Attached files
file | filename |
---|---|
EX-31.1 - EX-31.1 - Independence Bancshares, Inc. | d28765_ex31-1.htm |
EX-31.2 - EX-31.2 - Independence Bancshares, Inc. | d28765_ex31-2.htm |
EXCEL - IDEA: XBRL DOCUMENT - Independence Bancshares, Inc. | Financial_Report.xls |
EX-32 - EX-32 - Independence Bancshares, Inc. | d28765_ex32.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 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 September 30, 2011
OR
o
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. 000-51907
Independence Bancshares, Inc.
(Exact name of registrant as specified in its charter)
South Carolina | 20-1734180 |
(State or other jurisdiction of incorporation) | (I.R.S. Employer Identification No.) |
|
|
500 East Washington Street
Greenville, South Carolina 29601
(Address of principal executive offices)
(864) 672-1776
(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 o
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 x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act).
Large accelerated filer o Accelerated filer o Non-accelerated o Smaller reporting company x
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 2,085,010 shares of common stock, $.01 par value per share, were issued and outstanding as of November 4, 2011.
September 30, 2011 | December 31, 2010 | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
(unaudited) | (audited) | ||||||||||
Assets |
|||||||||||
Cash and due from banks |
$ | 3,372,437 | $ | 2,993,102 | |||||||
Federal funds sold |
10,115,000 | 7,700,000 | |||||||||
Investment securities available for sale |
9,095,417 | 10,652,733 | |||||||||
Non-marketable equity securities |
1,047,850 | 1,400,350 | |||||||||
Loans, net of allowance for loan losses of $2,350,886 and $3,062,492, respectively |
80,366,791 | 91,402,749 | |||||||||
Accrued interest receivable |
268,713 | 291,499 | |||||||||
Property and equipment, net |
3,550,347 | 3,687,386 | |||||||||
Other real estate owned and repossessed assets |
3,846,965 | 2,537,259 | |||||||||
Other assets |
1,435,370 | 1,145,890 | |||||||||
Total assets |
$ | 113,098,890 | $ | 121,810,968 | |||||||
Liabilities |
|||||||||||
Deposits: |
|||||||||||
Noninterest bearing |
$ | 6,573,442 | $ | 5,710,240 | |||||||
Interest bearing |
89,982,078 | 98,370,429 | |||||||||
Total deposits |
96,555,520 | 104,080,669 | |||||||||
Borrowings |
7,079,297 | 7,065,479 | |||||||||
Accrued interest payable |
56,512 | 69,473 | |||||||||
Accounts payable and accrued expenses |
234,821 | 144,003 | |||||||||
Total
liabilities |
103,926,150 | 111,359,624 | |||||||||
Commitments
and contingencies |
|||||||||||
Shareholders equity |
|||||||||||
Preferred stock, par value $.01 per share; 10,000,000 shares authorized; no shares issued |
| | |||||||||
Common stock, par value $.01 per share; 100,000,000 shares authorized; 2,085,010 shares issued and outstanding |
20,850 | 20,850 | |||||||||
Additional paid-in capital |
21,102,085 | 21,095,485 | |||||||||
Accumulated other comprehensive income |
158,606 | 34,725 | |||||||||
Accumulated deficit |
(12,108,801 | ) | (10,699,716 | ) | |||||||
Total shareholders equity |
9,172,740 | 10,451,344 | |||||||||
Total liabilities and shareholders equity |
$ | 113,098,890 | $ | 121,810,968 |
(unaudited)
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2011 | 2010 | 2011 | 2010 | ||||||||||||||||
Interest
income |
|||||||||||||||||||
Loans |
$ | 1,171,051 | $ | 1,181,010 | $ | 3,349,379 | $ | 3,655,015 | |||||||||||
Investment securities |
60,118 | 73,057 | 210,390 | 201,507 | |||||||||||||||
Federal funds sold and other |
11,027 | 12,921 | 35,060 | 38,624 | |||||||||||||||
Total interest income |
1,242,196 | 1,266,988 | 3,594,829 | 3,895,146 | |||||||||||||||
Interest
expense |
|||||||||||||||||||
Deposits |
303,562 | 487,490 | 1,041,425 | 1,590,619 | |||||||||||||||
Borrowings |
53,449 | 80,249 | 158,825 | 322,259 | |||||||||||||||
Total interest expense |
357,011 | 567,739 | 1,200,250 | 1,912,878 | |||||||||||||||
Net interest
income |
885,185 | 699,249 | 2,394,579 | 1,982,268 | |||||||||||||||
Provision for
loan losses |
(80,000 | ) | 1,220,000 | 730,000 | 2,055,000 | ||||||||||||||
Net interest income (expense) after provision for loan losses |
965,185 | (520,751 | ) | 1,664,579 | (72,732 | ) | |||||||||||||
Noninterest income |
73,916 | 76,004 | 169,999 | 188,418 | |||||||||||||||
Noninterest expenses |
|||||||||||||||||||
Compensation and benefits |
$ | 439,738 | $ | 484,498 | $ | 1,271,971 | $ | 1,488,624 | |||||||||||
Net changes in fair value and (gains) losses on other real estate owned and repossessed assets |
7,165 | 318,131 | 246,382 | 692,290 | |||||||||||||||
Occupancy and equipment |
147,001 | 142,763 | 433,984 | 432,282 | |||||||||||||||
Insurance |
63,685 | 125,818 | 316,935 | 383,876 | |||||||||||||||
Data processing and related costs |
72,026 | 70,085 | 223,130 | 215,666 | |||||||||||||||
Professional fees |
66,556 | 92,848 | 225,326 | 226,272 | |||||||||||||||
Marketing |
14,515 | 18,727 | 56,052 | 79,458 | |||||||||||||||
Telephone and supplies |
16,023 | 12,724 | 51,008 | 45,227 | |||||||||||||||
Other |
172,867 | 80,716 | 418,875 | 221,540 | |||||||||||||||
Total noninterest expenses |
999,576 | 1,346,310 | 3,243,663 | 3,785,235 | |||||||||||||||
Income (loss) before income tax expense |
39,525 | (1,791,057 | ) | (1,409,085 | ) | (3,669,549 | ) | ||||||||||||
Income tax
expense |
| 1,374,937 | | 1,374,937 | |||||||||||||||
Net income (loss) |
$ | 39,525 | $ | (3,165,994 | ) | $ | (1,409,085 | ) | $ | (5,044,486 | ) | ||||||||
Income
(loss) per common share basic and diluted |
$ | 0.02 | $ | (1.52 | ) | $ | (0.68 | ) | $ | (2.42 | ) | ||||||||
Weighted
average common shares outstanding basic and diluted |
2,085,010 | 2,085,010 | 2,085,010 | 2,085,010 |
Consolidated Statements of Changes
In Shareholders Equity and Comprehensive Income (Loss)
(unaudited)
Accumulated | |||||||||||||||||||||||||||
other | |||||||||||||||||||||||||||
Common Stock | Additional | comprehensive | Accumulated | ||||||||||||||||||||||||
Shares |
|
Amount |
|
paid-in capital |
|
income |
|
deficit |
|
Total |
|||||||||||||||||
December
31, 2009 |
2,085,010 | $ | 20,850 | $ | 20,997,135 | $ | 23,052 | $ | (4,354,170 | ) | $ | 16,686,867 | |||||||||||||||
Compensation
expense related to stock options granted |
| | 80,400 | | | 80,400 | |||||||||||||||||||||
Net
loss |
| | | | (5,044,486 | ) | (5,044,486 | ) | |||||||||||||||||||
Unrealized
gain on investment securities available for sale, net of tax |
| | | 94,076 | | 94,076 | |||||||||||||||||||||
Total
comprehensive loss |
| | | | | (4,950,410 | ) | ||||||||||||||||||||
September
30, 2010 |
2,085,010 | $ | 20,850 | $ | 21,077,535 | $ | 117,128 | $ | (9,398,656 | ) | $ | 11,816,857 | |||||||||||||||
December
31, 2010 |
2,085,010 | $ | 20,850 | $ | 21,095,485 | $ | 34,725 | $ | (10,699,716 | ) | $ | 10,451,344 | |||||||||||||||
Compensation
expense related to stock options granted |
| | 6,600 | | | 6,600 | |||||||||||||||||||||
Net
loss |
| | | | (1,409,085 | ) | (1,409,085 | ) | |||||||||||||||||||
Unrealized
gain on investment securities available for sale, net of tax |
| | | 123,881 | | 123,881 | |||||||||||||||||||||
Total
comprehensive loss |
| | | | | (1,285,204 | ) | ||||||||||||||||||||
September
30, 2011 |
2,085,010 | $ | 20,850 | $ | 21,102,085 | $ | 158,606 | $ | (12,108,801 | ) | $ | 9,172,740 |
(unaudited)
Nine Months Ended September 30, |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
2011 | 2010 | ||||||||||
Operating
activities |
|||||||||||
Net loss |
$ | (1,409,085 | ) | $ | (5,044,486 | ) | |||||
Adjustments to reconcile net loss to cash used in operating activities |
|||||||||||
Provision for loan losses |
730,000 | 2,055,000 | |||||||||
Depreciation |
147,828 | 145,308 | |||||||||
Amortization of investment securities premiums, net |
21,145 | 40,716 | |||||||||
Compensation expense related to stock options granted |
6,600 | 80,400 | |||||||||
Net changes in fair value and losses on other real estate owned and repossessed assets |
246,382 | 692,290 | |||||||||
(Increase) decrease in other assets, net |
(299,209 | ) | 1,615,801 | ||||||||
Increase (decrease) in other liabilities, net |
14,040 | (6,627 | ) | ||||||||
Net cash used in operating activities |
(542,299 | ) | (421,598 | ) | |||||||
Investing
activities |
|||||||||||
Repayments of loans, net |
7,648,204 | 8,895,930 | |||||||||
Purchase of investment securities available for sale |
(4,595,698 | ) | (6,000,000 | ) | |||||||
Maturities and sales of investment securities available for sale |
5,524,374 | 3,000,000 | |||||||||
Repayments of investment securities available for sale |
827,708 | 1,258,926 | |||||||||
Redemption of non-marketable equity securities, net |
352,500 | 107,250 | |||||||||
Purchase of property and equipment, net |
(10,789 | ) | (53,339 | ) | |||||||
Sale of other real estate owned and repossessed assets |
1,101,666 | 942,936 | |||||||||
Net cash provided by investing activities |
10,847,965 | 8,151,703 | |||||||||
Financing
activities |
|||||||||||
Increase (decrease) in deposits, net |
(7,525,149 | ) | 590,197 | ||||||||
Increase (decrease) in borrowings |
13,818 | (7,108,066 | ) | ||||||||
Net cash used in financing activities |
(7,511,331 | ) | (6,517,869 | ) | |||||||
Net
increase in cash and cash equivalents |
2,794,335 | 1,212,236 | |||||||||
Cash and
cash equivalents at beginning of the period |
10,693,102 | 10,224,360 | |||||||||
Cash and
cash equivalents at end of the period |
$ | 13,487,437 | $ | 11,436,596 | |||||||
Supplemental information: |
|||||||||||
Cash paid for |
|||||||||||
Interest |
$ | 1,213,211 | $ | 1,975,331 | |||||||
Schedule of non-cash transactions |
|||||||||||
Change in unrealized gain on securities, net of tax |
$ | 123,881 | $ | 94,076 | |||||||
Transfers between loans and other real estate owned |
$ | 2,657,754 | $ | 2,173,188 |
September 30, 2011 |
|||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Gross Unrealized | |||||||||||||||||||
Amortized Cost |
Gains |
Losses |
Fair Value |
||||||||||||||||
Government-sponsored enterprises |
$ | 3,000,000 | $ | 5,277 | $ | | $ | 3,005,277 | |||||||||||
Mortgage-backed securities |
5,482,129 | 209,569 | | 5,691,698 | |||||||||||||||
Municipals,
taxable |
372,977 | 25,465 | | 398,442 | |||||||||||||||
Total investment securities |
$ | 8,855,106 | $ | 240,311 | $ | | $ | 9,095,417 |
December 31, 2010 |
|||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Gross Unrealized | |||||||||||||||||||
Amortized Cost |
Gains |
Losses |
Fair Value |
||||||||||||||||
Government-sponsored enterprises |
$ | 5,000,000 | $ | 12,723 | $ | (37,007 | ) | $ | 4,975,716 | ||||||||||
Mortgage-backed securities |
5,226,829 | 87,186 | (24,588 | ) | 5,289,427 | ||||||||||||||
Municipals,
taxable |
373,291 | 14,299 | | 387,590 | |||||||||||||||
Total investment securities |
$ | 10,600,120 | $ | 114,208 | $ | (61,595 | ) | $ | 10,652,733 |
Single and multifamily residential real estate |
|
Construction and development |
|
Commercial real estate other |
|
Commercial business |
|
Consumer |
|
Total |
|||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
September 30, 2011 |
|||||||||||||||||||||||||||
30-59
days past due |
$ | 847,078 | $ | 104,641 | $ | | $ | | $ | | $ | 951,719 | |||||||||||||||
60-89
days past due |
| | | | | | |||||||||||||||||||||
Nonaccrual |
1,794,986 | 3,309,379 | 1,320,411 | 92,265 | | 6,517,041 | |||||||||||||||||||||
Total
past due and nonaccrual |
2,642,064 | 3,414,020 | 1,320,411 | 92,265 | | 7,468,760 | |||||||||||||||||||||
Current |
22,184,904 | 10,282,649 | 29,520,242 | 11,712,381 | 1,628,660 | 75,328,448 | |||||||||||||||||||||
Total loans |
$ | 24,826,968 | $ | 13,696,669 | $ | 30,840,653 | $ | 11,804,646 | $ | 1,628,660 | $ | 82,797,596 |
Single and multifamily residential real estate |
|
Construction and development |
|
Commercial real estate other |
|
Commercial business |
|
Consumer |
|
Total |
|||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
December 31, 2010 |
|||||||||||||||||||||||||||
30-59
days past due |
$ | 16,902 | $ | | $ | 428,273 | $ | 1,409 | $ | 7,576 | $ | 454,160 | |||||||||||||||
60-89
days past due |
| 145,718 | 97,680 | | | 243,398 | |||||||||||||||||||||
Nonaccrual |
3,098,499 | 8,069,557 | 861,432 | | | 12,029,488 | |||||||||||||||||||||
Total
past due and nonaccrual |
3,115,401 | 8,215,275 | 1,387,385 | 1,409 | 7,576 | 12,727,046 | |||||||||||||||||||||
Current |
24,292,606 | 10,994,198 | 32,630,608 | 12,260,814 | 1,651,994 | 81,830,220 | |||||||||||||||||||||
Total loans |
$ | 27,408,007 | $ | 19,209,473 | $ | 34,017,993 | $ | 12,262,223 | $ | 1,659,570 | $ | 94,557,266 |
September 30, 2011 |
Single and multifamily residential real estate |
|
Construction and development |
|
Commercial real estate other |
|
Commercial business |
|
Consumer |
|
Total |
|||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Pass
Loans |
$ | 14,482,666 | $ | 757,771 | $ | 37,951 | $ | | $ | 1,554,187 | $ | 16,832,575 | ||||||||||||||
Grade
1 - Prime |
| | | 65,429 | | 65,429 | ||||||||||||||||||||
Grade
2 - Good |
| | 485,952 | 125,250 | | 611,202 | ||||||||||||||||||||
Grade
3 - Acceptable |
2,143,418 | 399,431 | 14,526,175 | 5,927,238 | | 22,996,262 | ||||||||||||||||||||
Grade
4 - Acceptable w/ Care |
5,291,710 | 5,454,417 | 12,300,594 | 5,492,964 | | 28,539,685 | ||||||||||||||||||||
Grade
5 - Special Mention |
1,114,188 | 104,641 | 330,394 | 101,500 | | 1,650,723 | ||||||||||||||||||||
Grade
6 - Substandard |
1,794,986 | 6,980,409 | 3,159,587 | | 74,473 | 12,009,455 | ||||||||||||||||||||
Grade
7 - Doubtful |
| | | 92,265 | | 92,265 | ||||||||||||||||||||
Total
loans |
$ | 24,826,968 | $ | 13,696,669 | $ | 30,840,653 | $ | 11,804,646 | $ | 1,628,660 | $ | 82,797,596 |
December 31, 2010 |
|
Single and multifamily residential real estate |
|
Construction and development |
|
Commercial real estate other |
|
Commercial business |
|
Consumer |
|
Total |
||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Pass
Loans |
$ | 15,304,972 | $ | 937,399 | $ | | $ | | $ | 1,585,097 | $ | 17,827,468 | ||||||||||||||
Grade
1 - Prime |
| | | 65,429 | | 65,429 | ||||||||||||||||||||
Grade
2 - Good |
44,312 | 323,784 | 253,851 | 130,628 | | 752,575 | ||||||||||||||||||||
Grade
3 - Acceptable |
1,936,575 | 1,429,714 | 16,769,211 | 5,964,501 | | 26,100,001 | ||||||||||||||||||||
Grade
4 - Acceptable w/Care |
5,488,792 | 4,547,604 | 14,142,081 | 5,884,011 | | 30,062,488 | ||||||||||||||||||||
Grade
5 - Special Mention |
1,534,857 | 3,755,697 | 1,381,947 | 217,654 | | 6,890,155 | ||||||||||||||||||||
Grade
6 - Substandard |
3,098,499 | 8,215,275 | 1,470,903 | | 74,473 | 12,859,150 | ||||||||||||||||||||
Grade
7 - Doubtful |
| | | | | | ||||||||||||||||||||
Total loans |
$ | 27,408,007 | $ | 19,209,473 | $ | 34,017,993 | $ | 12,262,223 | $ | 1,659,570 | $ | 94,557,266 |
Unpaid principal balance |
|
Recorded investment |
|
Related allowance |
|
Average impaired investment |
|
Year to date interest income |
|||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
September 30, 2011 |
|||||||||||||||||||||||
With no related allowance recorded: |
|||||||||||||||||||||||
Single and multifamily residential real estate |
$ | 92,677 | $ | 91,025 | $ | | $ | 110,136 | $ | | |||||||||||||
Construction and development |
2,201,030 | 2,201,030 | | 1,834,659 | 42,102 | ||||||||||||||||||
Commercial real estate-other |
1,313,326 | 1,229,411 | | 886,408 | 9,907 | ||||||||||||||||||
Commercial business |
| | | | | ||||||||||||||||||
With related
allowance recorded: |
|||||||||||||||||||||||
Single and multifamily residential real estate |
1,916,929 | 1,703,962 | 173,962 | 2,123,071 | | ||||||||||||||||||
Construction and development |
6,039,513 | 4,779,378 | 421,756 | 6,448,650 | 76,199 | ||||||||||||||||||
Commercial real estate-other |
99,512 | 91,000 | 61,500 | 506,145 | | ||||||||||||||||||
Commercial business |
92,265 | 92,265 | | 46,132 | | ||||||||||||||||||
Total: |
|||||||||||||||||||||||
Single and multifamily residential real estate |
2,009,606 | 1,794,986 | 173,962 | 2,233,207 | | ||||||||||||||||||
Construction and development |
8,240,543 | 6,980,408 | 421,756 | 8,283,309 | 118,301 | ||||||||||||||||||
Commercial real estate-other |
1,412,838 | 1,320,411 | 61,500 | 1,392,553 | 9,907 | ||||||||||||||||||
Commercial business |
92,265 | 92,265 | | 46,132 | | ||||||||||||||||||
$ | 11,758,501 | $ | 10,188,070 | $ | 657,218 | $ | 11,955,201 | $ | 128,208 | ||||||||||||||
December 31, 2010 |
|||||||||||||||||||||||
With no related allowance recorded: |
|||||||||||||||||||||||
Single and multifamily residential real estate |
$ | 102,083 | $ | 102,083 | $ | | $ | 248,045 | $ | | |||||||||||||
Construction and development |
453,000 | 453,000 | | 2,800,727 | | ||||||||||||||||||
Commercial real estate-other |
290,377 | 290,377 | | 58,075 | | ||||||||||||||||||
Commercial business |
| | | 5,743 | | ||||||||||||||||||
With related allowance recorded: |
|||||||||||||||||||||||
Single and multifamily residential real estate |
3,413,462 | 2,996,415 | 551,415 | 1,862,302 | 13,222 | ||||||||||||||||||
Construction and development |
8,415,920 | 7,762,275 | 768,358 | 5,141,497 | 8,584 | ||||||||||||||||||
Commercial real estate-other |
1,218,225 | 1,180,526 | 251,971 | 453,294 | 10,152 | ||||||||||||||||||
Commercial business |
- | | | 8,818 | 441 | ||||||||||||||||||
Total: |
|||||||||||||||||||||||
Single and multifamily residential real estate |
3,515,545 | 3,098,498 | 551,415 | 2,110,347 | 13,222 | ||||||||||||||||||
Construction and development |
8,868,920 | 8,215,275 | 768,358 | 7,942,224 | 8,584 | ||||||||||||||||||
Commercial real estate-other |
1,508,602 | 1,470,903 | 251,971 | 511,369 | 10,152 | ||||||||||||||||||
Commercial business |
| | | 14,561 | 441 | ||||||||||||||||||
$ | 13,893,067 | $ | 12,784,676 | $ | 1,571,744 | $ | 10,578,501 | $ | 32,399 |
Single and multifamily residential real estate |
|
Construction and development |
|
Commercial real estate other |
|
Commercial business |
|
Consumer |
|
Total |
|||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
September 30, 2011 |
|||||||||||||||||||||||||||
Allowance for loan losses: |
|||||||||||||||||||||||||||
Balance,
beginning of period |
$ | 859,255 | $ | 1,365,914 | $ | 473,504 | $ | 306,791 | $ | 57,028 | $ | 3,062,492 | |||||||||||||||
Provision for
loan losses |
186,224 | 626,379 | 4,153 | (96,612 | ) | 9,856 | 730,000 | ||||||||||||||||||||
Loan
charge-offs |
(390,069 | ) | (1,232,202 | ) | (25,706 | ) | (764 | ) | (6,979 | ) | (1,655,720 | ) | |||||||||||||||
Loan
recoveries |
| | | 214,114 | | 214,114 | |||||||||||||||||||||
Net loans (charged-off) recovered |
(390,069 | ) | (1,232,202 | ) | (25,706 | ) | 213,350 | (6,979 | ) | (1,441,606 | ) | ||||||||||||||||
Balance, end
of period |
$ | 655,410 | $ | 760,091 | $ | 451,951 | $ | 423,529 | $ | 59,905 | $ | 2,350,886 | |||||||||||||||
Individually
reviewed for impairment |
$ | 173,962 | 421,756 | $ | 61,500 | | $ | | $ | 657,218 | |||||||||||||||||
Collectively
reviewed for impairment |
481,448 | 338,335 | 390,451 | 423,529 | 59,905 | 1,693,668 | |||||||||||||||||||||
Total
allowance for loan losses |
$ | 655,410 | 760,091 | $ | 451,951 | $ | 423,529 | $ | 59,905 | $ | 2,350,886 | ||||||||||||||||
Gross loans, end of period: |
|||||||||||||||||||||||||||
Individually
reviewed for impairment |
$ | 1,794,986 | 6,980,408 | $ | 1,320,411 | $ | 92,265 | $ | | $ | 10,188,070 | ||||||||||||||||
Collectively
reviewed for impairment |
23,031,982 | 6,716,261 | 29,520,242 | 11,712,381 | 1,628,660 | 72,609,526 | |||||||||||||||||||||
Total gross
loans |
$ | 24,826,968 | $ | 13,696,669 | $ | 30,840,653 | $ | 11,804,646 | $ | 1,628,660 | $ | 82,797,596 |
September 30, 2011 |
December 31, 2010 |
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Carrying Amount |
Fair Value |
Carrying Amount |
Fair Value |
||||||||||||||||
Financial Assets: |
|||||||||||||||||||
Cash and due from banks |
$ | 3,372,437 | $ | 3,372,437 | $ | 2,993,102 | $ | 2,993,102 | |||||||||||
Federal funds sold |
10,115,000 | 10,115,000 | 7,700,000 | 7,700,000 | |||||||||||||||
Investment securities available for sale |
9,095,417 | 9,095,417 | 10,652,733 | 10,652,733 | |||||||||||||||
Non-marketable equity securities |
1,047,850 | 1,047,850 | 1,400,350 | 1,400,350 | |||||||||||||||
Loans, net |
80,366,791 | 79,331,820 | 91,402,749 | 90,410,864 | |||||||||||||||
Financial Liabilities: |
|||||||||||||||||||
Deposits |
96,555,520 | 96,824,734 | 104,080,669 | 104,657,280 | |||||||||||||||
Federal Home Loan Bank advances |
7,000,000 | 7,327,393 | 7,000,000 | 7,325,072 | |||||||||||||||
Securities sold under agreements to repurchase |
79,297 | 79,297 | 65,479 | 65,479 |
|
our ability to comply with our Formal Agreement and potential regulatory actions if we fail to comply; |
|
our ability to comply with our higher individual minimum capital ratios and potential regulatory actions if we fail to comply; | |
|
general economic conditions, either nationally or regionally and especially in our primary service area, being less favorable than expected, resulting in, among other things, a deterioration in credit quality; | |
|
greater than expected losses due to higher credit losses generally and specifically because losses in the sectors of our loan portfolio secured by real estate are greater than expected due to economic factors, including, but not limited to, declining real estate values, increasing interest rates, increasing unemployment, or changes in payment behavior or other factors; | |
|
greater than expected losses due to higher credit losses because our loans are concentrated by loan type, industry segment, borrower type, or location of the borrower or collateral; | |
|
the amount of our loan portfolio collateralized by real estate and weakness in the real estate market; | |
|
the rate of delinquencies and amount of loans charged-off; | |
|
the adequacy of the level of our allowance for loan losses and the amount of loan loss provisions required in future periods; | |
|
the rate of loan growth in recent years and the lack of seasoning of our loan portfolio; | |
|
our ability to attract and retain key personnel; | |
|
our ability to retain our existing customers, including our deposit relationships; | |
|
significant increases in competitive pressure in the banking and financial services industries; | |
|
adverse changes in asset quality and resulting credit risk related losses and expenses; | |
|
changes in the interest rate environment which could reduce anticipated or actual margins; | |
|
changes in political conditions or the legislative or regulatory environment, including the effect of recent financial reform legislation on the banking and financial services industries; | |
|
changes occurring in business conditions and inflation; | |
|
increased funding costs due to market illiquidity, increased competition for funding, and/or increased regulatory requirements with regard to funding; | |
|
changes in deposit flows; | |
|
changes in technology; | |
|
changes in monetary and tax policies; | |
|
changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board and the Financial Accounting Standards Board; | |
|
loss of consumer confidence and economic disruptions resulting from terrorist activities or other military actions; and | |
|
other risks and uncertainties detailed from time to time in our filings with the Securities and Exchange Commission. |
|
On July 21, 2010, the U.S. President signed into law the
Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the Dodd-Frank Act), a comprehensive regulatory framework that will
likely result in dramatic changes across the financial regulatory system, some of which became effective immediately and some of which will not become
effective until various future dates. Implementation of the Dodd-Frank Act will require many new rules to be made by various federal regulatory
agencies over the next several years. Uncertainty remains as to the ultimate impact of the Dodd-Frank Act until final rulemaking is complete, which
could have a material adverse impact either on the financial services industry as a whole or on our business, financial condition, results of
operations, and cash flows. Provisions in the legislation that affect consumer financial protection regulations, deposit insurance assessments, payment
of interest on demand deposits, and interchange fees could increase the costs associated with deposits and place limitations on certain revenues those
deposits may generate. The Dodd-Frank Act includes provisions that, among other things, will: |
○ |
Centralize responsibility for consumer financial protection by
creating a new agency, the Bureau of Consumer Financial Protection, responsible for implementing, examining, and enforcing compliance with federal
consumer financial laws; |
○ |
Create the Financial Stability Oversight Council that will
recommend to the Federal Reserve increasingly strict rules for capital, leverage, liquidity, risk management and other requirements as companies grow
in size and complexity; |
○ |
Provide mortgage reform provisions regarding a customers
ability to repay, restricting variable-rate lending by requiring that the ability to repay variable-rate loans be determined by using the maximum rate
that will apply during the first five years of a variable-rate loan term, and making more loans subject to provisions for higher cost loans, new
disclosures, and certain other revisions; |
○ |
Change the assessment base for federal deposit insurance from
the amount of insured deposits to consolidated assets less tangible capital, eliminate the ceiling on the size of the Deposit Insurance Fund
(DIF), and increase the floor on the size of the DIF, which generally will require an increase in the level of assessments for institutions
with assets in excess of $10 billion; |
○ |
Make permanent the $250,000 limit for federal deposit insurance
and provide unlimited federal deposit insurance until December 31, 2012 for noninterest-bearing demand transaction accounts at all insured depository
institutions; |
○ |
Implement corporate governance revisions, including with regard
to executive compensation and proxy access by shareholders, which apply to all public companies, not just financial institutions; |
○ |
Repeal the federal prohibitions on the payment of interest on
demand deposits, thereby permitting depository institutions to pay interest on business transactions and other accounts; |
○ |
Amend the Electronic Fund Transfer Act (EFTA) to,
among other things, give the Federal Reserve the authority to establish rules regarding interchange fees charged for electronic debit transactions by
payment card issuers having assets over $10 billion and to enforce a new statutory requirement that such fees be reasonable and proportional to the
actual cost of a transaction to the issuer; |
○ |
Eliminate the Office of Thrift Supervision (OTS) on
July 21, 2011. The Office of the Comptroller of the Currency (OCC), which is the primary federal regulator for national banks, now has
become the primary federal regulator for federal thrifts. In addition, the Federal Reserve now supervises and regulates all savings and loan holding
companies that were formerly regulated by the OTS. |
|
On September 27, 2010, the U.S. President signed into law the
Small Business Jobs Act of 2010 (the Act). The Small Business Lending Fund (the SBLF), which was enacted as part of the Act, is
a $30 billion fund that encourages lending to small businesses by providing Tier 1 capital to qualified community banks with assets of less than $10
billion. On December 21, 2010, the U.S. Treasury published the application form, term sheet and other guidance for participation in the SBLF. Under the
terms of the SBLF, the Treasury will purchase shares of senior preferred stock from banks, bank holding companies, and other financial institutions
that will qualify as Tier 1 capital for regulatory purposes and rank senior to a participating institutions common stock. The application
deadline for participating in the SBLF was May 16, 2011. We did not participate in the SBLF. |
|
Internationally, both the Basel Committee on Banking Supervision
(the Basel Committee) and the Financial Stability Board (established in April 2009 by the Group of Twenty (G-20) Finance
Ministers and Central Bank Governors to take action to strengthen regulation and supervision of the financial system with greater international
consistency, cooperation, and transparency) have committed to raise capital standards and liquidity buffers within the banking system (Basel
III). On September 12, 2010, the Group of Governors and Heads of Supervision agreed to the calibration and phase-in of the Basel III minimum
capital requirements (raising the minimum Tier 1 common equity ratio to 4.5% and minimum Tier 1 equity ratio to 6.0%, with full implementation by
January 2015) and introducing a capital conservation buffer of common equity of an additional 2.5% with full implementation by January 2019. The U.S.
federal banking agencies support this agreement. In December 2010, the Basel Committee issued the Basel III rules text, outlining the details and
time-lines of global regulatory standards on bank capital adequacy and liquidity. According to the Basel Committee, the framework sets out higher and
better-quality capital, better risk coverage, the introduction of a leverage ratio as a backstop to the risk-based requirement, measures to promote the
build-up of capital that can be drawn down in periods of stress, and the introduction of two global liquidity standards. |
|
In November 2010, the Federal Reserves monetary
policymaking committee, the Federal Open Market Committee (FOMC), decided that further support to the economy was needed. With short-term
interest rates already nearing 0%, the FOMC agreed to deliver that support by committing to purchase additional longer-term Treasury securities, as it
had in 2008 and 2009. The FOMC announced that it intended to purchase an additional $600 billion of longer-term U.S. Treasury securities by the end of
the second quarter of 2011, at a pace of about $75 billion per month. In addition, the FOMC stated that it would maintain its existing policy of
reinvesting principal payments from its securities holdings. |
|
In November 2010, the FDIC approved two proposals that amend the
deposit insurance assessment regulations. The first proposal implements a provision in the Dodd-Frank Act that changes the assessment base from one
based on domestic deposits (as it has been since 1935) to one based on assets. The assessment base changes from adjusted domestic deposits to average
consolidated total assets minus average tangible equity. The second proposal changes the deposit insurance assessment system for large institutions in
conjunction with the guidance given in the Dodd-Frank Act. In February 2011, the FDIC approved the final rules that change the assessment base from
domestic deposits to average assets minus average tangible equity, adopt a new scorecard-based assessment system for financial institutions with more
than $10 billion in assets, and finalize the designated reserve ratio target size at 2.0% of insured deposits. We elected to voluntarily participate in
the unlimited deposit insurance component of the Treasurys Transaction Account Guarantee Program (TAGP) through December 31, 2010.
Coverage under the program was in addition to and separate from the basic coverage available under the FDICs general deposit insurance rules. As
a result of the Dodd-Frank Act that was signed into law on July 21, 2010, the program ended on December 31, 2010, and all institutions are now required
to provide full deposit insurance on noninterest-bearing transaction accounts until December 31, 2012. There will not be a separate assessment for this
as there was for institutions participating in the deposit insurance component of the TAGP. |
|
In June 2011, the Federal Reserve approved a final debit card
interchange rule in accordance with the Dodd-Frank Act. The final rule caps an issuers base fee at $0.21 per transaction and allows an additional
5 basis point charge per transaction to help cover fraud losses. Though the rule technically does not apply to institutions with less than $10 billion
in assets, such as the Bank, there is concern that the price controls may harm community banks, which could be pressured by the marketplace to lower
their own interchange rates. The Federal Reserve also adopted requirements for issuers to include two unaffiliated networks for debit card transactions
one signature-based and one PIN-based. The effective date for the final rules on the pricing and routing restrictions was October 1, 2011. The
results of these final rules may impact our interchange income from debit card transactions in the future. |
|
On September 21, 2011, the FOMC announced that, in order to
support a stronger economic recovery and to help ensure that inflation, over time, is at levels consistent with its statutory mandate, it had decided
to extend the average maturity of its holdings of securities. In addition, the FOMC announced that it intended to purchase, by the end of June 2012,
$400 billion of Treasury securities with remaining maturities of 3 years or less in order to put downward pressure on longer-term interest rates and
help make broader financial conditions more accommodative. Further, to help support conditions in mortgage markets, the FOMC intends to now reinvest in
agency mortgage-backed securities the principal payments from its holdings of agency debt and agency mortgage-backed securities. |
Requirements of the Formal Agreement |
Responsive Actions |
---|---|
Article II.
Establish, within 30 days from the effective date of the Formal Agreement, a Compliance Committee of at least five directors to be responsible for
monitoring and coordinating the Banks adherence to the provisions of the Formal Agreement. The Compliance Committee is required to meet at least
monthly to receive written progress reports from management on the results and status of actions needed to achieve full compliance with each article of
the Formal Agreement. |
The Compliance
Committee was formed in January 2010 and has met monthly to review written progress reports provided by management. |
Article III.
Complete, within 60 days of the effective date of the Formal Agreement, a thorough review and assessment of the Banks Board of Directors and
management supervision, management structure and staffing requirements. |
The Compliance
Committee completed this review and assessment, including obtaining Board approval of the findings and recommendations, in April and June 2010, and
submitted its report to the OCC immediately thereafter. |
Requirements of the Formal Agreement |
Responsive Actions |
---|---|
Article IV. Adopt
and implement, within 45 days of the effective date of the Formal Agreement, an updated written strategic plan for the Bank covering at least a
three-year period including an updated three year capital program to strengthen the Banks capital structure. |
The Board
adopted the Banks strategic plan, including the required capital program, on March 3, 2010 which was submitted to the OCC on March 8, 2010. The
Bank has also taken steps to implement this strategic plan and capital program. Management revised the capital program based on the OCCs review.
The revised plan was resubmitted to the OCC on November 1, 2010. Management continues to submit capital updates to the OCC on a regular basis. We believe the OCC will not consider the Bank compliant with this requirement until our capital levels are at or above our individual minimum capital ratios. |
Article V.
Develop and implement, within 45 days of the effective date of the Formal Agreement, an updated written profit plan to improve and sustain the earnings
of the Bank. |
The Board
adopted the Banks profit plan in November 2010 which was submitted to the OCC on December 14, 2010. |
Article VI (4)
and (5). Review the Banks liquidity on a monthly basis and provide the full Board of Directors with a written report of the results of this
review to ensure adequate sources of liquidity in relation to the Banks needs. |
Throughout
2010 and thus far in 2011, management has actively monitored liquidity and has provided detailed monthly reports to the Asset Liability Committee and
the full Board of Directors for review. |
Article VII.
Adopt and implement, within 60 days of the effective date of the Formal Agreement, an updated written interest rate risk policy addressing management
reports used for decision-making, interest rate risk tolerance, tools used to measure and monitor the Banks overall interest rate risk profile,
and model validation and back-testing procedures. |
The
Banks Interest Rate Risk Policy, which addresses management reports, interest rate risk tolerance, measuring and monitoring the Banks risk
profile and model validation and back-testing, was reviewed and approved by the Banks Board of Directors on March 3, 2010 and was submitted to
the OCC on March 8, 2010. |
Article VIII.
Improve, within 90 days of the effective date of the Formal Agreement, the Banks liquidity position and maintain adequate sources of stable
funding given the Banks anticipated liquidity and funding needs by reducing wholesale or credit sensitive liabilities and/or increasing liquid
assets. |
As of
September 30, 2011, the Bank has increased its liquidity position to 20.0% from 13.6% as of December 31, 2009. In addition, the Bank decreased
wholesale funding reliance by $19.9 million in 2010 and an additional $12.4 million in the first nine months of 2011. |
Requirements of the Formal Agreement |
Responsive Actions |
---|---|
Article IX.
Accept, renew or rollover brokered deposits for deposit at the Bank only after obtaining a prior written determination of no supervisory objection from
the OCC. |
The Bank has
obtained required written approvals from the OCC for all new and renewed brokered deposits accepted by the Bank since the effective date of the Formal
Agreement. |
Article X (7).
Extend credit, including renewals or extensions, to a borrower whose loans or other extensions of credit exceed $300,000 and are criticized by the OCC
or any other bank examiner, only after the Board or designated committee finds that the extension of additional credit is necessary to promote the best
interests of the Bank. |
All extensions
of credit or modifications related to a criticized borrower have been properly approved by the Board. |
Article XI. Adopt
and implement, within 60 days of the effective date of the Formal Agreement, an updated and comprehensive policy for determining the adequacy of the
Banks allowance for loan losses, which must provide for a review of the Banks allowance for loan losses by the Board at least once each
calendar quarter. |
The
Banks Allowance for Loan Losses methodology and model was reviewed and approved by the Banks Board of Directors on April 28, 2010 and was
submitted to the OCC on May 3, 2010. Management revised the Allowance for Loan Losses methodology and model based on the OCCs review. Management
resubmitted this information to the OCC in December 2010 and updated the written policy to reflect these revisions. The updated policy was submitted on
May 4, 2011. |
Article XII
(1). Develop and implement, within 60 days of the effective date of the Formal Agreement, an updated written program to improve the Banks loan
portfolio management including a pricing policy, guidelines for loans to insiders, guidelines on concentrations of credit, lending procedures,
underwriting, documentation, exception tracking, re-appraisal guidelines and a comprehensive loan review process. |
The Banks
General Loan Policy, which addresses loans to insiders, guidelines on concentrations of credit, lending procedures, underwriting, documentation,
exception tracking, and re-appraisals, was reviewed and approved by the Banks Board of Directors on April 28, 2010 and was submitted to the OCC
on May 3, 2010. |
Article XII
(3). Develop and implement, within 60 days of the effective date of the Formal Agreement, updated systems which provide for effective monitoring of
early problem loan identification and sources of problem loans by various factors, previously charged-off assets and their recovery potential,
compliance with the Banks lending policies and laws, rules, and regulations pertaining to the Banks lending function, adequacy of credit
and collateral documentation, and concentrations of credit. |
Since the
effective date of the Formal Agreement, the Bank has developed new loan tracking reports, has engaged a third party to perform loan portfolio stress
testing, and has increased the scope of external quarterly loan review procedures. |
Requirements of the Formal Agreement |
Responsive Actions |
---|---|
Article XII
(4). Provide to the Board of Directors, within 60 days of the effective date of the Formal Agreement, written reports on a monthly basis, including
problem loans, delinquent loans, documentation exceptions, regulatory violations, concentrations of credit, significant economic factors, and general
conditions and their impact on the credit quality of the Banks loan and lease portfolios, loans to insiders, and policy
exceptions. |
Throughout 2010
and thus far in 2011, management has provided detailed monthly reports to the Board of Directors detailing information required in this provision of
the Formal Agreement. |
Article XIII.
Adopt and implement, within 60 days of the effective date of the Formal Agreement, a written asset diversification program including policies and
procedures to control and monitor concentrations of credit and an action plan to reduce the risk of current concentrations of credit. |
The Board of
Directors has approved the updated General Loan Policy and has adopted a Commercial Real Estate Action Plan to ensure a reduction in the Banks
commercial real estate portfolio. The General Loan Policy and Commercial Real Estate Action Plan were reviewed and approved by the Banks Board of
Directors on April 28, 2010 and were submitted to the OCC on May 3, 2010. |
Article XIV
(1). Obtain, within 90 days of the effective date of the Formal Agreement, current and satisfactory credit information on all loans lacking such
information, including those criticized by the OCC or any other bank examiner. |
Since the
effective date of the Formal Agreement, the Bank has obtained current and satisfactory credit information on all loans. |
Article XIV (2).
Ensure, within 60 days of the effective date of the Formal Agreement, proper collateral documentation is maintained on all loans and correct each
collateral exception listed by the OCC or any other bank examiner. |
Since the
effective date of the Formal Agreement, the Bank has ensured proper collateral documentation is maintained and corrected each collateral exception that
arose. |
Article XIV
(3). Effective immediately, the Bank may grant, extend, renew, alter or restructure any loan or other extension of credit only after: (1) documenting
the specific reason or purpose for the extension of credit; (2) identifying the expected source of repayment in writing; (3) structuring the repayment
terms to coincide with the expected source of repayment; (4) obtaining and analyzing current and satisfactory credit information, including cash flow
analysis, where loans are to be repaid from operations; and (5) documenting, with adequate supporting material, the value of collateral and properly
perfecting the Banks lien on it where applicable. |
Since the
effective date of the Formal Agreement, the Bank has sought to ensure that it has only granted, extended, renewed, altered or restructured any loan or
other extension of credit after taking the steps outlined in Article XIV of the Formal Agreement. |
Article XV.
Adopt and implement, within 90 days of the effective date of the Formal Agreement, an updated written, comprehensive conflict of interest policy
applicable to the Banks and the Bank holding companys directors, principal shareholders, executive officers, affiliates, and employees
(Insiders) and related interests of such Insiders. |
The Banks
Conflict of Interest and Code of Ethics Policy was reviewed and approved by the Banks Board of Directors on December 9, 2009 and was submitted to
the OCC on March 8, 2010. |
Requirements of the Formal Agreement |
Responsive Actions |
||
---|---|---|---|
Article XVI.
Within 30 days of the effective date of the Formal Agreement, the Board of Directors must reduce to conforming amounts all loans or other extensions of
credit which exceed the Banks legal lending limit. The Board is also required to establish, implement, and thereafter ensure Bank adherence to
written procedures to prevent future violations. |
The Bank is in
the process of reducing non-conforming loan relationships at the time of each renewal through the requirement of principal reductions or payoff. The
Bank is regularly reporting to the OCC the status of its progress related to this provision of the Formal Agreement. |
For the Three Months Ended September 30, | |||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2011 |
2010 |
||||||||||||||||||||||||||
Average Balance |
|
Income/ Expense |
|
Yield/ Rate |
|
Average Balance |
|
Income/ Expense |
|
Yield/ Rate |
|||||||||||||||||
Federal funds
sold and other |
$ | 9,302,900 | $ | 11,027 | 0.47 | % | $ | 10,038,217 | $ | 12,921 | 0.51 | % | |||||||||||||||
Investment
securities (1) |
8,236,429 | 60,118 | 2.90 | 9,649,805 | 73,057 | 3.00 | |||||||||||||||||||||
Loans
(2) |
83,418,652 | 1,171,051 | 5.57 | 96,573,968 | 1,181,010 | 4.85 | |||||||||||||||||||||
Total
interest-earning assets |
$ | 100,957,981 | $ | 1,242,196 | 4.88 | % | $ | 116,261,990 | $ | 1,266,988 | 4.32 | % | |||||||||||||||
NOW
accounts |
$ | 5,789,429 | $ | 9,595 | 0.66 | % | $ | 6,187,086 | $ | 11,884 | 0.76 | % | |||||||||||||||
Savings &
money market |
35,739,066 | 92,978 | 1.03 | 35,712,345 | 141,151 | 1.57 | |||||||||||||||||||||
Time deposits
(excluding brokered time deposits) |
32,505,156 | 114,448 | 1.40 | 28,700,939 | 135,446 | 1.87 | |||||||||||||||||||||
Brokered time
deposits |
17,112,586 | 86,541 | 2.01 | 30,385,324 | 199,009 | 2.60 | |||||||||||||||||||||
Total
interest-bearing deposits |
91,146,237 | 303,562 | 1.32 | 100,985,694 | 487,490 | 1.92 | |||||||||||||||||||||
Borrowings |
7,174,162 | 53,449 | 2.96 | 7,742,892 | 80,249 | 4.11 | |||||||||||||||||||||
Total
interest-bearing liabilities |
$ | 98,320,399 | $ | 357,011 | 1.44 | % | $ | 108,728,586 | $ | 567,739 | 2.07 | % | |||||||||||||||
Net interest
spread |
3.44 | % | 2.25 | % | |||||||||||||||||||||||
Net interest
income/ margin |
$ | 885,185 | 3.48 | % | $ | 699,249 | 2.39 | % | |||||||||||||||||||
(1) |
The average balances for investment securities exclude the unrealized gain recorded for available for sale securities. |
(2) |
Nonaccrual loans are included in average balances for yield computations. |
For the Nine Months Ended September 30, | |||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2011 |
2010 |
||||||||||||||||||||||||||
Average Balance |
|
Income/ Expense |
|
Yield/ Rate |
|
Average Balance |
|
Income/ Expense |
|
Yield/ Rate |
|||||||||||||||||
Federal funds
sold and other |
$ | 9,397,543 | $ | 35,060 | 0.50 | % | $ | 10,833,056 | $ | 38,624 | 0.48 | % | |||||||||||||||
Investment
securities (1) |
9,562,051 | 210,390 | 2.94 | 8,608,399 | 201,507 | 3.13 | |||||||||||||||||||||
Loans
(2) |
88,105,894 | 3,349,379 | 5.08 | 101,537,328 | 3,655,015 | 4.81 | |||||||||||||||||||||
Total
interest-earning assets |
$ | 107,065,488 | $ | 3,594,829 | 4.49 | % | $ | 120,978,783 | $ | 3,895,146 | 4.30 | % | |||||||||||||||
NOW
accounts |
$ | 5,990,791 | $ | 30,468 | 0.68 | % | $ | 5,607,114 | $ | 28,675 | 0.68 | % | |||||||||||||||
Savings &
money market |
34,891,870 | 290,054 | 1.11 | 32,064,244 | 414,694 | 1.73 | |||||||||||||||||||||
Time deposits
(excluding brokered time deposits) |
32,996,890 | 379,815 | 1.54 | 29,364,941 | 452,216 | 2.06 | |||||||||||||||||||||
Brokered time
deposits |
21,071,174 | 341,088 | 2.16 | 34,426,433 | 695,034 | 2.70 | |||||||||||||||||||||
Total
interest-bearing deposits |
94,950,725 | 1,041,425 | 1.47 | 101,462,732 | 1,590,619 | 2.10 | |||||||||||||||||||||
Borrowings |
7,121,766 | 158,825 | 2.98 | 11,024,597 | 322,259 | 3.91 | |||||||||||||||||||||
Total
interest-bearing liabilities |
$ | 102,072,491 | $ | 1,200,250 | 1.57 | % | $ | 112,487,329 | $ | 1,912,878 | 2.27 | % | |||||||||||||||
Net interest
spread |
2.92 | % | 2.03 | % | |||||||||||||||||||||||
Net interest
income/ margin |
$ | 2,394,579 | 2.99 | % | $ | 1,982,268 | 2.19 | % |
(1) |
The average balances for investment securities exclude the unrealized gain recorded for available for sale securities. |
(2) |
Nonaccrual loans are included in average balances for yield computations. |
2011 |
||||||
---|---|---|---|---|---|---|
Balance at
beginning of period |
$ | 2,537,259 | ||||
Repossessed
property acquired in settlement of loans |
4,738,064 | |||||
Sales of
repossessed property financed by the Bank |
(2,080,310 | ) | ||||
Cash sales of
repossessed property |
(1,101,666 | ) | ||||
Net changes
in fair value and (gains) losses on other real estate owned and repossessed assets |
(246,382 | ) | ||||
Balance at
end of period |
$ | 3,846,965 |
Individual Minimum Capital Ratio |
For capital adequacy purposes |
To be well capitalized under prompt corrective action provisions |
|||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Actual | Minimum | Minimum | Minimum | ||||||||||||||||||||||||||||||||
Amount |
Ratio |
Amount |
Ratio |
Amount |
Ratio |
Amount |
Ratio |
||||||||||||||||||||||||||||
As of
September 30, 2011 |
|||||||||||||||||||||||||||||||||||
Total Capital
(to risk weighted assets) |
$ | 10,149,000 | 11.0 | % | $ | 11,101,000 | 12.0 | % | $ | 7,401,000 | 8.0 | % | $ | 9,251,000 | 10.0 | % | |||||||||||||||||||
Tier 1 Capital
(to risk weighted assets) |
8,978,000 | 9.7 | 9,251,000 | 10.0 | 3,700,000 | 4.0 | 5,551,000 | 6.0 | |||||||||||||||||||||||||||
Tier 1 Capital
(to average assets) |
8,978,000 | 7.9 | 10,242,000 | 9.0 | 4,552,000 | 4.0 | 5,690,000 | 5.0 | |||||||||||||||||||||||||||
As of
December 31, 2010 |
|||||||||||||||||||||||||||||||||||
Total Capital
(to risk weighted assets) |
$ | 11,670,000 | 11.5 | % | $ | 12,169,000 | 12.0 | % | $ | 8,112,000 | 8.0 | % | $ | 10,141,000 | 10.0 | % | |||||||||||||||||||
Tier 1 Capital
(to risk weighted assets) |
10,381,000 | 10.2 | 10,141,000 | 10.0 | 4,056,000 | 4.0 | 6,084,000 | 6.0 | |||||||||||||||||||||||||||
Tier 1 Capital
(to average assets) |
10,381,000 | 8.4 | 11,137,000 | 9.0 | 4,950,000 | 4.0 | 6,187,000 | 5.0 |
10.1 |
Articles of Amendment to the Companys Articles of Incorporation, dated August 12, 2011 (incorporated by reference to Exhibit 3.1 of the Companys Form 8-K filed August 15, 2011). |
31.1 |
Rule 13a-14(a) Certification of the Principal Executive Officer. |
31.2 |
Rule 13a-14(a) Certification of the Principal Financial Officer. |
32 |
Section 1350 Certifications. |
Date: November 4,
2011 |
By: /s/
Lawrence R. Miller Lawrence R. Miller Chief Executive Officer (Principal Executive Officer) |
|||||
Date: November 4,
2011 |
By: /s/
Kimberly D. Barrs Kimberly D. Barrs Acting Chief Financial Officer (Principal Financial and Accounting Officer) |
Exhibit Number |
Description | |||||
---|---|---|---|---|---|---|
31.1 |
Rule 13a-14(a)
Certification of the Principal Executive Officer. |
|||||
31.2 |
Rule 13a-14(a)
Certification of the Principal Financial Officer. |
|||||
32 |
Section 1350
Certifications. |