Ohio
|
34-1395608
|
(State or other jurisdiction of
|
(I.R.S. Employer
|
incorporation or organization)
|
Identification No.)
|
401 Clinton Street, Defiance, Ohio
|
43512
|
(Address of principal executive offices)
|
(Zip Code)
|
Registrant’s telephone number, including area code:
|
(419) 783-8950
|
Securities registered pursuant to Section 12(b) of the Act:
|
Title of each class
|
Name of each exchange on which registered
|
Common Shares, Without Par Value
|
The NASDAQ Stock Market, LLC
|
Securities registered pursuant to Section 12(g) of the Act:
|
Not Applicable
|
PART I
|
||
Item 1.
|
Business
|
|
Item 1A.
|
Risk Factors
|
|
Item 1B.
|
Unresolved Staff Comments
|
|
Item 2.
|
Properties
|
|
Item 3.
|
Legal Proceedings
|
|
Item 4.
|
Reserved
|
|
Supplemental Item: Executive Officers of the Registrant
|
||
PART II
|
||
Item 5.
|
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
|
Item 6.
|
Selected Financial Data
|
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
Item 7A.
|
Qualitative and Quantitative Disclosures about Market Risk
|
|
Item 8.
|
Financial Statements and Supplementary Data
|
|
Item 9.
|
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
|
|
Item 9A.
|
Controls and Procedures
|
|
Item 9B.
|
Other Information
|
|
PART III
|
||
Item 10.
|
Directors, Executive Officers and Corporate Governance
|
|
Item 11.
|
Executive Compensation
|
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence
|
|
Item 14.
|
Principal Accountant Fees and Services
|
|
PART IV
|
||
Item 15.
|
Exhibits and Financial Statement Schedules
|
|
Signatures and Certifications
|
|
·
|
limit the extent to which a bank or its subsidiaries may engage in “covered transactions” with any one affiliate to an amount equal to 10% of the bank’s capital stock and surplus (i.e., tangible capital);
|
|
·
|
limit the extent to which a bank or its subsidiaries may engage in “covered transactions” with all affiliates to 20% of the bank’s capital stock and surplus; and
|
|
·
|
require that all covered transactions be on terms substantially the same, or at least as favorable to the bank or subsidiary, as those provided to nonaffiliated.
|
|
·
|
the Dodd-Frank Act creates a Consumer Financial Protection Bureau with broad powers to adopt and enforce consumer protection regulations;
|
|
·
|
new capital regulations for bank holding companies will be adopted, which may impose stricter requirements, and any new trust preferred securities will no longer constitute Tier I capital;
|
|
·
|
the federal law prohibiting the payment of interest on commercial demand deposit accounts will be eliminated effective in July 2011;
|
|
·
|
the standard maximum amount of deposit insurance per customer is permanently increased to $250,000, and non-interest bearing transaction accounts will have unlimited insurance through December 31, 2012;
|
|
·
|
the assessment base for determining deposit insurance premiums will be expanded to include liabilities other than just deposits; and
|
|
·
|
new corporate governance requirements applicable generally to all public companies in all industries will require new compensation practices and disclosure requirements, including requiring companies to “claw back” incentive compensation under certain circumstances, to provide shareholders the opportunity to cast a non-binding vote on executive compensation and to consider the independence of compensation advisers.
|
|
Effect of Environmental Regulation
|
|
None
|
Main Banking Center & Corporate Offices
|
401 Clinton Street, Defiance, OH
|
Angola LPO
|
908 North Wayne Street, Suite A, Angola, IN
|
Bryan Banking Center
|
1419 West High Street, Bryan, OH
|
Chief Banking Center
|
705 Deatrick Street, Defiance, OH
|
Columbus LPO
|
109 South High, #8, Dublin, OH
|
Delta Banking Center
|
312 Main Street, Delta, OH
|
Fort Wayne Banking Center
|
12832 Coldwater Road, Fort Wayne, IN
|
Luckey Banking Center
|
235 Main Street, Luckey, OH
|
Lyons Banking Center
|
133 East Morenci Street, Lyons, OH
|
Market Street Banking Center
|
930 West Market Street, Lima, OH
|
Montpelier Banking Center
|
1201 East Main Street, Montpelier, OH
|
Motor Bank Drive-thru
|
510 Third Street, Defiance, OH
|
Northtowne Banking Center
|
1600 North Clinton Street, Defiance, OH
|
Oakwood Banking Center
|
218 North First Street, Oakwood, OH
|
Paulding Banking Center
|
220 North Main Street, Paulding, OH
|
Perrysburg Banking Center
|
610 East South Boundary Street, Perrysburg, OH
|
Pioneer Banking Center
|
119 South State Street, Pioneer, OH
|
Sylvania Banking Center
|
6401 Monroe Street, Sylvania, OH
|
Walbridge Banking Center
|
311 Main Street, Walbridge, OH
|
Wauseon Banking Center
|
515 Parkview, Wauseon, OH
|
West Unity Banking Center
|
112 East Jackson Street, West Unity, OH
|
Name
|
Age
|
Position(s) Held with the Company and
its Subsidiaries and Principal Occupation(s)
|
Mark A. Klein
|
56
|
President, and Chief Executive Officer of the Company since January 2010; Director of the Company since February 2010; President and Chief Executive Officer of State Bank since January 2006; Director of State Bank since 2006; Member of RFS Investment Committee since March 2007. Senior Vice President Private Banking of Sky Bank, Toledo, Ohio from 2004 to January 2006; Vice President and Team Leader of Sky Bank, Toledo, Ohio from 2000 to 2004; Executive Vice President and Senior Lender of $450 million Sky Bank affiliate from 1994 to 1999; 12 year Member of Defiance City School Board of Education; Member of Defiance Area Foundation Board (non-profit); Member of Promedica-Defiance Regional Medical Center Foundation Board.
|
Anthony V. Cosentino
|
48
|
Executive Vice President of the Company and State Bank since March 2010. Vice President for Financial Planning and Analysis at AmTrust Financial Corporation from June 2006 to December 2009. Chief Financial Officer of Fifth Third Bank of Northeastern Ohio, a subsidiary of Fifth Third Bancorp, from August 1994 to May 2006.
|
Jonathan R. Gathman
|
37
|
Executive Vice President and Senior Lending Officer of the Company since October 2005; Senior Vice President and Commercial Lending Manager from June 2005 through October 2005; Vice President and Commercial Lender from February 2003 through June 2005. Began working for The State Bank and Trust Company in May 1996.
|
I.
|
DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY;
INTEREST RATES AND
INTEREST
DIFFERENTIAL
|
2010 | 2009 | 2008 | ||||||||||||||||||||||||||||||||||
($in thousands)
|
Average
|
Average
|
Average
|
Average
|
Average
|
Average
|
||||||||||||||||||||||||||||||
Balance
|
Interest
|
Rate
|
Balance
|
Interest
|
Rate
|
Balance
|
Interest
|
Rate
|
||||||||||||||||||||||||||||
Assets:
|
||||||||||||||||||||||||||||||||||||
Securities
|
||||||||||||||||||||||||||||||||||||
Taxable
|
$ | 86,961 | $ | 2,267 | 2.61 | % | $ | 89,092 | $ | 4,083 | 4.58 | % | $ | 84,301 | $ | 4,293 | 5.09 | % | ||||||||||||||||||
Non-taxable (1)
|
31,895 | 2,114 | 6.63 | % | 27,114 | 1,611 | 5.94 | % | 17,193 | 1,040 | 6.05 | % | ||||||||||||||||||||||||
Federal funds sold
|
— | — | N/A | 77 | 0 | 0.17 | % | 4,985 | 134 | 2.68 | % | |||||||||||||||||||||||||
Loans, net (2)(3)
|
445,700 | 25,934 | 5.82 | % | 453,787 | 27,492 | 6.06 | % | 401,770 | 27,601 | 6.87 | % | ||||||||||||||||||||||||
Total earning assets
|
564,556 | 30,315 | 5.37 | % | 570,070 | 33,186 | 5.82 | % | 508,250 | 33,067 | 6.51 | % | ||||||||||||||||||||||||
Cash and due from banks
|
43,024 | 27,573 | 9,570 | |||||||||||||||||||||||||||||||||
Allowance for loan losses
|
(6,913 | ) | (5,650 | ) | (4,182 | ) | ||||||||||||||||||||||||||||||
Premises and equipment
|
20,336 | 23,993 | 21,145 | |||||||||||||||||||||||||||||||||
Other assets
|
52,777 | 51,485 | 40,708 | |||||||||||||||||||||||||||||||||
Total assets
|
$ | 673,781 | $ | 667,470 | $ | 575,491 | ||||||||||||||||||||||||||||||
Liabilities
|
||||||||||||||||||||||||||||||||||||
Deposits
|
||||||||||||||||||||||||||||||||||||
Savings and interest-bearing demand deposits
|
$ | 231,294 | $ | 622 | 0.27 | % | $ | 209,394 | $ | 780 | 0.37 | % | $ | 158,765 | $ | 1,748 | 1.10 | % | ||||||||||||||||||
Time deposits
|
215,668 | 4,501 | 2.09 | % | 226,275 | 5,747 | 2.54 | % | 213,891 | 8,319 | 3.89 | % | ||||||||||||||||||||||||
Short-term borrowings
|
50,092 | 1,851 | 3.70 | % | 46,930 | 1,869 | 3.98 | % | 44,891 | 1,874 | 4.18 | % | ||||||||||||||||||||||||
Advances from FHLB
|
28,313 | 1,094 | 3.86 | % | 38,571 | 1,625 | 4.21 | % | 33,377 | 1,508 | 4.52 | % | ||||||||||||||||||||||||
Junior subordinated debentures
|
20,620 | 1,534 | 7.44 | % | 20,620 | 1,573 | 7.63 | % | 20,620 | 1,692 | 8.20 | % | ||||||||||||||||||||||||
Other borrowed funds
|
— | — | N/A | — | — | N/A | — | — | N/A | |||||||||||||||||||||||||||
Total interest-bearing liabilities
|
545,987 | 9,602 | 1.76 | % | 541,790 | 11,594 | 2.14 | % | 471,544 | 15,141 | 3.21 | % | ||||||||||||||||||||||||
Demand deposits
|
62,821 | 53,857 | 35,386 | |||||||||||||||||||||||||||||||||
Other liabilities
|
7,693 | 8,246 | 8,597 | |||||||||||||||||||||||||||||||||
Total liabilities
|
616,500 | 603,894 | 515,527 | |||||||||||||||||||||||||||||||||
Shareholders' equity
|
57,281 | 63,576 | 59,964 | |||||||||||||||||||||||||||||||||
Total liabilities and shareholders' equity
|
$ | 673,781 | $ | 667,470 | $ | 575,491 | ||||||||||||||||||||||||||||||
Net interest income (tax equivalent basis)
|
$ | 20,713 | $ | 21,592 | $ | 17,926 | ||||||||||||||||||||||||||||||
Net interest income as a percent
|
||||||||||||||||||||||||||||||||||||
of average interest-earning assets
|
3.67 | % | 3.79 | % | 3.53 | % |
(1) Security interest is computed on a tax equivalent basis using a 34% statutory tax rate. The tax equivalent adjustment was $719,000, $548,000
and $354,000 in 2010, 2009 and 2008, respectively.
|
|||||||||
(2) Nonaccruing loans and loans held for sale are included in the average balances.
|
|||||||||
(3) Loan interest is computed on a tax equivalent basis using a 34% statutory tax rate. The tax equivalent adjustment was $32,000, $47,000 and $44,000
in 2010, 2009 and 2008, respectively.
|
I.
|
DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY;
|
|
INTEREST RATES AND
INTEREST
DIFFERENTIAL
(Continued)
|
|
Volume Variance - change in volume multiplied by the previous year's rate.
|
|
Rate Variance - change in rate multiplied by the previous year's volume.
|
|
Rate/Volume Variance - change in volume multiplied by the change in rate. This variance was allocated to volume variance and rate variance in proportion to the relationship of the absolute dollar amount of the change in each.
|
|
Interest on non-taxable securities has been adjusted to a fully tax equivalent basis using a statutory tax rate of 34% in 2010, 2009 and 2008.
|
Total
|
||||||||||||
Variance
|
Variance Attributable To
|
|||||||||||
2010/2009 |
Volume
|
Rate
|
||||||||||
Interest income
|
(dollars in thousands)
|
|||||||||||
Securities
|
||||||||||||
Taxable
|
$ | (1,816 | ) | $ | (95 | ) | $ | (1,721 | ) | |||
Non-taxable
|
503 | 304 | 199 | |||||||||
Federal funds sold
|
— | — | — | |||||||||
Loans, net of unearned income and deferred loan fees
|
(1,558 | ) | (484 | ) | (1,074 | ) | ||||||
|
(2,871 | ) | (275 | ) | (2,596 | ) | ||||||
Interest expense
|
||||||||||||
Deposits
|
||||||||||||
Savings and interest-bearing demand deposits
|
(158 | ) | 75 | (233 | ) | |||||||
Time deposits
|
(1,246 | ) | (259 | ) | (987 | ) | ||||||
Short-term borrowings
|
(18 | ) | 122 | (140 | ) | |||||||
Advances from FHLB
|
(531 | ) | (405 | ) | (126 | ) | ||||||
Trust preferred securities
|
(39 | ) | — | (39 | ) | |||||||
Other borrowed funds
|
— | — | — | |||||||||
$ | (1,992 | ) | $ | (467 | ) | $ | (1,525 | ) | ||||
Net interest income
|
$ | (879 | ) | $ | 192 | $ | (1,071 | ) |
I.
|
DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY;
|
|
INTEREST RATES AND
INTEREST
DIFFERENTIAL
(Continued)
|
Total
|
||||||||||||
Variance
|
Variance Attributable To
|
|||||||||||
2009/2008 |
Volume
|
Rate
|
||||||||||
Interest income
|
(dollars in thousands)
|
|||||||||||
Securities
|
||||||||||||
Taxable
|
$ | (210 | ) | $ | 235 | $ | (445 | ) | ||||
Non-taxable
|
571 | 590 | (19 | ) | ||||||||
Federal funds sold
|
(134 | ) | (134 | ) | — | |||||||
Loans, net of unearned income and deferred loan fees
|
(108 | ) | 3,353 | (3,461 | ) | |||||||
|
119 | 4,044 | (3,925 | ) | ||||||||
Interest expense
|
||||||||||||
Deposits
|
||||||||||||
Savings and interest-bearing demand deposits
|
(968 | ) | 437 | (1,405 | ) | |||||||
Time deposits
|
(2,572 | ) | 458 | (3,030 | ) | |||||||
Short-term borrowings
|
(5 | ) | 83 | (88 | ) | |||||||
Advances from FHLB
|
117 | 224 | (107 | ) | ||||||||
Trust preferred securities
|
(119 | ) | — | (119 | ) | |||||||
Other borrowed funds
|
— | — | — | |||||||||
$ | (3,547 | ) | $ | 1,202 | $ | (4,749 | ) | |||||
Net interest income
|
$ | 3,666 | $ | 2,842 | $ | 824 |
II.
|
INVESTMENT PORTFOLIO
|
|
A.
|
The book value of securities available for sale as of December 31 in each of the following years are summarized as follows:
|
Book Value of Securities
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
(dollars in thousands)
|
||||||||||||
U.S. Treaury and government agencies
|
$ | 43,651 | $ | 12,944 | $ | 15,184 | ||||||
State and political subdivisions
|
32,298 | 31,537 | 22,801 | |||||||||
Mortgage-backed securities
|
54,628 | 52,246 | 64,546 | |||||||||
Money Market Mutual Fund
|
2,162 | 8,333 | — | |||||||||
Other securities
|
— | — | 52 | |||||||||
Marketable equity securities
|
23 | 23 | 23 | |||||||||
Total
|
$ | 132,762 | $ | 105,083 | $ | 102,606 |
|
B.
|
The maturity distribution and weighted average interest rates of securities available for sale at December 31, 2010 are set forth in the table below. The weighted average interest rates are based on coupon rates for securities purchased at par value and on effective interest rates considering amortization or accretion if the securities were purchased at a premium or discount:
|
Maturing
|
||||||||||||||||
After One Year
|
After Five Years
|
|||||||||||||||
Within
|
but within
|
but within
|
After
|
|||||||||||||
One Year
|
Five Years
|
Ten Years
|
Ten Years
|
|||||||||||||
(dollars in thousands)
|
||||||||||||||||
U.S. Treasury and government agencies
|
$ | 4,196 | $ | 1,997 | $ | 21,551 | $ | 15,907 | ||||||||
State and political subdivisions
|
873 | 3,008 | 6,080 | 22,337 | ||||||||||||
Mortgage-backed securities
|
538 | 240 | — | 53,850 | ||||||||||||
Total Securities with maturity
|
$ | 5,607 | $ | 5,245 | $ | 27,631 | $ | 92,094 | ||||||||
Weighted average yield by maturity (1)
|
1.41 | % | 2.59 | % | 2.24 | % | 3.34 | % | ||||||||
Money Market Mutual Fund with no maturity
|
$ | 2,162 | — | — | — | |||||||||||
Marketable equity securities with no maturity
|
23 | — | — | — | ||||||||||||
Total Securities with no stated maturity
|
$ | 2,185 | $ | — | $ | — | $ | — | ||||||||
Weighted average yield no maturity (1)
|
< 0.01%
|
— | — | — |
(1)
|
Yields are not presented on a tax-equivalent basis. Money market funds represent the payments received on mortgage-backed securities or funds received from the maturity or calls of U.S Treasury, government agency and municipal securities. These funds are then reinvested back into these securities
|
|
C.
|
Excluding those holdings of the investment portfolio in U.S. Treasury securities and other agencies of the U.S. Government, there were no other securities of any one issuer which exceeded 10% of the shareholders' equity of the Company at December 31, 2010.
|
III.
|
LOAN PORTFOLIO
|
|
A.
|
Types of Loans - Total loans on the balance sheet are comprised of the following classifications at December 31 for the years indicated:
|
Types of Loans
|
||||||||||||||||||||
(dollars in thousands)
|
2010
|
2009
|
2008
|
2007
|
2006
|
|||||||||||||||
Commercial business and agricultural
|
$ | 113,251 | $ | 126,128 | $ | 127,287 | $ | 126,418 | $ | 116,324 | ||||||||||
Commercial real estate
|
177,890 | 179,909 | 161,566 | 126,784 | 109,503 | |||||||||||||||
Residential real estate mortgage
|
84,775 | 92,972 | 107,905 | 84,621 | 94,389 | |||||||||||||||
Consumer loans to individuals
|
51,710 | 53,655 | 53,339 | 51,358 | 49,314 | |||||||||||||||
Leases
|
194 | 221 | 266 | 330 | 857 | |||||||||||||||
Total loans
|
$ | 427,820 | $ | 452,885 | $ | 450,363 | $ | 389,511 | $ | 370,387 | ||||||||||
Real estate mortgage loans held for resale
|
$ | 9,055 | $ | 16,858 | $ | 3,824 | $ | 1,650 | $ | 390 |
|
B.
|
Maturities and Sensitivities of Loans to Changes in Interest Rates - The following table shows the amounts of commercial and agricultural loans outstanding as of December 31, 2010 which, based on remaining scheduled repayments of principal, are due in the periods indicated. Also, the amounts have been classified according to sensitivity to changes in interest rates for commercial and agricultural loans due after one year. (Variable-rate loans are those loans with floating or adjustable interest rates.)
|
Maturing
|
Commercial Business
|
Commercial
|
||||||||||
(dollars in thousands)
|
and Agricultural
|
Real Estate
|
Total
|
|||||||||
Within one year
|
$ | 16,894 | $ | 17,872 | $ | 34,766 | ||||||
After one year but within five years
|
37,436 | 47,157 | 84,593 | |||||||||
After five years
|
58,921 | 112,861 | 171,782 | |||||||||
Total commercial business, commercial real estate
|
||||||||||||
and agricultural loans
|
$ | 113,251 | $ | 177,890 | $ | 291,141 |
III.
|
LOAN
PORTFOLIO
(Continued)
|
Interest Sensitivity
|
||||||||||||
Fixed
|
Variable
|
|||||||||||
Rate
|
Rate
|
Total
|
||||||||||
Commercial Business and Agricultural
|
(dollars in thousands)
|
|||||||||||
Due after one year but within five years
|
$ | 12,595 | $ | 24,841 | $ | 37,436 | ||||||
Due after five years
|
6,481 | 52,440 | 58,921 | |||||||||
Total
|
$ | 19,076 | $ | 77,281 | $ | 96,357 | ||||||
Commercial Real Estate
|
||||||||||||
Due after one year but within five years
|
14,384 | 32,773 | 47,157 | |||||||||
Due after five years
|
16,892 | 95,969 | 112,861 | |||||||||
Total
|
$ | 31,276 | $ | 128,742 | $ | 160,018 | ||||||
Commercial Business, Commercial
|
||||||||||||
Real Estate and Agricultural
|
||||||||||||
Due after one year but within five years
|
26,979 | 57,614 | 84,593 | |||||||||
Due after five years
|
23,373 | 148,409 | 171,782 | |||||||||
Total
|
$ | 50,352 | $ | 206,023 | $ | 256,375 |
|
C.
|
Risk Elements
|
|
1.
|
Non-accrual, Past Due, Restructured and Impaired Loans – The following schedule summarizes non-accrual, past due, restructured and impaired loans at December 31 in each of the following years.
|
2010
|
2009
|
2008
|
2007
|
2006
|
||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||
(a) Loans accounted for on a non-accrual basis
|
$ | 12,283 | $ | 18,543 | $ | 5,178 | $ | 5,990 | $ | 3,828 | ||||||||||
(b) Accruing loans which are contractually past due
|
||||||||||||||||||||
90 days or more as to interest or principal payments
|
— | — | — | — | — | |||||||||||||||
(c) Loans not included in (a) which are "Troubled Debt
|
||||||||||||||||||||
Restructurings" as defined by Accounting Standards
|
||||||||||||||||||||
Codification 310-40
|
1,107 | 1,364 | 151 | 159 | 166 | |||||||||||||||
Total non-performing loans and troubled debt restructuring
|
$ | 13,390 | $ | 19,907 | $ | 5,329 | $ | 6,149 | $ | 3,994 | ||||||||||
(d) Other loans defined as impaired
|
$ | 2,751 | $ | 3,597 | $ | 1,868 | $ | 593 | $ | 82 |
2010
|
||||
($ in thousands)
|
||||
Cash basis interest income recognized on impaired loans outstanding at December 31, 2010
|
$ | 144 | ||
Interest income actually recorded on impaired loans and included in net income for the period
|
64 | |||
2010 unrecorded interest income on non-accrual loans
|
413 |
III.
|
LOAN
PORTFOLIO
(Continued)
|
1.
|
Discussion of the Non-accrual Policy
|
2.
|
Potential Problem Loans
|
3.
|
Foreign Outstandings
|
4.
|
Loan Concentrations
|
|
D.
|
Other Interest-Bearing Assets
|
|
There were no other interest-bearing assets as of December 31, 2010 which would be required to be disclosed under Item III.C.1 or Item III.C.2. if such assets were loans.
|
|
A.
|
The following schedule presents an analysis of the allowance for loan losses, average loan data and related ratios for the years ended December 31:
|
|
B.
|
The following schedule provides a breakdown of the allowance for loan losses allocated by type of loan and related ratios.
|
Allocation of the Allowance for Loan Losses
|
||||||||||||||||||||||||||||||||||||||||
Percentage
|
Percentage
|
Percentage
|
Percentage
|
Percentage
|
||||||||||||||||||||||||||||||||||||
of Loans In
|
of Loans In
|
of Loans In
|
of Loans In
|
of Loans In
|
||||||||||||||||||||||||||||||||||||
Each
|
Each
|
Each
|
Each
|
Each
|
||||||||||||||||||||||||||||||||||||
Category to
|
Category to
|
Category to
|
Category to
|
Category to
|
||||||||||||||||||||||||||||||||||||
Allowance
|
Total
|
Allowance
|
Total
|
Allowance
|
Total
|
Allowance
|
Total
|
Allowance
|
Total
|
|||||||||||||||||||||||||||||||
Amount
|
Loans
|
Amount
|
Loans
|
Amount
|
Loans
|
Amount
|
Loans
|
Amount
|
Loans
|
|||||||||||||||||||||||||||||||
December 31, 2010
|
December 31, 2009
|
December 31, 2008
|
December 31, 2007
|
December 31, 2006
|
||||||||||||||||||||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||||||||||||||||||||||
Commercial and agricultural
|
$ | 1,739 | 26.5 | % | $ | 2,685 | 27.8 | % | $ | 2,304 | 28.2 | % | $ | 2,398 | 32.5 | % | $ | 2,748 | 31.4 | % | ||||||||||||||||||||
Commercial real estate
|
3,774 | 41.6 | % | 2,804 | 39.7 | % | 1,255 | 35.9 | % | 547 | 32.5 | % | 197 | 29.6 | % | |||||||||||||||||||||||||
Residential first mortgage
|
643 | 19.8 | % | 717 | 20.5 | % | 884 | 24.0 | % | 590 | 21.7 | % | 317 | 25.5 | % | |||||||||||||||||||||||||
Consumer loans and other
|
559 | 12.1 | % | 824 | 12.0 | % | 577 | 11.9 | % | 455 | 13.3 | % | 455 | 13.5 | % | |||||||||||||||||||||||||
$ | 6,715 | 100.0 | % | $ | 7,030 | 100.0 | % | $ | 5,020 | 100.0 | % | $ | 3,990 | 100.0 | % | $ | 3,717 | 100.0 | % |
|
The average amount of deposits and average rates paid are summarized as follows for the years ended December 31:
|
2010
|
2009
|
2008
|
||||||||||||||||||||||
Average
|
Average
|
Average
|
Average
|
Average
|
Average
|
|||||||||||||||||||
Amount
|
Rate
|
Amount
|
Rate
|
Amount
|
Rate
|
|||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||||||
Savings and interest-bearing demand
|
||||||||||||||||||||||||
deposits
|
$ | 231,294 | 0.27 | % | $ | 209,394 | 0.37 | % | $ | 158,765 | 1.10 | % | ||||||||||||
Time deposits
|
215,668 | 2.09 | % | 226,275 | 2.54 | % | 213,891 | 3.89 | % | |||||||||||||||
Demand deposits (non-interest-bearing)
|
62,821 | — | 53,857 | — | 35,386 | — | ||||||||||||||||||
$ | 509,783 | $ | 489,526 | $ | 408,042 |
|
Maturities of time certificates of deposit and other time deposits of $100,000 or more outstanding at December 31, 2010 are summarized as follows:
|
Amount
|
||||
(dollars in thousands)
|
||||
Three months or less
|
$ | 10,371 | ||
Over three months and through six months
|
13,363 | |||
Over six months and through twelve months
|
20,417 | |||
Over twelve months
|
41,949 | |||
Total
|
$ | 86,100 |
|
The ratio of net income to average shareholders' equity and average total assets and certain other ratios are as follows for periods ended December 31:
|
Return on Equity and Assets
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
(dollars in thousands)
|
||||||||||||
Average total assets
|
$ | 673,781 | $ | 667,470 | $ | 575,491 | ||||||
Average shareholders’ equity
|
$ | 57,281 | $ | 63,576 | $ | 59,964 | ||||||
Net income
|
$ | (15,613 | ) | $ | 382 | $ | 5,217 | |||||
Cash dividends declared
|
$ | — | $ | 1,752 | $ | 1,677 | ||||||
Return on average total assets
|
-2.32 | % | 0.06 | % | 0.91 | % | ||||||
Return on average shareholders' equity
|
-27.26 | % | 0.60 | % | 8.70 | % | ||||||
Dividend payout ratio (1)
|
0 | 458.64 | 32.14 | |||||||||
Average shareholders' equity to average total assets
|
8.50 | % | 9.52 | % | 10.42 | % | ||||||
(1) Cash dividends declared divided by net income.
|
|
The following information is reported for short-term borrowings for 2010, 2009 and 2008:
|
2010
|
2009
|
2008
|
||||||||||
(dollars in thousands)
|
||||||||||||
Amount outstanding at end of year
|
$ | 45,785 | $ | 52,043 | $ | 43,426 | ||||||
Weighted average interest rate at end of year
|
3.70 | % | 3.28 | % | 3.91 | % | ||||||
Maximum amount outstanding at any month end
|
$ | 53,336 | $ | 52,704 | $ | 49,554 | ||||||
Average amount outstanding during the year
|
$ | 47,755 | $ | 45,553 | $ | 44,891 | ||||||
Weighted average interest rate during the year
|
3.60 | % | 3.81 | % | 4.10 | % |
Per Share
|
Per Share
|
|||||||||||
Sales Prices
|
Dividends
|
|||||||||||
2010
|
High
|
Low
|
Declared
|
|||||||||
First Quarter
|
$ | 7.25 | $ | 5.75 | $ | — | ||||||
Second Quarter
|
7.19 | 4.03 | — | |||||||||
Third Quarter
|
4.45 | 2.84 | — | |||||||||
Fourth Quarter
|
4.10 | 2.33 | — | |||||||||
2009
|
High
|
Low
|
Declared
|
|||||||||
First Quarter
|
$ | 8.61 | $ | 7.34 | $ | 0.09 | ||||||
Second Quarter
|
8.75 | 7.52 | 0.09 | |||||||||
Third Quarter
|
8.10 | 7.00 | 0.09 | |||||||||
Fourth Quarter
|
8.94 | 6.38 | 0.09 |
FINANCIAL HIGHLIGHTS
|
|||
(Dollars in thousands except per share data)
|
Year Ended
|
Year Ended
|
|||||||||||||||||||||||
December 31,
|
December 31,
|
|||||||||||||||||||||||
2010
|
2009
|
% Change
|
2009
|
2008
|
% Change
|
|||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||||||
Net Interest Income
|
$ | 19,962 | $ | 20,999 | -5 | % | $ | 20,999 | $ | 17,528 | 20 | % |
Year Ended
|
Year Ended
|
|||||||||||||||||||||||
December 31,
|
December 31,
|
|||||||||||||||||||||||
2010
|
2009
|
% Change
|
2009
|
2008
|
% Change
|
|||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||||||
Total Non-interest Income
|
$ | 20,819 | $ | 29,305 | -29 | % | $ | 29,305 | $ | 27,891 | 5 | % | ||||||||||||
Data Service Fees
|
$ | 9,736 | $ | 18,860 | -48 | % | $ | 18,860 | $ | 20,165 | -6 | % | ||||||||||||
Trust Fees
|
$ | 2,548 | $ | 2,509 | 2 | % | $ | 2,509 | $ | 3,082 | -19 | % | ||||||||||||
Deposit Service Fees
|
$ | 2,461 | $ | 2,608 | -6 | % | $ | 2,608 | $ | 2,416 | 8 | % | ||||||||||||
Gains on Sale of Loans
|
$ | 4,801 | $ | 3,355 | 43 | % | $ | 3,355 | $ | 741 | 353 | % | ||||||||||||
Investment Securities Recoveries
|
$ | 74 | $ | — | N/A | $ | — | $ | 197 | N/A | ||||||||||||||
Net Proceeds from VISA IPO
|
$ | — | $ | — | N/A | $ | — | $ | 132 | N/A | ||||||||||||||
Gains on Sale of Securities
|
$ | 451 | $ | 960 | -53 | % | $ | 960 | $ | — | N/A | |||||||||||||
Other
|
$ | 749 | $ | 1,013 | -26 | % | $ | 1,013 | $ | 1,158 | -13 | % |
Year Ended
|
Year Ended
|
|||||||||||||||||||||||
December 31,
|
December 31,
|
|||||||||||||||||||||||
2010
|
2009
|
% Change
|
2009
|
2008
|
% Change
|
|||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||||||
Data Service Fees
|
$ | 9,736 | $ | 18,860 | -48 | % | $ | 18,860 | $ | 20,165 | -6 | % |
Year Ended
|
Year Ended
|
|||||||||||||||||||||||
December 31,
|
December 31,
|
|||||||||||||||||||||||
2010
|
2009
|
% Change
|
2009
|
2008
|
% Change
|
|||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||||||
Total Non-interest Expense
|
$ | 52,308 | $ | 44,843 | 17 | % | $ | 44,843 | $ | 37,388 | 20 | % | ||||||||||||
Salaries & Employee Benefits
|
$ | 17,932 | $ | 21,035 | -15 | % | $ | 21,035 | $ | 17,318 | 21 | % | ||||||||||||
Professional Fees
|
$ | 2,546 | $ | 2,891 | -12 | % | $ | 2,891 | $ | 1,859 | 56 | % | ||||||||||||
FDIC Insurance Expense
|
$ | 1,138 | $ | 1,132 | 1 | % | $ | 1,132 | $ | 59 | 1819 | % | ||||||||||||
Goodwill & Intangible Impairment
|
$ | 6,273 | $ | — | N/A | $ | — | $ | — | 0 | % | |||||||||||||
Hardware & software impairment
|
$ | 4,892 | $ | — | N/A | $ | — | $ | — | 0 | % | |||||||||||||
All Other
|
$ | 19,527 | $ | 19,785 | -1 | % | $ | 19,785 | $ | 18,152 | 9 | % |
12/31/2010
|
% of Total
|
12/31/2009
|
% of Total
|
% Inc/(Dec)
|
12/31/2008
|
% of Total
|
% Inc/(Dec)
|
|||||||||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||||||||||||||
Commercial
|
$ | 72,489 | 17 | % | $ | 84,643 | 19 | % | -14 | % | $ | 83,645 | 21 | % | 1 | % | ||||||||||||||||
Commercial R.E.
|
177,890 | 41 | % | 179,909 | 35 | % | -1 | % | 161,566 | 33 | % | 11 | % | |||||||||||||||||||
Agricultural
|
40,762 | 10 | % | 41,485 | 10 | % | -2 | % | 43,641 | 11 | % | -5 | % | |||||||||||||||||||
Residential
|
84,775 | 20 | % | 92,972 | 24 | % | -9 | % | 107,905 | 22 | % | -14 | % | |||||||||||||||||||
Consumer
|
51,710 | 12 | % | 53,655 | 12 | % | -4 | % | 53,339 | 13 | % | 1 | % | |||||||||||||||||||
Leases
|
194 | 0 | % | 221 | 0 | % | -12 | % | 266 | 0 | % | -17 | % | |||||||||||||||||||
Loans
|
$ | 427,820 | $ | 452,885 | -6 | % | $ | 450,362 | 1 | % | ||||||||||||||||||||||
Loans held for sale
|
9,055 | 16,858 | 3,824 | |||||||||||||||||||||||||||||
Total
|
$ | 436,875 | $ | 469,743 | $ | 454,186 |
Period Ended December 31,
|
||||||||||||||||||||
(dollars in millions)
|
||||||||||||||||||||
12/31/2010
|
12/31/2009
|
Change in Dollars / Percentages
|
12/31/2008
|
Change in Dollars / Percentages
|
||||||||||||||||
Non-performing loans
|
$ | 12.3 | $ | 18.5 | $ | (6.2 | ) | $ | 5.2 | $ | 13.3 | |||||||||
Non-performing assets
|
$ | 13.8 | $ | 20.3 | $ | (6.5 | ) | $ | 6.6 | $ | 13.7 | |||||||||
Non-performing assets/total assets
|
2.09 | % | 3.02 | % | -0.93 | % | 1.00 | % | 2.02 | % | ||||||||||
Net charge-offs
|
$ | 10.9 | $ | 3.8 | $ | 7.1 | $ | 0.8 | $ | 3.0 | ||||||||||
Net charge-offs/total loans
|
2.55 | % | 0.84 | % | 1.71 | % | 0.19 | % | 0.65 | % | ||||||||||
Loan loss provision
|
$ | 10.6 | $ | 5.7 | $ | 4.9 | $ | 0.7 | $ | 5.0 | ||||||||||
Allowance for loan losses
|
$ | 6.7 | $ | 7.0 | $ | (0.3 | ) | $ | 5.0 | $ | 2.0 | |||||||||
Allowance/loans
|
1.57 | % | 1.50 | % | 0.07 | % | 1.12 | % | 0.38 | % | ||||||||||
Allowance/non-performing loans
|
55 | % | 38 | % | 17 | % | 97 | % | -59 | % | ||||||||||
Allowance/non-performing assets
|
49 | % | 35 | % | 14 | % | 76 | % | -42 | % |
Payment due by period
|
||||||||||||||||||||
Contractual Obligations
|
Total
|
Less than 1 year
|
1 - 3 years
|
3 - 5 years
|
More than 5 years
|
|||||||||||||||
Long-Term Debt Obligations
|
$ | 22,807,351 | $ | 13,668,477 | $ | 3,138,874 | $ | 6,000,000 | $ | — | ||||||||||
Other Debt Obligations
|
24,910,471 | 2,009,503 | 1,280,968 | — | 20,620,000 | |||||||||||||||
Operating Lease Obligations
|
1,546,769 | 359,944 | 566,413 | 265,000 | 355,412 | |||||||||||||||
Other Long-Term Liabilities Reflected on the Registrant's Balance Sheet under GAAP
|
214,925,512 | 109,156,087 | 81,884,807 | 21,464,356 | 2,420,262 | |||||||||||||||
Total
|
$ | 264,190,103 | $ | 125,194,011 | $ | 86,871,062 | $ | 27,729,356 | $ | 23,395,674 |
2011
|
2012
|
2013
|
2014
|
2015
|
Thereafter
|
Total
|
|
Rate Sensitive Assets
|
|||||||
Variable Rate Loans
|
$ 48,552
|
$ 11,225
|
$ 5,792
|
$ 6,423
|
$ 5,037
|
$ 13,346
|
$ 90,375
|
Average interest rate
|
4.22%
|
3.93%
|
3.84%
|
4.22%
|
3.93%
|
3.61%
|
4.06%
|
Adjustable Rate Loans
|
$ 37,668
|
$ 26,943
|
$ 23,376
|
$ 18,769
|
$ 15,724
|
$ 81,283
|
$ 203,763
|
Average interest rate
|
5.47%
|
5.53%
|
5.56%
|
5.57%
|
5.64%
|
5.81%
|
5.65%
|
Fixed Rate Loans
|
$ 54,314
|
$ 29,657
|
$ 15,589
|
$ 12,897
|
$ 6,495
|
$ 23,510
|
$ 142,461
|
Average interest rate
|
5.60%
|
5.95%
|
5.79%
|
5.80%
|
5.47%
|
4.45%
|
5.52%
|
Total Loans
|
$ 140,534
|
$ 67,825
|
$ 44,756
|
$ 38,089
|
$ 27,256
|
$ 118,139
|
$ 436,599
|
Average interest rate
|
5.09%
|
5.45%
|
5.42%
|
5.42%
|
5.28%
|
5.29%
|
5.27%
|
Fixed rate investment securities
|
$ 22,681
|
$ 11,095
|
$ 7,056
|
$ 4,757
|
$ 4,139
|
$ 76,541
|
$ 126,269
|
Average interest rate
|
3.68%
|
3.50%
|
3.77%
|
3.09%
|
3.29%
|
2.78%
|
3.09%
|
Variable rate investment securities
|
$ 4,603
|
$ 542
|
$ 552
|
$ 564
|
$ 575
|
$ 3,405
|
$ 10,241
|
Average interest rate
|
2.07%
|
2.01%
|
2.01%
|
2.01%
|
2.01%
|
2.15%
|
2.09%
|
Fed Funds Sold & Other
|
$ —
|
$ —
|
$ —
|
$ —
|
$ —
|
$ —
|
$ —
|
Average interest rate
|
0.00%
|
0.00%
|
0.00%
|
0.00%
|
0.00%
|
0.00%
|
0.00%
|
Total Rate Sensitive Assets
|
$ 167,818
|
$ 79,462
|
$ 52,364
|
$ 43,410
|
$ 31,970
|
$ 198,085
|
$ 573,109
|
Average interest rate
|
4.82%
|
5.15%
|
5.16%
|
5.12%
|
4.97%
|
4.27%
|
4.74%
|
Rate Sensitive Liabilities
|
|||||||
Demand - Non Interest Bearing
|
$ 12,572
|
$ 12,572
|
$ 12,572
|
$ 12,572
|
$ 12,458
|
$ —
|
$ 62,746
|
Demand - Interest Bearing
|
$ 21,184
|
$ 21,184
|
$ 21,184
|
$ 21,184
|
$ 20,972
|
$ —
|
$ 105,708
|
Average interest rate
|
0.14%
|
0.14%
|
0.14%
|
0.14%
|
0.14%
|
0.00%
|
0.14%
|
Money Market Accounts
|
$ 16,961
|
$ 16,961
|
$ 16,961
|
$ 16,961
|
$ 16,792
|
$ —
|
$ 84,636
|
Average interest rate
|
0.39%
|
0.39%
|
0.39%
|
0.39%
|
0.39%
|
0.00%
|
0.39%
|
Savings
|
$ 9,711
|
$ 9,511
|
$ 9,511
|
$ 9,511
|
$ 9,418
|
$ —
|
$ 47,662
|
Average interest rate
|
0.16%
|
0.16%
|
0.16%
|
0.16%
|
0.16%
|
0.00%
|
0.16%
|
Certificates of Deposit
|
$ 109,173
|
$ 55,018
|
$ 26,926
|
$ 7,752
|
$ 13,713
|
$ 2,344
|
$ 214,926
|
Average interest rate
|
1.35%
|
2.14%
|
2.13%
|
2.46%
|
2.55%
|
3.73%
|
1.79%
|
Fixed rate FHLB Advances
|
$ 11,861
|
$ 923
|
$ 4,023
|
$ 6,000
|
$ —
|
$ —
|
$ 22,807
|
Average interest rate
|
4.00%
|
3.26%
|
3.20%
|
2.92%
|
0.00%
|
0.00%
|
3.54%
|
Variable rate FHLB Advances
|
$ —
|
$ —
|
$ —
|
$ —
|
$ —
|
$ —
|
$ —
|
Average interest rate
|
0.00%
|
0.00%
|
0.00%
|
0.00%
|
0.00%
|
0.00%
|
0.00%
|
Fixed rate Notes Payable
|
$ 309
|
$ 1,281
|
$ —
|
$ —
|
$ —
|
$ 10,310
|
$ 11,900
|
Average interest rate
|
6.50%
|
6.50%
|
0.00%
|
0.00%
|
0.00%
|
10.60%
|
10.05%
|
Variable rate Notes Payable
|
$ 1,700
|
$ —
|
$ —
|
$ —
|
$ —
|
$ 10,310
|
$ 12,010
|
Average interest rate
|
4.00%
|
0.00%
|
0.00%
|
0.00%
|
0.00%
|
2.10%
|
2.37%
|
Fed Funds Purchased, Repos & Other
|
$ 25,785
|
$ 20,000
|
$ —
|
$ —
|
$ —
|
$ —
|
$ 45,785
|
Average interest rate
|
2.90%
|
4.74%
|
0.00%
|
0.00%
|
0.00%
|
0.00%
|
3.70%
|
Total Rate Sensitive Liabilities
|
$ 209,256
|
$ 137,450
|
$ 91,177
|
$ 73,980
|
$ 73,353
|
$ 22,964
|
$ 608,180
|
Average interest rate
|
1.38%
|
1.71%
|
0.89%
|
0.64%
|
0.63%
|
6.08%
|
1.38%
|
First
|
Years
|
|||||||||||||||
Comparison of 2010 to 2009
|
Year
|
2 - 5 |
Thereafter
|
Total
|
||||||||||||
Total Rate Sensitive Assets:
|
||||||||||||||||
At December 31, 2010
|
$ | 167,818 | $ | 207,206 | $ | 198,085 | $ | 573,109 | ||||||||
At December 31, 2009
|
188,112 | 248,276 | 141,859 | 578,247 | ||||||||||||
Increase (decrease)
|
$ | (20,294 | ) | $ | (41,070 | ) | $ | 56,226 | $ | (5,139 | ) | |||||
Total Rate Sensitive Liabilities:
|
||||||||||||||||
At December 31, 2010
|
$ | 209,256 | $ | 375,960 | $ | 22,964 | $ | 608,180 | ||||||||
At December 31, 2009
|
220,145 | 358,338 | 22,835 | 601,318 | ||||||||||||
Increase (decrease)
|
$ | (10,889 | ) | $ | 17,622 | $ | 129 | $ | 6,862 |
Number of securities
|
||||||
Number of securities
|
remaining available for
|
|||||
to be issued upon
|
Weighted-average
|
future issuance under equity
|
||||
exercise of
|
exercise price of
|
compensation plans
|
||||
outstanding options,
|
outstanding options,
|
(excluding securities
|
||||
Plan category
|
warrants and rights
|
warrants and rights
|
reflected in column (a)
|
|||
Equity compensation plans approved by
|
334,728
|
$9.94
|
65,000 (1)
|
|||
security holders
|
||||||
Equity compensation plans not approved
|
N/A
|
N/A
|
N/A
|
|||
by security holders
|
(a) (1)
|
Financial Statements
.
|
(a) (2)
|
Financial Statement Schedules
.
|
(a) (3)
|
Exhibits
.
|
Exhibit No.
|
Description
|
Location
|
2.1
|
Agreement and Plan of Merger, dated as of April 25, 2009, by and among Rurbanc Data Services, Inc., NC Merger Corp. and New Core Holdings, Inc.
|
Incorporated herein by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed April 29, 2009 (File No. 0-13507).
|
2.2
|
First Amendment to Agreement and Plan of Merger, dated as of December 29, 2009, by and among Rurbanc Data Services, Inc., NC Merger Corp. and New Core Holdings, Inc.
|
Filed herewith.
|
3.1
|
Amended Articles of Registrant, as amended
|
Incorporated herein by reference to Exhibit 3(a)(i) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1989 (File No. 0-13507).
|
3.2
|
Certificate of Amendment to the Amended Articles of Rurban Financial Corp.
|
Incorporated herein by reference to Exhibit 3(b) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1993 (File No. 0-13507).
|
3.3
|
Certificate of Amendment to the Amended Articles of Rurban Financial Corp.
|
Incorporated herein by reference to Exhibit 3(c) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1997 (File No. 0-13507).
|
Exhibit No.
|
Description
|
Location
|
10.1*
|
Rurban Financial Corp. Plan to Allow Directors to Elect to Defer Compensation
|
Incorporated herein by reference to Exhibit 10(v) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1996 (File No. 0-13507).
|
10.2*
|
Rurban Financial Corp. 1997 Stock Option Plan
|
Incorporated herein by reference to Exhibit 10(v) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1996 (File No. 0-13507).
|
10.3*
|
Form of Non-Qualified Stock Option Agreement with Five-Year Vesting under Rurban Financial Corp. 1997 Stock Option Plan
|
Incorporated herein by reference to Exhibit 10(w) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1997 (File No. 0-13507).
|
10.4*
|
Form of Non-Qualified Stock Option Agreement with Vesting After One Year of Employment under Rurban Financial Corp. 1997 Stock Option Plan
|
Incorporated herein by reference to Exhibit 10(a) to the Company’s Current Report on Form 8-K filed March 21, 2005 (File No. 0-13507).
|
10.5*
|
Form of Incentive Stock Option Agreement with Five-Year Vesting under Rurban Financial Corp. 1997 Stock Option Plan
|
Incorporated herein by reference to Exhibit 10(x) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1997 (File No. 0-13507).
|
10.6*
|
Form of Incentive Stock Option Agreement with Vesting After One Year of Employment under Rurban Financial Corp. 1997 Stock Option Plan
|
Incorporated herein by reference to Exhibit 10(c) to the Company’s Current Report on Form 8-K filed March 21, 2005 (File No. 0-13507).
|
10.7*
|
Form of Stock Appreciation Rights under Rurban Financial Corp. 1997 Stock Option Plan
|
Incorporated herein by reference to Exhibit 10(b) to the Company’s Current Report on Form 8-K filed March 21, 2005 (File No. 0-13507).
|
10.8*
|
Rurban Financial Corp. 2008 Stock Incentive Plan
|
Incorporated herein by reference to Exhibit 10 to the Company’s Current Report on Form 8-K filed April 22, 2008 (File No. 0-13507).
|
10.9*
|
Form of Restricted Stock Award Agreement (For Employees) under Rurban Financial Corp. 2008 Stock Option Plan
|
Incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed April 22, 2008 (File No. 0-13507).
|
10.10*
|
Form of Incentive Stock Option Agreement with Five-Year Vesting under Rurban Financial Corp. 2008 Stock Incentive Plan
|
Incorporated herein by reference to Exhibit 10.20 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2009 (File No. 0-13507).
|
10.11*
|
Form of Non-Qualified Stock Option Award Agreement with Five-Year Vesting under Rurban Financial Corp. 2008 Stock Incentive Plan
|
Incorporated herein by reference to Exhibit 10.21 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2009 (File No. 0-13507).
|
Name
|
Date
|
Capacity
|
|
/s/ Mark A. Klein
|
March 31, 2011
|
President and Chief Executive Officer
|
|
Mark A. Klein | |||
/s/ Anthony V. Cosentino
|
March 31, 2011
|
Executive Vice President and Chief Financial Officer
|
|
Anthony V. Cosentino | |||
/s/ Thomas A. Buis
|
March 31, 2011
|
Director
|
|
Thomas A. Buis | |||
/s/ Robert A. Fawcett, Jr.
|
March 31, 2011
|
Director
|
|
Robert A. Fawcett, Jr. | |||
/s/ Gaylyn J. Finn
|
March 31, 2011
|
Director
|
|
Gaylyn J. Finn | |||
/s/ Richard L. Hardgrove
|
March 31, 2011
|
Director
|
|
Richard L. Hardgrove | |||
/s/ Rita A. Kissner
|
March 31, 2011
|
Director
|
|
Rita A. Kissner | |||
/s/ Mark A. Klein
|
March 31, 2011
|
Director
|
|
Mark A. Klein | |||
/s/ Thomas L. Sauer
|
March 31, 2011
|
Director
|
|
Thomas L. Sauer | |||
/s/ Timothy J. Stolly
|
March 31, 2011
|
Director
|
|
Timothy J. Stolly | |||
Date:
March 31, 2011
|
|||
Financial Highlights
|
F- 0
|
Management’s Report on Internal Control Over Financial Reporting
|
F- 1
|
Report of Independent Registered Public Accounting Firm
|
F- 2
|
Consolidated Financial Statements
|
|
Balance Sheets
|
F-3 to F-4
|
Statements of Income
|
F-5 to F-6
|
Statements of Stockholders’ Equity
|
F-7
|
Statements of Cash Flows
|
F-8 to F-9
|
Notes to Financial Statements
|
F-10 to F-57
|
FINANCIAL HIGHLIGHTS
|
|||
(Dollars in thousands except per share data)
|
a)
|
Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company and its consolidated subsidiaries;
|
b)
|
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in conformity with U.S. generally accepted accounting principles, and that receipts and expenditures of the Company and its consolidated subsidiaries are being made only in accordance with authorizations of management and directors of the Company; and
|
c)
|
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the assets of the Company and its consolidated subsidiaries that could have a material effect on the financial statements.
|
RURBAN FINANCIAL CORP.
|
|
|
|
Mark A. Klein
|
Anthony V. Cosentino
|
President and Chief Executive Officer
|
Chief Financial Officer
|
March 31, 2011
|
ASSETS
|
||||||||
2010
|
2009
|
|||||||
Cash and due from banks
|
$ | 30,417,813 | $ | 24,824,785 | ||||
Available-for-sale securities
|
132,762,058 | 105,083,112 | ||||||
Loans held for sale
|
9,055,268 | 16,857,648 | ||||||
Loans, net of unearned income
|
427,544,414 | 452,557,581 | ||||||
Allowance for loan losses
|
(6,715,397 | ) | (7,030,178 | ) | ||||
Premises and equipment, net
|
14,622,541 | 16,993,640 | ||||||
Federal Reserve and Federal Home Loan Bank Stock, at cost
|
3,748,250 | 3,748,250 | ||||||
Foreclosed assets held for sale, net
|
1,538,307 | 1,767,953 | ||||||
Interest receivable
|
2,068,965 | 2,324,868 | ||||||
Goodwill
|
16,733,830 | 21,414,790 | ||||||
Core deposits and other intangibles
|
2,585,132 | 4,977,513 | ||||||
Purchased software
|
1,021,036 | 5,338,319 | ||||||
Cash value of life insurance
|
13,211,247 | 12,792,045 | ||||||
Deferred income taxes
|
3,202,986 | - | ||||||
Other assets
|
8,491,235 | 11,398,776 | ||||||
Total assets
|
$ | 660,287,685 | $ | 673,049,102 |
LIABILITIES AND SHAREHOLDERS' EQUITY
|
||||||||
2010
|
2009
|
|||||||
Liabilities
|
||||||||
Deposits
|
||||||||
Non interest bearing demand
|
$ | 62,745,906 | $ | 57,229,795 | ||||
Interest bearing NOW
|
105,708,472 | 87,511,973 | ||||||
Savings
|
47,662,315 | 43,321,364 | ||||||
Money Market
|
84,635,537 | 86,621,953 | ||||||
Time Deposits
|
214,925,512 | 216,557,067 | ||||||
Total deposits
|
515,677,742 | 491,242,152 | ||||||
Short-term borrowings
|
45,785,254 | 52,042,820 | ||||||
Notes payable
|
3,290,471 | 2,146,776 | ||||||
Federal Home Loan Bank advances
|
22,807,351 | 35,266,510 | ||||||
Trust preferred securities
|
20,620,000 | 20,620,000 | ||||||
Interest payable
|
1,971,587 | 1,507,521 | ||||||
Deferred income taxes
|
— | 2,715,716 | ||||||
Other liabilities
|
4,111,182 | 5,799,952 | ||||||
Total liabilities
|
614,263,587 | 611,341,447 | ||||||
Commitments and Contingent Liabilities
|
||||||||
Stockholders' Equity
|
||||||||
Common stock, $2.50 stated value; authorized
|
||||||||
10,000,000 shares; 5,027,433 shares issued
|
12,568,583 | 12,568,583 | ||||||
Additional paid-in capital
|
15,235,206 | 15,186,042 | ||||||
Retained earnings
|
18,802,106 | 34,415,316 | ||||||
Accumulated other comprehensive income (loss)
|
1,187,514 | 1,307,025 | ||||||
Treasury stock, at cost
|
||||||||
Common; 2010 - 165,654 shares, 2009 -165,654 shares
|
(1,769,311 | ) | (1,769,311 | ) | ||||
Total stockholders' equity
|
46,024,098 | 61,707,655 | ||||||
Total liabilities and stockholders' equity
|
$ | 660,287,685 | $ | 673,049,102 |
2010
|
2009
|
2008
|
||||||||||
Interest Income
|
||||||||||||
Loans
|
||||||||||||
Taxable
|
$ | 25,838,773 | $ | 27,272,465 | $ | 27,473,302 | ||||||
Tax-exempt
|
62,721 | 91,294 | 84,878 | |||||||||
Securities
|
||||||||||||
Taxable
|
2,266,719 | 4,082,639 | 4,289,728 | |||||||||
Tax-exempt
|
1,395,143 | 1,063,190 | 686,458 | |||||||||
Other
|
260 | 81,562 | 134,079 | |||||||||
Total interest income
|
29,563,616 | 32,591,150 | 32,668,445 | |||||||||
Interest Expense
|
||||||||||||
Deposits
|
5,123,015 | 6,525,942 | 10,066,325 | |||||||||
Notes payable
|
116,198 | 132,116 | 34,576 | |||||||||
Repurchase Agreements
|
1,731,227 | 1,733,668 | 1,821,330 | |||||||||
Federal funds purchased
|
3,990 | 2,827 | 18,432 | |||||||||
Federal Home Loan Bank advances
|
1,093,659 | 1,624,700 | 1,508,115 | |||||||||
Trust preferred securities
|
1,533,806 | 1,573,293 | 1,691,792 | |||||||||
Total interest expense
|
9,601,895 | 11,592,546 | 15,140,570 | |||||||||
Net Interest Income
|
19,961,721 | 20,998,604 | 17,527,875 | |||||||||
Provision for Loan Losses
|
||||||||||||
Provision for loan losses - Bank Only
|
7,587,603 | 5,738,098 | 689,567 | |||||||||
Provision for loan losses - RDSI
|
3,000,000 | — | — | |||||||||
Total provision for loan losses
|
10,587,603 | 5,738,098 | 689,567 | |||||||||
Net Interest Income After Provision for Loan Losses
|
9,374,118 | 15,260,506 | 16,838,308 | |||||||||
Non—interest Income
|
||||||||||||
Data service fees
|
9,736,416 | 18,859,701 | 20,165,451 | |||||||||
Trust fees
|
2,547,699 | 2,508,723 | 3,081,898 | |||||||||
Customer service fees
|
2,460,733 | 2,607,985 | 2,416,093 | |||||||||
Net gains on loan sales
|
4,800,812 | 3,354,654 | 740,985 | |||||||||
Net realized gains on sales of available-for-sale securities
|
450,885 | 960,320 | — | |||||||||
Net proceeds from VISA IPO
|
— | — | 132,106 | |||||||||
Investment securities recoveries
|
73,774 | — | 197,487 | |||||||||
Loan servicing fees
|
284,080 | 152,820 | 66,755 | |||||||||
Gain (losses) on sale of assets
|
(199,903 | ) | (134,732 | ) | 247,517 | |||||||
Other
|
664,327 | 995,126 | 844,105 | |||||||||
Total non-interest income
|
$ | 20,818,823 | $ | 29,304,597 | $ | 27,892,397 | ||||||
2010
|
2009
|
2008
|
||||||||||
Non-interest Expense
|
||||||||||||
Salaries and employee benefits
|
$ | 17,932,196 | $ | 21,034,671 | $ | 17,318,103 | ||||||
Net occupancy expense
|
2,100,958 | 2,227,452 | 2,015,946 | |||||||||
FDIC Insurance Expense
|
1,137,615 | 1,131,550 | 59,726 | |||||||||
Equipment expense
|
6,433,537 | 7,463,352 | 6,308,564 | |||||||||
Fixed asset and software impairment expense
|
4,892,231 | — | — | |||||||||
Data processing fees
|
743,538 | 609,876 | 427,251 | |||||||||
Professional fees
|
2,545,552 | 2,891,607 | 1,859,447 | |||||||||
Marketing expense
|
455,967 | 857,727 | 831,727 | |||||||||
Printing and office supplies
|
453,702 | 601,626 | 554,267 | |||||||||
Telephone and communications
|
1,191,497 | 1,622,077 | 1,686,834 | |||||||||
Postage and delivery expense
|
1,748,545 | 2,079,463 | 2,165,098 | |||||||||
Insurance expense
|
71,791 | 91,086 | 94,944 | |||||||||
Employee expense
|
818,375 | 1,151,438 | 1,084,028 | |||||||||
Goodwill impairment
|
4,680,960 | — | — | |||||||||
Other intangibles impairment
|
1,591,844 | — | — | |||||||||
OREO impairment
|
971,517 | — | — | |||||||||
State, local and other taxes
|
543,673 | 724,546 | 985,503 | |||||||||
Other
|
3,994,948 | 2,356,529 | 1,996,834 | |||||||||
Total non-interest expense
|
52,308,446 | 44,843,000 | 37,388,272 | |||||||||
Income (Loss) Before Income Tax
|
(22,115,505 | ) | (277,897 | ) | 7,342,432 | |||||||
Provision (Credit) for Income Taxes
|
(6,502,295 | ) | (660,388 | ) | 2,125,193 | |||||||
Net Income (Loss)
|
$ | (15,613,210 | ) | $ | 382,491 | $ | 5,217,239 | |||||
Basic Earnings (Loss) Per Share
|
$ | (3.21 | ) | $ | 0.07 | $ | 1.06 | |||||
Diluted Earnings (Loss) Per Share
|
$ | (3.21 | ) | $ | 0.07 | $ | 1.06 |
Accumulated
|
||||||||||||||||||||||||
Other
|
||||||||||||||||||||||||
Common
|
Additional
|
Retained
|
Comprehensive
|
Treasury
|
||||||||||||||||||||
Stock
|
Paid-In Capital
|
Earnings
|
Income (Loss)
|
Stock
|
Total
|
|||||||||||||||||||
Balance, January 1, 2008
|
12,568,583 | 14,923,571 | 32,361,106 | 82,235 | (610,260 | ) | 59,325,235 | |||||||||||||||||
Comprehensive Income
|
||||||||||||||||||||||||
Net Income
|
5,217,239 | 5,217,239 | ||||||||||||||||||||||
Change in unrealized gain (loss) on securities available for sale, net of reclassification adjustment and tax effect | (203,892 | ) | (203,892 | ) | ||||||||||||||||||||
Total comprehensive
|
||||||||||||||||||||||||
income
|
5,013,347 | |||||||||||||||||||||||
Dividends on common stock,
|
||||||||||||||||||||||||
$0.34 per share
|
(1,676,723 | ) | (1,676,723 | ) | ||||||||||||||||||||
Expense of stock option plan
|
119,210 | 119,210 | ||||||||||||||||||||||
Cumulative effect adjustment for split dollar BOLI
|
(116,305 | ) | (116,305 | ) | ||||||||||||||||||||
Shares repurchased under stock
|
||||||||||||||||||||||||
repurchase plan
|
(1,002,760 | ) | (1,002,760 | ) | ||||||||||||||||||||
Balance, December 31, 2008
|
12,568,583 | 15,042,781 | 35,785,317 | (121,657 | ) | (1,613,020 | ) | 61,662,004 | ||||||||||||||||
Comprehensive Income
|
||||||||||||||||||||||||
Net Income
|
382,491 | 382,491 | ||||||||||||||||||||||
Change in unrealized gain (loss) on securities available for sale, net of reclassification adjustment and tax effect | 1,428,682 | 1,428,682 | ||||||||||||||||||||||
Total comprehensive
|
||||||||||||||||||||||||
income
|
1,811,173 | |||||||||||||||||||||||
Dividends on common stock,
|
||||||||||||||||||||||||
$0.36 per share
|
(1,752,492 | ) | (1,752,492 | ) | ||||||||||||||||||||
Expense of stock option plan
|
143,261 | 143,261 | ||||||||||||||||||||||
Shares repurchased under stock
|
||||||||||||||||||||||||
repurchase plan
|
(156,291 | ) | (156,291 | ) | ||||||||||||||||||||
Balance, December 31, 2009
|
$ | 12,568,583 | $ | 15,186,042 | $ | 34,415,316 | $ | 1,307,025 | $ | (1,769,311 | ) | $ | 61,707,655 | |||||||||||
Comprehensive Income
|
||||||||||||||||||||||||
Net Income (Loss)
|
(15,613,210 | ) | (15,613,210 | ) | ||||||||||||||||||||
Change in unrealized gain (loss) on securities available for sale, net of reclassification adjustment and tax effect | (119,511 | ) | (119,511 | ) | ||||||||||||||||||||
Total comprehensive
|
||||||||||||||||||||||||
income (loss)
|
(15,732,721 | ) | ||||||||||||||||||||||
Expense of stock option plan
|
49,164 | 49,164 | ||||||||||||||||||||||
Balance, December 31, 2010
|
$ | 12,568,583 | $ | 15,235,206 | $ | 18,802,106 | $ | 1,187,514 | $ | (1,769,311 | ) | $ | 46,024,098 |
2010
|
2009
|
2008
|
||||||||||
Operating Activities
|
||||||||||||
Net Income (Loss)
|
$ | (15,613,210 | ) | $ | 382,491 | $ | 5,217,239 | |||||
Items not requiring (providing) cash
|
||||||||||||
Depreciation and amortization
|
4,007,624 | 4,473,367 | 3,684,358 | |||||||||
Provision for loan losses
|
10,587,603 | 5,738,098 | 689,567 | |||||||||
Expense of share-based compensation plan
|
49,164 | 143,261 | 119,210 | |||||||||
Amortization of premiums and discounts on securities
|
1,546,843 | 608,534 | 133,614 | |||||||||
Amortization of intangible assets
|
800,537 | 858,423 | 710,324 | |||||||||
Deferred income taxes
|
(5,857,134 | ) | (1,008,042 | ) | 1,482,203 | |||||||
FHLB Stock Dividends
|
— | — | (127,200 | ) | ||||||||
Proceeds from sale of loans held for sale
|
240,632,657 | 219,243,608 | 38,708,669 | |||||||||
Originations of loans held for sale
|
(228,029,465 | ) | (228,922,103 | ) | (40,142,425 | ) | ||||||
Gain from sale of loans
|
(4,800,812 | ) | (3,354,654 | ) | (740,985 | ) | ||||||
(Gain) loss on sale of foreclosed assets
|
201,934 | 102,713 | (4,517 | ) | ||||||||
(Gain) loss on sales of fixed assets
|
(2,031 | ) | 32,019 | (243,000 | ) | |||||||
Net realized gains on available-for-sale securities
|
(450,885 | ) | (960,320 | ) | — | |||||||
Software and fixed asset impairment
|
4,892,231 | — | — | |||||||||
OREO impairment
|
971,517 | — | — | |||||||||
Goodwill and Intangible Impairment
|
4,680,960 | — | — | |||||||||
Other intangible impairment
|
1,591,844 | — | — | |||||||||
Changes in
|
||||||||||||
Interest receivable
|
255,903 | 639,795 | 935,431 | |||||||||
Other assets
|
2,615,258 | (5,412,295 | ) | 641,023 | ||||||||
Interest payable and other liabilities
|
(1,224,705 | ) | 251,756 | (1,400,738 | ) | |||||||
Net cash provided by (used in) operating activities
|
16,855,833 | (7,183,349 | ) | 9,662,773 | ||||||||
Investing Activities
|
||||||||||||
Purchases of available-for-sale securities
|
(76,637,203 | ) | (67,881,565 | ) | (46,231,266 | ) | ||||||
Proceeds from maturities of available-for-sale securities
|
37,686,088 | 40,839,927 | 48,098,994 | |||||||||
Proceeds from sales of available-for-sale securities
|
9,995,135 | 27,081,457 | 36,519,016 | |||||||||
Net change in loans
|
11,081,255 | (7,721,644 | ) | (19,140,093 | ) | |||||||
Purchase of premises, equipment and software
|
(2,146,254 | ) | (3,406,256 | ) | (8,045,766 | ) | ||||||
Proceeds from sales of premises, equipment and software
|
(63,188 | ) | 57,567 | 2,327,708 | ||||||||
Proceeds from sale of foreclosed assets
|
1,958,804 | 987,208 | 604,873 | |||||||||
Net cash paid to acquire The National Bank of Montpelier
|
— | — | (14,779,983 | ) | ||||||||
Purchase of FHLB stock
|
— | (204,150 | ) | — | ||||||||
Proceeds for the sale of FHLB stock
|
— | 700,000 | — | |||||||||
Net cash used in investing activities
|
$ | (18,125,363 | ) | $ | (9,547,456 | ) | $ | (646,517 | ) |
2010
|
2009
|
2008
|
||||||||||
Financing Activities
|
||||||||||||
Net increase in demand deposits, money market, interest checking and savings accounts
|
$ | 26,067,145 | $ | 32,730,724 | $ | 18,765,273 | ||||||
Net decrease in certificates of deposit
|
(1,631,555 | ) | (25,709,156 | ) | (27,370,079 | ) | ||||||
Net increase (decrease) in securities sold under agreements to repurchase
|
(1,257,567 | ) | 3,616,842 | 419,540 | ||||||||
Net increase (decrease) in federal funds purchased
|
(5,000,000 | ) | 5,000,000 | — | ||||||||
Proceeds from Federal Home Loan Bank advances
|
— | 7,500,000 | 24,000,000 | |||||||||
Repayment of Federal Home Loan Bank advances
|
(12,459,160 | ) | (8,880,344 | ) | (11,353,145 | ) | ||||||
Proceeds from notes payable
|
1,700,000 | 2,700,000 | 1,000,000 | |||||||||
Net change in short term line of credit
|
— | (1,000,000 | ) | — | ||||||||
Repayment of notes payable
|
(556,305 | ) | (553,224 | ) | (922,457 | ) | ||||||
Purchase of treasury stock
|
— | (156,291 | ) | (1,002,760 | ) | |||||||
Dividends paid
|
— | (1,752,493 | ) | (1,676,723 | ) | |||||||
Net cash provided by financing activities
|
6,862,558 | 13,496,058 | 1,859,649 | |||||||||
Increase (Decrease) in Cash and Cash Equivalents
|
5,593,028 | (3,234,747 | ) | 10,875,905 | ||||||||
Cash and Cash Equivalents, Beginning of Year
|
24,824,785 | 28,059,532 | 17,183,627 | |||||||||
Cash and Cash Equivalents, End of Year
|
$ | 30,417,813 | $ | 24,824,785 | $ | 28,059,532 | ||||||
Supplemental Cash Flows Information
|
||||||||||||
Interest paid
|
$ | 9,137,829 | $ | 12,050,867 | $ | 15,707,642 | ||||||
Income taxes paid (refunded)
|
$ | (1,054,236 | ) | $ | (71,000 | ) | $ | 1,212,000 | ||||
Transfer of loans to foreclosed assets
|
$ | 5,149,182 | $ | 1,547,599 | $ | 2,292,731 | ||||||
Net assets acquired in business combination
|
$ | — | $ | — | $ | 113,441,000 | ||||||
Net liabilities assumed in business combination
|
$ | — | $ | — | $ | 88,211,000 | ||||||
Sale and financing of foreclosed assets
|
$ | 2,249,532 | $ | — | $ | — |
Gross
|
Gross
|
|||||||||||||||
Amortized
|
Unrealized
|
Unrealized
|
Approximate
|
|||||||||||||
Cost
|
Gains
|
Losses
|
Fair Value
|
|||||||||||||
Available-for-Sale Securities:
|
||||||||||||||||
December 31, 2010:
|
||||||||||||||||
U.S. Treasury and
|
||||||||||||||||
Government agencies
|
$ | 43,572,741 | $ | 298,653 | $ | (220,262 | ) | $ | 43,651,132 | |||||||
Mortgage-backed securities
|
53,652,288 | 1,395,036 | (419,232 | ) | 54,628,092 | |||||||||||
State and political subdivisions
|
31,552,709 | 895,794 | (150,724 | ) | 32,297,779 | |||||||||||
Money Market Mutual Fund
|
2,162,055 | — | — | 2,162,055 | ||||||||||||
Equity securities
|
23,000 | — | — | 23,000 | ||||||||||||
$ | 130,962,793 | $ | 2,589,483 | $ | (790,218 | ) | $ | 132,762,058 | ||||||||
December 31, 2009:
|
||||||||||||||||
U.S. Treasury and
|
||||||||||||||||
Government agencies
|
$ | 13,215,086 | $ | 5,359 | $ | (276,796 | ) | $ | 12,943,649 | |||||||
Mortgage-backed securities
|
50,877,903 | 1,792,894 | (424,519 | ) | 52,246,278 | |||||||||||
State and political subdivisions
|
30,653,604 | 984,833 | (101,431 | ) | 31,537,006 | |||||||||||
Money Market Mutual Fund
|
8,333,179 | — | — | 8,333,179 | ||||||||||||
Equity securities
|
23,000 | — | — | 23,000 | ||||||||||||
$ | 103,102,772 | $ | 2,783,086 | $ | (802,746 | ) | $ | 105,083,112 |
Available for Sale
|
||||||||
Amortized
|
Fair
|
|||||||
Cost
|
Value
|
|||||||
Within one year
|
$ | 5,041,419 | $ | 5,068,976 | ||||
Due after one year through five years
|
4,853,241 | 5,004,430 | ||||||
Due after five years through ten years
|
27,112,162 | 27,631,283 | ||||||
Due after ten years
|
38,118,628 | 38,244,222 | ||||||
75,125,450 | 75,948,911 | |||||||
Mortgage-backed securities & equity securities
|
55,837,343 | 56,813,147 | ||||||
Totals
|
$ | 130,962,793 | $ | 132,762,058 |
Less than 12 Months
|
12 Months or Longer
|
Total
|
||||||||||||||||||||||
Fair Value
|
Unrealized Losses
|
Fair Value
|
Unrealized Losses
|
Fair Value
|
Unrealized Losses
|
|||||||||||||||||||
Available-for-Sale Securities:
|
||||||||||||||||||||||||
U.S. Treasury and
|
||||||||||||||||||||||||
Government agencies
|
$ | — | $ | — | $ | 11,483,130 | $ | (220,262 | ) | $ | 11,483,130 | $ | (220,262 | ) | ||||||||||
Mortgage-backed securities
|
1,164,431 | (99,297 | ) | 20,281,713 | (319,935 | ) | 21,446,144 | (419,232 | ) | |||||||||||||||
State and political subdivisions
|
349,460 | (24,611 | ) | 7,120,710 | (126,113 | ) | 7,470,170 | (150,724 | ) | |||||||||||||||
$ | 1,513,891 | $ | (123,908 | ) | $ | 38,885,553 | $ | (666,310 | ) | $ | 40,399,444 | $ | (790,218 | ) |
Less than 12 Months
|
12 Months or Longer
|
Total
|
||||||||||||||||||||||
Fair Value
|
Unrealized Losses
|
Fair Value
|
Unrealized Losses
|
Fair Value
|
Unrealized Losses
|
|||||||||||||||||||
Available-for-Sale Securities:
|
||||||||||||||||||||||||
U.S. Treasury and
|
||||||||||||||||||||||||
Government agencies
|
$ | 12,837,085 | $ | (276,796 | ) | $ | — | $ | — | $ | 12,837,085 | $ | (276,796 | ) | ||||||||||
Mortgage-backed securities
|
1,263,285 | (15,539 | ) | 2,255,050 | (408,980 | ) | 3,518,335 | (424,519 | ) | |||||||||||||||
State and political subdivisions
|
2,792,842 | (56,693 | ) | 991,950 | (44,737 | ) | 3,784,792 | (101,431 | ) | |||||||||||||||
$ | 16,893,212 | $ | (349,028 | ) | $ | 3,247,000 | $ | (453,717 | ) | $ | 20,140,212 | $ | (802,746 | ) |
Categories of loans at December 31 include:
|
||||||||
2010
|
2009
|
|||||||
Commercial
|
$ | 72,488,678 | $ | 84,642,860 | ||||
Commercial real estate
|
177,889,619 | 179,909,135 | ||||||
Agricultural
|
40,762,147 | 41,485,301 | ||||||
Residential real estate
|
84,775,026 | 92,971,599 | ||||||
Consumer
|
51,710,239 | 53,655,238 | ||||||
Leasing
|
194,384 | 221,190 | ||||||
Total loans
|
427,820,093 | 452,885,323 | ||||||
Less
|
||||||||
Net deferred loan fees, premiums and discounts
|
(275,679 | ) | (327,742 | ) | ||||
Loans, net of unearned income
|
427,544,414 | 452,557,581 | ||||||
Allowance for loan losses
|
$ | (6,715,397 | ) | $ | (7,030,178 | ) |
Total Loans >
|
|||||||||||||||||||||||||||||
30-59 Days
|
60-89 Days
|
Greater Than
|
Total Past
|
Total Loans
|
90 Days and
|
||||||||||||||||||||||||
Past Due
|
Past Due
|
90 Days
|
Due
|
Current
|
Receivable
|
Accruing
|
|||||||||||||||||||||||
2010
|
|||||||||||||||||||||||||||||
Commercial
|
$ | 242 | $ | 73 | $ | 2,744 | $ | 3,059 | $ | 69,430 | $ | 72,489 | $ | — | |||||||||||||||
Commercial Real Estate
|
148 | 10 | 5,617 | 5,775 | 172,115 | 177,890 | — | ||||||||||||||||||||||
Agricultural
|
— | 88 | — | 88 | 40,674 | 40,762 | — | ||||||||||||||||||||||
Residential
|
427 | 372 | 1,584 | 2,383 | 82,392 | 84,775 | — | ||||||||||||||||||||||
Consumer
|
255 | 25 | 547 | 827 | 50,883 | 51,710 | — | ||||||||||||||||||||||
Leases
|
— | — | — | — | 194 | 194 | — | ||||||||||||||||||||||
Loans
|
1,072 | 568 | 10,492 | 12,132 | 415,688 | 427,820 | — | ||||||||||||||||||||||
Loans held for Sale
|
— | — | — | — | 9,055 | 9,055 | — | ||||||||||||||||||||||
|
|||||||||||||||||||||||||||||
Total
|
$ | 1,072 | $ | 568 | $ | 10,492 | $ | 12,132 | $ | 424,743 | $ | 436,875 | $ | — |
2010
|
||||
Commercial
|
$ | 3,032 | ||
Commercial Real Estate
|
6,065 | |||
Residential
|
2,565 | |||
Consumer
|
621 | |||
Total
|
$ | 12,283 |
|
1.
|
One (1) Superior - Risk is negligible. Loans are to well-seasoned borrowers, displaying sound financial condition, consistent superior earnings performance, strong capitalization, and access to a range of financing alternatives.
|
|
2.
|
Two (2) Excellent - Risk is minimal. Borrower is well capitalized, operates in a stable industry, financial ratios exceed peers, and financial trends are positive.
|
|
3.
|
Three (3) Good - Risk is modest. Borrower has good overall financial condition and adequate capitalization to withstand temporary setbacks. Financial trends are positive, and there is clear ability to service debt from the primary source.
|
|
4.
|
Four (4) Average - Risk is acceptable. Borrowers in this category may be characterized by acceptable asset quality, but may face a degree of uncertainty due to new business, untried market, high degree of leverage, expansion, management change, or industry conditions.
|
|
5.
|
Four Monitored 4(m) = Monitored Pass Credits - Risk is increasing. Borrowers in this category may be characterized by an increasing amount of risk due to one or more of the following characteristics listed below. Additionally, these borrowers require a higher than normal amount of monitoring by the relationship manager and bank management. Borrowers who are placed in this category may also demonstrate the potential for an upgrade in the next 12 months given improvement in one or more of the factors listed below.
|
|
§
|
Declining trends in the earnings and cash flow of the company is evident by moderate to severe losses although debt service coverage remains within policy limits.
|
|
§
|
Lines of credit that have been evergreen (75% of maximum availability) for more than two consecutive years
|
|
§
|
Absence of relevant or stale financial information.
|
|
§
|
Restructure or modification to the loan agreement for the purpose of additional funds to support ongoing operations of the company.
|
|
§
|
The borrower demonstrates a material weakness or declining trend in collateral support for the given loans.
|
|
6.
|
Five (5) Special Mention - Defined as having potential weaknesses that deserve management's close attention. If uncorrected these potential weaknesses may, at some future date, result in the deterioration of the repayment prospects for the credit or the institution's credit position. Special mention credits are not considered as part of the classified extensions of credit category and do not expose State Bank to sufficient risk to warrant classification. Extensions of credit that might be detailed in this category include those in which:
|
|
§
|
The lending officer may be unable to properly supervise the credit because of an inadequate loan or credit agreement.
|
|
§
|
Questions exist regarding the condition of and/or control over collateral.
|
|
§
|
Economic or market conditions may unfavorably affect the obligor in the future.
|
|
§
|
A declining trend in the obligor's operations or an imbalanced position in the balance sheet exists, but not to the point that repayment is jeopardized.
|
|
§
|
Other deviations from prudent lending practices are present.
|
|
§
|
The special mention category should not be used to identify an extension of credit that has as its sole weakness credit-data or documentation exceptions not material to the repayment of the credit. It should also not be used to list extensions of credit that contain risks usually associated with that particular type of lending.
|
|
§
|
Any extension of credit involves certain risks, regardless of the collateral or the borrower's capacity and willingness to repay the debt.
|
|
7.
|
Six (6) Substandard - A "substandard" extension of credit is inadequately protected by the sound worth and paying capacity of the obligor or of the collateral pledged, if any. Extensions of credit so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that State Bank will sustain some loss if the deficiencies are not corrected. Loss potential, while existing in the aggregate amount of substandard credits, does not have to exist in individual extensions of credit classified substandard.
|
|
8.
|
Seven (7) Doubtful - Has all the weaknesses in one classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. The possibility of loss is extremely high, but because of certain important and reasonably specific pending factors that may work to the advantage of and strengthen the credit, its classification as an estimated loss is deferred until its more exact status may be determined. Pending factors may
include a proposed merger or acquisition, liquidation proceedings, capital injection, perfecting liens on additional collateral, or refinancing plans.
|
|
§
|
An entire credit is not classified as doubtful when collection of a specific portion appears highly probable. An example of proper use of the doubtful category is the case of a company being liquidated, with the trustee-in-bankruptcy indicating a minimum disbursement of forty percent (40%) and a maximum of sixty-five percent (65%) to unsecured creditors including State Bank. In this situation, estimates are based on liquidation-value appraisals with actual values yet to be realized. By definition, the only portion of the credit that is doubtful is the twenty-five percent (25%) difference between forty percent (40%) and sixty-five percent (65%). A proper classification of such a credit would show forty percent (40%) substandard, twenty-five percent (25%) doubtful, and thirty-five percent (35%) loss.
|
|
9.
|
Eight (8) Loss - Considered uncollectible and of such little value that continuance as a Bank asset is not warranted. This classification does not mean that the credit has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off this basically worthless asset, even though partial recovery may be affected in the future. Loans failing to meet the minimum conditions of the Doubtful classifications are charged off.
|
Commercial
|
||||||||||||||||||||||||||
2010
|
Commercial
|
Real Estate
|
Agricultural
|
Residential
|
Consumer
|
Leases
|
||||||||||||||||||||
1-2 | $ | 903 | $ | 735 | $ | 180 | $ | 3,861 | $ | 444 | $ | 127 | ||||||||||||||
3 | 25,101 | 63,789 | 15,883 | 68,979 | 47,650 | — | ||||||||||||||||||||
4 | 40,159 | 97,307 | 24,204 | 5,535 | 2,589 | 67 | ||||||||||||||||||||
5 | 1,021 | 7,141 | 6 | 2,465 | 217 | — | ||||||||||||||||||||
6 | 2,739 | 3,176 | 489 | 2,605 | 450 | — | ||||||||||||||||||||
7 | 2,566 | 5,742 | — | 1,330 | 360 | — | ||||||||||||||||||||
8 | — | — | — | — | — | — | ||||||||||||||||||||
Total
|
$ | 72,489 | $ | 177,890 | $ | 40,762 | $ | 84,775 | $ | 51,710 | $ | 194 |
At December 31,
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
Year-end impaired loans with no allowance for loan losses allocated
|
$ | 3,839,735 | $ | 1,099,912 | $ | 1,706,246 | ||||||
Year-end loans with allowance for loan losses allocated
|
$ | 5,639,348 | $ | 14,912,035 | $ | 865,710 | ||||||
Total impaired loans
|
$ | 9,479,083 | $ | 16,011,947 | $ | 2,571,956 | ||||||
Amount of allowance allocated
|
$ | 1,871,137 | $ | 3,041,967 | $ | 322,190 | ||||||
Average of impaired loans during the year
|
$ | 12,680,704 | $ | 16,111,693 | $ | 2,158,106 | ||||||
Interest income recognized during impairment
|
$ | 63,507 | $ | 564,931 | $ | 11,970 | ||||||
Cash-basis interest income recognized
|
$ | 143,877 | $ | 596,565 | $ | 14,807 |
Unpaid
|
Average
|
Interest
|
||||||||||||||||||
Recorded
|
Principal
|
Related
|
Recorded
|
Income
|
||||||||||||||||
Investment
|
Balance
|
Allowance
|
Investment
|
Recognized
|
||||||||||||||||
With no related allowance recorded:
|
||||||||||||||||||||
Commercial
|
$ | 436 | $ | 786 | $ | — | $ | 2,075 | $ | 4 | ||||||||||
Commercial Real Estate
|
2,744 | 4,040 | — | 4,195 | 52 | |||||||||||||||
Agricultural
|
— | — | — | — | 10 | |||||||||||||||
Residential
|
616 | 741 | — | 1,045 | 2 | |||||||||||||||
Consumer
|
43 | 43 | — | 72 | — | |||||||||||||||
With a specific allowance recorded:
|
||||||||||||||||||||
Commercial
|
2,438 | 3,938 | 684 | 2,147 | (48 | ) | ||||||||||||||
Commercial Real Estate
|
3,202 | 3,202 | 1,187 | 3,147 | 44 | |||||||||||||||
Agricultural
|
— | — | — | — | — | |||||||||||||||
Residential
|
— | — | — | — | — | |||||||||||||||
Consumer
|
— | — | — | — | — | |||||||||||||||
Totals:
|
||||||||||||||||||||
Commercial
|
$ | 2,874 | $ | 4,724 | $ | 684 | $ | 4,222 | $ | (44 | ) | |||||||||
Commercial Real Estate
|
$ | 5,946 | $ | 7,242 | $ | 1,187 | $ | 7,342 | $ | 96 | ||||||||||
Agricultural
|
$ | — | $ | — | $ | — | $ | — | $ | 10 | ||||||||||
Residential
|
$ | 616 | $ | 741 | $ | — | $ | 1,045 | $ | 2 | ||||||||||
Consumer
|
$ | 43 | $ | 43 | $ | — | $ | 72 | $ | — |
2010
|
2009
|
2008
|
||||||||||
Balance, beginning of year
|
$ | 7,030,178 | $ | 5,020,197 | $ | 3,990,455 | ||||||
Balance, National Bank of Montpelier
|
— | — | 1,104,591 | |||||||||
Provision charged to expense
|
10,587,603 | 5,738,098 | 689,567 | |||||||||
Recoveries
|
431,335 | 147,265 | 157,790 | |||||||||
Losses charged off
|
(11,333,719 | ) | (3,875,382 | ) | (922,206 | ) | ||||||
Balance, end of year
|
$ | 6,715,397 | $ | 7,030,178 | $ | 5,020,197 |
Business
|
Commercial
|
Agricultural
|
Residential
|
||||||||||||||||||||||||||||||||||
2010
|
Loans
|
Real Estate
|
Real Estate
|
Agricultural
|
First Mortgage
|
Consumer
|
Other
|
Unallocated
|
Total
|
||||||||||||||||||||||||||||
ALLOWANCE FOR
|
|||||||||||||||||||||||||||||||||||||
LOAN AND LEASE LOSSES
|
|||||||||||||||||||||||||||||||||||||
Beginning balance
|
$ | 2,604 | $ | 3,210 | $ | — | $ | 92 | $ | 715 | $ | 255 | $ | 154 | $ | — | $ | 7,030 | |||||||||||||||||||
Charge Offs
|
(4,739 | ) | (4,748 | ) | — | — | (1,210 | ) | (542 | ) | (95 | ) | — | (11,334 | ) | ||||||||||||||||||||||
Recoveries
|
182 | 171 | 11 | — | 53 | — | 14 | — | 431 | ||||||||||||||||||||||||||||
Provision
|
3,676 | 5,141 | (6 | ) | (81 | ) | 1,085 | 688 | 55 | 30 | 10,588 | ||||||||||||||||||||||||||
Ending Balance
|
$ | 1,723 | $ | 3,774 | $ | 5 | $ | 11 | $ | 643 | $ | 401 | $ | 128 | $ | 30 | $ | 6,715 | |||||||||||||||||||
Ending balance:
|
|||||||||||||||||||||||||||||||||||||
individually
|
|||||||||||||||||||||||||||||||||||||
evaluated for
|
|||||||||||||||||||||||||||||||||||||
impairment
|
$ | 684 | $ | 1,157 | $ | — | $ | — | $ | — | $ | — | $ | 1,841 | |||||||||||||||||||||||
Ending balance:
|
|||||||||||||||||||||||||||||||||||||
collectively
|
|||||||||||||||||||||||||||||||||||||
evaluated for
|
|||||||||||||||||||||||||||||||||||||
impairment
|
$ | 1,039 | $ | 2,617 | $ | 5 | $ | 11 | $ | 643 | $ | 401 | $ | 128 | $ | 30 | $ | 4,874 | |||||||||||||||||||
Loans:
|
|||||||||||||||||||||||||||||||||||||
Ending balance:
|
|||||||||||||||||||||||||||||||||||||
individually
|
|||||||||||||||||||||||||||||||||||||
evaluated for
|
|||||||||||||||||||||||||||||||||||||
impairment
|
$ | 3,121 | $ | 3,774 | $ | — | $ | — | $ | — | $ | — | $ | 6,895 | |||||||||||||||||||||||
Ending balance:
|
|||||||||||||||||||||||||||||||||||||
collectively
|
|||||||||||||||||||||||||||||||||||||
evaluated for
|
|||||||||||||||||||||||||||||||||||||
impairment
|
$ | 69,368 | $ | 174,116 | $ | 24,457 | $ | 16,305 | $ | 84,775 | $ | 51,710 | $ | 194 | $ | — | $ | 420,925 |
2010
|
2009
|
||||||||
Land
|
$ | 1,977,333 | $ | 2,027,383 | |||||
Buildings and improvements
|
15,292,194 | 14,871,520 | |||||||
Equipment
|
7,740,609 | 11,663,865 | |||||||
Construction in progress
|
85,238 | 508,500 | |||||||
25,095,374 | 29,071,268 | ||||||||
Less accumulated depreciation
|
(10,472,833 | ) | (12,077,628 | ) | |||||
Net premises and equipment
|
$ | 14,622,541 | $ | 16,993,640 |
2010
|
2009
|
2008
|
||||||||||
Balance as of January 1
|
$ | 21,414,790 | $ | 21,414,790 | $ | 13,940,618 | ||||||
Goodwill deemed to be impaired during the year - Data Processing
|
(4,680,960 | ) | — | — | ||||||||
Goodwill acquired during the year - Banking
|
— | — | 7,474,172 | |||||||||
Balance as of December 31
|
$ | 16,733,830 | $ | 21,414,790 | $ | 21,414,790 |
2010
|
2009
|
|||||||||||||||
Gross Carrying
|
Accumulated
|
Gross Carrying
|
Accumulated
|
|||||||||||||
Amount
|
Amortization
|
Amount
|
Amortization
|
|||||||||||||
Core deposits intangible
|
$ | 5,450,647 | $ | (3,059,520 | ) | $ | 5,450,647 | $ | (2,427,111 | ) | ||||||
Customer relationship intangible
|
200,627 | (113,622 | ) | 200,627 | (104,761 | ) | ||||||||||
Banking intangibles
|
5,651,274 | (3,173,142 | ) | 5,651,274 | (2,531,872 | ) | ||||||||||
Customer relationship intangible
|
797,156 | (690,156 | ) | 2,389,000 | (530,889 | ) | ||||||||||
Trademark intangible
|
180,000 | (180,000 | ) | 180,000 | (180,000 | ) | ||||||||||
Non-compete intangible
|
83,000 | (83,000 | ) | 83,000 | (83,000 | ) | ||||||||||
Data processing intangibles
|
1,060,156 | (953,156 | ) | 2,652,000 | (793,889 | ) | ||||||||||
Purchased software - banking
|
679,148 | (512,814 | ) | 556,031 | (320,092 | ) | ||||||||||
Purchased software - data
|
||||||||||||||||
processing
|
960,240 | (105,538 | ) | 12,699,410 | (7,646,988 | ) | ||||||||||
Purchased software - other
|
86,200 | (86,200 | ) | 187,214 | (137,256 | ) | ||||||||||
Purchased software
|
1,725,588 | (704,552 | ) | 13,442,655 | (8,104,336 | ) | ||||||||||
Total
|
$ | 8,437,018 | $ | (4,830,850 | ) | $ | 21,745,929 | $ | (11,430,097 | ) |
2011
|
2012
|
2013
|
2014
|
2015
|
||||||||||||||||
Core deposit intangible
|
$ | 621,634 | $ | 617,490 | $ | 566,994 | $ | 365,465 | $ | 194,702 | ||||||||||
Customer relationship intangible
|
8,033 | 7,934 | 7,202 | 6,461 | 5,805 | |||||||||||||||
Banking intangibles
|
629,667 | 625,424 | 574,195 | 371,926 | 200,507 | |||||||||||||||
Customer relationship intangible
|
10,700 | 10,700 | 10,700 | 10,700 | 10,700 | |||||||||||||||
Data Procesing intangibles
|
10,700 | 10,700 | 10,700 | 10,700 | 10,700 | |||||||||||||||
Purchased software - Banking
|
76,444 | 41,339 | 24,161 | 16,093 | — | |||||||||||||||
Purchased software - Data Processing
|
179,972 | 194,491 | 183,647 | 169,331 | 110,900 | |||||||||||||||
Purchased Software
|
256,416 | 235,830 | 207,808 | 185,424 | 110,900 | |||||||||||||||
Total
|
$ | 896,783 | $ | 871,954 | $ | 792,703 | $ | 568,050 | $ | 322,107 |
2010
|
2009
|
2008
|
||||||||||
Carrying amount, beginning of year
|
$ | 1,955,153 | $ | 607,078 | $ | 397,996 | ||||||
Mortgage servicing rights capitalized during the year
|
1,634,058 | 1,638,564 | 327,423 | |||||||||
Servicing rights acquired in acquisition
|
— | — | 50,000 | |||||||||
Mortgage servicing rights amortization during the year
|
(483,822 | ) | (305,489 | ) | (68,341 | ) | ||||||
Net change in valuation allowance
|
85,000 | 15,000 | (100,000 | ) | ||||||||
Carrying amount, end of year
|
$ | 3,190,389 | $ | 1,955,153 | $ | 607,078 | ||||||
Valuation allowance:
|
||||||||||||
Beginning of year
|
$ | 85,000 | $ | 100,000 | $ | — | ||||||
Additions
|
725,000 | 25,000 | 100,000 | |||||||||
Reduction
|
(810,000 | ) | (40,000 | ) | — | |||||||
|
||||||||||||
End of year
|
$ | — | $ | 85,000 | $ | 100,000 | ||||||
Fair Value, beginning of period
|
$ | 1,955,153 | $ | 607,078 | $ | 397,996 | ||||||
Fair Value, end of period
|
$ | 3,263,804 | $ | 1,955,153 | $ | 607,078 |
2011
|
$ | 109,156,087 | ||
2012
|
54,982,311 | |||
2013
|
26,902,496 | |||
2014
|
7,752,486 | |||
2015
|
13,711,870 | |||
Thereafter
|
2,420,262 | |||
$ | 214,925,512 |
2010
|
2009
|
|||||||
Federal funds purchased
|
$ | — | $ | 5,000,000 | ||||
Securities sold under repurchase agreements - retail
|
10,785,254 | 12,042,820 | ||||||
Securities sold under repurchase agreements - broker
|
35,000,000 | 35,000,000 | ||||||
Total short-term borrowings
|
$ | 45,785,254 | $ | 52,042,820 |
2010
|
2009
|
|||||||
Note payable in the amount of $2,700,000, secured by all equipment and receivables of RDSI, monthly payments of $33,648 together with interest at a fixed rate of 6.50%, maturing July 20, 2012.
|
$ | 1,590,471 | $ | 2,146,776 | ||||
Revolving Line of Credit, with First Tennessee Bank, in the amount of $5,000,000, secured by 300,000 shares of State Bank common stock, quarterly payments of interest at the greater of prime plus .5%, or 4.0%
|
$ | 1,700,000 | $ | - | ||||
$ | 3,290,471 | $ | 2,146,776 |
Debt
|
||||
2011
|
2,009,503 | |||
2012
|
1,280,968 | |||
$ | 3,290,471 |
Debt
|
||||
2011
|
$ | 13,668,477 | ||
2012
|
1,278,328 | |||
2013
|
1,860,546 | |||
2014
|
6,000,000 | |||
2015
|
0 | |||
Total
|
$ | 22,807,351 |
For The Year Ended December 31,
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
Taxes currently payable
|
$ | (645,161 | ) | $ | 347,655 | $ | 642,990 | |||||
Deferred provision (benefit)
|
(5,857,134 | ) | (1,008,043 | ) | 1,482,203 | |||||||
Income tax expense
|
$ | (6,502,295 | ) | $ | (660,388 | ) | $ | 2,125,193 |
For The Year Ended December 31,
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
Computed at the statutory rate (34%)
|
$ | (7,519,272 | ) | $ | (94,485 | ) | $ | 2,496,427 | ||||
Decrease resulting from
|
||||||||||||
Tax exempt interest
|
(458,031 | ) | (370,944 | ) | (232,872 | ) | ||||||
Goodwill impairment
|
1,591,526 | — | — | |||||||||
Other
|
(116,518 | ) | (194,959 | ) | (138,362 | ) | ||||||
Actual tax expense
|
$ | (6,502,295 | ) | $ | (660,388 | ) | $ | 2,125,193 |
At December 31,
|
||||||||
2010
|
2009
|
|||||||
Deferred tax assets
|
||||||||
Allowance for loan losses
|
$ | 2,250,143 | $ | 2,332,349 | ||||
OREO Writedowns/Expense
|
270,416 | — | ||||||
Accrued compensation and benefits
|
441,894 | 393,858 | ||||||
Net deferred loan fees
|
93,730 | 111,432 | ||||||
Mark to market adjustments
|
513,782 | 591,970 | ||||||
Purchase accounting adjustments
|
57,621 | 142,535 | ||||||
NOL carry over
|
4,755,310 | 413,828 | ||||||
AMT credit carry over
|
282,639 | 185,295 | ||||||
Other
|
180,430 | 178,958 | ||||||
8,845,965 | 4,350,225 | |||||||
Deferred tax liabilities
|
||||||||
Depreciation
|
(1,424,244 | ) | (2,498,634 | ) | ||||
Mortgage servicing rights
|
(1,084,732 | ) | (664,752 | ) | ||||
Unrealized gains on available-for-sale securities
|
(611,750 | ) | (673,316 | ) | ||||
Purchase accounting adjustments
|
(1,881,443 | ) | (2,529,268 | ) | ||||
Prepaids
|
(175,248 | ) | (234,409 | ) | ||||
FHLB stock dividends
|
(465,562 | ) | (465,562 | ) | ||||
(5,642,979 | ) | (7,065,941 | ) | |||||
Net deferred tax asset/(liability)
|
$ | 3,202,986 | $ | (2,715,716 | ) |
2010
|
2009
|
2008
|
||||||||||
Unrealized gains (losses) on securities
|
||||||||||||
available for sale
|
$ | 269,808 | $ | 3,124,990 | $ | (308,925 | ) | |||||
Reclassification for realized amount included
|
||||||||||||
in income
|
(450,885 | ) | (960,320 | ) | — | |||||||
Other comprehensive income (loss),
|
||||||||||||
before tax effect
|
(181,077 | ) | 2,164,670 | (308,925 | ) | |||||||
Tax expense (benefit)
|
(61,566 | ) | 735,988 | (105,033 | ) | |||||||
Other comprehensive income (loss)
|
$ | (119,511 | ) | $ | 1,428,682 | $ | (203,892 | ) |
Actual
|
For Capital Adequacy Purposes
|
To Be Well-Capitalized Under Prompt Corrective Action Provisions
|
||||||||||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||||||||||||
As of December 31, 2010
|
||||||||||||||||||||||||
Total Capital
|
||||||||||||||||||||||||
(to Risk-Weighted Assets)
|
||||||||||||||||||||||||
Consolidated
|
$ | 48.4 | 11.0 | % | $ | 35.1 | 8.0 | % | $ | — | N/A | |||||||||||||
State Bank
|
50.8 | 11.7 | % | 34.8 | 8.0 | % | 43.5 | 10.0 | % | |||||||||||||||
Tier 1 Capital
|
||||||||||||||||||||||||
(to Risk-Weighted Assets)
|
||||||||||||||||||||||||
Consolidated
|
42.9 | 9.8 | % | 17.5 | 4.0 | % | — | N/A | ||||||||||||||||
State Bank
|
45.4 | 10.4 | % | 17.4 | 4.0 | % | 26.1 | 6.0 | % | |||||||||||||||
Tier 1 Capital
|
||||||||||||||||||||||||
(to Average Assets)
|
||||||||||||||||||||||||
Consolidated
|
42.9 | 6.5 | % | 27.5 | 4.0 | % | — | N/A | ||||||||||||||||
State Bank
|
45.4 | 6.9 | % | 26.3 | 4.0 | % | 32.9 | 5.0 | % | |||||||||||||||
As of December 31, 2009
|
||||||||||||||||||||||||
Total Capital
|
||||||||||||||||||||||||
(to Risk-Weighted Assets)
|
||||||||||||||||||||||||
Consolidated
|
$ | 59.8 | 12.6 | % | $ | 37.8 | 8.0 | % | $ | — | N/A | |||||||||||||
State Bank
|
50.9 | 11.1 | % | 36.7 | 8.0 | % | 45.8 | 10.0 | % | |||||||||||||||
Tier 1 Capital
|
||||||||||||||||||||||||
(to Risk-Weighted Assets)
|
||||||||||||||||||||||||
Consolidated
|
53.9 | 11.4 | % | 18.9 | 4.0 | % | — | N/A | ||||||||||||||||
State Bank
|
45.2 | 9.9 | % | 18.3 | 4.0 | % | 27.5 | 6.0 | % | |||||||||||||||
Tier 1 Capital
|
||||||||||||||||||||||||
(to Average Assets)
|
||||||||||||||||||||||||
Consolidated
|
53.9 | 8.2 | % | 26.1 | 4.0 | % | — | N/A | ||||||||||||||||
State Bank
|
45.2 | 7.1 | % | 25.6 | 4.0 | % | 32.9 | 5.0 | % |
2010
|
2009
|
|||||||
Balance, January 1
|
$ | 2,620,000 | $ | 5,465,000 | ||||
New Loans
|
155,000 | 525,000 | ||||||
Repayments
|
(159,645 | ) | (3,370,000 | ) | ||||
Other changes
|
(2,271,064 | ) | — | |||||
Balance, December 31
|
$ | 344,291 | $ | 2,620,000 |
2010
|
2009
|
|||||||
Expected volatility
|
26.2% - 26.9 | % | 25.8 | % | ||||
Weighted-average volatility
|
26.21 | % | 25.77 | % | ||||
Expected dividends
|
1.0 | % | 5.0 | % | ||||
Expected term (in years)
|
5 | 5 | ||||||
Risk-free rate
|
2.40 | % | 1.60 | % |
2010
|
||||||||||||||||
Shares
|
Weighted-
Average
Exercise Price
|
Weighted-
Average
Remaining Contractual Term
|
Aggregate
Intrinsic Value
|
|||||||||||||
Outstanding,
|
||||||||||||||||
beginning of year
|
311,213 | $ | 12.58 | |||||||||||||
Granted
|
185,750 | 6.97 | ||||||||||||||
Forfeited
|
144,862 | 11.66 | ||||||||||||||
Expired
|
17,373 | 11.07 | ||||||||||||||
Outstanding, end of
|
||||||||||||||||
year
|
334,728 | $ | 9.94 | 6.72 | $ | — | ||||||||||
Exercisable, end of
|
||||||||||||||||
year
|
150,095 | $ | 12.82 | 4.26 | $ | — |
Year Ended December 31, 2010
|
||||||||||||
Income
|
Weighted-Average Shares
|
Per Share
Amount
|
||||||||||
Basic earnings per share
|
||||||||||||
Net income available to common shareholders
|
$ | (15,613,210 | ) | 4,861,779 | $ | (3.21 | ) | |||||
Effect of dilutive securities
|
||||||||||||
Stock options & restricted stock
|
— | — | ||||||||||
Diluted earnings per share
|
||||||||||||
Net income available to common shareholders and assumed conversions
|
$ | (15,613,210 | ) | 4,861,779 | $ | (3.21 | ) |
Year Ended December 31, 2009
|
||||||||||||
Income
|
Weighted-Average Shares
|
Per Share
Amount
|
||||||||||
Basic earnings per share
|
||||||||||||
Net income available to common shareholders
|
$ | 382,491 | 4,867,030 | $ | 0.07 | |||||||
Effect of dilutive securities
|
||||||||||||
Stock options & restricted stock
|
— | 3,373 | ||||||||||
Diluted earnings per share
|
||||||||||||
Net income available to common shareholders and assumed conversions
|
$ | 382,491 | 4,870,403 | $ | 0.07 | |||||||
Year Ended December 31, 2008
|
||||||||||||
Income
|
Weighted-Average Shares
|
Per Share
Amount
|
||||||||||
Basic earnings per share
|
||||||||||||
Net income available to common shareholders
|
$ | 5,217,239 | 4,925,694 | $ | 1.06 | |||||||
Effect of dilutive securities
|
||||||||||||
Stock options & restricted stock
|
— | — | ||||||||||
Diluted earnings per share
|
||||||||||||
Net income available to common shareholders and assumed conversions
|
$ | 5,217,239 | 4,925,694 | $ | 1.06 | |||||||
2011
|
$ | 359,944 | ||
2012
|
290,511 | |||
2013
|
275,902 | |||
2014
|
200,000 | |||
2015
|
65,000 | |||
Thereafter
|
355,412 | |||
Total minimum lease payments
|
$ | 1,546,769 |
Fair Value Measurements Using:
|
||||||||||||||||
Description
|
Fair Values at 12/31/2010
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
||||||||||||
Available-for-Sale Securities:
|
||||||||||||||||
U.S. Treasury and Government Agencies
|
$ | 43,651,132 | — | $ | 43,651,132 | — | ||||||||||
Mortgage-backed securities
|
54,628,091 | — | 54,628,091 | — | ||||||||||||
State and political subdivisions
|
32,297,779 | — | 32,297,779 | — | ||||||||||||
Money Market Mutual Fund
|
2,162,055 | 2,162,055 | — | — | ||||||||||||
Equity securities
|
23,000 | — | 23,000 | — |
Level 1 - Quoted Prices in Active Markets for Identical Assets
|
|
Level 2 - Significant Other Observable Inputs
|
|
Level 3 - Significant Unobservable Inputs
|
Fair Value Measurements Using:
|
||||||||||||||||
Description
|
Fair Values at 12/31/2010
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
||||||||||||
Impaired loans
|
$ | 6,709,231 | — | — | $ | 6,709,231 | ||||||||||
Mortgage Servicing Rights
|
$ | 3,190,389 | — | — | $ | 3,190,389 | ||||||||||
Foreclosed Assets
|
$ | 1,054,500 | — | — | $ | 1,054,500 | ||||||||||
Goodwill (RDSI)
|
$ | 380,748 | — | — | $ | 380,748 | ||||||||||
Intangible (RDSI)
|
$ | 107,000 | $ | 107,000 | ||||||||||||
Level 1 - Quoted Prices in Active Markets for Identical Assets
|
Level 2 - Significant Other Observable Inputs
|
Level 3 - Significant Unobservable Inputs
|
December 31, 2010
|
December 31, 2009
|
|||||||||||||||
Carrying
|
Fair
|
Carrying
|
Fair
|
|||||||||||||
Amount
|
Value
|
Amount
|
Value
|
|||||||||||||
Financial assets
|
||||||||||||||||
Cash and cash equivalents
|
$ | 30,417,813 | $ | 30,418,000 | $ | 24,824,785 | $ | 24,825,000 | ||||||||
Available-for-sale securities
|
$ | 132,762,058 | $ | 132,762,000 | $ | 105,083,112 | $ | 105,083,000 | ||||||||
Loans held for sale
|
$ | 9,055,268 | $ | 9,055,268 | $ | 16,857,648 | $ | 17,070,000 | ||||||||
Loans, net of allowance for loan losses
|
$ | 420,829,017 | $ | 424,144,000 | $ | 445,527,403 | $ | 446,266,000 | ||||||||
Federal Reserve and FHLB Bank stock
|
$ | 3,748,250 | $ | 3,748,000 | $ | 3,748,250 | $ | 3,748,000 | ||||||||
Interest receivable
|
$ | 2,068,965 | $ | 2,069,000 | $ | 2,324,868 | $ | 2,325,000 | ||||||||
Financial liabilities
|
||||||||||||||||
Deposits
|
$ | 515,677,742 | $ | 519,123,000 | $ | 491,242,152 | $ | 494,536,000 | ||||||||
Short-term borrowings
|
$ | 45,785,254 | $ | 47,515,000 | $ | 52,042,820 | $ | 53,670,000 | ||||||||
Notes payable
|
$ | 3,290,471 | $ | 3,276,000 | $ | 2,146,776 | $ | 2,128,000 | ||||||||
Federal Home Loan Bank advances
|
$ | 22,807,351 | $ | 23,243,000 | $ | 35,266,510 | $ | 36,476,000 | ||||||||
Trust preferred securities
|
$ | 20,620,000 | $ | 20,862,000 | $ | 20,620,000 | $ | 20,571,000 | ||||||||
Interest payable
|
$ | 1,971,587 | $ | 1,972,000 | $ | 1,507,521 | $ | 1,508,000 |
2010
|
2009
|
|||||||
Loan commitments and unused lines of credit
|
72,938,000 | 82,832,000 | ||||||
Standby letters of credit
|
— | — | ||||||
Commercial letters of credit
|
804,000 | 279,000 | ||||||
$ | 73,742,000 | $ | 83,111,000 |
2010
|
2009
|
|||||||
Assets
|
||||||||
Cash and cash equivalents
|
$ | 38,509 | $ | 378,064 | ||||
Investment in common stock of banking subsidiaries
|
66,124,973 | 66,920,562 | ||||||
Investment in nonbanking subsidiaries
|
(216,162 | ) | 13,985,876 | |||||
Notes Receivable
|
2,000,000 | — | ||||||
Other assets
|
2,675,248 | 2,916,216 | ||||||
Total assets
|
$ | 70,622,568 | $ | 84,200,718 | ||||
Liabilities
|
||||||||
Trust preferred securities
|
$ | 20,000,000 | $ | 20,000,000 | ||||
Borrowings from nonbanking subsidiaries
|
620,000 | 620,000 | ||||||
Notes Payable
|
1,700,000 | — | ||||||
Other liabilities
|
2,278,469 | 1,873,063 | ||||||
Total liabilities
|
24,598,469 | 22,493,063 | ||||||
Stockholders' Equity
|
46,024,099 | 61,707,655 | ||||||
Total liabilities and stockholders' equity
|
$ | 70,622,568 | $ | 84,200,718 |
2010
|
2009
|
2008
|
||||||||||
Income
|
||||||||||||
Interest income
|
$ | 102,167 | $ | 752 | $ | 1,677 | ||||||
Dividends from subsidiaries:
|
||||||||||||
Banking subsidiaries
|
800,000 | 2,400,000 | 22,100,000 | |||||||||
Nonbanking subsidiaries
|
225,000 | 1,922,076 | 3,850,620 | |||||||||
Total
|
1,025,000 | 4,322,076 | 25,950,620 | |||||||||
Other income
|
536,586 | 1,550,032 | 1,603,529 | |||||||||
|
||||||||||||
Total income
|
1,663,753 | 5,872,860 | 27,555,826 | |||||||||
Expenses
|
||||||||||||
Interest expense
|
1,529,815 | 1,573,293 | 1,691,792 | |||||||||
Other expense
|
1,834,675 | 3,864,674 | 3,171,949 | |||||||||
Total expenses
|
3,364,490 | 5,437,967 | 4,863,741 | |||||||||
Income (loss) before income tax and equity
|
||||||||||||
in undistributed (excess distributed) income (loss) of subsidiaries
|
(1,700,737 | ) | 434,893 | 22,692,085 | ||||||||
Income tax benefit
|
(942,754 | ) | (1,321,333 | ) | (1,111,193 | ) | ||||||
Income (loss) before equity in undistributed (excess
|
||||||||||||
distributed) income (loss) of subsidiaries
|
(757,983 | ) | 1,756,226 | 23,803,278 | ||||||||
Equity in undistributed (excess distributed)
|
||||||||||||
income (loss) of subsidiaries
|
||||||||||||
Banking subsidiaries
|
(676,077 | ) | (355,146 | ) | (17,586,214 | ) | ||||||
Nonbanking subsidiaries
|
(14,179,150 | ) | (1,018,589 | ) | (999,825 | ) | ||||||
Total
|
(14,855,227 | ) | (1,373,735 | ) | (18,586,039 | ) | ||||||
Net income (loss)
|
$ | (15,613,210 | ) | $ | 382,491 | $ | 5,217,239 |
2010
|
2009
|
2008
|
||||||||||
Operating Activities
|
||||||||||||
Net income (loss)
|
$ | (15,613,210 | ) | $ | 382,491 | $ | 5,217,239 | |||||
Items not requiring (providing) cash
|
||||||||||||
Equity in (undistributed) excess
|
||||||||||||
distributed net income (loss) of
|
||||||||||||
subsidiaries
|
14,855,227 | 1,373,735 | 18,586,039 | |||||||||
Expense of Stock Option Plan
|
49,164 | 143,261 | 119,210 | |||||||||
Other assets
|
263,858 | (1,002,630 | ) | 7,874 | ||||||||
Other liabilities
|
405,406 | (929,910 | ) | (20,320 | ) | |||||||
Net cash provided by (used in)
|
||||||||||||
operating activities
|
(39,555 | ) | (33,053 | ) | 23,910,042 | |||||||
Investing Activities
|
||||||||||||
Cash paid to shareholders of National Bank of Montpelier acquisition
|
— | — | (24,000,000 | ) | ||||||||
Increase in Notes Receivable
|
(2,000,000 | ) | — | — | ||||||||
Net cash used in
|
||||||||||||
investing activities
|
(2,000,000 | ) | — | (24,000,000 | ) | |||||||
Financing Activities
|
||||||||||||
Cash dividends paid
|
— | (1,752,493 | ) | (1,676,723 | ) | |||||||
Proceeds from Notes Payable
|
1,700,000 | — | — | |||||||||
Purchase of treasury stock
|
— | (156,291 | ) | (1,002,760 | ) | |||||||
Net cash provided by (used in)
|
||||||||||||
financing activities
|
1,700,000 | (1,908,784 | ) | (2,679,483 | ) | |||||||
Net Change in Cash and Cash Equivalents
|
(339,555 | ) | (1,941,837 | ) | (2,769,441 | ) | ||||||
Cash and Cash Equivalents at Beginning
|
||||||||||||
of Year
|
378,064 | 2,319,901 | 5,089,342 | |||||||||
Cash and Cash Equivalents at End of
|
||||||||||||
Year
|
$ | 38,509 | $ | 378,064 | $ | 2,319,901 | ||||||
Data
|
Total
|
Intersegment
|
Consolidated
|
|||||||||||||||||||||
2010
|
Banking
|
Processing
|
Other
|
Segments
|
Elimination
|
Totals
|
||||||||||||||||||
Income Statement information:
|
||||||||||||||||||||||||
Net interest income (expense)
|
$ | 21,843,737 | $ | (454,369 | ) | $ | (1,427,647 | ) | $ | 19,961,721 | $ | — | $ | 19,961,721 | ||||||||||
Other revenue - external customers
|
10,958,388 | 9,725,869 | 134,566 | 20,818,823 | — | 20,818,823 | ||||||||||||||||||
Other revenue - other segments
|
99,356 | 1,297,789 | 428,773 | 1,825,918 | (1,825,918 | ) | — | |||||||||||||||||
Net interest income and other revenue
|
32,901,481 | 10,569,289 | (864,308 | ) | 42,606,462 | (1,825,918 | ) | 40,780,544 | ||||||||||||||||
Non-interest expense
|
25,958,617 | 26,341,072 | 1,834,675 | 54,134,364 | (1,825,918 | ) | 52,308,446 | |||||||||||||||||
Significant noncash items:
|
||||||||||||||||||||||||
Depreciation and amortization
|
974,967 | 2,985,813 | 46,844 | 4,007,624 | — | 4,007,624 | ||||||||||||||||||
Fixed asset and software impairment
|
— | 4,892,231 | — | 4,892,231 | — | 4,892,231 | ||||||||||||||||||
Goodwill impairment
|
— | 4,680,960 | — | 4,680,960 | — | 4,680,960 | ||||||||||||||||||
Other intangible impairment
|
— | 1,591,844 | — | 1,591,844 | — | 1,591,844 | ||||||||||||||||||
Provision for loan losses
|
7,587,603 | 3,000,000 | — | 10,587,603 | — | 10,587,603 | ||||||||||||||||||
Income tax expense (benefit)
|
(768,661 | ) | (4,790,880 | ) | (942,754 | ) | (6,502,295 | ) | — | (6,502,295 | ) | |||||||||||||
Segment profit (loss)
|
$ | 123,922 | $ | (13,980,903 | ) | $ | (1,756,229 | ) | $ | (15,613,210 | ) | $ | — | $ | (15,613,210 | ) | ||||||||
Balance sheet information:
|
||||||||||||||||||||||||
Total assets
|
$ | 653,940,003 | $ | 6,852,940 | $ | 70,622,568 | $ | 731,415,511 | $ | (71,127,826 | ) | $ | 660,287,685 | |||||||||||
Goodwill and intangibles
|
18,831,214 | 487,748 | — | 19,318,962 | — | 19,318,962 | ||||||||||||||||||
Premises and equipment expenditures
|
$ | 1,018,127 | $ | 1,128,127 | $ | — | $ | 2,146,254 | $ | — | $ | 2,146,254 |
Data
|
Total
|
Intersegment
|
Consolidated
|
|||||||||||||||||||||
2009
|
Banking
|
Processing
|
Other
|
Segments
|
Elimination
|
Totals
|
||||||||||||||||||
Income Statement information:
|
||||||||||||||||||||||||
Net interest income (expense)
|
$ | 22,753,280 | $ | (182,136 | ) | $ | (1,572,540 | ) | $ | 20,998,604 | $ | — | $ | 20,998,604 | ||||||||||
Other revenue - external customers
|
10,386,902 | 18,836,667 | 81,028 | 29,304,597 | — | 29,304,597 | ||||||||||||||||||
Other revenue - other segments
|
92,493 | 1,599,589 | 1,497,767 | 3,189,849 | (3,189,849 | ) | — | |||||||||||||||||
Net interest income and other revenue
|
33,232,675 | 20,254,120 | 6,255 | 53,493,050 | (3,189,849 | ) | 50,303,201 | |||||||||||||||||
Non-interest expense
|
25,239,393 | 18,928,782 | 3,864,674 | 48,032,849 | (3,189,849 | ) | 44,843,000 | |||||||||||||||||
Significant noncash items:
|
||||||||||||||||||||||||
Depreciation and amortization
|
1,039,284 | 3,334,636 | 99,447 | 4,473,367 | — | 4,473,367 | ||||||||||||||||||
Provision for loan losses
|
5,738,098 | — | — | 5,738,098 | — | 5,738,098 | ||||||||||||||||||
Income tax expense (benefit)
|
210,330 | 450,615 | (1,321,333 | ) | (660,388 | ) | — | (660,388 | ) | |||||||||||||||
Segment profit (loss)
|
$ | 2,044,854 | $ | 874,723 | $ | (2,537,086 | ) | $ | 382,491 | $ | — | $ | 382,491 | |||||||||||
Balance sheet information:
|
||||||||||||||||||||||||
Total assets
|
$ | 652,166,943 | $ | 22,774,098 | $ | 83,110,060 | $ | 758,051,101 | $ | (85,001,999 | ) | $ | 673,049,102 | |||||||||||
Goodwill and intangibles
|
19,472,484 | 6,919,819 | — | 26,392,303 | — | 26,392,303 | ||||||||||||||||||
Premises and equipment expenditures
|
$ | 548,824 | $ | 2,805,922 | $ | 51,510 | $ | 3,406,256 | $ | — | $ | 3,406,256 | ||||||||||||
Data
|
Total
|
Intersegment
|
Consolidated
|
|||||||||||||||||||||
2008
|
Banking
|
Processing
|
Other
|
Segments
|
Elimination
|
Totals
|
||||||||||||||||||
Income Statement information:
|
||||||||||||||||||||||||
Net interest income (expense)
|
$ | 19,327,854 | $ | (109,864 | ) | $ | (1,690,115 | ) | $ | 17,527,875 | $ | — | $ | 17,527,875 | ||||||||||
Other revenue - external customers
|
7,525,957 | 20,162,913 | 203,525 | 27,892,395 | — | 27,892,395 | ||||||||||||||||||
Other revenue - other segments
|
54,019 | 1,513,093 | 1,432,097 | 2,999,209 | (2,999,209 | ) | — | |||||||||||||||||
Net interest income and other revenue
|
26,907,830 | 21,566,142 | (54,493 | ) | 48,419,479 | (2,999,209 | ) | 45,420,270 | ||||||||||||||||
Non-interest expense
|
19,920,105 | 17,295,426 | 3,171,950 | 40,387,481 | (2,999,209 | ) | 37,388,272 | |||||||||||||||||
Significant noncash items:
|
||||||||||||||||||||||||
Depreciation and amortization
|
1,012,382 | 2,535,876 | 136,100 | 3,684,358 | — | 3,684,358 | ||||||||||||||||||
Provision for loan losses
|
689,567 | — | — | 689,567 | — | 689,567 | ||||||||||||||||||
Income tax expense (benefit)
|
1,784,371 | 1,452,014 | (1,111,193 | ) | 2,125,192 | — | 2,125,192 | |||||||||||||||||
Segment profit (loss)
|
$ | 4,513,787 | $ | 2,818,702 | $ | (2,115,250 | ) | $ | 5,217,239 | $ | — | $ | 5,217,239 | |||||||||||
Balance sheet information:
|
||||||||||||||||||||||||
Total assets
|
$ | 637,108,955 | $ | 19,955,458 | $ | 85,084,977 | $ | 742,149,390 | $ | (84,530,481 | ) | $ | 657,618,909 | |||||||||||
Goodwill and intangibles
|
20,113,196 | 7,137,530 | — | 27,250,726 | — | 27,250,726 | ||||||||||||||||||
Premises and equipment expenditures
|
$ | 2,437,582 | $ | 5,501,574 | $ | 106,610 | $ | 8,045,766 | $ | — | $ | 8,045,766 |
December 31, 2010
|
March
|
June
|
September
|
December
|
||||||||||||
Interest income
|
$ | 7,483,263 | $ | 7,499,239 | $ | 7,244,962 | $ | 7,336,152 | ||||||||
Interest expense
|
2,578,782 | 2,441,218 | 2,364,319 | 2,217,576 | ||||||||||||
Net interest income
|
4,904,481 | 5,058,021 | 4,880,643 | 5,118,576 | ||||||||||||
Provision for loan losses
|
1,391,433 | 6,498,710 | 898,570 | 1,798,890 | ||||||||||||
Non-interest income
|
6,751,363 | 4,526,269 | 4,534,561 | 5,006,630 | ||||||||||||
Non-interest expense
|
11,760,035 | 15,905,043 | 8,738,415 | 15,904,953 | ||||||||||||
Income tax expense (benefit)
|
(647,686 | ) | (4,612,572 | ) | (247,696 | ) | (994,341 | ) | ||||||||
Net income (loss)
|
(847,938 | ) | (8,206,891 | ) | 25,915 | (6,584,296 | ) | |||||||||
Earnings (loss) per share
|
||||||||||||||||
Basis
|
(0.17 | ) | (1.69 | ) | 0.01 | (1.36 | ) | |||||||||
Diluted
|
(0.17 | ) | (1.69 | ) | 0.01 | (1.36 | ) | |||||||||
Dividends per share
|
— | — | — | — | ||||||||||||
December 31, 2009
|
March
|
June
|
September
|
December
|
||||||||||||
Interest income
|
$ | 8,147,603 | $ | 8,289,666 | $ | 8,186,375 | $ | 7,967,506 | ||||||||
Interest expense
|
3,131,740 | 2,928,277 | 2,849,660 | 2,682,869 | ||||||||||||
Net interest income
|
5,015,863 | 5,361,389 | 5,336,715 | 5,284,637 | ||||||||||||
Provision for loan losses
|
495,142 | 798,850 | 898,050 | 3,546,056 | ||||||||||||
Non-interest income
|
7,447,505 | 7,897,791 | 7,075,711 | 7,174,079 | ||||||||||||
Non-interest expense
|
10,475,024 | 11,108,057 | 11,454,115 | 12,096,293 | ||||||||||||
Income tax expense (benefit)
|
389,649 | 348,687 | (99,421 | ) | (1,299,303 | ) | ||||||||||
Net income (loss)
|
1,103,553 | 1,003,586 | 159,682 | (1,884,330 | ) | |||||||||||
Earnings (loss) per share
|
||||||||||||||||
Basis
|
0.23 | 0.20 | 0.03 | (0.39 | ) | |||||||||||
Diluted
|
0.23 | 0.20 | 0.03 | (0.39 | ) | |||||||||||
Dividends per share
|
0.09 | 0.09 | 0.09 | 0.09 |
Exhibit No.
|
Description
|
Location
|
4.1
|
Indenture, dated as of September 15, 2005, by and between Rurban Financial Corp. and Wilmington Trust Company, as Debenture Trustee, relating to Floating Rate Junior Subordinated Deferrable Interest Debentures
|
Incorporated herein by reference to Exhibit 4.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2005 (File No. 0-13507).
|
4.2
|
Amended and Restated Declaration of Trust of Rurban Statutory Trust II, dated as of September 15, 2005
|
Incorporated herein by reference to Exhibit 4.2 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2005 (File No. 0-13507).
|
4.3
|
Guarantee Agreement, dated as of September 15, 2005, by and between Rurban Financial Corp. and Wilmington Trust Company, as Guarantee Trustee
|
Incorporated herein by reference to Exhibit 4.3 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2005 (File No. 0-13507).
|
4.4
|
Agreement to furnish instruments and agreements defining rights of holders of long-term debt
|
Filed herewith.
|
10.1*
|
Rurban Financial Corp. Plan to Allow Directors to Elect to Defer Compensation
|
Incorporated herein by reference to Exhibit 10(v) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1996 (File No. 0-13507).
|
10.2*
|
Rurban Financial Corp. 1997 Stock Option Plan
|
Incorporated herein by reference to Exhibit 10(v) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1996 (File No. 0-13507).
|
10.3*
|
Form of Non-Qualified Stock Option Agreement with Five-Year Vesting under Rurban Financial Corp. 1997 Stock Option Plan
|
Incorporated herein by reference to Exhibit 10(w) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1997 (File No. 0-13507).
|
10.4*
|
Form of Non-Qualified Stock Option Agreement with Vesting After One Year of Employment under Rurban Financial Corp. 1997 Stock Option Plan
|
Incorporated herein by reference to Exhibit 10(a) to the Company’s Current Report on Form 8-K filed March 21, 2005 (File No. 0-13507).
|
RURBANC DATA SERVICES, INC.
|
|||
|
By:
|
||
Kenneth A. Joyce | |||
Chief Executive Officer
|
|||
NC MERGER CORP.
|
|||
|
By:
|
||
Kenneth A. Joyce
|
|||
President
|
|||
NEW CORE HOLDINGS, INC.
|
|||
|
By:
|
||
John J. Aranowicz
|
|||
President and CEO
|
|||
|
Re:
|
Rurban Financial Corp. – Annual Report on Form 10-K for the fiscal year ended December 31, 2010
|
|
(b)
|
Number of Shares of Stock Subject to Your Option
: ___________ shares of Stock.
|
|
(c)
|
Exercise Price
: $______________ per share of Stock.
|
|
(a)
|
In General:
In general, you may exercise all or any part of the vested portion of your Option at any time prior to the tenth anniversary of the Grant Date (the “Expiration Date”), except to the extent the Committee determines otherwise upon the occurrence of an Applicable Event or as otherwise provided below.
|
|
(b)
|
Effect of Termination:
If your employment terminates prior to the Expiration Date, your Option will remain exercisable for the period specified below:
|
|
(i)
|
Retirement
. If you Retire, the vested portion of your Option may be exercised at any time before the earlier of the Expiration Date or one year following your Retirement; provided, however, that if you do not exercise your Option within three months after the date of your Retirement, it will be treated as a Nonqualified Stock Option.
|
|
(ii)
|
Death or Disability
. If your employment terminates due to your death or Disability, the vested portion of your Option may be exercised at any time before the earlier of the Expiration Date or the first anniversary of your termination date.
|
|
(iii)
|
For Any Reason Other Than Retirement, Death or Disability
. If your employment is terminated for any reason other than your Retirement, death or Disability: (i) the unvested portion of your Option will be forfeited on your termination date; and (ii)
the vested portion of your Option may be exercised at any time before the earlier of the Expiration Date or 30 days after your termination date.
|
|
(c)
|
Applicable Event:
If there is an Applicable Event, Section 11.5 of the Plan will apply to the outstanding and unexercised portion of your Option.
|
|
(a)
|
Exercise.
Your Option may be exercised with respect to whole shares of Stock only.
|
|
(b)
|
Procedure.
To exercise all or any part of the vested portion of your Option, you must (i) complete and return a copy of the Incentive Stock Option Exercise Form (attached to this Award Agreement as
Exhibit A)
; and (ii) pay the applicable exercise price for each share of Stock being purchased as described in Section 4(c).
|
|
(c)
|
Payment of Exercise Price
. You may pay the exercise price for each share of Stock being purchased upon the exercise of the Option: (i) in cash equal to the aggregate exercise price of the number of shares of Stock being purchased; (ii) in the form of a personal check or money order made payable to “Rurban Financial Corp.” in the amount of the aggregate exercise price of the shares of Stock being purchased; (iii) by tendering whole shares of Stock owned by you for at least six months before the Option is exercised (or such other period established by generally accepted accounting principles) with a Fair Market Value equal to the aggregate exercise price of the shares of Stock being purchased; or (iv) any combination of the foregoing.
|
|
(d)
|
Issuance of Shares of Stock.
As soon as administratively practicable after the Company determines that the Option has been validly exercised as to any of the shares of Stock, the Company will issue or transfer the relevant number of shares of Stock to you. Any fractional shares of Stock resulting from the exercise of your Option will be settled in cash.
|
|
(a)
|
Rights Before Your Option Is Exercised:
You may not vote or receive any dividends associated with the Stock underlying the unexercised portion of your Option.
|
|
(b)
|
Beneficiary Designation:
You may name a beneficiary or beneficiaries to receive any shares of Stock or exercise any vested portion of your Option that is unpaid or unexercised at your death by completing and filing with the Committee a Beneficiary Designation Form. If you have not completed a Beneficiary Designation Form or if you wish to change your beneficiary, you may complete the Beneficiary Designation Form (attached to this Award Agreement as
Exhibit B)
. You do not need to designate a beneficiary now, and no designation is required to be completed as a condition of exercising your Option. However, if you die without completing a Beneficiary Designation Form or if you do not complete the form correctly, your beneficiary will be the executor or administrator of your estate, or if no such executor or administrator has been appointed to the knowledge of the Company, your beneficiary shall be your spouse or any one or more of your dependents as the Company may designate.
|
|
(c)
|
Tax Withholding:
The Company will have the right and is hereby authorized to deduct or withhold an amount sufficient to satisfy federal, state and local taxes required by law to be withheld with respect to your Option. At the sole discretion of the Committee, you may be permitted to satisfy the foregoing withholding liability by: (i) paying to the Company the withholding amount in cash, through the delivery or attestation of whole shares of Stock you have owned for at least the previous six months (or such other period acceptable under generally accepted accounting principles) with a Fair Market Value equal to the statutory minimum withholding liability; or (ii) by having the Company withhold shares of Stock that would otherwise be issued to you when your Option is settled with a Fair Market Value equal to the statutory minimum withholding liability.
|
|
(d)
|
Transferring Your Option:
In general, your Option may not be sold, transferred, pledged, assigned or otherwise alienated or hypothecated, except by will or the laws of descent and distribution. However, as described in Section 5(b), you may complete a Beneficiary Designation Form to name the person who may exercise your Option if you die before the Option expires.
|
|
(e)
|
Adjustments to Your Options:
If there is a Stock dividend, Stock split, recapitalization (including payment of an extraordinary dividend), merger, consolidation, combination, spin-off, distribution of assets to shareholders, exchange of shares or other similar corporate change affecting the Stock, the Committee will appropriately adjust the number of shares of Stock underlying your Option and any other factors, limits or terms affecting your Option. Notwithstanding the foregoing, any adjustment will comply with Section 409A of the Code to the extent applicable.
|
|
(f)
|
Restrictions on Transfer of Stock:
Shares of Stock tendered upon exercise of your Option under this Award Agreement may be subject to any stock transfer orders and other restrictions that the Committee believes to be advisable under the rules, regulations and other requirements of the Securities and Exchange Commission, any exchange, market or other quotation system on or through which the Company’s securities are then traded, or any applicable federal or state securities laws. The Committee may cause a
legend or legends to be placed on any certificates issued under this Award Agreement to make appropriate reference to any restrictions.
|
|
(g)
|
Tenure:
Nothing in the Plan or this Award Agreement shall confer upon you the right to continue as an Employee or Director, as applicable, of the Company or any Subsidiary.
|
|
(h)
|
Governing Law:
This Award Agreement will be construed in accordance with and governed by the laws (other than laws governing conflicts of laws) of the State of Ohio.
|
|
(i)
|
Amendment of Award Agreement:
This Award Agreement may be amended by a written agreement signed by both parties to this Award Agreement; provided, however, that the Company may amend this Award Agreement to the extent necessary to comply with applicable law without your consent or any additional consideration, even if those amendments eliminate, restrict or reduce your rights under this Award Agreement.
|
|
(j)
|
Other Terms and Conditions:
Your Option is subject to the terms and conditions described in this Award Agreement and the Plan, which is incorporated by reference into and made a part of this Award Agreement. You should read the Plan carefully to ensure you fully understand all the terms and conditions of your Option. In the event of a conflict between the terms of the Plan and the terms of this Award Agreement, the terms of the Plan will govern. The Committee has the sole responsibility of interpreting the Plan and this Award Agreement, and its determination of the meaning of any provision in the Plan or this Award Agreement shall be binding on you.
|
|
(k)
|
Signature in Counterparts:
This Award Agreement may be signed in counterparts, each of which will be deemed an original, but all of which will constitute one and the same instrument.
|
|
·
|
A copy of the Plan has been made available to you; and
|
|
·
|
You understand and accept the terms and conditions placed on your Option.
|
PARTICIPANT | RURBAN FINANCIAL CORP. | |
Print Name: | Print Name: | |
Title: | ||
Date: | Date: |
1.
|
Affected Option Shares:
This Exercise Notice relates to the following Option and shares of Stock (
fill in the blanks
):
|
|
____
|
Personal check, bank draft or money order payable to “Rurban Financial Corp.”
|
|
____
|
Through the tender of whole shares of Stock that the Optionee has held for at least six months
(
or such other period established by generally accepted accounting principles) and which have a Fair Market Value equal to the total exercise price.
|
|
____
|
A combination of these two methods (the aggregate amount of cash and value of shares delivered or attested must be equal to the total exercise price).
|
|
Notes:
If:
(
a) the cash, bank or money order method of exercise is selected, full payment must be included with this Exercise Notice; and (b) you elect the tender form of paying the exercise price, you may contact the Company at the address given below for further information as to how the choice of payment will affect the number of shares of Stock you will receive.
|
3.
|
Payment of Taxes:
Subject to Section 5(c) of the Award Agreement under which the Option was issued, the withholding taxes associated with this exercise of the Option will be paid (
check one
):
|
|
____
|
From my payroll checking account.
|
|
____
|
By having the Company withhold shares of Stock that would otherwise be issued with respect to this exercise.
|
|
(a)
|
I fully understand the effect (including the investment effect) of exercising the Option and buying the shares of stock and understand that there is no guarantee that the value of these shares of Stock will appreciate or will not depreciate;
|
|
(b)
|
This Exercise Notice will have no effect if it is not returned to the Company at the address given below before the Expiration Date or such other date as may be specified in the Award Agreement or, to the extent applicable, if full payment of the exercise price is not included; and
|
|
(c)
|
The shares of Stock I am buying by completing and returning this Exercise Notice will be issued to me as soon as administratively practicable. I will not have any rights as a shareholder of the Company until the shares of Stock are issued.
|
(a)
|
Grant Date
:
_______________, 2010
|
|
(b)
|
Number of Shares of Stock Subject to Your Option
: ___________ shares of Stock.
|
|
(c)
|
Exercise Price
: $___________ per share of Stock.
|
|
(a)
|
In General:
In general, you may exercise all or any part of the vested portion of your Option at any time prior to the tenth anniversary of the Grant Date (the
“Expiration Date”), except to the extent the Committee determines otherwise upon the occurrence of an Applicable Event or as otherwise provided below.
|
|
(b)
|
Effect of Termination:
If your employment terminates prior to the Expiration Date, your Option will remain exercisable for the period specified below:
|
|
(i)
|
Retirement
. If you Retire, the vested portion of your Option may be exercised at any time before the earlier of the Expiration Date or one year following your Retirement.
|
|
(ii)
|
Death or Disability
. If your employment terminates due to your death or Disability, the vested portion of your Option may be exercised at any time before the earlier of the Expiration Date or the first anniversary of your termination date.
|
|
(iii)
|
For Any Reason Other Than Retirement, Death or Disability
. If your employment is terminated for any reason other than your Retirement, death or Disability: (i) the unvested portion of your Option will be forfeited on your termination date; and (ii)
the vested portion of your Option may be exercised at any time before the earlier of the Expiration Date or 30 days after your termination date.
|
|
(c)
|
Applicable Event:
If there is an Applicable Event, Section 11.5 of the Plan will apply to the outstanding and unexercised portion of your Option.
|
(a)
|
Exercise.
Your Option may be exercised with respect to whole shares of Stock only.
|
(b)
|
Procedure.
To exercise all or any part of the vested portion of your Option, you must (i) complete and return a copy of the Nonqualified Stock Option Exercise Form (attached to this Award Agreement as
Exhibit A)
; and (ii) pay the applicable exercise price for each share of Stock being purchased as described in Section 4(c).
|
(c)
|
Payment of Exercise Price
. You may pay the exercise price for each share of Stock being purchased upon the exercise of the Option: (i) in cash equal to the aggregate exercise price of the number of shares of Stock being purchased; (ii) in the form of a personal check or money order made payable to “Rurban Financial Corp.” in the amount of the aggregate exercise price of the shares of Stock being purchased; (iii) by tendering whole shares of Stock owned by you for at least six months before the Option is exercised (or such other period established by generally accepted accounting principles) with a Fair Market Value equal to the aggregate exercise price of the shares of Stock being purchased; or (iv) any combination of the foregoing.
|
(d)
|
Issuance of Shares of Stock.
As soon as administratively practicable after the Company determines that the Option has been validly exercised as to any of the shares of Stock, the Company will issue or transfer the relevant number of shares of Stock to you. Any fractional shares of Stock resulting from the exercise of your Option will be settled in cash.
|
|
(g)
|
Tenure:
Nothing in the Plan or this Award Agreement shall confer upon you the right to continue as an Employee or Director, as applicable, of the Company or any Subsidiary.
|
(h)
|
Governing Law:
This Award Agreement will be construed in accordance with and governed by the laws (other than laws governing conflicts of laws) of the State of Ohio.
|
|
(i)
|
Amendment of Award Agreement:
This Award Agreement may be amended by a written agreement signed by both parties to this Award Agreement; provided, however,
|
·
|
A copy of the Plan has been made available to you; and
|
·
|
You understand and accept the terms and conditions placed on your Option.
|
PARTICIPANT | RURBAN FINANCIAL CORP. | |
Print Name: | Print Name: | |
Title: | ||
Date: | Date: |
1.
|
Affected Option Shares:
This Exercise Notice relates to the following Option and shares of Stock (
fill in the blanks
):
|
|
____
|
Personal check, bank draft or money order payable to “Rurban Financial Corp.”
|
|
____
|
Through the tender of whole shares of Stock that the Optionee has held for at least six months
(
or such other period established by generally accepted accounting principles) and which have a Fair Market Value equal to the total exercise price.
|
|
____
|
A combination of these two methods (the aggregate amount of cash and value of shares delivered or attested must be equal to the total exercise price).
|
|
Notes:
If:
(
a) the cash, bank or money order method of exercise is selected, full payment must be included with this Exercise Notice; and (b) you elect the tender form of paying the exercise price, you may contact the Company at the address given below for further information as to how the choice of payment will affect the number of shares of Stock you will receive.
|
3.
|
Payment of Taxes:
Subject to Section 5(c) of the Award Agreement under which the Option was issued, the withholding taxes associated with this exercise of the Option will be paid (
check one
):
|
|
____
|
From my payroll checking account.
|
|
____
|
By having the Company withhold shares of Stock that would otherwise be issued with respect to this exercise.
|
|
(a)
|
I fully understand the effect (including the investment effect) of exercising the Option and buying the shares of stock and understand that there is no guarantee that the value of these shares of Stock will appreciate or will not depreciate;
|
|
(b)
|
This Exercise Notice will have no effect if it is not returned to the Company at the address given below before the Expiration Date or such other date as may be specified in the Award Agreement or, to the extent applicable, if full payment of the exercise price is not included; and
|
|
(c)
|
The shares of Stock I am buying by completing and returning this Exercise Notice will be issued to me as soon as administratively practicable. I will not have any rights as a shareholder of the Company until the shares of Stock are issued.
|
Name
|
State of Incorporation
|
The State Bank and Trust Company
|
Ohio
|
RFCBC, Inc.
|
Ohio
|
Rurban Mortgage Company*
|
Ohio
|
Rurbanc Data Services, Inc.
|
Ohio
|
Rurban Statutory Trust I
|
Declaration of Trust – State of Connecticut
|
Rurban Statutory Trust II
|
Declaration of Trust – State of Delaware
|
NC Merger Corp.**
|
Ohio
|
|
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;
|
|
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 the financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
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 upon 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 fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
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 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.
|
Dated: March 31, 2011
|
By:
|
/s/ Mark A. Klein
|
|
Mark A. Klein
|
|
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;
|
|
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 the financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
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 upon 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 fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
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 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.
|
Dated: March 31, 2011
|
By:
|
/s/ Anthony V. Cosentino
|
|
Anthony V. Cosentino
|
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the consolidated financial condition and results of operations of the Company and its subsidiaries.
|
/s/ Mark A. Klein
Mark A. Klein,
President and Chief Executive Officer
|
/s/ Anthony V. Cosentino
Anthony V. Cosentino
Executive Vice President and Chief Financial Officer
|
Dated: March 31, 2011
|
Dated: March 31, 2011
|
*
|
This certification is being furnished as required by Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 1350 of Chapter 63 of Title 18 of the United States Code, and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that Section. This certification shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent the Company specifically incorporates it by reference in such filing.
|