x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
|
FOR
THE QUARTERLY PERIOD ENDED MARCH 31,
2010
|
o
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF
1934
|
Delaware
|
26-0734029
|
|
(State
or Other Jurisdiction of
|
(I.R.S.
Employer
|
|
Incorporation
or Organization)
|
|
Identification
No.)
|
Class
|
Outstanding as of April 30,
2010
|
|
Common
stock, $.001 par value
|
|
5,513,482
|
PART I. FINANCIAL
INFORMATION
|
|||
Item
1.
|
Consolidated
Financial Statements
|
3
|
|
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
20
|
|
Item
3.
|
Quantitative
and Qualitative Disclosure about Market Risk
|
35
|
|
Item
4.
|
Controls
and Procedures
|
35
|
|
PART II. OTHER INFORMATION
|
|||
Item
1
|
Legal
Proceedings
|
36
|
|
Item
1A.
|
Risk
Factors
|
36
|
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
36
|
|
Item
3.
|
Defaults
Upon Senior Securities
|
36
|
|
Item
4.
|
Other
Information
|
37
|
|
Item
5.
|
Exhibits
|
37
|
March 31, 2010
|
December 31,
2009
|
|||||||
(Unaudited)
|
(Audited)
|
|||||||
ASSETS
|
||||||||
Cash
and due from banks
|
$ | 20,449 | $ | 26,982 | ||||
Interest-bearing
balances due from depository institutions
|
5,313 | 48,544 | ||||||
Federal
funds sold
|
110 | 680 | ||||||
Cash
and cash equivalents
|
25,872 | 76,206 | ||||||
Debt
securities:
|
||||||||
Available
for sale
|
232,975 | 255,453 | ||||||
Held
to maturity
|
1,145 | 645 | ||||||
Restricted
equity securities
|
3,510 | 3,241 | ||||||
Mortgage
loans held for sale
|
4,521 | 6,202 | ||||||
Loans
|
1,235,504 | 1,207,084 | ||||||
Less
allowance for loan losses
|
(15,671 | ) | (14,911 | ) | ||||
Loans,
net
|
1,219,833 | 1,192,173 | ||||||
Premises
and equipment, net
|
4,892 | 5,088 | ||||||
Accrued
interest and dividends receivable
|
6,664 | 6,200 | ||||||
Deferred
tax assets
|
4,357 | 4,872 | ||||||
Other
real estate owned
|
12,344 | 12,525 | ||||||
Other
assets
|
11,451 | 10,892 | ||||||
Total
assets
|
$ | 1,527,564 | $ | 1,573,497 | ||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||
Liabilities:
|
||||||||
Deposits:
|
||||||||
Noninterest-bearing
|
$ | 174,068 | $ | 211,307 | ||||
Interest-bearing
|
1,176,492 | 1,221,048 | ||||||
Total
deposits
|
1,350,560 | 1,432,355 | ||||||
Federal
funds purchased
|
17,350 | - | ||||||
Other
borrowings
|
24,925 | 24,922 | ||||||
Trust
preferred securities
|
30,314 | 15,228 | ||||||
Accrued
interest payable
|
937 | 1,026 | ||||||
Other
liabilities
|
1,444 | 2,344 | ||||||
Total
liabilities
|
1,425,530 | 1,475,875 | ||||||
Stockholders'
equity:
|
||||||||
Common
stock, par value $.001 per share; 15,000,000 shares
authorized;
|
||||||||
5,513,482
shares issued and outstanding
|
6 | 6 | ||||||
Preferred
stock, par value $.001 per share; 1,000,000 shares
authorized;
|
||||||||
no
shares outstanding
|
- | - | ||||||
Additional
paid-in capital
|
75,213 | 75,078 | ||||||
Retained
earnings
|
24,978 | 20,965 | ||||||
Accumulated
other comprehensive income
|
1,837 | 1,573 | ||||||
Total
stockholders' equity
|
102,034 | 97,622 | ||||||
Total
liabilities and shareholders' equity Total liabilities and stockholders'
equity
|
$ | 1,527,564 | $ | 1,573,497 |
Three
Months Ended March 31,
|
||||||||
2010
|
2009
|
|||||||
Interest
income:
|
||||||||
Interest
and fees on loans
|
$ | 16,204 | $ | 12,509 | ||||
Taxable
securities
|
1,752 | 1,108 | ||||||
Nontaxable
securities
|
524 | 278 | ||||||
Federal
funds sold
|
10 | 24 | ||||||
Other
interest and dividends
|
12 | 18 | ||||||
Total
interest income
|
18,502 | 13,937 | ||||||
Interest
expense:
|
||||||||
Deposits
|
2,853 | 4,393 | ||||||
Borrowed
funds
|
743 | 498 | ||||||
Total
interest expense
|
3,596 | 4,891 | ||||||
Net
interest income
|
14,906 | 9,046 | ||||||
Provision
for loan losses
|
2,712 | 2,460 | ||||||
Net
interest income after provision for loan losses
|
12,194 | 6,586 | ||||||
Noninterest
income:
|
||||||||
Service
charges on deposit accounts
|
572 | 356 | ||||||
Securities
gains
|
38 | - | ||||||
Other
operating income
|
522 | 563 | ||||||
Total
noninterest income
|
1,132 | 919 | ||||||
Noninterest
expenses:
|
||||||||
Salaries
and employee benefits
|
3,482 | 3,367 | ||||||
Equipment
and occupancy expense
|
780 | 588 | ||||||
Professional
services
|
200 | 214 | ||||||
Other
operating expenses
|
2,796 | 2,263 | ||||||
Total
noninterest expenses
|
7,258 | 6,432 | ||||||
Income
before income taxes
|
6,068 | 1,073 | ||||||
Provision
for income taxes
|
2,055 | 352 | ||||||
Net
income
|
$ | 4,013 | $ | 721 | ||||
Basic
earnings per share
|
$ | 0.73 | $ | 0.13 | ||||
Diluted
earnings per share
|
$ | 0.68 | $ | 0.13 |
2010
|
2009
|
|||||||
Net
income
|
$ | 4,013 | $ | 721 | ||||
Other
comprehensive income (loss), net of tax:
|
||||||||
Unrealized
holding gains arising during period from securities available for sale,
net of tax of $149 and $71 for 2010 and 2009, respectively
|
289 | 138 | ||||||
Reclassification
adjustment for net gains on sale of securities in net income, net of tax
of $13
|
(25 | ) | - | |||||
Reclassification
adjustment for net gains realized on derivatives in net income, net of tax
of $46 for 2009
|
- | (90 | ) | |||||
Other
comprehensive income
|
264 | 48 | ||||||
Comprehensive
income
|
$ | 4,277 | $ | 769 |
Common
Stock
|
Additional
Paid-in
Capital
|
Retained
Earnings
|
Accumulated
Other
Comprehensive
Income
|
Total
Stockholders'
Equity
|
||||||||||||||||
Balance,
December 31, 2009
|
6 | 75,078 | 20,965 | 1,573 | 97,622 | |||||||||||||||
Other
comprehensive income
|
- | - | - | 264 | 264 | |||||||||||||||
Stock-based
compensation expense
|
- | 135 | - | - | 135 | |||||||||||||||
Net
income
|
- | - | 4,013 | - | 4,013 | |||||||||||||||
Balance,
March 31, 2010
|
$ | 6 | $ | 75,213 | $ | 24,978 | $ | 1,837 | $ | 102,034 |
2010
|
2009
|
|||||||
OPERATING
ACTIVITIES
|
||||||||
Net
income
|
$ | 4,013 | $ | 721 | ||||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||
Deferred
tax expense (benefit)
|
379 | (967 | ) | |||||
Provision
for loan losses
|
2,712 | 2,460 | ||||||
Depreciation
and amortization
|
270 | 273 | ||||||
Net
amortization (accretion) of investments
|
150 | (156 | ) | |||||
Amortized
gain on derivative
|
- | (136 | ) | |||||
(Decrease)
increase in accrued interest and dividends receivable
|
(463 | ) | 92 | |||||
Stock
compensation expense
|
135 | 195 | ||||||
Decrease
in accrued interest payable
|
(89 | ) | (130 | ) | ||||
Proceeds
from sale of mortgage loans held for sale
|
29,235 | 51,562 | ||||||
Originations
of mortgage loans held for sale
|
(27,934 | ) | (54,320 | ) | ||||
Gain
on sale of securities available for sale
|
(38 | ) | - | |||||
Net
loss on sale of other real estate owned
|
52 | 612 | ||||||
Decrease
in special prepaid FDIC insurance assessments
|
564 | - | ||||||
Net
change in other assets, liabilities, and other operating
activities
|
(1,988 | ) | (1,179 | ) | ||||
Net
cash provided by operating activities
|
6,998 | (973 | ) | |||||
INVESTMENT
ACTIVITIES
|
||||||||
Purchase
of securities available for sale
|
(17,274 | ) | (6,972 | ) | ||||
Proceeds
from maturities, calls and paydowns of securities available for
sale
|
10,041 | 4,417 | ||||||
Purchase
of securities held to maturity
|
(500 | ) | - | |||||
Increase
in loans
|
(31,955 | ) | (57,179 | ) | ||||
Purchase
of premises and equipment
|
(74 | ) | (167 | ) | ||||
Purchase
of restricted equity securities
|
(269 | ) | (582 | ) | ||||
Proceeds
from sale of securities available for sale
|
29,999 | - | ||||||
Proceeds
from sale of other real estate owned and repossessions
|
2,172 | 2,926 | ||||||
Additions
to other real estate owned
|
(77 | ) | - | |||||
Net
cash used in investing activities
|
(7,937 | ) | (57,557 | ) | ||||
FINANCING
ACTIVITIES
|
||||||||
Net
(decrease) increase in noninterest-bearing deposits
|
(37,239 | ) | 88,644 | |||||
Net
(decrease) increase in interest-bearing deposits
|
(44,556 | ) | 1,184 | |||||
Net
increase in federal funds purchased
|
17,350 | - | ||||||
Proceeds
from issuance of trust preferred securities
|
15,050 | - | ||||||
Proceeds
from sale of stock, net
|
- | 3,479 | ||||||
Net
cash (used in) provided by financing activities
|
(49,395 | ) | 93,307 | |||||
Net
(decrease) increase in cash and cash equivalents
|
(50,334 | ) | 34,777 | |||||
Cash
and cash equivalents at beginning of year
|
76,206 | 72,918 | ||||||
Cash
and cash equivalents at end of year
|
$ | 25,872 | $ | 107,695 | ||||
SUPPLEMENTAL
DISCLOSURE
|
||||||||
Cash
paid for:
|
||||||||
Interest
|
$ | 3,685 | $ | 5,021 | ||||
Income
taxes
|
1,560 | 1,365 | ||||||
NONCASH
TRANSACTIONS
|
||||||||
Transfers
of loans from held for sale to held for investment
|
$ | 380 | $ | 293 | ||||
Other
real estate acquired in settlement of loans
|
2,068 | 1,436 |
Three
Months Ended March 31,
|
||||||||
2010
|
2009
|
|||||||
(In
Thousands, Except Shares
and
Per Share Data)
|
||||||||
Earnings
Per Share
|
||||||||
Weighted
average common shares outstanding
|
5,513,482 | 5,401,914 | ||||||
Net
income
|
$ | 4,013 | $ | 721 | ||||
Basic
earnings per share
|
$ | 0.73 | $ | 0.13 | ||||
Weighted
average common shares outstanding
|
5,513,482 | 5,401,914 | ||||||
Dilutive
effects of assumed conversions and exercise of stock options and
warrants
|
388,296 | 287,495 | ||||||
Weighted
average common and dilutive potential common shares
outstanding
|
5,901,778 | 5,689,409 | ||||||
Net
income
|
$ | 4,041 | $ | 721 | ||||
Diluted
earnings per share
|
$ | 0.68 | $ | 0.13 |
Amortized
Cost
|
Gross
Unrealized
Gain
|
Gross
Unrealized
Loss
|
Market
Value
|
|||||||||||||
(In
Thousands)
|
||||||||||||||||
March
31, 2010:
|
||||||||||||||||
Securities
Available for Sale
|
||||||||||||||||
U.S.
Treasury and government sponsored agencies
|
$ | 60,487 | $ | 363 | $ | (357 | ) | $ | 60,493 | |||||||
Mortgage-backed
securities
|
107,727 | 2,699 | (616 | ) | 109,810 | |||||||||||
State
and municipal securities
|
58,973 | 1,009 | (406 | ) | 59,576 | |||||||||||
Corporate
debt
|
3,006 | 90 | - | 3,096 | ||||||||||||
Total
|
$ | 230,193 | $ | 4,161 | $ | (1,379 | ) | $ | 232,975 | |||||||
Securities
Held to Maturity
|
||||||||||||||||
State
and municipal securities
|
$ | 1,145 | $ | 1 | $ | (17 | ) | $ | 1,129 | |||||||
Total
|
$ | 1,145 | $ | 1 | $ | (17 | ) | $ | 1,129 | |||||||
December
31, 2009:
|
||||||||||||||||
Securities
Available for Sale
|
||||||||||||||||
U.S.
Treasury and government sponsored agencies
|
$ | 92,368 | $ | 412 | $ | (453 | ) | $ | 92,327 | |||||||
Mortgage-backed
securities
|
99,608 | 2,717 | (625 | ) | 101,700 | |||||||||||
State
and municipal securities
|
58,090 | 876 | (567 | ) | 58,399 | |||||||||||
Corporate
debt
|
3,004 | 36 | (13 | ) | 3,027 | |||||||||||
Total
|
$ | 253,070 | $ | 4,041 | $ | (1,658 | ) | $ | 255,453 | |||||||
Securities
Held to Maturity
|
||||||||||||||||
State
and municipal securities
|
$ | 645 | $ | 1 | $ | (3 | ) | $ | 643 | |||||||
Total
|
$ | 645 | $ | 1 | $ | (3 | ) | $ | 643 |
Less Than Twelve Months
|
Twelve Months or More
|
|||||||||||||||
Gross
Unrealized
Losses
|
Fair Value
|
Gross
Unrealized
Losses
|
Fair Value
|
|||||||||||||
(In
Thousands)
|
||||||||||||||||
March
31, 2010:
|
||||||||||||||||
U.S.
Treasury and government sponsored agencies
|
$ | (357 | ) | $ | 38,346 | $ | - | $ | - | |||||||
Mortgage-backed
securities
|
(616 | ) | 54,235 | - | - | |||||||||||
State
and municipal securities
|
(423 | ) | 20,232 | - | - | |||||||||||
Corporate
debt
|
- | - | - | - | ||||||||||||
$ | (1,396 | ) | $ | 112,813 | $ | - | $ | - | ||||||||
December
31, 2009:
|
||||||||||||||||
U.S.
Treasury and government sponsored agencies
|
$ | (437 | ) | $ | 42,836 | $ | - | $ | - | |||||||
Mortgage-backed
securities
|
(625 | ) | 44,993 | - | - | |||||||||||
State
and municipal securities
|
(569 | ) | 20,479 | - | - | |||||||||||
Corporate
debt
|
(17 | ) | 2,074 | (13 | ) | 986 | ||||||||||
$ | (1,648 | ) | $ | 110,382 | $ | (13 | ) | $ | 986 |
2010
|
2009
|
|||||||
Expected
volatility
|
25.00 | % | 20.00 | % | ||||
Expected
dividends
|
0.50 | % | 0.50 | % | ||||
Expected
term (in years)
|
7
years
|
7
years
|
||||||
Risk-free
rate
|
2.32 | % | 1.65 | % |
Shares
|
Weighted
Average
Exercise
Price
|
Weighted
Average
Remaining
Contractual
Term (years)
|
Aggregate
Intrinsic
Value
|
|||||||||||||
(In Thousands)
|
||||||||||||||||
Three
Months Ended March 31, 2010:
|
||||||||||||||||
Outstanding
at January 1, 2010
|
833,500 | $ | 15.00 | 6.8 | $ | 8,333 | ||||||||||
Granted
|
11,000 | 25.00 | 9.9 | - | ||||||||||||
Exercised
|
- | - | - | - | ||||||||||||
Forfeited
|
(10,000 | ) | 15.00 | 6.7 | - | |||||||||||
Outstanding
at March 31, 2010
|
834,500 | 15.25 | 6.6 | $ | 8,238 | |||||||||||
Exercisable
at March 31, 2010
|
146,196 | $ | 12.05 | 5.9 | $ | 1,894 | ||||||||||
Three
Months Ended March 31, 2009:
|
||||||||||||||||
Outstanding
at January 1, 2009
|
796,000 | $ | 14.50 | 7.7 | $ | 8,363 | ||||||||||
Granted
|
37,500 | 25.00 | - | - | ||||||||||||
Exercised
|
- | - | - | - | ||||||||||||
Forfeited
|
- | - | - | - | ||||||||||||
Outstanding
at March 31, 2009
|
833,500 | 14.97 | 7.8 | $ | 8,363 | |||||||||||
Exercisable
at March 31, 2009
|
75,264 | $ | 12.34 | 6.9 | $ | 953 |
Level
1:
|
Quoted
prices (unadjusted) in active markets that are accessible at the
measurement date for assets or liabilities. The fair value hierarchy gives
the highest priority to Level 1
inputs.
|
Level
2:
|
Observable
prices that are based on inputs not quoted on active markets, but
corroborated by market data.
|
Level
3:
|
Unobservable
inputs are used when little or no market data is available. The fair value
hierarchy gives the lowest priority to Level 3
inputs.
|
Fair Value Measurements at March 31, 2010 Using
|
||||||||||||||||
Quoted Prices in
Active Markets
for Identical
Assets (Level 1)
|
Significant Other
Observable Inputs
(Level 2)
|
Significant
Unobservable
Inputs (Level 3)
|
Total
|
|||||||||||||
(In
Thousands)
|
||||||||||||||||
Assets
Measured on a Recurring Basis:
|
||||||||||||||||
Available-for-sale
securities
|
$ | - | $ | 232,975 | $ | - | $ | 232,975 | ||||||||
Interest
rate swap agreements
|
- | 567 | 567 | |||||||||||||
Total
assets at fair value
|
$ | - | $ | 233,542 | $ | - | $ | 233,542 | ||||||||
Liabilities
Measured on a Recurring Basis:
|
||||||||||||||||
Interest
rate swap agreements
|
$ | - | $ | 567 | $ | - | $ | 567 |
Fair Value Measurements at December 31, 2009 Using
|
||||||||||||||||
Quoted Prices in
Active Markets
for Identical
Assets (Level 1)
|
Significant Other
Observable Inputs
(Level 2)
|
Significant
Unobservable
Inputs (Level 3)
|
Total
|
|||||||||||||
(In
Thousands)
|
||||||||||||||||
Assets
Measured on a Recurring Basis:
|
||||||||||||||||
Available-for-sale
securities
|
$ | - | $ | 255,453 | $ | - | $ | 255,453 | ||||||||
Interest
rate swap agreements
|
- | 413 | 413 | |||||||||||||
Total
assets at fair value
|
$ | - | $ | 255,866 | $ | - | $ | 255,866 | ||||||||
Liabilities
Measured on a Recurring Basis:
|
||||||||||||||||
Interest
rate swap agreements
|
$ | - | $ | 413 | $ | - | $ | 413 |
Fair Value Measurements at March 31, 2010 Using
|
||||||||||||||||
Quoted Prices in
Active Markets
for Identical
Assets (Level 1)
|
Significant Other
Observable Inputs
(Level 2)
|
Significant
Unobservable
Inputs (Level 3)
|
Total
|
|||||||||||||
(In
Thousands)
|
||||||||||||||||
Assets
Measured on a Nonrecurring Basis:
|
||||||||||||||||
Impaired
loans
|
$ | - | $ | - | $ | 14,135 | $ | 14,135 | ||||||||
Other
real estate owned
|
- | - | 12,344 | 12,344 | ||||||||||||
Total
assets at fair value
|
$ | - | $ | - | $ | 26,479 | $ | 26,479 |
March 31, 2010
|
December 31, 2009
|
|||||||||||||||
Carrying
Amount
|
Fair Value
|
Carrying
Amount
|
Fair Value
|
|||||||||||||
(In
Thousands)
|
||||||||||||||||
Financial
Assets:
|
||||||||||||||||
Cash
and cash equivalents
|
$ | 25,872 | $ | 25,872 | $ | 76,206 | $ | 76,206 | ||||||||
Investment
securities available for sale
|
232,975 | 232,975 | 255,453 | 255,453 | ||||||||||||
Investment
securities held to maturity
|
1,145 | 1,129 | 645 | 643 | ||||||||||||
Restricted
equity securities
|
3,510 | 3,510 | 3,241 | 3,241 | ||||||||||||
Mortgage
loans held for sale
|
4,521 | 4,521 | 6,202 | 6,202 | ||||||||||||
Loans,
net
|
1,219,833 | 1,223,260 | 1,192,173 | 1,193,376 | ||||||||||||
Accrued
interest and dividends receivable
|
6,664 | 6,664 | 6,200 | 6,200 | ||||||||||||
Derivative
|
567 | 567 | 413 | 413 | ||||||||||||
Financial
Liabilities:
|
||||||||||||||||
Deposits
|
$ | 1,350,560 | $ | 1,353,085 | $ | 1,432,355 | $ | 1,435,387 | ||||||||
Federal
funds purchased
|
17,350 | 17,350 | - | - | ||||||||||||
Borrowings
|
24,925 | 25,714 | 24,922 | 25,981 | ||||||||||||
Trust
preferred securities
|
30,314 | 27,434 | 15,228 | 12,681 | ||||||||||||
Accrued
interest payable
|
937 | 937 | 1,026 | 1,026 | ||||||||||||
Derivative
|
567 | 567 | 413 | 413 |
NOTE
10 –
|
JUNIOR
SUBORDINATED MANDATORY CONVERTIBLE DEFERRABLE INTEREST DEBENTURES DUE
MARCH 15,
2040
|
NOTE
11 -
|
SUBORDINATED
NOTE DUE SEPTEMBER 1, 2016
|
NOTE
12 –
|
SUBSEQUENT
EVENTS
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
|
Less Than
One Year
|
One Year to
Five Years
|
Five Years to
Ten Years
|
More Than
Ten Years
|
Total
|
||||||||||||||||
(In
Thousands)
|
||||||||||||||||||||
U.S.
Treasury and government sponsored
|
||||||||||||||||||||
agencies
|
$ | - | $ | 23,795 | $ | 31,744 | $ | 4,948 | $ | 60,487 | ||||||||||
Mortgage-backed
securities
|
1,092 | 71,277 | 35,358 | - | 107,727 | |||||||||||||||
State
and municipal securities
|
- | 6,373 | 37,044 | 16,701 | 60,118 | |||||||||||||||
Corporate
debt
|
- | - | 1,991 | 1,015 | 3,006 | |||||||||||||||
$ | 1,092 | $ | 101,445 | $ | 106,137 | $ | 22,664 | $ | 231,338 | |||||||||||
Taxable-equivalent
Yield
|
5.17 | % | 3.88 | % | 4.51 | % | 5.58 | % | 4.34 | % |
March
31,
2010
|
December
31,
2009
|
|||||||
(In
Thousands)
|
||||||||
Commercial,
financial and agricultural
|
$ | 471,705 | $ | 461,088 | ||||
Real
estate - construction (1)
|
218,554 | 224,178 | ||||||
Real
estate - mortgage:
|
||||||||
Owner
occupied
|
216,289 | 203,983 | ||||||
1-4
Family
|
172,083 | 165,512 | ||||||
Other
|
124,537 | 119,749 | ||||||
Total
Real Estate Mortgage
|
512,909 | 489,244 | ||||||
Consumer
|
32,336 | 32,574 | ||||||
Total
Loans
|
1,235,504 | 1,207,084 | ||||||
Allowance
for loan losses
|
(15,671 | ) | (14,911 | ) | ||||
Total
Loans, Net
|
$ | 1,219,833 | $ | 1,192,173 | ||||
(1)
includes Owner Occupied real estate construction loans in the amount
of
|
||||||||
$9,940
and $10,045 at March 31, 2010 and December 31, 2009,
respectively
|
Three
Months Ended March 31,
|
||||||||
2010
|
2009
|
|||||||
|
(In
Thousands)
|
|||||||
Allowance
for Loan Losses
|
||||||||
Balance,
beginning of period
|
$ | 14,911 | $ | 10,602 | ||||
Charge-offs:
|
||||||||
Commercial,
financial and agricultural
|
(847 | ) | - | |||||
Real
estate - construction
|
(338 | ) | (634 | ) | ||||
Real
estate - mortgage:
|
||||||||
Owner
Occupied
|
(178 | ) | (40 | ) | ||||
1-4
family mortgage
|
(633 | ) | - | |||||
Other
|
- | - | ||||||
Total
real estate mortgage
|
(811 | ) | (40 | ) | ||||
Consumer
|
(16 | ) | (15 | ) | ||||
Total
charge-offs
|
(2,012 | ) | (689 | ) | ||||
Recoveries:
|
||||||||
Commercial,
financial and agricultural
|
56 | - | ||||||
Real
estate - construction
|
- | 39 | ||||||
Real
estate - mortgage:
|
||||||||
Owner
Occupied
|
- | - | ||||||
1-4
family mortgage
|
3 | - | ||||||
Other
|
- | - | ||||||
Total
real estate mortgage
|
3 | - | ||||||
Consumer
|
1 | - | ||||||
Total
recoveries
|
60 | 39 | ||||||
Net
charge-offs
|
(1,952 | ) | (650 | ) | ||||
Provision
for loan losses charged to expense
|
2,712 | 2,460 | ||||||
Balance,
end of period
|
$ | 15,671 | $ | 12,412 | ||||
As
a percent of year to date average loans:
|
||||||||
Annualized
net charge-offs
|
0.65 | % | 0.27 | % | ||||
Annualized
provision for loan losses
|
0.90 | % | 1.01 | % |
March
31, 2010
|
December
31, 2009
|
March
31, 2009
|
||||||||||||||||||||||
Amount
|
Percentage
of
Loans
in
Each
Category
of
Total
Loans
|
Amount
|
Percentage
of
Loans
in
Each
Category
of
Total
Loans
|
Amount
|
Percentage
of
Loans
in
Each
Category
of
Total
Loans
|
|||||||||||||||||||
(In
Thousands)
|
(In
Thousands)
|
(In
Thousands)
|
||||||||||||||||||||||
Commercial,
financial and
|
||||||||||||||||||||||||
agricultural
|
$ | 4,391 | 38.04 | % | $ | 3,058 | 38.20 | % | $ | 2,660 | 34.20 | % | ||||||||||||
Real
estate - construction
|
6,087 | 17.62 | % | 6,295 | 18.57 | % | 5,718 | 24.11 | % | |||||||||||||||
Real
estate - mortgage
|
1,184 | 41.73 | % | 1,416 | 40.53 | % | 492 | 38.71 | % | |||||||||||||||
Consumer
|
79 | 2.61 | % | 1 | 2.70 | % | 95 | 2.98 | % | |||||||||||||||
Other
|
3,930 | - | 4,141 | - | 3,447 | - | ||||||||||||||||||
Total
|
$ | 15,671 | 100.00 | % | $ | 14,911 | 100.00 | % | $ | 12,412 | 100.00 | % |
March
31,
2010
|
December
31,
2009
|
March
31,
2009
|
||||||||||
(In
Thousands)
|
||||||||||||
Nonaccrual
loans
|
$ | 10,234 | (1) | $ | 11,921 | (2) | $ | 11,614 | ||||
Past
due 90 days and still accruing
|
1,750 | 267 | 3,036 | (3) | ||||||||
Troubled
debt restructures
|
845 | - | 518 | |||||||||
All
other real estate owned
|
12,344 | 12,525 | 8,088 | |||||||||
Total
non-performing assets
|
$ | 25,173 | $ | 24,713 | $ | 23,256 |
(1)
$1,404 of this amount represents a loan that is guaranteed by the Small
Business Administration
|
|||||||
(2)
$1,785 of this amount represents a loan that is guaranteed by the U.S.
Department of Agriculture
|
|||||||
(3)
$1,804 of this amount represents a loan that is guaranteed by the U.S.
Department of Agriculture
|
Payments due by Period
|
||||||||||||||||||||
Total
|
1 year or less
|
Over 1 - 3
years
|
Over 3 - 5
years
|
Over 5 years
|
||||||||||||||||
(In
Thousands)
|
||||||||||||||||||||
Contractual
Obligations (1)
|
||||||||||||||||||||
Deposits
without a stated maturity
|
$ | 1,113,276 | $ | - | $ | - | $ | - | $ | - | ||||||||||
Certificates
of deposit (2)
|
237,284 | 186,848 | 39,909 | 10,527 | - | |||||||||||||||
FHLB
borrowings
|
20,000 | - | 20,000 | - | - | |||||||||||||||
Subordinated
debentures
|
30,314 | - | - | - | 30,314 | |||||||||||||||
Subordinated
note payable
|
4,925 | - | - | - | 4,925 | |||||||||||||||
Operating
lease commitments
|
17,901 | 1,769 | 3,630 | 3,739 | 8,763 | |||||||||||||||
Total
|
$ | 1,423,700 | $ | 188,617 | $ | 63,539 | $ | 14,266 | $ | 44,002 |
Actual
|
For
Capital Adequacy
Purposes
|
To
Be Well Capitalized
Under
Prompt Corrective
Action
Provisions
|
||||||||||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||||||||||||
As
of March 31, 2010:
|
||||||||||||||||||||||||
Total
Capital to Risk-Weighted Assets:
|
||||||||||||||||||||||||
Consolidated
|
$ | 150,793 | 11.90 | % | $ | 101,297 | 8.00 | % | $ | 126,621 | 10.00 | % | ||||||||||||
ServisFirst
Bank
|
150,333 | 11.88 | % | 101,230 | 8.00 | % | 126,538 | 10.00 | % | |||||||||||||||
Tier
1 Capital to Risk-Weighted Assets:
|
||||||||||||||||||||||||
Consolidated
|
130,197 | 10.28 | % | 50,649 | 4.00 | % | 75,973 | 6.00 | % | |||||||||||||||
ServisFirst
Bank
|
129,737 | 10.25 | % | 50,615 | 4.00 | % | 75,923 | 6.00 | % | |||||||||||||||
Tier
1 Capital to Average Assets:
|
||||||||||||||||||||||||
Consolidated
|
130,197 | 8.51 | % | 61,186 | 4.00 | % | 76,482 | 5.00 | % | |||||||||||||||
ServisFirst
Bank
|
129,737 | 8.49 | % | 61,153 | 4.00 | % | 76,442 | 5.00 | % | |||||||||||||||
As
of December 31, 2009:
|
||||||||||||||||||||||||
Total
Capital to Risk-Weighted Assets:
|
||||||||||||||||||||||||
Consolidated
|
$ | 130,882 | 10.48 | % | $ | 99,903 | 8.00 | % | $ | 124,879 | 10.00 | % | ||||||||||||
ServisFirst
Bank
|
130,426 | 10.45 | % | 99,851 | 8.00 | % | 124,814 | 10.00 | % | |||||||||||||||
Tier
1 Capital to Risk-Weighted Assets:
|
||||||||||||||||||||||||
Consolidated
|
111,049 | 8.89 | % | 49,952 | 4.00 | % | 74,927 | 6.00 | % | |||||||||||||||
ServisFirst
Bank
|
110,593 | 8.86 | % | 49,926 | 4.00 | % | 74,888 | 6.00 | % | |||||||||||||||
Tier
1 Capital to Average Assets:
|
||||||||||||||||||||||||
Consolidated
|
111,049 | 6.97 | % | 63,737 | 4.00 | % | 79,672 | 5.00 | % | |||||||||||||||
ServisFirst
Bank
|
110,593 | 6.94 | % | 63,737 | 4.00 | % | 79,672 | 5.00 | % | |||||||||||||||
As
of March 31, 2009:
|
||||||||||||||||||||||||
Total
Capital to Risk-Weighted Assets:
|
||||||||||||||||||||||||
Consolidated
|
$ | 117,628 | 11.21 | % | $ | 83,945 | 8.00 | % | $ | 104,931 | 10.00 | % | ||||||||||||
ServisFirst
Bank
|
116,386 | 11.10 | % | 83,890 | 8.00 | % | 104,862 | 10.00 | % | |||||||||||||||
Tier
1 Capital to Risk-Weighted Assets:
|
||||||||||||||||||||||||
Consolidated
|
105,216 | 10.03 | % | 41,972 | 4.00 | % | 62,958 | 6.00 | % | |||||||||||||||
ServisFirst
Bank
|
103,974 | 9.92 | % | 41,945 | 4.00 | % | 62,917 | 6.00 | % | |||||||||||||||
Tier
1 Capital to Average Assets:
|
||||||||||||||||||||||||
Consolidated
|
105,216 | 8.84 | % | 47,619 | 4.00 | % | 59,524 | 5.00 | % | |||||||||||||||
ServisFirst
Bank
|
103,974 | 8.74 | % | 47,589 | 4.00 | % | 59,486 | 5.00 | % |
(In
Thousands)
|
||||
Commitments
to extend credit
|
$ | 495,990 | ||
Credit
card arrangements
|
20,265 | |||
Standby
letters of credit
|
39,038 | |||
$ | 555,293 |
2010
|
2009
|
|||||||||||||||||||||||
Average
Balance
|
Interest
Earned /
Paid
|
Average
Yield / Rate
|
Average
Balance
|
Interest
Earned /
Paid
|
Average
Yield / Rate
|
|||||||||||||||||||
Assets:
|
||||||||||||||||||||||||
Interest-earning
assets:
|
||||||||||||||||||||||||
Loans,
net of unearned income (1)
|
$ | 1,220,293 | $ | 16,170 | 5.37 | % | $ | 992,470 | $ | 12,432 | 5.08 | % | ||||||||||||
Mortgage
loans held for sale
|
3,322 | 34 | 4.15 | 7,252 | 77 | 4.31 | ||||||||||||||||||
Investment
securities:
|
||||||||||||||||||||||||
Taxable
|
188,729 | 1,750 | 3.76 | 73,787 | 1,108 | 6.09 | ||||||||||||||||||
Tax-exempt
(2)
|
53,826 | 754 | 5.68 | 28,340 | 399 | 5.71 | ||||||||||||||||||
Total
investment securities (3)
|
242,555 | 2,504 | 4.19 | 102,127 | 1,507 | 5.98 | ||||||||||||||||||
Federal
funds sold
|
3,496 | 2 | 0.23 | 34,457 | 24 | 0.28 | ||||||||||||||||||
Restricted
equity securities
|
3,748 | 12 | 1.30 | 2,672 | - | - | ||||||||||||||||||
Interest-bearing
balances with banks
|
8,052 | 10 | 0.50 | 19,479 | 18 | 0.37 | ||||||||||||||||||
Total
interest-earning assets
|
$ | 1,481,466 | $ | 18,732 | 5.13 | % | $ | 1,158,457 | $ | 14,058 | 4.92 | % | ||||||||||||
Noninterest-earning
assets:
|
||||||||||||||||||||||||
Cash
and due from banks
|
22,191 | 18,669 | ||||||||||||||||||||||
Net
fixed assets and equipment
|
5,242 | 3,865 | ||||||||||||||||||||||
Allowance
for loan losses, accrued
|
||||||||||||||||||||||||
interest
and other assets
|
20,740 | 9,483 | ||||||||||||||||||||||
Total
assets
|
$ | 1,529,639 | $ | 1,190,474 | ||||||||||||||||||||
Liabilities
and stockholders' equity:
|
||||||||||||||||||||||||
Interest-bearing
liabilities:
|
||||||||||||||||||||||||
Interest-bearing
demand deposits
|
$ | 223,780 | $ | 308 | 0.56 | % | $ | 143,743 | $ | 500 | 1.41 | % | ||||||||||||
Savings
deposits
|
1,898 | 2 | 0.43 | 852 | 1 | 0.48 | ||||||||||||||||||
Money
market accounts
|
706,415 | 1,297 | 0.74 | 629,453 | 2,543 | 1.64 | ||||||||||||||||||
Time
deposits
|
251,599 | 1,246 | 2.01 | 178,203 | 1,349 | 3.07 | ||||||||||||||||||
Fed
funds purchased
|
18,720 | 29 | 0.63 | - | - | - | ||||||||||||||||||
Other
borrowings
|
42,679 | 714 | 6.78 | 35,104 | 498 | 5.75 | ||||||||||||||||||
Total
interest-bearing liabilities
|
$ | 1,245,091 | $ | 3,596 | 1.17 | $ | 987,355 | $ | 4,891 | 2.01 | ||||||||||||||
Noninterest-bearing
liabilities:
|
||||||||||||||||||||||||
Noninterest-bearing
demand
|
||||||||||||||||||||||||
deposits
|
180,724 | 111,806 | ||||||||||||||||||||||
Other
liabilites
|
3,589 | 1,990 | ||||||||||||||||||||||
Stockholders'
equity
|
98,123 | 88,019 | ||||||||||||||||||||||
Unrealized
gains on
|
||||||||||||||||||||||||
securities
and derivatives
|
2,112 | 1,304 | ||||||||||||||||||||||
Total
liabilities and
|
||||||||||||||||||||||||
stockholders'
equity
|
$ | 1,529,639 | $ | 1,190,474 | ||||||||||||||||||||
Net
interest spread
|
3.96 | % | 2.91 | % | ||||||||||||||||||||
Net
interest margin
|
4.14 | % | 3.21 | % |
(1)
|
Non-accrual
loans are included in average loan balances in all
periods. Loan fees of $187,000 and $136,000 are included in
interest income in 2010 and 2009,
respectively.
|
(2)
|
Interest
income and yields are presented on a fully taxable equivalent basis using
a tax rate of 34%.
|
(3)
|
Unrealized
gains of $2,783,000 and $1,760,000 are excluded from the yield calculation
in 2010 and 2009,
respectively.
|
Three
Months Ended March 31,
|
||||||||||||
2010
Compared to 2009 Increase (Decrease)
in
Interest Income and Expense Due to
Changes
in:
|
||||||||||||
Volume
|
Rate
|
Total
|
||||||||||
Interest-earning
assets:
|
||||||||||||
Loans,
net of unearned income
|
2,986 | 752 | 3,738 | |||||||||
Mortgages
held for sale
|
(40 | ) | (3 | ) | (43 | ) | ||||||
Investment
securities:
|
||||||||||||
Securities
- taxable
|
1,196 | (554 | ) | 642 | ||||||||
Securities
- non taxable
|
357 | (2 | ) | 355 | ||||||||
Federal
funds sold
|
(19 | ) | (3 | ) | (22 | ) | ||||||
Restricted
equity securities
|
- | 12 | 12 | |||||||||
Interest-bearing
balances with banks
|
(13 | ) | 5 | (8 | ) | |||||||
Total
interest-earning assets
|
4,467 | 207 | 4,674 | |||||||||
Interest-bearing
liabilities:
|
||||||||||||
Interest-bearing
demand deposits
|
197 | (389 | ) | (192 | ) | |||||||
Savings
|
1 | - | 1 | |||||||||
Money
market accounts
|
280 | (1,526 | ) | (1,246 | ) | |||||||
Time
deposits
|
452 | (554 | ) | (102 | ) | |||||||
Fed
funds purchased
|
29 | - | 29 | |||||||||
Other
borrowed funds
|
117 | 98 | 215 | |||||||||
Total
interest-bearing liabilities
|
1,076 | (2,371 | ) | (1,295 | ) | |||||||
Increase
in net interest income
|
3,391 | 2,578 | 5,969 |
(a)
Exhibit:
|
31.01
Certification of principal executive officer pursuant to Rule
13a-14(a).
|
31.02
Certification of principal financial officer pursuant to Rule
13a-14(a).
|
32.01
Certification of principal executive officer pursuant to 18 U.S.C. Section
1350.
|
32.02
Certification of principal financial officer pursuant to 18 U.S.C. Section
1350.
|
SERVISFIRST
BANCSHARES, INC.
|
|||
Date:
April 30, 2010
|
By
|
/s/
Thomas A. Broughton,
III
|
|
Thomas
A. Broughton, III
|
|||
President
and Chief Executive Officer
|
|||
Date:
April 30, 2010
|
By
|
/s/
William M. Foshee
|
|
William
M. Foshee
|
|||
Chief Financial
Officer
|