UNITED STATES |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
OHIO | 34-1803915 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
601 Clinton Street, Defiance, Ohio | 43512 |
(Address of principal executive offices) | (Zip code) |
Common Stock, Par Value $0.01 Per Share | The NASDAQ Stock Market | |
(Title of Class) | (Name of each exchange on which registered) |
Page | ||
PART I | ||
Item 1. | Business | 3 |
Item 1A. | Risk Factors | |
Item 1B. | Unresolved Staff Comments | |
Item 2. | Properties | |
Item 3. | Legal Proceedings | |
Item 4. | Mine Safety Disclosures | |
PART II | ||
Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | |
Item 6. | Selected Financial Data | |
Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operation | |
Item 7A. | Quantitative and Qualitative Disclosures About Market Risk | |
Item 8. | Financial Statements and Supplementary Data | |
Item 9. | Changes in and Disagreements With Accountants on Accounting and Financial | |
Item 9A. | Controls and Procedures | |
Item 9B. | Other Information | |
PART III | ||
Item 10. | Directors, Executive Officers and Corporate Governance | |
Item 11. | Executive Compensation | |
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | |
Item 13. | Certain Relationships and Related Transactions, and Director Independence | |
Item 14. | Principal Accounting Fees and Services | |
PART IV | ||
Item 15. | Exhibits, Financial Statement Schedules | |
SIGNATURES |
- 2 - |
United State Securities and Exchange Commission (“SEC”).
- 3 - | ||
On March 14, 2008, First Defiance completed the acquisition of Pavilion Bancorp, Inc (“Pavilion”) and its subsidiary, Bank of Lenawee. That acquisition added eight banking branch offices located in Lenawee and Hillsdale counties in Michigan. The one branch in Hillsdale County that was acquired in the Pavilion acquisition was closed in January 2010. On January 21, 2005, First Defiance completed the acquisition of ComBanc, Inc. (“ComBanc”) and its subsidiary, the Commercial Bank, Delphos, Ohio. That acquisition added four branch offices located in Allen County, Ohio, which was adjacent to First Defiance’s existing footprint. On April 8, 2005, First Defiance completed the acquisition of the Genoa Savings and Loan Company, (“Genoa”) which added three offices in the metropolitan Toledo, Ohio area.
- 4 - | ||
- 5 - | ||
2013.
Contractually Maturing | Total | |||||||||||||||||||||||||||||||||||||||
Weighted | Weighted | Weighted | Weighted | |||||||||||||||||||||||||||||||||||||
Under 1 | Average | 1 - 5 | Average | 6-10 | Average | Over 10 | Average | |||||||||||||||||||||||||||||||||
Year | Rate | Years | Rate | Years | Rate | Years | Rate | Amount | Yield | |||||||||||||||||||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||||||||||||||||||||||||
Mortgage-backed securities | $ | 6,222 | 3.80 | % | $ | 14,687 | 3.71 | % | $ | 8,094 | 3.54 | % | $ | 2,380 | 3.26 | % | $ | 31,383 | 3.64 | % | ||||||||||||||||||||
CMOs | 15,995 | 3.89 | 28,522 | 3.42 | 11,076 | 2.96 | 1,873 | 2.53 | 57,466 | 3.44 | ||||||||||||||||||||||||||||||
U.S. treasury bonds | 1,000 | 0.63 | - | - | - | - | - | - | 1,000 | 0.63 | ||||||||||||||||||||||||||||||
U.S. government and federal agency obligations | - | - | 4,000 | 2.18 | 7,000 | 1.86 | - | - | 11,000 | 1.97 | ||||||||||||||||||||||||||||||
Obligations of states and political subdivisions (1) | 250 | 5.49 | 2,985 | 3.36 | 26,164 | 3.48 | 46,204 | 3.93 | 75,603 | 3.76 | ||||||||||||||||||||||||||||||
Trust preferred stock and preferred stock | - | - | - | - | 17 | - | 3,640 | 2.26 | 3,657 | 2.25 | ||||||||||||||||||||||||||||||
Corporate bonds | - | - | 9,000 | 0.83 | - | - | - | - | 9,000 | 0.83 | ||||||||||||||||||||||||||||||
Total | $ | 23,467 | $ | 59,194 | $ | 52,351 | $ | 54,097 | $ | 189,109 | ||||||||||||||||||||||||||||||
Unamortized premiums/ (discounts) | (1,963 | ) | ||||||||||||||||||||||||||||||||||||||
Unrealized gain on securities available for sale | 7,463 | |||||||||||||||||||||||||||||||||||||||
Total | $ | 194,609 | ||||||||||||||||||||||||||||||||||||||
(1) Tax exempt yield based on effective tax rate of 35%. Actual coupon rate is approximately equal to the weighted average rate disclosed in the table times 65%.
Contractually Maturing | Total | |||||||||||||||||||||||||
Weighted | Weighted | Weighted | Weighted | |||||||||||||||||||||||
Under 1 | Average | 1 - 5 | Average | 6-10 | Average | Over 10 | Average | |||||||||||||||||||
Year | Rate | Years | Rate | Years | Rate | Years | Rate | Amount | Yield | |||||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||||||||||
Mortgage-backed securities | $ | 6,088 | 3.54 | % | $ | 17,057 | 3.36 | % | $ | 11,061 | 3.21 | % | $ | 5,362 | 3.03 | % | $ | 39,568 | 3.30 | % | ||||||
CMOs | 9,646 | 3.33 | 27,274 | 3.05 | 16,840 | 2.71 | 5,293 | 2.53 | 59,052 | 2.95 | ||||||||||||||||
U.S. government and federal agency obligations | - | - | - | - | 5,000 | 1.80 | - | - | 5,000 | 1.80 | ||||||||||||||||
Obligations of states and political subdivisions (1) | 135 | 4.79 | 4,343 | 3.42 | 30,876 | 3.44 | 42,516 | 3.84 | 77,870 | 3.66 | ||||||||||||||||
Trust preferred stock and preferred stock | - | - | - | - | 17 | - | 3,247 | 2.38 | 3,264 | 2.37 | ||||||||||||||||
Corporate bonds | 2,000 | 1.04 | 3,854 | 0.64 | 3,000 | 1.16 | - | - | 8,854 | 0.90 | ||||||||||||||||
Total | $ | 17,869 | $ | 52,528 | $ | 66,794 | $ | 56,418 | $ | 193,608 | ||||||||||||||||
Unamortized premiums/ (discounts) | 3,550 | |||||||||||||||||||||||||
Unrealized gain on securities available for sale | 1,399 | |||||||||||||||||||||||||
Total | $ | 198,557 |
(1) | Tax exempt yield based on effective tax rate of 35%. Actual coupon rate is approximately equal to the weighted average rate disclosed in the table times 65%. |
- 6 - | ||
December 31 | ||||||||||||
2012 | 2011 | 2010 | ||||||||||
(In Thousands) | ||||||||||||
Available-for-sale securities: | ||||||||||||
Obligations of U.S. government corporations and agencies | $ | 11,069 | $ | 17,085 | $ | 11,985 | ||||||
U.S. treasury bonds | 1,002 | 2,010 | - | |||||||||
Obligations of state and political subdivisions | 82,611 | 71,503 | 52,750 | |||||||||
CMOs, REMICS and mortgage-backed securities | 88,927 | 132,619 | 95,174 | |||||||||
Trust preferred stock and preferred stock | 1,608 | 1,450 | 1,546 | |||||||||
Corporate bonds | 8,884 | 8,252 | 3,797 | |||||||||
Total | $ | 194,101 | $ | 232,919 | $ | 165,252 | ||||||
Held-to-maturity securities: | ||||||||||||
Mortgage-backed securities | $ | 291 | $ | 353 | $ | 440 | ||||||
Obligations of state and political subdivisions | 217 | 308 | 399 | |||||||||
Total | $ | 508 | $ | 661 | $ | 839 |
December 31 | ||||||||||
2013 | 2012 | 2011 | ||||||||
(In Thousands) | ||||||||||
Available-for-sale securities: | ||||||||||
Obligations of U.S. government corporations and agencies | $ | 4,921 | $ | 11,069 | $ | 17,085 | ||||
U.S. treasury bonds | - | 1,002 | 2,010 | |||||||
Obligations of state and political subdivisions | 80,220 | 82,611 | 71,503 | |||||||
CMOs, REMICS and mortgage-backed securities | 101,133 | 88,927 | 132,619 | |||||||
Trust preferred stock and preferred stock | 2,954 | 1,608 | 1,450 | |||||||
Corporate bonds | 8,942 | 8,884 | 8,252 | |||||||
Total | $ | 198,170 | $ | 194,101 | $ | 232,919 | ||||
Held-to-maturity securities: | ||||||||||
Mortgage-backed securities | $ | 201 | $ | 291 | $ | 353 | ||||
Obligations of state and political subdivisions | 186 | 217 | 308 | |||||||
Total | $ | 387 | $ | 508 | $ | 661 |
December 31 | ||||||||||||||||||||||||||||||||||||
2012 | 2011 | 2010 | ||||||||||||||||||||||||||||||||||
Percentage | Percentage | Percentage | ||||||||||||||||||||||||||||||||||
Number | Aggregate | of Aggregate | Number | Aggregate | of Aggregate | Number | Aggregate | of Aggregate | ||||||||||||||||||||||||||||
of | Principal | Principal | of | Principal | Principal | of | Principal | Principal | ||||||||||||||||||||||||||||
Rate | Loans | Balance | Balance | Loans | Balance | Balance | Loans | Balance | Balance | |||||||||||||||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||||||||||||||||||||
Less than 5.00% | 8,601 | $ | 949,306 | 71.45 | % | 6,287 | $ | 696,666 | 54.84 | % | 5,074 | $ | 576,628 | 45.22 | % | |||||||||||||||||||||
5.00% - 5.99% | 3,218 | 243,077 | 18.29 | 4,457 | 370,355 | 29.15 | 5,059 | 437,984 | 34.35 | |||||||||||||||||||||||||||
6.00% - 6.99% | 1,746 | 116,855 | 8.80 | 2,383 | 177,353 | 13.96 | 2,923 | 229,524 | 18.00 | |||||||||||||||||||||||||||
7.00% - 7.99% | 322 | 18,055 | 1.36 | 402 | 24,288 | 1.91 | 468 | 29,047 | 2.28 | |||||||||||||||||||||||||||
8.00% - 8.99% | 35 | 1,231 | 0.09 | 42 | 1,523 | 0.12 | 49 | 1,719 | 0.13 | |||||||||||||||||||||||||||
9.00% and over | 5 | 193 | 0.01 | 5 | 202 | 0.02 | 7 | 278 | 0.02 | |||||||||||||||||||||||||||
Total | 13,927 | $ | 1,328,717 | 100.00 | % | 13,576 | $ | 1,270,387 | 100.00 | % | 13,580 | $ | 1,275,180 | 100.00 | % | |||||||||||||||||||||
- 7 - | ||
December 31 | ||||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||||
Percentage | Percentage | Percentage | ||||||||||||||||||||
Number | Aggregate | of Aggregate | Number | Aggregate | of Aggregate | Number | Aggregate | of Aggregate | ||||||||||||||
of | Principal | Principal | of | Principal | Principal | of | Principal | Principal | ||||||||||||||
Rate | Loans | Balance | Balance | Loans | Balance | Balance | Loans | Balance | Balance | |||||||||||||
(Dollars in Thousands) | ||||||||||||||||||||||
Less than 3.00% | 1,901 | $ | 220,376 | 16.07 | % | 1,182 | $ | 148,144 | 11.15 | % | 109 | $ | 12,501 | 0.98 | % | |||||||
3.00% -3.99% | 4,771 | 544,512 | 39.71 | 3,822 | 454,634 | 34.22 | 1,693 | 208,158 | 16.39 | |||||||||||||
4.00% -4.99% | 3,508 | 333,469 | 24.32 | 3,597 | 346,528 | 26.08 | 4,485 | 476,007 | 37.47 | |||||||||||||
5.00% - 5.99% | 2,537 | 177,999 | 12.98 | 3,218 | 243,077 | 18.29 | 4,457 | 370,355 | 29.15 | |||||||||||||
6.00% - 6.99% | 1,316 | 80,457 | 5.87 | 1,746 | 116,855 | 8.79 | 2,383 | 177,353 | 13.96 | |||||||||||||
7.00% and over | 286 | 14,428 | 1.05 | 362 | 19,479 | 1.47 | 449 | 26,013 | 2.05 | |||||||||||||
Total | 14,319 | $ | 1,371,241 | 100.00 | % | 13,927 | $ | 1,328,717 | 100.00 | % | 13,576 | $ | 1,270,387 | 100.00 | % |
2012 | 2011 | 2010 | ||||||||||||||||||||||||||||||||||||||||||||||
Maturity | Number of Loans | % of Number of Loans | Unpaid Principal Amount | % of Unpaid Principal Amount | Number of Loans | % of Number of Loans | Unpaid Principal Amount | % of Unpaid Principal Amount | Number of Loans | % of Number of Loans | Unpaid Principal Amount | % of Unpaid Principal Amount | ||||||||||||||||||||||||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||
1–5 years | 507 | 3.64 | % | $ | 10,537 | 0.79 | % | 375 | 2.76 | % | $ | 6,267 | 0.49 | % | 400 | 2.95 | % | $ | 12,692 | 1.00 | % | |||||||||||||||||||||||||||
6–10 years | 4,030 | 28.94 | 395,066 | 29.73 | 1,677 | 12.35 | 72,700 | 5.72 | 1,961 | 14.44 | 90,706 | 7.11 | ||||||||||||||||||||||||||||||||||||
11–15 years | 1,391 | 9.99 | 134,916 | 10.16 | 3,326 | 24.50 | 310,369 | 24.43 | 2,944 | 21.68 | 273,714 | 21.46 | ||||||||||||||||||||||||||||||||||||
16–20 years | 1,846 | 13.25 | 163,929 | 12.34 | 1,026 | 7.56 | 99,650 | 7.84 | 865 | 6.37 | 84,865 | 6.66 | ||||||||||||||||||||||||||||||||||||
21–25 years | 1,370 | 9.84 | 60,618 | 4.56 | 2,347 | 17.29 | 220,429 | 17.35 | 2,426 | 17.86 | 231,232 | 18.13 | ||||||||||||||||||||||||||||||||||||
More than 25 years | 4,783 | 34.34 | 563,651 | 42.42 | 4,825 | 35.54 | 560,972 | 44.17 | 4,984 | 36.70 | 581,971 | 45.64 | ||||||||||||||||||||||||||||||||||||
Total | 13,927 | 100.00 | % | $ | 1,328,717 | 100.00 | % | 13,576 | 100.00 | % | $ | 1,270,387 | 100.00 | % | 13,580 | 100.00 | % | $ | 1,275,180 | 100.00 | % |
December 31 | ||||||||||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||||||||||
% of | % of | % of | ||||||||||||||||||||||||||
% of | Unpaid | Unpaid | % of | Unpaid | Unpaid | % of | Unpaid | Unpaid | ||||||||||||||||||||
Number | Number | Principal | Principal | Number | Number | Principal | Principal | Number | Number | Principal | Principal | |||||||||||||||||
Maturity | of Loans | of Loans | Amount | Amount | of Loans | of Loans | Amount | Amount | of Loans | of Loans | Amount | Amount | ||||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||||||||||||
1–5 years | 846 | 5.91 | % | $ | 19,593 | 1.43 | % | 507 | 3.64 | % | $ | 10,537 | 0.79 | % | 375 | 2.76 | % | $ | 6,267 | 0.49 | % | |||||||
6–10 years | 1,009 | 7.05 | 52,404 | 3.82 | 4,030 | 28.94 | 395,066 | 29.73 | 1,677 | 12.35 | 72,700 | 5.72 | ||||||||||||||||
11–15 years | 4,340 | 30.31 | 420,362 | 30.66 | 1,391 | 9.99 | 134,916 | 10.16 | 3,326 | 24.50 | 310,369 | 24.43 | ||||||||||||||||
16–20 years | 1,704 | 11.90 | 158,467 | 11.56 | 1,846 | 13.25 | 163,929 | 12.34 | 1,026 | 7.56 | 99,650 | 7.84 | ||||||||||||||||
21–25 years | 1,218 | 8.51 | 102,844 | 7.50 | 1,370 | 9.84 | 60,618 | 4.56 | 2,347 | 17.29 | 220,429 | 17.35 | ||||||||||||||||
More than 25 years | 5,202 | 36.32 | 617,571 | 45.03 | 4,783 | 34.34 | 563,651 | 42.42 | 4,825 | 35.54 | 560,972 | 44.17 | ||||||||||||||||
Total | 14,319 | 100.00 | % | $ | 1,371,241 | 100.00 | % | 13,927 | 100.00 | % | $ | 1,328,717 | 100.00 | % | 13,576 | 100.00 | % | $ | 1,270,387 | 100.00 | % |
- 8 - | ||
December 31 | ||||||||||||||||||||||||||||||||||||||||
2012 | 2011 | 2010 | 2009 | 2008 | ||||||||||||||||||||||||||||||||||||
Amount | % | Amount | % | Amount | % | Amount | % | Amount | % | |||||||||||||||||||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||||||||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||||||||||||||||
Single family residential | $ | 200,826 | 13.0 | % | $ | 203,401 | 13.6 | % | $ | 205,938 | 13.5 | % | $ | 227,592 | 13.8 | % | $ | 251,807 | 15.4 | % | ||||||||||||||||||||
Five or more family residential | 122,275 | 7.9 | 126,246 | 8.4 | 120,534 | 7.9 | 103,169 | 6.3 | 78,427 | 4.8 | ||||||||||||||||||||||||||||||
Nonresidential real estate | 675,110 | 43.7 | 649,746 | 43.3 | 646,478 | 42.2 | 703,721 | 42.8 | 677,313 | 41.3 | ||||||||||||||||||||||||||||||
Construction | 37,788 | 2.5 | 31,552 | 2.1 | 30,340 | 2.0 | 48,625 | 3.0 | 72,938 | 4.4 | ||||||||||||||||||||||||||||||
Total real estate loans | 1,035,999 | 67.1 | 1,010,945 | 67.4 | 1,003,290 | 65.6 | 1,083,107 | 65.9 | 1,080,485 | 65.9 | ||||||||||||||||||||||||||||||
Other: | ||||||||||||||||||||||||||||||||||||||||
Consumer finance | 15,936 | 1.0 | 18,887 | 1.3 | 22,848 | 1.5 | 34,105 | 2.0 | 41,012 | 2.5 | ||||||||||||||||||||||||||||||
Commercial | 383,817 | 24.9 | 349,053 | 23.2 | 369,959 | 24.2 | 379,408 | 23.1 | 356,574 | 21.8 | ||||||||||||||||||||||||||||||
Home equity and improvement | 108,718 | 7.0 | 122,143 | 8.1 | 133,593 | 8.7 | 147,977 | 9.0 | 161,106 | 9.8 | ||||||||||||||||||||||||||||||
Total non-real estate loans | 508,471 | 32.9 | 490,083 | 32.6 | 526,400 | 34.4 | 561,490 | 34.1 | 558,692 | 34.1 | ||||||||||||||||||||||||||||||
Total loans | 1,544,470 | 100.0 | % | 1,501,028 | 100.0 | % | 1,529,690 | 100.0 | % | 1,644,597 | 100.0 | % | 1,639,177 | 100.0 | % | |||||||||||||||||||||||||
Less: | ||||||||||||||||||||||||||||||||||||||||
Loans in process | 18,478 | 13,243 | 9,267 | 26,494 | 20,892 | |||||||||||||||||||||||||||||||||||
Deferred loan origination fees | 735 | 709 | 920 | 981 | 1,050 | |||||||||||||||||||||||||||||||||||
Allowance for loan losses | 26,711 | 33,254 | 41,080 | 36,547 | 24,592 | |||||||||||||||||||||||||||||||||||
Net loans | $ | 1,498,546 | $ | 1,453,822 | $ | 1,478,423 | $ | 1,580,575 | $ | 1,592,643 |
December 31 | ||||||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | ||||||||||||||||||||||
Amount | % | Amount | % | Amount | % | Amount | % | Amount | % | |||||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||
Single family residential | $ | 195,752 | 12.2 | % | $ | 200,826 | 13.0 | % | $ | 203,401 | 13.6 | % | $ | 205,938 | 13.5 | % | $ | 227,592 | 13.8 | % | ||||||
Five or more family residential | 148,952 | 9.2 | 122,275 | 7.9 | 126,246 | 8.4 | 120,534 | 7.9 | 103,169 | 6.3 | ||||||||||||||||
Nonresidential real estate | 670,666 | 41.6 | 675,110 | 43.7 | 649,746 | 43.3 | 646,478 | 42.2 | 703,721 | 42.8 | ||||||||||||||||
Construction | 86,058 | 5.3 | 37,788 | 2.5 | 31,552 | 2.1 | 30,340 | 2.0 | 48,625 | 3.0 | ||||||||||||||||
Total real estate loans | 1,101,428 | 68.3 | 1,035,999 | 67.1 | 1,010,945 | 67.4 | 1,003,290 | 65.6 | 1,083,107 | 65.9 | ||||||||||||||||
Other: | ||||||||||||||||||||||||||
Consumer finance | 16,902 | 1.0 | 15,936 | 1.0 | 18,887 | 1.3 | 22,848 | 1.5 | 34,105 | 2.0 | ||||||||||||||||
Commercial | 388,236 | 24.1 | 383,817 | 24.9 | 349,053 | 23.2 | 369,959 | 24.2 | 379,408 | 23.1 | ||||||||||||||||
Home equity and improvement | 106,930 | 6.6 | 108,718 | 7.0 | 122,143 | 8.1 | 133,593 | 8.7 | 147,977 | 9.0 | ||||||||||||||||
Total non-real estate loans | 512,068 | 31.7 | 508,471 | 32.9 | 490,083 | 32.6 | 526,400 | 34.4 | 561,490 | 34.1 | ||||||||||||||||
Total loans | 1,613,496 | 100.0 | % | 1,544,470 | 100.0 | % | 1,501,028 | 100.0 | % | 1,529,690 | 100.0 | % | 1,644,597 | 100.0 | % | |||||||||||
Less: | ||||||||||||||||||||||||||
Loans in process | 32,290 | 18,478 | 13,243 | 9,267 | 26,494 | |||||||||||||||||||||
Deferred loan origination fees | 758 | 735 | 709 | 920 | 981 | |||||||||||||||||||||
Allowance for loan losses | 24,950 | 26,711 | 33,254 | 41,080 | 36,547 | |||||||||||||||||||||
Net loans | $ | 1,555,498 | $ | 1,498,546 | $ | 1,453,822 | $ | 1,478,423 | $ | 1,580,575 |
Years After December 31, 2012 | ||||||||||||||||||||||||||||
Due Less than 1 | Due 1-2 | Due 3-5 | Due 5-10 | Due 10-15 | Due 15+ | Total | ||||||||||||||||||||||
(In Thousands) | ||||||||||||||||||||||||||||
Real estate | $ | 300,811 | $ | 138,188 | $ | 418,785 | $ | 102,165 | $ | 29,533 | $ | 46,517 | $ | 1,035,999 | ||||||||||||||
Non-real estate: | ||||||||||||||||||||||||||||
Commercial | 258,184 | 42,240 | 79,939 | 3,454 | - | - | 383,817 | |||||||||||||||||||||
Home equity and improvement | 64,760 | 8,344 | 31,471 | 3,557 | 226 | 360 | 108,718 | |||||||||||||||||||||
Consumer finance | 6,656 | 4,266 | 4,771 | 214 | 26 | 3 | 15,936 | |||||||||||||||||||||
Total | $ | 630,411 | $ | 193,038 | $ | 534,966 | $ | 109,390 | $ | 29,785 | $ | 46,880 | $ | 1,544,470 |
Years After December 31, 2013 | ||||||||||||||||||||||
Due Less | ||||||||||||||||||||||
than 1 | Due 1-2 | Due 3-5 | Due 5-10 | Due 10-15 | Due 15+ | Total | ||||||||||||||||
(In Thousands) | ||||||||||||||||||||||
Real estate | $ | 274,718 | $ | 124,116 | $ | 525,816 | $ | 95,005 | $ | 27,520 | $ | 54,253 | $ | 1,101,428 | ||||||||
Non-real estate: | ||||||||||||||||||||||
Commercial | 253,764 | 48,475 | 81,270 | 4,727 | - | - | 388,236 | |||||||||||||||
Home equity and improvement | 70,633 | 8,930 | 22,389 | 3,887 | 382 | 709 | 106,930 | |||||||||||||||
Consumer finance | 7,201 | 4,274 | 5,237 | 167 | 23 | - | 16,902 | |||||||||||||||
Total | $ | 606,316 | $ | 185,795 | $ | 634,712 | $ | 103,786 | $ | 27,925 | $ | 54,962 | $ | 1,613,496 |
- 9 - | ||
Floating or | ||||||||||||
Fixed | Adjustable | |||||||||||
Rates | Rates | Total | ||||||||||
(In Thousands) | ||||||||||||
Real estate | $ | 307,820 | $ | 427,368 | $ | 735,188 | ||||||
Commercial | 113,123 | 12,510 | 125,633 | |||||||||
Other | 52,209 | 1,029 | 53,238 | |||||||||
$ | 473,152 | $ | 440,907 | $ | 914,059 |
Floating or | ||||||||||
Fixed | Adjustable | |||||||||
Rates | Rates | Total | ||||||||
(In Thousands) | ||||||||||
Real estate | $ | 302,710 | $ | 524,000 | $ | 826,710 | ||||
Commercial | 120,499 | 13,973 | 134,472 | |||||||
Other | 45,137 | 861 | 45,998 | |||||||
$ | 468,346 | $ | 538,834 | $ | 1,007,180 |
Committee.
- 10 - | ||
Years Ended December 31 | ||||||||||||
2012 | 2011 | 2010 | ||||||||||
(In Thousands) | ||||||||||||
Loan originations: | ||||||||||||
Single family residential | $ | 546,773 | $ | 282,321 | $ | 420,644 | ||||||
Multi-family residential | 28,521 | 11,401 | 44,173 | |||||||||
Non-residential real estate | 191,742 | 125,884 | 149,717 | |||||||||
Construction | 33,557 | 29,189 | 11,821 | |||||||||
Commercial | 603,415 | 186,338 | 290,501 | |||||||||
Home equity and improvement | 32,684 | 19,063 | 15,289 | |||||||||
Consumer finance | 9,722 | 10,216 | 12,230 | |||||||||
Total loans originated | 1,446,414 | 664,412 | 944,375 | |||||||||
Loans Purchased: | - | 25,842 | - | |||||||||
Loan reductions: | ||||||||||||
Loan pay-offs | 299,479 | 227,812 | 254,537 | |||||||||
Loans sold | 514,351 | 266,580 | 390,908 | |||||||||
Periodic principal repayments | 580,919 | 228,810 | 406,056 | |||||||||
1,394,749 | 723,202 | 1,051,501 | ||||||||||
Net (decrease) increase in total loans and loans held for sale | $ | 51,665 | $ | (32,948 | ) | $ | (107,126 | ) |
Years Ended December 31 | ||||||||||
2013 | 2012 | 2011 | ||||||||
(In Thousands) | ||||||||||
Loan originations: | ||||||||||
Single family residential | $ | 326,700 | $ | 546,773 | $ | 282,321 | ||||
Multi-family residential | 50,874 | 28,521 | 11,401 | |||||||
Non-residential real estate | 113,999 | 191,742 | 125,884 | |||||||
Construction | 67,530 | 33,557 | 29,189 | |||||||
Commercial | 435,248 | 603,415 | 186,338 | |||||||
Home equity and improvement | 41,552 | 32,684 | 19,063 | |||||||
Consumer finance | 10,043 | 9,722 | 10,216 | |||||||
Total loans originated | 1,045,946 | 1,446,414 | 664,412 | |||||||
Loans purchased: | 4,545 | - | 25,842 | |||||||
Loan reductions: | ||||||||||
Loan pay-offs | 205,254 | 299,479 | 227,812 | |||||||
Loans sold | 315,812 | 514,351 | 266,580 | |||||||
Periodic principal repayments | 473,343 | 580,919 | 228,810 | |||||||
994,409 | 1,394,749 | 723,202 | ||||||||
Net (decrease) increase in total loans and loans held for sale | $ | 56,082 | $ | 51,665 | $ | (32,948) |
30 to 59 Days | 60 to 89 Days | 90 Days and Over | Total | |||||||||||||||||||||||||||||
Amount | Percentage | Amount | Percentage | Amount | Percentage | Amount | Percentage | |||||||||||||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||||||||||||||||
One to four family residential real estate | $ | 1,632 | 0.10 | % | $ | 728 | 0.05 | % | $ | 1,799 | 0.12 | % | $ | 4,159 | 0.27 | % | ||||||||||||||||
Construction | - | 0.00 | - | 0.00 | - | 0.00 | - | 0.00 | ||||||||||||||||||||||||
Nonresidential and Multi- family residential | 1,482 | 0.10 | 2,602 | 0.17 | 7,650 | 0.49 | 11,734 | 0.76 | ||||||||||||||||||||||||
Home equity and improvement | 2,276 | 0.15 | 223 | 0.01 | 217 | 0.01 | 2,716 | 0.17 | ||||||||||||||||||||||||
Consumer finance | 227 | 0.01 | 8 | 0.00 | - | 0.00 | 235 | 0.01 | ||||||||||||||||||||||||
Commercial | 580 | 0.04 | 1,338 | 0.09 | 3,342 | 0.22 | 5,260 | 0.35 | ||||||||||||||||||||||||
Total | $ | 6,197 | 0.40 | % | $ | 4,899 | 0.32 | % | $ | 13,008 | 0.84 | % | $ | 24,104 | 1.56 | % |
- 11 - | ||
30 to 59 Days | 60 to 89 Days | 90 Days and Over | Total | |||||||||||||||||||
Amount | Percentage | Amount | Percentage | Amount | Percentage | Amount | Percentage | |||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||||||
One to four family residential real estate | $ | 2,045 | 0.12 | % | $ | 594 | 0.04 | % | $ | 1,394 | 0.09 | % | $ | 4,033 | 0.25 | % | ||||||
Nonresidential and Multi- family residential | 1,420 | 0.09 | 1,410 | 0.09 | 5,936 | 0.36 | 8,766 | 0.54 | ||||||||||||||
Commercial | 37 | 0.00 | 26 | 0.00 | 3,984 | 0.25 | 4,047 | 0.25 | ||||||||||||||
Construction | - | 0.00 | - | 0.00 | - | 0.00 | - | 0.00 | ||||||||||||||
Home Equity and Improvement | 1,153 | 0.07 | 153 | 0.01 | 413 | 0.03 | 1,719 | 0.11 | ||||||||||||||
Consumer Finance | 131 | 0.01 | - | 0.00 | - | 0.00 | 131 | 0.01 | ||||||||||||||
Total | $ | 4,786 | 0.29 | % | $ | 2,183 | 0.14 | % | $ | 11,727 | 0.73 | % | $ | 18,696 | 1.16 | % |
Impaired loans acquired in the ComBanc, Genoa and Pavilion acquisitions have been accounted for under the provisions of FASB ASC Topic 310 Subtopic 30,Loans and Debt Securities Acquired with Deteriorated Credit Quality. Such loans were recorded at their fair value, which was estimated basedlosses on the expected cash flow ofdependent loans and by charging off the acquired loan. In the Genoa acquisition, 10 loan relationships with a stated value of $1.5 million were recorded at $721,000. In the ComBanc acquisition, 12 loan relationships with a stated value of $3.4 million were recorded at $2.0 million. In the Pavilion acquisition, 12 loan relationships with a stated value of $6.4 million were recorded at $4.4 million. Of all these impaired loans that were acquired in an acquisition, as of December 31, 2012, 8 loan relationships remained with a contractual balance of $855,000 and were recorded at $512,000. If management’s expectations about the cash flow of those loans changes over time, the difference will be recognized as a yield adjustment over the remaining life of the respective loan. In 2012, $173,000 of impairment was recognized as a yield adjustment. There were no significant changes in the expected cash flows of the remaining loan relationships in 2012.deficiency on collateral dependent loans.
- 12 - | ||
December 31 | ||||||||||||||||||||
2012 | 2011 | 2010 | 2009 | 2008 | ||||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||||
Nonperforming loans: | ||||||||||||||||||||
One to four family residential real estate | $ | 3,602 | $ | 3,890 | $ | 7,232 | $ | 5,349 | $ | 4,584 | ||||||||||
Construction | - | - | 64 | 675 | 72 | |||||||||||||||
Nonresidential and multi-family residential real estate | 23,090 | 28,150 | 21,737 | 24,042 | 19,979 | |||||||||||||||
Commercial | 5,661 | 6,884 | 11,547 | 10,615 | 2,881 | |||||||||||||||
Home equity and improvement | 217 | 394 | 446 | 451 | 432 | |||||||||||||||
Consumer finance | - | 10 | 14 | 59 | 69 | |||||||||||||||
Total nonperforming loans | 32,570 | 39,328 | 41,040 | 41,191 | 28,017 | |||||||||||||||
Real estate owned | 3,805 | 3,608 | 9,591 | 13,413 | 6,973 | |||||||||||||||
Other repossessed assets | - | 20 | - | 114 | 27 | |||||||||||||||
Total repossessed assets | 3,805 | 3,628 | 9,591 | 13,527 | 7,000 | |||||||||||||||
Total nonperforming assets | $ | 36,375 | $ | 42,956 | $ | 50,631 | $ | 54,718 | $ | 35,017 | ||||||||||
Restructured loans, accruing | $ | 28,203 | $ | 3,380 | $ | 6,001 | $ | 6,715 | $ | 6,250 | ||||||||||
Total nonperforming assets as a percentage of total assets | 1.78 | % | 2.08 | % | 2.49 | % | 2.66 | % | 1.79 | % | ||||||||||
Total nonperforming loans as a percentage of total loans* | 2.14 | % | 2.64 | % | 2.70 | % | 2.55 | % | 1.73 | % | ||||||||||
Allowance for loan losses as a percent of total nonperforming assets | 73.43 | % | 77.41 | % | 81.14 | % | 66.79 | % | 70.23 | % |
December 31 | ||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | ||||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||||
Nonperforming loans: | ||||||||||||||||||||
One to four family residential real estate | $ | 3,273 | $ | 3,602 | $ | 3,890 | $ | 7,232 | $ | 5,349 | ||||||||||
Nonresidential and multi-family residential real estate | 15,834 | 23,090 | 28,150 | 21,737 | 24,042 | |||||||||||||||
Commercial | 8,327 | 5,661 | 6,884 | 11,547 | 10,615 | |||||||||||||||
Construction | - | - | - | 64 | 675 | |||||||||||||||
Home Equity and Improvement | 413 | 217 | 394 | 446 | 451 | |||||||||||||||
Consumer finance | - | - | 10 | 14 | 59 | |||||||||||||||
Total nonperforming loans | 27,847 | 32,570 | 39,328 | 41,040 | 41,191 | |||||||||||||||
Real estate owned | 5,859 | 3,805 | 3,608 | 9,591 | 13,413 | |||||||||||||||
Other repossessed assets | - | - | 20 | - | 114 | |||||||||||||||
Total repossessed assets | 5,859 | 3,805 | 3,628 | 9,591 | 13,527 | |||||||||||||||
Total nonperforming assets | $ | 33,706 | $ | 36,375 | $ | 42,956 | $ | 50,631 | $ | 54,718 | ||||||||||
Restructured loans, accruing | $ | 27,630 | $ | 28,203 | $ | 3,380 | $ | 6,001 | $ | 6,715 | ||||||||||
Total nonperforming assets as a percentage of total assets | 1.58 | % | 1.78 | % | 2.08 | % | 2.49 | % | 2.66 | % | ||||||||||
Total nonperforming loans as a percentage of total loans* | 1.76 | % | 2.14 | % | 2.64 | % | 2.70 | % | 2.55 | % | ||||||||||
Total nonperforming assets as a percentage of total loans plus REO* | 2.12 | % | 2.38 | % | 2.88 | % | 3.70 | % | 3.77 | % | ||||||||||
Allowance for loan losses as a percent of total nonperforming assets | 74.02 | % | 73.43 | % | 77.41 | % | 81.14 | % | 66.79 | % |
- 13 - | ||
Years Ended December 31 | ||||||||||||||||||||
2012 | 2011 | 2010 | 2009 | 2008 | ||||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||||
Allowance at beginning of year | $ | 33,254 | $ | 41,080 | $ | 36,547 | $ | 24,592 | $ | 13,890 | ||||||||||
Provision for credit losses | 10,924 | 12,434 | 23,177 | 23,232 | 12,585 | |||||||||||||||
Allowance acquired in acquisitions | - | - | - | - | 4,258 | |||||||||||||||
Charge-offs: | ||||||||||||||||||||
Single family residential real estate | (2,515 | ) | (2,753 | ) | (3,092 | ) | (2,281 | ) | (1,185 | ) | ||||||||||
Commercial real estate and multi-family | (11,319 | ) | (13,150 | ) | (9,928 | ) | (5,799 | ) | (3,758 | ) | ||||||||||
Commercial | (4,047 | ) | (4,398 | ) | (5,118 | ) | (2,664 | ) | (813 | ) | ||||||||||
Consumer finance | (133 | ) | (95 | ) | (124 | ) | (320 | ) | (380 | ) | ||||||||||
Home equity and improvement | (1,165 | ) | (1,052 | ) | (1,066 | ) | (762 | ) | (363 | ) | ||||||||||
Total charge-offs | (19,179 | ) | (21,448 | ) | (19,328 | ) | (11,826 | ) | (6,499 | ) | ||||||||||
Recoveries | 1,712 | 1,188 | 684 | 549 | 358 | |||||||||||||||
Net charge-offs | (17,467 | ) | (20,260 | ) | (18,644 | ) | (11,277 | ) | (6,141 | ) | ||||||||||
Ending allowance | $ | 26,711 | $ | 33,254 | $ | 41,080 | $ | 36,547 | $ | 24,592 | ||||||||||
Allowance for loan losses to total non- performing loans at end of year | 82.01 | % | 84.56 | % | 100.10 | % | 88.73 | % | 87.78 | % | ||||||||||
Allowance for loan losses to total loans at end of year* | 1.75 | % | 2.24 | % | 2.70 | % | 2.26 | % | 1.52 | % | ||||||||||
Allowance for loan losses to net charge-offs for the year | 152.92 | % | 164.14 | % | 220.34 | % | 324.08 | % | 400.46 | % | ||||||||||
Net charge-offs for the year to average loans | 1.18 | % | 1.41 | % | 1.21 | % | 0.70 | % | 0.41 | % |
- 14 - | ||
Years Ended December 31 | ||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | ||||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||||
Allowance at beginning of year | $ | 26,711 | $ | 33,254 | $ | 41,080 | $ | 36,547 | $ | 24,592 | ||||||||||
Provision for credit losses | 1,824 | 10,924 | 12,434 | 23,177 | 23,232 | |||||||||||||||
Allowance acquired in acquisitions | - | - | - | - | - | |||||||||||||||
Charge-offs: | ||||||||||||||||||||
Single family residential real estate | (643) | (2,515) | (2,753) | (3,092) | (2,281) | |||||||||||||||
Commercial real estate and multi-family | (2,475) | (11,319) | (13,150) | (9,928) | (5,799) | |||||||||||||||
Commercial | (1,230) | (4,047) | (4,398) | (5,118) | (2,664) | |||||||||||||||
Consumer finance | (94) | (133) | (95) | (124) | (320) | |||||||||||||||
Home equity and improvement | (757) | (1,165) | (1,052) | (1,066) | (762) | |||||||||||||||
Total charge-offs | (5,199) | (19,179) | (21,448) | (19,328) | (11,826) | |||||||||||||||
Recoveries | 1,614 | 1,712 | 1,188 | 684 | 549 | |||||||||||||||
Net charge-offs | (3,585) | (17,467) | (20,260) | (18,644) | (11,277) | |||||||||||||||
Ending allowance | $ | 24,950 | $ | 26,711 | $ | 33,254 | $ | 41,080 | $ | 36,547 | ||||||||||
Allowance for loan losses to total non-performing loans at end of year | 89.60 | % | 82.01 | % | 84.56 | % | 100.10 | % | 88.73 | % | ||||||||||
Allowance for loan losses to total loans at end of year* | 1.58 | % | 1.75 | % | 2.24 | % | 2.70 | % | 2.26 | % | ||||||||||
Allowance for loan losses to net charge-offs for the year | 695.96 | % | 152.92 | % | 164.14 | % | 220.34 | % | 324.08 | % | ||||||||||
Net charge-offs for the year to average loans | 0.23 | % | 1.18 | % | 1.41 | % | 1.21 | % | 0.70 | % |
December 31 | ||||||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | ||||||||||||||||||||||
Percent of | Percent of | Percent of | Percent of | Percent of | ||||||||||||||||||||||
total loans | total loans | total loans | total loans | total loans | ||||||||||||||||||||||
Amount | by category | Amount | by category | Amount | by category | Amount | by category | Amount | by category | |||||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||||||||||
Single family residential and construction | $ | 2,981 | 17.5 | % | $ | 3,581 | 15.5 | % | $ | 4,158 | 15.7 | % | $ | 6,029 | 15.5 | % | $ | 6,048 | 16.8 | % | ||||||
Nonresidential and Multi-family residential real estate | 14,508 | 50.8 | 14,899 | 51.6 | 20,490 | 51.7 | 22,355 | 50.1 | 18,876 | 49.1 | ||||||||||||||||
Other: | ||||||||||||||||||||||||||
Commercial loans | 5,678 | 24.1 | 6,325 | 24.9 | 6,576 | 23.2 | 10,871 | 24.2 | 9,444 | 23.1 | ||||||||||||||||
Consumer and home equity and improvement loans | 1,783 | 7.6 | 1,906 | 8.0 | 2,030 | 9.4 | 1,825 | 10.2 | 2,179 | 11.0 | ||||||||||||||||
$ | 24,950 | 100.0 | % | $ | 26,711 | 100.0 | % | $ | 33,254 | 100.0 | % | $ | 41,080 | 100.0 | % | $ | 36,547 | 100.0 | % |
- | ||
December 31 | ||||||||||||||||||||||||||||||||||||||||
2012 | 2011 | 2010 | 2009 | 2008 | ||||||||||||||||||||||||||||||||||||
Percent of | Percent of | Percent of | Percent of | Percent of | ||||||||||||||||||||||||||||||||||||
total loans | total loans | total loans | total loans | total loans | ||||||||||||||||||||||||||||||||||||
Amount | by category | Amount | by category | Amount | by category | Amount | by category | Amount | by category | |||||||||||||||||||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||||||||||||||||||||||||
Single family residential and construction | $ | 3,581 | 15.5 | % | $ | 4,158 | 15.7 | % | $ | 6,029 | 15.5 | % | $ | 6,048 | 16.8 | % | $ | 3,678 | 19.8 | % | ||||||||||||||||||||
Nonresidential and Multi-family residential real estate | 14,899 | 51.6 | 20,490 | 51.7 | 22,355 | 50.1 | 18,876 | 49.1 | 13,436 | 46.1 | ||||||||||||||||||||||||||||||
Other: | ||||||||||||||||||||||||||||||||||||||||
Commercial loans | 6,325 | 24.9 | 6,576 | 23.2 | 10,871 | 24.2 | 9,444 | 23.1 | 6,351 | 21.8 | ||||||||||||||||||||||||||||||
Consumer and home equity and improvement loans | 1,906 | 8.0 | 2,030 | 9.4 | 1,825 | 10.2 | 2,179 | 11.0 | 1,127 | 12.3 | ||||||||||||||||||||||||||||||
$ | 26,711 | 100.0 | % | $ | 33,254 | 100.0 | % | $ | 41,080 | 100.0 | % | $ | 36,547 | 100.0 | % | $ | 24,592 | 100.0 | % |
Years Ended December 31 | ||||||||||||||||||||||||
2012 | 2011 | 2010 | ||||||||||||||||||||||
Amount | Rate | Amount | Rate | Amount | Rate | |||||||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||||||||
Non-interest-bearing demand deposits | $ | 266,913 | - | $ | 231,343 | - | $ | 200,864 | - | |||||||||||||||
Interest bearing demand deposits | 629,568 | 0.20 | % | 592,093 | 0.36 | % | 529,078 | 0.59 | % | |||||||||||||||
Savings deposits | 164,508 | 0.07 | 153,318 | 0.16 | 139,049 | 0.26 | ||||||||||||||||||
Time deposits | 558,648 | 1.21 | 613,374 | 1.60 | 721,203 | 2.18 | ||||||||||||||||||
Totals | $ | 1,619,637 | 0.50 | % | $ | 1,590,128 | 0.77 | % | $ | 1,590,194 | 1.21 | % |
Years Ended December 31 | ||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||
Amount | Rate | Amount | Rate | Amount | Rate | |||||||||||
(Dollars in Thousands) | ||||||||||||||||
Non-interest-bearing demand deposits | $ | 308,591 | - | $ | 266,913 | - | $ | 231,343 | - | |||||||
Interest bearing demand deposits | 677,903 | 0.17 | % | 629,568 | 0.20 | % | 592,093 | 0.36 | % | |||||||
Savings deposits | 179,041 | 0.05 | 164,508 | 0.07 | 153,318 | 0.16 | ||||||||||
Time deposits | 496,360 | 0.95 | 558,648 | 1.21 | 613,374 | 1.60 | ||||||||||
Totals | $ | 1,661,895 | 0.36 | % | $ | 1,619,637 | 0.50 | % | $ | 1,590,128 | 0.77 | % |
Retail certificates of deposit maturing in quarter ending: | ||||
March 31, 2013 | $ | 34,052 | ||
June 30, 2013 | 26,614 | |||
September 30, 2013 | 30,059 | |||
December 31, 2013 | 21,143 | |||
After December 31, 2013 | 64,161 | |||
Total retail certificates of deposit with balances greater than $100 | $ | 176,029 |
Retail certificates of deposit maturing in quarter ending: | ||||
March 31, 2014 | $ | 28,608 | ||
June 30, 2014 | 28,862 | |||
September 30, 2014 | 30,192 | |||
December 31, 2014 | 15,194 | |||
After December 31, 2014 | 69,598 | |||
Total retail certificates of deposit with balances greater than $100,000 | $ | 172,454 |
- 16 - | ||
2012 | 2011 | |||||||
(In Thousands) | ||||||||
Interest bearing demand deposits and money market accounts | $ | 58 | $ | 26 | ||||
Certificates of deposit | 13 | 92 | ||||||
$ | 71 | $ | 118 |
2013 | 2012 | ||||||
(In Thousands) | |||||||
Interest bearing demand deposits and money market accounts | $ | 14 | $ | 13 | |||
Certificates of deposit | 34 | 58 | |||||
$ | 48 | $ | 71 |
December 31 | ||||||||||||
2012 | 2011 | 2010 | ||||||||||
(Dollars in Thousands) | ||||||||||||
Long-term: | ||||||||||||
FHLB advances | $ | 12,796 | $ | 81,841 | $ | 116,885 | ||||||
Weighted average interest rate | 2.80 | % | 3.66 | % | 3.68 | % | ||||||
Short-term: | ||||||||||||
FHLB advances | $ | - | $ | - | $ | - | ||||||
Weighted average interest rate | - | - | - | |||||||||
Securities sold under agreement to repurchase | $ | 51,702 | $ | 60,386 | $ | 56,247 | ||||||
Weighted average interest rate | 0.63 | % | 0.92 | % | 0.98 | % |
December 31 | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
(Dollars in Thousands) | ||||||||||||
Long-term: | ||||||||||||
FHLB advances | $ | 22,520 | $ | 12,796 | $ | 81,841 | ||||||
Weighted average interest rate | 2.36 | % | 2.80 | % | 3.66 | % | ||||||
Short-term: | ||||||||||||
Securities sold under agreement to repurchase | $ | 51,919 | $ | 51,702 | $ | 60,386 | ||||||
Weighted average interest rate | 0.31 | % | 0.63 | % | 0.92 | % |
Years Ended December 31 | ||||||||||||
2012 | 2011 | 2010 | ||||||||||
(Dollars in Thousands) | ||||||||||||
Long-term: | ||||||||||||
FHLB advances: | ||||||||||||
Maximum balance | $ | 81,838 | $ | 116,882 | $ | 146,927 | ||||||
Average balance | 66,121 | 93,652 | 127,281 | |||||||||
Weighted average interest rate | 3.67 | % | 3.43 | % | 3.70 | % |
Years Ended December 31 | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
(Dollars in Thousands) | ||||||||||||
Long-term: | ||||||||||||
FHLB advances: | ||||||||||||
Maximum balance | $ | 22,765 | $ | 81,838 | $ | 116,882 | ||||||
Average balance | 16,569 | 66,121 | 93,652 | |||||||||
Weighted average interest rate | 2.62 | % | 3.67 | % | 3.43 | % |
- 17 - | ||
Years Ended December 31 | ||||||||||||
2012 | 2011 | 2010 | ||||||||||
(Dollars in Thousands) | ||||||||||||
Short-term: | ||||||||||||
FHLB advances: | ||||||||||||
Maximum balance | $ | - | $ | - | $ | - | ||||||
Average balance | - | 16 | - | |||||||||
Weighted average interest rate | - | 0.17 | % | - | ||||||||
Securities sold under agreement to repurchase: | ||||||||||||
Maximum balance | $ | 57,050 | $ | 61,240 | $ | 56,247 | ||||||
Average balance | 53,171 | 56,495 | 47,088 | |||||||||
Weighted average interest rate | 0.70 | % | 0.94 | % | 0.97 | % |
Years Ended December 31 | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
(Dollars in Thousands) | ||||||||||||
Short-term: | ||||||||||||
FHLB advances: | ||||||||||||
Maximum balance | $ | 50,000 | $ | - | $ | - | ||||||
Average balance | 1,164 | - | 16 | |||||||||
Weighted average interest rate | 0.09 | % | - | 0.17 | % | |||||||
Securities sold under agreement to repurchase: | ||||||||||||
Maximum balance | $ | 57,182 | $ | 57,050 | $ | 61,240 | ||||||
Average balance | 50,877 | 53,171 | 56,495 | |||||||||
Weighted average interest rate | 0.44 | % | 0.70 | % | 0.94 | % |
- 18 - | ||
2013 and 2012 respectively.
On July 18, 2012, the Company purchased the remaining 1,000 preferred shares at par value to complete the entire repurchase of the 37,000 preferred shares.
- 19 - | ||
- 20 - | ||
Actual | Minimum Required for Adequately Capitalized | Minimum Required for Well Capitalized | ||||||||||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||||||||||
Tier 1 Capital (1) | ||||||||||||||||||||||||
Consolidated | $ | 226,931 | 11.48 | % | $ | 79,056 | 4.0 | % | N/A | N/A | ||||||||||||||
First Federal Bank | $ | 215,432 | 10.92 | % | $ | 78,914 | 4.0 | % | $ | 98,642 | 5.0 | % | ||||||||||||
Tier 1 Capital (to Risk Weighted Assets) (1) | ||||||||||||||||||||||||
Consolidated | $ | 226,931 | 13.41 | % | $ | 67,715 | 4.0 | % | N/A | N/A | ||||||||||||||
First Federal Bank | $ | 215,432 | 12.74 | % | $ | 67,632 | 4.0 | % | $ | 101,448 | 6.0 | % | ||||||||||||
Total Capital (to Risk Weighted Assets) (1) | ||||||||||||||||||||||||
Consolidated | $ | 248,161 | 14.66 | % | $ | 135,430 | 8.0 | % | N/A | N/A | ||||||||||||||
First Federal Bank | $ | 236,635 | 14.00 | % | $ | 135,264 | 8.0 | % | $ | 169,080 | 10.0 | % |
Minimum Required for | Minimum Required for Well | |||||||||||||||
Actual | Adequately Capitalized | Capitalized | ||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||
Tier 1 Capital (1) | ||||||||||||||||
Consolidated | $ | 246,258 | 11.86 | % | $ | 83,045 | 4.0 | % | N/A | N/A | ||||||
First Federal | $ | 235,699 | 11.36 | % | $ | 82,978 | 4.0 | % | $ | 103,722 | 5.0 | % | ||||
Tier 1 Capital (to Risk Weighted Assets) (1) | ||||||||||||||||
Consolidated | $ | 246,258 | 13.98 | % | $ | 70,473 | 4.0 | % | N/A | N/A | ||||||
First Federal | $ | 235,699 | 13.39 | % | $ | 70,418 | 4.0 | % | $ | 105,627 | 6.0 | % | ||||
Total Capital (to Risk Weighted Assets) (1) | ||||||||||||||||
Consolidated | $ | 268,317 | 15.23 | % | $ | 140,947 | 8.0 | % | N/A | N/A | ||||||
First Federal | $ | 257,741 | 14.64 | % | $ | 140,836 | 8.0 | % | $ | 176,046 | 10.0 | % |
(1) | Core capital is computed as a percentage of adjusted total assets of |
- 21 - | ||
During 2008, there were higher levels of bank failures which dramatically increased resolution costs of the FDIC and depleted the DIF. In order to maintain a strong funding position and restore reserve ratios of the DIF, on December 16, 2008, the FDIC issued a final rule that raised the then current assessment rates of insured institutions uniformly by 7 basis points (7 cents for every $100 of deposits), beginning with the first quarter of 2009. Further, beginning April 1, 2009, the FDIC required higher risk institutions to pay a larger share of premiums by factoring in rate adjustments based on secured liabilities and unsecured debt levels. On May 22, 2009, the FDIC issued a final rule that imposed a special assessment for the second quarter of 2009 of 5 basis points on each insured depositary institution’s assets minus its Tier 1 capital as of June 30, 2009, which was collected on September 30, 2009 in the amount of $906,000 for First Federal. On November 12, 2009, the FDIC issued a final rule requiring insured depository institutions to prepay their estimated quarterly risk-based assessments for the fourth quarter of 2009 and for all of 2010, 2011 and 2012. The prepaid assessments for these periods were collected on December 30, 2009, along with the regular quarterly risk-based deposit insurance assessment for the third quarter of 2009. For the fourth quarter of 2009 and for all of 2010, the prepaid assessment rate was based on each institution’s total base assessment rate in effect on September 30, 2009, modified to assume that the assessment rate in effect for the institution on September 30, 2009, was in effect for the entire third quarter of 2009. As of December 31, 2012 and 2011, $0 and $2.4 million in prepaid deposit insurance assessments is included in other assets in the accompanying consolidated balance sheet.
Temporary Liquidity Guarantee Program -On October 14, 2008, the FDIC announced a new program, the Temporary Liquidity Guarantee Program. This program had two components – The Debt Guarantee Program and the Transaction Account Guarantee Program. The Debt Guarantee Program guaranteed newly issued senior unsecured debt of a participating organization, up to certain limits established for each institution, issued between October 14, 2008 and June 30, 2009. The FDIC will pay the unpaid principal and interest on an FDIC-guaranteed debt instrument upon the uncured failure of the participating entity to make a timely payment of principal or interest in accordance with the terms of the instrument. The guarantee remained in effect until June 30, 2012. In return for the FDIC’s guarantee, participating institutions will pay the FDIC a fee based on the amount and maturity of the debt. The Company opted to participate in the Debt Guarantee Program.
The Transaction Account Guarantee Program provided full deposit insurance coverage for non-interest bearing transaction deposit accounts, regardless of dollar amount, until December 31, 2012. An annualized 25 basis point assessment (increased from 10 basis points) on balances in noninterest-bearing transaction accounts that exceed the existing deposit insurance limit of $250,000 was assessed on a quarterly basis to insured depository institutions that had not opted out of this component of the Temporary Liquidity Guarantee Program. The Company opted to participate in the Transaction Account Guarantee Program, which expired on December 31, 2012.
Item 1A. Risk Factors
The risks listed below present risks that could have a material impact on the Company’s financial condition, results of operations, or business. The risks and uncertainties described below are the not the only ones facing the Company. Additional risks and uncertainties that management is not aware of or focused on or that management currently deems immaterial may also impair the Company’s business operations.
Economic conditions may adversely affect First Defiance’s operations and financial condition.
Local Economic Conditions - First Defiance conducts its banking and insurance business primarily in northwest Ohio, northeast Indiana and southeast Michigan. Unemployment rates for most of the counties within our geographic market area are above the median rate for the United States and above the median rates for the States of Ohio, Indiana, and Michigan. As reported for December 2012, the 14 counties in which our offices are located had unemployment rates between 5.2% and 10.9%, but all experienced an improvement in their unemployment rate in 2012 compared to 2011. In addition, real estate values in certain First Defiance’s markets have declined and may continue to decline in 2013. High unemployment and declining real estate values have a negative impact on the Company’s earnings and financial condition because:
General Economic Conditions - Dramatic declines in real estate values, along with high unemployment, disrupted the national credit and capital markets over the last several years. As a result, many financial institutions have had to seek additional capital, to merge with larger and stronger institutions, to seek government assistance or bankruptcy protection and, in some cases; they have been forced into a sale or closed by the bank regulatory agencies. Many lenders and institutional investors have reduced and, in some cases, ceased to provide funding to borrowers, including to other financial institutions, because of concern about the stability of the financial markets and the strength of counterparties. It is difficult to predict how long these economic conditions will exist, which of our markets, products or other businesses will ultimately be affected, and whether management’s actions will effectively mitigate these external factors. The reduced availability of credit, the lack of confidence in the financial sector, decreased consumer confidence, increased volatility in the financial markets and reduced business activity could materially and adversely affect our business, financial condition and results of operations.
While economic conditions are beginning to improve slightly, First Defiance faces the following risks:
Declining Real Estate Values -Approximately 74.1% of the loans in First Federal’s portfolio are secured in whole or in part by real estate. Because residential real estate prices have declined, some of our borrowers have mortgages that exceed the value of their homes. The decline in home values, coupled with the weakened economy, has increased defaults and foreclosures. Commercial real estate values have also declined, and the owners of many income-producing properties are experiencing declines in their revenue, which may adversely affect their ability to repay their loans. Foreclosures and resolutions of nonperforming loans require significant personnel resources and involve other costs that may increase our operating expenses. Properties acquired through foreclosure or by deed in lieu of foreclosure are taking longer to sell in the current economy, which increases the Company’s expenses for managing, maintaining and insuring real estate owned. If First Federal is unable to sell properties at a price that will cover its expenses as well as the unpaid principal and interest on the loan, the resulting write-downs and losses will adversely affect First Defiance’s net income. The reduced levels of home sales have had a materially adverse effect on the prices achieved on the sale of foreclosed properties. Further decline in home values may escalate these problems, resulting in higher delinquencies, greater charge-offs, and increased losses on the sale of foreclosed real estate in future periods.
Volatile Capital Markets -The capital and credit markets have experienced severe volatility and disruption. In some cases, the markets have produced downward pressure on credit availability for certain issuers. Continuing market disruption and volatility could have an adverse effect on the Company’s ability to access capital and on its business, financial condition and results of operations.
First Defiance’s stock price may fluctuate significantly in the future and these fluctuations may be unrelated to the underlying performance of First Defiance. General market price declines and overall market volatility in the future could adversely affect the price of its common stock, and the current market price of the stock may not be indicative of future market prices.
First Defiance’s stock price has been volatile in the past and several factors could cause the price to fluctuate substantially in the future. These factors include:
First Defiance’s loan portfolio includes a concentration of commercial real estate loans and commercial loans, which involve risks specific to real estate value and the successful operations of these businesses.
At December 31, 2012, First Federal’s portfolio of commercial real estate loans totaled $797.4 million, or approximately 51.6% of total loans. First Federal’s commercial real estate loans typically have higher principal amounts than residential real estate loans, and many of our commercial real estate borrowers have more than one loan outstanding. As a result, an adverse development on one loan can expose First Defiance to greater risk of loss on other loans. Additionally, repayment of the loans is generally dependent, in large part, on sufficient income from the properties securing the loans to cover operating expenses and debt service. Economic conditions and events outside of the control of the borrower or lender could negatively impact the future cash flow and market values of the affected properties.
At December 31, 2012, First Federal’s portfolio of commercial loans totaled $383.8 million, or approximately 24.9% of total loans. Commercial loans generally expose First Defiance to a greater risk of nonpayment and loss than commercial real estate or residential real estate loans since repayment of such loans often depends on the successful operations and income stream of the borrowers.First Federal’s commercial loans are primarily made based on the identified cash flow of the borrower and secondarily on the underlying collateral provided by the borrower such as accounts receivable, inventory, machinery or real estate. In the case of loans secured by accounts receivable, the availability of funds for the repayment of these loans may be substantially dependent on the ability of the borrower to collect amounts due from its customers. The collateral securing other loans may depreciate over time, may be difficult to appraise and may fluctuate in value based on the success of the business. Credit support provided by the borrower for most of these loans and the probability of repayment is based on the liquidation of the pledged collateral and enforcement of a personal guarantee, if any exists.
First Defiance targets its business lending towards small and medium-sized businesses, many of which have fewer financial resources than larger companies and may be more susceptible to economic downturns. If general economic conditions negatively impact these businesses, First Defiance’s results of operations and financial condition may be adversely affected.
Increases to the allowance for loan losses may cause First Defiance’s earnings to decrease.
First Federal makes a number of assumptions and judgments about the collectability of its loan portfolio, including the creditworthiness of our borrowers and the value of the real estate and other assets serving as collateral for the repayment of loans. In determining the amount of the allowance for loan losses, First Federal relies on loan quality reviews, past loss experience, and an evaluation of economic conditions, among other factors. If its assumptions prove to be incorrect, First Federal’s allowance for loan losses may not be sufficient to cover actual losses, resulting in additions to the allowance. In addition, bank regulators periodically review First Federal’s allowance and may require First Federal to increase its allowance. Material additions to the allowance and any loan losses that exceed First Federal’s reserves would materially adversely affect our results of operations and financial condition.
Changes in interest rates can adversely affect First Defiance’s profitability
First Defiance’s earnings and financial condition are dependent to a large degree upon net interest income, which is the difference, or spread, between interest earned from loans and investments and interest paid on deposits and borrowings. Interest rates are highly sensitive to many factors, including:
Because First Defiance’s interest-bearing liabilities may reprice or mature more quickly than its interest-earning assets, an increase in interest rates could result in a decrease in First Defiance’s net interest income.
First Federal originates a significant amount of residential mortgage loans that it sells in the secondary market. The origination of residential mortgage loans is highly dependent on the local real estate market and the current interest rates. Increasing interest rates tend to reduce the origination of loans for sale and consequently fee income, which First Defiance reports as mortgage banking income. Conversely, decreasing interest rates have the effect of causing clients to refinance mortgage loans faster than anticipated. This causes the value of mortgage servicing rights on the loans sold to be lower than originally anticipated. If this happens, First Defiance may be required to write down the value of its mortgage servicing rights faster than anticipated, which will increase expense and lower earnings. Accelerated repayments on loans and mortgage backed securities could result in the reinvestment of funds at lower rates than the loans or securities were paying.
Laws and regulations may affect First Defiance’s results of operations.
The earnings of financial institutions are affected by the regulations and policies of various regulatory authorities, including the Federal Reserve Board, which regulates the money supply, and the Federal Reserve which regulates the Company and OCC which regulates First Federal, and the FDIC, which regulates First Federal. The Federal Reserve has extensive supervisory authority over the Company, affecting a comprehensive range of matters relating to ownership and control of First Defiance’s shares, First Defiance’s acquisition of other companies and businesses, permissible activities for the Company to engage in, maintenance of adequate capital levels and other aspects of operations. These supervisory and regulatory powers are intended primarily for the protection for First Defiance’s depositors and customers and the deposit insurance fund, rather than First Defiance’s shareholders.
In connection with its supervision of First Defiance, it’s former primary regulator, the Office of Thrift Supervision (“OTS”), which was eliminated and replaced by the Federal Reserve, and the Company entered into a memorandum of understanding, which is a tool employed by bank regulatory agencies to address areas of concern to the regulator. The memorandum for the Company requires that it submit to the Federal Reserve specific strategies for increasing and maintaining capital at targets, to be established by First Defiance’s board of directors that are commensurate with First Defiance’s risk profile. At December 31, 2012, the Company and First Federal’s capital ratios exceeded all the regulatory thresholds to be considered “well-capitalized.” The memorandum also requires that First Defiance obtain approval from the Federal Reserve before it pays any dividends, including dividends on common shares, orincur, issue, renew, or rollover any debt. First Federal also agreed to a memorandum of understanding with the OTS, which was eliminated and replaced by the OCC, the principal terms of which related to First Federal’s risk profile and asset quality. First Federal’s memorandum was terminated in February 2013.
Comprehensive revisions to the regulatory capital framework were proposed by the FRB, OCC, and FDIC in June 2012. Included within those revisions is the Basel III, which incorporates changes made by the Basel Committee on Banking Supervision to the Basel Capital framework in addition to implementing relevant provisions of the Dodd-Frank Act. The Basel III specifically revises what qualifies as regulatory capital, raises minimum requirements and introduces the concept of additional capital buffers. The need to maintain more and higher quality capital as well as greater liquidity going forward could limit our business activities, including lending, and our ability to expand, either organically or through acquisitions. In addition, the new liquidity standards could require us to increase our holdings of highly liquid short-term investments, thereby reducing our ability to invest in longer-term assets even if more desirable from a balance sheet management perspective.
The laws and regulations applicable to the banking industry could change at any time. As a result of ongoing challenges facing the U.S. economy in particular, the potential exists for new laws and regulations, and bank regulatory agencies are expected to be active in responding to concerns and trends identified in examinations. Increased regulation could increaseFirst Defiance’scost of compliance and reduce its income to the extent that they limit the manner in whichFirst Defiancemay conduct business, including its ability to offer new products, charge fees for specific products and services, obtain financing, attract deposits, make loans and achieve satisfactory interest spreads.
First Defiance’s ability to meet cash flow needs on a timely basis at a reasonable cost may adversely affect net income.
First Defiance’sprincipal sources of liquidity are local deposits and wholesale funding sources such as FHLB advances, Federal Funds purchased, securities sold under repurchase agreements, and brokered or other out-of-market certificate of deposit purchases. Also,First Defiancemaintains a portfolio of securities that can be used as a secondary source of liquidity.First Defiance’s access to funding sources in amounts adequate to finance or capitalize its activities or on terms that are acceptable could be impaired by factors that affect First Defiance directly or the financial services industry or economy in general, such as further disruptions in the financial markets or negative views and expectations about the prospects for the financial services industry.
Other possible sources of liquidity include the sale or securitization of loans, the issuance of additional collateralized borrowings beyond those currently utilized with the FHLB, the issuance of debt securities and the issuance of preferred or common securities in public or private transactions, or borrowings from a commercial bank.First Defiancedoes not currently have any borrowings from a commercial bank, but it has used them in the past. Pursuant to the MOU,First Defiancemust obtain Federal Reserve approval before incurring or issuing any debt.
Any decline in available funding could adversely impact our ability to originate loans, invest in securities, meet our expenses, pay dividends to First Defiance’s shareholders, or fulfill obligations such as repaying First Defiance’s borrowings or meeting deposit withdrawal demands, any of which could have a material adverse impact on our liquidity, business, results of operations and financial condition.
Competition affects First Defiance’s earnings.
First Defiance’scontinued profitability depends on its ability to continue to effectively compete to originate loans and attract and retain deposits. Competition for both loans and deposits is intense in the financial services industry. The Company competes in its market area by offering superior service and competitive rates and products. The type of institutions First Defiance competes with include large regional commercial banks, smaller community banks, savings institutions, mortgage banking firms, credit unions, finance companies, brokerage firms, insurance agencies and mutual funds. As a result of their size and ability to achieve economies of scale, certain ofFirst Defiance’scompetitors can offer a broader range of products and services than the Company can offer. To stay competitive in its market area,First Defiancemay need to adjust the interest rates on its products to match rates of its competition, which could have a negative impact on net interest margin.
The increasing complexity of First Defiance’s operations presents varied risks that could affect its earnings and financial condition.
First Defianceprocesses a large volume of transactions on a daily basis and is exposed to numerous types of risks related to internal processes, people and systems. These risks include, but are not limited to, the risk of fraud by persons inside or outside the Company, the execution of unauthorized transactions by employees, errors relating to transaction processing and systems, breaches of data security and our internal control system and compliance with a complex array of consumer and safety and soundness regulations.First Defiancecould also experience additional loss as a result of potential legal actions that could arise as a result of operational deficiencies or as a result of noncompliance with applicable laws and regulations.
First Defiancehas established and maintains a system of internal controls that provides management with information on a timely basis and allows for the monitoring of compliance with operational standards. These systems have been designed to manage operational risks at an appropriate, cost effective level. Procedures exist that are designed to ensure that policies relating to conduct, ethics, and business practices are followed. Losses from operational risks may still occur, however, including losses from the effects of operational errors.
First Defiance’soperations are also dependent on its existing infrastructure, including equipment and facilities. Extended disruption of vital infrastructure as a result of fire, power loss, natural disaster, telecommunications failures, computer hacking or viruses, terrorist activity or the domestic response to such activity, or other events outside of the control of management could have a material adverse impact on its business, results of operations, cash flows and financial condition.First Defiancehas a business recovery plan, but there are no assurances that such a plan will work as intended or that it will prevent significant interruptions to operations.
Unauthorized disclosure of sensitive or confidential client or customer information, whether through a breach of the Company’s computer systems or otherwise, could severely harm its business.
In the normal course of business, First Defiance collects, processes and retains sensitive and confidential client and customer information on behalf of First Defiance and other third parties. Despite the security measures the Company has in place, First Defiance’s facilities and systems, and those of the Company’s third party service providers, may be vulnerable to security breaches, acts of vandalism, computer viruses, lost or misplaced data, or other similar events. Any security breach involving the unauthorized disclosure or loss of confidential customer information, whether by First Defiance or by the Company’s third party vendors, could severely damage First Defiance’s reputation, expose the Company to risks of litigation and liability, disrupt First Defiance’s operations and have a material adverse effect on First Defiance’s business.
Item 1B. Unresolved Staff Comments
None.
Item 2. Properties
At December 31, 2012, First Federal conducted its business from its main office at 601 Clinton Street, Defiance, Ohio, and thirty-two other full service banking centers in northwest Ohio, northeast Indiana and southeast Michigan. First Insurance conducted its business from leased office space at 419 5th Street, Suite 1200, Defiance, Ohio; 209 West Poe Road, Bowling Green, Ohio; 214 N. Defiance Street, Archbold, Ohio; 926 East High Street, Bryan, Ohio; 1755 Indian Wood Circle, Maumee, Ohio and 4350 Navarre Ave, Oregon, Ohio.
On September 14, 2012 the Company signed a lease for a new location for its Fort Wayne, IN office. The branch is now located on Dupont Road.
On August 31, 2012 the Company closed its branch on E. Chicago Blvd, Tecumseh, MI. This was a leased facility.
On June 25, 2012 the Company opened a second branch in Bowling Green, OH located on North Main Street. This branch is owned.
In 2009, the Company closed the Cole Street branch in Lima, Ohio which was owned. As of December 31, 2009, the Cole Street branch in Lima, Ohio was transferred at its fair value of $300,000 to other real estate owned. This property was written down in 2011 and 2012 and was sold in October of 2012 for $170,000.
First Defiance maintains its headquarters in the main office of First Federal at 601 Clinton Street, Defiance, Ohio. Back-office operation departments, including information technology, loan processing and underwriting, deposit processing, accounting and risk management are headquartered in an operations center located at 25600 Elliott Road, Defiance, Ohio.
The following table sets forth certain information with respect to the office and other properties of the Company at December 31, 2012. See Note 10 to the Consolidated Financial Statements.
Leased/ | Net Book Value | |||||||||
Description/address | Owned | of Property | Deposits | |||||||
(In Thousands) | ||||||||||
Main Office, First Federal | ||||||||||
601 Clinton St., Defiance, OH | Owned | $ | 4,102 | $ | 224,036 | |||||
Operations Center | ||||||||||
25600 Elliott Rd., Defiance, OH | Owned | 5,479 | N/A | |||||||
Mobile Banking | ||||||||||
1011 W. Beecher St., Adrian, MI | Owned | 197 | N/A | |||||||
Branch Offices, First Federal | ||||||||||
204 E. High St., Bryan, OH* | Owned | 686 | 127,104 | |||||||
211 S. Fulton St., Wauseon, OH | Owned | 467 | 52,127 | |||||||
625 Scott St., Napoleon, OH | Owned | 1,047 | 71,232 | |||||||
1050 East Main St., Montpelier, OH | Owned | 359 | 39,468 | |||||||
926 East High St., Bryan, OH* | Owned | 87 | - | |||||||
1800 Scott St., Napoleon, OH | Owned | 1,316 | 27,609 | |||||||
1177 N. Clinton St., Defiance, OH | Owned, Land Lease | 923 | 37,839 | |||||||
905 N. Williams St., Paulding, OH | Owned | 770 | 57,392 | |||||||
201 E. High St., Hicksville, OH | Owned | 365 | 27,381 | |||||||
3900 N. Main St., Findlay, OH | Owned | 979 | 56,571 | |||||||
11694 N. Countyline St., Fostoria, OH | Owned | 638 | 37,005 | |||||||
1226 W. Wooster, Bowling Green, OH | Owned | 1,013 | 89,261 | |||||||
301 S. Main St., Findlay, OH | Owned | 1,018 | 55,574 | |||||||
405 E. Main St., Ottawa, OH | Owned | 339 | 84,415 | |||||||
124 E. Main St., McComb, OH | Owned | 195 | 22,938 | |||||||
7591 Patriot Dr., Findlay, OH | Owned | 1,144 | 31,453 | |||||||
417 W Dussell Dr., Maumee, OH | Owned, Land Lease | 871 | 49,279 | |||||||
230 E. Second St., Delphos, OH | Owned | 1,032 | 100,865 | |||||||
105 S. Greenlawn Ave., Elida, OH | Owned | 330 | 47,384 | |||||||
2600 Allentown Rd., Lima, OH | Owned | 796 | 50,057 | |||||||
22020 W. State Rt. 51, Genoa, OH | Owned | 860 | 31,114 | |||||||
3426 Navarre Ave., Oregon, OH | Owned | 943 | 26,108 | |||||||
1077 Louisiana Ave., Perrysburg, OH | Owned | 1,099 | 29,800 | |||||||
2565 Shawnee Rd., Lima, OH | Owned | 1,457 | 38,417 | |||||||
1595 Dupont Rd., Fort Wayne, IN | Leased | - | 19,215 | |||||||
135 South Main St., Glandorf, OH | Leased | - | 11,005 | |||||||
300 N. Main St., Adrian, MI | Owned | 734 | 64,296 | |||||||
1701 W. Maumee St., Adrian, MI | Owned | 164 | 45,412 | |||||||
211 W. Main St., Morenci, MI | Owned | 165 | 28,207 | |||||||
539 S. Meridian, Hudson, MI | Owned | 576 | 40,253 | |||||||
1449 W. Chicago Blvd., Tecumseh, MI | Owned | 1,501 | 42,612 | |||||||
1200 North Main St., Bowling Green OH | Owned | 1,673 | 2,043 | |||||||
First Insurance Group | ||||||||||
419 5th Street, Suite 1200, Defiance, OH | Leased | 28 | N/A | |||||||
209 West Poe Road, Bowling Green, OH | Leased | 11 | N/A | |||||||
214 N. Defiance St., Archbold, OH | Leased | - | N/A | |||||||
926 E. High St., Bryan, OH** | Leased | - | N/A | |||||||
1755 Indian Wood Circle, Maumee, OH | Leased | - | N/A | |||||||
4350 Navarre Ave, Oregon, OH | Leased | - | N/A | |||||||
$ | 33,364 | $ | 1,667,472 |
*The Bryan East (926 East High St.) deposits are now included in the Bryan Main (204 E. High Street) totals.
** Located in the Bryan East branch.
Item 3. Legal Proceedings
First Defiance is involved in routine legal proceedings occurring in the ordinary course of business which, in the aggregate, are believed by management to be immaterial to the financial condition of First Defiance.
Item 4. Mine Safety Disclosures
Not applicable.
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
The Company’s common shares trade on The NASDAQ Global Select Market under the symbol “FDEF.” As of February 19, 2013, the Company had 2,097 shareholders of record.
The table below shows the reported high and low sales prices of the common shares and cash dividends declared per common share during the periods indicated in 2012 and 2011.
Years Ending | ||||||||||||||||||||||||
December 31, 2012 | December 31, 2011 | |||||||||||||||||||||||
High | Low | Dividend | High | Low | Dividend | |||||||||||||||||||
Quarter ended: | ||||||||||||||||||||||||
March 31 | $ | 17.76 | $ | 14.41 | $ | 0.05 | $ | 14.64 | $ | 11.89 | $ | - | ||||||||||||
June 30 | 17.46 | 15.23 | 0.05 | 15.00 | 13.22 | - | ||||||||||||||||||
September 30 | 18.06 | 15.80 | 0.05 | 15.51 | 12.60 | - | ||||||||||||||||||
December 31 | 19.38 | 15.75 | 0.05 | 15.39 | 13.00 | 0.05 |
First Defiance’s ability to pay dividends to its shareholders is primarily dependent on the ability of the Subsidiaries to pay dividends to First Defiance. The OCC advised the Company that prior approval would be required to pay dividends utilizing borrowings or other sources of funds to which the Company may have access to. Capital distributions include, without limitation, payments of cash dividends, repurchases and certain other acquisitions by an association of its shares and payments to shareholders of another association in an acquisition of such other association.
First Federal paid $37.0 million in dividends to First Defiance during 2012. First Insurance paid $300,000 in dividends to First Defiance during 2012. There were no dividends paid by First Federal or First Insurance in 2011.
The line graph below compares the yearly percentage change in cumulative total shareholder return on First Defiance common shares and the cumulative total return of the NASDAQ Composite Index, the SNL NASDAQ Bank Index and the SNL Midwest Thrift Index. An investment of $100 on December 31, 2007, and the reinvestment of all dividends are assumed. The performance graph represents past performance and should not be considered to be an indication of future performance.
Period Ending | ||||||||||||||||||||||||
Index | 12/31/07 | 12/31/08 | 12/31/09 | 12/31/10 | 12/31/11 | 12/31/12 | ||||||||||||||||||
First Defiance Financial Corp. | 100.00 | 37.59 | 57.71 | 60.83 | 74.84 | 99.62 | ||||||||||||||||||
NASDAQ Composite | 100.00 | 60.02 | 87.24 | 103.08 | 102.26 | 120.42 | ||||||||||||||||||
SNL Bank NASDAQ Index | 100.00 | 72.62 | 58.91 | 69.51 | 61.67 | 73.51 | ||||||||||||||||||
SNL Midwest Thrift Index | 100.00 | 88.86 | 74.85 | 60.68 | 53.52 | 69.20 |
First Defiance did not purchase any of its common shares during 2012, but has 93,124 shares that may be purchased under a plan announced by the Board of Directors on July 18, 2003.
Item 6. Selected Financial Data
The following table is derived from the Company’s audited financial statements as of and for the five years ended December 31, 2012. The following consolidated selected financial data should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and the Consolidated Financial Statements and related notes included elsewhere in this Form 10-K. The operating results of the acquired companies are included with the Company’s results of operations since their respective dates of acquisition.
As of and For the Year Ended December 31 | ||||||||||||||||||||
2012 | 2011 | 2010 | 2009 | 2008 | ||||||||||||||||
(Dollars in Thousands, Except Per Share Data | ||||||||||||||||||||
Financial Condition: | ||||||||||||||||||||
Total assets | $ | 2,046,948 | $ | 2,068,190 | $ | 2,035,517 | $ | 2,057,523 | $ | 1,957,400 | ||||||||||
Investment securities | 194,609 | 233,580 | 166,091 | 139,378 | 118,461 | |||||||||||||||
Loans receivable, net | 1,498,546 | 1,453,822 | 1,478,423 | 1,580,575 | 1,592,643 | |||||||||||||||
Allowance for loan losses | 26,711 | 33,254 | 41,080 | 36,547 | 24,592 | |||||||||||||||
Nonperforming assets (1) | 36,375 | 42,956 | 50,631 | 54,718 | 35,017 | |||||||||||||||
Deposits and borrowers’ escrow balances | 1,668,945 | 1,597,643 | 1,576,356 | 1,580,891 | 1,470,564 | |||||||||||||||
FHLB advances | 12,796 | 81,841 | 116,885 | 146,927 | 156,067 | |||||||||||||||
Stockholders’ equity | 258,128 | 278,127 | 240,331 | 234,086 | 229,159 | |||||||||||||||
Share Information: | ||||||||||||||||||||
Basic earnings per share | 1.86 | 1.44 | 0.75 | 0.64 | 0.91 | |||||||||||||||
Diluted earnings per share | 1.81 | 1.42 | 0.75 | 0.63 | 0.91 | |||||||||||||||
Book value per common share | 26.44 | 24.74 | 25.00 | 24.26 | 23.67 | |||||||||||||||
Tangible book value per common share | 19.63 | 17.78 | 17.16 | 16.44 | 15.67 | |||||||||||||||
Cash dividends per common share | 0.20 | 0.05 | - | 0.295 | 0.95 | |||||||||||||||
Dividend payout ratio | 10.75 | % | 3.47 | % | NM | 46.09 | % | 10.44 | % | |||||||||||
Weighted average diluted shares outstanding | 9,998 | 9,540 | 8,153 | 8,196 | 7,919 | |||||||||||||||
Shares outstanding end of period | 9,729 | 9,726 | 8,118 | 8,118 | 8,117 | |||||||||||||||
Operations: | ||||||||||||||||||||
Interest income | $ | 80,943 | $ | 87,067 | $ | 95,865 | $ | 100,579 | $ | 103,463 | ||||||||||
Interest expense | 11,937 | 17,186 | 25,702 | 33,257 | 41,268 | |||||||||||||||
Net interest income | 69,006 | 69,881 | 70,163 | 67,322 | 62,195 | |||||||||||||||
Provision for loan losses | 10,924 | 12,434 | 23,177 | 23,232 | 12,585 | |||||||||||||||
Non-interest income | 34,374 | 27,516 | 27,590 | 26,295 | 19,069 | |||||||||||||||
Non-interest expense | 65,780 | 62,764 | 63,463 | 60,524 | 57,794 | |||||||||||||||
Income before tax | 26,676 | 22,199 | 11,113 | 9,861 | 10,885 | |||||||||||||||
Federal income tax | 8,012 | 6,665 | 3,005 | 2,667 | 3,528 | |||||||||||||||
Net Income | 18,664 | 15,534 | 8,108 | 7,194 | 7,357 | |||||||||||||||
Performance Ratios: | ||||||||||||||||||||
Return on average assets | 0.90 | % | 0.75 | % | 0.39 | % | 0.36 | % | 0.40 | % | ||||||||||
Return on average equity | 6.99 | % | 5.89 | % | 3.40 | % | 3.09 | % | 3.85 | % | ||||||||||
Interest rate spread (2) | 3.64 | % | 3.69 | % | 3.68 | % | 3.50 | % | 3.51 | % | ||||||||||
Net interest margin (2) | 3.81 | % | 3.88 | % | 3.89 | % | 3.76 | % | 3.80 | % | ||||||||||
Ratio of operating expense to | ||||||||||||||||||||
average total assets | 3.19 | % | 3.05 | % | 3.09 | % | 2.99 | % | 3.12 | % | ||||||||||
Efficiency ratio (3) | 63.93 | % | 63.62 | % | 63.89 | % | 61.50 | % | 67.74 | % | ||||||||||
Capital Ratios: | ||||||||||||||||||||
Equity to total assets at end of period | 12.61 | % | 13.45 | % | 11.81 | % | 11.38 | % | 11.71 | % | ||||||||||
Tangible common equity to tangible assets | ||||||||||||||||||||
at end of period | 9.64 | % | 8.65 | % | 7.06 | % | 6.69 | % | 6.72 | % | ||||||||||
Average equity to average assets | 12.95 | % | 12.82 | % | 11.62 | % | 11.49 | % | 10.30 | % | ||||||||||
Asset Quality Ratios: | ||||||||||||||||||||
Nonperforming assets to total assets | ||||||||||||||||||||
at end of period (1) | 1.78 | % | 2.08 | % | 2.49 | % | 2.66 | % | 1.79 | % | ||||||||||
Allowance for loan losses to total loans* | 1.75 | % | 2.24 | % | 2.70 | % | 2.26 | % | 1.52 | % | ||||||||||
Net charge-offs to average loans | 1.18 | % | 1.41 | % | 1.21 | % | 0.70 | % | 0.41 | % |
* Total loans are net of undisbursed loan funds and deferred fees and costs.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements and Factors that Could Affect Future Results
Certain statements contained in this Annual Report on Form 10-K that are not statements of historical fact constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (“Act”), notwithstanding that such statements are not specifically identified as such. In addition, certain statements may be contained in the Company’s future filings with the SEC, in press releases, and in oral and written statements made by or with the approval of the Corporation that are not statements of historical fact and constitute forward-looking statements within the meaning of the Act. Examples of forward-looking statements include, but are not limited to: (i) projections of revenues, expenses, income or loss, earnings or loss per common share, the payment or nonpayment of dividends, capital structure and other financial items; (ii) statements of plans, objectives and expectations of First Defiance or its management or Board of Directors, including those relating to products or services; (iii) statements of future economic performance; and (iv) statements of assumptions underlying such statements. Words such as “believes”, “anticipates”, “expects”, “intends”, “targeted”, “continue”, “remain”, “will”, “should”, “may” and other similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements.
Forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from those in such statements. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to:
Forward-looking statements speak only as of the date on which such statements are made. The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events.
The following section presents information to assess the financial condition and results of operations of First Defiance. This section should be read in conjunction with the consolidated financial statements and the supplemental financial data contained elsewhere in this Annual Report on Form 10-K.
Overview
First Defiance is a unitary thrift holding company that conducts business through its subsidiaries, First Federal, First Insurance and First Defiance Risk Management.
First Federal is a federally chartered stock savings bank that provides financial services to communities based in northwest Ohio, northeast Indiana, and southeastern Michigan where it operates 33 full service banking centers in 12 northwest Ohio counties, 1 northeast Indiana county, and 1 southeastern Michigan county.
First Federal provides a broad range of financial services including checking accounts, savings accounts, certificates of deposit, real estate mortgage loans, commercial loans, consumer loans, home equity loans and trust and wealth management services through its extensive branch network.
First Insurance sells a variety of property and casualty, group health and life and individual health and life insurance products. First Insurance is an insurance agency that does business in the Defiance, Archbold, Bryan, Bowling Green, Maumee and Oregon, Ohio areas. On July 1, 2011, the Company completed its acquisition of Payak-Dubbs Insurance Agency, Inc. (“PDI”), an independent property and casualty insurance agency with two office locations based in Maumee, Ohio and Oregon, Ohio for a cash price of $4.8 million. PDI was merged into First Insurance. See Note 3 – Acquisitions in the Notes to the Financial Statements.
First Defiance Risk Management is a wholly-owned insurance company subsidiary of the Company to insure the Company and its subsidiaries against certain risks unique to the operations of the Company and for which insurance may not be currently available or economically feasible in today’s insurance marketplace. First Defiance Risk Management pools resources with several other similar insurance company subsidiaries of financial institutions to spread a limited amount of risk among themselves. First Defiance Risk Management was incorporated on December 20, 2012.
Recent Developments
- 22 - | ||
- | ||
The proposed rules include new risk-based capital and leverage ratios, which wouldwill be phased in from 20132015 to 2019, and wouldwill refine the definition of what constitutes “capital” for purposes of calculating those ratios. The proposed new minimum capital level requirements applicable to First Defiance and First Federal under the proposals would be:final rules are: (i) a new common equity Tier 1 capital ratio of 4.5%; (ii) a Tier 1 capital ratio of 6% (increased from 4%); (iii) a total capital ratio of 8% (unchanged from current rules); and (iv) a Tier 1 leverage ratio of 4% for all institutions. The proposedfinal rules would also establish a “capital conservation buffer” of 2.5% above the new regulatory minimum capital requirements, which must consist entirely of common equity Tier 1 capital. The capital conservation buffer will be phased-in over four years beginning on January 1, 2016, as follows: the maximum buffer will be 0.625% of risk-weighted assets for 2016, 1.25% for 2017, 1.875% for 2018, and would2.5% for 2019 and thereafter. This will result in the following minimum ratios:ratios beginning in 2019: (i) a common equity Tier 1 capital ratio of 7.0%, (ii) a Tier 1 capital ratio of 8.5%, and (iii) a total capital ratio of 10.5%. Under the final rules, institutions are subject to limitations on paying dividends, engaging in share repurchases, and paying discretionary bonuses if its capital level falls below the buffer amount. These limitations establish a maximum percentage of eligible retained income that could be utilized for such actions.
they redeem such instruments or until the instruments mature.
- 24 - | ||
- | ||
· | more borrowers are unable to make payments on their loans; |
· | the value of collateral securing loans has declined; and |
· | the overall quality of the loan portfolio has declined. |
· | inability of borrowers to make timely repayments of their loans, or decreases in value of real estate collateral securing the payment of such loans resulting in significant credit losses, which could result in increased delinquencies, foreclosures and customer bankruptcies, any of which could have a material adverse effect on our operating results; |
· | increased regulation of the financial services industry, including heightened legal standards and regulatory requirements or expectations; compliance with such regulation will likely increase costs and may limit the Company’s ability to pursue business opportunities; |
· | further disruptions in the capital markets or other events, including actions by rating agencies and deteriorating investor expectations, may result in an inability to borrow on favorable terms or at all from other financial institutions; |
· | increased competition among financial services companies due to the consolidation of financial institutions, which may adversely affect our ability to market the Company’s products and services; and |
· | further increases in FDIC insurance premiums due to the market developments which have significantly depleted the insurance fund of the FDIC and reduced the ratio of reserves to insured deposits. |
- 26 - | ||
· | Actions by government regulators; |
· | First Defiance’s announcements of developments related to its business; |
· | Fluctuation in First Defiance’s results of operation; |
· | Sales of substantial amounts of First Defiance’s securities into the marketplace; and |
· | New reports of trends, concerns and other issues related to the financial services industry. |
Commercial and Commercial Real Estate Lending -Commercial and commercial real estate lending have been an ongoing focusloans and a major componentcommercial loans, which involve risks specific to real estate value and the successful operations of these businesses.
- 27 - | ||
· | the rate of inflation; |
· | economic conditions; |
· | federal monetary policies; and |
· | stability of domestic and foreign markets. |
- 28 - | ||
- 29 - | ||
- 30 - | ||
- 31 - | ||
Leased/ | Net Book Value | ||||||||
Description/address | Owned | of Property | Deposits | ||||||
(In Thousands) | |||||||||
Main Office, First Federal | |||||||||
601 Clinton St., Defiance, OH | Owned | $ | 4,476 | $ | 220,886 | ||||
Operations Center | |||||||||
25600 Elliott Rd., Defiance, OH | Owned | 5,311 | N/A | ||||||
Mobile Banking | |||||||||
1011 W. Beecher St., Adrian, MI | Owned | 190 | N/A | ||||||
Branch Offices, First Federal | |||||||||
204 E. High St., Bryan, OH* | Owned | 649 | 134,120 | ||||||
211 S. Fulton St., Wauseon, OH | Owned | 437 | 52,457 | ||||||
625 Scott St., Napoleon, OH | Owned | 999 | 68,800 | ||||||
1050 East Main St., Montpelier, OH | Owned | 347 | 39,415 | ||||||
926 East High St., Bryan, OH* | Owned | 87 | - | ||||||
1800 Scott St., Napoleon, OH | Owned | 1,269 | 28,394 | ||||||
1177 N. Clinton St., Defiance, OH | Owned, Land Lease Leased | 875 | 38,915 | ||||||
905 N. Williams St., Paulding, OH | Owned | 738 | 61,033 | ||||||
201 E. High St., Hicksville, OH | Owned | 346 | 30,422 | ||||||
3900 N. Main St., Findlay, OH | Owned | 937 | 47,654 | ||||||
11694 N. Countyline St., Fostoria, OH | Owned | 638 | 40,681 | ||||||
1226 W. Wooster, Bowling Green, OH | Owned | 979 | 101,144 | ||||||
301 S. Main St., Findlay, OH | Owned | 960 | 56,849 | ||||||
405 E. Main St., Ottawa, OH | Owned | 324 | 88,830 | ||||||
124 E. Main St., McComb, OH | Owned | 186 | 19,862 | ||||||
7591 Patriot Dr., Findlay, OH | Owned | 1,115 | 35,557 | ||||||
417 W Dussell Dr., Maumee, OH | Owned, Land Lease | 830 | 53,861 | ||||||
230 E. Second St., Delphos, OH | Owned | 989 | 95,362 | ||||||
105 S. Greenlawn Ave., Elida, OH | Owned | 319 | 47,180 | ||||||
2600 Allentown Rd., Lima, OH | Owned | 770 | 45,466 | ||||||
22020 W. State Rt. 51, Genoa, OH | Owned | 829 | 30,908 | ||||||
3426 Navarre Ave., Oregon, OH | Owned | 910 | 29,771 | ||||||
1077 Louisiana Ave., Perrysburg, OH | Owned | 1,070 | 30,963 | ||||||
2565 Shawnee Rd., Lima, OH | Owned | 1,406 | 70,821 | ||||||
1595 Dupont Rd., Fort Wayne, IN | Leased | 28 | 21,388 | ||||||
135 South Main St., Glandorf, OH | Leased | - | 16,149 | ||||||
300 N. Main St., Adrian, MI | Owned | 704 | 64,288 | ||||||
1701 W. Maumee St., Adrian, MI | Owned | 160 | 45,320 | ||||||
211 W. Main St., Morenci, MI | Owned | 159 | 28,771 | ||||||
539 S. Meridian, Hudson, MI | Owned | 555 | 39,935 | ||||||
1449 W. Chicago Blvd., Tecumseh, MI | Owned | 1,472 | 45,946 | ||||||
1200 North Main St., Bowling Green OH | Owned | 1,644 | 4,644 | ||||||
First Insurance Group | |||||||||
419 5th Street, Suite 1200, Defiance, OH | Leased | 17 | N/A | ||||||
209 West Poe Road, Bowling Green, OH | Leased | 8 | N/A | ||||||
926 E. High Street, Bryan, OH | Leased | - | N/A | ||||||
1755 Indian Wood Circle, Maumee, OH | Leased | - | N/A | ||||||
4350 Navarre Ave, Oregon, OH | Leased | - | N/A | ||||||
$ | 32,733 | $ | 1,735,792 |
- 32 - | ||
Years Ending | |||||||||||||||||||
December 31, 2013 | December 31, 2012 | ||||||||||||||||||
High | Low | Dividend | High | Low | Dividend | ||||||||||||||
Quarter ended: | |||||||||||||||||||
March 31 | $ | 23.75 | $ | 18.42 | $ | 0.10 | $ | 17.76 | $ | 14.41 | $ | 0.05 | |||||||
June 30 | 23.75 | 20.80 | 0.10 | 17.46 | 15.23 | 0.05 | |||||||||||||
September 30 | 28.46 | 22.49 | 0.10 | 18.06 | 15.80 | 0.05 | |||||||||||||
December 31 | 27.25 | 23.31 | 0.10 | 19.38 | 15.75 | 0.05 |
- 33 - | ||
Period Ending | |||||||||||||
Index | 12/31/08 | 12/31/09 | 12/31/10 | 12/31/11 | 12/31/12 | 12/31/13 | |||||||
First Defiance Financial Corp. | 100.00 | 153.53 | 161.82 | 199.10 | 265.02 | 364.68 | |||||||
NASDAQ Composite | 100.00 | 145.36 | 171.74 | 170.38 | 200.63 | 281.22 | |||||||
SNL Bank NASDAQ | 100.00 | 81.12 | 95.71 | 84.92 | 101.22 | 145.48 | |||||||
SNL Midwest Thrift | 100.00 | 84.23 | 68.28 | 60.23 | 77.87 | 96.03 |
Total Number of | ||||||||||
Shares Purchased | Maximum Number of | |||||||||
as Part of | Shares (or Approximate | |||||||||
Total Number of | Average Price | Publicly | Dollar Value) that May | |||||||
Shares | Paid Per | Announced Plans | Yet Be Purchased Under | |||||||
Period | Purchased | Share | or Programs (1) | the Plans or Programs (2) | ||||||
October 1 – October 31, 2013 | - | $ | - | - | - | |||||
November 1 – November 30, 2013 | 23,127 | 25.16 | 23,127 | 465,873 | ||||||
December 1 – December 31, 2013 | 47,839 | 25.89 | 47,839 | 418,034 | ||||||
Total | 70,966 | $ | 25.65 | 70,966 | 418,034 |
- 34 - | ||
(1) | The reported shares were repurchased pursuant to First Defiance’s publicly announced stock repurchase program, which became effective September 30, 2013. Up to 489,000 shares were authorized to be purchased under the program. There is no expiration date for the program. |
(2) | The number of shares shown represents, as of the end of each period, the maximum number of shares of common stock that may yet be purchased under publicly announced stock repurchase programs. The shares may be purchased, from time to time, depending on market conditions. |
- 35 - | ||
As of and For the Year Ended December 31 | ||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | ||||||||||||||||
(Dollars in Thousands, Except Per Share Data | ||||||||||||||||||||
Financial Condition: | ||||||||||||||||||||
Total assets | $ | 2,137,148 | $ | 2,046,948 | $ | 2,068,190 | $ | 2,035,517 | $ | 2,057,523 | ||||||||||
Investment securities | 198,557 | 194,609 | 233,580 | 166,091 | 139,378 | |||||||||||||||
Loans receivable, net | 1,555,498 | 1,498,546 | 1,453,822 | 1,478,423 | 1,580,575 | |||||||||||||||
Allowance for loan losses | 24,950 | 26,711 | 33,254 | 41,080 | 36,547 | |||||||||||||||
Nonperforming assets (1) | 33,706 | 36,375 | 42,956 | 50,631 | 54,718 | |||||||||||||||
Deposits and borrowers’ escrow balances | 1,737,311 | 1,668,945 | 1,597,643 | 1,576,356 | 1,580,891 | |||||||||||||||
FHLB advances | 22,520 | 12,796 | 81,841 | 116,885 | 146,927 | |||||||||||||||
Stockholders’ equity | 272,147 | 258,128 | 278,127 | 240,331 | 234,086 | |||||||||||||||
Share Information: | ||||||||||||||||||||
Basic earnings per share | 2.28 | 1.86 | 1.44 | 0.75 | 0.64 | |||||||||||||||
Diluted earnings per share | 2.19 | 1.81 | 1.42 | 0.75 | 0.63 | |||||||||||||||
Book value per common share | 27.91 | 26.44 | 24.74 | 25.00 | 24.26 | |||||||||||||||
Tangible book value per common share | 21.22 | 19.63 | 17.78 | 17.16 | 16.44 | |||||||||||||||
Cash dividends per common share | 0.40 | 0.20 | 0.05 | - | 0.295 | |||||||||||||||
Dividend payout ratio | 17.45 | % | 10.75 | % | 3.47 | % | NM | 46.09 | % | |||||||||||
Weighted average diluted shares outstanding | 10,171 | 9,998 | 9,540 | 8,153 | 8,196 | |||||||||||||||
Shares outstanding end of period | 9,720 | 9,729 | 9,726 | 8,118 | 8,118 | |||||||||||||||
Operations: | ||||||||||||||||||||
Interest income | $ | 74,781 | $ | 80,943 | $ | 87,067 | $ | 95,865 | $ | 100,579 | ||||||||||
Interest expense | 7,170 | 11,937 | 17,186 | 25,702 | 33,257 | |||||||||||||||
Net interest income | 67,611 | 69,006 | 69,881 | 70,163 | 67,322 | |||||||||||||||
Provision for loan losses | 1,824 | 10,924 | 12,434 | 23,177 | 23,232 | |||||||||||||||
Non-interest income | 30,570 | 34,374 | 27,516 | 27,590 | 26,295 | |||||||||||||||
Non-interest expense | 64,844 | 65,780 | 62,764 | 63,463 | 60,524 | |||||||||||||||
Income before tax | 31,513 | 26,676 | 22,199 | 11,113 | 9,861 | |||||||||||||||
Federal income tax | 9,278 | 8,012 | 6,665 | 3,005 | 2,667 | |||||||||||||||
Net Income | 22,235 | 18,664 | 15,534 | 8,108 | 7,194 | |||||||||||||||
Performance Ratios: | ||||||||||||||||||||
Return on average assets | 1.08 | % | 0.90 | % | 0.75 | % | 0.39 | % | 0.36 | % | ||||||||||
Return on average equity | 8.39 | % | 6.99 | % | 5.89 | % | 3.40 | % | 3.09 | % | ||||||||||
Interest rate spread (2) | 3.65 | % | 3.64 | % | 3.69 | % | 3.68 | % | 3.50 | % | ||||||||||
Net interest margin (2) | 3.76 | % | 3.81 | % | 3.88 | % | 3.89 | % | 3.76 | % | ||||||||||
Ratio of operating expense to average total assets | 3.16 | % | 3.19 | % | 3.05 | % | 3.09 | % | 2.99 | % | ||||||||||
Efficiency ratio (3) | 64.81 | % | 63.93 | % | 63.62 | % | 63.89 | % | 61.50 | % | ||||||||||
Capital Ratios: | ||||||||||||||||||||
Equity to total assets at end of period | 12.73 | % | 12.61 | % | 13.45 | % | 11.81 | % | 11.38 | % | ||||||||||
Tangible common equity to tangible assets at end of period | 9.94 | % | 9.64 | % | 8.65 | % | 7.06 | % | 6.69 | % | ||||||||||
Average equity to average assets | 12.92 | % | 12.95 | % | 12.82 | % | 11.62 | % | 11.49 | % | ||||||||||
Asset Quality Ratios: | ||||||||||||||||||||
Nonperforming assets to total assets at end of period (1) | 1.58 | % | 1.78 | % | 2.08 | % | 2.49 | % | 2.66 | % | ||||||||||
Allowance for loan losses to total loans* | 1.58 | % | 1.75 | % | 2.24 | % | 2.70 | % | 2.26 | % | ||||||||||
Net charge-offs to average loans | 0.23 | % | 1.18 | % | 1.41 | % | 1.21 | % | 0.70 | % |
(1) | Nonperforming assets consist of non-accrual loans that are contractually past due 90 days or more and real estate, mobile homes and other assets acquired by foreclosure or deed-in-lieu thereof. |
(2) | Interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate on interest-bearing liabilities. Net interest margin represents net interest income as a percentage of average interest-earning assets. Interest income on tax-exempt securities and loans has been adjusted to a tax-equivalent basis using the statutory federal income tax rate of 35%. |
(3) | Efficiency ratio represents non-interest expense divided by the sum of tax-equivalent net interest income plus non-interest income, excluding securities gain or losses, net. |
- 36 - | ||
· | Local, regional, national and international economic conditions and the impact they may have on the Company and its customers and the Company’s assessment of that impact. |
· | Volatility and disruption in national and international financial markets. |
· | Government intervention in the U.S. financial system. |
· | Changes in the level of non-performing assets and charge-offs. |
· | Changes in estimates of future reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements. |
· | The effects of and changes in trade and monetary and fiscal policies and laws, including the interest rate policies of the Federal Reserve Board. |
· | Inflation, interest rate, securities market and monetary fluctuations. |
· | Political instability. |
· | Acts of God or of war or terrorism. |
· | The timely development and acceptance of new products and services and perceived overall value of these products and services by users. |
· | Changes in consumer spending, borrowing and saving habits. |
· | Changes in the financial performance and/or condition of the Company’s borrowers. |
· | Technological changes including core system conversions. |
· | Acquisitions and integration of acquired businesses. |
· | The ability to increase market share and control expenses. |
· | Changes in the competitive environment among financial holding companies and other financial service providers. |
· | The effect of changes in laws and regulations (including laws and regulations concerning taxes, banking, securities and insurance) with which the Company and the subsidiaries must comply. |
- 37 - | ||
· | The effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board and other accounting standard setters. |
· | The costs and effects of legal and regulatory developments including the resolution of legal proceedings or regulatory or other governmental inquiries and the results of regulatory examinations or reviews. |
· | Greater than expected costs or difficulties related to the integration of new products and lines of business. |
· | The Company’s success at managing the risks involved in the foregoing items. |
Consumer Banking -First Federal offers customers a fullbroad range of deposit and investment productsfinancial services including demand, NOW, money market,checking accounts, savings accounts, certificates of deposits, CDARS and savings accounts. First Federal offers a full range of investment products through the wealth management department and a wide variety ofdeposit, real estate mortgage loans, commercial loans, consumer loan products, including residential mortgage loans, home equity loans installment loans and education loans. First Federal also offers online banking services, which include online bill pay along with debit cards.
Fee Income Development - Generation of fee incometrust and the diversification of revenue sources are accomplished through the mortgage banking operation, insurance subsidiary and the wealth management department asservices through its extensive branch network.
Deposit Growth -Insurance sells a variety of property and casualty, group health and life and individual health and life insurance products. First Federal’s focus has been to grow core deposits withInsurance is an emphasis on total relationship banking with both our retail and commercial customers. First Federal has initiated a pricing strategyinsurance agency that considers the whole relationship of the customer. First Federal will continue to focus on increasing its market sharedoes business in the communities it serves by providing quality products with extraordinary customer service, business development strategiesDefiance, Bryan, Bowling Green, Maumee and branch expansion. First Federal will look to grow its footprint in areas believed to further compliment its overall market share and compliment its strategy of being a high performing community bank.
Asset Quality - Maintaining a strong credit culture is ofOregon, Ohio areas. On July 1, 2011, the utmost importance to First Federal. First Federal has maintained a strong credit approval and review process that has allowed the Company to maintain a credit quality standard that balances the return with the risks of industry concentrations and loan types. First Federal is primarily a collateral lender with an emphasis on cash flow performance, while obtaining additional support from personal guarantees and secondary sources of repayment. First Federal has directed its attention on loan types and markets that it knows well and in which it has historically been successful in. First Federal strives to have loan relationships that are well diversified in both size and industry, and monitor the overall trends in the portfolio to maintain its industry and loan type concentration targets. First Federal maintains a problem loan remediation process that focuses on detection and resolution. First Federal maintains a strong process of internal control that subjects the loan portfolio to periodic internal reviews as well as independent third party loan review.
Expansion Opportunities - First Defiance believes it is well positioned to take advantage of acquisitions or other business opportunities in its market areas, including FDIC-assisted transactions. First Defiance believes it has a track record of successfully accomplishing both acquisitions and de novo branching in its market area. This track record puts the Company in a solid position to enter or expand its business. First Defiance has successfully integrated acquired institutions in the past with the most recent acquisition completed in 2008. First Defiance will continue to be disciplined as well as opportunistic in its approach to future acquisitions and de novo branching with a focus on its primary geographic market area, which it knows well and has been competing in for a long period of time. First Defiance completed its acquisition of Payak-Dubbs Insurance Agency, Inc. (“PDI”), an independent property and casualty insurance agency with two office locations based in Maumee, Ohio and Oregon, Ohio for a cash price of $4.8 million. PDI on July 1, 2011, which was merged into First Insurance with offices locatedInsurance. See Note 3 – Acquisitions in Maumee and Oregon, Ohio.
Common Stock Offering
During the first quarterNotes to the Financial Statements.
risk among themselves
. First Defiance Risk Management was incorporated on December 20, 2012.- 38 - | ||
2012.
2012.
- 39 - | ||
- 40 - | ||
2013.
- 41 - | ||
ECONOMIC
1) | Changes in international, national and local economic business conditions and developments, including the condition of various market segments. |
2) | Changes in the value of underlying collateral for collateral dependent loans. |
3) | Changes in the nature and volume in the loan portfolio. |
4) | The existence and effect of any concentrations of credit and changes in the level of such concentrations. |
5) | Changes in lending policies and procedures, including underwriting standards and |
6) | Changes in the quality and breadth of the loan review process. |
7) | Changes in the experience, ability and depth of lending management and staff. |
8) | Changes in the trends of the volume and severity of delinquent and classified loans, and changes in the volume of non-accrual loans, trouble debt restructuring, and other loan modifications. |
9) | Changes in the political and regulatory environment. |
- 42 - | ||
2012.
Table 1 – Nonperforming Asset
December 31 | ||||||||
2012 | 2011 | |||||||
(In thousands) | ||||||||
Non-performing loans: | ||||||||
Single-family residential | $ | 3,602 | $ | 3,890 | ||||
Construction | - | - | ||||||
Non-residential and multi-family residential real estate | 23,090 | 28,150 | ||||||
Commercial | 5,661 | 6,884 | ||||||
Consumer finance | - | 10 | ||||||
Home equity and improvement | 217 | 394 | ||||||
Total non-performing loans | 32,570 | 39,328 | ||||||
Real estate owned and repossessed assets | 3,805 | 3,628 | ||||||
Total non-performing assets | $ | 36,375 | $ | 42,956 | ||||
Allowance for loan losses as a percentage of total loans* | 1.75 | % | 2.24 | % | ||||
Allowance for loan losses as a percentage of non-performing assets | 73.43 | % | 77.41 | % | ||||
Allowance for loan losses as a percentage of non-performing loans | 82.01 | % | 84.56 | % | ||||
Total non-performing assets as a percentage of total assets | 1.78 | % | 2.08 | % | ||||
Total non-performing loans as a percentage of total loans* | 2.14 | % | 2.64 | % |
* Total loans are net of undisbursed loan funds and deferred fees and costs.
2013.
Non-performing assets, which include non-accrual loans and real estate owned, decreased to $36.4 million at December 31, 2012 from $43.0 million at December 31, 2011.
The following table details
- 43 - | ||
For the Twelve Months Ended December 31, 2012 | As of December 31, 2012 | |||||||||||||||
Net | % of Total Net | Nonaccrual | % of Total Non- | |||||||||||||
Charge-offs | Charge-offs | Loans | Accrual Loans | |||||||||||||
(in thousands) | (in thousands) | |||||||||||||||
Residential | $ | 2,338 | 13.38 | % | $ | 3,602 | 11.06 | % | ||||||||
Construction | - | 0.00 | % | - | 0.00 | % | ||||||||||
Commercial real estate | 10,302 | 58.98 | % | 23,090 | 70.89 | % | ||||||||||
Commercial | 3,688 | 21.11 | % | 5,661 | 17.38 | % | ||||||||||
Consumer finance | 69 | 0.40 | % | - | 0.00 | % | ||||||||||
Home equity and improvement | 1,070 | 6.13 | % | 217 | 0.67 | % | ||||||||||
Total | $ | 17,467 | 100.00 | % | $ | 32,570 | 100.00 | % |
For the Twelve Months Ended December 31, 2011 | As of December 31, 2011 | |||||||||||||||
Net | % of Total Net | Nonaccrual | % of Total Non- | |||||||||||||
Charge-offs | Charge-offs | Loans | Accrual Loans | |||||||||||||
(in thousands) | (in thousands) | |||||||||||||||
Residential | $ | 2,626 | 12.96 | % | $ | 3,890 | 9.89 | % | ||||||||
Construction | - | 0.00 | % | - | 0.00 | % | ||||||||||
Commercial real estate | 12,617 | 62.28 | % | 28,150 | 71.58 | % | ||||||||||
Commercial | 4,005 | 19.77 | % | 6,884 | 17.50 | % | ||||||||||
Consumer finance | 25 | 0.12 | % | 10 | 0.03 | % | ||||||||||
Home equity and improvement | 987 | 4.87 | % | 394 | 1.00 | % | ||||||||||
Total | $ | 20,260 | 100.00 | % | $ | 39,328 | 100.00 | % |
Table 3 – Allowance for Loan Loss Activity
For the Quarter Ended | ||||||||||||||||||||
4th 2012 | 3rd 2012 | 2nd 2012 | 1st 2012 | 4th 2011 | ||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||
Allowance at beginning of period | $ | 26,310 | $ | 26,409 | $ | 28,833 | $ | 33,254 | $ | 38,110 | ||||||||||
Provision for credit losses | 2,619 | 705 | 4,097 | 3,503 | 4,099 | |||||||||||||||
Charge-offs: | ||||||||||||||||||||
Residential | 976 | 217 | 584 | 738 | 666 | |||||||||||||||
Commercial real estate | 595 | 780 | 5,448 | 4,496 | 6,738 | |||||||||||||||
Commercial | 540 | 355 | 486 | 2,666 | 1,423 | |||||||||||||||
Consumer finance | 59 | 19 | 14 | 41 | 27 | |||||||||||||||
Home equity and improvement | 497 | 203 | 254 | 211 | 251 | |||||||||||||||
Total charge-offs | 2,667 | 1,574 | 6,786 | 8,152 | 9,105 | |||||||||||||||
Recoveries | 449 | 770 | 265 | 228 | 150 | |||||||||||||||
Net charge-offs | 2,218 | 804 | 6,521 | 7,924 | 8,955 | |||||||||||||||
Ending allowance | $ | 26,711 | $ | 26,310 | $ | 26,409 | $ | 28,833 | $ | 33,254 |
For the Twelve Months Ended December 31, 2013 | As of December 31, 2013 | ||||||||||
Net | % of Total Net | Nonaccrual | % of Total Non- | ||||||||
Charge-offs | Charge-offs | Loans | Accrual Loans | ||||||||
(in thousands) | (in thousands) | ||||||||||
Residential | $ | 361 | 10.07 | % | $ | 3,273 | 11.76 | % | |||
Construction | - | 0.00 | % | - | 0.00 | % | |||||
Commercial real estate | 1,638 | 45.69 | % | 15,834 | 56.86 | % | |||||
Commercial | 940 | 26.22 | % | 8,327 | 29.90 | % | |||||
Consumer finance | 14 | 0.39 | % | - | 0.00 | % | |||||
Home equity and improvement | 632 | 17.63 | % | 413 | 1.48 | % | |||||
Total | $ | 3,585 | 100.00 | % | $ | 27,847 | 100.00 | % |
For the Twelve Months Ended December 31, 2012 | As of December 31, 2012 | ||||||||||
Net | % of Total Net | Nonaccrual | % of Total Non- | ||||||||
Charge-offs | Charge-offs | Loans | Accrual Loans | ||||||||
(in thousands) | (in thousands) | ||||||||||
Residential | $ | 2,338 | 13.38 | % | $ | 3,602 | 11.06 | % | |||
Construction | - | 0.00 | % | - | 0.00 | % | |||||
Commercial real estate | 10,302 | 58.98 | % | 23,090 | 70.89 | % | |||||
Commercial | 3,688 | 21.11 | % | 5,661 | 17.38 | % | |||||
Consumer finance | 69 | 0.40 | % | - | 0.00 | % | |||||
Home equity and improvement | 1,070 | 6.13 | % | 217 | 0.67 | % | |||||
Total | $ | 17,467 | 100.00 | % | $ | 32,570 | 100.00 | % |
December 31, 2013 and December 31, 2012.
December 31, 2012 | September 30, 2012 | June 30, 2012 | March 31, 2012 | December 31, 2011 | ||||||||||||||||||||||||||||||||||||
Percent of | Percent of | Percent of | Percent of | Percent of | ||||||||||||||||||||||||||||||||||||
total loans | total loans | total loans | total loans | total loans | ||||||||||||||||||||||||||||||||||||
Amount | by category | Amount | by category | Amount | by category | Amount | by category | Amount | by category | |||||||||||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||
Residential | $ | 3,506 | 13.00 | % | $ | 2,996 | 13.75 | % | $ | 3,104 | 13.94 | % | $ | 3,373 | 13.58 | % | $ | 4,095 | 13.55 | % | ||||||||||||||||||||
Construction | 75 | 2.45 | % | 63 | 2.06 | % | 48 | 1.52 | % | 73 | 2.44 | % | 63 | 2.10 | % | |||||||||||||||||||||||||
Commercial real estate | 14,899 | 51.63 | % | 16,260 | 51.87 | % | 16,562 | 51.33 | % | 19,031 | 53.10 | % | 20,490 | 51.70 | % | |||||||||||||||||||||||||
Commercial | 6,325 | 24.85 | % | 5,103 | 23.92 | % | 5,087 | 24.64 | % | 4,693 | 21.97 | % | 6,576 | 23.25 | % | |||||||||||||||||||||||||
Consumer | 147 | 1.03 | % | 147 | 1.10 | % | 140 | 1.13 | % | 178 | 1.19 | % | 174 | 1.26 | % | |||||||||||||||||||||||||
Home equity and improvement | 1,759 | 7.04 | % | 1,741 | 7.30 | % | 1,468 | 7.44 | % | 1,485 | 7.72 | % | 1,856 | 8.14 | % | |||||||||||||||||||||||||
$ | 26,711 | 100.00 | % | $ | 26,310 | 100.00 | % | $ | 26,409 | 100.00 | % | $ | 28,833 | 100.00 | % | $ | 33,254 | 100.00 | % |
December 31, 2013 | December 31, 2012 | ||||||||||
Percent of | Percent of | ||||||||||
total loans | total loans | ||||||||||
Amount | by category | Amount | by category | ||||||||
(dollars in thousands) | |||||||||||
Residential | $ | 2,847 | 12.13 | % | $ | 3,506 | 13.00 | % | |||
Construction | 134 | 5.33 | % | 75 | 2.45 | % | |||||
Commercial real estate | 14,508 | 50.80 | % | 14,899 | 51.63 | % | |||||
Commercial | 5,678 | 24.06 | % | 6,325 | 24.85 | % | |||||
Consumer | 148 | 1.05 | % | 147 | 1.03 | % | |||||
Home equity and improvement | 1,635 | 6.63 | % | 1,759 | 7.04 | % | |||||
$ | 24,950 | 100.00 | % | $ | 26,711 | 100.00 | % |
Table 5 – Key Asset Quality Ratio Trends
4th Qtr 2012 | 3rd Qtr 2012 | 2nd Qtr 2012 | 1st Qtr 2012 | 4th Qtr 2011 | ||||||||||||||||
Allowance for loan losses / loans* | 1.75 | % | 1.74 | % | 1.76 | % | 1.96 | % | 2.24 | % | ||||||||||
Allowance for loan losses to net charge-offs | 1204.83 | % | 3272.39 | % | 404.98 | % | 363.87 | % | 371.35 | % | ||||||||||
Allowance for loan losses / non-performing assets | 73.43 | % | 64.73 | % | 58.38 | % | 59.13 | % | 77.41 | % | ||||||||||
Allowance for loan losses / non-performing loans | 82.01 | % | 69.60 | % | 63.33 | % | 63.58 | % | 84.56 | % | ||||||||||
Non-performing assets / loans plus REO* | 2.38 | % | 2.68 | % | 3.01 | % | 3.30 | % | 2.88 | % | ||||||||||
Non-performing assets / total assets | 1.78 | % | 1.98 | % | 2.19 | % | 2.28 | % | 2.08 | % | ||||||||||
Net charge-offs / average loans (annualized) | 0.59 | % | 0.22 | % | 1.78 | % | 2.18 | % | 2.49 | % |
* Total loans are net of undisbursed funds and deferred fees and costs.
- 44 - |
$230,000.
In October 2012, the Company executed a balance sheet restructuring strategy to enhance the Company’s current and future profitability while increasing its capital ratios and protecting the balance sheet against rising rates. The strategy required taking an after tax loss of approximately $260,000 through selling $60.0 million in securities for a gain of $1.6 million and paying off $62.0 million in FHLB advances with a prepayment penalty of $2.0 million. The anticipated ongoing positive effects of this strategy include: 1) increases the net interest margin and net interest income, 2) improves all capital ratios and 3) increases return on average assets and return on average equity.
loan requests.
- 45 - | ||
Capital Resources
Total shareholders’ equity decreased $20.0 million to $258.1$51.7 million at December 31, 2012.
2011.
demand and deposit growth.
- 46 - | ||
average balance and interest income was a result of a balance sheet restructure that took place late in 2012. The tax-equivalent yield on the investment portfolio was 3.78% in 2013 compared to 3.63% in 2012. The overall duration of investments increased to 4.5 years at December 31, 2013 from 3.5 years at December 31, 2012.
Total interest income decreased by $8.8 million or 9.2% to $87.1 million for the year ended December 31, 2011 from $95.9 million for the year ended December 31, 2010. The decrease in interest income was due to a decline in asset yields, mainly as a result of a drop in yields on loans receivable which declined 28 basis points to 5.49% at December 31, 2011. Interest income from loans decreased to $78.6 million for 2011 compared to $88.6 million in 2010 which represents a decline of 11.3%.
During the same period the average balance of investment securities increased to $205.6 million for 2011 from $154.6 million for the year ended December 31, 2010. Interest income from the investment portfolio increased $1.0 million from 2010 to 2011. The tax-equivalent yield on the investment portfolio was 4.19% in 2011 compared to 4.71% in 2010. The investment portfolio yield decreased coupled by a narrowing of the overall duration of investments to 3.7 years at December 31, 2011 from 3.9 years at December 31, 2010.
Interest expense decreased by $8.5 million in 2011 compared to 2010, to $17.2 million from $25.7 million. This decrease was due to a 49 basis point decline in the average cost of interest-bearing liabilities in 2011. The average balance of interest-bearing deposits increased by $30.5 million at December 31, 2011 compared to December 31, 2010. Interest expense related to interest-bearing deposits was $12.2 million in 2011 and $19.2 million in 2010. Expenses on FHLB advances and other interest bearing funding sources were $3.2 million and $530,000 respectively in 2011 and $4.7 million and $455,000 respectively in 2010. Interest expense recognized by the Company related to subordinated debentures was $1.3 million in 2011 and in 2010.
- | ||
Year Ended December 31 | ||||||||||||||||||||||||||||||||||||
(In Thousands) | ||||||||||||||||||||||||||||||||||||
2012 | 2011 | 2010 | ||||||||||||||||||||||||||||||||||
Average Balance | Interest (1) | Yield/ Rate (2) | Average Balance | Interest (1) | Yield/ Rate | Average Balance | Interest (1) | Yield/ Rate | ||||||||||||||||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||||||||||||||||||||
Interest-Earning Assets: | ||||||||||||||||||||||||||||||||||||
Loans receivable | $ | 1,477,681 | $ | 72,724 | 4.92 | % | $ | 1,437,588 | $ | 78,773 | 5.49 | % | $ | 1,538,388 | $ | 88,775 | 5.77 | % | ||||||||||||||||||
Securities | 247,442 | 8,675 | 3.63 | % | 205,609 | 8,440 | 4.19 | % | 154,648 | 7,151 | 4.71 | % | ||||||||||||||||||||||||
Interest-earning deposits | 116,562 | 300 | 0.26 | % | 184,126 | 466 | 0.25 | % | 121,911 | 303 | 0.25 | % | ||||||||||||||||||||||||
FHLB stock | 20,655 | 899 | 4.35 | % | 20,831 | 867 | 4.17 | % | 21,375 | 879 | 4.11 | % | ||||||||||||||||||||||||
Total interest-earning assets | 1,862,340 | 82,598 | 4.44 | % | 1,848,154 | 88,546 | 4.80 | % | 1,836,322 | 97,108 | 5.29 | % | ||||||||||||||||||||||||
Non-interest-earning assets | 201,212 | 210,216 | 218,486 | |||||||||||||||||||||||||||||||||
Total Assets | $ | 2,063,552 | $ | 2,058,370 | $ | 2,054,808 | ||||||||||||||||||||||||||||||
Interest-Bearing Liabilities: | ||||||||||||||||||||||||||||||||||||
Interest-bearing deposits | $ | 1,352,724 | $ | 8,169 | 0.60 | % | $ | 1,358,785 | $ | 12,175 | 0.90 | % | $ | 1,389,330 | $ | 19,222 | 1.38 | % | ||||||||||||||||||
FHLB advances | 66,121 | 2,424 | 3.67 | % | 93,669 | 3,203 | 3.43 | % | 127,281 | 4,711 | 3.70 | % | ||||||||||||||||||||||||
Other borrowings | 53,155 | 373 | 0.70 | % | 56,464 | 530 | 0.94 | % | 47,046 | 455 | 0.97 | % | ||||||||||||||||||||||||
Subordinated debentures | 36,169 | 971 | 2.68 | % | 36,213 | 1,278 | 3.54 | % | 36,228 | 1,314 | 3.63 | % | ||||||||||||||||||||||||
Total interest-bearing liabilities | 1,508,169 | 11,937 | 0.79 | % | 1,545,131 | 17,186 | 1.12 | % | 1,599,885 | 25,702 | 1.61 | % | ||||||||||||||||||||||||
Non-interest bearing demand deposits | 266,913 | - | 231,343 | - | 200,864 | - | ||||||||||||||||||||||||||||||
Total including non-interest- bearing demand deposits | 1,775,082 | 11,937 | 0.67 | % | 1,776,474 | 17,186 | 0.97 | % | 1,800,749 | 25,702 | 1.43 | % | ||||||||||||||||||||||||
Other non-interest liabilities | 21,276 | 17,983 | 15,264 | |||||||||||||||||||||||||||||||||
Total Liabilities | 1,796,358 | 1,794,457 | 1,816,013 | |||||||||||||||||||||||||||||||||
Stockholders’ equity | 267,194 | 263,913 | 238,795 | |||||||||||||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 2,063,552 | $ | 2,058,370 | $ | 2,054,808 | ||||||||||||||||||||||||||||||
Net interest income; interest rate spread (3) | $ | 70,661 | 3.64 | % | $ | 71,360 | 3.69 | % | $ | 71,406 | 3.68 | % | ||||||||||||||||||||||||
Net interest margin (4) | 3.81 | % | 3.88 | % | 3.89 | % | ||||||||||||||||||||||||||||||
Average interest-earning assets to average interest- bearing liabilities | 123.5 | % | 119.6 | % | 114.8 | % |
Year Ended December 31 | |||||||||||||||||||||||||
(In Thousands) | |||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||
Average | Interest | Yield/ | Average | Interest | Yield/ | Average | Interest | Yield/ | |||||||||||||||||
Balance | (1) | Rate (2) | Balance | (1) | Rate | Balance | (1) | Rate | |||||||||||||||||
Interest-Earning Assets: | |||||||||||||||||||||||||
Loans receivable | $ | 1,528,176 | $ | 68,147 | 4.46 | % | $ | 1,477,681 | $ | 72,724 | 4.92 | % | $ | 1,437,588 | $ | 78,773 | 5.49 | % | |||||||
Securities | 191,039 | 7,158 | 3.78 | % | 247,442 | 8,675 | 3.63 | % | 205,609 | 8,440 | 4.19 | % | |||||||||||||
Interest-earning deposits | 106,742 | 282 | 0.26 | % | 116,562 | 300 | 0.26 | % | 184,126 | 466 | 0.25 | % | |||||||||||||
FHLB stock | 19,505 | 826 | 4.23 | % | 20,655 | 899 | 4.35 | % | 20,831 | 867 | 4.17 | % | |||||||||||||
Total interest-earning assets | 1,845,462 | 76,413 | 4.14 | % | 1,862,340 | 82,598 | 4.44 | % | 1,848,154 | 88,546 | 4.80 | % | |||||||||||||
Non-interest-earning assets | 206,788 | 201,212 | 210,216 | ||||||||||||||||||||||
Total Assets | $ | 2,052,250 | $ | 2,063,552 | $ | 2,058,370 | |||||||||||||||||||
Interest-Bearing Liabilities: | |||||||||||||||||||||||||
Interest-bearing deposits | $ | 1,353,304 | $ | 5,913 | 0.44 | % | $ | 1,352,724 | $ | 8,169 | 0.60 | % | $ | 1,358,785 | $ | 12,175 | 0.90 | % | |||||||
FHLB advances | 17,733 | 434 | 2.45 | % | 66,121 | 2,424 | 3.67 | % | 93,669 | 3,203 | 3.43 | % | |||||||||||||
Subordinated debentures | 36,133 | 601 | 1.66 | % | 36,169 | 971 | 2.68 | % | 36,213 | 1,278 | 3.54 | % | |||||||||||||
Other borrowings | 50,877 | 222 | 0.44 | % | 53,155 | 373 | 0.70 | % | 56,464 | 530 | 0.94 | % | |||||||||||||
Total interest-bearing liabilities | 1,458,047 | 7,170 | 0.49 | % | 1,508,169 | 11,937 | 0.79 | % | 1,545,131 | 17,186 | 1.12 | % | |||||||||||||
Non-interest bearing demand deposits | 308,591 | - | 266,913 | - | 231,343 | - | |||||||||||||||||||
Total including non- interest- bearing demand deposits | 1,766,638 | 7,170 | 0.41 | % | 1,775,082 | 11,937 | 0.67 | % | 1,776,474 | 17,186 | 0.97 | % | |||||||||||||
Other non-interest liabilities | 20,547 | 21,276 | 17,983 | ||||||||||||||||||||||
Total Liabilities | 1,787,185 | 1,796,358 | 1,794,457 | ||||||||||||||||||||||
Stockholders’ equity | 265,065 | 267,194 | 263,913 | ||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 2,052,250 | $ | 2,063,552 | $ | 2,058,370 | |||||||||||||||||||
Net interest income; interest rate spread (3) | $ | 69,243 | 3.65 | % | $ | 70,661 | 3.64 | % | $ | 71,360 | 3.69 | % | |||||||||||||
Net interest margin (4) | 3.76 | % | 3.81 | % | 3.88 | % | |||||||||||||||||||
Average interest-earning assets to average interest- bearing liabilities | 126.6 | % | 123.5 | % | 119.6 | % |
Interest rate spread is the difference in the yield on interest-earning assets and the cost of interest-bearing liabilities. |
(4) | Net interest margin is net interest income divided by average interest-earning assets. |
- | ||
Year Ended December 31 | ||||||||||||||||||||||||
2012 vs. 2011 | 2011 vs. 2010 | |||||||||||||||||||||||
Increase (decrease) due to rate | Increase (decrease) due to volume | Total increase (decrease) | Increase (decrease) due to rate | Increase (decrease) due to volume | Total increase (decrease) | |||||||||||||||||||
Interest-Earning Assets | ||||||||||||||||||||||||
Loans | $ | (8,198 | ) | $ | 2,149 | $ | (6,049 | ) | $ | (4,352 | ) | $ | (5,650 | ) | $ | (10,002 | ) | |||||||
Securities | (1,336 | ) | 1,571 | 235 | (869 | ) | 2,158 | 1,289 | ||||||||||||||||
Interest-earning deposits | 8 | (174 | ) | (166 | ) | 6 | 157 | 163 | ||||||||||||||||
FHLB stock | 39 | (7 | ) | 32 | 11 | (23 | ) | (12 | ) | |||||||||||||||
Total interest-earning assets | $ | (9,487 | ) | $ | 3,539 | $ | (5,948 | ) | $ | (5,204 | ) | $ | (3,358 | ) | $ | (8,562 | ) | |||||||
Interest-Bearing Liabilities | ||||||||||||||||||||||||
Deposits | $ | (3,952 | ) | $ | (54 | ) | $ | (4,006 | ) | $ | (6,634 | ) | $ | (413 | ) | $ | (7,047 | ) | ||||||
FHLB advances | 218 | (997 | ) | (779 | ) | (338 | ) | (1,170 | ) | (1,508 | ) | |||||||||||||
Term notes | (127 | ) | (30 | ) | (157 | ) | (14 | ) | 89 | 75 | ||||||||||||||
Subordinated Debentures | (305 | ) | (2 | ) | (307 | ) | (35 | ) | (1 | ) | (36 | ) | ||||||||||||
Total interest- bearing liabilities | $ | (4,166 | ) | $ | (1,083 | ) | $ | (5,249 | ) | $ | (7,021 | ) | $ | (1,495 | ) | $ | (8,516 | ) | ||||||
Increase (decrease) in net interest income | $ | (699 | ) | $ | (46 | ) |
Year Ended December 31 | |||||||||||||||||||
2013 vs. 2012 | 2012 vs. 2011 | ||||||||||||||||||
Increase | Increase | Increase | Increase | ||||||||||||||||
(decrease) | (decrease) | Total | (decrease) | (decrease) | Total | ||||||||||||||
due to | due to | increase | due to | due to | increase | ||||||||||||||
rate | volume | (decrease) | rate | volume | (decrease) | ||||||||||||||
Interest-Earning Assets | |||||||||||||||||||
Loans | $ | (7,000) | $ | 2,423 | $ | (4,577) | $ | (8,198) | $ | 2,149 | $ | (6,049) | |||||||
Securities | 565 | (2,082) | (1,517) | (1,336) | 1,571 | 235 | |||||||||||||
Interest-earning deposits | 8 | (26) | (18) | 8 | (174) | (166) | |||||||||||||
FHLB stock | (24) | (49) | (73) | 39 | (7) | 32 | |||||||||||||
Total interest-earning assets | $ | (6,451) | $ | 266 | $ | (6,185) | $ | (9,487) | $ | 3,539 | $ | (5,948) | |||||||
Interest-Bearing Liabilities | |||||||||||||||||||
Deposits | $ | (2,260) | $ | 4 | $ | (2,256) | $ | (3,952) | $ | (54) | $ | (4,006) | |||||||
FHLB advances | (620) | (1,370) | (1,990) | 218 | (997) | (779) | |||||||||||||
Subordinated Debentures | (369) | (1) | (370) | (305) | (2) | (307) | |||||||||||||
Notes Payable | (135) | (16) | (151) | (127) | (30) | (157) | |||||||||||||
Total interest- bearing liabilities | $ | (3,384) | $ | (1,383) | $ | (4,767) | $ | (4,166) | $ | (1,083) | $ | (5,249) | |||||||
Increase (decrease) in net interest income | $ | (1,418) | $ | (699) |
- | ||
2012.
- 50 - | ||
- | ||
Compensation and benefits increased $4.2 million or 15.2% in 2011
Income Taxes – Income taxes amounted2013 compared to $8.0 million in 2012 compared toand $6.7 million in 2011 and $3.0 million in 2010.2011. The effective tax rates for those years were 30.0%29.4%, 30.0%, and 27.0%30.0%, respectively. The tax rate is lower than the statutory 35% tax rate for the Company mainly because of investments in tax-exempt securities. The earnings on tax-exempt securities are not subject to federal income tax. See Note 18 – Income Taxes in the Notes to the financial statements for further details.
- 52 - | ||
Maturity Dates by Period at December 31, 2012 | ||||||||||||||||||||
Contractual Obligations | Total | Less than 1 year | 1-3 years | 4-5 years | After 5 years | |||||||||||||||
(In Thousands) | ||||||||||||||||||||
Certificates of deposit | $ | 520,538 | $ | 307,445 | $ | 205,889 | $ | 6,536 | $ | 668 | ||||||||||
FHLB fixed advances including interest (1) | 13,933 | 410 | 8,262 | 238 | 5,023 | |||||||||||||||
Subordinated debentures | 36,083 | - | - | - | 36,083 | |||||||||||||||
Securities sold under repurchase agreements | 51,702 | 51,702 | - | - | - | |||||||||||||||
Unrecognized tax benefits | 65 | 65 | - | - | - | |||||||||||||||
Lease obligations | 7,885 | 732 | 1,231 | 1,109 | 4,813 | |||||||||||||||
Post-retirement benefits | 1,606 | 120 | 271 | 310 | 905 | |||||||||||||||
Total contractual obligations | $ | 631,812 | $ | 360,474 | $ | 215,653 | $ | 8,193 | $ | 47,492 |
Maturity Dates by Period at December 31, 2013 | ||||||||||||||||
Less than | After 5 | |||||||||||||||
Contractual Obligations | Total | 1 year | 1-3 years | 4-5 years | years | |||||||||||
(In Thousands) | ||||||||||||||||
Certificates of deposit | $ | 485,789 | $ | 296,186 | $ | 138,843 | $ | 50,611 | $ | 149 | ||||||
FHLB fixed advances including interest (1) | 23,935 | 1,502 | 10,156 | 12,277 | - | |||||||||||
Subordinated debentures | 36,083 | - | - | - | 36,083 | |||||||||||
Securities sold under repurchase agreements | 51,919 | 51,919 | - | - | - | |||||||||||
Lease obligations | 7,648 | 706 | 1,214 | 983 | 4,745 | |||||||||||
Post-retirement benefits | 1,605 | 140 | 260 | 313 | 892 | |||||||||||
Total contractual obligations | $ | 606,979 | $ | 350,453 | $ | 150,473 | $ | 64,184 | $ | 41,869 |
- | ||
Total | Amount of Commitment Expiration by Period | |||||||||||||||||||
Commitments | Amounts Committed | Less than 1 year | 1-3 years | 4-5 years | After 5 years | |||||||||||||||
(In Thousands) | ||||||||||||||||||||
Retail Lines of Credit | $ | 91,731 | $ | 8,538 | $ | 15,914 | $ | 22,265 | $ | 45,014 | ||||||||||
Commercial Lines of Credit | 158,514 | 144,136 | 13,877 | 501 | - | |||||||||||||||
Retail Other Unused Commitments | 3,724 | 3,720 | - | 1 | 3 | |||||||||||||||
Commercial Other Unused Commitments | 30,248 | 3,573 | 2,951 | 4,369 | 19,355 | |||||||||||||||
Residential Real Estate to Originate | 32,509 | 32,509 | - | - | - | |||||||||||||||
Other Real Estate to Originate | 25,267 | 25,267 | - | - | - | |||||||||||||||
Non-Mortgage to Originate | 6,491 | 6,491 | - | - | - | |||||||||||||||
Total loan commitments | 348,484 | 224,234 | 32,742 | 27,136 | 64,372 | |||||||||||||||
Standby letters of credit | 18,166 | 17,697 | 388 | 81 | - | |||||||||||||||
Total Commitments | $ | 366,650 | $ | 241,931 | $ | 33,130 | $ | 27,216 | $ | 64,372 |
Total | Amount of Commitment Expiration by Period | |||||||||||||||
Amounts | Less than | After 5 | ||||||||||||||
Commitments | Committed | 1 year | 1-3 years | 4-5 years | years | |||||||||||
(In Thousands) | ||||||||||||||||
Fixed commitments to make loans | $ | 57,914 | $ | 48,866 | $ | 1,630 | $ | 2,537 | $ | 4,881 | ||||||
Variable commitments to make loans | 59,632 | 39,120 | 3,095 | 438 | 16,979 | |||||||||||
Fixed unused lines of credit | 18,047 | 6,746 | 5,648 | 5,651 | 2 | |||||||||||
Variable unused lines of credit | 257,939 | 161,093 | 33,357 | 13,362 | 50,127 | |||||||||||
Total loan commitments | 393,532 | 255,825 | 43,730 | 21,988 | 71,989 | |||||||||||
Standby letters of credit | 17,680 | 3,490 | 13,750 | 440 | - | |||||||||||
Total Commitments | $ | 411,212 | $ | 259,315 | $ | 57,480 | $ | 22,428 | $ | 71,989 |
- 54 - | ||
- 55 - | ||
We have
- | ||
- | ||
December 31, 2012 | ||||||||||||||||||||
Economic Value of Equity as % of | ||||||||||||||||||||
Economic Value of Equity | Present Value of Assets | |||||||||||||||||||
Change in Rates | $ Amount | $ Change | % Change | Ratio | Change | |||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||||
+ 400 bp | 415,094 | 46,835 | 12.72 | % | 21.49 | % | 356 | bp | ||||||||||||
+ 300 bp | 407,337 | 39,078 | 10.61 | % | 20.76 | % | 283 | bp | ||||||||||||
+ 200 bp | 398,150 | 29,891 | 8.12 | % | 19.97 | % | 204 | bp | ||||||||||||
+ 100 bp | 387,482 | 19,223 | 5.22 | % | 19.12 | % | 119 | bp | ||||||||||||
0 bp | 368,259 | - | - | 17.93 | % | – | ||||||||||||||
- 100 bp | 343,745 | (24,514 | ) | (6.66 | )% | 16.57 | % | (136 | )bp |
December 31, 2011 | ||||||||||||||||||||
Economic Value of Equity as % of | ||||||||||||||||||||
Economic Value of Equity | Present Value of Assets | |||||||||||||||||||
Change in Rates | $ Amount | $ Change | % Change | Ratio | Change | |||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||||
+ 400 bp | 471,564 | 64,772 | 15.92 | % | 24.08 | % | 450 | bp | ||||||||||||
+ 300 bp | 460,756 | 53,964 | 13.27 | % | 23.17 | % | 359 | bp | ||||||||||||
+ 200 bp | 447,035 | 40,243 | 9.89 | % | 22.15 | % | 257 | bp | ||||||||||||
+ 100 bp | 430,361 | 23,570 | 5.79 | % | 21.00 | % | 142 | bp | ||||||||||||
0 bp | 406,792 | - | - | 19.58 | % | – |
December 31, 2013 | ||||||||||||
Economic Value of Equity as % of | ||||||||||||
Economic Value of Equity | Present Value of Assets | |||||||||||
Change in Rates | $ Amount | $ Change | % Change | Ratio | Change | |||||||
(Dollars in Thousands) | ||||||||||||
+ 400 bp | 474,469 | 41,679 | 9.63 | % | 23.83 | % | 350 bp | |||||
+ 300 bp | 467,691 | 34,901 | 8.06 | % | 23.10 | % | 277 bp | |||||
+ 200 bp | 458,844 | 26,054 | 6.02 | % | 22.28 | % | 195 bp | |||||
+ 100 bp | 447,701 | 14,911 | 3.45 | % | 21.38 | % | 105 bp | |||||
0 bp | 432,790 | - | - | 20.33 | % | – | ||||||
- 100 bp | 413,917 | (18,873) | (4.36) | % | 19.19 | % | (114) bp |
December 31, 2012 | |||||||||||||
Economic Value of Equity as % of | |||||||||||||
Economic Value of Equity | Present Value of Assets | ||||||||||||
Change in Rates | $ Amount | $ Change | % Change | Ratio | Change | ||||||||
(Dollars in Thousands) | |||||||||||||
+ 400 bp | 415,094 | 46,835 | 12.72 | % | 21.49 | % | 356 bp | ||||||
+ 300 bp | 407,337 | 39,078 | 10.61 | % | 20.76 | % | 283 bp | ||||||
+ 200 bp | 398,150 | 29,891 | 8.12 | % | 19.97 | % | 204 bp | ||||||
+ 100 bp | 387,482 | 19,223 | 5.22 | % | 19.12 | % | 119 bp | ||||||
0 bp | 368,259 | - | - | 17.93 | % | – | |||||||
- 100 bp | 343,745 | (24,514) | (6.66) | % | 16.57 | % | (136) bp |
- | ||
2013.
Donald P. Hileman | Kevin T. Thompson | |
Executive Vice President and | ||
Chief Executive Officer | Chief Financial Officer |
- | ||
- | ||
December 31 | ||||||||
2012 | 2011 | |||||||
(Dollars In Thousands, except share and per share data) | ||||||||
Assets | ||||||||
Cash and cash equivalents: | ||||||||
Cash and amounts due from depository institutions | $ | 45,832 | $ | 31,931 | ||||
Federal funds sold | 91,000 | 143,000 | ||||||
136,832 | 174,931 | |||||||
Securities available-for-sale, carried at fair value | 194,101 | 232,919 | ||||||
Securities held-to-maturity, carried at amortized cost (fair value $516 and $672 at December 31, 2012 and 2011 respectively) | 508 | 661 | ||||||
194,609 | 233,580 | |||||||
Loans held for sale | 22,064 | 13,841 | ||||||
Loans receivable, net of allowance of $26,711 and $33,254 at December 31, 2012 and 2011, respectively | 1,498,546 | 1,453,822 | ||||||
Mortgage servicing rights | 7,833 | 8,690 | ||||||
Accrued interest receivable | 5,594 | 6,142 | ||||||
Federal Home Loan Bank (FHLB) stock | 20,655 | 20,655 | ||||||
Bank owned life insurance | 41,832 | 35,908 | ||||||
Premises and equipment | 39,663 | 40,045 | ||||||
Real estate and other assets held for sale (REO) | 3,805 | 3,628 | ||||||
Goodwill | 61,525 | 61,525 | ||||||
Core deposit and other intangibles | 4,738 | 6,151 | ||||||
Deferred taxes | 78 | 629 | ||||||
Other assets | 9,174 | 8,643 | ||||||
Total assets | $ | 2,046,948 | $ | 2,068,190 |
December 31 | |||||||
2013 | 2012 | ||||||
(Dollars In Thousands, except share and per share data) | |||||||
Assets | |||||||
Cash and cash equivalents: | |||||||
Cash and amounts due from depository institutions | $ | 36,318 | $ | 45,832 | |||
Federal funds sold | 143,000 | 91,000 | |||||
179,318 | 136,832 | ||||||
Securities available-for-sale, carried at fair value | 198,170 | 194,101 | |||||
Securities held-to-maturity, carried at amortized cost (fair value $393 and $516 at December 31, 2013 and 2012 respectively) | 387 | 508 | |||||
198,557 | 194,609 | ||||||
Loans held for sale | 9,120 | 22,064 | |||||
Loans receivable, net of allowance of $24,950 and $26,711 at December 31, 2013 and 2012, respectively | 1,555,498 | 1,498,546 | |||||
Mortgage servicing rights | 9,106 | 7,833 | |||||
Accrued interest receivable | 5,778 | 5,594 | |||||
Federal Home Loan Bank (FHLB) stock | 19,350 | 20,655 | |||||
Bank owned life insurance | 42,715 | 41,832 | |||||
Premises and equipment | 38,597 | 39,663 | |||||
Real estate and other assets held for sale (REO) | 5,859 | 3,805 | |||||
Goodwill | 61,525 | 61,525 | |||||
Core deposit and other intangibles | 3,497 | 4,738 | |||||
Deferred taxes | 565 | 78 | |||||
Other assets | 7,663 | 9,174 | |||||
Total assets | $ | 2,137,148 | $ | 2,046,948 |
- | ||
December 31 | ||||||||
2012 | 2011 | |||||||
(Dollars In Thousands, except share and per share data) | ||||||||
Liabilities and stockholders’ equity | ||||||||
Liabilities: | ||||||||
Deposits: | ||||||||
Noninterest-bearing | $ | 315,132 | $ | 245,927 | ||||
Interest-bearing | 1,352,340 | 1,350,314 | ||||||
Total | 1,667,472 | 1,596,241 | ||||||
Advances from the Federal Home Loan Bank | 12,796 | 81,841 | ||||||
Securities sold under agreements to repurchase and other | 51,702 | 60,386 | ||||||
Subordinated debentures | 36,083 | 36,083 | ||||||
Advance payments by borrowers | 1,473 | 1,402 | ||||||
Other liabilities | 19,294 | 14,110 | ||||||
Total liabilities | 1,788,820 | 1,790,063 | ||||||
Commitments and Contingent (Note 6) | ||||||||
Stockholders’ equity: | ||||||||
Preferred stock, $.01 par value per share: 37,000 shares authorized; 0 and 37,000 issued with a liquidation preference of $0 and $37,231, net of discount | – | 36,641 | ||||||
Preferred stock, $.01 par value per share: | ||||||||
4,963,000 shares authorized; no shares issued | – | – | ||||||
Common stock, $.01 par value per share: | ||||||||
25,000,000 shares authorized; 12,739,496 and 12,739,496 shares issued and 9,729,466 and 9,726,243 shares outstanding, respectively | 127 | 127 | ||||||
Common stock warrant | 878 | 878 | ||||||
Additional paid-in capital | 136,046 | 135,825 | ||||||
Accumulated other comprehensive income, net of tax of $2,301 and $2,153, respectively | 4,274 | 3,997 | ||||||
Retained earnings | 164,103 | 148,010 | ||||||
Treasury stock, at cost, 3,010,030 and 3,013,253 shares respectively | (47,300 | ) | (47,351 | ) | ||||
Total stockholders’ equity | 258,128 | 278,127 | ||||||
Total liabilities and stockholders’ equity | $ | 2,046,948 | $ | 2,068,190 |
December 31 | |||||||
2013 | 2012 | ||||||
(Dollars In Thousands, except share and per share data) | |||||||
Liabilities and stockholders’ equity | |||||||
Liabilities: | |||||||
Deposits: | |||||||
Noninterest-bearing | $ | 348,943 | $ | 315,132 | |||
Interest-bearing | 1,386,849 | 1,352,340 | |||||
Total | 1,735,792 | 1,667,472 | |||||
Advances from the Federal Home Loan Bank | 22,520 | 12,796 | |||||
Securities sold under agreements to repurchase and other | 51,919 | 51,702 | |||||
Subordinated debentures | 36,083 | 36,083 | |||||
Advance payments by borrowers | 1,519 | 1,473 | |||||
Other liabilities | 17,168 | 19,294 | |||||
Total liabilities | 1,865,001 | 1,788,820 | |||||
Commitments and Contingent (Note 6) | |||||||
Stockholders’ equity: | |||||||
Preferred stock, $.01 par value per share: 37,000 shares authorized; no shares issued | – | – | |||||
Preferred stock, $.01 par value per share: 4,963,000 shares authorized; no shares issued | – | – | |||||
Common stock, $.01 par value per share: 25,000,000 shares authorized; 12,735,313 and 12,739,496 shares issued and 9,719,521 and 9,729,466 shares outstanding, respectively | 127 | 127 | |||||
Common stock warrant | 878 | 878 | |||||
Additional paid-in capital | 136,403 | 136,046 | |||||
Accumulated other comprehensive income, net of tax of $294 and $2,301, respectively | 545 | 4,274 | |||||
Retained earnings | 182,290 | 164,103 | |||||
Treasury stock, at cost, 3,015,792 and 3,010,030 shares respectively | (48,096) | (47,300) | |||||
Total stockholders’ equity | 272,147 | 258,128 | |||||
Total liabilities and stockholders’ equity | $ | 2,137,148 | $ | 2,046,948 |
- 62 - | ||
Years Ended December 31 | ||||||||||
2013 | 2012 | 2011 | ||||||||
Interest Income | ||||||||||
Loans | $ | 68,077 | $ | 72,621 | $ | 78,648 | ||||
Investment securities: | ||||||||||
Taxable | 2,695 | 4,241 | 4,571 | |||||||
Tax-exempt | 2,901 | 2,882 | 2,515 | |||||||
Interest-bearing deposits | 282 | 300 | 466 | |||||||
FHLB stock dividends | 826 | 899 | 867 | |||||||
Total interest income | 74,781 | 80,943 | 87,067 | |||||||
Interest Expense | ||||||||||
Deposits | 5,913 | 8,169 | 12,175 | |||||||
Federal Home Loan Bank advances and other | 434 | 2,424 | 3,203 | |||||||
Subordinated debentures | 601 | 971 | 1,278 | |||||||
Securities sold under agreement to repurchase | 222 | 373 | 530 | |||||||
Total interest expense | 7,170 | 11,937 | 17,186 | |||||||
Net interest income | 67,611 | 69,006 | 69,881 | |||||||
Provision for loan losses | 1,824 | 10,924 | 12,434 | |||||||
Net interest income after provision for loan losses | 65,787 | 58,082 | 57,447 | |||||||
Noninterest Income | ||||||||||
Service fees and other charges | 10,045 | 10,779 | 11,387 | |||||||
Mortgage banking income | 8,443 | 9,665 | 6,437 | |||||||
Insurance commissions | 9,627 | 8,676 | 7,109 | |||||||
Gain on sale of non-mortgage loans | 101 | 70 | 361 | |||||||
Gain (loss) on sale or call of securities | 97 | 2,139 | 218 | |||||||
Other-than-temporary impairment (OTTI) losses on investment securities | ||||||||||
Total gains (impairment losses) on investment securities | (337) | (31) | (44) | |||||||
Losses recognized in other comprehensive income | - | 26 | 42 | |||||||
Net impairment loss recognized in earnings | (337) | (5) | (2) | |||||||
Trust income | 761 | 616 | 599 | |||||||
Income from bank owned life insurance | 883 | 924 | 929 | |||||||
Other noninterest income | 950 | 1,510 | 478 | |||||||
Total noninterest income | 30,570 | 34,374 | 27,516 | |||||||
Noninterest Expense | ||||||||||
Compensation and benefits | 34,301 | 32,566 | 31,554 | |||||||
Occupancy | 6,762 | 7,578 | 7,166 | |||||||
FDIC insurance | 1,616 | 2,691 | 2,922 | |||||||
Data processing | 5,125 | 4,660 | 4,257 | |||||||
Acquisition related charges | - | - | 234 | |||||||
Other noninterest expense | 17,040 | 18,285 | 16,631 | |||||||
Total noninterest expense | 64,844 | 65,780 | 62,764 | |||||||
Income before income taxes | 31,513 | 26,676 | 22,199 | |||||||
Federal income taxes | 9,278 | 8,012 | 6,665 | |||||||
Net Income | $ | 22,235 | $ | 18,664 | $ | 15,534 | ||||
Dividends Accrued on Preferred Shares | $ | - | $ | (900) | $ | (1,850) | ||||
Accretion on Preferred Shares | $ | - | $ | (359) | $ | (178) | ||||
Redemption of Preferred Shares | $ | - | $ | 642 | $ | - | ||||
Net Income Applicable to Common Shares | $ | 22,235 | $ | 18,047 | $ | 13,506 | ||||
Earnings per common share: | ||||||||||
Basic | $ | 2.28 | $ | 1.86 | $ | 1.44 | ||||
Diluted | $ | 2.19 | $ | 1.81 | $ | 1.42 | ||||
Dividends declared per common share | $ | 0.40 | $ | 0.20 | $ | 0.05 |
- 63 - |
Years Ended December 31 | ||||||||||||
2012 | 2011 | 2010 | ||||||||||
Interest Income | ||||||||||||
Loans | $ | 72,621 | $ | 78,648 | $ | 88,628 | ||||||
Investment securities: | ||||||||||||
Taxable | 4,241 | 4,571 | 4,070 | |||||||||
Tax-exempt | 2,882 | 2,515 | 1,985 | |||||||||
Interest-bearing deposits | 300 | 466 | 303 | |||||||||
FHLB stock dividends | 899 | 867 | 879 | |||||||||
Total interest income | 80,943 | 87,067 | 95,865 | |||||||||
Interest Expense | ||||||||||||
Deposits | 8,169 | 12,175 | 19,222 | |||||||||
Federal Home Loan Bank advances and other | 2,424 | 3,203 | 4,711 | |||||||||
Subordinated debentures | 971 | 1,278 | 1,314 | |||||||||
Securities sold under agreement to repurchase | 373 | 530 | 455 | |||||||||
Total interest expense | 11,937 | 17,186 | 25,702 | |||||||||
Net interest income | 69,006 | 69,881 | 70,163 | |||||||||
Provision for loan losses | 10,924 | 12,434 | 23,177 | |||||||||
Net interest income after provision for loan losses | 58,082 | 57,447 | 46,986 | |||||||||
Noninterest Income | ||||||||||||
Service fees and other charges | 10,779 | 11,387 | 12,740 | |||||||||
Mortgage banking income | 9,665 | 6,437 | 7,847 | |||||||||
Insurance commissions | 8,676 | 7,109 | 5,140 | |||||||||
Gain on sale of non-mortgage loans | 70 | 361 | 516 | |||||||||
Gain (loss) on sale or call of securities | 2,139 | 218 | (8 | ) | ||||||||
Other-than-temporary impairment (OTTI) losses on investment securities | ||||||||||||
Total impairment losses on investment securities | (31 | ) | (44 | ) | (367 | ) | ||||||
Losses recognized in other comprehensive income | 26 | 42 | 36 | |||||||||
Net impairment loss recognized in earnings | (5 | ) | (2 | ) | (331 | ) | ||||||
Trust income | 616 | 599 | 507 | |||||||||
Income from bank owned life insurance | 924 | 929 | 1,146 | |||||||||
Other noninterest income | 1,510 | 478 | 33 | |||||||||
Total noninterest income | 34,374 | 27,516 | 27,590 | |||||||||
Noninterest Expense | ||||||||||||
Compensation and benefits | 32,566 | 31,554 | �� | 27,403 | ||||||||
Occupancy | 7,578 | 7,166 | 7,048 | |||||||||
FDIC insurance | 2,691 | 2,922 | 3,766 | |||||||||
Data processing | 4,660 | 4,257 | 4,909 | |||||||||
Acquisition related charges | - | 234 | 63 | |||||||||
Other noninterest expense | 18,285 | 16,631 | 20,274 | |||||||||
Total noninterest expense | 65,780 | 62,764 | 63,463 | |||||||||
Income before income taxes | 26,676 | 22,199 | 11,113 | |||||||||
Federal income taxes | 8,012 | 6,665 | 3,005 | |||||||||
Net Income | $ | 18,664 | $ | 15,534 | $ | 8,108 | ||||||
Dividends Accrued on Preferred Shares | $ | (900 | ) | $ | (1,850 | ) | $ | (1,850 | ) | |||
Accretion on Preferred Shares | $ | (359 | ) | $ | (178 | ) | $ | (170 | ) | |||
Redemption of Preferred Shares | $ | 642 | $ | - | $ | - | ||||||
Net Income Applicable to Common Shares | $ | 18,047 | $ | 13,506 | $ | 6,088 | ||||||
Earnings per common share: | ||||||||||||
Basic | $ | 1.86 | $ | 1.44 | $ | 0.75 | ||||||
Diluted | $ | 1.81 | $ | 1.42 | $ | 0.75 | ||||||
Dividends declared per common share | $ | 0.20 | $ | 0.05 | $ | - |
See accompanying notes
For the Year Ended December 31 | ||||||||||||
2012 | 2011 | 2010 | ||||||||||
(In Thousands) | ||||||||||||
Net income | $ | 18,664 | $ | 15,534 | $ | 8,108 | ||||||
Change in securities available-for-sale (AFS): | ||||||||||||
Unrealized holding gains (losses) on available-for-sale securities arising during the period | 2,360 | 7,404 | (1,010 | ) | ||||||||
Reclassification adjustment for (gains) losses realized in income | (2,139 | ) | (218 | ) | 8 | |||||||
Other-than-temporary impairment losses on AFS securities realized in income | 5 | 2 | 331 | |||||||||
Net unrealized gains (losses) | 226 | 7,188 | (671 | ) | ||||||||
Income tax effect | (79 | ) | (2,516 | ) | 235 | |||||||
Net of tax amount | 147 | 4,672 | (436 | ) | ||||||||
Change in unrealized gain on postretirement benefit: | ||||||||||||
Net gain (loss) on defined benefit postretirement medical plan realized during the period | 148 | (537 | ) | 349 | ||||||||
Net amortization and deferral | 51 | 25 | 39 | |||||||||
Net gain (loss) activity during the period | 199 | (512 | ) | 388 | ||||||||
Income tax effect | (69 | ) | 179 | (136 | ) | |||||||
Net of tax amount | 130 | (333 | ) | 252 | ||||||||
Total other comprehensive income (loss) | 277 | 4,339 | (184 | ) | ||||||||
Comprehensive income | $ | 18,941 | $ | 19,873 | $ | 7,924 |
For the Years Ended December 31 | ||||||||||
2013 | 2012 | 2011 | ||||||||
(In Thousands) | ||||||||||
Net income | $ | 22,235 | $ | 18,664 | $ | 15,534 | ||||
Change in securities available-for-sale (AFS): | ||||||||||
Unrealized holding gains (losses) on available-for-sale securities arising during the period | (6,309) | 2,360 | 7,404 | |||||||
Reclassification adjustment for (gains) losses realized in income | (97) | (2,139) | (218) | |||||||
Other-than-temporary impairment losses on AFS securities realized in income | 337 | 5 | 2 | |||||||
Net unrealized gains (losses) | (6,069) | 226 | 7,188 | |||||||
Income tax effect | 2,124 | (79) | (2,516) | |||||||
Net of tax amount | (3,945) | 147 | 4,672 | |||||||
Change in unrealized gain on postretirement benefit: | ||||||||||
Net gain (loss) on defined benefit postretirement medical plan realized during the period | 287 | 148 | (537) | |||||||
Net amortization and deferral | 46 | 51 | 25 | |||||||
Net gain (loss) activity during the period | 333 | 199 | (512) | |||||||
Income tax effect | (117) | (69) | 179 | |||||||
Net of tax amount | 216 | 130 | (333) | |||||||
Total other comprehensive income (loss) | (3,729) | 277 | 4,339 | |||||||
Comprehensive income | $ | 18,506 | $ | 18,941 | $ | 19,873 |
- | ||
Stock | Accumulated | |||||||||||||||||||||||||||||||||||
Common | Additional | Acquired | Other | Total | ||||||||||||||||||||||||||||||||
Preferred | Common | Stock | Treasury | Paid-In | by | Comprehensive | Retained | Stockholder’s | ||||||||||||||||||||||||||||
Stock | Stock | Warrant | Stock | Capital | ESOP | Income (Loss) | Earnings | Equity | ||||||||||||||||||||||||||||
Balance at January 1, 2010 | $ | 36,293 | $ | 127 | $ | 878 | $ | (72,631 | ) | $ | 140,677 | $ | - | $ | (158 | ) | $ | 128,900 | $ | 234,086 | ||||||||||||||||
Net income | 8,108 | 8,108 | ||||||||||||||||||||||||||||||||||
Other comprehensive income | (184 | ) | (184 | ) | ||||||||||||||||||||||||||||||||
Stock option expense | 168 | 168 | ||||||||||||||||||||||||||||||||||
250 stock options exercised, with no income tax benefit | 3 | 3 | ||||||||||||||||||||||||||||||||||
Preferred stock dividends accrued | (1,850 | ) | (1,850 | ) | ||||||||||||||||||||||||||||||||
Accretion on preferred shares | 170 | (170 | ) | - | ||||||||||||||||||||||||||||||||
Balance at December 31, 2010 | $ | 36,463 | $ | 127 | $ | 878 | $ | (72,628 | ) | $ | 140,845 | $ | - | $ | (342 | ) | $ | 134,988 | $ | 240,331 | ||||||||||||||||
Net income | 15,534 | 15,534 | ||||||||||||||||||||||||||||||||||
Other comprehensive income | 4,339 | 4,339 | ||||||||||||||||||||||||||||||||||
Stock option expense | 144 | 144 | ||||||||||||||||||||||||||||||||||
850 stock options exercised, with no income tax benefit | 14 | (3 | ) | 11 | ||||||||||||||||||||||||||||||||
1,600,800 shares issued capital stock | 25,156 | (5,297 | ) | 19,859 | ||||||||||||||||||||||||||||||||
Restricted share activity under stock incentive plans | 75 | 136 | 211 | |||||||||||||||||||||||||||||||||
2,085 shares issued direct purchases | 32 | (3 | ) | 29 | ||||||||||||||||||||||||||||||||
Preferred stock dividends accrued | (1,850 | ) | (1,850 | ) | ||||||||||||||||||||||||||||||||
Accretion on preferred shares | 178 | (178 | ) | - | ||||||||||||||||||||||||||||||||
Common stock dividends declared | (481 | ) | (481 | ) | ||||||||||||||||||||||||||||||||
Balance at December 31, 2011 | $ | 36,641 | $ | 127 | $ | 878 | $ | (47,351 | ) | $ | 135,825 | $ | - | $ | 3,997 | $ | 148,010 | $ | 278,127 | |||||||||||||||||
Net income | 18,664 | 18,664 | ||||||||||||||||||||||||||||||||||
Other comprehensive income | 277 | 277 | ||||||||||||||||||||||||||||||||||
Stock option expense | 104 | 104 | ||||||||||||||||||||||||||||||||||
500 shares issued under stock option plan, with no income tax benefit | 8 | (4 | ) | 4 | ||||||||||||||||||||||||||||||||
Restricted share activity under stock incentive Plans | 30 | 116 | 146 | |||||||||||||||||||||||||||||||||
836 shares issued direct purchases | 13 | 1 | 14 | |||||||||||||||||||||||||||||||||
Preferred stock dividends accrued | (900 | ) | (900 | ) | ||||||||||||||||||||||||||||||||
Accretion on preferred shares | 359 | (359 | ) | - | ||||||||||||||||||||||||||||||||
16,560 shares purchased in Treasury auction | (16,560 | ) | 618 | (15,942 | ) | |||||||||||||||||||||||||||||||
20,440 shares purchased in open market | (20,440 | ) | 24 | (20,416 | ) | |||||||||||||||||||||||||||||||
Common stock dividends declared | (1,950 | ) | (1,950 | ) | ||||||||||||||||||||||||||||||||
Balance at December 31, 2012 | $ | - | $ | 127 | $ | 878 | $ | (47,300 | ) | $ | 136,046 | $ | - | $ | 4,274 | $ | 164,103 | $ | 258,128 |
Accumulated | |||||||||||||||||||||||||
Common | Additional | Other | Total | ||||||||||||||||||||||
Preferred | Common | Stock | Paid-In | Comprehensive | Retained | Treasury | Stockholder’s | ||||||||||||||||||
Stock | Stock | Warrant | Capital | Income (Loss) | Earnings | Stock | Equity | ||||||||||||||||||
Balance at December 31, 2010 | $ | 36,463 | $ | 127 | $ | 878 | $ | 140,845 | $ | (342) | $ | 134,988 | $ | (72,628) | $ | 240,331 | |||||||||
Net income | 15,534 | 15,534 | |||||||||||||||||||||||
Other comprehensive income | 4,339 | 4,339 | |||||||||||||||||||||||
Stock option expense | 144 | 144 | |||||||||||||||||||||||
850 stock options exercised, with no income tax benefit | (3) | 14 | 11 | ||||||||||||||||||||||
1,600,800 shares issued capital stock | (5,297) | 25,156 | 19,859 | ||||||||||||||||||||||
Restricted share activity under stock incentive plans | 136 | 75 | 211 | ||||||||||||||||||||||
2,085 shares issued direct purchases | (3) | 32 | 29 | ||||||||||||||||||||||
Preferred stock dividends accrued | (1,850) | (1,850) | |||||||||||||||||||||||
Accretion on preferred shares | 178 | (178) | - | ||||||||||||||||||||||
Common stock dividends declared | (481) | (481) | |||||||||||||||||||||||
Balance at December 31, 2011 | $ | 36,641 | $ | 127 | $ | 878 | $ | 135,825 | $ | 3,997 | $ | 148,010 | $ | (47,351) | $ | 278,127 | |||||||||
Net income | 18,664 | 18,664 | |||||||||||||||||||||||
Other comprehensive income | 277 | 277 | |||||||||||||||||||||||
Stock option expense | 104 | 104 | |||||||||||||||||||||||
500 shares issued under stock option plan, with no income tax benefit | (4) | 8 | 4 | ||||||||||||||||||||||
Restricted share activity under stock incentive Plans | 116 | 30 | 146 | ||||||||||||||||||||||
836 shares issued direct purchases | 1 | 13 | 14 | ||||||||||||||||||||||
Preferred stock dividends accrued | (900) | (900) | |||||||||||||||||||||||
Accretion on preferred shares | 359 | (359) | - | ||||||||||||||||||||||
16,560 shares purchased in Treasury auction | (16,560) | 618 | (15,942) | ||||||||||||||||||||||
20,440 shares purchased in open market | (20,440) | 24 | (20,416) | ||||||||||||||||||||||
Common stock dividends declared | (1,950) | (1,950) | |||||||||||||||||||||||
Balance at December 31, 2012 | $ | - | $ | 127 | $ | 878 | $ | 136,046 | $ | 4,274 | $ | 164,103 | $ | (47,300) | $ | 258,128 | |||||||||
Net income | 22,235 | 22,235 | |||||||||||||||||||||||
Other comprehensive loss | (3,729) | (3,729) | |||||||||||||||||||||||
Stock option expense | 44 | 44 | |||||||||||||||||||||||
35,147 shares issued under stock option plan, with $54 in income tax benefit | (34) | (97) | 481 | 350 | |||||||||||||||||||||
Restricted share activity under stock incentive Plans | 327 | (44) | 500 | 783 | |||||||||||||||||||||
2,768 shares issued direct purchases | 20 | 44 | 64 | ||||||||||||||||||||||
70,966 shares repurchased | (1,821) | (1,821) | |||||||||||||||||||||||
Common stock dividends declared | (3,907) | (3,907) | |||||||||||||||||||||||
Balance at December 31, 2013 | $ | - | $ | 127 | $ | 878 | $ | 136,403 | $ | 545 | $ | 182,290 | $ | (48,096) | $ | 272,147 |
- 65 - | ||
Years Ended December 31 | ||||||||||
2013 | 2012 | 2011 | ||||||||
Operating Activities | ||||||||||
Net income | $ | 22,235 | $ | 18,664 | $ | 15,534 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||
Provision for loan losses | 1,824 | 10,924 | 12,434 | |||||||
Provision for depreciation | 3,110 | 3,416 | 3,436 | |||||||
Net amortization of premium and discounts on loans, securities, deposits and debt obligations | 1,235 | 1,497 | 396 | |||||||
Amortization of mortgage servicing rights | 2,098 | 3,562 | 2,169 | |||||||
Net (recovery) impairment of mortgage servicing rights | (1,261) | 759 | 404 | |||||||
Amortization of intangibles | 1,241 | 1,413 | 1,442 | |||||||
Gain on sale of loans | (5,817) | (10,669) | (5,968) | |||||||
Loss on sale or disposals of property, plant and equipment | 1 | 179 | 59 | |||||||
Loss on sale or write-down of REO | 883 | 427 | 947 | |||||||
OTTI losses on investment securities | 337 | 5 | 2 | |||||||
(Gain) loss on sale or call of securities | (97) | (2,139) | (218) | |||||||
Change in deferred taxes | 1,519 | 779 | 2,839 | |||||||
Proceeds from sale of loans held for sale | 308,260 | 520,376 | 263,336 | |||||||
Stock option expense | 44 | 104 | 144 | |||||||
Restricted stock unit expense | 783 | 146 | 211 | |||||||
Origination of loans held for sale | (294,941) | (521,464) | (262,825) | |||||||
Income from bank owned life insurance | (883) | (924) | (929) | |||||||
Change in interest receivable and other assets | 1,327 | 17 | 2,961 | |||||||
Change in accrued interest and other liabilities | (2,535) | 4,838 | 2,365 | |||||||
Net cash provided by operating activities | 39,363 | 31,910 | 38,739 | |||||||
Investing Activities | ||||||||||
Proceeds from maturities, calls and paydowns of held-to-maturity securities | 121 | 152 | 178 | |||||||
Proceeds from maturities, calls and paydowns of available-for-sale securities | 35,072 | 60,057 | 52,097 | |||||||
Proceeds from sale of available-for-sale securities | 4,027 | 72,262 | 8,719 | |||||||
Proceeds from sale of REO | 2,899 | 3,444 | 9,630 | |||||||
Proceeds from sale of office properties and equipment | - | 10 | 17 | |||||||
Purchases of available-for-sale securities | (49,230) | (91,513) | (120,499) | |||||||
Purchases of office properties and equipment | (2,045) | (3,223) | (2,041) | |||||||
Investment in bank owned life insurance | - | (5,000) | - | |||||||
Proceeds from FHLB stock redemption | 1,305 | - | 357 | |||||||
Net cash paid in Payak-Dubbs acquisition | - | - | (3,914) | |||||||
Purchase of portfolio mortgage loans | (4,545) | - | (25,842) | |||||||
Proceeds from sale of non-mortgage loans | 13,369 | 4,644 | 9,212 | |||||||
Net decrease (increase) in loans receivable | (70,845) | (65,005) | 31,137 | |||||||
Net cash provided by (used) in investing activities | (69,872) | (24,172) | (40,949) |
- 66 - |
Years Ended December 31 | ||||||||||||
2012 | 2011 | 2010 | ||||||||||
Operating Activities | ||||||||||||
Net income | $ | 18,664 | $ | 15,534 | $ | 8,108 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Provision for loan losses | 10,924 | 12,434 | 23,177 | |||||||||
Provision for depreciation | 3,416 | 3,436 | 3,403 | |||||||||
Net amortization of premium and discounts on loans, securities, deposits and debt obligations | 1,497 | 396 | 1,503 | |||||||||
Amortization of mortgage servicing rights | 3,562 | 2,169 | 2,642 | |||||||||
Net impairment (recovery) of mortgage servicing rights | 759 | 404 | (353 | ) | ||||||||
Amortization of intangibles | 1,413 | 1,442 | 1,495 | |||||||||
Gain on sale of loans | (10,669 | ) | (5,968 | ) | (7,533 | ) | ||||||
Loss on sale or disposals of property, plant and equipment | 179 | 59 | 12 | |||||||||
Loss on sale or write-down of REO | 427 | 947 | 4,050 | |||||||||
OTTI losses on investment securities | 5 | 2 | 331 | |||||||||
(Gain) loss on sale or call of securities | (2,139 | ) | (218 | ) | 8 | |||||||
Change in deferred taxes | 779 | 2,839 | (2,417 | ) | ||||||||
Proceeds from sale of loans held for sale | 520,376 | 263,336 | 384,492 | |||||||||
Stock option expense | 104 | 144 | 168 | |||||||||
Restricted stock unit expense | 146 | 211 | - | |||||||||
Origination of loans held for sale | (521,464 | ) | (262,825 | ) | (388,064 | ) | ||||||
Income from bank owned life insurance | (924 | ) | (929 | ) | (1,146 | ) | ||||||
Change in interest receivable and other assets | 17 | 2,961 | 3,664 | |||||||||
Change in accrued interest and other liabilities | 4,838 | 2,365 | (1,340 | ) | ||||||||
Net cash provided by operating activities | 31,910 | 38,739 | 32,200 | |||||||||
Investing Activities | ||||||||||||
Proceeds from maturities, calls and paydowns of held-to-maturity securities | 152 | 178 | 1,081 | |||||||||
Proceeds from maturities, calls and paydowns of available-for-sale securities | 60,057 | 52,097 | 46,765 | |||||||||
Proceeds from sale of available-for-sale securities | 72,262 | 8,719 | 448 | |||||||||
Proceeds from sale of REO | 3,444 | 9,630 | 10,511 | |||||||||
Proceeds from sale of office properties and equipment | 10 | 17 | 1 | |||||||||
Purchases of available-for-sale securities | (91,513 | ) | (120,499 | ) | (76,439 | ) | ||||||
Purchases of office properties and equipment | (3,223 | ) | (2,041 | ) | (1,562 | ) | ||||||
Investment in bank owned life insurance | (5,000 | ) | - | (3,757 | ) | |||||||
Proceed from insurance death benefit | - | - | 728 | |||||||||
Net cash paid in Andres O’Neil & Lowe acquisition | - | - | (1,500 | ) | ||||||||
Proceeds from FHLB stock redemption | - | 357 | 364 | |||||||||
Net cash paid in Payak-Dubbs acquisition | - | (3,914 | ) | - | ||||||||
Purchase of portfolio mortgage loans | - | (25,842 | ) | - | ||||||||
Proceeds from sale of non-mortgage loans | 4,644 | 9,212 | 13,949 | |||||||||
Net decrease (increase) in loans receivable | (65,005 | ) | 31,137 | 53,767 | ||||||||
Net cash provided by (used) in investing activities | (24,172 | ) | (40,949 | ) | 44,356 |
Years Ended December 31 | ||||||||||
2013 | 2012 | 2011 | ||||||||
Financing Activities | ||||||||||
Net increase (decrease) in deposits | 68,368 | 71,318 | 21,314 | |||||||
Repayment of Federal Home Loan Bank long-term advances | (276) | (69,045) | (35,044) | |||||||
Proceeds from Federal Home Loan Bank long-term advances | 10,000 | - | - | |||||||
Cash paid for redemption of preferred stock | - | (36,358) | - | |||||||
Increase (decrease) in securities sold under repurchase agreements | 217 | (8,684) | 4,139 | |||||||
Cash dividends paid on common stock | (3,907) | (1,950) | (481) | |||||||
Cash dividends paid on preferred stock | - | (1,136) | (1,850) | |||||||
Net cash received from common stock issuance | - | - | 19,859 | |||||||
Net cash paid for repurchase of common stock | (1,821) | - | - | |||||||
Proceeds from exercise of stock options | 350 | 4 | 11 | |||||||
Proceeds from treasury stock sales | 64 | 14 | 29 | |||||||
Net cash (used) provided by financing activities | 72,995 | (45,837) | 7,977 | |||||||
Increase (decrease) in cash and cash equivalents | 42,486 | (38,099) | 5,767 | |||||||
Cash and cash equivalents at beginning of period | 136,832 | 174,931 | 169,164 | |||||||
Cash and cash equivalents at end of period | $ | 179,318 | $ | 136,832 | $ | 174,931 | ||||
Supplemental cash flow information: | ||||||||||
Interest paid | $ | 7,179 | $ | 12,251 | $ | 17,464 | ||||
Income taxes paid | $ | 10,500 | $ | 4,000 | $ | 4,875 | ||||
Transfers from loans to other real estate owned and other assets held for sale | $ | 5,836 | $ | 4,048 | $ | 4,614 | ||||
Transfer from loans held for sale to loans | $ | 3,231 | $ | - | $ | 7,596 | ||||
Securities traded but not yet settled | $ | 742 | $ | 405 | $ | - |
- 67 - |
Years Ended December 31 | ||||||||||||
2012 | 2011 | 2010 | ||||||||||
Financing Activities | ||||||||||||
Net increase (decrease) in deposits | 71,318 | 21,314 | (4,468 | ) | ||||||||
Repayment of Federal Home Loan Bank long-term advances | (69,045 | ) | (35,044 | ) | (30,042 | ) | ||||||
Cash paid for redemption of preferred stock | (36,358 | ) | - | - | ||||||||
Increase (decrease) in securities sold under repurchase agreements | (8,684 | ) | 4,139 | 7,849 | ||||||||
Cash dividends paid on common stock | (1,950 | ) | (481 | ) | - | |||||||
Cash dividends paid on preferred stock | (1,136 | ) | (1,850 | ) | (1,850 | ) | ||||||
Net cash received from common stock issuance | - | 19,859 | - | |||||||||
Proceeds from exercise of stock options | 4 | 11 | 3 | |||||||||
Proceeds from treasury stock purchases | 14 | 29 | - | |||||||||
Net cash (used) provided by financing activities | (45,837 | ) | 7,977 | (28,508 | ) | |||||||
Increase (decrease) in cash and cash equivalents | (38,099 | ) | 5,767 | 48,048 | ||||||||
Cash and cash equivalents at beginning of period | 174,931 | 169,164 | 121,116 | |||||||||
Cash and cash equivalents at end of period | $ | 136,832 | $ | 174,931 | $ | 169,164 | ||||||
Supplemental cash flow information: | ||||||||||||
Interest paid | $ | 12,251 | $ | 17,464 | $ | 26,212 | ||||||
Income taxes paid | $ | 4,000 | $ | 4,875 | $ | 5,800 | ||||||
Transfers from loans to other real estate owned and other assets held for sale | $ | 4,048 | $ | 4,614 | $ | 12,147 | ||||||
Transfer from loans held for sale to loans | $ | - | $ | 7,596 | $ | - | ||||||
Securities traded but not yet settled | $ | 405 | $ | - | $ | - |
See accompanying notes.
.
financial instruments.
4
.- | ||
- | ||
- 70 - | ||
Also during 2012, we applied an equal 12.5% weighting
calculation, which is unchanged from 2012.
- | ||
- | ||
.
.
- 73 - | ||
Buildings and improvements | 20 to 50 years |
Furniture, fixtures and equipment | 3 to 15 years |
9
.10
.20
.- 74 - | ||
- 75 - | ||
18
.In May 2011, the FASB issued ASU No. 2011-04,Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. The amendments in this ASU generally represent clarifications of Topic 820, but also include some instances where a particular principle or requirement for measuring fair value or disclosing information about fair value measurements has changed. This ASU results in common principles and requirements for measuring fair value and for disclosing information about fair value measurements in accordance with U.S. GAAP and IFRSs. The amendments in this ASU are to be applied prospectively. For public entities, the amendments are effective during interim and annual periods beginning after December 15, 2011. Early application by public entities is not permitted. The amendments of this update did not have a material impact on the Company’s financial position, results of operations or cash flows.
In June 2011, the FASB issued ASU No. 2011-05,Amendments to Topic 220, Comprehensive Income. Under the amendments in this ASU, an entity has the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. This ASU eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders’ equity. The amendments in this ASU do not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income. The amendments of this ASU should be applied retrospectively. For public entities, the amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. Early adoption is permitted because compliance with the amendments is already permitted. The amendments do not require any transition disclosures. The provisions of this update did not have a material impact on the Company’s financial position, results of operations or cash flows.
In September 2011, the FASB issued ASU No. 2011-08,Testing Goodwill for Impairment. The provisions of ASU No. 2011-08 permits an entity an option to first perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If an entity believes, as a result of its qualitative assessment, that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the quantitative impairment test is required. Otherwise, no further impairment testing is required. ASU No. 2011-08 includes examples of events and circumstances that may indicate that a reporting unit’s fair value is less than its carrying amount. The provisions of ASU No. 2011-08 are effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. Early adoption is permitted provided that the entity has not yet performed its annual impairment test for goodwill. The provisions of this update did not have a material impact on the Company’s financial position, results of operations or cash flows.
In July 2012, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2012-02,“Testing Indefinite-Lived Intangible Assets for Impairment.”The provisions of ASU No. 2012-02 permit an entity to first assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform a quantitative impairment test, as is currently required by GAAP. ASU No. 2012-02 is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. The adoption of ASU No. 2012-02 is expected to have no impact on the Company’s financial position, results of operations or cash flows.
In February 2013, the FASB issued ASU 2013-02, “Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income.” This update requires entities to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, entities are required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income. The Company adopted this standard on January 1, 2013. The effect of adopting this standard increased the Company’s disclosure surrounding reclassification items out of accumulated other comprehensive income.
- | ||
2012 | 2011 | 2010 | ||||||||||
(In Thousands, Except Per Share Amounts) | ||||||||||||
Numerator for basic and diluted earnings per common share-net income applicable to common shares | $ | 18,047 | $ | 13,506 | $ | 6,088 | ||||||
Denominator: | ||||||||||||
Denominator for basic earnings per common share-weighted-average common shares, including participating securities | 9,728 | 9,371 | 8,118 | |||||||||
Effect of dilutive securities: | ||||||||||||
Employee stock options | 51 | 15 | 1 | |||||||||
Warrants | 219 | 154 | 34 | |||||||||
Dilutive potential common shares | 270 | 169 | 35 | |||||||||
Denominator for diluted earnings per common share | 9,998 | 9,540 | 8,153 | |||||||||
Basic earnings per common share | $ | 1.86 | $ | 1.44 | $ | .75 | ||||||
Diluted earnings per common share | $ | 1.81 | $ | 1.42 | $ | .75 |
2013 | 2012 | 2011 | ||||||||
(In Thousands, Except Per Share Amounts) | ||||||||||
Numerator for basic and diluted earnings per common share-net income applicable to common shares | $ | 22,235 | $ | 18,047 | $ | 13,506 | ||||
Denominator: | ||||||||||
Denominator for basic earnings per common share-weighted-average common shares, including participating securities | 9,764 | 9,728 | 9,371 | |||||||
Effect of dilutive securities: | ||||||||||
Employee stock options | 87 | 51 | 15 | |||||||
Warrants | 320 | 219 | 154 | |||||||
Dilutive potential common shares | 407 | 270 | 169 | |||||||
Denominator for diluted earnings per common share | 10,171 | 9,998 | 9,540 | |||||||
Basic earnings per common share | $ | 2.28 | $ | 1.86 | $ | 1.44 | ||||
Diluted earnings per common share | $ | 2.19 | $ | 1.81 | $ | 1.42 |
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Gross | Gross | |||||||||||||||
Amortized | Unrealized | Unrealized | Fair | |||||||||||||
Cost | Gains | Losses | Value | |||||||||||||
(In Thousands) | ||||||||||||||||
2012 | ||||||||||||||||
Available-for-sale | ||||||||||||||||
Obligations of U.S. government corporations and agencies | $ | 11,000 | $ | 69 | $ | - | $ | 11,069 | ||||||||
U.S. treasury bonds | 1,000 | 2 | - | 1,002 | ||||||||||||
Mortgage-backed securities - residential | 30,020 | 1,441 | - | 31,461 | ||||||||||||
Collateralized mortgage obligations | 55,962 | 1,504 | - | 57,466 | ||||||||||||
Trust preferred stock and preferred stock | 3,600 | 99 | (2,091 | ) | 1,608 | |||||||||||
Corporate bonds | 8,717 | 167 | - | 8,884 | ||||||||||||
Obligations of state and political subdivisions | 76,339 | 6,277 | (5 | ) | 82,611 | |||||||||||
Total Available-for-Sale | $ | 186,638 | $ | 9,559 | $ | (2,096 | ) | $ | 194,101 | |||||||
Held-to-Maturity | ||||||||||||||||
FHLMC certificates | $ | 69 | $ | - | $ | (1 | ) | $ | 68 | |||||||
FNMA certificates | 162 | 6 | - | 168 | ||||||||||||
GNMA certificates | 60 | 3 | - | 63 | ||||||||||||
Obligations of states and political subdivisions | 217 | - | - | 217 | ||||||||||||
Total Held-to-Maturity | $ | 508 | $ | 9 | $ | (1 | ) | $ | 516 |
Gross | Gross | ||||||||||||
Amortized | Unrealized | Unrealized | Fair | ||||||||||
Cost | Gains | Losses | Value | ||||||||||
(In Thousands) | |||||||||||||
2013 | |||||||||||||
Available-for-sale | |||||||||||||
Obligations of U.S. government corporations and agencies | $ | 5,000 | $ | - | $ | (79) | $ | 4,921 | |||||
Mortgage-backed securities - residential | 41,368 | 765 | (841) | 41,292 | |||||||||
Collateralized mortgage obligations | 59,865 | 739 | (763) | 59,841 | |||||||||
Trust preferred stock and preferred stock | 3,264 | 683 | (993) | 2,954 | |||||||||
Corporate bonds | 8,854 | 129 | (41) | 8,942 | |||||||||
Obligations of state and political subdivisions | 78,426 | 2,704 | (910) | 80,220 | |||||||||
Total Available-for-Sale | $ | 196,777 | $ | 5,020 | $ | (3,627) | $ | 198,170 | |||||
Gross | Gross | ||||||||||||
Amortized | Unrecognized | Unrecognized | Fair | ||||||||||
Cost | Gains | Losses | Value | ||||||||||
(In Thousands) | |||||||||||||
Held-to-Maturity | |||||||||||||
FHLMC certificates | $ | 31 | $ | - | $ | - | $ | 31 | |||||
FNMA certificates | 120 | 4 | - | 124 | |||||||||
GNMA certificates | 50 | 2 | - | 52 | |||||||||
Obligations of states and political subdivisions | 186 | - | - | 186 | |||||||||
Total Held-to-Maturity | $ | 387 | $ | 6 | $ | - | $ | 393 |
Gross | Gross | ||||||||||||
Amortized | Unrealized | Unrealized | Fair | ||||||||||
Cost | Gains | Losses | Value | ||||||||||
(In Thousands) | |||||||||||||
2012 | |||||||||||||
Available-for-sale | |||||||||||||
Obligations of U.S. government corporations and agencies | $ | 11,000 | $ | 69 | $ | - | $ | 11,069 | |||||
U.S. treasury bonds | 1,000 | 2 | - | 1,002 | |||||||||
Mortgage-backed securities - residential | 30,020 | 1,441 | - | 31,461 | |||||||||
Collateralized mortgage obligations | 55,962 | 1,504 | - | 57,466 | |||||||||
Trust preferred stock and preferred stock | 3,600 | 99 | (2,091) | 1,608 | |||||||||
Corporate bonds | 8,717 | 167 | - | 8,884 | |||||||||
Obligations of state and political subdivisions | 76,339 | 6,277 | (5) | 82,611 | |||||||||
Total Available-for-Sale | $ | 186,638 | $ | 9,559 | $ | (2,096) | $ | 194,101 |
- 78 - | ||
Gross | Gross | |||||||||||||||
Amortized | Unrealized | Unrealized | Fair | |||||||||||||
Cost | Gains | Losses | Value | |||||||||||||
(In Thousands) | ||||||||||||||||
2011 | ||||||||||||||||
Available-for-sale | ||||||||||||||||
Obligations of U.S. government corporations and agencies | $ | 16,989 | $ | 96 | $ | - | $ | 17,085 | ||||||||
U.S. treasury bonds | 2,000 | 10 | - | 2,010 | ||||||||||||
Mortgage-backed securities - residential | 68,400 | 2,318 | (2 | ) | 70,716 | |||||||||||
REMICs | 2,863 | 31 | - | 2,894 | ||||||||||||
Collateralized mortgage obligations | 57,083 | 1,926 | - | 59,009 | ||||||||||||
Trust preferred stock and preferred stock | 3,790 | 73 | (2,413 | ) | 1,450 | |||||||||||
Corporate bonds | 8,629 | - | (377 | ) | 8,252 | |||||||||||
Obligations of state and political subdivisions | 65,928 | 5,580 | (5 | ) | 71,503 | |||||||||||
Total Available-for-Sale | $ | 225,682 | $ | 10,034 | $ | (2,797 | ) | $ | 232,919 | |||||||
Held-to-Maturity | ||||||||||||||||
FHLMC certificates | $ | 82 | $ | 1 | $ | - | $ | 83 | ||||||||
FNMA certificates | 199 | 4 | - | 203 | ||||||||||||
GNMA certificates | 72 | 3 | - | 75 | ||||||||||||
Obligations of states and political subdivisions | 308 | 3 | - | 311 | ||||||||||||
Total Held-to-Maturity | $ | 661 | $ | 11 | $ | - | $ | 672 |
Gross | Gross | ||||||||||||
Amortized | Unrecognized | Unrecognized | Fair | ||||||||||
Cost | Gains | Losses | Value | ||||||||||
(In Thousands) | |||||||||||||
Held-to-Maturity | |||||||||||||
FHLMC certificates | $ | 69 | $ | - | $ | (1) | $ | 68 | |||||
FNMA certificates | 162 | 6 | - | 168 | |||||||||
GNMA certificates | 60 | 3 | - | 63 | |||||||||
Obligations of states and political subdivisions | 217 | - | - | 217 | |||||||||
Total Held-to-Maturity | $ | 508 | $ | 9 | $ | (1) | $ | 516 |
Available-for-Sale | Held-to-Maturity | |||||||||||||||
Amortized | Fair | Amortized | Fair | |||||||||||||
Cost | Value | Cost | Value | |||||||||||||
(In Thousands) | ||||||||||||||||
2012 | ||||||||||||||||
Due in one year or less | $ | 1,252 | $ | 1,258 | $ | - | $ | - | ||||||||
Due after one year through five years | 15,719 | 15,996 | - | - | ||||||||||||
Due after five years through ten years | 33,743 | 36,024 | 217 | 217 | ||||||||||||
Due after ten years | 49,942 | 51,896 | - | - | ||||||||||||
MBS/CMO | 85,982 | 88,927 | 291 | 299 | ||||||||||||
$ | 186,638 | $ | 194,101 | $ | 508 | $ | 516 |
Available-for-Sale | ||||||
Amortized | Fair | |||||
Cost | Value | |||||
(In Thousands) | ||||||
2013 | ||||||
Available-for-sale | ||||||
Due in one year or less | $ | 2,135 | $ | 2,137 | ||
Due after one year through five years | 8,198 | 8,526 | ||||
Due after five years through ten years | 38,707 | 40,016 | ||||
Due after ten years | 46,504 | 46,358 | ||||
MBS/CMO | 101,233 | 101,133 | ||||
Total | $ | 196,777 | $ | 198,170 | ||
Held-to-maturity | ||||||
Due after five years through ten years | $ | 186 | $ | 186 | ||
MBS/CMO | 201 | 207 | ||||
Total | $ | 387 | $ | 393 |
Available-for-Sale | |||||||
Amortized | Fair | ||||||
Cost | Value | ||||||
(In Thousands) | |||||||
2012 | |||||||
Available-for-sale | |||||||
Due in one year or less | $ | 1,252 | $ | 1,258 | |||
Due after one year through five years | 15,719 | 15,996 | |||||
Due after five years through ten years | 33,743 | 36,024 | |||||
Due after ten years | 49,942 | 51,896 | |||||
MBS/CMO | 85,982 | 88,927 | |||||
$ | 186,638 | $ | 194,101 | ||||
Held-to-maturity | |||||||
Due after five years through ten years | $ | 217 | $ | 217 | |||
MBS/CMO | 291 | 299 | |||||
Total | $ | 508 | $ | 516 |
- 79 - | ||
2013.
Duration of Unrealized Loss Position | ||||||||||||||||||||||||
Less than 12 Months | 12 Months or Longer | Total | ||||||||||||||||||||||
Gross | Gross | |||||||||||||||||||||||
Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | |||||||||||||||||||
Value | Loss | Value | Loss | Value | Loses | |||||||||||||||||||
(In Thousands) | ||||||||||||||||||||||||
At December 31, 2012 | ||||||||||||||||||||||||
Available-for-sale securities: | ||||||||||||||||||||||||
Mortgage-backed securities - residential | $ | 1 | $ | - | $ | - | $ | - | $ | 1 | $ | - | ||||||||||||
Obligations of state and political subdivisions | 949 | (5 | ) | - | - | 949 | (5 | ) | ||||||||||||||||
Trust preferred stock and preferred stock | - | - | 1,474 | (2,091 | ) | 1,474 | (2,091 | ) | ||||||||||||||||
Total temporarily impaired securities | $ | 950 | $ | (5 | ) | $ | 1,474 | $ | (2,091 | ) | $ | 2,424 | $ | (2,096 | ) | |||||||||
At December 31, 2011 | ||||||||||||||||||||||||
Available-for-sale securities: | ||||||||||||||||||||||||
Mortgage-backed securities - residential | $ | 2,030 | $ | (2 | ) | $ | - | $ | - | $ | 2,030 | $ | (2 | ) | ||||||||||
Obligations of state and political subdivisions | - | - | 746 | (5 | ) | 746 | (5 | ) | ||||||||||||||||
Trust preferred stock and preferred stock | - | - | 1,342 | (2,413 | ) | 1,342 | (2,413 | ) | ||||||||||||||||
Corporate bonds | 8,252 | (377 | ) | - | - | 8,252 | (377 | ) | ||||||||||||||||
Total temporarily impaired securities | $ | 10,282 | $ | (379 | ) | $ | 2,088 | $ | (2,418 | ) | $ | 12,370 | $ | (2,797 | ) |
2012:
Duration of Unrealized Loss Position | |||||||||||||||||||
Less than 12 Months | 12 Months or Longer | Total | |||||||||||||||||
Gross | Gross | ||||||||||||||||||
Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | ||||||||||||||
Value | Loss | Value | Loss | Value | Loses | ||||||||||||||
(In Thousands) | |||||||||||||||||||
At December 31, 2013 | |||||||||||||||||||
Available-for-sale securities: | |||||||||||||||||||
Obligations of U.S. government corporations and agencies | $ | 4,921 | $ | (79) | $ | - | $ | - | $ | 4,921 | $ | (79) | |||||||
Mortgage-backed securities - residential | 24,846 | (841) | - | - | 24,846 | (841) | |||||||||||||
Collateralized mortgage obligations | 26,530 | (763) | - | - | 26,530 | (763) | |||||||||||||
Corporate bonds | 2,959 | (41) | - | - | 2,959 | (41) | |||||||||||||
Obligations of state and political subdivisions | 19,209 | (871) | 375 | (39) | 19,584 | (910) | |||||||||||||
Trust preferred stock and preferred stock | - | - | 582 | (993) | 582 | (993) | |||||||||||||
Total temporarily impaired securities | $ | 78,465 | $ | (2,595) | $ | 957 | $ | (1,032) | $ | 79,422 | $ | (3,627) |
At December 31, 2012 | |||||||||||||||||||
Available-for-sale securities: | |||||||||||||||||||
Mortgage-backed securities - residential | $ | 1 | $ | - | $ | - | $ | - | $ | 1 | $ | - | |||||||
Obligations of state and political subdivisions | 949 | (5) | - | - | 949 | (5) | |||||||||||||
Trust preferred stock and preferred stock | - | - | 1,474 | (2,091) | 1,474 | (2,091) | |||||||||||||
Total temporarily impaired securities | $ | 950 | $ | (5) | $ | 1,474 | $ | (2,091) | $ | 2,424 | $ | (2,096) |
- 80 - | ||
When OTTI occurs under either model, the amount of the OTTI recognized in earnings depends on whether an entity intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis less any current period credit loss. If an entity intends to sell or more likely than not will be required to sell the security before recovery of its amortized cost basis less any current period credit loss, the OTTI shall be recognized in earnings equal to the entire difference between the investment’s amortized cost basis and its fair value at the balance sheet date. If an entity does not intend to sell the security and it is not more likely than not that the entity will be required to sell the security before recovery of its amortized cost basis less any current period loss, the OTTI shall be separated into the amount representing the credit loss and the amount related to all other factors. The amount of OTTI related to the credit loss is determined based on the present value of cash flows expected to be collected compared to the book value of the security and is recognized in earnings. The amount of OTTI related to other factors shall be recognized in other comprehensive income, net of applicable taxes. The previous amortized cost basis less the OTTI recognized in earnings shall become the new amortized cost basis of the investment.
prior periods.
The two CDOs sold in January 2014, will be classified within Level 1 of the fair value hierarchy.
- 81 - | ||
The default and recovery probabilities for each piece of collateral were formed based on the evaluation of the collateral credit and a review of historical industry default data and current/near-term operating conditions. For collateral that has already deferred, the Company assumed a recovery of 10%10% of par for banks, thrifts or other depository institutions, and 15%15% for insurance companies. Although there is a possibility thatThe Company’s assumed average lifetime default rate declined to26.2% at the deferring collateral will become currentend of 2013 from27.9% at some point in the future, First Defiance has conservatively assumed that it will continue to defer and gradually will default.
The following table details the six securities with OTTI, their lowest credit rating at December 31, 2012 and the related credit losses recognized in earnings for the four quarters ended March 31, 2012, June 30, 2012, September 30, 2012 and December 31, 2012 (In Thousands):
TPREF Funding II Rated | Alesco VIII | Preferred Term Sec XXVII | Trapeza CDO I | Alesco Preferred Funding VIII | Alesco Preferred Funding IX | |||||||||||||||||||||||
Caa3 | Rated Ca | Rated C | Rated Ca | Not Rated | Not Rated | Total | ||||||||||||||||||||||
Amount of OTTI related to credit loss at January 1, 2012 | $ | 318 | $ | 1,000 | $ | 78 | $ | 857 | $ | 453 | $ | 465 | $ | 3,171 | ||||||||||||||
Addition – Qtr 1 | - | - | - | - | - | - | - | |||||||||||||||||||||
Amount of OTTI related to credit loss at March 31, 2012 | $ | 318 | $ | 1,000 | $ | 78 | $ | 857 | $ | 453 | $ | 465 | $ | 3,171 | ||||||||||||||
Addition – Qtr 2 | - | - | - | - | - | - | - | |||||||||||||||||||||
Amount of OTTI related to credit loss at June 30, 2012 | $ | 318 | $ | 1,000 | $ | 78 | $ | 857 | $ | 453 | $ | 465 | $ | 3,171 | ||||||||||||||
Addition – Qtr 3 | - | - | - | - | - | - | - | |||||||||||||||||||||
Amount of OTTI related to credit loss at September 30, 2012 | $ | 318 | $ | 1,000 | $ | 78 | $ | 857 | $ | 453 | $ | 465 | $ | 3,171 | ||||||||||||||
Addition – Qtr 4 | 5 | - | - | - | - | - | 5 | |||||||||||||||||||||
Amount of OTTI related to credit loss at December 31, 2012 | $ | 323 | $ | 1,000 | $ | 78 | $ | 857 | $ | 453 | $ | 465 | $ | 3,176 |
The amount of OTTI recognized in accumulated other comprehensive income (“AOCI”) was $749,000$645,000 for the above sixeight securities at December 31, 2012.2013. There was $847,000$749,000 recognized in accumulated other comprehensive income at December 31, 2011.
The2012.
CDO | Class | Amortized Cost | Fair Value | Unrealized Loss | OTTI Losses 2013 | Lowest Rating | Current Number of Banks and Insurance Companies | Actual Deferrals and Defaults as a % of Current Collateral | Expected Deferrals and Defaults as a % of Remaining Performing Collateral | Excess Sub- ordination as a % of Current Performing Collateral | |||||||||||||||||
TPREF Funding II | B | $ | 673 | $ | 266 | $ | 407 | $ | 0 | Caa3 | 16 | 41.10 | % | 13.48 | % | - | % | ||||||||||
I-Preferred Term Sec I | B-1 | 839 | 839 | - | 161 | CCC- | 14 | 17.24 | % | 11.72 | %* | 23.61 | % | ||||||||||||||
Dekania II CDO | C-1 | 815 | 815 | - | 176 | CCC | 30 | - | % | 13.16 | %* | 26.03 | % | ||||||||||||||
Preferred Term Sec XXVII | C-1 | 902 | 316 | 586 | 0 | C | 32 | 26.18 | % | 18.29 | % | 6.39 | % | ||||||||||||||
Total | $ | 3,229 | $ | 2,236 | $ | 993 | $ | 337 |
- | ||
CDO | Class | Amortized Cost | Fair Value | Unrealized Loss | OTTI Losses 2012 | Lowest Rating | Current Number of Banks and Insurance Companies | Actual Deferrals and Defaults as a % of Current Collateral | Expected Deferrals and Defaults as a % of Remaining Performing Collateral | Excess Sub- ordination as a % of Current Performing Collateral | ||||||||||||||||||||||||||||
TPREF Funding II | B | 673 | 209 | 464 | 5 | Caa3 | 15 | 43.47 | % | 17.92 | % | -% | ||||||||||||||||||||||||||
I-Preferred Term Sec I | B-1 | 1,000 | 542 | 458 | 0 | CCC | 15 | 7.96 | % | 23.00 | % | 25.62 | % | |||||||||||||||||||||||||
Dekania II CDO | C-1 | 990 | 505 | 485 | 0 | CCC | 32 | -% | 13.69 | % | 29.62 | % | ||||||||||||||||||||||||||
Preferred Term Sec XXVII | C-1 | 902 | 218 | 684 | 0 | C | 32 | 27.09 | % | 22.29 | % | 6.23 | % | |||||||||||||||||||||||||
Total | $ | 3,565 | $ | 1,474 | $ | 2,091 | $ | 5 |
The increase in OTTI in 2012 was the result of a slight deterioration in the performance of the underlying collateral. Specifically, depreciation was driven by both realized credit events (i.e. defaults and deferrals) and weakening credit fundamentals in some of the performing collateral, which led to an increased probability of default going forward. The Company’s assumed average lifetime default rate declined to 27.9% at the end of 2012 from 28.3% at the end of 2011.
The table below presents a roll-forward of the credit losses relating to debt securities recognized in earnings for the years ended December 31, 2013, 2012 2011 and 20102011 (in thousands):
2012 | 2011 | 2010 | ||||||||||
Beginning balance, January 1 | $ | 3,251 | $ | 3,249 | $ | 5,296 | ||||||
Additions for amounts related to credit loss for which an OTTI was not previously recognized | - | - | 76 | |||||||||
Reductions for amounts realized for securities sold/redeemed during the period | (80 | ) | - | (2,261 | ) | |||||||
Reductions for amounts related to securities for which the Company intends to sell or that it will be more likely than not that the Company will be required to sell prior to recovery of amortized cost basis | - | - | - | |||||||||
Reductions for increase in cash flows expected to be collected that are Recognized over the remaining life of the security | - | - | - | |||||||||
Increases to the amount related to the credit loss for which Other-than-temporary was previously recognized | 5 | 2 | 138 | |||||||||
Ending balance, December 31 | $ | 3,176 | $ | 3,251 | $ | 3,249 |
2013 | 2012 | 2011 | ||||||||
Beginning balance, January 1 | $ | 3,176 | $ | 3,251 | $ | 3,249 | ||||
Additions for amounts related to credit loss for which an OTTI was not previously recognized | 337 | - | - | |||||||
Reductions for amounts realized for securities sold/redeemed during the period | - | (80) | - | |||||||
Reductions for amounts related to securities for which the Company intends to sell or that it will be more likely than not that the Company will be required to sell prior to recovery of amortized cost basis | - | - | - | |||||||
Reductions for increase in cash flows expected to be collected that are Recognized over the remaining life of the security | - | - | - | |||||||
Increases to the amount related to the credit loss for which Other-than- temporary was previously recognized | - | 5 | 2 | |||||||
Ending balance, December 31 | $ | 3,513 | $ | 3,176 | $ | 3,251 |
2012 | 2011 | 2010 | ||||||||||
(In Thousands) | ||||||||||||
Proceeds | $ | 72,262 | $ | 8,719 | $ | 448 | ||||||
Gross realized gains | 2,163 | 218 | 3 | |||||||||
Gross realized losses | (24 | ) | - | (11 | ) |
The following table summarizes the changes within each classification of accumulated other comprehensive income for the years ended December 31, 2012 and 2011:
Unrealized gains (losses) on available for sale securities | Postretirement Benefit | Accumulated other comprehensive income (loss), net | ||||||||||
(In Thousands) | ||||||||||||
Balance at December 31, 2011 | $ | 4,704 | $ | (707 | ) | $ | 3,997 | |||||
Other comprehensive income (loss), net | 147 | 130 | 277 | |||||||||
Balance at December 31, 2012 | $ | 4,851 | $ | (577 | ) | $ | 4,274 |
Unrealized gains (losses) on available for sale securities | Postretirement Benefit | Accumulated other comprehensive income (loss), net | ||||||||||
(In Thousands) | ||||||||||||
Balance at December 31, 2010 | $ | 32 | $ | (374 | ) | $ | (342 | ) | ||||
Other comprehensive income (loss), net | 4,672 | (333 | ) | 4,339 | ||||||||
Balance at December 31, 2011 | $ | 4,704 | $ | (707 | ) | $ | 3,997 |
2013 | 2012 | 2011 | ||||||||
(In Thousands) | ||||||||||
Proceeds | $ | 4,027 | $ | 72,262 | $ | 8,719 | ||||
Gross realized gains | 97 | 2,163 | 218 | |||||||
Gross realized losses | - | (24) | - |
2013 | 2012 | |||||||||||
Fixed Rate | Variable Rate | Fixed Rate | Variable Rate | |||||||||
Commitments to make loans | $ | 57,914 | $ | 59,632 | $ | 50,205 | $ | 48,035 | ||||
Unused lines of credit | 18,047 | 257,939 | 21,975 | 228,269 | ||||||||
Standby letters of credit | - | 17,680 | - | 18,166 | ||||||||
Total | $ | 75,962 | $ | 335,251 | $ | 72,180 | $ | 294,470 |
- 83 - | ||
2012 | 2011 | |||||||||||||||
Fixed Rate | Variable Rate | Fixed Rate | Variable Rate | |||||||||||||
Commitments to make loans | $ | 50,205 | $ | 48,035 | $ | 38,399 | $ | 47,037 | ||||||||
Unused lines of credit | 21,975 | 228,269 | 24,943 | 184,446 | ||||||||||||
Standby letters of credit | - | 18,166 | 4,600 | 21,507 | ||||||||||||
Total | $ | 72,180 | $ | 294,470 | $ | 67,942 | $ | 252,990 |
years
.December 31, 2012 | December 31, 2011 | |||||||
Real Estate: | ||||||||
Secured by 1-4 family residential | $ | 200,826 | $ | 203,401 | ||||
Secured by multi-family residential | 122,275 | 126,246 | ||||||
Secured by commercial real estate | 675,110 | 649,746 | ||||||
Construction | 37,788 | 31,552 | ||||||
1,035,999 | 1,010,945 | |||||||
Other Loans: | ||||||||
Commercial | 383,817 | 349,053 | ||||||
Home equity and improvement | 108,718 | 122,143 | ||||||
Consumer Finance | 15,936 | 18,887 | ||||||
508,471 | 490,083 | |||||||
Total loans | 1,544,470 | 1,501,028 | ||||||
Deduct: | ||||||||
Undisbursed loan funds | (18,478 | ) | (13,243 | ) | ||||
Net deferred loan origination fees and costs | (735 | ) | (709 | ) | ||||
Allowance for loan loss | (26,711 | ) | (33,254 | ) | ||||
Totals | $ | 1,498,546 | $ | 1,453,822 |
following:
December 31, 2013 | December 31, 2012 | ||||||
(In Thousands) | |||||||
Real Estate: | |||||||
Secured by 1-4 family residential | $ | 195,752 | $ | 200,826 | |||
Secured by multi-family residential | 148,952 | 122,275 | |||||
Secured by commercial real estate | 670,666 | 675,110 | |||||
Construction | 86,058 | 37,788 | |||||
1,101,428 | 1,035,999 | ||||||
Other Loans: | |||||||
Commercial | 388,236 | 383,817 | |||||
Home equity and improvement | 106,930 | 108,718 | |||||
Consumer Finance | 16,902 | 15,936 | |||||
512,068 | 508,471 | ||||||
Total loans | 1,613,496 | 1,544,470 | |||||
Deduct: | |||||||
Undisbursed loan funds | (32,290) | (18,478) | |||||
Net deferred loan origination fees and costs | (758) | (735) | |||||
Allowance for loan loss | (24,950) | (26,711) | |||||
Totals | $ | 1,555,498 | $ | 1,498,546 |
- | ||
Year to Date December 31, 2012 | 1-4 Family Residential Real Estate | Construction | Multi- Family Residential Real Estate | Commercial Real Estate | Commercial | Home Equity and Improvement | Consumer | Total | ||||||||||||||||||||||||
Beginning Allowance | $ | 4,095 | $ | 63 | $ | 2,850 | $ | 17,640 | $ | 6,576 | $ | 1,856 | $ | 174 | $ | 33,254 | ||||||||||||||||
Charge-Offs | (2,515 | ) | - | (555 | ) | (10,764 | ) | (4,047 | ) | (1,165 | ) | (133 | ) | (19,179 | ) | |||||||||||||||||
Recoveries | 177 | - | 122 | 895 | 359 | 95 | 64 | 1,712 | ||||||||||||||||||||||||
Provisions | 1,749 | 12 | (220 | ) | 4,931 | 3,437 | 973 | 42 | 10,924 | |||||||||||||||||||||||
Ending Allowance | $ | 3,506 | $ | 75 | $ | 2,197 | $ | 12,702 | $ | 6,325 | $ | 1,759 | $ | 147 | $ | 26,711 |
Year-to-Date December 31, 2011 | 1-4 Family Residential Real Estate | Construction | Multi- Family Residential Real Estate | Commercial Real Estate | Commercial | Home Equity and Improvement | Consumer | Total | ||||||||||||||||||||||||
Beginning Allowance | $ | 5,956 | $ | 73 | $ | 2,147 | $ | 20,208 | $ | 10,871 | $ | 1,528 | $ | 297 | $ | 41,080 | ||||||||||||||||
Charge-Offs | (2,753 | ) | - | (792 | ) | (12,358 | ) | (4,398 | ) | (1,052 | ) | (95 | ) | (21,448 | ) | |||||||||||||||||
Recoveries | 127 | - | - | 533 | 393 | 65 | 70 | 1,188 | ||||||||||||||||||||||||
Provisions | 765 | (10 | ) | 1,495 | 9,257 | (290 | ) | 1,315 | (98 | ) | 12,434 | |||||||||||||||||||||
Ending Allowance | $ | 4,095 | $ | 63 | $ | 2,850 | $ | 17,640 | $ | 6,576 | $ | 1,856 | $ | 174 | $ | 33,254 |
Year to Date December 31, 2010 | 1-4 Family Residential Real Estate | Construction | Commercial RE & Multi- Family Residential RE | Commercial | Home Equity and Improvement | Consumer | Total | |||||||||||||||||||||
Beginning Allowance | $ | 6,048 | $ | - | $ | 18,876 | $ | 9,444 | $ | 1,664 | $ | 515 | $ | 36,547 | ||||||||||||||
Charge-Offs | (3,092 | ) | - | (9,928 | ) | (5,118 | ) | (1,066 | ) | (124 | ) | (19,328 | ) | |||||||||||||||
Recoveries | 170 | - | 50 | 259 | 98 | 107 | 684 | |||||||||||||||||||||
Provisions | 2,830 | 73 | 13,357 | 6,286 | 832 | (201 | ) | 23,177 | ||||||||||||||||||||
Ending Allowance | $ | 5,956 | $ | 73 | $ | 22,355 | $ | 10,871 | $ | 1,528 | $ | 297 | $ | 41,080 |
Year to Date December 31, 2013 | 1-4 Family Residential Real Estate | Multi-Family Residential Real Estate | Commercial Real Estate | Construction | Commercial | Home Equity and Improvement | Consumer Finance | Total | |||||||||||||||||
Beginning Allowance | $ | 3,506 | $ | 2,197 | $ | 12,702 | $ | 75 | $ | 6,325 | $ | 1,759 | $ | 147 | $ | 26,711 | |||||||||
Charge-Offs | (643) | (6) | (2,469) | - | (1,230) | (757) | (94) | (5,199) | |||||||||||||||||
Recoveries | 282 | - | 837 | - | 290 | 125 | 80 | 1,614 | |||||||||||||||||
Provisions | (298) | 317 | 930 | 59 | 293 | 508 | 15 | 1,824 | |||||||||||||||||
Ending Allowance | $ | 2,847 | $ | 2,508 | $ | 12,000 | $ | 134 | $ | 5,678 | $ | 1,635 | $ | 148 | $ | 24,950 | |||||||||
Year to Date December 31, 2012 | 1-4 Family Residential Real Estate | Multi-Family Residential Real Estate | Commercial Real Estate | Construction | Commercial | Home Equity and Improvement | Consumer Finance | Total | |||||||||||||||||
Beginning Allowance | $ | 4,095 | $ | 2,850 | $ | 17,640 | $ | 63 | $ | 6,576 | $ | 1,856 | $ | 174 | $ | 33,254 | |||||||||
Charge-Offs | (2,515) | (555) | (10,764) | - | (4,047) | (1,165) | (133) | (19,179) | |||||||||||||||||
Recoveries | 177 | 122 | 895 | - | 359 | 95 | 64 | 1,712 | |||||||||||||||||
Provisions | 1,749 | (220) | 4,931 | 12 | 3,437 | 973 | 42 | 10,924 | |||||||||||||||||
Ending Allowance | $ | 3,506 | $ | 2,197 | $ | 12,702 | $ | 75 | $ | 6,325 | $ | 1,759 | $ | 147 | $ | 26,711 |
Year-to-Date December 31, 2011 | 1-4 Family Residential Real Estate | Multi-Family Residential Real Estate | Commercial Real Estate | Construction | Commercial | Home Equity and Improvement | Consumer Finance | Total | |||||||||||||||||
Beginning Allowance | $ | 5,956 | $ | 2,147 | $ | 20,208 | $ | 73 | $ | 10,871 | $ | 1,528 | $ | 297 | $ | 41,080 | |||||||||
Charge-Offs | (2,753) | (792) | (12,358) | - | (4,398) | (1,052) | (95) | (21,448) | |||||||||||||||||
Recoveries | 127 | - | 533 | - | 393 | 65 | 70 | 1,188 | |||||||||||||||||
Provisions | 765 | 1,495 | 9,257 | (10) | (290) | 1,315 | (98) | 12,434 | |||||||||||||||||
Ending Allowance | $ | 4,095 | $ | 2,850 | $ | 17,640 | $ | 63 | $ | 6,576 | $ | 1,856 | $ | 174 | $ | 33,254 |
- | ||
1-4 Family | Multi Family | ||||||||||||||||||||||||
Residential | Residential | Commercial | Home Equity | Consumer | |||||||||||||||||||||
Real Estate | Real Estate | Real Estate | Commercial | Construction | & Improvement | Finance | Total | ||||||||||||||||||
Allowance for loan losses: | |||||||||||||||||||||||||
Ending allowance balance attributable to loans: | |||||||||||||||||||||||||
Individually evaluated for impairment | $ | 220 | $ | - | $ | 1,121 | $ | - | $ | 6 | $ | 45 | $ | - | $ | 1,392 | |||||||||
Collectively evaluated for impairment | 2,627 | 2,508 | 10,879 | 134 | 5,672 | 1,590 | 148 | 23,558 | |||||||||||||||||
Acquired with deteriorated credit quality | - | - | - | - | - | - | - | - | |||||||||||||||||
Total ending allowance balance | $ | 2,847 | $ | 2,508 | $ | 12,000 | $ | 134 | $ | 5,678 | $ | 1,635 | $ | 148 | $ | 24,950 | |||||||||
Loans: | |||||||||||||||||||||||||
Loans individually evaluated for impairment | $ | 10,245 | $ | 840 | $ | 34,874 | $ | 263 | $ | 8,737 | $ | 2,429 | $ | 53 | $ | 57,441 | |||||||||
Loans collectively evaluated for impairment | 185,923 | 148,294 | 637,657 | 53,467 | 380,711 | 104,958 | 16,838 | 1,527,848 | |||||||||||||||||
Loans acquired with deteriorated credit quality | 29 | - | 174 | - | 27 | - | - | 230 | |||||||||||||||||
Total ending loans balance | $ | 196,197 | $ | 149,134 | $ | 672,705 | $ | 53,730 | $ | 389,475 | $ | 107,387 | $ | 16,891 | $ | 1,585,519 |
- 86 - | ||
1-4 Family | Multi- Family | |||||||||||||||||||||||||||||||
Residential | Residential | Commercial | Home Equity | |||||||||||||||||||||||||||||
Real Estate | Construction | Real Estate | Real Estate | Commercial | & Improvement | Consumer | Total | |||||||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||||||||||||||
Ending allowance balance attributable to loans: | ||||||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 281 | $ | - | $ | - | $ | 1,070 | $ | 138 | $ | 2 | $ | - | $ | 1,491 | ||||||||||||||||
Collectively evaluated for impairment | 3,225 | 75 | 2,197 | 11,632 | 6,187 | 1,757 | 147 | 25,220 | ||||||||||||||||||||||||
Acquired with deteriorated credit quality | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||
Total ending allowance balance | $ | 3,506 | $ | 75 | $ | 2,197 | $ | 12,702 | $ | 6,325 | $ | 1,759 | $ | 147 | $ | 26,711 | ||||||||||||||||
Loans: | ||||||||||||||||||||||||||||||||
Loans individually evaluated for impairment | $ | 11,930 | $ | 45 | $ | 1,626 | $ | 46,053 | $ | 8,830 | $ | 2,678 | $ | 124 | $ | 71,286 | ||||||||||||||||
Loans collectively evaluated for impairment | 189,348 | 19,251 | 120,829 | 630,534 | 376,007 | 106,516 | 15,815 | 1,458,300 | ||||||||||||||||||||||||
Loans acquired with deteriorated credit quality | 36 | - | - | 436 | 32 | - | - | 504 | ||||||||||||||||||||||||
Total ending loans balance | $ | 201,314 | $ | 19,296 | $ | 122,455 | $ | 677,023 | $ | 384,869 | $ | 109,194 | $ | 15,939 | $ | 1,530,090 |
1-4 Family | Multi Family | ||||||||||||||||||||||||
Residential | Residential | Commercial | Home Equity | Consumer | |||||||||||||||||||||
Real Estate | Real Estate | Real Estate | Commercial | Construction | & Improvement | Finance | Total | ||||||||||||||||||
Allowance for loan losses: | |||||||||||||||||||||||||
Ending allowance balance attributable to loans: | |||||||||||||||||||||||||
Individually evaluated for impairment | $ | 281 | $ | - | $ | 1,070 | $ | - | $ | 138 | $ | 2 | $ | - | $ | 1,491 | |||||||||
Collectively evaluated for impairment | 3,225 | 2,197 | 11,632 | 75 | 6,187 | 1,757 | 147 | 25,220 | |||||||||||||||||
Acquired with deteriorated credit quality | - | - | - | - | - | - | - | - | |||||||||||||||||
Total ending allowance balance | $ | 3,506 | $ | 2,197 | $ | 12,702 | $ | 75 | $ | 6,325 | $ | 1,759 | $ | 147 | $ | 26,711 | |||||||||
Loans: | |||||||||||||||||||||||||
Loans individually evaluated for impairment | $ | 11,930 | $ | 1,626 | $ | 46,053 | $ | 45 | $ | 8,830 | $ | 2,678 | $ | 124 | $ | 71,286 | |||||||||
Loans collectively evaluated for impairment | 189,348 | 120,829 | 630,534 | 19,251 | 376,007 | 106,516 | 15,815 | 1,458,300 | |||||||||||||||||
Loans acquired with deteriorated credit quality | 36 | - | 436 | - | 32 | - | - | 504 | |||||||||||||||||
Total ending loans balance | $ | 201,314 | $ | 122,455 | $ | 677,023 | $ | 19,296 | $ | 384,869 | $ | 109,194 | $ | 15,939 | $ | 1,530,090 |
- | ||
The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of December 31, 2011:
(In Thousands)
1-4 Family | Multi- Family | |||||||||||||||||||||||||||||||
Residential | Residential | Commercial | Home Equity | |||||||||||||||||||||||||||||
Real Estate | Construction | Real Estate | Real Estate | Commercial | & Improvement | Consumer | Total | |||||||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||||||||||||||
Ending allowance balance attributable to loans: | ||||||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 654 | $ | - | $ | 195 | $ | 5,400 | $ | 969 | $ | - | $ | - | $ | 7,218 | ||||||||||||||||
Collectively evaluated for impairment | 3,441 | 63 | 2,655 | 12,240 | 5,607 | 1,856 | 174 | 26,036 | ||||||||||||||||||||||||
Acquired with deteriorated credit quality | - | - | - | - | - | |||||||||||||||||||||||||||
Total ending allowance balance | $ | 4,095 | $ | 63 | $ | 2,850 | $ | 17,640 | $ | 6,576 | $ | 1,856 | $ | 174 | $ | 33,254 | ||||||||||||||||
Loans: | ||||||||||||||||||||||||||||||||
Loans individually evaluated for impairment | $ | 4,537 | $ | - | $ | 1,435 | $ | 34,009 | $ | 6,773 | $ | 40 | $ | - | $ | 46,794 | ||||||||||||||||
Loans collectively evaluated for impairment | 199,453 | 18,288 | 125,080 | 616,856 | 343,147 | 122,623 | 18,910 | 1,444,357 | ||||||||||||||||||||||||
Loans acquired with deteriorated credit quality | 70 | - | - | 825 | 312 | - | - | 1,207 | ||||||||||||||||||||||||
Total ending loans balance | $ | 204,060 | $ | 18,288 | $ | 126,515 | $ | 651,690 | $ | 350,232 | $ | 122,663 | $ | 18,910 | $ | 1,492,358 |
The following table presents the average balance, interest income recognized and cash basis income recognized on impaired loans by class of loans.(In Thousands)
Twelve Months Ended December 31, 2012 | ||||||||||||
Average Balance | Interest Income Recognized | Cash Basis Income Recognized | ||||||||||
Residential Owner Occupied | $ | 2,946 | $ | 137 | $ | 136 | ||||||
Residential Non Owner Occupied | 5,291 | 173 | 177 | |||||||||
Total Residential Real Estate | 8,237 | 310 | 313 | |||||||||
Construction | 9 | - | - | |||||||||
Multi-Family | 826 | 22 | 21 | |||||||||
CRE Owner Occupied | 11,755 | 190 | 176 | |||||||||
CRE Non Owner Occupied | 17,156 | 540 | 559 | |||||||||
Agriculture Land | 1,062 | 31 | 23 | |||||||||
Other CRE | 6,672 | 15 | 15 | |||||||||
Total Commercial Real Estate | 36,645 | 776 | 773 | |||||||||
Commercial Working Capital | 2,021 | 26 | 29 | |||||||||
Commercial Other | 5,018 | 87 | 90 | |||||||||
Total Commercial | 7,039 | 113 | 119 | |||||||||
Consumer | 25 | 3 | 3 | |||||||||
Home Equity and Home Improvement | 563 | 33 | 33 | |||||||||
Total Impaired Loans | $ | 53,344 | $ | 1,257 | $ | 1,262 |
Twelve Months Ended December 31, 2013 | ||||||||||
Average Balance | Interest Income Recognized | Cash Basis Income Recognized | ||||||||
Residential Owner Occupied | $ | 6,529 | $ | 345 | $ | 343 | ||||
Residential Non Owner Occupied | 4,453 | 162 | 163 | |||||||
Total 1-4 Family Residential Real Estate | 10,982 | 507 | 506 | |||||||
Multi-Family Residential Real Estate | 1,176 | 27 | 28 | |||||||
CRE Owner Occupied | 14,313 | 376 | 386 | |||||||
CRE Non Owner Occupied | 22,339 | 901 | 909 | |||||||
Agriculture Land | 987 | 26 | 16 | |||||||
Other CRE | 4,162 | 43 | 38 | |||||||
Total Commercial Real Estate | 41,801 | 1,346 | 1,349 | |||||||
Construction | 165 | 10 | 8 | |||||||
Commercial Working Capital | 2,085 | 33 | 36 | |||||||
Commercial Other | 6,521 | 75 | 70 | |||||||
Total Commercial | 8,606 | 108 | 106 | |||||||
Consumer Finance | 83 | 6 | 6 | |||||||
Home Equity and Home Improvement | 2,631 | 121 | 117 | |||||||
Total Impaired Loans | $ | 65,444 | $ | 2,125 | $ | 2,120 |
- | ||
Twelve Months Ended December 31, 2012 | ||||||||||
Average Balance | Interest Income Recognized | Cash Basis Income Recognized | ||||||||
Residential Owner Occupied | $ | 2,946 | $ | 137 | $ | 136 | ||||
Residential Non Owner Occupied | 5,291 | 173 | 177 | |||||||
Total 1-4 Family Residential Real Estate | 8,237 | 310 | 313 | |||||||
Multi-Family Residential Real Estate | 826 | 22 | 21 | |||||||
CRE Owner Occupied | 11,755 | 190 | 176 | |||||||
CRE Non Owner Occupied | 17,156 | 540 | 559 | |||||||
Agriculture Land | 1,062 | 31 | 23 | |||||||
Other CRE | 6,672 | 15 | 15 | |||||||
Total Commercial Real Estate | 36,645 | 776 | 773 | |||||||
Construction | 9 | - | - | |||||||
Commercial Working Capital | 2,021 | 26 | 29 | |||||||
Commercial Other | 5,018 | 87 | 90 | |||||||
Total Commercial | 7,039 | 113 | 119 | |||||||
Consumer Finance | 25 | 3 | 3 | |||||||
Home Equity and Home Improvement | 563 | 33 | 33 | |||||||
Total Impaired Loans | $ | 53,344 | $ | 1,257 | $ | 1,262 |
- 89 - | ||
Twelve Months Ended December 31, 2011 | ||||||||||||
Average Balance | Interest Income Recognized | Cash Basis Income Recognized | ||||||||||
Residential Owner Occupied | $ | 2,689 | $ | 68 | $ | 67 | ||||||
Residential Non Owner Occupied | 2,646 | 85 | 87 | |||||||||
Total Residential Real Estate | 5,335 | 153 | 154 | |||||||||
Construction | 25 | - | - | |||||||||
Multi-Family | 2,097 | 88 | 83 | |||||||||
CRE Owner Occupied | 10,631 | 302 | 282 | |||||||||
CRE Non Owner Occupied | 19,351 | 777 | 724 | |||||||||
Agriculture Land | 1,932 | 47 | 47 | |||||||||
Other CRE | 7,952 | 54 | 43 | |||||||||
Total Commercial Real Estate | 39,866 | 1,180 | 1,096 | |||||||||
Commercial Working Capital | 3,758 | 74 | 77 | |||||||||
Commercial Other | 9,660 | 194 | 191 | |||||||||
Total Commercial | 13,418 | 268 | 268 | |||||||||
Consumer | - | - | - | |||||||||
Home Equity and Home Improvement | 258 | 12 | 12 | |||||||||
Total Impaired Loans | $ | 60,999 | $ | 1,701 | $ | 1,613 |
Twelve Months Ended | ||||
December 31, 2010 | ||||
Average balance of individually impaired loans during the year | $ | 64,429 | ||
Interest income recognized | 2,237 | |||
Cash Basis Income recognized | 2,017 |
Twelve Months Ended December 31, 2011 | ||||||||||
Average Balance | Interest Income Recognized | Cash Basis Income Recognized | ||||||||
Residential Owner Occupied | $ | 2,689 | $ | 68 | $ | 67 | ||||
Residential Non Owner Occupied | 2,646 | 85 | 87 | |||||||
Total 1-4 Family Residential Real Estate | 5,335 | 153 | 154 | |||||||
Multi-Family Residential Real Estate | 2,097 | 88 | 83 | |||||||
CRE Owner Occupied | 10,631 | 302 | 282 | |||||||
CRE Non Owner Occupied | 19,351 | 777 | 724 | |||||||
Agriculture Land | 1,932 | 47 | 47 | |||||||
Other CRE | 7,952 | 54 | 43 | |||||||
Total Commercial Real Estate | 39,866 | 1,180 | 1,096 | |||||||
Construction | 25 | - | - | |||||||
Commercial Working Capital | 3,758 | 74 | 77 | |||||||
Commercial Other | 9,660 | 194 | 191 | |||||||
Total Commercial | 13,418 | 268 | 268 | |||||||
Consumer Finance | - | - | - | |||||||
Home Equity and Home Improvement | 258 | 12 | 12 | |||||||
Total Impaired Loans | $ | 60,999 | $ | 1,701 | $ | 1,613 |
- | ||
Unpaid Principal Balance* | Recorded Investment | Allowance for Loan Losses Allocated | ||||||||||
With no allowance recorded: | ||||||||||||
Residential Owner Occupied | $ | 5,427 | $ | 5,357 | $ | - | ||||||
Residential Non Owner Occupied | 4,211 | 3,420 | - | |||||||||
Total Residential Real Estate | 9,638 | 8,777 | - | |||||||||
Construction | 300 | 45 | - | |||||||||
Multi-Family Residential Real Estate | 1,775 | 1,626 | - | |||||||||
CRE Owner Occupied | 12,314 | 9,782 | - | |||||||||
CRE Non Owner Occupied | 11,054 | 9,105 | - | |||||||||
Agriculture Land | 1,176 | 993 | - | |||||||||
Other CRE | 8,741 | 5,527 | - | |||||||||
Total Commercial Real Estate | 33,285 | 25,407 | - | |||||||||
Commercial Working Capital | 1,565 | 1,565 | - | |||||||||
Commercial Other | 6,367 | 5,338 | - | |||||||||
Total Commercial | 7,932 | 6,903 | - | |||||||||
Consumer | 125 | 124 | - | |||||||||
Home Equity and Home Improvement | 2,777 | 2,642 | - | |||||||||
Total loans with no allowance recorded | $ | 55,832 | $ | 45,524 | $ | - | ||||||
With an allowance recorded: | ||||||||||||
Residential Owner Occupied | $ | 1,697 | $ | 1,701 | $ | 257 | ||||||
Residential Non Owner Occupied | 1,449 | 1,452 | 24 | |||||||||
Total Residential Real Estate | 3,146 | 3,153 | 281 | |||||||||
Construction | - | - | - | |||||||||
Multi-Family Residential Real Estate | - | - | - | |||||||||
CRE Owner Occupied | 5,735 | 5,118 | 245 | |||||||||
CRE Non Owner Occupied | 15,301 | 15,357 | 820 | |||||||||
Agriculture Land | 111 | 112 | 3 | |||||||||
Other CRE | 88 | 59 | 2 | |||||||||
Total Commercial Real Estate | 21,235 | 20,646 | 1,070 | |||||||||
Commercial Working Capital | 300 | 301 | 10 | |||||||||
Commercial Other | 1,623 | 1,626 | 128 | |||||||||
Total Commercial | 1,923 | 1,927 | 138 | |||||||||
Consumer | - | - | - | |||||||||
Home Equity and Home Improvement | 36 | 36 | 2 | |||||||||
Total loans with an allowance recorded | $ | 26,340 | $ | 25,762 | $ | 1,491 |
December 31, 2013 | December 31, 2012 | ||||||||||||||||||
Unpaid Principal Balance* | Recorded Investment | Allowance for Loan Losses Allocated | Unpaid Principal Balance* | Recorded Investment | Allowance for Loan Losses Allocated | ||||||||||||||
With no allowance recorded: | |||||||||||||||||||
Residential Owner Occupied | $ | 4,744 | $ | 4,729 | $ | - | $ | 5,427 | $ | 5,357 | $ | - | |||||||
Residential Non Owner Occupied | 4,844 | 4,329 | - | 4,211 | 3,420 | - | |||||||||||||
Total 1-4 Family Residential Real Estate | 9,588 | 9,058 | - | 9,638 | 8,777 | - | |||||||||||||
Multi-Family Residential Real Estate | 989 | 840 | - | 1,775 | 1,626 | - | |||||||||||||
CRE Owner Occupied | 11,105 | 8,376 | - | 12,314 | 9,782 | - | |||||||||||||
CRE Non Owner Occupied | 9,399 | 7,740 | - | 11,054 | 9,105 | - | |||||||||||||
Agriculture Land | 629 | 488 | - | 1,176 | 993 | - | |||||||||||||
Other CRE | 3,274 | 2,452 | - | 8,741 | 5,527 | - | |||||||||||||
Total Commercial Real Estate | 24,407 | 19,056 | - | 33,285 | 25,407 | - | |||||||||||||
Construction | 300 | 263 | - | 300 | 45 | - | |||||||||||||
Commercial Working Capital | 3,147 | 3,146 | - | 1,565 | 1,565 | - | |||||||||||||
Commercial Other | 6,063 | 5,415 | - | 6,367 | 5,338 | - | |||||||||||||
Total Commercial | 9,210 | 8,561 | - | 7,932 | 6,903 | - | |||||||||||||
Consumer | 53 | 53 | - | 125 | 124 | - | |||||||||||||
Home Equity and Home Improvement | 1,985 | 1,992 | - | 2,777 | 2,642 | - | |||||||||||||
Total loans with no allowance recorded | $ | 46,532 | $ | 39,823 | $ | - | $ | 55,832 | $ | 45,524 | $ | - | |||||||
With an allowance recorded: | |||||||||||||||||||
Residential Owner Occupied | $ | 1,100 | $ | 1,103 | $ | 218 | $ | 1,697 | $ | 1,701 | $ | 257 | |||||||
Residential Non Owner Occupied | 84 | 84 | 2 | 1,449 | 1,452 | 24 | |||||||||||||
Total 1-4 Family Residential Real Estate | 1,184 | 1,187 | 220 | 3,146 | 3,153 | 281 | |||||||||||||
Multi-Family Residential Real Estate | - | - | - | - | - | - | |||||||||||||
CRE Owner Occupied | 3,212 | 2,765 | 166 | 5,735 | 5,118 | 245 | |||||||||||||
CRE Non Owner Occupied | 12,756 | 12,803 | 946 | 15,301 | 15,357 | 820 | |||||||||||||
Agriculture Land | 195 | 197 | 7 | 111 | 112 | 3 | |||||||||||||
Other CRE | 82 | 53 | 2 | 88 | 59 | 2 | |||||||||||||
Total Commercial Real Estate | 16,245 | 15,818 | 1,121 | 21,235 | 20,646 | 1,070 | |||||||||||||
Construction | - | - | - | - | - | - | |||||||||||||
Commercial Working Capital | - | - | - | 300 | 301 | 10 | |||||||||||||
Commercial Other | 176 | 176 | 6 | 1,623 | 1,626 | 128 | |||||||||||||
Total Commercial | 176 | 176 | 6 | 1,923 | 1,927 | 138 | |||||||||||||
Consumer | - | - | - | - | - | - | |||||||||||||
Home Equity and Home Improvement | 436 | 437 | 45 | 36 | 36 | 2 | |||||||||||||
Total loans with an allowance recorded | $ | 18,041 | $ | 17,618 | $ | 1,392 | $ | 26,340 | $ | 25,762 | $ | 1,491 |
- | ||
The following table presents loans individually evaluated for impairment by class of loans as of December 31, 2011:(In Thousands)
Unpaid Principal Balance* | Recorded Investment | Allowance for Loan Losses Allocated | ||||||||||
With no allowance recorded: | ||||||||||||
Residential Owner Occupied | $ | 981 | $ | 984 | $ | - | ||||||
Residential Non Owner Occupied | 1,871 | 1,877 | - | |||||||||
Total Residential Real Estate | 2,852 | 2,861 | - | |||||||||
Construction | - | - | - | |||||||||
Multi-Family Residential Real Estate | 1,138 | 1,137 | - | |||||||||
CRE Owner Occupied | 5,868 | 5,879 | - | |||||||||
CRE Non Owner Occupied | 8,408 | 8,421 | - | |||||||||
Agriculture Land | 1,072 | 1,073 | - | |||||||||
Other CRE | 5,607 | 5,605 | - | |||||||||
Total Commercial Real Estate | 20,955 | 20,978 | - | |||||||||
Commercial Working Capital | 1,391 | 1,393 | - | |||||||||
Commercial Other | 3,444 | 3,453 | - | |||||||||
Total Commercial | 4,835 | 4,846 | - | |||||||||
Consumer | - | - | - | |||||||||
Home Equity and Home Improvement | 39 | 40 | - | |||||||||
Total loans with no allowance recorded | $ | 29,819 | $ | 29,862 | $ | - | ||||||
With an allowance recorded: | ||||||||||||
Residential Owner Occupied | $ | 1,020 | $ | 1,020 | $ | 373 | ||||||
Residential Non Owner Occupied | 726 | 726 | 281 | |||||||||
Total Residential Real Estate | 1,746 | 1,746 | 654 | |||||||||
Construction | - | - | - | |||||||||
Multi-Family Residential Real Estate | 298 | 298 | 195 | |||||||||
CRE Owner Occupied | 2,284 | 2,284 | 589 | |||||||||
CRE Non Owner Occupied | 8,589 | 8,596 | 3,235 | |||||||||
Agriculture Land | 300 | 300 | 163 | |||||||||
Other CRE | 2,676 | 2,676 | 1,413 | |||||||||
Total Commercial Real Estate | 13,849 | 13,856 | 5,400 | |||||||||
Commercial Working Capital | 358 | 358 | 192 | |||||||||
Commercial Other | 1,879 | 1,881 | 777 | |||||||||
Total Commercial | 2,237 | 2,239 | 969 | |||||||||
Consumer | - | - | - | |||||||||
Home Equity and Home Improvement | - | - | - | |||||||||
Total loans with an allowance recorded | $ | 18,130 | $ | 18,139 | $ | 7,218 |
* Presented net of charge-offs
The following table presents the current balance of the aggregate amounts of non-performing assets, comprised of non-performing loans and real estate owned on the dates indicated:
December 31, 2012 | December 31, 2011 | |||||||
(in thousands) | ||||||||
Non-accrual loans | $ | 32,570 | $ | 39,328 | ||||
Loans over 90 days past due and still accruing | - | - | ||||||
Total non-performing loans | 32,570 | $ | 39,328 | |||||
Real estate and other assets held for sale | 3,805 | 3,628 | ||||||
Total non-performing assets | $ | 36,375 | $ | 42,956 | ||||
Troubled debt restructuring, still accruing | $ | 28,203 | $ | 3,380 |
December 31, 2013 | December 31, 2012 | ||||||
(in thousands) | |||||||
Non-accrual loans | $ | 27,847 | $ | 32,570 | |||
Loans over 90 days past due and still accruing | - | - | |||||
Total non-performing loans | 27,847 | 32,570 | |||||
Real estate and other assets held for sale | 5,859 | 3,805 | |||||
Total non-performing assets | $ | 33,706 | $ | 36,375 | |||
Troubled debt restructuring, still accruing | $ | 27,630 | $ | 28,203 |
Current | 30-59 days | 60-89 days | 90+ days | Total Past Due | Total Non Accrual | ||||||||||||||
Residential Owner Occupied | $ | 126,855 | $ | 1,530 | $ | 191 | $ | 1,009 | $ | 2,730 | $ | 1,329 | |||||||
Residential Non Owner Occupied | 65,292 | 531 | 403 | 386 | 1,320 | 1,943 | |||||||||||||
Total 1-4 Family Residential Real Estate | 192,147 | 2,061 | 594 | 1,395 | 4,050 | 3,272 | |||||||||||||
Multi-Family Residential Real Estate | 149,134 | - | - | - | - | 583 | |||||||||||||
CRE Owner Occupied | 311,253 | 334 | 495 | 3,671 | 4,500 | 7,492 | |||||||||||||
CRE Non Owner Occupied | 225,433 | 1,067 | 918 | 902 | 2,887 | 4,717 | |||||||||||||
Agriculture Land | 81,954 | 21 | - | 73 | 94 | 630 | |||||||||||||
Other Commercial Real Estate | 45,297 | - | - | 1,287 | 1,287 | 2,412 | |||||||||||||
Total Commercial Real Estate | 663,937 | 1,422 | 1,413 | 5,933 | 8,768 | 15,251 | |||||||||||||
Construction | 53,730 | - | - | - | - | - | |||||||||||||
Commercial Working Capital | 155,373 | - | - | 419 | 419 | 2,917 | |||||||||||||
Commercial Other | 230,054 | 37 | 26 | 3,566 | 3,629 | 5,419 | |||||||||||||
Total Commercial | 385,427 | 37 | 26 | 3,985 | 4,048 | 8,336 | |||||||||||||
Consumer Finance | 16,759 | 131 | - | 131 | - | ||||||||||||||
Home Equity/Home Improvement | 105,657 | 1,163 | 155 | 413 | 1,731 | 413 | |||||||||||||
Total Loans | $ | 1,566,791 | $ | 4,814 | $ | 2,188 | $ | 11,726 | $ | 18,728 | $ | 27,855 |
- 92 - | ||
Current | 30-59 days | 60-89 days | 90+ days | Total Past Due | Total Non Accrual | |||||||||||||||||||
Residential Owner Occupied | $ | 125,362 | $ | 1,238 | $ | 604 | $ | 945 | $ | 2,787 | $ | 1,125 | ||||||||||||
Residential Non Owner Occupied | 71,777 | 413 | 126 | 849 | 1,388 | 2,473 | ||||||||||||||||||
Total Residential Real Estate | 197,139 | 1,651 | 730 | 1,794 | 4,175 | 3,598 | ||||||||||||||||||
Construction | 19,296 | - | - | - | - | - | ||||||||||||||||||
Multi-Family | 122,455 | - | - | - | - | 1,178 | ||||||||||||||||||
CRE Owner Occupied | 321,071 | 1,248 | 382 | 1,622 | 3,252 | 9,652 | ||||||||||||||||||
CRE Non Owner Occupied | 235,592 | 134 | 1,321 | 2,480 | 3,935 | 6,674 | ||||||||||||||||||
Agriculture Land | 72,092 | 84 | 31 | - | 115 | 813 | ||||||||||||||||||
Other Commercial Real Estate | 36,510 | 21 | 875 | 3,560 | 4,456 | 4,761 | ||||||||||||||||||
Total Commercial Real Estate | 665,265 | 1,487 | 2,609 | 7,662 | 11,758 | 21,900 | ||||||||||||||||||
Commercial Working Capital | 161,110 | - | 155 | 1,204 | 1,359 | 1,528 | ||||||||||||||||||
Commercial Other | 218,477 | 584 | 1,201 | 2,138 | 3,923 | 4,136 | ||||||||||||||||||
Total Commercial | 379,587 | 584 | 1,356 | 3,342 | 5,282 | 5,664 | ||||||||||||||||||
Consumer | 15,702 | 229 | 8 | - | 237 | - | ||||||||||||||||||
Home Equity/Home Improvement | 106,458 | 2,294 | 225 | 217 | 2,736 | 217 | ||||||||||||||||||
Total Loans | $ | 1,505,902 | $ | 6,245 | $ | 4,928 | $ | 13,015 | $ | 24,188 | $ | 32,557 |
Current | 30-59 days | 60-89 days | 90+ days | Total Past Due | Total Non Accrual | ||||||||||||||
Residential Owner Occupied | $ | 125,362 | $ | 1,238 | $ | 604 | $ | 945 | $ | 2,787 | $ | 1,125 | |||||||
Residential Non Owner Occupied | 71,777 | 413 | 126 | 849 | 1,388 | 2,473 | |||||||||||||
Total 1-4 Family Residential Real Estate | 197,139 | 1,651 | 730 | 1,794 | 4,175 | 3,598 | |||||||||||||
Multi-Family Residential Real Estate | 122,455 | - | - | - | - | 1,178 | |||||||||||||
CRE Owner Occupied | 321,071 | 1,248 | 382 | 1,622 | 3,252 | 9,652 | |||||||||||||
CRE Non Owner Occupied | 235,592 | 134 | 1,321 | 2,480 | 3,935 | 6,674 | |||||||||||||
Agriculture Land | 72,092 | 84 | 31 | - | 115 | 813 | |||||||||||||
Other Commercial Real Estate | 36,510 | 21 | 875 | 3,560 | 4,456 | 4,761 | |||||||||||||
Total Commercial Real Estate | 665,265 | 1,487 | 2,609 | 7,662 | 11,758 | 21,900 | |||||||||||||
Construction | 19,296 | - | - | - | - | - | |||||||||||||
Commercial Working Capital | 161,110 | - | 155 | 1,204 | 1,359 | 1,528 | |||||||||||||
Commercial Other | 218,477 | 584 | 1,201 | 2,138 | 3,923 | 4,136 | |||||||||||||
Total Commercial | 379,587 | 584 | 1,356 | 3,342 | 5,282 | 5,664 | |||||||||||||
Consumer Finance | 15,702 | 229 | 8 | - | 237 | - | |||||||||||||
Home Equity/Home Improvement | 106,458 | 2,294 | 225 | 217 | 2,736 | 217 | |||||||||||||
Total Loans | $ | 1,505,902 | $ | 6,245 | $ | 4,928 | $ | 13,015 | $ | 24,188 | $ | 32,557 |
The following table presents the aging of the recorded investment in past due and non-accrual loans as of December 31, 2011 by class of loans:(In Thousands)
Current | 30-59 days | 60-89 days | 90+ days | Total Past Due | Total Non Accrual | |||||||||||||||||||
Residential Owner Occupied | $ | 131,014 | $ | 1,573 | $ | 220 | $ | 1,996 | $ | 3,789 | $ | 2,490 | ||||||||||||
Residential Non Owner Occupied | 67,516 | 563 | 410 | 768 | 1,741 | 1,397 | ||||||||||||||||||
Total Residential Real Estate | 198,530 | 2,136 | 630 | 2,764 | 5,530 | 3,887 | ||||||||||||||||||
Construction | 18,288 | - | - | - | - | - | ||||||||||||||||||
Multi-Family | 125,050 | 1,022 | - | 443 | 1,465 | 443 | ||||||||||||||||||
CRE Owner Occupied | 288,096 | 1,468 | 993 | 4,771 | 7,232 | 7,691 | ||||||||||||||||||
CRE Non Owner Occupied | 243,016 | 921 | 1,990 | 3,384 | 6,295 | 10,398 | ||||||||||||||||||
Agriculture Land | 70,490 | - | - | 456 | 456 | 1,275 | ||||||||||||||||||
Other Commercial Real Estate | 30,056 | 98 | - | 5,951 | 6,049 | 8,342 | ||||||||||||||||||
Total Commercial Real Estate | 631,658 | 2,487 | 2,983 | 14,562 | 20,032 | 27,706 | ||||||||||||||||||
Commercial Working Capital | 137,310 | - | 223 | 242 | 465 | 1,410 | ||||||||||||||||||
Commercial Other | 209,187 | 278 | 59 | 2,933 | 3,270 | 5,481 | ||||||||||||||||||
Total Commercial | 346,497 | 278 | 282 | 3,175 | 3,735 | 6,891 | ||||||||||||||||||
Consumer | 18,736 | 129 | 35 | 10 | 174 | 10 | ||||||||||||||||||
Home Equity/Home Improvement | 119,400 | 2,602 | 267 | 394 | 3,263 | 394 | ||||||||||||||||||
Total Loans | $ | 1,458,159 | $ | 8,654 | $ | 4,197 | $ | 21,378 | $ | 34,199 | $ | 39,331 |
2012.
- 93 - | ||
Loans Modified as a TDR for the Twelve Months Ended December 31, 2012 | ||||||||
Troubled Debt Restructurings | Number of Loans | Recorded Investment (as of period end) | ||||||
Residential Owner Occupied | 87 | $ | 6,052 | |||||
Residential Non Owner Occupied | 8 | 666 | ||||||
CRE Owner Occupied | 9 | 3,859 | ||||||
CRE Non Owner Occupied | 13 | 13,942 | ||||||
Agriculture Land | 3 | 474 | ||||||
Other CRE | 1 | 59 | ||||||
Commercial / Industrial | 7 | 1,196 | ||||||
Home Equity / Improvement | 127 | 2,663 | ||||||
Consumer | 27 | 124 | ||||||
Total | 282 | $ | 29,035 |
Loans Modified as a TDR for the Twelve Months Ended December 31, 2013 | Loans Modified as a TDR for the Twelve Months Ended December 31, 2012 | Loans Modified as a TDR for the Twelve Months Ended December 31, 2011 | ||||||||||||||
Troubled Debt Restructurings | Number of Loans | Recorded Investment (as of period end) | Number of Loans | Recorded Investment (as of period end) | Number of Loans | Recorded Investment (as of period end) | ||||||||||
1-4 Family Owner Occupied | 10 | $ | 752 | 87 | $ | 6,052 | 4 | $ | 250 | |||||||
1-4 Family Non Owner Occupied | 5 | 390 | 8 | 666 | 1 | 305 | ||||||||||
CRE Owner Occupied | 9 | 714 | 9 | 3,859 | 6 | 426 | ||||||||||
CRE Non Owner Occupied | 2 | 1,364 | 13 | 13,942 | 6 | 4,628 | ||||||||||
Agriculture Land | 2 | 269 | 3 | 474 | - | - | ||||||||||
Other CRE | 3 | 417 | 1 | 59 | - | - | ||||||||||
Commercial Working Capital or Other | 8 | 1,602 | 7 | 1,196 | 6 | 2,379 | ||||||||||
Home Equity and Improvement | 15 | 561 | 127 | 2,663 | 1 | 22 | ||||||||||
Consumer Finance | 3 | 15 | 27 | 124 | - | - | ||||||||||
Total | 57 | $ | 6,084 | 282 | $ | 29,035 | 24 | $ | 8,010 |
2011.
The following table presents loans by class modified as TDRs that occurred during the year ending December 31, 2011:
- | ||
Loans Modified as a TDR for the Twelve Months Ended December 31, 2011 | ||||||||
Troubled Debt Restructurings | Number of Loans | Recorded Investment (as of period end) | ||||||
Residential Owner Occupied | 4 | $ | 250 | |||||
Residential Non Owner Occupied | 1 | 305 | ||||||
CRE Owner Occupied | 6 | 426 | ||||||
CRE Non Owner Occupied | 6 | 4,628 | ||||||
Agriculture Land | - | - | ||||||
Other CRE | - | - | ||||||
Commercial / Industrial | 6 | 2,379 | ||||||
Home Equity / Improvement | 1 | 22 | ||||||
Consumer | - | - | ||||||
Total | 24 | $ | 8,010 |
The troubled debt restructurings described above decreased the allowance for loan losses by $479,000 for the year ended December 31, 2011, after $2.1 million of charge-offs during the year ended December 31, 2011.
The following table presents loans by class modified as TDRs for which there was a payment default within twelve months following the modification during the yearyears ending December 31, 2012:
Troubled Debt Restructurings That Subsequently Defaulted: | Number of Loans | Recorded Investment (as of Period End) | ||||||
Residential Owner Occupied | 6 | $ | 462 | |||||
Residential Non Owner Occupied | 2 | 203 | ||||||
CRE Owner Occupied | - | - | ||||||
CRE Non Owner Occupied | 3 | 555 | ||||||
Agriculture Land | - | - | ||||||
Other CRE | - | - | ||||||
Commercial / Industrial | 5 | 2,129 | ||||||
Home Equity / Improvement | 7 | 166 | ||||||
Consumer | - | - | ||||||
Total | 23 | $ | 3,515 |
2013, 2012, and 2011:
Twelve Months Ended December 31, 2013 ($ in thousands) | Twelve Months Ended December 31, 2012 ($ in thousands) | Twelve Months Ended December 31, 2011 ($ in thousands) | |||||||||||||||
Troubled Debt Restructurings That Subsequently Defaulted: | Number of Loans | Recorded Investment (as of Period End) | Number of Loans | Recorded Investment (as of Period End) | Number of Loans | Recorded Investment (as of Period End) | |||||||||||
Residential Owner Occupied | 6 | $ | 409 | 6 | $ | 462 | 2 | $ | 206 | ||||||||
Residential Non Owner Occupied | - | - | 2 | 203 | - | - | |||||||||||
CRE Owner Occupied | 2 | 290 | - | - | 1 | 1,495 | |||||||||||
CRE Non Owner Occupied | 1 | 212 | 3 | 555 | - | - | |||||||||||
Agriculture Land | - | - | - | - | - | - | |||||||||||
Other CRE | 1 | 323 | - | - | - | - | |||||||||||
Commercial / Industrial | 5 | 889 | 5 | 2,129 | 1 | 53 | |||||||||||
Home Equity / Improvement | 3 | 315 | 7 | 166 | - | - | |||||||||||
Consumer | - | - | - | - | - | - | |||||||||||
Total | 18 | $ | 2,438 | 23 | $ | 3,515 | 4 | $ | 1,754 |
The following table presents loans by class modified as TDRs for which there was a payment default within twelve months following the modification during the year ending December 31, 2011:
Troubled Debt Restructurings That Subsequently Defaulted: | Number of Loans | Recorded Investment (as of Period End) | ||||||
Residential Owner Occupied | 2 | $ | 206 | |||||
Residential Non Owner Occupied | - | - | ||||||
CRE Owner Occupied | 1 | 1,495 | ||||||
CRE Non Owner Occupied | 1 | - | ||||||
Agriculture Land | - | - | ||||||
Other CRE | - | - | ||||||
Commercial / Industrial | 2 | 53 | ||||||
Home Equity / Improvement | - | - | ||||||
Consumer | - | - | ||||||
Total | 6 | $ | 1,754 |
The TDRs that subsequently defaulted described above2013, decreased the allowance for loan lossesALLL by $851,000$631,000 after $1.5 million in charge-offs for the year ended December 31, 2011,2012, and increased the ALLL by $29,000 after $1.5 million of$500,000 in charge-offs duringfor the year ended December 31, 2011.
- 95 - | ||
Class | Pass | Special Mention | Substandard | Doubtful | Not Graded | Total | |||||||||||||
1-4 Family Owner Occupied | $ | 4,287 | $ | 18 | $ | 3,515 | $ | - | $ | 121,765 | $ | 129,585 | |||||||
1-4 Family Non Owner Occupied | 51,660 | 2,894 | 5,699 | - | 6,359 | 66,612 | |||||||||||||
Total 1-4 Family Real Estate | 55,947 | 2,912 | 9,214 | - | 128,124 | 196,197 | |||||||||||||
Multi-Family Residential Real Estate | 145,407 | 875 | 1,888 | - | 964 | 149,134 | |||||||||||||
CRE Owner Occupied | 291,770 | 10,584 | 11,665 | - | 1,734 | 315,753 | |||||||||||||
CRE Non Owner Occupied | 200,790 | 10,254 | 17,185 | - | 91 | 228,320 | |||||||||||||
Agriculture Land | 80,418 | 578 | 1,051 | - | - | 82,047 | |||||||||||||
Other CRE | 40,676 | 2,074 | 3,104 | - | 731 | 46,585 | |||||||||||||
Total Commercial Real Estate | 613,654 | 23,490 | 33,005 | - | 2,556 | 672,705 | |||||||||||||
Construction | 43,465 | - | 263 | - | 10,002 | 53,730 | |||||||||||||
Commercial Working Capital | 148,703 | 3,429 | 3,660 | - | - | 155,792 | |||||||||||||
Commercial Other | 219,790 | 6,994 | 6,899 | - | - | 233,683 | |||||||||||||
Total Commercial | 368,493 | 10,423 | 10,559 | - | - | 389,475 | |||||||||||||
Home Equity and Home Improvement | - | - | 755 | 45 | 106,587 | 107,387 | |||||||||||||
Consumer Finance | - | - | 31 | - | 16,860 | 16,891 | |||||||||||||
Total Loans | $ | 1,226,966 | $ | 37,700 | $ | 55,715 | $ | 45 | $ | 265,093 | $ | 1,585,519 |
- 96 - | ||
Category | Pass | Special Mention | Substandard | Doubtful | Not Graded | Total | ||||||||||||||||||
Residential Owner Occupied | $ | 4,221 | $ | 75 | $ | 3,617 | $ | 234 | $ | 120,002 | $ | 128,149 | ||||||||||||
Residential Non Owner Occupied | 55,771 | 2,453 | 8,248 | - | 6,693 | 73,165 | ||||||||||||||||||
Total Residential Real Estate | 59,992 | 2,528 | 11,865 | 234 | 126,695 | 201,314 | ||||||||||||||||||
Construction | 11,360 | - | 45 | - | 7,891 | 19,296 | ||||||||||||||||||
Multi-Family | 118,121 | 910 | 2,404 | - | 1,020 | 122,455 | ||||||||||||||||||
CRE Owner Occupied | 292,765 | 10,440 | 18,740 | - | 2,378 | 324,323 | ||||||||||||||||||
CRE Non Owner Occupied | 207,745 | 9,077 | 22,615 | - | 90 | 239,527 | ||||||||||||||||||
Agriculture Land | 69,924 | 769 | 1,514 | - | - | 72,207 | ||||||||||||||||||
Other Commercial Real Estate | 31,875 | 891 | 7,222 | - | 978 | 40,966 | ||||||||||||||||||
Total Commercial Real Estate | 602,309 | 21,177 | 50,091 | - | 3,446 | 677,023 | ||||||||||||||||||
Commercial Working Capital | 156,433 | 3,587 | 2,449 | - | - | 162,469 | ||||||||||||||||||
Commercial Other | 208,783 | 5,204 | 8,413 | - | - | 222,400 | ||||||||||||||||||
Total Commercial | 365,216 | 8,791 | 10,862 | - | - | 384,869 | ||||||||||||||||||
Consumer | - | - | 70 | - | 15,869 | 15,939 | ||||||||||||||||||
Home Equity/Home Improvement | - | - | 668 | 64 | 108,462 | 109,194 | ||||||||||||||||||
Total Loans | $ | 1,156,998 | $ | 33,406 | $ | 76,005 | $ | 298 | $ | 263,383 | $ | 1,530,090 |
Class | Pass | Special Mention | Substandard | Doubtful | Not Graded | Total | |||||||||||||
1-4 Family Owner Occupied | $ | 4,221 | $ | 75 | $ | 3,617 | $ | 234 | $ | 120,002 | $ | 128,149 | |||||||
1-4 Family Non Owner Occupied | 55,771 | 2,453 | 8,248 | - | 6,693 | 73,165 | |||||||||||||
Total 1-4 Family Real Estate | 59,992 | 2,528 | 11,865 | 234 | 126,695 | 201,314 | |||||||||||||
Multi-Family Residential Real Estate | 118,121 | 910 | 2,404 | - | 1,020 | 122,455 | |||||||||||||
CRE Owner Occupied | 292,765 | 10,440 | 18,740 | - | 2,378 | 324,323 | |||||||||||||
CRE Non Owner Occupied | 207,745 | 9,077 | 22,615 | - | 90 | 239,527 | |||||||||||||
Agriculture Land | 69,924 | 769 | 1,514 | - | - | 72,207 | |||||||||||||
Other CRE | 31,875 | 891 | 7,222 | - | 978 | 40,966 | |||||||||||||
Total Commercial Real Estate | 602,309 | 21,177 | 50,091 | - | 3,446 | 677,023 | |||||||||||||
Construction | 11,360 | - | 45 | - | 7,891 | 19,296 | |||||||||||||
Commercial Working Capital | 156,433 | 3,587 | 2,449 | - | - | 162,469 | |||||||||||||
Commercial Other | 208,783 | 5,204 | 8,413 | - | - | 222,400 | |||||||||||||
Total Commercial | 365,216 | 8,791 | 10,862 | - | - | 384,869 | |||||||||||||
Home Equity and Home Improvement | - | - | 668 | 64 | 108,462 | 109,194 | |||||||||||||
Consumer Finance | - | - | 70 | - | 15,869 | 15,939 | |||||||||||||
Total Loans | $ | 1,156,998 | $ | 33,406 | $ | 76,005 | $ | 298 | $ | 263,383 | $ | 1,530,090 |
- | ||
As of December 31, 2011, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:(In Thousands)
Category | Pass | Special Mention | Substandard | Doubtful | Not Graded | Total | ||||||||||||||||||
Residential Owner Occupied | $ | 5,496 | $ | 205 | $ | 4,383 | $ | - | $ | 124,720 | $ | 134,804 | ||||||||||||
Residential Non Owner Occupied | 48,653 | 2,965 | 8,408 | - | 9,231 | 69,257 | ||||||||||||||||||
Total Residential Real Estate | 54,149 | 3,170 | 12,791 | - | 133,951 | 204,061 | ||||||||||||||||||
Construction | 13,417 | - | 127 | - | 4,744 | 18,288 | ||||||||||||||||||
Multi-Family | 117,699 | 3,519 | 4,186 | - | 1,111 | 126,515 | ||||||||||||||||||
CRE Owner Occupied | 256,861 | 12,058 | 26,323 | - | 84 | 295,326 | ||||||||||||||||||
CRE Non Owner Occupied | 210,113 | 5,390 | 33,656 | - | 152 | 249,311 | ||||||||||||||||||
Agriculture Land | 66,484 | 1,723 | 2,740 | - | - | 70,947 | ||||||||||||||||||
Other Commercial Real Estate | 21,616 | 2,687 | 10,661 | - | 1,141 | 36,105 | ||||||||||||||||||
Total Commercial Real Estate | 555,074 | 21,858 | 73,380 | - | 1,377 | 651,689 | ||||||||||||||||||
Commercial Working Capital | 125,149 | 6,125 | 6,501 | - | - | 137,775 | ||||||||||||||||||
Commercial Other | 182,964 | 10,328 | 19,165 | - | - | 212,457 | ||||||||||||||||||
Total Commercial | 308,113 | 16,453 | 25,666 | - | - | 350,232 | ||||||||||||||||||
Consumer | - | - | 63 | 10 | 18,837 | 18,910 | ||||||||||||||||||
Home Equity/Home Improvement | - | - | 1,734 | - | 120,928 | 122,662 | ||||||||||||||||||
Total Loans | $ | 1,048,452 | $ | 45,000 | $ | 117,947 | $ | 10 | $ | 280,948 | $ | 1,492,357 |
Certain loans acquired in the Pavilion Bancorp, ComBanc and Genoa acquisitions had evidence that the credit quality of the loan had deteriorated since its origination and in management’s assessment at the acquisition date it was probable that the First Defiance would be unable to collect all contractually required payments due. In accordance with FASB ASC Topic 310 Subtopic 30,Loans and Debt Securities Acquired with Deteriorated Credit Quality, these loans have been recorded based on management’s estimate of the fair value of the loans. Details of these loans are as follows:
Contractual Amount Receivable | Impairment Discount | Recorded Loan Receivable | ||||||||||
(In Thousands) | ||||||||||||
Balance at December 31, 2009 | $ | 5,006 | $ | 1,618 | $ | 3,388 | ||||||
Principal payments received | (1,056 | ) | - | (1,056 | ) | |||||||
Loans charged off | (300 | ) | (300 | ) | - | |||||||
Additional provision for loan loss | (168 | ) | - | (168 | ) | |||||||
Loan accretion recorded | - | (32 | ) | 32 | ||||||||
Balance at December 31, 2010 | 3,482 | 1,286 | 2,196 | |||||||||
Principal payments received | (413 | ) | - | (413 | ) | |||||||
Loans charged off | (250 | ) | (250 | ) | - | |||||||
Additional provision for loan loss | (613 | ) | - | (613 | ) | |||||||
Loan accretion recorded | - | (33 | ) | 33 | ||||||||
Balance at December 31, 2011 | 2,206 | 1,003 | 1,203 | |||||||||
Principal payments received | (697 | ) | - | (697 | ) | |||||||
Loans charged off | (487 | ) | (487 | ) | - | |||||||
Additional provision for loan loss | (167 | ) | - | (167 | ) | |||||||
Loan accretion recorded | - | (173 | ) | 173 | ||||||||
Balance at December 31, 2012 | $ | 855 | $ | 343 | $ | 512 |
Interest income on loans is as follows:
Years Ended December 31 | ||||||||||||
2012 | 2011 | 2010 | ||||||||||
(In Thousands) | ||||||||||||
Commercial and non-residential real-estate loans | $ | 58,389 | $ | 63,229 | $ | 71,547 | ||||||
Residential loans | 7,618 | 7,545 | 7,679 | |||||||||
Other loans | 6,614 | 7,874 | 9,402 | |||||||||
Totals | $ | 72,621 | $ | 78,648 | $ | 88,628 |
First Defiance’s loan portfolio is concentrated geographically in its northwest Ohio market area. Management has also identified lending for income-generating rental properties as an industry concentration. Total loans for income generating property totaled $355.4 million at December 31, 2012, which represents 23% of the Company’s loan portfolio. The Company’s loans receivable are primarily to borrowers in the Northwest Ohio, Northeast Indiana or Southeast Michigan areas.
Contractual Amount Receivable | Impairment Discount | Recorded Loan Receivable | ||||||||
(In Thousands) | ||||||||||
Balance at January 1, 2011 | $ | 3,482 | $ | 1,286 | $ | 2,196 | ||||
Principal payments received | (413) | - | (413) | |||||||
Loans charged off | (250) | (250) | - | |||||||
Additional provision for loan loss | (613) | - | (613) | |||||||
Loan accretion recorded | - | (33) | 33 | |||||||
Balance at December 31, 2011 | 2,206 | 1,003 | 1,203 | |||||||
Principal payments received | (697) | - | (697) | |||||||
Loans charged off | (487) | (487) | - | |||||||
Additional provision for loan loss | (167) | - | (167) | |||||||
Loan accretion recorded | - | (173) | 173 | |||||||
Balance at December 31, 2012 | 855 | 343 | 512 | |||||||
Principal payments received | (108) | - | (108) | |||||||
Loans charged off | (41) | (41) | - | |||||||
Additional provision for loan loss | (203) | - | (203) | |||||||
Loan accretion recorded | - | (29) | 29 | |||||||
Balance at December 31, 2013 | $ | 503 | $ | 273 | $ | 230 |
Years Ended December 31 | ||||||||
2012 | 2011 | |||||||
Beginning balance | $ | 4,775 | $ | 5,109 | ||||
New loans | 5,036 | 5,546 | ||||||
Effect of changes in composition of related parties | (878 | ) | - | |||||
Repayments | (5,444 | ) | (5,880 | ) | ||||
Ending Balance | $ | 3,489 | $ | 4,775 |
Years Ended December 31 | |||||||
2013 | 2012 | ||||||
Beginning balance | $ | 3,489 | $ | 4,775 | |||
New loans | 8,874 | 5,036 | |||||
Effect of changes in composition of related parties | - | (878) | |||||
Repayments | (8,651) | (5,444) | |||||
Ending Balance | $ | 3,712 | $ | 3,489 |
- 98 - | ||
Years Ended December 31 | ||||||||||||
2012 | 2011 | 2010 | ||||||||||
(In Thousands) | ||||||||||||
Gain from sale of mortgage loans | $ | 10,599 | $ | 5,607 | $ | 7,017 | ||||||
Mortgage loan servicing revenue (expense): | ||||||||||||
Mortgage loan servicing revenue | 3,387 | 3,403 | 3,119 | |||||||||
Amortization of mortgage servicing rights | (3,562 | ) | (2,169 | ) | (2,642 | ) | ||||||
Mortgage servicing rights valuation adjustments | (759 | ) | (404 | ) | 353 | |||||||
(934 | ) | 830 | 830 | |||||||||
Net revenue from sale and servicing of mortgage loans | $ | 9,665 | $ | 6,437 | $ | 7,847 |
Years Ended December 31 | ||||||||||
2013 | 2012 | 2011 | ||||||||
(In Thousands) | ||||||||||
Gain from sale of mortgage loans | $ | 5,716 | $ | 10,599 | $ | 5,607 | ||||
Mortgage loan servicing revenue (expense): | ||||||||||
Mortgage loan servicing revenue | 3,564 | 3,387 | 3,403 | |||||||
Amortization of mortgage servicing rights | (2,098) | (3,562) | (2,169) | |||||||
Mortgage servicing rights valuation adjustments | 1,261 | (759) | (404) | |||||||
2,727 | (934) | 830 | ||||||||
Net revenue from sale and servicing of mortgage loans | $ | 8,443 | $ | 9,665 | $ | 6,437 |
2012.
Years Ended December 31 | ||||||||||||
2012 | 2011 | 2010 | ||||||||||
(In Thousands) | ||||||||||||
Mortgage servicing assets: | ||||||||||||
Balance at beginning of period | $ | 10,219 | $ | 10,602 | $ | 10,436 | ||||||
Loans sold, servicing retained | 3,464 | 1,786 | 2,808 | |||||||||
Servicing assets acquired | - | |||||||||||
Amortization | (3,562 | ) | (2,169 | ) | (2,642 | ) | ||||||
Carrying value before valuation allowance at end of period | 10,121 | 10,219 | 10,602 | |||||||||
Valuation allowance: | ||||||||||||
Balance at beginning of period | (1,529 | ) | (1,125 | ) | (1,478 | ) | ||||||
Impairment recovery (charges) | (759 | ) | (404 | ) | 353 | |||||||
Balance at end of period | (2,288 | ) | (1,529 | ) | (1,125 | ) | ||||||
Net carrying value of MSRs at end of period | $ | 7,833 | $ | 8,690 | $ | 9,477 | ||||||
Fair value of MSRs at end of period | $ | 7,833 | $ | 8,690 | $ | 9,477 |
Years Ended December 31 | ||||||||||
2013 | 2012 | 2011 | ||||||||
(In Thousands) | ||||||||||
Mortgage servicing assets: | ||||||||||
Balance at beginning of period | $ | 10,121 | $ | 10,219 | $ | 10,602 | ||||
Loans sold, servicing retained | 2,110 | 3,464 | 1,786 | |||||||
Amortization | (2,098) | (3,562) | (2,169) | |||||||
Carrying value before valuation allowance at end of period | 10,133 | 10,121 | 10,219 | |||||||
Valuation allowance: | ||||||||||
Balance at beginning of period | (2,288) | (1,529) | (1,125) | |||||||
Impairment recovery (charges) | 1,261 | (759) | (404) | |||||||
Balance at end of period | (1,027) | (2,288) | (1,529) | |||||||
Net carrying value of MSRs at end of period | $ | 9,106 | $ | 7,833 | $ | 8,690 | ||||
Fair value of MSRs at end of period | $ | 9,686 | $ | 7,833 | $ | 8,690 |
- 99 - | ||
December 31 | ||||||||||||||||
2012 | 2011 | |||||||||||||||
Number of | Principal | Number of | Principal | |||||||||||||
Investor | Loans | Outstanding | Loans | Outstanding | ||||||||||||
(Dollars in Thousands) | ||||||||||||||||
Fannie Mae | 5,190 | $ | 522,978 | 4,964 | $ | 494,115 | ||||||||||
Freddie Mac | 8,550 | 786,124 | 8,328 | 743,707 | ||||||||||||
Federal Home Loan Bank | 166 | 18,330 | 262 | 31,139 | ||||||||||||
Other | 21 | 1,285 | 22 | 1,426 | ||||||||||||
Totals | 13,927 | $ | 1,328,717 | 13,576 | $ | 1,270,387 |
December 31 | |||||||||||
2013 | 2012 | ||||||||||
Number of | Principal | Number of | Principal | ||||||||
Investor | Loans | Outstanding | Loans | Outstanding | |||||||
(In Thousands) | |||||||||||
Fannie Mae | 5,304 | $ | 527,666 | 5,190 | $ | 522,978 | |||||
Freddie Mac | 8,873 | 829,594 | 8,550 | 786,124 | |||||||
Federal Home Loan Bank | 116 | 12,093 | 166 | 18,330 | |||||||
Other | 26 | 1,888 | 21 | 1,285 | |||||||
Totals | 14,319 | $ | 1,371,241 | 13,927 | $ | 1,328,717 |
a weighted average discount rate of10.04%. Significant assumptions at December 31, 2012 used in determining the value of MSRs include a weighted average prepayment rate of328 PSAand a weighted average discount rate of 10.04%10.04%. Significant assumptions at December 31, 2011 used in determining the value of MSRs include a weighted average prepayment rate of 329 PSA and a weighted average discount rate of 9.03%.
10% Adverse | 20% Adverse | |||||||
Change | Change | |||||||
(Dollars in Thousands) | ||||||||
Assumption: | ||||||||
Decline in fair value from increase in prepayment rate | $ | 349 | $ | 743 | ||||
Declines in fair value from increase in discount rate | 217 | 480 |
10% Adverse | 20% Adverse | ||||
Change | Change | ||||
(In Thousands) | |||||
Assumption: | |||||
Decline in fair value from increase in prepayment rate | $ | 454 | $ | 861 | |
Declines in fair value from increase in discount rate | 318 | 725 |
- 100 - | ||
December 31 | ||||||||
2012 | 2011 | |||||||
(In Thousands) | ||||||||
Cost: | ||||||||
Land | $ | 7,376 | $ | 6,836 | ||||
Land improvements | 1,310 | 1,269 | ||||||
Buildings | 39,691 | 38,529 | ||||||
Leasehold improvements | 435 | 606 | ||||||
Furniture, fixtures and equipment | 27,596 | 26,075 | ||||||
Construction in process | 262 | 946 | ||||||
76,670 | 74,261 | |||||||
Less allowances for depreciation and amortization | 37,007 | 34,216 | ||||||
$ | 39,663 | $ | 40,045 |
December 31 | |||||||
2013 | 2012 | ||||||
(In Thousands) | |||||||
Cost: | |||||||
Land | $ | 7,960 | $ | 7,376 | |||
Land improvements | 1,310 | 1,310 | |||||
Buildings | 39,716 | 39,691 | |||||
Leasehold improvements | 469 | 435 | |||||
Furniture, fixtures and equipment | 28,654 | 27,596 | |||||
Construction in process | 514 | 262 | |||||
78,623 | 76,670 | ||||||
Less allowances for depreciation and amortization | 40,026 | 37,007 | |||||
$ | 38,597 | $ | 39,663 |
2013 | $ | 732 | ||
2014 | 620 | |||
2015 | 611 | |||
2016 | 597 | |||
2017 | 512 | |||
Thereafter | 4,813 | |||
Total | $ | 7,885 |
2014 | $ | 706 | ||
2015 | 613 | |||
2016 | 601 | |||
2017 | 512 | |||
2018 | 471 | |||
Thereafter | 4,745 | |||
Total | $ | 7,648 |
The
December 31 | ||||||||
2012 | 2011 | |||||||
Beginning balance | $ | 61,525 | $ | 57,556 | ||||
Goodwill acquired or adjusted during the year | - | 3,969 | ||||||
Ending balance | $ | 61,525 | $ | 61,525 |
follows(In Thousands):
December 31 | |||||||
2013 | 2012 | ||||||
Beginning balance | $ | 61,525 | $ | 61,525 | |||
Goodwill acquired or adjusted during the year | - | - | |||||
Ending balance | $ | 61,525 | $ | 61,525 |
- 101 - | ||
Gross | ||||||||||||
Carrying | Accumulated | Net | ||||||||||
Amount | Amortization | Value | ||||||||||
(In Thousands) | ||||||||||||
Balance as of January 1, 2010 | $ | 12,102 | $ | (5,214 | ) | $ | 6,888 | |||||
Intangible assets acquired | 735 | - | 735 | |||||||||
Amortization of intangible assets | - | (1,495 | ) | (1,495 | ) | |||||||
Balance as of December 31, 2010 | 12,837 | (6,709 | ) | 6,128 | ||||||||
Intangible assets acquired | 1,465 | - | 1,465 | |||||||||
Amortization of intangible assets | - | (1,442 | ) | (1,442 | ) | |||||||
Balance as of December 31, 2011 | 14,302 | (8,151 | ) | 6,151 | ||||||||
Amortization of intangible assets | - | (1,413 | ) | (1,413 | ) | |||||||
Balance as of December 31, 2012 | $ | 14,302 | $ | (9,564 | ) | $ | 4,738 |
Aggregate amortization expense was $1,413,000, $1,442,000 and $1,495,000 for 2012, 2011 and 2010 respectively.
Gross | ||||||||||
Carrying | Accumulated | Net | ||||||||
Amount | Amortization | Value | ||||||||
(In Thousands) | ||||||||||
Balance as of January 1, 2011 | $ | 12,837 | $ | (6,709) | $ | 6,128 | ||||
Intangible assets acquired | 1,465 | - | 1,465 | |||||||
Amortization of intangible assets | - | (1,442) | (1,442) | |||||||
Balance as of December 31, 2011 | 14,302 | (8,151) | 6,151 | |||||||
Amortization of intangible assets | - | (1,413) | (1,413) | |||||||
Balance as of December 31, 2012 | 14,302 | (9,564) | 4,738 | |||||||
Amortization of intangible assets | - | (1,241) | (1,241) | |||||||
Balance as of December 31, 2013 | $ | 14,302 | $ | (10,805) | $ | 3,497 |
2013 | $ | 1,242 | ||
2014 | 1,102 | |||
2015 | 687 | |||
2016 | 501 | |||
2017 | 372 | |||
Thereafter | 834 | |||
Total | $ | 4,738 |
2014 | $ | 1,102 | ||
2015 | 687 | |||
2016 | 501 | |||
2017 | 372 | |||
2018 | 301 | |||
Thereafter | 534 | |||
Total | $ | 3,497 |
Years Ended December 31 | ||||||||||||
2012 | 2011 | 2010 | ||||||||||
(In Thousands) | ||||||||||||
Checking and money market accounts | $ | 1,368 | $ | 2,144 | $ | 3,117 | ||||||
Savings accounts | 116 | 249 | 362 | |||||||||
Certificates of deposit | 6,685 | 9,782 | 15,743 | |||||||||
Totals | $ | 8,169 | $ | 12,175 | $ | 19,222 |
Years Ended December 31 | ||||||||||
2013 | 2012 | 2011 | ||||||||
(In Thousands) | ||||||||||
Checking and money market accounts | $ | 1,125 | $ | 1,368 | $ | 2,144 | ||||
Savings accounts | 90 | 116 | 249 | |||||||
Certificates of deposit | 4,698 | 6,685 | 9,782 | |||||||
Totals | $ | 5,913 | $ | 8,169 | $ | 12,175 |
2012.
- 102 - | ||
December 31 | ||||||||
2012 | 2011 | |||||||
(In Thousands) | ||||||||
Non-interest bearing checking accounts | $ | 315,132 | $ | 245,927 | ||||
Interest bearing checking and money market accounts | 664,857 | 609,057 | ||||||
Savings deposits | 166,945 | 155,101 | ||||||
Retail certificates of deposit less than $100,000 | 342,472 | 387,607 | ||||||
Retail certificates of deposit greater than $100,000 | 176,029 | 187,913 | ||||||
Brokered or national certificates of deposit | 2,037 | 10,636 | ||||||
$ | 1,667,472 | $ | 1,596,241 |
December 31 | |||||||
2013 | 2012 | ||||||
(In Thousands) | |||||||
Non-interest bearing checking accounts | $ | 348,943 | $ | 315,132 | |||
Interest bearing checking and money market accounts | 715,939 | 664,857 | |||||
Savings deposits | 185,121 | 166,945 | |||||
Retail certificates of deposit less than $100,000 | 313,335 | 342,472 | |||||
Retail certificates of deposit greater than $100,000 | 172,454 | 176,029 | |||||
Brokered or national certificates of deposit | - | 2,037 | |||||
$ | 1,735,792 | $ | 1,667,472 |
2013 | $ | 307,445 | ||
2014 | 173,513 | |||
2015 | 32,376 | |||
2016 | 5,549 | |||
2017 | 987 | |||
2018 and thereafter | 668 | |||
Total | $ | 520,538 |
2014 | $ | 296,186 |
2015 | 87,059 | |
2016 | 51,784 | |
2017 | 8,980 | |
2018 | 41,631 | |
2019 and thereafter | 149 | |
Total | $ | 485,789 |
2013.
- 103 - | ||
Principal Terms | Advance Amount | Range of Maturities | Weighted Average Interest Rate | |||||||
(in Thousands) | ||||||||||
December 31, 2012 | ||||||||||
Short-term borrowings | $ | - | Overnight | 0.00 | % | |||||
Single maturity fixed rate advances | - | N/A | 0.00 | % | ||||||
Putable advances | 12,000 | January 2015 to March 2018 | 2.72 | % | ||||||
Strike-rate advances | - | N/A | 0.00 | % | ||||||
Amortizable mortgage advances | 796 | December 2015 | 4.10 | % | ||||||
$ | 12,796 | |||||||||
December 31, 2011 | ||||||||||
Short-term borrowings | $ | - | Overnight | 0.00 | % | |||||
Single maturity fixed rate advances | 20,000 | January 2013 to October 2013 | 2.79 | % | ||||||
Putable advances | 44,000 | February 2013 to March 2018 | 4.10 | % | ||||||
Strike-rate advances | 17,000 | October 2012 to February 2013 | 3.61 | % | ||||||
Amortizable mortgage advances | 841 | December 2015 | 4.10 | % | ||||||
$ | 81,841 |
In October 2012, the Company executed a balance sheet restructuring strategy to enhance the Company’s current and future profitability while increasing its capital ratios and protecting the balance sheet against rising rates. The strategy required taking an after tax loss of approximately $260,000 through selling $60 million in securities for a gain of $1.6 million and paying off $62 million in FHLB advances with a prepayment penalty of $2.0 million.
Principal Terms | Advance Amount | Range of Maturities | Weighted Average Interest Rate | |||||
(in Thousands) | ||||||||
December 31, 2013 | ||||||||
Putable advances | $ | 12,000 | January 2015 to March 2018 | 2.72 | % | |||
Amortizable mortgage advances | 10,520 | December 2015 to September 2018 | 1.95 | % | ||||
$ | 22,520 | |||||||
December 31, 2012 | ||||||||
Putable advances | $ | 12,000 | January 2015 to March 2018 | 2.72 | % | |||
Amortizable mortgage advances | 796 | December 2015 | 4.10 | % | ||||
$ | 12,796 |
Estimated future minimum payments by fiscal year based on maturity date and current interest rates are as follows (in thousands)(in thousands):
2013 | $ | 410 | ||
2014 | 410 | |||
2015 | 7,852 | |||
2016 | 119 | |||
2017 | 119 | |||
Thereafter | 5,023 | |||
Total minimum payments | 13,933 | |||
Less amounts representing interest | 1,137 | |||
Totals | $ | 12,796 |
2014 | $ | 1,502 | ||
2015 | 8,944 | |||
2016 | 1,212 | |||
2017 | 1,212 | |||
2018 | 11,065 | |||
Total minimum payments | 23,935 | |||
Less amounts representing interest | 1,415 | |||
Totals | $ | 22,520 |
2013 and 2012 respectively.
- 104 - | ||
TheThe Trust Preferred Securities issued by Trust Affiliate I are subject to mandatory redemption, in whole or in part, upon repayment of the Subordinated Debentures. The Company has entered into an agreement that fully and unconditionally guarantees the Trust Preferred Securities subject to the terms of the guarantee.The Trust Preferred Securities and Junior Debentures mature December 15, 2035 but may be redeemed by the issuer at par after October 28, 2010.
December 31 | ||||||||
2012 | 2011 | |||||||
First Defiance Statutory Trust I due December 2035 | $ | 20,619 | $ | 20,619 | ||||
First Defiance Statutory Trust II due June 2037 | 15,464 | 15,464 | ||||||
Total junior subordinated debentures owed to unconsolidated subsidiary Trusts | $ | 36,083 | $ | 36,083 |
follows(In Thousands):
December 31 | |||||||
2013 | 2012 | ||||||
First Defiance Statutory Trust I due December 2035 | $ | 20,619 | $ | 20,619 | |||
First Defiance Statutory Trust II due June 2037 | 15,464 | 15,464 | |||||
Total junior subordinated debentures owed to unconsolidated subsidiary Trusts | $ | 36,083 | $ | 36,083 |
- 105 - | ||
Years Ended December 31 | ||||||||
2012 | 2011 | |||||||
(In Thousands, Except Percentages) | ||||||||
Securities sold under agreement to repurchase | ||||||||
Amounts outstanding at year-end | $ | 51,702 | $ | 60,386 | ||||
Year-end interest rate | 0.63 | % | 0.92 | % | ||||
Average daily balance during year | 53,171 | 56,495 | ||||||
Maximum month-end balance during the year | 57,050 | 61,240 | ||||||
Average interest rate during the year | 0.70 | % | 0.94 | % |
Years Ended December 31 | ||||||||
2013 | 2012 | |||||||
(In Thousands, Except Percentages) | ||||||||
Securities sold under agreement to repurchase | ||||||||
Amounts outstanding at year-end | $ | 51,919 | $ | 51,702 | ||||
Year-end interest rate | 0.31 | % | 0.63 | % | ||||
Average daily balance during year | 50,877 | 53,171 | ||||||
Maximum month-end balance during the year | 57,182 | 57,050 | ||||||
Average interest rate during the year | 0.44 | % | 0.70 | % |
Further, the Company has agreed with its primary regulator not to incur, issue, renew or roll-over any debt, increase any current lines of credit, or guarantee the debt of any entity without the Federal Reserve’s prior approval.
Years Ended December 31 | ||||||||||||
2012 | 2011 | 2010 | ||||||||||
(In Thousands) | ||||||||||||
Legal and other professional fees | $ | 2,571 | $ | 2,473 | $ | 3,045 | ||||||
Marketing | 1,400 | 1,392 | 1,191 | |||||||||
State franchise taxes | 2,495 | 2,010 | 2,088 | |||||||||
REO expenses and write-downs | 1,121 | 2,453 | 4,324 | |||||||||
Printing and office supplies | 527 | 502 | 529 | |||||||||
Amortization of intangibles | 1,413 | 1,442 | 1,495 | |||||||||
Postage | 567 | 674 | 668 | |||||||||
Check charge-offs and fraud losses | 153 | 493 | 407 | |||||||||
Credit and collection expense | 948 | 874 | 1,149 | |||||||||
Other * | 7,090 | 4,318 | 5,378 | |||||||||
Total other non-interest expense | $ | 18,285 | $ | 16,631 | $ | 20,274 |
Years Ended December 31 | ||||||||||
2013 | 2012 | 2011 | ||||||||
(In Thousands) | ||||||||||
Legal and other professional fees | $ | 2,947 | $ | 2,571 | $ | 2,473 | ||||
Marketing | 1,563 | 1,400 | 1,392 | |||||||
State franchise taxes | 2,323 | 2,495 | 2,010 | |||||||
REO expenses and write-downs | 1,584 | 1,121 | 2,453 | |||||||
Printing and office supplies | 449 | 527 | 502 | |||||||
Amortization of intangibles | 1,241 | 1,413 | 1,442 | |||||||
Postage | 531 | 567 | 674 | |||||||
Check charge-offs and fraud losses | 172 | 153 | 493 | |||||||
Credit and collection expense | 915 | 948 | 874 | |||||||
Other * | 5,315 | 7,090 | 4,318 | |||||||
Total other noninterest expense | $ | 17,040 | $ | 18,285 | $ | 16,631 |
- 106 - | ||
December 31 | ||||||||||||
2012 | 2011 | 2010 | ||||||||||
(In Thousands) | ||||||||||||
Unrecognized prior service cost | $ | 30 | $ | 46 | $ | 56 | ||||||
Unrecognized actuarial losses | 858 | 1,041 | 519 | |||||||||
Total recognized in Accumulated Other Comprehensive Income | 888 | 1,087 | 575 | |||||||||
Income tax effect | (311 | ) | (380 | ) | (201 | ) | ||||||
Net amount recognized in Accumulated Other Comprehensive Income | $ | 577 | $ | 707 | $ | 374 |
December 31 | ||||||||||
2013 | 2012 | 2011 | ||||||||
(In Thousands) | ||||||||||
Unrecognized prior service cost | $ | 78 | $ | 30 | $ | 46 | ||||
Unrecognized actuarial losses | 477 | 858 | 1,041 | |||||||
Total recognized in Accumulated Other Comprehensive Income | 555 | 888 | 1,087 | |||||||
Income tax effect | (194) | (311) | (380) | |||||||
Net amount recognized in Accumulated Other Comprehensive Income | $ | 361 | $ | 577 | $ | 707 |
December 31 | ||||||||
2012 | 2011 | |||||||
(In Thousands) | ||||||||
Change in benefit obligation: | ||||||||
Benefit obligation at beginning of year | $ | 3,117 | $ | 2,497 | ||||
Service cost | 88 | 73 | ||||||
Interest cost | 120 | 128 | ||||||
Participant contribution | 16 | 14 | ||||||
Actuarial (gains) / losses | (148 | ) | 537 | |||||
Acquisition | 60 | - | ||||||
Benefits paid | (113 | ) | (132 | ) | ||||
Benefit obligation at end of year | 3,140 | 3,117 | ||||||
Change in fair value of plan assets: | ||||||||
Balance at beginning of year | - | – | ||||||
Employer contribution | 97 | 118 | ||||||
Participant contribution | 16 | 14 | ||||||
Benefits paid | (113 | ) | (132 | ) | ||||
Balance at end of year | - | – | ||||||
Funded status at end of year | $ | (3,140 | ) | $ | (3,117 | ) |
December 31 | |||||||
2013 | 2012 | ||||||
(In Thousands) | |||||||
Change in benefit obligation: | |||||||
Benefit obligation at beginning of year | $ | 3,140 | $ | 3,117 | |||
Service cost | 82 | 88 | |||||
Interest cost | 118 | 120 | |||||
Participant contribution | 25 | 16 | |||||
Actuarial (gains) / losses | (347) | (148) | |||||
Acquisition | - | 60 | |||||
Benefits paid | (139) | (113) | |||||
Benefit obligation at end of year | 2,878 | 3,140 | |||||
Change in fair value of plan assets: | |||||||
Balance at beginning of year | - | - | |||||
Employer contribution | 114 | 97 | |||||
Participant contribution | 25 | 16 | |||||
Benefits paid | (139) | (113) | |||||
Balance at end of year | - | - | |||||
Funded status at end of year | $ | (2,878) | $ | (3,140) |
- 107 - | ||
Years Ended December 31 | ||||||||||||
2012 | 2011 | 2010 | ||||||||||
(In Thousands) | ||||||||||||
Service cost-benefits attributable to service during the period | $ | 88 | $ | 73 | $ | 73 | ||||||
Interest cost on accumulated postretirement benefit obligation | 120 | 128 | 146 | |||||||||
Net amortization and deferral | 51 | 25 | 39 | |||||||||
Net periodic postretirement benefit cost | 259 | 226 | 258 | |||||||||
Net (gain) / loss during the year | (148 | ) | 537 | (349 | ) | |||||||
Amortization of prior service cost and actuarial losses | (51 | ) | (25 | ) | (39 | ) | ||||||
Total recognized in comprehensive income | (199 | ) | 512 | (388 | ) | |||||||
Total recognized in net periodic postretirement benefit cost and other comprehensive income | $ | 60 | $ | 738 | $ | (130 | ) |
Years Ended December 31 | ||||||||||
2013 | 2012 | 2011 | ||||||||
(In Thousands) | ||||||||||
Service cost-benefits attributable to service during the period | $ | 82 | $ | 88 | $ | 73 | ||||
Interest cost on accumulated postretirement benefit obligation | 118 | 120 | 128 | |||||||
Net amortization and deferral | 46 | 51 | 25 | |||||||
Net periodic postretirement benefit cost | 246 | 259 | 226 | |||||||
Net (gain) / loss during the year | (347) | (148) | 537 | |||||||
Impact of prior year acquisition | 60 | - | - | |||||||
Amortization of prior service cost and actuarial losses | (46) | (51) | (25) | |||||||
Total recognized in comprehensive income | (333) | (199) | 512 | |||||||
Total recognized in net periodic postretirement benefit cost and other comprehensive income | $ | (87) | $ | 60 | $ | 738 |
2012 | 2011 | 2010 | ||||||||||
Weighted average discount rates: | ||||||||||||
Used to determine benefit obligations at December 31 | 4.00 | % | 4.25 | % | 5.25 | % | ||||||
Used to determine net periodic postretirement benefit cost for years ended December 31 | 4.25 | % | 5.25 | % | 5.70 | % | ||||||
Assumed health care cost trend rates at December 31: | ||||||||||||
Health care cost trend rate assumed for next year | 8.00 | % | 7.50 | % | 8.00 | % | ||||||
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) | 5.00 | % | 4.00 | % | 4.00 | % | ||||||
Year that rate reaches ultimate trend rate | 2019 | 2019 | 2019 |
2013 | 2012 | 2011 | |||||||
Weighted average discount rates: | |||||||||
Used to determine benefit obligations at December 31 | 4.75 | % | 4.00 | % | 4.25 | % | |||
Used to determine net periodic postretirement benefit cost for years ended December 31 | 4.00 | % | 4.25 | % | 5.25 | % | |||
Assumed health care cost trend rates at December 31: | |||||||||
Health care cost trend rate assumed for next year | 7.50 | % | 8.00 | % | 7.50 | % | |||
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) | 5.00 | % | 5.00 | % | 4.00 | % | |||
Year that rate reaches ultimate trend rate | 2019 | 2019 | 2019 |
Expected to be Paid | ||||
(In Thousands) | ||||
2013 | $ | 120 | ||
2014 | 138 | |||
2015 | 133 | |||
2016 | 145 | |||
2017 | 165 | |||
2018 through 2022 | 905 |
Expected to be Paid | ||||
(In Thousands) | ||||
2014 | $ | 140 | ||
2015 | 128 | |||
2016 | 132 | |||
2017 | 160 | |||
2018 | 153 | |||
2019 through 2023 | 892 |
One-Percentage-Point Increase | One-Percentage-Point Decrease | |||||||||||||||
Year Ended December 31 | Year Ended December 31 | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
(In Thousands) | ||||||||||||||||
Effect on total of service and interest cost | $ | 30 | $ | 27 | $ | (25 | ) | $ | (23 | ) | ||||||
Effect on postretirement benefit obligation | 406 | 431 | (344 | ) | (364 | ) |
One-Percentage-Point Increase | One-Percentage-Point Decrease | ||||||||||||
Year Ended December 31 | Year Ended December 31 | ||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||
(In Thousands) | |||||||||||||
Effect on total of service and interest cost | $ | 28 | $ | 30 | $ | (24) | $ | (25) | |||||
Effect on postretirement benefit obligation | 351 | 406 | (299) | (344) |
2014.
- 108 - | ||
December 31, 2012 | ||||||||||||||||||||||||
Actual | Minimum Required for Adequately Capitalized | Minimum Required for Well Capitalized | ||||||||||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||||||||||
Tier 1 Capital (1) | ||||||||||||||||||||||||
Consolidated | $ | 226,931 | 11.48 | % | $ | 79,056 | 4.0 | % | N/A | N/A | ||||||||||||||
First Federal Bank | $ | 215,432 | 10.92 | % | $ | 78,914 | 4.0 | % | $ | 98,642 | 5.0 | % | ||||||||||||
Tier 1 Capital (to Risk Weighted Assets) (1) | �� | |||||||||||||||||||||||
Consolidated | $ | 226,931 | 13.41 | % | $ | 67,715 | 4.0 | % | N/A | N/A | ||||||||||||||
First Federal Bank | $ | 215,432 | 12.74 | % | $ | 67,632 | 4.0 | % | $ | 101,448 | 6.0 | % | ||||||||||||
Total Capital (to Risk Weighted Assets) (1) | ||||||||||||||||||||||||
Consolidated | $ | 248,161 | 14.66 | % | $ | 135,430 | 8.0 | % | N/A | N/A | ||||||||||||||
First Federal Bank | $ | 236,635 | 14.00 | % | $ | 135,264 | 8.0 | % | $ | 169,080 | 10.0 | % |
December 31, 2013 | ||||||||||||||||||
Actual | Minimum Required for Adequately Capitalized | Minimum Required for Well Capitalized | ||||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||||
Tier 1 Capital (1) | ||||||||||||||||||
Consolidated | $ | 246,258 | 11.86 | % | $ | 83,045 | 4.0 | % | N/A | N/A | ||||||||
First Federal | $ | 235,699 | 11.36 | % | $ | 82,978 | 4.0 | % | $ | 103,722 | 5.0 | % | ||||||
Tier 1 Capital (to Risk Weighted Assets) (1) | ||||||||||||||||||
Consolidated | $ | 246,258 | 13.98 | % | $ | 70,473 | 4.0 | % | N/A | N/A | ||||||||
First Federal | $ | 235,699 | 13.39 | % | $ | 70,418 | 4.0 | % | $ | 105,627 | 6.0 | % | ||||||
Total Capital (to Risk Weighted Assets) (1) | ||||||||||||||||||
Consolidated | $ | 268,317 | 15.23 | % | $ | 140,947 | 8.0 | % | N/A | N/A | ||||||||
First Federal | $ | 257,741 | 14.64 | % | $ | 140,836 | 8.0 | % | $ | 176,046 | 10.0 | % |
(1) | Core capital is computed as a percentage of adjusted total assets of |
December 31, 2011 | ||||||||||||||||||||||||
Actual | Minimum Required for Adequately Capitalized | Minimum Required for Well Capitalized | ||||||||||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||||||||||
Tier 1 Capital (1) | ||||||||||||||||||||||||
Consolidated | $ | 245,458 | 12.30 | % | $ | 79,848 | 4.0 | % | N/A | N/A | ||||||||||||||
First Federal Bank | $ | 231,787 | 11.62 | % | $ | 79,757 | 4.0 | % | $ | 99,697 | 5.0 | % | ||||||||||||
Tier 1 Capital (to Risk Weighted Assets) (1) | ||||||||||||||||||||||||
Consolidated | $ | 245,458 | 14.97 | % | $ | 65,573 | 4.0 | % | N/A | N/A | ||||||||||||||
First Federal Bank | $ | 231,787 | 14.16 | % | $ | 65,492 | 4.0 | % | $ | 98,238 | 6.0 | % | ||||||||||||
Total Capital (to Risk Weighted Assets) (1) | ||||||||||||||||||||||||
Consolidated | $ | 265,949 | 16.22 | % | $ | 131,147 | 8.0 | % | N/A | N/A | ||||||||||||||
First Federal Bank | $ | 252,411 | 15.42 | % | $ | 130,984 | 8.0 | % | $ | 163,730 | 10.0 | % |
December 31, 2012 | ||||||||||||||||||
Actual | Minimum Required for Adequately Capitalized | Minimum Required for Well Capitalized | ||||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||||
Tier 1 Capital (1) | ||||||||||||||||||
Consolidated | $ | 226,931 | 11.48 | % | $ | 79,056 | 4.0 | % | N/A | N/A | ||||||||
First Federal Bank | $ | 215,432 | 10.92 | % | $ | 78,914 | 4.0 | % | $ | 98,642 | 5.0 | % | ||||||
Tier 1 Capital (to Risk Weighted Assets) (1) | ||||||||||||||||||
Consolidated | $ | 226,931 | 13.41 | % | $ | 67,715 | 4.0 | % | N/A | N/A | ||||||||
First Federal Bank | $ | 215,432 | 12.74 | % | $ | 67,632 | 4.0 | % | $ | 101,448 | 6.0 | % | ||||||
Total Capital (to Risk Weighted Assets) (1) | ||||||||||||||||||
Consolidated | $ | 248,161 | 14.66 | % | $ | 135,430 | 8.0 | % | N/A | N/A | ||||||||
First Federal Bank | $ | 236,635 | 14.00 | % | $ | 135,264 | 8.0 | % | $ | 169,080 | 10.0 | % |
(1) | Core capital is computed as a percentage of adjusted total assets of |
2012.
Years Ended December 31 | ||||||||||||
2012 | 2011 | 2010 | ||||||||||
(In Thousands) | ||||||||||||
Current: | ||||||||||||
Federal | $ | 7,862 | $ | 3,714 | $ | 5,372 | ||||||
State and local | (50 | ) | (91 | ) | 50 | |||||||
Deferred | 200 | 3,042 | (2,417 | ) | ||||||||
$ | 8,012 | $ | 6,665 | $ | 3,005 |
Years Ended December 31 | ||||||||||
2013 | 2012 | 2011 | ||||||||
(In Thousands) | ||||||||||
Current: | ||||||||||
Federal | $ | 7,751 | $ | 7,862 | $ | 3,714 | ||||
State and local | 9 | (50) | (91) | |||||||
Deferred | 1,518 | 200 | 3,042 | |||||||
$ | 9,278 | $ | 8,012 | $ | 6,665 |
Years Ended December 31 | ||||||||||||
2012 | 2011 | 2010 | ||||||||||
(In Thousands) | ||||||||||||
Tax expense at statutory rate (35%) | $ | 9,337 | $ | 7,769 | $ | 3,889 | ||||||
Increases (decreases) in taxes from: | ||||||||||||
State income tax – net of federal tax benefit | (32 | ) | (59 | ) | 32 | |||||||
Tax exempt interest income, net of TEFRA | (1,047 | ) | (926 | ) | (745 | ) | ||||||
Bank owned life insurance | (374 | ) | (230 | ) | (278 | ) | ||||||
Stock option expense | 22 | 36 | 54 | |||||||||
Other | 106 | 75 | 53 | |||||||||
Totals | $ | 8,012 | $ | 6,665 | $ | 3,005 |
Years Ended December 31 | ||||||||||
2013 | 2012 | 2011 | ||||||||
(In Thousands) | ||||||||||
Tax expense at statutory rate (35%) | $ | 11,030 | $ | 9,337 | $ | 7,769 | ||||
Increases (decreases) in taxes from: | ||||||||||
State income tax – net of federal tax benefit | 4 | (32) | (59) | |||||||
Tax exempt interest income, net of TEFRA | (1,043) | (1,047) | (926) | |||||||
Bank owned life insurance | (449) | (374) | (230) | |||||||
Stock option expense | 12 | 22 | 36 | |||||||
Captive insurance | (415) | - | - | |||||||
Other | 139 | 106 | 75 | |||||||
Totals | $ | 9,278 | $ | 8,012 | $ | 6,665 |
- 110 - | ||
December 31 | ||||||||
2012 | 2011 | |||||||
(In Thousands) | ||||||||
Deferred federal income tax assets: | ||||||||
Allowance for loan losses | $ | 9,349 | $ | 11,639 | ||||
Postretirement benefit costs | 1,078 | 1,090 | ||||||
Deferred compensation | 1,095 | 910 | ||||||
Impaired loans | 1,531 | 809 | ||||||
Capital loss carry-forward | 596 | 621 | ||||||
Impaired investments | 846 | 872 | ||||||
Accrued vacation | 499 | 521 | ||||||
Allowance for real estate held for sale losses | 484 | 195 | ||||||
Deferred loan origination fees and costs | 251 | 238 | ||||||
Other | 844 | 460 | ||||||
Total deferred federal income tax assets | 16,573 | 17,355 | ||||||
Deferred federal income tax liabilities: | ||||||||
FHLB stock dividends | 3,259 | 3,284 | ||||||
Goodwill | 4,293 | 3,781 | ||||||
Mortgage servicing rights | 2,742 | 3,043 | ||||||
Fixed assets | 1,353 | 1,449 | ||||||
Other intangible assets | 954 | 1,393 | ||||||
Loan mark to market | 766 | 1,062 | ||||||
Net unrealized gains on available-for-sale securities | 2,612 | 2,533 | ||||||
Other | 516 | 384 | ||||||
Total deferred federal income tax liabilities | 16,495 | 16,929 | ||||||
Net deferred federal income tax asset (liability) | $ | 78 | $ | 426 |
December 31 | |||||||
2013 | 2012 | ||||||
(In Thousands) | |||||||
Deferred federal income tax assets: | |||||||
Allowance for loan losses | $ | 8,798 | $ | 9,349 | |||
Postretirement benefit costs | 1,013 | 1,078 | |||||
Deferred compensation | 1,412 | 1,095 | |||||
Impaired loans | 986 | 1,531 | |||||
Capital loss carry-forward | 555 | 596 | |||||
Impaired investments | 971 | 846 | |||||
Accrued vacation | 581 | 499 | |||||
Allowance for real estate held for sale losses | 277 | 484 | |||||
Deferred loan origination fees and costs | 265 | 251 | |||||
Other | 718 | 844 | |||||
Total deferred federal income tax assets | 15,576 | 16,573 | |||||
Deferred federal income tax liabilities: | |||||||
FHLB stock dividends | 3,238 | 3,259 | |||||
Goodwill | 4,586 | 4,293 | |||||
Mortgage servicing rights | 3,211 | 2,742 | |||||
Fixed assets | 1,693 | 1,353 | |||||
Other intangible assets | 607 | 954 | |||||
Loan mark to market | 515 | 766 | |||||
Net unrealized gains on available-for-sale securities | 488 | 2,612 | |||||
Prepaid expenses | 617 | 464 | |||||
Other | 56 | 52 | |||||
Total deferred federal income tax liabilities | 15,011 | 16,495 | |||||
Net deferred federal income tax asset (liability) | $ | 565 | $ | 78 |
2013.
- | ||
Balance at January 1, 2010 | $ | 346 | ||
Additions based on tax positions related to the current year | - | |||
Additions for tax positions of prior years | - | |||
Reductions for tax positions of prior years | - | |||
Reductions due to the statute of limitations | (65 | ) | ||
Settlements | - | |||
Balance at December 31, 2010 | $ | 281 | ||
Balance at January 1, 2011 | $ | 281 | ||
Additions based on tax positions related to the current year | - | |||
Additions for tax positions of prior years | - | |||
Reductions for tax positions of prior years | - | |||
Reductions due to the statute of limitations | (140 | ) | ||
Settlements | - | |||
Balance at December 31, 2011 | $ | 141 | ||
Balance at January 1, 2012 | $ | 141 | ||
Additions based on tax positions related to the current year | - | |||
Additions for tax positions of prior years | - | |||
Reductions for tax positions of prior years | - | |||
Reductions due to the statute of limitations | (76 | ) | ||
Settlements | - | |||
Balance at December 31, 2012 | $ | 65 |
The entire amount of unrecognized tax benefits would affect the Company’s effective tax rate if recognized.
Balance at January 1, 2011 | $ | 281 | ||
Additions based on tax positions related to the current year | - | |||
Additions for tax positions of prior years | - | |||
Reductions for tax positions of prior years | - | |||
Reductions due to the statute of limitations | (140) | |||
Settlements | - | |||
Balance at December 31, 2011 | $ | 141 | ||
Balance at January 1, 2012 | $ | 141 | ||
Additions based on tax positions related to the current year | - | |||
Additions for tax positions of prior years | - | |||
Reductions for tax positions of prior years | - | |||
Reductions due to the statute of limitations | (76) | |||
Settlements | - | |||
Balance at December 31, 2012 | $ | 65 | ||
Balance at January 1, 2013 | $ | 65 | ||
Additions based on tax positions related to the current year | - | |||
Additions for tax positions of prior years | - | |||
Reductions for tax positions of prior years | - | |||
Reductions due to the statute of limitations | (65) | |||
Settlements | - | |||
Balance at December 31, 2013 | $ | - |
zero.
$26,000.
$73,000.
- 112 - | ||
20. Stock In 2013, management changed the discount rate to4.75% to reflect the current interest rate environment which resulted in a reduction of the group life plan liability as of December 31, 2013.
On
On
- 113 - | ||
The fair value of There were no stock options granted was determined using the following weighted-average assumptions as of grant date.
Year Ended December 31 | ||||||||||||
2012 | 2011 | 2010 | ||||||||||
Risk-free interest rate | - | - | 1.57 | % | ||||||||
Expected term | - | - | 7.2 years | |||||||||
Expected stock price volatility | - | - | 44.6 | % | ||||||||
Dividend yield | - | - | 0.00 | % |
in 2013, 2012 or 2011.
- 114 - | ||
Stock options: | Options Outstanding | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value (in 000’s) | ||||||||||||
Options outstanding, January 1, 2012 | 317,800 | $ | 20.35 | |||||||||||||
Forfeited or cancelled | (4,950 | ) | 22.37 | |||||||||||||
Exercised | (500 | ) | 9.22 | |||||||||||||
Granted | - | - | ||||||||||||||
Options outstanding, December 31, 2012 | 312,350 | $ | 20.33 | 3.93 | $ | 746 | ||||||||||
Vested or expected to vest at December 31, 2012 | 312,350 | $ | 20.33 | 3.93 | $ | 746 | ||||||||||
Exercisable at December 31, 2012 | 272,360 | $ | 21.50 | 3.62 | $ | 474 |
Stock options: | Options Outstanding | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value (in 000’s) | |||||||
Options outstanding, January 1, 2013 | 312,350 | $ | 20.33 | ||||||||
Forfeited or cancelled | (22,000) | 22.31 | |||||||||
Exercised | (39,330) | 16.55 | |||||||||
Granted | - | - | |||||||||
Options outstanding, December 31, 2013 | 251,020 | $ | 20.75 | 3.16 | $ | 1,415 | |||||
Vested or expected to vest at December 31, 2013 | 251,020 | $ | 20.75 | 3.16 | $ | 1,415 | |||||
Exercisable at December 31, 2013 | 240,350 | $ | 21.26 | 3.06 | $ | 1,239 |
Year Ended December 31. | ||||||||||||
2012 | 2011 | 2010 | ||||||||||
(in thousands, except per share amounts) | ||||||||||||
Intrinsic value of options exercised | $ | 4 | $ | 1 | $ | 1 | ||||||
Cash received from option exercises | 5 | 11 | 3 | |||||||||
Tax benefit realized from option exercises | - | - | - | |||||||||
Weighted average fair value of options granted | - | - | $ | 4.05 |
Year Ended December 31 | ||||||||||
2013 | 2012 | 2011 | ||||||||
(in thousands, except per share amounts) | ||||||||||
Intrinsic value of options exercised | $ | 310 | $ | 4 | $ | 1 | ||||
Cash received from option exercises | 350 | 5 | 11 | |||||||
Tax benefit realized from option exercises | 54 | - | - | |||||||
Weighted average fair value of options granted | - | - | - |
Restricted Stock Units | Stock Grants | |||||||||||||||
Weighted-Average | Weighted-Average | |||||||||||||||
Grant Date | Grant Date | |||||||||||||||
Unvested Shares | Shares | Fair Value | Shares | Fair Value | ||||||||||||
Unvested at January 1, 2012 | 27,108 | $ | 11.97 | 4,738 | $ | 14.00 | ||||||||||
Granted | 27,714 | 15.86 | 13,044 | 12.76 | ||||||||||||
Vested | (11,157 | ) | 11.97 | (6,522 | ) | 12.76 | ||||||||||
Forfeited | (4,794 | ) | 11.97 | - | - | |||||||||||
Unvested at December 31, 2012 | 38,871 | $ | 14.74 | 11,260 | $ | 13.28 |
LTIPs
.Restricted Stock Units | Stock Grants | ||||||||||
Weighted-Average | Weighted-Average | ||||||||||
Grant Date | Grant Date | ||||||||||
Unvested Shares | Shares | Fair Value | Shares | Fair Value | |||||||
Unvested at January 1, 2013 | 38,871 | $ | 14.74 | 11,260 | $ | 13.28 | |||||
Granted | 91,187 | 19.42 | 20,639 | 15.77 | |||||||
Vested | (20,639) | 15.77 | (31,899) | 14.89 | |||||||
Forfeited | (3,358) | 11.97 | - | - | |||||||
Unvested at December 31, 2013 | 106,061 | $ | 18.66 | - | $ | - |
- 115 - | ||
December 31 | ||||||||
Statements of Financial Condition | 2012 | 2011 | ||||||
(In Thousands) | ||||||||
Assets | ||||||||
Cash and cash equivalents | $ | 8,884 | $ | 11,466 | ||||
Available for Sale Securities | 1,002 | 2,010 | ||||||
Investment in banking subsidiary | 270,444 | 287,823 | ||||||
Investment in non-bank subsidiaries | 13,034 | 12,205 | ||||||
Other assets | 1,766 | 1,783 | ||||||
Total assets | $ | 295,130 | $ | 315,287 | ||||
Liabilities and stockholders’ equity: | ||||||||
Subordinated debentures | $ | 36,083 | $ | 36,083 | ||||
Accrued liabilities | 919 | 1,077 | ||||||
Stockholders’ equity | 258,128 | 278,127 | ||||||
Total liabilities and stockholders’ equity | $ | 295,130 | $ | 315,287 |
Years Ended December 31 | ||||||||||||
Statements of Income | 2012 | 2011 | 2010 | |||||||||
(In Thousands) | ||||||||||||
Dividends from subsidiaries | $ | 37,300 | $ | - | $ | 5,802 | ||||||
Interest on investments | 12 | 8 | - | |||||||||
Interest expense | (971 | ) | (1,278 | ) | (1,315 | ) | ||||||
Other income | - | 1 | - | |||||||||
Noninterest expense | (1,013 | ) | (690 | ) | (857 | ) | ||||||
Income (loss) before income taxes and equity in earnings of subsidiaries | 35,328 | (1,959 | ) | 3,630 | ||||||||
Income tax credit | (669 | ) | (665 | ) | (739 | ) | ||||||
Income (loss) before equity in earnings of subsidiaries | 35,997 | (1,294 | ) | 4,369 | ||||||||
Undistributed equity in (distributions in excess of) earnings of subsidiaries | (17,333 | ) | 16,828 | 3,739 | ||||||||
Net income | $ | 18,664 | $ | 15,534 | $ | 8,108 | ||||||
Comprehensive income | $ | 18,941 | $ | 19,873 | $ | 7,924 | ||||||
December 31 | |||||||
Statements of Financial Condition | 2013 | 2012 | |||||
(In Thousands) | |||||||
Assets | |||||||
Cash and cash equivalents | $ | 8,228 | $ | 8,884 | |||
Available for Sale Securities | - | 1,002 | |||||
Investment in banking subsidiary | 285,813 | 270,444 | |||||
Investment in non-bank subsidiaries | 13,518 | 13,034 | |||||
Other assets | 1,774 | 1,766 | |||||
Total assets | $ | 309,333 | $ | 295,130 | |||
Liabilities and stockholders’ equity: | |||||||
Subordinated debentures | $ | 36,083 | $ | 36,083 | |||
Accrued liabilities | 1,103 | 919 | |||||
Stockholders’ equity | 272,147 | 258,128 | |||||
Total liabilities and stockholders’ equity | $ | 309,333 | $ | 295,130 |
Years Ended December 31 | ||||||||||
Statements of Income | 2013 | 2012 | 2011 | |||||||
(In Thousands) | ||||||||||
Dividends from subsidiaries | $ | 4,500 | $ | 37,300 | $ | - | ||||
Interest on investments | 18 | 12 | 8 | |||||||
Interest expense | (601) | (971) | (1,278) | |||||||
Other income | 1 | - | 1 | |||||||
Noninterest expense | (853) | (1,013) | (690) | |||||||
Income (loss) before income taxes and equity in earnings of subsidiaries | 3,065 | 35,328 | (1,959) | |||||||
Income tax credit | (415) | (669) | (665) | |||||||
Income (loss) before equity in earnings of subsidiaries | 3,480 | 35,997 | (1,294) | |||||||
Undistributed equity in (distributions in excess of) earnings of subsidiaries | 18,755 | (17,333) | 16,828 | |||||||
Net income | $ | 22,235 | $ | 18,664 | $ | 15,534 | ||||
Comprehensive income | $ | 18,506 | $ | 18,941 | $ | 19,873 |
- | ||
Years Ended December 31 | ||||||||||||
Statements of Cash Flows | 2012 | 2011 | 2010 | |||||||||
(In Thousands) | ||||||||||||
Operating activities: | ||||||||||||
Net income | $ | 18,664 | $ | 15,534 | $ | 8,108 | ||||||
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | ||||||||||||
Distribution in excess of (undistributed equity in) earnings of subsidiaries | 17,333 | (16,828 | ) | (3,739 | ) | |||||||
Change in other assets and liabilities | 97 | 109 | (1,045 | ) | ||||||||
Net cash provided by (used in) operating activities | 36,094 | (1,185 | ) | 3,324 | ||||||||
Investing activities: | ||||||||||||
Investment in non-bank subsidiary | (250 | ) | (4,785 | ) | (1,500 | ) | ||||||
Purchase of available-for-sale securities | 0 | (2,000 | ) | - | ||||||||
Sale of available-for-sale securities | 1,000 | - | - | |||||||||
Net cash (used in) provided by investing activities | 750 | (6,785 | ) | (1,500 | ) | |||||||
Financing activities: | ||||||||||||
Stock Options Exercised | 4 | 11 | 3 | |||||||||
Treasury stock purchases | 14 | 29 | - | |||||||||
Cash dividends paid | (3,086 | ) | (2,331 | ) | (1,850 | ) | ||||||
Proceeds from issuance of common stock | - | 19,859 | - | |||||||||
Preferred Stock payoff | (36,358 | ) | - | - | ||||||||
Net cash used in financing activities | (39,426 | ) | 17,567 | (1,847 | ) | |||||||
Net increase (decrease) in cash and cash equivalents | (2,582 | ) | 9,598 | (23 | ) | |||||||
Cash and cash equivalents at beginning of year | 11,466 | 1,868 | 1,891 | |||||||||
Cash and cash equivalents at end of year | $ | 8,884 | $ | 11,466 | $ | 1,868 |
Years Ended December 31 | ||||||||||
Statements of Cash Flows | 2013 | 2012 | 2011 | |||||||
(In Thousands) | ||||||||||
Operating activities: | ||||||||||
Net income | $ | 22,235 | $ | 18,664 | $ | 15,534 | ||||
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | ||||||||||
Distribution in excess of (undistributed equity in) earnings of subsidiaries | (18,755) | 17,333 | (16,828) | |||||||
Change in other assets and liabilities | 176 | 97 | 109 | |||||||
Net cash provided by (used in) operating activities | 3,656 | 36,094 | (1,185) | |||||||
Investing activities: | ||||||||||
Investment in non-bank subsidiary | - | (250) | (4,785) | |||||||
Purchase of available-for-sale securities | - | - | (2,000) | |||||||
Sale of available-for-sale securities | 1,002 | 1,000 | - | |||||||
Net cash (used in) provided by investing activities | 1,002 | 750 | (6,785) | |||||||
Financing activities: | ||||||||||
Repurchase of common stock | (1,821) | - | - | |||||||
Cash dividends paid | (3,907) | (3,086) | (2,331) | |||||||
Stock Options Exercised | 350 | 4 | 11 | |||||||
Treasury stock sales | 64 | 14 | 29 | |||||||
Proceeds from issuance of common stock | - | - | 19,859 | |||||||
Preferred Stock payoff | - | (36,358) | - | |||||||
Net cash used in financing activities | (5,314) | (39,426) | 17,568 | |||||||
Net increase (decrease) in cash and cash equivalents | (656) | (2,582) | 9,598 | |||||||
Cash and cash equivalents at beginning of year | 8,884 | 11,466 | 1,868 | |||||||
Cash and cash equivalents at end of year | $ | 8,228 | $ | 8,884 | $ | 11,466 |
⋅ | Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. |
⋅ | Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, prepayment speeds, credit risks, etc.) or inputs that are derived principally from or corroborated by market data by a correlation or other means. |
⋅ | Level 3: Unobservable inputs for determining fair value of assets and liabilities that reflect an entity’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities. |
7.
- 118 - | ||
- 119 - | ||
December 31, 2012 | Level 1 Inputs | Level 2 Inputs | Level 3 Inputs | Total Fair Value | ||||||||||||
(In Thousands) | ||||||||||||||||
Available for sale securities: | ||||||||||||||||
Obligations of U.S. Government corporations and agencies | $ | - | $ | 11,069 | $ | - | $ | 11,069 | ||||||||
U.S. treasury bonds | 1,002 | 1,002 | ||||||||||||||
Mortgage-backed - residential | - | 31,461 | - | 31,461 | ||||||||||||
Collateralized mortgage obligations | - | 57,466 | - | 57,466 | ||||||||||||
Trust preferred stock | - | - | 1,474 | 1,474 | ||||||||||||
Preferred stock | 134 | - | - | 134 | ||||||||||||
Corporate bonds | - | 8,884 | - | 8,884 | ||||||||||||
Obligations of state and political subdivisions | - | 82,611 | - | 82,611 | ||||||||||||
Mortgage banking derivative - asset | - | 950 | - | 950 | ||||||||||||
Mortgage banking derivative - liability | - | (94 | ) | - | (94 | ) |
December 31, 2013 | Level 1 Inputs | Level 2 Inputs | Level 3 Inputs | Total Fair Value | |||||||||
(In Thousands) | |||||||||||||
Available for sale securities: | |||||||||||||
Obligations of U.S. Government corporations and agencies | $ | - | $ | 4,921 | $ | - | $ | 4,921 | |||||
Mortgage-backed - residential | - | 41,292 | - | 41,292 | |||||||||
Collateralized mortgage obligations | - | 59,841 | - | 59,841 | |||||||||
Trust preferred stock | 1,654 | - | 582 | 2,236 | |||||||||
Preferred stock | 718 | - | - | 718 | |||||||||
Corporate bonds | - | 8,942 | - | 8,942 | |||||||||
Obligations of state and political subdivisions | - | 80,220 | 80,220 | ||||||||||
Mortgage banking derivative - asset | - | 295 | - | 295 | |||||||||
Mortgage banking derivative - liability | - | - | - | - | |||||||||
December 31, 2012 | Level 1 Inputs | Level 2 Inputs | Level 3 Inputs | Total Fair Value | |||||||||
(In Thousands) | |||||||||||||
Available for sale securities: | |||||||||||||
Obligations of U.S. Government corporations and agencies | $ | - | $ | 11,069 | $ | - | $ | 11,069 | |||||
U.S. treasury bonds | - | 1,002 | - | 1,002 | |||||||||
Mortgage-backed - residential | - | 31,461 | - | 31,461 | |||||||||
Collateralized mortgage obligations | - | 57,466 | - | 57,466 | |||||||||
Trust preferred stock | - | - | 1,474 | 1,474 | |||||||||
Preferred stock | 134 | - | - | 134 | |||||||||
Corporate bonds | - | 8,884 | - | 8,884 | |||||||||
Obligations of state and political subdivisions | - | 82,611 | - | 82,611 | |||||||||
Mortgage banking derivative - asset | - | 950 | - | 950 | |||||||||
Mortgage banking derivative - liability | - | (94) | - | (94) |
December 31, 2011 | Level 1 Inputs | Level 2 Inputs | Level 3 Inputs | Total Fair Value | ||||||||||||
(In Thousands) | ||||||||||||||||
Available for sale securities: | ||||||||||||||||
Obligations of U.S. Government corporations and agencies | $ | - | $ | 17,085 | $ | - | $ | 17,085 | ||||||||
U.S. treasury bonds | 2,010 | 2,010 | ||||||||||||||
Mortgage-backed - residential | - | 70,716 | - | 70,716 | ||||||||||||
REMICs | - | 2,894 | - | 2,894 | ||||||||||||
Collateralized mortgage obligations | - | 59,009 | - | 59,009 | ||||||||||||
Trust preferred stock | - | - | 1,342 | 1,342 | ||||||||||||
Preferred stock | 108 | - | - | 108 | ||||||||||||
Corporate bonds | 8,252 | 8,252 | ||||||||||||||
Obligations of state and political subdivisions | - | 71,503 | - | 71,503 | ||||||||||||
Mortgage banking derivative - asset | - | 865 | - | 865 | ||||||||||||
Mortgage banking derivative - liability | (258 | ) | (258 | ) |
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) (In Thousands) | ||||
Beginning balance, January 1, 2012 | $ | 1,342 | ||
Total gains or losses (realized/unrealized) | ||||
Included in earnings (unrealized) | 76 | |||
Included in other comprehensive income (presented gross of taxes) | 322 | |||
Amortization | - | |||
Redemption | (266 | ) | ||
Transfers in and/or out of Level 3 | - | |||
Ending balance, December 31, 2012 | $ | 1,474 |
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) (In Thousands) | ||||
Beginning balance, January 1, 2011 | $ | 1,498 | ||
Total gains or losses (realized/unrealized) | ||||
Included in earnings (unrealized) | (2 | ) | ||
Included in other comprehensive income (presented gross of taxes) | (159 | ) | ||
Amortization | 5 | |||
Transfers in and/or out of Level 3 | - | |||
Ending balance, December 31, 2011 | $ | 1,342 |
Changes in Unrealized Gains/Losses for the Year | ||||||||||||
Relating to Assets Still Held at Reporting | ||||||||||||
Date for the Year Ended December 31 | ||||||||||||
(In Thousands) | ||||||||||||
Trust Preferred Stock | ||||||||||||
2012 | 2011 | 2010 | ||||||||||
Interest income on securities | $ | 160 | $ | 71 | $ | 77 | ||||||
Other changes in fair value | (84 | ) | (73 | ) | (291 | ) | ||||||
Total | $ | 76 | $ | (2 | ) | $ | (214 | ) |
- 120 - | ||
Fair Value Measurements Using Significant | |||||||
Unobservable Inputs (Level 3) | |||||||
(In Thousands) | |||||||
2013 | 2012 | ||||||
Beginning balance | $ | 1,474 | $ | 1,342 | |||
Total gains or losses (realized/unrealized) | |||||||
Included in earnings (realized) | (337) | 76 | |||||
Included in other comprehensive income (presented gross of taxes) | 1,099 | 322 | |||||
Amortization | - | - | |||||
Redemption | - | (266) | |||||
Transfers in and/or out of Level 3 | (1,654) | - | |||||
Ending balance | $ | 582 | $ | 1,474 |
Changes in Unrealized Gains/Losses Recorded in Earnings | ||||||||||
For the Year Relating to Level 3 Assets Still Held at Reporting | ||||||||||
Date for the Year Ended December 31 | ||||||||||
(In Thousands) | ||||||||||
Trust Preferred Stock | ||||||||||
2013 | 2012 | 2011 | ||||||||
Interest income on securities | $ | 83 | $ | 160 | $ | 71 | ||||
Other changes in fair value | (420) | (84) | (73) | |||||||
Total | $ | (337) | $ | 76 | $ | (2) |
- 121 - | ||
December 31, 2013 | Level 1 Inputs | Level 2 Inputs | Level 3 Inputs | Total Fair Value | |||||||||
(In Thousands) | |||||||||||||
Impaired loans | |||||||||||||
1-4 Family Residential Real Estate | $ | - | $ | - | $ | 259 | $ | 259 | |||||
Multi Family Residential | - | - | 338 | 338 | |||||||||
Commercial Real Estate | - | - | 9,590 | 9,590 | |||||||||
Home Equity and Improvement | - | - | 531 | 531 | |||||||||
Total impaired loans | - | - | 10,718 | 10,718 | |||||||||
Mortgage servicing rights | - | 1,370 | - | 1,370 | |||||||||
Real estate held for sale | |||||||||||||
Residential | - | - | 112 | 112 | |||||||||
CRE | - | - | 1,278 | 1,278 | |||||||||
Total Real Estate held for sale | - | - | 1,390 | 1,390 | |||||||||
December 31, 2012 | Level 1 Inputs | Level 2 Inputs | Level 3 Inputs | Total Fair Value | |||||||||
(In Thousands) | |||||||||||||
Impaired loans | |||||||||||||
1-4 FamilyResidential Real Estate | $ | - | $ | - | $ | 599 | $ | 599 | |||||
Multi Family Residential | - | - | 407 | 407 | |||||||||
Commercial Real Estate | - | - | 12,126 | 12,126 | |||||||||
Commercial | - | - | 771 | 771 | |||||||||
Home Equity and Improvement | - | - | 168 | 168 | |||||||||
Total Impaired loans | - | - | 14,071 | 14,071 | |||||||||
Mortgage servicing rights | - | 7,833 | - | 7,833 | |||||||||
Real estate held for sale | |||||||||||||
Residential | - | - | 61 | 61 | |||||||||
CRE | - | - | 385 | 385 | |||||||||
Total Real Estate held for sale | - | - | 446 | 446 |
- 122 - | ||
Fair Value | Valuation Technique | Unobservable Inputs | Range of Inputs | Weighted Average | ||||||||||
(Dollars in Thousands) | ||||||||||||||
Trust preferred stock | $ | 582 | Discounted cash flow | Constant prepayment rate | 2-40 | % | 40 | % | ||||||
Expected asset default | 0-30 | % | 15 | % | ||||||||||
Expected recoveries | 10-15 | % | 10 | % | ||||||||||
Impaired Loans- Applies to all loan classes | $ | 10,718 | Appraisals which utilize sales comparison, net income and cost approach | Discounts for collection issues and changes in market conditions | 0-10 | % | 10 | % | ||||||
Real estate held for sale – Applies to all classes | $ | 1,390 | Appraisals which utilize sales comparison, net income and cost approach | Discounts for changes in market conditions | 0-20 | % | 20 | % |
Fair Value | Valuation Technique | Unobservable Inputs | Range of Inputs | |||||||||
(Dollars in Thousands) | ||||||||||||
Trust preferred stock | $ | 1,474 | Discounted cash flow | Constant prepayment rate | 2-40% | |||||||
Expected asset default | 0-30% | |||||||||||
Expected recoveries | 0-15% | |||||||||||
Impaired Loans- Applies to all loan classes | $ | 14,071 | Appraisals | Discounts for collection issues and changes in market conditions | 0-10% | |||||||
Real estate held for sale – Applies to all classes | $ | 446 | Appraisals | Discounts for changes in market conditions | 0-20% |
The following table summarizes the financial assets measured at fair value on a non-recurring basis segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:
Assets and Liabilities Measured on a Non-Recurring Basis
December 31, 2012 | Level 1 Inputs | Level 2 Inputs | Level 3 Inputs | Total Fair Value | ||||||||||||
(In Thousands) | ||||||||||||||||
Impaired loans | ||||||||||||||||
Residential Loans | $ | - | $ | - | $ | 599 | $ | 599 | ||||||||
Commercial Loans | - | - | 771 | 771 | ||||||||||||
Home Equity Loans | - | - | 168 | 168 | ||||||||||||
Multi Family Loans | - | - | 407 | 407 | ||||||||||||
CRE Loans | - | - | 12,126 | 12,126 | ||||||||||||
Total Impaired loans | - | - | 14,071 | 14,071 | ||||||||||||
Mortgage servicing rights | - | 7,833 | - | 7,833 | ||||||||||||
Real estate held for sale | ||||||||||||||||
Residential | - | - | 61 | 61 | ||||||||||||
CRE | - | - | 385 | 385 | ||||||||||||
Total Real Estate held for sale | - | - | 446 | 446 |
December 31, 2011 | Level 1 Inputs | Level 2 Inputs | Level 3 Inputs | Total Fair Value | ||||||||||||
(In Thousands) | ||||||||||||||||
Impaired loans | ||||||||||||||||
Residential Loans | $ | - | $ | - | $ | 1,092 | $ | 1,092 | ||||||||
Commercial Loans | - | - | 1,268 | 1,268 | ||||||||||||
Multi Family Loans | - | 103 | 103 | |||||||||||||
CRE loans | - | - | 8,449 | 8,449 | ||||||||||||
Total Impaired loans | - | - | 10,912 | 10,912 | ||||||||||||
Mortgage servicing rights | - | 8,690 | - | 8,690 | ||||||||||||
Real estate held for sale | ||||||||||||||||
Residential | - | - | 28 | 28 | ||||||||||||
CRE | - | - | 1,600 | 1,600 | ||||||||||||
Total Real Estate held for sale | - | - | 1,628 | 1,628 |
Fair Value | Valuation Technique | Unobservable Inputs | Range of Inputs | Weighted Average | ||||||||||
(Dollars in Thousands) | ||||||||||||||
Trust preferred stock | $ | 1,474 | Discounted cash flow | Constant prepayment rate | 2-40 | % | 40 | % | ||||||
Expected asset default | 0-30 | % | 15 | % | ||||||||||
Expected recoveries | 10-15 | % | 10 | % | ||||||||||
Impaired Loans- Applies to all loan classes | $ | 14,071 | Appraisals which utilize sales comparison, net income and cost approach | Discounts for collection issues and changes in market conditions | 0-10 | % | 10 | % | ||||||
Real estate held for sale – Applies to all classes | $ | 446 | Appraisals which utilize sales comparison, net income and cost approach | Discounts for changes in market conditions | 0-20 | % | 20 | % |
Impaired loans, which are measured for impairment using the fair value of the collateral for collateral dependent loans, had a fair value of $10.9 million, with a valuation allowance of $7.2 million at December 31, 2011. A provision expense of $5.4 million for the year ended December 31, 2011 was included in earnings.
Mortgage servicing rights that are carried at the lower of cost or fair value had a fair value of $8.7 million at December 31, 2011, resulting in a valuation allowance of $1.5 million. A charge of $404,000 for the year ended December 31, 2011 was included in earnings.
Real estate held for sale is determined using Level 3 inputs which include current and prior appraisals and estimated costs to sell. The change in fair value of real estate held for sale was $1.0 million for the year ended December 31, 2011, which was recorded directly as an adjustment to current earnings through non-interest expense.
- 123 - | ||
The fair value of accrued interest receivable is equal to the carrying amounts resulting in a Level 2 or Level 3 classification, which is consistent with its underlying asset.
value.
Fair Value Measurements at December 31, 2012 (In Thousands) | ||||||||||||||||||||
Carrying Value | Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||
Financial Assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 136,832 | $ | 136,832 | $ | 136,832 | $ | - | $ | - | ||||||||||
Investment securities | 194,609 | 194,617 | 134 | 193,009 | 1,474 | |||||||||||||||
Federal Home Loan Bank Stock | 20,655 | N/A | N/A | N/A | N/A | |||||||||||||||
Loans, net, including loans held for sale | 1,520,610 | 1,543,438 | - | 22,577 | 1,520,861 | |||||||||||||||
Accrued interest receivable | 5,594 | 5,594 | - | 757 | 4,837 | |||||||||||||||
Financial Liabilities: | ||||||||||||||||||||
Deposits | $ | 1,667,472 | $ | 1,671,713 | $ | 315,132 | $ | 1,356,581 | $ | - | ||||||||||
Advances from Federal Home Loan Bank | 12,796 | 13,466 | - | 13,466 | - | |||||||||||||||
Securities sold under repurchase agreements | 51,702 | 51,702 | - | 51,702 | - | |||||||||||||||
Subordinated debentures | 36,083 | 35,766 | - | - | 35,766 |
- 124 - | ||
December 31, 2011 | ||||||||
Carrying | Estimated | |||||||
Value | Fair Values | |||||||
Assets: | ||||||||
Cash and cash equivalents | $ | 174,931 | $ | 174,931 | ||||
Investment securities | 233,580 | 233,591 | ||||||
Federal Home Loan Bank Stock | 20,655 | N/A | ||||||
Loans, net, including loans held for sale | 1,467,663 | 1,494,573 | ||||||
Mortgage banking derivative asset | 865 | 865 | ||||||
Accrued interest receivable | 6,142 | 6,142 | ||||||
1,903,836 | $ | 1,910,102 | ||||||
Other assets | 164,354 | |||||||
Total assets | $ | 2,068,190 | ||||||
Liabilities and stockholders’ equity: | ||||||||
Deposits | $ | 1,596,241 | $ | 1,603,111 | ||||
Advances from Federal Home Loan Bank | 81,841 | 85,196 | ||||||
Securities sold under repurchase agreements | 60,386 | 60,386 | ||||||
Subordinated debentures | 36,083 | 31,814 | ||||||
Accrued interest payable | 446 | 446 | ||||||
Mortgage banking derivative liability | 258 | 258 | ||||||
Advance payments by borrowers for taxes and insurance | 1,402 | 1,402 | ||||||
1,776,399 | $ | 1,782,613 | ||||||
Other liabilities | 13,664 | |||||||
Total liabilities | 1,790,063 | |||||||
Stockholders’ equity | 278,127 | |||||||
Total liabilities and stockholders’ equity | $ | 2,068,190 |
Fair Value Measurements at December 31, 2013 (In Thousands) | ||||||||||||||||
Carrying Value | Total | Level 1 | Level 2 | Level 3 | ||||||||||||
Financial Assets: | ||||||||||||||||
Cash and cash equivalents | $ | 179,318 | $ | 179,318 | $ | 179,318 | $ | - | $ | - | ||||||
Investment securities | 198,557 | 198,563 | 2,372 | 195,609 | 582 | |||||||||||
Federal Home Loan Bank Stock | 19,350 | N/A | N/A | N/A | N/A | |||||||||||
Loans, net, including loans held for sale | 1,564,618 | 1,568,929 | - | 9,140 | 1,559,789 | |||||||||||
Accrued interest receivable | 5,778 | 5,778 | 4 | 696 | 5,078 | |||||||||||
Financial Liabilities: | ||||||||||||||||
Deposits | $ | 1,735,792 | $ | 1,738,216 | $ | 348,943 | $ | 1,389,273 | $ | - | ||||||
Advances from Federal Home Loan Bank | 22,520 | 22,713 | - | 22,713 | - | |||||||||||
Securities sold under repurchase agreements | 51,919 | 51,919 | - | 51,919 | - | |||||||||||
Subordinated debentures | 36,083 | 35,237 | - | - | 35,237 | |||||||||||
Fair Value Measurements at December 31, 2012 (In Thousands) | ||||||||||||||||
Carrying Value | Total | Level 1 | Level 2 | Level 3 | ||||||||||||
Financial Assets: | ||||||||||||||||
Cash and cash equivalents | $ | 136,832 | $ | 136,832 | $ | 136,832 | $ | - | $ | - | ||||||
Investment securities | 194,609 | 194,617 | 134 | 193,009 | 1,474 | |||||||||||
Federal Home Loan Bank Stock | 20,655 | N/A | N/A | N/A | N/A | |||||||||||
Loans, net, including loans held for sale | 1,520,610 | 1,543,438 | - | 22,577 | 1,520,861 | |||||||||||
Accrued interest receivable | 5,594 | 5,594 | - | 757 | 4,837 | |||||||||||
Financial Liabilities: | ||||||||||||||||
Deposits | $ | 1,667,472 | $ | 1,671,713 | $ | 315,132 | $ | 1,356,581 | $ | - | ||||||
Advances from Federal Home Loan Bank | 12,796 | 13,466 | - | 13,466 | - | |||||||||||
Securities sold under repurchase agreements | 51,702 | 51,702 | - | 51,702 | - | |||||||||||
Subordinated debentures | 36,083 | 35,766 | - | - | 35,766 |
- 125 - | ||
December 31, 2012 | December 31, 2011 | |||||||||||||||||||||||
Assets | (Liabilities) | Assets | (Liabilities) | |||||||||||||||||||||
Derivative | Derivative | |||||||||||||||||||||||
Carrying | Carrying | Net Carrying | Carrying | Carrying | Net Carrying | |||||||||||||||||||
Value | Value | Value | Value | Value | Value | |||||||||||||||||||
(In Thousands) | ||||||||||||||||||||||||
Derivatives not designated as hedging instruments | ||||||||||||||||||||||||
Mortgage Banking Derivatives | $ | 950 | $ | (94 | ) | $ | 856 | $ | 865 | $ | (258 | ) | $ | 607 |
December 31, 2013 | December 31, 2012 | ||||||||||||||||||
Assets | (Liabilities) | Assets | (Liabilities) | ||||||||||||||||
Derivative | Derivative | ||||||||||||||||||
Carrying | Carrying | Net Carrying | Carrying | Carrying | Net Carrying | ||||||||||||||
Value | Value | Value | Value | Value | Value | ||||||||||||||
(In Thousands) | |||||||||||||||||||
Derivatives not designated as hedging instruments | |||||||||||||||||||
Mortgage Banking Derivatives | $ | 295 | $ | - | $ | 295 | $ | 950 | $ | (94) | $ | 856 |
Twelve Months Ended December 31, | ||||||||||||
2012 | 2011 | 2010 | ||||||||||
Derivatives not designated as hedging instruments | ||||||||||||
Mortgage Banking Derivatives – Gain (Loss) | $ | 249 | $ | 252 | $ | (115 | ) |
Twelve Months Ended December 31, | ||||||||||
2013 | 2012 | 2011 | ||||||||
(In Thousands) | ||||||||||
Derivatives not designated as hedging instruments | ||||||||||
Mortgage Banking Derivatives – Gain (Loss) | $ | (526) | $ | 249 | $ | 252 |
- 126 - | ||
24.
Three Months Ended | ||||||||||||||||
March 31 | June 30 | September 30 | December 31 | |||||||||||||
2012 | (In Thousands, Except Per Share Amounts) | |||||||||||||||
Interest income | $ | 20,754 | $ | 20,519 | $ | 20,098 | $ | 19,572 | ||||||||
Interest expense | 3,555 | 3,273 | 2,923 | 2,186 | ||||||||||||
Net interest income | 17,199 | 17,246 | 17,175 | 17,386 | ||||||||||||
Provision for loan losses | 3,503 | 4,097 | 705 | 2,619 | ||||||||||||
Net interest income after provision for loan losses | 13,696 | 13,149 | 16,470 | 14,767 | ||||||||||||
Gain on sale, call or write-down of securities | 43 | 382 | 103 | 1,606 | ||||||||||||
Noninterest income | 8,376 | 7,612 | 7,677 | 8,575 | ||||||||||||
Noninterest expense | 16,259 | 15,532 | 16,450 | 17,539 | ||||||||||||
Income before income taxes | 5,856 | 5,611 | 7,800 | 7,409 | ||||||||||||
Income taxes | 1,703 | 1,690 | 2,366 | 2,253 | ||||||||||||
Net income | $ | 4,153 | $ | 3,921 | $ | 5,434 | $ | 5,156 | ||||||||
Dividends declared on Preferred Shares | (462 | ) | (435 | ) | (3 | ) | - | |||||||||
Accretion on Preferred Shares | (46 | ) | (305 | ) | (8 | ) | - | |||||||||
Redemption of Preferred Shares | - | 642 | - | - | ||||||||||||
Net income applicable to common shares | $ | 3,645 | $ | 3,823 | $ | 5,423 | $ | 5,156 | ||||||||
Earnings per common share: | ||||||||||||||||
Basic | $ | 0.37 | $ | 0.39 | $ | 0.56 | $ | 0.53 | ||||||||
Diluted | $ | 0.37 | $ | 0.38 | $ | 0.54 | $ | 0.52 | ||||||||
Average shares outstanding: | ||||||||||||||||
Basic | 9,726 | 9,729 | 9,729 | 9,729 | ||||||||||||
Diluted | 9,970 | 9,985 | 10,000 | 10,012 |
Three Months Ended | ||||||||||||||||
March 31 | June 30 | September 30 | December 31 | |||||||||||||
(In Thousands, Except Per Share Amounts) | ||||||||||||||||
2011 | ||||||||||||||||
Interest income | $ | 22,158 | $ | 21,973 | $ | 21,666 | $ | 21,270 | ||||||||
Interest expense | 4,956 | 4,457 | 4,019 | 3,754 | ||||||||||||
Net interest income | 17,202 | 17,516 | 17,647 | 17,516 | ||||||||||||
Provision for loan losses | 2,833 | 2,405 | 3,097 | 4,099 | ||||||||||||
Net interest income after provision for loan losses | 14,369 | 15,111 | 14,550 | 13,417 | ||||||||||||
Gain on sale, call or write-down of securities | 47 | - | - | 169 | ||||||||||||
Noninterest income | 5,898 | 6,838 | 6,857 | 7,707 | ||||||||||||
Noninterest expense | 16,626 | 15,086 | 15,462 | 15,589 | ||||||||||||
Income before income taxes | 3,688 | 6,863 | 5,945 | 5,704 | ||||||||||||
Income taxes | 1,028 | 2,113 | 1,884 | 1,640 | ||||||||||||
Net income | $ | 2,660 | $ | 4,750 | $ | 4,061 | $ | 4,064 | ||||||||
Dividends declared on Preferred Shares | (462 | ) | (463 | ) | (463 | ) | (462 | ) | ||||||||
Accretion on Preferred Shares | (43 | ) | (44 | ) | (45 | ) | (46 | ) | ||||||||
Net income applicable to common shares | $ | 2,155 | $ | 4,243 | $ | 3,553 | $ | 3,556 | ||||||||
Earnings per common share: | ||||||||||||||||
Basic | $ | 0.25 | $ | 0.44 | $ | 0.37 | $ | 0.37 | ||||||||
Diluted | $ | 0.25 | $ | 0.43 | $ | 0.36 | $ | 0.36 | ||||||||
Average shares outstanding: | ||||||||||||||||
Basic | 8,519 | 9,724 | 9,725 | 9,726 | ||||||||||||
Diluted | 8,671 | 9,902 | 9,895 | 9,908 |
Three Months Ended | |||||||||||||
March 31 | June 30 | September 30 | December 31 | ||||||||||
(In Thousands, Except Per Share Amounts) | |||||||||||||
2013 | |||||||||||||
Interest income | $ | 18,476 | $ | 18,732 | $ | 18,836 | $ | 18,737 | |||||
Interest expense | 1,949 | 1,814 | 1,680 | 1,727 | |||||||||
Net interest income | 16,527 | 16,918 | 17,156 | 17,010 | |||||||||
Provision for loan losses | 425 | 448 | 476 | 475 | |||||||||
Net interest income after provision for loan losses | 16,102 | 16,470 | 16,680 | 16,535 | |||||||||
Gain on sale, call or write-down of securities | 53 | 44 | - | (337) | |||||||||
Noninterest income | 8,909 | 7,804 | 7,289 | 6,808 | |||||||||
Noninterest expense | 17,199 | 15,674 | 16,045 | 15,926 | |||||||||
Income before income taxes | 7,865 | 8,644 | 7,924 | 7,080 | |||||||||
Income taxes | 2,306 | 2,535 | 2,445 | 1,992 | |||||||||
Net income | $ | 5,559 | $ | 6,109 | $ | 5,479 | $ | 5,088 | |||||
Dividends declared on Preferred Shares | - | - | - | - | |||||||||
Accretion on Preferred Shares | - | - | - | - | |||||||||
Net income applicable to common shares | $ | 5,559 | $ | 6,109 | $ | 5,479 | $ | 5,088 | |||||
Earnings per common share: | |||||||||||||
Basic | $ | 0.57 | $ | 0.63 | $ | 0.56 | $ | 0.52 | |||||
Diluted | $ | 0.55 | $ | 0.60 | $ | 0.54 | $ | 0.50 | |||||
Average shares outstanding: | |||||||||||||
Basic | 9,736 | 9,774 | 9,780 | 9,766 | |||||||||
Diluted | 10,105 | 10,156 | 10,212 | 10,198 |
- 127 - | ||
25.
Three Months Ended | |||||||||||||
March 31 | June 30 | September 30 | December 31 | ||||||||||
(In Thousands, Except Per Share Amounts) | |||||||||||||
2012 | |||||||||||||
Interest income | $ | 20,754 | $ | 20,519 | $ | 20,098 | $ | 19,572 | |||||
Interest expense | 3,555 | 3,273 | 2,923 | 2,186 | |||||||||
Net interest income | 17,199 | 17,246 | 17,175 | 17,386 | |||||||||
Provision for loan losses | 3,503 | 4,097 | 705 | 2,619 | |||||||||
Net interest income after provision for loan losses | 13,696 | 13,149 | 16,470 | 14,767 | |||||||||
Gain on sale, call or write-down of securities | 43 | 382 | 103 | 1,606 | |||||||||
Noninterest income | 8,376 | 7,612 | 7,677 | 8,575 | |||||||||
Noninterest expense | 16,259 | 15,532 | 16,450 | 17,539 | |||||||||
Income before income taxes | 5,856 | 5,611 | 7,800 | 7,409 | |||||||||
Income taxes | 1,703 | 1,690 | 2,366 | 2,253 | |||||||||
Net income | $ | 4,153 | $ | 3,921 | $ | 5,434 | $ | 5,156 | |||||
Dividends declared on Preferred Shares | (462) | (435) | (3) | - | |||||||||
Accretion on Preferred Shares | (46) | (305) | (8) | - | |||||||||
Redemption of Preferred Shares | - | 642 | - | - | |||||||||
Net income applicable to common shares | $ | 3,645 | $ | 3,823 | $ | 5,423 | $ | 5,156 | |||||
Earnings per common share: | |||||||||||||
Basic | $ | 0.37 | $ | 0.39 | $ | 0.56 | $ | 0.53 | |||||
Diluted | $ | 0.37 | $ | 0.38 | $ | 0.54 | $ | 0.52 | |||||
Average shares outstanding: | |||||||||||||
Basic | 9,726 | 9,729 | 9,729 | 9,729 | |||||||||
Diluted | 9,970 | 9,985 | 10,000 | 10,012 |
- 128 - | ||
On July 18, 2012, the Company purchased the remaining 1,000 preferred shares at par value to complete the entire repurchase of the 37,000 preferred shares.
The net balance sheet impact was a reduction to stockholders’ equity of $36.4 million which is comprised of a decrease in preferred stock of $37.0 million and a $642,000$642,000 increase to retained earnings related to the discount on the shares repurchased, which is also included in net income applicable to common shares for purposes of calculating earnings per share.
- | ||
Before Tax | Tax Expense | Net of Tax | ||||||||
Amount | (Benefit) | Amount | ||||||||
Twelve months ended December 31, 2013: | (In Thousands) | |||||||||
Securities available for sale and transferred securities: | ||||||||||
Change in net unrealized gain/loss during the period | $ | (6,309) | $ | (2,216) | $ | (4,093) | ||||
Reclassification adjustment for net (gains) losses included in net income | 240 | 92 | 148 | |||||||
Change in postretirement benefit obligation | 333 | 117 | 216 | |||||||
Total other comprehensive income (loss) | $ | (5,736) | $ | (2,007) | $ | (3,729) |
Before Tax | Tax Expense | Net of Tax | ||||||||
Amount | (Benefit) | Amount | ||||||||
Twelve months ended December 31, 2012: | (In Thousands) | |||||||||
Securities available for sale and transferred securities: | ||||||||||
Change in net unrealized gain/loss during the period | $ | 2,360 | $ | 846 | $ | 1,514 | ||||
Reclassification adjustment for net (gains) losses included in net income | (2,134) | (767) | (1,367) | |||||||
Change in postretirement benefit obligation | 199 | 69 | 130 | |||||||
Total other comprehensive income (loss) | $ | 425 | $ | 148 | $ | 277 |
Accumulated | |||||||||||||
Securities | Post- | Other | |||||||||||
Available | retirement | Comprehensive | |||||||||||
For Sale | Benefit | Income | |||||||||||
(In Thousands) | |||||||||||||
Balance January 1, 2013 | $ | 4,851 | $ | (577) | $ | 4,274 | |||||||
Other comprehensive loss before reclassifications | (4,093) | 216 | (3,877) | ||||||||||
Amounts reclassified from accumulated other comprehensive loss | 148 | - | 148 | ||||||||||
Net other comprehensive loss during period | (3,945) | 216 | (3,729) | ||||||||||
Balance December 31, 2013 | $ | 906 | $ | (361) | $ | 545 | |||||||
Balance January 1, 2012 | $ | 4,704 | $ | (707) | $ | 3,997 | |||||||
Other comprehensive loss before reclassifications | 1,514 | 130 | 1,644 | ||||||||||
Amounts reclassified from accumulated other comprehensive loss | (1,367) | - | (1,367) | ||||||||||
Net other comprehensive loss during period | 147 | 130 | 277 | ||||||||||
Balance December 31, 2012 | $ | 4,851 | $ | (577) | $ | 4,274 |
- 130 - | ||
- 131 - | ||
Changes in Internal Control Over Financial Reporting
- | ||
Plan Category | Number of securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights | Weighted Average Exercise Price of Outstanding Options, Warrants and Rights | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) | |||||||||
(a) | (b) | (c) | ||||||||||
Equity Compensation Plans Approved by Security Holders | 312,350 | $ | 20.33 | 294,869 |
Number of Securities | ||||||||
Remaining Available | ||||||||
for Future Issuance | ||||||||
Number of securities to | Under Equity | |||||||
be Issued Upon | Weighted Average | Compensation Plans | ||||||
Exercise of Outstanding | Exercise Price of | (Excluding Securities | ||||||
Options, Warrants and | Outstanding Options, | Reflected in Column | ||||||
Plan Category | Rights | Warrants and Rights | (a)) | |||||
(a) | (b) | (c) | ||||||
Equity Compensation Plans Approved by Security Holders | 251,020 | $ | 20.75 | 202,405 |
- | ||
Item 15. | Exhibits, Financial Statement Schedules |
PART IV
Item 15. Exhibits, Financial Statement Schedules
(a) Financial Statements
(a) | Financial Statements |
(1) | The following documents are filed as Item 8 of this Form 10-K. |
(A) | Report of Independent Registered Public Accounting Firm (Crowe Horwath LLP) |
(B) | Consolidated Statements of Financial Condition as of December 31, |
(C) | Consolidated Statements of Income for the years ended December 31, 2013,2012 |
(D) | Consolidated Statements of Comprehensive Income for the years ended December 31, 2013, 2012 |
(E) | Consolidated Statements of Stockholders’ Equity for the years endedDecember 31, 2013, 2012 |
(F) | Consolidated Statements of Cash Flows for the years ended December 31,2013, 2012 |
(G) | Notes to Consolidated Financial Statements |
(2) |
(3) | The exhibits required by this item are listed in the Exhibit Index of this Form 10-K. The management contracts and compensation plans or arrangements required to be filed |
- | ||
FIRST DEFIANCE FINANCIAL CORP. | |||
February 28, | By: | /s/ | |
Signature | Title | |
/s/ William J. Small | Chairman of the Board | |
William J. Small | ||
/s/ Donald P. Hileman | Executive Vice President and Chief | |
Donald P. Hileman | Executive Officer | |
/s/ Kevin T. Thompson | Executive Vice President and Chief | |
Kevin T. Thompson | Financial Officer (principal accounting officer) | |
/s/ James L. Rohrs | Director, Executive Vice President | |
James L. Rohrs | ||
/s/ Stephen L. Boomer | Director, Vice Chairman | |
Stephen L. Boomer | ||
/s/ John L. Bookmyer | Director | |
John L. Bookmyer | ||
/s/ Dr. Douglas A. Burgei | Director | |
Dr. Douglas A. Burgei | ||
/s/ Peter A. Diehl | Director | |
Peter A. Diehl | ||
/s/ Barb A. Mitzel | Director | |
Barb A. Mitzel | ||
/s/ Jean A. Hubbard | Director | |
Jean A. Hubbard | ||
/s/ Samuel S. Strausbaugh | Director | |
Samuel S. Strausbaugh | ||
/s/ Thomas A. Voigt | Director | |
Thomas A. Voigt |
- | ||
Exhibit | ||||
Number | Description | |||
3.1 | Articles of Incorporation | (1) | ||
3.2 | Code of Regulations | (1) | ||
3.3 | Amendment to Articles of Incorporation | (11) | ||
4.1 | Agreement to furnish instruments and agreements defining rights of holders of long-term debt | (17) | ||
4.2 | Form of Warrant for Purchase of Shares of Common Stock | (15) | ||
10.1 | 1996 Stock Option Plan | (2) | ||
10.2 | Form of Incentive Stock Option Award Agreement under 2001 Plan | (3) | ||
10.3 | Form of Nonqualified Stock Option Award Agreement under 1996 Plan | (3) | ||
10.4 | 1996 Management Recognition Plan and Trust | (8) | ||
10.5 | 2001 Stock Option and Incentive Plan | (5) | ||
10.6 | Employment Agreement with William J. Small | (6) | ||
10.7 | Employment Agreement with James L. Rohrs | (7) | ||
10.8 | Employment Agreement with Donald P. Hileman | (18) | ||
10.9 | Employment Agreement with Gregory R. Allen | (9) | ||
10.10 | 2005 Stock Option and Incentive Plan | (10) | ||
10.11 | Letter Agreement, dated December 5, 2008, between First Defiance and the U.S. Treasury | (12) | ||
10.12 | 2008 Long Term Incentive Compensation Plan (LTIP) | (13) | ||
10.13 | Form of Contingent Award Agreement under LTIP | (14) | ||
10.14 | Form of Stock Option Award Agreement under 2005 Plan | (4) | ||
10.15 | Amendment to all Employment Agreements for CPP | (4) | ||
10.16 | Form of Agreement for CPP Compensation Standards | (21) | ||
10.17 | Form of Option Award Agreement with EESA restriction under 2005 Plan | (21) | ||
10.18 | First Federal Executive Group Life Plan – Post Separation | (19) | ||
10.19 | 2010 Equity Incentive Plan | (20) | ||
10.20 | Underwriting Agreement dated March 23, 2011 | (27) | ||
10.21 | First Defiance Deferred Compensation Plan | (33) | ||
10.22 | Form of Restricted Stock Award Agreement | (22) | ||
10.23 | 2010 Equity Plan Form of Long-Term Incentive Plan Award Agreement | (23) | ||
10.24 | 2010 Equity Plan Form of Short-Term Incentive Plan Award Agreement | (24) | ||
10.25 | 2010 Equity Plan Form of Long-Term Incentive Plan Award Agreement | |||
(with TARP Restrictions) | (25) | |||
10.26 | 2010 Equity Plan Form of Short-Term Incentive Plan Award Agreement | |||
(with TARP Restrictions) | (26) | |||
10.27 | First Amendment to First Defiance Financial Corp. 2010 Equity Incentive Plan | (28) | ||
10.28 | First Defiance Financial Corp. and Affiliates Incentive Compensation Plan | (29) |
Exhibit | ||||
Number | Description | |||
3.1 | Articles of Incorporation | (1) | ||
3.2 | Code of Regulations | (1) | ||
3.3 | Amendment to Articles of Incorporation | (11) | ||
4.1 | Agreement to furnish instruments and agreements definingrights of holders of long-term debt | (17) | ||
4.2 | Form of Warrant for Purchase of Shares of Common Stock | (15) | ||
10.1 | 1996 Stock Option Plan | (2) | ||
10.2 | Form of Incentive Stock Option Award Agreement under 2001 Plan | (3) | ||
10.3 | Form of Nonqualified Stock Option Award Agreement under 1996 Plan | (3) | ||
10.4 | 1996 Management Recognition Plan and Trust | (8) | ||
10.5 | 2001 Stock Option and Incentive Plan | (5) | ||
10.6 | Employment Agreement with William J. Small | (6) | ||
10.7 | Employment Agreement with James L. Rohrs | (7) | ||
10.8 | Employment Agreement with Donald P. Hileman | (18) | ||
10.9 | Employment Agreement with Gregory R. Allen | (9) | ||
10.10 | 2005 Stock Option and Incentive Plan | (10) | ||
10.11 | Letter Agreement, dated December 5, 2008, between First Defiance and the U.S. Treasury | (12) | ||
10.12 | 2008 Long Term Incentive Compensation Plan (LTIP) | (13) | ||
10.13 | Form of Contingent Award Agreement under LTIP | (14) | ||
10.14 | Form of Stock Option Award Agreement under 2005 Plan | (4) | ||
10.15 | Amendment to all Employment Agreements for CPP | (4) | ||
10.16 | Form of Agreement for CPP Compensation Standards | (21) | ||
10.17 | Form of Option Award Agreement with EESA restriction under 2005 Plan | (21) | ||
10.18 | First Federal Executive Group Life Plan – Post Separation | (19) | ||
10.19 | 2010 Equity Incentive Plan | (20) | ||
10.20 | Underwriting Agreement dated March 23, 2011 | (27) | ||
10.21 | First Defiance Deferred Compensation Plan | (33) | ||
10.22 | Form of Restricted Stock Award Agreement | (22) | ||
10.23 | 2010 Equity Plan Form of Long-Term Incentive Plan Award Agreement | (23) | ||
10.24 | 2010 Equity Plan Form of Short-Term Incentive Plan Award Agreement | (24) | ||
10.25 | 2010 Equity Plan Form of Long-Term Incentive Plan Award Agreement(with TARP Restrictions) | (25) | ||
10.26 | 2010 Equity Plan Form of Short-Term Incentive Plan Award Agreement(with TARP Restrictions) | (26) | ||
10.27 | First Amendment to First Defiance Financial Corp. 2010 Equity Incentive Plan | (28) | ||
10.28 | First Defiance Financial Corp. and Affiliates Incentive Compensation Plan | (29) |
- | ||
10.29 | First Defiance Financial Corp. Long-Term Restricted Stock Unit Award Agreement (2012 Long Term Incentive – TARP Applicable) | (30) | ||
10.30 | First Defiance Financial Corp. Long-Term Restricted Stock Unit Award Agreement (2012 Long Term Incentive) | (31) | ||
10.31 | Underwriting Agreement dated June 13, 2012 | (32) | ||
21 | List of Subsidiaries of the Company | (17) | ||
23.1 | Consent of Crowe Horwath LLP | (17) | ||
31.1 | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | (17) | ||
31.2 | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | (17) | ||
32.1 | Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | (17) | ||
32.2 | Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | (17) | ||
99.1 | PEO TARP Capital Purchase Program Certification | (17) | ||
99.2 | PFO TARP Capital Purchase Program Certification | (17) | ||
101* | Interactive data files pursuant to Rule 405 of Regulation S-T: (i) the Consolidated Condensed Balance Sheet, (ii) the Consolidated Condensed Statements of Income, (iii) the Consolidated Condensed Statements of Changes in Equity, (iv) the Consolidated Condensed Statements of Cash Flows, and (v) the Notes to Consolidated Condensed Financial Statements tagged as blocks of text and in detail. | (17) |
10.29 | First Defiance Financial Corp. Long-Term Restricted Stock Unit Award Agreement (2012 Long Term Incentive – TARP Applicable) | (30) | ||
10.30 | First Defiance Financial Corp. Long-Term Restricted Stock Unit Award Agreement (2012 Long Term Incentive) | (31) | ||
10.31 | Underwriting Agreement dated June 13, 2012 | (32) | ||
10.32 | Employment Agreement with Donald P. Hileman | (34) | ||
10.33 | Employment Agreement with Kevin T. Thompson | (35) | ||
10.34 | Form of Restricted Stock Award Agreement | (36) | ||
10.35 | Consulting Agreement with William J. Small | (37) | ||
21 | List of Subsidiaries of the Company | (17) | ||
23.1 | Consent of Crowe Horwath LLP | (17) | ||
31.1 | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | (17) | ||
31.2 | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | (17) | ||
32.1 | Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | (17) | ||
32.2 | Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | (17) | ||
101* | Interactive data files pursuant to Rule 405 of Regulation S-T: (i) the Consolidated Condensed Balance Sheet, (ii) the Consolidated Condensed Statements of Income, (iii) the Consolidated Condensed Statements of Changes in Equity, (iv) the Consolidated Condensed Statements of Cash Flows, and (v) the Notes to Consolidated Condensed Financial Statements tagged as blocks of text and in detail. | (17) |
(1) | Incorporated herein by reference to the like numbered exhibit in the Registrant’s Form S-1 (File No. 33-93354) |
(2) | Incorporated herein by reference to like numbered exhibit in Registrant’s 2001 Form 10-K (Film No. 02580719) |
(3) | Incorporated herein by reference to like numbered exhibit in Registrant’s 2004 Form 10-K (Film No. 0568550) |
(4) | Incorporated herein by reference to like numbered exhibit in Registrant’s 2008 Form 10-K (Film No. 09683948) |
(5) | Incorporated herein by reference to Appendix B to the 2001 Proxy Statement (Film No. 1577137) |
(6) | Incorporated herein by reference to exhibit 10.1 in Form 8-K filed October 1, 2007 (Film No. 071144951) |
(7) | Incorporated herein by reference to exhibit 10.2 in Form 8-K filed October 1, 2007 (Film No. 071144951) |
(8) | Incorporated herein by reference to exhibit 10.2 in Registrant’s 2001 Form 10-K (Film No. 02580719) |
(9) | Incorporated herein by reference to exhibit 10.4 in Form 8-K filed October 1, 2007 (Film No. 071144951) |
(10) | Incorporated herein by reference to Appendix A to the 2005 Proxy Statement (Film No. 05692264) |
(11) | Incorporated herein by reference to exhibit 3 in Form 8-K filed December 8, 2008 (Film No. 081236105) |
(12) | Incorporated herein by reference to exhibit 10 in Form 8-K filed December 8, 2008 (Film No. 081236105) |
(13) | Incorporated herein by reference to exhibit 10.1 in Form 8-K filed December 12, 2008 (Film No. 081245224) |
(14) | Incorporated herein by reference to exhibit 10.2 in Form 8-K filed December 12, 2008 (Film No. 081245224) |
- 137 - | ||
(15) | Incorporated herein by reference to exhibit 4 in Form 8-K filed December 8, 2008 (Film No. 081236105) |
(17) | Included herein |
(18) | Incorporated herein by reference to exhibit 10.1 in Form 8-K filed December 16, 2009 (Film No. 091245196) |
(19) | Incorporated herein by reference to exhibit 10.1 in Form 10-Q filed November 2, 2010 (Film No. 101158262) |
(20) | Incorporated herein by reference to Annex A to 2010 Proxy Statement (Film No. 10693151) |
(21) | Incorporated herein by reference to like numbered exhibit in Registrant’s 2010 Form 10-K (Film No. 10652528) |
(22) | Incorporated herein by reference to exhibit 10.1 in Form 10-Q filed May 5, 2011 (Film No. 11803357) |
(23) | Incorporated herein by reference to exhibit 10.1 in Form 10-Q filed November 8, 2011 (Film No. 111188059) |
(24) | Incorporated herein by reference to exhibit 10.2 in Form 10-Q filed November 8, 2011 (Film No. 111188059) |
(25) | Incorporated herein by reference to exhibit 10.3 in Form 10-Q filed November 8, 2011 (Film No. 111188059) |
(26) | Incorporated herein by reference to exhibit 10.4 in Form 10-Q filed November 8, 2011 (Film No. 111188059) |
(27) | Incorporated herein by reference to exhibit 1 in Form 8-K filed March 29, 2011 (Film No. 11719267) |
(28) | Incorporated herein by reference to exhibit 10.1 in Form 8-K filed March 15, 2012 (Film No. 12694926) |
(29) | Incorporated herein by reference to exhibit 10.2 in Form 8-K filed March 15, 2012 (Film No. 12694926) |
(30) | Incorporated herein by reference to exhibit 10.3 in Form 8-K filed March 15, 2012 (Film No. 12694926) |
(31) | Incorporated herein by reference to exhibit 10.4 in Form 8-K filed March 15, 2012 (Film No. 12694926) |
(32) | Incorporated herein by reference to exhibit 1.1 in Form 8-K filed June 15, 2012 (Film No. 12910514) |
(33) | Incorporated herein by reference to exhibit 10.1 in Form 8-K filed December 23, 2005 (Film No. 051284175) |
(34) | Incorporated herein by reference to exhibit 10.1 in Form 8-K filed December 30, 2013 (Film No. 131303552) |
(35) | Incorporated herein by reference to exhibit 10.2 in Form 8-K filed December 30, 2013 (Film No. 131303552) |
(36) | Incorporated herein by reference to exhibit 10.3 in Form 8-K filed December 30, 2013 (Film No. 131303552) |
(37) | Incorporated herein by reference to exhibit 10.4 in Form 8-K filed December 30, 2013 (Film No. 131303552 |
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