Delaware
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94-3327828
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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111 W. Pine Street, Lodi, California
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95240
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer ☐
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Accelerated filer ☒
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Non-accelerated filer ☐
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Smaller Reporting Company ☐
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(Do not check if a smaller reporting company)
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Page
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PART I
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||
3
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Item 1
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3
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Item 1A.
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13
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Item 1B.
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21
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Item 2.
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21
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Item 3.
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21
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Item 4.
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21
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PART II
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||
Item 5.
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21
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Item 6.
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24
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Item 7.
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25
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Item 7A.
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56
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Item 8.
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59
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Item 9.
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99
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Item 9A.
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99
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Item 9B.
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100
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PART III
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||
Item 10.
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100
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Item 11.
|
101
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Item 12.
|
101
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Item 13.
|
101
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Item 14.
|
101
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PART IV
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||
Item 15.
|
102
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104
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104
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· | Sacramento Metropolitan Statistical Area (“MSA”), with branches in Sacramento, Elk Grove and Galt. This MSA has a Population of 2.27 million and a Per Capita Income of approximately $49,700. The MSA includes significant employment in the following sectors: state and local government; agriculture; and trade, transportation and utilities. Unemployment currently stands at 6.3%. |
· | Stockton MSA, with branches in Lodi, Linden and Stockton. This MSA has a Population of 0.7 million and a Per Capita Income of approximately $37, 000. The MSA includes significant employment in the following sectors: state and local government; agriculture; trade, transportation, and utilities; and education and health services. Unemployment currently stands at 10.2%. |
· | Modesto MSA, with branches in Modesto and Turlock. This MSA has a Population of 0.5 million and a Per Capita Income of approximately $38,400. The MSA includes significant employment in the following sectors: agriculture; trade, transportation and utilities; state and local government; and education and health services. Unemployment currently stands at 10.4%. |
· | Merced MSA with branches in Hilmar and Merced. This MSA has a Population of 0.3 million and a Per Capita Income of approximately $34,000. The MSA includes significant employment in the following sectors: agriculture; state and local government; and trade, transportation and utilities. Unemployment currently stands at 12.1%. |
· | Centralize responsibility for consumer financial protection by creating a new agency within the Federal Reserve Board, the Bureau of Consumer Financial Protection, with broad rulemaking, supervision and enforcement authority for a wide range of consumer protection laws that would apply to all banks and thrifts. |
· | Apply the same leverage and risk-based capital requirements that apply to insured depository institutions to bank holding companies. |
· | Require the FDIC to seek to make its capital requirements for banks countercyclical so that the amount of capital required to be maintained increases in times of economic expansion and decreases in times of economic contraction. |
· | Change the assessment base for federal deposit insurance from the amount of insured deposits to consolidated assets less tangible capital. |
· | Implement corporate governance revisions, including executive compensation and proxy access by stockholders. |
· | Make permanent the $250,000 limit for federal deposit insurance and increase the cash limit of Securities Investor Protection Corporation protection from $100,000 to $250,000, and provide unlimited federal deposit insurance until January 1, 2013 for non-interest bearing demand transaction accounts at all insured depository institutions. |
· | Repeal the federal prohibitions on the payment of interest on demand deposits effective July 21, 2011, thereby permitting depository institutions to pay interest on business transaction and other accounts. |
• | control of any other bank or bank holding company or all or substantially all the assets thereof; or |
• | more than 5% of the voting shares of a bank or bank holding company which is not already a subsidiary. |
· | inability to maintain or increase net interest margin; |
· | inability to control non-interest expense, including, but not limited to, rising employee and healthcare costs and the costs of regulatory compliance; |
· | inability to maintain or increase non-interest income; and |
·
|
continuing ability to expand through de novo branching or otherwise.
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· | actual or anticipated variations in quarterly results of operations; |
· | operating and stock price performance of other companies that investors deem comparable to our Company; |
· | news reports relating to trends, concerns and other issues in the financial services industry; |
· | available investment liquidity in our market area since our stock is not listed on any exchange; and |
· | perceptions in the marketplace regarding our Company and/or its competitors. |
Item 5.
|
Calendar Quarter
|
High
|
Low
|
Close
|
Cash Dividends
Declared (Per Share)
|
|||||||||||||
2014
|
Fourth quarter
|
$
|
466
|
$
|
450
|
$
|
463
|
$
|
6.40
|
||||||||
Third quarter
|
445
|
430
|
450
|
-
|
|||||||||||||
Second quarter
|
451
|
420
|
433
|
6.30
|
|||||||||||||
First quarter
|
448
|
417
|
425
|
-
|
Calendar Quarter
|
High
|
Low
|
Close
|
Cash Dividends
Declared (Per Share)
|
|||||||||||||
2013
|
Fourth quarter
|
$
|
417
|
$
|
405
|
$
|
417
|
$
|
6.30
|
||||||||
Third quarter
|
420
|
400
|
415
|
-
|
|||||||||||||
Second quarter
|
500
|
384
|
400
|
6.20
|
|||||||||||||
First quarter
|
470
|
375
|
470
|
-
|
Summary of Income:
|
2014
|
2013
|
2012
|
2011
|
2010
|
|||||||||||||||
Total Interest Income
|
$
|
81,521
|
$
|
76,531
|
$
|
78,491
|
$
|
82,354
|
$
|
84,461
|
||||||||||
Total Interest Expense
|
2,813
|
2,891
|
5,140
|
7,974
|
9,685
|
|||||||||||||||
Net Interest Income
|
78,708
|
73,640
|
73,351
|
74,380
|
74,776
|
|||||||||||||||
Provision for Credit Losses
|
1,175
|
425
|
1,850
|
6,775
|
14,735
|
|||||||||||||||
Net Interest Income After Provision for Credit Losses
|
77,533
|
73,215
|
71,501
|
67,605
|
60,041
|
|||||||||||||||
Total Non-Interest Income
|
14,329
|
15,937
|
14,110
|
12,274
|
17,185
|
|||||||||||||||
Total Non-Interest Expense
|
51,366
|
50,870
|
48,277
|
45,028
|
43,939
|
|||||||||||||||
Income Before Income Taxes
|
40,496
|
38,282
|
37,334
|
34,851
|
33,287
|
|||||||||||||||
Provision for Income Taxes
|
15,094
|
14,221
|
13,985
|
12,642
|
12,169
|
|||||||||||||||
Net Income
|
$
|
25,402
|
$
|
24,061
|
$
|
23,349
|
$
|
22,209
|
$
|
21,118
|
||||||||||
Balance Sheet Data:
|
||||||||||||||||||||
Total Assets
|
$
|
2,360,551
|
$
|
2,076,073
|
$
|
1,974,686
|
$
|
1,919,684
|
$
|
1,841,491
|
||||||||||
Loans & Leases
|
1,712,244
|
1,388,236
|
1,246,902
|
1,163,078
|
1,176,002
|
|||||||||||||||
Allowance for Credit Losses
|
35,401
|
34,274
|
34,217
|
33,017
|
32,261
|
|||||||||||||||
Investment Securities
|
430,405
|
473,144
|
486,383
|
542,912
|
493,581
|
|||||||||||||||
Deposits
|
2,064,073
|
1,807,691
|
1,722,026
|
1,626,197
|
1,566,503
|
|||||||||||||||
Federal Home Loan Bank Advances
|
-
|
-
|
-
|
530
|
591
|
|||||||||||||||
Shareholders' Equity
|
233,178
|
209,904
|
205,033
|
189,346
|
173,241
|
|||||||||||||||
Selected Ratios:
|
||||||||||||||||||||
Return on Average Assets
|
1.17
|
%
|
1.21
|
%
|
1.22
|
%
|
1.19
|
%
|
1.19
|
%
|
||||||||||
Return on Average Equity
|
11.43
|
%
|
11.54
|
%
|
11.62
|
%
|
12.10
|
%
|
12.25
|
%
|
||||||||||
Dividend Payout Ratio
|
39.05
|
%
|
40.41
|
%
|
40.34
|
%
|
41.24
|
%
|
41.93
|
%
|
||||||||||
Average Loans & Leases to Average Deposits
|
79.99
|
%
|
74.28
|
%
|
72.02
|
%
|
74.48
|
%
|
79.03
|
%
|
||||||||||
Average Equity to Average Assets
|
10.28
|
%
|
10.52
|
%
|
10.45
|
%
|
9.85
|
%
|
9.74
|
%
|
||||||||||
Period-end Shareholders' Equity to Total Assets
|
9.88
|
%
|
10.11
|
%
|
10.38
|
%
|
9.86
|
%
|
9.41
|
%
|
||||||||||
Basic Per Share Data:
|
||||||||||||||||||||
Net Income
(1)
|
$
|
32.64
|
$
|
30.93
|
$
|
29.99
|
$
|
28.49
|
$
|
27.05
|
||||||||||
Cash Dividends Per Share
|
$
|
12.70
|
$
|
12.50
|
$
|
12.10
|
$
|
11.75
|
$
|
11.35
|
(1)
|
Based on the weighted average number of shares outstanding of 778,358
,
777,882, 778,648, 779,424, and 780,619 for the years ended December 31, 2014, 2013, 2012, 2011, and 2010, respectively.
|
Financial Performance Indicator
|
2014
|
2013
|
2012
|
2011
|
2010
|
|||||||||||||||
|
||||||||||||||||||||
Net Income
|
$
|
25,402
|
$
|
24,062
|
$
|
23,349
|
$
|
22,209
|
$
|
21,118
|
||||||||||
Total Assets
|
2,360,551
|
2,076,073
|
1,974,686
|
1,919,684
|
1,841,491
|
|||||||||||||||
Total Loans
|
1,712,244
|
1,388,236
|
1,246,902
|
1,163,078
|
1,176,002
|
|||||||||||||||
Total Deposits
|
2,064,073
|
1,807,691
|
1,722,026
|
1,626,197
|
1,566,503
|
|||||||||||||||
Total Shareholders’ Equity
|
233,178
|
209,904
|
205,033
|
189,346
|
173,241
|
|||||||||||||||
Total Risk-Based Capital Ratio
|
12.93
|
%
|
13.99
|
%
|
14.96
|
%
|
14.86
|
%
|
13.82
|
%
|
||||||||||
Non-Performing Loans as a % of Total Loans
|
0.13
|
%
|
0.19
|
%
|
0.74
|
%
|
0.36
|
%
|
0.45
|
%
|
||||||||||
Substandard Loans as a % of Total Loans
|
0.21
|
%
|
0.41
|
%
|
1.72
|
%
|
3.67
|
%
|
3.40
|
%
|
||||||||||
Net Charge-Offs to Average Loans
|
0.00
|
%
|
0.03
|
%
|
0.05
|
%
|
0.51
|
%
|
1.04
|
%
|
||||||||||
Loan Loss Allowance as a % of Total Loans
|
2.06
|
%
|
2.46
|
%
|
2.74
|
%
|
2.83
|
%
|
2.74
|
%
|
||||||||||
Return on Average Assets
|
1.17
|
%
|
1.21
|
%
|
1.22
|
%
|
1.19
|
%
|
1.19
|
%
|
||||||||||
Return on Average Equity
|
11.43
|
%
|
11.54
|
%
|
11.62
|
%
|
12.10
|
%
|
12.25
|
%
|
||||||||||
Earnings Per Share
|
32.64
|
30.93
|
29.99
|
28.49
|
27.05
|
|||||||||||||||
Cash Dividends Per Share
|
12.70
|
12.50
|
12.10
|
11.75
|
11.35
|
|||||||||||||||
Cash Dividends Declared
|
9,919
|
9,723
|
9,418
|
9,158
|
8,855
|
|||||||||||||||
# Shares Repurchased During Year
|
-
|
-
|
1,542
|
-
|
1,520
|
|||||||||||||||
Average Share Price of Repurchased Shares
|
-
|
-
|
373
|
-
|
400
|
|||||||||||||||
High Stock Price – Fourth Quarter
|
466
|
417
|
405
|
400
|
425
|
|||||||||||||||
Low Stock Price – Fourth Quarter
|
450
|
405
|
355
|
345
|
400
|
|||||||||||||||
Closing Stock Price – Fourth Quarter
|
463
|
417
|
405
|
400
|
415
|
· | Net income totaled $116.1 million and never dropped below $21.0 million in any single year. |
· | Return on Average Assets never dropped below 1.17% in any single year. |
· | Total assets increased 32.5% to $2.4 billion. |
· | Total loans & leases increased 41.2% to $1.7 billion. |
· | Total deposits increased 37.8% to $2.1 billion. |
· | In 2014, the Company earned $25.4 million for a return on average assets of 1.17%, and our return on average assets averaged 1.20% over the five-year period. Importantly, these strong results were generated at the same time the Company increased its credit loss allowance by $1.2 million, to $35.4 million or 2.06% of total loans & leases. |
· | In 2014, the Company increased its cash dividend per share by 2.0% over 2013 levels, and our strong financial performance has allowed us to increase dividends every year during this five-year period. |
· | The Company’s total risk based capital ratio was 12.93% at December 31, 2014, and the Bank achieved the highest regulatory classification of “well capitalized” in each of the five years. See “Financial Condition – Capital.” |
· | The Company began to diversify its: (1) geographic market by establishing new branches in Walnut Creek and Irvine, CA; and (2) lending products by introducing equipment leasing. |
· | Despite continuing sluggish economic conditions in the Company’s local markets, the Company’s asset quality remains very strong compared to peer banks at the present time, when measured by: (1) net charge-offs of 0.33% of average loans & leases during this five-year period; and (2) substandard loans & leases totaling 0.21% of total loans & leases at December 31, 2014. See “Results of Operations – Provision and Allowance for Credit Losses” and “Financial Condition – Classified Loans & Leases and Non-Performing Assets.” |
· | The Company’s earnings are heavily dependent on its net interest margin, which is sensitive to such factors as: (1) market interest rates; (2) the mix of our earning assets and interest-bearing liabilities; and (3) competitor pricing strategies. |
- | During the third quarter of 2007, the FRB began dropping short-term market rates. Market rates remain low, and management does not expect this to change significantly during 2015. |
- | Deposit growth outstripped loan growth in 2010 – 2012 and, as a result, the Company’s loan-to-deposit ratio dropped. This resulted in a higher percentage of our earning assets being placed into lower yielding investment securities, interest-bearing deposits with banks, and Federal Funds Sold. Although loan growth picked-up substantially in 2013 - 2014, partially as a result of our expansion into Walnut Creek and equipment leasing, we still face a difficult economic environment in the Central Valley combined with a very competitive pricing environment. No assurances can be given that this recent growth in the loan & lease portfolio will continue. |
- | Aggressive competitor pricing for loans, leases and deposits has often required the Company to respond in order to retain key customers. |
· | The Company’s results are impacted by changes in the credit quality of its borrowers. Substandard loans & leases totaled $3.6 million or 0.21% of total loans & leases at December 31, 2014 vs. $5.8 million or 0.41% of total loans at December 31, 2013, and a peak of $62.8 million or 5.17% of total loans at December 31, 2009. Management believes, based on information currently available, that these levels are adequately covered by the Company’s $35.4 million allowance for credit losses as of December 31, 2014. See “Results of Operations - Provision and Allowance for Credit Losses” and “Financial Condition – Classified Loans & Leases and Non-Performing Assets.” The Company’s provision for credit losses was $1.2 million in 2014, compared to $425,000 in 2013 and $1.9 million in 2012. See “Item 1A. Risk Factors.” |
· | FDIC deposit insurance expense for the years 2014, 2013, and 2012 was $1.0 million, $981,000, and $968,000, respectively. In 2011 the FDIC changed its methodology for calculating deposit premiums. See “Item 1. Business – Supervision and Regulation – Deposit Insurance.” While FDIC deposit insurance assessments have stabilized in recent years, they remain well above the pre-recession level the Company paid in 2007. |
· | Congress and the Obama Administration are continuing to implement broad changes to the regulation of consumer financial products and the financial services industry as a whole. These changes could significantly affect the Company’s product offerings, pricing and profitability in areas such as debit and credit cards, home mortgages and deposit service charges. |
· | The Company has expanded its geographic footprint to include Walnut Creek, CA and Irvine, CA and has established equipment leasing as a new line of business. Additional expansion is underway in Concord, CA, an area contiguous to Walnut Creek (see Item 1: Business – Service Area). Although Management believes that these initiatives will result in increased asset growth and earnings, along with reduced concentration risks, the start-up costs related to staff and facilities are significant and will take time to cover. |
Year Ended December 31, 2014
|
||||||||||||
Assets
|
Balance
|
Interest
|
Rate
|
|||||||||
Interest Bearing Deposits with Banks
|
$
|
62,452
|
$
|
158
|
0.25
|
%
|
||||||
Investment Securities:
|
||||||||||||
Government Agency & Government-Sponsored Entities
|
18,383
|
186
|
1.01
|
%
|
||||||||
Obligations of States and Political Subdivisions - Non-Taxable
|
65,202
|
3,552
|
5.45
|
%
|
||||||||
Mortgage Backed Securities
|
314,293
|
7,174
|
2.28
|
%
|
||||||||
Other
|
36,643
|
379
|
1.03
|
%
|
||||||||
Total Investment Securities
|
434,521
|
11,291
|
2.60
|
%
|
||||||||
Loans & Leases
|
||||||||||||
Real Estate
|
1,027,795
|
49,914
|
4.86
|
%
|
||||||||
Home Equity Lines and Loans
|
34,017
|
1,881
|
5.53
|
%
|
||||||||
Agricultural
|
224,859
|
8,997
|
4.00
|
%
|
||||||||
Commercial
|
179,420
|
8,655
|
4.82
|
%
|
||||||||
Consumer
|
5,143
|
307
|
5.97
|
%
|
||||||||
Other
|
17
|
1
|
5.88
|
%
|
||||||||
Leases
|
28,136
|
1,555
|
5.53
|
%
|
||||||||
Total Loans & Leases
|
1,499,387
|
71,310
|
4.76
|
%
|
||||||||
Total Earning Assets
|
1,996,360
|
$
|
82,759
|
4.15
|
%
|
|||||||
Unrealized Gain on Securities Available-for-Sale
|
1,462
|
|||||||||||
Allowance for Credit Losses
|
(34,316
|
)
|
||||||||||
Cash and Due From Banks
|
32,219
|
|||||||||||
All Other Assets
|
166,860
|
|||||||||||
Total Assets
|
$
|
2,162,585
|
||||||||||
Liabilities & Shareholders' Equity
|
||||||||||||
Interest Bearing Deposits
|
||||||||||||
Interest Bearing DDA
|
$
|
311,911
|
$
|
167
|
0.05
|
%
|
||||||
Savings and Money Market
|
627,129
|
1,051
|
0.17
|
%
|
||||||||
Time Deposits
|
430,968
|
1,268
|
0.29
|
%
|
||||||||
Total Interest Bearing Deposits
|
1,370,008
|
2,486
|
0.18
|
%
|
||||||||
Federal Home Loan Bank Advances
|
3,643
|
5
|
0.14
|
%
|
||||||||
Subordinated Debt
|
10,310
|
322
|
3.12
|
%
|
||||||||
Total Interest Bearing Liabilities
|
1,383,961
|
$
|
2,813
|
0.20
|
%
|
|||||||
Interest Rate Spread
|
3.94
|
%
|
||||||||||
Demand Deposits
|
504,470
|
|||||||||||
All Other Liabilities
|
51,946
|
|||||||||||
Total Liabilities
|
1,940,377
|
|||||||||||
Shareholders' Equity
|
222,208
|
|||||||||||
Total Liabilities & Shareholders' Equity
|
$
|
2,162,585
|
||||||||||
Impact of Non-Interest Bearing Deposits and Other Liabilities
|
0.06
|
%
|
||||||||||
Net Interest Income and Margin on Total Earning Assets
|
79,946
|
4.00
|
%
|
|||||||||
Tax Equivalent Adjustment
|
(1,238
|
)
|
||||||||||
Net Interest Income
|
$
|
78,708
|
3.94
|
%
|
Year Ended December 31, 2013 | ||||||||||||
Assets
|
Balance
|
Interest
|
Rate
|
|||||||||
Interest Bearing Deposits with Banks
|
$
|
30,743
|
$
|
79
|
0.26
|
%
|
||||||
Investment Securities:
|
||||||||||||
Government Agency & Government-Sponsored Entities
|
28,033
|
256
|
0.91
|
%
|
||||||||
Obligations of States and Political Subdivisions - Non-Taxable
|
68,832
|
3,929
|
5.71
|
%
|
||||||||
Mortgage Backed Securities
|
374,927
|
8,117
|
2.16
|
%
|
||||||||
Other
|
52,318
|
598
|
1.14
|
%
|
||||||||
Total Investment Securities
|
524,110
|
12,900
|
2.46
|
%
|
||||||||
Loans & Leases
|
||||||||||||
Real Estate
|
868,855
|
46,056
|
5.30
|
%
|
||||||||
Home Equity Lines and Loans
|
38,293
|
2,187
|
5.71
|
%
|
||||||||
Agricultural
|
204,103
|
8,715
|
4.27
|
%
|
||||||||
Commercial
|
150,456
|
7,546
|
5.02
|
%
|
||||||||
Consumer
|
4,888
|
313
|
6.40
|
%
|
||||||||
Other
|
230
|
13
|
5.65
|
%
|
||||||||
Leases
|
2,507
|
91
|
3.63
|
%
|
||||||||
Total Loans & Leases
|
1,269,332
|
64,921
|
5.11
|
%
|
||||||||
Total Earning Assets
|
1,824,185
|
$
|
77,900
|
4.27
|
%
|
|||||||
Unrealized Gain on Securities Available-for-Sale
|
3,453
|
|||||||||||
Allowance for Credit Losses
|
(34,227
|
)
|
||||||||||
Cash and Due From Banks
|
33,648
|
|||||||||||
All Other Assets
|
155,715
|
|||||||||||
Total Assets
|
$
|
1,982,774
|
||||||||||
Liabilities & Shareholders' Equity
|
||||||||||||
Interest Bearing Deposits
|
||||||||||||
Interest Bearing DDA
|
$
|
259,348
|
$
|
119
|
0.05
|
%
|
||||||
Savings and Money Market
|
577,214
|
947
|
0.16
|
%
|
||||||||
Time Deposits
|
444,605
|
1,482
|
0.33
|
%
|
||||||||
Total Interest Bearing Deposits
|
1,281,167
|
2,548
|
0.20
|
%
|
||||||||
Other Borrowed Funds
|
12,265
|
16
|
0.13
|
%
|
||||||||
Subordinated Debt
|
10,310
|
327
|
3.17
|
%
|
||||||||
Total Interest Bearing Liabilities
|
1,303,742
|
$
|
2,891
|
0.22
|
%
|
|||||||
Interest Rate Spread
|
4.05
|
%
|
||||||||||
Demand Deposits
|
427,673
|
|||||||||||
All Other Liabilities
|
42,783
|
|||||||||||
Total Liabilities
|
1,774,198
|
|||||||||||
Shareholders' Equity
|
208,576
|
|||||||||||
Total Liabilities & Shareholders' Equity
|
$
|
1,982,774
|
||||||||||
Impact of Non-Interest Bearing Deposits and Other Liabilities
|
0.06
|
%
|
||||||||||
Net Interest Income and Margin on Total Earning Assets
|
75,009
|
4.11
|
%
|
|||||||||
Tax Equivalent Adjustment
|
(1,369
|
)
|
||||||||||
Net Interest Income
|
$
|
73,640
|
4.04
|
%
|
Year Ended December 31, 2012
|
||||||||||||
Assets
|
Balance
|
Interest
|
Rate
|
|||||||||
Interest Bearing Deposits with Banks
|
$
|
43,351
|
$
|
110
|
0.25
|
%
|
||||||
Investment Securities:
|
||||||||||||
Government Agency & Government-Sponsored Entities
|
56,396
|
577
|
1.02
|
%
|
||||||||
Obligations of States and Political Subdivisions - Non-Taxable
|
70,432
|
4,047
|
5.75
|
%
|
||||||||
Mortgage Backed Securities
|
399,121
|
9,182
|
2.30
|
%
|
||||||||
Other
|
15,358
|
182
|
1.19
|
%
|
||||||||
Total Investment Securities
|
541,307
|
13,988
|
2.58
|
%
|
||||||||
Loans
|
||||||||||||
Real Estate
|
767,555
|
44,329
|
5.78
|
%
|
||||||||
Home Equity Lines and Loans
|
46,405
|
2,656
|
5.72
|
%
|
||||||||
Agricultural
|
200,040
|
9,888
|
4.94
|
%
|
||||||||
Commercial
|
163,089
|
8,455
|
5.18
|
%
|
||||||||
Consumer
|
5,820
|
456
|
7.84
|
%
|
||||||||
Other
|
237
|
13
|
5.49
|
%
|
||||||||
Total Loans
|
1,183,146
|
65,797
|
5.56
|
%
|
||||||||
Total Earning Assets
|
1,767,804
|
$
|
79,895
|
4.52
|
%
|
|||||||
Unrealized Gain on Securities Available-for-Sale
|
12,116
|
|||||||||||
Allowance for Loan Losses
|
(33,248
|
)
|
||||||||||
Cash and Due From Banks
|
33,941
|
|||||||||||
All Other Assets
|
140,998
|
|||||||||||
Total Assets
|
$
|
1,921,611
|
||||||||||
Liabilities & Shareholders' Equity
|
||||||||||||
Interest Bearing Deposits
|
||||||||||||
Interest Bearing DDA
|
$
|
231,813
|
$
|
167
|
0.07
|
%
|
||||||
Savings and Money Market
|
540,063
|
1,281
|
0.24
|
%
|
||||||||
Time Deposits
|
496,327
|
2,291
|
0.46
|
%
|
||||||||
Total Interest Bearing Deposits
|
1,268,203
|
3,739
|
0.29
|
%
|
||||||||
Securities Sold Under Agreement to Repurchase
|
28,197
|
1,018
|
3.61
|
%
|
||||||||
Other Borrowed Funds
|
3,698
|
36
|
0.97
|
%
|
||||||||
Subordinated Debt
|
10,310
|
347
|
3.37
|
%
|
||||||||
Total Interest Bearing Liabilities
|
1,310,408
|
$
|
5,140
|
0.39
|
%
|
|||||||
Interest Rate Spread
|
4.13
|
%
|
||||||||||
Demand Deposits
|
374,677
|
|||||||||||
All Other Liabilities
|
35,631
|
|||||||||||
Total Liabilities
|
1,720,716
|
|||||||||||
Shareholders' Equity
|
200,895
|
|||||||||||
Total Liabilities & Shareholders' Equity
|
$
|
1,921,611
|
||||||||||
Impact of Non-Interest Bearing Deposits and Other Liabilities
|
0.10
|
%
|
||||||||||
Net Interest Income and Margin on Total Earning Assets
|
74,755
|
4.23
|
%
|
|||||||||
Tax Equivalent Adjustment
|
(1,404
|
)
|
||||||||||
Net Interest Income
|
$
|
73,351
|
4.15
|
%
|
(Interest and Rates on a Taxable Equivalent Basis)
|
2014 versus 2013 | |||||||||||
(in thousands)
|
Amount of Increase | |||||||||||
(Decrease) Due to Change in: | ||||||||||||
Interest Earning Assets
|
Volume
|
Rate
|
Net Chg.
|
|||||||||
Interest Bearing Deposits with Banks
|
$
|
80
|
$
|
(1
|
)
|
$
|
79
|
|||||
Investment Securities:
|
||||||||||||
Government Agency & Government-Sponsored Entities
|
(96
|
)
|
26
|
(70
|
)
|
|||||||
Obligations of States and Political Subdivisions - Non-Taxable
|
(202
|
)
|
(175
|
)
|
(377
|
)
|
||||||
Mortgage Backed Securities
|
(1,366
|
)
|
423
|
(943
|
)
|
|||||||
Other
|
(166
|
)
|
(53
|
)
|
(219
|
)
|
||||||
Total Investment Securities
|
(1,830
|
)
|
221
|
(1,609
|
)
|
|||||||
Loans & Leases:
|
||||||||||||
Real Estate
|
7,941
|
(4,083
|
)
|
3,858
|
||||||||
Home Equity Lines and Loans
|
(238
|
)
|
(68
|
)
|
(306
|
)
|
||||||
Agricultural
|
851
|
(569
|
)
|
282
|
||||||||
Commercial
|
1,406
|
(297
|
)
|
1,109
|
||||||||
Consumer
|
16
|
(22
|
)
|
(6
|
)
|
|||||||
Other
|
(13
|
)
|
1
|
(12
|
)
|
|||||||
Leases
|
1,392
|
72
|
1,464
|
|||||||||
Total Loans & Leases
|
11,355
|
(4,966
|
)
|
6,389
|
||||||||
Total Earning Assets
|
9,605
|
(4,746
|
)
|
4,859
|
||||||||
Interest Bearing Liabilities
|
||||||||||||
Interest Bearing Deposits:
|
||||||||||||
Interest Bearing DDA
|
26
|
22
|
48
|
|||||||||
Savings and Money Market
|
84
|
20
|
104
|
|||||||||
Time Deposits
|
(44
|
)
|
(170
|
)
|
(214
|
)
|
||||||
Total Interest Bearing Deposits
|
66
|
(128
|
)
|
(62
|
)
|
|||||||
Other Borrowed Funds
|
(12
|
)
|
1
|
(11
|
)
|
|||||||
Subordinated Debt
|
-
|
(5
|
)
|
(5
|
)
|
|||||||
Total Interest Bearing Liabilities
|
54
|
(132
|
)
|
(78
|
)
|
|||||||
Total Change
|
$
|
9,551
|
$
|
(4,614
|
)
|
$
|
4,937
|
(Interest and Rates on a Taxable Equivalent Basis)
|
2013 versus 2012
|
|||||||||||
(in thousands)
|
Amount of Increase
|
|||||||||||
(Decrease) Due to Change in:
|
||||||||||||
Interest Earning Assets
|
Volume
|
Rate
|
Net Chg.
|
|||||||||
Interest Bearing Deposits with Banks
|
$
|
(32
|
)
|
$
|
1
|
$
|
(31
|
)
|
||||
Investment Securities:
|
||||||||||||
Government Agency & Government-Sponsored Entities
|
(264
|
)
|
(57
|
)
|
(321
|
)
|
||||||
Obligations of States and Political Subdivisions - Non-Taxable
|
(92
|
)
|
(27
|
)
|
(119
|
)
|
||||||
Mortgage Backed Securities
|
(540
|
)
|
(525
|
)
|
(1,065
|
)
|
||||||
Other
|
422
|
(6
|
)
|
416
|
||||||||
Total Investment Securities
|
(474
|
)
|
(615
|
)
|
(1,089
|
)
|
||||||
Loans & Leases:
|
||||||||||||
Real Estate
|
5,554
|
(3,827
|
)
|
1,727
|
||||||||
Home Equity Lines and Loans
|
(463
|
)
|
(6
|
)
|
(469
|
)
|
||||||
Agricultural
|
197
|
(1,370
|
)
|
(1,173
|
)
|
|||||||
Commercial
|
(640
|
)
|
(269
|
)
|
(909
|
)
|
||||||
Consumer
|
(67
|
)
|
(76
|
)
|
(143
|
)
|
||||||
Leases
|
91
|
-
|
91
|
|||||||||
Total Loans & Leases
|
4,672
|
(5,548
|
)
|
(876
|
)
|
|||||||
Total Earning Assets
|
4,166
|
(6,162
|
)
|
(1,996
|
)
|
|||||||
Interest Bearing Liabilities
|
||||||||||||
Interest Bearing Deposits:
|
||||||||||||
Interest Bearing DDA
|
18
|
(66
|
)
|
(48
|
)
|
|||||||
Savings and Money Market
|
83
|
(417
|
)
|
(334
|
)
|
|||||||
Time Deposits
|
(221
|
)
|
(588
|
)
|
(809
|
)
|
||||||
Total Interest Bearing Deposits
|
(120
|
)
|
(1,071
|
)
|
(1,191
|
)
|
||||||
Securities Sold Under Agreement to Repurchase
|
(1,018
|
)
|
-
|
(1,018
|
)
|
|||||||
Other Borrowed Funds
|
30
|
(50
|
)
|
(20
|
)
|
|||||||
Subordinated Debt
|
-
|
(20
|
)
|
(20
|
)
|
|||||||
Total Interest Bearing Liabilities
|
(1,108
|
)
|
(1,141
|
)
|
(2,249
|
)
|
||||||
Total Change
|
$
|
5,274
|
$
|
(5,021
|
)
|
$
|
253
|
2014
|
2013
|
2012
|
2011
|
2010
|
||||||||||||||||
Allowance for Credit Losses Beginning of Year
|
$
|
34,274
|
$
|
34,217
|
$
|
33,017
|
$
|
32,261
|
$
|
29,813
|
||||||||||
Provision Charged to Expense
|
1,175
|
425
|
1,850
|
6,775
|
14,735
|
|||||||||||||||
Charge-Offs:
|
||||||||||||||||||||
Commercial Real Estate
|
-
|
6
|
-
|
25
|
1,629
|
|||||||||||||||
Agricultural Real Estate
|
-
|
575
|
-
|
384
|
559
|
|||||||||||||||
Real Estate Construction
|
-
|
-
|
-
|
-
|
4,095
|
|||||||||||||||
Residential 1st Mortgages
|
73
|
16
|
152
|
449
|
759
|
|||||||||||||||
Home Equity Lines and Loans
|
70
|
91
|
259
|
751
|
310
|
|||||||||||||||
Agricultural
|
-
|
23
|
294
|
3,559
|
916
|
|||||||||||||||
Commercial
|
1
|
60
|
198
|
788
|
4,143
|
|||||||||||||||
Consumer & Other
|
132
|
120
|
145
|
190
|
112
|
|||||||||||||||
Total Charge-Offs
|
276
|
891
|
1,048
|
6,146
|
12,523
|
|||||||||||||||
Recoveries:
|
||||||||||||||||||||
Commercial Real Estate
|
11
|
-
|
-
|
-
|
-
|
|||||||||||||||
Agricultural Real Estate
|
-
|
-
|
90
|
18
|
2
|
|||||||||||||||
Real Estate Construction
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Residential 1st Mortgages
|
-
|
-
|
53
|
4
|
7
|
|||||||||||||||
Home Equity Lines and Loans
|
58
|
115
|
14
|
13
|
-
|
|||||||||||||||
Agricultural
|
8
|
42
|
61
|
10
|
68
|
|||||||||||||||
Commercial
|
86
|
312
|
117
|
21
|
92
|
|||||||||||||||
Consumer & Other
|
65
|
54
|
63
|
61
|
67
|
|||||||||||||||
Total Recoveries
|
228
|
523
|
398
|
127
|
236
|
|||||||||||||||
Net Charge-Offs
|
(48
|
)
|
(368
|
)
|
(650
|
)
|
(6,019
|
)
|
(12,287
|
)
|
||||||||||
Total Allowance for Credit Losses
|
$
|
35,401
|
$
|
34,274
|
$
|
34,217
|
$
|
33,017
|
$
|
32,261
|
||||||||||
Ratios:
|
||||||||||||||||||||
Allowance for Credit Losses to:
|
||||||||||||||||||||
Total Loans & Leases at Year End
|
2.06
|
%
|
2.46
|
%
|
2.74
|
%
|
2.83
|
%
|
2.74
|
%
|
||||||||||
Average Loans & Leases
|
2.36
|
%
|
2.70
|
%
|
2.89
|
%
|
2.82
|
%
|
2.73
|
%
|
||||||||||
Consolidated Net Charge-Offs to:
|
||||||||||||||||||||
Total Loans & Leases at Year End
|
0.00
|
%
|
0.03
|
%
|
0.05
|
%
|
0.52
|
%
|
1.04
|
%
|
||||||||||
Average Loans & Leases
|
0.00
|
%
|
0.03
|
%
|
0.05
|
%
|
0.51
|
%
|
1.04
|
%
|
December 31, 2014
|
Commercial Real Estate
|
Agricultural Real Estate
|
Real Estate Construction
|
Residential 1st Mortgages
|
Home Equity Lines & Loans
|
Agricultural
|
Commercial
|
Consumer & Other
|
Leases
|
Unallocated
|
Total
|
|||||||||||||||||||||||||||||||||
Year-To-Date Allowance for Credit Losses:
|
||||||||||||||||||||||||||||||||||||||||||||
Beginning Balance- January 1, 2014
|
$
|
5,178
|
$
|
3,576
|
$
|
654
|
$
|
1,108
|
$
|
2,767
|
$
|
12,205
|
$
|
5,697
|
$
|
176
|
$
|
639
|
$
|
2,274
|
$
|
34,274
|
||||||||||||||||||||||
Charge-Offs
|
-
|
-
|
-
|
(73
|
)
|
(70
|
)
|
-
|
(1
|
)
|
(132
|
)
|
-
|
-
|
(276
|
)
|
||||||||||||||||||||||||||||
Recoveries
|
11
|
-
|
-
|
-
|
58
|
8
|
86
|
65
|
-
|
-
|
228
|
|||||||||||||||||||||||||||||||||
Provision
|
2,653
|
609
|
1,015
|
(13
|
)
|
(329
|
)
|
(6,109
|
)
|
2,413
|
109
|
1,572
|
(745
|
)
|
1,175
|
|||||||||||||||||||||||||||||
Ending Balance- December 31, 2014
|
$
|
7,842
|
$
|
4,185
|
$
|
1,669
|
$
|
1,022
|
$
|
2,426
|
$
|
6,104
|
$
|
8,195
|
$
|
218
|
$
|
2,211
|
$
|
1,529
|
$
|
35,401
|
· | Commercial Real Estate, Agricultural Real Estate, Real Estate Construction, Commercial and Lease allowance balances increased, primarily as a result of increased loan and lease balances. |
· | Agricultural allowance balances decreased $6.1 million, primarily due to the impact on reserve factors of an improvement in the overall credit quality of the portfolio during the past three years. |
· | Unallocated allowance balances decreased $745,000 due to the imprecision in estimating and allocating allowance balances associated with macro factors such as: (1) the continuing sluggish economic conditions in the Central Valley (see Item 1A. Risk Factors – Risks Associated With Our Business - Continuing Difficult Economic Conditions In Our Service Areas Could Adversely Affect Our Operations And/Or Cause Us To Sustain Losses ); and (2) the long term impact of drought conditions currently being experienced in California (see Item 1A. Risk Factors – Risks Associated With Our Business - Our Financial Results Can Be Impacted By The Cyclicality and Seasonality Of Our Agricultural Business And The Risks Related Thereto ). |
Allowance Allocation at December 31,
|
||||||||||||||||||||||||||||||||||||||||
(in thousands)
|
2014 Amount
|
Percent of
Loans in Each
Category to
Total Loans
|
2013 Amount
|
Percent of
Loans in Each
Category to
Total Loans
|
2012 Amount
|
Percent of
Loans in Each
Category to
Total Loans
|
2011 Amount
|
Percent of
Loans in Each
Category to
Total Loans
|
2010 Amount
|
Percent of
Loans in Each
Category to
Total Loans
|
||||||||||||||||||||||||||||||
Commercial Real Estate
|
$
|
7,842
|
28.9
|
%
|
$
|
5,178
|
29.5
|
%
|
$
|
6,464
|
28.2
|
%
|
$
|
5,823
|
26.4
|
%
|
$
|
7,631
|
27.0
|
%
|
||||||||||||||||||||
Agricultural Real Estate
|
4,185
|
20.8
|
%
|
3,576
|
23.6
|
%
|
2,877
|
25.0
|
%
|
2,583
|
24.0
|
%
|
1,539
|
21.6
|
%
|
|||||||||||||||||||||||||
Real Estate Construction
|
1,669
|
5.6
|
%
|
654
|
3.0
|
%
|
986
|
2.6
|
%
|
1,933
|
2.5
|
%
|
2,160
|
3.2
|
%
|
|||||||||||||||||||||||||
Residential 1st Mortgages
|
1,022
|
10.0
|
%
|
1,108
|
10.9
|
%
|
1,219
|
11.2
|
%
|
1,251
|
9.2
|
%
|
1,164
|
8.8
|
%
|
|||||||||||||||||||||||||
Home Equity Lines and Loans
|
2,426
|
1.9
|
%
|
2,767
|
2.5
|
%
|
3,235
|
3.4
|
%
|
3,746
|
4.4
|
%
|
3,724
|
5.0
|
%
|
|||||||||||||||||||||||||
Agricultural
|
6,104
|
16.4
|
%
|
12,205
|
18.4
|
%
|
10,437
|
17.7
|
%
|
8,127
|
18.6
|
%
|
6,733
|
19.6
|
%
|
|||||||||||||||||||||||||
Commercial
|
8,195
|
13.5
|
%
|
5,697
|
10.8
|
%
|
7,963
|
11.5
|
%
|
8,733
|
14.2
|
%
|
9,084
|
14.0
|
%
|
|||||||||||||||||||||||||
Consumer & Other
|
218
|
0.3
|
%
|
176
|
0.4
|
%
|
182
|
0.4
|
%
|
207
|
0.7
|
%
|
216
|
0.8
|
%
|
|||||||||||||||||||||||||
Leases
|
2,211
|
2.6
|
%
|
639
|
0.9
|
%
|
-
|
0.0
|
%
|
-
|
0.0
|
%
|
-
|
0.0
|
%
|
|||||||||||||||||||||||||
Unallocated
|
1,529
|
2,274
|
854
|
614
|
10
|
|||||||||||||||||||||||||||||||||||
Total
|
$
|
35,401
|
100.0
|
%
|
$
|
34,274
|
100.0
|
%
|
$
|
34,217
|
100.0
|
%
|
$
|
33,017
|
100.0
|
%
|
$
|
32,261
|
100.0
|
%
|
Available
for Sale
|
Held to
Maturity
|
Available
for Sale
|
Held to
Maturity
|
Available
for Sale
|
Held to
Maturity
|
|||||||||||||||||||
December 31:
(in thousands)
|
2014
|
2013
|
2012
|
|||||||||||||||||||||
Government Agency & Government Sponsored Entities
|
$
|
78,109
|
$
|
-
|
$
|
28,436
|
$
|
-
|
$
|
26,823
|
$
|
-
|
||||||||||||
Obligations of States and Political Subdivisions - Non-Taxable
|
-
|
61,716
|
-
|
65,685
|
5,665
|
65,694
|
||||||||||||||||||
Mortgage Backed Securities
|
287,948
|
-
|
324,929
|
45
|
352,772
|
484
|
||||||||||||||||||
Corporate Securities
|
-
|
-
|
49,380
|
-
|
22,558
|
-
|
||||||||||||||||||
Other
|
485
|
2,147
|
1,894
|
2,775
|
10,173
|
2,214
|
||||||||||||||||||
Total Book Value
|
$
|
366,542
|
$
|
63,863
|
$
|
404,639
|
$
|
68,505
|
$
|
417,991
|
$
|
68,392
|
||||||||||||
Fair Value
|
$
|
366,542
|
$
|
64,635
|
$
|
404,639
|
$
|
68,689
|
$
|
417,991
|
$
|
70,697
|
December 31, 2014
(in thousands)
|
Fair
Value
|
Average
Yield
|
||||||
Government Agency & Government Sponsored Entities
|
||||||||
One year or less
|
$
|
76,985
|
0.18
|
%
|
||||
After one year through five years
|
1,124
|
2.82
|
%
|
|||||
Total Government Agency & Government Sponsored Entities
|
78,109
|
0.22
|
%
|
|||||
Other
|
||||||||
One year or less
|
485
|
0.68
|
%
|
|||||
Total Other Securities
|
485
|
0.68
|
%
|
|||||
Mortgage Backed Securities
|
287,948
|
2.26
|
%
|
|||||
Total Investment Securities Available-for-Sale
|
$
|
366,542
|
1.82
|
%
|
December 31, 2014
(in thousands)
|
Book
Value
|
Average
Yield
|
||||||
Obligations of States and Political Subdivisions - Non-Taxable
|
||||||||
One year or less
|
$
|
600
|
5.35
|
%
|
||||
After one year through five years
|
16,426
|
6.20
|
%
|
|||||
After five years through ten years
|
9,845
|
5.00
|
%
|
|||||
After ten years
|
34,845
|
4.83
|
%
|
|||||
Total Obligations of States and Political Subdivisions - Non-Taxable
|
61,716
|
5.23
|
%
|
|||||
Other
|
||||||||
After one year through five years
|
2,147
|
0.57
|
%
|
|||||
Total Other Securities
|
2,147
|
0.27
|
%
|
|||||
Total Investment Securities Held-to-Maturity
|
$
|
63,863
|
5.06
|
%
|
2014
|
2013
|
2012
|
2011
|
2010
|
||||||||||||||||||||||||||||||||||||
(in thousands)
|
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
||||||||||||||||||||||||||||||
Commercial Real Estate
|
$
|
495,316
|
28.9
|
%
|
$
|
411,037
|
29.5
|
%
|
$
|
353,109
|
28.3
|
%
|
$
|
307,670
|
26.4
|
%
|
$
|
318,341
|
27.0
|
%
|
||||||||||||||||||||
Agricultural Real Estate
|
357,207
|
20.8
|
%
|
328,264
|
23.6
|
%
|
311,992
|
25.0
|
%
|
280,139
|
24.0
|
%
|
254,575
|
21.6
|
%
|
|||||||||||||||||||||||||
Real Estate Construction
|
96,519
|
5.6
|
%
|
41,092
|
3.0
|
%
|
32,680
|
2.6
|
%
|
29,607
|
2.5
|
%
|
37,486
|
3.2
|
%
|
|||||||||||||||||||||||||
Residential 1st Mortgages
|
171,880
|
10.0
|
%
|
151,292
|
10.9
|
%
|
140,257
|
11.2
|
%
|
107,421
|
9.2
|
%
|
103,574
|
8.8
|
%
|
|||||||||||||||||||||||||
Home Equity Lines and Loans
|
33,017
|
1.9
|
%
|
35,477
|
2.5
|
%
|
42,042
|
3.4
|
%
|
50,956
|
4.4
|
%
|
58,971
|
5.0
|
%
|
|||||||||||||||||||||||||
Agricultural
|
281,963
|
16.4
|
%
|
256,414
|
18.4
|
%
|
221,032
|
17.7
|
%
|
217,227
|
18.6
|
%
|
231,150
|
19.6
|
%
|
|||||||||||||||||||||||||
Commercial
|
230,819
|
13.5
|
%
|
150,398
|
10.8
|
%
|
143,293
|
11.5
|
%
|
165,089
|
14.2
|
%
|
165,263
|
14.0
|
%
|
|||||||||||||||||||||||||
Consumer & Other
|
4,719
|
0.3
|
%
|
5,052
|
0.4
|
%
|
5,058
|
0.3
|
%
|
6,935
|
0.7
|
%
|
8,712
|
0.8
|
%
|
|||||||||||||||||||||||||
Leases
|
44,217
|
2.6
|
%
|
12,733
|
0.9
|
%
|
-
|
0.0
|
%
|
-
|
0.0
|
%
|
-
|
0.0
|
%
|
|||||||||||||||||||||||||
Total Gross Loans & Leases
|
1,715,657
|
100.0
|
%
|
1,391,759
|
100.0
|
%
|
1,249,463
|
100.0
|
%
|
1,165,044
|
100.0
|
%
|
1,178,072
|
100.0
|
%
|
|||||||||||||||||||||||||
Less: Unearned Income
|
3,413
|
3,523
|
2,561
|
1,966
|
2,070
|
|||||||||||||||||||||||||||||||||||
Subtotal
|
1,712,244
|
1,388,236
|
1,246,902
|
1,163,078
|
1,176,002
|
|||||||||||||||||||||||||||||||||||
Less: Allowance for Credit Losses
|
35,401
|
34,274
|
34,217
|
33,017
|
32,261
|
|||||||||||||||||||||||||||||||||||
Loans & Leases, Net
|
$
|
1,676,843
|
$
|
1,353,962
|
$
|
1,212,685
|
$
|
1,130,061
|
$
|
1,143,741
|
(in thousands)
|
One Year
or Less
|
Over One
Year to
|
Over
Five
|
Total
|
||||||||||||
Commercial Real Estate
|
$
|
23,276
|
$
|
156,972
|
$
|
311,655
|
$
|
491,903
|
||||||||
Agricultural Real Estate
|
12,597
|
91,079
|
253,531
|
357,207
|
||||||||||||
Real Estate Construction
|
48,486
|
46,615
|
1,418
|
96,519
|
||||||||||||
Residential 1st Mortgages
|
391
|
3,201
|
168,288
|
171,880
|
||||||||||||
Home Equity Lines and Loans
|
24
|
871
|
32,122
|
33,017
|
||||||||||||
Agricultural
|
157,717
|
89,002
|
35,244
|
281,963
|
||||||||||||
Commercial
|
80,487
|
98,869
|
51,463
|
230,819
|
||||||||||||
Consumer & Other
|
903
|
3,301
|
515
|
4,719
|
||||||||||||
Leases
|
-
|
3,628
|
40,589
|
44,217
|
||||||||||||
Total
|
$
|
323,881
|
$
|
493,538
|
$
|
894,825
|
$
|
1,712,244
|
||||||||
Rate Sensitivity:
|
||||||||||||||||
Fixed Rate
|
$
|
71,836
|
$
|
158,713
|
$
|
388,068
|
$
|
618,617
|
||||||||
Variable Rate
|
252,046
|
334,824
|
506,757
|
1,093,627
|
||||||||||||
Total
|
$
|
323,882
|
$
|
493,537
|
$
|
894,825
|
$
|
1,712,244
|
||||||||
Percent
|
18.92
|
%
|
28.82
|
%
|
52.26
|
%
|
100.00
|
%
|
December 31,
|
||||||||||||||||||||
(in thousands)
|
2014
|
2013
|
2012
|
2011
|
2010
|
|||||||||||||||
Non-Accrual Loans & Leases
|
||||||||||||||||||||
Commercial Real Estate
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
1,354
|
$
|
2,348
|
||||||||||
Agricultural Real Estate
|
-
|
-
|
5,423
|
954
|
1,797
|
|||||||||||||||
Real Estate Construction
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Residential 1st Mortgages
|
77
|
324
|
445
|
284
|
954
|
|||||||||||||||
Home Equity Lines and Loans
|
576
|
406
|
213
|
194
|
-
|
|||||||||||||||
Agricultural
|
18
|
35
|
3,198
|
1,202
|
-
|
|||||||||||||||
Commercial
|
1,586
|
1,815
|
-
|
217
|
207
|
|||||||||||||||
Consumer & Other
|
13
|
16
|
19
|
23
|
2
|
|||||||||||||||
Total Non-Accrual Loans & Leases
|
2,270
|
2,596
|
9,298
|
4,228
|
5,308
|
|||||||||||||||
Accruing Loans & Leases Past Due 90 Days or More
|
||||||||||||||||||||
Commercial Real Estate
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Agricultural Real Estate
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Real Estate Construction
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Residential 1st Mortgages
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Home Equity Lines and Loans
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Agricultural
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Commercial
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Consumer & Other
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Total Accruing Loans & Leases Past Due 90 Days or More
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Total Non-Performing Loans & Leases
|
$
|
2,270
|
$
|
2,596
|
$
|
9,298
|
$
|
4,228
|
$
|
5,308
|
||||||||||
Other Real Estate Owned
|
$
|
3,299
|
$
|
4,611
|
$
|
2,553
|
$
|
2,924
|
$
|
8,039
|
||||||||||
Total Non-Performing Assets
|
$
|
5,569
|
$
|
7,207
|
$
|
11,851
|
$
|
7,152
|
$
|
13,347
|
||||||||||
Restructured Loans & Leases (Performing)
|
$
|
4,955
|
$
|
4,649
|
$
|
2,300
|
$
|
4,710
|
$
|
27,652
|
||||||||||
Non-Performing Loans & Leases as a Percent of Total Loans & Leases
|
0.13
|
%
|
0.19
|
%
|
0.74
|
%
|
0.36
|
%
|
0.45
|
%
|
· | The Central Valley was one of the hardest hit areas in the country during the recession. In many areas housing prices declined as much as 60% and unemployment reached 15% or more. Although the economy has stabilized throughout most of the Central Valley, housing prices for the most part have not recovered significantly and unemployment levels remain well above those in other areas of the state and country. |
· | The state of California has experienced drought conditions during much of 2013 and 2014. Importantly, most of the Company’s agricultural customers have access to their own ground water supplies and, therefore, are not as dependent on the delivery of surface water as growers in other parts of California. Although management continues to believe that current conditions will not have a material impact on credit quality during 2015, the lack of rain will have a continuing adverse impact on our agricultural customers’ operating costs, crop yields and crop quality. The longer the drought continues, the more significant this impact will become, particularly if ground water levels reach critical stage. |
(in thousands)
|
|
|||
Time Deposits of $250,000 or More
|
||||
Three Months or Less
|
$
|
186,073
|
||
Over Three Months Through Six Months
|
8,899
|
|||
Over Six Months Through Twelve Months
|
25,906
|
|||
Over Twelve Months
|
18,771
|
|||
Total Time Deposits of $250,000 or More
|
$
|
239,649
|
· | Demand and interest-bearing transaction accounts increased $163.8 million or 20.8% since December 31, 2013. |
· | Savings and money market accounts have increased $54.7 million or 9.3% since December 31, 2013. |
· | Time deposit accounts have increased $37.9 million or 8.8% since December 31, 2013. |
(in thousands)
|
December 31, 2014
|
December 31, 2013
|
||||||
Commitments to Extend Credit
|
$
|
539,288
|
$
|
445,294
|
||||
Letters of Credit
|
9,734
|
7,393
|
||||||
Performance Guarantees Under Interest Rate Swap Contracts Entered Into Between Our Borrowing Customers and Third Parties
|
2,042
|
-
|
(in thousands)
|
Total
|
1 Year
or Less
|
2-3 Years
|
4-5 Years
|
More Than 5 Years
|
|||||||||||||||
Operating Lease Obligations
|
$
|
2,051
|
$
|
540
|
$
|
568
|
$
|
386
|
$
|
557
|
||||||||||
Long-Term Subordinated Debentures
|
10,310
|
-
|
-
|
-
|
10,310
|
|||||||||||||||
Deferred Compensation
(1)
|
37,546
|
679
|
1,129
|
389
|
35,349
|
|||||||||||||||
Total
|
$
|
49,907
|
$
|
1,219
|
$
|
1,697
|
$
|
775
|
$
|
46,216
|
2014
|
First
|
Second
|
Third
|
Fourth
|
||||||||||||||||
(in thousands except per share data)
|
Quarter
|
Quarter
|
Quarter
|
Quarter
|
Total
|
|||||||||||||||
Total Interest Income
|
$
|
19,047
|
$
|
19,458
|
$
|
20,614
|
$
|
22,402
|
$
|
81,521
|
||||||||||
Total Interest Expense
|
680
|
678
|
708
|
747
|
2,813
|
|||||||||||||||
Net Interest Income
|
18,367
|
18,780
|
19,906
|
21,655
|
78,708
|
|||||||||||||||
Provision for Credit Losses
|
-
|
-
|
-
|
1,175
|
1,175
|
|||||||||||||||
Net Interest Income After
|
||||||||||||||||||||
Provision for Credit Losses
|
18,367
|
18,780
|
19,906
|
20,480
|
77,533
|
|||||||||||||||
Total Non-Interest Income
|
3,162
|
3,943
|
2,920
|
4,304
|
14,329
|
|||||||||||||||
Total Non-Interest Expense
|
11,640
|
13,034
|
12,542
|
14,150
|
51,366
|
|||||||||||||||
Income Before Income Taxes
|
9,889
|
9,689
|
10,284
|
10,634
|
40,496
|
|||||||||||||||
Provision for Income Taxes
|
3,607
|
3,585
|
3,852
|
4,050
|
15,094
|
|||||||||||||||
Net Income
|
$
|
6,282
|
$
|
6,104
|
$
|
6,432
|
$
|
6,584
|
$
|
25,402
|
||||||||||
Basic Earnings Per Common Share
|
$
|
8.08
|
$
|
7.84
|
$
|
8.27
|
$
|
8.45
|
$
|
32.64
|
||||||||||
2013
|
First
|
Second
|
Third
|
Fourth
|
||||||||||||||||
(in thousands except per share data)
|
Quarter
|
Quarter
|
Quarter
|
Quarter
|
Total
|
|||||||||||||||
Total Interest Income
|
$
|
18,255
|
$
|
18,945
|
$
|
19,615
|
$
|
19,716
|
$
|
76,531
|
||||||||||
Total Interest Expense
|
764
|
719
|
721
|
687
|
2,891
|
|||||||||||||||
Net Interest Income
|
17,491
|
18,226
|
18,894
|
19,029
|
73,640
|
|||||||||||||||
Provision for Credit Losses
|
-
|
250
|
-
|
175
|
425
|
|||||||||||||||
Net Interest Income After
|
||||||||||||||||||||
Provision for Credit Losses
|
17,491
|
17,976
|
18,894
|
18,854
|
73,215
|
|||||||||||||||
Total Non-Interest Income
|
5,497
|
2,964
|
3,448
|
4,028
|
15,937
|
|||||||||||||||
Total Non-Interest Expense
|
12,959
|
12,102
|
12,185
|
13,624
|
50,870
|
|||||||||||||||
Income Before Income Taxes
|
10,029
|
8,838
|
10,157
|
9,258
|
38,282
|
|||||||||||||||
Provision for Income Taxes
|
3,778
|
3,273
|
3,805
|
3,365
|
14,221
|
|||||||||||||||
Net Income
|
$
|
6,251
|
$
|
5,565
|
$
|
6,352
|
$
|
5,893
|
$
|
24,061
|
||||||||||
Basic Earnings Per Common Share
|
$
|
8.04
|
$
|
7.15
|
$
|
8.17
|
$
|
7.57
|
$
|
30.93
|
§ | general economic and business conditions affecting the key service areas of the Company; |
§ | credit quality trends (including trends in collateral values, delinquencies and non-performing loans & leases); |
§ | loan & lease volumes, growth rates and concentrations; |
§ | loan & lease portfolio seasoning; |
§ | specific industry and crop conditions; |
§ | recent loss experience; and |
§ | duration of the current business cycle. |
Page
|
||
Report of Management on Internal Control Over Financial Reporting
|
60
|
|
Reports of Independent Registered Public Accounting Firms
|
61
|
|
Consolidated Financial Statements
|
||
Consolidated Balance Sheets – December 31, 2014, and 2013
|
63
|
|
Consolidated Statements of Income – Years ended December 31, 2014, 2013 and 2012
|
64
|
|
Consolidated Statements of Comprehensive Income – Years Ended December 31, 2014, 2013 and 2012
|
65
|
|
Consolidated Statements of Changes in Shareholders' Equity – Years ended December 31, 2014, 2013 and 2012
|
66
|
|
Consolidated Statements of Cash Flows - Years Ended December 31, 2014, 2013 and 2012
|
67
|
|
Notes to Consolidated Financial Statements
|
68
|
/s/ Kent A. Steinwert
|
/s/ Stephen W. Haley
|
Kent A. Steinwert
|
Stephen W. Haley
|
Chairman, President & Chief Executive Officer
|
Executive Vice President & Chief Financial Officer
|
|
|
|
|
|
Crowe Horwath LLP
|
|
|
Independent Member Crowe Horwath International
|
/s/ Crowe Horwath LLP
|
|
Crowe Horwath LLP
|
Farmers & Merchants Bancorp
|
Consolidated Balance Sheets
|
(in thousands except share and per share data)
|
December 31,
|
||||||||
Assets
|
2014
|
2013
|
||||||
Cash and Cash Equivalents:
|
||||||||
Cash and Due from Banks
|
$
|
42,375
|
$
|
40,966
|
||||
Interest Bearing Deposits with Banks
|
34,750
|
42,711
|
||||||
Total Cash and Cash Equivalents
|
77,125
|
83,677
|
||||||
Investment Securities:
|
||||||||
Available-for-Sale
|
366,542
|
404,639
|
||||||
Held-to-Maturity
|
63,863
|
68,505
|
||||||
Total Investment Securities
|
430,405
|
473,144
|
||||||
Loans & Leases:
|
1,712,244
|
1,388,236
|
||||||
Less: Allowance for Credit Losses
|
35,401
|
34,274
|
||||||
Loans& Leases, Net
|
1,676,843
|
1,353,962
|
||||||
Premises and Equipment, Net
|
25,821
|
22,887
|
||||||
Bank Owned Life Insurance
|
53,990
|
52,109
|
||||||
Interest Receivable and Other Assets
|
96,367
|
90,294
|
||||||
Total Assets
|
$
|
2,360,551
|
$
|
2,076,073
|
||||
Liabilities
|
||||||||
Deposits:
|
||||||||
Demand
|
$
|
610,133
|
$
|
495,963
|
||||
Interest-Bearing Transaction
|
341,397
|
291,795
|
||||||
Savings and Money Market
|
644,260
|
589,511
|
||||||
Time
|
468,283
|
430,422
|
||||||
Total Deposits
|
2,064,073
|
1,807,691
|
||||||
Subordinated Debentures
|
10,310
|
10,310
|
||||||
Interest Payable and Other Liabilities
|
52,990
|
48,168
|
||||||
Total Liabilities
|
2,127,373
|
1,866,169
|
||||||
Commitments & Contingencies (See Note 19)
|
||||||||
Shareholders' Equity
|
||||||||
Preferred Stock: No Par Value, 1,000,000 Shares Authorized, None Issued or Outstanding
|
-
|
-
|
||||||
Common Stock: Par Value $0.01, 7,500,000 Shares Authorized, 784,082 and 777,882 Shares Issued and Outstanding at December 31, 2014 and 2013, respectively.
|
8
|
8
|
||||||
Additional Paid-In Capital
|
77,804
|
75,014
|
||||||
Retained Earnings
|
152,833
|
137,350
|
||||||
Accumulated Other Comprehensive Income (Loss)
|
2,533
|
(2,468
|
)
|
|||||
Total Shareholders' Equity
|
233,178
|
209,904
|
||||||
Total Liabilities and Shareholders' Equity
|
$
|
2,360,551
|
$
|
2,076,073
|
Farmers & Merchants Bancorp
|
Consolidated Statements of Income
|
(in thousands except per share data)
|
Year Ended December 31,
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
Interest Income
|
||||||||||||
Interest and Fees on Loans & Leases
|
$
|
71,310
|
$
|
64,921
|
$
|
65,798
|
||||||
Interest on Deposits with Banks
|
158
|
79
|
110
|
|||||||||
Interest on Investment Securities:
|
||||||||||||
Taxable
|
7,739
|
8,971
|
9,940
|
|||||||||
Exempt from Federal Tax
|
2,314
|
2,560
|
2,643
|
|||||||||
Total Interest Income
|
81,521
|
76,531
|
78,491
|
|||||||||
Interest Expense
|
||||||||||||
Deposits
|
2,486
|
2,548
|
3,739
|
|||||||||
Borrowed Funds
|
5
|
16
|
1,054
|
|||||||||
Subordinated Debentures
|
322
|
327
|
347
|
|||||||||
Total Interest Expense
|
2,813
|
2,891
|
5,140
|
|||||||||
Net Interest Income
|
78,708
|
73,640
|
73,351
|
|||||||||
Provision for Credit Losses
|
1,175
|
425
|
1,850
|
|||||||||
Net Interest Income After Provision for Credit Losses
|
77,533
|
73,215
|
71,501
|
|||||||||
Non-Interest Income
|
||||||||||||
Service Charges on Deposit Accounts
|
3,923
|
4,350
|
4,891
|
|||||||||
Net Gain (Loss) on Investment Securities
|
90
|
(229
|
)
|
158
|
||||||||
Increase in Cash Surrender Value of Life Insurance
|
1,881
|
1,856
|
1,836
|
|||||||||
Debit Card and ATM Fees
|
3,087
|
3,069
|
2,938
|
|||||||||
Net Gain on Deferred Compensation Investments
|
2,129
|
3,366
|
1,687
|
|||||||||
Other
|
3,219
|
3,525
|
2,600
|
|||||||||
Total Non-Interest Income
|
14,329
|
15,937
|
14,110
|
|||||||||
Non-Interest Expense
|
||||||||||||
Salaries and Employee Benefits
|
36,446
|
33,658
|
31,635
|
|||||||||
Net Gain on Deferred Compensation Investments
|
2,129
|
3,366
|
1,687
|
|||||||||
Occupancy
|
2,690
|
2,513
|
2,565
|
|||||||||
Equipment
|
2,794
|
2,783
|
3,128
|
|||||||||
FDIC Insurance
|
1,048
|
981
|
968
|
|||||||||
Legal Fees
|
128
|
569
|
1,039
|
|||||||||
Termination Fee Related to Repurchase Agreement
|
-
|
-
|
1,657
|
|||||||||
Other
|
6,131
|
7,000
|
5,598
|
|||||||||
Total Non-Interest Expense
|
51,366
|
50,870
|
48,277
|
|||||||||
Income Before Income Taxes
|
40,496
|
38,282
|
37,334
|
|||||||||
Provision for Income Taxes
|
15,094
|
14,221
|
13,985
|
|||||||||
Net Income
|
$
|
25,402
|
$
|
24,061
|
$
|
23,349
|
||||||
Basic Earnings Per Common Share
|
$
|
32.64
|
$
|
30.93
|
$
|
29.99
|
Farmers & Merchants Bancorp
|
Consolidated Statements of Comprehensive Income
|
(in thousands)
|
Year Ended December 31,
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
Net Income
|
$
|
25,402
|
$
|
24,061
|
$
|
23,349
|
||||||
Other Comprehensive Income (Loss)
|
||||||||||||
Increase (Decrease) in Net Unrealized Gain (Loss) on Available-for-Sale Securities
|
8,719
|
(16,564
|
)
|
4,182
|
||||||||
Deferred Tax (Expense) Benefit Related to Unrealized Gains (Losses)
|
(3,666
|
)
|
6,965
|
(1,759
|
)
|
|||||||
Reclassification Adjustment for Realized (Gain) Loss on Available-for-Sale Securities Included in Net Income
|
(90
|
)
|
229
|
(158
|
)
|
|||||||
Tax Expense (Benefit) Related to Reclassification Adjustment
|
38
|
(97
|
)
|
67
|
||||||||
Change in Net Unrealized Gain (Loss) on Available-for-Sale Securities, Net of Tax
|
5,001
|
(9,467
|
)
|
2,332
|
||||||||
Total Other Comprehensive Income (Loss)
|
5,001
|
(9,467
|
)
|
2,332
|
||||||||
Comprehensive Income
|
$
|
30,403
|
$
|
14,594
|
$
|
25,681
|
Farmers & Merchants Bancorp
|
Consolidated Statements of Changes in Shareholders' Equity
|
(in thousands except share and per share data)
|
Common
Shares
|
Common
Stock
|
Additional
Paid-In
|
Retained
Earnings
|
Accumulated
Other
|
Total
Shareholders'
|
|||||||||||||||||||
Balance, January 1, 2012
|
779,424
|
$
|
8
|
$
|
75,590
|
$
|
109,081
|
$
|
4,667
|
$
|
189,346
|
|||||||||||||
Net Income
|
23,349
|
23,349
|
||||||||||||||||||||||
Cash Dividends Declared on Common Stock ($12.10 per share)
|
(9,418
|
)
|
(9,418
|
)
|
||||||||||||||||||||
Repurchase of Common Stock
|
(1,542
|
)
|
(576
|
)
|
(576
|
)
|
||||||||||||||||||
Change in Net Unrealized Gain on Securities Available-for-Sale
|
2,332
|
2,332
|
||||||||||||||||||||||
Balance, December 31, 2012
|
777,882
|
$
|
8
|
$
|
75,014
|
$
|
123,012
|
$
|
6,999
|
$
|
205,033
|
|||||||||||||
Net Income
|
24,061
|
24,061
|
||||||||||||||||||||||
Cash Dividends Declared on Common Stock ($12.50 per share)
|
(9,723
|
)
|
(9,723
|
)
|
||||||||||||||||||||
Repurchase of Common Stock
|
-
|
-
|
||||||||||||||||||||||
Change in Net Unrealized (Loss) on Securities Available-for-Sale
|
(9,467
|
)
|
(9,467
|
)
|
||||||||||||||||||||
Balance, December 31, 2013
|
777,882
|
$
|
8
|
$
|
75,014
|
$
|
137,350
|
$
|
(2,468
|
)
|
$
|
209,904
|
||||||||||||
Net Income
|
25,402
|
25,402
|
||||||||||||||||||||||
Cash Dividends Declared on Common Stock ($12.70 per share)
|
(9,919
|
)
|
(9,919
|
)
|
||||||||||||||||||||
Issuance of Common Stock
|
6,200
|
2,790
|
2,790
|
|||||||||||||||||||||
Change in Net Unrealized (Loss) on Securities Available-for-Sale
|
5,001
|
5,001
|
||||||||||||||||||||||
Balance, December 31, 2014
|
784,082
|
$
|
8
|
$
|
77,804
|
$
|
152,833
|
$
|
2,533
|
$
|
233,178
|
Farmers & Merchants Bancorp
|
Consolidated Statements of Cash Flows
|
(in thousands)
|
Year Ended December 31,
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
Operating Activities
|
||||||||||||
Net Income
|
$
|
25,402
|
$
|
24,061
|
$
|
23,349
|
||||||
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
|
||||||||||||
Provision for Credit Losses
|
1,175
|
425
|
1,850
|
|||||||||
Depreciation and Amortization
|
1,325
|
1,506
|
1,704
|
|||||||||
Provision for Deferred Income Taxes
|
6,436
|
(8,501
|
)
|
(2,548
|
)
|
|||||||
Net Amortization of Investment Security Premium & Discounts
|
1,659
|
3,068
|
3,944
|
|||||||||
Net Loss (Gain) on Investment Securities
|
(90
|
)
|
229
|
(158
|
)
|
|||||||
Net Gain on Sale of Property & Equipment
|
(22
|
)
|
(721
|
)
|
-
|
|||||||
Net Change in Operating Assets & Liabilities:
|
||||||||||||
Net Increase in Interest Receivable and Other Assets
|
(15,070
|
)
|
(3,719
|
)
|
(434
|
)
|
||||||
Net Increase in Interest Payable and Other Liabilities
|
4,822
|
10,851
|
4,016
|
|||||||||
Net Cash Provided by Operating Activities
|
25,637
|
27,199
|
31,723
|
|||||||||
Investing Activities
|
||||||||||||
Purchase of Investment Securities Available-for-Sale
|
(132,619
|
)
|
(221,745
|
)
|
(143,295
|
)
|
||||||
Proceeds from Sold, Matured, or Called Securities Available-for-Sale
|
177,324
|
208,962
|
205,374
|
|||||||||
Purchase of Investment Securities Held-to-Maturity
|
(17,692
|
)
|
(2,077
|
)
|
(10,739
|
)
|
||||||
Proceeds from Matured, or Called Securities Held-to-Maturity
|
22,628
|
8,443
|
5,419
|
|||||||||
Purchase of Life Insurance Contracts
|
-
|
-
|
(1,000
|
)
|
||||||||
Net Loans & Leases Paid, Originated or Acquired
|
(324,284
|
)
|
(142,225
|
)
|
(84,872
|
)
|
||||||
Principal Collected on Loans & Leases Previously Charged Off
|
228
|
523
|
398
|
|||||||||
Additions to Premises and Equipment
|
(4,274
|
)
|
(1,614
|
)
|
(547
|
)
|
||||||
Proceeds from Sale of Property & Equipment
|
37
|
843
|
-
|
|||||||||
Net Cash Used by Investing Activities
|
(278,652
|
)
|
(148,890
|
)
|
(29,262
|
)
|
||||||
Financing Activities
|
||||||||||||
Net Increase in Deposits
|
256,382
|
85,665
|
95,829
|
|||||||||
Net Change in Other Borrowings
|
-
|
-
|
(530
|
)
|
||||||||
Net Decrease in Securities Sold Under Agreement to Repurchase
|
-
|
-
|
(60,000
|
)
|
||||||||
Stock Repurchases
|
-
|
-
|
(576
|
)
|
||||||||
Cash Dividends
|
(9,919
|
)
|
(9,723
|
)
|
(9,418
|
)
|
||||||
Net Cash Provided by Financing Activities
|
246,463
|
75,942
|
25,305
|
|||||||||
(Decrease) Increase in Cash and Cash Equivalents
|
(6,552
|
)
|
(45,749
|
)
|
27,766
|
|||||||
Cash and Cash Equivalents at Beginning of Year
|
83,677
|
129,426
|
101,660
|
|||||||||
Cash and Cash Equivalents at End of Year
|
$
|
77,125
|
$
|
83,677
|
$
|
129,426
|
||||||
Supplementary Data
|
||||||||||||
Loans Transferred to Foreclosed Assets (ORE)
|
$
|
-
|
$
|
4,403
|
$
|
58
|
||||||
Cash Payments Made for Income Taxes
|
$
|
15,030
|
$
|
17,285
|
$
|
17,472
|
||||||
Issuance of Common Stock
|
$
|
2,790
|
$
|
-
|
$
|
-
|
||||||
Interest Paid
|
$
|
2,787
|
$
|
3,037
|
$
|
5,553
|
Amortized
|
Gross Unrealized
|
Fair/Book
|
||||||||||||||
December 31, 2014
|
Cost
|
Gains
|
Losses
|
Value
|
||||||||||||
Government Agency & Government-Sponsored Entities
|
$
|
78,051
|
$
|
61
|
$
|
3
|
$
|
78,109
|
||||||||
Mortgage Backed Securities
(1)
|
283,636
|
4,969
|
657
|
287,948
|
||||||||||||
Other
|
485
|
-
|
-
|
485
|
||||||||||||
Total
|
$
|
362,172
|
$
|
5,030
|
$
|
660
|
$
|
366,542
|
||||||||
Amortized
|
Gross Unrealized
|
Fair/Book
|
||||||||||||||
December 31, 2013
|
Cost
|
Gains
|
Losses
|
Value
|
||||||||||||
Government Agency & Government-Sponsored Entities
|
$
|
28,287
|
$
|
149
|
$
|
-
|
$
|
28,436
|
||||||||
Mortgage Backed Securities
(1)
|
329,469
|
3,026
|
7,566
|
324,929
|
||||||||||||
Corporate Securities
|
49,247
|
280
|
147
|
49,380
|
||||||||||||
Other
|
1,894
|
-
|
-
|
1,894
|
||||||||||||
Total
|
$
|
408,897
|
$
|
3,455
|
$
|
7,713
|
$
|
404,639
|
Book
|
Gross Unrealized
|
Fair
|
||||||||||||||
December 31, 2014
|
Value
|
Gains
|
Losses
|
Value
|
||||||||||||
Obligations of States and Political Subdivisions
|
$
|
61,716
|
$
|
782
|
$
|
10
|
$
|
62,488
|
||||||||
Other
|
2,147
|
-
|
-
|
2,147
|
||||||||||||
Total
|
$
|
63,863
|
$
|
782
|
$
|
10
|
$
|
64,635
|
||||||||
Book
|
Gross Unrealized
|
Fair
|
||||||||||||||
December 31, 2013
|
Value
|
Gains
|
Losses
|
Value
|
||||||||||||
Obligations of States and Political Subdivisions
|
$
|
65,685
|
$
|
812
|
$
|
627
|
$
|
65,870
|
||||||||
Mortgage Backed Securities
(1)
|
45
|
-
|
-
|
45
|
||||||||||||
Other
|
2,775
|
-
|
-
|
2,775
|
||||||||||||
Total
|
$
|
68,505
|
$
|
812
|
$
|
627
|
$
|
68,690
|
Available-for-Sale
|
Held-to-Maturity
|
|||||||||||||||
Amortized
|
Fair/Book
|
Book
|
Fair
|
|||||||||||||
December 31, 2014
|
Cost
|
Value
|
Value
|
Value
|
||||||||||||
Within One Year
|
$
|
77,462
|
$
|
77,470
|
$
|
2,747
|
$
|
2,748
|
||||||||
After One Year Through Five Years
|
1,074
|
1,124
|
16,426
|
16,633
|
||||||||||||
After Five Years Through Ten Years
|
-
|
-
|
9,845
|
9,931
|
||||||||||||
After Ten Years
|
-
|
-
|
34,845
|
35,323
|
||||||||||||
78,536
|
78,594
|
63,863
|
64,635
|
|||||||||||||
Investment Securities Not Due at a Single Maturity Date:
|
||||||||||||||||
Mortgage Backed Securities
|
283,636
|
287,948
|
-
|
-
|
||||||||||||
Total
|
$
|
362,172
|
$
|
366,542
|
$
|
63,863
|
$
|
64,635
|
Less Than 12 Months
|
12 Months or More
|
Total
|
||||||||||||||||||||||
December 31, 2014
|
Fair
Value
|
Unrealized
Loss
|
Fair
Value
|
Unrealized
Loss
|
Fair
Value
|
Unrealized
Loss
|
||||||||||||||||||
Securities Available-for-Sale
|
||||||||||||||||||||||||
Government Agency & Government-Sponsored Entities
|
$
|
66,980
|
$
|
3
|
$
|
-
|
$
|
-
|
$
|
66,980
|
$
|
3
|
||||||||||||
Mortgage Backed Securities
|
14,487
|
151
|
33,574
|
506
|
48,061
|
657
|
||||||||||||||||||
Total
|
$
|
81,467
|
$
|
154
|
$
|
33,574
|
$
|
506
|
$
|
115,041
|
$
|
660
|
||||||||||||
Securities Held-to-Maturity
|
||||||||||||||||||||||||
Obligations of States and Political Subdivisions
|
$
|
849
|
$
|
5
|
$
|
876
|
$
|
5
|
$
|
1,725
|
$
|
10
|
||||||||||||
Total
|
$
|
849
|
$
|
5
|
$
|
876
|
$
|
5
|
$
|
1,725
|
$
|
10
|
||||||||||||
Less Than 12 Months
|
12 Months or More
|
Total
|
||||||||||||||||||||||
December 31, 2013
|
Fair
Value
|
Unrealized
Loss
|
Fair
Value
|
Unrealized
Loss
|
Fair
Value
|
Unrealized
Loss
|
||||||||||||||||||
Securities Available-for-Sale
|
||||||||||||||||||||||||
Mortgage Backed Securities
|
$
|
195,736
|
$
|
7,566
|
$
|
-
|
$
|
-
|
$
|
195,736
|
$
|
7,566
|
||||||||||||
Corporate Securities
|
15,297
|
106
|
2,457
|
41
|
17,754
|
147
|
||||||||||||||||||
Total
|
$
|
211,033
|
$
|
7,672
|
$
|
2,457
|
$
|
41
|
$
|
213,490
|
$
|
7,713
|
||||||||||||
Securities Held-to-Maturity
|
||||||||||||||||||||||||
Obligations of States and Political Subdivisions
|
$
|
9,518
|
$
|
627
|
$
|
-
|
$
|
-
|
$
|
9,518
|
$
|
627
|
||||||||||||
Total
|
$
|
9,518
|
$
|
627
|
$
|
-
|
$
|
-
|
$
|
9,518
|
$
|
627
|
(in thousands)
|
Gross
Proceeds
|
Gross
Gains
|
Gross
Losses
|
|||||||||
2014
|
$
|
130,174
|
$
|
1,204
|
$
|
1,114
|
||||||
2013
|
$
|
81,390
|
$
|
1,208
|
$
|
1,437
|
||||||
2012
|
$
|
55,986
|
$
|
158
|
-
|
(in thousands)
|
2014
|
2013
|
||||||
Commercial Real Estate
|
$
|
495,316
|
$
|
411,037
|
||||
Agricultural Real Estate
|
357,207
|
328,264
|
||||||
Real Estate Construction
|
96,519
|
41,092
|
||||||
Residential 1st Mortgages
|
171,880
|
151,292
|
||||||
Home Equity Lines and Loans
|
33,017
|
35,477
|
||||||
Agricultural
|
281,963
|
256,414
|
||||||
Commercial
|
230,819
|
150,398
|
||||||
Consumer & Other
|
4,719
|
5,052
|
||||||
Leases
|
44,217
|
12,733
|
||||||
Total Gross Loans & Leases
|
1,715,657
|
1,391,759
|
||||||
Less: Unearned Income
|
3,413
|
3,523
|
||||||
Subtotal
|
1,712,244
|
1,388,236
|
||||||
Less: Allowance for Credit Losses
|
35,401
|
34,274
|
||||||
Loans & Leases, Net
|
$
|
1,676,843
|
$
|
1,353,962
|
December 31, 2014
|
Commercial Real Estate
|
Agricultural Real Estate
|
Real Estate Construction
|
Residential 1st Mortgages
|
Home Equity Lines & Loans
|
Agricultural
|
Commercial
|
Consumer & Other
|
Leases
|
Unallocated
|
Total
|
|||||||||||||||||||||||||||||||||
Year-To-Date Allowance for Credit Losses:
|
||||||||||||||||||||||||||||||||||||||||||||
Beginning Balance- January 1, 2014
|
$
|
5,178
|
$
|
3,576
|
$
|
654
|
$
|
1,108
|
$
|
2,767
|
$
|
12,205
|
$
|
5,697
|
$
|
176
|
$
|
639
|
$
|
2,274
|
$
|
34,274
|
||||||||||||||||||||||
Charge-Offs
|
-
|
-
|
-
|
(73
|
)
|
(70
|
)
|
-
|
(1
|
)
|
(132
|
)
|
-
|
-
|
(276
|
)
|
||||||||||||||||||||||||||||
Recoveries
|
11
|
-
|
-
|
-
|
58
|
8
|
86
|
65
|
-
|
-
|
228
|
|||||||||||||||||||||||||||||||||
Provision
|
2,653
|
609
|
1,015
|
(13
|
)
|
(329
|
)
|
(6,109
|
)
|
2,413
|
109
|
1,572
|
(745
|
)
|
1,175
|
|||||||||||||||||||||||||||||
Ending Balance- December 31, 2014
|
$
|
7,842
|
$
|
4,185
|
$
|
1,669
|
$
|
1,022
|
$
|
2,426
|
$
|
6,104
|
$
|
8,195
|
$
|
218
|
$
|
2,211
|
$
|
1,529
|
$
|
35,401
|
||||||||||||||||||||||
Ending Balance Individually Evaluated for Impairment
|
377
|
-
|
-
|
422
|
329
|
114
|
914
|
41
|
-
|
-
|
2,197
|
|||||||||||||||||||||||||||||||||
Ending Balance Collectively Evaluated for Impairment
|
7,465
|
4,185
|
1,669
|
600
|
2,097
|
5,990
|
7,281
|
177
|
2,211
|
1,529
|
33,204
|
|||||||||||||||||||||||||||||||||
Loans & Leases:
|
||||||||||||||||||||||||||||||||||||||||||||
Ending Balance
|
$
|
491,903
|
$
|
357,207
|
$
|
96,519
|
$
|
171,880
|
$
|
33,017
|
$
|
281,963
|
$
|
230,819
|
$
|
4,719
|
$
|
44,217
|
$
|
-
|
$
|
1,712,244
|
||||||||||||||||||||||
Ending Balance Individually Evaluated for Impairment
|
20,066
|
-
|
4,386
|
2,108
|
1,643
|
461
|
4,874
|
46
|
-
|
-
|
33,584
|
|||||||||||||||||||||||||||||||||
Ending Balance Collectively Evaluated for Impairment
|
471,837
|
357,207
|
92,133
|
169,772
|
31,374
|
281,502
|
225,945
|
4,673
|
44,217
|
-
|
1,678,660
|
December 31, 2013
|
Commercial Real Estate
|
Agricultural Real Estate
|
Real Estate Construction
|
Residential 1st Mortgages
|
Home Equity Lines & Loans
|
Agricultural
|
Commercial
|
Consumer & Other
|
Leases
|
Unallocated
|
Total
|
|||||||||||||||||||||||||||||||||
Year-To-Date Allowance for Credit Losses:
|
||||||||||||||||||||||||||||||||||||||||||||
Beginning Balance- January 1, 2013
|
$
|
6,464
|
$
|
2,877
|
$
|
986
|
$
|
1,219
|
$
|
3,235
|
$
|
10,437
|
$
|
7,963
|
$
|
182
|
$
|
-
|
$
|
854
|
$
|
34,217
|
||||||||||||||||||||||
Charge-Offs
|
(6
|
)
|
(575
|
)
|
-
|
(16
|
)
|
(91
|
)
|
(23
|
)
|
(60
|
)
|
(120
|
)
|
-
|
-
|
(891
|
)
|
|||||||||||||||||||||||||
Recoveries
|
-
|
-
|
-
|
-
|
115
|
42
|
312
|
54
|
-
|
-
|
523
|
|||||||||||||||||||||||||||||||||
Provision
|
(1,280
|
)
|
1,274
|
(332
|
)
|
(95
|
)
|
(492
|
)
|
1,749
|
(2,518
|
)
|
60
|
639
|
1,420
|
425
|
||||||||||||||||||||||||||||
Ending Balance- December 31, 2013
|
$
|
5,178
|
$
|
3,576
|
$
|
654
|
$
|
1,108
|
$
|
2,767
|
$
|
12,205
|
$
|
5,697
|
$
|
176
|
$
|
639
|
$
|
2,274
|
$
|
34,274
|
||||||||||||||||||||||
Ending Balance Individually Evaluated for Impairment
|
-
|
-
|
-
|
414
|
209
|
122
|
820
|
51
|
-
|
-
|
1,616
|
|||||||||||||||||||||||||||||||||
Ending Balance Collectively Evaluated for Impairment
|
5,178
|
3,576
|
654
|
694
|
2,558
|
12,083
|
4,877
|
125
|
639
|
2,274
|
32,658
|
|||||||||||||||||||||||||||||||||
Loans & Leases:
|
||||||||||||||||||||||||||||||||||||||||||||
Ending Balance
|
$
|
407,514
|
$
|
328,264
|
$
|
41,092
|
$
|
151,292
|
$
|
35,477
|
$
|
256,414
|
$
|
150,398
|
$
|
5,052
|
$
|
12,733
|
$
|
-
|
$
|
1,388,236
|
||||||||||||||||||||||
Ending Balance Individually Evaluated for Impairment
|
22,176
|
-
|
4,500
|
2,072
|
1,045
|
522
|
5,250
|
51
|
-
|
-
|
35,616
|
|||||||||||||||||||||||||||||||||
Ending Balance Collectively Evaluated for Impairment
|
385,338
|
328,264
|
36,592
|
149,220
|
34,432
|
255,892
|
145,148
|
5,001
|
12,733
|
-
|
1,352,620
|
December 31, 2014
|
Pass
|
Special Mention
|
Substandard
|
Total Loans
|
||||||||||||
Loans & Leases:
|
||||||||||||||||
Commercial Real Estate
|
$
|
483,146
|
$
|
8,651
|
$
|
106
|
$
|
491,903
|
||||||||
Agricultural Real Estate
|
357,207
|
-
|
-
|
357,207
|
||||||||||||
Real Estate Construction
|
94,887
|
1,632
|
-
|
96,519
|
||||||||||||
Residential 1st Mortgages
|
170,462
|
744
|
674
|
171,880
|
||||||||||||
Home Equity Lines and Loans
|
32,054
|
85
|
878
|
33,017
|
||||||||||||
Agricultural
|
281,232
|
679
|
52
|
281,963
|
||||||||||||
Commercial
|
211,036
|
18,143
|
1,640
|
230,819
|
||||||||||||
Consumer & Other
|
4,449
|
-
|
270
|
4,719
|
||||||||||||
Leases
|
44,217
|
-
|
-
|
44,217
|
||||||||||||
Total
|
$
|
1,678,690
|
$
|
29,934
|
$
|
3,620
|
$
|
1,712,244
|
December 31, 2013
|
Pass
|
Special Mention
|
Substandard
|
Total Loans
|
||||||||||||
Loans & Leases:
|
||||||||||||||||
Commercial Real Estate
|
$
|
398,488
|
$
|
7,979
|
$
|
1,047
|
$
|
407,514
|
||||||||
Agricultural Real Estate
|
325,926
|
2,338
|
-
|
328,264
|
||||||||||||
Real Estate Construction
|
39,460
|
1,632
|
-
|
41,092
|
||||||||||||
Residential 1st Mortgages
|
149,798
|
774
|
720
|
151,292
|
||||||||||||
Home Equity Lines and Loans
|
34,821
|
-
|
656
|
35,477
|
||||||||||||
Agricultural
|
255,443
|
889
|
82
|
256,414
|
||||||||||||
Commercial
|
132,008
|
15,426
|
2,964
|
150,398
|
||||||||||||
Consumer & Other
|
4,763
|
-
|
289
|
5,052
|
||||||||||||
Leases
|
12,733
|
-
|
-
|
12,733
|
||||||||||||
Total
|
$
|
1,353,440
|
$
|
29,038
|
$
|
5,758
|
$
|
1,388,236
|
December 31, 2014
|
30-59 Days
Past Due
|
60-89 Days
Past Due
|
90 Days and
Still Accruing
|
Nonaccrual
|
Total Past
Due
|
Current
|
Total
Loans & Leases
|
|||||||||||||||||||||
Loans & Leases:
|
||||||||||||||||||||||||||||
Commercial Real Estate
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
491,903
|
$
|
491,903
|
||||||||||||||
Agricultural Real Estate
|
-
|
-
|
-
|
-
|
-
|
357,207
|
357,207
|
|||||||||||||||||||||
Real Estate Construction
|
-
|
-
|
-
|
-
|
-
|
96,519
|
96,519
|
|||||||||||||||||||||
Residential 1st Mortgages
|
-
|
-
|
-
|
77
|
77
|
171,803
|
171,880
|
|||||||||||||||||||||
Home Equity Lines and Loans
|
79
|
-
|
-
|
576
|
655
|
32,362
|
33,017
|
|||||||||||||||||||||
Agricultural
|
-
|
-
|
-
|
18
|
18
|
281,945
|
281,963
|
|||||||||||||||||||||
Commercial
|
-
|
-
|
-
|
1,586
|
1,586
|
229,233
|
230,819
|
|||||||||||||||||||||
Consumer & Other
|
10
|
-
|
-
|
13
|
23
|
4,696
|
4,719
|
|||||||||||||||||||||
Leases
|
-
|
-
|
-
|
-
|
-
|
44,217
|
44,217
|
|||||||||||||||||||||
Total
|
$
|
89
|
$
|
-
|
$
|
-
|
$
|
2,270
|
$
|
2,359
|
$
|
1,709,885
|
$
|
1,712,244
|
December 31, 2013
|
30-89 Days
Past Due
|
60-89 Days
Past Due
|
90 Days and
Still Accruing
|
Nonaccrual
|
Total Past
Due
|
Current
|
Total
Loans
|
|||||||||||||||||||||
Loans & Leases:
|
||||||||||||||||||||||||||||
Commercial Real Estate
|
$
|
773
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
773
|
$
|
406,741
|
$
|
407,514
|
||||||||||||||
Agricultural Real Estate
|
607
|
-
|
-
|
-
|
607
|
327,657
|
328,264
|
|||||||||||||||||||||
Real Estate Construction
|
-
|
-
|
-
|
-
|
-
|
41,092
|
41,092
|
|||||||||||||||||||||
Residential 1st Mortgages
|
-
|
-
|
-
|
324
|
324
|
150,968
|
151,292
|
|||||||||||||||||||||
Home Equity Lines and Loans
|
-
|
52
|
-
|
406
|
458
|
35,019
|
35,477
|
|||||||||||||||||||||
Agricultural
|
-
|
-
|
-
|
35
|
35
|
256,379
|
256,414
|
|||||||||||||||||||||
Commercial
|
-
|
-
|
-
|
1,815
|
1,815
|
148,583
|
150,398
|
|||||||||||||||||||||
Consumer & Other
|
19
|
-
|
-
|
16
|
35
|
5,017
|
5,052
|
|||||||||||||||||||||
Leases
|
-
|
-
|
-
|
-
|
-
|
12,733
|
12,733
|
|||||||||||||||||||||
Total
|
$
|
1,399
|
$
|
52
|
$
|
-
|
$
|
2,596
|
$
|
4,047
|
$
|
1,384,189
|
$
|
1,388,236
|
December 31, 2014
|
Recorded
Investment
|
Unpaid
Principal
|
Related
Allowance
|
Average
Recorded
|
Interest
Income
|
|||||||||||||||
With no related allowance recorded:
|
||||||||||||||||||||
Commercial Real Estate
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
49
|
$
|
4
|
||||||||||
Agricultural Real Estate
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Real Estate Construction
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Residential 1st Mortgages
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Home Equity Lines and Loans
|
-
|
-
|
-
|
169
|
-
|
|||||||||||||||
Agricultural
|
-
|
-
|
-
|
15
|
-
|
|||||||||||||||
Commercial
|
-
|
-
|
-
|
1,620
|
54
|
|||||||||||||||
Consumer & Other
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
$
|
-
|
$
|
-
|
$
|
-
|
$
|
1,853
|
$
|
58
|
|||||||||||
With an allowance recorded:
|
||||||||||||||||||||
Commercial Real Estate
|
$
|
92
|
$
|
92
|
$
|
2
|
$
|
47
|
$
|
4
|
||||||||||
Agricultural Real Estate
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Real Estate Construction
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Residential 1st Mortgages
|
937
|
1,069
|
187
|
612
|
9
|
|||||||||||||||
Home Equity Lines and Loans
|
951
|
1,020
|
190
|
803
|
10
|
|||||||||||||||
Agricultural
|
461
|
473
|
114
|
473
|
28
|
|||||||||||||||
Commercial
|
4,742
|
4,813
|
910
|
3,182
|
54
|
|||||||||||||||
Consumer & Other
|
46
|
51
|
41
|
46
|
2
|
|||||||||||||||
$
|
7,229
|
$
|
7,518
|
$
|
1,444
|
$
|
5,163
|
$
|
107
|
|||||||||||
Total
|
$
|
7,229
|
$
|
7,518
|
$
|
1,444
|
$
|
7,016
|
$
|
165
|
December 31, 2013
|
Recorded
Investment
|
Unpaid
Principal
|
Related
Allowance
|
Average
Recorded
|
Interest
Income
|
|||||||||||||||
With no related allowance recorded:
|
||||||||||||||||||||
Commercial Real Estate
|
$
|
102
|
$
|
101
|
$
|
-
|
$
|
865
|
$
|
8
|
||||||||||
Agricultural Real Estate
|
-
|
-
|
-
|
2,185
|
-
|
|||||||||||||||
Real Estate Construction
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Residential 1st Mortgages
|
-
|
-
|
-
|
450
|
11
|
|||||||||||||||
Home Equity Lines and Loans
|
-
|
-
|
-
|
228
|
5
|
|||||||||||||||
Agricultural
|
35
|
43
|
-
|
586
|
-
|
|||||||||||||||
Commercial
|
3,474
|
3,532
|
-
|
939
|
13
|
|||||||||||||||
$
|
3,611
|
$
|
3,676
|
$
|
-
|
$
|
5,253
|
$
|
37
|
|||||||||||
With an allowance recorded:
|
||||||||||||||||||||
Commercial Real Estate
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
2
|
$
|
-
|
||||||||||
Agricultural Real Estate
|
-
|
-
|
-
|
823
|
-
|
|||||||||||||||
Real Estate Construction
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Residential 1st Mortgages
|
769
|
826
|
154
|
254
|
6
|
|||||||||||||||
Home Equity Lines and Loans
|
689
|
821
|
138
|
332
|
3
|
|||||||||||||||
Agricultural
|
488
|
488
|
122
|
1,002
|
31
|
|||||||||||||||
Commercial
|
1,641
|
1,657
|
820
|
1,072
|
6
|
|||||||||||||||
Consumer & Other
|
50
|
53
|
50
|
126
|
3
|
|||||||||||||||
$
|
3,637
|
$
|
3,845
|
$
|
1,284
|
$
|
3,611
|
$
|
49
|
|||||||||||
Total
|
$
|
7,248
|
$
|
7,521
|
$
|
1,284
|
$
|
8,864
|
$
|
86
|
December 31, 2014
|
||||||||||||
Troubled Debt Restructurings
|
Number of Loans
|
Pre-Modification
Outstanding
Recorded
Investment
|
Post-Modification
Outstanding
Recorded
Investment
|
|||||||||
Residential 1st Mortgages
|
5
|
$
|
857
|
$
|
804
|
|||||||
Home Equity Lines and Loans
|
3
|
98
|
89
|
|||||||||
Agricultural
|
1
|
32
|
32
|
|||||||||
Commercial
|
1
|
18
|
18
|
|||||||||
Consumer & Other
|
1
|
7
|
7
|
|||||||||
Total
|
11
|
$
|
1,012
|
$
|
950
|
December 31, 2013
|
||||||||||||
Troubled Debt Restructurings
|
Number of Loans
|
Pre-Modification
Outstanding
Recorded
Investment
|
Post-Modification
Outstanding
Recorded
Investment
|
|||||||||
Residential 1st Mortgages
|
4
|
$
|
306
|
$
|
290
|
|||||||
Home Equity Lines and Loans
|
4
|
414
|
387
|
|||||||||
Commercial
|
4
|
5,016
|
5,016
|
|||||||||
Total
|
12
|
$
|
5,736
|
$
|
5,693
|
(in thousands)
|
2014
|
2013
|
||||||
Land and Buildings
|
$
|
33,527
|
$
|
33,354
|
||||
Furniture, Fixtures, and Equipment
|
20,244
|
16,770
|
||||||
Leasehold Improvements
|
1,763
|
2,060
|
||||||
Subtotal
|
55,534
|
52,184
|
||||||
Less: Accumulated Depreciation and Amortization
|
29,713
|
29,297
|
||||||
Total
|
$
|
25,821
|
$
|
22,887
|
(in thousands)
|
2014
|
2013
|
||||||
Balance
|
$
|
239,649
|
$
|
206,189
|
(in thousands)
|
Scheduled
Maturities
|
|||
2015
|
$
|
410,487
|
||
2016
|
34,330
|
|||
2017
|
20,355
|
|||
2018
|
2,021
|
|||
2019
|
1,090
|
|||
Total
|
$
|
468,283
|
(in thousands)
|
2014
|
2013
|
2012
|
|||||||||
Current
|
||||||||||||
Federal
|
$
|
7,941
|
$
|
11,497
|
$
|
12,252
|
||||||
State
|
4,345
|
4,357
|
4,281
|
|||||||||
Total Current
|
12,286
|
15,854
|
16,533
|
|||||||||
Deferred
|
||||||||||||
Federal
|
3,116
|
(998
|
)
|
(2,041
|
)
|
|||||||
State
|
(308
|
)
|
(635
|
)
|
(507
|
)
|
||||||
Total Deferred
|
2,808
|
(1,633
|
)
|
(2,548
|
)
|
|||||||
Total Provision for Taxes
|
$
|
15,094
|
$
|
14,221
|
$
|
13,985
|
2014
|
2013
|
2012
|
||||||||||||||||||||||
(in thousands)
|
Amount
|
Rate
|
Amount
|
Rate
|
Amount
|
Rate
|
||||||||||||||||||
Tax Provision at Federal Statutory Rate
|
$
|
14,174
|
35.0
|
%
|
$
|
13,399
|
35.0
|
%
|
$
|
13,067
|
35.0
|
%
|
||||||||||||
Interest on Obligations of States and Political
|
||||||||||||||||||||||||
Subdivisions exempt from Federal Taxation
|
(805
|
)
|
(2.0
|
%)
|
(894
|
)
|
(2.3
|
%)
|
(917
|
)
|
(2.5
|
%)
|
||||||||||||
State and Local Income Taxes, Net of Federal Income Tax Benefit
|
2,624
|
6.5
|
%
|
2,419
|
6.3
|
%
|
2,453
|
6.6
|
%
|
|||||||||||||||
Bank Owned Life Insurance
|
(696
|
)
|
(1.7
|
%)
|
(702
|
)
|
(1.8
|
%)
|
(675
|
)
|
(1.8
|
%)
|
||||||||||||
Low-Income Housing Tax Credit
|
(126
|
)
|
(0.3
|
%)
|
(129
|
)
|
(0.3
|
%)
|
-
|
-
|
||||||||||||||
Other, Net
|
(77
|
)
|
(0.2
|
%)
|
128
|
0.3
|
%
|
57
|
0.2
|
%
|
||||||||||||||
Total Provision for Taxes
|
$
|
15,094
|
37.3
|
%
|
$
|
14,221
|
37.1
|
%
|
$
|
13,985
|
37.5
|
%
|
(in thousands)
|
2014
|
2013
|
||||||
Deferred Tax Assets
|
|
|
||||||
Allowance for Credit Losses
|
$
|
14,944
|
$
|
14,470
|
||||
Accrued Liabilities
|
8,184
|
7,723
|
||||||
Deferred Compensation
|
10,006
|
8,859
|
||||||
State Franchise Tax
|
1,521
|
1,525
|
||||||
Interest on Non-Accrual Loans
|
2
|
15
|
||||||
ORE Writedown and Holding Costs
|
1,724
|
1,713
|
||||||
Unrealized Loss on Securities Available-for-Sale
|
-
|
1,790
|
||||||
Low-Income Housing Investment
|
58
|
21
|
||||||
Total Deferred Tax Assets
|
$
|
36,439
|
$
|
36,116
|
||||
Deferred Tax Liabilities
|
||||||||
Premises and Equipment
|
(286
|
)
|
(213
|
)
|
||||
Securities Accretion
|
(298
|
)
|
(966
|
)
|
||||
Unrealized Gain on Securities Available-for-Sale
|
(1,838
|
)
|
-
|
|||||
Leasing Activities
|
(7,018
|
)
|
(1,501
|
)
|
||||
Other
|
(786
|
)
|
(787
|
)
|
||||
Total Deferred Tax Liabilities
|
(10,226
|
)
|
(3,467
|
)
|
||||
Net Deferred Tax Assets
|
$
|
26,213
|
$
|
32,649
|
(in thousands)
|
Actual
|
Regulatory
Capital
Requirements
|
Well Capitalized
Under Prompt
Corrective Action
|
|||||||||||||||||||||
December 31, 2014
|
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
||||||||||||||||||
Total Bank Capital to Risk Weighted Assets
|
$
|
266,203
|
12.92
|
%
|
$
|
164,887
|
8.0
|
%
|
$
|
206,109
|
10.0
|
%
|
||||||||||||
Total Consolidated Capital to Risk Weighted Assets
|
$
|
266,533
|
12.93
|
%
|
$
|
164,911
|
8.0
|
%
|
N/
|
A
|
N/
|
A
|
||||||||||||
Tier 1 Bank Capital to Risk Weighted Assets
|
$
|
240,319
|
11.66
|
%
|
$
|
82,444
|
4.0
|
%
|
$
|
123,665
|
6.0
|
%
|
||||||||||||
Tier 1 Consolidated Capital to Risk Weighted Assets
|
$
|
240,645
|
11.67
|
%
|
$
|
82,456
|
4.0
|
%
|
N/
|
A
|
N/
|
A
|
||||||||||||
Tier 1 Bank Capital to Average Assets
|
$
|
240,319
|
10.56
|
%
|
$
|
91,062
|
4.0
|
%
|
$
|
113,827
|
5.0
|
%
|
||||||||||||
Tier 1 Consolidated Capital to Average Assets
|
$
|
240,645
|
10.55
|
%
|
$
|
91,219
|
4.0
|
%
|
N/
|
A
|
N/
|
A
|
(in thousands)
|
Actual
|
Regulatory
Capital
Requirements
|
Well Capitalized
Under Prompt
Corrective Action
|
|||||||||||||||||||||
December 31, 2013
|
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
||||||||||||||||||
Total Bank Capital to Risk Weighted Assets
|
$
|
244,087
|
13.98
|
%
|
$
|
139,674
|
8.0
|
%
|
$
|
174,593
|
10.0
|
%
|
||||||||||||
Total Consolidated Capital to Risk Weighted Assets
|
$
|
244,354
|
13.99
|
%
|
$
|
139,689
|
8.0
|
%
|
N/
|
A
|
N/
|
A
|
||||||||||||
Tier 1 Bank Capital to Risk Weighted Assets
|
$
|
222,108
|
12.72
|
%
|
$
|
69,837
|
4.0
|
%
|
$
|
104,756
|
6.0
|
%
|
||||||||||||
Tier 1 Consolidated Capital to Risk Weighted Assets
|
$
|
222,372
|
12.74
|
%
|
$
|
69,845
|
4.0
|
%
|
N/
|
A
|
N/
|
A
|
||||||||||||
Tier 1 Bank Capital to Average Assets
|
$
|
222,108
|
11.02
|
%
|
$
|
80,633
|
4.0
|
%
|
$
|
100,791
|
5.0
|
%
|
||||||||||||
Tier 1 Consolidated Capital to Average Assets
|
$
|
222,372
|
11.01
|
%
|
$
|
80,755
|
4.0
|
%
|
N/
|
A
|
N/
|
A
|
(
net income in thousands
)
|
2014
|
2013
|
2012
|
|||||||||
Net Income
|
$
|
25,402
|
$
|
24,061
|
$
|
23,349
|
||||||
Weighted Average Number of Common Shares Outstanding
|
778,358
|
777,882
|
778,648
|
|||||||||
Basic Earnings Per Common Share
|
$
|
32.64
|
$
|
30.93
|
$
|
29.99
|
Fair Value Measurements
|
||||||||||||||||
At December 31, 2014, Using
|
||||||||||||||||
Fair Value
|
Quoted Prices in Active Markets for Identical Assets
|
Other Observable Inputs
|
Significant Unobservable Inputs
|
|||||||||||||
(in thousands)
|
Total
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
||||||||||||
Available-for-Sale Securities:
|
||||||||||||||||
Government Agency & Government-Sponsored Entities
|
$
|
78,109
|
$
|
10,005
|
$
|
68,104
|
$
|
-
|
||||||||
Mortgage Backed Securities
|
287,948
|
-
|
287,948
|
-
|
||||||||||||
Other
|
485
|
175
|
310
|
-
|
||||||||||||
Total Assets Measured at Fair Value On a Recurring Basis
|
$
|
366,542
|
$
|
10,180
|
$
|
356,362
|
$
|
-
|
||||||||
Fair Value Measurements
|
||||||||||||||||
At December 31, 2013, Using
|
||||||||||||||||
Fair Value
|
Quoted Prices in Active Markets for Identical Assets
|
Other Observable Inputs
|
Significant Unobservable Inputs
|
|||||||||||||
(in thousands)
|
Total
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
||||||||||||
Available-for-Sale Securities:
|
||||||||||||||||
Government Agency & Government-Sponsored Entities
|
$
|
28,436
|
$
|
23,394
|
$
|
5,042
|
$
|
-
|
||||||||
Mortgage Backed Securities
|
324,929
|
-
|
324,929
|
-
|
||||||||||||
Corporate Securities
|
49,380
|
8,191
|
41,189
|
-
|
||||||||||||
Other
|
1,894
|
1,584
|
310
|
-
|
||||||||||||
Total Assets Measured at Fair Value On a Recurring Basis
|
$
|
404,639
|
$
|
33,169
|
$
|
371,470
|
$
|
-
|
(in thousands)
|
2014
|
2013
|
||||||
Balance at Beginning of Period
|
$
|
-
|
$
|
5,665
|
||||
Total Realized and Unrealized Gains/(Losses) Included in Income
|
-
|
-
|
||||||
Total Unrealized Gains/(Losses) Included in Other Comprehensive Income
|
-
|
-
|
||||||
Purchase of Securities
|
-
|
-
|
||||||
Sales, Maturities, and Calls of Securities
|
-
|
(84
|
)
|
|||||
Net Transfers out of Available for Sale Securities
|
-
|
(5,581
|
)
|
|||||
Balance at End of Period
|
$ |
-
|
$ |
-
|
Fair Value Measurements
|
||||||||||||||||
At December 31, 2014, Using
|
||||||||||||||||
Fair Value
|
Quoted Prices in Active Markets for Identical Assets
|
Other Observable Inputs
|
Significant Unobservable Inputs
|
|||||||||||||
(in thousands)
|
Total
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
||||||||||||
Impaired Loans:
|
||||||||||||||||
Commercial Real Estate
|
$
|
90
|
$
|
-
|
$
|
-
|
$
|
90
|
||||||||
Residential 1st Mortgage
|
748
|
-
|
-
|
748
|
||||||||||||
Home Equity Lines and Loans
|
759
|
-
|
-
|
759
|
||||||||||||
Agricultural
|
346
|
-
|
-
|
346
|
||||||||||||
Commercial
|
3,832
|
-
|
-
|
3,832
|
||||||||||||
Consumer
|
6
|
-
|
-
|
6
|
||||||||||||
Total Impaired Loans
|
5,781
|
-
|
-
|
5,781
|
||||||||||||
Other Real Estate:
|
||||||||||||||||
Real Estate Construction
|
2,441
|
-
|
-
|
2,441
|
||||||||||||
Agricultural Real Estate
|
858
|
-
|
-
|
858
|
||||||||||||
Total Other Real Estate
|
3,299
|
-
|
-
|
3,299
|
||||||||||||
Total Assets Measured at Fair Value On a Non-Recurring Basis
|
$
|
9,080
|
$
|
-
|
$
|
-
|
$
|
9,080
|
Fair Value Measurements
|
||||||||||||||||
At December 31, 2013, Using
|
||||||||||||||||
Fair Value
|
Quoted Prices in Active Markets for Identical Assets
|
Other Observable Inputs
|
Significant Unobservable Inputs
|
|||||||||||||
(in thousands)
|
Total
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
||||||||||||
Impaired Loans:
|
||||||||||||||||
Residential 1st Mortgage
|
$
|
614
|
$
|
-
|
$
|
-
|
$
|
614
|
||||||||
Home Equity Lines and Loans
|
551
|
-
|
-
|
551
|
||||||||||||
Agricultural
|
366
|
-
|
-
|
366
|
||||||||||||
Commercial
|
820
|
-
|
-
|
820
|
||||||||||||
Total Impaired Loans
|
2,351
|
-
|
-
|
2,351
|
||||||||||||
Other Real Estate:
|
||||||||||||||||
Real Estate Construction
|
2,399
|
-
|
-
|
2,399
|
||||||||||||
Agricultural Real Estate
|
2,212
|
-
|
-
|
2,212
|
||||||||||||
Total Other Real Estate
|
4,611
|
-
|
-
|
4,611
|
||||||||||||
Total Assets Measured at Fair Value On a Non-Recurring Basis
|
$
|
6,962
|
$
|
-
|
$
|
-
|
$
|
6,962
|
(in thousands)
|
Fair Value
|
Valuation Technique
|
Unobservable Inputs
|
Range, Weighted Avg.
|
||||||
Impaired Loans:
|
||||||||||
Commercial Real Estate
|
$
|
90
|
Sales Comparison Approach
|
Adjustment for Difference Between Comparable Sales
|
1% -1%, 1
|
%
|
||||
Residential 1st Mortgages
|
$
|
748
|
Sales Comparison Approach
|
Adjustment for Difference Between Comparable Sales
|
11% -21%, 17
|
%
|
||||
Home Equity Lines and Loans
|
$
|
759
|
Sales Comparison Approach
|
Adjustment for Difference Between Comparable Sales
|
1% - 14%, 11
|
%
|
||||
Agricultural
|
$
|
331
|
Income Approach
|
Capitalization Rate
|
14% - 14%, 14
|
%
|
||||
Agricultural
|
$
|
15
|
Sales Comparison Approach
|
Adjustment for Difference Between Comparable Sales
|
1% -1%, 1
|
%
|
||||
Commercial
|
$
|
3,832
|
Sales Comparison Approach
|
Adjustment for Difference Between Comparable Sales
|
1% - 13%, 4
|
%
|
||||
Consumer
|
$
|
6
|
Sales Comparison Approach
|
Adjustment for Difference Between Comparable Sales
|
8% - 8%, 8
|
%
|
||||
Other Real Estate:
|
||||||||||
Real Estate Construction
|
$
|
2,441
|
Sales Comparison Approach
|
Adjustment for Difference Between Comparable Sales
|
10% - 10%, 10
|
%
|
||||
Agricultural Real Estate
|
$
|
858
|
Sales Comparison Approach
|
Adjustment for Difference Between Comparable Sales
|
10% - 10%, 10
|
%
|
Fair Value of Financial Instruments Using
|
||||||||||||||||||||
December 31, 2014
(in thousands)
|
Carrying
Amount
|
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
|
Other
Observable
Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
Total
Estimated
Fair Value
|
|||||||||||||||
Assets:
|
||||||||||||||||||||
Cash and Cash Equivalents
|
$
|
77,125
|
$
|
77,125
|
$
|
-
|
$
|
-
|
$
|
77,125
|
||||||||||
Investment Securities Available-for-Sale:
|
||||||||||||||||||||
Government Agency & Government-Sponsored Entities
|
78,109
|
10,005
|
68,104
|
-
|
78,109
|
|||||||||||||||
Mortgage Backed Securities
|
287,948
|
-
|
287,948
|
-
|
287,948
|
|||||||||||||||
Other
|
485
|
175
|
310
|
-
|
485
|
|||||||||||||||
Total Investment Securities Available-for-Sale
|
366,542
|
10,180
|
356,362
|
-
|
366,542
|
|||||||||||||||
Investment Securities Held-to-Maturity:
|
||||||||||||||||||||
Obligations of States and Political Subdivisions
|
61,716
|
-
|
49,085
|
13,403
|
62,488
|
|||||||||||||||
Other
|
2,147
|
-
|
2,147
|
-
|
2,147
|
|||||||||||||||
Total Investment Securities Held-to-Maturity
|
63,863
|
-
|
51,232
|
13,403
|
64,635
|
|||||||||||||||
FHLB Stock
|
7,677
|
N/
|
A
|
N/
|
A
|
N/
|
A
|
N/
|
A
|
|||||||||||
Loans & Leases, Net of Deferred Fees & Allowance:
|
||||||||||||||||||||
Commercial Real Estate
|
484,061
|
-
|
-
|
481,037
|
481,037
|
|||||||||||||||
Agricultural Real Estate
|
353,022
|
-
|
-
|
353,288
|
353,288
|
|||||||||||||||
Real Estate Construction
|
94,850
|
-
|
-
|
95,022
|
95,022
|
|||||||||||||||
Residential 1st Mortgages
|
170,858
|
-
|
-
|
173,916
|
173,916
|
|||||||||||||||
Home Equity Lines and Loans
|
30,591
|
-
|
-
|
32,456
|
32,456
|
|||||||||||||||
Agricultural
|
275,859
|
-
|
-
|
274,195
|
274,195
|
|||||||||||||||
Commercial
|
222,624
|
-
|
-
|
222,175
|
222,175
|
|||||||||||||||
Consumer & Other
|
4,501
|
-
|
-
|
4,535
|
4,535
|
|||||||||||||||
Leases
|
42,006
|
-
|
-
|
40,298
|
40,298
|
|||||||||||||||
Unallocated Allowance
|
(1,529
|
)
|
-
|
-
|
(1,529
|
)
|
(1,529
|
)
|
||||||||||||
Total Loans & Leases, Net of Deferred Fees & Allowance
|
1,676,843
|
-
|
-
|
1,675,393
|
1,675,393
|
|||||||||||||||
Accrued Interest Receivable
|
7,797
|
-
|
7,797
|
-
|
7,797
|
|||||||||||||||
Liabilities:
|
||||||||||||||||||||
Deposits:
|
||||||||||||||||||||
Demand
|
610,133
|
610,133
|
-
|
-
|
610,133
|
|||||||||||||||
Interest Bearing Transaction
|
341,397
|
341,397
|
-
|
-
|
341,397
|
|||||||||||||||
Savings and Money Market
|
644,260
|
644,260
|
-
|
-
|
644,260
|
|||||||||||||||
Time
|
468,283
|
-
|
468,161
|
-
|
468,161
|
|||||||||||||||
Total Deposits
|
2,064,073
|
1,595,790
|
468,161
|
-
|
2,063,951
|
|||||||||||||||
Subordinated Debentures
|
10,310
|
-
|
6,227
|
-
|
6,227
|
|||||||||||||||
Accrued Interest Payable
|
378
|
-
|
378
|
-
|
378
|
Fair Value of Financial Instruments Using
|
||||||||||||||||||||
December 31, 2013
(in thousands)
|
Carrying Amount
|
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
|
Other Observable Inputs
(Level 2)
|
Significant Unobservable Inputs
(Level 3)
|
Total Estimated
Fair Value
|
|||||||||||||||
Assets:
|
||||||||||||||||||||
Cash and Cash Equivalents
|
$
|
83,677
|
$
|
83,677
|
$
|
-
|
$
|
-
|
$
|
83,677
|
||||||||||
Investment Securities Available-for-Sale:
|
||||||||||||||||||||
Government Agency & Government-Sponsored Entities
|
28,436
|
23,394
|
5,042
|
-
|
28,436
|
|||||||||||||||
Mortgage Backed Securities
|
324,929
|
-
|
324,929
|
-
|
324,929
|
|||||||||||||||
Corporate Securities
|
49,380
|
8,191
|
41,189
|
-
|
49,380
|
|||||||||||||||
Other
|
1,894
|
1,584
|
310
|
-
|
1,894
|
|||||||||||||||
Total Investment Securities Available-for-Sale
|
404,639
|
33,169
|
371,470
|
-
|
404,639
|
|||||||||||||||
Investment Securities Held-to-Maturity:
|
||||||||||||||||||||
Obligations of States and Political Subdivisions
|
65,685
|
-
|
51,563
|
14,307
|
65,870
|
|||||||||||||||
Mortgage Backed Securities
|
45
|
-
|
45
|
-
|
45
|
|||||||||||||||
Other
|
2,775
|
-
|
2,775
|
-
|
2,775
|
|||||||||||||||
Total Investment Securities Held-to-Maturity
|
68,505
|
-
|
54,383
|
14,307
|
68,690
|
|||||||||||||||
FHLB Stock
|
7,187
|
N/
|
A
|
N/
|
A
|
N/
|
A
|
N/
|
A
|
|||||||||||
Loans & Leases Net of Deferred Fees & Allowance:
|
||||||||||||||||||||
Commercial Real Estate
|
402,336
|
-
|
-
|
403,790
|
403,790
|
|||||||||||||||
Agricultural Real Estate
|
324,688
|
-
|
-
|
328,704
|
328,704
|
|||||||||||||||
Real Estate Construction
|
40,438
|
-
|
-
|
40,800
|
40,800
|
|||||||||||||||
Residential 1st Mortgages
|
150,184
|
-
|
-
|
153,352
|
153,352
|
|||||||||||||||
Home Equity Lines and Loans
|
32,710
|
-
|
-
|
35,250
|
35,250
|
|||||||||||||||
Agricultural
|
244,209
|
-
|
-
|
242,950
|
242,950
|
|||||||||||||||
Commercial
|
144,701
|
-
|
-
|
145,131
|
145,131
|
|||||||||||||||
Consumer & Other
|
4,876
|
-
|
-
|
4,912
|
4,912
|
|||||||||||||||
Unallocated Allowance
|
12,094
|
-
|
-
|
11,851
|
11,851
|
|||||||||||||||
Total Loans & Leases Net of Deferred Fees & Allowance
|
(2,274
|
)
|
-
|
-
|
(2,274
|
)
|
(2,274
|
)
|
||||||||||||
Accrued Interest Receivable
|
1,353,962
|
-
|
-
|
1,364,466
|
1,364,466
|
|||||||||||||||
6,941
|
-
|
6,941
|
-
|
6,941
|
||||||||||||||||
Liabilities:
|
||||||||||||||||||||
Deposits:
|
||||||||||||||||||||
Demand
|
495,963
|
495,963
|
-
|
-
|
495,963
|
|||||||||||||||
Interest Bearing Transaction
|
291,795
|
291,795
|
-
|
-
|
291,795
|
|||||||||||||||
Savings and Money Market
|
589,511
|
589,511
|
-
|
-
|
589,511
|
|||||||||||||||
Time
|
430,422
|
-
|
430,752
|
-
|
430,752
|
|||||||||||||||
Total Deposits
|
1,807,691
|
1,377,269
|
430,752
|
-
|
1,808,021
|
|||||||||||||||
Subordinated Debentures
|
10,310
|
-
|
6,224
|
-
|
6,224
|
|||||||||||||||
Accrued Interest Payable
|
352
|
-
|
352
|
-
|
352
|
(in thousands)
|
December 31, 2014
|
December 31, 2013
|
||||||
Commitments to Extend Credit
|
$
|
539,288
|
$
|
445,294
|
||||
Letters of Credit
|
9,734
|
7,393
|
||||||
Performance Guarantees Under Interest Rate Swap Contracts Entered Into Between Our Borrowing Customers and Third Parties
|
2,042
|
-
|
(in thousands)
|
2014
|
2013
|
||||||
Cash
|
$
|
363
|
$
|
416
|
||||
Investment in Farmers & Merchants Bank of Central California
|
242,852
|
219,640
|
||||||
Investment Securities
|
410
|
410
|
||||||
Other Assets
|
201
|
87
|
||||||
Total Assets
|
$
|
243,826
|
$
|
220,553
|
||||
Subordinated Debentures
|
$
|
10,310
|
$
|
10,310
|
||||
Liabilities
|
338
|
339
|
||||||
Shareholders' Equity
|
233,178
|
209,904
|
||||||
Total Liabilities and Shareholders' Equity
|
$
|
243,826
|
$
|
220,553
|
Year Ended December 31,
|
||||||||||||
(in thousands)
|
2014
|
2013
|
2012
|
|||||||||
Equity in Undistributed Earnings in Farmers & Merchants Bank of Central California
|
$
|
18,211
|
$
|
14,352
|
$
|
13,247
|
||||||
Dividends from Subsidiary
|
8,000
|
10,450
|
10,900
|
|||||||||
Interest Income
|
10
|
10
|
10
|
|||||||||
Other Expenses, Net
|
(1,406
|
)
|
(1,288
|
)
|
(1,386
|
)
|
||||||
Tax Benefit
|
587
|
537
|
578
|
|||||||||
Net Income
|
$
|
25,402
|
$
|
24,061
|
$
|
23,349
|
Year Ended December 31,
|
||||||||||||
(in thousands)
|
2014
|
2013
|
2012
|
|||||||||
Cash Flows from Operating Activities:
|
||||||||||||
Net Income
|
$
|
25,402
|
$
|
24,061
|
$
|
23,349
|
||||||
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
|
||||||||||||
Equity in Undistributed Net Earnings from Subsidiary
|
(18,211
|
)
|
(14,352
|
)
|
(13,247
|
)
|
||||||
Net Decrease (Increase) in Other Assets
|
(114
|
)
|
38
|
(216
|
)
|
|||||||
Net (Decrease) Increase in Liabilities
|
(1
|
)
|
180
|
(78
|
)
|
|||||||
Net Cash Provided by Operating Activities
|
7,076
|
9,927
|
9,808
|
|||||||||
Investing Activities:
|
||||||||||||
Securities Purchased
|
-
|
-
|
-
|
|||||||||
Securities Sold or Matured
|
-
|
-
|
-
|
|||||||||
Net Cash Used by Investing Activities
|
-
|
-
|
-
|
|||||||||
Financing Activities:
|
||||||||||||
Stock Repurchased
|
-
|
-
|
(576
|
)
|
||||||||
Issuance of Common Stock
|
2,790
|
-
|
-
|
|||||||||
Cash Dividends
|
(9,919
|
)
|
(9,723
|
)
|
(9,418
|
)
|
||||||
Net Cash Used by Financing Activities
|
(7,129
|
)
|
(9,723
|
)
|
(9,994
|
)
|
||||||
(Decrease) Increase in Cash and Cash Equivalents
|
(53
|
)
|
204
|
(186
|
)
|
|||||||
Cash and Cash Equivalents at Beginning of Year
|
416
|
212
|
398
|
|||||||||
Cash and Cash Equivalents at End of Year
|
$
|
363
|
$
|
416
|
$
|
212
|
Name and Position(s)
|
Age
|
Principal Occupation during the Past Five Years
|
Kent A. Steinwert
Chairman, President
& Chief Executive Officer
of the Company and Bank
|
62
|
Chairman, President & Chief Executive Officer of the Company and Bank since May 1, 2010.
President & Chief Executive Officer of the Company and Bank up to April 30, 2010.
|
Deborah E. Skinner
Executive Vice President & Chief
Administrative Officer of the Bank
|
52
|
Executive Vice President & Chief Administrative Officer of the Bank.
|
Stephen W. Haley
Executive Vice President
& Chief Financial Officer &
Secretary of the Company and Bank
|
61
|
Executive Vice President & Chief Financial Officer of the Company and Bank.
|
Kenneth W. Smith
Executive Vice President
& Senior Credit Officer
of the Company and Bank
|
55
|
Executive Vice President & Senior Credit Officer of the Company and Bank since August 9, 2011.
Executive Vice President & Head of Business Markets of the Bank up to August 8, 2011.
|
James P. Daugherty
Executive Vice President,
Wholesale Banking Division
of the Bank
|
63
|
Executive Vice President, Wholesale Banking Division since November 15, 2013.
Senior Vice President, Commercial Credit Administrator of the Bank up to November 14, 2013.
|
Jay J. Colombini
Executive Vice President,
Wholesale Banking Division
Of the Bank
|
52
|
Executive Vice President, Wholesale Banking Division since November 15, 2013.
Senior Vice President and Manager – Lodi Main Branch from August 1, 2012 through November 14, 2013.
Senior Vice President and Manager – Linden Branch up to July 31, 2012
|
Item 12.
|
Exhibit
Number
|
Description
|
3.1
|
Amended Certificate of Incorporation (incorporated by reference to Appendices 1 and 2 to the Registrant's Definitive Proxy Statement on Schedule 14A for its 2007 Annual Meeting of Stockholders and Exhibit 3(i) to the Registrant's Current Report on Form 8-K dated April 30, 1999).
|
3.2
|
Amended By-Laws (incorporated by reference to the Registrant’s Current Report on Form 8-K dated September 19, 2008, Appendix 3 to the Registrant's Definitive Proxy Statement on Schedule 14A for its 2007 Annual Meeting of Stockholders, Exhibit 3.1 to the Registrant's Current Report on Form 8-K dated June 7, 2005, and Exhibit 3(ii) to the Registrant's Current Report on Form 8-K dated April 30, 1999).
|
3.3
|
Certificate of Designation for the Series A Junior Participating Preferred Stock (included as Exhibit A to the Rights Agreement between Farmers & Merchants Bancorp and Registrar and Transfer Company, dated as of August 5, 2008, filed as Exhibit 4.1 below), filed on the Registrant’s Form 10-Q for the quarter ended June 30, 2008, is incorporated herein by reference.
|
4.1
|
Rights Agreement between Farmers & Merchants Bancorp and Registrar and Transfer Company, dated as of August 5, 2008, including Form of Right Certificate attached thereto as Exhibit B, filed on the Registrant’s Form 10-Q for the quarter ended June 30, 2008, is incorporated herein by reference.
|
10.1
|
Amended and Restated Employment Agreement effective April 1, 2014, between Farmers & Merchants Bank of Central California and Kent A. Steinwert, filed on Registrant’s Form 10-K for the year ended December 31, 2013, is incorporated herein by reference.
|
10.3
|
Amended and Restated Employment Agreement effective April 1, 2014, between Farmers & Merchants Bank of Central California and Deborah E. Skinner, filed on Registrant’s Form 10-K for the year ended December 31, 2013, is incorporated herein by reference.
|
10.4
|
Amended and Restated Employment Agreement effective April 1, 2014, between Farmers & Merchants Bank of Central California and Kenneth W. Smith, filed on Registrant’s Form 10-K for the year ended December 31, 2013, is incorporated herein by reference.
|
10.6
|
Amended and Restated Employment Agreement effective April 1, 2014, between Farmers & Merchants Bank of Central California and Stephen W. Haley, filed on Registrant’s Form 10-K for the year ended December 31, 2013, is incorporated herein by reference.
|
10.8
|
Employment Agreement effective April 1, 2014, between Farmers & Merchants Bank of Central California and Jay Colombini, filed on Registrant’s Form 10-K for the year ended December 31, 2013, is incorporated herein by reference.
|
10.9
|
Employment Agreement effective April 1, 2014, between Farmers & Merchants Bank of Central California and James Daugherty, filed on Registrant’s Form 10-K for the year ended December 31, 2013, is incorporated herein by reference.
|
10.10
|
Employment Agreement effective June 2, 2014, between Farmers & Merchants Bank of Central California and Ryan J. Misasi, filed on the Registrants Form 8-K dated June 11, 2014, is incorporated herein by reference.
|
10.15
|
Executive Retirement Plan – Performance Component as amended on November 5, 2010, filed on Registrant’s Form 10-Q for the period ended September 30, 2010, is incorporated herein by reference.
|
10.16
|
Executive Retirement Plan – Retention Component as amended on November 5, 2010, filed on Registrant’s Form 10-Q for the period ended September 30, 2010, is incorporated herein by reference.
|
10.17
|
Executive Retirement Plan – Salary Component, amended and restated on November 29, 2014, filed on Registrant’s Form 10-K for the year ended December 31, 2014.
|
10.18
|
Deferred Compensation Plan of Farmers & Merchants Bank of Central California, as amended on November 5, 2010, filed on Registrant’s Form 10-Q for the period ended September 30, 2010, is incorporated herein by reference.
|
10.19
|
Executive Retirement Plan – Equity Component, amended and restated on November 29, 2014, filed on Registrant’s Form 10-K for the year ended December 31, 2014.
|
10.20
|
Senior Management Retention Plan, amended and restated on November 29, 2014, filed on Registrant’s Form 10-K for the year ended December 31, 2014.
|
14
|
Code of Conduct of Farmers & Merchants Bancorp, filed on Registrant’s Form 10-K for the year ended December 31, 2003, is incorporated herein by reference.
|
21
|
Subsidiaries of the Registrant, filed on Registrant’s Form 10-K for the year ended December 31, 2003, is incorporated herein by reference.
|
31(a)
|
Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31(b)
|
Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32
|
Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
101.INS
|
XBRL Instance Document
|
101.SCH
|
XBRL Schema Document
|
101.CAL
|
XBRL Calculation Linkbase Document
|
101.LAB
|
XBRL Label Linkbase Document
|
101.PRE
|
XBRL Presentation Linkbase Document
|
101.DEF
|
XBRL Definition Linkbase Document
|
Farmers & Merchants Bancorp
|
|||
(Registrant)
|
|||
By
|
/s/ Stephen W. Haley
|
||
Dated: March 13, 2015
|
Stephen W. Haley
|
||
Executive Vice President &
|
|||
Chief Financial Officer
|
/s/ Kent A. Steinwert
|
Chairman, President & Chief Executive Officer
|
|
Kent A. Steinwert
|
(Principal Executive Officer)
|
|
/s/ Stephen W. Haley
|
Executive Vice President & Chief Financial Officer
|
|
Stephen W. Haley
|
(Principal Financial and Accounting Officer)
|
|
/s/ Bruce A. Mettler
|
/s/ Calvin Suess
|
|
Bruce A. Mettler, Director
|
Calvin Suess, Director
|
|
/s/ Stewart C. Adams, Jr.
|
/s/ Kevin Sanguinetti
|
|
Stewart C. Adams, Jr., Director
|
Kevin Sanguinetti, Director
|
|
/s/ Edward Corum, Jr.
|
/s/ Gary Long
|
|
Edward Corum, Jr., Director
|
Gary Long, Director
|
1. | Purpose of the Plan. The purpose of this Plan is to serve as part of a program to attract, retain and reward a select group of the Bank’s executive officers by providing retirement benefits in excess of the limitations on contributions or benefits imposed by the IRC. |
2.
|
Definitions.
As used in this Plan, the following terms shall have the meanings indicated below:
|
3. | Retirement Compensation. |
(i) | the sum of: (1) one hundred percent (100%) of the sum determined by subtracting the current year’s increase in the value of Simulated Investment Number Two from the current year’s increase in the value of Simulated Investment Number One and dividing the difference by the Adjustment Rate, plus (2) the Executive’s Pro-Rata Share of Earnings on Pool Policies for the current year; or |
(ii) | the Forecasted Retirement Contribution for the current year as stated in Appendix D. |
a) | All rights associated with the stock held in the rabbi trust shall be exercised by the trustee or the person designated by the trustee, and shall in no event be exercisable by or rest with the Executive, except that voting rights with respect to stock will be exercised by the Holding Company. An Executive shall have no voting or dividend or other rights of a shareholder with respect to shares of stock until a distribution of shares of stock is made. |
b) | Shares of stock owned by the rabbi trust shall be held in a brokerage account established by the trustee of the rabbi trust. Upon a distribution of shares of stock to an Executive, shares of stock shall be transferred into a brokerage account established in the Executive’s name. |
c) | The trustee of the rabbi trust shall at all times be deemed to an “agent independent of the issuer” for purposes of Securities and Exchange Commission Rule 10b-18. As such, neither the Bank, the Holding Company nor any of their respective affiliates will exercise any direct or indirect control or influence over the prices or amounts of the Stock to be purchased, the timing of, or the manner in which, the Stock is to be purchased, or the selection of a broker or dealer through which purchases may be executed. For purposes of the foregoing, the revision not more than once in any three months period of the mix of liquid assets and stock to be held by the Plan shall not constitute such control or influence. |
4.
|
Normal Retirement.
Upon the Executive attaining his or her Retirement Date (
i.e
., Termination of Employment at or after Normal Retirement Age), the Bank shall pay, or cause to be paid, the Executive’s Retirement Account balance as elected on Appendix B. Payment of Retirement Account balances which are deemed invested in shares of Holding Company common stock owned by the rabbi trust shall be made through the distribution of shares to the Executive, to the extent permitted under applicable law and subject to such restrictive legends as may be required under securities laws (subject to payroll tax withholding, which may be satisfied with cash proceeds from the sale of shares in the rabbi trust).
|
5. | Early Retirement or Termination. |
6. | Disability Benefit . Upon the Executive's Termination of Employment following a Disability, the Bank shall pay, or cause to be paid, the Executive’s Retirement Account balance as elected on Appendix B for a Normal Retirement under Section 4 (if Termination of Employment is at or after Normal Retirement Age) or as elected on Appendix B for an Early Retirement or Termination under Section 5 (if Termination of Employment is before Normal Retirement Age). Payment of Retirement Account balances which are deemed invested in shares of Holding Company common stock owned by the rabbi trust shall be made through the distribution of shares to the Executive, to the extent permitted under applicable law and subject to such restrictive legends as may be required under securities laws (subject to payroll tax withholding, which may be satisfied with cash proceeds from the sale of shares in the rabbi trust). |
7. | Change of Control. |
(a) | the balance in his/her Retirement Account, including all accrued interest pursuant to Section 3.3, plus |
(b) | the sum of the present value of each of the post Change of Control remaining annual Forecasted Retirement Contributions provided for in Appendix D. |
(a)
|
In the event that any payment or benefit (as those terms are defined within the meaning of Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended (the “Code”)) paid, payable, distributed or distributable to a Executive (hereinafter referred to as “Payments”) pursuant to the terms of this Plan or otherwise in connection with or arising out a Change of Control would be subject to the Excise Tax imposed by Section 4999 of the Code or any interest or penalties are incurred by the Executive with respect to such Excise Tax, then the Executive will be entitled to receive an additional payment (“Gross-Up Payment”) in an amount equal to the total Excise Tax, interest and penalties imposed on the Executive as a result of the Payment and the Excise Taxes on any federal and state tax reimbursements as set forth in subsection (b).
|
(b) | If the Bank is obligated to pay the Executive pursuant to subsection a), the Bank also shall pay the Executive an amount equal to the “total presumed federal and state taxes” that could be imposed on the Executive with respect to the Excise Tax reimbursements due to the Executive pursuant to subsection a) and the federal and state tax reimbursements due to the Executive pursuant to this subsection. For purposes of the preceding sentence, the “total presumed federal and state taxes” that could be imposed on the Executive shall be conclusively calculated using a combined tax rate equal to the sum of the (A) the highest individual income tax rate in effect under (i) Federal tax law and (ii) the tax laws of the state in which the Executive resides on the date that the payment is computed and (B) the hospital insurance portion of FICA. |
(c) | No adjustments will be made in this combined rate for the deduction of state taxes on the federal return, the loss of itemized deductions or exemptions, or for any other purpose for paying the actual taxes. |
(d) | It is further intended that in the event that any payments would be subject to other “penalty” taxes (in addition to the Excise Tax in subsection (a)) imposed by Congress or the Internal Revenue Service that these taxes would also be included in the calculation of the Gross-Up Payment, including any federal and state tax reimbursements pursuant to subsection (b). |
(e) | An initial determination as to whether a Gross-Up Payment is required pursuant to this Plan and the amount of such Gross-Up Payment shall be made at the Bank’s expense by an accounting firm appointed by the Bank prior to any Change of Control. The accounting firm shall provide its determination, together with detailed supporting calculations and documentation to the Bank and the Executive prior to submission of the proposed change of control to the Holding Company’s shareholders, Board of Directors or appropriate regulators for approval. If the accounting firm determines that no Excise Tax is payable by the Executive with respect to a Payment or Payments, it shall furnish the Executive with an opinion reasonably acceptable to the Executive that no Excise Tax will be imposed with respect to any such Payment or Payments. Within ten (10) days of the delivery of the determination to the Executive, the Executive shall have the right to dispute the determination. The existence of the dispute shall not in any way affect the Executive’s right to receive the Gross-Up Payment in accordance with the determination. Upon the final resolution of a dispute, the Bank or its successor shall promptly pay to the Executive any additional amount required by such resolution. If there is no dispute, the determination shall be binding, final and conclusive upon the Bank and the Executive, except to the extent that any taxing authority subsequently makes a determination that the Excise Tax or additional Excise Tax is due and owing on the payments made to the Executive. If any taxing authority determines that the Excise Tax or additional Excise Tax is due and owing, the entity acquiring control of the Bank shall pay the Excise Tax and any penalties assessed by such taxing authority. |
(f) | Notwithstanding anything contained in this Section to the contrary, in the event that according to the determination, an Excise Tax will be imposed on any Payment or Payments, the Bank or its successor shall pay to the applicable government taxing authorities as Excise Tax withholding, the amount of the Excise Tax that the Bank has actually withheld from the Payment or Payments. |
8. | Death Benefits. |
9. | Beneficiaries. |
10. | General Limitations. |
11. | Claims and Review Procedures. |
(a) | The specific reasons for the denial, |
(b) | A reference to the specific provisions of this Plan on which the denial is based, |
(c) | A description of any additional information or material necessary for the claimant to perfect the claim and an explanation of why it is needed, |
(d) | An explanation of this Plan’s review procedures and the time limits applicable to such procedures, and |
(e) | A statement of the claimant’s right to bring a civil action under ERISA Section 502(a) following an adverse benefit determination on review. |
11.2 | Review Procedure. If the Bank denies part or all of the claim, the claimant shall have the opportunity for a full and fair review by the Bank of the denial, as follows: |
(a) | The specific reasons for the denial, |
(b) | A reference to the specific provisions of this Plan on which the denial is based, |
(c) | A statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the claimant’s claim for benefits, and |
(d) | A statement of the claimant’s right to bring a civil action under ERISA Section 502(a). |
12. | Amendments and Termination . The Bank shall have the right at any time to modify, alter or amend this Plan, in whole or in part, provided that the amendment shall not reduce any Executive's interest in the Plan, calculated as of the date on which the amendment is adopted. Upon Plan termination, the Bank may accelerate the distribution of Retirement Account balances only in accordance with the requirements of Section 409A and the regulations issued thereunder. The Bank reserves the right to change this Plan, including reducing any Executive’s interest in this Plan, in order to make such Plan compliant with Section 409A of the Code. |
13. | Miscellaneous. |
13.1 | Binding Effect. This Plan shall bind the Executive and the Bank and their beneficiaries, survivors, successors, executors, administrators and transferees. |
13.2 | No Guarantee of Employment. This Plan is not an employment policy or contract. It does not give the Executive the right to remain an employee of the Bank, nor does it interfere with the Bank's right to discharge the Executive. It also does not require the Executive to remain an employee nor interfere with the Executive's right to terminate employment at any time. |
13.3 | Applicable Law. The Plan and all rights hereunder shall be governed by the laws of the State of California except to the extent preempted by the laws of the United States of America. |
13.4 | Reorganization. The Bank shall not merge or consolidate into or with another company, or reorganize, or sell substantially all of its assets to another company, firm or person unless such succeeding or continuing company, firm or person agrees to assume and discharge the obligations of the Bank under this Plan. Upon the occurrence of such event, the term “Bank” as used in this Plan shall be deemed to refer to the successor or survivor company. |
13.5 | Non-Transferability. Benefits under this Plan cannot be sold, transferred, assigned, pledged, attached or encumbered in any manner, whether by the Executive or Executive’s beneficiary or estate. |
13.6 | Domestic Relations Orders. Notwithstanding any other provision of this Plan regarding the time or form of payment to the contrary, Bank may in its sole discretion pay, or direct payment of all or any portion of the Executive’s Retirement Account directly to an alternate payee in order to comply with a domestic relations order (“DRO”) as defined in Code Section 414(p)(1)(B). Bank may, but is not required to, establish regular procedures for reviewing and commenting on draft DROs before issuance by the family court and for advising the Executive and alternate payee regarding the changes which are required in a DRO issued by the court to make it acceptable to the Plan. To facilitate any payment to be made in compliance with a DRO, Bank shall have the right, but shall not be required, to establish a separate account for the alternate payee and may, but shall not be required, to allow the alternate payee to self-direct the deemed investment thereof subject to such conditions as it deems appropriate. Any payment made under this Section to an alternate payee shall reduce the Retirement Account of the Executive by the amount thereof, and shall fully discharge Bank’s obligation under this Plan or otherwise with respect to such amount. No payment made by Bank to an alternate payee with respect to an Executive shall constitute a waiver of Bank’s right to refuse to accept another DRO concerning any remaining account of the Executive, nor shall the fact of such payment affect in any way the applicability of this Section to any other Executive. Any payments made under a DRO to an alternate payee shall be net of any applicable withholding. This Section (and any DRO) shall be interpreted and applied in a manner that complies with the applicable provisions of Section 409A of the Code and the applicable regulations and other guidance promulgated thereunder. |
13.7 | Tax Withholding. The Bank shall withhold any taxes that are required to be withheld from the benefits provided under this Plan. |
(a) | Establishing and revising the method of accounting for the Plan; |
(b) | Maintaining a record of benefit payments; and |
(c) | Establishing rules and prescribing any forms necessary or desirable to administer the Plan. |
(d) | Establishing a rabbi trust for the Plan and depositing amounts required under Section 3.2 into such trust. Notwithstanding the foregoing or anything in the Plan or other agreement to the contrary, in no event shall a contribution be made to a trust for the purpose of restricting assets to the provision of benefits under the Plan in connection with a change in the financial health of the Bank or any affiliated entity in a manner that would result in the inclusion of amounts in the gross income of the Executives pursuant to Section 409A(b) of the Code). |
1. | Purpose of the Plan . The purpose of this Plan is to serve as part of a program to attract, retain and reward a select group of the Bank’s executive officers and directors by providing retirement benefits in excess of the limitations on contributions or benefits imposed by the IRC. |
2.
|
Definitions
. As used in this Plan, the following terms shall have the meanings indicated below:
|
3. | Retirement Compensation . Participants in the Plan will be eligible to earn Retirement Compensation in the form of a Plan Award. |
a) | The Committee may, in its sole discretion, grant one or more Plan Awards to any Participant. |
b) | As more fully described Section 5 hereof, Plan Awards will be credited to each Participant’s Retirement Account, and equivalent amounts transferred to a rabbi trust established under Section 19 for investment in a mix of shares of Stock and liquid assets. The Retirement Accounts shall be credited with income or debited with loss based on the hypothetical investment of such accounts in accordance with the investments in the rabbi trust. |
c) | All rights associated with the Stock held in the rabbi trust shall be exercised by the trustee or the person designated by the trustee, and shall in no event be exercisable by or rest with the Participants, except that voting rights with respect to Stock will be exercised by the Company. A Participant shall have no voting or dividend or other rights of a shareholder with respect to shares of Stock until a distribution of shares of Stock is made under Section 10 hereof. |
d) | Shares of Stock owned by the rabbi trust shall be held in a brokerage account established by the trustee of the rabbi trust established under Section 19 hereof. Upon a distribution of shares of Stock to a Participant under Section 10 hereof, shares of Stock shall be transferred into a brokerage account established in the Participant’s name. |
e) | The trustee of the rabbi trust shall at all times be deemed to an “agent independent of the issuer” for purposes of Securities and Exchange Commission Rule 10b-18. As such, neither the Bank, the Holding Company nor any of their respective affiliates will exercise any direct or indirect control or influence over the prices or amounts of the Stock to be purchased, the timing of, or the manner in which, the Stock is to be purchased, or the selection of a broker or dealer through which purchases may be executed. For purposes of the foregoing, the revision not more than once in any three months period of the mix of liquid assets and Stock to be held by the Plan shall not constitute such control or influence. |
f) | Notwithstanding the provisions of Section 3 (c), a Participant’s Retirement Account shall be credited with the amount of any dividends paid with respect to all shares of Stock credited to the Retirement Account with respect to a Plan Award, and with appreciation and depreciation in the value of such shares, even though the Plan Award is not fully vested, provided that all amounts credited to the Retirement Account shall remain subject to vesting and forfeiture in accordance with Section 4 and Section 9 hereof. |
g) | Unless the Committee otherwise expressly provides, subject to the guidelines of Section 4 and Section 9 hereof, shares of Stock that have not vested at the time of Termination of Employment shall not vest. |
4. | Vesting. |
a) | A Participant's entitlement to his or her Retirement Account balance shall vest based on the Participant's Full Years of Service with the Bank, measured beginning with the later of: (i) the first day of the quarter after which he or she is awarded a Plan Award; or (ii) the first day of the quarter after which he or she executes the attached Payment Election (such later date referred to as the “Award Date”) , as set forth in the vesting schedule below. The receipt of an additional Plan Award shall result in a new vesting schedule for such additional Plan Award. |
Post-Award Date Full Years of Service
|
Percentage of
Award Vested
|
|||
Less than 1 year
|
0
|
%
|
||
1 year to less than 2 years
|
50
|
%
|
||
2 years or more
|
100
|
%
|
b) | In the event that the Participant’s Termination of Employment occurs on or after reaching age 60 and at least twelve (12) months after the Award Date for a Plan Award that was granted for a year after 2012 , but before the Plan Award has become fully vested, as long as Participant does not engage in competition with the Bank (within the meaning of Section 9(c) of the Plan) during the remainder of the 2 year vesting period, that portion of the Plan Award that is not vested as of the Date of Termination will remain credited to the Participant’s Retirement Account balance and will vest at the end of the applicable 2 year vesting period or, earlier, upon a Change of Control or the Participant’s death. If the Participant does engage in competition with the Bank during the remainder of the vesting period, then in addition to the consequences described in Section 9(c) of the Plan, the Participant will immediately and automatically forfeit all entitlement to the portion of his or her Retirement Account allocable to the unvested portion of the Plan Award and will not be entitled to any payment in respect thereof. If the Participant’s Termination of Employment occurs less than twelve (12) months after an Award Date, the entire Plan Award will be forfeited on such Termination of Employment. |
c) | Effective December 31, 2014, notwithstanding anything to the contrary herein, but subject to Section 9, all Plan Awards then credited to a Participant’s Retirement Account balance, and all Plan Awards granted to a Participant thereafter, shall be 100% vested. |
5. | Retirement Account . The Bank shall establish a Retirement Account on its books for the Participant. Plan Awards will be credited to this account and transferred to the rabbi trust established under Section 19 (b) upon the earlier of a Change of Control or the end of each calendar month. The Company shall, in its discretion, direct the trustee to invest trust assets in a mix of Stock and liquid assets. The Company intends to maintain a sufficient level of liquid assets in the rabbi trust for required payroll tax withholding upon payment of Retirement Account balances under Section 10. |
6. | Earnings on Retirement Account Balances. Earnings, including dividends paid by the Holding Company on the shares of Stock owned by the rabbi trust, and losses will be credited or debited to each Participant’s Retirement Account balance based on the hypothetical investment of such accounts in accordance with the investments in the rabbi trust. |
7. | Notice of Plan Award and Statement of Accounts . As soon as practicable following a determination by the Committee to grant a Plan Award to a Participant, the Committee shall give written notice to the Participant of the dollar amount of the Plan Award. Such notice shall enclose a copy of the Plan. The Bank shall also provide to the Participant, within sixty (60) days after each calendar year-end, a statement setting forth the Participant’s account balance. |
8. | Accounting Device Only . The Retirement Account is solely a device for measuring amounts to be paid under this Plan. It is not a trust fund of any kind. The Participant is a general unsecured creditor of the Bank for the payment of benefits. The benefits represent the mere Bank promise to pay such benefits. The Participant’s rights are not subject in any manner to anticipation, alienation, transfer, assignment, pledge, encumbrance, attachment, or garnishment by the Participant’s creditors . |
9. | Forfeiture . In addition to the vesting conditions set forth in Section 4, and notwithstanding any contrary provision of the Plan, the payment of benefits to a Participant under the Plan is subject to the forfeiture conditions described in this Section 9. |
a) | All Plan Awards. Except in the event of (i) Change of Control, (ii) death, (iii) Disability, or (iv) Termination of Employment on or after reaching age 60 under certain circumstances as set forth in Section 4, on termination of a Participant’s status as a Participant (whether upon the Participant’s Retirement Date or Termination of Employment without Cause), that portion of the Retirement Account that is not vested upon the occurrence of such event shall be forfeited by the Participant. |
b) | All Plan Awards. Notwithstanding anything to the contrary , in the event of the Participant's Termination for Cause, all entitlement and other rights of Participant to any Retirement Account balance, whether or not vested, shall be cancelled, terminated and forfeited in their entirety. |
c) | Plan Awards Granted for Years After 2013. Notwithstanding anything to the contrary, in the event that the Participant competes with the Bank while employed by the Bank or within twelve (12) months following Termination of Employment, all entitlement and other rights of Participant to any Retirement Account balance, whether or not vested, shall be cancelled, terminated and forfeited in their entirety. For purposes of the Plan, a Participant will be deemed to be engaged in competition with the Bank if he or she is an employee, officer, director, trustee, agent or partner of, or a consultant or advisor to or for, a federally insured financial institution that solicits agricultural, commercial real estate or middle-market commercial banking business in the California counties of Sacramento, San Joaquin, Stanislaus or Merced, or, effective for Plan Awards granted after November 30, 2014, Alameda, Contra Costa, or Orange (or the direct or indirect parent, subsidiary or other affiliate of such an institution) or if he or she owns, directly or indirectly, in excess of 5% of the outstanding voting securities of any such institution (or affiliate thereof). |
d) | Plan Awards Granted for Years After 2013. Notwithstanding anything to the contrary, in the event that the Participant breaches any covenants with the Bank regarding the use or disclosure of proprietary information or materials, the solicitation or recruitment of employees, the solicitation of customers or prospective customers, or the return of Bank materials, as set forth in the Participant’s employment or other agreement with the Bank, all entitlement and other rights of Participant to any Retirement Account balance, whether or not vested, shall be cancelled, terminated and forfeited in their entirety. |
e) | Plan Awards Granted for Years After 2013. Notwithstanding anything to the contrary, in the event that the Participant violates any obligation in his or her employment agreement to give minimum advance written notice of resignation of employment to the Bank, all entitlement and other rights of Participant to any Retirement Account balance, whether or not vested, shall be cancelled, terminated and forfeited in their entirety. |
10. | Payment and Distribution of Retirement Accounts . Except in the event of a Change of Control, payment of Retirement Account balances which are deemed invested in shares of Stock owned by the rabbi trust shall be made through the distribution of shares to the Participant, to the extent permitted under applicable law and subject to such restrictive legends as may be required under securities laws (subject to payroll tax withholding, which may be satisfied with cash proceeds from the sale of shares in the rabbi trust). In the event of a Change of Control, payment of all balances shall be made in cash. |
a) | Retirement. Upon the Participant attaining his or her Retirement Date ( i.e ., Termination of Employment at or after Normal Retirement Age), the Bank shall pay the portion of Participant's Retirement Account that is not forfeited pursuant to Sections 4 or 9 in accordance with the Participant’s Election on the attached Payment Election. |
b) | Disability. If Participant’s Termination of Employment is due to Disability, the Bank shall pay the vested portion of the Participant's Retirement Account in accordance with the Participant’s Election on the attached Payment Election for a Retirement under subsection a) above (if Termination of Employment is at or after Normal Retirement Age) or as elected on the attached Payment Election for a Termination without Cause under subsection e) below (if Termination of Employment is before Normal Retirement Age). |
c) | Death. Notwithstanding any distribution election, in the event of the Participant's death (i) while employed by the Bank or the Holding Company, the full amount of Participant's vested Retirement Account shall be paid to the Participant's heirs, devisees or designated beneficiaries in one lump sum payment within sixty (60) days following the Participant’s death, or (ii) after his Termination of Employment, the remaining portion of Participant’s vested Retirement Account, if any, which had not been previously forfeited or paid out shall be paid to the Participant's heirs, devisees or designated beneficiaries in one lump sum payment within sixty (60) days following the Participant’s death. |
d) | Change of Control. In the event of a Change of Control, the Bank shall pay the full amount of the Participant's Retirement Account (or the remaining portion of the Participant’s Retirement Account, if any, which had not previously forfeited or paid out in connection with a prior Termination of Employment) in a lump sum immediately prior to the Change of Control. |
e) | Termination without Cause. In the event of the Participant’s Termination of Employment with the Bank other than for Cause before Normal Retirement Age, the Bank shall pay the portion of Participant's Retirement Account that is not forfeited pursuant to Sections 4 or 9 in accordance with the Participant’s Election on the attached Payment Election. |
11. | Beneficiary Designation . The Participant shall have the right, at any time to submit a Beneficiary Designation Form designating primary and secondary beneficiaries to whom payment under this Plan shall be made in the event of death prior to complete distribution of the benefits due and payable under the Plan. Each beneficiary designation shall become effective only when receipt thereof is acknowledged in writing by the Bank. The Participant's Beneficiary designation shall be deemed automatically revoked if the Beneficiary predeceases the Participant or if the Participant names a spouse as beneficiary and the marriage is subsequently dissolved. If the Participant dies without a valid beneficiary designation, all payments shall be made to the Participant's estate. |
12. | Assignment of Rights. Neither the Participant nor any designated beneficiary shall have any right to sell, assign, transfer, or otherwise convey the right to receive any payments hereunder without the prior written consent of the Bank. |
13. | Domestic Relations Orders . Notwithstanding any other provision of this Plan regarding the time or form of payment to the contrary, the Committee may in its sole discretion pay, or direct payment of all or any portion of the Participant’s Retirement Account directly to an alternate payee in order to comply with a domestic relations order (“DRO”) as defined in Code Section 414(p)(1)(B). The Committee may, but is not required to, establish regular procedures for reviewing and commenting on draft DROs before issuance by the family court and for advising the Participant and alternate payee regarding the changes which are required in a DRO issued by the court to make it acceptable to the Plan. To facilitate any payment to be made in compliance with a DRO, the Committee shall have the right, but shall not be required, to establish a separate account for the alternate payee and may, but shall not be required, to allow the alternate payee to self-direct the deemed investment thereof subject to such conditions as it deems appropriate. The Committee may in its sole discretion decide to make all payments required in a DRO in cash, without regard to whether the Participant’s Retirement Account has deemed investments in Shares. Any payment made under this Section to an alternate payee shall reduce the Retirement Account of the Participant by the amount thereof, and shall fully discharge the Bank’s obligation under this Plan or otherwise with respect to such amount. No payment made by the Bank to an alternate payee with respect to a Participant shall constitute a waiver of the Bank’s right to refuse to accept another DRO concerning any remaining account of the Participant, nor shall the fact of such payment affect in any way the applicability of this Section to any other Participant. Any payments made under a DRO to an alternate payee shall be net of any applicable withholding. This Section (and any DRO) shall be interpreted and applied in a manner that complies with the applicable provisions of Section 409A of the Code and the applicable regulations and other guidance promulgated thereunder. |
14. | Unfunded and Unsecured Obligation. Neither the Holding Company nor the Bank is required to earmark or otherwise set aside any funds or other assets or in any way secure payment of its obligations under the Plan. Any asset which may be set aside by the Holding Company or the Bank for accounting purposes or in a rabbi trust is not to be treated as held in trust for any Participant or for his or her account. Each Participant shall have only the rights of a general, unsecured creditor of the Holding Company and/or the Bank with respect to any of his or her rights under the Plan. |
15. | Claims Procedure. |
a) | The Participant, or his beneficiary hereunder or authorized representative (the “Claimant”), may file a claim for benefits under the Plan by written communication to the Committee or its designee. A claim is not considered filed until such communication is actually received. Within 90 days (or, if special circumstances require an extension of time for processing, 180 days, in which case written or electronic notice and description of such special circumstances, and the date by which the Committee expects to tender its decision, shall be provided within the initial 90-day period) after the filing of the claim, the Committee will either: |
(i) | approve the claim and take appropriate steps for satisfaction of the claim; or |
(ii) | if the claim is wholly or partially denied, advise the Claimant of such denial by furnishing to him a written or electronic notice of such denial setting forth (A) the specific reason or reasons for the denial; (B) specific reference to pertinent provisions of the Plan on which the denial is based and, if the denial is based in whole or in part on any rule of construction or interpretation adopted by the Committee, a reference to such rule, a copy of which shall be provided to the Claimant; (C) a description of any additional material or information necessary for the Claimant to perfect the claim and an explanation of the reasons why such material or information is necessary; and (D) a description of the Plan’s appeal procedures and the time limits applicable to such procedures, including a statement of the Claimant’s right to bring a civil action under Section 502(a) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) following a denial of the claim on appeal. |
b) | The Claimant may request a review of any denial of his claim by written application to the Committee within 60 days after receipt of the notice of denial of such claim. The Committee shall afford the Claimant an opportunity to review and receive, without charge, all relevant documents, information and records and to submit issues and comments in writing to the Committee. The Committee shall take into account all comments, documents, records and other information submitted by the Claimant relating to the claim regardless of whether the information was submitted or considered in the initial benefit determination. Within 60 days (or, if special circumstances require an extension of time for processing, 120 days, in which case notice and description of such special circumstances and the expected date of decision shall be provided within the initial 60-day period) after receipt of written application for review, the Committee will provide the Claimant with its decision in writing or by electronic communication, including, if the Claimant’s claim is not approved, (A) specific reasons for the decision, (B) specific references to the Plan provisions on which the decision is based, (C) a statement that the Claimant may receive on request all relevant records at no charge; and (D) a statement of the Claimant’s right to bring an action under Section 502(a) of ERISA. |
c) | The internal claims procedures set forth in this Section 15 are mandatory. If a Claimant fails to follow these claims procedures, or to timely file a request for appeal in accordance with this Section 15, the denial of the Claim shall become final and binding on all persons for all purposes. |
16. | No Contract of Employment. Nothing contained herein shall be construed to be a contract of employment for any term of years, nor as conferring upon the Participant the right to continue to be employed by the Bank, in any capacity, nor in any way vary the Bank’s policy of at-will employment, which may be varied only by the express terms of a contract of employment. It is expressly understood by the parties hereto that this Plan relates exclusively to the compensation as set forth in this Plan. |
17. | Construction of Agreement. Any payments under this Plan shall be independent of, and in addition to, those under any other retirement plan, program, or agreement which may be in effect between the parties hereto, or any other compensation payable to the Participant or the Participant’s designated beneficiary by the Bank. All legal issues pertaining to the Plan shall be determined in accordance with ERISA and, to the extent not preempted thereby, the laws of the State of Delaware. |
18. | Amendment and Termination. The Bank shall have the right at any time to modify, alter or amend this Plan, in whole or in part, provided that the amendment shall not reduce any Participant's interest in the Plan, calculated as of the date on which the amendment is adopted. Upon Plan termination, the Bank may accelerate the distribution of Retirement Account balances only in accordance with the requirements of Section 409A and the regulations issued thereunder. Bank reserves the right to change this Plan, including reducing any Participant’s interest in this Plan in order to make such Plan compliant with Section 409A. |
19.
|
The Committee.
|
a)
|
The Committee shall, for the purpose of administering the Plan, choose a secretary and an assistant secretary (either of whom is hereafter referred to as "Secretary") who shall keep minutes of the Committee's proceedings and all records and documents pertaining to the Committee’s administration of the Plan. The Secretary may execute any certificates or other written direction on behalf of the Committee. A majority of the members of the Committee shall constitute a quorum.
|
b) | The Committee on behalf of the Participants shall be charged with the general administration of the Plan and shall have all powers necessary to accomplish those purposes including, but not by way of limitation, the following: |
- | to construe, interpret, and administer the Plan; |
- | to make determinations under the Plan, including, without limitation, determinations regarding eligibility to participate, the vesting and forfeiture of benefits, and the computation of the amount of benefits; |
- | to establish a rabbi trust for the Plan and to deposit amounts calculated under Sections 5 and 6 into such trust established by the Committee (provided, however, that notwithstanding anything in the Plan or other agreement to the contrary, in no event shall a contribution be made to a trust for the purpose of restricting assets to the provision of benefits under the Plan in connection with a change in the financial health of the Bank or any affiliated entity in a manner that would result in the inclusion of amounts in the gross income of the Participants pursuant to Section 409A(b) of the Code; |
- | to maintain the necessary records for the administration of the Plan; |
- | to engage the services of counsel (who may, if appropriate in the judgment of the Committee, be counsel for the Bank), actuaries, and agents whom it may deem advisable to assist it with the performance of its duties hereunder; and |
- | to make and publish such rules for the regulation of the Plan as are not inconsistent with the terms hereof, including without limitation procedures to be followed to obtain benefits, and enforce the terms of the Plan and any such rules. |
c) | The members of the Committee shall serve without bond and without compensation (except for director fees) for their services hereunder. All expenses of the Committee shall be paid by the Bank. The Bank shall furnish the Committee with such clerical and other assistance as is necessary in the performance of its duties. No member of the Committee shall be liable for the act or omission of any other member of the Committee, nor for any act or omission on his or her own part, excepting only his or her own willful misconduct or gross negligence. The Bank shall indemnify and hold harmless each member of the Committee against any and all expenses and liabilities arising out of his or her membership on the Committee, excepting only expenses and liabilities arising out of his or her own willful misconduct or gross negligence. |
20. | Gross-Up Payment. Upon a Change of Control , a Participant shall be entitled to a “Gross-Up Payment” under the terms and conditions set forth herein, and such payment shall include the Excise Tax reimbursement due pursuant to subsection a) and any federal and state tax reimbursements due pursuant to subsection b). |
a)
|
In the event that any payment or benefit (as those terms are defined within the meaning of Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended (the “Code”)) paid, payable, distributed or distributable to a Participant (hereinafter referred to as “Payments”) pursuant to the terms of this Plan or otherwise in connection with or arising out a Change of Control would be subject to the Excise Tax imposed by Section 4999 of the Code or any interest or penalties are incurred by the Participant with respect to such Excise Tax, then the Participant will be entitled to receive an additional payment (“Gross-Up Payment”) in an amount equal to the total Excise Tax, interest and penalties imposed on the Participant as a result of the Payment and the Excise Taxes on any federal and state tax reimbursements as set forth in subsection b).
|
b) | If the Bank is obligated to pay the Participant pursuant to subsection a), the Bank also shall pay the Participant an amount equal to the “total presumed federal and state taxes” that could be imposed on the Participant with respect to the Excise Tax reimbursements due to the Participant pursuant to subsection a) and the federal and state tax reimbursements due to the Participant pursuant to this subsection. For purposes of the preceding sentence, the “total presumed federal and state taxes” that could be imposed on the Participant shall be conclusively calculated using a combined tax rate equal to the sum of the (a) the highest individual income tax rate in effect under (i) Federal tax law and (ii) the tax laws of the state in which the Participant resides on the date that the payment is computed and (b) the hospital insurance portion of FICA. |
c) | No adjustments will be made in this combined rate for the deduction of state taxes on the federal return, the loss of itemized deductions or exemptions, or for any other purpose for paying the actual taxes. |
d) | It is further intended that in the event that any payments would be subject to other “penalty” taxes (in addition to the Excise Tax in subsection a)) imposed by Congress or the Internal Revenue Service that these taxes would also be included in the calculation of the Gross-Up Payment, including any federal and state tax reimbursements pursuant to subsection b). |
e) | An initial determination as to whether a Gross-Up Payment is required pursuant to the Plan and the amount of such Gross-Up Payment shall be made at the Bank’s expense by an accounting firm appointed by the Bank prior to any Change of Control. The accounting firm shall provide its determination, together with detailed supporting calculations and documentation to the Bank and the Participant prior to submission of the proposed change of control to the Holding Company’s shareholders, Board of Directors or appropriate regulators for approval. If the accounting firm determines that no Excise Tax is payable by the Participant with respect to a Payment or Payments, it shall furnish the Participant with an opinion reasonably acceptable to the Participant that no Excise Tax will be imposed with respect to any such Payment or Payments. Within ten (10) days of the delivery of the determination to the Participant, the Participant shall have the right to dispute the determination. The existence of the dispute shall not in any way affect the Participant’s right to receive the Gross-Up Payment in accordance with the determination. Upon the final resolution of a dispute, the Bank or its successor shall promptly pay to the Participant any additional amount required by such resolution. If there is no dispute, the determination shall be binding, final and conclusive upon the Bank and the Participant, except to the extent that any taxing authority subsequently makes a determination that the Excise Tax or additional Excise Tax is due and owing on the payments made to the Participant. If any taxing authority determines that the Excise Tax or additional Excise Tax is due and owing, the entity acquiring control of the Bank shall pay the Excise Tax and any penalties assessed by such taxing authority. |
f) | Notwithstanding anything contained in this Section to the contrary, in the event that according to the determination, an Excise Tax will be imposed on any Payment or Payments, the Bank or its successor shall pay to the applicable government taxing authorities as Excise Tax withholding, the amount of the Excise Tax that the Bank has actually withheld from the Payment or Payments. |
21. | Section 409A. This Plan is intended to be consistent with the provisions of Section 409A of the Code and its provisions shall be interpreted consistent with such intent. |
a)
|
Distribution Elections. If otherwise payable under the Plan, a Participant’s Retirement Account balance shall be distributed as elected by Participant on the attached Payment Election for a Retirement under subsection a) of Section 10 (if Termination of Employment is at or after Normal Retirement Age) or as elected on the attached Payment Election for a Termination without Cause under subsection e) of Section 10 (if Termination of Employment is before Normal Retirement Age), provided that such election has been made prior to the calendar year in which the Participant performs the services for which the contributions to the Participant’s Retirement Account are made (or otherwise in accordance with the requirements of Section 409A), and in accordance with such procedures as shall be established by the Bank. If no such election has been made for either of such payment events, the Participant shall be deemed to have elected to receive payment upon such payment event in a lump sum on the later of (A) the 15th day of the month following the six-month anniversary of the date of Termination of Employment (or, for Plan Awards granted for years after 2013, the 15
th
day of the month following the twelve-month anniversary of the date of Termination of Employment) or (B) January 15th of the year following the date of Termination of Employment. The Bank has the discretion to establish sub-accounts for one or more Participants and to maintain separate payment elections in respect of each such sub-account provided that such elections comply with the payment election requirements of Section 409A. The Bank also has the discretion to permit changes in payment elections provided such changes are made in accordance with the requirements of Section 409A and such procedures as shall be established by the Bank.
|
b)
|
Distributions To A Specified Employee. Notwithstanding any provision to the contrary in the Plan, a distribution to which a Participant would otherwise be entitled upon a Termination of Employment, and that would otherwise be paid on or within six-months following such Termination of Employment, will be delayed until one day following the expiration of the six (6)-month period from the date of the Participant’s Termination of Employment if the Bank in good faith determines that the Participant is a “specified employee,” as defined in Section 409A and regulations issued thereunder, at the time of such Termination of Employment, and that the delayed commencement is required in order to avoid a prohibited distribution under Code Section 409A(a)(2). In the event that a delay of any payment is required under this provision, such payment shall be accumulated and paid in a single lump sum on the delayed payment date, and any remaining payments due under the Plan shall be paid in accordance with the normal payment dates specified for them herein.
|
22. | Headings . Headings and subheadings in this Plan are inserted for convenience or reference only and are not to be considered in the construction of the provisions hereof. |
23 . | Intent . To the extent that this Plan may be construed to be a plan maintained to provide deferred compensation, it is intended to be limited to a “select group of management or highly compensated employees” within the meaning of Section 201(2) of ERISA. The Plan is intended to be exempt from the participation, vesting, funding, and fiduciary requirements of Title 1 of ERISA, to the fullest extent permitted under the law. The Plan shall at all times be “unfunded” within the meaning of ERISA. This Plan and rights hereunder shall be subject to the Federal Deposit Insurance Act and the rules, regulations, policies and guidance of the Federal Deposit Insurance Corporation including, without limitation, 12 C.F.R. Part 359. |
24. | Gender and Number . Where the context permits, words in any gender shall, include any other gender; words in the singular shall include the plural, and the plural shall include the singular. |
1. | Purpose of the Plan . The purpose of this Plan is to serve as part of a program to attract, retain and reward a select group of the Bank’s senior managers by providing retirement benefits in excess of the limitations on contributions or benefits imposed by the IRC. |
2.
|
Definitions
. As used in this Plan, the following terms shall have the meanings indicated below:
|
3. | Retirement Compensation . Participants in the Plan will be eligible to earn Retirement Compensation in the form of a Plan Award. |
a) | The Committee may, in its sole discretion, grant one or more Plan Awards to any Participant. |
b) | As more fully described Section 5 hereof, Plan Awards will be credited to each Participant’s Retirement Account, and equivalent amounts transferred to a rabbi trust established under Section 19 for investment in a mix of shares of Stock and liquid assets. The Retirement Accounts shall be credited with income or debited with loss based on the hypothetical investment of such accounts in accordance with the investments in the rabbi trust. |
c) | All rights associated with the Stock held in the rabbi trust shall be exercised by the trustee or the person designated by the trustee, and shall in no event be exercisable by or rest with the Participants, except that voting rights with respect to Stock will be exercised by the Company. A Participant shall have no voting or dividend or other rights of a shareholder with respect to shares of Stock until a distribution of shares of Stock is made under Section 10 hereof. |
d) | Shares of Stock owned by the rabbi trust shall be held in a brokerage account established by the trustee of the rabbi trust established under Section 19 hereof. Upon a distribution of shares of Stock to a Participant under Section 10 hereof, shares of Stock shall be transferred into a brokerage account established in the Participant’s name. |
e) | The trustee of the rabbi trust shall at all times be deemed to an “agent independent of the issuer” for purposes of Securities and Exchange Commission Rule 10b-18. As such, neither the Bank, the Holding Company nor any of their respective affiliates will exercise any direct or indirect control or influence over the prices or amounts of the Stock to be purchased, the timing of, or the manner in which, the Stock is to be purchased, or the selection of a broker or dealer through which purchases may be executed. For purposes of the foregoing, the revision not more than once in any three months period of the mix of liquid assets and Stock to be held by the Plan shall not constitute such control or influence. |
f) | Notwithstanding the provisions of Section 3 (c), a Participant’s Retirement Account shall be credited with the amount of any dividends paid with respect to all shares of Stock credited to the Retirement Account with respect to a Plan Award, and with appreciation and depreciation in the value of such shares, even though the Plan Award is not fully vested, provided that all amounts credited to the Retirement Account shall remain subject to vesting and forfeiture in accordance with Section 4 and Section 9 hereof. |
g) | Unless the Committee otherwise expressly provides, subject to the guidelines of Section 4 and Section 9 hereof, shares of Stock that have not vested at the time of Termination of Employment shall not vest. |
4. | Vesting. |
a) | For those Plan Awards granted after 2013, a Participant's entitlement to his or her Retirement Account balance shall vest based on the Participant's Full Years of Service with the Bank, measured beginning with the later of: (i) the first day of the quarter after which he or she is awarded a Plan Award; or (ii) the first day of the quarter after which he or she executes the attached Payment Election (such later date referred to as the “Award Date”) , as set forth in the vesting schedule below. The receipt of an additional Plan Award shall result in a new vesting schedule for such additional Plan Award. |
Post-Award
Date
Full Years of Service
|
Percentage of
Award Vested
|
|||
Less than 1 year
|
0
|
%
|
||
1 year to less than 2 years
|
50
|
%
|
||
2 years or more
|
100
|
%
|
b) | In the event that the Participant’s Termination of Employment occurs on or after reaching age 60 and at least twelve (12) months after the Award Date for a Plan Award that was granted for a year after 2012 , but before the Plan Award has become fully vested, as long as during the remainder of the 2 year vesting period, Participant does not become employed by, or serve as a consultant to or director of a business (or the parent or subsidiary of a business) that is licensed under State or Federal law as a bank, thrift, or credit union , that portion of the Plan Award that is not vested as of the Date of Termination will remain credited to the Participant’s Retirement Account balance and will vest at the end of the applicable 2 year vesting period or, earlier, upon a Change of Control or the Participant’s death. If the Participant does become so employed during the remainder of the vesting period , the Participant will immediately and automatically forfeit all entitlement to the portion of his or her Retirement Account allocable to the unvested portion of the Plan Award and will not be entitled to any payment in respect thereof. If the Participant’s Termination of Employment occurs less than twelve (12) months after an Award Date, the entire Plan Award will be forfeited on such Termination of Employment. |
c) | Effective December 31, 2014, notwithstanding anything to the contrary herein, but subject to Section 9, all Plan Awards then credited to a Participant’s Retirement Account balance, and all Plan Awards granted to a Participant thereafter, shall be 100% vested. |
5. | Retirement Account . The Bank shall establish a Retirement Account on its books for the Participant. Plan Awards will be credited to this account and transferred to the rabbi trust established under Section 19 (b) upon the earlier of a Change of Control or the end of each calendar month. The Company shall, in its discretion, direct the trustee to invest trust assets in a mix of Stock and liquid assets. The Company intends to maintain a sufficient level of liquid assets in the rabbi trust for required payroll tax withholding upon payment of Retirement Account balances under Section 10. |
6. | Earnings on Retirement Account Balances. Earnings, including dividends paid by the Holding Company on the shares of Stock owned by the rabbi trust, and losses will be credited or debited to each Participant’s Retirement Account balance based on the hypothetical investment of such accounts in accordance with the investments in the rabbi trust. |
7. | Notice of Plan Award, Statement of Accounts and Other Documents . As soon as practicable following a determination by the Committee to grant a Plan Award to a Participant, the Committee shall give written notice to the Participant of the dollar amount of the Plan Award. Such notice shall also enclose (i) a copy of the Plan, and (ii) the name of the person from whom additional information concerning the Plan and/or a Participant’s Award can be obtained. |
8. | Accounting Device Only . The Retirement Account is solely a device for measuring amounts to be paid under this Plan. It is not a trust fund of any kind. The Participant is a general unsecured creditor of the Bank for the payment of benefits. The benefits represent the mere Bank promise to pay such benefits. The Participant’s rights are not subject in any manner to anticipation, alienation, transfer, assignment, pledge, encumbrance, attachment, or garnishment by the Participant’s creditors . |
9. | Forfeiture . In addition to the vesting conditions set forth in Section 4, and notwithstanding any contrary provision of the Plan, the payment of benefits to a Participant under the Plan is subject to the forfeiture conditions described in this Section 9. |
a) | All Plan Awards. Except in the event of (i) Change of Control, (ii) death, (iii) Disability, or (iv) Termination of Employment on or after reaching age 60 under certain circumstances as set forth in Section 4, on termination of a Participant’s status as a Participant (whether upon the Participant’s Retirement Date or Termination of Employment without Cause), that portion of the Retirement Account that is not vested upon the occurrence of such event shall be forfeited by the Participant. |
b) | All Plan Awards. Notwithstanding anything to the contrary, in the event of the Participant's Termination for Cause, all entitlement and other rights of Participant to any Retirement Account balance, whether or not vested, shall be cancelled, terminated and forfeited in their entirety. |
c) | Plan Awards Granted for Years After 2013. Notwithstanding anything to the contrary, in the event that the Participant breaches any covenants with the Bank regarding the use or disclosure of proprietary information or materials, the solicitation or recruitment of employees, the solicitation of customers or prospective customers, or the return of Bank materials, as set forth in the Participant’s employment or other agreement with the Bank, all entitlement and other rights of Participant to any Retirement Account balance, whether or not vested, shall be cancelled, terminated and forfeited in their entirety. |
d) | Plan Awards Granted for Years After 2013. Notwithstanding anything to the contrary, in the event that the Participant violates any obligation in his or her employment agreement to give minimum advance written notice of resignation of employment to the Bank, all entitlement and other rights of Participant to any Retirement Account balance, whether or not vested, shall be cancelled, terminated and forfeited in their entirety. |
10. | Payment and Distribution of Retirement Accounts . Except in the event of a Change of Control, payment of Retirement Account balances which are deemed invested in shares of Stock owned by the rabbi trust shall be made through the distribution of shares of Stock to the Participant, to the extent permitted under applicable law and subject to such restrictive legends as may be required under securities laws (subject to payroll tax withholding, which may be satisfied with cash proceeds from the sale of shares in the rabbi trust). In the event of a Change of Control, payment of all balances shall be made in cash. |
a) | Retirement. Upon the Participant attaining his or her Retirement Date ( i.e ., Termination of Employment at or after Normal Retirement Age), the Bank shall pay the portion of Participant's Retirement Account that is not forfeited pursuant to Sections 4 or 9 in accordance with the Participant’s Election on the attached Payment Election. |
b) | Disability. If Participant’s Termination of Employment is due to Disability, the Bank shall pay the Participant's Retirement Account in accordance with the Participant’s Election on the attached Payment Election for a Retirement under subsection a) above (if Termination of Employment is at or after Normal Retirement Age) or as elected on the attached Payment Election for a Termination without Cause under subsection e) below (if Termination of Employment is before Normal Retirement Age). |
c) | Death. Notwithstanding any distribution election, in the event of the Participant's death (i) while employed by the Bank or the Holding Company, the full amount of Participant's vested Retirement Account shall be paid to the Participant's heirs, devisees or designated beneficiaries in one lump sum payment within sixty (60) days following the Participant’s death, or (ii) after his Termination of Employment, the remaining portion of Participant’s Retirement Account, if any, which had not been previously forfeited or paid out shall be paid to the Participant's heirs, devisees or designated beneficiaries in one lump sum payment within sixty (60) days following the Participant’s death. |
d) | Change of Control. In the event of a Change of Control, the Bank shall pay the full amount of the Participant's Retirement Account (or the remaining portion of the Participant’s Retirement Account, if any, which had not been previously forfeited or paid out in connection with a prior Termination of Employment) in a lump sum immediately prior to the Change of Control. |
e) | Termination without Cause. In the event of the Participant’s Termination of Employment with the Bank other than for Cause before Normal Retirement Age, the Bank shall pay the portion of Participant's Retirement Account that is not forfeited pursuant to Sections 4 or 9 in accordance with the Participant’s Election on the attached Payment Election. |
11. | Beneficiary Designation . The Participant shall have the right, at any time to submit a Beneficiary Designation Form designating primary and secondary beneficiaries to whom payment under this Plan shall be made in the event of death prior to complete distribution of the benefits due and payable under the Plan. Each beneficiary designation shall become effective only when receipt thereof is acknowledged in writing by the Bank. The Participant's Beneficiary designation shall be deemed automatically revoked if the Beneficiary predeceases the Participant or if the Participant names a spouse as beneficiary and the marriage is subsequently dissolved. If the Participant dies without a valid beneficiary designation, all payments shall be made to the Participant's estate. |
12. | Assignment of Rights. Neither the Participant nor any designated beneficiary shall have any right to sell, assign, transfer, or otherwise convey the right to receive any payments hereunder without the prior written consent of the Bank. |
13. | Domestic Relations Orders . Notwithstanding any other provision of this Plan regarding the time or form of payment to the contrary, the Committee may in its sole discretion pay, or direct payment of all or any portion of the Participant’s Retirement Account directly to an alternate payee in order to comply with a domestic relations order (“DRO”) as defined in Code Section 414(p)(1)(B). The Committee may, but is not required to, establish regular procedures for reviewing and commenting on draft DROs before issuance by the family court and for advising the Participant and alternate payee regarding the changes which are required in a DRO issued by the court to make it acceptable to the Plan. To facilitate any payment to be made in compliance with a DRO, the Committee shall have the right, but shall not be required, to establish a separate account for the alternate payee and may, but shall not be required, to allow the alternate payee to self-direct the deemed investment thereof subject to such conditions as it deems appropriate. The Committee may in its sole discretion decide to make all payments required in a DRO in cash, without regard to whether the Participant’s Retirement Account has deemed investments in Shares. Any payment made under this Section to an alternate payee shall reduce the Retirement Account of the Participant by the amount thereof, and shall fully discharge the Bank’s obligation under this Plan or otherwise with respect to such amount. No payment made by the Bank to an alternate payee with respect to a Participant shall constitute a waiver of the Bank’s right to refuse to accept another DRO concerning any remaining account of the Participant, nor shall the fact of such payment affect in any way the applicability of this Section to any other Participant. Any payments made under a DRO to an alternate payee shall be net of any applicable withholding. This Section (and any DRO) shall be interpreted and applied in a manner that complies with the applicable provisions of Section 409A of the Code and the applicable regulations and other guidance promulgated thereunder. |
14. | Unfunded and Unsecured Obligation. Neither the Holding Company nor the Bank is required to earmark or otherwise set aside any funds or other assets or in any way secure payment of its obligations under the Plan. Any asset which may be set aside by the Holding Company or the Bank for accounting purposes or in a rabbi trust is not to be treated as held in trust for any Participant or for his or her account. Each Participant shall have only the rights of a general, unsecured creditor of the Holding Company and/or the Bank with respect to any of his or her rights under the Plan. |
15. | Claims Procedure. |
a) | The Participant, or his beneficiary hereunder or authorized representative (the “Claimant”), may file a claim for benefits under the Plan by written communication to the Committee or its designee. A claim is not considered filed until such communication is actually received. Within 90 days (or, if special circumstances require an extension of time for processing, 180 days, in which case written or electronic notice and description of such special circumstances, and the date by which the Committee expects to tender its decision, shall be provided within the initial 90-day period) after the filing of the claim, the Committee will either: |
(i) | approve the claim and take appropriate steps for satisfaction of the claim; or |
(ii) | if the claim is wholly or partially denied, advise the Claimant of such denial by furnishing to him a written or electronic notice of such denial setting forth (A) the specific reason or reasons for the denial; (B) specific reference to pertinent provisions of the Plan on which the denial is based and, if the denial is based in whole or in part on any rule of construction or interpretation adopted by the Committee, a reference to such rule, a copy of which shall be provided to the Claimant; (C) a description of any additional material or information necessary for the Claimant to perfect the claim and an explanation of the reasons why such material or information is necessary; and (D) a description of the Plan’s appeal procedures and the time limits applicable to such procedures, including a statement of the Claimant’s right to bring a civil action under Section 502(a) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) following a denial of the claim on appeal. |
b) | The Claimant may request a review of any denial of his claim by written application to the Committee within 60 days after receipt of the notice of denial of such claim. The Committee shall afford the Claimant an opportunity to review and receive, without charge, all relevant documents, information and records and to submit issues and comments in writing to the Committee. The Committee shall take into account all comments, documents, records and other information submitted by the Claimant relating to the claim regardless of whether the information was submitted or considered in the initial benefit determination. Within 60 days (or, if special circumstances require an extension of time for processing, 120 days, in which case notice and description of such special circumstances and the expected date of decision shall be provided within the initial 60-day period) after receipt of written application for review, the Committee will provide the Claimant with its decision in writing or by electronic communication, including, if the Claimant’s claim is not approved, (A) specific reasons for the decision, (B) specific references to the Plan provisions on which the decision is based, (C) a statement that the Claimant may receive on request all relevant records at no charge; and (D) a statement of the Claimant’s right to bring an action under Section 502(a) of ERISA. |
c) | The internal claims procedures set forth in this Section 15 are mandatory. If a Claimant fails to follow these claims procedures, or to timely file a request for appeal in accordance with this Section 15, the denial of the Claim shall become final and binding on all persons for all purposes. |
16. | No Contract of Employment. Nothing contained herein shall be construed to be a contract of employment for any term of years, nor as conferring upon the Participant the right to continue to be employed by the Bank, in any capacity, nor in any way vary the Bank’s policy of at-will employment, which may be varied only by the express terms of a contract of employment. It is expressly understood by the parties hereto that this Plan relates exclusively to the compensation as set forth in this Plan. |
17. | Construction of Agreement. Any payments under this Plan shall be independent of, and in addition to, those under any other retirement plan, program, or agreement which may be in effect between the parties hereto, or any other compensation payable to the Participant or the Participant’s designated beneficiary by the Bank. All legal issues pertaining to the Plan shall be determined in accordance with ERISA and, to the extent not preempted thereby, the laws of the State of Delaware. |
18. | Amendment and Termination. The Bank shall have the right at any time to modify, alter or amend this Plan, in whole or in part, provided that the amendment shall not reduce any Participant's interest in the Plan, calculated as of the date on which the amendment is adopted. Upon Plan termination, the Bank may accelerate the distribution of Retirement Account balances only in accordance with the requirements of Section 409A and the regulations issued thereunder. Bank reserves the right to change this Plan, including reducing any Participant’s interest in this Plan in order to make such Plan compliant with Section 409A. |
19.
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The Committee.
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a)
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The Committee shall, for the purpose of administering the Plan, choose a secretary and an assistant secretary (either of whom is hereafter referred to as "Secretary") who shall keep minutes of the Committee's proceedings and all records and documents pertaining to the Committee’s administration of the Plan. The Secretary may execute any certificates or other written direction on behalf of the Committee. A majority of the members of the Committee shall constitute a quorum.
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b) | The Committee on behalf of the Participants shall be charged with the general administration of the Plan and shall have all powers necessary to accomplish those purposes including, but not by way of limitation, the following: |
- | to construe, interpret, and administer the Plan; |
- | to make determinations under the Plan, including, without limitation, determinations regarding eligibility to participate, the vesting and forfeiture of benefits, and the computation of the amount of benefits; |
- | to establish a rabbi trust for the Plan and to deposit amounts calculated under Sections 5 and 6 into such trust established by the Committee (provided, however, that notwithstanding anything in the Plan or other agreement to the contrary, in no event shall a contribution be made to a trust for the purpose of restricting assets to the provision of benefits under the Plan in connection with a change in the financial health of the Bank or any affiliated entity in a manner that would result in the inclusion of amounts in the gross income of the Participants pursuant to Section 409A(b) of the Code; |
- | to maintain the necessary records for the administration of the Plan; |
- | to engage the services of counsel (who may, if appropriate in the judgment of the Committee, be counsel for the Bank), actuaries, and agents whom it may deem advisable to assist it with the performance of its duties hereunder; and |
- | to make and publish such rules for the regulation of the Plan as are not inconsistent with the terms hereof, including without limitation procedures to be followed to obtain benefits, and enforce the terms of the Plan and any such rules. |
c) | The members of the Committee shall serve without bond and without compensation (except for director fees) for their services hereunder. All expenses of the Committee shall be paid by the Bank. The Bank shall furnish the Committee with such clerical and other assistance as is necessary in the performance of its duties. No member of the Committee shall be liable for the act or omission of any other member of the Committee, nor for any act or omission on his or her own part, excepting only his or her own willful misconduct or gross negligence. The Bank shall indemnify and hold harmless each member of the Committee against any and all expenses and liabilities arising out of his or her membership on the Committee, excepting only expenses and liabilities arising out of his or her own willful misconduct or gross negligence. |
20. | Gross-Up Payment. Upon a Change of Control , a Participant shall be entitled to a “Gross-Up Payment” under the terms and conditions set forth herein, and such payment shall include the Excise Tax reimbursement due pursuant to subsection a) and any federal and state tax reimbursements due pursuant to subsection b). |
a) | In the event that any payment or benefit (as those terms are defined within the meaning of Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended (the “Code”)) paid, payable, distributed or distributable to a Participant (hereinafter referred to as “Payments”) pursuant to the terms of this Plan or otherwise in connection with or arising out a Change of Control would be subject to the Excise Tax imposed by Section 4999 of the Code or any interest or penalties are incurred by the Participant with respect to such Excise Tax, then the Participant will be entitled to receive an additional payment (“Gross-Up Payment”) in an amount equal to the total Excise Tax, interest and penalties imposed on the Participant as a result of the Payment and the Excise Taxes on any federal and state tax reimbursements as set forth in subsection b). |
b) | If the Bank is obligated to pay the Participant pursuant to subsection a), the Bank also shall pay the Participant an amount equal to the “total presumed federal and state taxes” that could be imposed on the Participant with respect to the Excise Tax reimbursements due to the Participant pursuant to subsection a) and the federal and state tax reimbursements due to the Participant pursuant to this subsection. For purposes of the preceding sentence, the “total presumed federal and state taxes” that could be imposed on the Participant shall be conclusively calculated using a combined tax rate equal to the sum of the (a) the highest individual income tax rate in effect under (i) Federal tax law and (ii) the tax laws of the state in which the Participant resides on the date that the payment is computed and (b) the hospital insurance portion of FICA. |
c) | No adjustments will be made in this combined rate for the deduction of state taxes on the federal return, the loss of itemized deductions or exemptions, or for any other purpose for paying the actual taxes. |
d) | It is further intended that in the event that any payments would be subject to other “penalty” taxes (in addition to the Excise Tax in subsection a)) imposed by Congress or the Internal Revenue Service that these taxes would also be included in the calculation of the Gross-Up Payment, including any federal and state tax reimbursements pursuant to subsection b). |
e) | An initial determination as to whether a Gross-Up Payment is required pursuant to the Plan and the amount of such Gross-Up Payment shall be made at the Bank’s expense by an accounting firm appointed by the Bank prior to any Change of Control. The accounting firm shall provide its determination, together with detailed supporting calculations and documentation to the Bank and the Participant prior to submission of the proposed change of control to the Holding Company’s shareholders, Board of Directors or appropriate regulators for approval. If the accounting firm determines that no Excise Tax is payable by the Participant with respect to a Payment or Payments, it shall furnish the Participant with an opinion reasonably acceptable to the Participant that no Excise Tax will be imposed with respect to any such Payment or Payments. Within ten (10) days of the delivery of the determination to the Participant, the Participant shall have the right to dispute the determination. The existence of the dispute shall not in any way affect the Participant’s right to receive the Gross-Up Payment in accordance with the determination. Upon the final resolution of a dispute, the Bank or its successor shall promptly pay to the Participant any additional amount required by such resolution. If there is no dispute, the determination shall be binding, final and conclusive upon the Bank and the Participant, except to the extent that any taxing authority subsequently makes a determination that the Excise Tax or additional Excise Tax is due and owing on the payments made to the Participant. If any taxing authority determines that the Excise Tax or additional Excise Tax is due and owing, the entity acquiring control of the Bank shall pay the Excise Tax and any penalties assessed by such taxing authority. |
f) | Notwithstanding anything contained in this Section to the contrary, in the event that according to the determination, an Excise Tax will be imposed on any Payment or Payments, the Bank or its successor shall pay to the applicable government taxing authorities as Excise Tax withholding, the amount of the Excise Tax that the Bank has actually withheld from the Payment or Payments. |
21. | Section 409A. This Plan is intended to be consistent with the provisions of Section 409A of the Code and its provisions shall be interpreted consistent with such intent. |
a)
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Distribution Elections. If otherwise payable under the Plan, a Participant’s Retirement Account balance shall be distributed as elected by Participant on the attached Payment Election for a Retirement under subsection a) of Section 10 (if Termination of Employment is at or after Normal Retirement Age) or as elected on the attached Payment Election for a Termination without Cause under subsection e) of Section 10 (if Termination of Employment is before Normal Retirement Age), provided that such election has been made prior to the calendar year in which the Participant performs the services for which the contributions to the Participant’s Retirement Account are made (or otherwise in accordance with the requirements of Section 409A), and in accordance with such procedures as shall be established by the Bank. If no such election has been made for either of such payment events, the Participant shall be deemed to have elected to receive payment upon such payment event in a lump sum on the later of (A) the 15th day of the month following the six-month anniversary of the date of Termination of Employment (or, for Plan Awards granted for years after 2013, the 15
th
day of the month following the twelve-month anniversary of the date of Termination of Employment) or (B) January 15th of the year following the date of Termination of Employment. The Bank has the discretion to establish sub-accounts for one or more Participants and to maintain separate payment elections in respect of each such sub-account provided that such elections comply with the payment election requirements of Section 409A. The Bank also has the discretion to permit changes in payment elections provided such changes are made in accordance with the requirements of Section 409A and such procedures as shall be established by the Bank.
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b)
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Distributions To A Specified Employee. Notwithstanding any provision to the contrary in the Plan, a distribution to which a Participant would otherwise be entitled upon a Termination of Employment, and that would otherwise be paid on or within six-months following such Termination of Employment, will be delayed until one day following the expiration of the six (6)-month period from the date of the Participant’s Termination of Employment if the Bank in good faith determines that the Participant is a “specified employee,” as defined in Section 409A and regulations issued thereunder, at the time of such Termination of Employment, and that the delayed commencement is required in order to avoid a prohibited distribution under Code Section 409A(a)(2). In the event that a delay of any payment is required under this provision, such payment shall be accumulated and paid in a single lump sum on the delayed payment date, and any remaining payments due under the Plan shall be paid in accordance with the normal payment dates specified for them herein.
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22. | Headings . Headings and subheadings in this Plan are inserted for convenience or reference only and are not to be considered in the construction of the provisions hereof. |
23 . | Intent . To the extent that this Plan may be construed to be a plan maintained to provide deferred compensation, it is intended to be limited to a “select group of management or highly compensated employees” within the meaning of Section 201(2) of ERISA. The Plan is intended to be exempt from the participation, vesting, funding, and fiduciary requirements of Title 1 of ERISA, to the fullest extent permitted under the law. The Plan shall at all times be “unfunded” within the meaning of ERISA. This Plan and rights hereunder shall be subject to the Federal Deposit Insurance Act and the rules, regulations, policies and guidance of the Federal Deposit Insurance Corporation including, without limitation, 12 C.F.R. Part 359. |
24. | Gender and Number . Where the context permits, words in any gender shall, include any other gender; words in the singular shall include the plural, and the plural shall include the singular. |
1. | I have reviewed this annual report on Form 10-K of Farmers & Merchants Bancorp; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
Date: March 13, 2015
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/s/ Kent A. Steinwert
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Kent A. Steinwert
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Chairman, President
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& Chief Executive Officer
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1. | I have reviewed this annual report on Form 10-K of Farmers & Merchants Bancorp; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
Date: March 13, 2015
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/s/ Stephen W. Haley
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Stephen W. Haley
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Executive Vice President & Chief Financial Officer
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1. | the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. $ 78m or 78o(d)); and |
2. | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
March 13, 2015
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/s/ Kent A. Steinwert
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Kent A. Steinwert
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Chairman, President
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& Chief Executive Officer
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/s/ Stephen W. Haley
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Stephen W. Haley
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Executive Vice President & Chief Financial Officer
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