Attached files
file | filename |
---|---|
EXCEL - IDEA: XBRL DOCUMENT - Oneida Financial Corp. | Financial_Report.xls |
EX-32.1 - EXHIBIT 32.1 - Oneida Financial Corp. | exhibit3219-30x2014.htm |
EX-31.1 - EXHIBIT 31.1 - Oneida Financial Corp. | exhibit3119-30x2014.htm |
EX-31.2 - EXHIBIT 31.2 - Oneida Financial Corp. | exhibit3129-30x2014.htm |
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
____________________________________________
FORM 10-Q
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2014
OR
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Securities Exchange Act Number 001-34813
ONEIDA FINANCIAL CORP.
(Exact name of registrant as specified in its charter)
Maryland | 80-0632920 |
(State or other jurisdiction of | (IRS Employer) |
incorporation or organization) | Identification Number) |
182 Main Street, Oneida, New York 13421
(Address of Principal Executive Offices)
(315) 363-2000
Registrant’s telephone number, including area code
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o
Indicate by check mark whether the Registrant is a large accelerated file, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check One):
Large accelerated filer o | Accelerated filer o |
Non-accelerated filer o | Smaller reporting company x |
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.). Yes o No x
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: There were 7,022,444 shares of the Registrant’s common stock outstanding as of November 1, 2014.
ONEIDA FINANCIAL CORP.
INDEX
Page | ||
PART I. FINANCIAL INFORMATION
Item I. Financial Statements
ONEIDA FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CONDITION
At September 30, 2014 (unaudited) and December 31, 2013
September 30, 2014 | December 31, 2013 | ||||||
(In thousands, except share data) | |||||||
ASSETS | |||||||
Cash and due from banks | $ | 27,014 | $ | 27,940 | |||
Federal funds sold | 17,327 | 14,243 | |||||
TOTAL CASH AND CASH EQUIVALENTS | 44,341 | 42,183 | |||||
Trading securities | 4,379 | 5,063 | |||||
Securities, available-for-sale | 163,583 | 131,069 | |||||
Securities, held-to-maturity (fair value $133,870 and $135,468 respectively) | 131,001 | 136,937 | |||||
Mortgage loans held for sale | 347 | 61 | |||||
Loans receivable | 357,555 | 337,785 | |||||
Deferred fees | 1,274 | 965 | |||||
Allowance for loan losses | (3,491 | ) | (3,110 | ) | |||
LOANS RECEIVABLE, NET | 355,338 | 335,640 | |||||
Federal Home Loan Bank stock | 1,419 | 1,588 | |||||
Bank premises and equipment, net | 19,954 | 19,780 | |||||
Assets held for sale | 63 | — | |||||
Accrued interest receivable | 2,491 | 2,222 | |||||
Bank owned life insurance | 17,654 | 18,160 | |||||
Other assets | 19,838 | 23,199 | |||||
Goodwill | 25,480 | 25,480 | |||||
Other intangible assets | 880 | 1,102 | |||||
TOTAL ASSETS | $ | 786,768 | $ | 742,484 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Liabilities: | |||||||
Interest bearing deposits | $ | 586,191 | $ | 551,603 | |||
Non-interest bearing deposits | 93,077 | 85,647 | |||||
Borrowings | — | 1,000 | |||||
Other liabilities | 12,643 | 13,590 | |||||
TOTAL LIABILITIES | 691,911 | 651,840 | |||||
Oneida Financial Corp. Stockholders’ equity: | |||||||
Preferred stock, 10,000,000 shares authorized; 0 issued and outstanding | — | — | |||||
Common stock ($.01 par value; 30,000,000 shares authorized; 7,022,444 issued at September 30, 2014; 7,027,230 issued at December 31, 2013) | 70 | 70 | |||||
Additional paid-in capital | 44,024 | 43,449 | |||||
Retained earnings | 54,725 | 52,411 | |||||
Accumulated other comprehensive loss | (3,930 | ) | (5,142 | ) | |||
Unallocated ESOP (18,023 and 18,023 shares) | (32 | ) | (144 | ) | |||
TOTAL STOCKHOLDERS’ EQUITY | 94,857 | 90,644 | |||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 786,768 | $ | 742,484 |
The accompanying notes are an integral part of the consolidated financial statements
1
ONEIDA FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three and Nine Months Ended September 30, 2014 (unaudited) and 2013 (unaudited)
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, 2014 | September 30, 2013 | September 30, 2014 | September 30, 2013 | ||||||||||||
(In thousands, except per share data) | |||||||||||||||
INTEREST AND DIVIDEND INCOME: | |||||||||||||||
Interest and fees on loans | $ | 3,767 | $ | 3,793 | $ | 11,117 | $ | 11,275 | |||||||
Interest on investment securities | 1,886 | 1,781 | 5,624 | 5,276 | |||||||||||
Dividends on equity securities | 23 | 23 | 71 | 69 | |||||||||||
Interest on federal funds sold and interest-earning deposits | 4 | 1 | 16 | 11 | |||||||||||
Total interest and dividend income | 5,680 | 5,598 | 16,828 | 16,631 | |||||||||||
INTEREST EXPENSE: | |||||||||||||||
Core deposits | 300 | 235 | 907 | 723 | |||||||||||
Time deposits | 345 | 374 | 1,045 | 1,128 | |||||||||||
Borrowings | 9 | 22 | 35 | 64 | |||||||||||
Note payable | 1 | 5 | 8 | 19 | |||||||||||
Total interest expense | 655 | 636 | 1,995 | 1,934 | |||||||||||
NET INTEREST INCOME | 5,025 | 4,962 | 14,833 | 14,697 | |||||||||||
Less: Provision for loan losses | 270 | 180 | 470 | 380 | |||||||||||
Net interest income after provision for loan losses | 4,755 | 4,782 | 14,363 | 14,317 | |||||||||||
INVESTMENT GAINS: | |||||||||||||||
Net gains on sales of securities | 2,044 | 275 | 2,116 | 542 | |||||||||||
Changes in fair value of trading securities | (1,507 | ) | 127 | (684 | ) | 1,251 | |||||||||
Total investment gains | 537 | 402 | 1,432 | 1,793 | |||||||||||
NON-INTEREST INCOME: | |||||||||||||||
Commissions and fees on sales of non-banking products | 6,375 | 5,866 | 19,766 | 17,834 | |||||||||||
Other operating income | 1,183 | 1,249 | 4,126 | 3,747 | |||||||||||
Total non-interest income | 7,558 | 7,115 | 23,892 | 21,581 | |||||||||||
NON-INTEREST EXPENSES: | |||||||||||||||
Compensation and employee benefits | 7,364 | 7,075 | 21,864 | 20,488 | |||||||||||
Occupancy expenses, net | 1,364 | 1,296 | 4,094 | 3,918 | |||||||||||
Other operating expense | 2,297 | 2,537 | 7,303 | 7,259 | |||||||||||
Total non-interest expenses | 11,025 | 10,908 | 33,261 | 31,665 | |||||||||||
INCOME BEFORE INCOME TAXES | 1,825 | 1,391 | 6,426 | 6,026 | |||||||||||
Provision for income taxes | 365 | 370 | 1,593 | 1,562 | |||||||||||
NET INCOME | $ | 1,460 | $ | 1,021 | $ | 4,833 | $ | 4,464 | |||||||
EARNINGS PER SHARE — BASIC | $ | 0.21 | $ | 0.15 | $ | 0.69 | $ | 0.64 | |||||||
EARNINGS PER SHARE — DILUTED | $ | 0.21 | $ | 0.15 | $ | 0.69 | $ | 0.64 |
The accompanying notes are an integral part of the consolidated financial statements
2
ONEIDA FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
For the Three and Nine Months Ended September 30, 2014 (unaudited) and 2013 (unaudited)
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, 2014 | September 30, 2013 | September 30, 2014 | September 30, 2013 | |||||||||||||
(In thousands) | ||||||||||||||||
Net income | $ | 1,460 | $ | 1,021 | $ | 4,833 | $ | 4,464 | ||||||||
Other comprehensive income (loss), net of tax: | ||||||||||||||||
Net change in unrealized gains (losses): | ||||||||||||||||
Securities transferred from available-for-sale to held-to-maturity: | ||||||||||||||||
Amortization of unrealized gains on securities arising during period | 142 | — | 417 | — | ||||||||||||
Reclassification adjustment for gains realized included in income | — | — | — | — | ||||||||||||
Net unrealized gains | 142 | — | 417 | — | ||||||||||||
Income tax effect | (57 | ) | — | (167 | ) | — | ||||||||||
Net change in securities transferred to held-to-maturity | 85 | — | 250 | — | ||||||||||||
Securities available-for-sale: | ||||||||||||||||
Unrealized holding gains (losses) on securities arising during period | 698 | (3,108 | ) | 3,697 | (9,635 | ) | ||||||||||
Reclassification adjustment for gains realized in income | (2,044 | ) | (275 | ) | (2,116 | ) | (542 | ) | ||||||||
Net unrealized (losses) gains | (1,346 | ) | (3,383 | ) | 1,581 | (10,177 | ) | |||||||||
Income tax effect | 538 | 1,353 | (633 | ) | 4,071 | |||||||||||
Net change in securities available-for-sale | (808 | ) | (2,030 | ) | 948 | (6,106 | ) | |||||||||
Unrealized holding (losses) gains on securities, net of tax | (723 | ) | (2,030 | ) | 1,198 | (6,106 | ) | |||||||||
Defined benefit pension plans: | ||||||||||||||||
Change in unrealized loss on pension benefits | — | 30 | 24 | 91 | ||||||||||||
Income tax effect | — | (12 | ) | (10 | ) | (36 | ) | |||||||||
Net change in pension benefits | — | 18 | 14 | 55 | ||||||||||||
Other comprehensive (loss) income, net of tax | (723 | ) | (2,012 | ) | 1,212 | (6,051 | ) | |||||||||
Comprehensive income (loss) | $ | 737 | $ | (991 | ) | $ | 6,045 | $ | (1,587 | ) |
The accompanying notes are an integral part of the consolidated financial statements
3
ONEIDA FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
For the Nine Months Ended September 30, 2014 (unaudited)
Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Unallocated Employee Stock Ownership Plans | Total | |||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||
(In thousands, except number of shares) | ||||||||||||||||||||||||||
Balance as of January 1, 2014 | 7,027,230 | $ | 70 | $ | 43,449 | $ | 52,411 | $ | (5,142 | ) | $ | (144 | ) | $ | 90,644 | |||||||||||
Net income | — | — | — | 4,833 | — | — | 4,833 | |||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | 1,212 | — | 1,212 | |||||||||||||||||||
Common stock dividends: $0.36 per share | — | — | — | (2,519 | ) | — | — | (2,519 | ) | |||||||||||||||||
Tax benefit from stock plan | — | — | 34 | — | — | — | 34 | |||||||||||||||||||
Shares repurchased and retired | (5,153 | ) | — | (70 | ) | — | — | — | (70 | ) | ||||||||||||||||
Shares issued under stock plan | 18,367 | — | 103 | — | — | — | 103 | |||||||||||||||||||
Shares earned under stock plan | — | — | 444 | — | — | — | 444 | |||||||||||||||||||
Shares canceled under stock plan | (18,000 | ) | — | — | — | — | — | — | ||||||||||||||||||
Shares committed to be released under ESOP plan | — | — | 64 | — | — | 112 | 176 | |||||||||||||||||||
Balance as of September 30, 2014 | 7,022,444 | $ | 70 | $ | 44,024 | $ | 54,725 | $ | (3,930 | ) | $ | (32 | ) | $ | 94,857 |
The accompanying notes are an integral part of the consolidated financial statements
4
ONEIDA FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Nine Months Ended September 30, 2014 (unaudited) and 2013 (unaudited)
Nine Months Ended September 30, | |||||||
2014 | 2013 | ||||||
(In thousands) | |||||||
Operating Activities: | |||||||
Net income | $ | 4,833 | $ | 4,464 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 1,265 | 1,461 | |||||
Amortization of premiums/discounts on securities, net | 300 | 288 | |||||
Net change in fair value of trading securities | 684 | (1,251 | ) | ||||
Provision for loan losses | 470 | 380 | |||||
ESOP shares earned | 176 | 184 | |||||
Stock compensation earned | 444 | 449 | |||||
Loss on write down or sale of foreclosed assets | 17 | 46 | |||||
Gain on securities, net | (2,116 | ) | (542 | ) | |||
Gain on sale of loans, net | (137 | ) | (247 | ) | |||
Income tax payable | 1,590 | (145 | ) | ||||
Accrued interest receivable | (269 | ) | (366 | ) | |||
Other assets | 1,790 | 998 | |||||
Other liabilities | (1,529 | ) | 381 | ||||
Earnings on bank owned life insurance | (917 | ) | (421 | ) | |||
Origination of loans held for sale | (5,522 | ) | (8,430 | ) | |||
Proceeds from sales of loans | 5,373 | 9,706 | |||||
Proceeds on the sale of trading securities | — | 2,502 | |||||
Net cash provided by operating activities | 6,452 | 9,457 | |||||
Investing Activities: | |||||||
Purchase of securities available-for-sale | (49,470 | ) | (68,301 | ) | |||
Proceeds from sale of securities available-for-sale | 5,600 | 47,854 | |||||
Maturities and calls of securities available-for-sale | 6,910 | 15,070 | |||||
Principal collected on securities available-for-sale | 7,992 | 16,113 | |||||
Purchase of securities held-to-maturity | (2,357 | ) | (20,786 | ) | |||
Maturities and call of securities held-to-maturity | 1,379 | 292 | |||||
Principal collected on securities held-to-maturity | 7,182 | 5,951 | |||||
Purchase of FHLB stock | (786 | ) | (4,039 | ) | |||
Redemption of FHLB stock | 955 | 4,359 | |||||
Net increase in loans | (20,462 | ) | (23,997 | ) | |||
Purchase of bank premises and equipment | (1,280 | ) | (415 | ) | |||
Proceeds from the sale of foreclosed property | 87 | 97 | |||||
Settlement of bank owned life insurance | 1,423 | — | |||||
Purchase of insurance agency | — | (17 | ) | ||||
Net cash used in investing activities | (42,827 | ) | (27,819 | ) | |||
Financing Activities: | |||||||
Net increase in demand deposit, savings, money market, super now and escrow | 41,792 | 37,066 | |||||
Net increase in time deposits | 226 | 3,273 |
5
Repayment of borrowings | (1,000 | ) | (5,000 | ) | |||
Shares issued under stock plan | 103 | 36 | |||||
Repurchase and retirement of common shares | (70 | ) | (40 | ) | |||
Cash dividends | (2,518 | ) | (2,529 | ) | |||
Net cash provided by financing activities | 38,533 | 32,806 | |||||
Increase in cash and cash equivalents | 2,158 | 14,444 | |||||
Cash and cash equivalents at beginning of period | 42,183 | 19,803 | |||||
Cash and cash equivalents at end of period | $ | 44,341 | $ | 34,247 | |||
Supplemental disclosures of cash flow information: | |||||||
Cash paid for interest | $ | 1,998 | $ | 1,975 | |||
Cash paid for income taxes | 3 | 1,706 | |||||
Supplemental noncash disclosures: | |||||||
Transfer of loans to other real estate | 294 | 229 | |||||
Dividends declared and unpaid at period end | 844 | 843 |
The accompanying notes are an integral part of the consolidated financial statements
6
ONEIDA FINANCIAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
September 30, 2014
Note A — Basis of Presentation
The accompanying unaudited consolidated financial statements include Oneida Financial Corp. (the “Company”), a Maryland corporation, and its wholly owned subsidiary, Oneida Savings Bank (the “Bank”), as of September 30, 2014 and December 31, 2013 and for the three month and nine month periods ended September 30, 2014 and 2013. All inter-company accounts and transactions have been eliminated in consolidation. The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates, assumptions, and judgments that affect the amounts reported in the financial statements and accompanying notes. These estimates, assumptions, and judgments are based on information available through the date of the filing of the financial statements; accordingly, as this information changes, the financial statements could reflect different estimates, assumptions, and judgments. Certain policies inherently have a greater reliance on the use of estimates, assumptions, and judgments and as such have a greater possibility of producing results that could be materially different than originally reported. Based on the valuation techniques used and the sensitivity of financial statement amounts to the methods, assumptions, and estimates underlying those amounts, management has identified the determination of the allowance for loan losses, the fair value of trading securities and investment securities and the evaluation of other-than-temporary impairment on securities whose fair value is less than amortized cost to be the accounting areas that require the most subjective or complex judgments, and as such could be most subject to revision as new information becomes available. Actual results could differ from those estimates. In the opinion of management, the unaudited consolidated financial statements include all necessary adjustments, consisting of normal recurring accruals, necessary for a fair presentation for the periods presented. The results of operations for the three and nine months ended September 30, 2014 are not necessarily indicative of the results to be achieved for the remainder of 2014.
The data in the consolidated statements of condition for December 31, 2013 was derived from the audited financial statements included in the Company’s 2013 Annual Report on Form 10-K. That data, along with the interim financial information presented in the consolidated statement of condition, statements of operations, comprehensive income, changes in stockholders’ equity and cash flows should be read in conjunction with the 2013 consolidated financial statements, including the notes thereto included in the Company’s Annual Report on Form 10-K.
Amounts in the prior period’s consolidated financial statements are reclassified when necessary to conform with the current period’s presentation. Reclassifications did not impact prior period’s net income or stockholders’ equity.
Note B — Earnings per Share
Basic earnings per share is net income available to common shareholders divided by the weighted average number of common shares outstanding during the period excluding participating securities. ESOP shares are considered outstanding for the calculation unless unearned. Diluted earnings per common share includes the dilutive effect of additional potential common shares issuable under stock plans. All outstanding unvested share-based payment awards that contain rights to nonforfeitable dividends are considered participating securities and are included in the computation of earnings per share pursuant to the two-class method. The Company has determined that 78,000 of its 153,000 outstanding non-vested stock awards are participating securities. Earnings and dividends per share are restated for all stock splits and stock dividends through the date of issuance of the financial statements.
Earnings per common share have been computed based on the following for the three months and nine months ended September 30, 2014 and 2013:
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, 2014 | September 30, 2013 | September 30, 2014 | September 30, 2013 | ||||||||||||
(In thousands, except share and per share data) | |||||||||||||||
Net income | $ | 1,460 | $ | 1,021 | $ | 4,833 | $ | 4,464 | |||||||
Net earnings allocated to participating securities | (16 | ) | (15 | ) | (60 | ) | (75 | ) | |||||||
Net earnings allocated to common stock | $ | 1,444 | $ | 1,006 | $ | 4,773 | $ | 4,389 |
7
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, 2014 | September 30, 2013 | September 30, 2014 | September 30, 2013 | ||||||||||||
Basic | (In thousands, except share and per share data) | ||||||||||||||
Distributed earnings allocated to common stock | $ | 833 | $ | 831 | $ | 2,487 | $ | 2,485 | |||||||
Undistributed earnings allocated to common stock | 611 | 175 | 2,286 | 1,904 | |||||||||||
Net earnings allocated to common stock | $ | 1,444 | $ | 1,006 | $ | 4,773 | $ | 4,389 | |||||||
Weighted average common shares outstanding including shares considered participating securities | 6,997 | 6,969 | 6,987 | 6,962 | |||||||||||
Less: Average unallocated ESOP shares | (9 | ) | (35 | ) | (13 | ) | (40 | ) | |||||||
Less: Average participating securities | (77 | ) | (103 | ) | (80 | ) | (110 | ) | |||||||
Weighted average shares | 6,911 | 6,831 | 6,894 | 6,812 | |||||||||||
Basic earnings per share | $ | 0.21 | $ | 0.15 | $ | 0.69 | $ | 0.64 | |||||||
Diluted | |||||||||||||||
Net earnings allocated to common stock | $ | 1,444 | $ | 1,006 | $ | 4,773 | $ | 4,389 | |||||||
Weighted average common shares outstanding for basic earnings per common share | 6,911 | 6,831 | 6,894 | 6,812 | |||||||||||
Add: Dilutive effects of assumed exercise of stock options and nonparticipating shares | 76 | 68 | 67 | 53 | |||||||||||
Weighted average shares and dilutive potential common shares | 6,987 | 6,899 | 6,961 | 6,865 | |||||||||||
Diluted earnings per common share | $ | 0.21 | $ | 0.15 | $ | 0.69 | $ | 0.64 |
Stock options for 8,160 and 9,348 shares of common stock were not considered in computing diluted earnings per share for the three months and nine months ended September 30, 2014, respectively, because they were anti-dilutive. Stock options for 1,027 shares of common stock were not considered in computing diluted earnings per share for the three months and nine months ended September 30, 2013 because they were anti-dilutive.
8
Note C — Investment Securities and Mortgage-Backed Securities
Investment securities and mortgage-backed securities classified as available-for-sale and held-to-maturity consist of the following at September 30, 2014 and December 31, 2013:
Available-for-sale portfolio: | September 30, 2014 | |||||||||||||||
Amortized Cost | Unrealized | Fair Value | ||||||||||||||
Gains | Losses | |||||||||||||||
(In thousands) | ||||||||||||||||
Investment Securities | ||||||||||||||||
Debt securities: | ||||||||||||||||
U.S. Agencies | $ | 25,238 | $ | 64 | $ | (534 | ) | $ | 24,768 | |||||||
Corporate | 33,158 | 283 | (1,654 | ) | 31,787 | |||||||||||
Agency asset backed securities | 8,876 | 145 | (3 | ) | 9,018 | |||||||||||
State and municipal | 32,219 | 1,240 | (7 | ) | 33,452 | |||||||||||
Small Business Administration | 7,007 | 101 | — | 7,108 | ||||||||||||
$ | 106,498 | $ | 1,833 | $ | (2,198 | ) | $ | 106,133 | ||||||||
Mortgage-Backed Securities | ||||||||||||||||
Fannie Mae | $ | 22,700 | $ | 197 | $ | (61 | ) | $ | 22,836 | |||||||
Freddie Mac | 21,600 | 94 | (139 | ) | 21,555 | |||||||||||
Government National Mortgage Assoc. | 11,460 | 210 | (64 | ) | 11,606 | |||||||||||
Private placement mortgage obligation | 1,424 | 29 | — | 1,453 | ||||||||||||
$ | 57,184 | $ | 530 | $ | (264 | ) | $ | 57,450 | ||||||||
Total available-for-sale | $ | 163,682 | $ | 2,363 | $ | (2,462 | ) | $ | 163,583 |
Held-to-maturity portfolio: | September 30, 2014 | |||||||||||||||
Amortized Cost | Unrecognized | Fair Value | ||||||||||||||
Gains | Losses | |||||||||||||||
(In thousands) | ||||||||||||||||
Investment Securities | ||||||||||||||||
Debt securities: | ||||||||||||||||
U.S. Agencies | $ | 41,573 | $ | 1,451 | $ | — | $ | 43,024 | ||||||||
State and municipal | 26,929 | 1,271 | (16 | ) | 28,184 | |||||||||||
Small Business Administration | 9,487 | 130 | (3 | ) | 9,614 | |||||||||||
$ | 77,989 | $ | 2,852 | $ | (19 | ) | $ | 80,822 | ||||||||
Mortgage-Backed Securities | ||||||||||||||||
Fannie Mae | $ | 27,500 | $ | 418 | $ | (452 | ) | $ | 27,466 | |||||||
Freddie Mac | 15,890 | 188 | (73 | ) | 16,005 | |||||||||||
Government National Mortgage Assoc. | 9,622 | 72 | (117 | ) | 9,577 | |||||||||||
$ | 53,012 | $ | 678 | $ | (642 | ) | $ | 53,048 | ||||||||
Total held-to-maturity | $ | 131,001 | $ | 3,530 | $ | (661 | ) | $ | 133,870 |
9
Available-for-sale portfolio: | December 31, 2013 | |||||||||||||||
Amortized Cost | Unrealized | Fair Value | ||||||||||||||
Gains | Losses | |||||||||||||||
(In thousands) | ||||||||||||||||
Investment Securities | ||||||||||||||||
Debt securities: | ||||||||||||||||
U.S. Agencies | $ | 19,284 | $ | 21 | $ | (1,570 | ) | $ | 17,735 | |||||||
Corporate | 31,136 | 99 | (2,445 | ) | 28,790 | |||||||||||
Agency asset backed securities | 5,501 | 13 | (112 | ) | 5,402 | |||||||||||
Trust preferred securities | 1,000 | 1,518 | — | 2,518 | ||||||||||||
State and municipal | 32,608 | 760 | (60 | ) | 33,308 | |||||||||||
Small Business Administration | 3,349 | 10 | — | 3,359 | ||||||||||||
$ | 92,878 | $ | 2,421 | $ | (4,187 | ) | $ | 91,112 | ||||||||
Mortgage-Backed Securities | ||||||||||||||||
Fannie Mae | $ | 19,795 | $ | 113 | $ | (222 | ) | $ | 19,686 | |||||||
Freddie Mac | 6,790 | 64 | (13 | ) | 6,841 | |||||||||||
Government National Mortgage Assoc. | 10,749 | 217 | (89 | ) | 10,877 | |||||||||||
Collateralized mortgage obligations | 1,120 | 62 | (3 | ) | 1,179 | |||||||||||
Private placement mortgage obligation | 1,416 | — | (42 | ) | 1,374 | |||||||||||
$ | 39,870 | $ | 456 | $ | (369 | ) | $ | 39,957 | ||||||||
Total available-for-sale | $ | 132,748 | $ | 2,877 | $ | (4,556 | ) | $ | 131,069 |
Held-to-maturity portfolio: | December 31, 2013 | |||||||||||||||
Amortized Cost | Unrecognized | Fair Value | ||||||||||||||
Gains | Losses | |||||||||||||||
(In thousands) | ||||||||||||||||
Investment Securities | ||||||||||||||||
Debt securities: | ||||||||||||||||
U.S. Agencies | $ | 42,185 | $ | 12 | $ | (761 | ) | $ | 41,436 | |||||||
State and municipal | 25,584 | 549 | (259 | ) | 25,874 | |||||||||||
Small Business Administration | 10,131 | 1 | (100 | ) | 10,032 | |||||||||||
$ | 77,900 | $ | 562 | $ | (1,120 | ) | $ | 77,342 | ||||||||
Mortgage-Backed Securities | ||||||||||||||||
Fannie Mae | $ | 30,130 | $ | 205 | $ | (828 | ) | $ | 29,507 | |||||||
Freddie Mac | 17,729 | 60 | (187 | ) | 17,602 | |||||||||||
Government National Mortgage Assoc. | 11,178 | 62 | (223 | ) | 11,017 | |||||||||||
$ | 59,037 | $ | 327 | $ | (1,238 | ) | $ | 58,126 | ||||||||
Total held-to-maturity | $ | 136,937 | $ | 889 | $ | (2,358 | ) | $ | 135,468 |
As of November 30, 2013, the Company transferred securities totaling $98.9 million with unrealized losses of $4.3 million from available-for-sale to the held-to-maturity portfolio. These securities were transferred to help mitigate interest rate risk on the most price sensitive securities. As a result, the securities are carried at fair value at the time of transfer, which established a new amortized cost basis for book, and the difference between par value of the securities and fair value at the date of transfer will be accreted as an adjustment of yield.
The amortized cost and fair value of the investment securities portfolio at September 30, 2014 are shown by contractual maturities. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately.
10
Available-for-sale | Held-to-maturity | |||||||||||||||
Amortized Cost | Fair Value | Amortized Cost | Fair Value | |||||||||||||
(In thousands) | ||||||||||||||||
Within one year | $ | 2,218 | $ | 2,240 | $ | 1,607 | $ | 1,610 | ||||||||
After one year through five years | 9,992 | 10,359 | 6,884 | 7,207 | ||||||||||||
After five years through ten years | 63,256 | 64,002 | 39,225 | 40,458 | ||||||||||||
After ten years | 31,032 | 29,532 | 30,273 | 31,547 | ||||||||||||
Mortgage-backed securities | 57,184 | 57,450 | 53,012 | 53,048 | ||||||||||||
Total | $ | 163,682 | $ | 163,583 | $ | 131,001 | $ | 133,870 |
Sales of available-for-sale securities were as follows:
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
(In thousands) | |||||||||||||||
Proceeds | $ | 2,951 | $ | 28,855 | $ | 5,600 | $ | 47,854 | |||||||
Gross gains | $ | 2,044 | $ | 578 | $ | 2,169 | $ | 942 | |||||||
Gross losses | $ | — | $ | (303 | ) | $ | (53 | ) | $ | (400 | ) |
Securities with unrealized losses at September 30, 2014 and December 31, 2013, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, are as follows:
Less than 12 Months | More than 12 Months | Total | ||||||||||||||||||||||
September 30, 2014 | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | ||||||||||||||||||
Description of Securities | ||||||||||||||||||||||||
Available-for-sale | (In thousands) | |||||||||||||||||||||||
U.S. Agencies | $ | 4,983 | $ | (22 | ) | $ | 13,487 | $ | (512 | ) | $ | 18,470 | $ | (534 | ) | |||||||||
Corporate | 9,046 | (61 | ) | 11,431 | (1,593 | ) | 20,477 | (1,654 | ) | |||||||||||||||
Agency asset backed securities | 953 | (3 | ) | — | — | 953 | (3 | ) | ||||||||||||||||
State and municipal | 560 | (7 | ) | — | — | 560 | (7 | ) | ||||||||||||||||
Small Business Administration | — | — | 4 | — | 4 | — | ||||||||||||||||||
Fannie Mae | 7,250 | (33 | ) | 2,000 | (28 | ) | 9,250 | (61 | ) | |||||||||||||||
Freddie Mac | 15,310 | (139 | ) | — | — | 15,310 | (139 | ) | ||||||||||||||||
Government National Mortgage Assoc. | 2,194 | (10 | ) | 3,471 | (54 | ) | 5,665 | (64 | ) | |||||||||||||||
Total securities available-for-sale in an unrealized loss position | $ | 40,296 | $ | (275 | ) | $ | 30,393 | $ | (2,187 | ) | $ | 70,689 | $ | (2,462 | ) | |||||||||
Held-to-maturity | ||||||||||||||||||||||||
State and municipal | $ | 392 | $ | — | $ | 1,211 | $ | (16 | ) | $ | 1,603 | $ | (16 | ) | ||||||||||
Small Business Administration | — | — | 1,166 | (3 | ) | 1,166 | (3 | ) | ||||||||||||||||
Fannie Mae | 315 | (1 | ) | 9,569 | (451 | ) | 9,884 | (452 | ) | |||||||||||||||
Freddie Mac | — | — | 3,987 | (73 | ) | 3,987 | (73 | ) | ||||||||||||||||
Government National Mortgage Assoc. | 3,735 | (117 | ) | — | — | 3,735 | (117 | ) | ||||||||||||||||
Total securities held-to-maturity in an unrecognized loss position | $ | 4,442 | $ | (118 | ) | $ | 15,933 | $ | (543 | ) | $ | 20,375 | $ | (661 | ) |
11
Less than 12 Months | More than 12 Months | Total | ||||||||||||||||||||||
December 31, 2013 | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | ||||||||||||||||||
Description of Securities | ||||||||||||||||||||||||
Available-for-sale | (In thousands) | |||||||||||||||||||||||
U.S. Agencies | $ | 16,496 | $ | (1,502 | ) | $ | 932 | $ | (68 | ) | $ | 17,428 | $ | (1,570 | ) | |||||||||
Corporate | 14,954 | (707 | ) | 9,100 | (1,738 | ) | 24,054 | (2,445 | ) | |||||||||||||||
Agency asset backed securities | 3,836 | (112 | ) | — | — | 3,836 | (112 | ) | ||||||||||||||||
State and municipal | 4,233 | (60 | ) | — | — | 4,233 | (60 | ) | ||||||||||||||||
Small Business Administration | 725 | — | 4 | — | 729 | — | ||||||||||||||||||
Fannie Mae | 10,624 | (222 | ) | — | — | 10,624 | (222 | ) | ||||||||||||||||
Freddie Mac | 4,636 | (13 | ) | — | — | 4,636 | (13 | ) | ||||||||||||||||
Government National Mortgage Assoc. | 1,913 | (39 | ) | 2,235 | (50 | ) | 4,148 | (89 | ) | |||||||||||||||
Collateralized mortgage obligations | 335 | (3 | ) | — | — | 335 | (3 | ) | ||||||||||||||||
Private placement mortgage obligation | 1,375 | (42 | ) | — | — | 1,375 | (42 | ) | ||||||||||||||||
Total securities available-for-sale in an unrealized loss position | $ | 59,127 | $ | (2,700 | ) | $ | 12,271 | $ | (1,856 | ) | $ | 71,398 | $ | (4,556 | ) | |||||||||
Held-to-maturity | ||||||||||||||||||||||||
U.S. Agencies | $ | 36,271 | $ | (706 | ) | $ | 4,153 | $ | (55 | ) | $ | 40,424 | $ | (761 | ) | |||||||||
State and municipal | 16,895 | (259 | ) | — | — | 16,895 | (259 | ) | ||||||||||||||||
Small Business Administration | 9,738 | (100 | ) | — | — | 9,738 | (100 | ) | ||||||||||||||||
Fannie Mae | 23,041 | (828 | ) | — | — | 23,041 | (828 | ) | ||||||||||||||||
Freddie Mac | 15,534 | (187 | ) | — | — | 15,534 | (187 | ) | ||||||||||||||||
Government National Mortgage Assoc. | 8,401 | (223 | ) | — | — | 8,401 | (223 | ) | ||||||||||||||||
Total securities held-to-maturity in an unrecognized loss position | $ | 109,880 | $ | (2,303 | ) | $ | 4,153 | $ | (55 | ) | $ | 114,033 | $ | (2,358 | ) |
Declines in the fair value of securities below their cost that are other-than-temporary are reflected as realized losses. The Company evaluates securities for other-than-temporary impairment (“OTTI”) on at least a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. For securities in an unrealized loss position, management considers the extent and duration of the unrealized loss, and the financial condition and near-term prospects of the issuer. Management also assesses whether it intends to sell, or it is more likely than not that it will be required to sell, a security in an unrealized loss position before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the entire difference between amortized cost and fair value is recognized as impairment through earnings. For debt securities that do not meet the aforementioned criteria, the amount of the impairment is split into two components as follows: 1) OTTI related to credit loss, which must be recognized in the income statement and 2) OTTI related to other factors, which is recognized in other comprehensive income. The credit loss is defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis.
In order to determine OTTI for purchased beneficial interests that, on the purchase date, were not highly rated, the Company compares the present value of the remaining cash flows as estimated at the preceding evaluation date to the current expected remaining cash flows. OTTI is deemed to have occurred if there has been an adverse change in the remaining expected future cash flows.
As of September 30, 2014, the Company’s security portfolio consisted of 374 securities, 75 of which were in an unrealized loss position. The majority of the unrealized losses are related to the Company’s agency, mortgage-backed securities, state and municipal, and corporate securities as discussed below.
12
U.S. Agency and Agency Mortgage-Backed Securities
Fannie Mae, Freddie Mac, Ginnie Mae and the Small Business Administration guarantee the contractual cash flows of our agency and mortgage-backed securities. Fannie Mae and Freddie Mac are institutions which the government has affirmed its commitment to support. Our Ginnie Mae mortgage-backed securities are backed by the full faith and credit of the U.S. Government. All of the agency mortgage-backed securities are residential mortgage-backed securities. At September 30, 2014, of the 51 U.S. Government sponsored enterprise agency and mortgage-backed securities in an unrealized loss position, twenty-five were in a continuous unrealized loss position for 12 months or more. The unrealized losses at September 30, 2014 were primarily attributable to changes in interest rates and illiquidity, and not credit quality. The Company does not have the intent to sell these agency and mortgage-backed securities and it is likely that it will not be required to sell the securities before their anticipated recovery. The Company does not consider these securities to be other-than-temporarily impaired at September 30, 2014.
Corporate Debt, Agency Asset Backed and Municipal Securities
At September 30, 2014, of the 24 corporate debt and municipal securities in an unrealized loss position, thirteen were in a continuous unrealized loss position of 12 months or more. We have assessed these securities and determined that the decline in fair value was temporary. In making this determination, we considered the period of time the securities were in a loss position, the percentage decline in comparison with the securities’ amortized cost, the financial condition of the issuer, and the delinquency or default rates based on the applicable bond ratings. In addition, we do not have the intent to sell these securities and it is likely that we will not be required to sell these securities before the recovery of their amortized cost basis, which may be at maturity. Included in the thirteen securities whose unrealized loss position exceeds 12 months was a $2.5 million Strats-Goldman Sachs Corporation obligation, maturing February 15, 2034 which is a variable rate note based on the 6 month libor. The current rate on the security is 1.33%. The unrealized loss was $1,041,000 and $1,116,000 at September 30, 2014 and December 31, 2013, respectively. In addition to the items noted above, we reviewed capital ratios, public filings of the issuer and related trust documents in the review of the unrealized loss. The Strats-Goldman Sachs Corporation obligation is paying as agreed. The other twelve securities in a continuous unrealized loss position were finance sector corporate debt securities and municipal securities all rated above investment grade at September 30, 2014, that have maturities ranging from 2021 to 2034. The Company does not consider these securities to be other-than-temporarily impaired at September 30, 2014.
Trust Preferred Securities
The Company had $1.0 million invested in two trust preferred securities which had unrealized gains of $1.9 million as of June 30, 2014. The two trust preferred securities ,which had a principal balance of $906,000 were sold and a gain of $2,043,000 was recorded during the three months ended September 30, 2014. The Company had no investments in trust preferred securities as of September 30, 2014. The Company had $1.0 million invested in two trust preferred securities as of December 31, 2013 which had unrealized gains of $1.5 million.
Payments received on these trust preferred securities totaling $147,000 and $1.4 million for the nine months ended September 30, 2014 and 2013 respectively, were applied to principal. The Company realized $158,000 and $273,000 of interest income on these securities for the nine months ended September 30, 2014 and 2013 respectively and realized a $2,043,000 gain on sale for the three and nine months ended September 30, 2014. The interest income realized was based on estimated cash flows. Both of the trust preferred securities were pooled issuances. Prior to December 2013, the company had owned nine trust preferred securities of which seven were sold/liquidated during the year resulting in a net gain of $92,000 on the sales. Six of the securities were considered nonaccrual during 2013.
The table below presents a roll-forward of the credit losses recognized in earnings for the nine months ended September 30, 2014 and 2013:
September 30, 2014 | September 30, 2013 | ||||||
(In thousands) | |||||||
Beginning balance | $ | 5,348 | $ | 5,879 | |||
Reductions for previous credit losses realized on securities sold during the year | (2,043 | ) | (208 | ) | |||
Reductions for previous credit losses due to an increase in cash flows expected to be collected | (158 | ) | (358 | ) | |||
Ending balance | $ | 3,147 | $ | 5,313 |
13
Note D — Loans Receivable
The components of loans receivable at September 30, 2014 and December 31, 2013 are as follows:
September 30, 2014 | December 31, 2013 | ||||||
(In thousands) | |||||||
Commercial loans | $ | 55,374 | $ | 50,877 | |||
Commercial real estate | 90,923 | 90,251 | |||||
Consumer loans | 39,524 | 28,831 | |||||
Home equity | 51,904 | 49,424 | |||||
Residential mortgages | 119,830 | 118,402 | |||||
357,555 | 337,785 | ||||||
Deferred fees | 1,274 | 965 | |||||
Allowance for loan losses | (3,491 | ) | (3,110 | ) | |||
Net loans | $ | 355,338 | $ | 335,640 |
The allowance for loan losses is a valuation allowance for probable incurred credit losses. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. Management estimates the allowance balance required using past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions, and other factors. Allocation of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in management’s judgment, should be charged off. The allowance consists of specific and general components. The specific component relates to loans that are individually classified as impaired.
A loan is considered impaired, when, based on current information and events, it is probable that the Bank will be unable to collect all amounts due according to the contractual terms of the loan agreement. Loans for which the terms have been modified resulting in a concession, and for which the borrower is experiencing financial difficulties, are considered troubled debt restructurings and classified as impaired.
Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed.
If a loan is impaired, a portion of the allowance is allocated so that the loan is reported, net, at the present value of estimated future cash flows using the loan’s existing rate or the fair value of collateral if repayment is expected solely from collateral. Large groups of smaller balance homogeneous loans, such as consumer and residential real estate loans are collectively evaluated for impairment, and accordingly, they are not separately identified for impairment disclosures.
Troubled debt restructurings are separately identified for impairment disclosures and are measured at the present value of estimated future cash flows using the loan's effective rate at inception. If a troubled debt restructuring is considered to be a collateral dependent loan, the loan is reported, net at the fair value of the collateral. For the troubled debt restructurings that subsequently default, the Company determines the amount of reserve in accordance with the accounting policy for the allowance for loan losses.
The general component covers non-impaired loans and is based on historical loss experience adjusted for current factors. The historical loss experience is determined by portfolio segment and is based on the actual loss history experienced by the Company over the most recent three years. This actual loss experience is supplemented with other economic factors based on the risks present for each portfolio segment. These economic factors include consideration of the following: levels of and trends in delinquencies and impaired loans; levels of and trends in charge-offs and recoveries; trends in volume and terms of loans; effects of any changes in risk selection and underwriting standards; other changes in lending policies, procedures, and practices; experience, ability and depth of lending management and other relevant staff; national and local economic trends and conditions; industry conditions; and effects of changes in credit concentrations. The following portfolio segments have been identified: commercial loans, commercial real estate loans, consumer loans, home equity loans and residential mortgages.
14
Commercial business lending generally involves greater risk than residential mortgage lending and involves risks that are different from those associated with residential and commercial real estate lending. Real estate lending is generally considered to be collateral based, with loan amounts based on predetermined loan to collateral values and liquidation of the underlying real estate collateral is viewed as the primary source of repayment in the event of borrower default. Although commercial business loans may be collateralized by equipment or other business assets, the liquidation of collateral in the event of a borrower default is often an insufficient source of repayment because equipment and other business assets may be obsolete or of limited use, among other things. Accordingly, the repayment of a commercial business loan depends primarily on the creditworthiness of the borrower (and any guarantors), while liquidation of collateral is a secondary and often insufficient source of repayment.
Loans secured by commercial real estate and multi-family residential properties generally are larger than one-to-four family residential loans and involve a greater degree of risk. Commercial and multi-family residential mortgage loans often involve large loan balances to single borrowers or groups of related borrowers. Payments on these loans depend to a large degree on the results of operations and management of the properties or underlying businesses, and may be affected to a greater extent by adverse conditions in the real estate market or the economy in general. Accordingly, the nature of commercial real estate loans makes them more difficult for management to monitor and evaluate.
Consumer loans generally have shorter terms and higher interest rates than one-to-four family mortgage loans. In addition, consumer loans expand the products and services we offer to meet the financial services needs of our customers. Consumer loans generally involve greater credit risk than residential mortgage loans because of the difference in the underlying collateral. Repossessed collateral for a defaulted consumer loan may not provide an adequate source of repayment of the outstanding loan balance because of the greater likelihood of damage to, loss of, or depreciation in the underlying collateral. The remaining deficiency often does not warrant further substantial collection efforts against the borrower beyond obtaining a deficiency judgment. In addition, consumer loan collections depend on the borrower’s personal financial stability. Furthermore, the application of various federal and state laws, including federal and state bankruptcy and insolvency laws, may limit the amount that can be recovered on such loans.
Home equity loans are secured by a borrower’s primary residence. Home equity loans are underwritten under the same criteria that we use to underwrite one-to-four family fixed-rate loans. Home equity loans may be underwritten with a loan to value ratio of 90% when combined with the principal balance of an existing mortgage loan. Home equity loans generally involve greater credit risk than the primary residential mortgage loans due to the potential of declines in collateral values, collectability as a result of foreclosure processes if the Bank is considered to be in a secondary position as well as the amount of expenses incurred during the process.
Residential real estate loans have as collateral a borrower’s primary residence. The risk of loss on these loans would be due to collateral deficiencies due to market deterioration or location and condition of the property. The foreclosure process of a primary residence is usually the final course of action on these types of loans. Given our underwriting criteria and the volume and balance of the loans as compared to collateral, the risk in this portfolio segment is lower than that of the other segments.
The recorded investment in loans excludes accrued interest receivable and loan origination fees, net, due to immateriality.
The following table sets forth the activity in the allowance for loan losses by portfolio segment:
For the Three Months Ended | Commercial Loans | Commercial Real Estate | Consumer Loans | Home Equity | Residential Mortgages | Total | ||||||||||||||||||
September 30, 2014 | ||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||||||
Beginning balance | $ | 1,186 | $ | 993 | $ | 304 | $ | 287 | $ | 503 | $ | 3,273 | ||||||||||||
Charge-offs | — | — | (68 | ) | (21 | ) | — | (89 | ) | |||||||||||||||
Recoveries | — | 3 | 33 | — | 1 | 37 | ||||||||||||||||||
Provision for loan losses | 82 | 62 | 114 | 12 | — | 270 | ||||||||||||||||||
Ending balance | $ | 1,268 | $ | 1,058 | $ | 383 | $ | 278 | $< |