S
|
QUARTERLY REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
£
|
TRANSITION REPORT PURSUANT TO
SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
Pennsylvania
|
000-53297
|
51-0661129
|
(State
or Other Jurisdiction of Incorporation)
|
(Commission
File Number)
|
(IRS
Employer Identification No)
|
31 E. Main St., Ephrata, PA
|
17522-0457
|
||
(Address
of principal executive offices)
|
(Zip
Code)
|
Large
Accelerated filer £
|
Accelerated
filer £
|
|
Non-accelerated
filer £ (Do
not check if a smaller reporting company)
|
Smaller
reporting company S
|
Part
I – FINANCIAL INFORMATION
|
||
Item
1.
|
Financial
Statements
|
|
3
|
||
4
|
||
5
|
||
6
|
||
7-11
|
||
Item
2.
|
12-31
|
|
Item
3.
|
32-35
|
|
Item
4.
|
35
|
|
Item
4T.
|
35
|
|
|
||
Part
II – OTHER INFORMATION
|
36
|
|
Item
1.
|
36
|
|
Item
1A.
|
36
|
|
Item
2.
|
36
|
|
Item
3.
|
36
|
|
Item
4.
|
36
|
|
Item
5.
|
36
|
|
Item
6.
|
37
|
|
38
|
||
39
|
March
31,
|
December
31,
|
March
31,
|
||||||||||
2009
|
2008
|
2008
|
||||||||||
(Dollars
in thousands, except share data)
|
$ | $ | $ | |||||||||
ASSETS
|
||||||||||||
Cash
and due from banks
|
13,792 | 19,286 | 15,147 | |||||||||
Intererest-bearing
deposits in other banks
|
111 | 106 | 95 | |||||||||
Federal
funds sold
|
- | - | 7,200 | |||||||||
Total
cash and cash equivalents
|
13,903 | 19,392 | 22,442 | |||||||||
Securities
available for sale (at fair value)
|
230,660 | 214,421 | 211,323 | |||||||||
Loans
held for sale
|
751 | 245 | 50 | |||||||||
Loans
(net of unearned income)
|
411,029 | 411,954 | 386,616 | |||||||||
Less:
Allowance for loan losses
|
4,261 | 4,203 | 3,914 | |||||||||
Net
loans
|
406,768 | 407,751 | 382,702 | |||||||||
Premises
and equipment
|
19,904 | 19,913 | 17,889 | |||||||||
Regulatory
stock
|
4,915 | 4,915 | 4,539 | |||||||||
Bank
owned life insurance
|
14,703 | 14,512 | 14,029 | |||||||||
Other
assets
|
8,645 | 7,274 | 7,465 | |||||||||
Total
assets
|
700,249 | 688,423 | 660,439 | |||||||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||||||
Liabilities:
|
||||||||||||
Deposits:
|
||||||||||||
Noninterest-bearing
|
108,725 | 114,262 | 103,129 | |||||||||
Interest-bearing
|
426,281 | 396,850 | 390,929 | |||||||||
Total
deposits
|
535,006 | 511,112 | 494,058 | |||||||||
Short-term
borrowings
|
965 | 11,800 | - | |||||||||
Long-term
debt
|
92,000 | 92,000 | 92,000 | |||||||||
Other
liabilities
|
5,579 | 5,466 | 4,495 | |||||||||
Total
liabilities
|
633,550 | 620,378 | 590,553 | |||||||||
Stockholders'
equity:
|
||||||||||||
Common
stock, par value $0.20;
|
||||||||||||
Shares: Authorized
12,000,000
|
||||||||||||
Issued
2,869,557 and Outstanding 2,835,040
|
||||||||||||
(Issued
2,869,557 and Outstanding 2,844,195 as of 12-31-08)
|
||||||||||||
(Issued
3,000,000 and Outstanding 2,865,311 as of 3-31-08)
|
574 | 574 | 600 | |||||||||
Capital
surplus
|
4,447 | 4,457 | 4,486 | |||||||||
Retained
earnings
|
64,832 | 64,629 | 68,666 | |||||||||
Accumulated
other comprehensive loss, net of tax
|
(2,268 | ) | (963 | ) | 285 | |||||||
Less:
Treasury stock shares at cost 34,517 (25,362 shares as of 12-31-08 and
134,689 shares as of 3-31-08)
|
(886 | ) | (652 | ) | (4,151 | ) | ||||||
Total
stockholders' equity
|
66,699 | 68,045 | 69,886 | |||||||||
Total
liabilities and stockholders' equity
|
700,249 | 688,423 | 660,439 |
Three
Months
|
||||||||
2009
|
2008
|
|||||||
(Dollars
in thousands, except share data)
|
$ | $ | ||||||
Interest
and dividend income:
|
||||||||
Interest
and fees on loans
|
5,659 | 6,056 | ||||||
Interest
on securities available for sale
|
||||||||
Taxable
|
2,091 | 1,781 | ||||||
Tax-exempt
|
616 | 646 | ||||||
Interest
on federal funds sold
|
- | 11 | ||||||
Interest
on deposits at other banks
|
- | 2 | ||||||
Dividend
income
|
40 | 89 | ||||||
Total
interest and dividend income
|
8,406 | 8,585 | ||||||
Interest
expense:
|
||||||||
Interest
on deposits
|
2,304 | 2,763 | ||||||
Interest
on short-term borrowings
|
7 | 12 | ||||||
Interest
on long-term debt
|
963 | 977 | ||||||
Total
interest expense
|
3,274 | 3,752 | ||||||
Net
interest income
|
5,132 | 4,833 | ||||||
Provision
for loan losses
|
150 | 199 | ||||||
Net
interest income after provision for loan losses
|
4,982 | 4,634 | ||||||
Other
income:
|
||||||||
Trust
and investment services income
|
217 | 274 | ||||||
Service
fees
|
625 | 431 | ||||||
Commissions
|
321 | 306 | ||||||
Gains
on securities transactions, net
|
68 | 26 | ||||||
Gains
on sale of mortgages
|
67 | 38 | ||||||
Earnings
on bank owned life insurance
|
157 | 147 | ||||||
Other
|
117 | 134 | ||||||
Total
other income
|
1,572 | 1,356 | ||||||
Operating
expenses:
|
||||||||
Salaries
and employee benefits
|
2,864 | 2,638 | ||||||
Occupancy
|
350 | 302 | ||||||
Equipment
|
207 | 232 | ||||||
Advertising
& marketing
|
103 | 81 | ||||||
Computer
software & data processing
|
370 | 388 | ||||||
Bank
shares tax
|
181 | 139 | ||||||
Professional
services
|
491 | 254 | ||||||
FDIC
Insurance
|
417 | 14 | ||||||
Other
|
452 | 356 | ||||||
Total
operating expenses
|
5,435 | 4,404 | ||||||
Income
before income taxes
|
1,119 | 1,586 | ||||||
Provision
for federal income taxes
|
38 | 191 | ||||||
Net
income
|
1,081 | 1,395 | ||||||
Earnings
per share of common stock
|
0.38 | 0.49 | ||||||
Cash
dividends paid per share
|
0.31 | 0.31 | ||||||
Weighted
average shares outstanding
|
2,836,955 | 2,862,244 |
Three
Months
|
||||||||
2009
|
2008
|
|||||||
(Dollars
in thousands)
|
$ | $ | ||||||
Net
income
|
1,081 | 1,395 | ||||||
Other
comprehensive income (loss) arising during the period
|
(1,909 | ) | 733 | |||||
Reclassification
adjustment for gains realized in income
|
(68 | ) | (26 | ) | ||||
Other
comprehensive income (loss) before tax
|
(1,977 | ) | 707 | |||||
Income
taxes (benefit) related to comprehensive income (loss)
|
(672 | ) | 240 | |||||
Other
comprehensive income (loss)
|
(1,305 | ) | 467 | |||||
Comprehensive
income (loss)
|
(224 | ) | 1,862 |
Three
Months Ended March 31,
|
||||||||
2009
|
2008
|
|||||||
(DOLLARS
IN THOUSANDS)
|
$
|
$
|
||||||
Cash
flows from operating activities:
|
||||||||
Net
income
|
1,081 | 1,395 | ||||||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||
Net
amortization of securities and loan fees
|
61 | 59 | ||||||
Increase
in interest receivable
|
(57 | ) | (287 | ) | ||||
Increase
(decrease) in interest payable
|
(26 | ) | 129 | |||||
Provision
for loan losses
|
150 | 199 | ||||||
Gains
on securities transactions
|
(68 | ) | (26 | ) | ||||
Gains
on sale of mortgages
|
(67 | ) | (39 | ) | ||||
Loans
originated for sale
|
(690 | ) | (488 | ) | ||||
Proceeds
from sales of loans
|
251 | 842 | ||||||
Earnings
on bank owned life insurance
|
(157 | ) | (141 | ) | ||||
Depreciation
of premises and equipment and amortization of software
|
316 | 289 | ||||||
Deferred
income tax
|
(551 | ) | (339 | ) | ||||
Other
assets and other liabilities, net
|
56 | (848 | ) | |||||
Net
cash provided by operating activities
|
299 | 745 | ||||||
Cash
flows from investing activities:
|
||||||||
Securities
available for sale:
|
||||||||
Proceeds
from maturities, calls, and repayments
|
10,713 | 15,754 | ||||||
Proceeds
from sales
|
2,794 | 4,441 | ||||||
Purchases
|
(31,724 | ) | (37,898 | ) | ||||
Proceeds
from sale of other real estate owned
|
- | 88 | ||||||
Purchase
of regulatory bank stock
|
- | (428 | ) | |||||
Purchase
of BOLI
|
(34 | ) | (11 | ) | ||||
Net
increase (decrease) in loans
|
840 | (1,571 | ) | |||||
Purchases
of premises and equipment
|
(256 | ) | (340 | ) | ||||
Purchase
of computer software
|
(58 | ) | (70 | ) | ||||
Net
cash used in investing activities
|
(17,725 | ) | (20,035 | ) | ||||
Cash
flows from financing activities:
|
||||||||
Net
increase in demand, NOW, and savings accounts
|
3,178 | 2,747 | ||||||
Net
increase in time deposits
|
20,716 | 12,585 | ||||||
Net
decrease in short term borrowings
|
(10,835 | ) | (100 | ) | ||||
Proceeds
from long-term debt
|
7,500 | 10,000 | ||||||
Repayments
of long-term debt
|
(7,500 | ) | - | |||||
Dividends
paid
|
(878 | ) | (887 | ) | ||||
Treasury
stock sold
|
89 | 90 | ||||||
Treasury
stock purchased
|
(333 | ) | - | |||||
Net
cash provided by financing activities
|
11,937 | 24,435 | ||||||
Net
increase (decrease) in cash and cash equivalents
|
(5,489 | ) | 5,145 | |||||
Cash
and cash equivalents at beginning of period
|
19,392 | 17,297 | ||||||
Cash
and cash equivalents at end of period
|
13,903 | 22,442 | ||||||
Supplemental
disclosures of cash flow information:
|
||||||||
Interest
paid
|
3,300 | 3,623 | ||||||
Income
taxes paid
|
210 | 300 |
1.
|
Basis
of Presentation
|
2.
|
Fair
Value Presentation
|
Level
I:
|
Quoted
prices are available in active markets for identical assets or liabilities
as of the reported date.
|
Level
II:
|
Pricing
inputs are other than the quoted prices in active markets, which are
either directly or indirectly observable as of the reported
date. The nature of these assets and liabilities includes items
for which quoted prices are available but traded less frequently and items
that are fair-valued using other financial instruments, the parameters of
which can be directly observed.
|
Level
III:
|
Assets
and liabilities that have little to no observable pricing as of the
reported date. These items do not have two-way markets and are
measured using management’s best estimate of fair value, where the inputs
into the determination of fair value require significant management
judgment or estimation.
|
Dollars
in Thousands
|
March
31, 2009
|
|||||||||||||||
Level
I
|
Level
II
|
Level
III
|
Total
|
|||||||||||||
Investment
securities Available for sale
|
$ | 2,819 | $ | 225,705 | $ | 2,136 | $ | 230,660 |
Dollars
in Thousands
|
December
31, 2008
|
|||||||||||||||
Level
I
|
Level
II
|
Level
III
|
Total
|
|||||||||||||
Investment
securities available for sale
|
$ | 2,763 | $ | 208,549 | $ | 3,109 | $ | 214,421 |
Dollars
in Thousands
|
March
31, 2008
|
|||||||||||||||
Level
I
|
Level
II
|
Level
III
|
Total
|
|||||||||||||
Investment
securities available for sale
|
$ | 2,816 | $ | 208,505 | $ | - | $ | 211,323 |
Dollars
in Thousands
|
Available-
|
|||
For-Sale
|
||||
Securities
|
||||
Balance,
January 1, 2009,
|
$ | 3,109 | ||
Total
gains or losses (realized/unrealized):
|
- | |||
Included
in earnings
|
- | |||
Included
in other comprehensive income
|
1,149 | |||
Purchases,
issuances, and settlements
|
176 | |||
Transfers
in and/or out of Level III
|
- | |||
Balance,
March 31, 2009
|
$ | 2,136 |
March
31, 2009
|
||||||||||||||||
Level
I
|
Level
II
|
Level
III
|
Total
|
|||||||||||||
Assets:
|
||||||||||||||||
Impaired
Loans
|
$ | - | $ | - | $ | 2,413 | $ | 2,413 | ||||||||
OREO
|
520 | - | - | 520 | ||||||||||||
Total
|
$ | 520 | $ | - | $ | 2,413 | $ | 2,933 |
December
31, 2008
|
||||||||||||||||
Level
I
|
Level
II
|
Level
III
|
Total
|
|||||||||||||
Assets:
|
||||||||||||||||
Impaired
Loans
|
$ | - | $ | - | $ | 2,444 | $ | 2,444 | ||||||||
OREO
|
520 | - | - | 520 | ||||||||||||
Total
|
$ | 520 | $ | - | $ | 2,444 | $ | 2,964 |
March
31, 2008
|
||||||||||||||||
Level
I
|
Level
II
|
Level
III
|
Total
|
|||||||||||||
Assets:
|
||||||||||||||||
Impaired
Loans
|
$ | - | $ | - | $ | 690 | $ | 690 | ||||||||
OREO
|
581 | - | - | 581 | ||||||||||||
Total
|
$ | 581 | $ | - | $ | 690 | $ | 1,271 |
3.
|
Commitments
and Contingent Liabilities
|
4.
|
Recently
Issued Accounting Standards
|
|
·
|
Monetary
and interest rate policies of the Federal Reserve Board
(“FRB”)
|
|
·
|
Economic
conditions
|
|
·
|
Political
changes and their impact on new laws and
regulations
|
|
·
|
Competitive
forces
|
|
·
|
Management’s
ability to mange credit risk, liquidity risk, interest rate risk, and fair
value risk
|
|
·
|
Operation,
legal, and reputation risk
|
|
·
|
The
risk that our analyses of these risks and forces could be incorrect and/or
that the strategies developed to address them could be
unsuccessful.
|
Key
Ratios
|
Three
Months Ended
|
|||||||
March
31,
|
||||||||
2009
|
2008
|
|||||||
Return
on Average Assets
|
0.64 | % | 0.87 | % | ||||
Return
on Average Equity
|
6.42 | % | 8.05 | % |
|
·
|
Net
interest income
|
|
·
|
Provision
for loan losses
|
|
·
|
Non-interest
income
|
|
·
|
Non-interest
expenses
|
|
·
|
Provision
for income taxes
|
Net
Interest Income
|
||||||||||||||||
(Dollars
in Thousands)
|
||||||||||||||||
Three
months Ended
|
||||||||||||||||
March
31,
|
||||||||||||||||
2009
|
2008
|
Increase/(Decrease)
|
||||||||||||||
$ | $ | $ | % | |||||||||||||
Total
interest income
|
8,406 | 8,585 | (179 | ) | (2.1 | ) | ||||||||||
Total
interest expense
|
3,274 | 3,752 | (478 | ) | (12.7 | ) | ||||||||||
Net
interest income
|
5,132 | 4,833 | 299 | 6.2 | ||||||||||||
Tax
equivalent adjustment
|
432 | 445 | (13 | ) | (2.9 | ) | ||||||||||
Net
interest income (fully taxable equivalent)
|
5,564 | 5,278 | 286 | 5.4 |
|
·
|
The
rates charged on interest-earning assets and paid on interest-bearing
liabilities
|
|
·
|
The
average balance of interest-earning assets and interest-bearing
liabilities
|
For
the Three Months Ended March 31,
|
||||||||||||||||||||||||
2009
|
2008
|
|||||||||||||||||||||||
(c)
|
(c)
|
|||||||||||||||||||||||
Average
|
Annualized
|
Average
|
Annualized
|
|||||||||||||||||||||
Balance
|
Interest
|
Yield/Rate
|
Balance
|
Interest
|
Yield/Rate
|
|||||||||||||||||||
$ | $ | % | $ | $ | % | |||||||||||||||||||
ASSETS
|
||||||||||||||||||||||||
Interest
earning assets:
|
||||||||||||||||||||||||
Federal
funds sold and interest on deposits at other banks
|
751 | 1 | 0.23 | 1,801 | 13 | 2.93 | ||||||||||||||||||
Securities
available for sale:
|
||||||||||||||||||||||||
Taxable
|
167,816 | 2,128 | 5.07 | 147,070 | 1,822 | 4.96 | ||||||||||||||||||
Tax-exempt
|
52,932 | 907 | 6.85 | 58,302 | 945 | 6.48 | ||||||||||||||||||
Total
securities (d)
|
220,748 | 3,035 | 5.50 | 205,372 | 2,767 | 5.39 | ||||||||||||||||||
Loans
(a)
|
411,821 | 5,799 | 5.66 | 386,156 | 6,197 | 6.44 | ||||||||||||||||||
Regulatory
stock
|
4,915 | 3 | 0.27 | 4,426 | 53 | 4.80 | ||||||||||||||||||
Total
interest earning assets
|
638,235 | 8,838 | 5.56 | 597,755 | 9,030 | 6.05 | ||||||||||||||||||
Non-interest
earning assets (d)
|
49,448 | 48,371 | ||||||||||||||||||||||
Total
assets
|
687,683 | 646,126 | ||||||||||||||||||||||
LIABILITIES
&STOCKHOLDERS' EQUITY
|
||||||||||||||||||||||||
Interest
bearing liabilities:
|
||||||||||||||||||||||||
Demand
deposits
|
93,936 | 180 | 0.78 | 100,975 | 377 | 1.50 | ||||||||||||||||||
Savings
deposits
|
75,338 | 48 | 0.26 | 68,481 | 86 | 0.51 | ||||||||||||||||||
Time
deposits
|
239,949 | 2,076 | 3.51 | 211,450 | 2,300 | 4.37 | ||||||||||||||||||
Borrowed
funds
|
97,886 | 970 | 4.02 | 90,657 | 989 | 4.39 | ||||||||||||||||||
Total
interest bearing liabilities
|
507,109 | 3,274 | 2.62 | 471,563 | 3,752 | 3.20 | ||||||||||||||||||
Non-interest
bearing liabilities:
|
||||||||||||||||||||||||
Demand
deposits
|
106,315 | 99,897 | ||||||||||||||||||||||
Other
|
5,949 | 4,942 | ||||||||||||||||||||||
Total
liabilities
|
619,373 | 576,402 | ||||||||||||||||||||||
Stockholders'
equity
|
68,310 | 69,724 | ||||||||||||||||||||||
Total
liabilities & stockholders' equity
|
687,683 | 646,126 | ||||||||||||||||||||||
Net
interest income (FTE)
|
5,564 | 5,278 | ||||||||||||||||||||||
Net
interest spread (b)
|
2.94 | 2.85 | ||||||||||||||||||||||
Effect
of non-interest bearing funds
|
0.54 | 0.68 | ||||||||||||||||||||||
Net
yield on interest earning assets (c)
|
3.48 | 3.53 |
|
·
|
Historical
loan loss experience by loan type
|
|
·
|
Concentrations
of credit risk
|
|
·
|
Credit
migration analysis
|
|
·
|
Volume
of delinquent and non-performing
loans
|
|
·
|
Loan
portfolio characteristics
|
|
·
|
Current
economic conditions
|
Three
Months Ended March 31,
|
Increase
(Decrease)
|
|||||||||||||||
2009
|
2008
|
|||||||||||||||
$
|
$
|
$
|
%
|
|||||||||||||
Trust
and investment services
|
217 | 274 | (57 | ) | (20.8 | ) | ||||||||||
Service
charges on deposit accounts
|
476 | 307 | 169 | 55.0 | ||||||||||||
Other
service charges and fees
|
149 | 124 | 25 | 20.2 | ||||||||||||
Commissions
|
321 | 306 | 15 | 4.9 | ||||||||||||
Gains
(losses) on securities transactions
|
68 | 26 | 42 |
>100.0
|
||||||||||||
Gain
on sale of mortgages
|
67 | 38 | 29 | 76.3 | ||||||||||||
Earnings
on bank owned life insurance
|
157 | 147 | 10 | 6.8 | ||||||||||||
Other
miscellaneous income
|
117 | 134 | (17 | ) | (12.7 | ) | ||||||||||
Total
other income
|
1,572 | 1,356 | 216 | 15.9 |
Three
Months Ended March 31,
|
Increase
(Decrease)
|
|||||||||||||||
2009
|
2008
|
|||||||||||||||
$
|
$
|
$ | % | |||||||||||||
Salaries
and employee benefits
|
2,864 | 2,638 | 226 | 8.6 | ||||||||||||
Occupancy
expenses
|
350 | 302 | 48 | 15.9 | ||||||||||||
Equipment
expenses
|
207 | 232 | (25 | ) | (10.8 | ) | ||||||||||
Advertising
& marketing expenses
|
103 | 81 | 22 | 27.2 | ||||||||||||
Computer
software & data processing expenses
|
370 | 388 | (18 | ) | (4.6 | ) | ||||||||||
Bank
shares tax
|
181 | 139 | 42 | 30.2 | ||||||||||||
Professional
services
|
491 | 254 | 237 | 93.3 | ||||||||||||
Other
operating expenses
|
869 | 370 | 499 |
>100.0
|
||||||||||||
Total
Operating Expenses
|
5,435 | 4,404 | 1,031 | 23.4 |
·
|
Depreciation
of bank buildings
|
·
|
Real
estate taxes and property insurance
|
·
|
Utilities
|
·
|
Building
repair and maintenance
|
|
·
|
Postage
|
|
·
|
Regulator
and tax assessments
|
|
·
|
Director
fees and expense
|
|
·
|
Travel
expense
|
|
·
|
General
supplies
|
|
·
|
Charitable
contributions
|
|
·
|
Delinquent
loan expenses
|
|
·
|
Performance
of the various instruments
|
|
·
|
Direction
of interest rates
|
|
·
|
Slope
of the yield curve
|
|
·
|
ALCO
positions as to liquidity, interest rate risk, and net portfolio
value
|
|
·
|
State
of the economy and credit risk
|
Period
Ending
|
||||||||||||||||||||||||
March
31, 2009
|
December
31, 2008
|
March
31, 2008
|
||||||||||||||||||||||
$
|
%
|
$
|
%
|
$
|
%
|
|||||||||||||||||||
U.S.
treasuries & governmental agencies
|
56,584 | 24.6 | 47,064 | 22.0 | 47,468 | 22.5 | ||||||||||||||||||
Mortgage-backed
securities
|
48,927 | 21.2 | 46,093 | 21.5 | 35,362 | 16.7 | ||||||||||||||||||
Collateralized
mortgage obligations
|
41,120 | 17.8 | 36,049 | 16.8 | 35,232 | 16.7 | ||||||||||||||||||
Private
collateralized mortgage obligations
|
14,776 | 6.4 | 18,294 | 8.5 | 18,221 | 8.6 | ||||||||||||||||||
Corporate
debt securities
|
12,648 | 5.5 | 11,637 | 5.4 | 15,466 | 7.3 | ||||||||||||||||||
Obligations
of states and political subdivisions
|
53,786 | 23.3 | 52,521 | 24.5 | 56,235 | 26.6 | ||||||||||||||||||
Equity
securities
|
2,819 | 1.2 | 2,763 | 1.3 | 3,339 | 1.6 | ||||||||||||||||||
Total
securities
|
230,660 | 100.0 | 214,421 | 100.0 | 211,323 | 100.0 |
March
31,
|
December
31,
|
March
31,
|
||||||||||
2009
|
2008
|
2008
|
||||||||||
$
|
$
|
$
|
||||||||||
Real
Estate
|
||||||||||||
Residential
(a)
|
160,807 | 163,076 | 153,808 | |||||||||
Commercial
|
145,681 | 152,942 | 130,120 | |||||||||
Construction
|
19,603 | 13,540 | 15,980 | |||||||||
Commercial
|
74,634 | 71,765 | 76,373 | |||||||||
Consumer
|
10,614 | 10,887 | 10,660 | |||||||||
411,339 | 412,210 | 386,941 | ||||||||||
Less:
|
||||||||||||
Deferred
loan fees, net
|
310 | 256 | 325 | |||||||||
Allowance
for loan losses
|
4,261 | 4,203 | 3,914 | |||||||||
Total
net loans
|
406,768 | 407,751 | 382,702 |
(a)
|
Residential
real estate loans do not include mortgage loans sold to and serviced for
Fannie Mae. These loans totaled $11,304,000 as March 31,
2009, $11,058,000 as of December 31, 2008, and $10,257,000 as of
March 31, 2008.
|
·
|
Non-accrual
loans
|
·
|
Loans
past due 90 days or more and still
accruing
|
·
|
Troubled
debt restructurings
|
·
|
Other
real estate owned
|
March
31,
|
December
31,
|
March
31,
|
||||||||||
2009
|
2008
|
2008
|
||||||||||
$
|
$
|
$
|
||||||||||
Non-accrual
loans
|
1,199 | 1,248 | 661 | |||||||||
Loans
past due 90 days or more and still accruing
|
313 | 531 | 506 | |||||||||
Troubled
debt restructurings
|
1,595 | 1,641 | 29 | |||||||||
Total
non-performing loans
|
3,107 | 3,420 | 1,196 | |||||||||
Other
real estate owned
|
520 | 520 | 581 | |||||||||
Total
non-performing assets
|
3,627 | 3,940 | 1,777 | |||||||||
Non-performing
assets to net loans
|
0.89 | % | 0.97 | % | 0.46 | % |
·
|
Charge
off of loans considered not
recoverable
|
·
|
Recovery
of loans previously charged off
|
·
|
Provision
for loan loss
|
Three
Months Ended
|
||||||||
March
31,
|
||||||||
2009
|
2008
|
|||||||
$
|
$
|
|||||||
Balance
at January 1,
|
4,203 | 3,682 | ||||||
Loans
charged off:
|
||||||||
Real
estate
|
- | 0 | ||||||
Commercial
and industrial
|
19 | 5 | ||||||
Consumer
|
87 | 23 | ||||||
Total
charged off
|
106 | 28 | ||||||
Recoveries
of loans previously charged off:
|
||||||||
Real
estate
|
- | 0 | ||||||
Commercial
and industrial
|
5 | 55 | ||||||
Consumer
|
9 | 6 | ||||||
Total
recovered
|
14 | 61 | ||||||
Net
loans charged off (recovered)
|
92 | (33 | ) | |||||
Provision
charged to operating expense
|
150 | 199 | ||||||
Balance
at March 31,
|
4,261 | 3,914 | ||||||
|
||||||||
Net
charge-offs (reserves) as a % of
average total loans outstanding
|
0.02 | % | -0.01 | % | ||||
Allowance
at end of period as a % of total loans
|
1.04 | % | 1.01 | % |
March
31,
|
Dec.
31,
|
March
31,
|
||||||||||
2009
|
2008
|
2008
|
||||||||||
$
|
$
|
$
|
||||||||||
Non-interest
bearing demand deposits
|
108,725 | 114,609 | 103,129 | |||||||||
NOW
accounts
|
54,684 | 51,617 | 63,838 | |||||||||
Money
market deposit accounts
|
42,269 | 42,074 | 40,074 | |||||||||
Savings
deposits
|
77,662 | 72,210 | 71,708 | |||||||||
Time
deposits
|
241,514 | 223,594 | 206,458 | |||||||||
Brokered
time deposits
|
10,152 | 7,355 | 8,851 | |||||||||
Total
deposits
|
535,006 | 511,459 | 494,058 |
|
·
|
Convenience
and service provided
|
|
·
|
Fees
|
|
·
|
Permanence
of the institution
|
|
·
|
Possible
risks associated with other investment
opportunities
|
|
·
|
Current
rates paid on deposits compared to competitor
rates
|
Regulatory
Capital Ratios
|
||||||||||||
Regulatory
Requirements
|
||||||||||||
As
of March 31, 2009
|
Capital
Ratios
|
Adequately Capitalized |
Well Capitalized |
|||||||||
Total
Capital to Risk-Weighted Assets
|
||||||||||||
Consolidated
|
15.8 | % | 8.0 | % | 10.0 | % | ||||||
Bank
|
15.7 | % | 8.0 | % | 10.0 | % | ||||||
Tier
I Capital to Risk-Weighted Assets
|
||||||||||||
Consolidated
|
14.9 | % | 4.0 | % | 6.0 | % | ||||||
Bank
|
14.7 | % | 4.0 | % | 6.0 | % | ||||||
Tier
I Capital to Average Assets
|
||||||||||||
Consolidated
|
10.0 | % | 4.0 | % | 5.0 | % | ||||||
Bank
|
9.9 | % | 4.0 | % | 5.0 | % | ||||||
As
of March 31, 2008 (Bank only)
|
||||||||||||
Total
Capital to Risk-Weighted Assets
|
16.9 | % | 8.0 | % | 10.0 | % | ||||||
Tier
I Capital to Risk-Weighted Assets
|
15.9 | % | 4.0 | % | 6.0 | % | ||||||
Tier
I Capital to Average Assets
|
10.7 | % | 4.0 | % | 5.0 | % |
OFF-BALANCE
SHEET ARRANGEMENTS
|
||||
(DOLLARS
IN THOUSANDS)
|
||||
March
31,
|
||||
2009
|
||||
$ | ||||
Commitments
to extend credit:
|
||||
Revolving
home equity
|
15,067 | |||
Construction
loans
|
11,695 | |||
Real
estate loans
|
3,518 | |||
Business
loans
|
46,687 | |||
Consumer
loans
|
3,019 | |||
Other
|
3,568 | |||
Standby
letters of credit
|
14,434 | |||
Total
|
97,988 |
|
·
|
Credit
risk
|
|
·
|
Liquidity
risk
|
|
·
|
Interest
rate risk
|
|
·
|
Deposits
|
|
·
|
Loan
repayments
|
|
·
|
Maturities
and sales of securities
|
|
·
|
Borrowings
from correspondent and member banks
|
|
·
|
Repurchase
agreements
|
|
·
|
Brokered
deposits
|
|
·
|
Current
earnings
|
Less
than
|
6
months
|
1
year
|
3
years
|
More
than
|
||||||||||||||||
Maturity
Gap
|
6
months
|
to
1 year
|
to
3 years
|
to
5 years
|
5
years
|
|||||||||||||||
$
|
$
|
$
|
$
|
$
|
|
|||||||||||||||
Assets
maturing
|
76,646 | 64,483 | 186,051 | 101,178 | 271,891 | |||||||||||||||
Liabilities
maturing
|
90,842 | 83,912 | 166,021 | 98,095 | 261,379 | |||||||||||||||
Maturity
gap
|
(14,196 | ) | (19,429 | ) | 20,030 | 3,083 | 10,512 | |||||||||||||
Cumulative
maturity gap
|
(14,196 | ) | (33,625 | ) | (13,595 | ) | (10,512 | ) | - | |||||||||||
Maturity
gap %
|
84.4 | % | 76.8 | % | 112.1 | % | 103.1 | % | 104.0 | % | ||||||||||
Cumulative
maturity gap %
|
84.4 | % | 80.8 | % | 96.0 | % | 97.6 | % | 100.0 | % | ||||||||||
Cumulative
maturity gap % guideline
|
45%
to 155
|
% |
60%
to 140
|
% |
75%
to 125
|
% |
85%
to 115
|
% |
|
·
|
Changes
in net interest income
|
|
·
|
Changes
in net portfolio value
|
|
·
|
Projected
interest rates
|
|
·
|
Timing
of interest rate changes
|
|
·
|
Prepayment
speeds on the loans held and mortgage backed
securities
|
|
·
|
Anticipated
calls on financial instruments with call
options
|
|
·
|
Deposit
and loan balance fluctuations
|
|
·
|
Economic
conditions
|
|
·
|
Consumer
reaction to interest rate
changes
|
Page | |||
3
(i)
|
Articles
of Association of the Registrant, as amended
|
*
|
|
3
(ii)
|
By-Laws
of the Registrant, as amended
|
**
|
|
10.1
|
Form
of Deferred Income Agreement.
|
***
|
|
10.2
|
Form
on Employees Stock Purchase Plan
|
****
|
|
11
|
Statement
re computation of per share earnings (Included on page 4
herein)
|
4
|
|
31.1
|
Section
302 Chief Executive Officer Certification
|
40
|
|
31.2
|
Section
302 Principal Financial Officer Certification
|
41
|
|
32.1
|
Section
1350 Chief Executive Officer Certification
|
42
|
|
32.2
|
Section
1350 Principal Financial Officer Certification
|
43
|
|
*
|
Incorporated
herein by reference to Exhibit 3.1 of the Corporation’s Form 8-K12g3 filed
with the SEC on July 1, 2008.
|
|
**
|
Incorporated
herein by reference to Exhibit 3.2 of the Corporation’s Form 8-K filed
with the SEC on March 18, 2009.
|
|
***
|
Incorporated
herein by reference to the Corporation’s Quarterly Report on Form 10-Q,
filed with the SEC on August 12,
2008.
|
****
|
Incorporated
herein by reference to Exhibit 99.1 of the Corporation’s Registration
Statement on Form S-8 filed with the SEC on July 9,
2008.
|
ENB Financial Corp
|
||
(Registrant)
|
||
Dated:
May 13,
2009
|
By:
|
/s/ Aaron L. Groff,
Jr.
|
Aaron
L. Groff, Jr.
|
||
Chairman
of the Board,
|
||
President
& CEO
|
||
Dated:
May 13,
2009
|
By:
|
/s/ Scott E.
Lied
|
Scott
E. Lied, CPA
|
||
Treasurer
|
||
|
Principal
Financial Officer
|
Exhibit
No.
|
Description
|
Page
number on Manually Signed Original
|
3(i)
|
Articles
of Association of the Registrant, as amended. (Incorporated herein by
reference to Exhibit 3.1 of the Corporation’s Form 8-K12g3 filed with the
SEC on July 1, 2008.)
|
|
3
(ii)
|
By-Laws
of the Registrant, as amended. (Incorporated herein by reference to
Exhibit 3.2 of the Corporation’s Form 8-K filed with the SEC on March 18,
2009.)
|
|
10.1
|
Form
of Deferred Income Agreement. (Incorporated herein by reference
to the Corporation’s Quarterly Report on Form 10-Q filed with the SEC on
August 12, 2008.)
|
|
10.2
|
2001
Employee Stock Purchase Plan (Incorporated herein by reference to Exhibit
99.1 of the Corporation’s Registration Statement on Form S-8 filed with
the SEC on July 9, 2008.)
|
|
11
|
Statement
re: Computation of Earnings Per Share as found on page 4 of Form 10-Q,
which is included herein.
|
Page
4
|
Section
302 Chief Executive Officer Certification (Required by Rule
13a-14(a)).
|
Page
40
|
|
Section
302 Principal Financial Officer Certification (Required by Rule
13a-14(a)).
|
Page
41
|
|
Section
1350 Chief Executive Officer Certification (Required by Rule
13a-14(b)).
|
Page
42
|
|
Section
1350 Principal Financial Officer Certification (Required by Rule
13a-14(b)).
|
Page
43
|