Washington
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91-1815009
|
|
(State
or Other Jurisdiction of
|
(IRS
Employer Identification No.)
|
|
Incorporation
or Organization)
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Large
accelerated filer ¨
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Accelerated
filer ¨
|
|
Non-accelerated
filer ¨
|
Smaller
reporting company x
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Page
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||||
PART
I
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||||
Forward
Looking Information
|
3 | |||
Item
1.
|
Business
|
4 | ||
Item
1A.
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Risk
Factors
|
11 | ||
Item
1B.
|
Unresolved
Staff Comments
|
17 | ||
Item
2.
|
Properties
|
18 | ||
Item
3.
|
Legal
Proceedings
|
18 | ||
Item
4.
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[Reserved]
|
18 | ||
PART
II
|
||||
Item
5.
|
Market
for Registrant's Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
|
19 | ||
Item
6.
|
Selected
Financial Data
|
20 | ||
Item
7.
|
Management's
Discussion and Analysis of Financial Condition and Results of
Operations
|
21 | ||
Item
8.
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Financial
Statements and Supplementary Data
|
47 | ||
Item
9.
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Changes
in and Disagreements with Accountants on Accounting and Financial
Disclosure
|
47 | ||
Item
9A.
|
Controls
and Procedures
|
47 | ||
Item
9B.
|
Other
Information
|
49 | ||
PART
III
|
||||
Item
10.
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Directors,
Executive Officers and Corporate Governance
|
49 | ||
Item
11.
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Executive
Compensation
|
50 | ||
Item
12.
|
Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
|
50 | ||
Item
13.
|
Certain
Relationships and Related Transactions and Director
Independence
|
50 | ||
Item
14.
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Principal
Accountant Fees and Services
|
50 | ||
PART
IV
|
||||
Item
15.
|
Exhibits
and Financial Statement Schedules
|
51 | ||
FINANCIAL
STATEMENTS
|
F-1 – F-35 | |||
SIGNATURES
|
52 |
|
·
|
Total
reported loans for construction, land development and other land
representing 100% or more of the bank's capital;
or
|
|
·
|
Total
commercial real estate loans representing 300% or more of the bank's total
capital.
|
·
|
An
increase in loan delinquencies, problem assets and
foreclosures;
|
·
|
A
decrease in the demand for loans and other products and
services;
|
·
|
An
increase or decrease in the usage of unfunded commitments;
or
|
·
|
A
decrease in the value of loan collateral, especially real estate, which in
turn may reduce a customer's borrowing power and significantly increase
our exposure to particular loans.
|
2009
|
2008
|
|||||||||||||||||||||||
Estimated
No.
|
Estimated
No.
|
|||||||||||||||||||||||
Shares
Traded
|
High
|
Low
|
Shares
Traded
|
High
|
Low
|
|||||||||||||||||||
First
Quarter
|
79,500 | $ | 7.50 | $ | 5.50 | 78,700 | $ | 14.72 | $ | 10.50 | ||||||||||||||
Second
Quarter
|
79,500 | $ | 6.25 | $ | 4.50 | 42,600 | $ | 14.50 | $ | 11.10 | ||||||||||||||
Third
Quarter
|
30,100 | $ | 5.60 | $ | 4.10 | 55,600 | $ | 12.70 | $ | 8.50 | ||||||||||||||
Fourth
Quarter
|
114,400 | $ | 4.80 | $ | 3.65 | 71,700 | $ | 10.00 | $ | 5.75 |
As
of and For the Year ended December 31,
|
||||||||||||||||||||
2009
|
2008
|
2007
|
2006
|
2005
|
||||||||||||||||
Operations
Data
|
||||||||||||||||||||
Net
interest income
|
$ | 21,753 | $ | 21,715 | $ | 24,503 | $ | 23,867 | $ | 22,284 | ||||||||||
Provision
for credit losses
|
9,944 | 4,791 | 482 | 625 | 1,100 | |||||||||||||||
Non-interest
income
|
7,025 | 5,057 | 4,475 | 4,176 | 4,081 | |||||||||||||||
Non-interest
expense
|
29,691 | 21,591 | 20,379 | 18,118 | 16,566 | |||||||||||||||
Provision
(benefit) for income taxes
|
(4,519 | ) | (561 | ) | 2,086 | 2,749 | 2,653 | |||||||||||||
Net
income (loss)
|
(6,338 | ) | 951 | 6,031 | 6,551 | 6,046 | ||||||||||||||
Net
income (loss) per share:
|
||||||||||||||||||||
Basic
(1)
|
(.74 | ) | .13 | .83 | .92 | .86 | ||||||||||||||
Diluted
(1)
|
(.74 | ) | .13 | .82 | .90 | .84 | ||||||||||||||
Dividends
declared
|
— | 333 | 4,955 | 4,893 | 4,719 | |||||||||||||||
Dividends
declared per share (1)
|
— | .05 | .75 | .75 | .73 | |||||||||||||||
Dividends
paid ratio
|
— | % | 35 | % | 82 | % | 75 | % | 78 | % | ||||||||||
Performance
Ratios
|
||||||||||||||||||||
Interest
rate spread
|
3.76 | % | 4.23 | % | 4.92 | % | 5.13 | % | 5.34 | % | ||||||||||
Net
interest margin (2)
|
3.62 | % | 4.12 | % | 4.82 | % | 5.04 | % | 5.25 | % | ||||||||||
Efficiency
ratio (3)
|
103.17 | % | 80.65 | % | 70.33 | % | 64.61 | % | 62.83 | % | ||||||||||
Return
on average assets
|
(.96 | )% | .16 | % | 1.08 | % | 1.26 | % | 1.31 | % | ||||||||||
Return
on average equity
|
(11.63 | )% | 1.83 | % | 11.46 | % | 13.16 | % | 12.70 | % | ||||||||||
Balance
Sheet Data
|
||||||||||||||||||||
Total
assets
|
$ | 668,626 | $ | 625,835 | $ | 565,587 | $ | 562,384 | $ | 489,409 | ||||||||||
Loans,
net
|
471,154 | 478,695 | 433,904 | 420,768 | 393,574 | |||||||||||||||
Total
deposits
|
567,695 | 511,307 | 467,336 | 466,841 | 399,726 | |||||||||||||||
Other
borrowings
|
39,880 | 60,757 | 37,446 | 36,809 | 35,790 | |||||||||||||||
Shareholders'
equity
|
57,649 | 50,074 | 50,699 | 48,984 | 46,600 | |||||||||||||||
Book
value per share (1) (4)
|
5.70 | 6.84 | 6.97 | 6.83 | 6.55 | |||||||||||||||
Equity
to assets ratio
|
8.62 | % | 8.00 | % | 8.96 | % | 8.71 | % | 9.52 | % | ||||||||||
Asset
Quality Ratios
|
||||||||||||||||||||
Nonperforming
loans to total loans
|
3.36 | % | 3.49 | % | 1.46 | % | 1.82 | % | 1.69 | % | ||||||||||
Allowance
for credit losses
|
||||||||||||||||||||
to
total loans
|
2.30 | % | 1.57 | % | 1.14 | % | .95 | % | 1.33 | % | ||||||||||
Allowance
for credit losses
|
||||||||||||||||||||
to
nonperforming loans
|
68.49 | % | 44.97 | % | 78.10 | % | 52.30 | % | 78.67 | % | ||||||||||
Nonperforming
assets to total assets
|
3.42 | % | 3.80 | % | 1.13 | % | 1.37 | % | 1.38 | % |
|
·
|
Total
assets at December 31, 2009 increased by $42,791,000, or 6.8%, to
$668,626,000 compared to $625,835,000 at the end of 2008. Growth in
interest bearing deposits in banks, federal funds sold and investments
available-for-sale were the primary contributors to overall asset
growth.
|
|
·
|
The
Bank remains well capitalized with a total risk-based capital ratio of
13.07% at December 31, 2009, compared to 11.65% at December 31, 2008.
During 2009, the Company raised capital by issuing common shares and
warrants in connection with a private offering, with proceeds to the
Company of $12,356,000, further strengthening its capital ratios. See
Footnote 20 to the condensed consolidated financial statements included in
Item 15 of this report for further
information.
|
|
·
|
Non-performing
assets decreased slightly during 2009 by $901,000, or 3.8%, to $22,859,000
at December 31, 2009. The decrease was primarily in the non-performing
construction and land development sector which accounts for $13,674,000,
or 59.8%, of nonperforming assets at December 31, 2009 compared to
$17,230,000, or 72.5%, at December 31,
2008.
|
·
|
The Company reduced
overall exposure to construction, land acquisition and other land loans
which declined $35,913,000, or 35.7%, during 2009. This segment of the
portfolio, totaling $64,812,000 at December 31, 2009, accounts for
approximately 13.1% of the total loan
portfolio.
|
·
|
Total
deposits increased $56,388,000, or 11.0%, compared to the prior year. This
increase is mostly attributable to increases during 2009 in retail
deposits and brokered certificates of deposits of $30,757,000 and
$25,631,000, respectively. The increase in brokered certificates of
deposits was to replace maturing public funds that became less desirable
due to stricter pledging
requirements.
|
|
·
|
Total
borrowings decreased $20,877,000, or 34.4%, compared to the prior year.
Due to increases in deposit balances and reductions in loan balances, the
Company was able to payoff short-term borrowings at December 31, 2008 of
$23,500,000 with the Federal Home Loan Bank of Seattle (the
FHLB).
|
|
·
|
As
a result of deposit growth, lower borrowings and increased borrowing
capacity with the Federal Reserve, the Company's liquidity ratio of
approximately 38% at December 31, 2009 translates into over $253 million
in available funding for general operations and to meet loan and deposit
needs.
|
|
·
|
Net
interest income was flat at $21,753,000 compared to $21,715,000 in 2008
due to increases in non-accrual loans and lower overall market interest
rates. Net interest margin for 2009 declined 50 basis points to
3.62% compared to 4.12% in 2008.
|
|
·
|
The
provision for credit losses increased $5,153,000, or 107.6%, to $9,944,000
for 2009. The significant increase is the result of increases
in net charge-offs, impaired loans, performing loans classified as
substandard under the Bank's loan grading system, and loan loss rates, as
well as uncertainties in real estate values in the Pacific
Northwest. Net charge-offs totaled $6,475,000 during 2009
compared to $2,175,000 in 2008. The increases in problem assets
remain concentrated primarily in the land acquisition and development and
residential construction loan
portfolios.
|
|
·
|
Non-interest
income increased $1,968,000, or 38.9%, to $7,025,000 for 2009 due to
increased gain on sales of loans, service charges on deposit accounts and
gain on sale of investment securities, which were partially offset by a
loss on sale of OREO.
|
|
·
|
Non-interest
expense increased $8,100,000, or 37.5%, to $29,691,000 for
2009. The increase is primarily attributable to increases in
FDIC assessments, OREO write-downs and OREO related operating expenses and
commissions paid on loans sold in the secondary
market.
|
|
·
|
In
2009, return on average assets and return on average equity decreased to
(0.96)% and (11.63)%, respectively, compared to 0.16% and 1.83% in 2008 as
a result of the net interest margin compression, increase in provision for
credit losses and OREO write-downs, which are reflective of the
deterioration in credit quality.
|
|
·
|
Improve
asset quality by proactively managing problem assets, selectively reducing
loan concentrations, selling OREO and managing credit
exposures;
|
|
·
|
Maintain
capital ratios by controlling the asset growth rate, producing positive
returns to shareholders and utilizing government guarantees in
connection with new loan
originations;
|
|
·
|
Improve
net interest margin by reinvesting short-term cash and cash equivalents
into higher yielding assets, reducing loans on non-accrual status and
growing low cost deposits;
|
|
·
|
Maintain
a strong liquidity position through increased core deposit balances and
maintaining existing borrowing facilities available through the FHLB and
the Federal Reserve Bank;
|
|
·
|
Reduce
controllable operating expenses through fiscal restraint and increased
emphasis on non-interest income;
and
|
|
·
|
Grow
core areas of the balance sheet including commercial real estate and
commercial loans and retail deposits through the quality and breadth of
our branch network, superior sales practices, competitive rates, and an
emphasis on customer and employee satisfaction, which would enable us to
exploit local market
opportunities.
|
(dollars in thousands)
|
2009
|
Increase
(Decrease)
Amount
|
%
|
2008
|
Increase
(Decrease)
Amount
|
%
|
2007
|
|||||||||||||||||||||
Interest
income
|
$ | 32,820 | $ | (893 | ) | (2.7 | ) | $ | 33,713 | $ | (6,423 | ) | (16.0 | ) | $ | 40,136 | ||||||||||||
Interest
expense
|
11,067 | (931 | ) | (7.8 | ) | 11,998 | (3,635 | ) | (23.3 | ) | 15,633 | |||||||||||||||||
Net
interest income
|
21,753 | 38 | 0.2 | 21,715 | (2,788 | ) | (11.4 | ) | 24,503 | |||||||||||||||||||
Provision
for credit losses
|
9,944 | 5,153 | 107.6 | 4,791 | 4,309 | 894.0 | 482 | |||||||||||||||||||||
Net
interest income after provision for credit losses
|
11,809 | (5,115 | ) | (30.2 | ) | 16,924 | (7,097 | ) | (29.5 | ) | 24,021 | |||||||||||||||||
Other
operating income
|
7,025 | 1,968 | 38.9 | 5,057 | 582 | 13.0 | 4,475 | |||||||||||||||||||||
Other
operating expense
|
29,691 | 8,100 | 37.5 | 21,591 | 1,212 | 5.9 | 20,379 | |||||||||||||||||||||
Income
(loss) before income
taxes
|
(10,857 | ) | (11,247 | ) | (2,883.8 | ) | 390 | (7,727 | ) | (95.2 | ) | 8,117 | ||||||||||||||||
Income
taxes (benefit)
|
(4,519 | ) | (3,958 | ) | 705.5 | (561 | ) | (2,647 | ) | (126.9 | ) | 2,086 | ||||||||||||||||
Net
income (loss)
|
$ | (6,338 | ) | $ | (7,289 | ) | (766.5 | ) | $ | 951 | $ | (5,080 | ) | (84.2 | ) | $ | 6,031 |
Year Ended December 31,
|
||||||||||||||||||||||||||||||||||||
2009
|
2008
|
2007
|
||||||||||||||||||||||||||||||||||
Interest
|
Interest
|
Interest
|
||||||||||||||||||||||||||||||||||
(dollars
in thousands)
|
Average
|
Income
|
Avg
|
Average
|
Income
|
Avg
|
Average
|
Income
|
Avg
|
|||||||||||||||||||||||||||
Balance
|
(Expense)
|
Rate
|
Balance
|
(Expense)
|
Rate
|
Balance
|
(Expense)
|
Rate
|
||||||||||||||||||||||||||||
Assets
|
||||||||||||||||||||||||||||||||||||
Earning
assets:
|
||||||||||||||||||||||||||||||||||||
Loans
(1)
|
$ | 500,796 | $ | 30,065 | 6.00 | % | $ | 471,338 | $ | 31,385 | 6.66 | % | $ | 453,940 | $ | 37,823 | 8.33 | % | ||||||||||||||||||
Investment
securities:
|
||||||||||||||||||||||||||||||||||||
Taxable
|
35,085 | 1,868 | 5.32 | 31,090 | 1,648 | 5.30 | 26,522 | 1,336 | 5.04 | |||||||||||||||||||||||||||
Tax-Exempt
(1)
|
25,033 | 1,580 | 6.31 | 19,440 | 1,193 | 6.14 | 17,514 | 1,074 | 6.13 | |||||||||||||||||||||||||||
Total
investment securities
|
60,118 | 3,448 | 5.74 | 50,530 | 2,841 | 5.62 | 44,036 | 2,410 | 5.47 | |||||||||||||||||||||||||||
Federal
Home Loan Bank Stock
|
3,135 | — | — | 2,022 | 19 | 0.94 | 1,858 | 7 | .0.38 | |||||||||||||||||||||||||||
Federal
funds sold and deposits in banks
|
36,610 | 109 | 0.30 | 3,787 | 44 | 1.16 | 8,499 | 426 | 5.01 | |||||||||||||||||||||||||||
Total
earnings assets / interest income
|
$ | 600,659 | $ | 33,622 | 5.60 | % | $ | 527,677 | $ | 34,289 | 6.50 | % | $ | 508,333 | $ | 40,666 | 8.00 | % | ||||||||||||||||||
Cash
and due from banks
|
10,470 | 11,454 | 12,236 | |||||||||||||||||||||||||||||||||
Premises
and equipment (net)
|
16,402 | 16,522 | 13,249 | |||||||||||||||||||||||||||||||||
Other
real estate owned
|
9,327 | 1,587 | — | |||||||||||||||||||||||||||||||||
Other
assets
|
34,886 | 33,361 | 30,013 | |||||||||||||||||||||||||||||||||
Allowance
for credit losses
|
(9,621 | ) | (5,875 | ) | (4,618 | ) | ||||||||||||||||||||||||||||||
Total
assets
|
$ | 662,123 | $ | 584,726 | $ | 559,213 | ||||||||||||||||||||||||||||||
Liabilities
and Shareholders' Equity
|
||||||||||||||||||||||||||||||||||||
Interest
bearing liabilities:
|
||||||||||||||||||||||||||||||||||||
Deposits:
|
||||||||||||||||||||||||||||||||||||
Savings
and interest-bearing demand
|
$ | 210,004 | $ | (1,803 | ) | 0.86 | % | $ | 204,539 | $ | (2,903 | ) | 1.42 | % | $ | 194,356 | $ | (4,947 | ) | 2.55 | % | |||||||||||||||
Time
certificates
|
266,929 | (7,461 | ) | 2.80 | 186,319 | (6,891 | ) | 3.70 | 177,362 | (8,513 | ) | 4.80 | ||||||||||||||||||||||||
Total
deposits
|
476,933 | (9,264 | ) | 1.94 | 390,858 | (9,794 | ) | 2.51 | 371,718 | (13,460 | ) | 3.62 | ||||||||||||||||||||||||
Short-term
borrowings
|
3,107 | (26 | ) | 0.84 | 13,398 | (349 | ) | 2.61 | 5,961 | (329 | ) | 5.52 | ||||||||||||||||||||||||
Long-term
borrowings
|
31,660 | (1,164 | ) | 3.68 | 26,336 | (991 | ) | 3.76 | 21,286 | (820 | ) | 3.85 | ||||||||||||||||||||||||
Secured
borrowings
|
1,326 | (75 | ) | 5.66 | 1,387 | (94 | ) | 6.78 | 1,517 | (110 | ) | 7.25 | ||||||||||||||||||||||||
Junior
subordinated debentures
|
13,403 | (538 | ) | 4.01 | 13,403 | (770 | ) | 5.74 | 13,403 | (914 | ) | 6.82 | ||||||||||||||||||||||||
Total
borrowings
|
49,496 | (1,803 | ) | 3.64 | 54,524 | (2,204 | ) | 4.04 | 42,167 | (2,173 | ) | 5.15 | ||||||||||||||||||||||||
Total
interest-bearing liabilities/Interest
expense
|
$ | 526,429 | $ | (11,067 | ) | 2.10 | % | $ | 445,382 | $ | (11,998 | ) | 2.69 | % | $ | 413,885 | $ | (15,633 | ) | 3.78 | % | |||||||||||||||
Demand
deposits
|
77,282 | 82,620 | 87,467 | |||||||||||||||||||||||||||||||||
Other
liabilities
|
3,900 | 4,750 | 5,227 | |||||||||||||||||||||||||||||||||
Shareholders'
equity
|
54,512 | 51,974 | 52,634 | |||||||||||||||||||||||||||||||||
Total
liabilities and shareholders' equity
|
$ | 662,123 | $ | 584,726 | $ | 559,213 | ||||||||||||||||||||||||||||||
Net
interest income (1)
|
$ | 22,555 | $ | 22,291 | $ | 25,033 | ||||||||||||||||||||||||||||||
Net
interest income as a percentage of average earning
assets
|
||||||||||||||||||||||||||||||||||||
Interest
income
|
5.60 | % | 6.50 | % | 8.00 | % | ||||||||||||||||||||||||||||||
Interest
expense
|
1.84 | % | 2.27 | % | 3.08 | % | ||||||||||||||||||||||||||||||
Net
interest income
|
3.76 | % | 4.23 | % | 4.92 | % | ||||||||||||||||||||||||||||||
Net
interest margin (2)
|
3.62 | % | 4.12 | % | 4.82 | % | ||||||||||||||||||||||||||||||
Tax
equivalent adjustment (1)
|
$ | 802 | $ | 576 | $ | 530 |
2009 compared to 2008
|
2008 compared to 2007
|
|||||||||||||||||||||||
Increase (decrease) due to
|
Increase (decrease) due to
|
|||||||||||||||||||||||
(dollars in thousands)
|
Volume
|
Rate
|
Net
|
Volume
|
Rate
|
Net
|
||||||||||||||||||
Interest
earned on:
|
||||||||||||||||||||||||
Loans
|
$ | 2,170 | $ | (3,490 | ) | $ | (1,320 | ) | $ | 1,403 | $ | (7,841 | ) | $ | (6,438 | ) | ||||||||
Securities:
|
||||||||||||||||||||||||
Taxable
|
212 | 8 | 220 | 239 | 73 | 312 | ||||||||||||||||||
Tax-exempt
|
352 | 35 | 387 | 118 | 1 | 119 | ||||||||||||||||||
Total
securities
|
564 | 43 | 607 | 357 | 74 | 431 | ||||||||||||||||||
Federal
Home Loan Bank stock
|
7 | (26 | ) | (19 | ) | 1 | 11 | 12 | ||||||||||||||||
Fed
funds sold and interest bearing deposits in other banks
|
120 | (55 | ) | 65 | (160 | ) | (222 | ) | (382 | ) | ||||||||||||||
Total
interest earning assets
|
2,861 | (3,528 | ) | (667 | ) | 1,601 | (7,978 | ) | (6,377 | ) | ||||||||||||||
Interest
paid on:
|
||||||||||||||||||||||||
Savings
and interest bearing demand deposits
|
(76 | ) | 1,176 | 1,100 | (247 | ) | 2,291 | 2,044 | ||||||||||||||||
Time
deposits
|
(2,516 | ) | 1,946 | (570 | ) | (412 | ) | 2,034 | 1,622 | |||||||||||||||
Total
borrowings
|
194 | 207 | 401 | (558 | ) | 527 | (31 | ) | ||||||||||||||||
Total
interest bearing liabilities
|
(2,398 | ) | 3,329 | 931 | (1,217 | ) | 4,852 | 3,635 | ||||||||||||||||
Change
in net interest income
|
$ | 463 | $ | (199 | ) | $ | 264 | $ | 384 | $ | (3,126 | ) | $ | (2,742 | ) |
(dollars in thousands)
|
2009
|
Increase
(Decrease)
Amount
|
%
|
2008
|
Increase
(Decrease)
Amount
|
%
|
2007
|
|||||||||||||||||||||
Service
charges on deposit accounts
|
$ | 1,649 | $ | 72 | 4.6 | $ | 1,577 | $ | 83 | 5.6 | $ | 1,494 | ||||||||||||||||
Net
gain (loss) on sale of other real estate owned
|
(1,418 | ) | (1,808 | ) | (463.6 | ) | 390 | 390 | 100.0 | — | ||||||||||||||||||
Net
gains on sales of loans
|
4,638 | 3,212 | 225.3 | 1,426 | (558 | ) | (28.1 | ) | 1,984 | |||||||||||||||||||
Net
gains (loss) on sales of securities
|
484 | 649 | 393.3 | (165 | ) | (145 | ) | (725.0 | ) | (20 | ) | |||||||||||||||||
Earnings
on bank owned life insurance
|
489 | (118 | ) | (19.4 | ) | 607 | 210 | 52.9 | 397 | |||||||||||||||||||
Other
operating income
|
1,183 | (39 | ) | (3.2 | ) | 1,222 | 602 | 97.1 | 620 | |||||||||||||||||||
Total
non-interest income
|
$ | 7,025 | $ | 1,968 | 38.9 | $ | 5,057 | $ | 582 | 13.0 | $ | 4,475 |
(dollars in thousands)
|
2009
|
Increase
(Decrease)
Amount
|
%
|
2008
|
Increase
(Decrease)
Amount
|
%
|
2007
|
|||||||||||||||||||||
Salaries
and employee benefits
|
$ | 13,558 | 1,177 | 9.5 | $ | 12,381 | $ | 101 | 0.8 | $ | 12,280 | |||||||||||||||||
Occupancy
and equipment
|
2,779 | (76 | ) | (2.7 | ) | 2,855 | 327 | 12.9 | 2,528 | |||||||||||||||||||
Marketing
and advertising
|
395 | (133 | ) | (25.2 | ) | 528 | (32 | ) | (5.7 | ) | 560 | |||||||||||||||||
State
taxes
|
436 | 70 | 19.1 | 366 | (70 | ) | (16.1 | ) | 436 | |||||||||||||||||||
Data
processing
|
1,246 | 482 | 63.1 | 764 | 371 | 94.4 | 393 | |||||||||||||||||||||
Professional
services
|
702 | (126 | ) | (15.2 | ) | 828 | 287 | 53.0 | 541 | |||||||||||||||||||
FDIC
and state assessments
|
1,802 | 1,588 | 742.1 | 214 | 142 | 197.2 | 72 | |||||||||||||||||||||
OREO
write-downs
|
3,689 | 3,689 | 100.0 | — | — | — | — | |||||||||||||||||||||
OREO
operating expenses
|
507 | 419 | 476.1 | 88 | 88 | 100.0 | — | |||||||||||||||||||||
Other
expense
|
4,577 | 1,010 | 28.3 | 3,567 | (2 | ) | (0.1 | ) | 3,569 | |||||||||||||||||||
Total
non-interest expense
|
$ | 29,691 | $ | 8,100 | 37.5 | $ | 21,591 | $ | 1,212 | 5.9 | $ | 20,379 |
Held To Maturity
|
||||||||||||
(dollars in thousands)
|
2009
|
2008
|
2007
|
|||||||||
Obligations
of states and political subdivisions
|
$ | 6,958 | $ | 5,750 | $ | 3,562 | ||||||
Mortgage-backed
securities
|
491 | 636 | 767 | |||||||||
Total
|
$ | 7,449 | $ | 6,386 | $ | 4,329 |
Available For Sale
|
||||||||||||
(dollars in thousands)
|
2009
|
2008
|
2007
|
|||||||||
U.S.
Agency securities
|
$ | 973 | $ | 1,759 | $ | 3,818 | ||||||
Obligations
of states and political subdivisions
|
22,080 | 19,584 | 16,136 | |||||||||
Mortgage-backed
securities
|
25,624 | 27,205 | 18,540 | |||||||||
Corporate
bonds
|
— | 945 | 1,512 | |||||||||
Mutual
funds
|
5,000 | — | 2,906 | |||||||||
Total
|
$ | 53,677 | $ | 49,493 | $ | 42,912 |
Held To Maturity
|
Due after
|
Due after
|
||||||||||||||||||
Due in one
|
one through
|
five through
|
Due after
|
|||||||||||||||||
(dollars in thousands)
|
year or less
|
five years
|
ten years
|
ten years
|
Total
|
|||||||||||||||
Obligations
of states and political subdivisions
|
$ | 718 | $ | 415 | $ | 594 | $ | 5,231 | $ | 6,958 | ||||||||||
Weighted
average yield
|
6.65 | % | 5.63 | % | 5.65 | % | 6.64 | % | ||||||||||||
Mortgage-backed
securities
|
— | — | — | 491 | 491 | |||||||||||||||
Weighted
average yield
|
— | — | — | 5.44 | % |
|
||||||||||||||
Total
|
$ | 718 | $ | 415 | $ | 594 | $ | 5,722 | $ | 7,449 |
Available For Sale |
Due after
|
Due after
|
||||||||||||||||||
Due in one
|
one through
|
five through
|
Due after
|
|||||||||||||||||
(dollars in thousands)
|
year or less
|
five years
|
ten years
|
ten years
|
Total
|
|||||||||||||||
U.S.
Agency securities
|
$ | 307 | $ | — | $ | 525 | $ | 141 | $ | 973 | ||||||||||
Weighted
average yield
|
1.48 | % | — | 5.14 | % | 8.20 | % | |||||||||||||
Obligations
of states and political subdivisions
|
405 | 8,000 | 4,024 | 9,651 | 22,080 | |||||||||||||||
Weighted
average yield
|
6.76 | % | 4.35 | % | 5.25 | % | 6.13 | % | ||||||||||||
Mortgage-backed
securities
|
— | 63 | 2,999 | 22,562 | 25,624 | |||||||||||||||
Weighted
average yield
|
— | 3.54 | % | 4.31 | % | 5.05 | % | |||||||||||||
Mutual
funds
|
5,000 | — | — | — | 5,000 | |||||||||||||||
Weighted
average yield
|
0.18 | % | — | — | — | |||||||||||||||
Total
|
$ | 5,712 | $ | 8,063 | $ | 7,548 | $ | 32,354 | $ | 53,677 |
(dollars in thousands)
|
2009
|
2008
|
2007
|
2006
|
2005
|
|||||||||||||||
Commercial
and agricultural
|
$ | 93,125 | $ | 91,888 | $ | 128,145 | $ | 132,843 | $ | 124,536 | ||||||||||
Construction,
land development and other land loans
|
64,812 | 100,725 | 93,249 | 87,063 | 87,621 | |||||||||||||||
Residential
real estate 1-4 family
|
91,821 | 82,468 | 60,616 | 64,545 | 50,546 | |||||||||||||||
Multi-family
|
8,605 | 7,860 | 6,353 | 6,927 | 5,229 | |||||||||||||||
Farmland
|
22,824 | 18,092 | 20,125 | 20,126 | 12,083 | |||||||||||||||
Commercial
real estate
|
205,184 | 188,444 | 137,620 | 117,608 | 117,645 | |||||||||||||||
Installment
|
7,216 | 7,293 | 7,283 | 8,668 | 9,945 | |||||||||||||||
Credit
cards and overdrafts
|
1,929 | 1,959 | 3,363 | 1,990 | 1,863 | |||||||||||||||
Less
unearned income
|
(881 | ) | (925 | ) | (681 | ) | (601 | ) | (487 | ) | ||||||||||
Total
|
$ | 494,635 | $ | 497,804 | $ | 456,073 | $ | 439,169 | $ | 408,981 |
Due
after
|
||||||||||||||||
Due
in one
|
one
through
|
Due
after
|
||||||||||||||
(dollars
in thousands)
|
year or less
|
five years
|
five years
|
Total
|
||||||||||||
Commercial
|
$ | 29,744 | $ | 30,922 | $ | 32,459 | $ | 93,125 | ||||||||
Construction,
land development and other land loans
|
51,817 | 6,283 | 6,712 | 64,812 | ||||||||||||
Residential
real estate 1-4 family
|
5,809 | 13,076 | 72,936 | 91,821 | ||||||||||||
Multi-family
|
132 | 1,408 | 7,065 | 8,605 | ||||||||||||
Farmland
|
2,729 | 2,567 | 17,528 | 22,824 | ||||||||||||
Commercial
real estate
|
17,399 | 27,940 | 159,845 | 205,184 | ||||||||||||
Installment
|
1,431 | 3,579 | 2,206 | 7,216 | ||||||||||||
Credit
cards and overdrafts
|
1,929 | — | — | 1,929 | ||||||||||||
Total
|
$ | 110,990 | $ | 85,775 | $ | 298,751 | $ | 495,516 | ||||||||
Less
unearned income
|
(881 | ) | ||||||||||||||
Total
loans
|
$ | 494,635 | ||||||||||||||
Total
loans maturing after one year with
|
||||||||||||||||
Predetermined
interest rates (fixed)
|
$ | 53,536 | $ | 130,346 | $ | 183,882 | ||||||||||
Floating
or adjustable rates (variable)
|
127,678 | 1,910 | 129,588 | |||||||||||||
Total
|
$ | 180,214 | $ | 132,256 | $ | 313,470 |
(dollars
in thousands)
|
2009
|
2008
|
2007
|
2006
|
2005
|
|||||||||||||||
Accruing
loans past due 90 days or more
|
$ | 547 | $ | 2,274 | $ | 2,932 | $ | 376 | $ | 82 | ||||||||||
Restructured
loans
|
— | — | — | — | — | |||||||||||||||
Non-accrual loans:
|
||||||||||||||||||||
Construction,
land development and other land loans
|
9,886 | 11,787 | 2,326 | 991 | — | |||||||||||||||
Residential
real estate 1-4 family
|
1,323 | 615 | 1,044 | 120 | — | |||||||||||||||
Multi-family
real estate
|
353 | — | — | — | — | |||||||||||||||
Commercial
real estate
|
2,949 | 1,477 | — | 905 | 596 | |||||||||||||||
Farmland
|
87 | — | — | — | — | |||||||||||||||
Commercial
and industrial
|
1,049 | 797 | 109 | 5,319 | 6,041 | |||||||||||||||
Installment
|
— | — | — | — | 13 | |||||||||||||||
Total
non-accrual loans
|
15,647 | 14,676 | 3,479 | 7,335 | 6,650 | |||||||||||||||
Total
non-performing loans
|
16,194 | 16,950 | 6,411 | 7,711 | 6,732 | |||||||||||||||
OREO:
|
||||||||||||||||||||
Construction,
land development and other land loans
|
4,850 | 5,443 | — | — | 37 | |||||||||||||||
Residential
real estate 1-4 family
|
220 | 1,367 | — | — | — | |||||||||||||||
Commercial
real estate
|
1,595 | — | — | — | — | |||||||||||||||
Total
OREO
|
6,665 | 6,810 | — | — | 37 | |||||||||||||||
Total
non-performing assets
|
$ | 22,859 | $ | 23,760 | $ | 6,411 | $ | 7,711 | $ | 6,769 | ||||||||||
Allowance
for credit losses (Allowance)
|
11,092 | 7,623 | 5,007 | 4,033 | 5,296 | |||||||||||||||
Allowance
to non-performing loans
|
68.49 | % | 44.97 | % | 78.10 | % | 52.30 | % | 78.67 | % | ||||||||||
Allowance
to non-performing assets
|
48.52 | % | 32.08 | % | 78.10 | % | 52.30 | % | 78.24 | % | ||||||||||
Non-performing
loans to total loans
|
3.36 | % | 3.49 | % | 1.46 | % | 1.82 | % | 1.69 | % | ||||||||||
Non-performing
assets to total assets
|
3.42 | % | 3.80 | % | 1.13 | % | 1.37 | % | 1.38 | % |
(dollars in thousands)
|
2009
|
2008
|
2007
|
2006
|
2005
|
|||||||||||||||
Balance
at beginning of year
|
$ | 7,623 | $ | 5,007 | $ | 4,033 | $ | 5,296 | $ | 4,236 | ||||||||||
Charge-offs:
|
||||||||||||||||||||
Construction
and land development
|
4,687 | 2,039 | — | — | — | |||||||||||||||
Residential
real estate 1-4 family
|
940 | 14 | — | — | — | |||||||||||||||
Commercial
real estate
|
505 | — | 40 | — | — | |||||||||||||||
Commercial
|
238 | 18 | — | 1,925 | 41 | |||||||||||||||
Credit
card
|
80 | 66 | 18 | 16 | 7 | |||||||||||||||
Installment
|
74 | 89 | 93 | 4 | 17 | |||||||||||||||
Total
charge-offs
|
6,524 | 2,226 | 151 | 1,945 | 65 | |||||||||||||||
Recoveries:
|
||||||||||||||||||||
Residential
real estate 1-4 family
|
2 | 3 | — | — | — | |||||||||||||||
Commercial
real estate
|
17 | 37 | 21 | 51 | 19 | |||||||||||||||
Commercial
|
17 | — | 619 | — | 3 | |||||||||||||||
Credit
card
|
4 | 2 | 2 | 5 | 1 | |||||||||||||||
Installment
|
9 | 9 | 1 | 1 | 2 | |||||||||||||||
Total
recoveries
|
49 | 51 | 643 | 57 | 25 | |||||||||||||||
Net
charge-offs (recoveries)
|
6,475 | 2,175 | (492 | ) | 1,888 | 40 | ||||||||||||||
Provision
for credit losses
|
9,944 | 4,791 | 482 | 625 | 1,100 | |||||||||||||||
Balance
at end of year
|
11,092 | $ | 7,623 | $ | 5,007 | $ | 4,033 | $ | 5,296 | |||||||||||
Ratio
of net charge-offs (recoveries) to average loans
outstanding
|
1.29 | % | .46 | % | (.11 | %) | .45 | % | .01 | % |
December
|
September
|
June
|
March
|
December
|
||||||||||||||||
(dollars in thousands)
|
31, 2009
|
30, 2009
|
30, 2009
|
31, 2009
|
31, 2008
|
|||||||||||||||
Loans
past due 30 days or more
|
$ | 16,126 | $ | 18,038 | $ | 21,002 | $ | 20,634 | $ | 23,073 | ||||||||||
%
of total loans
|
3.3 | % | 3.7 | % | 4.3 | % | 4.2 | % | 4.7 | % | ||||||||||
Impaired
loans
|
25,738 | 29,398 | 30,775 | 28,989 | 22,117 | |||||||||||||||
%
of total loans
|
5.2 | % | 6.1 | % | 6.3 | % | 5.8 | % | 4.5 | % | ||||||||||
Non-performing
assets
|
22,859 | 27,008 | 29,934 | 27,567 | 23,760 | |||||||||||||||
%
of total assets
|
3.4 | % | 4.0 | % | 4.5 | % | 4.2 | % | 3.8 | % |
(dollars in thousands)
|
2009
|
2008
|
2007
|
2006
|
2005
|
|||||||||||||||
Total
impaired loans
|
$ | 25,738 | $ | 22,117 | $ | 6,431 | $ | 7,379 | $ | 6,650 | ||||||||||
Total
impaired loans with valuation allowance
|
2,962 | 462 | 3,052 | 51 | 4,917 | |||||||||||||||
Valuation
allowance related to impaired loans
|
638 | 118 | 72 | 17 | 924 |
%
of
|
%
of
|
%
of
|
%
of
|
%
of
|
||||||||||||||||||||||||||||||||||||
2009
|
Total
|
2008
|
Total
|
2007
|
Total
|
2006
|
Total
|
2005
|
Total
|
|||||||||||||||||||||||||||||||
(dollars
in thousands)
|
Reserve
|
Loans*
|
Reserve
|
Loans*
|
Reserve
|
Loans*
|
Reserve
|
Loans*
|
Reserve
|
Loans*
|
||||||||||||||||||||||||||||||
Commercial
loans
|
$ | 1,308 | 19 | % | $ | 1,392 | 18 | % | $ | 1,780 | 28 | % | $ | 1,705 | 30 | % | $ | 1,589 | 30 | % | ||||||||||||||||||||
Real
estate loans
|
8,341 | 79 | % | 5,975 | 80 | % | 3,016 | 70 | % | 2,167 | 67 | % | 3,548 | 67 | % | |||||||||||||||||||||||||
Consumer
loans
|
260 | 2 | % | 256 | 2 | % | 211 | 2 | % | 161 | 3 | % | 159 | 3 | % | |||||||||||||||||||||||||
Unallocated
|
1,183 | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Total
allowance
|
$ | 11,092 | 100 | % | $ | 7,623 | 100 | % | $ | 5,007 | 100 | % | $ | 4,033 | 100 | % | $ | 5,296 | 100 | % | ||||||||||||||||||||
Ratio
of allowance for credit losses to loans outstanding at end of
year
|
2.30 | % | 1.57 | % | 1.14 | % | .95 | % | 1.33 | % |
*
|
Represents
the total of all outstanding loans in each category as a percent of total
loans outstanding.
|
(dollars in thousands)
|
2009
|
2008
|
2007
|
|||||||||
Non-interest
bearing demand
|
$ | 86,046 | $ | 80,066 | $ | 86,883 | ||||||
Interest
bearing demand
|
91,968 | 68,113 | 44,305 | |||||||||
Money
market deposits
|
86,260 | 93,216 | 105,260 | |||||||||
Savings
deposits
|
51,053 | 51,948 | 55,210 | |||||||||
Time
deposits
|
252,368 | 217,964 | 175,678 | |||||||||
Total
|
$ | 567,695 | $ | 511,307 | $ | 467,336 |
2009
|
2008
|
2007
|
||||||||||||||||||||||
(dollars in thousands)
|
Average
Deposits
|
Rate
|
Average
Deposits
|
Rate
|
Average
Deposits
|
Rate
|
||||||||||||||||||
Non-interest
bearing demand deposits
|
$ | 77,282 | 0.00 | % | $ | 82,620 | 0.00 | % | $ | 87,467 | 0.00 | % | ||||||||||||
Interest
bearing demand deposits
|
77,030 | 0.98 | % | 53,816 | 0.81 | % | 42,803 | 0.48 | % | |||||||||||||||
Savings
and money market deposits
|
132,974 | 0.79 | % | 150,723 | 1.64 | % | 151,553 | 3.13 | % | |||||||||||||||
Time
deposits
|
266,929 | 2.80 | % | 186,319 | 3.70 | % | 177,362 | 4.80 | % | |||||||||||||||
Total
|
$ | 554,215 | 1.67 | % | $ | 473,478 | 2.07 | % | $ | 459,185 | 2.93 | % |
(dollars in thousands)
|
Under
$100,000
|
Over
$100,000
|
Total
|
|||||||||
3
months or less
|
$ | 20,875 | $ | 33,962 | $ | 54,837 | ||||||
Over
3 through 6 months
|
25,372 | 42,448 | 67,820 | |||||||||
Over
6 through 12 months
|
15,776 | 46,312 | 62,088 | |||||||||
Over
12 months
|
18,730 | 48,893 | 67,623 | |||||||||
Total
|
$ | 80,753 | $ | 171,615 | $ | 252,368 |
(dollars in
thousands)
|
2009
|
2008
|
2007
|
|||||||||
Amount
outstanding at end of period
|
$ | 4,500 | $ | 23,500 | $ | 10,125 | ||||||
Weighted
average interest rate thereon
|
3.77 | % | 2.37 | % | 4.26 | % | ||||||
Maximum
month-end balance during the year
|
24,000 | 34,290 | 18,695 | |||||||||
Average
balance during the year
|
3,107 | 13,398 | 5,961 | |||||||||
Average
interest rate during the year
|
0.84 | % | 2.61 | % | 5.52 | % |
Payments
due by Period
|
||||||||||||||||||||
Contractual
obligations
|
Less
than
1
year
|
1
– 3
years
|
3
– 5
years
|
More
than
5
years
|
Total
|
|||||||||||||||
Operating
leases
|
$ | 229 | $ | 189 | $ | 99 | $ | — | $ | 517 | ||||||||||
Total
deposits
|
500,072 | 57,844 | 9,779 | — | 567,695 | |||||||||||||||
Federal
Home Loan Bank borrowings
|
— | 15,500 | 5,500 | — | 21,000 | |||||||||||||||
Secured
borrowings
|
— | 977 | — | — | 977 | |||||||||||||||
Junior
subordinated debentures
|
— | — | — | 13,403 | 13,403 | |||||||||||||||
Total
long-term obligations
|
$ | 500,301 | $ | 74,510 | $ | 15,378 | $ | 13,403 | $ | 603,592 |
2009
|
2008
|
|||||||
Commitments
to extend credit
|
$ | 71,435 | $ | 101,459 | ||||
Standby
letters of credit
|
1,164 | 1,519 |
Year
ended December 31,
|
2009
|
2008
|
2007
|
2006
|
2005
|
|||||||||||||||
Return
on average assets
|
(.96 | )% | .16 | % | 1.08 | % | 1.26 | % | 1.31 | % | ||||||||||
Return
on average equity
|
(11.63 | )% | 1.83 | % | 11.46 | % | 13.16 | % | 12.70 | % | ||||||||||
Average
equity to average assets ratio
|
8.23 | % | 8.89 | % | 9.41 | % | 9.60 | % | 10.30 | % | ||||||||||
Dividend
payout ratio
|
— | 35 | % | 82 | % | 75 | % | 78 | % |
Requirements
for
|
||||||||||||||||
Actual
|
Adequately Capitalized
|
|||||||||||||||
(dollars
in thousands)
|
Amount
|
Ratio
|
Amount
|
Ratio
|
||||||||||||
December
31, 2009
|
||||||||||||||||
Tier
1 capital (to average assets)
|
||||||||||||||||
Consolidated
|
$ | 59,263 | 9.06 | % | $ | 26,170 | 4.00 | % | ||||||||
Bank
|
59,055 | 9.03 | % | 26,148 | 4.00 | % | ||||||||||
Tier
1 capital (to risk-weighted assets)
|
||||||||||||||||
Consolidated
|
59,263 | 11.84 | % | 20,022 | 4.00 | % | ||||||||||
Bank
|
59,055 | 11.81 | % | 20,009 | 4.00 | % | ||||||||||
Total
capital (to risk-weighted assets)
|
||||||||||||||||
Consolidated
|
65,579 | 13.10 | % | 40,043 | 8.00 | % | ||||||||||
Bank
|
65,368 | 13.07 | % | 40,018 | 8.00 | % |
December
31, 2008
|
||||||||||||||||
Tier
1 capital (to average assets)
|
||||||||||||||||
Consolidated
|
$ | 53,011 | 8.87 | % | $ | 23,905 | 4.00 | % | ||||||||
Bank
|
52,181 | 8.75 | % | 23,858 | 4.00 | % | ||||||||||
Tier
1 capital (to risk-weighted assets)
|
||||||||||||||||
Consolidated
|
53,011 | 10.54 | % | 20,117 | 4.00 | % | ||||||||||
Bank
|
52,181 | 10.40 | % | 20,068 | 4.00 | % | ||||||||||
Total
capital (to risk-weighted assets)
|
||||||||||||||||
Consolidated
|
59,315 | 11.79 | % | 40,233 | 8.00 | % | ||||||||||
Bank
|
58,470 | 11.65 | % | 40,137 | 8.00 | % |
(dollars in thousands)
|
Due in one
year or less
|
Due after
one through
five years
|
Due after
five years
|
Total
|
||||||||||||
Interest earning assets | ||||||||||||||||
Loans,
including loans held for sale
|
$ | 181,164 | $ | 181,215 | $ | 132,256 | $ | 494,635 | ||||||||
Investment
securities
|
7,539 | 12,886 | 40,701 | 61,126 | ||||||||||||
Fed
Funds sold and interest bearing balances
with banks
|
40,068 | — | — | 40,068 | ||||||||||||
Federal
Home Loan Bank stock
|
— | — | 3,182 | 3,182 | ||||||||||||
Total
interest earning assets
|
$ | 228,771 | $ | 194,101 | $ | 176,139 | $ | 599,011 | ||||||||
Interest bearing liabilities | ||||||||||||||||
Interest
bearing demand deposits
|
$ | 91,968 | $ | — | $ | — | $ | 91,968 | ||||||||
Savings
and money market deposits
|
137,313 | — | — | 137,313 | ||||||||||||
Time
deposits
|
184,745 | 67,623 | — | 252,368 | ||||||||||||
Short
term borrowings
|
4,500 | — | — | 4,500 | ||||||||||||
Long
term borrowings
|
— | 21,000 | — | 21,000 | ||||||||||||
Secured
borrowings
|
— | 977 | — | 977 | ||||||||||||
Junior
subordinated debentures
|
8,248 | 5,155 | — | 13,403 | ||||||||||||
Total
interest bearing liabilities
|
$ | 426,774 | $ | 94,755 | $ | — | $ | 521,529 | ||||||||
Net
interest rate sensitivity GAP
|
$ | (198,003 | ) | $ | 99,346 | $ | 176,139 | $ | 77,482 | |||||||
Cumulative
interest rate sensitivity GAP
|
(98,657 | ) | 77,482 | 77,482 | ||||||||||||
Cumulative
interest rate sensitivity GAP as
a % of earning assets
|
(16.5 | )% | 12.9 | % | 12.9 | % |
|
(a)
|
(1) The
following financial statements are filed
below:
|
|
(a)
|
(2) Schedules: None
|
|
(a)
|
(3) Exhibits: See
Exhibit Index immediately following the signature
page.
|
2009
|
2008
|
|||||||
Assets
|
||||||||
Cash
and due from banks
|
$ | 12,836 | $ | 16,182 | ||||
Interest
bearing deposits in banks
|
35,068 | 582 | ||||||
Federal
funds sold
|
5,000 | 775 | ||||||
Securities
available for sale, at fair value (amortized cost of $54,981 and
$52,930)
|
53,677 | 49,493 | ||||||
Securities
held to maturity (fair value of $7,594 and $6,418)
|
7,449 | 6,386 | ||||||
Federal
Home Loan Bank stock, at cost
|
3,182 | 2,170 | ||||||
Loans
held for sale
|
12,389 | 11,486 | ||||||
Loans
|
482,246 | 486,318 | ||||||
Allowance
for credit losses
|
11,092 | 7,623 | ||||||
Loans
- net
|
471,154 | 478,695 | ||||||
Premises
and equipment
|
15,914 | 16,631 | ||||||
Other
real estate owned
|
6,665 | 6,810 | ||||||
Accrued
interest receivable
|
2,537 | 2,772 | ||||||
Cash
surrender value of life insurance
|
16,207 | 15,718 | ||||||
Goodwill
|
11,282 | 11,282 | ||||||
Other
intangible assets
|
1,445 | 1,587 | ||||||
Other
assets
|
13,821 | 5,266 | ||||||
Total
assets
|
$ | 668,626 | $ | 625,835 | ||||
Liabilities
and Shareholders’ Equity
|
||||||||
Liabilities
|
||||||||
Deposits:
|
||||||||
Demand,
non-interest bearing
|
$ | 86,046 | $ | 80,066 | ||||
Savings
and interest-bearing demand
|
229,281 | 213,277 | ||||||
Time,
interest-bearing
|
252,368 | 217,964 | ||||||
Total
deposits
|
567,695 | 511,307 | ||||||
Accrued
interest payable
|
1,125 | 1,002 | ||||||
Secured
borrowings
|
977 | 1,354 | ||||||
Short-term
borrowings
|
4,500 | 23,500 | ||||||
Long-term
borrowings
|
21,000 | 22,500 | ||||||
Junior
subordinated debentures
|
13,403 | 13,403 | ||||||
Other
liabilities
|
2,277 | 2,695 | ||||||
Total
liabilities
|
610,977 | 575,761 | ||||||
Commitments
and Contingencies (See note 13)
|
— | — | ||||||
Shareholders’
Equity
|
||||||||
Common
stock (par value $1); authorized: 25,000,000 shares; issued and
outstanding: 2009 – 10,121,853 shares; 2008 – 7,317,430
shares
|
10,122 | 7,318 | ||||||
Additional
paid-in capital
|
41,270 | 31,626 | ||||||
Retained
earnings
|
7,599 | 13,937 | ||||||
Accumulated
other comprehensive loss
|
(1,342 | ) | (2,807 | ) | ||||
Total
shareholders’ equity
|
57,649 | 50,074 | ||||||
Total
liabilities and shareholders’ equity
|
$ | 668,626 | $ | 625,835 |
2009
|
2008
|
2007
|
||||||||||
Interest
and Dividend Income
|
||||||||||||
Loans
|
$ | 29,800 | $ | 31,215 | $ | 37,658 | ||||||
Federal
funds sold and deposits in banks
|
109 | 44 | 426 | |||||||||
Securities
available for sale:
|
||||||||||||
Taxable
|
1,841 | 1,610 | 1,290 | |||||||||
Tax-exempt
|
745 | 609 | 528 | |||||||||
Securities
held to maturity:
|
||||||||||||
Taxable
|
27 | 38 | 46 | |||||||||
Tax-exempt
|
298 | 178 | 181 | |||||||||
Federal
Home Loan Bank stock dividends
|
— | 19 | 7 | |||||||||
Total
interest and dividend income
|
32,820 | 33,713 | 40,136 | |||||||||
Interest
Expense
|
||||||||||||
Deposits
|
9,264 | 9,794 | 13,460 | |||||||||
Short-term
borrowings
|
26 | 349 | 329 | |||||||||
Long-term
borrowings
|
1,164 | 991 | 820 | |||||||||
Secured
borrowings
|
75 | 94 | 110 | |||||||||
Junior
subordinated debentures
|
538 | 770 | 914 | |||||||||
Total
interest expense
|
11,067 | 11,998 | 15,633 | |||||||||
Net
interest income
|
21,753 | 21,715 | 24,503 | |||||||||
Provision
for Credit Losses
|
9,944 | 4,791 | 482 | |||||||||
Net
interest income after provision for credit losses
|
11,809 | 16,924 | 24,021 | |||||||||
Non-Interest
Income
|
||||||||||||
Service
charges on deposit accounts
|
1,649 | 1,577 | 1,494 | |||||||||
Net
gains (loss) on sale of other real estate owned
|
(1,418 | ) | 390 | — | ||||||||
Net
gains from sales of loans
|
4,638 | 1,426 | 1,984 | |||||||||
Net
gain (loss) on sales of securities available for sale
|
484 | (165 | ) | (20 | ) | |||||||
Earnings
on bank owned life insurance
|
489 | 607 | 397 | |||||||||
Other
operating income
|
1,183 | 1,222 | 620 | |||||||||
Total
non-interest income
|
7,025 | 5,057 | 4,475 | |||||||||
Non-Interest
Expense
|
||||||||||||
Salaries
and employee benefits
|
13,558 | 12,381 | 12,280 | |||||||||
Occupancy
|
1,560 | 1,565 | 1,336 | |||||||||
Equipment
|
1,219 | 1,290 | 1,192 | |||||||||
State
taxes
|
436 | 366 | 436 | |||||||||
Data
processing
|
1,246 | 764 | 393 | |||||||||
Professional
services
|
702 | 828 | 541 | |||||||||
Other
real estate owned write-downs
|
3,689 | — | — | |||||||||
Other
real estate owned operating costs
|
507 | 88 | — | |||||||||
FDIC
assessments
|
1,802 | 214 | 54 | |||||||||
Other
|
4,972 | 4,095 | 4,147 | |||||||||
Total
non-interest expense
|
29,691 | 21,591 | 20,379 | |||||||||
Income
(loss) before income taxes
|
(10,857 | ) | 390 | 8,117 | ||||||||
Income
Taxes (Benefit)
|
(4,519 | ) | (561 | ) | 2,086 | |||||||
Net
income (loss)
|
$ | (6,338 | ) | $ | 951 | $ | 6,031 | |||||
Earnings
(Loss) Per Share
|
||||||||||||
Basic
|
$ | (0.74 | ) | $ | 0.13 | $ | 0.83 | |||||
Diluted
|
$ | (0.74 | ) | $ | 0.13 | $ | 0.82 | |||||
Weighted
Average Shares Outstanding:
|
||||||||||||
Basic
|
8,539,237 | 7,311,611 | 7,239,323 | |||||||||
Diluted
|
8,539,237 | 7,328,168 | 7,334,846 |
Accumulated
|
||||||||||||||||||||||||
Shares
of
|
Additional
|
Other
|
||||||||||||||||||||||
Common
|
Common
|
Paid-in
|
Retained
|
Comprehensive
|
||||||||||||||||||||
Stock
|
Stock
|
Capital
|
Earnings
|
Loss
|
Total
|
|||||||||||||||||||
Balance
at January 1, 2007
|
6,524,407 | $ | 6,524 | $ | 26,047 | $ | 16,731 | $ | (318 | ) | $ | 48,984 | ||||||||||||
Comprehensive
income:
|
||||||||||||||||||||||||
Net
income
|
— | — | — | 6,031 | — | 6,031 | ||||||||||||||||||
Unrealized
holding gain on securities of $71 (net of tax of $25)
|
— | — | — | — | 46 | 46 | ||||||||||||||||||
Prior
service cost at initiation of defined benefit plan
|
— | — | — | — | (704 | ) | (704 | ) | ||||||||||||||||
Amortization
of unrecognized prior service costs and net gains/losses
|
— | — | — | — | 98 | 98 | ||||||||||||||||||
Comprehensive
income
|
5,471 | |||||||||||||||||||||||
Stock
options exercised
|
74,026 | 74 | 775 | — | — | 849 | ||||||||||||||||||
Issuance
of common stock
|
25,012 | 25 | 395 | — | — | 420 | ||||||||||||||||||
Common
stock repurchased and retired
|
(16,900 | ) | (16 | ) | (203 | ) | (219 | ) | ||||||||||||||||
Stock
compensation expense
|
— | — | 97 | — | — | 97 | ||||||||||||||||||
Cash
dividends declared ($0.75 per share)
|
— | — | — | (4,955 | ) | — | (4,955 | ) | ||||||||||||||||
Tax
benefit from exercise of stock options
|
— | — | 52 | — | — | 52 | ||||||||||||||||||
Balance
at December 31, 2007
|
6,606,545 | $ | 6,607 | $ | 27,163 | $ | 17,807 | $ | (878 | ) | $ | 50,699 | ||||||||||||
Comprehensive
loss:
|
||||||||||||||||||||||||
Net
income
|
— | — | — | 951 | — | 951 | ||||||||||||||||||
Unrealized
holding loss on securities of $2,106 (net of tax of $1,084) less
reclassification adjustment for net losses included in net income of $109
(net of tax of $56)
|
— | — | — | — | (1,997 | ) | (1,997 | ) | ||||||||||||||||
Amortization
of unrecognized prior service costs and net gains/losses
|
— | — | — | — | 68 | 68 | ||||||||||||||||||
Comprehensive
loss
|
(978 | ) | ||||||||||||||||||||||
Stock
options exercised
|
6,656 | 6 | 52 | — | — | 58 | ||||||||||||||||||
Issuance
of common stock
|
41,672 | 42 | 524 | — | — | 566 | ||||||||||||||||||
Common
stock repurchased and retired
|
(2,300 | ) | (2 | ) | (24 | ) | (26 | ) | ||||||||||||||||
Stock
compensation expense
|
— | — | 87 | — | — | 87 | ||||||||||||||||||
Cash
dividends declared ($0.05 per share)
|
— | — | — | (333 | ) | — | (333 | ) | ||||||||||||||||
Stock
dividends declared (10%)
|
664,857 | 665 | 3,823 | (4,488 | ) | — | — | |||||||||||||||||
Tax
benefit from exercise of stock options
|
— | — | 1 | — | — | 1 | ||||||||||||||||||
Balance
at December 31, 2008
|
7,317,430 | $ | 7,318 | $ | 31,626 | $ | 13,937 | $ | (2,807 | ) | $ | 50,074 | ||||||||||||
Comprehensive
loss:
|
||||||||||||||||||||||||
Net
loss
|
— | — | — | (6,338 | ) | — | (6,338 | ) | ||||||||||||||||
Unrealized
holding gain on securities of $1,727 (net of tax of $890) less
reclassification adjustment for net gains included in net income of $319
(net of tax of $165)
|
— | — | — | — | 1,408 | 1,408 | ||||||||||||||||||
Amortization
of unrecognized prior service costs and net gains/losses
|
— | — | — | — | 57 | 57 | ||||||||||||||||||
Comprehensive
loss
|
(4,873 | ) | ||||||||||||||||||||||
Issuance
of common stock
|
2,804,423 | 2,804 | 9,590 | — | — | 12,394 | ||||||||||||||||||
Stock
compensation expense
|
— | — | 54 | — | — | 54 | ||||||||||||||||||
Balance
at December 31, 2009
|
10,121,853 | $ | 10,122 | $ | 41,270 | $ | 7,599 | $ | (1,342 | ) | $ | 57,649 |
2009
|
2008
|
2007
|
||||||||||
Cash
Flows from Operating Activities
|
||||||||||||
Net
income (loss)
|
$ | (6,338 | ) | $ | 951 | $ | 6,031 | |||||
Adjustments
to reconcile net income to net cash provided by (used in) operating
activities:
|
||||||||||||
Depreciation
and amortization
|
1,611 | 1,604 | 1,476 | |||||||||
Provision
for credit losses
|
9,944 | 4,791 | 482 | |||||||||
Deferred
income taxes
|
(2,696 | ) | (752 | ) | (305 | ) | ||||||
Originations
of loans held for sale
|
(274,264 | ) | (96,986 | ) | (123,406 | ) | ||||||
Proceeds
from sales of loans held for sale
|
276,668 | 99,709 | 122,549 | |||||||||
Net
gains on sales of loans
|
(4,638 | ) | (1,426 | ) | (1,984 | ) | ||||||
(Gain)
loss on sales of securities available for sale
|
(484 | ) | 165 | 20 | ||||||||
(Gain)
loss on sales of other real estate owned
|
1,418 | (390 | ) | — | ||||||||
(Gain)
loss on sale of premises and equipment
|
— | (301 | ) | 18 | ||||||||
Earnings
on bank owned life insurance
|
(489 | ) | (607 | ) | (397 | ) | ||||||
(Increase)
decrease in accrued interest receivable
|
235 | 393 | (159 | ) | ||||||||
Increase
(decrease) in accrued interest payable
|
123 | (397 | ) | (16 | ) | |||||||
Write-down
of other real estate owned
|
3,689 | — | — | |||||||||
Increase
in prepaid expenses
|
(4,590 | ) | (140 | ) | (82 | ) | ||||||
Other
- net
|
(2,231 | ) | (1,011 | ) | 1,211 | |||||||
Net
cash provided by (used in) operating activities
|
(2,042 | ) | 5,603 | 5,438 | ||||||||
Cash
Flows from Investing Activities
|
||||||||||||
Net
(increase) decrease in interest bearing deposits in banks
|
(34,486 | ) | (329 | ) | 5,226 | |||||||
Net
(increase) decrease in federal funds sold
|
(4,225 | ) | (775 | ) | 20,345 | |||||||
Activity
in securities available for sale:
|
||||||||||||
Sales
|
11,072 | 5,208 | 805 | |||||||||
Maturities,
prepayments and calls
|
9,780 | 5,921 | 8,807 | |||||||||
Purchases
|
(23,366 | ) | (21,254 | ) | (15,090 | ) | ||||||
Activity
in securities held to maturity:
|
||||||||||||
Maturities
|
384 | 828 | 943 | |||||||||
Purchases
|
(1,450 | ) | (2,888 | ) | — | |||||||
Proceeds
from sales of SBA loan pools
|
— | — | 1,139 | |||||||||
Increase
in loans made to customers, net of principal
collections
|
(11,867 | ) | (53,335 | ) | (14,821 | ) | ||||||
Purchases
of premises and equipment
|
(552 | ) | (2,933 | ) | (5,191 | ) | ||||||
Proceeds
from sales of premises and equipment
|
— | 668 | 190 | |||||||||
Proceeds
from sales of other real estate owned
|
5,834 | 1,499 | — | |||||||||
Purchase
of bank owned life insurance
|
— | — | (5,000 | ) | ||||||||
Net
cash used in investing activities
|
(48,876 | ) | (67,390 | ) | (2,647 | ) |
2009
|
2008
|
2007
|
||||||||||
Cash
Flows from Financing Activities
|
||||||||||||
Net
increase in deposits
|
$ | 56,388 | $ | 43,971 | $ | 495 | ||||||
Net
increase (decrease) in short-term borrowings
|
(23,500 | ) | 6,875 | 3,125 | ||||||||
Decrease
in secured borrowings
|
(377 | ) | (64 | ) | (488 | ) | ||||||
Proceeds
from issuance of long-term borrowings
|
3,000 | 23,500 | — | |||||||||
Repayments
of long-term borrowings
|
— | (7,000 | ) | (2,000 | ) | |||||||
Common
stock issued
|
12,394 | 624 | 1,269 | |||||||||
Repurchase
and retirement of common stock
|
— | (26 | ) | (219 | ) | |||||||
Cash
dividends paid
|
(333 | ) | (4,955 | ) | (4,893 | ) | ||||||
Net
cash provided by (used in) financing activities
|
47,572 | 62,925 | (2,711 | ) | ||||||||
Net
change in cash and due from banks
|
(3,346 | ) | 1,138 | 80 | ||||||||
Cash
and Due from Banks
|
||||||||||||
Beginning
of year
|
16,182 | 15,044 | 14,964 | |||||||||
End
of year
|
$ | 12,836 | $ | 16,182 | $ | 15,044 | ||||||
Supplemental
Disclosures of Cash Flow Information
|
||||||||||||
Interest
paid
|
$ | 10,944 | $ | 12,395 | $ | 15,649 | ||||||
Income
taxes paid
|
183 | 1,091 | 2,297 | |||||||||
Supplemental
Disclosures of Non-Cash Investing Activities
|
||||||||||||
Fair
value adjustment of securities available for sale, net of
tax
|
$ | 1,408 | $ | (1,997 | ) | $ | 46 | |||||
Transfer
of securities held to maturity to available for sale
|
— | — | 825 | |||||||||
Transfer
of loans held for sale to loans held for investment
|
1,408 | 4,259 | — | |||||||||
Other
real estate owned acquired in settlement of loans
|
(11,252 | ) | (7,919 | ) | — | |||||||
Financed
sale of other real estate owned
|
456 | — | — | |||||||||
Reclass
of long-term borrowings to short-term borrowings
|
4,500 | 6,500 | — |
·
|
Interim
disclosures about the fair value of financial instruments which require an
entity to provide disclosures about fair values of financial instruments
in interim financial statements. The guidance is effective for
interim periods ending after June 15, 2009 with early adoption permitted
for periods ending after March 15, 2009. The Company adopted
the guidance as of June 30, 2009 and it did not have a material impact on
the Company’s consolidated financial
statements.
|
·
|
Recognition
and presentation of other-than-temporary impairments which applies to
investments in debt securities for which other-than-temporary impairments
may be recorded. If any entity’s management asserts that it
does not have the intent to sell a debt security and it is more likely
than not that it will not have to sell the security before recovery of its
cost basis, then an entity may separate other-than-temporary impairments
into two components: 1) the amount related to credit losses recorded in
earnings, and 2) all other amounts recorded in other comprehensive
income. The guidance is effective for interim periods ending
after June 15, 2009 with early adoption permitted. The Company
adopted the guidance as of June 30, 2009 and it did not have a material
impact on the Company’s consolidated financial
statements.
|
·
|
Determining
fair value when the volume and level of activity for the asset or
liability have significantly decreased and identifying transactions that
are not orderly which provides additional guidance for estimating fair
values and on identifying circumstances that indicate a transaction is not
orderly. The guidance is effective for interim periods ending after June
15, 2009 with early adoption permitted. The Company adopted the
guidance as of June 30, 2009 and it did not have a material impact on the
Company’s consolidated financial
statements.
|
Gross
|
Gross
|
|||||||||||||||
Amortized
|
Unrealized
|
Unrealized
|
Fair
|
|||||||||||||
Securities
Available for Sale
|
Cost
|
Gains
|
Losses
|
Value
|
||||||||||||
December
31, 2009
|
||||||||||||||||
U.S.
Government agency securities
|
$ | 933 | $ | 40 | $ | — | $ | 973 | ||||||||
Obligations
of states and political subdivisions
|
21,294 | 821 | 35 | 22,080 | ||||||||||||
Mortgage-backed
securities
|
27,754 | 277 | 2,407 | 25,624 | ||||||||||||
Mutual
funds
|
5,000 | — | — | 5,000 | ||||||||||||
Total
|
$ | 54,981 | $ | 1,138 | $ | 2,442 | $ | 53,677 | ||||||||
December
31, 2008
|
||||||||||||||||
U.S.
Government agency securities
|
$ | 1,671 | $ | 88 | $ | — | $ | 1,759 | ||||||||
Obligations
of states and political subdivisions
|
19,876 | 158 | 450 | 19,584 | ||||||||||||
Mortgage-backed
securities
|
30,370 | 330 | 3,495 | 27,205 | ||||||||||||
Corporate
bonds
|
1,013 | — | 68 | 945 | ||||||||||||
Total
|
$ | 52,930 | $ | 576 | $ | 4,013 | $ | 49,493 | ||||||||
Securities
Held to Maturity
|
||||||||||||||||
December
31, 2009
|
||||||||||||||||
State
and municipal securities
|
$ | 6,958 | $ | 124 | $ | — | $ | 7,082 | ||||||||
Mortgage-backed
securities
|
491 | 21 | — | 512 | ||||||||||||
Total
|
$ | 7,449 | $ | 145 | $ | — | $ | 7,594 | ||||||||
December
31, 2008
|
||||||||||||||||
State
and municipal securities
|
$ | 5,750 | $ | 40 | $ | 12 | $ | 5,778 | ||||||||
Mortgage-backed
securities
|
636 | 5 | 1 | 640 | ||||||||||||
Total
|
$ | 6,386 | $ | 45 | $ | 13 | $ | 6,418 |
Less than 12 Months
|
More than 12 Months
|
Total
|
||||||||||||||||||||||
Fair
|
Unrealized
|
Fair
|
Unrealized
|
Fair
|
Unrealized
|
|||||||||||||||||||
December
31, 2009
|
Value
|
Loss
|
Value
|
Loss
|
Value
|
Loss
|
||||||||||||||||||
Available
for Sale
|
||||||||||||||||||||||||
Obligations
of states and political subdivisions
|
$ | 1,835 | $ | 2 | $ | 2,638 | $ | 33 | $ | 4,473 | $ | 35 | ||||||||||||
Mortgage-backed
securities
|
|
5,938 | 362 | 7,778 | 2,045 | 13,716 | 2,407 | |||||||||||||||||
Corporate
bonds
|
— | — | — | — | — | — | ||||||||||||||||||
Mutual
funds
|
— | — | — | — | — | — | ||||||||||||||||||
Total
|
$ | 7,773 | $ | 364 | $ | 10,416 | $ | 2,078 | $ | 18,189 | $ | 2,442 |
Less than 12 Months
|
More than 12 Months
|
Total
|
||||||||||||||||||||||
Fair
|
Unrealized
|
Fair
|
Unrealized
|
Fair
|
Unrealized
|
|||||||||||||||||||
December 31, 2008
|
Value
|
Loss
|
Value
|
Loss
|
Value
|
Loss
|
||||||||||||||||||
Available
for Sale
|
||||||||||||||||||||||||
Obligations
of states and
|
||||||||||||||||||||||||
political
subdivisions
|
$ | 8,756 | $ | 349 | $ | 889 | $ | 101 | $ | 9,645 | $ | 450 | ||||||||||||
Mortgage-backed
securities
|
10,522 | 3,006 | 4,302 | 489 | 14,824 | 3,495 | ||||||||||||||||||
Corporate
bonds
|
945 | 68 | — | — | 945 | 68 | ||||||||||||||||||
Mutual
funds
|
— | — | — | — | — | — | ||||||||||||||||||
Total
|
$ | 20,223 | $ | 3,423 | $ | 5,191 | $ | 590 | $ | 25,414 | $ | 4,013 | ||||||||||||
Held
to Maturity
|
||||||||||||||||||||||||
State
and municipal securities
|
$ | 378 | $ | 12 | $ | — | $ | — | $ | 378 | $ | 12 | ||||||||||||
Mortgage-backed
securities
|
160 | 1 | — | — | 160 | 1 | ||||||||||||||||||
Total
|
$ | 538 | $ | 13 | $ | — | $ | — | $ | 538 | $ | 13 |
Held to Maturity
|
Available for Sale
|
|||||||||||||||
Amortized
|
Fair
|
Amortized
|
Fair
|
|||||||||||||
Cost
|
Value
|
Cost
|
Value
|
|||||||||||||
Due
in one year or less
|
$ | 718 | $ | 718 | $ | 696 | $ | 712 | ||||||||
Due
from one year to five years
|
415 | 451 | 7,687 | 8,001 | ||||||||||||
Due
from five to ten years
|
594 | 638 | 4,333 | 4,549 | ||||||||||||
Due
after ten years
|
5,231 | 5,275 | 9,511 | 9,791 | ||||||||||||
Mortgage-backed
securities
|
491 | 512 | 27,754 | 25,624 | ||||||||||||
Mutual
funds
|
— | — | 5,000 | 5,000 | ||||||||||||
Total
|
$ | 7,449 | $ | 7,594 | $ | 54,981 | $ | 53,677 |
2009
|
2008
|
|||||||
Commercial
and agricultural
|
$ | 93,125 | $ | 91,888 | ||||
Real
estate:
|
||||||||
Construction,
land development and other land loans
|
64,812 | 100,725 | ||||||
Residential
1-4 family
|
91,821 | 82,468 | ||||||
Multi-family
|
8,605 | 7,860 | ||||||
Commercial
real estate – owner occupied
|
105,663 | 88,056 | ||||||
Commercial
real estate – non owner occupied
|
99,521 | 100,388 | ||||||
Farmland
|
22,824 | 18,092 | ||||||
Consumer
|
9,145 | 9,252 | ||||||
495,516 | 498,729 | |||||||
Less
unearned income
|
(881 | ) | (925 | ) | ||||
Total
|
$ | 494,635 | $ | 497,804 |
2009
|
2008
|
2007
|
||||||||||
Balance
at beginning of year
|
$ | 7,623 | $ | 5,007 | $ | 4,033 | ||||||
Provision
for credit losses
|
9,944 | 4,791 | 482 | |||||||||
Charge-offs
|
(6,524 | ) | (2,226 | ) | (151 | ) | ||||||
Recoveries
|
49 | 51 | 643 | |||||||||
Net
(charge-offs) recoveries
|
(6,475 | ) | (2,175 | ) | 492 | |||||||
Balance
at end of year
|
$ | 11,092 | $ | 7,623 | $ | 5,007 |
2009
|
2008
|
2007
|
||||||||||
December
31
|
||||||||||||
Impaired
loans without a valuation allowance
|
$ | 22,776 | $ | 21,655 | $ | 3,379 | ||||||
Impaired
loans with a valuation allowance
|
2,962 | 462 | 3,052 | |||||||||
Total
impaired loans
|
$ | 25,738 | $ | 22,117 | $ | 6,431 | ||||||
Valuation
allowance related to impaired loans
|
$ | 638 | $ | 118 | $ | 72 | ||||||
Years
Ended December 31
|
||||||||||||
Average
investment in impaired loans
|
$ | 28,725 | $ | 16,915 | $ | 2,938 | ||||||
Interest
income recognized on a cash basis on impaired loans
|
444 | 34 | 457 |
2009
|
2008
|
|||||||
Land
and premises
|
$ | 17,518 | $ | 16,546 | ||||
Equipment,
furniture and fixtures
|
7,192 | 7,585 | ||||||
Construction
in progress
|
57 | 835 | ||||||
24,767 | 24,966 | |||||||
Less
accumulated depreciation and amortization
|
8,853 | 8,335 | ||||||
Total
premises and equipment
|
$ | 15,914 | $ | 16,631 |
2010
|
$ | 229 | ||
2011
|
126 | |||
2012
|
63 | |||
2013
|
54 | |||
2014
|
45 | |||
Total
minimum payments required
|
$ | 517 |
2009
|
2008
|
|||||||
Balance
at beginning of year
|
$ | 6,810 | $ | — | ||||
Additions
|
11,252 | 7,919 | ||||||
Dispositions
|
(7,708 | ) | (1,109 | ) | ||||
Fair
value write-downs
|
(3,689 | ) | — | |||||
Balance
at end of year
|
$ | 6,665 | $ | 6,810 |
2009
|
2008
|
|||||||
Demand
deposits, non-interest bearing
|
$ | 86,046 | $ | 80,066 | ||||
NOW
and money market accounts
|
178,228 | 161,329 | ||||||
Savings
deposits
|
51,053 | 51,948 | ||||||
Time
certificates, $100,000 or more
|
171,615 | 143,991 | ||||||
Other
time certificates
|
80,753 | 73,973 | ||||||
Total
|
$ | 567,695 | $ | 511,307 |
2010
|
$ | 184,745 | ||
2011
|
47,613 | |||
2012
|
10,231 | |||
2013
|
4,427 | |||
2014
|
5,352 | |||
Total
|
$ | 252,368 |
Pacific
Financial Corporation and Subsidiary
|
December
31, 2009 and 2008 and for the three years ended December 31,
2009
|
Notes to Consolidated Financial Statements,
Dollars in Thousands Except Per Share
Amounts
|
2009
|
2008
|
|||||||
Amount
outstanding at end of year
|
$ | 4,500 | $ | 23,500 | ||||
Weighted
average interest rate at December 31
|
3.77 | % | 2.37 | % | ||||
Maximum
month-end balance during the year
|
24,000 | 34,290 | ||||||
Average
balance during the year
|
3,107 | 13,398 | ||||||
Average
interest rate during the year
|
.84 | % | 2.61 | % |
Issuance
|
Preferred
|
Rate
|
Initial
|
Rate
at
|
Maturity
|
||||||||||||||||
Issuance
Trust
|
Date
|
Security
|
Type
|
Rate
|
12/31/09
|
Date
|
|||||||||||||||
PFC
Statutory Trust I
|
12/2005
|
$
|
5,000
|
Fixed
(1)
|
6.39%
|
6.39%
|
3/2036
|
||||||||||||||
PFC
Statutory Trust II
|
6/2006
|
$ |
8,000
|
Variable (2)
|
7.02%
|
1.88%
|
7/2036
|
|
(1)
|
Fixed
rate until March 15, 2011, at which time becomes a variable rate, adjusted
quarterly, equal to 145 basis points over the three month London Interbank
Offered Rate (“LIBOR”) rate.
|
|
(2)
|
The
variable rate preferred securities reprice quarterly based on the three
month LIBOR rate.
|
Pacific
Financial Corporation and Subsidiary
|
December
31, 2009 and 2008 and for the three years ended December 31,
2009
|
Notes to Consolidated Financial Statements,
Dollars in Thousands Except Per Share
Amounts
|
2009
|
2008
|
2007
|
||||||||||
Current
|
$ | (1,823 | ) | $ | 191 | $ | 2,391 | |||||
Deferred
|
(2,696 | ) | (752 | ) | (305 | ) | ||||||
Total
income taxes (benefit)
|
$ | (4,519 | ) | $ | (561 | ) | $ | 2,086 |
2009
|
2008
|
|||||||
Deferred
Tax Assets
|
||||||||
Allowance
for credit losses
|
$ | 3,815 | $ | 2,521 | ||||
Deferred
compensation
|
124 | 136 | ||||||
Supplemental
executive retirement plan
|
478 | 341 | ||||||
Unrealized
loss on securities available for sale
|
444 | 1,169 | ||||||
Loan
fees/costs
|
262 | 274 | ||||||
OREO
write-downs
|
794 | — | ||||||
Low
income housing credit carry-forward
|
217 | — | ||||||
AMT
credit carry-forward
|
127 | — | ||||||
Other
|
123 | 145 | ||||||
Total
deferred tax assets
|
6,384 | 4,586 | ||||||
Deferred
Tax Liabilities
|
||||||||
Depreciation
|
$ | 181 | $ | 251 | ||||
Loan
fees/costs
|
2,283 | 2,447 | ||||||
Core
deposit intangible
|
61 | 109 | ||||||
Prepaid
expenses
|
134 | 93 | ||||||
FHLB
dividends
|
143 | 141 | ||||||
Other
|
271 | 205 | ||||||
Total
deferred tax liabilities
|
3,073 | 3,246 | ||||||
Net
deferred tax assets
|
$ | 3,311 | $ | 1,340 |
Pacific
Financial Corporation and Subsidiary
|
December
31, 2009 and 2008 and for the three years ended December 31,
2009
|
Notes to Consolidated Financial Statements,
Dollars in Thousands Except Per Share
Amounts
|
Percent
|
Percent
|
Percent
|
||||||||||||||||||||||
2009
|
of Pre-tax
|
2008
|
of Pre-tax
|
2007
|
Pre-tax
|
|||||||||||||||||||
Amount
|
Income
|
Amount
|
Income
|
Amount
|
Income
|
|||||||||||||||||||
Income
(loss) tax at statutory rate
|
$ | (3,800 | ) | (35.0 | )% | $ | 137 | 35.0 | % | $ | 2,841 | 35.0 | % | |||||||||||
Adjustments
resulting from:
|
||||||||||||||||||||||||
Tax-exempt
income
|
(505 | ) | (4.7 | ) | (371 | ) | (95.1 | ) | (316 | ) | (3.9 | ) | ||||||||||||
Net
earnings on life insurance policies
|
(184 | ) | (1.7 | ) | (199 | ) | (51.0 | ) | (139 | ) | (1.7 | ) | ||||||||||||
Other
|
(30 | ) | (0.2 | ) | (128 | ) | (32.8 | ) | (300 | ) | (3.7 | ) | ||||||||||||
Total
income tax expense (benefit)
|
$ | (4,519 | ) | (41.6 | )% | $ | (561 | ) | (143.8 | )% | $ | 2,086 | 25.7 | % |
Pacific
Financial Corporation and Subsidiary
|
December
31, 2009 and 2008 and for the three years ended December 31,
2009
|
Notes to Consolidated Financial Statements,
Dollars in Thousands Except Per Share
Amounts
|
2009
|
2008
|
2007
|
||||||||||
Net
periodic pension cost:
|
||||||||||||
Service
Cost
|
$ | 173 | $ | 93 | $ | 91 | ||||||
Interest
Cost
|
98 | 48 | 41 | |||||||||
Amortization
of prior service cost
|
130 | 70 | 70 | |||||||||
Amortization
of net (gain)/loss
|
(10 | ) | (2 | ) | — | |||||||
Net
periodic pension cost
|
$ | 391 | $ | 209 | $ | 202 | ||||||
Weighted
average assumptions:
|
||||||||||||
Discount
rate
|
6.67 | % | 6.38 | % | 5.94 | % | ||||||
Rate
of compensation increases
|
0.00 | 3.00 | 5.00 |
2009
|
2008
|
|||||||
Change
in Benefit Obligation:
|
||||||||
Benefit
obligation at beginning of year
|
$ | 949 | $ | 808 | ||||
Service
cost
|
173 | 93 | ||||||
Interest
cost
|
98 | 48 | ||||||
Actuarial
gain
|
62 | — | ||||||
Benefit
obligation at end of year
|
$ | 1,282 | $ | 949 |
Pacific
Financial Corporation and Subsidiary
|
December
31, 2009 and 2008 and for the three years ended December 31,
2009
|
Notes to Consolidated Financial Statements,
Dollars in Thousands Except Per Share
Amounts
|
2009
|
2008
|
|||||||
Net
gain
|
$ | (152 | ) | $ | (25 | ) | ||
Prior
service cost
|
633 | 564 | ||||||
Total
recognized in accumulative other comprehensive loss
|
$ | 481 | $ | 538 |
2009
|
2008
|
|||||||
Projected
benefit obligation
|
$ | 1,282 | $ | 949 | ||||
Accumulated
benefit obligation
|
1,282 | 765 |
Estimated
future benefit payments as of December 31, 2009 are as
follows:
|
||||
2010
– 2014
|
$ | 0 | ||
2015
– 2018
|
792 |
2009
|
2008
|
|||||||
Commitments
to extend credit
|
$ | 71,435 | $ | 101,459 | ||||
Standby
letters of credit
|
1,164 | 1,519 |
Pacific
Financial Corporation and Subsidiary
|
December
31, 2009 and 2008 and for the three years ended December 31,
2009
|
Notes to Consolidated Financial Statements,
Dollars in Thousands Except Per Share
Amounts
|
Pacific
Financial Corporation and Subsidiary
|
December
31, 2009 and 2008 and for the three years ended December 31,
2009
|
Notes to Consolidated Financial Statements,
Dollars in Thousands Except Per Share
Amounts
|
Grant period ended
|
Expected
Life
|
Risk Free
Interest Rate
|
Expected
Volatility
|
Dividend
Yield
|
Average
Fair Value
|
||||||||||||
December
31, 2009
|
6.5
years
|
2.90 | % | 18.69 | % | 1.20 | % | $ | 0.24 | ||||||||
December
31, 2008
|
6.5
years
|
3.75 | % | 16.19 | % | 6.05 | % | $ | 0.83 | ||||||||
December
31, 2007
|
6.5
years
|
4.59 | % | 15.66 | % | 4.92 | % | $ | 1.54 |
2009
|
2008
|
2007
|
||||||||||||||||||||||
Weighted
|
Weighted
|
Weighted
|
||||||||||||||||||||||
Average
|
Average
|
Average
|
||||||||||||||||||||||
Exercise
|
Exercise
|
Exercise
|
||||||||||||||||||||||
Shares
|
Price
|
Shares
|
Price
|
Shares
|
Price
|
|||||||||||||||||||
Outstanding
at beginning of year
|
684,527 | $ | 12.58 | 689,868 | $ | 12.55 | 769,702 | $ | 12.45 | |||||||||||||||
Granted
|
213,750 | 7.00 | 8,250 | 11.27 | 106,975 | 13.93 | ||||||||||||||||||
Exercised
|
— | — | (7,321 | ) | 7.93 | (81,429 | ) | 10.43 | ||||||||||||||||
Expired
|
(35,310 | ) | 12.27 | — | — | (1,870 | ) | 5.35 | ||||||||||||||||
Forfeited
|
(42,130 | ) | 13.76 | (6,270 | ) | 12.42 | (103,510 | ) | 15.09 | |||||||||||||||
Outstanding
at end of year
|
820,837 | $ | 11.08 | 684,527 | $ | 12.58 | 689,868 | $ | 12.55 | |||||||||||||||
Exercisable
at end of year
|
529,922 | $ | 12.35 | 557,587 | $ | 12.32 | 495,985 | $ | 12.24 |
Pacific
Financial Corporation and Subsidiary
|
December
31, 2009 and 2008 and for the three years ended December 31,
2009
|
Notes to Consolidated Financial Statements,
Dollars in Thousands Except Per Share
Amounts
|
2009
|
2008
|
|||||||||||||||
Shares
|
Weighted
Average Fair
Value
|
Shares
|
Weighted
Average Fair
Value
|
|||||||||||||
Non-vested
beginning of period
|
126,940 | $ | 1.62 | 193,884 | $ | 1.80 | ||||||||||
Granted
|
213,750 | 0.24 | 8,250 | 0.83 | ||||||||||||
Vested
|
(30,635 | ) | 1.74 | (73,984 | ) | 2.02 | ||||||||||
Forfeited
|
(19,140 | ) | 1.50 | (1,210 | ) | 1.85 | ||||||||||
Non-vested
end of period
|
290,915 | $ | 0.60 | 126,940 | $ | 1.62 |
Options Outstanding
|
Options Exercisable
|
|||||||||||||||||||||||
Range of
exercise prices
|
Number
|
|
Weighted
average
remaining
contractual
life (years)
|
Weighted
average
exercise
price
|
Number
|
Weighted
average
remaining
contractual
life (years)
|
Weighted
average
exercise
price
|
|||||||||||||||||
0.00
– 11.10
|
476,867 | 5.2 | $ | 8.79 | 263,117 | 1.5 | $ | 10.25 | ||||||||||||||||
11.11
– 12.49
|
47,300 | 6.0 | 11.77 | 28,380 | 4.8 | 11.64 | ||||||||||||||||||
12.50
– 14.74
|
163,075 | 5.9 | 14.22 | 109,670 | 5.4 | 14.26 | ||||||||||||||||||
14.75
– 16.00
|
133,595 | 5.0 | 15.18 | 128,755 | 4.9 | 15.18 | ||||||||||||||||||
820,837 | 5.4 | $ | 11.08 | 529,922 | 3.3 | $ | 12.35 |
Pacific
Financial Corporation and Subsidiary
|
December
31, 2009 and 2008 and for the three years ended December 31,
2009
|
Notes to Consolidated Financial Statements,
Dollars in Thousands Except Per Share
Amounts
|
To be Well
|
||||||||||||||||||||||||
Capitalized
|
||||||||||||||||||||||||
Under Prompt
|
||||||||||||||||||||||||
Capital Adequacy
|
Corrective Action
|
|||||||||||||||||||||||
Actual
|
Purposes
|
Provisions
|
||||||||||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||||||||||||
December
31, 2009
|
||||||||||||||||||||||||
Tier
1 capital (to average assets):
|
||||||||||||||||||||||||
Company
|
$ | 59,263 | 9.06 | % | $ | 26,170 | 4.00 | % |
NA
|
NA
|
||||||||||||||
Bank
|
59,055 | 9.03 | 26,148 | 4.00 | $ | 32,685 | 5.00 | % | ||||||||||||||||
Tier
1 capital (to risk-weighted assets):
|
||||||||||||||||||||||||
Company
|
59,263 | 11.84 | 20,022 | 4.00 |
NA
|
NA
|
||||||||||||||||||
Bank
|
59,055 | 11.81 | 20,009 | 4.00 | 30,014 | 6.00 | ||||||||||||||||||
Total
capital (to risk-weighted assets):
|
||||||||||||||||||||||||
Company
|
65,579 | 13.10 | 40,043 | 8.00 |
NA
|
NA
|
||||||||||||||||||
Bank
|
65,368 | 13.07 | 40,018 | 8.00 | 50,023 | 10.00 | ||||||||||||||||||
December
31, 2008
|
||||||||||||||||||||||||
Tier
1 capital (to average assets):
|
||||||||||||||||||||||||
Company
|
$ | 53,011 | 8.87 | % | $ | 23,905 | 4.00 | % |
NA
|
NA
|
||||||||||||||
Bank
|
52,181 | 8.75 | 23,858 | 4.00 | 29,823 | 5.00 | % | |||||||||||||||||
Tier
1 capital (to risk-weighted assets):
|
||||||||||||||||||||||||
Company
|
53,011 | 10.54 | 20,117 | 4.00 |
NA
|
NA
|
||||||||||||||||||
Bank
|
52,181 | 10.40 | 20,068 | 4.00 | 30,106 | 6.00 | ||||||||||||||||||
Total
capital (to risk-weighted assets):
|
||||||||||||||||||||||||
Company
|
59,315 | 11.79 | 40,233 | 8.00 |
NA
|
NA
|
||||||||||||||||||
Bank
|
58,470 | 11.65 | 40,137 | 8.00 | 50,177 | 10.00 |
Pacific
Financial Corporation and Subsidiary
|
December
31, 2009 and 2008 and for the three years ended December 31,
2009
|
Notes to Consolidated Financial Statements,
Dollars in Thousands Except Per Share
Amounts
|
Pacific
Financial Corporation and Subsidiary
|
December
31, 2009 and 2008 and for the three years ended December 31,
2009
|
Notes to Consolidated Financial Statements,
Dollars in Thousands Except Per Share
Amounts
|
2009
|
2008
|
|||||||||||||||
Carrying
|
Fair
|
Carrying
|
Fair
|
|||||||||||||
Amount
|
Value
|
Amount
|
Value
|
|||||||||||||
Financial
Assets
|
||||||||||||||||
Cash
and due from banks, interest-bearing
|
||||||||||||||||
deposits
in banks, and federal funds sold
|
$ | 52,904 | $ | 52,904 | $ | 17,539 | $ | 17,539 | ||||||||
Securities
available for sale
|
53,677 | 53,677 | 49,493 | 49,493 | ||||||||||||
Securities
held to maturity
|
7,449 | 7,594 | 6,386 | 6,418 | ||||||||||||
Loans
held for sale
|
12,389 | 12,389 | 11,486 | 11,752 | ||||||||||||
Loans,
net
|
471,154 | 397,151 | 478,695 | 440,597 | ||||||||||||
Financial
Liabilities
|
||||||||||||||||
Deposits
|
$ | 567,695 | $ | 569,391 | $ | 511,307 | $ | 512,926 | ||||||||
Short-term
borrowings
|
4,500 | 4,601 | 23,500 | 23,779 | ||||||||||||
Long-term
borrowings
|
21,000 | 21,554 | 22,500 | 23,033 | ||||||||||||
Junior
subordinated debentures
|
13,403 | 6,412 | 13,403 | 7,113 | ||||||||||||
Secured
borrowings
|
977 | 977 | 1,354 | 1,354 |
Pacific
Financial Corporation and Subsidiary
|
December
31, 2009 and 2008 and for the three years ended December 31,
2009
|
Notes to Consolidated Financial Statements,
Dollars in Thousands Except Per Share
Amounts
|
Readily
|
Significant
|
|||||||||||||||
Available
|
Observable
|
Unobservable
|
||||||||||||||
Market Prices
|
Market Prices
|
Inputs
|
||||||||||||||
December 31, 2009
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Securities
available-for-sale
|
||||||||||||||||
U.S.
Government securities
|
$ | — | $ | 973 | $ | — | $ | 973 | ||||||||
State
and municipal securities
|
— | 20,487 | 1,593 | 22,080 | ||||||||||||
Mortgage-backed
securities
|
— | 25,624 | — | 25,624 | ||||||||||||
Mutual
funds
|
5,000 | — | — | 5,000 | ||||||||||||
Total
|
$ | 5,000 | $ | 47,084 | $ | 1,593 | $ | 53,677 | ||||||||
December
31, 2008
|
||||||||||||||||
Securities
available-for-sale
|
||||||||||||||||
U.S.
Government securities
|
$ | — | $ | 1,759 | $ | — | $ | 1,759 | ||||||||
State
and municipal securities
|
— | 19,584 | — | 19,584 | ||||||||||||
Mortgage-backed
securities
|
— | 27,205 | — | 27,205 | ||||||||||||
Corporate
securities
|
— | 945 | — | 945 | ||||||||||||
Total
|
$ | — | $ | 49,493 | $ | — | $ | 49,493 |
Balance
beginning of year
|
$ | — | ||
Transfers
in to Level 3
|
1,593 | |||
Balance
end of year
|
$ | 1,593 |
Pacific
Financial Corporation and Subsidiary
|
December
31, 2009 and 2008 and for the three years ended December 31,
2009
|
Notes to Consolidated Financial Statements,
Dollars in Thousands Except Per Share
Amounts
|
Significant
|
||||||||||||||||
Readily Available
|
Observable
|
Unobservable
|
||||||||||||||
Market Prices
|
Market Prices
|
Inputs
|
||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
December
31, 2009
|
||||||||||||||||
Loans
held for sale
|
$ | — | $ | 12,389 | $ | — | $ | 12,389 | ||||||||
Impaired
loans
|
$ | — | $ | — | $ | 7,987 | $ | 7,987 | ||||||||
OREO
|
$ | — | $ | — | $ | 7,285 | $ | 7,285 | ||||||||
December
31, 2008
|
||||||||||||||||
Impaired
loans
|
$ | — | $ | — | $ | 9,532 | $ | 9,532 | ||||||||
OREO
|
$ | — | $ | — | $ | 6,810 | $ | 6,810 |
Pacific
Financial Corporation and Subsidiary
|
December
31, 2009 and 2008 and for the three years ended December 31,
2009
|
Notes to Consolidated Financial Statements,
Dollars in Thousands Except Per Share
Amounts
|
Net Income (Loss)
|
Shares
|
Per Share
|
||||||||||
(Numerator)
|
(Denominator)
|
Amount
|
||||||||||
Year
Ended December 31, 2009
|
||||||||||||
Basic
earnings (loss) per share:
|
$ | (6,338 | ) | 8,539,237 | $ | (0.74 | ) | |||||
Effect
of dilutive securities:
|
— | — | — | |||||||||
Diluted
earnings (loss) per share:
|
$ | (6,338 | ) | 8,539,237 | $ | (0.74 | ) | |||||
Year
Ended December 31, 2008
|
||||||||||||
Basic
earnings per share:
|
$ | 951 | 7,311,611 | $ | 0.13 | |||||||
Effect
of dilutive securities:
|
— | 16,557 | — | |||||||||
Diluted
earnings per share:
|
$ | 951 | 7,328,168 | $ | 0.13 | |||||||
Year
Ended December 31, 2007
|
||||||||||||
Basic
earnings per share:
|
$ | 6,031 | 7,239,323 | $ | 0.83 | |||||||
Effect
of dilutive securities:
|
— | 95,523 | (0.01 | ) | ||||||||
Diluted
earnings per share:
|
$ | 6,031 | 7,334,846 | $ | 0.82 |
Condensed
Balance Sheets - December 31,
|
||||||||
2009
|
2008
|
|||||||
Assets
|
||||||||
Cash
|
$ | 705 | $ | 513 | ||||
Investment
in the Bank
|
70,441 | 62,244 | ||||||
Due
from the Bank
|
— | 785 | ||||||
Other
assets
|
415 | 407 | ||||||
Total
assets
|
$ | 71,561 | $ | 63,949 | ||||
Liabilities
and Shareholders’ Equity
|
||||||||
Dividends
payable
|
$ | — | $ | 333 | ||||
Junior
subordinated debentures
|
13,403 | 13,403 | ||||||
Due
to the Bank
|
106 | — | ||||||
Other
liabilities
|
403 | 139 | ||||||
Shareholders’
equity
|
57,649 | 50,074 | ||||||
Total
liabilities and shareholders’ equity
|
$ | 71,561 | $ | 63,949 |
Pacific
Financial Corporation and Subsidiary
|
December
31, 2009 and 2008 and for the three years ended December 31,
2009
|
Notes to Consolidated Financial Statements,
Dollars in Thousands Except Per Share
Amounts
|
2009
|
2008
|
2007
|
||||||||||
Dividend
Income from the Bank
|
$ | — | $ | 900 | $ | 4,700 | ||||||
Other
Income
|
17 | 27 | 27 | |||||||||
Total
Income
|
17 | 927 | 4,727 | |||||||||
Expenses
|
(835 | ) | (1,066 | ) | (1,236 | ) | ||||||
Income
(loss) before income tax benefit
|
(818 | ) | (139 | ) | 3,491 | |||||||
Income
Tax Benefit
|
— | — | — | |||||||||
Income
(loss) before equity in undistributed income of the Bank
|
(818 | ) | (139 | ) | 3,491 | |||||||
Equity
in Undistributed Income of the Bank
|
(5,520 | ) | 1,090 | 2,540 | ||||||||
Net
income (loss)
|
$ | (6,338 | ) | $ | 951 | $ | 6,031 |
Condensed
Statements of Cash Flows - Years Ended December 31,
|
||||||||||||
2009
|
2008
|
2007
|
||||||||||
Operating
Activities
|
||||||||||||
Net
income (loss)
|
$ | (6,338 | ) | $ | 951 | $ | 6,031 | |||||
Adjustments
to reconcile net income to net cash provided by (used in) operating
activities:
|
||||||||||||
Equity
in undistributed income of subsidiary
|
5,520 | (1,090 | ) | (2,540 | ) | |||||||
Net
change in other assets
|
777 | (4 | ) | — | ||||||||
Net
change in other liabilities
|
370 | (3 | ) | 1 | ||||||||
Other
- net
|
54 | 87 | 97 | |||||||||
Net
cash provided by (used in) operating activities
|
383 | (59 | ) | 3,589 | ||||||||
Financing
Activities
|
||||||||||||
Proceeds
from junior subordinated debentures
|
— | — | — | |||||||||
Common
stock issued
|
12,394 | 624 | 1,269 | |||||||||
Repurchase
and retirement of common stock
|
— | (26 | ) | (219 | ) | |||||||
Dividends
paid
|
(12,585 | ) | (4,955 | ) | (4,893 | ) | ||||||
Net
cash used in financing activities
|
(191 | ) | (4,357 | ) | (3,843 | ) | ||||||
Net
increase (decrease) in cash
|
192 | (4,416 | ) | (254 | ) | |||||||
Cash
|
||||||||||||
Beginning
of year
|
513 | 4,929 | 5,183 | |||||||||
End
of year
|
$ | 705 | $ | 513 | $ | 4,929 |
Pacific
Financial Corporation and Subsidiary
|
December
31, 2009 and 2008 and for the three years ended December 31,
2009
|
Notes to Consolidated Financial Statements,
Dollars in Thousands Except Per Share
Amounts
|
Quarterly
Data (Unaudited)
|
||||||||||||||||
First
|
Second
|
Third
|
Fourth
|
|||||||||||||
Year
Ended December 31, 2009
|
Quarter
|
Quarter
|
Quarter
|
Quarter
|
||||||||||||
Interest
income
|
$ | 8,284 | $ | 8,194 | $ | 8,302 | $ | 8,040 | ||||||||
Interest
expense
|
2,816 | 3,044 | 2,762 | 2,445 | ||||||||||||
Net
interest income
|
5,468 | 5,150 | 5,540 | 5,595 | ||||||||||||
Provision
for credit losses
|
1,787 | 3,587 | 3,170 | 1,400 | ||||||||||||
Non-interest
income
|
2,275 | 2,254 | 1,988 | 508 | ||||||||||||
Non-interest
expenses
|
6,622 | 8,130 | 7,069 | 7,870 | ||||||||||||
Income
(loss) before income taxes
|
(666 | ) | (4,313 | ) | (2,711 | ) | (3,167 | ) | ||||||||
Income
taxes (benefit)
|
(352 | ) | (2,048 | ) | (952 | ) | (1,167 | ) | ||||||||
Net
income (loss)
|
$ | (314 | ) | $ | (2,265 | ) | $ | (1,759 | ) | $ | (2,000 | ) | ||||
Earnings
(loss) per common share:
|
||||||||||||||||
Basic
|
$ | (.04 | ) | $ | (.31 | ) | $ | (.19 | ) | $ | (.20 | ) | ||||
Diluted
|
(.04 | ) | (.31 | ) | (.19 | ) | (.20 | ) | ||||||||
Year
Ended December 31, 2008
|
||||||||||||||||
Interest
income
|
$ | 8,937 | $ | 8,279 | $ | 8,460 | $ | 8,037 | ||||||||
Interest
expense
|
3,492 | 2,777 | 2,784 | 2,945 | ||||||||||||
Net
interest income
|
5,445 | 5,502 | 5,676 | 5,092 | ||||||||||||
Provision
for credit losses
|
126 | 2,228 | 600 | 1,837 | ||||||||||||
Non-interest
income
|
1,210 | 1,292 | 896 | 1,659 | ||||||||||||
Non-interest
expenses
|
5,157 | 5,505 | 5,371 | 5,558 | ||||||||||||
Income
(loss) before income taxes
|
1,372 | (939 | ) | 601 | (644 | ) | ||||||||||
Income
taxes (benefit)
|
324 | (266 | ) | 14 | (633 | ) | ||||||||||
Net
income (loss)
|
$ | 1,048 | $ | (673 | ) | $ | 587 | $ | (11 | ) | ||||||
Earnings
(loss) per common share:
|
||||||||||||||||
Basic
|
$ | .15 | $ | (.09 | ) | $ | .08 | $ | (.01 | ) | ||||||
Diluted
|
.15 | (.09 | ) | .08 | (.01 | ) |
PACIFIC
FINANCIAL CORPORATION
|
|
(Registrant)
|
/s/ Dennis A. Long
|
/s/ Denise Portmann
|
|
Dennis
A. Long, President and CEO
|
Denise
Portmann, CFO
|
Principal
Executive Officer and Director
|
Principal
Financial and Accounting Officer
|
|
/s/ Dennis A. Long
|
/s/ Denise Portmann
|
|
Dennis
A. Long, President and CEO and Director
|
Denise
Portmann, CFO
|
|
Remaining
Directors
|
||
/s/ Gary C. Forcum
|
/s/ G. Dennis Archer
|
|
Gary
C. Forcum (Chairman of the Board)
|
G.
Dennis Archer
|
|
/s/ Randy W. Rognlin
|
/s/ Edwin Ketel
|
|
Randy
W. Rognlin
|
Edwin
Ketel
|
|
/s/ Randy Rust
|
/s/ John Ferlin
|
|
Randy
Rust
|
John
Ferlin
|
|
/s/ Douglas M. Schermer
|
/s/ Susan C. Freese
|
|
Douglas
M. Schermer
|
|
Susan
C. Freese
|
EXHIBIT NO.
|
EXHIBIT
|
|
3.1
|
Restated
Articles of Incorporation. Incorporated by reference to Exhibit 3.2 to the
Company's Quarterly Report on Form 10-Q for the quarter ended June 30,
2000.
|
|
3.2
|
Bylaws.
Incorporated by reference to Exhibit 2b to Form 8-A filed by the Company
and declared effective on March 7, 2000 (Registration No.
000-29329).
|
|
4.1
|
Form
of Warrant to purchase shares of Common Stock issued to Ithan Creek Master
Investors (Cayman) L.P. (the Purchaser). Incorporated by
reference to Exhibit 4.1 to the Company's Current Report on Form 8-K dated
August 25, 2009 (the 2009 8-K).
|
|
4.2
|
Form
of Warrant to purchase shares of Common Stock issued to investors in 2009 private
placement other than the Purchaser referred to in Exhibit 4.1.
|
|
10.1
|
Amended
and Restated Employment Agreement with Dennis A. Long dated December 29,
2008. Incorporated by reference to Exhibit 10.1 of the
Company's Annual Report on Form 10-K for the year ended December 31, 2008
(the 2008 10-K).*
|
|
10.2
|
Amended
and Restated Employment Agreement with John Van Dijk dated December 29,
2008. Incorporated by reference to Exhibit 10.2 to the 2008
10-K.*
|
|
10.3
|
Amended
and Restated Employment Agreement with Bruce D. MacNaughton dated December
29, 2008. Incorporated by reference to Exhibit 10.3 to the 2008
10-K.*
|
|
10.4
|
Amended
and Restated Employment Agreement with Denise Portmann dated December 29,
2008. Incorporated by reference to Exhibit 10.4 to the 2008
10-K.*
|
|
10.5
|
Bank
of the Pacific Incentive Stock Option Plan. Incorporated by
reference to Exhibit 10.7 to the Company's Annual Report on Form 10-K for
the year ended December 31, 1999, (the 1999 10-K).*
|
|
10.6
|
The
Bank of Grays Harbor Incentive Stock Option Plan. Incorporated
by reference to Exhibit 10.8 of the 1999 10-K.*
|
|
10.7
|
2000
Stock Incentive Compensation Plan, as amended (the 2000
Plan). Incorporated by reference to Exhibit 10.1 to the
Company's Quarterly Report on Form 10-Q for the quarter ended March 31,
2007 (the March 2007 10-Q).*
|
|
10.8
|
Forms
of stock option agreements under the 2000 Plan. Incorporated by
reference to Exhibits 10.2 and 10.3 to the March 2007
10-Q.*
|
|
10.9
|
The
Bank of Grays Harbor Employee Deferred Compensation
Plan. Incorporated by reference to Exhibit 10.10 to the
Company's Annual Report on Form 10-K for the year ended December 31,
2000.*
|
|
10.10
|
Supplemental
Executive Retirement Plan effective January 1,
2007. Incorporated by reference to Exhibit 10.1 to the
Company's Current Report on Form 8-K dated March 13, 2008 (the March 2008
8-K).*
|
|
10.11
|
Individual
Participation Agreement (SERP) dated March 13, 2008, between the Company
and Dennis A. Long. Incorporated by reference to Exhibit 10.2
to the March 2008 8-K.*
|
|
10.12
|
Individual
Participation Agreement (SERP) dated March 13, 2008, between the Company
and John Van Dijk. Incorporated by reference to Exhibit 10.3 to
the March 2008 8-K.*
|
|
10.13
|
Individual
Participation Agreement (SERP) dated March 13, 2008, between the Company
and Bruce MacNaughton. Incorporated by reference to Exhibit
10.4 to the March 2008 8-K.*
|
|
10.14
|
Individual
Participation Agreement (SERP) dated March 13, 2008, between the Company
and Denise Portmann. Incorporated by reference to Exhibit 10.5
to the March 2008 8-K.*
|
|
10.15
|
Securities
Purchase Agreement, dated August 25, 2009, between the Company and the
Purchaser. Incorporated by reference to Exhibit 10.1 to the
2009 8-K.
|
|
10.16
|
Registration
Rights Agreement, dated August 25, 2009, between the Company and the
Purchaser. Incorporated by reference to Exhibit 10.2 to the
2009 8-K.
|
|
21
|
Subsidiaries
of Registrant.
|
23.1
|
Consent
of Deloitte & Touche, LLP, Independent Registered Public Accounting
Firm
|
|
31.1
|
Certification
of Chief Executive Officer Pursuant to Rule 13a-14(a)
|
|
31.2
|
Certification
of Chief Financial Officer Pursuant to Rule 13a-14(a)
|
|
32
|
Certification
Pursuant to 18 U.S.C. 1350
|