x
|
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
¨
|
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
Virginia
|
82-0545425
|
|
(State or other jurisdiction of
|
(I.R.S. Employer
|
|
incorporation or organization)
|
Identification No.)
|
Large accelerated filer
¨
|
Accelerated filer
¨
|
|
Non-accelerated filer
¨
(Do not check if a smaller reporting company)
|
Smaller reporting company
x
|
PART I
|
FINANCIAL INFORMATION
|
|
Item 1.
|
Financial Statements (Unaudited)
|
|
Consolidated Balance Sheets, June 30, 2011 and December 31, 2010 (Audited)
|
Page 2
|
|
Consolidated Statements of Income, three months ended June 30, 2011 and 2010
|
Page 3
|
|
Consolidated Statements of Income, six months ended June 30, 2011 and 2010
|
Page 4
|
|
Consolidated Statements of Changes in Shareholders' Equity, six months ended June 30, 2011 and 2010
|
Page 5
|
|
Consolidated Statements of Cash Flows, six months ended June 30, 2011 and 2010
|
Page 6
|
|
Notes to Consolidated Financial Statements (Unaudited)
|
Page 7
|
|
Item 2.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
Page 29
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Page 43
|
Item 4.
|
Controls and Procedures
|
Page 44
|
PART II
|
OTHER INFORMATION
|
|
Item 1.
|
Legal Proceedings
|
Page 45
|
Item1A.
|
Risk Factors
|
Page 45
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Page 46
|
Item 3.
|
Defaults Upon Senior Securities
|
Page 46
|
Item 4.
|
(Removed and Reserved)
|
Page 46
|
Item 5.
|
Other Information
|
Page 46
|
Item 6.
|
Exhibits
|
Page 46
|
|
Signatures
|
Page 47
|
June 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
(Unaudited)
|
||||||||
ASSETS
|
||||||||
Cash and due from banks
|
$ | 8,451 | $ | 9,198 | ||||
Interest-bearing deposits in other banks and federal funds sold
|
14,202 | 102,709 | ||||||
Securities available for sale, at fair value
|
91,516 | 124,307 | ||||||
Restricted stock
|
5,007 | 4,438 | ||||||
Loans held for sale, at fair value
|
56,519 | 82,244 | ||||||
Loans
|
520,674 | 491,529 | ||||||
Allowance for loan losses
|
(11,057 | ) | (10,527 | ) | ||||
Net loans
|
509,617 | 481,002 | ||||||
Premises and equipment
|
8,739 | 8,934 | ||||||
Accrued interest receivable
|
2,319 | 2,380 | ||||||
Other real estate owned
|
590 | 1,859 | ||||||
Other assets
|
16,056 | 14,753 | ||||||
Total assets
|
$ | 713,016 | $ | 831,824 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
||||||||
Deposits
|
||||||||
Noninterest-bearing deposits
|
$ | 128,945 | $ | 83,972 | ||||
Savings and interest-bearing deposits
|
126,885 | 158,352 | ||||||
Time deposits
|
252,083 | 385,524 | ||||||
Total deposits
|
507,913 | 627,848 | ||||||
Other liabilities
|
||||||||
Short-term borrowings
|
107,457 | 80,348 | ||||||
Long-term borrowings
|
5,929 | 37,034 | ||||||
Subordinated debentures
|
6,186 | 6,186 | ||||||
Other liabilities and accrued expenses
|
7,712 | 8,215 | ||||||
Total liabilities
|
$ | 635,197 | $ | 759,631 | ||||
SHAREHOLDERS' EQUITY
|
||||||||
Common stock, par value, $0.835; authorized, 60,000,000 shares; issued and outstanding, 10,299,041 shares at June 30, 2011 and 10,376,169 shares at
December 31, 2010
|
$ | 8,600 | $ | 8,664 | ||||
Additional paid in capital
|
17,419 | 17,794 | ||||||
Retained earnings
|
51,946 | 47,530 | ||||||
Accumulated other comprehensive income (loss), net
|
(146 | ) | (1,795 | ) | ||||
Total shareholders' equity
|
77,819 | 72,193 | ||||||
Total liabilities and shareholders' equity
|
$ | 713,016 | $ | 831,824 |
Three Months Ended June 30,
|
||||||||
2011
|
2010
|
|||||||
Interest and Dividend Income
|
||||||||
Interest and fees on loans
|
$ | 7,932 | $ | 7,977 | ||||
Interest-bearing deposits and federal funds sold
|
17 | 77 | ||||||
Interest and dividends on securities
|
580 | 604 | ||||||
Total interest and dividend income
|
8,529 | 8,658 | ||||||
Interest Expense
|
||||||||
Interest on deposits
|
1,179 | 2,049 | ||||||
Interest on short-term borrowings
|
396 | 195 | ||||||
Interest on long-term borrowings
|
55 | 374 | ||||||
Interest on subordinated debentures
|
52 | 53 | ||||||
Total interest expense
|
1,682 | 2,671 | ||||||
Net interest income
|
6,847 | 5,987 | ||||||
Provision for loan losses
|
(2 | ) | 548 | |||||
Net interest income after provision for loan losses
|
6,849 | 5,439 | ||||||
Noninterest Income
|
||||||||
Service fees on deposit accounts
|
168 | 166 | ||||||
Gain on sale of loans
|
7,382 | 8,398 | ||||||
Mortgage broker fee income
|
233 | 394 | ||||||
Other income
|
317 | (1,681 | ) | |||||
Total noninterest income
|
8,100 | 7,277 | ||||||
Noninterest Expense
|
||||||||
Compensation and employee benefits
|
5,877 | 5,364 | ||||||
Occupancy and equipment
|
678 | 646 | ||||||
Other operating expenses
|
4,248 | 4,032 | ||||||
Total noninterest expense
|
10,803 | 10,042 | ||||||
Income before income taxes
|
4,146 | 2,674 | ||||||
Income tax expense
|
1,475 | 996 | ||||||
NET INCOME
|
$ | 2,671 | $ | 1,678 | ||||
Earnings per common share:
|
||||||||
Basic
|
$ | 0.26 | $ | 0.16 | ||||
Diluted
|
$ | 0.26 | $ | 0.16 | ||||
Average outstanding shares:
|
||||||||
Basic
|
10,324,502 | 10,573,210 | ||||||
Diluted
|
10,391,451 | 10,592,125 |
Six Months Ended June 30,
|
||||||||
2011
|
2010
|
|||||||
Interest and Dividend Income
|
||||||||
Interest and fees on loans
|
$ | 15,814 | $ | 15,849 | ||||
Interest-bearing deposits and federal funds sold
|
72 | 114 | ||||||
Interest and dividends on securities
|
1,213 | 954 | ||||||
Total interest and dividend income
|
17,099 | 16,917 | ||||||
Interest Expense
|
||||||||
Interest on deposits
|
2,690 | 4,017 | ||||||
Interest on short-term borrowings
|
773 | 460 | ||||||
Interest on long-term borrowings
|
117 | 763 | ||||||
Interest on subordinated debentures
|
105 | 105 | ||||||
Total interest expense
|
3,685 | 5,345 | ||||||
Net interest income
|
13,414 | 11,572 | ||||||
Provision for loan losses
|
221 | 746 | ||||||
Net interest income after provision for loan losses
|
13,193 | 10,826 | ||||||
Noninterest Income
|
||||||||
Service fees on deposit accounts
|
341 | 326 | ||||||
Gain on sale of loans
|
12,898 | 13,638 | ||||||
Mortgage broker fee income
|
569 | 732 | ||||||
Other income
|
131 | (1,396 | ) | |||||
Total noninterest income
|
13,939 | 13,300 | ||||||
Noninterest Expense
|
||||||||
Compensation and employee benefits
|
11,270 | 10,616 | ||||||
Occupancy and equipment
|
1,343 | 1,330 | ||||||
Other operating expenses
|
6,821 | 7,599 | ||||||
Total noninterest expense
|
19,434 | 19,545 | ||||||
Income before income taxes
|
7,698 | 4,581 | ||||||
Income tax expense
|
2,740 | 1,687 | ||||||
NET INCOME
|
$ | 4,958 | $ | 2,894 | ||||
Earnings per common share:
|
||||||||
Basic
|
$ | 0.48 | $ | 0.27 | ||||
Diluted
|
$ | 0.48 | $ | 0.27 | ||||
Average outstanding shares:
|
||||||||
Basic
|
10,341,944 | 10,572,614 | ||||||
Diluted
|
10,398,064 | 10,590,816 |
Accumulated
|
||||||||||||||||||||
Other
|
||||||||||||||||||||
Additional
|
Compre-
|
|||||||||||||||||||
Common
|
Paid in
|
Retained
|
hensive
|
|||||||||||||||||
Stock
|
Capital
|
Earnings
|
Income (Loss)
|
Total
|
||||||||||||||||
Balance, December 31, 2010
|
$ | 8,664 | $ | 17,794 | $ | 47,530 | $ | (1,795 | ) | $ | 72,193 | |||||||||
Comprehensive income:
|
||||||||||||||||||||
Net income
|
- | - | 4,958 | - | 4,958 | |||||||||||||||
Other comprehensive income, unrealized holding gains arising during the period (net of tax, $850)
|
- | - | - | 1,649 | 1,649 | |||||||||||||||
Total comprehensive income
|
6,607 | |||||||||||||||||||
Stock option exercises (4,250 shares)
|
4 | 22 | - | - | 26 | |||||||||||||||
Dividend reinvestment plan (0 shares)
|
- | - | - | - | - | |||||||||||||||
Repurchased under share repurchase program (81,378 shares)
|
(68 | ) | (516 | ) | - | - | (584 | ) | ||||||||||||
Cash dividend
|
- | - | (542 | ) | - | (542 | ) | |||||||||||||
Stock-based compensation expense recognized in earnings
|
- | 119 | - | - | 119 | |||||||||||||||
Balance, June 30, 2011
|
$ | 8,600 | $ | 17,419 | $ | 51,946 | $ | (146 | ) | $ | 77,819 | |||||||||
Balance, December 31, 2009
|
$ | 8,799 | $ | 18,552 | $ | 40,377 | $ | 50 | $ | 67,778 | ||||||||||
Comprehensive income:
|
||||||||||||||||||||
Net income
|
- | - | 2,894 | - | 2,894 | |||||||||||||||
Other comprehensive income, unrealized holding gains arising during the period (net of tax, $110)
|
- | - | - | 214 | 214 | |||||||||||||||
Total comprehensive income
|
3,108 | |||||||||||||||||||
Stock option exercises (15,000 shares)
|
13 | 39 | - | - | 52 | |||||||||||||||
Dividend reinvestment plan (74,721 shares)
|
62 | 354 | - | - | 416 | |||||||||||||||
Repurchased under share repurchase program 129,878 shares)
|
(109 | ) | (679 | ) | - | - | (788 | ) | ||||||||||||
Cash dividend
|
- | - | (211 | ) | - | (211 | ) | |||||||||||||
Stock-based compensation expense recognized in earnings
|
- | 98 | - | - | 98 | |||||||||||||||
Balance, June 30, 2010
|
$ | 8,765 | $ | 18,364 | $ | 43,060 | $ | 264 | $ | 70,453 |
Six Months Ended June 30,
|
||||||||
2011
|
2010
|
|||||||
Cash Flows from Operating Activities
|
||||||||
Net income
|
$ | 4,958 | $ | 2,894 | ||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
||||||||
Provision for loan losses
|
221 | 746 | ||||||
Provision for losses on mortgage loans sold
|
289 | 1,100 | ||||||
Net gains/losses on sales and write-down of other real estate owned
|
(1,015 | ) | 210 | |||||
Deferred tax benefit
|
(8 | ) | 34 | |||||
Stock-based compensation
|
119 | 98 | ||||||
Valuation allowance on derivatives
|
(68 | ) | (574 | ) | ||||
Amortization of premiums and discount accretion on securities, net
|
8 | 39 | ||||||
Depreciation and amortization
|
227 | 226 | ||||||
Changes in assets and liabilities:
|
||||||||
Decrease in valuation of loans held for sale carried at fair value
|
(779 | ) | (986 | ) | ||||
Decrease in loans held for sale
|
26,504 | 11,063 | ||||||
Decrease in other assets
|
(2,019 | ) | (18,526 | ) | ||||
Decrease in other liabilities
|
(791 | ) | (6,653 | ) | ||||
Net cash provided by (used in) operating activities
|
27,646 | (10,329 | ) | |||||
Cash Flows from Investing Activities
|
||||||||
Proceeds from maturities and calls of securities available for sale
|
40,317 | 45,027 | ||||||
Proceeds from sale of securities available for sale
|
- | 20,163 | ||||||
Purchases of securities available for sale
|
(5,604 | ) | (145,069 | ) | ||||
Net (increase) decrease in loans
|
(31,818 | ) | 17,156 | |||||
Proceeds from sales of other real estate owned
|
5,266 | 2,015 | ||||||
Purchases of premises and equipment
|
(28 | ) | (104 | ) | ||||
Net cash provided by (used in) investing activities
|
8,133 | (60,812 | ) | |||||
Cash Flows from Financing Activities
|
||||||||
Net increase in demand, interest-bearing demand and savings deposits
|
13,505 | 46,903 | ||||||
Net (decrease) increase in time deposits
|
(133,441 | ) | 94,517 | |||||
(Decrease) increase in securities sold under agreement to repurchase
|
(3,160 | ) | 909 | |||||
Net increase (decrease) in other short-term borrowings
|
271 | (7,569 | ) | |||||
Net decrease in long-term borrowings
|
(1,107 | ) | (8,190 | ) | ||||
Proceeds from issuance of common stock
|
26 | 469 | ||||||
Repurchase of common stock
|
(584 | ) | (788 | ) | ||||
Dividends paid
|
(542 | ) | (211 | ) | ||||
Net cash (used) provided by financing activities
|
(125,032 | ) | 126,040 | |||||
(Decrease) increase in cash and cash equivalents
|
(89,253 | ) | 54,899 | |||||
Cash and Cash Equivalents
|
||||||||
Beginning
|
111,906 | 31,221 | ||||||
Ending
|
$ | 22,653 | $ | 86,120 | ||||
Supplemental Disclosures of Cash Flow Information
|
||||||||
Cash payments for interest
|
$ | 4,101 | $ | 5,380 | ||||
Cash payments for income taxes
|
$ | 2,524 | $ | 2,416 | ||||
Supplemental Disclosures of Noncash Investing Activities
|
||||||||
Unrealized gain on securities available for sale
|
$ | 2,500 | $ | 325 |
Six Months Ended
|
||||
June 30, 2011
|
||||
Expected life of options granted, in years
|
3.09 | |||
Risk-free interest rate
|
0.99 | % | ||
Expected volatility of stock
|
49 | % | ||
Annual expected dividend yield
|
1 | % | ||
Fair value of granted options
|
$ | 238,323 | ||
Non-vested options
|
285,200 |
Weighted Avg.
|
||||||||||||||||
Number of
|
Weighted Avg.
|
Remaining Contractual
|
Aggregate Intrinsic
|
|||||||||||||
Options
|
Exercise Price
|
Term, in Years
|
Value
|
|||||||||||||
Outstanding at beginning of year
|
418,525 | $ | 5.98 | 1.34 | $ | 290,583 | ||||||||||
Granted
|
100,100 | $ | 6.72 | 3.09 | $ | - | ||||||||||
Exercised
|
(4,250 | ) | $ | 6.11 | - | $ | - | |||||||||
Lapsed or Canceled
|
(86,100 | ) | $ | 7.33 | - | $ | - | |||||||||
Outstanding at June 30, 2011
|
428,275 | $ | 5.88 | 1.57 | $ | 565,064 | ||||||||||
Exercisable at June 30, 2011
|
143,075 | $ | 6.41 | 0.44 | $ | 112,368 |
Six Months Ended
|
||||
June 30, 2010
|
||||
Expected life of options granted, in years
|
3.15 | |||
Risk-free interest rate
|
1.39 | % | ||
Expected volatility of stock
|
48 | % | ||
Annual expected dividend yield
|
1 | % | ||
Fair value of granted options
|
$ | 214,552 | ||
Non-vested options
|
272,025 |
Weighted Avg.
|
||||||||||||||||
Number of
|
Weighted Avg.
|
Remaining Contractual
|
Aggregate Intrinsic
|
|||||||||||||
Options
|
Exercise Price
|
Term, in Years
|
Value
|
|||||||||||||
Outstanding at beginning of year
|
439,079 | $ | 6.44 | 1.56 | $ | 222,770 | ||||||||||
Granted
|
103,500 | $ | 5.97 | 3.15 | $ | - | ||||||||||
Exercised
|
(15,000 | ) | $ | 3.45 | - | $ | - | |||||||||
Lapsed or canceled
|
(38,820 | ) | $ | 6.43 | - | $ | - | |||||||||
Outstanding at June 30, 2010
|
488,759 | $ | 6.43 | 1.61 | $ | 179,517 | ||||||||||
Exercisable at June 30, 2010
|
216,734 | $ | 7.77 | 0.84 | $ | - |
June 30, 2011
|
||||||||||||||||
Amortized Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
(Losses)
|
Estimated
Fair Value |
|||||||||||||
(In Thousands)
|
||||||||||||||||
U.S. Government agencies
|
$ | 89,379 | $ | 125 | $ | (364 | ) | $ | 89,140 | |||||||
Mortgage backed securities
|
618 | 20 | - | 638 | ||||||||||||
Municipals - taxable
|
240 | 4 | - | 244 | ||||||||||||
CRA mutual fund
|
1,500 | - | (6 | ) | 1,494 | |||||||||||
$ | 91,737 | $ | 149 | $ | (370 | ) | $ | 91,516 |
December 31, 2010
|
||||||||||||||||
Amortized Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized (Losses) |
Estimated
Fair Value |
|||||||||||||
(In Thousands)
|
||||||||||||||||
U.S. Government agencies
|
$ | 124,388 | $ | 62 | $ | (2,738 | ) | $ | 121,712 | |||||||
Mortgage backed securities
|
670 | - | (40 | ) | 630 | |||||||||||
Municipals - taxable
|
470 | 2 | - | 472 | ||||||||||||
CRA mutual fund
|
1,500 | - | (7 | ) | 1,493 | |||||||||||
$ | 127,028 | $ | 64 | $ | (2,785 | ) | $ | 124,307 |
June 30, 2011
|
December 31, 2010
|
|||||||||||||||
Amortized
|
Estimated
|
Amortized
|
Estimated
|
|||||||||||||
Cost
|
Fair Value
|
Cost
|
Fair Value
|
|||||||||||||
(In Thousands)
|
||||||||||||||||
U.S. Government agencies:
|
||||||||||||||||
Due in one year or less
|
$ | 5,000 | $ | 5,002 | $ | 5,000 | $ | 5,022 | ||||||||
Due after one through five years
|
19,999 | 20,047 | 50,026 | 49,751 | ||||||||||||
Due after five through ten years
|
24,984 | 24,983 | 29,978 | 29,181 | ||||||||||||
Due after ten through fifteen years
|
39,396 | 39,108 | 39,384 | 37,758 | ||||||||||||
Municipals - taxable:
|
||||||||||||||||
Due after one through five years
|
240 | 244 | 470 | 472 | ||||||||||||
Mortgage backed securities:
|
||||||||||||||||
Due after fifteen years
|
618 | 638 | 670 | 630 | ||||||||||||
CRA Mutual Fund
|
1,500 | 1,494 | 1,500 | 1,493 | ||||||||||||
Total
|
$ | 91,737 | $ | 91,516 | $ | 127,028 | $ | 124,307 |
Securities in a loss
|
Securities in a loss
|
|||||||||||||||||||||||
Position for less than
|
Position for 12 Months
|
|||||||||||||||||||||||
12 Months
|
or Longer
|
Total
|
||||||||||||||||||||||
June 30, 2011
|
Estimated
|
Unrealized
|
Estimated
|
Unrealized
|
Estimated
|
Unrealized
|
||||||||||||||||||
Fair Value
|
Losses
|
Fair Value
|
Losses
|
Fair Value
|
Losses
|
|||||||||||||||||||
Investment securities available
|
(In Thousands)
|
|||||||||||||||||||||||
for sale:
|
||||||||||||||||||||||||
U.S. Government agencies
|
$ | 29,023 | $ | (364 | ) | $ | - | $ | - | $ | 29,023 | $ | (364 | ) | ||||||||||
CRA Mutual fund
|
1,494 | (6 | ) | - | - | 1,494 | (6 | ) | ||||||||||||||||
Total
|
$ | 30,517 | $ | (370 | ) | $ | - | $ | - | $ | 30,517 | $ | (370 | ) |
Securities in a loss
|
Securities in a loss
|
|||||||||||||||||||||||
Position for less than
|
Position for 12 Months
|
|||||||||||||||||||||||
12 Months
|
or Longer
|
Total
|
||||||||||||||||||||||
December 31, 2010
|
Estimated
|
Unrealized
|
Estimated
|
Unrealized
|
Estimated
|
Unrealized
|
||||||||||||||||||
Fair Value
|
Losses
|
Fair Value
|
Losses
|
Fair Value
|
Losses
|
|||||||||||||||||||
Investment securities available
|
(In Thousands)
|
|||||||||||||||||||||||
for sale:
|
||||||||||||||||||||||||
Mortgage backed securities
|
$ | 630 | $ | (40 | ) | $ | - | $ | - | $ | 630 | $ | (40 | ) | ||||||||||
U.S. Government agencies
|
96,623 | (2,738 | ) | - | - | 96,623 | (2,738 | ) | ||||||||||||||||
CRA Mutual fund
|
1,493 | (7 | ) | - | - | 1,493 | (7 | ) | ||||||||||||||||
Total
|
$ | 98,746 | $ | (2,785 | ) | $ | - | $ | - | $ | 98,746 | $ | (2,785 | ) |
June 30, 2011
|
December 31, 2010
|
|||||||
Restricted Stock:
|
(In Thousands)
|
|||||||
Federal Reserve Bank stock
|
$ | 999 | $ | 999 | ||||
FHLB stock
|
4,008 | 3,439 | ||||||
$ | 5,007 | $ | 4,438 |
June 30, 2011
|
December 31, 2010
|
|||||||||||||||
Amount
|
Percentage of
Total
|
Amount
|
Percentage of
Total
|
|||||||||||||
Commercial real estate
|
$ | 237,821 | 45.67 | % | $ | 217,999 | 44.35 | % | ||||||||
Residential real estate
|
128,820 | 24.74 | 137,752 | 28.03 | ||||||||||||
Commercial
|
116,660 | 22.41 | 94,798 | 19.28 | ||||||||||||
Real estate construction
|
34,446 | 6.62 | 38,093 | 7.75 | ||||||||||||
Consumer
|
2,927 | 0.56 | 2,887 | 0.59 | ||||||||||||
Total loans
|
$ | 520,674 | 100.00 | % | $ | 491,529 | 100.00 | % | ||||||||
Less allowance for loan losses
|
11,057 | 10,527 | ||||||||||||||
Total net loans
|
$ | 509,617 | $ | 481,002 |
Allowance for Loan Losses and Recorded Investment in Loans
|
||||||||||||||||||||||||
For the Six Months Ended June 30, 2011
|
Commercial
Real Estate
|
Residential
Real Estate
|
Commercial
|
Real Estate
Construction
|
Consumer
|
Total
|
||||||||||||||||||
Allowance for loan losses:
|
(In Thousands)
|
|||||||||||||||||||||||
Beginning Balance
|
$ | 5,316 | $ | 2,925 | $ | 1,506 | $ | 757 | $ | 23 | $ | 10,527 | ||||||||||||
Charge-offs
|
(161 | ) | (363 | ) | (29 | ) | - | - | (553 | ) | ||||||||||||||
Recoveries
|
592 | 38 | 232 | - | - | 862 | ||||||||||||||||||
Provisions
|
(648 | ) | 643 | 373 | (158 | ) | 11 | 221 | ||||||||||||||||
Ending Balance
|
$ | 5,099 | $ | 3,243 | $ | 2,082 | $ | 599 | $ | 34 | $ | 11,057 | ||||||||||||
Ending balance: individually evaluated for impairment
|
$ | 3,600 | $ | 3,260 | $ | 621 | $ | - | $ | - | $ | 7,481 | ||||||||||||
Ending balance: collectively evaluated for impairment
|
$ | 1,499 | $ | (17 | ) | $ | 1,461 | $ | 599 | $ | 34 | $ | 3,576 | |||||||||||
Ending balance: loans acquired with deteriorated credit quality
|
$ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||
Loans
|
||||||||||||||||||||||||
Ending balance
|
$ | 237,821 | $ | 128,820 | $ | 116,660 | $ | 34,446 | $ | 2,927 | $ | 520,674 | ||||||||||||
Ending balance: individually evaluated for impairment
|
$ | 3,600 | $ | 2,868 | $ | 874 | $ | - | $ | - | $ | 7,342 | ||||||||||||
Ending balance: collectively evaluated for impairment
|
$ | 234,221 | $ | 125,952 | $ | 115,786 | $ | 34,446 | $ | 2,927 | $ | 513,332 | ||||||||||||
Ending balance: loans acquired with deteriorated credit quality
|
$ | - | $ | - | $ | - | $ | - | $ | - | $ | - |
For the Year Ended December 31, 2010
|
Commercial
Real Estate
|
Residential
Real Estate
|
Commercial
|
Real Estate
Construction |
Consumer
|
Total
|
||||||||||||||||||
Allowance for loan losses:
|
(In Thousands)
|
|||||||||||||||||||||||
Beginning Balance
|
$ | 4,407 | $ | 2,606 | $ | 1,562 | $ | 539 | $ | 13 | $ | 9,127 | ||||||||||||
Charge-offs
|
(624 | ) | (875 | ) | (501 | ) | (48 | ) | - | (2,048 | ) | |||||||||||||
Recoveries
|
109 | 38 | 385 | 99 | 1 | 632 | ||||||||||||||||||
Provisions
|
1,424 | 1,156 | 60 | 167 | 9 | 2,816 | ||||||||||||||||||
Ending Balance
|
$ | 5,316 | $ | 2,925 | $ | 1,506 | $ | 757 | $ | 23 | $ | 10,527 | ||||||||||||
Ending balance: individually evaluated for impairment
|
$ | 960 | $ | 283 | $ | - | $ | - | $ | - | $ | 1,243 | ||||||||||||
Ending balance: collectively evaluated for impairment
|
$ | 4,356 | $ | 2,642 | $ | 1,506 | $ | 757 | $ | 23 | $ | 9,284 | ||||||||||||
Ending balance: loans acquired with deteriorated credit quality
|
$ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||
Loans
|
||||||||||||||||||||||||
Ending balance
|
$ | 217,999 | $ | 137,752 | $ | 94,798 | $ | 38,093 | $ | 2,887 | $ | 491,529 | ||||||||||||
Ending balance: individually evaluated for impairment
|
$ | 6,712 | $ | 949 | $ | 900 | $ | - | $ | - | $ | 8,561 | ||||||||||||
Ending balance: collectively evaluated for impairment
|
$ | 211,287 | $ | 136,803 | $ | 93,898 | $ | 38,093 | $ | 2,887 | $ | 482,968 | ||||||||||||
Ending balance: loans acquired with deteriorated credit quality
|
$ | - | $ | - | $ | - | $ | - | $ | - | $ | - |
Commercial Real
Estate
|
Residential Real
Estate
|
Commercial
|
Real Estate
Construction
|
Consumer
|
Totals
|
|||||||||||||||||||||||||||||||||||||||||||
6/30/11
|
12/31/10
|
6/30/11
|
12/31/10
|
6/30/11
|
12/31/10
|
6/30/11
|
12/31/10
|
6/30/11
|
12/31/10
|
6/30/11
|
12/31/10
|
|||||||||||||||||||||||||||||||||||||
(In Thousands)
|
||||||||||||||||||||||||||||||||||||||||||||||||
Pass
|
$ | 205,549 | $ | 173,101 | $ | 120,310 | $ | 125,808 | $ | 103,471 | $ | 87,883 | $ | 34,545 | $ | 36,343 | $ | 2,926 | $ | 2,887 | $ | 466,801 | 426,022 | |||||||||||||||||||||||||
Special mention
|
15,666 | 26,016 | 2,359 | 4,828 | 10,104 | 4,827 | - | 1,585 | - | - | 28,129 | 37,256 | ||||||||||||||||||||||||||||||||||||
Substandard
|
17,461 | 19,613 | 6,221 | 7,218 | 3,522 | 2,498 | - | 310 | - | - | 27,204 | 29,639 | ||||||||||||||||||||||||||||||||||||
Doubtful
|
- | 143 | - | - | - | - | - | - | - | - | - | 143 | ||||||||||||||||||||||||||||||||||||
Loss
|
- | - | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||
Unearned income
|
(855 | ) | (874 | ) | (70 | ) | (102 | ) | (437 | ) | (410 | ) | (99 | ) | (145 | ) | 1 | - | $ | (1,460 | ) | (1,531 | ) | |||||||||||||||||||||||||
Total
|
$ | 237,821 | $ | 217,999 | $ | 128,820 | $ | 137,752 | $ | 116,660 | $ | 94,798 | $ | 34,446 | $ | 38,093 | $ | 2,927 | $ | 2,887 | $ | 520,674 | $ | 491,529 |
Commercial Real
Estate |
Residential Real Estate
|
Commercial
|
Real Estate
Construction |
Consumer
|
Totals
|
|||||||||||||||||||||||||||||||||||||||||||
6/30/11
|
12/31/10
|
6/30/11
|
12/31/10
|
6/30/11
|
12/31/10
|
6/30/11
|
12/31/10
|
6/30/11
|
12/31/10
|
6/30/11
|
12/31/10
|
|||||||||||||||||||||||||||||||||||||
(In Thousands)
|
||||||||||||||||||||||||||||||||||||||||||||||||
Performing
|
$ | 234,221 | 211,287 | $ | 125,560 | 136,803 | $ | 116,039 | 93,898 | $ | 34,446 | 38,093 | $ | 2,927 | 2,887 | $ | 513,193 | 482,968 | ||||||||||||||||||||||||||||||
Non-performing
|
$ | 3,600 | 6,712 | $ | 3,260 | 949 | $ | 621 | 900 | $ | - | - | $ | - | - | $ | 7,481 | 8,561 | ||||||||||||||||||||||||||||||
Total
|
$ | 237,821 | $ | 217,999 | $ | 128,820 | $ | 137,752 | $ | 116,660 | $ | 94,798 | $ | 34,446 | $ | 38,093 | $ | 2,927 | $ | 2,887 | $ | 520,674 | $ | 491,529 |
Age Analysis of Past Due Loans
|
||||||||||||||||||||||||||||
As of June 30, 2011
|
||||||||||||||||||||||||||||
30-59 Days
Past Due
|
60-89 Days
Past Due
|
Greater than
90 Days Past
Due
|
Total Past
Due
|
Non-accrual
Loans
|
Current
Loans
|
Total
Loans
|
||||||||||||||||||||||
(In Thousands)
|
||||||||||||||||||||||||||||
Commercial real estate
|
$ | - | $ | - | $ | - | $ | - | $ | 3,600 | $ | 234,221 | $ | 237,821 | ||||||||||||||
Residential real estate
|
- | - | - | - | 3,260 | 125,560 | 128,820 | |||||||||||||||||||||
Commercial
|
171 | - | - | 171 | 621 | 115,868 | 116,660 | |||||||||||||||||||||
Real estate construction
|
- | - | - | - | - | 34,446 | 34,446 | |||||||||||||||||||||
Consumer
|
- | - | - | - | - | 2,927 | 2,927 | |||||||||||||||||||||
Total
|
$ | 171 | $ | - | $ | - | $ | 171 | $ | 7,481 | $ | 513,022 | $ | 520,674 |
As of December 31, 2010
|
||||||||||||||||||||||||||||
30-59 Days
Past Due
|
60-89 Days
Past Due
|
Greater than
90 Days Past
Due
|
Total Past
Due
|
Non-accrual
Loans
|
Current
Loans
|
Total
Loans
|
||||||||||||||||||||||
(In Thousands)
|
||||||||||||||||||||||||||||
Commercial real estate
|
$ | - | $ | 1,487 | $ | - | $ | 1,487 | $ | 6,712 | $ | 209,800 | $ | 217,999 | ||||||||||||||
Residential real estate
|
569 | 382 | 333 | 1,284 | 949 | 135,519 | 137,752 | |||||||||||||||||||||
Commercial
|
- | - | - | - | 900 | 93,898 | 94,798 | |||||||||||||||||||||
Real estate construction
|
- | - | - | - | - | 38,093 | 38,093 | |||||||||||||||||||||
Consumer
|
- | - | - | - | - | 2,887 | 2,887 | |||||||||||||||||||||
Total
|
$ | 569 | $ | 1,869 | $ | 333 | $ | 2,771 | $ | 8,561 | $ | 480,197 | $ | 491,529 |
Impaired Loans
|
||||||||||||||||||||
As of June 30, 2011
|
||||||||||||||||||||
Recorded
Investment
|
Unpaid Principal
Balance
|
Related
Allowance
|
Average
Recorded
Investment
|
Interest
Income
Recognized
|
||||||||||||||||
|
(In Thousands)
|
|||||||||||||||||||
With no specific related allowance recorded: | ||||||||||||||||||||
Commercial real estate
|
$ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
Residential real estate
|
392 | 392 | - | 392 | - | |||||||||||||||
Commercial
|
621 | 799 | - | 628 | - | |||||||||||||||
Real estate construction
|
- | - | - | - | - | |||||||||||||||
Consumer
|
- | - | - | - | - | |||||||||||||||
With a specific allowance recorded:
|
||||||||||||||||||||
Commercial real estate
|
3,600 | 3,827 | 798 | 3,628 | - | |||||||||||||||
Residential real estate
|
2,868 | 3,410 | 750 | 2,965 | - | |||||||||||||||
Commercial
|
- | - | - | - | - | |||||||||||||||
Real estate construction
|
- | - | - | - | - | |||||||||||||||
Consumer
|
- | - | - | - | - | |||||||||||||||
Total:
|
||||||||||||||||||||
Commercial real estate
|
$ | 3,600 | $ | 3,827 | $ | 798 | $ | 3,628 | $ | - | ||||||||||
Residential real estate
|
$ | 3,260 | $ | 3,802 | $ | 750 | $ | 3,357 | $ | - | ||||||||||
Commercial
|
$ | 621 | $ | 799 | $ | - | $ | 628 | $ | - | ||||||||||
Real estate construction
|
$ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
Consumer
|
$ | - | $ | - | $ | - | $ | - | $ | - |
Impaired Loans
|
||||||||||||||||||||
Year Ended December 31, 2010
|
||||||||||||||||||||
Recorded Investment
|
Unpaid Principal
Balance
|
Related Allowance
|
Average Recorded
Investment
|
Interest Income
Recognized
|
||||||||||||||||
|
(In Thousands)
|
|||||||||||||||||||
With no specific related allowance recorded:
|
||||||||||||||||||||
Commercial real estate
|
$ | 3,041 | $ | 3,041 | $ | - | $ | 3,110 | $ | - | ||||||||||
Residential real estate
|
- | - | - | - | - | |||||||||||||||
Commercial
|
900 | 900 | - | 306 | - | |||||||||||||||
Real estate construction
|
- | - | - | - | - | |||||||||||||||
Consumer
|
- | - | - | - | - | |||||||||||||||
With a specific allowance recorded:
|
||||||||||||||||||||
Commercial real estate
|
3,671 | 3,671 | 960 | 3,722 | - | |||||||||||||||
Residential real estate
|
949 | 949 | 283 | 1,020 | - | |||||||||||||||
Commercial
|
- | - | - | - | - | |||||||||||||||
Real estate construction
|
- | - | - | - | - | |||||||||||||||
Consumer
|
- | - | - | - | - | |||||||||||||||
Total:
|
||||||||||||||||||||
Commercial real estate
|
$ | 6,712 | $ | 6,712 | $ | 960 | $ | 6,832 | $ | - | ||||||||||
Residential real estate
|
$ | 949 | $ | 949 | $ | 283 | $ | 1,020 | $ | - | ||||||||||
Commercial
|
$ | 900 | $ | 900 | $ | - | $ | 306 | $ | - | ||||||||||
Real estate construction
|
$ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
Consumer
|
$ | - | $ | - | $ | - | $ | - | $ | - |
2011
|
Commercial
|
Mortgage
|
Consolidated
|
|||||||||||||||||
(In Thousands)
|
Banking
|
Banking
|
Other
|
Eliminations
|
Totals
|
|||||||||||||||
Revenues:
|
||||||||||||||||||||
Interest income
|
$ | 8,408 | $ | 342 | $ | 2 | $ | (224 | ) | $ | 8,528 | |||||||||
Gain on sale of loans
|
- | 7,383 | - | - | 7,383 | |||||||||||||||
Other revenues
|
1,956 | (1,278 | ) | 456 | (416 | ) | 718 | |||||||||||||
Total revenues
|
10,364 | 6,447 | 458 | (640 | ) | 16,629 | ||||||||||||||
Expenses:
|
||||||||||||||||||||
Interest expense
|
1,574 | 174 | 159 | (225 | ) | 1,682 | ||||||||||||||
Salaries and employee benefits
|
2,428 | 3,173 | 276 | - | 5,877 | |||||||||||||||
Other
|
2,236 | 2,352 | 751 | (415 | ) | 4,924 | ||||||||||||||
Total expenses
|
6,238 | 5,699 | 1,186 | (640 | ) | 12,483 | ||||||||||||||
Income (loss) before income taxes
|
$ | 4,126 | $ | 748 | $ | (728 | ) | $ | - | $ | 4,146 | |||||||||
Total assets
|
$ | 696,532 | $ | 59,838 | $ | 10,692 | $ | (54,046 | ) | $ | 713,016 |
2010
|
Commercial
|
Mortgage |
Consolidated
|
|||||||||||||||||
(In Thousands)
|
Banking
|
Banking |
Other
|
Eliminations
|
Totals
|
|||||||||||||||
Revenues:
|
||||||||||||||||||||
Interest income
|
$ | 8,414 | $ | 572 | $ | 7 | $ | (335 | ) | $ | 8,658 | |||||||||
Gain on sale of loans
|
84 | 8,314 | - | - | 8,398 | |||||||||||||||
Other revenues
|
795 | (1,789 | ) | 293 | (420 | ) | (1,121 | ) | ||||||||||||
Total revenues
|
9,293 | 7,097 | 300 | (755 | ) | 15,935 | ||||||||||||||
Expenses:
|
||||||||||||||||||||
Interest expense
|
2,564 | 281 | 160 | (334 | ) | 2,671 | ||||||||||||||
Salaries and employee benefits
|
1,992 | 3,256 | 116 | - | 5,364 | |||||||||||||||
Other
|
2,151 | 2,986 | 510 | (421 | ) | 5,226 | ||||||||||||||
Total expenses
|
6,707 | 6,523 | 786 | (755 | ) | 13,261 | ||||||||||||||
Income (loss) before income taxes
|
$ | 2,586 | $ | 574 | $ | (486 | ) | $ | - | $ | 2,674 | |||||||||
Total assets
|
$ | 759,398 | $ | 70,444 | $ | 46,677 | $ | (85,949 | ) | $ | 790,570 |
2011
|
Commercial
|
Mortgage
|
Consolidated
|
|||||||||||||||||
(In Thousands)
|
Banking
|
Banking
|
Other
|
Eliminations
|
Totals
|
|||||||||||||||
Revenues:
|
||||||||||||||||||||
Interest income
|
$ | 16,845 | $ | 691 | $ | 5 | $ | (443 | ) | $ | 17,098 | |||||||||
Gain on sale of loans
|
286 | 12,613 | - | - | 12,899 | |||||||||||||||
Other revenues
|
2,627 | (1,484 | ) | 744 | (846 | ) | 1,041 | |||||||||||||
Total revenues
|
19,758 | 11,820 | 749 | (1,289 | ) | 31,038 | ||||||||||||||
Expenses:
|
||||||||||||||||||||
Interest expense
|
3,476 | 337 | 316 | (444 | ) | 3,685 | ||||||||||||||
Salaries and employee benefits
|
4,819 | 6,047 | 404 | - | 11,270 | |||||||||||||||
Other
|
3,989 | 3,977 | 1,264 | (845 | ) | 8,385 | ||||||||||||||
Total expenses
|
12,284 | 10,361 | 1,984 | (1,289 | ) | 23,340 | ||||||||||||||
Income (loss) before income taxes
|
$ | 7,474 | $ | 1,459 | $ | (1,235 | ) | $ | - | $ | 7,698 | |||||||||
Total assets
|
$ | 696,532 | $ | 59,838 | $ | 10,692 | $ | (54,046 | ) | $ | 713,016 |
2010
|
Commercial
|
Mortgage
|
Consolidated
|
|||||||||||||||||
(In Thousands)
|
Banking
|
Banking |
Other
|
Eliminations
|
Totals
|
|||||||||||||||
Revenues:
|
||||||||||||||||||||
Interest income
|
$ | 16,480 | $ | 961 | $ | 22 | $ | (546 | ) | $ | 16,917 | |||||||||
Gain on sale of loans
|
84 | 13,554 | - | - | 13,638 | |||||||||||||||
Other revenues
|
1,189 | (1,273 | ) | 586 | (840 | ) | (338 | ) | ||||||||||||
Total revenues
|
17,753 | 13,242 | 608 | (1,386 | ) | 30,217 | ||||||||||||||
Expenses:
|
||||||||||||||||||||
Interest expense
|
5,152 | 419 | 320 | (546 | ) | 5,345 | ||||||||||||||
Salaries and employee benefits
|
4,369 | 6,131 | 116 | - | 10,616 | |||||||||||||||
Other
|
4,185 | 5,340 | 990 | (840 | ) | 9,675 | ||||||||||||||
Total expenses
|
13,706 | 11,890 | 1,426 | (1,386 | ) | 25,636 | ||||||||||||||
Income (loss) before income taxes
|
$ | 4,047 | $ | 1,352 | $ | (818 | ) | $ | - | $ | 4,581 | |||||||||
Total assets
|
$ | 759,398 | $ | 70,444 | $ | 46,677 | $ | (85,949 | ) | $ | 790,570 |
Fair Value Measurement
|
||||||||||||||||
at June 30, 2011 Using
|
||||||||||||||||
(In Thousands)
|
||||||||||||||||
Description
|
Carrying
Value |
Quoted Prices in
Active Markets for Identical Assets (Level 1) |
Other Observable Inputs (Level 2)
|
Significant Unobservable
Inputs (Level 3) |
||||||||||||
Financial Assets-Recurring
|
||||||||||||||||
Available for sale investment securities
|
$ | 91,516 | $ | - | $ | 91,516 | $ | - | ||||||||
Residential loans held for sale
|
56,519 | - | 56,519 | - | ||||||||||||
Derivative assets
|
348 | - | - | 348 | ||||||||||||
Total Financial Assets-Recurring
|
$ | 148,383 | $ | - | $ | 148,035 | $ | 348 | ||||||||
Financial Liabilities-Recurring
|
||||||||||||||||
Derivative liabilities
|
$ | - | $ | - | $ | - | $ | - | ||||||||
Total Financial Liabilities-Recurring
|
$ | - | $ | - | $ | - | $ | - | ||||||||
Financial Assets-Non-Recurring
|
||||||||||||||||
Impaired loans
(1)
|
$ | 7,481 | $ | - | $ | - | $ | 7,481 | ||||||||
Other real estate owned
(2)
|
590 | - | 590 | - | ||||||||||||
Total Financial Assets-Non-Recurring
|
$ | 8,071 | $ | - | $ | 590 | $ | 7,481 |
Fair Value Measurement
|
||||||||||||||||
at December 31, 2010 Using
|
||||||||||||||||
(In Thousands)
|
||||||||||||||||
Description
|
Carrying
Value
|
Quoted Prices in
Active Markets
for Identical
Assets (Level 1)
|
Other Observable
Inputs (Level 2)
|
Significant
Unobservable
Inputs (Level 3)
|
||||||||||||
Financial Assets-Recurring
|
||||||||||||||||
Available for sale investment securities
|
$ | 124,307 | $ | - | $ | 124,307 | $ | - | ||||||||
Residential loans held for sale
|
82,244 | - | 82,244 | - | ||||||||||||
Derivative assets
|
318 | - | - | 318 | ||||||||||||
Total Financial Assets-Recurring
|
$ | 206,869 | $ | - | $ | 206,551 | $ | 318 | ||||||||
Financial Liabilities-Recurring
|
||||||||||||||||
Derivative liabilities
|
$ | 38 | $ | - | $ | - | $ | 38 | ||||||||
Total Financial Liabilities-Recurring
|
$ | 38 | $ | - | $ | - | $ | 38 | ||||||||
Financial Assets-Non-Recurring
|
||||||||||||||||
Impaired loans
(1)
|
$ | 8,561 | $ | - | $ | - | $ | 8,561 | ||||||||
Other real estate owned
(2)
|
1,859 | - | 1,859 | - | ||||||||||||
Total Financial Assets-Non-Recurring
|
$ | 10,420 | $ | - | $ | 1,859 | $ | 8,561 |
(1)
|
Represents the carrying value of loans for which adjustments are based on the appraised value of the collateral.
|
(2)
|
Represents appraised value and realtor comparables less estimated selling expenses.
|
Net Derivatives
|
||||
(In Thousands)
|
||||
Balance March 31, 2011
|
$ | 323 | ||
Realized and unrealized gains (losses) included in earnings
|
25 | |||
Unrealized gains (losses) included in other comprehensive income
|
- | |||
Purchases, settlements, paydowns, and maturities
|
- | |||
Transfer into Level 3
|
- | |||
Balance June 30, 2011
|
$ | 348 |
Net Derivatives
|
||||
(In Thousands)
|
||||
Balance December 31, 2010
|
$ | 280 | ||
Realized and unrealized gains (losses) included in earnings
|
68 | |||
Unrealized gains (losses) included in other comprehensive income
|
- | |||
Purchases, settlements, paydowns, and maturities
|
- | |||
Transfer into Level 3
|
- | |||
Balance June 30, 2011
|
$ | 348 |
(In Thousands)
|
Aggregate
Fair Value
|
Difference
|
Contractual
Principal
|
|||||||||
Residential mortgage loans held for sale
|
$ | 56,519 | $ | 2,044 | $ | 54,475 |
June 30, 2011
|
December 31, 2010
|
|||||||||||||||
Carrying
|
Fair
|
Carrying
|
Fair
|
|||||||||||||
Amount
|
Value
|
Amount
|
Value
|
|||||||||||||
|
(In Thousands)
|
|||||||||||||||
Financial assets:
|
||||||||||||||||
Cash and short-term investments
|
$ | 22,653 | $ | 22,653 | $ | 111,907 | $ | 111,907 | ||||||||
Securities available for sale
|
91,516 | 91,516 | 124,307 | 124,307 | ||||||||||||
Restricted stock
|
5,007 | 5,007 | 4,438 | 4,438 | ||||||||||||
Loans held for sale
|
56,519 | 56,519 | 82,244 | 82,244 | ||||||||||||
Loans, net of allowance
|
509,617 | 510,912 | 481,002 | 493,169 | ||||||||||||
Derivatives
|
786 | 786 | 318 | 318 | ||||||||||||
Total financial assets
|
$ | 686,098 | $ | 687,393 | $ | 804,216 | $ | 816,383 | ||||||||
Financial liabilities:
|
||||||||||||||||
Deposits
|
$ | 507,913 | $ | 505,649 | $ | 627,848 | $ | 626,606 | ||||||||
Short-term borrowings
|
107,457 | 107,806 | 80,348 | 81,513 | ||||||||||||
Long-term borrowings
|
5,928 | 6,135 | 37,034 | 37,155 | ||||||||||||
Subordinated debentures
|
6,186 | 6,242 | 6,186 | 6,242 | ||||||||||||
Derivatives
|
438 | 438 | 38 | 38 | ||||||||||||
Total financial liabilities
|
$ | 627,922 | $ | 626,270 | $ | 751,454 | $ | 751,554 |
Six months ended June 30,
|
Year ended
|
|||||||||||
2011
|
2010
|
December 31, 2010
|
||||||||||
(In Thousands) | ||||||||||||
Allowance for losses on mortgage loans sold -beginning of period
|
$ | 1,991 | $ | 3,332 | $ | 3,332 | ||||||
Provision charged to operating expense
|
289 | 1,100 | 3,836 | |||||||||
Recoveries
|
17 | 18 | 68 | |||||||||
Charge-offs
|
(11 | ) | (820 | ) | (5,245 | ) | ||||||
Allowance for losses on mortgage loans sold - end of period
|
$ | 2,286 | $ | 3,630 | $ | 1,991 |
June 30, 2011
|
December 31, 2010
|
|||||||
|
(Dollars In Thousands)
|
|||||||
Non-accrual and restructured loans:
|
||||||||
Commercial real estate owner occupied
|
$ | 3,258 | $ | 6,345 | ||||
Commercial real estate income producing
|
342 | 367 | ||||||
Residential real estate
|
3,260 | 949 | ||||||
Commercial
|
621 | 900 | ||||||
Real estate construction
|
- | - | ||||||
Consumer
|
- | - | ||||||
Total non-accrual and restructured loans
|
7,481 | 8,561 | ||||||
Other real estate owned ("OREO")
|
590 | 1,859 | ||||||
Total non-performing assets
|
$ | 8,071 | $ | 10,420 | ||||
Ratio of non-performing assets to:
|
||||||||
Total loans plus OREO
|
1.55 | % | 2.11 | % | ||||
Total Assets
|
1.13 | % | 1.25 | % | ||||
Accruing Past due loans:
|
||||||||
90 or more days past due
|
$ | - | $ | 333 |
June 30,
|
December 31,
|
|||||||||
2011
|
2010
|
|||||||||
(In Thousands)
|
||||||||||
Tier 1 Capital:
|
||||||||||
Common stock
|
$ | 8,600 | $ | 8,664 | ||||||
Capital surplus
|
17,419 | 17,794 | ||||||||
Retained earnings
|
51,946 | 47,530 | ||||||||
Less: Net unrealized loss on equity securities
|
(2 | ) | (5 | ) | ||||||
Subordinated debentures
|
6,000 | 6,000 | ||||||||
Less: Dissallowed servicing assets
|
(136 | ) | (163 | ) | ||||||
Total Tier 1 capital
|
83,827 | 79,820 | ||||||||
Subordinated debentures not included in Tier 1
|
- | - | ||||||||
Allowance for loan losses
|
7,583 | 7,049 | ||||||||
Unrealized gain on available for sale equity securities
|
- | - | ||||||||
7,583 | 7,049 | |||||||||
Total risk based capital
|
$ | 91,410 | $ | 86,869 | ||||||
Risk weighted assets
|
$ | 602,872 | $ | 560,112 | ||||||
Quarterly average assets
|
$ | 706,431 | $ | 834,810 | ||||||
Regulatory
|
||||||||||
Capital Ratios:
|
Minimum
|
|||||||||
Tier 1 risk based capital ratio
|
13.90 | % | 14.25 | % |
4.00
|
% | ||||
Total risk based capital ratio
|
15.16 | % | 15.51 | % |
8.00
|
% | ||||
Leverage ratio
|
11.87 | % | 9.56 | % |
4.00
|
% |
Three Months Ended June 30,
|
||||||||||||
2011 compared to 2010
|
||||||||||||
Change Due To:
|
||||||||||||
Increase /
|
||||||||||||
(Decrease)
|
Volume
|
Rate
|
||||||||||
(In Thousands)
|
||||||||||||
Interest Earning Assets:
|
||||||||||||
Securities
|
$ | (24 | ) | $ | 24 | $ | (48 | ) | ||||
Loans held for sale
|
(230 | ) | (185 | ) | (45 | ) | ||||||
Loans
|
185 | 594 | (409 | ) | ||||||||
Interest-bearing deposits
|
(60 | ) | (60 | ) | - | |||||||
Total increase (decrease) in interest income
|
(129 | ) | 373 | (502 | ) | |||||||
Interest-Bearing Liabilities:
|
||||||||||||
Interest-bearing demand deposits
|
(34 | ) | (19 | ) | (15 | ) | ||||||
Money market deposit accounts
|
(235 | ) | (60 | ) | (175 | ) | ||||||
Savings accounts
|
(7 | ) | (2 | ) | (5 | ) | ||||||
Time deposits
|
(594 | ) | (430 | ) | (164 | ) | ||||||
Total interest-bearing deposits
|
(870 | ) | (511 | ) | (359 | ) | ||||||
FHLB Advances
|
(87 | ) | 66 | (152 | ) | |||||||
Securities sold under agreements to repurchase
|
(11 | ) | 10 | (21 | ) | |||||||
Other short-term borrowings
|
2 | 26 | (24 | ) | ||||||||
Long-term borrowings
|
(22 | ) | (19 | ) | (3 | ) | ||||||
FDIC term note
|
- | - | - | |||||||||
Subordinated debentures
|
(1 | ) | - | (1 | ) | |||||||
Total decrease in interest expense
|
(989 | ) | (428 | ) | (560 | ) | ||||||
Increase in net interest income
|
$ | 860 | $ | 801 | $ | 58 |
Six Months Ended June 30,
|
||||||||||||
2011 compared to 2010
|
||||||||||||
Change Due To:
|
||||||||||||
Increase /
|
||||||||||||
(Decrease)
|
Volume
|
Rate
|
||||||||||
(In Thousands)
|
||||||||||||
Interest Earning Assets:
|
||||||||||||
Securities
|
$ | 259 | $ | 433 | $ | (174 | ) | |||||
Loans held for sale
|
(270 | ) | (218 | ) | (52 | ) | ||||||
Loans
|
235 | 878 | (643 | ) | ||||||||
Interest-bearing deposits
|
(42 | ) | (54 | ) | 12 | |||||||
Total increase (decrease) in interest income
|
182 | 1,039 | (857 | ) | ||||||||
Interest-Bearing Liabilities:
|
||||||||||||
Interest-bearing demand deposits
|
(50 | ) | (21 | ) | (29 | ) | ||||||
Money market deposit accounts
|
(434 | ) | (79 | ) | (355 | ) | ||||||
Savings accounts
|
(16 | ) | (4 | ) | (12 | ) | ||||||
Time deposits
|
(827 | ) | (69 | ) | (758 | ) | ||||||
Total interest-bearing deposits
|
(1,327 | ) | (173 | ) | (1,154 | ) | ||||||
FHLB Advances
|
(274 | ) | 18 | (292 | ) | |||||||
Securities sold under agreements to repurchase
|
(21 | ) | 20 | (41 | ) | |||||||
Other short-term borrowings
|
16 | 56 | (40 | ) | ||||||||
Long-term borrowings
|
(54 | ) | (67 | ) | 13 | |||||||
FDIC term note
|
- | - | - | |||||||||
Subordinated debentures
|
- | - | - | |||||||||
Total decrease in interest expense
|
(1,660 | ) | (146 | ) | (1,514 | ) | ||||||
Increase in net interest income
|
$ | 1,842 | $ | 1,185 | $ | 657 |
Three Months
|
||||||||||||||||||||||||
Ended June 30,
|
||||||||||||||||||||||||
2011
|
2010
|
|||||||||||||||||||||||
Average
|
Income /
|
Yield /
|
Average
|
Income /
|
Yield /
|
|||||||||||||||||||
Balance
|
Expense
|
Rate
|
Balance
|
Expense
|
Rate
|
|||||||||||||||||||
(Dollars In Thousands)
|
||||||||||||||||||||||||
Assets:
|
||||||||||||||||||||||||
Interest earning assets:
|
||||||||||||||||||||||||
Securities
(1)
|
$ | 118,506 | $ | 580 | 1.96 | % | $ | 113,784 | $ | 604 | 2.12 | % | ||||||||||||
Loans Held for Sale
|
29,348 | 342 | 4.66 | % | 44,984 | 572 | 5.09 | % | ||||||||||||||||
Loans
(2)
|
508,010 | 7,590 | 5.98 | % | 469,122 | 7,405 | 6.31 | % | ||||||||||||||||
Interest bearing balances and federal funds sold
|
28,575 | 17 | 0.24 | % | 128,864 | 77 | 0.24 | % | ||||||||||||||||
Total interest earning assets
|
684,439 | 8,529 | 4.98 | % | 756,754 | 8,658 | 4.58 | % | ||||||||||||||||
Non-interest earning assets:
|
||||||||||||||||||||||||
Cash and due from banks
|
10,870 | 8,885 | ||||||||||||||||||||||
Premises, land and equipment
|
8,843 | 8,674 | ||||||||||||||||||||||
Other assets
|
13,204 | 32,781 | ||||||||||||||||||||||
Less: allowance for loan losses
|
(10,789 | ) | (9,056 | ) | ||||||||||||||||||||
Total non-interest earning assets
|
22,128 | 41,284 | ||||||||||||||||||||||
Total Assets
|
$ | 706,567 | $ | 798,038 | ||||||||||||||||||||
Liabilities and Shareholders' Equity:
|
||||||||||||||||||||||||
Interest bearing liabilities:
|
||||||||||||||||||||||||
Interest-bearing demand deposits
|
$ | 23,431 | $ | 26 | 0.44 | % | $ | 37,501 | $ | 60 | 0.64 | % | ||||||||||||
Money market deposit accounts
|
108,988 | 156 | 0.57 | % | 132,409 | 391 | 1.18 | % | ||||||||||||||||
Savings accounts
|
2,848 | 2 | 0.28 | % | 3,942 | 9 | 0.91 | % | ||||||||||||||||
Time deposits
|
252,211 | 995 | 1.58 | % | 357,590 | 1,589 | 1.78 | % | ||||||||||||||||
Total interest-bearing deposits
|
387,478 | 1,179 | 1.22 | % | 531,442 | 2,049 | 1.54 | % | ||||||||||||||||
FHLB Advances
|
26,484 | 24 | 0.36 | % | 11,662 | 111 | 3.81 | % | ||||||||||||||||
Securities sold under agreements to repurchase and federal funds purchased
|
37,097 | 19 | 0.20 | % | 25,307 | 30 | 0.47 | % | ||||||||||||||||
Other short-term borrowings
|
37,142 | 56 | 0.60 | % | 22,703 | 54 | 0.95 | % | ||||||||||||||||
FHLB long-term borrowings
|
6,466 | 55 | 3.40 | % | 8,681 | 77 | 3.55 | % | ||||||||||||||||
FDIC term note
|
29,997 | 297 | 3.96 | % | 29,997 | 297 | 3.96 | % | ||||||||||||||||
Subordinated Debentures
|
6,186 | 52 | 3.36 | % | 6,186 | 53 | 3.43 | % | ||||||||||||||||
Total interest-bearing liabilities
|
530,850 | 1,682 | 1.27 | % | 635,978 | 2,671 | 1.68 | % | ||||||||||||||||
Non-interest bearing liabilities:
|
||||||||||||||||||||||||
Demand deposits
|
94,179 | 73,409 | ||||||||||||||||||||||
Other liabilities
|
5,643 | 18,539 | ||||||||||||||||||||||
Total liabilities
|
630,672 | 727,926 | ||||||||||||||||||||||
Shareholders' Equity
|
75,893 | 70,112 | ||||||||||||||||||||||
Total Liabilities and Shareholders' Equity:
|
$ | 706,565 | $ | 798,038 | ||||||||||||||||||||
Interest Spread
(3)
|
3.72 | % | 2.90 | % | ||||||||||||||||||||
Net Interest Margin
(4)
|
$ | 6,847 | 4.00 | % | $ | 5,987 | 3.16 | % |
Six Month Ended June 30,
|
||||||||||||||||||||||||
2011
|
2010
|
|||||||||||||||||||||||
Average
|
Income /
|
Yield /
|
Average
|
Income /
|
Yield /
|
|||||||||||||||||||
Balance
|
Expense
|
Rate
|
Balance
|
Expense
|
Rate
|
|||||||||||||||||||
(Dollars In Thousands)
|
||||||||||||||||||||||||
Assets:
|
||||||||||||||||||||||||
Interest earning assets:
|
||||||||||||||||||||||||
Securities
(1)
|
$ | 126,848 | $ | 1,213 | 1.91 | % | $ | 83,596 | $ | 954 | 2.28 | % | ||||||||||||
Loans held for sale
|
29,186 | 691 | 4.74 | % | 38,293 | 961 | 5.02 | % | ||||||||||||||||
Loans
(2)
|
501,501 | 15,123 | 6.03 | % | 472,897 | 14,888 | 6.30 | % | ||||||||||||||||
Interest-bearing balances and federal funds sold
|
54,269 | 72 | 0.27 | % | 96,021 | 114 | 0.24 | % | ||||||||||||||||
Total interest earning assets
|
711,804 | 17,099 | 4.80 | % | 690,807 | 16,917 | 4.90 | % | ||||||||||||||||
Non-interest earning assets:
|
||||||||||||||||||||||||
Cash and due from banks
|
11,529 | 8,157 | ||||||||||||||||||||||
Premises, land, and equipment
|
8,885 | 8,702 | ||||||||||||||||||||||
Other assets
|
13,423 | 26,981 | ||||||||||||||||||||||
Less: allowance for loan losses
|
(10,694 | ) | (9,213 | ) | ||||||||||||||||||||
Total noninterest earning assets
|
23,143 | 34,627 | ||||||||||||||||||||||
Total Assets
|
$ | 734,947 | $ | 725,434 | ||||||||||||||||||||
Liabilities and Shareholders' Equity:
|
||||||||||||||||||||||||
Interest-bearing deposits:
|
||||||||||||||||||||||||
Interest-bearing demand deposits
|
$ | 23,428 | $ | 53 | 0.45 | % | $ | 30,531 | $ | 103 | 0.67 | % | ||||||||||||
Money market deposit accounts
|
116,540 | 350 | 0.60 | % | 131,103 | 784 | 1.20 | % | ||||||||||||||||
Savings accounts
|
2,876 | 3 | 0.21 | % | 4,038 | 19 | 0.94 | % | ||||||||||||||||
Time deposits
|
294,013 | 2,284 | 1.55 | % | 300,868 | 3,111 | 2.07 | % | ||||||||||||||||
Total interest-bearing deposits
|
436,857 | 2,690 | 1.23 | % | 466,540 | 4,017 | 1.72 | % | ||||||||||||||||
Borrowings:
|
||||||||||||||||||||||||
FHLB Advances
|
15,564 | 39 | 0.50 | % | 14,668 | 313 | 4.27 | % | ||||||||||||||||
Securities sold under agreements to repurchase and federal fund purchased
|
36,583 | 37 | 0.20 | % | 24,834 | 58 | 0.47 | % | ||||||||||||||||
Other short-term borrowings
|
34,643 | 105 | 0.61 | % | 18,906 | 89 | 0.94 | % | ||||||||||||||||
FHLB long-term borrowings
|
6,741 | 117 | 3.47 | % | 10,652 | 171 | 3.21 | % | ||||||||||||||||
FDIC term note
|
29,999 | 592 | 3.95 | % | 29,997 | 592 | 3.95 | % | ||||||||||||||||
Subordinated debentures
|
6,186 | 105 | 3.39 | % | 6,186 | 105 | 3.39 | % | ||||||||||||||||
Total borrowings
|
129,716 | 995 | 1.53 | % | 105,243 | 1,328 | 2.52 | % | ||||||||||||||||
Total interest-bearing liabilities
|
566,573 | 3,685 | 1.30 | % | 571,783 | 5,345 | 1.87 | % | ||||||||||||||||
Noninterest-bearing liabilities:
|
||||||||||||||||||||||||
Demand deposits
|
87,226 | 69,970 | ||||||||||||||||||||||
Other liabilities
|
6,631 | 13,583 | ||||||||||||||||||||||
Total Liabilities
|
660,430 | 655,336 | ||||||||||||||||||||||
Shareholders' Equity
|
74,517 | 70,098 | ||||||||||||||||||||||
Total Liabilities and Shareholders' Equity:
|
$ | 734,947 | $ | 725,434 | ||||||||||||||||||||
Interest spread
(3)
|
3.50 | % | 3.03 | % | ||||||||||||||||||||
Net interest margin
(4)
|
$ | 13,414 | 3.77 | % | $ | 11,572 | 3.35 | % |
Six Months Ended June 30,
|
||||||||
2011
|
2010
|
|||||||
(In Thousands)
|
||||||||
Advertising and promotional
|
$ | 1,159 | $ | 1,330 | ||||
Management fees
|
598 | 1,038 | ||||||
FDIC insurance
|
407 | 137 | ||||||
Investor fees
|
364 | 374 | ||||||
Business and franchise tax
|
309 | 229 | ||||||
Accounting and auditing
|
302 | 307 | ||||||
Provision for losses on mortgage loans sold
|
289 | 1,100 | ||||||
Data processing
|
258 | 264 | ||||||
Consulting fees
|
209 | 184 | ||||||
OREO Expense
|
395 | 676 | ||||||
Credit report
|
134 | 184 | ||||||
Telephone
|
114 | 105 | ||||||
Regulatory Examination
|
96 | 84 | ||||||
Loan and collection
|
400 | 204 | ||||||
Other
|
1,787 | 1,383 | ||||||
Total other operating expense | $ | 6,821 | $ | 7,599 |
June 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
(Dollars In Thousands)
|
||||||||
Borrowings:
At Period End
|
||||||||
FHLB advances
|
$ | 30,000 | $ | 5,417 | ||||
FHLB long-term borrowings
|
5,929 | 7,036 | ||||||
Securities sold under agreements to repurchase and federal funds purchased
|
37,887 | 41,047 | ||||||
Other short-term borrowings
|
9,571 | 33,884 | ||||||
Subordinated debentures
|
6,186 | 6,186 | ||||||
FDIC term note
|
29,999 | 29,998 | ||||||
Total at period end
|
$ | 119,572 | $ | 123,568 |
Six Months Ended
June 30,
|
Year Ended
December 31,
|
|||||||
2011
|
2010
|
|||||||
(Dollars In Thousands)
|
||||||||
Borrowings:
Average Balances
|
||||||||
FHLB advances
|
$ | 15,564 | $ | 11,413 | ||||
FHLB long-term borrowings
|
6,741 | 9,239 | ||||||
Securities sold under agreements to repurchase and federal funds purchased
|
36,583 | 29,202 | ||||||
Other short-term borrowings
|
34,643 | 26,674 | ||||||
Subordinated debentures
|
6,186 | 6,186 | ||||||
FDIC term note
|
29,999 | 29,998 | ||||||
Total average balance
|
$ | 129,716 | $ | 112,712 |
Increase in Federal
Funds Target Rate
|
Hypothetical Percentage
Change in Earnings
|
Hypothetical Percentage
Change in Economic Value
of Equity
|
|||||||||
3.00 | % | 11.02 | % | -0.57 | % | ||||||
2.00 | % | 6.33 | % | 0.51 | % | ||||||
1.00 | % | 1.94 | % | 0.79 | % |
Issuer Purchases of Equity Securities
|
||||||||||||||||
(c) Total Number of
|
(d) Maximum Number
|
|||||||||||||||
Shares Purchased as
|
of Shares that may
|
|||||||||||||||
(a) Total Number of
|
(b) Average Price
|
Part of Publicly
|
yet be Purchased
|
|||||||||||||
Period
|
Shares Purchased
|
Paid Per Share
|
Announced Plan
|
Under the Plan
|
||||||||||||
April 1 - April 30, 2011
|
3,677 | $ | 7.05 | 3,677 | 1,094,692 | |||||||||||
May 1 - May 31, 2011
|
- | - | - | 1,094,692 | ||||||||||||
June 1 - June 30, 2011
|
32,040 | 7.39 | 32,040 | 1,062,652 | ||||||||||||
35,717 | $ | 7.36 | 35,717 | 1,062,652 |
Exhibit No.
|
Description
|
|
3.1
|
Amended and Restated Articles of Incorporation of Access National Corporation (incorporated by reference to Exhibit 3.1 to Form 8-K filed July 18, 2006 (file number 000-49929))
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3.1.1*
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Articles of Amendment to Amended and Restated Articles of Incorporation of Access National Corporation. | |
3.2
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Amended and Restated Bylaws of Access National Corporation (incorporated by reference to Exhibit 3.2 to Form 8-K filed October 24, 2007 (file number 000-49929))
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4.0
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Certain instruments relating to long-term debt as to which the total amount of securities authorized thereunder does not exceed 10% of Access National Corporation’s total assets have been omitted in accordance with Item 601(b)(4)(iii) of Regulation S-K. The registrant will furnish a copy of any such instrument to the Securities and Exchange Commission upon its request.
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31.1*
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CEO Certification Pursuant to Rule 13a-14(a)
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31.2*
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CFO Certification Pursuant to Rule 13a-14(a)
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32*
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CEO/CFO Certification Pursuant to § 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. § 1350)
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Access National Corporation | ||
(Registrant) | ||
Date:
August 15, 2011
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By:
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/s/ Michael W. Clarke
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Michael W. Clarke
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President and Chief Executive Officer
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(Principal Executive Officer)
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Date:
August 15, 2011
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By:
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/s/ Charles Wimer
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Charles Wimer
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Executive Vice President and Chief Financial Officer
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(Principal Financial & Accounting Officer)
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1.
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The name of the corporation is Access National Corporation (the “Corporation”)
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2.
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Article III of the Amended and Restated Articles of Incorporation of the Corporation (the “Articles of Incorporation”) is hereby amended to read as follows:
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3.
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The foregoing amendments were adopted by the Board of Directors on March 22, 2011.
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4.
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The amendments were proposed by the Board of Directors and submitted to the shareholders in accordance with the provisions of Title 13.1, Chapter 9 of the Code of Virginia, and:
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a.
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The designation, number of outstanding shares, and number of votes entitled to be cast by each voting group entitled to vote separately on the amendments were:
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Designation
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Number of outstanding shares
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Number of votes
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Common Stock
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10,330,508
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10,330,508
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b.
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And the total number of votes cast for and against the amendments by each voting group entitled to vote separately on the amendments were:
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Voting group
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Total votes
FOR
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Total votes
AGAINST
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Common Stock
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7,446,568
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338,549
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c.
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And the number cast for the amendments by each voting group was sufficient for approval by that voting group.
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/s/ Michael W. Clarke
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Michael W. Clarke
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President and Chief Executive Officer
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1.
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I have reviewed this quarterly report on Form 10-Q of Access National Corporation;
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2.
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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;
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3.
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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;
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4.
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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:
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(a)
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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;
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(b)
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designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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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
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(b)
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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.
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Date: August 15, 2011
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/s/ Michael W. Clarke
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Michael W. Clarke
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President and Chief Executive Officer
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(Principal Executive Officer)
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1.
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I have reviewed this quarterly report on Form 10-Q of Access National Corporation;
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2.
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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;
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3.
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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;
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4.
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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:
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(a)
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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;
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(b)
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designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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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
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(b)
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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.
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Date: August 15, 2011
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/s/ Charles Wimer
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Charles Wimer
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Executive Vice President and Chief
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Financial Officer
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(Principal Financial & Accounting Officer)
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1.
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The Report fully complies with the requirements of Section 15(d) of the Securities Exchange Act of 1934, as amended; and
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2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.
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/s/ Michael W. Clarke
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Michael W. Clarke
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President and Chief Executive Officer
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(Principal Executive Officer)
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August 15, 2011
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/s/ Charles Wimer
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Charles Wimer
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Executive Vice President and Chief Financial Officer
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(Principal Financial & Accounting Officer)
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August 15, 2011
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