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Table of Contents

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

(Mark One)

 

x      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2011

 

OR

 

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 number 001-12669

 

GRAPHIC

 

SCBT FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

 

South Carolina

 

57-0799315

(State or other jurisdiction of incorporation)

 

(IRS Employer Identification No.)

 

520 Gervais Street

 

 

Columbia, South Carolina

 

29201

(Address of principal executive offices)

 

(Zip Code)

 

(800) 277-2175

(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 website, if any, every Interactive Data file required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 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 o  No o

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large Accelerated Filer o

 

Accelerated Filer x

 

 

 

Non-Accelerated Filer o

 

Smaller Reporting Company o

 

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 issuer’s classes of common stock, as of the latest practicable date:

 

Class

 

Outstanding as of April 30, 2011

Common Stock, $2.50 par value

 

13,972,145

 

 

 



Table of Contents

 

SCBT Financial Corporation and Subsidiary

March 31, 2011 Form 10-Q

 

INDEX

 

 

 

Page

 

 

 

PART I — FINANCIAL INFORMATION

 

 

 

 

Item 1.

Financial Statements

 

 

 

 

 

Condensed Consolidated Balance Sheets at March 31, 2011, December 31, 2010 and March 31, 2010

1

 

 

 

 

Condensed Consolidated Statements of Income for the Three Months Ended March 31, 2011 and 2010

2

 

 

 

 

Condensed Consolidated Statements of Changes in Shareholders’ Equity for the Three Months Ended March 31, 2011 and 2010

3

 

 

 

 

Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2011 and 2010

4

 

 

 

 

Notes to Condensed Consolidated Financial Statements

5-40

 

 

 

Item 2. 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

41-59

 

 

 

Item 3. 

Quantitative and Qualitative Disclosures About Market Risk

60

 

 

 

Item 4.

Controls and Procedures

60

 

 

 

PART II — OTHER INFORMATION

 

 

 

 

Item 1.

Legal Proceedings

61

 

 

 

Item 1A.

Risk Factors

61

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

61

 

 

 

Item 3.

Defaults Upon Senior Securities

61

 

 

 

Item 4.

(Removed and Reserved)

61

 

 

 

Item 5.

Other Information

61

 

 

 

Item 6.

Exhibits

62

 



Table of Contents

 

PART I — FINANCIAL INFORMATION

Item 1.  FINANCIAL STATEMENTS

 

SCBT Financial Corporation and Subsidiary

Condensed Consolidated Balance Sheets

(Dollars in thousands, except par value)

 

 

 

March 31,

 

December 31,

 

March 31,

 

 

 

2011

 

2010

 

2010

 

 

 

(Unaudited)

 

(Note 1)

 

(Unaudited)

 

ASSETS

 

 

 

 

 

 

 

Cash and cash equivalents:

 

 

 

 

 

 

 

Cash and due from banks

 

$

129,293

 

$

83,449

 

$

60,675

 

Interest-bearing deposits with banks

 

1,325

 

416

 

171

 

Federal funds sold and securities purchased under agreements to resell

 

282,006

 

153,234

 

177,251

 

Total cash and cash equivalents

 

412,624

 

237,099

 

238,097

 

Investment securities:

 

 

 

 

 

 

 

Securities held to maturity (fair value of $20,189, $20,150 and $21,062, respectively)

 

19,730

 

19,941

 

20,403

 

Securities available for sale, at fair value

 

189,654

 

197,374

 

268,372

 

Other investments

 

23,823

 

20,597

 

22,181

 

Total investment securities

 

233,207

 

237,912

 

310,956

 

Loans held for sale

 

10,755

 

42,704

 

15,925

 

Loans:

 

 

 

 

 

 

 

Covered under FDIC loss share agreements

 

417,796

 

321,038

 

438,807

 

Not covered under FDIC loss share agreements

 

2,348,309

 

2,296,200

 

2,175,242

 

Less allowance for loan losses

 

(73,997

)

(47,512

)

(41,397

)

Loans, net

 

2,692,108

 

2,569,726

 

2,572,652

 

FDIC receivable for loss share agreements

 

303,795

 

212,103

 

277,158

 

Other real estate owned (covered of $77,286, $69,317, and $32,076, respectively; and non-covered of $19,816, $17,264, and $9,319, respectively)

 

97,102

 

86,581

 

41,395

 

Premises and equipment, net

 

87,326

 

87,381

 

72,079

 

Goodwill

 

62,888

 

62,888

 

62,888

 

Other assets

 

63,061

 

58,397

 

74,034

 

Total assets

 

$

3,962,866

 

$

3,594,791

 

$

3,665,184

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

Noninterest-bearing

 

$

606,135

 

$

484,838

 

$

457,412

 

Interest-bearing

 

2,713,415

 

2,519,310

 

2,537,702

 

Total deposits

 

3,319,550

 

3,004,148

 

2,995,114

 

Federal funds purchased and securities sold under agreements to repurchase

 

206,560

 

191,017

 

237,669

 

Other borrowings

 

46,587

 

46,978

 

62,929

 

Other liabilities

 

24,119

 

22,691

 

34,706

 

Total liabilities

 

3,596,816

 

3,264,834

 

3,330,418

 

Shareholders’ equity:

 

 

 

 

 

 

 

Preferred stock - $.01 par value; authorized 10,000,000 shares; no shares issued and outstanding

 

 

 

 

Common stock - $2.50 par value; authorized 40,000,000 shares; 13,958,824, 12,793,823 and 12,750,774 shares issued and outstanding

 

34,897

 

31,985

 

31,877

 

Surplus

 

230,826

 

198,647

 

196,793

 

Retained earnings

 

103,262

 

103,117

 

106,713

 

Accumulated other comprehensive loss

 

(2,935

)

(3,792

)

(617

)

Total shareholders’ equity

 

366,050

 

329,957

 

334,766

 

Total liabilities and shareholders’ equity

 

$

3,962,866

 

$

3,594,791

 

$

3,665,184

 

 

The Accompanying Notes are an Integral Part of the Financial Statements.

 

1



Table of Contents

 

SCBT Financial Corporation and Subsidiary

Condensed Consolidated Statements of Income (unaudited)

(Dollars in thousands, except per share data)

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2011

 

2010

 

Interest income:

 

 

 

 

 

Loans, including fees

 

$

36,828

 

$

34,173

 

Investment securities:

 

 

 

 

 

Taxable

 

1,858

 

2,514

 

Tax-exempt

 

216

 

265

 

Federal funds sold and securities purchased under agreements to resell

 

353

 

252

 

Total interest income

 

39,255

 

37,204

 

Interest expense:

 

 

 

 

 

Deposits

 

5,717

 

7,055

 

Federal funds purchased and securities sold under agreements to repurchase

 

160

 

165

 

Other borrowings

 

532

 

1,353

 

Total interest expense

 

6,409

 

8,573

 

Net interest income

 

32,846

 

28,631

 

Provision for loan losses

 

10,641

 

20,778

 

Net interest income after provision for loan losses

 

22,205

 

7,853

 

Noninterest income:

 

 

 

 

 

Gain on acquisition

 

5,528

 

98,081

 

Service charges on deposit accounts

 

5,030

 

4,523

 

Bankcard services income

 

2,659

 

1,799

 

Trust and investment services income

 

1,249

 

784

 

Mortgage banking income

 

863

 

844

 

Securities gains

 

323

 

 

Total other-than-temporary impairment losses

 

 

(5,586

)

Portion of impairment losses recognized in other comprehensive loss

 

 

 

Net impairment losses recognized in earnings

 

 

(5,586

)

Accretion (amortization) of FDIC indemnification asset

 

(401

)

369

 

Other

 

622

 

807

 

Total noninterest income

 

15,873

 

101,621

 

Noninterest expense:

 

 

 

 

 

Salaries and employee benefits

 

16,646

 

13,753

 

Net occupancy expense

 

2,576

 

2,373

 

OREO expense and loan related

 

2,533

 

(270

)

Information services expense

 

2,341

 

2,371

 

Furniture and equipment expense

 

1,957

 

1,636

 

FDIC assessment and other regulatory charges

 

1,479

 

1,323

 

Advertising and marketing

 

909

 

587

 

Amortization of intangibles

 

446

 

349

 

Professional fees

 

433

 

557

 

Federal Home Loan Bank advances prepayment fee

 

 

3,189

 

Merger-related expense

 

609

 

3,908

 

Other

 

4,295

 

2,804

 

Total noninterest expense

 

34,224

 

32,580

 

Earnings:

 

 

 

 

 

Income before provision for income taxes

 

3,854

 

76,894

 

Provision for income taxes

 

1,338

 

27,933

 

Net income

 

2,516

 

48,961

 

Earnings per common share:

 

 

 

 

 

Basic

 

$

0.19

 

$

3.89

 

Diluted

 

$

0.19

 

$

3.86

 

Dividends per common share

 

$

0.17

 

$

0.17

 

Weighted-average common shares outstanding:

 

 

 

 

 

Basic

 

13,185

 

12,591

 

Diluted

 

13,273

 

12,696

 

 

The Accompanying Notes are an Integral Part of the Financial Statements.

 

2



Table of Contents

 

SCBT Financial Corporation and Subsidiary

Condensed Consolidated Statements of Changes in Shareholders’ Equity (unaudited)

Three Months Ended March 31, 2011 and 2010

(Dollars in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated Other

 

 

 

 

 

Preferred Stock

 

Common Stock

 

 

 

Retained

 

Comprehensive

 

 

 

 

 

Shares

 

Amount

 

Shares

 

Amount

 

Surplus

 

Earnings

 

Income (Loss)

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2009

 

 

$

 

12,739,533

 

$

31,849

 

$

196,437

 

$

59,915

 

$

(5,382

)

$

282,819

 

Comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

 

 

 

 

48,961

 

 

48,961

 

Change in net unrealized gain on securities available for sale, net of tax

 

 

 

 

 

 

 

4,892

 

4,892

 

Change in unrealized losses on derivative financial instruments qualifying as cash flow hedges, net of tax

 

 

 

 

 

 

 

(127

)

(127

)

Total comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

53,726

 

Cash dividends declared at $.17 per share

 

 

 

 

 

 

(2,163

)

 

(2,163

)

Stock options exercised

 

 

 

1,740

 

4

 

44

 

 

 

48

 

Restricted stock awards

 

 

 

11,171

 

28

 

(28

)

 

 

 

Common stock repurchased

 

 

 

(1,670

)

(4

)

(42

)

 

 

(46

)

Share-based compensation expense

 

 

 

 

 

382

 

 

 

382

 

Balance, March 31, 2010

 

 

$

 

12,750,774

 

$

31,877

 

$

196,793

 

$

106,713

 

$

(617

)

$

334,766

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2010

 

 

$

 

12,793,823

 

$

31,985

 

$

198,647

 

$

103,117

 

$

(3,792

)

$

329,957

 

Comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

 

 

 

 

2,516

 

 

2,516

 

Change in net unrealized gain on securities available for sale, net of tax

 

 

 

 

 

 

 

777

 

777

 

Change in unrealized losses on derivative financial instruments qualifying as cash flow hedges, net of tax

 

 

 

 

 

 

 

80

 

80

 

Total comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,373

 

Cash dividends declared at $.17 per share

 

 

 

 

 

 

(2,371

)

 

(2,371

)

Stock options exercised

 

 

 

3,050

 

8

 

62

 

 

 

70

 

Restricted stock awards

 

 

 

37,106

 

92

 

(92

)

 

 

 

Common stock repurchased

 

 

 

(4,187

)

(10

)

(127

)

 

 

(137

)

Share-based compensation expense

 

 

 

 

 

474

 

 

 

474

 

Common stock issued in private placement offering

 

 

 

1,129,032

 

2,822

 

31,862

 

 

 

34,684

 

Balance, March 31, 2011

 

 

$

 

13,958,824

 

$

34,897

 

$

230,826

 

$

103,262

 

$

(2,935

)

$

366,050

 

 

The Accompanying Notes are an Integral Part of the Financial Statements

 

3



Table of Contents

 

SCBT Financial Corporation and Subsidiary

Condensed Consolidated Statements of Cash Flows (unaudited)

(Dollars in thousands)

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2011

 

2010

 

Cash flows from operating activities:

 

 

 

 

 

Net income

 

$

2,516

 

$

48,961

 

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

 

 

 

 

 

Depreciation and amortization

 

2,481

 

1,887

 

Provision for loan losses

 

10,641

 

20,778

 

Deferred income taxes

 

937

 

31,096

 

Other-than-temporary impairment on securities

 

 

5,586

 

Gain on sale of securities

 

(323

)

 

Gain on acquisition

 

(5,528

)

(98,081

)

Share-based compensation expense

 

474

 

382

 

Loss on disposal of premises and equipment

 

31

 

42

 

Federal Home Loan Bank advances prepayment fee

 

 

3,189

 

(Accretion) amortization of FDIC indemnification asset

 

401

 

(369

)

Accretion on loans covered under FDIC loss share agreements

 

1,604

 

1,029

 

Net amortization of investment securities

 

398

 

171

 

Net change in:

 

 

 

 

 

Loans held for sale

 

31,949

 

1,639

 

Accrued interest receivable

 

726

 

121

 

Prepaid assets

 

844

 

467

 

FDIC loss share receivable

 

(4,675

)

 

Accrued interest payable

 

(1,848

)

(3,028

)

Accrued income taxes

 

374

 

(4,904

)

Miscellaneous assets and liabilities

 

3,225

 

(11,577

)

Net cash provided by (used in) operating activities

 

44,227

 

(2,611

)

Cash flows from investing activities:

 

 

 

 

 

Proceeds from sales of investment securities available for sale

 

52,092

 

 

Proceeds from maturities and calls of investment securities held to maturity

 

210

 

1,135

 

Proceeds from maturities and calls of investment securities available for sale

 

18,859

 

14,828

 

Purchases of investment securities available for sale

 

(3,743

)

(8,315

)

Purchases of other investment securities

 

(630

)

 

Net (increase) decrease in customer loans

 

(7,174

)

31,784

 

Net cash received from acquisition

 

91,280

 

306,298

 

Purchases of premises and equipment

 

(1,969

)

(1,711

)

Net cash provided by investing activities

 

148,925

 

344,019

 

Cash flows from financing activities:

 

 

 

 

 

Net decrease in deposits

 

(25,247

)

(118,031

)

Net increase in federal funds purchased and securities sold under agreements to repurchase and other short-term borrowings

 

13,712

 

74,809

 

Repayment of FHLB advances

 

(38,338

)

(162,836

)

Common stock issuance

 

34,684

 

 

Common stock repurchased

 

(137

)

(46

)

Dividends paid on common stock

 

(2,371

)

(2,163

)

Stock options exercised

 

70

 

48

 

Net cash used in financing activities

 

(17,627

)

(208,219

)

Net increase in cash and cash equivalents

 

175,525

 

133,189

 

Cash and cash equivalents at beginning of period

 

237,099

 

104,908

 

Cash and cash equivalents at end of period

 

$

412,624

 

$

238,097

 

 

 

 

 

 

 

Supplemental Disclosures:

 

 

 

 

 

Cash paid for:

 

 

 

 

 

Interest

 

$

7,281

 

$

11,601

 

Income taxes

 

$

 

$

4,871

 

 

The Accompanying Notes are an Integral Part of the Financial Statements.

 

4



Table of Contents

 

SCBT Financial Corporation and Subsidiary

Notes to Condensed Consolidated Financial Statements (unaudited)

 

Note 1 — Basis of Presentation

 

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X.  Accordingly, they do not include all of the information and disclosures required by accounting principles generally accepted in the United States for complete financial statements.  In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.  Certain prior period information has been reclassified to conform to the current period presentation, and these reclassifications had no impact on net income or equity as previously reported.  Operating results for the three months ended March 31, 2011 are not necessarily indicative of the results that may be expected for the year ending December 31, 2011.

 

The condensed consolidated balance sheet at December 31, 2010, has been derived from the audited financial statements at that date, but does not include all of the information and disclosures required by accounting principles generally accepted in the United States for complete financial statements.

 

Note 2 — Summary of Significant Accounting Policies

 

The information contained in the consolidated financial statements and accompanying notes included in SCBT Financial Corporation’s (the “Company” or “SCBT”) Annual Report on Form 10-K for the year ended December 31, 2010, as filed with the Securities and Exchange Commission (the “SEC”) on March 16, 2011,  should be referenced when reading these unaudited condensed consolidated financial statements.

 

Business Combinations, Method of Accounting for Loans Acquired, and FDIC Indemnification Asset

 

The Company accounts for its acquisitions under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 805, Business Combinations, which requires the use of the purchase method of accounting.  All identifiable assets acquired, including loans, are recorded at fair value.  No allowance for loan losses related to the acquired loans is recorded on the acquisition date because the fair value of the loans acquired incorporates assumptions regarding credit risk.  Loans acquired are recorded at fair value in accordance with the fair value methodology prescribed in FASB ASC Topic 820, Fair Value Measurements and Disclosures, exclusive of the loss share agreements with the Federal Deposit Insurance Corporation (the “FDIC”).  The fair value estimates associated with the loans include estimates related to expected prepayments and the amount and timing of undiscounted expected principal, interest and other cash flows.

 

Acquired credit-impaired loans are accounted for under the accounting guidance for loans and debt securities acquired with deteriorated credit quality, found in FASB ASC Topic 310-30, Receivables—Loans and Debt Securities Acquired with Deteriorated Credit Quality, formerly American Institute of Certified Public Accountants (“AICPA”) Statement of Position (SOP) 03-3, Accounting for Certain Loans or Debt Securities Acquired in a Transfer, and initially measured at fair value, which includes estimated future credit losses expected to be incurred over the life of the loans.  Loans acquired in business combinations with evidence of credit deterioration since origination and for which it is probable that all contractually required payments will not be collected are considered to be credit impaired.  Evidence of credit quality deterioration as of purchase dates may include information such as past-due and nonaccrual status, borrower credit scores and recent loan to value percentages.  The Company considers expected prepayments and estimates the amount and timing of undiscounted expected principal, interest and other cash flows for each loan or pool of loans meeting the criteria above, and determines the excess of the loan’s scheduled contractual principal and contractual interest payments over all cash flows expected at acquisition as an amount that should not be accreted (nonaccretable difference). The remaining amount, representing the excess of the loan’s or pool’s cash flows expected to be collected over the amount deemed paid for the loan or pool of loans, is accreted into interest income over the remaining life of the loan or pool (accretable yield). The Company records a discount on these loans at acquisition to record them at their realizable cash flow.  In accordance with FASB ASC Topic 310-30, the Company aggregated loans that have common risk characteristics into pools within the following loan categories:  commercial loans greater than or equal to $1 million, commercial real estate, commercial real estate—construction and development, residential real estate, residential real estate junior lien, home equity, consumer, commercial and industrial, and single pay.

 

Loans acquired through business combinations that do not meet the specific criteria of FASB ASC Topic 310-30, but for which a discount is attributable at least in part to credit quality, are also accounted for under this guidance.  As a result, related discounts are recognized subsequently through accretion based on the expected cash flow of the acquired loans.

 

5



Table of Contents

 

Note 2 — Summary of Significant Accounting Policies (continued)

 

Pursuant to an AICPA letter dated December 18, 2009, the AICPA summarized the view of the SEC regarding the accounting in subsequent periods for discount accretion associated with loan receivables acquired in a business combination or asset purchase.  Regarding the accounting for such loan receivables, that in the absence of further standard setting, the AICPA understands that the SEC would not object to an accounting policy based on contractual cash flows (FASB ASC Topic 310-20 approach) or an accounting policy based on expected cash flows (FASB ASC Topic 310-30 approach). Management believes the approach using expected cash flows is a more appropriate option to follow in accounting for the fair value discount.

 

Subsequent to the acquisition date, increases in cash flows expected to be received in excess of the Company’s initial investment in the loans should be accreted into interest income on a level-yield basis over the life of the loan.  Decreases in cash flows expected to be collected should be recognized as impairment through the provision for loan losses.  The FDIC indemnification asset will be adjusted in a similar, consistent manner with increases and decreases in expected cash flows.

 

The FDIC indemnification asset is measured separately from the related covered asset as it is not contractually embedded in the assets and is not transferable with the assets should the Company choose to dispose of them.  Fair value was estimated using projected cash flows related to the loss sharing agreements based on the expected reimbursements for losses and the applicable loss sharing percentages.  These expected reimbursements do not include reimbursable amounts related to future covered expenditures.  These cash flows were discounted to reflect the uncertainty of the timing and receipt of the loss sharing reimbursement from the FDIC.

 

The Company incurs expenses related to the assets indemnified by the FDIC and, pursuant to the loss share agreement, certain costs are reimbursable by the FDIC and are included in monthly and quarterly claims made by the Company.  The estimates of reimbursements are netted against these covered expenses in the statements of income.

 

Note 3 — Recent Accounting Pronouncements

 

The enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) will result in expansive changes in many areas affecting the financial services industry in general and the Company in particular. The legislation provides broad economic oversight, consumer financial services protection, investor protection, rating agency reform and derivative regulatory reform. Various corporate governance requirements will result in expanded proxy disclosures and shareholder rights. Additional provisions address the mortgage industry in an effort to strengthen lending practices. Deposit insurance reform will result in permanent FDIC protection for up to $250,000 of deposits and will require the FDIC’s Deposit Insurance Fund to maintain 1.35 percent of insured deposits with the burden for closing any shortfall falling to banks with more than $10.0 billion in assets. Provisions within the Dodd-Frank Act will prohibit institutions that had more than $15 billion in assets on December 31, 2009 from including trust preferred securities (“TRUPs”) as Tier 1 capital beginning in 2013. One third will be phased out over the next two years ending in 2015. Financial institutions with less than $15 billion in total assets, such as the Company, may continue to count their pre-May 19, 2010, TRUPs as Tier 1 capital, but may not issue new capital TRUPs. Another provision of the legislation gives the Federal Reserve Board the authority to establish rules regarding interchange fees charged for electronic debit transactions by payment card issuers having assets over $10.0 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. While SCBT would not be subject to the interchange fee restrictions, this provision could negatively impact non-interest income if the reductions that are required of larger banks cause industry-wide reductions of interchange fees.

 

Effective December 31, 2010, SCBT adopted certain of the key provisions of Accounting Standards Update (“ASU”) No. 2010-20, Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses, (“ASU 2010-20”). ASU 2010-20 amends ASC 310 by requiring more robust and disaggregated disclosures about the credit quality of an entity’s financing receivables and its allowance for credit losses. The objective of enhancing these disclosures is to improve financial statement users’ understanding of (1) the nature of an entity’s credit risk associated with its financing receivables and (2) the entity’s assessment of that risk in estimating its allowance for credit losses as well as changes in the allowance and reasons for those changes. Most of the new and amended disclosures in the ASU are effective December 31, 2010, and are included in Note 5 Loans and Allowance for Loan Losses. The disclosure for the activity in the allowance for credit losses for each period will be effective for the first quarter of 2011.  In January 2011, the FASB issued ASU No. 2011-01, Receivables (Topic 310): Deferral of the Effective Date of Disclosures about Troubled Debt Restructurings in Update No. 2010-20. The amendments in ASU 2011-01 temporarily delay the effective date of the disclosures about troubled debt restructurings in ASU 2010-20 for public entities.  The impact of adoption for SCBT is the inclusion of additional disclosures in SCBT’s consolidated financial statements.

 

6



Table of Contents

 

Note 4 — Mergers and Acquisitions

 

Generally, acquisitions are accounted for under the acquisition method of accounting in accordance with FASB ASC 805, Business Combinations. Both the purchased assets and liabilities assumed are recorded at their respective acquisition date fair values. Determining the fair value of assets and liabilities, especially the loan portfolio and foreclosed real estate, is a complicated process involving significant judgment regarding methods and assumptions used to calculate estimated fair values. Fair values are preliminary and subject to refinement for up to one year after the closing date of the acquisition as additional information regarding the closing date fair values becomes available.

 

Habersham Bank Acquisition

 

On February 18, 2011, the Company’s wholly-owned subsidiary, SCBT, N.A. (the “Bank”), entered into a purchase and assumption (“P&A”) agreement with loss share arrangements with the FDIC to purchase certain assets and assume substantially all of the deposits and certain liabilities of Habersham, a full service Georgia state-chartered community bank headquartered in Clarkesville, Georgia.  Habersham operated eight branches in the northeast region of Georgia.

 

Pursuant to the P&A agreement, the Bank received a discount of $38.3 million on the assets acquired and did not pay the FDIC a premium to assume all customer deposits. Most of the loans and foreclosed real estate purchased are covered by a loss share agreement between the FDIC and the Bank. Under this loss share agreement, the FDIC has agreed to cover 80% of loan and foreclosed real estate losses. Gains and recoveries on covered assets will offset losses, or be paid to the FDIC, at the applicable loss share percentage at the time of recovery. The loss sharing agreement applicable to single family residential mortgage loans provides for FDIC loss sharing and Bank reimbursement to the FDIC for ten years. The loss share agreement applicable to commercial loans provides for FDIC loss sharing for five years and Bank reimbursement to the FDIC for eight years. As of the date of acquisition, we calculated the amount of such reimbursements that we expect to receive from the FDIC using the present value of anticipated cash flows from the covered assets based on the credit adjustments estimated for each pool of loans and the estimated losses on foreclosed assets. In accordance with FASB ASC Topic 805, the FDIC indemnification asset was initially recorded at its fair value, and is measured separately from the loan assets and foreclosed assets because the loss sharing agreements are not contractually embedded in them or transferable with them in the event of disposal. The balance of the FDIC indemnification asset increases and decreases as the expected and actual cash flows from the covered assets fluctuate, as loans are paid off or impaired and as loans and foreclosed assets are sold. There are no contractual interest rates on this contractual receivable from the FDIC; however, a discount was recorded against the initial balance of the FDIC indemnification asset in conjunction with the fair value measurement as this receivable will be collected over the term of the loss sharing agreement. This discount will be accreted to non-interest income over future periods.

 

The Bank did not immediately acquire the real estate, banking facilities, furniture or equipment of Habersham as a part of the P&A agreement. However, the Bank has the option to purchase the real estate and furniture and equipment from the FDIC. The term of this option expires approximately 90 days from the date of the acquisition.

 

As of March 31, 2011, there have been no adjustments or changes to the initial fair values related to the Habersham acquisition. The purchase accounting adjustments and the loss sharing arrangement with the FDIC will significantly impact the effects of the acquired entity on the ongoing operations of the Company. Disclosure of pro forma financial information is also made more difficult by the troubled nature of Habersham prior to the date of the combination. The Company has omitted pro forma information related to the Habersham acquisition because of the pervasive federal assistance in the transaction.

 

As of March 31, 2011, noninterest income included a pre-tax gain of $5.5 million which resulted from the acquisition of Habersham. The amount of the gain was equal to the amount by which the fair value of assets acquired exceeded the fair value of liabilities assumed, and resulted from the discount bid on the assets acquired and the impact of the FDIC loss share agreement, both of which are attributable to the troubled nature of Habersham prior to the acquisition. The Company recognized $609,000 in merger-related expense during the three months ended March 31, 2011.

 

7



Table of Contents

 

Note 4 — Mergers and Acquisitions (continued)

 

The following table presents the assets acquired and liabilities assumed as of February 18, 2011, as recorded by Habersham on the acquisition date and as adjusted for purchase accounting adjustments.

 

 

 

 

 

Balances

 

Balances

 

 

 

 

 

 

 

As Recorded

 

Kept by

 

Acquired

 

Fair Value

 

As Recorded

 

(Dollars in thousands)

 

by Habersham

 

FDIC

 

from FDIC

 

Adjustments

 

by SCBT

 

Assets

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

31,924

 

$

(4

)

$

31,920

 

$

 

$

31,920

 

Investment securities

 

65,018

 

(3,582

)

61,436

 

(566

)(a)

60,870

 

Loans

 

212,828

 

9,039

 

221,867

 

(94,414

)(b)

127,453

 

Premises and equipment

 

16,915

 

(16,915

)

 

 

 

Intangible assets

 

 

 

 

3,262

(c)

3,262

 

FDIC receivable for loss sharing agreement

 

 

 

 

87,418

(d)

87,418

 

Other real estate owned and repossessed assets

 

42,024

 

(616

)

41,408

 

(26,915

)(e)

14,493

 

Other assets

 

14,446

 

(11,227

)

3,219

 

 

3,219

 

Total assets

 

$

383,155

 

$

(23,305

)

$

359,850

 

$

(31,215

)

$

328,635

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing

 

$

76,205

 

$

(5

)

$

76,200

 

$

 

$

76,200

 

Interest-bearing

 

263,246

 

 

263,246

 

1,203

(f)

264,449

 

Total deposits

 

339,451

 

(5

)

339,446

 

1,203

 

340,649

 

Other borrowings

 

39,433

 

(6

)

39,427

 

344

(g)

39,771

 

Other liabilities

 

2,819

 

(1,710

)

1,109

 

 

1,109

 

Total liabilities

 

381,703

 

(1,721

)

379,982

 

1,547

 

381,529

 

Net assets acquired over liabilities assumed

 

$

1,452

 

$

(21,584

)

$

(20,132

)

$

(32,762

)

$

(52,894

)

Excess of assets acquired over liabilities assumed

 

$

1,452

 

$

(21,584

)

$

(20,132

)

 

 

 

 

Aggregate fair value adjustments

 

 

 

 

 

 

 

$

(32,762

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash received from the FDIC

 

 

 

 

 

 

 

 

 

$

59,360

 

Cash due to FDIC

 

 

 

 

 

 

 

 

 

(938

)

Total

 

 

 

 

 

 

 

 

 

58,422

 

Gain on acquisition (noninterest income)

 

 

 

 

 

 

 

 

 

$

5,528

 

 


Explanation of fair value adjustments

 

Adjustment reflects:

 

(a)—Adjustment reflects marking the available-for-sale portfolio to fair value as of the acquisition date.

(b)—Adjustment reflects the fair value adjustments based on the Company’s evaluation of the acquired loan portfolio.

(c)—Adjustment reflects the recording of the core deposit intangible on the acquired deposit accounts.

(d)—Adjustment reflects the estimated fair value of payments the Company will receive from the FDIC under the loss share agreements.

(e)—Adjustment reflects the fair value adjustments to OREO based on the Company’s evaluation of the acquired OREO portfolio.

(f)—Adjustment arises since the rates on interest-bearing deposits are higher than rates available on similar deposits as of the acquisition date.

(g)—Adjustment reflects the prepayment fee paid when Federal Home Loan Bank (“FHLB”) advances were completely paid off in February 2011.

 

8



Table of Contents

 

Note 4 — Mergers and Acquisitions (continued)

 

Community Bank and Trust Acquisition

 

On January 29, 2010, the Bank entered into a P&A agreement, including loss share arrangements, with the FDIC to purchase certain assets and assume substantially all of the deposits and certain liabilities of CBT, a full service Georgia state-chartered community bank headquartered in Cornelia, Georgia. CBT operated 38 locations, including 36 branches, one loan production office and one trust office in the northeast region of Georgia.

 

Pursuant to the P&A agreement, the Bank received a discount of $158.0 million on the assets acquired and did not pay the FDIC a premium to assume all customer deposits. The loans and foreclosed real estate purchased are covered by a loss share agreement between the FDIC and the Bank. Under this loss share agreement, the FDIC has agreed to cover 80% of loan and foreclosed real estate losses up to $233.0 million and 95% of losses that exceed that amount. Gains and recoveries on covered assets will offset losses, or be paid to the FDIC, at the applicable loss share percentage at the time of recovery. The loss sharing agreement applicable to single family residential mortgage loans provides for FDIC loss sharing and Bank reimbursement to the FDIC for ten years. The loss share agreement applicable to commercial loans provides for FDIC loss sharing for five years and Bank reimbursement to the FDIC for eight years. The loss share agreement applicable to single family loans provides for FDIC loss sharing for ten years and Bank reimbursement to the FDIC for ten years. As of the date of acquisition, we calculated the amount of such reimbursements that we expect to receive from the FDIC using the present value of anticipated cash flows from the covered assets based on the credit adjustments estimated for each pool of loans and the estimated losses on foreclosed assets. In accordance with FASB ASC Topic 805, the FDIC indemnification asset was initially recorded at its fair value, and is measured separately from the loan assets and foreclosed assets because the loss sharing agreements are not contractually embedded in them or transferable with them in the event of disposal. The balance of the FDIC indemnification asset increases and decreases as the expected and actual cash flows from the covered assets fluctuate, as loans are paid off or impaired and as loans and foreclosed assets are sold. There are no contractual interest rates on this contractual receivable from the FDIC; however, a discount was recorded against the initial balance of the FDIC indemnification asset in conjunction with the fair value measurement as this receivable will be collected over the term of the loss sharing agreements. This discount will be accreted to non-interest income over future periods.

 

The Bank did not immediately acquire the real estate, banking facilities, furniture or equipment of CBT as a part of the P&A agreement. However, the Bank had the option to purchase the real estate, furniture and equipment from the FDIC. The term of this option expired on April 29, 2010. On April 28, 2010, the Bank notified the FDIC that it planned to acquire seven bank facilities with an appraised value of approximately $10.9 million. In addition, the Bank notified the FDIC that it plans to purchase approximately $700,000 of furniture or equipment related to 27 locations being retained by the Bank. On October 27, 2010, the Bank settled the purchase of the assets above and settled other items that related to the January 29, 2010 acquisition, with a net payment to the FDIC of $3.9 million. There was no income statement or equity impact of this settlement on the financial statements of the Bank. These 27 banking facilities include both leased and owned locations. In late May and early June of 2010, the Bank closed 10 bank branches, 1 trust office, and converted the operating system of the acquired Georgia franchise.

 

There have been no adjustments or changes to the initial fair values related to the CBT acquisition within the one year time frame from the date of acquisition.  The purchase accounting adjustments and the loss sharing arrangement with the FDIC will significantly impact the effects of the acquired entity on the ongoing operations of the Company. Disclosure of pro forma financial information is also made more difficult by the troubled nature of CBT prior to the date of the combination. The Company has omitted pro forma information related to the CBT acquisition because of the pervasive federal assistance in the transaction.

 

As of December 31, 2010, noninterest income included a pre-tax gain of $98.1 million which resulted from the acquisition of CBT. The amount of the gain was equal to the amount by which the fair value of assets acquired exceeded the fair value of liabilities assumed, and resulted from the discount bid on the assets acquired and the impact of the FDIC loss share agreement, both of which are attributable to the troubled nature of CBT prior to the acquisition. The Company recognized $5.5 million in merger-related expense during the twelve months ended December 31, 2010.

 

9



Table of Contents

 

Note 4 — Mergers and Acquisitions (continued)

 

The following table presents the assets acquired and liabilities assumed as of January 29, 2010, as recorded by CBT on the acquisition date and as adjusted for purchase accounting adjustments.

 

 

 

 

 

Balances

 

Balances

 

 

 

 

 

 

 

As Recorded

 

Kept by

 

Acquired

 

Fair Value

 

As Recorded

 

(Dollars in thousands)

 

by CBT

 

FDIC

 

from FDIC

 

Adjustments

 

by SCBT

 

Assets

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

80,615

 

$

(12

)

$

80,603

 

$

 

$

80,603

 

Investment securities

 

116,270

 

(10,046

)

106,224

 

(613

)(a)

105,611

 

Loans

 

828,223

 

(56,725

)

771,498

 

(312,033

)(b)

459,465

 

Premises and equipment

 

24,063

 

(24,015

)

48

 

 

48

 

Intangible assets

 

 

 

 

8,535

(c)

8,535

 

FDIC receivable for loss sharing agreement

 

 

 

 

276,789

(d)

276,789

 

Other real estate owned and repossessed assets

 

46,271

 

4,852

 

51,123

 

(25,194

)(e)

25,929

 

Other assets

 

26,414

 

(18,541

)

7,873

 

 

7,873

 

Total assets

 

$

1,121,856

 

$

(104,487

)

$

1,017,369

 

$

(52,516

)

$

964,853

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing

 

$

107,617

 

$

(11,602

)

$

96,015

 

$

 

$

96,015

 

Interest-bearing

 

907,288

 

311

 

907,599

 

4,892

(f)

912,491

 

Total deposits

 

1,014,905

 

(11,291

)

1,003,614

 

4,892

 

1,008,506

 

Other borrowings

 

80,250

 

 

80,250

 

2,316

(g)

82,566

 

Other liabilities

 

10,748

 

(3,614

)

7,134

 

194

(h)

7,328

 

Total liabilities

 

1,105,903

 

(14,905

)

1,090,998

 

7,402

 

1,098,400

 

Net assets acquired over liabilities assumed

 

$

15,953

 

$

(89,582

)

$

(73,629

)

$

(59,918

)

$

(133,547

)

Excess of assets acquired over liabilities assumed

 

$

15,953

 

$

(89,582

)

$

(73,629

)

 

 

 

 

Aggregate fair value adjustments

 

 

 

 

 

 

 

$

(59,918

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash received from the FDIC

 

 

 

 

 

 

 

 

 

$

225,695

 

Cash due from FDIC

 

 

 

 

 

 

 

 

 

5,933

 

Total

 

 

 

 

 

 

 

 

 

231,628

 

Gain on acquisition (noninterest income)

 

 

 

 

 

 

 

 

 

$

98,081

 

 


Explanation of fair value adjustments

 

Adjustment reflects:

(a)—Adjustment reflects marking the available-for-sale portfolio to fair value as of the acquisition date.

(b)—Adjustment reflects the fair value adjustments based on the Company’s evaluation of the acquired loan portfolio.

(c)—Adjustment reflects the recording of the core deposit intangible on the acquired deposit accounts.

(d)—Adjustment reflects the estimated fair value of payments the Company will receive from the FDIC under the loss share agreements.

(e)—Adjustment reflects the fair value adjustments to OREO based on the Company’s evaluation of the acquired OREO portfolio.

(f)—Adjustment arises since the rates on interest-bearing deposits are higher than rates available on similar deposits as of the acquisition date.

(g)—Adjustment reflects the prepayment penalty paid when FHLB advances were completely paid off in early February 2010.

(h)—Adjustment reflects the fair value of leases assumed.

 

10



Table of Contents

 

Note 5 — Investment Securities

 

The following is the amortized cost and fair value of investment securities held to maturity:

 

 

 

 

 

Gross

 

Gross

 

 

 

 

 

Amortized

 

Unrealized

 

Unrealized

 

Fair

 

(Dollars in thousands)

 

Cost

 

Gains

 

Losses

 

Value

 

March 31, 2011:

 

 

 

 

 

 

 

 

 

State and municipal obligations

 

$

19,730

 

$

459

 

$

 

$

20,189

 

 

 

 

 

 

 

 

 

 

 

December 31, 2010:

 

 

 

 

 

 

 

 

 

State and municipal obligations

 

$

19,941

 

$

227

 

$

(18

)

$

20,150

 

 

 

 

 

 

 

 

 

 

 

March 31, 2010:

 

 

 

 

 

 

 

 

 

State and municipal obligations

 

$

20,403

 

$

669

 

$

(10

)

$

21,062

 

 

The following is the amortized cost and fair value of investment securities available for sale:

 

 

 

 

 

Gross

 

Gross

 

 

 

 

 

Amortized

 

Unrealized

 

Unrealized

 

Fair

 

(Dollars in thousands)

 

Cost

 

Gains

 

Losses

 

Value

 

March 31, 2011:

 

 

 

 

 

 

 

 

 

Government-sponsored enterprises debt *

 

$

56,987

 

$

646

 

$

(115

)

$

57,518

 

State and municipal obligations

 

38,688

 

1,139

 

(261

)

39,566

 

Mortgage-backed securities **

 

90,186

 

2,038

 

(235

)

91,989

 

Equity securities

 

443

 

138

 

 

581

 

 

 

$

186,304

 

$

3,961

 

$

(611

)

$

189,654

 

December 31, 2010:

 

 

 

 

 

 

 

 

 

Government-sponsored enterprises debt *

 

$

69,854

 

$

844

 

$

(164

)

$

70,534

 

State and municipal obligations

 

39,749

 

680

 

(425

)

40,004

 

Mortgage-backed securities **

 

83,045

 

1,752

 

(357

)

84,440

 

Trust preferred (collateralized debt obligations)

 

2,324

 

 

(290

)

2,034

 

Equity securities

 

256

 

106

 

 

362

 

 

 

$

195,228

 

$

3,382

 

$

(1,236

)

$

197,374

 

March 31, 2010:

 

 

 

 

 

 

 

 

 

Government-sponsored enterprises debt *

 

$

119,575

 

$

626

 

$

(182

)

$

120,019

 

State and municipal obligations

 

40,505

 

1,414

 

(363

)

41,556

 

Mortgage-backed securities **

 

95,575

 

4,538

 

(8

)

100,105

 

Trust preferred (collateralized debt obligations)

 

6,576

 

 

(280

)

6,296

 

Equity securities

 

285

 

114

 

(3

)

396

 

 

 

$

262,516

 

$

6,692

 

$

(836

)

$

268,372

 

 


* - Government-sponsored enterprises holdings are comprised of debt securities offered by Federal Home Loan Mortgage Corporation (“FHLMC”) or Freddie Mac, Federal National Mortgage Association (“FNMA”) or Fannie Mae, FHLB, and Federal Farm Credit Banks (“FFCB”).

** - All of the mortgage-backed securities are issued by government-sponsored enterprises; there are no private-label holdings.

 

11



Table of Contents

 

Note 5 — Investment Securities (continued)

 

The following is the amortized cost and fair value of other investment securities:

 

 

 

 

 

Gross

 

Gross

 

 

 

 

 

Amortized

 

Unrealized

 

Unrealized

 

Fair

 

(Dollars in thousands)

 

Cost

 

Gains

 

Losses

 

Value

 

March 31, 2011:

 

 

 

 

 

 

 

 

 

Federal Reserve Bank stock

 

$

6,617

 

$

 

$

 

$

6,617

 

Federal Home Loan Bank stock

 

15,874

 

 

 

15,874

 

Investment in unconsolidated subsidiaries

 

1,332

 

 

 

1,332

 

 

 

$

23,823

 

$

 

$

 

$

23,823

 

December 31, 2010:

 

 

 

 

 

 

 

 

 

Federal Reserve Bank stock

 

$

5,987

 

$

 

$

 

$

5,987

 

Federal Home Loan Bank stock

 

13,278

 

 

 

13,278

 

Investment in unconsolidated subsidiaries

 

1,332

 

 

 

1,332

 

 

 

$

20,597

 

$

 

$

 

$

20,597

 

 

 

 

 

 

 

 

 

 

 

March 31, 2010:

 

 

 

 

 

 

 

 

 

Federal Reserve Bank stock

 

$

5,987

 

$

 

$

 

$

5,987

 

Federal Home Loan Bank stock

 

14,862

 

 

 

14,862

 

Investment in unconsolidated subsidiaries

 

1,332

 

 

 

1,332

 

 

 

$

22,181

 

$

 

$

 

$

22,181

 

 

The Company has determined that the investment in Federal Reserve Bank stock and FHLB stock is not other than temporarily impaired as of March 31, 2011 and ultimate recoverability of the par value of these investments is probable.  See “Other Investments” under Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

 

The amortized cost and fair value of debt securities at March 31, 2011 by contractual maturity are detailed below.  Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without prepayment penalties.

 

 

 

Securities

 

Securities

 

 

 

Held to Maturity

 

Available for Sale

 

 

 

Amortized

 

Fair

 

Amortized

 

Fair

 

(Dollars in thousands)

 

Cost

 

Value

 

Cost

 

Value

 

 

 

 

 

 

 

 

 

 

 

Due in one year or less

 

$

130

 

$

131

 

$

 

$

 

Due after one year through five years

 

260

 

262

 

6,389

 

6,475

 

Due after five years through ten years

 

6,680

 

6,849

 

43,174

 

43,535

 

Due after ten years

 

12,660

 

12,947

 

136,741

 

139,644

 

 

 

$

19,730

 

$

20,189

 

$

186,304

 

$

189,654

 

 

12



Table of Contents

 

Note 5 — Investment Securities (continued)

 

Information pertaining to the Company’s securities available for sale with gross unrealized losses at March 31, 2011, December 31, 2010 and March 31, 2010, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position is as follows:

 

 

 

Less Than Twelve Months

 

Twelve Months or More

 

 

 

Gross

 

 

 

Gross

 

 

 

 

 

Unrealized

 

Fair

 

Unrealized

 

Fair

 

(Dollars in thousands)

 

Losses

 

Value

 

Losses

 

Value

 

March 31, 2011:

 

 

 

 

 

 

 

 

 

Securities Held to Maturity

 

 

 

 

 

 

 

 

 

State and municipal obligations

 

$

 

$

 

$

 

$

 

 

 

 

 

 

 

 

 

 

 

Securities Available for Sale

 

 

 

 

 

 

 

 

 

Government-sponsored enterprises debt

 

$

115

 

$

16,750

 

$

 

$

 

State and municipal obligations

 

113

 

4,535

 

148

 

1,398

 

Mortgage-backed securities

 

235

 

23,333

 

 

 

Equity securities

 

 

 

 

 

 

 

$

463

 

$

44,618

 

$

148

 

$

1,398

 

 

 

 

 

 

 

 

 

 

 

December 31, 2010:

 

 

 

 

 

 

 

 

 

Securities Held to Maturity

 

 

 

 

 

 

 

 

 

State and municipal obligations

 

$

18

 

$

3,050

 

$

 

$

 

 

 

 

 

 

 

 

 

 

 

Securities Available for Sale

 

 

 

 

 

 

 

 

 

Government-sponsored enterprises debt

 

$

164

 

$

26,138

 

$

 

$

 

State and municipal obligations

 

229

 

12,402

 

196

 

1,350

 

Mortgage-backed securities

 

357

 

31,547

 

 

 

Trust preferred (collateralized debt obligations)

 

 

 

290

 

2,034

 

 

 

$

750

 

$

70,087

 

$

486

 

$

3,384

 

 

 

 

 

 

 

 

 

 

 

March 31, 2010:

 

 

 

 

 

 

 

 

 

Securities Held to Maturity

 

 

 

 

 

 

 

 

 

State and municipal obligations

 

$

 

$

 

$

10

 

$

812

 

 

 

 

 

 

 

 

 

 

 

Securities Available for Sale

 

 

 

 

 

 

 

 

 

Government-sponsored enterprises debt

 

$

182

 

$

12,272

 

$

 

$

 

State and municipal obligations

 

84

 

2,534

 

279

 

4,363

 

Mortgage-backed securities

 

8

 

3,162

 

 

 

Trust preferred (collateralized debt obligations)

 

 

 

280

 

2,361

 

Equity securities

 

3

 

166

 

 

 

 

 

$

277

 

$

18,134

 

$

559

 

$

6,724

 

 

13



Table of Contents

 

Note 6 — Loans and Allowance for Loan Losses

 

The following is a summary of non-acquired loans:

 

 

 

March 31,

 

December 31,

 

March 31,

 

(Dollars in thousands)

 

2011

 

2010

 

2010

 

 

 

 

 

 

 

 

 

Non-acquired loans:

 

 

 

 

 

 

 

Commercial non-owner occupied real estate:

 

 

 

 

 

 

 

Construction and land development

 

$

403,149

 

422,041

 

$

442,566

 

Commercial non-owner occupied

 

318,597

 

306,381

 

294,147

 

Total commercial non-owner occupied real estate

 

721,746

 

728,422

 

736,713

 

Consumer real estate:

 

 

 

 

 

 

 

Consumer owner occupied

 

334,849

 

322,637