x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d)
OF
|
¨
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE
|
Delaware
|
43-1930755
|
|
(State
or other jurisdiction of incorporation or organization)
|
(I.R.S.
Employer Identification
Number)
|
Large
accelerated filer ¨
|
Accelerated
filer ¨
|
Non-accelerated
filer ¨
|
Smaller
reporting company x
|
Page Number
|
||
PART
I
|
||
Item
1.
|
Financial
Statements and Related Notes
|
2 -
17
|
Item
2.
|
Management's
Discussion and Analysis of Financial Condition and Results of
Operations
|
18
– 25
|
Item
3.
|
Quantitative
and Qualitative Disclosures about Market Risk
|
25
- 26
|
Item
4.
|
Controls
and Procedures
|
27
|
PART
II
|
||
Item
1.
|
Legal
Proceedings
|
27
|
Item
1A.
|
Risk
Factors
|
27
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
27
|
Item
3.
|
Defaults
Upon Senior Securities
|
27
|
Item
4.
|
Reserved
|
27
|
Item
5.
|
Other
Information
|
27
|
Item
6.
|
Exhibits
|
27
|
Form
10-Q Signature Page
|
28
|
(Dollars in thousands)
|
March 31,
|
December 31,
|
||||||
2010
|
2009
|
|||||||
Assets
|
||||||||
Cash
and cash equivalents
|
$ | 10,338 | $ | 12,379 | ||||
Investment
securities:
|
||||||||
Available-for-sale,
at fair value
|
160,673 | 161,628 | ||||||
Other
securities
|
8,031 | 7,991 | ||||||
Loans,
net
|
343,978 | 342,738 | ||||||
Loans
held for sale
|
6,064 | 4,703 | ||||||
Premises
and equipment, net
|
15,658 | 15,877 | ||||||
Goodwill
|
12,894 | 12,894 | ||||||
Other
intangible assets, net
|
2,328 | 2,481 | ||||||
Bank
owned life insurance
|
12,670 | 12,548 | ||||||
Real
estate owned
|
3,083 | 1,129 | ||||||
Accrued
interest and other assets
|
10,332 | 9,799 | ||||||
Total
assets
|
$ | 586,049 | $ | 584,167 | ||||
Liabilities
and Stockholders’ Equity
|
||||||||
Liabilities:
|
||||||||
Deposits:
|
||||||||
Non-interest
bearing demand
|
$ | 56,089 | $ | 54,799 | ||||
Money
market and NOW
|
168,791 | 162,449 | ||||||
Savings
|
31,609 | 29,010 | ||||||
Time,
$100,000 and greater
|
50,446 | 48,422 | ||||||
Time,
other
|
139,647 | 143,915 | ||||||
Total
deposits
|
446,582 | 438,595 | ||||||
Federal
Home Loan Bank borrowings
|
50,947 | 56,004 | ||||||
Other
borrowings
|
26,684 | 26,179 | ||||||
Accrued
interest, taxes, and other liabilities
|
7,372 | 9,494 | ||||||
Total
liabilities
|
531,585 | 530,272 | ||||||
Commitments
and contingencies
|
||||||||
Stockholders’
equity:
|
||||||||
Preferred
stock, $0.01 par, 200,000 shares authorized; none issued
|
- | - | ||||||
Common
stock, $0.01 par, 7,500,000 shares authorized; 2,504,265 and 2,489,779
shares issued at March 31, 2010 and December 31, 2009,
respectively
|
25 | 25 | ||||||
Additional
paid-in capital
|
25,057 | 24,844 | ||||||
Retained
earnings
|
28,191 | 27,523 | ||||||
Accumulated
other comprehensive income
|
1,191 | 1,503 | ||||||
Total
stockholders’ equity
|
54,464 | 53,895 | ||||||
Total
liabilities and stockholders’ equity
|
$ | 586,049 | $ | 584,167 |
(Dollars in thousands, except per share amounts)
|
Three months ended March 31,
|
|||||||
2010
|
2009
|
|||||||
Interest
income:
|
||||||||
Loans:
|
||||||||
Taxable
|
$ | 4,792 | $ | 5,133 | ||||
Tax-exempt
|
78 | 49 | ||||||
Investment
securities:
|
||||||||
Taxable
|
794 | 1,116 | ||||||
Tax-exempt
|
627 | 609 | ||||||
Other
|
1 | 3 | ||||||
Total
interest income
|
6,292 | 6,910 | ||||||
Interest
expense:
|
||||||||
Deposits
|
1,039 | 1,639 | ||||||
Borrowings
|
685 | 879 | ||||||
Total
interest expense
|
1,724 | 2,518 | ||||||
Net
interest income
|
4,568 | 4,392 | ||||||
Provision
for loan losses
|
700 | 300 | ||||||
Net
interest income after provision for loan losses
|
3,868 | 4,092 | ||||||
Non-interest
income:
|
||||||||
Fees
and service charges
|
1,005 | 956 | ||||||
Gains
on sales of loans, net
|
511 | 708 | ||||||
Bank
owned life insurance
|
124 | 123 | ||||||
Other
|
125 | 113 | ||||||
Total
non-interest income
|
1,765 | 1,900 | ||||||
Investment
securities gains (losses), net:
|
||||||||
Impairment
losses on investment securities
|
- | (850 | ) | |||||
Less
noncredit-related losses
|
- | 523 | ||||||
Net
impairment losses
|
- | (327 | ) | |||||
Gains
on sales of investment securities
|
563 | - | ||||||
Investment
securities gains (losses), net
|
563 | (327 | ) | |||||
Non-interest
expense:
|
||||||||
Compensation
and benefits
|
2,324 | 2,177 | ||||||
Occupancy
and equipment
|
719 | 651 | ||||||
Federal
deposit insurance premiums
|
179 | 33 | ||||||
Data
processing
|
208 | 190 | ||||||
Amortization
of intangibles
|
179 | 187 | ||||||
Professional
fees
|
134 | 172 | ||||||
Advertising
|
118 | 121 | ||||||
Other
|
947 | 924 | ||||||
Total
non-interest expense
|
4,808 | 4,455 | ||||||
Earnings
before income taxes
|
1,388 | 1,210 | ||||||
Income
tax expense
|
245 | 201 | ||||||
Net
earnings
|
$ | 1,143 | $ | 1,009 | ||||
Earnings
per share:
|
||||||||
Basic
|
$ | 0.46 | $ | 0.40 | ||||
Diluted
|
$ | 0.46 | $ | 0.40 | ||||
Dividends
per share
|
$ | 0.19 | $ | 0.18 |
(Dollars in thousands)
|
Three months ended March 31,
|
|||||||
2010
|
2009
|
|||||||
Net
cash used in operating activities
|
$ | (2,013 | ) | $ | (8,164 | ) | ||
Cash
flows from investing activities:
|
||||||||
Net
(increase) decrease in loans
|
(4,154 | ) | 9,811 | |||||
Maturities
and prepayments of investment securities
|
8,789 | 13,087 | ||||||
Purchases
of investment securities
|
(18,058 | ) | (25,919 | ) | ||||
Proceeds
from sale of investment securities
|
10,097 | - | ||||||
Proceeds
from sales of foreclosed assets
|
142 | 2 | ||||||
Purchases
of premises and equipment, net
|
(26 | ) | (78 | ) | ||||
Net
cash used in investing activities
|
(3,210 | ) | (3,097 | ) | ||||
Cash
flows from financing activities:
|
||||||||
Net
increase in deposits
|
7,987 | 17,667 | ||||||
Federal
Home Loan Bank advance repayments
|
(5,009 | ) | (9 | ) | ||||
Change
in Federal Home Loan Bank line of credit, net
|
- | (6,000 | ) | |||||
Other
borrowings, net
|
505 | 632 | ||||||
Proceeds
from issuance of common stock under stock option plans
|
143 | - | ||||||
Excess
tax benefit related to stock option plans
|
31 | - | ||||||
Payment
of dividends
|
(475 | ) | (451 | ) | ||||
Purchase
of treasury stock
|
- | (12 | ) | |||||
Net
cash provided by financing activities
|
3,182 | 11,827 | ||||||
Net
(decrease) increase in cash and cash equivalents
|
(2,041 | ) | 566 | |||||
Cash
and cash equivalents at beginning of year
|
12,379 | 13,788 | ||||||
Cash
and cash equivalents at end of year
|
$ | 10,338 | $ | 14,354 | ||||
Supplemental
disclosure of cash flow information:
|
||||||||
Cash
paid during the year for income taxes
|
$ | 450 | $ | (13 | ) | |||
Cash
paid during the year for interest
|
1,838 | 2,498 | ||||||
Supplemental
schedule of noncash investing and financing activities:
|
||||||||
Transfer
of loans to real estate owned
|
$ | 2,095 | $ | 486 |
(Dollars in thousands, except per share amounts)
|
Common
stock
|
Additional
paid-in
capital
|
Retained
earnings
|
Treasury
stock
|
Accumulated other
comprehensive
income
|
Total
|
||||||||||||||||||
Balance
at December 31, 2008
|
$ | 24 | $ | 23,873 | $ | 27,819 | $ | (935 | ) | $ | 625 | $ | 51,406 | |||||||||||
Comprehensive
income:
|
||||||||||||||||||||||||
Net
earnings
|
- | - | 1,009 | - | - | 1,009 | ||||||||||||||||||
Change
in fair value of investment securities available-for-sale, net of
tax
|
- | - | - | - | (180 | ) | (180 | ) | ||||||||||||||||
Total
comprehensive income
|
829 | |||||||||||||||||||||||
Dividends
paid ($0.18 per share)
|
- | - | (451 | ) | - | - | (451 | ) | ||||||||||||||||
Stock
based compensation
|
- | 39 | - | - | - | 39 | ||||||||||||||||||
Purchase
of 800 treasury shares
|
- | - | - | (12 | ) | - | (12 | ) | ||||||||||||||||
Balance
at March 31, 2009
|
$ | 24 | $ | 23,912 | $ | 28,377 | $ | (947 | ) | $ | 445 | $ | 51,811 | |||||||||||
Balance
at December 31, 2009
|
$ | 25 | $ | 24,844 | $ | 27,523 | $ | - | $ | 1,503 | $ | 53,895 | ||||||||||||
Comprehensive
income:
|
||||||||||||||||||||||||
Net
earnings
|
- | - | 1,143 | - | - | 1,143 | ||||||||||||||||||
Change
in fair value of investment securities available-for-sale, net of
tax
|
- | - | - | - | (312 | ) | (312 | ) | ||||||||||||||||
Total
comprehensive income
|
831 | |||||||||||||||||||||||
Dividends
paid ($0.19 per share)
|
- | - | (475 | ) | - | - | (475 | ) | ||||||||||||||||
Stock
based compensation
|
- | 39 | - | - | - | 39 | ||||||||||||||||||
Exercise
of stock options, 14,486 shares, including excess tax benefit of
$31
|
- | 174 | - | - | - | 174 | ||||||||||||||||||
Balance
at March 31, 2010
|
$ | 25 | $ | 25,057 | $ | 28,191 | $ | - | $ | 1,191 | $ | 54,464 |
1.
|
Interim
Financial Statements
|
2.
|
Goodwill
and Other Intangible Assets
|
Three months ended March 31,
|
||||||||||||||||
(Dollars in thousands)
|
2010
|
2009
|
||||||||||||||
Fair value at
acquisition
|
Accumulated
Amortization
|
Fair value at
acquisition
|
Accumulated
Amortization
|
|||||||||||||
Balance
at beginning of period
|
$ | 5,482 | $ | (3,767 | ) | $ | 5,396 | $ | (3,159 | ) | ||||||
Additions
|
- | - | - | - | ||||||||||||
Adjustments
to prior estimates
|
(37 | ) | - | - | - | |||||||||||
Amortization
|
- | (129 | ) | - | (155 | ) | ||||||||||
Balance
at end of period
|
$ | 5,445 | $ | (3,896 | ) | $ | 5,396 | $ | (3,314 | ) |
Three months ended March 31,
|
||||||||||||||||
(Dollars in thousands)
|
2010
|
2009
|
||||||||||||||
Cost
|
Accumulated
Amortization
|
Cost
|
Accumulated
Amortization
|
|||||||||||||
Balance
at beginning of period
|
$ | 1,447 | $ | (681 | ) | $ | 772 | $ | (602 | ) | ||||||
Additions
|
63 | - | 155 | - | ||||||||||||
Prepayments/maturities
|
(14 | ) | 14 | (34 | ) | 34 | ||||||||||
Amortization
|
- | (50 | ) | - | (32 | ) | ||||||||||
Balance
at end of period
|
$ | 1,496 | $ | (717 | ) | $ | 893 | $ | (600 | ) |
Year
|
Amount (in thousands)
|
|||
Remainder
of 2010
|
$ | 526 | ||
2011
|
610 | |||
2012
|
514 | |||
2013
|
430 | |||
2014
|
173 | |||
Thereafter
|
75 |
3.
|
Investments
|
As of March 31, 2010
|
||||||||||||||||
Gross
|
Gross
|
|||||||||||||||
Amortized
|
unrealized
|
unrealized
|
Estimated
|
|||||||||||||
(Dollars in thousands)
|
cost
|
gains
|
losses
|
fair value
|
||||||||||||
U.
S. federal agency obligations
|
$ | 25,616 | $ | 270 | $ | (20 | ) | $ | 25,866 | |||||||
Municipal
obligations, tax exempt
|
66,274 | 1,800 | (215 | ) | 67,859 | |||||||||||
Municipal
obligations, taxable
|
1,366 | - | (9 | ) | 1,357 | |||||||||||
Mortgage-backed
securities
|
51,256 | 1,043 | (58 | ) | 52,241 | |||||||||||
Common
stocks
|
762 | 287 | (10 | ) | 1,039 | |||||||||||
Pooled
trust preferred securities
|
1,524 | - | (1,210 | ) | 314 | |||||||||||
Certificates
of deposit
|
11,997 | - | - | 11,997 | ||||||||||||
Total
|
$ | 158,795 | $ | 3,400 | $ | (1,522 | ) | $ | 160,673 | |||||||
As of December 31, 2009
|
||||||||||||||||
Gross
|
Gross
|
|||||||||||||||
Amortized
|
unrealized
|
unrealized
|
Estimated
|
|||||||||||||
(Dollars
in thousands)
|
cost
|
gains
|
losses
|
fair value
|
||||||||||||
U.
S. federal agency obligations
|
$ | 18,734 | $ | 356 | $ | - | $ | 19,090 | ||||||||
Municipal
obligations, tax exempt
|
67,149 | 1,938 | (228 | ) | 68,859 | |||||||||||
Municipal
obligations, taxable
|
1,366 | - | (23 | ) | 1,343 | |||||||||||
Mortgage-backed
securities
|
63,265 | 1,532 | (102 | ) | 64,695 | |||||||||||
Common
stocks
|
693 | 191 | (19 | ) | 865 | |||||||||||
Pooled
trust preferred securities
|
1,528 | - | (1,267 | ) | 261 | |||||||||||
Certificates
of deposit
|
6,515 | - | - | 6,515 | ||||||||||||
Total
|
$ | 159,250 | $ | 4,017 | $ | (1,639 | ) | $ | 161,628 |
As of March 31, 2010
|
||||||||||||||||||||||||||||
(Dollars in thousands)
|
Less than 12 months
|
12 months or longer
|
Total
|
|||||||||||||||||||||||||
No. of
|
Fair
|
Unrealized
|
Fair
|
Unrealized
|
Fair
|
Unrealized
|
||||||||||||||||||||||
securities
|
value
|
losses
|
value
|
losses
|
value
|
losses
|
||||||||||||||||||||||
U.S.
federal agency obligations
|
6 | $ | 10,415 | $ | (20 | ) | $ | - | $ | - | $ | 10,415 | $ | (20 | ) | |||||||||||||
Municipal
obligations, tax exempt
|
26 | 7,980 | (156 | ) | 721 | (59 | ) | 8,701 | (215 | ) | ||||||||||||||||||
Municipal
obligations, taxable
|
1 | 996 | (9 | ) | - | - | 996 | (9 | ) | |||||||||||||||||||
Mortgage-backed
securities
|
7 | 8,134 | (58 | ) | - | - | 8,134 | (58 | ) | |||||||||||||||||||
Common
stocks
|
3 | 25 | (2 | ) | 1 | (8 | ) | 26 | (10 | ) | ||||||||||||||||||
Pooled
trust preferred securities
|
2 | - | - | 314 | (1,210 | ) | 314 | (1,210 | ) | |||||||||||||||||||
Total
|
45 | $ | 27,550 | $ | (245 | ) | $ | 1,036 | $ | (1,277 | ) | $ | 28,586 | $ | (1,522 | ) | ||||||||||||
As
of December 31, 2009
|
||||||||||||||||||||||||||||
(Dollars
in thousands)
|
Less
than 12 months
|
12
months or longer
|
Total
|
|||||||||||||||||||||||||
No.
of
|
Fair
|
Unrealized
|
Fair
|
Unrealized
|
Fair
|
Unrealized
|
||||||||||||||||||||||
securities
|
value
|
losses
|
value
|
losses
|
value
|
losses
|
||||||||||||||||||||||
Municipal
obligations, tax exempt
|
24 | $ | 7,765 | $ | (167 | ) | $ | 780 | $ | (61 | ) | $ | 8,545 | $ | (228 | ) | ||||||||||||
Municipal
obligations, taxable
|
2 | 1,233 | (23 | ) | - | - | 1,233 | (23 | ) | |||||||||||||||||||
Mortgage-backed
securities
|
6 | 8,140 | (101 | ) | 44 | (1 | ) | 8,184 | (102 | ) | ||||||||||||||||||
Common
stocks
|
4 | 59 | (19 | ) | - | - | 59 | (19 | ) | |||||||||||||||||||
Pooled
trust preferred securities
|
3 | - | - | 261 | (1,267 | ) | 261 | (1,267 | ) | |||||||||||||||||||
Total
|
39 | $ | 17,197 | $ | (310 | ) | $ | 1,085 | $ | (1,329 | ) | $ | 18,282 | $ | (1,639 | ) |
|
Three months ending March 31,
|
|||||||
(Dollars
in thousands)
|
2010
|
2009
|
||||||
Beginning
balance
|
$ | 961 | $ | - | ||||
Additional
credit losses:
|
||||||||
Securities
with no previous other than temporary impairment
|
- | 327 | ||||||
Securities
with previous other than temporary impairments
|
- | - | ||||||
Ending
balance
|
$ | 961 | $ | 327 |
(Dollars in thousands)
|
Amortized
|
Estimated
|
||||||
cost
|
fair value
|
|||||||
Due
in less than one year
|
$ | 27,831 | $ | 25,804 | ||||
Due
after one year but within five years
|
31,026 | 31,713 | ||||||
Due
after five years
|
47,920 | 49,876 | ||||||
Mortgage-backed
securities and common stocks
|
52,018 | 53,280 | ||||||
Total
|
$ | 158,795 | $ | 160,673 |
(Dollars in thousands)
|
Three months ended March 31,
|
|||||||
2010
|
2009
|
|||||||
Realized
gains
|
$ | 563 | $ | - | ||||
Realized
losses
|
- | - | ||||||
Total
|
$ | 563 | $ | - |
4.
|
Loans
and Allowance for Loan Losses
|
(Dollars in thousands)
|
March 31,
|
December 31,
|
||||||
2010
|
2009
|
|||||||
Real
estate loans:
|
||||||||
One-to-four
family residential
|
$ | 97,762 | $ | 98,333 | ||||
Commercial
|
105,963 | 106,470 | ||||||
Construction
and land
|
34,190 | 36,864 | ||||||
Commercial
loans
|
104,439 | 98,213 | ||||||
Consumer
loans
|
7,261 | 7,884 | ||||||
Total
gross loans
|
349,615 | 347,764 | ||||||
Deferred
loan fees/(costs) and loans in process
|
400 | 442 | ||||||
Allowance
for loan losses
|
(6,037 | ) | (5,468 | ) | ||||
Loans,
net
|
$ | 343,978 | $ | 342,738 | ||||
Percent of total
|
||||||||
Real
estate loans:
|
||||||||
One-to-four
family residential
|
27.9 | % | 28.3 | % | ||||
Commercial
|
30.3 | % | 30.6 | % | ||||
Construction
and land
|
9.8 | % | 10.6 | % | ||||
Commercial
loans
|
29.9 | % | 28.2 | % | ||||
Consumer
loans
|
2.1 | % | 2.3 | % | ||||
Total
gross loans
|
100.0 | % | 100.0 | % |
(Dollars in thousands)
|
Three months ended March 31,
|
|||||||
2010
|
2009
|
|||||||
Beginning
balance
|
$ | 5,468 | $ | 3,871 | ||||
Provision
for loan losses
|
700 | 300 | ||||||
Charge-offs
|
(147 | ) | (82 | ) | ||||
Recoveries
|
16 | 218 | ||||||
Ending
balance
|
$ | 6,037 | $ | 4,307 |
(Dollars in thousands)
|
March 31
|
December 31,
|
||||||
2010
|
2009
|
|||||||
Real
estate loans:
|
||||||||
One-to-four
family residential
|
$ | 970 | $ | 1,146 | ||||
Commercial
|
2,706 | 1,475 | ||||||
Construction
and land
|
5,241 | 6,402 | ||||||
Commercial
loans
|
2,822 | 2,785 | ||||||
Consumer
loans
|
36 | 22 | ||||||
Total
non-accrual loans
|
$ | 11,775 | $ | 11,830 |
March 31,
|
December 31,
|
|||||||
(Dollars
in thousands)
|
2010
|
2009
|
||||||
Total
non-accrual loans
|
$ | 11,775 | $ | 11,830 | ||||
Accruing
loans over 90 days past due
|
- | - | ||||||
Nonperforming
investments, at fair value
|
314 | 261 | ||||||
Real
estate owned
|
3,083 | 1,129 | ||||||
Total
nonperforming assets
|
$ | 15,172 | $ | 13,220 | ||||
Total
nonperforming loans to total loans, net
|
3.4 | % | 3.5 | % | ||||
Total
nonperforming assets to total assets
|
2.6 | % | 2.3 | % | ||||
Allowance
for loan losses to gross loans outstanding
|
1.7 | % | 1.6 | % | ||||
Allowance
for loan losses to nonperforming loans
|
51.3 | % | 46.2 | % |
(Dollars in thousands)
|
March 31,
|
December 31,
|
||||||
2010
|
2009
|
|||||||
Real
estate loans:
|
||||||||
One-to-four
family residential
|
$ | 970 | $ | 1,146 | ||||
Commercial
|
2,706 | 1,475 | ||||||
Construction
and land
|
5,241 | 6,402 | ||||||
Commercial
loans
|
2,822 | 2,785 | ||||||
Consumer
loans
|
36 | 22 | ||||||
Total
impaired loans
|
$ | 11,775 | $ | 11,830 | ||||
Impaired
loans for which an allowance has been provided
|
$ | 9,046 | $ | 10,620 | ||||
Impaired
loans for which no allowance has been provided
|
2,729 | 1,210 | ||||||
Allowance
related to impaired loans
|
$ | 3,430 | $ | 2,770 |
5.
|
Earnings
per Share
|
(Dollars in thousands, except per share amounts)
|
Three months ended March 31,
|
|||||||
2010
|
2009
|
|||||||
Net
earnings available to common shareholders
|
$ | 1,143 | $ | 1,009 | ||||
Weighted
average common shares outstanding - basic
|
2,489,779 | 2,490,564 | ||||||
Assumed
exercise of stock options
|
2,163 | 5,352 | ||||||
Weighted
average common shares outstanding - diluted
|
2,491,942 | 2,495,916 | ||||||
Earnings
per share (1):
|
||||||||
Basic
|
$ | 0.46 | $ | 0.40 | ||||
Diluted
|
$ | 0.46 | $ | 0.40 |
6.
|
Comprehensive
Income
|
(Dollars in thousands)
|
Three months ended March 31,
|
|||||||
2010
|
2009
|
|||||||
Net
earnings
|
$ | 1,143 | $ | 1,009 | ||||
Unrealized
holding gains (losses) on available-for-sale securities for which a
portion of an other-than-temporary impairment has been recorded in
earnings
|
57 | (125 | ) | |||||
Net
unrealized holding gains (losses) on all other available-for-sale
securities
|
6 | (513 | ) | |||||
Less
reclassification adjustment for (gains) losses included in
earnings
|
(563 | ) | 327 | |||||
Net
unrealized losses
|
(500 | ) | (311 | ) | ||||
Income
tax benefit
|
(188 | ) | (131 | ) | ||||
Total
comprehensive income
|
$ | 831 | $ | 829 |
7.
|
Fair
Value of Financial Instruments and Fair Value
Measurements
|
|
•
Level 1: Unadjusted quoted prices in active markets that are
accessible at the measurement date for identical, unrestricted assets or
liabilities.
|
|
•
Level 2: Quoted prices for similar assets in active markets,
quoted prices in markets that are not active or quoted prices that contain
observable inputs such as yield curves, volatilities, prepayment speeds
and other inputs derived from market
data.
|
|
•
Level 3: Quoted prices or valuation techniques that require
inputs that are both significant to the fair value measurement and
unobservable.
|
(Dollars in thousands)
|
March 31, 2010
|
December 31, 2009
|
||||||||||||||
Carrying
|
Estimated
|
Carrying
|
Estimated
|
|||||||||||||
amount
|
fair value
|
amount
|
fair value
|
|||||||||||||
Financial
assets:
|
||||||||||||||||
Cash
and cash equivalents
|
$ | 10,338 | $ | 10,338 | $ | 12,379 | $ | 12,379 | ||||||||
Investment
securities:
|
||||||||||||||||
Available-for-sale
|
160,673 | 160,673 | 161,628 | 161,628 | ||||||||||||
Other
securities
|
8,031 | 8,031 | 7,991 | 7,991 | ||||||||||||
Loans,
net
|
343,978 | 345,806 | 342,738 | 343,671 | ||||||||||||
Loans
held for sale
|
6,064 | 6,189 | 4,703 | 4,718 | ||||||||||||
Mortgage
servicing rights
|
779 | 2,362 | 766 | 2,188 | ||||||||||||
Accrued
interest receivable
|
$ | 2,893 | $ | 2,893 | $ | 2,702 | $ | 2,702 | ||||||||
Financial
liabilities:
|
||||||||||||||||
Non-maturity
deposits
|
$ | 256,489 | $ | 256,489 | $ | 246,258 | $ | 246,258 | ||||||||
Time
deposits
|
190,093 | 191,264 | 192,337 | 193,707 | ||||||||||||
FHLB
borrowings
|
50,947 | 53,086 | 56,004 | 58,174 | ||||||||||||
Other
borrowings
|
26,684 | 25,025 | 26,179 | 24,537 | ||||||||||||
Derivative
financial instruments
|
23 | 23 | 84 | 84 | ||||||||||||
Accrued
interest payable
|
$ | 914 | $ | 914 | $ | 1,028 | $ | 1,028 |
(Dollars
in thousands)
|
As of March 31, 2010
|
|||||||||||||||
Fair value hierarchy
|
||||||||||||||||
Total
|
Level 1
|
Level 2
|
Level 3
|
|||||||||||||
Assets:
|
||||||||||||||||
Cash
and cash equivalents
|
$ | 10,338 | $ | 10,338 | $ | - | $ | - | ||||||||
Available-for-sale
securities
|
||||||||||||||||
U.
S. federal agency obligations
|
25,866 | - | 25,866 | - | ||||||||||||
Municipal
obligations, tax exempt
|
67,859 | - | 67,859 | - | ||||||||||||
Municipal
obligations, taxable
|
1,357 | - | 1,357 | - | ||||||||||||
Mortgage-backed
securities
|
52,241 | - | 52,241 | - | ||||||||||||
Common
stocks
|
1,039 | 979 | 60 | - | ||||||||||||
Pooled
trust preferred securities
|
314 | - | - | 314 | ||||||||||||
Certificates
of deposit
|
11,997 | - | 11,997 | - | ||||||||||||
Liabilities:
|
||||||||||||||||
Derivative
financial instruments
|
$ | 23 | $ | - | $ | - | $ | 23 | ||||||||
As of December 31, 2009
|
||||||||||||||||
Fair value hierarchy
|
||||||||||||||||
Total
|
Level 1
|
Level 2
|
Level 3
|
|||||||||||||
Assets:
|
||||||||||||||||
Cash
and cash equivalents
|
$ | 12,379 | $ | 12,379 | $ | - | $ | - | ||||||||
Available-for-sale
securities
|
||||||||||||||||
U.
S. federal agency obligations
|
19,090 | - | 19,090 | - | ||||||||||||
Municipal
obligations, tax exempt
|
68,859 | - | 68,859 | - | ||||||||||||
Municipal
obligations, taxable
|
1,343 | - | 1,343 | - | ||||||||||||
Mortgage-backed
securities
|
64,695 | - | 64,695 | - | ||||||||||||
Common
stocks
|
865 | 805 | 60 | - | ||||||||||||
Pooled
trust preferred securities
|
261 | - | - | 261 | ||||||||||||
Certificates
of deposit
|
6,515 | - | 6,515 | - | ||||||||||||
Liabilities:
|
||||||||||||||||
Derivative
financial instruments
|
$ | 84 | $ | - | $ | - | $ | 84 |
(Dollars in thousands)
|
Derivative
|
|||||||
Available-for
|
financial
|
|||||||
sale-securities
|
instruments
|
|||||||
Level
3 asset (liability) fair value at December 31, 2009
|
$ | 261 | $ | (84 | ) | |||
Transfers
into Level 3
|
- | - | ||||||
Payments
applied to reduce carrying value
|
(4 | ) | - | |||||
Total
gains (losses):
|
||||||||
Included
in earnings
|
- | 61 | ||||||
Included
in other comprehensive income
|
57 | - | ||||||
Level
3 asset (liability) fair value at March 31, 2010
|
$ | 314 | $ | (23 | ) |
(Dollars in thousands)
|
As of March 31 ,2010
|
|||||||||||||||||||
Fair value hierarchy
|
Total gains
|
|||||||||||||||||||
Total
|
Level 1
|
Level 2
|
Level 3
|
/ (losses)
|
||||||||||||||||
Assets:
|
||||||||||||||||||||
Other
investment securities
|
$ | 8,031 | $ | - | $ | - | $ | 8,031 | $ | - | ||||||||||
Impaired
loans
|
8,345 | - | - | 8,345 | (698 | ) | ||||||||||||||
Loans
held for sale
|
6,189 | - | 6,189 | - | - | |||||||||||||||
Mortgage
servicing rights
|
2,362 | - | - | 2,362 | - | |||||||||||||||
Other
real estate owned
|
$ | 3,083 | $ | - | $ | - | $ | 3,083 | $ | - | ||||||||||
(Dollars
in thousands)
|
As of December 31 ,2009
|