Document_And_Entity_Informatio
Document And Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Jun. 30, 2013 | Mar. 18, 2013 | |
Document And Entity Information | ' | ' | ' |
Entity Registrant Name | 'M&F BANCORP INC /NC/ | ' | ' |
Entity Central Index Key | '0001094738 | ' | ' |
Document Period End Date | 31-Dec-13 | ' | ' |
Document Type | '10-K | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Entity Well-known Seasoned Issuer | 'No | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Amendment Flag | 'false | ' | ' |
Entity Filer Category | 'Smaller Reporting Company | ' | ' |
Entity Public Float | ' | $4,070,748 | ' |
Entity Common Stock, Shares Outstanding | ' | ' | 2,031,337 |
Document Fiscal Year Focus | '2013 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Cash and cash equivalents | ' | ' |
Cash and due from banks | $3,390 | $2,527 |
Interest-bearing deposits | 22,193 | 40,059 |
Federal Funds Sold | 3,000 | ' |
Total Cash and cash equivalents | 28,583 | 42,586 |
Investment securities available for sale, at fair value | 65,919 | 60,811 |
Other invested assets | 389 | 488 |
Loans, net of unearned income and deferred fees | 189,475 | 175,222 |
Allowances for loan losses | -3,493 | -3,499 |
Loans, net | 185,982 | 171,723 |
Interest receivable | 912 | 858 |
Bank premises and equipment, net | 4,373 | 4,683 |
Cash surrender value of bank-owned life insurance | 6,191 | 5,978 |
Other real estate owned | 3,032 | 3,055 |
Deferred tax assets and taxes receivable, net | 4,153 | 4,387 |
Other assets | 1,955 | 1,530 |
TOTAL ASSETS | 301,489 | 296,099 |
Deposits | ' | ' |
Interest-bearing deposits | 211,870 | 205,921 |
Noninterest-bearing deposits | 48,057 | 44,958 |
Total deposits | 259,927 | 250,879 |
Other borrowings | 847 | 2,937 |
Other liabilities | 4,578 | 6,004 |
Total liabilities | 265,352 | 259,820 |
COMMITMENTS AND CONTINGENCIES | ' | ' |
Stockholders' equity: | ' | ' |
Series B Preferred Stock - $1,000 liquidation value per share, 11,735 shares issued and outstanding | 11,727 | 11,725 |
Common stock, no par value 10,000,000 shares authorized; 2,031,337 shares issued and outstanding | 8,732 | 8,732 |
Retained earnings | 17,103 | 17,230 |
Accumulated other comprehensive loss | -1,425 | -1,408 |
Total stockholders' equity | 36,137 | 36,279 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $301,489 | $296,099 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Statement of Financial Position [Abstract] | ' | ' |
Series B Preferred stock, liquidation value (in dollars per share) | $1,000 | $1,000 |
Series B Preferred stock, issued (in shares) | 11,735 | 11,735 |
Series B Preferred stock, outstanding (in shares) | 11,735 | 11,735 |
Common stock, no par value (in dollars per share) | $0 | $0 |
Common stock, authorized (in shares) | 10,000,000 | 10,000,000 |
Common stock, issued (in shares) | 2,031,337 | 2,031,337 |
Common stock, outstanding (in shares) | 2,031,337 | 2,031,337 |
CONSOLIDATED_STATEMENTS_OF_INC
CONSOLIDATED STATEMENTS OF INCOME (LOSS) (USD $) | 12 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Interest income: | ' | ' |
Loans, including fees | $10,235 | $10,563 |
Investment securities, including dividends | ' | ' |
Taxable | 807 | 762 |
Tax-exempt | 36 | 107 |
Other | 84 | 121 |
Total interest income | 11,162 | 11,553 |
Interest expense: | ' | ' |
Deposits | 760 | 907 |
Borrowings | 7 | 115 |
Total interest expense | 767 | 1,022 |
Net interest income | 10,395 | 10,531 |
Less provision for loan losses | 329 | 166 |
Net interest income after provision for loan losses | 10,066 | 10,365 |
Noninterest income: | ' | ' |
Service charges | 1,307 | 1,369 |
Rental income | 293 | 306 |
Cash surrender value of life insurance | 213 | 210 |
Realized gain on sale of securities | ' | 445 |
Realized loss on disposal of assets | ' | -5 |
Other income | 333 | 6 |
Total noninterest income | 2,146 | 2,331 |
Noninterest expense: | ' | ' |
Salaries and employee benefits | 5,880 | 6,049 |
Occupancy and equipment | 1,474 | 1,486 |
Directors fees | 304 | 309 |
Marketing | 166 | 199 |
Professional fees | 825 | 798 |
Information technology | 848 | 912 |
FDIC deposit insurance | 512 | 558 |
Other real estate owned expense expense, net | 322 | 420 |
Realized gain (loss) on sale of other real estate owned | -13 | 32 |
Gains at foreclosure | -8 | ' |
Delivery expenses | 170 | 187 |
Other | 1,218 | 1,289 |
Total noninterest expense | 11,698 | 12,239 |
Income before income taxes | 514 | 457 |
Income tax expense | 151 | 116 |
Net income | 363 | 341 |
Less preferred stock dividends and accretion | -237 | -237 |
Net income available to common stockholders | $126 | $104 |
Basic and diluted earnings (loss) per share of common stock: | $0.06 | $0.05 |
Weighted average shares of common stock outstanding: | ' | ' |
Basic and diluted | 2,031,337 | 2,031,337 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Statement of Comprehensive Income [Abstract] | ' | ' |
Net income | $363 | $341 |
Investment Securites | ' | ' |
Unrealized holding gains (losses) on securities available for sale | -1,311 | 472 |
Tax effect | 480 | -159 |
Reclassification adjustments for realized gains | ' | -445 |
Tax effect | ' | 78 |
Net of tax amount | -831 | -54 |
Defined benefit pension plans: | ' | ' |
Net acturial gain | 1,339 | 136 |
Tax effect | -526 | -52 |
Prior Service Cost | 2 | 2 |
Tax effect | -1 | -1 |
Defined benefit plan adjustment, net of tax | 814 | 85 |
Other comprehensive (loss), net of tax | -17 | 31 |
Comprehensive income (loss) | $346 | $372 |
CONSOLIDATED_STATEMENTS_OF_CHA
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (USD $) | Common Stock | Preferred Stock | Retained Earnings | Accumulated Other Comprehensive Loss | Total |
In Thousands, except Share data | |||||
Balance, Beginning at Dec. 31, 2011 | $8,732 | $11,724 | $17,380 | ($1,439) | $36,397 |
Balance, Beginning, shares at Dec. 31, 2011 | 2,031,337 | ' | ' | ' | ' |
Accretion of Series B preferred stock issuance costs | ' | 1 | -1 | ' | ' |
Net income | ' | ' | 341 | ' | 341 |
Other comprehensive income (loss), net of tax | ' | ' | ' | 31 | 31 |
Dividends declared on preferred stock | ' | ' | -236 | ' | -236 |
Dividends declared on common stock | ' | ' | -2,544 | ' | -254 |
Balance, Ending at Dec. 31, 2012 | 8,732 | 11,725 | 17,230 | -1,408 | 36,279 |
Balance, Ending, shares at Dec. 31, 2012 | 2,031,337 | ' | ' | ' | 2,031,337 |
Accretion of Series B preferred stock issuance costs | ' | 2 | -2 | ' | ' |
Net income | ' | ' | 363 | ' | 363 |
Other comprehensive income (loss), net of tax | ' | ' | ' | -17 | -17 |
Dividends declared on preferred stock | ' | ' | -235 | ' | -235 |
Dividends declared on common stock | ' | ' | -253 | ' | -253 |
Balance, Ending at Dec. 31, 2013 | $8,732 | $11,727 | $17,103 | ($1,425) | $36,137 |
Balance, Ending, shares at Dec. 31, 2013 | 2,031,337 | ' | ' | ' | 2,031,337 |
CONSOLIDATED_STATEMENTS_OF_CHA1
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Statement of Stockholders' Equity [Abstract] | ' | ' |
Common stock dividend per share | $0.13 | $0.13 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Cash flows from operating activities: | ' | ' |
Net income | $363 | $341 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Provision for loan losses | 329 | 166 |
Depreciation and amortization | 348 | 338 |
Realized loss on disposal of assets | ' | 5 |
Amortization of discounts/premiums on investments, net | 1,032 | 887 |
Loan purchase accounting amortization, net | 43 | 174 |
Deferred income tax (benefit) provision | -37 | 110 |
Deferred loan origination fees and costs, net | 181 | 174 |
Increase in cash surrender value of bank owned life insurance | -213 | -210 |
Gain on foreclosure | -8 | ' |
Net gain (loss) on sale of other real estate owned | -13 | 32 |
Writedown of other real estate owned | 188 | 232 |
Net Changes in: | ' | ' |
Accrued interest receivable and other assets | -255 | 745 |
Other liabilities | -47 | 27 |
Net cash provided by operating activities | 1,911 | 2,576 |
Activity in available-for-sale securities: | ' | ' |
Sales | ' | 12,667 |
Maturities and calls | 2,000 | 673 |
Principal collections | 17,508 | 11,630 |
Purchases | -26,959 | -48,601 |
FHLB stock purchases | ' | -9 |
FHLB stock stock redemptions | 99 | 159 |
Net (increase) decrease in loans | -17,091 | 10,808 |
Purchases of bank premises and equipment | -77 | -367 |
Proceeds from disposition of asset | ' | 15 |
Proceeds from sale of real estate owned | 87 | 495 |
Net cash used in investing activities | -24,433 | -12,530 |
Cash flows from financing activities: | ' | ' |
Net increase (decrease) in deposits | 9,087 | -8,264 |
Proceeds from other borrowings | 124 | 1,359 |
Repayments of other borrowings | -204 | -1,361 |
Cash dividends | -488 | -490 |
Net cash provided by (used in) financing activities | 8,519 | -8,756 |
Net decrease in cash and cash equivalents | -14,003 | -18,710 |
Cash and cash equivalents as of the beginning of the period | 42,586 | 61,296 |
Cash and cash equivalents as of the end of the period | 28,583 | 42,586 |
Cash paid during period for: | ' | ' |
Interest | 811 | 1,099 |
Noncash Transactions | ' | ' |
Loans transferred to OREO | 269 | 599 |
Net unrealized loss on investment securities available for sale, net of deferred income tax | -831 | -54 |
Loans transferred to foreclosed assets | ' | 590 |
Accretion of Series B preferred stock | 2 | 1 |
Adjustments related to defined benefit plans, net of deferred income tax expense | 814 | 85 |
Transfer of participation loans sold from other borrowings to loans | -2,010 | ' |
Transfer between fixed assets and non-interest bearing deposit account | ($39) | ' |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Summary Of Significant Accounting Policies | ' | ||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ||||||||||||||||||||
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||||||||||||||||
Nature of Operations - M&F Bancorp, Inc. (the “Company”) is a bank holding company, and the parent company of Mechanics and Farmers Bank (the “Bank”), a state chartered commercial bank incorporated in North Carolina (“NC”) in 1907, which began operations in 1908. The Bank has seven branches in NC: two in Durham, two in Raleigh, and one each in Charlotte, Greensboro and Winston-Salem. The Company, headquartered in Durham, operates as a single business segment and offers a wide variety of consumer and commercial banking services and products almost exclusively in NC. | |||||||||||||||||||||
Basis of Presentation - The Consolidated Financial Statements include the accounts and transactions of the Company and the Bank, the wholly owned subsidiary. All significant inter-company accounts and transactions have been eliminated in consolidation. | |||||||||||||||||||||
Segment Reporting - Based on an analysis performed by the Company, management has determined that the Company only has one operating segment, which is commercial banking. The chief operating decision-maker uses consolidated results to make operating and strategic decisions, and therefore, the Company is not required to disclose any additional segment information. | |||||||||||||||||||||
Cash and Cash Equivalents - The cash and cash equivalents are comprised of highly liquid short-term investments that are carried at cost, which approximates market value, and cash held at the Federal Reserve Bank of Richmond ("FRB"). The Board of Governors of the Federal Reserve (the “Federal Reserve”) and banking laws in NC require banks to maintain average balances in relation to specific percentages of their customers' deposits as a reserve. As of December 31, 2013 and 2012, the Bank, held deposits as shown: | |||||||||||||||||||||
Correspondent | |||||||||||||||||||||
Bank | |||||||||||||||||||||
Federal Reserve | Federal Funds | ||||||||||||||||||||
(Dollars in thousands) | Required Average | Excess | Sold | Core Deposits | Total | ||||||||||||||||
31-Dec-13 | $ | 1,520 | $ | 20,164 | $ | 3,000 | $ | 3,899 | $ | 28,583 | |||||||||||
31-Dec-12 | $ | 1,982 | $ | 36,122 | $ | — | $ | 4,482 | $ | 42,586 | |||||||||||
As of December 31, 2013 and 2012, the Bank held deposits of $0.4 million and $1.3 million, respectively at other financial institutions in excess of the federally insured balances. The December 31, 2012 excess resulted primarily from principal and interest payments on MBS, which were posted to our FHLB account. | |||||||||||||||||||||
Investment Securities - Debt securities that the Company has the positive intent and ability to hold to maturity are classified as “held to maturity securities” and reported at amortized cost. Debt and equity securities that are bought and held principally for the purpose of selling in the near term are classified as “trading securities” and reported at fair value, with unrealized gains and losses included in consolidated earnings. Debt securities not classified as either held to maturity securities or trading securities, and equity securities not classified as trading securities, are classified as “available for sale securities” and reported at fair value, with unrealized gains and losses excluded from consolidated earnings and reported as a separate component of consolidated stockholders' equity and as an item of other comprehensive income. The unrealized gain or loss of a security is identified and removed from other comprehensive income when a security is sold, matured, or called. The initial classification of securities is determined at the date of purchase. Gains and losses on sales of investment securities, computed based on specific identification of the adjusted cost of each security, are included in noninterest income at the time of sale. Premiums and discounts on debt securities are recognized in interest income using the interest method over the period to maturity, or when the debt securities are called. | |||||||||||||||||||||
Declines in the fair value of individual held to maturity and available for sale securities below their costs that are other-than-temporary result in write-downs of the individual securities to their respective fair value. The related credit write-downs are included in consolidated earnings as realized losses. Transfers of securities between classifications, of which there were none in 2013 or 2012, are accounted for at fair value. No securities were classified as trading or held to maturity as of December 31, 2013 and 2012. | |||||||||||||||||||||
Other Invested Assets - Other invested assets are investments in Federal Home Loan Bank of Atlanta (the “FHLB”) stock carried at historical cost, as adjusted for any other-than-temporary impairment loss. As of December 31, 2013 and 2012, the Company's investments in FHLB stock were $0.4 million and $0.5 million, respectively. | |||||||||||||||||||||
Loans - Loans are stated at the amount of unpaid principal, net of deferred loan origination fees and costs. Loans (net) are reduced by the allowance for loan losses. Nonrefundable loan fees, net of direct costs, associated with the origination or acquisition of loans are deferred and recognized as an adjustment of the loan yield over the life of the loan using the effective interest method. Interest on loans is accrued on the daily balances of unpaid principal outstanding. Interest income is accrued and credited to income only if deemed collectible. Other loan fees and charges, representing service costs for the prepayment of loans, for delinquent payments, or for miscellaneous loan services, are recorded in income when collected. | |||||||||||||||||||||
Non-Performing Loans and Leases - Generally, all classes of loans and leases are placed on non-accrual status upon becoming contractually past due 90 days or more as to principal or interest (unless loans are adequately secured by collateral, are in the process of collection, and are reasonably expected to result in repayment), or where substantial doubt about full repayment of principal or interest is evident. | |||||||||||||||||||||
When a loan or lease is placed on non-accrual status, regardless of class, the accrued and unpaid interest receivable is reversed and the loan or lease is accounted for on the cash or cost recovery method until qualifying for return to accrual status. All payments received on non-accrual loans and leases are applied against the principal balance of the loan or lease. Loans may be returned to accrual status when all principal and interest amounts contractually due (including any arrearages) are reasonably assured of repayment within a reasonable period, the borrower has demonstrated payment performance for a minimum of six months in accordance with the original or revised contractual terms of the loan, and when doubt about repayment is resolved. | |||||||||||||||||||||
Generally, for all classes of loans and leases, a charge-off is recorded when it is probable that a loss has been incurred and when it is possible to determine a reasonable estimate of the loss. For all classes of commercial loans and leases, a charge-off is determined on a judgmental basis after due consideration of the debtor's prospects for repayment and the fair value of collateral. For closed-end consumer loans, the entire outstanding balance of the loan is charged-off during the month that the loan becomes 120 days past due as to principal or interest. Consumer loans with non- real estate collateral are written down to the value of the collateral, less estimated costs to sell, if repossession of collateral is assured and in process. For residential mortgage and home equity loan classes, a partial charge-off is recorded at 120 days past due as to principal or interest for the amount that the loan balance exceeds the fair value of the collateral less estimated costs to sell. | |||||||||||||||||||||
Impaired Loans - A loan is considered impaired when, based on current information and events, it is probable that the Company will not be able to collect all amounts due from the borrower in accordance with the original contractual terms of the loan, including scheduled interest payments. Impaired loans include all classes of commercial non-accruing loans and Troubled Debt Restructurings ("TDRs"). | |||||||||||||||||||||
For all classes of commercial loans, a quarterly evaluation of specific individual commercial borrowers with identified weaknesses is performed to identify impaired loans. The identification of specific borrowers for review is based on a review of non-accrual loans as well as those loans specifically identified by management as exhibiting above average levels of risk. | |||||||||||||||||||||
When a loan has been identified as being impaired, the amount of impairment is measured based on the present value of expected future cash flows discounted at the loan's effective interest rate, the loan's observable market price, or the estimated fair value of the collateral, less any selling costs, if the loan is collateral-dependent. If the measurement of the impaired loan is less than the recorded investment in the loan (including accrued interest, net of deferred loan fees or costs and unamortized premiums or discounts), impairment is recognized by creating or adjusting an existing allocation of the Allowance, or by recording a partial charge-off of the loan to its estimated fair value. Interest payments made on impaired loans are typically applied to principal unless collectability of the principal amount is reasonably assured, in which case interest income may be accrued or recognized on a cash basis. | |||||||||||||||||||||
Loans Modified as a TDR - Loans are considered to have been modified as a TDR when the Company makes certain concessions to a borrower experiencing financial difficulty. Concessions to the borrower at modification may include interest rate reductions, principal or interest forgiveness, forbearance, and other actions intended to minimize economic loss and to avoid foreclosure or repossession of collateral. Generally, a non-accrual loan that has been modified in a TDR remains on non-accrual status for a period of six months to demonstrate that the borrower is able to meet the terms of the modified loan. However, performance prior to the modification, or significant events that coincide with the modification, are included in assessing whether the borrower can meet the new terms and may result in the loan being returned to accrual status at the time of loan modification or after a shorter performance period. Since the economic crisis began in 2008, management has elected to offer concessions to borrowers with identified financial weaknesses, even if the borrowers have continued making scheduled payments, working with the borrowers to enable them to continue meeting their obligations to repay the debt to the Company. | |||||||||||||||||||||
Income Recognition on Impaired and Nonaccrual Loans - Loans, including impaired loans, are generally classified as nonaccrual if they are past due as to maturity, or payment of principal or interest for a period of more than 90 days, unless such loans are well secured and in the process of collection. If a loan or a portion of a loan is classified as doubtful or is partially charged off, the loan is generally classified as nonaccrual. Loans that are on a current payment status or past due less than 90 days may also be classified as nonaccrual if full repayment of principal and/or interest is in doubt. | |||||||||||||||||||||
Loans may be returned to accrual status when all principal and interest amounts contractually due (including arrearages) are reasonably assured of repayment within a reasonable period of time, and the borrower has demonstrated payment performance for a minimum of six months in accordance with the contractual terms involving payments of cash or cash equivalents. | |||||||||||||||||||||
In the case where a nonaccrual loan had been partially charged off, recognition of interest on a cash basis is limited to that which would have been recognized on the remaining loan balance at the contractual interest rate. Receipts in excess of that amount are recorded as recoveries to the allowance for loan losses until prior charged off balances have been fully recovered. | |||||||||||||||||||||
Reserve for Credit Losses - The Company's reserve for credit losses is comprised of two components, the allowance for loan losses (the "ALLL") and the reserve for unfunded commitments (the "Unfunded Reserve"). | |||||||||||||||||||||
Allowances for Loan Losses - The ALLL is a valuation allowance, which is established through a provision for loan losses charged to expense. When management believes that the collectability of the principal is unlikely, loans are charged against the ALLL. Subsequent recoveries, if any, are credited to the ALLL. | |||||||||||||||||||||
The ALLL is management's estimate of probable losses that are inherent in the loan portfolio. The ALLL is based on regular quarterly assessments. The methodologies for measuring the appropriate level of the ALLL include the combination of a quantitative historical loss history by loan type and a qualitative analysis for loans not classified as impaired or TDRs, and a specific allowance method for impaired and TDR loans. The qualitative analysis is patterned after the guidelines provided under the Securities Exchange Commission (“SEC”) Staff Accounting Bulletin 102 and the Federal Financial Institutions Examination Council (“FFIEC”) Interagency Policy Statement on the Allowance for Loan and Lease Losses and include the following: | |||||||||||||||||||||
• | Changes in lending policies and procedures, including underwriting standards and collection, charge-off, and recovery practices; | ||||||||||||||||||||
• | Changes in national economic and business conditions and developments and the effect of unemployment on African Americans, who are the majority of our customers; | ||||||||||||||||||||
• | Changes in the nature and volume of the loan portfolio; | ||||||||||||||||||||
• | Changes in the experience, ability, and depth of lending management and staff; | ||||||||||||||||||||
• | Changes in trends of the volume and severity of past due and classified loans; and changes in trends in the volume of non-accrual loans, troubled debt restructurings and classified loans; | ||||||||||||||||||||
• | Changes in the quality of the loan review system and the degree of oversight by the Bank's Board of Directors; | ||||||||||||||||||||
• | The existence and effect of any concentrations of credit, and changes in the level of such concentrations; and | ||||||||||||||||||||
• | The effect of external factors such as competition and legal and regulatory requirements. | ||||||||||||||||||||
Management has developed, from historical loan and economic information, quantitative drivers for certain qualitative factors. Management has identified which factors, by nature, are subjective, such as lending policies, competition, and regulatory requirements. The quantitative drivers of qualitative factors, to which different weights assigned based on management's judgment, are reviewed and updated quarterly based on updated quarterly and eight-quarter rolling data. The quantitative loss history is based on an eight-quarter rolling history of losses incurred by different loan types within the loan portfolio. | |||||||||||||||||||||
A specific ALLL is established for loans identified as impaired or TDRs, based on significant conditions or circumstances related to the specific credits. The specific allowance amounts are determined by a method prescribed by Accounting Standards Codification (“ASC”) 310, Receivables. Loans identified as impaired are accounted for in accordance with one of three valuations: (i) the present value of future cash flows discounted at the loan's effective interest rate; (ii) the loan's observable market price, or (iii) the fair value of the collateral, if the loan collateral dependent, less estimated liquidation costs. A loan is considered impaired when it is probable that not all amounts due (principal and interest) will be collectible according to the original 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. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. The significance of payment delays and payment shortfalls are considered on a loan-by-loan basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower's prior payment record, and the amount of the shortfall in relation to the principal and interest owed. | |||||||||||||||||||||
For commercial business, faith-based non-profit, real estate and certain consumer loans, the measurement of loan impairment is based on the present value of the expected future cash flows, discounted at the loan's effective interest rate, or on the fair value of the loan's collateral if the loan is collateral dependent. Most consumer loans are smaller balance and homogeneous, and are evaluated for impairment on a collective basis, applying the quantitative loss history and the qualitative factors. Impairment losses are included in the ALLL through a charge to the provision for loan losses. | |||||||||||||||||||||
The Company uses several credit quality indicators to manage credit risk in an ongoing manner. The Company's risk rating system was developed to aid in the risk management process by grouping credits with similar risk profiles into pass, internal watch, special mention, or criticized categories. Credit risk ratings are applied individually to all classes of loans and leases. Internal credit reviews and external contracted credit review examinations are used to determine and validate loan risk grades. The credit review system takes into consideration factors such as: borrower's background and experience; historical and current financial condition; credit history and payment performance; economic conditions and their impact on various industries; type, market value and volatility of the market value of collateral; lien position; and the financial strength of guarantors. | |||||||||||||||||||||
The process of assessing the adequacy of the ALLL is necessarily subjective. Further, and particularly in periods of economic downturns, it is reasonably possible that future credit losses may exceed historical loss levels and may also exceed management's current estimates of incurred credit losses inherent within the loan portfolio. As such, there can be no assurance that future loan charge-offs will not exceed management's current estimate of what constitutes a reasonable ALLL. | |||||||||||||||||||||
The Company and the Bank are subject to periodic examination by their federal and state regulators, and may be required by such regulators to recognize additions to the allowance for loan losses based on their assessment of credit information available to them at the time of their examinations. | |||||||||||||||||||||
Reserve for Unfunded Commitments - The Unfunded Reserve is a component of other liabilities and represents the estimate for probable credit losses inherent in unfunded commitments to extend credit. Unfunded commitments to extend credit include unfunded loans with available balances, new commitments to lend that are not yet funded, and standby and commercial letters of credit. The process used to determine the Unfunded Reserve is consistent with the process for determining the ALLL, as adjusted for estimated funding probabilities and historical eight quarter rolling quantitative loan loss factors. The level of the Unfunded Reserve is adjusted by recording an expense or recovery in other noninterest expense. The balances of $13 thousand and $55 thousand for December 31, 2013 and 2012, respectively, were reflected in other liabilities on the Consolidated Balance Sheet. | |||||||||||||||||||||
Bank Premises and Equipment, Net - Premises and equipment are stated at cost less accumulated depreciation and amortization. For financial reporting purposes, depreciation and amortization are computed by the straight-line method and are charged to operations over the estimated useful lives of the assets, which range from 30 to 50 years for premises; generally 6-10 years for furniture and equipment, and 3-5 years for information technology equipment and software. Leasehold improvements are amortized over the terms of the respective leases or the useful lives of the improvements, whichever is shorter. Maintenance and repairs are charged to operations as incurred. The Bank reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amounts of such assets may not be recoverable. If the sum of the expected cash flows attributable to an asset is less than the stated amount of the asset, an impairment loss is recognized in the current period and charged to operations. Upon disposition, the asset and related accumulated depreciation and/or amortization are relieved, and any gains or losses are reflected in operations. | |||||||||||||||||||||
Cash Surrender Value of Life Insurance - The Bank maintains life insurance on certain current and former officers and directors, of which the Bank is owner and beneficiary. The cash surrender value of the policies at December 31, 2013 and 2012 was $6.2 million and $6.0 million, respectively. Income from the policies and changes in the net cash surrender value are recorded in noninterest income. | |||||||||||||||||||||
Other Real Estate Owned - Other real estate owned ("OREO"), which represents real estate acquired through foreclosure, or the transfer of the deed in lieu of foreclosure, in satisfaction of commercial and consumer real estate collateralized loans, is initially recorded at fair value less estimated holding and selling costs of the real estate. Loan balances in excess of the fair value of the real estate acquired at the date of the foreclosure are charged to the ALLL. Any subsequent operating expenses or income, reduction in estimated fair values, and gains or losses on disposition of such properties are charged or credited to non-interest income or non-interest expense. Valuations are periodically performed by management, and any subsequent write-downs due to the carrying value of a property exceeding its estimated fair value less estimated costs to sell are charged against other non-interest expense. As of December 31, 2013 and 2012, there was $3.0 million and $3.1 million, respectively, of foreclosed properties included in OREO on the Consolidated Balance Sheets. OREO excludes bank-owned property held for sale at December 31, 2013 and 2012. | |||||||||||||||||||||
Earnings Per Share - Earnings per share are calculated on the basis of the weighted average number of shares of common stock outstanding for the purpose of computing the basic earnings per share and the weighted average number of shares of common stock outstanding plus dilutive common stock equivalents, such as stock options, for the purpose of computing diluted earnings per share. As of December 31, 2013 and 2012, there were no stock options outstanding. | |||||||||||||||||||||
Advertising Costs - Adverting is expensed as incurred. | |||||||||||||||||||||
Income Taxes - Provisions for income taxes are based on amounts reported in the Consolidated Statements of Income (after exclusion of non- taxable income such as interest on state and municipal securities) and include changes in deferred income taxes. Deferred tax asset and liability balances reflect temporary differences at the tax rate expected to be in effect when taxes will become payable or receivable. Temporary differences are differences between the tax basis of assets and liabilities and their reported amounts in the Consolidated Financial Statements that will result in taxable or deductible amounts in future years. The effect of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded for deferred tax assets if the Company determines that it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company regularly reviews its deferred tax assets for recoverability considering historical profitability, projected future taxable income, and the expected timing of the reversals of existing temporary differences and tax planning strategies. | |||||||||||||||||||||
When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that ultimately would be sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more- likely-than not that the position will be sustained upon examination, including the resolution of appeals or litigation process, if any. The evaluation of a tax position taken is considered by itself and not offset or aggregated with other positions. Tax positions that meet the more-likely-than not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying Consolidated Balance Sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest and penalties associated with unrecognized tax benefits are recognized in income tax expense on the income statement. It is the Company's policy to recognize interest and penalties related to unrecognized tax liabilities within income tax expense in the statements of income. The Company does not have an accrual for uncertain tax positions as of December 31, 2013 and 2012, as deductions taken and benefits accrued are based on widely understood administrative practices and procedures and are based on tax law. The Company's federal and state income tax returns are subject to review and examination by government authorities. | |||||||||||||||||||||
Comprehensive Income (Loss) - Comprehensive income (loss) is the change in the Company's equity during the period from transactions and other events and circumstances from non-owner sources. Total comprehensive income (loss) consists of net income and other comprehensive (loss) income. The Company's other comprehensive (loss) income and accumulated other comprehensive loss are comprised of net unrealized gains and losses on certain investments in debt securities and post-retirement plans. Information concerning the Company’s other comprehensive (loss) income and accumulated comprehensive loss as of and for the years ended December 31, 2013 and 2012 are presented in the consolidated statements of comprehensive income. | |||||||||||||||||||||
Fair Values of Financial Instruments - Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in Note 17. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect the estimates. Fair value is defined as the exchange price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Generally accepted accounting principles (“GAAP”) establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. The fair value hierarchy gives the highest priority to quoted prices in active markets (observable inputs) and the lowest priority to the Company's assumptions (unobservable inputs). GAAP requires fair value measurements to be separately disclosed by level within the fair value hierarchy. For assets and liabilities recorded at fair value, the Company maximizes the use of observable inputs and minimizes the use of unobservable inputs when developing fair value measurements. | |||||||||||||||||||||
The Company utilizes fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. Available-for-sale investment securities are recorded at fair value on a recurring basis. Additionally, the Company may be required to record at fair value other assets on a nonrecurring basis, such as loans held for sale, loans held for investment and certain other assets. | |||||||||||||||||||||
Under GAAP, the Company groups assets and liabilities at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. The Company did not have any changes in leveling inputs in 2013. | |||||||||||||||||||||
These levels are: | |||||||||||||||||||||
Level 1 — Valuations for assets and liabilities traded in active exchange markets, such as the New York Stock Exchange. | |||||||||||||||||||||
Level 2 — Valuations are obtained from readily available pricing sources via independent providers for market transactions involving similar assets or liabilities. The Company’s principal market for these securities is the secondary institutional markets and valuations are based on observable market data in those markets. Level 2 securities include U. S. Agencies, state and municipal bonds and MBS. | |||||||||||||||||||||
Level 3 — Valuations for assets and liabilities that are derived from other valuation methodologies, including option pricing models, discounted cash flow models and similar techniques, and not based on market exchange, dealer, or broker traded transactions. Level 3 valuations incorporate certain assumptions and projections in determining the fair value assigned to such assets. | |||||||||||||||||||||
Use of Estimates - The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Material estimates that are susceptible to change in the near term relate to the determination of the ALLL and the provision for loan losses, the evaluation of other-than-temporary impairment of investment securities, accounting for deferred tax assets and related valuation allowances, the determination of the fair values of investment securities and other accounting for incentive compensation, and post-retirement benefits. Actual results could differ from those estimates. | |||||||||||||||||||||
Significant Group Concentrations - Most of the Bank's activities are with customers located within the state of NC. The Bank does have concentrations with respect to loans to and deposits from faith-based non-profit organizations as outlined in Notes 6 and 8 to the Consolidated Financial Statements. | |||||||||||||||||||||
Mortgage Servicing Rights - Mortgage servicing rights are recognized as assets when mortgage loans are sold and the rights to service those loans are retained. Mortgage servicing rights are initially recorded at fair value by using a discounted cash flow model to calculate the present value of estimated future net servicing income. | |||||||||||||||||||||
The Company's mortgage servicing rights accounted for under the amortization method are initially recorded at fair value. The Company obtains an annual appraisal of its mortgage servicing rights and adjusts the carrying value accordingly. During the year, the carrying value is amortized based on the year-end appraisal to total serviced mortgage balances outstanding as of quarter end. | |||||||||||||||||||||
New Accounting Pronouncements – | |||||||||||||||||||||
In April 2011 the FASB issued Accounting Standards Update (“ASU”) 2011-02 to assist creditors with their determination of when a restructuring is a Troubled Debt Restructuring. The determination is based on whether the restructuring constitutes a concession and whether the debtor is experiencing financial difficulties as both events must be present. The new guidance was effective for the Company beginning January 1, 2012 and did not have a material effect on the Company’s TDR determinations. | |||||||||||||||||||||
In April 2011, the criteria used to determine effective control of transferred assets in the Transfers and Servicing topic of the ASC was amended by ASU 2011-03. The requirement for the transferor to have the ability to repurchase or redeem the financial assets on substantially the agreed terms and the collateral maintenance implementation guidance related to that criterion were removed from the assessment of effective control. The other criteria to assess effective control were not changed. The amendments were effective for the Company on January 1, 2012 and had no effect on the financial statements. | |||||||||||||||||||||
In May 2011, the FASB issued ASU No. 2011-04, “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs.” ASU No. 2011-04 results in a consistent definition of fair value and common requirements for measurement of and disclosure about fair value between GAAP and International Financial Reporting Standards (“IFRS”). The changes to GAAP as a result of ASU No. 2011-04 are as follows are as follows: (1) The concepts of highest and best use and valuation premise are only relevant when measuring the fair value of non-financial assets (that is, it does not apply to financial assets or any liabilities); (2) GAAP currently prohibits application of a blockage factor in valuing financial instruments with quoted prices in active markets, whereas ASU No. 2011-04 extends that prohibition to all fair value measurements; (3) An exception is provided to the basic fair value measurement principles for an entity that holds a group of financial assets and financial liabilities with offsetting positions in market risks or counterparty credit risk that are managed on the basis of the entity’s net exposure to either of those risks. This exception allows the entity, if certain criteria are met, to measure the fair value of the net asset or liability position in a manner consistent with how market participants would price the net risk position; (4) The fair value measurement of instruments classified within an entity shareholders’ equity is aligned with the guidance for liabilities; and (5) Disclosure requirements have been enhanced for recurring Level 3 fair value measurements to disclose quantitative information about unobservable inputs and assumptions used, to describe the valuation processes used by the entity, and to describe the sensitivity of fair value measurements to changes in unobservable inputs and interrelationships between those inputs. In addition, entities must report the level in the fair value hierarchy of items that are not measured at fair value in the statement of condition but whose fair value must be disclosed. The provisions of ASU No. 2011-04 are effective for the Company’s interim reporting period beginning on or after December 15, 2011. The adoption of ASU No. 2011-04 did not have a material impact on the Company’s statements of income and condition, but did require new disclosures in 2012. | |||||||||||||||||||||
In June 2011, the FASB issued ASU No. 2011-05, “Presentation of Comprehensive Income.” The provisions of ASU No. 2011-05 allow an entity the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. The statement(s) are required to be presented with equal prominence as to other primary financial statements. ASU No. 2011-05 eliminates the option to present the components of other comprehensive income as part of the statement of changes in shareholders’ equity, but does not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income. The provisions of ASU No. 2011-05 are effective for the Company’s interim reporting period beginning on or after December 15, 2011, with retrospective application required. The Company adopted this ASU early. The adoption of ASU No. 2011-05 resulted in presentation changes to the Company’s statement of comprehensive income. The adoption of ASU No. 2011-05 did not have an impact on the Company’s statements of income and condition. | |||||||||||||||||||||
In February 2013, the FASB amended the Comprehensive Income topic of the ASC. The amendments address reporting of amounts reclassified out of accumulated other comprehensive income. Specifically, the amendments do not change the current requirements for reporting net income or other comprehensive income in financial statements. However, the amendments do require an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, in certain circumstances an entity is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income. The amendments were effective for the Company on a prospective basis for reporting periods beginning after December 15, 2012. The adoption of these amendments did not have a material effect on the consolidated financial statements of the Company, although new disclosures are included in these consolidated financial statements. | |||||||||||||||||||||
On April 22, 2013, the FASB issued guidance addressing application of the liquidation basis of accounting. The guidance is intended to clarify when an entity should apply the liquidation basis of accounting. In addition, the guidance provides principles for the recognition and measurement of assets and liabilities and requirements for financial statements prepared using the liquidation basis of accounting. The amendments will be effective for entities that determine liquidation is imminent during annual reporting periods beginning after December 15, 2013, and interim reporting periods therein and those requirements should be applied prospectively from the day that liquidation becomes imminent. Early adoption is permitted. The Company does not expect these amendments to have any effect on its financial statements. | |||||||||||||||||||||
In December 2013, the FASB amended the Master Glossary of the FASB Codification to define “Public Business Entity” to minimize the inconsistency and complexity of having multiple definitions of, or a diversity in practice as to what constitutes, a nonpublic entity and public entity within U.S. GAAP. The amendment does not affect existing requirements, however will be used by the FASB, the Private Company Council (“PCC”), and the Emerging Issues Task Force (“EITF”) in specifying the scope of future financial accounting and reporting guidance. The Company does not expect this amendment to have any 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. |
INVESTMENT_SECURITIES
INVESTMENT SECURITIES | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
Investment Securities | ' | ||||||||||||||||||||||||
INVESTMENT SECURITIES | ' | ||||||||||||||||||||||||
2. INVESTMENT SECURITIES | |||||||||||||||||||||||||
The main objectives of our investment strategy are to provide a source of liquidity while managing our interest rate risk, and to generate an adequate level of interest income without taking undue risks. Our investment policy permits investments in various types of securities, certificates of deposit and federal funds sold in compliance with various restrictions in the policy. As of December 31, 2013 and December 31, 2012 all investment securities were classified as available for sale. | |||||||||||||||||||||||||
Our available-for-sale securities totaled $65.9 million and $60.8 million as of December 31, 2013 and 2012, respectively. In the normal course of business, the Company pledges securities to the FRB and to public housing authorities in NC and the NC Department of State Treasurer as collateral for public deposits. The following table shows the amounts pledged as well as a letter of credit with the FHLB utilized in lieu of pledged investments for the public housing authorities and State Treasurer: | |||||||||||||||||||||||||
(Dollars in thousands) | 31-Dec-13 | 31-Dec-12 | |||||||||||||||||||||||
Pledged to FRB | $ | 1,018 | $ | 1,095 | |||||||||||||||||||||
Pledged for public housing | 3,452 | 4,856 | |||||||||||||||||||||||
Pledged to the NC State Treasurer | 15,353 | 2,579 | |||||||||||||||||||||||
Letter of Credit with the FHLB | 2,000 | 2,000 | |||||||||||||||||||||||
Our investment portfolio consists of the following securities: | |||||||||||||||||||||||||
• | U.S. Government agency securities (“U.S. Agencies”) | ||||||||||||||||||||||||
• | U.S. Government sponsored residential mortgage backed securities (“MBS”), and | ||||||||||||||||||||||||
• | North Carolina Municipal securities (“Municipals”) | ||||||||||||||||||||||||
The amortized cost, gross unrealized gains and losses and fair values of investment securities at December 31, 2013 and 2012 were: | |||||||||||||||||||||||||
(Dollars in thousands) | Amortized | Gross | Gross | Fair Value | |||||||||||||||||||||
Cost | Unrealized | Unrealized | |||||||||||||||||||||||
Gains | Losses | ||||||||||||||||||||||||
31-Dec-13 | |||||||||||||||||||||||||
US government agencies | $ | 7,000 | $ | — | $ | (234 | ) | $ | 6,766 | ||||||||||||||||
Government sponsored MBS | |||||||||||||||||||||||||
Residential | 58,086 | 118 | (506 | ) | 57,698 | ||||||||||||||||||||
Municipal securities | |||||||||||||||||||||||||
North Carolina | 1,485 | 21 | (51 | ) | 1,455 | ||||||||||||||||||||
Total at December 31, 2013 | $ | 66,571 | $ | 139 | $ | (791 | ) | $ | 65,919 | ||||||||||||||||
31-Dec-12 | |||||||||||||||||||||||||
US government agencies | $ | 1,322 | $ | 5 | $ | — | $ | 1,327 | |||||||||||||||||
Government sponsored MBS | |||||||||||||||||||||||||
Residential | 57,333 | 627 | (29 | ) | 57,931 | ||||||||||||||||||||
Municipal securities | |||||||||||||||||||||||||
North Carolina | 1,497 | 56 | — | 1,553 | |||||||||||||||||||||
Total at December 31, 2012 | $ | 60,152 | $ | 688 | $ | (29 | ) | $ | 60,811 | ||||||||||||||||
Sales and calls of securities available for sale for the year ended December 31, 2013 and December 31, 2012 resulted in aggregate gross realized gains of none and $445 thousand, respectively, and no realized losses during either period. | |||||||||||||||||||||||||
The amortized cost and estimated market values of securities as of December 31, 2013 by contractual maturities with the exception of MBS, which reflects projected cash flow streams, are shown below. Actual maturities may differ, because borrowers may have the right to call or prepay MBS, collateralized mortgage obligations, agency securities, and municipal bonds with or without call or prepayment penalties. Certain mortgage-backed securities have adjustable interest rates and will reprice within the various maturity ranges. These repricing schedules are not reflected in the table below. | |||||||||||||||||||||||||
(Dollars in thousands) | As of December 31, 2013 | ||||||||||||||||||||||||
Fair Value | Amortized Cost | ||||||||||||||||||||||||
US government agencies | |||||||||||||||||||||||||
Due after one year through five years | $ | 4,934 | $ | 5,000 | |||||||||||||||||||||
Due after five years through ten years | 1,832 | 2,000 | |||||||||||||||||||||||
Total US government agencies | $ | 6,766 | $ | 7,000 | |||||||||||||||||||||
Government sponsored MBS | |||||||||||||||||||||||||
Residential | |||||||||||||||||||||||||
Due within one year | $ | 12,090 | $ | 12,156 | |||||||||||||||||||||
Due after one year through five years | 25,152 | 25,314 | |||||||||||||||||||||||
Due after five years through ten years | 12,450 | 12,560 | |||||||||||||||||||||||
Due after ten years | 8,006 | 8,056 | |||||||||||||||||||||||
Total government sponsored MBS | $ | 57,698 | $ | 58,086 | |||||||||||||||||||||
Municipal bonds | |||||||||||||||||||||||||
North Carolina | |||||||||||||||||||||||||
Due within one year | $ | 472 | $ | 465 | |||||||||||||||||||||
Due after one year through five years | 437 | 423 | |||||||||||||||||||||||
Due after five years through ten years | 546 | 597 | |||||||||||||||||||||||
Total North Carolina municipal bonds | $ | 1,455 | $ | 1,485 | |||||||||||||||||||||
(Dollars in thousands) | As of December 31, 2012 | ||||||||||||||||||||||||
Fair Value | Amortized Cost | ||||||||||||||||||||||||
US government agencies | |||||||||||||||||||||||||
Due within one year | $ | 1,005 | $ | 1,000 | |||||||||||||||||||||
Due after one year through five years | 322 | 322 | |||||||||||||||||||||||
Total US government agencies | $ | 1,327 | $ | 1,322 | |||||||||||||||||||||
Government sponsored MBS | |||||||||||||||||||||||||
Residential | |||||||||||||||||||||||||
Due after one year through five years | $ | 135 | $ | 126 | |||||||||||||||||||||
Due after five years through ten years | 171 | 161 | |||||||||||||||||||||||
Due after ten years | 57,625 | 57,046 | |||||||||||||||||||||||
Total government sponsored MBS | $ | 57,931 | $ | 57,333 | |||||||||||||||||||||
Municipal bonds | |||||||||||||||||||||||||
North Carolina | |||||||||||||||||||||||||
Due within one year | $ | 488 | $ | 466 | |||||||||||||||||||||
Due after one year through five years | 458 | 425 | |||||||||||||||||||||||
Due after five years through ten years | 607 | 606 | |||||||||||||||||||||||
Total North Carolina municipal bonds | $ | 1,553 | $ | 1,497 | |||||||||||||||||||||
As of December 31, 2013 and December 31, 2012, the fair value of securities with gross unrealized losses by length of time that the individual securities have been in an unrealized loss position is as follows: | |||||||||||||||||||||||||
(Dollars in thousands) | Less Than 12 Months | 12 Months or Greater | Total | ||||||||||||||||||||||
Fair Value | Unrealized | Fair Value | Unrealized | Fair Value | Unrealized | ||||||||||||||||||||
Losses | Losses | Losses | |||||||||||||||||||||||
31-Dec-13 | |||||||||||||||||||||||||
US government agencies | $ | 6,766 | $ | (234 | ) | $ | — | $ | — | $ | 6,766 | $ | (234 | ) | |||||||||||
Government sponsored MBS | |||||||||||||||||||||||||
Residential | 46,373 | (506 | ) | 20 | — | 46,393 | (506 | ) | |||||||||||||||||
Municipal securities | |||||||||||||||||||||||||
North Carolina | 546 | (51 | ) | — | — | 546 | (51 | ) | |||||||||||||||||
Total at December 31, 2013 | $ | 53,685 | $ | (791 | ) | $ | 20 | $ | — | $ | 53,705 | $ | (791 | ) | |||||||||||
(Dollars in thousands) | Less Than 12 Months | 12 Months or Greater | Total | ||||||||||||||||||||||
Fair Value | Unrealized | Fair Value | Unrealized | Fair Value | Unrealized | ||||||||||||||||||||
Losses | Losses | Losses | |||||||||||||||||||||||
31-Dec-12 | |||||||||||||||||||||||||
Government sponsored MBS | |||||||||||||||||||||||||
Residential | $ | 8,027 | $ | (29 | ) | $ | 21 | $ | — | $ | 8,048 | $ | (29 | ) | |||||||||||
Total at December 31, 2012 | $ | 8,027 | $ | (29 | ) | $ | 21 | $ | — | $ | 8,048 | $ | (29 | ) | |||||||||||
All securities owned as of December 31, 2013 and December 31, 2012 were investment grade. The Company evaluates securities for other-than- temporary impairment, at least on a quarterly basis. Consideration is given to the financial condition and near-term prospects of the issuer, the length of time and extent to which the fair value has been less than cost, and our intent and ability to retain our investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value. As of December 31, 2013 and 2012, the Company held 68 and 11 investment positions, respectively, with unrealized losses of $791.2 thousand and $29.5 thousand, respectively. These investments were in US government agencies, US government sponsored MBS and municipals. In analyzing an issuer’s financial condition, management considers whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, and industry analysts’ reports. Management has determined that all declines in the market value of available for sale securities are not other-than-temporary, and will not be likely required to sell. |
FHLB_STOCK
FHLB STOCK | 12 Months Ended |
Dec. 31, 2013 | |
Fhlb Stock | ' |
FHLB STOCK | ' |
3. FHLB STOCK | |
To be a member of the FHLB System, the Bank is required to maintain an investment in capital stock of the FHLB in an amount equal to 0.12% of its total assets as of December 31 of the prior year (up to a maximum of $20.0 million), plus 4.5% of its outstanding FHLB advances. The carrying value of FHLB stock, which is included in other invested assets, as of December 31, 2013 and 2012 was $0.4 million and $0.5 million, respectively. No ready market exists for the FHLB stock, and it has no quoted market value, however, management believes that the cost approximates the market value as of December 31, 2013 and 2012. The FHLB, of which the bank is a member, has been impacted by the Recession that began in 2008. Management has reviewed its investment in FHLB stock for impairment and does not believe it is impaired as of December 31, 2013 or 2012. The FHLB of Atlanta in which the Company owns stock has been profitable in each of the years ended December 31, 2013 and 2012. |
RECONCILIATIONS_OF_BASIC_AND_D
RECONCILIATIONS OF BASIC AND DILUTED EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2013 | |
Reconciliations Of Basic And Diluted Earnings Per Share | ' |
RECONCILIATIONS OF BASIC AND DILUTED EARNINGS (LOSS) PER SHARE ("EPS") | ' |
4. RECONCILIATIONS OF BASIC AND DILUTED EARNINGS PER SHARE ("EPS") | |
Basic EPS is computed by dividing net income after preferred stock dividends by the weighted average number shares of common stock outstanding for the period. Basic EPS excludes the dilutive effect that could occur if any options or warrants to purchase shares of common stock were exercised. Diluted EPS is computed by dividing net income by the sum of the weighted average number of shares of common stock outstanding for the period plus the number of additional shares of common stock that would have been outstanding if the potentially dilutive common shares had been issued. There are no stock options or warrants outstanding for any of the periods being reported. |
ACCUMULATED_OTHER_COMPREHENSIV
ACCUMULATED OTHER COMPREHENSIVE INCOME | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Cash paid during period for: [Abstract] | ' | ||||||||||||
ACCUMULATED OTHER COMPREHENSIVE INCOME | ' | ||||||||||||
5. ACCUMULATED OTHER COMPREHENSIVE INCOME | |||||||||||||
Comprehensive income includes net income and all other changes to the Company's equity, with the exception of transactions with stockholders. The Company's other comprehensive income and accumulated other comprehensive income are comprised of unrealized gains and losses on certain investments in debt securities and defined benefit plan adjustments. | |||||||||||||
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) BY COMPONENT | |||||||||||||
For the Years Ended December 31, 2012 and 2013 | |||||||||||||
(Dollars in thousands) | |||||||||||||
Unrealized | Defined | Total | |||||||||||
Gains and | Benefit | ||||||||||||
Losses on | Pension Items | ||||||||||||
Available-for- | |||||||||||||
Sale Securities | |||||||||||||
Balance as of December 31, 2011 | $ | 481 | $ | (1,920 | ) | $ | (1,439 | ) | |||||
Other comprehensive income before reclassifications | 313 | 84 | 397 | ||||||||||
Amounts reclassified from acumulated other comprehensive income | (367 | ) | 1 | (366 | ) | ||||||||
Net current-period other comprehensive income | (54 | ) | 85 | 31 | |||||||||
Balance as of December 31,2012 | $ | 427 | $ | (1,835 | ) | $ | (1,408 | ) | |||||
Balance as of December 31, 2012 | $ | 427 | $ | (1,835 | ) | $ | (1,408 | ) | |||||
Other comprehensive loss before reclassifications | (831 | ) | 813 | (18 | ) | ||||||||
Amounts reclassified from acumulated other comprehensive loss | — | 1 | 1 | ||||||||||
Net current-period other comprehensive loss | (831 | ) | 814 | (17 | ) | ||||||||
Balance as of December 31, 2013 | $ | (404 | ) | $ | (1,021 | ) | $ | (1,425 | ) | ||||
All amounts are net of tax. |
LOANS_AND_ALLOWANCE_FOR_LOAN_L
LOANS AND ALLOWANCE FOR LOAN LOSSES | 12 Months Ended | ||||||||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||||||||
Loans And Allowance For Loan Losses | ' | ||||||||||||||||||||||||||||||||
LOANS AND ALLOWANCE FOR LOAN LOSSES ("ALLL") | ' | ||||||||||||||||||||||||||||||||
6. LOANS AND ALLOWANCE FOR LOAN LOSSES ("ALLL") | |||||||||||||||||||||||||||||||||
The ALLL is management's estimate of losses inherent in the loan portfolio. The provision for loan losses is the amount charged against earnings to establish an adequate ALLL. Loan losses and recoveries are charged to or credited to the ALLL, rather than reported as a direct expense or recovery. The loan portfolio is segmented into three parts for the ALLL calculation: impaired commercial loans and smaller balance homogenous loans in the process of foreclosure, TDRs (collectively referred to as "impaired loans"), and all other loans. | |||||||||||||||||||||||||||||||||
For all classes of commercial loans, a quarterly evaluation of specific individual borrowers is performed to identify impaired loans. The identification of specific borrowers for review is based on a review of non-accrual loans as well as those loans specifically identified by management as exhibiting above average levels of risk through the loan classification process. The ALLL attributed to impaired loans and TDRs considers all available evidence based on significant conditions or circumstances related to the specific credits. The specific allowance amounts are determined by a method prescribed by ASC 310. The loans identified as impaired and TDRs are accounted for in accordance with one of three valuations: (i) the present value of future cash flows discounted at the loan’s effective interest rate; (ii) the loan’s observable market price, or (iii) the fair value of the collateral, if the loan is collateral dependent, less estimated liquidation costs. Factors considered by management in determining impairment include payment status, collateral value, alternate use of special purpose real estate which could adversely impact resale, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. The significance of payment delays and payment shortfalls are considered on a loan-by-loan basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. Interest payments made on impaired loans are typically applied to principal unless collectability of the principal amount is reasonably assured, in which case interest income may be accrued or recognized on a cash basis. | |||||||||||||||||||||||||||||||||
Most consumer loans are evaluated for impairment on a collective basis, because these loans are for smaller balances and are homogeneous. Any loans, including commercial loans, not specifically identified as impaired or TDRs, are collectively evaluated and segmented by loan type, applying two factors: the quantitative loss history by loan type for the previous eight quarters compared to average loans outstanding for the same period (the "quantitative factor"), and a qualitative factor that is comprised of quantitatively-driven calculations based on historical data, and subjective factors (the "qualitative factors"). The quantitative portion of the ALLL is adjusted for qualitative factors to account for model imprecision and to incorporate the range of probable outcomes inherent in the estimates used for the allowance. | |||||||||||||||||||||||||||||||||
The quantitative factor by loan type is applied against the unimpaired loan balances and smaller-balance homogenous impaired loans not in the process of foreclosure for which there is no specific reserve to determine the quantitative reserve. The qualitative factors, including (i) policy underwriting, charge-off and collection, (ii) national and local economic conditions, (iii) nature and volume of the portfolio, (iv) experience, ability, and depth of lending team, (v) trends of past due, classified loans, and restructurings, (vi) quality of loan review and board oversight, (vii) existence, levels, and effect of loan concentrations and (viii) effects of external factors such as competition and regulatory oversight, are adjusted quarterly based on historical information for any quantifiable factors and qualitative judgments for subjective factors (those considered subjective are policy, underwriting, experience, ability and depth of lending team, quality of loan review and board oversight, and effects of external factors), and applied in total to each loan balance by loan type. The Company continues to enhance its modeling of the portfolio and underlying risk factors through quarterly analytical reviews with the goal of ensuring it captures all pertinent factors contributing to risk of loss inherent in the loan portfolio. Under ASC 310, the non-homogenous impaired loans, homogenous small balance real estate secured loans in process of foreclosure for which the value is less than the loan principal balance, and TDRs, are reviewed individually for impairment. | |||||||||||||||||||||||||||||||||
The process of assessing the adequacy of the ALLL is inherently subjective. Further, and particularly in terms of economic downturns, it is reasonably possible that future credit losses may exceed historical loss levels and may also exceed management’s current estimates of incurred credit losses inherent within the loan portfolio. As such, there can be no assurance that future loan charge-offs will not exceed management’s current estimate of what constitutes a reasonable allowance for loan losses. | |||||||||||||||||||||||||||||||||
The Company and the Bank are subject to periodic examination by their federal and state banking regulators, and may be required by their regulators to recognize additions to the allowance for loan losses based on their assessment of credit information available to them at the time of their examinations. | |||||||||||||||||||||||||||||||||
As of December 31, 2013 and December 31, 2012, the ALLL was $3.5 million, which represented approximately 1.84% and 2.00% of loans outstanding, net of unearned income and deferred costs ("net loans outstanding"), on those respective dates. Loans increased $14.3 million from December 31, 2012 to December 31, 2013, impaired loans increased $6.6 million over the same period, and the reserve allocated for impaired loans individually evaluated increased by $0.5 million over the same period. As of December 31, 2013, the total loans collectively evaluated totaled $158.9 compared to $153.0 million at December 31, 2012. The corresponding allowance for loans collectively reviewed for impairment totaled $2.5 million and $3.0 million at December 31, 2013 and December 31, 2012, respectively. Net charge-offs totaled $0.3 million and $0.5 million for the years ended December 31, 2013 and December 31, 2012, respectively. | |||||||||||||||||||||||||||||||||
During the fourth quarter of 2012, the Company converted from a spreadsheet calculated ALLL to a more robust system provided by a third party servicing company. Historic quantitative and qualitative factors were carried forward to the new system as well as an eight-quarter look back period for measuring loss histories. Slight variations in loss history calculations from the old system to the new, resulted in a variance of approximately $261 thousand. Management elected to retain the variance as an unallocated reserve as the team continued to validate and integrate nuances in the new system. | |||||||||||||||||||||||||||||||||
Of the non-accruing loans totaling $6.7 million at December 31, 2013, 0.43% are secured by faith-based non-profit real estate, 99.41% are secured by real estate excluding faith-based non-profit, which factors management believes lessens the risk of loss. TDRs in compliance with the modified terms totaled $21.5 million or 81.54% were in compliance with modified terms at December 31, 2013. GAAP does not provide specific guidance on when a loan may be returned to accrual status. Federal banking regulators have provided guidance that interest on impaired loans, including TDRs, should only be recorded when there has been a sustained period of repayment performance, the loan is well secured, and collection under any revised term is assessed as probable. The Company evaluates impaired and TDR performance under the banking guidelines and returns loans to accruing after a sustained period of repayment performance. | |||||||||||||||||||||||||||||||||
Loans are generally placed on non-accrual status when the scheduled payments reach 90 days past due. Loans are charged-off, with Board approval, when the Chief Credit Officer and his staff determine that all reasonable means of collection of the outstanding balances, except foreclosure, have been exhausted. The Company continues its collection efforts subsequent to charge-off, which historically has resulted in some recoveries each year. | |||||||||||||||||||||||||||||||||
The composition of the loan portfolio, net of deferred fees and costs, by loan classification as of December 31, 2013 and 2012: | |||||||||||||||||||||||||||||||||
(Dollars in thousands) | 31-Dec-13 | 31-Dec-12 | |||||||||||||||||||||||||||||||
Commercial | $ | 12,344 | $ | 3,282 | |||||||||||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||||||
Construction | 4,758 | 3,621 | |||||||||||||||||||||||||||||||
Owner occupied | 22,186 | 18,377 | |||||||||||||||||||||||||||||||
Other | 32,145 | 26,171 | |||||||||||||||||||||||||||||||
Faith-based non-profit: | |||||||||||||||||||||||||||||||||
Construction | — | 2,344 | |||||||||||||||||||||||||||||||
Owner Occupied | 78,761 | 76,418 | |||||||||||||||||||||||||||||||
Other | 6,702 | 7,135 | |||||||||||||||||||||||||||||||
Residential real estate: | |||||||||||||||||||||||||||||||||
First mortgage | 22,350 | 24,702 | |||||||||||||||||||||||||||||||
Multifamily | 3,271 | 5,828 | |||||||||||||||||||||||||||||||
Home equity | 3,051 | 3,161 | |||||||||||||||||||||||||||||||
Construction | 241 | 83 | |||||||||||||||||||||||||||||||
Consumer | 1,340 | 1,346 | |||||||||||||||||||||||||||||||
Other loans | 2,326 | 2,754 | |||||||||||||||||||||||||||||||
Loans, net of deferred fees | 189,475 | 175,222 | |||||||||||||||||||||||||||||||
ALLL | (3,493 | ) | (3,499 | ) | |||||||||||||||||||||||||||||
Loans, net of ALLL | $ | 185,982 | $ | 171,723 | |||||||||||||||||||||||||||||
The Bank has a concentration of loans to faith-based non-profit organizations, in which the Bank has specialized lending experience. At December 31, 2013, the percentage of loans in this niche, which included construction, owner occupied real estate secured, and other loans, comprised 45.11% of the total loan portfolio. The reserve allocated for these loans is 53.91% of the total ALLL. Historically the Bank has experienced low levels of loan losses in this niche; however, repayment of these loans is generally dependent on voluntary contributions, some of which have been adversely affected by the economic downturn. | |||||||||||||||||||||||||||||||||
In 2010, management enhanced its loan-related disclosure classifications in its financial reports to present portfolio segments. A portfolio segment is defined as the level at which an entity develops and documents a systematic methodology to determine its allowance for loan losses. The following tables present the reported investment in loans, net of deferred fees and costs, by portfolio segment and based on impairment method as of December 31, 2013 and December 31, 2012, respectively: | |||||||||||||||||||||||||||||||||
For the Year Ended December 31, 2013 | |||||||||||||||||||||||||||||||||
Faith- | |||||||||||||||||||||||||||||||||
Based | Residential | ||||||||||||||||||||||||||||||||
Commercial | Non- | Real | Other | ||||||||||||||||||||||||||||||
(Dollars in thousands) | Commercial | Real Estate | Profit | Estate | Consumer | Loans | Unallocated | Total | |||||||||||||||||||||||||
ALLL: | |||||||||||||||||||||||||||||||||
Total ending ALLL balances as of December 31, 2012 | $ | 90 | $ | 881 | $ | 1,246 | $ | 937 | $ | 30 | $ | 54 | $ | 261 | $ | 3,499 | |||||||||||||||||
For the year ended December 31, 2013 | |||||||||||||||||||||||||||||||||
Charge-offs | (7 | ) | (237 | ) | — | (138 | ) | (4 | ) | (20 | ) | — | (406 | ) | |||||||||||||||||||
Recoveries | — | 27 | — | 26 | 8 | 10 | — | 71 | |||||||||||||||||||||||||
Provision for loan losses | 101 | 137 | 637 | (332 | ) | (15 | ) | 62 | (261 | ) | 329 | ||||||||||||||||||||||
Total ending ALLL balances as of December 31, 2013 | $ | 184 | $ | 808 | $ | 1,883 | $ | 493 | $ | 19 | $ | 106 | $ | — | $ | 3,493 | |||||||||||||||||
31-Dec-13 | |||||||||||||||||||||||||||||||||
Faith | |||||||||||||||||||||||||||||||||
Based | |||||||||||||||||||||||||||||||||
Commercial | Non- | Residential | Other | ||||||||||||||||||||||||||||||
(Dollars in thousands) | Commercial | Real Estate | Profit | Real Estate | Consumer | Loans | Unallocated | Total | |||||||||||||||||||||||||
ALLL: | |||||||||||||||||||||||||||||||||
Ending ALLL balance attributable to loans: | |||||||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | — | $ | — | $ | 931 | $ | 75 | $ | — | $ | — | $ | — | $ | 1,006 | |||||||||||||||||
Collectively evaluated for impairment | 184 | 808 | 952 | 418 | 19 | 106 | — | 2,487 | |||||||||||||||||||||||||
Total ending ALLL balance | $ | 184 | $ | 808 | $ | 1,883 | $ | 493 | $ | 19 | $ | 106 | $ | — | $ | 3,493 | |||||||||||||||||
Loans: | |||||||||||||||||||||||||||||||||
Loans individually evaluated for impairment | $ | — | $ | 9,029 | $ | 17,661 | $ | 3,947 | $ | 11 | $ | — | $ | — | $ | 30,648 | |||||||||||||||||
Loans collectively evaluated for imapirment | 12,344 | 50,060 | 67,802 | 24,966 | 1,329 | 2,326 | — | 158,827 | |||||||||||||||||||||||||
Total ending loans balance | $ | 12,344 | $ | 59,089 | $ | 85,463 | $ | 28,913 | $ | 1,340 | $ | 2,326 | $ | — | $ | 189,475 | |||||||||||||||||
For the Year Ended December 31, 2012 | |||||||||||||||||||||||||||||||||
Faith- | |||||||||||||||||||||||||||||||||
Based | Residential | ||||||||||||||||||||||||||||||||
Commercial | Non- | Real | Other | ||||||||||||||||||||||||||||||
(Dollars in thousands) | Commercial | Real Estate | Profit | Estate | Consumer | Loans | Unallocated | Total | |||||||||||||||||||||||||
ALLL: | |||||||||||||||||||||||||||||||||
Total ending ALLL balances as of December 31, 2011 | $ | 348 | $ | 971 | $ | 1,128 | $ | 1,299 | $ | 62 | $ | 42 | $ | — | $ | 3,850 | |||||||||||||||||
For the year ended December 31, 2012 | |||||||||||||||||||||||||||||||||
Charge-offs | — | (98 | ) | — | (362 | ) | (169 | ) | — | — | (629 | ) | |||||||||||||||||||||
Recoveries | — | 75 | — | 17 | 20 | — | — | 112 | |||||||||||||||||||||||||
Provision (decrease) increase | (258 | ) | (67 | ) | 118 | (17 | ) | 117 | 12 | 261 | 166 | ||||||||||||||||||||||
Total ending ALLL balance as of December 31, 2012 | $ | 90 | $ | 881 | $ | 1,246 | $ | 937 | $ | 30 | $ | 54 | $ | 261 | $ | 3,499 | |||||||||||||||||
31-Dec-11 | |||||||||||||||||||||||||||||||||
Faith | |||||||||||||||||||||||||||||||||
Based | |||||||||||||||||||||||||||||||||
Commercial | Non- | Residential | Other | ||||||||||||||||||||||||||||||
(Dollars in thousands) | Commercial | Real Estate | Profit | Real Estate | Consumer | Loans | Unallocated | Total | |||||||||||||||||||||||||
ALLL: | |||||||||||||||||||||||||||||||||
Ending ALLL balance attributable to loans: | |||||||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | — | $ | 119 | $ | 56 | $ | 543 | $ | 2 | $ | — | $ | — | $ | 720 | |||||||||||||||||
Collectively evaluated for impairment | 348 | 852 | 1,072 | 756 | 60 | 42 | — | 3,130 | |||||||||||||||||||||||||
Total ending ALLL balance | $ | 348 | $ | 971 | $ | 1,128 | $ | 1,299 | $ | 62 | $ | 42 | $ | — | $ | 3,850 | |||||||||||||||||
Loans: | |||||||||||||||||||||||||||||||||
Loans individually evaluated for impairment | $ | 590 | $ | 6,828 | $ | 13,816 | $ | 2,180 | $ | 2 | $ | — | $ | — | $ | 23,416 | |||||||||||||||||
Loans collectively evaluated for impairment | 7,098 | 40,226 | 75,335 | 37,380 | 1,665 | 2,964 | — | 164,668 | |||||||||||||||||||||||||
Total ending loans balance | $ | 7,688 | $ | 47,054 | $ | 89,151 | $ | 39,560 | $ | 1,667 | $ | 2,964 | $ | — | $ | 188,084 | |||||||||||||||||
Impaired loans totaled $30.7 million at December 31, 2013 and $24.1 million as of December 31, 2012. The year ended December 31, 2013 showed a $6.6 million increase of impaired loans compared to year-end 2012. The change was due to the addition of one faith-based – owner-occupied loan totaling $1.4 million, three commercial real estate – owner occupied loans totaling $2.7 million, two commercial real estate other loans totaling $1.9 million and eight residential real estate – first mortgage loans totaling $0.6 million. | |||||||||||||||||||||||||||||||||
The following tables show impaired loans with and without valuation allowances as of December 31, 2013 and 2012: | |||||||||||||||||||||||||||||||||
31-Dec-13 | |||||||||||||||||||||||||||||||||
Interest | |||||||||||||||||||||||||||||||||
Unpaid | Earned | Average | |||||||||||||||||||||||||||||||
Principal | Recorded | ALLL | For the | Recorded | |||||||||||||||||||||||||||||
(Dollars in thousands) | Balance | Investment | Allocated | Year | Investment | ||||||||||||||||||||||||||||
With no related allowance recorded: | |||||||||||||||||||||||||||||||||
Commercial | $ | — | $ | — | $ | — | $ | — | $ | 74 | |||||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||||||
Construction | 363 | 364 | — | 28 | 321 | ||||||||||||||||||||||||||||
Owner occupied | 3,181 | 3,183 | — | 142 | 1,194 | ||||||||||||||||||||||||||||
Other | 5,486 | 5,503 | — | 256 | 4,858 | ||||||||||||||||||||||||||||
Faith based non-profit: | |||||||||||||||||||||||||||||||||
Construction | — | — | — | — | — | ||||||||||||||||||||||||||||
Owner occupied | 14,151 | 14,203 | — | 681 | 12,880 | ||||||||||||||||||||||||||||
Other | — | — | — | — | — | ||||||||||||||||||||||||||||
Residential real estate: | |||||||||||||||||||||||||||||||||
First mortgage | 3,116 | 3,119 | — | 213 | 2,143 | ||||||||||||||||||||||||||||
Multifamily | — | — | — | — | — | ||||||||||||||||||||||||||||
Home equity | 77 | 77 | — | 3 | 50 | ||||||||||||||||||||||||||||
Construction | — | — | — | — | — | ||||||||||||||||||||||||||||
Consumer | 11 | 11 | — | — | 9 | ||||||||||||||||||||||||||||
Impaired loans with no allowance recorded | $ | 26,385 | $ | 26,460 | $ | — | $ | 1,323 | $ | 21,529 | |||||||||||||||||||||||
With an allowance recorded: | |||||||||||||||||||||||||||||||||
Commercial | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||||||
Construction | — | — | — | — | — | ||||||||||||||||||||||||||||
Owner occupied | — | — | — | — | 59 | ||||||||||||||||||||||||||||
Other | — | — | — | — | 251 | ||||||||||||||||||||||||||||
Faith based non-profit: | |||||||||||||||||||||||||||||||||
Construction | — | — | — | — | — | ||||||||||||||||||||||||||||
Owner occupied | 3,510 | 3,500 | 931 | 242 | 631 | ||||||||||||||||||||||||||||
Other | — | — | — | — | — | ||||||||||||||||||||||||||||
Residential real estate: | |||||||||||||||||||||||||||||||||
First mortgage | 621 | 623 | 38 | 29 | 1,017 | ||||||||||||||||||||||||||||
Multifamily | — | — | — | — | — | ||||||||||||||||||||||||||||
Home equity | 131 | 131 | 37 | 6 | 42 | ||||||||||||||||||||||||||||
Construction | — | — | — | — | — | ||||||||||||||||||||||||||||
Consumer | — | — | — | — | — | ||||||||||||||||||||||||||||
Impaired loans with allowance recorded | $ | 4,262 | $ | 4,254 | $ | 1,006 | $ | 277 | $ | 2,000 | |||||||||||||||||||||||
Impaired loans | $ | 30,647 | $ | 30,714 | $ | 1,006 | $ | 1,600 | $ | 23,529 | |||||||||||||||||||||||
31-Dec-12 | |||||||||||||||||||||||||||||||||
Interest | |||||||||||||||||||||||||||||||||
Unpaid | Earned | Average | |||||||||||||||||||||||||||||||
Principal | Recorded | ALLL | For the | Recorded | |||||||||||||||||||||||||||||
(Dollars in thousands) | Balance | Investment | Allocated | Year | Investment | ||||||||||||||||||||||||||||
With no related allowance recorded: | |||||||||||||||||||||||||||||||||
Commercial | $ | — | $ | — | $ | — | $ | — | $ | 295 | |||||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||||||
Construction | 371 | 371 | — | 31 | 300 | ||||||||||||||||||||||||||||
Owner occupied | 530 | 530 | — | 38 | 635 | ||||||||||||||||||||||||||||
Other | 4,312 | 3,698 | — | 129 | 4,473 | ||||||||||||||||||||||||||||
Faith based non-profit: | |||||||||||||||||||||||||||||||||
Construction | — | — | — | — | — | ||||||||||||||||||||||||||||
Owner occupied | 14,479 | 14,479 | — | 567 | 12,261 | ||||||||||||||||||||||||||||
Other | — | — | — | — | 1,611 | ||||||||||||||||||||||||||||
Residential real estate: | |||||||||||||||||||||||||||||||||
First mortgage | 814 | 814 | — | 19 | 2,671 | ||||||||||||||||||||||||||||
Multifamily | — | — | — | — | — | ||||||||||||||||||||||||||||
Home equity | 86 | 86 | — | 3 | 111 | ||||||||||||||||||||||||||||
Construction | — | — | — | — | — | ||||||||||||||||||||||||||||
Consumer | 16 | 16 | — | — | 4 | ||||||||||||||||||||||||||||
Impaired loans with no allowance recorded | $ | 20,608 | $ | 19,994 | $ | — | $ | 787 | $ | 22,361 | |||||||||||||||||||||||
With an allowance recorded: | |||||||||||||||||||||||||||||||||
Commercial | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||||||
Construction | — | — | — | — | — | ||||||||||||||||||||||||||||
Owner occupied | 238 | 238 | 87 | 15 | 60 | ||||||||||||||||||||||||||||
Other | — | — | — | — | 500 | ||||||||||||||||||||||||||||
Faith based non-profit: | |||||||||||||||||||||||||||||||||
Construction | — | — | — | — | 214 | ||||||||||||||||||||||||||||
Owner occupied | 428 | 428 | 44 | 30 | — | ||||||||||||||||||||||||||||
Other | — | — | — | — | — | ||||||||||||||||||||||||||||
Residential real estate: | |||||||||||||||||||||||||||||||||
First mortgage | 1,543 | 1,543 | 349 | 45 | 757 | ||||||||||||||||||||||||||||
Multifamily | — | — | — | — | — | ||||||||||||||||||||||||||||
Home equity | — | — | — | — | — | ||||||||||||||||||||||||||||
Construction | — | — | — | — | — | ||||||||||||||||||||||||||||
Consumer | — | — | — | — | — | ||||||||||||||||||||||||||||
Impaired loans with allowance recorded | $ | 2,209 | $ | 2,209 | $ | 480 | $ | 90 | $ | 1,531 | |||||||||||||||||||||||
Impaired loans | $ | 22,817 | $ | 22,203 | $ | 480 | $ | 877 | $ | 23,892 | |||||||||||||||||||||||
Impaired loans not included in the above tables are the recorded investments of $1.9 million in homogeneous first mortgage residential real estate loans, which are collectively measured for impairment. Total impaired loans were $24.1 million at December 31, 2013. | |||||||||||||||||||||||||||||||||
The recorded investment in loan balance is net of deferred fees and costs, and partial charge-offs, where applicable. | |||||||||||||||||||||||||||||||||
The Bank modifies certain loans and provides a concession such as a reduced rate, extended terms, or reduction of principal and/or interest, in a TDR where the borrowers are experiencing financial difficulties. These concessions typically result from loss mitigation recommendations developed by the Bank's problem loan team. Concessions could include reductions in below market interest rates, payment extensions, forbearance or other actions. TDRs are generally classified as nonperforming at the time of restructuring and may only be returned to performing status after considering the borrower's sustained repayment performance for a reasonable period, generally six months. | |||||||||||||||||||||||||||||||||
When loans are modified as TDRs, the Bank evaluates each loan for any possible impairment based on the present value of expected future cash flows, discounted at the contractual interest rate of the original loan agreement, except when the repayment source is expected to be the liquidation of underlying collateral, in which cases the Bank uses the fair value of the collateral, less selling costs, instead of discounted cash flows. If the Bank determines that the value of the modified loan is less than the recorded investment in the loan (net of previous charge-offs, deferred loan fees or costs and unamortized premium or discount), impairment is recognized through an allowance allocation or a charge-off to the allowance. | |||||||||||||||||||||||||||||||||
The Bank completed four TDR modifications within the year ended December 31, 2013. All of the TDRs were secured by real estate. Of the four loans restructured during the year ended December 31, 2013, one loan totaling $2.6 million was not in compliance with the restructured terms. Based upon financial analysis and the fair value of collateral, the Bank has allocated $0.9 million of specific reserves for TDRs. | |||||||||||||||||||||||||||||||||
The followings tables present details of TDR loans that were restructured during the year ended December 31, 2013 and 2012: | |||||||||||||||||||||||||||||||||
31-Dec-13 | Pre-modification Outstanding | Post-Modification Outstanding | |||||||||||||||||||||||||||||||
(Dollars in thousands) | Number of loans | Recorded Investment | Recorded Investment | ||||||||||||||||||||||||||||||
Below market interest rate | |||||||||||||||||||||||||||||||||
and extended payment terms | |||||||||||||||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||||||
Owner occupied | 1 | $ | 2,645 | $ | 2,598 | ||||||||||||||||||||||||||||
Faith-based non-profit: | |||||||||||||||||||||||||||||||||
Owner Occupied | 1 | 1,284 | 1,273 | ||||||||||||||||||||||||||||||
Below market interest rates | |||||||||||||||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||||||
Owner occupied | 1 | 1,840 | 1,840 | ||||||||||||||||||||||||||||||
Extended payment terms | |||||||||||||||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||||||
Owner occupied | 1 | 40 | 21 | ||||||||||||||||||||||||||||||
Total | 4 | $ | 5,809 | $ | 5,732 | ||||||||||||||||||||||||||||
31-Dec-12 | Pre-modification Outstanding | Post-Modification Outstanding | |||||||||||||||||||||||||||||||
(Dollars in thousands) | Number of loans | Recorded Investment | Recorded Investment | ||||||||||||||||||||||||||||||
Below market interest rate | |||||||||||||||||||||||||||||||||
Faith-based non-profit: | |||||||||||||||||||||||||||||||||
Owner Occupied | 1 | $ | 2,522 | $ | 2,484 | ||||||||||||||||||||||||||||
Extended payment terms | |||||||||||||||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||||||
Owner occupied | 1 | 82 | 80 | ||||||||||||||||||||||||||||||
Other | 1 | 353 | 351 | ||||||||||||||||||||||||||||||
Faith-based non-profit: | |||||||||||||||||||||||||||||||||
Owner Occupied | 4 | 1,635 | 1,615 | ||||||||||||||||||||||||||||||
Residential real estate: | |||||||||||||||||||||||||||||||||
First mortgage | 1 | 37 | 34 | ||||||||||||||||||||||||||||||
Total | 8 | $ | 4,629 | $ | 4,564 | ||||||||||||||||||||||||||||
The following table presents loans modified as TDRs with a payment default occurring within 12 months of the restructure date, during the years ended December 31, 2013 and 2012: | |||||||||||||||||||||||||||||||||
31-Dec-13 | 31-Dec-12 | ||||||||||||||||||||||||||||||||
Default | Default | ||||||||||||||||||||||||||||||||
Number of | Recorded | Number of | Recorded | ||||||||||||||||||||||||||||||
(Dollars in thousands) | Loans | Investment | Loans | Investment | |||||||||||||||||||||||||||||
Below market interest rate and extended payment terms | 1 | $ | 2,598 | — | $ | — | |||||||||||||||||||||||||||
Below market interest rate | — | — | — | — | |||||||||||||||||||||||||||||
Extended payment terms | — | — | |||||||||||||||||||||||||||||||
Total | 1 | $ | 2,598 | — | $ | — | |||||||||||||||||||||||||||
The following tables present the recorded investment in non-accrual and loans past due over 90 days still on accrual by class of loans as of December 31, 2013 and 2012: | |||||||||||||||||||||||||||||||||
90 Days | |||||||||||||||||||||||||||||||||
or More | |||||||||||||||||||||||||||||||||
Past Due | |||||||||||||||||||||||||||||||||
31-Dec-13 | Still | ||||||||||||||||||||||||||||||||
(Dollars in thousands) | Non-accrual | Number | Accruing | Number | |||||||||||||||||||||||||||||
Commercial | $ | — | — | $ | — | — | |||||||||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||||||
Construction | — | — | — | — | |||||||||||||||||||||||||||||
Owner occupied | 2,676 | 3 | — | — | |||||||||||||||||||||||||||||
Other | 532 | 3 | 110 | 1 | |||||||||||||||||||||||||||||
Faith-based non-profit: | |||||||||||||||||||||||||||||||||
Construction | — | — | — | — | |||||||||||||||||||||||||||||
Owner Occupied | 29 | 1 | 332 | 1 | |||||||||||||||||||||||||||||
Other | — | — | — | — | |||||||||||||||||||||||||||||
Residential real estate: | |||||||||||||||||||||||||||||||||
First mortgage | 3,348 | 43 | 253 | 5 | |||||||||||||||||||||||||||||
Multifamily | — | — | — | — | |||||||||||||||||||||||||||||
Home equity | 124 | 7 | — | — | |||||||||||||||||||||||||||||
Construction | — | — | — | — | |||||||||||||||||||||||||||||
Consumer | 11 | 2 | — | — | |||||||||||||||||||||||||||||
Other loans | — | — | — | — | |||||||||||||||||||||||||||||
Total | $ | 6,720 | 59 | $ | 695 | 7 | |||||||||||||||||||||||||||
90 Days | |||||||||||||||||||||||||||||||||
or More | |||||||||||||||||||||||||||||||||
Past Due | |||||||||||||||||||||||||||||||||
31-Dec-12 | Still | ||||||||||||||||||||||||||||||||
(Dollars in thousands) | Non-accrual | Number | Accruing | Number | |||||||||||||||||||||||||||||
Commercial | $ | — | — | $ | — | — | |||||||||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||||||
Construction | — | — | — | — | |||||||||||||||||||||||||||||
Owner occupied | 39 | 1 | 224 | 4 | |||||||||||||||||||||||||||||
Other | 49 | 1 | 351 | 1 | |||||||||||||||||||||||||||||
Faith-based non-profit | |||||||||||||||||||||||||||||||||
Construction | — | — | — | — | |||||||||||||||||||||||||||||
Owner Occupied | 5,241 | 4 | 661 | 3 | |||||||||||||||||||||||||||||
Other | — | — | — | — | |||||||||||||||||||||||||||||
Residential real estate: | |||||||||||||||||||||||||||||||||
First mortgage | 3,384 | 44 | 357 | 6 | |||||||||||||||||||||||||||||
Multifamily | — | — | — | — | |||||||||||||||||||||||||||||
Home equity | 3 | 1 | 101 | 1 | |||||||||||||||||||||||||||||
Construction | — | — | — | — | |||||||||||||||||||||||||||||
Consumer | 16 | 2 | — | — | |||||||||||||||||||||||||||||
Other loans | — | — | — | — | |||||||||||||||||||||||||||||
Total | $ | 8,732 | 53 | $ | 1,694 | 15 | |||||||||||||||||||||||||||
Non-accrual loans and loans past due over 90 days still on accrual include both smaller balance homogenous loans that are collectively evaluated for impairment and individually classified impaired loans. Loans from which principal or interest is in default for 90 days or more are classified as a non-accrual unless they are well secured and in process of collection. Loans past due over 90 days still accruing were matured loans that were well secured and in process of collection. Borrowers have continued to make payments on these loans while administrative and legal due processes are proceeding which will enable the bank to extend or modify maturity dates. | |||||||||||||||||||||||||||||||||
Unrecognized income on non-accrual loans as of December 31, 2013 and December 31, 2012 was $0.5 million and $1.2 million, respectively, representing a decrease of $0.7 million in the most recent year. | |||||||||||||||||||||||||||||||||
Those loans over 90 days still accruing interest were in the process of modification. In these cases, the borrowers are still making payments. | |||||||||||||||||||||||||||||||||
The following tables present loans not past due, and the aging of past due loans as of December 31, 2013 and 2012 by class of loans: | |||||||||||||||||||||||||||||||||
90 Days | |||||||||||||||||||||||||||||||||
31-Dec-13 | 30-59 Days | 60-89 Days | Or More | Total Past | |||||||||||||||||||||||||||||
(Dollars in thousands) | Past Due | Past Due | Past Due | Due | Current | Total | |||||||||||||||||||||||||||
Commercial | $ | — | $ | 4 | $ | — | $ | 4 | $ | 12,340 | $ | 12,344 | |||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||||||
Construction | — | — | — | — | 4,758 | 4,758 | |||||||||||||||||||||||||||
Owner occupied | 77 | — | 2,675 | 2,752 | 19,434 | 22,186 | |||||||||||||||||||||||||||
Other | — | — | 642 | 642 | 31,503 | 32,145 | |||||||||||||||||||||||||||
Faith-based non-profit | |||||||||||||||||||||||||||||||||
Construction | — | — | — | — | — | — | |||||||||||||||||||||||||||
Owner Occupied | 2,859 | 29 | 333 | 3,221 | 75,540 | 78,761 | |||||||||||||||||||||||||||
Other | 1 | — | — | 1 | 6,701 | 6,702 | |||||||||||||||||||||||||||
Residential real estate: | |||||||||||||||||||||||||||||||||
First mortgage | 747 | 275 | 2,602 | 3,624 | 18,726 | 22,350 | |||||||||||||||||||||||||||
Multifamily | — | — | — | — | 3,271 | 3,271 | |||||||||||||||||||||||||||
Home equity | 241 | — | 118 | 359 | 2,692 | 3,051 | |||||||||||||||||||||||||||
Construction | — | — | — | — | 241 | 241 | |||||||||||||||||||||||||||
Consumer | 6 | 3 | 9 | 18 | 1,322 | 1,340 | |||||||||||||||||||||||||||
Other loans | — | — | — | — | 2,326 | 2,326 | |||||||||||||||||||||||||||
Total | $ | 3,931 | $ | 311 | $ | 6,379 | $ | 10,621 | $ | 178,854 | $ | 189,475 | |||||||||||||||||||||
90 Days | |||||||||||||||||||||||||||||||||
31-Dec-12 | 30-59 Days | 60-89 Days | Or More | Total Past | |||||||||||||||||||||||||||||
(Dollars in thousands) | Past Due | Past Due | Past Due | Due | Current | Total | |||||||||||||||||||||||||||
Commercial | $ | — | $ | 353 | $ | — | $ | 353 | $ | 2,929 | $ | 3,282 | |||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||||||
Construction | — | — | — | — | 3,621 | 3,621 | |||||||||||||||||||||||||||
Owner occupied | — | — | 263 | 263 | 18,114 | 18,377 | |||||||||||||||||||||||||||
Other | 1,570 | 856 | 400 | 2,826 | 23,345 | 26,171 | |||||||||||||||||||||||||||
Faith-based non-profit | |||||||||||||||||||||||||||||||||
Construction | — | — | — | — | 2,344 | 2,344 | |||||||||||||||||||||||||||
Owner Occupied | 1,845 | — | 661 | 2,506 | 73,912 | 76,418 | |||||||||||||||||||||||||||
Other | — | — | — | — | 7,135 | 7,135 | |||||||||||||||||||||||||||
Residential real estate: | |||||||||||||||||||||||||||||||||
First mortgage | 787 | 548 | 2,812 | 4,147 | 20,555 | 24,702 | |||||||||||||||||||||||||||
Multifamily | — | — | — | — | 5,828 | 5,828 | |||||||||||||||||||||||||||
Home equity | 122 | 120 | 108 | 350 | 2,811 | 3,161 | |||||||||||||||||||||||||||
Construction | — | — | — | — | 83 | 83 | |||||||||||||||||||||||||||
Consumer | 8 | 9 | — | 17 | 1,329 | 1,346 | |||||||||||||||||||||||||||
Other loans | — | — | — | — | 2,754 | 2,754 | |||||||||||||||||||||||||||
Total | $ | 4,332 | $ | 1,886 | $ | 4,244 | $ | 10,462 | $ | 164,760 | $ | 175,222 | |||||||||||||||||||||
Non-accrual loans decreased $2.0 million during the period ended December 31, 2013 from the period ended December 31, 2012, and total loans past due decreased by $1.5 million over the same period. Not reflected in the table above are non-accrual loans past due less than 30 days. As shown in the following table at December 31, 2013, the Company had $2.1 million in non-accrual loans that are less than 30 days past due. | |||||||||||||||||||||||||||||||||
The following table displays all non-accrual loans and loans 90 or more days past due and still on accrual for the period ended December 31, 2013. | |||||||||||||||||||||||||||||||||
(Dollars in thousands) | Non-accrual | Number | |||||||||||||||||||||||||||||||
Loans past due over 90 days still on accrual | $ | 695 | 7 | ||||||||||||||||||||||||||||||
Non-accrual loans past due | |||||||||||||||||||||||||||||||||
Less than 30 days | $ | 2,062 | 32 | ||||||||||||||||||||||||||||||
30-59 days | 495 | 3 | |||||||||||||||||||||||||||||||
60-89 days | 98 | 3 | |||||||||||||||||||||||||||||||
90+ days | 4,065 | 21 | |||||||||||||||||||||||||||||||
Non-accrual loans | $ | 6,720 | 59 | ||||||||||||||||||||||||||||||
The following table displays all non-accrual loans and loans 90 or more days past due and still on accrual for the period ended December 31, 2012. | |||||||||||||||||||||||||||||||||
(Dollars in thousands) | Non-accrual | Number | |||||||||||||||||||||||||||||||
Loans past due over 90 days still on accrual | $ | 1,694 | 15 | ||||||||||||||||||||||||||||||
Non-accrual loans past due | |||||||||||||||||||||||||||||||||
Less than 30 days | $ | 5,615 | 9 | ||||||||||||||||||||||||||||||
30-59 days | 300 | 6 | |||||||||||||||||||||||||||||||
60-89 days | 268 | 1 | |||||||||||||||||||||||||||||||
90+ days | 2,549 | 37 | |||||||||||||||||||||||||||||||
Non-accrual loans | $ | 8,732 | 53 | ||||||||||||||||||||||||||||||
The Company experienced $0.3 million in net loan charge-offs for the year ended December 31, 2013 compared to $0.5 million in net charge-offs for the year ended December 31, 2012. Net charge-offs totaled 0.19% and 0.29% of average loans outstanding for the years ended December 31, 2013 and 2012, respectively. | |||||||||||||||||||||||||||||||||
The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans for reserves according to the loan's classification as to credit risk. This analysis includes homogenous loans, such as commercial, commercial real estate and faith based non–profit entities, and mortgage loans in process of foreclosure for which the loan to value does not support repayment in full. This analysis is performed on at least a quarterly basis. The Company uses the following definitions for risk ratings: | |||||||||||||||||||||||||||||||||
• | Special Mention. Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date. These loans exhibit a moderate likelihood of some loss related to those loans and leases that are considered special mention. | ||||||||||||||||||||||||||||||||
• | Substandard. Loans classified as substandard are inadequately protected by the current sound financial repayment capacity and service coverage of the debtor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that may jeopardize the liquidation of or repayment according to the original terms of the debt. In addition to commercial and faith-based non-profit loans with identified weaknesses, substandard loans include loans within the mortgage and consumer portfolio segments that are past due 90 days or more as to principal or interest if the loan to value does not support full repayment. Substandard loans are evaluated for impairment on an individual loan basis unless the substandard loan is a smaller balance homogenous loan that is not a TDR and is not in the process of foreclosure. These loan exhibits a distinct possibility that the company will sustain some loss if the deficiencies related to the loans is not corrected in a timely manner. | ||||||||||||||||||||||||||||||||
• | Doubtful. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added character that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. | ||||||||||||||||||||||||||||||||
• | Pass. Loans are classified as pass in all classes within the commercial, faith-based non-profit, mortgage, consumer, and other portfolio segments that are not identified as special mention, substandard, or doubtful, are contractually current as to principal and interest, and are otherwise in compliance with the contractual terms of the loan agreement. These loans exhibit a low likelihood of loss related to loans that are considered pass. | ||||||||||||||||||||||||||||||||
Management’s definitions of risk characteristics were updated during 2010 and reaffirmed during subsequent years. | |||||||||||||||||||||||||||||||||
As of December 31, 2013, and based on the most recent analysis performed, the risk category of loans by class of loans was as follows: | |||||||||||||||||||||||||||||||||
(Dollars in thousands) | Pass | Special Mention | Substandard | Doubtful | Total | ||||||||||||||||||||||||||||
Commercial | $ | 12,342 | $ | — | $ | 2 | $ | — | $ | 12,344 | |||||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||||||
Construction | 4,396 | — | 362 | — | 4,758 | ||||||||||||||||||||||||||||
Owner occupied | 17,586 | 625 | 3,975 | — | 22,186 | ||||||||||||||||||||||||||||
Other | 27,584 | 2,703 | 1,858 | — | 32,145 | ||||||||||||||||||||||||||||
Faith-based non-profit: | |||||||||||||||||||||||||||||||||
Construction | — | — | — | — | — | ||||||||||||||||||||||||||||
Owner Occupied | 66,626 | 7,474 | 4,661 | — | 78,761 | ||||||||||||||||||||||||||||
Other | 6,701 | 1 | — | — | 6,702 | ||||||||||||||||||||||||||||
Residential real estate: | |||||||||||||||||||||||||||||||||
First mortgage | 17,890 | 427 | 4,033 | — | 22,350 | ||||||||||||||||||||||||||||
Multifamily | 3,171 | 38 | 62 | — | 3,271 | ||||||||||||||||||||||||||||
Home equity | 2,668 | — | 383 | — | 3,051 | ||||||||||||||||||||||||||||
Construction | 241 | — | — | — | 241 | ||||||||||||||||||||||||||||
Consumer | 1,323 | — | 17 | — | 1,340 | ||||||||||||||||||||||||||||
Other loans | 2,326 | — | — | — | 2,326 | ||||||||||||||||||||||||||||
Total | $ | 162,854 | $ | 11,268 | $ | 15,353 | $ | — | $ | 189,475 | |||||||||||||||||||||||
As of December 31, 2012, the risk category of loans by class of loans was as follows: | |||||||||||||||||||||||||||||||||
(Dollars in thousands) | Pass | Special Mention | Substandard | Doubtful | Total | ||||||||||||||||||||||||||||
Commercial | $ | 3,274 | $ | — | $ | 8 | $ | — | $ | 3,282 | |||||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||||||
Construction | 3,065 | — | 556 | — | 3,621 | ||||||||||||||||||||||||||||
Owner occupied | 13,379 | 3,151 | 1,847 | — | 18,377 | ||||||||||||||||||||||||||||
Other | 21,582 | 966 | 3,623 | — | 26,171 | ||||||||||||||||||||||||||||
Faith-based non-profit: | |||||||||||||||||||||||||||||||||
Construction | 2,344 | — | — | — | 2,344 | ||||||||||||||||||||||||||||
Owner Occupied | 58,732 | 5,313 | 12,373 | — | 76,418 | ||||||||||||||||||||||||||||
Other | 7,059 | 76 | — | — | 7,135 | ||||||||||||||||||||||||||||
Residential real estate: | |||||||||||||||||||||||||||||||||
First mortgage | 19,465 | 1,731 | 3,506 | — | 24,702 | ||||||||||||||||||||||||||||
Multifamily | 5,702 | 63 | 63 | — | 5,828 | ||||||||||||||||||||||||||||
Home equity | 2,853 | — | 308 | — | 3,161 | ||||||||||||||||||||||||||||
Construction | 83 | — | — | — | 83 | ||||||||||||||||||||||||||||
Consumer | 1,323 | 2 | 21 | — | 1,346 | ||||||||||||||||||||||||||||
Other loans | 2,754 | — | — | — | 2,754 | ||||||||||||||||||||||||||||
Total | $ | 141,615 | $ | 11,302 | $ | 22,305 | $ | — | $ | 175,222 | |||||||||||||||||||||||
BANK_PREMISES_AND_EQUIPMENT
BANK PREMISES AND EQUIPMENT | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Bank Premises And Equipment | ' | ||||||||
BANK PREMISES AND EQUIPMENT | ' | ||||||||
7. BANK PREMISES AND EQUIPMENT | |||||||||
Below is a summary of bank premises and equipment, net as of December 31, 2013 and 2012: | |||||||||
(Dollars in thousands) | 2013 | 2012 | |||||||
Land | $ | 747 | $ | 747 | |||||
Buildings and leasehold improvements | 7,227 | 7,242 | |||||||
Furniture and equipment | 2,347 | 2,294 | |||||||
Capital Lease | 295 | 295 | |||||||
10,616 | 10,578 | ||||||||
Less: accumulated depreciation and amortization | 6,243 | 5,895 | |||||||
$ | 4,373 | $ | 4,683 | ||||||
Total depreciation expense was $0.3 million for the years ended December 31, 2013 and 2012. |
DEPOSITS
DEPOSITS | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Deposits | ' | ||||||||||||||||
DEPOSITS | ' | ||||||||||||||||
8. DEPOSITS | |||||||||||||||||
Deposits are the Bank’s primary source of funds for making loans and purchasing investments. The Bank offers a variety of deposit account products to commercial and consumer customers. The total deposits that were re-classified to loans due to overdrafts were $204 thousand and $33 thousand for 2013 and 2012, respectively. | |||||||||||||||||
The following shows the maturity schedule of all time deposits: | |||||||||||||||||
(Dollars in thousands) | Amount | ||||||||||||||||
2014 | $ | 129,753 | |||||||||||||||
2015 | 11,451 | ||||||||||||||||
2016 | 1,718 | ||||||||||||||||
2017 | 628 | ||||||||||||||||
Thereafter | 262 | ||||||||||||||||
Total | $ | 143,812 | |||||||||||||||
Principal maturities of time deposits of $100,000 or more as of December 31, 2013 were as follows: | |||||||||||||||||
31-Dec-13 | 31-Dec-12 | ||||||||||||||||
(Dollars in thousands) | Amount | Average Rate | Amount | Average Rate | |||||||||||||
Three months or less | $ | 44,099 | 0.3 | % | 55,782 | 0.32 | % | ||||||||||
Over three months to six months | 21,123 | 0.31 | 5,568 | 0.27 | |||||||||||||
Over six months to twelve months | 46,272 | 0.38 | 44,120 | 0.51 | |||||||||||||
Over one year to five years | 10,409 | 0.57 | 6,532 | 0.83 | |||||||||||||
Total | $ | 121,903 | 0.36 | % | 112,002 | 0.42 | % | ||||||||||
For the years ended December 31, 2013 and December 31, 2012, the Bank had $0.6 million in interest expense for time deposits greater than $100,000. In the normal course of business, certain directors and executives of the Company and the Bank, including their immediate families and companies in which they have an interest, are deposit customers. These relationships had aggregate deposits of $1.4 million and $2.0 million as of December 31, 2013 and 2012, respectively. The Bank had three deposit relationships for the year ended December 31, 2013 and 2012 with individual balances in excess of five percent of total deposits totaling $55.0 million and $49.6 million, respectively. |
LEASES
LEASES | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Leases [Abstract] | ' | ||||
LEASES | ' | ||||
9. LEASES | |||||
The Bank leases premises and equipment under various operating lease agreements that provide for the payment of property taxes, insurance and maintenance costs. The following are future minimum capital lease payments as required under the agreements as of December 31, 2013: | |||||
(Dollars in thousands) | Amount | ||||
2014 | $ | 59 | |||
2015 | 60 | ||||
2016 | 46 | ||||
2017 | — | ||||
2018 | — | ||||
Thereafter | — | ||||
Total | $ | 165 | |||
The capital leases had an interest rate of 1.60% and an expense of $3.2 thousand for the year ended December 31, 2013. | |||||
The following are future minimum operating lease payments as required under the agreements: | |||||
(Dollars in thousands) | Amount | ||||
2014 | $ | 90 | |||
2015 | 19 | ||||
2016 | 4 | ||||
2017 | — | ||||
2018 | — | ||||
Thereafter | — | ||||
Total | $ | 113 | |||
Rent expense for all operating leases amounted to approximately $0.1 million in 2013 and 2012. | |||||
The Bank leases out office space in some of its vacant office space in its headquarters and branches. The following are the minimum rentals to be received under related lease agreements: | |||||
(Dollars in thousands) | Amount | ||||
2014 | $ | 120 | |||
2015 | 30 | ||||
2016 | 23 | ||||
Total | $ | 173 | |||
Rental income for the years ended December 31, 2013 and 2012 was $0.1 and $0.3 million, respectively. |
BORROWINGS
BORROWINGS | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
BorrowingsAbstract | ' | ||||||||
BORROWINGS | ' | ||||||||
10. BORROWINGS | |||||||||
Borrowings as of December 31, 2013 consisted of an FHLB borrowing of $0.7 million with an interest rate of 0.50% that matures in 2020 and a capital lease of $0.2 million with an interest rate of 1.60%. Please see Note 9 for details on leases. Interest expense on advances from FHLB for the years ended December 31, 2013 and December 31, 2012 was $3.5 thousand and $3.6 thousand, respectively. The maximum FHLB advances outstanding for the year ended December 31, 2013 were $0.7 million. As of December 31, 2013, the Bank had $0.7 million of outstanding advances with the FHLB, and had the borrowing availability of an additional $5.3 million from the FHLB. Pursuant to collateral agreements with the FHLB, advances are secured by FHLB stock, and qualifying loans totaling $8.0 million and $10.2 million as of December 31, 2013 and December 31, 2012, respectively. | |||||||||
The Company has federal funds lines of credit with three correspondent banks totaling $10.0 million. The Company periodically tests its federal funds lines of credit with its correspondent banks. These lines were tested quarterly during the year ended December 31, 2013. | |||||||||
The following is the outstanding principal maturities and interest rate of the Company's FHLB advances: | |||||||||
31-Dec-13 | |||||||||
Maturity Date | Amount | Rate | |||||||
(Dollars in thousands) | |||||||||
2014 | $ | 23 | 0.5 | % | |||||
2015 | 24 | 0.5 | % | ||||||
2016 | 24 | 0.5 | % | ||||||
2017 | 25 | 0.5 | % | ||||||
2018 | 26 | 0.5 | % | ||||||
Thereafter | 559 | 0.5 | % | ||||||
$ | 681 | 0.5 | % |
INCOME_TAXES
INCOME TAXES | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Income Taxes | ' | ||||||||
INCOME TAXES | ' | ||||||||
11. INCOME TAXES | |||||||||
The components of the income tax expense (benefit) for the years ended December 31, 2013 and 2012 were as follows: | |||||||||
(Dollars in thousands) | 2013 | 2012 | |||||||
Income tax expense (benefit) | |||||||||
Current | $ | 191 | $ | 6 | |||||
Deferred | (40 | ) | 110 | ||||||
Total | $ | 151 | $ | 116 | |||||
A reconciliation of reported income tax expense for the years ended December 31, 2013 and 2012 to the amount of tax expense computed by multiplying income before income taxes by the statutory federal income tax rate follows: | |||||||||
(Dollars in thousands) | 2013 | 2012 | |||||||
Statutory federal income tax rate | 34 | % | 34 | % | |||||
Tax provision at statutory rate | $ | 175 | $ | 156 | |||||
Increase (decrease) in income taxes resulting from: | |||||||||
State income taxes net of federal benefit | 77 | 7 | |||||||
Tax exempt interest income | (14 | ) | (37 | ) | |||||
Disallowed interest expense | — | 1 | |||||||
Increase in Valuation Allowance | (18 | ) | 41 | ||||||
Cash surrender value of life insurance | (71 | ) | (69 | ) | |||||
Other | 2 | 17 | |||||||
Total | $ | 151 | $ | 116 | |||||
The tax effect of the cumulative temporary differences and carry forwards that gave rise to the deferred tax assets and liabilities as of December 31, 2013 and December 31, 2012 within the Consolidated Balance Sheets were as follows: | |||||||||
(Dollars in thousands) | December 31, | ||||||||
2013 | 2012 | ||||||||
Deferred tax assets: | |||||||||
Accrued pension expense | $ | 421 | $ | 458 | |||||
Adjustments, defined benefit plans | 624 | 1,151 | |||||||
Deferred loan fees | 74 | 70 | |||||||
Excess book over tax provision for loan loss expense | 1,331 | 1,370 | |||||||
Federal net operating loss carryforward | 170 | 300 | |||||||
State net economic loss carryforward | 191 | 210 | |||||||
Impairment on investments | 73 | 74 | |||||||
OREO write-downs | 233 | 175 | |||||||
Deferred gain on other real estate owned | 4 | 18 | |||||||
Premises and equipment | 147 | 155 | |||||||
Alternative minimum tax | 556 | 383 | |||||||
Unrealized gains on securities available for sale | 248 | — | |||||||
Other, net | 77 | 59 | |||||||
Total deferred tax assets | 4,149 | 4,423 | |||||||
Valuation allowance for deferred tax assets | (222 | ) | (240 | ) | |||||
Net of valuation allowance deferred tax asset | 3,927 | 4,183 | |||||||
Deferred tax liabilities: | |||||||||
Unrealized gains on securities available for sale | — | (232 | ) | ||||||
Other | (116 | ) | (132 | ) | |||||
Total deferred tax liabilities | (116 | ) | (364 | ) | |||||
Net deferred tax assets | 3,811 | 3,819 | |||||||
Tax Receivable, net | 342 | 568 | |||||||
Deferred tax assets and taxes receivable, net | $ | 4,153 | $ | 4,387 | |||||
The Company has federal net operating loss carry-forwards of approximately $0.5 million at December 31, 2013, which can be used to offset future taxable income, subject to certain Section 382 limitations. The federal loss carry-forwards start to expire in 2027. The Company’s state net operating losses contain amounts, which the Company determined do not meet the “more likely than not” threshold for recognition. Accordingly, a valuation allowance has been established for the state loss carry-forward amounts. The last tax year audited by the Internal Revenue Service was 2006; tax years 2010 – 2012 are open for audit under the statute of limitations. |
EMPLOYEE_BENEFIT_PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
Employee Benefit Plans | ' | ||||||||||||||||||||||||
EMPLOYEE BENEFIT PLANS | ' | ||||||||||||||||||||||||
12. EMPLOYEE BENEFIT PLANS | |||||||||||||||||||||||||
The Bank sponsors a noncontributory defined benefit cash balance pension plan (the “Cash Balance Plan”), covering all employees who qualify under length of service and other requirements. Under the Cash Balance Plan, retirement benefits are based on years of service and average earnings. The Bank’s funding policy is to contribute amounts to the Cash Balance Plan sufficient to meet the minimum funding requirements set forth in the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), plus such additional amounts as the Bank may determine to be appropriate. The contributions to the Cash Balance Plan paid during the years ended December 31, 2013 and 2012 totaled $0.3 million and $0.4 million, respectively. The Cash Balance Plan was not fully funded as of December 31, 2013 and December 31, 2012. The measurement date for the Cash Balance Plan is December 31 and prior service costs and benefits are amortized on a straight-line basis over the average remaining service period of active participants. | |||||||||||||||||||||||||
It is expected that the Company will contribute $0.3 million to the Cash Balance Plan during 2014. | |||||||||||||||||||||||||
The following table shows the type of assets held in the Cash Balance Plan: | |||||||||||||||||||||||||
As of December 31, | |||||||||||||||||||||||||
Asset Category | 2013 | 2012 | |||||||||||||||||||||||
Equity securities | 66.40% | 66.10% | |||||||||||||||||||||||
Debt securities | 30.30% | 31.10% | |||||||||||||||||||||||
All other assets | 3.30% | 2.80% | |||||||||||||||||||||||
Total | 100.00% | 100.00% | |||||||||||||||||||||||
The Bank sponsors a nonqualified Supplemental Executive Retirement Plan (“SERP”). The SERP, which is unfunded, provides certain individuals with pension benefits, outside the Bank’s noncontributory defined-benefit Cash Balance Plan, based on average earnings, years of service and age at retirement. Participation in the SERP is at the discretion of the Bank’s Board of Directors. The Company and Bank purchased bank owned life insurance (“BOLI”) in 2002 in the aggregate amount of approximately $12.9 million face value covering all the participants in the SERP. Increases in the cash surrender value of BOLI policies totaled $0.2 million for the years ended December 31, 2013 and 2012. The cash surrender value of the BOLI owned by the Bank was $6.2 million and $6.0 million as of December 31, 2013 and December 31, 2012, respectively. The Bank has the ability and the intent to keep this life insurance in force indefinitely. The insurance proceeds may be used, at the sole discretion of the Bank, to fund the benefits payable under the SERP. | |||||||||||||||||||||||||
Since there are not assets in the plan, contributions are equal to the benefits paid. It is expected that $0.2 million will be paid in benefits during 2014. | |||||||||||||||||||||||||
The SERP and the Cash Balance Plan components of the net periodic benefit cost reflected in salaries and employee benefits expense for the years ended December 31, 2013 and December 31, 2012 were: | |||||||||||||||||||||||||
Cash Balance Plan | SERP | Total | |||||||||||||||||||||||
(Dollars in thousands) | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | |||||||||||||||||||
Service costs | $ | 160 | $ | 143 | $ | — | $ | — | $ | 160 | $ | 143 | |||||||||||||
Interest cost | 201 | 222 | 72 | 72 | 273 | 294 | |||||||||||||||||||
Expected return on Plan assets | (300 | ) | (265 | ) | — | — | (300 | ) | (265 | ) | |||||||||||||||
Amortization of prior service cost and recognized net actuarial gain | 313 | 213 | 12 | 12 | 325 | 225 | |||||||||||||||||||
Net periodic pension cost | $ | 374 | $ | 313 | $ | 84 | $ | 84 | $ | 458 | $ | 397 | |||||||||||||
The following table shows the change in the projected benefit obligations and plan assets for the years ended December 31, 2013 and 2012: | |||||||||||||||||||||||||
Cash Balance Plan | SERP | Total | |||||||||||||||||||||||
(Dollars in thousands) | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | |||||||||||||||||||
Change in projected benefit obligations: | |||||||||||||||||||||||||
Benefit obligation at beginning of year | $ | 6,240 | $ | 5,758 | $ | 2,158 | $ | 2,325 | $ | 8,398 | $ | 8,083 | |||||||||||||
Service cost | 160 | 143 | — | — | 160 | 143 | |||||||||||||||||||
Interest cost | 201 | 222 | 73 | 95 | 274 | 317 | |||||||||||||||||||
Actuarial gain / (loss) | (338 | ) | 343 | (122 | ) | (108 | ) | (460 | ) | 235 | |||||||||||||||
Benefits and expenses paid | (626 | ) | (226 | ) | (154 | ) | (154 | ) | (780 | ) | (380 | ) | |||||||||||||
Benefit obligation at end of year | 5,637 | 6,240 | 1,955 | 2,158 | 7,592 | 8,398 | |||||||||||||||||||
Change in plan assets: | |||||||||||||||||||||||||
Fair value of plan assets at beginning of year | 4,676 | 4,145 | — | — | 4,676 | 4,145 | |||||||||||||||||||
Actual return on plan assets | 857 | 408 | — | — | 857 | 408 | |||||||||||||||||||
Employer contributions | 325 | 350 | 154 | 154 | 479 | 504 | |||||||||||||||||||
Benefits and expenses paid | (625 | ) | (227 | ) | (154 | ) | (154 | ) | (779 | ) | (381 | ) | |||||||||||||
Fair value of plan assets at year end | 5,233 | 4,676 | — | — | 5,233 | 4,676 | |||||||||||||||||||
Funded status - (under funded) | $ | (404 | ) | $ | (1,564 | ) | $ | (1,955 | ) | $ | (2,158 | ) | $ | (2,359 | ) | $ | (3,722 | ) | |||||||
The Bank had a liability for the Cash Balance Plan of $0.4 million and $1.6 million for the periods ended December 31, 2013 and 2012, respectively. The liability is included in Other Liabilities within the Consolidated Balance Sheets. The accrued liability and accumulated benefits obligations for the SERP was $2.0 million and $2.2 million for the periods ended December 31, 2013 and 2012, respectively. The balance is included in Other Liabilities within the Consolidated Balance Sheets. | |||||||||||||||||||||||||
The amounts in accumulated other comprehensive loss that have not been recognized as components of net periodic pension cost were: | |||||||||||||||||||||||||
Cash Balance Plan | SERP | Total | |||||||||||||||||||||||
(Dollars in thousands) | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | |||||||||||||||||||
Unrecognized net actuarial loss | $ | 1,361 | $ | 2,567 | $ | 281 | $ | 415 | $ | 1,642 | $ | 2,982 | |||||||||||||
Unrecognized prior service cost | 2 | 4 | — | — | 2 | 4 | |||||||||||||||||||
Total amount included in accumulated other comprehensive loss | $ | 1,363 | $ | 2,571 | $ | 281 | $ | 415 | $ | 1,644 | $ | 2,986 | |||||||||||||
Weighted average assumptions as of December 31: | |||||||||||||||||||||||||
Discount rate | 4.50% | 3.50% | 4.25% | 3.50% | |||||||||||||||||||||
Expected return on plan assets | 7.00% | 7.00% | n/a | n/a | |||||||||||||||||||||
Rate of compensation increase | 3.00% | 3.00% | 3.00% | 3.00% | |||||||||||||||||||||
Amounts in accumulated other comprehensive loss expected to be recognized in net periodic costs in 2014: | |||||||||||||||||||||||||
(Dollars in Thousands) | Cash Balance Plan | SERP | Total | ||||||||||||||||||||||
Net actuarial loss | $ | 85 | $ | 6 | $ | 91 | |||||||||||||||||||
Prior service cost | 2 | — | 2 | ||||||||||||||||||||||
Total expected to be recognized | $ | 87 | $ | 6 | $ | 93 | |||||||||||||||||||
Assets expected to be returned to the Company in 2014 | $ | — | $ | — | $ | — | |||||||||||||||||||
The estimated expected benefits payments for the Cash Balance Plan and SERP are: | |||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||
For the Years Ending December 31: | Cash Balance Plan | SERP | TOTAL | ||||||||||||||||||||||
2014 | $ | 735 | $ | 154 | $ | 889 | |||||||||||||||||||
2015 | 395 | 152 | 547 | ||||||||||||||||||||||
2016 | 455 | 150 | 605 | ||||||||||||||||||||||
2017 | 411 | 148 | 559 | ||||||||||||||||||||||
2018 | 414 | 146 | 560 | ||||||||||||||||||||||
2019-2023 | 2,110 | 691 | 2,801 | ||||||||||||||||||||||
Total | $ | 4,520 | $ | 1,441 | $ | 5,961 | |||||||||||||||||||
Retirement Plan Assets— In general, the plan’s investment management organizations make reasonable efforts to control market fluctuations through appropriate techniques including, but not limited to, adequate diversification. The specific investment strategy adopted by the plan referred to as the Long Term Growth of Capital Strategy, attempts to achieve long-term growth of capital with little concern for current income. Typical investors in this portfolio have a relatively aggressive investment philosophy, seeking long-term growth, and are not looking for current dividend income. | |||||||||||||||||||||||||
Prohibited investments include commodities and futures contracts, private placements, options, transactions which would result in unrelated business taxable income, and other investments prohibited by ERISA. | |||||||||||||||||||||||||
The target range of allocation percentages for each major category of plan assets was: | |||||||||||||||||||||||||
Asset Category | Target Weight | Minimum Weight | Maximum Weight | ||||||||||||||||||||||
Cash | 0% | 0% | 10% | ||||||||||||||||||||||
Equities: | |||||||||||||||||||||||||
US | 66% | 56% | 76% | ||||||||||||||||||||||
Non-US | 7% | 0% | 14% | ||||||||||||||||||||||
Fixed Income | 27% | 20% | 37% | ||||||||||||||||||||||
Equity investments must be listed on the New York, American, World, or other similar stock exchanges traded in the over-the-counter market with the requirement that such stocks have adequate liquidity relative to the size of the investment. | |||||||||||||||||||||||||
Fixed income investments must have a credit rating of B or better from Standard and Poor’s or Moody’s. The fixed income portfolio should be constructed so as to have an average maturity not exceeding 10 years. No more than 5% of the fixed income portfolio should be invested in any one issuer. (U.S. Treasury and Agency securities are exempt from this restriction.) | |||||||||||||||||||||||||
Cash and equivalent instruments that are acceptable are repurchase agreements, bankers’ acceptances, U.S. treasury bills, money market funds, and certificates of deposit. | |||||||||||||||||||||||||
The portfolio shall be structured to meet financial objectives over a period of 11 or more years. Over that time horizon, the total rate of return should equal at least 103% of the applicable blended benchmark returns and place in the top half of group performance. Benchmarks which may be used for portfolio performance comparison are as follows: | |||||||||||||||||||||||||
• | U.S. Large Cap Equities: S&P 500, Russell 1000, Russell 1000 Value, and Russell 1000 Growth | ||||||||||||||||||||||||
• | U.S. Mid Cap Equities: S&P 400 Mid Cap, Russell Mid Cap Value, and Russell Mid Cap Growth | ||||||||||||||||||||||||
• | U.S. Small Cap Equities: S&P 600 Small Cap, Russell 2000 Value, and Russell 2000 Growth | ||||||||||||||||||||||||
• | Non-U.S. Equities: MSCI EAFE IL | ||||||||||||||||||||||||
• | Fixed Income: Lehman Brothers Intermediate Government/Corporate | ||||||||||||||||||||||||
• | Cash: U.S. 3-Month Treasury Bill | ||||||||||||||||||||||||
The Company groups assets and liabilities at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. These levels were: | |||||||||||||||||||||||||
31-Dec-13 | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||
(Dollars in thousands) | Quoted Prices in | Significant other | Significant | ||||||||||||||||||||||
Active Markets for | Observable | Unobservable | |||||||||||||||||||||||
Asset Category | Identical Assets | Inputs | Inputs | ||||||||||||||||||||||
(Level 1) | (Level 2) | (Level 3) | |||||||||||||||||||||||
Cash | $ | — | $ | 170 | $ | — | |||||||||||||||||||
Equity Security: | |||||||||||||||||||||||||
Large-Cap | 974 | 396 | — | ||||||||||||||||||||||
Mid-Cap | 1,090 | — | — | ||||||||||||||||||||||
Small-Cap | 53 | 476 | — | ||||||||||||||||||||||
Global and International | 442 | — | — | ||||||||||||||||||||||
Emerging Market | 48 | — | — | ||||||||||||||||||||||
Fixed Income-Bonds | — | 275 | — | ||||||||||||||||||||||
Other | 552 | 757 | — | ||||||||||||||||||||||
Total | $ | 3,159 | $ | 2,074 | $ | — | |||||||||||||||||||
31-Dec-12 | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||
(Dollars in thousands) | Quoted Prices in | Significant other | Significant | ||||||||||||||||||||||
Active Markets for | Observable | Unobservable | |||||||||||||||||||||||
Asset Category | Identical Assets | Inputs | Inputs | ||||||||||||||||||||||
(Level 1) | (Level 2) | (Level 3) | |||||||||||||||||||||||
Cash | $ | — | $ | 124 | $ | — | |||||||||||||||||||
Equity Securities: | |||||||||||||||||||||||||
Large-Cap | 847 | 331 | — | ||||||||||||||||||||||
Mid-Cap | 901 | — | — | ||||||||||||||||||||||
Small-Cap | 78 | 475 | — | ||||||||||||||||||||||
Global and International | 403 | — | — | ||||||||||||||||||||||
Emerging Market | 66 | — | — | ||||||||||||||||||||||
Fixed Income-Bonds | — | 151 | — | ||||||||||||||||||||||
Other | 538 | 762 | — | ||||||||||||||||||||||
Total | $ | 2,833 | $ | 1,843 | $ | — | |||||||||||||||||||
401(k) Plan —The Bank sponsors a 401(k) plan. Participation in the 401(k) plan is voluntary. Employees become eligible after completing 90 days service and attaining age 21. Employees may elect to contribute up to 12% of their compensation to the 401(k) plan. The Bank matches 100% of each employee’s contribution, up to a maximum of 6% of compensation. The Bank’s contribution to the 401(k) plan was $0.2 million in each of the years ended December 31, 2013 and 2012. | |||||||||||||||||||||||||
Deferred Compensation Plan —The Bank sponsors a nonqualified deferred compensation plan. The plan, which is unfunded, permits certain management employees to defer compensation in order to provide retirement and death benefits. The plan allows participants to receive the balance of the 6% Bank matching contribution on the 401(k) plan that would otherwise be forfeited to comply with the Internal Revenue Code. At both December 31, 2013 and 2012, the amount of the non-qualified deferred compensation plan liability was $0.2 million and $0.3 million, respectively. | |||||||||||||||||||||||||
Post-retirement Benefits —The Bank provides certain post-retirement benefits to select former executive officers. As of December 31, 2013 and 2012, the amount of the liability for these benefits was approximately $0.2 million. | |||||||||||||||||||||||||
Split Dollar Benefits —In 2002, upon investing in BOLI policies, the Company granted certain executives a split dollar life benefit by which the beneficiaries of the executive would receive a portion of the non-cash surrender value death benefit of the BOLI upon the executive’s demise. Thereafter, amounts are accrued by a charge to employee benefits. As of December 31, 2013 and 2012, $0.2 million was recorded in other liabilities for the split dollar benefit. |
RELATED_PARTY_TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Related Party Transactions [Abstract] | ' | ||||||||
RELATED PARTY TRANSACTIONS | ' | ||||||||
13. RELATED PARTY TRANSACTIONS | |||||||||
In the ordinary course of business, certain of the Company’s and Bank’s directors and executive officers, including immediate family members and companies in which they have an interest, are loan customers. Those transactions do not involve more than the normal risk of collection nor do they present any unfavorable features. Total loans to such groups totaled $2.0 million and $2.2 million as of December 31, 2013 and December 31, 2012, respectively. Unused lines available to be drawn were $0.4 million and $0.1 million as of as of December 31, 2013 and December 31, 2012, respectively. | |||||||||
(Dollars in thousands) | 31-Dec-13 | 31-Dec-12 | |||||||
Beginning Balance | $ | 2,236 | $ | 2,322 | |||||
Draws/Advances | 89 | 141 | |||||||
Repayments | (331 | ) | (227 | ) | |||||
Ending Balance | $ | 1,994 | $ | 2,236 |
REGULATORY_MATTERS_AND_RESTRIC
REGULATORY MATTERS AND RESTRICTIONS | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
Regulatory Matters And Restrictions | ' | ||||||||||||||||||||||||
REGULATORY MATTERS AND RESTRICTIONS | ' | ||||||||||||||||||||||||
14. REGULATORY MATTERS AND RESTRICTIONS | |||||||||||||||||||||||||
On June 24, 2013, the Bank entered into a memorandum of understanding with the Federal Deposit Insurance Corporation and the North Carolina Commissioner of Banks. The informal agreement requires the Bank take certain actions to enhance its management of adversely classified assets, remain well-capitalized and improve earnings. It also restricts dividends that cannot be paid to the holding company without prior approval and requires reporting of progress of implementing additional management improvement plans. On August 19, 2010, the Company entered into a memorandum of understanding with the Federal Reserve Bank of Richmond. The informal agreement requires the Company to receive prior approval for payment of any dividends, to repurchase stock, or to receive any dividends from the Bank. | |||||||||||||||||||||||||
On August 20, 2010, the Company issued 11,735 shares of $1,000 liquidation value, Series B Fixed Rate Cumulative Perpetual Preferred Stock, (“Series B Preferred Stock”), under the Community Development Capital Initiative (“CDCI”), part of the United States Department of the Treasury (the “Treasury”) Troubled Asset Relief Program (“TARP”). Participation in the Community Development Capital Initiative ("CDCI") places restrictions on the Company’s ability to declare or pay dividends or distributions on, or purchase, redeem or otherwise acquire for consideration, shares of its capital stock, including restrictions against the Company (i) increasing dividends payable on its common stock from the last quarterly cash dividend per share declared on the common stock prior to November 17, 2008; (ii) increasing its aggregate per share dividends and distributions above the aggregate dividends and distributions paid for the immediately prior fiscal year; and (iii) declaring or paying dividends or distributions on, or repurchasing, redeeming or otherwise acquiring for consideration, shares of its capital stock in the event that the Company fails to declare and pay full dividends (or declare and set aside a sum sufficient for payment thereof) on the Series B Preferred Stock. These restrictions will continue until all of the Series B Preferred Stock has been redeemed in full. | |||||||||||||||||||||||||
The Company and the Bank are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements may initiate certain mandatory and the possibility of additional discretionary, actions by regulators that, if undertaken, could have a direct material effect on the Company and the Bank’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 classification are 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 Bank to maintain minimum amounts and ratios (set forth in the table below) of total and Tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined), and Tier 1 capital (as defined) to average assets (as defined). Management believes, as of December 31, 2013 and December 31, 2012, that the Company and the Bank met all capital adequacy requirements to which they are subject. To be categorized as well capitalized, the Bank must maintain minimum total risk-based, Tier 1 risk-based and Tier 1 leveraged ratios as set forth in the table below: | |||||||||||||||||||||||||
31-Dec-13 | |||||||||||||||||||||||||
For Capital | |||||||||||||||||||||||||
Adequacy | To Be Well | ||||||||||||||||||||||||
(Dollars in thousands) | Actual | Purposes | Capitalized | ||||||||||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||||||||||
Total capital (to risk weighted assets) | |||||||||||||||||||||||||
Company | $ | 37,006 | 17.42 | % | $ | 16,990 | 8 | % | $ | 21,238 | 10 | % | |||||||||||||
Bank | 35,573 | 16.77 | 16,975 | 8 | 21,219 | 10 | |||||||||||||||||||
Tier 1 (to risk weighted assets) | |||||||||||||||||||||||||
Company | $ | 34,341 | 16.17 | % | $ | 8,495 | 4 | % | $ | 12,743 | 6 | % | |||||||||||||
Bank | 32,910 | 15.51 | 8,487 | 4 | 12,731 | 6 | |||||||||||||||||||
Tier 1 (to average total assets) | |||||||||||||||||||||||||
Company | $ | 34,341 | 11.87 | % | $ | 11,576 | 4 | % | $ | 14,471 | 5 | % | |||||||||||||
Bank | 32,910 | 10.69 | 12,316 | 4 | 15,395 | 5 | |||||||||||||||||||
31-Dec-12 | |||||||||||||||||||||||||
For Capital | |||||||||||||||||||||||||
Adequacy | To Be Well | ||||||||||||||||||||||||
(Dollars in thousands) | Actual | Purposes | Capitalized | ||||||||||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||||||||||
Total capital (to risk weighted assets) | |||||||||||||||||||||||||
Company | $ | 36,646 | 19.15 | % | $ | 15,311 | 8 | % | $ | 19,138 | 10 | % | |||||||||||||
Bank | 34,860 | 18.45 | 15,211 | 8 | 19,014 | 10 | |||||||||||||||||||
Tier 1 (to risk weighted assets) | |||||||||||||||||||||||||
Company | $ | 34,239 | 17.89 | % | $ | 7,655 | 4 | % | $ | 11,483 | 6 | % | |||||||||||||
Bank | 32,483 | 17.19 | 7,606 | 4 | 11,409 | 6 | |||||||||||||||||||
Tier 1 (to average total assets) | |||||||||||||||||||||||||
Company | $ | 34,239 | 11.56 | % | $ | 11,851 | 4 | % | $ | 14,813 | 5 | % | |||||||||||||
Bank | 32,483 | 11.02 | 11,786 | 4 | 14,733 | 5 |
HOLDING_COMPANY_CONDENSED_FINA
HOLDING COMPANY CONDENSED FINANCIAL INFORMATION | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Holding Company Condensed Financial Information | ' | ||||||||
HOLDING COMPANY CONDENSED FINANCIAL INFORMATION | ' | ||||||||
15. HOLDING COMPANY CONDENSED FINANCIAL INFORMATION | |||||||||
The condensed financial data for the Company (holding company only) was: | |||||||||
Condensed Balance Sheets: | December 31, | ||||||||
(Dollars in thousands) | 2013 | 2012 | |||||||
Assets: | |||||||||
Cash and cash equivelents | $ | 930 | $ | 1,340 | |||||
Investment in subsidiary Bank | 34,806 | 34,523 | |||||||
Other assets | 443 | 448 | |||||||
Total Assets | $ | 36,179 | $ | 36,311 | |||||
Liabilities and Stockholders' Equity: | |||||||||
Total liabilities | $ | 42 | $ | 32 | |||||
Stockholders' equity | 36,137 | 36,279 | |||||||
Total Liabilities and Stockholders' Equity | $ | 36,179 | $ | 36,311 | |||||
For the Years Ended December 31, | |||||||||
Condensed Statements of Operations: | 2013 | 2012 | |||||||
(Dollars in thousands) | |||||||||
Undistributed net earnings of subsidiary bank | $ | 550 | $ | 499 | |||||
Expenses, net | (187 | ) | (158 | ) | |||||
Net Income | $ | 363 | $ | 341 |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Commitments And Contingencies | ' | ||||||||||||
COMMITMENTS AND CONTINGENCIES | ' | ||||||||||||
16. COMMITMENTS AND CONTINGENCIES | |||||||||||||
The Bank 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 beyond the amount recognized on the Consolidated Balance Sheets. The contractual amounts of those instruments reflect the extent of involvement the Bank has in particular classes of financial instruments. | |||||||||||||
The Bank’s exposure to credit losses in the event of non -performance by the other party to the financial instrument for commitments to extend credit and standby letters of credit is represented by the contractual amount of those instruments. The Bank utilizes the same credit policies in making commitments and conditional obligations as it does for balance sheet instruments. | |||||||||||||
Commitments to extend credit are agreements to lend to a customer as long as there is not a 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 many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Bank evaluates each customer’s credit worthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Bank, upon extension of credit is based on management’s credit evaluation of the counter parties. Collateral varies and may include real estate, accounts receivable, inventory, property, plant and equipment, and income-producing commercial properties. | |||||||||||||
Standby letters of credit are conditional commitments issued by the Bank 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 loan facilities to customers. To the extent deemed necessary, collateral of varying types and amounts is held to secure customer performance under certain of those letters of credit outstanding. | |||||||||||||
Financial instruments whose contract amounts represent credit risk as of December 31, 2013 and December 31, 2012, respectively, are commitments to extend credit (including availability of lines of credit), and standby letters of credit. Loan commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. The Bank evaluates each customer’s credit worthiness on a case-by-case basis. The amount of collateral deemed necessary by the Bank is based on management’s credit evaluation and underwriting guidelines for the particular loan. | |||||||||||||
The Bank records a reserve for credit commitments that is adjusted through Other liabilities and Other expense in the Consolidated Balance Sheets and Consolidated Statements of Income based on (i) the expected probability of funding and (ii) the loss history by loan type as determined in calculating the ALLL. The reserves included in Other liabilities as of December 31, 2013 and December 31, 2012 were $12 thousand and $54 thousand, respectively. | |||||||||||||
Commitments outstanding at December 31, 2013 are summarized in the following table: | |||||||||||||
(Dollars in thousands) | Commercial | Other loan | Total | ||||||||||
letters of credit | commitments | commitments | |||||||||||
Less than one year | $ | 123 | $ | 4,960 | $ | 5,083 | |||||||
One to three years | 47 | 5,654 | 5,701 | ||||||||||
Three to five years | 250 | 9,674 | 9,924 | ||||||||||
More than five years | 93 | 2,484 | 2,577 | ||||||||||
Total | $ | 513 | $ | 22,772 | $ | 23,285 |
FAIR_VALUE_MEASUREMENT
FAIR VALUE MEASUREMENT | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Fair Value Measurement | ' | ||||||||||||||||||||
FAIR VALUE MEASUREMENT | ' | ||||||||||||||||||||
17. FAIR VALUE MEASUREMENT | |||||||||||||||||||||
Fair value is defined as the exchange price that would be received to sell an asset or paid to transfer a liability 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 should be based on the assumptions market participants would use when pricing an asset or liability and establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. The fair value hierarchy gives the highest priority to quoted prices in active markets and the lowest priority to unobservable data. Fair value measurements are required to be separately disclosed by level within the fair value hierarchy. The Company bases fair values on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. | |||||||||||||||||||||
For assets and liabilities recorded at fair value, the Company maximizes the use of observable inputs and minimizes the use of unobservable inputs when developing fair value measurements, in accordance with the fair value hierarchy. | |||||||||||||||||||||
Fair value measurements for assets and liabilities where there exists limited or no observable market data and, therefore, are based primarily upon estimates, are often calculated based on the economic and competitive environment, the characteristics of the asset or liability and other factors. | |||||||||||||||||||||
Therefore, the results cannot be determined with precision and may not be realized in an actual sale or immediate settlement of the asset or liability. Additionally, there may be inherent weaknesses in any calculation technique, and changes in the underlying assumptions used, including discount rates and estimates of future cash flows, could significantly affect the results of current or future values. | |||||||||||||||||||||
The Company utilizes fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. Securities available-for-sale are recorded at fair value on a recurring basis. Additionally, from time to time, the Company may be required to record at fair value other assets on a nonrecurring basis, such as loans held for sale, loans held for investment other real estate owned (“OREO”), and certain other assets. These nonrecurring fair value adjustments typically involve application of lower of cost or market accounting or write-downs of individual assts. | |||||||||||||||||||||
The Company groups assets and liabilities at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. These levels are: | |||||||||||||||||||||
Level one — Valuations for assets and liabilities traded in active exchange markets, such as the New York Stock Exchange. | |||||||||||||||||||||
Level 2 — Valuations are obtained from readily available pricing sources via independent providers for market transactions involving similar assets or liabilities. The Company’s principal market for these securities is the secondary institutional markets and valuations are based on observable market data in those markets. Level 2 securities include U. S. Agencies, state and municipal bonds and MBS. | |||||||||||||||||||||
Level 3 — Valuations for assets and liabilities that are derived from other valuation methodologies, including option pricing models, discounted cash flow models and similar techniques, and not based on market exchange, dealer, or broker traded transactions. Level 3 valuations incorporate certain assumptions and projections in determining the fair value assigned to such assets. | |||||||||||||||||||||
Assets and Liabilities Measured on a Recurring Basis: | |||||||||||||||||||||
Available For Sale ("AFS") Investment Securities: Investment securities 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 matrix pricing, which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities. Level 1 securities include those traded on nationally recognized securities exchanges, U.S. Treasury securities, and money market funds. Level 2 securities include U.S. Agencies, MBS issued by government sponsored entities, state and municipal bonds and corporate debt securities. Securities classified as Level 3 include asset-backed securities in less liquid markets. The Company did not hold any Level 1 or Level 3 AFS Investment Securities as of December 31, 2013 and December 31, 2012. | |||||||||||||||||||||
Mortgage Serving Rights: Mortgage servicing rights do not trade in an active market with readily observable market data. As a result, the Company estimates the fair value of mortgage servicing rights by using a discounted cash flow model to calculate the present value of estimated future net servicing income. The Company stratifies its mortgage servicing portfolio on the basis of loan type. The assumptions used in the discounted cash flow model are those that we believe market participants would use in estimating future net servicing income, including estimates of loan prepayment rates, servicing costs, ancillary income, impound account balances, and discount rates. Significant assumptions in the valuation of mortgage servicing rights include changes in interest rates, estimated loan repayment rates, and the timing of cash flows, among other factors. Mortgage servicing rights are classified as Level 3 measurements due to the use of significant unobservable inputs, as well as significant management judgment and estimation. | |||||||||||||||||||||
Assets measured at fair value on a recurring basis as of December 31, 2013 were as follows: | |||||||||||||||||||||
(Dollars in thousands) | Quoted Prices in | Significant Other | Significant | ||||||||||||||||||
Active Markets for | Observable | Unobservable | |||||||||||||||||||
Identical Assets | Inputs | Inputs | |||||||||||||||||||
Description | 31-Dec-13 | (Level 1) | (Level 2) | (Level 3) | |||||||||||||||||
Recurring: | |||||||||||||||||||||
US government agencies | $ | 6,766 | $ | — | $ | 6,766 | $ | — | |||||||||||||
Government sponsored MBS | |||||||||||||||||||||
Residential | 57,698 | — | 57,698 | — | |||||||||||||||||
Municipal securities | |||||||||||||||||||||
North Carolina | 1,455 | — | 1,455 | — | |||||||||||||||||
Mortgage servicing rights | 25 | — | — | 25 | |||||||||||||||||
Total | $ | 65,944 | $ | — | $ | 65,919 | $ | 25 | |||||||||||||
Assets measured at fair value on a recurring basis as of December 31, 2012 were as follows: | |||||||||||||||||||||
(Dollars in thousands) | Quoted Prices in | Significant Other | Significant | ||||||||||||||||||
Active Markets for | Observable | Unobservable | |||||||||||||||||||
Identical Assets | Inputs | Inputs | |||||||||||||||||||
Description | 31-Dec-12 | (Level 1) | (Level 2) | (Level 3) | |||||||||||||||||
Recurring: | |||||||||||||||||||||
US government agencies | $ | 1,327 | $ | — | $ | 1,327 | $ | — | |||||||||||||
Government sponsored MBS | |||||||||||||||||||||
Residential | 57,931 | — | 57,931 | — | |||||||||||||||||
Municipal securities | |||||||||||||||||||||
North Carolina | 1,553 | — | 1,553 | — | |||||||||||||||||
Mortgage Servicing Rights | $ | 36 | — | — | 36 | ||||||||||||||||
Total | $ | 60,847 | $ | — | $ | 60,811 | $ | 36 | |||||||||||||
The table below displays the change in all recurring Level 3 Assets from December 31, 2012 to December 31, 2013. | |||||||||||||||||||||
(Dollars in thousands) | Mortgage | ||||||||||||||||||||
Servicing Rights | |||||||||||||||||||||
Beginning balance (December 31, 2012) | $ | 36 | |||||||||||||||||||
Amortization | 11 | ||||||||||||||||||||
Ending Balance (December 31, 2013) | $ | 25 | |||||||||||||||||||
Assets and Liabilities Measured on a Nonrecurring Basis: | |||||||||||||||||||||
Impaired loans: Impaired loans are evaluated and valued at the time the loan is identified as impaired, and are carried at the lower of cost or market value. Market value is measured based on the value of the collateral securing these loans or net present value of expected future cash flows discounted at the loan’s effective interest rate. Collateral may be real estate and/or business assets including equipment, inventory, and/or accounts receivable. The value of business equipment, inventory, and accounts receivable collateral is based on net book value on the business’ financial statements and, if necessary, discounted based on management’s review and analysis. Appraised and reported values may be discounted based on management’s historical knowledge, changes in market conditions from the time of valuation, and/or management’s expertise and knowledge of the client and the client’s selling costs and other expenses. Impaired loans are reviewed and evaluated on at least a quarterly basis for additional impairment and adjusted accordingly, based on the same factors identified above. The Company records impaired loans as nonrecurring Level 3, because Management believes the underlying collateral is less than the appraised value. | |||||||||||||||||||||
Other real estate owned (“OREO”): Foreclosed assets are adjusted to fair value, less estimated carrying costs and costs to sell, upon transfer of the loans to foreclosed assets. Subsequently, foreclosed assets are carried at the lower of the carrying value or the fair value, less estimated carry costs and costs to sell. Fair value is based upon independent market prices, appraised values of the collateral, or management’s estimation of the value of the collateral. The Company records foreclosed assets as nonrecurring Level 3. | |||||||||||||||||||||
Repossessed Collateral: Repossessed collateral is adjusted to fair value, less estimated carrying costs and costs to sell, upon transfer of the loans to repossessions. Subsequently, repossessions assets are carried at the lower of the carrying value or the fair value, less estimated carry costs and costs to sell. Fair value is based upon independent market prices, appraised values of the collateral, or management’s estimation of the value of the collateral. The Company records repossessions as nonrecurring Level 3. | |||||||||||||||||||||
Assets measured at fair value on a nonrecurring basis as of December 31, 2013 and December 31, 2012 were: | |||||||||||||||||||||
(Dollars in thousands) | Quoted Prices in | Significant Other | Significant | ||||||||||||||||||
Active Markets for | Observable | Unobservable | |||||||||||||||||||
Identical Assets | Inputs | Inputs | |||||||||||||||||||
Description | 31-Dec-13 | (Level 1) | (Level 2) | (Level 3) | |||||||||||||||||
Nonrecurring: | |||||||||||||||||||||
OREO | $ | 3,032 | $ | — | $ | — | $ | 3,032 | |||||||||||||
Repossessed collateral | 590 | — | — | 590 | |||||||||||||||||
Impaired loans: | |||||||||||||||||||||
Commercial real estate | 9,050 | — | — | 9,050 | |||||||||||||||||
Faith-based non-profit | 16,772 | — | — | 16,772 | |||||||||||||||||
Residential real estate | 3,875 | — | — | 3,875 | |||||||||||||||||
Consumer | 11 | — | — | 11 | |||||||||||||||||
Total | $ | 33,330 | $ | — | $ | — | $ | 33,330 | |||||||||||||
(Dollars in thousands) | Quoted Prices in | Significant Other | Significant | ||||||||||||||||||
Active Markets for | Observable | Unobservable | |||||||||||||||||||
Identical Assets | Inputs | Inputs | |||||||||||||||||||
Description | 31-Dec-12 | (Level 1) | (Level 2) | (Level 3) | |||||||||||||||||
Nonrecurring: | |||||||||||||||||||||
OREO | $ | 3,055 | $ | — | $ | — | $ | 3,055 | |||||||||||||
Repossessed collateral | 590 | — | — | 590 | |||||||||||||||||
Impaired loans: | |||||||||||||||||||||
Commercial real estate | 4,749 | — | — | 4,749 | |||||||||||||||||
Faith-based non-profit | 14,863 | — | — | 14,863 | |||||||||||||||||
Residential real estate | 3,916 | — | — | 3,916 | |||||||||||||||||
Consumer | 16 | — | — | 16 | |||||||||||||||||
Total | $ | 27,189 | $ | — | $ | — | $ | 27,189 | |||||||||||||
Quantitative Information about Level 3 Fair Value Measurements | |||||||||||||||||||||
(Dollars in thousands) | Significant | Significant | |||||||||||||||||||
Valuation | Unobservable | Unobservable | |||||||||||||||||||
Description | 31-Dec-13 | Technique | Inputs | Input Value | |||||||||||||||||
Nonrecurring: | |||||||||||||||||||||
OREO | $ | 3,032 | discounted appraisals | collateral discounts | 6-20% | ||||||||||||||||
Repossessed collateral | 590 | discounted appraisals | collateral discounts | 20-50% | |||||||||||||||||
Impaired loans | 29,708 | discounted appraisals | collateral discounts | 6-20% | |||||||||||||||||
Total | $ | 33,330 | |||||||||||||||||||
(Dollars in thousands) | Significant | Significant | |||||||||||||||||||
Valuation | Unobservable | Unobservable | |||||||||||||||||||
Description | 31-Dec-12 | Technique | Inputs | Input Value | |||||||||||||||||
Nonrecurring: | |||||||||||||||||||||
OREO | $ | 3,055 | discounted appraisals | collateral discounts | 6-20% | ||||||||||||||||
Repossessed collateral | 590 | discounted appraisals | collateral discounts | 20-50% | |||||||||||||||||
Impaired loans | 23,544 | discounted appraisals | collateral discounts | 6-20% | |||||||||||||||||
Total | $ | 27,189 | |||||||||||||||||||
The Company discloses estimated fair values for its significant financial instruments. The methodologies for estimating the fair value of financial assets and liabilities that are measured at fair value on a recurring or non-recurring basis are discussed above. The methodologies for other financial assets and liabilities are discussed below. | |||||||||||||||||||||
The Company had no transfers between any of the three levels in 2013 or 2012. | |||||||||||||||||||||
Cash and Cash Equivalents: The carrying amount of cash, due from bank, and federal funds sold approximates fair value, and is therefore considered Level 1 input. | |||||||||||||||||||||
Loans (other than impaired), net of allowances for loan losses: Fair values are estimated for portfolios of loans with similar financial characteristics. The majority of the Company’s loans and lending-related commitments are not carried at fair value on a recurring basis on the Consolidated Balance Sheets, nor are they actively traded. | |||||||||||||||||||||
The fair value of performing loans is calculated by discounting scheduled cash flows through their individual contractual maturity, using discount rates that reflect the credit risk, overhead expenses, interest rate earned and again, contractual maturity of each loan less credit component. The maturity is based on contractual maturities for each loan, modified as required by an estimate of the effect of historical prepayments and current economic conditions. | |||||||||||||||||||||
For all loans, assumptions regarding the characteristics and segregation of loans, maturities, credit risk, cash flows, and discount rates are judgmentally determined using specific borrower and other available information, and are therefore considered a Level 3 input. | |||||||||||||||||||||
Accrued Interest Receivable and Payable: The fair value of interest receivable and payable is estimated to approximate the carrying amounts and are therefore considered Level 1 input. | |||||||||||||||||||||
Deposits: The fair value of deposits with no stated maturity, such as demand deposits, checking accounts, savings and money market accounts, is equal to the carrying amount. The fair value of certificates of deposit is based on the discounted value of contractual cash flows, where the discount rate is estimated using the market rates currently offered for deposits of similar remaining maturities and are therefore considered Level 2 input. | |||||||||||||||||||||
Borrowings: The fair value of borrowings is based on the discounted value of estimated cash flows. The discounted rate is estimated using market rates currently offered for similar advances or borrowings and are therefore considered Level 3 input. | |||||||||||||||||||||
Off-Balance Sheet Instruments: Since the majority of the Company’s off-balance sheet instruments consist of non fee-producing variable rate commitments, the Company has determined they do not have a distinguishable fair value. | |||||||||||||||||||||
As of December 31, 2013 and December 31, 2012, the carrying amounts and associated estimated fair value of financial assets and liabilities of the company are as follows: | |||||||||||||||||||||
31-Dec-13 | |||||||||||||||||||||
(Dollars in thousands) | Carrying | Estimated | |||||||||||||||||||
Amount | Fair Value | Level 1 | Level 2 | Level 3 | |||||||||||||||||
Assets: | |||||||||||||||||||||
Cash and cash equivalents | $ | 28,583 | $ | 28,583 | $ | 28,583 | $ | — | $ | — | |||||||||||
Investment securities available for sale | 65,919 | 65,919 | — | 65,919 | — | ||||||||||||||||
Loans, net of allowances for loan losses | 185,982 | 189,387 | 189,387 | ||||||||||||||||||
Accrued interest receivable | 912 | 912 | 912 | — | |||||||||||||||||
Liabilities: | |||||||||||||||||||||
Non-maturity deposits | $ | 116,115 | $ | 116,115 | 116,115 | — | — | ||||||||||||||
Maturity deposits | 143,812 | 143,314 | — | 143,314 | — | ||||||||||||||||
Other borrowings | 847 | 791 | — | — | 791 | ||||||||||||||||
Accrued interest payable | 75 | 75 | 75 | — | — | ||||||||||||||||
31-Dec-12 | |||||||||||||||||||||
(Dollars in thousands) | Carrying | Estimated | |||||||||||||||||||
Amount | Value | Level 1 | Level 2 | Level 3 | |||||||||||||||||
Assets: | |||||||||||||||||||||
Cash and cash equivalents | $ | 42,586 | $ | 42,586 | $ | 42,586 | $ | — | $ | — | |||||||||||
Marketable securities | 60,811 | 60,811 | — | 60,811 | — | ||||||||||||||||
Loans, net of allowances for loan losses | 171,723 | 175,041 | — | — | 175,041 | ||||||||||||||||
Accrued interest receivable | 858 | 858 | 858 | — | — | ||||||||||||||||
Liabilities: | |||||||||||||||||||||
Non-maturity deposits | $ | 116,276 | $ | 116,276 | 116,276 | — | — | ||||||||||||||
Maturity deposits | 134,603 | 134,322 | — | 134,322 | — | ||||||||||||||||
Other borrowings | 2,937 | 2,871 | — | — | 2,871 | ||||||||||||||||
Accrued interest payable | 119 | 119 | 119 | — | — | ||||||||||||||||
PREFERRED_STOCK_US_TREASURY_DE
PREFERRED STOCK - U.S. TREASURY DEPARTMENT'S CAPITAL PURCHASE PROGRAM and CDIC | 12 Months Ended |
Dec. 31, 2013 | |
Preferred Stock - U.S. Treasury Departments Capital Purchase Program And Cdic | ' |
PREFERRED STOCK - U.S. TREASURY DEPARTMENT'S CAPITAL PURCHASE PROGRAM and CDIC | ' |
18. PREFERRED STOCK - U.S. TREASURY DEPARTMENT'S CAPITAL PURCHASE PROGRAM and CDCI | |
On June 26, 2009, the Company issued 11,735 shares of Series A Fixed Rate Cumulative Perpetual Preferred Stock, having a liquidation preference of $1,000 per share ("Series A Preferred Stock") to the Treasury under the Treasury’s Capital Purchase Program for a purchase price of $11,735,000 in cash. On August 20, 2010, the Company completed an exchange of the Series A Preferred Stock for an equal number of shares of Series B Fixed Rate Cumulative Perpetual Preferred Stock, also having a liquidation preference of $1,000 per share, under the Treasury’s CDCI. Neither the Series A nor Series B Preferred Stock has any mandatory redemption and/or conversion features. | |
Under the CPP, the Series A Preferred Stock carried a dividend rate of 5% for the first five years after issuance, after which the dividend rate increased to 9% until such time as the Series A Preferred Stock is repurchased or redeemed. Under the CDCI, the Series B Preferred Stock carries a dividend rate of 2% for eight years, after which time the dividend rate increases to 9% until the Series B Preferred Stock is repurchased or redeemed. The Company paid all of the dividends due on the Series A Preferred Stock up to the date of closing of the CDCI exchange on August 20, 2010, and is current in its payment of dividends on the Series B Preferred Stock. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Summary Of Significant Accounting Policies Policies | ' | ||||||||||||||||||||
Basis of Presentation | ' | ||||||||||||||||||||
Basis of Presentation - The Consolidated Financial Statements include the accounts and transactions of the Company and the Bank, the wholly owned subsidiary. All significant inter-company accounts and transactions have been eliminated in consolidation. | |||||||||||||||||||||
Segment Reporting | ' | ||||||||||||||||||||
Segment Reporting - Based on an analysis performed by the Company, management has determined that the Company only has one operating segment, which is commercial banking. The chief operating decision-maker uses consolidated results to make operating and strategic decisions, and therefore, the Company is not required to disclose any additional segment information. | |||||||||||||||||||||
Cash & Cash Equivalents | ' | ||||||||||||||||||||
Cash and Cash Equivalents - The cash and cash equivalents are comprised of highly liquid short-term investments that are carried at cost, which approximates market value, and cash held at the Federal Reserve Bank of Richmond ("FRB"). The Board of Governors of the Federal Reserve (the “Federal Reserve”) and banking laws in NC require banks to maintain average balances in relation to specific percentages of their customers' deposits as a reserve. As of December 31, 2013 and 2012, the Bank, held deposits as shown: | |||||||||||||||||||||
Correspondent | |||||||||||||||||||||
Bank | |||||||||||||||||||||
Federal Reserve | Federal Funds | ||||||||||||||||||||
(Dollars in thousands) | Required Average | Excess | Sold | Core Deposits | Total | ||||||||||||||||
31-Dec-13 | $ | 1,520 | $ | 20,164 | $ | 3,000 | $ | 3,899 | $ | 28,583 | |||||||||||
31-Dec-12 | $ | 1,982 | $ | 36,122 | $ | — | $ | 4,482 | $ | 42,586 | |||||||||||
As of December 31, 2013 and 2012, the Bank held deposits of $0.4 million and $1.3 million, respectively at other financial institutions in excess of the federally insured balances. The December 31, 2012 excess resulted primarily from principal and interest payments on MBS, which were posted to our FHLB account. | |||||||||||||||||||||
Investment Securities and Other Invested Assets | ' | ||||||||||||||||||||
Investment Securities - Debt securities that the Company has the positive intent and ability to hold to maturity are classified as “held to maturity securities” and reported at amortized cost. Debt and equity securities that are bought and held principally for the purpose of selling in the near term are classified as “trading securities” and reported at fair value, with unrealized gains and losses included in consolidated earnings. Debt securities not classified as either held to maturity securities or trading securities, and equity securities not classified as trading securities, are classified as “available for sale securities” and reported at fair value, with unrealized gains and losses excluded from consolidated earnings and reported as a separate component of consolidated stockholders' equity and as an item of other comprehensive income. The unrealized gain or loss of a security is identified and removed from other comprehensive income when a security is sold, matured, or called. The initial classification of securities is determined at the date of purchase. Gains and losses on sales of investment securities, computed based on specific identification of the adjusted cost of each security, are included in noninterest income at the time of sale. Premiums and discounts on debt securities are recognized in interest income using the interest method over the period to maturity, or when the debt securities are called. | |||||||||||||||||||||
Declines in the fair value of individual held to maturity and available for sale securities below their costs that are other-than-temporary result in write-downs of the individual securities to their respective fair value. The related credit write-downs are included in consolidated earnings as realized losses. Transfers of securities between classifications, of which there were none in 2013 or 2012, are accounted for at fair value. No securities were classified as trading or held to maturity as of December 31, 2013 and 2012. | |||||||||||||||||||||
Other Invested Assets - Other invested assets are investments in Federal Home Loan Bank of Atlanta (the “FHLB”) stock carried at historical cost, as adjusted for any other-than-temporary impairment loss. As of December 31, 2013 and 2012, the Company's investments in FHLB stock were $0.4 million and $0.5 million, respectively. | |||||||||||||||||||||
Loans | ' | ||||||||||||||||||||
Loans - Loans are stated at the amount of unpaid principal, net of deferred loan origination fees and costs. Loans (net) are reduced by the allowance for loan losses. Nonrefundable loan fees, net of direct costs, associated with the origination or acquisition of loans are deferred and recognized as an adjustment of the loan yield over the life of the loan using the effective interest method. Interest on loans is accrued on the daily balances of unpaid principal outstanding. Interest income is accrued and credited to income only if deemed collectible. Other loan fees and charges, representing service costs for the prepayment of loans, for delinquent payments, or for miscellaneous loan services, are recorded in income when collected. | |||||||||||||||||||||
Non-Performing Loans and Leases | ' | ||||||||||||||||||||
Non-Performing Loans and Leases - Generally, all classes of loans and leases are placed on non-accrual status upon becoming contractually past due 90 days or more as to principal or interest (unless loans are adequately secured by collateral, are in the process of collection, and are reasonably expected to result in repayment), or where substantial doubt about full repayment of principal or interest is evident. | |||||||||||||||||||||
When a loan or lease is placed on non-accrual status, regardless of class, the accrued and unpaid interest receivable is reversed and the loan or lease is accounted for on the cash or cost recovery method until qualifying for return to accrual status. All payments received on non-accrual loans and leases are applied against the principal balance of the loan or lease. Loans may be returned to accrual status when all principal and interest amounts contractually due (including any arrearages) are reasonably assured of repayment within a reasonable period, the borrower has demonstrated payment performance for a minimum of six months in accordance with the original or revised contractual terms of the loan, and when doubt about repayment is resolved. | |||||||||||||||||||||
Generally, for all classes of loans and leases, a charge-off is recorded when it is probable that a loss has been incurred and when it is possible to determine a reasonable estimate of the loss. For all classes of commercial loans and leases, a charge-off is determined on a judgmental basis after due consideration of the debtor's prospects for repayment and the fair value of collateral. For closed-end consumer loans, the entire outstanding balance of the loan is charged-off during the month that the loan becomes 120 days past due as to principal or interest. Consumer loans with non- real estate collateral are written down to the value of the collateral, less estimated costs to sell, if repossession of collateral is assured and in process. For residential mortgage and home equity loan classes, a partial charge-off is recorded at 120 days past due as to principal or interest for the amount that the loan balance exceeds the fair value of the collateral less estimated costs to sell. | |||||||||||||||||||||
Impaired Loans | ' | ||||||||||||||||||||
Impaired Loans - A loan is considered impaired when, based on current information and events, it is probable that the Company will not be able to collect all amounts due from the borrower in accordance with the original contractual terms of the loan, including scheduled interest payments. Impaired loans include all classes of commercial non-accruing loans and Troubled Debt Restructurings ("TDRs"). | |||||||||||||||||||||
For all classes of commercial loans, a quarterly evaluation of specific individual commercial borrowers with identified weaknesses is performed to identify impaired loans. The identification of specific borrowers for review is based on a review of non-accrual loans as well as those loans specifically identified by management as exhibiting above average levels of risk. | |||||||||||||||||||||
When a loan has been identified as being impaired, the amount of impairment is measured based on the present value of expected future cash flows discounted at the loan's effective interest rate, the loan's observable market price, or the estimated fair value of the collateral, less any selling costs, if the loan is collateral-dependent. If the measurement of the impaired loan is less than the recorded investment in the loan (including accrued interest, net of deferred loan fees or costs and unamortized premiums or discounts), impairment is recognized by creating or adjusting an existing allocation of the Allowance, or by recording a partial charge-off of the loan to its estimated fair value. Interest payments made on impaired loans are typically applied to principal unless collectability of the principal amount is reasonably assured, in which case interest income may be accrued or recognized on a cash basis. | |||||||||||||||||||||
Loans Modfied as a TDR | ' | ||||||||||||||||||||
Loans Modified as a TDR - Loans are considered to have been modified as a TDR when the Company makes certain concessions to a borrower experiencing financial difficulty. Concessions to the borrower at modification may include interest rate reductions, principal or interest forgiveness, forbearance, and other actions intended to minimize economic loss and to avoid foreclosure or repossession of collateral. Generally, a non-accrual loan that has been modified in a TDR remains on non-accrual status for a period of six months to demonstrate that the borrower is able to meet the terms of the modified loan. However, performance prior to the modification, or significant events that coincide with the modification, are included in assessing whether the borrower can meet the new terms and may result in the loan being returned to accrual status at the time of loan modification or after a shorter performance period. Since the economic crisis began in 2008, management has elected to offer concessions to borrowers with identified financial weaknesses, even if the borrowers have continued making scheduled payments, working with the borrowers to enable them to continue meeting their obligations to repay the debt to the Company | |||||||||||||||||||||
Income recognition on Impaired and Nonaccrual Loans | ' | ||||||||||||||||||||
Income Recognition on Impaired and Nonaccrual Loans - Loans, including impaired loans, are generally classified as nonaccrual if they are past due as to maturity, or payment of principal or interest for a period of more than 90 days, unless such loans are well secured and in the process of collection. If a loan or a portion of a loan is classified as doubtful or is partially charged off, the loan is generally classified as nonaccrual. Loans that are on a current payment status or past due less than 90 days may also be classified as nonaccrual if full repayment of principal and/or interest is in doubt. | |||||||||||||||||||||
Loans may be returned to accrual status when all principal and interest amounts contractually due (including arrearages) are reasonably assured of repayment within a reasonable period of time, and the borrower has demonstrated payment performance for a minimum of six months in accordance with the contractual terms involving payments of cash or cash equivalents. | |||||||||||||||||||||
In the case where a nonaccrual loan had been partially charged off, recognition of interest on a cash basis is limited to that which would have been recognized on the remaining loan balance at the contractual interest rate. Receipts in excess of that amount are recorded as recoveries to the allowance for loan losses until prior charged off balances have been fully recovered. | |||||||||||||||||||||
Reserve for credit losses | ' | ||||||||||||||||||||
Reserve for Credit Losses - The Company's reserve for credit losses is comprised of two components, the allowance for loan losses (the "ALLL") and the reserve for unfunded commitments (the "Unfunded Reserve"). | |||||||||||||||||||||
Allowance for loan losses | ' | ||||||||||||||||||||
Allowances for Loan Losses - The ALLL is a valuation allowance, which is established through a provision for loan losses charged to expense. When management believes that the collectability of the principal is unlikely, loans are charged against the ALLL. Subsequent recoveries, if any, are credited to the ALLL. | |||||||||||||||||||||
The ALLL is management's estimate of probable losses that are inherent in the loan portfolio. The ALLL is based on regular quarterly assessments. The methodologies for measuring the appropriate level of the ALLL include the combination of a quantitative historical loss history by loan type and a qualitative analysis for loans not classified as impaired or TDRs, and a specific allowance method for impaired and TDR loans. The qualitative analysis is patterned after the guidelines provided under the Securities Exchange Commission (“SEC”) Staff Accounting Bulletin 102 and the Federal Financial Institutions Examination Council (“FFIEC”) Interagency Policy Statement on the Allowance for Loan and Lease Losses and include the following: | |||||||||||||||||||||
• | Changes in lending policies and procedures, including underwriting standards and collection, charge-off, and recovery practices; | ||||||||||||||||||||
• | Changes in national economic and business conditions and developments and the effect of unemployment on African Americans, who are the majority of our customers; | ||||||||||||||||||||
• | Changes in the nature and volume of the loan portfolio; | ||||||||||||||||||||
• | Changes in the experience, ability, and depth of lending management and staff; | ||||||||||||||||||||
• | Changes in trends of the volume and severity of past due and classified loans; and changes in trends in the volume of non-accrual loans, troubled debt restructurings and classified loans; | ||||||||||||||||||||
• | Changes in the quality of the loan review system and the degree of oversight by the Bank's Board of Directors; | ||||||||||||||||||||
• | The existence and effect of any concentrations of credit, and changes in the level of such concentrations; and | ||||||||||||||||||||
• | The effect of external factors such as competition and legal and regulatory requirements. | ||||||||||||||||||||
Management has developed, from historical loan and economic information, quantitative drivers for certain qualitative factors. Management has identified which factors, by nature, are subjective, such as lending policies, competition, and regulatory requirements. The quantitative drivers of qualitative factors, to which different weights assigned based on management's judgment, are reviewed and updated quarterly based on updated quarterly and eight-quarter rolling data. The quantitative loss history is based on an eight-quarter rolling history of losses incurred by different loan types within the loan portfolio. | |||||||||||||||||||||
A specific ALLL is established for loans identified as impaired or TDRs, based on significant conditions or circumstances related to the specific credits. The specific allowance amounts are determined by a method prescribed by Accounting Standards Codification (“ASC”) 310, Receivables. Loans identified as impaired are accounted for in accordance with one of three valuations: (i) the present value of future cash flows discounted at the loan's effective interest rate; (ii) the loan's observable market price, or (iii) the fair value of the collateral, if the loan collateral dependent, less estimated liquidation costs. A loan is considered impaired when it is probable that not all amounts due (principal and interest) will be collectible according to the original 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. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. The significance of payment delays and payment shortfalls are considered on a loan-by-loan basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower's prior payment record, and the amount of the shortfall in relation to the principal and interest owed. | |||||||||||||||||||||
For commercial business, faith-based non-profit, real estate and certain consumer loans, the measurement of loan impairment is based on the present value of the expected future cash flows, discounted at the loan's effective interest rate, or on the fair value of the loan's collateral if the loan is collateral dependent. Most consumer loans are smaller balance and homogeneous, and are evaluated for impairment on a collective basis, applying the quantitative loss history and the qualitative factors. Impairment losses are included in the ALLL through a charge to the provision for loan losses. | |||||||||||||||||||||
The Company uses several credit quality indicators to manage credit risk in an ongoing manner. The Company's risk rating system was developed to aid in the risk management process by grouping credits with similar risk profiles into pass, internal watch, special mention, or criticized categories. Credit risk ratings are applied individually to all classes of loans and leases. Internal credit reviews and external contracted credit review examinations are used to determine and validate loan risk grades. The credit review system takes into consideration factors such as: borrower's background and experience; historical and current financial condition; credit history and payment performance; economic conditions and their impact on various industries; type, market value and volatility of the market value of collateral; lien position; and the financial strength of guarantors. | |||||||||||||||||||||
The process of assessing the adequacy of the ALLL is necessarily subjective. Further, and particularly in periods of economic downturns, it is reasonably possible that future credit losses may exceed historical loss levels and may also exceed management's current estimates of incurred credit losses inherent within the loan portfolio. As such, there can be no assurance that future loan charge-offs will not exceed management's current estimate of what constitutes a reasonable ALLL. | |||||||||||||||||||||
The Company and the Bank are subject to periodic examination by their federal and state regulators, and may be required by such regulators to recognize additions to the allowance for loan losses based on their assessment of credit information available to them at the time of their examinations. | |||||||||||||||||||||
Reserve for Unfunded Commitments | ' | ||||||||||||||||||||
Reserve for Unfunded Commitments - The Unfunded Reserve is a component of other liabilities and represents the estimate for probable credit losses inherent in unfunded commitments to extend credit. Unfunded commitments to extend credit include unfunded loans with available balances, new commitments to lend that are not yet funded, and standby and commercial letters of credit. The process used to determine the Unfunded Reserve is consistent with the process for determining the ALLL, as adjusted for estimated funding probabilities and historical eight quarter rolling quantitative loan loss factors. The level of the Unfunded Reserve is adjusted by recording an expense or recovery in other noninterest expense. The balances of $13 thousand and $55 thousand for December 31, 2013 and 2012, respectively, were reflected in other liabilities on the Consolidated Balance Sheet. | |||||||||||||||||||||
Bank Premises and Equipment, Net | ' | ||||||||||||||||||||
Bank Premises and Equipment, Net - Premises and equipment are stated at cost less accumulated depreciation and amortization. For financial reporting purposes, depreciation and amortization are computed by the straight-line method and are charged to operations over the estimated useful lives of the assets, which range from 30 to 50 years for premises; generally 6-10 years for furniture and equipment, and 3-5 years for information technology equipment and software. Leasehold improvements are amortized over the terms of the respective leases or the useful lives of the improvements, whichever is shorter. Maintenance and repairs are charged to operations as incurred. The Bank reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amounts of such assets may not be recoverable. If the sum of the expected cash flows attributable to an asset is less than the stated amount of the asset, an impairment loss is recognized in the current period and charged to operations. Upon disposition, the asset and related accumulated depreciation and/or amortization are relieved, and any gains or losses are reflected in operations. | |||||||||||||||||||||
Cash Surrender Value of Life Insurance | ' | ||||||||||||||||||||
Cash Surrender Value of Life Insurance - The Bank maintains life insurance on certain current and former officers and directors, of which the Bank is owner and beneficiary. The cash surrender value of the policies at December 31, 2013 and 2012 was $6.2 million and $6.0 million, respectively. Income from the policies and changes in the net cash surrender value are recorded in noninterest income. | |||||||||||||||||||||
Other Real Estate Owned | ' | ||||||||||||||||||||
Other Real Estate Owned - Other real estate owned ("OREO"), which represents real estate acquired through foreclosure, or the transfer of the deed in lieu of foreclosure, in satisfaction of commercial and consumer real estate collateralized loans, is initially recorded at fair value less estimated holding and selling costs of the real estate. Loan balances in excess of the fair value of the real estate acquired at the date of the foreclosure are charged to the ALLL. Any subsequent operating expenses or income, reduction in estimated fair values, and gains or losses on disposition of such properties are charged or credited to non-interest income or non-interest expense. Valuations are periodically performed by management, and any subsequent write-downs due to the carrying value of a property exceeding its estimated fair value less estimated costs to sell are charged against other non-interest expense. As of December 31, 2013 and 2012, there was $3.0 million and $3.1 million, respectively, of foreclosed properties included in OREO on the Consolidated Balance Sheets. OREO excludes bank-owned property held for sale at December 31, 2013 and 2012. | |||||||||||||||||||||
Earnings Per Share | ' | ||||||||||||||||||||
Earnings Per Share - Earnings per share are calculated on the basis of the weighted average number of shares of common stock outstanding for the purpose of computing the basic earnings per share and the weighted average number of shares of common stock outstanding plus dilutive common stock equivalents, such as stock options, for the purpose of computing diluted earnings per share. As of December 31, 2013 and 2012, there were no stock options outstanding. | |||||||||||||||||||||
Advertising Costs | ' | ||||||||||||||||||||
Advertising Costs - Adverting is expensed as incurred. | |||||||||||||||||||||
Income Taxes | ' | ||||||||||||||||||||
Income Taxes - Provisions for income taxes are based on amounts reported in the Consolidated Statements of Income (after exclusion of non- taxable income such as interest on state and municipal securities) and include changes in deferred income taxes. Deferred tax asset and liability balances reflect temporary differences at the tax rate expected to be in effect when taxes will become payable or receivable. Temporary differences are differences between the tax basis of assets and liabilities and their reported amounts in the Consolidated Financial Statements that will result in taxable or deductible amounts in future years. The effect of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded for deferred tax assets if the Company determines that it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company regularly reviews its deferred tax assets for recoverability considering historical profitability, projected future taxable income, and the expected timing of the reversals of existing temporary differences and tax planning strategies. | |||||||||||||||||||||
When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that ultimately would be sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more- likely-than not that the position will be sustained upon examination, including the resolution of appeals or litigation process, if any. The evaluation of a tax position taken is considered by itself and not offset or aggregated with other positions. Tax positions that meet the more-likely-than not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying Consolidated Balance Sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest and penalties associated with unrecognized tax benefits are recognized in income tax expense on the income statement. It is the Company's policy to recognize interest and penalties related to unrecognized tax liabilities within income tax expense in the statements of income. The Company does not have an accrual for uncertain tax positions as of December 31, 2013 and 2012, as deductions taken and benefits accrued are based on widely understood administrative practices and procedures and are based on tax law. The Company's federal and state income tax returns are subject to review and examination by government authorities. | |||||||||||||||||||||
Comprehensive Income (Loss) | ' | ||||||||||||||||||||
Comprehensive Income (Loss) - Comprehensive income (loss) is the change in the Company's equity during the period from transactions and other events and circumstances from non-owner sources. Total comprehensive income (loss) consists of net income and other comprehensive (loss) income. The Company's other comprehensive (loss) income and accumulated other comprehensive loss are comprised of net unrealized gains and losses on certain investments in debt securities and post-retirement plans. Information concerning the Company’s other comprehensive (loss) income and accumulated comprehensive loss as of and for the years ended December 31, 2013 and 2012 are presented in the consolidated statements of comprehensive income. | |||||||||||||||||||||
Fair Values of Financial Instruments | ' | ||||||||||||||||||||
Fair Values of Financial Instruments - Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in Note 17. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect the estimates. Fair value is defined as the exchange price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Generally accepted accounting principles (“GAAP”) establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. The fair value hierarchy gives the highest priority to quoted prices in active markets (observable inputs) and the lowest priority to the Company's assumptions (unobservable inputs). GAAP requires fair value measurements to be separately disclosed by level within the fair value hierarchy. For assets and liabilities recorded at fair value, the Company maximizes the use of observable inputs and minimizes the use of unobservable inputs when developing fair value measurements. | |||||||||||||||||||||
The Company utilizes fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. Available-for-sale investment securities are recorded at fair value on a recurring basis. Additionally, the Company may be required to record at fair value other assets on a nonrecurring basis, such as loans held for sale, loans held for investment and certain other assets. | |||||||||||||||||||||
Under GAAP, the Company groups assets and liabilities at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. The Company did not have any changes in leveling inputs in 2013. | |||||||||||||||||||||
These levels are: | |||||||||||||||||||||
Level 1 — Valuations for assets and liabilities traded in active exchange markets, such as the New York Stock Exchange. | |||||||||||||||||||||
Level 2 — Valuations are obtained from readily available pricing sources via independent providers for market transactions involving similar assets or liabilities. The Company’s principal market for these securities is the secondary institutional markets and valuations are based on observable market data in those markets. Level 2 securities include U. S. Agencies, state and municipal bonds and MBS. | |||||||||||||||||||||
Level 3 — Valuations for assets and liabilities that are derived from other valuation methodologies, including option pricing models, discounted cash flow models and similar techniques, and not based on market exchange, dealer, or broker traded transactions. Level 3 valuations incorporate certain assumptions and projections in determining the fair value assigned to such assets. | |||||||||||||||||||||
Use of Estimates | ' | ||||||||||||||||||||
Use of Estimates - The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Material estimates that are susceptible to change in the near term relate to the determination of the ALLL and the provision for loan losses, the evaluation of other-than-temporary impairment of investment securities, accounting for deferred tax assets and related valuation allowances, the determination of the fair values of investment securities and other accounting for incentive compensation, and post-retirement benefits. Actual results could differ from those estimates. | |||||||||||||||||||||
Significant Group Concentrations | ' | ||||||||||||||||||||
Significant Group Concentrations - Most of the Bank's activities are with customers located within the state of NC. The Bank does have concentrations with respect to loans to and deposits from faith-based non-profit organizations as outlined in Notes 6 and 8 to the Consolidated Financial Statements. | |||||||||||||||||||||
Mortgage Servicing Rights | ' | ||||||||||||||||||||
Mortgage Servicing Rights - Mortgage servicing rights are recognized as assets when mortgage loans are sold and the rights to service those loans are retained. Mortgage servicing rights are initially recorded at fair value by using a discounted cash flow model to calculate the present value of estimated future net servicing income. | |||||||||||||||||||||
New Accounting Pronouncements | ' | ||||||||||||||||||||
New Accounting Pronouncements – | |||||||||||||||||||||
In April 2011 the FASB issued Accounting Standards Update (“ASU”) 2011-02 to assist creditors with their determination of when a restructuring is a Troubled Debt Restructuring. The determination is based on whether the restructuring constitutes a concession and whether the debtor is experiencing financial difficulties as both events must be present. The new guidance was effective for the Company beginning January 1, 2012 and did not have a material effect on the Company’s TDR determinations. | |||||||||||||||||||||
In April 2011, the criteria used to determine effective control of transferred assets in the Transfers and Servicing topic of the ASC was amended by ASU 2011-03. The requirement for the transferor to have the ability to repurchase or redeem the financial assets on substantially the agreed terms and the collateral maintenance implementation guidance related to that criterion were removed from the assessment of effective control. The other criteria to assess effective control were not changed. The amendments were effective for the Company on January 1, 2012 and had no effect on the financial statements. | |||||||||||||||||||||
In May 2011, the FASB issued ASU No. 2011-04, “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs.” ASU No. 2011-04 results in a consistent definition of fair value and common requirements for measurement of and disclosure about fair value between GAAP and International Financial Reporting Standards (“IFRS”). The changes to GAAP as a result of ASU No. 2011-04 are as follows are as follows: (1) The concepts of highest and best use and valuation premise are only relevant when measuring the fair value of non-financial assets (that is, it does not apply to financial assets or any liabilities); (2) GAAP currently prohibits application of a blockage factor in valuing financial instruments with quoted prices in active markets, whereas ASU No. 2011-04 extends that prohibition to all fair value measurements; (3) An exception is provided to the basic fair value measurement principles for an entity that holds a group of financial assets and financial liabilities with offsetting positions in market risks or counterparty credit risk that are managed on the basis of the entity’s net exposure to either of those risks. This exception allows the entity, if certain criteria are met, to measure the fair value of the net asset or liability position in a manner consistent with how market participants would price the net risk position; (4) The fair value measurement of instruments classified within an entity shareholders’ equity is aligned with the guidance for liabilities; and (5) Disclosure requirements have been enhanced for recurring Level 3 fair value measurements to disclose quantitative information about unobservable inputs and assumptions used, to describe the valuation processes used by the entity, and to describe the sensitivity of fair value measurements to changes in unobservable inputs and interrelationships between those inputs. In addition, entities must report the level in the fair value hierarchy of items that are not measured at fair value in the statement of condition but whose fair value must be disclosed. The provisions of ASU No. 2011-04 are effective for the Company’s interim reporting period beginning on or after December 15, 2011. The adoption of ASU No. 2011-04 did not have a material impact on the Company’s statements of income and condition, but did require new disclosures in 2012. | |||||||||||||||||||||
In June 2011, the FASB issued ASU No. 2011-05, “Presentation of Comprehensive Income.” The provisions of ASU No. 2011-05 allow an entity the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. The statement(s) are required to be presented with equal prominence as to other primary financial statements. ASU No. 2011-05 eliminates the option to present the components of other comprehensive income as part of the statement of changes in shareholders’ equity, but does not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income. The provisions of ASU No. 2011-05 are effective for the Company’s interim reporting period beginning on or after December 15, 2011, with retrospective application required. The Company adopted this ASU early. The adoption of ASU No. 2011-05 resulted in presentation changes to the Company’s statement of comprehensive income. The adoption of ASU No. 2011-05 did not have an impact on the Company’s statements of income and condition. | |||||||||||||||||||||
In February 2013, the FASB amended the Comprehensive Income topic of the ASC. The amendments address reporting of amounts reclassified out of accumulated other comprehensive income. Specifically, the amendments do not change the current requirements for reporting net income or other comprehensive income in financial statements. However, the amendments do require an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, in certain circumstances an entity is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income. The amendments were effective for the Company on a prospective basis for reporting periods beginning after December 15, 2012. The adoption of these amendments did not have a material effect on the consolidated financial statements of the Company, although new disclosures are included in these consolidated financial statements. | |||||||||||||||||||||
On April 22, 2013, the FASB issued guidance addressing application of the liquidation basis of accounting. The guidance is intended to clarify when an entity should apply the liquidation basis of accounting. In addition, the guidance provides principles for the recognition and measurement of assets and liabilities and requirements for financial statements prepared using the liquidation basis of accounting. The amendments will be effective for entities that determine liquidation is imminent during annual reporting periods beginning after December 15, 2013, and interim reporting periods therein and those requirements should be applied prospectively from the day that liquidation becomes imminent. Early adoption is permitted. The Company does not expect these amendments to have any effect on its financial statements. | |||||||||||||||||||||
In December 2013, the FASB amended the Master Glossary of the FASB Codification to define “Public Business Entity” to minimize the inconsistency and complexity of having multiple definitions of, or a diversity in practice as to what constitutes, a nonpublic entity and public entity within U.S. GAAP. The amendment does not affect existing requirements, however will be used by the FASB, the Private Company Council (“PCC”), and the Emerging Issues Task Force (“EITF”) in specifying the scope of future financial accounting and reporting guidance. The Company does not expect this amendment to have any 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. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Summary Of Significant Accounting Policies Tables | ' | ||||||||||||||||||||
Summary schedule of cash deposits | ' | ||||||||||||||||||||
As of December 31, 2013 and 2012, the Bank, held deposits as shown: | |||||||||||||||||||||
Correspondent | |||||||||||||||||||||
Bank | |||||||||||||||||||||
Federal Reserve | Federal Funds | ||||||||||||||||||||
(Dollars in thousands) | Required Average | Excess | Sold | Core Deposits | Total | ||||||||||||||||
31-Dec-13 | $ | 1,520 | $ | 20,164 | $ | 3,000 | $ | 3,899 | $ | 28,583 | |||||||||||
31-Dec-12 | $ | 1,982 | $ | 36,122 | $ | — | $ | 4,482 | $ | 42,586 |
INVESTMENT_SECURITIES_Tables
INVESTMENT SECURITIES (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
Investment Securities Tables | ' | ||||||||||||||||||||||||
Schedule of Collateral Pledged for public deposits | ' | ||||||||||||||||||||||||
The following table shows the amounts pledged as well as a letter of credit with the FHLB utilized in lieu of pledged investments for the public housing authorities and State Treasurer: | |||||||||||||||||||||||||
(Dollars in thousands) | 31-Dec-13 | 31-Dec-12 | |||||||||||||||||||||||
Pledged to FRB | $ | 1,018 | $ | 1,095 | |||||||||||||||||||||
Pledged for public housing | 3,452 | 4,856 | |||||||||||||||||||||||
Pledged to the NC State Treasurer | 15,353 | 2,579 | |||||||||||||||||||||||
Letter of Credit with the FHLB | 2,000 | 2,000 | |||||||||||||||||||||||
Schedule of Investment Securities | ' | ||||||||||||||||||||||||
The amortized cost, gross unrealized gains and losses and fair values of investment securities at December 31, 2013 and 2012 were: | |||||||||||||||||||||||||
(Dollars in thousands) | Amortized | Gross | Gross | Fair Value | |||||||||||||||||||||
Cost | Unrealized | Unrealized | |||||||||||||||||||||||
Gains | Losses | ||||||||||||||||||||||||
31-Dec-13 | |||||||||||||||||||||||||
US government agencies | $ | 7,000 | $ | — | $ | (234 | ) | $ | 6,766 | ||||||||||||||||
Government sponsored MBS | |||||||||||||||||||||||||
Residential | 58,086 | 118 | (506 | ) | 57,698 | ||||||||||||||||||||
Municipal securities | |||||||||||||||||||||||||
North Carolina | 1,485 | 21 | (51 | ) | 1,455 | ||||||||||||||||||||
Total at December 31, 2013 | $ | 66,571 | $ | 139 | $ | (791 | ) | $ | 65,919 | ||||||||||||||||
31-Dec-12 | |||||||||||||||||||||||||
US government agencies | $ | 1,322 | $ | 5 | $ | — | $ | 1,327 | |||||||||||||||||
Government sponsored MBS | |||||||||||||||||||||||||
Residential | 57,333 | 627 | (29 | ) | 57,931 | ||||||||||||||||||||
Municipal securities | |||||||||||||||||||||||||
North Carolina | 1,497 | 56 | — | 1,553 | |||||||||||||||||||||
Total at December 31, 2012 | $ | 60,152 | $ | 688 | $ | (29 | ) | $ | 60,811 | ||||||||||||||||
Schedule of Investment Securities maturities | ' | ||||||||||||||||||||||||
(Dollars in thousands) | As of December 31, 2013 | ||||||||||||||||||||||||
Fair Value | Amortized Cost | ||||||||||||||||||||||||
US government agencies | |||||||||||||||||||||||||
Due after one year through five years | $ | 4,934 | $ | 5,000 | |||||||||||||||||||||
Due after five years through ten years | 1,832 | 2,000 | |||||||||||||||||||||||
Total US government agencies | $ | 6,766 | $ | 7,000 | |||||||||||||||||||||
Government sponsored MBS | |||||||||||||||||||||||||
Residential | |||||||||||||||||||||||||
Due within one year | $ | 12,090 | $ | 12,156 | |||||||||||||||||||||
Due after one year through five years | 25,152 | 25,314 | |||||||||||||||||||||||
Due after five years through ten years | 12,450 | 12,560 | |||||||||||||||||||||||
Due after ten years | 8,006 | 8,056 | |||||||||||||||||||||||
Total government sponsored MBS | $ | 57,698 | $ | 58,086 | |||||||||||||||||||||
Municipal bonds | |||||||||||||||||||||||||
North Carolina | |||||||||||||||||||||||||
Due within one year | $ | 472 | $ | 465 | |||||||||||||||||||||
Due after one year through five years | 437 | 423 | |||||||||||||||||||||||
Due after five years through ten years | 546 | 597 | |||||||||||||||||||||||
Total North Carolina municipal bonds | $ | 1,455 | $ | 1,485 | |||||||||||||||||||||
(Dollars in thousands) | As of December 31, 2012 | ||||||||||||||||||||||||
Fair Value | Amortized Cost | ||||||||||||||||||||||||
US government agencies | |||||||||||||||||||||||||
Due within one year | $ | 1,005 | $ | 1,000 | |||||||||||||||||||||
Due after one year through five years | 322 | 322 | |||||||||||||||||||||||
Total US government agencies | $ | 1,327 | $ | 1,322 | |||||||||||||||||||||
Government sponsored MBS | |||||||||||||||||||||||||
Residential | |||||||||||||||||||||||||
Due after one year through five years | $ | 135 | $ | 126 | |||||||||||||||||||||
Due after five years through ten years | 171 | 161 | |||||||||||||||||||||||
Due after ten years | 57,625 | 57,046 | |||||||||||||||||||||||
Total government sponsored MBS | $ | 57,931 | $ | 57,333 | |||||||||||||||||||||
Municipal bonds | |||||||||||||||||||||||||
North Carolina | |||||||||||||||||||||||||
Due within one year | $ | 488 | $ | 466 | |||||||||||||||||||||
Due after one year through five years | 458 | 425 | |||||||||||||||||||||||
Due after five years through ten years | 607 | 606 | |||||||||||||||||||||||
Total North Carolina municipal bonds | $ | 1,553 | $ | 1,497 | |||||||||||||||||||||
Schedule of Securities in an unrealized los position | ' | ||||||||||||||||||||||||
As of December 31, 2013 and December 31, 2012, the fair value of securities with gross unrealized losses by length of time that the individual securities have been in an unrealized loss position is as follows: | |||||||||||||||||||||||||
(Dollars in thousands) | Less Than 12 Months | 12 Months or Greater | Total | ||||||||||||||||||||||
Fair Value | Unrealized | Fair Value | Unrealized | Fair Value | Unrealized | ||||||||||||||||||||
Losses | Losses | Losses | |||||||||||||||||||||||
31-Dec-13 | |||||||||||||||||||||||||
US government agencies | $ | 6,766 | $ | (234 | ) | $ | — | $ | — | $ | 6,766 | $ | (234 | ) | |||||||||||
Government sponsored MBS | |||||||||||||||||||||||||
Residential | 46,373 | (506 | ) | 20 | — | 46,393 | (506 | ) | |||||||||||||||||
Municipal securities | |||||||||||||||||||||||||
North Carolina | 546 | (51 | ) | — | — | 546 | (51 | ) | |||||||||||||||||
Total at December 31, 2013 | $ | 53,685 | $ | (791 | ) | $ | 20 | $ | — | $ | 53,705 | $ | (791 | ) | |||||||||||
(Dollars in thousands) | Less Than 12 Months | 12 Months or Greater | Total | ||||||||||||||||||||||
Fair Value | Unrealized | Fair Value | Unrealized | Fair Value | Unrealized | ||||||||||||||||||||
Losses | Losses | Losses | |||||||||||||||||||||||
31-Dec-12 | |||||||||||||||||||||||||
Government sponsored MBS | |||||||||||||||||||||||||
Residential | $ | 8,027 | $ | (29 | ) | $ | 21 | $ | — | $ | 8,048 | $ | (29 | ) | |||||||||||
Total at December 31, 2012 | $ | 8,027 | $ | (29 | ) | $ | 21 | $ | — | $ | 8,048 | $ | (29 | ) |
ACCUMULATED_OTHER_COMPREHENSIV1
ACCUMULATED OTHER COMPREHENSIVE INCOME (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Equity [Abstract] | ' | ||||||||||||
Schedule of changes in Accumulated Other Comprehensive Income (Loss) by Component | ' | ||||||||||||
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) BY COMPONENT | |||||||||||||
For the Years Ended December 31, 2012 and 2013 | |||||||||||||
(Dollars in thousands) | |||||||||||||
Unrealized | Defined | Total | |||||||||||
Gains and | Benefit | ||||||||||||
Losses on | Pension Items | ||||||||||||
Available-for- | |||||||||||||
Sale Securities | |||||||||||||
Balance as of December 31, 2011 | $ | 481 | $ | (1,920 | ) | $ | (1,439 | ) | |||||
Other comprehensive income before reclassifications | 313 | 84 | 397 | ||||||||||
Amounts reclassified from acumulated other comprehensive income | (367 | ) | 1 | (366 | ) | ||||||||
Net current-period other comprehensive income | (54 | ) | 85 | 31 | |||||||||
Balance as of December 31,2012 | $ | 427 | $ | (1,835 | ) | $ | (1,408 | ) | |||||
Balance as of December 31, 2012 | $ | 427 | $ | (1,835 | ) | $ | (1,408 | ) | |||||
Other comprehensive loss before reclassifications | (831 | ) | 813 | (18 | ) | ||||||||
Amounts reclassified from acumulated other comprehensive loss | — | 1 | 1 | ||||||||||
Net current-period other comprehensive loss | (831 | ) | 814 | (17 | ) | ||||||||
Balance as of December 31, 2013 | $ | (404 | ) | $ | (1,021 | ) | $ | (1,425 | ) | ||||
All amounts are net of tax. |
LOANS_AND_ALLOWANCE_FOR_LOAN_L1
LOANS AND ALLOWANCE FOR LOAN LOSSES (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||||||||
Loans And Allowance For Loan Losses Tables | ' | ||||||||||||||||||||||||||||||||
Loan Portfolio Schedule | ' | ||||||||||||||||||||||||||||||||
The composition of the loan portfolio, net of deferred fees and costs, by loan classification as of December 31, 2013 and 2012: | |||||||||||||||||||||||||||||||||
(Dollars in thousands) | 31-Dec-13 | 31-Dec-12 | |||||||||||||||||||||||||||||||
Commercial | $ | 12,344 | $ | 3,282 | |||||||||||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||||||
Construction | 4,758 | 3,621 | |||||||||||||||||||||||||||||||
Owner occupied | 22,186 | 18,377 | |||||||||||||||||||||||||||||||
Other | 32,145 | 26,171 | |||||||||||||||||||||||||||||||
Faith-based non-profit: | |||||||||||||||||||||||||||||||||
Construction | — | 2,344 | |||||||||||||||||||||||||||||||
Owner Occupied | 78,761 | 76,418 | |||||||||||||||||||||||||||||||
Other | 6,702 | 7,135 | |||||||||||||||||||||||||||||||
Residential real estate: | |||||||||||||||||||||||||||||||||
First mortgage | 22,350 | 24,702 | |||||||||||||||||||||||||||||||
Multifamily | 3,271 | 5,828 | |||||||||||||||||||||||||||||||
Home equity | 3,051 | 3,161 | |||||||||||||||||||||||||||||||
Construction | 241 | 83 | |||||||||||||||||||||||||||||||
Consumer | 1,340 | 1,346 | |||||||||||||||||||||||||||||||
Other loans | 2,326 | 2,754 | |||||||||||||||||||||||||||||||
Loans, net of deferred fees | 189,475 | 175,222 | |||||||||||||||||||||||||||||||
ALLL | (3,493 | ) | (3,499 | ) | |||||||||||||||||||||||||||||
Loans, net of ALLL | $ | 185,982 | $ | 171,723 | |||||||||||||||||||||||||||||
Schedule of Allowance for Loan Losses | ' | ||||||||||||||||||||||||||||||||
The following tables present the reported investment in loans, net of deferred fees and costs, by portfolio segment and based on impairment method as of December 31, 2013 and December 31, 2012, respectively: | |||||||||||||||||||||||||||||||||
For the Year Ended December 31, 2013 | |||||||||||||||||||||||||||||||||
Faith- | |||||||||||||||||||||||||||||||||
Based | Residential | ||||||||||||||||||||||||||||||||
Commercial | Non- | Real | Other | ||||||||||||||||||||||||||||||
(Dollars in thousands) | Commercial | Real Estate | Profit | Estate | Consumer | Loans | Unallocated | Total | |||||||||||||||||||||||||
ALLL: | |||||||||||||||||||||||||||||||||
Total ending ALLL balances as of December 31, 2012 | $ | 90 | $ | 881 | $ | 1,246 | $ | 937 | $ | 30 | $ | 54 | $ | 261 | $ | 3,499 | |||||||||||||||||
For the year ended December 31, 2013 | |||||||||||||||||||||||||||||||||
Charge-offs | (7 | ) | (237 | ) | — | (138 | ) | (4 | ) | (20 | ) | — | (406 | ) | |||||||||||||||||||
Recoveries | — | 27 | — | 26 | 8 | 10 | — | 71 | |||||||||||||||||||||||||
Provision for loan losses | 101 | 137 | 637 | (332 | ) | (15 | ) | 62 | (261 | ) | 329 | ||||||||||||||||||||||
Total ending ALLL balances as of December 31, 2013 | $ | 184 | $ | 808 | $ | 1,883 | $ | 493 | $ | 19 | $ | 106 | $ | — | $ | 3,493 | |||||||||||||||||
31-Dec-13 | |||||||||||||||||||||||||||||||||
Faith | |||||||||||||||||||||||||||||||||
Based | |||||||||||||||||||||||||||||||||
Commercial | Non- | Residential | Other | ||||||||||||||||||||||||||||||
(Dollars in thousands) | Commercial | Real Estate | Profit | Real Estate | Consumer | Loans | Unallocated | Total | |||||||||||||||||||||||||
ALLL: | |||||||||||||||||||||||||||||||||
Ending ALLL balance attributable to loans: | |||||||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | — | $ | — | $ | 931 | $ | 75 | $ | — | $ | — | $ | — | $ | 1,006 | |||||||||||||||||
Collectively evaluated for impairment | 184 | 808 | 952 | 418 | 19 | 106 | — | 2,487 | |||||||||||||||||||||||||
Total ending ALLL balance | $ | 184 | $ | 808 | $ | 1,883 | $ | 493 | $ | 19 | $ | 106 | $ | — | $ | 3,493 | |||||||||||||||||
Loans: | |||||||||||||||||||||||||||||||||
Loans individually evaluated for impairment | $ | — | $ | 9,029 | $ | 17,661 | $ | 3,947 | $ | 11 | $ | — | $ | — | $ | 30,648 | |||||||||||||||||
Loans collectively evaluated for imapirment | 12,344 | 50,060 | 67,802 | 24,966 | 1,329 | 2,326 | — | 158,827 | |||||||||||||||||||||||||
Total ending loans balance | $ | 12,344 | $ | 59,089 | $ | 85,463 | $ | 28,913 | $ | 1,340 | $ | 2,326 | $ | — | $ | 189,475 | |||||||||||||||||
For the Year Ended December 31, 2012 | |||||||||||||||||||||||||||||||||
Faith- | |||||||||||||||||||||||||||||||||
Based | Residential | ||||||||||||||||||||||||||||||||
Commercial | Non- | Real | Other | ||||||||||||||||||||||||||||||
(Dollars in thousands) | Commercial | Real Estate | Profit | Estate | Consumer | Loans | Unallocated | Total | |||||||||||||||||||||||||
ALLL: | |||||||||||||||||||||||||||||||||
Total ending ALLL balances as of December 31, 2011 | $ | 348 | $ | 971 | $ | 1,128 | $ | 1,299 | $ | 62 | $ | 42 | $ | — | $ | 3,850 | |||||||||||||||||
For the year ended December 31, 2012 | |||||||||||||||||||||||||||||||||
Charge-offs | — | (98 | ) | — | (362 | ) | (169 | ) | — | — | (629 | ) | |||||||||||||||||||||
Recoveries | — | 75 | — | 17 | 20 | — | — | 112 | |||||||||||||||||||||||||
Provision (decrease) increase | (258 | ) | (67 | ) | 118 | (17 | ) | 117 | 12 | 261 | 166 | ||||||||||||||||||||||
Total ending ALLL balance as of December 31, 2012 | $ | 90 | $ | 881 | $ | 1,246 | $ | 937 | $ | 30 | $ | 54 | $ | 261 | $ | 3,499 | |||||||||||||||||
31-Dec-11 | |||||||||||||||||||||||||||||||||
Faith | |||||||||||||||||||||||||||||||||
Based | |||||||||||||||||||||||||||||||||
Commercial | Non- | Residential | Other | ||||||||||||||||||||||||||||||
(Dollars in thousands) | Commercial | Real Estate | Profit | Real Estate | Consumer | Loans | Unallocated | Total | |||||||||||||||||||||||||
ALLL: | |||||||||||||||||||||||||||||||||
Ending ALLL balance attributable to loans: | |||||||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | — | $ | 119 | $ | 56 | $ | 543 | $ | 2 | $ | — | $ | — | $ | 720 | |||||||||||||||||
Collectively evaluated for impairment | 348 | 852 | 1,072 | 756 | 60 | 42 | — | 3,130 | |||||||||||||||||||||||||
Total ending ALLL balance | $ | 348 | $ | 971 | $ | 1,128 | $ | 1,299 | $ | 62 | $ | 42 | $ | — | $ | 3,850 | |||||||||||||||||
Loans: | |||||||||||||||||||||||||||||||||
Loans individually evaluated for impairment | $ | 590 | $ | 6,828 | $ | 13,816 | $ | 2,180 | $ | 2 | $ | — | $ | — | $ | 23,416 | |||||||||||||||||
Loans collectively evaluated for impairment | 7,098 | 40,226 | 75,335 | 37,380 | 1,665 | 2,964 | — | 164,668 | |||||||||||||||||||||||||
Total ending loans balance | $ | 7,688 | $ | 47,054 | $ | 89,151 | $ | 39,560 | $ | 1,667 | $ | 2,964 | $ | — | $ | 188,084 | |||||||||||||||||
Schedule of Impaired Loans | ' | ||||||||||||||||||||||||||||||||
The following tables show impaired loans with and without valuation allowances as of December 31, 2013 and 2012: | |||||||||||||||||||||||||||||||||
31-Dec-13 | |||||||||||||||||||||||||||||||||
Interest | |||||||||||||||||||||||||||||||||
Unpaid | Earned | Average | |||||||||||||||||||||||||||||||
Principal | Recorded | ALLL | For the | Recorded | |||||||||||||||||||||||||||||
(Dollars in thousands) | Balance | Investment | Allocated | Year | Investment | ||||||||||||||||||||||||||||
With no related allowance recorded: | |||||||||||||||||||||||||||||||||
Commercial | $ | — | $ | — | $ | — | $ | — | $ | 74 | |||||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||||||
Construction | 363 | 364 | — | 28 | 321 | ||||||||||||||||||||||||||||
Owner occupied | 3,181 | 3,183 | — | 142 | 1,194 | ||||||||||||||||||||||||||||
Other | 5,486 | 5,503 | — | 256 | 4,858 | ||||||||||||||||||||||||||||
Faith based non-profit: | |||||||||||||||||||||||||||||||||
Construction | — | — | — | — | — | ||||||||||||||||||||||||||||
Owner occupied | 14,151 | 14,203 | — | 681 | 12,880 | ||||||||||||||||||||||||||||
Other | — | — | — | — | — | ||||||||||||||||||||||||||||
Residential real estate: | |||||||||||||||||||||||||||||||||
First mortgage | 3,116 | 3,119 | — | 213 | 2,143 | ||||||||||||||||||||||||||||
Multifamily | — | — | — | — | — | ||||||||||||||||||||||||||||
Home equity | 77 | 77 | — | 3 | 50 | ||||||||||||||||||||||||||||
Construction | — | — | — | — | — | ||||||||||||||||||||||||||||
Consumer | 11 | 11 | — | — | 9 | ||||||||||||||||||||||||||||
Impaired loans with no allowance recorded | $ | 26,385 | $ | 26,460 | $ | — | $ | 1,323 | $ | 21,529 | |||||||||||||||||||||||
With an allowance recorded: | |||||||||||||||||||||||||||||||||
Commercial | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||||||
Construction | — | — | — | — | — | ||||||||||||||||||||||||||||
Owner occupied | — | — | — | — | 59 | ||||||||||||||||||||||||||||
Other | — | — | — | — | 251 | ||||||||||||||||||||||||||||
Faith based non-profit: | |||||||||||||||||||||||||||||||||
Construction | — | — | — | — | — | ||||||||||||||||||||||||||||
Owner occupied | 3,510 | 3,500 | 931 | 242 | 631 | ||||||||||||||||||||||||||||
Other | — | — | — | — | — | ||||||||||||||||||||||||||||
Residential real estate: | |||||||||||||||||||||||||||||||||
First mortgage | 621 | 623 | 38 | 29 | 1,017 | ||||||||||||||||||||||||||||
Multifamily | — | — | — | — | — | ||||||||||||||||||||||||||||
Home equity | 131 | 131 | 37 | 6 | 42 | ||||||||||||||||||||||||||||
Construction | — | — | — | — | — | ||||||||||||||||||||||||||||
Consumer | — | — | — | — | — | ||||||||||||||||||||||||||||
Impaired loans with allowance recorded | $ | 4,262 | $ | 4,254 | $ | 1,006 | $ | 277 | $ | 2,000 | |||||||||||||||||||||||
Impaired loans | $ | 30,647 | $ | 30,714 | $ | 1,006 | $ | 1,600 | $ | 23,529 | |||||||||||||||||||||||
31-Dec-12 | |||||||||||||||||||||||||||||||||
Interest | |||||||||||||||||||||||||||||||||
Unpaid | Earned | Average | |||||||||||||||||||||||||||||||
Principal | Recorded | ALLL | For the | Recorded | |||||||||||||||||||||||||||||
(Dollars in thousands) | Balance | Investment | Allocated | Year | Investment | ||||||||||||||||||||||||||||
With no related allowance recorded: | |||||||||||||||||||||||||||||||||
Commercial | $ | — | $ | — | $ | — | $ | — | $ | 295 | |||||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||||||
Construction | 371 | 371 | — | 31 | 300 | ||||||||||||||||||||||||||||
Owner occupied | 530 | 530 | — | 38 | 635 | ||||||||||||||||||||||||||||
Other | 4,312 | 3,698 | — | 129 | 4,473 | ||||||||||||||||||||||||||||
Faith based non-profit: | |||||||||||||||||||||||||||||||||
Construction | — | — | — | — | — | ||||||||||||||||||||||||||||
Owner occupied | 14,479 | 14,479 | — | 567 | 12,261 | ||||||||||||||||||||||||||||
Other | — | — | — | — | 1,611 | ||||||||||||||||||||||||||||
Residential real estate: | |||||||||||||||||||||||||||||||||
First mortgage | 814 | 814 | — | 19 | 2,671 | ||||||||||||||||||||||||||||
Multifamily | — | — | — | — | — | ||||||||||||||||||||||||||||
Home equity | 86 | 86 | — | 3 | 111 | ||||||||||||||||||||||||||||
Construction | — | — | — | — | — | ||||||||||||||||||||||||||||
Consumer | 16 | 16 | — | — | 4 | ||||||||||||||||||||||||||||
Impaired loans with no allowance recorded | $ | 20,608 | $ | 19,994 | $ | — | $ | 787 | $ | 22,361 | |||||||||||||||||||||||
With an allowance recorded: | |||||||||||||||||||||||||||||||||
Commercial | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||||||
Construction | — | — | — | — | — | ||||||||||||||||||||||||||||
Owner occupied | 238 | 238 | 87 | 15 | 60 | ||||||||||||||||||||||||||||
Other | — | — | — | — | 500 | ||||||||||||||||||||||||||||
Faith based non-profit: | |||||||||||||||||||||||||||||||||
Construction | — | — | — | — | 214 | ||||||||||||||||||||||||||||
Owner occupied | 428 | 428 | 44 | 30 | — | ||||||||||||||||||||||||||||
Other | — | — | — | — | — | ||||||||||||||||||||||||||||
Residential real estate: | |||||||||||||||||||||||||||||||||
First mortgage | 1,543 | 1,543 | 349 | 45 | 757 | ||||||||||||||||||||||||||||
Multifamily | — | — | — | — | — | ||||||||||||||||||||||||||||
Home equity | — | — | — | — | — | ||||||||||||||||||||||||||||
Construction | — | — | — | — | — | ||||||||||||||||||||||||||||
Consumer | — | — | — | — | — | ||||||||||||||||||||||||||||
Impaired loans with allowance recorded | $ | 2,209 | $ | 2,209 | $ | 480 | $ | 90 | $ | 1,531 | |||||||||||||||||||||||
Impaired loans | $ | 22,817 | $ | 22,203 | $ | 480 | $ | 877 | $ | 23,892 | |||||||||||||||||||||||
Schedule of Troubled Debt Restructurings | ' | ||||||||||||||||||||||||||||||||
The followings tables present details of TDR loans that were restructured during the year ended December 31, 2013 and 2012: | |||||||||||||||||||||||||||||||||
31-Dec-13 | Pre-modification Outstanding | Post-Modification Outstanding | |||||||||||||||||||||||||||||||
(Dollars in thousands) | Number of loans | Recorded Investment | Recorded Investment | ||||||||||||||||||||||||||||||
Below market interest rate | |||||||||||||||||||||||||||||||||
and extended payment terms | |||||||||||||||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||||||
Owner occupied | 1 | $ | 2,645 | $ | 2,598 | ||||||||||||||||||||||||||||
Faith-based non-profit: | |||||||||||||||||||||||||||||||||
Owner Occupied | 1 | 1,284 | 1,273 | ||||||||||||||||||||||||||||||
Below market interest rates | |||||||||||||||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||||||
Owner occupied | 1 | 1,840 | 1,840 | ||||||||||||||||||||||||||||||
Extended payment terms | |||||||||||||||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||||||
Owner occupied | 1 | 40 | 21 | ||||||||||||||||||||||||||||||
Total | 4 | $ | 5,809 | $ | 5,732 | ||||||||||||||||||||||||||||
31-Dec-12 | Pre-modification Outstanding | Post-Modification Outstanding | |||||||||||||||||||||||||||||||
(Dollars in thousands) | Number of loans | Recorded Investment | Recorded Investment | ||||||||||||||||||||||||||||||
Below market interest rate | |||||||||||||||||||||||||||||||||
Faith-based non-profit: | |||||||||||||||||||||||||||||||||
Owner Occupied | 1 | $ | 2,522 | $ | 2,484 | ||||||||||||||||||||||||||||
Extended payment terms | |||||||||||||||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||||||
Owner occupied | 1 | 82 | 80 | ||||||||||||||||||||||||||||||
Other | 1 | 353 | 351 | ||||||||||||||||||||||||||||||
Faith-based non-profit: | |||||||||||||||||||||||||||||||||
Owner Occupied | 4 | 1,635 | 1,615 | ||||||||||||||||||||||||||||||
Residential real estate: | |||||||||||||||||||||||||||||||||
First mortgage | 1 | 37 | 34 | ||||||||||||||||||||||||||||||
Total | 8 | $ | 4,629 | $ | 4,564 | ||||||||||||||||||||||||||||
The following table presents loans modified as TDRs with a payment default occurring within 12 months of the restructure date, during the years ended December 31, 2013 and 2012: | |||||||||||||||||||||||||||||||||
31-Dec-13 | 31-Dec-12 | ||||||||||||||||||||||||||||||||
Default | Default | ||||||||||||||||||||||||||||||||
Number of | Recorded | Number of | Recorded | ||||||||||||||||||||||||||||||
(Dollars in thousands) | Loans | Investment | Loans | Investment | |||||||||||||||||||||||||||||
Below market interest rate and extended payment terms | 1 | $ | 2,598 | — | $ | — | |||||||||||||||||||||||||||
Below market interest rate | — | — | — | — | |||||||||||||||||||||||||||||
Extended payment terms | — | — | |||||||||||||||||||||||||||||||
Total | 1 | $ | 2,598 | — | $ | — | |||||||||||||||||||||||||||
Schedule of non-accrual loans | ' | ||||||||||||||||||||||||||||||||
90 Days | |||||||||||||||||||||||||||||||||
or More | |||||||||||||||||||||||||||||||||
Past Due | |||||||||||||||||||||||||||||||||
31-Dec-13 | Still | ||||||||||||||||||||||||||||||||
(Dollars in thousands) | Non-accrual | Number | Accruing | Number | |||||||||||||||||||||||||||||
Commercial | $ | — | — | $ | — | — | |||||||||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||||||
Construction | — | — | — | — | |||||||||||||||||||||||||||||
Owner occupied | 2,676 | 3 | — | — | |||||||||||||||||||||||||||||
Other | 532 | 3 | 110 | 1 | |||||||||||||||||||||||||||||
Faith-based non-profit: | |||||||||||||||||||||||||||||||||
Construction | — | — | — | — | |||||||||||||||||||||||||||||
Owner Occupied | 29 | 1 | 332 | 1 | |||||||||||||||||||||||||||||
Other | — | — | — | — | |||||||||||||||||||||||||||||
Residential real estate: | |||||||||||||||||||||||||||||||||
First mortgage | 3,348 | 43 | 253 | 5 | |||||||||||||||||||||||||||||
Multifamily | — | — | — | — | |||||||||||||||||||||||||||||
Home equity | 124 | 7 | — | — | |||||||||||||||||||||||||||||
Construction | — | — | — | — | |||||||||||||||||||||||||||||
Consumer | 11 | 2 | — | — | |||||||||||||||||||||||||||||
Other loans | — | — | — | — | |||||||||||||||||||||||||||||
Total | $ | 6,720 | 59 | $ | 695 | 7 | |||||||||||||||||||||||||||
90 Days | |||||||||||||||||||||||||||||||||
or More | |||||||||||||||||||||||||||||||||
Past Due | |||||||||||||||||||||||||||||||||
31-Dec-12 | Still | ||||||||||||||||||||||||||||||||
(Dollars in thousands) | Non-accrual | Number | Accruing | Number | |||||||||||||||||||||||||||||
Commercial | $ | — | — | $ | — | — | |||||||||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||||||
Construction | — | — | — | — | |||||||||||||||||||||||||||||
Owner occupied | 39 | 1 | 224 | 4 | |||||||||||||||||||||||||||||
Other | 49 | 1 | 351 | 1 | |||||||||||||||||||||||||||||
Faith-based non-profit | |||||||||||||||||||||||||||||||||
Construction | — | — | — | — | |||||||||||||||||||||||||||||
Owner Occupied | 5,241 | 4 | 661 | 3 | |||||||||||||||||||||||||||||
Other | — | — | — | — | |||||||||||||||||||||||||||||
Residential real estate: | |||||||||||||||||||||||||||||||||
First mortgage | 3,384 | 44 | 357 | 6 | |||||||||||||||||||||||||||||
Multifamily | — | — | — | — | |||||||||||||||||||||||||||||
Home equity | 3 | 1 | 101 | 1 | |||||||||||||||||||||||||||||
Construction | — | — | — | — | |||||||||||||||||||||||||||||
Consumer | 16 | 2 | — | — | |||||||||||||||||||||||||||||
Other loans | — | — | — | — | |||||||||||||||||||||||||||||
Total | $ | 8,732 | 53 | $ | 1,694 | 15 | |||||||||||||||||||||||||||
The following table displays all non-accrual loans and loans 90 or more days past due and still on accrual for the period ended December 31, 2013. | |||||||||||||||||||||||||||||||||
(Dollars in thousands) | Non-accrual | Number | |||||||||||||||||||||||||||||||
Loans past due over 90 days still on accrual | $ | 695 | 7 | ||||||||||||||||||||||||||||||
Non-accrual loans past due | |||||||||||||||||||||||||||||||||
Less than 30 days | $ | 2,062 | 32 | ||||||||||||||||||||||||||||||
30-59 days | 495 | 3 | |||||||||||||||||||||||||||||||
60-89 days | 98 | 3 | |||||||||||||||||||||||||||||||
90+ days | 4,065 | 21 | |||||||||||||||||||||||||||||||
Non-accrual loans | $ | 6,720 | 59 | ||||||||||||||||||||||||||||||
The following table displays all non-accrual loans and loans 90 or more days past due and still on accrual for the period ended December 31, 2012. | |||||||||||||||||||||||||||||||||
(Dollars in thousands) | Non-accrual | Number | |||||||||||||||||||||||||||||||
Loans past due over 90 days still on accrual | $ | 1,694 | 15 | ||||||||||||||||||||||||||||||
Non-accrual loans past due | |||||||||||||||||||||||||||||||||
Less than 30 days | $ | 5,615 | 9 | ||||||||||||||||||||||||||||||
30-59 days | 300 | 6 | |||||||||||||||||||||||||||||||
60-89 days | 268 | 1 | |||||||||||||||||||||||||||||||
90+ days | 2,549 | 37 | |||||||||||||||||||||||||||||||
Non-accrual loans | $ | 8,732 | 53 | ||||||||||||||||||||||||||||||
Schedule of Past Due loans | ' | ||||||||||||||||||||||||||||||||
The following tables present loans not past due, and the aging of past due loans as of December 31, 2013 and 2012 by class of loans: | |||||||||||||||||||||||||||||||||
90 Days | |||||||||||||||||||||||||||||||||
31-Dec-13 | 30-59 Days | 60-89 Days | Or More | Total Past | |||||||||||||||||||||||||||||
(Dollars in thousands) | Past Due | Past Due | Past Due | Due | Current | Total | |||||||||||||||||||||||||||
Commercial | $ | — | $ | 4 | $ | — | $ | 4 | $ | 12,340 | $ | 12,344 | |||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||||||
Construction | — | — | — | — | 4,758 | 4,758 | |||||||||||||||||||||||||||
Owner occupied | 77 | — | 2,675 | 2,752 | 19,434 | 22,186 | |||||||||||||||||||||||||||
Other | — | — | 642 | 642 | 31,503 | 32,145 | |||||||||||||||||||||||||||
Faith-based non-profit | |||||||||||||||||||||||||||||||||
Construction | — | — | — | — | — | — | |||||||||||||||||||||||||||
Owner Occupied | 2,859 | 29 | 333 | 3,221 | 75,540 | 78,761 | |||||||||||||||||||||||||||
Other | 1 | — | — | 1 | 6,701 | 6,702 | |||||||||||||||||||||||||||
Residential real estate: | |||||||||||||||||||||||||||||||||
First mortgage | 747 | 275 | 2,602 | 3,624 | 18,726 | 22,350 | |||||||||||||||||||||||||||
Multifamily | — | — | — | — | 3,271 | 3,271 | |||||||||||||||||||||||||||
Home equity | 241 | — | 118 | 359 | 2,692 | 3,051 | |||||||||||||||||||||||||||
Construction | — | — | — | — | 241 | 241 | |||||||||||||||||||||||||||
Consumer | 6 | 3 | 9 | 18 | 1,322 | 1,340 | |||||||||||||||||||||||||||
Other loans | — | — | — | — | 2,326 | 2,326 | |||||||||||||||||||||||||||
Total | $ | 3,931 | $ | 311 | $ | 6,379 | $ | 10,621 | $ | 178,854 | $ | 189,475 | |||||||||||||||||||||
90 Days | |||||||||||||||||||||||||||||||||
31-Dec-12 | 30-59 Days | 60-89 Days | Or More | Total Past | |||||||||||||||||||||||||||||
(Dollars in thousands) | Past Due | Past Due | Past Due | Due | Current | Total | |||||||||||||||||||||||||||
Commercial | $ | — | $ | 353 | $ | — | $ | 353 | $ | 2,929 | $ | 3,282 | |||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||||||
Construction | — | — | — | — | 3,621 | 3,621 | |||||||||||||||||||||||||||
Owner occupied | — | — | 263 | 263 | 18,114 | 18,377 | |||||||||||||||||||||||||||
Other | 1,570 | 856 | 400 | 2,826 | 23,345 | 26,171 | |||||||||||||||||||||||||||
Faith-based non-profit | |||||||||||||||||||||||||||||||||
Construction | — | — | — | — | 2,344 | 2,344 | |||||||||||||||||||||||||||
Owner Occupied | 1,845 | — | 661 | 2,506 | 73,912 | 76,418 | |||||||||||||||||||||||||||
Other | — | — | — | — | 7,135 | 7,135 | |||||||||||||||||||||||||||
Residential real estate: | |||||||||||||||||||||||||||||||||
First mortgage | 787 | 548 | 2,812 | 4,147 | 20,555 | 24,702 | |||||||||||||||||||||||||||
Multifamily | — | — | — | — | 5,828 | 5,828 | |||||||||||||||||||||||||||
Home equity | 122 | 120 | 108 | 350 | 2,811 | 3,161 | |||||||||||||||||||||||||||
Construction | — | — | — | — | 83 | 83 | |||||||||||||||||||||||||||
Consumer | 8 | 9 | — | 17 | 1,329 | 1,346 | |||||||||||||||||||||||||||
Other loans | — | — | — | — | 2,754 | 2,754 | |||||||||||||||||||||||||||
Total | $ | 4,332 | $ | 1,886 | $ | 4,244 | $ | 10,462 | $ | 164,760 | $ | 175,222 | |||||||||||||||||||||
Loans by risk category | ' | ||||||||||||||||||||||||||||||||
As of December 31, 2013, and based on the most recent analysis performed, the risk category of loans by class of loans was as follows: | |||||||||||||||||||||||||||||||||
(Dollars in thousands) | Pass | Special Mention | Substandard | Doubtful | Total | ||||||||||||||||||||||||||||
Commercial | $ | 12,342 | $ | — | $ | 2 | $ | — | $ | 12,344 | |||||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||||||
Construction | 4,396 | — | 362 | — | 4,758 | ||||||||||||||||||||||||||||
Owner occupied | 17,586 | 625 | 3,975 | — | 22,186 | ||||||||||||||||||||||||||||
Other | 27,584 | 2,703 | 1,858 | — | 32,145 | ||||||||||||||||||||||||||||
Faith-based non-profit: | |||||||||||||||||||||||||||||||||
Construction | — | — | — | — | — | ||||||||||||||||||||||||||||
Owner Occupied | 66,626 | 7,474 | 4,661 | — | 78,761 | ||||||||||||||||||||||||||||
Other | 6,701 | 1 | — | — | 6,702 | ||||||||||||||||||||||||||||
Residential real estate: | |||||||||||||||||||||||||||||||||
First mortgage | 17,890 | 427 | 4,033 | — | 22,350 | ||||||||||||||||||||||||||||
Multifamily | 3,171 | 38 | 62 | — | 3,271 | ||||||||||||||||||||||||||||
Home equity | 2,668 | — | 383 | — | 3,051 | ||||||||||||||||||||||||||||
Construction | 241 | — | — | — | 241 | ||||||||||||||||||||||||||||
Consumer | 1,323 | — | 17 | — | 1,340 | ||||||||||||||||||||||||||||
Other loans | 2,326 | — | — | — | 2,326 | ||||||||||||||||||||||||||||
Total | $ | 162,854 | $ | 11,268 | $ | 15,353 | $ | — | $ | 189,475 | |||||||||||||||||||||||
As of December 31, 2012, the risk category of loans by class of loans was as follows: | |||||||||||||||||||||||||||||||||
(Dollars in thousands) | Pass | Special Mention | Substandard | Doubtful | Total | ||||||||||||||||||||||||||||
Commercial | $ | 3,274 | $ | — | $ | 8 | $ | — | $ | 3,282 | |||||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||||||
Construction | 3,065 | — | 556 | — | 3,621 | ||||||||||||||||||||||||||||
Owner occupied | 13,379 | 3,151 | 1,847 | — | 18,377 | ||||||||||||||||||||||||||||
Other | 21,582 | 966 | 3,623 | — | 26,171 | ||||||||||||||||||||||||||||
Faith-based non-profit: | |||||||||||||||||||||||||||||||||
Construction | 2,344 | — | — | — | 2,344 | ||||||||||||||||||||||||||||
Owner Occupied | 58,732 | 5,313 | 12,373 | — | 76,418 | ||||||||||||||||||||||||||||
Other | 7,059 | 76 | — | — | 7,135 | ||||||||||||||||||||||||||||
Residential real estate: | |||||||||||||||||||||||||||||||||
First mortgage | 19,465 | 1,731 | 3,506 | — | 24,702 | ||||||||||||||||||||||||||||
Multifamily | 5,702 | 63 | 63 | — | 5,828 | ||||||||||||||||||||||||||||
Home equity | 2,853 | — | 308 | — | 3,161 | ||||||||||||||||||||||||||||
Construction | 83 | — | — | — | 83 | ||||||||||||||||||||||||||||
Consumer | 1,323 | 2 | 21 | — | 1,346 | ||||||||||||||||||||||||||||
Other loans | 2,754 | — | — | — | 2,754 | ||||||||||||||||||||||||||||
Total | $ | 141,615 | $ | 11,302 | $ | 22,305 | $ | — | $ | 175,222 |
BANK_PREMISES_AND_EQUIPMENT_Ta
BANK PREMISES AND EQUIPMENT (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Bank Premises And Equipment Tables | ' | ||||||||
Schedule of bank premises and equipment | ' | ||||||||
Below is a summary of bank premises and equipment, net as of December 31, 2013 and 2012: | |||||||||
(Dollars in thousands) | 2013 | 2012 | |||||||
Land | $ | 747 | $ | 747 | |||||
Buildings and leasehold improvements | 7,227 | 7,242 | |||||||
Furniture and equipment | 2,347 | 2,294 | |||||||
Capital Lease | 295 | 295 | |||||||
10,616 | 10,578 | ||||||||
Less: accumulated depreciation and amortization | 6,243 | 5,895 | |||||||
$ | 4,373 | $ | 4,683 |
DEPOSITS_Tables
DEPOSITS (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Deposits Tables | ' | ||||||||||||||||
Maturities of time deposits | ' | ||||||||||||||||
The following shows the maturity schedule of all time deposits: | |||||||||||||||||
(Dollars in thousands) | Amount | ||||||||||||||||
2014 | $ | 129,753 | |||||||||||||||
2015 | 11,451 | ||||||||||||||||
2016 | 1,718 | ||||||||||||||||
2017 | 628 | ||||||||||||||||
Thereafter | 262 | ||||||||||||||||
Total | $ | 143,812 | |||||||||||||||
Principal maturities of time deposits | ' | ||||||||||||||||
Principal maturities of time deposits of $100,000 or more as of December 31, 2013 were as follows: | |||||||||||||||||
31-Dec-13 | 31-Dec-12 | ||||||||||||||||
(Dollars in thousands) | Amount | Average Rate | Amount | Average Rate | |||||||||||||
Three months or less | $ | 44,099 | 0.3 | % | 55,782 | 0.32 | % | ||||||||||
Over three months to six months | 21,123 | 0.31 | 5,568 | 0.27 | |||||||||||||
Over six months to twelve months | 46,272 | 0.38 | 44,120 | 0.51 | |||||||||||||
Over one year to five years | 10,409 | 0.57 | 6,532 | 0.83 | |||||||||||||
Total | $ | 121,903 | 0.36 | % | 112,002 | 0.42 | % |
LEASES_Tables
LEASES (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Leases Tables | ' | ||||
Schedule of future minimum payments for Capital Leases | ' | ||||
The following are future minimum capital lease payments as required under the agreements as of December 31, 2013: | |||||
(Dollars in thousands) | Amount | ||||
2014 | $ | 59 | |||
2015 | 60 | ||||
2016 | 46 | ||||
2017 | — | ||||
2018 | — | ||||
Thereafter | — | ||||
Total | $ | 165 | |||
Schedule of future minimum payments for operating leases | ' | ||||
The following are future minimum operating lease payments as required under the agreements: | |||||
(Dollars in thousands) | Amount | ||||
2014 | $ | 90 | |||
2015 | 19 | ||||
2016 | 4 | ||||
2017 | — | ||||
2018 | — | ||||
Thereafter | — | ||||
Total | $ | 113 | |||
Schedule of future sublease rental revenue | ' | ||||
The following are the minimum rentals to be received under related lease agreements: | |||||
(Dollars in thousands) | Amount | ||||
2014 | $ | 120 | |||
2015 | 30 | ||||
2016 | 23 | ||||
Total | $ | 173 |
BORROWINGS_Tables
BORROWINGS (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Borrowings Tables | ' | ||||||||
Schedule of maturities of FHLB Advances | ' | ||||||||
The following is the outstanding principal maturities and interest rate of the Company's FHLB advances: | |||||||||
31-Dec-13 | |||||||||
Maturity Date | Amount | Rate | |||||||
(Dollars in thousands) | |||||||||
2014 | $ | 23 | 0.5 | % | |||||
2015 | 24 | 0.5 | % | ||||||
2016 | 24 | 0.5 | % | ||||||
2017 | 25 | 0.5 | % | ||||||
2018 | 26 | 0.5 | % | ||||||
Thereafter | 559 | 0.5 | % | ||||||
$ | 681 | 0.5 | % |
INCOME_TAXES_Tables
INCOME TAXES (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Income Taxes Tables | ' | ||||||||
Components of income tax | ' | ||||||||
The components of the income tax expense (benefit) for the years ended December 31, 2013 and 2012 were as follows: | |||||||||
(Dollars in thousands) | 2013 | 2012 | |||||||
Income tax expense (benefit) | |||||||||
Current | $ | 191 | $ | 6 | |||||
Deferred | (40 | ) | 110 | ||||||
Total | $ | 151 | $ | 116 | |||||
Reconciliation of tax rate | ' | ||||||||
A reconciliation of reported income tax expense for the years ended December 31, 2013 and 2012 to the amount of tax expense computed by multiplying income before income taxes by the statutory federal income tax rate follows: | |||||||||
(Dollars in thousands) | 2013 | 2012 | |||||||
Statutory federal income tax rate | 34 | % | 34 | % | |||||
Tax provision at statutory rate | $ | 175 | $ | 156 | |||||
Increase (decrease) in income taxes resulting from: | |||||||||
State income taxes net of federal benefit | 77 | 7 | |||||||
Tax exempt interest income | (14 | ) | (37 | ) | |||||
Disallowed interest expense | — | 1 | |||||||
Increase in Valuation Allowance | (18 | ) | 41 | ||||||
Cash surrender value of life insurance | (71 | ) | (69 | ) | |||||
Other | 2 | 17 | |||||||
Total | $ | 151 | $ | 116 | |||||
Schedule of deferred tax assets and liabilities | ' | ||||||||
The tax effect of the cumulative temporary differences and carry forwards that gave rise to the deferred tax assets and liabilities as of December 31, 2013 and December 31, 2012 within the Consolidated Balance Sheets were as follows: | |||||||||
(Dollars in thousands) | December 31, | ||||||||
2013 | 2012 | ||||||||
Deferred tax assets: | |||||||||
Accrued pension expense | $ | 421 | $ | 458 | |||||
Adjustments, defined benefit plans | 624 | 1,151 | |||||||
Deferred loan fees | 74 | 70 | |||||||
Excess book over tax provision for loan loss expense | 1,331 | 1,370 | |||||||
Federal net operating loss carryforward | 170 | 300 | |||||||
State net economic loss carryforward | 191 | 210 | |||||||
Impairment on investments | 73 | 74 | |||||||
OREO write-downs | 233 | 175 | |||||||
Deferred gain on other real estate owned | 4 | 18 | |||||||
Premises and equipment | 147 | 155 | |||||||
Alternative minimum tax | 556 | 383 | |||||||
Unrealized gains on securities available for sale | 248 | — | |||||||
Other, net | 77 | 59 | |||||||
Total deferred tax assets | 4,149 | 4,423 | |||||||
Valuation allowance for deferred tax assets | (222 | ) | (240 | ) | |||||
Net of valuation allowance deferred tax asset | 3,927 | 4,183 | |||||||
Deferred tax liabilities: | |||||||||
Unrealized gains on securities available for sale | — | (232 | ) | ||||||
Other | (116 | ) | (132 | ) | |||||
Total deferred tax liabilities | (116 | ) | (364 | ) | |||||
Net deferred tax assets | 3,811 | 3,819 | |||||||
Tax Receivable, net | 342 | 568 | |||||||
Deferred tax assets and taxes receivable, net | $ | 4,153 | $ | 4,387 |
EMPLOYEE_BENEFIT_PLANS_Tables
EMPLOYEE BENEFIT PLANS (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
Employee Benefit Plans Tables | ' | ||||||||||||||||||||||||
Schedule of Actual Asset Allocation in Defined Benefit Plans | ' | ||||||||||||||||||||||||
The following table shows the type of assets held in the Cash Balance Plan: | |||||||||||||||||||||||||
As of December 31, | |||||||||||||||||||||||||
Asset Category | 2013 | 2012 | |||||||||||||||||||||||
Equity securities | 66.40% | 66.10% | |||||||||||||||||||||||
Debt securities | 30.30% | 31.10% | |||||||||||||||||||||||
All other assets | 3.30% | 2.80% | |||||||||||||||||||||||
Total | 100.00% | 100.00% | |||||||||||||||||||||||
Schedule of net periodic benefit cost | ' | ||||||||||||||||||||||||
The SERP and the Cash Balance Plan components of the net periodic benefit cost reflected in salaries and employee benefits expense for the years ended December 31, 2013 and December 31, 2012 were: | |||||||||||||||||||||||||
Cash Balance Plan | SERP | Total | |||||||||||||||||||||||
(Dollars in thousands) | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | |||||||||||||||||||
Service costs | $ | 160 | $ | 143 | $ | — | $ | — | $ | 160 | $ | 143 | |||||||||||||
Interest cost | 201 | 222 | 72 | 72 | 273 | 294 | |||||||||||||||||||
Expected return on Plan assets | (300 | ) | (265 | ) | — | — | (300 | ) | (265 | ) | |||||||||||||||
Amortization of prior service cost and recognized net actuarial gain | 313 | 213 | 12 | 12 | 325 | 225 | |||||||||||||||||||
Net periodic pension cost | $ | 374 | $ | 313 | $ | 84 | $ | 84 | $ | 458 | $ | 397 | |||||||||||||
Schedule of changes in the projected benefit obligations | ' | ||||||||||||||||||||||||
The following table shows the change in the projected benefit obligations and plan assets for the years ended December 31, 2013 and 2012: | |||||||||||||||||||||||||
Cash Balance Plan | SERP | Total | |||||||||||||||||||||||
(Dollars in thousands) | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | |||||||||||||||||||
Change in projected benefit obligations: | |||||||||||||||||||||||||
Benefit obligation at beginning of year | $ | 6,240 | $ | 5,758 | $ | 2,158 | $ | 2,325 | $ | 8,398 | $ | 8,083 | |||||||||||||
Service cost | 160 | 143 | — | — | 160 | 143 | |||||||||||||||||||
Interest cost | 201 | 222 | 73 | 95 | 274 | 317 | |||||||||||||||||||
Actuarial gain / (loss) | (338 | ) | 343 | (122 | ) | (108 | ) | (460 | ) | 235 | |||||||||||||||
Benefits and expenses paid | (626 | ) | (226 | ) | (154 | ) | (154 | ) | (780 | ) | (380 | ) | |||||||||||||
Benefit obligation at end of year | 5,637 | 6,240 | 1,955 | 2,158 | 7,592 | 8,398 | |||||||||||||||||||
Change in plan assets: | |||||||||||||||||||||||||
Fair value of plan assets at beginning of year | 4,676 | 4,145 | — | — | 4,676 | 4,145 | |||||||||||||||||||
Actual return on plan assets | 857 | 408 | — | — | 857 | 408 | |||||||||||||||||||
Employer contributions | 325 | 350 | 154 | 154 | 479 | 504 | |||||||||||||||||||
Benefits and expenses paid | (625 | ) | (227 | ) | (154 | ) | (154 | ) | (779 | ) | (381 | ) | |||||||||||||
Fair value of plan assets at year end | 5,233 | 4,676 | — | — | 5,233 | 4,676 | |||||||||||||||||||
Funded status - (under funded) | $ | (404 | ) | $ | (1,564 | ) | $ | (1,955 | ) | $ | (2,158 | ) | $ | (2,359 | ) | $ | (3,722 | ) | |||||||
Schedule of pre-tax amounts included in accumulated other comprehensive income expected to be recognized in 2013 | ' | ||||||||||||||||||||||||
The amounts in accumulated other comprehensive loss that have not been recognized as components of net periodic pension cost were: | |||||||||||||||||||||||||
Cash Balance Plan | SERP | Total | |||||||||||||||||||||||
(Dollars in thousands) | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | |||||||||||||||||||
Unrecognized net actuarial loss | $ | 1,361 | $ | 2,567 | $ | 281 | $ | 415 | $ | 1,642 | $ | 2,982 | |||||||||||||
Unrecognized prior service cost | 2 | 4 | — | — | 2 | 4 | |||||||||||||||||||
Total amount included in accumulated other comprehensive loss | $ | 1,363 | $ | 2,571 | $ | 281 | $ | 415 | $ | 1,644 | $ | 2,986 | |||||||||||||
Weighted average assumptions as of December 31: | |||||||||||||||||||||||||
Discount rate | 4.50% | 3.50% | 4.25% | 3.50% | |||||||||||||||||||||
Expected return on plan assets | 7.00% | 7.00% | n/a | n/a | |||||||||||||||||||||
Rate of compensation increase | 3.00% | 3.00% | 3.00% | 3.00% | |||||||||||||||||||||
Schedule of pre-tax amounts recognized as a component of accumulated other comprehensive income | ' | ||||||||||||||||||||||||
Amounts in accumulated other comprehensive loss expected to be recognized in net periodic costs in 2014: | |||||||||||||||||||||||||
(Dollars in Thousands) | Cash Balance Plan | SERP | Total | ||||||||||||||||||||||
Net actuarial loss | $ | 85 | $ | 6 | $ | 91 | |||||||||||||||||||
Prior service cost | 2 | — | 2 | ||||||||||||||||||||||
Total expected to be recognized | $ | 87 | $ | 6 | $ | 93 | |||||||||||||||||||
Assets expected to be returned to the Company in 2014 | $ | — | $ | — | $ | — | |||||||||||||||||||
Schedule of expected benefits to be paid in the following years | ' | ||||||||||||||||||||||||
The estimated expected benefits payments for the Cash Balance Plan and SERP are: | |||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||
For the Years Ending December 31: | Cash Balance Plan | SERP | TOTAL | ||||||||||||||||||||||
2014 | $ | 735 | $ | 154 | $ | 889 | |||||||||||||||||||
2015 | 395 | 152 | 547 | ||||||||||||||||||||||
2016 | 455 | 150 | 605 | ||||||||||||||||||||||
2017 | 411 | 148 | 559 | ||||||||||||||||||||||
2018 | 414 | 146 | 560 | ||||||||||||||||||||||
2019-2023 | 2,110 | 691 | 2,801 | ||||||||||||||||||||||
Total | $ | 4,520 | $ | 1,441 | $ | 5,961 | |||||||||||||||||||
Schedule of target allocation of plan assets | ' | ||||||||||||||||||||||||
The target range of allocation percentages for each major category of plan assets was: | |||||||||||||||||||||||||
Asset Category | Target Weight | Minimum Weight | Maximum Weight | ||||||||||||||||||||||
Cash | 0% | 0% | 10% | ||||||||||||||||||||||
Equities: | |||||||||||||||||||||||||
US | 66% | 56% | 76% | ||||||||||||||||||||||
Non-US | 7% | 0% | 14% | ||||||||||||||||||||||
Fixed Income | 27% | 20% | 37% | ||||||||||||||||||||||
Schedule of fair value measurement of pension plan | ' | ||||||||||||||||||||||||
The Company groups assets and liabilities at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. These levels were: | |||||||||||||||||||||||||
31-Dec-13 | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||
(Dollars in thousands) | Quoted Prices in | Significant other | Significant | ||||||||||||||||||||||
Active Markets for | Observable | Unobservable | |||||||||||||||||||||||
Asset Category | Identical Assets | Inputs | Inputs | ||||||||||||||||||||||
(Level 1) | (Level 2) | (Level 3) | |||||||||||||||||||||||
Cash | $ | — | $ | 170 | $ | — | |||||||||||||||||||
Equity Security: | |||||||||||||||||||||||||
Large-Cap | 974 | 396 | — | ||||||||||||||||||||||
Mid-Cap | 1,090 | — | — | ||||||||||||||||||||||
Small-Cap | 53 | 476 | — | ||||||||||||||||||||||
Global and International | 442 | — | — | ||||||||||||||||||||||
Emerging Market | 48 | — | — | ||||||||||||||||||||||
Fixed Income-Bonds | — | 275 | — | ||||||||||||||||||||||
Other | 552 | 757 | — | ||||||||||||||||||||||
Total | $ | 3,159 | $ | 2,074 | $ | — | |||||||||||||||||||
31-Dec-12 | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||
(Dollars in thousands) | Quoted Prices in | Significant other | Significant | ||||||||||||||||||||||
Active Markets for | Observable | Unobservable | |||||||||||||||||||||||
Asset Category | Identical Assets | Inputs | Inputs | ||||||||||||||||||||||
(Level 1) | (Level 2) | (Level 3) | |||||||||||||||||||||||
Cash | $ | — | $ | 124 | $ | — | |||||||||||||||||||
Equity Securities: | |||||||||||||||||||||||||
Large-Cap | 847 | 331 | — | ||||||||||||||||||||||
Mid-Cap | 901 | — | — | ||||||||||||||||||||||
Small-Cap | 78 | 475 | — | ||||||||||||||||||||||
Global and International | 403 | — | — | ||||||||||||||||||||||
Emerging Market | 66 | — | — | ||||||||||||||||||||||
Fixed Income-Bonds | — | 151 | — | ||||||||||||||||||||||
Other | 538 | 762 | — | ||||||||||||||||||||||
Total | $ | 2,833 | $ | 1,843 | $ | — |
RELATED_PARTY_TRANSACTIONS_Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Related Party Transactions Tables | ' | ||||||||
Loans to related parties roll forward | ' | ||||||||
(Dollars in thousands) | 31-Dec-13 | 31-Dec-12 | |||||||
Beginning Balance | $ | 2,236 | $ | 2,322 | |||||
Draws/Advances | 89 | 141 | |||||||
Repayments | (331 | ) | (227 | ) | |||||
Ending Balance | $ | 1,994 | $ | 2,236 |
REGULATORY_MATTERS_AND_RESTRIC1
REGULATORY MATTERS AND RESTRICTIONS (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
Regulatory Matters And Restrictions Tables | ' | ||||||||||||||||||||||||
Regulatory capital requirements | ' | ||||||||||||||||||||||||
To be categorized as well capitalized, the Bank must maintain minimum total risk-based, Tier 1 risk-based and Tier 1 leveraged ratios as set forth in the table below: | |||||||||||||||||||||||||
31-Dec-13 | |||||||||||||||||||||||||
For Capital | |||||||||||||||||||||||||
Adequacy | To Be Well | ||||||||||||||||||||||||
(Dollars in thousands) | Actual | Purposes | Capitalized | ||||||||||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||||||||||
Total capital (to risk weighted assets) | |||||||||||||||||||||||||
Company | $ | 37,006 | 17.42 | % | $ | 16,990 | 8 | % | $ | 21,238 | 10 | % | |||||||||||||
Bank | 35,573 | 16.77 | 16,975 | 8 | 21,219 | 10 | |||||||||||||||||||
Tier 1 (to risk weighted assets) | |||||||||||||||||||||||||
Company | $ | 34,341 | 16.17 | % | $ | 8,495 | 4 | % | $ | 12,743 | 6 | % | |||||||||||||
Bank | 32,910 | 15.51 | 8,487 | 4 | 12,731 | 6 | |||||||||||||||||||
Tier 1 (to average total assets) | |||||||||||||||||||||||||
Company | $ | 34,341 | 11.87 | % | $ | 11,576 | 4 | % | $ | 14,471 | 5 | % | |||||||||||||
Bank | 32,910 | 10.69 | 12,316 | 4 | 15,395 | 5 | |||||||||||||||||||
31-Dec-12 | |||||||||||||||||||||||||
For Capital | |||||||||||||||||||||||||
Adequacy | To Be Well | ||||||||||||||||||||||||
(Dollars in thousands) | Actual | Purposes | Capitalized | ||||||||||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||||||||||
Total capital (to risk weighted assets) | |||||||||||||||||||||||||
Company | $ | 36,646 | 19.15 | % | $ | 15,311 | 8 | % | $ | 19,138 | 10 | % | |||||||||||||
Bank | 34,860 | 18.45 | 15,211 | 8 | 19,014 | 10 | |||||||||||||||||||
Tier 1 (to risk weighted assets) | |||||||||||||||||||||||||
Company | $ | 34,239 | 17.89 | % | $ | 7,655 | 4 | % | $ | 11,483 | 6 | % | |||||||||||||
Bank | 32,483 | 17.19 | 7,606 | 4 | 11,409 | 6 | |||||||||||||||||||
Tier 1 (to average total assets) | |||||||||||||||||||||||||
Company | $ | 34,239 | 11.56 | % | $ | 11,851 | 4 | % | $ | 14,813 | 5 | % | |||||||||||||
Bank | 32,483 | 11.02 | 11,786 | 4 | 14,733 | 5 |
HOLDING_COMPANY_CONDENSED_FINA1
HOLDING COMPANY CONDENSED FINANCIAL INFORMATION (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Holding Company Condensed Financial Information Tables | ' | ||||||||
Schedule of Condensed Balance Sheet | ' | ||||||||
The condensed financial data for the Company (holding company only) was: | |||||||||
Condensed Balance Sheets: | December 31, | ||||||||
(Dollars in thousands) | 2013 | 2012 | |||||||
Assets: | |||||||||
Cash and cash equivelents | $ | 930 | $ | 1,340 | |||||
Investment in subsidiary Bank | 34,806 | 34,523 | |||||||
Other assets | 443 | 448 | |||||||
Total Assets | $ | 36,179 | $ | 36,311 | |||||
Liabilities and Stockholders' Equity: | |||||||||
Total liabilities | $ | 42 | $ | 32 | |||||
Stockholders' equity | 36,137 | 36,279 | |||||||
Total Liabilities and Stockholders' Equity | $ | 36,179 | $ | 36,311 | |||||
Schedule of Condensed Income Statement | ' | ||||||||
For the Years Ended December 31, | |||||||||
Condensed Statements of Operations: | 2013 | 2012 | |||||||
(Dollars in thousands) | |||||||||
Undistributed net earnings of subsidiary bank | $ | 550 | $ | 499 | |||||
Expenses, net | (187 | ) | (158 | ) | |||||
Net Income | $ | 363 | $ | 341 |
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Commitments And Contingencies Tables | ' | ||||||||||||
Schedule of commitments | ' | ||||||||||||
Commitments outstanding at December 31, 2013 are summarized in the following table: | |||||||||||||
(Dollars in thousands) | Commercial | Other loan | Total | ||||||||||
letters of credit | commitments | commitments | |||||||||||
Less than one year | $ | 123 | $ | 4,960 | $ | 5,083 | |||||||
One to three years | 47 | 5,654 | 5,701 | ||||||||||
Three to five years | 250 | 9,674 | 9,924 | ||||||||||
More than five years | 93 | 2,484 | 2,577 | ||||||||||
Total | $ | 513 | $ | 22,772 | $ | 23,285 |
FAIR_VALUE_MEASUREMENT_Tables
FAIR VALUE MEASUREMENT (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Fair Value Measurement Tables | ' | ||||||||||||||||||||
Schedule of assets and liabilities measured at fair value on a recurring basis | ' | ||||||||||||||||||||
Assets measured at fair value on a recurring basis as of December 31, 2013 were as follows: | |||||||||||||||||||||
(Dollars in thousands) | Quoted Prices in | Significant Other | Significant | ||||||||||||||||||
Active Markets for | Observable | Unobservable | |||||||||||||||||||
Identical Assets | Inputs | Inputs | |||||||||||||||||||
Description | 31-Dec-13 | (Level 1) | (Level 2) | (Level 3) | |||||||||||||||||
Recurring: | |||||||||||||||||||||
US government agencies | $ | 6,766 | $ | — | $ | 6,766 | $ | — | |||||||||||||
Government sponsored MBS | |||||||||||||||||||||
Residential | 57,698 | — | 57,698 | — | |||||||||||||||||
Municipal securities | |||||||||||||||||||||
North Carolina | 1,455 | — | 1,455 | — | |||||||||||||||||
Mortgage servicing rights | 25 | — | — | 25 | |||||||||||||||||
Total | $ | 65,944 | $ | — | $ | 65,919 | $ | 25 | |||||||||||||
Assets measured at fair value on a recurring basis as of December 31, 2012 were as follows: | |||||||||||||||||||||
(Dollars in thousands) | Quoted Prices in | Significant Other | Significant | ||||||||||||||||||
Active Markets for | Observable | Unobservable | |||||||||||||||||||
Identical Assets | Inputs | Inputs | |||||||||||||||||||
Description | 31-Dec-12 | (Level 1) | (Level 2) | (Level 3) | |||||||||||||||||
Recurring: | |||||||||||||||||||||
US government agencies | $ | 1,327 | $ | — | $ | 1,327 | $ | — | |||||||||||||
Government sponsored MBS | |||||||||||||||||||||
Residential | 57,931 | — | 57,931 | — | |||||||||||||||||
Municipal securities | |||||||||||||||||||||
North Carolina | 1,553 | — | 1,553 | — | |||||||||||||||||
Mortgage Servicing Rights | $ | 36 | — | — | 36 | ||||||||||||||||
Total | $ | 60,847 | $ | — | $ | 60,811 | $ | 36 | |||||||||||||
Schedule of fair value of Level 3 assets | ' | ||||||||||||||||||||
The table below displays the change in all recurring Level 3 Assets from December 31, 2012 to December 31, 2013. | |||||||||||||||||||||
(Dollars in thousands) | Mortgage | ||||||||||||||||||||
Servicing Rights | |||||||||||||||||||||
Beginning balance (December 31, 2012) | $ | 36 | |||||||||||||||||||
Amortization | 11 | ||||||||||||||||||||
Ending Balance (December 31, 2013) | $ | 25 | |||||||||||||||||||
Schedule of assets and liabilities measured at fair value on a non recurring basis | ' | ||||||||||||||||||||
Assets measured at fair value on a nonrecurring basis as of December 31, 2013 and December 31, 2012 were: | |||||||||||||||||||||
(Dollars in thousands) | Quoted Prices in | Significant Other | Significant | ||||||||||||||||||
Active Markets for | Observable | Unobservable | |||||||||||||||||||
Identical Assets | Inputs | Inputs | |||||||||||||||||||
Description | 31-Dec-13 | (Level 1) | (Level 2) | (Level 3) | |||||||||||||||||
Nonrecurring: | |||||||||||||||||||||
OREO | $ | 3,032 | $ | — | $ | — | $ | 3,032 | |||||||||||||
Repossessed collateral | 590 | — | — | 590 | |||||||||||||||||
Impaired loans: | |||||||||||||||||||||
Commercial real estate | 9,050 | — | — | 9,050 | |||||||||||||||||
Faith-based non-profit | 16,772 | — | — | 16,772 | |||||||||||||||||
Residential real estate | 3,875 | — | — | 3,875 | |||||||||||||||||
Consumer | 11 | — | — | 11 | |||||||||||||||||
Total | $ | 33,330 | $ | — | $ | — | $ | 33,330 | |||||||||||||
(Dollars in thousands) | Quoted Prices in | Significant Other | Significant | ||||||||||||||||||
Active Markets for | Observable | Unobservable | |||||||||||||||||||
Identical Assets | Inputs | Inputs | |||||||||||||||||||
Description | 31-Dec-12 | (Level 1) | (Level 2) | (Level 3) | |||||||||||||||||
Nonrecurring: | |||||||||||||||||||||
OREO | $ | 3,055 | $ | — | $ | — | $ | 3,055 | |||||||||||||
Repossessed collateral | 590 | — | — | 590 | |||||||||||||||||
Impaired loans: | |||||||||||||||||||||
Commercial real estate | 4,749 | — | — | 4,749 | |||||||||||||||||
Faith-based non-profit | 14,863 | — | — | 14,863 | |||||||||||||||||
Residential real estate | 3,916 | — | — | 3,916 | |||||||||||||||||
Consumer | 16 | — | — | 16 | |||||||||||||||||
Total | $ | 27,189 | $ | — | $ | — | $ | 27,189 | |||||||||||||
Schedule of Level 3 fair value measurement methods | ' | ||||||||||||||||||||
Quantitative Information about Level 3 Fair Value Measurements | |||||||||||||||||||||
(Dollars in thousands) | Significant | Significant | |||||||||||||||||||
Valuation | Unobservable | Unobservable | |||||||||||||||||||
Description | 31-Dec-13 | Technique | Inputs | Input Value | |||||||||||||||||
Nonrecurring: | |||||||||||||||||||||
OREO | $ | 3,032 | discounted appraisals | collateral discounts | 6-20% | ||||||||||||||||
Repossessed collateral | 590 | discounted appraisals | collateral discounts | 20-50% | |||||||||||||||||
Impaired loans | 29,708 | discounted appraisals | collateral discounts | 6-20% | |||||||||||||||||
Total | $ | 33,330 | |||||||||||||||||||
(Dollars in thousands) | Significant | Significant | |||||||||||||||||||
Valuation | Unobservable | Unobservable | |||||||||||||||||||
Description | 31-Dec-12 | Technique | Inputs | Input Value | |||||||||||||||||
Nonrecurring: | |||||||||||||||||||||
OREO | $ | 3,055 | discounted appraisals | collateral discounts | 6-20% | ||||||||||||||||
Repossessed collateral | 590 | discounted appraisals | collateral discounts | 20-50% | |||||||||||||||||
Impaired loans | 23,544 | discounted appraisals | collateral discounts | 6-20% | |||||||||||||||||
Total | $ | 27,189 | |||||||||||||||||||
Schedule of carrying amount and fair value of financial instruments | ' | ||||||||||||||||||||
As of December 31, 2013 and December 31, 2012, the carrying amounts and associated estimated fair value of financial assets and liabilities of the company are as follows: | |||||||||||||||||||||
31-Dec-13 | |||||||||||||||||||||
(Dollars in thousands) | Carrying | Estimated | |||||||||||||||||||
Amount | Fair Value | Level 1 | Level 2 | Level 3 | |||||||||||||||||
Assets: | |||||||||||||||||||||
Cash and cash equivalents | $ | 28,583 | $ | 28,583 | $ | 28,583 | $ | — | $ | — | |||||||||||
Investment securities available for sale | 65,919 | 65,919 | — | 65,919 | — | ||||||||||||||||
Loans, net of allowances for loan losses | 185,982 | 189,387 | 189,387 | ||||||||||||||||||
Accrued interest receivable | 912 | 912 | 912 | — | |||||||||||||||||
Liabilities: | |||||||||||||||||||||
Non-maturity deposits | $ | 116,115 | $ | 116,115 | 116,115 | — | — | ||||||||||||||
Maturity deposits | 143,812 | 143,314 | — | 143,314 | — | ||||||||||||||||
Other borrowings | 847 | 791 | — | — | 791 | ||||||||||||||||
Accrued interest payable | 75 | 75 | 75 | — | — | ||||||||||||||||
31-Dec-12 | |||||||||||||||||||||
(Dollars in thousands) | Carrying | Estimated | |||||||||||||||||||
Amount | Value | Level 1 | Level 2 | Level 3 | |||||||||||||||||
Assets: | |||||||||||||||||||||
Cash and cash equivalents | $ | 42,586 | $ | 42,586 | $ | 42,586 | $ | — | $ | — | |||||||||||
Marketable securities | 60,811 | 60,811 | — | 60,811 | — | ||||||||||||||||
Loans, net of allowances for loan losses | 171,723 | 175,041 | — | — | 175,041 | ||||||||||||||||
Accrued interest receivable | 858 | 858 | 858 | — | — | ||||||||||||||||
Liabilities: | |||||||||||||||||||||
Non-maturity deposits | $ | 116,276 | $ | 116,276 | 116,276 | — | — | ||||||||||||||
Maturity deposits | 134,603 | 134,322 | — | 134,322 | — | ||||||||||||||||
Other borrowings | 2,937 | 2,871 | — | — | 2,871 | ||||||||||||||||
Accrued interest payable | 119 | 119 | 119 | — | — | ||||||||||||||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | |||
Summary Of Significant Accounting Policies Details | ' | ' | ' |
Federal Reserve required Average | $1,520 | $1,982 | ' |
20164 | ' | 36,122 | ' |
Federal Funds Sold | 3,000 | ' | ' |
Core Deposits | 3,899 | 4,482 | ' |
Cash and cash equivalents | $28,583 | $42,586 | $61,296 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | Premises | Premises | Furniture and equipment | Furniture and equipment | Technology Equipment and Software | Technology Equipment and Software | ||
Lower Range | Upper Range | Lower Range | Upper Range | Lower Range | Upper Range | |||
Deposits held at other financial institutions | $400 | $1,300 | ' | ' | ' | ' | ' | ' |
Investments in FHLB stock | 400 | 500 | ' | ' | ' | ' | ' | ' |
Unfunded commitments reserve | 13 | 55 | ' | ' | ' | ' | ' | ' |
Useful life of premises and equipment | ' | ' | '30 years | '50 years | '6 years | '10 years | '3 years | '5 years |
Cash surrender value of bank-owned life insurance | 6,191 | 5,978 | ' | ' | ' | ' | ' | ' |
Other real estate owned | $3,032 | $3,055 | ' | ' | ' | ' | ' | ' |
INVESTMENT_SECURITIES_Details
INVESTMENT SECURITIES (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Pledged to Federal Reserve Bank | ' | ' |
Funds pledged for public deposits | $1,018 | $1,095 |
Pledged to Public Housing | ' | ' |
Funds pledged for public deposits | 3,452 | 4,856 |
Pledged to NC State Treasurer | ' | ' |
Funds pledged for public deposits | 15,353 | 2,579 |
Letter of Credit Pledged to the FHLB | ' | ' |
Funds pledged for public deposits | ' | $2,000 |
INVESTMENT_SECURITIES_Details_
INVESTMENT SECURITIES (Details 1) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Available-for-sale Securities, Amortized Cost Basis | $66,571 | $60,152 |
Available-for-sale Securities, Gross Unrealized Gains | 139 | 688 |
Available-for-sale Securities, Gross Unrealized Losses | -791 | -29 |
Available-for-sale Securities, Debt Securities | 65,919 | 60,811 |
US government agencies | ' | ' |
Available-for-sale Securities, Amortized Cost Basis | 7,000 | 1,322 |
Available-for-sale Securities, Gross Unrealized Gains | ' | 5 |
Available-for-sale Securities, Gross Unrealized Losses | -234 | ' |
Available-for-sale Securities, Debt Securities | 6,766 | 1,327 |
Government sponsored MBS - Residential | ' | ' |
Available-for-sale Securities, Amortized Cost Basis | 58,086 | 57,333 |
Available-for-sale Securities, Gross Unrealized Gains | 118 | 627 |
Available-for-sale Securities, Gross Unrealized Losses | -506 | -29 |
Available-for-sale Securities, Debt Securities | 57,698 | 57,931 |
Municipal securities - North Carolina | ' | ' |
Available-for-sale Securities, Amortized Cost Basis | 1,485 | 1,497 |
Available-for-sale Securities, Gross Unrealized Gains | 21 | 56 |
Available-for-sale Securities, Gross Unrealized Losses | -51 | ' |
Available-for-sale Securities, Debt Securities | $1,455 | $1,553 |
INVESTMENT_SECURITIES_Details_1
INVESTMENT SECURITIES (Details 2) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Fair Value | ' | ' |
Total debt securities | $65,919 | $60,811 |
US government agencies | ' | ' |
Fair Value | ' | ' |
Due within one year | ' | 1,005 |
Due after one year through five years | 4,934 | 322 |
Due after five years through ten years | 1,832 | ' |
Total debt securities | 6,766 | 1,327 |
Amortized Cost | ' | ' |
Due within one year | ' | 1,000 |
Due after one year through five years | 5,000 | 322 |
Due after five years through ten years | 2,000 | ' |
Total debt securities | 7,000 | 1,322 |
Government sponsored MBS - Residential | ' | ' |
Fair Value | ' | ' |
Due within one year | 12,090 | ' |
Due after one year through five years | 25,152 | 135 |
Due after five years through ten years | 12,450 | 171 |
Due after ten years | 8,006 | 57,625 |
Total debt securities | 57,698 | 57,931 |
Amortized Cost | ' | ' |
Due within one year | 12,156 | ' |
Due after one year through five years | 25,314 | 126 |
Due after five years through ten years | 12,560 | 161 |
Due after ten years | 8,056 | 57,046 |
Total debt securities | 58,086 | 57,333 |
Municipal securities - North Carolina | ' | ' |
Fair Value | ' | ' |
Due within one year | 472 | 488 |
Due after one year through five years | 437 | 458 |
Due after five years through ten years | 546 | 607 |
Total debt securities | 1,455 | 1,553 |
Amortized Cost | ' | ' |
Due within one year | 465 | 466 |
Due after one year through five years | 423 | 425 |
Due after five years through ten years | 597 | 606 |
Total debt securities | $1,485 | $1,497 |
INVESTMENT_SECURITIES_Details_2
INVESTMENT SECURITIES (Details 3) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Securities in an Unrealized Loss Position for Less than 12 Months | ' | ' |
Fair Value | $53,685 | $8,027 |
Unrealized Losses | -791 | -29 |
Securities in an Unrealized Loss Position for More than 12 Months | ' | ' |
Fair Value | 20 | 21 |
Securities Total | ' | ' |
Total Fair Value | 53,705 | 8,048 |
Total Unrealized Losses | -791 | -29 |
US government agencies | ' | ' |
Securities in an Unrealized Loss Position for Less than 12 Months | ' | ' |
Fair Value | 6,766 | ' |
Unrealized Losses | -234 | ' |
Securities Total | ' | ' |
Total Fair Value | 6,766 | ' |
Total Unrealized Losses | -234 | ' |
Government sponsored MBS - Residential | ' | ' |
Securities in an Unrealized Loss Position for Less than 12 Months | ' | ' |
Fair Value | 46,373 | 8,027 |
Unrealized Losses | -506 | -29 |
Securities in an Unrealized Loss Position for More than 12 Months | ' | ' |
Fair Value | 20 | 21 |
Securities Total | ' | ' |
Total Fair Value | 46,393 | 8,048 |
Total Unrealized Losses | -506 | -29 |
Municipal securities - North Carolina | ' | ' |
Securities in an Unrealized Loss Position for Less than 12 Months | ' | ' |
Fair Value | 546 | ' |
Unrealized Losses | -51 | ' |
Securities Total | ' | ' |
Total Fair Value | 546 | ' |
Total Unrealized Losses | ($51) | ' |
INVESTMENT_SECURITIES_Details_3
INVESTMENT SECURITIES (Details Narrative) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
N | N | |
Investment Securities Details Narrative | ' | ' |
Investment securities available for sale, at fair value | $65,919 | $60,811 |
Gross realized gains | $445 | $445 |
Number of investment positions | 68 | 11 |
FHLB_STOCK_Details_Narrative
FHLB STOCK (Details Narrative) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Fhlb Stock Details Narrative | ' | ' |
Required investment in FHLB stock as a percent of total assets | 0.12% | ' |
Base amount, as a component of the maximum amount of FHLB stock that may be purchased | $20,000 | ' |
Percent of outstanding FHLB advances, as a component of the maximum amount of FHLB stock that may be purchased | 4.50% | ' |
Carrying value of FHLB stock | $400 | $500 |
ACCUMULATED_OTHER_COMPREHENSIV2
ACCUMULATED OTHER COMPREHENSIVE INCOME (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Unrealized Gains and Losses on Available-for-Sale Securities | ' | ' |
Balance, beginning | $427 | $481 |
Other comprehensive loss before reclassifications | -831 | 313 |
Amounts reclassified from accumulated other comprehensive income | ' | -367 |
Net current-period other comprehensive loss | -831 | -54 |
Balance, ending | -404 | 427 |
Defined Benefit Pension Items | ' | ' |
Balance, beginning | -1,835 | -1,920 |
Other comprehensive loss before reclassifications | 813 | 84 |
Amounts reclassified from accumulated other comprehensive loss | 1 | 1 |
Net current period other comprehensive loss | 814 | 85 |
Balance, ending | -1,834 | -1,835 |
Total | ' | ' |
Accumulated other comprehensive loss | -1,408 | -1,439 |
Other comprehensive loss before reclassifications | -18 | 397 |
Amounts reclassified from accumulated other comprehensive loss | 1 | -366 |
Net current period other comprehensive loss | -17 | 31 |
Accumulated other comprehensive loss | ($1,425) | ($1,408) |
LOANS_AND_ALLOWANCE_FOR_LOAN_L2
LOANS AND ALLOWANCE FOR LOAN LOSSES (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | |||
Loans, net of unearned income and deferred fees | $189,475 | $175,222 | $188,084 |
Allowances for loan losses | -3,493 | -3,499 | -3,850 |
Loans, net | 185,982 | 171,723 | ' |
Commercial | ' | ' | ' |
Loans, net of unearned income and deferred fees | 12,344 | 3,282 | 7,688 |
Allowances for loan losses | -184 | -90 | -348 |
Commercial Real Estate Construction | ' | ' | ' |
Loans, net of unearned income and deferred fees | 4,758 | 3,621 | ' |
Commercial Real Estate Owner Occupied | ' | ' | ' |
Loans, net of unearned income and deferred fees | 22,186 | 18,377 | ' |
Commercial Real Estate Other | ' | ' | ' |
Loans, net of unearned income and deferred fees | 32,145 | 26,171 | ' |
Faith Based Non-Profit Construction | ' | ' | ' |
Loans, net of unearned income and deferred fees | ' | 2,344 | ' |
Faith Based Non-Profit Owner Occupied | ' | ' | ' |
Loans, net of unearned income and deferred fees | 78,761 | 76,418 | ' |
Faith Based Non-Profit Other | ' | ' | ' |
Loans, net of unearned income and deferred fees | 6,702 | 7,135 | ' |
Residential Real Estate First Mortgage | ' | ' | ' |
Loans, net of unearned income and deferred fees | 22,350 | 24,702 | ' |
Residential Real Estate Multifamily | ' | ' | ' |
Loans, net of unearned income and deferred fees | 3,271 | 5,828 | ' |
Residential Real Estate Home Equity | ' | ' | ' |
Loans, net of unearned income and deferred fees | 3,051 | 3,161 | ' |
Residential Real Estate Construction | ' | ' | ' |
Loans, net of unearned income and deferred fees | 241 | 83 | ' |
Consumer | ' | ' | ' |
Loans, net of unearned income and deferred fees | 1,340 | 1,346 | 1,667 |
Allowances for loan losses | -19 | -30 | -62 |
Other | ' | ' | ' |
Loans, net of unearned income and deferred fees | 2,326 | 2,754 | 2,964 |
Allowances for loan losses | ($106) | ($54) | ($42) |
LOANS_AND_ALLOWANCE_FOR_LOAN_L3
LOANS AND ALLOWANCE FOR LOAN LOSSES (Details 1) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Beginning balance | $3,499 | $3,850 |
Charge-offs | -406 | -629 |
Recoveries | 71 | 112 |
Provision (decrease) increase | 329 | 166 |
Ending balance | 3,493 | 3,499 |
Commercial | ' | ' |
Beginning balance | 90 | 348 |
Charge-offs | -7 | ' |
Provision (decrease) increase | 101 | -258 |
Ending balance | 184 | 90 |
Commercial Real Estate | ' | ' |
Beginning balance | 881 | 971 |
Charge-offs | -237 | -98 |
Recoveries | 27 | 75 |
Provision (decrease) increase | 137 | -67 |
Ending balance | 808 | 881 |
Faith Based Non-Profit | ' | ' |
Beginning balance | 1,246 | 1,128 |
Provision (decrease) increase | 637 | 118 |
Ending balance | 1,883 | 1,246 |
Residential Real Estate | ' | ' |
Beginning balance | 937 | 1,299 |
Charge-offs | -138 | -362 |
Recoveries | 26 | 17 |
Provision (decrease) increase | -332 | -17 |
Ending balance | 493 | 937 |
Consumer | ' | ' |
Beginning balance | 30 | 62 |
Charge-offs | -4 | -169 |
Recoveries | 8 | 20 |
Provision (decrease) increase | -15 | 117 |
Ending balance | 19 | 30 |
Other | ' | ' |
Beginning balance | 54 | 42 |
Charge-offs | -20 | ' |
Recoveries | 10 | ' |
Provision (decrease) increase | 62 | 12 |
Ending balance | 106 | 54 |
Unallocated | ' | ' |
Beginning balance | 261 | ' |
Provision (decrease) increase | -261 | 261 |
Ending balance | ' | $261 |
LOANS_AND_ALLOWANCE_FOR_LOAN_L4
LOANS AND ALLOWANCE FOR LOAN LOSSES (Details 2) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | |||
Ending balances: Allowance for loan losses | ' | ' | ' |
Individually evaluated for impairment | $1,066 | ' | $720 |
Collectively evaluated for impairment | 2,487 | 3,000 | 3,130 |
Allowances for loan losses | 3,493 | 3,499 | 3,850 |
Ending balances: Loans | ' | ' | ' |
Individually evaluated for impairment | 30,648 | ' | 23,416 |
Collectively evaluated for impairment | 158,827 | 153,000 | 164,668 |
Loans, net of unearned income and deferred fees | 189,475 | 175,222 | 188,084 |
Commercial | ' | ' | ' |
Ending balances: Allowance for loan losses | ' | ' | ' |
Collectively evaluated for impairment | 184 | ' | 348 |
Allowances for loan losses | 184 | 90 | 348 |
Ending balances: Loans | ' | ' | ' |
Individually evaluated for impairment | ' | ' | 590 |
Collectively evaluated for impairment | 12,344 | ' | 7,098 |
Loans, net of unearned income and deferred fees | 12,344 | 3,282 | 7,688 |
Commercial Real Estate | ' | ' | ' |
Ending balances: Allowance for loan losses | ' | ' | ' |
Individually evaluated for impairment | ' | ' | 119 |
Collectively evaluated for impairment | 808 | ' | 852 |
Allowances for loan losses | 808 | 881 | 971 |
Ending balances: Loans | ' | ' | ' |
Individually evaluated for impairment | 9,029 | ' | 6,828 |
Collectively evaluated for impairment | 50,060 | ' | 40,226 |
Loans, net of unearned income and deferred fees | 59,089 | ' | 47,054 |
Faith Based Non-Profit | ' | ' | ' |
Ending balances: Allowance for loan losses | ' | ' | ' |
Individually evaluated for impairment | 931 | ' | 56 |
Collectively evaluated for impairment | 952 | ' | 1,072 |
Allowances for loan losses | 1,883 | 1,246 | 1,128 |
Ending balances: Loans | ' | ' | ' |
Individually evaluated for impairment | 17,661 | ' | 13,816 |
Collectively evaluated for impairment | 67,802 | ' | 75,335 |
Loans, net of unearned income and deferred fees | 85,463 | ' | 89,151 |
Residential Real Estate | ' | ' | ' |
Ending balances: Allowance for loan losses | ' | ' | ' |
Individually evaluated for impairment | 75 | ' | 543 |
Collectively evaluated for impairment | 418 | ' | 756 |
Allowances for loan losses | 493 | 937 | 1,299 |
Ending balances: Loans | ' | ' | ' |
Individually evaluated for impairment | 3,947 | ' | 2,180 |
Collectively evaluated for impairment | 24,966 | ' | 37,380 |
Loans, net of unearned income and deferred fees | 28,913 | ' | 39,560 |
Consumer | ' | ' | ' |
Ending balances: Allowance for loan losses | ' | ' | ' |
Individually evaluated for impairment | ' | ' | 2 |
Collectively evaluated for impairment | 19 | ' | 60 |
Allowances for loan losses | 19 | 30 | 62 |
Ending balances: Loans | ' | ' | ' |
Individually evaluated for impairment | 11 | ' | 2 |
Collectively evaluated for impairment | 1,329 | ' | 1,665 |
Loans, net of unearned income and deferred fees | 1,340 | 1,346 | 1,667 |
Other | ' | ' | ' |
Ending balances: Allowance for loan losses | ' | ' | ' |
Collectively evaluated for impairment | 106 | ' | 42 |
Allowances for loan losses | 106 | 54 | 42 |
Ending balances: Loans | ' | ' | ' |
Collectively evaluated for impairment | 2,326 | ' | 2,964 |
Loans, net of unearned income and deferred fees | 2,326 | 2,754 | 2,964 |
Unallocated | ' | ' | ' |
Ending balances: Allowance for loan losses | ' | ' | ' |
Allowances for loan losses | ' | $261 | ' |
LOANS_AND_ALLOWANCE_FOR_LOAN_L5
LOANS AND ALLOWANCE FOR LOAN LOSSES (Details 3) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Loans with no related allowance recorded: | ' | ' |
Impaired loans with no related allowance - Unpaid Principal Balance | $26,385 | $20,608 |
Impaired loans with no related allowance - Recorded Investment | 26,460 | 19,994 |
Imapired loans with no related allowance - Interest earned | 1,323 | 787 |
Impaired loans with related allowance - Average Recorded Investment | 21,529 | 22,361 |
Loans with an allowance recorded: | ' | ' |
Impaired loans with allowance - Unpaid Principal Balance | 4,262 | 2,209 |
Impaired loans with allowance - Recorded Investment | 4,254 | 2,209 |
Impaired loans with related allowance - Related Allowance | 1,006 | 480 |
Impaired loans with related allowance - Interest earned | 277 | 90 |
Impaired loans with related allowance - Average Recorded Investment | 2,000 | 1,531 |
Total impaired loans | ' | ' |
Impaired loans with allowance - Unpaid Principal Balance | 30,647 | 22,817 |
Impaired loans with allowance - Recorded Investment | 30,714 | 22,203 |
Impaired loans with related allowance - Interest earned | 1,600 | 877 |
Impaired loans with related allowance - Average Recorded Investment | 23,529 | 23,892 |
Commercial | ' | ' |
Loans with no related allowance recorded: | ' | ' |
Impaired loans with related allowance - Average Recorded Investment | 74 | 295 |
Commercial Real Estate Construction | ' | ' |
Loans with no related allowance recorded: | ' | ' |
Impaired loans with no related allowance - Unpaid Principal Balance | 363 | 371 |
Impaired loans with no related allowance - Recorded Investment | 364 | 371 |
Imapired loans with no related allowance - Interest earned | 28 | 31 |
Impaired loans with related allowance - Average Recorded Investment | 321 | 300 |
Commercial Real Estate Owner Occupied | ' | ' |
Loans with no related allowance recorded: | ' | ' |
Impaired loans with no related allowance - Unpaid Principal Balance | 3,181 | 530 |
Impaired loans with no related allowance - Recorded Investment | 3,183 | 530 |
Imapired loans with no related allowance - Interest earned | 142 | 38 |
Impaired loans with related allowance - Average Recorded Investment | 1,194 | 635 |
Loans with an allowance recorded: | ' | ' |
Impaired loans with allowance - Unpaid Principal Balance | ' | 238 |
Impaired loans with allowance - Recorded Investment | ' | 238 |
Impaired loans with related allowance - Related Allowance | ' | 87 |
Impaired loans with related allowance - Interest earned | ' | 15 |
Impaired loans with related allowance - Average Recorded Investment | 59 | 60 |
Commercial Real Estate Other | ' | ' |
Loans with no related allowance recorded: | ' | ' |
Impaired loans with no related allowance - Unpaid Principal Balance | 5,486 | 4,312 |
Impaired loans with no related allowance - Recorded Investment | 5,503 | 3,698 |
Imapired loans with no related allowance - Interest earned | 256 | 129 |
Impaired loans with related allowance - Average Recorded Investment | 4,858 | 4,473 |
Loans with an allowance recorded: | ' | ' |
Impaired loans with related allowance - Average Recorded Investment | 251 | 500 |
Faith Based Non-Profit Construction | ' | ' |
Loans with an allowance recorded: | ' | ' |
Impaired loans with related allowance - Average Recorded Investment | ' | 214 |
Faith Based Non-Profit Owner Occupied | ' | ' |
Loans with no related allowance recorded: | ' | ' |
Impaired loans with no related allowance - Unpaid Principal Balance | 14,151 | 14,479 |
Impaired loans with no related allowance - Recorded Investment | 14,203 | 14,479 |
Imapired loans with no related allowance - Interest earned | 681 | 567 |
Impaired loans with related allowance - Average Recorded Investment | 12,880 | 12,261 |
Loans with an allowance recorded: | ' | ' |
Impaired loans with allowance - Unpaid Principal Balance | 3,510 | 428 |
Impaired loans with allowance - Recorded Investment | 3,500 | 428 |
Impaired loans with related allowance - Related Allowance | 931 | 44 |
Impaired loans with related allowance - Interest earned | 242 | 30 |
Impaired loans with related allowance - Average Recorded Investment | 631 | ' |
Faith Based Non-Profit Other | ' | ' |
Loans with no related allowance recorded: | ' | ' |
Impaired loans with related allowance - Average Recorded Investment | ' | 1,611 |
Residential Real Estate First Mortgage | ' | ' |
Loans with no related allowance recorded: | ' | ' |
Impaired loans with no related allowance - Unpaid Principal Balance | 3,116 | 814 |
Impaired loans with no related allowance - Recorded Investment | 3,119 | 814 |
Imapired loans with no related allowance - Interest earned | 213 | 19 |
Impaired loans with related allowance - Average Recorded Investment | 2,143 | 2,671 |
Loans with an allowance recorded: | ' | ' |
Impaired loans with allowance - Unpaid Principal Balance | 621 | 1,543 |
Impaired loans with allowance - Recorded Investment | 623 | 1,543 |
Impaired loans with related allowance - Related Allowance | 38 | 349 |
Impaired loans with related allowance - Interest earned | 29 | 45 |
Impaired loans with related allowance - Average Recorded Investment | 1,017 | 757 |
Residential Real Estate Home Equity | ' | ' |
Loans with no related allowance recorded: | ' | ' |
Impaired loans with no related allowance - Unpaid Principal Balance | 77 | 86 |
Impaired loans with no related allowance - Recorded Investment | 77 | 86 |
Imapired loans with no related allowance - Interest earned | 3 | 3 |
Impaired loans with related allowance - Average Recorded Investment | 50 | 111 |
Loans with an allowance recorded: | ' | ' |
Impaired loans with allowance - Unpaid Principal Balance | 131 | ' |
Impaired loans with allowance - Recorded Investment | 131 | ' |
Impaired loans with related allowance - Related Allowance | 37 | ' |
Impaired loans with related allowance - Interest earned | 6 | ' |
Impaired loans with related allowance - Average Recorded Investment | 42 | ' |
Consumer | ' | ' |
Loans with no related allowance recorded: | ' | ' |
Impaired loans with no related allowance - Unpaid Principal Balance | 11 | 16 |
Impaired loans with no related allowance - Recorded Investment | 11 | 16 |
Impaired loans with related allowance - Average Recorded Investment | $9 | $4 |
LOANS_AND_ALLOWANCE_FOR_LOAN_L6
LOANS AND ALLOWANCE FOR LOAN LOSSES (Details 4) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
N | N | |
Total | ' | ' |
Number of loans, TDRs | 4 | 8 |
Pre-modification Outstanding Recorded Investment | $5,809 | $4,629 |
Post-modification Outstanding Recorded Investment | 5,732 | 4,564 |
Subsequently defaulted | ' | ' |
Number of TDRs subsequently defaulted - Below Market INterest Rate and Extended Payment Terms | 1 | ' |
Subsequently defaulted Recorded Investment - Below Market Interest Rate and Extended Payment Terms | 2,598 | ' |
Commercial Real Estate Owner Occupied | ' | ' |
Below Market Interest Rate and Extended Payment Terms | ' | ' |
Number of loans, TDRs | 1 | ' |
Pre-modification Outstanding Recorded Investment | 2,645 | ' |
Post-modification Outstanding Recorded Investment | 2,598 | ' |
Below Market Interest Rate | ' | ' |
Number of loans, TDRs | 1 | ' |
Pre-modification Outstanding Recorded Investment | 1,840 | ' |
Post-modification Outstanding Recorded Investment | 1,840 | ' |
Extended Payment Terms | ' | ' |
Number of loans, TDRs | 1 | 1 |
Pre-modification Outstanding Recorded Investment | 40 | 82 |
Post-modification Outstanding Recorded Investment | 21 | 80 |
Faith Based Non-Profit Owner Occupied | ' | ' |
Below Market Interest Rate and Extended Payment Terms | ' | ' |
Number of loans, TDRs | 1 | ' |
Pre-modification Outstanding Recorded Investment | 1,284 | ' |
Post-modification Outstanding Recorded Investment | 1,273 | ' |
Below Market Interest Rate | ' | ' |
Number of loans, TDRs | ' | 1 |
Pre-modification Outstanding Recorded Investment | ' | 2,522 |
Post-modification Outstanding Recorded Investment | ' | 2,484 |
Extended Payment Terms | ' | ' |
Number of loans, TDRs | ' | 4 |
Pre-modification Outstanding Recorded Investment | ' | 1,635 |
Post-modification Outstanding Recorded Investment | ' | 1,615 |
Commercial Real Estate Other | ' | ' |
Extended Payment Terms | ' | ' |
Number of loans, TDRs | ' | 1 |
Pre-modification Outstanding Recorded Investment | ' | 353 |
Post-modification Outstanding Recorded Investment | ' | 351 |
Residential Real Estate First Mortgage | ' | ' |
Extended Payment Terms | ' | ' |
Number of loans, TDRs | ' | 1 |
Pre-modification Outstanding Recorded Investment | ' | 37 |
Post-modification Outstanding Recorded Investment | ' | $34 |
LOANS_AND_ALLOWANCE_FOR_LOAN_L7
LOANS AND ALLOWANCE FOR LOAN LOSSES (Details 5) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | N | N |
Non-accrual Loans | $6,720 | $8,732 |
Number of non-accrual loans | 59 | 53 |
Loans past due over 90 days still accruing | 695 | 1,694 |
Number of loans past due over 90 days still accruing | 7 | 15 |
Commercial Real Estate Owner Occupied | ' | ' |
Non-accrual Loans | 2,676 | 39 |
Number of non-accrual loans | 3 | 1 |
Loans past due over 90 days still accruing | ' | 224 |
Number of loans past due over 90 days still accruing | ' | 4 |
Commercial Real Estate Other | ' | ' |
Non-accrual Loans | 532 | 49 |
Number of non-accrual loans | 3 | 1 |
Loans past due over 90 days still accruing | 110 | 351 |
Number of loans past due over 90 days still accruing | 1 | 1 |
Faith Based Non-Profit Owner Occupied | ' | ' |
Non-accrual Loans | 29 | 5,241 |
Number of non-accrual loans | 1 | 4 |
Loans past due over 90 days still accruing | 332 | 661 |
Number of loans past due over 90 days still accruing | 1 | 3 |
Residential Real Estate First Mortgage | ' | ' |
Non-accrual Loans | 3,348 | 3,384 |
Number of non-accrual loans | 43 | 44 |
Loans past due over 90 days still accruing | 253 | 357 |
Number of loans past due over 90 days still accruing | 5 | 6 |
Residential Real Estate Home Equity | ' | ' |
Non-accrual Loans | 124 | 3 |
Number of non-accrual loans | 7 | 1 |
Loans past due over 90 days still accruing | ' | 101 |
Number of loans past due over 90 days still accruing | ' | 1 |
Consumer | ' | ' |
Non-accrual Loans | $11 | $16 |
Number of non-accrual loans | 2 | 2 |
LOANS_AND_ALLOWANCE_FOR_LOAN_L8
LOANS AND ALLOWANCE FOR LOAN LOSSES (Details 6) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | |||
Aging Schedule of Loans Receivable | ' | ' | ' |
30-59 Days Past Due | $3,931 | $4,332 | ' |
60-89 Days Past Due | 311 | 1,886 | ' |
90 Days or More Past Due | 6,379 | 4,244 | ' |
Total past due | 10,621 | 10,462 | ' |
Current | 178,854 | 164,760 | ' |
Loans, net of unearned income and deferred fees | 189,475 | 175,222 | 188,084 |
Commercial | ' | ' | ' |
Aging Schedule of Loans Receivable | ' | ' | ' |
60-89 Days Past Due | 4 | 353 | ' |
Total past due | 4 | 353 | ' |
Current | 12,340 | 2,929 | ' |
Loans, net of unearned income and deferred fees | 12,344 | 3,282 | 7,688 |
Commercial Real Estate Construction | ' | ' | ' |
Aging Schedule of Loans Receivable | ' | ' | ' |
Current | 4,758 | 3,621 | ' |
Loans, net of unearned income and deferred fees | 4,758 | 3,621 | ' |
Commercial Real Estate Owner Occupied | ' | ' | ' |
Aging Schedule of Loans Receivable | ' | ' | ' |
30-59 Days Past Due | 77 | ' | ' |
90 Days or More Past Due | 2,675 | 263 | ' |
Total past due | 2,752 | 263 | ' |
Current | 19,434 | 18,114 | ' |
Loans, net of unearned income and deferred fees | 22,186 | 18,377 | ' |
Commercial Real Estate Other | ' | ' | ' |
Aging Schedule of Loans Receivable | ' | ' | ' |
30-59 Days Past Due | ' | 1,570 | ' |
60-89 Days Past Due | ' | 856 | ' |
90 Days or More Past Due | 642 | 400 | ' |
Total past due | 642 | 2,826 | ' |
Current | 31,503 | 23,345 | ' |
Loans, net of unearned income and deferred fees | 32,145 | 26,171 | ' |
Faith Based Non-Profit Construction | ' | ' | ' |
Aging Schedule of Loans Receivable | ' | ' | ' |
Current | ' | 2,344 | ' |
Loans, net of unearned income and deferred fees | ' | 2,344 | ' |
Faith Based Non-Profit Owner Occupied | ' | ' | ' |
Aging Schedule of Loans Receivable | ' | ' | ' |
30-59 Days Past Due | 2,859 | 1,845 | ' |
60-89 Days Past Due | 29 | ' | ' |
90 Days or More Past Due | 333 | 661 | ' |
Total past due | 3,221 | 2,506 | ' |
Current | 75,540 | 73,912 | ' |
Loans, net of unearned income and deferred fees | 78,761 | 76,418 | ' |
Faith Based Non-Profit Other | ' | ' | ' |
Aging Schedule of Loans Receivable | ' | ' | ' |
30-59 Days Past Due | 1 | ' | ' |
Total past due | 1 | ' | ' |
Current | 6,701 | 7,135 | ' |
Loans, net of unearned income and deferred fees | 6,702 | 7,135 | ' |
Residential Real Estate First Mortgage | ' | ' | ' |
Aging Schedule of Loans Receivable | ' | ' | ' |
30-59 Days Past Due | 747 | 787 | ' |
60-89 Days Past Due | 275 | 548 | ' |
90 Days or More Past Due | 2,602 | 2,812 | ' |
Total past due | 3,624 | 4,147 | ' |
Current | 18,726 | 20,555 | ' |
Loans, net of unearned income and deferred fees | 22,350 | 24,702 | ' |
Residential Real Estate Multifamily | ' | ' | ' |
Aging Schedule of Loans Receivable | ' | ' | ' |
Current | 3,271 | 5,828 | ' |
Loans, net of unearned income and deferred fees | 3,271 | 5,828 | ' |
Residential Real Estate Home Equity | ' | ' | ' |
Aging Schedule of Loans Receivable | ' | ' | ' |
30-59 Days Past Due | 241 | 122 | ' |
60-89 Days Past Due | ' | 120 | ' |
90 Days or More Past Due | 118 | 108 | ' |
Total past due | 359 | 350 | ' |
Current | 2,692 | 2,811 | ' |
Loans, net of unearned income and deferred fees | 3,051 | 3,161 | ' |
Residential Real Estate Construction | ' | ' | ' |
Aging Schedule of Loans Receivable | ' | ' | ' |
Current | 241 | 83 | ' |
Loans, net of unearned income and deferred fees | 241 | 83 | ' |
Consumer | ' | ' | ' |
Aging Schedule of Loans Receivable | ' | ' | ' |
30-59 Days Past Due | 6 | 8 | ' |
60-89 Days Past Due | 3 | 9 | ' |
90 Days or More Past Due | 9 | ' | ' |
Total past due | 18 | 17 | ' |
Current | 1,322 | 1,329 | ' |
Loans, net of unearned income and deferred fees | 1,340 | 1,346 | 1,667 |
Other | ' | ' | ' |
Aging Schedule of Loans Receivable | ' | ' | ' |
Current | 2,326 | 2,754 | ' |
Loans, net of unearned income and deferred fees | $2,326 | $2,754 | $2,964 |
LOANS_AND_ALLOWANCE_FOR_LOAN_L9
LOANS AND ALLOWANCE FOR LOAN LOSSES (Details 7) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | N | N |
Loans And Allowance For Loan Losses Details 7 | ' | ' |
Loans past due over 90 days still accruing | $695 | $1,694 |
Number of loans past due over 90 days still accruing | 7 | 15 |
Non-accrual loans less than 30 days | 2,062 | 5,615 |
Number of non-accrual loans less than 30 days | 32 | 9 |
Non-accrual loans 30-59 days | 495 | 300 |
Number of non-accrual loans 30-59 days | 3 | 6 |
Non-accrual loans 60-89 days | 98 | 268 |
Number of non-accrual loans 60-89 days | 3 | 1 |
Non-accrual loans 90+ days | 4,065 | 2,549 |
Number of non-accrual loans 90+ days | 21 | 37 |
Non-accrual Loans | $6,720 | $8,732 |
Number of non-accrual loans | 59 | 53 |
Recovered_Sheet1
LOANS AND ALLOWANCE FOR LOAN LOSSES (Details 8) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | |||
Loans, net of unearned income and deferred fees | $189,475 | $175,222 | $188,084 |
Pass | ' | ' | ' |
Loans, net of unearned income and deferred fees | 162,854 | 141,615 | ' |
Special Mention | ' | ' | ' |
Loans, net of unearned income and deferred fees | 11,268 | 11,302 | ' |
Substandard | ' | ' | ' |
Loans, net of unearned income and deferred fees | 15,353 | 22,305 | ' |
Commercial | ' | ' | ' |
Loans, net of unearned income and deferred fees | 12,344 | 3,282 | 7,688 |
Commercial | Pass | ' | ' | ' |
Loans, net of unearned income and deferred fees | 1,232 | 3,274 | ' |
Commercial | Substandard | ' | ' | ' |
Loans, net of unearned income and deferred fees | 2 | 8 | ' |
Commercial Real Estate Construction | ' | ' | ' |
Loans, net of unearned income and deferred fees | 4,758 | 3,621 | ' |
Commercial Real Estate Construction | Pass | ' | ' | ' |
Loans, net of unearned income and deferred fees | 4,396 | 3,065 | ' |
Commercial Real Estate Construction | Substandard | ' | ' | ' |
Loans, net of unearned income and deferred fees | 362 | 556 | ' |
Commercial Real Estate Owner Occupied | ' | ' | ' |
Loans, net of unearned income and deferred fees | 22,186 | 18,377 | ' |
Commercial Real Estate Owner Occupied | Pass | ' | ' | ' |
Loans, net of unearned income and deferred fees | 17,586 | 13,379 | ' |
Commercial Real Estate Owner Occupied | Special Mention | ' | ' | ' |
Loans, net of unearned income and deferred fees | 625 | 3,151 | ' |
Commercial Real Estate Owner Occupied | Substandard | ' | ' | ' |
Loans, net of unearned income and deferred fees | 3,975 | 1,847 | ' |
Commercial Real Estate Other | ' | ' | ' |
Loans, net of unearned income and deferred fees | 32,145 | 26,171 | ' |
Commercial Real Estate Other | Pass | ' | ' | ' |
Loans, net of unearned income and deferred fees | 27,584 | 21,582 | ' |
Commercial Real Estate Other | Special Mention | ' | ' | ' |
Loans, net of unearned income and deferred fees | 2,703 | 966 | ' |
Commercial Real Estate Other | Substandard | ' | ' | ' |
Loans, net of unearned income and deferred fees | 1,858 | 3,623 | ' |
Faith Based Non-Profit Construction | ' | ' | ' |
Loans, net of unearned income and deferred fees | ' | 2,344 | ' |
Faith Based Non-Profit Construction | Pass | ' | ' | ' |
Loans, net of unearned income and deferred fees | ' | 2,344 | ' |
Faith Based Non-Profit Owner Occupied | ' | ' | ' |
Loans, net of unearned income and deferred fees | 78,761 | 76,418 | ' |
Faith Based Non-Profit Owner Occupied | Pass | ' | ' | ' |
Loans, net of unearned income and deferred fees | 66,626 | 58,732 | ' |
Faith Based Non-Profit Owner Occupied | Special Mention | ' | ' | ' |
Loans, net of unearned income and deferred fees | 7,474 | 5,313 | ' |
Faith Based Non-Profit Owner Occupied | Substandard | ' | ' | ' |
Loans, net of unearned income and deferred fees | 4,661 | 12,373 | ' |
Faith Based Non-Profit Other | ' | ' | ' |
Loans, net of unearned income and deferred fees | 6,702 | 7,135 | ' |
Faith Based Non-Profit Other | Pass | ' | ' | ' |
Loans, net of unearned income and deferred fees | 6,701 | 7,059 | ' |
Faith Based Non-Profit Other | Special Mention | ' | ' | ' |
Loans, net of unearned income and deferred fees | 1 | 76 | ' |
Residential Real Estate First Mortgage | ' | ' | ' |
Loans, net of unearned income and deferred fees | 22,350 | 24,702 | ' |
Residential Real Estate First Mortgage | Pass | ' | ' | ' |
Loans, net of unearned income and deferred fees | 17,890 | 19,465 | ' |
Residential Real Estate First Mortgage | Special Mention | ' | ' | ' |
Loans, net of unearned income and deferred fees | 427 | 1,731 | ' |
Residential Real Estate First Mortgage | Substandard | ' | ' | ' |
Loans, net of unearned income and deferred fees | 4,033 | 3,506 | ' |
Residential Real Estate Multifamily | ' | ' | ' |
Loans, net of unearned income and deferred fees | 3,271 | 5,828 | ' |
Residential Real Estate Multifamily | Pass | ' | ' | ' |
Loans, net of unearned income and deferred fees | 3,171 | 5,702 | ' |
Residential Real Estate Multifamily | Special Mention | ' | ' | ' |
Loans, net of unearned income and deferred fees | 38 | 63 | ' |
Residential Real Estate Multifamily | Substandard | ' | ' | ' |
Loans, net of unearned income and deferred fees | 62 | 63 | ' |
Residential Real Estate Home Equity | ' | ' | ' |
Loans, net of unearned income and deferred fees | 3,051 | 3,161 | ' |
Residential Real Estate Home Equity | Pass | ' | ' | ' |
Loans, net of unearned income and deferred fees | 2,668 | 2,853 | ' |
Residential Real Estate Home Equity | Substandard | ' | ' | ' |
Loans, net of unearned income and deferred fees | 383 | 308 | ' |
Residential Real Estate Construction | ' | ' | ' |
Loans, net of unearned income and deferred fees | 241 | 83 | ' |
Residential Real Estate Construction | Pass | ' | ' | ' |
Loans, net of unearned income and deferred fees | 241 | 83 | ' |
Consumer | ' | ' | ' |
Loans, net of unearned income and deferred fees | 1,340 | 1,346 | 1,667 |
Consumer | Pass | ' | ' | ' |
Loans, net of unearned income and deferred fees | 1,323 | 1,323 | ' |
Consumer | Special Mention | ' | ' | ' |
Loans, net of unearned income and deferred fees | ' | 2 | ' |
Consumer | Substandard | ' | ' | ' |
Loans, net of unearned income and deferred fees | 17 | 21 | ' |
Other | ' | ' | ' |
Loans, net of unearned income and deferred fees | 2,326 | 2,754 | 2,964 |
Other | Pass | ' | ' | ' |
Loans, net of unearned income and deferred fees | $2,326 | $2,754 | ' |
Recovered_Sheet2
LOANS AND ALLOWANCE FOR LOAN LOSSES (Details Narrative) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Allowances for loan losses | $3,493 | $3,499 | $3,850 |
Allowance for loan losses, percentage of net loans | 1.84% | 2.00% | ' |
Change in loans | 14,300 | ' | ' |
Change in impaired loans balance | 6,600 | ' | ' |
Increase in reserve for impaired loans | 500 | ' | ' |
Loans collectively evaluated for impairment | 158,827 | 153,000 | 164,668 |
Allowance for loan losses collectively evaluated for impairment | 2,487 | 3,000 | 3,130 |
Net charge-offs | 300 | 500 | ' |
Allowance for loan losses, variance description | 'During the fourth quarter or 2012, the Company converted from a spreadsheet calculated ALLL to a more robust system provided by a third party servicing company. Historic quantitative and qualitative factors were carried forward to the new system as well as an eight quarter look back period for measuring loss histories. Slight variations in loss history calculations from the old system to the new, resulted in a variance of approximately $261 thousand. Management elected to retain the variance as an unallocated reserve as the team continues to validate and integrate nuances in the new system. | ' | ' |
Variance, accounted for as an unallocated reserve | 261 | ' | ' |
Non-accrual Loans | 6,720 | 8,732 | ' |
Non-accrual loans secured by faith-based non-profit real estate, percentage | 0.43% | ' | ' |
Non-accrual loans secured by real estate excluding faith-based non-profit, percentage | 99.41% | ' | ' |
TDRs in compliance with modified terms | 21,500 | ' | ' |
TDRs in compliance with modified terms, percentage | 81.54% | ' | ' |
Concentration risk - percentage of financing receivables in faith-based non-profit organizations | 45.11% | ' | ' |
Concentration risk - percentage of reserve allocated to faith-based non-profit organizations | 53.91% | ' | ' |
Impaired loans | 30,700 | 24,100 | ' |
Recorded investment, homogeneous first mortage residential real estate | ' | 1,900 | ' |
TDRs specific reserves | 900 | ' | ' |
Unrecognized income on non-accrual loans | 500 | 1,200 | ' |
Change in unrecognized income on non-accrual loans | -700 | ' | ' |
Annualized Net Charge-offs, percentage | 0.19% | 0.29% | ' |
Faith Based Non-Profit Owner Occupied | ' | ' | ' |
Change in impaired loans balance | 1,400 | ' | ' |
Non-accrual Loans | 29 | 5,241 | ' |
Change in impaired loan balance, number of loans added | 1 | ' | ' |
Change in non-accrual loans | -2,000 | ' | ' |
Change in total loans past due | -1,500 | ' | ' |
Commercial Real Estate Owner Occupied | ' | ' | ' |
Change in impaired loans balance | 2,700 | ' | ' |
Non-accrual Loans | 2,676 | 39 | ' |
Change in impaired loan balance, number of loans added | 3 | ' | ' |
Commercial Real Estate Other | ' | ' | ' |
Change in impaired loans balance | 1,900 | ' | ' |
Non-accrual Loans | 532 | 49 | ' |
Change in impaired loan balance, number of loans added | 2 | ' | ' |
Residential Real Estate First Mortgage | ' | ' | ' |
Change in impaired loans balance | 600 | ' | ' |
Non-accrual Loans | $3,348 | $3,384 | ' |
Change in impaired loan balance, number of loans added | 8 | ' | ' |
BANK_PREMISES_AND_EQUIPMENT_De
BANK PREMISES AND EQUIPMENT (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Bank premises and equipment, gross | $10,616 | $10,578 |
Less: accumulated depreciation and amortization | 6,243 | 5,895 |
Bank premises and equipment, net | 4,373 | 4,683 |
Land | ' | ' |
Bank premises and equipment, gross | 747 | 747 |
Buildings and Leasehold Improvements | ' | ' |
Bank premises and equipment, gross | 7,227 | 7,242 |
Furniture and equipment | ' | ' |
Bank premises and equipment, gross | 2,347 | 2,294 |
Capital Lease | ' | ' |
Bank premises and equipment, gross | $295 | $295 |
BANK_PREMISES_AND_EQUIPMENT_De1
BANK PREMISES AND EQUIPMENT (Details Narrative) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Bank Premises And Equipment Details Narrative | ' | ' |
Depreciation | $300 | $300 |
DEPOSITS_Details
DEPOSITS (Details) (USD $) | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |
Maturities of certificates of deposits | ' |
2014 | $129,753 |
2015 | 11,451 |
2016 | 1,718 |
2017 | 628 |
Thereafter | 262 |
Total | $143,812 |
DEPOSITS_Details_1
DEPOSITS (Details 1) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Maturities of time deposits over $100,000 | ' | ' |
Three months or less | $44,099 | $55,782 |
Over three months to six months | 21,123 | 5,568 |
Over six months to twelve months | 46,272 | 44,120 |
Over one year to five years | 10,409 | 6,532 |
Total | $121,903 | $112,002 |
Weighted Average Interest Rate on maturities of time deposits over $100,000 | ' | ' |
Three months or less | 0.30% | 0.32% |
Over three months to six months | 0.31% | 0.27% |
Over six months to twelve months | 0.38% | 0.51% |
Over one year to five years | 0.57% | 0.83% |
Total | 0.36% | 0.42% |
DEPOSITS_Details_Narrative
DEPOSITS (Details Narrative) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Deposits Details Narrative | ' | ' |
Interest expense for time deposits greater than $100,000 | $600 | $600 |
Deposits from related parties | 1,400 | 2,000 |
Deposits over threshold | $55,000 | $49,600 |
LEASES_Details
LEASES (Details) (USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Future minimum capital lease payments | ' |
2014 | $59 |
2015 | 60 |
2016 | 46 |
Total | $165 |
LEASES_Details_1
LEASES (Details 1) (USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Future minimum operating lease payments | ' |
2014 | $90 |
2015 | 19 |
2016 | 4 |
Total | $113 |
LEASES_Details_2
LEASES (Details 2) (USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Minimum sublease rentals | ' |
2014 | $120 |
2015 | 30 |
2016 | 23 |
Total | $173 |
LEASES_Details_Narrative
LEASES (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Leases Details Narrative | ' | ' |
Capital lease interest rate | 1.60% | ' |
Capital lease interest expense | $3,200 | ' |
Rent expense for operating leases | 100,000 | 100,000 |
Rental income from subleases | $100,000 | $300,000 |
BORROWINGS_Details
BORROWINGS (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Maturities of Federal Home Loan Bank Advances | ' | ' |
2014 | $23 | ' |
2015 | 24 | ' |
2016 | 24 | ' |
2017 | 25 | ' |
2018 | 26 | ' |
Thereafter | 559 | ' |
FHLB advances | $681 | $703 |
Average Interest Rate | ' | ' |
2014 | 0.50% | ' |
2015 | 0.50% | ' |
2016 | 0.50% | ' |
2017 | 0.50% | ' |
2018 | 0.50% | ' |
Thereafter | 0.50% | ' |
[FederalHomeLoanBankAdvancesMaturitiesSummaryAverageInterestRate] | 0.50% | 0.50% |
BORROWINGS_Details_Narrative
BORROWINGS (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Borrowings Details Narrative | ' | ' |
FHLB advances, maturing fully in 2020 | $681,000 | $703,000 |
Federal Home Loan Bank interest rate | 0.50% | 0.50% |
Capital lease | 200,000 | ' |
Capital lease, interest rate | 1.60% | ' |
Interest expense on FHLB advances | 3,500 | 3,600 |
Federal funds unused funds | 5,300,000 | ' |
Federal funds lines of credit | 10,000,000 | ' |
Loans securing FHLB advances | $8,000,000 | $10,200,000 |
INCOME_TAXES_Details
INCOME TAXES (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Income tax expense (benefit) | ' | ' |
Current | $191 | $6 |
Deferred | -37 | 110 |
Income tax expense (benefit | $151 | $116 |
INCOME_TAXES_Details_1
INCOME TAXES (Details 1) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Income Taxes Details 1 | ' | ' |
Statutory federal income tax rate | 34.00% | 34.00% |
Tax provision at statutory rate | $175 | $156 |
Increase (decrease) in income taxes resulting from: | ' | ' |
State income taxes net of federal benefit | 77 | 7 |
Tax exempt interest income | -14 | -37 |
Disallowed interest expense | ' | 1 |
Increase in Valuation Allowance | -18 | 41 |
Cash surrender value of life insurance | -71 | -69 |
Other | 2 | 17 |
Income tax expense (benefit | $151 | $116 |
INCOME_TAXES_Details_2
INCOME TAXES (Details 2) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Deferred tax assets: | ' | ' |
Accrued pension expense | $421 | $458 |
Adjustments, defined benefit plans | 624 | 1,151 |
Deferred loan fees | 74 | 70 |
Excess book over tax provision for loan loss expense | 1,331 | 1,370 |
Federal net operating loss carryforward | 170 | 300 |
State net economic loss carryforward | 191 | 210 |
Impairment on investments | 73 | 74 |
OREO write-downs | 233 | 175 |
Deferred gain on other real estate owned | 4 | 18 |
Premises and equipment | 147 | 155 |
Alternative minimum tax | 556 | 383 |
Unrealized gains on securities available for sale | 248 | ' |
Other, net | 77 | 59 |
Total deferred tax assets | 4,149 | 4,423 |
Valuation allowance for deferred tax assets | -222 | -240 |
Net of valuation allowance deferred tax asset | 3,927 | 4,183 |
Deferred tax liabilities: | ' | ' |
Unrealized gains on securities available for sale | ' | -232 |
Other | -116 | -132 |
Total deferred tax liabilities | -116 | -364 |
Net deferred tax assets | 3,811 | 3,819 |
Tax Receivable, net | 342 | 568 |
Deferred tax assets and taxes receivable, net | $4,153 | $4,387 |
INCOME_TAXES_Details_Narrative
INCOME TAXES (Details Narrative) (USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Income Taxes Details Narrative | ' |
Net operating loss carryforwards expiring in 2027 | $500 |
EMPLOYEE_BENEFIT_PLANS_Details
EMPLOYEE BENEFIT PLANS (Details) (Cash Balance Plan) | Dec. 31, 2013 | Dec. 31, 2012 |
Asset Allocations | 100.00% | 100.00% |
Equity Securities | ' | ' |
Asset Allocations | 66.40% | 66.10% |
Debt Securities | ' | ' |
Asset Allocations | 30.30% | 31.10% |
Other Assets | ' | ' |
Asset Allocations | 3.30% | 2.80% |
EMPLOYEE_BENEFIT_PLANS_Details1
EMPLOYEE BENEFIT PLANS (Details 1) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Components of Net Period Pension Cost | ' | ' |
Service cost | $160 | $143 |
Interest cost | 273 | 294 |
Expected return on plan assets | -300 | -265 |
Amortization of prior service cost and recognized net actuarial earnings | 325 | 225 |
Net periodic benefit cost | 458 | 397 |
Cash Balance Plan | ' | ' |
Components of Net Period Pension Cost | ' | ' |
Service cost | 160 | 143 |
Interest cost | 201 | 222 |
Expected return on plan assets | -300 | -265 |
Amortization of prior service cost and recognized net actuarial earnings | 313 | 213 |
Net periodic benefit cost | 374 | 313 |
SERP Plan | ' | ' |
Components of Net Period Pension Cost | ' | ' |
Interest cost | 72 | 72 |
Amortization of prior service cost and recognized net actuarial earnings | 12 | 12 |
Net periodic benefit cost | $84 | $84 |
EMPLOYEE_BENEFIT_PLANS_Details2
EMPLOYEE BENEFIT PLANS (Details 2) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Change in projected benefit obligation: | ' | ' | ' |
Benefit obligation, beginning of year | ' | $8,398 | $8,083 |
Service cost | ' | 160 | 143 |
Interest cost | ' | 273 | 294 |
Actuarial gain/(loss) | ' | -460 | 235 |
Benefits and expenses paid | ' | -780 | -380 |
Benefit obligation, end of year | ' | 7,592 | 8,398 |
Change in plan assets: | ' | ' | ' |
Fair value of plan assets | ' | 4,676 | 4,145 |
Actual return on plan assets | ' | 857 | 408 |
Employer contributions | ' | 479 | 504 |
Fair value of plan assets | ' | 5,233 | 4,676 |
Funded Status (under funded) | ' | -2,359 | -3,722 |
Cash Balance Plan | ' | ' | ' |
Change in projected benefit obligation: | ' | ' | ' |
Benefit obligation, beginning of year | 5,637 | 6,240 | 5,758 |
Service cost | ' | 160 | 143 |
Interest cost | ' | 201 | 222 |
Actuarial gain/(loss) | ' | -338 | 343 |
Benefits and expenses paid | ' | -626 | -226 |
Benefit obligation, end of year | ' | 5,637 | 6,240 |
Change in plan assets: | ' | ' | ' |
Fair value of plan assets | 5,233 | 4,676 | 4,145 |
Actual return on plan assets | ' | 857 | 408 |
Employer contributions | 300 | 325 | 350 |
Fair value of plan assets | ' | 5,233 | 4,676 |
Funded Status (under funded) | ' | -404 | -1,564 |
SERP Plan | ' | ' | ' |
Change in projected benefit obligation: | ' | ' | ' |
Benefit obligation, beginning of year | 1,955 | 2,158 | 2,325 |
Interest cost | ' | 72 | 72 |
Actuarial gain/(loss) | ' | -122 | -108 |
Benefits and expenses paid | -200 | -154 | -154 |
Benefit obligation, end of year | ' | 1,955 | 2,158 |
Change in plan assets: | ' | ' | ' |
Employer contributions | ' | 154 | 154 |
Funded Status (under funded) | ' | ($1,955) | ($2,158) |
EMPLOYEE_BENEFIT_PLANS_Details3
EMPLOYEE BENEFIT PLANS (Details 3) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Unreocginzed net actuarial loss | $1,642 | $2,982 |
Unrecognized prior service cost | 2 | 4 |
Total amount included in accumulated other comprehensive loss | 1,644 | 2,986 |
Cash Balance Plan | ' | ' |
Unreocginzed net actuarial loss | 1,361 | 2,567 |
Unrecognized prior service cost | 2 | 4 |
Total amount included in accumulated other comprehensive loss | 1,363 | 2,571 |
SERP Plan | ' | ' |
Unreocginzed net actuarial loss | 281 | 415 |
Total amount included in accumulated other comprehensive loss | $281 | $415 |
EMPLOYEE_BENEFIT_PLANS_Details4
EMPLOYEE BENEFIT PLANS (Details 4) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Cash Balance Plan | ' | ' |
Discount Rate | 4.50% | 3.50% |
Expected long-term return on plan assets | 7.00% | 7.00% |
Rate of Compensation Increase | 3.00% | 3.00% |
SERP Plan | ' | ' |
Discount Rate | 4.25% | 3.50% |
Rate of Compensation Increase | 3.00% | 3.00% |
EMPLOYEE_BENEFIT_PLANS_Details5
EMPLOYEE BENEFIT PLANS (Details 5) (USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2013 |
To be recognized in following period: | ' |
Net actuarial loss | $91 |
Prior service cost | 2 |
Total expected to be recognized | 93 |
Cash Balance Plan | ' |
To be recognized in following period: | ' |
Net actuarial loss | 85 |
Prior service cost | 2 |
Total expected to be recognized | 87 |
SERP Plan | ' |
To be recognized in following period: | ' |
Net actuarial loss | 6 |
Total expected to be recognized | $6 |
EMPLOYEE_BENEFIT_PLANS_Details6
EMPLOYEE BENEFIT PLANS (Details 6) (USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Future Benefit Payments | ' |
2014 | $889 |
2015 | 547 |
2016 | 605 |
2017 | 559 |
2018 | 560 |
2019-2023 | 2,801 |
Total | 5,961 |
Cash Balance Plan | ' |
Future Benefit Payments | ' |
2014 | 735 |
2015 | 395 |
2016 | 455 |
2017 | 411 |
2018 | 414 |
2019-2023 | 2,110 |
Total | 4,520 |
SERP Plan | ' |
Future Benefit Payments | ' |
2014 | 154 |
2015 | 152 |
2016 | 150 |
2017 | 148 |
2018 | 146 |
2019-2023 | 691 |
Total | $1,441 |
EMPLOYEE_BENEFIT_PLANS_Details7
EMPLOYEE BENEFIT PLANS (Details 7) | 12 Months Ended |
Dec. 31, 2013 | |
Cash | ' |
Target Asset Allocations | ' |
Target asset allocations | 0.00% |
Cash | Lower Range | ' |
Target Asset Allocations | ' |
Target asset allocations | 0.00% |
Cash | Upper Range | ' |
Target Asset Allocations | ' |
Target asset allocations | 10.00% |
Securities - US | ' |
Target Asset Allocations | ' |
Target asset allocations | 66.00% |
Securities - US | Lower Range | ' |
Target Asset Allocations | ' |
Target asset allocations | 56.00% |
Securities - US | Upper Range | ' |
Target Asset Allocations | ' |
Target asset allocations | 76.00% |
Securities - Non-US | ' |
Target Asset Allocations | ' |
Target asset allocations | 7.00% |
Securities - Non-US | Lower Range | ' |
Target Asset Allocations | ' |
Target asset allocations | 0.00% |
Securities - Non-US | Upper Range | ' |
Target Asset Allocations | ' |
Target asset allocations | 14.00% |
Fixed Income Bonds | ' |
Target Asset Allocations | ' |
Target asset allocations | 27.00% |
Fixed Income Bonds | Lower Range | ' |
Target Asset Allocations | ' |
Target asset allocations | 20.00% |
Fixed Income Bonds | Upper Range | ' |
Target Asset Allocations | ' |
Target asset allocations | 37.00% |
EMPLOYEE_BENEFIT_PLANS_Details8
EMPLOYEE BENEFIT PLANS (Details 8) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | |||
Fair value of plan assets | $5,233 | $4,676 | $4,145 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ' | ' | ' |
Fair value of plan assets | 3,159 | 2,833 | ' |
Significant Other Observable Inputs (Level 2) | ' | ' | ' |
Fair value of plan assets | 2,074 | 1,843 | ' |
Cash | Significant Other Observable Inputs (Level 2) | ' | ' | ' |
Fair value of plan assets | 170 | 124 | ' |
Large-Cap Equity Securities | Quoted Prices in Active Markets for Identical Assets (Level 1) | ' | ' | ' |
Fair value of plan assets | 974 | 847 | ' |
Large-Cap Equity Securities | Significant Other Observable Inputs (Level 2) | ' | ' | ' |
Fair value of plan assets | 396 | 331 | ' |
Mid-Cap Equity Securities | Quoted Prices in Active Markets for Identical Assets (Level 1) | ' | ' | ' |
Fair value of plan assets | 1,090 | 901 | ' |
Small-Cap Equity Securities | Quoted Prices in Active Markets for Identical Assets (Level 1) | ' | ' | ' |
Fair value of plan assets | 53 | 78 | ' |
Small-Cap Equity Securities | Significant Other Observable Inputs (Level 2) | ' | ' | ' |
Fair value of plan assets | 476 | 475 | ' |
Global and International Equity Securities | Quoted Prices in Active Markets for Identical Assets (Level 1) | ' | ' | ' |
Fair value of plan assets | 442 | 403 | ' |
Emerging Market Equity Securities | Quoted Prices in Active Markets for Identical Assets (Level 1) | ' | ' | ' |
Fair value of plan assets | 48 | 66 | ' |
Fixed Income Bonds | Significant Other Observable Inputs (Level 2) | ' | ' | ' |
Fair value of plan assets | 275 | 151 | ' |
Other | Quoted Prices in Active Markets for Identical Assets (Level 1) | ' | ' | ' |
Fair value of plan assets | 552 | 538 | ' |
Other | Significant Other Observable Inputs (Level 2) | ' | ' | ' |
Fair value of plan assets | $757 | $762 | ' |
EMPLOYEE_BENEFIT_PLANS_Details9
EMPLOYEE BENEFIT PLANS (Details Narrative) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2002 |
Contributions to plan | ' | $479 | $504 | ' |
Increase in cash surrender value of bank owned life insurance | ' | 213 | 210 | ' |
Cash surrender value of bank-owned life insurance | ' | 6,191 | 5,978 | ' |
Benefits paid | ' | 780 | 380 | ' |
Funded Status (under funded) | ' | -2,359 | -3,722 | ' |
Required Rate of return | ' | 103.00% | ' | ' |
Cash Balance Plan | ' | ' | ' | ' |
Contributions to plan | 300 | 325 | 350 | ' |
Benefits paid | ' | 626 | 226 | ' |
Funded Status (under funded) | ' | -404 | -1,564 | ' |
SERP Plan | ' | ' | ' | ' |
Contributions to plan | ' | 154 | 154 | ' |
Purchase of Bank Owned Life Insurance | ' | ' | ' | 12,900 |
Benefits paid | 200 | 154 | 154 | ' |
Funded Status (under funded) | ' | -1,955 | -2,158 | ' |
401(k) Plan | ' | ' | ' | ' |
Contributions to plan | ' | 200 | 200 | ' |
Maximum percentage of compensation employee may contribute | ' | 12.00% | ' | ' |
Maximum percent of compensation for employer's match | ' | 6.00% | ' | ' |
Benefit liability | ' | 200 | 300 | ' |
Post-retirement Plan | ' | ' | ' | ' |
Benefit liability | ' | 200 | 200 | ' |
Split-Dollar Benefits | ' | ' | ' | ' |
Benefit liability | ' | $200 | $200 | ' |
RELATED_PARTY_TRANSACTIONS_Det
RELATED PARTY TRANSACTIONS (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Loans from related parties | ' | ' |
Beginning Balance | $2,236 | $2,322 |
Draws/Advances | 89 | 141 |
Repayments | -331 | -227 |
Ending Balance | $1,994 | $2,236 |
RELATED_PARTY_TRANSACTIONS_Det1
RELATED PARTY TRANSACTIONS (Details Narrative) (Related Party Receivables, USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Related Party Receivables | ' | ' |
Unused loans receivable | $400 | $100 |
REGULATORY_MATTERS_AND_RESTRIC2
REGULATORY MATTERS AND RESTRICTIONS (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Holding Company | ' | ' |
Total Capital | $37,006 | $36,646 |
Total Capital (to risk-weighted assets) ratio | 17.42% | 19.15% |
Amount of capital for adequacy purposes | 16,990 | 15,311 |
Amount of capital for adequacy purposes, ratio | 8.00% | 8.00% |
To be well-capitalized | 21,238 | 19,138 |
To be well-capitalized, ratio | 10.00% | 10.00% |
Tier 1 Capital | 34,341 | 34,239 |
Tier 1 Capital (to risk-weighted assets) ratio | 16.17% | 17.89% |
Amount of Tier 1 Capital for adequacy purposes | 8,495 | 7,655 |
Amount of Tier 1 Capital for adequacy purposes, ratio | 4.00% | 4.00% |
Tier 1 Capital to be well-capitalized | 12,743 | 11,483 |
Tier 1 Capital to be well-capitalized, ratio | 6.00% | 6.00% |
Tier 1 Capital | 34,341 | 34,239 |
Tier 1 Capital (to average assets) ratio | 11.87% | 11.56% |
Amount of Tier 1 Capital for adequacy purposes | 11,576 | 11,851 |
Amount of Tier 1 Capital for adequacy purposes, ratio | 4.00% | 4.00% |
Tier 1 Capital to be well-capitalized | 14,471 | 14,813 |
Tier 1 Capital to be well-capitalized, ratio | 5.00% | 5.00% |
Bank | ' | ' |
Total Capital | 35,573 | 34,860 |
Total Capital (to risk-weighted assets) ratio | 16.77% | 18.45% |
Amount of capital for adequacy purposes | 16,975 | 15,211 |
Amount of capital for adequacy purposes, ratio | 8.00% | 8.00% |
To be well-capitalized | 21,219 | 19,014 |
To be well-capitalized, ratio | 10.00% | 10.00% |
Tier 1 Capital | 32,910 | 32,483 |
Tier 1 Capital (to risk-weighted assets) ratio | 15.51% | 17.19% |
Amount of Tier 1 Capital for adequacy purposes | 8,487 | 7,606 |
Amount of Tier 1 Capital for adequacy purposes, ratio | 4.00% | 4.00% |
Tier 1 Capital to be well-capitalized | 12,731 | 11,409 |
Tier 1 Capital to be well-capitalized, ratio | 6.00% | 6.00% |
Tier 1 Capital | 32,910 | 32,483 |
Tier 1 Capital (to average assets) ratio | 10.69% | 11.02% |
Amount of Tier 1 Capital for adequacy purposes | 12,316 | 11,786 |
Amount of Tier 1 Capital for adequacy purposes, ratio | 4.00% | 4.00% |
Tier 1 Capital to be well-capitalized | $15,395 | $14,733 |
Tier 1 Capital to be well-capitalized, ratio | 5.00% | 5.00% |
HOLDING_COMPANY_CONDENSED_FINA2
HOLDING COMPANY CONDENSED FINANCIAL INFORMATION (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | |||
ASSETS | ' | ' | ' |
Cash and cash equivalents | $28,583 | $42,586 | $61,296 |
Other assets | 1,955 | 1,530 | ' |
TOTAL ASSETS | 301,489 | 296,099 | ' |
LIABILITIES AND STOCKHOLDERS' EQUITY | ' | ' | ' |
Total liabilities | 265,352 | 259,820 | ' |
Total stockholders' equity | 36,137 | 36,279 | 36,397 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 301,489 | 296,099 | ' |
Holding Company | ' | ' | ' |
ASSETS | ' | ' | ' |
Cash and cash equivalents | 930 | 1,340 | ' |
Investment in subsidiary Bank | 34,806 | 34,523 | ' |
Other assets | 443 | 448 | ' |
TOTAL ASSETS | 36,179 | 36,311 | ' |
LIABILITIES AND STOCKHOLDERS' EQUITY | ' | ' | ' |
Total liabilities | 42 | 32 | ' |
Total stockholders' equity | 36,137 | 36,279 | ' |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $36,179 | $36,311 | ' |
HOLDING_COMPANY_CONDENSED_FINA3
HOLDING COMPANY CONDENSED FINANCIAL INFORMATION (Details 1) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Net income | $363 | $341 |
Holding Company | ' | ' |
Undistributed net earnings of subsidiary bank | 550 | 499 |
Expenses, net | -187 | -158 |
Net income | $363 | $341 |
COMMITMENTS_AND_CONTINGENCIES_1
COMMITMENTS AND CONTINGENCIES (Details) (USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Guarantee Obligations less than 1 year | $5,083 |
Guarantee Obligations 1 to 3 years | 5,701 |
Guarantee Obligations 3 to 5 years | 9,924 |
Guarantee Obligations more than 5 years | 2,577 |
Obligations to extend credit | 23,285 |
Commerical Letters of Credit | ' |
Guarantee Obligations less than 1 year | 123 |
Guarantee Obligations 1 to 3 years | 47 |
Guarantee Obligations 3 to 5 years | 250 |
Guarantee Obligations more than 5 years | 93 |
Obligations to extend credit | 513 |
Other Commercial Loan Commitments | ' |
Guarantee Obligations less than 1 year | 4,960 |
Guarantee Obligations 1 to 3 years | 5,654 |
Guarantee Obligations 3 to 5 years | 9,674 |
Guarantee Obligations more than 5 years | 2,484 |
Obligations to extend credit | $22,772 |
FAIR_VALUE_MEASUREMENT_Details
FAIR VALUE MEASUREMENT (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Fair Value Measured on a Recurring Basis | ' | ' |
Fair value of assets | $65,944 | $60,847 |
Fair Value Measured on a Recurring Basis | Mortgage Servicing Rights | ' | ' |
Fair value of assets | 25 | 36 |
Fair Value Measured on a Recurring Basis | Significant Other Observable Inputs (Level 2) | ' | ' |
Fair value of assets | 65,919 | 60,811 |
Fair Value Measured on a Recurring Basis | Significant Unobservable Inputs (Level 3) | ' | ' |
Fair value of assets | 25 | 36 |
Fair Value Measured on a Recurring Basis | Significant Unobservable Inputs (Level 3) | Mortgage Servicing Rights | ' | ' |
Fair value of assets | 25 | 36 |
US Government Agencies | Fair Value Measured on a Recurring Basis | ' | ' |
Fair value of assets | 6,766 | 1,327 |
US Government Agencies | Fair Value Measured on a Recurring Basis | Significant Other Observable Inputs (Level 2) | ' | ' |
Fair value of assets | 6,766 | 1,327 |
Government Mortgage-backed Securities | Fair Value Measured on a Recurring Basis | ' | ' |
Fair value of assets | 57,698 | 57,931 |
Government Mortgage-backed Securities | Fair Value Measured on a Recurring Basis | Significant Other Observable Inputs (Level 2) | ' | ' |
Fair value of assets | 57,698 | 57,931 |
Non-Government Mortgage-backed Securities | ' | ' |
Fair value of assets | 1,455 | ' |
Non-Government Mortgage-backed Securities | Fair Value Measured on a Recurring Basis | ' | ' |
Fair value of assets | ' | 1,553 |
Non-Government Mortgage-backed Securities | Fair Value Measured on a Recurring Basis | Significant Other Observable Inputs (Level 2) | ' | ' |
Fair value of assets | $1,455 | $1,553 |
FAIR_VALUE_MEASUREMENT_Details1
FAIR VALUE MEASUREMENT (Details 1) (Fair Value Measured on a Recurring Basis, USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | Significant Unobservable Inputs (Level 3) | Significant Unobservable Inputs (Level 3) | Mortgage Servicing Rights | Mortgage Servicing Rights | Mortgage Servicing Rights | ||
Significant Unobservable Inputs (Level 3) | |||||||
Balance beginning | $65,944 | $60,847 | $25 | $36 | $25 | $36 | $36 |
Amortization | ' | ' | ' | ' | ' | ' | 11 |
Balance ending | $65,944 | $60,847 | $25 | $36 | $25 | $36 | $25 |
FAIR_VALUE_MEASUREMENT_Details2
FAIR VALUE MEASUREMENT (Details 2) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Non-Recurring Fair Value Measurements | ' | ' |
OREO | 3,032 | 3,055 |
Other Real Estate Owned- Fair Value | ' | ' |
Non-Recurring Fair Value Measurements | ' | ' |
Valuation technique | 'discounted appraisals | 'discounted appraisals |
Significant Unobservable Inputs | 'collateral discounts | 'collateral discounts |
General range of significant input values, minimum | 6.00% | 6.00% |
General range of significant input values, maximum | 20.00% | 20.00% |
Repossessed Collateral | ' | ' |
Non-Recurring Fair Value Measurements | ' | ' |
Valuation technique | 'discounted appraisals | 'discounted appraisals |
Significant Unobservable Inputs | 'collateral discounts | 'collateral discounts |
General range of significant input values, minimum | 20.00% | 20.00% |
General range of significant input values, maximum | 50.00% | 50.00% |
Impaired Loans | ' | ' |
Non-Recurring Fair Value Measurements | ' | ' |
Valuation technique | 'discounted appraisals | 'discounted appraisals |
Significant Unobservable Inputs | 'collateral discounts | 'collateral discounts |
General range of significant input values, minimum | 6.00% | 6.00% |
General range of significant input values, maximum | 20.00% | 20.00% |
Fair Value Measured on a Non-Recurring Basis | ' | ' |
Non-Recurring Fair Value Measurements | ' | ' |
OREO | 3,032 | 3,055 |
Repossessed Collateral | 590 | 590 |
Impaired Loans - Commercial Real Estate | 9,050 | 4,749 |
Impaired Loans - Faith-based non-profit | 16,772 | 14,863 |
Impaired Loans - Residential real estate | 3,875 | 3,916 |
Impaired Loans - Consumer | 11 | 16 |
Total Fair Value, non-recurring | 33,330 | 27,225 |
Fair Value Measured on a Non-Recurring Basis | Significant Unobservable Inputs (Level 3) | ' | ' |
Non-Recurring Fair Value Measurements | ' | ' |
OREO | 3,032 | 3,055 |
Repossessed Collateral | 590 | 590 |
Impaired Loans - Commercial Real Estate | 9,050 | 4,749 |
Impaired Loans - Faith-based non-profit | 16,772 | 14,863 |
Impaired Loans - Residential real estate | 3,875 | 3,916 |
Impaired Loans - Consumer | 11 | 16 |
Total Fair Value, non-recurring | 33,330 | 27,225 |
FAIR_VALUE_MEASUREMENT_Details3
FAIR VALUE MEASUREMENT (Details 3) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | |||
Assets: | ' | ' | ' |
Cash and cash equivalents | $28,583 | $42,586 | $61,296 |
Investment securities available for sale, at fair value | 65,919 | 60,811 | ' |
Loans, net | 185,982 | 171,723 | ' |
Interest receivable | 912 | 858 | ' |
Liabilities: | ' | ' | ' |
Other borrowings | 847 | 2,937 | ' |
Carrying Amount | ' | ' | ' |
Assets: | ' | ' | ' |
Cash and cash equivalents | 28,583 | 42,586 | ' |
Investment securities available for sale, at fair value | 65,919 | 60,811 | ' |
Loans, net | 185,982 | 171,723 | ' |
Interest receivable | 912 | 858 | ' |
Liabilities: | ' | ' | ' |
Non-maturity deposits | 116,115 | 116,276 | ' |
Maturity deposits | 143,812 | 134,603 | ' |
Other borrowings | 847 | 2,937 | ' |
Accrued interest payable | 75 | 119 | ' |
Fair Value | ' | ' | ' |
Assets: | ' | ' | ' |
Cash and cash equivalents | 28,583 | 42,586 | ' |
Investment securities available for sale, at fair value | 65,919 | 60,811 | ' |
Loans, net | 189,387 | 175,041 | ' |
Interest receivable | 912 | 858 | ' |
Liabilities: | ' | ' | ' |
Non-maturity deposits | 116,115 | 116,276 | ' |
Maturity deposits | 143,314 | 134,322 | ' |
Other borrowings | 791 | 2,871 | ' |
Accrued interest payable | 75 | 119 | ' |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ' | ' | ' |
Assets: | ' | ' | ' |
Cash and cash equivalents | 28,583 | 42,586 | ' |
Interest receivable | 912 | 858 | ' |
Liabilities: | ' | ' | ' |
Non-maturity deposits | 116,115 | 116,276 | ' |
Accrued interest payable | 75 | 119 | ' |
Significant Other Observable Inputs (Level 2) | ' | ' | ' |
Assets: | ' | ' | ' |
Investment securities available for sale, at fair value | 65,919 | 60,811 | ' |
Liabilities: | ' | ' | ' |
Maturity deposits | 143,314 | 134,322 | ' |
Significant Unobservable Inputs (Level 3) | ' | ' | ' |
Assets: | ' | ' | ' |
Loans, net | 189,387 | 175,041 | ' |
Liabilities: | ' | ' | ' |
Other borrowings | $791 | $2,871 | ' |
PREFERRED_STOCK_US_TREASURY_DE1
PREFERRED STOCK - U.S. TREASURY DEPARTMENT'S CAPITAL PURCHASE PROGRAM and CDIC (Details Narrative) (Series A Fixed Rate Cumulative Perpetual Preferred Stock, USD $) | 0 Months Ended |
In Thousands, except Share data, unless otherwise specified | Jun. 26, 2009 |
Series A Fixed Rate Cumulative Perpetual Preferred Stock | ' |
Shares of stock issued | 11,735 |
Value of stock issued | $11,735 |