☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Michigan
|
38-3391345
|
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
Large accelerated filer ☐
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Accelerated filer ☒
|
Non-accelerated filer ☐
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Smaller reporting company ☐
|
(Do not check if smaller reporting company)
|
Page
Number
|
|||
Part I.
|
Financial Information:
|
||
Item 1.
|
|||
4
|
|||
10
|
|||
Item 2.
|
|||
40
|
|||
Item 3.
|
|||
55
|
|||
Item 4.
|
|||
56
|
|||
Part II.
|
Other Information:
|
||
Item 2.
|
|||
57
|
|||
Item 6.
|
|||
57
|
|||
58
|
Three Months
Ended
September 30,
2016
|
Three Months
Ended
September 30,
2015
|
Nine Months
Ended
September 30,
2016
|
Nine Months
Ended
September 30,
2015
|
|||||||||||||
Interest income
|
||||||||||||||||
Loans, including fees
|
$
|
11,838
|
$
|
11,250
|
$
|
35,228
|
$
|
33,365
|
||||||||
Securities
|
||||||||||||||||
Taxable
|
584
|
529
|
1,699
|
1,531
|
||||||||||||
Tax-exempt
|
451
|
394
|
1,325
|
1,114
|
||||||||||||
FHLB Stock
|
122
|
120
|
368
|
348
|
||||||||||||
Federal funds sold and other short-term investments
|
127
|
134
|
383
|
318
|
||||||||||||
Total interest income
|
13,122
|
12,427
|
39,003
|
36,676
|
||||||||||||
Interest expense
|
||||||||||||||||
Deposits
|
431
|
521
|
1,333
|
1,749
|
||||||||||||
Other borrowings
|
418
|
449
|
1,318
|
1,317
|
||||||||||||
Long-term debt
|
371
|
336
|
1,104
|
992
|
||||||||||||
Total interest expense
|
1,220
|
1,306
|
3,755
|
4,058
|
||||||||||||
Net interest income
|
11,902
|
11,121
|
35,248
|
32,618
|
||||||||||||
Provision for loan losses
|
(250
|
)
|
(250
|
)
|
(1,100
|
)
|
(1,750
|
)
|
||||||||
Net interest income after provision for loan losses
|
12,152
|
11,371
|
36,348
|
34,368
|
||||||||||||
Noninterest income
|
||||||||||||||||
Service charges and fees
|
1,152
|
1,150
|
3,312
|
3,248
|
||||||||||||
Net gains on mortgage loans
|
1,175
|
705
|
2,235
|
2,249
|
||||||||||||
Trust fees
|
790
|
711
|
2,286
|
2,168
|
||||||||||||
ATM and debit card fees
|
1,272
|
1,220
|
3,715
|
3,549
|
||||||||||||
Gain on sale of securities
|
---
|
36
|
99
|
119
|
||||||||||||
Bank owned life insurance ("BOLI") income
|
146
|
170
|
748
|
503
|
||||||||||||
Other
|
540
|
492
|
1,824
|
1,455
|
||||||||||||
Total noninterest income
|
5,075
|
4,484
|
14,219
|
13,291
|
||||||||||||
Noninterest expense
|
||||||||||||||||
Salaries and benefits
|
6,166
|
6,158
|
18,521
|
18,474
|
||||||||||||
Occupancy of premises
|
901
|
948
|
2,784
|
2,823
|
||||||||||||
Furniture and equipment
|
772
|
835
|
2,476
|
2,431
|
||||||||||||
Legal and professional
|
153
|
231
|
500
|
661
|
||||||||||||
Marketing and promotion
|
275
|
263
|
825
|
831
|
||||||||||||
Data processing
|
741
|
619
|
2,089
|
1,845
|
||||||||||||
FDIC assessment
|
166
|
283
|
638
|
854
|
||||||||||||
Interchange and other card expense
|
334
|
304
|
927
|
864
|
||||||||||||
Bond and D&O Insurance
|
132
|
147
|
395
|
438
|
||||||||||||
Net losses (gains) on repossessed and foreclosed properties
|
115
|
(160
|
)
|
409
|
260
|
|||||||||||
Administration and disposition of problem assets
|
210
|
393
|
787
|
1,053
|
||||||||||||
Other
|
1,308
|
1,233
|
3,943
|
3,804
|
||||||||||||
Total noninterest expenses
|
11,273
|
11,254
|
34,294
|
34,338
|
||||||||||||
Income before income tax
|
5,954
|
4,601
|
16,273
|
13,321
|
||||||||||||
Income tax expense
|
1,350
|
1,400
|
4,429
|
4,065
|
||||||||||||
Net income
|
$
|
4,604
|
$
|
3,201
|
$
|
11,844
|
$
|
9,256
|
||||||||
Basic earnings per common share
|
$
|
0.14
|
$
|
0.09
|
$
|
0.35
|
$
|
0.27
|
||||||||
Diluted earnings per common share
|
$
|
0.14
|
$
|
0.09
|
$
|
0.35
|
$
|
0.27
|
||||||||
Cash dividends per common share
|
$
|
0.03
|
$
|
0.03
|
$
|
0.09
|
$
|
0.08
|
Three Months
Ended
September 30,
2016
|
Three Months
Ended
September 30,
2015
|
Nine Months
Ended
September 30,
2016
|
Nine Months
Ended
September 30,
2015
|
|||||||||||||
Net income
|
$
|
4,604
|
$
|
3,201
|
$
|
11,844
|
$
|
9,256
|
||||||||
Other comprehensive income:
|
||||||||||||||||
Unrealized gains (losses):
|
||||||||||||||||
Net change in unrealized gains (losses) on securities available for sale
|
120
|
925
|
1,774
|
991
|
||||||||||||
Tax effect
|
(42
|
)
|
(324
|
)
|
(621
|
)
|
(347
|
)
|
||||||||
Net change in unrealized gains (losses) on securities available for sale, net of tax
|
78
|
601
|
1,153
|
644
|
||||||||||||
Less: reclassification adjustments:
|
||||||||||||||||
Reclassification for gains included in net income
|
---
|
36
|
99
|
119
|
||||||||||||
Tax effect
|
---
|
(13
|
)
|
(35
|
)
|
(42
|
)
|
|||||||||
Reclassification for gains included in net income, net of tax
|
---
|
23
|
64
|
77
|
||||||||||||
Other comprehensive income (loss), net of tax
|
78
|
578
|
1,089
|
567
|
||||||||||||
Comprehensive income
|
$
|
4,682
|
$
|
3,779
|
$
|
12,933
|
$
|
9,823
|
Common
Stock
|
Retained
Deficit
|
Accumulated
Other
Comprehensive
Income (Loss)
|
Total
Shareholders'
Equity
|
|||||||||||||
Balance, January 1, 2015
|
$
|
216,460
|
$
|
(74,002
|
)
|
$
|
61
|
$
|
142,519
|
|||||||
Net income for the nine months ended September 30, 2015
|
---
|
9,256
|
---
|
9,256
|
||||||||||||
Cash dividends at $.08 per share
|
---
|
(2,693
|
)
|
---
|
(2,693
|
)
|
||||||||||
Net change in unrealized gain on securities available for sale, net of tax
|
---
|
---
|
567
|
567
|
||||||||||||
Tax effect of expired common stock warrants
|
(280
|
)
|
---
|
---
|
(280
|
)
|
||||||||||
Stock compensation expense
|
364
|
---
|
---
|
364
|
||||||||||||
Balance, September 30, 2015
|
$
|
216,544
|
$
|
(67,439
|
)
|
$
|
628
|
$
|
149,733
|
|||||||
Balance, January 1, 2016
|
$
|
216,540
|
$
|
(64,910
|
)
|
$
|
347
|
$
|
151,977
|
|||||||
Net income for the nine months ended September 30, 2016
|
---
|
11,844
|
---
|
11,844
|
||||||||||||
Cash dividends at $.09 per share
|
---
|
(3,042
|
)
|
---
|
(3,042
|
)
|
||||||||||
Repurchase of 4,373 shares for taxes withheld on vested restricted stock
|
(31
|
)
|
---
|
---
|
(31
|
)
|
||||||||||
Net change in unrealized gain on securities available for sale, net of tax
|
---
|
---
|
1,089
|
1,089
|
||||||||||||
Stock compensation expense
|
408
|
---
|
---
|
408
|
||||||||||||
Balance, September 30, 2016
|
$
|
216,917
|
$
|
(56,108
|
)
|
$
|
1,436
|
$
|
162,245
|
Nine Months
Ended
September 30,
2016
|
Nine Months
Ended
September 30,
2015
|
|||||||
Cash flows from operating activities
|
||||||||
Net income
|
$
|
11,844
|
$
|
9,256
|
||||
Adjustments to reconcile net income to net cash from operating activities:
|
||||||||
Depreciation and amortization
|
2,149
|
2,167
|
||||||
Stock compensation expense
|
408
|
364
|
||||||
Tax effect of expired common stock warrants
|
---
|
(280
|
)
|
|||||
Provision for loan losses
|
(1,100
|
)
|
(1,750
|
)
|
||||
Origination of loans for sale
|
(76,096
|
)
|
(76,622
|
)
|
||||
Proceeds from sales of loans originated for sale
|
79,094
|
78,323
|
||||||
Net gains on mortgage loans
|
(2,235
|
)
|
(2,249
|
)
|
||||
Gain on sales of securities
|
(99
|
)
|
(119
|
)
|
||||
Write-down of other real estate
|
774
|
496
|
||||||
Net gain on sales of other real estate
|
(365
|
)
|
(237
|
)
|
||||
Change in net deferred tax asset
|
(167
|
)
|
1,354
|
|||||
Change in accrued interest receivable and other assets
|
(1,142
|
)
|
(1,594
|
)
|
||||
Earnings in bank-owned life insurance
|
(748
|
)
|
(503
|
)
|
||||
Change in accrued expenses and other liabilities
|
1,341
|
(827
|
)
|
|||||
Net cash from operating activities
|
13,658
|
7,779
|
||||||
Cash flows from investing activities
|
||||||||
Loan originations and payments, net
|
(37,699
|
)
|
(74,691
|
)
|
||||
Change in interest-bearing deposits in other financial institutions
|
20,000
|
---
|
||||||
Purchases of securities available for sale
|
(72,107
|
)
|
(34,536
|
)
|
||||
Purchases of securities held to maturity
|
(21,977
|
)
|
(24,592
|
)
|
||||
Purchase of bank-owned life insurance
|
(10,000
|
)
|
---
|
|||||
Purchase FHLB stock
|
---
|
(320
|
)
|
|||||
Proceeds from:
|
||||||||
Maturities and calls of securities
|
59,680
|
29,191
|
||||||
Sales of securities available for sale
|
9,648
|
19,848
|
||||||
Principal paydowns on securities
|
3,027
|
2,888
|
||||||
Sales of other real estate
|
4,155
|
3,613
|
||||||
Death benefit from bank-owned life insurance
|
518
|
---
|
||||||
Additions to premises and equipment
|
(674
|
)
|
(775
|
)
|
||||
Net cash from investing activities
|
(45,429
|
)
|
(79,374
|
)
|
||||
Cash flows from financing activities
|
||||||||
Change in deposits
|
(76,885
|
)
|
60,524
|
|||||
Repayments and maturities of other borrowed funds
|
(21,996
|
)
|
(1,938
|
)
|
||||
Proceeds from other borrowed funds
|
10,000
|
10,000
|
||||||
Cash dividends paid
|
(3,042
|
)
|
(2,693
|
)
|
||||
Repurchase of shares for taxes withheld on vested restricted stock
|
(31
|
)
|
---
|
|||||
Net cash from financing activities
|
(91,954
|
)
|
65,893
|
|||||
Net change in cash and cash equivalents
|
(123,725
|
)
|
(5,702
|
)
|
||||
Cash and cash equivalents at beginning of period
|
181,476
|
129,455
|
||||||
Cash and cash equivalents at end of period
|
$
|
57,751
|
$
|
123,753
|
Nine Months
Ended
September 30,
2016
|
Nine Months
Ended
September 30,
2015
|
|||||||
Supplemental cash flow information
|
||||||||
Interest paid
|
$
|
3,770
|
$
|
4,078
|
||||
Income taxes paid
|
4,960
|
4,300
|
||||||
Supplemental noncash disclosures:
|
||||||||
Transfers from loans to other real estate
|
102
|
1,301
|
||||||
Security settlement
|
(1,315
|
)
|
(520
|
)
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
|||||||||||||
September 30, 2016
|
||||||||||||||||
Available for Sale:
|
||||||||||||||||
U.S. Treasury and federal agency securities
|
$
|
85,734
|
$
|
496
|
$
|
(40
|
)
|
$
|
86,190
|
|||||||
U.S. Agency MBS and CMOs
|
12,984
|
134
|
(6
|
)
|
13,112
|
|||||||||||
Tax-exempt state and municipal bonds
|
36,592
|
1,113
|
(17
|
)
|
37,688
|
|||||||||||
Taxable state and municipal bonds
|
32,117
|
446
|
(17
|
)
|
32,546
|
|||||||||||
Corporate bonds and other debt securities
|
13,266
|
86
|
(3
|
)
|
13,349
|
|||||||||||
Other equity securities
|
1,500
|
18
|
---
|
1,518
|
||||||||||||
$
|
182,193
|
$
|
2,293
|
$
|
(83
|
)
|
$
|
184,403
|
||||||||
Held to Maturity
|
||||||||||||||||
Tax-exempt state and municipal bonds
|
$
|
58,893
|
$
|
1,480
|
$
|
---
|
$
|
60,373
|
||||||||
December 31, 2015
|
||||||||||||||||
Available for Sale:
|
||||||||||||||||
U.S. Treasury and federal agency securities
|
$
|
74,618
|
$
|
48
|
$
|
(274
|
)
|
$
|
74,392
|
|||||||
U. S. Agency MBS and CMOs
|
13,828
|
35
|
(108
|
)
|
13,755
|
|||||||||||
Tax-exempt state and municipal bonds
|
32,943
|
692
|
(37
|
)
|
33,598
|
|||||||||||
Taxable state and municipal bonds
|
28,554
|
246
|
(37
|
)
|
28,763
|
|||||||||||
Corporate bonds and other debt securities
|
14,838
|
19
|
(44
|
)
|
14,813
|
|||||||||||
Other equity securities
|
1,500
|
---
|
(6
|
)
|
1,494
|
|||||||||||
|
$
|
166,281
|
$
|
1,040
|
$
|
(506
|
)
|
$
|
166,815
|
|||||||
|
||||||||||||||||
Held to Maturity:
|
||||||||||||||||
Tax-exempt state and municipal bonds
|
$
|
51,856
|
$
|
986
|
$
|
(5
|
)
|
$
|
52,837
|
Held–to-Maturity Securities
|
Available-for-Sale Securities
|
|||||||||||||||
Amortized
Cost
|
Fair
Value
|
Amortized
Cost
|
Fair
Value
|
|||||||||||||
Due in one year or less
|
$
|
22,529
|
$
|
22,538
|
$
|
13,448
|
$
|
13,513
|
||||||||
Due from one to five years
|
15,546
|
16,228
|
95,679
|
96,614
|
||||||||||||
Due from five to ten years
|
8,618
|
9,148
|
56,285
|
57,352
|
||||||||||||
Due after ten years
|
12,200
|
12,459
|
15,281
|
15,406
|
||||||||||||
$
|
58,893
|
$
|
60,373
|
$
|
180,693
|
$
|
182,885
|
Less than 12 Months
|
12 Months or More
|
Total
|
||||||||||||||||||||||
September 30, 2016
|
Fair
Value
|
Unrealized
Loss
|
Fair
Value
|
Unrealized
Loss
|
Fair
Value
|
Unrealized
Loss
|
||||||||||||||||||
U.S. Treasury and federal agency securities
|
$
|
15,757
|
$
|
(38
|
)
|
$
|
3,078
|
$
|
(2
|
)
|
$
|
18,835
|
$
|
(40
|
)
|
|||||||||
U.S. Agency MBS and CMOs
|
1,355
|
(6
|
)
|
---
|
---
|
1,355
|
(6
|
)
|
||||||||||||||||
Tax-exempt state and municipal bonds
|
2,718
|
(17
|
)
|
---
|
---
|
2,718
|
(17
|
)
|
||||||||||||||||
Taxable state and municipal bonds
|
3,300
|
(17
|
)
|
---
|
---
|
3,300
|
(17
|
)
|
||||||||||||||||
Corporate bonds and other debt securities
|
1,527
|
(3
|
)
|
---
|
---
|
1,527
|
(3
|
)
|
||||||||||||||||
Other equity securities
|
---
|
---
|
---
|
---
|
---
|
---
|
||||||||||||||||||
Total temporarily impaired
|
$
|
24,657
|
$
|
(81
|
)
|
$
|
3,078
|
$
|
(2
|
)
|
$
|
27,735
|
$
|
(83
|
)
|
Less than 12 Months
|
12 Months or More
|
Total
|
||||||||||||||||||||||
December 31, 2015
|
Fair
Value
|
Unrealized
Loss
|
Fair
Value
|
Unrealized
Loss
|
Fair
Value
|
Unrealized
Loss
|
||||||||||||||||||
U.S. Treasury and federal agency securities
|
$
|
35,090
|
$
|
(187
|
)
|
$
|
7,036
|
$
|
(82
|
)
|
$
|
42,126
|
$
|
(269
|
)
|
|||||||||
U.S. Agency MBS and CMOs
|
8,842
|
(108
|
)
|
---
|
---
|
8,842
|
(108
|
)
|
||||||||||||||||
Tax-exempt state and municipal bonds
|
3,487
|
(9
|
)
|
2,022
|
(33
|
)
|
5,509
|
(42
|
)
|
|||||||||||||||
Taxable state and municipal bonds
|
8,158
|
(29
|
)
|
640
|
(8
|
)
|
8,798
|
(37
|
)
|
|||||||||||||||
Corporate bonds and other debt securities
|
9,330
|
(47
|
)
|
499
|
(2
|
)
|
9,829
|
(49
|
)
|
|||||||||||||||
Other equity securities
|
1,494
|
(6
|
)
|
---
|
---
|
1,494
|
(6
|
)
|
||||||||||||||||
Total temporarily impaired
|
$
|
66,401
|
$
|
(386
|
)
|
$
|
10,197
|
$
|
(125
|
)
|
$
|
76,598
|
$
|
(511
|
)
|
September 30,
2016
|
December 31,
2015
|
|||||||
Commercial and industrial
|
$
|
423,102
|
$
|
377,298
|
||||
Commercial real estate:
|
||||||||
Residential developed
|
12,784
|
10,448
|
||||||
Unsecured to residential developers
|
4,736
|
7,372
|
||||||
Vacant and unimproved
|
38,417
|
42,881
|
||||||
Commercial development
|
380
|
559
|
||||||
Residential improved
|
71,903
|
67,922
|
||||||
Commercial improved
|
281,984
|
289,651
|
||||||
Manufacturing and industrial
|
89,864
|
89,839
|
||||||
Total commercial real estate
|
500,068
|
508,672
|
||||||
Consumer
|
||||||||
Residential mortgage
|
216,763
|
209,972
|
||||||
Unsecured
|
454
|
637
|
||||||
Home equity
|
88,295
|
92,716
|
||||||
Other secured
|
7,713
|
8,637
|
||||||
Total consumer
|
313,225
|
311,962
|
||||||
Total loans
|
1,236,395
|
1,197,932
|
||||||
Allowance for loan losses
|
(16,847
|
)
|
(17,081
|
)
|
||||
$
|
1,219,548
|
$
|
1,180,851
|
Three months ended September 30, 2016
|
Commercial
and
Industrial
|
Commercial
Real Estate
|
Consumer
|
Unallocated
|
Total
|
|||||||||||||||
Beginning balance
|
$
|
4,960
|
$
|
8,065
|
$
|
3,894
|
$
|
40
|
$
|
16,959
|
||||||||||
Charge-offs
|
---
|
---
|
(46
|
)
|
---
|
(46
|
)
|
|||||||||||||
Recoveries
|
50
|
95
|
39
|
---
|
184
|
|||||||||||||||
Provision for loan losses
|
515
|
(548
|
)
|
(190
|
)
|
(27
|
)
|
(250
|
)
|
|||||||||||
Ending Balance
|
$
|
5,525
|
$
|
7,612
|
$
|
3,697
|
$
|
13
|
$
|
16,847
|
Three months ended September 30, 2015
|
Commercial
and
Industrial
|
Commercial
Real Estate
|
Consumer
|
Unallocated
|
Total
|
|||||||||||||||
Beginning balance
|
$
|
6,381
|
$
|
7,940
|
$
|
3,831
|
$
|
30
|
$
|
18,182
|
||||||||||
Charge-offs
|
---
|
---
|
(170
|
)
|
---
|
(170
|
)
|
|||||||||||||
Recoveries
|
238
|
104
|
113
|
---
|
455
|
|||||||||||||||
Provision for loan losses
|
(725
|
)
|
343
|
135
|
(3
|
)
|
(250
|
)
|
||||||||||||
Ending Balance
|
$
|
5,894
|
$
|
8,387
|
$
|
3,909
|
$
|
27
|
$
|
18,217
|
Nine months ended September 30, 2016
|
Commercial
and
Industrial
|
Commercial
Real Estate
|
Consumer
|
Unallocated
|
Total
|
|||||||||||||||
Beginning balance
|
$
|
4,826
|
$
|
8,457
|
$
|
3,761
|
$
|
37
|
$
|
17,081
|
||||||||||
Charge-offs
|
---
|
---
|
(158
|
)
|
---
|
(158
|
)
|
|||||||||||||
Recoveries
|
123
|
772
|
129
|
---
|
1,024
|
|||||||||||||||
Provision for loan losses
|
576
|
(1,617
|
)
|
(35
|
)
|
(24
|
)
|
(1,100
|
)
|
|||||||||||
Ending Balance
|
$
|
5,525
|
$
|
7,612
|
$
|
3,697
|
$
|
13
|
$
|
16,847
|
Nine months ended September 30, 2015
|
Commercial
and
Industrial
|
Commercial
Real Estate
|
Consumer
|
Unallocated
|
Total
|
|||||||||||||||
Beginning balance
|
$
|
6,173
|
$
|
8,690
|
$
|
4,046
|
$
|
53
|
$
|
18,962
|
||||||||||
Charge-offs
|
(172
|
)
|
---
|
(277
|
)
|
---
|
(449
|
)
|
||||||||||||
Recoveries
|
365
|
829
|
260
|
---
|
1,454
|
|||||||||||||||
Provision for loan losses
|
(472
|
)
|
(1,132
|
)
|
(120
|
)
|
(26
|
)
|
(1,750
|
)
|
||||||||||
Ending Balance
|
$
|
5,894
|
$
|
8,387
|
$
|
3,909
|
$
|
27
|
$
|
18,217
|
September 30, 2016
|
Commercial
and
Industrial
|
Commercial
Real Estate
|
Consumer
|
Unallocated
|
Total
|
|||||||||||||||
Allowance for loan losses:
|
||||||||||||||||||||
Ending allowance attributable to loans:
|
||||||||||||||||||||
Individually reviewed for impairment
|
$
|
562
|
$
|
410
|
$
|
761
|
$
|
---
|
$
|
1,733
|
||||||||||
Collectively evaluated for impairment
|
4,963
|
7,202
|
2,936
|
13
|
15,114
|
|||||||||||||||
Total ending allowance balance
|
$
|
5,525
|
$
|
7,612
|
$
|
3,697
|
$
|
13
|
$
|
16,847
|
||||||||||
Loans:
|
||||||||||||||||||||
Individually reviewed for impairment
|
$
|
5,778
|
$
|
12,627
|
$
|
12,350
|
$
|
---
|
$
|
30,755
|
||||||||||
Collectively evaluated for impairment
|
417,324
|
487,441
|
300,875
|
---
|
1,205,640
|
|||||||||||||||
Total ending loans balance
|
$
|
423,102
|
$
|
500,068
|
$
|
313,225
|
$
|
---
|
$
|
1,236,395
|
December 31, 2015
|
Commercial
and
Industrial
|
Commercial
Real Estate
|
Consumer
|
Unallocated
|
Total
|
|||||||||||||||
Allowance for loan losses:
|
||||||||||||||||||||
Ending allowance attributable to loans:
|
||||||||||||||||||||
Individually reviewed for impairment
|
$
|
673
|
$
|
436
|
$
|
829
|
$
|
---
|
$
|
1,938
|
||||||||||
Collectively evaluated for impairment
|
4,153
|
8,021
|
2,932
|
37
|
15,143
|
|||||||||||||||
Total ending allowance balance
|
$
|
4,826
|
$
|
8,457
|
$
|
3,761
|
$
|
37
|
$
|
17,081
|
||||||||||
Loans:
|
||||||||||||||||||||
Individually reviewed for impairment
|
$
|
7,718
|
$
|
17,569
|
$
|
13,463
|
$
|
---
|
$
|
38,750
|
||||||||||
Collectively evaluated for impairment
|
369,580
|
491,103
|
298,499
|
---
|
1,159,182
|
|||||||||||||||
Total ending loans balance
|
$
|
377,298
|
$
|
508,672
|
$
|
311,962
|
$
|
---
|
$
|
1,197,932
|
September 30, 2016
|
Unpaid
Principal
Balance
|
Recorded
Investment
|
Allowance
Allocated
|
|||||||||
With no related allowance recorded:
|
||||||||||||
Commercial and industrial
|
$
|
1,910
|
$
|
1,910
|
$
|
---
|
||||||
Commercial real estate:
|
||||||||||||
Residential developed
|
---
|
---
|
---
|
|||||||||
Unsecured to residential developers
|
---
|
---
|
---
|
|||||||||
Vacant and unimproved
|
186
|
186
|
---
|
|||||||||
Commercial development
|
---
|
---
|
---
|
|||||||||
Residential improved
|
54
|
54
|
---
|
|||||||||
Commercial improved
|
1
|
1
|
---
|
|||||||||
Manufacturing and industrial
|
---
|
---
|
---
|
|||||||||
241
|
241
|
---
|
||||||||||
Consumer:
|
||||||||||||
Residential mortgage
|
---
|
---
|
---
|
|||||||||
Unsecured
|
---
|
---
|
---
|
|||||||||
Home equity
|
---
|
---
|
---
|
|||||||||
Other secured
|
---
|
---
|
---
|
|||||||||
---
|
---
|
---
|
||||||||||
Total with no related allowance recorded
|
$
|
2,151
|
$
|
2,151
|
$
|
---
|
||||||
With an allowance recorded:
|
||||||||||||
Commercial and industrial
|
$
|
3,868
|
$
|
3,868
|
$
|
562
|
||||||
Commercial real estate:
|
||||||||||||
Residential developed
|
189
|
189
|
4
|
|||||||||
Unsecured to residential developers
|
---
|
---
|
---
|
|||||||||
Vacant and unimproved
|
216
|
216
|
5
|
|||||||||
Commercial development
|
190
|
190
|
6
|
|||||||||
Residential improved
|
4,980
|
4,980
|
223
|
|||||||||
Commercial improved
|
6,578
|
6,578
|
165
|
|||||||||
Manufacturing and industrial
|
233
|
233
|
7
|
|||||||||
12,386
|
12,386
|
410
|
||||||||||
Consumer:
|
||||||||||||
Residential mortgage
|
8,046
|
8,046
|
496
|
|||||||||
Unsecured
|
---
|
---
|
---
|
|||||||||
Home equity
|
4,304
|
4,304
|
265
|
|||||||||
Other secured
|
---
|
---
|
---
|
|||||||||
12,350
|
12,350
|
761
|
||||||||||
Total with an allowance recorded
|
$
|
28,604
|
$
|
28,604
|
$
|
1,733
|
||||||
Total
|
$
|
30,755
|
$
|
30,755
|
$
|
1,733
|
December 31, 2015
|
Unpaid
Principal
Balance
|
Recorded
Investment
|
Allowance
Allocated
|
|||||||||
With no related allowance recorded:
|
||||||||||||
Commercial and industrial
|
$
|
2,736
|
$
|
2,736
|
$
|
---
|
||||||
Commercial real estate:
|
||||||||||||
Residential developed
|
---
|
---
|
---
|
|||||||||
Unsecured to residential developers
|
---
|
---
|
---
|
|||||||||
Vacant and unimproved
|
206
|
206
|
---
|
|||||||||
Commercial development
|
---
|
---
|
---
|
|||||||||
Residential improved
|
5
|
5
|
---
|
|||||||||
Commercial improved
|
---
|
---
|
---
|
|||||||||
Manufacturing and industrial
|
---
|
---
|
---
|
|||||||||
211
|
211
|
---
|
||||||||||
Consumer:
|
||||||||||||
Residential mortgage
|
---
|
---
|
---
|
|||||||||
Unsecured
|
---
|
---
|
---
|
|||||||||
Home equity
|
---
|
---
|
---
|
|||||||||
Other secured
|
---
|
---
|
---
|
|||||||||
---
|
---
|
---
|
||||||||||
Total with no related allowance recorded
|
$
|
2,947
|
$
|
2,947
|
$
|
---
|
||||||
With an allowance recorded:
|
||||||||||||
Commercial and industrial
|
$
|
4,982
|
$
|
4,982
|
$
|
673
|
||||||
Commercial real estate:
|
||||||||||||
Residential developed
|
---
|
---
|
---
|
|||||||||
Unsecured to residential developers
|
---
|
---
|
---
|
|||||||||
Vacant and unimproved
|
247
|
247
|
7
|
|||||||||
Commercial development
|
192
|
192
|
6
|
|||||||||
Residential improved
|
5,254
|
5,254
|
140
|
|||||||||
Commercial improved
|
11,425
|
11,425
|
274
|
|||||||||
Manufacturing and industrial
|
240
|
240
|
9
|
|||||||||
17,358
|
17,358
|
436
|
||||||||||
Consumer:
|
||||||||||||
Residential mortgage
|
8,655
|
8,655
|
533
|
|||||||||
Unsecured
|
---
|
---
|
---
|
|||||||||
Home equity
|
4,808
|
4,808
|
296
|
|||||||||
Other secured
|
---
|
---
|
---
|
|||||||||
13,463
|
13,463
|
829
|
||||||||||
Total with an allowance recorded
|
$
|
35,803
|
$
|
35,803
|
$
|
1,938
|
||||||
Total
|
$
|
38,750
|
$
|
38,750
|
$
|
1,938
|
Three
Months
Ended
September 30,
2016
|
Three
Months
Ended
September 30,
2015
|
Nine
Months
Ended
September 30,
2016
|
Nine
Months
Ended
September 30,
2015
|
|||||||||||||
Average of impaired loans during the period:
|
||||||||||||||||
Commercial and industrial
|
$
|
5,093
|
$
|
5,416
|
$
|
6,489
|
$
|
7,401
|
||||||||
Commercial real estate:
|
||||||||||||||||
Residential developed
|
126
|
507
|
42
|
709
|
||||||||||||
Unsecured to residential developers
|
---
|
---
|
---
|
---
|
||||||||||||
Vacant and unimproved
|
418
|
1,028
|
433
|
1,311
|
||||||||||||
Commercial development
|
190
|
193
|
191
|
195
|
||||||||||||
Residential improved
|
5,156
|
6,241
|
5,396
|
6,974
|
||||||||||||
Commercial improved
|
6,627
|
14,835
|
7,660
|
15,985
|
||||||||||||
Manufacturing and industrial
|
235
|
2,053
|
237
|
2,470
|
||||||||||||
Consumer
|
12,501
|
14,090
|
12,828
|
14,485
|
||||||||||||
Interest income recognized during impairment:
|
||||||||||||||||
Commercial and industrial
|
203
|
215
|
740
|
833
|
||||||||||||
Commercial real estate
|
172
|
239
|
516
|
853
|
||||||||||||
Consumer
|
112
|
119
|
350
|
383
|
||||||||||||
Cash-basis interest income recognized
|
||||||||||||||||
Commercial and industrial
|
195
|
212
|
746
|
833
|
||||||||||||
Commercial real estate
|
169
|
240
|
513
|
850
|
||||||||||||
Consumer
|
111
|
120
|
346
|
387
|
September 30, 2016
|
Nonaccrual
|
Over 90
days
Accruing
|
||||||
Commercial and industrial
|
$
|
9
|
$
|
---
|
||||
Commercial real estate:
|
||||||||
Residential developed
|
---
|
---
|
||||||
Unsecured to residential developers
|
---
|
---
|
||||||
Vacant and unimproved
|
---
|
---
|
||||||
Commercial development
|
49
|
---
|
||||||
Residential improved
|
10
|
---
|
||||||
Commercial improved
|
133
|
---
|
||||||
Manufacturing and industrial
|
---
|
---
|
||||||
192
|
---
|
|||||||
Consumer:
|
||||||||
Residential mortgage
|
2
|
---
|
||||||
Unsecured
|
19
|
---
|
||||||
Home equity
|
11
|
---
|
||||||
Other secured
|
---
|
---
|
||||||
32
|
---
|
|||||||
Total
|
$
|
233
|
$
|
---
|
December 31, 2015
|
Nonaccrual
|
Over 90
days
Accruing
|
||||||
Commercial and industrial
|
$
|
174
|
$
|
---
|
||||
Commercial real estate:
|
||||||||
Residential developed
|
195
|
---
|
||||||
Unsecured to residential developers
|
---
|
---
|
||||||
Vacant and unimproved
|
---
|
---
|
||||||
Commercial development
|
49
|
---
|
||||||
Residential improved
|
124
|
---
|
||||||
Commercial improved
|
157
|
---
|
||||||
Manufacturing and industrial
|
---
|
---
|
||||||
525
|
---
|
|||||||
Consumer:
|
||||||||
Residential mortgage
|
2
|
---
|
||||||
Unsecured
|
28
|
---
|
||||||
Home equity
|
10
|
17
|
||||||
Other secured
|
---
|
---
|
||||||
40
|
17
|
|||||||
Total
|
$
|
739
|
$
|
17
|
September 30, 2016
|
30-90
Days
|
Greater Than
90 Days
|
Total
Past Due
|
Loans Not
Past Due
|
Total
|
|||||||||||||||
Commercial and industrial
|
$
|
---
|
$
|
---
|
$
|
---
|
$
|
423,102
|
$
|
423,102
|
||||||||||
Commercial real estate:
|
||||||||||||||||||||
Residential developed
|
---
|
---
|
---
|
12,784
|
12,784
|
|||||||||||||||
Unsecured to residential developers
|
---
|
---
|
---
|
4,736
|
4,736
|
|||||||||||||||
Vacant and unimproved
|
---
|
---
|
---
|
38,417
|
38,417
|
|||||||||||||||
Commercial development
|
---
|
49
|
49
|
331
|
380
|
|||||||||||||||
Residential improved
|
---
|
6
|
6
|
71,897
|
71,903
|
|||||||||||||||
Commercial improved
|
---
|
---
|
---
|
281,984
|
281,984
|
|||||||||||||||
Manufacturing and industrial
|
---
|
---
|
---
|
89,864
|
89,864
|
|||||||||||||||
---
|
55
|
55
|
500,013
|
500,068
|
||||||||||||||||
Consumer:
|
||||||||||||||||||||
Residential mortgage
|
272
|
---
|
272
|
216,491
|
216,763
|
|||||||||||||||
Unsecured
|
13
|
---
|
13
|
441
|
454
|
|||||||||||||||
Home equity
|
---
|
3
|
3
|
88,292
|
88,295
|
|||||||||||||||
Other secured
|
2
|
---
|
2
|
7,711
|
7,713
|
|||||||||||||||
287
|
3
|
290
|
312,935
|
313,225
|
||||||||||||||||
Total
|
$
|
287
|
$
|
58
|
$
|
345
|
$
|
1,236,050
|
$
|
1,236,395
|
December 31, 2015
|
30-90
Days
|
Greater Than
90 Days
|
Total
Past Due
|
Loans Not
Past Due
|
Total
|
|||||||||||||||
Commercial and industrial
|
$
|
719
|
$
|
100
|
$
|
819
|
$
|
376,479
|
$
|
377,298
|
||||||||||
Commercial real estate:
|
||||||||||||||||||||
Residential developed
|
---
|
---
|
---
|
10,448
|
10,448
|
|||||||||||||||
Unsecured to residential developers
|
---
|
---
|
---
|
7,372
|
7,372
|
|||||||||||||||
Vacant and unimproved
|
---
|
---
|
---
|
42,881
|
42,881
|
|||||||||||||||
Commercial development
|
---
|
49
|
49
|
510
|
559
|
|||||||||||||||
Residential improved
|
73
|
6
|
79
|
67,843
|
67,922
|
|||||||||||||||
Commercial improved
|
375
|
---
|
375
|
289,276
|
289,651
|
|||||||||||||||
Manufacturing and industrial
|
---
|
---
|
---
|
89,839
|
89,839
|
|||||||||||||||
448
|
55
|
503
|
508,169
|
508,672
|
||||||||||||||||
Consumer:
|
||||||||||||||||||||
Residential mortgage
|
---
|
---
|
---
|
209,972
|
209,972
|
|||||||||||||||
Unsecured
|
---
|
---
|
---
|
637
|
637
|
|||||||||||||||
Home equity
|
32
|
17
|
49
|
92,667
|
92,716
|
|||||||||||||||
Other secured
|
---
|
---
|
---
|
8,637
|
8,637
|
|||||||||||||||
32
|
17
|
49
|
311,913
|
311,962
|
||||||||||||||||
Total
|
$
|
1,199
|
$
|
172
|
$
|
1,371
|
$
|
1,196,561
|
$
|
1,197,932
|
September 30, 2016
|
December 31, 2015
|
|||||||||||||||
Number of
Loans
|
Outstanding
Recorded
Balance
|
Number of
Loans
|
Outstanding
Recorded
Balance
|
|||||||||||||
Commercial and industrial
|
25
|
$
|
5,778
|
33
|
$
|
7,611
|
||||||||||
Commercial real estate
|
49
|
12,627
|
56
|
17,871
|
||||||||||||
Consumer
|
118
|
12,626
|
124
|
13,570
|
||||||||||||
192
|
$
|
31,031
|
213
|
$
|
39,052
|
September 30,
2016
|
December 31,
2015
|
|||||||
Accruing TDR - nonaccrual at restructuring
|
$
|
---
|
$
|
---
|
||||
Accruing TDR - accruing at restructuring
|
26,966
|
33,691
|
||||||
Accruing TDR - upgraded to accruing after six consecutive payments
|
3,905
|
4,784
|
||||||
$
|
30,871
|
$
|
38,475
|
Three Months Ended September 30, 2016
|
Number of Loans
|
Pre-Modification
Outstanding
Recorded Balance
|
Principal
Writedown upon
Modification
|
|||||||||
Commercial and industrial
|
---
|
$
|
---
|
$
|
---
|
|||||||
Commercial real estate
|
1
|
59
|
---
|
|||||||||
Consumer
|
---
|
---
|
---
|
|||||||||
1
|
$
|
59
|
$
|
---
|
Three Months Ended September 30, 2015
|
Number of Loans
|
Pre-Modification
Outstanding
Recorded Balance
|
Principal
Writedown upon
Modification
|
|||||||||
Commercial and industrial
|
2
|
$
|
114
|
$
|
---
|
|||||||
Commercial real estate
|
---
|
---
|
---
|
|||||||||
Consumer
|
1
|
41
|
---
|
|||||||||
3
|
$
|
155
|
$
|
---
|
Nine Months Ended September 30, 2016
|
Number of Loans
|
Pre-Modification
Outstanding
Recorded Balance
|
Principal
Writedown upon
Modification
|
|||||||||
Commercial and industrial
|
---
|
$
|
---
|
$
|
---
|
|||||||
Commercial real estate
|
1
|
59
|
---
|
|||||||||
Consumer
|
6
|
277
|
---
|
|||||||||
7
|
$
|
336
|
$
|
---
|
Nine Months Ended September 30, 2015
|
Number of Loans
|
Pre-Modification
Outstanding
Recorded Balance
|
Principal
Writedown upon
Modification
|
|||||||||
Commercial and industrial
|
3
|
$
|
522
|
$
|
---
|
|||||||
Commercial real estate
|
1
|
42
|
---
|
|||||||||
Consumer
|
32
|
870
|
---
|
|||||||||
36
|
$
|
1,434
|
$
|
---
|
Three Months Ended
September 30, 2016
|
Three Months Ended
September 30, 2015
|
|||||||||||||||
Number of
Loans
|
Outstanding
Recorded
Balance
|
Number of
Loans
|
Outstanding
Recorded
Balance
|
|||||||||||||
Commercial and industrial
|
---
|
$
|
---
|
---
|
$
|
---
|
||||||||||
Commercial real estate
|
---
|
---
|
---
|
---
|
||||||||||||
Consumer
|
---
|
---
|
1
|
10
|
Nine Months Ended
September 30, 2016
|
Nine Months Ended
September 30, 2015
|
|||||||||||||||
Number of
Loans
|
Outstanding
Recorded
Balance
|
Number of
Loans
|
Outstanding
Recorded
Balance
|
|||||||||||||
Commercial and industrial
|
---
|
$
|
---
|
---
|
$
|
---
|
||||||||||
Commercial real estate
|
---
|
---
|
---
|
---
|
||||||||||||
Consumer
|
---
|
---
|
1
|
10
|
September 30, 2016
|
1
|
2
|
3
|
4
|
5
|
6
|
7
|
8
|
Total
|
|||||||||||||||||||||||||||
Commercial and industrial
|
$
|
---
|
$
|
16,912
|
$
|
105,635
|
$
|
277,863
|
$
|
16,740
|
$
|
5,943
|
$
|
9
|
$
|
---
|
$
|
423,102
|
||||||||||||||||||
Commercial real estate:
|
||||||||||||||||||||||||||||||||||||
Residential developed
|
---
|
---
|
2,451
|
8,170
|
2,163
|
---
|
---
|
---
|
12,784
|
|||||||||||||||||||||||||||
Unsecured to residential developers
|
---
|
---
|
---
|
4,736
|
---
|
---
|
---
|
---
|
4,736
|
|||||||||||||||||||||||||||
Vacant and unimproved
|
---
|
---
|
16,362
|
18,258
|
3,797
|
---
|
---
|
---
|
38,417
|
|||||||||||||||||||||||||||
Commercial development
|
---
|
---
|
---
|
141
|
---
|
190
|
49
|
---
|
380
|
|||||||||||||||||||||||||||
Residential improved
|
---
|
---
|
6,633
|
60,838
|
2,684
|
1,738
|
10
|
---
|
71,903
|
|||||||||||||||||||||||||||
Commercial improved
|
---
|
1,663
|
61,253
|
208,333
|
9,358
|
1,244
|
133
|
---
|
281,984
|
|||||||||||||||||||||||||||
Manufacturing & industrial
|
---
|
1,809
|
33,277
|
51,155
|
2,985
|
638
|
---
|
---
|
89,864
|
|||||||||||||||||||||||||||
$
|
---
|
$
|
20,384
|
$
|
225,611
|
$
|
629,494
|
$
|
37,727
|
$
|
9,753
|
$
|
201
|
$
|
---
|
$
|
923,170
|
December 31, 2015
|
1
|
2
|
3
|
4
|
5
|
6
|
7
|
8
|
Total
|
|||||||||||||||||||||||||||
Commercial and industrial
|
$
|
196
|
$
|
8,774
|
$
|
114,451
|
$
|
242,253
|
$
|
5,235
|
$
|
6,215
|
$
|
174
|
$
|
---
|
$
|
377,298
|
||||||||||||||||||
Commercial real estate:
|
||||||||||||||||||||||||||||||||||||
Residential developed
|
---
|
---
|
2,226
|
5,191
|
2,836
|
---
|
195
|
---
|
10,448
|
|||||||||||||||||||||||||||
Unsecured to residential developers
|
---
|
---
|
---
|
7,372
|
---
|
---
|
---
|
---
|
7,372
|
|||||||||||||||||||||||||||
Vacant and unimproved
|
---
|
---
|
17,768
|
20,588
|
4,525
|
---
|
---
|
---
|
42,881
|
|||||||||||||||||||||||||||
Commercial development
|
---
|
---
|
---
|
318
|
---
|
192
|
49
|
---
|
559
|
|||||||||||||||||||||||||||
Residential improved
|
---
|
---
|
7,191
|
54,376
|
4,722
|
1,509
|
124
|
---
|
67,922
|
|||||||||||||||||||||||||||
Commercial improved
|
---
|
3,094
|
60,475
|
208,127
|
15,645
|
2,153
|
157
|
---
|
289,651
|
|||||||||||||||||||||||||||
Manufacturing & industrial
|
---
|
1,478
|
34,857
|
50,023
|
3,481
|
---
|
---
|
---
|
89,839
|
|||||||||||||||||||||||||||
$
|
196
|
$
|
13,346
|
$
|
236,968
|
$
|
588,248
|
$
|
36,444
|
$
|
10,069
|
$
|
699
|
$
|
---
|
$
|
885,970
|
September 30,
2016
|
December 31,
2015
|
|||||||
Not classified as impaired
|
$
|
3,273
|
$
|
1,986
|
||||
Classified as impaired
|
6,681
|
8,782
|
||||||
Total commercial loans classified substandard or worse
|
$
|
9,954
|
$
|
10,768
|
September 30, 2016
|
Residential
Mortgage
|
Consumer
Unsecured
|
Home
Equity
|
Consumer
Other
|
||||||||||||
Performing
|
$
|
216,763
|
$
|
454
|
$
|
88,292
|
$
|
7,713
|
||||||||
Nonperforming
|
---
|
---
|
3
|
---
|
||||||||||||
Total
|
$
|
216,763
|
$
|
454
|
$
|
88,295
|
$
|
7,713
|
December 31, 2015
|
Residential
Mortgage
|
Consumer
Unsecured
|
Home
Equity
|
Consumer
Other
|
||||||||||||
Performing
|
$
|
209,972
|
$
|
637
|
$
|
92,699
|
$
|
8,637
|
||||||||
Nonperforming
|
---
|
---
|
17
|
---
|
||||||||||||
Total
|
$
|
209,972
|
$
|
637
|
$
|
92,716
|
$
|
8,637
|
Nine
Months Ended
September 30,
2016
|
Year
Ended
December 31,
2015
|
Nine
Months Ended
September 30,
2015
|
||||||||||
Beginning balance
|
$
|
28,377
|
$
|
43,071
|
$
|
43,071
|
||||||
Additions, transfers from loans
|
102
|
2,520
|
1,301
|
|||||||||
Proceeds from sales of other real estate owned
|
(4,155
|
)
|
(11,540
|
)
|
(3,613
|
)
|
||||||
Valuation allowance reversal upon sale
|
(533
|
)
|
(4,748
|
)
|
(427
|
)
|
||||||
Gain (loss) on sales of other real estate owned
|
365
|
(926
|
)
|
237
|
||||||||
24,156
|
28,377
|
40,569
|
||||||||||
Less: valuation allowance
|
(11,046
|
)
|
(10,805
|
)
|
(14,898
|
)
|
||||||
Ending balance
|
$
|
13,110
|
$
|
17,572
|
$
|
25,671
|
Nine
Months Ended
September 30,
2016
|
Nine
Months Ended
September 30,
2015
|
|||||||
Beginning balance
|
$
|
10,805
|
$
|
14,829
|
||||
Additions charged to expense
|
774
|
496
|
||||||
Reversals upon sale
|
(533
|
)
|
(427
|
)
|
||||
Ending balance
|
$
|
11,046
|
$
|
14,898
|
Level 1 : |
Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.
|
Level 2 : |
Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
|
Level 3 : |
Significant unobservable inputs that reflect a reporting entity's own assumptions about the assumptions that market participants would use in pricing an asset or liability.
|
Fair
Value
|
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
|
Significant Other
Observable
Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
|||||||||||||
September 30, 2016
|
||||||||||||||||
U.S. Treasury and federal agency securities
|
$
|
86,190
|
$
|
---
|
$
|
86,190
|
$
|
---
|
||||||||
U.S. Agency MBS and CMOs
|
13,112
|
---
|
13,112
|
---
|
||||||||||||
Tax-exempt state and municipal bonds
|
37,688
|
---
|
37,688
|
---
|
||||||||||||
Taxable state and municipal bonds
|
32,546
|
---
|
32,546
|
---
|
||||||||||||
Corporate bonds and other debt securities
|
13,349
|
---
|
13,349
|
---
|
||||||||||||
Other equity securities
|
1,518
|
---
|
1,518
|
---
|
||||||||||||
Loans held for sale
|
2,013
|
---
|
2,013
|
---
|
||||||||||||
Interest rate swaps
|
1,165
|
---
|
---
|
1,165
|
||||||||||||
Interest rate swaps
|
(1,165
|
)
|
---
|
---
|
(1,165
|
)
|
||||||||||
December 31, 2015
|
||||||||||||||||
U.S. Treasury and federal agency securities
|
$
|
74,392
|
$
|
---
|
$
|
74,392
|
$
|
---
|
||||||||
U.S. Agency MBS and CMOs
|
13,755
|
---
|
13,755
|
---
|
||||||||||||
Tax-exempt state and municipal bonds
|
33,598
|
---
|
33,598
|
---
|
||||||||||||
Taxable state and municipal bonds
|
28,763
|
---
|
28,763
|
---
|
||||||||||||
Corporate bonds and other debt securities
|
14,813
|
---
|
14,813
|
---
|
||||||||||||
Other equity securities
|
1,494
|
---
|
1,494
|
---
|
||||||||||||
Loans held for sale
|
2,776
|
---
|
2,776
|
---
|
||||||||||||
Interest rate swaps
|
790
|
---
|
---
|
790
|
||||||||||||
Interest rate swaps
|
(790
|
)
|
---
|
---
|
(790
|
)
|
Fair
Value
|
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
|
Significant Other
Observable
Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||||||
September 30, 2016
|
|||||||||||||||
Impaired loans
|
$ |
3,544
|
$ |
---
|
$ |
---
|
$ |
3,544
|
|||||||
Other real estate owned
|
10,678
|
---
|
---
|
10,678
|
|||||||||||
December 31, 2015
|
|||||||||||||||
Impaired loans
|
$ |
6,573
|
$ |
---
|
$ |
---
|
$ |
6,573
|
|||||||
Other real estate owned
|
13,602
|
---
|
---
|
13,602
|
Asset
Fair
Value
|
Valuation
Technique
|
Unobservable
Inputs
|
Range (%)
|
|||||||
September 30, 2016
|
||||||||||
Impaired Loans
|
$
|
3,544
|
Sales comparison approach
|
Adjustment for differences between comparable sales
|
1.0 to 39.8
|
|||||
Income approach
|
Capitalization rate
|
10.0 to 11.0
|
||||||||
Other real estate owned
|
10,678
|
Sales comparison approach
|
Adjustment for differences between comparable sales
|
6.0 to 20.0
|
||||||
Income approach
|
Capitalization rate
|
10.0 to 11.0
|
Asset
Fair
Value
|
Valuation
Technique
|
Unobservable
Inputs
|
Range (%)
|
|||||||
December 31, 2015
|
||||||||||
Impaired Loans
|
$
|
6,573
|
Sales comparison approach
|
Adjustment for differences between comparable sales
|
1.0 to 19.0
|
|||||
Income approach
|
Capitalization rate
|
9.5 to 11.0
|
||||||||
Other real estate owned
|
13,602
|
Sales comparison approach
|
Adjustment for differences between comparable sales
|
4.5 to 32.5
|
||||||
Income approach
|
Capitalization rate
|
9.5 to 11.0
|
Level in
|
September 30, 2016
|
December 31, 2015
|
|||||||||||||||
Fair Value
Hierarchy
|
Carrying
Amount
|
Fair
Value
|
Carrying
Amount
|
Fair
Value
|
|||||||||||||
Financial assets
|
|||||||||||||||||
Cash and due from banks
|
Level 1
|
$
|
31,879
|
$
|
31,879
|
$
|
29,104
|
$
|
29,104
|
||||||||
Cash equivalents
|
Level 2
|
25,872
|
25,872
|
152,372
|
152,372
|
||||||||||||
Interest-bearing time deposits in other financial institutions
|
Level 2
|
---
|
---
|
20,000
|
20,008
|
||||||||||||
Securities held to maturity
|
Level 3
|
58,893
|
60,373
|
51,856
|
52,837
|
||||||||||||
FHLB stock
|
11,558
|
NA
|
11,558
|
NA
|
|||||||||||||
Loans, net
|
Level 2
|
1,216,004
|
1,213,288
|
1,187,423
|
1,177,527
|
||||||||||||
Bank owned life insurance
|
Level 3
|
39,088
|
39,088
|
28,858
|
28,858
|
||||||||||||
Accrued interest receivable
|
Level 2
|
3,823
|
3,823
|
3,622
|
3,622
|
||||||||||||
Financial liabilities
|
|||||||||||||||||
Deposits
|
Level 2
|
(1,358,627
|
)
|
(1,358,585
|
)
|
(1,435,512
|
)
|
(1,435,473
|
)
|
||||||||
Other borrowed funds
|
Level 2
|
(84,173
|
)
|
(84,991
|
)
|
(96,169
|
)
|
(96,465
|
)
|
||||||||
Long-term debt
|
Level 2
|
(41,238
|
)
|
(36,181
|
)
|
(41,238
|
)
|
(35,757
|
)
|
||||||||
Accrued interest payable
|
Level 2
|
(258
|
)
|
(258
|
)
|
(273
|
)
|
(273
|
)
|
||||||||
Off-balance sheet credit-related items
|
|||||||||||||||||
Loan commitments
|
---
|
---
|
---
|
---
|
September 30,
2016
|
December 31,
2015
|
|||||||
Noninterest-bearing demand
|
$
|
455,164
|
$
|
477,032
|
||||
Interest bearing demand
|
293,340
|
358,306
|
||||||
Savings and money market accounts
|
533,531
|
512,980
|
||||||
Certificates of deposit
|
76,592
|
87,194
|
||||||
$
|
1,358,627
|
$
|
1,435,512
|
Principal Terms
|
Advance
Amount
|
Range of Maturities
|
Weighted
Average
Interest Rate
|
||||||
September 30, 2016
|
|||||||||
Single maturity fixed rate advances
|
$
|
80,000
|
February 2018 to April 2021
|
1.60
|
%
|
||||
Amortizable mortgage advances
|
4,173
|
March 2018 to July 2018
|
3.78
|
%
|
|||||
$
|
84,173
|
Principal Terms
|
Advance
Amount
|
Range of Maturities
|
Weighted
Average
Interest Rate
|
||||||
December 31, 2015
|
|||||||||
Single maturity fixed rate advances
|
$
|
90,000
|
August 2016 to March 2020
|
1.69
|
%
|
||||
Amortizable mortgage advances
|
6,169
|
March 2018 to July 2018
|
3.78
|
%
|
|||||
|
$
|
96,169
|
2016
|
$
|
---
|
||
2017
|
2,055
|
|||
2018
|
52,118
|
|||
2019
|
10,000
|
|||
2020
|
10,000
|
|||
Thereafter
|
10,000
|
|||
$
|
84,173
|
Three Months
Ended
September 30,
2016
|
Three Months
Ended
September 30,
2015
|
Nine Months
Ended
September 30,
2016
|
Nine Months
Ended
September 30,
2015
|
|||||||||||||
Net income available to common shares
|
$
|
4,604
|
$
|
3,201
|
$
|
11,844
|
$
|
9,256
|
||||||||
Weighted average shares outstanding, including participating stock awards
-
Basic
|
33,921,599
|
33,866,789
|
33,923,067
|
33,866,789
|
||||||||||||
Dilutive potential common shares:
|
||||||||||||||||
Stock options
|
---
|
---
|
---
|
---
|
||||||||||||
Weighted average shares outstanding
-
Diluted
|
33,921,599
|
33,866,789
|
33,923,067
|
33,866,789
|
||||||||||||
Basic earnings per common share
|
$
|
0.14
|
$
|
0.09
|
$
|
0.35
|
$
|
0.27
|
||||||||
Diluted earnings per common share
|
$
|
0.14
|
$
|
0.09
|
$
|
0.35
|
$
|
0.27
|
Three Months
Ended
September 30,
2016
|
Three Months
Ended
September 30,
2015
|
Nine Months
Ended
September 30,
2016
|
Nine Months
Ended
September 30,
2015
|
|||||||||||||
Current
|
$
|
1,370
|
$
|
1,381
|
$
|
4,596
|
$
|
2,710
|
||||||||
Deferred
|
(20
|
)
|
19
|
(167
|
)
|
1,355
|
||||||||||
$
|
1,350
|
$
|
1,400
|
$
|
4,429
|
$
|
4,065
|
Three Months
Ended
September 30,
2016
|
Three Months
Ended
September 30,
2015
|
Nine Months
Ended
September 30,
2016
|
Nine Months
Ended
September 30,
2015
|
|||||||||||||
Statutory rate
|
35
|
%
|
35
|
%
|
35
|
%
|
35
|
%
|
||||||||
Statutory rate applied to income before taxes
|
$
|
2,083
|
$
|
1,611
|
$
|
5,695
|
$
|
4,663
|
||||||||
Deduct
|
||||||||||||||||
Tax-exempt interest income
|
(154
|
)
|
(135
|
)
|
(451
|
)
|
(379
|
)
|
||||||||
Bank-owned life insurance
|
(51
|
)
|
(59
|
)
|
(262
|
)
|
(176
|
)
|
||||||||
Tax return credits and other adjustments
|
(512
|
)
|
---
|
(512
|
)
|
---
|
||||||||||
Other, net
|
(16
|
)
|
(17
|
)
|
(41
|
)
|
(43
|
)
|
||||||||
$
|
1,350
|
$
|
1,400
|
$
|
4,429
|
$
|
4,065
|
September 30,
2016
|
December 31,
2015
|
|||||||
Deferred tax assets
|
||||||||
Allowance for loan losses
|
$
|
5,897
|
$
|
5,978
|
||||
Nonaccrual loan interest
|
746
|
850
|
||||||
Valuation allowance on other real estate owned
|
3,866
|
3,782
|
||||||
Other
|
856
|
647
|
||||||
Gross deferred tax assets
|
11,365
|
11,257
|
||||||
Valuation allowance
|
---
|
---
|
||||||
Total net deferred tax assets
|
11,365
|
11,257
|
||||||
Deferred tax liabilities
|
||||||||
Depreciation
|
(1,621
|
)
|
(1,739
|
)
|
||||
Prepaid expenses
|
(197
|
)
|
(191
|
)
|
||||
Unrealized gain on securities available for sale
|
(773
|
)
|
(187
|
)
|
||||
Other
|
(374
|
)
|
(321
|
)
|
||||
Gross deferred tax liabilities
|
(2,965
|
)
|
(2,438
|
)
|
||||
Net deferred tax asset
|
$
|
8,400
|
$
|
8,819
|
September 30,
2016
|
December 31,
2015
|
|||||||
Commitments to make loans
|
$
|
106,983
|
$
|
97,991
|
||||
Letters of credit
|
15,378
|
12,976
|
||||||
Unused lines of credit
|
426,894
|
426,080
|
Actual
|
Minimum
Capital
Adequacy
|
Minimum Capital
Adequacy With
Capital Buffer
|
To Be Well
Capitalized Under
Prompt Corrective
Action Regulations
|
|||||||||||||||||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||||||||||||||||||
September 30, 2016
|
||||||||||||||||||||||||||||||||
CET1 capital (to risk weighted assets)
|
||||||||||||||||||||||||||||||||
Consolidated
|
$
|
160,809
|
11.3
|
%
|
$
|
64,314
|
4.5
|
%
|
$
|
73,246
|
5.1
|
%
|
N/A
|
N/A
|
||||||||||||||||||
Bank
|
195,037
|
13.7
|
64,002
|
4.5
|
72,892
|
5.1
|
$
|
92,448
|
6.5
|
%
|
||||||||||||||||||||||
Tier 1 capital (to risk weighted assets)
|
||||||||||||||||||||||||||||||||
Consolidated
|
200,809
|
14.1
|
85,752
|
6.0
|
94,684
|
6.6
|
N/A
|
N/A
|
||||||||||||||||||||||||
Bank
|
195,037
|
13.7
|
85,336
|
6.0
|
94,226
|
6.6
|
113,782
|
8.0
|
||||||||||||||||||||||||
Total capital (to risk weighted assets)
|
||||||||||||||||||||||||||||||||
Consolidated
|
217,664
|
15.2
|
114,336
|
8.0
|
123,268
|
8.6
|
N/A
|
N/A
|
||||||||||||||||||||||||
Bank
|
211,892
|
14.9
|
113,782
|
8.0
|
122,671
|
8.6
|
142,227
|
10.0
|
||||||||||||||||||||||||
Tier 1 capital (to average assets)
|
||||||||||||||||||||||||||||||||
Consolidated
|
200,809
|
12.0
|
67,112
|
4.0
|
N/A
|
N/A
|
N/A
|
N/A
|
||||||||||||||||||||||||
Bank
|
195,037
|
11.6
|
67,004
|
4.0
|
N/A
|
N/A
|
83,805
|
5.0
|
||||||||||||||||||||||||
December 31, 2015
|
||||||||||||||||||||||||||||||||
CET1 capital (to risk weighted assets)
|
||||||||||||||||||||||||||||||||
Consolidated
|
$
|
151,630
|
10.8
|
%
|
$
|
63,479
|
4.5
|
%
|
N/A
|
N/A
|
N/A
|
N/A
|
||||||||||||||||||||
Bank
|
186,930
|
13.2
|
63,463
|
4.5
|
N/A
|
N/A
|
$
|
91,668
|
6.5
|
%
|
||||||||||||||||||||||
Tier 1 capital (to risk weighted assets)
|
||||||||||||||||||||||||||||||||
Consolidated
|
191,630
|
13.6
|
84,638
|
6.0
|
N/A
|
N/A
|
N/A
|
N/A
|
||||||||||||||||||||||||
Bank
|
186,930
|
13.2
|
84,617
|
6.0
|
N/A
|
N/A
|
112,822
|
8.0
|
||||||||||||||||||||||||
Total capital (to risk weighted assets)
|
||||||||||||||||||||||||||||||||
Consolidated
|
208,711
|
14.8
|
112,851
|
8.0
|
N/A
|
N/A
|
N/A
|
N/A
|
||||||||||||||||||||||||
Bank
|
203,471
|
14.4
|
112,822
|
8.0
|
N/A
|
N/A
|
141,028
|
10.0
|
||||||||||||||||||||||||
Tier 1 capital (to average assets)
|
||||||||||||||||||||||||||||||||
Consolidated
|
191,630
|
11.5
|
66,400
|
4.0
|
N/A
|
N/A
|
N/A
|
N/A
|
||||||||||||||||||||||||
Bank
|
186,930
|
11.2
|
66,332
|
4.0
|
N/A
|
N/A
|
82,915
|
5.0
|
For the three months ended September 30,
|
||||||||||||||||||||||||
2016
|
2015
|
|||||||||||||||||||||||
Average
Balance
|
Interest
Earned
or Paid
|
Average
Yield
or Cost
|
Average
Balance
|
Interest
Earned
or Paid
|
Average
Yield
or Cost
|
|||||||||||||||||||
Assets
|
||||||||||||||||||||||||
Taxable securities
|
$
|
136,807
|
$
|
584
|
1.71
|
%
|
$
|
125,498
|
$
|
529
|
1.69
|
%
|
||||||||||||
Tax-exempt securities (1)
|
87,918
|
451
|
3.31
|
76,519
|
394
|
3.35
|
||||||||||||||||||
Commercial loans (2)
|
903,484
|
8,965
|
3.88
|
849,827
|
8,393
|
3.87
|
||||||||||||||||||
Residential mortgage loans
|
219,170
|
1,928
|
3.51
|
203,189
|
1,830
|
3.59
|
||||||||||||||||||
Consumer loans
|
95,551
|
945
|
3.93
|
104,231
|
1,027
|
3.91
|
||||||||||||||||||
Federal Home Loan Bank stock
|
11,558
|
122
|
4.13
|
11,558
|
120
|
4.07
|
||||||||||||||||||
Federal funds sold and other short-term investments
|
101,062
|
127
|
0.49
|
161,740
|
134
|
0.32
|
||||||||||||||||||
Total interest earning assets (1)
|
1,555,550
|
13,122
|
3.39
|
1,532,562
|
12,427
|
3.25
|
||||||||||||||||||
Noninterest earning assets:
|
||||||||||||||||||||||||
Cash and due from banks
|
28,482
|
27,238
|
||||||||||||||||||||||
Other
|
96,065
|
107,936
|
||||||||||||||||||||||
Total assets
|
$
|
1,680,097
|
$
|
1,667,736
|
||||||||||||||||||||
Liabilities
|
||||||||||||||||||||||||
Deposits:
|
||||||||||||||||||||||||
Interest bearing demand
|
$
|
313,624
|
$
|
65
|
0.08
|
%
|
$
|
347,420
|
$
|
96
|
0.11
|
%
|
||||||||||||
Savings and money market accounts
|
522,697
|
239
|
0.19
|
501,025
|
230
|
0.18
|
||||||||||||||||||
Time deposits
|
81,769
|
126
|
0.62
|
99,285
|
195
|
0.78
|
||||||||||||||||||
Borrowings:
|
||||||||||||||||||||||||
Other borrowed funds
|
94,384
|
419
|
1.74
|
96,270
|
449
|
1.83
|
||||||||||||||||||
Long-term debt
|
41,238
|
371
|
3.52
|
41,238
|
336
|
3.19
|
||||||||||||||||||
Total interest bearing liabilities
|
1,053,712
|
1,220
|
0.45
|
1,085,238
|
1,306
|
0.47
|
||||||||||||||||||
Noninterest bearing liabilities:
|
||||||||||||||||||||||||
Noninterest bearing demand accounts
|
459,372
|
428,528
|
||||||||||||||||||||||
Other noninterest bearing liabilities
|
6,817
|
5,756
|
||||||||||||||||||||||
Shareholders' equity
|
160,196
|
148,214
|
||||||||||||||||||||||
Total liabilities and shareholders' equity
|
$
|
1,680,097
|
$
|
1,667,736
|
||||||||||||||||||||
Net interest income
|
$
|
11,902
|
$
|
11,121
|
||||||||||||||||||||
Net interest spread (1)
|
2.94
|
%
|
2.78
|
%
|
||||||||||||||||||||
Ratio of average interest earning assets to average interest bearing liabilities
|
147.63
|
%
|
141.22
|
%
|
||||||||||||||||||||
Reconciliation of net interest margin, fully taxable equivalent (non-GAAP)
|
||||||||||||||||||||||||
Net interest income
|
$
|
11,902
|
$
|
11,121
|
||||||||||||||||||||
Plus taxable equivalent adjustment (1)
|
193
|
169
|
||||||||||||||||||||||
Net interest income - taxable equivalent (1)
|
$
|
12,095
|
$
|
11,290
|
||||||||||||||||||||
Net interest margin (GAAP)
|
3.04
|
%
|
2.88
|
%
|
||||||||||||||||||||
Net interest margin (FTE) - non-GAAP (1)
|
3.08
|
%
|
2.92
|
%
|
(1) |
Yield adjusted to fully tax equivalent using a 35% tax rate.
|
(2) |
Includes average nonaccrual loans of approximately $270,000 and $3.7 million for the three months ended September 30, 2016 and 2015.
|
For the nine months ended September 30,
|
||||||||||||||||||||||||
2016
|
2015
|
|||||||||||||||||||||||
Average
Balance
|
Interest
Earned
or Paid
|
Average
Yield
or Cost
|
Average
Balance
|
Interest
Earned
or Paid
|
Average
Yield
or Cost
|
|||||||||||||||||||
Assets
|
||||||||||||||||||||||||
Taxable securities
|
$
|
132,941
|
$
|
1,700
|
1.70
|
%
|
$
|
121,721
|
$
|
1,531
|
1.67
|
%
|
||||||||||||
Tax-exempt securities (1)
|
85,682
|
1,324
|
3.29
|
75,001
|
1,114
|
3.22
|
||||||||||||||||||
Commercial loans (2)
|
898,039
|
26,625
|
3.90
|
833,717
|
24,823
|
3.93
|
||||||||||||||||||
Residential mortgage loans
|
217,185
|
5,730
|
3.51
|
200,547
|
5,439
|
3.62
|
||||||||||||||||||
Consumer loans
|
96,975
|
2,873
|
3.96
|
106,036
|
3,103
|
3.91
|
||||||||||||||||||
Federal Home Loan Bank stock
|
11,558
|
368
|
4.18
|
11,387
|
348
|
4.03
|
||||||||||||||||||
Federal funds sold and other short-term investments
|
99,753
|
383
|
0.51
|
121,429
|
318
|
0.35
|
||||||||||||||||||
Total interest earning assets (1)
|
1,542,133
|
39,003
|
3.41
|
1,469,838
|
36,676
|
3.37
|
||||||||||||||||||
Noninterest earning assets:
|
||||||||||||||||||||||||
Cash and due from banks
|
26,690
|
25,568
|
||||||||||||||||||||||
Other
|
97,232
|
109,183
|
||||||||||||||||||||||
Total assets
|
$
|
1,666,055
|
$
|
1,604,589
|
||||||||||||||||||||
Liabilities
|
||||||||||||||||||||||||
Deposits:
|
||||||||||||||||||||||||
Interest bearing demand
|
$
|
324,554
|
$
|
227
|
0.09
|
%
|
$
|
338,996
|
$
|
294
|
0.12
|
%
|
||||||||||||
Savings and money market accounts
|
515,041
|
708
|
0.19
|
480,057
|
665
|
0.19
|
||||||||||||||||||
Time deposits
|
85,862
|
398
|
0.62
|
111,507
|
790
|
0.95
|
||||||||||||||||||
Borrowings:
|
||||||||||||||||||||||||
Other borrowed funds
|
97,637
|
1,318
|
1.77
|
94,462
|
1,317
|
1.84
|
||||||||||||||||||
Long-term debt
|
41,238
|
1,104
|
3.52
|
41,238
|
992
|
3.17
|
||||||||||||||||||
Total interest bearing liabilities
|
1,064,332
|
3,755
|
0.47
|
1,066,260
|
4,058
|
0.51
|
||||||||||||||||||
Noninterest bearing liabilities:
|
||||||||||||||||||||||||
Noninterest bearing demand accounts
|
437,943
|
386,437
|
||||||||||||||||||||||
Other noninterest bearing liabilities
|
6,734
|
5,650
|
||||||||||||||||||||||
Shareholders' equity
|
157,046
|
146,242
|
||||||||||||||||||||||
Total liabilities and shareholders' equity
|
$
|
1,666,055
|
$
|
1,604,589
|
||||||||||||||||||||
Net interest income
|
$
|
35,248
|
$
|
32,618
|
||||||||||||||||||||
Net interest spread (1)
|
2.94
|
%
|
2.86
|
%
|
||||||||||||||||||||
Ratio of average interest earning assets to average interest bearing liabilities
|
144.89
|
%
|
137.85
|
%
|
||||||||||||||||||||
Reconciliation of net interest margin, fully taxable equivalent (non-GAAP)
|
||||||||||||||||||||||||
Net interest income
|
$
|
35,248
|
$
|
32,618
|
||||||||||||||||||||
Plus taxable equivalent adjustment (1)
|
567
|
477
|
||||||||||||||||||||||
Net interest income - taxable equivalent (1)
|
$
|
35,815
|
$
|
33,095
|
||||||||||||||||||||
Net interest margin (GAAP)
|
3.04
|
%
|
2.97
|
%
|
||||||||||||||||||||
Net interest margin (FTE) - non-GAAP (1)
|
3.09
|
%
|
3.00
|
%
|
(1) |
Yield adjusted to fully tax equivalent using a 35% tax rate.
|
(2) |
Includes average nonaccrual loans of approximately $407,000 and $6.4 million for the nine months ended September 30, 2016 and 2015.
|
Three Months
Ended
September 30,
2016
|
Three Months
Ended
September 30,
2015
|
Nine Months
Ended
September 30,
2016
|
Nine Months
Ended
September 30,
2015
|
|||||||||||||
Service charges and fees on deposit accounts
|
$
|
1,152
|
$
|
1,150
|
$
|
3,312
|
$
|
3,248
|
||||||||
Net gains on mortgage loans
|
1,175
|
705
|
2,235
|
2,249
|
||||||||||||
Trust fees
|
790
|
711
|
2,286
|
2,168
|
||||||||||||
Gain as sales of securities
|
---
|
36
|
99
|
119
|
||||||||||||
ATM and debit card fees
|
1,272
|
1,220
|
3,715
|
3,549
|
||||||||||||
Bank owned life insurance (“BOLI”) income
|
146
|
170
|
748
|
503
|
||||||||||||
Investment services fees
|
181
|
279
|
755
|
840
|
||||||||||||
Other income
|
359
|
213
|
1,069
|
615
|
||||||||||||
Total noninterest income
|
$
|
5,075
|
$
|
4,484
|
$
|
14,219
|
$
|
13,291
|
Three Months
Ended
September 30,
2016
|
Three Months
Ended
September 30,
2015
|
Nine Months
Ended
September 30,
2016
|
Nine Months
Ended
September 30,
2015
|
|||||||||||||
Salaries and benefits
|
$
|
6,166
|
$
|
6,158
|
$
|
18,521
|
$
|
18,474
|
||||||||
Occupancy of premises
|
901
|
948
|
2,784
|
2,823
|
||||||||||||
Furniture and equipment
|
772
|
835
|
2,476
|
2,431
|
||||||||||||
Legal and professional
|
153
|
231
|
500
|
661
|
||||||||||||
Marketing and promotion
|
275
|
263
|
825
|
831
|
||||||||||||
Data processing
|
741
|
619
|
2,089
|
1,845
|
||||||||||||
FDIC assessment
|
166
|
283
|
638
|
854
|
||||||||||||
Interchange and other card expense
|
334
|
304
|
927
|
864
|
||||||||||||
Bond and D&O insurance
|
132
|
147
|
395
|
438
|
||||||||||||
Net (gains) losses on repossessed and foreclosed properties
|
115
|
(160
|
)
|
409
|
260
|
|||||||||||
Administration and disposition of problem assets
|
210
|
393
|
787
|
1,053
|
||||||||||||
Outside services
|
412
|
350
|
1,171
|
1,083
|
||||||||||||
Other noninterest expense
|
896
|
883
|
2,772
|
2,721
|
||||||||||||
Total noninterest expense
|
$
|
11,273
|
$
|
11,254
|
$
|
34,294
|
$
|
34,338
|
Three Months
Ended
September 30,
2016
|
Three Months
Ended
September 30,
2015
|
Nine Months
Ended
September 30,
2016
|
Nine Months
Ended
September 30,
2015
|
|||||||||||||
Legal and professional – nonperforming assets
|
$
|
28
|
$
|
82
|
$
|
127
|
$
|
217
|
||||||||
Repossessed and foreclosed property administration
|
182
|
311
|
660
|
836
|
||||||||||||
Net (gains) losses on repossessed and foreclosed properties
|
115
|
(160
|
)
|
409
|
260
|
|||||||||||
Total
|
$
|
325
|
$
|
233
|
$
|
1,196
|
$
|
1,313
|
September 30, 2016
|
December 31, 2015
|
|||||||||||||||
Balance
|
Percent of
Total Loans
|
Balance
|
Percent of
Total Loans
|
|||||||||||||
Commercial real estate: (1)
|
||||||||||||||||
Residential developed
|
$
|
12,784
|
1.0
|
%
|
$
|
10,448
|
0.9
|
%
|
||||||||
Unsecured to residential developers
|
4,736
|
0.4
|
7,372
|
0.6
|
||||||||||||
Vacant and unimproved
|
38,417
|
3.1
|
42,881
|
3.6
|
||||||||||||
Commercial development
|
380
|
---
|
559
|
---
|
||||||||||||
Residential improved
|
71,903
|
5.8
|
67,922
|
5.7
|
||||||||||||
Commercial improved
|
281,984
|
22.8
|
289,651
|
24.2
|
||||||||||||
Manufacturing and industrial
|
89,864
|
7.3
|
89,839
|
7.5
|
||||||||||||
Total commercial real estate
|
500,068
|
40.4
|
508,672
|
42.5
|
||||||||||||
Commercial and industrial
|
423,102
|
34.2
|
%
|
377,298
|
31.5
|
%
|
||||||||||
Total commercial
|
923,170
|
74.6
|
885,970
|
74.0
|
||||||||||||
Consumer
|
||||||||||||||||
Residential mortgage
|
216,763
|
17.5
|
209,972
|
17.5
|
||||||||||||
Unsecured
|
454
|
0.1
|
637
|
0.1
|
||||||||||||
Home equity
|
88,295
|
7.2
|
92,716
|
7.7
|
||||||||||||
Other secured
|
7,713
|
0.6
|
8,637
|
0.7
|
||||||||||||
Total consumer
|
313,225
|
25.4
|
311,962
|
26.0
|
||||||||||||
Total loans
|
$
|
1,236,395
|
100.0
|
%
|
$
|
1,197,932
|
100.0
|
%
|
(1) |
Includes both owner occupied and non-owner occupied commercial real estate.
|
Nine Months Ended September 30, 2016
|
Nine Months Ended September 30, 2015
|
|||||||||||||||||||||||
Portfolio
Originations
|
Percent of
Total
Originations
|
Average
Loan Size
|
Portfolio
Originations
|
Percent of
Total
Originations
|
Average
Loan Size
|
|||||||||||||||||||
Commercial real estate:
|
||||||||||||||||||||||||
Residential developed
|
$
|
5,227
|
2.1
|
%
|
$
|
871
|
$
|
6,093
|
2.1
|
%
|
$
|
358
|
||||||||||||
Unsecured to residential developers
|
---
|
---
|
---
|
---
|
---
|
---
|
||||||||||||||||||
Vacant and unimproved
|
552
|
---
|
184
|
4,058
|
1.4
|
254
|
||||||||||||||||||
Commercial development
|
2,342
|
1.0
|
1,171
|
1,148
|
0.4
|
574
|
||||||||||||||||||
Residential improved
|
48,718
|
19.4
|
350
|
40,324
|
13.9
|
233
|
||||||||||||||||||
Commercial improved
|
29,632
|
11.8
|
988
|
35,617
|
12.3
|
685
|
||||||||||||||||||
Manufacturing and industrial
|
11,457
|
4.6
|
955
|
29,128
|
10.0
|
1,214
|
||||||||||||||||||
Total commercial real estate
|
97,928
|
38.9
|
510
|
116,368
|
40.1
|
410
|
||||||||||||||||||
Commercial and industrial
|
58,432
|
23.2
|
526
|
76,137
|
26.2
|
327
|
||||||||||||||||||
Total commercial
|
156,360
|
62.1
|
516
|
192,505
|
66.3
|
372
|
||||||||||||||||||
Consumer
|
||||||||||||||||||||||||
Residential mortgage
|
62,616
|
24.9
|
204
|
61,193
|
21.1
|
215
|
||||||||||||||||||
Unsecured
|
20
|
---
|
10
|
68
|
---
|
6
|
||||||||||||||||||
Home equity
|
31,006
|
12.3
|
84
|
33,812
|
11.6
|
79
|
||||||||||||||||||
Other secured
|
1,808
|
0.7
|
17
|
2,832
|
1.0
|
23
|
||||||||||||||||||
Total consumer
|
95,450
|
37.9
|
121
|
97,905
|
33.7
|
115
|
||||||||||||||||||
Total loans
|
$
|
251,810
|
100.0
|
%
|
231
|
$
|
290,410
|
100.0
|
%
|
212
|
Nine Months
Ended
September 30,
2016
|
Nine Months
Ended
September 30,
2015
|
|||||||
Commercial loans originated
|
$
|
156,360
|
$
|
192,505
|
||||
Repayments of commercial loans
|
(115,858
|
)
|
(92,316
|
)
|
||||
Change in undistributed - available credit
|
(3,302
|
)
|
(36,311
|
)
|
||||
Net increase/(decrease) in total commercial loans
|
$
|
37,200
|
$
|
63,878
|
September 30, 2016
|
December 31, 2015
|
|||||||||||||||||||||||
Foreclosed Asset Property Type
|
Carrying
Value
|
Foreclosed
Asset
Writedown
|
Combined
Writedown
(Loan and
Foreclosed
Asset)
|
Carrying
Value at
Carrying
Value
|
Foreclosed
Asset
Writedown
|
Combined
Writedown
(Loan and
Foreclosed
Asset)
|
||||||||||||||||||
Single Family
|
$
|
136
|
---
|
%
|
20.3
|
%
|
$
|
736
|
---
|
%
|
13.2
|
%
|
||||||||||||
Residential Lot
|
200
|
48.5
|
66.9
|
277
|
34.0
|
59.4
|
||||||||||||||||||
Multi-Family
|
---
|
---
|
---
|
---
|
---
|
---
|
||||||||||||||||||
Vacant Land
|
3,846
|
44.6
|
55.8
|
3,887
|
44.0
|
55.4
|
||||||||||||||||||
Residential Development
|
2,774
|
34.4
|
72.7
|
3,859
|
28.7
|
68.7
|
||||||||||||||||||
Commercial Office
|
385
|
46.9
|
62.8
|
1,002
|
25.4
|
44.1
|
||||||||||||||||||
Commercial Industrial
|
---
|
---
|
---
|
---
|
---
|
---
|
||||||||||||||||||
Commercial Improved
|
5,769
|
48.7
|
51.2
|
7,811
|
40.1
|
44.1
|
||||||||||||||||||
$
|
13,110
|
44.6
|
59.7
|
$
|
17,572
|
37.0
|
54.2
|
September 30,
2016
|
December 31,
2015
|
|||||||
Nonaccrual loans
|
$
|
233
|
$
|
739
|
||||
Loans 90 days or more delinquent and still accruing
|
---
|
17
|
||||||
Total nonperforming loans (NPLs)
|
233
|
756
|
||||||
Foreclosed assets
|
13,110
|
17,572
|
||||||
Repossessed assets
|
---
|
---
|
||||||
Total nonperforming assets (NPAs)
|
13,343
|
18,328
|
||||||
NPLs to total loans
|
0.02
|
%
|
0.06
|
%
|
||||
NPAs to total assets
|
0.81
|
%
|
1.06
|
%
|
September 30, 2016
|
December 31, 2015
|
|||||||||||||||||||||||
Commercial
|
Consumer
|
Total
|
Commercial
|
Consumer
|
Total
|
|||||||||||||||||||
Performing TDRs
|
$
|
18,253
|
$
|
12,618
|
$
|
30,871
|
$
|
24,932
|
$
|
13,543
|
$
|
38,475
|
||||||||||||
Nonperforming TDRs (1)
|
152
|
8
|
160
|
550
|
27
|
577
|
||||||||||||||||||
Total TDRs
|
$
|
18,405
|
$
|
12,626
|
$
|
31,031
|
$
|
25,482
|
$
|
13,570
|
$
|
39,052
|
(1)
|
Included in nonperforming asset table above
|
Quarter Ended
September 30,
2016
|
Quarter Ended
June 30,
2016
|
Quarter Ended
March 31,
2016
|
Quarter Ended
December 31,
2015
|
Quarter Ended
September 30,
2015
|
||||||||||||||||
Commercial loans
|
$
|
923.2
|
$
|
894.4
|
$
|
905.3
|
$
|
886.0
|
$
|
882.1
|
||||||||||
Nonperforming loans
|
0.2
|
0.3
|
0.4
|
0.8
|
4.2
|
|||||||||||||||
Other real estate owned and repo assets
|
13.1
|
14.1
|
16.2
|
17.6
|
25.7
|
|||||||||||||||
Total nonperforming assets
|
13.3
|
14.4
|
16.6
|
18.3
|
29.9
|
|||||||||||||||
Net charge-offs (recoveries)
|
(0.1
|
)
|
(0.6
|
)
|
(0.1
|
)
|
(1.6
|
)
|
(0.3
|
)
|
||||||||||
Total delinquencies
|
0.3
|
1.0
|
0.8
|
1.4
|
2.9
|
September 30,
2016
|
June 30,
2016
|
March 31,
2016
|
Dec 31,
2015
|
September 30,
2015
|
||||||||||||||||
Total capital to risk weighted assets
|
15.2
|
%
|
15.2
|
%
|
15.0
|
%
|
14.8
|
%
|
14.6
|
%
|
||||||||||
Common Equity Tier 1 to risk weighted assets
|
11.3
|
11.1
|
11.1
|
10.8
|
10.5
|
|||||||||||||||
Tier 1 capital to risk weighted assets
|
14.1
|
14.0
|
13.8
|
13.6
|
13.4
|
|||||||||||||||
Tier 1 capital to average assets
|
12.0
|
11.9
|
11.7
|
11.5
|
11.3
|
Less than
1 year
|
1-3 years
|
3-5 years
|
More than
5 years
|
|||||||||||||
Long term debt
|
$
|
---
|
$
|
---
|
$
|
---
|
$
|
41,238
|
||||||||
Time deposit maturities
|
45,085
|
28,412
|
3,080
|
15
|
||||||||||||
Other borrowed funds
|
2,055
|
62,118
|
20,000
|
---
|
||||||||||||
Operating lease obligations
|
237
|
459
|
184
|
---
|
||||||||||||
Total
|
$
|
47,377
|
$
|
90,989
|
$
|
23,264
|
$
|
41,253
|
Interest Rate Scenario
|
Economic
Value of
Equity
|
Percent
Change
|
Net Interest
Income
|
Percent
Change
|
||||||||||||
Interest rates up 200 basis points
|
$
|
216,235
|
(2.83
|
)%
|
$
|
48,872
|
1.00
|
%
|
||||||||
Interest rates up 100 basis points
|
220,030
|
(0.86
|
)
|
48,625
|
0.49
|
|||||||||||
No change
|
221,686
|
---
|
48,388
|
---
|
||||||||||||
Interest rates down 100 basis points
|
207,364
|
(7.44
|
)
|
47,185
|
(2.49
|
)
|
(a) |
Evaluation of Disclosure Controls and Procedures.
Under the supervision and with the participation of our management, including our Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Exchange Act Rules 13a-15(e) and 15d-15(e), as of September 30, 2016, the end of the period covered by this report.
|
(b) |
Changes in Internal Controls
. During the period covered by this report, there have been no changes in the Company’s internal control over financial reporting that have materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.
|
Restated Articles of Incorporation.
|
|
3.2
|
Bylaws. Previously filed with the Commission on February 19, 2015 in Macatawa Bank Corporation's Annual Report on Form 10-K for the year ended December 31, 2014, Exhibit 3.1. Here incorporated by reference.
|
4.1
|
Restated Articles of Incorporation. Exhibit 3.1 is here incorporated by reference.
|
4.2
|
Bylaws. Exhibit 3.2 is here incorporated by reference.
|
4.3
|
Long-Term Debt. The registrant has outstanding long-term debt which at the time of this report does not exceed 10% of the registrant's total consolidated assets. The registrant agrees to furnish copies of the agreements defining the rights of holders of such long-term debt to the SEC upon request.
|
Certification of Chief Executive Officer.
|
|
Certification of Chief Financial Officer.
|
|
Certification pursuant to 18 U.S.C. Section 1350.
|
|
101.INS
|
XBRL Instance Document
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
MACATAWA BANK CORPORATION
|
|
/s/ Ronald L. Haan
|
|
Ronald L. Haan
|
|
Chief Executive Officer
|
|
(Principal Executive Officer)
|
|
/s/ Jon W. Swets
|
|
Jon W. Swets
|
|
Senior Vice President and
|
|
Chief Financial Officer
|
|
(Principal Financial and Accounting Officer)
|
|
Dated: October 27, 2016
|
1. |
I have reviewed this quarterly report on Form 10-Q for the quarter ended September 30, 2016 of Macatawa Bank Corporation;
|
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:
|
(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; and
|
(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; and
|
(c) |
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d) |
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.
|
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):
|
(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ Ronald L. Haan
|
|
Ronald L. Haan
|
|
Chief Executive Officer
|
|
(Principal Executive Officer)
|
1. |
I have reviewed this quarterly report on Form 10-Q for the quarter ended September 30, 2016 of Macatawa Bank Corporation;
|
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:
|
(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; and
|
(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; and
|
(c) |
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d) |
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.
|
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):
|
(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ Jon W. Swets
|
|
Jon W. Swets
|
|
Senior Vice President and
|
|
Chief Financial Officer
|
|
(Principal Financial and Accounting Officer)
|
/s/ Ronald L. Haan
|
|
Ronald L. Haan
|
|
Chief Executive Officer
|
|
(Principal Executive Officer)
|
|
/s/ Jon W. Swets
|
|
Jon W. Swets
|
|
Senior Vice President and
|
|
Chief Financial Officer
|
|
(Principal Financial and Accounting Officer)
|
|
Dated: October 27, 2016
|