SOUTHSIDE BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
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TEXAS
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75-1848732
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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1201 S. Beckham, Tyler, Texas
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75701
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer o
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Accelerated filer x
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Non-accelerated filer o
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Smaller reporting company o
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(Do not check if a smaller reporting company)
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PART I. FINANCIAL INFORMATION
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1 | ||
35 | ||
52 | ||
53 | ||
PART II. OTHER INFORMATION
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53 | ||
54 | ||
54 | ||
54 | ||
54 | ||
54 | ||
54 | ||
56 | ||
57 | ||
EXHIBIT 31.1 – CERTIFICATION PURSUANT TO SECTION 302
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EXHIBIT 31.2 – CERTIFICATION PURSUANT TO SECTION 302
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EXHIBIT 32 – CERTIFICATION PURSUANT TO SECTION 906
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ITEM 1.
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FINANCIAL STATEMENTS
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March 31,
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December 31,
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|||||||
ASSETS
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2012
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2011
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||||||
Cash and due from banks
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$ | 42,997 | $ | 40,989 | ||||
Interest earning deposits
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3,211 | 2,249 | ||||||
Total cash and cash equivalents
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46,208 | 43,238 | ||||||
Investment securities:
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||||||||
Available for sale, at estimated fair value
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291,928 | 282,956 | ||||||
Held to maturity, at amortized cost
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1,010 | 1,496 | ||||||
Mortgage-backed and related securities:
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||||||||
Available for sale, at estimated fair value
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1,133,701 | 716,126 | ||||||
Securities carried at fair value through income
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– | 647,759 | ||||||
Held to maturity, at amortized cost
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349,248 | 365,631 | ||||||
FHLB stock, at cost
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32,407 | 33,869 | ||||||
Other investments, at cost
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2,064 | 2,064 | ||||||
Loans held for sale
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1,902 | 3,552 | ||||||
Loans:
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||||||||
Loans
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1,140,893 | 1,087,230 | ||||||
Less: allowance for loan losses
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(20,074 | ) | (18,540 | ) | ||||
Net Loans
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1,120,819 | 1,068,690 | ||||||
Premises and equipment, net
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50,381 | 50,595 | ||||||
Goodwill
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22,034 | 22,034 | ||||||
Other intangible assets, net
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467 | 522 | ||||||
Interest receivable
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13,935 | 19,426 | ||||||
Deferred tax asset
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2,953 | – | ||||||
Unsettled trades to sell securities
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104,065 | – | ||||||
Other assets
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44,322 | 45,859 | ||||||
TOTAL ASSETS
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$ | 3,217,444 | $ | 3,303,817 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
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||||||||
Deposits:
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||||||||
Noninterest bearing
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$ | 558,196 | $ | 505,594 | ||||
Interest bearing
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1,752,256 | 1,816,077 | ||||||
Total deposits
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2,310,452 | 2,321,671 | ||||||
Short-term obligations:
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||||||||
Federal funds purchased and repurchase agreements
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1,926 | 2,945 | ||||||
FHLB advances
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171,864 | 361,811 | ||||||
Other obligations
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219 | 219 | ||||||
Total short-term obligations
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174,009 | 364,975 | ||||||
Long-term obligations:
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||||||||
FHLB advances
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281,618 | 260,724 | ||||||
Long-term debt
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60,311 | 60,311 | ||||||
Total long-term obligations
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341,929 | 321,035 | ||||||
Deferred tax liability
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– | 3,458 | ||||||
Unsettled trades to purchase securities
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96,171 | 1,196 | ||||||
Other liabilities
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35,004 | 32,555 | ||||||
TOTAL LIABILITIES
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2,957,565 | 3,044,890 | ||||||
Off-Balance-Sheet Arrangements, Commitments and Contingencies (Note 10)
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||||||||
Shareholders' equity:
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||||||||
Common stock – ($1.25 par, 40,000,000 shares authorized, 19,359,425 shares issued in 2012 (including 827,828 shares declared on March 29, 2012 as a stock dividend) and 18,517,101 shares issued in 2011)
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24,199 | 23,146 | ||||||
Paid-in capital
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193,553 | 176,791 | ||||||
Retained earnings
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62,339 | 72,646 | ||||||
Treasury stock (2,023,838 shares at cost)
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(28,377 | ) | (28,377 | ) | ||||
Accumulated other comprehensive income
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8,165 | 14,721 | ||||||
TOTAL SHAREHOLDERS’ EQUITY
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259,879 | 258,927 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
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$ | 3,217,444 | $ | 3,303,817 |
Three Months Ended
March 31,
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2012
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2011
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|||||||
Interest income
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||||||||
Loans
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$ | 16,770 | $ | 17,271 | ||||
Investment securities – taxable
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31 | 18 | ||||||
Investment securities – tax exempt
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2,667 | 3,229 | ||||||
Mortgage-backed and related securities
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12,163 | 11,297 | ||||||
FHLB stock and other investments
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79 | 80 | ||||||
Other interest earning assets
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6 | 10 | ||||||
Total interest income
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31,716 | 31,905 | ||||||
Interest expense
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||||||||
Deposits
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3,395 | 4,036 | ||||||
Short-term obligations
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1,592 | 1,729 | ||||||
Long-term obligations
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2,733 | 3,881 | ||||||
Total interest expense
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7,720 | 9,646 | ||||||
Net interest income
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23,996 | 22,259 | ||||||
Provision for loan losses
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3,052 | 2,138 | ||||||
Net interest income after provision for loan losses
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20,944 | 20,121 | ||||||
Noninterest income
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||||||||
Deposit services
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3,748 | 3,879 | ||||||
Gain on sale of securities available for sale
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5,972 | 1,551 | ||||||
(Loss) gain on sale of securities carried at fair value through income
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(485 | ) | 254 | |||||
Total other-than-temporary impairment losses
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– | – | ||||||
Portion of loss recognized in other comprehensive income (before taxes)
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(141 | ) | – | |||||
Net impairment losses recognized in earnings
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(141 | ) | – | |||||
Fair value gain – securities
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– | 1,627 | ||||||
FHLB advance option impairment charges
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(472 | ) | – | |||||
Gain on sale of loans
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131 | 283 | ||||||
Trust income
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677 | 651 | ||||||
Bank owned life insurance income
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266 | 286 | ||||||
Other
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1,111 | 1,105 | ||||||
Total noninterest income
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10,807 | 9,636 | ||||||
Noninterest expense
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||||||||
Salaries and employee benefits
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11,833 | 11,691 | ||||||
Occupancy expense
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1,758 | 1,721 | ||||||
Equipment expense
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510 | 493 | ||||||
Advertising, travel & entertainment
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604 | 553 | ||||||
ATM and debit card expense
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279 | 215 | ||||||
Director fees
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268 | 191 | ||||||
Supplies
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159 | 224 | ||||||
Professional fees
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551 | 555 | ||||||
Postage
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175 | 179 | ||||||
Telephone and communications
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406 | 337 | ||||||
FDIC Insurance
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470 | 763 | ||||||
Other
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1,509 | 1,810 | ||||||
Total noninterest expense
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18,522 | 18,732 | ||||||
Income before income tax expense
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13,229 | 11,025 | ||||||
Provision for income tax expense
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3,090 | 1,786 | ||||||
Net income
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10,139 | 9,239 | ||||||
Less: Net income attributable to the noncontrolling interest
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– | (865 | ) | |||||
Net income attributable to Southside Bancshares, Inc.
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$ | 10,139 | $ | 8,374 | ||||
Earnings per common share – basic
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$ | 0.58 | $ | 0.49 | ||||
Earnings per common share – diluted
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$ | 0.58 | $ | 0.49 | ||||
Dividends paid per common share
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$ | 0.18 | $ | 0.17 |
Three Months Ended
March 31,
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2012
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2011
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Net income
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$ | 10,139 | $ | 9,239 | ||||
Other comprehensive (loss) income:
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Unrealized holding (losses) gains on available for sale securities during the period
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(4,745 | ) | 6,154 | |||||
Reclassification adjustment for gains on sales of available for sale securities included in net income
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(5,972 | ) | (1,551 | ) | ||||
Reclassification of other-than-temporary impairment charges on available for sale securities included in net income
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141 | – | ||||||
Amortization of net actuarial loss, included in net periodic benefit cost
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499 | 366 | ||||||
Amortization of prior service credit included in net periodic benefit cost
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(10 | ) | (11 | ) | ||||
Other comprehensive (loss) income
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(10,087 | ) | 4,958 | |||||
Income tax benefit (expense) related to other items of comprehensive income
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3,531 | (1,735 | ) | |||||
Other comprehensive income (loss), net of tax | (6,556 | ) | 3,223 | |||||
Comprehensive income
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$ | 3,583 | $ | 12,462 |
(UNAUDITED)
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Accu-
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|||||||||||||||||||||||||||
(in thousands, except share amounts)
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mulated-
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|||||||||||||||||||||||||||
Common
Stock
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Paid In
Capital
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Retained
Earnings
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Treasury
Stock
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Other
Compre-
hensive
Income
(Loss)
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Noncon-
trolling
Interest
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Total
Equity
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||||||||||||||||||||||
Balance at December 31, 2010
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$ | 22,075 | $ | 162,877 | $ | 64,179 | $ | (28,377 | ) | $ | (6,293 | ) | $ | 1,113 | $ | 215,574 | ||||||||||||
Net Income
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8,374 | 865 | 9,239 | |||||||||||||||||||||||||
Other comprehensive income
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3,223 | 3,223 | ||||||||||||||||||||||||||
Issuance of common stock (14,538 shares)
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18 | 274 | 292 | |||||||||||||||||||||||||
Tax benefit of incentive stock options
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2 | 2 | ||||||||||||||||||||||||||
Capital distribution to noncontrolling interest shareholders
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(115 | ) | (115 | ) | ||||||||||||||||||||||||
Dividends paid on common stock ($0.17 per share)
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(2,658 | ) | (2,658 | ) | ||||||||||||||||||||||||
Stock dividend declared
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988 | 15,121 | (16,109 | ) | – | |||||||||||||||||||||||
Balance at March 31, 2011
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$ | 23,081 | $ | 178,274 | $ | 53,786 | $ | (28,377 | ) | $ | (3,070 | ) | $ | 1,863 | $ | 225,557 | ||||||||||||
Balance at December 31, 2011
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$ | 23,146 | $ | 176,791 | $ | 72,646 | $ | (28,377 | ) | $ | 14,721 | $ | – | $ | 258,927 | |||||||||||||
Net Income
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10,139 | 10,139 | ||||||||||||||||||||||||||
Other comprehensive loss
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(6,556 | ) | (6,556 | ) | ||||||||||||||||||||||||
Issuance of common stock (14,496 shares)
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18 | 282 | 300 | |||||||||||||||||||||||||
Stock compensation expense
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39 | 39 | ||||||||||||||||||||||||||
Dividends paid on common stock ($0.18 per share)
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(2,970 | ) | (2,970 | ) | ||||||||||||||||||||||||
Stock dividend declared
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1,035 | 16,441 | (17,476 | ) | – | |||||||||||||||||||||||
Balance at March 31, 2012
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$ | 24,199 | $ | 193,553 | $ | 62,339 | $ | (28,377 | ) | $ | 8,165 | $ | – | $ | 259,879 |
Three Months Ended
March 31,
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2012
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2011
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|||||||
OPERATING ACTIVITIES:
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Net income
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$ | 10,139 | $ | 9,239 | ||||
Adjustments to reconcile net income to net cash provided by operations:
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||||||||
Depreciation
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870 | 806 | ||||||
Amortization of premium
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10,366 | 8,708 | ||||||
Accretion of discount and loan fees
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(1,129 | ) | (1,171 | ) | ||||
Provision for loan losses
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3,052 | 2,138 | ||||||
Stock compensation expense
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39 | – | ||||||
Deferred tax (benefit) expense
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(2,880 | ) | 308 | |||||
Loss (gain) on sale of securities carried at fair value through income
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485 | (254 | ) | |||||
Gain on sale of securities available for sale
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(5,972 | ) | (1,551 | ) | ||||
Net other-than-temporary impairment losses
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141 | – | ||||||
Fair value gain – securities
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– | (1,627 | ) | |||||
FHLB advance option impairment charges
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472 | – | ||||||
Loss on retirement of assets
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– | 90 | ||||||
Impairment on other real estate owned
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– | 130 | ||||||
Net change in:
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||||||||
Interest receivable
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5,491 | 2,818 | ||||||
Other assets
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991 | (2,299 | ) | |||||
Interest payable
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(289 | ) | (409 | ) | ||||
Other liabilities
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3,227 | 1,356 | ||||||
Loans held for sale
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1,650 | 3,918 | ||||||
Net cash provided by operating activities
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26,653 | 22,200 | ||||||
INVESTING ACTIVITIES:
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Securities held to maturity:
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||||||||
Purchases
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– | (5,301 | ) | |||||
Maturities, calls and principal repayments
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15,365 | 12,554 | ||||||
Securities available for sale:
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||||||||
Purchases
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(618,587 | ) | (252,881 | ) | ||||
Sales
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127,298 | 169,172 | ||||||
Maturities, calls and principal repayments
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58,500 | 79,645 | ||||||
Securities carried at fair value through income:
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||||||||
Purchases
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(57,606 | ) | (130,064 | ) | ||||
Sales
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664,224 | 12,983 | ||||||
Maturities, calls and principal repayments
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24,872 | 3,812 | ||||||
Proceeds from redemption of FHLB stock
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8,533 | 9,738 | ||||||
Purchases of FHLB stock and other investments
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(7,071 | ) | (4,242 | ) | ||||
Net (increase) decrease in loans
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(55,281 | ) | 10,529 | |||||
Purchases of premises and equipment
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(656 | ) | (1,092 | ) | ||||
Proceeds from sales of repossessed assets
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1,002 | 1,517 | ||||||
Net cash provided by (used in) investing activities
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160,593 | (93,630 | ) |
Three Months Ended
March 31,
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||||||||
2012
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2011
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|||||||
FINANCING ACTIVITIES:
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||||||||
Net increase in demand and savings accounts
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71,978 | 44,367 | ||||||
Net (decrease) increase in certificates of deposit
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(83,512 | ) | 26,827 | |||||
Net decrease in federal funds purchased and repurchase agreements
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(1,019 | ) | (863 | ) | ||||
Proceeds from FHLB advances
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2,964,409 | 1,074,136 | ||||||
Repayment of FHLB advances
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(3,133,462 | ) | (1,100,011 | ) | ||||
Net capital distributions to noncontrolling interest in consolidated entities
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– | (115 | ) | |||||
Tax benefit of incentive stock options
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– | 2 | ||||||
Proceeds from the issuance of common stock
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300 | 292 | ||||||
Dividends paid
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(2,970 | ) | (2,658 | ) | ||||
Net cash (used in) provided by financing activities
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(184,276 | ) | 41,977 | |||||
Net increase (decrease) in cash and cash equivalents
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2,970 | (29,453 | ) | |||||
Cash and cash equivalents at beginning of period
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43,238 | 79,073 | ||||||
Cash and cash equivalents at end of period
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$ | 46,208 | $ | 49,620 | ||||
SUPPLEMENTAL DISCLOSURES FOR CASH FLOW INFORMATION:
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||||||||
Interest paid
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$ | 8,009 | $ | 10,055 | ||||
Income taxes paid
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$ | 2,000 | $ | – | ||||
SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES:
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||||||||
Acquisition of other repossessed assets and real estate through foreclosure
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$ | 872 | $ | 1,576 | ||||
Adjustment to pension liability
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$ | (489 | ) | $ | (355 | ) | ||
Declaration of 5% stock dividend
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$ | 17,476 | $ | 16,109 | ||||
Unsettled trades to purchase securities
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$ | (96,171 | ) | $ | (52,044 | ) | ||
Unsettled trades to sell securities
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$ | 104,065 | $ | – |
Three Months Ended
March 31,
|
||||||||
2012
|
2011
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|||||||
Basic and Diluted Earnings:
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||||||||
Net income – Southside Bancshares, Inc.
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$ | 10,139 | $ | 8,374 | ||||
Basic weighted-average shares outstanding
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17,324 | 17,247 | ||||||
Add: Stock options
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9 | 5 | ||||||
Diluted weighted-average shares outstanding
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17,333 | 17,252 | ||||||
Basic Earnings Per Share:
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||||||||
Net Income - Southside Bancshares, Inc.
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$ | 0.58 | $ | 0.49 | ||||
Diluted Earnings Per Share:
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||||||||
Net Income - Southside Bancshares, Inc.
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$ | 0.58 | $ | 0.49 |
Three Months Ended March 31, 2012 | ||||||||||||
Before-Tax | Tax (Expense) | Net-of-Tax | ||||||||||
Amount
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Benefit
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Amount
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||||||||||
Unrealized losses on securities: | ||||||||||||
Unrealized holding losses arising during period
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$ | (4,745 | ) | $ | 1,661 | $ | (3,084 | ) | ||||
Less: reclassification adjustment for gains included in net income
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5,972 | (2,090 | ) | 3,882 | ||||||||
Less: reclassification of other-than-temporary impairment charges on AFS securities included in net income
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(141 | ) | 49 | (92 | ) | |||||||
Net unrealized losses on securities
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(10,576 | ) | 3,702 | (6,874 | ) | |||||||
Change in pension plans
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489 | (171 | ) | 318 | ||||||||
Other comprehensive loss
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$ | (10,087 | ) | $ | 3,531 | $ | (6,556 | ) |
Three Months Ended March 31, 2011 | ||||||||||||
Before-Tax | Tax | Net-of-Tax | ||||||||||
Amount
|
Expense
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Amount
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||||||||||
Unrealized gains on securities: | ||||||||||||
Unrealized holding gains arising during period
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$ | 6,154 | $ | (2,154 | ) | $ | 4,000 | |||||
Less: reclassification adjustment for gains included in net income
|
1,551 | (543 | ) | 1,008 | ||||||||
Net unrealized gains on securities
|
4,603 | (1,611 | ) | 2,992 | ||||||||
Change in pension plans
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355 | (124 | ) | 231 | ||||||||
Other comprehensive income
|
$ | 4,958 | $ | (1,735 | ) | $ | 3,223 |
March 31, 2012
|
||||||||||||||||||||
Gross
|
Gross
|
|||||||||||||||||||
Amortized
|
Unrealized
|
Unrealized Losses
|
Estimated
|
|||||||||||||||||
AVAILABLE FOR SALE:
|
Cost
|
Gains
|
OTTI
|
Other
|
Fair Value
|
|||||||||||||||
Investment Securities:
|
||||||||||||||||||||
State and Political Subdivisions
|
$ | 267,569 | $ | 22,929 | $ | – | $ | 493 | $ | 290,005 | ||||||||||
Other Stocks and Bonds
|
4,015 | 34 | 2,126 | – | 1,923 | |||||||||||||||
Mortgage-backed Securities:
|
||||||||||||||||||||
U.S. Government Agencies
|
135,181 | 4,504 | – | 265 | 139,420 | |||||||||||||||
Government-Sponsored Enterprises
|
974,262 | 20,814 | – | 795 | 994,281 | |||||||||||||||
Total
|
$ | 1,381,027 | $ | 48,281 | $ | 2,126 | $ | 1,553 | $ | 1,425,629 |
March 31, 2012
|
||||||||||||||||||||
Gross
|
Gross
|
|||||||||||||||||||
Amortized
|
Unrealized
|
Unrealized Losses
|
Estimated
|
|||||||||||||||||
HELD TO MATURITY:
|
Cost
|
Gains
|
OTTI
|
Other
|
Fair Value
|
|||||||||||||||
Investment Securities:
|
||||||||||||||||||||
State and Political Subdivisions
|
$ | 1,010 | $ | 133 | $ | – | $ | – | $ | 1,143 | ||||||||||
Mortgage-backed Securities:
|
||||||||||||||||||||
U.S. Government Agencies
|
22,436 | 1,322 | – | – | 23,758 | |||||||||||||||
Government-Sponsored Enterprises
|
326,812 | 12,886 | – | – | 339,698 | |||||||||||||||
Total
|
$ | 350,258 | $ | 14,341 | $ | – | $ | – | $ | 364,599 |
December 31, 2011
|
||||||||||||||||||||
Gross
|
Gross
|
|||||||||||||||||||
Amortized
|
Unrealized
|
Unrealized Losses
|
Estimated
|
|||||||||||||||||
AVAILABLE FOR SALE:
|
Cost
|
Gains
|
OTTI
|
Other
|
Fair Value
|
|||||||||||||||
Investment Securities:
|
||||||||||||||||||||
State and Political Subdivisions
|
$ | 251,281 | $ | 31,221 | $ | – | $ | 45 | $ | 282,457 | ||||||||||
Other Stocks and Bonds
|
2,925 | – | 2,426 | – | 499 | |||||||||||||||
Mortgage-backed Securities:
|
||||||||||||||||||||
U.S. Government Agencies
|
99,974 | 7,158 | – | 80 | 107,052 | |||||||||||||||
Government-Sponsored Enterprises
|
589,687 | 20,127 | – | 740 | 609,074 | |||||||||||||||
Total
|
$ | 943,867 | $ | 58,506 | $ | 2,426 | $ | 865 | $ | 999,082 |
December 31, 2011
|
||||||||||||||||||||
Gross
|
Gross
|
|||||||||||||||||||
Amortized
|
Unrealized
|
Unrealized Losses
|
Estimated
|
|||||||||||||||||
HELD TO MATURITY:
|
Cost
|
Gains
|
OTTI
|
Other
|
Fair Value
|
|||||||||||||||
Investment Securities:
|
||||||||||||||||||||
State and Political Subdivisions
|
$ | 1,010 | $ | 196 | $ | – | $ | – | $ | 1,206 | ||||||||||
Other Stocks and Bonds
|
486 | 15 | – | – | 501 | |||||||||||||||
Mortgage-backed Securities:
|
||||||||||||||||||||
U.S. Government Agencies
|
22,999 | 1,159 | – | 43 | 24,115 | |||||||||||||||
Government-Sponsored Enterprises
|
342,632 | 14,848 | – | 11 | 357,469 | |||||||||||||||
Total
|
$ | 367,127 | $ | 16,218 | $ | – | $ | 54 | $ | 383,291 |
March 31,
|
December 31,
|
|||||||||||
2012
|
2011
|
2010
|
||||||||||
Mortgage-backed Securities:
|
||||||||||||
U.S. Government Agencies
|
$ | – | $ | 30,413 | $ | 5,392 | ||||||
Government-Sponsored Enterprises
|
– | 617,346 | 66,784 | |||||||||
Total
|
$ | – | $ | 647,759 | $ | 72,176 |
Three Months Ended March 31,
|
||||||||
2012
|
2011
|
|||||||
Net (loss) gain on sales transactions
|
$ | (485 | ) | $ | 254 | |||
Net mark-to-market gains (losses)
|
– | 1,627 | ||||||
Net (loss) gain on securities carried at fair value through income
|
$ | (485 | ) | $ | 1,881 |
Less Than 12 Months
|
More Than 12 Months
|
Total
|
||||||||||||||||||||||
Fair Value
|
Unrealized
Loss
|
Fair Value
|
Unrealized
Loss
|
Fair Value
|
Unrealized
Loss
|
|||||||||||||||||||
As of March 31, 2012:
|
||||||||||||||||||||||||
Available for Sale
|
||||||||||||||||||||||||
State and Political Subdivisions
|
$ | 27,995 | $ | 493 | $ | – | $ | – | $ | 27,995 | $ | 493 | ||||||||||||
Other Stocks and Bonds
|
– | – | 658 | 2,126 | 658 | 2,126 | ||||||||||||||||||
Mortgage-Backed Securities
|
226,272 | 1,016 | 4,107 | 44 | 230,379 | 1,060 | ||||||||||||||||||
Total
|
$ | 254,267 | $ | 1,509 | $ | 4,765 | $ | 2,170 | $ | 259,032 | $ | 3,679 | ||||||||||||
As of December 31, 2011:
|
||||||||||||||||||||||||
Available for Sale
|
||||||||||||||||||||||||
State and Political Subdivisions
|
$ | 1,668 | $ | 42 | $ | 307 | $ | 3 | $ | 1,975 | $ | 45 | ||||||||||||
Other Stocks and Bonds
|
– | – | 499 | 2,426 | 499 | 2,426 | ||||||||||||||||||
Mortgage-Backed Securities
|
148,171 | 754 | 5,322 | 66 | 153,493 | 820 | ||||||||||||||||||
Total
|
$ | 149,839 | $ | 796 | $ | 6,128 | $ | 2,495 | $ | 155,967 | $ | 3,291 | ||||||||||||
Held to Maturity
|
||||||||||||||||||||||||
Mortgage-Backed Securities
|
$ | 8,918 | $ | 54 | $ | – | $ | – | $ | 8,918 | $ | 54 | ||||||||||||
Total
|
$ | 8,918 | $ | 54 | $ | – | $ | – | $ | 8,918 | $ | 54 |
TRUP
|
Par
|
Credit
Loss
|
Amortized Cost
|
Fair Value
|
Tranche
|
Credit Rating
|
|||||||||||||||||
1 | $ | 2,000 | $ | 1,216 | $ | 784 | $ | 138 | C1 |
Ca
|
|||||||||||||
2 | 2,000 | 550 | 1,450 | 344 | B1 | C | |||||||||||||||||
3 | 2,000 | 1,450 | 550 | 176 | B2 | C | |||||||||||||||||
$ | 6,000 | $ | 3,216 | $ | 2,784 | $ | 658 |
Three Months Ended March 31, 2012
|
||||||||||||
Impairment
Related to
Credit Loss
|
Impairment
Related to All
Other Factors
|
Total
Impairment
|
||||||||||
Balance, beginning of the period
|
$ | 3,075 | $ | 2,694 | $ | 5,769 | ||||||
Charges on securities for which other-than-temporary impairment charges were not previously recognized
|
– | – | – | |||||||||
Additional charges on securities for which other-than-temporary impairment charges were previously recognized
|
141 | (141 | ) | – | ||||||||
Balance, end of the period
|
$ | 3,216 | $ | 2,553 | $ | 5,769 |
Three Months Ended March 31,
|
||||||||
|
2012
|
2011
|
||||||
U.S. Treasury
|
|
$
|
–
|
$
|
1
|
|||
State and Political Subdivisions
|
|
2,674
|
3,237
|
|||||
Other Stocks and Bonds
|
|
24
|
9
|
|||||
Mortgage-backed Securities
|
12,163
|
11,297
|
||||||
Total interest income on securities
|
$
|
14,861
|
$
|
14,544
|
March 31, 2012
|
||||||||
Amortized Cost
|
Fair Value
|
|||||||
Available for sale securities:
|
(in thousands)
|
|||||||
Investment Securities
|
||||||||
Due in one year or less
|
$ | 2,245 | $ | 2,266 | ||||
Due after one year through five years
|
8,906 | 9,267 | ||||||
Due after five years through ten years
|
36,440 | 38,645 | ||||||
Due after ten years
|
223,993 | 241,750 | ||||||
271,584 | 291,928 | |||||||
Mortgage-backed securities
|
1,109,443 | 1,133,701 | ||||||
Total
|
$ | 1,381,027 | $ | 1,425,629 |
March 31, 2012
|
||||||||
Amortized Cost
|
Fair Value
|
|||||||
Held to maturity securities:
|
(in thousands)
|
|||||||
Investment Securities
|
||||||||
Due in one year or less
|
$ | – | $ | – | ||||
Due after one year through five years
|
– | – | ||||||
Due after five years through ten years
|
– | – | ||||||
Due after ten years
|
1,010 | 1,143 | ||||||
1,010 | 1,143 | |||||||
Mortgage-backed securities
|
349,248 | 363,456 | ||||||
Total
|
$ | 350,258 | $ | 364,599 |
5.
|
LOANS AND ALLOWANCE FOR PROBABLE LOAN LOSSES
|
March 31,
|
December 31,
|
|||||||
2012
|
2011
|
|||||||
Real Estate Loans:
|
||||||||
Construction
|
$ | 111,924 | $ | 111,361 | ||||
1-4 family residential
|
291,020 | 247,479 | ||||||
Other
|
208,536 | 206,519 | ||||||
Commercial loans
|
145,730 | 143,552 | ||||||
Municipal loans
|
206,230 | 207,261 | ||||||
Loans to individuals
|
177,453 | 171,058 | ||||||
Total loans
|
1,140,893 | 1,087,230 | ||||||
Less: Allowance for loan losses
|
20,074 | 18,540 | ||||||
Net loans
|
$ | 1,120,819 | $ | 1,068,690 |
|
·
|
Satisfactory (Rating 1 – 4) – This rating is assigned to all satisfactory loans. This category, by definition, should consist of completely acceptable credit. Credit and collateral exceptions should not be present, although their presence would not necessarily prohibit a loan from being rated Satisfactory, if deficiencies are in process of correction. These loans will not be included in the Watch List.
|
|
·
|
Satisfactory (Rating 5) – Special Treatment Required – (Pass Watch) – These loans require some degree of special treatment, but not due to credit quality. This category does not include loans specially mentioned or adversely classified by the Loan Review Officer or regulatory authorities; however, particular attention must be accorded such credits due to characteristics such as:
|
|
·
|
A lack of, or abnormally extended payment program;
|
|
·
|
A heavy degree of concentration of collateral without sufficient margin;
|
|
·
|
A vulnerability to competition through lesser or extensive financial leverage; and
|
|
·
|
A dependence on a single, or few customers, or sources of supply and materials without suitable substitutes or alternatives.
|
|
·
|
Special Mention (Rating 6) – A Special Mention asset has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the institution’s credit position at some future date. Special Mention assets are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification.
|
|
·
|
Substandard (Rating 7) – Substandard loans are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected.
|
|
·
|
Doubtful (Rating 8) – Loans classified as Doubtful have all the weaknesses inherent in those classified Substandard with the added characteristic that the weaknesses make collection or liquidation, in full, on the basis of currently known facts, conditions and values, highly questionable and improbable.
|
|
·
|
Loss (Rating 9) – Loans classified as Loss are considered uncollectible and of such little value that their continuance as bankable assets is not warranted. This classification does not mean that the loan has absolutely no recovery or salvage value but rather it is not practical or desirable to defer writing off this basically worthless asset even though partial recovery may be affected in the future.
|
|
·
|
Changes in lending policies or procedures, including underwriting, collection, charge-off, and recovery procedures;
|
|
·
|
Changes in local, regional and national economic and business conditions including entry into new markets;
|
|
·
|
Changes in the volume or type of credit extended;
|
|
·
|
Changes in the experience, ability, and depth of lending management;
|
|
·
|
Changes in the volume and severity of past due, nonaccrual, restructured, or classified loans;
|
|
·
|
Changes in loan review or Board oversight; and
|
|
·
|
Changes in the level of concentrations of credit.
|
Three Months Ended March 31, 2012
|
||||||||||||||||||||||||||||||||
Real Estate
|
||||||||||||||||||||||||||||||||
Construction
|
1-4 Family
Residential
|
Other
|
Commercial
Loans
|
Municipal
Loans
|
Loans to
Individuals
|
Unallocated
|
Total
|
|||||||||||||||||||||||||
Balance at beginning of period
|
$ | 2,620 | $ | 1,957 | $ | 3,051 | $ | 2,877 | $ | 619 | $ | 6,244 | $ | 1,172 | $ | 18,540 | ||||||||||||||||
Provision (reversal) for loan losses
|
49 | 339 | 12 | 355 | (11 | ) | 2,311 | (3 | ) | 3,052 | ||||||||||||||||||||||
Loans charged off
|
(8 | ) | (11 | ) | – | (88 | ) | – | (2,123 | ) | – | (2,230 | ) | |||||||||||||||||||
Recoveries of loans charged off
|
21 | 5 | 2 | 198 | – | 486 | – | 712 | ||||||||||||||||||||||||
Balance at end of period
|
$ | 2,682 | $ | 2,290 | $ | 3,065 | $ | 3,342 | $ | 608 | $ | 6,918 | $ | 1,169 | $ | 20,074 |
Three Months Ended March 31, 2011
|
||||||||||||||||||||||||||||||||
Real Estate
|
||||||||||||||||||||||||||||||||
Construction
|
1-4 Family
Residential
|
Other
|
Commercial
Loans
|
Municipal
Loans
|
Loans to
Individuals
|
Unallocated
|
Total
|
|||||||||||||||||||||||||
Balance at beginning of period
|
$ | 2,585 | $ | 1,988 | $ | 3,354 | $ | 3,746 | $ | 607 | $ | 7,978 | $ | 453 | $ | 20,711 | ||||||||||||||||
Provision (reversal) for loan losses
|
247 | 74 | (148 | ) | 190 | (2 | ) | 1,634 | 143 | 2,138 | ||||||||||||||||||||||
Loans charged off
|
– | (319 | ) | (80 | ) | (550 | ) | – | (3,099 | ) | – | (4,048 | ) | |||||||||||||||||||
Recoveries of loans charged off
|
– | 65 | 195 | 111 | – | 608 | – | 979 | ||||||||||||||||||||||||
Balance at end of period
|
$ | 2,832 | $ | 1,808 | $ | 3,321 | $ | 3,497 | $ | 605 | $ | 7,121 | $ | 596 | $ | 19,780 |
As of March 31, 2012
|
||||||||||||||||||||||||||||||||
Real Estate
|
||||||||||||||||||||||||||||||||
Construction
|
1-4 Family
Residential
|
Other
|
Commercial
Loans
|
Municipal
Loans
|
Loans to
Individuals
|
Unallocated
|
Total
|
|||||||||||||||||||||||||
Ending balance – individually evaluated for impairment
|
$ | 931 | $ | 908 | $ | 510 | $ | 1,551 | $ | 102 | $ | 455 | $ | – | $ | 4,457 | ||||||||||||||||
Ending balance – collectively evaluated for impairment
|
1,751 | 1,382 | 2,555 | 1,791 | 506 | 6,463 | 1,169 | 15,617 | ||||||||||||||||||||||||
Balance at end of period
|
$ | 2,682 | $ | 2,290 | $ | 3,065 | $ | 3,342 | $ | 608 | $ | 6,918 | $ | 1,169 | $ | 20,074 |
As of December 31, 2011
|
||||||||||||||||||||||||||||||||
Real Estate
|
||||||||||||||||||||||||||||||||
Construction
|
1-4 Family
Residential
|
Other
|
Commercial
Loans
|
Municipal
Loans
|
Loans to
Individuals
|
Unallocated
|
Total
|
|||||||||||||||||||||||||
Ending balance – individually evaluated for impairment
|
$ | 888 | $ | 788 |