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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Middleburg Financial Corp. | NASDAQ:MBRG | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 40.04 | 39.29 | 40.53 | 0 | 01:00:00 |
|
Virginia
(State or other jurisdiction of
incorporation or organization)
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54-1696103
(I.R.S. Employer
Identification No.)
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111 West Washington Street
Middleburg, Virginia
(Address of principal executive offices)
|
20117
(Zip Code)
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Yes
þ
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No
o
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Yes
þ
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No
o
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Large accelerated filer
o
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Accelerated filer
þ
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Non-accelerated filer
o
(Do not check if a smaller reporting company)
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Smaller reporting company
o
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Yes
o
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No
þ
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ITEM 1.
|
FINANCIAL STATEMENTS
|
MIDDLEBURG FINANCIAL CORPORATION AND SUBSIDIARIES
|
|||||||
CONSOLIDATED BALANCE SHEETS
|
|||||||
(Dollars in thousands, except for per share data)
|
|||||||
|
(Unaudited)
|
|
|
||||
|
September 30,
|
|
December 31,
|
||||
|
2016
|
|
2015
|
||||
ASSETS
|
|
|
|
||||
Cash and due from banks
|
$
|
5,557
|
|
|
$
|
5,489
|
|
Interest bearing deposits with other banks
|
50,234
|
|
|
33,739
|
|
||
Total cash and cash equivalents
|
55,791
|
|
|
39,228
|
|
||
Securities held to maturity, fair value of $10,957 and $4,163, respectively
|
10,727
|
|
|
4,207
|
|
||
Securities available for sale, at fair value
|
352,618
|
|
|
374,571
|
|
||
Restricted securities, at cost
|
5,562
|
|
|
6,411
|
|
||
Loans, net of allowance for loan losses of $11,200 and $11,046, respectively
|
834,690
|
|
|
794,635
|
|
||
Loans held for sale
|
669
|
|
|
—
|
|
||
Premises and equipment, net
|
18,755
|
|
|
19,531
|
|
||
Goodwill and identified intangibles, net
|
3,507
|
|
|
3,636
|
|
||
Other real estate owned, net of valuation allowance
|
3,387
|
|
|
3,345
|
|
||
Bank owned life insurance
|
23,761
|
|
|
23,273
|
|
||
Accrued interest receivable and other assets
|
25,535
|
|
|
26,026
|
|
||
TOTAL ASSETS
|
$
|
1,335,002
|
|
|
$
|
1,294,863
|
|
LIABILITIES
|
|
|
|
|
|
||
Deposits:
|
|
|
|
|
|
||
Non-interest bearing demand deposits
|
$
|
267,017
|
|
|
$
|
235,897
|
|
Savings and interest bearing demand deposits
|
562,954
|
|
|
560,328
|
|
||
Time deposits
|
261,534
|
|
|
244,575
|
|
||
Total deposits
|
1,091,505
|
|
|
1,040,800
|
|
||
Securities sold under agreements to repurchase
|
31,540
|
|
|
26,869
|
|
||
Federal Home Loan Bank borrowings
|
63,500
|
|
|
85,000
|
|
||
Subordinated notes
|
5,155
|
|
|
5,155
|
|
||
Accrued interest payable and other liabilities
|
14,382
|
|
|
13,485
|
|
||
TOTAL LIABILITIES
|
1,206,082
|
|
|
1,171,309
|
|
||
Commitments and contingencies
|
|
|
|
||||
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
||
Common stock ($2.50 par value; 20,000,000 shares authorized; 7,103,358 and 7,085,217 issued and outstanding, respectively)
|
17,331
|
|
|
17,330
|
|
||
Capital surplus
|
44,186
|
|
|
44,155
|
|
||
Retained earnings
|
64,600
|
|
|
60,392
|
|
||
Accumulated other comprehensive income
|
2,803
|
|
|
1,677
|
|
||
TOTAL SHAREHOLDERS' EQUITY
|
128,920
|
|
|
123,554
|
|
||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
|
$
|
1,335,002
|
|
|
$
|
1,294,863
|
|
MIDDLEBURG FINANCIAL CORPORATION AND SUBSIDIARIES
|
|||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME
|
|||||||||||||||
(Dollars in thousands, except for per share data)
|
|||||||||||||||
|
(Unaudited)
|
||||||||||||||
|
For the Three Months Ended
September 30,
|
|
For the Nine Months Ended
September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
INTEREST INCOME
|
|
|
|
|
|
|
|
||||||||
Interest and fees on loans
|
$
|
8,624
|
|
|
$
|
8,227
|
|
|
$
|
25,397
|
|
|
$
|
24,484
|
|
Interest and dividends on securities
|
|
|
|
|
|
|
|
|
|
||||||
Taxable
|
1,585
|
|
|
1,938
|
|
|
5,650
|
|
|
5,636
|
|
||||
Tax-exempt
|
411
|
|
|
444
|
|
|
1,303
|
|
|
1,354
|
|
||||
Dividends
|
82
|
|
|
71
|
|
|
238
|
|
|
196
|
|
||||
Interest on deposits with other banks and federal funds sold
|
35
|
|
|
23
|
|
|
123
|
|
|
84
|
|
||||
Total interest and dividend income
|
10,737
|
|
|
10,703
|
|
|
32,711
|
|
|
31,754
|
|
||||
INTEREST EXPENSE
|
|
|
|
|
|
|
|
|
|
||||||
Interest on deposits
|
909
|
|
|
877
|
|
|
2,670
|
|
|
2,580
|
|
||||
Interest on securities sold under agreements to repurchase
|
1
|
|
|
2
|
|
|
2
|
|
|
64
|
|
||||
Interest on FHLB borrowings and other debt
|
210
|
|
|
165
|
|
|
704
|
|
|
507
|
|
||||
Total interest expense
|
1,120
|
|
|
1,044
|
|
|
3,376
|
|
|
3,151
|
|
||||
NET INTEREST INCOME
|
9,617
|
|
|
9,659
|
|
|
29,335
|
|
|
28,603
|
|
||||
Provision for (recovery of) loan losses
|
(297
|
)
|
|
(432
|
)
|
|
53
|
|
|
(407
|
)
|
||||
NET INTEREST INCOME AFTER PROVISION FOR (RECOVERY OF) LOAN LOSSES
|
9,914
|
|
|
10,091
|
|
|
29,282
|
|
|
29,010
|
|
||||
NON-INTEREST INCOME
|
|
|
|
|
|
|
|
|
|
||||||
Service charges on deposit accounts
|
303
|
|
|
275
|
|
|
868
|
|
|
803
|
|
||||
Trust services income
|
1,168
|
|
|
1,168
|
|
|
3,458
|
|
|
3,629
|
|
||||
ATM fee income, net
|
190
|
|
|
209
|
|
|
565
|
|
|
593
|
|
||||
Gains on sales of loans held for sale, net
|
11
|
|
|
9
|
|
|
23
|
|
|
3
|
|
||||
Gains on sales of securities available for sale, net
|
138
|
|
|
—
|
|
|
511
|
|
|
138
|
|
||||
Commissions on investment sales
|
133
|
|
|
132
|
|
|
417
|
|
|
415
|
|
||||
Bank owned life insurance
|
165
|
|
|
166
|
|
|
488
|
|
|
489
|
|
||||
Other operating income
|
136
|
|
|
212
|
|
|
492
|
|
|
1,194
|
|
||||
Total non-interest income
|
2,244
|
|
|
2,171
|
|
|
6,822
|
|
|
7,264
|
|
||||
NON-INTEREST EXPENSE
|
|
|
|
|
|
|
|
|
|
||||||
Salaries and employee benefits
|
4,727
|
|
|
4,793
|
|
|
14,152
|
|
|
14,544
|
|
||||
Occupancy and equipment
|
1,262
|
|
|
1,323
|
|
|
3,937
|
|
|
4,054
|
|
||||
Amortization
|
210
|
|
|
160
|
|
|
628
|
|
|
478
|
|
||||
Computer operations
|
605
|
|
|
524
|
|
|
1,923
|
|
|
1,536
|
|
||||
Other real estate owned, net
|
183
|
|
|
193
|
|
|
339
|
|
|
285
|
|
||||
Other taxes
|
237
|
|
|
230
|
|
|
709
|
|
|
684
|
|
||||
Federal deposit insurance
|
215
|
|
|
188
|
|
|
606
|
|
|
583
|
|
||||
Audits and exams
|
136
|
|
|
156
|
|
|
453
|
|
|
472
|
|
||||
Other operating expenses
|
1,599
|
|
|
1,524
|
|
|
4,192
|
|
|
4,083
|
|
||||
Total non-interest expense
|
9,174
|
|
|
9,091
|
|
|
26,939
|
|
|
26,719
|
|
||||
Income before income taxes
|
2,984
|
|
|
3,171
|
|
|
9,165
|
|
|
9,555
|
|
||||
Income tax expense
|
720
|
|
|
850
|
|
|
2,193
|
|
|
2,506
|
|
||||
NET INCOME
|
$
|
2,264
|
|
|
$
|
2,321
|
|
|
$
|
6,972
|
|
|
$
|
7,049
|
|
Earnings per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.32
|
|
|
$
|
0.32
|
|
|
$
|
0.98
|
|
|
$
|
0.99
|
|
Diluted
|
$
|
0.32
|
|
|
$
|
0.32
|
|
|
$
|
0.98
|
|
|
$
|
0.98
|
|
MIDDLEBURG FINANCIAL CORPORATION AND SUBSIDIARIES
|
|||||||||||||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
|
|||||||||||||||
(Dollars in thousands)
|
|||||||||||||||
|
(Unaudited)
|
||||||||||||||
|
For the Three Months Ended
September 30,
|
|
For the Nine Months Ended
September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
2,264
|
|
|
$
|
2,321
|
|
|
$
|
6,972
|
|
|
$
|
7,049
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
||||||||
Unrealized holding gains (losses) arising during the period, net of tax, $371, ($102), ($805) and $229, respectively
|
(724
|
)
|
|
198
|
|
|
1,561
|
|
|
(446
|
)
|
||||
Reclassification adjustment for gains included in net income, net of tax, $47, $0, $174 and $47, respectively
|
(91
|
)
|
|
—
|
|
|
(337
|
)
|
|
(91
|
)
|
||||
Unrealized gains (losses) on interest rate swaps, net of tax, ($44), $66, $51 and $66, respectively
|
87
|
|
|
(128
|
)
|
|
(98
|
)
|
|
(129
|
)
|
||||
Reclassification adjustment for gain on interest rate swap ineffectiveness included in net income, net of tax, $0, $0, $0 and $2, respectively
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
||||
Total other comprehensive income (loss)
|
(728
|
)
|
|
70
|
|
|
1,126
|
|
|
(670
|
)
|
||||
Total comprehensive income
|
$
|
1,536
|
|
|
$
|
2,391
|
|
|
$
|
8,098
|
|
|
$
|
6,379
|
|
MIDDLEBURG FINANCIAL CORPORATION AND SUBSIDIARIES
|
|||||||||||||||||||
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
|
|||||||||||||||||||
(Dollars in thousands, except for per share data)
|
|||||||||||||||||||
(Unaudited)
|
|||||||||||||||||||
|
|
||||||||||||||||||
|
For the Nine Months Ended September 30, 2016 and 2015
|
||||||||||||||||||
|
Common Stock
|
|
Capital Surplus
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Income
|
|
Total
|
||||||||||
Balance December 31, 2014
|
$
|
17,494
|
|
|
$
|
44,892
|
|
|
$
|
55,854
|
|
|
$
|
3,794
|
|
|
$
|
122,034
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
—
|
|
|
—
|
|
|
7,049
|
|
|
—
|
|
|
7,049
|
|
|||||
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
(670
|
)
|
|
(670
|
)
|
|||||
Cash dividends declared ($0.33 per share)
|
—
|
|
|
—
|
|
|
(2,361
|
)
|
|
—
|
|
|
(2,361
|
)
|
|||||
Restricted stock vesting (15,692 shares)
|
39
|
|
|
(39
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Repurchase of restricted stock (4,577 shares)
|
(11
|
)
|
|
(72
|
)
|
|
—
|
|
|
—
|
|
|
(83
|
)
|
|||||
Share-based compensation
|
—
|
|
|
443
|
|
|
—
|
|
|
—
|
|
|
443
|
|
|||||
Balance September 30, 2015
|
$
|
17,522
|
|
|
$
|
45,224
|
|
|
$
|
60,542
|
|
|
$
|
3,124
|
|
|
$
|
126,412
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance December 31, 2015
|
$
|
17,330
|
|
|
$
|
44,155
|
|
|
$
|
60,392
|
|
|
$
|
1,677
|
|
|
$
|
123,554
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
6,972
|
|
|
—
|
|
|
6,972
|
|
|||||
Other comprehensive income, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
1,126
|
|
|
1,126
|
|
|||||
Cash dividends ($0.39 per share)
|
—
|
|
|
—
|
|
|
(2,764
|
)
|
|
—
|
|
|
(2,764
|
)
|
|||||
Exercise of stock options (6,650 shares)
|
16
|
|
|
76
|
|
|
—
|
|
|
—
|
|
|
92
|
|
|||||
Restricted stock vesting (33,691 shares)
|
84
|
|
|
(84
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Repurchase of restricted stock (12,958 shares)
|
(32
|
)
|
|
(224
|
)
|
|
—
|
|
|
—
|
|
|
(256
|
)
|
|||||
Share-based compensation
|
—
|
|
|
685
|
|
|
—
|
|
|
—
|
|
|
685
|
|
|||||
Repurchase of common stock (26,800 shares)
|
(67
|
)
|
|
(422
|
)
|
|
—
|
|
|
—
|
|
|
(489
|
)
|
|||||
Balance September 30, 2016
|
$
|
17,331
|
|
|
$
|
44,186
|
|
|
$
|
64,600
|
|
|
$
|
2,803
|
|
|
$
|
128,920
|
|
|
(Unaudited)
|
||||||
|
For the Nine Months Ended
|
||||||
|
September 30,
|
||||||
(Dollars in thousands)
|
2016
|
|
2015
|
||||
Cash Flows From Operating Activities
|
|
|
|
||||
Net income
|
$
|
6,972
|
|
|
$
|
7,049
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|||
Depreciation and amortization
|
1,956
|
|
|
1,736
|
|
||
Provision for (recovery of) loan losses
|
53
|
|
|
(407
|
)
|
||
Originations of mortgage loans held for sale
|
(2,301
|
)
|
|
(287
|
)
|
||
Proceeds from the sales of mortgage loans held for sale
|
1,655
|
|
|
290
|
|
||
Gains on the sales of mortgage loans held for sale, net
|
(23
|
)
|
|
(3
|
)
|
||
Gains on sales of securities available for sale, net
|
(511
|
)
|
|
(138
|
)
|
||
Losses on disposal of assets, net
|
2
|
|
|
65
|
|
||
Premium amortization on securities, net
|
3,721
|
|
|
2,937
|
|
||
Share-based compensation
|
685
|
|
|
443
|
|
||
(Gains) losses on sale of other real estate owned, net
|
(50
|
)
|
|
46
|
|
||
Valuation adjustments on other real estate owned
|
310
|
|
|
177
|
|
||
Increase in bank owned life insurance cash surrender value
|
(488
|
)
|
|
(489
|
)
|
||
Changes in assets and liabilities:
|
|
|
|
||||
Increase in other assets
|
(1,041
|
)
|
|
(1,365
|
)
|
||
Increase (decrease) in other liabilities
|
897
|
|
|
(135
|
)
|
||
Net cash provided by operating activities
|
$
|
11,837
|
|
|
$
|
9,919
|
|
Cash Flows from Investing Activities
|
|
|
|
|
|||
Proceeds from calls, principal repayments and sales of securities available for sale
|
$
|
102,599
|
|
|
$
|
82,336
|
|
Purchase of securities available for sale
|
(82,001
|
)
|
|
(110,464
|
)
|
||
Purchase of securities held to maturity
|
(6,520
|
)
|
|
—
|
|
||
(Purchase) redemption of restricted stock, net
|
849
|
|
|
(70
|
)
|
||
Purchase of bank premises and equipment, net
|
(250
|
)
|
|
(2,756
|
)
|
||
Loan originations, net
|
(5,021
|
)
|
|
(3,859
|
)
|
||
Purchases of loans
|
(40,025
|
)
|
|
(23,988
|
)
|
||
Proceeds from sales of loans
|
4,412
|
|
|
1,127
|
|
||
Proceeds from sale of other real estate owned and repossessed assets
|
224
|
|
|
766
|
|
||
Net cash used in investing activities
|
$
|
(25,733
|
)
|
|
$
|
(56,908
|
)
|
Cash Flows from Financing Activities
|
|
|
|
|
|
||
Increase in demand, interest-bearing demand and savings deposits
|
$
|
33,746
|
|
|
$
|
42,720
|
|
Increase in time deposits
|
16,959
|
|
|
553
|
|
||
Increase (decrease) in securities sold under agreements to repurchase
|
4,671
|
|
|
(14,083
|
)
|
||
Increase (decrease) in FHLB borrowings
|
(21,500
|
)
|
|
5,000
|
|
||
Payment of dividends on common stock
|
(2,764
|
)
|
|
(2,361
|
)
|
||
Proceeds from issuance of common stock, net
|
92
|
|
|
—
|
|
||
Repurchase of common stock
|
(745
|
)
|
|
(83
|
)
|
||
Net cash provided by financing activities
|
$
|
30,459
|
|
|
$
|
31,746
|
|
Increase (decrease) in cash and cash equivalents
|
16,563
|
|
|
(15,243
|
)
|
||
Cash and cash equivalents at beginning of the period
|
39,228
|
|
|
55,022
|
|
||
Cash and cash equivalents at end of the period
|
$
|
55,791
|
|
|
$
|
39,779
|
|
Supplemental Disclosures of Cash Flow Information
|
|
|
|
|
|||
Interest paid
|
$
|
3,379
|
|
|
$
|
3,158
|
|
Income taxes
|
$
|
725
|
|
|
$
|
2,560
|
|
Supplemental Disclosure of Non-Cash Transactions
|
|
|
|
|
|||
Unrealized gains (losses) on securities available for sale
|
$
|
1,855
|
|
|
$
|
(813
|
)
|
Change in fair value of interest rate swaps
|
$
|
(149
|
)
|
|
$
|
(201
|
)
|
Transfer of loans to other real estate owned
|
$
|
526
|
|
|
$
|
720
|
|
|
September 30, 2016
|
|||||||||
|
Shares
|
|
Weighted-Average Grant Date Fair Value
|
|
Aggregate Value
(in thousands)
|
|||||
Non-vested at December 31, 2015
|
153,399
|
|
|
$
|
17.17
|
|
|
|
||
Granted
|
53,500
|
|
|
20.76
|
|
|
|
|||
Vested
|
(33,691
|
)
|
|
16.49
|
|
|
|
|||
Forfeited
|
(2,250
|
)
|
|
19.91
|
|
|
|
|||
Non-vested at September 30, 2016
|
170,958
|
|
|
$
|
18.39
|
|
|
$
|
4,835
|
|
|
September 30, 2016
|
|||||||||
|
Shares
|
|
Weighted-Average Exercise Price
|
|
Aggregate Intrinsic Value
(in thousands)
|
|||||
Outstanding at December 31, 2015
|
30,012
|
|
|
$
|
14.00
|
|
|
$
|
—
|
|
Granted
|
—
|
|
|
—
|
|
|
—
|
|
||
Exercised
|
(6,650
|
)
|
|
14.00
|
|
|
—
|
|
||
Forfeited
|
—
|
|
|
—
|
|
|
—
|
|
||
Outstanding at September 30, 2016
|
23,362
|
|
|
$
|
14.00
|
|
|
$
|
334
|
|
Options exercisable at September 30, 2016
|
23,362
|
|
|
$
|
14.00
|
|
|
$
|
334
|
|
Exercise Prices
|
|
Options Outstanding
|
|
Weighted-Average Remaining Contractual Life (years)
|
|
Options Exercisable
|
||||
$
|
14.00
|
|
|
18,362
|
|
|
2.47
|
|
18,362
|
|
$
|
14.00
|
|
|
5,000
|
|
|
3.10
|
|
5,000
|
|
$
|
14.00
|
|
|
23,362
|
|
|
2.61
|
|
23,362
|
|
|
September 30, 2016
|
||||||||||||||
(Dollars in thousands)
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
||||||||
Held to Maturity
|
|
|
|
|
|
|
|
||||||||
Obligations of states and political subdivisions
|
$
|
6,477
|
|
|
$
|
180
|
|
|
$
|
—
|
|
|
$
|
6,657
|
|
Corporate securities
|
4,250
|
|
|
50
|
|
|
—
|
|
|
4,300
|
|
||||
Total
|
$
|
10,727
|
|
|
$
|
230
|
|
|
$
|
—
|
|
|
$
|
10,957
|
|
|
December 31, 2015
|
||||||||||||||
(Dollars in thousands)
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
||||||||
Held to Maturity
|
|
|
|
|
|
|
|
||||||||
Obligations of states and political subdivisions
|
$
|
1,457
|
|
|
$
|
—
|
|
|
$
|
(38
|
)
|
|
$
|
1,419
|
|
Corporate securities
|
2,750
|
|
|
24
|
|
|
(30
|
)
|
|
2,744
|
|
||||
Total
|
$
|
4,207
|
|
|
$
|
24
|
|
|
$
|
(68
|
)
|
|
$
|
4,163
|
|
|
September 30, 2016
|
||||||
(Dollars in thousands)
|
Amortized
Cost
|
|
Fair
Value
|
||||
Held to Maturity
|
|
|
|
||||
Due after five years through ten years
|
$
|
4,250
|
|
|
$
|
4,300
|
|
Due after ten years
|
6,477
|
|
|
6,657
|
|
||
Total
|
$
|
10,727
|
|
|
$
|
10,957
|
|
|
September 30, 2016
|
||||||||||||||
(Dollars in thousands)
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
||||||||
Available for Sale
|
|
|
|
|
|
|
|
||||||||
U.S. government agencies
|
$
|
69,635
|
|
|
$
|
827
|
|
|
$
|
(163
|
)
|
|
$
|
70,299
|
|
Obligations of states and political subdivisions
|
66,146
|
|
|
2,055
|
|
|
(103
|
)
|
|
68,098
|
|
||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
||||||||
Agency
|
131,134
|
|
|
3,267
|
|
|
(513
|
)
|
|
133,888
|
|
||||
Non-agency
|
11,273
|
|
|
43
|
|
|
(94
|
)
|
|
11,222
|
|
||||
Other asset backed securities
|
53,085
|
|
|
652
|
|
|
(465
|
)
|
|
53,272
|
|
||||
Corporate securities
|
16,652
|
|
|
38
|
|
|
(851
|
)
|
|
15,839
|
|
||||
Total
|
$
|
347,925
|
|
|
$
|
6,882
|
|
|
$
|
(2,189
|
)
|
|
$
|
352,618
|
|
|
December 31, 2015
|
||||||||||||||
(Dollars in thousands)
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
||||||||
Available for Sale
|
|
|
|
|
|
|
|
||||||||
U.S. government agencies
|
$
|
79,005
|
|
|
$
|
315
|
|
|
$
|
(380
|
)
|
|
$
|
78,940
|
|
Obligations of states and political subdivisions
|
74,071
|
|
|
1,956
|
|
|
(434
|
)
|
|
75,593
|
|
||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|||||||
Agency
|
129,360
|
|
|
3,046
|
|
|
(745
|
)
|
|
131,661
|
|
||||
Non-agency
|
12,782
|
|
|
33
|
|
|
(38
|
)
|
|
12,777
|
|
||||
Other asset backed securities
|
58,958
|
|
|
426
|
|
|
(603
|
)
|
|
58,781
|
|
||||
Corporate securities
|
17,557
|
|
|
22
|
|
|
(760
|
)
|
|
16,819
|
|
||||
Total
|
$
|
371,733
|
|
|
$
|
5,798
|
|
|
$
|
(2,960
|
)
|
|
$
|
374,571
|
|
|
September 30, 2016
|
||||||
(Dollars in thousands)
|
Amortized
Cost
|
|
Fair
Value
|
||||
Due in one year or less
|
$
|
580
|
|
|
$
|
583
|
|
Due after one year through five years
|
8,964
|
|
|
9,266
|
|
||
Due after five years through ten years
|
24,328
|
|
|
24,024
|
|
||
Due after ten years
|
118,561
|
|
|
120,363
|
|
||
Mortgage-backed securities
|
142,407
|
|
|
145,110
|
|
||
Other asset backed securities
|
53,085
|
|
|
53,272
|
|
||
Total
|
$
|
347,925
|
|
|
$
|
352,618
|
|
(Dollars in thousands)
|
|
Less than Twelve Months
|
|
Twelve Months or Greater
|
|
Total
|
||||||||||||||||||
September 30, 2016
|
|
Fair Value
|
|
Gross
Unrealized Losses |
|
Fair Value
|
|
Gross
Unrealized Losses |
|
Fair Value
|
|
Gross
Unrealized Losses |
||||||||||||
Available for Sale
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. government agencies
|
|
$
|
18,090
|
|
|
$
|
(99
|
)
|
|
$
|
5,052
|
|
|
$
|
(64
|
)
|
|
$
|
23,142
|
|
|
$
|
(163
|
)
|
Obligations of states and political subdivisions
|
|
1,334
|
|
|
(15
|
)
|
|
7,432
|
|
|
(88
|
)
|
|
8,766
|
|
|
(103
|
)
|
||||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Agency
|
|
17,246
|
|
|
(90
|
)
|
|
12,728
|
|
|
(423
|
)
|
|
29,974
|
|
|
(513
|
)
|
||||||
Non-agency
|
|
5,616
|
|
|
(84
|
)
|
|
1,940
|
|
|
(10
|
)
|
|
7,556
|
|
|
(94
|
)
|
||||||
Other asset backed securities
|
|
9,206
|
|
|
(178
|
)
|
|
20,487
|
|
|
(287
|
)
|
|
29,693
|
|
|
(465
|
)
|
||||||
Corporate securities
|
|
1,994
|
|
|
(60
|
)
|
|
11,266
|
|
|
(791
|
)
|
|
13,260
|
|
|
(851
|
)
|
||||||
Total
|
|
$
|
53,486
|
|
|
$
|
(526
|
)
|
|
$
|
58,905
|
|
|
$
|
(1,663
|
)
|
|
$
|
112,391
|
|
|
$
|
(2,189
|
)
|
(Dollars in thousands)
|
|
Less than Twelve Months
|
|
Twelve Months or Greater
|
|
Total
|
||||||||||||||||||
December 31, 2015
|
|
Fair Value
|
|
Gross Unrealized Losses
|
|
Fair Value
|
|
Gross Unrealized Losses
|
|
Fair Value
|
|
Gross Unrealized Losses
|
||||||||||||
Held to Maturity
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Obligations of states and political subdivisions
|
|
$
|
1,419
|
|
|
$
|
(38
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,419
|
|
|
$
|
(38
|
)
|
Corporate securities
|
|
1,970
|
|
|
(30
|
)
|
|
—
|
|
|
—
|
|
|
1,970
|
|
|
(30
|
)
|
||||||
Total
|
|
$
|
3,389
|
|
|
$
|
(68
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,389
|
|
|
$
|
(68
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Available for Sale
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. government agencies
|
|
$
|
46,000
|
|
|
$
|
(304
|
)
|
|
$
|
4,223
|
|
|
$
|
(76
|
)
|
|
$
|
50,223
|
|
|
$
|
(380
|
)
|
Obligations of states and political subdivisions
|
|
16,559
|
|
|
(324
|
)
|
|
1,082
|
|
|
(110
|
)
|
|
17,641
|
|
|
(434
|
)
|
||||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Agency
|
|
27,627
|
|
|
(402
|
)
|
|
9,911
|
|
|
(343
|
)
|
|
37,538
|
|
|
(745
|
)
|
||||||
Non-agency
|
|
7,842
|
|
|
(37
|
)
|
|
671
|
|
|
(1
|
)
|
|
8,513
|
|
|
(38
|
)
|
||||||
Other asset backed securities
|
|
25,399
|
|
|
(276
|
)
|
|
12,037
|
|
|
(327
|
)
|
|
37,436
|
|
|
(603
|
)
|
||||||
Corporate securities
|
|
10,740
|
|
|
(378
|
)
|
|
4,866
|
|
|
(382
|
)
|
|
15,606
|
|
|
(760
|
)
|
||||||
Total
|
|
$
|
134,167
|
|
|
$
|
(1,721
|
)
|
|
$
|
32,790
|
|
|
$
|
(1,239
|
)
|
|
$
|
166,957
|
|
|
$
|
(2,960
|
)
|
|
September 30, 2016
|
|
December 31, 2015
|
||||||||||
(Dollars in thousands)
|
Outstanding
Balance
|
|
Percent of
Total Portfolio
|
|
Outstanding
Balance
|
|
Percent of
Total Portfolio
|
||||||
Real estate loans:
|
|
|
|
|
|
|
|
||||||
Construction
|
$
|
32,519
|
|
|
3.8
|
%
|
|
$
|
39,673
|
|
|
4.9
|
%
|
Secured by farmland
|
16,832
|
|
|
2.0
|
|
|
19,062
|
|
|
2.4
|
|
||
Secured by 1-4 family residential
|
332,408
|
|
|
39.3
|
|
|
280,096
|
|
|
34.8
|
|
||
Other real estate loans
|
250,778
|
|
|
29.7
|
|
|
258,035
|
|
|
32.0
|
|
||
Commercial loans
|
193,826
|
|
|
22.9
|
|
|
190,482
|
|
|
23.6
|
|
||
Consumer loans
|
19,527
|
|
|
2.3
|
|
|
18,333
|
|
|
2.3
|
|
||
Total gross loans
(1)
|
$
|
845,890
|
|
|
100.0
|
%
|
|
$
|
805,681
|
|
|
100.0
|
%
|
Less allowance for loan losses
|
11,200
|
|
|
|
|
|
11,046
|
|
|
|
|||
Net loans
|
$
|
834,690
|
|
|
|
|
|
$
|
794,635
|
|
|
|
|
(1)
|
Includes net deferred loan costs and premiums of
$3.7 million
and
$3.5 million
, respectively.
|
|
September 30, 2016
|
||||||||||||||||||||||
(Dollars in thousands)
|
30-59 Days Past Due
|
|
60-89 Days Past Due
|
|
90 Days Or Greater
|
|
Total Past Due
|
|
Current
|
|
Total Loans
|
||||||||||||
Real estate loans:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Construction
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
32,519
|
|
|
$
|
32,519
|
|
Secured by farmland
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16,832
|
|
|
16,832
|
|
||||||
Secured by 1-4 family residential
|
287
|
|
|
—
|
|
|
3,319
|
|
|
3,606
|
|
|
328,802
|
|
|
332,408
|
|
||||||
Other real estate loans
|
315
|
|
|
1,089
|
|
|
148
|
|
|
1,552
|
|
|
249,226
|
|
|
250,778
|
|
||||||
Commercial loans
|
568
|
|
|
350
|
|
|
495
|
|
|
1,413
|
|
|
192,413
|
|
|
193,826
|
|
||||||
Consumer loans
|
—
|
|
|
6
|
|
|
1,871
|
|
|
1,877
|
|
|
17,650
|
|
|
19,527
|
|
||||||
Total
|
$
|
1,170
|
|
|
$
|
1,445
|
|
|
$
|
5,833
|
|
|
$
|
8,448
|
|
|
$
|
837,442
|
|
|
$
|
845,890
|
|
|
December 31, 2015
|
||||||||||||||||||||||
(Dollars in thousands)
|
30-59 Days Past Due
|
|
60-89 Days Past Due
|
|
90 Days Or Greater
|
|
Total Past Due
|
|
Current
|
|
Total Loans
|
||||||||||||
Real estate loans:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Construction
|
$
|
69
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
69
|
|
|
$
|
39,604
|
|
|
$
|
39,673
|
|
Secured by farmland
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19,062
|
|
|
19,062
|
|
||||||
Secured by 1-4 family residential
|
259
|
|
|
—
|
|
|
1,117
|
|
|
1,376
|
|
|
278,720
|
|
|
280,096
|
|
||||||
Other real estate loans
|
325
|
|
|
—
|
|
|
248
|
|
|
573
|
|
|
257,462
|
|
|
258,035
|
|
||||||
Commercial loans
|
1,242
|
|
|
15
|
|
|
31
|
|
|
1,288
|
|
|
189,194
|
|
|
190,482
|
|
||||||
Consumer loans
|
4
|
|
|
17
|
|
|
—
|
|
|
21
|
|
|
18,312
|
|
|
18,333
|
|
||||||
Total
|
$
|
1,899
|
|
|
$
|
32
|
|
|
$
|
1,396
|
|
|
$
|
3,327
|
|
|
$
|
802,354
|
|
|
$
|
805,681
|
|
|
September 30, 2016
|
|
December 31, 2015
|
||||||||||||
(Dollars in thousands)
|
Nonaccrual
|
|
Past due 90 days or more and still accruing
|
|
Nonaccrual
|
|
Past due 90 days or more and still accruing
|
||||||||
Real estate loans:
|
|
|
|
|
|
|
|
||||||||
Construction
|
$
|
29
|
|
|
$
|
11
|
|
|
$
|
204
|
|
|
$
|
—
|
|
Secured by 1-4 family residential
|
3,308
|
|
|
—
|
|
|
4,460
|
|
|
—
|
|
||||
Other real estate loans
|
1,089
|
|
|
148
|
|
|
1,186
|
|
|
248
|
|
||||
Commercial loans
|
406
|
|
|
89
|
|
|
1,036
|
|
|
30
|
|
||||
Consumer loans
|
1,871
|
|
|
—
|
|
|
1,898
|
|
|
—
|
|
||||
Total
|
$
|
6,703
|
|
|
$
|
248
|
|
|
$
|
8,784
|
|
|
$
|
278
|
|
September 30, 2016
|
|||||||||||||||||||||||||||
(Dollars in thousands)
|
Real Estate Construction
|
|
Real Estate Secured by Farmland
|
|
Real Estate Secured by 1-4 Family Residential
|
|
Other Real Estate Loans
|
|
Commercial
|
|
Consumer
|
|
Total
|
||||||||||||||
Pass
|
$
|
26,934
|
|
|
$
|
8,901
|
|
|
$
|
325,277
|
|
|
$
|
240,168
|
|
|
$
|
187,157
|
|
|
$
|
17,588
|
|
|
$
|
806,025
|
|
Special Mention
|
5,556
|
|
|
—
|
|
|
931
|
|
|
3,805
|
|
|
1,559
|
|
|
27
|
|
|
11,878
|
|
|||||||
Substandard
|
29
|
|
|
7,931
|
|
|
5,976
|
|
|
5,716
|
|
|
4,704
|
|
|
1,911
|
|
|
26,267
|
|
|||||||
Doubtful
|
—
|
|
|
—
|
|
|
126
|
|
|
1,089
|
|
|
406
|
|
|
—
|
|
|
1,621
|
|
|||||||
Loss
|
—
|
|
|
—
|
|
|
98
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
99
|
|
|||||||
Ending Balance
|
$
|
32,519
|
|
|
$
|
16,832
|
|
|
$
|
332,408
|
|
|
$
|
250,778
|
|
|
$
|
193,826
|
|
|
$
|
19,527
|
|
|
$
|
845,890
|
|
December 31, 2015
|
|||||||||||||||||||||||||||
(Dollars in thousands)
|
Real Estate Construction
|
|
Real Estate Secured by Farmland
|
|
Real Estate Secured by 1-4 Family Residential
|
|
Other Real Estate Loans
|
|
Commercial
|
|
Consumer
|
|
Total
|
||||||||||||||
Pass
|
$
|
30,114
|
|
|
$
|
10,566
|
|
|
$
|
271,721
|
|
|
$
|
243,768
|
|
|
$
|
183,532
|
|
|
$
|
16,347
|
|
|
$
|
756,048
|
|
Special Mention
|
9,024
|
|
|
—
|
|
|
896
|
|
|
7,254
|
|
|
3,638
|
|
|
42
|
|
|
20,854
|
|
|||||||
Substandard
|
535
|
|
|
8,496
|
|
|
6,818
|
|
|
5,827
|
|
|
2,301
|
|
|
1,943
|
|
|
25,920
|
|
|||||||
Doubtful
|
—
|
|
|
—
|
|
|
661
|
|
|
1,186
|
|
|
1,011
|
|
|
—
|
|
|
2,858
|
|
|||||||
Loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|||||||
Ending Balance
|
$
|
39,673
|
|
|
$
|
19,062
|
|
|
$
|
280,096
|
|
|
$
|
258,035
|
|
|
$
|
190,482
|
|
|
$
|
18,333
|
|
|
$
|
805,681
|
|
|
September 30, 2016
|
||||||||||||||||||
(Dollars in thousands)
|
Recorded Investment
|
|
Unpaid Principal Balance
|
|
Related Allowance
|
|
Average Recorded Investment
|
|
Interest Income Recognized
|
||||||||||
With no related allowance recorded:
|
|
|
|
|
|
|
|
|
|
||||||||||
Real estate loans:
|
|
|
|
|
|
|
|
|
|
||||||||||
Construction
|
$
|
30
|
|
|
$
|
30
|
|
|
$
|
—
|
|
|
$
|
31
|
|
|
$
|
—
|
|
Secured by farmland
|
7,931
|
|
|
7,931
|
|
|
—
|
|
|
7,917
|
|
|
217
|
|
|||||
Secured by 1-4 family residential
|
73
|
|
|
108
|
|
|
—
|
|
|
73
|
|
|
2
|
|
|||||
Other real estate loans
|
1,089
|
|
|
1,089
|
|
|
—
|
|
|
1,115
|
|
|
—
|
|
|||||
Commercial loans
|
879
|
|
|
879
|
|
|
—
|
|
|
885
|
|
|
15
|
|
|||||
Consumer loans
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total with no related allowance
|
$
|
10,002
|
|
|
$
|
10,037
|
|
|
$
|
—
|
|
|
$
|
10,021
|
|
|
$
|
234
|
|
With an allowance recorded:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Real estate loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Construction
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Secured by farmland
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Secured by 1-4 family residential
|
4,289
|
|
|
4,341
|
|
|
1,214
|
|
|
4,323
|
|
|
46
|
|
|||||
Other real estate loans
|
3,865
|
|
|
3,865
|
|
|
406
|
|
|
3,890
|
|
|
139
|
|
|||||
Commercial loans
|
406
|
|
|
3,406
|
|
|
190
|
|
|
708
|
|
|
—
|
|
|||||
Consumer loans
|
1,871
|
|
|
1,871
|
|
|
802
|
|
|
1,885
|
|
|
—
|
|
|||||
Total with a related allowance
|
$
|
10,431
|
|
|
$
|
13,483
|
|
|
$
|
2,612
|
|
|
$
|
10,806
|
|
|
$
|
185
|
|
Total
|
$
|
20,433
|
|
|
$
|
23,520
|
|
|
$
|
2,612
|
|
|
$
|
20,827
|
|
|
$
|
419
|
|
|
December 31, 2015
|
||||||||||||||||||
(Dollars in thousands)
|
Recorded Investment
|
|
Unpaid Principal Balance
|
|
Related Allowance
|
|
Average Recorded Investment
|
|
Interest Income Recognized
|
||||||||||
With no related allowance recorded:
|
|
|
|
|
|
|
|
|
|
||||||||||
Real estate loans:
|
|
|
|
|
|
|
|
|
|
||||||||||
Construction
|
$
|
100
|
|
|
$
|
100
|
|
|
$
|
—
|
|
|
$
|
106
|
|
|
$
|
—
|
|
Secured by farmland
|
7,903
|
|
|
7,903
|
|
|
—
|
|
|
7,903
|
|
|
237
|
|
|||||
Secured by 1-4 family residential
|
701
|
|
|
736
|
|
|
—
|
|
|
703
|
|
|
—
|
|
|||||
Other real estate loans
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Commercial loans
|
458
|
|
|
493
|
|
|
—
|
|
|
490
|
|
|
17
|
|
|||||
Consumer loans
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total with no related allowance
|
$
|
9,162
|
|
|
$
|
9,232
|
|
|
$
|
—
|
|
|
$
|
9,202
|
|
|
$
|
254
|
|
With an allowance recorded:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Real estate loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Construction
|
$
|
103
|
|
|
$
|
103
|
|
|
$
|
53
|
|
|
$
|
109
|
|
|
$
|
—
|
|
Secured by farmland
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Secured by 1-4 family residential
|
4,426
|
|
|
4,478
|
|
|
1,120
|
|
|
4,547
|
|
|
27
|
|
|||||
Other real estate loans
|
4,196
|
|
|
4,196
|
|
|
464
|
|
|
4,224
|
|
|
157
|
|
|||||
Commercial loans
|
1,059
|
|
|
4,059
|
|
|
27
|
|
|
2,315
|
|
|
100
|
|
|||||
Consumer loans
|
1,898
|
|
|
1,898
|
|
|
1,000
|
|
|
2,449
|
|
|
—
|
|
|||||
Total with a related allowance
|
$
|
11,682
|
|
|
$
|
14,734
|
|
|
$
|
2,664
|
|
|
$
|
13,644
|
|
|
$
|
284
|
|
Total
|
$
|
20,844
|
|
|
$
|
23,966
|
|
|
$
|
2,664
|
|
|
$
|
22,846
|
|
|
$
|
538
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Loans Modified as TDRs
|
||||||||||||||||||||
|
|
For the Three Months Ended September 30,
|
||||||||||||||||||||
(Dollars in thousands)
|
|
2016
|
|
2015
|
||||||||||||||||||
Class of Loan
|
|
Number of Contracts
|
|
Pre-Modification Outstanding Recorded Investment
|
|
Post-Modification Outstanding Recorded Investment
|
|
Number of Contracts
|
|
Pre-Modification Outstanding Recorded Investment
|
|
Post-Modification Outstanding Recorded Investment
|
||||||||||
Real estate loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Construction
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Secured by farmland
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Secured by 1-4 family residential
|
|
1
|
|
|
409
|
|
|
406
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Other real estate loans
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total real estate loans
|
|
1
|
|
|
$
|
409
|
|
|
$
|
406
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Commercial loans
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Consumer loans
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
|
1
|
|
|
$
|
409
|
|
|
$
|
406
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Loans Modified as TDRs
|
||||||||||||||||||||
|
|
For the Nine Months Ended September 30,
|
||||||||||||||||||||
(Dollars in thousands)
|
|
2016
|
|
2015
|
||||||||||||||||||
Class of Loan
|
|
Number of Contracts
|
|
Pre-Modification Outstanding Recorded Investment
|
|
Post-Modification Outstanding Recorded Investment
|
|
Number of Contracts
|
|
Pre-Modification Outstanding Recorded Investment
|
|
Post-Modification Outstanding Recorded Investment
|
||||||||||
Real estate loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Construction
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Secured by farmland
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
7,903
|
|
|
7,903
|
|
||||
Secured by 1-4 family residential
|
|
2
|
|
|
809
|
|
|
806
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Other real estate loans
|
|
1
|
|
|
368
|
|
|
367
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total real estate loans
|
|
3
|
|
|
$
|
1,177
|
|
|
$
|
1,173
|
|
|
1
|
|
|
$
|
7,903
|
|
|
$
|
7,903
|
|
Commercial loans
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Consumer loans
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
3,000
|
|
|
2,282
|
|
||||
Total
|
|
3
|
|
|
$
|
1,177
|
|
|
$
|
1,173
|
|
|
1
|
|
|
$
|
10,903
|
|
|
$
|
10,185
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2016
|
||||||||||||||||||||||||||
(Dollars in thousands)
|
Real Estate Construction
|
|
Real Estate Secured by Farmland
|
|
Real Estate Secured by 1-4 Family Residential
|
|
Other Real Estate Loans
|
|
Commercial
|
|
Consumer
|
|
Total
|
||||||||||||||
Allowance for loan losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance at
December 31, 2015 |
$
|
905
|
|
|
$
|
192
|
|
|
$
|
3,341
|
|
|
$
|
3,761
|
|
|
$
|
1,706
|
|
|
$
|
1,141
|
|
|
$
|
11,046
|
|
Charge-offs
|
(388
|
)
|
|
—
|
|
|
(7
|
)
|
|
(126
|
)
|
|
(31
|
)
|
|
(17
|
)
|
|
(569
|
)
|
|||||||
Recoveries
|
128
|
|
|
—
|
|
|
395
|
|
|
27
|
|
|
65
|
|
|
55
|
|
|
670
|
|
|||||||
Provision
|
238
|
|
|
(47
|
)
|
|
(112
|
)
|
|
(194
|
)
|
|
396
|
|
|
(228
|
)
|
|
53
|
|
|||||||
Balance at
September 30, 2016 |
$
|
883
|
|
|
$
|
145
|
|
|
$
|
3,617
|
|
|
$
|
3,468
|
|
|
$
|
2,136
|
|
|
$
|
951
|
|
|
$
|
11,200
|
|
Ending allowance:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ending allowance balance attributable to loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Individually evaluated for impairment
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,214
|
|
|
$
|
406
|
|
|
$
|
190
|
|
|
$
|
802
|
|
|
$
|
2,612
|
|
Collectively evaluated for impairment
|
883
|
|
|
145
|
|
|
2,403
|
|
|
3,062
|
|
|
1,946
|
|
|
149
|
|
|
8,588
|
|
|||||||
Total ending allowance balance
|
$
|
883
|
|
|
$
|
145
|
|
|
$
|
3,617
|
|
|
$
|
3,468
|
|
|
$
|
2,136
|
|
|
$
|
951
|
|
|
$
|
11,200
|
|
Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Individually evaluated for impairment
|
$
|
30
|
|
|
$
|
7,931
|
|
|
$
|
4,362
|
|
|
$
|
4,954
|
|
|
$
|
1,285
|
|
|
$
|
1,871
|
|
|
$
|
20,433
|
|
Collectively evaluated for impairment
|
32,489
|
|
|
8,901
|
|
|
328,046
|
|
|
245,824
|
|
|
192,541
|
|
|
17,656
|
|
|
825,457
|
|
|||||||
Total ending loans balance
|
$
|
32,519
|
|
|
$
|
16,832
|
|
|
$
|
332,408
|
|
|
$
|
250,778
|
|
|
$
|
193,826
|
|
|
$
|
19,527
|
|
|
$
|
845,890
|
|
|
December 31, 2015
|
||||||||||||||||||||||||||
(Dollars in thousands)
|
Real Estate Construction
|
|
Real Estate Secured by Farmland
|
|
Real Estate Secured by 1-4 Family Residential
|
|
Other Real Estate Loans
|
|
Commercial
|
|
Consumer
|
|
Total
|
||||||||||||||
Allowance for loan losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance at
December 31, 2014 |
$
|
550
|
|
|
$
|
179
|
|
|
$
|
3,966
|
|
|
$
|
3,916
|
|
|
$
|
2,354
|
|
|
$
|
821
|
|
|
$
|
11,786
|
|
Charge-offs
|
—
|
|
|
—
|
|
|
(344
|
)
|
|
(9
|
)
|
|
(3,281
|
)
|
|
(57
|
)
|
|
(3,691
|
)
|
|||||||
Recoveries
|
246
|
|
|
—
|
|
|
359
|
|
|
28
|
|
|
14
|
|
|
11
|
|
|
658
|
|
|||||||
Provision
|
109
|
|
|
13
|
|
|
(640
|
)
|
|
(174
|
)
|
|
2,619
|
|
|
366
|
|
|
2,293
|
|
|||||||
Balance at
December 31, 2015 |
$
|
905
|
|
|
$
|
192
|
|
|
$
|
3,341
|
|
|
$
|
3,761
|
|
|
$
|
1,706
|
|
|
$
|
1,141
|
|
|
$
|
11,046
|
|
Ending allowance:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ending allowance balance attributable to loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Individually evaluated for impairment
|
$
|
53
|
|
|
$
|
—
|
|
|
$
|
1,120
|
|
|
$
|
464
|
|
|
$
|
27
|
|
|
$
|
1,000
|
|
|
$
|
2,664
|
|
Collectively evaluated for impairment
|
852
|
|
|
192
|
|
|
2,221
|
|
|
3,297
|
|
|
1,679
|
|
|
141
|
|
|
8,382
|
|
|||||||
Total ending allowance balance
|
$
|
905
|
|
|
$
|
192
|
|
|
$
|
3,341
|
|
|
$
|
3,761
|
|
|
$
|
1,706
|
|
|
$
|
1,141
|
|
|
$
|
11,046
|
|
Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Individually evaluated for impairment
|
$
|
203
|
|
|
$
|
7,903
|
|
|
$
|
5,127
|
|
|
$
|
4,196
|
|
|
$
|
1,517
|
|
|
$
|
1,898
|
|
|
$
|
20,844
|
|
Collectively evaluated for impairment
|
39,470
|
|
|
11,159
|
|
|
274,969
|
|
|
253,839
|
|
|
188,965
|
|
|
16,435
|
|
|
784,837
|
|
|||||||
Total ending loans balance
|
$
|
39,673
|
|
|
$
|
19,062
|
|
|
$
|
280,096
|
|
|
$
|
258,035
|
|
|
$
|
190,482
|
|
|
$
|
18,333
|
|
|
$
|
805,681
|
|
|
September 30, 2015
|
||||||||||||||||||||||||||
(Dollars in thousands)
|
Real Estate Construction
|
|
Real Estate Secured by Farmland
|
|
Real Estate Secured by 1-4 Family Residential
|
|
Other Real Estate Loans
|
|
Commercial
|
|
Consumer
|
|
Total
|
||||||||||||||
Allowance for loan losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance at
December 31, 2014 |
$
|
550
|
|
|
$
|
179
|
|
|
$
|
3,966
|
|
|
$
|
3,916
|
|
|
$
|
2,354
|
|
|
$
|
821
|
|
|
$
|
11,786
|
|
Charge-offs
|
—
|
|
|
—
|
|
|
(100
|
)
|
|
(9
|
)
|
|
(246
|
)
|
|
(46
|
)
|
|
(401
|
)
|
|||||||
Recoveries
|
41
|
|
|
—
|
|
|
338
|
|
|
23
|
|
|
11
|
|
|
9
|
|
|
422
|
|
|||||||
Provision (recovery)
|
189
|
|
|
12
|
|
|
(369
|
)
|
|
(200
|
)
|
|
(428
|
)
|
|
389
|
|
|
(407
|
)
|
|||||||
Balance at
September 30, 2015 |
$
|
780
|
|
|
$
|
191
|
|
|
$
|
3,835
|
|
|
$
|
3,730
|
|
|
$
|
1,691
|
|
|
$
|
1,173
|
|
|
$
|
11,400
|
|
Ending allowance:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ending allowance balance attributable to loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Individually evaluated for impairment
|
$
|
57
|
|
|
$
|
—
|
|
|
$
|
1,376
|
|
|
$
|
463
|
|
|
$
|
46
|
|
|
$
|
1,020
|
|
|
$
|
2,962
|
|
Collectively evaluated for impairment
|
723
|
|
|
191
|
|
|
2,459
|
|
|
3,267
|
|
|
1,645
|
|
|
153
|
|
|
8,438
|
|
|||||||
Total ending allowance balance
|
$
|
780
|
|
|
$
|
191
|
|
|
$
|
3,835
|
|
|
$
|
3,730
|
|
|
$
|
1,691
|
|
|
$
|
1,173
|
|
|
$
|
11,400
|
|
Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Individually evaluated for impairment
|
$
|
212
|
|
|
$
|
7,903
|
|
|
$
|
5,528
|
|
|
$
|
4,220
|
|
|
$
|
768
|
|
|
$
|
2,302
|
|
|
$
|
20,933
|
|
Collectively evaluated for impairment
|
33,169
|
|
|
11,488
|
|
|
267,648
|
|
|
253,792
|
|
|
179,139
|
|
|
14,698
|
|
|
759,934
|
|
|||||||
Total ending loans balance
|
$
|
33,381
|
|
|
$
|
19,391
|
|
|
$
|
273,176
|
|
|
$
|
258,012
|
|
|
$
|
179,907
|
|
|
$
|
17,000
|
|
|
$
|
780,867
|
|
|
For the Three Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
||||||||||
|
Shares
|
|
Per Share Amount
|
|
Shares
|
|
Per Share Amount
|
||||||
Earnings per share, basic
|
7,103,235
|
|
|
$
|
0.32
|
|
|
7,162,930
|
|
|
$
|
0.32
|
|
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
|
|
|
||
Stock options
|
11,694
|
|
|
|
|
6,487
|
|
|
|
||||
Warrant
|
45,235
|
|
|
|
|
11,716
|
|
|
|
||||
Earnings per share, diluted
|
7,160,164
|
|
|
$
|
0.32
|
|
|
7,181,133
|
|
|
$
|
0.32
|
|
|
|
|
|
|
|
|
|
||||||
|
For the Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
||||||||||
|
Shares
|
|
Per Share Amount
|
|
Shares
|
|
Per Share Amount
|
||||||
Earnings per share, basic
|
7,092,131
|
|
|
$
|
0.98
|
|
|
7,146,495
|
|
|
$
|
0.99
|
|
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
|
|
|
||
Stock options
|
10,882
|
|
|
|
|
6,880
|
|
|
|
||||
Warrant
|
36,193
|
|
|
|
|
13,167
|
|
|
|
||||
Earnings per share, diluted
|
7,139,206
|
|
|
$
|
0.98
|
|
|
7,166,542
|
|
|
$
|
0.98
|
|
|
For the Three Months Ended
|
|
For the Three Months Ended
|
||||||||||||||||||||||
|
September 30, 2016
|
|
September 30, 2015
|
||||||||||||||||||||||
(In Thousands)
|
Retail
Banking
|
Wealth
Management
|
Intercompany
Eliminations
|
Consolidated
|
|
Retail
Banking
|
Wealth
Management
|
Intercompany
Eliminations
|
Consolidated
|
||||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest income
|
$
|
10,803
|
|
$
|
3
|
|
$
|
(69
|
)
|
$
|
10,737
|
|
|
$
|
10,700
|
|
$
|
3
|
|
$
|
—
|
|
$
|
10,703
|
|
Trust and investment fee income
|
—
|
|
1,208
|
|
(40
|
)
|
1,168
|
|
|
—
|
|
1,210
|
|
(42
|
)
|
1,168
|
|
||||||||
Other income
|
1,103
|
|
—
|
|
(27
|
)
|
1,076
|
|
|
1,003
|
|
—
|
|
—
|
|
1,003
|
|
||||||||
Total operating income
|
11,906
|
|
1,211
|
|
(136
|
)
|
12,981
|
|
|
11,703
|
|
1,213
|
|
(42
|
)
|
12,874
|
|
||||||||
Expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest expense
|
1,189
|
|
—
|
|
(69
|
)
|
1,120
|
|
|
1,044
|
|
—
|
|
—
|
|
1,044
|
|
||||||||
Salaries and employee benefits
|
4,146
|
|
581
|
|
—
|
|
4,727
|
|
|
4,194
|
|
599
|
|
—
|
|
4,793
|
|
||||||||
Provision for (recovery of) loan losses
|
(297
|
)
|
—
|
|
—
|
|
(297
|
)
|
|
(432
|
)
|
—
|
|
—
|
|
(432
|
)
|
||||||||
Other
|
4,286
|
|
228
|
|
(67
|
)
|
4,447
|
|
|
4,256
|
|
84
|
|
(42
|
)
|
4,298
|
|
||||||||
Total operating expenses
|
9,324
|
|
809
|
|
(136
|
)
|
9,997
|
|
|
9,062
|
|
683
|
|
(42
|
)
|
9,703
|
|
||||||||
Income before income taxes
|
2,582
|
|
402
|
|
—
|
|
2,984
|
|
|
2,641
|
|
530
|
|
—
|
|
3,171
|
|
||||||||
Income tax expense
|
567
|
|
153
|
|
—
|
|
720
|
|
|
722
|
|
128
|
|
—
|
|
850
|
|
||||||||
Net Income
|
$
|
2,015
|
|
$
|
249
|
|
$
|
—
|
|
$
|
2,264
|
|
|
$
|
1,919
|
|
$
|
402
|
|
$
|
—
|
|
$
|
2,321
|
|
Total assets
|
$
|
1,331,515
|
|
$
|
6,537
|
|
$
|
(3,050
|
)
|
$
|
1,335,002
|
|
|
$
|
1,259,205
|
|
$
|
6,615
|
|
$
|
(4,530
|
)
|
$
|
1,261,290
|
|
Capital expenditures
|
$
|
153
|
|
$
|
—
|
|
$
|
—
|
|
$
|
153
|
|
|
$
|
285
|
|
$
|
—
|
|
$
|
—
|
|
$
|
285
|
|
Goodwill and other intangibles
|
$
|
—
|
|
$
|
3,507
|
|
$
|
—
|
|
$
|
3,507
|
|
|
$
|
—
|
|
$
|
3,679
|
|
$
|
—
|
|
$
|
3,679
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
For the Nine Months Ended
|
|
For the Nine Months Ended
|
||||||||||||||||||||||
|
September 30, 2016
|
|
September 30, 2015
|
||||||||||||||||||||||
(In Thousands)
|
Retail
Banking
|
Wealth
Management
|
Intercompany
Eliminations
|
Consolidated
|
|
Retail
Banking
|
Wealth
Management
|
Intercompany
Eliminations
|
Consolidated
|
||||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest income
|
$
|
32,772
|
|
$
|
8
|
|
$
|
(69
|
)
|
$
|
32,711
|
|
|
$
|
31,746
|
|
$
|
8
|
|
$
|
—
|
|
$
|
31,754
|
|
Trust and investment fee income
|
—
|
|
3,582
|
|
(124
|
)
|
3,458
|
|
|
—
|
|
3,753
|
|
(124
|
)
|
3,629
|
|
||||||||
Other income
|
3,446
|
|
—
|
|
(82
|
)
|
3,364
|
|
|
3,635
|
|
—
|
|
—
|
|
3,635
|
|
||||||||
Total operating income
|
36,218
|
|
3,590
|
|
(275
|
)
|
39,533
|
|
|
35,381
|
|
3,761
|
|
(124
|
)
|
39,018
|
|
||||||||
Expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest expense
|
3,445
|
|
—
|
|
(69
|
)
|
3,376
|
|
|
3,151
|
|
—
|
|
—
|
|
3,151
|
|
||||||||
Salaries and employee benefits
|
12,483
|
|
1,669
|
|
—
|
|
14,152
|
|
|
12,805
|
|
1,739
|
|
—
|
|
14,544
|
|
||||||||
Provision for (recovery of) loan losses
|
53
|
|
—
|
|
—
|
|
53
|
|
|
(407
|
)
|
—
|
|
—
|
|
(407
|
)
|
||||||||
Other
|
12,299
|
|
694
|
|
(206
|
)
|
12,787
|
|
|
11,646
|
|
653
|
|
(124
|
)
|
12,175
|
|
||||||||
Total operating expenses
|
28,280
|
|
2,363
|
|
(275
|
)
|
30,368
|
|
|
27,195
|
|
2,392
|
|
(124
|
)
|
29,463
|
|
||||||||
Income before income taxes
|
7,938
|
|
1,227
|
|
—
|
|
9,165
|
|
|
8,186
|
|
1,369
|
|
—
|
|
9,555
|
|
||||||||
Income tax expense
|
1,730
|
|
463
|
|
—
|
|
2,193
|
|
|
2,063
|
|
443
|
|
—
|
|
2,506
|
|
||||||||
Net Income
|
$
|
6,208
|
|
$
|
764
|
|
$
|
—
|
|
$
|
6,972
|
|
|
$
|
6,123
|
|
$
|
926
|
|
$
|
—
|
|
$
|
7,049
|
|
Total assets
|
$
|
1,331,515
|
|
$
|
6,537
|
|
$
|
(3,050
|
)
|
$
|
1,335,002
|
|
|
$
|
1,259,205
|
|
$
|
6,615
|
|
$
|
(4,530
|
)
|
$
|
1,261,290
|
|
Capital expenditures
|
$
|
250
|
|
$
|
—
|
|
$
|
—
|
|
$
|
250
|
|
|
$
|
2,756
|
|
$
|
—
|
|
$
|
—
|
|
$
|
2,756
|
|
Goodwill and other intangibles
|
$
|
—
|
|
$
|
3,507
|
|
$
|
—
|
|
$
|
3,507
|
|
|
$
|
—
|
|
$
|
3,679
|
|
$
|
—
|
|
$
|
3,679
|
|
Level I.
|
Quoted prices are available in active markets for identical assets or liabilities as of the reported date.
|
Level II.
|
Pricing inputs are other than the quoted prices in active markets, which are either directly or indirectly observable as of the reported date. The nature of these assets and liabilities includes items for which quoted prices are available but traded less frequently and items that are fair-valued using other financial instruments, the parameters of which can be directly observed.
|
Level III.
|
Assets and liabilities that have little to no pricing observability as of the reported date. These items do not have two-way markets and are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment or estimation.
|
(Dollars in thousands)
|
|
September 30, 2016
|
||||||||||||||
Description
|
|
Total
|
|
Level I
|
|
Level II
|
|
Level III
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
U.S. government agencies
|
|
$
|
70,299
|
|
|
$
|
—
|
|
|
$
|
70,299
|
|
|
$
|
—
|
|
Obligations of states and political subdivisions
|
|
68,098
|
|
|
—
|
|
|
68,098
|
|
|
—
|
|
||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Agency
|
|
133,888
|
|
|
—
|
|
|
133,888
|
|
|
—
|
|
||||
Non-agency
|
|
11,222
|
|
|
—
|
|
|
11,222
|
|
|
—
|
|
||||
Other asset backed securities
|
|
53,272
|
|
|
—
|
|
|
53,272
|
|
|
—
|
|
||||
Corporate securities
|
|
15,839
|
|
|
—
|
|
|
15,839
|
|
|
—
|
|
||||
Interest rate swaps
|
|
287
|
|
|
—
|
|
|
287
|
|
|
—
|
|
||||
Interest rate cap
|
|
3
|
|
|
—
|
|
|
3
|
|
|
—
|
|
||||
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
|
733
|
|
|
—
|
|
|
733
|
|
|
—
|
|
(Dollars in thousands)
|
|
December 31, 2015
|
||||||||||||||
Description
|
|
Total
|
|
Level I
|
|
Level II
|
|
Level III
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
U.S. government agencies
|
|
$
|
78,940
|
|
|
$
|
—
|
|
|
$
|
78,940
|
|
|
$
|
—
|
|
Obligations of states and political subdivisions
|
|
75,593
|
|
|
—
|
|
|
75,593
|
|
|
—
|
|
||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Agency
|
|
131,661
|
|
|
—
|
|
|
131,661
|
|
|
—
|
|
||||
Non-agency
|
|
12,777
|
|
|
—
|
|
|
12,777
|
|
|
—
|
|
||||
Other asset backed securities
|
|
58,781
|
|
|
—
|
|
|
58,781
|
|
|
—
|
|
||||
Corporate securities
|
|
16,819
|
|
|
—
|
|
|
16,819
|
|
|
|
|
||||
Interest rate swaps
|
|
73
|
|
|
—
|
|
|
73
|
|
|
—
|
|
||||
Interest rate cap
|
|
39
|
|
|
—
|
|
|
39
|
|
|
—
|
|
||||
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
|
370
|
|
|
—
|
|
|
370
|
|
|
—
|
|
(Dollars in thousands)
|
|
September 30, 2016
|
||||||||||||||
|
|
Total
|
|
Level I
|
|
Level II
|
|
Level III
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Impaired loans
|
|
$
|
7,819
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,819
|
|
Other real estate owned
|
|
$
|
3,387
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,387
|
|
Repossessed assets
(1)
|
|
$
|
1,043
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,043
|
|
|
|
|
|
|
|
|
|
|
||||||||
(Dollars in thousands)
|
|
December 31, 2015
|
||||||||||||||
|
|
Total
|
|
Level I
|
|
Level II
|
|
Level III
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Impaired loans
|
|
$
|
9,018
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,018
|
|
Other real estate owned
|
|
$
|
3,345
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,345
|
|
Repossessed assets
(1)
|
|
$
|
1,043
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,043
|
|
(1)
|
Included in other assets on the consolidated balance sheets.
|
September 30, 2016
|
|
Fair Value
(in thousands)
|
|
Valuation Technique
|
|
Unobservable Inputs
|
|
Range
(Weighted Average)
|
||
Impaired loans
|
|
$
|
4,130
|
|
|
Appraisals
|
|
Discount to reflect current market conditions and estimated selling costs
|
|
0% - 100% (10%)
|
Impaired loans
|
|
$
|
3,689
|
|
|
Present value of cash flows
|
|
Discount rate
|
|
6% - 7% (6%)
|
Other real estate owned
|
|
$
|
3,387
|
|
|
Appraisals
|
|
Discount to reflect current market conditions and estimated selling costs
|
|
10%
|
Repossessed assets
|
|
$
|
1,043
|
|
|
Market analysis
|
|
Historical sales activity
|
|
50%
|
December 31, 2015
|
|
Fair Value
(in thousands)
|
|
Valuation Technique
|
|
Unobservable Inputs
|
|
Range
(Weighted Average)
|
||
Impaired loans
|
|
$
|
5,434
|
|
|
Appraisals
|
|
Discount to reflect current market conditions and estimated selling costs
|
|
0% - 100% (17%)
|
Impaired loans
|
|
$
|
3,584
|
|
|
Present value of cash flows
|
|
Discount rate
|
|
6% - 8% (7%)
|
Other real estate owned
|
|
$
|
3,345
|
|
|
Appraisals
|
|
Discount to reflect current market conditions and estimated selling costs
|
|
10%
|
Repossessed assets
|
|
$
|
1,043
|
|
|
Market analysis
|
|
Historical sales activity
|
|
50%
|
(Dollars in thousands)
|
September 30, 2016
|
||||||||||||||||||
|
|
|
|
|
Fair value measurements using:
|
||||||||||||||
|
Carrying
Amount |
|
Total Fair Value
|
|
Level I
|
|
Level II
|
|
Level III
|
||||||||||
Financial assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
55,791
|
|
|
$
|
55,791
|
|
|
$
|
55,791
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Securities held to maturity
|
10,727
|
|
|
10,957
|
|
|
—
|
|
|
10,957
|
|
|
—
|
|
|||||
Securities available for sale
|
352,618
|
|
|
352,618
|
|
|
—
|
|
|
352,618
|
|
|
—
|
|
|||||
Loans held for sale, net
|
669
|
|
|
669
|
|
|
—
|
|
|
669
|
|
|
—
|
|
|||||
Loans, net
|
834,690
|
|
|
843,307
|
|
|
—
|
|
|
—
|
|
|
843,307
|
|
|||||
Bank owned life insurance
|
23,761
|
|
|
23,761
|
|
|
—
|
|
|
23,761
|
|
|
—
|
|
|||||
Accrued interest receivable
|
5,030
|
|
|
5,030
|
|
|
—
|
|
|
5,030
|
|
|
—
|
|
|||||
Interest rate swaps
|
287
|
|
|
287
|
|
|
—
|
|
|
287
|
|
|
—
|
|
|||||
Interest rate cap
|
3
|
|
|
3
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|||||
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Deposits
|
$
|
1,091,505
|
|
|
$
|
1,090,406
|
|
|
$
|
—
|
|
|
$
|
1,090,406
|
|
|
$
|
—
|
|
Securities sold under agreements to repurchase
|
31,540
|
|
|
31,540
|
|
|
—
|
|
|
31,540
|
|
|
—
|
|
|||||
FHLB borrowings
|
63,500
|
|
|
63,655
|
|
|
—
|
|
|
63,655
|
|
|
—
|
|
|||||
Subordinated notes
|
5,155
|
|
|
5,168
|
|
|
—
|
|
|
5,168
|
|
|
—
|
|
|||||
Accrued interest payable
|
407
|
|
|
407
|
|
|
—
|
|
|
407
|
|
|
—
|
|
|||||
Interest rate swaps
|
733
|
|
|
733
|
|
|
—
|
|
|
733
|
|
|
—
|
|
(Dollars in thousands)
|
December 31, 2015
|
||||||||||||||||||
|
|
|
|
|
Fair value measurements using:
|
||||||||||||||
|
Carrying
Amount |
|
Total Fair Value
|
|
Level I
|
|
Level II
|
|
Level III
|
||||||||||
Financial assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
39,228
|
|
|
$
|
39,228
|
|
|
$
|
39,228
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Securities held to maturity
|
4,207
|
|
|
4,163
|
|
|
—
|
|
|
4,163
|
|
|
—
|
|
|||||
Securities available for sale
|
374,571
|
|
|
374,571
|
|
|
—
|
|
|
374,571
|
|
|
—
|
|
|||||
Loans, net
|
794,635
|
|
|
802,535
|
|
|
—
|
|
|
—
|
|
|
802,535
|
|
|||||
Bank-owned life insurance
|
23,273
|
|
|
23,273
|
|
|
—
|
|
|
23,273
|
|
|
—
|
|
|||||
Accrued interest receivable
|
5,204
|
|
|
5,204
|
|
|
—
|
|
|
5,204
|
|
|
—
|
|
|||||
Interest rate swaps
|
73
|
|
|
73
|
|
|
—
|
|
|
73
|
|
|
—
|
|
|||||
Interest rate cap
|
39
|
|
|
39
|
|
|
—
|
|
|
39
|
|
|
—
|
|
|||||
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Deposits
|
$
|
1,040,800
|
|
|
$
|
1,040,016
|
|
|
$
|
—
|
|
|
$
|
1,040,016
|
|
|
$
|
—
|
|
Securities sold under agreements to repurchase
|
26,869
|
|
|
26,869
|
|
|
—
|
|
|
26,869
|
|
|
—
|
|
|||||
FHLB borrowings
|
85,000
|
|
|
85,033
|
|
|
—
|
|
|
85,033
|
|
|
—
|
|
|||||
Subordinated debt
|
5,155
|
|
|
5,157
|
|
|
—
|
|
|
5,157
|
|
|
—
|
|
|||||
Accrued interest payable
|
410
|
|
|
410
|
|
|
—
|
|
|
410
|
|
|
—
|
|
|||||
Interest rate swaps
|
370
|
|
|
370
|
|
|
—
|
|
|
370
|
|
|
—
|
|
(Dollars in thousands)
|
Unrealized Gains on Securities
|
|
Cash Flow Hedges
|
|
Accumulated Other Comprehensive Income
|
||||||
Balance December 31, 2014
|
$
|
3,979
|
|
|
$
|
(185
|
)
|
|
$
|
3,794
|
|
Unrealized holding losses (net of tax, $229)
|
(446
|
)
|
|
—
|
|
|
(446
|
)
|
|||
Reclassification adjustment (net of tax, $47)
|
(91
|
)
|
|
—
|
|
|
(91
|
)
|
|||
Unrealized losses on interest rate swaps (net of tax, $66)
|
—
|
|
|
(129
|
)
|
|
(129
|
)
|
|||
Reclassification adjustment (net of tax, $2)
|
—
|
|
|
(4
|
)
|
|
(4
|
)
|
|||
Balance September 30, 2015
|
$
|
3,442
|
|
|
$
|
(318
|
)
|
|
$
|
3,124
|
|
|
|
|
|
|
|
||||||
Balance December 31, 2015
|
$
|
1,872
|
|
|
$
|
(195
|
)
|
|
$
|
1,677
|
|
Unrealized holding gains (net of tax, $805)
|
1,561
|
|
|
—
|
|
|
1,561
|
|
|||
Reclassification adjustment (net of tax, $174)
|
(337
|
)
|
|
—
|
|
|
(337
|
)
|
|||
Unrealized loss on interest rate swaps (net of tax, $51)
|
—
|
|
|
(98
|
)
|
|
(98
|
)
|
|||
Balance September 30, 2016
|
$
|
3,096
|
|
|
$
|
(293
|
)
|
|
$
|
2,803
|
|
Details about Accumulated Other Comprehensive Income
|
Amount Reclassified from Accumulated Other Comprehensive Income
|
Affected Line Item in the Consolidated Statements of Income
|
|||||||
|
For the Three Months Ended September 30,
|
|
|
||||||
(Dollars in thousands)
|
2016
|
|
2015
|
|
|
||||
Securities available for sale
(1)
:
|
|
|
|
|
|
||||
Net securities gains reclassified into earnings
|
$
|
(138
|
)
|
|
$
|
—
|
|
|
Gain on sales of securities available for sale, net
|
Related income tax expense
|
47
|
|
|
—
|
|
|
Income tax expense
|
||
Net effect on accumulated other comprehensive income for the period
|
(91
|
)
|
|
—
|
|
|
Net of tax
|
||
Total reclassifications for the period
|
$
|
(91
|
)
|
|
$
|
—
|
|
|
Net of tax
|
(1)
|
For more information related to unrealized gains on securities available for sale, see Note 3, "Securities".
|
|
|
|
|
|
|
||||
Details about Accumulated Other Comprehensive Income
|
Amount Reclassified from Accumulated Other Comprehensive Income
|
Affected Line Item in the Consolidated Statements of Income
|
|||||||
|
For the Nine Months Ended September 30,
|
|
|
||||||
(Dollars in thousands)
|
2016
|
|
2015
|
|
|
||||
Securities available for sale
(1)
:
|
|
|
|
|
|
||||
Net securities gains reclassified into earnings
|
$
|
(511
|
)
|
|
$
|
(138
|
)
|
|
Gain on sales of securities available for sale, net
|
Related income tax expense
|
174
|
|
|
47
|
|
|
Income tax expense
|
||
Derivatives
(2)
:
|
|
|
|
|
|
||||
(Gain) loss on interest rate swap ineffectiveness
|
—
|
|
|
(6
|
)
|
|
Other operating expenses
|
||
Related income tax expense
|
—
|
|
|
2
|
|
|
Income tax expense
|
||
Net effect on accumulated other comprehensive income
|
(337
|
)
|
|
(95
|
)
|
|
Net of tax
|
||
Total reclassifications
|
$
|
(337
|
)
|
|
$
|
(95
|
)
|
|
Net of tax
|
(1)
|
For more information related to unrealized gains on securities available for sale, see Note 3, "Securities".
|
(2)
|
For more information related to unrealized losses on derivatives, see Note 12, "Derivatives".
|
|
September 30, 2016
|
||||||||||||||||||||
|
Positions (#)
|
|
Notional Amount
(in thousands)
|
|
Asset
(in thousands)
|
|
Liability
(in thousands)
|
|
Receive Rate
|
|
Pay
Rate
|
|
Life (Years)
|
||||||||
Pay fixed - receive floating interest rate swap
|
1
|
|
$
|
5,155
|
|
|
$
|
—
|
|
|
$
|
308
|
|
|
0.71
|
%
|
|
2.59
|
%
|
|
3.9
|
Pay fixed - receive floating interest rate swap
|
1
|
|
$
|
10,000
|
|
|
$
|
—
|
|
|
$
|
138
|
|
|
0.44
|
%
|
|
1.43
|
%
|
|
2.1
|
|
December 31, 2015
|
||||||||||||||||||||
|
Positions (#)
|
|
Notional Amount
(in thousands)
|
|
Asset
(in thousands)
|
|
Liability
(in thousands)
|
|
Receive Rate
|
|
Pay
Rate
|
|
Life (Years)
|
||||||||
Pay fixed - receive floating interest rate swap
|
1
|
|
$
|
5,155
|
|
|
$
|
—
|
|
|
$
|
226
|
|
|
0.32
|
%
|
|
2.59
|
%
|
|
4.8
|
Pay fixed - receive floating interest rate swap
|
1
|
|
$
|
10,000
|
|
|
$
|
—
|
|
|
$
|
71
|
|
|
0.23
|
%
|
|
1.43
|
%
|
|
3.0
|
|
September 30, 2016
|
||||||||||||||||||||
|
Positions (#)
|
|
Notional Amount
(in thousands)
|
|
Asset
(in thousands)
|
|
Liability
(in thousands)
|
|
Receive Rate
|
|
Pay
Rate |
|
Life (Years)
|
||||||||
Pay fixed - receive floating interest rate swap
|
1
|
|
$
|
3,572
|
|
|
$
|
—
|
|
|
$
|
156
|
|
|
1 month
LIBOR plus 200 BP |
|
|
3.90
|
%
|
|
11.0
|
Pay fixed - receive floating interest rate swap
|
1
|
|
1,674
|
|
|
—
|
|
|
131
|
|
|
1 month
LIBOR plus 180 BP |
|
|
4.09
|
%
|
|
8.0
|
|||
Pay floating - receive fixed interest rate swap
|
1
|
|
3,572
|
|
|
156
|
|
|
—
|
|
|
3.90
|
%
|
|
1 month
LIBOR plus 200 BP |
|
|
11.0
|
|||
Pay floating - receive fixed interest rate swap
|
1
|
|
1,674
|
|
|
131
|
|
|
—
|
|
|
4.09
|
%
|
|
1 month
LIBOR plus 180 BP |
|
|
8.0
|
|||
Total derivatives not designated
|
|
|
$
|
10,492
|
|
|
$
|
287
|
|
|
$
|
287
|
|
|
|
|
|
|
|
|
December 31, 2015
|
|||||||||||||||||||||
|
Positions (#)
|
|
Notional Amount
(in thousands)
|
|
Asset
(in thousands)
|
|
Liability
(in thousands)
|
|
Receive Rate
|
|
Pay
Rate |
|
Life (Years)
|
|||||||||
Pay fixed - receive floating interest rate swap
|
1
|
|
|
$
|
3,760
|
|
|
$
|
—
|
|
|
$
|
21
|
|
|
1 month
LIBOR plus 200 BP |
|
|
3.90
|
%
|
|
11.9
|
Pay fixed - receive floating interest rate swap
|
1
|
|
|
1,706
|
|
|
—
|
|
|
52
|
|
|
1 month
LIBOR plus 180 BP |
|
|
4.09
|
%
|
|
8.9
|
|||
Pay floating - receive fixed interest rate swap
|
1
|
|
|
3,760
|
|
|
21
|
|
|
—
|
|
|
3.90
|
%
|
|
1 month
LIBOR plus 200 BP |
|
|
11.9
|
|||
Pay floating - receive fixed interest rate swap
|
1
|
|
|
1,706
|
|
|
52
|
|
|
—
|
|
|
4.09
|
%
|
|
1 month
LIBOR plus 180 BP |
|
|
8.9
|
|||
Total derivatives not designated
|
|
|
$
|
10,932
|
|
|
$
|
73
|
|
|
$
|
73
|
|
|
|
|
|
|
|
September 30, 2016
|
|||||||||||||||||||||||
(Dollars in thousands)
|
|||||||||||||||||||||||
Notional Amount
|
|
Termination Date
|
|
3-Month LIBOR Strike Rate
|
|
Premium Paid
|
|
Unamortized Premium at
September 30, 2016
|
|
Fair Value
September 30, 2016
|
|
Cumulative Cash Flows Received
|
|||||||||||
$
|
10,000
|
|
|
September 8, 2018
|
|
2.00
|
%
|
|
$
|
70
|
|
|
$
|
70
|
|
|
$
|
3
|
|
|
$
|
—
|
|
December 31, 2015
|
|||||||||||||||||||||||
(Dollars in thousands)
|
|||||||||||||||||||||||
Notional Amount
|
|
Termination Date
|
|
3-Month LIBOR Strike Rate
|
|
Premium Paid
|
|
Unamortized Premium at December 31, 2015
|
|
Fair Value
December 31, 2015
|
|
Cumulative Cash Flows Received
|
|||||||||||
$
|
10,000
|
|
|
September 8, 2018
|
|
2.00
|
%
|
|
$
|
70
|
|
|
$
|
70
|
|
|
$
|
39
|
|
|
$
|
—
|
|
(Dollars in thousands)
|
September 30, 2016
|
|
December 31, 2015
|
||||
Balance at the beginning of year, net
|
$
|
3,345
|
|
|
$
|
4,051
|
|
Transfers from loans and to premises and equipment, net
|
526
|
|
|
287
|
|
||
Sales proceeds
|
(224
|
)
|
|
(814
|
)
|
||
Gains (losses) on disposition
|
50
|
|
|
(100
|
)
|
||
Less valuation adjustments
|
(310
|
)
|
|
(79
|
)
|
||
Balance at the end of the period, net
|
$
|
3,387
|
|
|
$
|
3,345
|
|
(Dollars in thousands)
|
September 30, 2016
|
|
December 31, 2015
|
||||
Real estate loans:
|
|
|
|
||||
Construction
|
$
|
858
|
|
|
$
|
853
|
|
Secured by farmland
|
—
|
|
|
—
|
|
||
Secured by 1-4 family residential
|
2,169
|
|
|
1,958
|
|
||
Other real estate loans
|
360
|
|
|
534
|
|
||
Total real estate loans
|
$
|
3,387
|
|
|
$
|
3,345
|
|
ITEM 2.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITON AND RESULTS OF OPERATIONS
|
Capital Ratios
|
|
Actual
September 30, 2016
|
|
Regulatory Minimum
(1)
|
|
Excess Over Regulatory Minimum
|
|||
Tier 1 leverage ratio
|
|
9.6
|
%
|
|
4.0
|
%
|
|
5.6
|
%
|
Common equity tier 1 ratio
|
|
15.9
|
%
|
|
7.0
|
%
|
|
8.9
|
%
|
Tier 1 risk-based capital ratio
|
|
16.6
|
%
|
|
8.5
|
%
|
|
8.1
|
%
|
Total risk-based capital ratio
|
|
17.8
|
%
|
|
10.5
|
%
|
|
7.3
|
%
|
(1)
|
Assumes fully phased-in Basel III regulatory capital rules. The Common Equity Ratio, the Tier 1 Ratio and the Total Capital Ratio include a 2.50% Capital Conservation Buffer that must be maintained in order for the bank to remain well capitalized and to avoid restrictions on payments of dividends, bonuses, capital repurchases and restricted payments.
|
|
Three Months Ended September 30,
|
||||||||||||||||||||
|
2016
|
|
2015
|
||||||||||||||||||
|
Average
Balance
|
|
Income/
Expense
|
|
Yield/
Rate
(2)
|
|
Average
Balance
|
|
Income/
Expense
|
|
Yield/
Rate
(2)
|
||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Taxable
|
$
|
314,367
|
|
|
$
|
1,667
|
|
|
2.11
|
%
|
|
$
|
320,684
|
|
|
$
|
2,009
|
|
|
2.49
|
%
|
Tax-exempt
(1)
|
50,914
|
|
|
623
|
|
|
4.86
|
%
|
|
51,252
|
|
|
672
|
|
|
5.20
|
%
|
||||
Total securities
|
$
|
365,281
|
|
|
$
|
2,290
|
|
|
2.49
|
%
|
|
$
|
371,936
|
|
|
$
|
2,681
|
|
|
2.86
|
%
|
Loans:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Taxable
|
$
|
851,030
|
|
|
$
|
8,618
|
|
|
4.03
|
%
|
|
$
|
777,039
|
|
|
$
|
8,222
|
|
|
4.20
|
%
|
Tax-exempt
(1)
|
577
|
|
|
8
|
|
|
5.52
|
%
|
|
630
|
|
|
8
|
|
|
5.04
|
%
|
||||
Total loans
(3)
|
$
|
851,607
|
|
|
$
|
8,626
|
|
|
4.03
|
%
|
|
$
|
777,669
|
|
|
$
|
8,230
|
|
|
4.20
|
%
|
Interest on deposits with other banks and federal funds sold
|
39,315
|
|
|
35
|
|
|
0.35
|
%
|
|
46,671
|
|
|
23
|
|
|
0.20
|
%
|
||||
Total earning assets
|
$
|
1,256,203
|
|
|
$
|
10,951
|
|
|
3.47
|
%
|
|
$
|
1,196,276
|
|
|
$
|
10,934
|
|
|
3.63
|
%
|
Less: allowances for loan losses
|
(11,516
|
)
|
|
|
|
|
|
(11,870
|
)
|
|
|
|
|
||||||||
Total nonearning assets
|
80,465
|
|
|
|
|
|
|
77,155
|
|
|
|
|
|
||||||||
Total assets
|
$
|
1,325,152
|
|
|
|
|
|
|
|
$
|
1,261,561
|
|
|
|
|
|
|
||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest-bearing deposits:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Checking
|
$
|
350,110
|
|
|
$
|
194
|
|
|
0.22
|
%
|
|
$
|
343,584
|
|
|
$
|
176
|
|
|
0.20
|
%
|
Regular savings
|
130,623
|
|
|
61
|
|
|
0.19
|
%
|
|
120,104
|
|
|
56
|
|
|
0.18
|
%
|
||||
Money market savings
|
76,377
|
|
|
49
|
|
|
0.26
|
%
|
|
66,144
|
|
|
32
|
|
|
0.19
|
%
|
||||
Time deposits:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
$100,000 and over
|
153,108
|
|
|
336
|
|
|
0.87
|
%
|
|
148,998
|
|
|
322
|
|
|
0.86
|
%
|
||||
Under $100,000
|
116,061
|
|
|
269
|
|
|
0.92
|
%
|
|
103,897
|
|
|
291
|
|
|
1.11
|
%
|
||||
Total interest-bearing deposits
|
$
|
826,279
|
|
|
$
|
909
|
|
|
0.44
|
%
|
|
$
|
782,727
|
|
|
$
|
877
|
|
|
0.45
|
%
|
Securities sold under agreements to repurchase
|
33,585
|
|
|
1
|
|
|
0.01
|
%
|
|
28,859
|
|
|
2
|
|
|
0.03
|
%
|
||||
FHLB borrowings and other debt
|
71,731
|
|
|
210
|
|
|
1.17
|
%
|
|
68,416
|
|
|
165
|
|
|
0.96
|
%
|
||||
Total interest-bearing liabilities
|
$
|
931,595
|
|
|
$
|
1,120
|
|
|
0.48
|
%
|
|
$
|
880,002
|
|
|
$
|
1,044
|
|
|
0.47
|
%
|
Non-interest bearing liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Demand deposits
|
250,705
|
|
|
|
|
|
|
242,983
|
|
|
|
|
|
||||||||
Other liabilities
|
14,379
|
|
|
|
|
|
|
12,815
|
|
|
|
|
|
||||||||
Total liabilities
|
$
|
1,196,679
|
|
|
|
|
|
|
|
$
|
1,135,800
|
|
|
|
|
|
|
||||
Shareholders' equity
|
128,473
|
|
|
|
|
|
|
125,761
|
|
|
|
|
|
||||||||
Total liabilities and shareholders' equity
|
$
|
1,325,152
|
|
|
|
|
|
|
|
$
|
1,261,561
|
|
|
|
|
|
|
||||
Net interest income
|
|
|
|
$
|
9,831
|
|
|
|
|
|
|
|
$
|
9,890
|
|
|
|
||||
Interest rate spread
|
|
|
|
|
|
|
2.99
|
%
|
|
|
|
|
|
|
|
3.16
|
%
|
||||
Cost of Funds
|
|
|
|
|
|
|
0.38
|
%
|
|
|
|
|
|
|
|
0.37
|
%
|
||||
Interest expense as a percent of average earning assets
|
|
|
|
|
|
|
0.35
|
%
|
|
|
|
|
|
|
|
0.35
|
%
|
||||
Net interest margin
|
|
|
|
|
|
|
3.11
|
%
|
|
|
|
|
|
|
|
3.28
|
%
|
(1)
|
Income and yields are reported on a tax equivalent basis assuming a federal tax rate of 34%.
|
(2)
|
All yields and rates have been annualized on a 366 day year for 2016 and 365 day year for 2015.
|
(3)
|
Total average loans include loans on non-accrual status.
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Nine Months Ended September 30,
|
||||||||||||||||||||
|
2016
|
|
2015
|
||||||||||||||||||
|
Average
Balance
|
|
Income/
Expense
|
|
Yield/
Rate
(2)
|
|
Average
Balance
|
|
Income/
Expense
|
|
Yield/
Rate
(2)
|
||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Taxable
|
$
|
325,562
|
|
|
$
|
5,888
|
|
|
2.42
|
%
|
|
$
|
315,507
|
|
|
$
|
5,832
|
|
|
2.47
|
%
|
Tax-exempt
(1)
|
50,755
|
|
|
1,974
|
|
|
5.20
|
%
|
|
51,680
|
|
|
2,051
|
|
|
5.31
|
%
|
||||
Total securities
|
$
|
376,317
|
|
|
$
|
7,862
|
|
|
2.79
|
%
|
|
$
|
367,187
|
|
|
$
|
7,883
|
|
|
2.87
|
%
|
Loans:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Taxable
|
$
|
832,214
|
|
|
$
|
25,380
|
|
|
4.07
|
%
|
|
$
|
764,337
|
|
|
$
|
24,468
|
|
|
4.28
|
%
|
Tax-exempt
(1)
|
625
|
|
|
26
|
|
|
5.56
|
%
|
|
620
|
|
|
25
|
|
|
5.39
|
%
|
||||
Total loans
(3)
|
$
|
832,839
|
|
|
$
|
25,406
|
|
|
4.07
|
%
|
|
$
|
764,957
|
|
|
$
|
24,493
|
|
|
4.28
|
%
|
Interest on deposits with other banks and federal funds sold
|
42,115
|
|
|
123
|
|
|
0.39
|
%
|
|
52,858
|
|
|
84
|
|
|
0.21
|
%
|
||||
Total earning assets
|
$
|
1,251,271
|
|
|
$
|
33,391
|
|
|
3.56
|
%
|
|
$
|
1,185,002
|
|
|
$
|
32,460
|
|
|
3.66
|
%
|
Less: allowances for loan losses
|
(11,359
|
)
|
|
|
|
|
|
(11,894
|
)
|
|
|
|
|
||||||||
Total nonearning assets
|
80,774
|
|
|
|
|
|
|
76,703
|
|
|
|
|
|
||||||||
Total assets
|
$
|
1,320,686
|
|
|
|
|
|
|
|
$
|
1,249,811
|
|
|
|
|
|
|
||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest-bearing deposits:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Checking
|
$
|
353,769
|
|
|
$
|
576
|
|
|
0.22
|
%
|
|
$
|
342,184
|
|
|
$
|
517
|
|
|
0.20
|
%
|
Regular savings
|
129,538
|
|
|
180
|
|
|
0.19
|
%
|
|
117,981
|
|
|
164
|
|
|
0.19
|
%
|
||||
Money market savings
|
75,762
|
|
|
133
|
|
|
0.23
|
%
|
|
67,314
|
|
|
95
|
|
|
0.19
|
%
|
||||
Time deposits:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
$100,000 and over
|
148,115
|
|
|
980
|
|
|
0.88
|
%
|
|
136,980
|
|
|
900
|
|
|
0.88
|
%
|
||||
Under $100,000
|
112,442
|
|
|
801
|
|
|
0.95
|
%
|
|
107,181
|
|
|
904
|
|
|
1.13
|
%
|
||||
Total interest-bearing deposits
|
$
|
819,626
|
|
|
$
|
2,670
|
|
|
0.44
|
%
|
|
$
|
771,640
|
|
|
$
|
2,580
|
|
|
0.45
|
%
|
Securities sold under agreements to repurchase
|
29,966
|
|
|
2
|
|
|
0.01
|
%
|
|
30,578
|
|
|
64
|
|
|
0.28
|
%
|
||||
FHLB borrowings and other debt
|
87,786
|
|
|
704
|
|
|
1.07
|
%
|
|
69,752
|
|
|
507
|
|
|
0.97
|
%
|
||||
Federal funds purchased
|
2
|
|
|
—
|
|
|
—
|
%
|
|
2
|
|
|
—
|
|
|
—
|
%
|
||||
Total interest-bearing liabilities
|
$
|
937,380
|
|
|
$
|
3,376
|
|
|
0.48
|
%
|
|
$
|
871,972
|
|
|
$
|
3,151
|
|
|
0.48
|
%
|
Non-interest bearing liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Demand deposits
|
243,020
|
|
|
|
|
|
|
239,791
|
|
|
|
|
|
||||||||
Other liabilities
|
13,896
|
|
|
|
|
|
|
13,126
|
|
|
|
|
|
||||||||
Total liabilities
|
$
|
1,194,296
|
|
|
|
|
|
|
|
$
|
1,124,889
|
|
|
|
|
|
|
||||
Shareholders' equity
|
126,390
|
|
|
|
|
|
|
124,922
|
|
|
|
|
|
||||||||
Total liabilities and shareholders' equity
|
$
|
1,320,686
|
|
|
|
|
|
|
|
$
|
1,249,811
|
|
|
|
|
|
|
||||
Net interest income
|
|
|
|
$
|
30,015
|
|
|
|
|
|
|
|
$
|
29,309
|
|
|
|
||||
Interest rate spread
|
|
|
|
|
|
|
3.08
|
%
|
|
|
|
|
|
|
|
3.18
|
%
|
||||
Cost of Funds
|
|
|
|
|
|
|
0.38
|
%
|
|
|
|
|
|
|
|
0.38
|
%
|
||||
Interest expense as a percent of average earning assets
|
|
|
|
|
|
|
0.36
|
%
|
|
|
|
|
|
|
|
0.36
|
%
|
||||
Net interest margin
|
|
|
|
|
|
|
3.20
|
%
|
|
|
|
|
|
|
|
3.31
|
%
|
(1)
|
Income and yields are reported on a tax equivalent basis assuming a federal tax rate of 34%.
|
(2)
|
All yields and rates have been annualized on a 366 day year for 2016 and 365 day year for 2015.
|
(3)
|
Total average loans include loans on non-accrual status.
|
•
|
Yields on earning assets for the quarter decreased by 16 bp compared to the same period for 2015. Yields on earning assets for the nine month period decreased by 10 bp compared to the same period for 2015.
|
•
|
Yields on investment securities decreased by 37 bp compared to the quarter ended September 30, 2015 and decreased by 8 bp compared to the nine month period ended September 30, 2015. The principal reason for the decline in yields was elevated refinancing activity and sales of securities during the quarter.
|
•
|
Yields on loans decreased by 17 bp compared to the quarter ended September 30, 2015 and decreased by 21 bp compared to the nine month period ended September 30, 2015. Loan yields declined in large part due to payoffs and lower yields on new loans added to the balance sheet.
|
•
|
The cost of funds has remained relatively stable at 38 bp, compared to the quarter and nine month periods ended September 30, 2015.
|
|
For the
Three Months Ended
September 30,
|
|
For the
Nine Months Ended
September 30,
|
||||||||||||
(Dollars in thousands)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
GAAP measures:
|
|
|
|
|
|
|
|
||||||||
Interest Income - Loans
|
$
|
8,624
|
|
|
$
|
8,227
|
|
|
$
|
25,397
|
|
|
$
|
24,484
|
|
Interest Income - Investments & Other
|
2,113
|
|
|
2,476
|
|
|
7,314
|
|
|
7,270
|
|
||||
Interest Expense - Deposits
|
909
|
|
|
877
|
|
|
2,670
|
|
|
2,580
|
|
||||
Interest Expense - Other Borrowings
|
211
|
|
|
167
|
|
|
706
|
|
|
571
|
|
||||
Total Net Interest Income
|
$
|
9,617
|
|
|
$
|
9,659
|
|
|
$
|
29,335
|
|
|
$
|
28,603
|
|
Non-GAAP measures:
|
|
|
|
|
|
|
|
|
|
||||||
Tax Benefit Realized on:
|
|
|
|
|
|
|
|
|
|
||||||
Non-taxable interest income - municipal securities
|
212
|
|
|
228
|
|
|
671
|
|
|
697
|
|
||||
Non-taxable interest income - loans
|
2
|
|
|
3
|
|
|
9
|
|
|
9
|
|
||||
Total Tax Benefit Realized on Non-Taxable Interest Income
|
$
|
214
|
|
|
$
|
231
|
|
|
$
|
680
|
|
|
$
|
706
|
|
Total Tax Equivalent Net Interest Income
|
$
|
9,831
|
|
|
$
|
9,890
|
|
|
$
|
30,015
|
|
|
$
|
29,309
|
|
•
|
Total revenue generated by our wealth management group, Middleburg Investment Group ("MIG") remained unchanged for the quarter at
$1.17 million
compared to the same period of 2015 and decreased to
$3.46 million
for the nine month period ended September 30, 2016 from
$3.63 million
for the same period in 2015. Fee income is based primarily upon the market value of assets under administration which were $2.01 billion at September 30, 2016 and $1.91 billion at September 30, 2015.
|
•
|
Net gains on securities available for sale were
$138,000
and
zero
for the quarters ended September 30, 2016 and 2015, respectively and
$511,000
and
$138,000
for the nine month periods ended September 30, 2016 and 2015, respectively. Securities were sold in order to fund loan growth.
|
•
|
Other operating income was
$136,000
for the quarter ended September 30, 2016, a decrease of
35.85%
compared to the quarter ended September 30, 2015. Other operating income was
$492,000
for the nine months ended September 30, 2016, a decrease of
58.79%
compared to the same period in 2015. In the first quarter of 2015, there was a substantial recovery of approximately $500,000 in expenses related to a loan that had previously been charged off that was included in other operating income. Other operating income generally includes revenue from prepayment penalties, safe deposit charges, wire fees and other miscellaneous adjustments.
|
(Dollars in thousands)
|
For the
Three Months Ended September 30,
|
|
For the
Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Service charges on deposit accounts
|
$
|
303
|
|
|
$
|
275
|
|
|
$
|
868
|
|
|
$
|
803
|
|
Trust services income
|
1,168
|
|
|
1,168
|
|
|
3,458
|
|
|
3,629
|
|
||||
ATM fee income, net
|
190
|
|
|
209
|
|
|
565
|
|
|
593
|
|
||||
Gains on sales of loans held for sale, net
|
11
|
|
|
9
|
|
|
23
|
|
|
3
|
|
||||
Gains on sales of securities available for sale, net
|
138
|
|
|
—
|
|
|
511
|
|
|
138
|
|
||||
Commissions on investment sales
|
133
|
|
|
132
|
|
|
417
|
|
|
415
|
|
||||
Bank owned life insurance
|
165
|
|
|
166
|
|
|
488
|
|
|
489
|
|
||||
Other operating income
|
136
|
|
|
212
|
|
|
492
|
|
|
1,194
|
|
||||
Total non-interest income
|
$
|
2,244
|
|
|
$
|
2,171
|
|
|
$
|
6,822
|
|
|
$
|
7,264
|
|
•
|
Salaries and employee benefit expenses for the quarter decreased by
1.38%
when compared to the same period in 2015. Salaries and employee benefit expenses decreased by
2.70%
for the nine month period ended September 30, 2016 when compared to the same period in 2015. The decreases in salaries and employee benefit expenses were primarily due to the Company's continued cost control initiatives.
|
•
|
Costs related to other real estate owned (OREO) decreased for the quarter by
$10,000
when compared to the same period in 2015. Costs related to OREO increased
$54,000
for the nine month period ended September 30, 2016 when compared to the same period in 2015. The difference was due to an increase in valuation adjustments based on updated appraisals during the nine month period ended September 30, 2016 compared to the same period in 2015.
|
•
|
Computer operations expense for the quarter increased
$81,000
when compared to the quarter ended September 30, 2015. Computer operations expense increased by
$387,000
for the nine month period ended September 30, 2016 when compared to the same period in 2015. The primary reasons for the increase in expenses are related to the conversion to a new on-line banking platform.
|
•
|
Other operating expenses for the quarter increased by
4.92%
when compared to the same period in 2015. Other operating expenses increased by
2.67%
for the nine month period ended September 30, 2016 when compared to the same period in 2015. Included in this category were merger related expenses that totaled $165,100 and $236,600 for the quarter and nine months ended September 30, 2016, respectively.
|
(Dollars in thousands)
|
For the
Three Months Ended September 30,
|
|
For the
Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Salaries and employee benefits
|
$
|
4,727
|
|
|
$
|
4,793
|
|
|
$
|
14,152
|
|
|
$
|
14,544
|
|
Occupancy and equipment
|
1,262
|
|
|
1,323
|
|
|
3,937
|
|
|
4,054
|
|
||||
Amortization
|
210
|
|
|
160
|
|
|
628
|
|
|
478
|
|
||||
Computer operations
|
605
|
|
|
524
|
|
|
1,923
|
|
|
1,536
|
|
||||
Other real estate owned, net
|
183
|
|
|
193
|
|
|
339
|
|
|
285
|
|
||||
Other taxes
|
237
|
|
|
230
|
|
|
709
|
|
|
684
|
|
||||
Federal deposit insurance
|
215
|
|
|
188
|
|
|
606
|
|
|
583
|
|
||||
Audits and exams
|
136
|
|
|
156
|
|
|
453
|
|
|
472
|
|
||||
Other operating expenses
|
1,599
|
|
|
1,524
|
|
|
4,192
|
|
|
4,083
|
|
||||
Total non-interest expense
|
$
|
9,174
|
|
|
$
|
9,091
|
|
|
$
|
26,939
|
|
|
$
|
26,719
|
|
|
For the
Three Months Ended September 30,
|
|
For the
Nine Months Ended September 30,
|
||||||||||||
(Dollars in thousands)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Summary of Operating Results:
|
|
|
|
|
|
|
|
||||||||
Non-interest expense
|
$
|
9,174
|
|
|
$
|
9,091
|
|
|
$
|
26,939
|
|
|
$
|
26,719
|
|
Less: Intangible amortization
|
43
|
|
|
43
|
|
|
129
|
|
|
129
|
|
||||
Less: Other real estate owned, net
|
183
|
|
|
193
|
|
|
339
|
|
|
285
|
|
||||
Adjusted non-interest expense
|
$
|
8,948
|
|
|
$
|
8,855
|
|
|
$
|
26,471
|
|
|
$
|
26,305
|
|
|
|
|
|
|
|
|
|
||||||||
Net interest income
|
$
|
9,617
|
|
|
$
|
9,659
|
|
|
$
|
29,335
|
|
|
$
|
28,603
|
|
|
|
|
|
|
|
|
|
||||||||
Non-interest income
|
2,244
|
|
|
2,171
|
|
|
6,822
|
|
|
7,264
|
|
||||
Less: Gains on sales of securities available for sale, net
|
138
|
|
|
—
|
|
|
511
|
|
|
138
|
|
||||
Adjusted non-interest income
|
$
|
2,106
|
|
|
$
|
2,171
|
|
|
$
|
6,311
|
|
|
$
|
7,126
|
|
Tax equivalent adjustment
(2)
|
299
|
|
|
317
|
|
|
931
|
|
|
958
|
|
||||
Total net interest income and non-interest income, adjusted
|
$
|
12,022
|
|
|
$
|
12,147
|
|
|
$
|
36,577
|
|
|
$
|
36,687
|
|
|
|
|
|
|
|
|
|
||||||||
Efficiency ratio, adjusted
|
74.43
|
%
|
|
72.90
|
%
|
|
72.37
|
%
|
|
71.70
|
%
|
||||
Efficiency ratio, U.S. GAAP
(1)
|
77.35
|
%
|
|
76.85
|
%
|
|
74.51
|
%
|
|
74.49
|
%
|
(1)
|
Computed by dividing non-interest expense by the sum of net interest income and non-interest income.
|
(2)
|
Includes tax-equivalent interest adjustments on loans and securities as well as tax-equivalent non-interest income adjustments related to the increase in cash surrender value of bank owned life insurance.
|
|
September 30,
|
|
Years Ended December 31,
|
||||||||||||||||
(Dollars in thousands)
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Real estate loans:
|
|
|
|
|
|
|
|
|
|
||||||||||
Construction
|
$
|
32,519
|
|
|
$
|
39,673
|
|
|
$
|
33,050
|
|
|
$
|
36,025
|
|
|
$
|
50,218
|
|
Secured by farmland
|
16,832
|
|
|
19,062
|
|
|
19,708
|
|
|
16,578
|
|
|
11,876
|
|
|||||
Secured by 1-4 family residential
|
332,408
|
|
|
280,096
|
|
|
265,216
|
|
|
273,384
|
|
|
260,620
|
|
|||||
Other real estate loans
|
250,778
|
|
|
258,035
|
|
|
255,236
|
|
|
260,333
|
|
|
254,930
|
|
|||||
Commercial loans
|
193,826
|
|
|
190,482
|
|
|
163,269
|
|
|
129,554
|
|
|
118,573
|
|
|||||
Consumer loans
|
19,527
|
|
|
18,333
|
|
|
18,367
|
|
|
12,606
|
|
|
13,260
|
|
|||||
Total gross loans
|
845,890
|
|
|
805,681
|
|
|
754,846
|
|
|
728,480
|
|
|
709,477
|
|
|||||
Less allowance for loan losses
|
11,200
|
|
|
11,046
|
|
|
11,786
|
|
|
13,320
|
|
|
14,311
|
|
|||||
Net loans
|
$
|
834,690
|
|
|
$
|
794,635
|
|
|
$
|
743,060
|
|
|
$
|
715,160
|
|
|
$
|
695,166
|
|
•
|
Real estate construction loans primarily consist of pre-sold 1-4 family residential loans along with some commercial construction loans. This category represented
3.8%
of total loans, a decrease of approximately
$7.15 million
from
$39.67 million
.
|
•
|
Loans secured by farmland decreased by
$2.23 million
from
$19.06 million
.
|
•
|
Loans secured by 1-4 family residential real estate represented
39.3%
of total loans, an increase of
$52.31 million
.
|
•
|
Other real estate loans are typically non-farm, non-residential real estate loans which are, in most cases, owner-occupied commercial buildings. Other real estate loans represented
29.7%
of total loans, a decrease of
$7.26 million
.
|
•
|
Commercial loans, which consist of secured and unsecured loans to small businesses, increased by
1.76%
.
|
•
|
Consumer loans increased by
$1.19 million
or
6.51%
.
|
•
|
Nonaccrual loans declined by 23.69% to $6.70 million as of September 30, 2016 compared to $8.78 million as of December 31, 2015 and declined by 24.06% when compared to $8.83 million as of September 30, 2015. The decline in nonaccrual loans during the nine months ended September 30, 2016 was primarily the result of:
|
◦
|
the sale of loans with a recorded investment of approximately $1.36 million;
|
◦
|
loan payoffs of approximately $708,000, and;
|
◦
|
the transfer of loans to OREO with a recorded investment of approximately $530,000.
|
•
|
Restructured loans that were accruing totaled $12.39 million as of September 30, 2016 compared to $12.06 million and $12.11 million as of December 31, 2015 and September 30, 2015, respectively.
|
•
|
Other real estate owned was $3.39 million as of September 30, 2016, compared to $3.35 million and $3.87 million as of December 31, 2015 and September 30, 2015, respectively.
|
•
|
Loans past due for 90+ days and still accruing were $248,000 as of September 30, 2016 compared to $278,000 and $224,000 as of December 31, 2015 and September 30, 2015, respectively.
|
|
September 30,
|
|
December 31,
|
||||||||||||||||
(Dollars in thousands)
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Nonaccrual loans
|
$
|
6,703
|
|
|
$
|
8,784
|
|
|
$
|
9,944
|
|
|
$
|
19,752
|
|
|
$
|
21,664
|
|
Restructured loans
(1)
|
12,386
|
|
|
12,058
|
|
|
4,295
|
|
|
4,674
|
|
|
5,132
|
|
|||||
Accruing loans greater than 90 days past due
|
248
|
|
|
278
|
|
|
30
|
|
|
808
|
|
|
1,044
|
|
|||||
Total nonperforming loans
|
$
|
19,337
|
|
|
$
|
21,120
|
|
|
$
|
14,269
|
|
|
$
|
25,234
|
|
|
$
|
27,840
|
|
Other real estate owned
|
3,387
|
|
|
3,345
|
|
|
4,051
|
|
|
3,424
|
|
|
9,929
|
|
|||||
Repossessed assets
(2)
|
1,043
|
|
|
1,043
|
|
|
1,132
|
|
|
—
|
|
|
—
|
|
|||||
Total nonperforming assets
|
$
|
23,767
|
|
|
$
|
25,508
|
|
|
$
|
19,452
|
|
|
$
|
28,658
|
|
|
$
|
37,769
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for loan losses
|
$
|
11,200
|
|
|
$
|
11,046
|
|
|
$
|
11,786
|
|
|
$
|
13,320
|
|
|
$
|
14,311
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Nonperforming loans to total loans
|
2.29
|
%
|
|
2.62
|
%
|
|
1.89
|
%
|
|
3.46
|
%
|
|
3.92
|
%
|
|||||
Allowance for loan losses to nonperforming loans
|
57.92
|
%
|
|
52.30
|
%
|
|
82.60
|
%
|
|
52.80
|
%
|
|
51.40
|
%
|
|||||
Nonperforming assets to total assets
|
1.78
|
%
|
|
1.97
|
%
|
|
1.59
|
%
|
|
2.33
|
%
|
|
3.05
|
%
|
(1)
|
Amount reflects restructured loans that are not included in nonaccrual loans.
|
(2)
|
Included in other assets.
|
|
For the Nine Months Ended
|
|
For the Year Ended
|
||||
(Dollars in thousands)
|
September 30, 2016
|
|
December 31, 2015
|
||||
Balance, beginning of period
|
$
|
11,046
|
|
|
$
|
11,786
|
|
Add: Provision for loan losses
|
53
|
|
|
2,293
|
|
||
Less: Charge-offs:
|
|
|
|
|
|||
Real estate loans:
|
|
|
|
|
|||
Construction
|
$
|
(388
|
)
|
|
$
|
—
|
|
Secured by 1-4 family residential
|
(7
|
)
|
|
(344
|
)
|
||
Other real estate loans
|
(126
|
)
|
|
(9
|
)
|
||
Commercial loans
|
(31
|
)
|
|
(3,281
|
)
|
||
Consumer loans
|
(17
|
)
|
|
(57
|
)
|
||
Total charge-offs
|
$
|
(569
|
)
|
|
$
|
(3,691
|
)
|
Add: Recoveries:
|
|
|
|
|
|||
Real estate loans:
|
|
|
|
|
|||
Construction
|
$
|
128
|
|
|
$
|
246
|
|
Secured by 1-4 family residential
|
395
|
|
|
359
|
|
||
Other real estate loans
|
27
|
|
|
28
|
|
||
Commercial loans
|
65
|
|
|
14
|
|
||
Consumer loans
|
55
|
|
|
11
|
|
||
Total recoveries
|
$
|
670
|
|
|
$
|
658
|
|
Net (charge-offs) recoveries
|
$
|
101
|
|
|
$
|
(3,033
|
)
|
Balance, end of period
|
$
|
11,200
|
|
|
$
|
11,046
|
|
|
|
|
|
||||
Allowance for loan losses to total loans
|
1.32
|
%
|
|
1.37
|
%
|
||
Net (recoveries) charge-offs to average loans
|
(0.012
|
)%
|
|
0.39
|
%
|
|
September 30, 2016
|
|
December 31, 2015
|
||||
Real estate construction
|
$
|
883
|
|
|
$
|
905
|
|
Real estate secured by farmland
|
145
|
|
|
192
|
|
||
Real estate secured by1-4 family residential
|
3,617
|
|
|
3,341
|
|
||
Other real estate loans
|
3,468
|
|
|
3,761
|
|
||
Commercial
|
2,136
|
|
|
1,706
|
|
||
Consumer
|
951
|
|
|
1,141
|
|
||
|
$
|
11,200
|
|
|
$
|
11,046
|
|
•
|
Total Risk Based Capital ratio of
17.83%
and
17.50%
at
September 30, 2016
and
December 31, 2015
, respectively.
|
•
|
Common Equity Tier 1 ratio of
15.92%
and
15.60%
at
September 30, 2016
and December 31, 2015, respectively.
|
•
|
Tier 1 Capital ratio of
16.57%
and
16.30%
at
September 30, 2016
and
December 31, 2015
, respectively.
|
•
|
Leverage ratio of
9.59%
at
September 30, 2016
compared to
9.60%
at
December 31, 2015
.
|
Capital Ratios
|
Basel Rule
(2)
|
|
FDIC PCA
(1)
|
||
Tier 1 leverage/Average assets ratio
|
4.0
|
%
|
|
5.0
|
%
|
Common equity tier 1/Risk weighted assets ratio
|
7.0
|
%
|
|
6.5
|
%
|
Tier 1 risk-based capital/Risk weighted assets ratio
|
8.5
|
%
|
|
8.0
|
%
|
Total risk-based capital/Risk weighted assets ratio
|
10.5
|
%
|
|
10.0
|
%
|
(1)
|
Prompt Corrective Action
|
(2)
|
Assumes fully phased-in Basel III regulatory capital rules. The Common Equity Ratio, the Tier 1 Ratio and the Total Capital Ratio include a 2.50% Capital Conservation Buffer that must be maintained in order for the bank to remain well capitalized and to avoid restrictions on payments of dividends, bonuses, capital repurchases and restricted payments.
|
Capital Conservation Buffer
|
|
Maximum Payout as a Percentage of Eligible Retained Income
|
|
Less than or = 0.625%
|
|
—
|
%
|
Less than or = 1.25% and greater than 0.625%
|
|
20.0
|
%
|
Less than or = 1.875% and greater than 1.25%
|
|
40.0
|
%
|
Less than or = 2.50% and greater than 1.875%
|
|
60.0
|
%
|
Greater than 2.50%
|
|
No payment limit applies
|
|
•
|
ability to obtain regulatory approvals and meet other closing conditions to the pending merger with Access;
|
•
|
delays in closing the merger with Access;
|
•
|
the inability to recognize cost savings or revenues or to implement integration plans associated with the merger with Access;
|
•
|
deposit attrition, operating costs, customer losses and business disruption in connection with the merger, including adverse effects on relationships with employees;
|
•
|
termination of the merger agreement, or failure to complete the merger, could negatively impact our stock price and our future business and financial results;
|
•
|
further adverse changes in general economic and business conditions in the Company’s market area;
|
•
|
changes in banking and other laws and regulations applicable to the Company;
|
•
|
maintaining asset qualities;
|
•
|
the ability to properly identify risks in our loan portfolio and calculate an adequate loan loss allowance;
|
•
|
risks inherent in making loans such as repayment risks and fluctuating collateral values;
|
•
|
concentration in loans secured by real estate;
|
•
|
changing trends in customer profiles and behavior;
|
•
|
changes in interest rates and interest rate policies;
|
•
|
maintaining cost controls as the Company opens or acquires new facilities;
|
•
|
competition with other banks and financial institutions, and companies outside of the banking industry, including those companies that have substantially greater access to capital and other resources;
|
•
|
the ability to continue to attract low cost core deposits to fund asset growth;
|
•
|
the ability to successfully manage the Company’s growth or implement its growth strategies if it is unable to identify attractive markets, locations or opportunities to expand in the future;
|
•
|
reliance on the Company’s management team, including its ability to attract and retain key personnel;
|
•
|
demand, development and acceptance of new products and services;
|
•
|
problems with technology utilized by the Company;
|
•
|
maintaining capital levels adequate to support the Company’s growth; and
|
•
|
other factors described in Item 1A, “Risk Factors,” discussed in more detail in the Company's Annual Report on Form 10-K for the year ended December 31, 2015.
|
|
|
|
|
|
|
|
|
|
2.1
|
Agreement and Plan of Reorganization, dated as of October 21, 2016, between Access National Corporation and Middleburg National Corporation (incorporated by reference to Exhibit 2.1 to Current Report on Form 8-K filed on October 25, 2016).
|
3.1
|
Bylaws of Middleburg Financial Corporation (restated in electronic format as of July 27, 2016), filed as Exhibit 3.1 to the current report on Form 8-K filed July 28, 2016 and incorporated herein by reference.
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31.1
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Rule 13a-14(a) Certification of Chief Executive Officer
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31.2
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Rule 13a-14(a) Certification of Chief Financial Officer
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32.1
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Statement of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. § 1350
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101
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The following materials from the Middleburg Financial Corporation Quarterly Report on Form 10-Q for the quarter ended September 30, 2016 formatted in Extensible Business reporting Language (XBRL): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Income, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Changes in Shareholders’ Equity, (v) Consolidated Statements of Cash Flows, and (vi) Notes to Consolidated Financial Statements.
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MIDDLEBURG FINANCIAL CORPORATION
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Date:
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November 4, 2016
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By:
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/s/ Gary R. Shook
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Gary R. Shook
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Chief Executive Officer
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Date:
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November 4, 2016
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By:
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/s/ Raj Mehra
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Raj Mehra
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Chief Financial Officer
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2.1
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Agreement and Plan of Reorganization, dated as of October 21, 2016, between Access National Corporation and Middleburg National Corporation (incorporated by reference to Exhibit 2.1 to Current Report on Form 8-K filed on October 25, 2016).
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3.1
|
Bylaws of Middleburg Financial Corporation (restated in electronic format as of July 27, 2016), filed as Exhibit 3.1 to the current report on Form 8-K filed July 28, 2016 and incorporated herein by reference.
|
31.1
|
Rule 13a-14(a) Certification of Chief Executive Officer
|
31.2
|
Rule 13a-14(a) Certification of Chief Financial Officer
|
32.1
|
Statement of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. § 1350
|
101
|
The following materials from the Middleburg Financial Corporation Quarterly Report on Form 10-Q for the quarter ended September 30, 2016 formatted in Extensible Business reporting Language (XBRL): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Income, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Changes in Shareholders’ Equity, (v) Consolidated Statements of Cash Flows, and (vi) Notes to Consolidated Financial Statements.
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