Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2013 | Feb. 25, 2014 | Jun. 30, 2013 |
Document and Entity Information | ' | ' | ' |
Entity Registrant Name | 'HERITAGE OAKS BANCORP | ' | ' |
Entity Central Index Key | '0000921547 | ' | ' |
Document Type | '10-K | ' | ' |
Document Period End Date | 31-Dec-13 | ' | ' |
Amendment Flag | 'false | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Entity Well-known Seasoned Issuer | 'No | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Filer Category | 'Accelerated Filer | ' | ' |
Entity Public Float | ' | ' | $111.70 |
Entity Common Stock, Shares Outstanding | ' | 25,427,238 | ' |
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 | ||
Assets | ' | ' |
Cash and due from banks | $11,336 | $23,425 |
Interest bearing deposits in other banks | 14,902 | 10,691 |
Total cash and cash equivalents | 26,238 | 34,116 |
Investment securities available for sale | 276,795 | 287,682 |
Federal Home Loan Bank stock | 4,739 | 4,575 |
Loans held for sale | 2,386 | 22,549 |
Gross loans | 827,484 | 689,608 |
Net deferred loan fees | -1,281 | -937 |
Allowance for loan losses | -17,859 | -18,118 |
Net loans | 808,344 | 670,553 |
Property, premises and equipment | 24,220 | 15,956 |
Deferred tax assets, net | 21,624 | 21,933 |
Bank owned life insurance | 15,826 | 15,349 |
Goodwill and other intangible assets | 12,581 | 12,981 |
Other assets | 10,898 | 11,838 |
Total assets | 1,203,651 | 1,097,532 |
Liabilities | ' | ' |
Non-interest bearing deposits | 291,856 | 273,242 |
Interest bearing deposits | 682,039 | 597,628 |
Total deposits | 973,895 | 870,870 |
Short term FHLB borrowing | 29,000 | 33,000 |
Long term FHLB borrowing | 59,500 | 33,500 |
Junior subordinated debentures | 8,248 | 8,248 |
Other liabilities | 6,581 | 6,385 |
Total liabilities | 1,077,224 | 952,003 |
Commitments and contingencies (Note 18) | ' | ' |
Stockholders' Equity | ' | ' |
Common stock, no par value; authorized: 100,000,000 shares; issued and outstanding: 25,397,780 shares and 25,307,110 shares as of December 31, 2013 and 2012 respectively | 101,511 | 101,354 |
Paid in capital | 6,020 | 7,337 |
Retained earnings | 18,717 | 8,773 |
Accumulated other comprehensive (loss) / income, net of tax (benefit) / expense of ($2,395) and $2,745 as of December 31, 2013 and 2012, respectively | -3,425 | 3,925 |
Total stockholders' equity | 126,427 | 145,529 |
Total liabilities and stockholders' equity | 1,203,651 | 1,097,532 |
Series A senior preferred stock | ' | ' |
Stockholders' Equity | ' | ' |
Preferred stock | ' | 20,536 |
Series C preferred stock | ' | ' |
Stockholders' Equity | ' | ' |
Preferred stock | $3,604 | $3,604 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | 12 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Preferred stock | ' | ' |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Common stock, no par value (in dollars per share) | ' | ' |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 25,397,780 | 25,307,110 |
Common stock, shares outstanding | 25,397,780 | 25,307,110 |
Accumulated other comprehensive income, tax (benefit) expense (in dollars) | ($2,395) | $2,745 |
Series A senior preferred stock | ' | ' |
Preferred stock | ' | ' |
Preferred stock, per share stated value (in dollars per share) | $1,000 | $1,000 |
Preferred stock, shares issued | 0 | 21,000 |
Preferred stock, shares outstanding | 0 | 21,000 |
Series C preferred stock | ' | ' |
Preferred stock | ' | ' |
Preferred stock, per share stated value (in dollars per share) | $3.25 | $3.25 |
Preferred stock, shares issued | 1,189,538 | 1,189,538 |
Preferred stock, shares outstanding | 1,189,538 | 1,189,538 |
Consolidated_Statements_of_Inc
Consolidated Statements of Income (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Interest Income | ' | ' | ' |
Loans | $39,610 | $39,278 | $41,345 |
Investment securities available for sale | 5,476 | 6,896 | 6,794 |
Other | 307 | 147 | 88 |
Total interest income | 45,393 | 46,321 | 48,227 |
Interest Expense | ' | ' | ' |
Interest on deposits | 2,860 | 2,988 | 4,482 |
Other borrowings | 1,007 | 830 | 541 |
Total interest expense | 3,867 | 3,818 | 5,023 |
Net interest income before provision for loan losses | 41,526 | 42,503 | 43,204 |
Provision for loan losses | ' | 7,681 | 6,063 |
Net interest income after provision for loan losses | 41,526 | 34,822 | 37,141 |
Non-Interest Income | ' | ' | ' |
Fees and service charges | 4,529 | 4,350 | 4,085 |
Mortgage gain on sale and origination fees | 2,924 | 4,263 | 2,645 |
Gain on sale of investment securities | 3,926 | 2,619 | 1,983 |
Gain / (loss) on sale of other real estate owned | ' | 199 | -543 |
Other income | 1,496 | 1,117 | 1,560 |
Total non-interest income | 12,875 | 12,548 | 9,730 |
Non-Interest Expense | ' | ' | ' |
Salaries and employee benefits | 18,977 | 18,304 | 17,630 |
Occupancy | 3,215 | 3,287 | 3,771 |
Information technology | 2,582 | 2,553 | 2,975 |
Professional services | 2,833 | 3,546 | 2,786 |
Regulatory | 1,007 | 1,596 | 2,360 |
Equipment | 1,676 | 1,613 | 1,739 |
Sales and marketing | 584 | 690 | 668 |
Foreclosed asset costs and write-downs | 180 | 334 | 1,868 |
Provision for potential mortgage repurchases | 570 | 1,192 | 169 |
Amortization of intangible assets | 400 | 342 | 445 |
Merger and integration | 1,051 | ' | ' |
Other expense | 3,488 | 2,674 | 2,907 |
Total non-interest expense | 36,563 | 36,131 | 37,318 |
Income before income tax expense / (benefit) | 17,838 | 11,239 | 9,553 |
Income tax expense / (benefit) | 6,997 | -1,798 | 1,828 |
Net income | 10,841 | 13,037 | 7,725 |
Dividends and accretion on preferred stock | 898 | 1,470 | 1,358 |
Net income available to common shareholders | $9,943 | $11,567 | $6,367 |
Earnings Per Common Share | ' | ' | ' |
Basic (in dollars per share) | $0.40 | $0.46 | $0.25 |
Diluted (in dollars per share) | $0.37 | $0.44 | $0.24 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Consolidated Statements of Comprehensive Income | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income | $1,634 | $2,761 | $2,716 | $3,730 | $3,127 | $6,428 | $1,897 | $1,585 | $10,841 | $13,037 | $7,725 |
Other comprehensive income: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unrealized security holding (losses) / gains | ' | ' | ' | ' | ' | ' | ' | ' | -8,565 | 8,544 | 4,634 |
Reclassification for net gains on investments included in earnings | ' | ' | ' | ' | ' | ' | ' | ' | -3,926 | -2,619 | -1,983 |
Other comprehensive (loss) / income, before income tax (benefit) / expense | ' | ' | ' | ' | ' | ' | ' | ' | -12,491 | 5,925 | 2,651 |
Income tax (benefit) / expense related to items of other comprehensive income | ' | ' | ' | ' | ' | ' | ' | ' | -5,141 | 2,438 | 1,092 |
Other comprehensive (loss) / income | ' | ' | ' | ' | ' | ' | ' | ' | -7,350 | 3,487 | 1,559 |
Comprehensive income | ' | ' | ' | ' | ' | ' | ' | ' | $3,491 | $16,524 | $9,284 |
Consolidated_Statements_of_Cha
Consolidated Statements of Changes in Stockholders' Equity (USD $) | Total | Preferred Stock | Common Stock | Additional Paid-In Capital | Retained Earnings/(Accumulated Deficit) | Accumulated Other Comprehensive Income/(loss) | Series A senior preferred stock | Series A senior preferred stock | Series A senior preferred stock | Series A senior preferred stock |
In Thousands, except Share data, unless otherwise specified | Preferred Stock | Additional Paid-In Capital | Retained Earnings/(Accumulated Deficit) | |||||||
Balance at Dec. 31, 2010 | $121,256 | $23,396 | $101,140 | $7,002 | ($9,161) | ($1,121) | ' | ' | ' | ' |
Balance (in shares) at Dec. 31, 2010 | ' | ' | 25,082,344 | ' | ' | ' | ' | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accretion on Series A preferred stock discount | ' | ' | ' | ' | ' | ' | ' | 368 | ' | -368 |
Declared dividends on preferred stock | -990 | ' | ' | ' | -990 | ' | ' | ' | ' | ' |
Share-based compensation expense | 299 | ' | ' | 299 | ' | ' | ' | ' | ' | ' |
Tax impact of share-based compensation expense | -276 | ' | ' | -276 | ' | ' | ' | ' | ' | ' |
Issuance of restricted share awards (in shares) | ' | ' | 63,898 | ' | ' | ' | ' | ' | ' | ' |
Retirement of restricted share awards | -19 | ' | ' | -19 | ' | ' | ' | ' | ' | ' |
Retirement of restricted share awards (in shares) | ' | ' | -525 | ' | ' | ' | ' | ' | ' | ' |
Net Income | 7,725 | ' | ' | ' | 7,725 | ' | ' | ' | ' | ' |
Other comprehensive income | 1,559 | ' | ' | ' | ' | 1,559 | ' | ' | ' | ' |
Balance at Dec. 31, 2011 | 129,554 | 23,764 | 101,140 | 7,006 | -2,794 | 438 | ' | ' | ' | ' |
Balance (in shares) at Dec. 31, 2011 | ' | ' | 25,145,717 | ' | ' | ' | ' | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accretion on Series A preferred stock discount | ' | ' | ' | ' | ' | ' | ' | 376 | ' | -376 |
Dividends declared and paid on preferred stock | -1,094 | ' | ' | ' | -1,094 | ' | ' | ' | ' | ' |
Exercise of stock options | 183 | ' | 183 | ' | ' | ' | ' | ' | ' | ' |
Exercise of stock options (in shares) | ' | ' | 56,056 | ' | ' | ' | ' | ' | ' | ' |
Share-based compensation expense | 331 | ' | ' | 331 | ' | ' | ' | ' | ' | ' |
Tax impact of share-based compensation expense | 31 | ' | 31 | ' | ' | ' | ' | ' | ' | ' |
Issuance of restricted share awards (in shares) | ' | ' | 112,137 | ' | ' | ' | ' | ' | ' | ' |
Forfeiture of restricted share awards (in shares) | ' | ' | -6,800 | ' | ' | ' | ' | ' | ' | ' |
Net Income | 13,037 | ' | ' | ' | 13,037 | ' | ' | ' | ' | ' |
Other comprehensive income | 3,487 | ' | ' | ' | ' | 3,487 | ' | ' | ' | ' |
Balance at Dec. 31, 2012 | 145,529 | 24,140 | 101,354 | 7,337 | 8,773 | 3,925 | ' | ' | ' | ' |
Balance (in shares) at Dec. 31, 2012 | ' | ' | 25,307,110 | ' | ' | ' | ' | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Repurchase of Series A preferred stock | -21,000 | ' | ' | ' | ' | ' | ' | -20,725 | -275 | ' |
Repurchase of warrants | -1,575 | ' | ' | -1,575 | ' | ' | ' | ' | ' | ' |
Accretion on Series A preferred stock discount | ' | ' | ' | ' | ' | ' | ' | 189 | ' | -189 |
Dividends declared and paid on preferred stock | -708 | ' | ' | ' | -708 | ' | ' | ' | ' | ' |
Exercise of stock options | 138 | ' | 138 | ' | ' | ' | ' | ' | ' | ' |
Exercise of stock options (in shares) | ' | ' | 33,757 | ' | ' | ' | ' | ' | ' | ' |
Share-based compensation expense | 533 | ' | ' | 533 | ' | ' | ' | ' | ' | ' |
Tax impact of share-based compensation expense | 19 | ' | 19 | ' | ' | ' | ' | ' | ' | ' |
Issuance of restricted share awards (in shares) | ' | ' | 72,786 | ' | ' | ' | ' | ' | ' | ' |
Forfeiture of restricted share awards (in shares) | ' | ' | -15,873 | ' | ' | ' | ' | ' | ' | ' |
Net Income | 10,841 | ' | ' | ' | 10,841 | ' | ' | ' | ' | ' |
Other comprehensive income | -7,350 | ' | ' | ' | ' | -7,350 | ' | ' | ' | ' |
Balance at Dec. 31, 2013 | $126,427 | $3,604 | $101,511 | $6,020 | $18,717 | ($3,425) | ' | ' | ' | ' |
Balance (in shares) at Dec. 31, 2013 | ' | ' | 25,397,780 | ' | ' | ' | ' | ' | ' | ' |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Cash flows from operating activities: | ' | ' | ' |
Net income | $10,841 | $13,037 | $7,725 |
Adjustments to reconcile net income to net cash provided by/(used in) operating activities: | ' | ' | ' |
Depreciation and amortization | 1,368 | 1,348 | 1,256 |
Provision for loan losses | ' | 7,681 | 6,063 |
Amortization of premiums / discounts on investment securities, net | 4,196 | 3,514 | 3,158 |
Amortization of intangible assets | 400 | 342 | 445 |
Share-based compensation expense | 533 | 331 | 299 |
Gain on sale of available for sale securities | -3,926 | -2,619 | -1,983 |
Loss on sale of property, premises and equipment | ' | 25 | ' |
Originations of loans held for sale | -139,075 | -189,748 | -145,031 |
Proceeds from sale of loans held for sale | 161,520 | 192,444 | 156,179 |
Gain on sale of loans held for sale | -2,282 | -3,298 | -2,281 |
Net increase in bank owned life insurance | -477 | -514 | -521 |
Decrease / (increase) in deferred tax asset | 5,448 | -540 | 3,348 |
Deferred tax assets valuation allowance adjustment | ' | -5,605 | -1,500 |
(Gain) / loss on sale of foreclosed collateral | ' | -199 | 543 |
Write-downs on other real estate owned | ' | 86 | 1,198 |
Tax impact of share based compensation expense | 19 | 31 | -295 |
Decrease / (increase) in other assets | 940 | -1,304 | -3,007 |
Increase / (decrease) in other liabilities | 196 | -3,324 | 1,026 |
Net cash provided by operating activities | 39,701 | 11,688 | 26,622 |
Cash flows from investing activities: | ' | ' | ' |
Purchase of securities, available for sale | -210,127 | -235,333 | -201,392 |
Sale of available for sale securities | 161,181 | 140,163 | 147,194 |
Maturities and calls of available for sale securities | 584 | 1,003 | 452 |
Proceeds from principal paydowns of available for sale securities | 46,490 | 48,497 | 42,094 |
(Purchase) / redemption of Federal Home Loan Bank stock | -164 | 110 | 495 |
Increase in loans, net | -140,932 | -55,498 | -6,861 |
Allowance for loan and lease loss recoveries | 1,767 | 2,356 | 2,397 |
Purchase of property, premises and equipment, net | -9,632 | -11,820 | -408 |
Proceeds from sale of property, premises and equipment | ' | 19 | ' |
Purchase of bank owned life insurance | ' | ' | -1,268 |
Surrender of bank owned life insurance | ' | ' | 797 |
Proceeds from sale of foreclosed collateral | 1,374 | 1,799 | 7,218 |
Maturity of interest bearing deposits | ' | ' | 99 |
Net cash received from acquisition of branch | ' | 25,985 | ' |
Net cash used in investing activities | -149,459 | -82,719 | -9,183 |
Cash flows from financing activities: | ' | ' | ' |
Increase / (decrease) in deposits, net | 103,025 | 58,085 | -11,998 |
Proceeds from Federal Home Loan Bank borrowing | 234,500 | 240,500 | 245,000 |
Repayments of Federal Home Loan Bank borrowing | -212,500 | -225,500 | -238,500 |
Proceeds from exercise of stock options | 138 | 183 | ' |
Preferred stock dividends paid | -708 | -3,013 | ' |
Retirement of Series A preferred stock and related warrants | -22,575 | ' | ' |
Net cash provided by / (used in) financing activities | 101,880 | 70,255 | -5,498 |
Net (decrease) / increase in cash and cash equivalents | -7,878 | -776 | 11,941 |
Cash and cash equivalents, beginning of year | 34,116 | 34,892 | 22,951 |
Cash and cash equivalents, end of year | 26,238 | 34,116 | 34,892 |
Cash Flow Information | ' | ' | ' |
Interest paid | 3,821 | 4,081 | 4,991 |
Income taxes paid | 2,100 | 4,835 | 2,645 |
Non-Cash Flow Information | ' | ' | ' |
Change in unrealized gain on available for sale securities | -12,489 | 5,925 | 2,649 |
Loans transferred to foreclosed collateral | 1,374 | 769 | 3,484 |
Loans transferred to held for sale | ' | ' | 19,806 |
Preferred stock dividends accrued not paid | ' | ' | 990 |
Accretion of preferred stock discount | $189 | $376 | $368 |
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 | ' |
Note 1. Summary of Significant Accounting Policies | |
The accounting and reporting policies of Heritage Oaks Bancorp (the “Company”) and subsidiaries conform to accounting principles generally accepted in the United States of America and to general practices within the banking industry. A summary of the Company’s significant accounting and reporting policies consistently applied in the preparation of the accompanying consolidated financial statements follows: | |
Principles of Consolidation | |
The consolidated financial statements include the Company and its wholly owned subsidiaries, Heritage Oaks Bank, (the “Bank”) and CCMS Systems, Inc. (an inactive entity). Inter-company balances and transactions have been eliminated. | |
Nature of Operations | |
The Bank, which is the Company’s sole operating subsidiary, operates branches within San Luis Obispo and Santa Barbara Counties and has a loan production office in Ventura County. The Bank offers traditional banking products such as checking, savings, money market account and certificates of deposit, as well as mortgage loans and commercial and consumer loans to customers who are predominately small to medium-sized businesses and individuals. As such, the Company is subject to a concentration risk associated with its banking operations in San Luis Obispo and Santa Barbara Counties, and to a lesser degree Ventura County. No one customer accounts for more than 10% of revenue or assets in any period presented and the Company has no assets nor does it generate any revenue from outside of the United States. While the chief decision-makers of the Company monitor the revenue streams of the various products and services, operations are managed and financial performance is evaluated on a Company-wide basis. Operating segments are aggregated into one as operating results for all segments are similar. Accordingly, all of the financial service operations are considered by management to be aggregated in one reportable operating segment. | |
Reclassifications | |
Certain amounts in the 2011 consolidated financial statements have been reclassified to conform to the 2012 and 2013 presentation. These reclassifications did not have any effect on the prior years’ reported net income or stockholders’ equity. | |
Investment in Non-Consolidated Subsidiary | |
The Company accounts for its investment in Heritage Oaks Capital Trust II, which was formed solely for the purpose of issuing trust preferred securities, as an unconsolidated subsidiary using the equity method of accounting, as the Company is not the primary beneficiary of the trust. | |
Use of Estimates in the Preparation of Consolidated Financial Statements | |
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | |
Estimates that are particularly susceptible to significant change relate to the determination of the allowance for loan losses, the valuation of real estate acquired through foreclosure, the carrying value of the Company’s deferred tax assets and estimates used in the determination of the fair value of certain financial instruments. | |
In connection with the determination of the allowance for loan losses and the value of foreclosed real estate, management obtains independent appraisals for significant properties. While management uses available information to recognize losses on loans and foreclosed real estate and collateral, future additions to the allowance may be necessary based on changes in local economic conditions. In addition, regulatory agencies, as an integral part of their examination process, periodically review the Company’s allowance for loan losses and foreclosed real estate. Such agencies may require the Company to recognize additions to the allowance based on their judgments about information available to them at the time of their examination. Because of these factors, it is reasonably possible that the allowance for loan losses and foreclosed real estate may change in future periods. See also Note 5. Allowance for Loan Losses, of these Consolidated Financial Statements. | |
The Company uses an estimate of its future earnings in determining if it is more likely than not that the carrying value of its deferred tax assets will be realized over the period they are expected to reverse. If based on all available evidence, the Company believes that a portion or all of its deferred tax assets will not be realized; a valuation allowance may be established. See also Note 7. Deferred Tax Assets and Income Taxes, of these consolidated financial statements. | |
The degree of judgment utilized in measuring the fair value of financial instruments generally correlates to the level of pricing observability. Financial instruments with readily available active quoted prices or for which fair value can be measured from actively quoted prices generally will have a higher degree of observable pricing and a lesser degree of judgment utilized in measuring fair value. Conversely, financial instruments rarely traded or not quoted will generally have little or no observable pricing and a higher degree of judgment is utilized in measuring the fair value of such instruments. Observable pricing is impacted by a number of factors, including the type of financial instrument, whether the financial instrument is new to the market and not yet established and the characteristics specific to the transaction. See also Note 2. Fair Value of Assets and Liabilities, of these consolidated financial statements. | |
Disclosure about Fair Value of Financial Instruments | |
The Company’s estimated fair value amounts have been determined by the Company using available market information and appropriate valuation methodologies. However, considerable judgment is required to develop the estimates of fair value. Accordingly, the estimates are not necessarily indicative of the amounts the Company could have realized in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. | |
Although management is not aware of any factors that would significantly affect the estimated fair value amounts, such amounts have not been comprehensively revalued for purposes of these consolidated financial statements since the balance sheet date and, therefore, current estimates of fair value may differ significantly from the amounts presented in the accompanying notes. | |
The Company determines the fair market values of financial instruments based on the fair value hierarchy established in U.S. GAAP. The fair value of a financial instrument is the amount at which the asset or obligation could be exchanged in a current transaction between willing parties, other than a forced or liquidation sale. Fair value estimates are made at a specific point in time based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the entire holdings or a particular financial instrument. Pursuant to U.S. GAAP, the Company is required to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Specifically, U.S. GAAP describes three levels of inputs that may be used to measure fair value, as outlined below: | |
Level 1 - Quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 1 assets and liabilities may include debt and equity securities that are traded in an active exchange market and that are highly liquid and are actively traded in over the counter markets. | |
Level 2 - Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | |
Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments the value for which is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. | |
The following methods and assumptions were used by the Company in estimating fair values of financial instruments. Many of these estimates are subjective in nature, involve uncertainties and matters of judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect these estimates. | |
Cash and Cash Equivalents | |
The carrying amounts reported in the balance sheet for cash and cash equivalents approximate the fair values of those assets due to the short-term nature of the assets. | |
Interest Bearing Deposits at Other Financial Institutions | |
The carrying amounts reported in the balance sheet for interest bearing deposits at other financial institutions approximates the fair value of these assets due to the short-term nature of the assets. | |
Investments in Securities Available for Sale | |
Fair values are based upon quoted market prices, where available. If quoted market prices are not available, fair values are extrapolated from the quoted prices of similar instruments or through the use of other observable data supported by a valuation model. The fair value of newly issued securities, for which there is not a sufficient history of market transactions on which to base a fair value determination under Level 1 or 2 of the hierarchy, are initially valued under Level 3 of the hierarchy. At such time that sufficient history of market transactions is established, the securities’ fair value is determined under Level 1 or 2 of the hierarchy and accordingly the security is transferred out of Level 3 and into the applicable level. | |
Federal Home Loan Bank Stock | |
The fair value of Federal Home Loan Bank stock is not readily determinable due to the lack of its transferability. | |
Loans, Loans Held for Sale, and Accrued Interest Receivable | |
For variable rate loans that re-price frequently and with no significant change in credit risk, fair values are based on carrying amounts. The fair values for other loans (for example, fixed rate loans and loans that possess a rate variable other than daily or that are at their floor rate) are estimated using discounted cash flow analysis, based on interest rates currently being offered for loans with similar terms to borrowers of similar credit quality. Loan fair value estimates include judgments regarding future expected loss experience and risk characteristics. | |
The fair value of loans held for sale is determined, when possible, using quoted secondary market prices. If no such quoted price exists, the fair value of the loan is determined using quoted prices for a similar asset or assets, adjusted for the specific attributes of that loan. The carrying amount of accrued interest receivable approximates its fair value. | |
Impaired Loans | |
A loan is considered impaired when it is probable that payment of interest and principal will not be made in accordance with the original contractual terms of the loan agreement. Impairment is measured based on the fair value of the underlying collateral, which is based on the appraised value of the collateral less any estimated costs to sell. As such, the Company records impaired loans as non-recurring Level 2 when the fair value of the underlying collateral is based on an observable market price or current appraised value. When current market prices are not available or the Company determines that the fair value of the underlying collateral is further impaired below appraised values based on Company specific experience with similar collateral, the Company records impaired loans as non-recurring Level 3. At December 31, 2013, a majority of the Company’s impaired loans were evaluated based on the fair value of their underlying collateral as determined by the most recent appraisal available to management. | |
Other Real Estate Owned and Foreclosed Collateral | |
Other real estate owned and foreclosed collateral are adjusted to fair value, less any estimated costs to sell, at the time the loans are transferred into this category. The fair value of these assets is based on independent appraisals, observable market prices for similar assets, or management’s estimation of value. When the fair value is based on independent appraisals or observable market prices for similar assets, the Company records other real estate owned or foreclosed collateral as non-recurring Level 2 assets. When appraised values are not available, there is no observable market price for similar assets, or management determines the fair value of the asset is further impaired below appraised values or observable market prices based on Company specific experience with similar assets, the Company records other real estate owned or foreclosed collateral as non-recurring Level 3 assets. The most common adjustment to reported appraised values of collateral is a monthly discount linked to the passage of time since the last appraisal. This discount factor ranges between 1% and 3% per month and is consistent with that used in the appraisals to discount for the passage of time between the transaction date for comparable properties used in the appraisal and the appraisal date. | |
Federal Home Loan Bank Advances | |
The fair value disclosed for FHLB advances is determined by discounting contractual cash flows at current market interest rates for similar instruments. | |
Non-Interest Bearing Deposits | |
The fair values disclosed for non-interest bearing deposits are, by definition, equal to the amount payable on demand at the reporting date (that is, their carrying amounts). | |
Interest Bearing Deposits and Accrued Interest Payable | |
The fair values disclosed for interest bearing deposits (for example, interest-bearing checking accounts and passbook accounts) are, by definition, equal to the amount payable on demand at the reporting date (that is, their carrying amounts). The fair values for certificates of deposit are estimated using a discounted cash flow analysis that applies interest rates currently being offered on certificates to a schedule of aggregated contractual maturities on such time deposits. The carrying amount of accrued interest payable approximates its fair value. | |
Junior Subordinated Debentures | |
The fair value disclosed for junior subordinated debentures is based on market prices of similar instruments issued with similar contractual terms and by issuers with a similar credit profile as the Company. | |
Off-Balance Sheet Instruments | |
Fair values of commitments to extend credit and standby letters of credit are based upon fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreement and the counterparties’ credit standing. | |
Recent Accounting Pronouncements | |
Recent Accounting Guidance Adopted | |
On July 27, 2012, the FASB issued ASU No. 2012-02, Intangibles-Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment. This update, like ASU 2011-08 which the Company adopted in 2011, allows companies the option to first evaluate qualitative factors to determine if events or circumstances exist that indicate that it is more likely than not that an indefinite-lived intangible asset is impaired. If based on this assessment, a company concludes that there are no indicators that suggest an indefinitely-lived asset is more likely than not of having been impaired, then no further quantitative analysis is required. The amendments are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted, including for annual and interim impairment tests performed as of a date before July 27, 2012, if a public entity’s financial statements for the most recent annual or interim period have not yet been issued or, for nonpublic entities, have not yet been made available for issuance. The Company currently does not have any indefinite-lived intangible assets, other than goodwill, therefore adoption of this ASU did not have a material impact on the Company’s consolidated financial statements. | |
On October 1, 2012, the FASB issued ASU No. 2012-04, Technical Corrections and Improvements. The amendments in ASU 2012-04 cover a wide range of Topics in the Codification and address technical corrections and improvements and conforming amendments related to fair value measurements. For public entities, the amendments that are subject to the transition guidance are effective for fiscal periods beginning after December 15, 2012. Adoption of this ASU did not have a material impact on the Company’s consolidated financial statements. | |
On February 15, 2013, the FASB issued ASU No. 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. The update requires companies to present either in a single note or parenthetically on the face of the financial statements, the effect of significant amounts of reclassifications from each component of accumulated other comprehensive income based on its source and the income statement lines affected by the reclassification. For public entities, the amendments that are subject to the transition guidance are effective for fiscal periods beginning after December 15, 2012. Adoption of this ASU did not have a material impact on the Company’s consolidated financial statements. | |
Recent Accounting Guidance Not Yet Effective | |
On January 17, 2014, the FASB issued ASU No 2014 – 04, Receivables – Troubled Debt Restructurings by Creditors. This ASU provides clarification that an in substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, upon either (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (2) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. Additionally, the amendments require interim and annual disclosure of both (1) the amount of foreclosed residential real estate property held by the creditor and (2) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction. The amendments in this ASU are effective for public business entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2014. The Company is currently evaluating the impact of this amendment on the consolidated financial statements. | |
Cash and Cash Equivalents | |
Banking regulations require that all banks maintain a percentage of their deposits as reserves in cash or on deposit with the Federal Reserve Bank. In management’s opinion, the Bank is in compliance with the reserve requirements as of December 31, 2013. The Company maintains amounts due from banks that exceed federally insured limits. Historically the Company has not experienced any losses in such accounts. For purposes of reporting cash flows, cash and cash equivalents include cash and due from banks. Generally, interest bearing balances due from banks represent excess liquidity that the Company and/or Bank invests through other institutions overnight. | |
Investment Securities Available for Sale | |
The Company’s investment securities are classified as available for sale and are measured at fair value, with changes in unrealized gains and losses, net of applicable taxes, reported as a separate component of stockholders’ equity. The fair values of most securities that are designated available for sale are based on quoted market prices. If quoted market prices are not available, fair values are extrapolated from the quoted prices of similar instruments or through the use of other observable data supporting a valuation model. Gains or losses on sales of investment securities are determined on the specific identification method and recorded as a component of non-interest income. Premiums and discounts are amortized or accreted using the interest method over the expected lives of the related securities and recognized in interest income. | |
Other than Temporary Impairment (“OTTI”) | |
The Company periodically evaluates investments in the portfolio for other than temporary impairment and more specifically when conditions warrant such an evaluation. When evaluating whether impairment is other than temporary, the Company considers, among other things, the following: (1) the length of time the security has been in an unrealized loss position, (2) the extent to which the security’s fair value is less than its cost, (3) the financial condition of the issuer, (4) any adverse changes in ratings issued by various rating agencies, (5) the intent and ability of the Company to hold such securities for a period of time sufficient to allow for any anticipated recovery in fair value and (6) in the case of mortgage related securities, credit enhancements, loan-to-values, credit scores, delinquency and default rates, cash flows and the extent to which those cash flows are within management’s initial expectations based on pre-purchase analyses. | |
When an investment is deemed to be other than temporarily impaired, the Company is required to assess whether it has the intent to sell the investment, or if it is more likely than not that it will be required to sell the investment before its anticipated recovery of its full basis in the security. If the Company does not intend, nor anticipates it will be required to sell the investment, it must still perform an evaluation of future cash flows it expects to receive from the investment to determine if a credit loss has occurred. The evaluation includes future cash flows from the investment the Company expects to collect, based on an assessment of all available information about the applicable investment. The Company considers such factors as: the structure of the security and the Company’s position within that structure, the remaining payment terms for the security, prepayment speeds, default rates, loss severity on the collateral supporting the security, expected changes in real estate prices, and assumptions regarding interest rates, to determine whether the Company will recover the remaining amortized cost basis of the security. In the event that a credit loss has been projected to have occurred, only the amount of impairment related to the credit loss is recognized through earnings. OTTI amounts related to all other factors, such as market conditions, are recorded as a component of accumulated other comprehensive income. On a quarterly basis the Company, with the assistance of an independent third party, performs an updated evaluation on all securities for which OTTI was previously recognized. | |
The presentation of OTTI losses are made in the consolidated statements of income on a gross basis (the total amount by which the investment’s amortized cost basis exceeds its fair value at the time it was evaluated for OTTI) with an offset for the amount of OTTI recognized in other comprehensive income (OTTI related to all other factors such as market conditions). The net charge to earnings, referred to as credit related losses, reflects the portion of the impaired investment the Company estimates it will no longer recover. | |
Federal Home Loan Bank Stock | |
The Bank is a member of the Federal Home Loan Bank (“FHLB”) and as a condition of membership, the Bank is required to purchase stock in the FHLB. The required ownership of FHLB stock is based on the level of borrowing the Bank has obtained from the FHLB. FHLB stock is carried at cost, classified as a restricted security, and periodically evaluated for impairment based on ultimate recovery of par value. There have been no events that would suggest that an impairment in the carrying value of the stock has occurred as of December 31, 2013. Dividends received on the FHLB stock are reported as a component of interest income. | |
Loans Held for Sale | |
Loans held for sale are carried at the lower of aggregate cost or fair value, which is determined by the specified value in the sales contract with the third party buyer. Net unrealized losses, if any, are recognized through a valuation allowance by charges to expense. | |
Loans Held for Investment | |
Loans receivable that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at their outstanding unpaid principal balances reduced by any charge-offs of specific valuation allowances and net of any deferred fees or costs on originated loans, or unamortized premiums or discounts on purchased loans. Nonrefundable fees and certain costs associated with originating or acquiring loans are deferred and amortized as an adjustment to interest income over the contractual lives of the loan. Upon prepayment, unamortized loan fees, net of costs, are immediately recognized in interest income. Other fees, including those collected upon principal prepayments, are included in interest income when received. | |
Loans on which the accrual of interest has been discontinued are designated as non-accruing loans. The accrual of interest on loans is discontinued when principal and/or interest is past due 90 days based on contractual terms of the loan and/or when, in the opinion of management, there is reasonable doubt as to collectability unless such loans are well collateralized and in the process of collection. This policy is consistently applied to all portfolio segments. When loans are placed on non-accrual status, all interest previously accrued, but not collected, is reversed against current period interest income. Interest income generally is not recognized on specific non-accruing loans unless the likelihood of further loss is remote. Interest payments received on such loans are generally applied as a reduction to the loan principal balance. Interest accruals are resumed on such loans only when they are brought current with respect to interest and principal and when, in the judgment of management, all remaining principal and interest is estimated to be fully collectable, there has been at least six months of sustained repayment performance since the loan was placed on non-accrual status and/or management believes, based on current information, that such loan is no longer impaired. When a loan is returned to accrual status from non-accrual status, the interest that had been accumulated while on non-accrual status is not recognized until such time as the loan is repaid in full. | |
The Company considers a loan to be impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. Measurement of impairment is based on the expected future cash flows of an impaired loan which are discounted at the loan’s original effective interest rate, or measured by reference to an observable market value, if one exists, or the fair value of the collateral for a collateral-dependent loan. The Company selects the measurement method on a loan-by-loan basis except that collateral-dependent loans for which foreclosure is probable are measured at the fair value of the collateral. The Company recognizes interest income on impaired loans based on its existing methods of recognizing interest income on non-accrual loans. All loans are generally charged-off, either partially or fully, at such time that it is highly certain a loss has been realized. | |
Credit Quality and Credit Risk Management | |
The Company manages credit risk not only through extensive risk analyses performed prior to a loan’s funding, but also through the ongoing monitoring of loans within the portfolio, and more specifically certain types of loans that generally involve a greater degree of risk, such as commercial real estate, commercial lines of credit, and construction/land loans. The Company monitors loans in the portfolio through an exhaustive internal process, at least quarterly, as well as with the assistance of independent loan reviews. These reviews generally not only focus on problem loans, but also “pass” credits within certain pools of loans that may be expected to experience stress due to economic conditions. | |
This process allows the Company to validate credit risk grade ratings, underwriting structure, and the Company’s estimated exposure in the current economic environment as well as enhance communications with borrowers where necessary in an effort to mitigate potential future losses. | |
The Company conducts an analysis on all significant problem loans at least quarterly, in order to properly estimate its potential exposure to loss associated with such credits in a timely manner. Pursuant to the Company’s lending policy, all loans in the portfolio are assigned a risk grade rating, which allows management, among other things, to identify the risk associated with each credit in the portfolio, and to provide a basis for estimating credit losses inherent in the portfolio. Risk grades are generally assigned based on information concerning the borrower and the strength of the collateral. Risk grades are reviewed regularly by the Company’s credit committee and are scrutinized by independent loan reviews performed semi-annually, as well as by regulatory agencies during scheduled examinations. In the second quarter of 2012, the Company implemented a more detailed risk grading system that provided for a more granular break down of loans within the Company’s four primary credit risk grade ratings, discussed below. | |
The following provides brief definitions for credit risk grade ratings assigned to loans in the portfolio: | |
· Pass – strong credit quality with adequate collateral or secondary source of repayment and little existing or known weaknesses. However, pass may include credits with exposure to certain potential factors that may adversely impact the credit, if they materialize, resulting in these credits being put on a watch list to monitor more closely than other pass rated credits. Such factors may be credit / relationship specific or general to an entire industry. | |
· Special Mention – credits that have potential weaknesses that deserve management’s close attention. If not corrected, these potential weaknesses may result in deterioration of the repayment prospects for the credit at some future date. | |
· Substandard – credits that have a defined weakness or weaknesses which may jeopardize the orderly liquidation of the loan through cash flows, making it likely that repayment may have to come from some other source, such as the liquidation of collateral. The Company is more likely to incur losses on substandard credits if the weakness or weaknesses identified in the credit are not corrected. | |
· Doubtful – credits that possess the characteristics of a substandard credit, but because of certain existing deficiencies related to the credit, full collection is highly questionable. The probability of incurring some loss on such credits is high, but because of certain important and reasonably specific pending factors which may work to the advantage of strengthening the credit, charge-off is deferred until such time the Company becomes reasonably certain that certain pending factors related to the credit will no longer provide some form of benefit. | |
Loans typically move to non-accrual status from the Company’s substandard risk grade. When a loan is first classified as substandard, the Company obtains financial information (appraisal or cash flow information) in order to determine if any evidence of impairment exists. If based on an assessment of all available information related to the loan it is determined that the loan is impaired, the Company obtains updated appraisal information on the underlying collateral for collateral dependent loans and updated cash-flow information if the loan is unsecured or primarily dependent on future operating or other cash flows. Once the updated financial information is obtained and analyzed by management, a valuation allowance, if necessary, is established against such loan or a loss is recognized by a charge to the allowance for loan losses, if management believes that the full amount of the Company’s recorded investment in the loan is no longer collectable. Therefore, at the time a loan moves into non-accruing status, a valuation allowance typically has already been established or balances deemed uncollectable on such loan have been charged-off. If upon a loan’s migration to non-accruing status, the financial information obtained while the loan was classified as substandard are deemed to be outdated, the Company typically orders new appraisals on underlying collateral or obtains the most recent cash-flow information in order to have the most current indication of fair value. For collateral dependent loans, if a complete appraisal is expected to take a significant amount of time to complete, the Company may also rely on a broker’s price opinion or other meaningful market data, such as comparable sales, in order to derive its best estimate of a property’s fair value, while waiting for an appraisal at the time of the decision to classify the loan as substandard and/or non-accruing. An analysis of the underlying collateral is performed for loans on non-accrual status at least quarterly and new appraisals are typically received at least annually. Corresponding changes in any related valuation allowance are made or balances deemed to be fully uncollectable are charged-off. Cash-flow information for impaired loans dependent primarily on future operating or other cash-flows are updated quarterly as well, with subsequent shortfalls resulting in valuation allowance adjustments. | |
The Company typically moves to charge-off loan balances when, based on various evidence, it believes those balances are no longer collectable. Such evidence may include updated information related to a borrower’s financial condition or updated information related to collateral securing such loans. Such loans are generally monitored internally on a regular basis by the Special Assets department, which is responsible for obtaining updated periodic appraisal information for collateral securing problem loans as well as updated cash-flow information. If a loan’s credit quality deteriorates to the point that collection of principal through traditional means is believed by management to be doubtful, and management determines there is value in the collateral securing the obligation, the Company generally takes steps to protect and liquidate the collateral. Any loss resulting from the difference between the Company’s recorded investment in the loan and the fair market value of the collateral obtained through repossession is recognized by a charge to the allowance for loan losses. In those cases where management has determined that it is in the best interest of the Bank to attempt to broker a troubled loan rather than to continue to hold it in its portfolio, additional charge-offs have been realized as distressed loan buyers that typically purchase these types of loans tend to require a higher rate of return than would be built into the Company’s traditional hold to maturity model, resulting in the sales price for these loans being less than the adjusted carrying cost. | |
Allowance for Loan Losses | |
The allowance for loan losses is maintained at a level which, in management’s judgment, is adequate to absorb probable credit losses inherent in the loan portfolio as of the balance sheet date. The amount of the allowance is based on management’s evaluation of the collectability of the loan portfolio, including the nature and volume of the portfolio, credit concentrations, trends in historical loss experience, the level of certain classified balances and specific impaired loans, and economic conditions and the related impact on specific borrowers and industry groups. The allowance is increased by provisions for loan losses, which are charged to earnings and reduced by charge-offs, net of recoveries. Changes in the allowance relating to impaired loans, including troubled debt restructurings (“TDRs”), are charged or credited to the provision for loan losses. Because of uncertainties inherent in the estimation process, management’s estimate of probable credit losses inherent in the loan portfolio and the related allowance may change. | |
The allowance, as more fully described below, is comprised of two components: specific loan reserves and general reserves, which includes a qualitatively determined amount. | |
Specific Loan Reserves - The specific reserve component of the allowance is determined through the measurement of impairment on certain loans that have been identified during each reporting period as impaired. | |
In certain instances the Company may work with the borrower to modify the terms of the loan agreement or otherwise restructure the loan in a way that would allow the borrower to continue to perform under the modified terms of the loan agreement. In those instances where modifications are made to loans, for which the borrower is experiencing financial difficulty and the Company has granted the borrower a concession that it would not have otherwise considered, the modifications constitute a TDR. The Company’s policy for monitoring loan modifications for potential TDRs is focused on loans risk graded as special mention, substandard or doubtful. TDRs are considered impaired and require the Company to measure the amount of impairment, if any, at the time the loan is restructured. | |
A comprehensive analysis of impaired loans is performed, including obtaining updated financial information regarding the borrower, including updated cash flow information on the borrower, obtaining updated appraisals on any collateral securing such loans and ultimately determining the extent to which such loans are impaired. In measuring the fair value of the collateral, management uses assumptions and methodologies consistent with those that would be utilized by third party valuation experts. Once the amount of impairment on specific impaired loans has been determined, the Company establishes a corresponding valuation allowance which then becomes a component of the Company’s specific credit allocation in the allowance for loan losses. | |
General Reserves - The general reserve component of the allowance for loans that are not impaired is determined through a two-step process. First a quantitative allocation is determined by pooling performing loans by collateral type and purpose, such as the stratification presented in Note 4. Loans, of these Consolidated Financial Statements. These loans are then further segmented by an internal loan grading system that classifies loans as: pass, special mention, substandard and doubtful. Estimated loss rates are then applied to each segment according to loan grade to determine the amount of the general portfolio allocation. Estimated loss rates are determined through an analysis of historical loss rates for each segment of the loan portfolio, based on the Company’s prior experience with such loans. | |
The quantitative allocation is then combined with a qualitatively determined allocation of the allowance to form the general reserve component of the allowance for loan loss. The qualitative allocation is determined by estimates the Company makes in regard to certain internal and external factors that may have either a positive or negative impact on the overall losses expected in the loan portfolio. Internal factors include trends in credit quality of the loan portfolio, the existence and the effects of concentrations, the composition and volume of the loan portfolio and the scope and frequency of the loan review process as well as any other factor determined by management to have an impact on the credit quality of the loan portfolio. External factors include local, state and national economic and business conditions. While management regularly reviews the estimated impact these internal and external factors are expected to have on the loan portfolio, there can be no assurance that an adverse change in any one or combination of these factors will not be in excess of management’s expectations. | |
The determination of the amount of the allowance and any corresponding increase or decrease in the level of provisions for loan losses is based on management’s best estimate of probable credit losses as of the balance sheet date. The nature of the process in which management determines the appropriate level of the allowance involves the exercise of considerable judgment and the use of estimates. While management utilizes its best judgment and all available information in determining the adequacy of the allowance, the ultimate adequacy of the allowance is dependent upon a variety of factors beyond the Company’s control, including but not limited to, the performance of the loan portfolio, changes in current and future economic conditions and the view of regulatory agencies regarding the level of classified assets. Weakness in economic conditions and any other factor that may adversely affect credit quality, result in higher levels of past due and non-accruing loans, defaults, and additional loan charge-offs, which may require additional provisions for loan losses in future periods and a higher balance in the Company’s allowance for loan losses. | |
Each segment of loans in the portfolio possess varying degrees of risk, based on, among other things, the type of loan being made, the purpose of the loan, the type of collateral securing the loan, and the sensitivity the borrower has to changes in certain external factors such as economic conditions. The following provides a summary of the risks associated with various segments of the Company’s loan portfolio, which are factors management regularly considers when evaluating the adequacy of the allowance: | |
· Real estate secured – consist primarily of loans secured by commercial real estate, multi-family, farmland, and 1 to 4 family residential properties. Also included in this segment are equity lines of credit secured by real estate. As the majority of this segment is comprised of commercial real estate loans, risks associated with this segment lie primarily within that loan type. Adverse economic conditions may result in a decline in business activity and increased vacancy rates for commercial properties. These factors, in conjunction with a decline in real estate prices, may expose the Company to the potential for losses if a borrower cannot continue to service the loan with operating revenues, and the value of the property has declined to a level such that it no longer fully covers the Company’s recorded investment in the loan. | |
· Commercial and Industrial – consist primarily of commercial and industrial loans (business lines of credit), agriculture loans, and other commercial purpose loans. Repayment of commercial and industrial loans is generally provided from the cash flows of the related business to which the loan was made. Adverse changes in economic conditions may result in a decline in business activity, which can impact a borrower’s ability to continue to make scheduled payments. The risk of repayment of agriculture loans arises largely from factors beyond the control of the Company or the related borrower, such as commodity prices and weather conditions. | |
· Construction / Land segments – although construction and land loans generally possess a higher inherent risk of loss than other portfolio segments, improvements in the mix, collateral and nature of loans in this segment have resulted in an improvement in the risk profile of this segment of the portfolio. Risk arises from the necessity to complete projects within specified cost and time limits. Trends in the construction industry may also impact the credit quality of these loans, as demand drives construction activity. In addition, trends in real estate values significantly impact the credit quality of these loans, as property values determine the economic viability of future construction projects. | |
· Installment – the installment loan portfolio is comprised primarily of a large number of small loans with scheduled amortization over a specific period. The majority of installment loans are made for consumer and business purchases. Weakened economic conditions may result in an increased level of delinquencies within this segment, as economic pressures may impact the capacity of such borrowers to repay their obligations. | |
As mentioned, changes in the financial condition of individual borrowers, economic conditions, historical loss experience and the condition of the various markets in which collateral may be sold may all affect the required level of the allowance for loan losses and the associated provision for loan losses. See also Note 4. Loans and Note 5. Allowance for Loan Losses, of these Consolidated Financial Statements, for additional discussion concerning credit quality and the allowance for loan losses. | |
Loan Charge-offs | |
Loan balances are charged-off when the loan becomes 90 days past due, unless it is well secured and/or in the process of collection. This charge-off policy is consistently applied to all portfolio segments. The Company may defer charge-off on a loan, due to certain factors the Company has identified that may work to its benefit in minimizing potential losses. Those factors may include: working with the borrower to restructure their obligation to the Company in an effort to bring about a more favorable outcome, the identification of an additional source of repayment, sufficient collateral to cover the Company’s recorded investment in the loan, or any other identified factor that may work to strengthen the credit and reduce the potential for loss. | |
For most real estate and commercial loans, the Company generally recognizes a charge-off to bring the carrying balance of the loan down to the estimated fair value of the underlying collateral or some other determination of fair value when: (i) management determines that the asset is no longer collectable, (ii) repayment prospects for the credit have become unclear and/or are likely to occur over a time-frame the Company deems to be no longer reasonable, (iii) the loan or portion of the loan has been deemed a loss by the Company’s internal review and/or independent review functions, or has been deemed a loss by regulatory examiners, (iv) the borrower has or is in the process of filing for bankruptcy. | |
Appraisals for Loans Secured by Real Estate Collateral | |
For loan commitments greater than $0.5 million and a remaining term greater than one year at the loan’s anniversary date, the Bank has a policy to perform an annual review of the borrower’s financial condition and of any real estate securing the loan. This review includes, among other things, a physical inspection of the real estate securing the loan, an analysis of any related rent rolls, an analysis of all borrower and guarantor tax returns and financial statements. This information is used internally by the Bank to validate all covenants and the risk grade assigned to the loan. If during the review process the Bank learns of additional information that would suggest that the borrower’s ability to repay has deteriorated since the original underwriting of the loan, and repayment may now be dependent on liquidation of the collateral, an additional independent appraisal of the collateral is requested. If based on the updated appraisal information it is determined the value of the collateral is impaired and the Bank no longer expects to collect all previously determined amounts related to the loan as stipulated in the loan’s original agreement, the Bank typically moves to establish a valuation allowance for such loans or charge-off such differences. | |
In general, once a loan is deemed to be impaired and/or the loan was downgraded to substandard status, the loan becomes the responsibility of the Bank’s Special Assets department, which provides more diligent oversight of problem credits. This oversight includes, among other things, a review of all previous appraisals of collateral securing such loans and determining in the Bank’s best judgment if those appraisals still represent the current fair value of the loan. Additional appraisals may be ordered at this time and annually thereafter, if deemed necessary. | |
Premises and Equipment | |
Land is carried at cost. Premises and equipment are carried at cost less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives, which range from three to ten years for furniture and fixtures and thirty years for buildings. Leasehold improvements are amortized using the straight-line method over the estimated useful lives of the improvements or the remaining lease term, whichever is shorter. Expenditures for improvements or major repairs are capitalized and those for ordinary repairs and maintenance are charged to expense as incurred. | |
Deferred Tax Asset and Income Taxes | |
Income taxes reported in the consolidated financial statements are computed based on an asset and liability approach. We recognize the amount of taxes payable or refundable for the current year, and deferred tax assets and liabilities for the future tax consequences that have been recognized in the financial statement or tax returns. The measurement of tax assets and liabilities is based on the provisions of enacted tax laws. The Company files consolidated federal and combined state income tax returns. A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. Interest expense and penalties associated with unrecognized tax benefits, if any, are classified as income tax expense in the consolidated statements of operations. | |
Deferred income taxes reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax reporting purposes. Deferred tax assets are recognized subject to management’s judgment that realization is more likely than not. In making the determination whether a deferred tax asset is more likely than not to be realized, management performs a quarterly evaluation of all available positive and negative evidence including the possibility of future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial results. A deferred tax asset valuation allowance is established to reduce the net carrying amount of deferred tax assets if it is determined to be more likely than not that all or some portion of the deferred tax asset will not be realized. See also Note 7. Deferred Tax Assets and Income Taxes, of these consolidated financial statements for additional information related to deferred income taxes. | |
Bank Owned Life Insurance | |
The Company has purchased life insurance policies on certain employees. These Bank Owned Life Insurance (“BOLI”) policies are recorded in the consolidated balance sheets at their cash surrender value. Income and expense from these policies and changes in the cash surrender value are recorded in non-interest income and non-interest expense in the consolidated statements of income. | |
Goodwill and Other Intangible Assets | |
Intangible assets are comprised of goodwill, core deposit intangibles and other identifiable intangibles acquired in business combinations. Intangible assets with definite useful lives are amortized over their respective estimated useful lives. If an event occurs that indicates the carrying amount of an intangible asset may not be recoverable, management reviews the asset for impairment. Any goodwill and any intangible asset acquired in a purchase business combination determined to have an indefinite useful life is not amortized, but is at least annually evaluated for impairment. | |
The Company applies a qualitative analysis of conditions that might indicate that impairment of goodwill is more likely than not of having occurred. In the event that the qualitative analysis suggests that an impairment may have occurred, the Company, with the assistance of an independent third party valuation firm, uses several quantitative valuation methodologies in evaluating goodwill for impairment including a discounted cash flow approach that includes assumptions made concerning the future earnings potential of the organization, and a market-based approach that looks at values for organizations of comparable size, structure and business model. The current year’s review of qualitative factors did not indicate that an impairment might have occurred, as such no quantitative analysis was performed at December 31, 2013. The most recent such quantitative valuation was completed as of December 31, 2010 and no impairment was noted as a result of the exercise. | |
Other Real Estate Owned | |
Real estate and other property acquired in full or partial settlement of loan obligations is referred to as other real estate owned (“OREO”). OREO is originally recorded in the Company’s consolidated financial statements at fair value less any estimated costs to sell. When property is acquired through foreclosure or surrendered in lieu of foreclosure, the Company measures the fair value of the property acquired against its recorded investment in the loan. If the fair value of the property at the time of acquisition is less than the recorded investment in the loan, the difference is charged to the allowance for loan losses. Any subsequent declines in the fair value of OREO are recorded against a valuation allowance for foreclosed assets, established through a charge to non-interest expense. All related operating or maintenance costs are charged to non-interest expense as incurred. Any subsequent gains or losses on the sale of OREO are recorded in other income. | |
Federal Home Loan Bank (“FHLB”) Borrowings | |
The Company may borrow from the FHLB at competitive rates, which typically approximate the London Inter-Bank Offered Rate (“LIBOR”) for the equivalent term because they are secured with investments in high quality loans. Interest is accrued on a monthly basis based on the outstanding borrowing’s interest rate and is included in interest expense on other borrowings | |
Reserve for Off-Balance Sheet Commitments | |
The Company has exposure to losses from unfunded loan commitments and letters of credit. Since the funds have not been disbursed on these commitments, they are not reported as loans outstanding. Estimated losses related to these commitments are not included in the allowance for loan losses reported in Note 5. Allowance for Loan Losses, of these Consolidated Financial Statements. Instead they are accounted for as a separate loss contingency reserve within other liabilities on the Company’s Consolidated Balance Sheets and related adjustments to this reserve are as a charge to earnings included in other non-interest expense on the Consolidated Statements of Income. Losses are experienced when the Company is contractually obligated to make a payment under these instruments and must seek repayment from a party that may not be as financially sound in the current period as it was when the commitment was originally made. | |
Salary Continuation Plan Agreements | |
The Company has entered into salary continuation plan agreements with certain executive and senior officers. The measurement of the liability under these agreements is estimated using a discounted cash flow model, which includes estimates involving life expectancy, length of time before retirement, estimated long-term discount rates based on the Bank’s long-term borrowing rates at the time the agreement is executed and expected benefit levels. Should these estimates vary substantially from actual events, the level of expense recognized in the future to provide these benefits could materially vary. | |
Comprehensive Income | |
Changes in the unrealized gain / (loss) on available for sale securities net of income taxes was the only component of accumulated other comprehensive income for the Company for the years ended December 31, 2013, 2012 and 2011. | |
Share-Based Compensation | |
The Company grants incentive and non-qualified stock options, as well as restricted stock to directors and employees as a form of compensation. U.S. GAAP requires companies to recognize in the income statement the grant-date fair value of stock options and other equity-based forms of compensation issued to employees over the employees’ requisite service period (generally the vesting period). The Company uses a straight-line method for the recognition of all share-based compensation expense. | |
The amount of compensation expense to be recognized for options is based on the fair value of the options, utilizing a Black-Scholes option pricing model, at the date of the grant. The fair value for option grants is estimated based on the length of their term, the volatility of the stock price in past periods, and other factors. See also Note 14. Share-Based Compensation Plans, of these consolidated financial statements for additional information related to share-based compensation. | |
A valuation model is not used for pricing restricted stock because the value is based on the closing price of the Company’s stock on the grant date. The amount of expense to be recognized for restricted stock grants is calculated as the number of shares granted multiplied by the stock price. The employee receives any dividends paid on the stock from the time of grant, but receives the restricted stock only when the vesting period has lapsed. | |
Earnings / (Loss) Per Share | |
Basic earnings / (loss) per share (“EPS”) excludes dilution and is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS includes the effect of dilutive common stock equivalents that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. Diluted earnings per share also includes common stock equivalents related to the weighted average impact of the Series C Preferred Stock on an if-converted basis. In accordance with U.S. GAAP, when the Company’s net income available to common stockholders is in a loss position, the diluted earnings per share calculation excludes common stock equivalents, as their effect would be anti-dilutive. | |
Loss Contingencies | |
Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Legal costs incurred to defend such matters are expensed as incurred. Management does not believe there now are such matters that will have a material effect on the consolidated financial statements. | |
Fair_Value_of_Assets_and_Liabi
Fair Value of Assets and Liabilities | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||
Fair Value of Assets and Liabilities | ' | |||||||||||||||||||
Fair Value of Assets and Liabilities | ' | |||||||||||||||||||
Note 2. Fair Value of Assets and Liabilities | ||||||||||||||||||||
Recurring Basis | ||||||||||||||||||||
The following table provides a summary of the financial instruments the Company measures at fair value on a recurring basis as of December 31, 2013 and 2012: | ||||||||||||||||||||
Fair Value Measurements Using | ||||||||||||||||||||
Quoted Prices in | Significant Other | Significant | ||||||||||||||||||
Active Markets for | Observable | Unobservable | ||||||||||||||||||
(dollar amounts in thousands) | Identical Assets | Inputs | Inputs | Assets At | ||||||||||||||||
As of December 31, 2013 | (Level 1) | (Level 2) | (Level 3) | Fair Value | ||||||||||||||||
Assets | ||||||||||||||||||||
Obligations of U.S. government agencies | $ | - | $ | 6,208 | $ | - | $ | 6,208 | ||||||||||||
Mortgage backed securities: | ||||||||||||||||||||
Agency | - | 182,931 | - | 182,931 | ||||||||||||||||
Non-agency | - | 11,032 | - | 11,032 | ||||||||||||||||
Obligations of state and municipal securities | - | 50,030 | - | 50,030 | ||||||||||||||||
Asset backed securities | - | 26,594 | - | 26,594 | ||||||||||||||||
Total assets measured on a recurring basis | $ | - | $ | 276,795 | $ | - | $ | 276,795 | ||||||||||||
As of December 31, 2012 | ||||||||||||||||||||
Assets | ||||||||||||||||||||
Obligations of U.S. government agencies | $ | - | $ | 7,567 | $ | - | $ | 7,567 | ||||||||||||
Mortgage backed securities: | ||||||||||||||||||||
Agency | - | 145,768 | - | 145,768 | ||||||||||||||||
Non-agency | - | 44,795 | - | 44,795 | ||||||||||||||||
Obligations of state and municipal securities | - | 68,968 | - | 68,968 | ||||||||||||||||
Asset backed securities | - | 20,584 | - | 20,584 | ||||||||||||||||
Total assets measured on a recurring basis | $ | - | $ | 287,682 | $ | - | $ | 287,682 | ||||||||||||
In determining the fair value of Level 3 instruments on a recurring basis the Company takes into consideration several variables, including but not limited to: expectations about interest rate movements, prepayment speeds of the underlying mortgages for mortgage backed securities, expected default rates, and credit spreads over the risk free rate. Of these variables, default rates and credit spreads are perhaps the least observable and most impactful on the long-term value of a Level 3 security. Since a bond’s value is represented by its yield which reflects the risk-free yield curve plus compensation for various risks incurred in buying the bond, changes to the risk assumptions including probability of default and timing of future cash flows can materially impact the market value. As of December 31, 2013 and 2012, there were no Level 3 instruments. | ||||||||||||||||||||
There were no reported recurring Level 3 financial instruments in 2013. The following table provides a summary of the changes in balance sheet carrying values associated with recurring Level 3 financial instruments during the years ended December 31, 2012: | ||||||||||||||||||||
Purchases, | ||||||||||||||||||||
Beginning | Gain / (Loss) | Issuances, and | Sales and | Transfers to / (from) | Ending | |||||||||||||||
(dollar amounts in thousands) | Balance | Included in OCI (1) | Settlements | Maturities | Level III | Balance | ||||||||||||||
December 31, 2012 | ||||||||||||||||||||
Obligations of state and municipal securities | $ | 259 | $ | 3 | $ | - | $ | - | $ | (262 | ) | $ | - | |||||||
Agency mortgage backed securities | - | (191 | ) | 4,674 | - | (4,483 | ) | - | ||||||||||||
Non-agency mortgage backed securities | 3,074 | - | - | - | (3,074 | ) | - | |||||||||||||
(1) Realized or unrealized gains from the changes in values of Level 3 financial instruments represent gains from changes in values of financial instruments only for the period(s) in which the instruments were classified as Level 3. | ||||||||||||||||||||
The assets presented under Level 3 of the fair value hierarchy, which are classified as obligations of state and municipal subdivisions, represent available for sale investment securities in the form of certificates of participation, where an active market for such securities was not available for the first few quarters after its purchase. Subsequently, when a more active market developed, the security was reclassified to Level 2. | ||||||||||||||||||||
Non-recurring Basis | ||||||||||||||||||||
The Company may be required, from time to time, to measure certain assets and liabilities at fair value on a non-recurring basis. These include assets and liabilities that are measured at the lower of cost or fair value that were recognized at fair value which was below cost. Certain impaired loans measured at fair value at December 31, 2012 are no longer recorded at fair value due to the borrower payments reducing the carrying value of these loans to less than fair value and due to other impaired loans now being evaluated under the discounted cash flow method versus the collateral method. The discounted cash flow method as prescribed by ASC 310 Receivables, is not a fair value measurement since the discount rate utilized is the loan’s effective interest rate, which is not a market rate. The discounted cash flow approach was determined to be the most appropriate impairment method to use for these impaired loans based on their significant payment history and the global cash flow analysis performed on each borrower. | ||||||||||||||||||||
The following table provides a summary of assets the Company measures at fair value on a non-recurring basis as of December 31, 2013 and 2012: | ||||||||||||||||||||
Fair Value Measurements Using | ||||||||||||||||||||
Quoted Prices in | Significant Other | Significant | ||||||||||||||||||
Active Markets for | Observable | Unobservable | ||||||||||||||||||
(dollar amounts in thousands) | Identical Assets | Inputs | Inputs | Assets At | Total | |||||||||||||||
As of December 31, 2013 | (Level 1) | (Level 2) | (Level 3) | Fair Value | Losses / (Gains) | |||||||||||||||
Assets | ||||||||||||||||||||
Impaired loans | ||||||||||||||||||||
Land | $ | - | $ | - | $ | 4,170 | $ | 4,170 | $ | (1,270 | ) | |||||||||
Total assets measured on a non-recurring basis | $ | - | $ | - | $ | 4,170 | $ | 4,170 | $ | (1,270 | ) | |||||||||
As of December 31, 2012 | ||||||||||||||||||||
Assets | ||||||||||||||||||||
Impaired loans | ||||||||||||||||||||
Commercial and industrial | $ | - | $ | 820 | $ | 213 | $ | 1,033 | $ | 1,941 | ||||||||||
Agriculture | - | 72 | - | 72 | 28 | |||||||||||||||
Construction | - | 1,656 | - | 1,656 | 460 | |||||||||||||||
Land | - | - | 2,048 | 2,048 | 3,802 | |||||||||||||||
Total assets measured on a non-recurring basis | $ | - | $ | 2,548 | $ | 2,261 | $ | 4,809 | $ | 6,231 | ||||||||||
There were no transfers in or out of Level 1 and Level 2 for assets reported at fair value on either a recurring and non-recurring basis during the year ended December 31, 2013. There were no significant transfers in or out of Level 1 and Level 2 for assets reported at fair value on both a recurring and non-recurring basis during the year ended December 31, 2012. | ||||||||||||||||||||
Fair Value of Financial Instruments | ||||||||||||||||||||
The following table provides a summary of the estimated fair value of financial instruments at December 31, 2013 and 2012: | ||||||||||||||||||||
Fair Value Measurements Using | ||||||||||||||||||||
Quoted Prices in | Significant Other | Significant | ||||||||||||||||||
Active Markets for | Observable | Unobservable | ||||||||||||||||||
(dollar amounts in thousands) | Carrying | Identical Assets | Inputs | Inputs | ||||||||||||||||
As of December 31, 2013 | Amount | (Level 1) | (Level 2) | (Level 3) | Fair Value | |||||||||||||||
Assets | ||||||||||||||||||||
Cash and cash equivalents | $ | 26,238 | $ | 26,238 | $ | - | $ | - | $ | 26,238 | ||||||||||
Investment securities available for sale | 276,795 | - | 276,795 | - | 276,795 | |||||||||||||||
Federal Home Loan Bank stock | 4,739 | - | - | - | N/A | |||||||||||||||
Loans receivable, net of deferred fees and costs | 826,203 | - | - | 827,105 | 827,105 | |||||||||||||||
Loans held for sale | 2,386 | - | 2,386 | - | 2,386 | |||||||||||||||
Accrued interest receivable | 4,027 | - | 1,397 | 2,630 | 4,027 | |||||||||||||||
Liabilities | ||||||||||||||||||||
Non interest-bearing deposits | 291,856 | 291,856 | - | - | 291,856 | |||||||||||||||
Interest-bearing deposits | 682,039 | - | 684,345 | - | 684,345 | |||||||||||||||
Federal Home Loan Bank advances | 88,500 | - | 86,990 | - | 86,990 | |||||||||||||||
Junior subordinated debentures | 8,248 | - | - | 7,595 | 7,595 | |||||||||||||||
Accrued interest payable | 239 | - | 239 | - | 239 | |||||||||||||||
As of December 31, 2012 | ||||||||||||||||||||
Assets | ||||||||||||||||||||
Cash and cash equivalents | $ | 34,116 | $ | 34,116 | $ | - | $ | - | $ | 34,116 | ||||||||||
Investments and mortgage-backed securities | 287,682 | - | 287,682 | - | 287,682 | |||||||||||||||
Federal Home Loan Bank stock | 4,575 | - | - | - | N/A | |||||||||||||||
Loans receivable, net of deferred fees and costs | 688,671 | - | 2,548 | 701,144 | 703,692 | |||||||||||||||
Loans held for sale | 22,549 | - | 22,549 | 22,549 | ||||||||||||||||
Accrued interest receivable | 3,915 | - | 1,497 | 2,418 | 3,915 | |||||||||||||||
Liabilities | ||||||||||||||||||||
Non interest-bearing deposits | 273,242 | 273,242 | - | - | 273,242 | |||||||||||||||
Interest-bearing deposits | 597,628 | - | 598,664 | - | 598,664 | |||||||||||||||
Federal Home Loan Bank advances | 66,500 | - | 67,059 | - | 67,059 | |||||||||||||||
Junior subordinated debentures | 8,248 | - | - | 7,078 | 7,078 | |||||||||||||||
Accrued interest payable | 192 | - | 192 | - | 192 | |||||||||||||||
Information on off-balance sheet instruments as of December 31, 2013 and 2012 follows: | ||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||
Notional | Cost to Cede | Notional | Cost to Cede | |||||||||||||||||
(dollar amounts in thousands) | Amount | or Assume | Amount | or Assume | ||||||||||||||||
Off-balance sheet instruments, commitments to extend credit and standby letters of credit | $ | 198,481 | $ | 1,985 | $ | 178,432 | $ | 1,784 | ||||||||||||
Investment_Securities
Investment Securities | 12 Months Ended | |||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||
Investment Securities | ' | |||||||||||||||||||||
Investment Securities | ' | |||||||||||||||||||||
Note 3. Investment Securities | ||||||||||||||||||||||
The following table sets forth the amortized cost and fair values of the Company’s investment securities, all of which are reported as available for sale at December 31, 2013 and 2012: | ||||||||||||||||||||||
(dollar amounts in thousands) | Gross | Gross | ||||||||||||||||||||
Amortized | Unrealized | Unrealized | ||||||||||||||||||||
As of December 31, 2013 | Cost | Gains | Losses | Fair Value | ||||||||||||||||||
Obligations of U.S. government agencies | $ | 6,243 | $ | 11 | $ | (46 | ) | $ | 6,208 | |||||||||||||
Mortgage backed securities | ||||||||||||||||||||||
U.S. government sponsored entities and agencies | 186,981 | 342 | (4,392 | ) | 182,931 | |||||||||||||||||
Non-agency | 10,924 | 156 | (48 | ) | 11,032 | |||||||||||||||||
State and municipal securities | 51,532 | 269 | (1,771 | ) | 50,030 | |||||||||||||||||
Asset backed securities | 26,935 | - | (341 | ) | 26,594 | |||||||||||||||||
Total | $ | 282,615 | $ | 778 | $ | (6,598 | ) | $ | 276,795 | |||||||||||||
As of December 31, 2012 | ||||||||||||||||||||||
Obligations of U.S. government agencies | $ | 7,307 | $ | 262 | $ | (2 | ) | $ | 7,567 | |||||||||||||
Mortgage backed securities | ||||||||||||||||||||||
U.S. government sponsored entities and agencies | 145,430 | 1,136 | (798 | ) | 145,768 | |||||||||||||||||
Non-agency | 43,402 | 1,578 | (185 | ) | 44,795 | |||||||||||||||||
State and municipal securities | 64,824 | 4,240 | (96 | ) | 68,968 | |||||||||||||||||
Asset backed securities | 20,049 | 568 | (33 | ) | 20,584 | |||||||||||||||||
Total | $ | 281,012 | $ | 7,784 | $ | (1,114 | ) | $ | 287,682 | |||||||||||||
Other than Temporary Impairment (“OTTI”) | ||||||||||||||||||||||
At the end of the first quarter of 2013, the Company sold the two private labeled mortgage backed securities in which OTTI losses had been recognized, as part of its repositioning of the longer duration portion of the investment portfolio, thereby eliminating all securities in the portfolio for which OTTI losses had been incurred. These securities had an aggregate recorded fair value of $0.7 million ($1.0 million historical cost) at December 31, 2012. The following tables provide information related to these two securities as of December 31, 2013 and 2012: | ||||||||||||||||||||||
December 31, 2013 | December 31, 2012 | |||||||||||||||||||||
OTTI Related | OTTI Related | |||||||||||||||||||||
OTTI Related | to All Other | Total | OTTI Related | to All Other | Total | |||||||||||||||||
(dollars in thousands) | to Credit Loss | Factors | OTTI | to Credit Loss | Factors | OTTI | ||||||||||||||||
Balance, beginning of the period | $ | - | $ | - | $ | - | $ | 109 | $ | 361 | $ | 470 | ||||||||||
Less: losses related to OTTI securities sold | - | - | - | - | - | - | ||||||||||||||||
Change in value attributable to other factors | - | - | - | - | (191 | ) | (191 | ) | ||||||||||||||
Balance, end of the period | $ | - | $ | - | $ | - | $ | 109 | $ | 170 | $ | 279 | ||||||||||
Those investment securities available for sale which have an unrealized loss position at December 31, 2013 and 2012 are detailed below: | ||||||||||||||||||||||
Securities In A Loss Position For | ||||||||||||||||||||||
(dollar amounts in thousands) | Less Than Twelve Months | Twelve Months or More | Total | |||||||||||||||||||
Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | |||||||||||||||||
As of December 31, 2013 | Value | Loss | Value | Loss | Value | Loss | ||||||||||||||||
Obligations of U.S. government agencies | $ | 2,773 | $ | (45 | ) | $ | 40 | $ | (1 | ) | $ | 2,813 | $ | (46 | ) | |||||||
Mortgage backed securities | ||||||||||||||||||||||
U.S. government sponsored entities and agencies | 118,554 | (3,140 | ) | 18,863 | (1,252 | ) | 137,417 | (4,392 | ) | |||||||||||||
Non-agency | 3,210 | (48 | ) | - | - | 3,210 | (48 | ) | ||||||||||||||
State and municipal securities | 32,967 | (1,675 | ) | 2,458 | (96 | ) | 35,425 | (1,771 | ) | |||||||||||||
Asset backed securities | 7,978 | (246 | ) | 9,747 | (95 | ) | 17,725 | (341 | ) | |||||||||||||
Total | $ | 165,482 | $ | (5,154 | ) | $ | 31,108 | $ | (1,444 | ) | $ | 196,590 | $ | (6,598 | ) | |||||||
As of December 31, 2012 | ||||||||||||||||||||||
Obligations of U.S. government agencies | $ | - | $ | - | $ | 44 | $ | (2 | ) | $ | 44 | $ | (2 | ) | ||||||||
Mortgage backed securities | ||||||||||||||||||||||
U.S. government sponsored entities and agencies | 83,092 | (798 | ) | - | - | 83,092 | (798 | ) | ||||||||||||||
Non-agency | 7,204 | (15 | ) | 719 | (170 | ) | 7,923 | (185 | ) | |||||||||||||
State and municipal securities | 9,813 | (96 | ) | - | - | 9,813 | (96 | ) | ||||||||||||||
Asset backed securities | 9,828 | (33 | ) | - | - | 9,828 | (33 | ) | ||||||||||||||
Total | $ | 109,937 | $ | (942 | ) | $ | 763 | $ | (172 | ) | $ | 110,700 | $ | (1,114 | ) | |||||||
As of December 31, 2013, the Company believes that unrealized losses on its investment securities are not attributable to credit quality, but rather fluctuations in market prices for these investments. In the case of the agency mortgage related securities, they have contractual cash flows guaranteed by agencies of the U.S. Government. While the Company’s investment security holdings have contractual maturity dates that range from 1 to 40 years, they have a much shorter effective duration dependent on the instrument’s priority in the overall cash flow structure and the characteristics of the loans underlying the investment security. Management does not intend to sell and it is unlikely that management will be required to sell the securities prior to their anticipated recovery. As of December 31, 2013, the Company does not believe unrealized losses related to any of its securities are other than temporary. | ||||||||||||||||||||||
The proceeds from the sales and calls of securities and the associated gains and losses are listed below: | ||||||||||||||||||||||
December 31, | ||||||||||||||||||||||
(dollar amounts in thousands) | 2013 | 2012 | 2011 | |||||||||||||||||||
Proceeds | $ | 161,765 | $ | 141,166 | $ | 147,646 | ||||||||||||||||
Gross gains | $ | 5,599 | $ | 3,152 | $ | 3,173 | ||||||||||||||||
Gross losses | $ | (1,673 | ) | $ | (533 | ) | $ | (1,190 | ) | |||||||||||||
The income tax expense related to these net realized gains was $1.6 million, $1.1 million, and $0.8 million, in 2013, 2012 and 2011 respectively. | ||||||||||||||||||||||
The amortized cost and fair values maturities of available for sale investment securities at December 31, 2013 and 2012, are shown below. The table reflects the expected lives of mortgage-backed securities, based on the Company’s historical prepayment experience, because borrowers have the right to prepay obligations without prepayment penalties. Contractual maturities are reflected for all other security types. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. | ||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||
Amortized | Amortized | |||||||||||||||||||||
(dollar amounts in thousands) | Cost | Fair Value | Cost | Fair Value | ||||||||||||||||||
Due one year or less | $ | 29,282 | $ | 28,999 | $ | 35,586 | $ | 35,714 | ||||||||||||||
Due after one year through five years | 90,023 | 88,760 | 97,899 | 99,522 | ||||||||||||||||||
Due after five years through ten years | 100,191 | 97,752 | 99,138 | 103,595 | ||||||||||||||||||
Due after ten years | 63,119 | 61,284 | 48,389 | 48,851 | ||||||||||||||||||
Total | $ | 282,615 | $ | 276,795 | $ | 281,012 | $ | 287,682 | ||||||||||||||
Securities having an amortized cost and a fair value of $41.9 million and $40.4 million, respectively at December 31, 2013, and $8.7 million and $9.0 million, respectively at December 31, 2012 were pledged to secure public deposits. At year-end 2013 and 2012, there were no holdings of securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of total securities. | ||||||||||||||||||||||
The following table summarizes earnings on both taxable and tax-exempt investment securities: | ||||||||||||||||||||||
For the years ended | ||||||||||||||||||||||
December 31, | ||||||||||||||||||||||
(dollar amounts in thousands) | 2013 | 2012 | 2011 | |||||||||||||||||||
Taxable earnings on investment securities | ||||||||||||||||||||||
Obligations of U.S. government agencies | $ | 106 | $ | 105 | $ | 190 | ||||||||||||||||
Mortgage backed securities | 3,441 | 3,776 | 4,288 | |||||||||||||||||||
State and municipal securities | 5 | 191 | 497 | |||||||||||||||||||
Corporate debt securities | - | 631 | 309 | |||||||||||||||||||
Asset backed securities | 427 | 241 | 20 | |||||||||||||||||||
Non-taxable earnings on investment securities | ||||||||||||||||||||||
State and municipal securities | 1,497 | 1,952 | 1,490 | |||||||||||||||||||
Total | $ | 5,476 | $ | 6,896 | $ | 6,794 |
Loans
Loans | 12 Months Ended | |||||||||||||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||||||||||||
Loans | ' | |||||||||||||||||||||||||||||||
Loans | ' | |||||||||||||||||||||||||||||||
Note 4. Loans | ||||||||||||||||||||||||||||||||
The following table provides a summary of outstanding loan balances as of December 31, 2013 and 2012: | ||||||||||||||||||||||||||||||||
December 31, | ||||||||||||||||||||||||||||||||
(dollar amounts in thousands) | 2013 | 2012 | ||||||||||||||||||||||||||||||
Real Estate Secured | ||||||||||||||||||||||||||||||||
Multi-family residential | $ | 31,140 | $ | 21,467 | ||||||||||||||||||||||||||||
Residential 1 to 4 family | 88,904 | 41,444 | ||||||||||||||||||||||||||||||
Home equity lines of credit | 31,178 | 31,863 | ||||||||||||||||||||||||||||||
Commercial | 432,203 | 372,592 | ||||||||||||||||||||||||||||||
Farmland | 50,414 | 25,642 | ||||||||||||||||||||||||||||||
Total real estate secured | 633,839 | 493,008 | ||||||||||||||||||||||||||||||
Commercial | ||||||||||||||||||||||||||||||||
Commercial and industrial | 119,121 | 125,340 | ||||||||||||||||||||||||||||||
Agriculture | 32,686 | 21,663 | ||||||||||||||||||||||||||||||
Other | 38 | 61 | ||||||||||||||||||||||||||||||
Total commercial | 151,845 | 147,064 | ||||||||||||||||||||||||||||||
Construction | ||||||||||||||||||||||||||||||||
Single family residential | 3,873 | 8,074 | ||||||||||||||||||||||||||||||
Single family residential - Spec. | 1,153 | 535 | ||||||||||||||||||||||||||||||
Multi-family | 736 | 778 | ||||||||||||||||||||||||||||||
Commercial | 7,937 | 10,329 | ||||||||||||||||||||||||||||||
Total construction | 13,699 | 19,716 | ||||||||||||||||||||||||||||||
Land | 24,523 | 24,664 | ||||||||||||||||||||||||||||||
Installment loans to individuals | 3,246 | 4,895 | ||||||||||||||||||||||||||||||
All other loans (including overdrafts) | 332 | 261 | ||||||||||||||||||||||||||||||
Total gross loans | 827,484 | 689,608 | ||||||||||||||||||||||||||||||
Deferred loan fees | (1,281 | ) | (937 | ) | ||||||||||||||||||||||||||||
Allowance for loan losses | (17,859 | ) | (18,118 | ) | ||||||||||||||||||||||||||||
Total net loans | $ | 808,344 | $ | 670,553 | ||||||||||||||||||||||||||||
Loans held for sale | 2,386 | 22,549 | ||||||||||||||||||||||||||||||
Loans held for sale are primarily single-family residential mortgage loans under contract to be sold in the secondary market. In most cases, loans in this category are sold within thirty to sixty days. Under the terms of the mortgage purchase agreements, the purchaser has the right to require the Company to either repurchase the mortgage or reimburse losses incurred by the purchaser, which are determined to have been directly caused by borrower fraud or misrepresentation. At December 31, 2013, the Company has three remaining related loans for which the Company believes it is probable that the purchaser will seek reimbursement from the Company for losses sustained as a result of borrower fraud and/or misrepresentation. Although the Company intends to vigorously challenge claims for reimbursement, the Company has a reserve of $0.4 million for these potential repurchases at December 31, 2013, which is included in other liabilities. The Company has incurred losses of $1.6 million related to the settlement of nine loans since the beginning of 2011, the majority of which were associated with a group of related loans to a borrower found guilty of financial fraud that were originated and sold in 2007. | ||||||||||||||||||||||||||||||||
Concentration of Credit Risk | ||||||||||||||||||||||||||||||||
The Company held loans that were collateralized by various forms of real estate of $672.1 million and $537.4 million at December 31, 2013 and 2012, respectively. Such loans are generally made to borrowers located in the counties of San Luis Obispo, Santa Barbara, and Ventura. The Company attempts to reduce its concentration of credit risk by making loans which are diversified by product type. While Management believes that the collateral presently securing this portfolio is adequate, there can be no assurances that further deterioration in the California real estate market would not expose the Company to significantly greater credit risk. | ||||||||||||||||||||||||||||||||
Loans serviced for others are not included in the accompanying balance sheets. The unpaid principal balance of loans serviced for others, exclusive of Small Business Administration (“SBA”) loans, was $22.6 million and $7.1 million at December 31, 2013 and 2012, respectively. | ||||||||||||||||||||||||||||||||
From time to time, the Company also originates SBA loans for sale for which it retains the servicing of the guaranteed portion of the loan sold. At December 31, 2013 and 2012, the unpaid principal balance of SBA loans serviced for others totaled $6.6 million and $3.1 million, respectively. The Company recognized $0.4 million in gains related to the sale of SBA loans in 2013. The Company did not recognize gains from the sale of SBA loans in 2012 or 2011. The gain on sale of SBA loans was included as a component of other income in non-interest income. | ||||||||||||||||||||||||||||||||
Impaired Loans | ||||||||||||||||||||||||||||||||
The following table provides a summary of the Company’s investment in impaired loans as of and for the year ended December 31, 2013: | ||||||||||||||||||||||||||||||||
Unpaid | Impaired Loans | Specific | ||||||||||||||||||||||||||||||
Recorded | Principal | With Specific | Without Specific | Allowance for | ||||||||||||||||||||||||||||
(dollar amounts in thousands) | Investment (1) | Balance | Allowance | Allowance | Impaired Loans | |||||||||||||||||||||||||||
Real Estate Secured | ||||||||||||||||||||||||||||||||
Residential 1 to 4 family | $ | 944 | $ | 1,102 | $ | - | $ | 944 | $ | - | ||||||||||||||||||||||
Commercial | 901 | 1,646 | - | 901 | - | |||||||||||||||||||||||||||
Commercial | ||||||||||||||||||||||||||||||||
Commercial and industrial | 5,337 | 5,843 | 3,480 | 1,857 | 623 | |||||||||||||||||||||||||||
Agriculture | 789 | 824 | - | 789 | - | |||||||||||||||||||||||||||
Land | 7,927 | 12,106 | 6,706 | 1,221 | 2,532 | |||||||||||||||||||||||||||
Installment loans to individuals | 118 | 190 | - | 118 | - | |||||||||||||||||||||||||||
Totals | $ | 16,016 | $ | 21,711 | $ | 10,186 | $ | 5,830 | $ | 3,155 | ||||||||||||||||||||||
(1) The recorded investment in loans includes the book value of impaired loans as adjusted for net deferred costs and fees attributable to the impaired loans. | ||||||||||||||||||||||||||||||||
The following table provides a summary of the Company’s investment in impaired loans as of and for the year ended December 31, 2012: | ||||||||||||||||||||||||||||||||
Unpaid | Impaired Loans | Specific | ||||||||||||||||||||||||||||||
Recorded | Principal | With Specific | Without Specific | Allowance for | ||||||||||||||||||||||||||||
(dollar amounts in thousands) | Investment (1) | Balance | Allowance | Allowance | Impaired Loans | |||||||||||||||||||||||||||
Real Estate Secured | ||||||||||||||||||||||||||||||||
Residential 1 to 4 family | $ | 831 | $ | 1,035 | $ | 246 | $ | 585 | $ | 18 | ||||||||||||||||||||||
Home equity lines of credit | 58 | 152 | 58 | - | 7 | |||||||||||||||||||||||||||
Commercial | 933 | 1,799 | 42 | 891 | - | |||||||||||||||||||||||||||
Farmland | 1,077 | 1,089 | - | 1,077 | - | |||||||||||||||||||||||||||
Commercial | ||||||||||||||||||||||||||||||||
Commercial and industrial | 4,337 | 4,813 | 3,410 | 927 | 2,172 | |||||||||||||||||||||||||||
Agriculture | 907 | 1,235 | 30 | 877 | 13 | |||||||||||||||||||||||||||
Construction | ||||||||||||||||||||||||||||||||
Commercial | 1,380 | 2,508 | - | 1,380 | - | |||||||||||||||||||||||||||
Land | 7,504 | 11,307 | 6,106 | 1,398 | 3,829 | |||||||||||||||||||||||||||
Installment loans to individuals | 285 | 333 | 285 | - | 22 | |||||||||||||||||||||||||||
Totals | $ | 17,312 | $ | 24,271 | $ | 10,177 | $ | 7,135 | $ | 6,061 | ||||||||||||||||||||||
(1) The recorded investment in loans includes the book value of impaired loans as adjusted for net deferred costs and fees attributable to the impaired loans. | ||||||||||||||||||||||||||||||||
The following table reflects the average recorded investment and interest income recognized on impaired loans for the years ended December 31, 2013, 2012 and 2011: | ||||||||||||||||||||||||||||||||
For the Years Ended December 31, | ||||||||||||||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||||||||||||||
Average | Interest | Average | Interest | Average | Interest | |||||||||||||||||||||||||||
Recorded | Income | Recorded | Income | Recorded | Income | |||||||||||||||||||||||||||
(dollar amounts in thousands) | Investment | Recognized | Investment | Recognized | Investment | Recognized | ||||||||||||||||||||||||||
Real Estate Secured | ||||||||||||||||||||||||||||||||
Residential 1 to 4 family | $ | 870 | $ | 16 | $ | 810 | $ | - | $ | 582 | $ | - | ||||||||||||||||||||
Home equity lines of credit | 28 | - | 303 | - | 696 | - | ||||||||||||||||||||||||||
Commercial | 775 | 5 | 2,851 | - | 8,903 | - | ||||||||||||||||||||||||||
Farmland | - | - | 542 | - | 433 | - | ||||||||||||||||||||||||||
Commercial | ||||||||||||||||||||||||||||||||
Commercial and industrial | 4,684 | 52 | 4,269 | 4 | 2,790 | 5 | ||||||||||||||||||||||||||
Agriculture | 936 | - | 1,655 | - | 1,244 | - | ||||||||||||||||||||||||||
Construction | ||||||||||||||||||||||||||||||||
Single family residential | - | - | - | - | 1,115 | - | ||||||||||||||||||||||||||
Commercial | - | - | 1,288 | - | - | - | ||||||||||||||||||||||||||
Land | 7,878 | 93 | 7,187 | - | 3,224 | - | ||||||||||||||||||||||||||
Installment loans to individuals | 68 | - | 138 | - | 18 | - | ||||||||||||||||||||||||||
Totals | $ | 15,239 | $ | 166 | $ | 19,043 | $ | 4 | $ | 19,005 | $ | 5 | ||||||||||||||||||||
The Company did not record income from the receipt of cash payments related to non-accruing loans during the years ended December 31, 2013, 2012 and 2011. If interest on non-accruing loans had been recognized at the original interest rates stipulated in the respective loan agreements, interest income would have increased $0.8 million, $1.3 million and $1.5 million in 2013, 2012 and 2011, respectively. Interest income recognized on impaired loans in the table above, if any, represents interest the Company recognized on accruing TDRs. | ||||||||||||||||||||||||||||||||
At December 31, 2013 and 2012, $12.9 million and $11.6 million, respectively, in loans were classified as TDRs. Of those balances, $5.8 million and $17 thousand were accruing as of December 31, 2013 and 2012, respectively and the remaining balance of TDRs were included in non-accruing loans. In a majority of these cases, the Company has granted concessions regarding interest rates, payment structure and maturity. During the year-ended December 31, 2013 and 2012, the terms of certain loans were modified as troubled debt restructurings. In general these term modifications related to the extension of the loan’s maturity date at the loan’s original interest rate, which was lower than the current market rate for new debt with similar risk. However, the largest modification in 2012 also included the modification of the principal amount owed, which modification would revert back to original principal balance in the event of the borrower’s default. The maturity date extensions granted were typically for periods ranging from 12 months to 18 months. Forgone interest related to concessions granted on TDRs totaled $0.2 million, $0.1 million and $0.1 million for the years ended December 31, 2013, 2012 and 2011, respectively. As of December 31, 2013, the Company was not committed to lend any additional funds to borrowers whose obligations to the Company were restructured. | ||||||||||||||||||||||||||||||||
The following tables present loan modifications by class which resulted in TDRs during the years ending December 31, 2013 and 2012: | ||||||||||||||||||||||||||||||||
For the Year Ended | ||||||||||||||||||||||||||||||||
December 31, 2013 | ||||||||||||||||||||||||||||||||
Pre-Modification | Post-Modification | |||||||||||||||||||||||||||||||
Number of | Outstanding Recorded | Outstanding Recorded | ||||||||||||||||||||||||||||||
(dollar amounts in thousands) | TDRs | Investment | Investment | |||||||||||||||||||||||||||||
Trouble Debt Restructurings | ||||||||||||||||||||||||||||||||
Real Estate Secured | ||||||||||||||||||||||||||||||||
Residential 1 to 4 family | 1 | $ | 139 | $ | 139 | |||||||||||||||||||||||||||
Commercial real estate | 2 | 339 | 339 | |||||||||||||||||||||||||||||
Commercial | ||||||||||||||||||||||||||||||||
Commercial and industrial | 10 | 2,141 | 2,141 | |||||||||||||||||||||||||||||
Agriculture | 2 | 67 | 67 | |||||||||||||||||||||||||||||
Land | 1 | 1,254 | 1,254 | |||||||||||||||||||||||||||||
Totals | 16 | $ | 3,940 | $ | 3,940 | |||||||||||||||||||||||||||
For the Year Ended | ||||||||||||||||||||||||||||||||
December 31, 2012 | ||||||||||||||||||||||||||||||||
Pre-Modification | Post-Modification | |||||||||||||||||||||||||||||||
Number of | Outstanding Recorded | Outstanding Recorded | ||||||||||||||||||||||||||||||
(dollar amounts in thousands) | TDRs | Investment | Investment | |||||||||||||||||||||||||||||
Trouble Debt Restructurings | ||||||||||||||||||||||||||||||||
Real Estate Secured | ||||||||||||||||||||||||||||||||
Residential 1 to 4 family | 3 | $ | 563 | $ | 563 | |||||||||||||||||||||||||||
Farmland | 1 | 1,089 | 1,089 | |||||||||||||||||||||||||||||
Commercial | ||||||||||||||||||||||||||||||||
Commercial and industrial | 12 | 2,973 | 2,883 | |||||||||||||||||||||||||||||
Construction | ||||||||||||||||||||||||||||||||
Land | 3 | 8,433 | 7,063 | |||||||||||||||||||||||||||||
. | ||||||||||||||||||||||||||||||||
Totals | 19 | $ | 13,058 | $ | 11,598 | |||||||||||||||||||||||||||
The following tables present loans by class modified as troubled debt restructurings, for which there was a payment default within twelve months following the modification during the year ending December 31, 2013 and 2012: | ||||||||||||||||||||||||||||||||
For the Year Ended | ||||||||||||||||||||||||||||||||
December 31, 2013 | ||||||||||||||||||||||||||||||||
Number of | Recorded | |||||||||||||||||||||||||||||||
(dollar amounts in thousands) | TDRs | Investment | ||||||||||||||||||||||||||||||
Trouble Debt Restructurings | ||||||||||||||||||||||||||||||||
That Subsequently Defaulted | ||||||||||||||||||||||||||||||||
Real Estate Secured | ||||||||||||||||||||||||||||||||
Residential 1 to 4 family | 1 | $ | 97 | |||||||||||||||||||||||||||||
Commercial | ||||||||||||||||||||||||||||||||
Commercial and industrial | 3 | 843 | ||||||||||||||||||||||||||||||
Agriculture | 1 | 18 | ||||||||||||||||||||||||||||||
Totals | 5 | $ | 958 | |||||||||||||||||||||||||||||
For the Year Ended | ||||||||||||||||||||||||||||||||
December 31, 2012 | ||||||||||||||||||||||||||||||||
Number of | Recorded | |||||||||||||||||||||||||||||||
(dollar amounts in thousands) | TDRs | Investment | ||||||||||||||||||||||||||||||
Trouble Debt Restructurings | ||||||||||||||||||||||||||||||||
That Subsequently Defaulted | ||||||||||||||||||||||||||||||||
Commercial and industrial | 3 | $ | 254 | |||||||||||||||||||||||||||||
Totals | 3 | $ | 254 | |||||||||||||||||||||||||||||
The Bank is actively working with the borrowers to resolve their delinquencies. | ||||||||||||||||||||||||||||||||
Credit Quality | ||||||||||||||||||||||||||||||||
The following table stratifies the loan portfolio by the Company’s internal risk grading system as well as certain other information concerning the credit quality of the loan portfolio as of December 31, 2013: | ||||||||||||||||||||||||||||||||
31-Dec-13 | Credit Risk Grades | Days Past Due | ||||||||||||||||||||||||||||||
Total Gross | Special | 90+ and Still | Non- | Accruing | ||||||||||||||||||||||||||||
(dollar amounts in thousands) | Loans | Pass | Mention | Substandard | Doubtful | 30-59 | 60-89 | Accruing | Accruing | TDR | ||||||||||||||||||||||
Real Estate Secured | ||||||||||||||||||||||||||||||||
Multi-family residential | $ | 31,140 | $ | 30,560 | $ | - | $ | 580 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||
Residential 1 to 4 family | 88,904 | 87,350 | 490 | 1,064 | - | - | - | - | 449 | 499 | ||||||||||||||||||||||
Home equity lines of credit | 31,178 | 31,021 | - | 157 | - | - | - | - | - | - | ||||||||||||||||||||||
Commercial | 432,203 | 414,058 | 3,574 | 14,571 | - | - | - | - | 672 | 225 | ||||||||||||||||||||||
Farmland | 50,414 | 47,988 | 975 | 1,451 | - | - | - | - | - | - | ||||||||||||||||||||||
Commercial | ||||||||||||||||||||||||||||||||
Commercial and industrial | 119,121 | 105,991 | 5,276 | 7,854 | - | 100 | - | - | 2,180 | 3,119 | ||||||||||||||||||||||
Agriculture | 32,686 | 31,279 | 196 | 1,211 | - | - | - | - | 789 | - | ||||||||||||||||||||||
Other | 38 | 38 | - | - | - | - | - | - | - | - | ||||||||||||||||||||||
Construction | ||||||||||||||||||||||||||||||||
Single family residential | 3,873 | 3,873 | - | - | - | - | - | - | - | - | ||||||||||||||||||||||
Single family residential - Spec. | 1,153 | 1,153 | - | - | - | - | - | - | - | - | ||||||||||||||||||||||
Multi-family | 736 | 736 | - | - | - | - | - | - | - | - | ||||||||||||||||||||||
Commercial | 7,937 | 7,937 | - | - | - | - | - | - | - | - | ||||||||||||||||||||||
Land | 24,523 | 15,244 | 862 | 8,417 | - | - | - | - | 5,910 | 2,010 | ||||||||||||||||||||||
Installment loans to individuals | 3,246 | 3,050 | 10 | 186 | - | - | 2 | - | 117 | - | ||||||||||||||||||||||
All other loans (including overdrafts) | 332 | 332 | - | - | - | - | - | - | - | - | ||||||||||||||||||||||
Totals | $ | 827,484 | $ | 780,610 | $ | 11,383 | $ | 35,491 | $ | - | $ | 100 | $ | 2 | $ | - | $ | 10,117 | $ | 5,853 | ||||||||||||
The following table stratifies the loan portfolio by the Company’s internal risk grading system as well as certain other information concerning the credit quality of the loan portfolio as of December 31, 2012: | ||||||||||||||||||||||||||||||||
December 31, 2012 | Credit Risk Grades | Days Past Due | ||||||||||||||||||||||||||||||
Total Gross | Special | 90+ and Still | Non- | Accruing | ||||||||||||||||||||||||||||
(dollar amounts in thousands) | Loans | Pass | Mention | Substandard | Doubtful | 30-59 | 60-89 | Accruing | Accruing | TDR | ||||||||||||||||||||||
Real Estate Secured | ||||||||||||||||||||||||||||||||
Multi-family residential | $ | 21,467 | $ | 20,869 | $ | - | $ | 598 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||
Residential 1 to 4 family | 41,444 | 40,234 | 6 | 1,204 | - | 199 | - | - | 835 | - | ||||||||||||||||||||||
Home equity lines of credit | 31,863 | 30,808 | - | 1,055 | - | - | 47 | - | 58 | - | ||||||||||||||||||||||
Commercial | 372,592 | 332,968 | 14,235 | 25,389 | - | - | - | - | 928 | - | ||||||||||||||||||||||
Farmland | 25,642 | 20,492 | 3,260 | 1,890 | - | - | - | - | 1,077 | - | ||||||||||||||||||||||
Commercial | ||||||||||||||||||||||||||||||||
Commercial and industrial | 125,340 | 114,126 | 2,245 | 8,969 | - | 446 | 104 | 15 | 4,657 | 17 | ||||||||||||||||||||||
Agriculture | 21,663 | 19,771 | 106 | 1,786 | - | - | - | - | 907 | - | ||||||||||||||||||||||
Other | 61 | 61 | - | - | - | - | - | - | - | - | ||||||||||||||||||||||
Construction | - | |||||||||||||||||||||||||||||||
Single family residential | 8,074 | 8,074 | - | - | - | - | - | - | - | - | ||||||||||||||||||||||
Single family residential - Spec. | 535 | 535 | - | - | - | - | - | - | - | - | ||||||||||||||||||||||
Multi-family | 778 | 778 | - | - | - | - | - | - | - | - | ||||||||||||||||||||||
Commercial | 10,329 | 8,469 | - | 1,860 | - | - | - | - | 1,380 | - | ||||||||||||||||||||||
Land | 24,664 | 12,461 | 4,124 | 8,079 | - | 50 | - | - | 7,182 | - | ||||||||||||||||||||||
Installment loans to individuals | 4,895 | 4,365 | 230 | 300 | - | - | - | - | 285 | - | ||||||||||||||||||||||
All other loans (including overdrafts) | 261 | 261 | - | - | - | - | - | - | - | - | ||||||||||||||||||||||
Totals | $ | 689,608 | $ | 614,272 | $ | 24,206 | $ | 51,130 | $ | - | $ | 695 | $ | 151 | $ | 15 | $ | 17,309 | $ | 17 |
Allowance_for_Loan_Losses_ALLL
Allowance for Loan Losses ("ALLL") | 12 Months Ended | ||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||
Allowance for Loan Losses ("ALLL") | ' | ||||||||||||||||||||||
Allowance for Loan Losses ("ALLL") | ' | ||||||||||||||||||||||
Note 5. Allowance for Loan Losses (“ALLL”) | |||||||||||||||||||||||
The following tables summarize the activity in the allowance attributed to various segments in the loan portfolio as of and for the year ended December 31, 2013, 2012 and 2011: | |||||||||||||||||||||||
Real Estate | All Other | ||||||||||||||||||||||
(dollar amounts in thousands) | Secured | Commercial | Construction | Land | Installment | Loans | Total | ||||||||||||||||
Balance, December 31, 2012 | $ | 6,879 | $ | 6,154 | $ | 313 | $ | 4,670 | $ | 64 | $ | 38 | $ | 18,118 | |||||||||
Charge-offs | (131 | ) | (1,281 | ) | (169 | ) | (34 | ) | (411 | ) | - | (2,026 | ) | ||||||||||
Recoveries | 361 | 1,112 | 153 | 73 | 68 | - | 1,767 | ||||||||||||||||
Provisions for loan losses | 2,048 | (1,128 | ) | (35 | ) | (1,258 | ) | 379 | (6 | ) | - | ||||||||||||
Balance, December 31, 2013 | $ | 9,157 | $ | 4,857 | $ | 262 | $ | 3,451 | $ | 100 | $ | 32 | $ | 17,859 | |||||||||
Real Estate | All Other | ||||||||||||||||||||||
(dollar amounts in thousands) | Secured | Commercial | Construction | Land | Installment | Loans | Total | ||||||||||||||||
Balance, December 31, 2011 | $ | 9,645 | $ | 6,549 | $ | 488 | $ | 2,416 | $ | 175 | $ | 41 | $ | 19,314 | |||||||||
Charge-offs | (2,482 | ) | (5,134 | ) | (1,128 | ) | (2,168 | ) | (184 | ) | (137 | ) | (11,233 | ) | |||||||||
Recoveries | 1,253 | 1,054 | 1 | 22 | 23 | 3 | 2,356 | ||||||||||||||||
Provisions for loan losses | (1,537 | ) | 3,685 | 952 | 4,400 | 50 | 131 | 7,681 | |||||||||||||||
Balance, December 31, 2012 | $ | 6,879 | $ | 6,154 | $ | 313 | $ | 4,670 | $ | 64 | $ | 38 | $ | 18,118 | |||||||||
Real Estate | All Other | ||||||||||||||||||||||
(dollar amounts in thousands) | Secured | Commercial | Construction | Land | Installment | Loans | Total | ||||||||||||||||
Balance, December 31, 2010 | $ | 11,885 | $ | 9,507 | $ | 1,353 | $ | 2,000 | $ | 166 | $ | 29 | $ | 24,940 | |||||||||
Charge-offs | (8,325 | ) | (4,426 | ) | (338 | ) | (793 | ) | (204 | ) | - | (14,086 | ) | ||||||||||
Recoveries | 360 | 1,669 | 112 | 207 | 49 | - | 2,397 | ||||||||||||||||
Provisions for loan losses | 5,725 | (201 | ) | (639 | ) | 1,002 | 164 | 12 | 6,063 | ||||||||||||||
Balance, December 31, 2011 | $ | 9,645 | $ | 6,549 | $ | 488 | $ | 2,416 | $ | 175 | $ | 41 | $ | 19,314 | |||||||||
The following tables summarize comparative metrics about the allowance attributed to various segments of the loan portfolio as of December 31, 2013 and December 31, 2012: | |||||||||||||||||||||||
As of December 31, 2013 | |||||||||||||||||||||||
Real Estate | All Other | ||||||||||||||||||||||
(dollar amounts in thousands) | Secured | Commercial | Construction | Land | Installment | Loans | Total | ||||||||||||||||
Amount of allowance attributed to: | |||||||||||||||||||||||
Specifically evaluated impaired loans | $ | - | $ | 623 | $ | - | $ | 2,532 | $ | - | $ | - | $ | 3,155 | |||||||||
General portfolio allocation | $ | 9,157 | $ | 4,234 | $ | 262 | $ | 919 | $ | 100 | $ | 32 | $ | 14,704 | |||||||||
Loans individually evaluated for impairment | $ | 1,462 | $ | 5,291 | $ | - | $ | 7,696 | $ | - | $ | - | $ | 14,449 | |||||||||
Loans collectively evaluated for impairment | $ | 632,377 | $ | 146,554 | $ | 13,699 | $ | 16,827 | $ | 3,246 | $ | 332 | $ | 813,035 | |||||||||
General reserves to total loans collectively evaluated for impairment | 1.45% | 2.89% | 1.91% | 5.46% | 3.08% | 9.64% | 1.81% | ||||||||||||||||
Total gross loans | $ | 633,839 | $ | 151,845 | $ | 13,699 | $ | 24,523 | $ | 3,246 | $ | 332 | $ | 827,484 | |||||||||
Total allowance to gross loans | 1.44% | 3.20% | 1.91% | 14.07% | 3.08% | 9.64% | 2.16% | ||||||||||||||||
As of December 31, 2012 | |||||||||||||||||||||||
Real Estate | All Other | ||||||||||||||||||||||
(dollar amounts in thousands) | Secured | Commercial | Construction | Land | Installment | Loans | Total | ||||||||||||||||
Amount of allowance attributed to: | |||||||||||||||||||||||
Specifically evaluated impaired loans | $ | 25 | $ | 2,185 | $ | - | $ | 3,829 | $ | 22 | $ | - | $ | 6,061 | |||||||||
General portfolio allocation | $ | 6,854 | $ | 3,969 | $ | 313 | $ | 841 | $ | 42 | $ | 38 | $ | 12,057 | |||||||||
Loans individually evaluated for impairment | $ | 2,898 | $ | 5,596 | $ | 1,380 | $ | 7,182 | $ | 285 | $ | - | $ | 17,341 | |||||||||
Loans collectively evaluated for impairment | $ | 490,110 | $ | 141,468 | $ | 18,336 | $ | 17,482 | $ | 4,610 | $ | 261 | $ | 672,267 | |||||||||
General reserves to total loans collectively evaluated for impairment | 1.40% | 2.81% | 1.71% | 4.81% | 0.91% | 14.56% | 1.79% | ||||||||||||||||
Total gross loans | $ | 493,008 | $ | 147,064 | $ | 19,716 | $ | 24,664 | $ | 4,895 | $ | 261 | $ | 689,608 | |||||||||
Total allowance to gross loans | 1.40% | 4.18% | 1.59% | 18.93% | 1.31% | 14.56% | 2.63% | ||||||||||||||||
Included in the general portfolio allocation are unallocated allowances of $0.3 million and $0.1 million as of December 31, 2013 and 2012, respectively, which amounts have been included on a pro rata basis across the loan segments. | |||||||||||||||||||||||
Property_Premises_and_Equipmen
Property, Premises and Equipment | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Property, Premises and Equipment | ' | |||||||
Property, Premises and Equipment | ' | |||||||
Note 6. Property, Premises and Equipment | ||||||||
At December 31, 2013 and 2012, property, premises and equipment consisted of the following: | ||||||||
December 31, | ||||||||
(dollar amounts in thousands) | 2013 | 2012 | ||||||
Land | $ | 3,633 | $ | 3,633 | ||||
Furniture and equipment | 5,751 | 9,086 | ||||||
Building and improvements | 15,347 | 15,187 | ||||||
Construction in progress | 9,018 | 84 | ||||||
Total cost | 33,749 | 27,990 | ||||||
Less: accumulated depreciation and amortization | 9,529 | 12,034 | ||||||
Total property, premises and equipment | $ | 24,220 | $ | 15,956 | ||||
Depreciation expense totaled $1.4 million for the year ended December 31, 2013 and $1.3 million for each of the years ended December 31, 2012 and 2011. The Company leases land, buildings, and equipment under non-cancelable operating leases expiring at various dates through 2017. See Note 18. Commitments and Contingencies, of these consolidated financial statements for a more detailed discussion regarding the Company’s operating lease obligations. | ||||||||
Deferred_Tax_Assets_and_Income
Deferred Tax Assets and Income Taxes | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Deferred Tax Assets and Income Taxes | ' | ||||||||||||||||
Deferred Tax Assets and Income Taxes | ' | ||||||||||||||||
Note 7. Deferred Tax Assets and Income Taxes | |||||||||||||||||
The table below summarizes the Company’s net deferred tax asset as of December 31, 2013 and 2012: | |||||||||||||||||
December 31, | |||||||||||||||||
(dollar amounts in thousands) | 2013 | 2012 | |||||||||||||||
Deferred tax assets | |||||||||||||||||
Reserves for loan losses | $ | 8,679 | $ | 14,348 | |||||||||||||
Forgone interest on non-accrual loans | 933 | 884 | |||||||||||||||
Fixed assets | 411 | 405 | |||||||||||||||
Accruals | 1,025 | 792 | |||||||||||||||
Alternative minimum tax credit | 2,855 | 2,153 | |||||||||||||||
Deferred income | 2,190 | 1,838 | |||||||||||||||
Deferred compensation | 1,603 | 1,477 | |||||||||||||||
Net operating loss carryforward | 6 | 907 | |||||||||||||||
Other than temporary impairment | - | 45 | |||||||||||||||
Investment securities valuation | 2,395 | - | |||||||||||||||
Realized built-in loss subject to § 382 | 2,228 | 3,234 | |||||||||||||||
Charitable contribution | - | 61 | |||||||||||||||
State deferred tax | 961 | 59 | |||||||||||||||
Total deferred tax assets | 23,286 | 26,203 | |||||||||||||||
Deferred tax liabilities | |||||||||||||||||
Fair value adjustment for purchased assets | 330 | 455 | |||||||||||||||
Investment securities valuation | - | 2,745 | |||||||||||||||
Deferred costs, prepaids and FHLB advances | 1,332 | 1,070 | |||||||||||||||
Total deferred tax liabilities | 1,662 | 4,270 | |||||||||||||||
Net deferred tax assets | $ | 21,624 | $ | 21,933 | |||||||||||||
Deferred Tax Assets Valuation Allowance | |||||||||||||||||
U.S. GAAP requires that companies assess whether a valuation allowance should be established against deferred tax assets based on the consideration of all available evidence using a “more likely than not” standard. In making such judgments, significant weight is given to evidence, both positive and negative, that can be objectively verified. U.S. GAAP provides that a cumulative loss in recent years is significant negative evidence in considering whether deferred tax assets are realizable, and also limits projections of future taxable income to that which can be estimated over a reasonable amount of time. | |||||||||||||||||
The pre-tax losses the Company reported in 2010 and 2009 resulted in a three year cumulative loss position, which provided significant negative evidence about the Company’s ability to realize a portion of its deferred tax assets as of December 31, 2011 and 2010. Due to the three year cumulative pre-tax loss position as of December 31, 2010, management believed that it was no longer more likely than not that the Company would generate enough future taxable income over the projection period in order for all of its deferred tax assets to be realized. As a result of this negative evidence, the Company recorded a partial valuation allowance of approximately $7.1 million for its deferred tax assets in 2010 through a charge to income tax expense. The Company’s determination of the valuation allowance for a portion of its deferred tax assets was based on a determination that the recovery of the entire deferred tax asset was no longer more likely than not due to: (1) an analysis of cumulative pre-tax losses over a three year horizon, through December 31, 2010; (2) a projection of future taxable income over a period of time the Company believed to be reasonably estimable (“the projection period”); and (3) a detailed analysis to determine the amount of the deferred tax asset expected to be realized over the projection period of five years. | |||||||||||||||||
The ultimate realization of the Company’s deferred tax assets is dependent on the generation of future taxable income during the periods in which those temporary differences reverse. The deferred tax assets for which there is no valuation allowance relate to amounts that are expected to be realized through subsequent reversals of existing taxable temporary differences over the projection period. The accounting for deferred taxes is based on an estimate of future results. Differences between anticipated and actual outcomes of these future tax consequences could have an impact on the Company’s consolidated results of operations or financial position. | |||||||||||||||||
The Company’s return to profitability in 2011 and continued profits in 2012 substantially eliminated the three year cumulative loss position. In addition, declines in the level of deferred tax assets and changes in their composition, along with projections of profitability for the foreseeable future and an improvement in the credit quality of the Company’s loan portfolio have combined to improve the outlook for the recovery of the valuation allowance provided for in 2010. As a result of this improved outlook, the Company reduced the level of valuation allowance in the fourth quarter of 2011 by $1.5 million and then reversed the remaining $5.6 million valuation allowance in 2012 based on the Company’s determination that it was more likely than not that its entire deferred tax asset position would be realized. | |||||||||||||||||
Income Taxes | |||||||||||||||||
The Company is subject to income taxation by both federal and state taxing authorities. Income tax returns for the years ended December 31, 2013, 2012, 2011, 2010, and 2009 are open to audit by federal and state taxing authorities. The Company does not have any uncertain income tax positions and has not accrued for any interest or penalties as of December 31, 2013 and 2012. The following table provides a summary for the current and deferred amounts of the Company’s income tax provision / (benefit) for the years ended December 31, 2013, 2012 and 2011: | |||||||||||||||||
For The Years Ended December 31, | |||||||||||||||||
(dollar amounts in thousands) | 2013 | 2012 | 2011 | ||||||||||||||
Current: | |||||||||||||||||
Federal | $ | 1,181 | $ | 3,083 | $ | (524 | ) | ||||||||||
State | 368 | 1,264 | 504 | ||||||||||||||
Total current provision | 1,549 | 4,347 | (20 | ) | |||||||||||||
Deferred: | |||||||||||||||||
Federal | 3,816 | (455 | ) | 2,852 | |||||||||||||
State | 1,632 | (85 | ) | 496 | |||||||||||||
Total deferred provision / (benefit) | 5,448 | (540 | ) | 3,348 | |||||||||||||
Deferred Tax Valuation Allowance: | |||||||||||||||||
Federal | - | (3,662 | ) | (1,110 | ) | ||||||||||||
State | - | (1,943 | ) | (390 | ) | ||||||||||||
Total deferred tax valuation allowance change | - | (5,605 | ) | (1,500 | ) | ||||||||||||
Total income tax provision / (benefit) | $ | 6,997 | $ | (1,798 | ) | $ | 1,828 | ||||||||||
The following table reconciles the statutory federal income tax expense / (benefit) and rate to the Company’s effective income tax (benefit)/expense and rate for the years ended December 31, 2013, 2012 and 2011: | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
(dollar amounts in thousands) | Amount | Percent | Amount | Percent | Amount | Percent | |||||||||||
Tax provision at federal statutory tax rate | $ | 6,243 | 35 | $ | 3,934 | 35 | $ | 3,344 | 35 | ||||||||
State income taxes, net of federal income tax benefit | 1,300 | 7.3 | 766 | 6.8 | 650 | 6.8 | |||||||||||
Change in deferred tax asset valuation allowance | - | - | (5,605 | ) | (49.9 | ) | (1,500 | ) | (15.7 | ) | |||||||
Bank owned life insurance | (167 | ) | (0.9 | ) | (180 | ) | (1.6 | ) | (183 | ) | (1.9 | ) | |||||
Tax exempt income, net of interest expense | (610 | ) | (3.4 | ) | (608 | ) | (5.4 | ) | (545 | ) | (5.7 | ) | |||||
Merger and integration | 271 | 1.5 | - | - | - | - | |||||||||||
Other, net | (40 | ) | (0.3 | ) | (105 | ) | (0.9 | ) | 62 | 0.6 | |||||||
Total income tax provision / (benefit) | $ | 6,997 | 39.2 | $ | (1,798 | ) | (16.0 | ) | $ | 1,828 | 19.1 | ||||||
As part of the bank acquisitions in 2003 and 2007, the Company has approximately $0.01 million and $0.3 million of net operating losses (“NOL”) available for carry-forward for federal and state tax purposes, respectively, at December 31, 2013. The federal NOL carry-forwards related to acquisitions begin to expire in 2020. The state NOL carry-forwards related to acquisitions expire in 2015. Additionally, the Company has approximately $6.2 million in NOL available for carry-forward for state tax purposes related to operating losses the Company incurred during 2009, which expire in 2029. The realization of the NOL is limited for federal tax and state tax purposes under current tax law. Specifically, due to the change in control triggered by the March 2010 capital raise, under I.R.C. Section 382 annual limitations have been placed on the NOL carry-forward deductions. The Company does not, however, believe that these annual limitations will limit the ultimate deductibility of the NOL Carry-forwards. The Company also has $2.0 million and $0.7 million in alternative minimum tax credit for federal and state purposes, respectively, that have no expiration date. | |||||||||||||||||
Goodwill_and_Other_Intangible_
Goodwill and Other Intangible Assets | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Goodwill and Other Intangible Assets | ' | ||||||||||
Goodwill and Other Intangible Assets | ' | ||||||||||
Note 8. Goodwill and Other Intangible Assets | |||||||||||
Intangible assets consist of goodwill and core deposit intangible assets (“CDI”) associated with the acquisition of Business First Bank in 2007 and the December 2012 acquisition of the Morro Bay branch from Coast National Bank. The balance of goodwill at December 31, 2013 was $11.2 million, unchanged from that reported at December 31, 2012. | |||||||||||
CDI assets are subject to amortization. The gross carry amount of CDI, reported in the table below, at December 31, 2013 of $4.2 million, is unchanged from that reported at December 31, 2012. Amortization for the years ended December 31, 2013, 2012 and 2011 was $0.4 million, $0.3 million and $0.4 million, respectively. | |||||||||||
The following table summarizes the gross carrying amount, accumulated amortization and net carrying amount of CDI and provides an estimate for future amortization as of December 31, 2013: | |||||||||||
Gross Carrying | Accumulated | Net Carrying | |||||||||
(dollar amounts in thousands) | Amount | Amortization | Amount | ||||||||
Core deposit intangible | $ | 4,201 | $ | (2,857 | ) | $ | 1,344 | ||||
Beginning | Estimated | Ending | |||||||||
Period | Balance | Amortization | Balance | ||||||||
Year 2014 | $ | 1,344 | $ | (400 | ) | $ | 944 | ||||
Year 2015 | $ | 944 | $ | (400 | ) | $ | 544 | ||||
Year 2016 | $ | 544 | $ | (371 | ) | $ | 173 | ||||
Year 2017 | $ | 173 | $ | (58 | ) | $ | 115 | ||||
Year 2018 | $ | 115 | $ | (58 | ) | $ | 58 | ||||
Year 2019 | $ | 58 | $ | (58 | ) | $ | (0 | ) |
Other_Real_Estate_Owned_OREO
Other Real Estate Owned ("OREO") | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Other Real Estate Owned ("OREO") | ' | ||||||||||||||||
Other Real Estate Owned ("OREO") | ' | ||||||||||||||||
Note 9. Other Real Estate Owned (“OREO”) | |||||||||||||||||
The following tables summarize the changes in the balance of other real estate owned for the years ended December 31, 2013, 2012 and 2011: | |||||||||||||||||
Balance | Balance | ||||||||||||||||
December 31, | December 31, | ||||||||||||||||
(dollar amounts in thousands) | 2012 | Additions | Disposals | Writedowns | 2013 | ||||||||||||
Real Estate Secured | |||||||||||||||||
Commercial | $ | - | $ | 1,374 | $ | (1,374 | ) | $ | - | $ | - | ||||||
Totals | $ | - | $ | 1,374 | $ | (1,374 | ) | $ | - | $ | - | ||||||
Balance | Balance | ||||||||||||||||
December 31, | December 31, | ||||||||||||||||
(dollar amounts in thousands) | 2011 | Additions | Disposals | Writedowns | 2012 | ||||||||||||
Real Estate Secured | |||||||||||||||||
Residential 1 to 4 family | $ | - | $ | 607 | $ | (576 | ) | $ | (31 | ) | $ | - | |||||
Commercial | 215 | - | (215 | ) | - | - | |||||||||||
Construction | |||||||||||||||||
Single family residential - Spec. | 423 | - | (397 | ) | (26 | ) | - | ||||||||||
Tract | 100 | - | (100 | ) | - | - | |||||||||||
Land | 179 | 162 | (300 | ) | (41 | ) | - | ||||||||||
Totals | $ | 917 | $ | 769 | $ | (1,588 | ) | $ | (98 | ) | $ | - | |||||
Balance | Balance | ||||||||||||||||
December 31, | December 31, | ||||||||||||||||
(dollar amounts in thousands) | 2010 | Additions | Disposals | Writedowns | 2011 | ||||||||||||
Real Estate Secured | |||||||||||||||||
Residential 1 to 4 family | $ | 160 | $ | 865 | $ | (1,025 | ) | $ | - | $ | - | ||||||
Commercial | 3,953 | 2,578 | (5,500 | ) | (816 | ) | 215 | ||||||||||
Commercial | |||||||||||||||||
Commercial and industrial | 464 | - | (464 | ) | - | - | |||||||||||
Construction | |||||||||||||||||
Single family residential - Spec. | 475 | - | - | (52 | ) | 423 | |||||||||||
Tract | 251 | - | (117 | ) | (34 | ) | 100 | ||||||||||
Land | 1,365 | 41 | (994 | ) | (233 | ) | 179 | ||||||||||
Totals | $ | 6,668 | $ | 3,484 | $ | (8,100 | ) | $ | (1,135 | ) | $ | 917 | |||||
Write-downs of OREO as reported in the Consolidated Statements of Income include minor adjustments for first liens held by other institutions related to the Bank’s OREO and forfeited deposits from potential buyers of OREO, which items are not reflected in the above tables. In January 2013, the Bank foreclosed on a loan resulting in a $1.4 million increase in OREO and a corresponding decrease in non-accruing loans. The Company did not realize any gains or losses related to disposal of OREO during 2013. | |||||||||||||||||
Deposits
Deposits | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||||
Deposits. | ' | |||||||||||||||||||||||
Deposits | ' | |||||||||||||||||||||||
Note 10. Deposits | ||||||||||||||||||||||||
The following table provides a summary for the maturity of the Bank’s time certificates of deposit as of December 31, 2013: | ||||||||||||||||||||||||
Amount Due | ||||||||||||||||||||||||
(dollar amounts in thousands) | 2014 | 2015 | 2016 | 2017 | 2018 | Over 5 Years | Total | |||||||||||||||||
Time certificates of deposit | $ | 131,494 | $ | 37,538 | $ | 11,887 | $ | 9,024 | $ | 15,920 | $ | 13,958 | $ | 219,821 | ||||||||||
Borrowings
Borrowings | 12 Months Ended | ||||||||||||||
Dec. 31, 2013 | |||||||||||||||
Borrowings | ' | ||||||||||||||
Borrowings | ' | ||||||||||||||
Note 11. Borrowings | |||||||||||||||
The Bank has several sources from which it may obtain borrowed funds. While deposits are the Bank’s primary funding source, borrowings are a secondary source of funds. Borrowings can take the form of Federal Funds purchased through arrangements it has established with correspondent banks or advances from the Federal Home Loan Bank. Borrowing may occur for a variety of reasons including daily liquidity needs and balance sheet growth. Additionally, the Bank had a collateralized borrowing line with the Federal Reserve Bank in the amount of $9.3 million as of December 31, 2013. The following provides a summary of the borrowing facilities available to the Bank and Company as well as the level of borrowings that were outstanding as of December 31, 2013: | |||||||||||||||
Federal Funds Purchased - The Bank has borrowing lines with correspondent banks totaling $62.0 million as of December 31, 2013. As of December 31, 2013, there were no balances outstanding on these borrowing lines. | |||||||||||||||
Federal Home Loan Bank Advances - At December 31, 2013, the Bank had $88.5 million of borrowings with the FHLB, that had the following principal payment requirements: | |||||||||||||||
For the Year Ended (dollar amounts in thousands) | |||||||||||||||
2014 | $ | 29,000 | |||||||||||||
2015 | - | ||||||||||||||
2016 | 10,500 | ||||||||||||||
2017 | 13,500 | ||||||||||||||
2018 | 5,000 | ||||||||||||||
Due More Than 5 Years | 30,500 | ||||||||||||||
Total | $ | 88,500 | |||||||||||||
FHLB advances require monthly interest only payments, with the full amount borrowed due at maturity. | |||||||||||||||
Borrowings from FHLB are collateralized by the Company’s loans receivable and investment securities. Of the $88.5 million outstanding, $59.5 million is fixed rate advances with rates ranging from 0.6% to 2.4%. The remaining $29 million is short-term, variable rate advances, with an interest rate of 0.06% as of December 31, 2013 which rate is tied to the Federal Funds Rate. At December 31, 2013, $584.2 million in loans were pledged as collateral to the FHLB for the borrowings presented in the table above and the banks remaining borrowing capacity of $212.9 million as of December 31, 2013; however, the majority of the Bank’s loans are assigned under a blanket lien to the FHLB. Additionally, the Bank has an $11.5 million letter of credit with the FHLB secured by loans. | |||||||||||||||
Junior Subordinated Debentures | |||||||||||||||
On October 27, 2006, the Company issued $8.2 million of Floating Rate Junior Subordinated Debt Securities to Heritage Oaks Capital Trust II, a statutory trust created under the laws of the State of Delaware. These debentures are subordinated to effectively all borrowings of the Company. The Company used the proceeds from the issuance of these securities for general corporate purposes, which include among other things, capital contributions to the Bank, investments, payment of dividends, and repurchases of our common stock. | |||||||||||||||
On September 20, 2007, the Company issued $5.2 million of Junior Subordinated Deferrable Interest Debentures to Heritage Oaks Capital Trust III (“Trust III”), a statutory trust created under the laws of the State of Delaware. These debentures issued to Trust III were subordinated to effectively all borrowings of the Company. The Company used the proceeds from the sale of the securities to assist in the acquisition of Business First National Bank, for general corporate purposes, and for capital contributions to the Bank. In June 2010, the Company repurchased $5.0 million in face amount of trust preferred securities issued by Trust III, and the related $5.2 million junior subordinated debentures issued by the Company. The repurchase resulted in a pre-tax gain of approximately $1.7 million. Trust III was dissolved in December 2010. | |||||||||||||||
At December 31, 2013 and 2012, the Company had a total of $8.2 million in Junior Subordinated Deferrable Interest Debentures issued and outstanding, issued to Heritage Oaks Capital Trust II. The debt securities can be redeemed at par if certain events occur that impact the tax treatment, regulatory treatment or the capital treatment of the issuance. In addition, effective November 2011 the Company has the option to redeem the debt, subject to regulatory approval. Upon the issuance of the debt securities, the Company purchased a 3.1% minority interest in Heritage Oaks Capital Trust II, totaling $0.2 million. The balance of the equity of Heritage Oaks Capital Trust II is comprised of mandatory redeemable preferred securities and is included in other assets. Interest associated with the securities issued to Heritage Oaks Capital Trust II is payable quarterly at a variable rate of 3-month LIBOR plus 1.72%. | |||||||||||||||
The following table provides a summary of the securities the Company has issued to Heritage Oaks Capital Trust II as of December 31, 2013: | |||||||||||||||
Amount | Current | Issue | Scheduled | Initial | |||||||||||
(dollar amounts in thousands) | Borrowed | Rate | Date | Maturity | Call Date | Rate Type | |||||||||
Heritage Oaks Capital Trust II | $ | 8,248 | 1.97 | % | 27-Oct-06 | Aug-37 | 11-Nov | Variable 3-month LIBOR + 1.72% | |||||||
The Company has the right under the indenture to defer interest payments for a period not to exceed twenty consecutive quarterly periods (each an “Extension Period”) provided that no extension period may extend beyond the maturity of the debt securities. If the Company elects to defer interest payments pursuant to terms of the agreements, then the Company may not (i) declare or pay any dividends or distributions on, or redeem, purchase, acquire or make a liquidation payment with respect to any of the Company’s capital stock, or (ii) make any payment of principal or premium, if any, or interest on or repay, repurchase or redeem any debt securities of the Company that rank pari passu with or junior in interest to the Debt Securities, other than, among other items, a dividend in the form of stock, warrants, options or other rights in the same stock as that on which the dividend is being paid or ranks pari passu with or junior to such stock. The prohibition on payment of dividends and payments on pari passu or junior debt also applies in the case of an event of default under the agreements. | |||||||||||||||
Starting with the second quarter of 2010, the Company began to defer interest payments on its outstanding junior subordinated debentures in order to comply with the terms of the Written Agreement entered into between the Company and the Federal Reserve Bank of San Francisco. In the second quarter of 2012, the Company paid all amounts deferred up through the date of payment and has remained current on its interest payments through December 31, 2013. | |||||||||||||||
On February 28, 2005, the Federal Reserve Board issued a rule which provides that, notwithstanding the deconsolidation of such trusts, junior subordinated debentures, such as those issued by the Company, may continue to constitute up to 25% of a bank holding company’s Tier I capital, subject to certain limitations which became effective on March 31, 2011. At December 31, 2013, the Company was able to include $8.0 million of the net junior subordinated debt in its Tier I Capital for regulatory capital purposes. | |||||||||||||||
In July 2013, the U.S. banking agencies approved the U.S. version of Basel III. The federal bank regulatory agencies adopted version of Basel III revises the risk-based and leverage capital requirements and the method for calculating risk-weighted assets to make them consistent with Basel III and to meet the requirements of the Dodd-Frank Act. Although many of the rules contained in these final regulations are applicable only to large, internationally active banks, some of them will apply on a phased in basis to all banking organizations, including the Company and the Bank. The rules, including alternative requirements for smaller community financial institutions like the Company, would be phased in through 2019. The implementation of the Basel III framework is to commence January 1, 2015. |
Salary_Continuation_Plan
Salary Continuation Plan | 12 Months Ended |
Dec. 31, 2013 | |
Salary Continuation Plan | ' |
Salary Continuation Plan | ' |
Note 12. Salary Continuation Plan | |
The Company established salary continuation agreements with certain senior and executive officers, as authorized by the Board of Directors. As of December 31, 2013, 4 active officers and 3 retired officers were covered by these agreements. As of the end of 2011, the Company elected to no longer offer this type of agreement to new officers, but will continue to honor the terms of the agreements in place as of that date. These agreements provide for annual cash payments for a period not to exceed 15 years, payable at age 60-65, depending on the agreement. In the event of death prior to retirement age, annual cash payments would be made to the beneficiaries for a determined number of years. At December 31, 2013 and 2012, the present value of the Company’s liability under these agreements was $2.7 million and $2.8 million, respectively, and is included in other liabilities in the Company’s consolidated financial statements. For the years ended December 31, 2013, 2012 and 2011, expenses associated with the Company’s salary continuation plans were $0.3 million, $0.2 million and $0.5 million, respectively. The Company maintains life insurance policies, which are intended to fund all costs associated with the agreements. The cash surrender values of these policies totaled $15.8 million and $15.3 million, at December 31, 2013 and 2012, respectively. | |
Employee_Benefit_Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2013 | |
Employee Benefit Plans | ' |
Employee Benefit Plans | ' |
Note 13. Employee Benefit Plans | |
During 1994, the Company established a savings plan for employees, which allows participants to make contributions by salary deduction equal to 15 percent or less of their salary pursuant to section 401(k) of the Internal Revenue Code. The Company matches employee contributions based on a prescribed formula. Employees vest immediately in their own contributions and they vest in the Company’s contribution based on years of service. The Company incurred expenses associated with the plan of $0.1 million, $0.1 million, and $0.2 million for each of the years ended December 31, 2013, 2012 and 2011. | |
Prior to the 2013, the Company sponsored an employee stock ownership plan (“ESOP”) that covered all employees who had completed 12 consecutive months of service, were over 21 years of age and worked a minimum of 1,000 hours per year. In 2013, the Company elected to terminate the ESOP and distributed all shares and cash held by the ESOP to the participants. The amount of the Company’s annual contribution to the ESOP was at the discretion of the Board of Directors. The Company made no contributions to the plan during 2013, 2012, and 2011. | |
As of December 31, 2013, the ESOP was fully liquidated and held no shares of the Company’s common stock. | |
ShareBased_Compensation_Plans
Share-Based Compensation Plans | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Share-Based Compensation Plans | ' | |||||||||||||
Share-Based Compensation Plans | ' | |||||||||||||
Note 14. Share-Based Compensation Plans | ||||||||||||||
At December 31, 2013, the Company had share-based compensation awards outstanding under two share-based compensation plans, which are described below: | ||||||||||||||
The “2005 Equity Based Compensation Plan” | ||||||||||||||
The 2005 Equity Based Compensation Plan (the “2005 Plan”) authorizes the granting of Incentive Stock Options, Non-Qualified Stock Options, Stock Appreciation Rights, Restricted Stock Awards, Restricted Stock Units and Performance Share Cash Only Awards. All outstanding options were granted at prices equal to the fair market value of the Company’s stock on the day of the grant. The 2005 Plan provides for a maximum of ten percent (10%) of the Company’s issued and outstanding shares of common stock as of March 25, 2005 and adjusted on each anniversary thereafter to be ten percent (10%) of the then issued and outstanding number of shares. | ||||||||||||||
All outstanding options are granted at prices equal to the fair market value of the Company’s stock on the day of the grant. Options vest ratably over three to four years depending on the terms of the grant, and expire no later than ten years from the grant date. In the event of a change in control in which the Company is not the surviving entity, all awards granted under the 2005 Plan shall immediately vest and or become immediately exercisable, except as otherwise determined at the time of grant of the award and specified in the award agreement, or unless the survivor corporation or the purchaser of assets of the Company agrees to assume the obligations of the Company with respect to all outstanding awards or to substitute such awards with equivalent awards with respect to the common stock of the successor. | ||||||||||||||
The “1997 Stock Option Plan” | ||||||||||||||
The 1997 Stock Option Plan is a tandem stock option plan permitting options to be granted either as “Incentive Stock Options” or as “Non-Qualified Stock Options” under the Internal Revenue Code. All outstanding options were granted at prices equal to the fair market value of the Company’s stock on the day of the grant. Options granted vest at a rate of 20% per year for five years, and expire no later than ten years from the grant date. However, on May 26, 2005, the stockholders of the Company approved the 2005 Plan, discussed in the preceding paragraph, which stipulates no further grants will be made from the 1997 Stock Option Plan. | ||||||||||||||
Restricted Stock Awards | ||||||||||||||
The Company grants restricted stock periodically as a part of the 2005 Plan for the benefit of employees. Restricted shares issued typically vest ratably over a period of three to five years, depending on the specific terms of the restricted share grant. | ||||||||||||||
The following table summarizes activity with respect to restricted share-based compensation for the year ended December 31, 2013: | ||||||||||||||
Number of | Average Grant | |||||||||||||
Shares | Date Fair Value | |||||||||||||
Balance December 31, 2012 | 196,850 | $ | 4.27 | |||||||||||
Granted | 72,786 | 6.26 | ||||||||||||
Vested | (58,715 | ) | 4.43 | |||||||||||
Forfeited/expired | (15,873 | ) | 5.42 | |||||||||||
Balance December 31, 2013 | 195,048 | $ | 4.87 | |||||||||||
Compensation costs related to restricted stock awards are charged to earnings (included in salaries and employee benefits) over the vesting period of those awards. The total income tax benefit recognized related to restricted stock compensation was less than $0.1 million for each of the years ended December 31, 2013, 2012, and 2011. At December 31, 2013, there was a total of $0.7 million of unrecognized compensation expense related to non-vested restricted stock which is expected to be recognized over a weighted average period of 2.9 years. | ||||||||||||||
Stock Options | ||||||||||||||
The following table provides a summary of information related to the Company’s stock option awards for the years ended December 31, 2013: | ||||||||||||||
Weighted | Options | Weighted Average | ||||||||||||
Number of | Average | Options | Available for | Fair Value | ||||||||||
Shares | Exercise Price | Exercisable | Grant | Options Granted | ||||||||||
Balance at December 31, 2012 | 523,129 | $ | 6.11 | 255,112 | 1,715,616 | $ | 2.93 | |||||||
Granted | 161,446 | 6.28 | ||||||||||||
Forfeited | (84,286 | ) | 5.78 | |||||||||||
Exercised | (33,757 | ) | 4.09 | |||||||||||
Expired | (4,275 | ) | 4.62 | |||||||||||
Balance at December 31, 2013 | 562,257 | $ | 6.34 | 293,586 | 1,593,616 | $ | 3.08 | |||||||
As previously noted, the number of options available to grant is adjusted once a year based on 10% of the actual common shares outstanding on March 25 each year. | ||||||||||||||
The following table provides information related to options that have vested or are expected to vest and exercisable options as of December 31, 2013: | ||||||||||||||
Weighted Average | ||||||||||||||
Weighted | Remaining | Aggregate | ||||||||||||
Average | Contractual Life | Intrinsic | ||||||||||||
Shares | Exercise Price | (Years) | Value | |||||||||||
Vested or expected to vest | 543,260 | $ | 6.35 | 7.14 | $ | 1,157,995 | ||||||||
Exercisable at December 31, 2013 | 293,586 | $ | 6.71 | 5.52 | $ | 765,228 | ||||||||
The total intrinsic value (the amount by which the stock price exceeded the exercise price on the date of exercise) of options exercised in all plans during the three years ended 2013, 2012 and 2011 was $0.1 million, $0.1 million and $0, respectively. | ||||||||||||||
The tax benefit related to the exercise of stock options and disqualifying dispositions on the exercise of incentive stock options were not material in 2013, 2012 or 2011. | ||||||||||||||
Share-Based Compensation Expense | ||||||||||||||
The following table provides a summary of the expense the Company recognized related to share-based compensation awards. The table below also shows the remaining expense associated with those awards as of and for the years ended December 31, 2013, 2012 and 2011: | ||||||||||||||
For The Years Ended December 31, | ||||||||||||||
(dollar amounts in thousands) | 2013 | 2012 | 2011 | |||||||||||
Share-based compensation expense: | ||||||||||||||
Stock option expense | $ | 240 | $ | 127 | $ | 241 | ||||||||
Restricted stock expense | 293 | 204 | 58 | |||||||||||
Total expense | $ | 533 | $ | 331 | $ | 299 | ||||||||
Unrecognized compensation expense: | ||||||||||||||
Stock option expense | $ | 645 | $ | 529 | $ | 365 | ||||||||
Restricted stock expense | 651 | 573 | 232 | |||||||||||
Total unrecognized expense | $ | 1,296 | $ | 1,102 | $ | 597 | ||||||||
As of December 31, 2013, there was a total of $0.6 million of unrecognized compensation cost related to non-vested stock options which is expected to be recognized over a weighted average period of 3.0 years. | ||||||||||||||
The following table presents the assumptions used in the calculation of the weighted average fair value of options granted at various dates during 2013, 2012 and 2011 using the Black-Scholes option pricing model: | ||||||||||||||
2013 | 2012 | 2011 | ||||||||||||
Expected volatility | 55.33% | 52.26% | 50.73% | |||||||||||
Expected term (years) | 6 | 7 | 7 | |||||||||||
Dividend yield | 0.00% | 0.00% | 0.00% | |||||||||||
Risk free rate | 1.54% | 1.11% | 2.74% | |||||||||||
Weighted-average grant date fair value | $ | 3.30 | $ | 2.87 | $ | 2.00 | ||||||||
Estimates of fair value derived from the Company’s use of the Black-Scholes pricing model are theoretical values for stock options and changes in the assumptions used in the models could result in different fair value estimates. The Company recognizes share-based compensation costs on a straight line basis over the vesting period of the award, which is typically a period of 3 to 5 years. The Company estimates forfeiture rates based on historical employee option exercise and termination experience. | ||||||||||||||
Cash_Dividends_Stock_Dividends
Cash Dividends, Stock Dividends and Stock Splits | 12 Months Ended |
Dec. 31, 2013 | |
Cash Dividends, Stock Dividends and Stock Splits | ' |
Cash Dividends, Stock Dividends and Stock Splits | ' |
Note 15. Cash Dividends, Stock Dividends and Stock Splits | |
The Company paid no cash or stock dividends on its common stock during the years ended December 31, 2013, 2012 and 2011. See Note 19. Regulatory Matters and Note 16. Preferred Stock, of these Consolidated Financial Statements for additional information on limitations on dividends on common stock. | |
Preferred_Stock
Preferred Stock | 12 Months Ended |
Dec. 31, 2013 | |
Preferred Stock | ' |
Preferred Stock | ' |
Note 16. Preferred Stock | |
Under its Amended Articles of Incorporation, the Company is authorized to issue up to 5,000,000 shares of preferred stock, in one or more series, having such voting powers, designations, preferences, rights, qualifications, limitations and restrictions as determined by the Board of Directors. | |
U.S Treasury’s Capital Purchase Program (“CPP”) | |
In 2013, the Company repurchased the 21,000 shares of Series A Preferred Stock and the related warrant to purchase 611,650 shares of the Company’s common stock that had been issued in March 2009 to the U.S Treasury under the terms of the CPP. The Company completed the repurchase of the Series A Preferred Stock at par, including accrued but unpaid dividends, for $21.2 million on July 17, 2013. The warrant was repurchased on August 7, 2013 for $1.6 million. | |
While outstanding the Series A Preferred Stock had a liquidation preference of $1,000 per share. The preferred stock carried a coupon of 5% for the first five years after issuance and 9% thereafter. Senior preferred stock issued to the U.S. Treasury was non-voting, cumulative, and perpetual and was redeemable at 100% of their liquidation preference plus accrued and unpaid dividends following three years from the date of issue. The warrant issued to the U.S. Treasury in conjunction with the issuance of the preferred stock provided for the purchase of shares of the Company’s common stock in an amount equal to 15% of the preferred equity issuance or approximately $3.2 million (611,650 shares). The warrant was exercisable immediately at a price of $5.15 per share, would have expired after a period of 10 years from issuance and was transferable by the U.S. Treasury. The warrant would have been dilutive to earnings per common share during reporting periods in which the market price of the Company’s common stock was above the warrant’s exercise price. | |
The proceeds received from the U.S. Treasury were allocated to the Series A Senior Preferred Stock and the warrant based on their relative fair values. The fair value of the Series A Senior Preferred Stock was determined through a discounted future cash flow model at a discount rate of 10%. The fair value of the warrant was calculated using the Black-Scholes option pricing model, which includes assumptions regarding the Company’s dividend yield, stock price volatility, and the risk-free interest rate. As a result the Company recorded the Series A Senior Preferred Stock and the warrant at $19.2 million and $1.8 million, respectively. The Company accreted the discount on the Series A Senior Preferred Stock over a period of five years with corresponding charges to retained earnings. | |
Private Placement and Preferred Stock Conversion | |
On March 12, 2010, the Company sold 1,189,538 shares of its Series C Convertible Perpetual Preferred Stock (“Series C Preferred Stock”) for $3.6 million as part of the overall private placement of securities completed at that time. | |
Series C Preferred Stock is a non-voting class of preferred stock with a liquidation preference over the Company’s common stock equal to the original conversion per share price of $3.25, plus any accrued but unpaid dividends. The Series C Preferred Stock will convert to shares of common stock on a one share for one share basis if the original holder of such shares transfers them to an unaffiliated third party or otherwise makes a “Permissible Transfer”, as defined in the terms of the Series C Preferred Stock. The Series C Preferred Stock will not be redeemable by either the Company or by the holders. Holders of the Series C Preferred Stock do not have any voting rights, including the right to elect any directors, other than the customary limited voting rights with respect to matters significantly and adversely affecting the rights and privileges of the Series C Preferred Stock. There is no stated dividend rate for shares of Series C Preferred Stock. However, in the event that a common stock dividend is declared, holders of Series C Preferred Stock are entitled to a per share dividend equivalent to that declared for each common share into which Series C Preferred Stock is then convertible. | |
The fair market value of the Company’s common stock was higher than the conversion price of $3.25 per share of the Series C Preferred Stock on the date the Company made a firm commitment to issue the Series C Preferred Stock. Therefore, the Series C Preferred Stock has a contingent beneficial conversion feature associated with it. However, since the conversion of the Series C Preferred Stock remains contingent upon the holder’s transfer of the securities to an unaffiliated third party with no specified date for its conversion to common stock, the Company will record the contingent beneficial conversion feature as an initial discount on Series C Preferred Stock and additional paid in capital, with a concurrent immediate accretion of the established discount and corresponding charge to retained earnings on the date the Series C Preferred Stock converts to common stock. The amount of the contingent beneficial conversion feature is approximately $0.2 million and will be recorded as described upon the original holder’s transfer of Series C Preferred Stock through a Permissible Transfer. Such transfer has not occurred as of December 31, 2013. | |
Two investors in the Company’s March 2010 private placement have Board observation rights, while one of the two investors also has Board nomination rights. | |
Earnings_Per_Share
Earnings Per Share | 12 Months Ended | ||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||
Earnings Per Share | ' | ||||||||||||||||||||||
Earnings Per Share | ' | ||||||||||||||||||||||
Note 17. Earnings Per Share | |||||||||||||||||||||||
Basic earnings per common share are computed by dividing net income available to common shareholders by the weighted-average number of common shares outstanding for the reporting period. Diluted earnings per common share are computed by dividing net income available to common shareholders by the weighted-average number of common shares outstanding over the reporting period, adjusted to include the effect of potentially dilutive common shares. Potentially dilutive common shares are calculated using the treasury stock method and include incremental shares issuable upon exercise of outstanding stock options, other share-based compensation awards and any other security in which its conversion / exercise may result in the issuance of common stock, such as the warrant the Company issued to the U.S. Treasury during 2009, which was retired unexercised in August 2013. In addition common stock equivalents include common shares that are issuable on the conversion of the Series C Perpetual Preferred Stock the Company using the if-converted method, which were issued during 2010. The computation of diluted earnings per common share excludes the impacts of the assumed exercise or issuance of securities that would have an anti-dilutive effect, which can occur when the Company reports a net loss or when the market price for the Company’s stock falls below the exercise price of equity awards issued by the Company. | |||||||||||||||||||||||
The following tables set forth the number of shares used in the calculation of both basic and diluted earnings per common share: | |||||||||||||||||||||||
For The Years Ended December 31, | |||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||
Net | Net | Net | |||||||||||||||||||||
(dollar amounts in thousands except per share data) | Income | Shares | Income | Shares | Income | Shares | |||||||||||||||||
Net income | $ | 10,841 | $ | 13,037 | $ | 7,725 | |||||||||||||||||
Dividends and accretion on preferred stock | (898 | ) | (1,470 | ) | (1,358 | ) | |||||||||||||||||
Net income available to common shareholders | $ | 9,943 | $ | 11,567 | $ | 6,367 | |||||||||||||||||
Weighted average shares outstanding | 25,152,054 | 25,081,462 | 25,048,477 | ||||||||||||||||||||
Basic earnings per common share | $ | 0.4 | $ | 0.46 | $ | 0.25 | |||||||||||||||||
Dilutive effect of share-based compensation awards, | |||||||||||||||||||||||
common stock warrants, and convertible perpetual preferred stock | 1,390,635 | 1,320,408 | 1,206,268 | ||||||||||||||||||||
Weighted average diluted shares outstanding | 26,542,689 | 26,401,870 | 26,254,745 | ||||||||||||||||||||
Diluted earnings per common share | $ | 0.37 | $ | 0.44 | $ | 0.24 | |||||||||||||||||
For the years ended December 31, 2013, 2012 and 2011, common stock equivalents associated primarily with stock options, totaling approximately 360,000 shares, 280,000 and 580,000 shares, respectively, were excluded from the calculation of diluted earnings per share, as their impact would be anti-dilutive. In addition, the diluted earnings per share for the year ended December 31, 2011 excluded the impact of approximately 612,000 shares potentially issuable under the warrant issued as part of the Series A Preferred Stock issuance (see Note 16. Preferred Stock), as their impact would be anti-dilutive. | |||||||||||||||||||||||
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | ||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||
Commitments and Contingencies | ' | ||||||||||||||||||||||
Commitments and Contingencies | ' | ||||||||||||||||||||||
Note 18. Commitments and Contingencies | |||||||||||||||||||||||
The Company from time to time is involved in various litigation. In the opinion of management and the Company’s general counsel, the disposition of all such litigation pending will not have a material effect on the Company’s consolidated financial statements. | |||||||||||||||||||||||
Commitments to Extend Credit | |||||||||||||||||||||||
In the normal course of business, the Bank enters into financial commitments to meet the financing needs of its customers. These financial commitments include commitments to extend credit and standby letters of credit. Those instruments involve, to varying degrees, elements of credit and interest rate risk not recognized in the statement of financial position. | |||||||||||||||||||||||
Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Standby letters of credit are conditional commitments to guarantee the performance of a Bank customer to a third party. Since many of the commitments and standby letters of credit are expected to expire without being drawn upon, the total amounts do not necessarily represent future cash requirements. The Bank evaluates each customer’s credit worthiness on a case-by-case basis and the amount of collateral obtained, if deemed necessary by the Bank, is based on management’s credit evaluation of the customer. The Bank’s exposure to loan loss in the event of nonperformance on commitments to extend credit and standby letters of credit is represented by the contractual amount of those instruments. The Bank uses the same credit policies in making commitments as is done for loans reflected in the Consolidated Financial Statements. | |||||||||||||||||||||||
As of December 31, 2013 and 2012, the Company had the following outstanding financial commitments, which contractual amount represents credit risk: | |||||||||||||||||||||||
December 31, | |||||||||||||||||||||||
(dollar amounts in thousands) | 2013 | 2012 | |||||||||||||||||||||
Commitments to extend credit | $ | 181,445 | $ | 164,378 | |||||||||||||||||||
Standby letters of credit | 17,036 | 14,054 | |||||||||||||||||||||
Total commitments and standby letters of credit | $ | 198,481 | $ | 178,432 | |||||||||||||||||||
Commitments to extend credit and standby letters of credit are made at both fixed and variable rates of interest. At December 31, 2013, the Company had $31.6 million in fixed rate commitments and $166.9 million in variable rate commitments. | |||||||||||||||||||||||
Other Commitments | |||||||||||||||||||||||
The following table provides a summary of the future minimum lease payments the Bank is expected to make based upon obligations at December 31, 2013: | |||||||||||||||||||||||
Due | Due | Due | Due | Due | Due More | ||||||||||||||||||
(dollar amounts in thousands) | 2014 | 2015 | 2016 | 2017 | 2018 | Than 5 Years | Total | ||||||||||||||||
Non-cancelable operating leases | $ | 1,257 | $ | 927 | $ | 384 | $ | 103 | $ | - | $ | - | $ | 2,671 | |||||||||
The Company has leases that contain options to extend for periods from three to seven years. Options to extend which have been exercised and the related lease commitments are included in the table above. Total rent expense charged for leases during the reporting periods ended December 31, 2013, 2012 and 2011, were approximately $1.6 million, $1.9 million and $2.5 million, respectively. In 2012, the Company purchased the buildings used for three of its branches and its administrative headquarters facility, which had been previously leased, resulting in a significant reduction in the level of rent expense in 2012, as well as future minimum lease payments from amounts previously reported. In addition in 2012, the Bank closed three branch locations that were subject to leases that were set to expire within one to twelve months from their closure date. | |||||||||||||||||||||||
Regulatory_Matters
Regulatory Matters | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Regulatory Matters | ' | ||||||||||||||||
Regulatory Matters | ' | ||||||||||||||||
Note 19. Regulatory Matters | |||||||||||||||||
Memoranda of Understanding | |||||||||||||||||
On March 4, 2010, the FDIC and the California Department of Business Oversight, Division of Financial Institutions (“DBO”) issued a Consent Order (the “Order”) to the Bank that required, among other things, the Bank to increase its capital ratios, reduce its classified assets and increase Board oversight of management. The Board and management aggressively responded to the Order to ensure full compliance and took actions necessary to substantially comply with the Order within the required time frames. Such actions included the completion of the capital raise that was addressed by the Company’s 2010 $60 million private placement, from which a contribution of a portion of the proceeds were made to the Bank. This contribution brought the Bank into compliance with the capital requirements of the Order. | |||||||||||||||||
From April 2012 to April 2013, the Bank has operated under a Memorandum of Understanding (“MOU”) with the FDIC and DBO, which replaced the Consent Order entered into in 2010. In the MOU, the Company committed to, among other things, continue to make progress in improving credit quality and processes as well as to continue to comply with the 10% Leverage Ratio as originally established by the Order. | |||||||||||||||||
Effective April 24, 2013, the FDIC and DBO terminated their MOU with the Bank, signifying full resolution of all open matters raised as part of their examination in 2010 and recognition of the improved financial health of the Bank. As such the Bank will no longer be subject to the MOU’s 10% Leverage Ratio requirement, as well as the other provision of the MOU. | |||||||||||||||||
On March 4, 2010, the Company entered into a written agreement (the “Written Agreement”) with the Federal Reserve Bank of San Francisco (“FRB”), which required the Company to take certain measures to improve its safety and soundness. Under the Written Agreement, the Company was required to develop and submit for approval, a plan to maintain sufficient capital at the Company and the Bank within 60 days of the date of the Written Agreement. The Written Agreement further provided, among other things, that the Company would not: declare or pay dividends without prior approval of the FRB, take dividends from the Bank, make any distribution of interest, principal or other sums on subordinated debt or trust preferred securities, incur, increase, or guarantee any debt. | |||||||||||||||||
In July 2012, the FRB terminated the Written Agreement issued on March 4, 2010. In connection with the termination of the Written Agreement, the Company executed a MOU with FRB. In the MOU the Company committed among other things to continue to seek FRB approval prior to: paying any dividends on its common and preferred stock; paying interest, principal or other sums on subordinated debt or trust preferred securities; or incurring, increasing, or guaranteeing any debt. On September 4, 2013, the FRB terminated the MOU with the Bank. | |||||||||||||||||
Regulatory Capital | |||||||||||||||||
The Company (on a consolidated basis) and the Bank are subject to various regulatory capital requirements administered by federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary, actions by regulators that, if undertaken, could have a direct material effect on the Company’s and the Bank’s consolidated 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 the Company’s and the Bank’s assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The Company’s and the Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. Prompt corrective action provisions are not applicable to bank holding companies. | |||||||||||||||||
Quantitative measures established by regulation to ensure capital adequacy require the Company and the Bank to maintain minimum amounts and ratios (set forth in the table below) of total and Tier I capital (as defined in the regulations) to risk-weighted assets (as defined) and of Tier I capital (as defined) to average assets (as defined). Management believes, as of December 31, 2013, the Company and the Bank meet all capital adequacy requirements to which they are subject. | |||||||||||||||||
To be categorized as well-capitalized, the Bank must maintain minimum capital ratios as set forth in the table below. However as noted above, beginning on March 4, 2010 and continuing into the first half of 2012, the Bank operated under a Consent Order with the FDIC and DBO that required higher levels of Tier I Leverage and Total Risk Based ratios of 10.0% and 11.5%, respectively. While operating under the Consent Order the Bank could only be considered adequately capitalized. Subsequent to the Consent Order being lifted, the Bank operated under a Memorandum of Understanding with the FDIC and DBO from April 2012 to April 2013, which while eliminating the Total Risk Based ratio requirement of 11.5%, retained the Tier 1 ratio requirement of 10%. With the termination of the MOU in April 2013, the need to continue to adhere to the 10% leverage ratio was lifted. The Bank is now considered well-capitalized. | |||||||||||||||||
The following table also sets forth the Company’s and the Bank’s actual regulatory capital amounts and ratios as of December 31, 2013 and 2012: | |||||||||||||||||
Capital Needed | |||||||||||||||||
To Be Well Capitalized | |||||||||||||||||
Capital Needed For | Under Prompt Corrective | ||||||||||||||||
Actual | Adequacy Purposes | Action Provisions | |||||||||||||||
Capital | Capital | Capital | |||||||||||||||
(dollar amounts in thousands) | Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||
As of December 31, 2013 | |||||||||||||||||
Total capital to risk-weighted assets: | |||||||||||||||||
Company | $ | 130,532 | 14.17% | $ | 73,709 | 8.00% | N/A | N/A | |||||||||
Heritage Oaks Bank | $ | 126,000 | 13.68% | $ | 73,703 | 8.00% | $ | 92,128 | 10.00% | ||||||||
Tier I capital to risk-weighted assets: | |||||||||||||||||
Company | $ | 118,933 | 12.91% | $ | 36,855 | 4.00% | N/A | N/A | |||||||||
Heritage Oaks Bank | $ | 114,402 | 12.42% | $ | 36,851 | 4.00% | $ | 55,277 | 6.00% | ||||||||
Tier I capital to average assets: | |||||||||||||||||
Company | $ | 118,933 | 10.20% | $ | 46,649 | 4.00% | N/A | N/A | |||||||||
Heritage Oaks Bank | $ | 114,402 | 9.82% | $ | 46,603 | 4.00% | $ | 58,254 | 5.00% | ||||||||
As of December 31, 2012 | |||||||||||||||||
Total capital to risk-weighted assets: | |||||||||||||||||
Company | $ | 137,525 | 16.81% | $ | 65,454 | 8.00% | N/A | N/A | |||||||||
Heritage Oaks Bank | $ | 133,038 | 16.28% | $ | 65,374 | 8.00% | $ | 81,718 | 10.00% | ||||||||
Tier I capital to risk-weighted assets: | |||||||||||||||||
Company | $ | 127,196 | 15.55% | $ | 32,727 | 4.00% | N/A | N/A | |||||||||
Heritage Oaks Bank | $ | 122,722 | 15.02% | $ | 32,687 | 4.00% | $ | 49,031 | 6.00% | ||||||||
Tier I capital to average assets: | |||||||||||||||||
Company | $ | 127,196 | 12.32% | $ | 41,311 | 4.00% | N/A | N/A | |||||||||
Heritage Oaks Bank | $ | 122,722 | 11.93% | $ | 41,145 | 4.00% | $ | 51,432 | 5.00% | ||||||||
As disclosed in Note 11. Borrowings, of these Consolidated Financial Statements, the proceeds from the issuance of Junior Subordinated Debentures, subject to percentage limitations, are considered Tier I capital by the Company for regulatory reporting purposes. At December 31, 2013 and 2012, the Company included $8.0 million of proceeds from the issuance of the debt securities in its Tier I capital. | |||||||||||||||||
Related_Party_Transactions
Related Party Transactions | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Related Party Transactions | ' | ||||||||||
Related Party Transactions | ' | ||||||||||
Note 20. Related Party Transactions | |||||||||||
The Bank has entered into loan and deposit transactions with certain directors and executive officers of the Bank and the Company. These loans were made and deposits were taken in the ordinary course of business. | |||||||||||
The following table sets forth loans made to directors and executive officers of the Company as of December 31, 2013: | |||||||||||
For The Year | |||||||||||
Ended December 31, | |||||||||||
(dollar amounts in thousands) | 2013 | ||||||||||
Outstanding balance, beginning of year | $ | 19,842 | |||||||||
Additional loans made | 12,668 | ||||||||||
Repayments | (12,423 | ) | |||||||||
Change in related party status | - | ||||||||||
Outstanding balance, end of year | $ | 20,087 | |||||||||
Deposits from related parties held by the Bank at December 31, 2013 and 2012 amounted to $2.7 million and $3.7 million, respectively. | |||||||||||
In addition to the loan and deposit relationships noted above, the Company paid firms affiliated with certain of its directors for facility rent, legal consultation fees related to collection matters and fuel for Company owned vehicles for the three years ended December 31, 2013, 2012 and 2011 of: | |||||||||||
For The Years Ended December 31, | |||||||||||
(dollar amounts in thousands) | 2013 | 2012 | 2011 | ||||||||
Payments to affiliated firms: | |||||||||||
Facility rent | $ | 237 | $ | 233 | $ | 221 | |||||
Legal consultation fees | 14 | 6 | 8 | ||||||||
Fuel for company owned vehicles | - | 5 | 4 | ||||||||
Total payments to affiliated firms | $ | 251 | $ | 244 | $ | 233 | |||||
The Company also originated and sold $0.3 million of mortgage loans made to directors and officers during 2013. | |||||||||||
Restriction_on_Transfers_of_Fu
Restriction on Transfers of Funds to Parent | 12 Months Ended |
Dec. 31, 2013 | |
Restriction on Transfers of Funds to Parent | ' |
Restriction on Transfers of Funds to Parent | ' |
Note 21. Restriction on Transfers of Funds to Parent | |
There are legal limitations on the ability of the Bank to provide funds to the Company. Dividends declared by the Bank may not exceed, in any calendar year, without approval of the DBO, the lesser of the Bank’s respective net income for the year and the retained net income for the preceding two years or cumulative retained earnings. Section 23A of the Federal Reserve Act restricts the Bank from extending credit to the Company and other affiliates amounting to more than 20 percent of its contributed capital and retained earnings. | |
Additionally, as disclosed in Note 19. Regulatory Matters, of these Consolidated Financial Statements, the Bank and Company, respectively, were operating under a Memorandum of Understanding by the FDIC and DBO as well as a Memorandum of Understanding with the Federal Reserve Bank of San Francisco. The Memoranda of Understanding contained provisions that required the Bank to obtain regulatory approval prior to paying any dividends or other forms of payment that may have represented a reduction in the Bank’s equity to the Company. The Company and Bank are no longer under this restriction. | |
Merger_Activity
Merger Activity | 12 Months Ended |
Dec. 31, 2013 | |
Merger Activity | ' |
Merger Activity | ' |
Note 22. Merger Activity | |
Merger with Mission Community Bancorp | |
On October 21, 2013, Heritage Oaks Bancorp and Mission Community Bancorp (“Mission Community”) entered into a definitive agreement and plan of merger pursuant to which Mission Community will merge with and into Heritage Oaks Bancorp, with Heritage Oaks Bancorp continuing as the surviving corporation. The agreement also provides for Mission Community Bank, a wholly owned subsidiary of Mission Community, to be merged with and into Heritage Oaks Bank immediately following completion of the merger. Mission Community, with assets of approximately $0.4 billion at December 31, 2013, is headquartered in San Luis Obispo, California. Its primary subsidiary, Mission Community Bank, is a nationally chartered community bank with 5 banking locations along the Central Coast of California. | |
The merger closed effective February 28, 2014. The transaction is valued at $68.3 million as of February 28, 2014, comprised of 7,541,353 shares of the Company’s common stock valued at $7.99 closing price on February 28, 2014, plus $8.0 million cash. The acquired assets and liabilities will be recorded at fair value at the date of acquisition and will be reflected in the March 31, 2014 financial statements. However, at the time of these financial statements, the appraisals and valuations are still in process. The Company also expects to record goodwill and a core deposit intangible related to this transaction, but the amounts attributable to those assets are dependent on the appraisals and valuations that are still in process. As this transaction was structured as a tax free exchange, the goodwill will not be deductible for tax purposes. | |
Parent_Company_Financial_Infor
Parent Company Financial Information | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Parent Company Financial Information | ' | |||||||||||
Parent Company Financial Information | ' | |||||||||||
Note 23. Parent Company Financial Information | ||||||||||||
Heritage Oaks Bancorp | ||||||||||||
Condensed Balance Sheets | ||||||||||||
December 31, | ||||||||||||
(dollar amounts in thousands) | 2013 | 2012 | ||||||||||
Assets | ||||||||||||
Cash | $ | 4,726 | $ | 3,615 | ||||||||
Prepaid and other assets | 1,280 | 1,819 | ||||||||||
Investment in bank | 128,940 | 148,461 | ||||||||||
Total assets | $ | 134,946 | $ | 153,895 | ||||||||
Liabilities | ||||||||||||
Junior subordinated debentures | $ | 8,248 | $ | 8,248 | ||||||||
Other liabilities | 271 | 118 | ||||||||||
Total liabilities | 8,519 | 8,366 | ||||||||||
Stockholders’ Equity | ||||||||||||
Preferred stock | 3,604 | 24,140 | ||||||||||
Common stock | 101,511 | 101,354 | ||||||||||
Additional paid in capital | 6,020 | 7,337 | ||||||||||
Retained earnings | 18,717 | 8,773 | ||||||||||
Accumulated other comprehensive income | (3,425 | ) | 3,925 | |||||||||
Total stockholders’ equity | 126,427 | 145,529 | ||||||||||
Total liabilities and stockholders’ equity | $ | 134,946 | $ | 153,895 | ||||||||
Heritage Oaks Bancorp | ||||||||||||
Condensed Statements of Income | ||||||||||||
For The Years Ended | ||||||||||||
December 31, | ||||||||||||
(dollar amounts in thousands) | 2013 | 2012 | 2011 | |||||||||
Income | ||||||||||||
Equity in undisbursed income of subsidiaries | $ | 11,944 | $ | 13,003 | $ | 7,868 | ||||||
Interest | 19 | 25 | 19 | |||||||||
Gain on sale of investment securities | - | - | 254 | |||||||||
Total income | 11,963 | 13,028 | 8,141 | |||||||||
Expense | ||||||||||||
Share-based compensation | 133 | 114 | 58 | |||||||||
Other professional fees and outside services | 1,169 | 498 | 289 | |||||||||
Interest | 167 | 192 | 169 | |||||||||
Total expense | 1,469 | 804 | 516 | |||||||||
Total operating income | 10,494 | 12,224 | 7,625 | |||||||||
Income tax benefit | (347 | ) | (813 | ) | (100 | ) | ||||||
Net income | $ | 10,841 | $ | 13,037 | $ | 7,725 | ||||||
Dividends and accretion on preferred stock | 898 | 1,470 | 1,358 | |||||||||
Net income available to common shareholders | $ | 9,943 | $ | 11,567 | $ | 6,367 | ||||||
Heritage Oaks Bancorp | ||||||||||||
Condensed Statements of Other Comprehensive Income | ||||||||||||
For the Years Ended December 31, | ||||||||||||
(dollar amounts in thousands) | 2013 | 2012 | 2011 | |||||||||
Net income | $ | 10,841 | $ | 13,037 | $ | 7,725 | ||||||
Other comprehensive income: | ||||||||||||
Unrealized security holding (losses) / gains | (8,565 | ) | 8,544 | 4,634 | ||||||||
Reclassification for net gains on investments included in earnings | (3,926 | ) | (2,619 | ) | (1,983 | ) | ||||||
Other comprehensive (loss) / income, before income tax (benefit) / expense | (12,491 | ) | 5,925 | 2,651 | ||||||||
Income tax (benefit) / expense related to items of other comprehensive income | (5,141 | ) | 2,438 | 1,092 | ||||||||
Other comprehensive (loss) / income | (7,350 | ) | 3,487 | 1,559 | ||||||||
Comprehensive income | $ | 3,491 | $ | 16,524 | $ | 9,284 | ||||||
Heritage Oaks Bancorp | ||||||||||||
Condensed Statements of Cash Flows | ||||||||||||
For The Years Ended | ||||||||||||
December 31, | ||||||||||||
(dollar amounts in thousands) | 2013 | 2012 | 2011 | |||||||||
Cash flows from operating activities: | ||||||||||||
Net income | $ | 10,841 | $ | 13,037 | $ | 7,725 | ||||||
Adjustments to reconcile net income to net cash provided by / (used in) operating activities: | ||||||||||||
Increase in other assets | (236 | ) | (448 | ) | (82 | ) | ||||||
Increase / (decrease) in other liabilities | 153 | (208 | ) | 195 | ||||||||
Gain on sale of assets | - | - | (253 | ) | ||||||||
Share-based compensation expense | 133 | 114 | 58 | |||||||||
Undistributed loss / (income) of subsidiaries | 13,365 | (9,486 | ) | (7,868 | ) | |||||||
Net cash provided by / (used in) operating activities | 24,256 | 3,009 | (225 | ) | ||||||||
Cash flows from investing activities: | ||||||||||||
Sale of securities | - | - | 253 | |||||||||
Other | - | - | (775 | ) | ||||||||
Net cash used in investing activities | - | - | (522 | ) | ||||||||
Cash flows from financing activities: | ||||||||||||
Preferred stock dividends paid | (708 | ) | (3,013 | ) | - | |||||||
Retirement of Series A preferred stock and related warrants | (22,575 | ) | - | |||||||||
Proceeds from the exercise of options | 138 | 183 | - | |||||||||
Net cash (used in) / provided by financing activities | (23,145 | ) | (2,830 | ) | - | |||||||
Net increase / (decrease) in cash and cash equivalents | 1,111 | 179 | (747 | ) | ||||||||
Cash and cash equivalents, beginning of year | 3,615 | 3,436 | 4,183 | |||||||||
Cash and cash equivalents, end of year | $ | 4,726 | $ | 3,615 | $ | 3,436 |
Quarterly_Financial_Informatio
Quarterly Financial Information (unaudited) | 12 Months Ended | |||||||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||||||
Quarterly Financial Information (unaudited) | ' | |||||||||||||||||||||||||
Quarterly Financial Information (unaudited) | ' | |||||||||||||||||||||||||
Note 24. Quarterly Financial Information (unaudited) | ||||||||||||||||||||||||||
The following table provides a summary of results for the periods indicated: | ||||||||||||||||||||||||||
For The Quarters Ended, | ||||||||||||||||||||||||||
Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||
(dollar amounts in thousands, except per share data) | 2013 | 2013 | 2013 | 2013 | 2012 | 2012 | 2012 | 2012 | ||||||||||||||||||
Interest income | 11,736 | $ | 11,509 | $ | 11,075 | $ | 11,073 | $ | 11,649 | $ | 11,519 | $ | 11,401 | $ | 11,752 | |||||||||||
Net interest income | 10,687 | 10,482 | 10,149 | 10,208 | 10,763 | 10,585 | 10,406 | 10,749 | ||||||||||||||||||
Provision for credit losses | - | - | - | - | - | 1,286 | 3,064 | 3,331 | ||||||||||||||||||
Non-interest income | 1,879 | 2,423 | 2,912 | 5,661 | 3,548 | 2,984 | 3,494 | 2,522 | ||||||||||||||||||
Non-interest expense | 9,624 | 8,551 | 8,640 | 9,748 | 9,474 | 8,795 | 9,133 | 8,729 | ||||||||||||||||||
Income before provision for income taxes | 2,942 | 4,354 | 4,421 | 6,121 | 4,837 | 3,488 | 1,703 | 1,211 | ||||||||||||||||||
Net income | 1,634 | 2,761 | 2,716 | 3,730 | 3,127 | 6,428 | 1,897 | 1,585 | ||||||||||||||||||
Dividends and accretion on preferred stock | - | 181 | 359 | 358 | 357 | 357 | 375 | 381 | ||||||||||||||||||
Net income available to common shareholders | $ | 1,634 | $ | 2,580 | $ | 2,357 | $ | 3,372 | $ | 2,770 | $ | 6,071 | $ | 1,522 | $ | 1,204 | ||||||||||
Earnings per common share | ||||||||||||||||||||||||||
Basic | $ | 0.06 | $ | 0.1 | $ | 0.09 | $ | 0.13 | $ | 0.11 | $ | 0.24 | $ | 0.06 | $ | 0.05 | ||||||||||
Diluted | $ | 0.06 | $ | 0.1 | $ | 0.09 | $ | 0.13 | $ | 0.1 | $ | 0.23 | $ | 0.06 | $ | 0.05 | ||||||||||
The results for the fourth quarter of 2013 were impacted by $1.1 million of costs related to recently announced merger with Mission Community Bancorp. The quarterly results for the first, second and third quarters of 2012 were impacted by the reversal of the Company’s deferred tax asset valuation allowance in the amounts of $0.8 million, $0.7 million and $4.1 million, respectively. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2013 | |
Summary of Significant Accounting Policies | ' |
Principles of Consolidation | ' |
Principles of Consolidation | |
The consolidated financial statements include the Company and its wholly owned subsidiaries, Heritage Oaks Bank, (the “Bank”) and CCMS Systems, Inc. (an inactive entity). Inter-company balances and transactions have been eliminated. | |
Reclassifications | ' |
Reclassifications | |
Certain amounts in the 2011 consolidated financial statements have been reclassified to conform to the 2012 and 2013 presentation. These reclassifications did not have any effect on the prior years’ reported net income or stockholders’ equity. | |
Investment in Non-Consolidated Subsidiary | ' |
Investment in Non-Consolidated Subsidiary | |
The Company accounts for its investment in Heritage Oaks Capital Trust II, which was formed solely for the purpose of issuing trust preferred securities, as an unconsolidated subsidiary using the equity method of accounting, as the Company is not the primary beneficiary of the trust. | |
Use of Estimates in the Preparation of Consolidated Financial Statements | ' |
Use of Estimates in the Preparation of Consolidated Financial Statements | |
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | |
Estimates that are particularly susceptible to significant change relate to the determination of the allowance for loan losses, the valuation of real estate acquired through foreclosure, the carrying value of the Company’s deferred tax assets and estimates used in the determination of the fair value of certain financial instruments. | |
In connection with the determination of the allowance for loan losses and the value of foreclosed real estate, management obtains independent appraisals for significant properties. While management uses available information to recognize losses on loans and foreclosed real estate and collateral, future additions to the allowance may be necessary based on changes in local economic conditions. In addition, regulatory agencies, as an integral part of their examination process, periodically review the Company’s allowance for loan losses and foreclosed real estate. Such agencies may require the Company to recognize additions to the allowance based on their judgments about information available to them at the time of their examination. Because of these factors, it is reasonably possible that the allowance for loan losses and foreclosed real estate may change in future periods. See also Note 5. Allowance for Loan Losses, of these Consolidated Financial Statements. | |
The Company uses an estimate of its future earnings in determining if it is more likely than not that the carrying value of its deferred tax assets will be realized over the period they are expected to reverse. If based on all available evidence, the Company believes that a portion or all of its deferred tax assets will not be realized; a valuation allowance may be established. See also Note 7. Deferred Tax Assets and Income Taxes, of these consolidated financial statements. | |
The degree of judgment utilized in measuring the fair value of financial instruments generally correlates to the level of pricing observability. Financial instruments with readily available active quoted prices or for which fair value can be measured from actively quoted prices generally will have a higher degree of observable pricing and a lesser degree of judgment utilized in measuring fair value. Conversely, financial instruments rarely traded or not quoted will generally have little or no observable pricing and a higher degree of judgment is utilized in measuring the fair value of such instruments. Observable pricing is impacted by a number of factors, including the type of financial instrument, whether the financial instrument is new to the market and not yet established and the characteristics specific to the transaction. See also Note 2. Fair Value of Assets and Liabilities, of these consolidated financial statements. | |
Disclosure about Fair Value of Financial Instruments | ' |
Disclosure about Fair Value of Financial Instruments | |
The Company’s estimated fair value amounts have been determined by the Company using available market information and appropriate valuation methodologies. However, considerable judgment is required to develop the estimates of fair value. Accordingly, the estimates are not necessarily indicative of the amounts the Company could have realized in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. | |
Although management is not aware of any factors that would significantly affect the estimated fair value amounts, such amounts have not been comprehensively revalued for purposes of these consolidated financial statements since the balance sheet date and, therefore, current estimates of fair value may differ significantly from the amounts presented in the accompanying notes. | |
The Company determines the fair market values of financial instruments based on the fair value hierarchy established in U.S. GAAP. The fair value of a financial instrument is the amount at which the asset or obligation could be exchanged in a current transaction between willing parties, other than a forced or liquidation sale. Fair value estimates are made at a specific point in time based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the entire holdings or a particular financial instrument. Pursuant to U.S. GAAP, the Company is required to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Specifically, U.S. GAAP describes three levels of inputs that may be used to measure fair value, as outlined below: | |
Level 1 - Quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 1 assets and liabilities may include debt and equity securities that are traded in an active exchange market and that are highly liquid and are actively traded in over the counter markets. | |
Level 2 - Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | |
Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments the value for which is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. | |
The following methods and assumptions were used by the Company in estimating fair values of financial instruments. Many of these estimates are subjective in nature, involve uncertainties and matters of judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect these estimates. | |
Cash and Cash Equivalents | |
The carrying amounts reported in the balance sheet for cash and cash equivalents approximate the fair values of those assets due to the short-term nature of the assets. | |
Interest Bearing Deposits at Other Financial Institutions | |
The carrying amounts reported in the balance sheet for interest bearing deposits at other financial institutions approximates the fair value of these assets due to the short-term nature of the assets. | |
Investments in Securities Available for Sale | |
Fair values are based upon quoted market prices, where available. If quoted market prices are not available, fair values are extrapolated from the quoted prices of similar instruments or through the use of other observable data supported by a valuation model. The fair value of newly issued securities, for which there is not a sufficient history of market transactions on which to base a fair value determination under Level 1 or 2 of the hierarchy, are initially valued under Level 3 of the hierarchy. At such time that sufficient history of market transactions is established, the securities’ fair value is determined under Level 1 or 2 of the hierarchy and accordingly the security is transferred out of Level 3 and into the applicable level. | |
Federal Home Loan Bank Stock | |
The fair value of Federal Home Loan Bank stock is not readily determinable due to the lack of its transferability. | |
Loans, Loans Held for Sale, and Accrued Interest Receivable | |
For variable rate loans that re-price frequently and with no significant change in credit risk, fair values are based on carrying amounts. The fair values for other loans (for example, fixed rate loans and loans that possess a rate variable other than daily or that are at their floor rate) are estimated using discounted cash flow analysis, based on interest rates currently being offered for loans with similar terms to borrowers of similar credit quality. Loan fair value estimates include judgments regarding future expected loss experience and risk characteristics. | |
The fair value of loans held for sale is determined, when possible, using quoted secondary market prices. If no such quoted price exists, the fair value of the loan is determined using quoted prices for a similar asset or assets, adjusted for the specific attributes of that loan. The carrying amount of accrued interest receivable approximates its fair value. | |
Impaired Loans | |
A loan is considered impaired when it is probable that payment of interest and principal will not be made in accordance with the original contractual terms of the loan agreement. Impairment is measured based on the fair value of the underlying collateral, which is based on the appraised value of the collateral less any estimated costs to sell. As such, the Company records impaired loans as non-recurring Level 2 when the fair value of the underlying collateral is based on an observable market price or current appraised value. When current market prices are not available or the Company determines that the fair value of the underlying collateral is further impaired below appraised values based on Company specific experience with similar collateral, the Company records impaired loans as non-recurring Level 3. At December 31, 2013, a majority of the Company’s impaired loans were evaluated based on the fair value of their underlying collateral as determined by the most recent appraisal available to management. | |
Other Real Estate Owned and Foreclosed Collateral | |
Other real estate owned and foreclosed collateral are adjusted to fair value, less any estimated costs to sell, at the time the loans are transferred into this category. The fair value of these assets is based on independent appraisals, observable market prices for similar assets, or management’s estimation of value. When the fair value is based on independent appraisals or observable market prices for similar assets, the Company records other real estate owned or foreclosed collateral as non-recurring Level 2 assets. When appraised values are not available, there is no observable market price for similar assets, or management determines the fair value of the asset is further impaired below appraised values or observable market prices based on Company specific experience with similar assets, the Company records other real estate owned or foreclosed collateral as non-recurring Level 3 assets. The most common adjustment to reported appraised values of collateral is a monthly discount linked to the passage of time since the last appraisal. This discount factor ranges between 1% and 3% per month and is consistent with that used in the appraisals to discount for the passage of time between the transaction date for comparable properties used in the appraisal and the appraisal date. | |
Federal Home Loan Bank Advances | |
The fair value disclosed for FHLB advances is determined by discounting contractual cash flows at current market interest rates for similar instruments. | |
Non-Interest Bearing Deposits | |
The fair values disclosed for non-interest bearing deposits are, by definition, equal to the amount payable on demand at the reporting date (that is, their carrying amounts). | |
Interest Bearing Deposits and Accrued Interest Payable | |
The fair values disclosed for interest bearing deposits (for example, interest-bearing checking accounts and passbook accounts) are, by definition, equal to the amount payable on demand at the reporting date (that is, their carrying amounts). The fair values for certificates of deposit are estimated using a discounted cash flow analysis that applies interest rates currently being offered on certificates to a schedule of aggregated contractual maturities on such time deposits. The carrying amount of accrued interest payable approximates its fair value. | |
Junior Subordinated Debentures | |
The fair value disclosed for junior subordinated debentures is based on market prices of similar instruments issued with similar contractual terms and by issuers with a similar credit profile as the Company. | |
Off-Balance Sheet Instruments | |
Fair values of commitments to extend credit and standby letters of credit are based upon fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreement and the counterparties’ credit standing. | |
Recent Accounting Guidance Adopted | ' |
Recent Accounting Guidance Adopted | |
On July 27, 2012, the FASB issued ASU No. 2012-02, Intangibles-Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment. This update, like ASU 2011-08 which the Company adopted in 2011, allows companies the option to first evaluate qualitative factors to determine if events or circumstances exist that indicate that it is more likely than not that an indefinite-lived intangible asset is impaired. If based on this assessment, a company concludes that there are no indicators that suggest an indefinitely-lived asset is more likely than not of having been impaired, then no further quantitative analysis is required. The amendments are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted, including for annual and interim impairment tests performed as of a date before July 27, 2012, if a public entity’s financial statements for the most recent annual or interim period have not yet been issued or, for nonpublic entities, have not yet been made available for issuance. The Company currently does not have any indefinite-lived intangible assets, other than goodwill, therefore adoption of this ASU did not have a material impact on the Company’s consolidated financial statements. | |
On October 1, 2012, the FASB issued ASU No. 2012-04, Technical Corrections and Improvements. The amendments in ASU 2012-04 cover a wide range of Topics in the Codification and address technical corrections and improvements and conforming amendments related to fair value measurements. For public entities, the amendments that are subject to the transition guidance are effective for fiscal periods beginning after December 15, 2012. Adoption of this ASU did not have a material impact on the Company’s consolidated financial statements. | |
On February 15, 2013, the FASB issued ASU No. 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. The update requires companies to present either in a single note or parenthetically on the face of the financial statements, the effect of significant amounts of reclassifications from each component of accumulated other comprehensive income based on its source and the income statement lines affected by the reclassification. For public entities, the amendments that are subject to the transition guidance are effective for fiscal periods beginning after December 15, 2012. Adoption of this ASU did not have a material impact on the Company’s consolidated financial statements. | |
Recent Accounting Guidance Not Yet Effective | ' |
Recent Accounting Guidance Not Yet Effective | |
On January 17, 2014, the FASB issued ASU No 2014 – 04, Receivables – Troubled Debt Restructurings by Creditors. This ASU provides clarification that an in substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, upon either (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (2) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. Additionally, the amendments require interim and annual disclosure of both (1) the amount of foreclosed residential real estate property held by the creditor and (2) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction. The amendments in this ASU are effective for public business entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2014. The Company is currently evaluating the impact of this amendment on the consolidated financial statements. | |
Cash and Cash Equivalents | ' |
Cash and Cash Equivalents | |
Banking regulations require that all banks maintain a percentage of their deposits as reserves in cash or on deposit with the Federal Reserve Bank. In management’s opinion, the Bank is in compliance with the reserve requirements as of December 31, 2013. The Company maintains amounts due from banks that exceed federally insured limits. Historically the Company has not experienced any losses in such accounts. For purposes of reporting cash flows, cash and cash equivalents include cash and due from banks. Generally, interest bearing balances due from banks represent excess liquidity that the Company and/or Bank invests through other institutions overnight. | |
Investments Securities Available for Sale | ' |
Investment Securities Available for Sale | |
The Company’s investment securities are classified as available for sale and are measured at fair value, with changes in unrealized gains and losses, net of applicable taxes, reported as a separate component of stockholders’ equity. The fair values of most securities that are designated available for sale are based on quoted market prices. If quoted market prices are not available, fair values are extrapolated from the quoted prices of similar instruments or through the use of other observable data supporting a valuation model. Gains or losses on sales of investment securities are determined on the specific identification method and recorded as a component of non-interest income. Premiums and discounts are amortized or accreted using the interest method over the expected lives of the related securities and recognized in interest income. | |
Other than Temporary Impairment (“OTTI”) | |
The Company periodically evaluates investments in the portfolio for other than temporary impairment and more specifically when conditions warrant such an evaluation. When evaluating whether impairment is other than temporary, the Company considers, among other things, the following: (1) the length of time the security has been in an unrealized loss position, (2) the extent to which the security’s fair value is less than its cost, (3) the financial condition of the issuer, (4) any adverse changes in ratings issued by various rating agencies, (5) the intent and ability of the Company to hold such securities for a period of time sufficient to allow for any anticipated recovery in fair value and (6) in the case of mortgage related securities, credit enhancements, loan-to-values, credit scores, delinquency and default rates, cash flows and the extent to which those cash flows are within management’s initial expectations based on pre-purchase analyses. | |
When an investment is deemed to be other than temporarily impaired, the Company is required to assess whether it has the intent to sell the investment, or if it is more likely than not that it will be required to sell the investment before its anticipated recovery of its full basis in the security. If the Company does not intend, nor anticipates it will be required to sell the investment, it must still perform an evaluation of future cash flows it expects to receive from the investment to determine if a credit loss has occurred. The evaluation includes future cash flows from the investment the Company expects to collect, based on an assessment of all available information about the applicable investment. The Company considers such factors as: the structure of the security and the Company’s position within that structure, the remaining payment terms for the security, prepayment speeds, default rates, loss severity on the collateral supporting the security, expected changes in real estate prices, and assumptions regarding interest rates, to determine whether the Company will recover the remaining amortized cost basis of the security. In the event that a credit loss has been projected to have occurred, only the amount of impairment related to the credit loss is recognized through earnings. OTTI amounts related to all other factors, such as market conditions, are recorded as a component of accumulated other comprehensive income. On a quarterly basis the Company, with the assistance of an independent third party, performs an updated evaluation on all securities for which OTTI was previously recognized. | |
The presentation of OTTI losses are made in the consolidated statements of income on a gross basis (the total amount by which the investment’s amortized cost basis exceeds its fair value at the time it was evaluated for OTTI) with an offset for the amount of OTTI recognized in other comprehensive income (OTTI related to all other factors such as market conditions). The net charge to earnings, referred to as credit related losses, reflects the portion of the impaired investment the Company estimates it will no longer recover. | |
Federal Home Loan Bank Stock | ' |
Federal Home Loan Bank Stock | |
The Bank is a member of the Federal Home Loan Bank (“FHLB”) and as a condition of membership, the Bank is required to purchase stock in the FHLB. The required ownership of FHLB stock is based on the level of borrowing the Bank has obtained from the FHLB. FHLB stock is carried at cost, classified as a restricted security, and periodically evaluated for impairment based on ultimate recovery of par value. There have been no events that would suggest that an impairment in the carrying value of the stock has occurred as of December 31, 2013. Dividends received on the FHLB stock are reported as a component of interest income. | |
Loans Held for Sale | ' |
Loans Held for Sale | |
Loans held for sale are carried at the lower of aggregate cost or fair value, which is determined by the specified value in the sales contract with the third party buyer. Net unrealized losses, if any, are recognized through a valuation allowance by charges to expense. | |
Loans Held for Investment | ' |
Loans Held for Investment | |
Loans receivable that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at their outstanding unpaid principal balances reduced by any charge-offs of specific valuation allowances and net of any deferred fees or costs on originated loans, or unamortized premiums or discounts on purchased loans. Nonrefundable fees and certain costs associated with originating or acquiring loans are deferred and amortized as an adjustment to interest income over the contractual lives of the loan. Upon prepayment, unamortized loan fees, net of costs, are immediately recognized in interest income. Other fees, including those collected upon principal prepayments, are included in interest income when received. | |
Loans on which the accrual of interest has been discontinued are designated as non-accruing loans. The accrual of interest on loans is discontinued when principal and/or interest is past due 90 days based on contractual terms of the loan and/or when, in the opinion of management, there is reasonable doubt as to collectability unless such loans are well collateralized and in the process of collection. This policy is consistently applied to all portfolio segments. When loans are placed on non-accrual status, all interest previously accrued, but not collected, is reversed against current period interest income. Interest income generally is not recognized on specific non-accruing loans unless the likelihood of further loss is remote. Interest payments received on such loans are generally applied as a reduction to the loan principal balance. Interest accruals are resumed on such loans only when they are brought current with respect to interest and principal and when, in the judgment of management, all remaining principal and interest is estimated to be fully collectable, there has been at least six months of sustained repayment performance since the loan was placed on non-accrual status and/or management believes, based on current information, that such loan is no longer impaired. When a loan is returned to accrual status from non-accrual status, the interest that had been accumulated while on non-accrual status is not recognized until such time as the loan is repaid in full. | |
The Company considers a loan to be impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. Measurement of impairment is based on the expected future cash flows of an impaired loan which are discounted at the loan’s original effective interest rate, or measured by reference to an observable market value, if one exists, or the fair value of the collateral for a collateral-dependent loan. The Company selects the measurement method on a loan-by-loan basis except that collateral-dependent loans for which foreclosure is probable are measured at the fair value of the collateral. The Company recognizes interest income on impaired loans based on its existing methods of recognizing interest income on non-accrual loans. All loans are generally charged-off, either partially or fully, at such time that it is highly certain a loss has been realized. | |
Credit Quality and Credit Risk Management | |
The Company manages credit risk not only through extensive risk analyses performed prior to a loan’s funding, but also through the ongoing monitoring of loans within the portfolio, and more specifically certain types of loans that generally involve a greater degree of risk, such as commercial real estate, commercial lines of credit, and construction/land loans. The Company monitors loans in the portfolio through an exhaustive internal process, at least quarterly, as well as with the assistance of independent loan reviews. These reviews generally not only focus on problem loans, but also “pass” credits within certain pools of loans that may be expected to experience stress due to economic conditions. | |
This process allows the Company to validate credit risk grade ratings, underwriting structure, and the Company’s estimated exposure in the current economic environment as well as enhance communications with borrowers where necessary in an effort to mitigate potential future losses. | |
The Company conducts an analysis on all significant problem loans at least quarterly, in order to properly estimate its potential exposure to loss associated with such credits in a timely manner. Pursuant to the Company’s lending policy, all loans in the portfolio are assigned a risk grade rating, which allows management, among other things, to identify the risk associated with each credit in the portfolio, and to provide a basis for estimating credit losses inherent in the portfolio. Risk grades are generally assigned based on information concerning the borrower and the strength of the collateral. Risk grades are reviewed regularly by the Company’s credit committee and are scrutinized by independent loan reviews performed semi-annually, as well as by regulatory agencies during scheduled examinations. In the second quarter of 2012, the Company implemented a more detailed risk grading system that provided for a more granular break down of loans within the Company’s four primary credit risk grade ratings, discussed below. | |
The following provides brief definitions for credit risk grade ratings assigned to loans in the portfolio: | |
· Pass – strong credit quality with adequate collateral or secondary source of repayment and little existing or known weaknesses. However, pass may include credits with exposure to certain potential factors that may adversely impact the credit, if they materialize, resulting in these credits being put on a watch list to monitor more closely than other pass rated credits. Such factors may be credit / relationship specific or general to an entire industry. | |
· Special Mention – credits that have potential weaknesses that deserve management’s close attention. If not corrected, these potential weaknesses may result in deterioration of the repayment prospects for the credit at some future date. | |
· Substandard – credits that have a defined weakness or weaknesses which may jeopardize the orderly liquidation of the loan through cash flows, making it likely that repayment may have to come from some other source, such as the liquidation of collateral. The Company is more likely to incur losses on substandard credits if the weakness or weaknesses identified in the credit are not corrected. | |
· Doubtful – credits that possess the characteristics of a substandard credit, but because of certain existing deficiencies related to the credit, full collection is highly questionable. The probability of incurring some loss on such credits is high, but because of certain important and reasonably specific pending factors which may work to the advantage of strengthening the credit, charge-off is deferred until such time the Company becomes reasonably certain that certain pending factors related to the credit will no longer provide some form of benefit. | |
Loans typically move to non-accrual status from the Company’s substandard risk grade. When a loan is first classified as substandard, the Company obtains financial information (appraisal or cash flow information) in order to determine if any evidence of impairment exists. If based on an assessment of all available information related to the loan it is determined that the loan is impaired, the Company obtains updated appraisal information on the underlying collateral for collateral dependent loans and updated cash-flow information if the loan is unsecured or primarily dependent on future operating or other cash flows. Once the updated financial information is obtained and analyzed by management, a valuation allowance, if necessary, is established against such loan or a loss is recognized by a charge to the allowance for loan losses, if management believes that the full amount of the Company’s recorded investment in the loan is no longer collectable. Therefore, at the time a loan moves into non-accruing status, a valuation allowance typically has already been established or balances deemed uncollectable on such loan have been charged-off. If upon a loan’s migration to non-accruing status, the financial information obtained while the loan was classified as substandard are deemed to be outdated, the Company typically orders new appraisals on underlying collateral or obtains the most recent cash-flow information in order to have the most current indication of fair value. For collateral dependent loans, if a complete appraisal is expected to take a significant amount of time to complete, the Company may also rely on a broker’s price opinion or other meaningful market data, such as comparable sales, in order to derive its best estimate of a property’s fair value, while waiting for an appraisal at the time of the decision to classify the loan as substandard and/or non-accruing. An analysis of the underlying collateral is performed for loans on non-accrual status at least quarterly and new appraisals are typically received at least annually. Corresponding changes in any related valuation allowance are made or balances deemed to be fully uncollectable are charged-off. Cash-flow information for impaired loans dependent primarily on future operating or other cash-flows are updated quarterly as well, with subsequent shortfalls resulting in valuation allowance adjustments. | |
The Company typically moves to charge-off loan balances when, based on various evidence, it believes those balances are no longer collectable. Such evidence may include updated information related to a borrower’s financial condition or updated information related to collateral securing such loans. Such loans are generally monitored internally on a regular basis by the Special Assets department, which is responsible for obtaining updated periodic appraisal information for collateral securing problem loans as well as updated cash-flow information. If a loan’s credit quality deteriorates to the point that collection of principal through traditional means is believed by management to be doubtful, and management determines there is value in the collateral securing the obligation, the Company generally takes steps to protect and liquidate the collateral. Any loss resulting from the difference between the Company’s recorded investment in the loan and the fair market value of the collateral obtained through repossession is recognized by a charge to the allowance for loan losses. In those cases where management has determined that it is in the best interest of the Bank to attempt to broker a troubled loan rather than to continue to hold it in its portfolio, additional charge-offs have been realized as distressed loan buyers that typically purchase these types of loans tend to require a higher rate of return than would be built into the Company’s traditional hold to maturity model, resulting in the sales price for these loans being less than the adjusted carrying cost. | |
Allowance for Loan Losses | ' |
Allowance for Loan Losses | |
The allowance for loan losses is maintained at a level which, in management’s judgment, is adequate to absorb probable credit losses inherent in the loan portfolio as of the balance sheet date. The amount of the allowance is based on management’s evaluation of the collectability of the loan portfolio, including the nature and volume of the portfolio, credit concentrations, trends in historical loss experience, the level of certain classified balances and specific impaired loans, and economic conditions and the related impact on specific borrowers and industry groups. The allowance is increased by provisions for loan losses, which are charged to earnings and reduced by charge-offs, net of recoveries. Changes in the allowance relating to impaired loans, including troubled debt restructurings (“TDRs”), are charged or credited to the provision for loan losses. Because of uncertainties inherent in the estimation process, management’s estimate of probable credit losses inherent in the loan portfolio and the related allowance may change. | |
The allowance, as more fully described below, is comprised of two components: specific loan reserves and general reserves, which includes a qualitatively determined amount. | |
Specific Loan Reserves - The specific reserve component of the allowance is determined through the measurement of impairment on certain loans that have been identified during each reporting period as impaired. | |
In certain instances the Company may work with the borrower to modify the terms of the loan agreement or otherwise restructure the loan in a way that would allow the borrower to continue to perform under the modified terms of the loan agreement. In those instances where modifications are made to loans, for which the borrower is experiencing financial difficulty and the Company has granted the borrower a concession that it would not have otherwise considered, the modifications constitute a TDR. The Company’s policy for monitoring loan modifications for potential TDRs is focused on loans risk graded as special mention, substandard or doubtful. TDRs are considered impaired and require the Company to measure the amount of impairment, if any, at the time the loan is restructured. | |
A comprehensive analysis of impaired loans is performed, including obtaining updated financial information regarding the borrower, including updated cash flow information on the borrower, obtaining updated appraisals on any collateral securing such loans and ultimately determining the extent to which such loans are impaired. In measuring the fair value of the collateral, management uses assumptions and methodologies consistent with those that would be utilized by third party valuation experts. Once the amount of impairment on specific impaired loans has been determined, the Company establishes a corresponding valuation allowance which then becomes a component of the Company’s specific credit allocation in the allowance for loan losses. | |
General Reserves - The general reserve component of the allowance for loans that are not impaired is determined through a two-step process. First a quantitative allocation is determined by pooling performing loans by collateral type and purpose, such as the stratification presented in Note 4. Loans, of these Consolidated Financial Statements. These loans are then further segmented by an internal loan grading system that classifies loans as: pass, special mention, substandard and doubtful. Estimated loss rates are then applied to each segment according to loan grade to determine the amount of the general portfolio allocation. Estimated loss rates are determined through an analysis of historical loss rates for each segment of the loan portfolio, based on the Company’s prior experience with such loans. | |
The quantitative allocation is then combined with a qualitatively determined allocation of the allowance to form the general reserve component of the allowance for loan loss. The qualitative allocation is determined by estimates the Company makes in regard to certain internal and external factors that may have either a positive or negative impact on the overall losses expected in the loan portfolio. Internal factors include trends in credit quality of the loan portfolio, the existence and the effects of concentrations, the composition and volume of the loan portfolio and the scope and frequency of the loan review process as well as any other factor determined by management to have an impact on the credit quality of the loan portfolio. External factors include local, state and national economic and business conditions. While management regularly reviews the estimated impact these internal and external factors are expected to have on the loan portfolio, there can be no assurance that an adverse change in any one or combination of these factors will not be in excess of management’s expectations. | |
The determination of the amount of the allowance and any corresponding increase or decrease in the level of provisions for loan losses is based on management’s best estimate of probable credit losses as of the balance sheet date. The nature of the process in which management determines the appropriate level of the allowance involves the exercise of considerable judgment and the use of estimates. While management utilizes its best judgment and all available information in determining the adequacy of the allowance, the ultimate adequacy of the allowance is dependent upon a variety of factors beyond the Company’s control, including but not limited to, the performance of the loan portfolio, changes in current and future economic conditions and the view of regulatory agencies regarding the level of classified assets. Weakness in economic conditions and any other factor that may adversely affect credit quality, result in higher levels of past due and non-accruing loans, defaults, and additional loan charge-offs, which may require additional provisions for loan losses in future periods and a higher balance in the Company’s allowance for loan losses. | |
Each segment of loans in the portfolio possess varying degrees of risk, based on, among other things, the type of loan being made, the purpose of the loan, the type of collateral securing the loan, and the sensitivity the borrower has to changes in certain external factors such as economic conditions. The following provides a summary of the risks associated with various segments of the Company’s loan portfolio, which are factors management regularly considers when evaluating the adequacy of the allowance: | |
· Real estate secured – consist primarily of loans secured by commercial real estate, multi-family, farmland, and 1 to 4 family residential properties. Also included in this segment are equity lines of credit secured by real estate. As the majority of this segment is comprised of commercial real estate loans, risks associated with this segment lie primarily within that loan type. Adverse economic conditions may result in a decline in business activity and increased vacancy rates for commercial properties. These factors, in conjunction with a decline in real estate prices, may expose the Company to the potential for losses if a borrower cannot continue to service the loan with operating revenues, and the value of the property has declined to a level such that it no longer fully covers the Company’s recorded investment in the loan. | |
· Commercial and Industrial – consist primarily of commercial and industrial loans (business lines of credit), agriculture loans, and other commercial purpose loans. Repayment of commercial and industrial loans is generally provided from the cash flows of the related business to which the loan was made. Adverse changes in economic conditions may result in a decline in business activity, which can impact a borrower’s ability to continue to make scheduled payments. The risk of repayment of agriculture loans arises largely from factors beyond the control of the Company or the related borrower, such as commodity prices and weather conditions. | |
· Construction / Land segments – although construction and land loans generally possess a higher inherent risk of loss than other portfolio segments, improvements in the mix, collateral and nature of loans in this segment have resulted in an improvement in the risk profile of this segment of the portfolio. Risk arises from the necessity to complete projects within specified cost and time limits. Trends in the construction industry may also impact the credit quality of these loans, as demand drives construction activity. In addition, trends in real estate values significantly impact the credit quality of these loans, as property values determine the economic viability of future construction projects. | |
· Installment – the installment loan portfolio is comprised primarily of a large number of small loans with scheduled amortization over a specific period. The majority of installment loans are made for consumer and business purchases. Weakened economic conditions may result in an increased level of delinquencies within this segment, as economic pressures may impact the capacity of such borrowers to repay their obligations. | |
As mentioned, changes in the financial condition of individual borrowers, economic conditions, historical loss experience and the condition of the various markets in which collateral may be sold may all affect the required level of the allowance for loan losses and the associated provision for loan losses. See also Note 4. Loans and Note 5. Allowance for Loan Losses, of these Consolidated Financial Statements, for additional discussion concerning credit quality and the allowance for loan losses. | |
Loan Charge-offs | ' |
Loan Charge-offs | |
Loan balances are charged-off when the loan becomes 90 days past due, unless it is well secured and/or in the process of collection. This charge-off policy is consistently applied to all portfolio segments. The Company may defer charge-off on a loan, due to certain factors the Company has identified that may work to its benefit in minimizing potential losses. Those factors may include: working with the borrower to restructure their obligation to the Company in an effort to bring about a more favorable outcome, the identification of an additional source of repayment, sufficient collateral to cover the Company’s recorded investment in the loan, or any other identified factor that may work to strengthen the credit and reduce the potential for loss. | |
For most real estate and commercial loans, the Company generally recognizes a charge-off to bring the carrying balance of the loan down to the estimated fair value of the underlying collateral or some other determination of fair value when: (i) management determines that the asset is no longer collectable, (ii) repayment prospects for the credit have become unclear and/or are likely to occur over a time-frame the Company deems to be no longer reasonable, (iii) the loan or portion of the loan has been deemed a loss by the Company’s internal review and/or independent review functions, or has been deemed a loss by regulatory examiners, (iv) the borrower has or is in the process of filing for bankruptcy. | |
Appraisals for Loans Secured by Real Estate Collateral | ' |
Appraisals for Loans Secured by Real Estate Collateral | |
For loan commitments greater than $0.5 million and a remaining term greater than one year at the loan’s anniversary date, the Bank has a policy to perform an annual review of the borrower’s financial condition and of any real estate securing the loan. This review includes, among other things, a physical inspection of the real estate securing the loan, an analysis of any related rent rolls, an analysis of all borrower and guarantor tax returns and financial statements. This information is used internally by the Bank to validate all covenants and the risk grade assigned to the loan. If during the review process the Bank learns of additional information that would suggest that the borrower’s ability to repay has deteriorated since the original underwriting of the loan, and repayment may now be dependent on liquidation of the collateral, an additional independent appraisal of the collateral is requested. If based on the updated appraisal information it is determined the value of the collateral is impaired and the Bank no longer expects to collect all previously determined amounts related to the loan as stipulated in the loan’s original agreement, the Bank typically moves to establish a valuation allowance for such loans or charge-off such differences. | |
In general, once a loan is deemed to be impaired and/or the loan was downgraded to substandard status, the loan becomes the responsibility of the Bank’s Special Assets department, which provides more diligent oversight of problem credits. This oversight includes, among other things, a review of all previous appraisals of collateral securing such loans and determining in the Bank’s best judgment if those appraisals still represent the current fair value of the loan. Additional appraisals may be ordered at this time and annually thereafter, if deemed necessary. | |
Premises and Equipment | ' |
Premises and Equipment | |
Land is carried at cost. Premises and equipment are carried at cost less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives, which range from three to ten years for furniture and fixtures and thirty years for buildings. Leasehold improvements are amortized using the straight-line method over the estimated useful lives of the improvements or the remaining lease term, whichever is shorter. Expenditures for improvements or major repairs are capitalized and those for ordinary repairs and maintenance are charged to expense as incurred. | |
Deferred Tax Asset and Income Taxes | ' |
Deferred Tax Asset and Income Taxes | |
Income taxes reported in the consolidated financial statements are computed based on an asset and liability approach. We recognize the amount of taxes payable or refundable for the current year, and deferred tax assets and liabilities for the future tax consequences that have been recognized in the financial statement or tax returns. The measurement of tax assets and liabilities is based on the provisions of enacted tax laws. The Company files consolidated federal and combined state income tax returns. A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. Interest expense and penalties associated with unrecognized tax benefits, if any, are classified as income tax expense in the consolidated statements of operations. | |
Deferred income taxes reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax reporting purposes. Deferred tax assets are recognized subject to management’s judgment that realization is more likely than not. In making the determination whether a deferred tax asset is more likely than not to be realized, management performs a quarterly evaluation of all available positive and negative evidence including the possibility of future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial results. A deferred tax asset valuation allowance is established to reduce the net carrying amount of deferred tax assets if it is determined to be more likely than not that all or some portion of the deferred tax asset will not be realized. See also Note 7. Deferred Tax Assets and Income Taxes, of these consolidated financial statements for additional information related to deferred income taxes. | |
Bank Owned Life Insurance | ' |
Bank Owned Life Insurance | |
The Company has purchased life insurance policies on certain employees. These Bank Owned Life Insurance (“BOLI”) policies are recorded in the consolidated balance sheets at their cash surrender value. Income and expense from these policies and changes in the cash surrender value are recorded in non-interest income and non-interest expense in the consolidated statements of income. | |
Goodwill and Other Intangible Assets | ' |
Goodwill and Other Intangible Assets | |
Intangible assets are comprised of goodwill, core deposit intangibles and other identifiable intangibles acquired in business combinations. Intangible assets with definite useful lives are amortized over their respective estimated useful lives. If an event occurs that indicates the carrying amount of an intangible asset may not be recoverable, management reviews the asset for impairment. Any goodwill and any intangible asset acquired in a purchase business combination determined to have an indefinite useful life is not amortized, but is at least annually evaluated for impairment. | |
The Company applies a qualitative analysis of conditions that might indicate that impairment of goodwill is more likely than not of having occurred. In the event that the qualitative analysis suggests that an impairment may have occurred, the Company, with the assistance of an independent third party valuation firm, uses several quantitative valuation methodologies in evaluating goodwill for impairment including a discounted cash flow approach that includes assumptions made concerning the future earnings potential of the organization, and a market-based approach that looks at values for organizations of comparable size, structure and business model. The current year’s review of qualitative factors did not indicate that an impairment might have occurred, as such no quantitative analysis was performed at December 31, 2013. The most recent such quantitative valuation was completed as of December 31, 2010 and no impairment was noted as a result of the exercise. | |
Other Real Estate Owned | ' |
Other Real Estate Owned | |
Real estate and other property acquired in full or partial settlement of loan obligations is referred to as other real estate owned (“OREO”). OREO is originally recorded in the Company’s consolidated financial statements at fair value less any estimated costs to sell. When property is acquired through foreclosure or surrendered in lieu of foreclosure, the Company measures the fair value of the property acquired against its recorded investment in the loan. If the fair value of the property at the time of acquisition is less than the recorded investment in the loan, the difference is charged to the allowance for loan losses. Any subsequent declines in the fair value of OREO are recorded against a valuation allowance for foreclosed assets, established through a charge to non-interest expense. All related operating or maintenance costs are charged to non-interest expense as incurred. Any subsequent gains or losses on the sale of OREO are recorded in other income. | |
Federal Home Loan Bank ("FHLB") Borrowings | ' |
Federal Home Loan Bank (“FHLB”) Borrowings | |
The Company may borrow from the FHLB at competitive rates, which typically approximate the London Inter-Bank Offered Rate (“LIBOR”) for the equivalent term because they are secured with investments in high quality loans. Interest is accrued on a monthly basis based on the outstanding borrowing’s interest rate and is included in interest expense on other borrowings | |
Reserve for Off-Balance Sheet Commitments | ' |
Reserve for Off-Balance Sheet Commitments | |
The Company has exposure to losses from unfunded loan commitments and letters of credit. Since the funds have not been disbursed on these commitments, they are not reported as loans outstanding. Estimated losses related to these commitments are not included in the allowance for loan losses reported in Note 5. Allowance for Loan Losses, of these Consolidated Financial Statements. Instead they are accounted for as a separate loss contingency reserve within other liabilities on the Company’s Consolidated Balance Sheets and related adjustments to this reserve are as a charge to earnings included in other non-interest expense on the Consolidated Statements of Income. Losses are experienced when the Company is contractually obligated to make a payment under these instruments and must seek repayment from a party that may not be as financially sound in the current period as it was when the commitment was originally made. | |
Salary Continuation Plan Agreements | ' |
Salary Continuation Plan Agreements | |
The Company has entered into salary continuation plan agreements with certain executive and senior officers. The measurement of the liability under these agreements is estimated using a discounted cash flow model, which includes estimates involving life expectancy, length of time before retirement, estimated long-term discount rates based on the Bank’s long-term borrowing rates at the time the agreement is executed and expected benefit levels. Should these estimates vary substantially from actual events, the level of expense recognized in the future to provide these benefits could materially vary. | |
Comprehensive Income | ' |
Comprehensive Income | |
Changes in the unrealized gain / (loss) on available for sale securities net of income taxes was the only component of accumulated other comprehensive income for the Company for the years ended December 31, 2013, 2012 and 2011. | |
Share-Based Compensation | ' |
Share-Based Compensation | |
The Company grants incentive and non-qualified stock options, as well as restricted stock to directors and employees as a form of compensation. U.S. GAAP requires companies to recognize in the income statement the grant-date fair value of stock options and other equity-based forms of compensation issued to employees over the employees’ requisite service period (generally the vesting period). The Company uses a straight-line method for the recognition of all share-based compensation expense. | |
The amount of compensation expense to be recognized for options is based on the fair value of the options, utilizing a Black-Scholes option pricing model, at the date of the grant. The fair value for option grants is estimated based on the length of their term, the volatility of the stock price in past periods, and other factors. See also Note 14. Share-Based Compensation Plans, of these consolidated financial statements for additional information related to share-based compensation. | |
A valuation model is not used for pricing restricted stock because the value is based on the closing price of the Company’s stock on the grant date. The amount of expense to be recognized for restricted stock grants is calculated as the number of shares granted multiplied by the stock price. The employee receives any dividends paid on the stock from the time of grant, but receives the restricted stock only when the vesting period has lapsed. | |
Earnings / (Loss) Per Share | ' |
Earnings / (Loss) Per Share | |
Basic earnings / (loss) per share (“EPS”) excludes dilution and is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS includes the effect of dilutive common stock equivalents that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. Diluted earnings per share also includes common stock equivalents related to the weighted average impact of the Series C Preferred Stock on an if-converted basis. In accordance with U.S. GAAP, when the Company’s net income available to common stockholders is in a loss position, the diluted earnings per share calculation excludes common stock equivalents, as their effect would be anti-dilutive. | |
Loss Contingencies | ' |
Loss Contingencies | |
Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Legal costs incurred to defend such matters are expensed as incurred. Management does not believe there now are such matters that will have a material effect on the consolidated financial statements. | |
Fair_Value_of_Assets_and_Liabi1
Fair Value of Assets and Liabilities (Tables) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||
Fair Value of Assets and Liabilities | ' | |||||||||||||||||||
Summary of the financial instruments the Company measures at fair value on a recurring basis | ' | |||||||||||||||||||
Fair Value Measurements Using | ||||||||||||||||||||
Quoted Prices in | Significant Other | Significant | ||||||||||||||||||
Active Markets for | Observable | Unobservable | ||||||||||||||||||
(dollar amounts in thousands) | Identical Assets | Inputs | Inputs | Assets At | ||||||||||||||||
As of December 31, 2013 | (Level 1) | (Level 2) | (Level 3) | Fair Value | ||||||||||||||||
Assets | ||||||||||||||||||||
Obligations of U.S. government agencies | $ | - | $ | 6,208 | $ | - | $ | 6,208 | ||||||||||||
Mortgage backed securities: | ||||||||||||||||||||
Agency | - | 182,931 | - | 182,931 | ||||||||||||||||
Non-agency | - | 11,032 | - | 11,032 | ||||||||||||||||
Obligations of state and municipal securities | - | 50,030 | - | 50,030 | ||||||||||||||||
Asset backed securities | - | 26,594 | - | 26,594 | ||||||||||||||||
Total assets measured on a recurring basis | $ | - | $ | 276,795 | $ | - | $ | 276,795 | ||||||||||||
As of December 31, 2012 | ||||||||||||||||||||
Assets | ||||||||||||||||||||
Obligations of U.S. government agencies | $ | - | $ | 7,567 | $ | - | $ | 7,567 | ||||||||||||
Mortgage backed securities: | ||||||||||||||||||||
Agency | - | 145,768 | - | 145,768 | ||||||||||||||||
Non-agency | - | 44,795 | - | 44,795 | ||||||||||||||||
Obligations of state and municipal securities | - | 68,968 | - | 68,968 | ||||||||||||||||
Asset backed securities | - | 20,584 | - | 20,584 | ||||||||||||||||
Total assets measured on a recurring basis | $ | - | $ | 287,682 | $ | - | $ | 287,682 | ||||||||||||
Summary of the changes in balance sheet carrying values associated with recurring Level 3 financial instruments | ' | |||||||||||||||||||
Purchases, | ||||||||||||||||||||
Beginning | Gain / (Loss) | Issuances, and | Sales and | Transfers to / (from) | Ending | |||||||||||||||
(dollar amounts in thousands) | Balance | Included in OCI (1) | Settlements | Maturities | Level III | Balance | ||||||||||||||
December 31, 2012 | ||||||||||||||||||||
Obligations of state and municipal securities | $ | 259 | $ | 3 | $ | - | $ | - | $ | (262 | ) | $ | - | |||||||
Agency mortgage backed securities | - | (191 | ) | 4,674 | - | (4,483 | ) | - | ||||||||||||
Non-agency mortgage backed securities | 3,074 | - | - | - | (3,074 | ) | - | |||||||||||||
(1) Realized or unrealized gains from the changes in values of Level 3 financial instruments represent gains from changes in values of financial instruments only for the period(s) in which the instruments were classified as Level 3. | ||||||||||||||||||||
Summary of assets the Company measures at fair value on a non-recurring basis | ' | |||||||||||||||||||
Fair Value Measurements Using | ||||||||||||||||||||
Quoted Prices in | Significant Other | Significant | ||||||||||||||||||
Active Markets for | Observable | Unobservable | ||||||||||||||||||
(dollar amounts in thousands) | Identical Assets | Inputs | Inputs | Assets At | Total | |||||||||||||||
As of December 31, 2013 | (Level 1) | (Level 2) | (Level 3) | Fair Value | Losses / (Gains) | |||||||||||||||
Assets | ||||||||||||||||||||
Impaired loans | ||||||||||||||||||||
Land | $ | - | $ | - | $ | 4,170 | $ | 4,170 | $ | (1,270 | ) | |||||||||
Total assets measured on a non-recurring basis | $ | - | $ | - | $ | 4,170 | $ | 4,170 | $ | (1,270 | ) | |||||||||
As of December 31, 2012 | ||||||||||||||||||||
Assets | ||||||||||||||||||||
Impaired loans | ||||||||||||||||||||
Commercial and industrial | $ | - | $ | 820 | $ | 213 | $ | 1,033 | $ | 1,941 | ||||||||||
Agriculture | - | 72 | - | 72 | 28 | |||||||||||||||
Construction | - | 1,656 | - | 1,656 | 460 | |||||||||||||||
Land | - | - | 2,048 | 2,048 | 3,802 | |||||||||||||||
Total assets measured on a non-recurring basis | $ | - | $ | 2,548 | $ | 2,261 | $ | 4,809 | $ | 6,231 | ||||||||||
Summary of the estimated fair value of financial instruments | ' | |||||||||||||||||||
Fair Value Measurements Using | ||||||||||||||||||||
Quoted Prices in | Significant Other | Significant | ||||||||||||||||||
Active Markets for | Observable | Unobservable | ||||||||||||||||||
(dollar amounts in thousands) | Carrying | Identical Assets | Inputs | Inputs | ||||||||||||||||
As of December 31, 2013 | Amount | (Level 1) | (Level 2) | (Level 3) | Fair Value | |||||||||||||||
Assets | ||||||||||||||||||||
Cash and cash equivalents | $ | 26,238 | $ | 26,238 | $ | - | $ | - | $ | 26,238 | ||||||||||
Investment securities available for sale | 276,795 | - | 276,795 | - | 276,795 | |||||||||||||||
Federal Home Loan Bank stock | 4,739 | - | - | - | N/A | |||||||||||||||
Loans receivable, net of deferred fees and costs | 826,203 | - | - | 827,105 | 827,105 | |||||||||||||||
Loans held for sale | 2,386 | - | 2,386 | - | 2,386 | |||||||||||||||
Accrued interest receivable | 4,027 | - | 1,397 | 2,630 | 4,027 | |||||||||||||||
Liabilities | ||||||||||||||||||||
Non interest-bearing deposits | 291,856 | 291,856 | - | - | 291,856 | |||||||||||||||
Interest-bearing deposits | 682,039 | - | 684,345 | - | 684,345 | |||||||||||||||
Federal Home Loan Bank advances | 88,500 | - | 86,990 | - | 86,990 | |||||||||||||||
Junior subordinated debentures | 8,248 | - | - | 7,595 | 7,595 | |||||||||||||||
Accrued interest payable | 239 | - | 239 | - | 239 | |||||||||||||||
As of December 31, 2012 | ||||||||||||||||||||
Assets | ||||||||||||||||||||
Cash and cash equivalents | $ | 34,116 | $ | 34,116 | $ | - | $ | - | $ | 34,116 | ||||||||||
Investments and mortgage-backed securities | 287,682 | - | 287,682 | - | 287,682 | |||||||||||||||
Federal Home Loan Bank stock | 4,575 | - | - | - | N/A | |||||||||||||||
Loans receivable, net of deferred fees and costs | 688,671 | - | 2,548 | 701,144 | 703,692 | |||||||||||||||
Loans held for sale | 22,549 | - | 22,549 | 22,549 | ||||||||||||||||
Accrued interest receivable | 3,915 | - | 1,497 | 2,418 | 3,915 | |||||||||||||||
Liabilities | ||||||||||||||||||||
Non interest-bearing deposits | 273,242 | 273,242 | - | - | 273,242 | |||||||||||||||
Interest-bearing deposits | 597,628 | - | 598,664 | - | 598,664 | |||||||||||||||
Federal Home Loan Bank advances | 66,500 | - | 67,059 | - | 67,059 | |||||||||||||||
Junior subordinated debentures | 8,248 | - | - | 7,078 | 7,078 | |||||||||||||||
Accrued interest payable | 192 | - | 192 | - | 192 | |||||||||||||||
Summary of off-balance sheet commitments | ' | |||||||||||||||||||
2013 | 2012 | |||||||||||||||||||
Notional | Cost to Cede | Notional | Cost to Cede | |||||||||||||||||
(dollar amounts in thousands) | Amount | or Assume | Amount | or Assume | ||||||||||||||||
Off-balance sheet instruments, commitments to extend credit and standby letters of credit | $ | 198,481 | $ | 1,985 | $ | 178,432 | $ | 1,784 | ||||||||||||
Investment_Securities_Tables
Investment Securities (Tables) | 12 Months Ended | |||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||
Investment Securities | ' | |||||||||||||||||||||
Schedule of amortized cost and fair values of the Company's investment securities, all of which are reported as available for sale | ' | |||||||||||||||||||||
(dollar amounts in thousands) | Gross | Gross | ||||||||||||||||||||
Amortized | Unrealized | Unrealized | ||||||||||||||||||||
As of December 31, 2013 | Cost | Gains | Losses | Fair Value | ||||||||||||||||||
Obligations of U.S. government agencies | $ | 6,243 | $ | 11 | $ | (46 | ) | $ | 6,208 | |||||||||||||
Mortgage backed securities | ||||||||||||||||||||||
U.S. government sponsored entities and agencies | 186,981 | 342 | (4,392 | ) | 182,931 | |||||||||||||||||
Non-agency | 10,924 | 156 | (48 | ) | 11,032 | |||||||||||||||||
State and municipal securities | 51,532 | 269 | (1,771 | ) | 50,030 | |||||||||||||||||
Asset backed securities | 26,935 | - | (341 | ) | 26,594 | |||||||||||||||||
Total | $ | 282,615 | $ | 778 | $ | (6,598 | ) | $ | 276,795 | |||||||||||||
As of December 31, 2012 | ||||||||||||||||||||||
Obligations of U.S. government agencies | $ | 7,307 | $ | 262 | $ | (2 | ) | $ | 7,567 | |||||||||||||
Mortgage backed securities | ||||||||||||||||||||||
U.S. government sponsored entities and agencies | 145,430 | 1,136 | (798 | ) | 145,768 | |||||||||||||||||
Non-agency | 43,402 | 1,578 | (185 | ) | 44,795 | |||||||||||||||||
State and municipal securities | 64,824 | 4,240 | (96 | ) | 68,968 | |||||||||||||||||
Asset backed securities | 20,049 | 568 | (33 | ) | 20,584 | |||||||||||||||||
Total | $ | 281,012 | $ | 7,784 | $ | (1,114 | ) | $ | 287,682 | |||||||||||||
Schedule of roll forward of the OTTI balances against the investment securities for both credit loss and all other factor components | ' | |||||||||||||||||||||
December 31, 2013 | December 31, 2012 | |||||||||||||||||||||
OTTI Related | OTTI Related | |||||||||||||||||||||
OTTI Related | to All Other | Total | OTTI Related | to All Other | Total | |||||||||||||||||
(dollars in thousands) | to Credit Loss | Factors | OTTI | to Credit Loss | Factors | OTTI | ||||||||||||||||
Balance, beginning of the period | $ | - | $ | - | $ | - | $ | 109 | $ | 361 | $ | 470 | ||||||||||
Less: losses related to OTTI securities sold | - | - | - | - | - | - | ||||||||||||||||
Change in value attributable to other factors | - | - | - | - | (191 | ) | (191 | ) | ||||||||||||||
Balance, end of the period | $ | - | $ | - | $ | - | $ | 109 | $ | 170 | $ | 279 | ||||||||||
Summary of investment securities in an unrealized loss position | ' | |||||||||||||||||||||
Securities In A Loss Position For | ||||||||||||||||||||||
(dollar amounts in thousands) | Less Than Twelve Months | Twelve Months or More | Total | |||||||||||||||||||
Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | |||||||||||||||||
As of December 31, 2013 | Value | Loss | Value | Loss | Value | Loss | ||||||||||||||||
Obligations of U.S. government agencies | $ | 2,773 | $ | (45 | ) | $ | 40 | $ | (1 | ) | $ | 2,813 | $ | (46 | ) | |||||||
Mortgage backed securities | ||||||||||||||||||||||
U.S. government sponsored entities and agencies | 118,554 | (3,140 | ) | 18,863 | (1,252 | ) | 137,417 | (4,392 | ) | |||||||||||||
Non-agency | 3,210 | (48 | ) | - | - | 3,210 | (48 | ) | ||||||||||||||
State and municipal securities | 32,967 | (1,675 | ) | 2,458 | (96 | ) | 35,425 | (1,771 | ) | |||||||||||||
Asset backed securities | 7,978 | (246 | ) | 9,747 | (95 | ) | 17,725 | (341 | ) | |||||||||||||
Total | $ | 165,482 | $ | (5,154 | ) | $ | 31,108 | $ | (1,444 | ) | $ | 196,590 | $ | (6,598 | ) | |||||||
As of December 31, 2012 | ||||||||||||||||||||||
Obligations of U.S. government agencies | $ | - | $ | - | $ | 44 | $ | (2 | ) | $ | 44 | $ | (2 | ) | ||||||||
Mortgage backed securities | ||||||||||||||||||||||
U.S. government sponsored entities and agencies | 83,092 | (798 | ) | - | - | 83,092 | (798 | ) | ||||||||||||||
Non-agency | 7,204 | (15 | ) | 719 | (170 | ) | 7,923 | (185 | ) | |||||||||||||
State and municipal securities | 9,813 | (96 | ) | - | - | 9,813 | (96 | ) | ||||||||||||||
Asset backed securities | 9,828 | (33 | ) | - | - | 9,828 | (33 | ) | ||||||||||||||
Total | $ | 109,937 | $ | (942 | ) | $ | 763 | $ | (172 | ) | $ | 110,700 | $ | (1,114 | ) | |||||||
Schedule of proceeds from the sales and calls of securities and the associated gains and losses | ' | |||||||||||||||||||||
December 31, | ||||||||||||||||||||||
(dollar amounts in thousands) | 2013 | 2012 | 2011 | |||||||||||||||||||
Proceeds | $ | 161,765 | $ | 141,166 | $ | 147,646 | ||||||||||||||||
Gross gains | $ | 5,599 | $ | 3,152 | $ | 3,173 | ||||||||||||||||
Gross losses | $ | (1,673 | ) | $ | (533 | ) | $ | (1,190 | ) | |||||||||||||
Schedule of amortized cost and fair values maturities of available for sale investment securities | ' | |||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||
Amortized | Amortized | |||||||||||||||||||||
(dollar amounts in thousands) | Cost | Fair Value | Cost | Fair Value | ||||||||||||||||||
Due one year or less | $ | 29,282 | $ | 28,999 | $ | 35,586 | $ | 35,714 | ||||||||||||||
Due after one year through five years | 90,023 | 88,760 | 97,899 | 99,522 | ||||||||||||||||||
Due after five years through ten years | 100,191 | 97,752 | 99,138 | 103,595 | ||||||||||||||||||
Due after ten years | 63,119 | 61,284 | 48,389 | 48,851 | ||||||||||||||||||
Total | $ | 282,615 | $ | 276,795 | $ | 281,012 | $ | 287,682 | ||||||||||||||
Summary of earnings on both taxable and tax-exempt investment securities | ' | |||||||||||||||||||||
For the years ended | ||||||||||||||||||||||
December 31, | ||||||||||||||||||||||
(dollar amounts in thousands) | 2013 | 2012 | 2011 | |||||||||||||||||||
Taxable earnings on investment securities | ||||||||||||||||||||||
Obligations of U.S. government agencies | $ | 106 | $ | 105 | $ | 190 | ||||||||||||||||
Mortgage backed securities | 3,441 | 3,776 | 4,288 | |||||||||||||||||||
State and municipal securities | 5 | 191 | 497 | |||||||||||||||||||
Corporate debt securities | - | 631 | 309 | |||||||||||||||||||
Asset backed securities | 427 | 241 | 20 | |||||||||||||||||||
Non-taxable earnings on investment securities | ||||||||||||||||||||||
State and municipal securities | 1,497 | 1,952 | 1,490 | |||||||||||||||||||
Total | $ | 5,476 | $ | 6,896 | $ | 6,794 |
Loans_Tables
Loans (Tables) | 12 Months Ended | |||||||||||||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||||||||||||
Loans | ' | |||||||||||||||||||||||||||||||
Summary of outstanding loan balances | ' | |||||||||||||||||||||||||||||||
December 31, | ||||||||||||||||||||||||||||||||
(dollar amounts in thousands) | 2013 | 2012 | ||||||||||||||||||||||||||||||
Real Estate Secured | ||||||||||||||||||||||||||||||||
Multi-family residential | $ | 31,140 | $ | 21,467 | ||||||||||||||||||||||||||||
Residential 1 to 4 family | 88,904 | 41,444 | ||||||||||||||||||||||||||||||
Home equity lines of credit | 31,178 | 31,863 | ||||||||||||||||||||||||||||||
Commercial | 432,203 | 372,592 | ||||||||||||||||||||||||||||||
Farmland | 50,414 | 25,642 | ||||||||||||||||||||||||||||||
Total real estate secured | 633,839 | 493,008 | ||||||||||||||||||||||||||||||
Commercial | ||||||||||||||||||||||||||||||||
Commercial and industrial | 119,121 | 125,340 | ||||||||||||||||||||||||||||||
Agriculture | 32,686 | 21,663 | ||||||||||||||||||||||||||||||
Other | 38 | 61 | ||||||||||||||||||||||||||||||
Total commercial | 151,845 | 147,064 | ||||||||||||||||||||||||||||||
Construction | ||||||||||||||||||||||||||||||||
Single family residential | 3,873 | 8,074 | ||||||||||||||||||||||||||||||
Single family residential - Spec. | 1,153 | 535 | ||||||||||||||||||||||||||||||
Multi-family | 736 | 778 | ||||||||||||||||||||||||||||||
Commercial | 7,937 | 10,329 | ||||||||||||||||||||||||||||||
Total construction | 13,699 | 19,716 | ||||||||||||||||||||||||||||||
Land | 24,523 | 24,664 | ||||||||||||||||||||||||||||||
Installment loans to individuals | 3,246 | 4,895 | ||||||||||||||||||||||||||||||
All other loans (including overdrafts) | 332 | 261 | ||||||||||||||||||||||||||||||
Total gross loans | 827,484 | 689,608 | ||||||||||||||||||||||||||||||
Deferred loan fees | (1,281 | ) | (937 | ) | ||||||||||||||||||||||||||||
Allowance for loan losses | (17,859 | ) | (18,118 | ) | ||||||||||||||||||||||||||||
Total net loans | $ | 808,344 | $ | 670,553 | ||||||||||||||||||||||||||||
Loans held for sale | 2,386 | 22,549 | ||||||||||||||||||||||||||||||
Summary of the Company's investment in impaired loans | ' | |||||||||||||||||||||||||||||||
The following table provides a summary of the Company’s investment in impaired loans as of and for the year ended December 31, 2013: | ||||||||||||||||||||||||||||||||
Unpaid | Impaired Loans | Specific | ||||||||||||||||||||||||||||||
Recorded | Principal | With Specific | Without Specific | Allowance for | ||||||||||||||||||||||||||||
(dollar amounts in thousands) | Investment (1) | Balance | Allowance | Allowance | Impaired Loans | |||||||||||||||||||||||||||
Real Estate Secured | ||||||||||||||||||||||||||||||||
Residential 1 to 4 family | $ | 944 | $ | 1,102 | $ | - | $ | 944 | $ | - | ||||||||||||||||||||||
Commercial | 901 | 1,646 | - | 901 | - | |||||||||||||||||||||||||||
Commercial | ||||||||||||||||||||||||||||||||
Commercial and industrial | 5,337 | 5,843 | 3,480 | 1,857 | 623 | |||||||||||||||||||||||||||
Agriculture | 789 | 824 | - | 789 | - | |||||||||||||||||||||||||||
Land | 7,927 | 12,106 | 6,706 | 1,221 | 2,532 | |||||||||||||||||||||||||||
Installment loans to individuals | 118 | 190 | - | 118 | - | |||||||||||||||||||||||||||
Totals | $ | 16,016 | $ | 21,711 | $ | 10,186 | $ | 5,830 | $ | 3,155 | ||||||||||||||||||||||
(1) The recorded investment in loans includes the book value of impaired loans as adjusted for net deferred costs and fees attributable to the impaired loans. | ||||||||||||||||||||||||||||||||
The following table provides a summary of the Company’s investment in impaired loans as of and for the year ended December 31, 2012: | ||||||||||||||||||||||||||||||||
Unpaid | Impaired Loans | Specific | ||||||||||||||||||||||||||||||
Recorded | Principal | With Specific | Without Specific | Allowance for | ||||||||||||||||||||||||||||
(dollar amounts in thousands) | Investment (1) | Balance | Allowance | Allowance | Impaired Loans | |||||||||||||||||||||||||||
Real Estate Secured | ||||||||||||||||||||||||||||||||
Residential 1 to 4 family | $ | 831 | $ | 1,035 | $ | 246 | $ | 585 | $ | 18 | ||||||||||||||||||||||
Home equity lines of credit | 58 | 152 | 58 | - | 7 | |||||||||||||||||||||||||||
Commercial | 933 | 1,799 | 42 | 891 | - | |||||||||||||||||||||||||||
Farmland | 1,077 | 1,089 | - | 1,077 | - | |||||||||||||||||||||||||||
Commercial | ||||||||||||||||||||||||||||||||
Commercial and industrial | 4,337 | 4,813 | 3,410 | 927 | 2,172 | |||||||||||||||||||||||||||
Agriculture | 907 | 1,235 | 30 | 877 | 13 | |||||||||||||||||||||||||||
Construction | ||||||||||||||||||||||||||||||||
Commercial | 1,380 | 2,508 | - | 1,380 | - | |||||||||||||||||||||||||||
Land | 7,504 | 11,307 | 6,106 | 1,398 | 3,829 | |||||||||||||||||||||||||||
Installment loans to individuals | 285 | 333 | 285 | - | 22 | |||||||||||||||||||||||||||
Totals | $ | 17,312 | $ | 24,271 | $ | 10,177 | $ | 7,135 | $ | 6,061 | ||||||||||||||||||||||
(1) The recorded investment in loans includes the book value of impaired loans as adjusted for net deferred costs and fees attributable to the impaired loans. | ||||||||||||||||||||||||||||||||
Schedule of average recorded investment and the interest income recognized on impaired loans | ' | |||||||||||||||||||||||||||||||
For the Years Ended December 31, | ||||||||||||||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||||||||||||||
Average | Interest | Average | Interest | Average | Interest | |||||||||||||||||||||||||||
Recorded | Income | Recorded | Income | Recorded | Income | |||||||||||||||||||||||||||
(dollar amounts in thousands) | Investment | Recognized | Investment | Recognized | Investment | Recognized | ||||||||||||||||||||||||||
Real Estate Secured | ||||||||||||||||||||||||||||||||
Residential 1 to 4 family | $ | 870 | $ | 16 | $ | 810 | $ | - | $ | 582 | $ | - | ||||||||||||||||||||
Home equity lines of credit | 28 | - | 303 | - | 696 | - | ||||||||||||||||||||||||||
Commercial | 775 | 5 | 2,851 | - | 8,903 | - | ||||||||||||||||||||||||||
Farmland | - | - | 542 | - | 433 | - | ||||||||||||||||||||||||||
Commercial | ||||||||||||||||||||||||||||||||
Commercial and industrial | 4,684 | 52 | 4,269 | 4 | 2,790 | 5 | ||||||||||||||||||||||||||
Agriculture | 936 | - | 1,655 | - | 1,244 | - | ||||||||||||||||||||||||||
Construction | ||||||||||||||||||||||||||||||||
Single family residential | - | - | - | - | 1,115 | - | ||||||||||||||||||||||||||
Commercial | - | - | 1,288 | - | - | - | ||||||||||||||||||||||||||
Land | 7,878 | 93 | 7,187 | - | 3,224 | - | ||||||||||||||||||||||||||
Installment loans to individuals | 68 | - | 138 | - | 18 | - | ||||||||||||||||||||||||||
Totals | $ | 15,239 | $ | 166 | $ | 19,043 | $ | 4 | $ | 19,005 | $ | 5 | ||||||||||||||||||||
Schedule of loan modifications by class which resulted in TDRs | ' | |||||||||||||||||||||||||||||||
For the Year Ended | ||||||||||||||||||||||||||||||||
December 31, 2013 | ||||||||||||||||||||||||||||||||
Pre-Modification | Post-Modification | |||||||||||||||||||||||||||||||
Number of | Outstanding Recorded | Outstanding Recorded | ||||||||||||||||||||||||||||||
(dollar amounts in thousands) | TDRs | Investment | Investment | |||||||||||||||||||||||||||||
Trouble Debt Restructurings | ||||||||||||||||||||||||||||||||
Real Estate Secured | ||||||||||||||||||||||||||||||||
Residential 1 to 4 family | 1 | $ | 139 | $ | 139 | |||||||||||||||||||||||||||
Commercial real estate | 2 | 339 | 339 | |||||||||||||||||||||||||||||
Commercial | ||||||||||||||||||||||||||||||||
Commercial and industrial | 10 | 2,141 | 2,141 | |||||||||||||||||||||||||||||
Agriculture | 2 | 67 | 67 | |||||||||||||||||||||||||||||
Land | 1 | 1,254 | 1,254 | |||||||||||||||||||||||||||||
Totals | 16 | $ | 3,940 | $ | 3,940 | |||||||||||||||||||||||||||
For the Year Ended | ||||||||||||||||||||||||||||||||
December 31, 2012 | ||||||||||||||||||||||||||||||||
Pre-Modification | Post-Modification | |||||||||||||||||||||||||||||||
Number of | Outstanding Recorded | Outstanding Recorded | ||||||||||||||||||||||||||||||
(dollar amounts in thousands) | TDRs | Investment | Investment | |||||||||||||||||||||||||||||
Trouble Debt Restructurings | ||||||||||||||||||||||||||||||||
Real Estate Secured | ||||||||||||||||||||||||||||||||
Residential 1 to 4 family | 3 | $ | 563 | $ | 563 | |||||||||||||||||||||||||||
Farmland | 1 | 1,089 | 1,089 | |||||||||||||||||||||||||||||
Commercial | ||||||||||||||||||||||||||||||||
Commercial and industrial | 12 | 2,973 | 2,883 | |||||||||||||||||||||||||||||
Construction | ||||||||||||||||||||||||||||||||
Land | 3 | 8,433 | 7,063 | |||||||||||||||||||||||||||||
. | ||||||||||||||||||||||||||||||||
Totals | 19 | $ | 13,058 | $ | 11,598 | |||||||||||||||||||||||||||
Summary of loans by class modified as troubled debt restructurings | ' | |||||||||||||||||||||||||||||||
For the Year Ended | ||||||||||||||||||||||||||||||||
December 31, 2013 | ||||||||||||||||||||||||||||||||
Number of | Recorded | |||||||||||||||||||||||||||||||
(dollar amounts in thousands) | TDRs | Investment | ||||||||||||||||||||||||||||||
Trouble Debt Restructurings | ||||||||||||||||||||||||||||||||
That Subsequently Defaulted | ||||||||||||||||||||||||||||||||
Real Estate Secured | ||||||||||||||||||||||||||||||||
Residential 1 to 4 family | 1 | $ | 97 | |||||||||||||||||||||||||||||
Commercial | ||||||||||||||||||||||||||||||||
Commercial and industrial | 3 | 843 | ||||||||||||||||||||||||||||||
Agriculture | 1 | 18 | ||||||||||||||||||||||||||||||
Totals | 5 | $ | 958 | |||||||||||||||||||||||||||||
For the Year Ended | ||||||||||||||||||||||||||||||||
December 31, 2012 | ||||||||||||||||||||||||||||||||
Number of | Recorded | |||||||||||||||||||||||||||||||
(dollar amounts in thousands) | TDRs | Investment | ||||||||||||||||||||||||||||||
Trouble Debt Restructurings | ||||||||||||||||||||||||||||||||
That Subsequently Defaulted | ||||||||||||||||||||||||||||||||
Commercial and industrial | 3 | $ | 254 | |||||||||||||||||||||||||||||
Totals | 3 | $ | 254 | |||||||||||||||||||||||||||||
Schedule of loan portfolio by the Company's internal risk grading system as well as certain other information concerning the credit quality of the loan portfolio | ' | |||||||||||||||||||||||||||||||
31-Dec-13 | Credit Risk Grades | Days Past Due | ||||||||||||||||||||||||||||||
Total Gross | Special | 90+ and Still | Non- | Accruing | ||||||||||||||||||||||||||||
(dollar amounts in thousands) | Loans | Pass | Mention | Substandard | Doubtful | 30-59 | 60-89 | Accruing | Accruing | TDR | ||||||||||||||||||||||
Real Estate Secured | ||||||||||||||||||||||||||||||||
Multi-family residential | $ | 31,140 | $ | 30,560 | $ | - | $ | 580 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||
Residential 1 to 4 family | 88,904 | 87,350 | 490 | 1,064 | - | - | - | - | 449 | 499 | ||||||||||||||||||||||
Home equity lines of credit | 31,178 | 31,021 | - | 157 | - | - | - | - | - | - | ||||||||||||||||||||||
Commercial | 432,203 | 414,058 | 3,574 | 14,571 | - | - | - | - | 672 | 225 | ||||||||||||||||||||||
Farmland | 50,414 | 47,988 | 975 | 1,451 | - | - | - | - | - | - | ||||||||||||||||||||||
Commercial | ||||||||||||||||||||||||||||||||
Commercial and industrial | 119,121 | 105,991 | 5,276 | 7,854 | - | 100 | - | - | 2,180 | 3,119 | ||||||||||||||||||||||
Agriculture | 32,686 | 31,279 | 196 | 1,211 | - | - | - | - | 789 | - | ||||||||||||||||||||||
Other | 38 | 38 | - | - | - | - | - | - | - | - | ||||||||||||||||||||||
Construction | ||||||||||||||||||||||||||||||||
Single family residential | 3,873 | 3,873 | - | - | - | - | - | - | - | - | ||||||||||||||||||||||
Single family residential - Spec. | 1,153 | 1,153 | - | - | - | - | - | - | - | - | ||||||||||||||||||||||
Multi-family | 736 | 736 | - | - | - | - | - | - | - | - | ||||||||||||||||||||||
Commercial | 7,937 | 7,937 | - | - | - | - | - | - | - | - | ||||||||||||||||||||||
Land | 24,523 | 15,244 | 862 | 8,417 | - | - | - | - | 5,910 | 2,010 | ||||||||||||||||||||||
Installment loans to individuals | 3,246 | 3,050 | 10 | 186 | - | - | 2 | - | 117 | - | ||||||||||||||||||||||
All other loans (including overdrafts) | 332 | 332 | - | - | - | - | - | - | - | - | ||||||||||||||||||||||
Totals | $ | 827,484 | $ | 780,610 | $ | 11,383 | $ | 35,491 | $ | - | $ | 100 | $ | 2 | $ | - | $ | 10,117 | $ | 5,853 | ||||||||||||
December 31, 2012 | Credit Risk Grades | Days Past Due | ||||||||||||||||||||||||||||||
Total Gross | Special | 90+ and Still | Non- | Accruing | ||||||||||||||||||||||||||||
(dollar amounts in thousands) | Loans | Pass | Mention | Substandard | Doubtful | 30-59 | 60-89 | Accruing | Accruing | TDR | ||||||||||||||||||||||
Real Estate Secured | ||||||||||||||||||||||||||||||||
Multi-family residential | $ | 21,467 | $ | 20,869 | $ | - | $ | 598 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||
Residential 1 to 4 family | 41,444 | 40,234 | 6 | 1,204 | - | 199 | - | - | 835 | - | ||||||||||||||||||||||
Home equity lines of credit | 31,863 | 30,808 | - | 1,055 | - | - | 47 | - | 58 | - | ||||||||||||||||||||||
Commercial | 372,592 | 332,968 | 14,235 | 25,389 | - | - | - | - | 928 | - | ||||||||||||||||||||||
Farmland | 25,642 | 20,492 | 3,260 | 1,890 | - | - | - | - | 1,077 | - | ||||||||||||||||||||||
Commercial | ||||||||||||||||||||||||||||||||
Commercial and industrial | 125,340 | 114,126 | 2,245 | 8,969 | - | 446 | 104 | 15 | 4,657 | 17 | ||||||||||||||||||||||
Agriculture | 21,663 | 19,771 | 106 | 1,786 | - | - | - | - | 907 | - | ||||||||||||||||||||||
Other | 61 | 61 | - | - | - | - | - | - | - | - | ||||||||||||||||||||||
Construction | - | |||||||||||||||||||||||||||||||
Single family residential | 8,074 | 8,074 | - | - | - | - | - | - | - | - | ||||||||||||||||||||||
Single family residential - Spec. | 535 | 535 | - | - | - | - | - | - | - | - | ||||||||||||||||||||||
Multi-family | 778 | 778 | - | - | - | - | - | - | - | - | ||||||||||||||||||||||
Commercial | 10,329 | 8,469 | - | 1,860 | - | - | - | - | 1,380 | - | ||||||||||||||||||||||
Land | 24,664 | 12,461 | 4,124 | 8,079 | - | 50 | - | - | 7,182 | - | ||||||||||||||||||||||
Installment loans to individuals | 4,895 | 4,365 | 230 | 300 | - | - | - | - | 285 | - | ||||||||||||||||||||||
All other loans (including overdrafts) | 261 | 261 | - | - | - | - | - | - | - | - | ||||||||||||||||||||||
Totals | $ | 689,608 | $ | 614,272 | $ | 24,206 | $ | 51,130 | $ | - | $ | 695 | $ | 151 | $ | 15 | $ | 17,309 | $ | 17 |
Allowance_for_Loan_Losses_ALLL1
Allowance for Loan Losses ("ALLL") (Tables) | 12 Months Ended | ||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||
Allowance for Loan Losses ("ALLL") | ' | ||||||||||||||||||||||
Summary of activity in the allowance attributed to various segments in the loan portfolio | ' | ||||||||||||||||||||||
Real Estate | All Other | ||||||||||||||||||||||
(dollar amounts in thousands) | Secured | Commercial | Construction | Land | Installment | Loans | Total | ||||||||||||||||
Balance, December 31, 2012 | $ | 6,879 | $ | 6,154 | $ | 313 | $ | 4,670 | $ | 64 | $ | 38 | $ | 18,118 | |||||||||
Charge-offs | (131 | ) | (1,281 | ) | (169 | ) | (34 | ) | (411 | ) | - | (2,026 | ) | ||||||||||
Recoveries | 361 | 1,112 | 153 | 73 | 68 | - | 1,767 | ||||||||||||||||
Provisions for loan losses | 2,048 | (1,128 | ) | (35 | ) | (1,258 | ) | 379 | (6 | ) | - | ||||||||||||
Balance, December 31, 2013 | $ | 9,157 | $ | 4,857 | $ | 262 | $ | 3,451 | $ | 100 | $ | 32 | $ | 17,859 | |||||||||
Real Estate | All Other | ||||||||||||||||||||||
(dollar amounts in thousands) | Secured | Commercial | Construction | Land | Installment | Loans | Total | ||||||||||||||||
Balance, December 31, 2011 | $ | 9,645 | $ | 6,549 | $ | 488 | $ | 2,416 | $ | 175 | $ | 41 | $ | 19,314 | |||||||||
Charge-offs | (2,482 | ) | (5,134 | ) | (1,128 | ) | (2,168 | ) | (184 | ) | (137 | ) | (11,233 | ) | |||||||||
Recoveries | 1,253 | 1,054 | 1 | 22 | 23 | 3 | 2,356 | ||||||||||||||||
Provisions for loan losses | (1,537 | ) | 3,685 | 952 | 4,400 | 50 | 131 | 7,681 | |||||||||||||||
Balance, December 31, 2012 | $ | 6,879 | $ | 6,154 | $ | 313 | $ | 4,670 | $ | 64 | $ | 38 | $ | 18,118 | |||||||||
Real Estate | All Other | ||||||||||||||||||||||
(dollar amounts in thousands) | Secured | Commercial | Construction | Land | Installment | Loans | Total | ||||||||||||||||
Balance, December 31, 2010 | $ | 11,885 | $ | 9,507 | $ | 1,353 | $ | 2,000 | $ | 166 | $ | 29 | $ | 24,940 | |||||||||
Charge-offs | (8,325 | ) | (4,426 | ) | (338 | ) | (793 | ) | (204 | ) | - | (14,086 | ) | ||||||||||
Recoveries | 360 | 1,669 | 112 | 207 | 49 | - | 2,397 | ||||||||||||||||
Provisions for loan losses | 5,725 | (201 | ) | (639 | ) | 1,002 | 164 | 12 | 6,063 | ||||||||||||||
Balance, December 31, 2011 | $ | 9,645 | $ | 6,549 | $ | 488 | $ | 2,416 | $ | 175 | $ | 41 | $ | 19,314 | |||||||||
Summary of comparative metrics about the allowance attributed to various segments in the loan portfolio | ' | ||||||||||||||||||||||
As of December 31, 2013 | |||||||||||||||||||||||
Real Estate | All Other | ||||||||||||||||||||||
(dollar amounts in thousands) | Secured | Commercial | Construction | Land | Installment | Loans | Total | ||||||||||||||||
Amount of allowance attributed to: | |||||||||||||||||||||||
Specifically evaluated impaired loans | $ | - | $ | 623 | $ | - | $ | 2,532 | $ | - | $ | - | $ | 3,155 | |||||||||
General portfolio allocation | $ | 9,157 | $ | 4,234 | $ | 262 | $ | 919 | $ | 100 | $ | 32 | $ | 14,704 | |||||||||
Loans individually evaluated for impairment | $ | 1,462 | $ | 5,291 | $ | - | $ | 7,696 | $ | - | $ | - | $ | 14,449 | |||||||||
Loans collectively evaluated for impairment | $ | 632,377 | $ | 146,554 | $ | 13,699 | $ | 16,827 | $ | 3,246 | $ | 332 | $ | 813,035 | |||||||||
General reserves to total loans collectively evaluated for impairment | 1.45% | 2.89% | 1.91% | 5.46% | 3.08% | 9.64% | 1.81% | ||||||||||||||||
Total gross loans | $ | 633,839 | $ | 151,845 | $ | 13,699 | $ | 24,523 | $ | 3,246 | $ | 332 | $ | 827,484 | |||||||||
Total allowance to gross loans | 1.44% | 3.20% | 1.91% | 14.07% | 3.08% | 9.64% | 2.16% | ||||||||||||||||
As of December 31, 2012 | |||||||||||||||||||||||
Real Estate | All Other | ||||||||||||||||||||||
(dollar amounts in thousands) | Secured | Commercial | Construction | Land | Installment | Loans | Total | ||||||||||||||||
Amount of allowance attributed to: | |||||||||||||||||||||||
Specifically evaluated impaired loans | $ | 25 | $ | 2,185 | $ | - | $ | 3,829 | $ | 22 | $ | - | $ | 6,061 | |||||||||
General portfolio allocation | $ | 6,854 | $ | 3,969 | $ | 313 | $ | 841 | $ | 42 | $ | 38 | $ | 12,057 | |||||||||
Loans individually evaluated for impairment | $ | 2,898 | $ | 5,596 | $ | 1,380 | $ | 7,182 | $ | 285 | $ | - | $ | 17,341 | |||||||||
Loans collectively evaluated for impairment | $ | 490,110 | $ | 141,468 | $ | 18,336 | $ | 17,482 | $ | 4,610 | $ | 261 | $ | 672,267 | |||||||||
General reserves to total loans collectively evaluated for impairment | 1.40% | 2.81% | 1.71% | 4.81% | 0.91% | 14.56% | 1.79% | ||||||||||||||||
Total gross loans | $ | 493,008 | $ | 147,064 | $ | 19,716 | $ | 24,664 | $ | 4,895 | $ | 261 | $ | 689,608 | |||||||||
Total allowance to gross loans | 1.40% | 4.18% | 1.59% | 18.93% | 1.31% | 14.56% | 2.63% |
Property_Premises_and_Equipmen1
Property, Premises and Equipment (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Property, Premises and Equipment | ' | |||||||
Schedule of property, premises and equipment | ' | |||||||
December 31, | ||||||||
(dollar amounts in thousands) | 2013 | 2012 | ||||||
Land | $ | 3,633 | $ | 3,633 | ||||
Furniture and equipment | 5,751 | 9,086 | ||||||
Building and improvements | 15,347 | 15,187 | ||||||
Construction in progress | 9,018 | 84 | ||||||
Total cost | 33,749 | 27,990 | ||||||
Less: accumulated depreciation and amortization | 9,529 | 12,034 | ||||||
Total property, premises and equipment | $ | 24,220 | $ | 15,956 |
Deferred_Tax_Assets_and_Income1
Deferred Tax Assets and Income Taxes (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Deferred Tax Assets and Income Taxes | ' | ||||||||||||||||
Summary of Company's net deferred tax asset | ' | ||||||||||||||||
December 31, | |||||||||||||||||
(dollar amounts in thousands) | 2013 | 2012 | |||||||||||||||
Deferred tax assets | |||||||||||||||||
Reserves for loan losses | $ | 8,679 | $ | 14,348 | |||||||||||||
Forgone interest on non-accrual loans | 933 | 884 | |||||||||||||||
Fixed assets | 411 | 405 | |||||||||||||||
Accruals | 1,025 | 792 | |||||||||||||||
Alternative minimum tax credit | 2,855 | 2,153 | |||||||||||||||
Deferred income | 2,190 | 1,838 | |||||||||||||||
Deferred compensation | 1,603 | 1,477 | |||||||||||||||
Net operating loss carryforward | 6 | 907 | |||||||||||||||
Other than temporary impairment | - | 45 | |||||||||||||||
Investment securities valuation | 2,395 | - | |||||||||||||||
Realized built-in loss subject to § 382 | 2,228 | 3,234 | |||||||||||||||
Charitable contribution | - | 61 | |||||||||||||||
State deferred tax | 961 | 59 | |||||||||||||||
Total deferred tax assets | 23,286 | 26,203 | |||||||||||||||
Deferred tax liabilities | |||||||||||||||||
Fair value adjustment for purchased assets | 330 | 455 | |||||||||||||||
Investment securities valuation | - | 2,745 | |||||||||||||||
Deferred costs, prepaids and FHLB advances | 1,332 | 1,070 | |||||||||||||||
Total deferred tax liabilities | 1,662 | 4,270 | |||||||||||||||
Net deferred tax assets | $ | 21,624 | $ | 21,933 | |||||||||||||
Summary for the current and deferred amounts of the Company's income tax provision / (benefit) | ' | ||||||||||||||||
For The Years Ended December 31, | |||||||||||||||||
(dollar amounts in thousands) | 2013 | 2012 | 2011 | ||||||||||||||
Current: | |||||||||||||||||
Federal | $ | 1,181 | $ | 3,083 | $ | (524 | ) | ||||||||||
State | 368 | 1,264 | 504 | ||||||||||||||
Total current provision | 1,549 | 4,347 | (20 | ) | |||||||||||||
Deferred: | |||||||||||||||||
Federal | 3,816 | (455 | ) | 2,852 | |||||||||||||
State | 1,632 | (85 | ) | 496 | |||||||||||||
Total deferred provision / (benefit) | 5,448 | (540 | ) | 3,348 | |||||||||||||
Deferred Tax Valuation Allowance: | |||||||||||||||||
Federal | - | (3,662 | ) | (1,110 | ) | ||||||||||||
State | - | (1,943 | ) | (390 | ) | ||||||||||||
Total deferred tax valuation allowance change | - | (5,605 | ) | (1,500 | ) | ||||||||||||
Total income tax provision / (benefit) | $ | 6,997 | $ | (1,798 | ) | $ | 1,828 | ||||||||||
Schedule of reconciliation of the statutory federal income tax expense / (benefit) rate to the Company's effective income tax (benefit) / expense and rate | ' | ||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
(dollar amounts in thousands) | Amount | Percent | Amount | Percent | Amount | Percent | |||||||||||
Tax provision at federal statutory tax rate | $ | 6,243 | 35 | $ | 3,934 | 35 | $ | 3,344 | 35 | ||||||||
State income taxes, net of federal income tax benefit | 1,300 | 7.3 | 766 | 6.8 | 650 | 6.8 | |||||||||||
Change in deferred tax asset valuation allowance | - | - | (5,605 | ) | (49.9 | ) | (1,500 | ) | (15.7 | ) | |||||||
Bank owned life insurance | (167 | ) | (0.9 | ) | (180 | ) | (1.6 | ) | (183 | ) | (1.9 | ) | |||||
Tax exempt income, net of interest expense | (610 | ) | (3.4 | ) | (608 | ) | (5.4 | ) | (545 | ) | (5.7 | ) | |||||
Merger and integration | 271 | 1.5 | - | - | - | - | |||||||||||
Other, net | (40 | ) | (0.3 | ) | (105 | ) | (0.9 | ) | 62 | 0.6 | |||||||
Total income tax provision / (benefit) | $ | 6,997 | 39.2 | $ | (1,798 | ) | (16.0 | ) | $ | 1,828 | 19.1 |
Goodwill_and_Other_Intangible_1
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Goodwill and Other Intangible Assets | ' | ||||||||||
Summary of the gross carrying amount, accumulated amortization and net carrying amount of core deposit intangibles and an estimate for future amortization | ' | ||||||||||
Gross Carrying | Accumulated | Net Carrying | |||||||||
(dollar amounts in thousands) | Amount | Amortization | Amount | ||||||||
Core deposit intangible | $ | 4,201 | $ | (2,857 | ) | $ | 1,344 | ||||
Beginning | Estimated | Ending | |||||||||
Period | Balance | Amortization | Balance | ||||||||
Year 2014 | $ | 1,344 | $ | (400 | ) | $ | 944 | ||||
Year 2015 | $ | 944 | $ | (400 | ) | $ | 544 | ||||
Year 2016 | $ | 544 | $ | (371 | ) | $ | 173 | ||||
Year 2017 | $ | 173 | $ | (58 | ) | $ | 115 | ||||
Year 2018 | $ | 115 | $ | (58 | ) | $ | 58 | ||||
Year 2019 | $ | 58 | $ | (58 | ) | $ | (0 | ) |
Other_Real_Estate_Owned_OREO_T
Other Real Estate Owned ("OREO") (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Other Real Estate Owned ("OREO") | ' | ||||||||||||||||
Summary of the changes in the balance of other real estate owned | ' | ||||||||||||||||
Balance | Balance | ||||||||||||||||
December 31, | December 31, | ||||||||||||||||
(dollar amounts in thousands) | 2012 | Additions | Disposals | Writedowns | 2013 | ||||||||||||
Real Estate Secured | |||||||||||||||||
Commercial | $ | - | $ | 1,374 | $ | (1,374 | ) | $ | - | $ | - | ||||||
Totals | $ | - | $ | 1,374 | $ | (1,374 | ) | $ | - | $ | - | ||||||
Balance | Balance | ||||||||||||||||
December 31, | December 31, | ||||||||||||||||
(dollar amounts in thousands) | 2011 | Additions | Disposals | Writedowns | 2012 | ||||||||||||
Real Estate Secured | |||||||||||||||||
Residential 1 to 4 family | $ | - | $ | 607 | $ | (576 | ) | $ | (31 | ) | $ | - | |||||
Commercial | 215 | - | (215 | ) | - | - | |||||||||||
Construction | |||||||||||||||||
Single family residential - Spec. | 423 | - | (397 | ) | (26 | ) | - | ||||||||||
Tract | 100 | - | (100 | ) | - | - | |||||||||||
Land | 179 | 162 | (300 | ) | (41 | ) | - | ||||||||||
Totals | $ | 917 | $ | 769 | $ | (1,588 | ) | $ | (98 | ) | $ | - | |||||
Balance | Balance | ||||||||||||||||
December 31, | December 31, | ||||||||||||||||
(dollar amounts in thousands) | 2010 | Additions | Disposals | Writedowns | 2011 | ||||||||||||
Real Estate Secured | |||||||||||||||||
Residential 1 to 4 family | $ | 160 | $ | 865 | $ | (1,025 | ) | $ | - | $ | - | ||||||
Commercial | 3,953 | 2,578 | (5,500 | ) | (816 | ) | 215 | ||||||||||
Commercial | |||||||||||||||||
Commercial and industrial | 464 | - | (464 | ) | - | - | |||||||||||
Construction | |||||||||||||||||
Single family residential - Spec. | 475 | - | - | (52 | ) | 423 | |||||||||||
Tract | 251 | - | (117 | ) | (34 | ) | 100 | ||||||||||
Land | 1,365 | 41 | (994 | ) | (233 | ) | 179 | ||||||||||
Totals | $ | 6,668 | $ | 3,484 | $ | (8,100 | ) | $ | (1,135 | ) | $ | 917 |
Deposits_Tables
Deposits (Tables) | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||||
Deposits. | ' | |||||||||||||||||||||||
Summary for the maturity of the Bank's time certificates of deposit | ' | |||||||||||||||||||||||
Amount Due | ||||||||||||||||||||||||
(dollar amounts in thousands) | 2014 | 2015 | 2016 | 2017 | 2018 | Over 5 Years | Total | |||||||||||||||||
Time certificates of deposit | $ | 131,494 | $ | 37,538 | $ | 11,887 | $ | 9,024 | $ | 15,920 | $ | 13,958 | $ | 219,821 | ||||||||||
Borrowings_Tables
Borrowings (Tables) | 12 Months Ended | ||||||||||||||
Dec. 31, 2013 | |||||||||||||||
Borrowings | ' | ||||||||||||||
Schedule of FHLB principal payment requirements | ' | ||||||||||||||
For the Year Ended (dollar amounts in thousands) | |||||||||||||||
2014 | $ | 29,000 | |||||||||||||
2015 | - | ||||||||||||||
2016 | 10,500 | ||||||||||||||
2017 | 13,500 | ||||||||||||||
2018 | 5,000 | ||||||||||||||
Due More Than 5 Years | 30,500 | ||||||||||||||
Total | $ | 88,500 | |||||||||||||
Summary of securities the Company has issued to Heritage Oaks Capital Trust II | ' | ||||||||||||||
Amount | Current | Issue | Scheduled | Initial | |||||||||||
(dollar amounts in thousands) | Borrowed | Rate | Date | Maturity | Call Date | Rate Type | |||||||||
Heritage Oaks Capital Trust II | $ | 8,248 | 1.97 | % | 27-Oct-06 | Aug-37 | 11-Nov | Variable 3-month LIBOR + 1.72% |
ShareBased_Compensation_Plans_
Share-Based Compensation Plans (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Share-Based Compensation Plans | ' | |||||||||||||
Summary of activity related to the Company's restricted stock granted, vested and forfeited during the year | ' | |||||||||||||
Number of | Average Grant | |||||||||||||
Shares | Date Fair Value | |||||||||||||
Balance December 31, 2012 | 196,850 | $ | 4.27 | |||||||||||
Granted | 72,786 | 6.26 | ||||||||||||
Vested | (58,715 | ) | 4.43 | |||||||||||
Forfeited/expired | (15,873 | ) | 5.42 | |||||||||||
Balance December 31, 2013 | 195,048 | $ | 4.87 | |||||||||||
Summary of activity related to options granted, exercised, and forfeited | ' | |||||||||||||
Weighted | Options | Weighted Average | ||||||||||||
Number of | Average | Options | Available for | Fair Value | ||||||||||
Shares | Exercise Price | Exercisable | Grant | Options Granted | ||||||||||
Balance at December 31, 2012 | 523,129 | $ | 6.11 | 255,112 | 1,715,616 | $ | 2.93 | |||||||
Granted | 161,446 | 6.28 | ||||||||||||
Forfeited | (84,286 | ) | 5.78 | |||||||||||
Exercised | (33,757 | ) | 4.09 | |||||||||||
Expired | (4,275 | ) | 4.62 | |||||||||||
Balance at December 31, 2013 | 562,257 | $ | 6.34 | 293,586 | 1,593,616 | $ | 3.08 | |||||||
Summary of the aggregate intrinsic value of options vested and expected to vest and exercisable | ' | |||||||||||||
Weighted Average | ||||||||||||||
Weighted | Remaining | Aggregate | ||||||||||||
Average | Contractual Life | Intrinsic | ||||||||||||
Shares | Exercise Price | (Years) | Value | |||||||||||
Vested or expected to vest | 543,260 | $ | 6.35 | 7.14 | $ | 1,157,995 | ||||||||
Exercisable at December 31, 2013 | 293,586 | $ | 6.71 | 5.52 | $ | 765,228 | ||||||||
Summary of recognized and unrecognized share based compensation expense | ' | |||||||||||||
For The Years Ended December 31, | ||||||||||||||
(dollar amounts in thousands) | 2013 | 2012 | 2011 | |||||||||||
Share-based compensation expense: | ||||||||||||||
Stock option expense | $ | 240 | $ | 127 | $ | 241 | ||||||||
Restricted stock expense | 293 | 204 | 58 | |||||||||||
Total expense | $ | 533 | $ | 331 | $ | 299 | ||||||||
Unrecognized compensation expense: | ||||||||||||||
Stock option expense | $ | 645 | $ | 529 | $ | 365 | ||||||||
Restricted stock expense | 651 | 573 | 232 | |||||||||||
Total unrecognized expense | $ | 1,296 | $ | 1,102 | $ | 597 | ||||||||
Schedule of assumptions used in the calculation of weighted average fair value of options granted | ' | |||||||||||||
2013 | 2012 | 2011 | ||||||||||||
Expected volatility | 55.33% | 52.26% | 50.73% | |||||||||||
Expected term (years) | 6 | 7 | 7 | |||||||||||
Dividend yield | 0.00% | 0.00% | 0.00% | |||||||||||
Risk free rate | 1.54% | 1.11% | 2.74% | |||||||||||
Weighted-average grant date fair value | $ | 3.30 | $ | 2.87 | $ | 2.00 | ||||||||
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 12 Months Ended | ||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||
Earnings Per Share | ' | ||||||||||||||||||||||
Schedule of calculation of both basic and diluted earnings per common share | ' | ||||||||||||||||||||||
For The Years Ended December 31, | |||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||
Net | Net | Net | |||||||||||||||||||||
(dollar amounts in thousands except per share data) | Income | Shares | Income | Shares | Income | Shares | |||||||||||||||||
Net income | $ | 10,841 | $ | 13,037 | $ | 7,725 | |||||||||||||||||
Dividends and accretion on preferred stock | (898 | ) | (1,470 | ) | (1,358 | ) | |||||||||||||||||
Net income available to common shareholders | $ | 9,943 | $ | 11,567 | $ | 6,367 | |||||||||||||||||
Weighted average shares outstanding | 25,152,054 | 25,081,462 | 25,048,477 | ||||||||||||||||||||
Basic earnings per common share | $ | 0.4 | $ | 0.46 | $ | 0.25 | |||||||||||||||||
Dilutive effect of share-based compensation awards, | |||||||||||||||||||||||
common stock warrants, and convertible perpetual preferred stock | 1,390,635 | 1,320,408 | 1,206,268 | ||||||||||||||||||||
Weighted average diluted shares outstanding | 26,542,689 | 26,401,870 | 26,254,745 | ||||||||||||||||||||
Diluted earnings per common share | $ | 0.37 | $ | 0.44 | $ | 0.24 |
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | ||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||
Commitments and Contingencies | ' | ||||||||||||||||||||||
Schedule of outstanding financial commitments of the Bank whose contractual amount represents credit risk | ' | ||||||||||||||||||||||
December 31, | |||||||||||||||||||||||
(dollar amounts in thousands) | 2013 | 2012 | |||||||||||||||||||||
Commitments to extend credit | $ | 181,445 | $ | 164,378 | |||||||||||||||||||
Standby letters of credit | 17,036 | 14,054 | |||||||||||||||||||||
Total commitments and standby letters of credit | $ | 198,481 | $ | 178,432 | |||||||||||||||||||
Summary of the future minimum lease payments the Bank is expected to make based upon obligations | ' | ||||||||||||||||||||||
Due | Due | Due | Due | Due | Due More | ||||||||||||||||||
(dollar amounts in thousands) | 2014 | 2015 | 2016 | 2017 | 2018 | Than 5 Years | Total | ||||||||||||||||
Non-cancelable operating leases | $ | 1,257 | $ | 927 | $ | 384 | $ | 103 | $ | - | $ | - | $ | 2,671 | |||||||||
Regulatory_Matters_Tables
Regulatory Matters (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Regulatory Matters | ' | ||||||||||||||||
Schedule of the Company's and the Bank's actual regulatory capital amounts and ratios | ' | ||||||||||||||||
Capital Needed | |||||||||||||||||
To Be Well Capitalized | |||||||||||||||||
Capital Needed For | Under Prompt Corrective | ||||||||||||||||
Actual | Adequacy Purposes | Action Provisions | |||||||||||||||
Capital | Capital | Capital | |||||||||||||||
(dollar amounts in thousands) | Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||
As of December 31, 2013 | |||||||||||||||||
Total capital to risk-weighted assets: | |||||||||||||||||
Company | $ | 130,532 | 14.17% | $ | 73,709 | 8.00% | N/A | N/A | |||||||||
Heritage Oaks Bank | $ | 126,000 | 13.68% | $ | 73,703 | 8.00% | $ | 92,128 | 10.00% | ||||||||
Tier I capital to risk-weighted assets: | |||||||||||||||||
Company | $ | 118,933 | 12.91% | $ | 36,855 | 4.00% | N/A | N/A | |||||||||
Heritage Oaks Bank | $ | 114,402 | 12.42% | $ | 36,851 | 4.00% | $ | 55,277 | 6.00% | ||||||||
Tier I capital to average assets: | |||||||||||||||||
Company | $ | 118,933 | 10.20% | $ | 46,649 | 4.00% | N/A | N/A | |||||||||
Heritage Oaks Bank | $ | 114,402 | 9.82% | $ | 46,603 | 4.00% | $ | 58,254 | 5.00% | ||||||||
As of December 31, 2012 | |||||||||||||||||
Total capital to risk-weighted assets: | |||||||||||||||||
Company | $ | 137,525 | 16.81% | $ | 65,454 | 8.00% | N/A | N/A | |||||||||
Heritage Oaks Bank | $ | 133,038 | 16.28% | $ | 65,374 | 8.00% | $ | 81,718 | 10.00% | ||||||||
Tier I capital to risk-weighted assets: | |||||||||||||||||
Company | $ | 127,196 | 15.55% | $ | 32,727 | 4.00% | N/A | N/A | |||||||||
Heritage Oaks Bank | $ | 122,722 | 15.02% | $ | 32,687 | 4.00% | $ | 49,031 | 6.00% | ||||||||
Tier I capital to average assets: | |||||||||||||||||
Company | $ | 127,196 | 12.32% | $ | 41,311 | 4.00% | N/A | N/A | |||||||||
Heritage Oaks Bank | $ | 122,722 | 11.93% | $ | 41,145 | 4.00% | $ | 51,432 | 5.00% |
Related_Party_Transactions_Tab
Related Party Transactions (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Related Party Transactions | ' | ||||||||||
Schedule of loans made to directors and executive officers of the Company | ' | ||||||||||
For The Year | |||||||||||
Ended December 31, | |||||||||||
(dollar amounts in thousands) | 2013 | ||||||||||
Outstanding balance, beginning of year | $ | 19,842 | |||||||||
Additional loans made | 12,668 | ||||||||||
Repayments | (12,423 | ) | |||||||||
Change in related party status | - | ||||||||||
Outstanding balance, end of year | $ | 20,087 | |||||||||
Schedule of facility rent, legal consultation fees related to collection matters and fuel for Company owned vehicles | ' | ||||||||||
For The Years Ended December 31, | |||||||||||
(dollar amounts in thousands) | 2013 | 2012 | 2011 | ||||||||
Payments to affiliated firms: | |||||||||||
Facility rent | $ | 237 | $ | 233 | $ | 221 | |||||
Legal consultation fees | 14 | 6 | 8 | ||||||||
Fuel for company owned vehicles | - | 5 | 4 | ||||||||
Total payments to affiliated firms | $ | 251 | $ | 244 | $ | 233 |
Parent_Company_Financial_Infor1
Parent Company Financial Information (Tables) (Heritage Oaks Bancorp) | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Heritage Oaks Bancorp | ' | |||||||||||
Parent Company Financial Information | ' | |||||||||||
Schedule of condensed balance sheets | ' | |||||||||||
December 31, | ||||||||||||
(dollar amounts in thousands) | 2013 | 2012 | ||||||||||
Assets | ||||||||||||
Cash | $ | 4,726 | $ | 3,615 | ||||||||
Prepaid and other assets | 1,280 | 1,819 | ||||||||||
Investment in bank | 128,940 | 148,461 | ||||||||||
Total assets | $ | 134,946 | $ | 153,895 | ||||||||
Liabilities | ||||||||||||
Junior subordinated debentures | $ | 8,248 | $ | 8,248 | ||||||||
Other liabilities | 271 | 118 | ||||||||||
Total liabilities | 8,519 | 8,366 | ||||||||||
Stockholders’ Equity | ||||||||||||
Preferred stock | 3,604 | 24,140 | ||||||||||
Common stock | 101,511 | 101,354 | ||||||||||
Additional paid in capital | 6,020 | 7,337 | ||||||||||
Retained earnings | 18,717 | 8,773 | ||||||||||
Accumulated other comprehensive income | (3,425 | ) | 3,925 | |||||||||
Total stockholders’ equity | 126,427 | 145,529 | ||||||||||
Total liabilities and stockholders’ equity | $ | 134,946 | $ | 153,895 | ||||||||
Schedule of condensed statements of operations | ' | |||||||||||
For The Years Ended | ||||||||||||
December 31, | ||||||||||||
(dollar amounts in thousands) | 2013 | 2012 | 2011 | |||||||||
Income | ||||||||||||
Equity in undisbursed income of subsidiaries | $ | 11,944 | $ | 13,003 | $ | 7,868 | ||||||
Interest | 19 | 25 | 19 | |||||||||
Gain on sale of investment securities | - | - | 254 | |||||||||
Total income | 11,963 | 13,028 | 8,141 | |||||||||
Expense | ||||||||||||
Share-based compensation | 133 | 114 | 58 | |||||||||
Other professional fees and outside services | 1,169 | 498 | 289 | |||||||||
Interest | 167 | 192 | 169 | |||||||||
Total expense | 1,469 | 804 | 516 | |||||||||
Total operating income | 10,494 | 12,224 | 7,625 | |||||||||
Income tax benefit | (347 | ) | (813 | ) | (100 | ) | ||||||
Net income | $ | 10,841 | $ | 13,037 | $ | 7,725 | ||||||
Dividends and accretion on preferred stock | 898 | 1,470 | 1,358 | |||||||||
Net income available to common shareholders | $ | 9,943 | $ | 11,567 | $ | 6,367 | ||||||
Schedule of condensed statements of other comprehensive income | ' | |||||||||||
For the Years Ended December 31, | ||||||||||||
(dollar amounts in thousands) | 2013 | 2012 | 2011 | |||||||||
Net income | $ | 10,841 | $ | 13,037 | $ | 7,725 | ||||||
Other comprehensive income: | ||||||||||||
Unrealized security holding (losses) / gains | (8,565 | ) | 8,544 | 4,634 | ||||||||
Reclassification for net gains on investments included in earnings | (3,926 | ) | (2,619 | ) | (1,983 | ) | ||||||
Other comprehensive (loss) / income, before income tax (benefit) / expense | (12,491 | ) | 5,925 | 2,651 | ||||||||
Income tax (benefit) / expense related to items of other comprehensive income | (5,141 | ) | 2,438 | 1,092 | ||||||||
Other comprehensive (loss) / income | (7,350 | ) | 3,487 | 1,559 | ||||||||
Comprehensive income | $ | 3,491 | $ | 16,524 | $ | 9,284 | ||||||
Schedule of condensed statements of cash flows | ' | |||||||||||
For The Years Ended | ||||||||||||
December 31, | ||||||||||||
(dollar amounts in thousands) | 2013 | 2012 | 2011 | |||||||||
Cash flows from operating activities: | ||||||||||||
Net income | $ | 10,841 | $ | 13,037 | $ | 7,725 | ||||||
Adjustments to reconcile net income to net cash provided by / (used in) operating activities: | ||||||||||||
Increase in other assets | (236 | ) | (448 | ) | (82 | ) | ||||||
Increase / (decrease) in other liabilities | 153 | (208 | ) | 195 | ||||||||
Gain on sale of assets | - | - | (253 | ) | ||||||||
Share-based compensation expense | 133 | 114 | 58 | |||||||||
Undistributed loss / (income) of subsidiaries | 13,365 | (9,486 | ) | (7,868 | ) | |||||||
Net cash provided by / (used in) operating activities | 24,256 | 3,009 | (225 | ) | ||||||||
Cash flows from investing activities: | ||||||||||||
Sale of securities | - | - | 253 | |||||||||
Other | - | - | (775 | ) | ||||||||
Net cash used in investing activities | - | - | (522 | ) | ||||||||
Cash flows from financing activities: | ||||||||||||
Preferred stock dividends paid | (708 | ) | (3,013 | ) | - | |||||||
Retirement of Series A preferred stock and related warrants | (22,575 | ) | - | |||||||||
Proceeds from the exercise of options | 138 | 183 | - | |||||||||
Net cash (used in) / provided by financing activities | (23,145 | ) | (2,830 | ) | - | |||||||
Net increase / (decrease) in cash and cash equivalents | 1,111 | 179 | (747 | ) | ||||||||
Cash and cash equivalents, beginning of year | 3,615 | 3,436 | 4,183 | |||||||||
Cash and cash equivalents, end of year | $ | 4,726 | $ | 3,615 | $ | 3,436 |
Quarterly_Financial_Informatio1
Quarterly Financial Information (unaudited) (Tables) | 12 Months Ended | |||||||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||||||
Quarterly Financial Information (unaudited) | ' | |||||||||||||||||||||||||
Summary of results for the periods | ' | |||||||||||||||||||||||||
For The Quarters Ended, | ||||||||||||||||||||||||||
Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||
(dollar amounts in thousands, except per share data) | 2013 | 2013 | 2013 | 2013 | 2012 | 2012 | 2012 | 2012 | ||||||||||||||||||
Interest income | 11,736 | $ | 11,509 | $ | 11,075 | $ | 11,073 | $ | 11,649 | $ | 11,519 | $ | 11,401 | $ | 11,752 | |||||||||||
Net interest income | 10,687 | 10,482 | 10,149 | 10,208 | 10,763 | 10,585 | 10,406 | 10,749 | ||||||||||||||||||
Provision for credit losses | - | - | - | - | - | 1,286 | 3,064 | 3,331 | ||||||||||||||||||
Non-interest income | 1,879 | 2,423 | 2,912 | 5,661 | 3,548 | 2,984 | 3,494 | 2,522 | ||||||||||||||||||
Non-interest expense | 9,624 | 8,551 | 8,640 | 9,748 | 9,474 | 8,795 | 9,133 | 8,729 | ||||||||||||||||||
Income before provision for income taxes | 2,942 | 4,354 | 4,421 | 6,121 | 4,837 | 3,488 | 1,703 | 1,211 | ||||||||||||||||||
Net income | 1,634 | 2,761 | 2,716 | 3,730 | 3,127 | 6,428 | 1,897 | 1,585 | ||||||||||||||||||
Dividends and accretion on preferred stock | - | 181 | 359 | 358 | 357 | 357 | 375 | 381 | ||||||||||||||||||
Net income available to common shareholders | $ | 1,634 | $ | 2,580 | $ | 2,357 | $ | 3,372 | $ | 2,770 | $ | 6,071 | $ | 1,522 | $ | 1,204 | ||||||||||
Earnings per common share | ||||||||||||||||||||||||||
Basic | $ | 0.06 | $ | 0.1 | $ | 0.09 | $ | 0.13 | $ | 0.11 | $ | 0.24 | $ | 0.06 | $ | 0.05 | ||||||||||
Diluted | $ | 0.06 | $ | 0.1 | $ | 0.09 | $ | 0.13 | $ | 0.1 | $ | 0.23 | $ | 0.06 | $ | 0.05 |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
item | ||
Nature of Operations | ' | ' |
Number of business segments | 1 | ' |
Financial instruments of the Company measured at fair value on a recurring basis | ' | ' |
Total assets | $1,203,651,000 | $1,097,532,000 |
Loans Held for Investment | ' | ' |
Period for loans past due to be classified as non-accruing loans | '90 days | ' |
Minimum period of sustained repayment performance for loans to be returned to accruing status from non-accrual status | '6 months | ' |
Loan Charge-offs | ' | ' |
Period for loans past due to be charged-off | '90 days | ' |
All Non-United States countries | ' | ' |
Financial instruments of the Company measured at fair value on a recurring basis | ' | ' |
Total assets | 0 | ' |
Revenue | 0 | ' |
Minimum | ' | ' |
Financial instruments of the Company measured at fair value on a recurring basis | ' | ' |
Discount rate used monthly for other real estate owned and foreclosed collateral (as a percent) | 1.00% | ' |
Appraisals for Loans Secured by Real Estate Collateral | ' | ' |
Loan commitments over which an annual review of borrower's financial condition is done | $500,000 | ' |
Remaining term of the loan over which an annual review of borrower's financial condition is performed | '1 year | ' |
Maximum | ' | ' |
Financial instruments of the Company measured at fair value on a recurring basis | ' | ' |
Discount rate used monthly for other real estate owned and foreclosed collateral (as a percent) | 3.00% | ' |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details 2) (USD $) | 12 Months Ended | |||
In Millions, unless otherwise specified | Dec. 31, 2010 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 |
Furniture and Fixtures | Furniture and Fixtures | Building | ||
Maximum | Minimum | |||
Property, Premises and Equipment | ' | ' | ' | ' |
Property, Premises and Equipment, Useful Life | ' | '10 years | '3 years | '30 years |
Goodwill and Other Intangible Assets | ' | ' | ' | ' |
Impairment charges | $0 | ' | ' | ' |
Fair_Value_of_Assets_and_Liabi2
Fair Value of Assets and Liabilities (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Significant Other Observable Inputs (Level 2) | ' | ' |
Financial instruments of the Company measured at fair value on a recurring basis | ' | ' |
Total assets measured on recurring basis | $276,795 | $287,682 |
Significant Unobservable Inputs (Level 3) | ' | ' |
Financial instruments of the Company measured at fair value on a recurring basis | ' | ' |
Number of Instruments Held | 0 | 0 |
Recurring basis | Significant Other Observable Inputs (Level 2) | ' | ' |
Financial instruments of the Company measured at fair value on a recurring basis | ' | ' |
Total assets measured on recurring basis | 276,795 | 287,682 |
Recurring basis | Significant Other Observable Inputs (Level 2) | Obligations of U.S. government agencies | ' | ' |
Financial instruments of the Company measured at fair value on a recurring basis | ' | ' |
Total assets measured on recurring basis | 6,208 | 7,567 |
Recurring basis | Significant Other Observable Inputs (Level 2) | Mortgage-backed securities - Agency | ' | ' |
Financial instruments of the Company measured at fair value on a recurring basis | ' | ' |
Total assets measured on recurring basis | 182,931 | 145,768 |
Recurring basis | Significant Other Observable Inputs (Level 2) | Mortgage-backed securities - Non-agency | ' | ' |
Financial instruments of the Company measured at fair value on a recurring basis | ' | ' |
Total assets measured on recurring basis | 11,032 | 44,795 |
Recurring basis | Significant Other Observable Inputs (Level 2) | Obligations of state and municipal securities | ' | ' |
Financial instruments of the Company measured at fair value on a recurring basis | ' | ' |
Total assets measured on recurring basis | 50,030 | 68,968 |
Recurring basis | Significant Other Observable Inputs (Level 2) | Asset backed securities | ' | ' |
Financial instruments of the Company measured at fair value on a recurring basis | ' | ' |
Total assets measured on recurring basis | 26,594 | 20,584 |
Recurring basis | Assets At Fair Value | ' | ' |
Financial instruments of the Company measured at fair value on a recurring basis | ' | ' |
Total assets measured on recurring basis | 276,795 | 287,682 |
Recurring basis | Assets At Fair Value | Obligations of U.S. government agencies | ' | ' |
Financial instruments of the Company measured at fair value on a recurring basis | ' | ' |
Total assets measured on recurring basis | 6,208 | 7,567 |
Recurring basis | Assets At Fair Value | Mortgage-backed securities - Agency | ' | ' |
Financial instruments of the Company measured at fair value on a recurring basis | ' | ' |
Total assets measured on recurring basis | 182,931 | 145,768 |
Recurring basis | Assets At Fair Value | Mortgage-backed securities - Non-agency | ' | ' |
Financial instruments of the Company measured at fair value on a recurring basis | ' | ' |
Total assets measured on recurring basis | 11,032 | 44,795 |
Recurring basis | Assets At Fair Value | Obligations of state and municipal securities | ' | ' |
Financial instruments of the Company measured at fair value on a recurring basis | ' | ' |
Total assets measured on recurring basis | 50,030 | 68,968 |
Recurring basis | Assets At Fair Value | Asset backed securities | ' | ' |
Financial instruments of the Company measured at fair value on a recurring basis | ' | ' |
Total assets measured on recurring basis | $26,594 | $20,584 |
Fair_Value_of_Assets_and_Liabi3
Fair Value of Assets and Liabilities (Details 2) (USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2012 |
Obligations of state and municipal securities | ' |
Changes in balance sheet carrying values associated with recurring Level 3 financial instruments | ' |
Beginning balance | $259 |
Gain / (Loss) Included in OCI | 3 |
Transfers to / (from) Level III | -262 |
Agency mortgage backed securities | ' |
Changes in balance sheet carrying values associated with recurring Level 3 financial instruments | ' |
Gain / (Loss) Included in OCI | -191 |
Purchases, Issuances, and Settlements | 4,674 |
Transfers to / (from) Level III | -4,483 |
Non-agency mortgage backed securities | ' |
Changes in balance sheet carrying values associated with recurring Level 3 financial instruments | ' |
Beginning balance | 3,074 |
Transfers to / (from) Level III | ($3,074) |
Fair_Value_of_Assets_and_Liabi4
Fair Value of Assets and Liabilities (Details 3) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Recurring basis | ' | ' |
Total Losses for assets measured at fair value on a non-recurring basis | ' | ' |
Assets transfer from Level 1 to level 2 | $0 | $0 |
Assets transfer from Level 2 to level 1 | 0 | 0 |
Nonrecurring basis | ' | ' |
Total Losses for assets measured at fair value on a non-recurring basis | ' | ' |
Total Losses/(Gains) | -1,270 | 6,231 |
Assets transfer from Level 1 to level 2 | 0 | 0 |
Assets transfer from Level 2 to level 1 | 0 | 0 |
Nonrecurring basis | Commercial and industrial | ' | ' |
Total Losses for assets measured at fair value on a non-recurring basis | ' | ' |
Total Losses/(Gains) on impaired loans | ' | 1,941 |
Nonrecurring basis | Agriculture | ' | ' |
Total Losses for assets measured at fair value on a non-recurring basis | ' | ' |
Total Losses/(Gains) on impaired loans | ' | 28 |
Nonrecurring basis | Construction | ' | ' |
Total Losses for assets measured at fair value on a non-recurring basis | ' | ' |
Total Losses/(Gains) on impaired loans | ' | 460 |
Nonrecurring basis | Land | ' | ' |
Total Losses for assets measured at fair value on a non-recurring basis | ' | ' |
Total Losses/(Gains) on impaired loans | -1,270 | 3,802 |
Nonrecurring basis | Significant Other Observable Inputs (Level 2) | ' | ' |
Assets | ' | ' |
Total assets measured on a non-recurring basis | ' | 2,548 |
Nonrecurring basis | Significant Other Observable Inputs (Level 2) | Commercial and industrial | ' | ' |
Assets | ' | ' |
Impaired loans | ' | 820 |
Nonrecurring basis | Significant Other Observable Inputs (Level 2) | Agriculture | ' | ' |
Assets | ' | ' |
Impaired loans | ' | 72 |
Nonrecurring basis | Significant Other Observable Inputs (Level 2) | Construction | ' | ' |
Assets | ' | ' |
Impaired loans | ' | 1,656 |
Nonrecurring basis | Significant Unobservable Inputs (Level 3) | ' | ' |
Assets | ' | ' |
Total assets measured on a non-recurring basis | 4,170 | 2,261 |
Nonrecurring basis | Significant Unobservable Inputs (Level 3) | Commercial and industrial | ' | ' |
Assets | ' | ' |
Impaired loans | ' | 213 |
Nonrecurring basis | Significant Unobservable Inputs (Level 3) | Land | ' | ' |
Assets | ' | ' |
Impaired loans | 4,170 | 2,048 |
Nonrecurring basis | Assets At Fair Value | ' | ' |
Assets | ' | ' |
Total assets measured on a non-recurring basis | 4,170 | 4,809 |
Nonrecurring basis | Assets At Fair Value | Commercial and industrial | ' | ' |
Assets | ' | ' |
Impaired loans | ' | 1,033 |
Nonrecurring basis | Assets At Fair Value | Agriculture | ' | ' |
Assets | ' | ' |
Impaired loans | ' | 72 |
Nonrecurring basis | Assets At Fair Value | Construction | ' | ' |
Assets | ' | ' |
Impaired loans | ' | 1,656 |
Nonrecurring basis | Assets At Fair Value | Land | ' | ' |
Assets | ' | ' |
Impaired loans | $4,170 | $2,048 |
Fair_Value_of_Assets_and_Liabi5
Fair Value of Assets and Liabilities (Details 4) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Liabilities | ' | ' |
Non-interest bearing deposits | $291,856 | $273,242 |
Junior subordinated debentures | 8,248 | 8,248 |
Off-balance sheet instruments, commitments to extend credit and standby letters of credit, Notional Amount | 198,481 | 178,432 |
Off-balance sheet instruments, commitments to extend credit and standby letters of credit, Cost to Cede or Assume | 1,985 | 1,784 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ' | ' |
Assets | ' | ' |
Cash and cash equivalents | 26,238 | 34,116 |
Liabilities | ' | ' |
Non-interest bearing deposits | 291,856 | 273,242 |
Significant Other Observable Inputs (Level 2) | ' | ' |
Assets | ' | ' |
Investment securities available for sale | 276,795 | 287,682 |
Loans receivable, net of deferred fees and costs | ' | 2,548 |
Loans held for sale | 2,386 | 22,549 |
Accrued interest receivable | 1,397 | 1,497 |
Liabilities | ' | ' |
Interest bearing deposits | 684,345 | 598,664 |
Federal Home Loan Bank advances | 86,990 | 67,059 |
Accrued interest payable | 239 | 192 |
Significant Unobservable Inputs (Level 3) | ' | ' |
Assets | ' | ' |
Loans receivable, net of deferred fees and costs | 827,105 | 701,144 |
Accrued interest receivable | 2,630 | 2,418 |
Liabilities | ' | ' |
Junior subordinated debentures | 7,595 | 7,078 |
Carrying Amount | ' | ' |
Assets | ' | ' |
Cash and cash equivalents | 26,238 | 34,116 |
Investment securities available for sale | 276,795 | 287,682 |
Federal Home Loan Bank stock | 4,739 | 4,575 |
Loans receivable, net of deferred fees and costs | 826,203 | 688,671 |
Loans held for sale | 2,386 | 22,549 |
Accrued interest receivable | 4,027 | 3,915 |
Liabilities | ' | ' |
Non-interest bearing deposits | 291,856 | 273,242 |
Interest bearing deposits | 682,039 | 597,628 |
Federal Home Loan Bank advances | 88,500 | 66,500 |
Junior subordinated debentures | 8,248 | 8,248 |
Accrued interest payable | 239 | 192 |
Fair Value | ' | ' |
Assets | ' | ' |
Cash and cash equivalents | 26,238 | 34,116 |
Investment securities available for sale | 276,795 | 287,682 |
Loans receivable, net of deferred fees and costs | 827,105 | 703,692 |
Loans held for sale | 2,386 | 22,549 |
Accrued interest receivable | 4,027 | 3,915 |
Liabilities | ' | ' |
Non-interest bearing deposits | 291,856 | 273,242 |
Interest bearing deposits | 684,345 | 598,664 |
Federal Home Loan Bank advances | 86,990 | 67,059 |
Junior subordinated debentures | 7,595 | 7,078 |
Accrued interest payable | $239 | $192 |
Investment_Securities_Details
Investment Securities (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Reconciliation of amortized cost to fair value of investment securities reported as available for sale | ' | ' |
Amortized Cost | $282,615 | $281,012 |
Gross Unrealized Gains | 778 | 7,784 |
Gross Unrealized Losses | -6,598 | -1,114 |
Fair Value | 276,795 | 287,682 |
Obligations of U.S. government agencies | ' | ' |
Reconciliation of amortized cost to fair value of investment securities reported as available for sale | ' | ' |
Amortized Cost | 6,243 | 7,307 |
Gross Unrealized Gains | 11 | 262 |
Gross Unrealized Losses | -46 | -2 |
Fair Value | 6,208 | 7,567 |
Mortgage-backed securities - U.S. government sponsored entities and agencies | ' | ' |
Reconciliation of amortized cost to fair value of investment securities reported as available for sale | ' | ' |
Amortized Cost | 186,981 | 145,430 |
Gross Unrealized Gains | 342 | 1,136 |
Gross Unrealized Losses | -4,392 | -798 |
Fair Value | 182,931 | 145,768 |
Mortgage-backed securities - Non-agency | ' | ' |
Reconciliation of amortized cost to fair value of investment securities reported as available for sale | ' | ' |
Amortized Cost | 10,924 | 43,402 |
Gross Unrealized Gains | 156 | 1,578 |
Gross Unrealized Losses | -48 | -185 |
Fair Value | 11,032 | 44,795 |
State and municipal securities | ' | ' |
Reconciliation of amortized cost to fair value of investment securities reported as available for sale | ' | ' |
Amortized Cost | 51,532 | 64,824 |
Gross Unrealized Gains | 269 | 4,240 |
Gross Unrealized Losses | -1,771 | -96 |
Fair Value | 50,030 | 68,968 |
Asset backed securities | ' | ' |
Reconciliation of amortized cost to fair value of investment securities reported as available for sale | ' | ' |
Amortized Cost | 26,935 | 20,049 |
Gross Unrealized Gains | ' | 568 |
Gross Unrealized Losses | -341 | -33 |
Fair Value | $26,594 | $20,584 |
Investment_Securities_Details_
Investment Securities (Details 2) (USD $) | 12 Months Ended | 12 Months Ended | ||||
Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Mar. 31, 2013 | Dec. 31, 2012 | |
OTTI Related to Credit Loss | OTTI Related to Credit Loss | OTTI Related to All Other Factors | Private labeled mortgage backed securities | Private labeled mortgage backed securities | ||
item | ||||||
Other than Temporary Impairment | ' | ' | ' | ' | ' | ' |
Number of investment securities in which other than temporary impairment losses were recognized | ' | ' | ' | ' | 2 | ' |
Other than temporary impairment investments, fair value | ' | ' | ' | ' | ' | $700,000 |
Other than temporary impairment investments, historical cost | ' | ' | ' | ' | ' | 1,000,000 |
Additional information related to the recognized OTTI losses | ' | ' | ' | ' | ' | ' |
Balance, beginning of the period | 470,000 | 109,000 | 109,000 | 361,000 | ' | ' |
Change in value attributable to other factors | -191,000 | ' | ' | -191,000 | ' | ' |
Balance, end of the period | $279,000 | $109,000 | $109,000 | $170,000 | ' | ' |
Investment_Securities_Details_1
Investment Securities (Details 3) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Investment securities | ' | ' | ' |
Less Than Twelve Months, Fair Value | $165,482,000 | $109,937,000 | ' |
Less Than Twelve Months, Unrealized Loss | -5,154,000 | -942,000 | ' |
Twelve Months or More, Fair Value | 31,108,000 | 763,000 | ' |
Twelve Months or More, Unrealized Loss | -1,444,000 | -172,000 | ' |
Total, Fair Value | 196,590,000 | 110,700,000 | ' |
Total, Unrealized Loss | -6,598,000 | -1,114,000 | ' |
Proceeds from the sales and calls of securities and the associated gains and losses | ' | ' | ' |
Proceeds | 161,765,000 | 141,166,000 | 147,646,000 |
Gross gains | 5,599,000 | 3,152,000 | 3,173,000 |
Gross losses | -1,673,000 | -533,000 | -1,190,000 |
Income tax expense related to net realized gains on sales and calls of securities | 1,600,000 | 1,100,000 | 800,000 |
Available for sale securities, Amortized Cost | ' | ' | ' |
Total | 282,615,000 | 281,012,000 | ' |
Earnings on both taxable and tax-exempt investment securities | ' | ' | ' |
Total | 5,476,000 | 6,896,000 | 6,794,000 |
Investment securities | ' | ' | ' |
Available for sale securities, Amortized Cost | ' | ' | ' |
Due one year or less | 29,282,000 | 35,586,000 | ' |
Due after one year through five years | 90,023,000 | 97,899,000 | ' |
Due after five years through ten years | 100,191,000 | 99,138,000 | ' |
Due after ten years | 63,119,000 | 48,389,000 | ' |
Total | 282,615,000 | 281,012,000 | ' |
Available for sale securities, Fair Value | ' | ' | ' |
Due one year or less | 28,999,000 | 35,714,000 | ' |
Due after one year through five years | 88,760,000 | 99,522,000 | ' |
Due after five years through ten years | 97,752,000 | 103,595,000 | ' |
Due after ten years | 61,284,000 | 48,851,000 | ' |
Total | 276,795,000 | 287,682,000 | ' |
Investment securities | Minimum | ' | ' | ' |
Securities in an unrealized loss position | ' | ' | ' |
Maturity period of available-for-sale securities | '1 year | ' | ' |
Investment securities | Maximum | ' | ' | ' |
Securities in an unrealized loss position | ' | ' | ' |
Maturity period of available-for-sale securities | '40 years | ' | ' |
Obligations of U.S. government agencies | ' | ' | ' |
Investment securities | ' | ' | ' |
Less Than Twelve Months, Fair Value | 2,773,000 | ' | ' |
Less Than Twelve Months, Unrealized Loss | -45,000 | ' | ' |
Twelve Months or More, Fair Value | 40,000 | 44,000 | ' |
Twelve Months or More, Unrealized Loss | -1,000 | -2,000 | ' |
Total, Fair Value | 2,813,000 | 44,000 | ' |
Total, Unrealized Loss | -46,000 | -2,000 | ' |
Available for sale securities, Amortized Cost | ' | ' | ' |
Total | 6,243,000 | 7,307,000 | ' |
Earnings on both taxable and tax-exempt investment securities | ' | ' | ' |
Taxable earnings on investment securities | 106,000 | 105,000 | 190,000 |
Mortgage backed securities | ' | ' | ' |
Earnings on both taxable and tax-exempt investment securities | ' | ' | ' |
Taxable earnings on investment securities | 3,441,000 | 3,776,000 | 4,288,000 |
Mortgage-backed securities - U.S. government sponsored entities and agencies | ' | ' | ' |
Investment securities | ' | ' | ' |
Less Than Twelve Months, Fair Value | 118,554,000 | 83,092,000 | ' |
Less Than Twelve Months, Unrealized Loss | -3,140,000 | -798,000 | ' |
Twelve Months or More, Fair Value | 18,863,000 | ' | ' |
Twelve Months or More, Unrealized Loss | -1,252,000 | ' | ' |
Total, Fair Value | 137,417,000 | 83,092,000 | ' |
Total, Unrealized Loss | -4,392,000 | -798,000 | ' |
Available for sale securities, Amortized Cost | ' | ' | ' |
Total | 186,981,000 | 145,430,000 | ' |
Mortgage-backed securities - Non-agency | ' | ' | ' |
Investment securities | ' | ' | ' |
Less Than Twelve Months, Fair Value | 3,210,000 | 7,204,000 | ' |
Less Than Twelve Months, Unrealized Loss | -48,000 | -15,000 | ' |
Twelve Months or More, Fair Value | ' | 719,000 | ' |
Twelve Months or More, Unrealized Loss | ' | -170,000 | ' |
Total, Fair Value | 3,210,000 | 7,923,000 | ' |
Total, Unrealized Loss | -48,000 | -185,000 | ' |
Available for sale securities, Amortized Cost | ' | ' | ' |
Total | 10,924,000 | 43,402,000 | ' |
State and municipal securities | ' | ' | ' |
Investment securities | ' | ' | ' |
Less Than Twelve Months, Fair Value | 32,967,000 | 9,813,000 | ' |
Less Than Twelve Months, Unrealized Loss | -1,675,000 | -96,000 | ' |
Twelve Months or More, Fair Value | 2,458,000 | ' | ' |
Twelve Months or More, Unrealized Loss | -96,000 | ' | ' |
Total, Fair Value | 35,425,000 | 9,813,000 | ' |
Total, Unrealized Loss | -1,771,000 | -96,000 | ' |
Available for sale securities, Amortized Cost | ' | ' | ' |
Total | 51,532,000 | 64,824,000 | ' |
Earnings on both taxable and tax-exempt investment securities | ' | ' | ' |
Taxable earnings on investment securities | 5,000 | 191,000 | 497,000 |
Non-taxable earnings on investment securities | 1,497,000 | 1,952,000 | 1,490,000 |
Corporate debt securities | ' | ' | ' |
Earnings on both taxable and tax-exempt investment securities | ' | ' | ' |
Taxable earnings on investment securities | ' | 631,000 | 309,000 |
Asset backed securities | ' | ' | ' |
Investment securities | ' | ' | ' |
Less Than Twelve Months, Fair Value | 7,978,000 | 9,828,000 | ' |
Less Than Twelve Months, Unrealized Loss | -246,000 | -33,000 | ' |
Twelve Months or More, Fair Value | 9,747,000 | ' | ' |
Twelve Months or More, Unrealized Loss | -95,000 | ' | ' |
Total, Fair Value | 17,725,000 | 9,828,000 | ' |
Total, Unrealized Loss | -341,000 | -33,000 | ' |
Available for sale securities, Amortized Cost | ' | ' | ' |
Total | 26,935,000 | 20,049,000 | ' |
Earnings on both taxable and tax-exempt investment securities | ' | ' | ' |
Taxable earnings on investment securities | 427,000 | 241,000 | 20,000 |
Securities pledged to secure public deposits | ' | ' | ' |
Available for sale securities, Amortized Cost | ' | ' | ' |
Total | 41,900,000 | 8,700,000 | ' |
Available for sale securities, Fair Value | ' | ' | ' |
Total | $40,400,000 | $9,000,000 | ' |
Loans_Details
Loans (Details) (USD $) | 12 Months Ended | 36 Months Ended | |||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2010 | |
item | item | ||||
Outstanding loan balances | ' | ' | ' | ' | ' |
Total gross loans | $827,484,000 | $689,608,000 | ' | $827,484,000 | ' |
Deferred loan fees | -1,281,000 | -937,000 | ' | -1,281,000 | ' |
Allowance for loan losses | -17,859,000 | -18,118,000 | -19,314,000 | -17,859,000 | -24,940,000 |
Net loans | 808,344,000 | 670,553,000 | ' | 808,344,000 | ' |
Loans held for sale | 2,386,000 | 22,549,000 | ' | 2,386,000 | ' |
Number of remaining related loans for which the purchaser is seeking reimbursement | 3 | ' | ' | ' | ' |
Reserve maintained for the exercise of repurchase option by buyer | 400,000 | ' | ' | 400,000 | ' |
Number of loans settled | ' | ' | ' | 9 | ' |
Losses incurred on settlement | ' | ' | ' | 1,600,000 | ' |
Concentration of Credit Risk | ' | ' | ' | ' | ' |
Loan portfolio collateralized by various forms of real estate | 672,100,000 | 537,400,000 | ' | 672,100,000 | ' |
Loans Serviced for Others | ' | ' | ' | ' | ' |
Unpaid principal balance of loans serviced for others, exclusive of SBA loans | 22,600,000 | 7,100,000 | ' | 22,600,000 | ' |
Unpaid principal balance of SBA loans serviced for others | 6,600,000 | 3,100,000 | ' | 6,600,000 | ' |
Recognized gains from the sale of SBA loans | 400,000 | 0 | 0 | ' | ' |
Minimum | ' | ' | ' | ' | ' |
Outstanding loan balances | ' | ' | ' | ' | ' |
Period for sale of loans categorized as held for sale | '30 days | ' | ' | ' | ' |
Maximum | ' | ' | ' | ' | ' |
Outstanding loan balances | ' | ' | ' | ' | ' |
Period for sale of loans categorized as held for sale | '60 days | ' | ' | ' | ' |
Real Estate Secured | ' | ' | ' | ' | ' |
Outstanding loan balances | ' | ' | ' | ' | ' |
Total gross loans | 633,839,000 | 493,008,000 | ' | 633,839,000 | ' |
Allowance for loan losses | -9,157,000 | -6,879,000 | -9,645,000 | -9,157,000 | -11,885,000 |
Real Estate Secured | Multi-family residential | ' | ' | ' | ' | ' |
Outstanding loan balances | ' | ' | ' | ' | ' |
Total gross loans | 31,140,000 | 21,467,000 | ' | 31,140,000 | ' |
Real Estate Secured | Residential 1 to 4 family | ' | ' | ' | ' | ' |
Outstanding loan balances | ' | ' | ' | ' | ' |
Total gross loans | 88,904,000 | 41,444,000 | ' | 88,904,000 | ' |
Real Estate Secured | Home equity lines of credit | ' | ' | ' | ' | ' |
Outstanding loan balances | ' | ' | ' | ' | ' |
Total gross loans | 31,178,000 | 31,863,000 | ' | 31,178,000 | ' |
Real Estate Secured | Commercial | ' | ' | ' | ' | ' |
Outstanding loan balances | ' | ' | ' | ' | ' |
Total gross loans | 432,203,000 | 372,592,000 | ' | 432,203,000 | ' |
Real Estate Secured | Farmland | ' | ' | ' | ' | ' |
Outstanding loan balances | ' | ' | ' | ' | ' |
Total gross loans | 50,414,000 | 25,642,000 | ' | 50,414,000 | ' |
Commercial | ' | ' | ' | ' | ' |
Outstanding loan balances | ' | ' | ' | ' | ' |
Total gross loans | 151,845,000 | 147,064,000 | ' | 151,845,000 | ' |
Allowance for loan losses | -4,857,000 | -6,154,000 | -6,549,000 | -4,857,000 | -9,507,000 |
Commercial | Commercial and industrial | ' | ' | ' | ' | ' |
Outstanding loan balances | ' | ' | ' | ' | ' |
Total gross loans | 119,121,000 | 125,340,000 | ' | 119,121,000 | ' |
Commercial | Agriculture | ' | ' | ' | ' | ' |
Outstanding loan balances | ' | ' | ' | ' | ' |
Total gross loans | 32,686,000 | 21,663,000 | ' | 32,686,000 | ' |
Commercial | Other | ' | ' | ' | ' | ' |
Outstanding loan balances | ' | ' | ' | ' | ' |
Total gross loans | 38,000 | 61,000 | ' | 38,000 | ' |
Construction | ' | ' | ' | ' | ' |
Outstanding loan balances | ' | ' | ' | ' | ' |
Total gross loans | 13,699,000 | 19,716,000 | ' | 13,699,000 | ' |
Allowance for loan losses | -262,000 | -313,000 | -488,000 | -262,000 | -1,353,000 |
Construction | Single family residential | ' | ' | ' | ' | ' |
Outstanding loan balances | ' | ' | ' | ' | ' |
Total gross loans | 3,873,000 | 8,074,000 | ' | 3,873,000 | ' |
Construction | Single family residential - Spec. | ' | ' | ' | ' | ' |
Outstanding loan balances | ' | ' | ' | ' | ' |
Total gross loans | 1,153,000 | 535,000 | ' | 1,153,000 | ' |
Construction | Multi-family | ' | ' | ' | ' | ' |
Outstanding loan balances | ' | ' | ' | ' | ' |
Total gross loans | 736,000 | 778,000 | ' | 736,000 | ' |
Construction | Commercial | ' | ' | ' | ' | ' |
Outstanding loan balances | ' | ' | ' | ' | ' |
Total gross loans | 7,937,000 | 10,329,000 | ' | 7,937,000 | ' |
Land | ' | ' | ' | ' | ' |
Outstanding loan balances | ' | ' | ' | ' | ' |
Total gross loans | 24,523,000 | 24,664,000 | ' | 24,523,000 | ' |
Allowance for loan losses | -3,451,000 | -4,670,000 | -2,416,000 | -3,451,000 | -2,000,000 |
Installment loans to individuals | ' | ' | ' | ' | ' |
Outstanding loan balances | ' | ' | ' | ' | ' |
Total gross loans | 3,246,000 | 4,895,000 | ' | 3,246,000 | ' |
Allowance for loan losses | -100,000 | -64,000 | -175,000 | -100,000 | -166,000 |
All other loans (including overdrafts) | ' | ' | ' | ' | ' |
Outstanding loan balances | ' | ' | ' | ' | ' |
Total gross loans | 332,000 | 261,000 | ' | 332,000 | ' |
Allowance for loan losses | ($32,000) | ($38,000) | ($41,000) | ($32,000) | ($29,000) |
Loans_Details_2
Loans (Details 2) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Investment in impaired loans | ' | ' | ' |
Recorded Investment | $16,016,000 | $17,312,000 | ' |
Unpaid Principal Balance | 21,711,000 | 24,271,000 | ' |
Impaired Loans With Specific Allowance | 10,186,000 | 10,177,000 | ' |
Impaired Loans Without Specific Allowance | 5,830,000 | 7,135,000 | ' |
Specific Allowance for Impaired Loans | 3,155,000 | 6,061,000 | ' |
Average Recorded Investment | 15,239,000 | 19,043,000 | 19,005,000 |
Interest Income Recognized | 166,000 | 4,000 | 5,000 |
Increase in interest income if interest on non-accruing loans had been recognized at original interest rates stipulated in the respective loan agreements | 800,000 | 1,300,000 | 1,500,000 |
Real Estate Secured | Residential 1 to 4 family | ' | ' | ' |
Investment in impaired loans | ' | ' | ' |
Recorded Investment | 944,000 | 831,000 | ' |
Unpaid Principal Balance | 1,102,000 | 1,035,000 | ' |
Impaired Loans With Specific Allowance | ' | 246,000 | ' |
Impaired Loans Without Specific Allowance | 944,000 | 585,000 | ' |
Specific Allowance for Impaired Loans | ' | 18,000 | ' |
Average Recorded Investment | 870,000 | 810,000 | 582,000 |
Interest Income Recognized | 16,000 | ' | ' |
Real Estate Secured | Home equity lines of credit | ' | ' | ' |
Investment in impaired loans | ' | ' | ' |
Recorded Investment | ' | 58,000 | ' |
Unpaid Principal Balance | ' | 152,000 | ' |
Impaired Loans With Specific Allowance | ' | 58,000 | ' |
Specific Allowance for Impaired Loans | ' | 7,000 | ' |
Average Recorded Investment | 28,000 | 303,000 | 696,000 |
Real Estate Secured | Commercial | ' | ' | ' |
Investment in impaired loans | ' | ' | ' |
Recorded Investment | 901,000 | 933,000 | ' |
Unpaid Principal Balance | 1,646,000 | 1,799,000 | ' |
Impaired Loans With Specific Allowance | ' | 42,000 | ' |
Impaired Loans Without Specific Allowance | 901,000 | 891,000 | ' |
Average Recorded Investment | 775,000 | 2,851,000 | 8,903,000 |
Interest Income Recognized | 5,000 | ' | ' |
Real Estate Secured | Farmland | ' | ' | ' |
Investment in impaired loans | ' | ' | ' |
Recorded Investment | ' | 1,077,000 | ' |
Unpaid Principal Balance | ' | 1,089,000 | ' |
Impaired Loans Without Specific Allowance | ' | 1,077,000 | ' |
Average Recorded Investment | ' | 542,000 | 433,000 |
Commercial | Commercial and industrial | ' | ' | ' |
Investment in impaired loans | ' | ' | ' |
Recorded Investment | 5,337,000 | 4,337,000 | ' |
Unpaid Principal Balance | 5,843,000 | 4,813,000 | ' |
Impaired Loans With Specific Allowance | 3,480,000 | 3,410,000 | ' |
Impaired Loans Without Specific Allowance | 1,857,000 | 927,000 | ' |
Specific Allowance for Impaired Loans | 623,000 | 2,172,000 | ' |
Average Recorded Investment | 4,684,000 | 4,269,000 | 2,790,000 |
Interest Income Recognized | 52,000 | 4,000 | 5,000 |
Commercial | Agriculture | ' | ' | ' |
Investment in impaired loans | ' | ' | ' |
Recorded Investment | 789,000 | 907,000 | ' |
Unpaid Principal Balance | 824,000 | 1,235,000 | ' |
Impaired Loans With Specific Allowance | ' | 30,000 | ' |
Impaired Loans Without Specific Allowance | 789,000 | 877,000 | ' |
Specific Allowance for Impaired Loans | ' | 13,000 | ' |
Average Recorded Investment | 936,000 | 1,655,000 | 1,244,000 |
Construction | Single family residential | ' | ' | ' |
Investment in impaired loans | ' | ' | ' |
Average Recorded Investment | ' | ' | 1,115,000 |
Construction | Commercial | ' | ' | ' |
Investment in impaired loans | ' | ' | ' |
Recorded Investment | ' | 1,380,000 | ' |
Unpaid Principal Balance | ' | 2,508,000 | ' |
Impaired Loans Without Specific Allowance | ' | 1,380,000 | ' |
Average Recorded Investment | ' | 1,288,000 | ' |
Land | ' | ' | ' |
Investment in impaired loans | ' | ' | ' |
Recorded Investment | 7,927,000 | 7,504,000 | ' |
Unpaid Principal Balance | 12,106,000 | 11,307,000 | ' |
Impaired Loans With Specific Allowance | 6,706,000 | 6,106,000 | ' |
Impaired Loans Without Specific Allowance | 1,221,000 | 1,398,000 | ' |
Specific Allowance for Impaired Loans | 2,532,000 | 3,829,000 | ' |
Average Recorded Investment | 7,878,000 | 7,187,000 | 3,224,000 |
Interest Income Recognized | 93,000 | ' | ' |
Installment loans to individuals | ' | ' | ' |
Investment in impaired loans | ' | ' | ' |
Recorded Investment | 118,000 | 285,000 | ' |
Unpaid Principal Balance | 190,000 | 333,000 | ' |
Impaired Loans With Specific Allowance | ' | 285,000 | ' |
Impaired Loans Without Specific Allowance | 118,000 | ' | ' |
Specific Allowance for Impaired Loans | ' | 22,000 | ' |
Average Recorded Investment | $68,000 | $138,000 | $18,000 |
Loans_Details_3
Loans (Details 3) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
TDR | TDR | ||
Troubled debt restructurings | ' | ' | ' |
Loans classified as TDRs | $12,900,000 | $11,600,000 | ' |
Accruing loans that were classified as TDRs | 5,800,000 | 17,000 | ' |
Interest loss related to rate concessions on certain TDRs | 200,000 | 100,000 | 100,000 |
Number of TDRs | 16 | 19 | ' |
Pre-Modification Outstanding Recorded Investment | 3,940,000 | 13,058,000 | ' |
Post-Modification Outstanding Recorded Investment | 3,940,000 | 11,598,000 | ' |
Troubled Debt Restructurings That Subsequently Defaulted | ' | ' | ' |
Number of TDRs | 5 | 3 | ' |
Recorded Investment | 958,000 | 254,000 | ' |
Minimum | ' | ' | ' |
Troubled debt restructurings | ' | ' | ' |
Period of maturity date extensions granted | '12 months | ' | ' |
Maximum | ' | ' | ' |
Troubled debt restructurings | ' | ' | ' |
Period of maturity date extensions granted | '18 months | ' | ' |
Commercial and industrial | ' | ' | ' |
Troubled Debt Restructurings That Subsequently Defaulted | ' | ' | ' |
Number of TDRs | ' | 3 | ' |
Recorded Investment | ' | 254,000 | ' |
Real Estate Secured | Residential 1 to 4 family | ' | ' | ' |
Troubled debt restructurings | ' | ' | ' |
Number of TDRs | 1 | 3 | ' |
Pre-Modification Outstanding Recorded Investment | 139,000 | 563,000 | ' |
Post-Modification Outstanding Recorded Investment | 139,000 | 563,000 | ' |
Troubled Debt Restructurings That Subsequently Defaulted | ' | ' | ' |
Number of TDRs | 1 | ' | ' |
Recorded Investment | 97,000 | ' | ' |
Real Estate Secured | Commercial real estate | ' | ' | ' |
Troubled debt restructurings | ' | ' | ' |
Number of TDRs | 2 | ' | ' |
Pre-Modification Outstanding Recorded Investment | 339,000 | ' | ' |
Post-Modification Outstanding Recorded Investment | 339,000 | ' | ' |
Real Estate Secured | Farmland | ' | ' | ' |
Troubled debt restructurings | ' | ' | ' |
Number of TDRs | ' | 1 | ' |
Pre-Modification Outstanding Recorded Investment | ' | 1,089,000 | ' |
Post-Modification Outstanding Recorded Investment | ' | 1,089,000 | ' |
Commercial | Commercial and industrial | ' | ' | ' |
Troubled debt restructurings | ' | ' | ' |
Number of TDRs | 10 | 12 | ' |
Pre-Modification Outstanding Recorded Investment | 2,141,000 | 2,973,000 | ' |
Post-Modification Outstanding Recorded Investment | 2,141,000 | 2,883,000 | ' |
Troubled Debt Restructurings That Subsequently Defaulted | ' | ' | ' |
Number of TDRs | 3 | ' | ' |
Recorded Investment | 843,000 | ' | ' |
Commercial | Agriculture | ' | ' | ' |
Troubled debt restructurings | ' | ' | ' |
Number of TDRs | 2 | ' | ' |
Pre-Modification Outstanding Recorded Investment | 67,000 | ' | ' |
Post-Modification Outstanding Recorded Investment | 67,000 | ' | ' |
Troubled Debt Restructurings That Subsequently Defaulted | ' | ' | ' |
Number of TDRs | 1 | ' | ' |
Recorded Investment | 18,000 | ' | ' |
Land | ' | ' | ' |
Troubled debt restructurings | ' | ' | ' |
Number of TDRs | 1 | 3 | ' |
Pre-Modification Outstanding Recorded Investment | 1,254,000 | 8,433,000 | ' |
Post-Modification Outstanding Recorded Investment | $1,254,000 | $7,063,000 | ' |
Loans_Details_4
Loans (Details 4) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Loan portfolio by internal risk grading system as well as certain other information concerning the credit quality | ' | ' |
Total Gross loans | $827,484 | $689,608 |
Days Past Due | ' | ' |
30-59 | 100 | 695 |
60-89 | 2 | 151 |
90+ and Still Accruing | ' | 15 |
Non-Accruing | 10,117 | 17,309 |
Accruing TDR | 5,853 | 17 |
Credit Risk Grades, Pass | ' | ' |
Loan portfolio by internal risk grading system as well as certain other information concerning the credit quality | ' | ' |
Total Gross loans | 780,610 | 614,272 |
Credit Risk Grades, Special Mention | ' | ' |
Loan portfolio by internal risk grading system as well as certain other information concerning the credit quality | ' | ' |
Total Gross loans | 11,383 | 24,206 |
Credit Risk Grades, Substandard | ' | ' |
Loan portfolio by internal risk grading system as well as certain other information concerning the credit quality | ' | ' |
Total Gross loans | 35,491 | 51,130 |
Real Estate Secured | ' | ' |
Loan portfolio by internal risk grading system as well as certain other information concerning the credit quality | ' | ' |
Total Gross loans | 633,839 | 493,008 |
Real Estate Secured | Multi-family residential | ' | ' |
Loan portfolio by internal risk grading system as well as certain other information concerning the credit quality | ' | ' |
Total Gross loans | 31,140 | 21,467 |
Real Estate Secured | Multi-family residential | Credit Risk Grades, Pass | ' | ' |
Loan portfolio by internal risk grading system as well as certain other information concerning the credit quality | ' | ' |
Total Gross loans | 30,560 | 20,869 |
Real Estate Secured | Multi-family residential | Credit Risk Grades, Substandard | ' | ' |
Loan portfolio by internal risk grading system as well as certain other information concerning the credit quality | ' | ' |
Total Gross loans | 580 | 598 |
Real Estate Secured | Residential 1 to 4 family | ' | ' |
Loan portfolio by internal risk grading system as well as certain other information concerning the credit quality | ' | ' |
Total Gross loans | 88,904 | 41,444 |
Days Past Due | ' | ' |
30-59 | ' | 199 |
Non-Accruing | 449 | 835 |
Accruing TDR | 499 | ' |
Real Estate Secured | Residential 1 to 4 family | Credit Risk Grades, Pass | ' | ' |
Loan portfolio by internal risk grading system as well as certain other information concerning the credit quality | ' | ' |
Total Gross loans | 87,350 | 40,234 |
Real Estate Secured | Residential 1 to 4 family | Credit Risk Grades, Special Mention | ' | ' |
Loan portfolio by internal risk grading system as well as certain other information concerning the credit quality | ' | ' |
Total Gross loans | 490 | 6 |
Real Estate Secured | Residential 1 to 4 family | Credit Risk Grades, Substandard | ' | ' |
Loan portfolio by internal risk grading system as well as certain other information concerning the credit quality | ' | ' |
Total Gross loans | 1,064 | 1,204 |
Real Estate Secured | Home equity lines of credit | ' | ' |
Loan portfolio by internal risk grading system as well as certain other information concerning the credit quality | ' | ' |
Total Gross loans | 31,178 | 31,863 |
Days Past Due | ' | ' |
60-89 | ' | 47 |
Non-Accruing | ' | 58 |
Real Estate Secured | Home equity lines of credit | Credit Risk Grades, Pass | ' | ' |
Loan portfolio by internal risk grading system as well as certain other information concerning the credit quality | ' | ' |
Total Gross loans | 31,021 | 30,808 |
Real Estate Secured | Home equity lines of credit | Credit Risk Grades, Substandard | ' | ' |
Loan portfolio by internal risk grading system as well as certain other information concerning the credit quality | ' | ' |
Total Gross loans | 157 | 1,055 |
Real Estate Secured | Commercial | ' | ' |
Loan portfolio by internal risk grading system as well as certain other information concerning the credit quality | ' | ' |
Total Gross loans | 432,203 | 372,592 |
Days Past Due | ' | ' |
Non-Accruing | 672 | 928 |
Accruing TDR | 225 | ' |
Real Estate Secured | Commercial | Credit Risk Grades, Pass | ' | ' |
Loan portfolio by internal risk grading system as well as certain other information concerning the credit quality | ' | ' |
Total Gross loans | 414,058 | 332,968 |
Real Estate Secured | Commercial | Credit Risk Grades, Special Mention | ' | ' |
Loan portfolio by internal risk grading system as well as certain other information concerning the credit quality | ' | ' |
Total Gross loans | 3,574 | 14,235 |
Real Estate Secured | Commercial | Credit Risk Grades, Substandard | ' | ' |
Loan portfolio by internal risk grading system as well as certain other information concerning the credit quality | ' | ' |
Total Gross loans | 14,571 | 25,389 |
Real Estate Secured | Farmland | ' | ' |
Loan portfolio by internal risk grading system as well as certain other information concerning the credit quality | ' | ' |
Total Gross loans | 50,414 | 25,642 |
Days Past Due | ' | ' |
Non-Accruing | ' | 1,077 |
Real Estate Secured | Farmland | Credit Risk Grades, Pass | ' | ' |
Loan portfolio by internal risk grading system as well as certain other information concerning the credit quality | ' | ' |
Total Gross loans | 47,988 | 20,492 |
Real Estate Secured | Farmland | Credit Risk Grades, Special Mention | ' | ' |
Loan portfolio by internal risk grading system as well as certain other information concerning the credit quality | ' | ' |
Total Gross loans | 975 | 3,260 |
Real Estate Secured | Farmland | Credit Risk Grades, Substandard | ' | ' |
Loan portfolio by internal risk grading system as well as certain other information concerning the credit quality | ' | ' |
Total Gross loans | 1,451 | 1,890 |
Commercial | ' | ' |
Loan portfolio by internal risk grading system as well as certain other information concerning the credit quality | ' | ' |
Total Gross loans | 151,845 | 147,064 |
Commercial | Commercial and industrial | ' | ' |
Loan portfolio by internal risk grading system as well as certain other information concerning the credit quality | ' | ' |
Total Gross loans | 119,121 | 125,340 |
Days Past Due | ' | ' |
30-59 | 100 | 446 |
60-89 | ' | 104 |
90+ and Still Accruing | ' | 15 |
Non-Accruing | 2,180 | 4,657 |
Accruing TDR | 3,119 | 17 |
Commercial | Commercial and industrial | Credit Risk Grades, Pass | ' | ' |
Loan portfolio by internal risk grading system as well as certain other information concerning the credit quality | ' | ' |
Total Gross loans | 105,991 | 114,126 |
Commercial | Commercial and industrial | Credit Risk Grades, Special Mention | ' | ' |
Loan portfolio by internal risk grading system as well as certain other information concerning the credit quality | ' | ' |
Total Gross loans | 5,276 | 2,245 |
Commercial | Commercial and industrial | Credit Risk Grades, Substandard | ' | ' |
Loan portfolio by internal risk grading system as well as certain other information concerning the credit quality | ' | ' |
Total Gross loans | 7,854 | 8,969 |
Commercial | Agriculture | ' | ' |
Loan portfolio by internal risk grading system as well as certain other information concerning the credit quality | ' | ' |
Total Gross loans | 32,686 | 21,663 |
Days Past Due | ' | ' |
Non-Accruing | 789 | 907 |
Commercial | Agriculture | Credit Risk Grades, Pass | ' | ' |
Loan portfolio by internal risk grading system as well as certain other information concerning the credit quality | ' | ' |
Total Gross loans | 31,279 | 19,771 |
Commercial | Agriculture | Credit Risk Grades, Special Mention | ' | ' |
Loan portfolio by internal risk grading system as well as certain other information concerning the credit quality | ' | ' |
Total Gross loans | 196 | 106 |
Commercial | Agriculture | Credit Risk Grades, Substandard | ' | ' |
Loan portfolio by internal risk grading system as well as certain other information concerning the credit quality | ' | ' |
Total Gross loans | 1,211 | 1,786 |
Commercial | Other | ' | ' |
Loan portfolio by internal risk grading system as well as certain other information concerning the credit quality | ' | ' |
Total Gross loans | 38 | 61 |
Commercial | Other | Credit Risk Grades, Pass | ' | ' |
Loan portfolio by internal risk grading system as well as certain other information concerning the credit quality | ' | ' |
Total Gross loans | 38 | 61 |
Construction | ' | ' |
Loan portfolio by internal risk grading system as well as certain other information concerning the credit quality | ' | ' |
Total Gross loans | 13,699 | 19,716 |
Construction | Single family residential | ' | ' |
Loan portfolio by internal risk grading system as well as certain other information concerning the credit quality | ' | ' |
Total Gross loans | 3,873 | 8,074 |
Construction | Single family residential | Credit Risk Grades, Pass | ' | ' |
Loan portfolio by internal risk grading system as well as certain other information concerning the credit quality | ' | ' |
Total Gross loans | 3,873 | 8,074 |
Construction | Single family residential - Spec. | ' | ' |
Loan portfolio by internal risk grading system as well as certain other information concerning the credit quality | ' | ' |
Total Gross loans | 1,153 | 535 |
Construction | Single family residential - Spec. | Credit Risk Grades, Pass | ' | ' |
Loan portfolio by internal risk grading system as well as certain other information concerning the credit quality | ' | ' |
Total Gross loans | 1,153 | 535 |
Construction | Multi-family | ' | ' |
Loan portfolio by internal risk grading system as well as certain other information concerning the credit quality | ' | ' |
Total Gross loans | 736 | 778 |
Construction | Multi-family | Credit Risk Grades, Pass | ' | ' |
Loan portfolio by internal risk grading system as well as certain other information concerning the credit quality | ' | ' |
Total Gross loans | 736 | 778 |
Construction | Commercial | ' | ' |
Loan portfolio by internal risk grading system as well as certain other information concerning the credit quality | ' | ' |
Total Gross loans | 7,937 | 10,329 |
Days Past Due | ' | ' |
Non-Accruing | ' | 1,380 |
Construction | Commercial | Credit Risk Grades, Pass | ' | ' |
Loan portfolio by internal risk grading system as well as certain other information concerning the credit quality | ' | ' |
Total Gross loans | 7,937 | 8,469 |
Construction | Commercial | Credit Risk Grades, Substandard | ' | ' |
Loan portfolio by internal risk grading system as well as certain other information concerning the credit quality | ' | ' |
Total Gross loans | ' | 1,860 |
Land | ' | ' |
Loan portfolio by internal risk grading system as well as certain other information concerning the credit quality | ' | ' |
Total Gross loans | 24,523 | 24,664 |
Days Past Due | ' | ' |
30-59 | ' | 50 |
Non-Accruing | 5,910 | 7,182 |
Accruing TDR | 2,010 | ' |
Land | Credit Risk Grades, Pass | ' | ' |
Loan portfolio by internal risk grading system as well as certain other information concerning the credit quality | ' | ' |
Total Gross loans | 15,244 | 12,461 |
Land | Credit Risk Grades, Special Mention | ' | ' |
Loan portfolio by internal risk grading system as well as certain other information concerning the credit quality | ' | ' |
Total Gross loans | 862 | 4,124 |
Land | Credit Risk Grades, Substandard | ' | ' |
Loan portfolio by internal risk grading system as well as certain other information concerning the credit quality | ' | ' |
Total Gross loans | 8,417 | 8,079 |
Installment loans to individuals | ' | ' |
Loan portfolio by internal risk grading system as well as certain other information concerning the credit quality | ' | ' |
Total Gross loans | 3,246 | 4,895 |
Days Past Due | ' | ' |
60-89 | 2 | ' |
Non-Accruing | 117 | 285 |
Installment loans to individuals | Credit Risk Grades, Pass | ' | ' |
Loan portfolio by internal risk grading system as well as certain other information concerning the credit quality | ' | ' |
Total Gross loans | 3,050 | 4,365 |
Installment loans to individuals | Credit Risk Grades, Special Mention | ' | ' |
Loan portfolio by internal risk grading system as well as certain other information concerning the credit quality | ' | ' |
Total Gross loans | 10 | 230 |
Installment loans to individuals | Credit Risk Grades, Substandard | ' | ' |
Loan portfolio by internal risk grading system as well as certain other information concerning the credit quality | ' | ' |
Total Gross loans | 186 | 300 |
All other loans (including overdrafts) | ' | ' |
Loan portfolio by internal risk grading system as well as certain other information concerning the credit quality | ' | ' |
Total Gross loans | 332 | 261 |
All other loans (including overdrafts) | Credit Risk Grades, Pass | ' | ' |
Loan portfolio by internal risk grading system as well as certain other information concerning the credit quality | ' | ' |
Total Gross loans | $332 | $261 |
Allowance_for_Loan_Losses_ALLL2
Allowance for Loan Losses ("ALLL") (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||
In Thousands, unless otherwise specified | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Allocation of the allowance to various segments in the loan portfolio | ' | ' | ' | ' | ' | ' |
Balance, at the beginning of the period | ' | ' | $19,314 | $18,118 | $19,314 | $24,940 |
Charge-offs | ' | ' | ' | -2,026 | -11,233 | -14,086 |
Recoveries | ' | ' | ' | 1,767 | 2,356 | 2,397 |
Provisions for loan losses | 1,286 | 3,064 | 3,331 | ' | 7,681 | 6,063 |
Balance, at the end of the period | ' | ' | ' | 17,859 | 18,118 | 19,314 |
Amount of allowance attributed to: | ' | ' | ' | ' | ' | ' |
Specifically evaluated impaired loans | ' | ' | ' | 3,155 | 6,061 | ' |
General portfolio allocation | ' | ' | ' | 14,704 | 12,057 | ' |
Loans individually evaluated for impairment | ' | ' | ' | 14,449 | 17,341 | ' |
Loans collectively evaluated for impairment | ' | ' | ' | 813,035 | 672,267 | ' |
General reserves to total loans collectively evaluated for impairment (as a percent) | ' | ' | ' | 1.81% | 1.79% | ' |
Total gross loans | ' | ' | ' | 827,484 | 689,608 | ' |
Total allowance to gross loans (as a percent) | ' | ' | ' | 2.16% | 2.63% | ' |
Real Estate Secured | ' | ' | ' | ' | ' | ' |
Allocation of the allowance to various segments in the loan portfolio | ' | ' | ' | ' | ' | ' |
Balance, at the beginning of the period | ' | ' | 9,645 | 6,879 | 9,645 | 11,885 |
Charge-offs | ' | ' | ' | -131 | -2,482 | -8,325 |
Recoveries | ' | ' | ' | 361 | 1,253 | 360 |
Provisions for loan losses | ' | ' | ' | 2,048 | -1,537 | 5,725 |
Balance, at the end of the period | ' | ' | ' | 9,157 | 6,879 | 9,645 |
Amount of allowance attributed to: | ' | ' | ' | ' | ' | ' |
Specifically evaluated impaired loans | ' | ' | ' | ' | 25 | ' |
General portfolio allocation | ' | ' | ' | 9,157 | 6,854 | ' |
Loans individually evaluated for impairment | ' | ' | ' | 1,462 | 2,898 | ' |
Loans collectively evaluated for impairment | ' | ' | ' | 632,377 | 490,110 | ' |
General reserves to total loans collectively evaluated for impairment (as a percent) | ' | ' | ' | 1.45% | 1.40% | ' |
Total gross loans | ' | ' | ' | 633,839 | 493,008 | ' |
Total allowance to gross loans (as a percent) | ' | ' | ' | 1.44% | 1.40% | ' |
Commercial | ' | ' | ' | ' | ' | ' |
Allocation of the allowance to various segments in the loan portfolio | ' | ' | ' | ' | ' | ' |
Balance, at the beginning of the period | ' | ' | 6,549 | 6,154 | 6,549 | 9,507 |
Charge-offs | ' | ' | ' | -1,281 | -5,134 | -4,426 |
Recoveries | ' | ' | ' | 1,112 | 1,054 | 1,669 |
Provisions for loan losses | ' | ' | ' | -1,128 | 3,685 | -201 |
Balance, at the end of the period | ' | ' | ' | 4,857 | 6,154 | 6,549 |
Amount of allowance attributed to: | ' | ' | ' | ' | ' | ' |
Specifically evaluated impaired loans | ' | ' | ' | 623 | 2,185 | ' |
General portfolio allocation | ' | ' | ' | 4,234 | 3,969 | ' |
Loans individually evaluated for impairment | ' | ' | ' | 5,291 | 5,596 | ' |
Loans collectively evaluated for impairment | ' | ' | ' | 146,554 | 141,468 | ' |
General reserves to total loans collectively evaluated for impairment (as a percent) | ' | ' | ' | 2.89% | 2.81% | ' |
Total gross loans | ' | ' | ' | 151,845 | 147,064 | ' |
Total allowance to gross loans (as a percent) | ' | ' | ' | 3.20% | 4.18% | ' |
Construction | ' | ' | ' | ' | ' | ' |
Allocation of the allowance to various segments in the loan portfolio | ' | ' | ' | ' | ' | ' |
Balance, at the beginning of the period | ' | ' | 488 | 313 | 488 | 1,353 |
Charge-offs | ' | ' | ' | -169 | -1,128 | -338 |
Recoveries | ' | ' | ' | 153 | 1 | 112 |
Provisions for loan losses | ' | ' | ' | -35 | 952 | -639 |
Balance, at the end of the period | ' | ' | ' | 262 | 313 | 488 |
Amount of allowance attributed to: | ' | ' | ' | ' | ' | ' |
General portfolio allocation | ' | ' | ' | 262 | 313 | ' |
Loans individually evaluated for impairment | ' | ' | ' | ' | 1,380 | ' |
Loans collectively evaluated for impairment | ' | ' | ' | 13,699 | 18,336 | ' |
General reserves to total loans collectively evaluated for impairment (as a percent) | ' | ' | ' | 1.91% | 1.71% | ' |
Total gross loans | ' | ' | ' | 13,699 | 19,716 | ' |
Total allowance to gross loans (as a percent) | ' | ' | ' | 1.91% | 1.59% | ' |
Land | ' | ' | ' | ' | ' | ' |
Allocation of the allowance to various segments in the loan portfolio | ' | ' | ' | ' | ' | ' |
Balance, at the beginning of the period | ' | ' | 2,416 | 4,670 | 2,416 | 2,000 |
Charge-offs | ' | ' | ' | -34 | -2,168 | -793 |
Recoveries | ' | ' | ' | 73 | 22 | 207 |
Provisions for loan losses | ' | ' | ' | -1,258 | 4,400 | 1,002 |
Balance, at the end of the period | ' | ' | ' | 3,451 | 4,670 | 2,416 |
Amount of allowance attributed to: | ' | ' | ' | ' | ' | ' |
Specifically evaluated impaired loans | ' | ' | ' | 2,532 | 3,829 | ' |
General portfolio allocation | ' | ' | ' | 919 | 841 | ' |
Loans individually evaluated for impairment | ' | ' | ' | 7,696 | 7,182 | ' |
Loans collectively evaluated for impairment | ' | ' | ' | 16,827 | 17,482 | ' |
General reserves to total loans collectively evaluated for impairment (as a percent) | ' | ' | ' | 5.46% | 4.81% | ' |
Total gross loans | ' | ' | ' | 24,523 | 24,664 | ' |
Total allowance to gross loans (as a percent) | ' | ' | ' | 14.07% | 18.93% | ' |
Installment | ' | ' | ' | ' | ' | ' |
Allocation of the allowance to various segments in the loan portfolio | ' | ' | ' | ' | ' | ' |
Balance, at the beginning of the period | ' | ' | 175 | 64 | 175 | 166 |
Charge-offs | ' | ' | ' | -411 | -184 | -204 |
Recoveries | ' | ' | ' | 68 | 23 | 49 |
Provisions for loan losses | ' | ' | ' | 379 | 50 | 164 |
Balance, at the end of the period | ' | ' | ' | 100 | 64 | 175 |
Amount of allowance attributed to: | ' | ' | ' | ' | ' | ' |
Specifically evaluated impaired loans | ' | ' | ' | ' | 22 | ' |
General portfolio allocation | ' | ' | ' | 100 | 42 | ' |
Loans individually evaluated for impairment | ' | ' | ' | ' | 285 | ' |
Loans collectively evaluated for impairment | ' | ' | ' | 3,246 | 4,610 | ' |
General reserves to total loans collectively evaluated for impairment (as a percent) | ' | ' | ' | 3.08% | 0.91% | ' |
Total gross loans | ' | ' | ' | 3,246 | 4,895 | ' |
Total allowance to gross loans (as a percent) | ' | ' | ' | 3.08% | 1.31% | ' |
All Other Loans | ' | ' | ' | ' | ' | ' |
Allocation of the allowance to various segments in the loan portfolio | ' | ' | ' | ' | ' | ' |
Balance, at the beginning of the period | ' | ' | 41 | 38 | 41 | 29 |
Charge-offs | ' | ' | ' | ' | -137 | ' |
Recoveries | ' | ' | ' | ' | 3 | ' |
Provisions for loan losses | ' | ' | ' | -6 | 131 | 12 |
Balance, at the end of the period | ' | ' | ' | 32 | 38 | 41 |
Amount of allowance attributed to: | ' | ' | ' | ' | ' | ' |
General portfolio allocation | ' | ' | ' | 32 | 38 | ' |
Loans collectively evaluated for impairment | ' | ' | ' | 332 | 261 | ' |
General reserves to total loans collectively evaluated for impairment (as a percent) | ' | ' | ' | 9.64% | 14.56% | ' |
Total gross loans | ' | ' | ' | 332 | 261 | ' |
Total allowance to gross loans (as a percent) | ' | ' | ' | 9.64% | 14.56% | ' |
Unallocated allowances | ' | ' | ' | ' | ' | ' |
Amount of allowance attributed to: | ' | ' | ' | ' | ' | ' |
General portfolio allocation | ' | ' | ' | $300 | $100 | ' |
Property_Premises_and_Equipmen2
Property, Premises and Equipment (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Property, Premises and Equipment | ' | ' | ' |
Total cost | $33,749 | $27,990 | ' |
Less: accumulated depreciation and amortization | 9,529 | 12,034 | ' |
Total property, premises and equipment | 24,220 | 15,956 | ' |
Depreciation expense | 1,368 | 1,348 | 1,256 |
Land | ' | ' | ' |
Property, Premises and Equipment | ' | ' | ' |
Total cost | 3,633 | 3,633 | ' |
Furniture and equipment | ' | ' | ' |
Property, Premises and Equipment | ' | ' | ' |
Total cost | 5,751 | 9,086 | ' |
Building and improvements | ' | ' | ' |
Property, Premises and Equipment | ' | ' | ' |
Total cost | 15,347 | 15,187 | ' |
Construction in progress | ' | ' | ' |
Property, Premises and Equipment | ' | ' | ' |
Total cost | $9,018 | $84 | ' |
Deferred_Tax_Assets_and_Income2
Deferred Tax Assets and Income Taxes (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||
Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2009 | |
Deferred tax assets | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Reserves for loan losses | ' | ' | ' | ' | $8,679,000 | $14,348,000 | ' | ' | ' |
Forgone interest on non-accrual loans | ' | ' | ' | ' | 933,000 | 884,000 | ' | ' | ' |
Fixed assets | ' | ' | ' | ' | 411,000 | 405,000 | ' | ' | ' |
Accruals | ' | ' | ' | ' | 1,025,000 | 792,000 | ' | ' | ' |
Alternative minimum tax credit | ' | ' | ' | ' | 2,855,000 | 2,153,000 | ' | ' | ' |
Deferred income | ' | ' | ' | ' | 2,190,000 | 1,838,000 | ' | ' | ' |
Deferred compensation | ' | ' | ' | ' | 1,603,000 | 1,477,000 | ' | ' | ' |
Net operating loss carryforward | ' | ' | ' | ' | 6,000 | 907,000 | ' | ' | ' |
Other than temporary impairment | ' | ' | ' | ' | ' | 45,000 | ' | ' | ' |
Investment securities valuation | ' | ' | ' | ' | 2,395,000 | ' | ' | ' | ' |
Realized built-in loss subject to 382 | ' | ' | ' | ' | 2,228,000 | 3,234,000 | ' | ' | ' |
Charitable contribution | ' | ' | ' | ' | ' | 61,000 | ' | ' | ' |
State deferred tax | ' | ' | ' | ' | 961,000 | 59,000 | ' | ' | ' |
Total deferred tax assets | ' | ' | ' | ' | 23,286,000 | 26,203,000 | ' | ' | ' |
Valuation allowance | ' | ' | ' | ' | 0 | ' | ' | ' | ' |
Deferred tax liabilities | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair value adjustment for purchased assets | ' | ' | ' | ' | 330,000 | 455,000 | ' | ' | ' |
Investment securities valuation | ' | ' | ' | ' | ' | 2,745,000 | ' | ' | ' |
Deferred costs, prepaids and FHLB advances | ' | ' | ' | ' | 1,332,000 | 1,070,000 | ' | ' | ' |
Total deferred tax liabilities | ' | ' | ' | ' | 1,662,000 | 4,270,000 | ' | ' | ' |
Net deferred tax assets | ' | ' | ' | ' | 21,624,000 | 21,933,000 | ' | ' | ' |
Cumulative loss position period | ' | ' | ' | ' | ' | ' | ' | '3 years | '3 years |
Change in deferred tax asset valuation allowance | -4,100,000 | -700,000 | -800,000 | -1,500,000 | ' | -5,600,000 | ' | 7,100,000 | ' |
Determination of the valuation allowance, cumulative pre-tax losses period | ' | ' | ' | ' | ' | ' | ' | '3 years | ' |
Determination of the valuation allowance, expected deferred tax assets realization period | ' | ' | ' | ' | ' | ' | ' | '5 years | ' |
Current: | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Federal | ' | ' | ' | ' | 1,181,000 | 3,083,000 | -524,000 | ' | ' |
State | ' | ' | ' | ' | 368,000 | 1,264,000 | 504,000 | ' | ' |
Total current provision | ' | ' | ' | ' | 1,549,000 | 4,347,000 | -20,000 | ' | ' |
Deferred: | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Federal | ' | ' | ' | ' | 3,816,000 | -455,000 | 2,852,000 | ' | ' |
State | ' | ' | ' | ' | 1,632,000 | -85,000 | 496,000 | ' | ' |
Total deferred provision / (benefit) | ' | ' | ' | ' | 5,448,000 | -540,000 | 3,348,000 | ' | ' |
Deferred Tax Valuation Allowance: | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Federal | ' | ' | ' | ' | ' | -3,662,000 | -1,110,000 | ' | ' |
State | ' | ' | ' | ' | ' | -1,943,000 | -390,000 | ' | ' |
Total deferred tax valuation allowance change | ' | ' | ' | ' | ' | -5,605,000 | -1,500,000 | ' | ' |
Total income tax provision / (benefit) | ' | ' | ' | ' | 6,997,000 | -1,798,000 | 1,828,000 | ' | ' |
Reconciliation of the statutory federal income tax expense / (benefit) to the Company's effective income tax (benefit) / expense | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Tax provision at federal statutory tax rate | ' | ' | ' | ' | 6,243,000 | 3,934,000 | 3,344,000 | ' | ' |
State income taxes, net of federal income tax benefit | ' | ' | ' | ' | 1,300,000 | 766,000 | 650,000 | ' | ' |
Change in deferred tax asset valuation allowance | ' | ' | ' | ' | ' | -5,605,000 | -1,500,000 | ' | ' |
Bank owned life insurance | ' | ' | ' | ' | -167,000 | -180,000 | -183,000 | ' | ' |
Tax exempt income, net of interest expense | ' | ' | ' | ' | -610,000 | -608,000 | -545,000 | ' | ' |
Merger and integration | ' | ' | ' | ' | 271,000 | ' | ' | ' | ' |
Other, net | ' | ' | ' | ' | -40,000 | -105,000 | 62,000 | ' | ' |
Total income tax provision / (benefit) | ' | ' | ' | ' | 6,997,000 | -1,798,000 | 1,828,000 | ' | ' |
Reconciliation of the statutory federal income tax expense / (benefit) rate to the Company's effective income tax (benefit) / expense rate | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Tax provision at federal statutory tax rate (as a percent) | ' | ' | ' | ' | 35.00% | 35.00% | 35.00% | ' | ' |
State income taxes, net of federal income tax benefit (as a percent) | ' | ' | ' | ' | 7.30% | 6.80% | 6.80% | ' | ' |
Change in deferred tax asset valuation allowance (as a percent) | ' | ' | ' | ' | ' | -49.90% | -15.70% | ' | ' |
Bank owned life insurance (as a percent) | ' | ' | ' | ' | -0.90% | -1.60% | -1.90% | ' | ' |
Tax exempt income, net of interest expense (as a percent) | ' | ' | ' | ' | -3.40% | -5.40% | -5.70% | ' | ' |
Merger and integration (as a percent) | ' | ' | ' | ' | 1.50% | ' | ' | ' | ' |
Other, net (as a percent) | ' | ' | ' | ' | -0.30% | -0.90% | 0.60% | ' | ' |
Total income tax provision / (benefit) (as a percent) | ' | ' | ' | ' | 39.20% | -16.00% | 19.10% | ' | ' |
Federal | ' | ' | ' | ' | ' | ' | ' | ' | ' |
NOL and tax credit carry-forward | ' | ' | ' | ' | ' | ' | ' | ' | ' |
NOL available for carry-forward | ' | ' | ' | ' | 100,000 | ' | ' | ' | ' |
Alternative minimum tax credit | ' | ' | ' | ' | 2,000,000 | ' | ' | ' | ' |
State tax | ' | ' | ' | ' | ' | ' | ' | ' | ' |
NOL and tax credit carry-forward | ' | ' | ' | ' | ' | ' | ' | ' | ' |
NOL available for carry-forward | ' | ' | ' | ' | 300,000 | ' | ' | ' | ' |
Additional NOL incurred during 2009 which expires in 2029 | ' | ' | ' | ' | 6,200,000 | ' | ' | ' | ' |
Alternative minimum tax credit | ' | ' | ' | ' | $700,000 | ' | ' | ' | ' |
Goodwill_and_Other_Intangible_2
Goodwill and Other Intangible Assets (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Goodwill and Other Intangible Assets | ' | ' | ' |
Goodwill | $11,200,000 | ' | ' |
Core deposit intangible | ' | ' | ' |
Amortization of CDI | 400,000 | 342,000 | 445,000 |
Gross Carrying Amount | 4,201,000 | ' | ' |
Accumulated Amortization | -2,857,000 | ' | ' |
Net Carrying Amount | 1,344,000 | ' | ' |
Estimated Amortization | ' | ' | ' |
Year 2014 | -400,000 | ' | ' |
Year 2015 | -400,000 | ' | ' |
Year 2016 | -371,000 | ' | ' |
Year 2017 | -58,000 | ' | ' |
Year 2018 | -58,000 | ' | ' |
Year 2019 | -58,000 | ' | ' |
Year 2014 | ' | ' | ' |
Core deposit intangible | ' | ' | ' |
Net Carrying Amount | 944,000 | ' | ' |
Year 2015 | ' | ' | ' |
Core deposit intangible | ' | ' | ' |
Net Carrying Amount | 544,000 | ' | ' |
Year 2016 | ' | ' | ' |
Core deposit intangible | ' | ' | ' |
Net Carrying Amount | 173,000 | ' | ' |
Year 2017 | ' | ' | ' |
Core deposit intangible | ' | ' | ' |
Net Carrying Amount | 115,000 | ' | ' |
Year 2018 | ' | ' | ' |
Core deposit intangible | ' | ' | ' |
Net Carrying Amount | 58,000 | ' | ' |
Year 2019 | ' | ' | ' |
Core deposit intangible | ' | ' | ' |
Net Carrying Amount | $0 | ' | ' |
Other_Real_Estate_Owned_OREO_D
Other Real Estate Owned ("OREO") (Details) (USD $) | 1 Months Ended | 12 Months Ended | ||
In Thousands, unless otherwise specified | Jan. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Other Real Estate Owned ("OREO") | ' | ' | ' | ' |
Other Real Estate Owned, balance at the beginning of the period | ' | ' | $917 | $6,668 |
Additions | 1,400 | 1,374 | 769 | 3,484 |
Disposals | ' | -1,374 | -1,588 | -8,100 |
Writedowns | ' | ' | -98 | -1,135 |
Other Real Estate Owned, balance at the end of the period | ' | ' | ' | 917 |
Real Estate Secured | Residential 1 to 4 family | ' | ' | ' | ' |
Other Real Estate Owned ("OREO") | ' | ' | ' | ' |
Other Real Estate Owned, balance at the beginning of the period | ' | ' | ' | 160 |
Additions | ' | ' | 607 | 865 |
Disposals | ' | ' | -576 | -1,025 |
Writedowns | ' | ' | -31 | ' |
Real Estate Secured | Commercial | ' | ' | ' | ' |
Other Real Estate Owned ("OREO") | ' | ' | ' | ' |
Other Real Estate Owned, balance at the beginning of the period | ' | ' | 215 | 3,953 |
Additions | ' | 1,374 | ' | 2,578 |
Disposals | ' | -1,374 | -215 | -5,500 |
Writedowns | ' | ' | ' | -816 |
Other Real Estate Owned, balance at the end of the period | ' | ' | ' | 215 |
Construction | Single family residential - Spec. | ' | ' | ' | ' |
Other Real Estate Owned ("OREO") | ' | ' | ' | ' |
Other Real Estate Owned, balance at the beginning of the period | ' | ' | 423 | 475 |
Disposals | ' | ' | -397 | ' |
Writedowns | ' | ' | -26 | -52 |
Other Real Estate Owned, balance at the end of the period | ' | ' | ' | 423 |
Construction | Tract | ' | ' | ' | ' |
Other Real Estate Owned ("OREO") | ' | ' | ' | ' |
Other Real Estate Owned, balance at the beginning of the period | ' | ' | 100 | 251 |
Disposals | ' | ' | -100 | -117 |
Writedowns | ' | ' | ' | -34 |
Other Real Estate Owned, balance at the end of the period | ' | ' | ' | 100 |
Land | ' | ' | ' | ' |
Other Real Estate Owned ("OREO") | ' | ' | ' | ' |
Other Real Estate Owned, balance at the beginning of the period | ' | ' | 179 | 1,365 |
Additions | ' | ' | 162 | 41 |
Disposals | ' | ' | -300 | -994 |
Writedowns | ' | ' | -41 | -233 |
Other Real Estate Owned, balance at the end of the period | ' | ' | ' | 179 |
Commercial | Commercial and industrial | ' | ' | ' | ' |
Other Real Estate Owned ("OREO") | ' | ' | ' | ' |
Other Real Estate Owned, balance at the beginning of the period | ' | ' | ' | 464 |
Disposals | ' | ' | ' | ($464) |
Deposits_Details
Deposits (Details) (USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Amount Due | ' |
2014 | $131,494 |
2015 | 37,538 |
2016 | 11,887 |
2017 | 9,024 |
2018 | 15,920 |
Over 5 Years | 13,958 |
Total | $219,821 |
Borrowings_Details
Borrowings (Details) (USD $) | 12 Months Ended | 12 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 12 Months Ended | 0 Months Ended | 1 Months Ended | |||||||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Oct. 27, 2006 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Sep. 20, 2007 | Jun. 30, 2010 | Jun. 02, 2010 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | |
FHLB | Fixed rate FHLB advances with interest rates ranging from 0.6% to 2.4% | Fixed rate FHLB advances with interest rates ranging from 0.6% to 2.4% | Fixed rate FHLB advances with interest rates ranging from 0.6% to 2.4% | Variable rate FHLB advances with an interest rate of 0.6% | Junior subordinated debentures | Junior subordinated debentures | Heritage Oaks Capital Trust II | Heritage Oaks Capital Trust II | Heritage Oaks Capital Trust II | Heritage Oaks Capital Trust II | Heritage Oaks Capital Trust II | Trust III | Trust III | Trust III | Heritage Oaks Bank | Heritage Oaks Bank | Heritage Oaks Bank | Heritage Oaks Bank | |||
Minimum | Maximum | Maximum | Junior subordinated debentures | Junior subordinated debentures | Junior subordinated debentures | Junior subordinated debentures | Junior subordinated debentures | Junior subordinated debentures | Junior subordinated debentures | Correspondent Banks | Federal Reserve Bank | FHLB | Letter of credit | ||||||||
Maximum | |||||||||||||||||||||
item | |||||||||||||||||||||
Borrowings | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Borrowing line | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $62,000,000 | $9,300,000 | ' | $11,500,000 |
Balances outstanding on borrowing line | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | ' | ' | ' |
Loans pledged as collateral | ' | ' | 584,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Remaining borrowing capacity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 212,900,000 | ' |
FHLB payment requirements | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2014 | 29,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2016 | 10,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2017 | 13,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2018 | 5,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Due More Than 5 Years | 30,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total | 88,500,000 | ' | ' | 59,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Short term FHLB borrowing | 29,000,000 | 33,000,000 | ' | ' | ' | ' | 29,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fixed interest rate (as a percent) | ' | ' | ' | ' | 0.60% | 2.40% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Variable interest rate (as a percent) | ' | ' | ' | ' | ' | ' | 0.06% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Junior Subordinated Debentures | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debentures issued | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8,200,000 | ' | ' | ' | 5,200,000 | ' | ' | ' | ' | ' | ' |
Face amount of trust preferred securities repurchased | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,000,000 | ' | ' | ' | ' | ' |
Repurchase of debt instrument | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,200,000 | ' | ' | ' | ' |
Pre-tax gain on repurchase of debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,700,000 | ' | ' | ' | ' | ' |
Debentures issued and outstanding | 8,248,000 | 8,248,000 | ' | ' | ' | ' | ' | ' | ' | 8,248,000 | ' | 8,200,000 | 8,200,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of minority interest purchased | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3.10% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount paid for purchase of minority interest | ' | ' | ' | ' | ' | ' | ' | ' | ' | 200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Variable rate basis | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '3-month LIBOR plus | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Variable rate basis spread (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.72% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Current Rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.97% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of consecutive quarterly periods for which interest can be deferred under the indenture | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20 | ' | ' | ' | ' | ' | ' | ' |
Percentage of junior subordinate debentures, which may constitute for Tier I capital | ' | ' | ' | ' | ' | ' | ' | ' | 25.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Junior subordinated debt included in Tier I capital | $8,000,000 | $8,000,000 | ' | ' | ' | ' | ' | $8,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Salary_Continuation_Plan_Detai
Salary Continuation Plan (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
item | |||
Salary Continuation Plan | ' | ' | ' |
Number of active officers covered | 4 | ' | ' |
Number of retired officers covered | 3 | ' | ' |
Liability under salary continuation agreements | $2.70 | $2.80 | ' |
Expenses associated with the salary continuation plans | 0.3 | 0.2 | 0.5 |
Cash surrender values of the life insurance policies | $15.80 | $15.30 | ' |
Maximum | ' | ' | ' |
Salary Continuation Plan | ' | ' | ' |
Period for which annual cash payments are payable | '15 years | ' | ' |
Age at which annual cash payments are payable | '65 years | ' | ' |
Minimum | ' | ' | ' |
Salary Continuation Plan | ' | ' | ' |
Age at which annual cash payments are payable | '60 years | ' | ' |
Employee_Benefit_Plans_Details
Employee Benefit Plans (Details) (USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Savings plan pursuant to section 401(k) of the Internal Revenue Code | ' | ' | ' |
Participants' contribution limit as a percentage of their salary | 15.00% | ' | ' |
Expenses incurred as associated with the plan | $0.10 | $0.10 | $0.20 |
ESOP | ' | ' | ' |
Number of consecutive months of service to be fulfilled by employees for eligibility to be covered under the plan | ' | '12 months | ' |
Minimum age of employees for eligibility to be covered under the plan | ' | '21 years | ' |
Minimum hours of work required by the employees to be covered under the plan per year | ' | '1000 hours | ' |
Contributions to the plan | $0 | $0 | $0 |
Company's common stock held under the plan (in shares) | 0 | ' | ' |
ShareBased_Compensation_Plans_1
Share-Based Compensation Plans (Details) (USD $) | 12 Months Ended | 0 Months Ended | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Mar. 25, 2005 | Mar. 25, 2005 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | |
item | Stock option | Stock option | Stock option | Stock option | Stock option | Restricted stock | Restricted stock | Restricted stock | Restricted stock | Restricted stock | Restricted stock | 2005 Plan | 2005 Plan | 2005 Plan | 2005 Plan | 2005 Plan | 2005 Plan | 1997 Stock Option Plan | 1997 Stock Option Plan | |||
Minimum | Maximum | Maximum | Maximum | Maximum | Maximum | Stock option | Stock option | Restricted stock | Restricted stock | Stock option | Stock option | |||||||||||
Minimum | Maximum | Minimum | Maximum | Maximum | ||||||||||||||||||
Share-Based Compensation Plans | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of share-based employee compensation plans | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Summary of the expenses the Company has recognized related to share-based compensation | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of the company's issued and outstanding shares of common stock offered under the plan | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10.00% | ' | ' | ' | ' | ' | ' |
Percentage of the company's issued and outstanding shares of common stock offered under the plan after inception on each anniversary | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10.00% | ' | ' | ' | ' | ' | ' | ' |
Vesting rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20.00% | ' |
Vesting period | ' | ' | ' | ' | ' | ' | '3 years | '5 years | ' | ' | ' | ' | ' | ' | ' | ' | '3 years | '4 years | '3 years | '5 years | '5 years | ' |
Expiration term | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '10 years | ' | ' | ' | '10 years |
Number of Shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Balance at the beginning of the period (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | 196,850 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Granted (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | 72,786 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Vested (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | -58,175 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Forfeited (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | -15,873 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Balance at the end of the period (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | 195,048 | 196,850 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Average Grant Date fair Value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Balance at the beginning of the period (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | $4.27 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Granted (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | $6.26 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Vested (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | $4.43 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Forfeited (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | $5.42 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Balance at the end of the period (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | $4.87 | $4.27 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Income tax benefit recognized related to stock compensation | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $100,000 | $100,000 | $100,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Options outstanding, at the beginning of the period (in shares) | ' | ' | ' | 523,129 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Granted (in shares) | ' | ' | ' | 161,446 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Forfeited (in shares) | ' | ' | ' | -84,286 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Exercised (in shares) | ' | ' | ' | -33,757 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expired (in shares) | ' | ' | ' | -4,275 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Options outstanding, at the end of the period (in shares) | ' | ' | ' | 562,257 | 523,129 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted Average Exercise Price | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Options outstanding, at the beginning of the period (in dollars per share) | ' | ' | ' | $6.11 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Granted (in dollars per share) | ' | ' | ' | $6.28 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Forfeited (in dollars per share) | ' | ' | ' | $5.78 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Exercised (in dollars per share) | ' | ' | ' | $4.09 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expired (in dollars per share) | ' | ' | ' | $4.62 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Options outstanding, at the end of the period (in dollars per share) | ' | ' | ' | $6.34 | $6.11 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Options Exercisable (in shares) | ' | ' | ' | 293,586 | 255,112 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Options Available for Grant (in shares) | ' | ' | ' | 1,593,616 | 1,715,616 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted Average Fair Value Options, end of year (in dollars per share) | ' | ' | ' | $3.08 | $2.93 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Options vested or expected to vest | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares | ' | ' | ' | 543,260 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted Average Exercise Price (in dollars per share) | ' | ' | ' | $6.35 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted Average Remaining Contractual Life | ' | ' | ' | '7 years 1 month 20 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate Intrinsic Value | ' | ' | ' | 1,157,995 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Options exercisable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares | ' | ' | ' | 293,586 | 255,112 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted Average Exercise Price (in dollars per share) | ' | ' | ' | $6.71 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted Average Remaining Contractual Life | ' | ' | ' | '5 years 6 months 7 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate Intrinsic Value | ' | ' | ' | 765,228 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate intrinsic value of options exercised | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate intrinsic value of options exercised | ' | ' | ' | 100,000 | 100,000 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based compensation expense | 533,000 | 331,000 | 299,000 | 240,000 | 127,000 | 241,000 | ' | ' | 293,000 | 204,000 | 58,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unrecognized compensation expense | $1,296,000 | $1,102,000 | $597,000 | $645,000 | $529,000 | $365,000 | ' | ' | $651,000 | $573,000 | $232,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted-average period over which expense is expected to be recognized | ' | ' | ' | '3 years | ' | ' | ' | ' | '2 years 10 months 24 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Assumptions used in the calculation of the weighted average fair value of options granted | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expected volatility (as a percent) | ' | ' | ' | 55.33% | 52.26% | 50.73% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expected term | ' | ' | ' | '6 years | '7 years | '7 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Dividend yield (as a percent) | ' | ' | ' | 0.00% | 0.00% | 0.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Risk free rate (as a percent) | ' | ' | ' | 1.54% | 1.11% | 2.74% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted-average grant date fair value (in dollars per share) | ' | ' | ' | $3.30 | $2.87 | $2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash_Dividends_Stock_Dividends1
Cash Dividends, Stock Dividends and Stock Splits (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Cash Dividends, Stock Dividends and Stock Splits | ' | ' | ' |
Cash dividends paid on common stock | $0 | $0 | $0 |
Stock dividends paid on common stock | $0 | $0 | $0 |
Preferred_Stock_Details
Preferred Stock (Details) (USD $) | 0 Months Ended | 12 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | |||
Mar. 04, 2010 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Jul. 17, 2013 | Dec. 31, 2013 | Mar. 12, 2010 | Dec. 31, 2013 | Aug. 07, 2013 | Dec. 31, 2013 | |
item | Minimum | Maximum | Series A senior preferred stock | Series A senior preferred stock | Series C preferred stock | Series C preferred stock | Common Stock | Common Stock | |||
item | |||||||||||
Preferred Stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Preferred stock, shares authorized | ' | 5,000,000 | 5,000,000 | ' | 5,000,000 | ' | ' | ' | ' | ' | ' |
Number of series of preferred stock | ' | ' | ' | 1 | ' | ' | ' | ' | ' | ' | ' |
Issuance of stock (in shares) | ' | ' | ' | ' | ' | ' | ' | 1,189,538 | ' | ' | ' |
Repurchase price paid for warrant issued to U.S. Treasury under CPP | ' | ' | ' | ' | ' | ' | ' | ' | ' | $1,600,000 | ' |
Liquidation preference per share (in dollars per share) | ' | ' | ' | ' | ' | ' | $1,000 | ' | ' | ' | ' |
Coupon rate for five years (as a percent) | ' | ' | ' | ' | ' | ' | 5.00% | ' | ' | ' | ' |
Coupon rate thereafter (as a percent) | ' | ' | ' | ' | ' | ' | 9.00% | ' | ' | ' | ' |
Percentage of liquidation preference amount at which the stock may be redeemed | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' |
Period of redemption from the date of issue | ' | ' | ' | ' | ' | ' | '3 years | ' | ' | ' | ' |
Warrants issued as a percentage of preferred equity issuance amount | ' | ' | ' | ' | ' | ' | 15.00% | ' | ' | ' | ' |
Value of warrants issued to U.S. Treasury to purchase shares of common stock | ' | ' | ' | ' | ' | ' | 3,200,000 | ' | ' | ' | ' |
Repurchase of shares | ' | ' | ' | ' | ' | ' | 21,000 | ' | ' | ' | ' |
Numbers of shares to be exchanged from warrants subject to Company's offer to repurchase | ' | ' | ' | ' | ' | ' | 611,650 | ' | ' | ' | 611,650 |
Exercise price of warrants outstanding (in dollars per share) | ' | ' | ' | ' | ' | ' | $5.15 | ' | ' | ' | ' |
Expiration period of warrants issued | ' | ' | ' | ' | ' | ' | '10 years | ' | ' | ' | ' |
Discount rate (as a percent) | ' | ' | ' | ' | ' | ' | 10.00% | ' | ' | ' | ' |
Fair value of preferred stock | ' | ' | ' | ' | ' | ' | 19,200,000 | ' | ' | ' | ' |
Fair value of warrant | ' | ' | ' | ' | ' | ' | 1,800,000 | ' | ' | ' | ' |
Period over which discount is accreted on preferred stock | ' | ' | ' | ' | ' | ' | '5 years | ' | ' | ' | ' |
Amount of shares repurchased, including accrued but unpaid dividends | ' | 21,000,000 | ' | ' | ' | 21,200,000 | ' | ' | ' | ' | ' |
Gross proceeds from private placement | 60,000,000 | ' | ' | ' | ' | ' | ' | 3,600,000 | ' | ' | ' |
Preferred stock conversion ratio | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' | ' |
Stated dividend rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | 0.00% | ' | ' |
Conversion price (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | $3.25 | ' | ' |
Value of contingent beneficial conversion feature to be recognized upon conversion | ' | ' | ' | ' | ' | ' | ' | ' | $200,000 | ' | ' |
Number of investors having board observation rights | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of investors having board nomination rights | ' | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Earnings_Per_Share_Details
Earnings Per Share (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Calculation of both basic and diluted earnings per common share | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income | $1,634 | $2,761 | $2,716 | $3,730 | $3,127 | $6,428 | $1,897 | $1,585 | $10,841 | $13,037 | $7,725 |
Dividends and accretion on preferred stock | ' | -181 | -359 | -358 | -357 | -357 | -375 | -381 | -898 | -1,470 | -1,358 |
Net income available to common shareholders | $1,634 | $2,580 | $2,357 | $3,372 | $2,770 | $6,071 | $1,522 | $1,204 | $9,943 | $11,567 | $6,367 |
Weighted average shares outstanding | ' | ' | ' | ' | ' | ' | ' | ' | 25,152,054 | 25,081,462 | 25,048,477 |
Basic earnings per common share (in dollars per share) | $0.06 | $0.10 | $0.09 | $0.13 | $0.11 | $0.24 | $0.06 | $0.05 | $0.40 | $0.46 | $0.25 |
Dilutive effect of share-based compensation awards, common stock warrants, and convertible perpetual preferred stock (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | 1,390,635 | 1,320,408 | 1,206,268 |
Weighted average diluted shares outstanding | ' | ' | ' | ' | ' | ' | ' | ' | 26,542,689 | 26,401,870 | 26,254,745 |
Diluted earnings per common share (in dollars per share) | $0.06 | $0.10 | $0.09 | $0.13 | $0.10 | $0.23 | $0.06 | $0.05 | $0.37 | $0.44 | $0.24 |
Stock options | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares excluded from the calculation of diluted earnings per share | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares excluded from the calculation of diluted earnings per share | ' | ' | ' | ' | ' | ' | ' | ' | 360,000 | 280,000 | 580,000 |
Warrant | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares excluded from the calculation of diluted earnings per share | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares excluded from the calculation of diluted earnings per share | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 612,000 |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Non-cancelable operating leases | ' | ' | ' |
Number of branches of the entity for which buildings were purchased | ' | 3 | ' |
Number of branches closed | ' | 3 | ' |
Minimum | ' | ' | ' |
Non-cancelable operating leases | ' | ' | ' |
Optional extension period of operating leases | '3 years | ' | ' |
Lease expiration term | ' | '1 month | ' |
Maximum | ' | ' | ' |
Non-cancelable operating leases | ' | ' | ' |
Optional extension period of operating leases | '7 years | ' | ' |
Lease expiration term | ' | '12 months | ' |
Heritage Oaks Bank | ' | ' | ' |
Outstanding financial commitments whose contractual amount represents credit risk | ' | ' | ' |
Total commitments and standby letters of credit | $198,481,000 | $178,432,000 | ' |
Outstanding financial fixed rate commitments | 31,600,000 | ' | ' |
Outstanding financial variable rate commitments | 166,900,000 | ' | ' |
Non-cancelable operating leases | ' | ' | ' |
Due 2014 | 1,257,000 | ' | ' |
Due 2015 | 927,000 | ' | ' |
Due 2016 | 384,000 | ' | ' |
Due 2017 | 103,000 | ' | ' |
Total | 2,671,000 | ' | ' |
Total rent expense charged for leases | 1,600,000 | 1,900,000 | 2,500,000 |
Heritage Oaks Bank | Commitments to extend credit | ' | ' | ' |
Outstanding financial commitments whose contractual amount represents credit risk | ' | ' | ' |
Total commitments and standby letters of credit | 181,445,000 | 164,378,000 | ' |
Heritage Oaks Bank | Standby letters of credit | ' | ' | ' |
Outstanding financial commitments whose contractual amount represents credit risk | ' | ' | ' |
Total commitments and standby letters of credit | $17,036,000 | $14,054,000 | ' |
Regulatory_Matters_Details
Regulatory Matters (Details) (USD $) | 0 Months Ended | 12 Months Ended | 0 Months Ended | 13 Months Ended | ||||
Mar. 04, 2010 | Dec. 31, 2013 | Dec. 31, 2012 | Mar. 04, 2010 | Apr. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | |
Heritage Oaks Bank | Heritage Oaks Bank | Heritage Oaks Bank | Heritage Oaks Bank | Heritage Oaks Bank | ||||
Minimum | ||||||||
Company's and the Bank's actual regulatory capital amounts and ratios | ' | ' | ' | ' | ' | ' | ' | ' |
Gross proceeds from private placement | $60,000,000 | ' | ' | ' | ' | ' | ' | ' |
Minimum Leverage Ratio (as a percent) | ' | ' | ' | ' | 10.00% | ' | ' | ' |
Period from date of written agreement within which sufficient capital is to be maintained | ' | ' | ' | '60 days | ' | ' | ' | ' |
Total capital to risk-weighted assets: | ' | ' | ' | ' | ' | ' | ' | ' |
Actual, Capital Amount | ' | 130,532,000 | 137,525,000 | ' | ' | 126,000,000 | 133,038,000 | ' |
Actual, Ratio (as a percent) | ' | 14.17% | 16.81% | ' | ' | 13.68% | 16.28% | 11.50% |
Capital Needed For Adequacy Purposes, Capital Amount | ' | 73,709,000 | 65,454,000 | ' | ' | 73,703,000 | 65,374,000 | ' |
Capital Needed For Adequacy Purposes, Ratio (as a percent) | ' | 8.00% | 8.00% | ' | ' | 8.00% | 8.00% | ' |
Capital Needed To Be Well Capitalized Under Prompt Corrective Action Provisions, Capital Amount | ' | ' | ' | ' | ' | 92,128,000 | 81,718,000 | ' |
Capital Needed To Be Well Capitalized Under Prompt Corrective Action Provisions, Ratio (as a percent) | ' | ' | ' | ' | ' | 10.00% | 10.00% | ' |
Tier I capital to risk-weighted assets: | ' | ' | ' | ' | ' | ' | ' | ' |
Actual, Capital Amount | ' | 118,933,000 | 127,196,000 | ' | ' | 114,402,000 | 122,722,000 | ' |
Actual, Ratio (as a percent) | ' | 12.91% | 15.55% | ' | ' | 12.42% | 15.02% | ' |
Capital Needed For Adequacy Purposes, Capital Amount | ' | 36,855,000 | 32,727,000 | ' | ' | 36,851,000 | 32,687,000 | ' |
Capital Needed For Adequacy Purposes, Ratio (as a percent) | ' | 4.00% | 4.00% | ' | ' | 4.00% | 4.00% | ' |
Capital Needed To Be Well Capitalized Under Prompt Corrective Action Provisions, Capital Amount | ' | ' | ' | ' | ' | 55,277,000 | 49,031,000 | ' |
Capital Needed To Be Well Capitalized Under Prompt Corrective Action Provisions, Ratio (as a percent) | ' | ' | ' | ' | ' | 6.00% | 6.00% | ' |
Tier I capital to average assets: | ' | ' | ' | ' | ' | ' | ' | ' |
Actual, Capital Amount | ' | 118,933,000 | 127,196,000 | ' | ' | 114,402,000 | 122,722,000 | ' |
Actual, Ratio (as a percent) | ' | 10.20% | 12.32% | ' | ' | 9.82% | 11.93% | ' |
Capital Needed For Adequacy Purposes, Capital Amount | ' | 46,649,000 | 41,311,000 | ' | ' | 46,603,000 | 41,145,000 | ' |
Capital Needed For Adequacy Purposes, Ratio (as a percent) | ' | 4.00% | 4.00% | ' | ' | 4.00% | 4.00% | ' |
Capital Needed To Be Well Capitalized Under Prompt Corrective Action Provisions, Capital Amount | ' | ' | ' | ' | ' | 58,254,000 | 51,432,000 | ' |
Capital Needed To Be Well Capitalized Under Prompt Corrective Action Provisions, Ratio (as a percent) | ' | ' | ' | ' | ' | 5.00% | 5.00% | ' |
Amount included or not in Tier I and Total Risk Based capital | ' | ' | ' | ' | ' | ' | ' | ' |
Junior subordinated debt included in Tier I capital | ' | $8,000,000 | $8,000,000 | ' | ' | ' | ' | ' |
Related_Party_Transactions_Det
Related Party Transactions (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Directors and executive officers | ' | ' | ' |
Loans made to directors and executive officers | ' | ' | ' |
Outstanding balance, beginning of year | $19,842,000 | ' | ' |
Additional loans made | 12,668,000 | ' | ' |
Repayments | -12,423,000 | ' | ' |
Outstanding balance, end of year | 20,087,000 | ' | ' |
Payments to affiliated firms: | ' | ' | ' |
Mortgage loans originated and sold for directors and officers | 300,000 | ' | ' |
Firms affiliated with directors | ' | ' | ' |
Payments to affiliated firms: | ' | ' | ' |
Facility rent | 237,000 | 233,000 | 221,000 |
Legal consultation fees | 14,000 | 6,000 | 8,000 |
Fuel for company owned vehicles | ' | 5,000 | 4,000 |
Total payments to affiliated firms | 251,000 | 244,000 | 233,000 |
Bank | ' | ' | ' |
Loans made to directors and executive officers | ' | ' | ' |
Related party deposits | $2,700,000 | $3,700,000 | ' |
Restriction_on_Transfers_of_Fu1
Restriction on Transfers of Funds to Parent (Details) (Bank) | 12 Months Ended |
Dec. 31, 2013 | |
Bank | ' |
Restriction on transfers of funds to parent | ' |
Period of retained net income considered in determining restrictions on the Bank's ability to pay dividends | '2 years |
Federal Reserve's limitation on advances to parent company as a percentage of contributed capital | 20.00% |
Merger_Activity_Details
Merger Activity (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Feb. 28, 2014 |
Mission Community Bancorp | Subsequent Events | |||
item | Mission Community Bancorp | |||
Merger Activity | ' | ' | ' | ' |
Assets | $1,203,651,000 | $1,097,532,000 | $400,000,000 | ' |
Number of banking locations | ' | ' | 5 | ' |
Transaction value | ' | ' | ' | 68,300,000 |
Common stock issued (in shares) | ' | ' | ' | 7,541,353 |
Closing price (in dollars per share) | ' | ' | ' | $7.99 |
Cash paid | ' | ' | ' | $8,000,000 |
Parent_Company_Financial_Infor2
Parent Company Financial Information (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
In Thousands, unless otherwise specified | ||||
Assets | ' | ' | ' | ' |
Total assets | $1,203,651 | $1,097,532 | ' | ' |
Liabilities | ' | ' | ' | ' |
Junior subordinated debentures | 8,248 | 8,248 | ' | ' |
Other liabilities | 6,581 | 6,385 | ' | ' |
Total liabilities | 1,077,224 | 952,003 | ' | ' |
Stockholders' Equity | ' | ' | ' | ' |
Common stock | 101,511 | 101,354 | ' | ' |
Additional paid in capital | 6,020 | 7,337 | ' | ' |
Retained earnings | 18,717 | 8,773 | ' | ' |
Accumulated other comprehensive income | -3,425 | 3,925 | ' | ' |
Total stockholders' equity | 126,427 | 145,529 | 129,554 | 121,256 |
Total liabilities and stockholders' equity | 1,203,651 | 1,097,532 | ' | ' |
Heritage Oaks Bancorp | ' | ' | ' | ' |
Assets | ' | ' | ' | ' |
Cash | 4,726 | 3,615 | ' | ' |
Prepaid and other assets | 1,280 | 1,819 | ' | ' |
Investment in bank | 128,940 | 148,461 | ' | ' |
Total assets | 134,946 | 153,895 | ' | ' |
Liabilities | ' | ' | ' | ' |
Junior subordinated debentures | 8,248 | 8,248 | ' | ' |
Other liabilities | 271 | 118 | ' | ' |
Total liabilities | 8,519 | 8,366 | ' | ' |
Stockholders' Equity | ' | ' | ' | ' |
Preferred stock | 3,604 | 24,140 | ' | ' |
Common stock | 101,511 | 101,354 | ' | ' |
Additional paid in capital | 6,020 | 7,337 | ' | ' |
Retained earnings | 18,717 | 8,773 | ' | ' |
Accumulated other comprehensive income | -3,425 | 3,925 | ' | ' |
Total stockholders' equity | 126,427 | 145,529 | ' | ' |
Total liabilities and stockholders' equity | $134,946 | $153,895 | ' | ' |
Parent_Company_Financial_Infor3
Parent Company Financial Information (Details 2) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Income | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest | $11,736 | $11,509 | $11,075 | $11,073 | $11,649 | $11,519 | $11,401 | $11,752 | $45,393 | $46,321 | $48,227 |
Gain on sale of investment securities | ' | ' | ' | ' | ' | ' | ' | ' | 3,926 | 2,619 | 1,983 |
Expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based compensation | ' | ' | ' | ' | ' | ' | ' | ' | 533 | 331 | 299 |
Interest | ' | ' | ' | ' | ' | ' | ' | ' | 3,867 | 3,818 | 5,023 |
Income tax benefit | ' | ' | ' | ' | ' | ' | ' | ' | 6,997 | -1,798 | 1,828 |
Net income | 1,634 | 2,761 | 2,716 | 3,730 | 3,127 | 6,428 | 1,897 | 1,585 | 10,841 | 13,037 | 7,725 |
Dividends and accretion on preferred stock | ' | 181 | 359 | 358 | 357 | 357 | 375 | 381 | 898 | 1,470 | 1,358 |
Net income available to common shareholders | 1,634 | 2,580 | 2,357 | 3,372 | 2,770 | 6,071 | 1,522 | 1,204 | 9,943 | 11,567 | 6,367 |
Heritage Oaks Bancorp | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Income | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Equity in undisbursed income of subsidiaries | ' | ' | ' | ' | ' | ' | ' | ' | 11,944 | 13,003 | 7,868 |
Interest | ' | ' | ' | ' | ' | ' | ' | ' | 19 | 25 | 19 |
Gain on sale of investment securities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 254 |
Total income | ' | ' | ' | ' | ' | ' | ' | ' | 11,963 | 13,028 | 8,141 |
Expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based compensation | ' | ' | ' | ' | ' | ' | ' | ' | 133 | 114 | 58 |
Other professional fees and outside services | ' | ' | ' | ' | ' | ' | ' | ' | 1,169 | 498 | 289 |
Interest | ' | ' | ' | ' | ' | ' | ' | ' | 167 | 192 | 169 |
Total expense | ' | ' | ' | ' | ' | ' | ' | ' | 1,469 | 804 | 516 |
Total operating income | ' | ' | ' | ' | ' | ' | ' | ' | 10,494 | 12,224 | 7,625 |
Income tax benefit | ' | ' | ' | ' | ' | ' | ' | ' | -347 | -813 | -100 |
Net income | ' | ' | ' | ' | ' | ' | ' | ' | 10,841 | 13,037 | 7,725 |
Dividends and accretion on preferred stock | ' | ' | ' | ' | ' | ' | ' | ' | 898 | 1,470 | 1,358 |
Net income available to common shareholders | ' | ' | ' | ' | ' | ' | ' | ' | $9,943 | $11,567 | $6,367 |
Parent_Company_Financial_Infor4
Parent Company Financial Information (Details 3) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Condensed Statements of Other Comprehensive Income | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income | $1,634 | $2,761 | $2,716 | $3,730 | $3,127 | $6,428 | $1,897 | $1,585 | $10,841 | $13,037 | $7,725 |
Other comprehensive income: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unrealized security holding (losses) / gains | ' | ' | ' | ' | ' | ' | ' | ' | -8,565 | 8,544 | 4,634 |
Reclassification for net gains on investments included in earnings | ' | ' | ' | ' | ' | ' | ' | ' | -3,926 | -2,619 | -1,983 |
Other comprehensive (loss) / income, before income tax (benefit) / expense | ' | ' | ' | ' | ' | ' | ' | ' | -12,491 | 5,925 | 2,651 |
Income tax (benefit) / expense related to items of other comprehensive income | ' | ' | ' | ' | ' | ' | ' | ' | -5,141 | 2,438 | 1,092 |
Other comprehensive (loss) / income | ' | ' | ' | ' | ' | ' | ' | ' | -7,350 | 3,487 | 1,559 |
Comprehensive income | ' | ' | ' | ' | ' | ' | ' | ' | 3,491 | 16,524 | 9,284 |
Heritage Oaks Bancorp | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Condensed Statements of Other Comprehensive Income | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income | ' | ' | ' | ' | ' | ' | ' | ' | 10,841 | 13,037 | 7,725 |
Other comprehensive income: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unrealized security holding (losses) / gains | ' | ' | ' | ' | ' | ' | ' | ' | -8,565 | 8,544 | 4,634 |
Reclassification for net gains on investments included in earnings | ' | ' | ' | ' | ' | ' | ' | ' | -694 | -2,619 | -1,983 |
Other comprehensive (loss) / income, before income tax (benefit) / expense | ' | ' | ' | ' | ' | ' | ' | ' | -9,259 | 5,925 | 2,651 |
Income tax (benefit) / expense related to items of other comprehensive income | ' | ' | ' | ' | ' | ' | ' | ' | -1,909 | 2,438 | 1,092 |
Other comprehensive (loss) / income | ' | ' | ' | ' | ' | ' | ' | ' | -7,350 | 3,487 | 1,559 |
Comprehensive income | ' | ' | ' | ' | ' | ' | ' | ' | $3,491 | $16,524 | $9,284 |
Parent_Company_Financial_Infor5
Parent Company Financial Information (Details 4) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Cash flows from operating activities: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income | $1,634 | $2,761 | $2,716 | $3,730 | $3,127 | $6,428 | $1,897 | $1,585 | $10,841 | $13,037 | $7,725 |
Adjustments to reconcile net income to net cash provided by/(used in) operating activities: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Increase in other assets | ' | ' | ' | ' | ' | ' | ' | ' | 940 | -1,304 | -3,007 |
Increase / (decrease) in other liabilities | ' | ' | ' | ' | ' | ' | ' | ' | 196 | -3,324 | 1,026 |
Share-based compensation expense | ' | ' | ' | ' | ' | ' | ' | ' | 533 | 331 | 299 |
Net cash provided by operating activities | ' | ' | ' | ' | ' | ' | ' | ' | 39,701 | 11,688 | 26,622 |
Cash flows from investing activities: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sale of securities | ' | ' | ' | ' | ' | ' | ' | ' | 161,181 | 140,163 | 147,194 |
Net cash used in investing activities | ' | ' | ' | ' | ' | ' | ' | ' | -149,459 | -82,719 | -9,183 |
Cash flows from financing activities: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Preferred stock dividends paid | ' | ' | ' | ' | ' | ' | ' | ' | -708 | -3,013 | ' |
Retirement of Series A preferred stock and related warrants | ' | ' | ' | ' | ' | ' | ' | ' | -22,575 | ' | ' |
Proceeds from the exercise of options | ' | ' | ' | ' | ' | ' | ' | ' | 138 | 183 | ' |
Net cash provided by / (used in) financing activities | ' | ' | ' | ' | ' | ' | ' | ' | 101,880 | 70,255 | -5,498 |
Net (decrease) / increase in cash and cash equivalents | ' | ' | ' | ' | ' | ' | ' | ' | -7,878 | -776 | 11,941 |
Cash and cash equivalents, beginning of year | ' | ' | ' | 34,116 | ' | ' | ' | 34,892 | 34,116 | 34,892 | 22,951 |
Cash and cash equivalents, end of year | 26,238 | ' | ' | ' | 34,116 | ' | ' | ' | 26,238 | 34,116 | 34,892 |
Heritage Oaks Bancorp | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash flows from operating activities: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income | ' | ' | ' | ' | ' | ' | ' | ' | 10,841 | 13,037 | 7,725 |
Adjustments to reconcile net income to net cash provided by/(used in) operating activities: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Increase in other assets | ' | ' | ' | ' | ' | ' | ' | ' | -236 | -448 | -82 |
Increase / (decrease) in other liabilities | ' | ' | ' | ' | ' | ' | ' | ' | 153 | -208 | 195 |
Gain on sale of assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -253 |
Share-based compensation expense | ' | ' | ' | ' | ' | ' | ' | ' | 133 | 114 | 58 |
Undistributed loss / (income) of subsidiaries | ' | ' | ' | ' | ' | ' | ' | ' | 13,365 | -9,486 | -7,868 |
Net cash provided by operating activities | ' | ' | ' | ' | ' | ' | ' | ' | 24,256 | 3,009 | -225 |
Cash flows from investing activities: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sale of securities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 253 |
Other | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -775 |
Net cash used in investing activities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -522 |
Cash flows from financing activities: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Preferred stock dividends paid | ' | ' | ' | ' | ' | ' | ' | ' | -708 | -3,013 | ' |
Retirement of Series A preferred stock and related warrants | ' | ' | ' | ' | ' | ' | ' | ' | -22,575 | ' | ' |
Proceeds from the exercise of options | ' | ' | ' | ' | ' | ' | ' | ' | 138 | 183 | ' |
Net cash provided by / (used in) financing activities | ' | ' | ' | ' | ' | ' | ' | ' | -23,145 | -2,830 | ' |
Net (decrease) / increase in cash and cash equivalents | ' | ' | ' | ' | ' | ' | ' | ' | 1,111 | 179 | -747 |
Cash and cash equivalents, beginning of year | ' | ' | ' | 3,615 | ' | ' | ' | 3,436 | 3,615 | 3,436 | 4,183 |
Cash and cash equivalents, end of year | $4,726 | ' | ' | ' | $3,615 | ' | ' | ' | $4,726 | $3,615 | $3,436 |
Quarterly_Financial_Informatio2
Quarterly Financial Information (unaudited) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | |
Quarterly Financial Information (unaudited) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest income | $11,736,000 | $11,509,000 | $11,075,000 | $11,073,000 | $11,649,000 | $11,519,000 | $11,401,000 | $11,752,000 | ' | $45,393,000 | $46,321,000 | $48,227,000 | ' |
Net interest income | 10,687,000 | 10,482,000 | 10,149,000 | 10,208,000 | 10,763,000 | 10,585,000 | 10,406,000 | 10,749,000 | ' | 41,526,000 | 42,503,000 | 43,204,000 | ' |
Provision for credit losses | ' | ' | ' | ' | ' | 1,286,000 | 3,064,000 | 3,331,000 | ' | ' | 7,681,000 | 6,063,000 | ' |
Non-interest income | 1,879,000 | 2,423,000 | 2,912,000 | 5,661,000 | 3,548,000 | 2,984,000 | 3,494,000 | 2,522,000 | ' | 12,875,000 | 12,548,000 | 9,730,000 | ' |
Non-interest expense | 9,624,000 | 8,551,000 | 8,640,000 | 9,748,000 | 9,474,000 | 8,795,000 | 9,133,000 | 8,729,000 | ' | 36,563,000 | 36,131,000 | 37,318,000 | ' |
Income before provision for income taxes | 2,942,000 | 4,354,000 | 4,421,000 | 6,121,000 | 4,837,000 | 3,488,000 | 1,703,000 | 1,211,000 | ' | 17,838,000 | 11,239,000 | 9,553,000 | ' |
Net income | 1,634,000 | 2,761,000 | 2,716,000 | 3,730,000 | 3,127,000 | 6,428,000 | 1,897,000 | 1,585,000 | ' | 10,841,000 | 13,037,000 | 7,725,000 | ' |
Dividends and accretion on preferred stock | ' | 181,000 | 359,000 | 358,000 | 357,000 | 357,000 | 375,000 | 381,000 | ' | 898,000 | 1,470,000 | 1,358,000 | ' |
Net income available to common shareholders | 1,634,000 | 2,580,000 | 2,357,000 | 3,372,000 | 2,770,000 | 6,071,000 | 1,522,000 | 1,204,000 | ' | 9,943,000 | 11,567,000 | 6,367,000 | ' |
Earnings per common share | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Basic (in dollars per share) | $0.06 | $0.10 | $0.09 | $0.13 | $0.11 | $0.24 | $0.06 | $0.05 | ' | $0.40 | $0.46 | $0.25 | ' |
Diluted (in dollars per share) | $0.06 | $0.10 | $0.09 | $0.13 | $0.10 | $0.23 | $0.06 | $0.05 | ' | $0.37 | $0.44 | $0.24 | ' |
Reversal of the deferred tax asset valuation allowance | ' | ' | ' | ' | ' | -4,100,000 | -700,000 | -800,000 | -1,500,000 | ' | -5,600,000 | ' | 7,100,000 |
Results impacted by costs related to recently announced merger with Mission Community Bancorp | $1,100,000 | ' | ' | ' | ' | ' | ' | ' | ' | $1,051,000 | ' | ' | ' |