SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
x
2016
¨
VIRGINIA | | | 20-1417448 | | |
| (State or other jurisdiction of | ||||
incorporation or organization) | | | (I.R.S. Employer Identification No.) | |
McLean, Virginia 22101
| Title of each class | | | Name of each exchange on which registered | |
| Common Stock, $0.01 par value | | | Nasdaq Global Market | |
Yes ☒ Yes ☒ ☐ ☐ ☐¨ ☐ Nox¨ ☐ Noxx ☒ No¨.Yesx. Yes ☒ No¨¨12b – 212b-2 of the Exchange Act. (Check one): Large accelerated filer ☐ ¨Accelerated filerxSmaller reporting company ¨ ☐ Accelerated filer ☒ Non-accelerated filer ¨ (Do ☐
(Do not check if a smaller reporting company)
Yes ¨☐ No x
☒
12,318,743.
FORM 10-K
INDEX
| | Page | | |||||
PART I | ||||||||
| | | | 1 | | | ||
| | 24 | | | ||||
| | | 38 | | | |||
| | 38 | | | ||||
| | | 40 | | | |||
| | | 40 | | | |||
PART II | | |||||||
Matters and Issuer Purchases of Equity Securities | | | | 41 | | | ||
| | | 44 | | | |||
| | | 45 | | | |||
| | | | 69 | | | ||
| | | | 70 | | | ||
Accountants on Accounting and Financial Disclosure | | | | | 119 | | | |
| | | 119 | | | |||
| | | 119 | | | |||
PART III | | |||||||
| | | 120 | | | |||
| | | 120 | | | |||
Owners and Management and Related Stockholder Matters | | | | 120 | | | ||
| | | | 120 | | | ||
| | | 120 | | | |||
PART IV | | |||||||
| | | 121 | | |
areas.
The merger with Prince George’s Federal Savings Bank (PGFSB) was completed on August 1, 2014. Southern National acquired PGFSB in a cash and stock transaction. PGFSB was founded in 1931 and iswas headquartered in Upper Marlboro, which is the County Seat of Prince George’s County, Maryland.
Commercial Business Lending
Residential Mortgage Lending
We have a standing Credit Committee comprised of certain officers, each of whom has a defined lending authority in combination with other officers. These individual lending authorities are determined by our Chief Executive Officer and certain directors and are based on the individual’s technical ability and experience. These authorities must be approved by our board of directors and our Credit Committee. Our Credit Committee is comprised of four levels of members: junior, regular, senior, and executive, based on experience. Our executive members are Ms. Derrico and Messrs. Porter and Baker. Mr. Stevens, Chief Risk Officer, must approve risk ratings for loans over $1.5 million, as well as exceptions to the Credit Policy. Loans over a certain size must be approved by the full Board of Directors or the Credit Committee plus two outside directors. Under our loan approval process, the sponsoring loan officer’s approval is required on all credit submissions. This approval must be included in or added to the individual and joining authorities outlined below. The sponsoring loan officer is primarily responsible for the customer’s relationship with us, including, among other things, obtaining and maintaining adequate credit file information. We require each loan officer to maintain loan files in an order and detail that would enable a disinterested third party to review the file and determine the current status and quality of the credit.
Cash Management Services
One control that is typical of Asset Based Lending is that the commercial borrower is required to have its customers remit invoice payments to a bank controlled lockbox. The bank retrieves these payments and the bank applies them directly to any outstanding balance on the line. SABL allows for this and can combine that service with remote capture (Check 21) if warranted.
SUPERVISION AND REGULATION
In addition, and subject to some exceptions, the BHCA and the Change in Bank Control Act, together with their regulations, require FRB approval prior to any person or company acquiring “control” of a bank holding company. Control is conclusively presumed to exist if an individual or company acquires 25% (5% in the case of an acquirer that is a bank holding company) or more of any class of voting securities of the bank holding company. Control is rebuttably presumed to exist if a person acquires 10% or more, of any class of voting securities and either has registered securities under Section 12 of the Exchange Act or no other person owns a greater percentage of that class of voting securities immediately after the transaction. The regulations provide a procedure for challenging this rebuttable control presumption. On September 22, 2008, the FRB issued a policy statement on equity investments in bank holding companies and banks, which allows the FRB to generally be able to conclude that an entity'sentity’s investment is not “controlling” if the entity does not own in excess of 15% of the voting power and 33% of the total equity of the bank holding company or bank. Depending on the nature of the overall investment and the capital structure of the banking organization, based on the policy statement, the FRB will permit noncontrolling investments in the form of voting and nonvoting shares that represent in the aggregate (i) less than one-third of the total equity of the banking organization (and less than one-third of any class of voting securities, assuming conversion of all convertible nonvoting securities held by the entity) and (ii) less than 15% of any class of voting securities of the banking organization.
to 1.35% of total insured deposits.
Regulators may pursue an administrative action against any bank holding company or state member bank which violates the law, engages in an unsafe or unsound banking practice or which is about to engage in an unsafe and unsound banking practice. The administrative action could take the form of a cease and desist proceeding, a removal action against the responsible individuals or, in the case of a violation of law
requirement.
Under the Revised Capital Rules, for most banking organizations, the most common form of Additional Tier 1 capital will be non-cumulative perpetual preferred stock, and the most common form of Tier 2 capital will be subordinated notes and a portion of the allocation for loan losses, in each case, subject to certain specific requirements set forth in the regulation.Underregulation. Under the capital standards that applied prior to January 1, 2015, the effects of accumulated other comprehensive income items included in shareholders’ equity under U.S. GAAP are excluded for the purposes of determining capital ratios. Under the Revised Capital Rules, the effects of certain accumulated other comprehensive items are not excluded. However, the Revised Capital Rules permit most banking organizations to make a one-time election to continue to exclude these items. This election must bewas made when we filefiled the first of certain periodic regulatory reports after January 1, 2015.
deposits.
Further, the Federal Reserve Board permits limited exemptions, upon application, for divestiture of certain “illiquid” covered funds, for an additional period of up to 5 years beyond that date.
Under FRB policy, a bank holding company has historically been required to act as a source of financial strength to each of its banking subsidiaries. As described above in the discussion of “Safety and Soundness” requirements, the Dodd-Frank Act codifies this policy as a statutory requirement. Under this requirement, Southern National is expected to commit resources to support Sonabank, including at times when we may not be in a financial position to provide such resources. Any capital loans by a bank holding company to any of its subsidiary banks are subordinate in right of payment to deposits and to certain other indebtedness of such subsidiary banks. As discussed below, a bank holding company, in certain circumstances, could be required to guarantee the capital plan of an undercapitalized banking subsidiary.
Audit Reports. Insured institutions with total assets of $500 million or more must submit annual audit reports prepared by independent auditors to federal and state regulators. In some instances, the audit report of the institution’s holding company can be used to satisfy this requirement. Auditors must receive examination reports, supervisory agreements and reports of enforcement actions. For institutions with total assets of $1 billion or more, financial statements prepared in accordance with generally accepted accounting principles, management’s certifications concerning responsibility for the financial statements, internal controls and compliance with legal requirements designated by the FDIC, and an attestation by the auditor regarding the statements of management relating to the internal controls must be submitted. For institutions with total assets of more than $3 billion, independent auditors may be required to review quarterly financial statements. The FDICIA requires that independent audit committees be formed, consisting of outside directors only. The committees of such institutions must include members with experience in banking or financial management, must have access to outside counsel, and must not include representatives of large customers.
Virginia Code Sections 13.1-725 – 727.1 govern “Affiliated Transactions.” These provisions, with several exceptions discussed below, require approval by the holders of at least two-thirds of the remaining voting shares of material acquisition transactions between a Virginia corporation and any holder of more than 10% of any class of its outstanding voting shares. Affiliated Transactions include mergers, share exchanges, material dispositions of corporate assets not in the ordinary course of business, any dissolution of the corporation proposed by or on behalf of an interested shareholder, or any reclassification, including a reverse stock split, recapitalization, or merger of the corporation with its subsidiaries which increases the percentage of voting shares owned beneficially by any 10% shareholder by more than 5%.
Concentrated Commercial Real Estate Lending Regulations.In 2006, the federal banking agencies, including the FRB, promulgated guidance governing financial institutions with concentrations in commercial real estate lending. The guidance sets forth parameters for risk management practices that are consistent with the level and nature of a financial institution’s commercial real estate lending portfolio. The guidance provides that a bank has a concentration in commercial real estate lending if (i) total reported loans for construction, land development, and other land represent 100% or more of total capital or
The GLBA and federal bank regulators have made various changes to the CRA. Among other changes,
Fair Lending; Consumer Laws. In addition to the CRA, other federal and state laws regulate various lending and consumer aspects of the banking business. Governmental agencies, including the Department of Housing and Urban Development, the Federal Trade Commission and the Department of Justice, have become concerned that prospective borrowers experience discrimination in their efforts to obtain loans from depository and other lending institutions. These agencies have brought litigation against depository institutions alleging discrimination against borrowers. Many of these suits have been settled, in some cases for material sums, short of a full trial.
Many of the foregoing laws and regulations are subject to change resulting from the provisions in the Dodd-Frank Act, which in many cases calls for revisions to implementing regulations.
Reflecting the Bureau’s focus on the residential mortgage lending market, the Bureau has also issued rules to implement requirements of the Dodd-Frank Act pertaining to mortgage loan origination (including with respect to loan originator compensation and loan originator qualifications) and has finalized integrated mortgage disclosure rules that replace and combine certain requirements under the Truth in Lending Act and the Real Estate Settlement Procedures Act. In addition, the Bureau has issued rules that require servicers to comply with new standards and practices with regard to: error correction; information disclosure; force-placement of insurance; information management policies and procedures; requiring information about mortgage loss mitigation options be provided to delinquent borrowers; providing delinquent borrowers access to servicer personnel with continuity of contact about the borrower’s mortgage loan account; and evaluating borrowers’ applications for available loss mitigation options. These rules also address initial rate adjustment notices for adjustable-rate mortgages (ARMs), periodic statements for residential mortgage loans, and prompt crediting of mortgage payments and response to requests for payoff amounts. The Bureau has indicated that it expects to issue additional mortgage-related rules in the future.
The FRB will review, as part of the regular, risk-focused examination process, the incentive compensation arrangements of banking organizations, such as us, that are not "large,“large, complex banking organizations."” These reviews will be tailored to each organization based on the scope and complexity of the organization’s activities and the prevalence of incentive compensation arrangements. The findings of the supervisory initiatives will be included in reports of examination. Deficiencies will be incorporated into the organization’s supervisory ratings, which can affect the organization’s ability to make acquisitions and take other actions. Enforcement actions may be taken against a banking organization if its incentive compensation arrangements, or related risk-management control or governance processes, pose a risk to the organization’s safety and soundness and the organization is not taking prompt and effective measures to correct the deficiencies.
Although economic conditions have generally improved nationally and locally in our markets, financial institutions continue to be affected by real estate market conditions that have negatively impacted the credit performance of mortgage, construction and commercial real estate loans and have resulted in significant write-downs of assets by many financial institutions. Concerns over the stability
If the growth of the U.S. economy slows or if the economy worsens or enters into another recession,our losses could exceed that which is provided for in our allowance for loan losses and result in the following consequences:
Our access to funding sources in amounts adequate to finance our activities or on terms which are acceptable to us could be impaired by factors that affect us specifically or the financial services industry or economy in general, including a decrease in the level of our business activity as a result of a downturn in the markets in which our loans are concentrated or adverse regulatory action against us. Our ability to borrow could also be impaired by factors that are not specific to us, such as a disruption in the financial markets or negative views and expectations about the prospects for the financial services industry. To the extent we are not successful in obtaining such funding, we will be unable to implement our strategy as planned which could have a material adverse effect on our financial condition, results of operations and cash flows.
The failuresoundness of other financial institutions could adversely affect us.
Our ability to engage in routine funding transactions could be adversely affected by the actions and potential failures of other financial institutions.
Although economic and market conditions remainare stable, and our nonperforming assets have improved, we may incur losses if there is an increase in nonperforming assets in the future. Our nonperforming assets adversely affect our net income in various ways. We do not record interest income on nonaccrual loans or OREO, thereby adversely affecting our net interest income, and increasing loan administration costs. When we take collateral in foreclosures and similar proceedings, we are required to mark the related loan to the then fair value of the collateral, which may ultimately result in a loss. We must reserve for probable losses, which is established through a current period charge to the provision for loan losses as well as from time to time, as appropriate, write down the value of properties in our OREO portfolio to reflect changing market values. Additionally, there are legal fees associated the resolution of problem assets as well as carrying costs
We are subject to risks related to our concentration of construction and land development and commercial real estate loans.
eliminated.
If our assumptions related to the timing or amount of expected losses are incorrect, there could be a negative impact on our operating results. Increases in the amount of future losses in response to different economic conditions or adverse developments in the acquired loan portfolio may result in increased credit loss provisions. Changes in our estimate of the timing of those losses, specifically if those losses are to occur beyond the applicable loss-sharing periods, may result in impairments of the FDIC indemnification asset.
The federal government presently guarantees up to75%to 75% of the principal amount of loans above $150,000 and up to 90% of the principal amount for certain programs under the 7(a) program. SBAExpress loans can be guaranteed by the federal government up to 50%. We can provide no assurance that the federal government will maintain the SBA program, or if it does, that such guaranteed portion will remain at its current funding level. Furthermore, it is possible that Sonabank could lose its preferred lender status which, subject to certain limitations, allows it to approve and fund SBA loans without the necessity of having the loan approved in advance by the SBA. It is also possible the federal government could reduce the amount of loans which it guarantees. In addition, we are dependent on the expertise of our personnel who make SBA loans in order to continue to originate and service SBA loans. If we are unable to retain qualified employees in the future, our income from the origination of SBA loans could be substantially reduced.
If our allowance for loan losses is not adequate to cover actual loan losses, our earnings will decrease.
We
Future growth or operating results may require us to raise additional capital, but that capital may not be available, be available on unfavorable terms or may be dilutive.
A
Our profitability depends significantly on local economic conditions in the areas where our operations and loans are concentrated.
We are heavily regulated by federal and state agencies; changes in laws and regulations or failures to comply with such laws and regulations may adversely affect our operations and our financial results.
Many factors affect the calculation of Sonabank’s risk-based assets and its ability to maintain the level of capital required to achieve acceptable capital ratios. For example, changes in risk weightings of assets relative to capital and other factors may combine to increase the amount of risk-weighted assets in the Tier 1 risk-based capital ratio and the total risk-based capital ratio. Any increases in its risk-weighted assets will require a corresponding increase in its capital to maintain the applicable ratios. In addition, recognized loan losses in excess of amounts reserved for such losses, loan impairments, impairment losses on securities and other factors will decrease Sonabank’s capital, thereby reducing the level of the applicable ratios.
Any individual, acting alone or with other individuals, who are seeking to acquire, directly or indirectly, 10.0% or more of our outstanding common stock must comply with the Change in Bank Control Act, which requires prior notice to the Federal Reserve for any acquisition. Additionally, any entity that wants to acquire 5.0% or more of our outstanding common stock, or otherwise control us, may need to obtain the prior approval of the Federal Reserve under the BHCA of 1956, as amended. As a result, prospective investors in our common stock need to be aware of and comply with those requirements, to the extent applicable.
The Bureau recently issued “ability-to-repay” and “qualified mortgage” rules that may have a negative impact on our loan origination process and foreclosure proceedings, which could adversely affect our business, operating results and financial condition.
We face significant cyber and data security risk that could result in the disclosure of confidential information, adversely affect our business or reputation and expose us to significant liabilities.
risk.
Item 2. – Properties
Date Opened | Owned or | Deposits | ||||||
Location | or Acquired | Leased | (in thousands) | |||||
Home Office and Branch: | ||||||||
6830 Old Dominion Drive | December 2006 | Leased | $ | 48,628 | ||||
McLean, Virginia 22101 | ||||||||
Branch Offices: | ||||||||
511 Main Street | December 2005 | Owned | $ | 46,119 | ||||
Clifton Forge, Virginia 24442 | ||||||||
1770 Timberwood Boulevard | April 2005 | Leased | $ | 44,738 | ||||
Charlottesville, Virginia 22911 | ||||||||
11527 Sunrise Valley Drive | December 2006 | Leased | $ | 32,688 | ||||
Reston, Virginia 20191 | ||||||||
10855 Fairfax Boulevard | December 2006 | Leased | $ | 31,782 | ||||
Fairfax, Virginia 22030 | ||||||||
550 Broadview Avenue | April 2007 | Leased | $ | 32,035 | ||||
Warrenton, Virginia 20186 | ||||||||
1 East Market Street | April 2008 | Leased | $ | 18,874 | ||||
Leesburg, Virginia 20176 | ||||||||
11 Main Street | September 2009 | Leased | $ | 26,774 | ||||
Warrenton, Virginia 20186 | ||||||||
11200 Rockville Pike | December 2009 | Leased | $ | 72,950 | ||||
Rockville, Maryland 20852 | ||||||||
1 South Front Royal Avenue | December 2009 | Owned | $ | 42,612 | ||||
Front Royal, Virginia 22630 | ||||||||
9484 Congress Street | December 2009 | Owned | $ | 42,270 | ||||
New Market, Virginia 22844 |
Location | | | Date Opened or Acquired | | | Owned or Leased | | | Deposits (in thousands) | | |||
Home Office and Branch: | | | | | | | | | | | | | |
6830 Old Dominion Drive McLean, Virginia 22101 | | | December 2006 | | | Leased | | | | $ | 60,087 | | |
Branch Offices: | | | | | | | | | | | | | |
511 Main Street Clifton Forge, Virginia 24442 | | | December 2005 | | | Owned | | | | $ | 51,524 | | |
1770 Timberwood Boulevard Charlottesville, Virginia 22911 | | | April 2005 | | | Leased | | | | $ | 39,749 | | |
11527 Sunrise Valley Drive Reston, Virginia 20191 | | | December 2006 | | | Leased | | | | $ | 50,684 | | |
10855 Fairfax Boulevard Fairfax, Virginia 22030 | | | December 2006 | | | Leased | | | | $ | 45,483 | | |
Location | | | Date Opened or Acquired | | | Owned or Leased | | | Deposits (in thousands) | | |||
550 Broadview Avenue Warrenton, Virginia 20186 | | | April 2007 | | | Leased | | | | $ | 29,513 | | |
1 East Market Street Leesburg, Virginia 20176 | | | April 2008 | | | Leased | | | | $ | 24,042 | | |
11 Main Street Warrenton, Virginia 20186 | | | September 2009 | | | Leased | | | | $ | 29,384 | | |
11200 Rockville Pike Rockville, Maryland 20852 | | | December 2009 | | | Leased | | | | $ | 81,389 | | |
1 South Front Royal Avenue Front Royal, Virginia 22630 | | | December 2009 | | | Owned | | | | $ | 43,786 | | |
9484 Congress Street New Market, Virginia 22844 | | | December 2009 | | | Owned | | | | $ | 45,273 | | |
43086 Peacock Market Plaza South Riding, Virginia 20152 | | | December 2009 | | | Leased | | | | $ | 22,861 | | |
10 West Washington Street Middleburg, Virginia 20117 | | | May 2011 | | | Leased | | | | $ | 15,790 | | |
13804 Hull Street Road Midlothian, Virginia 23112 | | | October 2011 | | | Owned | | | | $ | 37,976 | | |
9707 Medical Center Drive, Suite 150 Rockville, Maryland 20850 | | | April 2012 | | | Leased | | | | $ | 50,092 | | |
37 North Market Street Frederick, Maryland 21701 | | | April 2012 | | | Leased | | | | $ | 33,347 | | |
6719 Leaberry Way Haymarket, Virginia 20169 | | | August 2012 | | | Leased | | | | $ | 14,468 | | |
7700 Wisconsin Avenue Bethesda, Maryland 22101 | | | October 2012 | | | Leased | | | | $ | 35,509 | | |
4009 Old Town Road Huntingtown, Maryland 20639 | | | August 2014 | | | Leased | | | | $ | 18,789 | | |
137 E. Chesapeake Beach Road Owings, Maryland 20736 | | | August 2014 | | | Owned | | | | $ | 19,167 | | |
14804 Pratt Street Upper Marlboro, Maryland 200772 | | | August 2014 | | | Owned | | | | $ | 69,762 | | |
14118 Brandywine Road Brandywine, Maryland 20613 | | | August 2014 | | | Owned | | | | $ | 13,612 | | |
Loan Production Offices: | | | | | | | | | | | | | |
230 Court Square Charlottesville, Virginia 22902 | | | March 2005 | | | Leased | | | | | NA | | |
2217 Princess Anne Street Fredericksburg, Virginia 22401 | | | April 2005 | | | Leased | | | | | NA | | |
550 Broadview Avenue Warrenton, Virginia 20186 | | | September 2005 | | | Leased | | | | | NA | | |
Location |
Date Opened | Owned or | Deposits | ||||||
Location | or Acquired | Leased | (in thousands) | |||||
43086 Peacock Market Plaza | December 2009 | Leased | $ | 22,329 | ||||
South Riding, Virginia 20152 | ||||||||
10 West Washington Street | May 2011 | Leased | $ | 16,471 | ||||
Middleburg, Virginia 20117 | ||||||||
13804 Hull Street Road | October 2011 | Owned | $ | 40,223 | ||||
Midlothian, Virginia 23112 | ||||||||
9707 Medical Center Drive, Suite 150 | April 2012 | Leased | $ | 49,409 | ||||
Rockville, Maryland 20850 | ||||||||
37 North Market Street | April 2012 | Leased | $ | 31,462 | ||||
Frederick, Maryland 21701 | ||||||||
6719 Leaberry Way | August 2012 | Leased | $ | 10,619 | ||||
Haymarket, Virginia 20169 | ||||||||
7700 Wisconsin Avenue | October 2012 | Leased | $ | 38,495 | ||||
Bethesda, Maryland 22101 | ||||||||
4009 Old Town Road | August 2014 | Leased | $ | 14,016 | ||||
Huntingtown, Maryland 20639 | ||||||||
137 E. Chesapeake Beach Road | August 2014 | Owned | $ | 12,937 | ||||
Owings, Maryland 20736 | ||||||||
14804 Pratt Street | August 2014 | Owned | $ | 62,176 | ||||
Upper Marlboro, Maryland 200772 | ||||||||
14118 Brandywine Road | August 2014 | Owned | $ | 10,260 | ||||
Brandywine, Maryland 20613 |
| Date Opened or Acquired | | | Owned or | |||||||||
Leased | | | Deposits (in thousands) | ||||||||||
| |||||||||||||
Accounting Office: | | | | | | | | | | | | | |
70 Main Street, Suite 34 Warrenton, Virginia 20186 | | | December 2014 | | | Leased | | | | | NA | ||
| |||||||||||||
Executive Offices: | | | | | | | | | | | | | |
1002 Wisconsin Avenue, N.W. Washington, D.C. 20007 | | | April 2005 | | | Leased | | | | | NA | ||
|
2016.
Disclosures
Southern National’s common stock is traded on the Nasdaq Global Market under the symbol “SONA”. Our common stock began trading on the Nasdaq Capital Market in November 2006, and the exchange listing was upgraded to the Nasdaq Global Market at the open of trading on December 18, 2007.
Market Values | Dividends Declared | |||||||||||||||||||||||
2015 | 2014 | 2015 (1) | 2014 (2) | |||||||||||||||||||||
High | Low | High | Low | |||||||||||||||||||||
First Quarter | $ | 12.50 | $ | 10.80 | $ | 10.24 | $ | 9.81 | $ | 0.08 | $ | 0.07 | ||||||||||||
Second Quarter | 12.22 | 11.03 | 11.70 | 10.05 | $ | 0.08 | $ | 0.07 | ||||||||||||||||
Third Quarter | 12.00 | 10.98 | 11.70 | 10.37 | $ | 0.08 | $ | 0.08 | ||||||||||||||||
Fourth Quarter | 13.54 | 11.14 | 13.13 | 10.98 | $ | 0.28 | $ | 0.38 |
2015:
| | | Market Values | | | Dividends Declared | | ||||||||||||||||||||||||||||||
| | | 2016 | | | 2015 | | | 2016 | | | 2015(1) | | ||||||||||||||||||||||||
| | | High | | | Low | | | High | | | Low | | | | | | | | | | | | | | ||||||||||||
First Quarter | | | | $ | 13.40 | | | | | $ | 11.92 | | | | | $ | 12.50 | | | | | $ | 10.80 | | | | | $ | 0.08 | | | | | $ | 0.08 | | |
Second Quarter | | | | | 12.77 | | | | | | 11.60 | | | | | | 12.22 | | | | | | 11.03 | | | | | | 0.08 | | | | | | 0.08 | | |
Third Quarter | | | | | 13.59 | | | | | | 11.95 | | | | | | 12.00 | | | | | | 10.98 | | | | | | 0.08 | | | | | | 0.08 | | |
Fourth Quarter | | | | | 16.78 | | | | | | 12.74 | | | | | | 13.54 | | | | | | 11.14 | | | | | | 0.08 | | | | | | 0.28 | | |
(2) The dividend declared in the fourth quarter of 2014 included a special dividend of $0.30.
None
Number of securities | ||||||||||||
remaining available for | ||||||||||||
Number of securities | Weighted average | future issuance under | ||||||||||
to be issued upon exercise | exercise price of | equity compensation plans | ||||||||||
of outstanding options, | outstanding options, | (excluding securities reflected | ||||||||||
warrants and rights | warrants and rights | in column A) | ||||||||||
Plan category | A | B | C | |||||||||
Equity compensation plans approved by security holders | 664,400 | $ | 9.00 | 163,650 | ||||||||
Equity compensation plans not approved by security holders | - | - | - | |||||||||
Total | 664,400 | $ | 9.00 | 163,650 |
Plan category | | | Number of securities to be issued upon exercise of outstanding options, warrants and rights A | | | Weighted average exercise price of outstanding options, warrants and rights B | | | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column A) C | | |||||||||
Equity compensation plans approved by security holders | | | | | 782,200 | | | | | $ | 9.56 | | | | | | 27,650 | | |
Equity compensation plans not approved by security holders | | | | | — | | | | | | — | | | | | | — | | |
Total | | | | | 782,200 | | | | | $ | 9.56 | | | | | | 27,650 | | |
|
2010 | 2011 | 2012 | 2013 | 2014 | 2015 | |||||||||||||||||||
Southern National Bancorp of Virginia | 100.0 | 84.7 | 116.6 | 147.1 | 175.8 | 211.8 | ||||||||||||||||||
Russell 2000 | 100.0 | 121.6 | 141.4 | 196.3 | 206.0 | 196.9 | ||||||||||||||||||
SNL Bank and Thrift Index | 100.0 | 86.8 | 116.6 | 159.6 | 178.2 | 181.8 |
| | | 2011 | | | 2012 | | | 2013 | | | 2014 | | | 2015 | | | 2016 | | ||||||||||||||||||
Southern National Bancorp of Virginia | | | | | 100.0 | | | | | | 116.6 | | | | | | 147.1 | | | | | | 175.8 | | | | | | 211.8 | | | | | | 271.7 | | |
Russell 2000 | | | | | 100.0 | | | | | | 141.4 | | | | | | 196.3 | | | | | | 206.0 | | | | | | 196.9 | | | | | | 238.8 | | |
SNL Bank and Thrift Index | | | | | 100.0 | | | | | | 116.6 | | | | | | 159.6 | | | | | | 178.2 | | | | | | 181.8 | | | | | | 229.5 | | |
2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||
(in thousands, except per share amounts) | ||||||||||||||||||||
Results of Operations: | ||||||||||||||||||||
Interest income | $ | 43,701 | $ | 38,091 | $ | 35,116 | $ | 37,561 | $ | 33,423 | ||||||||||
Interest expense | 7,077 | 4,673 | 4,668 | 5,828 | 6,087 | |||||||||||||||
Net interest income | 36,624 | 33,418 | 30,448 | 31,733 | 27,336 | |||||||||||||||
Provision for loan losses | 3,171 | 3,444 | 3,615 | 6,195 | 8,492 | |||||||||||||||
Net interest income after provision for loan losses | 33,453 | 29,974 | 26,833 | 25,538 | 18,844 | |||||||||||||||
Noninterest income | 3,781 | 2,364 | 1,753 | 5,595 | 2,442 | |||||||||||||||
Noninterest expenses | 23,278 | 21,101 | 19,292 | 21,449 | 15,193 | |||||||||||||||
Income before income taxes | 13,956 | 11,237 | 9,294 | 9,684 | 6,093 | |||||||||||||||
Income tax expense | 4,667 | 3,754 | 3,036 | 3,115 | 1,692 | |||||||||||||||
Net income | $ | 9,289 | $ | 7,483 | $ | 6,258 | $ | 6,569 | $ | 4,401 | ||||||||||
Per Share Data: | ||||||||||||||||||||
Earnings per share - Basic | $ | 0.76 | $ | 0.63 | $ | 0.54 | $ | 0.57 | $ | 0.38 | ||||||||||
Earnings per share - Diluted | $ | 0.75 | $ | 0.63 | $ | 0.54 | $ | 0.57 | $ | 0.38 | ||||||||||
Cash dividends paid per share | $ | 0.52 | $ | 0.60 | $ | 0.25 | $ | 0.25 | $ | - | ||||||||||
Book value per share | $ | 9.78 | $ | 9.33 | $ | 9.20 | $ | 8.90 | $ | 8.55 | ||||||||||
Tangible book value per share (1) | $ | 8.83 | $ | 8.36 | $ | 8.34 | $ | 8.00 | $ | 7.58 | ||||||||||
Weighted average shares outstanding - Basic | 12,224,494 | 11,846,126 | 11,590,333 | 11,590,212 | 11,590,212 | |||||||||||||||
Weighted average shares outstanding - Diluted | 12,330,431 | 11,927,083 | 11,627,445 | 11,596,176 | 11,591,156 | |||||||||||||||
Shares outstanding at end of period | 12,234,443 | 12,216,669 | 11,590,612 | 11,590,212 | 11,590,212 | |||||||||||||||
. | . | . | . | . | ||||||||||||||||
Selected Performance Ratios and Other Data: | ||||||||||||||||||||
Return on average assets | 0.95 | % | 0.94 | % | 0.89 | % | 0.97 | % | 0.74 | % | ||||||||||
Return on average equity | 7.87 | % | 6.76 | % | 5.95 | % | 6.40 | % | 4.51 | % | ||||||||||
Yield on earning assets | 4.85 | % | 5.24 | % | 5.48 | % | 6.15 | % | 6.20 | % | ||||||||||
Cost of funds | 0.91 | % | 0.75 | % | 0.85 | % | 1.11 | % | 1.31 | % | ||||||||||
Net interest margin | 4.07 | % | 4.60 | % | 4.75 | % | 5.19 | % | 5.06 | % | ||||||||||
Efficiency ratio (2) | 57.64 | % | 60.45 | % | 60.78 | % | 56.25 | % | 50.13 | % | ||||||||||
Net charge-offs to average loans | 0.28 | % | 0.51 | % | 0.69 | % | 1.04 | % | 1.63 | % | ||||||||||
Allowance for loan losses to total non-covered loans | 1.06 | % | 1.11 | % | 1.42 | % | 1.54 | % | 1.54 | % | ||||||||||
Stockholders' equity to total assets | 11.55 | % | 12.43 | % | 14.89 | % | 14.25 | % | 16.20 | % | ||||||||||
Financial Condition: | ||||||||||||||||||||
Total assets | $ | 1,036,107 | $ | 916,645 | $ | 716,185 | $ | 723,812 | $ | 611,373 | ||||||||||
Total loans, net of deferred fees | 829,425 | 703,472 | 546,058 | 530,151 | 491,768 | |||||||||||||||
Total deposits | 825,294 | 742,425 | 540,359 | 550,977 | 461,095 | |||||||||||||||
Stockholders' equity | 119,636 | 113,979 | 106,614 | 103,176 | 99,051 |
| | | 2016 | | | 2015 | | | 2014 | | | 2013 | | | 2012 | | |||||||||||||||
| | | (in thousands, except per share amounts) | | |||||||||||||||||||||||||||
Results of Operations: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest income | | | | $ | 48,947 | | | | | $ | 43,701 | | | | | $ | 38,091 | | | | | $ | 35,116 | | | | | $ | 37,561 | | |
Interest expense | | | | | 8,633 | | | | | | 7,077 | | | | | | 4,673 | | | | | | 4,668 | | | | | | 5,828 | | |
Net interest income | | | | | 40,314 | | | | | | 36,624 | | | | | | 33,418 | | | | | | 30,448 | | | | | | 31,733 | | |
Provision for loan losses | | | | | 4,912 | | | | | | 3,171 | | | | | | 3,444 | | | | | | 3,615 | | | | | | 6,195 | | |
Net interest income after provision for loan losses | | | | | 35,402 | | | | | | 33,453 | | | | | | 29,974 | | | | | | 26,833 | | | | | | 25,538 | | |
Noninterest income | | | | | 2,820 | | | | | | 3,781 | | | | | | 2,364 | | | | | | 1,753 | | | | | | 5,595 | | |
Noninterest expenses | | | | | 22,815 | | | | | | 23,278 | | | | | | 21,101 | | | | | | 19,292 | | | | | | 21,449 | | |
Income before income taxes | | | | | 15,407 | | | | | | 13,956 | | | | | | 11,237 | | | | | | 9,294 | | | | | | 9,684 | | |
Income tax expense | | | | | 5,095 | | | | | | 4,667 | | | | | | 3,754 | | | | | | 3,036 | | | | | | 3,115 | | |
Net income | | | | $ | 10,312 | | | | | $ | 9,289 | | | | | $ | 7,483 | | | | | $ | 6,258 | | | | | $ | 6,569 | | |
Per Share Data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Earnings per share – Basic | | | | $ | 0.84 | | | | | $ | 0.76 | | | | | $ | 0.63 | | | | | $ | 0.54 | | | | | $ | 0.57 | | |
Earnings per share – Diluted | | | | $ | 0.83 | | | | | $ | 0.75 | | | | | $ | 0.63 | | | | | $ | 0.54 | | | | | $ | 0.57 | | |
Cash dividends paid per share | | | | $ | 0.32 | | | | | $ | 0.52 | | | | | $ | 0.60 | | | | | $ | 0.25 | | | | | $ | 0.25 | | |
Book value per share | | | | $ | 10.30 | | | | | $ | 9.78 | | | | | $ | 9.33 | | | | | $ | 9.20 | | | | | $ | 8.90 | | |
Tangible book value per share(1) | | | | $ | 9.37 | | | | | $ | 8.83 | | | | | $ | 8.36 | | | | | $ | 8.34 | | | | | $ | 8.00 | | |
Dividend payout ratio | | | | | 38.10% | | | | | | 68.42% | | | | | | 95.24% | | | | | | 46.30% | | | | | | 43.86% | | |
Weighted average shares outstanding – Basic | | | | | 12,251,804 | | | | | | 12,224,494 | | | | | | 11,846,126 | | | | | | 11,590,333 | | | | | | 11,590,212 | | |
Weighted average shares outstanding – Diluted | | | | | 12,426,783 | | | | | | 12,330,431 | | | | | | 11,927,083 | | | | | | 11,627,445 | | | | | | 11,596,176 | | |
Shares outstanding at end of period | | | | | 12,263,643 | | | | | | 12,234,443 | | | | | | 12,216,669 | | | | | | 11,590,612 | | | | | | 11,590,212 | | |
Selected Performance Ratios and Other Data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Return on average assets | | | | | 0.95% | | | | | | 0.95% | | | | | | 0.94% | | | | | | 0.89% | | | | | | 0.97% | | |
Return on average equity | | | | | 8.37% | | | | | | 7.87% | | | | | | 6.76% | | | | | | 5.95% | | | | | | 6.40% | | |
Yield on earning assets | | | | | 4.86% | | | | | | 4.85% | | | | | | 5.24% | | | | | | 5.48% | | | | | | 6.15% | | |
Cost of funds | | | | | 1.00% | | | | | | 0.91% | | | | | | 0.75% | | | | | | 0.85% | | | | | | 1.11% | | |
Net interest margin | | | | | 4.00% | | | | | | 4.07% | | | | | | 4.60% | | | | | | 4.75% | | | | | | 5.19% | | |
Efficiency ratio(2) | | | | | 52.53% | | | | | | 57.64% | | | | | | 60.45% | | | | | | 60.78% | | | | | | 56.25% | | |
Net charge-offs to average loans | | | | | 0.53% | | | | | | 0.28% | | | | | | 0.51% | | | | | | 0.69% | | | | | | 1.04% | | |
Allowance for loan losses to total non-covered loans | | | | | 0.95% | | | | | | 1.06% | | | | | | 1.11% | | | | | | 1.42% | | | | | | 1.54% | | |
Stockholders’ equity to total assets | | | | | 11.06% | | | | | | 11.55% | | | | | | 12.43% | | | | | | 14.89% | | | | | | 14.25% | | |
Financial Condition: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total assets | | | | $ | 1,142,443 | | | | | $ | 1,036,107 | | | | | $ | 916,645 | | | | | $ | 716,185 | | | | | $ | 723,812 | | |
Total loans, net of deferred fees | | | | | 930,415 | | | | | | 829,425 | | | | | | 703,472 | | | | | | 546,058 | | | | | | 530,151 | | |
Total deposits | | | | | 912,982 | | | | | | 825,294 | | | | | | 742,425 | | | | | | 540,359 | | | | | | 550,977 | | |
Stockholders’ equity | | | | | 126,344 | | | | | | 119,636 | | | | | | 113,979 | | | | | | 106,614 | | | | | | 103,176 | | |
The general component covers non-impaired loans and is based on historical loss experience adjusted for current factors. The historical loss experience is determined by portfolio segment and is based on the actual net loss history experienced by Southern National over the most recent three years. This actual loss experience is adjusted for current factors based on the risks present for each portfolio segment. These current factors include consideration of the following: levels of and trends in delinquencies and impaired loans; levels of and trends in charge-offs and recoveries; trends in volume and terms of loans; effects of any changes in risk selection and underwriting standards; other changes in lending policies, procedures, and practices; experience, ability, and depth of lending management and other relevant staff; national and local economic trends and conditions; industry conditions; and effects of changes in credit concentrations. The following portfolio segments have been identified: owner occupied commercial real estate, non-owner occupied commercial real estate, construction and land development, commercial loans, residential 1-4 1 – 4
Prepayment, delinquency and default curves used to forecast pool cash flows are derived from the historical performance of the loan pools. Changes in the assumptions that impact forecasted cash flows could result in a potentially material change to the amount of the allowance for loan losses or the rate of accretion on these loans.
2015.
Due to the judgment involved in estimating fair value of the properties, accounting for OREO is regarded as a critical accounting policy. Estimates of value of OREO properties at the date of foreclosure are typically based on real estate appraisals performed by independent appraisers. These values are generally updated as appraisals become available.
areas.
Net income for the year ended December 31, 2014 was $7.5 million, compared to $6.3 million for the year ended December 31, 2013.
Average loans during 2014 were $608.6 million compared to $516.9 million in the prior year. The growth resulted from the factors noted above. The net interest margin was 4.60% in 2014, down from 4.75% in 2013. The decline in the net interest margin was partially attributable to an increase in the residential loan portfolio resulting from the PGFSB acquisition and the portfolio purchases from STM during the year. Net interest income was $33.4 million during the year ended December 31, 2014, compared to $30.4 million during the prior year.
The Greater Atlantic Bank (GAB) loan discount accretion contributed $2.0 million to net interest income during 2014, compared to $1.7 million during 2013. The loan discount accretion on the HarVest Bank portfolio contributed $920 thousand during 2014, compared to $1.9 million during 2013. The discount accretion on the PGFSB portfolio was $229 thousand in 2014.
The following tables detail average balances of interest-earning assets and interest-bearing liabilities, the amount of interest earned/paid on such assets and liabilities, and the yield/rate for the periods indicated:
Average Balance Sheets and Net Interest Analysis For the Years Ended December 31, 2015, 2014 and 2013 | ||||||||||||||||||||||||||||||||||||
2015 | 2014 | 2013 | ||||||||||||||||||||||||||||||||||
Interest | Interest | Interest | ||||||||||||||||||||||||||||||||||
Average | Income/ | Yield/ | Average | Income/ | Yield/ | Average | Income/ | Yield/ | ||||||||||||||||||||||||||||
Balance | Expense | Rate | Balance | Expense | Rate | Balance | Expense | Rate | ||||||||||||||||||||||||||||
(Dollar amounts in thousands) | ||||||||||||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||||||||||||||||
Loans, net of deferred fees (1) (2) | $ | 761,550 | $ | 40,104 | 5.27 | % | $ | 608,604 | $ | 34,611 | 5.69 | % | $ | 516,927 | $ | 32,269 | 6.24 | % | ||||||||||||||||||
Investment securities | 97,580 | 2,806 | 2.88 | % | 90,133 | 2,628 | 2.92 | % | 83,920 | 2,272 | 2.71 | % | ||||||||||||||||||||||||
Other earning assets | 41,245 | 791 | 1.92 | % | 28,484 | 852 | 2.99 | % | 39,938 | 575 | 1.44 | % | ||||||||||||||||||||||||
Total earning assets | 900,375 | 43,701 | 4.85 | % | 727,221 | 38,091 | 5.24 | % | 640,785 | 35,116 | 5.48 | % | ||||||||||||||||||||||||
Allowance for loan losses | (8,139 | ) | (7,422 | ) | (7,621 | ) | ||||||||||||||||||||||||||||||
Intangible assets | 11,991 | 11,452 | 10,212 | |||||||||||||||||||||||||||||||||
Other non-earning assets | 70,800 | 66,157 | 61,397 | |||||||||||||||||||||||||||||||||
Total assets | $ | 975,027 | $ | 797,408 | $ | 704,773 | ||||||||||||||||||||||||||||||
Liabilities and stockholders' equity | ||||||||||||||||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||||||||||||||
NOW accounts | $ | 24,306 | 25 | 0.10 | % | $ | 23,574 | 26 | 0.11 | % | $ | 23,723 | 58 | 0.24 | % | |||||||||||||||||||||
Money market accounts | 138,559 | 483 | 0.35 | % | 130,473 | 369 | 0.28 | % | 147,319 | 505 | 0.34 | % | ||||||||||||||||||||||||
Savings accounts | 44,661 | 282 | 0.63 | % | 29,034 | 179 | 0.62 | % | 12,323 | 72 | 0.59 | % | ||||||||||||||||||||||||
Time deposits | 509,900 | 5,643 | 1.11 | % | 376,395 | 3,402 | 0.90 | % | 319,495 | 3,412 | 1.07 | % | ||||||||||||||||||||||||
Total interest-bearing deposits | 717,426 | 6,433 | 0.90 | % | 559,476 | 3,976 | 0.71 | % | 502,860 | 4,047 | 0.80 | % | ||||||||||||||||||||||||
Borrowings | 58,358 | 644 | 1.10 | % | 62,810 | 697 | 1.11 | % | 46,323 | 621 | 1.34 | % | ||||||||||||||||||||||||
Total interest-bearing liabilities | 775,784 | 7,077 | 0.91 | % | 622,286 | 4,673 | 0.75 | % | 549,183 | 4,668 | 0.85 | % | ||||||||||||||||||||||||
Noninterest-bearing liabilities: | ||||||||||||||||||||||||||||||||||||
Demand deposits | 75,129 | 59,205 | 44,989 | |||||||||||||||||||||||||||||||||
Other liabilities | 6,120 | 5,158 | 5,352 | |||||||||||||||||||||||||||||||||
Total liabilites | 857,033 | 686,649 | 599,524 | |||||||||||||||||||||||||||||||||
Stockholders' equity | 117,994 | 110,759 | 105,249 | |||||||||||||||||||||||||||||||||
Total liabilities and stockholders' | ||||||||||||||||||||||||||||||||||||
equity | $ | 975,027 | $ | 797,408 | $ | 704,773 | ||||||||||||||||||||||||||||||
Net interest income | $ | 36,624 | $ | 33,418 | $ | 30,448 | ||||||||||||||||||||||||||||||
Interest rate spread | 3.94 | % | 4.49 | % | 4.63 | % | ||||||||||||||||||||||||||||||
Net interest margin | 4.07 | % | 4.60 | % | 4.75 | % |
| | | 2016 | | | 2015 | | | 2014 | | |||||||||||||||||||||||||||||||||||||||||||||
| | | Average Balance | | | Interest Income/ Expense | | | Yield/ Rate | | | Average Balance | | | Interest Income/ Expense | | | Yield/ Rate | | | Average Balance | | | Interest Income/ Expense | | | Yield/ Rate | | |||||||||||||||||||||||||||
| | | (Dollar amounts in thousands) | | |||||||||||||||||||||||||||||||||||||||||||||||||||
Assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-earning assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loans, net of deferred fees(1)(2) | | | | $ | 889,600 | | | | | $ | 45,348 | | | | | | 5.10% | | | | | $ | 761,550 | | | | | $ | 40,104 | | | | | | 5.27% | | | | | $ | 608,604 | | | | | $ | 34,611 | | | | | | 5.69% | | |
Investment securities | | | | | 96,836 | | | | | | 2,955 | | | | | | 3.05% | | | | | | 97,580 | | | | | | 2,806 | | | | | | 2.88% | | | | | | 90,133 | | | | | | 2,628 | | | | | | 2.92% | | |
Other earning assets | | | | | 20,726 | | | | | | 644 | | | | | | 3.11% | | | | | | 41,245 | | | | | | 791 | | | | | | 1.92% | | | | | | 28,484 | | | | | | 852 | | | | | | 2.99% | | |
Total earning assets | | | | | 1,007,162 | | | | | | 48,947 | | | | | | 4.86% | | | | | | 900,375 | | | | | | 43,701 | | | | | | 4.85% | | | | | | 727,221 | | | | | | 38,091 | | | | | | 5.24% | | |
Allowance for loan losses | | | | | (8,634) | | | | | | | | | | | | | | | | | | (8,139) | | | | | | | | | | | | | | | | | | (7,422) | | | | | | | | | | | | | | |
Intangible assets | | | | | 11,499 | | | | | | | | | | | | | | | | | | 11,991 | | | | | | | | | | | | | | | | | | 11,452 | | | | | | | | | | | | | | |
Other non-earning assets | | | | | 70,332 | | | | | | | | | | | | | | | | | | 70,800 | | | | | | | | | | | | | | | | | | 66,157 | | | | | | | | | | | | | | |
Total assets | | | | $ | 1,080,359 | | | | | | | | | | | | | | | | | $ | 975,027 | | | | | | | | | | | | | | | | | $ | 797,408 | | | | | | | | | | | | | | |
Liabilities and stockholders’ equity | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-bearing liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
NOW and other demand accounts | | | | $ | 36,470 | | | | | | 60 | | | | | | 0.16% | | | | | $ | 24,306 | | | | | | 25 | | | | | | 0.10% | | | | | $ | 23,574 | | | | | | 26 | | | | | | 0.11% | | |
Money market accounts | | | | | 127,121 | | | | | | 453 | | | | | | 0.36% | | | | | | 138,559 | | | | | | 483 | | | | | | 0.35% | | | | | | 130,473 | | | | | | 369 | | | | | | 0.28% | | |
Savings accounts | | | | | 51,670 | | | | | | 333 | | | | | | 0.64% | | | | | | 44,661 | | | | | | 282 | | | | | | 0.63% | | | | | | 29,034 | | | | | | 179 | | | | | | 0.62% | | |
Time deposits | | | | | 579,157 | | | | | | 7,255 | | | | | | 1.25% | | | | | | 509,900 | | | | | | 5,643 | | | | | | 1.11% | | | | | | 376,395 | | | | | | 3,402 | | | | | | 0.90% | | |
Total interest-bearing deposits | | | | | 794,418 | | | | | | 8,101 | | | | | | 1.02% | | | | | | 717,426 | | | | | | 6,433 | | | | | | 0.90% | | | | | | 559,476 | | | | | | 3,976 | | | | | | 0.71% | | |
Borrowings | | | | | 66,230 | | | | | | 532 | | | | | | 0.80% | | | | | | 58,358 | | | | | | 644 | | | | | | 1.10% | | | | | | 62,810 | | | | | | 697 | | | | | | 1.11% | | |
Total interest-bearing liabilities | | | | | 860,648 | | | | | | 8,633 | | | | | | 1.00% | | | | | | 775,784 | | | | | | 7,077 | | | | | | 0.91% | | | | | | 622,286 | | | | | | 4,673 | | | | | | 0.75% | | |
Noninterest-bearing liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Demand deposits | | | | | 88,413 | | | | | | | | | | | | | | | | | | 75,129 | | | | | | | | | | | | | | | | | | 59,205 | | | | | | | | | | | | | | |
Other liabilities | | | | | 8,140 | | | | | | | | | | | | | | | | | | 6,120 | | | | | | | | | | | | | | | | | | 5,158 | | | | | | | | | | | | | | |
Total liabilites | | | | | 957,201 | | | | | | | | | | | | | | | | | | 857,033 | | | | | | | | | | | | | | | | | | 686,649 | | | | | | | | | | | | | | |
Stockholders’ equity | | | | | 123,158 | | | | | | | | | | | | | | | | | | 117,994 | | | | | | | | | | | | | | | | | | 110,759 | | | | | | | | | | | | | | |
Total liabilities and stockholders’ equity | | | | $ | 1,080,359 | | | | | | | | | | | | | | | | | $ | 975,027 | | | | | | | | | | | | | | | | | $ | 797,408 | | | | | | | | | | | | | | |
Net interest income | | | | | | | | | | $ | 40,314 | | | | | | | | | | | | | | | | | $ | 36,624 | | | | | | | | | | | | | | | | | $ | 33,418 | | | | | | | | |
Interest rate spread | | | | | | | | | | | | | | | | | 3.86% | | | | | | | | | | | | | | | | | | 3.94% | | | | | | | | | | | | | | | | | | 4.49% | | |
Net interest margin | | | | | | | | | | | | | | | | | 4.00% | | | | | | | | | | | | | | | | | | 4.07% | | | | | | | | | | | | | | | | | | 4.60% | | |
Year Ended December 31, 2015 vs. 2014 | Year Ended December 31, 2014 vs. 2013 | |||||||||||||||||||||||
Increase (Decrease) | Increase (Decrease) | |||||||||||||||||||||||
Due to Change in: | Due to Change in: | |||||||||||||||||||||||
Net | Net | |||||||||||||||||||||||
Volume | Rate | Change | Volume | Rate | Change | |||||||||||||||||||
( in thousands) | ||||||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||||
Loans, net of deferred fees | $ | 7,786 | $ | (2,293 | ) | $ | 5,493 | $ | 4,701 | $ | (2,359 | ) | $ | 2,342 | ||||||||||
Investment securities | 214 | (36 | ) | 178 | 175 | 181 | 356 | |||||||||||||||||
Other earning assets | (306 | ) | 245 | (61 | ) | (100 | ) | 377 | 277 | |||||||||||||||
Total interest-earning assets | 7,694 | (2,084 | ) | 5,610 | 4,776 | (1,801 | ) | 2,975 | ||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||
NOW accounts | 1 | (1 | ) | - | (1 | ) | (31 | ) | (32 | ) | ||||||||||||||
Money market accounts | 24 | 90 | 114 | (54 | ) | (82 | ) | (136 | ) | |||||||||||||||
Savings accounts | 99 | 4 | 103 | 103 | 4 | 107 | ||||||||||||||||||
Time deposits | 1,373 | 868 | 2,241 | (73 | ) | 63 | (10 | ) | ||||||||||||||||
Total interest-bearing deposits | 1,497 | 961 | 2,458 | (25 | ) | (46 | ) | (71 | ) | |||||||||||||||
Borrowings | (49 | ) | (4 | ) | (53 | ) | 147 | (71 | ) | 76 | ||||||||||||||
Total interest-bearing liabilities | 1,448 | 957 | 2,405 | 122 | (117 | ) | 5 | |||||||||||||||||
Change in net interest income | $ | 6,246 | $ | (3,041 | ) | $ | 3,205 | $ | 4,654 | $ | (1,684 | ) | $ | 2,970 |
| | | Year Ended December 31, 2016 vs. 2015 | | | | | | Year Ended December 31, 2015 vs. 2014 | | ||||||||||||||||||||||||||||||
| | | Increase (Decrease) Due to Change in: | | | | | | Increase (Decrease) Due to Change in: | | ||||||||||||||||||||||||||||||
| | | Volume | | | Rate | | | Net Change | | | | | | Volume | | | Rate | | | Net Change | | ||||||||||||||||||
| | | ( in thousands) | | ||||||||||||||||||||||||||||||||||||
Interest-earning assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||
Loans, net of deferred fees | | | | $ | 6,477 | | | | | $ | (1,233) | | | | | $ | 5,244 | | | | | | | | $ | 7,786 | | | | | $ | (2,293) | | | | | $ | 5,493 | | |
Investment securities | | | | | (21) | | | | | | 170 | | | | | | 149 | | | | | | | | | 214 | | | | | | (36) | | | | | | 178 | | |
Other earning assets | | | | | 596 | | | | | | (743) | | | | | | (147) | | | | | | | | | (306) | | | | | | 245 | | | | | | (61) | | |
Total interest-earning assets | | | | | 7,052 | | | | | | (1,806) | | | | | | 5,246 | | | | | | | | | 7,694 | | | | | | (2,084) | | | | | | 5,610 | | |
Interest-bearing liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
NOW accounts | | | | | 16 | | | | | | 19 | | | | | | 35 | | | | | | | | | 1 | | | | | | (1) | | | | | | — | | |
Money market accounts | | | | | (41) | | | | | | 11 | | | | | | (30) | | | | | | | | | 24 | | | | | | 90 | | | | �� | | 114 | | |
Savings accounts | | | | | 45 | | | | | | 6 | | | | | | 51 | | | | | | | | | 99 | | | | | | 4 | | | | | | 103 | | |
Time deposits | | | | | 818 | | | | | | 794 | | | | | | 1,612 | | | | | | | | | 1,373 | | | | | | 868 | | | | | | 2,241 | | |
Total interest-bearing deposits | | | | | 838 | | | | | | 830 | | | | | | 1,668 | | | | | | | | | 1,497 | | | | | | 961 | | | | | | 2,458 | | |
Borrowings | | | | | 110 | | | | | | (222) | | | | | | (112) | | | | | | | | | (49) | | | | | | (4) | | | | | | (53) | | |
Total interest-bearing liabilities | | | | | 948 | | | | | | 608 | | | | | | 1,556 | | | | | | | | | 1,448 | | | | | | 957 | | | | | | 2,405 | | |
Change in net interest income | | | | $ | 6,104 | | | | | $ | (2,414) | | | | | $ | 3,690 | | | | | | | | $ | 6,246 | | | | | $ | (3,041) | | | | | $ | 3,205 | | |
|
single borrower.
2015 | 2014 | Change | ||||||||||
Account maintenance and deposit service fees | $ | 953 | $ | 826 | $ | 127 | ||||||
Income from bank-owned life insurance | 636 | 617 | 19 | |||||||||
Equity income from mortgage affiliate | 1,459 | 558 | 901 | |||||||||
Net impairment losses recognized in earnings | - | (41 | ) | 41 | ||||||||
Gain on sale of securities available for sale | 520 | - | 520 | |||||||||
Gain on other assets | 7 | 202 | (195 | ) | ||||||||
Other | 206 | 202 | 4 | |||||||||
Total noninterest income | $ | 3,781 | $ | 2,364 | $ | 1,417 |
2014 | 2013 | Change | ||||||||||
Account maintenance and deposit service fees | $ | 826 | $ | 793 | $ | 33 | ||||||
Income from bank-owned life insurance | 617 | 592 | 25 | |||||||||
Equity income from mortgage affiliate | 558 | - | 558 | |||||||||
Net impairment losses recognized in earnings | (41 | ) | (3 | ) | (38 | ) | ||||||
Gain on sale of securities available for sale | - | 142 | (142 | ) | ||||||||
Gain on other assets | 202 | 13 | 189 | |||||||||
Other | 202 | 216 | (14 | ) | ||||||||
Total noninterest income | $ | 2,364 | $ | 1,753 | $ | 611 |
| | | 2016 | | | 2015 | | | Change | ||||||||
Account maintenance and deposit service fees | | | | $ | 896 | | | | | $ | 953 | | | | | $ | (57) |
Income from bank-owned life insurance | | | | | 700 | | | | | | 636 | | | | | | 64 |
Equity income from mortgage affiliate | | | | | 1,109 | | | | | | 1,459 | | | | | | (350) |
Gain on sale of securities available for sale | | | | | — | | | | | | 520 | | | | | | (520) |
Gain on other assets | | | | | — | | | | | | 7 | | | | | | (7) |
Other | | | | | 115 | | | | | | 206 | | | | | | (91) |
Total noninterest income | | | | $ | 2,820 | | | | | $ | 3,781 | | | | | $ | (961) |
|
| | | 2015 | | | 2014 | | | Change | | |||||||||
Account maintenance and deposit service fees | | | | $ | 953 | | | | | $ | 826 | | | | | $ | 127 | | |
Income from bank-owned life insurance | | | | | 636 | | | | | | 617 | | | | | | 19 | | |
Equity income from mortgage affiliate | | | | | 1,459 | | | | | | 558 | | | | | | 901 | | |
Net impairment losses recognized in earnings | | | | | — | | | | | | (41) | | | | | | 41 | | |
Gain on sale of securities available for sale | | | | | 520 | | | | | | — | | | | | | 520 | | |
Gain on other assets | | | | | 7 | | | | | | 202 | | | | | | (195) | | |
Other | | | | | 206 | | | | | | 202 | | | | | | 4 | | |
Total noninterest income | | | | $ | 3,781 | | | | | $ | 2,364 | | | | | $ | 1,417 | | |
|
Noninterest income increased to $2.4 million in 2014 from $1.8 million in 2013. In addition to income from the STM investment in the amount of $558 thousand, we sold part of our investment in CapitalSouth Partners Fund III, a Small Business Investment Company, for a gain of $202 thousand.
2015 | 2014 | Change | ||||||||||
Salaries and benefits | $ | 11,860 | $ | 10,225 | $ | 1,635 | ||||||
Occupancy expenses | 3,269 | 3,165 | 104 | |||||||||
Furniture and equipment expenses | 815 | 787 | 28 | |||||||||
Amortization of core deposit intangible | 261 | 220 | 41 | |||||||||
Virginia franchise tax expense | 352 | 455 | (103 | ) | ||||||||
FDIC assessment | 664 | 569 | 95 | |||||||||
Data processing expense | 668 | 569 | 99 | |||||||||
Telephone and communication expense | 786 | 751 | 35 | |||||||||
Change in FDIC indemnification asset | 630 | 1,230 | (600 | ) | ||||||||
Net (gain) loss on other real estate owned | 291 | (433 | ) | 724 | ||||||||
Merger expense | - | 487 | (487 | ) | ||||||||
Other operating expenses | 3,682 | 3,076 | 606 | |||||||||
Total noninterest expense | $ | 23,278 | $ | 21,101 | $ | 2,177 |
2014 | 2013 | Change | ||||||||||
Salaries and benefits | $ | 10,225 | $ | 9,063 | $ | 1,162 | ||||||
Occupancy expenses | 3,165 | 3,063 | 102 | |||||||||
Furniture and equipment expenses | 787 | 724 | 63 | |||||||||
Amortization of core deposit intangible | 220 | 467 | (247 | ) | ||||||||
Virginia franchise tax expense | 455 | 471 | (16 | ) | ||||||||
FDIC assessment | 569 | 823 | (254 | ) | ||||||||
Data processing expense | 569 | 562 | 7 | |||||||||
Telephone and communication expense | 751 | 684 | 67 | |||||||||
Change in FDIC indemnification asset | 1,230 | 483 | 747 | |||||||||
Net gain on other real estate owned | (433 | ) | (188 | ) | (245 | ) | ||||||
Merger expense | 487 | 35 | 452 | |||||||||
Other operating expenses | 3,076 | 3,105 | (29 | ) | ||||||||
Total noninterest expense | $ | 21,101 | $ | 19,292 | $ | 1,809 |
| | | 2016 | | | 2015 | | | Change | ||||||||
Salaries and benefits | | | | $ | 11,675 | | | | | $ | 11,860 | | | | | $ | (185) |
Occupancy expenses | | | | | 3,155 | | | | | | 3,269 | | | | | | (114) |
Furniture and equipment expenses | | | | | 975 | | | | | | 815 | | | | | | 160 |
Amortization of core deposit intangible | | | | | 219 | | | | | | 261 | | | | | | (42) |
Virginia franchise tax expense | | | | | 387 | | | | | | 352 | | | | | | 35 |
FDIC assessment | | | | | 543 | | | | | | 664 | | | | | | (121) |
Data processing expense | | | | | 744 | | | | | | 668 | | | | | | 76 |
Telephone and communication expense | | | | | 745 | | | | | | 786 | | | | | | (41) |
Amortization of FDIC indemnification asset | | | | | 793 | | | | | | 630 | | | | | | 163 |
Net loss on other real estate owned | | | | | 174 | | | | | | 291 | | | | | | (117) |
Merger expense | | | | | 429 | | | | | | — | | | | | | 429 |
Other operating expenses | | | | | 2,976 | | | | | | 3,682 | | | | | | (706) |
Total noninterest expense | | | | $ | 22,815 | | | | | $ | 23,278 | | | | | $ | (463) |
|
| | | 2015 | | | 2014 | | | Change | | |||||||||
Salaries and benefits | | | | $ | 11,860 | | | | | $ | 10,225 | | | | | $ | 1,635 | | |
Occupancy expenses | | | | | 3,269 | | | | | | 3,165 | | | | | | 104 | | |
Furniture and equipment expenses | | | | | 815 | | | | | | 787 | | | | | | 28 | | |
Amortization of core deposit intangible | | | | | 261 | | | | | | 220 | | | | | | 41 | | |
Virginia franchise tax expense | | | | | 352 | | | | | | 455 | | | | | | (103) | | |
FDIC assessment | | | | | 664 | | | | | | 569 | | | | | | 95 | | |
Data processing expense | | | | | 668 | | | | | | 569 | | | | | | 99 | | |
Telephone and communication expense | | | | | 786 | | | | | | 751 | | | | | | 35 | | |
Change in FDIC indemnification asset | | | | | 630 | | | | | | 1,230 | | | | | | (600) | | |
Net loss (gain) on other real estate owned | | | | | 291 | | | | | | (433) | | | | | | 724 | | |
Merger expense | | | | | — | | | | | | 487 | | | | | | (487) | | |
Other operating expenses | | | | | 3,682 | | | | | | 3,076 | | | | | | 606 | | |
Total noninterest expense | | | | $ | 23,278 | | | | | $ | 21,101 | | | | | $ | 2,177 | | |
|
Noninterest expense was $21.1 million in 2014 compared to $19.3 million in 2013. Merger expenses were $487 thousand during 2014, compared to $35 thousand in 2013.
The net gain on other real estate owned (OREO) in 2014 was $433 thousand compared to a gain on OREO of $188 thousand in 2013. The gain in 2014 resulted primarily from the sale of eight OREO properties at a gain of $1.1 million, the sale of three properties at a loss of $226 thousand, and impairment of $400 thousand on two properties. During 2013, we sold five properties from OREO resulting in gains of $1.3 million. We sold four other properties resulting in losses of $588 thousand. We also recognized impairment in the value of four properties in the amount of $550 thousand.
As a result of the cash flow analysis of the acquired GAB loans and the related FDIC indemnification asset in the second quarter of 2014, the amortization expense of the indemnification asset increased from $483 thousand in 2013, to $1.2 million in 2014.
FINANCIAL CONDITION
2016.
2016.
2016.
Covered Loans
Total | Total | Total | ||||||||||||||||||||||||||||||||||||||||||||||
2015 | 2015 | 2014 | 2014 | 2013 | 2013 | |||||||||||||||||||||||||||||||||||||||||||
Covered | Non-covered | Amount | Percent | Covered | Non-covered | Amount | Percent | Covered | Non-covered | Amount | Percent | |||||||||||||||||||||||||||||||||||||
Mortgage loans on real estate: | ||||||||||||||||||||||||||||||||||||||||||||||||
Commercial real estate - owner-occupied | $ | - | $ | 141,521 | $ | 141,521 | 17.0 | % | $ | - | $ | 136,597 | $ | 136,597 | 19.4 | % | $ | 1,603 | $ | 106,225 | $ | 107,828 | 19.7 | % | ||||||||||||||||||||||||
Commercial real estate - non-owner-occupied | - | 256,513 | 256,513 | 30.8 | % | - | 200,517 | 200,517 | 28.4 | % | 5,829 | 150,008 | 155,837 | 28.5 | % | |||||||||||||||||||||||||||||||||
Secured by farmland | - | 578 | 578 | 0.1 | % | - | 612 | 612 | 0.1 | % | 100 | 508 | 608 | 0.1 | % | |||||||||||||||||||||||||||||||||
Construction and land development | - | 67,832 | 67,832 | 8.2 | % | - | 57,938 | 57,938 | 8.2 | % | 1 | 39,068 | 39,069 | 7.1 | % | |||||||||||||||||||||||||||||||||
Residential 1-4 family | 12,994 | 165,077 | 178,071 | 21.4 | % | 14,837 | 123,233 | 138,070 | 19.6 | % | 16,631 | 66,482 | 83,113 | 15.2 | % | |||||||||||||||||||||||||||||||||
Multi- family residential | - | 25,501 | 25,501 | 3.1 | % | - | 21,832 | 21,832 | 3.1 | % | 585 | 21,496 | 22,081 | 4.0 | % | |||||||||||||||||||||||||||||||||
Home equity lines of credit | 21,379 | 13,798 | 35,177 | 4.2 | % | 23,658 | 9,751 | 33,409 | 4.7 | % | 25,769 | 6,431 | 32,200 | 5.9 | % | |||||||||||||||||||||||||||||||||
Total real estate loans | 34,373 | 670,820 | 705,193 | 84.8 | % | 38,495 | 550,480 | 588,975 | 83.5 | % | 50,518 | 390,218 | 440,736 | 80.5 | % | |||||||||||||||||||||||||||||||||
Commercial loans | - | 124,985 | 124,985 | 15.0 | % | - | 114,714 | 114,714 | 16.3 | % | 1,097 | 104,284 | 105,381 | 19.2 | % | |||||||||||||||||||||||||||||||||
Consumer loans | - | 1,366 | 1,366 | 0.2 | % | - | 1,564 | 1,564 | 0.2 | % | 81 | 1,308 | 1,389 | 0.3 | % | |||||||||||||||||||||||||||||||||
Gross loans | 34,373 | 797,171 | 831,544 | 100.0 | % | 38,495 | 666,758 | 705,253 | 100.0 | % | 51,696 | 495,810 | 547,506 | 100.0 | % | |||||||||||||||||||||||||||||||||
Less deferred fees | (2,119 | ) | (2,119 | ) | 1 | (1,782 | ) | (1,781 | ) | 5 | (1,453 | ) | (1,448 | ) | ||||||||||||||||||||||||||||||||||
Loans, net of deferred fees | $ | 34,373 | $ | 795,052 | $ | 829,425 | $ | 38,496 | $ | 664,976 | $ | 703,472 | $ | 51,701 | $ | 494,357 | $ | 546,058 |
Total | Total | |||||||||||||||||||||||||||||||
2012 | 2012 | 2011 | 2011 | |||||||||||||||||||||||||||||
Covered | Non-covered | Amount | Percent | Covered | Non-covered | Amount | Percent | |||||||||||||||||||||||||
Mortgage loans on real estate: | ||||||||||||||||||||||||||||||||
Commercial real estate - owner-occupied | $ | 4,143 | $ | 93,288 | $ | 97,431 | 18.3 | % | $ | 4,854 | $ | 82,450 | $ | 87,304 | 17.7 | % | ||||||||||||||||
Commercial real estate - non-owner-occupied | 10,246 | 130,152 | 140,398 | 26.4 | % | 11,243 | 117,059 | 128,302 | 26.0 | % | ||||||||||||||||||||||
Secured by farmland | - | 1,479 | 1,479 | 0.3 | % | - | 1,506 | 1,506 | 0.3 | % | ||||||||||||||||||||||
Construction and land development | 1,261 | 44,946 | 46,207 | 8.7 | % | 2,883 | 39,565 | 42,448 | 8.6 | % | ||||||||||||||||||||||
Residential 1-4 family | 21,005 | 61,319 | 82,324 | 15.5 | % | 25,307 | 49,288 | 74,595 | 15.1 | % | ||||||||||||||||||||||
Multi- family residential | 614 | 18,774 | 19,388 | 3.7 | % | 629 | 19,553 | 20,182 | 4.1 | % | ||||||||||||||||||||||
Home equity lines of credit | 31,292 | 9,178 | 40,470 | 7.6 | % | 35,442 | 9,040 | 44,482 | 9.0 | % | ||||||||||||||||||||||
Total real estate loans | 68,561 | 359,136 | 427,697 | 80.5 | % | 80,358 | 318,461 | 398,819 | 80.9 | % | ||||||||||||||||||||||
Commercial loans | 2,672 | 99,081 | 101,753 | 19.2 | % | 2,122 | 89,939 | 92,061 | 18.7 | % | ||||||||||||||||||||||
Consumer loans | 88 | 1,623 | 1,711 | 0.3 | % | 108 | 1,868 | 1,976 | 0.4 | % | ||||||||||||||||||||||
Gross loans | 71,321 | 459,840 | 531,161 | 100.0 | % | 82,588 | 410,268 | 492,856 | 100.0 | % | ||||||||||||||||||||||
Less deferred fees | 7 | (1,017 | ) | (1,010 | ) | - | (1,088 | ) | (1,088.00 | ) | ||||||||||||||||||||||
Loans, net of deferred fees | $ | 71,328 | $ | 458,823 | $ | 530,151 | $ | 82,588 | $ | 409,180 | $ | 491,768 |
| | | 2016 | | | Total 2016 | | | 2015 | | | Total 2015 | | | 2014 | | | Total 2014 | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | | Covered | | | Non-covered | | | Amount | | | Percent | | | Covered | | | Non-covered | | | Amount | | | Percent | | | Covered | | | Non-covered | | | Amount | | | Percent | | ||||||||||||||||||||||||||||||||||||
Mortgage loans on real estate: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate – owner-occupied | | | | $ | — | | | | | $ | 154,807 | | | | | $ | 154,807 | | | | | | 16.6% | | | | | $ | — | | | | | $ | 141,521 | | | | | $ | 141,521 | | | | | | 17.0% | | | | | $ | — | | | | | $ | 136,597 | | | | | $ | 136,597 | | | | | | 19.4% | | |
Commercial real estate – non-owner-occupied | | | | | — | | | | | | 279,634 | | | | | | 279,634 | | | | | | 30.0% | | | | | | — | | | | | | 256,513 | | | | | | 256,513 | | | | | | 30.8% | | | | | | — | | | | | | 200,517 | | | | | | 200,517 | | | | | | 28.4% | | |
Secured by farmland | | | | | — | | | | | | 541 | | | | | | 541 | | | | | | 0.1% | | | | | | — | | | | | | 578 | | | | | | 578 | | | | | | 0.1% | | | | | | — | | | | | | 612 | | | | | | 612 | | | | | | 0.1% | | |
Construction and land development | | | | | — | | | | | | 91,067 | | | | | | 91,067 | | | | | | 9.8% | | | | | | — | | | | | | 67,832 | | | | | | 67,832 | | | | | | 8.2% | | | | | | — | | | | | | 57,938 | | | | | | 57,938 | | | | | | 8.2% | | |
Residential 1 – 4 family | | | | | 10,519 | | | | | | 220,291 | | | | | | 230,810 | | | | | | 24.8% | | | | | | 12,994 | | | | | | 165,077 | | | | | | 178,071 | | | | | | 21.4% | | | | | | 14,837 | | | | | | 123,233 | | | | | | 138,070 | | | | | | 19.6% | | |
Multi-family residential | | | | | — | | | | | | 30,021 | | | | | | 30,021 | | | | | | 3.2% | | | | | | — | | | | | | 25,501 | | | | | | 25,501 | | | | | | 3.1% | | | | | | — | | | | | | 21,832 | | | | | | 21,832 | | | | | | 3.1% | | |
Home equity lines of credit | | | | | 17,661 | | | | | | 11,542 | | | | | | 29,203 | | | | | | 3.1% | | | | | | 21,379 | | | | | | 13,798 | | | | | | 35,177 | | | | | | 4.2% | | | | | | 23,658 | | | | | | 9,751 | | | | | | 33,409 | | | | | | 4.7% | | |
Total real estate loans | | | | | 28,180 | | | | | | 787,903 | | | | | | 816,083 | | | | | | 87.5% | | | | | | 34,373 | | | | | | 670,820 | | | | | | 705,193 | | | | | | 84.8% | | | | | | 38,495 | | | | | | 550,480 | | | | | | 588,975 | | | | | | 83.5% | | |
Commercial loans | | | | | — | | | | | | 115,365 | | | | | | 115,365 | | | | | | 12.4% | | | | | | — | | | | | | 124,985 | | | | | | 124,985 | | | | | | 15.0% | | | | | | — | | | | | | 114,714 | | | | | | 114,714 | | | | | | 16.3% | | |
Consumer loans | | | | | — | | | | | | 856 | | | | | | 856 | | | | | | 0.1% | | | | | | — | | | | | | 1,366 | | | | | | 1,366 | | | | | | 0.2% | | | | | | — | | | | | | 1,564 | | | | | | 1,564 | | | | | | 0.2% | | |
Gross loans | | | | | 28,180 | | | | | | 904,124 | | | | | | 932,304 | | | | | | 100.0% | | | | | | 34,373 | | | | | | 797,171 | | | | | | 831,544 | | | | | | 100.0% | | | | | | 38,495 | | | | | | 666,758 | | | | | | 705,253 | | | | | | 100.0% | | |
Less deferred fees | | | | | — | | | | | | (1,889) | | | | | | (1,889) | | | | | | | | | | | | | | | | | | (2,119) | | | | | | (2,119) | | | | | | | | | | | | 1 | | | | | | (1,782) | | | | | | (1,781) | | | | | | | | |
Loans, net of deferred fees | | | | $ | 28,180 | | | | | $ | 902,235 | | | | | $ | 930,415 | | | | | | | | | | | $ | 34,373 | | | | | $ | 795,052 | | | | | $ | 829,425 | | | | | | | | | | | $ | 38,496 | | | | | $ | 664,976 | | | | | $ | 703,472 | | | | | | | | |
|
| | | 2013 | | | Total 2013 | | | 2012 | | | Total 2012 | | ||||||||||||||||||||||||||||||||||||
| | | Covered | | | Non-covered | | | Amount | | | Percent | | | Covered | | | Non-covered | | | Amount | | | Percent | | ||||||||||||||||||||||||
Mortgage loans on real estate: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate – owner-occupied | | | | $ | 1,603 | | | | | $ | 106,225 | | | | | $ | 107,828 | | | | | | 19.7% | | | | | $ | 4,143 | | | | | $ | 93,288 | | | | | $ | 97,431 | | | | | | 18.3% | | |
Commercial real estate – non-owner-occupied | | | | | 5,829 | | | | | | 150,008 | | | | | | 155,837 | | | | | | 28.5% | | | | | | 10,246 | | | | | | 130,152 | | | | | | 140,398 | | | | | | 26.4% | | |
Secured by farmland | | | | | 100 | | | | | | 508 | | | | | | 608 | | | | | | 0.1% | | | | | | — | | | | | | 1,479 | | | | | | 1,479 | | | | | | 0.3% | | |
Construction and land development | | | | | 1 | | | | | | 39,068 | | | | | | 39,069 | | | | | | 7.1% | | | | | | 1,261 | | | | | | 44,946 | | | | | | 46,207 | | | | | | 8.7% | | |
Residential 1 – 4 family | | | | | 16,631 | | | | | | 66,482 | | | | | | 83,113 | | | | | | 15.2% | | | | | | 21,005 | | | | | | 61,319 | | | | | | 82,324 | | | | | | 15.5% | | |
Multi-family residential | | | | | 585 | | | | | | 21,496 | | | | | | 22,081 | | | | | | 4.0% | | | | | | 614 | | | | | | 18,774 | | | | | | 19,388 | | | | | | 3.7% | | |
Home equity lines of credit | | | | | 25,769 | | | | | | 6,431 | | | | | | 32,200 | | | | | | 5.9% | | | | | | 31,292 | | | | | | 9,178 | | | | | | 40,470 | | | | | | 7.6% | | |
Total real estate loans | | | | | 50,518 | | | | | | 390,218 | | | | | | 440,736 | | | | | | 80.5% | | | | | | 68,561 | | | | | | 359,136 | | | | | | 427,697 | | | | | | 80.5% | | |
Commercial loans | | | | | 1,097 | | | | | | 104,284 | | | | | | 105,381 | | | | | | 19.2% | | | | | | 2,672 | | | | | | 99,081 | | | | | | 101,753 | | | | | | 19.2% | | |
Consumer loans | | | | | 81 | | | | | | 1,308 | | | | | | 1,389 | | | | | | 0.3% | | | | | | 88 | | | | | | 1,623 | | | | | | 1,711 | | | | | | 0.3% | | |
Gross loans | | | | | 51,696 | | | | | | 495,810 | | | | | | 547,506 | | | | | | 100.0% | | | | | | 71,321 | | | | | | 459,840 | | | | | | 531,161 | | | | | | 100.0% | | |
Less deferred fees | | | | | 5 | | | | | | (1,453) | | | | | | (1,448) | | | | | | | | | | | | 7.00 | | | | | | (1,017) | | | | | | (1,010) | | | | | | | | |
Loans, net of deferred fees | | | | $ | 51,701 | | | | | $ | 494,357 | | | | | $ | 546,058 | | | | | | | | | | | $ | 71,328 | | | | | $ | 458,823 | | | | | $ | 530,151 | | | | | | | | |
|
After 1 Year | ||||||||||||||||||||||||
Through 5 Years | After 5 Years | |||||||||||||||||||||||
One Year | Fixed | Floating | Fixed | Floating | ||||||||||||||||||||
or Less | Rate | Rate | Rate | Rate | Total | |||||||||||||||||||
Construction and land development | $ | 31,473 | $ | 15,016 | $ | 402 | $ | 14,312 | $ | 6,629 | $ | 67,832 | ||||||||||||
Commercial | 48,606 | 29,488 | 10,563 | 9,892 | 26,436 | 124,985 | ||||||||||||||||||
Total | $ | 80,079 | $ | 44,504 | $ | 10,965 | $ | 24,204 | $ | 33,065 | $ | 192,817 |
| | | | | | | | | After 1 Year Through 5 Years | | | After 5 Years | | | | | | | | ||||||||||||||||||
| | | One Year or Less | | | Fixed Rate | | | Floating Rate | | | Fixed Rate | | | Floating Rate | | | Total | | ||||||||||||||||||
Construction and land development | | | | $ | 46,002 | | | | | $ | 29,948 | | | | | $ | 7,351 | | | | | $ | 2,303 | | | | | $ | 5,463 | | | | | $ | 91,067 | | |
Commercial | | | | | 63,933 | | | | | | 16,448 | | | | | | 8,154 | | | | | | 3,026 | | | | | | 23,804 | | | | | | 115,365 | | |
Total | | | | $ | 109,935 | | | | | $ | 46,396 | | | | | $ | 15,505 | | | | | $ | 5,329 | | | | | $ | 29,267 | | | | | $ | 206,432 | | |
|
The following table presents a comparison of non-covered nonperforming assets as of December 31, (in thousands):
2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||
Nonaccrual loans | $ | 4,173 | $ | 5,652 | $ | 7,814 | $ | 7,628 | $ | 4,541 | ||||||||||
Loans past due 90 days and accruing interest | - | - | - | - | 32 | |||||||||||||||
Total nonperforming loans | 4,173 | 5,652 | 7,814 | 7,628 | 4,573 | |||||||||||||||
Other real estate owned | 10,096 | 13,051 | 9,579 | 13,200 | 13,620 | |||||||||||||||
Total nonperforming assets | $ | 14,269 | $ | 18,703 | $ | 17,393 | $ | 20,828 | $ | 18,193 | ||||||||||
SBA guaranteed amounts included in nonaccrual loans | $ | 3,541 | $ | 4,664 | $ | 1,852 | $ | 2,607 | $ | 2,462 | ||||||||||
Allowance for non-covered loan losses to nonperforming loans | 201.80 | % | 130.80 | % | 90.08 | % | 91.33 | % | 137.66 | % | ||||||||||
Allowance for non-covered loan losses to total non-covered loans | 1.06 | % | 1.11 | % | 1.42 | % | 1.52 | % | 1.54 | % | ||||||||||
Nonperforming assets to total non-covered assets | 1.42 | % | 2.13 | % | 2.63 | % | 3.20 | % | 3.44 | % | ||||||||||
Nonperforming assets excluding SBA guaranteed loans to total non-covered assets | 1.07 | % | 1.60 | % | 2.35 | % | 2.80 | % | 2.98 | % | ||||||||||
Nonperforming assets to total non-covered loans and OREO | 1.77 | % | 2.76 | % | 3.45 | % | 4.41 | % | 4.30 | % | ||||||||||
Nonperforming assets excluding SBA guaranteed loans to total non-covered loans and OREO | 1.33 | % | 2.07 | % | 3.08 | % | 3.86 | % | 3.72 | % |
| | | 2016 | | | 2015 | | | 2014 | | | 2013 | | | 2012 | | |||||||||||||||
Nonaccrual loans | | | | $ | 3,795 | | | | | $ | 4,173 | | | | | $ | 5,652 | | | | | $ | 7,814 | | | | | $ | 7,628 | | |
Loans past due 90 days and accruing interest | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Total nonperforming loans | | | | | 3,795 | | | | | | 4,173 | | | | | | 5,652 | | | | | | 7,814 | | | | | | 7,628 | | |
Other real estate owned | | | | | 8,617 | | | | | | 10,096 | | | | | | 13,051 | | | | | | 9,579 | | | | | | 13,200 | | |
Total nonperforming assets | | | | $ | 12,412 | | | | | $ | 14,269 | | | | | $ | 18,703 | | | | | $ | 17,393 | | | | | $ | 20,828 | | |
Troubled debt restructurings | | | | $ | 688 | | | | | $ | 699 | | | | | $ | — | | | | | $ | 5,933 | | | | | $ | 4,327 | | |
SBA guaranteed amounts included in nonaccrual loans | | | | $ | 2,173 | | | | | $ | 3,541 | | | | | $ | 4,664 | | | | | $ | 1,852 | | | | | $ | 2,607 | | |
Allowance for non-covered loan losses to nonperforming loans | | | | | 226.88% | | | | | | 201.80% | | | | | | 130.80% | | | | | | 90.08% | | | | | | 91.33% | | |
Allowance for non-covered loan losses to total non-covered loans | | | | | 0.95% | | | | | | 1.06% | | | | | | 1.11% | | | | | | 1.42% | | | | | | 1.52% | | |
Nonperforming assets to total non-covered assets | | | | | 1.11% | | | | | | 1.42% | | | | | | 2.13% | | | | | | 2.63% | | | | | | 3.20% | | |
Nonperforming assets excluding SBA guaranteed loans to total non-covered assets | | | | | 0.92% | | | | | | 1.07% | | | | | | 1.60% | | | | | | 2.35% | | | | | | 2.80% | | |
Nonperforming assets to total non-covered loans and OREO | | | | | 1.36% | | | | | | 1.77% | | | | | | 2.76% | | | | | | 3.45% | | | | | | 4.41% | | |
Nonperforming assets excluding SBA guaranteed loans to total non-covered loans and OREO | | | | | 1.12% | | | | | | 1.33% | | | | | | 2.07% | | | | | | 3.08% | | | | | | 3.86% | | |
During the year ending December 31, 2014, there were no loans modified in troubled debt restructurings. No TDRs defaulted during the year ending December 31, 2014, which had been modified in the previous 12 months.
2016.
$3.0 million.
2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||
Nonaccrual loans | $ | 698 | $ | 859 | $ | 1,622 | $ | 3,569 | $ | 3,340 | ||||||||||
Loans past due 90 days and accruing interest | - | - | - | - | 136 | |||||||||||||||
Total nonperforming loans | 698 | 859 | 1,622 | 3,569 | 3,476 | |||||||||||||||
Other real estate owned | 343 | - | 2,213 | 636 | 636 | |||||||||||||||
Total nonperforming assets | $ | 1,041 | $ | 859 | $ | 3,835 | $ | 4,205 | $ | 4,112 |
| | | 2016 | | | 2015 | | | 2014 | | | 2013 | | | 2012 | | |||||||||||||||
Nonaccrual loans | | | | $ | 850 | | | | | $ | 698 | | | | | $ | 859 | | | | | $ | 1,622 | | | | | $ | 3,569 | | |
Loans past due 90 days and accruing interest | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Total nonperforming loans | | | | | 850 | | | | | | 698 | | | | | | 859 | | | | | | 1,622 | | | | | | 3,569 | | |
Other real estate owned | | | | | — | | | | | | 343 | | | | | | — | | | | | | 2,213 | | | | | | 636 | | |
Total nonperforming assets | | | | $ | 850 | | | | | $ | 1,041 | | | | | $ | 859 | | | | | $ | 3,835 | | | | | $ | 4,205 | | |
|
Our allowance for loan losses is established through charges to earnings in the form of a provision for loan losses. Management evaluates the allowance at least quarterly. In addition, on a quarterly basis our board of directors reviews our loan portfolio, evaluates credit quality, reviews the loan loss provision and the allowance for loan and lease losses and makes changes as may be required. In evaluating the allowance, management and the Board of Directors consider the growth, composition and industry diversification of the portfolio, historical loan loss experience, current delinquency levels and all other known factors affecting loan collectability.
as of December 31, | ||||||||||||||||||||||||||||||||||||||||
2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||||||||||||||||||||||
Percent of | Percent of | Percent of | Percent of | Percent of | ||||||||||||||||||||||||||||||||||||
Allowance | Loans by | Allowance | Loans by | Allowance | Loans by | Allowance | Loans by | Allowance | Loans by | |||||||||||||||||||||||||||||||
for Loan | Category to | for Loan | Category to | for Loan | Category to | for Loan | Category to | for Loan | Category to | |||||||||||||||||||||||||||||||
Losses | Total Loans | Losses | Total Loans | Losses | Total Loans | Losses | Total Loans | Losses | Total Loans | |||||||||||||||||||||||||||||||
Commercial real estate | $ | 2,407 | 51.0 | % | $ | 1,978 | 51.0 | % | $ | 1,844 | 52.3 | % | $ | 2,451 | 48.7 | % | $ | 1,638 | 48.2 | % | ||||||||||||||||||||
Construction and land development | 865 | 8.2 | % | 1,644 | 8.2 | % | 1,068 | 7.1 | % | 970 | 8.7 | % | 1,367 | 8.6 | % | |||||||||||||||||||||||||
Residential 1-4 family | 1,408 | 25.5 | % | 1,339 | 24.3 | % | 1,302 | 21.1 | % | 1,163 | 23.1 | % | 1,021 | 24.1 | % | |||||||||||||||||||||||||
Commercial loans | 3,041 | 15.1 | % | 2,063 | 16.3 | % | 2,797 | 19.2 | % | 2,153 | 19.2 | % | 2,227 | 18.7 | % | |||||||||||||||||||||||||
Consumer loans | 48 | 0.2 | % | 53 | 0.2 | % | 60 | 0.3 | % | 44 | 0.3 | % | 42 | 0.4 | % | |||||||||||||||||||||||||
Total allocated allowance | 7,769 | 100.0 | % | 7,077 | 100.0 | % | 7,071 | 100.0 | % | 6,781 | 100.0 | % | 6,295 | 100.0 | % | |||||||||||||||||||||||||
Unallocated allowance | 652 | 337 | 19 | 285 | - | |||||||||||||||||||||||||||||||||||
Toal | $ | 8,421 | $ | 7,414 | $ | 7,090 | $ | 7,066 | $ | 6,295 |
| | | As of December 31, | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | | 2016 | | | 2015 | | | 2014 | | | 2013 | | | 2012 | | |||||||||||||||||||||||||||||||||||||||||||||
| | | Allowance for Loan Losses | | | Percent of Loans by Category to Total Loans | | | Allowance for Loan Losses | | | Percent of Loans by Category to Total Loans | | | Allowance for Loan Losses | | | Percent of Loans by Category to Total Loans | | | Allowance for Loan Losses | | | Percent of Loans by Category to Total Loans | | | Allowance for Loan Losses | | | Percent of Loans by Category to Total Loans | | ||||||||||||||||||||||||||||||
Commercial real estate | | | | $ | 2,389 | | | | | | 50.0% | | | | | $ | 2,407 | | | | | | 51.0% | | | | | $ | 1,978 | | | | | | 51.0% | | | | | $ | 1,844 | | | | | | 52.3% | | | | | $ | 2,451 | | | | | | 48.7% | | |
Construction and land development | | | | | 752 | | | | | | 9.7% | | | | | | 865 | | | | | | 8.2% | | | | | | 1,644 | | | | | | 8.2% | | | | | | 1,068 | | | | | | 7.1% | | | | | | 970 | | | | | | 8.7% | | |
Residential 1 – 4 family | | | | | 1,279 | | | | | | 27.9% | | | | | | 1,408 | | | | | | 25.5% | | | | | | 1,339 | | | | | | 24.3% | | | | | | 1,302 | | | | | | 21.1% | | | | | | 1,163 | | | | | | 23.1% | | |
Commercial loans | | | | | 3,366 | | | | | | 12.3% | | | | | | 3,041 | | | | | | 15.1% | | | | | | 2,063 | | | | | | 16.3% | | | | | | 2,797 | | | | | | 19.2% | | | | | | 2,153 | | | | | | 19.2% | | |
Consumer loans | | | | | 78 | | | | | | 0.1% | | | | | | 48 | | | | | | 0.2% | | | | | | 53 | | | | | | 0.2% | | | | | | 60 | | | | | | 0.3% | | | | | | 44 | | | | | | 0.3% | | |
Total allocated allowance | | | | | 7,864 | | | | | | 100.0% | | | | | | 7,769 | | | | | | 100.0% | | | | | | 7,077 | | | | | | 100.0% | | | | | | 7,071 | | | | | | 100.0% | | | | | | 6,781 | | | | | | 100.0% | | |
Unallocated allowance | | | | | 746 | | | | | | | | | | | | 652 | | | | | | | | | | | | 337 | | | | | | | | | | | | 19 | | | | | | | | | | | | 285 | | | | | | | | |
Total | | | | $ | 8,610 | | | | | | | | | | | $ | 8,421 | | | | | | | | | | | $ | 7,414 | | | | | | | | | | | $ | 7,090 | | | | | | | | | | | $ | 7,066 | | | | | | | | |
|
For the Year Ended | For the Year Ended | For the Year Ended | For the Year Ended | For the Year Ended | ||||||||||||||||
December 31, 2015 | December 31, 2014 | December 31, 2013 | December 31, 2012 | December 31, 2011 | ||||||||||||||||
Balance, beginning of period | $ | 7,414 | $ | 7,090 | $ | 7,066 | $ | 6,295 | $ | 5,599 | ||||||||||
Provision charged to operations | 3,171 | 3,444 | 3,615 | 6,195 | 8,492 | |||||||||||||||
Recoveries credited to allowance | 509 | 150 | 464 | 782 | 199 | |||||||||||||||
Total | 11,094 | 10,684 | 11,145 | 13,272 | 14,290 | |||||||||||||||
Loans charged off: | ||||||||||||||||||||
Real estate - commercial | 1,067 | 573 | 199 | 1,331 | 1,163 | |||||||||||||||
Real estate - construction, land and other | - | 250 | 650 | 2,119 | 460 | |||||||||||||||
Real estate - residential 1-4 family | 413 | 449 | 776 | 1,071 | 2,341 | |||||||||||||||
Commercial | 1,174 | 1,998 | 2,286 | 1,676 | 3,975 | |||||||||||||||
Consumer | 19 | - | 144 | 9 | 56 | |||||||||||||||
Total loans charged off | 2,673 | 3,270 | 4,055 | 6,206 | 7,995 | |||||||||||||||
Balance, end of period | $ | 8,421 | $ | 7,414 | $ | 7,090 | $ | 7,066 | $ | 6,295 | ||||||||||
Net charge-offs to average loans, net of unearned income | 0.28 | % | 0.51 | % | 0.69 | % | 1.03 | % | 1.63 | % |
| | | For the Year Ended December 31, 2016 | | | For the Year Ended December 31, 2015 | | | For the Year Ended December 31, 2014 | | | For the Year Ended December 31, 2013 | | | For the Year Ended December 31, 2012 | | |||||||||||||||
Balance, beginning of period | | | | $ | 8,421 | | | | | $ | 7,414 | | | | | $ | 7,090 | | | | | $ | 7,066 | | | | | $ | 6,295 | | |
Provision charged to operations | | | | | 4,912 | | | | | | 3,171 | | | | | | 3,444 | | | | | | 3,615 | | | | | | 6,195 | | |
Recoveries credited to allowance: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Real estate – commercial | | | | | 8 | | | | | | 36 | | | | | | 33 | | | | | | 159 | | | | | | 297 | | |
Real estate – construction, land and other | | | | | 121 | | | | | | 139 | | | | | | 4 | | | | | | 7 | | | | | | 13 | | |
Real estate – residential 1 – 4 family | | | | | 10 | | | | | | 242 | | | | | | 21 | | | | | | 129 | | | | | | 85 | | |
Commercial | | | | | 96 | | | | | | 91 | | | | | | 89 | | | | | | 169 | | | | | | 369 | | |
Consumer | | | | | 4 | | | | | | 1 | | | | | | 3 | | | | | | — | | | | | | 18 | | |
Total recoveries | | | | | 239 | | | | | | 509 | | | | | | 150 | | | | | | 464 | | | | | | 782 | | |
Total | | | | | 13,572 | | | | | | 11,094 | | | | | | 10,684 | | | | | | 11,145 | | | | | | 13,272 | | |
Loans charged off: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Real estate – commercial | | | | | 799 | | | | | | 1,067 | | | | | | 573 | | | | | | 199 | | | | | | 1,331 | | |
Real estate – construction, land and other | | | | | 449 | | | | | | — | | | | | | 250 | | | | | | 650 | | | | | | 2,119 | | |
Real estate – residential 1 – 4 family | | | | | 22 | | | | | | 413 | | | | | | 449 | | | | | | 776 | | | | | | 1,071 | | |
Commercial | | | | | 3,370 | | | | | | 1,174 | | | | | | 1,998 | | | | | | 2,286 | | | | | | 1,676 | | |
Consumer | | | | | 322 | | | | | | 19 | | | | | | — | | | | | | 144 | | | | | | 9 | | |
Total loans charged off | | | | | 4,962 | | | | | | 2,673 | | | | | | 3,270 | | | | | | 4,055 | | | | | | 6,206 | | |
Net charge offs | | | | | 4,723 | | | | | | 2,164 | | | | | | 3,120 | | | | | | 3,591 | | | | | | 5,424 | | |
Balance, end of period | | | | $ | 8,610 | | | | | $ | 8,421 | | | | | $ | 7,414 | | | | | $ | 7,090 | | | | | $ | 7,066 | | |
Net charge-offs to average loans, net of unearned income | | | | | 0.53% | | | | | | 0.28% | | | | | | 0.51% | | | | | | 0.69% | | | | | | 1.03% | | |
We classify our securities as either: “held-to-maturity” or “available-for-sale.” Debt securities that Southern National has the positive intent and ability to hold to maturity are classified as held to maturity and carried at amortized cost. Securities classified as available for sale are those debt and equity securities that may be sold in response to changes in interest rates, liquidity needs or other similar factors. Securities available for sale are carried at fair value, with unrealized gains or losses net of deferred taxes, included in accumulated other comprehensive income (loss) in stockholders'stockholders’ equity. Securities totaling $96.8$85.3 million were in the held to maturity portfolio at December 31, 2015,2016, compared to $94.1$96.8 million at December 31, 2014.2015. Securities totaling $4.2$3.9 million were in the available for sale portfolio at December 31, 2015,2016, compared to $2.3$4.2 million at December 31, 2014.
2015.
Previously | ||||||||||||||||||||||||||||||
% of Current | Recognized | |||||||||||||||||||||||||||||
Defaults and | Cumulative | |||||||||||||||||||||||||||||
Ratings | Estimated | Deferrals to | Other | |||||||||||||||||||||||||||
Tranche | When Purchased | Current Ratings | Fair | Total | Comprehensive | |||||||||||||||||||||||||
Security | Level | Moody's | Fitch | Moody's | Fitch | Par Value | Book Value | Value | Collateral | Loss (1) | ||||||||||||||||||||
Held to Maturity | (in thousands) | |||||||||||||||||||||||||||||
ALESCO VII A1B | Senior | Aaa | AAA | A1 | A | $ | 4,462 | $ | 4,081 | $ | 3,733 | 13 | % | $ | 251 | |||||||||||||||
MMCF III B | Senior Sub | A3 | A- | Ba1 | BB | 276 | 271 | 238 | 32 | % | 5 | |||||||||||||||||||
4,738 | 4,352 | 3,971 | $ | 256 | ||||||||||||||||||||||||||
Cumulative OTTI | ||||||||||||||||||||||||||||||
Available for Sale | Related to | |||||||||||||||||||||||||||||
Other Than Temporarily Impaired: | Credit Loss (2) | |||||||||||||||||||||||||||||
TPREF FUNDING II | Mezzanine | A1 | A- | Caa3 | C | 1,500 | 1,100 | 680 | 36 | % | 400 | |||||||||||||||||||
ALESCO V C1 | Mezzanine | A2 | A | Caa3 | C | 2,150 | 1,490 | 1,217 | 13 | % | 660 | |||||||||||||||||||
3,650 | 2,590 | 1,897 | $ | 1,060 | ||||||||||||||||||||||||||
Total | $ | 8,388 | $ | 6,942 | $ | 5,868 |
| | | Tranche Level | | | Ratings When Purchased | | | Current Ratings | | | | | | | | | | | | | | | Estimated Fair Value | | | % of Current Defaults and Deferrals to Total Collateral | | | Previously Recognized Cumulative Other Comprehensive Loss(1) | | | | | |||||||||||||||
Security | | | Moody’s | | | Fitch | | | Moody’s | | | Fitch | | | Par Value | | | Book Value | | | | | |||||||||||||||||||||||||||
Held to Maturity | | | | | | (in thousands) | | | | | | ||||||||||||||||||||||||||||||||||||||
ALESCO VII A1B | | | Senior | | | Aaa | | | AAA | | | A1 | | | A | | | | $ | 3,688 | | | | | $ | 3,389 | | | | | $ | 3,275 | | | | | | 11% | | | | | $ | 239 | | | | ||
MMCF III B | | | Senior Sub | | | A3 | | | A- | | | Ba1 | | | BB | | | | | 269 | | | | | | 265 | | | | | | 233 | | | | | | 32% | | | | | | 4 | | | | ||
| | | | | | | | | | | | | | | | | | | | 3,957 | | | | | | 3,654 | | | | | | 3,508 | | | | | | | | | | | $ | 243 | | | | ||
Available for Sale Other Than Temporarily Impaired: | | | | | | Cumulative OTTI Related to Credit Loss(2) | | | |||||||||||||||||||||||||||||||||||||||||
TPREF FUNDING II | | | Mezzanine | | | A1 | | | A- | | | Caa3 | | | C | | | | | 1,500 | | | | | | 1,099 | | | | | | 623 | | | | | | 37% | | | | | $ | 400 | | | | ||
ALESCO V C1 | | | Mezzanine | | | A2 | | | A | | | Caa3 | | | C | | | | | 2,150 | | | | | | 1,491 | | | | | | 1,036 | | | | | | 10% | | | | | | 659 | | | | ||
| | | | | | | | | | | | | | | | | | | | 3,650 | | | | | | 2,590 | | | | | | 1,659 | | | | | | | | | | | $ | 1,059 | | | | ||
Total | | | | | | | | | | | | | | | | | | | $ | 7,607 | | | | | $ | 6,244 | | | | | $ | 5,167 | | | | | | | | | | | | | | | | ||
|
2014.
Rating | Amount | ||||||
Service | Rating | (in thousands) | |||||
Moody's | Aaa | $ | 505 | ||||
Moody's | Aa2 | 3,623 | |||||
Moody's | Aa3 | 711 | |||||
Standard & Poor's | AAA | 3,095 | |||||
Standard & Poor's | AA+ | 580 | |||||
Standard & Poor's | AA | 5,993 | |||||
Standard & Poor's | AA- | 599 | |||||
$ | 15,106 |
| Rating Service | | | Rating | | | Amount (in thousands) | | |||
| Moody’s | | | Aaa | | | | $ | 505 | | |
| Moody’s | | | Aa2 | | | | | 3,616 | | |
| Moody’s | | | Aa3 | | | | | 706 | | |
| Standard & Poor’s | | | AAA | | | | | 3,063 | | |
| Standard & Poor’s | | | AA+ | | | | | 580 | | |
| Standard & Poor’s | | | AA | | | | | 5,900 | | |
| Standard & Poor’s | | | AA- | | | | | 595 | | |
| | | | | | | | $ | 14,965 | | |
|
| | | Securities Available for Sale | | |||||||||||||||
| | | Amortized Cost | | | Estimated Fair Value | | | Weighted Average Yield | | |||||||||
Obligations of states and political subdivisions | | | | | | | | | | | | | | | | | | | |
Due after ten years | | | | $ | 2,280 | | | | | $ | 2,259 | | | | | | 2.63% | | |
Trust preferred securities | | | | | | | | | | | | | | | | | | | |
Due after ten years | | | | | 2,590 | | | | | | 1,659 | | | | | | 2.70% | | |
| | | | $ | 4,870 | | | | | $ | 3,918 | | | | | | 2.67% | | |
|
Securities Available for Sale | ||||||||||||
Weighted | ||||||||||||
Amortized | Estimated | Average | ||||||||||
Cost | Fair Value | Yield | ||||||||||
Obligations of states and political subdivisions | ||||||||||||
Due after ten years | $ | 2,287 | $ | 2,312 | 2.63 | % | ||||||
Trust preferred securities | ||||||||||||
Due after ten years | 2,590 | 1,897 | 2.23 | % | ||||||||
$ | 4,877 | $ | 4,209 | 2.42 | % |
Securities Held to Maturity | ||||||||||||
Weighted | ||||||||||||
Amortized | Estimated | Average | ||||||||||
Cost | Fair Value | Yield | ||||||||||
Residential government-sponsored mortgage-backed securities | ||||||||||||
Due after five years through ten years | $ | 1,169 | $ | 1,259 | 5.02 | % | ||||||
Due after ten years | 19,582 | 19,929 | 2.69 | % | ||||||||
Total residential government-sponsored mortgage-backed securities | 20,751 | 21,188 | 2.82 | % | ||||||||
Residential government-sponsored collateralized mortgage obligations | ||||||||||||
Due after ten years | 2,946 | 2,880 | 1.75 | % | ||||||||
Government-sponsored agency securities | ||||||||||||
Due after five years through ten years | 4,996 | 4,934 | 2.63 | % | ||||||||
Due after ten years | 50,941 | 50,607 | 3.22 | % | ||||||||
55,937 | 55,541 | 3.17 | % | |||||||||
Obligations of states and political subdivisions | ||||||||||||
Due after five years through ten years | 7,204 | 7,272 | 2.14 | % | ||||||||
Due after ten years | 5,590 | 5,612 | 2.22 | % | ||||||||
12,794 | 12,884 | 2.17 | % | |||||||||
Trust preferred securities | ||||||||||||
Due after ten years | 4,352 | 3,971 | 0.96 | % | ||||||||
$ | 96,780 | $ | 96,464 | 2.82 | % |
| | | Securities Held to Maturity | | |||||||||||||||
| | | Amortized Cost | | | Estimated Fair Value | | | Weighted Average Yield | | |||||||||
Residential government-sponsored mortgage-backed securities | | | | | | | | | | | | | | | | | | | |
Due after one year through five years | | | | $ | 152 | | | | | $ | 163 | | | | | | 5.77% | | |
Due after five years through ten years | | | | | 2,518 | | | | | | 2,555 | | | | | | 2.92% | | |
Due after ten years | | | | | 15,924 | | | | | | 16,066 | | | | | | 2.57% | | |
Total residential government-sponsored mortgage-backed securities | | | | | 18,594 | | | | | | 18,784 | | | | | | 2.64% | | |
Residential government-sponsored collateralized mortgage obligations | | | | | | | | | | | | | | | | | | | |
Due after ten years | | | | | 2,371 | | | | | | 2,317 | | | | | | 1.70% | | |
Government-sponsored agency securities | | | | | | | | | | | | | | | | | | | |
Due after ten years | | | | | 47,975 | | | | | | 46,138 | | | | | | 2.90% | | |
Obligations of states and political subdivisions | | | | | | | | | | | | | | | | | | | |
Due after one year through five years | | | | | 1,459 | | | | | | 1,440 | | | | | | 1.71% | | |
Due after five years through ten years | | | | | 5,726 | | | | | | 5,720 | | | | | | 2.26% | | |
Due after ten years | | | | | 5,521 | | | | | | 5,437 | | | | | | 2.23% | | |
| | | | | 12,706 | | | | | | 12,597 | | | | | | 2.18% | | |
Trust preferred securities | | | | | | | | | | | | | | | | | | | |
Due after ten years | | | | | 3,654 | | | | | | 3,508 | | | | | | 2.70% | | |
| | | | $ | 85,300 | | | | | $ | 83,344 | | | | | | 2.70% | | |
|
December 31, | ||||||||||||
2015 | 2014 | 2013 | ||||||||||
Available for sale securities: | ||||||||||||
Obligations of states and political subdivisions | $ | 2,312 | $ | 2,285 | $ | 1,993 | ||||||
Trust preferred securities | 1,897 | - | - | |||||||||
$ | 4,209 | $ | 2,285 | $ | 1,993 | |||||||
Held to maturity securities: | ||||||||||||
Residential government-sponsored mortgage-backed securities | $ | 20,751 | $ | 22,897 | $ | 25,609 | ||||||
Residential government-sponsored collateralized mortgage obligations | 2,946 | 3,564 | 4,295 | |||||||||
Government-sponsored agency securities | 55,937 | 44,949 | 29,971 | |||||||||
Obligations of states and political subdivisions | 12,794 | 15,531 | 14,388 | |||||||||
Other residential collateralized mortgage obligations | - | 599 | 659 | |||||||||
Trust preferred securities | 4,352 | 6,518 | 7,521 | |||||||||
$ | 96,780 | $ | 94,058 | $ | 82,443 |
| | | December 31, | | |||||||||||||||
| | | 2016 | | | 2015 | | | 2014 | | |||||||||
Available for sale securities: | | | | | | | | | | | | | | | | | | | |
Obligations of states and political subdivisions | | | | $ | 2,259 | | | | | $ | 2,312 | | | | | $ | 2,285 | | |
Trust preferred securities | | | | | 1,659 | | | | | | 1,897 | | | | | | — | | |
| | | | $ | 3,918 | | | | | $ | 4,209 | | | | | $ | 2,285 | | |
Held to maturity securities: | | | | | | | | | | | | | | | | | | | |
Residential government-sponsored mortgage-backed securities | | | | $ | 18,594 | | | | | $ | 20,751 | | | | | $ | 22,897 | | |
Residential government-sponsored collateralized mortgage obligations | | | | | 2,371 | | | | | | 2,946 | | | | | | 3,564 | | |
Government-sponsored agency securities | | | | | 47,975 | | | | | | 55,937 | | | | | | 44,949 | | |
Obligations of states and political subdivisions | | | | | 12,706 | | | | | | 12,794 | | | | | | 15,531 | | |
Other residential collateralized mortgage obligations | | | | | — | | | | | | — | | | | | | 599 | | |
Trust preferred securities | | | | | 3,654 | | | | | | 4,352 | | | | | | 6,518 | | |
| | | | $ | 85,300 | | | | | $ | 96,780 | | | | | $ | 94,058 | | |
|
The following table sets forth the average balance and average rate paid on each of the deposit categories for the years ended December 31, 2016, 2015 2014 and 2013:
2015 | 2014 | 2013 | ||||||||||||||||||||||
Average | Average | Average | Average | Average | Average | |||||||||||||||||||
Balance | Rate | Balance | Rate | Balance | Rate | |||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
Noninterest-bearing deposits | $ | 75,129 | $ | 59,205 | $ | 44,989 | ||||||||||||||||||
Interest-bearing deposits: Savings accounts | 44,661 | 0.63 | % | 29,034 | 0.62 | % | 12,323 | 0.59 | % | |||||||||||||||
Money market accounts | 138,559 | 0.35 | % | 130,473 | 0.28 | % | 147,319 | 0.34 | % | |||||||||||||||
NOW accounts | 24,306 | 0.10 | % | 23,574 | 0.11 | % | 23,723 | 0.24 | % | |||||||||||||||
Time deposits | 509,900 | 1.11 | % | 376,395 | 0.90 | % | 319,495 | 1.07 | % | |||||||||||||||
Total interest-bearing deposits | 717,426 | 0.90 | % | 559,476 | 0.71 | % | 502,860 | 0.80 | % | |||||||||||||||
Total deposits | $ | 792,555 | $ | 618,681 | $ | 547,849 |
2014:
| | | 2016 | | | 2015 | | | 2014 | | |||||||||||||||||||||||||||
| | | Average Balance | | | Average Rate | | | Average Balance | | | Average Rate | | | Average Balance | | | Average Rate | | ||||||||||||||||||
| | | (in thousands) | | |||||||||||||||||||||||||||||||||
Noninterest-bearing deposits | | | | $ | 88,413 | | | | | | | | | | | $ | 75,129 | | | | | | | | | | | $ | 59,205 | | | | | | | | |
Interest-bearing deposits: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Savings accounts | | | | | 51,670 | | | | | | 0.64% | | | | | | 44,661 | | | | | | 0.63% | | | | | | 29,034 | | | | | | 0.62% | | |
Money market accounts | | | | | 127,121 | | | | | | 0.36% | | | | | | 138,559 | | | | | | 0.35% | | | | | | 130,473 | | | | | | 0.28% | | |
NOW and other demand accounts | | | | | 36,470 | | | | | | 0.16% | | | | | | 24,306 | | | | | | 0.10% | | | | | | 23,574 | | | | | | 0.11% | | |
Time deposits | | | | | 579,157 | | | | | | 1.25% | | | | | | 509,900 | | | | | | 1.11% | | | | | | 376,395 | | | | | | 0.90% | | |
Total interest-bearing deposits | | | | | 794,418 | | | | | | 1.02% | | | | | | 717,426 | | | | | | 0.90% | | | | | | 559,476 | | | | | | 0.71% | | |
Total deposits | | | | $ | 882,831 | | | | | | | | | | | $ | 792,555 | | | | | | | | | | | $ | 618,681 | | | | | | | | |
|
| Within 3 Months | | | 3 to 6 Months | | | 6 to 12 Months | | | Over 12 Months | | | Total | |
| $ 3,778 | | | $ 19,926 | | | $ 44,179 | | | $ 79,686 | | | $ 147,569 | |
transferred those accounts into interest-bearing cash management accounts. Other short-term borrowings consist of the following (in thousands):
| | | December 31, | | |||||||||||||||
| | | 2016 | | | 2015 | | | 2014 | | |||||||||
FHLB overnight advances | | | | $ | 50,000 | | | | | $ | 49,000 | | | | | $ | 15,250 | | |
Other short-term FHLB advances maturing 3/27/17 | | | | | 10,000 | | | | | | — | | | | | | — | | |
Other short-term FHLB advances maturing 5/4/2017 | | | | | 10,000 | | | | | | — | | | | | | — | | |
Other short-term FHLB advances maturing 6/5/2017 | | | | | 10,000 | | | | | | — | | | | | | — | | |
Other short-term FHLB advances maturing 6/19/2017 | | | | | 5,000 | | | | | | — | | | | | | — | | |
Other short-term FHLB advances maturing 12/15/2017 | | | | | 10,000 | | | | | | — | | | | | | — | | |
Other short-term FHLB advances maturing 11/4/2016 | | | | | — | | | | | | 10,000 | | | | | | — | | |
Securities sold under agreements to repurchase | | | | | — | | | | | | 10,381 | | | | | | 13,794 | | |
Total | | | | $ | 95,000 | | | | | $ | 69,381 | | | | | $ | 29,044 | | |
Weighted average interest rate at year end | | | | | 0.86% | | | | | | 0.51% | | | | | | 0.65% | | |
For the periods ended December 31, 2016, 2015 and 2014: | | | | | | | | | | | | | | | | | | | |
Average outstanding balance | | | | $ | 66,864 | | | | | $ | 34,673 | | | | | $ | 37,810 | | |
Average interest rate during the year | | | | | 0.74% | | | | | | 0.76% | | | | | | 0.51% | | |
Maximum month-end outstanding balance | | | | $ | 95,000 | | | | | $ | 69,381 | | | | | $ | 66,852 | | |
The following tables are based on an analysis prepared by FTN Financial setting forth an analysis of our interest rate risk as measured by the estimated change in EVE resulting from instantaneous and sustained parallel shifts in the yield curve (plus 400 basis points or minus 200 basis points, measured in 100 basis point increments) as of December 31, 20152016 and as of December 31, 2014,2015, and all changes are within our ALM Policy guidelines.
Sensitivity of Economic Value of Equity | ||||||||||||||||||||
As of December 31, 2015 | ||||||||||||||||||||
Economic Value of | ||||||||||||||||||||
Change in | Economic Value of Equity | Equity as a % of | ||||||||||||||||||
Interest Rates | ||||||||||||||||||||
in Basis Points | $ Change | % Change | Total | Equity | ||||||||||||||||
(Rate Shock) | Amount | From Base | From Base | Assets | Book Value | |||||||||||||||
(Dollar amounts in thousands) | ||||||||||||||||||||
Up 400 | $ | 108,441 | $ | (34,579 | ) | -24.18 | % | 10.47 | % | 90.64 | % | |||||||||
Up 300 | 115,906 | (27,114 | ) | -18.96 | % | 11.19 | % | 96.88 | % | |||||||||||
Up 200 | 124,098 | (18,922 | ) | -13.23 | % | 11.98 | % | 103.73 | % | |||||||||||
Up 100 | 133,386 | (9,634 | ) | -6.74 | % | 12.87 | % | 111.49 | % | |||||||||||
Base | 143,020 | - | 0.00 | % | 13.80 | % | 119.55 | % | ||||||||||||
Down 100 | 130,510 | (12,510 | ) | -8.75 | % | 12.60 | % | 109.09 | % | |||||||||||
Down 200 | 122,637 | (20,383 | ) | -14.25 | % | 11.84 | % | 102.51 | % |
Sensitivity of Economic Value of Equity | ||||||||||||||||||||
As of December 31, 2014 | ||||||||||||||||||||
Economic Value of | ||||||||||||||||||||
Change in | Economic Value of Equity | Equity as a % of | ||||||||||||||||||
Interest Rates | ||||||||||||||||||||
in Basis Points | $ Change | % Change | Total | Equity | ||||||||||||||||
(Rate Shock) | Amount | From Base | From Base | Assets | Book Value | |||||||||||||||
(Dollar amounts in thousands) | ||||||||||||||||||||
Up 400 | $ | 114,756 | $ | (22,806 | ) | -16.58 | % | 12.52 | % | 100.68 | % | |||||||||
Up 300 | 118,938 | (18,624 | ) | -13.54 | % | 12.98 | % | 104.35 | % | |||||||||||
Up 200 | 123,724 | (13,838 | ) | -10.06 | % | 13.50 | % | 108.55 | % | |||||||||||
Up 100 | 129,926 | (7,636 | ) | -5.55 | % | 14.17 | % | 113.99 | % | |||||||||||
Base | 137,562 | - | 0.00 | % | 15.01 | % | 120.69 | % | ||||||||||||
Down 100 | 129,927 | (7,635 | ) | -5.55 | % | 14.17 | % | 113.99 | % | |||||||||||
Down 200 | 123,019 | (14,543 | ) | -10.57 | % | 13.42 | % | 107.93 | % |
| | | Sensitivity of Economic Value of Equity As of December 31, 2016 | | |||||||||||||||||||||||||||
| | | Economic Value of Equity | | | Economic Value of Equity as a % of | | ||||||||||||||||||||||||
Change in Interest Rates in Basis Points (Rate Shock) | | | Amount | | | $ Change From Base | | | % Change From Base | | | Total Assets | | | Equity Book Value | | |||||||||||||||
| | | (Dollar amounts in thousands) | | |||||||||||||||||||||||||||
Up 400 | | | | $ | 116,120 | | | | | $ | (37,494) | | | | | | -24.41% | | | | | | 10.16% | | | | | | 91.91% | | |
Up 300 | | | | | 123,778 | | | | | | (29,836) | | | | | | -19.42% | | | | | | 10.83% | | | | | | 97.97% | | |
Up 200 | | | | | 132,243 | | | | | | (21,371) | | | | | | -13.91% | | | | | | 11.58% | | | | | | 104.67% | | |
Up 100 | | | | | 141,858 | | | | | | (11,756) | | | | | | -7.65% | | | | | | 12.42% | | | | | | 112.28% | | |
Base | | | | | 153,614 | | | | | | — | | | | | | 0.00% | | | | | | 13.45% | | | | | | 121.58% | | |
Down 100 | | | | | 136,456 | | | | | | (17,158) | | | | | | -11.17% | | | | | | 11.94% | | | | | | 108.00% | | |
Down 200 | | | | | 129,485 | | | | | | (24,129) | | | | | | -15.71% | | | | | | 11.33% | | | | | | 102.49% | | |
| | | Sensitivity of Economic Value of Equity As of December 31, 2015 | | |||||||||||||||||||||||||||
| | | Economic Value of Equity | | | Economic Value of Equity as a % of | | ||||||||||||||||||||||||
Change in Interest Rates in Basis Points (Rate Shock) | | | Amount | | | $ Change From Base | | | % Change From Base | | | Total Assets | | | Equity Book Value | | |||||||||||||||
| | | (Dollar amounts in thousands) | | |||||||||||||||||||||||||||
Up 400 | | | | $ | 108,441 | | | | | $ | (34,579) | | | | | | -24.18% | | | | | | 10.47% | | | | | | 90.64% | | |
Up 300 | | | | | 115,906 | | | | | | (27,114) | | | | | | -18.96% | | | | | | 11.19% | | | | | | 96.88% | | |
Up 200 | | | | | 124,098 | | | | | | (18,922) | | | | | | -13.23% | | | | | | 11.98% | | | | | | 103.73% | | |
Up 100 | | | | | 133,386 | | | | | | (9,634) | | | | | | -6.74% | | | | | | 12.87% | | | | | | 111.49% | | |
Base | | | | | 143,020 | | | | | | — | | | | | | 0.00% | | | | | | 13.80% | | | | | | 119.55% | | |
Down 100 | | | | | 130,510 | | | | | | (12,510) | | | | | | -8.75% | | | | | | 12.60% | | | | | | 109.09% | | |
Down 200 | | | | | 122,637 | | | | | | (20,383) | | | | | | -14.25% | | | | | | 11.84% | | | | | | 102.51% | | |
Sensitivity of Net Interest Income | ||||||||||||||||
As of December 31, 2015 | ||||||||||||||||
Change in | Adjusted Net Interest Income | Net Interest Margin | ||||||||||||||
Interest Rates | ||||||||||||||||
in Basis Points | $ Change | % Change | ||||||||||||||
(Rate Shock) | Amount | From Base | Percent | From Base | ||||||||||||
(Dollar amounts in thousands) | ||||||||||||||||
Up 400 | $ | 39,018 | $ | 3,252 | 3.94 | % | 0.32 | % | ||||||||
Up 300 | 38,030 | 2,264 | 3.84 | % | 0.22 | % | ||||||||||
Up 200 | 37,064 | 1,298 | 3.75 | % | 0.13 | % | ||||||||||
Up 100 | 36,220 | 454 | 3.66 | % | 0.04 | % | ||||||||||
Base | 35,766 | - | 3.62 | % | 0.00 | % | ||||||||||
Down 100 | 35,646 | (120 | ) | 3.60 | % | -0.02 | % | |||||||||
Down 200 | 35,504 | (262 | ) | 3.59 | % | -0.03 | % |
Sensitivity of Net Interest Income | ||||||||||||||||
As of December 31, 2014 | ||||||||||||||||
Change in | Adjusted Net Interest Income | Net Interest Margin | ||||||||||||||
Interest Rates | ||||||||||||||||
in Basis Points | $ Change | % Change | ||||||||||||||
(Rate Shock) | Amount | From Base | Percent | From Base | ||||||||||||
(Dollar amounts in thousands) | ||||||||||||||||
Up 400 | $ | 38,720 | $ | 7,117 | 4.46 | % | 0.81 | % | ||||||||
Up 300 | 36,659 | $ | 5,056 | 4.23 | % | 0.58 | % | |||||||||
Up 200 | 34,656 | $ | 3,053 | 4.00 | % | 0.35 | % | |||||||||
Up 100 | 32,915 | $ | 1,312 | 3.80 | % | 0.15 | % | |||||||||
Base | 31,603 | $ | - | 3.65 | % | 0.00 | % | |||||||||
Down 100 | 31,501 | $ | (102 | ) | 3.64 | % | -0.01 | % | ||||||||
Down 200 | 31,228 | $ | (375 | ) | 3.61 | % | -0.04 | % |
| | | Sensitivity of Net Interest Income As of December 31, 2016 | | |||||||||||||||||||||
| | | Adjusted Net Interest Income | | | Net Interest Margin | | ||||||||||||||||||
Change in Interest Rates in Basis Points (Rate Shock) | | | Amount | | | $ Change From Base | | | Percent | | | % Change From Base | | ||||||||||||
| | | (Dollar amounts in thousands) | | |||||||||||||||||||||
Up 400 | | | | $ | 41,484 | | | | | $ | 3,759 | | | | | | 3.87% | | | | | | 0.43% | | |
Up 300 | | | | | 41,172 | | | | | | 3,447 | | | | | | 3.75% | | | | | | 0.31% | | |
Up 200 | | | | | 39,898 | | | | | | 2,173 | | | | | | 3.64% | | | | | | 0.20% | | |
Up 100 | | | | | 38,688 | | | | | | 963 | | | | | | 3.53% | | | | | | 0.09% | | |
Base | | | | | 37,725 | | | | | | — | | | | | | 3.44% | | | | | | 0.00% | | |
Down 100 | | | | | 37,961 | | | | | | 236 | | | | | | 3.46% | | | | | | 0.02% | | |
Down 200 | | | | | 37,473 | | | | | | (252) | | | | | | 3.42% | | | | | | -0.02% | | |
| | | Sensitivity of Net Interest Income As of December 31, 2015 | | |||||||||||||||||||||
| | | Adjusted Net Interest Income | | | Net Interest Margin | | ||||||||||||||||||
Change in Interest Rates in Basis Points (Rate Shock) | | | Amount | | | $ Change From Base | | | Percent | | | % Change From Base | | ||||||||||||
| | | (Dollar amounts in thousands) | | |||||||||||||||||||||
Up 400 | | | | $ | 39,018 | | | | | $ | 3,252 | | | | | | 3.94% | | | | | | 0.32% | | |
Up 300 | | | | | 38,030 | | | | | | 2,264 | | | | | | 3.84% | | | | | | 0.22% | | |
Up 200 | | | | | 37,064 | | | | | | 1,298 | | | | | | 3.75% | | | | | | 0.13% | | |
Up 100 | | | | | 36,220 | | | | | | 454 | | | | | | 3.66% | | | | | | 0.04% | | |
Base | | | | | 35,766 | | | | | | — | | | | | | 3.62% | | | | | | 0.00% | | |
Down 100 | | | | | 35,646 | | | | | | (120) | | | | | | 3.60% | | | | | | -0.02% | | |
Down 200 | | | | | 35,504 | | | | | | (262) | | | | | | 3.59% | | | | | | -0.03% | | |
Sonabank is asset sensitive. Our net interest income will tend to rise as interest rates rise. An immediate rate shock of 100 basis points across the yield curve would result in slightly more than a 1% increase of the Bank’s net interest income. The increase of 100 basis points hasn’t happened yet. The only thing which has happened is that the Fed raised its target rate for Fed Funds on December 17, 2015, and the prime rate rose in lock step by ¼%. This will ultimately be significant since $422 million of our $844 million gross loan portfolio is tied to the prime rate in one way or another.
This is a summary:
Currently | Adjusts at a | |||||||||||||||||||
Adjusts | Adjusts | Operating | Future Date | |||||||||||||||||
Daily | Monthly | at a Floor | (No Floor) | Total | ||||||||||||||||
SBA loans | $ | - | $ | 54,894 | $ | - | $ | - | $ | 54,894 | ||||||||||
GAB HELOC | - | 23,867 | - | - | 23,867 | |||||||||||||||
Other HELOC | - | 1,155 | 5,246 | - | 6,401 | |||||||||||||||
CRE loans | 12,971 | - | 81,088 | 146,810 | 240,869 | |||||||||||||||
Commercial lines of credit | 8,808 | 9,695 | 14,573 | - | 33,076 | |||||||||||||||
Commercial term loans | 3,035 | 5,770 | - | 15,290 | 24,095 | |||||||||||||||
Commercial construction | 4,780 | 10,585 | - | - | 15,365 | |||||||||||||||
Other | 3,706 | 4,908 | 7,849 | 7,015 | 23,478 | |||||||||||||||
�� | ||||||||||||||||||||
Total | $ | 33,300 | $ | 110,874 | $ | 108,756 | $ | 169,115 | $ | 422,045 |
Liquidity and Funds Management
The Revised Capital Rules, among other things, (i) introduce as a new capital measure “Common Equity Tier 1” (“CET1”), (ii) specify that Tier 1 capital consists of CET1 and “Additional Tier 1 capital” instruments meeting specified requirements, (iii) define CET1 narrowly by requiring that most adjustments to regulatory capital measures be made to CET1 and not to the other components of capital and (iv) expand the scope of the adjustments as compared to existing regulations. Further, the Revised Capital Rules set forth the following minimum capital ratios, which began to phase in for certain banking organizations, including Southern National, on January 1, 2015:
Minimum | ||||||||||||||||
Required for | ||||||||||||||||
Capital | Actual Ratio at | |||||||||||||||
Adequacy | To Be Categorized | December 31, | ||||||||||||||
Purposes | as Well Capitalized | 2015 | 2014 | |||||||||||||
Southern National | ||||||||||||||||
Common equity tier 1 capital ratio | 4.50 | % | 6.50 | % | 13.13 | % | NA | |||||||||
Tier 1 risk-based capital ratio | 6.00 | % | 8.00 | % | 13.13 | % | 15.19 | % | ||||||||
Total risk-based capital ratio | 8.00 | % | 10.00 | % | 14.14 | % | 16.27 | % | ||||||||
Leverage ratio | 4.00 | % | 5.00 | % | 11.06 | % | 11.80 | % | ||||||||
Sonabank | ||||||||||||||||
Common equity tier 1 capital ratio | 4.50 | % | 6.50 | % | 12.99 | % | NA | |||||||||
Tier 1 risk-based capital ratio | 6.00 | % | 8.00 | % | 12.99 | % | 15.04 | % | ||||||||
Total risk-based capital ratio | 8.00 | % | 10.00 | % | 14.00 | % | 16.11 | % | ||||||||
Leverage ratio | 4.00 | % | 5.00 | % | 10.94 | % | 11.68 | % |
| | | Minimum Required for Capital Adequacy Purposes(1) | | | To Be Categorized as Well Capitalized(2) | | | Actual Ratio at December 31, | | |||||||||||||||
| | | 2016 | | | 2015 | | ||||||||||||||||||
Southern National | | | | | | | | | | | | | | | | | | | | | | | | | |
Common equity tier 1 capital ratio | | | | | 4.50% | | | | | | n/a | | | | | | 12.69% | | | | | | 13.13% | | |
Tier 1 risk-based capital ratio | | | | | 6.00% | | | | | | n/a | | | | | | 12.69% | | | | | | 13.13% | | |
Total risk-based capital ratio | | | | | 8.00% | | | | | | n/a | | | | | | 13.63% | | | | | | 14.14% | | |
Leverage ratio | | | | | 4.00% | | | | | | n/a | | | | | | 10.56% | | | | | | 11.06% | | |
Sonabank | | | | | | | | | | | | | | | | | | | | | | | | | |
Common equity tier 1 capital ratio | | | | | 4.50% | | | | | | 6.50% | | | | | | 12.55% | | | | | | 12.99% | | |
Tier 1 risk-based capital ratio | | | | | 6.00% | | | | | | 8.00% | | | | | | 12.55% | | | | | | 12.99% | | |
Total risk-based capital ratio | | | | | 8.00% | | | | | | 10.00% | | | | | | 13.49% | | | | | | 14.00% | | |
Leverage ratio | | | | | 4.00% | | | | | | 5.00% | | | | | | 10.45% | | | | | | 10.94% | | |
Contractual Obligations | ||||||||||||||||||||
Less Than | One to | Three to | More Than | |||||||||||||||||
One Year | Three Years | Five Years | Five Years | Total | ||||||||||||||||
( in thousands) | ||||||||||||||||||||
Certificates of deposit (1) | $ | 280,644 | $ | 196,477 | $ | 54,635 | $ | - | $ | 531,756 | ||||||||||
Securities sold under agreements to repurchase | 10,381 | - | - | - | 10,381 | |||||||||||||||
FHLB short-term advances | 59,000 | - | - | - | 59,000 | |||||||||||||||
FHLB long-term advances | - | 15,000 | - | - | 15,000 | |||||||||||||||
Operating leases | 1,852 | 3,410 | 2,158 | 574 | 7,994 | |||||||||||||||
Total | $ | 351,877 | $ | 214,887 | $ | 56,793 | $ | 574 | $ | 624,131 |
| | | Contractual Obligations | | |||||||||||||||||||||||||||
| | | Less Than One Year | | | One to Three Years | | | Three to Five Years | | | More Than Five Years | | | Total | | |||||||||||||||
| | | ( in thousands) | | |||||||||||||||||||||||||||
Certificates of deposit(1) | | | | $ | 335,344 | | | | | $ | 231,327 | | | | | $ | 38,942 | | | | | $ | — | | | | | $ | 605,613 | | |
FHLB short-term advances | | | | | 95,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | 95,000 | | |
Operating leases | | | | | 1,907 | | | | | | 2,971 | | | | | | 974 | | | | | | 425 | | | | | | 6,277 | | |
Total | | | | $ | 432,251 | | | | | $ | 234,298 | | | | | $ | 39,916 | | | | | $ | 425 | | | | | $ | 706,890 | | |
|
Southern National Bancorp of Virginia, Inc.
March 15, 2016
Southern National Bancorp of Virginia, Inc.
March 15, 2016
CONSOLIDATED BALANCE SHEETS
December 31, | December 31, | |||||||
2015 | 2014 | |||||||
ASSETS | ||||||||
Cash and cash equivalents: | ||||||||
Cash and due from financial institutions | $ | 3,972 | $ | 5,702 | ||||
Interest-bearing deposits in other financial institutions | 26,364 | 32,618 | ||||||
Total cash and cash equivalents | 30,336 | 38,320 | ||||||
Securities available for sale, at fair value | 4,209 | 2,285 | ||||||
Securities held to maturity, at amortized cost | ||||||||
(fair value of $96,464 and $94,093, respectively) | 96,780 | 94,058 | ||||||
Covered loans | 34,373 | 38,496 | ||||||
Non-covered loans | 795,052 | 664,976 | ||||||
Total loans | 829,425 | 703,472 | ||||||
Less allowance for loan losses | (8,421 | ) | (7,414 | ) | ||||
Net loans | 821,004 | 696,058 | ||||||
Stock in Federal Reserve Bank and Federal Home Loan Bank | 6,929 | 5,681 | ||||||
Equity investment in mortgage affiliate | 4,459 | 3,631 | ||||||
Preferred investment in mortgage affiliate | 2,555 | 1,805 | ||||||
Bank premises and equipment, net | 8,882 | 9,453 | ||||||
Goodwill | 10,514 | 10,514 | ||||||
Core deposit intangibles, net | 1,093 | 1,354 | ||||||
FDIC indemnification asset | 2,922 | 3,571 | ||||||
Bank-owned life insurance | 23,126 | 20,990 | ||||||
Other real estate owned | 10,439 | 13,051 | ||||||
Deferred tax assets, net | 6,716 | 10,083 | ||||||
Other assets | 6,143 | 5,791 | ||||||
Total assets | $ | 1,036,107 | $ | 916,645 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Noninterest-bearing demand deposits | $ | 83,769 | $ | 69,560 | ||||
Interest-bearing deposits: | ||||||||
NOW accounts | 28,080 | 25,018 | ||||||
Money market accounts | 131,731 | 137,297 | ||||||
Savings accounts | 49,939 | 44,155 | ||||||
Time deposits | 531,775 | 466,395 | ||||||
Total interest-bearing deposits | 741,525 | 672,865 | ||||||
Total deposits | 825,294 | 742,425 | ||||||
Securities sold under agreements to repurchase | 10,381 | 13,794 | ||||||
Federal Home Loan Bank (FHLB) advances-short term | 59,000 | 15,250 | ||||||
Federal Home Loan Bank (FHLB) advances-long term | 15,000 | 25,000 | ||||||
Other liabilities | 6,796 | 6,197 | ||||||
Total liabilities | 916,471 | 802,666 | ||||||
Commitments and contingencies (See Note 14) | - | - | ||||||
Stockholders' equity: | ||||||||
Preferred stock, $.01 par value. Authorized 5,000,000 shares; | ||||||||
no shares issued and outstanding | - | - | ||||||
Common stock, $.01 par value. Authorized 45,000,000 shares; | ||||||||
issued and outstanding, 12,234,443 shares at December 31, 2015 | ||||||||
and 12,216,669 at December 31, 2014 | 122 | 122 | ||||||
Additional paid in capital | 104,389 | 104,072 | ||||||
Retained earnings | 15,735 | 12,805 | ||||||
Accumulated other comprehensive loss | (610 | ) | (3,020 | ) | ||||
Total stockholders' equity | 119,636 | 113,979 | ||||||
Total liabilities and stockholders' equity | $ | 1,036,107 | $ | 916,645 |
| | | December 31, 2016 | | | December 31, 2015 | | ||||||
ASSETS | | | | | | | | | | | | | |
Cash and cash equivalents: | | | | | | | | | |||||
Cash and due from financial institutions | | | | $ | 4,656 | | | | | $ | 3,972 | | |
Interest-bearing deposits in other financial institutions | | | | | 42,736 | | | | | | 26,364 | | |
Total cash and cash equivalents | | | | | 47,392 | | | | | | 30,336 | | |
Securities available for sale, at fair value | | | | | 3,918 | | | | | | 4,209 | | |
Securities held to maturity, at amortized cost (fair value of $83,344 and $96,464, respectively) | | | | | 85,300 | | | | | | 96,780 | | |
Covered loans | | | | | 28,180 | | | | | | 34,373 | | |
Non-covered loans | | | | | 902,235 | | | | | | 795,052 | | |
Total loans | | | | | 930,415 | | | | | | 829,425 | | |
Less allowance for loan losses | | | | | (8,610) | | | | | | (8,421) | | |
Net loans | | | | | 921,805 | | | | | | 821,004 | | |
Stock in Federal Reserve Bank and Federal Home Loan Bank | | | | | 7,929 | | | | | | 6,929 | | |
Equity investment in mortgage affiliate | | | | | 4,629 | | | | | | 4,459 | | |
Preferred investment in mortgage affiliate | | | | | 2,555 | | | | | | 2,555 | | |
Bank premises and equipment, net | | | | | 8,227 | | | | | | 8,882 | | |
Goodwill | | | | | 10,514 | | | | | | 10,514 | | |
Core deposit intangibles, net | | | | | 874 | | | | | | 1,093 | | |
FDIC indemnification asset | | | | | 2,111 | | | | | | 2,922 | | |
Bank-owned life insurance | | | | | 23,826 | | | | | | 23,126 | | |
Other real estate owned | | | | | 8,617 | | | | | | 10,439 | | |
Deferred tax assets, net | | | | | 6,780 | | | | | | 6,716 | | |
Other assets | | | | | 7,966 | | | | | | 6,143 | | |
Total assets | | | | $ | 1,142,443 | | | | | $ | 1,036,107 | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | ||||||||||
Noninterest-bearing demand deposits | | | | $ | 88,783 | | | | | $ | 83,769 | | |
Interest-bearing deposits: | | | | | | | | | |||||
NOW accounts | | | | | 26,338 | | | | | | 28,080 | | |
Cash management accounts | | | | | 9,658 | | | | | | — | | |
Money market accounts | | | | | 129,835 | | | | | | 131,731 | | |
Savings accounts | | | | | 52,755 | | | | | | 49,939 | | |
Time deposits | | | | | 605,613 | | | | | | 531,775 | | |
Total interest-bearing deposits | | | | | 824,199 | | | | | | 741,525 | | |
Total deposits | | | | | 912,982 | | | | | | 825,294 | | |
Securities sold under agreements to repurchase | | | | | — | | | | | | 10,381 | | |
Federal Home Loan Bank (FHLB) advances-short term | | | | | 95,000 | | | | | | 59,000 | | |
Federal Home Loan Bank (FHLB) advances-long term | | | | | — | | | | | | 15,000 | | |
Other liabilities | | | | | 8,117 | | | | | | 6,796 | | |
Total liabilities | | | | | 1,016,099 | | | | | | 916,471 | | |
Commitments and contingencies (See Note 14) | �� | | | | — | | | | | | — | | |
Stockholders’ equity: | | | | | | | | | | | | | |
Preferred stock, $.01 par value. Authorized 5,000,000 shares; no shares issued and outstanding | | | | | — | | | | | | — | | |
Common stock, $.01 par value. Authorized 45,000,000 shares; issued and outstanding, 12,263,643 shares at December 31, 2016 and 12,234,443 at December 31, 2015 | | | | | 123 | | | | | | 122 | | |
Additional paid in capital | | | | | 104,884 | | | | | | 104,389 | | |
Retained earnings | | | | | 22,126 | | | | | | 15,735 | | |
Accumulated other comprehensive loss | | | | | (789) | | | | | | (610) | | |
Total stockholders’ equity | | | | | 126,344 | | | | | | 119,636 | | |
Total liabilities and stockholders’ equity | | | | $ | 1,142,443 | | | | | $ | 1,036,107 | | |
|
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
For the Years Ended | ||||||||||||
December 31, | ||||||||||||
2015 | 2014 | 2013 | ||||||||||
Interest and dividend income: | ||||||||||||
Interest and fees on loans | $ | 40,104 | $ | 34,611 | $ | 32,269 | ||||||
Interest and dividends on taxable securities | 2,395 | 2,239 | 2,035 | |||||||||
Interest and dividends on tax exempt securities | 411 | 389 | 237 | |||||||||
Interest and dividends on other earning assets | 791 | 852 | 575 | |||||||||
Total interest and dividend income | 43,701 | 38,091 | 35,116 | |||||||||
Interest expense: | ||||||||||||
Interest on deposits | 6,433 | 3,976 | 4,047 | |||||||||
Interest on borrowings | 644 | 697 | 621 | |||||||||
Total interest expense | 7,077 | 4,673 | 4,668 | |||||||||
Net interest income | 36,624 | 33,418 | 30,448 | |||||||||
Provision for loan losses | 3,171 | 3,444 | 3,615 | |||||||||
Net interest income after provision for loan losses | 33,453 | 29,974 | 26,833 | |||||||||
Noninterest income: | ||||||||||||
Account maintenance and deposit service fees | 953 | 826 | 793 | |||||||||
Income from bank-owned life insurance | 636 | 617 | 592 | |||||||||
Equity income from mortgage affiliate | 1,459 | 558 | - | |||||||||
Net gain on other assets | 7 | 202 | 13 | |||||||||
Gain on sales of available for sale securities | 520 | - | 142 | |||||||||
Total other-than-temporary impairment losses (OTTI) | - | (41 | ) | (3 | ) | |||||||
Portion of OTTI recognized in other comprehensive income (before taxes) | - | - | - | |||||||||
Net credit related OTTI recognized in earnings | - | (41 | ) | (3 | ) | |||||||
Other | 206 | 202 | 216 | |||||||||
Total noninterest income | 3,781 | 2,364 | 1,753 | |||||||||
Noninterest expenses: | ||||||||||||
Salaries and benefits | 11,860 | 10,225 | 9,063 | |||||||||
Occupancy expenses | 3,269 | 3,165 | 3,063 | |||||||||
Furniture and equipment expenses | 815 | 787 | 724 | |||||||||
Amortization of core deposit intangible | 261 | 220 | 467 | |||||||||
Virginia franchise tax expense | 352 | 455 | 471 | |||||||||
FDIC assessment | 664 | 569 | 823 | |||||||||
Data processing expense | 668 | 569 | 562 | |||||||||
Telephone and communication expense | 786 | 751 | 684 | |||||||||
Amortization of FDIC indemnification asset | 630 | 1,230 | 483 | |||||||||
Net (gain) loss on other real estate owned | 291 | (433 | ) | (188 | ) | |||||||
Merger expenses | - | 487 | 35 | |||||||||
Other operating expenses | 3,682 | 3,076 | 3,105 | |||||||||
Total noninterest expenses | 23,278 | 21,101 | 19,292 | |||||||||
Income before income taxes | 13,956 | 11,237 | 9,294 | |||||||||
Income tax expense | 4,667 | 3,754 | 3,036 | |||||||||
Net income | $ | 9,289 | $ | 7,483 | $ | 6,258 | ||||||
Other comprehensive income (loss): | ||||||||||||
Unrealized gain (loss) on available for sale securities | $ | (138 | ) | $ | 299 | $ | (232 | ) | ||||
Realized amount on available for sale securities sold, net | (520 | ) | - | (142 | ) | |||||||
Non-credit component of other-than-temporary impairment on held-to-maturity securities | 4,278 | 35 | 97 | |||||||||
Amortization and accretion of amounts previously recorded upon transfer to held-to-maturity from available-for sale | 32 | (77 | ) | (39 | ) | |||||||
Net unrealized gain (loss) | 3,652 | 257 | (316 | ) | ||||||||
Tax effect | 1,242 | 87 | (107 | ) | ||||||||
Other comprehensive income (loss) | 2,410 | 170 | (209 | ) | ||||||||
Comprehensive income | $ | 11,699 | $ | 7,653 | $ | 6,049 | ||||||
Earnings per share, basic | $ | 0.76 | $ | 0.63 | $ | 0.54 | ||||||
Earnings per share, diluted | $ | 0.75 | $ | 0.63 | $ | 0.54 |
| | | For the Years Ended December 31, | |||||||||||||||
| | | 2016 | | | 2015 | | | 2014 | |||||||||
Interest and dividend income: | | | | | | | | | | | | | | | ||||
Interest and fees on loans | | | | $ | 45,348 | | | | | $ | 40,104 | | | | | $ | 34,611 | |
Interest and dividends on taxable securities | | | | | 2,619 | | | | | | 2,395 | | | | | | 2,239 | |
Interest and dividends on tax exempt securities | | | | | 336 | | | | | | 411 | | | | | | 389 | |
Interest and dividends on other earning assets | | | | | 644 | | | | | | 791 | | | | | | 852 | |
Total interest and dividend income | | | | | 48,947 | | | | | | 43,701 | | | | | | 38,091 | |
Interest expense: | | | | | | | | | | | | | | | ||||
Interest on deposits | | | | | 8,101 | | | | | | 6,433 | | | | | | 3,976 | |
Interest on borrowings | | | | | 532 | | | | | | 644 | | | | | | 697 | |
Total interest expense | | | | | 8,633 | | | | | | 7,077 | | | | | | 4,673 | |
Net interest income | | | | | 40,314 | | | | | | 36,624 | | | | | | 33,418 | |
Provision for loan losses | | | | | 4,912 | | | | | | 3,171 | | | | | | 3,444 | |
Net interest income after provision for loan losses | | | | | 35,402 | | | | | | 33,453 | | | | | | 29,974 | |
Noninterest income: | | | | | | | | | | | | | | | ||||
Account maintenance and deposit service fees | | | | | 896 | | | | | | 953 | | | | | | 826 | |
Income from bank-owned life insurance | | | | | 700 | | | | | | 636 | | | | | | 617 | |
Equity income from mortgage affiliate | | | | | 1,109 | | | | | | 1,459 | | | | | | 558 | |
Net gain on other assets | | | | | — | | | | | | 7 | | | | | | 202 | |
Gain on sales of available for sale securities | | | | | — | | | | | | 520 | | | | | | — | |
Total other-than-temporary impairment losses (OTTI) | | | | | — | | | | | | — | | | | | | (41) | |
Portion of OTTI recognized in other comprehensive income (before taxes) | | | | | — | | | | | | — | | | | | | — | |
Net credit related OTTI recognized in earnings | | | | | — | | | | | | — | | | | | | (41) | |
Other | | | | | 115 | | | | | | 206 | | | | | | 202 | |
Total noninterest income | | | | | 2,820 | | | | | | 3,781 | | | | | | 2,364 | |
Noninterest expenses: | | | | | | | | | | | | | | | ||||
Salaries and benefits | | | | | 11,675 | | | | | | 11,860 | | | | | | 10,225 | |
Occupancy expenses | | | | | 3,155 | | | | | | 3,269 | | | | | | 3,165 | |
Furniture and equipment expenses | | | | | 975 | | | | | | 815 | | | | | | 787 | |
Amortization of core deposit intangible | | | | | 219 | | | | | | 261 | | | | | | 220 | |
Virginia franchise tax expense | | | | | 387 | | | | | | 352 | | | | | | 455 | |
FDIC assessment | | | | | 543 | | | | | | 664 | | | | | | 569 | |
Data processing expense | | | | | 744 | | | | | | 668 | | | | | | 569 | |
Telephone and communication expense | | | | | 745 | | | | | | 786 | | | | | | 751 | |
Amortization of FDIC indemnification asset | | | | | 793 | | | | | | 630 | | | | | | 1,230 | |
Net (gain) loss on other real estate owned | | | | | 174 | | | | | | 291 | | | | | | (433) | |
Merger expenses | | | | | 429 | | | | | | — | | | | | | 487 | |
Other operating expenses | | | | | 2,976 | | | | | | 3,682 | | | | | | 3,076 | |
Total noninterest expenses | | | | | 22,815 | | | | | | 23,278 | | | | | | 21,101 | |
Income before income taxes | | | | | 15,407 | | | | | | 13,956 | | | | | | 11,237 | |
Income tax expense | | | | | 5,095 | | | | | | 4,667 | | | | | | 3,754 | |
Net income | | | | $ | 10,312 | | | | | $ | 9,289 | | | | | $ | 7,483 | |
Other comprehensive income (loss): | | | | | | | | | | | | | | | ||||
Unrealized gain (loss) on available for sale securities | | | | $ | (284) | | | | | $ | (138) | | | | | $ | 299 | |
Realized amount on available for sale securities sold, net | | | | | — | | | | | | (520) | | | | | | — | |
Non-credit component of other-than-temporary impairment on held-to-maturity securities | | | | | — | | | | | | 4,278 | | | | | | 35 | |
Amortization and accretion of amounts previously recorded upon transfer to held-to-maturity from available-for sale | | | | | 12 | | | | | | 32 | | | | | | (77) | |
Net unrealized gain (loss) | | | | | (272) | | | | | | 3,652 | | | | | | 257 | |
Tax effect | | | | | (93) | | | | | | 1,242 | | | | | | 87 | |
Other comprehensive income (loss) | | | | | (179) | | | | | | 2,410 | | | | | | 170 | |
Comprehensive income | | | | $ | 10,133 | | | | | $ | 11,699 | | | | | $ | 7,653 | |
Earnings per share, basic | | | | $ | 0.84 | | | | | $ | 0.76 | | | | | $ | 0.63 | |
Earnings per share, diluted | | | | $ | 0.83 | | | | | $ | 0.75 | | | | | $ | 0.63 | |
|
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS'STOCKHOLDERS’ EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 2014 AND 2013
2014
Accumulated | ||||||||||||||||||||
Additional | Other | |||||||||||||||||||
Common | Paid in | Retained | Comprehensive | |||||||||||||||||
Stock | Capital | Earnings | Loss | Total | ||||||||||||||||
Balance - January 1, 2013 | $ | 116 | $ | 96,840 | $ | 9,201 | $ | (2,981 | ) | $ | 103,176 | |||||||||
Comprehensive income: | ||||||||||||||||||||
Net income | 6,258 | 6,258 | ||||||||||||||||||
Change in unrealized loss on securities available for sale (net of tax benefit, $127) | (247 | ) | (247 | ) | ||||||||||||||||
Change in unrecognized loss on securities held to maturity for which a portion of OTTI has been recognized (net of tax, $20 and accretion, $39 and amounts recorded into other comprehensive income at transfer) | 38 | 38 | ||||||||||||||||||
Dividends on common stock ($.25 per share) | (2,898 | ) | (2,898 | ) | ||||||||||||||||
Issuance of common stock under Stock Incentive Plan (400 shares) | 3 | 3 | ||||||||||||||||||
Stock-based compensation expense | 284 | 284 | ||||||||||||||||||
Balance - December 31, 2013 | 116 | 97,127 | 12,561 | (3,190 | ) | 106,614 | ||||||||||||||
Comprehensive income: | ||||||||||||||||||||
Net income | 7,483 | 7,483 | ||||||||||||||||||
Change in unrealized loss on securities available for sale (net of tax, $102) | 197 | 197 | ||||||||||||||||||
Change in unrecognized loss on securities held to maturity for which a portion of OTTI has been recognized (net of tax benefit, $15 and accretion, $77 and amounts recorded into other comprehensive income at transfer) | (27 | ) | (27 | ) | ||||||||||||||||
Dividends on common stock ($.60 per share) | (7,239 | ) | (7,239 | ) | ||||||||||||||||
Issuance of common stock under Stock Incentive Plan (100,200 shares) | 1 | 885 | 886 | |||||||||||||||||
Issuance of common stock in exchange for net assets in acquisition (525,858 shares) | 5 | 5,743 | 5,748 | |||||||||||||||||
Stock-based compensation expense | 317 | 317 | ||||||||||||||||||
Balance - December 31, 2014 | 122 | 104,072 | 12,805 | (3,020 | ) | 113,979 | ||||||||||||||
Comprehensive income: | ||||||||||||||||||||
Net income | 9,289 | 9,289 | ||||||||||||||||||
Change in unrealized loss on securities available for sale (net of tax benefit, $224) | (434 | ) | (434 | ) | ||||||||||||||||
Change in unrecognized loss on securities held to maturity for which a portion of OTTI has been recognized (net of tax, $1,466 and accretion, $32 and amounts recorded into other comprehensive income at transfer) | 2,844 | 2,844 | ||||||||||||||||||
Dividends on common stock ($.52 per share) | (6,359 | ) | (6,359 | ) | ||||||||||||||||
Repurchase of common stock (62,177 shares) | (1 | ) | (720 | ) | (721 | ) | ||||||||||||||
Issuance of common stock under Stock Incentive Plan (79,950 shares) | 1 | 706 | 707 | |||||||||||||||||
Stock-based compensation expense | 331 | 331 | ||||||||||||||||||
Balance - December 31, 2015 | $ | 122 | $ | 104,389 | $ | 15,735 | $ | (610 | ) | $ | 119,636 |
| | | Common Stock | | | Additional Paid in Capital | | | Retained Earnings | | | Accumulated Other Comprehensive Loss | | | Total | | |||||||||||||||
Balance – January 1, 2014 | | | | $ | 116 | | | | | $ | 97,127 | | | | | $ | 12,561 | | | | | $ | (3,190) | | | | | $ | 106,614 | | |
Comprehensive income: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net income | | | | | | | | | | | | | | | | | 7,483 | | | | | | | | | | | | 7,483 | | |
Change in unrealized loss on securities available for sale (net of tax, $102) | | | | | | | | | | | | | | | | | | | | | | | 197 | | | | | | 197 | | |
Change in unrecognized loss on securities held to maturity for which a portion of OTTI has been recognized (net of tax benefit, $15 and accretion, $77 and amounts recorded into other comprehensive income at transfer) | | | | | | | | | | | | | | | | | | | | | | | (27) | | | | | | (27) | | |
Dividends on common stock ($.60 per share) | | | | | | | | | | | | | | | | | (7,239) | | | | | | | | | | | | (7,239) | | |
Issuance of common stock under Stock Incentive Plan (100,200 shares) | | | | | 1 | | | | | | 885 | | | | | | | | | | | | | | | | | | 886 | | |
Issuance of common stock in exchange for net assets in acquisition (525,858 shares) | | | | | 5 | | | | | | 5,743 | | | | | | | | | | | | | | | | | | 5,748 | | |
Stock-based compensation expense | | | | | | | | | | | 317 | | | | | | | | | | | | | | | | | | 317 | | |
Balance – December 31, 2014 | | | | | 122 | | | | | | 104,072 | | | | | | 12,805 | | | | | | (3,020) | | | | | | 113,979 | | |
Comprehensive income: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net income | | | | | | | | | | | | | | | | | 9,289 | | | | | | | | | | | | 9,289 | | |
Change in unrealized loss on securities available for sale (net of tax benefit, $224) | | | | | | | | | | | | | | | | | | | | | | | (434) | | | | | | (434) | | |
Change in unrecognized loss on securities held to maturity for which a portion of OTTI has been recognized (net of tax, $1,466 and accretion, $32 and amounts recorded into other comprehensive income at transfer) | | | | | | | | | | | | | | | | | | | | | | | 2,844 | | | | | | 2,844 | | |
Dividends on common stock ($.52 per share) | | | | | | | | | | | | | | | | | (6,359) | | | | | | | | | | | | (6,359) | | |
Repurchase of common stock (62,177 shares) | | | | | (1) | | | | | | (720) | | | | | | | | | | | | | | | | | | (721) | | |
Issuance of common stock under Stock Incentive Plan (79,950 shares) | | | | | 1 | | | | | | 706 | | | | | | | | | | | | | | | | | | 707 | | |
Stock-based compensation expense | | | | | | | | | | | 331 | | | | | | | | | | | | | | | | | | 331 | | |
Balance – December 31, 2015 | | | | | 122 | | | | | | 104,389 | | | | | | 15,735 | | | | | | (610) | | | | | | 119,636 | | |
Comprehensive income: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net income | | | | | | | | | | | | | | | | | 10,312 | | | | | | | | | | | | 10,312 | | |
Change in unrealized loss on securities available for sale (net of tax benefit, $97) | | | | | | | | | | | | | | | | | | | | | | | (187) | | | | | | (187) | | |
Change in unrecognized loss on securities held to maturity for which a portion of OTTI has been recognized (net of tax, $4 and accretion, $8 and amounts recorded into other comprehensive income at transfer) | | | | | | | | | | | | | | | | | | | | | | | 8 | | | | | | 8 | | |
Dividends on common stock ($.32 per share) | | | | | | | | | | | | | | | | | (3,921) | | | | | | | | | | | | (3,921) | | |
Issuance of common stock for warrants exercised (11,000 shares) | | | | | 1 | | | | | | 100 | | | | | | | | | | | | | | | | | | 101 | | |
Issuance of common stock under Stock Incentive Plan (18,200 shares) | | | | | | | | | | | 135 | | | | | | | | | | | | | | | | | | 135 | | |
Stock-based compensation expense | | | | | | | | | | | 260 | | | | | | | | | | | | | | | | | | 260 | | |
Balance – December 31, 2016 | | | | $ | 123 | | | | | $ | 104,884 | | | | | $ | 22,126 | | | | | $ | (789) | | | | | $ | 126,344 | | |
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended | ||||||||||||
December 31, | ||||||||||||
2015 | 2014 | 2013 | ||||||||||
Operating activities: | ||||||||||||
Net income | $ | 9,289 | $ | 7,483 | $ | 6,258 | ||||||
Adjustments to reconcile net income to net cash and cash equivalents provided by operating activities: | ||||||||||||
Depreciation | 876 | 764 | 665 | |||||||||
Amortization of core deposit intangible | 261 | 220 | 467 | |||||||||
Other amortization, net | 149 | 186 | 344 | |||||||||
Accretion of loan discount | (2,510 | ) | (2,616 | ) | (3,507 | ) | ||||||
Amortization of FDIC indemnification asset | 630 | 1,230 | 483 | |||||||||
Provision for loan losses | 3,171 | 3,444 | 3,615 | |||||||||
Earnings on bank-owned life insurance | (636 | ) | (617 | ) | (592 | ) | ||||||
Equity income on mortgage affiliate | (1,459 | ) | (558 | ) | - | |||||||
Stock based compensation expense | 331 | 317 | 284 | |||||||||
Net gain on sale of available for sale securities | (520 | ) | - | (142 | ) | |||||||
Impairment on securities | - | 41 | 3 | |||||||||
Net (gain) loss on other real estate owned | 291 | (433 | ) | (188 | ) | |||||||
Provision for (benefit from) deferred income taxes | 2,132 | (418 | ) | 102 | ||||||||
Net (increase) decrease in other assets | (385 | ) | 1,161 | (365 | ) | |||||||
Net increase (decrease) in other liabilities | 599 | 1,281 | (1,581 | ) | ||||||||
Net cash and cash equivalents provided by operating activities | 12,219 | 11,485 | 5,846 | |||||||||
Investing activities: | ||||||||||||
Proceeds from sales of available for sale securities | 3,966 | - | 159 | |||||||||
Proceeds from paydowns, maturities and calls of available for sale securities | 1 | - | - | |||||||||
Purchases of held to maturity securities | (18,153 | ) | (18,284 | ) | (14,766 | ) | ||||||
Proceeds from paydowns, maturities and calls of held to maturity securities | 13,607 | 6,571 | 16,278 | |||||||||
Loan originations and payments, net | (127,334 | ) | (100,837 | ) | (18,546 | ) | ||||||
Purchase of bank-owned life insurance | (1,500 | ) | (2,000 | ) | - | |||||||
Net cash received in PGFSB acquisition | - | 22,430 | - | |||||||||
Proceeds from sale of PGFSB loans | - | 3,499 | - | |||||||||
Investment in mortgage affiliate, net | (119 | ) | (4,877 | ) | - | |||||||
Net (increase) decrease in stock in Federal Reserve Bank and Federal Home Loan Bank | (1,248 | ) | 327 | 297 | ||||||||
Payments received on FDIC indemnification asset | 3 | 1,037 | 1,017 | |||||||||
Proceeds from sale of other real estate owned | 4,048 | 3,276 | 4,187 | |||||||||
Purchases of bank premises and equipment | (307 | ) | (897 | ) | (437 | ) | ||||||
Net cash and cash equivalents used in investing activities | (127,036 | ) | (89,755 | ) | (11,811 | ) | ||||||
Financing activities: | ||||||||||||
Net increase (decrease) in deposits | 82,869 | 112,838 | (10,618 | ) | ||||||||
Cash dividends paid - common stock | (6,359 | ) | (7,239 | ) | (2,898 | ) | ||||||
Issuance of common stock under Stock Incentive Plan | 707 | 886 | 3 | |||||||||
Repurchase of common stock | (721 | ) | - | - | ||||||||
Proceeds from Federal Home Loan Bank advances-long term | 10,000 | - | - | |||||||||
Repayment of Federal Home Loan Bank advances-long term | (20,000 | ) | - | - | ||||||||
Net increase (decrease) in securities sold under agreement to repurchase and other short-term borrowings | 40,337 | (10,751 | ) | 1,134 | ||||||||
Net cash and cash equivalents provided by (used in) financing activities | 106,833 | 95,734 | (12,379 | ) | ||||||||
Increase (decrease) in cash and cash equivalents | (7,984 | ) | 17,464 | (18,344 | ) | |||||||
Cash and cash equivalents at beginning of period | 38,320 | 20,856 | 39,200 | |||||||||
Cash and cash equivalents at end of period | $ | 30,336 | $ | 38,320 | $ | 20,856 | ||||||
Supplemental disclosure of cash flow information | ||||||||||||
Cash payments for: | ||||||||||||
Interest | $ | 6,791 | $ | 4,454 | $ | 4,586 | ||||||
Income taxes | 2,993 | 3,283 | 4,598 | |||||||||
Supplemental schedule of noncash investing and financing activities | ||||||||||||
Transfer from non-covered loans to other real estate owned | 1,384 | 4,409 | 3,044 | |||||||||
Transfer from covered loans to other real estate owned | 343 | 342 | 4,158 | |||||||||
Transfer from covered loans to non-covered loans | - | 7,344 | - | |||||||||
Issuance of common stock in exchange for net assets in acquisition | - | 5,748 | - |
| | | For the Years Ended December 31, | | |||||||||||||||
| | | 2016 | | | 2015 | | | 2014 | | |||||||||
Operating activities: | | | | | | | | | | | | | | | |||||
Net income | | | | $ | 10,312 | | | | | $ | 9,289 | | | | | $ | 7,483 | | |
Adjustments to reconcile net income to net cash andcash equivalents provided by operating activities: | | | | | |||||||||||||||
Depreciation | | | | | 798 | | | | | | 876 | | | | | | 764 | | |
Amortization of core deposit intangible | | | | | 219 | | | | | | 261 | | | | | | 220 | | |
Other amortization, net | | | | | (36) | | | | | | 149 | | | | | | 186 | | |
Accretion of loan discount | | | | | (1,874) | | | | | | (2,510) | | | | | | (2,616) | | |
Amortization of FDIC indemnification asset | | | | | 793 | | | | | | 630 | | | | | | 1,230 | | |
Provision for loan losses | | | | | 4,912 | | | | | | 3,171 | | | | | | 3,444 | | |
Earnings on bank-owned life insurance | | | | | (700) | | | | | | (636) | | | | | | (617) | | |
Equity income on mortgage affiliate | | | | | (1,109) | | | | | | (1,459) | | | | | | (558) | | |
Stock based compensation expense | | | | | 260 | | | | | | 331 | | | | | | 317 | | |
Net gain on sale of available for sale securities | | | | | — | | | | | | (520) | | | | | | — | | |
Impairment on securities | | | | | — | | | | | | — | | | | | | 41 | | |
Net (gain) loss on other real estate owned | | | | | 174 | | | | | | 291 | | | | | | (433) | | |
Provision for (benefit from) deferred income taxes | | | | | 29 | | | | | | 2,132 | | | | | | (418) | | |
Net (increase) decrease in other assets | | | | | 2,924 | | | | | | (385) | | | | | | 1,161 | | |
Net increase in other liabilities | | | | | 1,321 | | | | | | 599 | | | | | | 1,281 | | |
Net cash and cash equivalents provided by operating activities | | | | | 18,023 | | | | | | 12,219 | | | | | | 11,485 | | |
Investing activities: | | | | | | | | | | | | | | | |||||
Proceeds from sales of available for sale securities | | | | | — | | | | | | 3,966 | | | | | | — | | |
Proceeds from paydowns, maturities and calls of available for sale securities | | | | | — | | | | | | 1 | | | | | | — | | |
Purchases of held to maturity securities | | | | | (46,055) | | | | | | (18,153) | | | | | | (18,284) | | |
Proceeds from paydowns, maturities and calls of held to maturity securities | | | | | 57,622 | | | | | | 13,607 | | | | | | 6,571 | | |
Loan originations and payments, net | | | | | (108,760) | | | | | | (127,334) | | | | | | (100,837) | | |
Purchase of bank-owned life insurance | | | | | — | | | | | | (1,500) | | | | | | (2,000) | | |
Net cash received in PGFSB acquisition | | | | | — | | | | | | — | | | | | | 22,430 | | |
Proceeds from sale of PGFSB loans | | | | | — | | | | | | — | | | | | | 3,499 | | |
Investment in mortgage affiliate, net | | | | | 939 | | | | | | (119) | | | | | | (4,877) | | |
Net (increase) decrease in stock in Federal Reserve Bank and Federal Home Loan Bank | | | | | (1,000) | | | | | | (1,248) | | | | | | 327 | | |
Payments received on FDIC indemnification asset | | | | | 18 | | | | | | 3 | | | | | | 1,037 | | |
Proceeds from sale of other real estate owned | | | | | 1,790 | | | | | | 4,048 | | | | | | 3,276 | | |
Purchases of bank premises and equipment | | | | | (143) | | | | | | (307) | | | | | | (897) | | |
Net cash and cash equivalents used in investing activities | | | | | (95,589) | | | | | | (127,036) | | | | | | (89,755) | | |
Financing activities: | | | | | | | | | | | | | | | |||||
Net increase in deposits | | | | | 77,307 | | | | | | 82,869 | | | | | | 112,838 | | |
Cash dividends paid – common stock | | | | | (3,921) | | | | | | (6,359) | | | | | | (7,239) | | |
Issuance of common stock under Stock Incentive Plan | | | | | 135 | | | | | | 707 | | | | | | 886 | | |
Issuance of common stock for warrants exercised | | | | | 101 | | | | | | — | | | | | | — | | |
Repurchase of common stock | | | | | — | | | | | | (721) | | | | | | — | | |
Proceeds from Federal Home Loan Bank advances-long term | | | | | — | | | | | | 10,000 | | | | | | — | | |
Repayment of Federal Home Loan Bank advances-long term | | | | | — | | | | | | (20,000) | | | | | | — | | |
Net increase (decrease) in securities sold under agreement to repurchase and other short-term borrowings | | | | | 21,000 | | | | | | 40,337 | | | | | | (10,751) | | |
Net cash and cash equivalents provided by financing activities | | | | | 94,622 | | | | | | 106,833 | | | | | | 95,734 | | |
Increase (decrease) in cash and cash equivalents | | | | | 17,056 | | | | | | (7,984) | | | | | | 17,464 | | |
Cash and cash equivalents at beginning of period | | | | | 30,336 | | | | | | 38,320 | | | | | | 20,856 | | |
Cash and cash equivalents at end of period | | | | $ | 47,392 | | | | | $ | 30,336 | | | | | $ | 38,320 | | |
Supplemental disclosure of cash flow information | | | | | | | | | | ||||||||||
Cash payments for: | | | | | |||||||||||||||
Interest | | | | $ | 8,289 | | | | | $ | 6,791 | | | | | $ | 4,454 | | |
Income taxes | | | | | 4,604 | | | | | | 2,993 | | | | | | 3,283 | | |
Supplemental schedule of noncash investing and financing activities | | | | | |||||||||||||||
Transfer from non-covered loans to other real estate owned | | | | | — | | | | | | 1,384 | | | | | | 4,409 | | |
Transfer from covered loans to other real estate owned | | | | | 144 | | | | | | 343 | | | | | | 342 | | |
Transfer from covered loans to non-covered loans | | | | | — | | | | | | — | | | | | | 7,344 | | |
Issuance of common stock in exchange for net assets in acquisition | | | | | — | | | | | | — | | | | | | 5,748 | | |
Transfer from long-term FHLB advances to short-term FHLB advances | | | | | 15,000 | | | | | | — | | | | | | — | | |
Transfer from securities sold under agreement to repurchase to deposits | | | | | 10,381 | | | | | | — | | | | | | — | | |
Southern National purchases amortizing investment securities in which the underlying assets are residential mortgage loans subject to prepayments. The actual principal reduction on these assets varies from the expected contractual principal reduction due to principal prepayments resulting from the borrowers’ election to refinance the underlying mortgage based on market and other conditions. The purchase premiums and discounts associated with these assets are amortized or accreted to interest income over the estimated life of the related assets. The estimated life is calculated by projecting future prepayments and the resulting principal cash flows until maturity. Prepayment rate projections utilize actual prepayment speed experience and available market information on like-kind instruments. The prepayment rates form the
The accrual of interest on all loans is discontinued at the time the loan is 90 days delinquent unless the credit is well secured and in process of collection. In all cases, loans are placed on nonaccrual status or charged-off at an earlier date if collection of principal and interest is considered doubtful.
Allowance for Loan and Lease Losses (ALLL)
Commercial real estate consists of borrowings secured by owner-occupied and non-owner-occupied commercial real estate. Repayment of these loans is dependent upon rental income or the subsequent sale of the property for loans secured by non-owner-occupied commercial real estate and by cash flows from business operations for owner-occupied commercial real estate. Loans for which the source of repayment is rental income are primarily impacted by local economic conditions which dictate occupancy rates and the amount of rent charged. Commercial real estate loans that are dependent on cash flows from operations can also be adversely affected by current market conditions for their product or service.
Bank Premises and Equipment
Impairment of Long-Lived Assets
Certain items
previously reported cash flows, shareholders’ equity or net income.
Restrictions on Cash
In January 2014, the FASB issued ASU No. 2014-04,"Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure."The objective of this guidance is to clarify when an in substance repossession or foreclosure occurs, that is, when a creditor should be considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan such that the loan receivable should be derecognized and the real estate property recognized. ASU No. 2014-04 states that an in substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, upon either (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (2) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. Additionally, ASU No. 2014-04 requires interim and annual disclosure of both (1) the amount of foreclosed residential real estate property held by the creditor and (2) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction. ASU No. 2014-04 is effective for interim and annual reporting periods beginning after December 15, 2014. The adoption of ASU No. 2014-04 did not to have a material impact on the Southern National’s Consolidated Financial Statements, but did add additional disclosures.
In May 2014, the FASB issued ASU No. 2014-09,Revenue from Contracts with Customers (Topic 606). These amendments affect any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (e.g. insurance contracts or lease contracts). This ASU will supersede the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance, and creates a Topic 606, Revenue from Contracts with Customers. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASU also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. This ASU will be effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early adoption is not permitted. The ASU allows for either full retrospective or modified retrospective adoption. SNBV is assessing the effects of this ASU, which exclude financial instruments from its scope, but does not anticipate that it will have a material impact on its financial position or results of operations.
In September 2014, the FASBFinancial Accounting Standards Board (“FASB”) issued ASUAccounting Standards Update (“ASU”) No. 2014-12,Compensation—Compensation — Stock Compensation (Topic 718):Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved After the Requisite Service Period. The amendments clarify the proper method of accounting for share-based payments when the terms of an award provide that a performance target could be achieved after the requisite service period. This ASU requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. The performance target should not be reflected in estimating the grant-date fair value of the award. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. The amendments in this ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. EarlierThis ASU did not significantly impact SNBV.
expect the adoption to have a significant impact.
Amortized | Gross Unrealized | Fair | ||||||||||||||
December 31, 2015 | Cost | Gains | Losses | Value | ||||||||||||
Obligations of states and political subdivisions | $ | 2,287 | $ | 25 | $ | - | $ | 2,312 | ||||||||
Trust preferred securities | 2,590 | - | (693 | ) | 1,897 | |||||||||||
$ | 4,877 | $ | 25 | $ | (693 | ) | $ | 4,209 |
Amortized | Gross Unrealized | Fair | ||||||||||||||
December 31, 2014 | Cost | Gains | Losses | Value | ||||||||||||
Obligations of states and political subdivisions | $ | 2,295 | $ | - | $ | (10 | ) | $ | 2,285 |
December 31, 2016 | | | Amortized Cost | | | Gross Unrealized | | | Fair Value | | |||||||||||||||
| Gains | | | Losses | | ||||||||||||||||||||
Obligations of states and political subdivisions | | | | $ | 2,280 | | | | | $ | 9 | | | | | $ | (30) | | | | | $ | 2,259 | | |
Trust preferred securities | | | | | 2,590 | | | | | | — | | | | | | (931) | | | | | | 1,659 | | |
| | | | $ | 4,870 | | | | | $ | 9 | | | | | $ | (961) | | | | | $ | 3,918 | | |
|
December 31, 2015 | | | Amortized Cost | | | Gross Unrealized | | | Fair Value | | |||||||||||||||
| Gains | | | Losses | | ||||||||||||||||||||
Obligations of states and political subdivisions | | | | $ | 2,287 | | | | | $ | 25 | | | | | $ | — | | | | | $ | 2,312 | | |
Trust preferred securities | | | | | 2,590 | | | | | | — | | | | | | (693) | | | | | | 1,897 | | |
| | | | $ | 4,877 | | | | | $ | 25 | | | | | $ | (693) | | | | | $ | 4,209 | | |
|
Amortized | Gross Unrecognized | Fair | ||||||||||||||
December 31, 2015 | Cost | Gains | Losses | Value | ||||||||||||
Residential government-sponsored mortgage-backed securities | $ | 20,751 | $ | 459 | $ | (22 | ) | $ | 21,188 | |||||||
Residential government-sponsored collateralized mortgage obligations | 2,946 | - | (66 | ) | 2,880 | |||||||||||
Government-sponsored agency securities | 55,937 | 222 | (618 | ) | 55,541 | |||||||||||
Obligations of states and political subdivisions | 12,794 | 157 | (67 | ) | 12,884 | |||||||||||
Trust preferred securities | 4,352 | - | (381 | ) | 3,971 | |||||||||||
$ | 96,780 | $ | 838 | $ | (1,154 | ) | $ | 96,464 |
Amortized | Gross Unrecognized | Fair | ||||||||||||||
December 31, 2014 | Cost | Gains | Losses | Value | ||||||||||||
Residential government-sponsored mortgage-backed securities | $ | 22,897 | $ | 708 | $ | (8 | ) | $ | 23,597 | |||||||
Residential government-sponsored collateralized mortgage obligations | 3,564 | - | (53 | ) | 3,511 | |||||||||||
Government-sponsored agency securities | 44,949 | 294 | (822 | ) | 44,421 | |||||||||||
Obligations of states and political subdivisions | 15,531 | 108 | (145 | ) | 15,494 | |||||||||||
Other residential collateralized mortgage obligations | 599 | - | - | 599 | ||||||||||||
Trust preferred securities | 6,518 | 1,527 | (1,574 | ) | 6,471 | |||||||||||
$ | 94,058 | $ | 2,637 | $ | (2,602 | ) | $ | 94,093 |
December 31, 2016 | | | Amortized Cost | | | Gross Unrecognized | | | Fair Value | | |||||||||||||||
| Gains | | | Losses | | ||||||||||||||||||||
Residential government-sponsored mortgage-backed securities | | | | $ | 18,594 | | | | | $ | 308 | | | | | $ | (118) | | | | | | 18,784 | | |
Residential government-sponsored collateralized mortgage obligations | | | | | 2,371 | | | | | | — | | | | | | (54) | | | | | | 2,317 | | |
Government-sponsored agency securities | | | | | 47,975 | | | | | | 28 | | | | | | (1,865) | | | | | | 46,138 | | |
Obligations of states and political subdivisions | | | | | 12,706 | | | | | | 53 | | | | | | (162) | | | | | | 12,597 | | |
Trust preferred securities | | | | | 3,654 | | | | | | — | | | | | | (146) | | | | | | 3,508 | | |
| | | | $ | 85,300 | | | | | $ | 389 | | | | | $ | (2,345) | | | | | $ | 83,344 | | |
|
December 31, 2015 | | | Amortized Cost | | | Gross Unrecognized | | | Fair Value | | |||||||||||||||
| Gains | | | Losses | | ||||||||||||||||||||
Residential government-sponsored mortgage-backed securities | | | | $ | 20,751 | | | | | $ | 459 | | | | | $ | (22) | | | | | $ | 21,188 | | |
Residential government-sponsored collateralized mortgage obligations | | | | | 2,946 | | | | | | — | | | | | | (66) | | | | | | 2,880 | | |
Government-sponsored agency securities | | | | | 55,937 | | | | | | 222 | | | | | | (618) | | | | | | 55,541 | | |
Obligations of states and political subdivisions | | | | | 12,794 | | | | | | 157 | | | | | | (67) | | | | | | 12,884 | | |
Trust preferred securities | | | | | 4,352 | | | | | | — | | | | | | (381) | | | | | | 3,971 | | |
| | | | $ | 96,780 | | | | | $ | 838 | | | | | $ | (1,154) | | | | | $ | 96,464 | | |
|
During 2014 we sold no securities. During 2013, we sold 55 thousand shares of available for sale FHLMC preferred stock resulting in a gain of $142 thousand.
Held to Maturity | Available for Sale | |||||||||||||||
Amortized | Amortized | |||||||||||||||
Cost | Fair Value | Cost | Fair Value | |||||||||||||
Due in five to ten years | $ | 12,200 | $ | 12,206 | $ | - | $ | - | ||||||||
Due after ten years | 60,883 | 60,190 | 4,877 | 4,209 | ||||||||||||
Residential government-sponsored mortgage-backed securities | 20,751 | 21,188 | - | - | ||||||||||||
Residential government-sponsored collateralized mortgage obligations | 2,946 | 2,880 | - | - | ||||||||||||
Total | $ | 96,780 | $ | 96,464 | $ | 4,877 | $ | 4,209 |
| | | Held to Maturity | | | Available for Sale | | ||||||||||||||||||
| | | Amortized Cost | | | Fair Value | | | Amortized Cost | | | Fair Value | | ||||||||||||
Due in one to five years | | | | $ | 1,459 | | | | | $ | 1,440 | | | | | $ | — | | | | | $ | — | | |
Due in five to ten years | | | | | 5,727 | | | | | | 5,720 | | | | | | — | | | | | | — | | |
Due after ten years | | | | | 57,149 | | | | | | 55,083 | | | | | | 4,870 | | | | | | 3,918 | | |
Residential government-sponsored mortgage-backed securities | | | | | 18,594 | | | | | | 18,784 | | | | | | — | | | | | | — | | |
Residential government-sponsored collateralized mortgage obligations | | | | | 2,371 | | | | | | 2,317 | | | | | | — | | | | | | — | | |
Total | | | | $ | 85,300 | | | | | $ | 83,344 | | | | | $ | 4,870 | | | | | $ | 3,918 | | |
|
December 31, 2015 | ||||||||||||||||||||||||
Less than 12 months | 12 Months or More | Total | ||||||||||||||||||||||
Available for Sale | Fair value | Unrealized Losses | Fair value | Unrealized Losses | Fair value | Unrealized Losses | ||||||||||||||||||
Trust preferred securities | $ | - | $ | - | $ | 1,897 | $ | (693 | ) | $ | 1,897 | $ | (693 | ) |
Less than 12 months | 12 Months or More | Total | ||||||||||||||||||||||
Held to Maturity | Fair value | Unrecognized Losses | Fair value | Unrecognized Losses | Fair value | Unrecognized Losses | ||||||||||||||||||
Residential government-sponsored mortgage-backed securities | $ | 5,459 | $ | (14 | ) | $ | 640 | $ | (8 | ) | $ | 6,099 | $ | (22 | ) | |||||||||
Residential government-sponsored collateralized mortgage obligations | 512 | (5 | ) | 2,368 | (61 | ) | 2,880 | (66 | ) | |||||||||||||||
Government-sponsored agency securities | 35,453 | (507 | ) | 9,878 | (111 | ) | 45,331 | (618 | ) | |||||||||||||||
Obligations of states and political subdivisions | - | - | 2,513 | (67 | ) | 2,513 | (67 | ) | ||||||||||||||||
Trust preferred securities | - | - | 3,971 | (381 | ) | 3,971 | (381 | ) | ||||||||||||||||
$ | 41,424 | $ | (526 | ) | $ | 19,370 | $ | (628 | ) | $ | 60,794 | $ | (1,154 | ) |
Less than 12 months | 12 Months or More | Total | ||||||||||||||||||||||
Available for Sale | Fair value | Unrealized Losses | Fair value | Unrealized Losses | Fair value | Unrealized Losses | ||||||||||||||||||
Obligations of states and political subdivisions | $ | 485 | $ | (1 | ) | $ | 1,800 | $ | (9 | ) | $ | 2,285 | $ | (10 | ) |
Less than 12 months | 12 Months or More | Total | ||||||||||||||||||||||
Held to Maturity | Fair value | Unrecognized Losses | Fair value | Unrecognized Losses | Fair value | Unrecognized Losses | ||||||||||||||||||
Residential government-sponsored mortgage-backed securities | $ | 3,506 | $ | (8 | ) | $ | - | $ | - | $ | 3,506 | $ | (8 | ) | ||||||||||
Residential government-sponsored collateralized mortgage obligations | 692 | (3 | ) | 2,819 | (50 | ) | 3,511 | (53 | ) | |||||||||||||||
Government-sponsored agency securities | - | - | 29,154 | (822 | ) | 29,154 | (822 | ) | ||||||||||||||||
Obligations of states and political subdivisions | 485 | (20 | ) | 8,139 | (125 | ) | 8,624 | (145 | ) | |||||||||||||||
Trust preferred securities | - | - | 4,233 | (1,574 | ) | 4,233 | (1,574 | ) | ||||||||||||||||
$ | 4,683 | $ | (31 | ) | $ | 44,345 | $ | (2,571 | ) | $ | 49,028 | $ | (2,602 | ) |
2016
| | | Less than 12 months | | | 12 Months or More | | | Total | | |||||||||||||||||||||||||||
Available for Sale | | | Fair value | | | Unrealized Losses | | | Fair value | | | Unrealized Losses | | | Fair value | | | Unrealized Losses | | ||||||||||||||||||
Obligations of states and political subdivisions | | | | $ | 1,706 | | | | | $ | (30) | | | | | $ | — | | | | | $ | — | | | | | $ | 1,706 | | | | | $ | (30) | | |
Trust preferred securities | | | | | — | | | | | | — | | | | | | 1,658 | | | | | | (931) | | | | | | 1,658 | | | | | | (931) | | |
| | | | $ | 1,706 | | | | | $ | (30) | | | | | $ | 1,658 | | | | | $ | (931) | | | | | $ | 3,364 | | | | | $ | (961) | | |
|
| | | Less than 12 months | | | 12 Months or More | | | Total | | |||||||||||||||||||||||||||
Held to Maturity | | | Fair value | | | Unrecognized Losses | | | Fair value | | | Unrecognized Losses | | | Fair value | | | Unrecognized Losses | | ||||||||||||||||||
Residential government-sponsored mortgage-backed securities | | | | $ | 10,238 | | | | | $ | (110) | | | | | $ | 457 | | | | | $ | (8) | | | | | $ | 10,695 | | | | | $ | (118) | | |
Residential government-sponsored collateralized mortgage obligations | | | | | 1,346 | | | | | | (27) | | | | | | 971 | | | | | | (27) | | | | | | 2,317 | | | | | | (54) | | |
Government-sponsored agency securities | | | | | 41,110 | | | | | | (1,865) | | | | | | — | | | | | | — | | | | | | 41,110 | | | | | | (1,865) | | |
Obligations of states and political subdivisions | | | | | 3,578 | | | | | | (98) | | | | | | 1,065 | | | | | | (64) | | | | | | 4,643 | | | | | | (162) | | |
Trust preferred securities | | | | | — | | | | | | — | | | | | | 3,508 | | | | | | (146) | | | | | | 3,508 | | | | | | (146) | | |
| | | | $ | 56,272 | | | | | $ | (2,100) | | | | | $ | 6,001 | | | | | $ | (245) | | | | | $ | 62,273 | | | | | $ | (2,345) | | |
|
| | | Less than 12 months | | | 12 Months or More | | | Total | | |||||||||||||||||||||||||||
Available for Sale | | | Fair value | | | Unrealized Losses | | | Fair value | | | Unrealized Losses | | | Fair value | | | Unrealized Losses | | ||||||||||||||||||
Trust preferred securities | | | | $ | — | | | | | $ | — | | | | | $ | 1,897 | | | | | $ | (693) | | | | | $ | 1,897 | | | | | $ | (693) | | |
|
| | | Less than 12 months | | | 12 Months or More | | | Total | | |||||||||||||||||||||||||||
Held to Maturity | | | Fair value | | | Unrecognized Losses | | | Fair value | | | Unrecognized Losses | | | Fair value | | | Unrecognized Losses | | ||||||||||||||||||
Residential government-sponsored mortgage-backed securities | | | | $ | 5,459 | | | | | $ | (14) | | | | | $ | 640 | | | | | $ | (8) | | | | | $ | 6,099 | | | | | $ | (22) | | |
Residential government-sponsored collateralized mortgage obligations | | | | | 512 | | | | | | (5) | | | | | | 2,368 | | | | | | (61) | | | | | | 2,880 | | | | | | (66) | | |
Government-sponsored agency securities | | | | | 35,453 | | | | | | (507) | | | | | | 9,878 | | | | | | (111) | | | | | | 45,331 | | | | | | (618) | | |
Obligations of states and political subdivisions | | | | | — | | | | | | — | | | | | | 2,513 | | | | | | (67) | | | | | | 2,513 | | | | | | (67) | | |
Trust preferred securities | | | | | — | | | | | | — | | | | | | 3,971 | | | | | | (381) | | | | | | 3,971 | | | | | | (381) | | |
| | | | $ | 41,424 | | | | | $ | (526) | | | | | $ | 19,370 | | | | | $ | (628) | | | | | $ | 60,794 | | | | | $ | (1,154) | | |
|
Previously | ||||||||||||||||||||||||||||||
% of Current | Recognized | |||||||||||||||||||||||||||||
Defaults and | Cumulative | |||||||||||||||||||||||||||||
Ratings | Estimated | Deferrals to | Other | |||||||||||||||||||||||||||
Tranche | When Purchased | Current Ratings | Fair | Total | Comprehensive | |||||||||||||||||||||||||
Security | Level | Moody's | Fitch | Moody's | Fitch | Par Value | Book Value | Value | Collateral | Loss (1) | ||||||||||||||||||||
Held to Maturity | (in thousands) | |||||||||||||||||||||||||||||
ALESCO VII A1B | Senior | Aaa | AAA | A1 | A | $ | 4,462 | $ | 4,081 | $ | 3,733 | 13 | % | $ | 251 | |||||||||||||||
MMCF III B | Senior Sub | A3 | A- | Ba1 | BB | 276 | 271 | 238 | 32 | % | 5 | |||||||||||||||||||
4,738 | 4,352 | 3,971 | $ | 256 |
Cumulative OTTI | ||||||||||||||||||||||||||||||
Available for Sale | Related to | |||||||||||||||||||||||||||||
Other Than Temporarily Impaired: | Credit Loss (2) | |||||||||||||||||||||||||||||
TPREF FUNDING II | Mezzanine | A1 | A- | Caa3 | C | 1,500 | 1,100 | 680 | 36 | % | 400 | |||||||||||||||||||
ALESCO V C1 | Mezzanine | A2 | A | Caa3 | C | 2,150 | 1,490 | 1,217 | 13 | % | 660 | |||||||||||||||||||
3,650 | 2,590 | 1,897 | $ | 1,060 | ||||||||||||||||||||||||||
Total | $ | 8,388 | $ | 6,942 | $ | 5,868 |
Security | | | Tranche Level | | | Ratings When Purchased | | | Current Ratings | | | Par Value | | | Book Value | | | Estimated Fair Value | | | % of Current Defaults and Deferrals to Total Collateral | | | Previously Recognized Cumulative Other Comprehensive Loss(1) | | |||||||||||||||||||||
| Moody’s | | | Fitch | | | Moody’s | | | Fitch | | |||||||||||||||||||||||||||||||||||
Held to Maturity | | | | | | | | | | | | | | | | | | (in thousands) | | | | |||||||||||||||||||||||||
ALESCO VII A1B | | | Senior | | | Aaa | | | AAA | | | A1 | | | A | | | | $ | 3,688 | | | | | $ | 3,389 | | | | | $ | 3,275 | | | | | | 11% | | | | | $ | 239 | | |
MMCF III B | | | Senior Sub | | | A3 | | | A- | | | Ba1 | | | BB | | | | | 269 | | | | | | 265 | | | | | | 233 | | | | | | 32% | | | | | | 4 | | |
| | | | | | | | | | | | | | | | | | | | 3,957 | | | | | | 3,654 | | | | | | 3,508 | | | | | | | | | | | $ | 243 | | |
Available for Sale Other Than Temporarily Impaired: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cumulative OTTI Related to Credit Loss(2) | | |||
TPREF FUNDING II | | | Mezzanine | | | A1 | | | A- | | | Caa3 | | | C | | | | | 1,500 | | | | | | 1,099 | | | | | | 623 | | | | | | 37% | | | | | $ | 400 | | |
ALESCO V C1 | | | Mezzanine | | | A2 | | | A | | | Caa3 | | | C | | | | | 2,150 | | | | | | 1,491 | | | | | | 1,036 | | | | | | 10% | | | | | | 659 | | |
| | | | | | | | | | | | | | | | | | | | 3,650 | | | | | | 2,590 | | | | | | 1,659 | | | | | | | | | | | $ | 1,059 | | |
Total | | | | | | | | | | | | | | | | | | | $ | 7,607 | | | | | $ | 6,244 | | | | | $ | 5,167 | | | | | ||||||||||
|
2014.
2015 | 2014 | 2013 | ||||||||||
Amount of cumulative other-than-temporary impairment related to credit loss prior to January 1 | $ | 8,949 | $ | 8,911 | $ | 8,994 | ||||||
Amounts related to credit loss for which an other-than-temporary impairment was not previously recognized | - | - | - | |||||||||
Amounts related to credit loss for which an other-than-temporary impairment was previously recognized | - | 41 | 3 | |||||||||
Reductions due to sales of securities for which an other-than-temporary impairment was previously recognized | (7,889 | ) | - | - | ||||||||
Reductions due to realized losses | - | (3 | ) | (86 | ) | |||||||
Amount of cumulative other-than-temporary impairment related to credit loss as of December 31 | $ | 1,060 | $ | 8,949 | $ | 8,911 |
| | | 2016 | | | 2015 | | | 2014 | | |||||||||
| | | | | | | | | | | | | | | | | | | |
Amount of cumulative other-than-temporary impairment related to credit loss prior to January 1 | | | | $ | 1,060 | | | | | $ | 8,949 | | | | | $ | 8,911 | | |
Amounts related to credit loss for which an other-than-temporary impairment was not previously recognized | | | | | — | | | | | | — | | | | | | — | | |
Amounts related to credit loss for which an other-than-temporary impairment was previously recognized | | | | | — | | | | | | — | | | | | | 41 | | |
Reductions due to sales of securities for which an other-than-temporary impairment was previously recognized | | | | | — | | | | | | (7,889) | | | | | | — | | |
Reductions due to realized losses | | | | | — | | | | | | — | | | | | | (3) | | |
Amount of cumulative other-than-temporary impairment related to credit loss as of December 31 | | | | $ | 1,060 | | | | | $ | 1,060 | | | | | $ | 8,949 | | |
|
For the year ended December 31, 2016 | | | Unrealized Holding Gains (Losses) on Available for Sale Securities | | | Held to Maturity Securities | | | Total | | |||||||||
Beginning balance | | | | $ | (440) | | | | | $ | (170) | | | | | $ | (610) | | |
Other comprehensive income/(loss) before reclassifications | | | | | (187) | | | | | | 8 | | | | | $ | (179) | | |
Amounts reclassified from accumulated other comprehensive income/(loss) | | | | | — | | | | | | — | | | | | | — | | |
Net current-period other comprehensive income/(loss) | | | | | (187) | | | | | | 8 | | | | | | (179) | | |
Ending balance | | | | $ | (627) | | | | | $ | (162) | | | | | $ | (789) | | |
|
For the year ended December 31, 2015 | | | Unrealized Holding Gains (Losses) on Available for Sale Securities | | | Held to Maturity Securities | | | Total | | |||||||||
Beginning balance | | | | $ | (6) | | | | | $ | (3,014) | | | | | $ | (3,020) | | |
Other comprehensive income/(loss) before reclassifications | | | | | (434) | | | | | | 21 | | | | | $ | (413) | | |
Amounts reclassified from accumulated other comprehensive income/(loss) | | | | | — | | | | | | 2,823 | | | | | | 2,823 | | |
Net current-period other comprehensive income/(loss) | | | | | (434) | | | | | | 2,844 | | | | | | 2,410 | | |
Ending balance | | | | $ | (440) | | | | | $ | (170) | | | | | $ | (610) | | |
|
For the year ended December 31, 2014 | | | Unrealized Holding Gains (Losses) on Available for Sale Securities | | | Held to Maturity Securities | | | Total | | |||||||||
Beginning balance | | | | $ | (203) | | | | | $ | (2,987) | | | | | $ | (3,190) | | |
Other comprehensive income/(loss) before reclassifications | | | | | 197 | | | | | | (27) | | | | | | 170 | | |
Amounts reclassified from accumulated other comprehensive income/(loss) | | | | | — | | | | | | — | | | | | | — | | |
Net current-period other comprehensive income/(loss) | | | | | 197 | | | | | | (27) | | | | | | 170 | | |
Ending balance | | | | $ | (6) | | | | | $ | (3,014) | | | | | $ | (3,020) | | |
|
Unrealized Holding | ||||||||||||
Gains (Losses) on | ||||||||||||
For the year ended December 31, 2015 | Available for Sale | Held to Maturity | ||||||||||
Securities | Securities | Total | ||||||||||
Beginning balance | $ | (6 | ) | $ | (3,014 | ) | $ | (3,020 | ) | |||
Other comprehensive income/(loss) before reclassifications | (434 | ) | 21 | $ | (413 | ) | ||||||
Amounts reclassified from accumulated other comprehensive income/(loss) | - | 2,823 | 2,823 | |||||||||
Net current-period other comprehensive income/(loss) | (434 | ) | 2,844 | 2,410 | ||||||||
Ending balance | $ | (440 | ) | $ | (170 | ) | $ | (610 | ) |
Unrealized Holding | ||||||||||||
Gains (Losses) on | ||||||||||||
For the year ended December 31, 2014 | Available for Sale | Held to Maturity | ||||||||||
Securities | Securities | Total | ||||||||||
Beginning balance | $ | (203 | ) | $ | (2,987 | ) | $ | (3,190 | ) | |||
Other comprehensive income/(loss) before reclassifications | 197 | (27 | ) | 170 | ||||||||
Amounts reclassified from accumulated other comprehensive income/(loss) | - | - | - | |||||||||
Net current-period other comprehensive income/(loss) | 197 | (27 | ) | 170 | ||||||||
Ending balance | $ | (6 | ) | $ | (3,014 | ) | $ | (3,020 | ) |
Unrealized Holding | ||||||||||||
Gains (Losses) on | ||||||||||||
For the year ended December 31, 2013 | Available for Sale | Held to Maturity | ||||||||||
Securities | Securities | Total | ||||||||||
Beginning balance | $ | 44 | $ | (3,025 | ) | $ | (2,981 | ) | ||||
Other comprehensive income/(loss) before reclassifications | (153 | ) | 38 | (115 | ) | |||||||
Amounts reclassified from accumulated other comprehensive income/(loss) | (94 | ) | - | (94 | ) | |||||||
Net current-period other comprehensive income/(loss) | (247 | ) | 38 | (209 | ) | |||||||
Ending balance | $ | (203 | ) | $ | (2,987 | ) | $ | (3,190 | ) |
Covered | Non-covered | Total | Covered | Non-covered | Total | |||||||||||||||||||
Loans (1) | Loans | Loans | Loans (1) | Loans | Loans | |||||||||||||||||||
December 31, 2015 | December 31, 2014 | |||||||||||||||||||||||
Loans secured by real estate: | ||||||||||||||||||||||||
Commercial real estate - owner-occupied | $ | - | $ | 141,521 | $ | 141,521 | $ | - | $ | 136,597 | $ | 136,597 | ||||||||||||
Commercial real estate - non-owner-occupied | - | 256,513 | 256,513 | - | 200,517 | 200,517 | ||||||||||||||||||
Secured by farmland | - | 578 | 578 | - | 612 | 612 | ||||||||||||||||||
Construction and land loans | - | 67,832 | 67,832 | - | 57,938 | 57,938 | ||||||||||||||||||
Residential 1-4 family | 12,994 | 165,077 | 178,071 | 14,837 | 123,233 | 138,070 | ||||||||||||||||||
Multi- family residential | - | 25,501 | 25,501 | - | 21,832 | 21,832 | ||||||||||||||||||
Home equity lines of credit | 21,379 | 13,798 | 35,177 | 23,658 | 9,751 | 33,409 | ||||||||||||||||||
Total real estate loans | 34,373 | 670,820 | 705,193 | 38,495 | 550,480 | 588,975 | ||||||||||||||||||
Commercial loans | - | 124,985 | 124,985 | - | 114,714 | 114,714 | ||||||||||||||||||
Consumer loans | - | 1,366 | 1,366 | - | 1,564 | 1,564 | ||||||||||||||||||
Gross loans | 34,373 | 797,171 | 831,544 | 38,495 | 666,758 | 705,253 | ||||||||||||||||||
Less deferred fees on loans | - | (2,119 | ) | (2,119 | ) | 1 | (1,782 | ) | (1,781 | ) | ||||||||||||||
Loans, net of deferred fees | $ | 34,373 | $ | 795,052 | $ | 829,425 | $ | 38,496 | $ | 664,976 | $ | 703,472 |
| | | Covered Loans(1) | | | Non-covered Loans | | | Total Loans | | | Covered Loans(1) | | | Non-covered Loans | | | Total Loans | | ||||||||||||||||||
| | | December 31, 2016 | | | December 31, 2015 | | ||||||||||||||||||||||||||||||
Loans secured by real estate: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate – owner-occupied | | | | $ | — | | | | | $ | 154,807 | | | | | $ | 154,807 | | | | | $ | — | | | | | $ | 141,521 | | | | | $ | 141,521 | | |
Commercial real estate – non-owner-occupied | | | | | — | | | | | | 279,634 | | | | | | 279,634 | | | | | | — | | | | | | 256,513 | | | | | | 256,513 | | |
Secured by farmland | | | | | — | | | | | | 541 | | | | | | 541 | | | | | | — | | | | | | 578 | | | | | | 578 | | |
Construction and land loans | | | | | — | | | | | | 91,067 | | | | | | 91,067 | | | | | | — | | | | | | 67,832 | | | | | | 67,832 | | |
Residential 1– 4 family | | | | | 10,519 | | | | | | 220,291 | | | | | | 230,810 | | | | | | 12,994 | | | | | | 165,077 | | | | | | 178,071 | | |
Multi-family residential | | | | | — | | | | | | 30,021 | | | | | | 30,021 | | | | | | — | | | | | | 25,501 | | | | | | 25,501 | | |
Home equity lines of credit | | | | | 17,661 | | | | | | 11,542 | | | | | | 29,203 | | | | | | 21,379 | | | | | | 13,798 | | | | | | 35,177 | | |
Total real estate loans | | | | | 28,180 | | | | | | 787,903 | | | | | | 816,083 | | | | | | 34,373 | | | | | | 670,820 | | | | | | 705,193 | | |
Commercial loans | | | | | — | | | | | | 115,365 | | | | | | 115,365 | | | | | | — | | | | | | 124,985 | | | | | | 124,985 | | |
Consumer loans | | | | | — | | | | | | 856 | | | | | | 856 | | | | | | — | | | | | | 1,366 | | | | | | 1,366 | | |
Gross loans | | | | | 28,180 | | | | | | 904,124 | | | | | | 932,304 | | | | | | 34,373 | | | | | | 797,171 | | | | | | 831,544 | | |
Less deferred fees on loans | | | | | — | | | | | | (1,889) | | | | | | (1,889) | | | | | | — | | | | | | (2,119) | | | | | | (2,119) | | |
Loans, net of deferred fees | | | | $ | 28,180 | | | | | $ | 902,235 | | | | | $ | 930,415 | | | | | $ | 34,373 | | | | | $ | 795,052 | | | | | $ | 829,425 | | |
|
As part of the Greater Atlantic acquisition, the Bank and the FDIC entered into loss sharing agreements on approximately $143.4 million (contractual basis) of Greater Atlantic Bank’s assets. There were two agreements with the FDIC, one for single family loans which is a 10-year agreement expiring in December 2019, and one for non-single family (commercial) assets which was a 5-year agreement which expired in December 2014. The Bank will share in the losses on the loans and foreclosed loan collateral with the FDIC as specified in the loss sharing agreements; we refer to these assets collectively as “covered assets.” Loans that are not covered in the loss sharing agreement are referred to as “non-covered loans”. As of December 31, 2015,2016, non-covered loans included $29.6$23.0 million of loans acquired in the HarVest acquisition and $52.0$42.2 million acquired in the PGFSB acquisition.
December 31, 2015 | Covered Loans | Non-covered Loans | Total Loans | |||||||||||||||||||||||||||||||||
Unpaid | Unpaid | Unpaid | ||||||||||||||||||||||||||||||||||
Recorded | Principal | Related | Recorded | Principal | Related | Recorded | Principal | Related | ||||||||||||||||||||||||||||
Investment | Balance | Allowance | Investment (1) | Balance | Allowance | Investment | Balance | Allowance | ||||||||||||||||||||||||||||
With no related allowance recorded | �� | |||||||||||||||||||||||||||||||||||
Commercial real estate - owner occupied | $ | - | $ | - | $ | - | $ | 6,492 | $ | 6,986 | $ | - | $ | 6,492 | $ | 6,986 | $ | - | ||||||||||||||||||
Commercial real estate - non-owner occupied (2) | - | - | - | 136 | 230 | - | 136 | 230 | - | |||||||||||||||||||||||||||
Construction and land development | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Commercial loans | - | - | - | 2,102 | 2,698 | - | 2,102 | 2,698 | - | |||||||||||||||||||||||||||
Residential 1-4 family (4) | 1,066 | 1,243 | - | - | - | - | 1,066 | 1,243 | - | |||||||||||||||||||||||||||
Other consumer loans | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Total | $ | 1,066 | $ | 1,243 | $ | - | $ | 8,730 | $ | 9,914 | $ | - | $ | 9,796 | $ | 11,157 | $ | - | ||||||||||||||||||
With an allowance recorded | ||||||||||||||||||||||||||||||||||||
Commercial real estate - owner occupied | $ | - | $ | - | $ | - | $ | 1,370 | $ | 1,484 | $ | 439 | $ | 1,370 | $ | 1,484 | $ | 439 | ||||||||||||||||||
Commercial real estate - non-owner occupied (2) | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Construction and land development | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Commercial loans | - | - | - | 3,382 | 3,382 | 400 | 3,382 | 3,382 | 400 | |||||||||||||||||||||||||||
Residential 1-4 family (4) | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Other consumer loans | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Total | $ | - | $ | - | $ | - | $ | 4,752 | $ | 4,866 | $ | 839 | $ | 4,752 | $ | 4,866 | $ | 839 | ||||||||||||||||||
Grand total | $ | 1,066 | $ | 1,243 | $ | - | $ | 13,482 | $ | 14,780 | $ | 839 | $ | 14,548 | $ | 16,023 | $ | 839 |
| | | Covered Loans | | | Non-covered Loans | | | Total Loans | | |||||||||||||||||||||||||||||||||||||||||||||
December 31, 2016 | | | Recorded Investment | | | Unpaid Principal Balance | | | Related Allowance | | | Recorded Investment(1) | | | Unpaid Principal Balance | | | Related Allowance | | | Recorded Investment | | | Unpaid Principal Balance | | | Related Allowance | | |||||||||||||||||||||||||||
With no related allowance recorded | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate – owner occupied | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 5,583 | | | | | $ | 5,592 | | | | | $ | — | | | | | $ | 5,583 | | | | | $ | 5,592 | | | | | $ | — | | |
Commercial real estate – non-owner occupied(2) | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Construction and land development | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Commercial loans | | | | | — | | | | | | — | | | | | | — | | | | | | 3,002 | | | | | | 3,603 | | | | | | — | | | | | | 3,002 | | | | | | 3,603 | | | | | | — | | |
Residential 1 – 4 family(4) | | | | | 963 | | | | | | 1,113 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 963 | | | | | | 1,113 | | | | | | — | | |
Other consumer loans | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Total | | | | $ | 963 | | | | | $ | 1,113 | | | | | $ | — | | | | | $ | 8,585 | | | | | $ | 9,195 | | | | | $ | — | | | | | $ | 9,548 | | | | | $ | 10,308 | | | | | $ | — | | |
With an allowance recorded | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate – owner occupied | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 688 | | | | | $ | 688 | | | | | $ | 150 | | | | | $ | 688 | | | | | $ | 688 | | | | | $ | 150 | | |
Commercial real estate – non-owner occupied(2) | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Construction and land development | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Commercial loans | | | | | — | | | | | | — | | | | | | — | | | | | | 3,378 | | | | | | 5,798 | | | | | | 750 | | | | | | 3,378 | | | | | | 5,798 | | | | | | 750 | | |
Residential 1 – 4 family(4) | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | — | | | | | | — | | | | | | — | | |
Other consumer loans | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Total | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 4,066 | | | | | $ | 6,486 | | | | | $ | 900 | | | | | $ | 4,066 | | | | | $ | 6,486 | | | | | $ | 900 | | |
Grand total | | | | $ | 963 | | | | | $ | 1,113 | | | | | $ | — | | | | | $ | 12,651 | | | | | $ | 15,681 | | | | | $ | 900 | | | | | $ | 13,614 | | | | | $ | 16,794 | | | | | $ | 900 | | |
|
| | | Covered Loans | | | Non-covered Loans | | | Total Loans | | |||||||||||||||||||||||||||||||||||||||||||||
December 31, 2015 | | | Recorded Investment | | | Unpaid Principal Balance | | | Related Allowance | | | Recorded Investment(1) | | | Unpaid Principal Balance | | | Related Allowance | | | Recorded Investment | | | Unpaid Principal Balance | | | Related Allowance | | |||||||||||||||||||||||||||
With no related allowance recorded | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate – owner occupied | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 6,492 | | | | | $ | 6,986 | | | | | $ | — | | | | | $ | 6,492 | | | | | $ | 6,986 | | | | | $ | — | | |
Commercial real estate – non-owner occupied(2) | | | | | — | | | | | | — | | | | | | — | | | | | | 136 | | | | | | 230 | | | | | | — | | | | | | 136 | | | | | | 230 | | | | | | — | | |
Construction and land development | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Commercial loans | | | | | — | | | | | | — | | | | | | — | | | | | | 2,102 | | | | | | 2,698 | | | | | | — | | | | | | 2,102 | | | | | | 2,698 | | | | | | — | | |
Residential 1– 4 family(4) | | | | | 1,066 | | | | | | 1,243 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,066 | | | | | | 1,243 | | | | | | — | | |
Other consumer loans | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Total | | | | $ | 1,066 | | | | | $ | 1,243 | | | | | $ | — | | | | | $ | 8,730 | | | | | $ | 9,914 | | | | | $ | — | | | | | $ | 9,796 | | | | | $ | 11,157 | | | | | $ | — | | |
With an allowance recorded | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate – owner occupied | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 1,370 | | | | | $ | 1,484 | | | | | $ | 439 | | | | | $ | 1,370 | | | | | $ | 1,484 | | | | | $ | 439 | | |
Commercial real estate – non-owner occupied(2) | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Construction and land development | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Commercial loans | | | | | — | | | | | | — | | | | | | — | | | | | | 3,382 | | | | | | 3,382 | | | | | | 400 | | | | | | 3,382 | | | | | | 3,382 | | | | | | 400 | | |
Residential 1– 4 family(4) | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Other consumer loans | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Total | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 4,752 | | | | | $ | 4,866 | | | | | $ | 839 | | | | | $ | 4,752 | | | | | $ | 4,866 | | | | | $ | 839 | | |
Grand total | | | | $ | 1,066 | | | | | $ | 1,243 | | | | | $ | — | | | | | $ | 13,482 | | | | | $ | 14,780 | | | | | $ | 839 | | | | | $ | 14,548 | | | | | $ | 16,023 | | | | | $ | 839 | | |
|
December 31, 2014 | Covered Loans | Non-covered Loans | Total Loans | |||||||||||||||||||||||||||||||||
Unpaid | Unpaid | Unpaid | ||||||||||||||||||||||||||||||||||
Recorded | Principal | Related | Recorded | Principal | Related | Recorded | Principal | Related | ||||||||||||||||||||||||||||
Investment | Balance | Allowance | Investment (1) | Balance | Allowance | Investment | Balance | Allowance | ||||||||||||||||||||||||||||
With no related allowance recorded | ||||||||||||||||||||||||||||||||||||
Commercial real estate - owner occupied | $ | - | $ | - | $ | - | $ | 10,394 | $ | 10,394 | $ | - | $ | 10,394 | $ | 10,394 | $ | - | ||||||||||||||||||
Commercial real estate - non-owner occupied (2) | - | - | - | 1,859 | 2,118 | - | 1,859 | 2,118 | - | |||||||||||||||||||||||||||
Construction and land development | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Commercial loans | - | - | - | 4,998 | 4,999 | - | 4,998 | 4,999 | - | |||||||||||||||||||||||||||
Residential 1-4 family (4) | 1,740 | 2,053 | - | - | - | - | 1,740 | 2,053 | - | |||||||||||||||||||||||||||
Other consumer loans | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Total | $ | 1,740 | $ | 2,053 | $ | - | $ | 17,251 | $ | 17,511 | $ | - | $ | 18,991 | $ | 19,564 | $ | - | ||||||||||||||||||
With an allowance recorded | ||||||||||||||||||||||||||||||||||||
Commercial real estate - owner occupied | $ | - | $ | - | $ | - | $ | 1,609 | $ | 2,231 | $ | 151 | $ | 1,609 | $ | 2,231 | $ | 151 | ||||||||||||||||||
Commercial real estate - non-owner occupied (2) | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Construction and land development | - | - | - | 467 | 740 | 120 | 467 | 740 | 120 | |||||||||||||||||||||||||||
Commercial loans | - | - | - | 3,141 | 3,944 | 134 | 3,141 | 3,944 | 134 | |||||||||||||||||||||||||||
Residential 1-4 family (4) | - | - | - | 1,344 | 1,465 | 300 | 1,344 | 1,465 | 300 | |||||||||||||||||||||||||||
Other consumer loans | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Total | $ | - | $ | - | $ | - | $ | 6,561 | $ | 8,380 | $ | 705 | $ | 6,561 | $ | 8,380 | $ | 705 | ||||||||||||||||||
Grand total | $ | 1,740 | $ | 2,053 | $ | - | $ | 23,812 | $ | 25,891 | $ | 705 | $ | 25,552 | $ | 27,944 | $ | 705 |
(1) Recorded investment is after cumulative prior charge offs of $1.7 million. These loans also have aggregate SBA guarantees of $4.7 million.
(2) Includes loans secured by farmland and multi-family residential loans.
(3) The Bank recognizes loan impairment and may concurrently record a charge off to the allowance for loan losses.
(4) Includes home equity lines of credit.
Year ended 12/31/15 | Covered Loans | Non-covered Loans | Total Loans | |||||||||||||||||||||
Average | Interest | Average | Interest | Average | Interest | |||||||||||||||||||
Recorded | Income | Recorded | Income | Recorded | Income | |||||||||||||||||||
Investment | Recognized | Investment | Recognized | Investment | Recognized | |||||||||||||||||||
With no related allowance recorded | ||||||||||||||||||||||||
Commercial real estate - owner occupied | $ | - | $ | - | $ | 7,156 | $ | 297 | $ | 7,156 | $ | 297 | ||||||||||||
Commercial real estate - non-owner occupied (1) | - | - | 822 | 11 | 822 | 11 | ||||||||||||||||||
Construction and land development | - | - | 89 | - | 89 | - | ||||||||||||||||||
Commercial loans | - | - | 3,428 | - | 3,428 | - | ||||||||||||||||||
Residential 1-4 family (2) | 1,501 | 26 | - | - | 1,501 | 26 | ||||||||||||||||||
Other consumer loans | - | - | - | - | - | - | ||||||||||||||||||
Total | $ | 1,501 | $ | 26 | $ | 11,495 | $ | 308 | $ | 12,996 | $ | 334 | ||||||||||||
With an allowance recorded | ||||||||||||||||||||||||
Commercial real estate - owner occupied | $ | - | $ | - | $ | 2,259 | $ | 42 | $ | 2,259 | $ | 42 | ||||||||||||
Commercial real estate - non-owner occupied (1) | - | - | - | - | - | - | ||||||||||||||||||
Construction and land development | - | - | 93 | - | 93 | - | ||||||||||||||||||
Commercial loans | - | - | 3,488 | 213 | 3,488 | 213 | ||||||||||||||||||
Residential 1-4 family (2) | - | - | 416 | - | 416 | - | ||||||||||||||||||
Other consumer loans | - | - | - | - | - | - | ||||||||||||||||||
Total | $ | - | $ | - | $ | 6,256 | $ | 255 | $ | 6,256 | $ | 255 | ||||||||||||
Grand total | $ | 1,501 | $ | 26 | $ | 17,751 | $ | 563 | $ | 19,252 | $ | 589 |
| | | Covered Loans | | | Non-covered Loans | | | Total Loans | | |||||||||||||||||||||||||||
Year ended 12/31/16 | | | Average Recorded Investment | | | Interest Income Recognized | | | Average Recorded Investment | | | Interest Income Recognized | | | Average Recorded Investment | | | Interest Income Recognized | | ||||||||||||||||||
With no related allowance recorded | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate – owner occupied | | | | $ | — | | | | | $ | — | | | | | $ | 6,454 | | | | | $ | 292 | | | | | $ | 6,454 | | | | | $ | 292 | | |
Commercial real estate – non-owner occupied(1) | | | | | — | | | | | | — | | | | | | 103 | | | | | | 3 | | | | | | 103 | | | | | | 3 | | |
Construction and land development | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Commercial loans | | | | | — | | | | | | — | | | | | | 2,888 | | | | | | 54 | | | | | | 2,888 | | | | | | 54 | | |
Residential 1– 4 family(2) | | | | | 988 | | | | | | 32 | | | | | | — | | | | | | — | | | | | | 988 | | | | | | 32 | | |
Other consumer loans | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Total | | | | $ | 988 | | | | | $ | 32 | | | | | $ | 9,445 | | | | | $ | 349 | | | | | $ | 10,433 | | | | | $ | 381 | | |
With an allowance recorded | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate – owner occupied | | | | $ | — | | | | | $ | — | | | | | $ | 694 | | | | | $ | 31 | | | | | $ | 694 | | | | | $ | 31 | | |
Commercial real estate – non-owner occupied(1) | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Construction and land development | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Commercial loans | | | | | — | | | | | | — | | | | | | 3,402 | | | | | | 155 | | | | | | 3,402 | | | | | | 155 | | |
Residential 1 – 4 family(2) | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Other consumer loans | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Total | | | | $ | — | | | | | $ | — | | | | | $ | 4,096 | | | | | $ | 186 | | | | | $ | 4,096 | | | | | $ | 186 | | |
Grand total | | | | $ | 988 | | | | | $ | 32 | | | | | $ | 13,541 | | | | | $ | 535 | | | | | $ | 14,529 | | | | | $ | 567 | | |
|
Year ended 12/31/14 | Covered Loans | Non-covered Loans | Total Loans | |||||||||||||||||||||
Average | Interest | Average | Interest | Average | Interest | |||||||||||||||||||
Recorded | Income | Recorded | Income | Recorded | Income | |||||||||||||||||||
Investment | Recognized | Investment | Recognized | Investment | Recognized | |||||||||||||||||||
With no related allowance recorded | ||||||||||||||||||||||||
Commercial real estate - owner occupied | $ | 599 | $ | - | $ | 9,508 | $ | 511 | $ | 10,107 | $ | 511 | ||||||||||||
Commercial real estate - non-owner occupied (1) | 1,611 | - | 581 | - | 2,192 | - | ||||||||||||||||||
Construction and land development | - | - | 421 | - | 421 | - | ||||||||||||||||||
Commercial loans | - | - | 6,154 | 223 | 6,154 | 223 | ||||||||||||||||||
Residential 1-4 family (2) | 1,317 | 40 | 3,984 | - | 5,301 | 40 | ||||||||||||||||||
Other consumer loans | - | - | - | - | - | - | ||||||||||||||||||
Total | $ | 3,527 | $ | 40 | $ | 20,648 | $ | 734 | $ | 24,175 | $ | 774 | ||||||||||||
With an allowance recorded | ||||||||||||||||||||||||
Commercial real estate - owner occupied | $ | - | $ | - | $ | 382 | $ | 14 | $ | 382 | $ | 14 | ||||||||||||
Commercial real estate - non-owner occupied (1) | - | - | - | - | - | - | ||||||||||||||||||
Construction and land development | - | - | 93 | - | 93 | - | ||||||||||||||||||
Commercial loans | - | - | 955 | - | 955 | - | ||||||||||||||||||
Residential 1-4 family (2) | - | - | 415 | - | 415 | - | ||||||||||||||||||
Other consumer loans | - | - | - | - | - | - | ||||||||||||||||||
Total | $ | - | $ | - | $ | 1,845 | $ | 14 | $ | 1,845 | $ | 14 | ||||||||||||
Grand total | $ | 3,527 | $ | 40 | $ | 22,493 | $ | 748 | $ | 26,020 | $ | 788 |
| | | Covered Loans | | | Non-covered Loans | | | Total Loans | | |||||||||||||||||||||||||||
Year ended 12/31/15 | | | Average Recorded Investment | | | Interest Income Recognized | | | Average Recorded Investment | | | Interest Income Recognized | | | Average Recorded Investment | | | Interest Income Recognized | | ||||||||||||||||||
With no related allowance recorded | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate – owner occupied | | | | $ | — | | | | | $ | — | | | | | $ | 7,156 | | | | | $ | 297 | | | | | $ | 7,156 | | | | | $ | 297 | | |
Commercial real estate – non-owner occupied(1) | | | | | — | | | | | | — | | | | | | 822 | | | | | | 11 | | | | | | 822 | | | | | | 11 | | |
Construction and land development | | | | | — | | | | | | — | | | | | | 89 | | | | | | — | | | | | | 89 | | | | | | — | | |
Commercial loans | | | | | — | | | | | | — | | | | | | 3,428 | | | | | | — | | | | | | 3,428 | | | | | | — | | |
Residential 1– 4 family(2) | | | | | 1,501 | | | | | | 26 | | | | | | — | | | | | | — | | | | | | 1,501 | | | | | | 26 | | |
Other consumer loans | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Total | | | | $ | 1,501 | | | | | $ | 26 | | | | | $ | 11,495 | | | | | $ | 308 | | | | | $ | 12,996 | | | | | $ | 334 | | |
With an allowance recorded | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate – owner occupied | | | | $ | — | | | | | $ | — | | | | | $ | 2,259 | | | | | $ | 42 | | | | | $ | 2,259 | | | | | $ | 42 | | |
Commercial real estate – non-owner occupied(1) | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Construction and land development | | | | | — | | | | | | — | | | | | | 93 | | | | | | — | | | | | | 93 | | | | | | — | | |
Commercial loans | | | | | — | | | | | | — | | | | | | 3,488 | | | | | | 213 | | | | | | 3,488 | | | | | | 213 | | |
Residential 1 – 4 family(2) | | | | | — | | | | | | — | | | | | | 416 | | | | | | — | | | | | | 416 | | | | | | — | | |
Other consumer loans | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Total | | | | $ | — | | | | | $ | — | | | | | $ | 6,256 | | | | | $ | 255 | | | | | $ | 6,256 | | | | | $ | 255 | | |
Grand total | | | | $ | 1,501 | | | | | $ | 26 | | | | | $ | 17,751 | | | | | $ | 563 | | | | | $ | 19,252 | | | | | $ | 589 | | |
|
Year ended 12/31/13 | Covered Loans | Non-covered Loans | Total Loans | |||||||||||||||||||||
Average | Interest | Average | Interest | Average | Interest | |||||||||||||||||||
Recorded | Income | Recorded | Income | Recorded | Income | |||||||||||||||||||
Investment | Recognized | Investment | Recognized | Investment | Recognized | |||||||||||||||||||
With no related allowance recorded | ||||||||||||||||||||||||
Commercial real estate - owner occupied | $ | 258 | $ | 55 | $ | 6,852 | $ | 439 | $ | 7,110 | $ | 494 | ||||||||||||
Commercial real estate - non-owner occupied (1) | 2,157 | 134 | 913 | 38 | 3,070 | 172 | ||||||||||||||||||
Construction and land development | 231 | - | 2,612 | - | 2,843 | - | ||||||||||||||||||
Commercial loans | 69 | - | 4,024 | 66 | 4,093 | 66 | ||||||||||||||||||
Residential 1-4 family (2) | 1,580 | 47 | 4,251 | 347 | 5,831 | 394 | ||||||||||||||||||
Other consumer loans | - | - | - | - | - | - | ||||||||||||||||||
Total | $ | 4,295 | $ | 236 | $ | 18,652 | $ | 890 | $ | 22,947 | $ | 1,126 | ||||||||||||
With an allowance recorded | ||||||||||||||||||||||||
Commercial real estate - owner occupied | $ | - | $ | - | $ | 422 | $ | 17 | $ | 422 | $ | 17 | ||||||||||||
Commercial real estate - non-owner occupied (1) | - | - | 817 | - | 817 | - | ||||||||||||||||||
Construction and land development | - | - | 93 | - | 93 | - | ||||||||||||||||||
Commercial loans | - | - | 1,493 | - | 1,493 | - | ||||||||||||||||||
Residential 1-4 family (2) | - | - | 415 | 127 | 415 | 127 | ||||||||||||||||||
Other consumer loans | - | - | - | - | - | - | ||||||||||||||||||
Total | $ | - | $ | - | $ | 3,240 | $ | 144 | $ | 3,240 | $ | 144 | ||||||||||||
Grand total | $ | 4,295 | $ | 236 | $ | 21,892 | $ | 1,034 | $ | 26,187 | $ | 1,270 |
| | | Covered Loans | | | Non-covered Loans | | | Total Loans | | |||||||||||||||||||||||||||
Year ended 12/31/14 | | | Average Recorded Investment | | | Interest Income Recognized | | | Average Recorded Investment | | | Interest Income Recognized | | | Average Recorded Investment | | | Interest Income Recognized | | ||||||||||||||||||
With no related allowance recorded | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate – owner occupied | | | | $ | 599 | | | | | $ | — | | | | | $ | 9,508 | | | | | $ | 511 | | | | | $ | 10,107 | | | | | $ | 511 | | |
Commercial real estate – non-owner occupied(1) | | | | | 1,611 | | | | | | — | | | | | | 581 | | | | | | — | | | | | | 2,192 | | | | | | — | | |
Construction and land development | | | | | — | | | | | | — | | | | | | 421 | | | | | | — | | | | | | 421 | | | | | | — | | |
Commercial loans | | | | | — | | | | | | — | | | | | | 6,154 | | | | | | 223 | | | | | | 6,154 | | | | | | 223 | | |
Residential 1 – 4 family(2) | | | | | 1,317 | | | | | | 40 | | | | | | 3,984 | | | | | | — | | | | | | 5,301 | | | | | | 40 | | |
Other consumer loans | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Total | | | | $ | 3,527 | | | | | $ | 40 | | | | | $ | 20,648 | | | | | $ | 734 | | | | | $ | 24,175 | | | | | $ | 774 | | |
With an allowance recorded | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate – owner occupied | | | | $ | — | | | | | $ | — | | | | | $ | 382 | | | | | $ | 14 | | | | | $ | 382 | | | | | $ | 14 | | |
Commercial real estate – non-owner occupied(1) | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Construction and land development | | | | | — | | | | | | — | | | | | | 93 | | | | | | — | | | | | | 93 | | | | | | — | | |
Commercial loans | | | | | — | | | | | | — | | | | | | 955 | | | | | | — | | | | | | 955 | | | | | | — | | |
Residential 1 – 4 family(2) | | | | | — | | | | | | — | | | | | | 415 | | | | | | — | | | | | | 415 | | | | | | — | | |
Other consumer loans | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Total | | | | $ | — | | | | | $ | — | | | | | $ | 1,845 | | | | | $ | 14 | | | | | $ | 1,845 | | | | | $ | 14 | | |
Grand total | | | | $ | 3,527 | | | | | $ | 40 | | | | | $ | 22,493 | | | | | $ | 748 | | | | | $ | 26,020 | | | | | $ | 788 | | |
|
December 31, 2015 | 30 - 59 | 60 - 89 | ||||||||||||||||||||||||||
Days | Days | 90 Days | Total | Nonaccrual | Loans Not | Total | ||||||||||||||||||||||
Past Due | Past Due | or More | Past Due | Loans | Past Due | Loans | ||||||||||||||||||||||
Covered loans: | ||||||||||||||||||||||||||||
Commercial real estate - owner occupied | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||
Commercial real estate - non-owner occupied (1) | - | - | - | - | - | - | - | |||||||||||||||||||||
Construction and land development | - | - | - | - | - | - | - | |||||||||||||||||||||
Commercial loans | - | - | - | - | - | - | - | |||||||||||||||||||||
Residential 1-4 family (2) | 119 | 43 | - | 162 | 698 | 33,513 | 34,373 | |||||||||||||||||||||
Other consumer loans | - | - | - | - | - | - | - | |||||||||||||||||||||
Total | $ | 119 | $ | 43 | $ | - | $ | 162 | $ | 698 | $ | 33,513 | $ | 34,373 | ||||||||||||||
Non-covered loans: | ||||||||||||||||||||||||||||
Commercial real estate - owner occupied | $ | 561 | $ | - | $ | - | $ | 561 | $ | 2,071 | $ | 138,889 | $ | 141,521 | ||||||||||||||
Commercial real estate - non-owner occupied (1) | - | - | - | - | - | 282,592 | 282,592 | |||||||||||||||||||||
Construction and land development | - | - | - | - | - | 67,832 | 67,832 | |||||||||||||||||||||
Commercial loans | 267 | - | - | 267 | 2,102 | 122,616 | 124,985 | |||||||||||||||||||||
Residential 1-4 family (2) | 85 | - | - | 85 | - | 178,790 | 178,875 | |||||||||||||||||||||
Other consumer loans | 1 | - | - | 1 | - | 1,365 | 1,366 | |||||||||||||||||||||
Total | $ | 914 | $ | - | $ | - | $ | 914 | $ | 4,173 | $ | 792,084 | $ | 797,171 | ||||||||||||||
Total loans: | ||||||||||||||||||||||||||||
Commercial real estate - owner occupied | $ | 561 | $ | - | $ | - | $ | 561 | $ | 2,071 | $ | 138,889 | $ | 141,521 | ||||||||||||||
Commercial real estate - non-owner occupied (1) | - | - | - | - | - | 282,592 | 282,592 | |||||||||||||||||||||
Construction and land development | - | - | - | - | - | 67,832 | 67,832 | |||||||||||||||||||||
Commercial loans | 267 | - | - | 267 | 2,102 | 122,616 | 124,985 | |||||||||||||||||||||
Residential 1-4 family (2) | 204 | 43 | - | 247 | 698 | 212,303 | 213,248 | |||||||||||||||||||||
Other consumer loans | 1 | - | - | 1 | - | 1,365 | 1,366 | |||||||||||||||||||||
Total | $ | 1,033 | $ | 43 | $ | - | $ | 1,076 | $ | 4,871 | $ | 825,597 | $ | 831,544 |
December 31, 2014 | 30 - 59 | 60 - 89 | ||||||||||||||||||||||||||
Days | Days | 90 Days | Total | Nonaccrual | Loans Not | Total | ||||||||||||||||||||||
Past Due | Past Due | or More | Past Due | Loans | Past Due | Loans | ||||||||||||||||||||||
Covered loans: | ||||||||||||||||||||||||||||
Commercial real estate - owner occupied | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||
Commercial real estate - non-owner occupied (1) | - | - | - | - | - | - | - | |||||||||||||||||||||
Construction and land development | - | - | - | - | - | - | - | |||||||||||||||||||||
Commercial loans | - | - | - | - | - | - | - | |||||||||||||||||||||
Residential 1-4 family (2) | 10 | 148 | - | 158 | 859 | 37,478 | 38,495 | |||||||||||||||||||||
Other consumer loans | - | - | - | - | - | - | - | |||||||||||||||||||||
Total | $ | 10 | $ | 148 | $ | - | $ | 158 | $ | 859 | $ | 37,478 | $ | 38,495 | ||||||||||||||
Non-covered loans: | ||||||||||||||||||||||||||||
Commercial real estate - owner occupied | $ | - | $ | - | $ | - | $ | 1,524 | $ | 135,073 | $ | 136,597 | ||||||||||||||||
Commercial real estate - non-owner occupied (1) | 4,128 | - | - | 4,128 | - | 218,833 | 222,961 | |||||||||||||||||||||
Construction and land development | - | - | - | - | 467 | 57,471 | 57,938 | |||||||||||||||||||||
Commercial loans | - | - | - | - | 3,140 | 111,574 | 114,714 | |||||||||||||||||||||
Residential 1-4 family (2) | 319 | 586 | - | 905 | 521 | 131,558 | 132,984 | |||||||||||||||||||||
Other consumer loans | 6 | - | - | 6 | - | 1,558 | 1,564 | |||||||||||||||||||||
Total | $ | 4,453 | $ | 586 | $ | - | $ | 5,039 | $ | 5,652 | $ | 656,067 | $ | 666,758 | ||||||||||||||
Total loans: | ||||||||||||||||||||||||||||
Commercial real estate - owner occupied | $ | - | $ | - | $ | - | $ | - | $ | 1,524 | $ | 135,073 | $ | 136,597 | ||||||||||||||
Commercial real estate - non-owner occupied (1) | 4,128 | - | - | 4,128 | - | 218,833 | 222,961 | |||||||||||||||||||||
Construction and land development | - | - | - | - | 467 | 57,471 | 57,938 | |||||||||||||||||||||
Commercial loans | - | - | - | - | 3,140 | 111,574 | 114,714 | |||||||||||||||||||||
Residential 1-4 family (2) | 329 | 734 | - | 1,063 | 1,380 | 169,036 | 171,479 | |||||||||||||||||||||
Other consumer loans | 6 | - | - | 6 | - | 1,558 | 1,564 | |||||||||||||||||||||
Total | $ | 4,463 | $ | 734 | $ | - | $ | 5,197 | $ | 6,511 | $ | 693,545 | $ | 705,253 |
December 31, 2016 | | | 30 – 59 Days Past Due | | | 60 – 89 Days Past Due | | | 90 Days or More | | | Total Past Due | | | Nonaccrual Loans | | | Loans Not Past Due | | | Total Loans | | |||||||||||||||||||||
Covered loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate – owner occupied | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Commercial real estate – non-owner occupied(1) | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Construction and land development | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Commercial loans | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Residential 1 – 4 family(2) | | | | | 221 | | | | | | 95 | | | | | | — | | | | | | 316 | | | | | | 850 | | | | | | 27,014 | | | | | | 28,180 | | |
Other consumer loans | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Total | | | | $ | 221 | | | | | $ | 95 | | | | | $ | — | | | | | $ | 316 | | | | | $ | 850 | | | | | $ | 27,014 | | | | | $ | 28,180 | | |
Non-covered loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate – owner occupied | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 637 | | | | | $ | 154,170 | | | | | $ | 154,807 | | |
Commercial real estate – non-owner occupied(1) | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 310,196 | | | | | | 310,196 | | |
Construction and land development | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 91,067 | | | | | | 91,067 | | |
Commercial loans | | | | | 1,349 | | | | | | — | | | | | | — | | | | | | 1,349 | | | | | | 3,158 | | | | | | 110,858 | | | | | | 115,365 | | |
Residential 1 – 4 family(2) | | | | | 1,011 | | | | | | — | | | | | | — | | | | | | 1,011 | | | | | | — | | | | | | 230,822 | | | | | | 231,833 | | |
Other consumer loans | | | | | | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 856 | | | | | | 856 | | |
Total | | | | $ | 2,360 | | | | | $ | — | | | | | $ | — | | | | | $ | 2,360 | | | | | $ | 3,795 | | | | | $ | 897,969 | | | | | $ | 904,124 | | |
Total loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate – owner occupied | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 637 | | | | | $ | 154,170 | | | | | $ | 154,807 | | |
Commercial real estate – non-owner occupied(1) | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 310,196 | | | | | | 310,196 | | |
Construction and land development | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 91,067 | | | | | | 91,067 | | |
Commercial loans | | | | | 1,349 | | | | | | — | | | | | | — | | | | | | 1,349 | | | | | | 3,158 | | | | | | 110,858 | | | | | | 115,365 | | |
Residential 1 – 4 family(2) | | | | | 1,232 | | | | | | 95 | | | | | | — | | | | | | 1,327 | | | | | | 850 | | | | | | 257,836 | | | | | | 260,013 | | |
Other consumer loans | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 856 | | | | | | 856 | | |
Total | | | | $ | 2,581 | | | | | $ | 95 | | | | | $ | — | | | | | $ | 2,676 | | | | | $ | 4,645 | | | | | $ | 924,983 | | | | | $ | 932,304 | | |
|
December 31, 2015 | | | 30 – 59 Days Past Due | | | 60 – 89 Days Past Due | | | 90 Days or More | | | Total Past Due | | | Nonaccrual Loans | | | Loans Not Past Due | | | Total Loans | | |||||||||||||||||||||
Covered loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate – owner occupied | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Commercial real estate – non-owner occupied(1) | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Construction and land development | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Commercial loans | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Residential 1 – 4 family(2) | | | | | 119 | | | | | | 43 | | | | | | — | | | | | | 162 | | | | | | 698 | | | | | | 33,513 | | | | | | 34,373 | | |
Other consumer loans | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Total | | | | $ | 119 | | | | | $ | 43 | | | | | $ | — | | | | | $ | 162 | | | | | $ | 698 | | | | | $ | 33,513 | | | | | $ | 34,373 | | |
Non-covered loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate – owner occupied | | | | $ | 561 | | | | | $ | — | | | | | $ | — | | | | | $ | 561 | | | | | $ | 2,071 | | | | | $ | 138,889 | | | | | $ | 141,521 | | |
Commercial real estate – non-owner occupied(1) | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 282,592 | | | | | | 282,592 | | |
Construction and land development | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 67,832 | | | | | | 67,832 | | |
Commercial loans | | | | | 267 | | | | | | — | | | | | | — | | | | | | 267 | | | | | | 2,102 | | | | | | 122,616 | | | | | | 124,985 | | |
Residential 1 – 4 family(2) | | | | | 85 | | | | | | — | | | | | | — | | | | | | 85 | | | | | | — | | | | | | 178,790 | | | | | | 178,875 | | |
Other consumer loans | | | | | 1 | | | | | | — | | | | | | — | | | | | | 1 | | | | | | — | | | | | | 1,365 | | | | | | 1,366 | | |
Total | | | | $ | 914 | | | | | $ | — | | | | | $ | — | | | | | $ | 914 | | | | | $ | 4,173 | | | | | $ | 792,084 | | | | | $ | 797,171 | | |
Total loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate – owner occupied | | | | $ | 561 | | | | | $ | — | | | | | $ | — | | | | | $ | 561 | | | | | $ | 2,071 | | | | | $ | 138,889 | | | | | $ | 141,521 | | |
Commercial real estate – non-owner occupied(1) | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 282,592 | | | | | | 282,592 | | |
Construction and land development | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 67,832 | | | | | | 67,832 | | |
Commercial loans | | | | | 267 | | | | | | — | | | | | | — | | | | | | 267 | | | | | | 2,102 | | | | | | 122,616 | | | | | | 124,985 | | |
Residential 1 – 4 family(2) | | | | | 204 | | | | | | 43 | | | | | | — | �� | | | | | 247 | | | | | | 698 | | | | | | 212,303 | | | | | | 213,248 | | |
Other consumer loans | | | | | 1 | | | | | | — | | | | | | — | | | | | | 1 | | | | | | — | | | | | | 1,365 | | | | | | 1,366 | | |
Total | | | | $ | 1,033 | | | | | $ | 43 | | | | | $ | — | | | | | $ | 1,076 | | | | | $ | 4,871 | | | | | $ | 825,597 | | | | | $ | 831,544 | | |
|
Commercial | Commercial | |||||||||||||||||||||||||||||||
Real Estate | Real Estate | Construction | Other | |||||||||||||||||||||||||||||
Non-covered loans: | Owner | Non-owner | and Land | Commercial | 1-4 Family | Consumer | ||||||||||||||||||||||||||
Year ended December 31, 2015 | Occupied | Occupied (1) | Development | Loans | Residential (2) | Loans | Unallocated | Total | ||||||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||||||||||||||
Beginning balance | $ | 855 | $ | 1,123 | $ | 1,644 | $ | 2,063 | $ | 1,322 | $ | 49 | $ | 337 | $ | 7,393 | ||||||||||||||||
Charge offs | (1,067 | ) | - | - | (1,174 | ) | (413 | ) | (19 | ) | - | (2,673 | ) | |||||||||||||||||||
Recoveries | 18 | 18 | 139 | 91 | 259 | 1 | - | 526 | ||||||||||||||||||||||||
Provision | 1,379 | 81 | (918 | ) | 2,061 | 240 | 17 | 315 | 3,175 | |||||||||||||||||||||||
Ending balance | $ | 1,185 | $ | 1,222 | $ | 865 | $ | 3,041 | $ | 1,408 | $ | 48 | $ | 652 | $ | 8,421 | ||||||||||||||||
Year ended December 31, 2014 | ||||||||||||||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||||||||||||||
Beginning balance | $ | 814 | $ | 985 | $ | 1,068 | $ | 2,797 | $ | 1,302 | $ | 54 | $ | 19 | $ | 7,039 | ||||||||||||||||
Charge offs | (573 | ) | - | (250 | ) | (1,998 | ) | (449 | ) | - | - | (3,270 | ) | |||||||||||||||||||
Recoveries | 10 | 23 | 4 | 125 | 7 | 5 | - | 174 | ||||||||||||||||||||||||
Provision | 604 | 115 | 822 | 1,139 | 462 | (10 | ) | 318 | 3,450 | |||||||||||||||||||||||
Ending balance | $ | 855 | $ | 1,123 | $ | 1,644 | $ | 2,063 | $ | 1,322 | $ | 49 | $ | 337 | $ | 7,393 | ||||||||||||||||
Year ended December 31, 2013 | ||||||||||||||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||||||||||||||
Beginning balance | $ | 932 | $ | 1,474 | $ | 970 | $ | 2,110 | $ | 1,163 | $ | 33 | $ | 285 | $ | 6,967 | ||||||||||||||||
Charge offs | - | (199 | ) | (650 | ) | (2,286 | ) | (776 | ) | (144 | ) | - | (4,055 | ) | ||||||||||||||||||
Recoveries | 13 | 146 | 7 | 204 | 129 | 4 | - | 503 | ||||||||||||||||||||||||
Provision | (131 | ) | (436 | ) | 741 | 2,769 | 786 | 161 | (266 | ) | 3,624 | |||||||||||||||||||||
Ending balance | $ | 814 | $ | 985 | $ | 1,068 | $ | 2,797 | $ | 1,302 | $ | 54 | $ | 19 | $ | 7,039 |
Non-covered loans: | | | Commercial Real Estate Owner Occupied | | | Commercial Real Estate Non-owner Occupied(1) | | | Construction and Land Development | | | Commercial Loans | | | 1 – 4 Family Residential(2) | | | Other Consumer Loans | | | Unallocated | | | Total | | ||||||||||||||||||||||||
Year ended December 31, 2016 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Allowance for loan losses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Beginning balance | | | | $ | 1,185 | | | | | $ | 1,222 | | | | | $ | 865 | | | | | $ | 3,041 | | | | | $ | 1,408 | | | | | $ | 48 | | | | | $ | 652 | | | | | $ | 8,421 | | |
Charge offs | | | | | (799) | | | | | | — | | | | | | (449) | | | | | | (3,370) | | | | | | (22) | | | | | | (322) | | | | | | — | | | | | | (4,962) | | |
Recoveries | | | | | 8 | | | | | | — | | | | | | 121 | | | | | | 96 | | | | | | 10 | | | | | | 4 | | | | | | — | | | | | | 239 | | |
Provision | | | | | 511 | | | | | | 262 | | | | | | 215 | | | | | | 3,599 | | | | | | (117) | | | | | | 348 | | | | | | 94 | | | | | | 4,912 | | |
Ending balance | | | | $ | 905 | | | | | $ | 1,484 | | | | | $ | 752 | | | | | $ | 3,366 | | | | | $ | 1,279 | | | | | $ | 78 | | | | | $ | 746 | | | | | $ | 8,610 | | |
Year ended December 31, 2015 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Allowance for loan losses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Beginning balance | | | | $ | 855 | | | | | $ | 1,123 | | | | | $ | 1,644 | | | | | $ | 2,063 | | | | | $ | 1,322 | | | | | $ | 49 | | | | | $ | 337 | | | | | $ | 7,393 | | |
Charge offs | | | | | (1,067) | | | | | | — | | | | | | — | | | | | | (1,174) | | | | | | (413) | | | | | | (19) | | | | | | — | | | | | | (2,673) | | |
Recoveries | | | | | 18 | | | | | | 18 | | | | | | 139 | | | | | | 91 | | | | | | 259 | | | | | | 1 | | | | | | — | | | | | | 526 | | |
Provision | | | | | 1,379 | | | | | | 81 | | | | | | (918) | | | | | | 2,061 | | | | | | 240 | | | | | | 17 | | | | | | 315 | | | | | | 3,175 | | |
Ending balance | | | | $ | 1,185 | | | | | $ | 1,222 | | | | | $ | 865 | | | | | $ | 3,041 | | | | | $ | 1,408 | | | | | $ | 48 | | | | | $ | 652 | | | | | $ | 8,421 | | |
Year ended December 31, 2014 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Allowance for loan losses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Beginning balance | | | | $ | 814 | | | | | $ | 985 | | | | | $ | 1,068 | | | | | $ | 2,797 | | | | | $ | 1,302 | | | | | $ | 54 | | | | | $ | 19 | | | | | $ | 7,039 | | |
Charge offs | | | | | (573) | | | | | | — | | | | | | (250) | | | | | | (1,998) | | | | | | (449) | | | | | | — | | | | | | — | | | | | | (3,270) | | |
Recoveries | | | | | 10 | | | | | | 23 | | | | | | 4 | | | | | | 125 | | | | | | 7 | | | | | | 5 | | | | | | — | | | | | | 174 | | |
Provision | | | | | 604 | | | | | | 115 | | | | | | 822 | | | | | | 1,139 | | | | | | 462 | | | | | | (10) | | | | | | 318 | | | | | | 3,450 | | |
Ending balance | | | | $ | 855 | | | | | $ | 1,123 | | | | | $ | 1,644 | | | | | $ | 2,063 | | | | | $ | 1,322 | | | | | $ | 49 | | | | | $ | 337 | | | | | $ | 7,393 | | |
|
Commercial | Commercial | |||||||||||||||||||||||||||||||
Real Estate | Real Estate | Construction | Other | |||||||||||||||||||||||||||||
Covered loans: | Owner | Non-owner | and Land | Commercial | 1-4 Family | Consumer | ||||||||||||||||||||||||||
Year ended December 31, 2015 | Occupied | Occupied (1) | Development | Loans | Residential (3) | Loans | Unallocated | Total | ||||||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||||||||||||||
Beginning balance | $ | - | $ | - | $ | - | $ | - | $ | 17 | $ | 4 | $ | - | $ | 21 | ||||||||||||||||
Charge offs | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||
Recoveries | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||
Adjustments (2) | - | - | - | - | (17 | ) | - | - | (17 | ) | ||||||||||||||||||||||
Provision | - | - | - | - | - | (4 | ) | - | (4 | ) | ||||||||||||||||||||||
Ending balance | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||
Year ended December 31, 2014 | ||||||||||||||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||||||||||||||
Beginning balance | $ | - | $ | 45 | $ | - | $ | - | $ | - | $ | 6 | $ | - | $ | 51 | ||||||||||||||||
Charge offs | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||
Recoveries | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||
Adjustments (2) | - | (36 | ) | - | - | 14 | (2 | ) | - | (24 | ) | |||||||||||||||||||||
Provision | - | (9 | ) | - | - | 3 | - | - | (6 | ) | ||||||||||||||||||||||
Ending balance | $ | - | $ | - | $ | - | $ | - | $ | 17 | $ | 4 | $ | - | $ | 21 | ||||||||||||||||
Year ended December 31, 2013 | ||||||||||||||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||||||||||||||
Beginning balance | $ | - | $ | 45 | $ | - | $ | 43 | $ | - | $ | 11 | $ | - | $ | 99 | ||||||||||||||||
Charge offs | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||
Recoveries | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||
Adjustments (2) | - | - | - | (35 | ) | - | (4 | ) | - | (39 | ) | |||||||||||||||||||||
Provision | - | - | - | (8 | ) | - | (1 | ) | - | (9 | ) | |||||||||||||||||||||
Ending balance | $ | - | $ | 45 | $ | - | $ | - | $ | - | $ | 6 | $ | - | $ | 51 |
Covered loans: | | | Commercial Real Estate Owner Occupied | | | Commercial Real Estate Non-owner Occupied(1) | | | Construction and Land Development | | | Commercial Loans | | | 1 – 4 Family Residential(3) | | | Other Consumer Loans | | | Unallocated | | | Total | | ||||||||||||||||||||||||
Year ended December 31, 2016 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Allowance for loan losses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Beginning balance | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Charge offs | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Recoveries | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Adjustments(2) | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Provision | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Ending balance | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Year ended December 31, 2015 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Allowance for loan losses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Beginning balance | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 17 | | | | | $ | 4 | | | | | $ | — | | | | | $ | 21 | | |
Charge offs | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Recoveries | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Adjustments(2) | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (17) | | | | | | — | | | | | | — | | | | | | (17) | | |
Provision | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (4) | | | | | | — | | | | | | (4) | | |
Ending balance | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Year ended December 31, 2014 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Allowance for loan losses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Beginning balance | | | | $ | — | | | | | $ | 45 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 6 | | | | | $ | — | | | | | $ | 51 | | |
Charge offs | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Recoveries | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Adjustments(2) | | | | | — | | | | | | (36) | | | | | | — | | | | | | — | | | | | | 14 | | | | | | (2) | | | | | | — | | | | | | (24) | | |
Provision | | | | | — | | | | | | (9) | | | | | | — | | | | | | — | | | | | | 3 | | | | | | — | | | | | | — | | | | | | (6) | | |
Ending balance | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 17 | | | | | $ | 4 | | | | | $ | — | | | | | $ | 21 | | |
|
Commercial | Commercial | |||||||||||||||||||||||||||||||
Real Estate | Real Estate | Construction | Other | |||||||||||||||||||||||||||||
Owner | Non-owner | and Land | Commercial | 1-4 Family | Consumer | |||||||||||||||||||||||||||
Non-covered loans: | Occupied | Occupied (1) | Development | Loans | Residential (2) | Loans | Unallocated | Total | ||||||||||||||||||||||||
December 31, 2015 | ||||||||||||||||||||||||||||||||
Ending allowance balance attributable to loans: | ||||||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 439 | $ | - | $ | - | $ | 400 | $ | - | $ | - | $ | - | $ | 839 | ||||||||||||||||
Collectively evaluated for impairment | 746 | 1,222 | 865 | 2,641 | 1,408 | 48 | 652 | 7,582 | ||||||||||||||||||||||||
Total ending allowance | $ | 1,185 | $ | 1,222 | $ | 865 | $ | 3,041 | $ | 1,408 | $ | 48 | $ | 652 | $ | 8,421 | ||||||||||||||||
Loans: | ||||||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 7,862 | $ | 136 | $ | - | $ | 5,484 | $ | - | $ | - | $ | - | $ | 13,482 | ||||||||||||||||
Collectively evaluated for impairment | 133,659 | 282,456 | 67,832 | 119,501 | 178,875 | 1,366 | - | 783,689 | ||||||||||||||||||||||||
Total ending loan balances | $ | 141,521 | $ | 282,592 | $ | 67,832 | $ | 124,985 | $ | 178,875 | $ | 1,366 | $ | - | $ | 797,171 | ||||||||||||||||
December 31, 2014 | ||||||||||||||||||||||||||||||||
Ending allowance balance attributable to loans: | ||||||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 151 | $ | - | $ | 120 | $ | 134 | $ | 300 | $ | - | $ | - | $ | 705 | ||||||||||||||||
Collectively evaluated for impairment | 704 | 1,123 | 1,524 | 1,929 | 1,022 | 49 | 337 | 6,688 | ||||||||||||||||||||||||
Total ending allowance | $ | 855 | $ | 1,123 | $ | 1,644 | $ | 2,063 | $ | 1,322 | $ | 49 | $ | 337 | $ | 7,393 | ||||||||||||||||
Loans: | ||||||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 12,003 | $ | 1,859 | $ | 467 | $ | 8,139 | $ | 1,344 | $ | - | $ | - | $ | 23,812 | ||||||||||||||||
Collectively evaluated for impairment | 124,594 | 221,102 | 57,471 | 106,575 | 131,640 | 1,564 | - | 642,946 | ||||||||||||||||||||||||
Total ending loan balances | $ | 136,597 | $ | 222,961 | $ | 57,938 | $ | 114,714 | $ | 132,984 | $ | 1,564 | $ | - | $ | 666,758 |
Non-covered loans: | | | Commercial Real Estate Owner Occupied | | | Commercial Real Estate Non-owner Occupied(1) | | | Construction and Land Development | | | Commercial Loans | | | 1 – 4 Family Residential(2) | | | Other Consumer Loans | | | Unallocated | | | Total | | ||||||||||||||||||||||||
December 31, 2016 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ending allowance balance attributable to loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment | | | | $ | 150 | | | | | $ | — | | | | | $ | — | | | | | $ | 750 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 900 | | |
Collectively evaluated for impairment | | | | | 755 | | | | | | 1,484 | | | | | | 752 | | | | | | 2,616 | | | | | | 1,279 | | | | | | 78 | | | | | | 746 | | | | | | 7,710 | | |
Total ending allowance | | | | $ | 905 | | | | | $ | 1,484 | | | | | $ | 752 | | | | | $ | 3,366 | | | | | $ | 1,279 | | | | | $ | 78 | | | | | $ | 746 | | | | | $ | 8,610 | | |
Loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment | | | | $ | 6,271 | | | | | $ | — | | | | | $ | — | | | | | $ | 6,380 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 12,651 | | |
Collectively evaluated for impairment | | | | | 148,536 | | | | | | 310,196 | | | | | | 91,067 | | | | | | 108,985 | | | | | | 231,833 | | | | | | 856 | | | | | | — | | | | | | 891,473 | | |
Total ending loan balances | | | | $ | 154,807 | | | | | $ | 310,196 | | | | | $ | 91,067 | | | | | $ | 115,365 | | | | | $ | 231,833 | | | | | $ | 856 | | | | | $ | — | | | | | $ | 904,124 | | |
December 31, 2015 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ending allowance balance attributable to loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment | | | | $ | 439 | | | | | $ | — | | | | | $ | — | | | | | $ | 400 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 839 | | |
Collectively evaluated for impairment | | | | | 746 | | | | | | 1,222 | | | | | | 865 | | | | | | 2,641 | | | | | | 1,408 | | | | | | 48 | | | | | | 652 | | | | | | 7,582 | | |
Total ending allowance | | | | $ | 1,185 | | | | | $ | 1,222 | | | | | $ | 865 | | | | | $ | 3,041 | | | | | $ | 1,408 | | | | | $ | 48 | | | | | $ | 652 | | | | | $ | 8,421 | | |
Loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment | | | | $ | 7,862 | | | | | $ | 136 | | | | | $ | — | | | | | $ | 5,484 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 13,482 | | |
Collectively evaluated for impairment | | | | | 133,659 | | | | | | 282,456 | | | | | | 67,832 | | | | | | 119,501 | | | | | | 178,875 | | | | | | 1,366 | | | | | | — | | | | | | 783,689 | | |
Total ending loan balances | | | | $ | 141,521 | | | | | $ | 282,592 | | | | | $ | 67,832 | | | | | $ | 124,985 | | | | | $ | 178,875 | | | | | $ | 1,366 | | | | | $ | — | | | | | $ | 797,171 | | |
|
Commercial | Commercial | |||||||||||||||||||||||||||||||
Real Estate | Real Estate | Construction | Other | |||||||||||||||||||||||||||||
Owner | Non-owner | and Land | Commercial | 1-4 Family | Consumer | |||||||||||||||||||||||||||
Covered loans: | Occupied | Occupied (1) | Development | Loans | Residential (2) | Loans | Unallocated | Total | ||||||||||||||||||||||||
December 31, 2015 | ||||||||||||||||||||||||||||||||
Ending allowance balance attributable to loans: | ||||||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||
Collectively evaluated for impairment | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||
Total ending allowance | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||
Loans: | ||||||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | - | $ | - | $ | - | $ | 1,066 | $ | - | $ | 1,066 | ||||||||||||||||||||
Collectively evaluated for impairment | - | - | - | - | 33,307 | - | - | 33,307 | ||||||||||||||||||||||||
Total ending loan balances | $ | - | $ | - | $ | - | $ | - | $ | 34,373 | $ | - | $ | - | $ | 34,373 | ||||||||||||||||
December 31, 2014 | ||||||||||||||||||||||||||||||||
Ending allowance balance attributable to loans: | ||||||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||
Collectively evaluated for impairment | - | - | - | - | 17 | 4 | - | 21 | ||||||||||||||||||||||||
Total ending allowance | $ | - | $ | - | $ | - | $ | - | $ | 17 | $ | 4 | $ | - | $ | 21 | ||||||||||||||||
Loans: | ||||||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | - | $ | - | $ | - | $ | - | $ | 1,740 | $ | - | $ | - | $ | 1,740 | ||||||||||||||||
Collectively evaluated for impairment | 36,755 | - | 36,755 | |||||||||||||||||||||||||||||
Total ending loan balances | $ | - | $ | - | $ | - | $ | - | $ | 38,495 | $ | - | $ | - | $ | 38,495 |
Covered loans: | | | Commercial Real Estate Owner Occupied | | | Commercial Real Estate Non-owner Occupied(1) | | | Construction and Land Development | | | Commercial Loans | | | 1 – 4 Family Residential(2) | | | Other Consumer Loans | | | Unallocated | | | Total | | ||||||||||||||||||||||||
December 31, 2016 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ending allowance balance attributable to loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Collectively evaluated for impairment | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Total ending allowance | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 963 | | | | | $ | — | | | | | $ | — | | | | | $ | 963 | | |
Collectively evaluated for impairment | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 27,217 | | | | | | — | | | | | | — | | | | | | 27,217 | | |
Total ending loan balances | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 28,180 | | | | | $ | — | | | | | $ | — | | | | | $ | 28,180 | | |
December 31, 2015 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ending allowance balance attributable to loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Collectively evaluated for impairment | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Total ending allowance | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 1,066 | | | | | $ | — | | | | | $ | — | | | | | $ | 1,066 | | |
Collectively evaluated for impairment | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 33,307 | | | | | | — | | | | | | — | | | | | | 33,307 | | |
Total ending loan balances | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 34,373 | | | | | $ | — | | | | | $ | — | | | | | $ | 34,373 | | |
|
During the year ending December 31, 2014, there were no loans modified in troubled debt restructurings. No TDRs defaulted during the year ending December 31, 2014, which had been modified in the previous 12 months.
Doubtful loans have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.
December 31, 2015 | Covered Loans | Non-covered Loans | Total Loans | |||||||||||||||||||||||||||||||||||||
Classified/ | Special | Classified/ | ||||||||||||||||||||||||||||||||||||||
Criticized (1) | Pass | Total | Mention | Substandard (3) | Pass | Total | Criticized | Pass | Total | |||||||||||||||||||||||||||||||
Commercial real estate - owner occupied | $ | - | $ | - | $ | - | $ | 3,666 | $ | 7,862 | $ | 129,993 | $ | 141,521 | $ | 11,528 | $ | 129,993 | $ | 141,521 | ||||||||||||||||||||
Commercial real estate - non-owner occupied (2) | - | - | - | - | 136 | 282,456 | 282,592 | 136 | 282,456 | 282,592 | ||||||||||||||||||||||||||||||
Construction and land development | - | - | - | 552 | - | 67,280 | 67,832 | 552 | 67,280 | 67,832 | ||||||||||||||||||||||||||||||
Commercial loans | - | - | - | 4,014 | 5,484 | 115,487 | 124,985 | 9,498 | 115,487 | 124,985 | ||||||||||||||||||||||||||||||
Residential 1-4 family (4) | 1,066 | 33,307 | 34,373 | - | - | 178,875 | 178,875 | 1,066 | 212,182 | 213,248 | ||||||||||||||||||||||||||||||
Other consumer loans | - | - | - | - | - | 1,366 | 1,366 | - | 1,366 | 1,366 | ||||||||||||||||||||||||||||||
Total | $ | 1,066 | $ | 33,307 | $ | 34,373 | $ | 8,232 | $ | 13,482 | $ | 775,457 | $ | 797,171 | $ | 22,780 | $ | 808,764 | $ | 831,544 |
December 31, 2014 | Covered Loans | Non-covered Loans | Total Loans | |||||||||||||||||||||||||||||||||||||
Classified/ | Special | Classified/ | ||||||||||||||||||||||||||||||||||||||
Criticized (1) | Pass | Total | Mention | Substandard (3) | Pass | Total | Criticized | Pass | Total | |||||||||||||||||||||||||||||||
Commercial real estate - owner occupied | $ | - | $ | - | $ | - | $ | 917 | $ | 12,003 | $ | 123,677 | $ | 136,597 | $ | 12,920 | $ | 123,677 | $ | 136,597 | ||||||||||||||||||||
Commercial real estate - non-owner occupied (2) | - | - | - | 234 | - | 222,727 | 222,961 | 234 | 222,727 | 222,961 | ||||||||||||||||||||||||||||||
Construction and land development | - | - | - | 593 | 467 | 56,878 | 57,938 | 1,060 | 56,878 | 57,938 | ||||||||||||||||||||||||||||||
Commercial loans | - | - | - | 30 | 8,139 | 106,545 | 114,714 | 8,169 | 106,545 | 114,714 | ||||||||||||||||||||||||||||||
Residential 1-4 family (4) | 1,740 | 36,755 | 38,495 | 584 | 1,344 | 131,056 | 132,984 | 3,668 | 167,811 | 171,479 | ||||||||||||||||||||||||||||||
Other consumer loans | - | - | - | - | - | 1,564 | 1,564 | - | 1,564 | 1,564 | ||||||||||||||||||||||||||||||
Total | $ | 1,740 | $ | 36,755 | $ | 38,495 | $ | 2,358 | $ | 21,953 | $ | 642,447 | $ | 666,758 | $ | 26,051 | $ | 679,202 | $ | 705,253 |
| | | Covered Loans | | | Non-covered Loans | | | Total Loans | | |||||||||||||||||||||||||||||||||||||||||||||||||||
December 31, 2016 | | | Classified/ Criticized(1) | | | Pass | | | Total | | | Special Mention | | | Substandard(3) | | | Pass | | | Total | | | Classified/ Criticized | | | Pass | | | Total | | ||||||||||||||||||||||||||||||
Commercial real estate – owner occupied | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 6,271 | | | | | $ | 148,536 | | | | | $ | 154,807 | | | | | $ | 6,271 | | | | | $ | 148,536 | | | | | $ | 154,807 | | |
Commercial real estate – non-owner occupied(2) | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 310,196 | | | | | | 310,196 | | | | | | — | | | | | | 310,196 | | | | | | 310,196 | | |
Construction and land development | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 91,067 | | | | | | 91,067 | | | | | | — | | | | | | 91,067 | | | | | | 91,067 | | |
Commercial loans | | | | | — | | | | | | — | | | | | | — | | | | | | 28 | | | | | | 6,380 | | | | | | 108,957 | | | | | | 115,365 | | | | | | 6,408 | | | | | | 108,957 | | | | | | 115,365 | | |
Residential 1– 4 family(4) | | | | | 963 | | | | | | 27,217 | | | | | | 28,180 | | | | | | — | | | | | | — | | | | | | 231,833 | | | | | | 231,833 | | | | | | 963 | | | | | | 259,050 | | | | | | 260,013 | | |
Other consumer loans | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 856 | | | | | | 856 | | | | | | — | | | | | | 856 | | | | | | 856 | | |
Total | | | | $ | 963 | | | | | $ | 27,217 | | | | | $ | 28,180 | | | | | $ | 28 | | | | | $ | 12,651 | | | | | $ | 891,445 | | | | | $ | 904,124 | | | | | $ | 13,642 | | | | | $ | 918,662 | | | | | $ | 932,304 | | |
|
| | | Covered Loans | | | Non-covered Loans | | | Total Loans | | |||||||||||||||||||||||||||||||||||||||||||||||||||
December 31, 2015 | | | Classified/ Criticized(1) | | | Pass | | | Total | | | Special Mention | | | Substandard(3) | | | Pass | | | Total | | | Classified/ Criticized | | | Pass | | | Total | | ||||||||||||||||||||||||||||||
Commercial real estate – owner occupied | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 3,666 | | | | | $ | 7,862 | | | | | $ | 129,993 | | | | | $ | 141,521 | | | | | $ | 11,528 | | | | | $ | 129,993 | | | | | $ | 141,521 | | |
Commercial real estate – non-owner occupied(2) | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 136 | | | | | | 282,456 | | | | | | 282,592 | | | | | | 136 | | | | | | 282,456 | | | | | | 282,592 | | |
Construction and land development | | | | | — | | | | | | — | | | | | | — | | | | | | 552 | | | | | | — | | | | | | 67,280 | | | | | | 67,832 | | | | | | 552 | | | | | | 67,280 | | | | | | 67,832 | | |
Commercial loans | | | | | — | | | | | | — | | | | | | — | | | | | | 4,014 | | | | | | 5,484 | | | | | | 115,487 | | | | | | 124,985 | | | | | | 9,498 | | | | | | 115,487 | | | | | | 124,985 | | |
Residential 1 – 4 family(4) | | | | | 1,066 | | | | | | 33,307 | | | | | | 34,373 | | | | | | — | | | | | | — | | | | | | 178,875 | | | | | | 178,875 | | | | | | 1,066 | | | | | | 212,182 | | | | | | 213,248 | | |
Other consumer loans | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | ��� | | | | | 1,366 | | | | | | 1,366 | | | | | | — | | | | | | 1,366 | | | | | | 1,366 | | |
Total | | | | $ | 1,066 | | | | | $ | 33,307 | | | | | $ | 34,373 | | | | | $ | 8,232 | | | | | $ | 13,482 | | | | | $ | 775,457 | | | | | $ | 797,171 | | | | | $ | 22,780 | | | | | $ | 808,764 | | | | | $ | 831,544 | | |
|
2016 and 2015, respectively.
December 31, 2015 | December 31, 2014 | |||||||||||||||||||||||
Purchased | Purchased | Purchased | Purchased | |||||||||||||||||||||
Impaired | Non-impaired | Impaired | Non-impaired | |||||||||||||||||||||
Loans | Loans | Total | Loans | Loans | Total | |||||||||||||||||||
Commercial real estate | $ | 1,247 | $ | 4,045 | $ | 5,292 | $ | 1,280 | $ | 5,290 | $ | 6,570 | ||||||||||||
Construction and land development | - | - | $ | - | - | - | - | |||||||||||||||||
Commercial loans | 197 | 314 | $ | 511 | 200 | 497 | 697 | |||||||||||||||||
Residential 1-4 family | - | 34,373 | $ | 34,373 | - | 38,495 | 38,495 | |||||||||||||||||
Other consumer loans | - | 26 | $ | 26 | - | 72 | 72 | |||||||||||||||||
Total | $ | 1,444 | $ | 38,758 | $ | 40,202 | $ | 1,480 | $ | 44,354 | $ | 45,834 |
| | | December 31, 2016 | | | December 31, 2015 | | ||||||||||||||||||||||||||||||
| | | Purchased Impaired Loans | | | Purchased Non-impaired Loans | | | Total | | | Purchased Impaired Loans | | | Purchased Non-impaired Loans | | | Total | | ||||||||||||||||||
Commercial real estate | | | | $ | 1,080 | | | | | $ | 3,630 | | | | | $ | 4,710 | | | | | $ | 1,247 | | | | | $ | 4,045 | | | | | $ | 5,292 | | |
Construction and land development | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Commercial loans | | | | | 193 | | | | | | 347 | | | | | | 540 | | | | | | 197 | | | | | | 314 | | | | | | 511 | | |
Residential 1 – 4 family | | | | | — | | | | | | 28,180 | | | | | | 28,180 | | | | | | — | | | | | | 34,373 | | | | | | 34,373 | | |
Other consumer loans | | | | | — | | | | | | 14 | | | | | | 14 | | | | | | — | | | | | | 26 | | | | | | 26 | | |
Total | | | | $ | 1,273 | | | | | $ | 32,171 | | | | | $ | 33,444 | | | | | $ | 1,444 | | | | | $ | 38,758 | | | | | $ | 40,202 | | |
|
December 31, 2015 | December 31, 2014 | |||||||||||||||||||||||||||||||
Purchased Impaired | Purchased Non-impaired | Purchased Impaired | Purchased Non-impaired | |||||||||||||||||||||||||||||
Carrying | Carrying | Carrying | Carrying | |||||||||||||||||||||||||||||
Accretable | Amount | Accretable | Amount | Accretable | Amount | Accretable | Amount | |||||||||||||||||||||||||
Yield | of Loans | Yield | of Loans | Yield | of Loans | Yield | of Loans | |||||||||||||||||||||||||
Balance at beginning of period | $ | - | $ | 1,480 | $ | 5,191 | $ | 44,354 | $ | - | $ | 1,522 | $ | 6,854 | $ | 50,174 | ||||||||||||||||
Additions | - | - | - | - | �� | - | - | - | - | |||||||||||||||||||||||
Accretion | - | - | (1,611 | ) | 1,611 | - | - | (1,928 | ) | 1,928 | ||||||||||||||||||||||
Reclassifications from nonaccretable balance | - | - | 1,061 | - | - | 296 | - | |||||||||||||||||||||||||
Adjustment-transfer to OREO | - | - | (44 | ) | (343 | ) | - | (31 | ) | (375 | ) | |||||||||||||||||||||
Payments received | - | (36 | ) | (6,864 | ) | - | (42 | ) | - | (7,373 | ) | |||||||||||||||||||||
Balance at end of period | $ | - | $ | 1,444 | $ | 4,597 | $ | 38,758 | $ | - | $ | 1,480 | $ | 5,191 | $ | 44,354 |
| | | December 31, 2016 | | | December 31, 2015 | | ||||||||||||||||||||||||||||||||||||||||||
| | | Purchased Impaired | | | Purchased Non-impaired | | | Purchased Impaired | | | Purchased Non-impaired | | ||||||||||||||||||||||||||||||||||||
| | | Accretable Yield | | | Carrying Amount of Loans | | | Accretable Yield | | | Carrying Amount of Loans | | | Accretable Yield | | | Carrying Amount of Loans | | | Accretable Yield | | | Carrying Amount of Loans | | ||||||||||||||||||||||||
Balance at beginning of period | | | | $ | — | | | | | $ | 1,444 | | | | | $ | 4,597 | | | | | $ | 38,758 | | | | | $ | — | | | | | $ | 1,480 | | | | | $ | 5,191 | | | | | $ | 44,354 | | |
Additions | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Accretion | | | | | — | | | | | | — | | | | | | (1,085) | | | | | | 1,085 | | | | | | — | | | | | | — | | | | | | (1,611) | | | | | | 1,611 | | |
Reclassifications from nonaccretable balance | | | | | — | | | | | | — | | | | | | 269 | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,061 | | | | | | — | | |
Adjustment-transfer to OREO | | | | | — | | | | | | — | | | | | | (20) | | | | | | (169) | | | | | | — | | | | | | — | | | | | | (44) | | | | | | (343) | | |
Payments received | | | | | — | | | | | | (171) | | | | | | — | | | | | | (7,503) | | | | | | — | | | | | | (36) | | | | | | | | | | | | (6,864) | | |
Balance at end of period | | | | $ | — | | | | | $ | 1,273 | | | | | $ | 3,761 | | | | | $ | 32,171 | | | | | $ | — | | | | | $ | 1,444 | | | | | $ | 4,597 | | | | | $ | 38,758 | | |
|
December 31, 2015 | December 31, 2014 | |||||||||||||||||||||||
Purchased | Purchased | Purchased | Purchased | |||||||||||||||||||||
Impaired | Non-impaired | Impaired | Non-impaired | |||||||||||||||||||||
Loans | Loans | Total | Loans | Loans | Total | |||||||||||||||||||
Commercial real estate | $ | 296 | $ | 12,637 | $ | 12,933 | $ | 323 | $ | 14,224 | $ | 14,547 | ||||||||||||
Construction and land development | 552 | 3,102 | 3,654 | 593 | 3,234 | 3,827 | ||||||||||||||||||
Commercial loans | - | 2,745 | 2,745 | - | 3,492 | 3,492 | ||||||||||||||||||
Residential 1-4 family | 840 | 9,392 | 10,232 | 855 | 11,277 | 12,132 | ||||||||||||||||||
Other consumer loans | - | 2 | 2 | - | 3 | 3 | ||||||||||||||||||
Total | $ | 1,688 | $ | 27,878 | $ | 29,566 | $ | 1,771 | $ | 32,230 | $ | 34,001 |
| | | December 31, 2016 | | | December 31, 2015 | | ||||||||||||||||||||||||||||||
| | | Purchased Impaired Loans | | | Purchased Non-impaired Loans | | | Total | | | Purchased Impaired Loans | | | Purchased Non-impaired Loans | | | Total | | ||||||||||||||||||
Commercial real estate | | | | $ | 258 | | | | | $ | 10,150 | | | | | $ | 10,408 | | | | | $ | 296 | | | | | $ | 12,637 | | | | | $ | 12,933 | | |
Construction and land development | | | | | 488 | | | | | | 2,996 | | | | | | 3,484 | | | | | | 552 | | | | | | 3,102 | | | | | | 3,654 | | |
Commercial loans | | | | | — | | | | | | 2,062 | | | | | | 2,062 | | | | | | — | | | | | | 2,745 | | | | | | 2,745 | | |
Residential 1 – 4 family | | | | | 818 | | | | | | 6,221 | | | | | | 7,039 | | | | | | 840 | | | | | | 9,392 | | | | | | 10,232 | | |
Other consumer loans | | | | | — | | | | | | 2 | | | | | | 2 | | | | | | — | | | | | | 2 | | | | | | 2 | | |
Total | | | | $ | 1,564 | | | | | $ | 21,431 | | | | | $ | 22,995 | | | | | $ | 1,688 | | | | | $ | 27,878 | | | | | $ | 29,566 | | |
|
December 31, 2015 | December 31, 2014 | |||||||||||||||||||||||||||||||
Purchased Impaired | Purchased Non-impaired | Purchased Impaired | Purchased Non-impaired | |||||||||||||||||||||||||||||
Carrying | Carrying | Carrying | Carrying | |||||||||||||||||||||||||||||
Accretable | Amount | Accretable | Amount | Accretable | Amount | Accretable | Amount | |||||||||||||||||||||||||
Yield | of Loans | Yield | of Loans | Yield | of Loans | Yield | of Loans | |||||||||||||||||||||||||
Balance at beginning of period | $ | - | $ | 1,771 | $ | 1,218 | $ | 32,230 | $ | - | $ | 1,857 | $ | 2,087 | $ | 37,012 | ||||||||||||||||
Additions | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||
Accretion | - | - | (360 | ) | 360 | - | - | (869 | ) | 869 | ||||||||||||||||||||||
Reclassifications from nonaccretable balance | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||
Payments received | - | (83 | ) | - | (4,712 | ) | - | (86 | ) | - | (5,651 | ) | ||||||||||||||||||||
Balance at end of period | $ | - | $ | 1,688 | $ | 858 | $ | 27,878 | $ | - | $ | 1,771 | $ | 1,218 | $ | 32,230 |
| | | December 31, 2016 | | | December 31, 2015 | | ||||||||||||||||||||||||||||||||||||||||||
| | | Purchased Impaired | | | Purchased Non-impaired | | | Purchased Impaired | | | Purchased Non-impaired | | ||||||||||||||||||||||||||||||||||||
| | | Accretable Yield | | | Carrying Amount of Loans | | | Accretable Yield | | | Carrying Amount of Loans | | | Accretable Yield | | | Carrying Amount of Loans | | | Accretable Yield | | | Carrying Amount of Loans | | ||||||||||||||||||||||||
Balance at beginning of period | | | | $ | — | | | | | $ | 1,688 | | | | | $ | 858 | | | | | $ | 27,878 | | | | | $ | — | | | | | $ | 1,771 | | | | | $ | 1,218 | | | | | $ | 32,230 | | |
Additions | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Accretion | | | | | — | | | | | | — | | | | | | (196) | | | | | | 139 | | | | | | — | | | | | | — | | | | | | (360) | | | | | | 360 | | |
Reclassifications from nonaccretable balance | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Payments received | | | | | — | | | | | | (124) | | | | | | — | | | | | | (6,586) | | | | | | — | | | | | | (83) | | | | | | — | | | | | | (4,712) | | |
Balance at end of period | | | | $ | — | | | | | $ | 1,564 | | | | | $ | 662 | | | | | $ | 21,431 | | | | | $ | — | | | | | $ | 1,688 | | | | | $ | 858 | | | | | $ | 27,878 | | |
|
December 31, 2015 | December 31, 2014 | |||||||||||||||||||||||
Purchased | Purchased | Purchased | Purchased | |||||||||||||||||||||
Impaired | Non-impaired | Impaired | Non-impaired | |||||||||||||||||||||
Loans | Loans | Total | Loans | Loans | Total | |||||||||||||||||||
Commercial real estate | $ | 339 | $ | 2,880 | $ | 3,219 | $ | 371 | $ | 3,306 | $ | 3,677 | ||||||||||||
Construction and land development | 364 | 892 | 1,256 | 649 | 1,168 | 1,817 | ||||||||||||||||||
Commercial loans | - | 174 | 174 | - | 204 | 204 | ||||||||||||||||||
Residential 1-4 family | - | 47,133 | 47,133 | - | 53,860 | 53,860 | ||||||||||||||||||
Other consumer loans | - | 184 | 184 | - | 225 | 225 | ||||||||||||||||||
Total | $ | 703 | $ | 51,263 | $ | 51,966 | $ | 1,020 | $ | 58,763 | $ | 59,783 |
| | | December 31, 2016 | | | December 31, 2015 | | ||||||||||||||||||||||||||||||
| | | Purchased Impaired Loans | | | Purchased Non-impaired Loans | | | Total | | | Purchased Impaired Loans | | | Purchased Non-impaired Loans | | | Total | | ||||||||||||||||||
Commercial real estate | | | | $ | 225 | | | | | $ | 2,638 | | | | | $ | 2,863 | | | | | $ | 339 | | | | | $ | 2,880 | | | | | $ | 3,219 | | |
Construction and land development | | | | | 355 | | | | | | 860 | | | | | | 1,215 | | | | | | 364 | | | | | | 892 | | | | | | 1,256 | | |
Commercial loans | | | | | — | | | | | | 116 | | | | | | 116 | | | | | | — | | | | | | 174 | | | | | | 174 | | |
Residential 1 – 4 family | | | | | — | | | | | | 38,018 | | | | | | 38,018 | | | | | | — | | | | | | 47,133 | | | | | | 47,133 | | |
Other consumer loans | | | | | — | | | | | | 142 | | | | | | 142 | | | | | | — | | | | | | 184 | | | | | | 184 | | |
Total | | | | $ | 580 | | | | | $ | 41,774 | | | | | $ | 42,354 | | | | | $ | 703 | | | | | $ | 51,263 | | | | | $ | 51,966 | | |
|
December 31, 2015 | December 31, 2014 | |||||||||||||||||||||||||||||||
Purchased Impaired | Purchased Non-impaired | Purchased Impaired | Purchased Non-impaired | |||||||||||||||||||||||||||||
Carrying | Carrying | Carrying | Carrying | |||||||||||||||||||||||||||||
Accretable | Amount | Accretable | Amount | Accretable | Amount | Accretable | Amount | |||||||||||||||||||||||||
Yield | of Loans | Yield | of Loans | Yield | of Loans | Yield | of Loans | |||||||||||||||||||||||||
Balance at beginning of period | $ | - | $ | 1,020 | $ | 2,908 | $ | 58,763 | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||
Additions | - | - | - | - | - | 642 | 3,121 | 61,190 | ||||||||||||||||||||||||
Accretion | - | (446 | ) | 446 | - | - | (213 | ) | 213 | |||||||||||||||||||||||
Reclassifications from nonaccretable balance | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||
Disbursements | - | - | - | - | - | 388 | - | - | ||||||||||||||||||||||||
Adjustment-transfer to OREO | - | - | - | - | - | - | - | (285 | ) | |||||||||||||||||||||||
Payments received | - | (317 | ) | - | (7,946 | ) | - | (10 | ) | - | (2,355 | ) | ||||||||||||||||||||
Balance at end of period | $ | - | $ | 703 | $ | 2,462 | $ | 51,263 | $ | - | $ | 1,020 | $ | 2,908 | $ | 58,763 |
| | | December 31, 2016 | | | December 31, 2015 | | ||||||||||||||||||||||||||||||||||||||||||
| | | Purchased Impaired | | | Purchased Non-impaired | | | Purchased Impaired | | | Purchased Non-impaired | | ||||||||||||||||||||||||||||||||||||
| | | Accretable Yield | | | Carrying Amount of Loans | | | Accretable Yield | | | Carrying Amount of Loans | | | Accretable Yield | | | Carrying Amount of Loans | | | Accretable Yield | | | Carrying Amount of Loans | | ||||||||||||||||||||||||
Balance at beginning of period | | | | $ | — | | | | | $ | 703 | | | | | $ | 2,462 | | | | | $ | 51,263 | | | | | $ | — | | | | | $ | 1,020 | | | | | $ | 2,908 | | | | | $ | 58,763 | | |
Additions | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Accretion | | | | | — | | | | | | — | | | | | | (366) | | | | | | 365 | | | | | | — | | | | | | | | | | | | (446) | | | | | | 446 | | |
Reclassifications from nonaccretable balance | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Disbursements | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Adjustment-transfer to OREO | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Payments received | | | | | — | | | | | | (123) | | | | | | — | | | | | | (9,854) | | | | | | — | | | | | | (317) | | | | | | — | | | | | | (7,946) | | |
Balance at end of period | | | | $ | — | | | | | $ | 580 | | | | | $ | 2,096 | | | | | $ | 41,774 | | | | | $ | — | | | | | $ | 703 | | | | | $ | 2,462 | | | | | $ | 51,263 | | |
|
Fair Value Measurements Using | ||||||||||||||||
Significant | ||||||||||||||||
Quoted Prices in | Other | Significant | ||||||||||||||
Active Markets for | Observable | Unobservable | ||||||||||||||
Total at | Identical Assets | Inputs | Inputs | |||||||||||||
(dollars in thousands) | December 31, 2015 | (Level 1) | (Level 2) | (Level 3) | ||||||||||||
Financial assets: | ||||||||||||||||
Available for sale securities | ||||||||||||||||
Obligations of states and political subdivisions | $ | 2,312 | $ | - | $ | 2,312 | $ | - | ||||||||
Trust preferred securities | 1,897 | - | 1,897 | - | ||||||||||||
$ | 4,209 | $ | - | $ | 4,209 | $ | - |
Fair Value Measurements Using | ||||||||||||||||
Significant | ||||||||||||||||
Quoted Prices in | Other | Significant | ||||||||||||||
Active Markets for | Observable | Unobservable | ||||||||||||||
Total at | Identical Assets | Inputs | Inputs | |||||||||||||
(dollars in thousands) | December 31, 2014 | (Level 1) | (Level 2) | (Level 3) | ||||||||||||
Financial assets: | ||||||||||||||||
Available for sale securities | ||||||||||||||||
Obligations of states and political subdivisions | $ | 2,285 | $ | - | $ | 2,285 | $ | - |
| | | | | | | | | Fair Value Measurements Using | | |||||||||||||||
| | | Total at December 31, 2016 | | | Quoted Prices in Active Markets for Identical Assets (Level 1) | | | Significant Other Observable Inputs (Level 2) | | | Significant Unobservable Inputs (Level 3) | | ||||||||||||
| | | (dollars in thousands) | | |||||||||||||||||||||
Financial assets: | | | | | | | | | | | | | | | | | | | | | |||||
Available for sale securities | | | | | | | | | | | | | | | | | | | | | | | | | |
Obligations of states and political subdivisions | | | | $ | 2,259 | | | | | $ | — | | | | | $ | 2,259 | | | | | $ | — | | |
Trust preferred securities | | | | | 1,659 | | | | | | — | | | | | | 1,659 | | | | | | — | | |
| | | | $ | 3,918 | | | | | $ | — | | | | | $ | 3,918 | | | | | $ | — | | |
|
| | | | | | | | | Fair Value Measurements Using | | |||||||||||||||
| | | Total at December 31, 2015 | | | Quoted Prices in Active Markets for Identical Assets (Level 1) | | | Significant Other Observable Inputs (Level 2) | | | Significant Unobservable Inputs (Level 3) | | ||||||||||||
| | | (dollars in thousands) | | |||||||||||||||||||||
Financial assets: | | | | | | | | | | | | | | | | | | | | | | | | | |
Available for sale securities | | | | | | | | | | | | | | | | | | | | | | | | | |
Obligations of states and political subdivisions | | | | $ | 2,312 | | | | | $ | — | | | | | $ | 2,312 | | | | | $ | — | | |
Trust preferred securities | | | | | 1,897 | | | | | | — | | | | | | 1,897 | | | | | | — | | |
| | | | $ | 4,209 | | | | | $ | — | | | | | $ | 4,209 | | | | | $ | — | | |
|
Trust Preferred Securities Classified as Held-to-Maturity
Prior to the quarter ended March 31, 2015, due to market conditions as well as the limited trading activity of these securities, the market value of the securities was highly sensitive to assumption changes and market volatility. We had determined that our trust preferred securities were classified within Level 3 of the fair value hierarchy. Market conditions and trading activity has improved significantly for trust preferred securities, and the fair value as of December 31, 2015 was estimated within Level 2 of the fair value hierarchy, as the fair value is based on either pricing models, quoted market prices of securities with similar characteristics, or discounted cash flows.
Impaired Loans
2015. Covered impaired loans totaled $963 thousand and $1.1 million at December 31, 2016 and 2015, respectively.
Fair Value Measurements Using | ||||||||||||||||
Significant | ||||||||||||||||
Quoted Prices in | Other | Significant | ||||||||||||||
Active Markets for | Observable | Unobservable | ||||||||||||||
Total at | Identical Assets | Inputs | Inputs | |||||||||||||
(dollars in thousands) | December 31, 2015 | (Level 1) | (Level 2) | (Level 3) | ||||||||||||
Impaired non-covered loans: | ||||||||||||||||
Commercial real estate - owner occupied | $ | 7,423 | $ | 7,423 | ||||||||||||
Commercial real estate - non-owner occupied (1) | 136 | 136 | ||||||||||||||
Commercial loans | 5,084 | 5,084 | ||||||||||||||
Impaired covered loans: | ||||||||||||||||
Residential 1-4 family | 1,066 | 1,066 | ||||||||||||||
Non-covered other real estate owned: | ||||||||||||||||
Commercial real estate - owner occupied | 1,110 | 1,110 | ||||||||||||||
Commercial real estate - non-owner occupied (1) | 237 | 237 | ||||||||||||||
Construction and land development | 5,007 | 5,007 | ||||||||||||||
Residential 1-4 family | 3,741 | 3,741 | ||||||||||||||
Covered other real estate owned: | ||||||||||||||||
Residential 1-4 family | 343 | 343 |
Fair Value Measurements Using | ||||||||||||||||
Significant | ||||||||||||||||
Quoted Prices in | Other | Significant | ||||||||||||||
Active Markets for | Observable | Unobservable | ||||||||||||||
Total at | Identical Assets | Inputs | Inputs | |||||||||||||
(dollars in thousands) | December 31, 2014 | (Level 1) | (Level 2) | (Level 3) | ||||||||||||
Impaired non-covered loans: | ||||||||||||||||
Commercial real estate - owner occupied | $ | 11,852 | $ | 11,852 | ||||||||||||
Commercial real estate - non-owner occupied (1) | 1,859 | 1,859 | ||||||||||||||
Construction and land development | 347 | 347 | ||||||||||||||
Commercial loans | 8,005 | 8,005 | ||||||||||||||
Residential 1-4 family | 1,044 | 1,044 | ||||||||||||||
Impaired covered loans: | ||||||||||||||||
Residential 1-4 family | 1,740 | 1,740 | ||||||||||||||
Non-covered other real estate owned: | ||||||||||||||||
Commercial real estate - owner occupied | 461 | 461 | ||||||||||||||
Commercial real estate - non-owner occupied (1) | 1,792 | 1,792 | ||||||||||||||
Construction and land development | 6,818 | 6,818 | ||||||||||||||
Residential 1-4 family | 3,980 | 3,980 |
| | | | | | | | | Fair Value Measurements Using | | |||||||||
| | | Total at December 31, 2016 | | | Quoted Prices in Active Markets for Identical Assets (Level 1) | | | Significant Other Observable Inputs (Level 2) | | | Significant Unobservable Inputs (Level 3) | | ||||||
| | | (dollars in thousands) | | |||||||||||||||
Impaired non-covered loans: | | | | | | | | | | | | | | | | | | | |
Commercial real estate – owner occupied | | | | $ | 6,121 | | | | | | | | | | | $ | 6,121 | | |
Commercial loans | | | | | 5,630 | | | | | | | | | | | | 5,630 | | |
Impaired covered loans: | | | | | | | | | | | | | | | | | | | |
Residential 1 – 4 family | | | | | 963 | | | | | | | | | | | | 963 | | |
Non-covered other real estate owned: | | | | | | | | | | | | | | | | | | | |
Commercial real estate – owner occupied | | | | | 1,110 | | | | | | | | | | | | 1,110 | | |
Commercial real estate – non-owner occupied(1) | | | | | 237 | | | | | | | | | | | | 237 | | |
Construction and land development | | | | | 3,863 | | | | | | | | | | | | 3,863 | | |
Residential 1 – 4 family | | | | | 3,407 | | | | | | | | | | | | 3,407 | | |
| | | | | | | | | Fair Value Measurements Using | | |||||||||
| | | Total at December 31, 2015 | | | Quoted Prices in Active Markets for Identical Assets (Level 1) | | | Significant Other Observable Inputs (Level 2) | | | Significant Unobservable Inputs (Level 3) | | ||||||
| | | (dollars in thousands) | | |||||||||||||||
Impaired non-covered loans: | | | | | | | | | | | | | | | | | | | |
Commercial real estate – owner occupied | | | | $ | 7,423 | | | | | | | | | | | $ | 7,423 | | |
Commercial real estate – non-owner occupied(1) | | | | | 136 | | | | | | | | | | | | 136 | | |
Commercial loans | | | | | 5,084 | | | | | | | | | | | | 5,084 | | |
Impaired covered loans: | | | | | | | | | | | | | | | | | | | |
Residential 1 – 4 family | | | | | 1,066 | | | | | | | | | | | | 1,066 | | |
Non-covered other real estate owned: | | | | | | | | | | | | | | | | | | | |
Commercial real estate – owner occupied | | | | | 1,110 | | | | | | | | | | | | 1,110 | | |
Commercial real estate – non-owner occupied(1) | | | | | 237 | | | | | | | | | | | | 237 | | |
Construction and land development | | | | | 5,007 | | | | | | | | | | | | 5,007 | | |
Residential 1 – 4 family | | | | | 3,741 | | | | | | | | | | | | 3,741 | | |
Covered other real estate owned: | | | | | | | | | | | | | | | | | | | |
Residential 1– 4 family | | | | | 343 | | | | | | | | | | | | 343 | | |
December 31, 2015 | December 31, 2014 | |||||||||||||||||
Fair Value | Carrying | Fair | Carrying | Fair | ||||||||||||||
Hierarchy Level | Amount | Value | Amount | Value | ||||||||||||||
Financial assets: | ||||||||||||||||||
Cash and cash equivalents | Level 1 | $ | 30,336 | $ | 30,336 | $ | 38,320 | $ | 38,320 | |||||||||
Securities available for sale | See previous table | 4,209 | 4,209 | 2,285 | 2,285 | |||||||||||||
Securities held to maturity | Level 2 | 96,780 | 96,464 | 94,058 | 94,093 | |||||||||||||
Stock in Federal Reserve Bank and Federal Home Loan Bank | n/a | 6,929 | n/a | 5,681 | n/a | |||||||||||||
Equity investment in mortgage affiliate | Level 3 | 4,459 | 4,459 | 3,631 | 3,631 | |||||||||||||
Preferred investment in mortgage affiliate | Level 3 | 2,555 | 2,555 | 1,805 | 1,805 | |||||||||||||
Net non-covered loans | Level 3 | 786,631 | 793,541 | 657,583 | 666,621 | |||||||||||||
Net covered loans | Level 3 | 34,373 | 38,077 | 38,475 | 43,663 | |||||||||||||
Accrued interest receivable | Level 2 & Level 3 | 2,914 | 2,914 | 2,904 | 2,904 | |||||||||||||
FDIC indemnification asset | Level 3 | 2,922 | 745 | 3,571 | 2,261 | |||||||||||||
Financial liabilities: | ||||||||||||||||||
Demand deposits | Level 1 | 111,849 | 111,849 | 94,578 | 94,578 | |||||||||||||
Money market and savings accounts | Level 1 | 181,670 | 181,670 | 181,452 | 181,452 | |||||||||||||
Certificates of deposit | Level 3 | 531,775 | 531,456 | 466,395 | 466,391 | |||||||||||||
Securities sold under agreements to | ||||||||||||||||||
repurchase and other short-term borrowings | Level 1 | 69,381 | 69,381 | 29,044 | 29,044 | |||||||||||||
FHLB advances | Level 3 | 15,000 | 15,041 | 25,000 | 25,526 | |||||||||||||
Accrued interest payable | Level 1 & Level 3 | 846 | 846 | 560 | 560 |
| | | | | | December 31, 2016 | | | December 31, 2015 | | ||||||||||||||||||
| | | Fair Value Hierarchy Level | | | Carrying Amount | | | Fair Value | | | Carrying Amount | | | Fair Value | | ||||||||||||
Financial assets: | | | | | | | ||||||||||||||||||||||
Cash and cash equivalents | | | Level 1 | | | | $ | 47,392 | | | | | $ | 47,392 | | | | | $ | 30,336 | | | | | $ | 30,336 | | |
Securities available for sale | | | See previous table | | | | | 3,918 | | | | | | 3,918 | | | | | | 4,209 | | | | | | 4,209 | | |
Securities held to maturity | | | Level 2 | | | | | 85,300 | | | | | | 83,344 | | | | | | 96,780 | | | | | | 96,464 | | |
Stock in Federal Reserve Bank and Federal Home Loan Bank | | | n/a | | | | | 7,929 | | | | | | n/a | | | | | | 6,929 | | | | | | n/a | | |
Equity investment in mortgage affiliate | | | Level 3 | | | | | 4,629 | | | | | | 4,629 | | | | | | 4,459 | | | | | | 4,459 | | |
Preferred investment in mortgage affiliate | | | Level 3 | | | | | 2,555 | | | | | | 2,555 | | | | | | 2,555 | | | | | | 2,555 | | |
Net non-covered loans | | | Level 3 | | | | | 893,625 | | | | | | 903,085 | | | | | | 786,631 | | | | | | 793,541 | | |
Net covered loans | | | Level 3 | | | | | 28,180 | | | | | | 32,173 | | | | | | 34,373 | | | | | | 38,077 | | |
Accrued interest receivable | | | Level 2 & Level 3 | | | | | 3,202 | | | | | | 3,202 | | | | | | 2,914 | | | | | | 2,914 | | |
FDIC indemnification asset | | | Level 3 | | | | | 2,111 | | | | | | 528 | | | | | | 2,922 | | | | | | 745 | | |
Financial liabilities: | | | | | | | ||||||||||||||||||||||
Demand deposits | | | Level 1 | | | | | 124,779 | | | | | | 124,779 | | | | | | 111,849 | | | | | | 111,849 | | |
Money market and savings accounts | | | Level 1 | | | | | 182,590 | | | | | | 182,590 | | | | | | 181,670 | | | | | | 181,670 | | |
Certificates of deposit | | | Level 3 | | | | | 605,613 | | | | | | 605,394 | | | | | | 531,775 | | | | | | 531,456 | | |
Securities sold under agreements to repurchase and other short-term borrowings | | | Level 1 | | | | | 95,000 | | | | | | 95,000 | | | | | | 69,381 | | | | | | 69,381 | | |
FHLB long term advances | | | Level 3 | | | | | — | | | | | | — | | | | | | 15,000 | | | | | | 15,041 | | |
Accrued interest payable | | | Level 1 & Level 3 | | | | | 1,190 | | | | | | 1,190 | | | | | | 846 | | | | | | 846 | | |
2015 | 2014 | |||||||
Land | $ | 2,261 | $ | 2,261 | ||||
Building and improvements | 5,842 | 5,811 | ||||||
Leasehold improvements | 2,428 | 2,394 | ||||||
Furniture and equipment | 4,189 | 3,948 | ||||||
14,720 | 14,414 | |||||||
Less accumulated depreciation and amortization | 5,838 | 4,961 | ||||||
Bank premises and equipment, net | $ | 8,882 | $ | 9,453 |
| | | 2016 | | | 2015 | | ||||||
Land | | | | $ | 2,261 | | | | | $ | 2,261 | | |
Building and improvements | | | | | 5,842 | | | | | | 5,842 | | |
Leasehold improvements | | | | | 2,428 | | | | | | 2,428 | | |
Furniture and equipment | | | | | 4,332 | | | | | | 4,189 | | |
| | | | | 14,863 | | | | | | 14,720 | | |
Less accumulated depreciation and amortization | | | | | 6,636 | | | | | | 5,838 | | |
Bank premises and equipment, net | | | | $ | 8,227 | | | | | $ | 8,882 | | |
|
2016 | $ | 1,852 | ||
2017 | 1,827 | |||
2018 | 1,583 | |||
2019 | 1,333 | |||
2020 | 825 | |||
Thereafter | 574 | |||
$ | 7,994 |
| 2017 | | | | $ | 1,907 | | |
| 2018 | | | | | 1,630 | | |
| 2019 | | | | | 1,341 | | |
| 2020 | | | | | 825 | | |
| 2021 | | | | | 149 | | |
| Thereafter | | | | | 425 | | |
| | | | | $ | 6,277 | | |
|
The changes in goodwill are presented in the following table (in thousands):
2015 | 2014 | |||||||
Balance as of January 1 | $ | 10,514 | $ | 9,160 | ||||
PGFSB acquisition | - | 1,354 | ||||||
Balance as of December 31 | $ | 10,514 | $ | 10,514 |
Acquired Intangible Assets
Acquired intangible
December 31, 2015 | ||||||||||||
Gross Carrying | Accumulated | Net Carrying | ||||||||||
Value | Amortization | Value | ||||||||||
Amortizable core deposit intangibles | $ | 7,477 | $ | (6,384 | ) | $ | 1,093 |
December 31, 2014 | ||||||||||||
Gross Carrying | Accumulated | Net Carrying | ||||||||||
Value | Amortization | Value | ||||||||||
Amortizable core deposit intangibles | $ | 7,477 | $ | (6,123 | ) | $ | 1,354 |
| | | December 31, 2016 | | |||||||||||||||
| | | Gross Carrying Value | | | Accumulated Amortization | | | Net Carrying Value | | |||||||||
Amortizable core deposit intangibles | | | | $ | 7,477 | | | | | $ | (6,603) | | | | | $ | 874 | | |
| | | December 31, 2015 | | |||||||||||||||
| | | Gross Carrying Value | | | Accumulated Amortization | | | Net Carrying Value | | |||||||||
Amortizable core deposit intangibles | | | | $ | 7,477 | | | | | $ | (6,384) | | | | | $ | 1,093 | | |
2016 | $ | 219 | ||
2017 | 194 | |||
2018 | 184 | |||
2019 | 173 | |||
2020 | 111 | |||
Thereafter | 212 | |||
$ | 1,093 |
| 2017 | | | | $ | 194 | | |
| 2018 | | | | | 184 | | |
| 2019 | | | | | 174 | | |
| 2020 | | | | | 111 | | |
| 2021 | | | | | 111 | | |
| Thereafter | | | | | 100 | | |
| | | | | $ | 874 | | |
|
| | | 2016 | | | 2015 | | ||||||
Balance as of January 1 | | | | $ | 2,922 | | | | | $ | 3,571 | | |
Payments from FDIC | | | | | (18) | | | | | | (3) | | |
Reforecasting adjustment | | | | | — | | | | | | (16) | | |
Accretion (amortization) | | | | | (793) | | | | | | (630) | | |
Balance as of December 31 | | | | $ | 2,111 | | | | | $ | 2,922 | | |
|
2015 | 2014 | |||||||
Balance as of January 1 | $ | 3,571 | $ | 5,804 | ||||
Payments from FDIC | (3 | ) | (1,037 | ) | ||||
Reforecasting adjustment (1) | (16 | ) | 34 | |||||
Accretion (amortization) | (630 | ) | (1,230 | ) | ||||
Balance as of December 31 | $ | 2,922 | $ | 3,571 |
During 2015,2016, and based on the actual historical losses on the loan pools over the previous 24 month period, expected losses on the acquired Greater Atlantic loans (the covered loans) were lower than previously forecasted which results in a lower expected recovery from the FDIC. As of December 31, 2015,2016, we expect to recover $745$528 thousand from the FDIC under the indemnification agreement. The difference between the carrying amount of $2.9$2.1 million and the estimated recovery is being amortized over the remaining life of the indemnification agreement or the expected life of the loans, whichever is shorter.
2016 | $ | 280,644 | ||
2017 | 105,695 | |||
2018 | 90,782 | |||
2019 | 36,759 | |||
2020 | 17,895 | |||
$ | 531,775 |
| 2017 | | | | $ | 335,344 | | |
| 2018 | | | | | 179,719 | | |
| 2019 | | | | | 51,608 | | |
| 2020 | | | | | 16,692 | | |
| 2021 | | | | | 22,250 | | |
| | | | | $ | 605,613 | | |
|
Within | 3 to 6 | 6 to 12 | Over 12 | |||||||||||||||
3 Months | Months | Months | Months | Total | ||||||||||||||
$ | 3,539 | $ | 10,532 | $ | 16,874 | $ | 68,538 | $ | 99,483 |
| Within 3 Months | | | 3 to 6 Months | | | 6 to 12 Months | | | Over 12 Months | | | Total | |
| $3,778 | | | $19,926 | | | $44,179 | | | $79,686 | | | $147,569 | |
As of December 31, 2016, we had brokered certificates of deposit in the amount of $66.5 million and brokered money market deposits of $14.2 million. At December 31, 2015, we had brokered certificates of deposit in the amount of $62.0 million, and brokered money market deposits of $15.4 million. At December 31, 2014, we had brokered certificates of deposit in the amount of $77.0 million, and we had brokered money market deposits of $10.2$15.4 million.
Other short-term borrowings can consist of Federal Home Loan Bank (FHLB) overnight advances, other FHLB advances maturing within one year, federal funds purchased and securities sold under agreements to repurchase that mature within one year, which are secured transactions with customers or broker/dealers. Other short-term borrowings consist of the following (in thousands):
2015 | 2014 | 2013 | ||||||||||
FHLB overnight advances | $ | 49,000 | $ | 15,250 | $ | - | ||||||
Other short-term FHLB advances maturing 11/4/2016 | 10,000 | - | - | |||||||||
Other short-term FHLB advances maturing 1/27/2014 | - | - | 20,000 | |||||||||
Other short-term FHLB advances maturing 7/25/2014 | - | - | 5,250 | |||||||||
Securities sold under agreements to repurchase | 10,381 | 13,794 | 14,545 | |||||||||
Total | $ | 69,381 | $ | 29,044 | $ | 39,795 | ||||||
Weighted average interest rate at year end | 0.51 | % | 0.65 | % | 0.38 | % | ||||||
For the periods ended December 31, 2015, 2014 and 2013: | ||||||||||||
Average outstanding balance | $ | 34,673 | $ | 37,810 | $ | 17,259 | ||||||
Average interest rate during the year | 0.76 | % | 0.51 | % | 0.60 | % | ||||||
Maximum month-end outstanding balance | $ | 69,381 | $ | 66,852 | $ | 39,795 |
At December 31, 2015 and 2014, we have pledged callable agency securities, residential government-sponsored mortgage-backed securities and collateralized mortgage obligations with a carrying value of $26.7 million and $20.8 million, respectively, to customers who require collateral for overnight repurchase agreements and other deposits.
| | | December 31, | | |||||||||||||||
| | | 2016 | | | 2015 | | | 2014 | | |||||||||
FHLB overnight advances | | | | $ | 50,000 | | | | | $ | 49,000 | | | | | $ | 15,250 | | |
Other short-term FHLB advances maturing 3/27/17 | | | | | 10,000 | | | | | | — | | | | | | — | | |
Other short-term FHLB advances maturing 5/4/2017 | | | | | 10,000 | | | | | | — | | | | | | — | | |
Other short-term FHLB advances maturing 6/5/2017 | | | | | 10,000 | | | | | | — | | | | | | — | | |
Other short-term FHLB advances maturing 6/19/2017 | | | | | 5,000 | | | | | | — | | | | | | — | | |
Other short-term FHLB advances maturing 12/15/2017 | | | | | 10,000 | | | | | | — | | | | | | — | | |
Other short-term FHLB advances maturing 11/4/2016 | | | | | — | | | | | | 10,000 | | | | | | — | | |
Securities sold under agreements to repurchase | | | | | — | | | | | | 10,381 | | | | | | 13,794 | | |
Total | | | | $ | 95,000 | | | | | $ | 69,381 | | | | | $ | 29,044 | | |
Weighted average interest rate at year end | | | | | 0.86% | | | | | | 0.51% | | | | | | 0.65% | | |
For the periods ended December 31, 2016, 2015 and 2014: | | | | | | | | | | | | | | | | | | | |
Average outstanding balance | | | | $ | 66,864 | | | | | $ | 34,673 | | | | | $ | 37,810 | | |
Average interest rate during the year | | | | | 0.74% | | | | | | 0.76% | | | | | | 0.51% | | |
Maximum month-end outstanding balance | | | | $ | 95,000 | | | | | $ | 69,381 | | | | | $ | 66,852 | | |
2015 | 2014 | |||||||
FHLB fixed rate advance maturing June 2016 with a rate of 1.78% | - | 5,000 | ||||||
FHLB fixed rate advance maturing June 2016 with a rate of 1.78% | - | 5,000 | ||||||
FHLB fixed rate advance maturing June 2016 with a rate of 2.08% | - | 5,000 | ||||||
FHLB fixed rate advance maturing June 2016 with a rate of 2.03% | - | 5,000 | ||||||
FHLB fixed rate advance maturing June 2017 with a rate of 2.26% | 5,000 | 5,000 | ||||||
FHLB fixed rate advance maturing June 2017 with a rate of 0.80% | 10,000 | - | ||||||
Total FHLB advances | $ | 15,000 | $ | 25,000 |
| | | December 31, | | |||||||||
| | | 2016 | | | 2015 | | ||||||
FHLB fixed rate advance maturing June 2017 with a rate of 2.26% | | | | $ | — | | | | | $ | 5,000 | | |
FHLB fixed rate advance maturing June 2017 with a rate of 0.80% | | | | | — | | | | | | 10,000 | | |
Total FHLB advances | | | | $ | — | | | | | $ | 15,000 | | |
|
At December 31, 2015,2016, Sonabank had available collateral to borrow an additional $122.6$178.7 million from the FHLB.
2015 | 2014 | |||||||
Deferred tax assets: | ||||||||
Allowance for loan losses | $ | 2,934 | $ | 2,570 | ||||
Organization costs | 100 | 127 | ||||||
Unearned loan fees and other | 739 | 617 | ||||||
Other real estate owned write-downs | 1,063 | 942 | ||||||
FDIC assisted transactions timing difference | 827 | 1,721 | ||||||
Other than temporary impairment charge | 369 | 2,454 | ||||||
Net unrealized loss on securities available for sale | 314 | 1,549 | ||||||
Purchase accounting | 1,205 | 1,340 | ||||||
Deferred compensation | 707 | 563 | ||||||
Other | 188 | 182 | ||||||
Total deferred tax assets | 8,446 | 12,065 | ||||||
Deferred tax liabilities: | ||||||||
FDIC indemnification asset | 1,018 | 1,238 | ||||||
Depreciation | 712 | 744 | ||||||
Total deferred tax liabilities | 1,730 | 1,982 | ||||||
Net deferred tax assets | $ | 6,716 | $ | 10,083 |
| | | 2016 | | | 2015 | | ||||||
Deferred tax assets: | | | | ||||||||||
Allowance for loan losses | | | | $ | 2,997 | | | | | $ | 2,934 | | |
Organization costs | | | | | 72 | | | | | | 100 | | |
Unearned loan fees and other | | | | | 656 | | | | | | 739 | | |
Other real estate owned write-downs | | | | | 945 | | | | | | 1,063 | | |
FDIC assisted transactions timing difference | | | | | — | | | | | | 827 | | |
Other than temporary impairment charge | | | | | 369 | | | | | | 369 | | |
Net unrealized loss on securities available for sale | | | | | 406 | | | | | | 314 | | |
Purchase accounting | | | | | 934 | | | | | | 1,205 | | |
Deferred compensation | | | | | 878 | | | | | | 707 | | |
Other | | | | | 871 | | | | | | 188 | | |
Total deferred tax assets | | | | | 8,128 | | | | | | 8,446 | | |
Deferred tax liabilities: | | | | ||||||||||
FDIC indemnification asset | | | | | 735 | | | | | | 1,018 | | |
Depreciation | | | | | 613 | | | | | | 712 | | |
Total deferred tax liabilities | | | | | 1,348 | | | | | | 1,730 | | |
Net deferred tax assets | | | | $ | 6,780 | | | | | $ | 6,716 | | |
|
The provision for income taxes consists of the following for the years ended December 31, 2016, 2015 2014 and 20132014 (in thousands):
2015 | 2014 | 2013 | ||||||||||
Current tax expense | ||||||||||||
Federal | $ | 2,367 | $ | 4,047 | $ | 2,852 | ||||||
State | 168 | 125 | 82 | |||||||||
Total current tax expense | 2,535 | 4,172 | 2,934 | |||||||||
Deferred tax benefit | ||||||||||||
Federal | 2,123 | (394 | ) | 102 | ||||||||
State | 9 | (24 | ) | - | ||||||||
Total deferred tax expense (benefit) | 2,132 | (418 | ) | 102 | ||||||||
Total income tax expense | $ | 4,667 | $ | 3,754 | $ | 3,036 |
| | | 2016 | | | 2015 | | | 2014 | | |||||||||
Current tax expense | | | | | |||||||||||||||
Federal | | | | $ | 4,781 | | | | | $ | 2,367 | | | | | $ | 4,047 | | |
State | | | | | 285 | | | | | | 168 | | | | | | 125 | | |
Total current tax expense | | | | | 5,066 | | | | | | 2,535 | | | | | | 4,172 | | |
Deferred tax benefit | | | | | |||||||||||||||
Federal | | | | | 28 | | | | | | 2,123 | | | | | | (394) | | |
State | | | | | 1 | | | | | | 9 | | | | | | (24) | | |
Total deferred tax expense (benefit) | | | | | 29 | | | | | | 2,132 | | | | | | (418) | | |
Total income tax expense | | | | $ | 5,095 | | | | | $ | 4,667 | | | | | $ | 3,754 | | |
|
2015 | 2014 | 2013 | ||||||||||
Computed expected tax expense at statutory rate | $ | 4,745 | $ | 3,821 | $ | 3,160 | ||||||
Reduction in tax expense resulting from: | ||||||||||||
Income from bank-owned life insurance | (216 | ) | (210 | ) | (202 | ) | ||||||
Other, net | 138 | 143 | 78 | |||||||||
Income tax expense | $ | 4,667 | $ | 3,754 | $ | 3,036 |
| | | 2016 | | | 2015 | | | 2014 | | |||||||||
Computed expected tax expense at statutory rate | | | | $ | 5,238 | | | | | $ | 4,745 | | | | | $ | 3,821 | | |
Reduction in tax expense resulting from: | | | | | |||||||||||||||
Income from bank-owned life insurance | | | | | (238) | | | | | | (216) | | | | | | (210) | | |
Other, net | | | | | 95 | | | | | | 138 | | | | | | 143 | | |
Income tax expense | | | | $ | 5,095 | | | | | $ | 4,667 | | | | | $ | 3,754 | | |
|
2015 | 2014 | 2013 | ||||||||||
Expected life | 10 years | 10 years | 10 years | |||||||||
Expected volatility | 14.71 | % | 29.30 | % | 34.21 | % | ||||||
Risk-free interest rate | 2.26 | % | 2.48 | % | 2.42 | % | ||||||
Weighted average fair value per option granted | $ | 0.51 | $ | 2.88 | $ | 3.58 | ||||||
Dividend yield | 5.51 | % | 2.55 | % | 1.29 | % |
| | | 2016 | | | 2015 | | | 2014 | | |||||||||
Expected life | | | 10 years | | | 10 years | | | 10 years | | |||||||||
Expected volatility | | | | | 14.16% | | | | | | 14.71% | | | | | | 29.30% | | |
Risk-free interest rate | | | | | 1.62% | | | | | | 2.26% | | | | | | 2.48% | | |
Weighted average fair value per option granted | | | | $ | 0.63 | | | | | $ | 0.51 | | | | | $ | 2.88 | | |
Dividend yield | | | | | 4.44% | | | | | | 5.51% | | | | | | 2.55% | | |
Weighted | ||||||||||||||||
Weighted | Average | Aggregate | ||||||||||||||
Average | Remaining | Intrinsic | ||||||||||||||
Exercise | Contractual | Value | ||||||||||||||
Shares | Price | Term | (in thousands) | |||||||||||||
Options outstanding, beginning of period | 621,050 | $ | 8.49 | |||||||||||||
Granted | 125,500 | 11.43 | ||||||||||||||
Forfeited | (2,200 | ) | 9.09 | |||||||||||||
Exercised | (79,950 | ) | 8.84 | |||||||||||||
Options outstanding, end of period | 664,400 | $ | 9.00 | 6.8 | $ | 2,703 | ||||||||||
Vested or expected to vest | 664,400 | $ | 9.00 | 6.8 | $ | 2,703 | ||||||||||
Exercisable at end of period | 329,150 | $ | 7.92 | 5.3 | $ | 1,698 |
| | | Shares | | | Weighted Average Exercise Price | | | Weighted Average Remaining Contractual Term | | | Aggregate Intrinsic Value (in thousands) | | ||||||||||||
Options outstanding, beginning of period | | | | | 664,400 | | | | | $ | 9.00 | | | | | | | | | | | | | | |
Granted | | | | | 136,000 | | | | | | 11.99 | | | | | | | | | | | | | | |
Forfeited | | | | | — | | | | | | — | | | | | | | | | | | | | | |
Exercised | | | | | (18,200) | | | | | | 7.44 | | | | | | | | | | | | | | |
Options outstanding, end of period | | | | | 782,200 | | | | | $ | 9.56 | | | | | | 6.5 | | | | | $ | 5,301 | | |
Vested or expected to vest | | | | | 782,200 | | | | | $ | 9.56 | | | | | | 6.7 | | | | | $ | 5,301 | | |
Exercisable at end of period | | | | | 418,910 | | | | | $ | 7.99 | | | | | | 4.7 | | | | | $ | 3,365 | | |
Weighted | ||||||||||||
Average | ||||||||||||
Income | Shares | Per Share | ||||||||||
(Numerator) | (Denominator) | Amount | ||||||||||
For the year ended December 31, 2015 | ||||||||||||
Basic EPS | $ | 9,289 | 12,224 | $ | 0.76 | |||||||
Effect of dilutive stock options and warrants | 106 | - | ||||||||||
Diluted EPS | $ | 9,289 | 12,330 | $ | 0.75 | |||||||
For the year ended December 31, 2014 | ||||||||||||
Basic EPS | $ | 7,483 | 11,846 | $ | 0.63 | |||||||
Effect of dilutive stock options and warrants | 81 | - | ||||||||||
Diluted EPS | $ | 7,483 | 11,927 | $ | 0.63 | |||||||
For the year ended December 31, 2013 | ||||||||||||
Basic EPS | $ | 6,258 | 11,590 | $ | 0.54 | |||||||
Effect of dilutive stock options and warrants | 37 | - | ||||||||||
Diluted EPS | $ | 6,258 | 11,627 | $ | 0.54 |
| | | Income (Numerator) | | | Weighted Average Shares (Denominator) | | | Per Share Amount | | |||||||||
For the year ended December 31, 2016 | | | | | | | | | | | | | | | | | | | |
Basic EPS | | | | $ | 10,312 | | | | | | 12,252 | | | | | $ | 0.84 | | |
Effect of dilutive stock options and warrants | | | | | | | | | | | 175 | | | | | | — | | |
Diluted EPS | | | | $ | 10,312 | | | | | | 12,427 | | | | | $ | 0.83 | | |
For the year ended December 31, 2015 | | | | | | | | | | | | | | | | | | | |
Basic EPS | | | | $ | 9,289 | | | | | | 12,224 | | | | | $ | 0.76 | | |
Effect of dilutive stock options and warrants | | | | | | | | | | | 106 | | | | | | — | | |
Diluted EPS | | | | $ | 9,289 | | | | | | 12,330 | | | | | $ | 0.75 | | |
For the year ended December 31, 2014 | | | | | | | | | | | | | | | | | | | |
Basic EPS | | | | $ | 7,483 | | | | | | 11,846 | | | | | $ | 0.63 | | |
Effect of dilutive stock options and warrants | | | | | | | | | | | 81 | | | | | | — | | |
Diluted EPS | | | | $ | 7,483 | | | | | | 11,927 | | | | | $ | 0.63 | | |
|
2014.
Required | ||||||||||||||||||||||||
For Capital | To Be Categorized as | |||||||||||||||||||||||
Actual | Adequacy Purposes | Well Capitalized | ||||||||||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||||||||||
December 31, 2015 | ||||||||||||||||||||||||
Southern National | ||||||||||||||||||||||||
Common equity tier 1 capital ratio | $ | 109,276 | 13.13 | % | $ | 37,254 | 4.50 | % | $ | 54,101 | 6.50 | % | ||||||||||||
Tier 1 risk-based capital ratio | 109,276 | 13.13 | % | 49,939 | 6.00 | % | 66,585 | 8.00 | % | |||||||||||||||
Total risk-based capital ratio | 117,697 | 14.14 | % | 66,585 | 8.00 | % | 83,232 | 10.00 | % | |||||||||||||||
Leverage ratio | 109,276 | 11.06 | % | 39,509 | 4.00 | % | 49,386 | 5.00 | % | |||||||||||||||
Sonabank | ||||||||||||||||||||||||
Common equity tier 1 capital ratio | $ | 108,054 | 12.99 | % | $ | 37,436 | 4.50 | % | $ | 54,075 | 6.50 | % | ||||||||||||
Tier 1 risk-based capital ratio | 108,054 | 12.99 | % | 49,915 | 6.00 | % | 66,553 | 8.00 | % | |||||||||||||||
Total risk-based capital ratio | 116,475 | 14.00 | % | 66,553 | 8.00 | % | 83,192 | 10.00 | % | |||||||||||||||
Leverage ratio | 108,054 | 10.94 | % | 39,493 | 4.00 | % | 49,366 | 5.00 | % | |||||||||||||||
December 31, 2014 | ||||||||||||||||||||||||
Southern National | ||||||||||||||||||||||||
Tier 1 risk-based capital ratio | $ | 105,107 | 15.19 | % | $ | 27,671 | 4.00 | % | $ | 41,507 | 6.00 | % | ||||||||||||
Total risk-based capital ratio | 112,521 | 16.27 | % | 55,343 | 8.00 | % | 69,179 | 10.00 | % | |||||||||||||||
Leverage ratio | 105,107 | 11.80 | % | 35,623 | 4.00 | % | 44,529 | 5.00 | % | |||||||||||||||
Sonabank | ||||||||||||||||||||||||
Tier 1 risk-based capital ratio | $ | 104,007 | 15.04 | % | $ | 27,658 | 4.00 | % | $ | 41,487 | 6.00 | % | ||||||||||||
Total risk-based capital ratio | 111,421 | 16.11 | % | 55,316 | 8.00 | % | 69,145 | 10.00 | % | |||||||||||||||
Leverage ratio | 104,007 | 11.68 | % | 35,609 | 4.00 | % | 44,511 | 5.00 | % |
| | | Actual | | | Required For Capital Adequacy Purposes(1) | | | To Be Categorized as Well Capitalized(2) | ||||||||||||||||||||||||||
| | | Amount | | | Ratio | | | Amount | | | Ratio | | | Amount | | | Ratio | |||||||||||||||||
December 31, 2016 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Southern National | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Common equity tier 1 capital ratio | | | | $ | 116,076 | | | | | | 12.69% | | | | | $ | 41,171 | | | | | | 4.50% | | | | | | n/a | | | | | | n/a |
Tier 1 risk-based capital ratio | | | | | 116,076 | | | | | | 12.69% | | | | | | 54,894 | | | | | | 6.00% | | | | | | n/a | | | | | | n/a |
Total risk-based capital ratio | | | | | 124,686 | | | | | | 13.63% | | | | | | 73,193 | | | | | | 8.00% | | | | | | n/a | | | | | | n/a |
Leverage ratio | | | | | 116,076 | | | | | | 10.56% | | | | | | 43,965 | | | | | | 4.00% | | | | | | n/a | | | | | | n/a |
Sonabank | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Common equity tier 1 capital ratio | | | | $ | 114,779 | | | | | | 12.55% | | | | | $ | 41,151 | | | | | | 4.50% | | | | | $ | 59,440 | | | | | | 6.50% |
Tier 1 risk-based capital ratio | | | | | 114,779 | | | | | | 12.55% | | | | | | 54,868 | | | | | | 6.00% | | | | | | 73,157 | | | | | | 8.00% |
Total risk-based capital ratio | | | | | 123,389 | | | | | | 13.49% | | | | | | 73,157 | | | | | | 8.00% | | | | | | 91,447 | | | | | | 10.00% |
Leverage ratio | | | | | 114,779 | | | | | | 10.45% | | | | | | 43,947 | | | | | | 4.00% | | | | | | 54,934 | | | | | | 5.00% |
December 31, 2015 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Southern National | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Common equity tier 1 capital ratio | | | | $ | 109,276 | | | | | | 13.13% | | | | | $ | 37,254 | | | | | | 4.50% | | | | | | n/a | | | | | | n/a |
Tier 1 risk-based capital ratio | | | | | 109,276 | | | | | | 13.13% | | | | | | 49,939 | | | | | | 6.00% | | | | | | n/a | | | | | | n/a |
Total risk-based capital ratio | | | | | 117,697 | | | | | | 14.14% | | | | | | 66,585 | | | | | | 8.00% | | | | | | n/a | | | | | | n/a |
Leverage ratio | | | | | 109,276 | | | | | | 11.06% | | | | | | 39,509 | | | | | | 4.00% | | | | | | n/a | | | | | | n/a |
Sonabank | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Common equity tier 1 capital ratio | | | | $ | 108,054 | | | | | | 12.99% | | | | | $ | 37,436 | | | | | | 4.50% | | | | | $ | 54,075 | | | | | | 6.50% |
Tier 1 risk-based capital ratio | | | | | 108,054 | | | | | | 12.99% | | | | | | 49,915 | | | | | | 6.00% | | | | | | 66,553 | | | | | | 8.00% |
Total risk-based capital ratio | | | | | 116,475 | | | | | | 14.00% | | | | | | 66,553 | | | | | | 8.00% | | | | | | 83,192 | | | | | | 10.00% |
Leverage ratio | | | | | 108,054 | | | | | | 10.94% | | | | | | 39,493 | | | | | | 4.00% | | | | | | 49,366 | | | | | | 5.00% |
The merger with PGFSB was completed on August 1, 2014, and allowed Southern National to expand its presence in Maryland. Southern National acquired PGFSB in a cash and stock transaction. PGFSB was founded in 1931 and is headquartered in Upper Marlboro, which is the County Seat of Prince George’s County, Maryland. PGFSB has four offices, all of which are in Maryland, including a main office in Upper Marlboro and three branch offices in Dunkirk, Brandywine and Huntingtown. PGFSB has an excellent core deposit base reflecting its tenure in the communities it serves, and its lending activities have historically been focused on residential mortgages which make up the vast majority of loans acquired.
The acquisition was accounted for under the acquisition method of accounting. The assets and liabilities were recorded at their estimated fair values as of the August 1, 2014 acquisition date. Total consideration for the acquisition included cash paid to PGFSB shareholders of $5.749 million and 525,858 shares of Southern National common stock in the amount of $5.748 million. A summary of the net assets acquired is as follows (in thousands):
Total purchase price | $ | 11,497 | ||
Fair value of assets acquired: | ||||
Cash on hand and in banks | $ | 28,179 | ||
Loans | 61,832 | |||
Loans held for sale | 3,499 | |||
Land and buildings | 3,023 | |||
Deferred tax asset | 1,877 | |||
Other assets | 1,022 | |||
Core deposit intangible | 761 | |||
Total assets acquired | $ | 100,193 | ||
Fair value of liabilities assumed: | ||||
Noninterest-bearing deposits | $ | 19,233 | ||
Interest-bearing deposits | 69,995 | |||
Other liabilities | 822 | |||
Total liabilities assumed | $ | 90,050 | ||
Net assets acquired | $ | 10,143 | ||
Goodwill | 1,354 | |||
$ | 11,497 |
A valuation of the acquired loans and core deposit intangible was performed with the assistance of a third-party valuation consultant. The unpaid principal balance and fair value of performing loans was $64.2 million and $61.2 million, respectively. The discount of $3.0 million will be accreted through interest income over the life of the loans in accordance with Accounting Standards Codification (ASC) topic 310-20. The unpaid principal balance and estimated fair value of acquired and retained non-performing loans was $1.5 million and $682 thousand, respectively. The discount of $790 thousand for these credit impaired loans will not be accreted in accordance with ASC 310-30. We also acquired nonperforming loans with an unpaid principal balance of $5.5 million and a fair value of $3.5 million which were sold immediately after acquisition for the fair value amount.
Merger costs related to the PGFSB acquisition were $445 thousand, consisting primarily of legal, investment banking and data processing expenses. We recorded goodwill in the amount of $1.4 million which is the difference between the total purchase price and the net assets acquired and is not deductible for income tax purposes.
The PGFSB branches have been integrated into the Sonabank branch system.
On May 15, 2014, Southern National Bancorp of Virginia Inc., Jerry Flowers of Southern Trust Mortgage (STM), and Eastern Virginia Bankshares (EVB), the holding company for EVB, completed the purchase of the 62 percent of STM previously owned by Middleburg Bank. Jerry Flowers and other STM executives now own 51.1 percent of STM, Sonabank owns 44 percent and EVB owns 4.9 percent.
Sonabank’s equity method investment in STM totaled $3.2 million. Sonabank also acquired 1.8 million shares of preferred stock in the amount of $1.8 million in STM with an annual dividend yield of 7.5%.
DECEMBER 31,
2015 | 2014 | |||||||
ASSETS | ||||||||
Cash | $ | 823 | $ | 769 | ||||
Investment in subsidiary | 118,413 | 112,879 | ||||||
Other assets | 400 | 331 | ||||||
Total assets | $ | 119,636 | $ | 113,979 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Stockholders' equity: | ||||||||
Common stock | $ | 122 | $ | 122 | ||||
Additional paid in capital | 104,389 | 104,072 | ||||||
Retained earnings | 15,735 | 12,805 | ||||||
Accumulated other comprehensive loss | (610 | ) | (3,020 | ) | ||||
Total stockholders' equity | 119,636 | 113,979 | ||||||
Total liabilities and stockholders' equity | $ | 119,636 | $ | 113,979 |
| | | 2016 | | | 2015 | | ||||||
ASSETS | | | | | | | | | | | | | |
Cash | | | | $ | 856 | | | | | $ | 823 | | |
Investment in subsidiary | | | | | 125,047 | | | | | | 118,413 | | |
Other assets | | | | | 441 | | | | | | 400 | | |
Total assets | | | | $ | 126,344 | | | | | $ | 119,636 | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | | | | | | |
Stockholders’ equity: | | | | | | | | | | | | | |
Common stock | | | | $ | 123 | | | | | $ | 122 | | |
Additional paid in capital | | | | | 104,884 | | | | | | 104,389 | | |
Retained earnings | | | | | 22,126 | | | | | | 15,735 | | |
Accumulated other comprehensive loss | | | | | (789) | | | | | | (610) | | |
Total stockholders’ equity | | | | | 126,344 | | | | | | 119,636 | | |
Total liabilities and stockholders’ equity | | | | $ | 126,344 | | | | | $ | 119,636 | | |
|
FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 2014 AND 2013
2014
(in thousands)
2015 | 2014 | 2013 | ||||||||||
Equity in undistributed net income of subsidiary | $ | 9,424 | $ | 7,590 | $ | 6,370 | ||||||
Other operating expenses | 204 | 162 | 170 | |||||||||
Income before income taxes | 9,220 | 7,428 | 6,200 | |||||||||
Income tax benefit | (69 | ) | (55 | ) | (58 | ) | ||||||
Net income | $ | 9,289 | $ | 7,483 | $ | 6,258 |
| | | 2016 | | | 2015 | | | 2014 | | |||||||||
Cash dividends received from Sonabank | | | | $ | 3,600 | | | | | $ | 6,300 | | | | | $ | 6,500 | | |
Other operating expenses | | | | | 153 | | | | | | 204 | | | | | | 162 | | |
Income before tax benefit and undistributed income of Sonabank | | | | | 3,447 | | | | | | 6,096 | | | | | | 6,338 | | |
Income tax benefit | | | | | (52) | | | | | | (69) | | | | | | (55) | | |
Equity in undistributed net income of Sonabank | | | | | 6,813 | | | | | | 3,124 | | | | | | 1,090 | | |
Net income | | | | $ | 10,312 | | | | | $ | 9,289 | | | | | $ | 7,483 | | |
|
FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 2014 AND 2013
2014
( in thousands)
2015 | 2014 | 2013 | ||||||||||
Operating activities: | ||||||||||||
Net income | $ | 9,289 | $ | 7,483 | $ | 6,258 | ||||||
Adjustments to reconcile net income to net cash and cash equivalents provided by operating activities: | ||||||||||||
Equity in undistributed net income of subsidiary | (9,424 | ) | (7,590 | ) | (6,370 | ) | ||||||
Other, net | 262 | 264 | 277 | |||||||||
Net cash and cash equivalents provided by operating activities | 127 | 157 | 165 | |||||||||
Investing activities: | ||||||||||||
Dividend from bank subsidiary | 6,300 | 6,500 | 2,680 | |||||||||
Net cash and cash equivalents provided by investing activities | 6,300 | 6,500 | 2,680 | |||||||||
Financing activities: | ||||||||||||
Issuance of common stock | 707 | 886 | 3 | |||||||||
Repurchase of common stock | (721 | ) | - | - | ||||||||
Dividend payment on common stock | (6,359 | ) | (7,239 | ) | (2,898 | ) | ||||||
Net cash and cash equivalents used in financing activities | (6,373 | ) | (6,353 | ) | (2,895 | ) | ||||||
Increase (decrease) in cash and cash equivalents | 54 | 304 | (50 | ) | ||||||||
Cash and cash equivalents at beginning of period | 769 | 465 | 515 | |||||||||
Cash and cash equivalents at end of period | $ | 823 | $ | 769 | $ | 465 |
| | | 2016 | | | 2015 | | | 2014 | | |||||||||
Operating activities: | | | | | | | | | | | | | | | | | | | |
Net income | | | | $ | 10,312 | | | | | $ | 9,289 | | | | | $ | 7,483 | | |
Adjustments to reconcile net income to net cash and cash equivalents provided by operating activities: | | | | | | | | | | | | | | | | | | | |
Equity in undistributed net income of subsidiary | | | | | (10,413) | | | | | | (9,424) | | | | | | (7,590) | | |
Other, net | | | | | 219 | | | | | | 262 | | | | | | 264 | | |
Net cash and cash equivalents provided by operating activities | | | | | 118 | | | | | | 127 | | | | | | 157 | | |
Investing activities: | | | | | | | | | | | | | | | | | | | |
Dividend from bank subsidiary | | | | | 3,600 | | | | | | 6,300 | | | | | | 6,500 | | |
Net cash and cash equivalents provided by investing activities | | | | | 3,600 | | | | | | 6,300 | | | | | | 6,500 | | |
Financing activities: | | | | | | | | | | | | | | | | | | | |
Issuance of common stock | | | | | 236 | | | | | | 707 | | | | | | 886 | | |
Repurchase of common stock | | | | | — | | | | | | (721) | | | | | | — | | |
Dividend payment on common stock | | | | | (3,921) | | | | | | (6,359) | | | | | | (7,239) | | |
Net cash and cash equivalents used in financing activities | | | | | (3,685) | | | | | | (6,373) | | | | | | (6,353) | | |
Increase (decrease) in cash and cash equivalents | | | | | 33 | | | | | | 54 | | | | | | 304 | | |
Cash and cash equivalents at beginning of period | | | | | 823 | | | | | | 769 | | | | | | 465 | | |
Cash and cash equivalents at end of period | | | | $ | 856 | | | | | $ | 823 | | | | | $ | 769 | | |
|
Balance at | Current Period | Balance at | ||||||||||
December 31, 2014 | Change | December 31, 2015 | ||||||||||
Unrealized gains (losses) on securities available for sale | $ | (6 | ) | $ | (434 | ) | $ | (440 | ) | |||
Unrecognized loss on securities held to maturity for which other than | ||||||||||||
temporary impairment charges have been taken | (2,512 | ) | 2,823 | 311 | ||||||||
Unrealized loss on securities available for sale transferred to held to maturity | (502 | ) | 21 | (481 | ) | |||||||
. | ||||||||||||
Total | $ | (3,020 | ) | $ | 2,410 | $ | (610 | ) |
| | | Balance at December 31, 2015 | | | Current Period Change | | | Balance at December 31, 2016 | | |||||||||
Unrealized gains (losses) on securities available for sale | | | | $ | (440) | | | | | $ | (187) | | | | | $ | (627) | | |
Unrecognized loss on securities held to maturity for which other than temporary impairment charges have been taken | | | | | 311 | | | | | | — | | | | | | 311 | | |
Unrealized loss on securities available for sale transferred to held to maturity | | | | | (481) | | | | | | 8 | | | | | | (473) | | |
Total | | | | $ | (610) | | | | | $ | (179) | | | | | $ | (789) | | |
|
2015 | 2014 | |||||||
Loans outstanding at January 1 | $ | 9,383 | $ | - | ||||
Principal advances | 132,206 | 92,841 | ||||||
Principal paid | (131,151 | ) | (83,458 | ) | ||||
Balance at December 31 | $ | 10,438 | $ | 9,383 |
| | | 2016 | | | 2015 | | ||||||
Loans outstanding at January 1 | | | | $ | 10,438 | | | | | $ | 9,383 | | |
Principal advances | | | | | 149,725 | | | | | | 132,206 | | |
Principal paid | | | | | (152,037) | | | | | | (131,151) | | |
Balance at December 31 | | | | $ | 8,126 | | | | | $ | 10,438 | | |
|
Sonabank has established with STM underwriting guidelines under which it will purchase residential construction only, construction loans that convert to permanent, and permanent loans primarily in its Virginia and Maryland footprint from STM. These will be largely loans that do not conform to FNMA or FHLMC standards because of size or acreage. We purchased loans in an aggregate amount of $77.4 million during 2016, and $51.4 million during 2015, and $20.2 million during 2014.
2015.
| | | Interest Income | | | Net Interest Income | | | Income Before Taxes | | | Net Income | | | Earnings Per Share | | |||||||||||||||||||||
| | | Basic | | | Diluted | | ||||||||||||||||||||||||||||||
| | | (dollars in thousands) | | |||||||||||||||||||||||||||||||||
2016 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
First quarter | | | | $ | 11,673 | | | | | $ | 9,712 | | | | | $ | 3,555 | | | | | $ | 2,566 | | | | | $ | 0.21 | | | | | $ | 0.21 | | |
Second quarter | | | | | 12,291 | | | | | | 10,174 | | | | | | 4,182 | | | | | | 2,789 | | | | | | 0.23 | | | | | | 0.23 | | |
Third quarter | | | | | 12,619 | | | | | | 10,373 | | | | | | 4,140 | | | | | | 2,765 | | | | | | 0.23 | | | | | | 0.22 | | |
Fourth quarter | | | | | 12,364 | | | | | | 10,055 | | | | | | 3,530 | | | | | | 2,192 | | | | | | 0.18 | | | | | | 0.18 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
2015 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
First quarter | | | | $ | 10,435 | | | | | $ | 8,927 | | | | | $ | 2,986 | | | | | $ | 2,004 | | | | | $ | 0.16 | | | | | $ | 0.16 | | |
Second quarter | | | | | 10,732 | | | | | | 9,024 | | | | | | 3,694 | | | | | | 2,466 | | | | | | 0.20 | | | | | | 0.20 | | |
Third quarter | | | | | 11,148 | | | | | | 9,183 | | | | | | 3,726 | | | | | | 2,481 | | | | | | 0.20 | | | | | | 0.20 | | |
Fourth quarter | | | | | 11,386 | | | | | | 9,490 | | | | | | 3,550 | | | | | | 2,338 | | | | | | 0.19 | | | | | | 0.19 | | |
Interest | Net Interest | Income | Net | Earnings Per Share | ||||||||||||||||||||
Income | Income | Before Taxes | Income | Basic | Diluted | |||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||
2015 | ||||||||||||||||||||||||
First quarter | $ | 10,435 | $ | 8,927 | $ | 2,986 | $ | 2,004 | $ | 0.16 | $ | 0.16 | ||||||||||||
Second quarter | 10,732 | 9,024 | 3,694 | 2,466 | 0.20 | 0.20 | ||||||||||||||||||
Third quarter | 11,148 | 9,183 | 3,726 | 2,481 | 0.20 | 0.20 | ||||||||||||||||||
Fourth quarter | 11,386 | 9,490 | 3,550 | 2,338 | 0.19 | 0.19 | ||||||||||||||||||
2014 | ||||||||||||||||||||||||
First quarter | $ | 8,641 | $ | 7,587 | $ | 2,434 | $ | 1,642 | $ | 0.14 | $ | 0.14 | ||||||||||||
Second quarter | 8,926 | 7,859 | 2,733 | 1,772 | 0.15 | 0.15 | ||||||||||||||||||
Third quarter | 9,984 | 8,812 | 3,157 | 2,108 | 0.18 | 0.17 | ||||||||||||||||||
Fourth quarter | 10,541 | 9,160 | 2,914 | 1,961 | 0.16 | 0.16 |
None.
2016.
(c)Changes in Internal Control over Financial ReportingReporting.. There have been no changes in Southern National’s internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
None.
Financial Statements The following consolidated financial statements and reports of independent registered public accounting firm are in Part II, Item 8: Reports of Independent Registered Public Accounting Firm Consolidated Balance Sheets — December 31, 2016 and 2015 Consolidated Statements of Income and Comprehensive Income — Years ended December 31, 2016, 2015 and 2014 Consolidated Statements of Changes in Stockholders’ Equity — Years ended December 31, 2016, 2015 and 2014 Consolidated Statements of Cash Flows — Years ended December 31, 2016, 2015 and 2014 Notes to Consolidated Financial Statements (a)(2) Financial Statement Schedules All schedules are omitted since they are not required, are not applicable, or the required information is shown in the consolidated financial statements or notes thereto. 121 (a)(3) Exhibits The following are filed or furnished, as noted below, as part of this Annual Report on Form 10-K and this list includes the Exhibit Index.
122
+ Management contract or compensatory plan or arrangement
* Filed herewith ** Furnished herewith 123 Southern National Bancorp of Virginia, Inc. will furnish, upon written request, a copy of any exhibit listed above upon the payment of a reasonable fee covering the expense of furnishing the copy. Requests should be directed to: William H. Lagos, Sr. Vice President and Chief Financial Officer
124 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Date: March
125 |