Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Nov. 14, 2013 | |
Document And Entity Information | ' | ' |
Entity Registrant Name | 'PSB HOLDINGS INC /WI/ | ' |
Entity Central Index Key | '0000948368 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-13 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Is Entity a Well-known Seasoned Issuer? | 'No | ' |
Is Entity a Voluntary Filer? | 'No | ' |
Is Entity's Reporting Status Current? | 'Yes | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 1,651,518 |
Document Fiscal Period Focus | 'Q3 | ' |
Document Fiscal Year Focus | '2013 | ' |
Consolidated_Balance_Sheets_Un
Consolidated Balance Sheets (Unaudited) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Assets | ' | ' |
Cash and due from banks | $15,283 | $20,332 |
Interest-bearing deposits and money market funds | 881 | 1,431 |
Federal funds sold | 916 | 27,084 |
Cash and cash equivalents | 17,080 | 48,847 |
Securities available for sale (at fair value) | 61,280 | 75,387 |
Securities held to maturity (fair value of $71,914 and $72,364, respectively) | 71,772 | 69,822 |
Bank certificates of deposit | 2,481 | 4,465 |
Loans held for sale | 824 | 884 |
Loans receivable, net | 516,873 | 477,991 |
Accrued interest receivable | 2,257 | 2,157 |
Foreclosed assets | 1,606 | 1,774 |
Premises and equipment, net | 9,699 | 10,240 |
Mortgage servicing rights, net | 1,662 | 1,233 |
Federal Home Loan Bank stock (at cost) | 3,594 | 2,506 |
Cash surrender value of bank-owned life insurance | 12,723 | 11,813 |
Other assets | 4,047 | 4,847 |
TOTAL ASSETS | 705,898 | 711,966 |
Liabilities and Stockholders' Equity | ' | ' |
Non-interest-bearing deposits | 92,141 | 89,819 |
Interest-bearing deposits | 462,098 | 475,623 |
Total deposits | 554,239 | 565,442 |
Federal Home Loan Bank advances | 58,124 | 50,124 |
Other borrowings | 20,353 | 20,728 |
Senior subordinated notes | 4,000 | 7,000 |
Junior subordinated debentures | 7,732 | 7,732 |
Accrued expenses and other liabilities | 5,438 | 6,493 |
Total liabilities | 649,886 | 657,519 |
Stockholders' equity | ' | ' |
Preferred stock - no par value: Authorized - 30,000 shares; no shares issued or outstanding | ' | ' |
Common stock - no par value with a stated value of $1 per share: Authorized - 6,000,000 shares; Issued - 1,830,266 shares; Outstanding - 1,651,518 and 1,653,472 shares, respectively | 1,830 | 1,830 |
Additional paid-in capital | 6,930 | 7,020 |
Retained earnings | 51,516 | 48,977 |
Accumulated other comprehensive income, net of tax | 561 | 1,394 |
Treasury stock, at cost - 178,748 and 176,794 shares, respectively | -4,825 | -4,774 |
Total stockholders' equity | 56,012 | 54,447 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $705,898 | $711,966 |
Consolidated_Balance_Sheets_Un1
Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, except Share data, unless otherwise specified | ||
Statement of Financial Position [Abstract] | ' | ' |
Securities held to maturity, fair value | $71,914 | $72,364 |
Preferred stock, shares authorized | 30,000 | 30,000 |
Common stock, stated par value | $1 | $1 |
Common Stock, shares authorized | 6,000,000 | 3,000,000 |
Common Stock, shares issued | 1,830,266 | 1,830,266 |
Common Stock, shares outstanding | 1,651,518 | 1,653,472 |
Treasury stock, shares, at cost | 178,748 | 176,794 |
Consolidated_Statements_of_Inc
Consolidated Statements of Income (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Interest and dividend income: | ' | ' | ' | ' |
Loans, including fees | $5,865 | $5,965 | $17,333 | $17,591 |
Securities: | ' | ' | ' | ' |
Taxable | 509 | 578 | 1,566 | 1,725 |
Tax-exempt | 383 | 372 | 1,133 | 934 |
Other interest and dividends | 15 | 18 | 56 | 57 |
Total interest and dividend income | 6,772 | 6,933 | 20,088 | 20,307 |
Interest expense: | ' | ' | ' | ' |
Deposits | 738 | 1,037 | 2,279 | 3,259 |
FHLB advances | 323 | 356 | 977 | 1,061 |
Other borrowings | 165 | 150 | 490 | 447 |
Senior subordinated notes | 38 | 141 | 147 | 425 |
Junior subordinated debentures | 86 | 86 | 255 | 256 |
Total interest expense | 1,350 | 1,770 | 4,148 | 5,448 |
Net interest income | 5,422 | 5,163 | 15,940 | 14,859 |
Provision for loan losses | 3,340 | ' | 4,015 | 325 |
Net interest income after provision for loan losses | 2,082 | 5,163 | 11,925 | 14,534 |
Noninterest income: | ' | ' | ' | ' |
Service fees | 422 | 424 | 1,170 | 1,239 |
Mortgage banking | 384 | 462 | 1,338 | 1,213 |
Investment and insurance sales commissions | 204 | 186 | 695 | 562 |
Net gain on sale of securities | ' | ' | 12 | ' |
Increase in cash surrender value of life insurance | 102 | 102 | 300 | 304 |
Gain on bargain purchase | ' | ' | ' | 851 |
Other noninterest income | 299 | 270 | 834 | 840 |
Total noninterest income | 1,411 | 1,444 | 4,349 | 5,009 |
Noninterest expense: | ' | ' | ' | ' |
Salaries and employee benefits | 2,031 | 2,329 | 6,609 | 6,709 |
Occupancy and facilities | 408 | 408 | 1,324 | 1,210 |
Loss on foreclosed assets | 144 | 330 | 294 | 567 |
Data processing and other office operations | 449 | 892 | 1,403 | 1,724 |
Advertising and promotion | 80 | 71 | 234 | 235 |
FDIC insurance premiums | 100 | 123 | 311 | 335 |
Other noninterest expenses | 605 | 707 | 1,940 | 2,263 |
Total noninterest expense | 3,817 | 4,860 | 12,115 | 13,043 |
Income (loss) before provision for income taxes | -324 | 1,747 | 4,159 | 6,500 |
Provision (credit) for income taxes | -337 | 521 | 976 | 2,176 |
Net income | $13 | $1,226 | $3,183 | $4,324 |
Basic earnings per share | $0.01 | $0.74 | $1.93 | $2.60 |
Diluted earnings per share | $0.01 | $0.74 | $1.93 | $2.60 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (Loss) (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Mar. 31, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Statement of Comprehensive Income [Abstract] | ' | ' | ' | ' | ' |
Net income | $13 | ' | $1,226 | $3,183 | $4,324 |
Other comprehensive income, net of tax: | ' | ' | ' | ' | ' |
Unrealized gain (loss) on securities available for sale | -265 | ' | 14 | -780 | -60 |
Reclassification adjustment for security gain, included in net income | ' | -7 | ' | -7 | ' |
Accretion (amortization) of unrealized gain on securities available for sale transferred to securities held to maturity included in net income | 16 | ' | -66 | -175 | -210 |
Unrealized gain (loss) on interest rate swap | -39 | ' | -64 | 45 | -177 |
Reclassification adjustment of interest rate swap settlements included in earnings | 28 | ' | 26 | 84 | 77 |
Comprehensive income (loss) | ($247) | ' | $1,136 | $2,350 | $3,954 |
Consolidated_Statements_of_Cha
Consolidated Statements of Changes in Stockholders' Equity (Unaudited) (USD $) | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Total |
In Thousands | ||||||
Balance beginning at Dec. 31, 2012 | $1,830 | $7,020 | $48,977 | $1,394 | ($4,774) | $54,447 |
Net income | ' | ' | 3,183 | ' | ' | 3,183 |
Unrealized loss on securities available for sale, net of tax | ' | ' | ' | -780 | ' | -780 |
Reclassification adjustment for security gain included in net income | ' | ' | ' | -7 | ' | -7 |
Amortization of unrealized gain on securities available for sale transferred to securities held to maturity included in net income | ' | ' | ' | -175 | ' | -175 |
Unrealized gain on interest rate swap, net of tax | ' | ' | ' | 45 | ' | 45 |
Reclassification of interest rate swap settlements included in earnings, net of tax | ' | ' | ' | 84 | ' | 84 |
Total comprehensive income | ' | ' | ' | ' | ' | 2,350 |
Purchase of treasury stock | ' | ' | ' | ' | -269 | -269 |
Issuance of new restricted stock grants | ' | -218 | ' | ' | 218 | ' |
Vesting of restricted stock grants | ' | 128 | ' | ' | ' | 128 |
Cash dividends declared | ' | ' | -631 | ' | ' | -631 |
Cash dividends declared on unvested restricted stock grants | ' | ' | -13 | ' | ' | -13 |
Balance ending at Sep. 30, 2013 | $1,830 | $6,930 | $51,516 | $561 | ($4,825) | $56,012 |
Consolidated_Statements_of_Cha1
Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) (USD $) | Sep. 30, 2013 |
Statement of Stockholders' Equity [Abstract] | ' |
Cash dividends declared, per share | $0.39 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (Unaudited) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Cash flows from operating activities: | ' | ' |
Net income | $3,183 | $4,324 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Provision for depreciation and net amortization | 1,956 | 1,976 |
Provision for loan losses | 4,015 | 325 |
Deferred net loan origination costs | -387 | -321 |
Gain on sale of loans | -1,152 | -1,384 |
Provision for (recapture of) servicing right valuation allowance | -240 | 250 |
Loss on sale of foreclosed assets | 210 | 438 |
Gain on sale of securities | -12 | ' |
Increase in cash surrender value of life insurance | -300 | -304 |
Gain on bargain purchase | ' | -851 |
Changes in operating assets and liabilities: | ' | ' |
Accrued interest receivable | -100 | -35 |
Other assets | 1,285 | 315 |
Other liabilities | -841 | -7 |
Net cash provided by operating activities | 7,617 | 4,726 |
Proceeds from sale and maturities of: | ' | ' |
Securities available for sale | 39,084 | 35,841 |
Securities held to maturity | 4,397 | 9,203 |
Payment for purchase of: | ' | ' |
Securities available for sale | -26,909 | -20,839 |
Securities held to maturity | -6,668 | -8,860 |
Cash acquired on purchase of Marathon State Bank | ' | 14,950 |
Proceeds from maturity of other investments | 1,984 | ' |
Redemption (purchase) of FHLB stock | -1,088 | 489 |
Net increase in loans | -42,649 | -4,245 |
Capital expenditures | -191 | -437 |
Proceeds from sale of foreclosed assets | 698 | 580 |
Purchase of bank-owned life insurance | -610 | ' |
Net cash provided by (used in) investing activities | -31,952 | 26,682 |
Cash flows from financing activities: | ' | ' |
Net increase (decrease) in non-interest-bearing deposits | 2,322 | -20,520 |
Net decrease in interest-bearing deposits | -13,466 | -13,908 |
Net increase in FHLB advances | 8,000 | ' |
Net decrease in other borrowings | -375 | -418 |
Repayment of senior subordinated notes | -3,000 | ' |
Dividends declared | -644 | -615 |
Proceeds from exercise of stock options | ' | 9 |
Purchase of treasury stock | -269 | -5 |
Net cash used in financing activities | -7,432 | -35,457 |
Net decrease in cash and cash equivalents | -31,767 | -4,049 |
Cash and cash equivalents at beginning | 48,847 | 38,205 |
Cash and cash equivalents at end | 17,080 | 34,156 |
Cash paid during the period for: | ' | ' |
Interest | 4,304 | 5,470 |
Income taxes | 694 | 1,756 |
Noncash investing and financing activities: | ' | ' |
Loans charged off | 4,366 | 852 |
Loans transferred to foreclosed assets | 947 | 568 |
Loans originated on sale of foreclosed assets | 207 | 140 |
Issuance of unvested restricted stock grants at fair value | 210 | 200 |
Vesting of restricted stock grants | $128 | $90 |
GENERAL
GENERAL | 9 Months Ended |
Sep. 30, 2013 | |
General | ' |
GENERAL | ' |
NOTE 1 – GENERAL | |
In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly PSB Holdings, Inc.’s (“PSB”) financial position, results of its operations, and cash flows for the periods presented, and all such adjustments are of a normal recurring nature. The consolidated financial statements include the accounts of all subsidiaries. All material intercompany transactions and balances are eliminated. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. Any reference to “PSB” refers to the consolidated or individual operations of PSB Holdings, Inc. and its subsidiary Peoples State Bank. Dollar amounts are in thousands, except per share amounts. | |
These interim consolidated financial statements have been prepared according to the rules and regulations of the Securities and Exchange Commission and, therefore, certain information and footnote disclosures normally presented in accordance with generally accepted accounting principles have been omitted or abbreviated. The information contained in the consolidated financial statements and footnotes in PSB’s Annual Report on Form 10-K for the year ended December 31, 2012 should be referred to in connection with the reading of these unaudited interim financial statements. | |
In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and revenues and expenses for the period. Actual results could differ significantly from those estimates. Estimates that are susceptible to significant change include the determination of the allowance for loan losses, mortgage servicing right assets, and the valuation of investment securities. |
PSB_HOLDINGS_INC_ACQUISITION_O
PSB HOLDINGS, INC. ACQUISITION OF MARATHON STATE BANK | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Psb Holdings Inc. Acquisition Of Marathon State Bank | ' | ||||||||||||||||
PSB HOLDINGS, INC. ACQUISITION OF MARATHON STATE BANK | ' | ||||||||||||||||
NOTE 2 – PSB HOLDINGS, INC. ACQUISITION OF MARATHON STATE BANK | |||||||||||||||||
On June 14, 2012, PSB completed its purchase of Marathon State Bank, a privately owned bank with $107 million in total assets located in the Village of Marathon City, Wisconsin (“Marathon”). Under the terms of the agreement, PSB paid $5,505 in cash, which was equal to 100% of Marathon’s tangible net book value following a special dividend by Marathon to its shareholders to reduce its book equity ratio to 6% of total assets. The following table outlines the fair value of Marathon assets and liabilities acquired including determination of the gain on bargain purchase using an accounting date of June 1, 2012. A core deposit intangible was not recorded on the purchase as the fair value calculation determined it was insignificant. | |||||||||||||||||
Cash purchase price | $ | 5,505 | |||||||||||||||
Fair value of assets acquired: | |||||||||||||||||
Cash and due from banks | 20,392 | ||||||||||||||||
Securities available for sale | 50,547 | ||||||||||||||||
Loans receivable | 23,760 | ||||||||||||||||
Short-term commercial paper and bankers’ acceptances | 11,713 | ||||||||||||||||
Foreclosed assets | — | ||||||||||||||||
Premises and equipment | 402 | ||||||||||||||||
Core deposit intangible | — | ||||||||||||||||
Accrued interest receivable and other assets | 550 | ||||||||||||||||
Total fair value of assets acquired | 107,364 | ||||||||||||||||
Fair value of liabilities assumed: | |||||||||||||||||
Non-interest bearing deposits | 23,255 | ||||||||||||||||
Interest-bearing deposits | 77,611 | ||||||||||||||||
Accrued interest payable and other liabilities | 142 | ||||||||||||||||
Total fair value of liabilities assumed | 101,008 | ||||||||||||||||
Fair value of net assets acquired | 6,356 | ||||||||||||||||
Gain on bargain purchase | $ | 851 | |||||||||||||||
PSB recorded a total credit mark down of $490 on Marathon’s loan portfolio on the purchase date, or 2.05% of gross purchased loan principal. Purchased impaired loan principal totaled $310 on which a $21 credit write-down was recorded. Due to the insignificant amount of total purchased impaired loans, the entire $490 credit mark down will be accreted to income as a yield adjustment based on contractual cash flows over the remaining life of the purchased loans. | |||||||||||||||||
Results of operations of the quarterly and year to date periods ended September 30, 2013: | |||||||||||||||||
Quarter ended September 30, 2013 | |||||||||||||||||
Net interest | Noninterest | Net | Earnings | ||||||||||||||
($000s) | income | income | income | per share | |||||||||||||
PSB Holdings, Inc. | $ | 5,422 | $ | 1,411 | $ | 13 | $ | 0.01 | |||||||||
Pro forma Totals | $ | 5,422 | $ | 1,411 | $ | 13 | $ | 0.01 | |||||||||
Nine months ended September 30, 2013 | |||||||||||||||||
Net interest | Noninterest | Net | Earnings | ||||||||||||||
($000s) | income | income | income | per share | |||||||||||||
PSB Holdings, Inc. | $ | 15,940 | $ | 4,349 | $ | 3,183 | $ | 1.93 | |||||||||
Pro forma Totals | $ | 15,940 | $ | 4,349 | $ | 3,183 | $ | 1.93 | |||||||||
Pro forma combined results of operations as if combination occurred at the beginning of the quarterly and year to date periods ended September 30, 2012: | |||||||||||||||||
Quarter ended September 30, 2012 (pro forma combined at beginning of period) | |||||||||||||||||
Net interest | Noninterest | Net | Earnings | ||||||||||||||
($000s) | income | income | income | per share | |||||||||||||
PSB Holdings, Inc. | $ | 4,813 | $ | 1,436 | $ | 1,358 | $ | 0.82 | |||||||||
Marathon State Bank | 350 | 8 | (132 | ) | (0.08 | ) | |||||||||||
Pro forma Totals | $ | 5,163 | $ | 1,444 | $ | 1,226 | $ | 0.74 | |||||||||
Nine months ended September 30, 2012 (pro forma combined at beginning of period) | |||||||||||||||||
Net interest | Noninterest | Net | Earnings | ||||||||||||||
($000s) | income | income | income | per share | |||||||||||||
PSB Holdings, Inc. | $ | 14,376 | $ | 4,147 | $ | 3,902 | $ | 2.35 | |||||||||
Marathon State Bank | 1,158 | 880 | 468 | 0.28 | |||||||||||||
Pro forma Totals | $ | 15,534 | $ | 5,027 | $ | 4,370 | $ | 2.63 |
SECURITIES
SECURITIES | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Securities | ' | ||||||||||||||||
SECURITIES | ' | ||||||||||||||||
NOTE 3 – SECURITIES | |||||||||||||||||
The amortized cost and estimated fair value of investment securities are as follows: | |||||||||||||||||
Gross | Gross | Estimated | |||||||||||||||
Amortized | Unrealized | Unrealized | Fair | ||||||||||||||
30-Sep-13 | Cost | Gains | Losses | Value | |||||||||||||
Securities available for sale | |||||||||||||||||
U.S. Treasury securities and obligations of U.S. government corporations and agencies | $ | 1,003 | — | $ | 9 | $ | 994 | ||||||||||
U.S. agency issued residential mortgage-backed securities | 20,084 | 541 | 394 | 20,231 | |||||||||||||
U.S. agency issued residential collateralized mortgage obligations | 38,785 | 575 | 416 | 38,944 | |||||||||||||
Privately issued residential collateralized mortgage obligations | 111 | 3 | — | 114 | |||||||||||||
Nonrated SBA loan fund | 950 | — | — | 950 | |||||||||||||
Other equity securities | 47 | — | — | 47 | |||||||||||||
Totals | $ | 60,980 | $ | 1,119 | $ | 819 | $ | 61,280 | |||||||||
Securities held to maturity | |||||||||||||||||
Obligations of states and political subdivisions | $ | 69,851 | $ | 1,077 | $ | 811 | $ | 70,117 | |||||||||
Nonrated trust preferred securities | 1,520 | 33 | 163 | 1,390 | |||||||||||||
Nonrated senior subordinated notes | 401 | 6 | — | 407 | |||||||||||||
Totals | $ | 71,772 | $ | 1,116 | $ | 974 | $ | 71,914 | |||||||||
Gross | Gross | Estimated | |||||||||||||||
Amortized | Unrealized | Unrealized | Fair | ||||||||||||||
31-Dec-12 | Cost | Gains | Losses | Value | |||||||||||||
Securities available for sale | |||||||||||||||||
U.S. Treasury securities and obligations of U.S. government corporations and agencies | $ | 9,998 | $ | 29 | $ | — | $ | 10,027 | |||||||||
U.S. agency issued residential mortgage-backed securities | 13,550 | 847 | — | 14,397 | |||||||||||||
U.S. agency issued residential collateralized mortgage obligations | 44,544 | 749 | 50 | 45,243 | |||||||||||||
Privately issued residential collateralized mortgage obligations | 168 | 5 | — | 173 | |||||||||||||
Obligations of states and political subdivisions | — | — | — | — | |||||||||||||
Nonrated commercial paper | 5,500 | — | — | 5,500 | |||||||||||||
Other equity securities | 47 | — | — | 47 | |||||||||||||
Totals | $ | 73,807 | $ | 1,630 | $ | 50 | $ | 75,387 | |||||||||
Securities held to maturity | |||||||||||||||||
Obligations of states and political subdivisions | $ | 67,915 | $ | 2,581 | $ | 41 | $ | 70,455 | |||||||||
Nonrated trust preferred securities | 1,505 | 60 | 66 | 1,499 | |||||||||||||
Nonrated senior subordinated notes | 402 | 8 | — | 410 | |||||||||||||
Totals | $ | 69,822 | $ | 2,649 | $ | 107 | $ | 72,364 | |||||||||
Securities with a fair value of $51,208 and $44,914 at September 30, 2013 and December 31, 2012, respectively, were pledged to secure public deposits, other borrowings, and for other purposes required by law. | |||||||||||||||||
During the quarter ended March 31, 2013, PSB realized a net gain of $12 ($7 after tax expense) from proceeds totaling $986 on the sale of securities available for sale. There was no other sale of securities during 2013 or during the nine months ended September 30, 2012. | |||||||||||||||||
LOANS_RECEIVABLE_AND_ALLOWANCE
LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES | 9 Months Ended | ||||||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||||||
Loans Receivable And Allowance For Loan Losses | ' | ||||||||||||||||||||||||||||
LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES | ' | ||||||||||||||||||||||||||||
NOTE 4 – LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES | |||||||||||||||||||||||||||||
Loans | |||||||||||||||||||||||||||||
Loans that management has the intent to hold for the foreseeable future or until maturity or pay-off are generally reported at their outstanding unpaid principal balances adjusted for charge-offs, the allowance for loan losses, and any deferred fees or costs on originated loans. Interest on loans is credited to income as earned. Interest income is not accrued on loans where management has determined collection of such interest is doubtful or those loans which are past due 90 days or more as to principal or interest payments. When a loan is placed on nonaccrual status, previously accrued but unpaid interest deemed uncollectible is reversed and charged against current income. After being placed on nonaccrual status, additional income is recorded only to the extent that payments are received and the collection of principal becomes reasonably assured. Interest income recognition on loans considered to be impaired is consistent with the recognition on all other loans. Loan origination fees and certain direct loan origination costs are deferred and recognized as an adjustment of the related loan yield using the interest method. | |||||||||||||||||||||||||||||
Allowance for Loan Losses | |||||||||||||||||||||||||||||
The allowance for loan losses is established through a provision for loan losses charged to expense. Loans are charged against the allowance for loan losses when management believes the collectability of the principal is unlikely. | |||||||||||||||||||||||||||||
Management maintains the allowance for loan losses at a level to cover probable credit losses relating to specifically identified loans, as well as probable credit losses inherent in the balance of the loan portfolio. In accordance with current accounting standards, the allowance is provided for losses that have been incurred based on events that have occurred as of the balance sheet date. The allowance is based on past events and current economic conditions and does not include the effects of expected losses on specific loans or groups of loans that are related to future events or expected changes in economic conditions. While management uses the best information available to make its evaluation, future adjustments to the allowance may be necessary if there are significant changes in economic conditions. | |||||||||||||||||||||||||||||
The allowance for loan losses includes specific allowances related to loans which have been judged to be impaired. A loan is impaired when, based on current information, it is probable that PSB will not collect all amounts due in accordance with the contractual terms of the loan agreement. Management has determined that impaired loans include nonaccrual loans, loans identified as restructurings of troubled debt, and loans accruing interest with elevated risk of default in the near term based on a variety of credit factors. Specific allowances on impaired loans are based on discounted cash flows of expected future payments using the loan’s initial effective interest rate or the fair value of the collateral if the loan is collateral dependent. | |||||||||||||||||||||||||||||
In addition, various regulatory agencies periodically review the allowance for loan losses. These agencies may require PSB to make additions to the allowance for loan losses based on their judgments of collectability resulting from information available to them at the time of their examination. | |||||||||||||||||||||||||||||
The composition of loans categorized by the type of the loan, is as follows: | |||||||||||||||||||||||||||||
30-Sep-13 | 31-Dec-12 | ||||||||||||||||||||||||||||
Commercial, industrial, and municipal | $ | 143,396 | $ | 132,633 | |||||||||||||||||||||||||
Commercial real estate mortgage | 208,544 | 183,818 | |||||||||||||||||||||||||||
Commercial construction and development | 13,592 | 28,482 | |||||||||||||||||||||||||||
Residential real estate mortgage | 124,469 | 105,579 | |||||||||||||||||||||||||||
Residential construction and development | 15,033 | 15,247 | |||||||||||||||||||||||||||
Residential real estate home equity | 20,346 | 21,756 | |||||||||||||||||||||||||||
Consumer and individual | 4,312 | 4,715 | |||||||||||||||||||||||||||
Subtotals – Gross loans | 529,692 | 492,230 | |||||||||||||||||||||||||||
Loans in process of disbursement | (5,993 | ) | (7,039 | ) | |||||||||||||||||||||||||
Subtotals – Disbursed loans | 523,699 | 485,191 | |||||||||||||||||||||||||||
Net deferred loan costs | 300 | 231 | |||||||||||||||||||||||||||
Allowance for loan losses | (7,126 | ) | (7,431 | ) | |||||||||||||||||||||||||
Net loans receivable | $ | 516,873 | $ | 477,991 | |||||||||||||||||||||||||
The following is a summary of information pertaining to impaired loans at period-end: | |||||||||||||||||||||||||||||
30-Sep-13 | 31-Dec-12 | ||||||||||||||||||||||||||||
Impaired loans without a valuation allowance | $ | 9,463 | $ | 3,410 | |||||||||||||||||||||||||
Impaired loans with a valuation allowance | 6,173 | 9,029 | |||||||||||||||||||||||||||
Total impaired loans before valuation allowances | 15,636 | 12,439 | |||||||||||||||||||||||||||
Valuation allowance related to impaired loans | 2,274 | 2,434 | |||||||||||||||||||||||||||
Net impaired loans | $ | 13,362 | $ | 10,005 | |||||||||||||||||||||||||
Activity in the allowance for loans losses during the nine months ended September 30, 2013 follows: | |||||||||||||||||||||||||||||
Allowance for loan losses: | Commercial | Commercial | Residential | Consumer | Unallocated | Total | |||||||||||||||||||||||
Real Estate | Real Estate | ||||||||||||||||||||||||||||
Beginning Balance | $ | 3,014 | $ | 2,803 | $ | 1,511 | $ | 103 | $ | — | $ | 7,431 | |||||||||||||||||
Provision | 3,553 | 226 | 198 | 38 | — | 4,015 | |||||||||||||||||||||||
Recoveries | 2 | 30 | 3 | 11 | — | 46 | |||||||||||||||||||||||
Charge offs | (3,568 | ) | (174 | ) | (574 | ) | (50 | ) | — | (4,366 | ) | ||||||||||||||||||
Ending balance | $ | 3,001 | $ | 2,885 | $ | 1,138 | $ | 102 | $ | — | $ | 7,126 | |||||||||||||||||
Individually evaluated for impairment | $ | 1,232 | $ | 821 | $ | 196 | $ | 25 | $ | — | $ | 2,274 | |||||||||||||||||
Collectively evaluated for impairment | $ | 1,769 | $ | 2,064 | $ | 942 | $ | 77 | $ | — | $ | 4,852 | |||||||||||||||||
Loans receivable (gross): | |||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 8,228 | $ | 5,222 | $ | 2,161 | $ | 25 | $ | — | $ | 15,636 | |||||||||||||||||
Collectively evaluated for impairment | $ | 135,168 | $ | 216,914 | $ | 157,687 | $ | 4,287 | $ | — | $ | 514,056 | |||||||||||||||||
Activity in the allowance for loans losses during the nine months ended September 30, 2012, follows: | |||||||||||||||||||||||||||||
Allowance for loan losses: | Commercial | Commercial | Residential | Consumer | Unallocated | Total | |||||||||||||||||||||||
Real Estate | Real Estate | ||||||||||||||||||||||||||||
Beginning Balance | $ | 3,406 | $ | 3,175 | $ | 1,242 | $ | 118 | $ | — | $ | 7,941 | |||||||||||||||||
Provision | 233 | (458 | ) | 530 | 20 | — | 325 | ||||||||||||||||||||||
Recoveries | 6 | 4 | 3 | 4 | — | 17 | |||||||||||||||||||||||
Charge offs | (105 | ) | (234 | ) | (462 | ) | (51 | ) | — | (852 | ) | ||||||||||||||||||
Ending balance | $ | 3,540 | $ | 2,487 | $ | 1,313 | $ | 91 | $ | — | $ | 7,431 | |||||||||||||||||
Individually evaluated for impairment | $ | 1,625 | $ | 570 | $ | 336 | $ | 6 | $ | — | $ | 2,537 | |||||||||||||||||
Collectively evaluated for impairment | $ | 1,915 | $ | 1,917 | $ | 977 | $ | 85 | $ | — | $ | 4,894 | |||||||||||||||||
Loans receivable (gross): | |||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 5,741 | $ | 8,955 | $ | 2,543 | $ | 15 | $ | — | $ | 17,254 | |||||||||||||||||
Collectively evaluated for impairment | $ | 132,280 | $ | 200,772 | $ | 131,541 | $ | 5,287 | $ | — | $ | 469,880 | |||||||||||||||||
PSB maintains an independent credit administration staff that continually monitors aggregate commercial loan portfolio and individual borrower credit quality trends. All commercial purpose loans are assigned a credit grade upon origination, and credit grades for nonproblem borrowers with aggregate credit in excess of $500 are reviewed annually. In addition, all past due, restructured, or identified problem loans, both commercial and consumer purpose, are reviewed and assigned an up-to-date credit grade quarterly. | |||||||||||||||||||||||||||||
PSB uses a seven point grading scale to estimate credit risk with risk rating 1, representing the high credit quality, and risk rating 7, representing the lowest credit quality. The assigned credit grade takes into account several credit quality components which are assigned a weight and blended into the composite grade. The factors considered and their assigned weight for the final composite grade is as follows: | |||||||||||||||||||||||||||||
Cash flow (30% weight) – Considers earnings trends and debt service coverage levels. | |||||||||||||||||||||||||||||
Collateral (25% weight) – Considers loan to value and other measures of collateral coverage. | |||||||||||||||||||||||||||||
Leverage (15% weight) – Considers balance sheet debt and capital ratios compared to Robert Morris & Associates (RMA) industry medians. | |||||||||||||||||||||||||||||
Liquidity (10% weight) – Considers balance sheet current, quick, and other working capital ratios compared to RMA industry medians. | |||||||||||||||||||||||||||||
Management (5% weight) – Considers the past performance, character, and depth of borrower management. | |||||||||||||||||||||||||||||
Guarantor (5% weight) – Considers the existence of a guarantor along with a bank’s past experience with the guarantor and his related liquidity and credit score. | |||||||||||||||||||||||||||||
Financial reporting (5% weight) – Considers the relative level of independent financial review obtained by the borrower on its financial statements, from audited financial statements down to existence of only tax returns or potentially unreliable financial information. | |||||||||||||||||||||||||||||
Industry (5% weight) – Considers the borrower’s industry and whether it is stable or subject to cyclical or seasonal factors. | |||||||||||||||||||||||||||||
Nonclassified loans are assigned a risk rating of 1 to 4 and have credit quality that ranges from well above average to some inherent industry weaknesses that may present higher than average risk due to conditions affecting the borrower, the borrower’s industry, or economic development. | |||||||||||||||||||||||||||||
Special mention and watch loans are assigned a risk rating of 5 when potential weaknesses exist that deserve management’s close attention. If left uncorrected, the potential weaknesses may result in deterioration of repayment prospects or in credit position at some future date. Substandard loans are assigned a risk rating of 6 and are inadequately protected by the current worth and borrowing capacity of the borrower. Well-defined weaknesses exist that may jeopardize the liquidation of the debt. There is a possibility of some loss if the deficiencies are not corrected. At this point, the loan may still be performing and accruing interest. | |||||||||||||||||||||||||||||
Impaired and other doubtful loans assigned a risk rating of 7 have all of the weaknesses of a substandard credit plus the added characteristic that the weaknesses make collection or liquidation in full on the basis of current facts, conditions, and collateral values highly questionable and improbable. Impaired loans include all nonaccrual loans and all restructured loans including restructured loans performing according to the restructured terms. In special situations, an impaired loan with a risk rating of 7 could still be maintained on accrual status such as in the case of restructured loans performing according to restructured terms. | |||||||||||||||||||||||||||||
The commercial credit exposure based on internally assigned credit grade at September 30, 2013, follows: | |||||||||||||||||||||||||||||
Commercial | Construction | ||||||||||||||||||||||||||||
Commercial | Real Estate | & Development | Agricultural | Government | Total | ||||||||||||||||||||||||
High quality (risk rating 1) | $ | 51 | $ | — | $ | — | $ | — | $ | — | $ | 51 | |||||||||||||||||
Minimal risk (2) | 33,663 | 19,674 | 75 | 1,206 | 83 | 54,701 | |||||||||||||||||||||||
Average risk (3) | 54,473 | 139,442 | 8,399 | 2,657 | 8,401 | 213,372 | |||||||||||||||||||||||
Acceptable risk (4) | 23,801 | 35,566 | 2,985 | 396 | 367 | 63,115 | |||||||||||||||||||||||
Watch risk (5) | 9,180 | 7,906 | 1,633 | — | — | 18,719 | |||||||||||||||||||||||
Substandard risk (6) | 890 | 876 | 358 | — | — | 2,124 | |||||||||||||||||||||||
Impaired loans (7) | 4,960 | 5,080 | 142 | 178 | 3,090 | 13,450 | |||||||||||||||||||||||
Total | $ | 127,018 | $ | 208,544 | $ | 13,592 | $ | 4,437 | $ | 11,941 | $ | 365,532 | |||||||||||||||||
The commercial credit exposure based on internally assigned credit grade at December 31, 2012, follows: | |||||||||||||||||||||||||||||
Commercial | Construction | ||||||||||||||||||||||||||||
Commercial | Real Estate | & Development | Agricultural | Government | Total | ||||||||||||||||||||||||
High quality (risk rating 1) | $ | 38 | $ | — | $ | — | $ | — | $ | — | $ | 38 | |||||||||||||||||
Minimal risk (2) | 16,360 | 20,193 | 305 | 559 | 1,575 | 38,992 | |||||||||||||||||||||||
Average risk (3) | 51,846 | 103,454 | 22,573 | 3,336 | 12,550 | 193,759 | |||||||||||||||||||||||
Acceptable risk (4) | 32,002 | 45,699 | 3,318 | 216 | — | 81,235 | |||||||||||||||||||||||
Watch risk (5) | 8,271 | 8,291 | 1,757 | — | — | 18,319 | |||||||||||||||||||||||
Substandard risk (6) | 617 | 2,179 | 327 | — | — | 3,123 | |||||||||||||||||||||||
Impaired loans (7) | 5,109 | 4,002 | 202 | 154 | — | 9,467 | |||||||||||||||||||||||
Total | $ | 114,243 | $ | 183,818 | $ | 28,482 | $ | 4,265 | $ | 14,125 | $ | 344,933 | |||||||||||||||||
The consumer credit exposure based on payment activity and internally assigned credit grade at September 30, 2013, follows: | |||||||||||||||||||||||||||||
Residential- | Residential- | Construction and | |||||||||||||||||||||||||||
Prime | HELOC | Development | Consumer | Total | |||||||||||||||||||||||||
Performing | $ | 122,794 | $ | 19,908 | $ | 14,985 | $ | 4,287 | $ | 161,974 | |||||||||||||||||||
Impaired loans | 1,675 | 438 | 48 | 25 | 2,186 | ||||||||||||||||||||||||
Total | $ | 124,469 | $ | 20,346 | $ | 15,033 | $ | 4,312 | $ | 164,160 | |||||||||||||||||||
The consumer credit exposure based on payment activity and internally assigned credit grade at December 31, 2012, follows: | |||||||||||||||||||||||||||||
Residential- | Residential- | Construction and | |||||||||||||||||||||||||||
Prime | HELOC | Development | Consumer | Total | |||||||||||||||||||||||||
Performing | $ | 103,292 | $ | 21,250 | $ | 15,094 | $ | 4,689 | $ | 144,325 | |||||||||||||||||||
Impaired loans | 2,287 | 506 | 153 | 26 | 2,972 | ||||||||||||||||||||||||
Total | $ | 105,579 | $ | 21,756 | $ | 15,247 | $ | 4,715 | $ | 147,297 | |||||||||||||||||||
The payment age analysis of loans receivable disbursed at September 30, 2013, follows: | |||||||||||||||||||||||||||||
30-59 | 60-89 | 90+ | Total | Total | 90+ and | ||||||||||||||||||||||||
Loan Class | Days | Days | Days | Past Due | Current | Loans | Accruing | ||||||||||||||||||||||
Commercial: | |||||||||||||||||||||||||||||
Commercial and industrial | $ | 567 | $ | 423 | $ | 838 | $ | 1,828 | $ | 125,190 | $ | 127,018 | $ | — | |||||||||||||||
Agricultural | — | — | 178 | 178 | 4,259 | 4,437 | — | ||||||||||||||||||||||
Government | — | — | — | — | 11,941 | 11,941 | — | ||||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||
Commercial real estate | 272 | 395 | 1,244 | 1,911 | 206,633 | 208,544 | — | ||||||||||||||||||||||
Commercial construction and development | — | — | — | — | 11,747 | 11,747 | — | ||||||||||||||||||||||
Residential real estate: | |||||||||||||||||||||||||||||
Residential – Prime | 245 | — | 325 | 570 | 123,899 | 124,469 | — | ||||||||||||||||||||||
Residential – HELOC | 90 | 18 | 266 | 374 | 19,972 | 20,346 | — | ||||||||||||||||||||||
Residential – construction and development | — | — | — | — | 10,885 | 10,885 | — | ||||||||||||||||||||||
Consumer | 7 | 2 | 9 | 18 | 4,294 | 4,312 | — | ||||||||||||||||||||||
Total | $ | 1,181 | $ | 838 | $ | 2,860 | $ | 4,879 | $ | 518,820 | $ | 523,699 | $ | — | |||||||||||||||
The payment age analysis of loans receivable disbursed at December 31, 2012, follows: | |||||||||||||||||||||||||||||
30-59 | 60-89 | 90+ | Total | Total | 90+ and | ||||||||||||||||||||||||
Loan Class | Days | Days | Days | Past Due | Current | Loans | Accruing | ||||||||||||||||||||||
Commercial: | |||||||||||||||||||||||||||||
Commercial and industrial | $ | 375 | $ | 83 | $ | 1,795 | $ | 2,253 | $ | 111,990 | $ | 114,243 | $ | — | |||||||||||||||
Agricultural | — | 154 | — | 154 | 4,111 | 4,265 | — | ||||||||||||||||||||||
Government | — | — | — | — | 14,125 | 14,125 | — | ||||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||
Commercial real estate | 936 | 76 | 1,028 | 2,040 | 181,778 | 183,818 | — | ||||||||||||||||||||||
Commercial construction and development | — | 20 | — | 20 | 25,340 | 25,360 | — | ||||||||||||||||||||||
Residential real estate: | |||||||||||||||||||||||||||||
Residential – prime | 950 | 274 | 1,344 | 2,568 | 103,011 | 105,579 | — | ||||||||||||||||||||||
Residential – HELOC | 64 | — | 335 | 399 | 21,357 | 21,756 | — | ||||||||||||||||||||||
Residential – construction and development | — | — | 133 | 133 | 11,197 | 11,330 | — | ||||||||||||||||||||||
Consumer | 21 | 3 | 15 | 39 | 4,676 | 4,715 | — | ||||||||||||||||||||||
Total | $ | 2,346 | $ | 610 | $ | 4,650 | $ | 7,606 | $ | 477,585 | $ | 485,191 | $ | — | |||||||||||||||
Impaired loans as of September 30, 2013, and during the nine months then ended, by loan class, follows: | |||||||||||||||||||||||||||||
Unpaid | Average | Interest | |||||||||||||||||||||||||||
Principal | Related | Recorded | Recorded | Income | |||||||||||||||||||||||||
Balance | Allowance | Investment | Investment | Recognized | |||||||||||||||||||||||||
With no related allowance recorded: | |||||||||||||||||||||||||||||
Commercial & industrial | $ | 2,748 | $ | — | $ | 2,620 | $ | 2,052 | $ | 80 | |||||||||||||||||||
Commercial real estate | 2,708 | — | 2,513 | 1,808 | 74 | ||||||||||||||||||||||||
Commercial construction & development | 2 | — | — | — | — | ||||||||||||||||||||||||
Government | 3,090 | 3,090 | 1,545 | 77 | |||||||||||||||||||||||||
Residential – prime | 1,314 | — | 1,160 | 992 | 7 | ||||||||||||||||||||||||
Residential – HELOC | 80 | — | 80 | 40 | 2 | ||||||||||||||||||||||||
With an allowance recorded: | |||||||||||||||||||||||||||||
Commercial & industrial | $ | 2,576 | $ | 1,153 | $ | 2,340 | $ | 2,983 | $ | 42 | |||||||||||||||||||
Commercial real estate | 2,638 | 780 | 2,567 | 2,733 | 71 | ||||||||||||||||||||||||
Commercial construction & development | 144 | 41 | 142 | 172 | 6 | ||||||||||||||||||||||||
Agricultural | 179 | 79 | 178 | 166 | — | ||||||||||||||||||||||||
Residential – prime | 529 | 112 | 515 | 989 | 3 | ||||||||||||||||||||||||
Residential – HELOC | 370 | 76 | 358 | 432 | 3 | ||||||||||||||||||||||||
Residential construction & development | 50 | 8 | 48 | 101 | 1 | ||||||||||||||||||||||||
Consumer | 23 | 25 | 25 | 26 | — | ||||||||||||||||||||||||
Totals: | |||||||||||||||||||||||||||||
Commercial & industrial | $ | 5,324 | $ | 1,153 | $ | 4,960 | $ | 5,035 | $ | 122 | |||||||||||||||||||
Commercial real estate | 5,346 | 780 | 5,080 | 4,541 | 145 | ||||||||||||||||||||||||
Commercial construction & development | 146 | 41 | 142 | 172 | 6 | ||||||||||||||||||||||||
Agricultural | 179 | 79 | 178 | 166 | — | ||||||||||||||||||||||||
Government | 3,090 | — | 3,090 | 1,545 | 77 | ||||||||||||||||||||||||
Residential – prime | 1,843 | 112 | 1,675 | 1,981 | 10 | ||||||||||||||||||||||||
Residential – HELOC | 450 | 76 | 438 | 472 | 5 | ||||||||||||||||||||||||
Residential construction & development | 50 | 8 | 48 | 101 | 1 | ||||||||||||||||||||||||
Consumer | 23 | 25 | 25 | 26 | — | ||||||||||||||||||||||||
The impaired loans at December 31, 2012, and during the year then ended, by loan class, follows: | |||||||||||||||||||||||||||||
Unpaid | Average | Interest | |||||||||||||||||||||||||||
Principal | Related | Recorded | Recorded | Income | |||||||||||||||||||||||||
Balance | Allowance | Investment | Investment | Recognized | |||||||||||||||||||||||||
With no related allowance recorded: | |||||||||||||||||||||||||||||
Commercial and industrial | $ | 1,521 | $ | — | $ | 1,483 | $ | 1,545 | $ | 88 | |||||||||||||||||||
Commercial real estate | 1,176 | — | 1,103 | 2,405 | 194 | ||||||||||||||||||||||||
Commercial construction and development | — | — | — | — | 33 | ||||||||||||||||||||||||
Residential – Prime | 881 | — | 824 | 493 | 9 | ||||||||||||||||||||||||
Residential – HELOC | — | — | — | — | 3 | ||||||||||||||||||||||||
With an allowance recorded: | |||||||||||||||||||||||||||||
Commercial and industrial | $ | 3,960 | $ | 1,287 | $ | 3,626 | $ | 4,238 | $ | 62 | |||||||||||||||||||
Commercial real estate | 3,035 | 643 | 2,899 | 3,303 | 105 | ||||||||||||||||||||||||
Commercial construction and development | 205 | 31 | 202 | 427 | 21 | ||||||||||||||||||||||||
Agricultural | 154 | 40 | 154 | 91 | 10 | ||||||||||||||||||||||||
Residential – Prime | 1,511 | 277 | 1,463 | 1,746 | 22 | ||||||||||||||||||||||||
Residential – HELOC | 510 | 126 | 506 | 387 | 15 | ||||||||||||||||||||||||
Residential construction and development | 153 | 4 | 153 | 149 | 5 | ||||||||||||||||||||||||
Consumer | 26 | 26 | 26 | 48 | 2 | ||||||||||||||||||||||||
Totals: | |||||||||||||||||||||||||||||
Commercial and industrial | $ | 5,481 | $ | 1,287 | $ | 5,109 | $ | 5,783 | $ | 150 | |||||||||||||||||||
Commercial real estate | 4,211 | 643 | 4,002 | 5,708 | 299 | ||||||||||||||||||||||||
Commercial construction and development | 205 | 31 | 202 | 427 | 54 | ||||||||||||||||||||||||
Agricultural | 154 | 40 | 154 | 91 | 10 | ||||||||||||||||||||||||
Residential – Prime | 2,392 | 277 | 2,287 | 2,239 | 31 | ||||||||||||||||||||||||
Residential – HELOC | 510 | 126 | 506 | 387 | 18 | ||||||||||||||||||||||||
Residential construction and development | 153 | 4 | 153 | 149 | 5 | ||||||||||||||||||||||||
Consumer | 26 | 26 | 26 | 48 | 2 | ||||||||||||||||||||||||
Loans on nonaccrual status at period-end, follows: | |||||||||||||||||||||||||||||
30-Sep-13 | 31-Dec-12 | ||||||||||||||||||||||||||||
Commercial: | |||||||||||||||||||||||||||||
Commercial and industrial | $ | 2,191 | $ | 3,023 | |||||||||||||||||||||||||
Agricultural | 178 | 154 | |||||||||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||
Commercial real estate | 3,003 | 2,001 | |||||||||||||||||||||||||||
Commercial construction and development | 18 | 1 | |||||||||||||||||||||||||||
Residential real estate: | |||||||||||||||||||||||||||||
Residential – prime | 1,265 | 2,021 | |||||||||||||||||||||||||||
Residential – HELOC | 332 | 365 | |||||||||||||||||||||||||||
Residential construction and development | 30 | 133 | |||||||||||||||||||||||||||
Consumer | 19 | 17 | |||||||||||||||||||||||||||
Total | $ | 7,036 | $ | 7,715 | |||||||||||||||||||||||||
During the quarter and nine months ended September 30, 2013, the contracts identified below were modified to capitalize unpaid property taxes, convert amortizing payments to interest only payments, extend the amortization period, or lower the interest rate, and were categorized as troubled debt restructurings. During the quarter and nine months ended September 30, 2012, the contracts identified below were modified to convert from amortizing principal payments to interest only payments, extend payment amortization periods, or to capitalize unpaid property taxes. Specific loan reserves maintained in connection with loans restructured during the year to date period totaled $165 at September 30, 2013, and $262 at September 30, 2012. All modified or restructured loans are classified as impaired loans. Recorded investment as presented in the tables below concerning modified loans represents principal outstanding before specific reserves. | |||||||||||||||||||||||||||||
The following table presents information concerning modifications of troubled debt made during the quarter ended September 30, 2013: | |||||||||||||||||||||||||||||
Pre-modification | Post-modification | ||||||||||||||||||||||||||||
Number of | outstanding recorded | outstanding recorded | |||||||||||||||||||||||||||
As of September 30, 2013 ($000s) | contracts | investment | investment at period-end | ||||||||||||||||||||||||||
Commercial & industrial | 1 | $ | 75 | $ | 75 | ||||||||||||||||||||||||
Commercial real estate | 1 | $ | 82 | $ | 81 | ||||||||||||||||||||||||
Residential real estate – prime | 4 | $ | 777 | $ | 774 | ||||||||||||||||||||||||
The following table presents information concerning modifications of troubled debt made during the quarter ended September 30, 2012: | |||||||||||||||||||||||||||||
Pre-modification | Post-modification | ||||||||||||||||||||||||||||
Number of | outstanding recorded | outstanding recorded | |||||||||||||||||||||||||||
As of September 30, 2012 ($000s) | contracts | investment | investment at period-end | ||||||||||||||||||||||||||
Commercial & industrial | 3 | $ | 481 | $ | 475 | ||||||||||||||||||||||||
Residential real estate – prime | 1 | $ | 121 | $ | 89 | ||||||||||||||||||||||||
The following table presents information concerning modifications of troubled debt made during the nine months ended September 30, 2013: | |||||||||||||||||||||||||||||
Pre-modification | Post-modification | ||||||||||||||||||||||||||||
Number of | outstanding recorded | outstanding recorded | |||||||||||||||||||||||||||
As of September 30, 2013 ($000s) | contracts | investment | investment at period-end | ||||||||||||||||||||||||||
Commercial & industrial | 4 | $ | 471 | $ | 369 | ||||||||||||||||||||||||
Commercial real estate | 3 | $ | 303 | $ | 288 | ||||||||||||||||||||||||
Residential real estate – prime | 5 | $ | 867 | $ | 862 | ||||||||||||||||||||||||
The following table presents information concerning modifications of troubled debt made during the nine months ended September 30, 2012: | |||||||||||||||||||||||||||||
Pre-modification | Post-modification | ||||||||||||||||||||||||||||
Number of | outstanding recorded | outstanding recorded | |||||||||||||||||||||||||||
As of September 30, 2012 ($000s) | contracts | investment | investment at period-end | ||||||||||||||||||||||||||
Commercial & industrial | 6 | $ | 661 | $ | 637 | ||||||||||||||||||||||||
Commercial real estate | 2 | $ | 527 | $ | 508 | ||||||||||||||||||||||||
Residential real estate – prime | 1 | $ | 121 | $ | 89 | ||||||||||||||||||||||||
The following table outlines past troubled debt restructurings that subsequently defaulted within twelve months of the last restructuring date. For purposes of this table, default is defined as 90 days or more past due on restructured payments. | |||||||||||||||||||||||||||||
Default during the quarter ended | Number of | Recorded | |||||||||||||||||||||||||||
September 30, 2013 ($000s) | contracts | Investment | |||||||||||||||||||||||||||
Commercial & industrial | 1 | $ | 172 | ||||||||||||||||||||||||||
Default during the nine months ended | Number of | Recorded | |||||||||||||||||||||||||||
September 30, 2013 ($000s) | contracts | Investment | |||||||||||||||||||||||||||
Commercial and industrial | 1 | $ | 172 | ||||||||||||||||||||||||||
Commercial real estate | 1 | $ | 81 | ||||||||||||||||||||||||||
Residential – prime | 1 | $ | 88 | ||||||||||||||||||||||||||
Default during the quarter ended | Number of | Recorded | |||||||||||||||||||||||||||
September 30, 2012 ($000s) | contracts | Investment | |||||||||||||||||||||||||||
Commercial real estate | 1 | $ | 45 | ||||||||||||||||||||||||||
Default during the nine months ended | Number of | Recorded | |||||||||||||||||||||||||||
September 30, 2012 ($000s) | contracts | Investment | |||||||||||||||||||||||||||
Commercial & industrial | 1 | $ | — | ||||||||||||||||||||||||||
Commercial real estate | 1 | $ | 45 | ||||||||||||||||||||||||||
FORECLOSED_ASSETS
FORECLOSED ASSETS | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Repossessed Assets [Abstract] | ' | ||||||||||||||||
FORECLOSED ASSETS | ' | ||||||||||||||||
NOTE 5 – FORECLOSED ASSETS | |||||||||||||||||
Real estate and other property acquired through, or in lieu of, loan foreclosure are to be sold and are initially recorded at fair value (after deducting estimated costs to sell) at the date of foreclosure, establishing a new cost basis. Costs related to development and improvement of property are capitalized, whereas costs related to holding property are expensed. After foreclosure, valuations are periodically performed by management, and the real estate or other property is carried at the lower of carrying amount or fair value less estimated costs to sell. Revenue and expenses from operations of foreclosed assets and changes in any valuation allowance are included in loss on foreclosed assets. | |||||||||||||||||
A summary of activity in foreclosed assets is as follows: | |||||||||||||||||
Three months ended | Nine months ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Balance at beginning of period | $ | 1,336 | $ | 2,642 | $ | 1,774 | $ | 2,939 | |||||||||
Transfer of loans at net realizable value to foreclosed assets | 538 | 160 | 947 | 568 | |||||||||||||
Sale proceeds | (47 | ) | (172 | ) | (698 | ) | (580 | ) | |||||||||
Loans made on sale of foreclosed assets | (100 | ) | — | (207 | ) | (140 | ) | ||||||||||
Net gain (loss) from sale of foreclosed assets | 28 | (1 | ) | 88 | 47 | ||||||||||||
Provision for write-down charged to operations | (149 | ) | (280 | ) | (298 | ) | (485 | ) | |||||||||
Balance at end of period | $ | 1,606 | $ | 2,349 | $ | 1,606 | $ | 2,349 | |||||||||
DEPOSITS
DEPOSITS | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Deposits [Abstract] | ' | ||||||||
DEPOSITS | ' | ||||||||
NOTE 6 – DEPOSITS | |||||||||
The distribution of deposits at period end is as follows: | |||||||||
30-Sep-13 | 31-Dec-12 | ||||||||
Non-interest bearing demand | $ | 92,141 | $ | 89,819 | |||||
Interest bearing demand (NOWs) | 111,993 | 131,404 | |||||||
Savings | 55,638 | 53,799 | |||||||
Money market | 125,508 | 124,501 | |||||||
Retail and local time | 103,270 | 111,462 | |||||||
Broker and national time | 65,689 | 54,457 | |||||||
Total deposits | $ | 554,239 | $ | 565,442 | |||||
OTHER_BORROWINGS
OTHER BORROWINGS | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Other Borrowings | ' | ||||||||||||||||
OTHER BORROWINGS | ' | ||||||||||||||||
NOTE 7 – OTHER BORROWINGS | |||||||||||||||||
Other borrowings consist of the following obligations at September 30, 2013, and December 31, 2012: | |||||||||||||||||
30-Sep-13 | 31-Dec-12 | ||||||||||||||||
Federal funds purchased | $ | — | $ | — | |||||||||||||
Short-term repurchase agreements | 5,353 | 7,228 | |||||||||||||||
Bank stock term loan | 1,500 | — | |||||||||||||||
Wholesale structured repurchase agreements | 13,500 | 13,500 | |||||||||||||||
Total other borrowings | $ | 20,353 | $ | 20,728 | |||||||||||||
PSB pledges various securities available for sale as collateral for repurchase agreements. The fair value of securities pledged for repurchase agreements totaled $29,310 at September 30, 2013 and $21,931 at December 31, 2012. | |||||||||||||||||
During the quarter ended March 31, 2013, PSB used the proceeds from a new $2,000 fully amortizing term loan with Bankers’ Bank, Madison, Wisconsin to repay $2,000 of its 8% senior subordinated notes outstanding. PSB has pledged its common stock ownership of its subsidiary, Peoples State Bank, as collateral for the loan. The bank stock note carries a floating rate of interest with required principal payments of $500, $1,000, and $500, in 2013, 2014, and 2015, respectively. | |||||||||||||||||
The following information relates to securities sold under repurchase agreements and other borrowings: | |||||||||||||||||
Three months ended | Nine months ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
As of end of period – weighted average rate | 3.09% | 3.04% | 3.09% | 3.04% | |||||||||||||
For the period: | |||||||||||||||||
Highest month-end balance | $ | 24,100 | $ | 19,273 | $ | 24,100 | $ | 19,934 | |||||||||
Daily average balance | $ | 22,797 | $ | 18,725 | $ | 22,368 | $ | 19,166 | |||||||||
Weighted average rate | 2.87% | 3.19% | 2.93% | 3.12% | |||||||||||||
SENIOR_SUBORDINATED_NOTES
SENIOR SUBORDINATED NOTES | 9 Months Ended |
Sep. 30, 2013 | |
SeniorSubordinatedNotesAbstract | ' |
SENIOR SUBORDINATED NOTES | ' |
NOTE 8 – SENIOR SUBORDINATED NOTES | |
During the quarter ended March 31, 2013, PSB elected to prepay $7,000 of its 8% senior subordinated notes with $1,000 of cash and $6,000 in proceeds from an issue of new subordinated debt. The new debt included $4,000 of privately placed notes carrying a 3.75% fixed interest rate with semi-annual interest only payments, due in 2018, and $2,000 in a fully amortizing bank stock term loan with Bankers’ Bank, Madison, Wisconsin, carrying a floating rate of interest based on changes in the 90-day LIBOR plus 3.00% and maturing in 2015. The $4,000 of new fixed rate subordinated debt is held by related parties, including directors and a significant shareholder. |
DERIVATIVE_INSTRUMENTS_AND_HED
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | 9 Months Ended | ||
Sep. 30, 2013 | |||
Derivative Instruments And Hedging Activities | ' | ||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | ' | ||
NOTE 9 – DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | |||
PSB is exposed to certain risks relating to its ongoing business operations. The primary risk managed by using derivative instruments is interest rate risk. Interest rate swaps are entered into to manage interest rate risk associated with PSB’s variable rate junior subordinated debentures. Accounting standards require PSB to recognize all derivative instruments as either assets or liabilities at fair value in the balance sheet. PSB designates its interest rate swap associated with the junior subordinated debentures as a cash flow hedge of variable-rate debt. For derivative financial instruments that are designated and qualify as cash flow hedges, the effective portion of the gain or loss on the derivative instrument is reported as a component of other comprehensive income and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Gains and losses on the derivative instrument representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings. | |||
From time to time, PSB will also enter into fixed interest rate swaps with customers in connection with their floating rate loans to PSB. When fixed rate swaps are originated with customers, an identical offsetting swap is also entered into by PSB with a correspondent bank. These swap arrangements are intended to offset each other as “back to back” swaps and allow PSB’s loan customer to obtain fixed rate loan financing via the swap while PSB exchanges these fixed payments with a correspondent bank. In these arrangements, PSB’s net cash flows and interest income are equal to the floating rate loan originated in connection with the swap. These customer swaps are not designated as hedging instruments and are accounted for at fair value with changes in fair value recognized in the income statement during the current period. | |||
PSB is exposed to credit-related losses in the event of nonperformance by the counterparties to these agreements. PSB controls the credit risk of its financial contracts through credit approvals, limits, and monitoring procedures, and does not expect any counterparties to fail their obligations. PSB swaps originated with correspondent banks are over-the-counter (OTC) contracts. Negotiated OTC derivative contracts are generally entered into between two counterparties that negotiate specific agreement terms, including the underlying instrument, amounts, exercise prices, and maturity. | |||
At period end, the following interest rate swaps to hedge variable-rate debt were outstanding: | |||
30-Sep-13 | 31-Dec-12 | ||
Notional amount | $7,500 | $7,500 | |
Pay fixed rate | 2.72% | 2.72% | |
Receive variable rate | 0.25% | 0.31% | |
Maturity | Sep-17 | Sep-17 | |
Unrealized fair value gain (loss) | ($485) | ($699) | |
This agreement provides for PSB to receive payments at a variable rate determined by the three-month LIBOR in exchange for making payments at a fixed rate. Actual maturities may differ from scheduled maturities due to call options and/or early termination provisions. No interest rate swap agreements were terminated prior to maturity during the quarter or nine months ended September 30, 2013 or 2012. Risk management results for the quarter ended September 30, 2013 related to the balance sheet hedging of variable rate debt indicates that the hedge was 100% effective, and no component of the derivative instrument’s gain or loss was excluded from the assessment of hedge effectiveness. | |||
As of September 30, 2013, approximately $183 of losses ($111 after tax impacts) reported in other comprehensive income related to the interest rate swap are expected to be reclassified into interest expense as a yield adjustment of the hedged borrowings during the 12-month period ending September 30, 2014. The interest rate swap agreement was secured by cash and cash equivalents of $570 at September 30, 2013, and $850 at December 31, 2012. | |||
As of September 30, 2013 and December 31, 2012, PSB had a number of outstanding interest rate swaps with customers and correspondent banks associated with its lending activities that are not designated as hedges. At period end, the following floating interest rate swaps were outstanding with customers: | |||
30-Sep-13 | 31-Dec-12 | ||
Notional amount | $14,488 | $14,979 | |
Receive fixed rate (average) | 1.99% | 1.99% | |
Pay variable rate (average) | 0.17% | 0.21% | |
Maturity | March 2015 – Oct. 2021 | March 2015 – Oct. 2021 | |
Weighted average remaining term | 3.2 years | 3.9 years | |
Unrealized fair value gain (loss) | $361 | $673 | |
At period end, the following offsetting fixed interest rate swaps were outstanding with correspondent banks: | |||
30-Sep-13 | 31-Dec-12 | ||
Notional amount | $14,488 | $14,979 | |
Pay fixed rate (average) | 1.99% | 1.99% | |
Receive variable rate (average) | 0.17% | 0.21% | |
Maturity | March 2015 – Oct. 2021 | March 2015 – Oct. 2021 | |
Weighted average remaining term | 3.2 years | 3.9 years | |
Unrealized fair value gain (loss) | ($361) | ($673) |
INCOME_TAX_EFFECTS_ON_ITEMS_OF
INCOME TAX EFFECTS ON ITEMS OF COMPREHENSIVE INCOME (LOSS) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Income Tax Effects On Items Of Comprehensive Income Loss | ' | ||||||||||||||||
INCOME TAX EFFECTS ON ITEMS OF COMPREHENSIVE INCOME (LOSS) | ' | ||||||||||||||||
NOTE 10 – INCOME TAX EFFECTS ON ITEMS OF COMPREHENSIVE INCOME (LOSS) | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
30-Sep-13 | 30-Sep-13 | ||||||||||||||||
Period ended September 30, 2013 | Pre-tax | Income Tax | Pre-tax | Income Tax | |||||||||||||
(dollars in thousands) | Inc. (Exp.) | Exp. (Credit) | Inc. (Exp.) | Exp. (Credit) | |||||||||||||
Unrealized loss on securities available for sale | $ | (416 | ) | $ | (151 | ) | $ | (1,277 | ) | $ | (497 | ) | |||||
Reclassification adjustment for security gain included in net income | — | — | (12 | ) | (5 | ) | |||||||||||
Accretion (amortization) of unrealized gain on securities available for sale | |||||||||||||||||
transferred to securities held to maturity included in net income | 3 | (13 | ) | (319 | ) | (144 | ) | ||||||||||
Unrealized gain (loss) on interest rate swap | (62 | ) | (23 | ) | 75 | 30 | |||||||||||
Reclassification adjustment of interest rate swap settlements included in earnings | 47 | 19 | 139 | 55 | |||||||||||||
Totals | $ | (428 | ) | $ | (168 | ) | $ | (1,394 | ) | $ | (561 | ) | |||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
30-Sep-12 | 30-Sep-12 | ||||||||||||||||
Period ended September 30, 2012 | Pre-tax | Income Tax | Pre-tax | Income Tax | |||||||||||||
(dollars in thousands) | Inc. (Exp.) | Exp. (Credit) | Inc. (Exp.) | Exp. (Credit) | |||||||||||||
Unrealized gain (loss) on securities available for sale | $ | 27 | $ | 13 | $ | (94 | ) | $ | (34 | ) | |||||||
Amortization of unrealized gain on securities available for sale transferred | |||||||||||||||||
to securities held to maturity included in net income | (110 | ) | (44 | ) | (346 | ) | (136 | ) | |||||||||
Unrealized loss on interest rate swap | (106 | ) | (42 | ) | (292 | ) | (115 | ) | |||||||||
Reclassification adjustment of interest rate swap settlements included in earnings | 43 | 17 | 127 | 50 | |||||||||||||
Totals | $ | (146 | ) | $ | (56 | ) | $ | (605 | ) | $ | (235 | ) | |||||
RECLASSIFICATIONS_OUT_OF_ACCUM
RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME | 9 Months Ended |
Sep. 30, 2013 | |
Reclassifications Out Of Accumulated Other Comprehensive Income | ' |
RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME | ' |
NOTE 11 – RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME | |
During the quarter ended March 31, 2013, PSB reclassified $12 ($7 after tax impacts) to reduce comprehensive net income following a gain on sale of securities available for sale. The reduction to comprehensive net income was recognized as a $12 ($7 after tax impacts) gain on sale of securities on the statement of income during the quarter. | |
During the quarter ended September 30, 2013, PSB reclassified $47 ($28 after tax impacts) of interest rate swap settlements which increased comprehensive income. The increase to comprehensive net income was recognized as a $47 ($28 after tax impacts) increase to interest expense on junior subordinated debentures on the statement of income during the quarter. | |
During the nine months ended September 30, 2013, PSB reclassified $139 ($84 after tax impacts) of interest rate swap settlements which increased comprehensive income. The increase to comprehensive net income was recognized as a $139 ($84 after tax impacts) increase to interest expense on junior subordinated debentures on the statement of income during the period. |
STOCKBASED_COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Stock-Based Compensation | ' | ||||||||
STOCK-BASED COMPENSATION | ' | ||||||||
NOTE 12 – STOCK-BASED COMPENSATION | |||||||||
PSB granted restricted stock to certain employees having an initial market value of $210 during the three months ended March 31, 2013 compared to $200 granted during the three months ended March 31, 2012. Restricted shares vest to employees based on continued PSB service over a six-year period and are recognized as compensation expense over the vesting period. Cash dividends are paid on unvested shares at the same time and amount as paid to PSB common shareholders. Cash dividends paid on unvested restricted stock shares are charged to retained earnings as significantly all restricted shares are expected to vest to employees. Unvested shares are subject to forfeiture upon employee termination. During the six months ended June 30, compensation expense recorded from amortization of restricted shares expected to vest to employees was $72 and $53 during 2013 and 2012, respectively. | |||||||||
The following tables summarize information regarding unvested restricted stock outstanding at June 30, 2013 and 2012 including activity during the six months then ended. | |||||||||
Weighted | |||||||||
Average | |||||||||
Shares | Grant Price | ||||||||
1-Jan-12 | 25,572 | $ | 17.79 | ||||||
Restricted stock granted | 8,895 | 22.48 | |||||||
Restricted stock legally vested | (4,058 | ) | (16.08 | ) | |||||
30-Jun-12 | 30,409 | $ | 19.39 | ||||||
1-Jan-13 | 30,409 | $ | 19.39 | ||||||
Restricted stock granted | 8,076 | 26 | |||||||
Restricted stock legally vested | (5,883 | ) | (17.85 | ) | |||||
30-Jun-13 | 32,602 | $ | 21.3 | ||||||
Scheduled compensation expense per calendar year assuming all restricted shares eventually vest to employees would be as follows: | |||||||||
2013 | $ | 146 | |||||||
2014 | 146 | ||||||||
2015 | 137 | ||||||||
2016 | 122 | ||||||||
2017 | 82 | ||||||||
Thereafter | 42 | ||||||||
Totals | $ | 675 |
EARNINGS_PER_SHARE
EARNINGS PER SHARE | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Earnings Per Share [Abstract] | ' | ||||||||||||||||
EARNINGS PER SHARE | ' | ||||||||||||||||
NOTE 13 – EARNINGS PER SHARE | |||||||||||||||||
Basic earnings per share of common stock are based on the weighted average number of common shares outstanding during the period. Unvested but issued restricted shares are considered to be outstanding shares and used to calculate the weighted average number of shares outstanding and determine net book value per share. Diluted earnings per share is calculated by dividing net income by the weighted average number of shares adjusted for the dilutive effect of outstanding stock options. On June 19, 2012, the Company declared a 5% stock dividend to shareholders of record July 16, 2012, which was paid in the form of additional common stock on July 30, 2012. All references in the accompanying consolidated financial statements and footnotes to the number of common shares and per share amounts during 2012 have been restated to reflect the 5% stock dividend. | |||||||||||||||||
Presented below are the calculations for basic and diluted earnings per share: | |||||||||||||||||
Three months ended | Nine months ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
(dollars in thousands, except per share data – unaudited) | 2013 | 2012 | 2013 | 2012 | |||||||||||||
Net income | $ | 13 | $ | 1,226 | $ | 3,183 | $ | 4,324 | |||||||||
Weighted average shares outstanding | 1,651,518 | 1,663,472 | 1,653,098 | 1,663,221 | |||||||||||||
Effect of dilutive stock options outstanding | — | — | — | 76 | |||||||||||||
Diluted weighted average shares outstanding | 1,651,518 | 1,663,472 | 1,653,098 | 1,663,297 | |||||||||||||
Basic earnings per share | $ | 0.01 | $ | 0.74 | $ | 1.93 | $ | 2.6 | |||||||||
Diluted earnings per share | $ | 0.01 | $ | 0.74 | $ | 1.93 | $ | 2.6 |
CONTINGENCIES
CONTINGENCIES | 9 Months Ended |
Sep. 30, 2013 | |
Contingencies | ' |
CONTINGENCIES | ' |
NOTE 14 – CONTINGENCIES | |
In the normal course of business, PSB is involved in various legal proceedings. In the opinion of management, any liability resulting from such proceedings would not have a material adverse effect on the consolidated financial statements. |
FAIR_VALUE_MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended | ||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||
Fair Value Measurements | ' | ||||||||||||||||||||
FAIR VALUE MEASUREMENTS | ' | ||||||||||||||||||||
NOTE 15 – FAIR VALUE MEASUREMENTS | |||||||||||||||||||||
Certain assets and liabilities are recorded or disclosed at fair value to provide financial statement users additional insight into PSB’s quality of earnings. Under current accounting guidance, PSB groups assets and liabilities which are recorded at fair value in three levels based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. A financial instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement (with Level 1 considered highest and Level 3 considered lowest). All transfers between levels are recognized as occurring at the end of the reporting period. | |||||||||||||||||||||
Following is a brief description of each level of the fair value hierarchy: | |||||||||||||||||||||
Level 1 – Fair value measurement is based on quoted prices for identical assets or liabilities in active markets. | |||||||||||||||||||||
Level 2 – Fair value measurement is based on (1) quoted prices for similar assets or liabilities in active markets; (2) quoted prices for identical or similar assets or liabilities in markets that are not active; or (3) valuation models and methodologies for which all significant assumptions are or can be corroborated by observable market data. | |||||||||||||||||||||
Level 3 – Fair value measurement is based on valuation models and methodologies that incorporate at least one significant assumption that cannot be corroborated by observable market data. Level 3 measurements reflect PSB’s estimates about assumptions market participants would use in measuring fair value of the asset or liability. | |||||||||||||||||||||
Some assets and liabilities, such as securities available for sale, loans held for sale, mortgage rate lock commitments, and interest rate swaps, are measured at fair value on a recurring basis under GAAP. Other assets and liabilities, such as impaired loans, foreclosed assets, and mortgage servicing rights are measured at fair value on a nonrecurring basis. | |||||||||||||||||||||
Following is a description of the valuation methodology used for each asset and liability measured at fair value on a recurring or nonrecurring basis, as well as the classification of the asset or liability within the fair value hierarchy. | |||||||||||||||||||||
Securities available for sale – Securities available for sale may be classified as Level 1, Level 2, or Level 3 measurements within the fair value hierarchy and are measured on a recurring basis. Level 1 securities include equity securities traded on a national exchange. The fair value measurement of a Level 1 security is based on the quoted price of the security. Level 2 securities include U.S. government and agency securities, obligations of states and political subdivisions, corporate debt securities, and mortgage-related securities. The fair value measurement of a Level 2 security is obtained from an independent pricing service and is based on recent sales of similar securities and other observable market data and represents a market approach to fair value. | |||||||||||||||||||||
At September 30, 2013 and December 31, 2012, Level 3 securities include a common stock investment in Bankers’ Bank, Madison, Wisconsin that is not traded on an active market. Historical cost of the common stock is assumed to approximate fair value of this investment. | |||||||||||||||||||||
Loans held for sale – Loans held for sale in the secondary market are carried at the lower of aggregate cost or estimated fair value and are measured on a recurring basis. The fair value measurement of a loan held for sale is based on current secondary market prices for similar loans, which is considered a Level 2 measurement and represents a market approach to fair value. | |||||||||||||||||||||
Impaired loans – Loans are not measured at fair value on a recurring basis. Carrying value of impaired loans that are not collateral dependent are based on the present value of expected future cash flows discounted at the applicable effective interest rate and, thus, are not fair value measurements. However, impaired loans considered to be collateral dependent are measured at fair value on a nonrecurring basis. The fair value measurement of an impaired loan that is collateral dependent is based on the fair value of the underlying collateral. Fair value measurements of underlying collateral that utilize observable market data, such as independent appraisals reflecting recent comparable sales, are considered Level 2 measurements. Other fair value measurements that incorporate internal collateral appraisals or broker price opinions, net of selling costs, or estimated assumptions market participants would use to measure fair value, such as discounted cash flow measurements, are considered Level 3 measurements and represent a market approach to fair value. | |||||||||||||||||||||
In the absence of a recent independent appraisal, collateral dependent impaired loans are valued based on a recent broker price opinion generally discounted by 10% plus estimated selling costs. In the absence of a broker price opinion, collateral dependent impaired loans are valued at the lower of last appraisal value or the current real estate tax value discounted by 30% plus estimated selling costs. Property values are impacted by many macroeconomic factors. In general, a declining economy or rising interest rates would be expected to lower fair value of collateral dependent impaired loans while an improving economy or falling interest rates would be expected to increase fair value of collateral dependent impaired loans. | |||||||||||||||||||||
Foreclosed assets – Real estate and other property acquired through, or in lieu of, loan foreclosure are not measured at fair value on a recurring basis. Initially, foreclosed assets are recorded at fair value less estimated costs to sell at the date of foreclosure. Estimated selling costs typically range from 5% to 15% of the property value. Valuations are periodically performed by management, and the real estate or other property is carried at the lower of carrying amount or fair value less estimated costs to sell. Fair value measurements are based on current formal or informal appraisals of property value compared to recent comparable sales of similar property. Independent appraisals reflecting comparable sales less than two years old are considered Level 2 measurements, while internal assessments of appraised value based on current market activity, including broker price opinions, are considered Level 3 measurements and represent a market approach to fair value. Property values are impacted by many macroeconomic factors. In general, a declining economy or rising interest rates would be expected to lower fair value of foreclosed assets while an improving economy or falling interest rates would be expected to increase fair value of foreclosed assets. | |||||||||||||||||||||
Mortgage servicing rights – Mortgage servicing rights are not measured at fair value on a recurring basis. However, mortgage servicing rights that are impaired are measured at fair value on a nonrecurring basis. Serviced loan pools are stratified by year of origination and term of the loan, and a valuation model is used to calculate the present value of expected future cash flows for each stratum. When the carrying value of a stratum exceeds its fair value, the stratum is measured at fair value. The valuation model incorporates assumptions that market participants would use in estimating future net servicing income, such as costs to service, a discount rate, custodial earnings rate, ancillary income, default rates and losses, and prepayment speeds. Although some of these assumptions are based on observable market data, other assumptions are based on unobservable estimates of what market participants would use to measure fair value. As a result, the fair value measurement of mortgage servicing rights is considered a Level 3 measurement and represents an income approach to fair value. When market mortgage rates decline, borrowers may have the opportunity to refinance their existing mortgage loans at lower rates, increasing the risk of prepayment of loans on which we maintain mortgage servicing rights. Therefore, declining long term interest rates would decrease the fair value of mortgage servicing rights. Significant unobservable inputs at September 30, 2013 used to measure fair value included: | |||||||||||||||||||||
Direct annual servicing cost per loan | $ | 50 | |||||||||||||||||||
Direct annual servicing cost per loan in process of foreclosure | $ | 500 | |||||||||||||||||||
Weighted average prepayment speed: CPR | 27.02% | ||||||||||||||||||||
Weighted average prepayment speed: PSA | 530.21% | ||||||||||||||||||||
Weighted average discount rate | 7.96% | ||||||||||||||||||||
Asset reinvestment rate | 4.00% | ||||||||||||||||||||
Short-term cost of funds | 0.25% | ||||||||||||||||||||
Escrow inflation adjustment | 1.00% | ||||||||||||||||||||
Servicing cost inflation adjustment | 1.00% | ||||||||||||||||||||
Mortgage rate lock commitments – The fair value of mortgage rate lock commitments is measured on a recurring basis. Fair value is based on current secondary market pricing for delivery of similar loans and the value of originated mortgage servicing rights on loans expected to be delivered, which is considered a Level 2 fair value measurement. | |||||||||||||||||||||
Interest rate swap agreements – Fair values for interest rate swap agreements are based on the amounts required to settle the contracts based on valuations provided by third-party dealers in the contracts, which is considered a Level 2 fair value measurement, and are measured on a recurring basis. | |||||||||||||||||||||
Recurring Fair Value Measurements Using | |||||||||||||||||||||
Quoted Prices in | |||||||||||||||||||||
Active Markets | Significant Other | Significant | |||||||||||||||||||
for Identical | Observable | Unobservable | |||||||||||||||||||
Assets | Inputs | Inputs | |||||||||||||||||||
(dollars in thousands) | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||||||
Assets measured at fair value on a recurring basis at September 30, 2013: | |||||||||||||||||||||
Securities available for sale: | |||||||||||||||||||||
U.S. Treasury and agency debentures | $ | 994 | $ | — | $ | 994 | $ | — | |||||||||||||
U.S. agency issued residential MBS and CMO | 59,175 | — | 59,175 | — | |||||||||||||||||
Privately issued residential MBS and CMO | 114 | — | 114 | — | |||||||||||||||||
Solomon Hess SBA loan fund (CDFI Fund) | 950 | — | 950 | — | |||||||||||||||||
Other equity securities | 47 | — | — | 47 | |||||||||||||||||
Total securities available for sale | 61,280 | — | 61,233 | 47 | |||||||||||||||||
Loans held for sale | 824 | — | 824 | — | |||||||||||||||||
Mortgage rate lock commitments | 26 | — | 26 | — | |||||||||||||||||
Interest rate swap agreements | 361 | — | 361 | — | |||||||||||||||||
Total assets | $ | 62,491 | $ | — | $ | 62,444 | $ | 47 | |||||||||||||
Liabilities – Interest rate swap agreements | $ | 846 | $ | — | $ | 846 | $ | — | |||||||||||||
Assets measured at fair value on a recurring basis at December 31, 2012: | |||||||||||||||||||||
Securities available for sale: | |||||||||||||||||||||
U.S. Treasury and agency debentures | $ | 10,027 | $ | — | $ | 10,027 | $ | — | |||||||||||||
U.S. agency issued residential MBS and CMO | 59,640 | — | 59,640 | — | |||||||||||||||||
Privately issued residential MBS and CMO | 173 | — | 173 | — | |||||||||||||||||
Nonrated commercial paper | 5,500 | — | 5,500 | — | |||||||||||||||||
Other equity securities | 47 | — | — | 47 | |||||||||||||||||
Total securities available for sale | 75,387 | — | 75,340 | 47 | |||||||||||||||||
Loans held for sale | 884 | — | 884 | — | |||||||||||||||||
Mortgage rate lock commitments | 91 | — | 91 | — | |||||||||||||||||
Interest rate swap agreements | 673 | — | 673 | — | |||||||||||||||||
Total assets | $ | 77,035 | $ | — | $ | 76,988 | $ | 47 | |||||||||||||
Liabilities – Interest rate swap agreements | $ | 1,372 | $ | — | $ | 1,372 | $ | — | |||||||||||||
Reconciliation of fair value measurements using significant unobservable inputs: | |||||||||||||||||||||
Securities | |||||||||||||||||||||
Available | |||||||||||||||||||||
(dollars in thousands) | For Sale | ||||||||||||||||||||
Balance at January 1, 2012: | $ | 47 | |||||||||||||||||||
Total realized/unrealized gains and (losses): | |||||||||||||||||||||
Included in earnings | — | ||||||||||||||||||||
Included in other comprehensive income | — | ||||||||||||||||||||
Purchases, maturities, and sales | — | ||||||||||||||||||||
Transferred from Level 2 to Level 3 | — | ||||||||||||||||||||
Transferred to held to maturity classification | — | ||||||||||||||||||||
Balance at September 30, 2012 | $ | 47 | |||||||||||||||||||
Total gains or (losses) for the period included in earnings attributable to the | |||||||||||||||||||||
change in unrealized gains or losses relating to assets still held at September 30, 2012 | $ | — | |||||||||||||||||||
Balance at January 1, 2013 | $ | 47 | |||||||||||||||||||
Total realized/unrealized gains and (losses): | |||||||||||||||||||||
Included in earnings | — | ||||||||||||||||||||
Included in other comprehensive income | — | ||||||||||||||||||||
Purchases, maturities, and sales | — | ||||||||||||||||||||
Transferred from Level 2 to Level 3 | — | ||||||||||||||||||||
Transferred to held to maturity classification | — | ||||||||||||||||||||
Balance at September 30, 2013 | $ | 47 | |||||||||||||||||||
Total gains or (losses) for the period included in earnings attributable to the | |||||||||||||||||||||
change in unrealized gains or losses relating to assets still held at September 30, 2013 | $ | — | |||||||||||||||||||
Nonrecurring Fair Value Measurements Using | |||||||||||||||||||||
Quoted Prices in | |||||||||||||||||||||
Active Markets | Significant Other | Significant | |||||||||||||||||||
for Identical | Observable | Unobservable | |||||||||||||||||||
Assets | Inputs | Inputs | |||||||||||||||||||
($000s) | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||||||
Assets measured at fair value on a nonrecurring basis at September 30, 2013: | |||||||||||||||||||||
Impaired loans | $ | 1,758 | $ | — | $ | 323 | $ | 1,435 | |||||||||||||
Foreclosed assets | 1,606 | — | 695 | 911 | |||||||||||||||||
Mortgage servicing rights | 1,662 | — | — | 1,662 | |||||||||||||||||
Total assets | $ | 5,026 | $ | — | $ | 1,018 | $ | 4,008 | |||||||||||||
Assets measured at fair value on a nonrecurring basis at December 31, 2012: | |||||||||||||||||||||
Impaired loans | $ | 2,973 | $ | — | $ | 328 | $ | 2,645 | |||||||||||||
Foreclosed assets | 1,774 | — | 752 | 1,022 | |||||||||||||||||
Mortgage servicing rights | 1,233 | — | — | 1,233 | |||||||||||||||||
Total assets | $ | 5,980 | $ | — | $ | 1,080 | $ | 4,900 | |||||||||||||
At September 30, 2013, loans with a carrying amount of $2,278 were considered impaired and were written down to their estimated fair value of $1,758 net of a valuation allowance of $520. At December 31, 2012, loans with a carrying amount of $3,955 were considered impaired and were written down to their estimated fair value of $2,973, net of a valuation allowance of $982. Changes in the valuation allowances are reflected through earnings as a component of the provision for loan losses or as a charge-off against the allowance for loan losses. | |||||||||||||||||||||
At September 30, 2013, foreclosed assets with a carrying amount of $2,482 had been written down to a fair value of $1,606, less costs to sell. During the nine months ended September 30, 2013, foreclosed assets with a fair value of $947 were acquired through or in lieu of foreclosure, which is the fair value net of estimated costs to sell. An impairment charge of $298 was recorded as a reduction to earnings during the nine months ended September 30, 2013. | |||||||||||||||||||||
At December 31, 2012, foreclosed assets with a carrying amount of $2,352 had been written down to a fair value of $1,774, less costs to sell. During the nine months ended September 30, 2012, foreclosed assets with a fair value of $568 were acquired through or in lieu of foreclosure, which is the fair value net of estimated costs to sell. An impairment charge of $485 was recorded as a reduction to earnings during the nine months ended September 30, 2012. | |||||||||||||||||||||
At September 30, 2013, mortgage servicing rights with a carrying amount of $1,703 were considered impaired and were written down to their estimated fair value of $1,662, resulting in an impairment allowance of $41. At December 31, 2012, mortgage servicing rights with a carrying amount of $1,513 were considered impaired and were written down to their estimated fair value of $1,233, resulting in an impairment allowance of $280. Changes in the impairment allowances are reflected through earnings as a component of mortgage banking income. | |||||||||||||||||||||
PSB estimates fair value of all financial instruments regardless of whether such instruments are measured at fair value. The following methods and assumptions were used by PSB to estimate fair value of financial instruments not previously discussed. | |||||||||||||||||||||
Cash and cash equivalents – Fair value reflects the carrying value of cash, which is a Level 1 measurement. | |||||||||||||||||||||
Securities held to maturity – Fair value of securities held to maturity is based on dealer quotations on similar securities near period-end, which is considered a Level 2 measurement. Certain debt issued by banks or bank holding companies purchased by PSB as securities held to maturity is valued on a cash flow basis discounted using market rates reflecting credit risk of the borrower, which is considered a Level 3 measurement. | |||||||||||||||||||||
Bank certificates of deposit – Fair value of fixed rate certificates of deposit included in other investments is estimated by discounting future cash flows using current rates at which similar certificates could be purchased, which is a Level 3 measurement. | |||||||||||||||||||||
Loans – Fair value of variable rate loans that reprice frequently are based on carrying values. Loans with an active sale market, such as one- to four-family residential mortgage loans, estimate fair value based on sales of loans with similar structure and credit quality. Fair value of other loans is estimated by discounting future cash flows using current rates at which similar loans would be made to borrowers with similar credit ratings. Fair value of impaired and other nonperforming loans are estimated using discounted expected future cash flows or the fair value of underlying collateral, if applicable. Except for collateral dependent impaired loans valued using an independent appraisal of collateral value, reflecting a Level 2 fair value measurement, fair value of loans is considered to be a Level 3 measurement due to internally developed discounted cash flow measurements. | |||||||||||||||||||||
Federal Home Loan Bank stock – Fair value is the redeemable (carrying) value based on the redemption provisions of the Federal Home Loan Bank, which is considered a Level 3 fair value measurement. | |||||||||||||||||||||
Accrued interest receivable and payable – Fair value approximates the carrying value, which is considered a Level 3 fair value measurement. | |||||||||||||||||||||
Cash value of life insurance – Fair value is based on reported values of the assets by the issuer which are redeemable to the insured, which is considered a Level 1 fair value measurement. | |||||||||||||||||||||
Deposits – Fair value of deposits with no stated maturity, such as demand deposits, savings, and money market accounts, by definition, is the amount payable on demand on the reporting date. Fair value of fixed rate time deposits is estimated using discounted cash flows applying interest rates currently offered on issue of similar time deposits. Use of internal discounted cash flows provides a Level 3 fair value measurement. | |||||||||||||||||||||
FHLB advances and other borrowings – Fair value of fixed rate, fixed term borrowings is estimated by discounting future cash flows using the current rates at which similar borrowings would be made as calculated by the lender or correspondent. Fair value of borrowings with variable rates or maturing within 90 days approximates the carrying value of these borrowings. Fair values based on lender provided settlement provisions are considered a Level 2 fair value measurement. Other borrowings with local customers in the form of repurchase agreements are estimated using internal assessments of discounted future cash flows, which is a Level 3 measurement. | |||||||||||||||||||||
Senior subordinated notes and junior subordinated debentures – Fair value of fixed rate, fixed term notes and debentures are estimated internally by discounting future cash flows using the current rates at which similar borrowings would be made, which is a Level 3 fair value measurement. | |||||||||||||||||||||
The carrying amounts and fair values of PSB’s financial instruments consisted of the following at September 30, 2013: | |||||||||||||||||||||
30-Sep-13 | |||||||||||||||||||||
Carrying | Estimated | Fair Value Hierarchy Level | |||||||||||||||||||
Amount | Fair Value | Level 1 | Level 2 | Level 3 | |||||||||||||||||
Financial assets ($000s): | |||||||||||||||||||||
Cash and cash equivalents | $ | 17,080 | $ | 17,080 | $ | 17,080 | $ | — | $ | — | |||||||||||
Securities | 133,052 | 133,194 | — | 131,350 | 1,844 | ||||||||||||||||
Bank certificates of deposit | 2,481 | 2,528 | — | — | 2,528 | ||||||||||||||||
Net loans receivable and loans held for sale | 517,697 | 521,979 | — | 1,147 | 520,832 | ||||||||||||||||
Accrued interest receivable | 2,257 | 2,257 | — | — | 2,257 | ||||||||||||||||
Mortgage servicing rights | 1,662 | 1,662 | — | — | 1,662 | ||||||||||||||||
Mortgage rate lock commitments | 26 | 26 | — | 26 | — | ||||||||||||||||
FHLB stock | 3,594 | 3,594 | — | — | 3,594 | ||||||||||||||||
Cash surrender value of life insurance | 12,723 | 12,723 | 12,723 | — | — | ||||||||||||||||
Interest rate swap agreements | 361 | 361 | — | 361 | — | ||||||||||||||||
Financial liabilities ($000s): | |||||||||||||||||||||
Deposits | $ | 554,239 | $ | 533,077 | $ | — | $ | — | $ | 533,077 | |||||||||||
FHLB advances | 58,124 | 58,848 | — | 58,848 | — | ||||||||||||||||
Other borrowings | 20,353 | 22,472 | — | 14,489 | 6,788 | ||||||||||||||||
Senior subordinated notes | 4,000 | 3,471 | — | — | 3,471 | ||||||||||||||||
Junior subordinated debentures | 7,732 | 4,461 | — | — | 4,461 | ||||||||||||||||
Interest rate swap agreements | 846 | 846 | — | 846 | — | ||||||||||||||||
Accrued interest payable | 455 | 455 | — | — | 455 | ||||||||||||||||
The carrying amounts and fair values of PSB’s financial instruments consisted of the following at December 31, 2012: | |||||||||||||||||||||
31-Dec-12 | |||||||||||||||||||||
Carrying | Estimated | Fair Value Hierarchy Level | |||||||||||||||||||
Amount | Fair Value | Level 1 | Level 2 | Level 3 | |||||||||||||||||
Financial assets ($000s): | |||||||||||||||||||||
Cash and cash equivalents | $ | 48,847 | $ | 48,847 | $ | 48,847 | $ | — | $ | — | |||||||||||
Securities | 145,209 | 147,751 | — | 145,795 | 1,956 | ||||||||||||||||
Bank certificates of deposit | 4,465 | 4,538 | — | — | 4,538 | ||||||||||||||||
Net loans receivable and loans held for sale | 478,875 | 484,925 | — | 1,212 | 483,713 | ||||||||||||||||
Accrued interest receivable | 2,157 | 2,157 | — | — | 2,157 | ||||||||||||||||
Mortgage servicing rights | 1,233 | 1,233 | — | — | 1,233 | ||||||||||||||||
Mortgage rate lock commitments | 91 | 91 | — | 91 | — | ||||||||||||||||
FHLB stock | 2,506 | 2,506 | — | — | 2,506 | ||||||||||||||||
Cash surrender value of life insurance | 11,813 | 11,813 | 11,813 | — | — | ||||||||||||||||
Interest rate swap agreements | 673 | 673 | — | 673 | — | ||||||||||||||||
Financial liabilities ($000s): | |||||||||||||||||||||
Deposits | $ | 565,442 | $ | 568,014 | $ | — | $ | — | $ | 568,014 | |||||||||||
FHLB advances | 50,124 | 51,590 | — | 51,590 | — | ||||||||||||||||
Other borrowings | 20,728 | 22,118 | — | 14,890 | 7,228 | ||||||||||||||||
Senior subordinated notes | 7,000 | 7,000 | — | — | 7,000 | ||||||||||||||||
Junior subordinated debentures | 7,732 | 4,911 | — | — | 4,911 | ||||||||||||||||
Interest rate swap agreements | 1,372 | 1,372 | — | 1,372 | — | ||||||||||||||||
Accrued interest payable | 697 | 697 | — | — | 697 | ||||||||||||||||
CURRENT_YEAR_AND_COMPARABLE_PR
CURRENT YEAR AND COMPARABLE PRIOR YEAR PERIOD ACCOUNTING CHANGES | 9 Months Ended |
Sep. 30, 2013 | |
Current Year And Comparable Prior Year Period Accounting Changes | ' |
CURRENT YEAR AND COMPARABLE PRIOR YEAR PERIOD ACCOUNTING CHANGES | ' |
NOTE 16 – CURRENT YEAR AND COMPARABLE PRIOR YEAR PERIOD ACCOUNTING CHANGES | |
FASB ASC Topic 210, “Balance Sheet.” In January 2013, clarifications were issued of new authoritative accounting guidance first issued in December 2011 concerning disclosure of information about offsetting and related arrangements associated with derivative instruments. The clarifications and originally issued guidance require additional disclosures associated with offsetting and collateral arrangements with derivative instruments to enable users of PSB’s financial statements to understand the effect of those arrangements on its financial position beginning March 31, 2013. These new disclosures were added as necessary during the quarter ended March 31, 2013 and did not have a significant impact to the reporting of PSB’s financial results upon adoption. | |
FASB ASC Topic 805, “Business Combinations.” In October 2012, new authoritative accounting guidance was issued that addressed accounting for an indemnification asset acquired as a result of a government-assisted acquisition of a financial institution when a subsequent change in cash flows expected to be collected is identified. After identification of the new cash flows, the reporting entity should subsequently account for the change in the measurement of the indemnification asset on the same basis as accounting for the change in the assets subject to the indemnification. Amortization of these changes in value is limited to the remaining contractual term of the indemnification agreement. These new rules became effective for changes in cash flows identified beginning January 1, 2013. Adoption of this new guidance did not have an impact on PSB’s financial statements. | |
FASB ASC Topic 220, “Comprehensive Income.” In February 2013, new authoritative accounting guidance was issued which required PSB to report the effect of significant reclassifications out of accumulated other comprehensive income in a footnote to the financial statements. The disclosure was effective beginning March 31, 2013 on a prospective basis. The change did not have a significant impact on PSB’s financial reporting or results of operations upon adoption. | |
FASB ASC Topic 220, “Comprehensive Income.” In June 2011, new authoritative accounting guidance was approved that required changes to the presentation of comprehensive net income. Effective during the quarter ended March 31, 2012, PSB began to present comprehensive income as a separate financial statement directly after the basic income statement. Adoption of the new presentation standards for comprehensive income did not have any financial impact to PSB’s financial results or operations. | |
FASB ASC Topic 820, “Fair Value Measurements.” In May 2011, new authoritative accounting guidance concerning fair value measurements was issued. Significant provisions of the new guidance now require both domestic and international companies to follow existing United States guidance in measuring fair value. In addition, certain Level 3 unobservable inputs and impacts to fair value from sensitivity of these inputs to changes must be disclosed. Lastly, the level of fair value hierarchy used to estimate fair value of financial instruments not accounted for at fair value on the balance sheet (such as loans receivable and deposits) must be disclosed. These new disclosures were adopted during the quarter ended March 31, 2012 and did not have a significant impact to PSB financial reporting or operations. |
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2013 | |
Subsequent Events [Abstract] | ' |
SUBSEQUENT EVENTS | ' |
NOTE 17 – SUBSEQUENT EVENTS | |
Management has reviewed PSB’s operations for potential disclosure of information or financial statement impacts related to events occurring after September 30, 2013 but prior to the release of these financial statements. Based on the results of this review, no subsequent event disclosures or financial statement impacts to the recently completed quarter are required as of the release date. |
PSB_HOLDINGS_INC_ACQUISITION_O1
PSB HOLDINGS, INC. ACQUISITION OF MARATHON STATE BANK (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Psb Holdings Inc. Acquisition Of Marathon State Bank Tables | ' | ||||||||||||||||
Schedule of Acquisition | ' | ||||||||||||||||
Cash purchase price | $ | 5,505 | |||||||||||||||
Fair value of assets acquired: | |||||||||||||||||
Cash and due from banks | 20,392 | ||||||||||||||||
Securities available for sale | 50,547 | ||||||||||||||||
Loans receivable | 23,760 | ||||||||||||||||
Short-term commercial paper and bankers’ acceptances | 11,713 | ||||||||||||||||
Foreclosed assets | — | ||||||||||||||||
Premises and equipment | 402 | ||||||||||||||||
Core deposit intangible | — | ||||||||||||||||
Accrued interest receivable and other assets | 550 | ||||||||||||||||
Total fair value of assets acquired | 107,364 | ||||||||||||||||
Fair value of liabilities assumed: | |||||||||||||||||
Non-interest bearing deposits | 23,255 | ||||||||||||||||
Interest-bearing deposits | 77,611 | ||||||||||||||||
Accrued interest payable and other liabilities | 142 | ||||||||||||||||
Total fair value of liabilities assumed | 101,008 | ||||||||||||||||
Fair value of net assets acquired | 6,356 | ||||||||||||||||
Gain on bargain purchase | $ | 851 | |||||||||||||||
PSB recorded a total credit mark down of $490 on Marathon’s loan portfolio on the purchase date, or 2.05% of gross purchased loan principal. Purchased impaired loan principal totaled $310 on which a $21 credit write-down was recorded. Due to the insignificant amount of total purchased impaired loans, the entire $490 credit mark down will be accreted to income as a yield adjustment based on contractual cash flows over the remaining life of the purchased loans. | |||||||||||||||||
Results of operations of the quarterly and year to date periods ended September 30, 2013: | |||||||||||||||||
Quarter ended September 30, 2013 | |||||||||||||||||
Net interest | Noninterest | Net | Earnings | ||||||||||||||
($000s) | income | income | income | per share | |||||||||||||
PSB Holdings, Inc. | $ | 5,422 | $ | 1,411 | $ | 13 | $ | 0.01 | |||||||||
Pro forma Totals | $ | 5,422 | $ | 1,411 | $ | 13 | $ | 0.01 | |||||||||
Nine months ended September 30, 2013 | |||||||||||||||||
Net interest | Noninterest | Net | Earnings | ||||||||||||||
($000s) | income | income | income | per share | |||||||||||||
PSB Holdings, Inc. | $ | 15,940 | $ | 4,349 | $ | 3,183 | $ | 1.93 | |||||||||
Pro forma Totals | $ | 15,940 | $ | 4,349 | $ | 3,183 | $ | 1.93 | |||||||||
Schedule of Pro Forma Summary Financial Information Including Acquisition of Marathon State Bank | ' | ||||||||||||||||
Pro forma combined results of operations as if combination occurred at the beginning of the quarterly and year to date periods ended September 30, 2012: | |||||||||||||||||
Quarter ended September 30, 2012 (pro forma combined at beginning of period) | |||||||||||||||||
Net interest | Noninterest | Net | Earnings | ||||||||||||||
($000s) | income | income | income | per share | |||||||||||||
PSB Holdings, Inc. | $ | 4,813 | $ | 1,436 | $ | 1,358 | $ | 0.82 | |||||||||
Marathon State Bank | 350 | 8 | (132 | ) | (0.08 | ) | |||||||||||
Pro forma Totals | $ | 5,163 | $ | 1,444 | $ | 1,226 | $ | 0.74 | |||||||||
Nine months ended September 30, 2012 (pro forma combined at beginning of period) | |||||||||||||||||
Net interest | Noninterest | Net | Earnings | ||||||||||||||
($000s) | income | income | income | per share | |||||||||||||
PSB Holdings, Inc. | $ | 14,376 | $ | 4,147 | $ | 3,902 | $ | 2.35 | |||||||||
Marathon State Bank | 1,158 | 880 | 468 | 0.28 | |||||||||||||
Pro forma Totals | $ | 15,534 | $ | 5,027 | $ | 4,370 | $ | 2.63 |
SECURITIES_Tables
SECURITIES (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Securities Tables | ' | ||||||||||||||||
Schedule of amortized cost and estimated fair value of investment securities | ' | ||||||||||||||||
The amortized cost and estimated fair value of investment securities are as follows: | |||||||||||||||||
Gross | Gross | Estimated | |||||||||||||||
Amortized | Unrealized | Unrealized | Fair | ||||||||||||||
30-Sep-13 | Cost | Gains | Losses | Value | |||||||||||||
Securities available for sale | |||||||||||||||||
U.S. Treasury securities and obligations of U.S. government corporations and agencies | $ | 1,003 | — | $ | 9 | $ | 994 | ||||||||||
U.S. agency issued residential mortgage-backed securities | 20,084 | 541 | 394 | 20,231 | |||||||||||||
U.S. agency issued residential collateralized mortgage obligations | 38,785 | 575 | 416 | 38,944 | |||||||||||||
Privately issued residential collateralized mortgage obligations | 111 | 3 | — | 114 | |||||||||||||
Nonrated SBA loan fund | 950 | — | — | 950 | |||||||||||||
Other equity securities | 47 | — | — | 47 | |||||||||||||
Totals | $ | 60,980 | $ | 1,119 | $ | 819 | $ | 61,280 | |||||||||
Securities held to maturity | |||||||||||||||||
Obligations of states and political subdivisions | $ | 69,851 | $ | 1,077 | $ | 811 | $ | 70,117 | |||||||||
Nonrated trust preferred securities | 1,520 | 33 | 163 | 1,390 | |||||||||||||
Nonrated senior subordinated notes | 401 | 6 | — | 407 | |||||||||||||
Totals | $ | 71,772 | $ | 1,116 | $ | 974 | $ | 71,914 | |||||||||
Gross | Gross | Estimated | |||||||||||||||
Amortized | Unrealized | Unrealized | Fair | ||||||||||||||
31-Dec-12 | Cost | Gains | Losses | Value | |||||||||||||
Securities available for sale | |||||||||||||||||
U.S. Treasury securities and obligations of U.S. government corporations and agencies | $ | 9,998 | $ | 29 | $ | — | $ | 10,027 | |||||||||
U.S. agency issued residential mortgage-backed securities | 13,550 | 847 | — | 14,397 | |||||||||||||
U.S. agency issued residential collateralized mortgage obligations | 44,544 | 749 | 50 | 45,243 | |||||||||||||
Privately issued residential collateralized mortgage obligations | 168 | 5 | — | 173 | |||||||||||||
Obligations of states and political subdivisions | — | — | — | — | |||||||||||||
Nonrated commercial paper | 5,500 | — | — | 5,500 | |||||||||||||
Other equity securities | 47 | — | — | 47 | |||||||||||||
Totals | $ | 73,807 | $ | 1,630 | $ | 50 | $ | 75,387 | |||||||||
Securities held to maturity | |||||||||||||||||
Obligations of states and political subdivisions | $ | 67,915 | $ | 2,581 | $ | 41 | $ | 70,455 | |||||||||
Nonrated trust preferred securities | 1,505 | 60 | 66 | 1,499 | |||||||||||||
Nonrated senior subordinated notes | 402 | 8 | — | 410 | |||||||||||||
Totals | $ | 69,822 | $ | 2,649 | $ | 107 | $ | 72,364 | |||||||||
LOANS_RECEIVABLE_AND_ALLOWANCE1
LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||||||
Loans Receivable And Allowance For Loan Losses Tables | ' | ||||||||||||||||||||||||||||
Schedule of composition of loans categorized by the type of loan | ' | ||||||||||||||||||||||||||||
The composition of loans categorized by the type of the loan, is as follows: | |||||||||||||||||||||||||||||
30-Sep-13 | 31-Dec-12 | ||||||||||||||||||||||||||||
Commercial, industrial, and municipal | $ | 143,396 | $ | 132,633 | |||||||||||||||||||||||||
Commercial real estate mortgage | 208,544 | 183,818 | |||||||||||||||||||||||||||
Commercial construction and development | 13,592 | 28,482 | |||||||||||||||||||||||||||
Residential real estate mortgage | 124,469 | 105,579 | |||||||||||||||||||||||||||
Residential construction and development | 15,033 | 15,247 | |||||||||||||||||||||||||||
Residential real estate home equity | 20,346 | 21,756 | |||||||||||||||||||||||||||
Consumer and individual | 4,312 | 4,715 | |||||||||||||||||||||||||||
Subtotals – Gross loans | 529,692 | 492,230 | |||||||||||||||||||||||||||
Loans in process of disbursement | (5,993 | ) | (7,039 | ) | |||||||||||||||||||||||||
Subtotals – Disbursed loans | 523,699 | 485,191 | |||||||||||||||||||||||||||
Net deferred loan costs | 300 | 231 | |||||||||||||||||||||||||||
Allowance for loan losses | (7,126 | ) | (7,431 | ) | |||||||||||||||||||||||||
Net loans receivable | $ | 516,873 | $ | 477,991 | |||||||||||||||||||||||||
Schedule of summary of impaired loans | ' | ||||||||||||||||||||||||||||
The following is a summary of information pertaining to impaired loans at period-end: | |||||||||||||||||||||||||||||
30-Sep-13 | 31-Dec-12 | ||||||||||||||||||||||||||||
Impaired loans without a valuation allowance | $ | 9,463 | $ | 3,410 | |||||||||||||||||||||||||
Impaired loans with a valuation allowance | 6,173 | 9,029 | |||||||||||||||||||||||||||
Total impaired loans before valuation allowances | 15,636 | 12,439 | |||||||||||||||||||||||||||
Valuation allowance related to impaired loans | 2,274 | 2,434 | |||||||||||||||||||||||||||
Net impaired loans | $ | 13,362 | $ | 10,005 | |||||||||||||||||||||||||
Schedule of allowance for loan losses | ' | ||||||||||||||||||||||||||||
Activity in the allowance for loans losses during the nine months ended September 30, 2013 follows: | |||||||||||||||||||||||||||||
Allowance for loan losses: | Commercial | Commercial | Residential | Consumer | Unallocated | Total | |||||||||||||||||||||||
Real Estate | Real Estate | ||||||||||||||||||||||||||||
Beginning Balance | $ | 3,014 | $ | 2,803 | $ | 1,511 | $ | 103 | $ | — | $ | 7,431 | |||||||||||||||||
Provision | 3,553 | 226 | 198 | 38 | — | 4,015 | |||||||||||||||||||||||
Recoveries | 2 | 30 | 3 | 11 | — | 46 | |||||||||||||||||||||||
Charge offs | (3,568 | ) | (174 | ) | (574 | ) | (50 | ) | — | (4,366 | ) | ||||||||||||||||||
Ending balance | $ | 3,001 | $ | 2,885 | $ | 1,138 | $ | 102 | $ | — | $ | 7,126 | |||||||||||||||||
Individually evaluated for impairment | $ | 1,232 | $ | 821 | $ | 196 | $ | 25 | $ | — | $ | 2,274 | |||||||||||||||||
Collectively evaluated for impairment | $ | 1,769 | $ | 2,064 | $ | 942 | $ | 77 | $ | — | $ | 4,852 | |||||||||||||||||
Loans receivable (gross): | |||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 8,228 | $ | 5,222 | $ | 2,161 | $ | 25 | $ | — | $ | 15,636 | |||||||||||||||||
Collectively evaluated for impairment | $ | 135,168 | $ | 216,914 | $ | 157,687 | $ | 4,287 | $ | — | $ | 514,056 | |||||||||||||||||
Activity in the allowance for loans losses during the nine months ended September 30, 2012, follows: | |||||||||||||||||||||||||||||
Allowance for loan losses: | Commercial | Commercial | Residential | Consumer | Unallocated | Total | |||||||||||||||||||||||
Real Estate | Real Estate | ||||||||||||||||||||||||||||
Beginning Balance | $ | 3,406 | $ | 3,175 | $ | 1,242 | $ | 118 | $ | — | $ | 7,941 | |||||||||||||||||
Provision | 233 | (458 | ) | 530 | 20 | — | 325 | ||||||||||||||||||||||
Recoveries | 6 | 4 | 3 | 4 | — | 17 | |||||||||||||||||||||||
Charge offs | (105 | ) | (234 | ) | (462 | ) | (51 | ) | — | (852 | ) | ||||||||||||||||||
Ending balance | $ | 3,540 | $ | 2,487 | $ | 1,313 | $ | 91 | $ | — | $ | 7,431 | |||||||||||||||||
Individually evaluated for impairment | $ | 1,625 | $ | 570 | $ | 336 | $ | 6 | $ | — | $ | 2,537 | |||||||||||||||||
Collectively evaluated for impairment | $ | 1,915 | $ | 1,917 | $ | 977 | $ | 85 | $ | — | $ | 4,894 | |||||||||||||||||
Loans receivable (gross): | |||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 5,741 | $ | 8,955 | $ | 2,543 | $ | 15 | $ | — | $ | 17,254 | |||||||||||||||||
Collectively evaluated for impairment | $ | 132,280 | $ | 200,772 | $ | 131,541 | $ | 5,287 | $ | — | $ | 469,880 | |||||||||||||||||
Schedule of commercial credit exposure | ' | ||||||||||||||||||||||||||||
The commercial credit exposure based on internally assigned credit grade at September 30, 2013, follows: | |||||||||||||||||||||||||||||
Commercial | Construction | ||||||||||||||||||||||||||||
Commercial | Real Estate | & Development | Agricultural | Government | Total | ||||||||||||||||||||||||
High quality (risk rating 1) | $ | 51 | $ | — | $ | — | $ | — | $ | — | $ | 51 | |||||||||||||||||
Minimal risk (2) | 33,663 | 19,674 | 75 | 1,206 | 83 | 54,701 | |||||||||||||||||||||||
Average risk (3) | 54,473 | 139,442 | 8,399 | 2,657 | 8,401 | 213,372 | |||||||||||||||||||||||
Acceptable risk (4) | 23,801 | 35,566 | 2,985 | 396 | 367 | 63,115 | |||||||||||||||||||||||
Watch risk (5) | 9,180 | 7,906 | 1,633 | — | — | 18,719 | |||||||||||||||||||||||
Substandard risk (6) | 890 | 876 | 358 | — | — | 2,124 | |||||||||||||||||||||||
Impaired loans (7) | 4,960 | 5,080 | 142 | 178 | 3,090 | 13,450 | |||||||||||||||||||||||
Total | $ | 127,018 | $ | 208,544 | $ | 13,592 | $ | 4,437 | $ | 11,941 | $ | 365,532 | |||||||||||||||||
The commercial credit exposure based on internally assigned credit grade at December 31, 2012, follows: | |||||||||||||||||||||||||||||
Commercial | Construction | ||||||||||||||||||||||||||||
Commercial | Real Estate | & Development | Agricultural | Government | Total | ||||||||||||||||||||||||
High quality (risk rating 1) | $ | 38 | $ | — | $ | — | $ | — | $ | — | $ | 38 | |||||||||||||||||
Minimal risk (2) | 16,360 | 20,193 | 305 | 559 | 1,575 | 38,992 | |||||||||||||||||||||||
Average risk (3) | 51,846 | 103,454 | 22,573 | 3,336 | 12,550 | 193,759 | |||||||||||||||||||||||
Acceptable risk (4) | 32,002 | 45,699 | 3,318 | 216 | — | 81,235 | |||||||||||||||||||||||
Watch risk (5) | 8,271 | 8,291 | 1,757 | — | — | 18,319 | |||||||||||||||||||||||
Substandard risk (6) | 617 | 2,179 | 327 | — | — | 3,123 | |||||||||||||||||||||||
Impaired loans (7) | 5,109 | 4,002 | 202 | 154 | — | 9,467 | |||||||||||||||||||||||
Total | $ | 114,243 | $ | 183,818 | $ | 28,482 | $ | 4,265 | $ | 14,125 | $ | 344,933 | |||||||||||||||||
Schedule of consumer credit exposure | ' | ||||||||||||||||||||||||||||
The consumer credit exposure based on payment activity and internally assigned credit grade at September 30, 2013, follows: | |||||||||||||||||||||||||||||
Residential- | Residential- | Construction and | |||||||||||||||||||||||||||
Prime | HELOC | Development | Consumer | Total | |||||||||||||||||||||||||
Performing | $ | 122,794 | $ | 19,908 | $ | 14,985 | $ | 4,287 | $ | 161,974 | |||||||||||||||||||
Impaired loans | 1,675 | 438 | 48 | 25 | 2,186 | ||||||||||||||||||||||||
Total | $ | 124,469 | $ | 20,346 | $ | 15,033 | $ | 4,312 | $ | 164,160 | |||||||||||||||||||
The consumer credit exposure based on payment activity and internally assigned credit grade at December 31, 2012, follows: | |||||||||||||||||||||||||||||
Residential- | Residential- | Construction and | |||||||||||||||||||||||||||
Prime | HELOC | Development | Consumer | Total | |||||||||||||||||||||||||
Performing | $ | 103,292 | $ | 21,250 | $ | 15,094 | $ | 4,689 | $ | 144,325 | |||||||||||||||||||
Impaired loans | 2,287 | 506 | 153 | 26 | 2,972 | ||||||||||||||||||||||||
Total | $ | 105,579 | $ | 21,756 | $ | 15,247 | $ | 4,715 | $ | 147,297 | |||||||||||||||||||
Schedule of payment age analysis of loans receivable | ' | ||||||||||||||||||||||||||||
The payment age analysis of loans receivable disbursed at September 30, 2013, follows: | |||||||||||||||||||||||||||||
30-59 | 60-89 | 90+ | Total | Total | 90+ and | ||||||||||||||||||||||||
Loan Class | Days | Days | Days | Past Due | Current | Loans | Accruing | ||||||||||||||||||||||
Commercial: | |||||||||||||||||||||||||||||
Commercial and industrial | $ | 567 | $ | 423 | $ | 838 | $ | 1,828 | $ | 125,190 | $ | 127,018 | $ | — | |||||||||||||||
Agricultural | — | — | 178 | 178 | 4,259 | 4,437 | — | ||||||||||||||||||||||
Government | — | — | — | — | 11,941 | 11,941 | — | ||||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||
Commercial real estate | 272 | 395 | 1,244 | 1,911 | 206,633 | 208,544 | — | ||||||||||||||||||||||
Commercial construction and development | — | — | — | — | 11,747 | 11,747 | — | ||||||||||||||||||||||
Residential real estate: | |||||||||||||||||||||||||||||
Residential – Prime | 245 | — | 325 | 570 | 123,899 | 124,469 | — | ||||||||||||||||||||||
Residential – HELOC | 90 | 18 | 266 | 374 | 19,972 | 20,346 | — | ||||||||||||||||||||||
Residential – construction and development | — | — | — | — | 10,885 | 10,885 | — | ||||||||||||||||||||||
Consumer | 7 | 2 | 9 | 18 | 4,294 | 4,312 | — | ||||||||||||||||||||||
Total | $ | 1,181 | $ | 838 | $ | 2,860 | $ | 4,879 | $ | 518,820 | $ | 523,699 | $ | — | |||||||||||||||
The payment age analysis of loans receivable disbursed at December 31, 2012, follows: | |||||||||||||||||||||||||||||
30-59 | 60-89 | 90+ | Total | Total | 90+ and | ||||||||||||||||||||||||
Loan Class | Days | Days | Days | Past Due | Current | Loans | Accruing | ||||||||||||||||||||||
Commercial: | |||||||||||||||||||||||||||||
Commercial and industrial | $ | 375 | $ | 83 | $ | 1,795 | $ | 2,253 | $ | 111,990 | $ | 114,243 | $ | — | |||||||||||||||
Agricultural | — | 154 | — | 154 | 4,111 | 4,265 | — | ||||||||||||||||||||||
Government | — | — | — | — | 14,125 | 14,125 | — | ||||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||
Commercial real estate | 936 | 76 | 1,028 | 2,040 | 181,778 | 183,818 | — | ||||||||||||||||||||||
Commercial construction and development | — | 20 | — | 20 | 25,340 | 25,360 | — | ||||||||||||||||||||||
Residential real estate: | |||||||||||||||||||||||||||||
Residential – prime | 950 | 274 | 1,344 | 2,568 | 103,011 | 105,579 | — | ||||||||||||||||||||||
Residential – HELOC | 64 | — | 335 | 399 | 21,357 | 21,756 | — | ||||||||||||||||||||||
Residential – construction and development | — | — | 133 | 133 | 11,197 | 11,330 | — | ||||||||||||||||||||||
Consumer | 21 | 3 | 15 | 39 | 4,676 | 4,715 | — | ||||||||||||||||||||||
Total | $ | 2,346 | $ | 610 | $ | 4,650 | $ | 7,606 | $ | 477,585 | $ | 485,191 | $ | — | |||||||||||||||
Schedule of impaired loans, by loan class | ' | ||||||||||||||||||||||||||||
Impaired loans as of September 30, 2013, and during the nine months then ended, by loan class, follows: | |||||||||||||||||||||||||||||
Unpaid | Average | Interest | |||||||||||||||||||||||||||
Principal | Related | Recorded | Recorded | Income | |||||||||||||||||||||||||
Balance | Allowance | Investment | Investment | Recognized | |||||||||||||||||||||||||
With no related allowance recorded: | |||||||||||||||||||||||||||||
Commercial & industrial | $ | 2,748 | $ | — | $ | 2,620 | $ | 2,052 | $ | 80 | |||||||||||||||||||
Commercial real estate | 2,708 | — | 2,513 | 1,808 | 74 | ||||||||||||||||||||||||
Commercial construction & development | 2 | — | — | — | — | ||||||||||||||||||||||||
Government | 3,090 | 3,090 | 1,545 | 77 | |||||||||||||||||||||||||
Residential – prime | 1,314 | — | 1,160 | 992 | 7 | ||||||||||||||||||||||||
Residential – HELOC | 80 | — | 80 | 40 | 2 | ||||||||||||||||||||||||
With an allowance recorded: | |||||||||||||||||||||||||||||
Commercial & industrial | $ | 2,576 | $ | 1,153 | $ | 2,340 | $ | 2,983 | $ | 42 | |||||||||||||||||||
Commercial real estate | 2,638 | 780 | 2,567 | 2,733 | 71 | ||||||||||||||||||||||||
Commercial construction & development | 144 | 41 | 142 | 172 | 6 | ||||||||||||||||||||||||
Agricultural | 179 | 79 | 178 | 166 | — | ||||||||||||||||||||||||
Residential – prime | 529 | 112 | 515 | 989 | 3 | ||||||||||||||||||||||||
Residential – HELOC | 370 | 76 | 358 | 432 | 3 | ||||||||||||||||||||||||
Residential construction & development | 50 | 8 | 48 | 101 | 1 | ||||||||||||||||||||||||
Consumer | 23 | 25 | 25 | 26 | — | ||||||||||||||||||||||||
Totals: | |||||||||||||||||||||||||||||
Commercial & industrial | $ | 5,324 | $ | 1,153 | $ | 4,960 | $ | 5,035 | $ | 122 | |||||||||||||||||||
Commercial real estate | 5,346 | 780 | 5,080 | 4,541 | 145 | ||||||||||||||||||||||||
Commercial construction & development | 146 | 41 | 142 | 172 | 6 | ||||||||||||||||||||||||
Agricultural | 179 | 79 | 178 | 166 | — | ||||||||||||||||||||||||
Government | 3,090 | — | 3,090 | 1,545 | 77 | ||||||||||||||||||||||||
Residential – prime | 1,843 | 112 | 1,675 | 1,981 | 10 | ||||||||||||||||||||||||
Residential – HELOC | 450 | 76 | 438 | 472 | 5 | ||||||||||||||||||||||||
Residential construction & development | 50 | 8 | 48 | 101 | 1 | ||||||||||||||||||||||||
Consumer | 23 | 25 | 25 | 26 | — | ||||||||||||||||||||||||
The impaired loans at December 31, 2012, and during the year then ended, by loan class, follows: | |||||||||||||||||||||||||||||
Unpaid | Average | Interest | |||||||||||||||||||||||||||
Principal | Related | Recorded | Recorded | Income | |||||||||||||||||||||||||
Balance | Allowance | Investment | Investment | Recognized | |||||||||||||||||||||||||
With no related allowance recorded: | |||||||||||||||||||||||||||||
Commercial and industrial | $ | 1,521 | $ | — | $ | 1,483 | $ | 1,545 | $ | 88 | |||||||||||||||||||
Commercial real estate | 1,176 | — | 1,103 | 2,405 | 194 | ||||||||||||||||||||||||
Commercial construction and development | — | — | — | — | 33 | ||||||||||||||||||||||||
Residential – Prime | 881 | — | 824 | 493 | 9 | ||||||||||||||||||||||||
Residential – HELOC | — | — | — | — | 3 | ||||||||||||||||||||||||
With an allowance recorded: | |||||||||||||||||||||||||||||
Commercial and industrial | $ | 3,960 | $ | 1,287 | $ | 3,626 | $ | 4,238 | $ | 62 | |||||||||||||||||||
Commercial real estate | 3,035 | 643 | 2,899 | 3,303 | 105 | ||||||||||||||||||||||||
Commercial construction and development | 205 | 31 | 202 | 427 | 21 | ||||||||||||||||||||||||
Agricultural | 154 | 40 | 154 | 91 | 10 | ||||||||||||||||||||||||
Residential – Prime | 1,511 | 277 | 1,463 | 1,746 | 22 | ||||||||||||||||||||||||
Residential – HELOC | 510 | 126 | 506 | 387 | 15 | ||||||||||||||||||||||||
Residential construction and development | 153 | 4 | 153 | 149 | 5 | ||||||||||||||||||||||||
Consumer | 26 | 26 | 26 | 48 | 2 | ||||||||||||||||||||||||
Totals: | |||||||||||||||||||||||||||||
Commercial and industrial | $ | 5,481 | $ | 1,287 | $ | 5,109 | $ | 5,783 | $ | 150 | |||||||||||||||||||
Commercial real estate | 4,211 | 643 | 4,002 | 5,708 | 299 | ||||||||||||||||||||||||
Commercial construction and development | 205 | 31 | 202 | 427 | 54 | ||||||||||||||||||||||||
Agricultural | 154 | 40 | 154 | 91 | 10 | ||||||||||||||||||||||||
Residential – Prime | 2,392 | 277 | 2,287 | 2,239 | 31 | ||||||||||||||||||||||||
Residential – HELOC | 510 | 126 | 506 | 387 | 18 | ||||||||||||||||||||||||
Residential construction and development | 153 | 4 | 153 | 149 | 5 | ||||||||||||||||||||||||
Consumer | 26 | 26 | 26 | 48 | 2 | ||||||||||||||||||||||||
Schedule of loans on nonaccrual status | ' | ||||||||||||||||||||||||||||
Loans on nonaccrual status at period-end, follows: | |||||||||||||||||||||||||||||
30-Sep-13 | 31-Dec-12 | ||||||||||||||||||||||||||||
Commercial: | |||||||||||||||||||||||||||||
Commercial and industrial | $ | 2,191 | $ | 3,023 | |||||||||||||||||||||||||
Agricultural | 178 | 154 | |||||||||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||
Commercial real estate | 3,003 | 2,001 | |||||||||||||||||||||||||||
Commercial construction and development | 18 | 1 | |||||||||||||||||||||||||||
Residential real estate: | |||||||||||||||||||||||||||||
Residential – prime | 1,265 | 2,021 | |||||||||||||||||||||||||||
Residential – HELOC | 332 | 365 | |||||||||||||||||||||||||||
Residential construction and development | 30 | 133 | |||||||||||||||||||||||||||
Consumer | 19 | 17 | |||||||||||||||||||||||||||
Total | $ | 7,036 | $ | 7,715 | |||||||||||||||||||||||||
Schedule of modifications of troubled debt | ' | ||||||||||||||||||||||||||||
The following table presents information concerning modifications of troubled debt made during the quarter ended September 30, 2013: | |||||||||||||||||||||||||||||
Pre-modification | Post-modification | ||||||||||||||||||||||||||||
Number of | outstanding recorded | outstanding recorded | |||||||||||||||||||||||||||
As of September 30, 2013 ($000s) | contracts | investment | investment at period-end | ||||||||||||||||||||||||||
Commercial & industrial | 1 | $ | 75 | $ | 75 | ||||||||||||||||||||||||
Commercial real estate | 1 | $ | 82 | $ | 81 | ||||||||||||||||||||||||
Residential real estate – prime | 4 | $ | 777 | $ | 774 | ||||||||||||||||||||||||
The following table presents information concerning modifications of troubled debt made during the quarter ended September 30, 2012: | |||||||||||||||||||||||||||||
Pre-modification | Post-modification | ||||||||||||||||||||||||||||
Number of | outstanding recorded | outstanding recorded | |||||||||||||||||||||||||||
As of September 30, 2012 ($000s) | contracts | investment | investment at period-end | ||||||||||||||||||||||||||
Commercial & industrial | 3 | $ | 481 | $ | 475 | ||||||||||||||||||||||||
Residential real estate – prime | 1 | $ | 121 | $ | 89 | ||||||||||||||||||||||||
The following table presents information concerning modifications of troubled debt made during the nine months ended September 30, 2013: | |||||||||||||||||||||||||||||
Pre-modification | Post-modification | ||||||||||||||||||||||||||||
Number of | outstanding recorded | outstanding recorded | |||||||||||||||||||||||||||
As of September 30, 2013 ($000s) | contracts | investment | investment at period-end | ||||||||||||||||||||||||||
Commercial & industrial | 4 | $ | 471 | $ | 369 | ||||||||||||||||||||||||
Commercial real estate | 3 | $ | 303 | $ | 288 | ||||||||||||||||||||||||
Residential real estate – prime | 5 | $ | 867 | $ | 862 | ||||||||||||||||||||||||
The following table presents information concerning modifications of troubled debt made during the nine months ended September 30, 2012: | |||||||||||||||||||||||||||||
Pre-modification | Post-modification | ||||||||||||||||||||||||||||
Number of | outstanding recorded | outstanding recorded | |||||||||||||||||||||||||||
As of September 30, 2012 ($000s) | contracts | investment | investment at period-end | ||||||||||||||||||||||||||
Commercial & industrial | 6 | $ | 661 | $ | 637 | ||||||||||||||||||||||||
Commercial real estate | 2 | $ | 527 | $ | 508 | ||||||||||||||||||||||||
Residential real estate – prime | 1 | $ | 121 | $ | 89 | ||||||||||||||||||||||||
The following table outlines past troubled debt restructurings that subsequently defaulted within twelve months of the last restructuring date. For purposes of this table, default is defined as 90 days or more past due on restructured payments. | |||||||||||||||||||||||||||||
Default during the quarter ended | Number of | Recorded | |||||||||||||||||||||||||||
September 30, 2013 ($000s) | contracts | Investment | |||||||||||||||||||||||||||
Commercial & industrial | 1 | $ | 172 | ||||||||||||||||||||||||||
Default during the nine months ended | Number of | Recorded | |||||||||||||||||||||||||||
September 30, 2013 ($000s) | contracts | Investment | |||||||||||||||||||||||||||
Commercial and industrial | 1 | $ | 172 | ||||||||||||||||||||||||||
Commercial real estate | 1 | $ | 81 | ||||||||||||||||||||||||||
Residential – prime | 1 | $ | 88 | ||||||||||||||||||||||||||
Default during the quarter ended | Number of | Recorded | |||||||||||||||||||||||||||
September 30, 2012 ($000s) | contracts | Investment | |||||||||||||||||||||||||||
Commercial real estate | 1 | $ | 45 | ||||||||||||||||||||||||||
Default during the nine months ended | Number of | Recorded | |||||||||||||||||||||||||||
September 30, 2012 ($000s) | contracts | Investment | |||||||||||||||||||||||||||
Commercial & industrial | 1 | $ | — | ||||||||||||||||||||||||||
Commercial real estate | 1 | $ | 45 | ||||||||||||||||||||||||||
FORECLOSED_ASSETS_Tables
FORECLOSED ASSETS (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Foreclosed Assets Tables | ' | ||||||||||||||||
Schedule of Foreclosed Assets | ' | ||||||||||||||||
A summary of activity in foreclosed assets is as follows: | |||||||||||||||||
Three months ended | Nine months ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Balance at beginning of period | $ | 1,336 | $ | 2,642 | $ | 1,774 | $ | 2,939 | |||||||||
Transfer of loans at net realizable value to foreclosed assets | 538 | 160 | 947 | 568 | |||||||||||||
Sale proceeds | (47 | ) | (172 | ) | (698 | ) | (580 | ) | |||||||||
Loans made on sale of foreclosed assets | (100 | ) | — | (207 | ) | (140 | ) | ||||||||||
Net gain (loss) from sale of foreclosed assets | 28 | (1 | ) | 88 | 47 | ||||||||||||
Provision for write-down charged to operations | (149 | ) | (280 | ) | (298 | ) | (485 | ) | |||||||||
Balance at end of period | $ | 1,606 | $ | 2,349 | $ | 1,606 | $ | 2,349 | |||||||||
DEPOSITS_Tables
DEPOSITS (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Deposits Tables | ' | ||||||||
Schedule of distribution of deposits | ' | ||||||||
The distribution of deposits at period end is as follows: | |||||||||
30-Sep-13 | 31-Dec-12 | ||||||||
Non-interest bearing demand | $ | 92,141 | $ | 89,819 | |||||
Interest bearing demand (NOWs) | 111,993 | 131,404 | |||||||
Savings | 55,638 | 53,799 | |||||||
Money market | 125,508 | 124,501 | |||||||
Retail and local time | 103,270 | 111,462 | |||||||
Broker and national time | 65,689 | 54,457 | |||||||
Total deposits | $ | 554,239 | $ | 565,442 |
OTHER_BORROWINGS_Tables
OTHER BORROWINGS (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Other Borrowings Tables | ' | ||||||||||||||||
Schedule of other borrowings | ' | ||||||||||||||||
Other borrowings consist of the following obligations at September 30, 2013, and December 31, 2012: | |||||||||||||||||
30-Sep-13 | 31-Dec-12 | ||||||||||||||||
Federal funds purchased | $ | — | $ | — | |||||||||||||
Short-term repurchase agreements | 5,353 | 7,228 | |||||||||||||||
Bank stock term loan | 1,500 | — | |||||||||||||||
Wholesale structured repurchase agreements | 13,500 | 13,500 | |||||||||||||||
Total other borrowings | $ | 20,353 | $ | 20,728 | |||||||||||||
he following information relates to securities sold under repurchase agreements and other borrowings: | |||||||||||||||||
Three months ended | Nine months ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
As of end of period – weighted average rate | 3.09% | 3.04% | 3.09% | 3.04% | |||||||||||||
For the period: | |||||||||||||||||
Highest month-end balance | $ | 24,100 | $ | 19,273 | $ | 24,100 | $ | 19,934 | |||||||||
Daily average balance | $ | 22,797 | $ | 18,725 | $ | 22,368 | $ | 19,166 | |||||||||
Weighted average rate | 2.87% | 3.19% | 2.93% | 3.12% |
DERIVATIVE_INSTRUMENTS_AND_HED1
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables) | 9 Months Ended | ||
Sep. 30, 2013 | |||
Derivative Instruments And Hedging Activities Tables | ' | ||
Schedule of Interest Rate Swaps | ' | ||
At period end, the following interest rate swaps to hedge variable-rate debt were outstanding: | |||
30-Sep-13 | 31-Dec-12 | ||
Notional amount | $7,500 | $7,500 | |
Pay fixed rate | 2.72% | 2.72% | |
Receive variable rate | 0.25% | 0.31% | |
Maturity | Sep-17 | Sep-17 | |
Unrealized fair value gain (loss) | ($485) | ($699) | |
At period end, the following floating interest rate swaps were outstanding with customers: | |||
30-Sep-13 | 31-Dec-12 | ||
Notional amount | $14,488 | $14,979 | |
Receive fixed rate (average) | 1.99% | 1.99% | |
Pay variable rate (average) | 0.17% | 0.21% | |
Maturity | March 2015 – Oct. 2021 | March 2015 – Oct. 2021 | |
Weighted average remaining term | 3.2 years | 3.9 years | |
Unrealized fair value gain (loss) | $361 | $673 | |
At period end, the following offsetting fixed interest rate swaps were outstanding with correspondent banks: | |||
30-Sep-13 | 31-Dec-12 | ||
Notional amount | $14,488 | $14,979 | |
Pay fixed rate (average) | 1.99% | 1.99% | |
Receive variable rate (average) | 0.17% | 0.21% | |
Maturity | March 2015 – Oct. 2021 | March 2015 – Oct. 2021 | |
Weighted average remaining term | 3.2 years | 3.9 years | |
Unrealized fair value gain (loss) | ($361) | ($673) |
INCOME_TAX_EFFECTS_ON_ITEMS_OF1
INCOME TAX EFFECTS ON ITEMS OF COMPREHENSIVE INCOME (LOSS) (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Income Tax Effects On Items Of Comprehensive Income Loss Tables | ' | ||||||||||||||||
Schedule of Income Tax Effects of Comprehensive Income (Loss) | ' | ||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
30-Sep-13 | 30-Sep-13 | ||||||||||||||||
Period ended September 30, 2013 | Pre-tax | Income Tax | Pre-tax | Income Tax | |||||||||||||
(dollars in thousands) | Inc. (Exp.) | Exp. (Credit) | Inc. (Exp.) | Exp. (Credit) | |||||||||||||
Unrealized loss on securities available for sale | $ | (416 | ) | $ | (151 | ) | $ | (1,277 | ) | $ | (497 | ) | |||||
Reclassification adjustment for security gain included in net income | — | — | (12 | ) | (5 | ) | |||||||||||
Accretion (amortization) of unrealized gain on securities available for sale | |||||||||||||||||
transferred to securities held to maturity included in net income | 3 | (13 | ) | (319 | ) | (144 | ) | ||||||||||
Unrealized gain (loss) on interest rate swap | (62 | ) | (23 | ) | 75 | 30 | |||||||||||
Reclassification adjustment of interest rate swap settlements included in earnings | 47 | 19 | 139 | 55 | |||||||||||||
Totals | $ | (428 | ) | $ | (168 | ) | $ | (1,394 | ) | $ | (561 | ) | |||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
30-Sep-12 | 30-Sep-12 | ||||||||||||||||
Period ended September 30, 2012 | Pre-tax | Income Tax | Pre-tax | Income Tax | |||||||||||||
(dollars in thousands) | Inc. (Exp.) | Exp. (Credit) | Inc. (Exp.) | Exp. (Credit) | |||||||||||||
Unrealized gain (loss) on securities available for sale | $ | 27 | $ | 13 | $ | (94 | ) | $ | (34 | ) | |||||||
Amortization of unrealized gain on securities available for sale transferred | |||||||||||||||||
to securities held to maturity included in net income | (110 | ) | (44 | ) | (346 | ) | (136 | ) | |||||||||
Unrealized loss on interest rate swap | (106 | ) | (42 | ) | (292 | ) | (115 | ) | |||||||||
Reclassification adjustment of interest rate swap settlements included in earnings | 43 | 17 | 127 | 50 | |||||||||||||
Totals | $ | (146 | ) | $ | (56 | ) | $ | (605 | ) | $ | (235 | ) |
STOCKBASED_COMPENSATION_Tables
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Stock-Based Compensation Tables | ' | ||||||||
Schedule of restricted stock awards activity | ' | ||||||||
The following tables summarize information regarding unvested restricted stock outstanding at September 30, 2013 and 2012 including activity during the nine months then ended. | |||||||||
Weighted | |||||||||
Average | |||||||||
Shares | Grant Price | ||||||||
1-Jan-12 | 25,572 | $ | 17.79 | ||||||
Restricted stock granted | 8,895 | 22.48 | |||||||
Restricted stock legally vested | (4,058 | ) | (16.08 | ) | |||||
30-Sep-12 | 30,409 | $ | 19.39 | ||||||
1-Jan-13 | 30,409 | $ | 19.39 | ||||||
Restricted stock granted | 8,076 | 26 | |||||||
Restricted stock legally vested | (5,883 | ) | (17.85 | ) | |||||
30-Sep-13 | 32,602 | $ | 21.3 | ||||||
Schedule of scheduled compensation expense | ' | ||||||||
Scheduled compensation expense per calendar year assuming all restricted shares eventually vest to employees would be as follows: | |||||||||
2013 | $ | 146 | |||||||
2014 | 146 | ||||||||
2015 | 137 | ||||||||
2016 | 122 | ||||||||
2017 | 82 | ||||||||
Thereafter | 42 | ||||||||
Totals | $ | 675 |
EARNINGS_PER_SHARE_Tables
EARNINGS PER SHARE (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Earnings Per Share Tables | ' | ||||||||||||||||
Schedule of calculations for basic and diluted earnings per share | ' | ||||||||||||||||
Presented below are the calculations for basic and diluted earnings per share: | |||||||||||||||||
Three months ended | Nine months ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
(dollars in thousands, except per share data – unaudited) | 2013 | 2012 | 2013 | 2012 | |||||||||||||
Net income | $ | 13 | $ | 1,226 | $ | 3,183 | $ | 4,324 | |||||||||
Weighted average shares outstanding | 1,651,518 | 1,663,472 | 1,653,098 | 1,663,221 | |||||||||||||
Effect of dilutive stock options outstanding | — | — | — | 76 | |||||||||||||
Diluted weighted average shares outstanding | 1,651,518 | 1,663,472 | 1,653,098 | 1,663,297 | |||||||||||||
Basic earnings per share | $ | 0.01 | $ | 0.74 | $ | 1.93 | $ | 2.6 | |||||||||
Diluted earnings per share | $ | 0.01 | $ | 0.74 | $ | 1.93 | $ | 2.6 |
FAIR_VALUE_MEASUREMENTS_Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended | ||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||
Fair Value Measurements Tables | ' | ||||||||||||||||||||
Schedule of significant unobservable inputs used to measure fair value | ' | ||||||||||||||||||||
Significant unobservable inputs at September 30, 2013 used to measure fair value included: | |||||||||||||||||||||
Direct annual servicing cost per loan | $ | 50 | |||||||||||||||||||
Direct annual servicing cost per loan in process of foreclosure | $ | 500 | |||||||||||||||||||
Weighted average prepayment speed: CPR | 27.02% | ||||||||||||||||||||
Weighted average prepayment speed: PSA | 530.21% | ||||||||||||||||||||
Weighted average discount rate | 7.96% | ||||||||||||||||||||
Asset reinvestment rate | 4.00% | ||||||||||||||||||||
Short-term cost of funds | 0.25% | ||||||||||||||||||||
Escrow inflation adjustment | 1.00% | ||||||||||||||||||||
Servicing cost inflation adjustment | 1.00% | ||||||||||||||||||||
Schedule of fair value measured on a recurring basis | ' | ||||||||||||||||||||
Interest rate swap agreements – Fair values for interest rate swap agreements are based on the amounts required to settle the contracts based on valuations provided by third-party dealers in the contracts, which is considered a Level 2 fair value measurement, and are measured on a recurring basis. | |||||||||||||||||||||
Recurring Fair Value Measurements Using | |||||||||||||||||||||
Quoted Prices in | |||||||||||||||||||||
Active Markets | Significant Other | Significant | |||||||||||||||||||
for Identical | Observable | Unobservable | |||||||||||||||||||
Assets | Inputs | Inputs | |||||||||||||||||||
(dollars in thousands) | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||||||
Assets measured at fair value on a recurring basis at September 30, 2013: | |||||||||||||||||||||
Securities available for sale: | |||||||||||||||||||||
U.S. Treasury and agency debentures | $ | 994 | $ | — | $ | 994 | $ | — | |||||||||||||
U.S. agency issued residential MBS and CMO | 59,175 | — | 59,175 | — | |||||||||||||||||
Privately issued residential MBS and CMO | 114 | — | 114 | — | |||||||||||||||||
Solomon Hess SBA loan fund (CDFI Fund) | 950 | — | 950 | — | |||||||||||||||||
Other equity securities | 47 | — | — | 47 | |||||||||||||||||
Total securities available for sale | 61,280 | — | 61,233 | 47 | |||||||||||||||||
Loans held for sale | 824 | — | 824 | — | |||||||||||||||||
Mortgage rate lock commitments | 26 | — | 26 | — | |||||||||||||||||
Interest rate swap agreements | 361 | — | 361 | — | |||||||||||||||||
Total assets | $ | 62,491 | $ | — | $ | 62,444 | $ | 47 | |||||||||||||
Liabilities – Interest rate swap agreements | $ | 846 | $ | — | $ | 846 | $ | — | |||||||||||||
Assets measured at fair value on a recurring basis at December 31, 2012: | |||||||||||||||||||||
Securities available for sale: | |||||||||||||||||||||
U.S. Treasury and agency debentures | $ | 10,027 | $ | — | $ | 10,027 | $ | — | |||||||||||||
U.S. agency issued residential MBS and CMO | 59,640 | — | 59,640 | — | |||||||||||||||||
Privately issued residential MBS and CMO | 173 | — | 173 | — | |||||||||||||||||
Nonrated commercial paper | 5,500 | — | 5,500 | — | |||||||||||||||||
Other equity securities | 47 | — | — | 47 | |||||||||||||||||
Total securities available for sale | 75,387 | — | 75,340 | 47 | |||||||||||||||||
Loans held for sale | 884 | — | 884 | — | |||||||||||||||||
Mortgage rate lock commitments | 91 | — | 91 | — | |||||||||||||||||
Interest rate swap agreements | 673 | — | 673 | — | |||||||||||||||||
Total assets | $ | 77,035 | $ | — | $ | 76,988 | $ | 47 | |||||||||||||
Liabilities – Interest rate swap agreements | $ | 1,372 | $ | — | $ | 1,372 | $ | — | |||||||||||||
Reconciliation of fair value measurements using significant unobservable inputs | ' | ||||||||||||||||||||
Reconciliation of fair value measurements using significant unobservable inputs: | |||||||||||||||||||||
Securities | |||||||||||||||||||||
Available | |||||||||||||||||||||
(dollars in thousands) | For Sale | ||||||||||||||||||||
Balance at January 1, 2012: | $ | 47 | |||||||||||||||||||
Total realized/unrealized gains and (losses): | |||||||||||||||||||||
Included in earnings | — | ||||||||||||||||||||
Included in other comprehensive income | — | ||||||||||||||||||||
Purchases, maturities, and sales | — | ||||||||||||||||||||
Transferred from Level 2 to Level 3 | — | ||||||||||||||||||||
Transferred to held to maturity classification | — | ||||||||||||||||||||
Balance at September 30, 2012 | $ | 47 | |||||||||||||||||||
Total gains or (losses) for the period included in earnings attributable to the | |||||||||||||||||||||
change in unrealized gains or losses relating to assets still held at September 30, 2012 | $ | — | |||||||||||||||||||
Balance at January 1, 2013 | $ | 47 | |||||||||||||||||||
Total realized/unrealized gains and (losses): | |||||||||||||||||||||
Included in earnings | — | ||||||||||||||||||||
Included in other comprehensive income | — | ||||||||||||||||||||
Purchases, maturities, and sales | — | ||||||||||||||||||||
Transferred from Level 2 to Level 3 | — | ||||||||||||||||||||
Transferred to held to maturity classification | — | ||||||||||||||||||||
Balance at September 30, 2013 | $ | 47 | |||||||||||||||||||
Total gains or (losses) for the period included in earnings attributable to the | |||||||||||||||||||||
change in unrealized gains or losses relating to assets still held at September 30, 2013 | $ | — | |||||||||||||||||||
Schedule of fair value measured on a nonrecurring basis | ' | ||||||||||||||||||||
Nonrecurring Fair Value Measurements Using | |||||||||||||||||||||
Quoted Prices in | |||||||||||||||||||||
Active Markets | Significant Other | Significant | |||||||||||||||||||
for Identical | Observable | Unobservable | |||||||||||||||||||
Assets | Inputs | Inputs | |||||||||||||||||||
($000s) | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||||||
Assets measured at fair value on a nonrecurring basis at September 30, 2013: | |||||||||||||||||||||
Impaired loans | $ | 1,758 | $ | — | $ | 323 | $ | 1,435 | |||||||||||||
Foreclosed assets | 1,606 | — | 695 | 911 | |||||||||||||||||
Mortgage servicing rights | 1,662 | — | — | 1,662 | |||||||||||||||||
Total assets | $ | 5,026 | $ | — | $ | 1,018 | $ | 4,008 | |||||||||||||
Assets measured at fair value on a nonrecurring basis at December 31, 2012: | |||||||||||||||||||||
Impaired loans | $ | 2,973 | $ | — | $ | 328 | $ | 2,645 | |||||||||||||
Foreclosed assets | 1,774 | — | 752 | 1,022 | |||||||||||||||||
Mortgage servicing rights | 1,233 | — | — | 1,233 | |||||||||||||||||
Total assets | $ | 5,980 | $ | — | $ | 1,080 | $ | 4,900 | |||||||||||||
Schedule of carrying value and estimated fair values of Financial Instruments | ' | ||||||||||||||||||||
The carrying amounts and fair values of PSB’s financial instruments consisted of the following at September 30, 2013: | |||||||||||||||||||||
30-Sep-13 | |||||||||||||||||||||
Carrying | Estimated | Fair Value Hierarchy Level | |||||||||||||||||||
Amount | Fair Value | Level 1 | Level 2 | Level 3 | |||||||||||||||||
Financial assets ($000s): | |||||||||||||||||||||
Cash and cash equivalents | $ | 17,080 | $ | 17,080 | $ | 17,080 | $ | — | $ | — | |||||||||||
Securities | 133,052 | 133,194 | — | 131,350 | 1,844 | ||||||||||||||||
Bank certificates of deposit | 2,481 | 2,528 | — | — | 2,528 | ||||||||||||||||
Net loans receivable and loans held for sale | 517,697 | 521,979 | — | 1,147 | 520,832 | ||||||||||||||||
Accrued interest receivable | 2,257 | 2,257 | — | — | 2,257 | ||||||||||||||||
Mortgage servicing rights | 1,662 | 1,662 | — | — | 1,662 | ||||||||||||||||
Mortgage rate lock commitments | 26 | 26 | — | 26 | — | ||||||||||||||||
FHLB stock | 3,594 | 3,594 | — | — | 3,594 | ||||||||||||||||
Cash surrender value of life insurance | 12,723 | 12,723 | 12,723 | — | — | ||||||||||||||||
Interest rate swap agreements | 361 | 361 | — | 361 | — | ||||||||||||||||
Financial liabilities ($000s): | |||||||||||||||||||||
Deposits | $ | 554,239 | $ | 533,077 | $ | — | $ | — | $ | 533,077 | |||||||||||
FHLB advances | 58,124 | 58,848 | — | 58,848 | — | ||||||||||||||||
Other borrowings | 20,353 | 22,472 | — | 14,489 | 6,788 | ||||||||||||||||
Senior subordinated notes | 4,000 | 3,471 | — | — | 3,471 | ||||||||||||||||
Junior subordinated debentures | 7,732 | 4,461 | — | — | 4,461 | ||||||||||||||||
Interest rate swap agreements | 846 | 846 | — | 846 | — | ||||||||||||||||
Accrued interest payable | 455 | 455 | — | — | 455 | ||||||||||||||||
The carrying amounts and fair values of PSB’s financial instruments consisted of the following at December 31, 2012: | |||||||||||||||||||||
31-Dec-12 | |||||||||||||||||||||
Carrying | Estimated | Fair Value Hierarchy Level | |||||||||||||||||||
Amount | Fair Value | Level 1 | Level 2 | Level 3 | |||||||||||||||||
Financial assets ($000s): | |||||||||||||||||||||
Cash and cash equivalents | $ | 48,847 | $ | 48,847 | $ | 48,847 | $ | — | $ | — | |||||||||||
Securities | 145,209 | 147,751 | — | 145,795 | 1,956 | ||||||||||||||||
Bank certificates of deposit | 4,465 | 4,538 | — | — | 4,538 | ||||||||||||||||
Net loans receivable and loans held for sale | 478,875 | 484,925 | — | 1,212 | 483,713 | ||||||||||||||||
Accrued interest receivable | 2,157 | 2,157 | — | — | 2,157 | ||||||||||||||||
Mortgage servicing rights | 1,233 | 1,233 | — | — | 1,233 | ||||||||||||||||
Mortgage rate lock commitments | 91 | 91 | — | 91 | — | ||||||||||||||||
FHLB stock | 2,506 | 2,506 | — | — | 2,506 | ||||||||||||||||
Cash surrender value of life insurance | 11,813 | 11,813 | 11,813 | — | — | ||||||||||||||||
Interest rate swap agreements | 673 | 673 | — | 673 | — | ||||||||||||||||
Financial liabilities ($000s): | |||||||||||||||||||||
Deposits | $ | 565,442 | $ | 568,014 | $ | — | $ | — | $ | 568,014 | |||||||||||
FHLB advances | 50,124 | 51,590 | — | 51,590 | — | ||||||||||||||||
Other borrowings | 20,728 | 22,118 | — | 14,890 | 7,228 | ||||||||||||||||
Senior subordinated notes | 7,000 | 7,000 | — | — | 7,000 | ||||||||||||||||
Junior subordinated debentures | 7,732 | 4,911 | — | — | 4,911 | ||||||||||||||||
Interest rate swap agreements | 1,372 | 1,372 | — | 1,372 | — | ||||||||||||||||
Accrued interest payable | 697 | 697 | — | — | 697 | ||||||||||||||||
PSB_HOLDINGS_INC_ACQUISITION_O2
PSB HOLDINGS, INC. ACQUISITION OF MARATHON STATE BANK (Details Narrative) (Marathon State Bank, USD $) | 0 Months Ended | |
In Thousands, unless otherwise specified | Jun. 14, 2012 | Jun. 01, 2012 |
Marathon State Bank | ' | ' |
Total fair value of assets acquired | ' | $107,364 |
Accounting date | 1-Jun-12 | ' |
Marathon State Bank book equity ratio as percent of assets prior to acquisition | ' | 6.00% |
Percentage of tangible net book value | 100.00% | ' |
Credit Markdown on Acquired Loan Portfolio | 490 | ' |
Credit Markdown on Acquired Loan Portfolio, percentage | 2.05% | ' |
Purchased Impaired Loan Balance | ' | 310 |
Write-down, impaired loans | $21 | ' |
PSB_HOLDINGS_INC_ACQUISITION_O3
PSB HOLDINGS, INC. ACQUISITION OF MARATHON STATE BANK (Details) (USD $) | 3 Months Ended | 9 Months Ended | 0 Months Ended | ||||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Jun. 14, 2012 | Jun. 01, 2012 |
Marathon State Bank | Marathon State Bank | ||||||
Cash purchase price | ' | ' | ' | ' | ' | $5,505 | ' |
Fair Value of Assets Acquired: | ' | ' | ' | ' | ' | ' | ' |
Cash and due from banks | 15,283 | ' | 15,283 | ' | 20,332 | ' | 20,392 |
Securities | ' | ' | ' | ' | ' | ' | 50,547 |
Loans receivable | 516,873 | ' | 516,873 | ' | 477,991 | ' | 23,760 |
Short-term commercial paper and bankers' acceptances | ' | ' | ' | ' | ' | ' | 11,713 |
Foreclosed assets | ' | ' | ' | ' | ' | ' | ' |
Premises and equipment, net | 9,699 | ' | 9,699 | ' | 10,240 | ' | 402 |
Core deposit intangible asset | ' | ' | ' | ' | ' | ' | ' |
Accrued interest receivable and other assets | ' | ' | ' | ' | ' | ' | 550 |
Total fair value of assets acquired | ' | ' | ' | ' | ' | ' | 107,364 |
Fair Value of Liabilities assumed: | ' | ' | ' | ' | ' | ' | ' |
Non-interest-bearing | 92,141 | ' | 92,141 | ' | 89,819 | ' | 23,255 |
Interest-bearing | 462,098 | ' | 462,098 | ' | 475,623 | ' | 77,611 |
Accrued expenses and other liabilities | 5,438 | ' | 5,438 | ' | 6,493 | ' | 142 |
Total fair value of liabilities assumed | ' | ' | ' | ' | ' | ' | 101,008 |
Fair value of net assets acquired | ' | ' | ' | ' | ' | ' | 6,356 |
Gain on bargain purchase | ' | ' | ' | $851 | ' | $851 | ' |
PSB_HOLDINGS_INC_ACQUISITION_O4
PSB HOLDINGS, INC. ACQUISITION OF MARATHON STATE BANK (Details1) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Pro Forma with Marathon State Bank | ' | ' | ' | ' |
Net Interest Income | $5,422 | $5,163 | $15,940 | $15,534 |
Noninterest Income | 1,411 | 1,444 | 4,349 | 5,027 |
Net Income | 13 | 1,226 | 3,183 | 4,370 |
Earnings Per Share | $0.01 | $0.74 | $1.93 | $2.63 |
PSB Holdings, Inc. | ' | ' | ' | ' |
Pro Forma with Marathon State Bank | ' | ' | ' | ' |
Net Interest Income | ' | 4,813 | ' | 14,376 |
Noninterest Income | ' | 1,436 | ' | 4,147 |
Net Income | ' | 1,358 | ' | 3,902 |
Earnings Per Share | ' | $0.82 | ' | $2.35 |
Marathon State Bank | ' | ' | ' | ' |
Pro Forma with Marathon State Bank | ' | ' | ' | ' |
Net Interest Income | ' | 350 | ' | 1,158 |
Noninterest Income | ' | 8 | ' | 880 |
Net Income | ' | ($132) | ' | $468 |
Earnings Per Share | ' | ($0.08) | ' | $0.28 |
SECURITIES_Details_Narrative
SECURITIES (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended | ||||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Mar. 31, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 |
Securities Details Narrative | ' | ' | ' | ' | ' | ' |
Securities Pledged as Collateral | $51,218 | ' | ' | $51,218 | ' | $44,914 |
Gain on sale of securities | ' | ' | ' | 12 | ' | ' |
Reclassification adjustment for security gain included in net income | ' | 7 | ' | 7 | ' | ' |
Proceeds from sale of securities available for sale | ' | ' | ' | $986 | ' | ' |
SECURITIES_Details
SECURITIES (Details) (USD $) | 9 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Dec. 31, 2012 |
Amortized Cost | $60,980 | $73,807 |
Unrealized Gains | 1,119 | 1,630 |
Unrealized Losses | 819 | 50 |
Estimated Fair Value | 61,280 | 75,387 |
Amortized Cost | 71,772 | 69,822 |
Unrealized Gains | 1,116 | 2,649 |
Unrealized Losses | 974 | 107 |
Fair Value | 71,914 | 72,364 |
US Treasury securities and obligations of US Government corps and agencies | ' | ' |
Amortized Cost | 1,003 | 9,998 |
Unrealized Gains | ' | 29 |
Unrealized Losses | 9 | ' |
Estimated Fair Value | 994 | 10,027 |
US agency issued residential mortgage-backed securities | ' | ' |
Amortized Cost | 20,084 | 13,550 |
Unrealized Gains | 541 | 847 |
Unrealized Losses | 394 | ' |
Estimated Fair Value | 20,231 | 14,397 |
US agency issued residential collateralized mortgage obligations | ' | ' |
Amortized Cost | 38,785 | 44,544 |
Unrealized Gains | 575 | 749 |
Unrealized Losses | 416 | 50 |
Estimated Fair Value | 38,944 | 45,243 |
Privately issued residential collateralized mortgage obligations | ' | ' |
Amortized Cost | 111 | 168 |
Unrealized Gains | 3 | 5 |
Unrealized Losses | ' | ' |
Estimated Fair Value | 114 | 173 |
Nonrated commercial paper | ' | ' |
Amortized Cost | ' | 5,500 |
Unrealized Gains | ' | ' |
Unrealized Losses | ' | ' |
Estimated Fair Value | ' | 5,500 |
Nonrated SBA Loan Fund | ' | ' |
Amortized Cost | 950 | ' |
Unrealized Gains | ' | ' |
Unrealized Losses | ' | ' |
Estimated Fair Value | 950 | ' |
Other equity securities | ' | ' |
Amortized Cost | 47 | 47 |
Unrealized Gains | ' | ' |
Unrealized Losses | ' | ' |
Estimated Fair Value | 47 | 47 |
Obligations of states and political subdivisions | ' | ' |
Amortized Cost | 69,851 | 67,915 |
Unrealized Gains | 1,077 | 2,581 |
Unrealized Losses | 811 | 41 |
Fair Value | 70,117 | 70,455 |
Nonrated trust preferred securities | ' | ' |
Amortized Cost | 1,520 | 1,505 |
Unrealized Gains | 33 | 60 |
Unrealized Losses | 163 | 66 |
Fair Value | 1,390 | 1,499 |
Nonrated senior subordinated notes | ' | ' |
Amortized Cost | 401 | 402 |
Unrealized Gains | 6 | 8 |
Unrealized Losses | ' | ' |
Fair Value | $407 | $410 |
LOANS_RECEIVABLE_AND_ALLOWANCE2
LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES (Details Narrative) (USD $) | Sep. 30, 2013 | Sep. 30, 2012 |
In Thousands, unless otherwise specified | ||
Loans Receivable And Allowance For Loan Losses Details Narrative | ' | ' |
Specific loan reserves for loans restructured | $165 | $262 |
LOANS_RECEIVABLE_AND_ALLOWANCE3
LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | ||||
Gross loans | $529,692 | $492,230 | ' | ' |
Loans in process of disbursement | -5,993 | -7,039 | ' | ' |
Subtotals - Disbursed loans | 523,699 | 485,191 | ' | ' |
Net deferred loan costs | 300 | 231 | ' | ' |
Allowance for loan losses | -7,126 | -7,431 | -7,431 | -7,941 |
Net loans receivable | 516,873 | 477,991 | ' | ' |
Commercial, industrial and municipal | ' | ' | ' | ' |
Gross loans | 143,396 | 132,633 | ' | ' |
Commercial real estate mortgage | ' | ' | ' | ' |
Gross loans | 208,544 | 183,818 | ' | ' |
Commercial construction and development | ' | ' | ' | ' |
Gross loans | 13,592 | 28,482 | ' | ' |
Residential real estate mortgage | ' | ' | ' | ' |
Gross loans | 124,469 | 105,579 | ' | ' |
Residential construction and development | ' | ' | ' | ' |
Gross loans | 15,033 | 15,247 | ' | ' |
Residential real estate home equity | ' | ' | ' | ' |
Gross loans | 20,346 | 21,756 | ' | ' |
Consumer and individual | ' | ' | ' | ' |
Gross loans | $4,312 | $4,715 | ' | ' |
LOANS_RECEIVABLE_AND_ALLOWANCE4
LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES (Details 1) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Loans Receivable And Allowance For Loan Losses Details 1 | ' | ' |
Impaired loans without a valuation allowance | $9,463 | $3,410 |
Impaired loans with a valuation allowance | 6,173 | 9,029 |
Total impaired loans before valuation allowances | 15,636 | 12,439 |
Valuation allowance related to impaired loans | 2,274 | 2,434 |
Net impaired loans | $13,362 | $10,005 |
LOANS_RECEIVABLE_AND_ALLOWANCE5
LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES (Details 2) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Beginning Balance | $7,431 | $7,941 |
Provision | 4,015 | 325 |
Recoveries | 46 | 17 |
Charge offs | -4,366 | -852 |
Ending balance | 7,126 | 7,431 |
Individually evaluated for impairment | 2,274 | 2,537 |
Collectively evaluated for impairment | 4,852 | 4,894 |
Individually evaluated for impairment | 15,636 | 17,254 |
Collectively evaluated for impairment | 514,056 | 469,880 |
Commercial Loan | ' | ' |
Beginning Balance | 3,014 | 3,406 |
Provision | 3,553 | 233 |
Recoveries | 2 | 6 |
Charge offs | -3,568 | -105 |
Ending balance | 3,001 | 3,540 |
Individually evaluated for impairment | 1,232 | 1,625 |
Collectively evaluated for impairment | 1,769 | 1,915 |
Individually evaluated for impairment | 8,228 | 5,741 |
Collectively evaluated for impairment | 135,168 | 132,280 |
Commercial Real Estate | ' | ' |
Beginning Balance | 2,803 | 3,175 |
Provision | 226 | -458 |
Recoveries | 30 | 4 |
Charge offs | -174 | -234 |
Ending balance | 2,885 | 2,487 |
Individually evaluated for impairment | 821 | 570 |
Collectively evaluated for impairment | 2,064 | 1,917 |
Individually evaluated for impairment | 5,222 | 8,955 |
Collectively evaluated for impairment | 216,914 | 200,772 |
Residential Real Estate | ' | ' |
Beginning Balance | 1,511 | 1,242 |
Provision | 198 | 530 |
Recoveries | 3 | 3 |
Charge offs | -574 | -462 |
Ending balance | 1,138 | 1,313 |
Individually evaluated for impairment | 196 | 336 |
Collectively evaluated for impairment | 942 | 977 |
Individually evaluated for impairment | 2,161 | 2,543 |
Collectively evaluated for impairment | 157,687 | 131,541 |
Consumer Loan | ' | ' |
Beginning Balance | 103 | 118 |
Provision | 38 | 20 |
Recoveries | 11 | 4 |
Charge offs | -50 | -51 |
Ending balance | 102 | 91 |
Individually evaluated for impairment | 25 | 6 |
Collectively evaluated for impairment | 77 | 85 |
Individually evaluated for impairment | 25 | 15 |
Collectively evaluated for impairment | $4,287 | $5,287 |
LOANS_RECEIVABLE_AND_ALLOWANCE6
LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES (Details 3) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Loans receivable, commercial credit exposure | $365,532 | $344,933 |
High quality (risk rating 1) | ' | ' |
Loans receivable, commercial credit exposure | 51 | 38 |
Minimal (risk rating 2) | ' | ' |
Loans receivable, commercial credit exposure | 54,701 | 38,992 |
Average (risk rating 3) | ' | ' |
Loans receivable, commercial credit exposure | 213,372 | 193,759 |
Acceptable (risk rating 4) | ' | ' |
Loans receivable, commercial credit exposure | 63,115 | 81,235 |
Watch (risk rating 5) | ' | ' |
Loans receivable, commercial credit exposure | 18,719 | 18,319 |
Substandard (risk rating 6) | ' | ' |
Loans receivable, commercial credit exposure | 2,124 | 3,123 |
Impaired loans (risk rating 7) | ' | ' |
Loans receivable, commercial credit exposure | 13,450 | 9,467 |
Commercial Loan | ' | ' |
Loans receivable, commercial credit exposure | 127,018 | 114,243 |
Commercial Loan | High quality (risk rating 1) | ' | ' |
Loans receivable, commercial credit exposure | 51 | 38 |
Commercial Loan | Minimal (risk rating 2) | ' | ' |
Loans receivable, commercial credit exposure | 33,663 | 16,360 |
Commercial Loan | Average (risk rating 3) | ' | ' |
Loans receivable, commercial credit exposure | 54,473 | 51,846 |
Commercial Loan | Acceptable (risk rating 4) | ' | ' |
Loans receivable, commercial credit exposure | 23,801 | 32,002 |
Commercial Loan | Watch (risk rating 5) | ' | ' |
Loans receivable, commercial credit exposure | 9,180 | 8,271 |
Commercial Loan | Substandard (risk rating 6) | ' | ' |
Loans receivable, commercial credit exposure | 890 | 617 |
Commercial Loan | Impaired loans (risk rating 7) | ' | ' |
Loans receivable, commercial credit exposure | 4,960 | 5,109 |
Commercial Real Estate | ' | ' |
Loans receivable, commercial credit exposure | 208,544 | 183,818 |
Commercial Real Estate | High quality (risk rating 1) | ' | ' |
Loans receivable, commercial credit exposure | ' | ' |
Commercial Real Estate | Minimal (risk rating 2) | ' | ' |
Loans receivable, commercial credit exposure | 19,674 | 20,193 |
Commercial Real Estate | Average (risk rating 3) | ' | ' |
Loans receivable, commercial credit exposure | 139,442 | 103,454 |
Commercial Real Estate | Acceptable (risk rating 4) | ' | ' |
Loans receivable, commercial credit exposure | 35,566 | 45,699 |
Commercial Real Estate | Watch (risk rating 5) | ' | ' |
Loans receivable, commercial credit exposure | 7,906 | 8,291 |
Commercial Real Estate | Substandard (risk rating 6) | ' | ' |
Loans receivable, commercial credit exposure | 876 | 2,179 |
Commercial Real Estate | Impaired loans (risk rating 7) | ' | ' |
Loans receivable, commercial credit exposure | 5,080 | 4,002 |
Construction and Development | ' | ' |
Loans receivable, commercial credit exposure | 13,592 | 28,482 |
Construction and Development | High quality (risk rating 1) | ' | ' |
Loans receivable, commercial credit exposure | ' | ' |
Construction and Development | Minimal (risk rating 2) | ' | ' |
Loans receivable, commercial credit exposure | 75 | 305 |
Construction and Development | Average (risk rating 3) | ' | ' |
Loans receivable, commercial credit exposure | 8,399 | 22,573 |
Construction and Development | Acceptable (risk rating 4) | ' | ' |
Loans receivable, commercial credit exposure | 2,985 | 3,318 |
Construction and Development | Watch (risk rating 5) | ' | ' |
Loans receivable, commercial credit exposure | 1,633 | 1,757 |
Construction and Development | Substandard (risk rating 6) | ' | ' |
Loans receivable, commercial credit exposure | 358 | 327 |
Construction and Development | Impaired loans (risk rating 7) | ' | ' |
Loans receivable, commercial credit exposure | 142 | 202 |
Agricultural | ' | ' |
Loans receivable, commercial credit exposure | 4,437 | 4,265 |
Agricultural | High quality (risk rating 1) | ' | ' |
Loans receivable, commercial credit exposure | ' | ' |
Agricultural | Minimal (risk rating 2) | ' | ' |
Loans receivable, commercial credit exposure | 1,206 | 559 |
Agricultural | Average (risk rating 3) | ' | ' |
Loans receivable, commercial credit exposure | 2,657 | 3,336 |
Agricultural | Acceptable (risk rating 4) | ' | ' |
Loans receivable, commercial credit exposure | 396 | 216 |
Agricultural | Watch (risk rating 5) | ' | ' |
Loans receivable, commercial credit exposure | ' | ' |
Agricultural | Substandard (risk rating 6) | ' | ' |
Loans receivable, commercial credit exposure | ' | ' |
Agricultural | Impaired loans (risk rating 7) | ' | ' |
Loans receivable, commercial credit exposure | 178 | 154 |
Government | ' | ' |
Loans receivable, commercial credit exposure | 11,941 | 14,125 |
Government | High quality (risk rating 1) | ' | ' |
Loans receivable, commercial credit exposure | ' | ' |
Government | Minimal (risk rating 2) | ' | ' |
Loans receivable, commercial credit exposure | 83 | 1,575 |
Government | Average (risk rating 3) | ' | ' |
Loans receivable, commercial credit exposure | 8,401 | 12,550 |
Government | Acceptable (risk rating 4) | ' | ' |
Loans receivable, commercial credit exposure | 367 | ' |
Government | Watch (risk rating 5) | ' | ' |
Loans receivable, commercial credit exposure | ' | ' |
Government | Substandard (risk rating 6) | ' | ' |
Loans receivable, commercial credit exposure | ' | ' |
Government | Impaired loans (risk rating 7) | ' | ' |
Loans receivable, commercial credit exposure | $3,090 | ' |
LOANS_RECEIVABLE_AND_ALLOWANCE7
LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES (Details 4) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Loans receivable, consumer credit exposure | $164,160 | $147,297 |
Performing | ' | ' |
Loans receivable, consumer credit exposure | 161,974 | 144,325 |
Impaired | ' | ' |
Loans receivable, consumer credit exposure | 2,186 | 2,972 |
Residential Prime | ' | ' |
Loans receivable, consumer credit exposure | 124,469 | 105,579 |
Residential Prime | Performing | ' | ' |
Loans receivable, consumer credit exposure | 122,794 | 103,292 |
Residential Prime | Impaired | ' | ' |
Loans receivable, consumer credit exposure | 1,675 | 2,287 |
Residential HELOC | ' | ' |
Loans receivable, consumer credit exposure | 20,346 | 21,756 |
Residential HELOC | Performing | ' | ' |
Loans receivable, consumer credit exposure | 19,908 | 21,250 |
Residential HELOC | Impaired | ' | ' |
Loans receivable, consumer credit exposure | 438 | 506 |
Construction and Development | ' | ' |
Loans receivable, consumer credit exposure | 15,033 | 15,247 |
Construction and Development | Performing | ' | ' |
Loans receivable, consumer credit exposure | 14,985 | 15,094 |
Construction and Development | Impaired | ' | ' |
Loans receivable, consumer credit exposure | 48 | 153 |
Consumer Loan | ' | ' |
Loans receivable, consumer credit exposure | 4,312 | 4,715 |
Consumer Loan | Performing | ' | ' |
Loans receivable, consumer credit exposure | 4,287 | 4,689 |
Consumer Loan | Impaired | ' | ' |
Loans receivable, consumer credit exposure | $25 | $26 |
LOANS_RECEIVABLE_AND_ALLOWANCE8
LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES (Details 5) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
30-59 Days | $1,181 | $2,346 |
60-89 Days | 838 | 610 |
90+ Days | 2,860 | 4,650 |
Total Past Due | 4,879 | 7,606 |
Current | 518,820 | 477,585 |
Total Loans | 523,699 | 485,191 |
Commercial and Industrial | ' | ' |
30-59 Days | 567 | 375 |
60-89 Days | 423 | 83 |
90+ Days | 838 | 1,795 |
Total Past Due | 1,828 | 2,253 |
Current | 125,190 | 111,990 |
Total Loans | 127,018 | 114,243 |
Agricultural | ' | ' |
60-89 Days | ' | 154 |
90+ Days | 178 | ' |
Total Past Due | 178 | 154 |
Current | 4,259 | 4,111 |
Total Loans | 4,437 | 4,265 |
Government | ' | ' |
Current | 11,941 | 14,125 |
Total Loans | 11,941 | 14,125 |
Commercial Real Estate | ' | ' |
30-59 Days | 272 | 936 |
60-89 Days | 395 | 76 |
90+ Days | 1,244 | 1,028 |
Total Past Due | 1,911 | 2,040 |
Current | 206,633 | 181,778 |
Total Loans | 208,544 | 183,818 |
Commercial Construction and Development | ' | ' |
60-89 Days | ' | 20 |
Total Past Due | ' | 20 |
Current | 11,747 | 25,340 |
Total Loans | 11,747 | 25,360 |
Residential Prime | ' | ' |
30-59 Days | 245 | 950 |
60-89 Days | ' | 274 |
90+ Days | 325 | 1,344 |
Total Past Due | 570 | 2,568 |
Current | 123,899 | 103,011 |
Total Loans | 124,469 | 105,579 |
Residential HELOC | ' | ' |
30-59 Days | 90 | 64 |
60-89 Days | 18 | ' |
90+ Days | 266 | 335 |
Total Past Due | 374 | 399 |
Current | 19,972 | 21,357 |
Total Loans | 20,346 | 21,756 |
Construction and Development | ' | ' |
90+ Days | ' | 133 |
Total Past Due | ' | 133 |
Current | 10,885 | 11,197 |
Total Loans | 10,885 | 11,330 |
Consumer Loan | ' | ' |
30-59 Days | 7 | 21 |
60-89 Days | 2 | 3 |
90+ Days | 9 | 15 |
Total Past Due | 18 | 39 |
Current | 4,294 | 4,676 |
Total Loans | $4,312 | $4,715 |
LOANS_RECEIVABLE_AND_ALLOWANCE9
LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES (Details 6) (USD $) | 9 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Dec. 31, 2012 |
With no related allowance recorded: | ' | ' |
Recorded Investment | $9,463 | $3,410 |
With an allowance recorded: | ' | ' |
Related allowance | 2,274 | 2,434 |
Recorded Investment | 6,173 | 9,029 |
Total | ' | ' |
Recorded Investment | 15,636 | 12,439 |
Commercial and Industrial | ' | ' |
With no related allowance recorded: | ' | ' |
Unpaid Principal | 2,748 | 1,521 |
Recorded Investment | 2,620 | 1,483 |
Average Recorded Investment | 2,052 | 1,545 |
Interest income recognized | 80 | 88 |
With an allowance recorded: | ' | ' |
Unpaid Principal | 2,576 | 3,960 |
Related allowance | 1,153 | 1,287 |
Recorded Investment | 2,340 | 3,626 |
Average Recorded Investment | 2,983 | 4,238 |
Interest income recognized | 42 | 62 |
Total | ' | ' |
Unpaid Principal | 5,324 | 5,481 |
Recorded Investment | 4,960 | 5,109 |
Average Recorded Investment | 5,035 | 5,783 |
Interest income recognized | 122 | 150 |
Commercial Real Estate | ' | ' |
With no related allowance recorded: | ' | ' |
Unpaid Principal | 2,708 | 1,176 |
Recorded Investment | 2,513 | 1,103 |
Average Recorded Investment | 1,808 | 2,405 |
Interest income recognized | 74 | 194 |
With an allowance recorded: | ' | ' |
Unpaid Principal | 2,638 | 3,035 |
Related allowance | 780 | 643 |
Recorded Investment | 2,567 | 2,899 |
Average Recorded Investment | 2,733 | 3,303 |
Interest income recognized | 71 | 105 |
Total | ' | ' |
Unpaid Principal | 5,346 | 4,211 |
Recorded Investment | 5,080 | 4,002 |
Average Recorded Investment | 4,541 | 5,708 |
Interest income recognized | 145 | 299 |
Commercial Construction and Development | ' | ' |
With no related allowance recorded: | ' | ' |
Unpaid Principal | 2 | ' |
Recorded Investment | ' | ' |
Average Recorded Investment | ' | ' |
Interest income recognized | ' | 33 |
With an allowance recorded: | ' | ' |
Unpaid Principal | 144 | 205 |
Related allowance | 41 | 31 |
Recorded Investment | 142 | 202 |
Average Recorded Investment | 172 | 427 |
Interest income recognized | 6 | 21 |
Total | ' | ' |
Unpaid Principal | 146 | 205 |
Recorded Investment | 142 | 202 |
Average Recorded Investment | 172 | 427 |
Interest income recognized | 6 | 54 |
Agricultural | ' | ' |
With an allowance recorded: | ' | ' |
Unpaid Principal | 179 | 154 |
Related allowance | 79 | 40 |
Recorded Investment | 178 | 154 |
Average Recorded Investment | 166 | 91 |
Interest income recognized | ' | 10 |
Total | ' | ' |
Unpaid Principal | 179 | 154 |
Recorded Investment | 178 | 154 |
Average Recorded Investment | 166 | 91 |
Interest income recognized | ' | 10 |
Government | ' | ' |
With no related allowance recorded: | ' | ' |
Unpaid Principal | 3,090 | ' |
Recorded Investment | 3,090 | ' |
Average Recorded Investment | 1,545 | ' |
Interest income recognized | 77 | ' |
Total | ' | ' |
Unpaid Principal | 3,090 | ' |
Recorded Investment | 3,090 | ' |
Average Recorded Investment | 1,545 | ' |
Interest income recognized | 77 | ' |
Residential Prime | ' | ' |
With no related allowance recorded: | ' | ' |
Unpaid Principal | 1,314 | 881 |
Recorded Investment | 1,160 | 824 |
Average Recorded Investment | 992 | 493 |
Interest income recognized | 7 | 9 |
With an allowance recorded: | ' | ' |
Unpaid Principal | 529 | 1,511 |
Related allowance | 112 | 277 |
Recorded Investment | 515 | 1,463 |
Average Recorded Investment | 989 | 1,746 |
Interest income recognized | 3 | 22 |
Total | ' | ' |
Unpaid Principal | 1,843 | 2,392 |
Recorded Investment | 1,675 | 2,287 |
Average Recorded Investment | 1,981 | 2,239 |
Interest income recognized | 10 | 31 |
Residential HELOC | ' | ' |
With no related allowance recorded: | ' | ' |
Unpaid Principal | 80 | ' |
Recorded Investment | 80 | ' |
Average Recorded Investment | 40 | ' |
Interest income recognized | 2 | 3 |
With an allowance recorded: | ' | ' |
Unpaid Principal | 370 | 510 |
Related allowance | 76 | 126 |
Recorded Investment | 358 | 506 |
Average Recorded Investment | 432 | 387 |
Interest income recognized | 3 | 15 |
Total | ' | ' |
Unpaid Principal | 450 | 510 |
Recorded Investment | 438 | 506 |
Average Recorded Investment | 472 | 387 |
Interest income recognized | 5 | 18 |
Residential construction and development | ' | ' |
With an allowance recorded: | ' | ' |
Unpaid Principal | 50 | 153 |
Related allowance | 8 | 4 |
Recorded Investment | 48 | 153 |
Average Recorded Investment | 101 | 149 |
Interest income recognized | 1 | 5 |
Total | ' | ' |
Unpaid Principal | 50 | 153 |
Recorded Investment | 48 | 153 |
Average Recorded Investment | 101 | 149 |
Interest income recognized | 1 | 5 |
Consumer | ' | ' |
With an allowance recorded: | ' | ' |
Unpaid Principal | 23 | 26 |
Related allowance | 25 | 26 |
Recorded Investment | 25 | 26 |
Average Recorded Investment | 26 | 48 |
Interest income recognized | ' | 2 |
Total | ' | ' |
Unpaid Principal | 23 | 26 |
Recorded Investment | 25 | 26 |
Average Recorded Investment | 26 | 48 |
Interest income recognized | ' | $2 |
Recovered_Sheet1
LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES (Details 7) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Loans on nonaccrual status | $7,036 | $7,715 |
Commercial and Industrial | ' | ' |
Loans on nonaccrual status | 2,191 | 3,023 |
Agricultural | ' | ' |
Loans on nonaccrual status | 178 | 154 |
Commercial Real Estate | ' | ' |
Loans on nonaccrual status | 3,003 | 2,001 |
Commercial construction and development | ' | ' |
Loans on nonaccrual status | 18 | 1 |
Residential Prime | ' | ' |
Loans on nonaccrual status | 1,265 | 2,021 |
Residential HELOC | ' | ' |
Loans on nonaccrual status | 332 | 365 |
Residential construction and development | ' | ' |
Loans on nonaccrual status | 30 | 133 |
Consumer | ' | ' |
Loans on nonaccrual status | $19 | $17 |
Recovered_Sheet2
LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES (Details 8) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Number | Number | Number | Number | |
Commercial and Industrial | ' | ' | ' | ' |
Troubled Debt Restructuring | ' | ' | ' | ' |
Number of Contracts | 1 | 3 | 4 | 6 |
Pre-modification outstanding recorded investment | $75 | $481 | $471 | $661 |
Post-modification outstanding recorded investment | 75 | 475 | 369 | 637 |
Default during the quarter | ' | ' | ' | ' |
Number of Contracts | 1 | ' | 1 | 1 |
Recorded investment | 172 | ' | 172 | ' |
Commercial Real Estate | ' | ' | ' | ' |
Troubled Debt Restructuring | ' | ' | ' | ' |
Number of Contracts | 1 | ' | 3 | 2 |
Pre-modification outstanding recorded investment | 82 | ' | 303 | 527 |
Post-modification outstanding recorded investment | 81 | ' | 288 | 508 |
Default during the quarter | ' | ' | ' | ' |
Number of Contracts | ' | 1 | 1 | 1 |
Recorded investment | ' | 45 | 81 | 45 |
Residential Prime | ' | ' | ' | ' |
Troubled Debt Restructuring | ' | ' | ' | ' |
Number of Contracts | 4 | 1 | 5 | 1 |
Pre-modification outstanding recorded investment | 777 | 121 | 867 | 121 |
Post-modification outstanding recorded investment | 774 | 89 | 862 | 89 |
Default during the quarter | ' | ' | ' | ' |
Number of Contracts | ' | ' | 1 | ' |
Recorded investment | ' | ' | $88 | ' |
FORECLOSED_ASSETS_Details
FORECLOSED ASSETS (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Foreclosed Assets Details | ' | ' | ' | ' |
Balance at beginning of period | $1,336 | $2,642 | $1,774 | $2,939 |
Transfer of loans at net realizable value to foreclosed assets | 538 | 160 | 947 | 568 |
Sale proceeds | -47 | -172 | -698 | -580 |
Loans made on sale of foreclosed assets | -100 | ' | -207 | -140 |
Net gain (loss) from sale of foreclosed assets | 28 | -1 | 88 | 47 |
Provision for write-down charged to operations | -149 | -280 | -298 | -485 |
Balance at end of period | $1,606 | $2,349 | $1,606 | $2,349 |
DEPOSITS_Details
DEPOSITS (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Deposits Details | ' | ' |
Non-interest bearing demand | $92,141 | $89,819 |
Interest bearing demand (NOWs) | 111,993 | 131,404 |
Savings | 55,638 | 53,799 |
Money market | 125,508 | 124,501 |
Retail and local time | 103,270 | 111,462 |
Broker and national time | 65,689 | 54,457 |
Total deposits | $554,239 | $565,442 |
OTHER_BORROWINGS_Details_Narra
OTHER BORROWINGS (Details Narrative) (USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2013 | Sep. 30, 2013 | Dec. 31, 2012 |
Other Borrowings Details Narrative | ' | ' | ' |
Securities Pledged for Repurchase Agreements | ' | $29,310 | $21,931 |
Proceeds from Bank Stock Term Loan | 2,000 | ' | ' |
Fiscal maturity of Bank Stock Term Loan | ' | ' | ' |
Required Principal Payment 2013 | ' | 500 | ' |
Required Principal Payment 2014 | ' | 1,000 | ' |
Required Principal Payment 2015 | ' | $500 | ' |
OTHER_BORROWINGS_Details
OTHER BORROWINGS (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Other Borrowings Details | ' | ' |
Federal funds purchased | ' | ' |
Short-term repurchase agreements | 5,353 | 7,228 |
Bank stock term loan | 1,500 | ' |
Wholesale structured repurchase agreements | 13,500 | 13,500 |
Total other borrowings | $20,353 | $20,728 |
OTHER_BORROWINGS_Details_1
OTHER BORROWINGS (Details 1) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
As of end of period: | ' | ' | ' | ' |
Weighted average rate | 3.09% | 3.04% | 3.09% | 3.04% |
For the period: | ' | ' | ' | ' |
Highest month-end balance | $24,100 | $19,273 | $24,100 | $19,934 |
Daily average balance | $22,797 | $18,725 | $22,368 | $19,166 |
Weighted average rate | 2.87% | 3.19% | 2.93% | 3.12% |
SENIOR_SUBORDINATED_NOTES_Deta
SENIOR SUBORDINATED NOTES (Details Narrative) (USD $) | 9 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Mar. 31, 2013 | Sep. 30, 2013 | Dec. 31, 2009 |
Senior Subordinated Notes | Senior Subordinated Notes | Senior Subordinated Notes | |||
Proceeds Notes issued | ' | ' | $6,000 | $4,000 | $7,000 |
Interest rate on notes payable | ' | ' | ' | 3.75% | 8.00% |
Repayments of notes, cash | 3,000 | ' | ' | 1,000 | ' |
Amortizing term note to Bankers' Bank, Madison, WI | ' | ' | ' | $2,000 | ' |
Interest rate, variable basis | ' | ' | ' | '90-day LIBOR | ' |
Interest rate, spread on variable basis | ' | ' | ' | 3.00% | ' |
DERIVATIVE_INSTRUMENTS_AND_HED2
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Details Narrative) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 |
In Thousands, unless otherwise specified | Interest Rate Swaps | ||
Unrealized loss on interest rate swap, gross | ' | ' | ($183) |
Unrealized loss on interest rate swap, net of tax | ' | ' | -111 |
Interest Rate Swaps Collateral Cash | $570 | $850 | ' |
DERIVATIVE_INSTRUMENTS_AND_HED3
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Details) (USD $) | 9 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Dec. 31, 2012 |
Interest rate swaps to hedge variable-rate debt outstanding: | ' | ' |
Notional Amount | $7,500 | $7,500 |
Pay fixed rate | 2.72% | 2.72% |
Receive variable rate | 0.25% | 0.31% |
Interest Rate Swaps | ' | ' |
Interest rate swaps to hedge variable-rate debt outstanding: | ' | ' |
Maturity | 15-Sep-17 | 15-Sep-17 |
Unrealized gain (loss) fair value | ($485) | ($699) |
DERIVATIVE_INSTRUMENTS_AND_HED4
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Details1) (USD $) | 9 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Dec. 31, 2012 |
Floating interest rate swaps were outstanding with customers | ' | ' |
Notional Amount | $7,500 | $7,500 |
Not Designated as Hedging Instrument | Interest Rate Swaps | ' | ' |
Floating interest rate swaps were outstanding with customers | ' | ' |
Notional Amount | 14,488 | 14,979 |
Fixed rate | 1.99% | 1.99% |
Variable rate | 0.17% | 0.21% |
Derivative Maturity Date Low End | '2015-03-31 | '2015-03-31 |
Derivative Maturity Date High End | '2021-10-31 | '2021-10-31 |
Weighted average remaining term | '3 years 2 months 12 days | '3 years 10 months 24 days |
Unrealized gain (loss) fair value | $361 | $673 |
DERIVATIVE_INSTRUMENTS_AND_HED5
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Details2) (USD $) | 9 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Dec. 31, 2012 |
The following floating interest rate swaps were outstanding with correspondent banks: | ' | ' |
Notional Amount | $7,500 | $7,500 |
Not Designated as Hedging Instrument | Interest Rate Swap Correspondent Banks | ' | ' |
The following floating interest rate swaps were outstanding with correspondent banks: | ' | ' |
Notional Amount | 14,488 | 14,979 |
Fixed rate | 1.99% | 1.99% |
Variable rate | 0.17% | 0.21% |
Derivative Maturity Date Low End | '2015-03-31 | '2015-03-31 |
Derivative Maturity Date High End | '2021-10-31 | '2021-10-31 |
Weighted average remaining term | '3 years 2 months 12 days | '3 years 10 months 24 days |
Unrealized gain (loss) fair value | ($361) | ($673) |
INCOME_TAX_EFFECTS_ON_ITEMS_OF2
INCOME TAX EFFECTS ON ITEMS OF COMPREHENSIVE INCOME (LOSS) (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Mar. 31, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Pre-Tax Income (Expense) | ' | ' | ' | ' | ' |
Unrealized loss on securities available for sale | ($416) | ' | $27 | ($1,277) | ($94) |
Reclassification adjustment for gain included in net income | ' | -12 | ' | -12 | ' |
Accretion (Amortization) of unrealized gain on securities available for sale transferred to securities held to maturity included in net income | 3 | ' | -110 | -319 | -346 |
Unrealized gain (loss) on interest rate swap | -62 | ' | -106 | 75 | -292 |
Relassification of interest rate swap settlements included in earnings | 47 | ' | 43 | 139 | 127 |
Totals | -428 | ' | -146 | -1,394 | -605 |
Income Tax Expense (Credit) | ' | ' | ' | ' | ' |
Unrealized gain (loss) on securities available for sale | -151 | ' | 13 | -497 | -34 |
Reclassification adjustment for gain included in net income | ' | ' | ' | -5 | ' |
Amortization of unrealized gain on securities available for sale transferred to securities held to maturity included in net income | -13 | ' | -44 | -144 | -136 |
Unrealized gain (loss) on interest rate swap | -23 | ' | -42 | 30 | -115 |
Relassification of interest rate swap settlements included in earnings | 19 | ' | 17 | 55 | 50 |
Totals | ($168) | ' | ($56) | ($561) | ($235) |
RECLASSIFICATIONS_OUT_OF_ACCUM1
RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Mar. 31, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Pre-Tax Income (Expense) | ' | ' | ' | ' | ' |
Reclassification of gain on sale of securities available for sale | ' | $12 | ' | $12 | ' |
Relassification of interest rate swap settlements included in earnings | 47 | ' | 43 | 139 | 127 |
Post-Tax Income (Expense) | ' | ' | ' | ' | ' |
Reclassification of gain on sale of securities available for sale, net of tax | ' | 7 | ' | 7 | ' |
Reclassification adjustment of interest rate swap settlements included in earnings | $28 | ' | $26 | $84 | $77 |
STOCKBASED_COMPENSATION_Detail
STOCK-BASED COMPENSATION (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2013 | Mar. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Stock-Based Compensation Details Narrative | ' | ' | ' | ' |
Value of restricted stocks granted to employees at grant date | $210 | $200 | ' | ' |
Compensation expense recorded from amortization of restricted stock expected to vest | ' | ' | $109 | $79 |
STOCKBASED_COMPENSATION_Detail1
STOCK-BASED COMPENSATION (Details) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Stock-Based Compensation Details | ' | ' |
Restricted Stock Balance, beginning | 30,409 | 25,572 |
Restricted stock granted | 8,076 | 8,895 |
Restricted stock legally vested | -5,883 | -4,058 |
Restricted Stock Balance, ending | 32,602 | 30,409 |
Weighted Average Grant Price, beginning | $21.30 | $17.79 |
Weighted Average Grant Price, granted | $26 | $22.48 |
Weighted Average Grant Price, vested | ($17.85) | ($16.08) |
Weighted Average Grant Price, ending | $21.30 | $19.39 |
STOCKBASED_COMPENSATION_Detail2
STOCK-BASED COMPENSATION (Details 1) (USD $) | Sep. 30, 2013 |
In Thousands, unless otherwise specified | |
Compensation Expense Schedule Assuming all RSUs Vest | ' |
Compensation expense 2013 | $146 |
Compensation expense 2014 | 146 |
Compensation expense 2015 | 137 |
Compensation expense 2016 | 122 |
Compensation expense 2017 | 82 |
Thereafter | 42 |
Compensation expense, total | $675 |
EARNINGS_PER_SHARE_Details_Nar
EARNINGS PER SHARE (Details Narrative) | 12 Months Ended |
Dec. 31, 2012 | |
Earnings Per Share Details Narrative | ' |
Stock Dividend - percentage | 5.00% |
EARNINGS_PER_SHARE_Details
EARNINGS PER SHARE (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Earnings Per Share Details | ' | ' | ' | ' |
Net income | $13 | $1,226 | $3,183 | $4,324 |
Weighted average shares outstanding | 1,651,518 | 1,663,472 | 1,653,098 | 1,663,221 |
Effect of dilutive stock options outstanding | ' | ' | ' | 76 |
Diluted weighted average shares outstanding | 1,651,518 | 1,663,472 | 1,653,098 | 1,663,297 |
Basic earnings per share | $0.01 | $0.74 | $1.93 | $2.60 |
Diluted earnings per share | $0.01 | $0.74 | $1.93 | $2.60 |
FAIR_VALUE_MEASUREMENTS_Detail
FAIR VALUE MEASUREMENTS (Details Narrative) (USD $) | 9 Months Ended | |||||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Jun. 30, 2013 | Dec. 31, 2012 | Jun. 30, 2012 | Dec. 31, 2011 |
Loans Receivable Carrying Value | $529,692 | ' | ' | $492,230 | ' | ' |
Loans Receivable Allowance | 2,274 | ' | ' | 2,434 | ' | ' |
Foreclosed assets acquired through or in lieu of foreclosure | 947 | 568 | ' | ' | ' | ' |
Foreclosed Assets, recorded at fair value | 1,606 | 2,349 | 1,336 | 1,774 | 2,642 | 2,939 |
Foreclosed Assets Carrying Value | 2,482 | ' | ' | 2,352 | ' | ' |
Foreclosed assets, Impairment charge | 298 | 485 | ' | ' | ' | ' |
Mortgage Servicing Rights, carrying Value | 1,703 | ' | ' | 1,513 | ' | ' |
Mortgage servicing rights Fair Value | 1,662 | ' | ' | 1,233 | ' | ' |
Mortgage Servicing Rights Impairment Allowance | 41 | ' | ' | 280 | ' | ' |
Impaired | ' | ' | ' | ' | ' | ' |
Loans Receivable Carrying Value | 2,278 | ' | ' | 3,955 | ' | ' |
Impaired loans Fair value | 1,758 | ' | ' | 2,973 | ' | ' |
Loans Receivable Allowance | $520 | ' | ' | $982 | ' | ' |
Lower Range | ' | ' | ' | ' | ' | ' |
Selling costs percentage | 5.00% | ' | ' | ' | ' | ' |
Upper Range | ' | ' | ' | ' | ' | ' |
Selling costs percentage | 15.00% | ' | ' | ' | ' | ' |
FAIR_VALUE_MEASUREMENTS_Detail1
FAIR VALUE MEASUREMENTS (Details) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Nonrecurring Fair Value Unobservable Inputs | ' |
Direct annual servicing cost per loan | $50 |
Direct annual servicing cost per loan in process of foreclosure | $500 |
Weighted average prepayment speed: CPR | 27.02% |
Weighted average prepayment speed: PSA | 530.21% |
Weighted average discount rate | 7.96% |
Asset reinvestment rate | 4.00% |
Short-term cost of funds | 0.25% |
Escrow inflation adjustment | 1.00% |
Servicing cost inflation adjustment | 1.00% |
FAIR_VALUE_MEASUREMENTS_Detail2
FAIR VALUE MEASUREMENTS (Details 1) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Securities available for sale: | ' | ' |
Total securities available for sale | $61,280 | $75,387 |
Siginficant Other Observable Inputs (Level 2) | ' | ' |
Securities available for sale: | ' | ' |
Mortgage rate lock commitments | 26 | 91 |
Interest rate swap agreements | 361 | 673 |
Liabilities - Interest rate swap agreements | 846 | 1,372 |
Estimate of Fair Value, Fair Value Disclosure | ' | ' |
Securities available for sale: | ' | ' |
Mortgage rate lock commitments | 26 | 91 |
Interest rate swap agreements | 361 | 673 |
Liabilities - Interest rate swap agreements | 846 | 1,372 |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ' | ' |
Securities available for sale: | ' | ' |
Total securities available for sale | ' | ' |
Loans held for sale | ' | ' |
Mortgage rate lock commitments | ' | ' |
Interest rate swap agreements | ' | ' |
Total assets | ' | ' |
Liabilities - Interest rate swap agreements | ' | ' |
Recurring | Siginficant Other Observable Inputs (Level 2) | ' | ' |
Securities available for sale: | ' | ' |
Total securities available for sale | 61,233 | 75,340 |
Loans held for sale | 824 | 884 |
Mortgage rate lock commitments | 26 | 91 |
Interest rate swap agreements | 361 | 673 |
Total assets | 62,444 | 76,988 |
Liabilities - Interest rate swap agreements | 846 | 1,372 |
Recurring | Significant Unobservable Inputs (Level 3) | ' | ' |
Securities available for sale: | ' | ' |
Total securities available for sale | 47 | 47 |
Loans held for sale | ' | ' |
Mortgage rate lock commitments | ' | ' |
Interest rate swap agreements | ' | ' |
Total assets | 47 | 47 |
Liabilities - Interest rate swap agreements | ' | ' |
Recurring | Estimate of Fair Value, Fair Value Disclosure | ' | ' |
Securities available for sale: | ' | ' |
Total securities available for sale | 61,280 | 75,387 |
Loans held for sale | 824 | 884 |
Mortgage rate lock commitments | 26 | 91 |
Interest rate swap agreements | 361 | 673 |
Total assets | 62,491 | 77,035 |
Liabilities - Interest rate swap agreements | 846 | 1,372 |
US Treasury securities and obligations of US Government corps and agencies | ' | ' |
Securities available for sale: | ' | ' |
Total securities available for sale | 994 | 10,027 |
US Treasury securities and obligations of US Government corps and agencies | Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ' | ' |
Securities available for sale: | ' | ' |
Total securities available for sale | ' | ' |
US Treasury securities and obligations of US Government corps and agencies | Recurring | Siginficant Other Observable Inputs (Level 2) | ' | ' |
Securities available for sale: | ' | ' |
Total securities available for sale | 994 | 10,027 |
US Treasury securities and obligations of US Government corps and agencies | Recurring | Significant Unobservable Inputs (Level 3) | ' | ' |
Securities available for sale: | ' | ' |
Total securities available for sale | ' | ' |
US Treasury securities and obligations of US Government corps and agencies | Recurring | Estimate of Fair Value, Fair Value Disclosure | ' | ' |
Securities available for sale: | ' | ' |
Total securities available for sale | 994 | 10,027 |
US Agency Issued Residential MBS and CMO | Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ' | ' |
Securities available for sale: | ' | ' |
Total securities available for sale | ' | ' |
US Agency Issued Residential MBS and CMO | Recurring | Siginficant Other Observable Inputs (Level 2) | ' | ' |
Securities available for sale: | ' | ' |
Total securities available for sale | 59,175 | 59,640 |
US Agency Issued Residential MBS and CMO | Recurring | Significant Unobservable Inputs (Level 3) | ' | ' |
Securities available for sale: | ' | ' |
Total securities available for sale | ' | ' |
US Agency Issued Residential MBS and CMO | Recurring | Estimate of Fair Value, Fair Value Disclosure | ' | ' |
Securities available for sale: | ' | ' |
Total securities available for sale | 59,175 | 59,640 |
Privately issued residential collateralized mortgage obligations | ' | ' |
Securities available for sale: | ' | ' |
Total securities available for sale | 114 | 173 |
Privately issued residential collateralized mortgage obligations | Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ' | ' |
Securities available for sale: | ' | ' |
Total securities available for sale | ' | ' |
Privately issued residential collateralized mortgage obligations | Recurring | Siginficant Other Observable Inputs (Level 2) | ' | ' |
Securities available for sale: | ' | ' |
Total securities available for sale | 114 | 173 |
Privately issued residential collateralized mortgage obligations | Recurring | Significant Unobservable Inputs (Level 3) | ' | ' |
Securities available for sale: | ' | ' |
Total securities available for sale | ' | ' |
Privately issued residential collateralized mortgage obligations | Recurring | Estimate of Fair Value, Fair Value Disclosure | ' | ' |
Securities available for sale: | ' | ' |
Total securities available for sale | 114 | 173 |
Nonrated SBA Loan Fund | ' | ' |
Securities available for sale: | ' | ' |
Total securities available for sale | 950 | ' |
Nonrated SBA Loan Fund | Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ' | ' |
Securities available for sale: | ' | ' |
Total securities available for sale | ' | ' |
Nonrated SBA Loan Fund | Recurring | Siginficant Other Observable Inputs (Level 2) | ' | ' |
Securities available for sale: | ' | ' |
Total securities available for sale | 950 | ' |
Nonrated SBA Loan Fund | Recurring | Significant Unobservable Inputs (Level 3) | ' | ' |
Securities available for sale: | ' | ' |
Total securities available for sale | ' | ' |
Nonrated SBA Loan Fund | Recurring | Estimate of Fair Value, Fair Value Disclosure | ' | ' |
Securities available for sale: | ' | ' |
Total securities available for sale | 950 | ' |
Other equity securities | ' | ' |
Securities available for sale: | ' | ' |
Total securities available for sale | 47 | 47 |
Other equity securities | Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ' | ' |
Securities available for sale: | ' | ' |
Total securities available for sale | ' | ' |
Other equity securities | Recurring | Siginficant Other Observable Inputs (Level 2) | ' | ' |
Securities available for sale: | ' | ' |
Total securities available for sale | ' | ' |
Other equity securities | Recurring | Significant Unobservable Inputs (Level 3) | ' | ' |
Securities available for sale: | ' | ' |
Total securities available for sale | 47 | 47 |
Other equity securities | Recurring | Estimate of Fair Value, Fair Value Disclosure | ' | ' |
Securities available for sale: | ' | ' |
Total securities available for sale | 47 | 47 |
Nonrated commercial paper | ' | ' |
Securities available for sale: | ' | ' |
Total securities available for sale | ' | 5,500 |
Nonrated commercial paper | Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ' | ' |
Securities available for sale: | ' | ' |
Total securities available for sale | ' | ' |
Nonrated commercial paper | Recurring | Siginficant Other Observable Inputs (Level 2) | ' | ' |
Securities available for sale: | ' | ' |
Total securities available for sale | ' | 5,500 |
Nonrated commercial paper | Recurring | Significant Unobservable Inputs (Level 3) | ' | ' |
Securities available for sale: | ' | ' |
Total securities available for sale | ' | ' |
Nonrated commercial paper | Recurring | Estimate of Fair Value, Fair Value Disclosure | ' | ' |
Securities available for sale: | ' | ' |
Total securities available for sale | ' | $5,500 |
FAIR_VALUE_MEASUREMENTS_Detail3
FAIR VALUE MEASUREMENTS (Details 2) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Reconciliation of Fair Value Measurements | ' | ' |
Balance, beginning | $47 | $47 |
Total realized/unrealized gains and (losses): | ' | ' |
Included in earnings | ' | ' |
Included in other comprehensive income | ' | ' |
Purchases, maturities, and sales | ' | ' |
Transferred from Level 2 to Level 3 | ' | ' |
Transferred to held to maturity classification | ' | ' |
Balance, ending | 47 | 47 |
Total gains or (losses) for the period included in earnings attributable to the change in unrealized gains or losses relating to assets still held at year end | ' | ' |
FAIR_VALUE_MEASUREMENTS_Detail4
FAIR VALUE MEASUREMENTS (Details 3) (USD $) | Sep. 30, 2013 | Jun. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | ||||||
Foreclosed Assets | $1,606 | $1,336 | $1,774 | $2,349 | $2,642 | $2,939 |
Mortgage servicing rights | 1,662 | ' | 1,233 | ' | ' | ' |
Nonrecurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ' | ' | ' | ' | ' | ' |
Impaired loans | ' | ' | ' | ' | ' | ' |
Foreclosed Assets | ' | ' | ' | ' | ' | ' |
Mortgage servicing rights | ' | ' | ' | ' | ' | ' |
Total assets | ' | ' | ' | ' | ' | ' |
Nonrecurring | Siginficant Other Observable Inputs (Level 2) | ' | ' | ' | ' | ' | ' |
Impaired loans | 323 | ' | 328 | ' | ' | ' |
Foreclosed Assets | 695 | ' | 752 | ' | ' | ' |
Mortgage servicing rights | ' | ' | ' | ' | ' | ' |
Total assets | 1,018 | ' | 1,080 | ' | ' | ' |
Nonrecurring | Significant Unobservable Inputs (Level 3) | ' | ' | ' | ' | ' | ' |
Impaired loans | 1,435 | ' | 2,645 | ' | ' | ' |
Foreclosed Assets | 911 | ' | 1,022 | ' | ' | ' |
Mortgage servicing rights | 1,662 | ' | 1,233 | ' | ' | ' |
Total assets | 4,008 | ' | 4,900 | ' | ' | ' |
Nonrecurring | Estimate of Fair Value, Fair Value Disclosure | ' | ' | ' | ' | ' | ' |
Impaired loans | 1,758 | ' | 2,973 | ' | ' | ' |
Foreclosed Assets | 1,606 | ' | 1,774 | ' | ' | ' |
Mortgage servicing rights | 1,662 | ' | 1,233 | ' | ' | ' |
Total assets | $5,026 | ' | $5,980 | ' | ' | ' |
FAIR_VALUE_MEASUREMENTS_Detail5
FAIR VALUE MEASUREMENTS (Details 4) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Quoted Prices in Active Markets for Identical Assets (Level 1) | ' | ' |
Cash and cash equivalents | $17,080 | $48,847 |
Cash surrender value of life insurance | 12,723 | 11,813 |
Siginficant Other Observable Inputs (Level 2) | ' | ' |
Securities | 131,350 | 145,795 |
Net loans receivable and loans held for sale | 1,147 | 1,212 |
Mortgage rate lock commitments | 26 | 91 |
Interest rate swap agreements | 361 | 673 |
FHLB advances | 58,848 | 51,590 |
Other borrowings | 14,489 | 14,890 |
Interest rate swap agreements | 846 | 1,372 |
Significant Unobservable Inputs (Level 3) | ' | ' |
Securities | 1,844 | 1,956 |
Other investments | 2,528 | 4,538 |
Net loans receivable and loans held for sale | 520,832 | 483,713 |
Accrued interest receivable | 2,257 | 2,157 |
Mortgage servicing rights | 1,662 | 1,233 |
FHLB stock | 3,594 | 2,506 |
Deposits | 533,077 | 568,014 |
Other borrowings | 6,788 | 7,228 |
Senior subordinated notes | 3,471 | 7,000 |
Junior subordinated debentures | 4,461 | 4,911 |
Accrued interest payable | 455 | 697 |
Carrying Amount | ' | ' |
Cash and cash equivalents | 17,080 | 48,847 |
Securities | 133,052 | 145,209 |
Other investments | 2,481 | 4,465 |
Net loans receivable and loans held for sale | 517,697 | 478,875 |
Accrued interest receivable | 2,257 | 2,157 |
Mortgage servicing rights | 1,662 | 1,233 |
Mortgage rate lock commitments | 26 | 91 |
FHLB stock | 3,594 | 2,506 |
Cash surrender value of life insurance | 12,723 | 11,813 |
Interest rate swap agreements | 361 | 673 |
Deposits | 554,239 | 565,442 |
FHLB advances | 58,124 | 50,124 |
Other borrowings | 20,353 | 20,728 |
Senior subordinated notes | 4,000 | 7,000 |
Junior subordinated debentures | 7,732 | 7,732 |
Interest rate swap agreements | 846 | 1,372 |
Accrued interest payable | 455 | 697 |
Estimate of Fair Value, Fair Value Disclosure | ' | ' |
Cash and cash equivalents | 17,080 | 48,847 |
Securities | 133,194 | 147,751 |
Other investments | 2,528 | 4,538 |
Net loans receivable and loans held for sale | 521,979 | 484,925 |
Accrued interest receivable | 2,257 | 2,157 |
Mortgage servicing rights | 1,662 | 1,233 |
Mortgage rate lock commitments | 26 | 91 |
FHLB stock | 3,594 | 2,506 |
Cash surrender value of life insurance | 12,723 | 11,813 |
Interest rate swap agreements | 361 | 673 |
Deposits | 533,077 | 568,014 |
FHLB advances | 58,848 | 51,590 |
Other borrowings | 22,472 | 22,118 |
Senior subordinated notes | 3,471 | 7,000 |
Junior subordinated debentures | 4,461 | 4,911 |
Interest rate swap agreements | 846 | 1,372 |
Accrued interest payable | $455 | $697 |