UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
x QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2011
OR
¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File No. 000-20827
CASS INFORMATION SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
Missouri
|
43-1265338
|
(State or other jurisdiction of incorporation or
|
(I.R.S. Employer Identification No.)
|
organization)
|
|
13001 Hollenberg Drive
|
|
Bridgeton, Missouri
|
63044
|
(Address of principal executive offices)
|
(Zip Code)
|
(314) 506-5500
|
(Registrant’s telephone number, including area code)
|
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes x No ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes ¨ No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
(Check one)
|
Large Accelerated Filer ¨
|
Accelerated Filer x
|
|
|
|
|
Non-Accelerated Filer ¨
|
Smaller Reporting Company ¨
|
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).Yes¨ No x
The number of shares outstanding of registrant's only class of stock as of May 3, 2011: Common stock, par value $.50 per share – 9,413,670 shares outstanding.
TABLE OF CONTENTS
PART I – Financial Information
|
|
|
|
|
Item 1.
|
FINANCIAL STATEMENTS
|
3 |
|
|
|
|
Consolidated Balance Sheets
|
|
|
March 31, 2011 (unaudited) and December 31, 2010
|
3
|
|
|
|
|
Consolidated Statements of Income
|
|
|
Three months ended March 31, 2011 and 2010 (unaudited)
|
4
|
|
|
|
|
Consolidated Statements of Cash Flows
|
|
|
Three months ended March 31, 2011 and 2010 (unaudited)
|
5
|
|
|
|
|
Notes to Consolidated Financial Statements (unaudited)
|
6
|
|
|
|
Item 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
|
|
|
AND RESULTS OF OPERATIONS
|
15
|
|
|
|
Item 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
23
|
|
|
|
Item 4.
|
CONTROLS AND PROCEDURES
|
23
|
|
|
|
PART II – Other Information – Items 1. – 6.
|
24
|
|
|
|
SIGNATURES
|
|
25
|
Forward-looking Statements - Factors That May Affect Future Results
This report may contain or incorporate by reference forward-looking statements made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Although we believe that, in making any such statements, our expectations are based on reasonable assumptions, forward-looking statements are not guarantees of future performance and involve risks, uncertainties, and other factors beyond our control, which may cause future performance to be materially different from expected performance summarized in the forward-looking statements. These risks, uncertainties and other factors are discussed in the section Part I, Item 1A, “Risk Factors” of the Company’s 2010 Annual Report on Form 10-K, filed with the Securities and Exchange Commission (“SEC”), which may be updated from time to time in our future filings with the SEC. We undertake no obligation to publicly update or revise any forward-looking statements to reflect changed assumptions, the occurrence of anticipated or unanticipated events, or changes to future results over time.
PART I.
|
FINANCIAL INFORMATION
|
ITEM 1.
|
FINANCIAL STATEMENTS
|
CASS INFORMATION SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands except Share and Per Share Data)
|
|
March 31,
2011
(Unaudited)
|
|
|
December 31,
2010
|
|
Assets
|
|
|
|
|
|
|
Cash and due from banks
|
|
$ |
11,541 |
|
|
$ |
12,277 |
|
Interest-bearing deposits in other financial institutions
|
|
|
26,490 |
|
|
|
67,299 |
|
Federal funds sold and other short-term investments
|
|
|
100,626 |
|
|
|
59,353 |
|
Cash and cash equivalents
|
|
|
138,657 |
|
|
|
138,929 |
|
Securities available-for-sale, at fair value
|
|
|
268,365 |
|
|
|
264,569 |
|
Loans
|
|
|
709,622 |
|
|
|
708,633 |
|
Less: Allowance for loan losses
|
|
|
12,377 |
|
|
|
11,891 |
|
Loans, net
|
|
|
697,245 |
|
|
|
696,742 |
|
Premises and equipment, net
|
|
|
9,598 |
|
|
|
9,617 |
|
Investments in bank-owned life insurance
|
|
|
14,324 |
|
|
|
14,191 |
|
Payments in excess of funding
|
|
|
41,540 |
|
|
|
33,609 |
|
Goodwill
|
|
|
7,471 |
|
|
|
7,471 |
|
Other intangible assets, net
|
|
|
241 |
|
|
|
268 |
|
Other assets
|
|
|
22,579 |
|
|
|
22,639 |
|
Total assets
|
|
$ |
1,200,020 |
|
|
$ |
1,188,035 |
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders’ Equity
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
Deposits
|
|
|
|
|
|
|
|
|
Noninterest-bearing
|
|
$ |
126,379 |
|
|
$ |
113,097 |
|
Interest-bearing
|
|
|
399,269 |
|
|
|
405,493 |
|
Total deposits
|
|
|
525,648 |
|
|
|
518,590 |
|
Accounts and drafts payable
|
|
|
514,155 |
|
|
|
516,107 |
|
Other liabilities
|
|
|
12,869 |
|
|
|
11,244 |
|
Total liabilities
|
|
|
1,052,672 |
|
|
|
1,045,941 |
|
|
|
|
|
|
|
|
|
|
Shareholders’ Equity:
|
|
|
|
|
|
|
|
|
Preferred stock, par value $.50 per share; 2,000,000
|
|
|
|
|
|
|
|
|
shares authorized and no shares issued
|
|
—
|
|
|
—
|
|
Common stock, par value $.50 per share; 20,000,000
|
|
|
|
|
|
|
|
|
shares authorized and 9,949,324 shares issued at
|
|
|
|
|
|
|
|
|
March 31, 2011 and December 31, 2010
|
|
|
4,975 |
|
|
|
4,975 |
|
Additional paid-in capital
|
|
|
46,496 |
|
|
|
46,653 |
|
Retained earnings
|
|
|
111,477 |
|
|
|
107,263 |
|
Common shares in treasury, at cost (541,054 shares at March 31, 2011 and 561,533 shares at December 31, 2010)
|
|
|
(13,155 |
) |
|
|
(13,549 |
) |
Accumulated other comprehensive loss
|
|
|
(2,445 |
) |
|
|
(3,248 |
) |
Total shareholders’ equity
|
|
|
147,348 |
|
|
|
142,094 |
|
Total liabilities and shareholders’ equity
|
|
$ |
1,200,020 |
|
|
$ |
1,188,035 |
|
See accompanying notes to unaudited consolidated financial statements.
CASS INFORMATION SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Dollars in Thousands except Per Share Data)
|
|
Three Months Ended
March 31,
|
|
|
|
2011
|
|
|
2010
|
|
Fee Revenue and Other Income:
|
|
|
|
|
|
|
Information services payment and processing revenue
|
|
$ |
14,347 |
|
|
$ |
12,745 |
|
Bank service fees
|
|
|
352 |
|
|
|
341 |
|
Other
|
|
|
133 |
|
|
|
139 |
|
Total fee revenue and other income
|
|
|
14,832 |
|
|
|
13,225 |
|
|
|
|
|
|
|
|
|
|
Interest Income:
|
|
|
|
|
|
|
|
|
Interest and fees on loans
|
|
|
10,253 |
|
|
|
9,427 |
|
Interest and dividends on securities:
|
|
|
|
|
|
|
|
|
Taxable
|
|
|
5 |
|
|
|
14 |
|
Exempt from federal income taxes
|
|
|
2,477 |
|
|
|
2,098 |
|
Interest on federal funds sold and other short-term investments
|
|
|
169 |
|
|
|
89 |
|
Total interest income
|
|
|
12,904 |
|
|
|
11,628 |
|
|
|
|
|
|
|
|
|
|
Interest Expense:
|
|
|
|
|
|
|
|
|
Interest on deposits
|
|
|
1,206 |
|
|
|
1,176 |
|
Total interest expense
|
|
|
1,206 |
|
|
|
1,176 |
|
Net interest income
|
|
|
11,698 |
|
|
|
10,452 |
|
Provision for loan losses
|
|
|
450 |
|
|
|
900 |
|
Net interest income after provision for loan losses
|
|
|
11,248 |
|
|
|
9,552 |
|
Total net revenue
|
|
|
26,080 |
|
|
|
22,777 |
|
|
|
|
|
|
|
|
|
|
Operating Expense:
|
|
|
|
|
|
|
|
|
Salaries and employee benefits
|
|
|
13,706 |
|
|
|
12,490 |
|
Occupancy
|
|
|
648 |
|
|
|
572 |
|
Equipment
|
|
|
847 |
|
|
|
898 |
|
Amortization of intangible assets
|
|
|
27 |
|
|
|
27 |
|
Other operating
|
|
|
2,906 |
|
|
|
2,210 |
|
Total operating expense
|
|
|
18,134 |
|
|
|
16,197 |
|
Income before income tax expense
|
|
|
7,946 |
|
|
|
6,580 |
|
Income tax expense
|
|
|
2,227 |
|
|
|
1,831 |
|
Net Income
|
|
$ |
5,719 |
|
|
$ |
4,749 |
|
|
|
|
|
|
|
|
|
|
Basic Earnings Per Share
|
|
$ |
.61 |
|
|
$ |
.51 |
|
Diluted Earnings Per Share
|
|
|
.60 |
|
|
|
.50 |
|
See accompanying notes to unaudited consolidated financial statements.
CASS INFORMATION SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in Thousands)
|
|
Three Months Ended
March 31,
|
|
|
|
2011
|
|
|
2010
|
|
Cash Flows From Operating Activities:
|
|
|
|
|
|
|
Net income
|
|
$ |
5,719 |
|
|
$ |
4,749 |
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
1,091 |
|
|
|
1,031 |
|
Provision for loan losses
|
|
|
450 |
|
|
|
900 |
|
Stock-based compensation expense
|
|
|
350 |
|
|
|
392 |
|
Increase (decrease) in income tax liability
|
|
|
1,868 |
|
|
|
(649 |
) |
Increase in pension liability
|
|
|
60 |
|
|
|
198 |
|
Other operating activities, net
|
|
|
(808 |
) |
|
|
(387 |
) |
Net cash provided by operating activities
|
|
|
8,730 |
|
|
|
6,234 |
|
|
|
|
|
|
|
|
|
|
Cash Flows From Investing Activities:
|
|
|
|
|
|
|
|
|
Proceeds from sales of securities available-for-sale
|
|
|
501 |
|
|
–
|
|
Proceeds from maturities of securities available-for-sale
|
|
|
5,385 |
|
|
–
|
|
Purchase of securities available-for-sale
|
|
|
(9,027 |
) |
|
–
|
|
Net increase in loans
|
|
|
(953 |
) |
|
|
(23,052 |
) |
Increase in payments in excess of funding
|
|
|
(7,931 |
) |
|
|
(5,512 |
) |
Purchases of premises and equipment, net
|
|
|
(465 |
) |
|
|
(207 |
) |
Net cash used in investing activities
|
|
|
(12,490 |
) |
|
|
(28,771 |
) |
|
|
|
|
|
|
|
|
|
Cash Flows From Financing Activities:
|
|
|
|
|
|
|
|
|
Net increase in noninterest-bearing demand deposits
|
|
|
13,282 |
|
|
|
3,168 |
|
Net decrease in interest-bearing demand and savings deposits
|
|
|
(8,170 |
) |
|
|
(22,573 |
) |
Net increase in time deposits
|
|
|
1,946 |
|
|
|
25,468 |
|
Net (decrease) increase in accounts and drafts payable
|
|
|
(1,952 |
) |
|
|
49,528 |
|
Cash dividends paid
|
|
|
(1,505 |
) |
|
|
(1,315 |
) |
Distribution of stock awards, net
|
|
|
(113 |
) |
|
|
(251 |
) |
Other financing activities, net
|
|
─
|
|
|
|
12 |
|
Net cash provided by financing activities
|
|
|
3,488 |
|
|
|
54,037 |
|
Net (decrease) increase in cash and cash equivalents
|
|
|
(272 |
) |
|
|
31,500 |
|
Cash and cash equivalents at beginning of period
|
|
|
138,929 |
|
|
|
79,294 |
|
Cash and cash equivalents at end of period
|
|
$ |
138,657 |
|
|
$ |
110,794 |
|
|
|
|
|
|
|
|
|
|
Supplemental information:
|
|
|
|
|
|
|
|
|
Cash paid for interest
|
|
$ |
1,186 |
|
|
$ |
1,125 |
|
Cash paid for income taxes
|
|
|
365 |
|
|
|
2,501 |
|
See accompanying notes to unaudited consolidated financial statements.
CASS INFORMATION SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1 – Basis of Presentation
The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation have been included. Certain amounts in the 2010 consolidated financial statements have been reclassified to conform to the 2011 presentation. For further information, refer to the audited consolidated financial statements and related footnotes included in Cass Information System, Inc.’s (the “Company” or “Cass”) Annual Report on Form 10-K for the year ended December 31, 2010.
Note 2 – Intangible Assets
The Company accounts for intangible assets in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 350, “Goodwill and Other Intangible Assets,” which requires that intangibles with indefinite useful lives be tested annually for impairment and those with finite useful lives be amortized over their useful lives. Details of the Company’s intangible assets are as follows:
|
|
March 31, 2011
|
|
|
December 31, 2010
|
|
(In thousands)
|
|
Gross Carrying
Amount
|
|
|
Accumulated
Amortization
|
|
|
Gross Carrying
Amount
|
|
|
Accumulated
Amortization
|
|
Assets eligible for amortization:
|
|
|
|
|
|
|
|
|
|
|
|
|
Customer List
|
|
|
750 |
|
|
|
(509 |
) |
|
|
750 |
|
|
|
(482 |
) |
Unamortized intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill
|
|
|
7,698 |
|
|
|
(227 |
) |
|
|
7,698 |
|
|
|
(227 |
) |
Total intangible assets
|
|
$ |
8,448 |
|
|
$ |
(736 |
) |
|
$ |
8,448 |
|
|
$ |
(709 |
) |
The customer list is amortized over seven years. Amortization of intangible assets amounted to $27,000 for both of the three-month periods ended March 31, 2011 and 2010. Estimated amortization of intangibles over the next five years is as follows: $107,000 in 2011 and 2012, $54,000 in 2013 and $0 in 2014.
Note 3 – Earnings Per Share
Basic earnings per share is computed by dividing net income by the weighted-average number of common shares outstanding. Diluted earnings per share is computed by dividing net income by the sum of the weighted-average number of common shares outstanding and the weighted-average number of potential common shares outstanding. There were no antidilutive shares in the three months ended March 31, 2011 or 2010. The calculations of basic and diluted earnings per share are as follows:
|
|
Three Months Ended
March 31,
|
|
(In thousands, except share and per share data)
|
|
2011
|
|
|
2010
|
|
Basic
|
|
|
|
|
|
|
Net income
|
|
$ |
5,719 |
|
|
$ |
4,749 |
|
Weighted-average common shares outstanding
|
|
|
9,356,641 |
|
|
|
9,328,697 |
|
|
|
|
|
|
|
|
|
|
Basic earnings per share
|
|
$ |
.61 |
|
|
$ |
.51 |
|
Diluted
|
|
|
|
|
|
|
|
|
Net income
|
|
$ |
5,719 |
|
|
$ |
4,749 |
|
Weighted-average common shares outstanding
|
|
|
9,356,641 |
|
|
|
9,328,697 |
|
Effect of dilutive restricted stock, stock options and stock appreciation rights
|
|
|
126,832 |
|
|
|
94,039 |
|
Weighted-average common shares outstanding assuming dilution
|
|
|
9,483,473 |
|
|
|
9,422,736 |
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share
|
|
$ |
.60 |
|
|
$ |
.50 |
|
Note 4 – Stock Repurchases
The Company maintains a treasury stock buyback program pursuant to which the Board of Directors has authorized the repurchase of up to 300,000 shares of the Company’s common stock. The Company did not repurchase any shares during the three-month periods ended March 31, 2011 and 2010. As of March 31, 2011, 168,000 shares remained available for repurchase under the program. Repurchases are made in the open market or through negotiated transactions from time to time depending on market conditions.
Note 5 – Comprehensive Income
For the three-month periods ended March 31, 2011 and 2010, unrealized gains and losses on securities available-for-sale and reclassification adjustments for gains included in net income were the Company’s other comprehensive income components. Comprehensive income is summarized as follows:
|
|
Three Months Ended
March 31,
|
|
(In thousands)
|
|
2011
|
|
|
2010
|
|
Net income
|
|
$ |
5,719 |
|
|
$ |
4,749 |
|
|
|
|
|
|
|
|
|
|
Other comprehensive income:
|
|
|
|
|
|
|
|
|
Net unrealized gain on securities available-for-sale, net of tax
|
|
|
803 |
|
|
|
1,321 |
|
|
|
|
|
|
|
|
|
|
Total comprehensive income
|
|
$ |
6,522 |
|
|
$ |
6,070 |
|
Note 6 – Industry Segment Information
The services provided by the Company are classified into two reportable segments: Information Services and Banking Services. Each of these segments provides distinct services that are marketed through different channels. They are managed separately due to their unique service, processing and capital requirements.
The Information Services segment provides freight, utility and telecommunication invoice processing and payment services to large corporations. The Banking Services segment provides banking services primarily to privately-held businesses and churches.
The Company’s accounting policies for segments are the same as those described in the summary of significant accounting policies in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010. Management evaluates segment performance based on net income after allocations for corporate expenses and income taxes. Transactions between segments are accounted for at what management believes to be fair value.
All revenue originates from and all long-lived assets are located within North America, and no revenue from any customer of any segment exceeds 10% of the Company’s consolidated revenue.
Assets represent actual assets owned by Information Services and there is no allocation methodology used. Loans are sold by Banking Services to Information Services to create liquidity when the Bank’s loan-to-deposit ratio is greater than 100%. Segment interest from customers is the actual interest earned on the loans owned by Information Services and Banking Services, respectively.
Summarized information about the Company’s operations in each industry segment is as follows:
(In thousands)
|
|
Information
Services
|
|
|
Banking
Services
|
|
|
Corporate,
Eliminations
and Other
|
|
|
Total
|
|
Quarter Ended March 31, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from customers
|
|
$ |
19,846 |
|
|
$ |
6,234 |
|
|
$ |
― |
|
|
$ |
26,080 |
|
Intersegment income (expense)
|
|
|
2,626 |
|
|
|
457 |
|
|
|
(3,083 |
) |
|
|
― |
|
Net income
|
|
|
3,552 |
|
|
|
2,167 |
|
|
|
― |
|
|
|
5,719 |
|
Goodwill
|
|
|
7,335 |
|
|
|
136 |
|
|
|
― |
|
|
|
7,471 |
|
Other intangible assets, net
|
|
|
241 |
|
|
|
― |
|
|
|
― |
|
|
|
241 |
|
Total assets
|
|
|
615,586 |
|
|
|
591,457 |
|
|
|
(7,023 |
) |
|
|
1,200,020 |
|
Quarter Ended March 31, 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from customers
|
|
$ |
17,228 |
|
|
$ |
5,549 |
|
|
$ |
― |
|
|
$ |
22,777 |
|
Intersegment income (expense)
|
|
|
2,275 |
|
|
|
380 |
|
|
|
(2,655 |
) |
|
|
― |
|
Net income
|
|
|
2,904 |
|
|
|
1,845 |
|
|
|
― |
|
|
|
4,749 |
|
Goodwill
|
|
|
7,335 |
|
|
|
136 |
|
|
|
― |
|
|
|
7,471 |
|
Other intangible assets, net
|
|
|
348 |
|
|
|
― |
|
|
|
― |
|
|
|
348 |
|
Total assets
|
|
|
579,766 |
|
|
|
498,105 |
|
|
|
(4,710 |
) |
|
|
1,073,161 |
|
Note 7 – Loans by Type
A summary of loan categories by segment and class is as follows:
(In thousands)
|
|
March 31,
2011
|
|
|
December 31,
2010
|
|
Commercial and industrial
|
|
$ |
149,026 |
|
|
$ |
135,061 |
|
Real estate:
|
|
|
|
|
|
|
|
|
Mortgage – Commercial
|
|
|
136,206 |
|
|
|
151,201 |
|
Mortgage – Church & related
|
|
|
361,388 |
|
|
|
365,378 |
|
Construction – Commercial
|
|
|
16,427 |
|
|
|
18,434 |
|
Construction – Church & related
|
|
|
44,598 |
|
|
|
36,318 |
|
Industrial revenue bonds
|
|
|
931 |
|
|
|
1,014 |
|
Other
|
|
|
1,046 |
|
|
|
1,227 |
|
Total loans
|
|
$ |
709,622 |
|
|
$ |
708,633 |
|
The following tables present the aging of loans by loan classification at March 31, 2011 and December 31, 2010:
(In thousands)
|
|
30-59
Days
|
|
|
60-89
Days
|
|
|
90 Days
and
Over
|
|
|
Total
Past
Due
|
|
|
Current
|
|
|
Total
Loans
|
|
March 31, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and industrial
|
|
$ |
67 |
|
|
$ |
¾ |
|
|
$ |
26 |
|
|
$ |
93 |
|
|
$ |
148,933 |
|
|
$ |
149,026 |
|
Real estate:
|
|
|
|
|
|
|
¾ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage – Commercial
|
|
|
¾ |
|
|
|
¾ |
|
|
|
475 |
|
|
|
475 |
|
|
|
135,731 |
|
|
|
136,206 |
|
Mortgage – Church & related
|
|
|
490 |
|
|
|
¾ |
|
|
|
¾ |
|
|
|
490 |
|
|
|
360,898 |
|
|
|
361,388 |
|
Construction – Commercial
|
|
|
¾ |
|
|
|
¾ |
|
|
|
¾ |
|
|
|
¾ |
|
|
|
16,427 |
|
|
|
16,427 |
|
Construction – Church & related
|
|
|
¾ |
|
|
|
¾ |
|
|
|
¾ |
|
|
|
¾ |
|
|
|
44,598 |
|
|
|
44,598 |
|
Industrial revenue bonds
|
|
|
¾ |
|
|
|
¾ |
|
|
|
¾ |
|
|
|
¾ |
|
|
|
931 |
|
|
|
931 |
|
Other
|
|
|
¾ |
|
|
|
¾ |
|
|
|
¾ |
|
|
|
¾ |
|
|
|
1,046 |
|
|
|
1,046 |
|
Total
|
|
$ |
557 |
|
|
$ |
¾ |
|
|
$ |
501 |
|
|
$ |
1,058 |
|
|
$ |
708,564 |
|
|
$ |
709,622 |
|
December 31, 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and industrial
|
|
$ |
105 |
|
|
$ |
¾ |
|
|
$ |
¾ |
|
|
$ |
105 |
|
|
$ |
134,956 |
|
|
$ |
135,061 |
|
Real estate:
|
|
|
|
|
|
|
¾ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage – Commercial
|
|
|
145 |
|
|
|
¾ |
|
|
|
490 |
|
|
|
635 |
|
|
|
150,566 |
|
|
|
151,201 |
|
Mortgage – Church & related
|
|
|
1,954 |
|
|
|
¾ |
|
|
|
¾ |
|
|
|
1,954 |
|
|
|
363,424 |
|
|
|
365,378 |
|
Construction – Commercial
|
|
|
¾ |
|
|
|
¾ |
|
|
|
¾ |
|
|
|
¾ |
|
|
|
18,434 |
|
|
|
18,434 |
|
Construction – Church & related
|
|
|
¾ |
|
|
|
¾ |
|
|
|
¾ |
|
|
|
¾ |
|
|
|
36,318 |
|
|
|
36,318 |
|
Industrial revenue bonds
|
|
|
¾ |
|
|
|
¾ |
|
|
|
¾ |
|
|
|
¾ |
|
|
|
1,014 |
|
|
|
1,014 |
|
Other
|
|
|
¾ |
|
|
|
¾ |
|
|
|
¾ |
|
|
|
¾ |
|
|
|
1,227 |
|
|
|
1,227 |
|
Total
|
|
$ |
2,204 |
|
|
$ |
¾ |
|
|
$ |
490 |
|
|
$ |
2,694 |
|
|
$ |
705,939 |
|
|
$ |
708,633 |
|
The following tables present the recorded investment and unpaid principal balance for impaired loans at March 31, 2011 and December 31, 2010.
(In thousands)
|
|
Recorded
Investment
|
|
|
Unpaid
Principal
Balance
|
|
|
Related
Allowance for
Loan Losses
|
|
March 31, 2011
|
|
|
|
|
|
|
|
|
|
Commercial and industrial:
|
|
|
|
|
|
|
|
|
|
Nonaccrual
|
|
$ |
36 |
|
|
$ |
36 |
|
|
$ |
4 |
|
Real estate – mortgage:
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual
|
|
|
503 |
|
|
|
503 |
|
|
|
116 |
|
Total impaired loans
|
|
$ |
539 |
|
|
$ |
539 |
|
|
$ |
120 |
|
December 31, 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and industrial:
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual
|
|
$ |
46 |
|
|
$ |
46 |
|
|
$ |
4 |
|
Real estate – mortgage:
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual
|
|
|
519 |
|
|
|
519 |
|
|
|
116 |
|
Total impaired loans
|
|
$ |
565 |
|
|
$ |
565 |
|
|
$ |
120 |
|
Impaired loans consist primarily of nonaccrual loans and loans greater than 90 days past due and still accruing interest. Management measures impairment in accordance with FASB ASC 310, “Allowance for Credit Losses.” At March 31, 2011 and December 31, 2010, all impaired loans were evaluated based on the fair value of the collateral. The fair value of the collateral is based upon an observable market price or current appraised value and therefore, the Company classifies these assets as nonrecurring Level 2. There were no loans delinquent 90 days or more and still accruing interest at March 31, 2011 and December 31, 2010. There are two foreclosed loans with a book value of $1,910,000 which have been reclassified as other real estate owned (included in other assets) as of March 31, 2011 and December 31, 2010.
The following table presents the credit exposure of the loan portfolio by internally assigned credit grade as of March 31, 2011 and December 31, 2010:
(In thousands)
|
|
Commercial
and
Industrial
|
|
|
Real
Estate
Mortgage
|
|
|
Real Estate
Construction
|
|
|
Other
|
|
|
Total
|
|
March 31, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans subject to normal monitoring1
|
|
$ |
145,053 |
|
|
$ |
472,062 |
|
|
$ |
61,025 |
|
|
$ |
1,977 |
|
|
$ |
680,117 |
|
Loans subject to special monitoring2:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performing
|
|
|
3,937 |
|
|
|
25,029 |
|
|
|
¾ |
|
|
|
¾ |
|
|
|
28,966 |
|
Nonperforming
|
|
|
36 |
|
|
|
503 |
|
|
|
¾ |
|
|
|
¾ |
|
|
|
539 |
|
Total
|
|
$ |
149,026 |
|
|
$ |
497,594 |
|
|
$ |
61,025 |
|
|
$ |
1,977 |
|
|
$ |
709,622 |
|
December 31, 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans subject to normal monitoring1
|
|
$ |
130,148 |
|
|
$ |
495,573 |
|
|
$ |
54,752 |
|
|
$ |
2,241 |
|
|
$ |
682,714 |
|
Loans subject to special monitoring2:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performing
|
|
|
4,867 |
|
|
|
20,487 |
|
|
|
¾ |
|
|
|
¾ |
|
|
|
25,354 |
|
Nonperforming
|
|
|
46 |
|
|
|
519 |
|
|
|
¾ |
|
|
|
¾ |
|
|
|
565 |
|
Total
|
|
$ |
135,061 |
|
|
$ |
516,579 |
|
|
$ |
54,752 |
|
|
$ |
2,241 |
|
|
$ |
708,633 |
|
1Loans subject to normal monitoring involve borrowers of acceptable-to-strong credit quality and risk, who have the apparent ability to satisfy their loan obligation.
2Loans subject to special monitoring possess some credit deficiency or potential weakness which requires a high level of management attention.
The following table provides information regarding the changes in the allowance for loan losses by segment from December 31, 2010 to March 31, 2011.
(In thousands)
|
|
December 31,
2010
|
|
|
Charge-Offs
|
|
|
Recoveries
|
|
|
Provision
|
|
|
March 31,
2011
|
|
Commercial and industrial
|
|
$ |
2,728 |
|
|
|
¾ |
|
|
$ |
35 |
|
|
$ |
213 |
|
|
$ |
2,976 |
|
Real estate - mortgage
|
|
|
8,491 |
|
|
|
¾ |
|
|
|
1 |
|
|
|
172 |
|
|
|
8,664 |
|
Real estate - construction
|
|
|
656 |
|
|
|
¾ |
|
|
|
¾ |
|
|
|
67 |
|
|
|
723 |
|
Other
|
|
|
16 |
|
|
|
¾ |
|
|
|
¾ |
|
|
|
(2 |
) |
|
|
14 |
|
Total
|
|
$ |
11,891 |
|
|
|
¾ |
|
|
$ |
36 |
|
|
$ |
450 |
|
|
$ |
12,377 |
|
Note 8 – Commitments and Contingencies
In the normal course of business, the Company is party to activities that contain credit, market and operational risks that are not reflected in whole or in part in the Company’s consolidated financial statements. Such activities include traditional off-balance sheet credit-related financial instruments and commitments under operating leases. These financial instruments include commitments to extend credit, commercial letters of credit and standby letters of credit. The Company’s maximum potential exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit, commercial letters of credit and standby letters of credit is represented by the contractual amounts of those instruments. At March 31, 2011 and December 31, 2010, no amounts have been accrued for any estimated losses for these instruments.
Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commercial and standby letters of credit are conditional commitments issued by the Company or its subsidiaries to guarantee the performance of a customer to a third party. These off-balance sheet financial instruments generally have fixed expiration dates or other termination clauses and may require payment of a fee. At March 31, 2011 the balance of unused loan commitments, standby and commercial letters of credit were $27,676,000, $22,946,000, and $3,940,000, respectively. Since some of the financial instruments may expire without being drawn upon, the total amounts do not necessarily represent future cash requirements. Commitments to extend credit and letters of credit are subject to the same underwriting standards as those financial instruments included on the consolidated balance sheets. The Company evaluates each customer’s credit worthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary upon extension of the credit, is based on management’s credit evaluation of the borrower. Collateral held varies, but is generally accounts receivable, inventory, residential or income-producing commercial property or equipment. In the event of nonperformance, the Company or its subsidiaries may obtain and liquidate the collateral to recover amounts paid under its guarantees on these financial instruments.
The following table summarizes contractual cash obligations of the Company related to operating lease commitments and time deposits at March 31, 2011:
|
|
Amount of Commitment Expiration per Period
|
|
(In thousands)
|
|
Total
|
|
|
Less than
1 year
|
|
|
1-3
Years
|
|
|
3-5
Years
|
|
|
Over 5
Years
|
|
Operating lease commitments
|
|
$ |
2,591 |
|
|
$ |
599 |
|
|
$ |
1,015 |
|
|
$ |
606 |
|
|
$ |
371 |
|
Time deposits
|
|
|
159,064 |
|
|
|
138,010 |
|
|
|
18,509 |
|
|
|
2,545 |
|
|
|
― |
|
Total
|
|
$ |
161,655 |
|
|
$ |
138,609 |
|
|
$ |
19,524 |
|
|
$ |
3,151 |
|
|
$ |
371 |
|
The Company and its subsidiaries are involved in various pending legal actions and proceedings in which claims for damages are asserted. Management, after discussion with legal counsel, believes the ultimate resolution of these legal actions and proceedings will not have a material effect upon the Company’s consolidated financial position or results of operations.
Note 9 – Stock-Based Compensation
In 2007, the Board and the Company’s shareholders approved the 2007 Omnibus Incentive Stock Plan (the “Omnibus Plan”). The Omnibus Plan permits the issuance of up to 880,000 shares of the Company’s common stock in the form of stock options, stock appreciation rights (“SARs”), restricted stock, restricted stock units and performance awards. The Company issues shares out of treasury stock for these awards. During the three months ended March 31, 2011, 20,617 restricted shares and 75,016 SARs were granted under the Omnibus Plan.
The Company also continues to maintain its other stock-based incentive plans for the restricted common stock previously awarded and the options previously issued and still outstanding. These plans have been superseded by the Omnibus Plan and accordingly, any available restricted stock and stock option grants not yet issued have been cancelled.
Restricted Stock
Restricted shares are amortized to expense over the three-year vesting period. As of March 31, 2011, the total unrecognized compensation expense related to non-vested common stock was $1,290,000 and the related weighted-average period over which it is expected to be recognized is approximately 1.27 years.
Following is a summary of the activity of the restricted stock:
|
|
Three Months Ended
March 31, 2011
|
|
|
|
Shares
|
|
|
Fair Value
|
|
Balance at December 31, 2010
|
|
|
50,271 |
|
|
$ |
28.51 |
|
Granted
|
|
|
20,617 |
|
|
|
36.24 |
|
Vested
|
|
|
(21,980 |
) |
|
|
27.42 |
|
Forfeited
|
|
|
― |
|
|
|
― |
|
Balance at March 31, 2011
|
|
|
48,908 |
|
|
$ |
32.26 |
|
Stock Options
Stock options vest and expire over a period not to exceed seven years. As of March 31, 2011, the total unrecognized compensation expense related to non-vested stock options was $27,000, and the related weighted-average period over which it is expected to be recognized is approximately 1.6 years. Following is a summary of the activity of the stock options during the three-month period ended March 31, 2011:
|
|
|
|
|
Weighted-
Average
|
|
|
Average
Remaining
|
|
|
Aggregate
Intrinsic
|
|
|
|
|
|
|
Exercise
|
|
|
Contractual
|
|
|
Value
|
|
|
|
Shares
|
|
|
Price
|
|
|
Term Years
|
|
|
(In thousands)
|
|
Outstanding at December 31, 2010
|
|
|
36,628 |
|
|
$ |
18.36 |
|
|
|
1.56 |
|
|
$ |
717 |
|
Exercised
|
|
|
5,756 |
|
|
|
13.04 |
|
|
|
|
|
|
|
|
|
Outstanding at March 31, 2011
|
|
|
30,872 |
|
|
$ |
19.24 |
|
|
|
1.54 |
|
|
|
619 |
|
Exercisable at March 31, 2011
|
|
|
27,532 |
|
|
$ |
19.06 |
|
|
|
1.51 |
|
|
|
557 |
|
The total intrinsic value of options exercised was $140,000, and $29,000, for the three-month periods ended March 31, 2011 and 2010, respectively. Following is a summary of the activity of the non-vested stock options during the three-month period ended March 31, 2011:
|
|
Shares
|
|
|
Weighted-Average
Grant Date
Fair Value
|
|
Non-vested at December 31, 2010
|
|
|
12,440 |
|
|
$ |
2.94 |
|
Vested
|
|
|
9,100 |
|
|
|
2.93 |
|
Non-vested at March 31, 2011
|
|
|
3,340 |
|
|
$ |
2.95 |
|
SARs
SARs vest over a three-year period, with one-third of the shares vesting and becoming exercisable each year on the anniversary date of the grant, and they expire 10 years from the grant date. As of March 31, 2011, the total unrecognized compensation expense was $1,045,000 and the related weighted-average period over which it is expected to be recognized is 1.6 years. Following is a summary of the activity of the Company’s SARs program for the three-month period ended March 31, 2011:
|
|
|
|
|
Weighted-
Average
|
|
|
Average
Remaining
|
|
|
Aggregate
Intrinsic
|
|
|
|
|
|
|
Exercise
|
|
|
Contractual
|
|
|
Value
|
|
|
|
Shares
|
|
|
Price
|
|
|
Term Years
|
|
|
(In thousands)
|
|
Outstanding at December 31, 2010
|
|
|
241,755 |
|
|
$ |
27.34 |
|
|
|
7.83 |
|
|
$ |
2,562 |
|
Granted
|
|
|
75,016 |
|
|
|
36.24 |
|
|
|
|
|
|
|
|
|
Exercised
|
|
|
(6,754 |
) |
|
|
26.01 |
|
|
|
|
|
|
|
|
|
Outstanding at March 31, 2011
|
|
|
310,017 |
|
|
$ |
29.53 |
|
|
|
8.15 |
|
|
$ |
3,027 |
|
Exercisable at March 31, 2011
|
|
|
178,800 |
|
|
$ |
27.51 |
|
|
|
7.37 |
|
|
$ |
2,107 |
|
Following is a summary of the activity of non-vested SARs during the three-month period ended March 31, 2011:
|
|
Shares
|
|
|
Weighted-Average
Grant Date
Fair Value
|
|
Non-vested at December 31, 2010
|
|
|
141,201 |
|
|
$ |
27.18 |
|
Granted
|
|
|
75,016 |
|
|
|
36.24 |
|
Vested
|
|
|
(85,000 |
) |
|
|
27.31 |
|
Non-vested at March 31, 2011
|
|
|
131,217 |
|
|
$ |
32.28 |
|
The Company uses the Black-Scholes pricing model to determine the fair value of the SARs at the date of grant. Following are the assumptions used to estimate the per share fair value of SARs granted:
|
|
Three Months Ended
March 31,
|
|
|
|
2011
|
|
|
2010
|
|
Risk-free interest rate
|
|
|
2.70 |
% |
|
|
3.33 |
% |
Expected life
|
|
7 yrs.
|
|
|
7 yrs.
|
|
Expected volatility
|
|
|
27.86 |
% |
|
|
30.00 |
% |
Expected dividend yield
|
|
|
1.77 |
% |
|
|
1.86 |
% |
The risk-free interest rate is based on the zero-coupon U.S. Treasury yield for the period equal to the expected life of the SARs at the time of the grant. The expected life was derived using the historical exercise activity. The Company uses historical volatility for a period equal to the expected life of the rights using average monthly closing market prices of the Company’s stock as reported on The Nasdaq Global Market. The expected dividend yield is based on the Company’s current rate of annual dividends.
Note 10 – Defined Pension Plans
The Company has a noncontributory defined benefit pension plan, which covers most of its employees. The Company accrues and makes contributions designed to fund normal service costs on a current basis using the projected unit credit with service proration method to amortize prior service costs arising from improvements in pension benefits and qualifying service prior to the establishment of the plan over a period of approximately 30 years. Disclosure information is based on a measurement date of December 31 of the corresponding year. The following table represents the components of the net periodic pension costs:
(In thousands)
|
|
Estimated
2011
|
|
|
Actual
2010
|
|
Service cost – benefits earned during the year
|
|
$ |
2,079 |
|
|
$ |
1,771 |
|
Interest cost on projected benefit obligation
|
|
|
2,457 |
|
|
|
2,290 |
|
Expected return on plan assets
|
|
|
(3,314 |
) |
|
|
(2,440 |
) |
Net amortization and deferral
|
|
|
642 |
|
|
|
616 |
|
Net periodic pension cost
|
|
$ |
1,864 |
|
|
$ |
2,237 |
|
Pension costs recorded to expense were $466,000 and $542,000 for the three-month periods ended March 31, 2011 and 2010, respectively. The decrease in pension costs is primarily due to the asset gain in the year ended December 31, 2010. The Company made a contribution of $450,000 to the plan during the three-month period ended March 31, 2011 and expects to contribute at least an additional $1,350,000 in 2011.
In addition to the above funded benefit plan, the Company has an unfunded supplemental executive retirement plan which covers key executives of the Company. This is a noncontributory plan in which the Company and its subsidiaries make accruals designed to fund normal service costs on a current basis using the same method and criteria as its defined benefit plan. The following table represents the components of the net periodic pension costs for 2010 and an estimate for 2011:
(In thousands)
|
|
Estimated
2011
|
|
|
Actual
2010
|
|
Service cost – benefits earned during the year
|
|
$ |
90 |
|
|
$ |
78 |
|
Interest cost on projected benefit obligation
|
|
|
295 |
|
|
|
315 |
|
Net amortization
|
|
|
249 |
|
|
|
258 |
|
Net periodic pension cost
|
|
$ |
634 |
|
|
$ |
651 |
|
Pension costs recorded to expense were $158,000 and $162,000 for the three-month periods ended March 31, 2011 and 2010, respectively.
Note 11 – Income Taxes
As of March 31, 2011, the Company’s unrecognized tax benefits were approximately $2,016,000, of which $1,568,000 would, if recognized, affect the Company’s effective tax rate. As of December 31, 2010, the Company’s unrecognized tax benefits were approximately $1,877,000, of which $1,465,000 would, if recognized, affect the Company’s effective tax rate. During the next twelve months, the Company may realize a reduction of its unrecognized tax benefits of approximately $451,000 due to the lapse of federal and state statutes of limitations.
The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. The Company had $120,000 and $106,000 of gross interest accrued as of March 31, 2011 and December 31, 2010 respectively. There were no penalties for unrecognized tax benefits accrued at March 31, 2011 and December 31, 2010.
The Company is subject to income tax in the U.S. federal jurisdiction and numerous state jurisdictions. U.S. federal income tax returns for tax years 2006 through 2009 remain subject to examination by the Internal Revenue Service. In addition, the Company is subject to state tax examinations for the tax years 2005 through 2009.
Note 12 – Investment Securities Available for Sale
Investment securities available-for-sale are recorded at fair value on a recurring basis. The Company’s investment securities available-for-sale are measured at fair value using Level 2 valuations. The market evaluation utilizes several sources which include “observable inputs” rather than “significant unobservable inputs” and therefore falls into the Level 2 category. The amortized cost, gross unrealized gains, gross unrealized losses and fair value of investment securities are summarized as follows:
|
|
March 31, 2011
|
|
(In thousands)
|
|
Amortized
Cost
|
|
|
Gross
Unrealized
Gains
|
|
|
Gross
Unrealized
Losses
|
|
|
Fair Value
|
|
State and political subdivisions
|
|
$ |
258,491 |
|
|
$ |
10,704 |
|
|
$ |
830 |
|
|
$ |
268,365 |
|
|
|
December 31, 2010
|
|
(In thousands)
|
|
Amortized
Cost
|
|
|
Gross
Unrealized
Gains
|
|
|
Gross
Unrealized
Losses
|
|
|
Fair Value
|
|
State and political subdivisions
|
|
$ |
255,929 |
|
|
$ |
9,829 |
|
|
$ |
1,189 |
|
|
$ |
264,569 |
|
The fair values of securities with unrealized losses are as follows:
|
March 31, 2011 |
|
|
Less than 12 months
|
|
12 months or more
|
|
Total
|
|
|
Estimated
|
|
Unrealized
|
|
Estimated
|
|
Unrealized
|
|
Estimated
|
|
Unrealized
|
|
(In thousands)
|
fair value
|
|
losses
|
|
fair value
|
|
losses
|
|
Fair value
|
|
losses
|
|
State and political subdivisions
|
|
$ |
42,626 |
|
|
$ |
830 |
|
|
$ |
― |
|
|
$ |
― |
|
|
$ |
42,626 |
|
|
$ |
830 |
|
|
|
December 31, 2010 |
|
|
|
Less than 12 months
|
|
|
12 months or more
|
|
|
Total
|
|
|
|
Estimated
|
|
|
Unrealized
|
|
|
Estimated
|
|
|
Unrealized
|
|
|
Estimated
|
|
|
Unrealized
|
|
(In thousands)
|
|
fair value
|
|
|
losses
|
|
|
fair value
|
|
|
losses
|
|
|
Fair value
|
|
|
losses
|
|
State and political subdivisions
|
|
$ |
53,741 |
|
|
$ |
1,189 |
|
|
$ |
― |
|
|
$ |
― |
|
|
$ |
53,741 |
|
|
$ |
1,189 |
|
There were 51 securities (none greater than 12 months) in an unrealized loss position as of March 31, 2011. There were 61 securities (none greater than 12 months) in an unrealized loss position as of December 31, 2010. All unrealized losses were reviewed to determine whether the losses were other than temporary. Management believes that all unrealized losses are temporary since they were market driven, and the Company has the ability and intent to hold these securities until maturity.
The amortized cost and fair value of investment securities by contractual maturity are shown in the following table. Expected maturities may differ from contractual maturities because borrowers have the right to prepay obligations with or without prepayment penalties.
|
|
March 31, 2011
|
|
(In thousands)
|
|
Amortized Cost
|
|
|
Fair Value
|
|
Due in 1 year or less
|
|
$ |
15,184 |
|
|
$ |
15,467 |
|
Due after 1 year through 5 years
|
|
|
35,278 |
|
|
|
37,541 |
|
Due after 5 years through 10 years
|
|
|
102,260 |
|
|
|
109,468 |
|
Due after 10 years
|
|
|
105,769 |
|
|
|
105,889 |
|
Total
|
|
$ |
258,491 |
|
|
$ |
268,365 |
|
There were no securities pledged to secure public deposits and for other purposes at March 31, 2011.
Proceeds from sales of investment securities classified as available for sale were $501,000 and $0 for the first three months of 2011 and 2010, respectively. There were no gross realized gains or losses for the first three months of 2011 and 2010.
Note 13 – Fair Value of Financial Instruments
Following is a summary of the carrying amounts and fair values of the Company’s financial instruments:
|
|
March 31, 2011
|
|
|
December 31, 2010
|
|
(In thousands)
|
|
Carrying
Amount
|
|
|
Fair Value
|
|
|
Carrying
Amount
|
|
|
Fair Value
|
|
Balance sheet assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$ |
138,657 |
|
|
$ |
138,657 |
|
|
$ |
138,929 |
|
|
$ |
138,929 |
|
Investment securities
|
|
|
268,365 |
|
|
|
268,365 |
|
|
|
264,569 |
|
|
|
264,569 |
|
Loans, net
|
|
|
697,245 |
|
|
|
701,207 |
|
|
|
696,742 |
|
|
|
710,294 |
|
Accrued interest receivable
|
|
|
5,938 |
|
|
|
5,938 |
|
|
|
5,857 |
|
|
|
5,857 |
|
Total
|
|
$ |
1,110,205 |
|
|
$ |
1,114,167 |
|
|
$ |
1,106,097 |
|
|
$ |
1,119,649 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance sheet liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
$ |
525,648 |
|
|
$ |
525,648 |
|
|
$ |
518,590 |
|
|
$ |
518,590 |
|
Accounts and drafts payable
|
|
|
514,155 |
|
|
|
514,155 |
|
|
|
516,107 |
|
|
|
516,107 |
|
Short-term borrowings
|
|
|
― |
|
|
|
― |
|
|
|
9 |
|
|
|
9 |
|
Accrued interest payable
|
|
|
12,869 |
|
|
|
12,869 |
|
|
|
208 |
|
|
|
208 |
|
Total
|
|
$ |
1,052,672 |
|
|
$ |
1,052,672 |
|
|
$ |
1,034,914 |
|
|
$ |
1,034,914 |
|
The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value:
Cash and Other Short-term Instruments – For cash and cash equivalents, accrued interest receivable, accounts and drafts payable, short-term borrowings and accrued interest payable, the carrying amount is a reasonable estimate of fair value because of the demand nature or short maturities of these instruments.
Loans – The fair value of loans is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities.
Deposits – The fair value of demand deposits, savings deposits and certain money market deposits is the amount payable on demand at the reporting date. The fair value of fixed-maturity certificates of deposit is estimated using the rates currently offered for deposits of similar remaining maturities. The fair value estimates above do not include the benefit that results from the low-cost funding provided by the deposit liabilities compared to the cost of borrowing funds in the market or the benefit derived from the customer relationship inherent in existing deposits.
Note 14 – Subsequent Events
In accordance with FASB ASC 855, “Subsequent Events,” the Company has evaluated subsequent events after the
consolidated balance sheet date of March 31, 2011 and there were no events identified that would require additional disclosures to prevent the Company’s consolidated financial statements from being misleading.
ITEM 2.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
Overview
Cass provides payment and information processing services to large manufacturing, distribution and retail enterprises from its offices/locations in St. Louis, Missouri, Columbus, Ohio, Boston, Massachusetts, Greenville, South Carolina and Wellington, Kansas. The Company’s services include transportation invoice rating, payment processing, auditing, and the generation of accounting and transportation information. Cass also processes and pays utility invoices, which include electricity, gas and telecommunications expenses, and is a provider of telecom expense management solutions. Cass extracts, stores and presents information from transportation, utility and telecommunication invoices, assisting its customers’ transportation, energy and information technology managers in making decisions that will enable them to improve operating performance. The Company receives data from multiple sources, electronic and otherwise, and processes the data to accomplish the specific operating requirements of its customers. It then provides the data in a central repository for access and archiving. The data is finally transformed into information through the Company’s databases that allow client interaction as required and provide Internet-based tools for analytical processing. The Company also, through Cass Commercial Bank, its St. Louis, Missouri based bank subsidiary (the “Bank”), provides banking services in the St. Louis metropolitan area, Orange County, California and other selected cities in the United States. In addition to supporting the Company’s payment operations, the Bank provides banking services to its target markets, which include privately-owned businesses and churches and church-related ministries.
The specific payment and information processing services provided to each customer are developed individually to meet each customer’s requirements, which can vary greatly. In addition, the degree of automation such as electronic data interchange, imaging, and web-based solutions varies greatly among customers and industries. These factors combine so that pricing varies greatly among the customer base. In general, however, Cass is compensated for its processing services through service fees and investment of account balances generated during the payment process. The amount, type and calculation of service fees vary greatly by service offering, but generally follow the volume of transactions processed. Interest income from the balances generated during the payment processing cycle is affected by the amount of time Cass holds the funds prior to payment and the dollar volume processed. Both the number of transactions processed and the dollar volume processed are therefore key metrics followed by management. Other factors will also influence revenue and profitability, such as changes in the general level of interest rates, which have a significant effect on net interest income. The funds generated by these processing activities are invested in overnight investments, investment grade securities and loans generated by the Bank. The Bank earns most of its revenue from net interest income, or the difference between the interest earned on its loans and investments and the interest paid on its deposits and other borrowings. The Bank also assesses fees on other services such as cash management services.
Industry-wide factors that impact the Company include the willingness of large corporations to outsource key business functions such as transportation, utility and telecommunication payment and audit. The benefits that can be achieved by outsourcing transaction processing and the management information generated by Cass’ systems can be influenced by factors such as the competitive pressures within industries to improve profitability, the general level of transportation costs, deregulation of energy costs and consolidation of telecommunication providers. Economic factors that impact the Company include the general level of economic activity that can affect the volume and size of invoices processed, the ability to hire and retain qualified staff and the growth and quality of the loan portfolio. As lower levels of economic activity are encountered, such as those experienced in 2009, the number and total dollar amount of transactions processed by the Company may decline, thereby reducing fee revenue, interest income, and possibly liquidity. Conversely, improving economic conditions, will tend to increase fee revenue, interest income and liquidity. The general level of interest rates also has a significant effect on the revenue of the Company. As discussed in greater detail in Item 7A, “Quantitative and Qualitative Disclosures about Market Risk” in the Company’s 2010 Annual Report on Form 10-K, a decline in the general level of interest rates can have a negative impact on net interest income.
Currently, management views Cass’ major opportunity as the continued expansion of its payment and information processing service offering and customer base. Management intends to accomplish this by maintaining the Company’s lead in applied technology, which when combined with the security and processing controls of the Bank, makes Cass unique in the industry.
Critical Accounting Policies
The Company has prepared the consolidated financial statements in this report in accordance with the FASB Accounting Standards Codification (“ASC”). In preparing the consolidated financial statements, management makes estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. These estimates have been generally accurate in the past, have been consistent and have not required any material changes. There can be no assurances that actual results will not differ from those estimates. Certain accounting policies that require significant management estimates and are deemed critical to our results of operations or financial position have been discussed with the Audit Committee of the Board of Directors and are described below.
Allowance for Loan Losses. The Company performs periodic and systematic detailed reviews of its loan portfolio to assess overall collectability. The level of the allowance for loan losses reflects management’s estimate of the collectability of the loan portfolio. Although these estimates are based on established methodologies for determining allowance requirements, actual results can differ significantly from estimated results. These policies affect both segments of the Company. The impact and associated risks related to these policies on the Company’s business operations are discussed in the “Provision and Allowance for Loan Losses” section of this report. The Company’s estimates have been materially accurate in the past, and accordingly, we expect to continue to utilize the present processes.
Impairment of Assets. The Company periodically evaluates certain long-term assets such as intangible assets including goodwill, foreclosed assets and assets held for sale for impairment. Generally, these assets are initially recorded at cost, and recognition of impairment is required when events and circumstances indicate that the carrying amounts of these assets will not be recoverable in the future. If impairment occurs, various methods of measuring impairment may be called for depending on the circumstances and type of asset, including quoted market prices, estimates based on similar assets, and estimates based on valuation techniques such as discounted projected cash flows. The Company had no impairment of goodwill and intangible assets for the three months ended March 31, 2011 or for the fiscal year ended December 31, 2010, and management does not anticipate any future impairment loss. Investment securities available-for-sale are measured at fair value as calculated by an independent research firm. The market evaluation utilizes several sources which include “observable inputs” rather than “significant unobservable inputs.” These policies affect both segments of the Company and require significant management assumptions and estimates that could result in materially different results if conditions or underlying circumstances change.
Income Taxes. The objectives of accounting for income taxes are to recognize the amount of taxes payable or refundable for the current year and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in an entity's financial statements or tax returns. Judgment is required in addressing the future tax consequences of events that have been recognized in the Company’s financial statements or tax returns such as the realization of deferred tax assets or changes in tax laws or interpretations thereof. In addition, the Company is subject to the continuous examination of its income tax returns by the Internal Revenue Service and other taxing authorities. In accordance with FASB ASC 740, “Income Taxes,” the Company has unrecognized tax benefits related to tax positions taken or expected to be taken. See Note 11 to the financial statements. The audit of the Company’s federal consolidated tax returns conducted by the Internal Revenue Service for fiscal years 2004 and 2005 resulted in no material adjustments.
Pension Plans. The amounts recognized in the consolidated financial statements related to pension plans are determined from actuarial valuations. Inherent in these valuations are assumptions, including expected return on plan assets, discount rates at which the liabilities could be settled at December 31, 2010, rate of increase in future compensation levels and mortality rates. These assumptions are updated annually and are disclosed in Note 10 to the consolidated financial statements filed with the Company’s Annual Report on Form 10-K for the year ended December 31, 2010. There have been no significant changes in the Company’s long-term rate of return assumptions for the past three fiscal years ended December 31 and management believes they are not reasonably likely to change in the future. Pursuant to FASB ASC 715, “Compensation – Retirement Benefits,” the Company has recognized the funded status of its defined benefit postretirement plan in its balance sheet and has recognized changes in that funded status through comprehensive income. The funded status is measured as the difference between the fair value of the plan assets and the projected benefit obligation as of the date of its fiscal year-end.
Results of Operations
The following paragraphs more fully discuss the results of operations and changes in financial condition for the three-month period ended March 31, 2011 (“First Quarter of 2011”) compared to the three-month period ended March 31, 2010 (“First Quarter of 2010”). The following discussion and analysis should be read in conjunction with the consolidated financial statements and related notes and with the statistical information and financial data appearing in this report as well as the Company's 2010 Annual Report on Form 10-K. Results of operations for the First Quarter of 2011 are not necessarily indicative of the results to be attained for any other period.
Net Income
The following table summarizes the Company’s operating results:
|
|
First Quarter of
|
|
(In thousands except per share data)
|
|
2011
|
|
|
2010
|
|
|
% Change
|
|
Net income
|
|
$ |
5,719 |
|
|
$ |
4,749 |
|
|
|
20.4 |
% |
Diluted earnings per share
|
|
$ |
.60 |
|
|
$ |
.50 |
|
|
|
20.0 |
% |
Return on average assets
|
|
|
1.86 |
% |
|
|
1.80 |
% |
|
|
|
|
Return on average equity
|
|
|
16.23 |
% |
|
|
14.71 |
% |
|
|
|
|
Fee Revenue and Other Income
The Company’s fee revenue is derived mainly from transportation and utility processing and payment fees. As the Company provides its processing and payment services, it is compensated by service fees which are typically calculated on a per-item basis and by the accounts and drafts payable balances generated in the payment process which can be used to generate interest income. Processing volumes related to fees and accounts and drafts payable were as follows:
|
|
First Quarter of
|
|
(In thousands)
|
|
2011
|
|
|
2010
|
|
|
% Change
|
|
Freight Core Invoice Transaction Volume*
|
|
|
6,670 |
|
|
|
6,017 |
|
|
|
10.9 |
% |
Freight Invoice Dollar Volume
|
|
$ |
4,568,930 |
|
|
$ |
3,768,941 |
|
|
|
21.2 |
% |
Utility Transaction Volume
|
|
|
3,358 |
|
|
|
3,055 |
|
|
|
9.9 |
% |
Utility Transaction Dollar Volume
|
|
$ |
2,689,235 |
|
|
$ |
2,608,099 |
|
|
|
3.1 |
% |
Payment and Processing Fees
|
|
$ |
14,347 |
|
|
$ |
12,745 |
|
|
|
12.6 |
% |
*Core invoices exclude parcel shipments.
First Quarter of 2011 compared to First Quarter of 2010:
Transportation and utility transaction volumes were up 11% and 10%, respectively, and dollar volumes were up 21% and 3%, respectively, due to new business and improved activity from existing customers.
Bank service fees increased $11,000, or 3% and other income decreased $6,000, or 4%. There were no gains or losses on sales of securities in the First Quarter of 2011 and 2010.
Net Interest Income
Net interest income is the difference between interest earned on loans, investments, and other earning assets and interest expense on deposits and other interest-bearing liabilities. Net interest income is a significant source of the Company’s revenues. The following table summarizes the changes in net interest income and related factors:
|
|
First Quarter of
|
|
(In thousands)
|
|
2011
|
|
|
2010
|
|
|
% Change
|
|
Average earnings assets
|
|
$ |
1,149,715 |
|
|
$ |
984,700 |
|
|
|
16.8 |
% |
Average interest-bearing liabilities
|
|
|
409,071 |
|
|
|
323,253 |
|
|
|
26.5 |
% |
Net interest income*
|
|
|
13,033 |
|
|
|
11,595 |
|
|
|
12.4 |
% |
Net interest margin*
|
|
|
4.60 |
% |
|
|
4.78 |
% |
|
|
|
|
Yield on earning assets*
|
|
|
5.02 |
% |
|
|
5.26 |
% |
|
|
|
|
Rate on interest bearing liabilities
|
|
|
1.20 |
% |
|
|
1.48 |
% |
|
|
|
|
*Presented on a tax-equivalent basis assuming a tax rate of 35%.
First Quarter of 2011 compared to First Quarter of 2010:
First Quarter 2011 average earning assets increased approximately $165,015,000, or 17%, compared to the same period in the prior year (see discussion in the following paragraphs). The yield on earning assets and the tax equivalent net interest margin both decreased in 2011 as the general level of interest rates remained low; however, the significant increase in average earning assets caused net interest income to increase 12%.
Total average loans increased $57,255,000, or 9%, to $705,703,000 for the First Quarter of 2011 as compared to the First Quarter of 2010. This increase was attributable to the continuing successful marketing efforts by the Company’s lending staff. Average investment securities increased $44,106,000, or 21%, to $257,390,000.
Total average interest-bearing deposits for the First Quarter of 2011 increased $85,856,000, or 27%, to $409,069,000 compared to the First Quarter of 2010. This increase was primarily the result of both new and existing customers transferring funds from lower-yielding investments at other institutions. Accounts and drafts payable increased $57,973,000, or 12%, as freight and utility payment processing activities increased.
For more information on the changes in net interest income, please refer to the tables that follow.
Distribution of Assets, Liabilities and Shareholders' Equity; Interest Rate and Interest Differential
The following table shows the condensed average balance sheets for each of the periods reported, the tax-equivalent interest income and expense on each category of interest-earning assets and interest-bearing liabilities, and the average yield on such categories of interest-earning assets and the average rates paid on such categories of interest-bearing liabilities for each of the periods reported.
|
|
First Quarter of 2011
|
|
|
First Quarter of 2010
|
|
(In thousands)
|
|
Average
Balance
|
|
|
Interest
Income/
Expense
|
|
|
Yield/
Rate
|
|
|
Average
Balance
|
|
|
Interest
Income/
Expense
|
|
|
Yield/
Rate
|
|
Assets1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earning assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans2, 3:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable
|
|
$ |
704,737 |
|
|
$ |
10,249 |
|
|
|
5.90 |
% |
|
$ |
645,818 |
|
|
$ |
9,402 |
|
|
|
5.90 |
% |
Tax-exempt4
|
|
|
966 |
|
|
|
6 |
|
|
|
2.52 |
|
|
|
2,630 |
|
|
|
38 |
|
|
|
5.86 |
|
Investment securities5:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable
|
|
|
928 |
|
|
|
5 |
|
|
|
2.19 |
|
|
|
792 |
|
|
|
14 |
|
|
|
7.17 |
|
Tax-exempt4
|
|
|
256,462 |
|
|
|
3,810 |
|
|
|
6.02 |
|
|
|
212,492 |
|
|
|
3,228 |
|
|
|
6.16 |
|
Interest-bearing deposits in other financial institutions
|
|
|
62,287 |
|
|
|
66 |
|
|
|
.43 |
|
|
|
21,406 |
|
|
|
13 |
|
|
|
.25 |
|
Federal funds sold and other short-term investments
|
|
|
124,335 |
|
|
|
103 |
|
|
|
.34 |
|
|
|
101,562 |
|
|
|
76 |
|
|
|
.30 |
|
Total earning assets
|
|
|
1,149,715 |
|
|
|
14,239 |
|
|
|
5.02 |
|
|
|
984,700 |
|
|
|
12,771 |
|
|
|
5.26 |
|
Non-earning assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from banks
|
|
|
11,464 |
|
|
|
|
|
|
|
|
|
|
|
9,414 |
|
|
|
|
|
|
|
|
|
Premises and equipment, net
|
|
|
9,679 |
|
|
|
|
|
|
|
|
|
|
|
10,324 |
|
|
|
|
|
|
|
|
|
Bank-owned life insurance
|
|
|
14,267 |
|
|
|
|
|
|
|
|
|
|
|
13,710 |
|
|
|
|
|
|
|
|
|
Goodwill and other intangibles
|
|
|
7,728 |
|
|
|
|
|
|
|
|
|
|
|
7,835 |
|
|
|
|
|
|
|
|
|
Other assets
|
|
|
62,954 |
|
|
|
|
|
|
|
|
|
|
|
54,801 |
|
|
|
|
|
|
|
|
|
Allowance for loan losses
|
|
|
(12,074 |
) |
|
|
|
|
|
|
|
|
|
|
(8,386 |
) |
|
|
|
|
|
|
|
|
Total assets
|
|
$ |
1,243,733 |
|
|
|
|
|
|
|
|
|
|
$ |
1,072,398 |
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders’ Equity1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing demand deposits
|
|
$ |
218,525 |
|
|
$ |
556 |
|
|
|
1.03 |
% |
|
$ |
169,486 |
|
|
$ |
510 |
|
|
|
1.22 |
% |
Savings deposits
|
|
|
24,831 |
|
|
|
64 |
|
|
|
1.05 |
|
|
|
24,967 |
|
|
|
72 |
|
|
|
1.17 |
|
Time deposits >=$100
|
|
|
53,609 |
|
|
|
184 |
|
|
|
1.39 |
|
|
|
49,953 |
|
|
|
204 |
|
|
|
1.66 |
|
Other time deposits
|
|
|
112,104 |
|
|
|
402 |
|
|
|
1.45 |
|
|
|
78,807 |
|
|
|
390 |
|
|
|
2.01 |
|
Total interest-bearing deposits
|
|
|
409,069 |
|
|
|
1,206 |
|
|
|
1.20 |
|
|
|
323,213 |
|
|
|
1,176 |
|
|
|
1.48 |
|
Short-term borrowings
|
|
|
2 |
|
|
|
— |
|
|
|
— |
|
|
|
40 |
|
|
|
— |
|
|
|
— |
|
Total interest bearing liabilities
|
|
|
409,071 |
|
|
|
1,206 |
|
|
|
1.20 |
|
|
|
323,253 |
|
|
|
1,176 |
|
|
|
1.48 |
|
Non-interest bearing liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand deposits
|
|
|
130,406 |
|
|
|
|
|
|
|
|
|
|
|
110,722 |
|
|
|
|
|
|
|
|
|
Accounts and drafts payable
|
|
|
549,794 |
|
|
|
|
|
|
|
|
|
|
|
491,821 |
|
|
|
|
|
|
|
|
|
Other liabilities
|
|
|
11,534 |
|
|
|
|
|
|
|
|
|
|
|
15,661 |
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
1,100,805 |
|
|
|
|
|
|
|
|
|
|
|
941,457 |
|
|
|
|
|
|
|
|
|
Shareholders’ equity
|
|
|
142,928 |
|
|
|
|
|
|
|
|
|
|
|
130,941 |
|
|
|
|
|
|
|
|
|
Total liabilities and share- holders’ equity
|
|
$ |
1,243,733 |
|
|
|
|
|
|
|
|
|
|
$ |
1,072,398 |
|
|
|
|
|
|
|
|
|
Net interest income
|
|
|
|
|
|
$ |
13,033 |
|
|
|
|
|
|
|
|
|
|
$ |
11,595 |
|
|
|
|
|
Net interest margin
|
|
|
|
|
|
|
|
|
|
|
4.60 |
% |
|
|
|
|
|
|
|
|
|
|
4.78 |
% |
Interest spread
|
|
|
|
|
|
|
|
|
|
|
3.83 |
|
|
|
|
|
|
|
|
|
|
|
3.78 |
|
1.
|
Balances shown are daily averages.
|
2.
|
For purposes of these computations, nonaccrual loans are included in the average loan amounts outstanding. Interest on nonaccrual loans is recorded when received as discussed further in Note 1 to the Company’s 2010 consolidated financial statements, filed with the Company’s 2010 Annual Report on Form 10-K.
|
3.
|
Interest income on loans includes net loan fees of $238,000 and $74,000 for the First Quarter of 2011 and 2010, respectively.
|
4.
|
Interest income is presented on a tax-equivalent basis assuming a tax rate of 35%. The tax-equivalent adjustment was approximately $1,335,000 and $1,143,000 for the First Quarter of 2011 and 2010, respectively.
|
5.
|
For purposes of these computations, yields on investment securities are computed as interest income divided by the average amortized cost of the investments.
|
Analysis of Net Interest Income Changes
The following table presents the changes in interest income and expense between periods due to changes in volume and interest rates. That portion of the change in interest attributable to the combined rate/volume variance has been allocated to rate and volume changes in proportion to the absolute dollar amounts of the change in each.
|
|
First Quarter of 2011 Over
First Quarter of 2010
|
|
(In thousands)
|
|
Volume
|
|
|
Rate
|
|
|
Total
|
|
Increase (decrease) in interest income:
|
|
|
|
|
|
|
|
|
|
Loans1, 2:
|
|
|
|
|
|
|
|
|
|
Taxable
|
|
$ |
857 |
|
|
$ |
(10 |
) |
|
$ |
847 |
|
Tax-exempt3
|
|
|
(17 |
) |
|
|
(15 |
) |
|
|
(32 |
) |
Investment securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable
|
|
|
2 |
|
|
|
(11 |
) |
|
|
(9 |
) |
Tax-exempt3
|
|
|
655 |
|
|
|
(73 |
) |
|
|
582 |
|
Interest-bearing deposits in other financial institutions
|
|
|
38 |
|
|
|
15 |
|