x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
COMMUNITY PARTNERS BANCORP
|
||
(Exact Name of Registrant as Specified in Its Charter)
|
New Jersey
|
20-3700861
|
|
(State of Other Jurisdiction
of Incorporation or Organization)
|
(I.R.S. Employer Identification No.)
|
1250 Highway 35 South, Middletown, New Jersey
|
07748
|
|
(Address of Principal Executive Offices)
|
(Zip Code)
|
(732) 706-9009
|
||
(Registrant’s Telephone Number, Including Area Code)
|
(Former name, former address and former fiscal year, if changed since last report)
|
Large accelerated filer
|
o
|
Accelerated filer
|
o
|
Non-accelerated filer
(Do not check if a smaller reporting company)
|
o
|
Smaller reporting company
|
x
|
PART I.
|
|
FINANCIAL INFORMATION
|
Page
|
||
|
|||||
3
|
|||||
3
|
|||||
4
|
|||||
5
|
|||||
6
|
|||||
7
|
|||||
8
|
|||||
32
|
|||||
50
|
|||||
50
|
|||||
PART II.
|
OTHER INFORMATION
|
||||
51
|
|||||
52
|
March 31,
|
December 31,
|
|||||||
2012
|
2011
|
|||||||
ASSETS
|
||||||||
Cash and due from banks
|
$
|
8,172
|
$
|
7,597
|
||||
Interest-bearing deposits in bank
|
37,534
|
30,425
|
||||||
Cash and cash equivalents
|
45,706
|
38,022
|
||||||
Securities available-for-sale
|
45,306
|
47,455
|
||||||
Securities held-to-maturity (fair value of $12,375 and $13,222 at March 31, 2012
and December 31, 2011, respectively)
|
12,216
|
13,105
|
||||||
Restricted investments, at cost
|
2,232
|
2,237
|
||||||
Loans
|
536,679
|
530,130
|
||||||
Allowance for loan losses
|
(7,026
|
)
|
(7,310
|
)
|
||||
Net loans
|
529,653
|
522,820
|
||||||
Other real estate owned
|
7,281
|
7,765
|
||||||
Bank-owned life insurance
|
13,116
|
12,998
|
||||||
Premises and equipment, net
|
2,510
|
2,640
|
||||||
Accrued interest receivable
|
1,927
|
1,928
|
||||||
Goodwill
|
18,109
|
18,109
|
||||||
Other intangible assets, net of accumulated amortization of $1,723 and
$1,675 at March 31, 2012 and December 31, 2011, respectively
|
383
|
431
|
||||||
Other assets
|
6,458
|
7,044
|
||||||
TOTAL ASSETS
|
$
|
684,897
|
$
|
674,554
|
||||
LIABILITIES
|
||||||||
Deposits:
|
||||||||
Non-interest bearing
|
$
|
94,436
|
$
|
88,209
|
||||
Interest bearing
|
466,409
|
465,703
|
||||||
Total Deposits
|
560,845
|
553,912
|
||||||
Securities sold under agreements to repurchase
|
18,680
|
16,218
|
||||||
Accrued interest payable
|
61
|
107
|
||||||
Long-term debt
|
13,500
|
13,500
|
||||||
Other liabilities
|
3,528
|
3,683
|
||||||
Total Liabilities
|
596,614
|
587,420
|
||||||
SHAREHOLDERS' EQUITY
|
||||||||
Preferred stock, no par value; 6,500,000 shares authorized;
|
||||||||
Preferred stock, Series B, none issued or outstanding
|
-
|
-
|
||||||
Preferred stock, Series C, $12,000,000 liquidation preference; 12,000 shares authorized; 12,000
issued and outstanding at March 31, 2012, and December 31, 2011, respectively
|
12,000
|
12,000
|
||||||
Common stock, no par value; 25,000,000 shares authorized; 7,955,416
and 7,942,218 shares issued and outstanding at March 31, 2012 and
December 31, 2011, respectively
|
71,279
|
71,179
|
||||||
Retained earnings
|
4,711
|
3,693
|
||||||
Accumulated other comprehensive income
|
293
|
262
|
||||||
Total Shareholders' Equity
|
88,283
|
87,134
|
||||||
TOTAL LIABILITIES and SHAREHOLDERS’ EQUITY
|
$
|
684,897
|
$
|
674,554
|
Three Months Ended
March 31,
|
||||||||
2012
|
2011
|
|||||||
INTEREST INCOME:
|
||||||||
Loans, including fees
|
$
|
7,307
|
$
|
7,251
|
||||
Securities:
|
||||||||
Taxable
|
303
|
289
|
||||||
Tax-exempt
|
97
|
86
|
||||||
Federal funds sold and interest bearing deposits
|
21
|
19
|
||||||
Total Interest Income
|
7,728
|
7,645
|
||||||
INTEREST EXPENSE:
|
||||||||
Deposits
|
1,086
|
1,174
|
||||||
Securities sold under agreements to repurchase
|
28
|
31
|
||||||
Borrowings
|
108
|
107
|
||||||
Total Interest Expense
|
1,222
|
1,312
|
||||||
Net Interest Income
|
6,506
|
6,333
|
||||||
PROVISION FOR LOAN LOSSES
|
350
|
525
|
||||||
Net Interest Income after Provision for Loan Losses
|
6,156
|
5,808
|
||||||
NON-INTEREST INCOME:
|
||||||||
Service fees on deposit accounts
|
137
|
124
|
||||||
Other loan fees
|
186
|
109
|
||||||
Earnings from investment in life insurance
|
118
|
93
|
||||||
Net loss on sale of OREO properties
|
(28
|
)
|
(5
|
)
|
||||
Other income
|
127
|
115
|
||||||
Total Non-Interest Income
|
540
|
436
|
||||||
NON-INTEREST EXPENSES:
|
||||||||
Salaries and employee benefits
|
2,700
|
2,621
|
||||||
Occupancy and equipment
|
779
|
833
|
||||||
Professional
|
195
|
187
|
||||||
Insurance
|
92
|
99
|
||||||
FDIC insurance and assessments
|
141
|
227
|
||||||
Advertising
|
60
|
50
|
||||||
Data processing
|
161
|
154
|
||||||
Outside services fees
|
127
|
96
|
||||||
Amortization of identifiable intangibles
|
48
|
58
|
||||||
OREO expenses, OREO impairment and loan workout expenses
|
181
|
129
|
||||||
Other operating
|
390
|
332
|
||||||
Total Non-Interest Expenses
|
4,874
|
4,786
|
||||||
Income before Income Taxes
|
1,822
|
1,458
|
||||||
INCOME TAX EXPENSE
|
667
|
535
|
||||||
Net Income
|
1,155
|
923
|
||||||
Preferred stock dividend and discount accretion
|
(137
|
)
|
(143
|
)
|
||||
Net income available to common shareholders
|
$
|
1,018
|
$
|
780
|
||||
EARNINGS PER COMMON SHARE:
|
||||||||
Basic
|
$
|
0.13
|
$
|
0.10
|
||||
Diluted
|
$
|
0.13
|
$
|
0.10
|
||||
Weighted average common shares outstanding:
|
||||||||
Basic
|
7,956
|
7,854
|
||||||
Diluted
|
8,111
|
8,035
|
Three Months Ended
March 31,
|
||||||||
2012
|
2011
|
|||||||
Net income
|
$
|
1,155
|
$
|
923
|
||||
Other comprehensive income:
|
||||||||
Unrealized holdings gains on securities available for sale, net of
deferred income tax 2012: $24; 2011: $7
|
39
|
14
|
||||||
Unrealized gain (loss) on securities for which a portion of the
impairment has been recognized in income, net of deferred income
tax (benefit) 2012: $(6); 2011: $26
|
(8
|
)
|
40
|
|||||
Other comprehensive income
|
31
|
54
|
||||||
Total comprehensive income
|
$
|
1,186
|
$
|
977
|
Common Stock
|
Accumulated
|
|||||||||||||||||||||||
Preferred
Stock
|
Outstanding
shares
|
Amount
|
Retained
Earnings
|
Other
Comprehensive
Income
|
Total
Shareholders’
Equity
|
|||||||||||||||||||
Balance, January 1, 2012
|
$
|
12,000
|
7,942,218
|
$
|
71,179
|
$
|
3,693
|
$
|
262
|
$
|
87,134
|
|||||||||||||
Comprehensive income:
|
||||||||||||||||||||||||
Net income
|
-
|
-
|
-
|
1,155
|
-
|
1,155
|
||||||||||||||||||
Other comprehensive income
|
-
|
-
|
-
|
-
|
31
|
31
|
||||||||||||||||||
Total comprehensive income
|
$
|
1,186
|
||||||||||||||||||||||
Dividends on preferred stock, Series C
|
-
|
-
|
-
|
(137
|
)
|
-
|
(137
|
)
|
||||||||||||||||
Options exercised
|
-
|
14,975
|
49
|
-
|
-
|
49
|
||||||||||||||||||
Restricted stock awards - forfeiture
|
-
|
(4,133
|
)
|
(8
|
)
|
-
|
-
|
(8
|
)
|
|||||||||||||||
Tax-benefit-exercised non-qualified
stock options
|
-
|
-
|
2
|
-
|
-
|
2
|
||||||||||||||||||
Employee stock purchase program
|
-
|
2,356
|
11
|
-
|
-
|
11
|
||||||||||||||||||
Stock option compensation expense
|
-
|
-
|
46
|
-
|
-
|
46
|
||||||||||||||||||
Balance, March 31, 2012
|
$
|
12,000
|
7,955,416
|
$
|
71,279
|
$
|
4,711
|
$
|
293
|
$
|
88,283
|
|||||||||||||
Balance January 1, 2011
|
$
|
8,628
|
7,620,929
|
$
|
70,067
|
$
|
1,325
|
$
|
168
|
$
|
80,188
|
|||||||||||||
Comprehensive income:
|
||||||||||||||||||||||||
Net income
|
-
|
-
|
-
|
923
|
-
|
923
|
||||||||||||||||||
Other comprehensive income
|
-
|
-
|
-
|
-
|
54
|
54
|
|
|||||||||||||||||
Total comprehensive income
|
$
|
977
|
||||||||||||||||||||||
Dividends on preferred stock, Series A
|
-
|
-
|
-
|
(112
|
)
|
-
|
(112
|
)
|
||||||||||||||||
Preferred stock, Series A discount accretion
|
31
|
-
|
-
|
(31
|
)
|
-
|
-
|
|||||||||||||||||
Options exercised
|
-
|
12,864
|
43
|
-
|
-
|
43
|
||||||||||||||||||
Tax-benefit-exercised non-qualified
stock options
|
-
|
-
|
5
|
-
|
-
|
5
|
||||||||||||||||||
Stock option compensation expense
|
-
|
-
|
39
|
-
|
-
|
39
|
||||||||||||||||||
Balance, March 31, 2011
|
$
|
8,659
|
7,633,793
|
$
|
70,154
|
$
|
2,105
|
$
|
222
|
$
|
81,140
|
Three Months Ended
March 31,
|
||||||||
2012
|
2011
|
|||||||
(in thousands)
|
||||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$
|
1,155
|
$
|
923
|
||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
165
|
194
|
||||||
Provision for loan losses
|
350
|
525
|
||||||
Intangible amortization
|
48
|
58
|
||||||
Net amortization of securities premiums and discounts
|
66
|
35
|
||||||
Earnings from investment in life insurance
|
(118
|
)
|
(93
|
)
|
||||
Net realized loss on sale of other real estate owned
|
28
|
5
|
||||||
Impairment on other real estate owned
|
90
|
-
|
||||||
Stock option and awards compensation expense
|
38
|
39
|
||||||
Decrease (increase) in assets:
|
||||||||
Accrued interest receivable
|
1
|
(34
|
)
|
|||||
Other assets
|
569
|
66
|
||||||
(Decrease) increase in liabilities:
|
||||||||
Accrued interest payable
|
(46
|
)
|
(7
|
)
|
||||
Other liabilities
|
(155
|
)
|
73
|
|||||
Net cash provided by operating activities
|
2,191
|
1,784
|
||||||
Cash flows from investing activities:
|
||||||||
Purchase of securities available-for-sale
|
-
|
(5,750
|
)
|
|||||
Purchase of securities held-to-maturity
|
-
|
(938
|
)
|
|||||
Proceeds from repayments, calls and maturities of securities available-for-sale
|
2,135
|
1,942
|
||||||
Proceeds from repayments, calls and maturities of securities held to maturity
|
885
|
3,422
|
||||||
Proceeds from restricted investments
|
5
|
-
|
||||||
Net increase in loans
|
(7,442
|
)
|
(9,222
|
)
|
||||
Purchases of premises and equipment
|
(35
|
)
|
(74
|
)
|
||||
Construction advances on other real estate owned
|
(66
|
)
|
-
|
|||||
Proceeds from sale of other real estate owned
|
691
|
407
|
||||||
Net cash used in investing activities
|
(3,827)
|
(10,213
|
)
|
|||||
Cash flows from financing activities:
|
||||||||
Net increase in deposits
|
6,933
|
12,197
|
||||||
Net increase in securities sold under agreements to repurchase
|
2,462
|
2,618
|
||||||
Cash dividends paid on preferred stocks
|
(137
|
)
|
(112
|
)
|
||||
Proceeds from employee stock purchase plan
|
11
|
-
|
||||||
Proceeds from exercise of stock options
|
49
|
43
|
||||||
Tax benefit of options exercised
|
2
|
5
|
||||||
Net cash provided by financing activities
|
9,320
|
14,751
|
||||||
Net increase in cash and cash equivalents
|
7,684
|
6,322
|
||||||
Cash and cash equivalents – beginning
|
38,022
|
34,443
|
||||||
Cash and cash equivalents - ending
|
$
|
45,706
|
$
|
40,765
|
||||
Supplementary cash flow information:
|
||||||||
Interest paid
|
$
|
1,268
|
$
|
1,319
|
||||
Income taxes paid
|
$
|
100
|
$
|
200
|
||||
Supplementary schedule of non-cash activities:
|
||||||||
Other real estate acquired in settlement of loans
|
$
|
259
|
$
|
-
|
Three Months Ended
March 31,
|
||||||||
2012
|
2011
|
|||||||
(dollars in thousands, except per share data)
|
||||||||
Net income
|
$ | 1,155 | $ | 923 | ||||
Preferred stock dividend and
discount accretion |
(137 | ) | (143 | ) | ||||
Net income applicable to common
shareholders |
$ | 1,018 | $ | 780 | ||||
Weighted average common shares
outstanding |
7,956,061 | 7,854,098 | ||||||
Effect of dilutive securities, stock
options and warrants |
154,989 | 181,029 | ||||||
Weighted average common shares
outstanding used to calculate diluted earnings per share |
8,111,050 | 8,035,127 | ||||||
Basic earnings per common share
|
$ | 0.13 | $ | 0.10 | ||||
Diluted earnings per common share
|
$ | 0.13 | $ | 0.10 |
Gross
|
Gross
Unrealized Losses
|
|||||||||||||||||||
(in thousands)
|
Amortized
Cost
|
Unrealized
Gains
|
Noncredit
OTTI
|
Other
|
Fair
Value
|
|||||||||||||||
March 31, 2012:
|
||||||||||||||||||||
Securities available for sale:
|
||||||||||||||||||||
U.S. Government agency securities
|
$
|
2,249
|
$
|
6
|
$
|
-
|
$
|
-
|
$
|
2,255
|
||||||||||
Municipal securities
|
1,260
|
36
|
-
|
-
|
1,296
|
|||||||||||||||
U.S. Government-sponsored enterprises (“GSE”) –
Residential mortgage-backed securities
|
20,154
|
580
|
-
|
(12
|
)
|
20,722
|
||||||||||||||
Collateralized residential mortgage obligations
|
15,804
|
316
|
-
|
-
|
16,120
|
|||||||||||||||
Corporate debt securities, primarily financial
institutions
|
3,063
|
3
|
(197
|
)
|
(305
|
)
|
2,564
|
|||||||||||||
42,530
|
941
|
(197
|
)
|
(317
|
)
|
42,957
|
||||||||||||||
Community Reinvestment Act (“CRA”)
|
||||||||||||||||||||
mutual fund
|
2,290
|
59
|
-
|
-
|
2,349
|
|||||||||||||||
$
|
44,820
|
$
|
1,000
|
$
|
(197
|
)
|
$
|
(317
|
)
|
$
|
45,306
|
|||||||||
Securities held to maturity:
|
||||||||||||||||||||
Municipal securities
|
$
|
10,406
|
$
|
540
|
$
|
-
|
$
|
(3
|
)
|
$
|
10,943
|
|||||||||
Corporate debt securities, primarily financial
institutions
|
1,810
|
-
|
-
|
(378
|
)
|
1,432
|
||||||||||||||
$
|
12,216
|
$
|
540
|
$
|
-
|
$
|
(381
|
)
|
$
|
12,375
|
Gross
|
Gross
Unrealized Losses
|
|||||||||||||||||||
(in thousands)
|
Amortized
Cost
|
Unrealized
Gains
|
Noncredit
OTTI
|
Other
|
Fair
Value
|
|||||||||||||||
December 31, 2011:
|
||||||||||||||||||||
Securities available for sale:
|
||||||||||||||||||||
U.S. Government agency securities
|
$
|
2,250
|
$
|
8
|
$
|
-
|
$
|
-
|
$
|
2,258
|
||||||||||
Municipal securities
|
1,261
|
46
|
-
|
-
|
1,307
|
|||||||||||||||
GSE – Residential mortgage-backed securities
|
21,317
|
581
|
-
|
(20
|
)
|
21,878
|
||||||||||||||
Collateralized residential mortgage obligations
|
16,865
|
298
|
-
|
-
|
17,163
|
|||||||||||||||
Corporate debt securities, primarily financial
institutions
|
3,067
|
-
|
(183
|
)
|
(356
|
)
|
2,528
|
|||||||||||||
44,760
|
933
|
(183
|
)
|
(376
|
)
|
45,134
|
||||||||||||||
CRA mutual fund
|
2,258
|
63
|
-
|
-
|
2,321
|
|||||||||||||||
$
|
47,018
|
$
|
996
|
$
|
(183
|
)
|
$
|
(376
|
)
|
$
|
47,455
|
|||||||||
Securities held to maturity:
|
||||||||||||||||||||
Municipal securities
|
$
|
11,296
|
$
|
613
|
$
|
-
|
$
|
(2
|
)
|
$
|
11,907
|
|||||||||
Corporate debt securities, primarily financial
institutions
|
1,809
|
-
|
-
|
(494
|
)
|
1,315
|
||||||||||||||
$
|
13,105
|
$
|
613
|
$
|
-
|
$
|
(496
|
)
|
$
|
13,222
|
Available for Sale
|
Held to Maturity
|
|||||||||||||||
Amortized
Cost
|
Fair
Value
|
Amortized
Cost |
Fair
Value
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Due in one year or less
|
$ | 1,505 | $ | 1,509 | $ | 3,008 | $ | 3,019 | ||||||||
Due in one year through five years
|
1,292 | 1,246 | 1,132 | 1,203 | ||||||||||||
Due in five years through ten years
|
1,673 | 1,687 | 4,037 | 4,287 | ||||||||||||
Due after ten years
|
2,102 | 1,673 | 4,039 | 3,866 | ||||||||||||
6,572 | 6,115 | 12,216 | 12,375 | |||||||||||||
GSE – Residential mortgage-backed securities
|
20,154 | 20,722 | - | - | ||||||||||||
Collateralized residential mortgage obligations
|
15,804 | 16,120 | - | - | ||||||||||||
$ | 42,530 | $ | 42,957 | $ | 12,216 | $ | 12,375 |
Less than 12 Months
|
12 Months or More
|
Total
|
||||||||||||||||||||||
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
|||||||||||||||||||
March 31, 2012:
|
(in thousands)
|
|||||||||||||||||||||||
Municipal securities
|
$
|
567
|
$
|
(3
|
)
|
$
|
-
|
$
|
-
|
$
|
567
|
$
|
(3
|
)
|
||||||||||
GSE – Residential mortgage-backed
securities
|
$
|
3,229
|
$
|
(12
|
)
|
$
|
-
|
$
|
-
|
$
|
3,229
|
$
|
(12
|
)
|
||||||||||
Corporate debt securities, primarily financial institutions
|
284
|
(3
|
)
|
2,701
|
(877
|
)
|
2,985
|
(880
|
)
|
|||||||||||||||
Total Temporarily
|
||||||||||||||||||||||||
Impaired Securities
|
$
|
4,080
|
$
|
(18
|
)
|
$
|
2,701
|
$
|
(877
|
)
|
$
|
6,781
|
$
|
(895
|
)
|
Less than 12 Months
|
12 Months or More
|
Total
|
||||||||||||||||||||||
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
|||||||||||||||||||
December 31, 2011:
|
(in thousands)
|
|||||||||||||||||||||||
Municipal securities
|
$
|
969
|
$
|
(2
|
)
|
$
|
-
|
$
|
-
|
$
|
969
|
$
|
(2
|
)
|
||||||||||
GSE – Residential mortgage-backed
securities
|
3,490
|
(20
|
)
|
-
|
-
|
3,490
|
(20
|
)
|
||||||||||||||||
Corporate debt securities, primarily financial institutions
|
1,252
|
(50
|
)
|
2,591
|
(983
|
)
|
3,843
|
(1,033
|
)
|
|||||||||||||||
Total Temporarily
|
||||||||||||||||||||||||
Impaired Securities
|
$
|
5,711
|
$
|
(72
|
)
|
$
|
2,591
|
$
|
(983
|
)
|
$
|
8,302
|
$
|
(1,055
|
)
|
Beginning balance, January 1, 2011
|
$ | 228 | ||
Additional increases to the amount related to the credit loss
|
||||
for which an other-than-temporary impairment was
|
||||
previously recognized
|
- | |||
Ending balance, March 31, 2011
|
$ | 228 | ||
Beginning balance, January 1, 2012
|
$ | 228 | ||
Additional increases to the amount related to the credit loss
|
||||
for which an other-than-temporary impairment was
|
||||
previously recognized
|
- | |||
Ending balance, March 31, 2012
|
$ | 228 |
|
1.
|
The loan’s observable market price;
|
|
2.
|
The fair value of the underlying collateral; or
|
|
3.
|
The present value (PV) of expected future cash flows.
|
|
1.
|
Changes in lending policy and procedures, including changes in underwriting standards and collection practices not previously considered in estimating credit losses.
|
|
2.
|
Changes in relevant economic and business conditions.
|
|
3.
|
Changes in nature and volume of the loan portfolio and in the terms of loans.
|
|
4.
|
Changes in experience, ability and depth of lending management and staff.
|
|
5.
|
Changes in the volume and severity of past due loans, the volume of non-accrual loans and the volume and severity of adversely classified loans.
|
|
6.
|
Changes in the quality of the loan review system.
|
|
7.
|
Changes in the value of underlying collateral for collateral-dependent loans.
|
|
8.
|
The existence and effect of any concentration of credit and changes in the level of such concentrations.
|
|
9.
|
The effect of other external forces such as competition, legal and regulatory requirements on the level of estimated credit losses in the existing portfolio.
|
March 31,
2012
|
December 31,
2011
|
|||||||
(In Thousands)
|
||||||||
Commercial and industrial
|
$ | 132,822 | $ | 136,869 | ||||
Real estate – construction
|
58,753 | 51,180 | ||||||
Real estate – commercial
|
275,041 | 270,688 | ||||||
Real estate – residential
|
20,034 | 19,201 | ||||||
Consumer
|
50,656 | 52,853 | ||||||
537,306 | 530,791 | |||||||
Allowance for loan losses
|
(7,026 | ) | (7,310 | ) | ||||
Unearned fees
|
(627 | ) | (661 | ) | ||||
Net Loans
|
$ | 529,653 | $ | 522,820 |
30-59 Days
Past Due
|
60-89 Days
Past Due
|
90 Days &
Greater
|
Total Past
Due
|
Current
|
Total Loans
Receivable
|
Loans
Receivable
>90 Days and
Accruing
|
||||||||||||||||||||||
March 31, 2012
|
|
(In Thousands)
|
||||||||||||||||||||||||||
Commercial and industrial
|
$ | 699 | $ | 1,200 | $ | 1,586 | $ | 3,485 | $ | 129,337 | $ | 132,822 | $ | 482 | ||||||||||||||
Real estate – construction
|
- | - | 292 | 292 | 58,461 | 58,753 | - | |||||||||||||||||||||
Real estate – commercial
|
5,990 | 836 | 145 | 6,971 | 268,070 | 275,041 | - | |||||||||||||||||||||
Real estate – residential
|
- | - | 846 | 846 | 19,188 | 20,034 | - | |||||||||||||||||||||
Consumer
|
128 | 205 | 2,130 | 2,463 | 48,193 | 50,656 | - | |||||||||||||||||||||
|
||||||||||||||||||||||||||||
Total
|
$ | 6,817 | $ | 2,241 | $ | 4,999 | $ | 14,057 | $ | 523,249 | $ | 537,306 | $ | 482 |
30-59 Days
Past Due
|
60-89 Days
Past Due
|
90 Days &
Greater
|
Total Past
Due
|
Current
|
Total Loans
Receivable
|
Loans
Receivable
>90 Days and
Accruing
|
||||||||||||||||||||||
December 31, 2011
|
|
(In Thousands)
|
||||||||||||||||||||||||||
Commercial and industrial
|
$ | 538 | $ | 1,776 | $ | 2,349 | $ | 4,663 | $ | 132,206 | $ | 136,869 | $ | - | ||||||||||||||
Real estate – construction
|
- | - | 292 | 292 | 50,888 | 51,180 | - | |||||||||||||||||||||
Real estate – commercial
|
5,499 | - | 145 | 5,644 | 265,044 | 270,688 | - | |||||||||||||||||||||
Real estate – residential
|
- | 998 | 263 | 1,261 | 17,940 | 19,201 | - | |||||||||||||||||||||
Consumer
|
375 | 50 | 2,191 | 2,616 | 50,237 | 52,853 | - | |||||||||||||||||||||
|
||||||||||||||||||||||||||||
Total
|
$ | 6,412 | $ | 2,824 | $ | 5,240 | $ | 14,476 | $ | 516,315 | $ | 530,791 | $ | - |
March 31,
2012
|
December 31,
2011
|
|||||||
(In Thousands)
|
||||||||
Commercial and industrial
|
$ | 1,104 | $ | 2,349 | ||||
Real estate – construction
|
292 | 292 | ||||||
Real estate – commercial
|
145 | 145 | ||||||
Real estate – residential
|
846 | 263 | ||||||
Consumer
|
2,130 | 2,191 | ||||||
Total
|
$ | 4,517 | $ | 5,240 |
Three months ended March 31, 2012
|
||||||||||||
Number of
Contracts
|
Pre-Modification
Outstanding
Recorded
Investment
|
Post-Modification
Outstanding
Recorded
Investment
|
||||||||||
Troubled Debt Restructuring:
|
(Dollars in Thousands)
|
|||||||||||
Commercial and industrial
|
3 | $ | 2,011 | $ | 2,011 | |||||||
Real estate – construction
|
- | - | - | |||||||||
Real estate – commercial
|
1 | 196 | 196 | |||||||||
Real estate – residential
|
- | - | - | |||||||||
Consumer
|
- | - | - | |||||||||
Total
|
4 | $ | 2,207 | $ | 2,207 |
Three months ended March 31, 2011
|
||||||||||||
Number of
Contracts
|
Pre-Modification
Outstanding
Recorded
Investment
|
Post-Modification
Outstanding
Recorded
Investment
|
||||||||||
Troubled Debt Restructuring:
|
(Dollars in Thousands)
|
|||||||||||
Commercial and industrial
|
- | $ | - | $ | - | |||||||
Real estate – construction
|
- | - | - | |||||||||
Real estate – commercial
|
- | - | - | |||||||||
Real estate – residential
|
- | - | - | |||||||||
Consumer
|
- | - | - | |||||||||
Total
|
- | $ | - | $ | - |
At or for the three months ended March 31, 2012
|
||||||||||||||||||||
Recorded
Investment,
Net of
Charge-offs
|
Unpaid
Principal
Balance
|
Related
Allowance
|
Average
Recorded
Investment
|
Interest
Income
Recognized
|
||||||||||||||||
March 31, 2012
|
(In Thousands)
|
|||||||||||||||||||
With no related allowance recorded:
|
||||||||||||||||||||
Commercial and industrial
|
$ | 5,316 | $ | 5,316 | $ | - | $ | 5,346 | $ | 39 | ||||||||||
Real estate – construction
|
- | - | - | - | - | |||||||||||||||
Real estate – commercial
|
3,704 | 3,704 | - | 3,704 | 70 | |||||||||||||||
Real estate – residential
|
585 | 585 | - | 586 | 3 | |||||||||||||||
Consumer
|
575 | 575 | - | 575 | 3 | |||||||||||||||
With an allowance recorded:
|
||||||||||||||||||||
Commercial and industrial
|
$ | 2,479 | $ | 2,760 | $ | 226 | $ | 2,535 | $ | 28 | ||||||||||
Real estate – construction
|
292 | 292 | 90 | 292 | - | |||||||||||||||
Real estate – commercial
|
1,823 | 1,823 | 61 | 1,823 | 32 | |||||||||||||||
Real estate – residential
|
263 | 263 | 60 | 263 | - | |||||||||||||||
Consumer
|
1,781 | 1,938 | 440 | 1,884 | - | |||||||||||||||
Total:
|
||||||||||||||||||||
Commercial and industrial
|
$ | 7,795 | $ | 8,076 | $ | 226 | $ | 7,881 | $ | 67 | ||||||||||
Real estate – construction
|
292 | 292 | 90 | 292 | - | |||||||||||||||
Real estate – commercial
|
5,527 | 5,527 | 61 | 5,527 | 102 | |||||||||||||||
Real estate – residential
|
848 | 848 | 60 | 849 | 3 | |||||||||||||||
Consumer
|
2,356 | 2,513 | 440 | 2,459 | 3 | |||||||||||||||
$ | 16,818 | $ | 17,256 | $ | 877 | $ | 17,008 | $ | 175 |
At or for the year ended December 31, 2011
|
||||||||||||||||||||
Recorded
Investment,
Net of
Charge-offs
|
Unpaid
Principal
Balance
|
Related
Allowance
|
Average
Recorded
Investment
|
Interest
Income
Recognized
|
||||||||||||||||
(In Thousands)
|
||||||||||||||||||||
December 31, 2011
|
||||||||||||||||||||
With no related allowance recorded:
|
||||||||||||||||||||
Commercial and industrial
|
$ | 3,423 | $ | 3,423 | $ | - | $ | 3,436 | $ | 139 | ||||||||||
Real estate – construction
|
- | - | - | - | - | |||||||||||||||
Real estate – commercial
|
3,510 | 3,510 | - | 3,529 | 160 | |||||||||||||||
Real estate – residential
|
225 | 225 | - | 225 | 4 | |||||||||||||||
Consumer
|
251 | 251 | - | 251 | 8 | |||||||||||||||
With an allowance recorded:
|
||||||||||||||||||||
Commercial and industrial
|
$ | 2,914 | $ | 3,161 | $ | 928 | $ | 2,876 | $ | 55 | ||||||||||
Real estate – construction
|
292 | 292 | 63 | 414 | 20 | |||||||||||||||
Real estate – commercial
|
4,228 | 4,228 | 188 | 4,265 | 244 | |||||||||||||||
Real estate – residential
|
263 | 263 | 15 | 263 | 5 | |||||||||||||||
Consumer
|
1,938 | 1,938 | 254 | 1,938 | - | |||||||||||||||
Total:
|
||||||||||||||||||||
Commercial and industrial
|
$ | 6,337 | $ | 6,584 | $ | 928 | $ | 6,312 | $ | 194 | ||||||||||
Real estate – construction
|
292 | 292 | 63 | 414 | 20 | |||||||||||||||
Real estate – commercial
|
7,738 | 7,738 | 188 | 7,794 | 404 | |||||||||||||||
Real estate – residential
|
488 | 488 | 15 | 488 | 9 | |||||||||||||||
Consumer
|
2,189 | 2,189 | 254 | 2,189 | 8 | |||||||||||||||
$ | 17,044 | $ | 17,291 | $ | 1,448 | $ | 17,197 | $ | 635 |
Pass
|
Special
Mention
|
Substandard
|
Doubtful
|
Total
|
||||||||||||||||
March 31, 2012
|
(In Thousands)
|
|||||||||||||||||||
Commercial and industrial
|
$ | 112,721 | $ | 6,678 | $ | 13,423 | $ | - | $ | 132,822 | ||||||||||
Real estate – construction
|
54,077 | - | 4,676 | - | 58,753 | |||||||||||||||
Real estate – commercial
|
257,827 | 3,982 | 13,232 | - | 275,041 | |||||||||||||||
Real estate – residential
|
19,188 | - | 846 | - | 20,034 | |||||||||||||||
Consumer
|
47,863 | 144 | 2,649 | - | 50,656 | |||||||||||||||
Total:
|
$ | 491,676 | $ | 10,804 | $ | 34,826 | $ | - | $ | 537,306 |
Pass
|
Special
Mention
|
Substandard
|
Doubtful
|
Total
|
||||||||||||||||
December 31, 2011
|
(In Thousands)
|
|||||||||||||||||||
Commercial and industrial
|
$ | 119,531 | $ | 4,683 | $ | 12,655 | $ | - | $ | 136,869 | ||||||||||
Real estate – construction
|
50,346 | - | 834 | - | 51,180 | |||||||||||||||
Real estate – commercial
|
255,877 | 4,300 | 10,511 | - | 270,688 | |||||||||||||||
Real estate – residential
|
18,938 | - | 263 | - | 19,201 | |||||||||||||||
Consumer
|
49,973 | 144 | 2,736 | - | 52,853 | |||||||||||||||
Total:
|
$ | 494,665 | $ | 9,127 | $ | 26,999 | $ | - | $ | 530,791 |
Allowance for Loan Losses
|
Loans Receivable
|
|||||||||||||||||||||||
Balance
|
Balance
Related to
Loans
Individually
Evaluated
for
Impairment
|
Balance
Related to
Loans
Collectively
Evaluated
for
Impairment
|
Balance
|
Balance
Individually
Evaluated for
Impairment
|
Balance
Collectively
Evaluated for
Impairment
|
|||||||||||||||||||
March 31, 2012
|
(In Thousands)
|
|||||||||||||||||||||||
Commercial and industrial
|
$ | 1,791 | $ | 226 | $ | 1,565 | $ | 132,822 | $ | 7,795 | $ | 125,027 | ||||||||||||
Real estate – construction
|
1,524 | 90 | 1,434 | 58,753 | 292 | 58,461 | ||||||||||||||||||
Real estate – commercial
|
2,203 | 61 | 2,142 | 275,041 | 5,527 | 269,514 | ||||||||||||||||||
Real estate – residential
|
293 | 60 | 233 | 20,034 | 848 | 19,186 | ||||||||||||||||||
Consumer
|
1,111 | 440 | 671 | 50,656 | 2,356 | 48,300 | ||||||||||||||||||
Unallocated
|
104 | - | 104 | - | - | - | ||||||||||||||||||
Total:
|
$ | 7,026 | $ | 877 | $ | 6,149 | $ | 537,306 | $ | 16,818 | $ | 520,488 |
Allowance for Loan Losses
|
Loans Receivable
|
|||||||||||||||||||||||
Balance
|
Balance
Related to
Loans
Individually
Evaluated
for
Impairment
|
Balance
Related to
Loans
Collectively
Evaluated
for
Impairment
|
Balance
|
Balance
Individually
Evaluated for
Impairment
|
Balance
Collectively
Evaluated for
Impairment
|
|||||||||||||||||||
December 31, 2011
|
(In Thousands)
|
|||||||||||||||||||||||
Commercial and industrial
|
$ | 2,448 | $ | 928 | $ | 1,520 | $ | 136,869 | $ | 6,337 | $ | 130,532 | ||||||||||||
Real estate – construction
|
1,222 | 63 | 1,159 | 51,180 | 292 | 50,888 | ||||||||||||||||||
Real estate – commercial
|
2,412 | 188 | 2,224 | 270,688 | 7,738 | 262,950 | ||||||||||||||||||
Real estate – residential
|
256 | 15 | 241 | 19,201 | 488 | 18,713 | ||||||||||||||||||
Consumer
|
880 | 254 | 626 | 52,853 | 2,189 | 50,664 | ||||||||||||||||||
Unallocated
|
92 | - | 92 | - | - | - | ||||||||||||||||||
Total:
|
$ | 7,310 | $ | 1,448 | $ | 5,862 | $ | 530,791 | $ | 17,044 | $ | 513,747 |
Allowance for Credit Losses
|
Commercial
and
Industrial
|
Real Estate -
Commercial
|
Real Estate -
Construction
|
Real Estate -
Residential
|
Consumer
|
Unallocated
|
Total
|
|||||||||||||||||||||
(In Thousands)
|
||||||||||||||||||||||||||||
Beginning balance,
January 1, 2012
|
$ | 2,448 | $ | 2,412 | $ | 1,222 | $ | 256 | $ | 880 | $ | 92 | $ | 7,310 | ||||||||||||||
Charge-offs
|
(629 | ) | - | - | - | (26 | ) | - | (655 | ) | ||||||||||||||||||
Recoveries
|
2 | - | 18 | - | 1 | - | 21 | |||||||||||||||||||||
Provision
|
(30 | ) | (209 | ) | 284 | 37 | 256 | 12 | 350 | |||||||||||||||||||
Ending balance,
March 31, 2012
|
$ | 1,791 | $ | 2,203 | $ | 1,524 | $ | 293 | $ | 1,111 | $ | 104 | $ | 7,026 |
Allowance for Credit Losses
|
Commercial
and Industrial |
Real Estate -
Commercial |
Real Estate -
Construction |
Real Estate -
Residential |
Consumer
|
Unallocated
|
Total
|
|||||||||||||||||||||
(In Thousands)
|
||||||||||||||||||||||||||||
Beginning balance,
January 1, 2011
|
$ | 2,081 | $ | 2,193 | $ | 895 | $ | 276 | $ | 793 | $ | 8 | $ | 6,246 | ||||||||||||||
Charge-offs
|
(235 | ) | - | - | - | - | - | (235 | ) | |||||||||||||||||||
Recoveries
|
5 | - | - | - | - | - | 5 | |||||||||||||||||||||
Provision
|
74 | 229 | (32 | ) | (17 | ) | 268 | 3 | 525 | |||||||||||||||||||
Ending balance,
March 31, 2011
|
$ | 1,925 | $ | 2,422 | $ | 863 | $ | 259 | $ | 1,061 | $ | 11 | $ | 6,541 |
|
·
|
The Company granted to directors non-qualified stock options to purchase an aggregate of 61,800 shares of Company common stock. These options are scheduled to vest 20% per year over five years beginning December 12, 2012. These options were granted with an exercise price of $5.19 per share based upon the $4.69 trading price of Company’s common stock on the grant date.
|
|
·
|
The Company granted to employees incentive stock options to purchase an aggregate of 71,379 shares of Company common stock. These options are scheduled to vest 20% per year over five years beginning December 12, 2012. The options were granted with an exercise price of $5.19 per share based upon the $4.69 trading price of Company’s common stock on the grant date.
|
Number of Shares
|
Weighted
Average
Price
|
Weighted
Average
Remaining
Life
|
Aggregate
Intrinsic
Value
|
||||||||||
Options outstanding, December 31, 2011
|
917,581
|
$
|
6.82
|
||||||||||
Options exercised
|
(14,975
|
)
|
3.30
|
||||||||||
Options forfeited
|
(2,676
|
)
|
4.28
|
||||||||||
Options outstanding, March 31, 2012
|
899,930
|
$
|
6.89
|
5.3 years
|
$
|
1,050,473
|
|||||||
Options exercisable, March 31, 2012
|
609,938
|
$
|
8.15
|
4.0 years
|
$
|
618,672
|
|||||||
Option price range at March 31, 2012
|
$3.01 to $14.17
|
Number of Shares
|
Weighted
Average
Price
|
|||||||
Unvested at December 31, 2011
|
22,042 | $ | 3.93 | |||||
Forfeited
|
(4,133 | ) | 3.93 | |||||
Unvested at March 31, 2012
|
17,909 | $ | 3.93 |
Amount
|
Rate
|
Original
Term
|
Maturity
|
||||||||||||
(dollars in thousands) | |||||||||||||||
Convertible Note
|
$ 7,500
|
3.97%
|
10 years
|
November 2017
|
|||||||||||
Fixed Rate Note
|
1,500
|
1.67%
|
4 years
|
August 2014
|
|||||||||||
Fixed Rate Note
|
1,500
|
2.00%
|
5 years
|
August 2015
|
|||||||||||
Fixed Rate Note
|
1,500
|
2.41%
|
6 years
|
August 2016
|
|||||||||||
Fixed Rate Note
|
1,500
|
2.71%
|
7 years
|
August 2017
|
|||||||||||
$ 13,500
|
3.18%
|
|
Level 1:
|
Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
|
|
Level 2:
|
Quoted prices in markets that are not active, or inputs that are observable either directly or indirectly, for substantially the full term of the asset or liability.
|
|
Level 3:
|
Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e. supported with little or no market activity).
|
Description
|
(Level 1)
Quoted Prices
in Active
Markets for
Identical
Assets
|
(Level 2)
Significant
Other
Observable
Inputs
|
(Level 3)
Significant
Unobservable
Inputs
|
Total
|
||||||||||||
At March 31, 2012
|
(in thousands)
|
|||||||||||||||
Securities available for sale:
|
||||||||||||||||
U.S. Government agency securities
|
$
|
-
|
$
|
2,255
|
$
|
-
|
$
|
2,255
|
||||||||
Municipal securities
|
-
|
1,296
|
-
|
1,296
|
||||||||||||
GSE: Residential mortgage-backed securities
|
-
|
20,722
|
-
|
20,722
|
||||||||||||
Collateralized residential mortgage obligations
|
-
|
16,120
|
-
|
16,120
|
||||||||||||
Corporate debt securities, primarily financial
institutions
|
-
|
2,489
|
75
|
2,564
|
||||||||||||
CRA mutual Fund
|
2,349
|
-
|
-
|
2,349
|
||||||||||||
Total
|
$
|
2,349
|
$
|
42,882
|
$
|
75
|
$
|
45,306
|
||||||||
At December 31, 2011
|
||||||||||||||||
Securities available for sale:
|
||||||||||||||||
U.S. Government agency securities
|
$
|
-
|
$
|
2,258
|
$
|
-
|
$
|
2,258
|
||||||||
Municipal securities
|
-
|
1,307
|
-
|
1,307
|
||||||||||||
GSE: Residential mortgage-backed securities
|
-
|
21,878
|
-
|
21,878
|
||||||||||||
Collateralized residential mortgage obligations
|
-
|
17,163
|
-
|
17,163
|
||||||||||||
Corporate debt securities, primarily financial
institutions
|
-
|
2,439
|
89
|
2,528
|
||||||||||||
CRA mutual Fund
|
2,321
|
-
|
-
|
2,321
|
||||||||||||
Total
|
$
|
2,321
|
$
|
45,045
|
$
|
89
|
$
|
47,455
|
Fair Value Measurements Using Significant
Unobservable Inputs (Level 3)
|
||||||||
Securities available for sale
|
||||||||
2012
|
2011
|
|||||||
(in thousands)
|
||||||||
Beginning balance, January 1,
|
$
|
89
|
$
|
29
|
||||
Gains/(losses) for the period:
|
||||||||
Included in other comprehensive income
|
(14
|
)
|
66
|
|||||
Ending balance, March 31,
|
$
|
75
|
$
|
95
|
||||
Description
|
(Level 1)
Quoted Prices
in Active
Markets for
Identical
Assets
|
(Level 2)
Significant
Other
Observable
Inputs
|
(Level 3)
Significant
Unobservable
Inputs
|
Total
|
||||||||||||
(in thousands)
|
||||||||||||||||
At March 31, 2012
|
||||||||||||||||
Impaired loans
|
$
|
-
|
$
|
-
|
$
|
5,761
|
$
|
5,761
|
||||||||
Other real estate owned
|
-
|
-
|
7,281
|
7,281
|
||||||||||||
At December 31, 2011
|
||||||||||||||||
Impaired loans
|
$
|
-
|
$
|
-
|
$
|
8,187
|
$
|
8,187
|
||||||||
Other real estate owned
|
-
|
-
|
7,765
|
7,765
|
||||||||||||
Property held for sale
|
|
-
|
-
|
1,000
|
1,000
|
|
·
|
Impaired loans – Impaired loans measured at fair value are those loans in which the Company has measured impairment generally based on the fair value of the loan’s collateral. This method of fair value measurement is used on all of the Company’s impaired loans. Fair value is generally determined based upon either independent third party appraisals of the properties or discounted cash flows based upon the expected proceeds. The appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses. The discount range for appraisal and liquidation expenses is -2.5% to -10.0%. These assets are included as Level 3 fair values, based upon the lowest level of input that is significant to the fair value measurements.
|
|
·
|
Other Real Estate Owned (“OREO”) – Real estate properties acquired through, or in lieu of, loan foreclosure are to be sold and carried at fair value less cost to sell. Fair value is based upon the appraised value of the collateral, adjusted by management for factors such as economic conditions and other market factors. The discount range for collateral adjustment to OREO is -2.5% to -40.0%. These assets are included in Level 3 fair value based upon the lowest level of input that is significant to the fair value measurement. At March 31, 2012, properties totaling $7,281,000 as compared to $7,765,000 at December 31, 2011, were acquired through foreclosure and are carried at fair value less estimated selling costs based on current appraisals.
|
|
·
|
Property held for sale – This real estate property is carried in other assets as property held for sale at fair value based upon the appraised value of the property.
|
Fair Value Measurements at March 31, 2012
|
||||||||||||||||||||
(in thousands)
|
Carrying
Amount
|
Estimated
Fair
Value
|
(Level 1)
Quoted Prices
in Active
Markets for
Identical
Assets
|
(Level 2)
Significant
Other
Observable
Inputs
|
(Level 3)
Significant
Unobservable
Inputs
|
|||||||||||||||
Financial assets:
|
||||||||||||||||||||
Cash and cash equivalents
|
$ | 45,706 | $ | 45,706 | $ | 45,706 | $ | - | $ | - | ||||||||||
Securities available for sale
|
45,306 | 45,306 | 2,349 | 42,882 | 75 | |||||||||||||||
Securities held to maturity
|
12,216 | 12,375 | - | 12,375 | - | |||||||||||||||
Restricted stock
|
2,232 | 2,232 | - | - | 2,232 | |||||||||||||||
Loans receivable
|
529,653 | 530,104 | - | - | 530,104 | |||||||||||||||
Accrued interest receivable
|
1,927 | 1,927 | 1,927 | - | - | |||||||||||||||
Financial liabilities:
|
||||||||||||||||||||
Deposits
|
560,845 | 562,949 | 452,501 | 110,448 | - | |||||||||||||||
Securities sold under agreements to repurchase
|
18,680 | 18,680 | 18,680 | - | - | |||||||||||||||
Long-term debt
|
13,500 | 14,940 | - | 14,940 | - | |||||||||||||||
Accrued interest payable
|
61 | 61 | 61 | - | - | |||||||||||||||
Off-balance sheet financial instruments:
|
||||||||||||||||||||
Commitments to extend credit and outstanding
letters of credit
|
- | - | - | - | - |
December 31, 2011
|
||||||||
Carrying
Amount
|
Estimated Fair
Value
|
|||||||
(in thousands)
|
|
|||||||
Financial assets:
|
||||||||
Cash and cash equivalents
|
$
|
38,022
|
$
|
38,022
|
||||
Securities available for sale
|
47,455
|
47,455
|
||||||
Securities held to maturity
|
13,105
|
13,222
|
||||||
Restricted stock
|
2,237
|
2,237
|
||||||
Loans receivable
|
522,820
|
516,174
|
||||||
Accrued interest receivable
|
1,928
|
1,928
|
||||||
Financial liabilities:
|
||||||||
Deposits
|
553,912
|
556,442
|
||||||
Securities sold under agreements to repurchase
|
16,218
|
16,218
|
||||||
Long-term debt
|
13,500
|
14,950
|
||||||
Accrued interest payable
|
107
|
107
|
||||||
Off-balance sheet financial instruments:
|
||||||||
Commitments to extend credit and outstanding
letters of credit |
-
|
-
|
Dividend Rate Following Investment Date
|
||||||
Increase in Qualified Small Business Lending
from the Baseline
|
First 9
Quarters*
|
Quarter 10
to Year 4.5
|
After Year
4.5
|
|||
0% or less
|
5%
|
7%
|
9%
|
|||
More than 0%, but less than 2.5%
|
5%
|
5%
|
9%
|
|||
2.5% or more, but less than 5%
|
4%
|
4%
|
9%
|
|||
5% or more, but less than 7.5%
|
3%
|
3%
|
9%
|
|||
7.5% or more, but less than 10%
|
2%
|
2%
|
9%
|
|||
10% or more
|
1%
|
1%
|
9%
|
|||
* For the first nine quarters, the dividend rate will be adjusted quarterly.
|
||||||
(Annualized)
For the
Three months ended March 31,
|
||||||||
2012
|
2011
|
|||||||
Return on average assets
|
0.68 | % | 0.57 | % | ||||
Return on average tangible assets (1)
|
0.70 | % | 0.59 | % | ||||
Return on average shareholders' equity
|
5.26 | % | 4.57 | % | ||||
Return on average tangible shareholders' equity (1)
|
6.67 | % | 5.95 | % | ||||
Net interest margin
|
4.19 | % | 4.33 | % | ||||
Average equity to average assets
|
12.89 | % | 12.53 | % | ||||
Average tangible equity to average tangible assets (1)
|
10.46 | % | 9.91 | % |
|
(1)
|
The following table provided the reconciliation of Non-GAAP Financial Measures for the dates indicated:
|
For the
Three months ended March 31,
|
||||||||
2012
|
2011
|
|||||||
Book value per common share
|
$ | 9.58 | $ | 9.21 | ||||
Effect of intangible assets
|
(2.32 | ) | (2.37 | ) | ||||
Tangible book value per common share
|
7.26 | 6.84 | ||||||
Return on average assets
|
0.68 | % | 0.57 | % | ||||
Effect of intangible assets
|
0.02 | % | 0.02 | % | ||||
Return on average tangible assets
|
0.70 | % | 0.59 | % | ||||
Return on average equity
|
5.26 | % | 4.57 | % | ||||
Effect of average intangible assets
|
1.41 | % | 1.38 | % | ||||
Return on average tangible equity
|
6.67 | % | 5.95 | % | ||||
Average equity to average assets
|
12.89 | % | 12.53 | % | ||||
Effect of average intangible assets
|
(2.43 | %) | (2.62 | %) | ||||
Average tangible equity to average tangible assets
|
10.46 | % | 9.91 | % |
Three Months Ended
March 31, 2012
|
Three Months Ended
March 31, 2011
|
|||||||||||||||||||||||
(dollars in thousands)
|
Average
Balance
|
Interest
Income/
Expense
|
Average
Rate
|
Average
Balance
|
Interest
Income/
Expense
|
Average
Rate
|
||||||||||||||||||
ASSETS
|
||||||||||||||||||||||||
Interest Earning Assets:
|
||||||||||||||||||||||||
Interest bearing deposits in banks
|
$
|
32,984
|
$
|
21
|
0.25
|
%
|
$
|
24,004
|
$
|
15
|
0.25
|
%
|
||||||||||||
Federal funds sold
|
-
|
-
|
0.00
|
%
|
7,000
|
4
|
0.23
|
%
|
||||||||||||||||
Investment securities
|
61,161
|
400
|
2.62
|
%
|
46,829
|
375
|
3.20
|
%
|
||||||||||||||||
Loans, net of unearned fees (1) (2)
|
530,163
|
7,307
|
5.54
|
%
|
515,080
|
7,251
|
5.71
|
%
|
||||||||||||||||
Total Interest Earning Assets
|
624,308
|
7,728
|
4.98
|
%
|
592,913
|
7,645
|
5.23
|
%
|
||||||||||||||||
Non-Interest Earning Assets:
|
||||||||||||||||||||||||
Allowance for loan losses
|
(7,238
|
)
|
(6,263
|
)
|
||||||||||||||||||||
All other assets
|
64,154
|
58,017
|
||||||||||||||||||||||
Total Assets
|
$
|
681,224
|
$
|
644,667
|
||||||||||||||||||||
LIABILITIES & SHAREHOLDERS' EQUITY
|
||||||||||||||||||||||||
Interest-Bearing Liabilities:
|
||||||||||||||||||||||||
NOW deposits
|
$
|
61,837
|
63
|
0.41
|
%
|
$
|
52,289
|
58
|
0.45
|
%
|
||||||||||||||
Savings deposits
|
211,237
|
414
|
0.79
|
%
|
193,806
|
442
|
0.92
|
%
|
||||||||||||||||
Money market deposits
|
84,054
|
96
|
0.46
|
%
|
92,074
|
153
|
0.67
|
%
|
||||||||||||||||
Time deposits
|
111,526
|
513
|
1.85
|
%
|
110,701
|
521
|
1.91
|
%
|
||||||||||||||||
Repurchase agreements
|
18,370
|
28
|
0.61
|
%
|
15,249
|
31
|
0.82
|
%
|
||||||||||||||||
FHLB-term borrowings
|
13,500
|
108
|
3.22
|
%
|
13,500
|
107
|
3.21
|
%
|
||||||||||||||||
Total Interest Bearing Liabilities
|
500,524
|
1,222
|
0.98
|
%
|
477,619
|
1,312
|
1.11
|
%
|
||||||||||||||||
Non-Interest Bearing Liabilities:
|
||||||||||||||||||||||||
Demand deposits
|
89,146
|
81,530
|
||||||||||||||||||||||
Other liabilities
|
3,746
|
4,753
|
||||||||||||||||||||||
Total Non-Interest Bearing Liabilities
|
92,892
|
86,283
|
||||||||||||||||||||||
Shareholders' Equity
|
87,808
|
80,765
|
||||||||||||||||||||||
Total Liabilities and Shareholders' Equity
|
$
|
681,224
|
$
|
644,667
|
||||||||||||||||||||
NET INTEREST INCOME
|
$
|
6,506
|
$
|
6,333
|
||||||||||||||||||||
NET INTEREST SPREAD (3)
|
4.00
|
%
|
4.12
|
%
|
||||||||||||||||||||
NET INTEREST MARGIN(4)
|
4.19
|
%
|
4.33
|
%
|
(1)
|
Included in interest income on loans are loan fees.
|
(2)
|
Includes non-performing loans.
|
(3)
|
The interest rate spread is the difference between the weighted average yield on average interest earning assets and the weighted average cost of average interest bearing liabilities.
|
(4)
|
The interest rate margin is calculated by dividing annualized net interest income by average interest earning assets.
|
Three Months Ended March 31, 2012
|
||||||||||||
Compared to Three Months Ended
|
||||||||||||
March 31, 2011
|
||||||||||||
Volume
|
Rate
|
Net
|
||||||||||
(in thousands)
|
||||||||||||
Interest Earned On:
|
||||||||||||
Interest bearing deposits in banks
|
$
|
6
|
$
|
-
|
$
|
6
|
||||||
Federal funds sold
|
-
|
(4
|
)
|
(4
|
)
|
|||||||
Investment securities
|
114
|
(89
|
)
|
25
|
||||||||
Loans
|
214
|
(158
|
)
|
56
|
||||||||
Total Interest Income
|
334
|
(251
|
)
|
83
|
||||||||
Interest Paid On:
|
||||||||||||
NOW deposits
|
11
|
(6
|
)
|
5
|
||||||||
Savings deposits
|
40
|
(68
|
)
|
(28
|
)
|
|||||||
Money market deposits
|
(13
|
)
|
(44
|
)
|
(57
|
)
|
||||||
Time deposits
|
4
|
(12
|
)
|
(8
|
)
|
|||||||
Repurchase agreements
|
6
|
(9
|
)
|
(3
|
)
|
|||||||
Long-term debt
|
-
|
1
|
1
|
|||||||||
Total Interest Expense
|
48
|
(138
|
)
|
(90
|
)
|
|||||||
Net Interest Income
|
$
|
286
|
$
|
(113
|
)
|
$
|
173
|
March 31,
|
December 31,
|
|||||||||||||||
2012
|
2011
|
|||||||||||||||
Amount
|
Percent
|
Amount
|
Percent
|
|||||||||||||
(in thousands, except for percentages)
|
||||||||||||||||
Commercial and industrial
|
$ | 132,822 | 24.8 | % | $ | 136,869 | 25.8 | % | ||||||||
Real estate – construction
|
58,753 | 11.0 | % | 51,180 | 9.6 | % | ||||||||||
Real estate – commercial
|
275,041 | 51.2 | % | 270,688 | 51.1 | % | ||||||||||
Real estate – residential
|
20,034 | 3.7 | % | 19,201 | 3.6 | % | ||||||||||
Consumer
|
50,656 | 9.4 | % | 52,853 | 10.0 | % | ||||||||||
Unearned fees
|
(627 | ) | (0.1 | %) | (661 | ) | (0.1 | %) | ||||||||
Total loans
|
$ | 536,679 | 100.0 | % | $ | 530,130 | 100.0 | % |
(dollars in thousands)
|
March 31, 2012
|
December 31, 2011
|
||||||
Non-Performing Assets:
|
||||||||
Non-Accrual Loans:
|
||||||||
Commercial and industrial
|
$ | 1,104 | $ | 2,349 | ||||
Real estate-construction
|
292 | 292 | ||||||
Real estate-commercial
|
145 | 145 | ||||||
Real estate – residential
|
846 | 263 | ||||||
Consumer
|
2,130 | 2,191 | ||||||
Total Non-Accrual Loans
|
4,517 | 5,240 | ||||||
Loans 90 days or more past due and still accruing
|
482 | - | ||||||
Total Non-Performing Loans
|
4,999 | 5,240 | ||||||
Other Real Estate Owned
|
7,281 | 7,765 | ||||||
Total Non-Performing Assets
|
$ | 12,280 | $ | 13,005 | ||||
Ratios:
|
||||||||
Non-Performing loans to total loans
|
0.93 | % | 0.99 | % | ||||
Non-Performing assets to total assets
|
1.79 | % | 1.93 | % | ||||
Troubled Debt Restructured Loans
|
$ | 9,781 | $ | 7,579 |
March 31,
|
December 31,
|
|||||||||||
2012
|
2011
|
2011
|
||||||||||
(in thousands, except percentages)
|
||||||||||||
Balance at beginning of year
|
$
|
7,310
|
$
|
6,246
|
$
|
6,246
|
||||||
Provision charged to expense
|
350
|
525
|
2,205
|
|||||||||
Loans charged off, net
|
(634
|
)
|
(230
|
)
|
(1,141
|
)
|
||||||
Balance of allowance at end of period
|
$
|
7,026
|
$
|
6,541
|
$
|
7,310
|
||||||
Ratio of net charge-offs to average
loans outstanding (annualized)
|
0.48
|
%
|
0.18
|
%
|
0.22
|
%
|
||||||
Balance of allowance as a percent of
loans at period-end
|
1.31
|
%
|
1.25
|
%
|
1.38
|
%
|
||||||
Ratio of allowance at period-end to
non-performing loans
|
140.55
|
%
|
105.19
|
%
|
139.50
|
%
|
Amount
|
Rate
|
Original
Term
|
Maturity
|
||||||||||||
(dollars in thousands) | |||||||||||||||
Convertible Note
|
$ 7,500
|
3.97%
|
10 years
|
November 2017
|
|||||||||||
Fixed Rate Note
|
1,500
|
1.67%
|
4 years
|
August 2014
|
|||||||||||
Fixed Rate Note
|
1,500
|
2.00%
|
5 years
|
August 2015
|
|||||||||||
Fixed Rate Note
|
1,500
|
2.41%
|
6 years
|
August 2016
|
|||||||||||
Fixed Rate Note
|
1,500
|
2.71%
|
7 years
|
August 2017
|
|||||||||||
$ 13,500
|
3.18%
|
March 31,
2012
|
December 31,
2011
|
|||||||
(dollars in thousands)
|
||||||||
Home equity lines of credit
|
$ | 27,980 | $ | 27,524 | ||||
Commitments to fund commercial real estate and construction loans
|
64,563 | 72,409 | ||||||
Commitments to fund commercial and industrial loans
|
55,479 | 56,272 | ||||||
Commercial and financial letters of credit
|
4,709 | 5,066 | ||||||
$ | 152,731 | $ | 161,271 |
Tier I
Capital to
Average Assets Ratio
(Leverage Ratio)
|
Tier I
Capital to
Risk Weighted
Assets Ratio
|
Total Capital to
Risk Weighted
Assets Ratio
|
||||||||||||||||||||||
Mar. 31,
2012
|
Dec. 31,
2011
|
Mar. 31,
2012
|
Dec. 31,
2011
|
Mar. 31,
2012
|
Dec. 31,
2012
|
|||||||||||||||||||
Community Partners
|
10.49
|
%
|
10.39
|
%
|
12.09
|
%
|
12.01
|
%
|
13.31
|
%
|
13.26
|
%
|
||||||||||||
Two River
|
10.48
|
%
|
10.38
|
%
|
12.08
|
%
|
12.00
|
%
|
13.30
|
%
|
13.25
|
%
|
||||||||||||
“Adequately capitalized” institution
(under Federal regulations)
|
4.00
|
%
|
4.00
|
%
|
4.00
|
%
|
4.00
|
%
|
8.00
|
%
|
8.00
|
%
|
||||||||||||
“Well capitalized” institution
(under Federal regulations)
|
5.00
|
%
|
5.00
|
%
|
6.00
|
%
|
6.00
|
%
|
10.00
|
%
|
10.00
|
%
|
10.1
|
*
|
Supplemental Executive Retirement Agreement, effective January 1, 2012, between Two River Community Bank and A. Richard Abrahamian
|
|
10.2
|
*
|
Supplemental Executive Retirement Agreement, effective January 1, 2012, between Two River Community Bank and Robert C. Werner
|
|
10.3
|
*
|
Third Amendment to the Two River Community Bank Supplemental Executive Retirement Agreement dated and effective as of January 19, 2012 by and between Two River Community Bank and William D. Moss
|
|
10.4
|
*
|
First Amendment to the Change in Control Agreement, effective as of January 19, 2012, by and between Community Partners Bancorp, Two River Community Bank and A. Richard Abrahamian
|
|
10.5
|
*
|
First Amendment to the Change in Control Agreement, effective as of January 19, 2012, by and between Community Partners Bancorp, Two River Community Bank and Robert C. Werner
|
|
10.6
|
*
|
Second Amendment to the Change in Control Agreement, effective as of January 19, 2012, by and between Community Partners Bancorp, Two River Community Bank and Alan B. Turner
|
|
31.1
|
*
|
Certification of principal executive officer of the Company pursuant to Securities Exchange Act Rule 13a-14(a)
|
|
31.2
|
*
|
Certification of principal financial officer of the Company pursuant to Securities Exchange Act Rule 13a-14(a)
|
|
32
|
*
|
Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of The Sarbanes-Oxley Act of 2002, signed by the principal executive officer of the Company and the principal financial officer of the Company
|
|
101.INS**
|
XBRL Instance Document
|
||
101.SCH**
|
XBRL Taxonomy Extension Schema
|
||
101.CAL**
|
XBRL Taxonomy Extension Calculation Linkbase
|
||
101.DEF**
|
XBRL Taxonomy Extension Definition Linkbase
|
||
101.LAB**
|
XBRL Taxonomy Extension Label Linkbase
|
||
101.PRE**
|
XBRL Taxonomy Extension Presentation Linkbase
|
||
* Filed herewith.
|
|||
** Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability.
|
COMMUNITY PARTNERS BANCORP
|
|||
Date: May 15, 2012
|
By:
|
/s/ WILLIAM D. MOSS
|
|
William D. Moss
|
|||
President and Chief Executive Officer
|
|||
(Principal Executive Officer)
|
|||
Date: May 15, 2012
|
By:
|
/s/ A. RICHARD ABRAHAMIAN
|
|
A. Richard Abrahamian
|
|||
Executive Vice President and Chief Financial Officer
|
|||
(Principal Financial and Accounting Officer)
|