[X]
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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OR
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[ ]
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Indiana
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35-2056949
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(State or other jurisdiction of
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(I.R.S. Employer Identification No.)
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incorporation or organization)
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220 Federal Drive, N.W., Corydon, Indiana
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47112
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Name of each exchange on which registered
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Common Stock, par value $0.01 per share
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The Nasdaq Stock Market LLC
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Part I
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Part II
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Part III
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Part IV
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At December 31,
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||||||||||||||||||||||||||||||||||||||||
2014
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2013
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2012
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2011
|
2010
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||||||||||||||||||||||||||||||||||||
Amount
|
Percent of Total
|
Amount
|
Percent of Total
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Amount
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Percent of
Total
|
Amount
|
Percent of Total
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Amount
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Percent of Total
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|||||||||||||||||||||||||||||||
(Dollars in thousands)
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||||||||||||||||||||||||||||||||||||||||
Mortgage Loans:
|
||||||||||||||||||||||||||||||||||||||||
Residential
(1)
|
$ | 106,679 | 34.61 | % | $ | 107,029 | 35.65 | % | $ | 108,097 | 37.37 | % | $ | 116,338 | 40.84 | % | $ | 130,143 | 43.11 | % | ||||||||||||||||||||
Land
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11,028 | 3.58 | 10,309 | 3.43 | 9,607 | 3.32 | 9,910 | 3.48 | 9,534 | 3.16 | ||||||||||||||||||||||||||||||
Commercial real estate
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78,314 | 25.40 | 76,496 | 25.48 | 68,731 | 23.76 | 57,680 | 20.25 | 59,901 | 19.84 | ||||||||||||||||||||||||||||||
Residential construction
(2)
|
10,347 | 3.36 | 14,423 | 4.80 | 12,753 | 4.41 | 10,988 | 3.86 | 8,151 | 2.70 | ||||||||||||||||||||||||||||||
Commercial real estate construction
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1,422 | 0.46 | 1,715 | 0.57 | 3,299 | 1.14 | 743 | 0.26 | 0 | 0.00 | ||||||||||||||||||||||||||||||
Total mortgage loans
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207,790 | 67.41 | 209,972 | 69.93 | 202,487 | 70.00 | 195,659 | 68.69 | 207,729 | 68.81 | ||||||||||||||||||||||||||||||
Consumer Loans:
|
||||||||||||||||||||||||||||||||||||||||
Home equity and second
mortgage loans
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37,513 | 12.17 | 34,815 | 11.60 | 36,962 | 12.78 | 38,641 | 13.57 | 43,046 | 14.26 | ||||||||||||||||||||||||||||||
Automobile loans
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25,274 | 8.20 | 23,983 | 7.99 | 21,922 | 7.58 | 20,627 | 7.24 | 19,384 | 6.42 | ||||||||||||||||||||||||||||||
Loans secured by savings accounts
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1,018 | 0.33 | 1,138 | 0.38 | 770 | 0.27 | 767 | 0.27 | 1,042 | 0.34 | ||||||||||||||||||||||||||||||
Unsecured loans
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3,316 | 1.07 | 3,541 | 1.18 | 3,191 | 1.10 | 3,126 | 1.10 | 3,076 | 1.02 | ||||||||||||||||||||||||||||||
Other
(3)
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5,075 | 1.65 | 4,824 | 1.61 | 5,303 | 1.84 | 5,312 | 1.86 | 5,732 | 1.90 | ||||||||||||||||||||||||||||||
Total consumer loans
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72,196 | 23.42 | 68,301 | 22.76 | 68,148 | 23.57 | 68,473 | 24.04 | 72,280 | 23.94 | ||||||||||||||||||||||||||||||
Commercial business loans
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28,282 | 9.17 | 21,956 | 7.31 | 18,612 | 6.43 | 20,722 | 7.27 | 21,911 | 7.25 | ||||||||||||||||||||||||||||||
Total gross loans
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308,268 | 100.00 | % | 300,229 | 100.00 | % | 289,247 | 100.00 | % | 284,854 | 100.00 | % | 301,920 | 100.00 | % | |||||||||||||||||||||||||
Less:
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||||||||||||||||||||||||||||||||||||||||
Due to borrowers on loans in process
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3,325 | 7,142 | 4,306 | 4,768 | 3,119 | |||||||||||||||||||||||||||||||||||
Deferred loan fees net of direct costs
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(506 | ) | (341 | ) | (202 | ) | (143 | ) | (222 | ) | ||||||||||||||||||||||||||||||
Allowance for loan losses
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4,846 | 4,922 | 4,736 | 4,182 | 4,473 | |||||||||||||||||||||||||||||||||||
Total loans, net
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$ | 300,603 | $ | 288,506 | $ | 280,407 | $ | 276,047 | $ | 294,550 |
(1)
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Includes conventional one- to four-family and multi-family residential loans.
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(2)
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Includes construction loans for which the Bank has committed to provide permanent financing.
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(3)
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Includes loans secured by lawn and farm equipment, mobile homes and other personal property.
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Within
One Year
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After
One Year
Through
3 Years
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After
3 Years
Through
5 Years
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After
5 Years
Through
10 Years
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After
10 Years
Through
15 Years
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After
15 Years
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Total
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||||||||||||||||||||||
(Dollars in thousands)
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||||||||||||||||||||||||||||
Mortgage loans:
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||||||||||||||||||||||||||||
Residential
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$ | 6,632 | $ | 14,299 | $ | 11,811 | $ | 29,292 | $ | 18,697 | $ | 25,948 | $ | 106,679 | ||||||||||||||
Commercial real estate and
land loans
(1)
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12,013 | 16,051 | 15,321 | 22,586 | 16,447 | 8,346 | 90,764 | |||||||||||||||||||||
Residential construction
(2)
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10,347 | 0 | 0 | 0 | 0 | 0 | 10,347 | |||||||||||||||||||||
Consumer loans
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17,253 | 23,229 | 8,556 | 15,820 | 7,273 | 65 | 72,196 | |||||||||||||||||||||
Commercial business
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13,951 | 6,015 | 2,886 | 2,303 | 1,991 | 1,136 | 28,282 | |||||||||||||||||||||
Total gross loans
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$ | 60,196 | $ | 59,594 | $ | 38,574 | $ | 70,001 | $ | 44,408 | $ | 35,495 | $ | 308,268 |
(1)
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Includes commercial real estate construction loans.
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(2)
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Includes construction loans for which the bank has committed to provide permanent financing.
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Fixed Rates
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Floating or Adjustable Rates
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|||||||
(Dollars in thousands)
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||||||||
Mortgage loans:
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||||||||
Residential
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$ | 57,661 | $ | 42,386 | ||||
Commercial real estate and land loans
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21,329 | 57,422 | ||||||
Residential construction
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0 | 0 | ||||||
Consumer loans
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27,424 | 27,519 | ||||||
Commercial business
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8,669 | 5,662 | ||||||
Total gross loans
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$ | 115,083 | $ | 132,989 |
At December 31,
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||||||||||||||||||||
2014
|
2013
|
2012
|
2011
|
2010
|
||||||||||||||||
(Dollars in thousands)
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||||||||||||||||||||
Loans accounted for on a nonaccrual basis:
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||||||||||||||||||||
Residential real estate
(1)
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$ | 919 | $ | 1,533 | $ | 2,773 | $ | 2,528 | $ | 3,230 | ||||||||||
Commercial real estate
(2)
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449 | 1,576 | 2,961 | 2,858 | 1,780 | |||||||||||||||
Commercial business
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1,642 | 1,898 | 1,776 | 1,928 | 2,148 | |||||||||||||||
Consumer
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129 | 252 | 73 | 87 | 390 | |||||||||||||||
Total
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3,139 | 5,259 | 7,583 | 7,401 | 7,548 | |||||||||||||||
Accruing loans past due 90 days or more:
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||||||||||||||||||||
Residential real estate
(1)
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68 | 180 | 215 | 143 | 334 | |||||||||||||||
Commercial real estate
(2)
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0 | 0 | 0 | 38 | 0 | |||||||||||||||
Commercial business
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0 | 0 | 0 | 0 | 20 | |||||||||||||||
Consumer
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17 | 47 | 74 | 182 | 25 | |||||||||||||||
Total
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85 | 227 | 289 | 363 | 379 | |||||||||||||||
Total nonperforming loans
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3,224 | 5,486 | 7,872 | 7,764 | 7,927 | |||||||||||||||
Foreclosed real estate, net
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78 | 466 | 295 | 661 | 591 | |||||||||||||||
Total nonperforming assets
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$ | 3,302 | $ | 5,952 | $ | 8,167 | $ | 8,425 | $ | 8,518 | ||||||||||
Total nonperforming loans to net loans
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1.07 | % | 1.90 | % | 2.81 | % | 2.81 | % | 2.69 | % | ||||||||||
Total nonperforming loans to total assets
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0.68 | % | 1.23 | % | 1.71 | % | 1.77 | % | 1.75 | % | ||||||||||
Total nonperforming assets to total assets
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0.70 | % | 1.34 | % | 1.78 | % | 1.92 | % | 1.88 | % |
(1) | Includes residential construction loans. |
(2) |
Includes commercial real estate construction and land loans.
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At December 31,
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
(Dollars in thousands)
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||||||||||||
Classified assets:
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||||||||||||
Loss
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$ | — | $ | — | $ | — | ||||||
Doubtful
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3,139 | 5,259 | 7,583 | |||||||||
Substandard
|
6,967 | 5,904 | 8,072 | |||||||||
Special mention
|
3,937 | 4,066 | 4,041 |
At December 31,
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
(Dollars in thousands)
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||||||||||||
Impaired loans with related allowance
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$ | 2,034 | $ | 3,129 | $ | 4,093 | ||||||
Impaired loans with no allowance
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3,005 | 3,791 | 3,711 | |||||||||
Total impaired loans
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$ | 5,039 | $ | 6,920 | $ | 7,804 | ||||||
Allowance for loan losses:
|
||||||||||||
Related to impaired loans
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$ | 1,351 | $ | 1,529 | $ | 1,652 | ||||||
Related to other loans
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3,495 | 3,393 | 3,084 |
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·
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Underwriting Standards – Management reviews the findings of periodic internal audit loan reviews, independent outsourced loan reviews and loan reviews performed by the banking regulators to evaluate the risk associated with changes in underwriting standards. At December 31, 2014, management assessed the risk associated with this component as neutral, requiring no adjustment to the historical loss factors.
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·
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Economic Conditions – Management analyzes trends in housing and unemployment data in the Harrison, Floyd and Clark counties of Indiana, the Company’s primary market area, to evaluate the risk associated with economic conditions. Due to a decrease in new home construction and an increase in unemployment in the Company’s primary market area, management assigned a risk factor of 1.20
for this component at December 31, 2014.
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·
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Past Due Loans – Management analyzes trends in past due loans for the Company to evaluate the risk associated with delinquent loans. In general, past due loan ratios have remained at elevated levels compared to historical amounts since 2007, and management assigned a risk factor of 1.20 for this component at December 31, 2014.
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·
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Other Internal and External Factors – This component includes management’s consideration of other qualitative factors such as loan portfolio composition. The Company has focused on origination of commercial business and real estate loans in an effort to convert the Company’s balance sheet from that of a traditional thrift institution to a commercial bank. In addition, the Company has increased its investment in mortgage loans in which it does not hold a first lien position. Commercial loans and second mortgage loans generally entail greater credit risk than residential mortgage loans secured by a first lien. As a result of changes in the loan portfolio composition, management assigned a risk factor of 1.30
for this component at December 31, 2014.
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Year Ended December 31,
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||||||||||||||||||||
2014
|
2013
|
2012
|
2011
|
2010
|
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
Allowance at beginning of period
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$ | 4,922 | $ | 4,736 | $ | 4,182 | $ | 4,473 | $ | 4,931 | ||||||||||
Provision for loan losses
|
190 | 725 | 1,525 | 1,825 | 2,037 | |||||||||||||||
5,112 | 5,461 | 5,707 | 6,298 | 6,968 | ||||||||||||||||
Recoveries:
|
||||||||||||||||||||
Residential real estate
|
7 | 60 | 16 | 18 | 9 | |||||||||||||||
Commercial real estate and land
|
6 | 17 | 1 | 0 | 4 | |||||||||||||||
Commercial business
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17 | 74 | 10 | 45 | 9 | |||||||||||||||
Consumer
|
324 | 202 | 200 | 248 | 214 | |||||||||||||||
Total recoveries
|
354 | 353 | 227 | 311 | 236 | |||||||||||||||
Charge-offs:
|
||||||||||||||||||||
Residential real estate
|
140 | 353 | 418 | 819 | 620 | |||||||||||||||
Commercial real estate and land
|
0 | 92 | 108 | 396 | 1,326 | |||||||||||||||
Commercial business
|
6 | 20 | 17 | 333 | 29 | |||||||||||||||
Consumer
|
474 | 427 | 655 | 879 | 756 | |||||||||||||||
Total charge-offs
|
620 | 892 | 1,198 | 2,427 | 2,731 | |||||||||||||||
Net (charge-offs) recoveries
|
(266 | ) | (539 | ) | (971 | ) | (2,116 | ) | (2,495 | ) | ||||||||||
Balance at end of period
|
$ | 4,846 | $ | 4,922 | $ | 4,736 | $ | 4,182 | $ | 4,473 | ||||||||||
Ratio of allowance to total loans
outstanding at the end of the period
|
1.57 | % | 1.64 | % | 1.64 | % | 1.47 | % | 1.48 | % | ||||||||||
Ratio of net charge-offs to average loans
outstanding during the period
|
0.09 | % | 0.19 | % | 0.35 | % | 0.72 | % | 0.80 | % |
At December 31,
|
||||||||||||||||||||||||||||||||||||||||
2014
|
2013
|
2012
|
2011
|
2010
|
||||||||||||||||||||||||||||||||||||
Amount
|
Percent of
Outstanding
Loans
in Category
|
Amount
|
Percent of
Outstanding
Loans
in Category
|
Amount
|
Percent of
Outstanding
Loans
in Category
|
Amount
|
Percent of
Outstanding
Loans
in Category
|
Amount
|
Percent of
Outstanding
Loans
in Category
|
|||||||||||||||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||||||||||||||||||
Residential real estate
(1)
|
$ | 669 | 37.97 | % | $ | 874 | 40.45 | % | $ | 922 | 41.78 | % | $ | 861 | 44.70 | % | $ | 1,045 | 45.81 | % | ||||||||||||||||||||
Commercial real estate
and land loans
(2)
|
1,702 | 29.44 | 1,436 | 29.48 | 1,381 | 28.22 | 1,362 | 23.99 | 1,106 | 23.00 | ||||||||||||||||||||||||||||||
Commercial business
|
1,480 | 9.17 | 1,446 | 7.31 | 1,223 | 6.43 | 1,160 | 7.27 | 1,251 | 7.25 | ||||||||||||||||||||||||||||||
Consumer
|
995 | 23.42 | 1,116 | 22.76 | 1,210 | 23.57 | 799 | 24.04 | 1,071 | 23.94 | ||||||||||||||||||||||||||||||
Total allowance for
loan losses
|
$ | 4,846 | 100.00 | % | $ | 4,922 | 100.00 | % | $ | 4,736 | 100.00 | % | $ | 4,182 | 100.00 | % | $ | 4,473 | 100.00 | % |
(1)
|
Includes residential construction loans.
|
(2)
|
Includes commercial real estate construction loans.
|
At December 31,
|
||||||||||||||||||||||||||||||||||||||||||||||||
2014
|
2013
|
2012
|
||||||||||||||||||||||||||||||||||||||||||||||
Fair
Value
|
Amortized
Cost
|
Percent
of
Portfolio
|
Weighted
Average
Yield
(1)
|
Fair
Value
|
Amortized
Cost
|
Percent
of
Portfolio
|
Weighted
Average
Yield
(1)
|
Fair
Value
|
Amortized
Cost
|
Percent
of
Portfolio
|
Weighted
Average
Yield
(1)
|
|||||||||||||||||||||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||||||||||||||||||||||||||
Securities Held to Maturity
(2)
|
||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage-backed securities
(3)
|
6 | 6 | 0.01 | 1.86 | % | 9 | 9 | 0.01 | 1.63 | % | 12 | 12 | 0.01 | 1.96 | % | |||||||||||||||||||||||||||||||||
$ | 6 | $ | 6 | 0.01 | % | $ | 9 | $ | 9 | 0.01 | % | $ | 12 | $ | 12 | 0.01 | % | |||||||||||||||||||||||||||||||
Securities Available for Sale
|
||||||||||||||||||||||||||||||||||||||||||||||||
Debt securities:
|
||||||||||||||||||||||||||||||||||||||||||||||||
U.S. agency:
|
||||||||||||||||||||||||||||||||||||||||||||||||
Due in one year or less
|
$ | 0 | $ | 0 | 0.00 | % | 0.00 | % | $ | 0 | $ | 0 | 0.00 | % | 0.00 | % | $ | 0 | $ | 0 | 0.00 | % | 0.00 | % | ||||||||||||||||||||||||
Due after one year through five years
|
9,626 | 9,629 | 9.73 | 0.98 | % | 7,005 | 7,045 | 6.41 | 0.92 | % | 7,509 | 7,445 | 6.19 | 1.27 | % | |||||||||||||||||||||||||||||||||
Due after five years through ten years
|
8,494 | 8,507 | 8.59 | 1.17 | % | 16,460 | 16,857 | 15.33 | 1.41 | % | 7,098 | 6,999 | 5.82 | 1.50 | % | |||||||||||||||||||||||||||||||||
Due after ten years through fifteen years
|
0 | 0 | 0.00 | 0.00 | % | 7,449 | 7,692 | 7.00 | 1.73 | % | 23,946 | 23,829 | 19.80 | 1.63 | % | |||||||||||||||||||||||||||||||||
Mortgage-backed securities and CMOs
(3)
|
46,681 | 46,596 | 47.07 | 1.84 | % | 38,610 | 38,894 | 35.38 | 1.85 | % | 45,866 | 45,220 | 37.58 | 1.84 | % | |||||||||||||||||||||||||||||||||
Municipal:
|
||||||||||||||||||||||||||||||||||||||||||||||||
Due in one year or less
|
121 | 120 | 0.12 | 5.40 | % | 0 | 0 | 0.00 | 0.00 | % | 507 | 505 | 0.42 | 5.51 | % | |||||||||||||||||||||||||||||||||
Due after one year through five years
|
6,160 | 6,049 | 6.11 | 3.15 | % | 2,019 | 1,961 | 1.78 | 4.01 | % | 1,074 | 1,018 | 0.85 | 5.55 | % | |||||||||||||||||||||||||||||||||
Due after five years through ten years
|
12,358 | 11,859 | 11.98 | 4.97 | % | 14,065 | 13,841 | 12.59 | 4.83 | % | 9,299 | 8,915 | 7.41 | 4.37 | % | |||||||||||||||||||||||||||||||||
Due after ten years
|
14,703 | 14,150 | 14.29 | 4.06 | % | 19,956 | 20,398 | 18.55 | 4.40 | % | 23,437 | 22,167 | 18.42 | 4.98 | % | |||||||||||||||||||||||||||||||||
Equity securities:
|
||||||||||||||||||||||||||||||||||||||||||||||||
Mutual funds
|
2,083 | 2,083 | 2.10 | N/A | 3,198 | 3,238 | 2.95 | N/A | 4,237 | 4,213 | 3.50 | N/A | ||||||||||||||||||||||||||||||||||||
$ | 100,226 | $ | 98,993 | 99.99 | % | $ | 108,762 | $ | 109,926 | 99.99 | % | $ | 122,973 | $ | 120,311 | 99.99 | % |
|
____________________________
|
(1)
|
Yields are calculated on a fully taxable equivalent basis using a marginal federal income tax rate of 34%. Weighted average yields are calculated using average prepayment rates for the most recent three-month period.
|
(2)
|
Securities held to maturity are carried at amortized cost.
|
(3)
|
The expected maturities of mortgage-backed securities and collateralized mortgage obligations (CMOs) may differ from contractual maturities because the mortgages underlying the obligations may be prepaid without penalty.
|
Maturity Period
|
Amount at
December 31, 2014
|
|||
(Dollars in thousands)
|
||||
Three months or less
|
$ | 2,844 | ||
Over three through six months
|
4,704 | |||
Over six through 12 months
|
4,126 | |||
Over 12 months
|
9,948 | |||
Total
|
$ | 21,622 |
At December 31,
|
||||||||||||||||||||||||||||||||||||
2014
|
2013
|
2012
|
||||||||||||||||||||||||||||||||||
Amount
|
Percent
of
Total
|
Increase/
(Decrease)
|
Amount
|
Percent
of
Total
|
Increase/
(Decrease)
|
Amount
|
Percent
of
Total
|
Increase/
(Decrease)
|
||||||||||||||||||||||||||||
Non-interest bearing demand
|
$ | 73,042 | 17.70 | % | $ | 16,606 | $ | 56,436 | 15.10 | % | $ | (279 | ) | $ | 56,715 | 14.76 | % | $ | 9,402 | |||||||||||||||||
NOW accounts
|
177,305 | 42.97 | 26,542 | 150,763 | 40.33 | (3,850 | ) | 154,613 | 40.23 | 12,762 | ||||||||||||||||||||||||||
Savings accounts
|
77,823 | 18.86 | 9,855 | 67,968 | 18.18 | 7,016 | 60,952 | 15.86 | 12,849 | |||||||||||||||||||||||||||
Money market accounts
|
8,580 | 2.08 | (2,741 | ) | 11,321 | 3.03 | 81 | 11,240 | 2.92 | (3,270 | ) | |||||||||||||||||||||||||
Fixed rate time deposits
which mature:
|
||||||||||||||||||||||||||||||||||||
Within one year
|
40,704 | 9.86 | (1,477 | ) | 42,181 | 11.28 | (11,192 | ) | 53,373 | 13.89 | 3,276 | |||||||||||||||||||||||||
After one year, but
within three years
|
26,329 | 6.38 | (7,613 | ) | 33,942 | 9.08 | (5,194 | ) | 39,136 | 10.18 | (10,174 | ) | ||||||||||||||||||||||||
After three years, but
within five years
|
8,738 | 2.12 | (2,373 | ) | 11,111 | 2.97 | 2,884 | 8,227 | 2.14 | (4,850 | ) | |||||||||||||||||||||||||
After five years
|
0 | 0.00 | 0 | 0 | 0.00 | (5 | ) | 5 | 0.00 | (33 | ) | |||||||||||||||||||||||||
Club accounts
|
115 | 0.03 | 7 | 108 | 0.03 | 26 | 82 | 0.02 | 7 | |||||||||||||||||||||||||||
Total
|
$ | 412,636 | 100.00 | % | $ | 38,806 | $ | 373,830 | 100.00 | % | $ | (10,513 | ) | $ | 384,343 | 100.00 | % | $ | 19,969 |
Amount Due
|
||||||||||||||||||||||||
Less Than
One Year
|
1 - 3
Years
|
3 - 5
Years
|
After 5
Years
|
Total
|
Percent
of Total
|
|||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||
0.00% — 0.99%
|
$ | 26,097 | $ | 21,282 | $ | 8,159 | $ | 0 | $ | 55,538 | 73.30 | % | ||||||||||||
1.00% — 1.99%
|
14,519 | 4,743 | 574 | 0 | 19,836 | 26.18 | ||||||||||||||||||
2.00% — 2.99%
|
88 | 297 | 0 | 0 | 385 | 0.51 | ||||||||||||||||||
3.00% — 3.99%
|
0 | 0 | 0 | 0 | 0 | 0.00 | ||||||||||||||||||
4.00% — 4.99%
|
0 | 7 | 5 | 0 | 12 | 0.01 | ||||||||||||||||||
5.00% — 5.99%
|
0 | 0 | 0 | 0 | 0 | 0.00 | ||||||||||||||||||
6.00% — 6.99%
|
0 | 0 | 0 | 0 | 0 | 0.00 | ||||||||||||||||||
Total
|
$ | 40,704 | $ | 26,329 | $ | 8,738 | $ | 0 | $ | 75,771 | 100.00 | % |
At or For the Years Ended December 31,
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
(Dollars in thousands)
|
||||||||||||
Maximum balance at any month end
|
$ | 6,500 | $ | 5,500 | $ | 10,925 | ||||||
Average balance
|
1,137 | 4,135 | 10,287 | |||||||||
Period end balance
|
0 | 5,500 | 5,100 | |||||||||
Weighted average interest rate: | ||||||||||||
At end of period
|
0.00 | % | 0.50 | % | 3.63 | % | ||||||
During the period
|
0.44 | % | 3.65 | % | 3.75 | % |
At or For the Years Ended December 31,
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
(Dollars in thousands)
|
||||||||||||
Maximum balance at any month end
|
$ | 10,617 | $ | 13,041 | $ | 14,092 | ||||||
Average balance
|
4,601 | 11,015 | 10,074 | |||||||||
Period end balance
|
0 | 9,310 | 14,092 | |||||||||
Weighted average interest rate: | ||||||||||||
At end of period
|
0.00 | % | 0.26 | % | 0.25 | % | ||||||
During the period
|
0.26 | % | 0.25 | % | 0.38 | % |
|
·
|
introduce a new capital measure called “Common Equity Tier 1” (“CET1”);
|
|
·
|
specify that Tier 1 capital consists of CET1 and “Additional Tier 1 capital” instruments meeting specified requirements;
|
|
·
|
define CET1 narrowly by requiring that most deductions/adjustments to regulatory capital measures be made to CET1 and not to the other components of capital; and
|
|
·
|
expand the scope of the deductions/adjustments as compared to existing regulations.
|
|
·
|
a minimum ratio of CET1 to risk-weighted assets of at least 4.5%, plus a 2.5% “capital conservation buffer” (which is added to the 4.5% CET1 ratio as that buffer is phased in, effectively resulting in a minimum ratio of CET1 to risk-weighted assets of at least 7% upon full implementation);
|
|
·
|
a minimum ratio of Tier 1 capital to risk-weighted assets of at least 6.0%, plus the capital conservation buffer (which is added to the 6.0% Tier 1 capital ratio as that buffer is phased in, effectively resulting in a minimum Tier 1 capital ratio of 8.5% upon full implementation);
|
|
·
|
a minimum ratio of Total capital (that is, Tier 1 plus Tier 2) to risk-weighted assets of at least 8.0%, plus the capital conservation buffer (which is added to the 8.0% total capital ratio as that buffer is phased in, effectively resulting in a minimum total capital ratio of 10.5% upon full implementation), and
|
|
·
|
a minimum leverage ratio of 4%, calculated as the ratio of Tier 1 capital to average assets (as compared to a current minimum leverage ratio of 3% for banking organizations that either have the highest supervisory rating or have implemented the appropriate federal regulatory authority’s risk-adjusted measure for market risk).
|
|
·
|
4.5% CET1 to risk-weighted assets;
|
|
·
|
6.0% Tier 1 capital to risk-weighted assets;
|
|
·
|
8.0% Total capital to risk-weighted assets.
|
|
·
|
Applying a 150% risk weight instead of a 100% risk weight for certain high volatility commercial real estate acquisition, development and construction loans;
|
|
·
|
Assigning a 150% risk weight to exposures (other than residential mortgage exposures) that are 90 days past due;
|
|
·
|
Providing for a 20% credit conversion factor for the unused portion of a commitment with an original maturity of one year or less that is not unconditionally cancellable (currently set at 0%); and
|
|
·
|
Providing for a risk weight, generally not less than 20% with certain exceptions, for securities lending transactions based on the risk weight category of the underlying collateral securing the transaction.
|
|
•
|
Truth-In-Lending Act, governing disclosures of credit terms to consumer borrowers;
|
|
•
|
Home Mortgage Disclosure Act of 1975, requiring financial institutions to provide information to enable the public and public officials to determine whether a financial institution is fulfilling its obligation to help meet the housing needs of the community it serves;
|
|
•
|
Equal Credit Opportunity Act, prohibiting discrimination on the basis of race, creed or other prohibited factors in extending credit;
|
|
•
|
Fair Credit Reporting Act of 1978, governing the use and provision of information to credit reporting agencies;
|
|
•
|
Fair Debt Collection Act, governing the manner in which consumer debts may be collected by collection agencies; and
|
|
•
|
Rules and regulations of the various federal agencies charged with the responsibility of implementing such federal laws.
|
|
•
|
Right to Financial Privacy Act, which imposes a duty to maintain confidentiality of consumer financial records and prescribes procedures for complying with administrative subpoenas of financial records;
|
|
•
|
Electronic Funds Transfer Act and Regulation E promulgated thereunder, which govern automatic deposits to and withdrawals from deposit accounts and customers’ rights and liabilities arising from the use of automated teller machines and other electronic banking services; and
|
|
•
|
Check Clearing for the 21st Century Act (also known as “Check 21”), which gives “substitute checks,” such as digital check images and copies made from that image, the same legal standing as the original paper check.
|
ITEM 1A.
|
|
·
|
There could be an increased level of commercial and consumer delinquencies, lack of consumer confidence, increased market volatility, and widespread reduction of business activity generally.
|
|
·
|
There could be an increase in write-downs of asset values by financial institutions, such as the Bank.
|
|
·
|
There could be the loss of collateral value on commercial and real estate loans that are secured by real estate located in our market area. A further significant decline in real estate values in our market would mean that the collateral for many of our loans would provide less security. As a result, we would be more likely to suffer losses on defaulted loans because our ability to fully recover on defaulted loans by selling the real estate collateral would be diminished.
|
|
·
|
Our ability to assess the creditworthiness of customers could be impaired if the models and approaches it uses to select, manage, and underwrite credits become less predictive of future performance.
|
|
·
|
The process we use to estimate losses inherent in our loan portfolio requires difficult, subjective, and complex judgments. This process includes analysis of economic conditions and the impact of these economic conditions on borrowers’ ability to repay their loans. The process could no longer be capable of accurate estimation and may, in turn, impact its reliability.
|
|
·
|
The Bank could be required to pay significantly higher FDIC premiums in the future if losses further deplete the Deposit Insurance Fund.
|
|
·
|
We could face increased competition due to intensified consolidation of the financial services industry. If current levels of market disruption and volatility continue or worsen, there can be no assurance that we will not experience an adverse effect, which may be material, on our ability to access capital and on our business, financial condition, and results of operations.
|
|
·
|
announcements of developments related to the Company’s business;
|
|
·
|
fluctuations in the Company’s results of operations;
|
|
·
|
sales or purchases of substantial amounts of the Company’s securities in the marketplace;
|
|
·
|
general conditions in the Company’s banking niche or the worldwide economy;
|
|
·
|
a shortfall or excess in revenues or earnings compared to securities analysts’ expectations;
|
|
·
|
changes in analysts’ recommendations or projections; and
|
|
·
|
the Company’s announcement of new acquisitions or other projects.
|
ITEM 1B.
|
ITEM 2.
|
Location
|
Year
Opened
|
Net Book
Value
(1)
|
Owned/
Leased
|
Approximate
Square
Footage
|
|||||||
(Dollars in thousands)
|
|||||||||||
Main Office:
|
|||||||||||
220 Federal Drive, N.W.
Corydon, Indiana 47112
|
1997
|
$ | 1,484 |
Owned
|
12,000 | ||||||
Branch Offices:
|
|||||||||||
391 Old Capital Plaza, N.E.
Corydon, Indiana 47112
|
1997
|
10 |
Leased
(2)
|
425 | |||||||
8095 State Highway 135, N.W.
New Salisbury, Indiana 47161
|
1999
|
550 |
Owned
|
3,500 | |||||||
710 Main Street
Palmyra, Indiana 47164
|
1991
|
944 |
Owned
|
6,000 | |||||||
9849 Highway 150
Greenville, Indiana 47124
|
1986
|
168 |
Owned
|
2,484 | |||||||
5100 State Road 64 (Edwardsville Branch)
Georgetown, Indiana 47122
|
2008
|
1,227 |
Owned
|
4,988 | |||||||
4303 Charlestown Crossing
New Albany, Indiana 47150
|
1999
|
707 |
Owned
|
3,500 | |||||||
3131 Grant Line Road
New Albany, Indiana 47150
|
2003
|
1,606 |
Owned
|
12,200 | |||||||
5609 Williamsburg Station Road
Floyds Knobs, Indiana 47119
|
2003
|
545 |
Owned
|
4,160 | |||||||
2744 Allison Lane
Jeffersonville, Indiana 47130
|
2003
|
1,107 |
Owned
|
4,090 | |||||||
1312 S. Jackson Street
Salem, Indiana 47167
|
2007
|
887 |
Owned
|
3,400 | |||||||
2420 Barron Avenue NE
Lanesville, Indiana 47136
|
2010
|
810 |
Owned
|
1,450 |
(1)
|
Represents the net value of land, buildings, furniture, fixtures and equipment owned by the Bank.
|
(2)
|
Lease expires in April 2015.
|
ITEM 3.
|
ITEM 4.
|
High
|
Low
|
Market price
|
||||||||||||||
Sale
|
Sale
|
Dividends
|
end of period
|
|||||||||||||
2014:
|
||||||||||||||||
First Quarter
|
$ | 21.50 | $ | 20.20 | $ | 0.21 | $ | 20.60 | ||||||||
Second Quarter
|
21.20 | 20.00 | 0.21 | 21.11 | ||||||||||||
Third Quarter
|
23.50 | 20.55 | 0.21 | 23.45 | ||||||||||||
Fourth Quarter
|
24.77 | 23.00 | 0.21 | 24.34 | ||||||||||||
2013:
|
||||||||||||||||
First Quarter
|
$ | 20.50 | $ | 19.31 | $ | 0.20 | $ | 20.37 | ||||||||
Second Quarter
|
20.60 | 19.40 | 0.20 | 20.57 | ||||||||||||
Third Quarter
|
21.86 | 19.75 | 0.20 | 21.34 | ||||||||||||
Fourth Quarter
|
21.96 | 19.40 | 0.20 | 21.26 |
Plan category
|
Number of securities to be issued upon exercise of outstanding options, warrants and rights
|
Weighted-average exercise price of outstanding options, warrants and rights
|
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
|
|||||||||
(a)
|
(b)
|
(c)
|
||||||||||
Equity compensation plans approved by security holders
|
- | N/A | 223,000 | |||||||||
Equity compensation plans not approved by security holders
|
- | N/A | - | |||||||||
Total
|
- | N/A | 223,000 |
FINANCIAL CONDITION DATA:
|
At December 31,
|
|||||||||||||||||||
2014
|
2013
|
2012
|
2011
|
2010
|
||||||||||||||||
(In thousands)
|
||||||||||||||||||||
Total assets
|
$ | 472,761 | $ | 444,384 | $ | 459,132 | $ | 438,886 | $ | 452,378 | ||||||||||
Cash and cash equivalents (1)
|
33,243 | 11,136 | 21,811 | 18,923 | 21,575 | |||||||||||||||
Securities available for sale
|
100,226 | 108,762 | 122,973 | 111,440 | 100,851 | |||||||||||||||
Securities held to maturity
|
6 | 9 | 12 | 16 | 32 | |||||||||||||||
Net loans
|
300,603 | 288,506 | 280,407 | 276,047 | 294,550 | |||||||||||||||
Deposits
|
412,636 | 373,830 | 384,343 | 364,374 | 378,003 | |||||||||||||||
Retail repurchase agreements
|
0 | 9,310 | 14,092 | 9,125 | 8,669 | |||||||||||||||
Advances from Federal Home Loan Bank
|
0 | 5,500 | 5,100 | 12,350 | 15,729 | |||||||||||||||
Stockholders' equity, net of noncontrolling
interest in subsidiary
|
57,121 | 53,227 | 52,824 | 50,942 | 47,893 |
(1) |
Includes cash and due from banks, interest-bearing deposits in other depository institutions and federal funds sold.
|
(2) |
Per share data excludes net income attributable to noncontrolling interest in subsidiary.
|
At or For the Year Ended
|
||||||||||||||||||||
SELECTED FINANCIAL RATIOS:
|
December 31,
|
|||||||||||||||||||
2014
|
2013
|
2012
|
2011
|
2010
|
||||||||||||||||
Performance Ratios:
|
||||||||||||||||||||
Return on assets (1)
|
1.22 | % | 1.11 | % | 0.86 | % | 0.90 | % | 0.84 | % | ||||||||||
Return on average equity (2)
|
10.09 | % | 9.56 | % | 7.54 | % | 8.04 | % | 8.10 | % | ||||||||||
Dividend payout ratio (3)
|
41.38 | % | 43.96 | % | 53.90 | % | 53.15 | % | 53.24 | % | ||||||||||
Average equity to average assets
|
12.08 | % | 11.65 | % | 11.46 | % | 11.13 | % | 10.43 | % | ||||||||||
Interest rate spread (4)
|
4.06 | % | 3.98 | % | 3.86 | % | 3.98 | % | 3.74 | % | ||||||||||
Net interest margin (5)
|
4.14 | % | 4.07 | % | 4.00 | % | 4.14 | % | 3.96 | % | ||||||||||
Noninterest expense to average assets
|
3.07 | % | 2.93 | % | 3.05 | % | 2.98 | % | 2.79 | % | ||||||||||
Average interest earning assets to
average interest bearing liabilities
|
127.64 | % | 124.42 | % | 124.39 | % | 118.79 | % | 116.24 | % | ||||||||||
Regulatory Capital Ratios (Bank only):
|
||||||||||||||||||||
Tier I - adjusted total assets
|
10.59 | % | 10.89 | % | 10.00 | % | 10.06 | % | 9.32 | % | ||||||||||
Tier I - risk based
|
14.55 | % | 14.86 | % | 14.35 | % | 16.11 | % | 14.83 | % | ||||||||||
Total risk-based
|
15.80 | % | 16.11 | % | 15.60 | % | 17.05 | % | 15.54 | % | ||||||||||
Asset Quality Ratios:
|
||||||||||||||||||||
Nonperforming loans as a percent of
net loans (6)
|
1.07 | % | 1.90 | % | 2.81 | % | 2.81 | % | 2.69 | % | ||||||||||
Nonperforming assets as a
percent of total assets (7)
|
0.70 | % | 1.34 | % | 1.78 | % | 1.92 | % | 1.88 | % | ||||||||||
Allowance for loan losses as a percent
of gross loans receivable
|
1.57 | % | 1.64 | % | 1.64 | % | 1.47 | % | 1.48 | % |
(1) |
Net income attributable to First Capital, Inc. divided by average assets.
|
(2) |
Net income attributable to First Capital, Inc. divided by average equity.
|
(3) |
Common stock dividends declared per share divided by net income per share.
|
(4) |
Difference between weighted average yield on interest-earning assets and weighted average cost of interest-bearing liabilities.
Tax exempt income is reported on a tax equivalent basis using a federal marginal tax rate of 34%.
|
(5) |
Net interest income as a percentage of average interest-earning assets.
|
(6) |
Nonperforming loans consist of loans accounted for on a nonaccrual basis and accruing loans 90 days or more past due.
|
(7) |
Nonperforming assets consist of nonperforming loans and real estate acquired in settlement of loans.
|
·
|
Net income and earnings per share – Net income attributable to the Company was $5.6 million, or $2.03 per share for 2014 compared to $5.1 million, or $1.82 per share for 2013.
|
·
|
Return on average assets and return on average equity – Return on average assets for 2014 was 1.22% compared to 1.11% for 2013, and return on average equity for 2014 was 10.09% compared to 9.56% for 2013.
|
·
|
Efficiency ratio – The Company’s efficiency ratio (defined as noninterest expenses divided by net interest income plus noninterest income) was 63.5% for 2014 compared to 62.3% for 2013. This increase was due in part to an increase in personnel as the Bank increased staff in residential mortgage and commercial lending.
|
·
|
Asset quality – Net loan charge-offs decreased from $539,000 for 2013 to $266,000 for 2014. In addition, total nonperforming assets (consisting of nonperforming loans and foreclosed real estate) decreased from $6.0 million, or 1.34% of total assets at December 31, 2013 to $3.3 million, or 0.70% of total assets at December 31, 2014. The allowance for loan losses was 1.57% of total loans and 150.31% of nonperforming loans at December 31, 2014 compared to 1.64% of total loans and 89.72% at December 31, 2013.
|
·
|
Shareholder return – Total shareholder return, including the increase in the Company’s stock price from $21.26 at December 31, 2013 to $24.34 at December 31, 2014 and dividends of $0.84 per share, was 18.4% for 2014.
|
·
|
Monitoring asset quality and credit risk in the loan and investment portfolios, with an emphasis on reducing nonperforming assets and originating high-quality commercial and consumer loans.
|
·
|
Being active in the local community, particularly through our efforts with local schools, to uphold our high standing in our community and marketing to our next generation of customers.
|
·
|
Improving profitability by expanding our product offerings to customers and investing in technology to increase the productivity and efficiency of our staff.
|
·
|
Continuing to emphasize commercial real estate and other commercial business lending as well as consumer lending. The Bank will also continue to focus on increasing secondary market lending as a source of noninterest income.
|
·
|
Growing commercial and personal demand deposit accounts which provide a low-cost funding source.
|
·
|
Evaluating vendor contracts for potential cost savings and efficiencies.
|
·
|
Continuing our capital management strategy to enhance shareholder value through the repurchase of Company stock and the payment of dividends.
|
·
|
Evaluating growth opportunities to expand the Bank’s market area and market share through acquisitions of other financial institutions or branches of other institutions.
|
·
|
Ensuring that the Company attracts and retains talented personnel and that an optimal level of performance and customer service is promoted at all levels of the Company.
|
Year Ended December 31,
|
||||||||||||||||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||||||||||||||||
(Dollars in thousands)
|
Average
Balance
|
Interest
|
Average
Yield/
|
Average
Balance
|
Interest
|
Average
Yield/
|
Average
Balance
|
Interest
|
Average
Yield/
|
|||||||||||||||||||||||||||
Interest-earning assets:
|
||||||||||||||||||||||||||||||||||||
Loans (1) (2):
|
||||||||||||||||||||||||||||||||||||
Taxable (3)
|
$ | 296,560 | $ | 15,741 | 5.31 | % | $ | 286,514 | $ | 15,748 | 5.50 | % | $ | 278,874 | $ | 15,916 | 5.71 | % | ||||||||||||||||||
Tax-exempt
|
4,875 | 296 | 6.07 | % | 2,382 | 129 | 5.42 | % | 2,501 | 135 | 5.40 | % | ||||||||||||||||||||||||
Total loans
|
301,435 | 16,037 | 5.32 | % | 288,896 | 15,877 | 5.50 | % | 281,375 | 16,051 | 5.70 | % | ||||||||||||||||||||||||
Investment securities:
|
||||||||||||||||||||||||||||||||||||
Taxable (3)
|
76,136 | 1,299 | 1.71 | % | 83,876 | 1,392 | 1.66 | % | 92,980 | 1,771 | 1.90 | % | ||||||||||||||||||||||||
Tax-exempt
|
31,872 | 1,603 | 5.03 | % | 32,654 | 1,689 | 5.17 | % | 25,417 | 1,464 | 5.76 | % | ||||||||||||||||||||||||
Total investment
securities
|
108,008 | 2,902 | 2.69 | % | 116,530 | 3,081 | 2.64 | % | 118,397 | 3,235 | 2.73 | % | ||||||||||||||||||||||||
Federal funds sold and
interest-bearing
deposits with banks
|
23,155 | 105 | 0.45 | % | 21,198 | 72 | 0.34 | % | 21,998 | 58 | 0.26 | % | ||||||||||||||||||||||||
Total interest-earning
assets
|
432,598 | 19,044 | 4.40 | % | 426,624 | 19,030 | 4.46 | % | 421,770 | 19,344 | 4.59 | % | ||||||||||||||||||||||||
Noninterest-earning assets
|
26,370 | 28,959 | 31,953 | |||||||||||||||||||||||||||||||||
Total assets
|
$ | 458,968 | $ | 455,583 | $ | 453,723 | ||||||||||||||||||||||||||||||
Interest-bearing liabilities:
|
||||||||||||||||||||||||||||||||||||
Interest-bearing demand
deposits
|
$ | 178,632 | $ | 403 | 0.23 | % | $ | 168,774 | $ | 412 | 0.24 | % | $ | 156,704 | $ | 487 | 0.31 | % | ||||||||||||||||||
Savings accounts
|
73,670 | 73 | 0.10 | % | 65,587 | 65 | 0.10 | % | 55,369 | 61 | 0.11 | % | ||||||||||||||||||||||||
Time deposits
|
80,890 | 651 | 0.80 | % | 93,375 | 997 | 1.07 | % | 106,625 | 1,493 | 1.40 | % | ||||||||||||||||||||||||
Total deposits
|
333,192 | 1,127 | 0.34 | % | 327,736 | 1,474 | 0.45 | % | 318,698 | 2,041 | 0.64 | % | ||||||||||||||||||||||||
Retail repurchase
agreements
|
4,601 | 12 | 0.26 | % | 11,015 | 28 | 0.25 | % | 10,074 | 38 | 0.38 | % | ||||||||||||||||||||||||
FHLB advances
|
1,137 | 5 | 0.44 | % | 4,135 | 151 | 3.65 | % | 10,287 | 386 | 3.75 | % | ||||||||||||||||||||||||
Total interest-bearing
liabilities
|
338,930 | 1,144 | 0.34 | % | 342,886 | 1,653 | 0.48 | % | 339,059 | 2,465 | 0.73 | % | ||||||||||||||||||||||||
Noninterest-bearing
liabilities:
|
||||||||||||||||||||||||||||||||||||
Noninterest-bearing
deposits
|
64,344 | 58,167 | 60,509 | |||||||||||||||||||||||||||||||||
Other liabilities
|
262 | 1,462 | 2,169 | |||||||||||||||||||||||||||||||||
Total liabilities
|
403,536 | 402,515 | 401,737 | |||||||||||||||||||||||||||||||||
Stockholders’ equity
|
55,432 | 53,068 | 51,986 | |||||||||||||||||||||||||||||||||
Total liabilities and
stockholders’ equity (4)
|
$ | 458,968 | $ | 455,583 | $ | 453,723 | ||||||||||||||||||||||||||||||
Net interest income
|
$ | 17,900 | $ | 17,377 | $ | 16,879 | ||||||||||||||||||||||||||||||
Interest rate spread
|
4.06 | % | 3.98 | % | 3.86 | % | ||||||||||||||||||||||||||||||
Net interest margin
|
4.14 | % | 4.07 | % | 4.00 | % | ||||||||||||||||||||||||||||||
Ratio of average interest –
earning assets to average
interest-bearing liabilities
|
127.64 | % | 124.42 | % | 124.39 | % |
(1) |
Interest income on loans includes fee income of $707,000, $754,000 and $654,000 for the years ended December 31, 2014, 2013, and 2012, respectively.
|
(2) |
Average loan balances include loans held for sale and nonperforming loans.
|
(3) |
Includes taxable debt and equity securities and Federal Home Loan Bank stock.
|
(4) |
Stockholders’ equity attributable to First Capital, Inc.
|
2014 Compared to 2013
Increase (Decrease) Due to
|
2013 Compared to 2012
Increase (Decrease) Due to
|
|||||||||||||||||||||||||||||||
Rate
|
Volume
|
Rate/
Volume
|
Net
|
Rate
|
Volume
|
Rate/
Volume
|
Net
|
|||||||||||||||||||||||||
|
(In thousands)
|
|||||||||||||||||||||||||||||||
Interest-earning assets:
|
||||||||||||||||||||||||||||||||
Loans:
|
||||||||||||||||||||||||||||||||
Taxable
|
$ | (543 | ) | $ | 555 | $ | (19 | ) | $ | (7 | ) | $ | (587 | ) | $ | 435 | $ | (16 | ) | $ | (168 | ) | ||||||||||
Tax-exempt
|
15 | 136 | 16 | 167 | 1 | (7 | ) | 0 | (6 | ) | ||||||||||||||||||||||
Total loans
|
(528 | ) | 691 | (3 | ) | 160 | (586 | ) | 428 | (16 | ) | (174 | ) | |||||||||||||||||||
Investment securities:
|
||||||||||||||||||||||||||||||||
Taxable
|
41 | (130 | ) | (4 | ) | (93 | ) | (226 | ) | (175 | ) | 22 | (379 | ) | ||||||||||||||||||
Tax-exempt
|
(47 | ) | (40 | ) | 1 | (86 | ) | (150 | ) | 418 | (43 | ) | 225 | |||||||||||||||||||
Total investment
securities
|
(6 | ) | (170 | ) | (3 | ) | (179 | ) | (376 | ) | 243 | (21 | ) | (154 | ) | |||||||||||||||||
Federal funds sold and
interest-bearing deposits
with banks
|
24 | 7 | 2 | 33 | 17 | (2 | ) | (1 | ) | 14 | ||||||||||||||||||||||
Total net change in
income on interest-
earning assets
|
(510 | ) | 528 | (4 | ) | 14 | (945 | ) | 669 | (38 | ) | (314 | ) | |||||||||||||||||||
Interest-bearing liabilities:
|
||||||||||||||||||||||||||||||||
Interest-bearing deposits
|
(365 | ) | 24 | (6 | ) | (347 | ) | (608 | ) | 58 | (17 | ) | (567 | ) | ||||||||||||||||||
Retail repurchase
agreements
|
1 | (16 | ) | (1 | ) | (16 | ) | (13 | ) | 4 | (1 | ) | (10 | ) | ||||||||||||||||||
FHLB advances
|
(133 | ) | (109 | ) | 96 | (146 | ) | (10 | ) | (231 | ) | 6 | (235 | ) | ||||||||||||||||||
Total net change in
expense on interest-
bearing liabilities
|
(497 | ) | (101 | ) | 89 | (509 | ) | (631 | ) | (169 | ) | (12 | ) | (812 | ) | |||||||||||||||||
Net change in net
interest income
|
$ | (13 | ) | $ | 629 | $ | (93 | ) | $ | 523 | $ | (314 | ) | $ | 838 | $ | (26 | ) | $ | 498 |
At December 31,
|
||||||||
2014
|
2013
|
|||||||
(In thousands)
|
||||||||
Commitments to originate new loans
|
$ | 7,413 | $ | 6,318 | ||||
Undisbursed portion of construction loans
|
3,325 | 7,142 | ||||||
Unfunded commitments to extend credit under
existing commercial and personal lines of credit
|
48,328 | 44,285 | ||||||
Standby letters of credit
|
693 | 1,184 |
Payments due by period
|
||||||||||||||||||||
Total
|
Less than
1 Year
|
1 – 3
Years
|
3 – 5
Years
|
More than
5 Years
|
||||||||||||||||
(In thousands)
|
||||||||||||||||||||
Deposits
|
$ | 412,636 | $ | 377,569 | $ | 26,329 | $ | 8,738 | $ | 0 | ||||||||||
Operating lease obligations
|
4 | 4 | 0 | 0 | 0 | |||||||||||||||
Total contractual obligations
|
$ | 412,640 | $ | 377,573 | $ | 26,329 | $ | 8,738 | $ | 0 |
At December 31, 2014
|
At December 31, 2013
|
|||||||||||||||
Immediate Change
|
One Year Horizon
|
One Year Horizon
|
||||||||||||||
in the Level
of Interest Rates
|
Dollar
Change
|
Percent
Change
|
Dollar
Change
|
Percent
Change
|
||||||||||||
(Dollars in thousands)
|
||||||||||||||||
300bp
|
$ | (193 | ) | (1.08 | )% | $ | (152 | ) | (0.88 | )% | ||||||
200bp
|
192 | 1.08 | 197 | 1.14 | ||||||||||||
100bp
|
241 | 1.35 | 280 | 1.62 | ||||||||||||
Static
|
- | - | - | - | ||||||||||||
(100)bp
|
(367 | ) | (2.05 | ) | (232 | ) | (1.34 | ) |
At December 31, 2014
|
||||||||||||||||||||
Immediate Change
|
Economic Value of Equity
|
Economic Value of Equity as a
|
||||||||||||||||||
in the Level
|
Dollar
|
Dollar
|
Percent
|
Percent of Present Value of Assets
|
||||||||||||||||
of Interest Rates
|
Amount
|
Change
|
Change
|
EVE Ratio
|
Change
|
|||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
300bp
|
$ | 59,328 | $ | (13,398 | ) | (18.42 | )% | 13.52 | % | (192 | )bp | |||||||||
200bp
|
67,860 | (4,866 | ) | (6.69 | ) | 15.10 | (34 | )bp | ||||||||||||
100bp
|
73,971 | 1,245 | 1.71 | 16.07 | 63 | bp | ||||||||||||||
Static
|
72,726 | - | - | 15.44 | - | bp | ||||||||||||||
(100)bp
|
70,498 | (2,228 | ) | (3.06 | ) | 14.58 | (86 | )bp |
At December 31, 2013
|
||||||||||||||||||||
Immediate Change
|
Economic Value of Equity
|
Economic Value of Equity as a
|
||||||||||||||||||
in the Level
|
Dollar
|
Dollar
|
Percent
|
Percent of Present Value of Assets
|
||||||||||||||||
of Interest Rates
|
Amount
|
Change
|
Change
|
EVE Ratio
|
Change
|
|||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
300bp
|
$ | 44,399 | $ | (15,949 | ) | (26.43 | )% | 11.01 | % | (271 | )bp | |||||||||
200bp
|
51,134 | (9,214 | ) | (15.27 | ) | 12.31 | (141 | )bp | ||||||||||||
100bp
|
56,380 | (3,968 | ) | (6.57 | ) | 13.19 | (53 | )bp | ||||||||||||
Static
|
60,348 | - | - | 13.72 | - | bp | ||||||||||||||
(100)bp
|
64,329 | 3,981 | 6.60 | 14.22 | 50 | bp |
ITEM 9A.
|
|
Disclosure Controls and Procedures
|
ITEM 9B.
|
Name
|
Age
(1)
|
Position
|
||||
M. Chris Frederick
|
47
|
Executive Vice President, Chief Financial Officer and Treasurer
|
||||
Dennis L. Thomas
|
58
|
Senior Vice President- Lending
|
||||
Jill Keinsley
|
47
|
Senior Vice President, Human Resources Director
|
ITEM 11.
|
ITEM 12.
|
|
(a)
|
Security Ownership of Certain Beneficial Owners.
|
21.0
|
Subsidiaries of the Registrant (incorporated by reference to Part I,
“Business—Subsidiary Activities”
of this Form 10-K)
|
||
23.0
|
Consent of Monroe Shine and Co., Inc.
|
||
31.1
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
|
||
31.2
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer
|
||
32.0
|
Section 1350 Certification of Chief Executive Officer & Chief Financial Officer
|
||
101.0
|
The following materials from the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statement of Changes in Stockholders’ Equity, (iv) the Consolidated Statements of Cash Flows and (v) the Notes to the Consolidated Financial Statements.
|
*
|
Management contract or compensatory plan, contract or arrangement.
|
(1)
|
Incorporated by reference to Exhibit 3.1 filed with the Registration Statement on Form SB-2 on September 16, 1998, and any amendments thereto, Registration No. 333-63515.
|
(2)
|
Incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on June 18, 2013.
|
(3)
|
Incorporated by reference to Exhibit 10.3 of the Annual Report on Form 10-K for the year ended December 31, 2012.
|
(4)
|
Incorporated by reference to Appendix A to the Definitive Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on April 9, 2009.
|
(5)
|
Incorporated by reference to Exhibits 10.9, 10.10 and 10.11, respectively, filed with the Annual Report on Form 10-K for the year ended December 31, 2008 (Commission File No. 0-25023).
|
FIRST CAPITAL, INC. | ||
Date: March 27, 2015 | /s/ William W. Harrod | |
William W. Harrod | ||
President, Chief Executive Officer and a Director
|
Name
|
Title
|
Date
|
||
/s/ William W. Harrod
|
President, Chief Executive
|
March 27, 2015
|
||
William W. Harrod
|
Officer and Director
|
|||
(principal executive officer)
|
||||
/s/ Gerald L. Uhl
|
Chairman
|
March 27, 2015
|
||
Gerald L. Uhl
|
||||
/s/ Michael C. Frederick
|
Executive Vice President, Chief
|
March 27, 2015
|
||
Michael C. Frederick
|
Financial Officer and Treasurer
|
|||
(principal accounting and
|
||||
financial officer)
|
||||
/s/ Samuel E. Uhl
|
Director
|
March 27, 2015
|
||
Samuel E. Uhl
|
||||
/s/ Mark D. Shireman
|
Director
|
March 27, 2015
|
||
Mark D. Shireman
|
||||
/s/ Dennis L. Huber
|
Director
|
March 27, 2015
|
||
Dennis L. Huber
|
||||
/s/ Kenneth R. Saulman
|
Director
|
March 27, 2015
|
||
Kenneth R. Saulman
|
/s/ Michael L. Shireman
|
Director
|
March 27, 2015
|
||
Michael L. Shireman
|
||||
/s/ Kathryn W. Ernstberger
|
Director
|
March 27, 2015
|
||
Kathryn W. Ernstberger
|
||||
/s/ William I. Orwick, Sr.
|
Director
|
March 27, 2015
|
||
William I. Orwick, Sr.
|
||||
/s/ Carolyn E. Wallace
|
Director
|
March 27, 2015
|
||
Carolyn E. Wallace
|
||||
/s/ Pamela G. Kraft
|
Director
|
March 27, 2015
|
||
Pamela G. Kraft
|
||||
/s/ Christopher L. Byrd
|
Director
|
March 27, 2015
|
||
Christopher L. Byrd
|
||||
/s/ Dana L. Huber
|
Director
|
March 27, 2015
|
||
Dana L. Huber
|
(In thousands, except share and per share data)
|
2014
|
2013
|
||||||
ASSETS
|
||||||||
Cash and due from banks
|
$ | 13,653 | $ | 10,058 | ||||
Interest-bearing deposits with banks
|
865 | 467 | ||||||
Federal funds sold
|
18,725 | 611 | ||||||
Total cash and cash equivalents
|
33,243 | 11,136 | ||||||
Interest-bearing time deposits
|
8,270 | 4,425 | ||||||
Securities available for sale, at fair value
|
100,226 | 108,762 | ||||||
Securities-held to maturity
|
6 | 9 | ||||||
Loans, net
|
300,603 | 288,506 | ||||||
Loans held for sale
|
1,608 | 1,611 | ||||||
Federal Home Loan Bank stock, at cost
|
2,241 | 2,820 | ||||||
Foreclosed real estate
|
78 | 466 | ||||||
Premises and equipment
|
10,208 | 10,347 | ||||||
Accrued interest receivable
|
1,580 | 1,716 | ||||||
Cash value of life insurance
|
6,161 | 6,332 | ||||||
Goodwill
|
5,386 | 5,386 | ||||||
Other assets
|
3,151 | 2,868 | ||||||
Total Assets
|
$ | 472,761 | $ | 444,384 | ||||
LIABILITIES
|
||||||||
Deposits:
|
||||||||
Noninterest-bearing
|
$ | 73,042 | $ | 56,436 | ||||
Interest-bearing
|
339,594 | 317,394 | ||||||
Total deposits
|
412,636 | 373,830 | ||||||
Retail repurchase agreements
|
0 | 9,310 | ||||||
Advances from Federal Home Loan Bank
|
0 | 5,500 | ||||||
Accrued interest payable
|
127 | 192 | ||||||
Accrued expenses and other liabilities
|
2,765 | 2,213 | ||||||
Total liabilities
|
415,528 | 391,045 | ||||||
Commitments and Contingencies
|
||||||||
EQUITY
|
||||||||
Preferred stock of $.01 par value per share
|
||||||||
Authorized 1,000,000 shares; none issued
|
0 | 0 | ||||||
Common stock of $.01 par value per share
|
||||||||
Authorized 5,000,000 shares; issued 3,164,416 shares; outstanding
2,740,502 and 2,784,088 shares in 2014 and 2013, respectively
|
32 | 32 | ||||||
Additional paid-in capital
|
24,313 | 24,313 | ||||||
Retained earnings-substantially restricted
|
40,229 | 36,947 | ||||||
Accumulated other comprehensive income (loss)
|
800 | (720 | ) | |||||
Less treasury stock, at cost - 423,914 shares (380,328 shares in 2013)
|
(8,253 | ) | (7,345 | ) | ||||
Total First Capital, Inc. stockholders' equity
|
57,121 | 53,227 | ||||||
Noncontrolling interest in subsidiary
|
112 | 112 | ||||||
Total equity
|
57,233 | 53,339 | ||||||
Total Liabilities and Equity
|
$ | 472,761 | $ | 444,384 |
(In thousands, except per share data)
|
2014
|
2013
|
||||||
INTEREST INCOME
|
||||||||
Loans, including fees
|
$ | 15,937 | $ | 15,833 | ||||
Securities:
|
||||||||
Taxable
|
1,185 | 1,294 | ||||||
Tax-exempt
|
1,058 | 1,113 | ||||||
Federal Home Loan Bank dividends
|
114 | 99 | ||||||
Federal funds sold and interest-bearing deposits in banks
|
105 | 72 | ||||||
Total interest income
|
18,399 | 18,411 | ||||||
INTEREST EXPENSE
|
||||||||
Deposits
|
1,127 | 1,474 | ||||||
Retail repurchase agreements
|
12 | 28 | ||||||
Advances from Federal Home Loan Bank
|
5 | 151 | ||||||
Total interest expense
|
1,144 | 1,653 | ||||||
Net interest income
|
17,255 | 16,758 | ||||||
Provision for loan losses
|
190 | 725 | ||||||
Net interest income after provision for loan losses
|
17,065 | 16,033 | ||||||
NONINTEREST INCOME
|
||||||||
Service charges on deposit accounts
|
3,189 | 3,112 | ||||||
Commission and fee income
|
546 | 355 | ||||||
Gain on sale of securities
|
54 | 29 | ||||||
Gain on sale of mortgage loans
|
713 | 842 | ||||||
Mortgage brokerage fee income
|
45 | 48 | ||||||
Increase in cash value of life insurance
|
150 | 160 | ||||||
Other income
|
239 | 94 | ||||||
Total noninterest income
|
4,936 | 4,640 | ||||||
NONINTEREST EXPENSE
|
||||||||
Compensation and benefits
|
7,661 | 7,143 | ||||||
Occupancy and equipment
|
1,198 | 1,166 | ||||||
Data processing
|
1,591 | 1,458 | ||||||
Professional fees
|
721 | 686 | ||||||
Advertising
|
288 | 262 | ||||||
Other expenses
|
2,623 | 2,616 | ||||||
Total noninterest expense
|
14,082 | 13,331 | ||||||
Income before income taxes
|
7,919 | 7,342 | ||||||
Income tax expense
|
2,312 | 2,255 | ||||||
Net Income
|
5,607 | 5,087 | ||||||
Less net income attributable to the noncontrolling interest in subsidiary
|
13 | 13 | ||||||
Net Income Attributable to First Capital, Inc.
|
$ | 5,594 | $ | 5,074 | ||||
Earnings per common share attributable to First Capital, Inc.:
|
||||||||
Basic
|
$ | 2.03 | $ | 1.82 | ||||
Diluted
|
$ | 2.03 | $ | 1.82 | ||||
Dividends per share on common shares
|
$ | 0.84 | $ | 0.80 |
(In thousands)
|
2014
|
2013
|
||||||
Net Income
|
$ | 5,607 | $ | 5,087 | ||||
OTHER COMPREHENSIVE INCOME (LOSS)
|
||||||||
Unrealized gains (losses) on securities available for sale:
|
||||||||
Unrealized holding gains (losses) arising during the period
|
2,453 | (3,797 | ) | |||||
Income tax (expense) benefit
|
(897 | ) | 1,392 | |||||
Net of tax amount
|
1,556 | (2,405 | ) | |||||
Less: reclassification adjustment for realized gains included in net income
|
(54 | ) | (29 | ) | ||||
Income tax expense
|
18 | 10 | ||||||
Net of tax amount
|
(36 | ) | (19 | ) | ||||
Other Comprehensive Income (Loss), net of tax
|
1,520 | (2,424 | ) | |||||
Total Comprehensive Income
|
7,127 | 2,663 | ||||||
Less: comprehensive income attributable to the noncontrolling interest in subsidiary
|
13 | 13 | ||||||
Comprehensive Income Attributable to First Capital, Inc.
|
$ | 7,114 | $ | 2,650 |
(In thousands, except share data)
|
Common
Stock
|
Additional
Paid-in
|
Retained
Earnings
|
Accumulated
Other
|
Treasury
Stock
|
Noncontrolling
Interest
|
Total
|
|||||||||||||||||||||
Balances at January 1, 2013
|
$ | 32 | $ | 24,313 | $ | 34,101 | $ | 1,704 | $ | (7,326 | ) | $ | 112 | $ | 52,936 | |||||||||||||
Net income
|
0 | 0 | 5,074 | 0 | 0 | 13 | 5,087 | |||||||||||||||||||||
Other comprehensive loss
|
0 | 0 | 0 | (2,424 | ) | 0 | 0 | (2,424 | ) | |||||||||||||||||||
Cash dividends
|
0 | 0 | (2,228 | ) | 0 | 0 | (13 | ) | (2,241 | ) | ||||||||||||||||||
Purchase of 909 treasury shares
|
0 | 0 | 0 | 0 | (19 | ) | 0 | (19 | ) | |||||||||||||||||||
Balances at December 31, 2013
|
32 | 24,313 | 36,947 | (720 | ) | (7,345 | ) | 112 | 53,339 | |||||||||||||||||||
Net income
|
0 | 0 | 5,594 | 0 | 0 | 13 | 5,607 | |||||||||||||||||||||
Other comprehensive income
|
0 | 0 | 0 | 1,520 | 0 | 0 | 1,520 | |||||||||||||||||||||
Cash dividends
|
0 | 0 | (2,312 | ) | 0 | 0 | (13 | ) | (2,325 | ) | ||||||||||||||||||
Purchase of 43,586 treasury shares
|
0 | 0 | 0 | 0 | (908 | ) | 0 | (908 | ) | |||||||||||||||||||
Balances at December 31, 2014
|
$ | 32 | $ | 24,313 | $ | 40,229 | $ | 800 | $ | (8,253 | ) | $ | 112 | $ | 57,233 |
(In thousands)
|
2014
|
2013
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
||||||||
Net income
|
$ | 5,607 | $ | 5,087 | ||||
Adjustments to reconcile net income to net cash and cash equivalents
provided by operating activities:
|
||||||||
Amortization of premium and accretion of discount on securities, net
|
699 | 903 | ||||||
Depreciation and amortization expense
|
698 | 707 | ||||||
Deferred income taxes
|
285 | 200 | ||||||
Increase in cash value of life insurance
|
(150 | ) | (160 | ) | ||||
Gain on life insurance
|
(129 | ) | 0 | |||||
Gain on sale of securities
|
(54 | ) | (29 | ) | ||||
Provision for loan losses
|
190 | 725 | ||||||
Proceeds from sale of loans
|
29,814 | 39,572 | ||||||
Loans originated for sale
|
(29,098 | ) | (36,732 | ) | ||||
Gain on sale of loans
|
(713 | ) | (842 | ) | ||||
Decrease in accrued interest receivable
|
136 | 41 | ||||||
Decrease in accrued interest payable
|
(65 | ) | (98 | ) | ||||
Net change in other assets/liabilities
|
(272 | ) | 449 | |||||
Net Cash Provided By Operating Activities
|
6,948 | 9,823 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
||||||||
Investment in interest-bearing time deposits
|
(4,820 | ) | (3,025 | ) | ||||
Proceeds from maturities and sales of interest-bearing time deposits
|
975 | 0 | ||||||
Purchase of securities available for sale
|
(27,644 | ) | (25,884 | ) | ||||
Proceeds from maturities of securities available for sale
|
21,442 | 22,190 | ||||||
Proceeds from sales of securities available for sale
|
5,669 | 517 | ||||||
Principal collected on mortgage-backed obligations
|
10,824 | 12,691 | ||||||
Net increase in loans receivable
|
(12,402 | ) | (9,346 | ) | ||||
Proceeds from sale of foreclosed real estate
|
503 | 351 | ||||||
Proceeds from redemption of Federal Home Loan Bank stock
|
579 | 0 | ||||||
Purchase of premises and equipment
|
(559 | ) | (297 | ) | ||||
Cost method equity investment
|
(171 | ) | (540 | ) | ||||
Net Cash Used In Investing Activities
|
(5,604 | ) | (3,343 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
||||||||
Net increase (decrease) in deposits
|
38,806 | (10,513 | ) | |||||
Net decrease in retail repurchase agreements
|
(9,310 | ) | (4,782 | ) | ||||
Advances from Federal Home Loan Bank
|
10,000 | 5,500 | ||||||
Repayment of advances from Federal Home Loan Bank
|
(15,500 | ) | (5,100 | ) | ||||
Purchase of treasury stock
|
(908 | ) | (19 | ) | ||||
Dividends paid
|
(2,325 | ) | (2,241 | ) | ||||
Net Cash Provided By (Used In) Financing Activities
|
20,763 | (17,155 | ) | |||||
Net Increase (Decrease) in Cash and Cash Equivalents
|
22,107 | (10,675 | ) | |||||
Cash and cash equivalents at beginning of year
|
11,136 | 21,811 | ||||||
Cash and Cash Equivalents at End of Year
|
$ | 33,243 | $ | 11,136 |
(In thousands)
|
Amortized
Cost
|
Gross
Unrealized
|
Gross
Unrealized
|
Fair
Value
|
||||||||||||
December 31, 2014:
|
||||||||||||||||
Securities available for sale:
|
||||||||||||||||
Agency mortgage-backed securities
|
$ | 32,135 | $ | 240 | $ | 79 | $ | 32,296 | ||||||||
Agency CMO
|
14,461 | 74 | 150 | 14,385 | ||||||||||||
Other debt securities:
|
||||||||||||||||
Agency notes and bonds
|
18,136 | 32 | 48 | 18,120 | ||||||||||||
Municipal obligations
|
32,178 | 1,242 | 78 | 33,342 | ||||||||||||
Subtotal – debt securities
|
96,910 | 1,588 | 355 | 98,143 | ||||||||||||
Mutual funds
|
2,083 | 0 | 0 | 2,083 | ||||||||||||
|
||||||||||||||||
Total securities available for sale
|
$ | 98,993 | $ | 1,588 | $ | 355 | $ | 100,226 | ||||||||
Securities held to maturity:
|
||||||||||||||||
Agency mortgage-backed securities
|
$ | 6 | $ | 0 | $ | 0 | $ | 6 | ||||||||
|
||||||||||||||||
Total securities held to maturity
|
$ | 6 | $ | 0 | $ | 0 | $ | 6 | ||||||||
December 31, 2013:
|
||||||||||||||||
Securities available for sale:
|
||||||||||||||||
Agency mortgage-backed securities
|
$ | 18,408 | $ | 205 | $ | 244 | $ | 18,369 | ||||||||
Agency CMO
|
20,486 | 96 | 341 | 20,241 | ||||||||||||
Other debt securities:
|
||||||||||||||||
Agency notes and bonds
|
31,594 | 49 | 729 | 30,914 | ||||||||||||
Municipal obligations
|
36,200 | 778 | 938 | 36,040 | ||||||||||||
Subtotal – debt securities
|
106,688 | 1,128 | 2,252 | 105,564 | ||||||||||||
Mutual funds
|
3,238 | 0 | 40 | 3,198 | ||||||||||||
|
||||||||||||||||
Total securities available for sale
|
$ | 109,926 | $ | 1,128 | $ | 2,292 | $ | 108,762 | ||||||||
Securities held to maturity:
|
||||||||||||||||
Agency mortgage-backed securities
|
$ | 9 | $ | 0 | $ | 0 | $ | 9 | ||||||||
Total securities held to maturity
|
$ | 9 | $ | 0 | $ | 0 | $ | 9 |
Securities Available for Sale
|
Securities Held to Maturity
|
|||||||||||||||
Amortized
Cost
|
Fair
Value
|
Amortized
Cost
|
Fair
Value
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Due in one year or less
|
$ | 120 | $ | 121 | $ | 0 | $ | 0 | ||||||||
Due after one year through five
years
|
15,679 | 15,786 | 0 | 0 | ||||||||||||
Due after five years through
ten years
|
20,366 | 20,852 | 0 | 0 | ||||||||||||
Due after ten years
|
14,149 | 14,703 | 0 | 0 | ||||||||||||
50,314 | 51,462 | 0 | 0 | |||||||||||||
Mortgage-backed securities and
CMO
|
46,596 | 46,681 | 6 | 6 | ||||||||||||
$ | 96,910 | $ | 98,143 | $ | 6 | $ | 6 |
(Dollars in thousands)
|
Number of
Investment
|
Fair
Value
|
Gross
Unrealized
|
|||||||||
Continuous loss position less than twelve months:
|
||||||||||||
Agency mortgage-backed securities
|
7 | $ | 5,925 | $ | 21 | |||||||
Agency CMO
|
2 | 1,317 | 21 | |||||||||
Agency notes and bonds
|
2 | 1,198 | 2 | |||||||||
Municipal obligations
|
9 | 2,291 | 8 | |||||||||
Total less than twelve months
|
20 | 10,731 | 51 | |||||||||
Continuous loss position more than twelve months:
|
||||||||||||
Agency mortgage-backed securities
|
6 | 5,986 | 58 | |||||||||
Agency CMO
|
9 | 7,306 | 129 | |||||||||
Agency notes and bonds
|
7 | 7,586 | 47 | |||||||||
Municipal obligations
|
9 | 4,146 | 70 | |||||||||
Total more than twelve months
|
31 | 25,024 | 304 | |||||||||
Total securities available for sale
|
51 | $ | 35,755 | $ | 355 |
(In thousands)
|
2014
|
2013
|
||||||
Real estate mortgage loans:
|
||||||||
Residential
|
$ | 106,679 | $ | 107,029 | ||||
Land
|
11,028 | 10,309 | ||||||
Residential construction
|
10,347 | 14,423 | ||||||
Commercial real estate
|
78,314 | 76,496 | ||||||
Commercial real estate construction
|
1,422 | 1,715 | ||||||
Commercial business loans
|
28,282 | 21,956 | ||||||
Consumer loans:
|
||||||||
Home equity and second mortgage loans
|
37,513 | 34,815 | ||||||
Automobile loans
|
25,274 | 23,983 | ||||||
Loans secured by savings accounts
|
1,018 | 1,138 | ||||||
Unsecured loans
|
3,316 | 3,541 | ||||||
Other consumer loans
|
5,075 | 4,824 | ||||||
Gross loans
|
308,268 | 300,229 | ||||||
Less undisbursed portion of loans in process
|
(3,325 | ) | (7,142 | ) | ||||
Principal loan balance
|
304,943 | 293,087 | ||||||
Deferred loan origination fees, net
|
506 | 341 | ||||||
Allowance for loan losses
|
(4,846 | ) | (4,922 | ) | ||||
Loans, net
|
$ | 300,603 | $ | 288,506 |
Residential
Real Estate
|
Land
|
Construction
|
Commercial Real Estate
|
Commercial Business
|
Home Equity and Second Mortgage
|
Other Consumer
|
Total
|
|||||||||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||||||||||
December 31, 2014
:
|
||||||||||||||||||||||||||||||||
Principal loan balance
|
$ | 106,679 | $ | 11,028 | $ | 8,444 | $ | 78,314 | $ | 28,282 | $ | 37,513 | $ | 34,683 | $ | 304,943 | ||||||||||||||||
Accrued interest receivable
|
368 | 48 | 20 | 186 | 131 | 131 | 152 | 1,036 | ||||||||||||||||||||||||
Net deferred loan origination fees and costs
|
49 | 4 | (1 | ) | (20 | ) | (7 | ) | 481 | 0 | 506 | |||||||||||||||||||||
Recorded investment in loans
|
$ | 107,096 | $ | 11,080 | $ | 8,463 | $ | 78,480 | $ | 28,406 | $ | 38,125 | $ | 34,835 | $ | 306,485 | ||||||||||||||||
December 31, 2013
:
|
||||||||||||||||||||||||||||||||
Principal loan balance
|
$ | 107,029 | $ | 10,309 | $ | 8,996 | $ | 76,496 | $ | 21,956 | $ | 34,815 | $ | 33,486 | $ | 293,087 | ||||||||||||||||
Accrued interest receivable
|
427 | 49 | 22 | 202 | 56 | 126 | 168 | 1,050 | ||||||||||||||||||||||||
Net deferred loan origination fees and costs
|
52 | 2 | 0 | (32 | ) | (9 | ) | 328 | 0 | 341 | ||||||||||||||||||||||
Recorded investment in loans
|
$ | 107,508 | $ | 10,360 | $ | 9,018 | $ | 76,666 | $ | 22,003 | $ | 35,269 | $ | 33,654 | $ | 294,478 |
Residential
Real Estate
|
Land
|
Construction
|
Commercial Real Estate
|
Commercial Business
|
Home Equity and Second Mortgage
|
Other Consumer
|
Total
|
|||||||||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||||||||||
Allowance for Loan Losses:
|
||||||||||||||||||||||||||||||||
Beginning balance
|
$ | 811 | $ | 152 | $ | 63 | $ | 1,284 | $ | 1,446 | $ | 877 | $ | 289 | $ | 4,922 | ||||||||||||||||
Provisions
|
(69 | ) | 49 | (3 | ) | 211 | 23 | (195 | ) | 174 | 190 | |||||||||||||||||||||
Charge-offs
|
(140 | ) | 0 | 0 | 0 | (6 | ) | (154 | ) | (320 | ) | (620 | ) | |||||||||||||||||||
Recoveries
|
7 | 0 | 0 | 6 | 17 | 192 | 132 | 354 | ||||||||||||||||||||||||
Ending balance
|
$ | 609 | $ | 201 | $ | 60 | $ | 1,501 | $ | 1,480 | $ | 720 | $ | 275 | $ | 4,846 | ||||||||||||||||
Ending allowance balance attributable to loans:
|
||||||||||||||||||||||||||||||||
Individually evaluated for impairment
|
$ | 47 | $ | 0 | $ | 0 | $ | 11 | $ | 1,293 | $ | 0 | $ | 0 | $ | 1,351 | ||||||||||||||||
Collectively evaluated for impairment
|
562 | 201 | 60 | 1,490 | 187 | 720 | 275 | 3,495 | ||||||||||||||||||||||||
Ending balance
|
$ | 609 | $ | 201 | $ | 60 | $ | 1,501 | $ | 1,480 | $ | 720 | $ | 275 | $ | 4,846 | ||||||||||||||||
Recorded Investment in Loans:
|
||||||||||||||||||||||||||||||||
Individually evaluated for impairment
|
$ | 1,411 | $ | 16 | $ | 0 | $ | 1,819 | $ | 1,642 | $ | 151 | $ | 0 | $ | 5,039 | ||||||||||||||||
Collectively evaluated for impairment
|
105,685 | 11,064 | 8,463 | 76,661 | 26,764 | 37,974 | 34,835 | 301,446 | ||||||||||||||||||||||||
Ending balance
|
$ | 107,096 | $ | 11,080 | $ | 8,463 | $ | 78,480 | $ | 28,406 | $ | 38,125 | $ | 34,835 | $ | 306,485 |
Residential
Real Estate
|
Land
|
Construction
|
Commercial Real Estate
|
Commercial Business
|
Home Equity and Second Mortgage
|
Other Consumer
|
Total
|
|||||||||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||||||||||
Allowance for Loan Losses:
|
||||||||||||||||||||||||||||||||
Beginning balance
|
$ | 922 | $ | 71 | $ | 0 | $ | 1,310 | $ | 1,223 | $ | 919 | $ | 291 | $ | 4,736 | ||||||||||||||||
Provisions
|
182 | 83 | 63 | 47 | 169 | 4 | 177 | 725 | ||||||||||||||||||||||||
Charge-offs
|
(353 | ) | (2 | ) | 0 | (90 | ) | (20 | ) | (90 | ) | (337 | ) | (892 | ) | |||||||||||||||||
Recoveries
|
60 | 0 | 0 | 17 | 74 | 44 | 158 | 353 | ||||||||||||||||||||||||
Ending balance
|
$ | 811 | $ | 152 | $ | 63 | $ | 1,284 | $ | 1,446 | $ | 877 | $ | 289 | $ | 4,922 | ||||||||||||||||
Ending allowance balance attributable to loans:
|
||||||||||||||||||||||||||||||||
Individually evaluated for impairment
|
$ | 112 | $ | 0 | $ | 0 | $ | 145 | $ | 1,259 | $ | 13 | $ | 0 | $ | 1,529 | ||||||||||||||||
Collectively evaluated for impairment
|
699 | 152 | 63 | 1,139 | 187 | 864 | 289 | 3,393 | ||||||||||||||||||||||||
Ending balance
|
$ | 811 | $ | 152 | $ | 63 | $ | 1,284 | $ | 1,446 | $ | 877 | $ | 289 | $ | 4,922 | ||||||||||||||||
Recorded Investment in Loans:
|
||||||||||||||||||||||||||||||||
Individually evaluated for impairment
|
$ | 2,040 | $ | 120 | $ | 0 | $ | 2,586 | $ | 1,898 | $ | 276 | $ | 0 | $ | 6,920 | ||||||||||||||||
Collectively evaluated for impairment
|
105,468 | 10,240 | 9,018 | 74,080 | 20,105 | 34,993 | 33,654 | 287,558 | ||||||||||||||||||||||||
Ending balance
|
$ | 107,508 | $ | 10,360 | $ | 9,018 | $ | 76,666 | $ | 22,003 | $ | 35,269 | $ | 33,654 | $ | 294,478 |
|
·
|
Underwriting Standards – Management reviews the findings of periodic internal audit loan reviews, independent outsourced loan reviews and loan reviews performed by the banking regulators to evaluate the risk associated with changes in underwriting standards. At December 31, 2014 and 2013, management assessed the risk associated with this component as neutral, requiring no adjustment to the historical loss factors.
|
|
·
|
Economic Conditions – Management analyzes trends in housing and unemployment data in the Harrison, Floyd and Clark counties of Indiana, the Company’s primary market area, to evaluate the risk associated with economic conditions. Due to a decrease in new home construction and an increase in unemployment in the Company’s primary market area, management assigned a risk factor of 1.20 for this component at December 31, 2014 and 2013.
|
|
·
|
Past Due Loans – Management analyzes trends in past due loans for the Company to evaluate the risk associated with delinquent loans. In general, past due loan ratios have remained at elevated levels compared to historical amounts since 2007, and management assigned a risk factor of 1.20 for this component at December 31, 2014 and 2013.
|
|
·
|
Other Internal and External Factors – This component includes management’s consideration of other qualitative factors such as loan portfolio composition. The Company has focused on the origination of commercial business and real estate loans in an effort to convert the Company’s balance sheet from that of a traditional thrift institution to a commercial bank. In addition, the Company has increased its investment in mortgage loans in which it does not hold a first lien position. Commercial loans and second mortgage loans generally entail greater credit risk than residential mortgage loans secured by a first lien. As a result of changes in the loan portfolio composition and other factors, management has maintained the elevated risk factor of 1.30 for this component at December 31, 2014 and 2013.
|
Recorded
Investment
|
Unpaid
Principal
|
Average
Related
|
Interest
Recorded
|
Income
Recognized
|
||||||||||||||||
(In thousands)
|
||||||||||||||||||||
Loans with no related allowance recorded
:
|
||||||||||||||||||||
Residential real estate
|
$ | 1,141 | $ | 1,446 | $ | 0 | $ | 1,293 | $ | 26 | ||||||||||
Land
|
16 | 18 | 0 | 96 | 0 | |||||||||||||||
Construction
|
0 | 0 | 0 | 52 | 0 | |||||||||||||||
Commercial real estate
|
1,777 | 1,808 | 0 | 1,626 | 70 | |||||||||||||||
Commercial business
|
0 | 0 | 0 | 113 | 0 | |||||||||||||||
Home equity and second mortgage
|
71 | 87 | 0 | 147 | 2 | |||||||||||||||
Other consumer
|
0 | 0 | 0 | 0 | 0 | |||||||||||||||
$ | 3,005 | $ | 3,359 | $ | 0 | $ | 3,327 | $ | 98 | |||||||||||
Loans with an allowance recorded
:
|
||||||||||||||||||||
Residential real estate
|
$ | 270 | $ | 304 | $ | 47 | $ | 369 | $ | 0 | ||||||||||
Land
|
0 | 0 | 0 | 1 | 0 | |||||||||||||||
Construction
|
0 | 0 | 0 | 0 | 0 | |||||||||||||||
Commercial real estate
|
42 | 65 | 11 | 656 | 0 | |||||||||||||||
Commercial business
|
1,642 | 1,909 | 1,293 | 1,696 | 0 | |||||||||||||||
Home equity and second mortgage
|
80 | 98 | 0 | 46 | 0 | |||||||||||||||
Other consumer
|
0 | 0 | 0 | 0 | 0 | |||||||||||||||
$ | 2,034 | $ | 2,376 | $ | 1,351 | $ | 2,768 | $ | 0 | |||||||||||
Total
:
|
||||||||||||||||||||
Residential real estate
|
$ | 1,411 | $ | 1,750 | $ | 47 | $ | 1,662 | $ | 26 | ||||||||||
Land
|
16 | 18 | 0 | 97 | 0 | |||||||||||||||
Construction
|
0 | 0 | 0 | 52 | 0 | |||||||||||||||
Commercial real estate
|
1,819 | 1,873 | 11 | 2,282 | 70 | |||||||||||||||
Commercial business
|
1,642 | 1,909 | 1,293 | 1,809 | 0 | |||||||||||||||
Home equity and second mortgage
|
151 | 185 | 0 | 193 | 2 | |||||||||||||||
Other consumer
|
0 | 0 | 0 | 0 | 0 | |||||||||||||||
$ | 5,039 | $ | 5,735 | $ | 1,351 | $ | 6,095 | $ | 98 |
Recorded
Investment
|
Unpaid
Principal
|
Average
Related
|
Interest
Recorded
|
Income
Recognized
|
||||||||||||||||
(In thousands)
|
||||||||||||||||||||
Loans with no related allowance recorded
:
|
||||||||||||||||||||
Residential real estate
|
$ | 1,591 | $ | 1,869 | $ | 0 | $ | 1,508 | $ | 32 | ||||||||||
Land
|
120 | 131 | 0 | 124 | 0 | |||||||||||||||
Construction
|
0 | 0 | 0 | 173 | 0 | |||||||||||||||
Commercial real estate
|
1,637 | 1,643 | 0 | 1,410 | 63 | |||||||||||||||
Commercial business
|
189 | 209 | 0 | 38 | 4 | |||||||||||||||
Home equity and second mortgage
|
254 | 268 | 0 | 164 | 5 | |||||||||||||||
Other consumer
|
0 | 0 | 0 | 0 | 0 | |||||||||||||||
$ | 3,791 | $ | 4,120 | $ | 0 | $ | 3,417 | $ | 104 | |||||||||||
Loans with an allowance recorded
:
|
||||||||||||||||||||
Residential real estate
|
$ | 449 | $ | 487 | $ | 112 | $ | 624 | $ | 2 | ||||||||||
Land
|
0 | 0 | 0 | 1 | 0 | |||||||||||||||
Construction
|
0 | 0 | 0 | 0 | 0 | |||||||||||||||
Commercial real estate
|
949 | 1,048 | 145 | 1,108 | 0 | |||||||||||||||
Commercial business
|
1,709 | 1,909 | 1,259 | 1,801 | 0 | |||||||||||||||
Home equity and second mortgage
|
22 | 22 | 13 | 47 | 0 | |||||||||||||||
Other consumer
|
0 | 0 | 0 | 0 | 0 | |||||||||||||||
$ | 3,129 | $ | 3,466 | $ | 1,529 | $ | 3,581 | $ | 2 | |||||||||||
Total
:
|
||||||||||||||||||||
Residential real estate
|
$ | 2,040 | $ | 2,356 | $ | 112 | $ | 2,132 | $ | 34 | ||||||||||
Land
|
120 | 131 | 0 | 125 | 0 | |||||||||||||||
Construction
|
0 | 0 | 0 | 173 | 0 | |||||||||||||||
Commercial real estate
|
2,586 | 2,691 | 145 | 2,518 | 63 | |||||||||||||||
Commercial business
|
1,898 | 2,118 | 1,259 | 1,839 | 4 | |||||||||||||||
Home equity and second mortgage
|
276 | 290 | 13 | 211 | 5 | |||||||||||||||
Other consumer
|
0 | 0 | 0 | 0 | 0 | |||||||||||||||
$ | 6,920 | $ | 7,586 | $ | 1,529 | $ | 6,998 | $ | 106 |
December 31, 2014
|
December 31, 2013
|
|||||||||||||||||||||||
Nonaccrual
Loans
|
Loans 90+ Days
Past Due
Still Accruing
|
Total Nonperforming Loans
|
Nonaccrual
Loans
|
Loans 90+ Days
Past Due
Still Accruing
|
Total Nonperforming Loans
|
|||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Residential real estate
|
$ | 919 | $ | 68 | $ | 987 | $ | 1,533 | $ | 180 | $ | 1,713 | ||||||||||||
Land
|
16 | 0 | 16 | 120 | 0 | 120 | ||||||||||||||||||
Construction
|
0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Commercial real estate
|
433 | 0 | 433 | 1,456 | 0 | 1,456 | ||||||||||||||||||
Commercial business
|
1,642 | 0 | 1,642 | 1,898 | 0 | 1,898 | ||||||||||||||||||
Home equity and second mortgage
|
129 | 14 | 143 | 252 | 39 | 291 | ||||||||||||||||||
Other consumer
|
0 | 3 | 3 | 0 | 8 | 8 | ||||||||||||||||||
Total
|
$ | 3,139 | $ | 85 | $ | 3,224 | $ | 5,259 | $ | 227 | $ | 5,486 |
30-59 Days
Past Due
|
60-89 Days
Past Due
|
Over 90 Days
Past Due
|
Total
Past Due
|
Current
|
Total
Loans
|
|||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||
Residential real estate
|
$ | 3,070 | $ | 551 | $ | 308 | $ | 3,929 | $ | 103,167 | $ | 107,096 | ||||||||||||
Land
|
24 | 124 | 0 | 148 | 10,932 | 11,080 | ||||||||||||||||||
Construction
|
0 | 0 | 0 | 0 | 8,463 | 8,463 | ||||||||||||||||||
Commercial real estate
|
54 | 133 | 42 | 229 | 78,251 | 78,480 | ||||||||||||||||||
Commercial business
|
0 | 0 | 0 | 0 | 28,406 | 28,406 | ||||||||||||||||||
Home equity and second mortgage
|
153 | 23 | 97 | 273 | 37,852 | 38,125 | ||||||||||||||||||
Other consumer
|
263 | 26 | 3 | 292 | 34,543 | 34,835 | ||||||||||||||||||
Total
|
$ | 3,564 | $ | 857 | $ | 450 | $ | 4,871 | $ | 301,614 | $ | 306,485 |
30-59 Days
Past Due
|
60-89 Days
Past Due
|
Over 90 Days
Past Due
|
Total
Past Due
|
Current
|
Total
Loans
|
|||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||
Residential real estate
|
$ | 3,160 | $ | 830 | $ | 701 | $ | 4,691 | $ | 102,817 | $ | 107,508 | ||||||||||||
Land
|
162 | 109 | 12 | 283 | 10,077 | 10,360 | ||||||||||||||||||
Construction
|
0 | 0 | 0 | 0 | 9,018 | 9,018 | ||||||||||||||||||
Commercial real estate
|
231 | 500 | 49 | 780 | 75,886 | 76,666 | ||||||||||||||||||
Commercial business
|
0 | 0 | 189 | 189 | 21,814 | 22,003 | ||||||||||||||||||
Home equity and second mortgage
|
411 | 24 | 132 | 567 | 34,702 | 35,269 | ||||||||||||||||||
Other consumer
|
296 | 34 | 8 | 338 | 33,316 | 33,654 | ||||||||||||||||||
Total
|
$ | 4,260 | $ | 1,497 | $ | 1,091 | $ | 6,848 | $ | 287,630 | $ | 294,478 |
Residential
Real Estate
|
Land
|
Construction
|
Commercial Real Estate
|
Commercial Business
|
Home Equity and Second Mortgage
|
Other Consumer
|
Total
|
|||||||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||||||||
December 31, 2014
:
|
||||||||||||||||||||||||||||||
Pass
|
$ | 104,780 | $ | 7,969 | $ | 7,722 | $ | 73,204 | $ | 26,137 | $ | 37,860 | $ | 34,770 | $ | 292,442 | ||||||||||||||
Special mention
|
105 | 94 | 741 | 2,648 | 298 | 2 | 49 | 3,937 | ||||||||||||||||||||||
Substandard
|
1,292 | 3,001 | 0 | 2,195 | 329 | 134 | 16 | 6,967 | ||||||||||||||||||||||
Doubtful
|
919 | 16 | 0 | 433 | 1,642 | 129 | 0 | 3,139 | ||||||||||||||||||||||
Loss
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
Total
|
$ | 107,096 | $ | 11,080 | $ | 8,463 | $ | 78,480 | $ | 28,406 | $ | 38,125 | $ | 34,835 | $ | 306,485 | ||||||||||||||
December 31, 2013
:
|
||||||||||||||||||||||||||||||
Pass
|
$ | 103,594 | $ | 7,096 | $ | 9,018 | $ | 71,893 | $ | 19,328 | $ | 34,693 | $ | 33,627 | $ | 279,249 | ||||||||||||||
Special mention
|
756 | 0 | 0 | 2,627 | 458 | 198 | 27 | 4,066 | ||||||||||||||||||||||
Substandard
|
1,625 | 3,144 | 0 | 690 | 319 | 126 | 0 | 5,904 | ||||||||||||||||||||||
Doubtful
|
1,533 | 120 | 0 | 1,456 | 1,898 | 252 | 0 | 5,259 | ||||||||||||||||||||||
Loss
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
Total
|
$ | 107,508 | $ | 10,360 | $ | 9,018 | $ | 76,666 | $ | 22,003 | $ | 35,269 | $ | 33,654 | $ | 294,478 |
December 31, 2014
|
December 31, 2013
|
|||||||||||||||||||||||||||||||
Accruing
|
Nonaccrual
|
Total
|
Related Allowance for Loan Losses
|
Accruing
|
Nonaccrual
|
Total
|
Related Allowance for Loan Losses
|
|||||||||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||||||||||
Residential real estate
|
$ | 492 | $ | 166 | $ | 658 | $ | 6 | $ | 508 | $ | 226 | $ | 734 | $ | 45 | ||||||||||||||||
Commercial real estate
|
1,386 | 338 | 1,724 | 0 | 1,130 | 0 | 1,130 | 0 | ||||||||||||||||||||||||
Commercial business
|
0 | 1,642 | 1,642 | 1,292 | 0 | 1,709 | 1,709 | 1,259 | ||||||||||||||||||||||||
Home equity and second mortgage
|
22 | 0 | 22 | 0 | 24 | 0 | 24 | 0 | ||||||||||||||||||||||||
Total
|
$ | 1,900 | $ | 2,146 | $ | 4,046 | $ | 1,298 | $ | 1,662 | $ | 1,935 | $ | 3,597 | $ | 1,304 |
Number of Contracts
|
Pre-Modification Outstanding Balance
|
Post-Modification Outstanding Balance
|
||||||||||
(In thousands)
|
||||||||||||
Commercial real estate
|
5 | $ | 641 | $ | 641 | |||||||
Total
|
5 | $ | 641 | $ | 641 |
Number of Contracts
|
Pre-Modification Outstanding Balance
|
Post-Modification Outstanding Balance
|
||||||||||
(In thousands)
|
||||||||||||
Residential real estate
|
5 | $ | 310 | $ | 310 | |||||||
Total
|
5 | $ | 310 | $ | 310 |
(In thousands)
|
2014
|
2013
|
||||||
Land and land improvements
|
$ | 3,256 | $ | 3,256 | ||||
Leasehold improvements
|
56 | 56 | ||||||
Office buildings
|
10,605 | 10,391 | ||||||
Furniture, fixtures and equipment
|
4,867 | 4,620 | ||||||
18,784 | 18,323 | |||||||
Less accumulated depreciation
|
8,576 | 7,976 | ||||||
Totals
|
$ | 10,208 | $ | 10,347 |
Year ending December 31:
|
(In thousands)
|
|||
2015
|
$ | 40,704 | ||
2016
|
14,993 | |||
2017
|
11,336 | |||
2018
|
7,412 | |||
2019 and thereafter
|
1,326 | |||
Total
|
$ | 75,771 |
(Dollars in thousands)
|
2014
|
2013
|
||||||
Outstanding balance at year end
|
$ | 0 | $ | 9,310 | ||||
Weighted average interest rate at year end
|
0.00 | % | 0.26 | % | ||||
Weighted average interest rate during the year
|
0.26 | % | 0.25 | % | ||||
Average daily balance
|
$ | 4,601 | $ | 11,015 | ||||
Maximum month-end balance during the year
|
$ | 10,617 | $ | 13,041 | ||||
Debt securities underlying the agreements at December 31:
|
||||||||
Amortized cost
|
$ | 0 | $ | 13,322 | ||||
Fair value
|
$ | 0 | $ | 12,920 |
(In thousands)
|
2014
|
2013
|
||||||
Current
|
$ | 2,027 | $ | 2,055 | ||||
Deferred
|
285 | 200 | ||||||
Totals
|
$ | 2,312 | $ | 2,255 |
(In thousands)
|
2014
|
2013
|
||||||
Provision at federal statutory tax rate
|
$ | 2,692 | $ | 2,496 | ||||
State income tax-net of federal tax benefit
|
170 | 188 | ||||||
Change in state statutory tax rate
|
15 | 26 | ||||||
Tax-exempt interest income
|
(422 | ) | (402 | ) | ||||
Increase in cash value of life insurance
|
(95 | ) | (54 | ) | ||||
Captive insurance net premiums
|
(57 | ) | 0 | |||||
Other
|
9 | 1 | ||||||
Totals
|
$ | 2,312 | $ | 2,255 | ||||
Effective tax rate
|
29.2 | % | 30.7 | % |
(In thousands)
|
2014
|
2013
|
||||||
Deferred tax assets (liabilities):
|
||||||||
Deferred compensation plans
|
$ | 92 | $ | 102 | ||||
Allowance for loan losses
|
1,679 | 1,661 | ||||||
Accrued early retirement
|
18 | 32 | ||||||
Other
|
157 | 157 | ||||||
Unrealized loss on securities available for sale
|
0 | 443 | ||||||
Deferred tax assets
|
1,946 | 2,395 | ||||||
Depreciation
|
(647 | ) | (664 | ) | ||||
Deferred loan fees and costs
|
(171 | ) | (86 | ) | ||||
FHLB stock dividends
|
(98 | ) | (99 | ) | ||||
Prepaid expenses
|
(231 | ) | 0 | |||||
Unrealized gain on securities available for sale
|
(434 | ) | 0 | |||||
Deferred tax liabilities
|
(1,581 | ) | (849 | ) | ||||
Net deferred tax asset
|
$ | 365 | $ | 1,546 |
(In thousands)
|
2014
|
2013
|
||||||
Loan commitments:
|
||||||||
Fixed rate
|
$ | 351 | $ | 865 | ||||
Adjustable rate
|
7,062 | 5,453 | ||||||
Unused lines of credit on credit cards
|
4,732 | 3,821 | ||||||
Undisbursed commercial and personal lines of credit
|
19,390 | 19,484 | ||||||
Undisbursed portion of construction loans in process
|
3,325 | 7,142 | ||||||
Undisbursed portion of home equity lines of credit
|
24,206 | 20,980 | ||||||
Total commitments to extend credit
|
$ | 59,066 | $ | 57,745 |
Actual
|
Minimum
For Capital
|
Minimum
To Be Well
|
||||||||||||||||||||||
(Dollars in thousands)
|
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
||||||||||||||||||
|
||||||||||||||||||||||||
As of December 31, 2014
:
|
||||||||||||||||||||||||
Total capital (to risk
weighted assets)
|
$ | 53,545 | 15.80 | % | $ | 27,105 | 8.00 | % | $ | 33,881 | 10.00 | % | ||||||||||||
Tier I capital (to risk
weighted assets)
|
$ | 49,302 | 14.55 | % | N/A | $ | 20,329 | 6.00 | % | |||||||||||||||
Tier I capital (to adjusted
total assets)
|
$ | 49,302 | 10.59 | % | $ | 18,624 | 4.00 | % | $ | 23,280 | 5.00 | % | ||||||||||||
Tangible capital (to
adjusted total assets)
|
$ | 49,302 | 10.59 | % | $ | 6,984 | 1.50 | % | N/A | |||||||||||||||
As of December 31, 2013
:
|
||||||||||||||||||||||||
Total capital (to risk
weighted assets)
|
$ | 51,780 | 16.11 | % | $ | 25,713 | 8.00 | % | $ | 32,141 | 10.00 | % | ||||||||||||
Tier I capital (to risk
weighted assets)
|
$ | 47,751 | 14.86 | % | N/A | $ | 19,285 | 6.00 | % | |||||||||||||||
Tier I capital (to adjusted
total assets)
|
$ | 47,751 | 10.89 | % | $ | 17,534 | 4.00 | % | $ | 21,917 | 5.00 | % | ||||||||||||
Tangible capital (to
adjusted total assets)
|
$ | 47,751 | 10.89 | % | $ | 6,575 | 1.50 | % | N/A |
Fair Value Measurements Using
|
||||||||||||||||||||
(
In thousands
)
|
Carrying
Value
|
Fair
Value
|
Level 1
|
Level 2
|
Level 3
|
|||||||||||||||
December 31, 2014:
|
||||||||||||||||||||
Financial assets:
|
||||||||||||||||||||
Cash and cash equivalents
|
$ | 33,243 | $ | 33,243 | $ | 33,243 | $ | 0 | $ | 0 | ||||||||||
Interest-bearing time deposits
|
8,270 | 8,370 | 0 | 8,370 | 0 | |||||||||||||||
Securities available for sale
|
100,226 | 100,226 | 2,083 | 98,143 | 0 | |||||||||||||||
Securities held to maturity
|
6 | 6 | 0 | 6 | 0 | |||||||||||||||
Loans held for sale
|
1,608 | 1,641 | 0 | 1,641 | 0 | |||||||||||||||
Loans, net
|
300,603 | 301,864 | 0 | 0 | 301,864 | |||||||||||||||
FHLB stock
|
2,241 | 2,241 | 0 | 2,241 | 0 | |||||||||||||||
Accrued interest receivable
|
1,580 | 1,580 | 0 | 1,580 | 0 | |||||||||||||||
Cost method investment
(included in other assets)
|
711 | 711 | 0 | 711 | 0 | |||||||||||||||
Financial liabilities:
|
||||||||||||||||||||
Deposits
|
412,636 | 412,282 | 0 | 0 | 412,282 | |||||||||||||||
Accrued interest payable
|
127 | 127 | 0 | 127 | 0 | |||||||||||||||
December 31, 2013:
|
||||||||||||||||||||
Financial assets:
|
||||||||||||||||||||
Cash and cash equivalents
|
$ | 11,136 | $ | 11,136 | $ | 11,136 | $ | 0 | $ | 0 | ||||||||||
Interest-bearing time deposits
|
4,425 | 4,458 | 0 | 4,458 | 0 | |||||||||||||||
Securities available for sale
|
108,762 | 108,762 | 3,198 | 105,564 | 0 | |||||||||||||||
Securities held to maturity
|
9 | 9 | 0 | 9 | 0 | |||||||||||||||
Loans held for sale
|
1,611 | 1,644 | 0 | 1,644 | 0 | |||||||||||||||
Loans, net
|
288,506 | 287,753 | 0 | 0 | 287,753 | |||||||||||||||
FHLB stock
|
2,820 | 2,820 | 0 | 2,820 | 0 | |||||||||||||||
Accrued interest receivable
|
1,716 | 1,716 | 0 | 1,716 | 0 | |||||||||||||||
Cost method investment
(included in other assets)
|
540 | 540 | 0 | 540 | 0 | |||||||||||||||
Financial liabilities:
|
||||||||||||||||||||
Deposits
|
373,830 | 373,883 | 0 | 0 | 373,883 | |||||||||||||||
Retail repurchase agreements
|
9,310 | 9,310 | 0 | 9,310 | 0 | |||||||||||||||
Advances from FHLB
|
5,500 | 5,500 | 0 | 5,500 | 0 | |||||||||||||||
Accrued interest payable
|
192 | 192 | 0 | 192 | 0 |
|
Level 1:
|
Inputs to the valuation methodology are quoted prices, unadjusted, for identical assets or liabilities in active markets. A quoted market price in an active market provides the most reliable evidence of fair value and shall be used to measure fair value whenever available.
|
|
Level 2:
|
Inputs to the valuation methodology include quoted market prices for similar assets or liabilities in active markets; quoted market prices for identical or similar assets or liabilities in markets that are not active; or inputs that are derived principally from or can be corroborated by observable market data by correlation or other means.
|
|
Level 3:
|
Inputs to the valuation methodology are unobservable and significant to the fair value measurement. Level 3 assets and liabilities include financial instruments whose value is determined using discounted cash flow methodologies, as well as instruments for which the determination of fair value requires significant management judgment or estimation.
|
Carrying Value
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
(In thousands)
|
||||||||||||||||
December 31, 2014
:
|
||||||||||||||||
Assets Measured on a Recurring Basis
|
||||||||||||||||
Securities available for sale:
|
||||||||||||||||
Agency mortgage-backed securities
|
$ | 0 | $ | 32,296 | $ | 0 | $ | 32,296 | ||||||||
Agency CMO
|
0 | 14,385 | 0 | 14,385 | ||||||||||||
Agency notes and bonds
|
0 | 18,120 | 0 | 18,120 | ||||||||||||
Municipal obligations
|
0 | 33,342 | 0 | 33,342 | ||||||||||||
Mutual funds
|
2,083 | 0 | 0 | 2,083 | ||||||||||||
Total securities available for sale
|
$ | 2,083 | $ | 98,143 | $ | 0 | $ | 100,226 | ||||||||
Assets Measured on a Nonrecurring Basis
|
||||||||||||||||
Impaired loans:
|
||||||||||||||||
Residential real estate
|
$ | 0 | $ | 0 | $ | 1,364 | $ | 1,364 | ||||||||
Land
|
0 | 0 | 16 | 16 | ||||||||||||
Commercial real estate
|
0 | 0 | 1,808 | 1,808 | ||||||||||||
Commercial business
|
0 | 0 | 349 | 349 | ||||||||||||
Home equity and second mortgage
|
0 | 0 | 151 | 151 | ||||||||||||
Total impaired loans
|
$ | 0 | $ | 0 | $ | 3,688 | $ | 3,688 | ||||||||
Loans held for sale
|
$ | 0 | $ | 1,608 | $ | 0 | $ | 1,608 | ||||||||
Foreclosed real estate:
|
||||||||||||||||
Residential real estate
|
$ | 0 | $ | 0 | $ | 78 | $ | 78 | ||||||||
Total foreclosed real estate
|
$ | 0 | $ | 0 | $ | 78 | $ | 78 |
Carrying Value
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
(In thousands)
|
||||||||||||||||
December 31, 2013
:
|
||||||||||||||||
Assets Measured on a Recurring Basis
|
||||||||||||||||
Securities available for sale:
|
||||||||||||||||
Agency mortgage-backed securities
|
$ | 0 | $ | 18,369 | $ | 0 | $ | 18,369 | ||||||||
Agency CMO
|
0 | 20,241 | 0 | 20,241 | ||||||||||||
Agency notes and bonds
|
0 | 30,914 | 0 | 30,914 | ||||||||||||
Municipal obligations
|
0 | 36,040 | 0 | 36,040 | ||||||||||||
Mutual funds
|
3,198 | 0 | 0 | 3,198 | ||||||||||||
Total securities available for sale
|
$ | 3,198 | $ | 105,564 | $ | 0 | $ | 108,762 | ||||||||
Assets Measured on a Nonrecurring Basis
|
||||||||||||||||
Impaired loans:
|
||||||||||||||||
Residential real estate
|
$ | 0 | $ | 0 | $ | 1,928 | $ | 1,928 | ||||||||
Land
|
0 | 0 | 120 | 120 | ||||||||||||
Commercial real estate
|
0 | 0 | 2,441 | 2,441 | ||||||||||||
Commercial business
|
0 | 0 | 639 | 639 | ||||||||||||
Home equity and second mortgage
|
0 | 0 | 263 | 263 | ||||||||||||
Total impaired loans
|
$ | 0 | $ | 0 | $ | 5,391 | $ | 5,391 | ||||||||
Loans held for sale
|
$ | 0 | $ | 1,611 | $ | 0 | $ | 1,611 | ||||||||
Foreclosed real estate:
|
||||||||||||||||
Residential real estate
|
$ | 0 | $ | 0 | $ | 466 | $ | 466 | ||||||||
Total foreclosed real estate
|
$ | 0 | $ | 0 | $ | 466 | $ | 466 |
As of December 31
,
|
||||||||
2014
|
2013
|
|||||||
Assets:
|
||||||||
Cash and cash equivalents
|
$ | 309 | $ | 132 | ||||
Other assets
|
911 | 670 | ||||||
Investment in subsidiaries
|
55,906 | 52,430 | ||||||
$ | 57,126 | $ | 53,232 | |||||
Liabilities and Equity:
|
||||||||
Accrued expenses
|
$ | 5 | $ | 5 | ||||
Stockholders' equity
|
57,121 | 53,227 | ||||||
$ | 57,126 | $ | 53,232 |
Years Ended December 31
,
|
||||||||
2014
|
2013
|
|||||||
Dividend and other income
|
$ | 4,120 | $ | 2,847 | ||||
Other operating expenses
|
(376 | ) | (253 | ) | ||||
Income before income taxes and equity in
undistributed net income of subsidiaries
|
3,744 | 2,594 | ||||||
Income tax benefit
|
145 | 98 | ||||||
Income before equity in undistributed net
income of subsidiaries
|
3,889 | 2,692 | ||||||
Equity in undistributed net income of subsidiaries
|
1,705 | 2,382 | ||||||
Net income
|
$ | 5,594 | $ | 5,074 |
Years Ended December 31
,
|
||||||||
2014
|
2013
|
|||||||
Operating Activities:
|
||||||||
Net income
|
$ | 5,594 | $ | 5,074 | ||||
Adjustments to reconcile net income to cash and cash
equivalents provided by operating activities:
|
||||||||
Equity in undistributed net income of subsidiaries
|
(1,705 | ) | (2,382 | ) | ||||
Net change in other assets and liabilities
|
(71 | ) | (9 | ) | ||||
Net cash provided by operating activities
|
3,818 | 2,683 | ||||||
Investing Activities:
|
||||||||
Investment in captive insurance subsidiary
|
(250 | ) | 0 | |||||
Cost method equity investment
|
(171 | ) | (540 | ) | ||||
Net cash used in investing activities
|
(421 | ) | (540 | ) | ||||
Financing Activities:
|
||||||||
Purchase of treasury stock
|
(908 | ) | (19 | ) | ||||
Cash dividends paid
|
(2,312 | ) | (2,228 | ) | ||||
Net cash used in financing activities
|
(3,220 | ) | (2,247 | ) | ||||
Net increase (decrease) in cash and cash equivalents
|
177 | (104 | ) | |||||
Cash and cash equivalents at beginning of year
|
132 | 236 | ||||||
Cash and cash equivalents at end of year
|
$ | 309 | $ | 132 |
Years Ended December 31
,
|
||||||||
2014
|
2013
|
|||||||
(In thousands, except for share and per share data)
|
||||||||
Basic and Diluted:
|
||||||||
Earnings:
|
||||||||
Net income attributable to First Capital, Inc.
|
$ | 5,594 | $ | 5,074 | ||||
Shares:
|
||||||||
Weighted average common shares outstanding
|
2,755,588 | 2,784,690 | ||||||
Net income per common share attributable
to First Capital, Inc., basic and diluted
|
$ | 2.03 | $ | 1.82 |
Years Ended December 31
,
|
||||||||
(In thousands)
|
2014
|
2013
|
||||||
Cash payments for
:
|
||||||||
Interest
|
$ | 1,209 | $ | 1,751 | ||||
Income taxes
|
2,464 | 2,357 | ||||||
Noncash investing activities:
|
||||||||
Transfers from loans to real estate
acquired through foreclosure
|
$ | 262 | $ | 1,149 | ||||
Proceeds from sales of foreclosed
real estate financed through loans
|
177 | 526 |
First
Quarter
|
Second
Quarter
|
Third
Quarter
|
Fourth
Quarter
|
|||||||||||||
2014
|
(In thousands, except per share data)
|
|||||||||||||||
|
||||||||||||||||
Interest income
|
$ | 4,502 | $ | 4,663 | $ | 4,646 | $ | 4,588 | ||||||||
Interest expense
|
298 | 297 | 280 | 269 | ||||||||||||
Net interest income
|
4,204 | 4,366 | 4,366 | 4,319 | ||||||||||||
Provision for loan losses
|
25 | 90 | 75 | 0 | ||||||||||||
Net interest income after
provision for loan losses
|
4,179 | 4,276 | 4,291 | 4,319 | ||||||||||||
Noninterest income
|
979 | 1,287 | 1,438 | 1,232 | ||||||||||||
Noninterest expenses
|
3,299 | 3,349 | 3,591 | 3,843 | ||||||||||||
Income before income taxes
|
1,859 | 2,214 | 2,138 | 1,708 | ||||||||||||
Income tax expense
|
559 | 692 | 611 | 450 | ||||||||||||
|
||||||||||||||||
Net income
|
1,300 | 1,522 | 1,527 | 1,258 | ||||||||||||
Less: net income attributable to
noncontrolling interest in subsidiary
|
3 | 4 | 3 | 3 | ||||||||||||
Net income attributable to
First Capital, Inc.
|
$ | 1,297 | $ | 1,518 | $ | 1,524 | $ | 1,255 | ||||||||
Earnings per common share
attributable to First Capital, Inc.:
|
||||||||||||||||
Basic
|
$ | 0.47 | $ | 0.55 | $ | 0.56 | $ | 0.45 | ||||||||
Diluted
|
$ | 0.47 | $ | 0.55 | $ | 0.56 | $ | 0.45 |
2013
|
||||||||||||||||
Interest income
|
$ | 4,576 | $ | 4,554 | $ | 4,649 | $ | 4,632 | ||||||||
Interest expense
|
458 | 440 | 408 | 347 | ||||||||||||
Net interest income
|
4,118 | 4,114 | 4,241 | 4,285 | ||||||||||||
Provision for loan losses
|
250 | 225 | 100 | 150 | ||||||||||||
Net interest income after
provision for loan losses
|
3,868 | 3,889 | 4,141 | 4,135 | ||||||||||||
Noninterest income
|
1,162 | 1,188 | 1,211 | 1,079 | ||||||||||||
Noninterest expenses
|
3,322 | 3,306 | 3,270 | 3,433 | ||||||||||||
Income before income taxes
|
1,708 | 1,771 | 2,082 | 1,781 | ||||||||||||
Income tax expense
|
511 | 557 | 653 | 534 | ||||||||||||
|
||||||||||||||||
Net income
|
1,197 | 1,214 | 1,429 | 1,247 | ||||||||||||
Less: net income attributable to
noncontrolling interest in subsidiary
|
3 | 4 | 3 | 3 | ||||||||||||
Net income attributable to
First Capital, Inc.
|
$ | 1,194 | $ | 1,210 | $ | 1,426 | $ | 1,244 | ||||||||
Earnings per common share
attributable to First Capital, Inc.:
|
||||||||||||||||
Basic
|
$ | 0.43 | $ | 0.43 | $ | 0.51 | $ | 0.45 | ||||||||
Diluted
|
$ | 0.43 | $ | 0.43 | $ | 0.51 | $ | 0.45 |
ATTEST:
|
FIRST HARRISON BANK
|
|||
/s/ Jill Keinsley
|
By:
|
/s/ Michael L. Shireman
|
||
[SEAL]
|
For the Entire Board of Directors
|
|||
ATTEST:
|
FIRST CAPITAL, INC.
|
|||
/s/ Jill Keinsley
|
By:
|
/s/ Gerald L. Uhl
|
||
[SEAL]
|
For the Entire Board of Directors
|
|||
WITNESS:
|
EXECUTIVE
|
|||
/s/ Jill Keinsley
|
/s/ William W. Harrod
|
ATTEST:
|
FIRST HARRISON BANK
|
|||
/s/ Jill Keinsley
|
By:
|
/s/ Michael L. Shireman
|
||
[SEAL]
|
For the Entire Board of Directors
|
|||
ATTEST:
|
FIRST CAPITAL, INC.
|
|||
/s/ Jill Keinsley
|
By:
|
/s/ Gerald L. Uhl
|
||
[SEAL]
|
For the Entire Board of Directors
|
|||
WITNESS:
|
EXECUTIVE
|
|||
/s/ Jill Keinsley
|
/s/ Chris Frederick
|
ATTEST:
|
FIRST HARRISON BANK
|
|||
/s/ Jill Keinsley
|
By:
|
/s/ Michael L. Shireman
|
||
[SEAL]
|
For the Entire Board of Directors
|
|||
ATTEST:
|
FIRST CAPITAL, INC.
|
|||
/s/ Jill Keinsley
|
By:
|
/s/ Gerald L. Uhl
|
||
[SEAL]
|
For the Entire Board of Directors
|
|||
WITNESS:
|
EXECUTIVE
|
|||
/s/ Jill Keinsley
|
/s/ Dennis Thomas
|
Date: March 27, 2015
|
/s/ William W. Harrod
|
|
William W. Harrod
President and Chief Executive Officer
(principal executive officer)
|
Date: March 27, 2015
|
/s/ Michael C. Frederick
|
|
Michael C. Frederick
Executive Vice President, Chief Financial Officer
and Treasurer
(principal financial officer)
|
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the period covered by the Report.
|
/s/ William W. Harrod
|
||
William W. Harrod
President and Chief Executive Officer
|
/s/ Michael C. Frederick
|
||
Michael C. Frederick
Executive Vice President, Chief Financial Officer
and Treasurer
|