of the aggregate trust preferred securities outstanding, by providing written notice to the Company, may declare the entire principal and unpaid interest amounts of the trust preferred securities immediately due and payable. The aggregate principal amount of these trust preferred securities is $6.0 million. If the trustee or the holders of the trust preferred securities demand immediate payment in full of the entire principal and unpaid interest amounts of the trust preferred securities, the Company could be forced into involuntary bankruptcy. |
SUBORDINATED_DEBENTURES
SUBORDINATED DEBENTURES | 12 Months Ended |
Dec. 31, 2014 | |
Subordinated Borrowings [Abstract] | |
SUBORDINATED DEBENTURES | NOTE 12 - SUBORDINATED DEBENTURES |
On July 31, 2010, the Company completed a private placement of subordinated promissory notes that totaled $12.1 million. The notes initially bear interest at a rate of 9% per annum payable semiannually on April 5th and October 5th and are callable by the Company four years after the date of issuance and mature 10 years from the date of issuance. After October 5, 2014 and until maturity, the notes bear interest at a rate equal to the current Prime Rate in effect, as published by the Wall Street Journal, plus 3%; provided, that the rate of interest shall not be less than 8% per annum or more than 12% per annum. The subordinated notes have been structured to fully count as Tier 2 regulatory capital on a consolidated basis. | |
During 2013, $1.0 million of the subordinated notes were cancelled by the holder as part of a settlement of litigation between the holder, the Bank, and the Company. The Company is obligated to downstream funds in this amount to the Bank when it is able to do so, but the forgiveness of this debt has been included in noninterest income in the consolidated statements of operations. | |
The Federal Reserve Bank of Richmond has prohibited the Company from paying interest due on the subordinated notes since October 2011 and, as a result, the Company has deferred interest payments in the amount of approximately $3.7 million as of December 31, 2014. |
LEASE_COMMITMENTS
LEASE COMMITMENTS | 12 Months Ended |
Dec. 31, 2014 | |
Leases [Abstract] | |
LEASE COMMITMENTS | NOTE 13 - LEASE COMMITMENTS |
On January 1, 2013, the Company renewed a lease agreement for land on which to operate its Tabor City branch. The lease has a five-year term that expires December 31, 2017. The Company has an option for eight additional five-year renewal periods thereafter. The lease has a rental amount of $1,047 per month. The lease gives the Company the first right of refusal to purchase the property at an unimproved value if the owners decide to sell. The Company also pays applicable property taxes on the property. | |
Future minimum lease payments are expected to be approximately $12,564 per year for the next three years. |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 14 - COMMITMENTS AND CONTINGENCIES |
In the ordinary course of business, the Company may, from time to time, become a party to legal claims and disputes. At December 31, 2014, the Company is being investigated related to the sale of senior subordinated debentures in 2010 by the Company and has received subpoenas from the United States Attorney for the District of South Carolina, the South Carolina Attorney General and the Securities and Exchange Commission. The Company has fully responded to all of the subpoenas and provided testimony. The Company is also involved in litigation by certain subordinated debt holders alleging misuse of the funds and wrongful conduct amount other allegations in the issuance of the subordinated debentures. In 2012, certain investors, seeking class action treatment, filed suit against the Company alleging sale of its stock without disclosure of material financial information. The Bank is also involved in another legal matter related to unauthorized charges on a customer account. The Company and the Bank believe that all claims or legal proceedings are without merit and will not have a material adverse effect on the financial condition or operation of the Company. Management was not aware of any other pending or threatened litigation or unassisted claims that could result in losses, if any, that would be material to the financial statements. | |
The Federal Reserve Bank of Richmond has informed the Company that it is required to contribute $1 million to the Bank as soon as the Company has the funds available to do so for repayment of a loan deemed made from the Bank to the Company in such amount. The Bank considers this to be a contingency and is a general unsecured creditor of the Company. | |
The details of the above cases are included in “Legal Proceedings” under Part I, Item 3 of the Annual Report on Form 10-K. |
SHAREHOLDERS_EQUITY
SHAREHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2014 | |
Stockholders' Equity Note [Abstract] | |
SHAREHOLDERS' EQUITY | NOTE 15 - SHAREHOLDERS’ EQUITY |
Preferred Stock – In March 2009, in connection with the CPP, established as part of the Emergency Economic Stabilization Act of 2008, the Company issued to the U.S. Treasury 12,895 shares of the Company’s Fixed Rate Cumulative Perpetual Preferred Stock, Series T (the “Series T Preferred Stock”), having a liquidation preference of $1,000 per share. The Series T Preferred Stock has a dividend rate of 5% for the first five years and 9% thereafter, and has a call feature after three years. | |
In connection with the sale of the Series T Preferred Stock, the Company also issued to the U.S. Treasury a ten-year warrant to purchase up to 91,714 shares of the Company’s common stock at an initial exercise price of $21.09 per share. | |
As required under the CPP, dividend payments on and repurchases of the Company’s common stock are subject to certain restrictions. For as long as the Series T Preferred Stock is outstanding, no dividends may be declared or paid on the Company’s common stock until all accrued and unpaid dividends on the Series T Preferred Stock are fully paid. In addition, the U.S. Treasury’s consent is required for any increase in dividends on common stock before the third anniversary of issuance of the Series T Preferred Stock and for any repurchase of any common stock except for repurchases of common shares in connection with benefit plans. | |
The Series T Preferred Stock and the CPP warrant were sold to the U.S. Treasury for an aggregate purchase price of $12.9 million in cash. The purchase price was allocated between the Series T Preferred Stock and the CPP warrant based upon the relative fair values of each to arrive at the amounts recorded by the Company. This resulted in the Series T Preferred Stock being issued at a discount which is being amortized on a level yield basis as a charge to retained earnings over an assumed life of five years. | |
As of February 2011, the Federal Reserve Bank of Richmond, the Company’s primary federal regulator, has required the Company to defer dividend payments on the 12,895 shares of the Series T Preferred Stock issued to the U.S. Treasury in March 2009 pursuant to the CPP and interest payments on the $6.0 million of trust preferred securities issued in December 2004. Therefore, for each quarterly period beginning in February 2011, the Company notified the U.S. Treasury of its deferral of quarterly dividend payments on the 12,895 shares of Series T Preferred Stock and also informed the Trustee of the $6.0 million of trust preferred securities of its deferral of the quarterly interest payments. The amount of each of the Company’s quarterly interest payments was approximately $161 thousand through March 2014 and then increased to $290 thousand and, as of December 31, 2014, the Company had $3.0 million of deferred dividend payments due on the Series T Preferred Stock issued to the U.S. Treasury. Because the Company has deferred these sixteen payments, the Company is prohibited from paying any dividends on its common stock until all deferred payments have been made in full. In addition, whenever dividends payable on the shares of the Series T Preferred Stock have been deferred for an aggregate of six or more quarterly dividend periods, the holders of the preferred stock have the right to elect two directors to fill newly created directorships at the Company’s next annual meeting of the shareholders. As a result of the Company’s deferral of dividend payments on the Series T Preferred Stock, the U.S. Treasury, the current holder of all 12,895 shares of the Series T Preferred Stock, requested the Company’s non-objection to appoint a representative to observe monthly meetings of the Company’s Board of Directors. The Company granted the Treasury’s request and a representative of Treasury has attended the Company’s monthly board meetings since June 2012. As of the date of this report, Treasury has not notified the Company whether it intends to elect two directors to fill newly created directorships at the Company’s 2015 annual meeting of the shareholders. The Company has never paid a cash dividend, but as a result of the Company’s financial condition and these restrictions on the Company, including the restrictions on the Bank’s ability to pay dividends to the Company, the Company has not been permitted to pay a dividend on its common stock since 2009. | |
Restrictions on Dividends - South Carolina banking regulations restrict the amount of dividends that can be paid to shareholders. All of the Bank’s dividends to the Company are payable only from the undivided profits of the Bank. At December 31, 2014, the Bank had negative retained earnings. In addition, pursuant to the terms of the Consent Order, the Bank is prohibited from declaring a dividend on its shares of common stock unless it receives approval from the FDIC and the State Board. Under Federal Reserve Board regulations, the amounts of loans or advances from the Bank to the parent company are also restricted. Under the terms of the Written Agreement, the Company is also prohibited from declaring or paying any dividends without the prior written approval of the Federal Reserve Bank of Richmond. In addition, the Company is prohibited from paying any dividends on its common stock until all deferred payments on the 12,985 shares of preferred stock issued to Treasury pursuant to the Capital Purchase Program have been made in full. |
CAPITAL_REQUIREMENTS
CAPITAL REQUIREMENTS | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
Regulatory Capital Requirements [Abstract] | |||||||||||||||||||||||||
CAPITAL REQUIREMENTS | NOTE 16 - CAPITAL REQUIREMENTS | ||||||||||||||||||||||||
The Company and the Bank are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a material effect on the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the Bank must meet specific capital guidelines that involve quantitative measures of their assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. | |||||||||||||||||||||||||
Quantitative measures established by regulation to ensure capital adequacy require the Company and the Bank to maintain minimum ratios of Tier 1 and total capital as a percentage of assets and off-balance sheet exposures, adjusted for risk weights ranging from 0% to 100%. Tier 1 capital consists of common shareholders’ equity, excluding the unrealized gain or loss on securities available-for-sale, minus certain intangible assets. Tier 2 capital consists of the allowance for loan losses subject to certain limitations. Total capital for purposes of computing the capital ratios consists of the sum of Tier 1 and Tier 2 capital. The Company and the Bank are also required to maintain capital at a minimum level based on quarterly average assets, which is known as the leverage ratio. | |||||||||||||||||||||||||
To be considered “well-capitalized,” the Bank must maintain total risk-based capital of at least 10%, Tier 1 capital of at least 6%, and a leverage ratio of at least 5%. To be considered “adequately capitalized” under these capital guidelines, the Bank must maintain a minimum total risk-based capital of 8%, with at least 4% being Tier 1 capital. In addition, Bank must maintain a minimum Tier 1 leverage ratio of at least 4%. Further, pursuant to the terms of the Consent Order with the FDIC and the State Board, the Bank must achieve and maintain Tier 1 capital at least equal to 8% and total risk-based capital at least equal to 10%. | |||||||||||||||||||||||||
At December 31, 2014, the Company was categorized as “critically undercapitalized” and the Bank was categorized as “significantly undercapitalized.” Our losses for the past few years have adversely impacted our capital. As a result, we have been pursuing a plan to increase our capital ratios in order to strengthen our balance sheet and satisfy the commitments required under the Consent Order. However, if we continue to fail to meet the capital requirements in the Consent Order in a timely manner, then this would result in additional regulatory actions, which could ultimately lead to the Bank being taken into receivership by the FDIC. Our auditors have noted that the uncertainty of our ability to obtain sufficient capital raises concerns about our ability to continue as a going concern. | |||||||||||||||||||||||||
The following table summarizes the capital ratios and the regulatory minimum requirements for the Company and the Bank. | |||||||||||||||||||||||||
Actual | Minimum | Minimum | |||||||||||||||||||||||
Capital | To Be Well | ||||||||||||||||||||||||
Requirement | Capitalized Under | ||||||||||||||||||||||||
Prompt Corrective | |||||||||||||||||||||||||
Action Provisions | |||||||||||||||||||||||||
(Dollars in thousands) | Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||||||||||
31-Dec-14 | |||||||||||||||||||||||||
The Company | |||||||||||||||||||||||||
Total Capital (to Risk-Weighted Assets) | $ | (10,402 | ) | (3.61 | )% | $ | 23,031 | 8 | % | N/A | N/A | ||||||||||||||
Tier I Capital (to Risk-Weighted Assets) | $ | (10,402 | ) | (3.61 | )% | $ | 11,516 | 4 | % | N/A | N/A | ||||||||||||||
Tier I Capital (to Average Assets) | $ | (10,402 | ) | (2.36 | )% | $ | 17,614 | 4 | % | N/A | N/A | ||||||||||||||
The Bank | |||||||||||||||||||||||||
Total Capital (to Risk-Weighted Assets) | $ | 14,533 | 5.05 | % | $ | 23,008 | 8 | % | $ | 28,760 | 10 | % | |||||||||||||
Tier I Capital (to Risk-Weighted Assets) | $ | 10,911 | 3.79 | % | $ | 11,504 | 4 | % | (1 | ) | (1 | ) | |||||||||||||
Tier I Capital (to Average Assets) | $ | 10,911 | 2.53 | % | $ | 17,255 | 4 | % | $ | 34,510 | 8 | % | |||||||||||||
31-Dec-13 | |||||||||||||||||||||||||
The Company | |||||||||||||||||||||||||
Total Capital (to Risk-Weighted Assets) | $ | (10,169 | ) | (3.19 | )% | $ | 25,512 | 8 | % | N/A | N/A | ||||||||||||||
Tier I Capital (to Risk-Weighted Assets) | $ | (10,169 | ) | (3.19 | )% | $ | 12,756 | 4 | % | N/A | N/A | ||||||||||||||
Tier I Capital (to Average Assets) | $ | (10,169 | ) | (2.23 | )% | $ | 18,242 | 4 | % | N/A | N/A | ||||||||||||||
The Bank | |||||||||||||||||||||||||
Total Capital (to Risk-Weighted Assets) | $ | 13,842 | 4.34 | % | $ | 25,505 | 8 | % | $ | 31,881 | 10 | % | |||||||||||||
Tier I Capital (to Risk-Weighted Assets) | $ | 9,789 | 3.07 | % | $ | 12,753 | 4 | % | (1 | ) | (1 | ) | |||||||||||||
Tier I Capital (to Average Assets) | $ | 9,789 | 2.17 | % | $ | 18,067 | 4 | % | $ | 36,135 | 8 | % | |||||||||||||
31-Dec-12 | |||||||||||||||||||||||||
The Company | |||||||||||||||||||||||||
Total Capital (to Risk-Weighted Assets) | $ | (11,932 | ) | (3.44 | )% | $ | 27,754 | 8 | % | N/A | N/A | ||||||||||||||
Tier I Capital (to Risk-Weighted Assets) | $ | (11,932 | ) | (3.44 | )% | $ | 13,877 | 4 | % | N/A | N/A | ||||||||||||||
Tier I Capital (to Average Assets) | $ | (11,932 | ) | (2.34 | )% | $ | 20,367 | 4 | % | N/A | N/A | ||||||||||||||
The Bank | |||||||||||||||||||||||||
Total Capital (to Risk-Weighted Assets) | $ | 12,175 | 3.51 | % | $ | 27,733 | 8 | % | $ | 34,667 | 10 | % | |||||||||||||
Tier I Capital (to Risk-Weighted Assets) | $ | 7,720 | 2.23 | % | $ | 13,867 | 4 | % | (1 | ) | (1 | ) | |||||||||||||
Tier I Capital (to Average Assets) | $ | 7,720 | 1.56 | % | $ | 19,816 | 4 | % | $ | 39,632 | 8 | % | |||||||||||||
(1) Minimum capital amounts and ratios presented are amounts to be well-capitalized under the various regulatory capital requirements administered by the FDIC. On February 10, 2011, the Bank became subject to a regulatory Consent Order with the FDIC. Minimum capital amounts and ratios presented for the Bank are the minimum levels set forth in the Consent Order. No minimum Tier 1 capital to risk-weighted assets ratio was specified in the Consent Order. Regardless of the Bank’s capital ratios, it is unable to be classified as “well-capitalized” while it is operating under the Consent Order with the FDIC. | |||||||||||||||||||||||||
As noted above, in July 2013, the federal bank regulatory agencies issued a final rule that will revise their risk-based capital requirements and the method for calculating risk-weighted assets to make them consistent with agreements that were reached by Basel III and certain provisions of the Dodd-Frank Act. The rule applies to all national and state banks, such as the Bank, and savings associations and most bank holding companies and savings and loan holding companies, which we collectively refer to herein as “covered” banking organizations. Bank holding companies with less than $500 million in total consolidated assets, such as the Company, are not subject to the final rule, nor are savings and loan holding companies substantially engaged in commercial activities or insurance underwriting. The requirements in the rule began to phase in on January 1, 2015 for covered banking organizations such as the Bank. The requirements in the rule will be fully phased in by January 1, 2019. | |||||||||||||||||||||||||
Effective January 1, 2015, the final rules require the Company to comply with the following new minimum capital ratios: (i) a new common equity Tier 1 capital ratio of 4.5% of risk-weighted assets; (ii) a Tier 1 capital ratio of 6.0% of risk-weighted assets (increased from the current requirement of 4.0%); (iii) a total capital ratio of 8.0% of risk-weighted assets (unchanged from current requirement); and (iv) a leverage ratio of 4.0% of total assets. These are the initial capital requirements, which will be phased in over a four-year period. When fully phased in on January 1, 2019, the rules will require the Company and the Bank to maintain (i) a minimum ratio of common equity Tier 1 to risk-weighted assets of at least 4.5%, plus a 2.5% “capital conservation buffer” (which is added to the 4.5% common equity Tier 1 ratio as that buffer is phased in, effectively resulting in a minimum ratio of common equity Tier 1 to risk-weighted assets of at least 7.0% upon full implementation), (ii) a minimum ratio of Tier 1 capital to risk-weighted assets of at least 6.0%, plus the capital conservation buffer (which is added to the 6.0% Tier 1 capital ratio as that buffer is phased in, effectively resulting in a minimum Tier 1 capital ratio of 8.5% upon full implementation), (iii) a minimum ratio of total capital to risk-weighted assets of at least 8.0%, plus the capital conservation buffer (which is added to the 8.0% total capital ratio as that buffer is phased in, effectively resulting in a minimum total capital ratio of 10.5% upon full implementation), and (iv) a minimum leverage ratio of 4.0%, calculated as the ratio of Tier 1 capital to average assets. | |||||||||||||||||||||||||
The capital conservation buffer requirement will be phased in beginning January 1, 2016, at 0.625% of risk-weighted assets, increasing each year until fully implemented at 2.5% on January 1, 2019. The capital conservation buffer is designed to absorb losses during periods of economic stress. Banking institutions with a ratio of common equity Tier 1 to risk-weighted assets above the minimum but below the conservation buffer will face constraints on dividends, equity repurchases, and compensation based on the amount of the shortfall. | |||||||||||||||||||||||||
With respect to the Bank, the rules also revised the “prompt corrective action” regulations pursuant to Section 38 of the FDIA by (i) introducing a common equity Tier 1 capital ratio requirement at each level (other than critically undercapitalized), with the required ratio being 6.5% for well-capitalized status; (ii) increasing the minimum Tier 1 capital ratio requirement for each category, with the minimum ratio for well-capitalized status being 8.0% (as compared to the current 6.0%); and (iii) eliminating the current provision that provides that a bank with a composite supervisory rating of 1 may have a 3.0% Tier 1 leverage ratio and still be well-capitalized. | |||||||||||||||||||||||||
The new capital requirements also include changes in the risk weights of assets to better reflect credit risk and other risk exposures. These include a 150% risk weight (up from 100%) for certain high volatility commercial real estate acquisition, development and construction loans and nonresidential mortgage loans that are 90 days past due or otherwise on nonaccrual status, a 20% (up from 0%) credit conversion factor for the unused portion of a commitment with an original maturity of one year or less that is not unconditionally cancellable, a 250% risk weight (up from 100%) for mortgage servicing rights and deferred tax assets that are not deducted from capital, and increased risk-weights (from 0% to up to 600%) for equity exposures. | |||||||||||||||||||||||||
If the new minimum capital ratios described above had been effective as of December 31, 2014, based on management’s interpretation and understanding of the new rules, the Company would have remained critically undercapitalized and the Bank would have remained significantly undercapitalized as of such date. |
RETIREMENT_AND_BENEFITS
RETIREMENT AND BENEFITS | 12 Months Ended |
Dec. 31, 2014 | |
Compensation and Retirement Disclosure [Abstract] | |
RETIREMENT AND BENEFITS | NOTE 17 - RETIREMENT AND BENEFITS |
Trustee Retirement Savings Plan - The Bank has a trustee retirement savings plan which provides retirement benefits to substantially all officers and employees who meet certain age and service requirements. The plan includes a “salary reduction” feature pursuant to Section 401(k) of the Internal Revenue Code. Under the plan and present policies, participants are permitted to contribute up to 15% of their annual compensation. At its discretion, the Bank can make matching contributions up to 4% of the participants’ compensation. In an effort to reduce expenses, the Bank made no contributions to employee 401(k) plans in 2014, 2013 or 2012. | |
Directors Deferred Compensation Plan - The Company has a deferred compensation plan whereby directors may elect to defer the payment of their fees. Under the terms of the plan, the Company accrues an expense equal to the amount deferred plus an interest component based on the prime rate of interest at the beginning of each year. The Company has also purchased life insurance contracts on each of the participating directors. All active directors have relinquished the right to their deferred directors’ fees. At December 31, 2014, 2013 and 2012, $37 thousand, $49 thousand and $62 thousand, respectively, of deferred directors’ fees relating to retired directors were included in other liabilities. |
INCOME_LOSS_PER_SHARE
INCOME (LOSS) PER SHARE | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Earnings Per Share [Abstract] | |||||||||||||
INCOME (LOSS) PER SHARE | NOTE 18 – INCOME (LOSS) PER SHARE | ||||||||||||
(Dollars in thousands, except per share amounts) | Years ended December 31, | ||||||||||||
2014 | 2013 | 2012 | |||||||||||
Basic income (loss) per common share: | |||||||||||||
Net income (loss) available to common shareholders | $ | (1,403 | ) | $ | 911 | $ | (10,396 | ) | |||||
Weighted average common shares outstanding - basic | 3,770,355 | 3,738,337 | 3,738,337 | ||||||||||
Basic income (loss) per common share | $ | (0.37 | ) | $ | 0.24 | $ | (2.78 | ) | |||||
Diluted income (loss) per common share: | |||||||||||||
Net income (loss) available to common shareholders | $ | (1,403 | ) | $ | 911 | $ | (10,396 | ) | |||||
Weighted average common shares outstanding - basic | 3,770,355 | 3,738,337 | 3,738,337 | ||||||||||
Incremental shares | — | — | — | ||||||||||
Average common shares outstanding - diluted | 3,770,355 | 3,738,337 | 3,738,337 | ||||||||||
Diluted income (loss) per common share | $ | (0.37 | ) | $ | 0.24 | $ | (2.78 | ) | |||||
For the years ended December 31, 2014, 2013 and 2012, there were 91,714 common stock equivalents outstanding associated with the CPP Warrant. These common stock equivalents were not included in the diluted income per share computation for 2013 because their exercise price exceeded the market value of the Company’s stock. For the years ended December 31, 2014 and 2012, the common stock equivalents were not included in the diluted loss per share computation because their effect would have been anti-dilutive. |
STOCK_COMPENSATION_PLAN
STOCK COMPENSATION PLAN | 12 Months Ended |
Dec. 31, 2014 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK COMPENSATION PLAN | NOTE 19 - STOCK COMPENSATION PLAN |
In 2004, upon shareholder approval, the Company adopted an Omnibus Stock Ownership and Long Term Incentive Plan (the “Stock Plan”). The Stock Plan authorizes the grant of options and awards of restricted stock to certain of our employees for up to 400,000 shares of the Company’s common stock from time to time during the term of the Stock Plan, subject to adjustments upon change in capitalization. The Stock Plan is administered by the Compensation Committee of the Board of Directors of the Company. | |
There were no stock options outstanding as of December 31, 2014, 2013 or 2012. | |
Restricted stock awards included in the Stock Plan vest after the first three consecutive periods during which the Bank’s return on average assets (“ROAA”) averages 1.15%. There were no awards outstanding as of December 31, 2014, 2013 or 2012. |
OTHER_EXPENSES
OTHER EXPENSES | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Other Income and Expenses [Abstract] | |||||||||||||
OTHER EXPENSES | NOTE 20 - OTHER EXPENSES | ||||||||||||
Other expenses are summarized as follows: | |||||||||||||
Years Ended December 31, | |||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||
Stationery, printing, and postage | $ | 275 | $ | 318 | $ | 337 | |||||||
Dues and subscriptions | 59 | 72 | 104 | ||||||||||
Telephone | 202 | 204 | 208 | ||||||||||
Director and officer insurance | 212 | 486 | 120 | ||||||||||
ATM services | 27 | 115 | 170 | ||||||||||
Appraisal fee expense | 123 | 140 | 97 | ||||||||||
Accountant fees | 277 | 84 | 180 | ||||||||||
Legal fees | 697 | 1,875 | 991 | ||||||||||
Consulting fees | 112 | 186 | 511 | ||||||||||
Courier services | 51 | 58 | 74 | ||||||||||
Other | 880 | 774 | 1,107 | ||||||||||
Total | $ | 2,915 | $ | 4,312 | $ | 3,899 |
INCOME_TAXES
INCOME TAXES | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||
INCOME TAXES | NOTE 21 - INCOME TAXES | ||||||||||||
Income tax expense is summarized as follows: | |||||||||||||
Years Ended December 31, | |||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||
Currently payable: | |||||||||||||
Federal | $ | — | $ | — | $ | — | |||||||
State | 78 | — | — | ||||||||||
Total current | 78 | — | — | ||||||||||
Deferred income taxes | — | — | — | ||||||||||
Income tax expense | $ | 78 | $ | — | $ | — | |||||||
The components of the net deferred tax asset are as follows: | |||||||||||||
December 31, | |||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||
Deferred tax assets: | |||||||||||||
Allowance for loan losses | $ | 1,968 | $ | 3,211 | $ | 4,811 | |||||||
Net unrealized losses on securities available-for-sale | 313 | 2,321 | — | ||||||||||
Net capitalized loan costs | 23 | 25 | 33 | ||||||||||
Net operating loss | 19,572 | 16,751 | 14,412 | ||||||||||
Deferred compensation | 13 | 17 | 21 | ||||||||||
Nonaccruing interest | 232 | 241 | 908 | ||||||||||
Tax credits | 259 | 276 | 307 | ||||||||||
Other real estate owned | 655 | 638 | 1,238 | ||||||||||
Loss on equity securities | 1 | 43 | 43 | ||||||||||
Other | 8 | 5 | 3 | ||||||||||
Total deferred tax assets | 23,044 | 23,528 | 21,776 | ||||||||||
Valuation Allowance | (21,971 | ) | (22,361 | ) | (20,451 | ) | |||||||
Total net deferred tax assets | 1,073 | 1,167 | 1,325 | ||||||||||
Deferred tax liabilities: | |||||||||||||
Accumulated depreciation | (965 | ) | (1,046 | ) | (1,120 | ) | |||||||
Gain on sale of real estate | — | (73 | ) | (73 | ) | ||||||||
Prepaid expenses | (108 | ) | (48 | ) | (69 | ) | |||||||
Net unrealized gains on securities available-for-sale | — | — | (63 | ) | |||||||||
Total deferred tax liabilities | (1,073 | ) | (1,167 | ) | (1,325 | ) | |||||||
Net deferred tax asset | $ | — | $ | — | $ | — | |||||||
Deferred tax assets represent the future tax benefit of deductible items. The Company, under the current Internal Revenue Code, is allowed up to a two year carryback and a twenty year carryforward of these timing items. A valuation allowance is established if it is more likely than not that the tax asset will not be realized. The valuation allowance reduces the recorded deferred tax assets to the net realizable value. As of December 31, 2014, 2013 and 2012, management had established a full valuation allowance of $22.0 million, $22.4 million and $20.5 million, respectively, to reflect the portion of the deferred income tax asset that was not able to be offset against net operating loss carrybacks and reversals of net future taxable temporary differences. When the Company generates future taxable income, it will be able to reevaluate the amount of the valuation allowance. | |||||||||||||
The Company has federal net operating loss carryforwards of $56.8 million, $48.6 million and $41.8 million for income tax purposes as of December 31, 2014, 2013 and 2012, respectively. These net operating losses will begin to expire in the year 2030. The Company has South Carolina net operating loss carryforwards of $7.9 million, $6.5 million and $6.2 million for income tax purposes as of December 31, 2014, 2013 and 2012, respectively. These net operating losses will begin to expire in the year 2019. | |||||||||||||
The Company has analyzed the tax position taken or expected to be taken on its tax returns and concluded it has no liability related to uncertain tax positions. Tax returns for 2011 and subsequent years are subject to examination by taxing authorities. | |||||||||||||
A reconciliation between the income tax expense (benefit) and the amount computed by applying the Federal statutory rates of 34% to income before income taxes follows: | |||||||||||||
Years ended December 31, | |||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||
Tax benefit at statutory rate | $ | (73 | ) | $ | 599 | $ | (3,239 | ) | |||||
State income tax, net of federal income tax benefit | 52 | — | (54 | ) | |||||||||
Tax-exempt interest income | (5 | ) | (16 | ) | (40 | ) | |||||||
Bank owned life insurance | (113 | ) | — | — | |||||||||
Life insurance proceeds | (315 | ) | — | — | |||||||||
Valuation allowance | 542 | (473 | ) | 3,454 | |||||||||
Other | (10 | ) | (110 | ) | (121 | ) | |||||||
Income tax expense (benefit) | $ | 78 | $ | — | $ | — |
UNUSED_LINES_OF_CREDIT
UNUSED LINES OF CREDIT | 12 Months Ended |
Dec. 31, 2014 | |
Line of Credit Facility [Abstract] | |
UNUSED LINES OF CREDIT | NOTE 22 - UNUSED LINES OF CREDIT |
As of December 31, 2014, the Company had no available lines of credit, however the Company may utilize its unpledged securities, if liquidity needs should arise. At December 31, 2014, investment securities with a book value of $64.8 million and a market value of $64.4 million were not pledged. |
FAIR_VALUE
FAIR VALUE | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||
FAIR VALUE | NOTE 23 - FAIR VALUE | ||||||||||||||||||||
Fair Value Hierarchy | |||||||||||||||||||||
Fair value is the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. | |||||||||||||||||||||
Fair value estimates are made at a specific point in time based on relevant market and other information about the financial instruments. Because no market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on current economic conditions, risk characteristics of various financial instruments, and such other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates. | |||||||||||||||||||||
Accounting principles establish a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value: | |||||||||||||||||||||
Level 1 | Quoted prices in active markets for identical assets or liabilities. Level 1 assets and liabilities include debt and equity securities and derivative contracts that are traded in an active exchange market, as well as U.S. Treasuries and money market funds. | ||||||||||||||||||||
Level 2 | Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 2 assets and liabilities include debt securities with quoted prices that are traded less frequently than exchange-traded instruments, mortgage-backed securities, municipal bonds, corporate debt securities, and derivative contracts whose value is determined using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data. This category generally includes certain derivative contracts and impaired loans. | ||||||||||||||||||||
Level 3 | Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. For example, this category generally includes certain private equity investments, retained residual interests in securitizations, residential mortgage servicing rights, and highly-structured or long-term derivative contracts. | ||||||||||||||||||||
Financial Instruments | |||||||||||||||||||||
The following methods and assumptions were used to estimate the fair value of significant financial instruments: | |||||||||||||||||||||
Cash and Cash Equivalents - The carrying amount is a reasonable estimate of fair value. | |||||||||||||||||||||
Securities Available-for-Sale - Investment securities available-for-sale are recorded at fair value on a recurring basis. Fair value measurement is based upon quoted prices, if available. If quoted prices are not available, fair values are measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for the security’s credit rating, prepayment assumptions and other factors such as credit loss assumptions. | |||||||||||||||||||||
Nonmarketable Equity Securities - The carrying amount is a reasonable estimate of fair value since no ready market exists for these securities. | |||||||||||||||||||||
Loans Receivable - For certain categories of loans, such as variable rate loans which are repriced frequently and have no significant change in credit risk, fair values are based on the carrying amounts. The fair value of other types of loans is estimated by discounting the future cash flows using the current rates at which similar loans would be made to the borrowers with similar credit ratings and for the same remaining maturities. | |||||||||||||||||||||
Deposits - The fair value of demand deposits, savings, and money market accounts is the amount payable on demand at the reporting date. The fair values of certificates of deposit are estimated using a discounted cash flow calculation that applies current interest rates to a schedule of aggregated expected maturities. | |||||||||||||||||||||
Repurchase Agreements – The carrying value of these instruments is a reasonable estimate of fair value. | |||||||||||||||||||||
Advances from the Federal Home Loan Bank - For the portion of borrowings immediately callable, fair value is based on the carrying amount. The fair value of the portion maturing at a later date is estimated using a discounted cash flow calculation that applies the interest rate of the immediately callable portion to the portion maturing at the future date. | |||||||||||||||||||||
Subordinated Debentures – The Company is unable to determine the fair value of these debentures. | |||||||||||||||||||||
Junior Subordinated Debentures – The Company is unable to determine the fair value of these debentures. | |||||||||||||||||||||
Off-Balance Sheet Financial Instruments - The contractual amount is a reasonable estimate of fair value for the instruments because commitments to extend credit and standby letters of credit are issued on a short-term or floating rate basis and include no unusual credit risks. | |||||||||||||||||||||
The carrying values and estimated fair values of the Company’s financial instruments were as follows: | |||||||||||||||||||||
31-Dec-14 | Fair Value Measurements | ||||||||||||||||||||
(Dollars in thousands) | Carrying | Estimated | Quoted | Significant | Significant | ||||||||||||||||
Amount | Fair Value | market | other | unobservable | |||||||||||||||||
price in | observable | inputs | |||||||||||||||||||
active markets | inputs | (Level 3) | |||||||||||||||||||
(Level 1) | (Level 2) | ||||||||||||||||||||
Financial Assets: | |||||||||||||||||||||
Cash and cash equivalents | $ | 28,527 | $ | 28,527 | $ | 28,527 | $ | — | $ | — | |||||||||||
Securities available-for-sale | 106,674 | 106,674 | — | 106,674 | — | ||||||||||||||||
Nonmarketable equity securities | 1,342 | 1,342 | — | — | 1,342 | ||||||||||||||||
Loans, net | 229,756 | 230,038 | — | — | 230,038 | ||||||||||||||||
Financial Liabilities: | |||||||||||||||||||||
Demand deposit, interest-bearing transaction, and savings accounts | 170,538 | 170,538 | 170,538 | — | — | ||||||||||||||||
Certificates of deposit | 220,799 | 222,789 | — | 222,789 | — | ||||||||||||||||
Repurchase agreements | 1,612 | 1,612 | — | 1,612 | — | ||||||||||||||||
Advances from the Federal Home Loan Bank | 17,000 | 17,136 | — | 17,136 | — | ||||||||||||||||
Subordinated debentures | 11,062 | * | — | — | — | ||||||||||||||||
Junior subordinated debentures | 6,186 | * | — | — | — | ||||||||||||||||
Notional | Estimated | ||||||||||||||||||||
Amount | Fair Value | ||||||||||||||||||||
Off-Balance Sheet Financial Instruments: | |||||||||||||||||||||
Commitments to extend credit | $ | 27,017 | n/a | ||||||||||||||||||
Standby letters of credit | 247 | n/a | |||||||||||||||||||
* The Company is unable to determine this value. | |||||||||||||||||||||
31-Dec-13 | |||||||||||||||||||||
Fair Value Measurements | |||||||||||||||||||||
(Dollars in thousands) | Carrying | Estimated | Quoted | Significant | Significant | ||||||||||||||||
Amount | Fair Value | market | other | unobservable | |||||||||||||||||
price in | observable | inputs | |||||||||||||||||||
active markets | inputs | (Level 3) | |||||||||||||||||||
(Level 1) | (Level 2) | ||||||||||||||||||||
Financial Assets: | |||||||||||||||||||||
Cash and cash equivalents | $ | 28,081 | $ | 28,081 | $ | 28,081 | $ | — | $ | — | |||||||||||
Securities available-for-sale | 94,602 | 94,602 | — | 94,602 | — | ||||||||||||||||
Nonmarketable equity securities | 1,743 | 1,743 | — | — | 1,743 | ||||||||||||||||
Loans, net | 246,981 | 248,633 | — | — | 248,633 | ||||||||||||||||
Financial Liabilities: | |||||||||||||||||||||
Demand deposit, interest-bearing transaction, and savings accounts | 163,505 | 163,505 | 163,505 | — | — | ||||||||||||||||
Certificates of deposit | 242,539 | 244,463 | — | 244,463 | — | ||||||||||||||||
Repurchase agreements | 1,337 | 1,337 | — | 1,337 | — | ||||||||||||||||
Advances from the Federal Home Loan Bank | 22,000 | 25,055 | — | 25,055 | — | ||||||||||||||||
Subordinated debentures | 11,062 | * | — | — | — | ||||||||||||||||
Junior subordinated debentures | 6,186 | * | — | — | — | ||||||||||||||||
Notional | Estimated | ||||||||||||||||||||
Amount | Fair Value | ||||||||||||||||||||
Off-Balance Sheet Financial Instruments: | |||||||||||||||||||||
Commitments to extend credit | $ | 29,836 | n/a | ||||||||||||||||||
Standby letters of credit | 361 | n/a | |||||||||||||||||||
* The Company is unable to determine this value. | |||||||||||||||||||||
31-Dec-12 | |||||||||||||||||||||
Fair Value Measurements | |||||||||||||||||||||
(Dollars in thousands) | Carrying | Estimated | Quoted | Significant | Significant | ||||||||||||||||
Amount | Fair Value | market | other | unobservable | |||||||||||||||||
price in | observable | inputs | |||||||||||||||||||
active markets | inputs | (Level 3) | |||||||||||||||||||
(Level 1) | (Level 2) | ||||||||||||||||||||
Financial Assets: | |||||||||||||||||||||
Cash and cash equivalents | $ | 46,600 | $ | 46,600 | $ | 46,600 | $ | — | $ | — | |||||||||||
Securities available-for-sale | 77,320 | 77,320 | — | 77,320 | — | ||||||||||||||||
Nonmarketable equity securities | 1,983 | 1,983 | — | — | 1,983 | ||||||||||||||||
Loans, net | 288,084 | 290,230 | — | — | 290,230 | ||||||||||||||||
Financial Liabilities: | |||||||||||||||||||||
Demand deposit, interest-bearing transaction, and savings accounts | 168,832 | 168,832 | 168,832 | — | — | ||||||||||||||||
Certificates of deposit | 267,029 | 269,776 | — | 269,776 | — | ||||||||||||||||
Repurchase agreements | 1,303 | 1,303 | — | 1,303 | — | ||||||||||||||||
Advances from the Federal Home Loan Bank | 22,000 | 25,802 | — | 25,802 | — | ||||||||||||||||
Subordinated debentures | 12,062 | * | — | — | — | ||||||||||||||||
Junior subordinated debentures | 6,186 | * | — | — | — | ||||||||||||||||
Notional | Estimated | ||||||||||||||||||||
Amount | Fair Value | ||||||||||||||||||||
Off-Balance Sheet Financial Instruments: | |||||||||||||||||||||
Commitments to extend credit | $ | 29,473 | n/a | ||||||||||||||||||
Standby letters of credit | 490 | n/a | |||||||||||||||||||
* The Company is unable to determine this value. | |||||||||||||||||||||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||||||||||||||||||||
Following is a description of valuation methodologies used for assets and liabilities recorded at fair value. | |||||||||||||||||||||
Securities Available-for-Sale - Investment securities available-for-sale are recorded at fair value on a recurring basis. Fair value measurement is based upon quoted prices, if available. If quoted prices are not available, fair values are measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for the security’s credit rating, prepayment assumptions and other factors such as credit loss assumptions. Level 1 securities include those traded on an active exchange, such as the New York Stock Exchange, U.S. Treasury securities that are traded by dealers or brokers in active over-the-counter markets and money market funds. Level 2 securities include mortgage-backed securities issued by government sponsored entities, municipal bonds and corporate debt securities. Securities classified as Level 3 include asset-backed securities in less liquid markets. | |||||||||||||||||||||
Loans - The Company does not record loans at fair value on a recurring basis, however, from time to time, a loan is considered impaired and an allowance for loan loss is established. Loans for which it is probable that payment of interest and principal will not be made in accordance with the contractual terms of the loan are considered impaired. Once a loan is identified as individually impaired, management measures impairment. The fair value of impaired loans is estimated using one of several methods, including the collateral value, market value of similar debt and discounted cash flows. Those impaired loans not requiring a specific allowance represents loans for which the fair value of expected repayments or collateral exceed the recorded investment in such loans. Substantially all of the impaired loans were evaluated based upon the fair value of the collateral for the years presented. Impaired loans where an allowance is established based on the fair value of collateral require classification in the fair value hierarchy. The fair value of Impaired Loans is generally based on judgment and therefore classified as nonrecurring Level 3. | |||||||||||||||||||||
Other Real Estate Owned - Foreclosed real estate is adjusted to fair value upon transfer of the loans to foreclosed real estate. Real estate acquired in settlement of loans is recorded initially at estimated fair value of the property less estimated selling costs at the date of foreclosure. The initial recorded value may be subsequently reduced by additional allowances, which are charges to earnings if the estimated fair value of the property less estimated selling costs declines below the initial recorded value. Fair value is based upon independent market prices, appraised values of the collateral or management’s estimation of the value of the collateral. The fair value of foreclosed assets is generally based on judgment and therefore is classified as nonrecurring Level 3. | |||||||||||||||||||||
The tables below present the balances of assets and liabilities measured at fair value on a recurring basis by level within the fair value hierarchy. | |||||||||||||||||||||
Quoted prices in | Significant | ||||||||||||||||||||
active markets | Other | Significant | |||||||||||||||||||
for identical | Observable | Unobservable | |||||||||||||||||||
(Dollars in thousands) | assets | Inputs | Inputs | ||||||||||||||||||
Total | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||||||
31-Dec-14 | |||||||||||||||||||||
Assets: | |||||||||||||||||||||
Government sponsored enterprises | $ | 40,082 | $ | — | $ | 40,082 | $ | — | |||||||||||||
Mortgage-backed securities | 65,348 | — | 65,348 | — | |||||||||||||||||
Obligations of state and local governments | 1,244 | — | 1,244 | — | |||||||||||||||||
Total | $ | 106,674 | $ | — | $ | 106,674 | $ | — | |||||||||||||
31-Dec-13 | |||||||||||||||||||||
Assets: | |||||||||||||||||||||
Government sponsored enterprises | $ | 55,075 | $ | — | $ | 55,075 | $ | — | |||||||||||||
Mortgage-backed securities | 37,034 | — | 37,034 | — | |||||||||||||||||
Obligations of state and local governments | 2,493 | — | 2,493 | — | |||||||||||||||||
Total | $ | 94,602 | $ | — | $ | 94,602 | $ | — | |||||||||||||
31-Dec-12 | |||||||||||||||||||||
Assets: | |||||||||||||||||||||
Government sponsored enterprises | $ | 27,108 | $ | — | $ | 27,108 | $ | — | |||||||||||||
Mortgage-backed securities | 44,462 | — | 44,462 | — | |||||||||||||||||
Obligations of state and local governments | 5,750 | — | 5,750 | — | |||||||||||||||||
Total | $ | 77,320 | $ | — | $ | 77,320 | $ | — | |||||||||||||
The Company has no liabilities measured at fair value on a recurring basis. | |||||||||||||||||||||
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis | |||||||||||||||||||||
Certain assets and liabilities are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment). The following tables present the assets and liabilities carried on the balance sheet by caption and by level within the valuation hierarchy described above for which a nonrecurring change in fair value has been recorded. | |||||||||||||||||||||
Quoted prices in | Significant | ||||||||||||||||||||
active markets | Other | Significant | |||||||||||||||||||
(Dollars in thousands) | for identical | Observable | Unobservable | ||||||||||||||||||
assets | Inputs | Inputs | |||||||||||||||||||
Total | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||||||
31-Dec-14 | |||||||||||||||||||||
Assets: | |||||||||||||||||||||
Impaired loans, net of valuation allowance | $ | 39,476 | $ | — | $ | — | $ | 39,476 | |||||||||||||
Other real estate owned | 19,501 | — | — | 19,501 | |||||||||||||||||
Total | $ | 58,977 | $ | — | $ | — | $ | 58,977 | |||||||||||||
31-Dec-13 | |||||||||||||||||||||
Assets: | |||||||||||||||||||||
Impaired loans, net of valuation allowance | $ | 41,883 | $ | — | $ | — | $ | 41,883 | |||||||||||||
Other real estate owned | 24,972 | — | — | 24,972 | |||||||||||||||||
Total | $ | 66,855 | $ | — | $ | — | $ | 66,855 | |||||||||||||
31-Dec-12 | |||||||||||||||||||||
Assets: | |||||||||||||||||||||
Impaired loans, net of valuation allowance | $ | 56,000 | $ | — | $ | — | $ | 56,000 | |||||||||||||
Other real estate owned | 19,464 | — | — | 19,464 | |||||||||||||||||
Total | $ | 75,464 | $ | — | $ | — | $ | 75,464 | |||||||||||||
The Company has no liabilities measured at fair value on a nonrecurring basis. | |||||||||||||||||||||
Level 3 Valuation Methodologies | |||||||||||||||||||||
The fair value of impaired loans is estimated using one of several methods, including collateral value and discounted cash flows and, in rare cases, the market value of the note. Those impaired loans not requiring an allowance represent loans for which the net present value of the expected cash flows or fair value of the collateral less costs to sell exceed the recorded investments in such loans. A majority of the total impaired loans were evaluated based on the fair value of the collateral for the years presented. When the fair value of the collateral is based on an executed sales contract with an independent third party, the Company records the impaired loans as nonrecurring Level 1. If the collateral is based on another observable market price or a current appraised value, the Company records the impaired loans as nonrecurring Level 2. When an appraised value is not available or the Company determines the fair value of the collateral is further impaired below the appraised value and there is no observable market price, the Company records the impaired loan as nonrecurring Level 3. Impaired loans can be evaluated for impairment using the present value of expected future cash flows discounted at the loan’s effective interest rate. The measurement of impaired loans using future cash flows discounted at the loan’s effective interest rate rather than the market rate of interest is not a fair value measurement and is therefore excluded from fair value disclosure requirements. Impaired loans are reviewed and evaluated on at least a quarterly basis for additional impairment and adjusted accordingly. Foreclosed real estate is carried at fair value less estimated selling costs. Fair value is generally based upon current appraisals, comparable sales, and other estimates of value obtained principally from independent sources, adjusted for selling costs. When the fair value of the collateral is based on an observable market price or a current appraised value, the Company records the asset as nonrecurring Level 2. However, the Company also considers other factors or recent developments which could result in adjustments to the collateral value estimates indicated in the appraisals such as changes in absorption rates or market conditions from the time of valuation. In situations where management adjustments are significant to the fair value measurements in its entirety, such measurements are classified as Level 3 within the valuation hierarchy. | |||||||||||||||||||||
The following table presents quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at December 31, 2014. | |||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
December 31, | Valuation | Unobservable | Range | ||||||||||||||||||
2014 | Techniques | Inputs | (Weighted Avg) | ||||||||||||||||||
Impaired loans: | |||||||||||||||||||||
Commercial | $ | 3,493 | Appraised Value/ | Appraisals and/or sales | |||||||||||||||||
Discounted Cash | of comparable properties/ | 0.00%-75.06% | |||||||||||||||||||
Flows | Independent quotes | -14.41% | |||||||||||||||||||
Commercial real estate | 24,138 | Appraised Value/ | Appraisals and/or sales | ||||||||||||||||||
Discounted Cash | of comparable properties/ | 0.00%-84.15% | |||||||||||||||||||
Flows | Independent quotes | -14.77% | |||||||||||||||||||
Residential | 11,681 | Appraised Value/ | Appraisals and/or sales | ||||||||||||||||||
Discounted Cash | of comparable properties/ | 0.00%-92.12% | |||||||||||||||||||
Flows | Independent quotes | -49.91% | |||||||||||||||||||
Consumer | 164 | Appraised Value/ | Appraisals and/or sales | ||||||||||||||||||
Discounted Cash | of comparable properties/ | 0.00%-35.41% | |||||||||||||||||||
Flows | Independent quotes | -6.20% | |||||||||||||||||||
Other real estate owned | 19,501 | Appraised Value/ | Appraisals and/or sales | ||||||||||||||||||
Discounted Cash | of comparable properties/ | 0.00%-50.00% | |||||||||||||||||||
Flows | Independent quotes | -6.27% | |||||||||||||||||||
The following table presents quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at December 31, 2013. | |||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
December 31, | Valuation | Unobservable | Range | ||||||||||||||||||
2013 | Techniques | Inputs | (Weighted Avg) | ||||||||||||||||||
Impaired loans: | |||||||||||||||||||||
Commercial | $ | 3,728 | Appraised Value/ | Appraisals and/or sales | |||||||||||||||||
Discounted Cash | of comparable properties/ | 0.00%-76.50% | |||||||||||||||||||
Flows | Independent quotes | -3.36% | |||||||||||||||||||
Commercial real estate | 27,085 | Appraised Value/ | Appraisals and/or sales | ||||||||||||||||||
Discounted Cash | of comparable properties/ | 0.00%-88.29% | |||||||||||||||||||
Flows | Independent quotes | -16.51% | |||||||||||||||||||
Residential | 10,865 | Appraised Value/ | Appraisals and/or sales | ||||||||||||||||||
Discounted Cash | of comparable properties/ | 0.00%-90.23% | |||||||||||||||||||
Flows | Independent quotes | -23.60% | |||||||||||||||||||
Consumer | 205 | Appraised Value/ | Appraisals and/or sales | ||||||||||||||||||
Discounted Cash | of comparable properties/ | 0.00%-38.68% | |||||||||||||||||||
Flows | Independent quotes | -14.67% | |||||||||||||||||||
Other real estate owned | 24,972 | Appraised Value/ | Appraisals and/or sales | ||||||||||||||||||
Discounted Cash | of comparable properties/ | 0.00%-50.00% | |||||||||||||||||||
Flows | Independent quotes | -6.27% | |||||||||||||||||||
The following table presents quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at December 31, 2012. | |||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
December 31, | Valuation | Unobservable | Range | ||||||||||||||||||
2012 | Techniques | Inputs | (Weighted Avg) | ||||||||||||||||||
Impaired loans: | |||||||||||||||||||||
Commercial | $ | 4,124 | Appraised Value/ | Appraisals and/or sales | |||||||||||||||||
Discounted Cash | of comparable properties/ | 0.00%-100.00% | |||||||||||||||||||
Flows | Independent quotes | -13.12% | |||||||||||||||||||
Commercial real estate | 41,709 | Appraised Value/ | Appraisals and/or sales | ||||||||||||||||||
Discounted Cash | of comparable properties/ | 0.00%-73.91% | |||||||||||||||||||
Flows | Independent quotes | -19.22% | |||||||||||||||||||
Residential | 9,943 | Appraised Value/ | Appraisals and/or sales | ||||||||||||||||||
Discounted Cash | of comparable properties/ | 0.00%-89.26% | |||||||||||||||||||
Flows | Independent quotes | -20.80% | |||||||||||||||||||
Consumer | 224 | Appraised Value/ | Appraisals and/or sales | ||||||||||||||||||
Discounted Cash | of comparable properties/ | 0.00%-25.11% | |||||||||||||||||||
Flows | Independent quotes | -7.38% | |||||||||||||||||||
Other real estate owned | 19,464 | Appraised Value/ | Appraisals and/or sales | ||||||||||||||||||
Discounted Cash | of comparable properties/ | 0.00%-50.00% | |||||||||||||||||||
Flows | Independent quotes | -6.27% | |||||||||||||||||||
HCSB_FINANCIAL_CORPORATION_PAR
HCSB FINANCIAL CORPORATION (PARENT COMPANY ONLY) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |||||||||||||
HCSB FINANCIAL CORPORATION (PARENT COMPANY ONLY) | NOTE 24 - HCSB FINANCIAL CORPORATION (PARENT COMPANY ONLY) | ||||||||||||
Presented below are the condensed financial statements for HCSB Financial Corporation (Parent Company Only). | |||||||||||||
Condensed Balance Sheets | |||||||||||||
December 31, | |||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||
Assets | |||||||||||||
Cash | $ | 26 | $ | 59 | $ | 86 | |||||||
Investment in banking subsidiary | 10,066 | 3,516 | 7,890 | ||||||||||
Investment in trust | 186 | 186 | 186 | ||||||||||
Other assets | 123 | 136 | 149 | ||||||||||
Total assets | $ | 10,401 | $ | 3,897 | $ | 8,311 | |||||||
Liabilities and shareholders’ equity | |||||||||||||
Accrued interest payable-subordinated debentures | $ | 3,685 | $ | 2,553 | $ | 1,472 | |||||||
Accrued interest payable-junior subordinated debentures | 714 | 536 | 351 | ||||||||||
Subordinated debentures | 11,062 | 11,062 | 12,062 | ||||||||||
Junior subordinated debentures | 6,186 | 6,186 | 6,186 | ||||||||||
Other liabilities | 1 | 2 | 2 | ||||||||||
Total liabilities | 21,648 | 20,339 | 20,073 | ||||||||||
Shareholders’ deficit | (11,247 | ) | (16,442 | ) | (11,762 | ) | |||||||
Total liabilities and shareholder’s deficit | $ | 10,401 | $ | 3,897 | $ | 8,311 | |||||||
Condensed Statements of Operations | |||||||||||||
Years ended December 31, | |||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||
Income | |||||||||||||
Forgiveness of debt | $ | — | $ | 1,000 | $ | — | |||||||
Expenses | |||||||||||||
Interest expense on subordinated debentures | 1,132 | 1,081 | 1,213 | ||||||||||
Interest expense on junior subordinated debentures | 178 | 186 | 177 | ||||||||||
Other expenses | 104 | 39 | 237 | ||||||||||
1,414 | 1,306 | 1,627 | |||||||||||
Loss before income taxes, and equity in undistributed gains (losses) of banking subsidiary | (1,414 | ) | (306 | ) | (1,627 | ) | |||||||
Income tax expense | — | — | — | ||||||||||
Equity in undistributed gains (losses) of banking subsidiary | 1,123 | 2,069 | (7,900 | ) | |||||||||
Net income (loss) | $ | (291 | ) | $ | 1,763 | $ | (9,527 | ) | |||||
Condensed Statements of Cash Flows | |||||||||||||
Years ended December 31, | |||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||
Cash flows from operating activities: | |||||||||||||
Net income (loss) | $ | (291 | ) | $ | 1,763 | $ | (9,527 | ) | |||||
Adjustments to reconcile net income (loss) to net cash used by operating activities: | |||||||||||||
Forgiveness of debt | — | (1,000 | ) | — | |||||||||
Equity in undistributed (gains) losses of banking subsidiary | (1,123 | ) | (2,069 | ) | 7,900 | ||||||||
Decrease in other assets | 13 | 13 | 236 | ||||||||||
Increase in accrued interest payable | 1,310 | 1,266 | 1,386 | ||||||||||
Net cash used by operating activities | (91 | ) | (27 | ) | (5 | ) | |||||||
Cash flows from financing activities: | |||||||||||||
Sale of common stock | 58 | — | — | ||||||||||
Net cash provided by financing activities | 58 | — | — | ||||||||||
Net decrease in cash | (33 | ) | (27 | ) | (5 | ) | |||||||
Cash and cash equivalents, beginning of year | 59 | 86 | 91 | ||||||||||
Cash and cash equivalents, end of year | $ | 26 | $ | 59 | $ | 86 |
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2014 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 25 – SUBSEQUENT EVENTS |
Subsequent events are events or transactions that occur after the balance sheet date but before financial statements are issued. Recognized subsequent events are events or transactions that provide additional evidence about conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial statements. Nonrecognized subsequent events are events that provide evidence about conditions that did not exist at the date of the balance sheet but arose after that date. Management has reviewed events occurring through the date the financial statements were issued, and the following subsequent event occurred requiring accruals or disclosures that are not otherwise disclosed herein. | |
On March 24, 2015, the Bank entered into a definitive agreement with Sandhills Bank, North Myrtle Beach, South Carolina, to sell its Socastee, Windy Hill, and Carolina Forest branches with total deposits of approximately $45.5 million and approximately $8 million in loans. The deposit premium will be approximately 2.5% of deposits acquired. The transaction, which is subject to regulatory approval and other customary conditions, is expected to close in third quarter of 2015. |
ORGANIZATION_AND_SIGNIFICANT_A1
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation - The accompanying consolidated financial statements include the accounts of HCSB Financial Corporation which was incorporated on June 10, 1999 (the “Company”) to serve as a bank holding company for its wholly owned subsidiary, Horry County State Bank (the “Bank”). The Bank was incorporated on December 18, 1987, and opened for operations on January 4, 1988. The principal business activity of the Company is to provide commercial banking services in Horry County, South Carolina, and in Columbus and Brunswick Counties, North Carolina. The Bank is a state-chartered bank, and its deposits are insured by the Federal Deposit Insurance Corporation (the “FDIC”). HCSB Financial Trust I (the “Trust”) is a special purpose subsidiary organized for the sole purpose of issuing trust preferred securities. The operations of the Trust have not been consolidated in these financial statements. |
Management's Estimates | Management’s Estimates - In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the balance sheet date and income and expenses for the period. Actual results could differ significantly from those estimates. |
Material estimates that are particularly susceptible to significant change relate to the determination of the allowance for loan losses, including valuation allowances for impaired loans, and the carrying amount of real estate acquired in connection with foreclosures or in satisfaction of loans. Management must also make estimates in determining the estimated useful lives and methods for depreciating premises and equipment. | |
While management uses available information to recognize losses on loans and foreclosed real estate, future additions to the allowance may be necessary based on changes in local economic conditions. In addition, regulatory agencies, as an integral part of their examination process, periodically review the Company’s allowances for losses on loans and foreclosed real estate. Such agencies may require the Company to recognize additions to the allowances based on their judgments about information available to them at the time of their examination. Because of these factors, it is reasonably possible that the allowances for losses on loans and foreclosed real estate may change materially in the near term. | |
Investment Securities | Investment Securities - Investment securities available-for-sale owned by the Company are carried at amortized cost and adjusted to their estimated fair value for reporting purposes. The unrealized gain or loss is recorded in shareholders’ equity net of any deferred tax effects. Management does not actively trade securities classified as available-for-sale, but intends to hold these securities for an indefinite period of time and may sell them prior to maturity to achieve certain objectives. Reductions in fair value considered by management to be other than temporary are reported as a realized loss and a reduction in the cost basis in the security. The adjusted cost basis of securities available-for-sale is determined by specific identification and is used in computing the realized gain or loss from a sales transaction. |
Nonmarketable Equity Securities | Nonmarketable Equity Securities - Nonmarketable equity securities include the Company’s investments in the stock of the Federal Home Loan Bank (the “FHLB”). The stocks are carried at cost because they have no quoted market value and no ready market exists. Investment in Federal Home Loan Bank stock is a condition of borrowing from the Federal Home Loan Bank, and the stock is pledged to collateralize the borrowings. Dividends received on Federal Home Loan Bank stock are included as a separate component in interest income. |
At December 31, 2014, 2013 and 2012, the investment in FHLB stock was $1.2 million, $1.6 million and $1.8 million, respectively. The Company also had an investment in the holding company of a community bank originally purchased at $25 thousand. This investment was written down to zero in 2012. Also included in nonmarketable equities is investment in the Trust, which totaled $186 thousand at December 31, 2014, 2013 and 2012. | |
Loans Receivable | Loans Receivable - Loans receivable are stated at their unpaid principal balance less any charge-offs. Interest income on loans is computed based upon the unpaid principal balance. Interest income is recorded in the period earned. |
The accrual of interest income is generally discontinued when a loan becomes contractually 90 days past due as to principal or interest. Management may elect to continue the accrual of interest when the estimated net realizable value of collateral exceeds the principal balance and accrued interest. | |
Loan origination and commitment fees and certain direct loan origination costs (principally salaries and employee benefits) are deferred and amortized to income over the contractual life of the related loans or commitments, adjusted for prepayments, using the straight-line method. | |
Loans are impaired when it is probable that a creditor will be unable to collect all amounts due according to the contractual terms of the loan agreement. All loans are subject to these criteria except for smaller balance homogeneous loans that are collectively evaluated for impairment and loans measured at fair value or at the lower of cost or fair value. The Company considers its consumer installment portfolio and home equity lines as such exceptions. Therefore, loans within the real estate and commercial loan portfolios are reviewed individually. | |
Impairment of a loan is measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate or the fair value of the collateral if the loan is collateral dependent. When management determines that a loan is impaired, the difference between the Company’s investment in the related loan and the present value of the expected future cash flows, or the fair value of the collateral, is charged off with a corresponding entry to the allowance for loan losses. The accrual of interest is discontinued on an impaired loan when management determines the borrower may be unable to meet payments as they become due. | |
Concentrations Of Credit Risk | Concentrations of Credit Risk - Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of loans receivable, investment securities, federal funds sold and amounts due from banks. |
The Company makes loans to individuals and small businesses for various personal and commercial purposes primarily throughout Horry County in South Carolina and Columbus and Brunswick counties of North Carolina. The Company’s loan portfolio is not concentrated in loans to any single borrower or a relatively small number of borrowers. Additionally, management is not aware of any concentrations of loans to classes of borrowers or industries that would be similarly affected by economic conditions except for loans secured by residential and commercial real estate and commercial and industrial non-real estate loans. These concentrations of residential and commercial real estate loans and commercial and industrial non-real estate loans totaled $198.4 million and $30.9 million, respectively, at December 31, 2014, representing 84.24% and 13.12%, respectively, of gross loans receivable for the Company at December 31, 2014. | |
In addition to monitoring potential concentrations of loans to particular borrowers or groups of borrowers, industries and geographic regions, management monitors exposure to credit risk from concentrations of lending products and practices such as loans that subject borrowers to substantial payment increases (e.g. principal deferral periods, loans with initial interest-only periods, etc.), and loans with high loan-to-value ratios. Management has determined that there is no concentration of credit risk associated with its lending policies or practices. Additionally, there are industry practices that could subject the Company to increased credit risk should economic conditions change over the course of a loan’s life. For example, the Company makes variable rate loans and fixed rate principal-amortizing loans with maturities prior to the loan being fully paid (i.e. balloon payment loans). These loans are underwritten and monitored to manage the associated risks. Therefore, management believes that these particular practices do not subject the Company to unusual credit risk. | |
The Company’s investment portfolio consists principally of obligations of the United States, its agencies or its corporations and general obligation municipal securities. In the opinion of management, there is no concentration of credit risk in its investment portfolio. The Company places its deposits and correspondent accounts with and sells its federal funds to high quality institutions. Management believes credit risk associated with correspondent accounts is not significant. | |
Allowance For Loan Losses | Allowance for Loan Losses - The allowance for loan losses is established as losses are estimated to have occurred through a provision for loan losses charged to earnings. Loan losses are charged against the allowance when management believes the uncollectability of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. The allowance for loan losses is evaluated on a regular basis by management and is based upon management’s periodic review of the collectability of the loans in light of historical experiences, the nature and volume of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available. Management’s judgments about the adequacy of the allowance are based on numerous assumptions about current events, which management believes to be reasonable, but which may or may not prove to be accurate. Thus, there can be no assurance that loan losses in future periods will not exceed the current allowance amount or that future increases in the allowance will not be required. No assurance can be given that management’s ongoing evaluation of the loan portfolio in light of changing economic conditions and other relevant circumstances will not require significant future additions to the allowance, thus adversely affecting the operating results of the Company. |
The allowance is subject to examination by regulatory agencies, which may consider such factors as the methodology used to determine adequacy and the size of the allowance relative to that of peer institutions, and other adequacy tests. In addition, such regulatory agencies could require the Company to adjust its allowance based on information available to them at the time of their examination. | |
The methodology used to determine the reserve for unfunded lending commitments, which is included in other liabilities, is inherently similar to that used to determine the allowance for loan losses adjusted for factors specific to binding commitments, including the probability of funding and historical loss ratio. | |
Premises, Furniture And Equipment | Premises, Furniture and Equipment - Premises, furniture and equipment are stated at cost less accumulated depreciation. The provision for depreciation is computed by the straight-line method. Rates of depreciation are generally based on the following estimated useful lives: buildings - 40 years; furniture and equipment - 3 to 25 years. The cost of assets sold or otherwise disposed of and the related accumulated depreciation is eliminated from the accounts, and the resulting gains or losses are reflected in the income statement. |
Maintenance and repairs are charged to current expense as incurred, and the costs of major renewals and improvements are capitalized. | |
Other Real Estate Owned | Other Real Estate Owned - Other real estate owned includes real estate acquired through foreclosure. Other real estate owned is initially recorded at appraised value, less estimated costs to sell. |
Any write-downs at the dates of acquisition are charged to the allowance for loan losses. Expenses to maintain such assets, subsequent write-downs, and gains and losses on disposal are included in net cost of operations of other real estate. | |
Income And Expense Recognition | Income and Expense Recognition - The accrual method of accounting is used for all significant categories of income and expense. Immaterial amounts of insurance commissions and other miscellaneous fees are reported when received. |
Income Taxes | Income Taxes – The Company files consolidated federal and state income tax returns. Federal income tax expense or benefit has been allocated to subsidiaries on a separate return basis. The Company accounts for income taxes based on two components of income tax expense: current and deferred. Current income tax expense approximates taxes to be paid or refunded for the current period and includes income tax expense related to uncertain tax positions, if any. |
Deferred income taxes are determined using the balance sheet method. Under this method, the net deferred tax asset or liability is based on the tax impacts of the differences between the book and tax bases of assets and liabilities and recognizes enacted changes in tax rates and laws in the period in which they occur. Deferred income tax expense results from changes in deferred tax assets and liabilities between periods. Deferred tax assets are recognized subject to the Company’s judgment that realization is more likely than not. A tax position that meets the more likely than not recognition threshold is measured to determine the amount of benefit to recognize. The tax position is measured at the largest amount of benefit that is greater than 50% likely of being realized upon settlement. Interest and penalties, if any, are recognized as a component of income tax expense. | |
The Company reviews the deferred tax assets for recoverability based on history of earnings, expectations for future earnings and expected timing of reversals of temporary differences. Realization of a deferred tax asset ultimately depends on the existence of sufficient taxable income available under tax law, including future reversals of existing temporary differences, future taxable income exclusive of reversing differences, taxable income in prior carryback years, projections of future operating results, cumulative tax losses over the past three years, tax loss deductibility limitations, and available tax planning strategies. If, based on available information, it is more likely than not that the deferred income tax asset will not be realized, a valuation allowance against the deferred tax asset must be established with a corresponding charge to income tax expense. The deferred tax assets and valuation allowance are evaluated each quarter, and a portion of the valuation allowance may be reversed in future periods. The determination of how much of the valuation allowance that may be reversed and the timing is based on future results of operation and the amount and timing of actual loan charge-offs and asset write-downs. At December 31, 2014, 2013 and 2012, the Company’s deferred tax asset was offset in its entirety by a valuation allowance. | |
The Company believes that its income tax filing positions taken or expected to be taken in its tax returns will more likely than not be sustained upon audit by the taxing authorities and does not anticipate any adjustments that will result in a material adverse impact on the Company’s financial condition, results of operations, or cash flow. Therefore no reserves for uncertain income tax positions have been recorded. | |
Advertising Expense | Advertising Expense - Advertising and public relations costs are generally expensed as incurred. External costs incurred in producing media advertising are expensed the first time the advertising takes place. External costs relating to direct mailing costs are expensed in the period in which the direct mailings are sent. Advertising and public relations costs of $16 thousand, $19 thousand and $22 thousand were included in the Company’s results of operations in marketing and advertising expense for 2014, 2013 and 2012, respectively. |
Net Income (Loss) Per Common Share | Net Income (Loss) Per Common Share - Basic income (loss) per common share is calculated by dividing net income (loss) by the weighted-average number of common shares outstanding during the year. Diluted net income per common share is computed based on net income divided by the weighted average number of common and potential common shares. The computation of diluted net loss per share does not include potential common shares as their effect would be anti-dilutive. The only potential common share equivalents are those related to the warrant issued to the U.S. Treasury under the Capital Purchase Program (the “CPP”). |
Comprehensive Income | Comprehensive Income - Accounting principles generally require recognized income, expenses, gains, and losses to be included in net income. Although certain changes in assets and liabilities, such as unrealized gains and losses on available-for-sale securities, are reported as a separate component of the equity section of the balance sheet, such items, along with net income, are components of comprehensive income and are also presented in a separate statement of comprehensive income. Accumulated other comprehensive income consists entirely of unrealized holding gains and losses on available for sale securities. |
Statements of Cash Flows | Statements of Cash Flows - For purposes of reporting cash flows, the Company considers certain highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. Cash equivalents include amounts due from banks, federal funds sold, and interest-bearing deposits with other banks. |
Off-Balance-Sheet Financial Instruments | Off-Balance Sheet Financial Instruments - In the ordinary course of business, the Company enters into off-balance sheet financial instruments consisting of commitments to extend credit and letters of credit. These financial instruments are recorded in the financial statements when they become payable by the customer. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements – The following is a summary of recent authoritative pronouncements. |
In January 2014, the Financial Accounting Standards Board (“FASB”) amended Receivables topic of the Accounting Standards Codification. The amendments are intended to resolve diversity in practice with respect to when a creditor should reclassify a collateralized consumer mortgage loan to other real estate owned (“OREO”). In addition, the amendments require a creditor reclassify a collateralized consumer mortgage loan to OREO upon obtaining legal title to the real estate collateral, or the borrower voluntarily conveying all interest in the real estate property to the lender to satisfy the loan through a deed in lieu of foreclosure or similar legal agreement. The amendments will be effective for the Company for annual periods, and interim periods within those annual period beginning after December 15, 2014, with early implementation of the guidance permitted. In implementing this guidance, assets that are reclassified from real estate to loans are measured at the carrying value of the real estate at the date of adoption. Assets reclassified from loans to real estate are measured at the lower of the net amount of the loan receivable or the fair value of the real estate less costs to sell at the date of adoption. The Company does not expect these amendments to have a material effect on its financial statements. | |
In May 2014, the FASB issued guidance to change the recognition of revenue from contracts with customers. The core principle of the new guidance is that an entity should recognize revenue to reflect the transfer of goods and services to customers in an amount equal to the consideration the entity receives or expects to receive. The guidance will be effective for the Company for reporting periods beginning after December 15, 2016. The Company does not expect these amendments to have a material effect on its financial statements. | |
In June 2014, the FASB issued guidance which makes limited amendments to the guidance on accounting for certain repurchase agreements. The new guidance (1) requires entities to account for repurchase-to-maturity transactions as secured borrowings (rather than as sales with forward repurchase agreements), (2) eliminates accounting guidance on linked repurchase financing transactions, and (3) expands disclosure requirements related to certain transfers of financial assets that are accounted for as sales and certain transfers (specifically, repos, securities lending transactions, and repurchase-to-maturity transactions) accounted for as secured borrowings. The amendments will be effective for the Company for the first interim or annual period beginning after December 15, 2014. The Company will apply the guidance by making a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. The Company does not expect these amendments to have a material effect on its financial statements. | |
In August 2014, the FASB issued guidance that is intended to define management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures. In connection with preparing financial statements, management will need to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the organization’s ability to continue as a going concern within one year after the date that the financial statements are issued. The amendments will be effective for the Company for annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. The Company does not expect these amendments to have a material effect on its financial statements. | |
In January 2015, the FASB issued guidance that eliminated the concept of extraordinary items from U.S. GAAP. Existing U.S. GAAP required that an entity separately classify, present, and disclose extraordinary events and transactions. The amendments will eliminate the requirements for reporting entities to consider whether an underlying event or transaction is extraordinary, however, the presentation and disclosure guidance for items that are unusual in nature or occur infrequently will be retained and will be expanded to include items that are both unusual in nature and infrequently occurring. The amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. The amendments may be applied either prospectively or retrospectively to all prior periods presented in the financial statements. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. The Company does not expect these amendments to have a material effect on its financial statements. | |
Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies are not expected to have a material impact on the Company’s financial position, results of operations or cash flows. | |
Risks And Uncertainties | Risks and Uncertainties - In the normal course of its business, the Company encounters two significant types of risks: economic and regulatory. There are three main components of economic risk: interest rate risk, credit risk and market risk. The Company is subject to interest rate risk to the degree that its interest-bearing liabilities mature or reprice at different speeds, or on different basis, than its interest-earning assets. Credit risk is the risk of default on the Company’s loan portfolio that results from a borrower’s inability or unwillingness to make contractually required payments. Market risk reflects changes in the value of collateral underlying loans receivable and the valuation of real estate held by the Company. |
The Company is subject to the regulations of various governmental agencies. These regulations can and do change significantly from period to period. The Company also undergoes periodic examinations by the regulatory agencies, which may subject it to further changes with respect to asset valuations, amounts of required loss allowances and operating restrictions from the regulators’ judgments based on information available to them at the time of their examination. | |
Additionally, the Company is subject to certain regulations due to our participation in the CPP. Pursuant to the terms of the CPP Purchase Agreement between us and the Treasury, we adopted certain standards for executive compensation and corporate governance for the period during which the Treasury holds the equity issued pursuant to the CPP Purchase Agreement, including the common stock which may be issued pursuant to the CPP Warrant. These standards generally apply to our named executive officers. The standards include (1) ensuring that incentive compensation for senior executives does not encourage unnecessary and excessive risks that threaten the value of the financial institution; (2) required clawback of any bonus or incentive compensation paid to a senior executive based on statements of earnings, gains or other criteria that are later proven to be materially inaccurate; (3) prohibition on making golden parachute payments to senior executives; (4) prohibition on providing tax gross-up provisions; and (5) agreement not to deduct for tax purposes executive compensation in excess of $500 thousand for each senior executive. In particular, the change to the deductibility limit on executive compensation will likely increase the overall cost of our compensation programs in future periods and may make it more difficult to attract suitable candidates to serve as executive officers. | |
In February 2005 the Bank purchased a $500 thousand 15-year renewable and convertible term life insurance policy through Banner Life Insurance Company on the life of James R. Clarkson, President and CEO. The Bank is both the owner and the beneficiary of this key person policy. The purpose of securing this policy was to provide the Bank with financial protection in the event of the unexpected death of Mr. Clarkson and better enable the Bank to attract a qualified replacement for Mr. Clarkson in such a situation. | |
Legislation that has been adopted after we closed on our sale of Series T Preferred Stock and Warrant to the Treasury for $12.9 million pursuant to the CPP on March 6, 2009, or any legislation or regulations that may be implemented in the future, may have a material impact on the terms of our CPP transaction with the Treasury. If we determine that any such legislation or any regulations, in whole or in part, alter the terms of our CPP transaction with the Treasury in ways that we believe are adverse to our ability to effectively manage our business, then it is possible that we may seek to unwind, in whole or in part, the CPP transaction by repurchasing some or all of the preferred stock and warrants that we sold to the Treasury pursuant to the CPP. If we were to repurchase all or a portion of such preferred stock or warrants, then our capital levels could be materially reduced. | |
Reclassifications | Reclassifications - Certain captions and amounts in the 2013 and 2012 financial statements were reclassified to conform to the 2014 presentation. |
REGULATORY_MATTERS_AND_FUTURE_1
REGULATORY MATTERS AND FUTURE OPERATIONS (Tables) | 12 Months Ended | |
Dec. 31, 2014 | ||
Regulatory Matters And Future Operations Tables | ||
Schedule Of Compliance With Consent Order | The Consent Order conveys specific actions needed to address the Bank’s current financial condition, primarily related to capital planning, liquidity/funds management, policy and planning issues, management oversight, loan concentrations and classifications, and non-performing loans. A summary of the requirements of the Consent Order and the Bank’s status on complying with the Consent Order is as follows: | |
Requirements of the Consent Order | Bank’s Compliance Status | |
Achieve and maintain, by July 10, 2011, Total Risk Based capital at least equal to 10% of risk-weighted assets and Tier 1 capital at least equal to 8% of total assets. | The Bank did not meet the capital ratios as specified in the Consent Order and, as a result, submitted a revised capital restoration plan to the FDIC on July 15, 2011. The revised capital restoration plan was determined by the FDIC to be insufficient and, as a result, we submitted a further revised capital restoration plan to the FDIC on September 30, 2011. We received the FDIC’s non-objection to the further revised capital restoration plan on December 6, 2011. | |
The Bank is working diligently to increase its capital ratios in order to strengthen its balance sheet and satisfy the commitments required under the Consent Order. The Bank has engaged independent third parties to assist the Bank in its efforts to increase its capital ratios. In addition to continuing to search for additional capital, the Bank is also searching for a potential merger partner. Although the Bank is pursuing both of these approaches simultaneously, given the lack of a market for bank mergers, particularly in the Southeast, as a result of the current economic and regulatory climate, and the lack of success the Company has had to date in attempting to raise capital, there can be no assurances the Company will either raise additional capital or find a merger partner. | ||
Submit, by April 11, 2011, a written capital plan to the supervisory authorities. | We believe we have complied with this provision of the Consent Order. | |
Establish, by March 12, 2011, a plan to monitor compliance with the Consent Order, which shall be monitored by the Bank’s Directors’ Committee. | We believe we have complied with this provision of the Consent Order. The Directors’ Committee meets monthly and each meeting includes reviews and discussions of all areas required in the Consent Order. | |
Develop, by May 11, 2011, a written analysis and assessment of the Bank’s management and staffing needs. | We believe we have complied with this provision of the Consent Order. In 2011, the Bank engaged an independent third party to perform an assessment of the Bank’s staffing needs to ensure the Bank has an appropriate organizational structure with qualified management in place. The Board of Directors has reviewed all recommendations regarding the Bank’s organizational structure. | |
Notify the supervisory authorities in writing of the resignation or termination of any of the Bank’s directors or senior executive officers. | We believe we have complied with this provision of the Consent Order. | |
Eliminate, by March 12, 2011, by charge-off or collection, all assets or portions of assets classified “Loss” and 50% of those assets classified “Doubtful.” | We believe we have complied with this provision of the Consent Order. | |
Review and update, by April 11, 2011, its policy to ensure the adequacy of the Bank’s allowance for loan and lease losses, which must provide for a review of the | We believe we have complied with this provision of the Consent Order. | |
Bank’s allowance for loan and lease losses at least once each calendar quarter. | ||
Submit, by April 11, 2011, a written plan to the supervisory authorities to reduce classified assets, which shall include, among other things, a reduction of the Bank’s risk exposure in relationships with assets in excess of $750,000 which are criticized as “Substandard” or “Doubtful”. In accordance with the approved plan, reduce assets classified in the June 30, 2010 Report of Examination by 65% by August 11, 2012 and by 75% by February 9, 2013. | We were not in compliance with this provision of the Consent Order on December 31, 2014. The written plan was submitted and approved; however, assets classified in the June 30, 2010 Report of Examination had only been reduced by 74.7% as of December 31, 2014. As of January 31, 2015, however, those assets had been reduced by 75.9%. | |
Revise, by April 11, 2011, its policies and procedures for managing the Bank’s Adversely Classified Other Real Estate Owned. | We believe we have complied with this provision of the Consent Order. | |
Not extend any additional credit to any borrower who has a loan or other extension of credit from the Bank that has been charged-off or classified, in whole or in part, “Loss” or “Doubtful” and is uncollected. In addition, the Bank may not extend any additional credit to any borrower who has a loan or other extension of credit from the Bank that has been criticized, in whole or in part, “Substandard” and is uncollected, unless the Bank’s board of directors determines that failure to extend further credit to a particular borrower would be detrimental to the best interests of the Bank. | We believe we have complied with this provision of the Consent Order. In the second quarter of 2010, the Bank engaged the services of an independent firm to perform an extensive review of the Bank’s credit portfolio and help management implement a more comprehensive lending and collection policy and more enhanced loan review. An independent review of the Bank’s credit portfolio was most recently completed in the second quarter of 2014. | |
Perform, by April 11, 2011, a risk segmentation analysis with respect to the Bank’s Concentrations of Credit and develop a written plan to systematically reduce any segment of the portfolio that is an undue concentration of credit. | We believe we have complied with this provision of the Consent Order. | |
Review, by April 11, 2011 and annually thereafter, the Bank’s loan policies and procedures for adequacy and, based upon this review, make all appropriate revisions to the policies and procedures necessary to enhance the Bank’s lending functions and ensure their implementation. | We believe we have complied with this provision of the Consent Order. As noted above, the Bank engaged the services of an independent firm to perform an extensive review of the Bank’s credit portfolio and help management implement a more comprehensive lending and collection policy and more enhanced loan review. | |
Adopt, by May 11, 2011, an effective internal loan review and grading system to provide for the periodic review of the Bank’s loan portfolio in order to identify and categorize the Bank’s loans, and other extensions of credit which are carried on the Bank’s books as loans, on the basis of credit quality. | We believe we have complied with this provision of the Consent Order. As noted above, the Bank engaged the services of an independent firm to perform an extensive review of the Bank’s credit portfolio and help management implement a more comprehensive lending and collection policy and more enhanced loan review. | |
Review and update, by May 11, 2011, its written profit plan to ensure the Bank has a realistic, comprehensive budget for all categories of income and expense, which must address, at minimum, goals and strategies for improving and sustaining the earnings of the Bank, the major areas in and means by which the Bank will seek to improve the Bank’s operating performance, realistic and comprehensive budgets, a budget review process to monitor income and expenses of the Bank to compare actual results with budgetary projections, assess that operating assumptions that form the basis for budget projections and adequately support major projected income and expense components of the plan, and coordination of the Bank’s loan, investment, and operating policies and budget and profit planning with the funds management policy. | We believe we have complied with this provision of the Consent Order. The Bank engaged an independent third party to assist management with a strategic plan to help restructure its balance sheet, increase capital ratios, return to profitability and maintain adequate liquidity. | |
Review and update, by May 11, 2011, its written plan addressing liquidity, contingent funding, and asset liability management. | We believe we have complied with this provision of the Consent Order. In 2011, the Bank engaged an independent third party to assist management in its development of a strategic plan that achieves all requirements of the Consent Order. The strategic plan reflects the Bank’s plans to restructure its balance sheet, increase capital ratios, return to profitability, and maintain adequate liquidity. The Board of Directors has reviewed and adopted the Bank’s strategic plan. | |
Eliminate, by March 12, 2011, all violations of law and regulation or contraventions of policy set forth in the FDIC’s safety and soundness examination of the Bank in November 2009. | We believe we have complied with this provision of the Consent Order. | |
Not accept, renew, or rollover any brokered deposits unless it is in compliance with the requirements of 12 C.F.R. § 337.6(b). | Since entering into the Consent Order, the Bank has not accepted, renewed, or rolled-over any brokered deposits. Therefore we believe we have complied with this provision of the Consent Order. | |
Limit asset growth to 5% per annum. | We believe we have complied with this provision of the Consent Order. | |
Not declare or pay any dividends or bonuses or make any distributions of interest, principal, or other sums on subordinated debentures without the prior approval of the supervisory authorities. | We believe we have complied with this provision of the Consent Order. | |
The Bank shall comply with the restrictions on the effective yields on deposits as described in 12 C.F.R. § 337.6. | We believe we have complied with this provision of the Consent Order. | |
Furnish, by March 12, 2011 and within 30 days of the end of each quarter thereafter, written progress reports to the supervisory authorities detailing the form and manner of any actions taken to secure compliance with the Consent Order. | We believe we have complied with this provision of the Consent Order, and we have submitted the required progress reports to the supervisory authorities. | |
Submit, by March 12, 2011, a written plan to the supervisory authorities for eliminating its reliance on brokered deposits. | We believe we have complied with this provision of the Consent Order. | |
Adopt, by April 11, 2011, an employee compensation plan after undertaking an independent review of compensation paid to all of the Bank’s senior executive officers. | We believe we have complied with this provision of the Consent Order. | |
Prepare and submit, by May 11, 2011, its written strategic plan to the supervisory authorities. | We believe we have complied with this provision of the Consent Order. In 2011, the Bank engaged an independent third party to assist management in its development of a strategic plan that achieves all requirements of the Consent Order. The Board of Directors has reviewed and adopted the Bank’s strategic plan. | |
INVESTMENT_SECURITIES_Tables
INVESTMENT SECURITIES (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||
Schedule Of Securities Available-For-Sale | Securities available-for-sale consisted of the following: | ||||||||||||||||||||||||
Amortized | Gross Unrealized | Estimated | |||||||||||||||||||||||
Cost | Gains | Losses | Fair Value | ||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||
31-Dec-14 | |||||||||||||||||||||||||
Government-sponsored enterprises | $ | 40,952 | $ | 7 | $ | (877 | ) | $ | 40,082 | ||||||||||||||||
Mortgage-backed securities | 65,328 | 447 | (427 | ) | 65,348 | ||||||||||||||||||||
Obligations of state and local governments | 1,239 | 10 | (5 | ) | 1,244 | ||||||||||||||||||||
Total | $ | 107,519 | $ | 464 | $ | (1,309 | ) | $ | 106,674 | ||||||||||||||||
31-Dec-13 | |||||||||||||||||||||||||
Government-sponsored enterprises | $ | 60,628 | $ | — | $ | (5,553 | ) | $ | 55,075 | ||||||||||||||||
Mortgage-backed securities | 37,731 | 167 | (864 | ) | 37,034 | ||||||||||||||||||||
Obligations of state and local governments | 2,516 | 113 | (136 | ) | 2,493 | ||||||||||||||||||||
Total | $ | 100,875 | $ | 280 | $ | (6,553 | ) | $ | 94,602 | ||||||||||||||||
31-Dec-12 | |||||||||||||||||||||||||
Government-sponsored enterprises | $ | 27,024 | $ | 111 | $ | (27 | ) | $ | 27,108 | ||||||||||||||||
Mortgage-backed securities | 44,557 | 391 | (486 | ) | 44,462 | ||||||||||||||||||||
Obligations of state and local governments | 5,569 | 193 | (12 | ) | 5,750 | ||||||||||||||||||||
Total | $ | 77,150 | $ | 695 | $ | (525 | ) | $ | 77,320 | ||||||||||||||||
Summary Of Maturities Of Securities Available-For-Sale | The following is a summary of maturities of securities available-for-sale as of December 31, 2014. The amortized cost and estimated fair values are based on the contractual maturity dates. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without penalty. | ||||||||||||||||||||||||
Securities | |||||||||||||||||||||||||
Available-For-Sale | |||||||||||||||||||||||||
Amortized | Estimated | ||||||||||||||||||||||||
(Dollars in thousands) | Cost | Fair Value | |||||||||||||||||||||||
Due after one year but within five years | $ | 1,492 | $ | 1,500 | |||||||||||||||||||||
Due after five years but within ten years | 16,364 | 16,308 | |||||||||||||||||||||||
Due after ten years | 89,663 | 88,866 | |||||||||||||||||||||||
Total | $ | 107,519 | $ | 106,674 | |||||||||||||||||||||
Schedule Of Gross Unrealized Losses And Fair Value Of Securities Available-For-Sale | The following table shows gross unrealized losses and fair value, aggregated by investment category, and length of time that individual securities have been in a continuous unrealized loss position, at: | ||||||||||||||||||||||||
31-Dec-14 | Less than twelve months | Twelve months or more | Total | ||||||||||||||||||||||
Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | ||||||||||||||||||||
(Dollars in thousands) | Value | Losses | Value | Losses | Value | Losses | |||||||||||||||||||
Government-sponsored enterprises | $ | — | $ | — | $ | 38,076 | $ | (877 | ) | $ | 38,076 | $ | (877 | ) | |||||||||||
Mortgage-backed securities | 22,024 | (244 | ) | 7,458 | (183 | ) | 29,482 | (427 | ) | ||||||||||||||||
Obligations of state and local governments | — | — | 623 | (5 | ) | 623 | (5 | ) | |||||||||||||||||
Total | $ | 22,024 | $ | (244 | ) | $ | 46,157 | $ | (1,065 | ) | $ | 68,181 | $ | (1,309 | ) | ||||||||||
31-Dec-13 | Less than twelve months | Twelve months or more | Total | ||||||||||||||||||||||
Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | ||||||||||||||||||||
(Dollars in thousands) | Value | Losses | Value | Losses | Value | Losses | |||||||||||||||||||
Government-sponsored enterprises | $ | 47,311 | $ | (4,433 | ) | $ | 7,764 | $ | (1,120 | ) | $ | 55,075 | $ | (5,553 | ) | ||||||||||
Mortgage-backed securities | 17,826 | (471 | ) | 7,373 | (393 | ) | 25,199 | (864 | ) | ||||||||||||||||
Obligations of state and local governments | 552 | (67 | ) | 568 | (69 | ) | 1,120 | (136 | ) | ||||||||||||||||
Total | $ | 65,689 | $ | (4,971 | ) | $ | 15,705 | $ | (1,582 | ) | $ | 81,394 | $ | (6,553 | ) | ||||||||||
31-Dec-12 | Less than twelve months | Twelve months or more | Total | ||||||||||||||||||||||
Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | ||||||||||||||||||||
(Dollars in thousands) | Value | Losses | Value | Losses | Value | Losses | |||||||||||||||||||
Government-sponsored enterprises | $ | 6,003 | (27 | ) | $ | — | $ | — | $ | 6,003 | $ | (27 | ) | ||||||||||||
Mortgage-backed securities | 9,881 | (380 | ) | 5,299 | (106 | ) | 15,180 | (486 | ) | ||||||||||||||||
Obligations of state and local governments | 635 | (12 | ) | — | — | 635 | (12 | ) | |||||||||||||||||
Total | $ | 16,519 | (419 | ) | $ | 5,299 | $ | (106 | ) | $ | 21,818 | $ | (525 | ) | |||||||||||
Schedule Of Gross Realized Gains And Losses On Sales Of Available-For-Sale Secutities | Gross realized gains and losses on sales of available for sale securities for the years ended were as follows: | ||||||||||||||||||||||||
Years ended | |||||||||||||||||||||||||
(Dollars in thousands) | December 31, | ||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
Gross realized gains | $ | 269 | $ | 298 | 1,643 | ||||||||||||||||||||
Gross realized losses | (68 | ) | — | — | |||||||||||||||||||||
Net gain | $ | 201 | $ | 298 | $ | 1,643 |
LOAN_PORTFOLIO_Tables
LOAN PORTFOLIO (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||
Loans and Leases Receivable Disclosure [Abstract] | |||||||||||||||||||||||||||||
Components Of Loan Portfolio By Category | Loans consisted of the following: | ||||||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||||||||||||||||||
Residential | $ | 84,568 | $ | 84,335 | $ | 91,606 | |||||||||||||||||||||||
Commercial Real Estate | 113,852 | 130,450 | 161,335 | ||||||||||||||||||||||||||
Commercial | 30,894 | 33,711 | 41,200 | ||||||||||||||||||||||||||
Consumer | 6,229 | 7,928 | 8,093 | ||||||||||||||||||||||||||
Total gross loans | $ | 235,543 | $ | 256,424 | $ | 302,234 | |||||||||||||||||||||||
Schedule of Related Party Loans | Certain parties (principally certain directors and officers of the Company, their immediate families, and business interests) were loan customers and had other transactions in the normal course of business with the Company. Related party loans are made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with persons not related to the lender and do not involve more than normal risk of collectibility. Related party loans consisted of the following: | ||||||||||||||||||||||||||||
For the Year ended December 31, | |||||||||||||||||||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||||||||||||||||||
Beginning balance | $ | 3,088 | $ | 2,867 | $ | 4,325 | |||||||||||||||||||||||
New loans and advances | 1,785 | 1,195 | 1,645 | ||||||||||||||||||||||||||
Repayments | (1,016 | ) | (974 | ) | (3,103 | ) | |||||||||||||||||||||||
Ending balance | $ | 3,857 | $ | 3,088 | $ | 2,867 | |||||||||||||||||||||||
Schedule Of Allowance For Loan Losses | The following tables detail the activity within our allowance for loan losses as of and for the years ended December 31, 2014, 2013 and 2012, by portfolio segment: | ||||||||||||||||||||||||||||
31-Dec-14 | |||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||
Commercial | |||||||||||||||||||||||||||||
Commercial | Real Estate | Consumer | Residential | Total | |||||||||||||||||||||||||
Allowance for loan losses: | |||||||||||||||||||||||||||||
Beginning balance | $ | 1,020 | $ | 5,312 | $ | 144 | $ | 2,967 | $ | 9,443 | |||||||||||||||||||
Charge-offs | (1,068 | ) | (4,646 | ) | (343 | ) | (974 | ) | (7,031 | ) | |||||||||||||||||||
Recoveries | 549 | 1,117 | 38 | 610 | 2,314 | ||||||||||||||||||||||||
Provision | 96 | 1,808 | 346 | (1,189 | ) | 1,061 | |||||||||||||||||||||||
Ending balance | $ | 597 | $ | 3,591 | $ | 185 | $ | 1,414 | $ | 5,787 | |||||||||||||||||||
Ending balances: | |||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 151 | $ | 1,008 | $ | 11 | $ | 737 | $ | 1,907 | |||||||||||||||||||
Collectively evaluated for impairment | $ | 446 | $ | 2,583 | $ | 174 | $ | 677 | $ | 3,880 | |||||||||||||||||||
Loans receivable: | |||||||||||||||||||||||||||||
Ending balance, total | $ | 30,894 | $ | 113,852 | $ | 6,229 | $ | 84,568 | $ | 235,543 | |||||||||||||||||||
Ending balances: | |||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 3,644 | $ | 25,146 | $ | 175 | $ | 12,418 | $ | 41,383 | |||||||||||||||||||
Collectively evaluated for impairment | $ | 27,250 | $ | 88,706 | $ | 6,054 | $ | 72,150 | $ | 194,160 | |||||||||||||||||||
31-Dec-13 | |||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||
Commercial | |||||||||||||||||||||||||||||
Commercial | Real Estate | Consumer | Residential | Total | |||||||||||||||||||||||||
Allowance for loan losses: | |||||||||||||||||||||||||||||
Beginning balance | $ | 1,982 | $ | 7,587 | $ | 124 | $ | 4,457 | $ | 14,150 | |||||||||||||||||||
Charge-offs | (1,691 | ) | (3,927 | ) | (217 | ) | (1,641 | ) | (7,476 | ) | |||||||||||||||||||
Recoveries | 724 | 2,230 | 48 | 1,264 | 4,266 | ||||||||||||||||||||||||
Provision | 5 | (578 | ) | 189 | (1,113 | ) | (1,497 | ) | |||||||||||||||||||||
Ending balance | $ | 1,020 | $ | 5,312 | $ | 144 | $ | 2,967 | $ | 9,443 | |||||||||||||||||||
Ending balances: | |||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 218 | $ | 2,455 | $ | 18 | $ | 1,105 | $ | 3,796 | |||||||||||||||||||
Collectively evaluated for impairment | $ | 802 | $ | 2,857 | $ | 126 | $ | 1,862 | $ | 5,647 | |||||||||||||||||||
Loans receivable: | |||||||||||||||||||||||||||||
Ending balance, total | $ | 33,711 | $ | 130,450 | $ | 7,928 | $ | 84,335 | $ | 256,424 | |||||||||||||||||||
Ending balances: | |||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 3,946 | $ | 29,540 | $ | 223 | $ | 11,970 | $ | 45,679 | |||||||||||||||||||
Collectively evaluated for impairment | $ | 29,765 | $ | 100,910 | $ | 7,705 | $ | 72,365 | $ | 210,745 | |||||||||||||||||||
31-Dec-12 | |||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||
Commercial | |||||||||||||||||||||||||||||
Commercial | Real Estate | Consumer | Residential | Total | |||||||||||||||||||||||||
Allowance for loan losses: | |||||||||||||||||||||||||||||
Beginning balance | $ | 3,239 | $ | 10,240 | $ | 103 | $ | 7,596 | $ | 21,178 | |||||||||||||||||||
Charge-offs | (3,242 | ) | (10,045 | ) | (106 | ) | (5,148 | ) | (18,541 | ) | |||||||||||||||||||
Recoveries | 284 | 331 | 12 | 356 | 983 | ||||||||||||||||||||||||
Provision | 1,701 | 7,061 | 115 | 1,653 | 10,530 | ||||||||||||||||||||||||
Ending balance | $ | 1,982 | $ | 7,587 | $ | 124 | $ | 4,457 | $ | 14,150 | |||||||||||||||||||
Ending balances: | |||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 833 | $ | 3,499 | $ | 15 | $ | 1,236 | $ | 5,583 | |||||||||||||||||||
Collectively evaluated for impairment | $ | 1,149 | $ | 4,088 | $ | 109 | $ | 3,221 | $ | 8,567 | |||||||||||||||||||
Loans receivable: | |||||||||||||||||||||||||||||
Ending balance, total | $ | 41,200 | $ | 161,335 | $ | 8,093 | $ | 91,606 | $ | 302,234 | |||||||||||||||||||
Ending balances: | |||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 4,957 | $ | 45,208 | $ | 239 | $ | 11,179 | $ | 61,583 | |||||||||||||||||||
Collectively evaluated for impairment | $ | 36,243 | $ | 116,127 | $ | 7,854 | $ | 80,427 | $ | 240,651 | |||||||||||||||||||
Summary Of Delinquencies And Nonaccruals, By Portfolio Class | The following chart summarizes delinquencies and nonaccruals, by portfolio class, as of December 31, 2014, 2013 and 2012. | ||||||||||||||||||||||||||||
31-Dec-14 | |||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||
30-59 Days | 60-89 Days | 90+ Days | Total | Total Loans | Non- | ||||||||||||||||||||||||
Past Due | Past Due | Past Due | Past Due | Current | Receivable | accrual | |||||||||||||||||||||||
Commercial | $ | 282 | $ | 27 | $ | — | $ | 309 | $ | 30,585 | $ | 30,894 | $ | 633 | |||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||
Construction | 199 | — | 364 | 563 | 30,907 | 31,470 | 4,464 | ||||||||||||||||||||||
Other | 493 | 283 | 2,023 | 2,799 | 79,583 | 82,382 | 2,643 | ||||||||||||||||||||||
Real Estate: | |||||||||||||||||||||||||||||
Residential | 2,576 | 372 | 2,810 | 5,758 | 78,810 | 84,568 | 3,917 | ||||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||||
Other | 101 | 2 | — | 103 | 5,449 | 5,552 | — | ||||||||||||||||||||||
Revolving credit | 4 | 4 | 1 | 9 | 668 | 677 | 4 | ||||||||||||||||||||||
Total | $ | 3,655 | $ | 688 | $ | 5,198 | $ | 9,541 | $ | 226,002 | $ | 235,543 | $ | 11,661 | |||||||||||||||
31-Dec-13 | |||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||
30-59 Days | 60-89 Days | 90+ Days | Total | Total Loans | Non- | ||||||||||||||||||||||||
Past Due | Past Due | Past Due | Past Due | Current | Receivable | accrual | |||||||||||||||||||||||
Commercial | $ | 771 | $ | 146 | $ | 407 | $ | 1,324 | $ | 32,387 | $ | 33,711 | $ | 430 | |||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||
Construction | 215 | 33 | 2,243 | 2,491 | 36,408 | 38,899 | 4,208 | ||||||||||||||||||||||
Other | 1,156 | — | 3,414 | 4,570 | 86,981 | 91,551 | 4,017 | ||||||||||||||||||||||
Real Estate: | |||||||||||||||||||||||||||||
Residential | 2,188 | 830 | 1,381 | 4,399 | 79,936 | 84,335 | 1,936 | ||||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||||
Other | 191 | 219 | 35 | 445 | 6,710 | 7,155 | 40 | ||||||||||||||||||||||
Revolving credit | 18 | 3 | — | 21 | 752 | 773 | — | ||||||||||||||||||||||
Total | $ | 4,539 | $ | 1,231 | $ | 7,480 | $ | 13,250 | $ | 243,174 | $ | 256,424 | $ | 10,631 | |||||||||||||||
31-Dec-12 | |||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||
30-59 Days | 60-89 Days | 90+ Days | Total | Total Loans | Non- | ||||||||||||||||||||||||
Past Due | Past Due | Past Due | Past Due | Current | Receivable | accrual | |||||||||||||||||||||||
Commercial | $ | 767 | $ | 730 | $ | 956 | $ | 2,453 | $ | 38,747 | $ | 41,200 | $ | 1,197 | |||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||
Construction | 2,350 | 882 | 15,189 | 18,421 | 39,853 | 58,274 | 15,189 | ||||||||||||||||||||||
Other | 3,626 | 1,903 | 4,170 | 9,699 | 93,362 | 103,061 | 4,129 | ||||||||||||||||||||||
Real Estate: | |||||||||||||||||||||||||||||
Residential | 3,100 | 691 | 1,846 | 5,637 | 85,969 | 91,606 | 1,919 | ||||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||||
Other | 120 | 132 | 118 | 370 | 6,896 | 7,266 | 129 | ||||||||||||||||||||||
Revolving credit | 7 | 10 | 4 | 21 | 806 | 827 | 4 | ||||||||||||||||||||||
Total | $ | 9,970 | $ | 4,348 | $ | 22,283 | $ | 36,601 | $ | 265,633 | $ | 302,234 | $ | 22,567 | |||||||||||||||
Summary Of Internal Credit Risk Grades, By Portfolio Class | The following tables summarize management’s internal credit risk grades, by portfolio class, as of December 31: | ||||||||||||||||||||||||||||
31-Dec-14 | |||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||
Commercial | |||||||||||||||||||||||||||||
Commercial | Real Estate | Consumer | Residential | Total | |||||||||||||||||||||||||
Grade 1 - Minimal | $ | 1,093 | $ | — | $ | 531 | $ | — | $ | 1,624 | |||||||||||||||||||
Grade 2 – Modest | 1,164 | 679 | 93 | 1,216 | 3,152 | ||||||||||||||||||||||||
Grade 3 – Average | 3,868 | 5,618 | 156 | 4,688 | 14,330 | ||||||||||||||||||||||||
Grade 4 – Satisfactory | 16,367 | 59,536 | 4,928 | 56,758 | 137,589 | ||||||||||||||||||||||||
Grade 5 – Watch | 2,905 | 16,091 | 178 | 4,695 | 23,869 | ||||||||||||||||||||||||
Grade 6 – Special Mention | 1,191 | 4,249 | 132 | 3,747 | 9,319 | ||||||||||||||||||||||||
Grade 7 – Substandard | 4,306 | 27,679 | 211 | 13,464 | 45,660 | ||||||||||||||||||||||||
Grade 8 – Doubtful | — | — | — | — | — | ||||||||||||||||||||||||
Grade 9 – Loss | — | — | — | — | — | ||||||||||||||||||||||||
Total loans receivable | $ | 30,894 | $ | 113,852 | $ | 6,229 | $ | 84,568 | $ | 235,543 | |||||||||||||||||||
31-Dec-13 | |||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||
Commercial | |||||||||||||||||||||||||||||
Commercial | Real Estate | Consumer | Residential | Total | |||||||||||||||||||||||||
Grade 1 - Minimal | $ | 1,364 | $ | — | $ | 775 | $ | — | $ | 2,139 | |||||||||||||||||||
Grade 2 – Modest | 314 | 1,066 | 98 | 1,835 | 3,313 | ||||||||||||||||||||||||
Grade 3 – Average | 4,782 | 6,412 | 914 | 3,437 | 15,545 | ||||||||||||||||||||||||
Grade 4 – Satisfactory | 17,092 | 67,453 | 5,045 | 53,868 | 143,458 | ||||||||||||||||||||||||
Grade 5 – Watch | 3,204 | 17,288 | 221 | 6,933 | 27,646 | ||||||||||||||||||||||||
Grade 6 – Special Mention | 1,788 | 10,028 | 133 | 5,127 | 17,076 | ||||||||||||||||||||||||
Grade 7 – Substandard | 5,167 | 28,203 | 742 | 13,135 | 47,247 | ||||||||||||||||||||||||
Grade 8 – Doubtful | — | — | — | — | — | ||||||||||||||||||||||||
Grade 9 – Loss | — | — | — | — | — | ||||||||||||||||||||||||
Total loans receivable | $ | 33,711 | $ | 130,450 | $ | 7,928 | $ | 84,335 | $ | 256,424 | |||||||||||||||||||
31-Dec-12 | |||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||
Commercial | |||||||||||||||||||||||||||||
Commercial | Real Estate | Consumer | Residential | Total | |||||||||||||||||||||||||
Grade 1 - Minimal | $ | 1,345 | $ | — | $ | 822 | $ | — | $ | 2,167 | |||||||||||||||||||
Grade 2 – Modest | 546 | 2,412 | 67 | 2,517 | 5,542 | ||||||||||||||||||||||||
Grade 3 – Average | 4,508 | 5,871 | 228 | 4,094 | 14,701 | ||||||||||||||||||||||||
Grade 4 – Satisfactory | 18,554 | 63,658 | 6,038 | 53,955 | 142,205 | ||||||||||||||||||||||||
Grade 5 – Watch | 6,997 | 32,640 | 366 | 10,923 | 50,926 | ||||||||||||||||||||||||
Grade 6 – Special Mention | 2,603 | 10,893 | 258 | 8,443 | 22,197 | ||||||||||||||||||||||||
Grade 7 – Substandard | 6,544 | 44,521 | 314 | 11,674 | 63,053 | ||||||||||||||||||||||||
Grade 8 – Doubtful | 103 | 1,340 | — | — | 1,443 | ||||||||||||||||||||||||
Grade 9 – Loss | — | — | — | — | — | ||||||||||||||||||||||||
Total loans receivable | $ | 41,200 | $ | 161,335 | $ | 8,093 | $ | 91,606 | $ | 302,234 | |||||||||||||||||||
Schedule Of Impaired Loans | The following chart details our impaired loans, which includes troubled debt restructurings (“TDRs”) totaling $33.2 million, $31.5 million and $44.9 million, by category as of December 31, 2014, 2013 and 2012, respectively: | ||||||||||||||||||||||||||||
31-Dec-14 | |||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||
Unpaid | Average | Interest | |||||||||||||||||||||||||||
Recorded- | Principal | Related | Recorded | Income | |||||||||||||||||||||||||
Investment | Balance | Allowance | Investment | Recognized | |||||||||||||||||||||||||
With no related allowance recorded: | |||||||||||||||||||||||||||||
Commercial | $ | 1,852 | $ | 2,678 | $ | — | $ | 2,649 | $ | 79 | |||||||||||||||||||
Commercial real estate | 19,156 | 24,441 | — | 22,377 | 1,083 | ||||||||||||||||||||||||
Residential | 5,950 | 6,528 | — | 6,249 | 268 | ||||||||||||||||||||||||
Consumer | 32 | 32 | — | 34 | 3 | ||||||||||||||||||||||||
Total: | $ | 26,990 | $ | 33,679 | $ | — | $ | 31,309 | $ | 1,433 | |||||||||||||||||||
With an allowance recorded: | |||||||||||||||||||||||||||||
Commercial | 1,792 | 1,792 | 151 | 1,892 | 81 | ||||||||||||||||||||||||
Commercial real estate | 5,990 | 6,194 | 1,008 | 6,143 | 282 | ||||||||||||||||||||||||
Residential | 6,468 | 6,468 | 737 | 6,506 | 271 | ||||||||||||||||||||||||
Consumer | 143 | 143 | 11 | 150 | 8 | ||||||||||||||||||||||||
Total: | $ | 14,393 | $ | 14,597 | $ | 1,907 | $ | 14,691 | $ | 642 | |||||||||||||||||||
Total: | |||||||||||||||||||||||||||||
Commercial | 3,644 | 4,470 | 151 | 4,541 | 160 | ||||||||||||||||||||||||
Commercial real estate | 25,146 | 30,635 | 1,008 | 28,520 | 1,365 | ||||||||||||||||||||||||
Residential | 12,418 | 12,996 | 737 | 12,755 | 539 | ||||||||||||||||||||||||
Consumer | 175 | 175 | 11 | 184 | 11 | ||||||||||||||||||||||||
Total: | $ | 41,383 | $ | 48,276 | $ | 1,907 | $ | 46,000 | $ | 2,075 | |||||||||||||||||||
31-Dec-13 | |||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||
Unpaid | Average | Interest | |||||||||||||||||||||||||||
Recorded- | Principal | Related | Recorded | Income | |||||||||||||||||||||||||
Investment | Balance | Allowance | Investment | Recognized | |||||||||||||||||||||||||
With no related allowance recorded: | |||||||||||||||||||||||||||||
Commercial | $ | 1,464 | $ | 1,657 | $ | — | $ | 1,621 | $ | 50 | |||||||||||||||||||
Commercial real estate | 14,120 | 17,052 | — | 14,275 | 606 | ||||||||||||||||||||||||
Residential | 3,729 | 4,366 | — | 3,901 | 206 | ||||||||||||||||||||||||
Consumer | 55 | 79 | — | 60 | 7 | ||||||||||||||||||||||||
Total: | $ | 19,368 | $ | 23,154 | $ | — | $ | 19,857 | $ | 869 | |||||||||||||||||||
With an allowance recorded: | |||||||||||||||||||||||||||||
Commercial | 2,482 | 2,482 | 218 | 2,556 | 106 | ||||||||||||||||||||||||
Commercial real estate | 15,420 | 15,747 | 2,455 | 15,674 | 469 | ||||||||||||||||||||||||
Residential | 8,241 | 8,454 | 1,105 | 8,381 | 384 | ||||||||||||||||||||||||
Consumer | 168 | 168 | 18 | 163 | 8 | ||||||||||||||||||||||||
Total: | $ | 26,311 | $ | 26,851 | $ | 3,796 | $ | 26,774 | $ | 967 | |||||||||||||||||||
Total: | |||||||||||||||||||||||||||||
Commercial | 3,946 | 4,139 | 218 | 4,177 | 156 | ||||||||||||||||||||||||
Commercial real estate | 29,540 | 32,799 | 2,455 | 29,949 | 1,075 | ||||||||||||||||||||||||
Residential | 11,970 | 12,820 | 1,105 | 12,282 | 590 | ||||||||||||||||||||||||
Consumer | 223 | 247 | 18 | 223 | 15 | ||||||||||||||||||||||||
Total: | $ | 45,679 | $ | 50,005 | $ | 3,796 | $ | 46,631 | $ | 1,836 | |||||||||||||||||||
31-Dec-12 | |||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||
Unpaid | Average | Interest | |||||||||||||||||||||||||||
Recorded | Principal | Related | Recorded | Income | |||||||||||||||||||||||||
Investment | Balance | Allowance | Investment | Recognized | |||||||||||||||||||||||||
With no related allowance recorded: | |||||||||||||||||||||||||||||
Commercial | $ | 1,347 | $ | 1,367 | $ | — | $ | 1,660 | $ | 45 | |||||||||||||||||||
Commercial real estate | 18,926 | 24,381 | — | 26,255 | 708 | ||||||||||||||||||||||||
Residential | 3,504 | 4,288 | — | 3,523 | 118 | ||||||||||||||||||||||||
Consumer | 99 | 100 | — | 100 | 4 | ||||||||||||||||||||||||
Total: | $ | 23,876 | $ | 30,136 | $ | — | $ | 31,538 | $ | 875 | |||||||||||||||||||
With an allowance recorded: | |||||||||||||||||||||||||||||
Commercial | 3,610 | 3,719 | 833 | 3,521 | 143 | ||||||||||||||||||||||||
Commercial real estate | 26,282 | 27,904 | 3,499 | 21,704 | 542 | ||||||||||||||||||||||||
Residential | 7,675 | 8,033 | 1,236 | 7,917 | 369 | ||||||||||||||||||||||||
Consumer | 140 | 140 | 15 | 141 | 3 | ||||||||||||||||||||||||
Total: | $ | 37,707 | $ | 39,796 | $ | 5,583 | $ | 33,283 | $ | 1,057 | |||||||||||||||||||
Total: | |||||||||||||||||||||||||||||
Commercial | 4,957 | 5,086 | 833 | 5,181 | 188 | ||||||||||||||||||||||||
Commercial real estate | 45,208 | 52,285 | 3,499 | 47,959 | 1,250 | ||||||||||||||||||||||||
Residential | 11,179 | 12,321 | 1,236 | 11,440 | 487 | ||||||||||||||||||||||||
Consumer | 239 | 240 | 15 | 241 | 7 | ||||||||||||||||||||||||
Total: | $ | 61,583 | $ | 69,932 | $ | 5,583 | $ | 64,821 | $ | 1,932 | |||||||||||||||||||
Summary Of Troubled Debt Restructurings | The following is a summary of information pertaining to our TDRs: | ||||||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||||||||||||||||||
Nonperforming TDRs | $ | 5,013 | $ | 6,443 | $ | 14,891 | |||||||||||||||||||||||
Performing TDRs: | |||||||||||||||||||||||||||||
Commercial | 2,942 | 3,496 | 3,611 | ||||||||||||||||||||||||||
Commercial real estate | 17,499 | 14,673 | 20,343 | ||||||||||||||||||||||||||
Residential | 7,537 | 6,690 | 5,967 | ||||||||||||||||||||||||||
Consumer | 175 | 151 | 73 | ||||||||||||||||||||||||||
Total performing TDRs | 28,153 | 25,010 | 29,994 | ||||||||||||||||||||||||||
Total TDRs | $ | 33,166 | $ | 31,453 | $ | 44,885 | |||||||||||||||||||||||
Summary Of Loan Modifications | The following table summarizes how loans that were considered TDRs were modified during the years indicated: | ||||||||||||||||||||||||||||
For the Year Ended December 31, 2014 | |||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||
TDRs that are in compliance | TDRs that subsequently defaulted(1) | ||||||||||||||||||||||||||||
with the terms of the agreement | |||||||||||||||||||||||||||||
Number | Pre- | Post | Number | Pre- | Post- | ||||||||||||||||||||||||
of | modification | modification | of | modification | modification | ||||||||||||||||||||||||
contracts | outstanding | outstanding | contracts | outstanding | outstanding | ||||||||||||||||||||||||
recorded | recorded | recorded | recorded | ||||||||||||||||||||||||||
investment | investment | investment | investment | ||||||||||||||||||||||||||
Commercial real estate | 25 | $ | 6,016 | $ | 5,837 | 1 | $ | 36 | $ | 36 | |||||||||||||||||||
Residential | 19 | 3,171 | 2,992 | 3 | 518 | 518 | |||||||||||||||||||||||
Commercial | 5 | 455 | 455 | — | — | — | |||||||||||||||||||||||
Consumer | 2 | 31 | 31 | — | — | — | |||||||||||||||||||||||
Total | 51 | $ | 9,673 | $ | 9,315 | 4 | $ | 554 | $ | 554 | |||||||||||||||||||
For the Year Ended December 31, 2013 | |||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||
TDRs that are in compliance | TDRs that subsequently defaulted(1) | ||||||||||||||||||||||||||||
with the terms of the agreement | |||||||||||||||||||||||||||||
Number | Pre- | Post | Number | Pre- | Post- | ||||||||||||||||||||||||
of | modification | modification | of | modification | modification | ||||||||||||||||||||||||
contracts | outstanding | outstanding | contracts | outstanding | outstanding | ||||||||||||||||||||||||
recorded | recorded | recorded | recorded | ||||||||||||||||||||||||||
investment | investment | investment | investment | ||||||||||||||||||||||||||
Commercial real estate | 4 | $ | 1,309 | $ | 1,309 | — | $ | — | $ | — | |||||||||||||||||||
Residential | 6 | 1,401 | 1,401 | — | — | — | |||||||||||||||||||||||
Commercial | 12 | 636 | 636 | — | — | — | |||||||||||||||||||||||
Consumer | 5 | 84 | 84 | — | — | — | |||||||||||||||||||||||
Total | 27 | $ | 3,430 | $ | 3,430 | — | $ | — | $ | — | |||||||||||||||||||
For the Year Ended December 31, 2012 | |||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||
TDRs that are in compliance | TDRs that subsequently defaulted(1) | ||||||||||||||||||||||||||||
with the terms of the agreement | |||||||||||||||||||||||||||||
Number | Pre- | Post | Number | Pre- | Post- | ||||||||||||||||||||||||
of | modification | modification | of | modification | modification | ||||||||||||||||||||||||
contracts | outstanding | outstanding | contracts | outstanding | outstanding | ||||||||||||||||||||||||
recorded | recorded | recorded | recorded | ||||||||||||||||||||||||||
investment | investment | investment | investment | ||||||||||||||||||||||||||
Commercial real estate | 7 | $ | 9,326 | $ | 9,326 | 4 | $ | 2,730 | $ | 2,730 | |||||||||||||||||||
Residential | 4 | 2,182 | 2,182 | — | — | — | |||||||||||||||||||||||
Commercial | 15 | 756 | 756 | 1 | 91 | 91 | |||||||||||||||||||||||
Consumer | — | — | — | — | — | — | |||||||||||||||||||||||
Total | 26 | $ | 12,264 | $ | 12,264 | 5 | $ | 2,821 | $ | 2,821 | |||||||||||||||||||
(1) Loans past due 90 days or more are considered to be in default. | |||||||||||||||||||||||||||||
Schedule Of Off-balance Sheet Financial Instruments | Collateral held for commitments to extend credit and standby letters of credit varies but may include accounts receivable, inventory, property, plant, equipment, and income-producing commercial properties. The following table summarizes the Company’s off-balance sheet financial instruments whose contract amounts represent credit risk: | ||||||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||||||||||||||||||
Commitments to extend credit | $ | 27,017 | $ | 29,836 | $ | 29,473 | |||||||||||||||||||||||
Standby letters of credit | 247 | 361 | 490 |
PREMISES_FURNITURE_AND_EQUIPME1
PREMISES, FURNITURE AND EQUIPMENT (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||
Schedule of composition of premises, furniture and equipment | Premises, furniture and equipment consisted of the following: | ||||||||||||
December 31, | |||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||
Land | $ | 7,099 | $ | 7,099 | $ | 7,099 | |||||||
Buildings and land improvements | 16,082 | 16,134 | 16,213 | ||||||||||
Furniture and equipment | 7,874 | 7,608 | 7,599 | ||||||||||
Leasehold improvements | 65 | 65 | 65 | ||||||||||
31,120 | 30,906 | 30,976 | |||||||||||
Less accumulated depreciation | (10,828 | ) | (10,104 | ) | (9,282 | ) | |||||||
Premises, furniture and equipment, net | $ | 20,292 | $ | 20,802 | $ | 21,694 |
OTHER_REAL_ESTATE_OWNED_Tables
OTHER REAL ESTATE OWNED (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Other Real Estate [Abstract] | |||||||||||||
Schedule Of Transactions In Other Real Estate Owned | Transactions in other real estate owned for the years ended December 31: | ||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||
Balance, beginning of year | $ | 24,972 | $ | 19,464 | $ | 15,665 | |||||||
Additions | 2,183 | 17,659 | 14,398 | ||||||||||
Sales | (7,337 | ) | (11,383 | ) | (7,839 | ) | |||||||
Write-downs | (317 | ) | (768 | ) | (2,760 | ) | |||||||
Balance, end of period | $ | 19,501 | $ | 24,972 | $ | 19,464 |
OTHER_ASSETS_Tables
OTHER ASSETS (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Other Assets Tables | |||||||||||||
Schedule of Other assets | Other assets consisted of the following at December 31: | ||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||
Prepaid expenses and insurance | $ | 736 | $ | 471 | $ | 603 | |||||||
Unamortized software | 52 | 29 | 42 | ||||||||||
Receivable from sale of other real estate owned | — | 3,348 | — | ||||||||||
Proceeds due from life insurance | 1,208 | — | — | ||||||||||
Other | 508 | 358 | 181 | ||||||||||
Total | $ | 2,504 | $ | 4,206 | $ | 826 |
DEPOSITS_Tables
DEPOSITS (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Deposits: | |||||
Schedule Of Deposits | At December 31, 2014, the scheduled maturities of time deposits were as follows (in thousands): | ||||
Maturing in: | Amount | ||||
Less than one year | $ | 115,492 | |||
One to three years | 77,616 | ||||
Three to five years | 25,801 | ||||
Beyond five years | 1,890 | ||||
$ | 220,799 |
ADVANCES_FROM_THE_FEDERAL_HOME1
ADVANCES FROM THE FEDERAL HOME LOAN BANK (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Federal Home Loan Bank, Advances, General Debt Obligations, Disclosures [Abstract] | ||||||||||||||
Schedule Of Advances From Federal Home Loan Bank | Advances from the Federal Home Loan Bank consisted of the following at December 31, 2014: | |||||||||||||
(Dollars in thousands) | Advance | Advance | Advance | Maturing | ||||||||||
Type | Amount | Rate | On | |||||||||||
Convertible Advance | $ | 2,000 | 3.60% | 9/4/18 | ||||||||||
Convertible Advance | 5,000 | 3.45% | 9/10/18 | |||||||||||
Convertible Advance | 5,000 | 2.95% | 9/18/18 | |||||||||||
Fixed Rate | 5,000 | 3.86% | 8/20/19 | |||||||||||
$ | 17,000 | |||||||||||||
CAPITAL_REQUIREMENTS_Tables
CAPITAL REQUIREMENTS (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | |||||||||||||||||||||||||
Schedule of capital ratios and regulatory minimum requirements | The following table summarizes the capital ratios and the regulatory minimum requirements for the Company and the Bank. | ||||||||||||||||||||||||
Actual | Minimum | Minimum | |||||||||||||||||||||||
Capital | To Be Well | ||||||||||||||||||||||||
Requirement | Capitalized Under | ||||||||||||||||||||||||
Prompt Corrective | |||||||||||||||||||||||||
Action Provisions | |||||||||||||||||||||||||
(Dollars in thousands) | Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||||||||||
31-Dec-14 | |||||||||||||||||||||||||
The Company | |||||||||||||||||||||||||
Total Capital (to Risk-Weighted Assets) | $ | (10,402 | ) | (3.61 | )% | $ | 23,031 | 8 | % | N/A | N/A | ||||||||||||||
Tier I Capital (to Risk-Weighted Assets) | $ | (10,402 | ) | (3.61 | )% | $ | 11,516 | 4 | % | N/A | N/A | ||||||||||||||
Tier I Capital (to Average Assets) | $ | (10,402 | ) | (2.36 | )% | $ | 17,614 | 4 | % | N/A | N/A | ||||||||||||||
The Bank | |||||||||||||||||||||||||
Total Capital (to Risk-Weighted Assets) | $ | 14,533 | 5.05 | % | $ | 23,008 | 8 | % | $ | 28,760 | 10 | % | |||||||||||||
Tier I Capital (to Risk-Weighted Assets) | $ | 10,911 | 3.79 | % | $ | 11,504 | 4 | % | (1 | ) | (1 | ) | |||||||||||||
Tier I Capital (to Average Assets) | $ | 10,911 | 2.53 | % | $ | 17,255 | 4 | % | $ | 34,510 | 8 | % | |||||||||||||
31-Dec-13 | |||||||||||||||||||||||||
The Company | |||||||||||||||||||||||||
Total Capital (to Risk-Weighted Assets) | $ | (10,169 | ) | (3.19 | )% | $ | 25,512 | 8 | % | N/A | N/A | ||||||||||||||
Tier I Capital (to Risk-Weighted Assets) | $ | (10,169 | ) | (3.19 | )% | $ | 12,756 | 4 | % | N/A | N/A | ||||||||||||||
Tier I Capital (to Average Assets) | $ | (10,169 | ) | (2.23 | )% | $ | 18,242 | 4 | % | N/A | N/A | ||||||||||||||
The Bank | |||||||||||||||||||||||||
Total Capital (to Risk-Weighted Assets) | $ | 13,842 | 4.34 | % | $ | 25,505 | 8 | % | $ | 31,881 | 10 | % | |||||||||||||
Tier I Capital (to Risk-Weighted Assets) | $ | 9,789 | 3.07 | % | $ | 12,753 | 4 | % | (1 | ) | (1 | ) | |||||||||||||
Tier I Capital (to Average Assets) | $ | 9,789 | 2.17 | % | $ | 18,067 | 4 | % | $ | 36,135 | 8 | % | |||||||||||||
31-Dec-12 | |||||||||||||||||||||||||
The Company | |||||||||||||||||||||||||
Total Capital (to Risk-Weighted Assets) | $ | (11,932 | ) | (3.44 | )% | $ | 27,754 | 8 | % | N/A | N/A | ||||||||||||||
Tier I Capital (to Risk-Weighted Assets) | $ | (11,932 | ) | (3.44 | )% | $ | 13,877 | 4 | % | N/A | N/A | ||||||||||||||
Tier I Capital (to Average Assets) | $ | (11,932 | ) | (2.34 | )% | $ | 20,367 | 4 | % | N/A | N/A | ||||||||||||||
The Bank | |||||||||||||||||||||||||
Total Capital (to Risk-Weighted Assets) | $ | 12,175 | 3.51 | % | $ | 27,733 | 8 | % | $ | 34,667 | 10 | % | |||||||||||||
Tier I Capital (to Risk-Weighted Assets) | $ | 7,720 | 2.23 | % | $ | 13,867 | 4 | % | (1 | ) | (1 | ) | |||||||||||||
Tier I Capital (to Average Assets) | $ | 7,720 | 1.56 | % | $ | 19,816 | 4 | % | $ | 39,632 | 8 | % | |||||||||||||
(1) Minimum capital amounts and ratios presented are amounts to be well-capitalized under the various regulatory capital requirements administered by the FDIC. On February 10, 2011, the Bank became subject to a regulatory Consent Order with the FDIC. Minimum capital amounts and ratios presented for the Bank are the minimum levels set forth in the Consent Order. No minimum Tier 1 capital to risk-weighted assets ratio was specified in the Consent Order. Regardless of the Bank’s capital ratios, it is unable to be classified as “well-capitalized” while it is operating under the Consent Order with the FDIC. |
INCOME_LOSS_PER_SHARE_Tables
INCOME (LOSS) PER SHARE (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Earnings Per Share [Abstract] | |||||||||||||
Reconciliation Of Numerators And Denominators Used To Calculate Basic And Diluted Earnings (Losses) Per Share | |||||||||||||
(Dollars in thousands, except per share amounts) | Years ended December 31, | ||||||||||||
2014 | 2013 | 2012 | |||||||||||
Basic income (loss) per common share: | |||||||||||||
Net income (loss) available to common shareholders | $ | (1,403 | ) | $ | 911 | $ | (10,396 | ) | |||||
Weighted average common shares outstanding - basic | 3,770,355 | 3,738,337 | 3,738,337 | ||||||||||
Basic income (loss) per common share | $ | (0.37 | ) | $ | 0.24 | $ | (2.78 | ) | |||||
Diluted income (loss) per common share: | |||||||||||||
Net income (loss) available to common shareholders | $ | (1,403 | ) | $ | 911 | $ | (10,396 | ) | |||||
Weighted average common shares outstanding - basic | 3,770,355 | 3,738,337 | 3,738,337 | ||||||||||
Incremental shares | — | — | — | ||||||||||
Average common shares outstanding - diluted | 3,770,355 | 3,738,337 | 3,738,337 | ||||||||||
Diluted income (loss) per common share | $ | (0.37 | ) | $ | 0.24 | $ | (2.78 | ) |
OTHER_EXPENSES_Tables
OTHER EXPENSES (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Other Expenses Tables | |||||||||||||
OTHER EXPENSES | Other expenses are summarized as follows: | ||||||||||||
Years Ended December 31, | |||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||
Stationery, printing, and postage | $ | 275 | $ | 318 | $ | 337 | |||||||
Dues and subscriptions | 59 | 72 | 104 | ||||||||||
Telephone | 202 | 204 | 208 | ||||||||||
Director and officer insurance | 212 | 486 | 120 | ||||||||||
ATM services | 27 | 115 | 170 | ||||||||||
Appraisal fee expense | 123 | 140 | 97 | ||||||||||
Accountant fees | 277 | 84 | 180 | ||||||||||
Legal fees | 697 | 1,875 | 991 | ||||||||||
Consulting fees | 112 | 186 | 511 | ||||||||||
Courier services | 51 | 58 | 74 | ||||||||||
Other | 880 | 774 | 1,107 | ||||||||||
Total | $ | 2,915 | $ | 4,312 | $ | 3,899 |
INCOME_TAXES_Tables
INCOME TAXES (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Income Taxes Tables | |||||||||||||
Schedule of provision for income taxes | Income tax expense is summarized as follows: | ||||||||||||
Years Ended December 31, | |||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||
Currently payable: | |||||||||||||
Federal | $ | — | $ | — | $ | — | |||||||
State | 78 | — | — | ||||||||||
Total current | 78 | — | — | ||||||||||
Deferred income taxes | — | — | — | ||||||||||
Income tax expense | $ | 78 | $ | — | $ | — | |||||||
Schedule of deferred income tax liabilities and assets | The components of the net deferred tax asset are as follows: | ||||||||||||
December 31, | |||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||
Deferred tax assets: | |||||||||||||
Allowance for loan losses | $ | 1,968 | $ | 3,211 | $ | 4,811 | |||||||
Net unrealized losses on securities available-for-sale | 313 | 2,321 | — | ||||||||||
Net capitalized loan costs | 23 | 25 | 33 | ||||||||||
Net operating loss | 19,572 | 16,751 | 14,412 | ||||||||||
Deferred compensation | 13 | 17 | 21 | ||||||||||
Nonaccruing interest | 232 | 241 | 908 | ||||||||||
Tax credits | 259 | 276 | 307 | ||||||||||
Other real estate owned | 655 | 638 | 1,238 | ||||||||||
Loss on equity securities | 1 | 43 | 43 | ||||||||||
Other | 8 | 5 | 3 | ||||||||||
Total deferred tax assets | 23,044 | 23,528 | 21,776 | ||||||||||
Valuation Allowance | (21,971 | ) | (22,361 | ) | (20,451 | ) | |||||||
Total net deferred tax assets | 1,073 | 1,167 | 1,325 | ||||||||||
Deferred tax liabilities: | |||||||||||||
Accumulated depreciation | (965 | ) | (1,046 | ) | (1,120 | ) | |||||||
Gain on sale of real estate | — | (73 | ) | (73 | ) | ||||||||
Prepaid expenses | (108 | ) | (48 | ) | (69 | ) | |||||||
Net unrealized gains on securities available-for-sale | — | — | (63 | ) | |||||||||
Total deferred tax liabilities | (1,073 | ) | (1,167 | ) | (1,325 | ) | |||||||
Net deferred tax asset | $ | — | $ | — | $ | — | |||||||
Schedule of reconciliation of the income tax provision and the amount computed by applying the federal statutory rate to income before income taxes | A reconciliation between the income tax expense (benefit) and the amount computed by applying the Federal statutory rates of 34% to income before income taxes follows: | ||||||||||||
Years ended December 31, | |||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||
Tax benefit at statutory rate | $ | (73 | ) | $ | 599 | $ | (3,239 | ) | |||||
State income tax, net of federal income tax benefit | 52 | — | (54 | ) | |||||||||
Tax-exempt interest income | (5 | ) | (16 | ) | (40 | ) | |||||||
Bank owned life insurance | (113 | ) | — | — | |||||||||
Life insurance proceeds | (315 | ) | — | — | |||||||||
Valuation allowance | 542 | (473 | ) | 3,454 | |||||||||
Other | (10 | ) | (110 | ) | (121 | ) | |||||||
Income tax expense (benefit) | $ | 78 | $ | — | $ | — |
FAIR_VALUE_Tables
FAIR VALUE (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||
Schedule Of Carrying Values And Estimated Fair Values Of Financial Instruments | The carrying values and estimated fair values of the Company’s financial instruments were as follows: | ||||||||||||||||||||
31-Dec-14 | Fair Value Measurements | ||||||||||||||||||||
(Dollars in thousands) | Carrying | Estimated | Quoted | Significant | Significant | ||||||||||||||||
Amount | Fair Value | market | other | unobservable | |||||||||||||||||
price in | observable | inputs | |||||||||||||||||||
active markets | inputs | (Level 3) | |||||||||||||||||||
(Level 1) | (Level 2) | ||||||||||||||||||||
Financial Assets: | |||||||||||||||||||||
Cash and cash equivalents | $ | 28,527 | $ | 28,527 | $ | 28,527 | $ | — | $ | — | |||||||||||
Securities available-for-sale | 106,674 | 106,674 | — | 106,674 | — | ||||||||||||||||
Nonmarketable equity securities | 1,342 | 1,342 | — | — | 1,342 | ||||||||||||||||
Loans, net | 229,756 | 230,038 | — | — | 230,038 | ||||||||||||||||
Financial Liabilities: | |||||||||||||||||||||
Demand deposit, interest-bearing transaction, and savings accounts | 170,538 | 170,538 | 170,538 | — | — | ||||||||||||||||
Certificates of deposit | 220,799 | 222,789 | — | 222,789 | — | ||||||||||||||||
Repurchase agreements | 1,612 | 1,612 | — | 1,612 | — | ||||||||||||||||
Advances from the Federal Home Loan Bank | 17,000 | 17,136 | — | 17,136 | — | ||||||||||||||||
Subordinated debentures | 11,062 | * | — | — | — | ||||||||||||||||
Junior subordinated debentures | 6,186 | * | — | — | — | ||||||||||||||||
31-Dec-13 | |||||||||||||||||||||
Fair Value Measurements | |||||||||||||||||||||
(Dollars in thousands) | Carrying | Estimated | Quoted | Significant | Significant | ||||||||||||||||
Amount | Fair Value | market | other | unobservable | |||||||||||||||||
price in | observable | inputs | |||||||||||||||||||
active markets | inputs | (Level 3) | |||||||||||||||||||
(Level 1) | (Level 2) | ||||||||||||||||||||
Financial Assets: | |||||||||||||||||||||
Cash and cash equivalents | $ | 28,081 | $ | 28,081 | $ | 28,081 | $ | — | $ | — | |||||||||||
Securities available-for-sale | 94,602 | 94,602 | — | 94,602 | — | ||||||||||||||||
Nonmarketable equity securities | 1,743 | 1,743 | — | — | 1,743 | ||||||||||||||||
Loans, net | 246,981 | 248,633 | — | — | 248,633 | ||||||||||||||||
Financial Liabilities: | |||||||||||||||||||||
Demand deposit, interest-bearing transaction, and savings accounts | 163,505 | 163,505 | 163,505 | — | — | ||||||||||||||||
Certificates of deposit | 242,539 | 244,463 | — | 244,463 | — | ||||||||||||||||
Repurchase agreements | 1,337 | 1,337 | — | 1,337 | — | ||||||||||||||||
Advances from the Federal Home Loan Bank | 22,000 | 25,055 | — | 25,055 | — | ||||||||||||||||
Subordinated debentures | 11,062 | * | — | — | — | ||||||||||||||||
Junior subordinated debentures | 6,186 | * | — | — | — | ||||||||||||||||
31-Dec-12 | |||||||||||||||||||||
Fair Value Measurements | |||||||||||||||||||||
(Dollars in thousands) | Carrying | Estimated | Quoted | Significant | Significant | ||||||||||||||||
Amount | Fair Value | market | other | unobservable | |||||||||||||||||
price in | observable | inputs | |||||||||||||||||||
active markets | inputs | (Level 3) | |||||||||||||||||||
(Level 1) | (Level 2) | ||||||||||||||||||||
Financial Assets: | |||||||||||||||||||||
Cash and cash equivalents | $ | 46,600 | $ | 46,600 | $ | 46,600 | $ | — | $ | — | |||||||||||
Securities available-for-sale | 77,320 | 77,320 | — | 77,320 | — | ||||||||||||||||
Nonmarketable equity securities | 1,983 | 1,983 | — | — | 1,983 | ||||||||||||||||
Loans, net | 288,084 | 290,230 | — | — | 290,230 | ||||||||||||||||
Financial Liabilities: | |||||||||||||||||||||
Demand deposit, interest-bearing transaction, and savings accounts | 168,832 | 168,832 | 168,832 | — | — | ||||||||||||||||
Certificates of deposit | 267,029 | 269,776 | — | 269,776 | — | ||||||||||||||||
Repurchase agreements | 1,303 | 1,303 | — | 1,303 | — | ||||||||||||||||
Advances from the Federal Home Loan Bank | 22,000 | 25,802 | — | 25,802 | — | ||||||||||||||||
Subordinated debentures | 12,062 | * | — | — | — | ||||||||||||||||
Junior subordinated debentures | 6,186 | * | — | — | — | ||||||||||||||||
Schedule Of Carrying Values And Estimated Fair Values Of Off-Balance Sheet Financial Instruments | |||||||||||||||||||||
Notional | Estimated | ||||||||||||||||||||
Amount | Fair Value | ||||||||||||||||||||
Off-Balance Sheet Financial Instruments: | |||||||||||||||||||||
Commitments to extend credit | $ | 27,017 | n/a | ||||||||||||||||||
Standby letters of credit | 247 | n/a | |||||||||||||||||||
Notional | Estimated | ||||||||||||||||||||
Amount | Fair Value | ||||||||||||||||||||
Off-Balance Sheet Financial Instruments: | |||||||||||||||||||||
Commitments to extend credit | $ | 29,836 | n/a | ||||||||||||||||||
Standby letters of credit | 361 | n/a | |||||||||||||||||||
Notional | Estimated | ||||||||||||||||||||
Amount | Fair Value | ||||||||||||||||||||
Off-Balance Sheet Financial Instruments: | |||||||||||||||||||||
Commitments to extend credit | $ | 29,473 | n/a | ||||||||||||||||||
Standby letters of credit | 490 | n/a | |||||||||||||||||||
Schedule Of Assets And Liabilities Measured At Fair Value On A Recurring Basis | The tables below present the balances of assets and liabilities measured at fair value on a recurring basis by level within the fair value hierarchy. | ||||||||||||||||||||
Quoted prices in | Significant | ||||||||||||||||||||
active markets | Other | Significant | |||||||||||||||||||
for identical | Observable | Unobservable | |||||||||||||||||||
(Dollars in thousands) | assets | Inputs | Inputs | ||||||||||||||||||
Total | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||||||
31-Dec-14 | |||||||||||||||||||||
Assets: | |||||||||||||||||||||
Government sponsored enterprises | $ | 40,082 | $ | — | $ | 40,082 | $ | — | |||||||||||||
Mortgage-backed securities | 65,348 | — | 65,348 | — | |||||||||||||||||
Obligations of state and local governments | 1,244 | — | 1,244 | — | |||||||||||||||||
Total | $ | 106,674 | $ | — | $ | 106,674 | $ | — | |||||||||||||
31-Dec-13 | |||||||||||||||||||||
Assets: | |||||||||||||||||||||
Government sponsored enterprises | $ | 55,075 | $ | — | $ | 55,075 | $ | — | |||||||||||||
Mortgage-backed securities | 37,034 | — | 37,034 | — | |||||||||||||||||
Obligations of state and local governments | 2,493 | — | 2,493 | — | |||||||||||||||||
Total | $ | 94,602 | $ | — | $ | 94,602 | $ | — | |||||||||||||
31-Dec-12 | |||||||||||||||||||||
Assets: | |||||||||||||||||||||
Government sponsored enterprises | $ | 27,108 | $ | — | $ | 27,108 | $ | — | |||||||||||||
Mortgage-backed securities | 44,462 | — | 44,462 | — | |||||||||||||||||
Obligations of state and local governments | 5,750 | — | 5,750 | — | |||||||||||||||||
Total | $ | 77,320 | $ | — | $ | 77,320 | $ | — | |||||||||||||
Schedule Of Assets And Liabilities Recorded At Fair Value On A Non-Recurring Basis | Certain assets and liabilities are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment). The following tables present the assets and liabilities carried on the balance sheet by caption and by level within the valuation hierarchy described above for which a nonrecurring change in fair value has been recorded. | ||||||||||||||||||||
Quoted prices in | Significant | ||||||||||||||||||||
active markets | Other | Significant | |||||||||||||||||||
(Dollars in thousands) | for identical | Observable | Unobservable | ||||||||||||||||||
assets | Inputs | Inputs | |||||||||||||||||||
Total | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||||||
31-Dec-14 | |||||||||||||||||||||
Assets: | |||||||||||||||||||||
Impaired loans, net of valuation allowance | $ | 39,476 | $ | — | $ | — | $ | 39,476 | |||||||||||||
Other real estate owned | 19,501 | — | — | 19,501 | |||||||||||||||||
Total | $ | 58,977 | $ | — | $ | — | $ | 58,977 | |||||||||||||
31-Dec-13 | |||||||||||||||||||||
Assets: | |||||||||||||||||||||
Impaired loans, net of valuation allowance | $ | 41,883 | $ | — | $ | — | $ | 41,883 | |||||||||||||
Other real estate owned | 24,972 | — | — | 24,972 | |||||||||||||||||
Total | $ | 66,855 | $ | — | $ | — | $ | 66,855 | |||||||||||||
31-Dec-12 | |||||||||||||||||||||
Assets: | |||||||||||||||||||||
Impaired loans, net of valuation allowance | $ | 56,000 | $ | — | $ | — | $ | 56,000 | |||||||||||||
Other real estate owned | 19,464 | — | — | 19,464 | |||||||||||||||||
Total | $ | 75,464 | $ | — | $ | — | $ | 75,464 | |||||||||||||
Schedule Of Quantitative Information About Level 3 Fair Value Measurements On A Non-Recurring Basis | The following table presents quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at December 31, 2014. | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
December 31, | Valuation | Unobservable | Range | ||||||||||||||||||
2014 | Techniques | Inputs | (Weighted Avg) | ||||||||||||||||||
Impaired loans: | |||||||||||||||||||||
Commercial | $ | 3,493 | Appraised Value/ | Appraisals and/or sales | |||||||||||||||||
Discounted Cash | of comparable properties/ | 0.00%-75.06% | |||||||||||||||||||
Flows | Independent quotes | -14.41% | |||||||||||||||||||
Commercial real estate | 24,138 | Appraised Value/ | Appraisals and/or sales | ||||||||||||||||||
Discounted Cash | of comparable properties/ | 0.00%-84.15% | |||||||||||||||||||
Flows | Independent quotes | -14.77% | |||||||||||||||||||
Residential | 11,681 | Appraised Value/ | Appraisals and/or sales | ||||||||||||||||||
Discounted Cash | of comparable properties/ | 0.00%-92.12% | |||||||||||||||||||
Flows | Independent quotes | -49.91% | |||||||||||||||||||
Consumer | 164 | Appraised Value/ | Appraisals and/or sales | ||||||||||||||||||
Discounted Cash | of comparable properties/ | 0.00%-35.41% | |||||||||||||||||||
Flows | Independent quotes | -6.20% | |||||||||||||||||||
Other real estate owned | 19,501 | Appraised Value/ | Appraisals and/or sales | ||||||||||||||||||
Discounted Cash | of comparable properties/ | 0.00%-50.00% | |||||||||||||||||||
Flows | Independent quotes | -6.27% | |||||||||||||||||||
The following table presents quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at December 31, 2013. | |||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
December 31, | Valuation | Unobservable | Range | ||||||||||||||||||
2013 | Techniques | Inputs | (Weighted Avg) | ||||||||||||||||||
Impaired loans: | |||||||||||||||||||||
Commercial | $ | 3,728 | Appraised Value/ | Appraisals and/or sales | |||||||||||||||||
Discounted Cash | of comparable properties/ | 0.00%-76.50% | |||||||||||||||||||
Flows | Independent quotes | -3.36% | |||||||||||||||||||
Commercial real estate | 27,085 | Appraised Value/ | Appraisals and/or sales | ||||||||||||||||||
Discounted Cash | of comparable properties/ | 0.00%-88.29% | |||||||||||||||||||
Flows | Independent quotes | -16.51% | |||||||||||||||||||
Residential | 10,865 | Appraised Value/ | Appraisals and/or sales | ||||||||||||||||||
Discounted Cash | of comparable properties/ | 0.00%-90.23% | |||||||||||||||||||
Flows | Independent quotes | -23.60% | |||||||||||||||||||
Consumer | 205 | Appraised Value/ | Appraisals and/or sales | ||||||||||||||||||
Discounted Cash | of comparable properties/ | 0.00%-38.68% | |||||||||||||||||||
Flows | Independent quotes | -14.67% | |||||||||||||||||||
Other real estate owned | 24,972 | Appraised Value/ | Appraisals and/or sales | ||||||||||||||||||
Discounted Cash | of comparable properties/ | 0.00%-50.00% | |||||||||||||||||||
Flows | Independent quotes | -6.27% | |||||||||||||||||||
The following table presents quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at December 31, 2012. | |||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
December 31, | Valuation | Unobservable | Range | ||||||||||||||||||
2012 | Techniques | Inputs | (Weighted Avg) | ||||||||||||||||||
Impaired loans: | |||||||||||||||||||||
Commercial | $ | 4,124 | Appraised Value/ | Appraisals and/or sales | |||||||||||||||||
Discounted Cash | of comparable properties/ | 0.00%-100.00% | |||||||||||||||||||
Flows | Independent quotes | -13.12% | |||||||||||||||||||
Commercial real estate | 41,709 | Appraised Value/ | Appraisals and/or sales | ||||||||||||||||||
Discounted Cash | of comparable properties/ | 0.00%-73.91% | |||||||||||||||||||
Flows | Independent quotes | -19.22% | |||||||||||||||||||
Residential | 9,943 | Appraised Value/ | Appraisals and/or sales | ||||||||||||||||||
Discounted Cash | of comparable properties/ | 0.00%-89.26% | |||||||||||||||||||
Flows | Independent quotes | -20.80% | |||||||||||||||||||
Consumer | 224 | Appraised Value/ | Appraisals and/or sales | ||||||||||||||||||
Discounted Cash | of comparable properties/ | 0.00%-25.11% | |||||||||||||||||||
Flows | Independent quotes | -7.38% | |||||||||||||||||||
Other real estate owned | 19,464 | Appraised Value/ | Appraisals and/or sales | ||||||||||||||||||
Discounted Cash | of comparable properties/ | 0.00%-50.00% | |||||||||||||||||||
Flows | Independent quotes | -6.27% |
HCSB_FINANCIAL_CORPORATION_PAR1
HCSB FINANCIAL CORPORATION (PARENT COMPANY ONLY) (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Hcsb Financial Corporation Parent Company Only Tables | |||||||||||||
Schedule of condensed Balace Sheet of the parent company | Condensed Balance Sheets | ||||||||||||
December 31, | |||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||
Assets | |||||||||||||
Cash | $ | 26 | $ | 59 | $ | 86 | |||||||
Investment in banking subsidiary | 10,066 | 3,516 | 7,890 | ||||||||||
Investment in trust | 186 | 186 | 186 | ||||||||||
Other assets | 123 | 136 | 149 | ||||||||||
Total assets | $ | 10,401 | $ | 3,897 | $ | 8,311 | |||||||
Liabilities and shareholders’ equity | |||||||||||||
Accrued interest payable-subordinated debentures | $ | 3,685 | $ | 2,553 | $ | 1,472 | |||||||
Accrued interest payable-junior subordinated debentures | 714 | 536 | 351 | ||||||||||
Subordinated debentures | 11,062 | 11,062 | 12,062 | ||||||||||
Junior subordinated debentures | 6,186 | 6,186 | 6,186 | ||||||||||
Other liabilities | 1 | 2 | 2 | ||||||||||
Total liabilities | 21,648 | 20,339 | 20,073 | ||||||||||
Shareholders’ deficit | (11,247 | ) | (16,442 | ) | (11,762 | ) | |||||||
Total liabilities and shareholder’s deficit | $ | 10,401 | $ | 3,897 | $ | 8,311 | |||||||
Schedule of Condensed Statements of Operations | Condensed Statements of Operations | ||||||||||||
Years ended December 31, | |||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||
Income | |||||||||||||
Forgiveness of debt | $ | — | $ | 1,000 | $ | — | |||||||
Expenses | |||||||||||||
Interest expense on subordinated debentures | 1,132 | 1,081 | 1,213 | ||||||||||
Interest expense on junior subordinated debentures | 178 | 186 | 177 | ||||||||||
Other expenses | 104 | 39 | 237 | ||||||||||
1,414 | 1,306 | 1,627 | |||||||||||
Loss before income taxes, and equity in undistributed gains (losses) of banking subsidiary | (1,414 | ) | (306 | ) | (1,627 | ) | |||||||
Income tax expense | — | — | — | ||||||||||
Equity in undistributed gains (losses) of banking subsidiary | 1,123 | 2,069 | (7,900 | ) | |||||||||
Net income (loss) | $ | (291 | ) | $ | 1,763 | $ | (9,527 | ) | |||||
Schedule of cash flows for the parent company | Condensed Statements of Cash Flows | ||||||||||||
Years ended December 31, | |||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||
Cash flows from operating activities: | |||||||||||||
Net income (loss) | $ | (291 | ) | $ | 1,763 | $ | (9,527 | ) | |||||
Adjustments to reconcile net income (loss) to net cash used by operating activities: | |||||||||||||
Forgiveness of debt | — | (1,000 | ) | — | |||||||||
Equity in undistributed (gains) losses of banking subsidiary | (1,123 | ) | (2,069 | ) | 7,900 | ||||||||
Decrease in other assets | 13 | 13 | 236 | ||||||||||
Increase in accrued interest payable | 1,310 | 1,266 | 1,386 | ||||||||||
Net cash used by operating activities | (91 | ) | (27 | ) | (5 | ) | |||||||
Cash flows from financing activities: | |||||||||||||
Sale of common stock | 58 | — | — | ||||||||||
Net cash provided by financing activities | 58 | — | — | ||||||||||
Net decrease in cash | (33 | ) | (27 | ) | (5 | ) | |||||||
Cash and cash equivalents, beginning of year | 59 | 86 | 91 | ||||||||||
Cash and cash equivalents, end of year | $ | 26 | $ | 59 | $ | 86 |
ORGANIZATION_AND_SIGNIFICANT_A2
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Mar. 06, 2010 |
Federal Home Loan Bank Stock | $1,200 | $1,600 | $1,800 | |
Written down value of Investment in the holding company of a community bank | 0 | |||
Orignal Purchase price of Investment | 25 | |||
Investment in Trust | 186 | 186 | 186 | |
Total Loans | 229,756 | 246,981 | 288,084 | |
Advertising Expense | 16 | 19 | 22 | |
Preferred Stock [Member] | ||||
Aggregate purchase price of Fixed Rate Cumulative Perpetual Preferred Stock, Series T | 12,900 | |||
Building [Member] | ||||
Estimated Useful Life of asset (in years) | 40 years | |||
Furniture and Fixtures [Member] | Minimum [Member] | ||||
Estimated Useful Life of asset (in years) | 3 years | |||
Furniture and Fixtures [Member] | Maximum [Member] | ||||
Estimated Useful Life of asset (in years) | 25 years | |||
Credit Concentration Risk [Member] | Residential And Commercial Real Estate Loans [Member] | ||||
Total Loans | 198,400 | |||
Concentration Risk (as a percentage) | 84.24% | |||
Credit Concentration Risk [Member] | Commercial and Industrial Non-Real Estate loans [Member] | ||||
Total Loans | $30,900 | |||
Concentration Risk (as a percentage) | 13.12% |
REGULATORY_MATTERS_AND_FUTURE_2
REGULATORY MATTERS AND FUTURE OPERATIONS (Details) (USD $) | 12 Months Ended | |||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jan. 31, 2015 | Feb. 09, 2013 | Aug. 11, 2012 | Mar. 12, 2012 | Jul. 10, 2011 |
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ||||||||
Nonperforming assets | $31,300 | $35,600 | $42,200 | |||||
Percentage of nonperforming assets | 7.43% | 8.19% | 9.00% | |||||
Net loan charge-offs | $4,700 | $3,200 | $17,600 | |||||
Consent Order Requirements [Member] | ||||||||
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ||||||||
Charge-off or collect assets classified as "Doubtful" | 50.00% | |||||||
Percentage of Reduce assets classified in accordance with the approved plan | 75.00% | 65.00% | ||||||
Percentage of assets reduced after approval plan | 74.70% | 75.90% | ||||||
Consent Order Requirements [Member] | Minimum [Member] | ||||||||
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ||||||||
Total risk based capital of risk-weighted assets (as a percentage) | 10.00% | |||||||
Tier 1 capital of total assets (as a percentage) | 8.00% |
REGULATORY_MATTERS_AND_FUTURE_3
REGULATORY MATTERS AND FUTURE OPERATIONS (Details Narrative) (USD $) | 1 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Feb. 28, 2011 | Dec. 31, 2014 |
Aggregate principal amount | $6,000 | |
Trust Preferred Securities [Mermber] | ||
Description of deferring interest payments | Deferring interest payments on its trust preferred securities since March 2011 and has deferred interest payments for 16 consecutive quarters. The Company is allowed to defer payments for up to 20 consecutive quarterly periods, although interest will also accrue and compound quarterly from the date such deferred interest would have been payable were it not for the extension period. All of the deferred interest, including interest accrued on such deferred interest, is due and payable at the end of the applicable deferral period, which is in March 2016. | |
Accrued interest | 714 | |
Aggregate principal amount | $6,000 |
INVESTMENT_SECURITIES_Details
INVESTMENT SECURITIES (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | $107,519 | $100,875 | $77,150 |
Gross Unrealized Gains | 464 | 280 | 695 |
Gross Unrealized Losses | -1,309 | -6,553 | -525 |
Estimated Fair Value | 106,674 | 94,602 | 77,320 |
Government Sponsored Enterprises Debt Securities [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | 40,952 | 60,628 | 27,024 |
Gross Unrealized Gains | 7 | 111 | |
Gross Unrealized Losses | -877 | -5,553 | -27 |
Estimated Fair Value | 40,082 | 55,075 | 27,108 |
Mortgage Backed Securities [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | 65,328 | 37,731 | 44,557 |
Gross Unrealized Gains | 447 | 167 | 391 |
Gross Unrealized Losses | -427 | -864 | -486 |
Estimated Fair Value | 65,348 | 37,034 | 44,462 |
Obligations Of State And Local Governments [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | 1,239 | 2,516 | 5,569 |
Gross Unrealized Gains | 10 | 113 | 193 |
Gross Unrealized Losses | -5 | -136 | -12 |
Estimated Fair Value | $1,244 | $2,493 | $5,750 |
INVESTMENT_SECURITIES_Details_
INVESTMENT SECURITIES (Details 2) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |||
Securities Available-For-Sale Amortized Cost [Abstract] | |||
Due after one year but within five years | $1,492 | ||
Due after five years but within ten years | 16,364 | ||
Due after ten years | 89,663 | ||
Amortized Cost | 107,519 | 100,875 | 77,150 |
Securities Available-For-Sale Fair Value [Abstract] | |||
Due after one year but within five years | 1,500 | ||
Due after five years but within ten years | 16,308 | ||
Due after ten years | 88,866 | ||
Estimated Fair Value | $106,674 | $94,602 | $77,320 |
INVESTMENT_SECURITIES_Details_1
INVESTMENT SECURITIES (Details 3) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Schedule of Available-for-sale Securities [Line Items] | |||
Securities Available-for-Sale, Less than twelve months, Fair Value | $22,024 | $65,689 | $16,519 |
Securities Available-for-Sale, Less than twelve months, Unrealized losses | -244 | -4,971 | -419 |
Securities Available-for-Sale, Twelve months or more, Fair value | 46,157 | 15,705 | 5,299 |
Securities Available-for-Sale, Twelve months or more, Unrealized losses | -1,065 | -1,582 | -106 |
Securities Available-for-Sale, Total, Fair Value | 68,181 | 81,394 | 21,818 |
Securities Available-for-Sale, Total, Unrealized losses | -1,309 | -6,553 | -525 |
Government Sponsored Enterprises Debt Securities [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Securities Available-for-Sale, Less than twelve months, Fair Value | 47,311 | 6,003 | |
Securities Available-for-Sale, Less than twelve months, Unrealized losses | -4,433 | -27 | |
Securities Available-for-Sale, Twelve months or more, Fair value | 38,076 | 7,764 | |
Securities Available-for-Sale, Twelve months or more, Unrealized losses | -877 | -1,120 | |
Securities Available-for-Sale, Total, Fair Value | 38,076 | 55,075 | 6,003 |
Securities Available-for-Sale, Total, Unrealized losses | -877 | -5,553 | -27 |
Mortgage Backed Securities [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Securities Available-for-Sale, Less than twelve months, Fair Value | 22,024 | 17,826 | 9,881 |
Securities Available-for-Sale, Less than twelve months, Unrealized losses | -244 | -471 | -380 |
Securities Available-for-Sale, Twelve months or more, Fair value | 7,458 | 7,373 | 5,299 |
Securities Available-for-Sale, Twelve months or more, Unrealized losses | -183 | -393 | -106 |
Securities Available-for-Sale, Total, Fair Value | 29,482 | 25,199 | 15,180 |
Securities Available-for-Sale, Total, Unrealized losses | -427 | -864 | -486 |
Obligations Of State And Local Governments [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Securities Available-for-Sale, Less than twelve months, Fair Value | 552 | 635 | |
Securities Available-for-Sale, Less than twelve months, Unrealized losses | -67 | -12 | |
Securities Available-for-Sale, Twelve months or more, Fair value | 623 | 568 | |
Securities Available-for-Sale, Twelve months or more, Unrealized losses | -5 | -69 | |
Securities Available-for-Sale, Total, Fair Value | 623 | 1,120 | 635 |
Securities Available-for-Sale, Total, Unrealized losses | ($5) | ($136) | ($12) |
INVESTMENT_SECURITIES_Details_2
INVESTMENT SECURITIES (Details 4) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Investments, Debt and Equity Securities [Abstract] | |||
Gross realized gains | $269 | $298 | $1,643 |
Gross realized losses | -68 | ||
Net gain | $201 | $298 | $1,643 |
INVESTMENT_SECURITIES_Details_3
INVESTMENT SECURITIES (Details Narrative) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Book value of investment securities pledged to secure deposits | $42,800 | $40,100 | $30,400 |
Market value of investment securities pledged to secure deposits | 42,200 | 36,800 | 30,600 |
Proceeds from sales of securities available-for-sale | $32,823 | $25,886 | $46,728 |
Government Sponsored Enterprises Debt Securities [Member] | |||
Number of individual securities in an unrealized loss position for more than twelve months | 17 | ||
Mortgage Backed Securities [Member] | |||
Number of individual securities in an unrealized loss position for more than twelve months | 6 | ||
Obligations Of State And Local Governments [Member] | |||
Number of individual securities in an unrealized loss position for more than twelve months | 1 |
LOAN_PORTFOLIO_Details
LOAN PORTFOLIO (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |||
Total Loans Receivable | $235,543 | $256,424 | $302,234 |
Residential Portfolio Segment [Member] | |||
Total Loans Receivable | 84,568 | 84,335 | 91,606 |
Commercial Real Estate Portfolio Segment [Member] | |||
Total Loans Receivable | 113,852 | 130,450 | 161,335 |
Commercial Loan [Member] | |||
Total Loans Receivable | 30,894 | 33,711 | 41,200 |
Consumer Loan [Member] | |||
Total Loans Receivable | $6,229 | $7,928 | $8,093 |
LOAN_PORTFOLIO_Details_2
LOAN PORTFOLIO (Details 2) (New Directors/Executive Officers [Member], USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
New Directors/Executive Officers [Member] | |||
Loan transactions with related parties | |||
Beginning balance | $3,088 | $2,867 | $4,325 |
New loans and advances | 1,785 | 1,195 | 1,645 |
Loan Payments | -1,016 | -974 | -3,103 |
Ending balance | $3,857 | $3,088 | $2,867 |
LOAN_PORTFOLIO_Details_3
LOAN PORTFOLIO (Details 3) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Allowances for loan losses, Beginning balance | $9,443 | $14,150 | $21,178 |
Allowances for loan losses, Charge-offs | -7,031 | -7,476 | -18,541 |
Allowances for loan losses, Recoveries | 2,314 | 4,266 | 983 |
Allowances for loan losses, Provisions | 1,061 | -1,497 | 10,530 |
Allowances for loan losses, Ending balance | 5,787 | 9,443 | 14,150 |
Allowances for loan losses, Individually evaluated for impairment, Ending Balances | 1,907 | 3,796 | 5,583 |
Allowances for loan losses, Collectively evaluated for impairment, Ending Balances | 3,880 | 5,647 | 8,567 |
Loans receivable | 235,543 | 256,424 | 302,234 |
Loans receivable, Individually evaluated for impairment | 41,383 | 45,679 | 61,583 |
Loans receivable, Collectively evaluated for impairment | 194,160 | 210,745 | 240,651 |
Commercial Loan [Member] | |||
Allowances for loan losses, Beginning balance | 1,020 | 1,982 | 3,239 |
Allowances for loan losses, Charge-offs | -1,068 | -1,691 | -3,242 |
Allowances for loan losses, Recoveries | 549 | 724 | 284 |
Allowances for loan losses, Provisions | 96 | 5 | 1,701 |
Allowances for loan losses, Ending balance | 597 | 1,020 | 1,982 |
Allowances for loan losses, Individually evaluated for impairment, Ending Balances | 151 | 218 | 833 |
Allowances for loan losses, Collectively evaluated for impairment, Ending Balances | 446 | 802 | 1,149 |
Loans receivable | 30,894 | 33,711 | 41,200 |
Loans receivable, Individually evaluated for impairment | 3,644 | 3,946 | 4,957 |
Loans receivable, Collectively evaluated for impairment | 27,250 | 29,765 | 36,243 |
Commercial Real Estate Portfolio Segment [Member] | |||
Allowances for loan losses, Beginning balance | 5,312 | 7,587 | 10,240 |
Allowances for loan losses, Charge-offs | -4,646 | -3,927 | -10,045 |
Allowances for loan losses, Recoveries | 1,117 | 2,230 | 331 |
Allowances for loan losses, Provisions | 1,808 | -578 | 7,061 |
Allowances for loan losses, Ending balance | 3,591 | 5,312 | 7,587 |
Allowances for loan losses, Individually evaluated for impairment, Ending Balances | 1,008 | 2,455 | 3,499 |
Allowances for loan losses, Collectively evaluated for impairment, Ending Balances | 2,583 | 2,857 | 4,088 |
Loans receivable | 113,852 | 130,450 | 161,335 |
Loans receivable, Individually evaluated for impairment | 25,146 | 29,540 | 45,208 |
Loans receivable, Collectively evaluated for impairment | 88,706 | 100,910 | 116,127 |
Consumer Loan [Member] | |||
Allowances for loan losses, Beginning balance | 144 | 124 | 103 |
Allowances for loan losses, Charge-offs | -343 | -217 | -106 |
Allowances for loan losses, Recoveries | 38 | 48 | 12 |
Allowances for loan losses, Provisions | 346 | 189 | 115 |
Allowances for loan losses, Ending balance | 185 | 144 | 124 |
Allowances for loan losses, Individually evaluated for impairment, Ending Balances | 11 | 18 | 15 |
Allowances for loan losses, Collectively evaluated for impairment, Ending Balances | 174 | 126 | 109 |
Loans receivable | 6,229 | 7,928 | 8,093 |
Loans receivable, Individually evaluated for impairment | 175 | 223 | 239 |
Loans receivable, Collectively evaluated for impairment | 6,054 | 7,705 | 7,854 |
Residential Portfolio Segment [Member] | |||
Allowances for loan losses, Beginning balance | 2,967 | 4,457 | 7,596 |
Allowances for loan losses, Charge-offs | -974 | -1,641 | -5,148 |
Allowances for loan losses, Recoveries | 610 | 1,264 | 356 |
Allowances for loan losses, Provisions | -1,189 | -1,113 | 1,653 |
Allowances for loan losses, Ending balance | 1,414 | 2,967 | 4,457 |
Allowances for loan losses, Individually evaluated for impairment, Ending Balances | 737 | 1,105 | 1,236 |
Allowances for loan losses, Collectively evaluated for impairment, Ending Balances | 677 | 1,862 | 3,221 |
Loans receivable | 84,568 | 84,335 | 91,606 |
Loans receivable, Individually evaluated for impairment | 12,418 | 11,970 | 11,179 |
Loans receivable, Collectively evaluated for impairment | $72,150 | $72,365 | $80,427 |
LOAN_PORTFOLIO_Details_4
LOAN PORTFOLIO (Details 4) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
30-59 Days Past Due | $3,655 | $4,539 | $9,970 |
60-89 Days Past Due | 688 | 1,231 | 4,348 |
90 + Days Past Due | 5,198 | 7,480 | 22,283 |
Total Past Due | 9,541 | 13,250 | 36,601 |
Current | 226,002 | 243,174 | 265,633 |
Total Loans Receivable | 235,543 | 256,424 | 302,234 |
Nonaccrual Loans | 11,661 | 10,631 | 22,567 |
Commercial Loan [Member] | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
30-59 Days Past Due | 282 | 771 | 767 |
60-89 Days Past Due | 27 | 146 | 730 |
90 + Days Past Due | 407 | 956 | |
Total Past Due | 309 | 1,324 | 2,453 |
Current | 30,585 | 32,387 | 38,747 |
Total Loans Receivable | 30,894 | 33,711 | 41,200 |
Nonaccrual Loans | 633 | 430 | 1,197 |
Commercial Real Estate Construction Financing Receivable [Member] | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
30-59 Days Past Due | 199 | 215 | 2,350 |
60-89 Days Past Due | 33 | 882 | |
90 + Days Past Due | 364 | 2,243 | 15,189 |
Total Past Due | 563 | 2,491 | 18,421 |
Current | 30,907 | 36,408 | 39,853 |
Total Loans Receivable | 31,470 | 38,899 | 58,274 |
Nonaccrual Loans | 4,464 | 4,208 | 15,189 |
Commercial Real Estate Other Receivable [Member] | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
30-59 Days Past Due | 493 | 1,156 | 3,626 |
60-89 Days Past Due | 283 | 1,903 | |
90 + Days Past Due | 2,023 | 3,414 | 4,170 |
Total Past Due | 2,799 | 4,570 | 9,699 |
Current | 79,583 | 86,981 | 93,362 |
Total Loans Receivable | 82,382 | 91,551 | 103,061 |
Nonaccrual Loans | 2,643 | 4,017 | 4,129 |
Residential Portfolio Segment [Member] | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
30-59 Days Past Due | 2,576 | 2,188 | 3,100 |
60-89 Days Past Due | 372 | 830 | 691 |
90 + Days Past Due | 2,810 | 1,381 | 1,846 |
Total Past Due | 5,758 | 4,399 | 5,637 |
Current | 78,810 | 79,936 | 85,969 |
Total Loans Receivable | 84,568 | 84,335 | 91,606 |
Nonaccrual Loans | 3,917 | 1,936 | 1,919 |
Consumer Other Financing Receivable [Member] | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
30-59 Days Past Due | 101 | 191 | 120 |
60-89 Days Past Due | 2 | 219 | 132 |
90 + Days Past Due | 35 | 118 | |
Total Past Due | 103 | 445 | 370 |
Current | 5,449 | 6,710 | 6,896 |
Total Loans Receivable | 5,552 | 7,155 | 7,266 |
Nonaccrual Loans | 40 | 129 | |
Revolving Credit Facilities [Member] | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
30-59 Days Past Due | 4 | 18 | 7 |
60-89 Days Past Due | 4 | 3 | 10 |
90 + Days Past Due | 1 | 4 | |
Total Past Due | 9 | 21 | 21 |
Current | 668 | 752 | 806 |
Total Loans Receivable | 677 | 773 | 827 |
Nonaccrual Loans | $4 | $4 |
LOAN_PORTFOLIO_Details_5
LOAN PORTFOLIO (Details 5) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |||
Total loans | $235,543 | $256,424 | $302,234 |
Grade 1 - Minimal [Member] | |||
Total loans | 1,624 | 2,139 | 2,167 |
Grade 2 - Modest [Member] | |||
Total loans | 3,152 | 3,313 | 5,542 |
Grade 3 - Average [Member] | |||
Total loans | 14,330 | 15,545 | 14,701 |
Grade 4 - Satisfactory [Member] | |||
Total loans | 137,589 | 143,458 | 142,205 |
Grade 5 - Watch [Member] | |||
Total loans | 23,869 | 27,646 | 50,926 |
Grade 6 - Special Mention [Member] | |||
Total loans | 9,319 | 17,076 | 22,197 |
Grade 7 - Substandard [Member] | |||
Total loans | 45,660 | 47,247 | 63,053 |
Grade 8 - Doubtful [Member] | |||
Total loans | 1,443 | ||
Grade 9 - Loss [Member] | |||
Total loans | |||
Commercial Loan [Member] | |||
Total loans | 30,894 | 33,711 | 41,200 |
Commercial Loan [Member] | Grade 1 - Minimal [Member] | |||
Total loans | 1,093 | 1,364 | 1,345 |
Commercial Loan [Member] | Grade 2 - Modest [Member] | |||
Total loans | 1,164 | 314 | 546 |
Commercial Loan [Member] | Grade 3 - Average [Member] | |||
Total loans | 3,868 | 4,782 | 4,508 |
Commercial Loan [Member] | Grade 4 - Satisfactory [Member] | |||
Total loans | 16,367 | 17,092 | 18,554 |
Commercial Loan [Member] | Grade 5 - Watch [Member] | |||
Total loans | 2,905 | 3,204 | 6,997 |
Commercial Loan [Member] | Grade 6 - Special Mention [Member] | |||
Total loans | 1,191 | 1,788 | 2,603 |
Commercial Loan [Member] | Grade 7 - Substandard [Member] | |||
Total loans | 4,306 | 5,167 | 6,544 |
Commercial Loan [Member] | Grade 8 - Doubtful [Member] | |||
Total loans | 103 | ||
Commercial Loan [Member] | Grade 9 - Loss [Member] | |||
Total loans | |||
Commercial Real Estate Portfolio Segment [Member] | |||
Total loans | 113,852 | 130,450 | 161,335 |
Commercial Real Estate Portfolio Segment [Member] | Grade 1 - Minimal [Member] | |||
Total loans | |||
Commercial Real Estate Portfolio Segment [Member] | Grade 2 - Modest [Member] | |||
Total loans | 679 | 1,066 | 2,412 |
Commercial Real Estate Portfolio Segment [Member] | Grade 3 - Average [Member] | |||
Total loans | 5,618 | 6,412 | 5,871 |
Commercial Real Estate Portfolio Segment [Member] | Grade 4 - Satisfactory [Member] | |||
Total loans | 59,536 | 67,453 | 63,658 |
Commercial Real Estate Portfolio Segment [Member] | Grade 5 - Watch [Member] | |||
Total loans | 16,091 | 17,288 | 32,640 |
Commercial Real Estate Portfolio Segment [Member] | Grade 6 - Special Mention [Member] | |||
Total loans | 4,249 | 10,028 | 10,893 |
Commercial Real Estate Portfolio Segment [Member] | Grade 7 - Substandard [Member] | |||
Total loans | 27,679 | 28,203 | 44,521 |
Commercial Real Estate Portfolio Segment [Member] | Grade 8 - Doubtful [Member] | |||
Total loans | 1,340 | ||
Commercial Real Estate Portfolio Segment [Member] | Grade 9 - Loss [Member] | |||
Total loans | |||
Consumer Loan [Member] | |||
Total loans | 6,229 | 7,928 | 8,093 |
Consumer Loan [Member] | Grade 1 - Minimal [Member] | |||
Total loans | 531 | 775 | 822 |
Consumer Loan [Member] | Grade 2 - Modest [Member] | |||
Total loans | 93 | 98 | 67 |
Consumer Loan [Member] | Grade 3 - Average [Member] | |||
Total loans | 156 | 914 | 228 |
Consumer Loan [Member] | Grade 4 - Satisfactory [Member] | |||
Total loans | 4,928 | 5,045 | 6,038 |
Consumer Loan [Member] | Grade 5 - Watch [Member] | |||
Total loans | 178 | 221 | 366 |
Consumer Loan [Member] | Grade 6 - Special Mention [Member] | |||
Total loans | 132 | 133 | 258 |
Consumer Loan [Member] | Grade 7 - Substandard [Member] | |||
Total loans | 211 | 742 | 314 |
Consumer Loan [Member] | Grade 8 - Doubtful [Member] | |||
Total loans | |||
Consumer Loan [Member] | Grade 9 - Loss [Member] | |||
Total loans | |||
Residential Portfolio Segment [Member] | |||
Total loans | 84,568 | 84,335 | 91,606 |
Residential Portfolio Segment [Member] | Grade 1 - Minimal [Member] | |||
Total loans | |||
Residential Portfolio Segment [Member] | Grade 2 - Modest [Member] | |||
Total loans | 1,216 | 1,835 | 2,517 |
Residential Portfolio Segment [Member] | Grade 3 - Average [Member] | |||
Total loans | 4,688 | 3,437 | 4,094 |
Residential Portfolio Segment [Member] | Grade 4 - Satisfactory [Member] | |||
Total loans | 56,758 | 53,868 | 53,955 |
Residential Portfolio Segment [Member] | Grade 5 - Watch [Member] | |||
Total loans | 4,695 | 6,933 | 10,923 |
Residential Portfolio Segment [Member] | Grade 6 - Special Mention [Member] | |||
Total loans | 3,747 | 5,127 | 8,443 |
Residential Portfolio Segment [Member] | Grade 7 - Substandard [Member] | |||
Total loans | 13,464 | 13,135 | 11,674 |
Residential Portfolio Segment [Member] | Grade 8 - Doubtful [Member] | |||
Total loans | |||
Residential Portfolio Segment [Member] | Grade 9 - Loss [Member] | |||
Total loans |
LOAN_PORTFOLIO_Details_Narrati
LOAN PORTFOLIO (Details Narrative) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Total loans | 235,543 | $256,424 | $302,234 |
Classified loans | 45,700 | ||
Classified loans collateralized by real estate | 41,100 | ||
Recorded investment in impaired loans | 28,200 | 26,311 | 37,707 |
TDR impaired loans | 33,166 | 31,453 | 44,885 |
Pass [Member] | |||
Total loans | 156,700 | ||
Pass [Member] | Concentration of Loan Portfolio [Member] | |||
Concentration of Loan (as a percentage) | 66.50% | ||
Watch And Special Mention [Member] | |||
Total loans | 33,200 |
LOAN_PORTFOLIO_Details_6
LOAN PORTFOLIO (Details 6) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Recorded-Investment | $26,990 | $19,368 | $23,876 |
Unpaid Principal Balance | 33,679 | 23,154 | 30,136 |
Average Recorded Investment | 31,309 | 19,857 | 31,538 |
Interest Income Recognized | 1,433 | 869 | 875 |
Recorded-Investment | 14,393 | ||
Unpaid Principal Balance | 14,597 | 26,851 | 39,796 |
Related Allowance | 1,907 | 3,796 | 5,583 |
Average Recorded Investment | 14,691 | 26,774 | 33,283 |
Interest Income Recognized | 642 | 967 | 1,057 |
Recorded-Investment | 41,383 | 45,679 | 61,583 |
Unpaid Principal Balance | 48,276 | 50,005 | 69,932 |
Average Recorded Investment | 46,000 | 46,631 | 64,821 |
Interest Income Recognized | 2,075 | 1,836 | 1,932 |
Commercial Loan [Member] | |||
Recorded-Investment | 1,852 | 1,464 | 1,347 |
Unpaid Principal Balance | 2,678 | 1,657 | 1,367 |
Average Recorded Investment | 2,649 | 1,621 | 1,660 |
Interest Income Recognized | 79 | 50 | 45 |
Recorded-Investment | 1,792 | 2,482 | 3,610 |
Unpaid Principal Balance | 1,792 | 2,482 | 3,719 |
Related Allowance | 151 | 218 | 833 |
Average Recorded Investment | 1,892 | 2,556 | 3,521 |
Interest Income Recognized | 81 | 106 | 143 |
Recorded-Investment | 3,644 | 3,946 | 4,957 |
Unpaid Principal Balance | 4,470 | 4,139 | 5,086 |
Average Recorded Investment | 4,541 | 4,177 | 5,181 |
Interest Income Recognized | 160 | 156 | 188 |
Commercial Real Estate Portfolio Segment [Member] | |||
Recorded-Investment | 19,156 | 14,120 | 18,926 |
Unpaid Principal Balance | 24,441 | 17,052 | 24,381 |
Average Recorded Investment | 22,377 | 14,275 | 26,255 |
Interest Income Recognized | 1,083 | 606 | 708 |
Recorded-Investment | 5,990 | 15,420 | 26,282 |
Unpaid Principal Balance | 6,194 | 15,747 | 27,904 |
Related Allowance | 1,008 | 2,455 | 3,499 |
Average Recorded Investment | 6,143 | 15,674 | 21,704 |
Interest Income Recognized | 282 | 469 | 542 |
Recorded-Investment | 25,146 | 29,540 | 45,208 |
Unpaid Principal Balance | 30,635 | 32,799 | 52,285 |
Average Recorded Investment | 28,520 | 29,949 | 47,959 |
Interest Income Recognized | 1,365 | 1,075 | 1,250 |
Residential Portfolio Segment [Member] | |||
Recorded-Investment | 5,950 | 3,729 | 3,504 |
Unpaid Principal Balance | 6,528 | 4,366 | 4,288 |
Average Recorded Investment | 6,249 | 3,901 | 3,523 |
Interest Income Recognized | 268 | 206 | 118 |
Recorded-Investment | 6,468 | 8,241 | 7,675 |
Unpaid Principal Balance | 6,468 | 8,454 | 8,033 |
Related Allowance | 737 | 1,105 | 1,236 |
Average Recorded Investment | 6,506 | 8,381 | 7,917 |
Interest Income Recognized | 271 | 384 | 369 |
Recorded-Investment | 12,418 | 11,970 | 11,179 |
Unpaid Principal Balance | 12,996 | 12,820 | 12,321 |
Average Recorded Investment | 12,755 | 12,282 | 11,440 |
Interest Income Recognized | 539 | 590 | 487 |
Consumer Loan [Member] | |||
Recorded-Investment | 32 | 55 | 99 |
Unpaid Principal Balance | 32 | 79 | 100 |
Average Recorded Investment | 34 | 60 | 100 |
Interest Income Recognized | 3 | 7 | 4 |
Recorded-Investment | 143 | 168 | 140 |
Unpaid Principal Balance | 143 | 168 | 140 |
Related Allowance | 11 | 18 | 15 |
Average Recorded Investment | 150 | 163 | 141 |
Interest Income Recognized | 8 | 8 | 3 |
Recorded-Investment | 175 | 223 | 239 |
Unpaid Principal Balance | 175 | 247 | 240 |
Average Recorded Investment | 184 | 223 | 241 |
Interest Income Recognized | $11 | $15 | $7 |
LOAN_PORTFOLIO_Details_7
LOAN PORTFOLIO (Details 7) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |||
Financing Receivable, Modifications [Line Items] | |||
Restructured debt balances | $33,166 | $31,453 | $44,885 |
Financial Receivable Modifications Nonperforming [Member] | |||
Financing Receivable, Modifications [Line Items] | |||
Restructured debt balances | 5,013 | 6,443 | 14,891 |
Financial Receivable Modifications Performing [Member] | |||
Financing Receivable, Modifications [Line Items] | |||
Restructured debt balances | 28,153 | 25,010 | 29,994 |
Financial Receivable Modifications Performing [Member] | Commercial Loan [Member] | |||
Financing Receivable, Modifications [Line Items] | |||
Restructured debt balances | 2,942 | 3,496 | 3,611 |
Financial Receivable Modifications Performing [Member] | Commercial Real Estate [Member] | |||
Financing Receivable, Modifications [Line Items] | |||
Restructured debt balances | 17,499 | 14,673 | 20,343 |
Financial Receivable Modifications Performing [Member] | Residential Portfolio Segment [Member] | |||
Financing Receivable, Modifications [Line Items] | |||
Restructured debt balances | 7,537 | 6,690 | 5,967 |
Financial Receivable Modifications Performing [Member] | Consumer Loan [Member] | |||
Financing Receivable, Modifications [Line Items] | |||
Restructured debt balances | $175 | $151 | $73 |
LOAN_PORTFOLIO_Details_8
LOAN PORTFOLIO (Details 8) (Troubled Debt Restructuring [Member], USD $) | 12 Months Ended | ||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | ||
Number | Number | Number | |||
Tdrs That Are In Compliance With Terms Of Agreement [Member] | |||||
Number of contracts | 51 | 27 | 26 | ||
Pre- Modification Outstanding Recorded Investment | $9,673 | $3,430 | $12,264 | ||
Post-Modification Outstanding Recorded Investment | 9,315 | 3,430 | 12,264 | ||
Tdrs That Are In Compliance With Terms Of Agreement [Member] | Commercial Real Estate [Member] | |||||
Number of contracts | 25 | 4 | 7 | ||
Pre- Modification Outstanding Recorded Investment | 6,016 | 1,309 | 9,326 | ||
Post-Modification Outstanding Recorded Investment | 5,837 | 1,309 | 9,326 | ||
Tdrs That Are In Compliance With Terms Of Agreement [Member] | Residential Portfolio Segment [Member] | |||||
Number of contracts | 19 | 6 | 4 | ||
Pre- Modification Outstanding Recorded Investment | 3,171 | 1,401 | 2,182 | ||
Post-Modification Outstanding Recorded Investment | 2,992 | 1,401 | 2,182 | ||
Tdrs That Are In Compliance With Terms Of Agreement [Member] | Commercial Loan [Member] | |||||
Number of contracts | 5 | 12 | 15 | ||
Pre- Modification Outstanding Recorded Investment | 455 | 636 | 756 | ||
Post-Modification Outstanding Recorded Investment | 455 | 636 | 756 | ||
Tdrs That Are In Compliance With Terms Of Agreement [Member] | Consumer Loan [Member] | |||||
Number of contracts | 2 | 5 | |||
Pre- Modification Outstanding Recorded Investment | 31 | 84 | |||
Post-Modification Outstanding Recorded Investment | 31 | 84 | |||
Tdrs That Are Subsequently Defaulted [Member] | |||||
Number of contracts | 4 | [1] | 5 | [1] | |
Pre- Modification Outstanding Recorded Investment | 554 | [1] | 2,821 | [1] | |
Post-Modification Outstanding Recorded Investment | 544 | [1] | 2,821 | [1] | |
Tdrs That Are Subsequently Defaulted [Member] | Commercial Real Estate [Member] | |||||
Number of contracts | 1 | [1] | 4 | [1] | |
Pre- Modification Outstanding Recorded Investment | 36 | [1] | 2,730 | [1] | |
Post-Modification Outstanding Recorded Investment | 36 | [1] | 2,730 | [1] | |
Tdrs That Are Subsequently Defaulted [Member] | Residential Portfolio Segment [Member] | |||||
Number of contracts | 3 | [1] | |||
Pre- Modification Outstanding Recorded Investment | 518 | [1] | |||
Post-Modification Outstanding Recorded Investment | 518 | [1] | |||
Tdrs That Are Subsequently Defaulted [Member] | Commercial Loan [Member] | |||||
Number of contracts | 1 | [1] | |||
Pre- Modification Outstanding Recorded Investment | 91 | [1] | |||
Post-Modification Outstanding Recorded Investment | $91 | [1] | |||
[1] | Loans past due 90 days or more are considered to be in default. |
LOAN_PORTFOLIO_Details_9
LOAN PORTFOLIO (Details 9) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |||
Commitments To Extend Credit [Member] | |||
Off-Balance Sheet Financial Instruments: | |||
Notional Amount | $27,017 | $29,836 | $29,473 |
Standby Letters Of Credit [Member] | |||
Off-Balance Sheet Financial Instruments: | |||
Notional Amount | $247 | $361 | $490 |
PREMISES_FURNITURE_AND_EQUIPME2
PREMISES, FURNITURE AND EQUIPMENT (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Premises Furniture And Equipment Details | |||
Land | $7,099 | $7,099 | $7,099 |
Buildings and land improvements | 16,082 | 16,134 | 16,213 |
Furniture and equipment | 7,874 | 7,608 | 7,599 |
Leasehold improvements | 65 | 65 | 65 |
Property, Plant and Equipment, Gross | 31,120 | 30,906 | 30,976 |
Less accumulated depreciation | -10,828 | -10,104 | -9,282 |
Premises, furniture and equipment, net | 20,292 | 20,802 | 21,694 |
Depreciation expense | $789 | $824 | $923 |
OTHER_REAL_ESTATE_OWNED_Detail
OTHER REAL ESTATE OWNED (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Other Real Estate [Abstract] | |||
Balance, beginning of year | $24,972 | $19,464 | $15,665 |
Additions | 2,183 | 17,659 | 14,398 |
Sales | -7,337 | -11,383 | -7,839 |
Write-downs | -317 | -768 | -2,760 |
Balance, end of period | $19,501 | $24,972 | $19,464 |
OTHER_ASSETS_Details
OTHER ASSETS (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |||
Other Assets Details | |||
Prepaid expenses and insurance | $736 | $471 | $603 |
Unamortized software | 52 | 29 | 42 |
Receivable from sale of other real estate owned | 3,348 | ||
Proceeds due from life insurance | 1,208 | ||
Other | 508 | 358 | 181 |
Total | $2,504 | $4,206 | $826 |
DEPOSITS_Details
DEPOSITS (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |||
Time Deposits, Fiscal Year Maturity [Abstract] | |||
Less than one year | $115,492 | ||
One to three years | 77,616 | ||
Three to five years | 25,801 | ||
Beyond five years | 1,890 | ||
Total | 220,799 | ||
Time deposits in excess of the FDIC insurance limit of $250 thousand | 40,100 | 47,700 | 69,900 |
Overdrawn transaction accounts | 17 | 41 | 43 |
Brokered deposits | 14,100 | 18,600 | 43,100 |
Related Party Deposits by directors including their affiliates and executive officers | $1,400 | $589 | $618 |
ADVANCES_FROM_THE_FEDERAL_HOME2
ADVANCES FROM THE FEDERAL HOME LOAN BANK (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Loan Balance | $17,000 | $22,000 | $22,000 |
Convertible Advance 2018-09-04 [Member] | |||
Interest Rate | 3.60% | ||
Maturity Date | 4-Sep-18 | ||
Loan Balance | 2,000 | ||
Convertible Advance 2018-09-10 [Member] | |||
Interest Rate | 3.45% | ||
Maturity Date | 10-Sep-18 | ||
Loan Balance | 5,000 | ||
Convertible Advance 2018-09-18 [Member] | |||
Interest Rate | 2.95% | ||
Maturity Date | 18-Sep-18 | ||
Loan Balance | 5,000 | ||
Convertible Advance 2019-08-20 [Member] | |||
Interest Rate | 3.86% | ||
Maturity Date | 20-Aug-19 | ||
Loan Balance | $5,000 |
ADVANCES_FROM_THE_FEDERAL_HOME3
ADVANCES FROM THE FEDERAL HOME LOAN BANK (Details Narrative) (USD $) | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |||||
Federal Home Loan Bank Stock | $1,200 | $1,600 | $1,800 | ||
Excess borrowing capacity with FHLB | 11,600 | ||||
Scheduled principal reductions | 5,000 | 12,000 | 12,000 | ||
One To Four Family Residential Properties [Member] | |||||
First mortgage loans pledged as collateral | 791 | ||||
Commercial Real Estate [Member] | |||||
First mortgage loans pledged as collateral | 3,700 | ||||
Home Equity Lines Of Credit [Member] | |||||
First mortgage loans pledged as collateral | 4,700 | ||||
Multifamily [Member] | |||||
First mortgage loans pledged as collateral | 45 | ||||
Mortgage Backed Securities [Member] | |||||
First mortgage loans pledged as collateral | $21,200 |
JUNIOR_SUBORDINATED_DEBENTURES1
JUNIOR SUBORDINATED DEBENTURES (Details Narrative) (USD $) | 1 Months Ended | 12 Months Ended | 0 Months Ended | ||
In Thousands, unless otherwise specified | Feb. 28, 2011 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 21, 2004 |
Subordinated Borrowing [Line Items] | |||||
Proceeds from Preferred securities issued and sold | $6,000 | ||||
Junior Subordinated Debt [Member] | |||||
Subordinated Borrowing [Line Items] | |||||
Debt issuance costs net of accumulated amortization | 73 | ||||
Amortization of debt issuance costs | 4 | 4 | 4 | ||
Deferred interest payments | 714 | ||||
Hcsb Financial Trust I [Member] | |||||
Subordinated Borrowing [Line Items] | |||||
Proceeds from Preferred securities issued and sold | 6,000 | ||||
Initial proceed from capital investment in trust | 186 | ||||
Funds due to trust | $6,200 |
SUBORDINATED_DEBENTURES_Detail
SUBORDINATED DEBENTURES (Details Narrative) (USD $) | 1 Months Ended | |||
In Thousands, unless otherwise specified | Jul. 30, 2010 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Subordinated Borrowings [Abstract] | ||||
Subordinated debentures | $12,062 | $11,062 | $11,062 | $12,062 |
Subordinated promissory note interest rate | 9.00% | |||
Subordinated promissory note callable | 4 years | |||
Subordinated promissory note term | 10 years | |||
Subordinated borrowing terms and conditions | Interest at a rate equal to the current Prime Rate in effect, as published by the Wall Street Journal, plus 3% | |||
Subordinated promissory note current Prime Rate margin | 3.00% | |||
Subordinated promissory note interest rate floor | 8.00% | |||
Subordinated promissory note interest rate ceiling | 12.00% | |||
Deferred interest on subordinated debt | 3,700 | |||
Subordinated debt cancelled | $1,000 |
LEASE_COMMITMENTS_Details_Narr
LEASE COMMITMENTS (Details Narrative) (USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2014 |
Number | |
Leases [Abstract] | |
Number of consecutive renewal terms for which the lease can be extended | 8 |
Period of each consecutive renewal term for which the lease can be extended | 5 years |
Lease rental (per month) | $1,047 |
Future minimum lease payments | $12,654 |
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Details Narrative) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Commitments And Contingencies Details Narrative | |
Contribution from Federal Reserve Bank of Richmond | $1,000 |
SHAREHOLDERS_EQUITY_Details_Na
SHAREHOLDERS' EQUITY (Details Narrative) (USD $) | 1 Months Ended | 12 Months Ended | |||
In Thousands, except Share data, unless otherwise specified | Feb. 28, 2011 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Mar. 06, 2009 |
Number | |||||
Fixed Rate Cumulative Perpetual Preferred Stock, Series T, shares issued to U.S. Treasury | 12,895 | 12,895 | 12,895 | ||
Proceeds on trust preferred securities | $6,000 | ||||
Approximate quarterly interest payments on trust preferred securities | 161 | ||||
Accrued dividend payments due on Series T Preferred Stock | 3,000 | ||||
Number of accrued dividend payments due on Series T Preferred Stock when holders have right to elect directors | 6 | ||||
Number of directors shareholders have right to elect | 2 | ||||
Series T Preferred Stock [Member] | |||||
Fixed Rate Cumulative Perpetual Preferred Stock, Series T, shares issued to U.S. Treasury | 12,895 | ||||
Fixed Rate Cumulative Perpetual Preferred Stock, Series T, Liquidation preference (per share) | $1,000 | ||||
Dividend Rate for first five years | 5.00% | ||||
Dividend Rate after first five years | 9.00% | ||||
Aggregate purchase price of Fixed Rate Cumulative Perpetual Preferred Stock, Series T | $12,900 | ||||
Capital Purchase Program Warrant [Member] | |||||
Maximum number of common stock shares purchased under ten-year warrant | 91,714 | ||||
Common stock, initial exercise price | $21.09 |
REGULATORY_CAPITAL_REQUIREMENT
REGULATORY CAPITAL REQUIREMENTS (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
In Thousands, unless otherwise specified | ||||||
The Company [Member] | ||||||
Total capital (to risk weighted assets) | ||||||
Actual Amount | ($10,402) | ($10,169) | ($11,932) | |||
Actual Ratio (as a percent) | -3.61% | -3.19% | -3.44% | |||
For Capital Adequacy Purposes Amount | 23,031 | 25,512 | 27,754 | |||
For Capital Adequacy Purposes Ratio (as a percent) | 8.00% | 8.00% | 8.00% | |||
Tier I capital (to risk weighted assets) | ||||||
Actual Amount | -10,402 | -10,169 | -11,932 | |||
Actual Ratio (as a percent) | -3.61% | -3.19% | -3.44% | |||
For Capital Adequacy Purposes Amount | 11,516 | 12,756 | 13,877 | |||
For Capital Adequacy Purposes Ratio (as a percent) | 4.00% | 4.00% | 4.00% | |||
Tier I capital (to average assets) | ||||||
Actual Amount | -10,402 | -10,169 | -11,932 | |||
Actual Ratio (as a percent) | -3.61% | -2.23% | -2.34% | |||
For Capital Adequacy Purposes Amount | 17,614 | 18,242 | 20,367 | |||
For Capital Adequacy Purposes Ratio (as a percent) | 4.00% | 4.00% | 4.00% | |||
The Bank [Member] | ||||||
Total capital (to risk weighted assets) | ||||||
Actual Amount | 14,533 | 13,842 | 12,175 | |||
Actual Ratio (as a percent) | 5.05% | 4.34% | 3.51% | |||
For Capital Adequacy Purposes Amount | 23,008 | 25,505 | 27,733 | |||
For Capital Adequacy Purposes Ratio (as a percent) | 8.00% | 8.00% | 8.00% | |||
Minimum To Be Well-Capitalized Under Prompt Corrective Action Provisions Amount | 28,760 | 31,881 | 34,667 | |||
Minimum To Be Well-Capitalized Under Prompt Corrective Action Provisions Ratio (as a percent) | 10.00% | 10.00% | 10.00% | |||
Tier I capital (to risk weighted assets) | ||||||
Actual Amount | 10,911 | 9,789 | 7,720 | |||
Actual Ratio (as a percent) | 3.79% | 3.07% | 2.23% | |||
For Capital Adequacy Purposes Amount | 11,504 | 12,753 | 13,867 | |||
For Capital Adequacy Purposes Ratio (as a percent) | 4.00% | 4.00% | 4.00% | |||
Minimum To Be Well-Capitalized Under Prompt Corrective Action Provisions Amount | [1] | [1] | [1] | |||
Minimum To Be Well-Capitalized Under Prompt Corrective Action Provisions Ratio (as a percent) | [1] | [1] | [1] | |||
Tier I capital (to average assets) | ||||||
Actual Amount | 10,911 | 9,789 | 7,720 | |||
Actual Ratio (as a percent) | 2.53% | 2.17% | 1.56% | |||
For Capital Adequacy Purposes Amount | 17,255 | 18,067 | 19,816 | |||
For Capital Adequacy Purposes Ratio (as a percent) | 4.00% | 4.00% | 4.00% | |||
Minimum To Be Well-Capitalized Under Prompt Corrective Action Provisions Amount | $34,510 | $36,135 | $39,632 | |||
Minimum To Be Well-Capitalized Under Prompt Corrective Action Provisions Ratio (as a percent) | 8.00% | 8.00% | 8.00% | |||
[1] | Minimum capital amounts and ratios presented are amounts to be well-capitalized under the various regulatory capital requirements administered by the FDIC. On February 10, 2011, the Bank became subject to a regulatory Consent Order with the FDIC. Minimum capital amounts and ratios presented for the Bank are the minimum levels set forth in the Consent Order. No minimum Tier 1 capital to risk-weighted assets ratio was specified in the Consent Order. Regardless of the Bank's capital ratios, it is unable to be classified as "well-capitalized" while it is operating under the Consent Order with the FDIC. |
RETIREMENT_AND_BENEFITS_Detail
RETIREMENT AND BENEFITS (Details Narrative) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Maximum Annual Contribution Per Employee, Percent | 15.00% | ||
Maximum percent match to employees (in percent) | 4.00% | ||
Contributions to employe plans | |||
Directors Deferred Compensation Plan [Member] | |||
Deferred Directors Fees | $37 | $49 | $62 |
INCOME_LOSS_PER_SHARE_Details
INCOME (LOSS) PER SHARE (Details) (USD $) | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Basic loss per common share: | |||
Net loss available to common shareholders | ($1,403) | $911 | ($10,396) |
Weighted average common shares outstanding - basic | 3,770,355 | 3,738,337 | 3,738,337 |
Basic loss per common share | ($0.37) | $0.24 | ($2.78) |
Diluted loss per common share: | |||
Net loss available to common shareholders | -1,403 | 911 | -10,396 |
Weighted average common shares outstanding - basic | 3,770,355 | 3,738,337 | 3,738,337 |
Incremental shares from assumed conversion of stock options and restricted stock awards | |||
Average common shares outstanding - diluted | 3,770,355 | 3,738,337 | 3,738,337 |
Diluted loss per common share | ($0.37) | $0.24 | ($2.78) |
Antidilutive stock options excluded from computation of earnings per share (in shares) | 91,714 | 91,714 | 91,714 |
STOCK_COMPENSATION_PLAN_Detail
STOCK COMPENSATION PLAN (Details Narrative) (Omnibus Stock Ownership and Long Term Incentive Plan [Member]) | Dec. 31, 2014 |
Omnibus Stock Ownership and Long Term Incentive Plan [Member] | |
Shares authorized under the Plan | 400,000 |
Bank's return on average assets (ROAA) average (as a percent) | 1.15% |
OTHER_EXPENSES_Details
OTHER EXPENSES (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Other Expenses Details | |||
Stationery, printing, and postage | $275 | $318 | $337 |
Dues and subscriptions | 59 | 72 | 104 |
Telephone | 202 | 204 | 208 |
Director and officer insurance | 212 | 486 | 120 |
ATM services | 27 | 115 | 170 |
Appraisal fee expense | 123 | 140 | 97 |
Accountant fees | 277 | 84 | 180 |
Legal fees | 697 | 1,875 | 991 |
Consulting fees | 112 | 186 | 511 |
Courier services | 51 | 58 | 74 |
Other | 880 | 774 | 1,107 |
Total | $2,915 | $4,312 | $3,899 |
INCOME_TAXES_Details
INCOME TAXES (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Currently payable: | |||
Federal | |||
State | 78 | ||
Total current | 78 | ||
Deferred income taxes | |||
Income tax benefit | $78 |
INCOME_TAXES_Details_2
INCOME TAXES (Details 2) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |||
Deferred tax assets: | |||
Allowance for loan losses | $1,968 | $3,211 | $4,811 |
Net unrealized losses on securities available-for-sale | 313 | 2,321 | |
Net capitalized loan costs | 23 | 25 | 33 |
Net operating loss | 19,572 | 16,751 | 14,412 |
Deferred compensation | 13 | 17 | 21 |
Nonaccruing interest | 232 | 241 | 908 |
Tax credits | 259 | 276 | 307 |
Other real estate owned | 655 | 638 | 1,238 |
Loss on equity securities | 1 | 43 | 43 |
Other | 8 | 5 | 3 |
Total deferred tax assets | 23,044 | 23,528 | 21,776 |
Valuation Allowance | -21,971 | -22,361 | -20,451 |
Total net deferred tax assets | 1,073 | 1,167 | 1,325 |
Deferred tax liabilities: | |||
Accumulated depreciation | -965 | -1,046 | -1,120 |
Gain on sale of real estate | -73 | -73 | |
Prepaid expenses | -108 | -48 | -69 |
Net unrealized gains on securities available-for-sale | -63 | ||
Total deferred tax liabilities | -1,073 | -1,167 | -1,325 |
Net deferred tax asset |
INCOME_TAXES_Details_3
INCOME TAXES (Details 3) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Currently payable: | |||
Tax benefit at statutory rate | ($73) | $599 | ($3,239) |
State income tax benefit net of federal income tax | 52 | -54 | |
Tax-exempt interest income | -5 | -16 | -40 |
Bank owned life insurance | -113 | ||
Life insurance proceeds | -315 | ||
Valuation allowance | 542 | -473 | 3,454 |
Other | -10 | -110 | -121 |
Income tax expense (benefit) | $78 |
INCOME_TAXES_Details_Narrative
INCOME TAXES (Details Narrative) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Taxes Details Narrative | |||
Federal Net Operating Loss Carryforwards | $56,800 | $48,600 | $41,800 |
South Carolina Net Operating Loss Carryforwards | $7,900 | $6,500 | $6,200 |
Federal statutory rate (as a percent) | 34.00% |
UNUSED_LINES_OF_CREDIT_Details
UNUSED LINES OF CREDIT (Details Narrative) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Unused Lines Of Credit Details Narrative | |
Book value of Investment Securities | $64,800 |
Market value of Investment Securities not pledged | $64,400 |
FAIR_VALUE_Details
FAIR VALUE (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
In Thousands, unless otherwise specified | ||||||
Financial Assets: | ||||||
Securities available-for-sale | $106,674 | $94,602 | $77,320 | |||
Commitments To Extend Credit [Member] | ||||||
Off-Balance Sheet Financial Instruments: | ||||||
Notional Amount | 27,017 | 29,836 | 29,473 | |||
Standby Letters Of Credit [Member] | ||||||
Off-Balance Sheet Financial Instruments: | ||||||
Notional Amount | 247 | 361 | 490 | |||
Carrying Reported Amount Fair Value Disclosure [Member] | ||||||
Financial Assets: | ||||||
Cash and cash equivalents | 28,527 | 28,081 | 46,600 | |||
Securities available-for-sale | 106,674 | 94,602 | 77,320 | |||
Nonmarketable equity securities | 1,342 | 1,743 | 1,983 | |||
Loans, net | 229,756 | 246,981 | 288,084 | |||
Financial Liabilities: | ||||||
Demand deposit, interest-bearing transaction, and savings accounts | 170,538 | 163,505 | 168,832 | |||
Certificates of deposit | 220,799 | 242,539 | 267,029 | |||
Repurchase agreements | 1,612 | 1,337 | 1,303 | |||
Advances from the Federal Home Loan Bank | 17,000 | 22,000 | 22,000 | |||
Subordinated debentures | 11,062 | 11,062 | 12,062 | |||
Junior subordinated debentures | 6,186 | 6,186 | 6,186 | |||
Estimate Of Fair Value Fair Value Disclosure [Member] | ||||||
Financial Assets: | ||||||
Cash and cash equivalents | 28,527 | 28,081 | 46,600 | |||
Securities available-for-sale | 106,674 | 94,602 | 77,320 | |||
Nonmarketable equity securities | 1,342 | 1,743 | 1,983 | |||
Loans, net | 230,038 | 248,633 | 290,230 | |||
Financial Liabilities: | ||||||
Demand deposit, interest-bearing transaction, and savings accounts | 170,538 | 163,505 | 168,832 | |||
Certificates of deposit | 222,789 | 244,463 | 269,776 | |||
Repurchase agreements | 1,612 | 1,337 | 1,303 | |||
Advances from the Federal Home Loan Bank | 17,136 | 25,055 | 25,802 | |||
Subordinated debentures | [1] | [1] | [1] | |||
Junior subordinated debentures | [1] | [1] | [1] | |||
Fair Value Inputs Level1 [Member] | ||||||
Financial Assets: | ||||||
Cash and cash equivalents | 28,527 | 28,081 | 46,600 | |||
Securities available-for-sale | ||||||
Nonmarketable equity securities | ||||||
Loans, net | ||||||
Financial Liabilities: | ||||||
Demand deposit, interest-bearing transaction, and savings accounts | 170,538 | 163,505 | 168,832 | |||
Certificates of deposit | ||||||
Repurchase agreements | ||||||
Advances from the Federal Home Loan Bank | ||||||
Subordinated debentures | ||||||
Junior subordinated debentures | ||||||
Fair Value Inputs Level2 [Member] | ||||||
Financial Assets: | ||||||
Cash and cash equivalents | ||||||
Securities available-for-sale | 106,674 | 94,602 | 77,320 | |||
Nonmarketable equity securities | ||||||
Loans, net | ||||||
Financial Liabilities: | ||||||
Demand deposit, interest-bearing transaction, and savings accounts | ||||||
Certificates of deposit | 222,789 | 244,463 | 269,776 | |||
Repurchase agreements | 1,612 | 1,337 | 1,303 | |||
Advances from the Federal Home Loan Bank | 17,136 | 25,055 | 25,802 | |||
Subordinated debentures | ||||||
Junior subordinated debentures | ||||||
Fair Value Inputs Level3 [Member] | ||||||
Financial Assets: | ||||||
Cash and cash equivalents | ||||||
Securities available-for-sale | ||||||
Nonmarketable equity securities | 1,342 | 1,743 | 1,983 | |||
Loans, net | 230,038 | 248,633 | 290,230 | |||
Financial Liabilities: | ||||||
Demand deposit, interest-bearing transaction, and savings accounts | ||||||
Certificates of deposit | ||||||
Repurchase agreements | ||||||
Advances from the Federal Home Loan Bank | ||||||
Subordinated debentures | ||||||
Junior subordinated debentures | ||||||
[1] | The Company is unable to determine this value. |
FAIR_VALUE_Details_2
FAIR VALUE (Details 2) (Fair Value Measurements Recurring [Member], USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |||
Assets and liabilities fair value disclosure | $106,674 | $94,602 | $77,320 |
Fair Value Inputs Level1 [Member] | |||
Assets and liabilities fair value disclosure | |||
Fair Value Inputs Level2 [Member] | |||
Assets and liabilities fair value disclosure | 106,674 | 94,602 | 77,320 |
Fair Value Inputs Level3 [Member] | |||
Assets and liabilities fair value disclosure | |||
Government Sponsored Enterprises Debt Securities [Member] | |||
Assets and liabilities fair value disclosure | 40,082 | 55,075 | 27,108 |
Government Sponsored Enterprises Debt Securities [Member] | Fair Value Inputs Level1 [Member] | |||
Assets and liabilities fair value disclosure | |||
Government Sponsored Enterprises Debt Securities [Member] | Fair Value Inputs Level2 [Member] | |||
Assets and liabilities fair value disclosure | 40,082 | 55,075 | 27,108 |
Government Sponsored Enterprises Debt Securities [Member] | Fair Value Inputs Level3 [Member] | |||
Assets and liabilities fair value disclosure | |||
Mortgage Backed Securities [Member] | |||
Assets and liabilities fair value disclosure | 65,348 | 37,034 | 44,462 |
Mortgage Backed Securities [Member] | Fair Value Inputs Level1 [Member] | |||
Assets and liabilities fair value disclosure | |||
Mortgage Backed Securities [Member] | Fair Value Inputs Level2 [Member] | |||
Assets and liabilities fair value disclosure | 65,348 | 37,034 | 44,462 |
Mortgage Backed Securities [Member] | Fair Value Inputs Level3 [Member] | |||
Assets and liabilities fair value disclosure | |||
Obligations of state and local governments [Member] | |||
Assets and liabilities fair value disclosure | 1,244 | 2,493 | 5,750 |
Obligations of state and local governments [Member] | Fair Value Inputs Level1 [Member] | |||
Assets and liabilities fair value disclosure | |||
Obligations of state and local governments [Member] | Fair Value Inputs Level2 [Member] | |||
Assets and liabilities fair value disclosure | 1,244 | 2,493 | 5,750 |
Obligations of state and local governments [Member] | Fair Value Inputs Level3 [Member] | |||
Assets and liabilities fair value disclosure |
FAIR_VALUE_Details_3
FAIR VALUE (Details 3) (Fair Value Measurements Nonrecurring [Member], USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |||
Fair value of assets | $58,977 | $66,855 | $75,464 |
Fair Value Inputs Level3 [Member] | |||
Fair value of assets | 58,977 | 66,855 | 75,464 |
Impaired Loans [Member] | |||
Fair value of assets | 39,476 | 41,883 | 56,000 |
Impaired Loans [Member] | Fair Value Inputs Level3 [Member] | |||
Fair value of assets | 39,476 | 41,883 | 56,000 |
Other Real Estate Owned [Member] | |||
Fair value of assets | 19,501 | 24,972 | 19,464 |
Other Real Estate Owned [Member] | Fair Value Inputs Level3 [Member] | |||
Fair value of assets | $19,501 | $24,972 | $19,464 |
FAIR_VALUE_Details_4
FAIR VALUE (Details 4) (Fair Value Inputs Level3 [Member], USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Impaired Loans [Member] | Commercial Loan [Member] | |||
Quantitative Information For Financial Instruments Measured At Fair Value On A Non-Recurring Basis [Line Items] | |||
Fair value on a non-recurring basis | $3,493 | $3,728 | $4,124 |
Valuation Techniques | Appraised Value/ Discounted Cash Flows | Appraised Value/ Discounted Cash Flows | Appraised Value/ Discounted Cash Flows |
Unobservable Inputs | Appraisals and/or sales of comparable properties/ Independent quotes | Appraisals and/or sales of comparable properties/ Independent quotes | Appraisals and/or sales of comparable properties/ Independent quotes |
Range (Weighted Avg) | 14.41% | 3.36% | 13.12% |
Impaired Loans [Member] | Commercial Loan [Member] | Minimum [Member] | |||
Quantitative Information For Financial Instruments Measured At Fair Value On A Non-Recurring Basis [Line Items] | |||
Range | 0.00% | 0.00% | 0.00% |
Impaired Loans [Member] | Commercial Loan [Member] | Maximum [Member] | |||
Quantitative Information For Financial Instruments Measured At Fair Value On A Non-Recurring Basis [Line Items] | |||
Range | 75.06% | 76.50% | 100.00% |
Impaired Loans [Member] | Commercial Real Estate [Member] | |||
Quantitative Information For Financial Instruments Measured At Fair Value On A Non-Recurring Basis [Line Items] | |||
Fair value on a non-recurring basis | 24,138 | 27,085 | 41,709 |
Valuation Techniques | Appraised Value/ Discounted Cash Flows | Appraised Value/ Discounted Cash Flows | Appraised Value/ Discounted Cash Flows |
Unobservable Inputs | Appraisals and/or sales of comparable properties/ Independent quotes | Appraisals and/or sales of comparable properties/ Independent quotes | Appraisals and/or sales of comparable properties/ Independent quotes |
Range (Weighted Avg) | 14.77% | 16.51% | 19.22% |
Impaired Loans [Member] | Commercial Real Estate [Member] | Minimum [Member] | |||
Quantitative Information For Financial Instruments Measured At Fair Value On A Non-Recurring Basis [Line Items] | |||
Range | 0.00% | 0.00% | 0.00% |
Impaired Loans [Member] | Commercial Real Estate [Member] | Maximum [Member] | |||
Quantitative Information For Financial Instruments Measured At Fair Value On A Non-Recurring Basis [Line Items] | |||
Range | 84.15% | 88.29% | 73.91% |
Impaired Loans [Member] | Residential Portfolio Segment [Member] | |||
Quantitative Information For Financial Instruments Measured At Fair Value On A Non-Recurring Basis [Line Items] | |||
Fair value on a non-recurring basis | 11,681 | 10,865 | 9,943 |
Valuation Techniques | Appraised Value/ Discounted Cash Flows | Appraised Value/ Discounted Cash Flows | Appraised Value/ Discounted Cash Flows |
Unobservable Inputs | Appraisals and/or sales of comparable properties/ Independent quotes | Appraisals and/or sales of comparable properties/ Independent quotes | Appraisals and/or sales of comparable properties/ Independent quotes |
Range (Weighted Avg) | 49.91% | 23.60% | 20.80% |
Impaired Loans [Member] | Residential Portfolio Segment [Member] | Minimum [Member] | |||
Quantitative Information For Financial Instruments Measured At Fair Value On A Non-Recurring Basis [Line Items] | |||
Range | 0.00% | 0.00% | 0.00% |
Impaired Loans [Member] | Residential Portfolio Segment [Member] | Maximum [Member] | |||
Quantitative Information For Financial Instruments Measured At Fair Value On A Non-Recurring Basis [Line Items] | |||
Range | 92.12% | 90.23% | 89.26% |
Impaired Loans [Member] | Consumer Loan [Member] | |||
Quantitative Information For Financial Instruments Measured At Fair Value On A Non-Recurring Basis [Line Items] | |||
Fair value on a non-recurring basis | 164 | 205 | 224 |
Valuation Techniques | Appraised Value/ Discounted Cash Flows | Appraised Value/ Discounted Cash Flows | Appraised Value/ Discounted Cash Flows |
Unobservable Inputs | Appraisals and/or sales of comparable properties/ Independent quotes | Appraisals and/or sales of comparable properties/ Independent quotes | Appraisals and/or sales of comparable properties/ Independent quotes |
Range (Weighted Avg) | 6.20% | 14.67% | 7.38% |
Impaired Loans [Member] | Consumer Loan [Member] | Minimum [Member] | |||
Quantitative Information For Financial Instruments Measured At Fair Value On A Non-Recurring Basis [Line Items] | |||
Range | 0.00% | 0.00% | 0.00% |
Impaired Loans [Member] | Consumer Loan [Member] | Maximum [Member] | |||
Quantitative Information For Financial Instruments Measured At Fair Value On A Non-Recurring Basis [Line Items] | |||
Range | 35.41% | 38.68% | 25.11% |
Other Real Estate Owned [Member] | |||
Quantitative Information For Financial Instruments Measured At Fair Value On A Non-Recurring Basis [Line Items] | |||
Valuation Techniques | Appraised Value/ Discounted Cash Flows | Appraised Value/ Discounted Cash Flows | Appraised Value/ Discounted Cash Flows |
Unobservable Inputs | Appraisals and/or sales of comparable properties/ Independent quotes | Appraisals and/or sales of comparable properties/ Independent quotes | Appraisals and/or sales of comparable properties/ Independent quotes |
Range (Weighted Avg) | 6.27% | 6.27% | 6.27% |
Fair value on a non-recurring basis | $19,501 | $24,972 | $19,464 |
Other Real Estate Owned [Member] | Minimum [Member] | |||
Quantitative Information For Financial Instruments Measured At Fair Value On A Non-Recurring Basis [Line Items] | |||
Range | 0.00% | 0.00% | 0.00% |
Other Real Estate Owned [Member] | Maximum [Member] | |||
Quantitative Information For Financial Instruments Measured At Fair Value On A Non-Recurring Basis [Line Items] | |||
Range | 50.00% | 50.00% | 50.00% |
HCSB_FINANCIAL_CORPORATION_PAR2
HCSB FINANCIAL CORPORATION (PARENT COMPANY ONLY) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Jul. 30, 2010 |
In Thousands, unless otherwise specified | |||||
Assets: | |||||
Other assets | $2,504 | $4,206 | $826 | ||
Total assets | 421,571 | 434,586 | 468,996 | ||
Liabilities and Shareholders' Equity | |||||
Subordinated debentures | 11,062 | 11,062 | 12,062 | 12,062 | |
Junior subordinated debentures | 6,186 | 6,186 | 6,186 | ||
Other liabilities | 1,038 | 1,094 | 1,139 | ||
Total liabilities | 432,818 | 451,028 | 480,758 | ||
Total shareholders' deficit | -11,247 | -16,442 | -11,762 | -5,216 | |
Total liabilities and shareholders' deficit | 421,571 | 434,586 | 468,996 | ||
The Company [Member] | |||||
Assets: | |||||
Cash | 26 | 59 | 86 | ||
Investment in banking subsidiary | 10,066 | 3,516 | 7,890 | ||
Investment in trust | 186 | 186 | 186 | ||
Other assets | 123 | 136 | 149 | ||
Total assets | 10,401 | 3,897 | 8,311 | ||
Liabilities and Shareholders' Equity | |||||
Interest payable-subordinated debentures | 3,685 | 2,553 | 1,472 | ||
Interest payable-junior subordinated debentures | 714 | 536 | 351 | ||
Subordinated debentures | 11,062 | 11,062 | 12,062 | ||
Junior subordinated debentures | 6,186 | 6,186 | 6,186 | ||
Other liabilities | 1 | 2 | 2 | ||
Total liabilities | 21,648 | 20,339 | 20,073 | ||
Total shareholders' deficit | -11,247 | -16,442 | -11,762 | ||
Total liabilities and shareholders' deficit | $10,401 | $3,897 | $8,311 |
HCSB_FINANCIAL_CORPORATION_PAR3
HCSB FINANCIAL CORPORATION (PARENT COMPANY ONLY) (Details 2) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income | |||
Forgiveness of debt | $1,000 | ||
Other Income | 62 | 77 | 90 |
Expenses | |||
Total Expense | 13,749 | 15,460 | 17,681 |
Loss before income taxes, and equity in undistributed gains (losses) of banking subsidiary | -213 | 1,763 | -9,527 |
Income tax expense | 78 | ||
Net income (loss) | -291 | 1,763 | -9,527 |
The Company [Member] | |||
Income | |||
Forgiveness of debt | 1,000 | ||
Other Income | |||
Expenses | |||
Interest expense on subordinated debentures | 1,132 | 1,081 | 1,213 |
Interest expense on junior subordinated debentures | 178 | 186 | 177 |
Other expenses | 104 | 39 | 237 |
Total Expense | 1,414 | 1,306 | 1,627 |
Loss before income taxes, and equity in undistributed gains (losses) of banking subsidiary | -1,414 | -306 | -1,627 |
Income tax expense | |||
Equity in undistributed gains (losses) of banking subsidiary | 1,123 | 2,069 | -7,900 |
Net income (loss) | ($291) | $1,763 | ($9,527) |
HCSB_FINANCIAL_CORPORATION_PAR4
HCSB FINANCIAL CORPORATION (PARENT COMPANY ONLY) (Details 3) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Cash flows from operating activities: | |||
Net income (loss) | ($291) | $1,763 | ($9,527) |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||
Forgiveness of debt | -1,000 | ||
Decrease in other assets | -1,708 | 3,390 | -116 |
Increase in accrued interest payable | 1,278 | 1,098 | 1,192 |
Net cash provided by operating activities | 5,115 | -2,511 | 4,543 |
Cash flows from financing activities: | |||
Sale of common stock | 58 | ||
Net cash provided by financing activities | -19,374 | -29,783 | -61,181 |
Net increase in cash and cash equivalents | 446 | -18,519 | 12,928 |
Cash and cash equivalents, beginning of year | 28,081 | 46,600 | 33,672 |
Cash and cash equivalents, end of year | 28,527 | 28,081 | 46,600 |
The Company [Member] | |||
Cash flows from operating activities: | |||
Net income (loss) | -291 | 1,763 | -9,527 |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||
Forgiveness of debt | -1,000 | ||
Equity in undistributed (gains) losses of banking subsidiary | -1,123 | -2,069 | 7,900 |
Decrease in other assets | 13 | 13 | 236 |
Increase in accrued interest payable | 1,310 | 1,266 | 1,386 |
Net cash provided by operating activities | -91 | -27 | -5 |
Cash flows from financing activities: | |||
Sale of common stock | 58 | ||
Net cash provided by financing activities | 58 | ||
Net increase in cash and cash equivalents | -33 | -27 | -5 |
Cash and cash equivalents, beginning of year | 59 | 86 | 91 |
Cash and cash equivalents, end of year | $26 | $59 | $86 |
SUBSEQUENT_EVENTS_Details_Narr
SUBSEQUENT EVENTS (Details Narrative) (Subsequent Event [Member], Sandhills Bank (North Myrtle Beach, South Carolina) [Member], USD $) | Mar. 24, 2015 |
In Thousands, unless otherwise specified | |
Percentage of deposit premium | 2.50% |
Socastee, Windy Hill [Member] | |
Total deposits | 45,500 |
Carolina Forest Branches [Member] | |
Total deposits | 8,000 |