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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Farmers and Merchants Bancorp (QX) | USOTC:FMCB | OTCMarkets | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
10.00 | 1.00% | 1,010.00 | 1,000.00 | 1,075.25 | 1,010.01 | 1,010.00 | 1,010.01 | 200 | 21:23:51 |
Delaware
|
94-3327828
|
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
|
111 W. Pine Street, Lodi, California
|
95240
|
|
(Address of principal executive offices)
|
(Zip Code)
|
Large accelerated filer ☐
|
Accelerated filer ☒
|
Non-accelerated filer ☐
|
Smaller Reporting Company ☐
|
(Do not check if a smaller reporting company)
|
Page
|
||
PART I
|
||
3 | ||
Item 1.
|
3
|
|
Item 1A.
|
14
|
|
Item 1B.
|
22
|
|
Item 2.
|
22
|
|
Item 3.
|
23
|
|
Item 4.
|
23
|
|
PART II
|
||
Item 5.
|
23
|
|
Item 6.
|
26
|
|
Item 7.
|
27
|
|
Item 7A.
|
57
|
|
Item 8.
|
60
|
|
Item 9.
|
102
|
|
Item 9A.
|
102
|
|
Item 9B.
|
103
|
|
PART III
|
||
Item 10.
|
104
|
|
Item 11.
|
105
|
|
Item 12.
|
105
|
|
Item 13.
|
105
|
|
Item 14.
|
105
|
|
PART IV
|
||
Item 15.
|
106
|
|
Item 16.
|
107
|
|
108
|
||
108
|
· |
Sacramento Metropolitan Statistical Area (“MSA”), with branches in Sacramento, Elk Grove and Galt. This MSA has a Population of 2.32 million and a Per Capita Income of approximately $5
2
,
9
00. The MSA includes significant employment in the following sectors: state and local government; agriculture; and trade, transportation and utilities. Unemployment currently stands at 5.3%.
|
· |
Stockton MSA, with branches in Lodi, Linden, Stockton and Manteca. This MSA has a Population of 0.7
5
million and a Per Capita Income of approximately $
40
,
3
00. The MSA includes significant employment in the following sectors: state and local government; agriculture; trade, transportation, and utilities; and education and health services. Unemployment currently stands at 8.
2
%.
|
· |
Modesto MSA, with branches in Modesto, Riverbank and Turlock. This MSA has a Population of 0.55 million and a Per Capita Income of approximately $
41
,
2
00. The MSA includes significant employment in the following sectors: agriculture; trade, transportation and utilities; state and local government; and education and health services. Unemployment currently stands at 8.
4
%.
|
· |
Merced MSA with branches in Hilmar and Merced. This MSA has a Population of 0.
28
million and a Per Capita Income of approximately $3
8
,
3
00. The MSA includes significant employment in the following sectors: agriculture; state and local government; and trade, transportation and utilities. Unemployment currently stands at 10.
0
%.
|
· |
Centralize responsibility for consumer financial protection by creating a new agency within the Federal Reserve Board, the Bureau of Consumer Financial Protection, with broad rulemaking, supervision and enforcement authority for a wide range of consumer protection laws that would apply to all banks and thrifts.
|
· |
Apply the same leverage and risk-based capital requirements that apply to insured depository institutions to bank holding companies.
|
· |
Require the FDIC to seek to make its capital requirements for banks countercyclical so that the amount of capital required to be maintained increases in times of economic expansion and decreases in times of economic contraction.
|
· |
Change the assessment base for federal deposit insurance from the amount of insured deposits to consolidated assets less tangible capital.
|
· |
Implement corporate governance revisions, including executive compensation and proxy access by stockholders.
|
· |
Make permanent the $250,000 limit for federal deposit insurance and increase the cash limit of Securities Investor Protection Corporation protection from $100,000 to $250,000, and provide unlimited federal deposit insurance until January 1, 2013 for non-interest bearing demand transaction accounts at all insured depository institutions.
|
· |
Repeal the federal prohibitions on the payment of interest on demand deposits effective July 21, 2011, thereby permitting depository institutions to pay interest on business transaction and other accounts.
|
• |
control of any other bank or bank holding company or all or substantially all the assets thereof; or
|
• |
more than 5% of the voting shares of a bank or bank holding company which is not already a subsidiary.
|
· |
continuing public sector financial stress, both at the local and statewide level. See “Item 1. Business – Service Area.” For example, the State of California, a large employer in one of the Company’s market territories, continues to experience financial challenges, particularly relating to the funding of pension and other financial commitments made to retired employees, and the City of Stockton, which exited bankruptcy in February, 2015 but still faces financial challenges; and
|
· |
levels of unemployment that remain above statewide and nationwide averages and home prices that have improved but remain below peak levels.
|
· |
inability to maintain or increase net interest margin;
|
· |
inability to control non-interest expense, including, but not limited to, rising employee and healthcare costs and the costs of regulatory compliance;
|
· |
inability to maintain or increase non-interest income; and
|
·
|
continuing ability to expand through de novo branching or otherwise.
|
•
|
unexpected problems with operations, personnel, technology or credit;
|
•
|
loss of customers and employees of the acquiree;
|
•
|
difficulty in working with the acquiree's employees and customers;
|
•
|
the assimilation of the acquiree's operations, culture and personnel;
|
•
|
instituting and maintaining uniform standards, controls, procedures and policies; and
|
•
|
litigation risk not discovered during the due diligence period.
|
· |
actual or anticipated variations in quarterly results of operations;
|
· |
operating and stock price performance of other companies that investors deem comparable to our Company;
|
· |
news reports relating to trends, concerns and other issues in the financial services industry;
|
· |
available investment liquidity in our market area since our stock is not listed on any exchange; and
|
· |
perceptions in the marketplace regarding our Company and/or its competitors.
|
Item 5. |
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
Calendar Quarter
|
High
|
Low
|
Close
|
Cash Dividends
Declared (Per
Share)
|
|||||||||||||
2016
|
Fourth quarter
|
$
|
650
|
$
|
595
|
$
|
622
|
$
|
6.55
|
||||||||
Third quarter
|
600
|
550
|
596
|
-
|
|||||||||||||
Second quarter
|
645
|
501
|
579
|
6.55
|
|||||||||||||
First quarter
|
644
|
501
|
544
|
-
|
Calendar Quarter
|
High
|
Low
|
Close
|
Cash Dividends
Declared (Per
Share)
|
|||||||||||||
2015
|
Fourth quarter
|
$
|
585
|
$
|
510
|
$
|
518
|
$
|
6.50
|
||||||||
Third quarter
|
532
|
500
|
524
|
-
|
|||||||||||||
Second quarter
|
585
|
450
|
508
|
6.40
|
|||||||||||||
First quarter
|
506
|
460
|
505
|
Summary of Income:
|
2016
|
2015
|
2014
|
2013
|
2012
|
|||||||||||||||
Total Interest Income
|
$
|
99,266
|
$
|
90,075
|
$
|
81,521
|
$
|
76,531
|
$
|
78,491
|
||||||||||
Total Interest Expense
|
4,196
|
3,325
|
2,813
|
2,891
|
5,140
|
|||||||||||||||
Net Interest Income
|
95,070
|
86,750
|
78,708
|
73,640
|
73,351
|
|||||||||||||||
Provision for Credit Losses
|
6,335
|
750
|
1,175
|
425
|
1,850
|
|||||||||||||||
Net Interest Income After Provision for Credit Losses
|
88,735
|
86,000
|
77,533
|
73,215
|
71,501
|
|||||||||||||||
Total Non-Interest Income
|
15,257
|
14,575
|
14,329
|
15,937
|
14,110
|
|||||||||||||||
Total Non-Interest Expense
|
58,172
|
56,259
|
51,366
|
50,870
|
48,277
|
|||||||||||||||
Income Before Income Taxes
|
45,820
|
44,316
|
40,496
|
38,282
|
37,334
|
|||||||||||||||
Provision for Income Taxes
|
16,097
|
16,924
|
15,094
|
14,221
|
13,985
|
|||||||||||||||
Net Income
|
$
|
29,723
|
$
|
27,392
|
$
|
25,402
|
$
|
24,061
|
$
|
23,349
|
||||||||||
Balance Sheet Data:
|
||||||||||||||||||||
Total Assets
|
$
|
2,922,121
|
$
|
2,615,345
|
$
|
2,360,551
|
$
|
2,076,073
|
$
|
1,974,686
|
||||||||||
Loans & Leases
|
2,177,601
|
1,996,359
|
1,712,244
|
1,388,236
|
1,246,902
|
|||||||||||||||
Allowance for Credit Losses
|
47,919
|
41,523
|
35,401
|
34,274
|
34,217
|
|||||||||||||||
Investment Securities
|
506,372
|
430,533
|
430,405
|
473,144
|
486,383
|
|||||||||||||||
Deposits
|
2,581,711
|
2,277,532
|
2,064,073
|
1,807,691
|
1,722,026
|
|||||||||||||||
Federal Home Loan Bank Advances
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Shareholders' Equity
|
279,981
|
251,835
|
233,178
|
209,904
|
205,033
|
|||||||||||||||
Selected Ratios:
|
||||||||||||||||||||
Return on Average Assets
|
1.12
|
%
|
1.12
|
%
|
1.17
|
%
|
1.21
|
%
|
1.22
|
%
|
||||||||||
Return on Average Equity
|
11.17
|
%
|
11.21
|
%
|
11.43
|
%
|
11.54
|
%
|
11.62
|
%
|
||||||||||
Dividend Payout Ratio
|
35.25
|
%
|
37.08
|
%
|
39.05
|
%
|
40.41
|
%
|
40.34
|
%
|
||||||||||
Average Loans & Leases to Average Deposits
|
88.63
|
%
|
84.44
|
%
|
79.99
|
%
|
74.28
|
%
|
72.02
|
%
|
||||||||||
Average Equity to Average Assets
|
10.05
|
%
|
10.02
|
%
|
10.28
|
%
|
10.52
|
%
|
10.45
|
%
|
||||||||||
Period-end Shareholders' Equity to Total Assets
|
9.58
|
%
|
9.63
|
%
|
9.88
|
%
|
10.11
|
%
|
10.38
|
%
|
||||||||||
Basic Per Share Data:
|
||||||||||||||||||||
Net Income
(1)
|
$
|
37.44
|
$
|
34.82
|
$
|
32.64
|
$
|
30.93
|
$
|
29.99
|
||||||||||
Cash Dividends Per Share
|
$
|
13.10
|
$
|
12.90
|
$
|
12.70
|
$
|
12.50
|
$
|
12.10
|
(1)
|
Based on the weighted average number of shares outstanding of 793,970, 786,582, 778,358, 777,882, and 778,648 for the years ended December 31, 2016, 2015, 2014, 2013, and 2012, respectively.
|
Financial Performance Indicator
|
2016
|
2015
|
2014
|
2013
|
2012
|
|||||||||||||||
Net Income
|
$
|
29,723
|
$
|
27,392
|
$
|
25,402
|
$
|
24,061
|
$
|
23,349
|
||||||||||
Total Assets
|
2,922,121
|
2,615,345
|
2,360,551
|
2,076,073
|
1,974,686
|
|||||||||||||||
Total Loans & Leases
|
2,177,601
|
1,996,359
|
1,712,244
|
1,388,236
|
1,246,902
|
|||||||||||||||
Total Deposits
|
2,581,711
|
2,277,532
|
2,064,073
|
1,807,691
|
1,722,026
|
|||||||||||||||
Total Shareholders’ Equity
|
279,981
|
251,835
|
233,178
|
209,904
|
205,033
|
|||||||||||||||
Total Risk-Based Capital Ratio
|
12.80
|
%
|
12.23
|
%
|
12.93
|
%
|
13.99
|
%
|
14.96
|
%
|
||||||||||
Non-Performing Loans as a % of Total Loans
|
0.14
|
%
|
0.11
|
%
|
0.13
|
%
|
0.19
|
%
|
0.74
|
%
|
||||||||||
Substandard Loans as a % of Total Loans
|
0.29
|
%
|
0.31
|
%
|
0.21
|
%
|
0.41
|
%
|
1.72
|
%
|
||||||||||
Net (Recoveries) Charge-Offs to Average Loans
|
0.00
|
%
|
(0.30
|
%)
|
0.00
|
%
|
0.03
|
%
|
0.05
|
%
|
||||||||||
Loan Loss Allowance as a % of Total Loans
|
2.19
|
%
|
2.07
|
%
|
2.06
|
%
|
2.46
|
%
|
2.74
|
%
|
||||||||||
Return on Average Assets
|
1.12
|
%
|
1.12
|
%
|
1.17
|
%
|
1.21
|
%
|
1.22
|
%
|
||||||||||
Return on Average Equity
|
11.17
|
%
|
11.21
|
%
|
11.43
|
%
|
11.54
|
%
|
11.62
|
%
|
||||||||||
Earnings Per Share
|
37.44
|
34.82
|
32.64
|
30.93
|
29.99
|
|||||||||||||||
Cash Dividends Per Share
|
13.10
|
12.90
|
12.70
|
12.50
|
12.10
|
|||||||||||||||
Cash Dividends Declared
|
10,478
|
10,157
|
9,919
|
9,723
|
9,418
|
· |
Net income over the five-year period totaled $129.9 million and increased in every year.
|
· |
Return on Average Assets ranged from 1.12% to 1.22% and averaged 1.17% over the five-year period.
|
· |
Total assets increased 52.2% from $1.9 billion at December 31, 2011 to $2.9 billion at December 31, 2016 .
|
· |
Total loans & leases increased 87.2% from $1.2 billion at December 31, 2011 to $2.2 billion at December 31, 2016.
|
· |
Total deposits increased 58.8% from $1.6 billion at December 31, 2011 to $2.6 billion at December 31, 2016.
|
· |
In 2016, the Company earned $29.7 million for a return on average assets of 1.12%.
|
· |
In 2016, the Company increased its cash dividend per share by 1.6% over 2015 levels, and our strong financial performance has allowed us to increase dividends every year during this five-year period.
|
· |
The Company’s total risk based capital ratio was 12.80% at December 31, 2016, and the Bank achieved the highest regulatory classification of “well capitalized” in each of the previous five years. See “Financial Condition – Capital.”
|
· |
The Company continued to diversify its: (1) geographic footprint by acquiring Delta National Bancorp with branches in Turlock, Manteca and Riverbank.
|
· |
Despite continuing fragile economic conditions in the Company’s local markets, the Company’s asset quality remains very strong compared to peer banks at the present time, when measured by: (1) net charge-offs at 0.00% of average loans & leases during 2016; and (2) substandard loans & leases totaling 0.29% of total loans & leases at December 31, 2016. See “Results of Operations – Provision and Allowance for Credit Losses” and “Financial Condition – Classified Loans & Leases and Non-Performing Assets.”
|
· |
The Company’s earnings are heavily dependent on its net interest margin, which is sensitive to such factors as: (1) market interest rates; (2) the mix of our earning assets and interest-bearing liabilities; and (3) competitor pricing strategies.
|
- |
During both the fourth quarter of 2015 and 2016, the FRB increased short-term market rates by 0.25%. However, market rates remain low, and although rates are expected to increase somewhat in 2017 Management does not expect them to change significantly.
|
- |
Loan growth picked-up substantially in 2015 - 2016, partially as a result of our expansion into Walnut Creek, Concord and equipment leasing, but we still face a fragile economic environment in the Central Valley combined with a very competitive pricing environment. No assurances can be given that this recent growth in the loan & lease portfolio will continue.
|
- |
Aggressive competitor pricing for loans, leases and deposits continues to require the Company to respond in order to retain key customers.
|
· |
The Company’s results are impacted by changes in the credit quality of its borrowers. Substandard loans & leases totaled $6.4 million or 0.29% of total loans & leases at December 31, 2016 vs. $6.1 million or 0.31% of total loans at December 31, 2015. Management believes, based on information currently available, that these levels are adequately covered by the Company’s $47.9 million allowance for credit losses as of December 31, 2016. See “Results of Operations - Provision and Allowance for Credit Losses” and “Financial Condition – Classified Loans & Leases and Non-Performing Assets.” The Company’s provision for credit losses was $6.3 million in 2016, compared to $750,000 in 2015 and $1.2 million in 2014. See “Item 1A. Risk Factors.”
|
· |
FDIC deposit insurance expense for the years 2016, 2015, and 2014 was $1.17 million, $1.19 million, and $1.0 million, respectively. In 2011 the FDIC changed its methodology for calculating deposit premiums. See “Item 1. Business – Supervision and Regulation – Deposit Insurance.” While FDIC deposit insurance assessments have stabilized in recent years, they remain well above the pre-recession level the Company paid in 2007.
|
· |
During 2016 Congress and the former Obama Administration continued to implement broad changes to the regulation of consumer financial products and the financial services industry as a whole. These changes could significantly affect the Company’s product offerings, pricing and profitability in areas such as debit and credit cards, home mortgages and deposit service charges. What impact the new Trump Administration will have on deregulation and/or tax relief is yet unknown.
|
· |
The Company has (i) expanded its geographic footprint through denovo branch expansion in Walnut Creek and Concord, CA and through acquisition in Manteca and Riverbank, CA and (ii) established equipment leasing as a new line of business. Although Management believes that these initiatives will result in increased asset growth and earnings, along with reduced concentration risks, the start-up costs related to staff and facilities are significant and will take time to recoup.
|
Year Ended December 31, 2016
|
||||||||||||
Assets
|
Balance
|
Interest
|
Rate
|
|||||||||
Interest Bearing Deposits with Banks
|
$
|
53,659
|
$
|
287
|
0.53
|
%
|
||||||
Investment Securities:
|
||||||||||||
U.S. Treasuries
|
60,191
|
572
|
0.95
|
%
|
||||||||
U.S. Govt SBA
|
2,323
|
55
|
2.37
|
%
|
||||||||
Government Agency & Government-Sponsored Entities
|
25,624
|
197
|
0.77
|
%
|
||||||||
Obligations of States and Political Subdivisions - Non-Taxable
|
60,332
|
2,920
|
4.84
|
%
|
||||||||
Mortgage Backed Securities
|
215,528
|
4,663
|
2.16
|
%
|
||||||||
Other
|
781
|
18
|
2.30
|
%
|
||||||||
Total Investment Securities
|
364,779
|
8,425
|
2.31
|
%
|
||||||||
Loans & Leases
|
||||||||||||
Real Estate
|
1,460,300
|
66,969
|
4.59
|
%
|
||||||||
Home Equity Lines and Loans
|
31,939
|
1,562
|
4.89
|
%
|
||||||||
Agricultural
|
266,053
|
10,908
|
4.10
|
%
|
||||||||
Commercial
|
216,593
|
8,886
|
4.10
|
%
|
||||||||
Consumer
|
4,987
|
307
|
6.16
|
%
|
||||||||
Other
|
1,943
|
44
|
2.26
|
%
|
||||||||
Leases
|
68,353
|
2,894
|
4.23
|
%
|
||||||||
Total Loans & Leases
|
2,050,168
|
91,570
|
4.47
|
%
|
||||||||
Total Earning Assets
|
2,468,606
|
$
|
100,282
|
4.06
|
%
|
|||||||
Unrealized Gain on Securities Available-for-Sale
|
4,895
|
|||||||||||
Allowance for Credit Losses
|
(43,684
|
)
|
||||||||||
Cash and Due From Banks
|
44,385
|
|||||||||||
All Other Assets
|
173,313
|
|||||||||||
Total Assets
|
$
|
2,647,515
|
||||||||||
Liabilities & Shareholders' Equity
|
||||||||||||
Interest Bearing Deposits
|
||||||||||||
Interest Bearing DDA
|
$
|
423,305
|
$
|
526
|
0.12
|
%
|
||||||
Savings and Money Market
|
725,127
|
1,087
|
0.15
|
%
|
||||||||
Time Deposits
|
513,105
|
2,194
|
0.43
|
%
|
||||||||
Total Interest Bearing Deposits
|
1,661,537
|
3,807
|
0.23
|
%
|
||||||||
Federal Home Loan Bank Advances
|
3,924
|
18
|
0.46
|
%
|
||||||||
Subordinated Debt
|
10,310
|
371
|
3.60
|
%
|
||||||||
Total Interest Bearing Liabilities
|
1,675,771
|
$
|
4,196
|
0.25
|
%
|
|||||||
Interest Rate Spread
|
3.81
|
%
|
||||||||||
Demand Deposits
|
651,709
|
|||||||||||
All Other Liabilities
|
53,950
|
|||||||||||
Total Liabilities
|
2,381,430
|
|||||||||||
Shareholders' Equity
|
266,085
|
|||||||||||
Total Liabilities & Shareholders' Equity
|
$
|
2,647,515
|
||||||||||
Impact of Non-Interest Bearing Deposits and Other Liabilities
|
0.08
|
%
|
||||||||||
Net Interest Income and Margin on Total Earning Assets
|
96,086
|
3.89
|
%
|
|||||||||
Tax Equivalent Adjustment
|
(1,016
|
)
|
||||||||||
Net Interest Income
|
$
|
95,070
|
3.85
|
%
|
Year Ended December 31, 2015
|
||||||||||||
Assets
|
Balance
|
Interest
|
Rate
|
|||||||||
Interest Bearing Deposits with Banks
|
$
|
66,729
|
$
|
172
|
0.26
|
%
|
||||||
Investment Securities:
|
||||||||||||
U.S. Treasuries
|
34,040
|
451
|
1.32
|
%
|
||||||||
Government Agency & Government-Sponsored Entities
|
36,882
|
185
|
0.50
|
%
|
||||||||
Obligations of States and Political Subdivisions - Non-Taxable
|
62,016
|
3,121
|
5.03
|
%
|
||||||||
Mortgage Backed Securities
|
260,579
|
5,641
|
2.16
|
%
|
||||||||
Other
|
5,323
|
34
|
0.64
|
%
|
||||||||
Total Investment Securities
|
398,840
|
9,432
|
2.36
|
%
|
||||||||
Loans & Leases
|
||||||||||||
Real Estate
|
1,251,061
|
58,701
|
4.69
|
%
|
||||||||
Home Equity Lines and Loans
|
31,918
|
1,709
|
5.35
|
%
|
||||||||
Agricultural
|
229,850
|
9,201
|
4.00
|
%
|
||||||||
Commercial
|
229,449
|
9,374
|
4.09
|
%
|
||||||||
Consumer
|
4,820
|
266
|
5.52
|
%
|
||||||||
Other
|
604
|
14
|
2.32
|
%
|
||||||||
Leases
|
54,763
|
2,293
|
4.19
|
%
|
||||||||
Total Loans & Leases
|
1,802,465
|
81,558
|
4.52
|
%
|
||||||||
Total Earning Assets
|
2,268,034
|
$
|
91,162
|
4.02
|
%
|
|||||||
Unrealized Gain on Securities Available-for-Sale
|
4,483
|
|||||||||||
Allowance for Credit Losses
|
(38,560
|
)
|
||||||||||
Cash and Due From Banks
|
38,419
|
|||||||||||
All Other Assets
|
165,348
|
|||||||||||
Total Assets
|
$
|
2,437,724
|
||||||||||
Liabilities & Shareholders' Equity
|
||||||||||||
Interest Bearing Deposits
|
||||||||||||
Interest Bearing DDA
|
$
|
350,917
|
$
|
243
|
0.07
|
%
|
||||||
Savings and Money Market
|
690,561
|
1,155
|
0.17
|
%
|
||||||||
Time Deposits
|
487,560
|
1,591
|
0.33
|
%
|
||||||||
Total Interest Bearing Deposits
|
1,529,038
|
2,989
|
0.20
|
%
|
||||||||
Federal Home Loan Bank Advances
|
3,937
|
7
|
0.18
|
%
|
||||||||
Subordinated Debt
|
10,310
|
329
|
3.19
|
%
|
||||||||
Total Interest Bearing Liabilities
|
1,543,285
|
$
|
3,325
|
0.22
|
%
|
|||||||
Interest Rate Spread
|
3.80
|
%
|
||||||||||
Demand Deposits
|
605,592
|
|||||||||||
All Other Liabilities
|
44,476
|
|||||||||||
Total Liabilities
|
2,193,353
|
|||||||||||
Shareholders' Equity
|
244,371
|
|||||||||||
Total Liabilities & Shareholders' Equity
|
$
|
2,437,724
|
||||||||||
Impact of Non-Interest Bearing Deposits and Other Liabilities
|
0.07
|
%
|
||||||||||
Net Interest Income and Margin on Total Earning Assets
|
87,837
|
3.87
|
%
|
|||||||||
Tax Equivalent Adjustment
|
(1,087
|
)
|
||||||||||
Net Interest Income
|
$
|
86,750
|
3.82
|
%
|
Year Ended December 31, 2014
|
||||||||||||
Assets
|
Balance
|
Interest
|
Rate
|
|||||||||
Interest Bearing Deposits with Banks
|
$
|
62,452
|
$
|
158
|
0.25
|
%
|
||||||
Investment Securities:
|
||||||||||||
Government Agency & Government-Sponsored Entities
|
18,383
|
186
|
1.01
|
%
|
||||||||
Obligations of States and Political Subdivisions - Non-Taxable
|
65,202
|
3,552
|
5.45
|
%
|
||||||||
Mortgage Backed Securities
|
314,293
|
7,174
|
2.28
|
%
|
||||||||
Other
|
36,643
|
379
|
1.03
|
%
|
||||||||
Total Investment Securities
|
434,521
|
11,291
|
2.60
|
%
|
||||||||
Loans & Leases
|
||||||||||||
Real Estate
|
1,027,795
|
49,914
|
4.86
|
%
|
||||||||
Home Equity Lines and Loans
|
34,017
|
1,881
|
5.53
|
%
|
||||||||
Agricultural
|
224,859
|
8,997
|
4.00
|
%
|
||||||||
Commercial
|
179,420
|
8,655
|
4.82
|
%
|
||||||||
Consumer
|
5,143
|
307
|
5.97
|
%
|
||||||||
Other
|
17
|
1
|
5.88
|
%
|
||||||||
Leases
|
28,136
|
1,555
|
5.53
|
%
|
||||||||
Total Loans & Leases
|
1,499,387
|
71,310
|
4.76
|
%
|
||||||||
Total Earning Assets
|
1,996,360
|
$
|
82,759
|
4.15
|
%
|
|||||||
Unrealized Gain on Securities Available-for-Sale
|
1,462
|
|||||||||||
Allowance for Credit Losses
|
(34,316
|
)
|
||||||||||
Cash and Due From Banks
|
32,219
|
|||||||||||
All Other Assets
|
166,860
|
|||||||||||
Total Assets
|
$
|
2,162,585
|
||||||||||
Liabilities & Shareholders' Equity
|
||||||||||||
Interest Bearing Deposits
|
||||||||||||
Interest Bearing DDA
|
$
|
311,911
|
$
|
167
|
0.05
|
%
|
||||||
Savings and Money Market
|
627,129
|
1,051
|
0.17
|
%
|
||||||||
Time Deposits
|
430,968
|
1,268
|
0.29
|
%
|
||||||||
Total Interest Bearing Deposits
|
1,370,008
|
2,486
|
0.18
|
%
|
||||||||
Federal Home Loan Bank Advances
|
3,643
|
5
|
0.14
|
%
|
||||||||
Subordinated Debt
|
10,310
|
322
|
3.12
|
%
|
||||||||
Total Interest Bearing Liabilities
|
1,383,961
|
$
|
2,813
|
0.20
|
%
|
|||||||
Interest Rate Spread
|
3.94
|
%
|
||||||||||
Demand Deposits
|
504,470
|
|||||||||||
All Other Liabilities
|
51,946
|
|||||||||||
Total Liabilities
|
1,940,377
|
|||||||||||
Shareholders' Equity
|
222,208
|
|||||||||||
Total Liabilities & Shareholders' Equity
|
$
|
2,162,585
|
||||||||||
Impact of Non-Interest Bearing Deposits and Other Liabilities
|
0.06
|
%
|
||||||||||
Net Interest Income and Margin on Total Earning Assets
|
79,946
|
4.00
|
%
|
|||||||||
Tax Equivalent Adjustment
|
(1,238
|
)
|
||||||||||
Net Interest Income
|
$
|
78,708
|
3.94
|
%
|
(Interest and Rates on a Taxable Equivalent Basis)
(in thousands)
|
2016 versus 2015
Amount of Increase
(Decrease) Due to Change in:
|
|||||||||||
Interest Earning Assets
|
Volume
|
Rate
|
Net Chg.
|
|||||||||
Interest Bearing Deposits with Banks
|
$
|
(40
|
)
|
$
|
155
|
$
|
115
|
|||||
Investment Securities:
|
||||||||||||
U.S. Treasuries
|
275
|
(154
|
)
|
121
|
||||||||
U.S. Govt SBA
|
55
|
-
|
55
|
|||||||||
Government Agency & Government-Sponsored Entities
|
(68
|
)
|
80
|
12
|
||||||||
Municipals - Taxable
|
-
|
-
|
-
|
|||||||||
Obligations of States and Political Subdivisions - Non-Taxable
|
(83
|
)
|
(118
|
)
|
(201
|
)
|
||||||
Mortgage Backed Securities
|
(975
|
)
|
(3
|
)
|
(978
|
)
|
||||||
Other
|
(48
|
)
|
32
|
(16
|
)
|
|||||||
Total Investment Securities
|
(844
|
)
|
(163
|
)
|
(1,007
|
)
|
||||||
Loans & Leases:
|
||||||||||||
Real Estate
|
9,622
|
(1,355
|
)
|
8,267
|
||||||||
Home Equity Lines and Loans
|
1
|
(148
|
)
|
(147
|
)
|
|||||||
Agricultural
|
1,479
|
228
|
1,707
|
|||||||||
Commercial
|
(527
|
)
|
39
|
(488
|
)
|
|||||||
Consumer
|
9
|
32
|
41
|
|||||||||
Other
|
30
|
-
|
30
|
|||||||||
Leases
|
575
|
26
|
601
|
|||||||||
Total Loans & Leases
|
11,189
|
(1,178
|
)
|
10,011
|
||||||||
Total Earning Assets
|
10,305
|
(1,186
|
)
|
9,119
|
||||||||
Interest Bearing Liabilities
|
||||||||||||
Interest Bearing Deposits:
|
||||||||||||
Interest Bearing DDA
|
58
|
225
|
283
|
|||||||||
Savings and Money Market
|
56
|
(124
|
)
|
(68
|
)
|
|||||||
Time Deposits
|
87
|
516
|
603
|
|||||||||
Total Interest Bearing Deposits
|
201
|
617
|
818
|
|||||||||
Other Borrowed Funds
|
-
|
11
|
11
|
|||||||||
Subordinated Debt
|
-
|
42
|
42
|
|||||||||
Total Interest Bearing Liabilities
|
201
|
670
|
871
|
|||||||||
Total Change
|
$
|
10,104
|
$
|
(1,856
|
)
|
$
|
8,248
|
(Interest and Rates on a Taxable Equivalent Basis)
(in thousands)
|
2015 versus 2014
Amount of Increase
(Decrease) Due to Change in:
|
|||||||||||
Interest Earning Assets
|
Volume
|
Rate
|
Net Chg.
|
|||||||||
Interest Bearing Deposits with Banks
|
$
|
11
|
$
|
3
|
$
|
14
|
||||||
Investment Securities:
|
||||||||||||
U.S. Treasuries
|
451
|
-
|
451
|
|||||||||
Government Agency & Government-Sponsored Entities
|
124
|
(125
|
)
|
(1
|
)
|
|||||||
Obligations of States and Political Subdivisions - Non-Taxable
|
(169
|
)
|
(262
|
)
|
(431
|
)
|
||||||
Mortgage Backed Securities
|
(1,177
|
)
|
(356
|
)
|
(1,533
|
)
|
||||||
Other
|
(238
|
)
|
(107
|
)
|
(345
|
)
|
||||||
Total Investment Securities
|
(1,009
|
)
|
(850
|
)
|
(1,859
|
)
|
||||||
Loans & Leases:
|
||||||||||||
Real Estate
|
10,526
|
(1,739
|
)
|
8,787
|
||||||||
Home Equity Lines and Loans
|
(114
|
)
|
(58
|
)
|
(172
|
)
|
||||||
Agricultural
|
200
|
4
|
204
|
|||||||||
Commercial
|
2,175
|
(1,456
|
)
|
719
|
||||||||
Consumer
|
(18
|
)
|
(23
|
)
|
(41
|
)
|
||||||
Other
|
14
|
(1
|
)
|
13
|
||||||||
Leases
|
1,188
|
(450
|
)
|
738
|
||||||||
Total Loans & Leases
|
13,971
|
(3,723
|
)
|
10,248
|
||||||||
Total Earning Assets
|
12,973
|
(4,570
|
)
|
8,403
|
||||||||
Interest Bearing Liabilities
|
||||||||||||
Interest Bearing Deposits:
|
||||||||||||
Interest Bearing DDA
|
23
|
53
|
76
|
|||||||||
Savings and Money Market
|
106
|
(2
|
)
|
104
|
||||||||
Time Deposits
|
177
|
146
|
323
|
|||||||||
Total Interest Bearing Deposits
|
306
|
197
|
503
|
|||||||||
Other Borrowed Funds
|
1
|
1
|
2
|
|||||||||
Subordinated Debt
|
-
|
7
|
7
|
|||||||||
Total Interest Bearing Liabilities
|
307
|
205
|
512
|
|||||||||
Total Change
|
$
|
12,666
|
$
|
(4,775
|
)
|
$
|
7,891
|
2016
|
2015
|
2014
|
2013
|
2012
|
||||||||||||||||
Allowance for Credit Losses Beginning of Year
|
$
|
41,523
|
$
|
35,401
|
$
|
34,274
|
$
|
34,217
|
$
|
33,017
|
||||||||||
Provision Charged to Expense
|
6,335
|
750
|
1,175
|
425
|
1,850
|
|||||||||||||||
Charge-Offs:
|
||||||||||||||||||||
Commercial Real Estate
|
-
|
-
|
-
|
6
|
-
|
|||||||||||||||
Agricultural Real Estate
|
-
|
-
|
-
|
575
|
-
|
|||||||||||||||
Real Estate Construction
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Residential 1st Mortgages
|
21
|
-
|
73
|
16
|
152
|
|||||||||||||||
Home Equity Lines and Loans
|
46
|
-
|
70
|
91
|
259
|
|||||||||||||||
Agricultural
|
-
|
-
|
-
|
23
|
294
|
|||||||||||||||
Commercial
|
-
|
12
|
1
|
60
|
198
|
|||||||||||||||
Consumer & Other
|
105
|
84
|
132
|
120
|
145
|
|||||||||||||||
Total Charge-Offs
|
172
|
96
|
276
|
891
|
1,048
|
|||||||||||||||
Recoveries:
|
||||||||||||||||||||
Commercial Real Estate
|
2
|
2,939
|
11
|
-
|
-
|
|||||||||||||||
Agricultural Real Estate
|
-
|
-
|
-
|
-
|
90
|
|||||||||||||||
Real Estate Construction
|
-
|
2,225
|
-
|
-
|
-
|
|||||||||||||||
Residential 1st Mortgages
|
26
|
8
|
-
|
-
|
53
|
|||||||||||||||
Home Equity Lines and Loans
|
103
|
87
|
58
|
115
|
14
|
|||||||||||||||
Agricultural
|
-
|
4
|
8
|
42
|
61
|
|||||||||||||||
Commercial
|
47
|
136
|
86
|
312
|
117
|
|||||||||||||||
Consumer & Other
|
55
|
69
|
65
|
54
|
63
|
|||||||||||||||
Total Recoveries
|
233
|
5,468
|
228
|
523
|
398
|
|||||||||||||||
Net Recoveries (Charge-Offs)
|
61
|
5,372
|
(48
|
)
|
(368
|
)
|
(650
|
)
|
||||||||||||
Total Allowance for Credit Losses
|
$
|
47,919
|
$
|
41,523
|
$
|
35,401
|
$
|
34,274
|
$
|
34,217
|
||||||||||
Ratios:
|
||||||||||||||||||||
Allowance for Credit Losses to:
|
||||||||||||||||||||
Total Loans & Leases at Year End
|
2.19
|
%
|
2.07
|
%
|
2.06
|
%
|
2.00
|
%
|
2.46
|
%
|
||||||||||
Average Loans & Leases
|
2.34
|
%
|
2.30
|
%
|
2.36
|
%
|
2.70
|
%
|
2.89
|
%
|
||||||||||
Consolidated Net (Recoveries) Charge-Offs to:
|
||||||||||||||||||||
Total Loans & Leases at Year End
|
0.00
|
%
|
(0.27
|
%)
|
0.00
|
%
|
0.02
|
%
|
0.05
|
%
|
||||||||||
Average Loans & Leases
|
0.00
|
%
|
(0.30
|
%)
|
0.00
|
%
|
0.03
|
%
|
0.05
|
%
|
December 31, 2016
|
Commercial
Real Estate
|
Agricultural
Real Estate
|
Real Estate
Construction
|
Residential 1st
Mortgages
|
Home Equity
Lines & Loans
|
Agricultural
|
Commercial
|
Consumer &
Other
|
Leases
|
Unallocated
|
Total
|
|||||||||||||||||||||||||||||||||
Year-To-Date Allowance for Credit Losses:
|
||||||||||||||||||||||||||||||||||||||||||||
Beginning Balance- January 1, 2016
|
$
|
10,063
|
$
|
6,881
|
$
|
2,485
|
$
|
789
|
$
|
2,146
|
$
|
6,308
|
$
|
7,836
|
$
|
175
|
$
|
3,294
|
$
|
1,546
|
$
|
41,523
|
||||||||||||||||||||||
Charge-Offs
|
-
|
-
|
-
|
(21
|
)
|
(46
|
)
|
-
|
-
|
(105
|
)
|
-
|
-
|
(172
|
)
|
|||||||||||||||||||||||||||||
Recoveries
|
2
|
-
|
-
|
26
|
103
|
-
|
47
|
55
|
-
|
-
|
233
|
|||||||||||||||||||||||||||||||||
Provision
|
1,045
|
2,569
|
738
|
71
|
(63
|
)
|
1,073
|
632
|
75
|
292
|
(97
|
)
|
6,335
|
|||||||||||||||||||||||||||||||
Ending Balance- December 31, 2016
|
$
|
11,110
|
$
|
9,450
|
$
|
3,223
|
$
|
865
|
$
|
2,140
|
$
|
7,381
|
$
|
8,515
|
$
|
200
|
$
|
3,586
|
$
|
1,449
|
$
|
47,919
|
· |
Commercial Real Estate and Real Estate Construction allowance balances increased $1.7 million due to our assessment of the potential impact of rising interest rates on real estate prices in general and the affordability of single family residential real estate in particular.
|
· |
Agricultural and Agricultural Real Estate allowance balances increased $3.7 million due to our assessment of: (1) weakness in export markets due to a stronger dollar and proposed changes in trade policies; (2) tight labor markets and higher wages due to legislative changes at the state and federal levels; and (3) proposed changes in immigration policy and the resulting impact on the labor pool.
|
Allowance Allocation at December 31,
|
||||||||||||||||||||||||||||||||||||||||
(in thousands)
|
2016
Amount
|
Percent of
Loans in Each
Category to
Total Loans
|
2015
Amount
|
Percent of
Loans in Each
Category to
Total Loans
|
2014
Amount
|
Percent of
Loans in Each
Category to
Total Loans
|
2013
Amount
|
Percent of
Loans in Each
Category to
Total Loans
|
2012
Amount
|
Percent of
Loans in Each
Category to
Total Loans
|
||||||||||||||||||||||||||||||
Commercial Real Estate
|
$
|
11,110
|
30.9
|
%
|
$
|
10,063
|
30.4
|
%
|
$
|
7,842
|
28.9
|
%
|
$
|
5,178
|
29.5
|
%
|
$
|
6,464
|
28.3
|
%
|
||||||||||||||||||||
Agricultural Real Estate
|
9,450
|
21.4
|
%
|
6,881
|
21.2
|
%
|
4,185
|
20.8
|
%
|
3,576
|
23.6
|
%
|
2,877
|
25.0
|
%
|
|||||||||||||||||||||||||
Real Estate Construction
|
3,223
|
8.1
|
%
|
2,485
|
7.6
|
%
|
1,669
|
5.6
|
%
|
654
|
3.0
|
%
|
986
|
2.6
|
%
|
|||||||||||||||||||||||||
Residential 1st Mortgages
|
865
|
11.1
|
%
|
789
|
10.3
|
%
|
1,022
|
10.0
|
%
|
1,108
|
10.9
|
%
|
1,219
|
11.2
|
%
|
|||||||||||||||||||||||||
Home Equity Lines and Loans
|
2,140
|
1.4
|
%
|
2,146
|
1.7
|
%
|
2,426
|
1.9
|
%
|
2,767
|
2.5
|
%
|
3,235
|
3.4
|
%
|
|||||||||||||||||||||||||
Agricultural
|
7,381
|
13.5
|
%
|
6,308
|
14.7
|
%
|
6,104
|
16.4
|
%
|
12,205
|
18.4
|
%
|
10,437
|
17.7
|
%
|
|||||||||||||||||||||||||
Commercial
|
8,515
|
10.0
|
%
|
7,836
|
10.5
|
%
|
8,195
|
13.5
|
%
|
5,697
|
10.8
|
%
|
7,963
|
11.5
|
%
|
|||||||||||||||||||||||||
Consumer & Other
|
200
|
0.3
|
%
|
175
|
0.3
|
%
|
218
|
0.3
|
%
|
176
|
0.4
|
%
|
182
|
0.3
|
%
|
|||||||||||||||||||||||||
Leases
|
3,586
|
3.3
|
%
|
3,294
|
3.3
|
%
|
2,211
|
2.6
|
%
|
639
|
0.9
|
%
|
-
|
0.0
|
%
|
|||||||||||||||||||||||||
Unallocated
|
1,449
|
1,546
|
1,529
|
2,274
|
854
|
|||||||||||||||||||||||||||||||||||
Total
|
$
|
47,919
|
100.0
|
%
|
$
|
41,523
|
100.0
|
%
|
$
|
35,401
|
100.0
|
%
|
$
|
34,274
|
100.0
|
%
|
$
|
34,217
|
100.0
|
%
|
Available
for Sale
|
Held to
Maturity
|
Available
for Sale
|
Held to
Maturity
|
Available
for Sale
|
Held to
Maturity
|
|||||||||||||||||||
December 31:
(in thousands)
|
2016
|
2015
|
2014
|
|||||||||||||||||||||
U.S. Treasury Notes
|
$
|
134,428
|
$
|
-
|
$
|
72,884
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||||||
U.S. Government SBA
|
36,314
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Government Agency & Government Sponsored Entities
|
3,241
|
-
|
33,251
|
-
|
78,109
|
-
|
||||||||||||||||||
Obligations of States and Political Subdivisions - Non-Taxable
|
-
|
58,109
|
-
|
61,396
|
-
|
61,716
|
||||||||||||||||||
Mortgage Backed Securities
|
273,270
|
-
|
262,493
|
-
|
287,948
|
-
|
||||||||||||||||||
Other
|
1,010
|
-
|
509
|
-
|
485
|
2,147
|
||||||||||||||||||
Total Book Value
|
$
|
448,263
|
$
|
58,109
|
$
|
369,137
|
$
|
61,396
|
$
|
366,542
|
$
|
63,863
|
||||||||||||
Fair Value
|
$
|
448,263
|
$
|
58,408
|
$
|
369,137
|
$
|
62,388
|
$
|
366,542
|
$
|
64,635
|
December 31, 2016
(in thousands)
|
Fair
Value
|
Average
Yield
|
||||||
U.S. Treasury
|
||||||||
One year or less
|
$
|
64,993
|
0.33
|
%
|
||||
After one year through five years
|
60,236
|
1.34
|
%
|
|||||
After five years through ten years
|
9,199
|
2.14
|
%
|
|||||
Total U.S. Treasury Securities
|
134,428
|
0.91
|
%
|
|||||
U.S. Government SBA
|
||||||||
One year or less
|
138
|
2.24
|
%
|
|||||
After one year through five years
|
2,638
|
1.68
|
%
|
|||||
After five years through ten years
|
4,590
|
1.99
|
%
|
|||||
After ten years
|
28,948
|
1.61
|
%
|
|||||
Total U.S. Government Securities
|
36,314
|
1.67
|
%
|
|||||
Government Agency & Government Sponsored Entities
|
||||||||
After one year through five years
|
3,241
|
2.86
|
%
|
|||||
Total Government Agency & Government Sponsored Entities
|
3,241
|
2.86
|
%
|
|||||
Other
|
||||||||
One year or less
|
1,010
|
2.25
|
%
|
|||||
Total Other Securities
|
1,010
|
2.25
|
%
|
|||||
Mortgage Backed Securities
|
273,270
|
2.30
|
%
|
|||||
Total Investment Securities Available-for-Sale
|
$
|
448,263
|
1.84
|
%
|
December 31, 2016
(in thousands)
|
Book
Value
|
Average
Yield
|
||||||
Obligations of States and Political Subdivisions - Non-Taxable
|
||||||||
One year or less
|
$
|
1,905
|
4.67
|
%
|
||||
After one year through five years
|
9,530
|
5.26
|
%
|
|||||
After five years through ten years
|
12,699
|
3.92
|
%
|
|||||
After ten years
|
33,975
|
5.19
|
%
|
|||||
Total Obligations of States and Political Subdivisions - Non-Taxable
|
58,109
|
4.91
|
%
|
|||||
Total Investment Securities Held-to-Maturity
|
$
|
58,109
|
4.91
|
%
|
2016
|
2015
|
2014
|
2013
|
2012
|
||||||||||||||||||||||||||||||||||||
(in thousands)
|
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
||||||||||||||||||||||||||||||
Commercial Real Estate
|
$
|
674,445
|
30.9
|
%
|
$
|
609,602
|
30.4
|
%
|
$
|
495,316
|
28.9
|
%
|
$
|
411,037
|
29.5
|
%
|
$
|
353,109
|
28.3
|
%
|
||||||||||||||||||||
Agricultural Real Estate
|
467,685
|
21.4
|
%
|
424,034
|
21.2
|
%
|
357,207
|
20.8
|
%
|
328,264
|
23.6
|
%
|
311,992
|
25.0
|
%
|
|||||||||||||||||||||||||
Real Estate Construction
|
176,462
|
8.1
|
%
|
151,974
|
7.6
|
%
|
96,519
|
5.6
|
%
|
41,092
|
3.0
|
%
|
32,680
|
2.6
|
%
|
|||||||||||||||||||||||||
Residential 1st Mortgages
|
242,247
|
11.1
|
%
|
206,405
|
10.3
|
%
|
171,880
|
10.0
|
%
|
151,292
|
10.9
|
%
|
140,257
|
11.2
|
%
|
|||||||||||||||||||||||||
Home Equity Lines and Loans
|
31,625
|
1.4
|
%
|
33,056
|
1.7
|
%
|
33,017
|
1.9
|
%
|
35,477
|
2.5
|
%
|
42,042
|
3.4
|
%
|
|||||||||||||||||||||||||
Agricultural
|
295,325
|
13.5
|
%
|
293,966
|
14.7
|
%
|
281,963
|
16.4
|
%
|
256,414
|
18.4
|
%
|
221,032
|
17.7
|
%
|
|||||||||||||||||||||||||
Commercial
|
217,577
|
10.0
|
%
|
210,804
|
10.5
|
%
|
230,819
|
13.5
|
%
|
150,398
|
10.8
|
%
|
143,293
|
11.5
|
%
|
|||||||||||||||||||||||||
Consumer & Other
|
6,913
|
0.3
|
%
|
6,592
|
0.3
|
%
|
4,719
|
0.3
|
%
|
5,052
|
0.4
|
%
|
5,058
|
0.3
|
%
|
|||||||||||||||||||||||||
Leases
|
70,986
|
3.3
|
%
|
65,054
|
3.3
|
%
|
44,217
|
2.6
|
%
|
12,733
|
0.9
|
%
|
-
|
0.0
|
%
|
|||||||||||||||||||||||||
Total Gross Loans & Leases
|
2,183,265
|
100.0
|
%
|
2,001,487
|
100.0
|
%
|
1,715,657
|
100.0
|
%
|
1,391,759
|
100.0
|
%
|
1,249,463
|
100.0
|
%
|
|||||||||||||||||||||||||
Less: Unearned Income
|
5,664
|
5,128
|
3,413
|
3,523
|
2,561
|
|||||||||||||||||||||||||||||||||||
Subtotal
|
2,177,601
|
1,996,359
|
1,712,244
|
1,388,236
|
1,246,902
|
|||||||||||||||||||||||||||||||||||
Less: Allowance for Credit Losses
|
47,919
|
41,523
|
35,401
|
34,274
|
34,217
|
|||||||||||||||||||||||||||||||||||
Loans & Leases, Net
|
$
|
2,129,682
|
$
|
1,954,836
|
$
|
1,676,843
|
$
|
1,353,962
|
$
|
1,212,685
|
(in thousands)
|
One Year
or Less
|
Over One
Year to
Five
Years
|
Over
Five
Years
|
Total
|
||||||||||||
Commercial Real Estate
|
$
|
62,685
|
$
|
165,090
|
$
|
440,271
|
$
|
668,046
|
||||||||
Agricultural Real Estate
|
17,987
|
79,448
|
370,250
|
467,685
|
||||||||||||
Real Estate Construction
|
92,885
|
79,076
|
4,501
|
176,462
|
||||||||||||
Residential 1st Mortgages
|
10
|
4,769
|
237,468
|
242,247
|
||||||||||||
Home Equity Lines and Loans
|
23
|
782
|
30,820
|
31,625
|
||||||||||||
Agricultural
|
171,913
|
98,122
|
25,290
|
295,325
|
||||||||||||
Commercial
|
74,462
|
105,347
|
37,768
|
217,577
|
||||||||||||
Consumer & Other
|
853
|
4,389
|
1,671
|
6,913
|
||||||||||||
Leases
|
631
|
23,372
|
47,718
|
71,721
|
||||||||||||
Total
|
$
|
421,449
|
$
|
560,395
|
$
|
1,195,757
|
$
|
2,177,601
|
||||||||
Rate Sensitivity:
|
||||||||||||||||
Fixed Rate
|
$
|
57,246
|
$
|
216,047
|
$
|
505,545
|
$
|
778,838
|
||||||||
Variable Rate
|
364,204
|
344,347
|
690,212
|
1,398,763
|
||||||||||||
Total
|
$
|
421,450
|
$
|
560,394
|
$
|
1,195,757
|
$
|
2,177,601
|
||||||||
Percent
|
19.36
|
%
|
25.73
|
%
|
54.91
|
%
|
100.00
|
%
|
December 31,
|
||||||||||||||||||||
(in thousands)
|
2016
|
2015
|
2014
|
2013
|
2012
|
|||||||||||||||
Non-Accrual Loans & Leases
|
||||||||||||||||||||
Commercial Real Estate
|
$
|
-
|
$
|
19
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||||
Agricultural Real Estate
|
1,304
|
-
|
-
|
-
|
5,423
|
|||||||||||||||
Real Estate Construction
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Residential 1st Mortgages
|
95
|
65
|
77
|
324
|
445
|
|||||||||||||||
Home Equity Lines and Loans
|
-
|
538
|
576
|
406
|
213
|
|||||||||||||||
Agricultural
|
243
|
-
|
18
|
35
|
3,198
|
|||||||||||||||
Commercial
|
1,426
|
1,524
|
1,586
|
1,815
|
-
|
|||||||||||||||
Consumer & Other
|
6
|
10
|
13
|
16
|
19
|
|||||||||||||||
Total Non-Accrual Loans & Leases
|
3,074
|
2,156
|
2,270
|
2,596
|
9,298
|
|||||||||||||||
Accruing Loans & Leases Past Due 90 Days or More
|
||||||||||||||||||||
Commercial Real Estate
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Agricultural Real Estate
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Real Estate Construction
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Residential 1st Mortgages
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Home Equity Lines and Loans
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Agricultural
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Commercial
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Consumer & Other
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Total Accruing Loans & Leases Past Due 90 Days or More
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Total Non-Performing Loans & Leases
|
$
|
3,074
|
$
|
2,156
|
$
|
2,270
|
$
|
2,596
|
$
|
9,298
|
||||||||||
Other Real Estate Owned
|
$
|
3,745
|
$
|
2,441
|
$
|
3,299
|
$
|
4,611
|
$
|
2,553
|
||||||||||
Total Non-Performing Assets
|
$
|
6,819
|
$
|
4,597
|
$
|
5,569
|
$
|
7,207
|
$
|
11,851
|
||||||||||
Restructured Loans & Leases (Performing)
|
$
|
4,462
|
$
|
4,953
|
$
|
4,955
|
$
|
4,649
|
$
|
2,300
|
||||||||||
Non-Performing Loans & Leases as a Percent of Total Loans & Leases
|
0.14
|
%
|
0.11
|
%
|
0.13
|
%
|
0.19
|
%
|
0.74
|
%
|
· |
The Central Valley was one of the hardest hit areas in the country during the recession. In many areas housing prices declined as much as 60% and unemployment reached 15% or more. Although the economy has improved throughout most of the Central Valley, housing prices for the most part still remain below peak levels and unemployment levels remain above those in other areas of the state and country.
|
· |
The State of California experienced drought conditions from 2013 through most of 2016. Although significant levels of rain and snow in late 2016 and early 2017 have alleviated drought conditions this year in many areas of California, including those in the Company’s primary service area, the long-term risks associated with the availability of water continue to exist. See “Item 1A. Risk Factors” for additional information.
|
· |
The agricultural industry is facing challenges associated with: (1) weakness in export markets due to a stronger dollar and proposed changes in trade policies; (2) tight labor markets and higher wages due to legislative changes at the state and federal levels; and (3) proposed changes in immigration policy and the resulting impact on the labor pool.
|
(in thousands)
|
||||
Time Deposits of $250,000 or More
|
||||
Three Months or Less
|
$
|
164,342
|
||
Over Three Months Through Six Months
|
61,045
|
|||
Over Six Months Through Twelve Months
|
36,009
|
|||
Over Twelve Months
|
28,559
|
|||
Total Time Deposits of $250,000 or More
|
$
|
289,955
|
· |
Demand and interest-bearing transaction accounts increased $162.7 million or 14.9% since December 31, 2015.
|
· |
Savings and money market accounts have increased $52.2 million or 7.4% since December 31, 2015.
|
· |
Time deposit accounts have increased $89.3 million or 18.6% since December 31, 2015.
|
(in thousands)
|
December 31, 2016
|
December 31, 2015
|
||||||
Commitments to Extend Credit
|
$
|
609,653
|
$
|
708,122
|
||||
Letters of Credit
|
20,444
|
14,745
|
||||||
Performance Guarantees Under Interest Rate Swap Contracts Entered Into Between Our Borrowing Customers and Third Parties
|
1,835
|
2,758
|
(in thousands)
|
Total
|
1 Year or
Less
|
2-3 Years
|
4-5 Years
|
More Than 5
Years
|
|||||||||||||||
Operating Lease Obligations
|
$
|
2,974
|
$
|
618
|
$
|
1,128
|
$
|
973
|
$
|
255
|
||||||||||
Long-Term Subordinated Debentures
|
10,310
|
-
|
-
|
-
|
10,310
|
|||||||||||||||
Deferred Compensation
(1)
|
49,819
|
1,532
|
11,030
|
1,368
|
35,889
|
|||||||||||||||
Total
|
$
|
63,103
|
$
|
2,150
|
$
|
12,158
|
$
|
2,341
|
$
|
46,454
|
(1)
|
These amounts represent obligations to participants under the Company's various non-qualified deferred compensation plans. All amounts have been fully funded in to a Rabbi Trust as of December 31, 2016. See Note 17 located in “Item 8. Financial Statements and Supplementary Data.”
|
2016
(in thousands except per share data)
|
First
Quarter
|
Second
Quarter
|
Third
Quarter
|
Fourth
Quarter
|
Total
|
|||||||||||||||
Total Interest Income
|
$
|
24,026
|
$
|
24,314
|
$
|
25,262
|
$
|
25,664
|
$
|
99,266
|
||||||||||
Total Interest Expense
|
920
|
951
|
1,110
|
1,215
|
4,196
|
|||||||||||||||
Net Interest Income
|
23,106
|
23,363
|
24,152
|
24,449
|
95,070
|
|||||||||||||||
Provision for Credit Losses
|
2,600
|
-
|
250
|
3,485
|
6,335
|
|||||||||||||||
Net Interest Income After Provision for Credit Losses
|
20,506
|
23,363
|
23,902
|
20,964
|
88,735
|
|||||||||||||||
Total Non-Interest Income
|
2,721
|
2,875
|
4,553
|
5,108
|
15,257
|
|||||||||||||||
Total Non-Interest Expense
|
12,019
|
14,737
|
16,414
|
15,002
|
58,172
|
|||||||||||||||
Income Before Income Taxes
|
11,208
|
11,501
|
12,041
|
11,070
|
45,820
|
|||||||||||||||
Provision for Income Taxes
|
4,036
|
4,169
|
4,503
|
3,389
|
16,097
|
|||||||||||||||
Net Income
|
$
|
7,172
|
$
|
7,332
|
$
|
7,538
|
$
|
7,681
|
$
|
29,723
|
||||||||||
Basic Earnings Per Common Share
|
$
|
9.06
|
$
|
9.25
|
$
|
9.51
|
$
|
9.62
|
$
|
37.44
|
2015
(in thousands except per share data)
|
First
Quarter
|
Second
Quarter
|
Third
Quarter
|
Fourth
Quarter
|
Total
|
|||||||||||||||
Total Interest Income
|
$
|
21,293
|
$
|
21,756
|
$
|
23,038
|
$
|
23,988
|
$
|
90,075
|
||||||||||
Total Interest Expense
|
792
|
835
|
860
|
838
|
3,325
|
|||||||||||||||
Net Interest Income
|
20,501
|
20,921
|
22,178
|
23,150
|
86,750
|
|||||||||||||||
Provision for Credit Losses
|
600
|
50
|
-
|
100
|
750
|
|||||||||||||||
Net Interest Income After Provision for Credit Losses
|
19,901
|
20,871
|
22,178
|
23,050
|
86,000
|
|||||||||||||||
Total Non-Interest Income
|
4,664
|
2,826
|
3,710
|
3,375
|
14,575
|
|||||||||||||||
Total Non-Interest Expense
|
14,218
|
12,761
|
14,488
|
14,792
|
56,259
|
|||||||||||||||
Income Before Income Taxes
|
10,347
|
10,936
|
11,400
|
11,633
|
44,316
|
|||||||||||||||
Provision for Income Taxes
|
3,944
|
4,187
|
4,360
|
4,433
|
16,924
|
|||||||||||||||
Net Income
|
$
|
6,403
|
$
|
6,749
|
$
|
7,040
|
$
|
7,200
|
$
|
27,392
|
||||||||||
Basic Earnings Per Common Share
|
$
|
8.15
|
$
|
8.59
|
$
|
8.96
|
$
|
9.12
|
$
|
34.82
|
§ |
general economic and business conditions affecting the key service areas of the Company;
|
§ |
credit quality trends (including trends in collateral values, delinquencies and non-performing loans & leases);
|
§ |
loan & lease volumes, growth rates and concentrations;
|
§ |
loan & lease portfolio seasoning;
|
§ |
specific industry and crop conditions;
|
§ |
recent loss experience; and
|
§ |
duration of the current business cycle.
|
Page
|
||
Report of Management on Internal Control Over Financial Reporting
|
61
|
|
Reports of Independent Registered Public Accounting Firm
|
62
|
|
Consolidated Financial Statements
|
||
Consolidated Balance Sheets – December 31, 2016, and 2015
|
63
|
|
Consolidated Statements of Income – Years ended December 31, 2016, 2015 and 2014
|
64
|
|
Consolidated Statements of Comprehensive Income – Years Ended December 31, 2016, 2015 and 2014
|
65
|
|
Consolidated Statements of Changes in Shareholders' Equity – Years ended December 31, 2016, 2015 and 2014
|
66
|
|
Consolidated Statements of Cash Flows - Years Ended December 31, 2016, 2015 and 2014
|
67
|
|
Notes to Consolidated Financial Statements
|
68
|
/s/ Kent A. Steinwert
|
/s/ Stephen W. Haley
|
Kent A. Steinwert
|
Stephen W. Haley
|
Chairman, President & Chief Executive Officer
|
Executive Vice President & Chief Financial Officer
|
December 31,
|
||||||||
Assets
|
2016
|
2015
|
||||||
Cash and Cash Equivalents:
|
||||||||
Cash and Due from Banks
|
$
|
54,896
|
$
|
49,913
|
||||
Interest Bearing Deposits with Banks
|
43,964
|
9,533
|
||||||
Total Cash and Cash Equivalents
|
98,860
|
59,446
|
||||||
Investment Securities:
|
||||||||
Available-for-Sale
|
448,263
|
369,137
|
||||||
Held-to-Maturity
|
58,109
|
61,396
|
||||||
Total Investment Securities
|
506,372
|
430,533
|
||||||
Loans & Leases:
|
2,177,601
|
1,996,359
|
||||||
Less: Allowance for Credit Losses
|
47,919
|
41,523
|
||||||
Loans& Leases, Net
|
2,129,682
|
1,954,836
|
||||||
Premises and Equipment, Net
|
29,229
|
26,575
|
||||||
Bank Owned Life Insurance
|
57,761
|
55,898
|
||||||
Interest Receivable and Other Assets
|
100,217
|
88,057
|
||||||
Total Assets
|
$
|
2,922,121
|
$
|
2,615,345
|
||||
Liabilities
|
||||||||
Deposits:
|
||||||||
Demand
|
$
|
756,236
|
$
|
711,029
|
||||
Interest-Bearing Transaction
|
495,063
|
377,594
|
||||||
Savings and Money Market
|
760,119
|
707,885
|
||||||
Time
|
570,293
|
481,024
|
||||||
Total Deposits
|
2,581,711
|
2,277,532
|
||||||
Subordinated Debentures
|
10,310
|
10,310
|
||||||
Interest Payable and Other Liabilities
|
50,119
|
75,668
|
||||||
Total Liabilities
|
2,642,140
|
2,363,510
|
||||||
Commitments & Contingencies (See Note 20)
|
||||||||
Shareholders' Equity
|
||||||||
Preferred Stock: No Par Value, 1,000,000 Shares Authorized, None Issued or Outstanding
|
-
|
-
|
||||||
Common Stock: Par Value $0.01, 7,500,000 Shares Authorized, 807,329 and 790,787 Shares Issued and Outstanding at December 31, 2016 and 2015, respectively.
|
8
|
8
|
||||||
Additional Paid-In Capital
|
90,671
|
81,164
|
||||||
Retained Earnings
|
189,313
|
170,068
|
||||||
Accumulated Other Comprehensive Income
|
(11
|
)
|
595
|
|||||
Total Shareholders' Equity
|
279,981
|
251,835
|
||||||
Total Liabilities and Shareholders' Equity
|
$
|
2,922,121
|
$
|
2,615,345
|
Year Ended December 31,
|
||||||||||||
2016
|
2015
|
2014
|
||||||||||
Interest Income
|
||||||||||||
Interest and Fees on Loans & Leases
|
$
|
91,570
|
$
|
81,558
|
$
|
71,310
|
||||||
Interest on Deposits with Banks
|
287
|
172
|
158
|
|||||||||
Interest on Investment Securities:
|
||||||||||||
Taxable
|
5,505
|
6,311
|
7,739
|
|||||||||
Exempt from Federal Tax
|
1,904
|
2,034
|
2,314
|
|||||||||
Total Interest Income
|
99,266
|
90,075
|
81,521
|
|||||||||
Interest Expense
|
||||||||||||
Deposits
|
3,807
|
2,989
|
2,486
|
|||||||||
Borrowed Funds
|
18
|
7
|
5
|
|||||||||
Subordinated Debentures
|
371
|
329
|
322
|
|||||||||
Total Interest Expense
|
4,196
|
3,325
|
2,813
|
|||||||||
Net Interest Income
|
95,070
|
86,750
|
78,708
|
|||||||||
Provision for Credit Losses
|
6,335
|
750
|
1,175
|
|||||||||
Net Interest Income After Provision for Credit Losses
|
88,735
|
86,000
|
77,533
|
|||||||||
Non-Interest Income
|
||||||||||||
Service Charges on Deposit Accounts
|
3,376
|
3,458
|
3,923
|
|||||||||
Net (Loss) Gain on Investment Securities
|
(284
|
)
|
275
|
90
|
||||||||
Increase in Cash Surrender Value of Life Insurance
|
1,864
|
1,908
|
1,881
|
|||||||||
Debit Card and ATM Fees
|
3,398
|
3,183
|
3,087
|
|||||||||
Net Gain on Deferred Compensation Investments
|
1,999
|
1,375
|
2,129
|
|||||||||
Bargain Purchase Gain
|
1,832
|
-
|
-
|
|||||||||
Other
|
3,072
|
4,376
|
3,219
|
|||||||||
Total Non-Interest Income
|
15,257
|
14,575
|
14,329
|
|||||||||
Non-Interest Expense
|
||||||||||||
Salaries and Employee Benefits
|
41,981
|
39,683
|
36,446
|
|||||||||
Net Gain on Deferred Compensation Investments
|
1,999
|
1,375
|
2,129
|
|||||||||
Occupancy
|
2,985
|
2,884
|
2,690
|
|||||||||
Equipment
|
3,493
|
3,162
|
2,794
|
|||||||||
Marketing
|
1,191
|
1,254
|
353
|
|||||||||
Legal
|
1,243
|
421
|
128
|
|||||||||
FDIC Insurance
|
1,174
|
1,193
|
1,048
|
|||||||||
Gain on Sale of ORE
|
(5,941
|
)
|
(299
|
)
|
-
|
|||||||
Other
|
10,047
|
6,586
|
5,778
|
|||||||||
Total Non-Interest Expense
|
58,172
|
56,259
|
51,366
|
|||||||||
Income Before Income Taxes
|
45,820
|
44,316
|
40,496
|
|||||||||
Provision for Income Taxes
|
16,097
|
16,924
|
15,094
|
|||||||||
Net Income
|
$
|
29,723
|
$
|
27,392
|
$
|
25,402
|
||||||
Basic Earnings Per Common Share
|
$
|
37.44
|
$
|
34.82
|
$
|
32.64
|
Year Ended December 31,
|
||||||||||||
2016
|
2015
|
2014
|
||||||||||
Net Income
|
$
|
29,723
|
$
|
27,392
|
$
|
25,402
|
||||||
Other Comprehensive (Loss) Income
|
||||||||||||
(Decrease) Increase in Net Unrealized (Loss) Gain on Available-for-Sale Securities
|
(1,330
|
)
|
(3,069
|
)
|
8,719
|
|||||||
Deferred Tax Benefit (Expense) Related to Unrealized Gains (Losses)
|
559
|
1,290
|
(3,666
|
)
|
||||||||
Reclassification Adjustment for Realized Loss (Gain) on Available-for-Sale Securities Included in Net Income
|
284
|
(275
|
)
|
(90
|
)
|
|||||||
Tax (Benefit) Expense Related to Reclassification Adjustment
|
(119
|
)
|
116
|
38
|
||||||||
Change in Net Unrealized (Loss) Gain on Available-for-Sale Securities, Net of Tax
|
(606
|
)
|
(1,938
|
)
|
5,001
|
|||||||
Total Other Comprehensive (Loss) Income
|
(606
|
)
|
(1,938
|
)
|
5,001
|
|||||||
Comprehensive Income
|
$
|
29,117
|
$
|
25,454
|
$
|
30,403
|
Common
Shares
Outstanding
|
Common
Stock
|
Additional
Paid-In
Capital
|
Retained
Earnings
|
Accumulated
Other
Comprehensive
(Loss) Income
|
Total
Shareholders'
Equity
|
|||||||||||||||||||
Balance, January 1, 2014
|
777,882
|
$
|
8
|
$
|
75,014
|
$
|
137,350
|
$
|
(2,468
|
)
|
$
|
209,904
|
||||||||||||
Net Income
|
25,402
|
25,402
|
||||||||||||||||||||||
Cash Dividends Declared on Common Stock ($12.70 per share)
|
(9,919
|
)
|
(9,919
|
)
|
||||||||||||||||||||
Issuance of Common Stock
|
6,200
|
2,790
|
2,790
|
|||||||||||||||||||||
Change in Net Unrealized (Loss) on Securities Available-for-Sale
|
5,001
|
5,001
|
||||||||||||||||||||||
Balance, December 31, 2014
|
784,082
|
$
|
8
|
$
|
77,804
|
$
|
152,833
|
$
|
2,533
|
$
|
233,178
|
|||||||||||||
Net Income
|
27,392
|
27,392
|
||||||||||||||||||||||
Cash Dividends Declared on Common Stock ($12.90 per share)
|
(10,157
|
)
|
(10,157
|
)
|
||||||||||||||||||||
Issuance of Common Stock
|
6,705
|
3,360
|
3,360
|
|||||||||||||||||||||
Change in Net Unrealized Gain on Securities Available-for-Sale
|
(1,938
|
)
|
(1,938
|
)
|
||||||||||||||||||||
Balance, December 31, 2015
|
790,787
|
$
|
8
|
$
|
81,164
|
$
|
170,068
|
$
|
595
|
$
|
251,835
|
|||||||||||||
Net Income
|
29,723
|
29,723
|
||||||||||||||||||||||
Cash Dividends Declared on Common Stock ($13.10 per share)
|
(10,478
|
)
|
(10,478
|
)
|
||||||||||||||||||||
Issuance of Common Stock
|
16,542
|
9,507
|
9,507
|
|||||||||||||||||||||
Change in Net Unrealized (Loss) on Securities Available-for-Sale
|
(606
|
)
|
(606
|
)
|
||||||||||||||||||||
Balance, December 31, 2016
|
807,329
|
$
|
8
|
$
|
90,671
|
$
|
189,313
|
$
|
(11
|
)
|
$
|
279,981
|
Year Ended December 31,
|
||||||||||||
2016
|
2015
|
2014
|
||||||||||
Operating Activities
|
||||||||||||
Net Income
|
$
|
29,723
|
$
|
27,392
|
$
|
25,402
|
||||||
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
|
||||||||||||
Provision for Credit Losses
|
6,335
|
750
|
1,175
|
|||||||||
Depreciation and Amortization
|
1,896
|
1,685
|
1,325
|
|||||||||
Provision for Deferred Income Taxes
|
(2,299
|
)
|
(907
|
)
|
6,436
|
|||||||
Net Amortization of Investment Security Premium & Discounts
|
1,481
|
1,554
|
1,659
|
|||||||||
Amortization of Core Deposit Intangible
|
13
|
-
|
-
|
|||||||||
Accretion of Discount on Acquired Loans
|
(43
|
)
|
-
|
-
|
||||||||
Net Loss (Gain) on Investment Securities
|
284
|
(275
|
)
|
(90
|
)
|
|||||||
Net Loss (Gain) on Sale of Property & Equipment
|
71
|
(383
|
)
|
(22
|
)
|
|||||||
Net Gain on sale of ORE
|
(5,941
|
)
|
(299
|
)
|
-
|
|||||||
Net Gain from Acquisition
|
(1,832
|
)
|
-
|
-
|
||||||||
Net Change in Operating Assets & Liabilities:
|
||||||||||||
Net Decrease (Increase) in Interest Receivable and Other Assets
|
1,056
|
4,685
|
(15,070
|
)
|
||||||||
Net Increase in Interest Payable and Other Liabilities
|
4,068
|
3,125
|
5,600
|
|||||||||
Net Cash Provided by Operating Activities
|
34,812
|
37,327
|
26,415
|
|||||||||
Investing Activities
|
||||||||||||
Purchase of Investment Securities Available-for-Sale
|
(497,797
|
)
|
(203,996
|
)
|
(132,619
|
)
|
||||||
Proceeds from Sold, Matured, or Called Securities Available-for-Sale
|
426,142
|
227,157
|
177,324
|
|||||||||
Purchase of Investment Securities Held-to-Maturity
|
(2,264
|
)
|
(17,747
|
)
|
(17,692
|
)
|
||||||
Proceeds from Matured, or Called Securities Held-to-Maturity
|
5,499
|
18,031
|
22,628
|
|||||||||
Net Loans & Leases Paid, Originated or Acquired
|
(148,960
|
)
|
(284,211
|
)
|
(324,284
|
)
|
||||||
Principal Collected on Loans & Leases Previously Charged Off
|
232
|
5,468
|
228
|
|||||||||
Cash Acquired in Acquisition, Net of Cash Paid
|
31,751
|
-
|
-
|
|||||||||
Additions to Premises and Equipment
|
(1,504
|
)
|
(2,726
|
)
|
(4,274
|
)
|
||||||
Purchase of Other Investment
|
(6,825
|
)
|
(2,110
|
)
|
(778
|
)
|
||||||
Proceeds from Sale of Property & Equipment
|
-
|
670
|
37
|
|||||||||
Proceeds from Sale of ORE
|
8,282
|
1,156
|
-
|
|||||||||
Net Cash Used by Investing Activities
|
(185,444
|
)
|
(258,308
|
)
|
(279,430
|
)
|
||||||
Financing Activities
|
||||||||||||
Net Increase in Deposits
|
200,524
|
213,459
|
256,382
|
|||||||||
Cash Dividends
|
(10,478
|
)
|
(10,157
|
)
|
(9,919
|
)
|
||||||
Net Cash Provided by Financing Activities
|
190,046
|
203,302
|
246,463
|
|||||||||
Increase (Decrease) in Cash and Cash Equivalents
|
39,414
|
(17,679
|
)
|
(6,552
|
)
|
|||||||
Cash and Cash Equivalents at Beginning of Year
|
59,446
|
77,125
|
83,677
|
|||||||||
Cash and Cash Equivalents at End of Year
|
$
|
98,860
|
$
|
59,446
|
$
|
77,125
|
||||||
Supplementary Data
|
||||||||||||
Loans Transferred to Foreclosed Assets (ORE)
|
$
|
538
|
$
|
-
|
$
|
-
|
||||||
Cash Payments Made for Income Taxes
|
$
|
12,891
|
$
|
8,475
|
$
|
15,030
|
||||||
Issuance of Common Stock to the Bank's Non-Qualified Retirement Plans
|
$
|
2,586
|
$
|
3,360
|
$
|
2,790
|
||||||
Interest Paid
|
$
|
3,856
|
$
|
3,190
|
$
|
2,787
|
||||||
Acquisitions:
|
||||||||||||
Fair Value of Assets Acquired
|
$
|
114,871
|
$
|
-
|
$
|
-
|
||||||
Fair Value of Liabilities Acquired
|
$
|
103,861
|
$
|
-
|
$
|
-
|
||||||
Issuance of Common Stock to Acquired Bank's Shareholders
|
$
|
6,921
|
$
|
-
|
$
|
-
|
1.
|
Significant Accounting Policies
|
2.
|
Business Combinations
|
Delta National Bancorp
|
||||||||
(in thousands)
|
Book Value
|
Fair Value
|
||||||
Assets Acquired:
|
||||||||
Cash and Cash Equivalents
|
$
|
34,009
|
$
|
34,009
|
||||
Investments
|
38,727
|
38,727
|
||||||
Loans
|
32,885
|
32,410
|
||||||
Core Deposit Intangible
|
-
|
959
|
||||||
Deferred Tax Asset
|
-
|
893
|
||||||
Other Assets
|
6,263
|
7,873
|
||||||
Total Assets Acquired
|
$
|
111,884
|
$
|
114,871
|
||||
Liabilities Assumed
|
||||||||
Deposits:
|
||||||||
Demand
|
35,106
|
35,106
|
||||||
Interest-Bearing Transaction
|
20,572
|
20,572
|
||||||
Savings and Money Market
|
33,091
|
33,091
|
||||||
Time
|
14,930
|
14,930
|
||||||
Total Deposits
|
$
|
103,699
|
$
|
103,699
|
||||
Other Liabilities
|
161
|
161
|
||||||
Total liabilities assumed
|
$
|
103,860
|
$
|
103,860
|
||||
Cash Paid
|
2,258
|
|||||||
Fair Value of Common Stock Issued
|
6,921
|
|||||||
Total Merger Consideration
|
$
|
9,179
|
(in thousands)
|
Acquisition Date
November 18, 2016
|
|||
Book Value of Net Assets Acquired
|
$
|
8,024
|
||
Fair Value Adjustments:
|
||||
Loans
|
(1,063
|
)
|
||
Reversal of Allowance for Loan Loss
|
588
|
|||
Core Deposit Intangible Asset
|
959
|
|||
Other Assets & Liabilities, net
|
1,610
|
|||
Total Purchase Accounting Adjustments
|
$
|
2,094
|
||
Deferred Tax Asset (tax effect of purchase accounting adjustments at 42%)
|
(880
|
)
|
||
DTA Carryforward
|
1,773
|
|||
Fair Value of Net Assets Acquired
|
$
|
11,011
|
||
Fair Value of Net Assets Acquired
|
11,011
|
|||
Less Merger Consideration
|
(9,179
|
)
|
||
Bargain Purchase Gain
|
$
|
1,832
|
3.
|
Investment Securities
|
Amortized
|
Gross Unrealized
|
Fair/Book
|
||||||||||||||
December 31, 2016
|
Cost
|
Gains
|
Losses
|
Value
|
||||||||||||
Government Agency & Government-Sponsored Entities
|
$
|
3,127
|
$
|
114
|
$
|
-
|
$
|
3,241
|
||||||||
US Treasury Notes
|
134,755
|
5
|
332
|
134,428
|
||||||||||||
US Govt SBA
|
36,532
|
42
|
260
|
36,314
|
||||||||||||
Mortgage Backed Securities
(1)
|
272,858
|
1,725
|
1,313
|
273,270
|
||||||||||||
Other
|
1,010
|
-
|
-
|
1,010
|
||||||||||||
Total
|
$
|
448,282
|
$
|
1,886
|
$
|
1,905
|
$
|
448,263
|
Amortized
|
Gross Unrealized
|
Fair/Book
|
||||||||||||||
December 31, 2015
|
Cost
|
Gains
|
Losses
|
Value
|
||||||||||||
Government Agency & Government-Sponsored Entities
|
$
|
33,536
|
$
|
134
|
$
|
419
|
$
|
33,251
|
||||||||
US Treasury Notes
|
73,048
|
-
|
164
|
72,884
|
||||||||||||
Mortgage Backed Securities
(1)
|
261,016
|
2,708
|
1,231
|
262,493
|
||||||||||||
Other
|
509
|
-
|
-
|
509
|
||||||||||||
Total
|
$
|
368,109
|
$
|
2,842
|
$
|
1,814
|
$
|
369,137
|
Book
|
Gross Unrealized
|
Fair
|
||||||||||||||
December 31, 2016
|
Value
|
Gains
|
Losses
|
Value
|
||||||||||||
Obligations of States and Political Subdivisions
|
$
|
58,109
|
$
|
339
|
$
|
40
|
$
|
58,408
|
||||||||
Total
|
$
|
58,109
|
$
|
339
|
$
|
40
|
$
|
58,408
|
Book
|
Gross Unrealized
|
Fair
|
||||||||||||||
December 31, 2015
|
Value
|
Gains
|
Losses
|
Value
|
||||||||||||
Obligations of States and Political Subdivisions
|
$
|
61,396
|
$
|
993
|
$
|
1
|
$
|
62,388
|
||||||||
Total
|
$
|
61,396
|
$
|
993
|
$
|
1
|
$
|
62,388
|
Available-for-Sale
|
Held-to-Maturity
|
|||||||||||||||
December 31, 2016
|
Amortized
Cost
|
Fair/Book
Value
|
Book
Value
|
Fair
Value
|
||||||||||||
Within One Year
|
$
|
66,137
|
$
|
66,141
|
$
|
1,905
|
$
|
1,907
|
||||||||
After One Year Through Five Years
|
66,205
|
66,115
|
9,530
|
9,556
|
||||||||||||
After Five Years Through Ten Years
|
13,945
|
13,788
|
12,699
|
12,747
|
||||||||||||
After Ten Years
|
29,137
|
28,948
|
33,975
|
34,198
|
||||||||||||
175,424
|
174,992
|
58,109
|
58,408
|
|||||||||||||
Investment Securities Not Due at a Single Maturity Date:
|
||||||||||||||||
Mortgage Backed Securities
|
272,858
|
273,271
|
-
|
-
|
||||||||||||
Total
|
$
|
448,282
|
$
|
448,263
|
$
|
58,109
|
$
|
58,408
|
Less Than 12 Months
|
12 Months or More
|
Total
|
||||||||||||||||||||||
December 31, 2016
|
Fair
Value
|
Unrealized
Loss
|
Fair
Value
|
Unrealized
Loss
|
Fair
Value
|
Unrealized
Loss
|
||||||||||||||||||
Securities Available-for-Sale
|
||||||||||||||||||||||||
US Treasury Notes
|
$
|
99,429
|
$
|
332
|
$
|
-
|
$
|
-
|
$
|
99,429
|
$
|
332
|
||||||||||||
US Govt SBA
|
27,483
|
260
|
-
|
-
|
27,483
|
260
|
||||||||||||||||||
Mortgage Backed Securities
|
123,157
|
1,313
|
-
|
-
|
123,157
|
1,313
|
||||||||||||||||||
Total
|
$
|
250,069
|
$
|
1,905
|
$
|
-
|
$
|
-
|
$
|
250,069
|
$
|
1,905
|
||||||||||||
Securities Held-to-Maturity
|
||||||||||||||||||||||||
Obligations of States and Political Subdivisions
|
$
|
7,251
|
$
|
40
|
$
|
-
|
$
|
-
|
$
|
7,251
|
$
|
40
|
||||||||||||
Total
|
$
|
7,251
|
$
|
40
|
$
|
-
|
$
|
-
|
$
|
7,251
|
$
|
40
|
Less Than 12 Months
|
12 Months or More
|
Total
|
||||||||||||||||||||||
December 31, 2015
|
Fair
Value
|
Unrealized
Loss
|
Fair
Value
|
Unrealized
Loss
|
Fair
Value
|
Unrealized
Loss
|
||||||||||||||||||
Securities Available-for-Sale
|
||||||||||||||||||||||||
Government Agency & Government-Sponsored Entities
|
$
|
29,944
|
$
|
419
|
$
|
-
|
$
|
-
|
$
|
29,944
|
$
|
419
|
||||||||||||
US Treasury Notes
|
44,887
|
164
|
-
|
-
|
44,887
|
164
|
||||||||||||||||||
Mortgage Backed Securities
|
78,899
|
1,089
|
7,277
|
142
|
86,176
|
1,231
|
||||||||||||||||||
Total
|
$
|
153,730
|
$
|
1,672
|
$
|
7,277
|
$
|
142
|
$
|
161,007
|
$
|
1,814
|
||||||||||||
Securities Held-to-Maturity
|
||||||||||||||||||||||||
Obligations of States and Political Subdivisions
|
$
|
839
|
$
|
1
|
$
|
-
|
$
|
-
|
$
|
839
|
$
|
1
|
||||||||||||
Total
|
$
|
839
|
$
|
1
|
$
|
-
|
$
|
-
|
$
|
839
|
$
|
1
|
(in thousands)
|
Gross
Proceeds
|
Gross Gains
|
Gross
Losses
|
|||||||||
2016
|
$
|
105,941
|
$
|
250
|
$
|
534
|
||||||
2015
|
$
|
61,335
|
$
|
275
|
$
|
-
|
||||||
2014
|
$
|
130,174
|
$
|
1,204
|
$
|
1,114
|
4.
|
Federal Home Loan Bank Stock and Other Equity Securities, at Cost
|
5.
|
Loans & Leases
|
(in thousands)
|
2016
|
2015
|
||||||
Commercial Real Estate
|
$
|
674,445
|
$
|
609,602
|
||||
Agricultural Real Estate
|
467,685
|
424,034
|
||||||
Real Estate Construction
|
176,462
|
151,974
|
||||||
Residential 1st Mortgages
|
242,247
|
206,405
|
||||||
Home Equity Lines and Loans
|
31,625
|
33,056
|
||||||
Agricultural
|
295,325
|
293,966
|
||||||
Commercial
|
217,577
|
210,804
|
||||||
Consumer & Other
|
6,913
|
6,592
|
||||||
Leases
|
70,986
|
65,054
|
||||||
Total Gross Loans & Leases
|
2,183,265
|
2,001,487
|
||||||
Less: Unearned Income
|
5,664
|
5,128
|
||||||
Subtotal
|
2,177,601
|
1,996,359
|
||||||
Less: Allowance for Credit Losses
|
47,919
|
41,523
|
||||||
Loans & Leases, Net
|
$
|
2,129,682
|
$
|
1,954,836
|
6. |
Allowance for Credit Losses
|
December 31, 2016
|
Commercial Real Estate
|
Agricultural
Real Estate
|
Real Estate
Construction
|
Residential 1st
Mortgages
|
Home Equity
Lines & Loans
|
Agricultural
|
Commercial
|
Consumer
& Other
|
Leases
|
Unallocated
|
Total
|
|||||||||||||||||||||||||||||||||
Year-To-Date Allowance for Credit Losses:
|
||||||||||||||||||||||||||||||||||||||||||||
Beginning Balance- January 1, 2016
|
$
|
10,063
|
$
|
6,881
|
$
|
2,485
|
$
|
789
|
$
|
2,146
|
$
|
6,308
|
$
|
7,836
|
$
|
175
|
$
|
3,294
|
$
|
1,546
|
$
|
41,523
|
||||||||||||||||||||||
Charge-Offs
|
-
|
-
|
-
|
(21
|
)
|
(46
|
)
|
-
|
-
|
(105
|
)
|
-
|
-
|
(172
|
)
|
|||||||||||||||||||||||||||||
Recoveries
|
2
|
-
|
-
|
26
|
103
|
-
|
47
|
55
|
-
|
-
|
233
|
|||||||||||||||||||||||||||||||||
Provision
|
1,045
|
2,569
|
738
|
71
|
(63
|
)
|
1,073
|
632
|
75
|
292
|
(97
|
)
|
6,335
|
|||||||||||||||||||||||||||||||
Ending Balance- December 31, 2016
|
$
|
11,110
|
$
|
9,450
|
$
|
3,223
|
$
|
865
|
$
|
2,140
|
$
|
7,381
|
$
|
8,515
|
$
|
200
|
$
|
3,586
|
$
|
1,449
|
$
|
47,919
|
||||||||||||||||||||||
Ending Balance Individually Evaluated for Impairment
|
-
|
-
|
-
|
70
|
18
|
128
|
608
|
7
|
-
|
-
|
831
|
|||||||||||||||||||||||||||||||||
Ending Balance Collectively Evaluated for Impairment
|
11,110
|
9,450
|
3,223
|
795
|
2,122
|
7,253
|
7,907
|
193
|
3,586
|
1,449
|
47,088
|
|||||||||||||||||||||||||||||||||
Loans & Leases:
|
||||||||||||||||||||||||||||||||||||||||||||
Ending Balance
|
$
|
668,046
|
$
|
467,685
|
$
|
176,462
|
$
|
242,247
|
$
|
31,625
|
$
|
295,325
|
$
|
217,577
|
$
|
6,913
|
$
|
71,721
|
$
|
-
|
$
|
2,177,601
|
||||||||||||||||||||||
Ending Balance Individually Evaluated for Impairment
|
1,932
|
1,304
|
-
|
2,126
|
402
|
625
|
4,464
|
10
|
-
|
-
|
10,863
|
|||||||||||||||||||||||||||||||||
Ending Balance Collectively Evaluated for Impairment
|
666,114
|
466,381
|
176,462
|
240,121
|
31,223
|
294,700
|
213,113
|
6,903
|
71,721
|
-
|
2,166,738
|
December 31, 2015
|
Commercial
Real Estate
|
Agricultural
Real Estate
|
Real Estate
Construction
|
Residential 1st
Mortgages
|
Home Equity
Lines & Loans
|
Agricultural
|
Commercial
|
Consumer
& Other
|
Leases
|
Unallocated
|
Total
|
|||||||||||||||||||||||||||||||||
Year-To-Date Allowance for Credit Losses:
|
||||||||||||||||||||||||||||||||||||||||||||
Beginning Balance- January 1, 2015
|
$
|
7,842
|
$
|
4,185
|
$
|
1,669
|
$
|
1,022
|
$
|
2,426
|
$
|
6,104
|
$
|
8,195
|
$
|
218
|
$
|
2,211
|
$
|
1,529
|
$
|
35,401
|
||||||||||||||||||||||
Charge-Offs
|
-
|
-
|
-
|
-
|
-
|
-
|
(12
|
)
|
(84
|
)
|
-
|
-
|
(96
|
)
|
||||||||||||||||||||||||||||||
Recoveries
|
2,939
|
-
|
2,225
|
8
|
87
|
4
|
136
|
69
|
-
|
-
|
5,468
|
|||||||||||||||||||||||||||||||||
Provision
|
(718
|
)
|
2,696
|
(1,409
|
)
|
(241
|
)
|
(367
|
)
|
200
|
(483
|
)
|
(28
|
)
|
1,083
|
17
|
750
|
|||||||||||||||||||||||||||
Ending Balance- December 31, 2015
|
$
|
10,063
|
$
|
6,881
|
$
|
2,485
|
$
|
789
|
$
|
2,146
|
$
|
6,308
|
$
|
7,836
|
$
|
175
|
$
|
3,294
|
$
|
1,546
|
$
|
41,523
|
||||||||||||||||||||||
Ending Balance Individually Evaluated for Impairment
|
61
|
-
|
-
|
69
|
35
|
115
|
905
|
28
|
-
|
-
|
1,213
|
|||||||||||||||||||||||||||||||||
Ending Balance Collectively Evaluated for Impairment
|
10,002
|
6,881
|
2,485
|
720
|
2,111
|
6,193
|
6,931
|
147
|
3,294
|
1,546
|
40,310
|
|||||||||||||||||||||||||||||||||
Loans & Leases:
|
||||||||||||||||||||||||||||||||||||||||||||
Ending Balance
|
$
|
603,650
|
$
|
424,034
|
$
|
151,974
|
$
|
206,405
|
$
|
33,056
|
$
|
293,966
|
$
|
210,804
|
$
|
6,592
|
$
|
65,878
|
$
|
-
|
$
|
1,996,359
|
||||||||||||||||||||||
Ending Balance Individually Evaluated for Impairment
|
3,420
|
-
|
-
|
2,010
|
1,214
|
606
|
4,760
|
34
|
-
|
-
|
12,044
|
|||||||||||||||||||||||||||||||||
Ending Balance Collectively Evaluated for Impairment
|
600,230
|
424,034
|
151,974
|
204,395
|
31,842
|
293,360
|
206,044
|
6,558
|
65,878
|
-
|
1,984,315
|
December 31, 2016
|
Pass
|
Special
Mention
|
Substandard
|
Total Loans
|
||||||||||||
Loans & Leases:
|
||||||||||||||||
Commercial Real Estate
|
$
|
659,694
|
$
|
6,817
|
$
|
1,535
|
$
|
668,046
|
||||||||
Agricultural Real Estate
|
464,997
|
1,384
|
1,304
|
467,685
|
||||||||||||
Real Estate Construction
|
176,462
|
-
|
-
|
176,462
|
||||||||||||
Residential 1st Mortgages
|
241,816
|
47
|
384
|
242,247
|
||||||||||||
Home Equity Lines and Loans
|
31,558
|
-
|
67
|
31,625
|
||||||||||||
Agricultural
|
283,525
|
11,366
|
434
|
295,325
|
||||||||||||
Commercial
|
208,172
|
6,974
|
2,431
|
217,577
|
||||||||||||
Consumer & Other
|
6,705
|
-
|
208
|
6,913
|
||||||||||||
Leases
|
71,721
|
-
|
-
|
71,721
|
||||||||||||
Total
|
$
|
2,144,650
|
$
|
26,588
|
$
|
6,363
|
$
|
2,177,601
|
December 31, 2015
|
Pass
|
Special
Mention
|
Substandard
|
Total Loans
|
||||||||||||
Loans & Leases:
|
||||||||||||||||
Commercial Real Estate
|
$
|
595,011
|
$
|
7,917
|
$
|
722
|
$
|
603,650
|
||||||||
Agricultural Real Estate
|
424,034
|
-
|
-
|
424,034
|
||||||||||||
Real Estate Construction
|
150,379
|
1,595
|
-
|
151,974
|
||||||||||||
Residential 1st Mortgages
|
205,135
|
413
|
857
|
206,405
|
||||||||||||
Home Equity Lines and Loans
|
32,419
|
75
|
562
|
33,056
|
||||||||||||
Agricultural
|
293,325
|
9
|
632
|
293,966
|
||||||||||||
Commercial
|
199,467
|
8,160
|
3,177
|
210,804
|
||||||||||||
Consumer & Other
|
6,411
|
-
|
181
|
6,592
|
||||||||||||
Leases
|
65,878
|
-
|
-
|
65,878
|
||||||||||||
Total
|
$
|
1,972,059
|
$
|
18,169
|
$
|
6,131
|
$
|
1,996,359
|
December 31, 2016
|
30-59 Days
Past Due
|
60-89 Days
Past Due
|
90 Days and
Still Accruing
|
Nonaccrual
|
Total Past
Due
|
Current
|
Total
Loans & Leases
|
|||||||||||||||||||||
Loans & Leases:
|
||||||||||||||||||||||||||||
Commercial Real Estate
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
668,046
|
$
|
668,046
|
||||||||||||||
Agricultural Real Estate
|
-
|
-
|
-
|
1,304
|
1,304
|
466,381
|
467,685
|
|||||||||||||||||||||
Real Estate Construction
|
-
|
-
|
-
|
-
|
-
|
176,462
|
176,462
|
|||||||||||||||||||||
Residential 1st Mortgages
|
-
|
-
|
-
|
95
|
95
|
242,152
|
242,247
|
|||||||||||||||||||||
Home Equity Lines and Loans
|
-
|
-
|
-
|
-
|
-
|
31,625
|
31,625
|
|||||||||||||||||||||
Agricultural
|
-
|
-
|
-
|
243
|
243
|
295,082
|
295,325
|
|||||||||||||||||||||
Commercial
|
-
|
-
|
-
|
1,425
|
1,425
|
216,152
|
217,577
|
|||||||||||||||||||||
Consumer & Other
|
10
|
-
|
-
|
7
|
17
|
6,896
|
6,913
|
|||||||||||||||||||||
Leases
|
-
|
-
|
-
|
-
|
-
|
71,721
|
71,721
|
|||||||||||||||||||||
Total
|
$
|
10
|
$
|
-
|
$
|
-
|
$
|
3,074
|
$
|
3,084
|
$
|
2,174,517
|
$
|
2,177,601
|
December 31, 2015
|
30-59 Days
Past Due
|
60-89 Days
Past Due
|
90 Days and
Still Accruing
|
Nonaccrual
|
Total Past
Due
|
Current
|
Total
Loans & Leases
|
|||||||||||||||||||||
Loans & Leases:
|
||||||||||||||||||||||||||||
Commercial Real Estate
|
$
|
705
|
$
|
-
|
$
|
-
|
$
|
19
|
$
|
724
|
$
|
602,926
|
$
|
603,650
|
||||||||||||||
Agricultural Real Estate
|
-
|
-
|
-
|
-
|
-
|
424,034
|
424,034
|
|||||||||||||||||||||
Real Estate Construction
|
-
|
-
|
-
|
-
|
-
|
151,974
|
151,974
|
|||||||||||||||||||||
Residential 1st Mortgages
|
97
|
194
|
-
|
65
|
356
|
206,049
|
206,405
|
|||||||||||||||||||||
Home Equity Lines and Loans
|
-
|
-
|
-
|
538
|
538
|
32,518
|
33,056
|
|||||||||||||||||||||
Agricultural
|
-
|
-
|
-
|
-
|
-
|
293,966
|
293,966
|
|||||||||||||||||||||
Commercial
|
-
|
-
|
-
|
1,524
|
1,524
|
209,280
|
210,804
|
|||||||||||||||||||||
Consumer & Other
|
7
|
-
|
-
|
10
|
17
|
6,575
|
6,592
|
|||||||||||||||||||||
Leases
|
-
|
-
|
-
|
-
|
-
|
65,878
|
65,878
|
|||||||||||||||||||||
Total
|
$
|
809
|
$
|
194
|
$
|
-
|
$
|
2,156
|
$
|
3,159
|
$
|
1,993,200
|
$
|
1,996,359
|
December 31, 2016
|
Recorded
Investment
|
Unpaid
Principal
Balance
|
Related
Allowance
|
Average
Recorded
Investment
|
Interest
Income
Recognized
|
|||||||||||||||
With no related allowance recorded:
|
||||||||||||||||||||
Commercial Real Estate
|
$
|
184
|
$
|
184
|
$
|
-
|
$
|
354
|
$
|
7
|
||||||||||
Agricultural Real Estate
|
1,305
|
1,305
|
-
|
569
|
3
|
|||||||||||||||
Residential 1st Mortgages
|
451
|
504
|
-
|
404
|
10
|
|||||||||||||||
Home Equity Lines and Loans
|
-
|
-
|
-
|
181
|
-
|
|||||||||||||||
Agricultural
|
-
|
-
|
-
|
144
|
5
|
|||||||||||||||
Commercial
|
3,023
|
3,023
|
-
|
3,053
|
133
|
|||||||||||||||
$
|
4,963
|
$
|
5,016
|
$
|
-
|
$
|
4,705
|
$
|
158
|
|||||||||||
With an allowance recorded:
|
||||||||||||||||||||
Residential 1st Mortgages
|
$
|
430
|
$
|
469
|
$
|
21
|
$
|
336
|
$
|
13
|
||||||||||
Home Equity Lines and Loans
|
90
|
97
|
5
|
123
|
4
|
|||||||||||||||
Agricultural
|
625
|
625
|
128
|
581
|
22
|
|||||||||||||||
Commercial
|
1,441
|
1,640
|
608
|
1,536
|
8
|
|||||||||||||||
Consumer & Other
|
6
|
13
|
6
|
12
|
-
|
|||||||||||||||
$
|
2,592
|
$
|
2,844
|
$
|
768
|
$
|
2,588
|
$
|
47
|
|||||||||||
Total
|
$
|
7,555
|
$
|
7,860
|
$
|
768
|
$
|
7,293
|
$
|
205
|
December 31, 2015
|
Recorded
Investment
|
Unpaid
Principal
Balance
|
Related
Allowance
|
Average
Recorded
Investment
|
Interest
Income
Recognized
|
|||||||||||||||
With no related allowance recorded:
|
||||||||||||||||||||
Commercial Real Estate
|
$
|
102
|
$
|
104
|
$
|
-
|
$
|
479
|
$
|
7
|
||||||||||
Residential 1st Mortgages
|
551
|
618
|
-
|
560
|
16
|
|||||||||||||||
Home Equity Lines and Loans
|
581
|
646
|
-
|
620
|
3
|
|||||||||||||||
Agricultural
|
193
|
193
|
-
|
105
|
3
|
|||||||||||||||
Commercial
|
3,103
|
3,103
|
-
|
2,349
|
85
|
|||||||||||||||
$
|
4,530
|
$
|
4,664
|
$
|
-
|
$
|
4,113
|
$
|
114
|
|||||||||||
With an allowance recorded:
|
||||||||||||||||||||
Residential 1st Mortgages
|
$
|
348
|
$
|
420
|
$
|
17
|
$
|
354
|
$
|
16
|
||||||||||
Home Equity Lines and Loans
|
134
|
151
|
7
|
136
|
5
|
|||||||||||||||
Agricultural
|
412
|
413
|
115
|
431
|
28
|
|||||||||||||||
Commercial
|
1,657
|
1,798
|
905
|
2,456
|
31
|
|||||||||||||||
Consumer & Other
|
34
|
40
|
29
|
39
|
3
|
|||||||||||||||
$
|
2,585
|
$
|
2,822
|
$
|
1,073
|
$
|
3,416
|
$
|
83
|
|||||||||||
Total
|
$
|
7,115
|
$
|
7,486
|
$
|
1,073
|
$
|
7,529
|
$
|
197
|
December 31, 2016
|
||||||||||||
Troubled Debt Restructurings
|
Number of
Loans
|
Pre-Modification
Outstanding
Recorded
Investment
|
Post-Modification
Outstanding
Recorded
Investment |
|||||||||
Commercial Real Estate
|
1
|
$
|
112
|
$
|
112
|
|||||||
Residential 1st Mortgages
|
2
|
289
|
281
|
|||||||||
Home Equity Lines and Loans
|
2
|
305
|
286
|
|||||||||
Total
|
5
|
$
|
706
|
$
|
679
|
December 31, 2015
|
||||||||||||
Troubled Debt Restructurings
|
Number of
Loans
|
Pre-Modification
Outstanding
Recorded
Investment
|
Post-Modification
Outstanding
Recorded
Investment
|
|||||||||
Agricultural
|
1
|
$
|
194
|
$
|
194
|
|||||||
Commercial
|
1
|
131
|
119
|
|||||||||
Total
|
2
|
$
|
325
|
$
|
313
|
7. |
Premises and Equipment
|
(in thousands)
|
2016
|
2015
|
||||||
Land and Buildings
|
$
|
37,003
|
$
|
33,530
|
||||
Furniture, Fixtures, and Equipment
|
20,196
|
19,125
|
||||||
Leasehold Improvements
|
2,439
|
2,437
|
||||||
Subtotal
|
59,638
|
55,092
|
||||||
Less: Accumulated Depreciation and Amortization
|
30,409
|
28,517
|
||||||
Total
|
$
|
29,229
|
$
|
26,575
|
8. |
Other Real Estate
|
9. |
Time Deposits
|
(in thousands)
|
2016
|
2015
|
||||||
Balance
|
$
|
289,955
|
$
|
236,963
|
(in thousands)
|
Scheduled
Maturities
|
|||
2017
|
$
|
480,828
|
||
2018
|
80,231
|
|||
2019
|
5,315
|
|||
2020
|
741
|
|||
2021
|
3,178
|
|||
Total
|
$
|
570,293
|
10. |
Income Taxes
|
(in thousands)
|
2016
|
2015
|
2014
|
|||||||||
Current
|
||||||||||||
Federal
|
$
|
13,101
|
$
|
11,979
|
$
|
7,941
|
||||||
State
|
4,832
|
4,446
|
4,345
|
|||||||||
Total Current
|
17,933
|
16,425
|
12,286
|
|||||||||
Deferred
|
||||||||||||
Federal
|
(1,607
|
)
|
383
|
3,116
|
||||||||
State
|
(229
|
)
|
116
|
(308
|
)
|
|||||||
Total Deferred
|
(1,836
|
)
|
499
|
2,808
|
||||||||
Total Provision for Taxes
|
$
|
16,097
|
$
|
16,924
|
$
|
15,094
|
2016
|
2015
|
2014
|
||||||||||||||||||||||
(in thousands)
|
Amount
|
Rate
|
Amount
|
Rate
|
Amount
|
Rate
|
||||||||||||||||||
Tax Provision at Federal Statutory Rate
|
$
|
16,037
|
35.0
|
%
|
$
|
15,510
|
35.0
|
%
|
$
|
14,174
|
35.0
|
%
|
||||||||||||
Interest on Obligations of States and Political Subdivisions exempt from Federal Taxation
|
(675
|
)
|
(1.5
|
%)
|
(711
|
)
|
(1.6
|
%)
|
(805
|
)
|
(2.0
|
%)
|
||||||||||||
State and Local Income Taxes, Net of Federal Income Tax Benefit
|
2,992
|
6.5
|
%
|
2,966
|
6.7
|
%
|
2,624
|
6.5
|
%
|
|||||||||||||||
Bank Owned Life Insurance
|
(731
|
)
|
(1.6
|
%)
|
(712
|
)
|
(1.6
|
%)
|
(696
|
)
|
(1.7
|
%)
|
||||||||||||
Low-Income Housing Tax Credit
|
(1,201
|
)
|
(2.6
|
%)
|
(291
|
)
|
(0.7
|
%)
|
(126
|
)
|
(0.3
|
%)
|
||||||||||||
Bargain Purchase Gain
|
(641
|
)
|
(1.4
|
%)
|
-
|
0.0
|
%
|
-
|
0.0
|
%
|
||||||||||||||
Other, Net
|
316
|
0.7
|
%
|
162
|
0.4
|
%
|
(77
|
)
|
(0.2
|
%)
|
||||||||||||||
Total Provision for Taxes
|
$
|
16,097
|
35.1
|
%
|
$
|
16,924
|
38.2
|
%
|
$
|
15,094
|
37.3
|
%
|
(in thousands)
|
2016
|
2015
|
||||||
Deferred Tax Assets
|
||||||||
Allowance for Credit Losses
|
$
|
20,260
|
$
|
17,529
|
||||
Accrued Liabilities
|
9,807
|
8,614
|
||||||
Deferred Compensation
|
14,166
|
11,586
|
||||||
State Franchise Tax
|
1,680
|
1,549
|
||||||
Acquired Net Operating Loss
|
1,135
|
-
|
||||||
Fair Value Adjustment on Loans Acquired
|
429
|
-
|
||||||
Fair Value Adjustment on ORE Acquired
|
299
|
-
|
||||||
ORE Writedown and Holding Costs
|
-
|
1,547
|
||||||
Unrealized Loss on Securities Available-for-Sale
|
58
|
-
|
||||||
Low-Income Housing Investment
|
366
|
73
|
||||||
Other
|
233
|
46
|
||||||
Total Deferred Tax Assets
|
$
|
48,433
|
$
|
40,944
|
||||
Deferred Tax Liabilities
|
||||||||
Premises and Equipment
|
(1,707
|
)
|
(869
|
)
|
||||
Securities Accretion
|
(341
|
)
|
(310
|
)
|
||||
Unrealized Gain on Securities Available-for-Sale
|
-
|
(432
|
)
|
|||||
Leasing Activities
|
(14,868
|
)
|
(11,469
|
)
|
||||
Core Deposit Intangible Asset
|
(398
|
)
|
-
|
|||||
Other
|
(808
|
)
|
(744
|
)
|
||||
Total Deferred Tax Liabilities
|
(18,122
|
)
|
(13,824
|
)
|
||||
Net Deferred Tax Assets
|
$
|
30,311
|
$
|
27,120
|
11. |
Short Term Borrowings
|
12. |
Securities Sold Under Agreement to Repurchase
|
13. |
Federal Home Loan Bank Advances
|
14. |
Long-term Subordinated Debentures
|
15. |
Shareholders' Equity
|
(in thousands)
|
Actual
|
Current
Regulatory Capital
Requirements
|
Well Capitalized
Under Prompt
Corrective Action
|
|||||||||||||||||||||
December 31, 2016
|
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
||||||||||||||||||
Total Bank Capital to Risk Weighted Assets
|
$
|
319,776
|
12.79
|
%
|
$
|
199,958
|
8.0
|
%
|
$
|
249,947
|
10.0
|
%
|
||||||||||||
Total Consolidated Capital to Risk Weighted Assets
|
$
|
319,983
|
12.80
|
%
|
$
|
199,981
|
8.0
|
%
|
N/A
|
N/A
|
||||||||||||||
Total Bank Common Equity Tier 1 Capital Ratio
|
$
|
288,324
|
11.54
|
%
|
$
|
112,476
|
4.5
|
%
|
$
|
162,466
|
6.5
|
%
|
||||||||||||
Total Consolidated Common Equity Tier 1 Capital Ratio
|
$
|
278,981
|
11.16
|
%
|
$
|
112,489
|
4.5
|
%
|
N/A
|
N/A
|
||||||||||||||
Tier 1 Bank Capital to Risk Weighted Assets
|
$
|
288,323
|
11.54
|
%
|
$
|
149,968
|
6.0
|
%
|
$
|
199,958
|
8.0
|
%
|
||||||||||||
Tier 1 Consolidated Capital to Risk Weighted Assets
|
$
|
288,527
|
11.54
|
%
|
$
|
149,986
|
6.0
|
%
|
N/A
|
N/A
|
||||||||||||||
Tier 1 Bank Capital to Average Assets
|
$
|
288,324
|
10.08
|
%
|
$
|
114,409
|
4.0
|
%
|
$
|
143,011
|
5.0
|
%
|
||||||||||||
Tier 1 Consolidated Capital to Average Assets
|
$
|
288,527
|
10.07
|
%
|
$
|
114,568
|
4.0
|
%
|
N/A
|
N/A
|
(in thousands)
|
Actual
|
Current
Regulatory Capital
Requirements
|
Well Capitalized
Under Prompt
Corrective Action
|
|||||||||||||||||||||
December 31, 2015
|
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
||||||||||||||||||
Total Bank Capital to Risk Weighted Assets
|
$
|
290,941
|
12.22
|
%
|
$
|
190,480
|
8.0
|
%
|
$
|
238,101
|
10.0
|
%
|
||||||||||||
Total Consolidated Capital to Risk Weighted Assets
|
$
|
291,152
|
12.23
|
%
|
$
|
190,493
|
8.0
|
%
|
N/A
|
N/A
|
||||||||||||||
Total Bank Common Equity Tier 1 Capital Ratio
|
$
|
261,031
|
10.96
|
%
|
$
|
107,145
|
4.5
|
%
|
$
|
154,765
|
6.5
|
%
|
||||||||||||
Total Consolidated Common Equity Tier 1 Capital Ratio
|
$
|
251,240
|
10.55
|
%
|
$
|
107,152
|
4.5
|
%
|
N/A
|
N/A
|
||||||||||||||
Tier 1 Bank Capital to Risk Weighted Assets
|
$
|
261,031
|
10.96
|
%
|
$
|
142,860
|
6.0
|
%
|
$
|
190,480
|
8.0
|
%
|
||||||||||||
Tier 1 Consolidated Capital to Risk Weighted Assets
|
$
|
261,240
|
10.97
|
%
|
$
|
142,870
|
6.0
|
%
|
N/A
|
N/A
|
||||||||||||||
Tier 1 Bank Capital to Average Assets
|
$
|
261,031
|
10.30
|
%
|
$
|
101,402
|
4.0
|
%
|
$
|
126,753
|
5.0
|
%
|
||||||||||||
Tier 1 Consolidated Capital to Average Assets
|
$
|
261,240
|
10.29
|
%
|
$
|
101,525
|
4.0
|
%
|
N/A
|
N/A
|
16. |
Dividends and Basic Earnings Per Common Share
|
(
net income in thousands
)
|
2016
|
2015
|
2014
|
|||||||||
Net Income
|
$
|
29,723
|
$
|
27,392
|
$
|
25,402
|
||||||
Weighted Average Number of Common Shares Outstanding
|
793,970
|
786,582
|
778,358
|
|||||||||
Basic Earnings Per Common Share
|
$
|
37.44
|
$
|
34.82
|
$
|
32.64
|
17.
|
Employee Benefit Plans
|
18. |
Fair Value Measurements
|
Fair Value Measurements
At December 31, 2016, Using
|
||||||||||||||||
Fair Value
|
Quoted Prices
in Active
Markets for
Identical
Assets
|
Other
Observable
Inputs
|
Significant
Unobservable
Inputs
|
|||||||||||||
(in thousands)
|
Total
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
||||||||||||
Available-for-Sale Securities:
|
||||||||||||||||
Government Agency & Government-Sponsored Entities
|
$
|
3,241
|
$
|
-
|
$
|
3,241
|
$
|
-
|
||||||||
US Treasury Notes
|
134,428
|
134,428
|
-
|
-
|
||||||||||||
US Govt SBA
|
36,314
|
36,314
|
||||||||||||||
Mortgage Backed Securities
|
273,270
|
-
|
273,270
|
-
|
||||||||||||
Other
|
1,010
|
200
|
310
|
500
|
||||||||||||
Total Assets Measured at Fair Value On a Recurring Basis
|
$
|
448,263
|
$
|
134,628
|
$
|
313,135
|
$
|
500
|
Fair Value Measurements
At December 31, 2015, Using
|
||||||||||||||||
Fair Value
|
Quoted Prices
in Active
Markets for
Identical
Assets
|
Other
Observable
Inputs
|
Significant
Unobservable
Inputs
|
|||||||||||||
(in thousands)
|
Total
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
||||||||||||
Available-for-Sale Securities:
|
||||||||||||||||
Government Agency & Government-Sponsored Entities
|
$
|
33,251
|
$
|
-
|
$
|
33,251
|
$
|
-
|
||||||||
US Treasury Notes
|
72,884
|
72,884
|
-
|
-
|
||||||||||||
Mortgage Backed Securities
|
262,493
|
-
|
262,493
|
-
|
||||||||||||
Other
|
509
|
199
|
310
|
-
|
||||||||||||
Total Assets Measured at Fair Value On a Recurring Basis
|
$
|
369,137
|
$
|
73,083
|
$
|
296,054
|
$
|
-
|
Fair Value Measurements
At December 31, 2016, Using
|
||||||||||||||||
Fair Value
|
Quoted Prices
in Active
Markets for
Identical
Assets
|
Other
Observable
Inputs
|
Significant
Unobservable
Inputs
|
|||||||||||||
(in thousands)
|
Total
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
||||||||||||
Impaired Loans:
|
||||||||||||||||
Residential 1st Mortgage
|
$
|
480
|
$
|
-
|
$
|
-
|
$
|
480
|
||||||||
Home Equity Lines and Loans
|
83
|
-
|
-
|
83
|
||||||||||||
Agricultural
|
497
|
-
|
-
|
497
|
||||||||||||
Commercial
|
833
|
-
|
-
|
833
|
||||||||||||
Total Impaired Loans
|
1,893
|
-
|
-
|
1,893
|
||||||||||||
Other Real Estate:
|
||||||||||||||||
Home Equity Lines and Loans
|
785
|
-
|
-
|
785
|
||||||||||||
Real Estate Construction
|
2,960
|
-
|
-
|
2,960
|
||||||||||||
Total Other Real Estate
|
3,745
|
-
|
-
|
3,745
|
||||||||||||
Total Assets Measured at Fair Value On a Non-Recurring Basis
|
$
|
5,638
|
$
|
-
|
$
|
-
|
$
|
5,638
|
Fair Value Measurements
At December 31, 2015, Using
|
||||||||||||||||
Fair Value
|
Quoted Prices
in Active
Markets for
Identical
Assets
|
Other
Observable
Inputs
|
Significant
Unobservable
Inputs
|
|||||||||||||
(in thousands)
|
Total
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
||||||||||||
Impaired Loans:
|
||||||||||||||||
Residential 1st Mortgage
|
$
|
329
|
$
|
-
|
$
|
-
|
$
|
329
|
||||||||
Home Equity Lines and Loans
|
125
|
-
|
-
|
125
|
||||||||||||
Agricultural
|
298
|
-
|
-
|
298
|
||||||||||||
Commercial
|
752
|
-
|
-
|
752
|
||||||||||||
Consumer
|
5
|
-
|
-
|
5
|
||||||||||||
Total Impaired Loans
|
1,509
|
-
|
-
|
1,509
|
||||||||||||
Other Real Estate:
|
||||||||||||||||
Real Estate Construction
|
2,441
|
-
|
-
|
2,441
|
||||||||||||
Total Other Real Estate
|
2,441
|
-
|
-
|
2,441
|
||||||||||||
Total Assets Measured at Fair Value On a Non-Recurring Basis
|
$
|
3,950
|
$
|
-
|
$
|
-
|
$
|
3,950
|
(in thousands)
|
Fair Value
|
Valuation Technique
|
Unobservable Inputs
|
Range, Weighted Avg.
|
||||||
Impaired Loans:
|
||||||||||
Residential 1st Mortgages
|
$
|
480
|
Sales Comparison Approach
|
Adjustment for Difference Between Comparable Sales
|
2% -4%, 3
|
%
|
||||
Home Equity Lines and Loans
|
$
|
83
|
Sales Comparison Approach
|
Adjustment for Difference Between Comparable Sales
|
1% - 2%, 2
|
%
|
||||
Agricultural
|
$
|
286
|
Income Approach
|
Capitalization Rate
|
16% - 16%, 16
|
%
|
||||
Agricultural
|
$
|
211
|
Collateral Approach
|
Collateral Value
|
10% -10%, 10
|
%
|
||||
Commercial
|
$
|
833
|
Income Approach
|
Capitalization Rate
|
16% - 16%, 16
|
%
|
||||
Other Real Estate:
|
||||||||||
Home Equity Lines and Loans
|
$
|
785
|
Sales Comparison Approach
|
Adjustment for Difference Between Comparable Sales
|
10% - 10%, 10
|
%
|
||||
Real Estate Construction
|
$
|
2,960
|
Sales Comparison Approach
|
Adjustment for Difference Between Comparable Sales
|
10% - 10%, 10
|
%
|
19. |
Fair Value of Financial Instruments
|
Fair Value of Financial Instruments Using
|
||||||||||||||||||||
December 31, 2016
(in thousands)
|
Carrying
Amount
|
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
|
Other
Observable
Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
Total
Estimated
Fair Value
|
|||||||||||||||
Assets:
|
||||||||||||||||||||
Cash and Cash Equivalents
|
$
|
98,960
|
$
|
98,960
|
$
|
-
|
$
|
-
|
$
|
98,960
|
||||||||||
Investment Securities Available-for-Sale:
|
||||||||||||||||||||
Government Agency & Government-Sponsored Entities
|
3,241
|
-
|
3,241
|
-
|
3,241
|
|||||||||||||||
U.S. Govt SBA
|
36,314
|
-
|
36,314
|
-
|
36,314
|
|||||||||||||||
U.S. Treasury Notes
|
134,428
|
134,428
|
-
|
134,428
|
||||||||||||||||
Mortgage Backed Securities
|
273,270
|
-
|
273,270
|
-
|
273,270
|
|||||||||||||||
Other
|
1,010
|
200
|
310
|
500
|
1,010
|
|||||||||||||||
Total Investment Securities Available-for-Sale
|
448,263
|
134,628
|
313,135
|
500
|
448,263
|
|||||||||||||||
Investment Securities Held-to-Maturity:
|
||||||||||||||||||||
Obligations of States and Political Subdivisions
|
58,109
|
-
|
40,415
|
17,993
|
58,408
|
|||||||||||||||
Total Investment Securities Held-to-Maturity
|
58,109
|
-
|
40,415
|
17,993
|
58,408
|
|||||||||||||||
FHLB Stock
|
8,872
|
N/A
|
N/A
|
N/A
|
N/A
|
|||||||||||||||
Loans & Leases, Net of Deferred Fees & Allowance:
|
||||||||||||||||||||
Commercial Real Estate
|
656,936
|
-
|
-
|
651,877
|
651,877
|
|||||||||||||||
Agricultural Real Estate
|
458,235
|
-
|
-
|
444,393
|
444,393
|
|||||||||||||||
Real Estate Construction
|
173,239
|
-
|
-
|
172,682
|
172,682
|
|||||||||||||||
Residential 1st Mortgages
|
241,382
|
-
|
-
|
241,174
|
241,174
|
|||||||||||||||
Home Equity Lines and Loans
|
29,485
|
-
|
-
|
30,495
|
30,495
|
|||||||||||||||
Agricultural
|
287,944
|
-
|
-
|
286,074
|
286,074
|
|||||||||||||||
Commercial
|
209,062
|
-
|
-
|
207,215
|
207,215
|
|||||||||||||||
Consumer & Other
|
6,713
|
-
|
-
|
6,706
|
6,706
|
|||||||||||||||
Leases
|
68,135
|
-
|
-
|
67,893
|
67,893
|
|||||||||||||||
Unallocated Allowance
|
(1,449
|
)
|
-
|
-
|
(1,449
|
)
|
(1,449
|
)
|
||||||||||||
Total Loans & Leases, Net of Deferred Fees & Allowance
|
2,129,682
|
-
|
-
|
2,107,060
|
2,107,060
|
|||||||||||||||
Accrued Interest Receivable
|
10,047
|
-
|
10,047
|
-
|
10,047
|
|||||||||||||||
Liabilities:
|
||||||||||||||||||||
Deposits:
|
||||||||||||||||||||
Demand
|
756,236
|
756,236
|
-
|
-
|
756,236
|
|||||||||||||||
Interest Bearing Transaction
|
495,063
|
495,063
|
-
|
-
|
495,063
|
|||||||||||||||
Savings and Money Market
|
760,119
|
760,119
|
-
|
-
|
760,119
|
|||||||||||||||
Time
|
570,293
|
-
|
569,183
|
-
|
569,183
|
|||||||||||||||
Total Deposits
|
2,581,711
|
2,011,418
|
569,183
|
-
|
2,580,601
|
|||||||||||||||
Subordinated Debentures
|
10,310
|
-
|
6,578
|
-
|
6,578
|
|||||||||||||||
Accrued Interest Payable
|
852
|
-
|
852
|
-
|
852
|
Fair Value of Financial Instruments Using
|
||||||||||||||||||||
December 31, 2015 (in thousands)
|
Carrying Amount
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
Other Observable Inputs
(Level 2)
|
Significant Unobservable Inputs
(Level 3)
|
Total Estimated Fair Value
|
|||||||||||||||
Assets:
|
||||||||||||||||||||
Cash and Cash Equivalents
|
$
|
59,446
|
$
|
59,446
|
$
|
-
|
$
|
-
|
$
|
59,446
|
||||||||||
Investment Securities Available-for-Sale:
|
||||||||||||||||||||
Government Agency & Government-Sponsored Entities
|
33,251
|
-
|
33,251
|
-
|
33,251
|
|||||||||||||||
U.S. Treasury Notes
|
72,884
|
72,884
|
-
|
72,884
|
||||||||||||||||
Mortgage Backed Securities
|
262,493
|
-
|
262,493
|
-
|
262,493
|
|||||||||||||||
Other
|
509
|
199
|
310
|
-
|
509
|
|||||||||||||||
Total Investment Securities Available-for-Sale
|
369,137
|
73,083
|
296,054
|
-
|
369,137
|
|||||||||||||||
Investment Securities Held-to-Maturity:
|
||||||||||||||||||||
Obligations of States and Political Subdivisions
|
61,396
|
-
|
44,675
|
17,713
|
62,388
|
|||||||||||||||
Total Investment Securities Held-to-Maturity
|
61,396
|
-
|
44,675
|
17,713
|
62,388
|
|||||||||||||||
FHLB Stock
|
7,795
|
N/A
|
N/A
|
N/A
|
N/A
|
|||||||||||||||
Loans & Leases, Net of Deferred Fees & Allowance:
|
||||||||||||||||||||
Commercial Real Estate
|
593,587
|
-
|
-
|
591,271
|
591,271
|
|||||||||||||||
Agricultural Real Estate
|
417,153
|
-
|
-
|
405,295
|
405,295
|
|||||||||||||||
Real Estate Construction
|
149,489
|
-
|
-
|
149,371
|
149,371
|
|||||||||||||||
Residential 1st Mortgages
|
205,616
|
-
|
-
|
207,431
|
207,431
|
|||||||||||||||
Home Equity Lines and Loans
|
30,910
|
-
|
-
|
32,360
|
32,360
|
|||||||||||||||
Agricultural
|
287,658
|
-
|
-
|
285,733
|
285,733
|
|||||||||||||||
Commercial
|
202,968
|
-
|
-
|
201,105
|
201,105
|
|||||||||||||||
Consumer & Other
|
6,417
|
-
|
-
|
6,416
|
6,416
|
|||||||||||||||
Leases
|
62,584
|
-
|
-
|
62,139
|
62,139
|
|||||||||||||||
Unallocated Allowance
|
(1,546
|
)
|
-
|
-
|
(1,546
|
)
|
(1,546
|
)
|
||||||||||||
Total Loans & Leases, Net of Deferred Fees & Allowance
|
1,954,836
|
-
|
-
|
1,939,575
|
1,939,575
|
|||||||||||||||
Accrued Interest Receivable
|
9,240
|
-
|
9,240
|
-
|
9,240
|
|||||||||||||||
Liabilities:
|
||||||||||||||||||||
Deposits:
|
||||||||||||||||||||
Demand
|
711,029
|
711,029
|
-
|
-
|
711,029
|
|||||||||||||||
Interest Bearing Transaction
|
377,594
|
377,594
|
-
|
-
|
377,594
|
|||||||||||||||
Savings and Money Market
|
707,885
|
707,885
|
-
|
-
|
707,885
|
|||||||||||||||
Time
|
481,024
|
-
|
480,334
|
-
|
480,334
|
|||||||||||||||
Total Deposits
|
2,277,532
|
1,796,508
|
480,334
|
-
|
2,276,842
|
|||||||||||||||
Subordinated Debentures
|
10,310
|
-
|
6,424
|
-
|
6,424
|
|||||||||||||||
Accrued Interest Payable
|
513
|
-
|
513
|
-
|
513
|
20. |
Commitments and Contingencies
|
(in thousands)
|
December 31, 2016
|
December 31, 2015
|
||||||
Commitments to Extend Credit
|
$
|
609,653
|
$
|
708,122
|
||||
Letters of Credit
|
20,444
|
14,745
|
||||||
Performance Guarantees Under Interest Rate Swap Contracts Entered Into Between Our Borrowing Customers and Third Parties
|
1,835
|
2,758
|
21. |
Recent Accounting Developments
|
22. |
Parent Company Financial Information
|
(in thousands)
|
2016
|
2015
|
||||||
Cash
|
$
|
228
|
$
|
308
|
||||
Investment in Farmers & Merchants Bank of Central California
|
289,778
|
261,626
|
||||||
Investment Securities
|
409
|
409
|
||||||
Other Assets
|
184
|
60
|
||||||
Total Assets
|
$
|
290,599
|
$
|
262,403
|
||||
Subordinated Debentures
|
$
|
10,310
|
$
|
10,310
|
||||
Liabilities
|
308
|
258
|
||||||
Shareholders' Equity
|
279,981
|
251,835
|
||||||
Total Liabilities and Shareholders' Equity
|
$
|
290,599
|
$
|
262,403
|
Year Ended December 31,
|
||||||||||||
(in thousands)
|
2016
|
2015
|
2014
|
|||||||||
Equity in Undistributed Earnings in Farmers & Merchants Bank of Central California
|
$
|
17,043
|
$
|
17,352
|
$
|
18,211
|
||||||
Dividends from Subsidiary
|
14,275
|
10,875
|
8,000
|
|||||||||
Interest Income
|
11
|
10
|
10
|
|||||||||
Other Expenses, Net
|
(2,485
|
)
|
(1,451
|
)
|
(1,406
|
)
|
||||||
Tax Benefit
|
879
|
606
|
587
|
|||||||||
Net Income
|
$
|
29,723
|
$
|
27,392
|
$
|
25,402
|
Year Ended December 31,
|
||||||||||||
(in thousands)
|
2016
|
2015
|
2014
|
|||||||||
Cash Flows from Operating Activities:
|
||||||||||||
Net Income
|
$
|
29,723
|
$
|
27,392
|
$
|
25,402
|
||||||
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
|
||||||||||||
Equity in Undistributed Net Earnings from Subsidiary
|
(17,043
|
)
|
(17,352
|
)
|
(18,211
|
)
|
||||||
Net (Increase) Decrease in Other Assets
|
(124
|
)
|
(79
|
)
|
(114
|
)
|
||||||
Net Increase (Decrease) in Liabilities
|
49
|
141
|
(1
|
)
|
||||||||
Net Cash Provided by Operating Activities
|
12,605
|
10,102
|
7,076
|
|||||||||
Investing Activities:
|
||||||||||||
Payments for Business Acquisition
|
(2,207
|
)
|
-
|
-
|
||||||||
Payments for Investments in Subsidiaries
|
(2,586
|
)
|
(3,360
|
)
|
-
|
|||||||
Net Cash Used by Investing Activities
|
(4,793
|
)
|
(3,360
|
)
|
-
|
|||||||
Financing Activities:
|
||||||||||||
Issuance of Common Stock
|
2,586
|
3,360
|
2,790
|
|||||||||
Cash Dividends
|
(10,478
|
)
|
(10,157
|
)
|
(9,919
|
)
|
||||||
Net Cash Used by Financing Activities
|
(7,892
|
)
|
(6,797
|
)
|
(7,129
|
)
|
||||||
Decrease in Cash and Cash Equivalents
|
(80
|
)
|
(55
|
)
|
(53
|
)
|
||||||
Cash and Cash Equivalents at Beginning of Year
|
308
|
363
|
416
|
|||||||||
Cash and Cash Equivalents at End of Year
|
$
|
228
|
$
|
308
|
$
|
363
|
23. |
Subsequent Events
|
Name and Position(s)
|
Age
|
Principal Occupation during the Past Five Years
|
Kent A. Steinwert
Chairman, President
& Chief Executive Officer
of the Company and Bank
|
64
|
Chairman, President & Chief Executive Officer of the Company and Bank.
|
Deborah E. Skinner
Executive Vice President & Chief
Administrative Officer of the Bank
|
54
|
Executive Vice President & Chief Administrative Officer of the Bank.
|
Stephen W. Haley
Executive Vice President
& Chief Financial Officer &
Secretary of the Company and
Bank
|
63
|
Executive Vice President & Chief Financial Officer of the Company and Bank.
|
Kenneth W. Smith
Executive Vice President
& Senior Credit Officer
of the Company and Bank
|
57
|
Executive Vice President & Senior Credit Officer of the Company and Bank.
|
James P. Daugherty
Executive Vice President,
Wholesale Banking Division
of the Bank
|
65
|
Executive Vice President, Wholesale Banking Division of the Bank since November 15, 2013.
Senior Vice President, Commercial Credit Administrator of the Bank up to November 14, 2013.
|
Jay J. Colombini
Executive Vice President,
Wholesale Banking Division
of the Bank
|
54
|
Executive Vice President, Wholesale Banking Division of the Bank since November 15, 2013.
Senior Vice President and Manager – Lodi Main Branch from August 1, 2012 through November 14, 2013.
Senior Vice President and Manager – Linden Branch up to July 31, 2012
|
Ryan J. Misasi
Executive Vice President,
Retail Banking Division of the Bank
|
40
|
Executive Vice President, Retail Banking Division of the Bank since May 29, 2014.
Executive Vice President and Chief Retail Officer – Patelco Credit Union from December, 2011 to April, 2014.
|
Item 12. |
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
(a)
|
(1) Financial Statements. Incorporated herein by reference, are listed in Item 8 hereof.
|
(2)
|
Financial Statement Schedules. Not applicable.
|
(3)
|
Exhibits.
|
Exhibit
Number
|
Description
|
2.1
|
Agreement and Plan of Reorganization dated as of June 8, 2016, by and between Farmers & Merchants Bancorp and Delta National Bancorp and filed on the Registrant’s Current Report on Form 8-K dated June 10, 2016, is incorporated herein by reference.
|
3.1
|
Amended Certificate of Incorporation (incorporated by reference to Proposal #2 in the Registrant’s Definitive Proxy Statement on Schedule 14A for its 2012 Annual Meeting of Stockholders, Appendices 1 and 2 to the Registrant's Definitive Proxy Statement on Schedule 14A for its 2007 Annual Meeting of Stockholders, and Exhibit 3(i) to the Registrant's Current Report on Form 8-K dated April 30, 1999).
|
3.2
|
Amended By-Laws (incorporated by reference to the Registrant’s Current Report on Form 8-K dated April 4, 2016, the Registrant’s Current Report on Form 8-K dated September 19, 2008, Appendix 3 to the Registrant's Definitive Proxy Statement on Schedule 14A for its 2007 Annual Meeting of Stockholders, Exhibit 3.1 to the Registrant's Current Report on Form 8-K dated June 7, 2005, and Exhibit 3(ii) to the Registrant's Current Report on Form 8-K dated April 30, 1999).
|
3.3
|
Certificate of Designation for the Series A Junior Participating Preferred Stock (included as Exhibit A to the Rights Agreement between Farmers & Merchants Bancorp and Registrar and Transfer Company, dated as of August 5, 2008, filed as Exhibit 4.1 below), filed on the Registrant’s Form 10-Q for the quarter ended June 30, 2008, is incorporated herein by reference.
|
4.1
|
Rights Agreement between Farmers & Merchants Bancorp and Registrar and Transfer Company, dated as of August 5, 2008, including Form of Right Certificate attached thereto as Exhibit B, filed on the Registrant’s Form 10-Q for the quarter ended June 30, 2008, is incorporated herein by reference.
|
4.2
|
Amendment No. 1 to Rights Agreement between Farmers & Merchants Bancorp and Computershare Trust, N.A., as Rights Agent, dated as of February 18, 2016, incorporated herein by reference to Exhibit 4.2 of the Registrant’s Form 8-A/A filed on February 19, 2016.
|
10.1
|
Amended and Restated Employment Agreement effective July 1, 2015, between Farmers & Merchants Bank of Central California and Kent A. Steinwert, filed on Registrant’s Form 10-Q for the quarter ended June 30, 2015, is incorporated herein by reference.
|
10.3
|
Amended and Restated Employment Agreement effective July 1, 2015, between Farmers & Merchants Bank of Central California and Deborah E. Skinner, filed on Registrant’s Form 10-Q for the quarter ended June 30, 2015, is incorporated herein by reference.
|
10.4
|
Amended and Restated Employment Agreement effective July 1, 2015, between Farmers & Merchants Bank of Central California and Kenneth W. Smith, filed on Registrant’s Form 10-Q for the quarter ended June 30, 2015, is incorporated herein by reference.
|
10.6
|
Amended and Restated Employment Agreement effective July 1, 2015, between Farmers & Merchants Bank of Central California and Stephen W. Haley, filed on Registrant’s Form 10-Q for the quarter ended June 30, 2015, is incorporated herein by reference.
|
10.8
|
Employment Agreement effective July 1, 2015, between Farmers & Merchants Bank of Central California and Jay J. Colombini, filed on Registrant’s Form 10-Q for the quarter ended June 30, 2015, is incorporated herein by reference.
|
10.9
|
Employment Agreement effective July 1, 2015, between Farmers & Merchants Bank of Central California and James P. Daugherty, filed on Registrant’s Form 10-Q for the quarter ended June 30, 2015, is incorporated herein by reference.
|
10.10
|
Employment Agreement effective July 1, 2015, between Farmers & Merchants Bank of Central California and Ryan J. Misasi, filed on Registrant’s Form 10-Q for the quarter ended June 30, 2015, is incorporated herein by reference.
|
10.15
|
Executive Retirement Plan – Performance Component as amended on November 5, 2010, filed on Registrant’s Form 10-Q for the period ended September 30, 2010, is incorporated herein by reference.
|
10.16
|
Executive Retirement Plan – Retention Component as amended on November 5, 2010, filed on Registrant’s Form 10-Q for the period ended September 30, 2010, is incorporated herein by reference.
|
10.17
|
Executive Retirement Plan – Salary Component, amended and restated on November 29, 2014, filed on Registrant’s Form 10-K for the year ended December 31, 2014, is incorporated herein by reference.
|
10.18
|
Deferred Compensation Plan of Farmers & Merchants Bank of Central California, as amended on November 5, 2010, filed on Registrant’s Form 10-Q for the period ended September 30, 2010, is incorporated herein by reference.
|
10.19
|
Executive Retirement Plan – Equity Component, amended and restated on November 29, 2014, filed on Registrant’s Form 10-K for the year ended December 31, 2014, is incorporated herein by reference.
|
10.20
|
Senior Management Retention Plan, amended and restated on November 29, 2014, filed on Registrant’s Form 10-K for the year ended December 31, 2014, is incorporated herein by reference.
|
14
|
Code of Conduct of Farmers & Merchants Bancorp, filed on Registrant’s Form 10-K for the year ended December 31, 2003, is incorporated herein by reference.
|
21
|
Subsidiaries of the Registrant, filed on Registrant’s Form 10-K for the year ended December 31, 2003, is incorporated herein by reference.
|
31(a)
|
Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31(b)
|
Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32
|
Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
101.INS
|
XBRL Instance Document
|
101.SCH
|
XBRL Schema Document
|
101.CAL
|
XBRL Calculation Linkbase Document
|
101.LAB
|
XBRL Label Linkbase Document
|
101.PRE
|
XBRL Presentation Linkbase Document
|
101.DEF
|
XBRL Definition Linkbase Document
|
Farmers & Merchants Bancorp
|
|||
(Registrant)
|
|||
By
|
/s/ Stephen W. Haley
|
||
Dated: March 15, 2017
|
Stephen W. Haley
|
||
Executive Vice President &
|
|||
Chief Financial Officer
|
/s/ Kent A. Steinwert
|
Chairman, President & Chief Executive Officer
|
||
Kent A. Steinwert
|
(Principal Executive Officer)
|
||
/s/ Stephen W. Haley
|
Executive Vice President & Chief Financial Officer
|
||
Stephen W. Haley
|
(Principal Financial and Accounting Officer)
|
||
/s/ Bruce A. Mettler
|
/s/ Calvin Suess
|
||
Bruce A. Mettler, Director
|
Calvin Suess, Director
|
||
/s/ Stewart C. Adams, Jr.
|
/s/ Kevin Sanguinetti
|
||
Stewart C. Adams, Jr., Director
|
Kevin Sanguinetti, Director
|
||
/s/ Edward Corum, Jr.
|
/s/ Gary Long
|
||
Edward Corum, Jr., Director
|
Gary Long, Director
|
1 Year Farmers and Merchants Ba... (QX) Chart |
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