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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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PENNSYLVANIA
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23-2451943
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(State or other jurisdiction of
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(I.R.S. Employer
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incorporation or organization)
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Identification No.)
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Common Stock ($1.00 par value)
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12,154,287 Shares Outstanding on August 2, 2011
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Part I. Financial Information
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||
Item 1. Financial Statements
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||
Consolidated Balance Sheet (Unaudited) – June 30, 2011 and December 31, 2010
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Page 3
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Consolidated Statement of Operations (Unaudited) - Three Months and Six Months Ended June 30, 2011 and 2010
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Page 4
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Consolidated Statement of Cash Flows (Unaudited) - Six Months Ended June 30, 2011 and 2010
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Page 5
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Consolidated Statement of Changes in Stockholders’ Equity (Unaudited) - Six Months Ended June 30, 2011 and 2010
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Page 6
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Notes to Consolidated Financial Statements
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Pages 7 - 31
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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
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Pages 32 - 50
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
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Pages 50 – 53
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Item 4. Controls and Procedures
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Page 53
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Part II. Other Information
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Pages 54 – 55
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Signatures
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Page 56
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Exhibit 31.1. Rule 13a-14(a)/15d-14(a) Certification - Chief Executive Officer
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Exhibit 31.2. Rule 13a-14(a)/15d-14(a) Certification - Chief Financial Officer
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Exhibit 32. Section 1350 Certifications
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PART 1 - FINANCIAL INFORMATION
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||||||||
ITEM 1. FINANCIAL STATEMENTS
|
||||||||
CONSOLIDATED BALANCE SHEET (Unaudited)
|
June 30,
|
December 31,
|
||||||
(In Thousands Except Share Data)
|
2011
|
2010
|
||||||
ASSETS
|
||||||||
Cash and due from banks:
|
||||||||
Noninterest-bearing
|
$ | 15,187 | $ | 16,840 | ||||
Interest-bearing
|
34,205 | 29,461 | ||||||
Total cash and cash equivalents
|
49,392 | 46,301 | ||||||
Available-for-sale securities
|
464,214 | 443,956 | ||||||
Loans held for sale
|
167 | 5,247 | ||||||
Loans receivable
|
713,936 | 730,411 | ||||||
Allowance for loan losses
|
(8,269 | ) | (9,107 | ) | ||||
Loans, net
|
705,667 | 721,304 | ||||||
Bank-owned life insurance
|
22,076 | 21,822 | ||||||
Accrued interest receivable
|
4,952 | 4,960 | ||||||
Bank premises and equipment, net
|
21,844 | 22,636 | ||||||
Foreclosed assets held for sale
|
1,665 | 537 | ||||||
Deferred tax asset, net
|
10,099 | 16,054 | ||||||
Intangible asset - Core deposit intangibles
|
269 | 326 | ||||||
Intangible asset - Goodwill
|
11,942 | 11,942 | ||||||
Other assets
|
17,363 | 21,503 | ||||||
TOTAL ASSETS
|
$ | 1,309,650 | $ | 1,316,588 | ||||
LIABILITIES
|
||||||||
Deposits:
|
||||||||
Noninterest-bearing
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$ | 165,424 | $ | 158,767 | ||||
Interest-bearing
|
829,937 | 845,581 | ||||||
Total deposits
|
995,361 | 1,004,348 | ||||||
Short-term borrowings
|
20,343 | 18,413 | ||||||
Long-term borrowings
|
133,182 | 148,495 | ||||||
Accrued interest and other liabilities
|
7,071 | 6,388 | ||||||
TOTAL LIABILITIES
|
1,155,957 | 1,177,644 | ||||||
STOCKHOLDERS' EQUITY
|
||||||||
Common stock, par value $1.00 per share; authorized 20,000,000 shares in 2011 and 2010; issued 12,432,768 at June 30, 2011 and 12,408,212 at December 31, 2010
|
12,433 | 12,408 | ||||||
Paid-in capital
|
67,086 | 66,648 | ||||||
Retained earnings
|
73,902 | 65,920 | ||||||
Treasury stock, at cost; 278,375 shares at June 30, 2011 and 254,614 shares at December 31, 2010
|
(4,714 | ) | (4,431 | ) | ||||
Sub-total
|
148,707 | 140,545 | ||||||
Accumulated other comprehensive income (loss):
|
||||||||
Unrealized gains (losses) on available-for-sale securities
|
5,299 | (1,351 | ) | |||||
Defined benefit plans
|
(313 | ) | (250 | ) | ||||
Total accumulated other comprehensive income (loss)
|
4,986 | (1,601 | ) | |||||
TOTAL STOCKHOLDERS' EQUITY
|
153,693 | 138,944 | ||||||
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY
|
$ | 1,309,650 | $ | 1,316,588 |
CONSOLIDATED STATEMENT OF OPERATIONS
|
3 Months Ended
|
Fiscal Year To Date
|
||||||||||||||
(In Thousands, Except Per Share Data) (Unaudited)
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June 30,
|
June 30,
|
6 Months Ended June 30,
|
|||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
|
(Current)
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(Prior Year)
|
(Current)
|
(Prior Year)
|
||||||||||||
INTEREST AND DIVIDEND INCOME
|
||||||||||||||||
Interest and fees on loans
|
$ | 10,854 | $ | 11,009 | $ | 21,722 | $ | 21,959 | ||||||||
Interest on balances with depository institutions
|
16 | 38 | 32 | 76 | ||||||||||||
Interest on loans to political subdivisions
|
372 | 399 | 747 | 797 | ||||||||||||
Interest on trading securities
|
0 | 0 | 0 | 1 | ||||||||||||
Income from available-for-sale and held-to-maturity securities:
|
||||||||||||||||
Taxable
|
2,849 | 2,699 | 5,542 | 5,784 | ||||||||||||
Tax-exempt
|
1,291 | 1,184 | 2,575 | 2,365 | ||||||||||||
Dividends
|
61 | 57 | 123 | 137 | ||||||||||||
Total interest and dividend income
|
15,443 | 15,386 | 30,741 | 31,119 | ||||||||||||
INTEREST EXPENSE
|
||||||||||||||||
Interest on deposits
|
2,267 | 3,058 | 4,835 | 6,215 | ||||||||||||
Interest on short-term borrowings
|
8 | 51 | 14 | 151 | ||||||||||||
Interest on long-term borrowings
|
1,353 | 1,927 | 2,795 | 3,930 | ||||||||||||
Total interest expense
|
3,628 | 5,036 | 7,644 | 10,296 | ||||||||||||
Net interest income
|
11,815 | 10,350 | 23,097 | 20,823 | ||||||||||||
Provision (credit) for loan losses
|
31 | 76 | (161 | ) | 283 | |||||||||||
Net interest income after provision (credit) for loan losses
|
11,784 | 10,274 | 23,258 | 20,540 | ||||||||||||
OTHER INCOME
|
||||||||||||||||
Service charges on deposit accounts
|
1,225 | 1,190 | 2,356 | 2,283 | ||||||||||||
Service charges and fees
|
207 | 210 | 425 | 403 | ||||||||||||
Trust and financial management revenue
|
946 | 830 | 1,823 | 1,729 | ||||||||||||
Interchange revenue from debit card transactions
|
485 | 423 | 937 | 799 | ||||||||||||
Net gains from sale of loans
|
155 | 137 | 414 | 203 | ||||||||||||
Increase in cash surrender value of life insurance
|
132 | 119 | 254 | 231 | ||||||||||||
Insurance commissions, fees and premiums
|
58 | 61 | 126 | 121 | ||||||||||||
Impairment loss on limited partnership investment
|
0 | 0 | (948 | ) | 0 | |||||||||||
Other operating income
|
465 | 290 | 841 | 1,039 | ||||||||||||
Sub-total
|
3,673 | 3,260 | 6,228 | 6,808 | ||||||||||||
Total other-than-temporary impairment losses on available-for-sale securities
|
0 | 0 | 0 | (381 | ) | |||||||||||
Portion of (gain) loss recognized in other comprehensive loss (before taxes)
|
0 | (2 | ) | 0 | (52 | ) | ||||||||||
Net impairment losses recognized in earnings
|
0 | (2 | ) | 0 | (433 | ) | ||||||||||
Realized gains on available-for-sale securities, net
|
163 | 321 | 2,002 | 810 | ||||||||||||
Net realized gains on available-for-sale securities
|
163 | 319 | 2,002 | 377 | ||||||||||||
Total other income
|
3,836 | 3,579 | 8,230 | 7,185 | ||||||||||||
OTHER EXPENSES
|
||||||||||||||||
Salaries and wages
|
3,469 | 3,199 | 6,870 | 6,277 | ||||||||||||
Pensions and other employee benefits
|
1,018 | 983 | 2,324 | 1,922 | ||||||||||||
Occupancy expense, net
|
665 | 651 | 1,397 | 1,350 | ||||||||||||
Furniture and equipment expense
|
453 | 542 | 937 | 1,110 | ||||||||||||
FDIC Assessments
|
189 | 415 | 514 | 819 | ||||||||||||
Pennsylvania shares tax
|
320 | 306 | 639 | 611 | ||||||||||||
Other operating expense
|
1,680 | 1,607 | 3,376 | 3,611 | ||||||||||||
Total other expenses
|
7,794 | 7,703 | 16,057 | 15,700 | ||||||||||||
Income before income tax provision
|
7,826 | 6,150 | 15,431 | 12,025 | ||||||||||||
Income tax provision
|
2,129 | 1,281 | 4,193 | 2,718 | ||||||||||||
Net income
|
5,697 | 4,869 | 11,238 | 9,307 | ||||||||||||
U.S Treasury preferred dividends
|
0 | 372 | 0 | 745 | ||||||||||||
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS
|
$ | 5,697 | $ | 4,497 | $ | 11,238 | $ | 8,562 | ||||||||
Net income per share – basic
|
$ | 0.47 | $ | 0.37 | $ | 0.92 | $ | 0.71 | ||||||||
Net income per share – diluted
|
$ | 0.47 | $ | 0.37 | $ | 0.92 | $ | 0.71 |
CONSOLIDATED STATEMENT OF CASH FLOWS
|
Six Months Ended June 30,
|
|||||||
(In Thousands) (Unaudited)
|
2011
|
2010
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net income
|
$ | 11,238 | $ | 9,307 | ||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
(Credit) provision for loan losses
|
(161 | ) | 283 | |||||
Realized gains on available-for-sale securities, net
|
(2,002 | ) | (377 | ) | ||||
Loss on sale of foreclosed assets, net
|
43 | 36 | ||||||
Depreciation expense
|
1,058 | 1,209 | ||||||
Gain on disposition of premises and equipment
|
0 | (449 | ) | |||||
Accretion and amortization on securities, net
|
753 | 1,273 | ||||||
Accretion and amortization on loans, deposits and borrowings, net
|
(18 | ) | (126 | ) | ||||
Amortization of mortgage servicing rights
|
29 | 0 | ||||||
Impairment loss on limited partnership interest
|
948 | 0 | ||||||
Increase in cash surrender value of life insurance
|
(254 | ) | (231 | ) | ||||
Stock-based compensation
|
351 | 32 | ||||||
Amortization of core deposit intangibles
|
57 | 88 | ||||||
Deferred income taxes
|
2,562 | 440 | ||||||
Gains on sales of mortgage loans, net
|
(414 | ) | (203 | ) | ||||
Origination of mortgage loans for sale
|
(8,453 | ) | (12,830 | ) | ||||
Proceeds from sales of mortgage loans
|
13,807 | 13,513 | ||||||
Net decrease in trading securities
|
0 | 1,045 | ||||||
Decrease in accrued interest receivable and other assets
|
2,750 | 3,371 | ||||||
Increase (decrease) in accrued interest payable and other liabilities
|
507 | (253 | ) | |||||
Net Cash Provided by Operating Activities
|
22,801 | 16,128 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Proceeds from maturity of held-to-maturity securities
|
0 | 300 | ||||||
Proceeds from sales of available-for-sale securities
|
16,615 | 45,522 | ||||||
Proceeds from calls and maturities of available-for-sale securities
|
54,054 | 85,954 | ||||||
Purchase of available-for-sale securities
|
(79,627 | ) | (159,082 | ) | ||||
Redemption of Federal Home Loan Bank of Pittsburgh stock
|
796 | 0 | ||||||
Net decrease (increase) in loans
|
14,424 | (3,202 | ) | |||||
Purchase of premises and equipment
|
(266 | ) | (335 | ) | ||||
Proceeds from disposition of premises and equipment
|
0 | 100 | ||||||
Purchase of investment in limited liability entity
|
(200 | ) | 0 | |||||
Return of principal on limited liability entity investments
|
70 | 23 | ||||||
Proceeds from sale of foreclosed assets
|
230 | 408 | ||||||
Net Cash Provided by (Used in) Investing Activities
|
6,096 | (30,312 | ) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Net (decrease) increase in deposits
|
(8,996 | ) | 41,746 | |||||
Net increase (decrease) in short-term borrowings
|
1,930 | (11,097 | ) | |||||
Repayments of long-term borrowings
|
(15,313 | ) | (22,300 | ) | ||||
Purchase of treasury stock
|
(571 | ) | 0 | |||||
Sale of treasury stock
|
16 | 0 | ||||||
Tax benefit from compensation plans
|
31 | 18 | ||||||
US Treasury preferred dividends paid
|
0 | (662 | ) | |||||
Common dividends paid
|
(2,903 | ) | (1,934 | ) | ||||
Net Cash (Used in) Provided by Financing Activities
|
(25,806 | ) | 5,771 | |||||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
3,091 | (8,413 | ) | |||||
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
|
46,301 | 92,065 | ||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD
|
$ | 49,392 | $ | 83,652 | ||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
|
||||||||
Assets acquired through foreclosure of real estate loans
|
$ | 1,401 | $ | 434 | ||||
Interest paid
|
$ | 7,694 | $ | 10,566 | ||||
Income taxes paid
|
$ | 400 | $ | 176 |
(In Thousands Except Per Share Data)
|
Accum. Other
|
|||||||||||||||||||||||||||
(Unaudited)
|
Preferred
|
Common
|
Paid-in
|
Retained
|
Comprehensive
|
Treasury
|
||||||||||||||||||||||
Stock
|
Stock
|
Capital
|
Earnings
|
Income (Loss)
|
Stock
|
Total
|
||||||||||||||||||||||
Six Months Ended June 30, 2011:
|
||||||||||||||||||||||||||||
Balance, December 31, 2010
|
$ | 0 | $ | 12,408 | $ | 66,648 | $ | 65,920 | $ | (1,601 | ) | $ | (4,431 | ) | $ | 138,944 | ||||||||||||
Comprehensive income:
|
||||||||||||||||||||||||||||
Net income
|
11,238 | 11,238 | ||||||||||||||||||||||||||
Unrealized gain on securities, net of reclassification and tax
|
6,650 | 6,650 | ||||||||||||||||||||||||||
Other comprehensive loss related to defined benefit plans
|
(63 | ) | (63 | ) | ||||||||||||||||||||||||
Total comprehensive income
|
17,825 | |||||||||||||||||||||||||||
Cash dividends declared on common stock, $.27 per share
|
(3,287 | ) | (3,287 | ) | ||||||||||||||||||||||||
Shares issued for dividend reinvestment plan
|
25 | 359 | 384 | |||||||||||||||||||||||||
Treasury stock purchased
|
(571 | ) | (571 | ) | ||||||||||||||||||||||||
Shares issued from treasury related to exercise of stock options
|
(3 | ) | 19 | 16 | ||||||||||||||||||||||||
Restricted stock granted
|
(272 | ) | 272 | 0 | ||||||||||||||||||||||||
Forfeiture of restricted stock
|
3 | (3 | ) | 0 | ||||||||||||||||||||||||
Stock-based compensation expense
|
351 | 351 | ||||||||||||||||||||||||||
Tax benefit from employee benefit plan
|
31 | 31 | ||||||||||||||||||||||||||
Balance, June 30, 2011
|
$ | 0 | $ | 12,433 | $ | 67,086 | $ | 73,902 | $ | 4,986 | $ | (4,714 | ) | $ | 153,693 | |||||||||||||
Six Months Ended June 30, 2010:
|
||||||||||||||||||||||||||||
Balance, December 31, 2009
|
$ | 25,749 | $ | 12,374 | $ | 66,726 | $ | 53,027 | $ | (891 | ) | $ | (4,575 | ) | $ | 152,410 | ||||||||||||
Comprehensive income:
|
||||||||||||||||||||||||||||
Net income
|
9,307 | 9,307 | ||||||||||||||||||||||||||
Unrealized gain on securities, net of reclassification and tax
|
2,206 | 2,206 | ||||||||||||||||||||||||||
Other comprehensive income related to defined benefit plans
|
118 | 118 | ||||||||||||||||||||||||||
Total comprehensive income
|
11,631 | |||||||||||||||||||||||||||
Accretion of discount associated with
|
||||||||||||||||||||||||||||
U.S. Treasury preferred stock
|
84 | (84 | ) | 0 | ||||||||||||||||||||||||
Cash dividends on U.S. Treasury preferred stock
|
(661 | ) | (661 | ) | ||||||||||||||||||||||||
Cash dividends declared on common stock, $.17 per share
|
(2,061 | ) | (2,061 | ) | ||||||||||||||||||||||||
Shares issued for dividend reinvestment plan
|
10 | 116 | 126 | |||||||||||||||||||||||||
Restricted stock granted
|
(159 | ) | 159 | 0 | ||||||||||||||||||||||||
Forfeiture of restricted stock
|
15 | (15 | ) | 0 | ||||||||||||||||||||||||
Stock-based compensation expense
|
32 | 32 | ||||||||||||||||||||||||||
Tax benefit from employee benefit plan
|
18 | 18 | ||||||||||||||||||||||||||
Balance, June 30, 2010
|
$ | 25,833 | $ | 12,384 | $ | 66,730 | $ | 59,546 | $ | 1,433 | $ | (4,431 | ) | $ | 161,495 |
Net Income
|
Weighted-
|
|||||||||||
Available
|
Average
|
Earnings
|
||||||||||
to Common
|
Common
|
Per
|
||||||||||
Shareholders
|
Shares
|
Share
|
||||||||||
Six Months Ended June 30, 2011
|
||||||||||||
Earnings per common share – basic
|
$ | 11,238,000 | 12,176,027 | $ | 0.92 | |||||||
Dilutive effect of potential common stock arising from stock options:
|
||||||||||||
Exercise of outstanding stock options
|
93,266 | |||||||||||
Hypothetical share repurchase at $15.58
|
(90,140 | ) | ||||||||||
Earnings per common share - diluted
|
$ | 11,238,000 | 12,179,153 | $ | 0.92 | |||||||
Six Months Ended June 30, 2010
|
||||||||||||
Earnings per common share – basic and diluted
|
$ | 8,562,000 | 12,119,358 | $ | 0.71 | |||||||
Quarter Ended June 30, 2011
|
||||||||||||
Earnings per common share – basic
|
$ | 5,697,000 | 12,177,110 | $ | 0.47 | |||||||
Dilutive effect of potential common stock arising from stock options:
|
||||||||||||
Exercise of outstanding stock options
|
92,449 | |||||||||||
Hypothetical share repurchase at $15.58
|
(89,360 | ) | ||||||||||
Earnings per common share - diluted
|
$ | 5,697,000 | 12,180,199 | $ | 0.47 | |||||||
Quarter Ended June 30, 2010
|
||||||||||||
Earnings per common share – basic and diluted
|
$ | 4,497,000 | 12,125,072 | $ | 0.37 |
(In Thousands)
|
3 Months Ended
|
6 Months Ended
|
||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Net income
|
$ | 5,697 | $ | 4,869 | $ | 11,238 | $ | 9,307 | ||||||||
Unrealized gains on available-for-sale securities:
|
||||||||||||||||
Unrealized holding gains on available-for-sale securities
|
5,949 | 3,966 | 12,074 | 3,724 | ||||||||||||
Reclassification adjustment for gains realized in income
|
(163 | ) | (319 | ) | (2,002 | ) | (377 | ) | ||||||||
Other comprehensive gain before income tax
|
5,786 | 3,647 | 10,072 | 3,347 | ||||||||||||
Income tax related to other comprehensive gain
|
1,965 | 1,245 | 3,422 | 1,141 | ||||||||||||
Other comprehensive gain on available-for-sale securities
|
3,821 | 2,402 | 6,650 | 2,206 | ||||||||||||
Unfunded pension and postretirement obligations:
|
||||||||||||||||
Change in items from defined benefit plans included in accumulated other comprehensive income
|
(3 | ) | (14 | ) | (122 | ) | 152 | |||||||||
Amortization of net transition obligation, prior service cost and net actuarial loss included in net periodic benefit cost
|
14 | 13 | 27 | 27 | ||||||||||||
Other comprehensive gain (loss) before income tax
|
11 | (1 | ) | (95 | ) | 179 | ||||||||||
Income tax related to other comprehensive gain (loss)
|
4 | 0 | (32 | ) | 61 | |||||||||||
Other comprehensive gain (loss) on unfunded retirement obligations
|
7 | (1 | ) | (63 | ) | 118 | ||||||||||
Net other comprehensive gain
|
3,828 | 2,401 | 6,587 | 2,324 | ||||||||||||
Total comprehensive income
|
$ | 9,525 | $ | 7,270 | $ | 17,825 | $ | 11,631 |
June 30, 2011
|
||||||||||||||||
Market Values Based on:
|
||||||||||||||||
Quoted Prices
|
Other
|
|||||||||||||||
in Active
|
Observable
|
Unobservable
|
Total
|
|||||||||||||
Markets
|
Inputs
|
Inputs
|
Fair
|
|||||||||||||
(In Thousands)
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
Value
|
||||||||||||
AVAILABLE-FOR-SALE SECURITIES:
|
||||||||||||||||
Obligations of U.S. Government agencies
|
$ | 0 | $ | 34,076 | $ | 0 | $ | 34,076 | ||||||||
Obligations of states and political subdivisions:
|
||||||||||||||||
Tax-exempt
|
0 | 125,326 | 0 | 125,326 | ||||||||||||
Taxable
|
0 | 12,743 | 0 | 12,743 | ||||||||||||
Mortgage-backed securities
|
0 | 116,302 | 0 | 116,302 | ||||||||||||
Collateralized mortgage obligations,
|
||||||||||||||||
Issued by U.S. Government agencies
|
0 | 152,156 | 0 | 152,156 | ||||||||||||
Corporate bonds
|
0 | 1,010 | 0 | 1,010 | ||||||||||||
Trust preferred securities issued by individual institutions
|
0 | 8,123 | 0 | 8,123 | ||||||||||||
Collateralized debt obligations:
|
||||||||||||||||
Pooled trust preferred securities - senior tranches
|
0 | 0 | 7,207 | 7,207 | ||||||||||||
Other collateralized debt obligations
|
0 | 660 | 0 | 660 | ||||||||||||
Total debt securities
|
0 | 450,396 | 7,207 | 457,603 | ||||||||||||
Marketable equity securities
|
6,611 | 0 | 0 | 6,611 | ||||||||||||
Total available-for-sale securities
|
6,611 | 450,396 | 7,207 | 464,214 | ||||||||||||
Servicing rights
|
0 | 0 | 315 | 315 | ||||||||||||
Total assets measured at fair value on a recurring basis
|
$ | 6,611 | $ | 450,396 | $ | 7,522 | $ | 464,529 |
December 31, 2010
|
||||||||||||||||
Market Values Based on:
|
||||||||||||||||
Quoted Prices
|
Other
|
|||||||||||||||
in Active
|
Observable
|
Unobservable
|
Total
|
|||||||||||||
Markets
|
Inputs
|
Inputs
|
Fair
|
|||||||||||||
(In Thousands)
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
Value
|
||||||||||||
AVAILABLE-FOR-SALE SECURITIES:
|
||||||||||||||||
Obligations of U.S. Government agencies
|
$ | 0 | $ | 44,247 | $ | 0 | $ | 44,247 | ||||||||
Obligations of states and political subdivisions:
|
||||||||||||||||
Tax-exempt
|
4,574 | 115,301 | 0 | 119,875 | ||||||||||||
Taxable
|
1,125 | 6,542 | 0 | 7,667 | ||||||||||||
Mortgage-backed securities
|
0 | 118,386 | 0 | 118,386 | ||||||||||||
Collateralized mortgage obligations,
|
||||||||||||||||
Issued by U.S. Government agencies
|
9,117 | 121,709 | 0 | 130,826 | ||||||||||||
Corporate bonds
|
0 | 1,027 | 0 | 1,027 | ||||||||||||
Trust preferred securities issued by individual institutions
|
0 | 7,838 | 0 | 7,838 | ||||||||||||
Collateralized debt obligations:
|
||||||||||||||||
Pooled trust preferred securities - senior tranches
|
0 | 0 | 7,400 | 7,400 | ||||||||||||
Other collateralized debt obligations
|
0 | 681 | 0 | 681 | ||||||||||||
Total debt securities
|
14,816 | 415,731 | 7,400 | 437,947 | ||||||||||||
Marketable equity securities
|
6,009 | 0 | 0 | 6,009 | ||||||||||||
Total available-for-sale securities
|
20,825 | 415,731 | 7,400 | 443,956 | ||||||||||||
Servicing rights
|
0 | 0 | 204 | 204 | ||||||||||||
Total assets measured at fair value on a recurring basis
|
$ | 20,825 | $ | 415,731 | $ | 7,604 | $ | 444,160 |
3 Months Ended
|
Fiscal Year To Date
|
|||||||||||||||
June 30,
|
June 30,
|
6 Months Ended June 30,
|
||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
(Current)
|
(Prior Year)
|
(Current)
|
(Prior Year)
|
|||||||||||||
Balance, beginning of period
|
$ | 9,038 | $ | 8,552 | $ | 7,400 | $ | 9,114 | ||||||||
Accretion and amortization, net
|
(14 | ) | (37 | ) | (34 | ) | (215 | ) | ||||||||
Proceeds from sales and calls
|
(2,060 | ) | (524 | ) | (2,085 | ) | (524 | ) | ||||||||
Realized gains, net
|
50 | 0 | 75 | 0 | ||||||||||||
Unrealized losses included in earnings
|
0 | (2 | ) | 0 | (423 | ) | ||||||||||
Unrealized gains included in other comprehensive income
|
193 | 251 | 1,851 | 288 | ||||||||||||
Balance, end of period
|
$ | 7,207 | $ | 8,240 | $ | 7,207 | $ | 8,240 |
(In Thousands)
|
June 30, 2011
|
December 31, 2010
|
||||||||||||||
Carrying
|
Fair
|
Carrying
|
Fair
|
|||||||||||||
Amount
|
Value
|
Amount
|
Value
|
|||||||||||||
Financial assets:
|
||||||||||||||||
Cash and cash equivalents
|
$ | 49,392 | $ | 49,392 | $ | 46,301 | $ | 46,301 | ||||||||
Available-for-sale securities
|
464,214 | 464,214 | 443,956 | 443,956 | ||||||||||||
Restricted equity securities
|
7,491 | 7,491 | 8,286 | 8,286 | ||||||||||||
Loans held for sale
|
167 | 167 | 5,247 | 5,249 | ||||||||||||
Loans, net
|
705,667 | 710,476 | 721,304 | 728,744 | ||||||||||||
Accrued interest receivable
|
4,952 | 4,952 | 4,960 | 4,960 | ||||||||||||
Servicing rights
|
315 | 315 | 204 | 204 | ||||||||||||
Financial liabilities:
|
||||||||||||||||
Deposits
|
995,361 | 1,000,260 | 1,004,348 | 1,012,247 | ||||||||||||
Short-term borrowings
|
20,343 | 20,085 | 18,413 | 18,240 | ||||||||||||
Long-term borrowings
|
133,182 | 153,717 | 148,495 | 171,877 | ||||||||||||
Accrued interest payable
|
371 | 371 | 430 | 430 |
June 30, 2011
|
||||||||||||||||
Gross
|
Gross
|
|||||||||||||||
Unrealized
|
Unrealized
|
|||||||||||||||
Amortized
|
Holding
|
Holding
|
Fair
|
|||||||||||||
(In Thousands)
|
Cost
|
Gains
|
Losses
|
Value
|
||||||||||||
Obligations of U.S. Government agencies
|
$ | 33,530 | $ | 546 | $ | 0 | $ | 34,076 | ||||||||
Obligations of states and political subdivisions:
|
||||||||||||||||
Tax-exempt
|
127,670 | 1,900 | (4,244 | ) | 125,326 | |||||||||||
Taxable
|
12,652 | 102 | (11 | ) | 12,743 | |||||||||||
Mortgage-backed securities
|
111,140 | 5,193 | (31 | ) | 116,302 | |||||||||||
Collateralized mortgage obligations, Issued by U.S. Government agencies
|
149,946 | 2,309 | (99 | ) | 152,156 | |||||||||||
Corporate bonds
|
1,000 | 10 | 0 | 1,010 | ||||||||||||
Trust preferred securities issued by individual institutions
|
6,793 | 1,464 | (134 | ) | 8,123 | |||||||||||
Collateralized debt obligations:
|
||||||||||||||||
Pooled trust preferred securities - senior tranches
|
7,913 | 0 | (706 | ) | 7,207 | |||||||||||
Other collateralized debt obligations
|
660 | 0 | 0 | 660 | ||||||||||||
Total debt securities
|
451,304 | 11,524 | (5,225 | ) | 457,603 | |||||||||||
Marketable equity securities
|
4,883 | 1,795 | (67 | ) | 6,611 | |||||||||||
Total
|
$ | 456,187 | $ | 13,319 | $ | (5,292 | ) | $ | 464,214 |
December 31, 2010
|
||||||||||||||||
Gross
|
Gross
|
|||||||||||||||
Unrealized
|
Unrealized
|
|||||||||||||||
Amortized
|
Holding
|
Holding
|
Fair
|
|||||||||||||
(In Thousands)
|
Cost
|
Gains
|
Losses
|
Value
|
||||||||||||
Obligations of U.S. Government agencies
|
$ | 44,005 | $ | 270 | $ | (28 | ) | $ | 44,247 | |||||||
Obligations of states and political subdivisions:
|
||||||||||||||||
Tax-exempt
|
127,210 | 546 | (7,882 | ) | 119,874 | |||||||||||
Taxable
|
7,808 | 1 | (141 | ) | 7,668 | |||||||||||
Mortgage-backed securities
|
113,176 | 5,381 | (171 | ) | 118,386 | |||||||||||
Collateralized mortgage obligations, Issued by U.S. Government agencies
|
131,040 | 869 | (1,083 | ) | 130,826 | |||||||||||
Corporate bonds
|
1,000 | 27 | 0 | 1,027 | ||||||||||||
Trust preferred securities issued by individual institutions
|
6,535 | 1,694 | (391 | ) | 7,838 | |||||||||||
Collateralized debt obligations:
|
||||||||||||||||
Pooled trust preferred securities - senior tranches
|
9,957 | 0 | (2,557 | ) | 7,400 | |||||||||||
Other collateralized debt obligations
|
681 | 0 | 0 | 681 | ||||||||||||
Total debt securities
|
441,412 | 8,788 | (12,253 | ) | 437,947 | |||||||||||
Marketable equity securities
|
4,589 | 1,496 | (76 | ) | 6,009 | |||||||||||
Total
|
$ | 446,001 | $ | 10,284 | $ | (12,329 | ) | $ | 443,956 |
June 30, 2011
|
Less Than 12 Months
|
12 Months or More
|
Total
|
|||||||||||||||||||||
(In Thousands)
|
Fair
|
Unrealized
|
Fair
|
Unrealized
|
Fair
|
Unrealized
|
||||||||||||||||||
Value
|
Losses
|
Value
|
Losses
|
Value
|
Losses
|
|||||||||||||||||||
Obligations of states and political subdivisions:
|
||||||||||||||||||||||||
Tax-exempt
|
$ | 28,246 | $ | (1,258 | ) | $ | 30,986 | $ | (2,986 | ) | $ | 59,232 | $ | (4,244 | ) | |||||||||
Taxable
|
2,287 | (11 | ) | 0 | 0 | 2,287 | (11 | ) | ||||||||||||||||
Mortgage-backed securities
|
4,737 | (31 | ) | 0 | 0 | 4,737 | (31 | ) | ||||||||||||||||
Collateralized mortgage obligations, Issued by U.S. Government agencies
|
17,012 | (97 | ) | 5,535 | (2 | ) | 22,547 | (99 | ) | |||||||||||||||
Trust preferred securities issued by individual institutions
|
0 | 0 | 866 | (134 | ) | 866 | (134 | ) | ||||||||||||||||
Collateralized debt obligations:
|
||||||||||||||||||||||||
Pooled trust preferred securities - senior tranches
|
0 | 0 | 7,207 | (706 | ) | 7,207 | (706 | ) | ||||||||||||||||
Total debt securities
|
52,282 | (1,397 | ) | 44,594 | (3,828 | ) | 96,876 | (5,225 | ) | |||||||||||||||
Marketable equity securities
|
510 | (13 | ) | 101 | (54 | ) | 611 | (67 | ) | |||||||||||||||
Total temporarily impaired available-for-sale securities
|
$ | 52,792 | $ | (1,410 | ) | $ | 44,695 | $ | (3,882 | ) | $ | 97,487 | $ | (5,292 | ) |
December 31, 2010 | Less Than 12 Months | 12 Months or More | Total | |||||||||||||||||||||
(In Thousands)
|
Fair
|
Unrealized
|
Fair
|
Unrealized
|
Fair
|
Unrealized
|
||||||||||||||||||
Value
|
Losses
|
Value
|
Losses
|
Value
|
Losses
|
|||||||||||||||||||
Obligations of U.S. Government agencies
|
$ | 10,230 | $ | (28 | ) | $ | 0 | $ | 0 | $ | 10,230 | $ | (28 | ) | ||||||||||
Obligations of states and political subdivisions:
|
||||||||||||||||||||||||
Tax-exempt
|
53,119 | (2,533 | ) | 28,622 | (5,349 | ) | 81,741 | (7,882 | ) | |||||||||||||||
Taxable
|
6,542 | (141 | ) | 0 | 0 | 6,542 | (141 | ) | ||||||||||||||||
Mortgage-backed securities
|
13,141 | (171 | ) | 0 | 0 | 13,141 | (171 | ) | ||||||||||||||||
Collateralized mortgage obligations, Issued by U.S. Government agencies
|
56,257 | (1,083 | ) | 0 | 0 | 56,257 | (1,083 | ) | ||||||||||||||||
Trust preferred securities issued by individual institutions
|
0 | 0 | 5,825 | (391 | ) | 5,825 | (391 | ) | ||||||||||||||||
Collateralized debt obligations:
|
||||||||||||||||||||||||
Pooled trust preferred securities - senior tranches
|
0 | 0 | 7,400 | (2,557 | ) | 7,400 | (2,557 | ) | ||||||||||||||||
Total debt securities
|
139,289 | (3,956 | ) | 41,847 | (8,297 | ) | 181,136 | (12,253 | ) | |||||||||||||||
Marketable equity securities
|
710 | (76 | ) | 0 | 0 | 710 | (76 | ) | ||||||||||||||||
Total temporarily impaired available-for-sale securities
|
$ | 139,999 | $ | (4,032 | ) | $ | 41,847 | $ | (8,297 | ) | $ | 181,846 | $ | (12,329 | ) |
(In Thousands)
|
3 Months Ended
|
6 months ended
|
||||||||||||||
June 30,
|
June 30,
|
June 30,
|
June 30,
|
|||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Gross realized gains
|
$ | 169 | $ | 327 | $ | 2,009 | $ | 818 | ||||||||
Gross realized losses
|
(6 | ) | (8 | ) | (7 | ) | (441 | ) | ||||||||
Net realized gains
|
$ | 163 | $ | 319 | $ | 2,002 | $ | 377 | ||||||||
Income tax provision related to net realized gains
|
$ | 55 | $ | 108 | $ | 681 | $ | 128 |
Amortized
|
Fair
|
|||||||
(In Thousands)
|
Cost
|
Value
|
||||||
Due in one year or less
|
$ | 7,732 | $ | 9,155 | ||||
Due after one year through five years
|
50,559 | 51,303 | ||||||
Due after five years through ten years
|
76,489 | 77,383 | ||||||
Due after ten years
|
316,524 | 319,762 | ||||||
Total
|
$ | 451,304 | $ | 457,603 |
(In Thousands)
|
3 Months Ended
|
6 Months Ended
|
||||||||||||||
June 30,
|
June 30,
|
June 30,
|
June 30,
|
|||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Trust preferred securities issued by individual institutions
|
$ | 0 | $ | 0 | $ | 0 | $ | (320 | ) | |||||||
Pooled trust preferred securities - mezzanine tranches
|
0 | (2 | ) | 0 | (103 | ) | ||||||||||
Marketable equity securities (bank stocks)
|
0 | 0 | 0 | (10 | ) | |||||||||||
Net impairment losses recognized in earnings
|
$ | 0 | $ | (2 | ) | $ | 0 | $ | (433 | ) |
(In Thousands)
|
Moody's/
|
||||||||||||||||||
Cumulative
|
S&P/
|
||||||||||||||||||
Unrealized
|
Realized
|
Fitch
|
|||||||||||||||||
Amortized
|
Fair
|
Gain
|
Credit
|
Credit
|
|||||||||||||||
Name of Issuer
|
Issuer's Parent Company
|
Cost
|
Value
|
(Loss)
|
Losses
|
Ratings
|
|||||||||||||
Astoria Capital Trust I
|
Astoria Financial Corporation
|
$ | 5,203 | $ | 5,277 | $ | 74 | $ | 0 |
Baa3/BB-/BB-
|
|||||||||
Carolina First Mortgage Loan Trust
|
The Toronto-Dominion Bank
|
$ | 590 | $ | 1,980 | 1,390 | (1,769 | ) |
NR
|
||||||||||
Patriot Capital Trust I
|
Susquehanna Bancshares, Inc.
|
$ | 1,000 | $ | 866 | (134 | ) | 0 |
NR
|
||||||||||
Total
|
$ | 6,793 | $ | 8,123 | $ | 1,330 | $ | (1,769 | ) |
Amortized
|
Fair
|
Unrealized
|
Cumulative
|
|||||||||||||
Description
|
Cost
|
Value
|
Gain
|
OTTI
|
||||||||||||
U.S. Capital Funding II, Ltd. (B-1)
|
$ | 0 | $ | 0 | $ | 0 | $ | (1,992 | ) | |||||||
U.S. Capital Funding II, Ltd. (B-2)
|
0 | 0 | 0 | (2,973 | ) | |||||||||||
ALESCO Preferred Funding IX, Ltd.
|
0 | 0 | 0 | (2,988 | ) | |||||||||||
Total
|
$ | 0 | $ | 0 | $ | 0 | $ | (7,953 | ) |
MMCAPS Funding I, Ltd. - Senior Tranche
|
||||
Number of Banks Currently Performing
|
16 | |||
Moody's/Fitch Credit Ratings
|
A3/BBB
|
(1) | ||
Actual Deferrals and Defaults as % of Outstanding Collateral
|
32.3 | % | ||
Expected Additional Net Deferrals and Defaults as % of Performing Collateral
|
23.9 | % | ||
Excess Subordination as % of Performing Collateral
|
28.9 | % |
(In Thousands)
|
3 Months Ended
|
6 Months Ended
|
||||||||||||||
June 30,
|
June 30,
|
June 30,
|
June 30,
|
|||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Balance of credit losses on debt securities for which a portion of OTTI was recognized in other comprehensive income, beginning of period
|
$ | 0 | $ | (5,831 | ) | $ | 0 | $ | (10,695 | ) | ||||||
Reduction for securities losses realized during the period
|
0 | 5,833 | 0 | 10,798 | ||||||||||||
Additional credit loss for which an OTTI was previously recognized when the Corporation does not intend to sell the security and it is not more likely than not the Corporation will be required to sell the security before recovery of its amortized cost basis
|
0 | (2 | ) | 0 | (103 | ) | ||||||||||
Balance of credit losses on debt securities for which a portion of OTTI was recognized in other comprehensive income, end of period
|
$ | 0 | $ | 0 | $ | 0 | $ | 0 |
Summary of Loans by Type
|
||||||||||||||||
(In Thousands)
|
June 30,
|
% of
|
Dec. 31,
|
% of
|
||||||||||||
2011
|
Total
|
2010
|
Total
|
|||||||||||||
Consumer mortgage:
|
||||||||||||||||
Residential mortgage loans - first liens
|
$ | 334,300 | 46.82 | % | $ | 333,012 | 45.59 | % | ||||||||
Residential mortgage loans - junior liens
|
30,214 | 4.23 | % | 31,590 | 4.32 | % | ||||||||||
Home equity lines of credit
|
28,544 | 4.00 | % | 26,853 | 3.68 | % | ||||||||||
1-4 Family residential construction
|
8,574 | 1.20 | % | 14,379 | 1.97 | % | ||||||||||
Total consumer mortgage
|
401,632 | 56.26 | % | 405,834 | 55.56 | % | ||||||||||
Commercial:
|
||||||||||||||||
Commercial loans secured by real estate
|
157,282 | 22.03 | % | 167,094 | 22.88 | % | ||||||||||
Commercial and industrial
|
59,791 | 8.37 | % | 59,005 | 8.08 | % | ||||||||||
Political subdivisions
|
34,675 | 4.86 | % | 36,480 | 4.99 | % | ||||||||||
Commercial construction
|
24,726 | 3.46 | % | 24,004 | 3.29 | % | ||||||||||
Loans secured by farmland
|
10,927 | 1.53 | % | 11,353 | 1.55 | % | ||||||||||
Multi-family (5 or more) residential
|
7,514 | 1.05 | % | 7,781 | 1.07 | % | ||||||||||
Agricultural loans
|
3,182 | 0.45 | % | 3,472 | 0.48 | % | ||||||||||
Other commercial loans
|
576 | 0.08 | % | 392 | 0.05 | % | ||||||||||
Total commercial
|
298,673 | 41.83 | % | 309,581 | 42.38 | % | ||||||||||
Consumer
|
13,631 | 1.91 | % | 14,996 | 2.05 | % | ||||||||||
Total
|
713,936 | 100.00 | % | 730,411 | 100.00 | % | ||||||||||
Less: allowance for loan losses
|
(8,269 | ) | (9,107 | ) | ||||||||||||
Loans, net
|
$ | 705,667 | $ | 721,304 |
December 31,
|
June 30,
|
|||||||||||||||||||
(In Thousands)
|
2010
Balance
|
Charge-
offs
|
Recoveries
|
Provision
(Credit)
|
2011
Balance
|
|||||||||||||||
Allowance for Loan Losses:
|
||||||||||||||||||||
Consumer mortgage:
|
||||||||||||||||||||
Residential mortgage loans - first liens
|
$ | 2,745 | $ | (28 | ) | $ | 0 | $ | 333 | $ | 3,050 | |||||||||
Residential mortgage loans - junior liens
|
334 | (51 | ) | 0 | 10 | 293 | ||||||||||||||
Home equity lines of credit
|
218 | 0 | 0 | 2 | 220 | |||||||||||||||
1-4 Family residential construction
|
208 | 0 | 0 | (141 | ) | 67 | ||||||||||||||
Total consumer mortgage
|
3,505 | (79 | ) | 0 | 204 | 3,630 | ||||||||||||||
Commercial:
|
||||||||||||||||||||
Commercial loans secured by real estate
|
3,314 | (535 | ) | 0 | (277 | ) | 2,502 | |||||||||||||
Commercial and industrial
|
862 | (199 | ) | 177 | 68 | 908 | ||||||||||||||
Political subdivisions
|
0 | 0 | 0 | 0 | 0 | |||||||||||||||
Commercial construction
|
590 | 0 | 0 | (309 | ) | 281 | ||||||||||||||
Loans secured by farmland
|
139 | 0 | 0 | (5 | ) | 134 | ||||||||||||||
Multi-family (5 or more) residential
|
63 | 0 | 0 | 12 | 75 | |||||||||||||||
Agricultural loans
|
32 | 0 | 0 | (3 | ) | 29 | ||||||||||||||
Other commercial loans
|
0 | 0 | 0 | 5 | 5 | |||||||||||||||
Total commercial
|
5,000 | (734 | ) | 177 | (509 | ) | 3,934 | |||||||||||||
Consumer
|
289 | (84 | ) | 43 | 27 | 275 | ||||||||||||||
Unallocated
|
313 | 117 | 430 | |||||||||||||||||
Total Allowance for Loan Losses
|
$ | 9,107 | $ | (897 | ) | $ | 220 | $ | (161 | ) | $ | 8,269 |
March 31,
|
June 30,
|
|||||||||||||||||||
(In Thousands)
|
2011
Balance
|
Charge-
offs
|
Recoveries
|
Provision
(Credit)
|
2011
Balance
|
|||||||||||||||
Allowance for Loan Losses:
|
||||||||||||||||||||
Consumer mortgage:
|
||||||||||||||||||||
Residential mortgage loans - first liens
|
$ | 3,150 | $ | (27 | ) | $ | 0 | $ | (73 | ) | $ | 3,050 | ||||||||
Residential mortgage loans - junior liens
|
305 | 0 | 0 | (12 | ) | 293 | ||||||||||||||
Home equity lines of credit
|
212 | 0 | 0 | 8 | 220 | |||||||||||||||
1-4 Family residential construction
|
62 | 0 | 0 | 5 | 67 | |||||||||||||||
Total consumer mortgage
|
3,729 | (27 | ) | 0 | (72 | ) | 3,630 | |||||||||||||
Commercial:
|
||||||||||||||||||||
Commercial loans secured by real estate
|
3,118 | (535 | ) | 0 | (81 | ) | 2,502 | |||||||||||||
Commercial and industrial
|
842 | (199 | ) | 176 | 89 | 908 | ||||||||||||||
Political subdivisions
|
0 | 0 | 0 | 0 | 0 | |||||||||||||||
Commercial construction
|
271 | 0 | 0 | 10 | 281 | |||||||||||||||
Loans secured by farmland
|
142 | 0 | 0 | (8 | ) | 134 | ||||||||||||||
Multi-family (5 or more) residential
|
77 | 0 | 0 | (2 | ) | 75 | ||||||||||||||
Agricultural loans
|
29 | 0 | 0 | 0 | 29 | |||||||||||||||
Other commercial loans
|
8 | 0 | 0 | (3 | ) | 5 | ||||||||||||||
Total commercial
|
4,487 | (734 | ) | 176 | 5 | 3,934 | ||||||||||||||
Consumer
|
275 | (39 | ) | 16 | 23 | 275 | ||||||||||||||
Unallocated
|
355 | 75 | 430 | |||||||||||||||||
Total Allowance for Loan Losses
|
$ | 8,846 | $ | (800 | ) | $ | 192 | $ | 31 | $ | 8,269 |
June 30, 2011:
|
||||||||||||||||||||
(In Thousands)
|
Pass
|
Special
Mention
|
Substandard
|
Doubtful
|
Total
|
|||||||||||||||
Consumer mortgage:
|
||||||||||||||||||||
Residential mortgage loans - first liens
|
$ | 318,969 | $ | 2,573 | $ | 12,548 | $ | 210 | $ | 334,300 | ||||||||||
Residential mortgage loans - junior liens
|
28,606 | 632 | 968 | 8 | 30,214 | |||||||||||||||
Home equity lines of credit
|
27,890 | 309 | 345 | 0 | 28,544 | |||||||||||||||
1-4 Family residential construction
|
8,574 | 0 | 0 | 0 | 8,574 | |||||||||||||||
Total consumer mortgage
|
384,039 | 3,514 | 13,861 | 218 | 401,632 | |||||||||||||||
Commercial:
|
||||||||||||||||||||
Commercial loans secured by real estate
|
142,026 | 9,006 | 5,077 | 1,173 | 157,282 | |||||||||||||||
Commercial and industrial
|
47,634 | 7,220 | 4,632 | 305 | 59,791 | |||||||||||||||
Political subdivisions
|
34,548 | 127 | 0 | 0 | 34,675 | |||||||||||||||
Commercial construction
|
22,854 | 241 | 1,631 | 0 | 24,726 | |||||||||||||||
Loans secured by farmland
|
7,513 | 2,406 | 970 | 38 | 10,927 | |||||||||||||||
Multi-family (5 or more) residential
|
7,498 | 0 | 16 | 0 | 7,514 | |||||||||||||||
Agricultural loans
|
2,929 | 209 | 44 | 0 | 3,182 | |||||||||||||||
Other commercial loans
|
576 | 0 | 0 | 0 | 576 | |||||||||||||||
Total commercial
|
265,578 | 19,209 | 12,370 | 1,516 | 298,673 | |||||||||||||||
Consumer
|
13,395 | 27 | 208 | 1 | 13,631 | |||||||||||||||
Totals
|
$ | 663,012 | $ | 22,750 | $ | 26,439 | $ | 1,735 | $ | 713,936 |
December 31, 2010:
|
||||||||||||||||||||
(In Thousands)
|
Pass
|
Special
Mention
|
Substandard
|
Doubtful
|
Total
|
|||||||||||||||
Consumer mortgage:
|
||||||||||||||||||||
Residential mortgage loans - first liens
|
$ | 318,813 | $ | 2,197 | $ | 11,778 | $ | 224 | $ | 333,012 | ||||||||||
Residential mortgage loans - junior liens
|
30,072 | 551 | 959 | 8 | 31,590 | |||||||||||||||
Home equity lines of credit
|
26,569 | 32 | 252 | 0 | 26,853 | |||||||||||||||
1-4 Family residential construction
|
13,582 | 0 | 797 | 0 | 14,379 | |||||||||||||||
Total consumer mortgage
|
389,036 | 2,780 | 13,786 | 232 | 405,834 | |||||||||||||||
Commercial:
|
||||||||||||||||||||
Commercial loans secured by real estate
|
152,157 | 6,671 | 6,472 | 1,794 | 167,094 | |||||||||||||||
Commercial and industrial
|
45,779 | 8,235 | 4,533 | 458 | 59,005 | |||||||||||||||
Political subdivisions
|
36,480 | 0 | 0 | 70 | 36,480 | |||||||||||||||
Commercial construction
|
22,430 | 314 | 1,260 | 0 | 24,004 | |||||||||||||||
Loans secured by farmland
|
8,877 | 1,248 | 1,188 | 40 | 11,353 | |||||||||||||||
Multi-family (5 or more) residential
|
7,781 | 0 | 0 | 0 | 7,781 | |||||||||||||||
Agricultural loans
|
3,219 | 209 | 44 | 0 | 3,472 | |||||||||||||||
Other commercial loans
|
260 | 132 | 0 | 0 | 392 | |||||||||||||||
Total commercial
|
276,983 | 16,809 | 13,497 | 2,292 | 309,581 | |||||||||||||||
Consumer
|
14,696 | 33 | 265 | 2 | 14,996 | |||||||||||||||
Totals
|
$ | 680,715 | $ | 19,622 | $ | 27,548 | $ | 2,526 | $ | 730,411 |
June 30, 2011
|
Individually
|
Collectively
|
||||||||||
(In Thousands)
|
Evaluated
|
Evaluated
|
Totals
|
|||||||||
Loans:
|
||||||||||||
Consumer mortgage:
|
||||||||||||
Residential mortgage loans - first liens
|
$ | 1,371 | $ | 332,929 | $ | 334,300 | ||||||
Residential mortgage loans - junior liens
|
136 | 30,078 | 30,214 | |||||||||
Home equity lines of credit
|
0 | 28,544 | 28,544 | |||||||||
1-4 Family residential construction
|
0 | 8,574 | 8,574 | |||||||||
Total consumer mortgage
|
1,507 | 400,125 | 401,632 | |||||||||
Commercial:
|
||||||||||||
Commercial loans secured by real estate
|
1,860 | 155,422 | 157,282 | |||||||||
Commercial and industrial
|
802 | 58,989 | 59,791 | |||||||||
Political subdivisions
|
0 | 34,675 | 34,675 | |||||||||
Commercial construction
|
978 | 23,748 | 24,726 | |||||||||
Loans secured by farmland
|
930 | 9,997 | 10,927 | |||||||||
Multi-family (5 or more) residential
|
0 | 7,514 | 7,514 | |||||||||
Agricultural loans
|
39 | 3,143 | 3,182 | |||||||||
Other commercial loans
|
0 | 576 | 576 | |||||||||
Total commercial
|
4,609 | 294,064 | 298,673 | |||||||||
Consumer
|
58 | 13,573 | 13,631 | |||||||||
Total Loans
|
$ | 6,174 | $ | 707,762 | $ | 713,936 |
June 30, 2011
|
Individually
|
Collectively
|
||||||||||
(In Thousands)
|
Evaluated
|
Evaluated
|
Totals
|
|||||||||
Allowance for Loan Losses:
|
||||||||||||
Consumer mortgage:
|
||||||||||||
Residential mortgage loans - first liens
|
$ | 455 | $ | 2,595 | $ | 3,050 | ||||||
Residential mortgage loans - junior liens
|
25 | 268 | 293 | |||||||||
Home equity lines of credit
|
0 | 220 | 220 | |||||||||
1-4 Family residential construction
|
0 | 67 | 67 | |||||||||
Total consumer mortgage
|
480 | 3,150 | 3,630 | |||||||||
Commercial:
|
||||||||||||
Commercial loans secured by real estate
|
650 | 1,852 | 2,502 | |||||||||
Commercial and industrial
|
294 | 614 | 908 | |||||||||
Political subdivisions
|
0 | 0 | 0 | |||||||||
Commercial construction
|
65 | 216 | 281 | |||||||||
Loans secured by farmland
|
35 | 99 | 134 | |||||||||
Multi-family (5 or more) residential
|
0 | 75 | 75 | |||||||||
Agricultural loans
|
0 | 29 | 29 | |||||||||
Other commercial loans
|
0 | 5 | 5 | |||||||||
Total commercial
|
1,044 | 2,890 | 3,934 | |||||||||
Consumer
|
58 | 217 | 275 | |||||||||
Unallocated
|
430 | |||||||||||
Total Allowance for Loan Losses
|
$ | 1,582 | $ | 6,257 | $ | 8,269 |
December 31, 2010
|
Individually
|
Collectively
|
||||||||||
(In Thousands)
|
Evaluated
|
Evaluated
|
Totals
|
|||||||||
Loans:
|
||||||||||||
Consumer mortgage:
|
||||||||||||
Residential mortgage loans - first liens
|
$ | 442 | $ | 332,570 | $ | 333,012 | ||||||
Residential mortgage loans - junior liens
|
239 | 31,351 | 31,590 | |||||||||
Home equity lines of credit
|
0 | 26,853 | 26,853 | |||||||||
1-4 Family residential construction
|
994 | 13,385 | 14,379 | |||||||||
Total consumer mortgage
|
1,675 | 404,159 | 405,834 | |||||||||
Commercial:
|
||||||||||||
Commercial loans secured by real estate
|
3,818 | 163,276 | 167,094 | |||||||||
Commercial and industrial
|
931 | 58,074 | 59,005 | |||||||||
Political subdivisions
|
0 | 36,480 | 36,480 | |||||||||
Commercial construction
|
1,197 | 22,807 | 24,004 | |||||||||
Loans secured by farmland
|
931 | 10,422 | 11,353 | |||||||||
Multi-family (5 or more) residential
|
0 | 7,781 | 7,781 | |||||||||
Agricultural loans
|
39 | 3,433 | 3,472 | |||||||||
Other commercial loans
|
0 | 392 | 392 | |||||||||
Total commercial
|
6,916 | 302,665 | 309,581 | |||||||||
Consumer
|
57 | 14,939 | 14,996 | |||||||||
Total Loans
|
$ | 8,648 | $ | 721,763 | $ | 730,411 |
Individually
|
Collectively
|
|||||||||||
(In Thousands)
|
Evaluated
|
Evaluated
|
Totals
|
|||||||||
Allowance for Loan Losses:
|
||||||||||||
Consumer mortgage:
|
||||||||||||
Residential mortgage loans - first liens
|
$ | 98 | $ | 2,647 | $ | 2,745 | ||||||
Residential mortgage loans - junior liens
|
80 | 254 | 334 | |||||||||
Home equity lines of credit
|
0 | 218 | 218 | |||||||||
1-4 Family residential construction
|
100 | 108 | 208 | |||||||||
Total consumer mortgage
|
278 | 3,227 | 3,505 | |||||||||
Commercial:
|
||||||||||||
Commercial loans secured by real estate
|
1,335 | 1,979 | 3,314 | |||||||||
Commercial and industrial
|
202 | 660 | 862 | |||||||||
Political subdivisions
|
0 | 0 | 0 | |||||||||
Commercial construction
|
380 | 210 | 590 | |||||||||
Loans secured by farmland
|
36 | 103 | 139 | |||||||||
Multi-family (5 or more) residential
|
0 | 63 | 63 | |||||||||
Agricultural loans
|
0 | 32 | 32 | |||||||||
Other commercial loans
|
0 | 0 | 0 | |||||||||
Total commercial
|
1,953 | 3,047 | 5,000 | |||||||||
Consumer
|
57 | 232 | 289 | |||||||||
Unallocated
|
313 | |||||||||||
Total Allowance for Loan Losses
|
$ | 2,288 | $ | 6,506 | $ | 9,107 |
As of
|
As of
|
|||||||
(In Thousands)
|
June 30
|
Dec. 31
|
||||||
2011
|
2010
|
|||||||
Impaired loans with a valuation allowance
|
$ | 4,049 | $ | 5,457 | ||||
Impaired loans without a valuation allowance
|
2,125 | 3,191 | ||||||
Total impaired loans
|
$ | 6,174 | $ | 8,648 | ||||
Valuation allowance related to impaired loans
|
$ | 1,582 | $ | 2,288 | ||||
Restructured loans (troubled debt restructurings)
|
$ | 4,303 | $ | 645 |
June 30, 2011
|
December 31, 2010
|
|||||||||||||||
Past Due
|
Past Due
|
|||||||||||||||
(In Thousands)
|
90+ Days and
|
90+ Days and
|
||||||||||||||
Accruing
|
Nonaccrual
|
Accruing
|
Nonaccrual
|
|||||||||||||
Consumer mortgage:
|
||||||||||||||||
Residential mortgage loans - first liens
|
$ | 334 | $ | 3,137 | $ | 571 | $ | 3,301 | ||||||||
Residential mortgage loans - junior liens
|
21 | 114 | 0 | 218 | ||||||||||||
1-4 Family residential construction
|
0 | 0 | 0 | 797 | ||||||||||||
Total consumer mortgage
|
355 | 3,251 | 571 | 4,316 | ||||||||||||
Commercial:
|
||||||||||||||||
Commercial loans secured by real estate
|
125 | 1,863 | 60 | 3,666 | ||||||||||||
Commercial and industrial
|
18 | 480 | 0 | 611 | ||||||||||||
Commercial construction
|
0 | 978 | 0 | 1,197 | ||||||||||||
Loans secured by farmland
|
54 | 929 | 90 | 932 | ||||||||||||
Agricultural loans
|
0 | 40 | 0 | 40 | ||||||||||||
Total commercial
|
197 | 4,290 | 150 | 6,446 | ||||||||||||
Consumer
|
9 | 45 | 6 | 47 | ||||||||||||
Totals
|
$ | 561 | $ | 7,586 | $ | 727 | $ | 10,809 |
As of June 30, 2011
|
||||||||||||||||
Current &
|
||||||||||||||||
(In Thousands)
|
Past Due
|
Past Due
|
Past Due
|
|||||||||||||
Less than
|
30-89
|
90+
|
||||||||||||||
30 Days
|
Days
|
Days
|
Total
|
|||||||||||||
Consumer mortgage:
|
||||||||||||||||
Residential mortgage loans - first liens
|
$ | 327,859 | $ | 5,036 | $ | 1,405 | $ | 334,300 | ||||||||
Residential mortgage loans - junior liens
|
29,761 | 377 | 76 | 30,214 | ||||||||||||
Home equity lines of credit
|
28,344 | 200 | 0 | 28,544 | ||||||||||||
1-4 Family residential construction
|
8,574 | 0 | 0 | 8,574 | ||||||||||||
Total consumer mortgage
|
394,538 | 5,613 | 1,481 | 401,632 | ||||||||||||
Commercial:
|
||||||||||||||||
Commercial loans secured by real estate
|
155,565 | 419 | 1,298 | 157,282 | ||||||||||||
Commercial and industrial
|
58,846 | 821 | 124 | 59,791 | ||||||||||||
Political subdivisions
|
34,675 | 0 | 0 | 34,675 | ||||||||||||
Commercial construction
|
24,479 | 247 | 0 | 24,726 | ||||||||||||
Loans secured by farmland
|
9,937 | 45 | 945 | 10,927 | ||||||||||||
Multi-family (5 or more) residential
|
7,505 | 9 | 0 | 7,514 | ||||||||||||
Agricultural loans
|
3,142 | 0 | 40 | 3,182 | ||||||||||||
Other commercial loans
|
576 | 0 | 0 | 576 | ||||||||||||
Total commercial
|
294,725 | 1,541 | 2,407 | 298,673 | ||||||||||||
Consumer
|
13,492 | 130 | 9 | 13,631 | ||||||||||||
Totals
|
$ | 702,755 | $ | 7,284 | $ | 3,897 | $ | 713,936 |
As of December 31, 2010
|
||||||||||||||||
Current &
|
||||||||||||||||
(In Thousands)
|
Past Due
|
Past Due
|
Past Due
|
|||||||||||||
Less than
|
30-89
|
90+
|
||||||||||||||
30 Days
|
Days
|
Days
|
Total
|
|||||||||||||
Consumer mortgage:
|
||||||||||||||||
Residential mortgage loans - first liens
|
$ | 325,567 | $ | 5,132 | $ | 2,313 | $ | 333,012 | ||||||||
Residential mortgage loans - junior liens
|
30,997 | 436 | 157 | 31,590 | ||||||||||||
Home equity lines of credit
|
26,744 | 109 | 0 | 26,853 | ||||||||||||
1-4 Family residential construction
|
14,379 | 0 | 0 | 14,379 | ||||||||||||
Total consumer mortgage
|
397,687 | 5,677 | 2,470 | 405,834 | ||||||||||||
Commercial:
|
||||||||||||||||
Commercial loans secured by real estate
|
163,343 | 940 | 2,811 | 167,094 | ||||||||||||
Commercial and industrial
|
58,474 | 319 | 212 | 59,005 | ||||||||||||
Political subdivisions
|
36,480 | 0 | 0 | 36,480 | ||||||||||||
Commercial construction
|
23,674 | 330 | 0 | 24,004 | ||||||||||||
Loans secured by farmland
|
10,294 | 77 | 982 | 11,353 | ||||||||||||
Multi-family (5 or more) residential
|
7,769 | 12 | 0 | 7,781 | ||||||||||||
Agricultural loans
|
3,422 | 10 | 40 | 3,472 | ||||||||||||
Other commercial loans
|
77 | 315 | 0 | 392 | ||||||||||||
Total commercial
|
303,533 | 2,003 | 4,045 | 309,581 | ||||||||||||
Consumer
|
14,686 | 289 | 21 | 14,996 | ||||||||||||
Totals
|
$ | 715,906 | $ | 7,969 | $ | 6,536 | $ | 730,411 |
Current &
|
||||||||||||||||
(In Thousands)
|
Past Due
|
Past Due
|
Past Due
|
|||||||||||||
Less than
|
30-89
|
90+
|
||||||||||||||
30 Days
|
Days
|
Days
|
Total
|
|||||||||||||
June 30, 2011 Nonaccrual Totals
|
$ | 3,577 | $ | 673 | $ | 3,336 | $ | 7,586 | ||||||||
December 31, 2010 Nonaccrual Totals
|
$ | 4,156 | $ | 844 | $ | 5,809 | $ | 10,809 |
Defined Benefit Plans
|
||||||||||||||||
(In Thousands)
|
Pension
|
Postretirement
|
||||||||||||||
Six Months Ended
|
Six Months Ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Service cost
|
$ | 0 | $ | 0 | $ | 42 | $ | 34 | ||||||||
Interest cost
|
37 | 34 | 46 | 45 | ||||||||||||
Expected return on plan assets
|
(36 | ) | (33 | ) | 0 | 0 | ||||||||||
Amortization of transition (asset) obligation
|
0 | 0 | 18 | 18 | ||||||||||||
Amortization of prior service cost
|
0 | 0 | 7 | 7 | ||||||||||||
Recognized net actuarial loss
|
2 | 2 | 0 | 0 | ||||||||||||
Net periodic benefit cost
|
$ | 3 | $ | 3 | $ | 113 | $ | 104 | ||||||||
Defined Benefit Plans
|
||||||||||||||||
(In Thousands)
|
Pension
|
Postretirement
|
||||||||||||||
Three Months Ended
|
Three Months Ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Service cost
|
$ | 0 | $ | 0 | $ | 21 | $ | 17 | ||||||||
Interest cost
|
19 | 17 | 23 | 23 | ||||||||||||
Expected return on plan assets
|
(18 | ) | (16 | ) | 0 | 0 | ||||||||||
Amortization of transition (asset) obligation
|
0 | 0 | 9 | 9 | ||||||||||||
Amortization of prior service cost
|
0 | 0 | 4 | 3 | ||||||||||||
Recognized net actuarial loss
|
1 | 1 | 0 | 0 | ||||||||||||
Net periodic benefit cost
|
$ | 2 | $ | 2 | $ | 57 | $ | 52 |
2011
|
2010
|
|||||||
Fair value of each option granted
|
$ | 4.26 |
Not applicable (N/A)
|
|||||
Volatility
|
37 | % | N/A | |||||
Expected option lives
|
8 Years
|
N/A | ||||||
Risk-free interest rate
|
3.10 | % | N/A | |||||
Dividend yield
|
3.86 | % | N/A |
(In Thousands)
|
Three Months Ended
|
Six Months Ended
|
||||||||||||||
June 30,
|
June 30,
|
June 30,
|
June 30,
|
|||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Stock options
|
$ | 123 | $ | 0 | $ | 279 | $ | 0 | ||||||||
Restricted stock
|
36 | 19 | 72 | 32 | ||||||||||||
Total
|
$ | 159 | $ | 19 | $ | 351 | $ | 32 |
June 30,
|
Dec. 31,
|
|||||||
(In Thousands)
|
2011
|
2010
|
||||||
Deferred tax assets:
|
||||||||
Unrealized holding losses on securities
|
$ | 0 | $ | 695 | ||||
Defined benefit plans - ASC 835
|
166 | 134 | ||||||
Net realized losses on securities
|
3,436 | 5,755 | ||||||
Allowance for loan losses
|
2,894 | 3,186 | ||||||
Credit for alternative minimum tax paid
|
4,814 | 3,287 | ||||||
Net operating loss carryforwards
|
888 | 2,794 | ||||||
General business credit carryforwards
|
815 | 815 | ||||||
Other deferred tax assets
|
1,606 | 1,347 | ||||||
Total deferred tax assets
|
14,619 | 18,013 | ||||||
Deferred tax liabilities:
|
||||||||
Unrealized holding gains on securities
|
2,730 | 0 | ||||||
Bank premises and equipment
|
1,570 | 1,649 | ||||||
Core deposit intangibles
|
94 | 114 | ||||||
Other deferred tax liabilities
|
126 | 196 | ||||||
Total deferred tax liabilities
|
4,520 | 1,959 | ||||||
Deferred tax asset, net
|
$ | 10,099 | $ | 16,054 |
Three Months Ended
|
Fiscal Year To Date
|
|||||||||||||||
(All amounts in thousands)
|
June 30,
|
June 30,
|
Six Months Ended June 30,
|
|||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
(Current)
|
(Prior Year)
|
(Current)
|
(Prior Year)
|
|||||||||||||
Income before income tax provision
|
$ | 7,826 | $ | 6,150 | $ | 15,431 | $ | 12,025 | ||||||||
Income tax provision
|
2,129 | 1,281 | 4,193 | 2,718 | ||||||||||||
Effective tax rate
|
27.20 | % | 20.83 | % | 27.17 | % | 22.60 | % |
·
|
changes in monetary and fiscal policies of the Federal Reserve Board and the U. S. Government, particularly related to changes in interest rates
|
·
|
changes in general economic conditions
|
·
|
legislative or regulatory changes
|
·
|
downturn in demand for loan, deposit and other financial services in the Corporation’s market area
|
·
|
increased competition from other banks and non-bank providers of financial services
|
·
|
technological changes and increased technology-related costs
|
·
|
changes in accounting principles, or the application of generally accepted accounting principles.
|
|
·
|
Net interest income was $11,815,000 in the second quarter 2011, up $533,000 from the first quarter 2011 and up $1,465,000 from the second quarter 2010. Year-to-date net interest income through June 30, 2011 totaled $23,097,000, or $2,274,000 (10.9%) higher than the total for the first six months of 2010. The improvement in net interest income in 2011 has resulted from several factors, including ongoing reductions in cost of funds, reduction in outstanding borrowings and lower balances maintained in overnight investment with the Federal Reserve and other banks. Net interest income includes accretion of $160,000 in the second quarter 2011, and $272,000 in the first six months of 2011, from the offset of a previous write-down on a security.
|
|
·
|
The provision for loan losses was $31,000 in the second quarter 2011, as compared to a credit (reduction in expense) of ($192,000) in the first quarter 2011 and a provision of $76,000 in the second quarter 2010. For the first six months of 2011, the credit for loan losses was ($161,000), as compared to a provision for loan losses of $283,000 for the first six months of 2010. The favorable loan loss results in the first half of 2011 and 2010 reflect the Corporation’s low levels of delinquencies and other loan-related credit problems, as compared to averages for comparable-sized peer banks.
|
|
·
|
Noninterest revenue was $3,673,000 in the second quarter 2011, up from $2,555,000 in the first quarter 2011 and $3,260,000 in the second quarter 2010. For the six months ended June 30, 2011, noninterest revenue totaled $6,228,000, down from $6,808,000 in the first six months of 2010. The reduction in noninterest revenue in the first quarter 2011 resulted from an impairment loss of $948,000 related to an investment in a real estate limited partnership. Excluding the impairment loss, noninterest revenue for the first six months of 2011 totaled $7,176,000, or 5.4% higher than the corresponding 2010 amount.
|
|
·
|
Gains from available-for-sale securities totaled $163,000 in the second quarter 2011, down from $1,839,000 in the first quarter 2011 and $319,000 in the second quarter 2010. For the first six months of 2011, gains from available-for-sale securities were $2,002,000, considerably higher than the total gains of $377,000 for the first six months of 2010. In the first quarter 2011, the Corporation realized gains of $1,510,000 from two pooled trust-preferred securities that had been written off in prior periods.
|
|
·
|
Noninterest expense totaled $7,794,000 in the second quarter 2011, down from $8,263,000 in the first quarter 2011 and up 1.2% from total noninterest expense of $7,703,000 in the second quarter 2010. The reduction in noninterest expense in the second quarter 2011 as compared to the immediate prior quarter resulted mainly from reductions in payroll taxes and employee benefit expense and FDIC assessments. Noninterest expense for the second quarter 2011 as compared to the second quarter 2010 reflected an increase of $270,000 in salaries and wages, including $122,000 from employee stock option compensation, and a decrease in FDIC assessments of $226,000. In the six months ended June 30, 2011, total noninterest expense of $16,057,000 was 2.3% higher than for the first six months of 2010. Total salaries and wages for the first six months of 2011 were $593,000 higher than in 2010, including employee stock option compensation of $244,000 and an increase of $132,000 in estimated incentive compensation. Pensions and employee benefits expense was $402,000 higher in the first six months of 2011 than in the corresponding period of 2010, including higher estimated self-insured employee health insurance expense. FDIC assessments were $305,000 lower in the first six months of 2011 than in the first six months of 2010. Other operating expense was $235,000 lower in the first six months of 2011 than in the corresponding period of 2010, including reductions in public company-related expenses, loan collection, other real estate expenses and office expenses.
|
|
·
|
The provision for income taxes totaled $2,129,000 or 27.2% of pre-tax income in the second quarter 2011, up from $1,281,000 or 20.8% of pre-tax income in the second quarter 2010. For the six months ended June 30, 2011, the provision for income taxes was $4,193,000 or 27.2% of pre-tax income, up from $2,718,000 or 22.6% of pre-tax income in the first six months of 2010. The provision for income tax in the second quarter 2010 included a benefit (reduction in expense) of $225,000 resulting from a reduction in a valuation reserve.
|
|
·
|
In the third quarter 2010, the Corporation redeemed preferred stock that had previously been issued, and has had no preferred stock outstanding and no corresponding dividend costs in 2011. In 2010, earnings available for common shareholders were impacted by dividends paid on preferred stock, including $372,000 in the second quarter 2010 and $745,000 for the first six months of 2010.
|
(In Thousands)
|
||||||||||||||||||||||||
June 30,
|
Mar. 31,
|
Dec 31,
|
Sept. 30,
|
June 30,
|
Mar. 31,
|
|||||||||||||||||||
2010
|
2011
|
2010
|
2010
|
2010
|
2010
|
|||||||||||||||||||
Interest income
|
$ | 15,443 | $ | 15,298 | $ | 15,500 | $ | 15,495 | $ | 15,386 | $ | 15,733 | ||||||||||||
Interest expense
|
3,628 | 4,016 | 4,310 | 4,639 | 5,036 | 5,260 | ||||||||||||||||||
Net interest income
|
11,815 | 11,282 | 11,190 | 10,856 | 10,350 | 10,473 | ||||||||||||||||||
Provision (credit) for loan losses
|
31 | (192 | ) | 719 | 189 | 76 | 207 | |||||||||||||||||
Net Interest income after provision (credit) for loan losses
|
11,784 | 11,474 | 10,471 | 10,667 | 10,274 | 10,266 | ||||||||||||||||||
Other income
|
3,673 | 2,555 | 3,480 | 3,575 | 3,260 | 3,548 | ||||||||||||||||||
Net gains on available-for-sale securities
|
163 | 1,839 | 64 | 388 | 319 | 58 | ||||||||||||||||||
Other expenses
|
7,794 | 8,263 | 7,720 | 8,095 | 7,703 | 7,997 | ||||||||||||||||||
Income before income tax provision
|
7,826 | 7,605 | 6,295 | 6,535 | 6,150 | 5,875 | ||||||||||||||||||
Income tax provision
|
2,129 | 2,064 | 1,411 | 1,671 | 1,281 | 1,437 | ||||||||||||||||||
Net income
|
5,697 | 5,541 | 4,884 | 4,864 | 4,869 | 4,438 | ||||||||||||||||||
US Treasury preferred dividends
|
0 | 0 | 0 | 729 | 372 | 373 | ||||||||||||||||||
Net income available to common shareholders
|
$ | 5,697 | $ | 5,541 | $ | 4,884 | $ | 4,135 | $ | 4,497 | $ | 4,065 | ||||||||||||
Net income per common share – basic
|
$ | 0.47 | $ | 0.46 | $ | 0.40 | $ | 0.34 | $ | 0.37 | $ | 0.34 | ||||||||||||
Net income per common share – diluted
|
$ | 0.47 | $ | 0.45 | $ | 0.40 | $ | 0.34 | $ | 0.37 | $ | 0.34 |
Three Months Ended
|
Six Months Ended
|
|||||||||||||||||||||||
June 30,
|
Increase/
|
June 30,
|
Increase/
|
|||||||||||||||||||||
(In Thousands)
|
2011
|
2010
|
(Decrease)
|
2011
|
2010
|
(Decrease)
|
||||||||||||||||||
INTEREST INCOME
|
||||||||||||||||||||||||
Available-for-sale securities:
|
||||||||||||||||||||||||
Taxable
|
$ | 2,910 | $ | 2,756 | $ | 154 | $ | 5,665 | $ | 5,919 | $ | (254 | ) | |||||||||||
Tax-exempt
|
1,921 | 1,753 | 168 | 3,826 | 3,497 | 329 | ||||||||||||||||||
Total available-for-sale securities
|
4,831 | 4,509 | 322 | 9,491 | 9,416 | 75 | ||||||||||||||||||
Held-to-maturity securities,
|
||||||||||||||||||||||||
Taxable
|
0 | 0 | 0 | 0 | 2 | (2 | ) | |||||||||||||||||
Trading securities
|
0 | 0 | 0 | 0 | 2 | (2 | ) | |||||||||||||||||
Interest-bearing due from banks
|
16 | 38 | (22 | ) | 32 | 76 | (44 | ) | ||||||||||||||||
Federal funds sold
|
0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Loans:
|
||||||||||||||||||||||||
Taxable
|
10,854 | 11,009 | (155 | ) | 21,722 | 21,959 | (237 | ) | ||||||||||||||||
Tax-exempt
|
554 | 592 | (38 | ) | 1,111 | 1,180 | (69 | ) | ||||||||||||||||
Total loans
|
11,408 | 11,601 | (193 | ) | 22,833 | 23,139 | (306 | ) | ||||||||||||||||
Total Interest Income
|
16,255 | 16,148 | 107 | 32,356 | 32,635 | (279 | ) | |||||||||||||||||
INTEREST EXPENSE
|
||||||||||||||||||||||||
Interest-bearing deposits:
|
||||||||||||||||||||||||
Interest checking
|
117 | 227 | (110 | ) | 247 | 434 | (187 | ) | ||||||||||||||||
Money market
|
140 | 231 | (91 | ) | 291 | 480 | (189 | ) | ||||||||||||||||
Savings
|
48 | 47 | 1 | 104 | 91 | 13 | ||||||||||||||||||
Certificates of deposit
|
1,001 | 1,299 | (298 | ) | 2,042 | 2,725 | (683 | ) | ||||||||||||||||
Individual Retirement Accounts
|
960 | 1,252 | (292 | ) | 2,149 | 2,482 | (333 | ) | ||||||||||||||||
Other time deposits
|
1 | 2 | (1 | ) | 2 | 3 | (1 | ) | ||||||||||||||||
Total interest-bearing deposits
|
2,267 | 3,058 | (791 | ) | 4,835 | 6,215 | (1,380 | ) | ||||||||||||||||
Borrowed funds:
|
||||||||||||||||||||||||
Short-term
|
8 | 51 | (43 | ) | 14 | 151 | (137 | ) | ||||||||||||||||
Long-term
|
1,353 | 1,927 | (574 | ) | 2,795 | 3,930 | (1,135 | ) | ||||||||||||||||
Total borrowed funds
|
1,361 | 1,978 | (617 | ) | 2,809 | 4,081 | (1,272 | ) | ||||||||||||||||
Total Interest Expense
|
3,628 | 5,036 | (1,408 | ) | 7,644 | 10,296 | (2,652 | ) | ||||||||||||||||
Net Interest Income
|
$ | 12,627 | $ | 11,112 | $ | 1,515 | $ | 24,712 | $ | 22,339 | $ | 2,373 |
3 Months
|
3 Months
|
6 Months
|
6 Months
|
|||||||||||||||||||||||||||||
Ended
|
Rate of
|
Ended
|
Rate of
|
Ended
|
Rate of
|
Ended
|
Rate of
|
|||||||||||||||||||||||||
6/30/2011
|
Return/
|
6/30/2010
|
Return/
|
6/30/2011
|
Return/
|
6/30/2010
|
Return/
|
|||||||||||||||||||||||||
Average
|
Cost of
|
Average
|
Cost of
|
Average
|
Cost of
|
Average
|
Cost of
|
|||||||||||||||||||||||||
Balance
|
Funds %
|
Balance
|
Funds %
|
Balance
|
Funds %
|
Balance
|
Funds %
|
|||||||||||||||||||||||||
EARNING ASSETS
|
||||||||||||||||||||||||||||||||
Available-for-sale securities, at amortized cost:
|
||||||||||||||||||||||||||||||||
Taxable
|
$ | 335,289 | 3.48 | % | $ | 324,555 | 3.41 | % | $ | 331,219 | 3.45 | % | $ | 315,809 | 3.78 | % | ||||||||||||||||
Tax-exempt
|
128,049 | 6.02 | % | 109,090 | 6.45 | % | 127,514 | 6.05 | % | 108,477 | 6.50 | % | ||||||||||||||||||||
Total available-for-sale securities
|
463,338 | 4.18 | % | 433,645 | 4.17 | % | 458,733 | 4.17 | % | 424,286 | 4.48 | % | ||||||||||||||||||||
Held-to-maturity securities,
|
||||||||||||||||||||||||||||||||
Taxable
|
0 | 0.00 | % | 0 | 0.00 | % | 0 | 0.00 | % | 76 | 5.27 | % | ||||||||||||||||||||
Trading securities
|
0 | 0.00 | % | 0 | 0.00 | % | 0 | 0.00 | % | 58 | 6.99 | % | ||||||||||||||||||||
Interest-bearing due from banks
|
29,385 | 0.22 | % | 66,326 | 0.23 | % | 30,561 | 0.21 | % | 66,605 | 0.23 | % | ||||||||||||||||||||
Federal funds sold
|
0 | 0.00 | % | 96 | 0.00 | % | 0 | 0.00 | % | 78 | 0.00 | % | ||||||||||||||||||||
Loans:
|
||||||||||||||||||||||||||||||||
Taxable
|
681,675 | 6.39 | % | 682,956 | 6.47 | % | 685,305 | 6.39 | % | 683,425 | 6.48 | % | ||||||||||||||||||||
Tax-exempt
|
34,806 | 6.38 | % | 36,248 | 6.55 | % | 34,939 | 6.41 | % | 36,306 | 6.55 | % | ||||||||||||||||||||
Total loans
|
716,481 | 6.39 | % | 719,204 | 6.47 | % | 720,244 | 6.39 | % | 719,731 | 6.48 | % | ||||||||||||||||||||
Total Earning Assets
|
1,209,204 | 5.39 | % | 1,219,271 | 5.31 | % | 1,209,538 | 5.39 | % | 1,210,834 | 5.44 | % | ||||||||||||||||||||
Cash
|
17,631 | 17,807 | 17,310 | 17,367 | ||||||||||||||||||||||||||||
Unrealized gain/loss on securities
|
5,805 | 906 | 2,626 | 354 | ||||||||||||||||||||||||||||
Allowance for loan losses
|
(8,938 | ) | (8,523 | ) | (9,069 | ) | (8,467 | ) | ||||||||||||||||||||||||
Bank premises and equipment
|
22,114 | 23,699 | 22,293 | 23,930 | ||||||||||||||||||||||||||||
Intangible Asset - Core Deposit Intangible
|
287 | 438 | 301 | 461 | ||||||||||||||||||||||||||||
Intangible Asset - Goodwill
|
11,942 | 11,942 | 11,942 | 11,942 | ||||||||||||||||||||||||||||
Other assets
|
56,349 | 78,503 | 58,541 | 78,846 | ||||||||||||||||||||||||||||
Total Assets
|
$ | 1,314,394 | $ | 1,344,043 | $ | 1,313,482 | $ | 1,335,267 | ||||||||||||||||||||||||
INTEREST-BEARING LIABILITIES
|
||||||||||||||||||||||||||||||||
Interest-bearing deposits:
|
||||||||||||||||||||||||||||||||
Interest checking
|
$ | 166,795 | 0.28 | % | $ | 144,439 | 0.63 | % | $ | 165,146 | 0.30 | % | $ | 135,826 | 0.64 | % | ||||||||||||||||
Money market
|
207,266 | 0.27 | % | 203,567 | 0.46 | % | 205,363 | 0.29 | % | 200,313 | 0.48 | % | ||||||||||||||||||||
Savings
|
95,821 | 0.20 | % | 75,720 | 0.25 | % | 94,232 | 0.22 | % | 73,662 | 0.25 | % | ||||||||||||||||||||
Certificates of deposit
|
205,346 | 1.96 | % | 226,352 | 2.30 | % | 208,721 | 1.97 | % | 231,622 | 2.37 | % | ||||||||||||||||||||
Individual Retirement Accounts
|
156,611 | 2.46 | % | 163,156 | 3.08 | % | 158,880 | 2.73 | % | 162,147 | 3.09 | % | ||||||||||||||||||||
Other time deposits
|
1,350 | 0.30 | % | 1,380 | 0.58 | % | 1,154 | 0.35 | % | 1,186 | 0.51 | % | ||||||||||||||||||||
Total interest-bearing deposits
|
833,189 | 1.09 | % | 814,614 | 1.51 | % | 833,496 | 1.17 | % | 804,756 | 1.56 | % | ||||||||||||||||||||
Borrowed funds:
|
||||||||||||||||||||||||||||||||
Short-term
|
19,407 | 0.17 | % | 30,478 | 0.67 | % | 18,143 | 0.16 | % | 33,815 | 0.90 | % | ||||||||||||||||||||
Long-term
|
135,344 | 4.01 | % | 187,844 | 4.11 | % | 140,544 | 4.01 | % | 191,970 | 4.13 | % | ||||||||||||||||||||
Total borrowed funds
|
154,751 | 3.53 | % | 218,322 | 3.63 | % | 158,687 | 3.57 | % | 225,785 | 3.64 | % | ||||||||||||||||||||
Total Interest-bearing Liabilities
|
987,940 | 1.47 | % | 1,032,936 | 1.96 | % | 992,183 | 1.55 | % | 1,030,541 | 2.01 | % | ||||||||||||||||||||
Demand deposits
|
169,677 | 145,597 | 168,948 | 141,041 | ||||||||||||||||||||||||||||
Other liabilities
|
6,998 | 7,244 | 6,731 | 7,354 | ||||||||||||||||||||||||||||
Total Liabilities
|
1,164,615 | 1,185,777 | 1,167,862 | 1,178,936 | ||||||||||||||||||||||||||||
Stockholders' equity, excluding other comprehensive income/loss
|
146,267 | 157,946 | 144,172 | 156,430 | ||||||||||||||||||||||||||||
Other comprehensive income/loss
|
3,512 | 320 | 1,448 | (99 | ) | |||||||||||||||||||||||||||
Total Stockholders' Equity
|
149,779 | 158,266 | 145,620 | 156,331 | ||||||||||||||||||||||||||||
Total Liabilities and Stockholders' Equity
|
$ | 1,314,394 | $ | 1,344,043 | $ | 1,313,482 | $ | 1,335,267 | ||||||||||||||||||||||||
Interest Rate Spread
|
3.92 | % | 3.35 | % | 3.84 | % | 3.43 | % | ||||||||||||||||||||||||
Net Interest Income/Earning Assets
|
4.19 | % | 3.66 | % | 4.12 | % | 3.72 | % | ||||||||||||||||||||||||
Total Deposits (Interest-bearing and Demand)
|
$ | 1,002,866 | $ | 960,211 | $ | 1,002,444 | $ | 945,797 |
(In Thousands)
|
3 Months Ended 6/30/11 vs. 6/30/10
|
6 Months Ended 6/30/11 vs. 6/30/10
|
||||||||||||||||||||||
Change in
|
Change in
|
Total
|
Change in
|
Change in
|
Total
|
|||||||||||||||||||
Volume
|
Rate
|
Change
|
Volume
|
Rate
|
Change
|
|||||||||||||||||||
EARNING ASSETS
|
||||||||||||||||||||||||
Available-for-sale securities:
|
||||||||||||||||||||||||
Taxable
|
$ | 82 | $ | 72 | $ | 154 | $ | 280 | $ | (534 | ) | $ | (254 | ) | ||||||||||
Tax-exempt
|
290 | (122 | ) | 168 | 583 | (254 | ) | 329 | ||||||||||||||||
Total available-for-sale securities
|
372 | (50 | ) | 322 | 863 | (788 | ) | 75 | ||||||||||||||||
Held-to-maturity securities,
|
||||||||||||||||||||||||
Taxable
|
0 | 0 | 0 | (1 | ) | (1 | ) | (2 | ) | |||||||||||||||
Trading securities
|
0 | 0 | 0 | (1 | ) | (1 | ) | (2 | ) | |||||||||||||||
Interest-bearing due from banks
|
(20 | ) | (2 | ) | (22 | ) | (38 | ) | (6 | ) | (44 | ) | ||||||||||||
Federal funds sold
|
0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Loans:
|
||||||||||||||||||||||||
Taxable
|
(21 | ) | (134 | ) | (155 | ) | 60 | (297 | ) | (237 | ) | |||||||||||||
Tax-exempt
|
(22 | ) | (16 | ) | (38 | ) | (43 | ) | (26 | ) | (69 | ) | ||||||||||||
Total loans
|
(43 | ) | (150 | ) | (193 | ) | 17 | (323 | ) | (306 | ) | |||||||||||||
Total Interest Income
|
309 | (202 | ) | 107 | 840 | (1,119 | ) | (279 | ) | |||||||||||||||
INTEREST-BEARING LIABILITIES
|
||||||||||||||||||||||||
Interest-bearing deposits:
|
||||||||||||||||||||||||
Interest checking
|
32 | (142 | ) | (110 | ) | 80 | (267 | ) | (187 | ) | ||||||||||||||
Money market
|
4 | (95 | ) | (91 | ) | 12 | (201 | ) | (189 | ) | ||||||||||||||
Savings
|
12 | (11 | ) | 1 | 24 | (11 | ) | 13 | ||||||||||||||||
Certificates of deposit
|
(113 | ) | (185 | ) | (298 | ) | (252 | ) | (431 | ) | (683 | ) | ||||||||||||
Individual Retirement Accounts
|
(49 | ) | (243 | ) | (292 | ) | (49 | ) | (284 | ) | (333 | ) | ||||||||||||
Other time deposits
|
0 | (1 | ) | (1 | ) | 0 | (1 | ) | (1 | ) | ||||||||||||||
Total interest-bearing deposits
|
(114 | ) | (677 | ) | (791 | ) | (185 | ) | (1,195 | ) | (1,380 | ) | ||||||||||||
Borrowed funds:
|
||||||||||||||||||||||||
Short-term
|
(13 | ) | (30 | ) | (43 | ) | (49 | ) | (88 | ) | (137 | ) | ||||||||||||
Long-term
|
(526 | ) | (48 | ) | (574 | ) | (1,026 | ) | (109 | ) | (1,135 | ) | ||||||||||||
Total borrowed funds
|
(539 | ) | (78 | ) | (617 | ) | (1,075 | ) | (197 | ) | (1,272 | ) | ||||||||||||
Total Interest Expense
|
(653 | ) | (755 | ) | (1,408 | ) | (1,260 | ) | (1,392 | ) | (2,652 | ) | ||||||||||||
Net Interest Income
|
$ | 962 | $ | 553 | $ | 1,515 | $ | 2,100 | $ | 273 | $ | 2,373 |
Accretion of
|
||||
Prior OTTI
|
||||
4th Quarter 2010 (Actual)
|
$ | 83 | ||
1st Quarter 2011 (Actual)
|
111 | |||
2nd Quarter 2011 (Actual)
|
160 | |||
3rd Quarter 2011 (Estimated)
|
229 | |||
4th Quarter 2011 (Estimated)
|
325 | |||
1st Quarter 2012 (Estimated)
|
457 | |||
2nd Quarter 2012 (Estimated)
|
398 | |||
Total
|
$ | 1,763 |
TABLE V - COMPARISON OF NON-INTEREST INCOME
|
||||||||||||||||
(In Thousands)
|
Three Months Ended
|
Six Months Ended
|
||||||||||||||
June 30,
|
June 30,
|
June 30,
|
June 30,
|
|||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Service charges on deposit accounts
|
$ | 1,225 | $ | 1,190 | $ | 2,356 | $ | 2,283 | ||||||||
Service charges and fees
|
207 | 210 | 425 | 403 | ||||||||||||
Trust and financial management revenue
|
946 | 830 | 1,823 | 1,729 | ||||||||||||
Interchange revenue from debit card transactions
|
485 | 424 | 937 | 799 | ||||||||||||
Net gains from sales of loans
|
155 | 137 | 414 | 203 | ||||||||||||
Increase in cash surrender value of life insurance
|
132 | 119 | 254 | 231 | ||||||||||||
Insurance commissions, fees and premiums
|
58 | 61 | 126 | 121 | ||||||||||||
Impairment loss on limited partnership investment
|
0 | 0 | (948 | ) | 0 | |||||||||||
Brokerage revenue
|
229 | 107 | 352 | 216 | ||||||||||||
Net (loss) gain from other real estate
|
(24 | ) | 2 | (43 | ) | (36 | ) | |||||||||
Net gain from sale of premises and equipment
|
0 | 1 | 0 | 449 | ||||||||||||
Other operating income
|
260 | 179 | 532 | 410 | ||||||||||||
Total other operating income, before realized gains on available-for-sale securities, net
|
$ | 3,673 | $ | 3,260 | $ | 6,228 | $ | 6,808 |
|
·
|
In the first quarter 2011, the Corporation reported an impairment loss of $948,000 related to an investment in a real estate limited partnership. This investment had been included in Other Assets in the consolidated balance sheet at December 31, 2010. In addition to the limited partnership investment, the Corporation has a loan receivable from the limited partnership of $1,044,000 at June 30, 2011. Based on updated financial information, management prepared an estimated valuation based on cash flow analysis. That analysis showed the estimated return to the Corporation would be sufficient to repay the loan in full, but would not provide sufficient additional cash flow for return on the limited partnership investment. Accordingly, management made the decision to completely write-off the limited partnership investment in 2011.
|
|
·
|
In 2010, net gains from sales of premises and equipment totaled $449,000, including a first quarter gain of $448,000 from the sale of a parcel adjacent to one of the bank operating locations. The sale proceeds included $390,000 associated with long-term privileges within a municipal parking facility currently under construction.
|
|
·
|
Trust and financial management revenue was $94,000, or 5.4%, higher in 2011 than in 2010. Assets under management in the first half of 2011 have been higher than in the corresponding period of 2010, including the impact of market value appreciation. Assets under management amounted to $634,821,000 at June 30, 2011, up 13.7% from June 30, 2010.
|
|
·
|
Interchange revenue from debit card transactions of $937,000 in the first six months of 2011 is $138,000, or 17.3%, higher than in the same period of 2010. The increased level of interchange fees reflects customers’ higher volume of debit card transactions. The Federal Reserve recently issued a final rule, effective October 1, 2011, which establishes maximum interchange rates that may be paid to large (as defined) financial institutions. The maximum rates established under the rule are approximately 45% lower than the average market rates paid to the Corporation throughout the last several years. Although the rule’s rate constraints do not directly apply to the Corporation (because the Corporation is not considered a large financial institution for this purpose), management believes interchange revenues could be reduced either because of lower volumes or because market conditions may dictate that smaller financial institutions receive rates similar to large financial institutions. Management is monitoring regulatory and market conditions associated with interchange processing, but cannot reasonably estimate the timing or amount of future changes in interchange revenues that may occur.
|
|
·
|
Net gains from the sale of loans increased $211,000 in 2011 compared to 2010. In 2010, management began to sell a significant amount of residential mortgage originations into the secondary market. The increase in the net gains from sales of loans is almost entirely associated with the Corporation’s participation in the MPF Xtra program administered by the Federal Home Loan Banks of Pittsburgh and Chicago. The increased volume of mortgage loans sold in the first six months of 2011 includes the impact of significant refinancing activity in the last several months of 2010. In 2011, new activity has been reduced from the last several months of 2010, as evidenced by the reduction in the outstanding balance of loans held for sale to $167,000 at June 30, 2011 from $5,247,000 at December 31, 2010.
|
|
·
|
Brokerage revenue of $352,000 in the first six months of 2011 was $136,000 higher than in the same period of 2010. The increase in brokerage revenue includes the effects of sales of annuities to customers who had previously held variable rate Individual Retirement Accounts (deposits) with the Corporation. Changes in variable rate Individual Retirement Account deposits are discussed in more detail in the Net Interest Income section of Management’s Discussion and Analysis.
|
|
·
|
Other operating income of $532,000 in the first six months of 2011 was $122,000 higher than in the first six months of 2010. In 2011, this category included income of $122,000 from a limited liability equity investment in an entity performing title insurance services throughout Pennsylvania. No similar income was recognized for the Corporation’s investment in this entity in 2010.
|
TABLE VI - COMPARISON OF NON-INTEREST EXPENSE
|
||||||||||||||||
(In Thousands)
|
Three Months Ended
|
Six Months Ended
|
||||||||||||||
June 30,
|
June 30,
|
June 30,
|
June 30,
|
|||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Salaries and wages
|
$ | 3,469 | $ | 3,199 | $ | 6,870 | $ | 6,277 | ||||||||
Pensions and other employee benefits
|
1,018 | 983 | 2,324 | 1,922 | ||||||||||||
Occupancy expense, net
|
665 | 651 | 1,397 | 1,350 | ||||||||||||
Furniture and equipment expense
|
453 | 542 | 937 | 1,110 | ||||||||||||
FDIC Assessments
|
189 | 415 | 514 | 819 | ||||||||||||
Pennsylvania shares tax
|
320 | 306 | 639 | 611 | ||||||||||||
Other operating expense
|
1,680 | 1,607 | 3,376 | 3,611 | ||||||||||||
Total Other Expense
|
$ | 7,794 | $ | 7,703 | $ | 16,057 | $ | 15,700 |
|
·
|
Salaries and wages increased $593,000, or 9.4%. In the first six months of 2011, salaries and wages expense includes officers’ incentive stock option compensation of $244,000; however, since no stock options were awarded in 2010, there was no officers’ incentive stock option expense incurred in 2010. In addition, salaries and wages expense in 2011 include an estimated accrual for incentive bonuses of $600,000 which is $132,000 higher than the comparable 2010 amount. Excluding performance based stock and bonus compensation incentives, total salaries and wages were 3.1% higher in the first six months of 2011 as compared to the comparable period in 2010.
|
|
·
|
Pensions and other employee benefits increased $402,000, or 20.9%. Within this category, group health insurance expense was $251,000 higher in 2011. In the first quarter 2010, the Corporation recorded a reduction in group health insurance expense of $215,000 for the difference between actual and estimated claims from the previous year (2009). Payroll taxes and employer contributions expense associated with the Savings & Retirement Plan (a 401(k) plan) and Employee Stock Ownership Plan are higher in the first six months of 2011 than in the same period of 2010, including higher costs in the first quarter 2011 related to incentive compensation paid in January 2011 based on 2010 performance.
|
|
·
|
Furniture and equipment expense decreased $173,000, or 15.6% in 2011 with the decrease primarily associated with reductions in depreciation for the Corporation’s core banking systems.
|
|
·
|
FDIC Assessments decreased $305,000, or 37.2% in 2011. Effective April 1, 2011, the FDIC’s method of determining assessments to banks has changed, with the new methodology expected to result in higher assessments to larger, more complex or higher-risk institutions, with smaller assessments to many community and small regional banks. The Corporation’s estimated FDIC assessment for the second quarter 2011, determined using the new methodology, is substantially lower than the amounts assessed for the prior several quarters. The favorable decline also reflects rate changes attributed to improvements in the Corporation’s risk profile based on financial ratios.
|
|
·
|
Other operating expense decreased $235,000, or 6.5%, in the first six months of 2011 as compared to the comparable period in 2010. This category includes many different types of expenses, with the most significant differences in amounts between 2011 and 2010 as follows:
|
|
Ø
|
Professional fees and other costs associated with public company requirements, down $108,000, or 50.7%
|
|
Ø
|
Consulting fees associated with an overdraft privilege program, down $74,000, or 97.0%
|
|
Ø
|
Office supplies, down $61,000, or 33.0%
|
|
Ø
|
Expenses associated with other real estate properties, down $38,000, or 54.2%
|
|
Ø
|
Professional and administrative expenses associated with Citizens & Northern Investment Corporation activities, down $37,000, or 88.4%
|
|
Ø
|
Out-of-pocket collection-related expenses, net of reimbursements, down $35,000, or 82.2%
|
|
Ø
|
Operational losses associated with Trust and branch processing, down $33,000, or 67.1%
|
|
Ø
|
Amortization of core deposit intangibles from 2005 and 2007 acquisitions, down $31,000, or 35.0%
|
|
Ø
|
Expenses associated with Bucktail Life Insurance Company, up $155,000. In the second quarter 2010, the Corporation recorded a reduction in estimated insurance reserves, which reduced Bucktail-related expenses by $245,000.
|
|
Ø
|
Fees paid related to interchange and ATM processing increased $57,000, or 13.1%
|
|
·
|
Salaries and wages increased $270,000, or 8.4%. Officers’ incentive stock option compensation totaled $122,000 in the second quarter 2011, with no corresponding expense incurred in 2010. The second quarter 2011 estimated incentive bonus expense was $300,000, or $44,000 higher than the comparable 2010 amount. Excluding performance based stock and bonus compensation incentives, total salaries and wages were 3.0% higher in the second quarter 2011 as compared to the second quarter 2010.
|
|
·
|
Furniture and equipment expense decreased $89,000, or 16.4% in the second quarter 2011 as compared to 2010, with the decrease (as described in the six month analysis above) primarily associated with computer software and hardware-related depreciation and amortization.
|
|
·
|
FDIC Assessments decreased $226,000, or 54.5% in the second quarter 2011 as compared to the second quarter 2010. As described in the six month analysis above, the FDIC’s method of determining assessments has changed, resulting in an estimated lower assessment for the second quarter 2011.
|
|
·
|
Other operating expense increased $73,000, or 4.5%, in the second quarter as compared to the second quarter 2010. The most significant differences in individual types of expenses within this category between the second quarters of 2011 and 2010 are as follows:
|
|
Ø
|
Expenses associated with Bucktail Life Insurance Company, up $215,000. In the second quarter 2010, the Corporation recorded a reduction in estimated insurance reserves, which reduced Bucktail-related expenses by $245,000.
|
|
Ø
|
Software-related subscriptions, up $35,000, or 25.8%
|
|
Ø
|
Fees paid related to interchange and ATM processing increased $29,000, or 12.8%
|
|
Ø
|
Professional fees and other costs associated with public company requirements, down $58,000, or 53.1%
|
|
Ø
|
Postage expense, down $32,000, or 28.8%
|
|
Ø
|
Attorney fees, primarily associated with loan collection activities, down $31,000, or 46.2%
|
|
Ø
|
Office supplies, down $25,000, or 30.2%
|
|
Ø
|
Consulting fees associated with an overdraft privilege program, down $24,000, or 94.6%
|
|
·
|
In the second quarter 2011 charge-offs totaling $663,000 were recorded related to a commercial relationship for which specific allowances totaling $765,000 had been established at December 31, 2010. After the impact of these charge-offs and re-evaluation of the allowances required, the Corporation had loans outstanding totaling $925,000 with a specific allowance of $400,000 at June 30, 2011 related to this commercial borrower.
|
|
·
|
In the second quarter 2011, a charge-off of $46,000 was recorded for a commercial relationship for which specific allowances totaling $200,000 had been established at December 31, 2010. After the impact of the charge-off, there were no loans outstanding from this borrower, and a balance in foreclosed assets held for sale of $412,000 at June 30, 2011, based on the estimated fair value of real estate that had collateralized the loans.
|
|
·
|
In the first quarter 2011, the Corporation was paid off in full on a commercial loan relationship for which an allowance of $150,000 had been established at December 31, 2010.
|
Six Months Ended
|
||||||||||||||||||||||||||||
(In Thousands)
|
June 30,
|
June 30,
|
Years Ended December 31,
|
|||||||||||||||||||||||||
2011
|
2010
|
2010
|
2009
|
2008
|
2007
|
2006
|
||||||||||||||||||||||
Balance, beginning of year
|
$ | 9,107 | $ | 8,265 | $ | 8,265 | $ | 7,857 | $ | 8,859 | $ | 8,201 | $ | 8,361 | ||||||||||||||
Charge-offs:
|
||||||||||||||||||||||||||||
Consumer mortgage
|
(79 | ) | (127 | ) | (340 | ) | (146 | ) | (173 | ) | (149 | ) | (611 | ) | ||||||||||||||
Commercial
|
(734 | ) | (51 | ) | (91 | ) | (39 | ) | (1,607 | ) | (174 | ) | (200 | ) | ||||||||||||||
Consumer
|
(84 | ) | (92 | ) | (188 | ) | (293 | ) | (259 | ) | (221 | ) | (281 | ) | ||||||||||||||
Total charge-offs
|
(897 | ) | (270 | ) | (619 | ) | (478 | ) | (2,039 | ) | (544 | ) | (1,092 | ) | ||||||||||||||
Recoveries:
|
||||||||||||||||||||||||||||
Consumer mortgage
|
0 | 21 | 55 | 8 | 19 | 5 | 11 | |||||||||||||||||||||
Commercial
|
177 | 111 | 113 | 77 | 22 | 31 | 159 | |||||||||||||||||||||
Consumer
|
43 | 51 | 102 | 121 | 87 | 50 | 90 | |||||||||||||||||||||
Total recoveries
|
220 | 183 | 270 | 206 | 128 | 86 | 260 | |||||||||||||||||||||
Net charge-offs
|
(677 | ) | (87 | ) | (349 | ) | (272 | ) | (1,911 | ) | (458 | ) | (832 | ) | ||||||||||||||
Allowance for loan losses recorded in acquisition
|
0 | 0 | 0 | 0 | 0 | 587 | 0 | |||||||||||||||||||||
(Credit) provision for loan losses
|
(161 | ) | 283 | 1,191 | 680 | 909 | 529 | 672 | ||||||||||||||||||||
Balance, end of year
|
$ | 8,269 | $ | 8,461 | $ | 9,107 | $ | 8,265 | $ | 7,857 | $ | 8,859 | $ | 8,201 |
(In Thousands)
|
As of
|
|||||||||||||||||||||||
June 30,
|
As of December 31,
|
|||||||||||||||||||||||
2011
|
2010
|
2009
|
2008
|
2007
|
2006
|
|||||||||||||||||||
ASC 310 - Impaired loans
|
$ | 1,582 | $ | 2,288 | $ | 1,126 | $ | 456 | $ | 2,255 | $ | 1,726 | ||||||||||||
ASC 450 - Collective segments:
|
||||||||||||||||||||||||
Commercial
|
2,890 | 3,047 | 2,677 | 2,654 | 1,870 | 2,372 | ||||||||||||||||||
Consumer mortgage
|
3,150 | 3,227 | 3,859 | 3,920 | 4,201 | 3,556 | ||||||||||||||||||
Consumer
|
217 | 232 | 281 | 399 | 533 | 523 | ||||||||||||||||||
Unallocated
|
430 | 313 | 322 | 428 | 0 | 24 | ||||||||||||||||||
Total Allowance
|
$ | 8,269 | $ | 9,107 | $ | 8,265 | $ | 7,857 | $ | 8,859 | $ | 8,201 |
(In Thousands)
|
As of
|
|||||||||||||||||||||||
June 30
|
As of December 31,
|
|||||||||||||||||||||||
2011
|
2010
|
2009
|
2008
|
2007
|
2006
|
|||||||||||||||||||
Impaired loans with a valuation allowance
|
$ | 4,049 | $ | 5,457 | $ | 2,690 | $ | 2,230 | $ | 5,361 | $ | 5,337 | ||||||||||||
Impaired loans without a valuation allowance
|
2,125 | 3,191 | 3,257 | 3,435 | 857 | 2,674 | ||||||||||||||||||
Total impaired loans
|
$ | 6,174 | $ | 8,648 | $ | 5,947 | $ | 5,665 | $ | 6,218 | $ | 8,011 | ||||||||||||
Restructured loans (troubled debt restructurings)
|
$ | 4,303 | $ | 645 | $ | 326 | $ | 0 | $ | 0 | $ | 111 | ||||||||||||
Total loans past due 30-89 days and still accruing
|
$ | 6,611 | $ | 7,125 | $ | 9,445 | $ | 9,875 | $ | 10,822 | $ | 8,580 | ||||||||||||
Nonperforming assets:
|
||||||||||||||||||||||||
Total nonaccrual loans
|
$ | 7,586 | $ | 10,809 | $ | 9,092 | $ | 7,200 | $ | 6,955 | $ | 8,506 | ||||||||||||
Total loans past due 90 days or more and still accruing
|
561 | 727 | 31 | 1,305 | 1,200 | 1,559 | ||||||||||||||||||
Foreclosed assets held for sale (real estate)
|
1,665 | 537 | 873 | 298 | 258 | 264 | ||||||||||||||||||
Total nonperforming assets
|
$ | 9,812 | $ | 12,073 | $ | 9,996 | $ | 8,803 | $ | 8,413 | $ | 10,329 | ||||||||||||
Total nonperforming assets as a % of assets
|
0.75 | % | 0.92 | % | 0.76 | % | 0.69 | % | 0.66 | % | 0.78 | % |
Summary of Loans by Type
|
||||||||||||||||||||||||
(In Thousands)
|
June 30,
|
As of December 31,
|
||||||||||||||||||||||
2011
|
2010
|
2009
|
2008
|
2007
|
2006
|
|||||||||||||||||||
Consumer mortgage:
|
||||||||||||||||||||||||
Residential mortgage loans - first liens
|
$ | 334,300 | $ | 333,012 | $ | 340,268 | $ | 353,909 | $ | 363,467 | $ | 325,107 | ||||||||||||
Residential mortgage loans - junior liens
|
30,214 | 31,590 | 35,734 | 40,657 | 40,392 | 30,074 | ||||||||||||||||||
Home equity lines of credit
|
28,544 | 26,853 | 23,577 | 21,304 | 20,542 | 18,472 | ||||||||||||||||||
1-4 Family residential construction
|
8,574 | 14,379 | 11,452 | 11,262 | 4,742 | 0 | ||||||||||||||||||
Total consumer mortgage
|
401,632 | 405,834 | 411,031 | 427,132 | 429,143 | 373,653 | ||||||||||||||||||
Commercial:
|
||||||||||||||||||||||||
Commercial loans secured by real estate
|
157,282 | 167,094 | 163,483 | 165,979 | 144,742 | 178,260 | ||||||||||||||||||
Commercial and industrial
|
59,791 | 59,005 | 49,753 | 48,295 | 52,241 | 39,135 | ||||||||||||||||||
Political subdivisions
|
34,675 | 36,480 | 37,598 | 38,790 | 33,013 | 32,407 | ||||||||||||||||||
Commercial construction
|
24,726 | 24,004 | 15,264 | 13,730 | 17,755 | 10,365 | ||||||||||||||||||
Loans secured by farmland
|
10,927 | 11,353 | 11,856 | 9,140 | 8,287 | 6,968 | ||||||||||||||||||
Multi-family (5 or more) residential
|
7,514 | 7,781 | 8,338 | 8,367 | 9,004 | 6,790 | ||||||||||||||||||
Agricultural loans
|
3,182 | 3,472 | 3,848 | 4,495 | 3,553 | 2,705 | ||||||||||||||||||
Other commercial loans
|
576 | 392 | 638 | 884 | 1,010 | 1,226 | ||||||||||||||||||
Total commercial
|
298,673 | 309,581 | 290,778 | 289,680 | 269,605 | 277,856 | ||||||||||||||||||
Consumer
|
13,631 | 14,996 | 19,202 | 26,732 | 37,193 | 35,992 | ||||||||||||||||||
Total
|
713,936 | 730,411 | 721,011 | 743,544 | 735,941 | 687,501 | ||||||||||||||||||
Less: allowance for loan losses
|
(8,269 | ) | (9,107 | ) | (8,265 | ) | (7,857 | ) | (8,859 | ) | (8,201 | ) | ||||||||||||
Loans, net
|
$ | 705,667 | $ | 721,304 | $ | 712,746 | $ | 735,687 | $ | 727,082 | $ | 679,300 |
Outstanding
|
Available
|
Total Credit
|
||||||||||||||||||||||
(In Thousands)
|
June 30,
|
Dec. 31,
|
June 30,
|
Dec. 31,
|
June 30,
|
Dec. 31,
|
||||||||||||||||||
2011
|
2010
|
2011
|
2010
|
2011
|
2010
|
|||||||||||||||||||
Federal Home Loan Bank of Pittsburgh
|
$ | 40,682 | $ | 55,995 | $ | 289,800 | $ | 304,584 | $ | 330,482 | $ | 360,579 | ||||||||||||
Federal Reserve Bank Discount Window
|
0 | 0 | 26,334 | 26,274 | 26,334 | 26,274 | ||||||||||||||||||
Other correspondent banks
|
0 | 0 | 25,000 | 25,000 | 25,000 | 25,000 | ||||||||||||||||||
Total credit facilities
|
$ | 40,682 | $ | 55,995 | $ | 341,134 | $ | 355,858 | $ | 381,816 | $ | 411,853 |
Minimum To Be Well
|
||||||||||||||||||||||||
(Dollars in Thousands)
|
Minimum
|
Capitalized Under
|
||||||||||||||||||||||
Capital
|
Prompt Corrective
|
|||||||||||||||||||||||
Actual
|
Requirement
|
Action Provisions
|
||||||||||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||||||||||||
June 30, 2011:
|
||||||||||||||||||||||||
Total capital to risk-weighted assets:
|
||||||||||||||||||||||||
Consolidated
|
$ | 140,538 | 19.40 | % | $ | 57,961 | ³8 | % | n/a | n/a | ||||||||||||||
C&N Bank
|
129,564 | 18.06 | % | 57,408 | ³8 | % | $ | 71,760 | ³10 | % | ||||||||||||||
Tier 1 capital to risk-weighted assets:
|
||||||||||||||||||||||||
Consolidated
|
131,492 | 18.15 | % | 28,981 | ³4 | % | n/a | n/a | ||||||||||||||||
C&N Bank
|
121,259 | 16.90 | % | 28,704 | ³4 | % | 43,056 | ³6 | % | |||||||||||||||
Tier 1 capital to average assets:
|
||||||||||||||||||||||||
Consolidated
|
131,492 | 10.14 | % | 51,849 | ³4 | % | n/a | n/a | ||||||||||||||||
C&N Bank
|
121,259 | 9.43 | % | 51,435 | ³4 | % | 64,294 | ³5 | % | |||||||||||||||
December 31, 2010:
|
||||||||||||||||||||||||
Total capital to risk-weighted assets:
|
||||||||||||||||||||||||
Consolidated
|
$ | 128,527 | 17.17 | % | $ | 59,874 | ³8 | % | n/a | n/a | ||||||||||||||
C&N Bank
|
117,576 | 15.85 | % | 59,342 | ³8 | % | $ | 74,177 | ³10 | % | ||||||||||||||
Tier 1 capital to risk-weighted assets:
|
||||||||||||||||||||||||
Consolidated
|
118,781 | 15.87 | % | 29,937 | ³4 | % | n/a | n/a | ||||||||||||||||
C&N Bank
|
108,445 | 14.62 | % | 29,671 | ³4 | % | 44,506 | ³6 | % | |||||||||||||||
Tier 1 capital to average assets:
|
||||||||||||||||||||||||
Consolidated
|
118,781 | 9.20 | % | 51,664 | ³4 | % | n/a | n/a | ||||||||||||||||
C&N Bank
|
108,445 | 8.50 | % | 51,063 | ³4 | % | 63,828 | ³5 | % |
|
·
|
At June 30, 2011, the Corporation had a deferred tax liability of $2,730,000 associated with net unrealized gains on available-for-sale securities. In comparison, at December 31, 2010, there was a deferred tax asset of $695,000 associated with net unrealized losses on available-for-sale securities. Changes in unrealized gains and losses on available-for-sale securities, net of deferred income tax, are excluded from the determination of earnings but are included in Comprehensive Income.
|
|
·
|
The net deferred tax asset balance at June 30, 2011 attributable to realized securities losses was $3,416,000, significantly lower than the balance at December 31, 2010 of $5,755,000. As described in Note 5 to the consolidated financial statements, in the first quarter 2011, the Corporation sold a pooled trust-preferred security that had been written off in 2009 and 2010 for financial statement purposes, resulting in a book gain of $1,485,000. The loss for income tax purposes from this transaction is $5,295,000, with the large book/ tax difference representing the main reason for the reduction in the deferred tax asset.
|
|
·
|
The Corporation has available an estimated $2,612,000 of total unused operating loss carryforwards at June 30, 2011, including a capital loss carryforward of $369,000 expiring in 2015, and an estimated ordinary loss carryforward of $2,243,000 almost all of which expires in 2030. The amount of deferred tax asset from unused loss carryforwards at June 30, 2011 of $888,000 is down from $2,794,000 at December 31, 2010, primarily as a result of estimated taxable income generated in the first six months of 2011.
|
|
·
|
At June 30, 2011, the deferred tax asset based on the credit for alternative minimum tax (AMT) paid was $4,814,000, up from $3,287,000 at December 31, 2010. The increase in 2011 reflects estimated AMT payable for the first six months of 2011. Although the Corporation has an unused operating loss carryforward for purposes of determining regular federal taxable income, the cumulative effect of items treated differently for AMT purposes (including, most significantly, tax exempt interest income) has eliminated any AMT loss carryforward from 2010 and is expected to trigger payment of AMT for 2011. Realization of the deferred tax asset for AMT depends on generation of sufficient ordinary taxable income in excess of AMT income in future years, though there is no expiration of the credit for AMT paid under current tax law.
|
May 31, 2011 Data
|
||||||||||||||||||||||
(In Thousands)
|
Period Ending May 31, 2012
|
|||||||||||||||||||||
Interest
|
Interest
|
Net Interest
|
NII
|
NII
|
||||||||||||||||||
Basis Point Change in Rates
|
Income
|
Expense
|
Income (NII)
|
% Change
|
Risk Limit
|
|||||||||||||||||
+300 | $ | 65,083 | $ | 26,978 | $ | 38,105 | -14.9 | % | 20.0 | % | ||||||||||||
+200 | 62,527 | 22,166 | 40,361 | -9.8 | % | 15.0 | % | |||||||||||||||
+100 | 59,945 | 17,354 | 42,591 | -4.8 | % | 10.0 | % | |||||||||||||||
0 | 57,299 | 12,541 | 44,758 | 0.0 | % | 0.0 | % | |||||||||||||||
-100 | 53,826 | 10,612 | 43,214 | -3.4 | % | 10.0 | % | |||||||||||||||
-200 | 51,763 | 10,200 | 41,563 | -7.1 | % | 15.0 | % | |||||||||||||||
-300 | 51,205 | 10,197 | 41,008 | -8.4 | % | 20.0 | % | |||||||||||||||
Market Value of Portfolio Equity
|
||||||||||||||||||||||
At May 31, 2011
|
||||||||||||||||||||||
Present
|
Present
|
Present
|
||||||||||||||||||||
Value
|
Value
|
Value
|
||||||||||||||||||||
Basis Point Change in Rates
|
Equity
|
% Change
|
Risk Limit
|
|||||||||||||||||||
+300 | $ | 146,234 | -21.7 | % | 45.0 | % | ||||||||||||||||
+200 | 161,090 | -13.7 | % | 35.0 | % | |||||||||||||||||
+100 | 173,999 | -6.8 | % | 25.0 | % | |||||||||||||||||
0 | 186,742 | 0.0 | % | 0.0 | % | |||||||||||||||||
-100 | 185,656 | -0.6 | % | 25.0 | % | |||||||||||||||||
-200 | 193,079 | 3.4 | % | 35.0 | % | |||||||||||||||||
-300 | 212,783 | 13.9 | % | 45.0 | % | |||||||||||||||||
October 31, 2010 Data
|
||||||||||||||||||||||
(In Thousands)
|
Period Ending October 31, 2011
|
|||||||||||||||||||||
Interest
|
Interest
|
Net Interest
|
NII
|
NII
|
||||||||||||||||||
Basis Point Change in Rates
|
Income
|
Expense
|
Income (NII)
|
% Change
|
Risk Limit
|
|||||||||||||||||
+300 | $ | 66,098 | $ | 27,402 | $ | 38,696 | -9.3 | % | 20.0 | % | ||||||||||||
+200 | 63,465 | 23,146 | 40,319 | -5.5 | % | 15.0 | % | |||||||||||||||
+100 | 60,661 | 18,891 | 41,770 | -2.1 | % | 10.0 | % | |||||||||||||||
0 | 57,307 | 14,638 | 42,669 | 0.0 | % | 0.0 | % | |||||||||||||||
-100 | 54,005 | 13,794 | 40,211 | -5.8 | % | 10.0 | % | |||||||||||||||
-200 | 51,995 | 13,732 | 38,263 | -10.3 | % | 15.0 | % | |||||||||||||||
-300 | 51,507 | 13,732 | 37,775 | -11.5 | % | 20.0 | % | |||||||||||||||
Market Value of Portfolio Equity
|
||||||||||||||||||||||
at October 31, 2010
|
||||||||||||||||||||||
Present
|
Present
|
Present
|
||||||||||||||||||||
Value
|
Value
|
Value
|
||||||||||||||||||||
Basis Point Change in Rates
|
Equity
|
% Change
|
Risk Limit
|
|||||||||||||||||||
+300 | $ | 90,782 | -28.4 | % | 45.0 | % | ||||||||||||||||
+200 | 104,337 | -17.7 | % | 35.0 | % | |||||||||||||||||
+100 | 116,495 | -8.1 | % | 25.0 | % | |||||||||||||||||
0 | 126,789 | 0.0 | % | 0.0 | % | |||||||||||||||||
-100 | 135,342 | 6.7 | % | 25.0 | % | |||||||||||||||||
-200 | 162,919 | 28.5 | % | 35.0 | % | |||||||||||||||||
-300 | 194,064 | 53.1 | % | 45.0 | % |
TABLE XII - EQUITY SECURITIES RISK
|
||||||||
(In Thousands)
|
||||||||
June 30,
|
Dec. 31,
|
|||||||
2011
|
2010
|
|||||||
Cost
|
$ | 4,883 | $ | 4,589 | ||||
Fair Value
|
6,611 | 6,009 | ||||||
Hypothetical 10% Decline In Market Value
|
(661 | ) | (601 | ) | ||||
Hypothetical 20% Decline In Market Value
|
(1,322 | ) | (1,202 | ) |
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Period
|
Total Number
of Shares
Purchased
|
Average Price
Paid per Share
|
Total Number of
Shares
Purchased as
Part of Publicly
Announced
Plans or
Programs
|
Maximum Dollar
Value of Shares
that May Yet be
Purchased
Under the Plans
or Programs
|
||||||||||||
May 1 - 31, 2011
|
16,000 | $ | 14.48 | 16,000 | $ | 768,320 | ||||||||||
June 1 - 30, 2011
|
24,302 | $ | 13.98 | 40,302 | $ | 428,548 |
Item 3.
|
Defaults Upon Senior Securities
|
Item 4.
|
Removed and Reserved
|
Item 5.
|
Other Information
|
Not applicable
|
||
3. (i) Articles of Incorporation
|
Incorporated by reference to Exhibit 3.1 of the Corporation's Form 8-K filed September 21, 2009
|
|
3. (ii) By-laws
|
Incorporated by reference to Exhibit 3.2 of the Corporation's Form 8-K filed September 21, 2009
|
|
4. Instruments defining the rights of security holders, including indentures
|
Not applicable
|
|
11. Statement re: computation of per share earnings
|
Information concerning the computation of earnings per share is provided in Note 2 to the Consolidated Financial Statements, which is included in Part I, Item 1 of Form 10-Q
|
|
15. Letter re: unaudited interim financial information
|
Not applicable
|
|
18. Letter re: change in accounting principles
|
Not applicable
|
|
19. Report furnished to security holders
|
Not applicable
|
|
22. Published report regarding matters submitted to vote of security holders
|
Not applicable
|
|
23. Consents of experts and counsel
|
Not applicable
|
|
24. Power of attorney
|
Not applicable
|
|
31. Rule 13a-14(a)/15d-14(a) certifications:
|
||
31.1 Certification of Chief Executive Officer
|
Filed herewith
|
|
31.2 Certification of Chief Financial Officer
|
Filed herewith
|
|
32. Section 1350 certifications
|
Provided herewith
|
|
99. Additional exhibits
|
Not applicable
|
|
100. XBRL-related documents
|
Not applicable
|
|
101. Interactive Data File
|
Furnished herewith*
|
|
CITIZENS & NORTHERN CORPORATION
|
|
August 8, 2011
|
By: /s/ Charles H. Updegraff, Jr.
|
|
Date
|
President and Chief Executive Officer
|
|
August 8, 2011
|
By: /s/ Mark A. Hughes
|
|
Date
|
Treasurer and Chief Financial Officer
|