New Jersey
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22-3665653
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(State or Other Jurisdiction of
Incorporation or Organization)
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IRS Employer Identification Number)
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2650 Route 130, P.O. Box 634, Cranbury, NJ 08512
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(Address of Principal Executive Offices, including Zip Code)
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(609) 655-4500
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(Registrant’s telephone number, including area code)
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Common Stock, No Par Value
Stock Purchase Rights Relating to Common Stock, No Par Value
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None
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Large accelerated filer
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o |
Accelerated filer
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o |
Non-accelerated filer
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o |
Smaller reporting company
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x |
(Do not check if a smaller reporting company)
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FORM 10-K
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PART I
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1
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13
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20
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21
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22
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22
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PART II
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22
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23
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23
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43
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43
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43
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43
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45
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PART III
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45
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45
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45
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45
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45
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PART IV
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45
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50
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·
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personal service;
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·
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expansion of its branch network;
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·
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innovative product offerings; and
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·
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technological advances and e-commerce.
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·
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allows bank holding companies meeting management, capital and Community Reinvestment Act standards to engage in a substantially broader range of non-banking activities than is permissible for a bank holding company, including insurance underwriting and making merchant banking investments in commercial and financial companies; if a bank holding company elects to become a financial holding company, it files a certification, effective in 30 days, and thereafter may engage in certain financial activities without further approvals;
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·
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allows banks to establish subsidiaries to engage in certain activities which a financial holding company could engage in, if the bank meets certain management, capital and Community Reinvestment Act standards;
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·
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allows insurers and other financial services companies to acquire banks and removes various restrictions that currently apply to bank holding company ownership of securities firms and mutual fund advisory companies; and establishes the overall regulatory structure applicable to financial holding companies that also engage in insurance and securities operations.
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·
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a prohibition on personal loans made or arranged by the issuer to its directors and executive officers (except for loans made by a bank subject to Regulation O of the Federal Reserve Board);
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·
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independence requirements for audit committee members;
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·
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disclosure of whether at least one member of the audit committee is a “financial expert” (as such term is defined by the Securities and Exchange Commission (“SEC”) and if not, why not;
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·
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independence requirements for outside auditors;
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·
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a prohibition by a company’s registered public accounting firm from performing statutorily mandated audit services for the company if the company’s chief executive officer, chief financial officer, comptroller, chief accounting officer or any person serving in equivalent positions had been employed by such firm and participated in the audit of such company during the one-year period preceding the audit initiation date;
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·
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certification of financial statements and annual and quarterly reports by the principal executive officer and the principal financial officer;
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·
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the forfeiture of bonuses or other incentive-based compensation and profits from the sale of an issuer’s securities by directors and senior officers in the twelve month period following initial publication of any financial statements that later require restatement due to corporate misconduct;
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disclosure of off-balance sheet transactions;
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·
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two-business day filing requirements for insiders filing Forms 4;
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·
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disclosure of a code of ethics for financial officers and filing a Form 8-K for a change or waiver of such code;
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“real time” filing of periodic reports;
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·
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posting of certain SEC filings and other information on the company’s website;
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·
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the reporting of securities violations “up the ladder” by both in-house and outside attorneys;
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·
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restrictions on the use of non-GAAP financial measures;
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·
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the formation of a public accounting oversight board; and
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·
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various increased criminal penalties for violations of securities laws.
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·
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quarterly fluctuations in our operating and financial results;
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·
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operating results that vary from the expectations of management, securities analysts and investors;
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changes in expectations as to our future financial performance, including financial estimates by securities analysts and investors;
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events negatively impacting the financial services industry which result in a general decline in the market valuation of our common stock;
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·
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announcements of material developments affecting our operations or our dividend policy;
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future sales of our equity securities;
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·
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new laws or regulations or new interpretations of existing laws or regulations applicable to our business;
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·
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changes in accounting standards, policies, guidance, interpretations or principles; and
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·
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general domestic economic and market conditions.
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Location
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Leased or
Owned
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Original Year Leased
or Acquired
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Year of Lease
Expiration
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Main Office
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||||
2650 Route 130
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Leased
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1989
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2017
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Cranbury, New Jersey
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||||
Village Office
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74 North Main Street
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Owned
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2005
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---
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Cranbury, New Jersey
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Plainsboro Office
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Plainsboro Village Center
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Leased
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1998
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2021
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11 Shalks Crossing Road
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Plainsboro, New Jersey
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Hamilton Office
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3659 Nottingham Way
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Leased
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1999
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2014
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Hamilton, New Jersey
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Princeton Office
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The Windrows at Princeton Forrestal
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Leased
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2001
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2016
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2000 Windrow Drive
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Princeton, New Jersey
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Perth Amboy Office
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145 Fayette Street
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Leased
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2003
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2018
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Perth Amboy, New Jersey
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||||
Jamesburg Office
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||||
1 Harrison Street
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Owned
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2002
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---
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Jamesburg, New Jersey
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||||
West Windsor Office
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||||
44 Washington Road
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Leased
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2004
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2019
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Princeton Jct, New Jersey
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Fort Lee Office
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180 Main Street
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Leased
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2006
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2014
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Fort Lee, New Jersey
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Hightstown Office
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140 Mercer Street
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Leased
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2007
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2014
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Hightstown, New Jersey
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Mortgage Warehouse Funding Office
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285 Davidson Avenue
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Leased
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2009
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2015
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Somerset, New Jersey
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Lawrenceville Property
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150 Lawrenceville-Pennington Road,
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Owned
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2009
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---
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Lawrenceville, New Jersey
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South River Operations Center
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Leased
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2010
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2015
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1246 South River Road, Bldg. 2
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Cranbury, New Jersey
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Rocky Hill Office
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995 Route 518
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Owned
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2011
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---
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Skillman, New Jersey
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Hopewell Office
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86 East Broad Street
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Owned
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2011
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---
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Hopewell, New Jersey
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Hillsborough Office
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32 New Amwell Road
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Owned
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2011
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---
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Hillsborough, New Jersey
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2012
(1)
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2011
(1)
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|||||||||||||||
High
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Low
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High
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Low
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|||||||||||||
First Quarter
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$ | 8.16 | $ | 5.74 | $ | 8.61 | $ | 7.39 | ||||||||
Second Quarter
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$ | 8.58 | $ | 7.03 | $ | 7.85 | $ | 6.57 | ||||||||
Third Quarter
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$ | 8.62 | $ | 7.45 | $ | 7.70 | $ | 5.47 | ||||||||
Fourth Quarter
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$ | 8.48 | $ | 7.80 | $ | 6.35 | $ | 4.99 |
(1)
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Prices have been retroactively adjusted for the 5% stock dividend declared December 20, 2012 and paid January 31, 2013 to shareholders of record on January 14, 2013.
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Period
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Total
Number of
Shares
Purchased
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Average
Price Paid
Per Share
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Total Number
of
Shares
Purchased
As Part of
Publicly
Announced
Plan or
Program
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Maximum
Number of
Shares That
May
Yet be
Purchased
Under the
Plan or
Program
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|||||||||||||
Beginning
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Ending
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||||||||||||||||
October 1, 2012
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October 31, 2012
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-
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$
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-
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-
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187,559
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|||||||||||
November 1, 2012
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November 30, 2012
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2,337 (2)
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8.95
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-
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187,559
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||||||||||||
December 1, 2012
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December 31, 2012
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-
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-
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-
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187,559
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||||||||||||
Total
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2,337 (2)
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$
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8.95
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-
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187,559
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|
(1)
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The Company’s common stock repurchase program covers a maximum of 225,824 shares of common stock of the Company, representing 5% of the outstanding common stock of the Company on July 21, 2005, as adjusted for subsequent stock dividends.
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(2)
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Shares repurchased by the Company from an employee not pursuant to the Company’s common stock repurchase program.
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(yields on a tax-equivalent basis)
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2012
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2011
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2010
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|||||||||||||||||||||||||||||||||
Average
Balance
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Interest
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Average
Yield
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Average
Balance
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Interest
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Average
Yield
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Average
Balance
|
Interest |
Average
Yield
|
||||||||||||||||||||||||||||
Assets:
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||||||||||||||||||||||||||||||||||||
Federal Funds Sold/Short-Term
Investments
|
$ | 31,405,164 | $ | 81,697 | 0.26 | % | $ | 49,462,259 | $ | 126,729 | 0.26 | % | $ | 18,009,601 | $ | 45,023 | 0.25 | % | ||||||||||||||||||
Investment Securities:
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||||||||||||||||||||||||||||||||||||
Taxable
|
170,089,425 | 4,434,108 | 2.61 | % | 200,218,556 | 5,422,190 | 2.71 | % | 197,134,646 | 4,782,984 | 2.43 | % | ||||||||||||||||||||||||
Tax-exempt (4)
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51,118,158 | 2,482,451 | 4.86 | % | 45,377,934 | 2,208,221 | 4.87 | % | 11,961,266 | 670,657 | 5.61 | % | ||||||||||||||||||||||||
Total
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221,207,583 | 6,916,559 | 3.13 | % | 245,596,490 | 7,630,411 | 3.11 | % | 209,095,912 | 5,453,641 | 2.61 | % | ||||||||||||||||||||||||
Loan Portfolio (1):
|
||||||||||||||||||||||||||||||||||||
Construction
|
56,802,621 | 3,673,709 | 6.47 | % | 60,260,579 | 3,865,334 | 6.41 | % | 71,590,569 | 4,373,609 | 6.11 | % | ||||||||||||||||||||||||
Residential Real Estate
|
11,673,215 | 603,748 | 5.17 | % | 11,323,077 | 705,087 | 6.23 | % | 10,866,758 | 635,681 | 5.85 | % | ||||||||||||||||||||||||
Home Equity
|
10,226,081 | 574,910 | 5.62 | % | 12,194,011 | 698,822 | 5.73 | % | 13,500,060 | 786,419 | 5.83 | % | ||||||||||||||||||||||||
Commercial and Commercial
Real Estate
|
145,308,719 | 10,873,003 | 7.48 | % | 134,446,807 | 10,153,005 | 7.55 | % | 139,672,655 | 10,456,470 | 7.49 | % | ||||||||||||||||||||||||
Mortgage Warehouse Lines
|
204,852,547 | 9,734,919 | 4.75 | % | 131,955,449 | 6,459,208 | 4.89 | % | 139,430,511 | 6,707,820 | 4.81 | % | ||||||||||||||||||||||||
Installment
|
341,400 | 23,419 | 6.86 | % | 452,504 | 31,342 | 6.93 | % | 523,354 | 39,409 | 7.53 | % | ||||||||||||||||||||||||
All Other Loans
|
34,382,628 | 1,159,794 | 3.37 | % | 24,052,479 | 903,288 | 3.76 | % | 30,644,358 | 1020,458 | 3.33 | % | ||||||||||||||||||||||||
Total
|
463,587,211 | 26,643,502 | 5.75 | % | 374,684,906 | 22,816,086 | 6.09 | % | 406,228,265 | 24,019,866 | 5.91 | % | ||||||||||||||||||||||||
Total Interest-Earning
Assets
|
716,199,958 | 33,641,758 | 4.70 | % | 669,743,655 | 30,573,226 | 4.56 | % | 633,333,778 | 29,518,530 | 4.66 | % | ||||||||||||||||||||||||
Allowance for Loan Losses
|
(6,370,415 | ) | (5,959,591 | ) | (5,249,095 | ) | ||||||||||||||||||||||||||||||
Cash and Due From Banks
|
12,570,141 | 13,136,295 | 9,468,512 | |||||||||||||||||||||||||||||||||
Other Assets
|
52,092,249 | 44,527,891 | 29,680,680 | |||||||||||||||||||||||||||||||||
Total Assets
|
$ | 774,491,933 | $ | 721,448,250 | $ | 667,233,875 | ||||||||||||||||||||||||||||||
Liabilities and Shareholders' Equity:
|
||||||||||||||||||||||||||||||||||||
Interest-Bearing Liabilities:
|
||||||||||||||||||||||||||||||||||||
Money Market and NOW Accounts
|
$ | 203,419,423 | $ | 988,999 | 0.49 | % | $ | 172,790,166 | $ | 1,703,342 | 0.99 | % | $ | 121,849,620 | $ | 1,705,233 | 1.40 | % | ||||||||||||||||||
Savings Accounts
|
192,958,737 | 1,163,967 | 0.60 | % | 179,903,197 | 1,387,585 | 0.77 | % | 177,605,496 | 1,896,323 | 1.07 | % | ||||||||||||||||||||||||
Certificates of Deposit under $100,000
|
70,100,750 | 1,077,425 | 1.54 | % | 73,470,718 | 1,260,946 | 1.72 | % | 87,523,084 | 1,525,160 | 1.74 | % | ||||||||||||||||||||||||
Certificates of Deposit of
$100,000 and Over
|
76,526,600 | 1,084,312 | 1.42 | % | 79,898,632 | 1,308,249 | 1.64 | % | 73,573,668 | 1,521,153 | 2.07 | % | ||||||||||||||||||||||||
Other Borrowed Funds
|
17,804,645 | 450,462 | 2.53 | % | 18,400,493 | 444,185 | 2.41 | % | 35,883,534 | 1,100,354 | 3.07 | % | ||||||||||||||||||||||||
Trust Preferred Securities
|
18,557,000 | 385,977 | 2.08 | % | 18,557,000 | 683,057 | 3.68 | % | 18,557,000 | 1,071,275 | 5.69 | % | ||||||||||||||||||||||||
Total Interest-Bearing
Liabilities
|
579,367,155 | 5,151,142 | 0.89 | % | 543,020,206 | 6,787,364 | 1.25 | % | 514,992,402 | 8,819,498 | 1.71 | % | ||||||||||||||||||||||||
Net Interest Spread (2)
|
3.81 | % | 3.31 | % | 2.95 | % | ||||||||||||||||||||||||||||||
Demand Deposits
|
127,558,073 | 117,876,295 | 87,482,143 | |||||||||||||||||||||||||||||||||
Other Liabilities
|
8,912,516 | 8,800,907 | 7,497,664 | |||||||||||||||||||||||||||||||||
Total Liabilities
|
715,837,744 | 669,697,408 | 609,972,209 | |||||||||||||||||||||||||||||||||
Shareholders' Equity
|
58,654,189 | 51,750,842 | 57,261,666 | |||||||||||||||||||||||||||||||||
Total Liabilities and Shareholders' Equity
|
$ | 774,491,933 | $ | 721,448,250 | $ | 667,233,875 | ||||||||||||||||||||||||||||||
Net Interest Margin (3)
|
$ | 28,490,616 | 3.98 | % | $ | 23,785,862 | 3.55 | % | $ | 20,699,032 | 3.27 | % | ||||||||||||||||||||||||
(1)
|
Loan origination fees are considered an adjustment to interest income. For the purpose of calculating loan yields, average loan balances include nonaccrual loans with no related interest income. Please refer to Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation under the heading “Non-Performing Assets” for a discussion of the Bank’s policy with regard to non-accrual loans.
|
(2)
|
The interest rate spread is the difference between the average yield on interest earning assets and the average rate paid on interest bearing liabilities.
|
(3)
|
The net interest margin is equal to net interest income divided by average interest earning assets.
|
(4)
|
Tax equivalent basis.
|
Rate/Volume Table
|
Amount of Increase (Decrease)
|
|||||||||||||||||||||||
2012 versus 2011
|
2011versus 2010
|
|||||||||||||||||||||||
Due to Change in:
|
Due to Change in:
|
|||||||||||||||||||||||
(Tax-equivalent basis)
|
Volume
|
Rate
|
Total
|
Volume
|
Rate
|
Total
|
||||||||||||||||||
Interest Income:
|
||||||||||||||||||||||||
Loans:
|
||||||||||||||||||||||||
Construction
|
$ |
(224,718
|
)
|
$ |
33,093
|
$ |
(191,625
|
)
|
$ |
(707,655
|
)
|
$ |
199,380
|
$ |
(508,275
|
)
|
||||||||
Residential Real Estate
|
20,250
|
(121,589
|
)
|
(101,339
|
)
|
27,403
|
42,003
|
69,406
|
||||||||||||||||
Home Equity
|
(111,632
|
)
|
(12,280
|
)
|
(123,912
|
)
|
(75,120
|
)
|
(12,477
|
)
|
(87,597
|
)
|
||||||||||||
Commercial and Commercial Real Estate
|
817,096
|
(97,093
|
)
|
720,003
|
(389,342
|
)
|
85,877
|
(303,465
|
)
|
|||||||||||||||
Mortgage Warehouse Lines
|
3,512,559
|
(236,848
|
)
|
3,275,711
|
(359,853
|
)
|
111,241
|
(248,612
|
)
|
|||||||||||||||
Installment
|
(7,653
|
)
|
(270
|
)
|
(7,923
|
)
|
(5,131
|
)
|
(2,936
|
)
|
(8,067
|
)
|
||||||||||||
All Other Loans
|
369,363
|
(112,857
|
)
|
256,506
|
(234,225
|
)
|
117,055
|
(117,170
|
)
|
|||||||||||||||
Total Loans
|
4,375,263
|
(547,842
|
)
|
3,827,421
|
(1,743,923
|
)
|
540,143
|
(1,203,780
|
)
|
|||||||||||||||
Investment Securities :
|
||||||||||||||||||||||||
Taxable
|
(802,182
|
)
|
(185,901
|
)
|
(988,083
|
)
|
81,084
|
558,122
|
639,206
|
|||||||||||||||
Tax-exempt
|
279,157
|
(4,931
|
)
|
274,226
|
1,750,376
|
(212,812
|
)
|
1,537,564
|
||||||||||||||||
Total Investment Securities
|
(523,026
|
)
|
(190,831
|
)
|
(713,857
|
)
|
1,831,460
|
345,310
|
2,176,770
|
|||||||||||||||
Federal Funds Sold / Short-Term Investments
|
(45,032
|
)
|
0
|
(45,032
|
)
|
433,110
|
(351,404
|
)
|
81,706
|
|||||||||||||||
Total Interest Income
|
3,807,205
|
(738,673
|
)
|
3,068,532
|
520,647
|
534,049
|
1,054,696
|
|||||||||||||||||
Interest Expense :
|
||||||||||||||||||||||||
Money Market and NOW Accounts
|
$ |
149,846
|
(864,189
|
)
|
$ |
(714,343
|
)
|
$ |
605,430
|
$ |
(607,321
|
)
|
$ |
(1,891
|
)
|
|||||||||
Savings Accounts
|
91,373
|
(314,991
|
)
|
(223,618
|
)
|
24,332
|
(533,070
|
)
|
(508,738
|
)
|
||||||||||||||
Certificates of Deposit under $100,000
|
(55,598
|
)
|
(127,923
|
)
|
(183,521
|
)
|
(248,115
|
)
|
(16,099
|
)
|
(234,214
|
)
|
||||||||||||
Certificates of Deposit of $100,000 and Over
|
(51,731
|
)
|
(172,206
|
)
|
(223,937
|
)
|
117,195
|
(330,099
|
)
|
(212,904
|
)
|
|||||||||||||
Other Borrowed Funds
|
(15,082
|
)
|
21,359
|
6,277
|
(478,034
|
)
|
(178,135
|
)
|
(656,169
|
)
|
||||||||||||||
Trust Preferred Securities
|
0
|
(297,080
|
)
|
(297,080
|
)
|
0
|
(388,218
|
)
|
(388,218
|
)
|
||||||||||||||
Total Interest Expense
|
118,808
|
(1,755,030
|
)
|
(1,636,222
|
)
|
20,808
|
(2,052,942
|
)
|
(2,032,134
|
)
|
||||||||||||||
Net Interest Income
|
$ |
3,688,397
|
$ |
1,016,357
|
$ |
4,704,754
|
$ |
499,839
|
$ |
2,586,991
|
$ |
3,086,830
|
||||||||||||
Non-interest Expenses
|
Year ended December 31,
|
|||||||
2012
|
2011
|
|||||||
Salaries and employee benefits
|
$
|
12,434,900
|
$
|
11,219,439
|
||||
Occupancy expense
|
2,470,577
|
2,391,281
|
||||||
Equipment expense
|
862,765
|
928,554
|
||||||
Telephone
|
351,183
|
365,218
|
||||||
Marketing
|
185,738
|
183,467
|
||||||
Data processing services
|
1,056,629
|
1,171,136
|
||||||
Regulatory, professional and consulting fees
|
726,556
|
931,339
|
||||||
FDIC deposit insurance
|
565,027
|
646,365
|
||||||
Other real estate owned expenses
|
3,553,779
|
732,693
|
||||||
Amortization of intangible assets
|
267,967
|
210,154
|
||||||
Other expenses
|
1,295,440
|
1,025,384
|
||||||
Total
|
$
|
23,770,561
|
$
|
19,805,030
|
||||
Gross
|
Gross
|
|||||||||||||||
Amortized
|
Unrealized
|
Unrealized
|
Fair
|
|||||||||||||
2012
|
Cost
|
Gains
|
Losses
|
Value
|
||||||||||||
Available for sale-
|
||||||||||||||||
U. S. Treasury securities and
|
||||||||||||||||
obligations of U.S. Government
|
||||||||||||||||
sponsored corporations (“GSE”) and agencies
|
$
|
29,384,595
|
$
|
137,847
|
$
|
(26,907)
|
$
|
29,495,535
|
||||||||
Residential collateralized mortgage obligations- GSE
|
6,349,310
|
283,355
|
0
|
6,632,665
|
||||||||||||
Residential collateralized mortgage obligations-
non GSE
|
3,811,933
|
119,323
|
(7,074)
|
3,924,182
|
||||||||||||
Residential mortgage backed securities - GSE
|
24,912,948
|
1,576,387
|
0
|
26,489,335
|
||||||||||||
Obligations of State and Political subdivisions
|
20,793,222
|
375,416
|
(486,337)
|
20.682,301
|
||||||||||||
Trust preferred debt securities-single issuer
|
2,466,009
|
0
|
(467,643)
|
1,998,366
|
||||||||||||
Corporate debt securities
|
17,797,681
|
325,731
|
(23,131)
|
18,100,281
|
||||||||||||
Restricted stock
|
2,493,300
|
0
|
0
|
2,493,300
|
||||||||||||
Mutual fund
|
25,000
|
0
|
0
|
25,000
|
||||||||||||
$
|
108,033,998
|
$
|
2,818,059
|
$
|
(1,011,092)
|
$
|
109,840,965
|
Amortized
Cost
|
Other-Than-
Temporary
Impairment
Recognized In
Accumulated
Other
Comprehensive
Income
|
Carrying
Value
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
|||||||||||||||||||
Held to maturity-
|
||||||||||||||||||||||||
Obligations of U.S. Government
|
||||||||||||||||||||||||
sponsored corporations (“GSE”)
and agencies
|
$ | 3,073,957 | $ | 0 | $ | 3,073,957 | $ | 33,213 | $ | 0 | $ | 3,107,170 | ||||||||||||
Residential collateralized mortgage
obligations – GSE
|
19,660,625 | 0 | 19,660,625 | 1,021,556 | 0 | 20,682,181 | ||||||||||||||||||
Residential collateralized mortgage obligations-non-GSE
|
13,387,974 | 0 | 13,387,974 | 796,892 | (289 | ) | 14,184,577 | |||||||||||||||||
Residential mortgage backed
securities – GSE
|
19,950,190 | 0 | 19,950,190 | 849,040 | (944 | ) | 20,798,286 | |||||||||||||||||
Obligations of State and Political subdivisions
|
42,815,706 | 0 | 42,815,706 | 3,039,935 | 0 | 45,855,641 | ||||||||||||||||||
Trust preferred debt securities -
pooled
|
656,662 | (500,944 | ) | 155,718 | 0 | (9,638 | ) | 146,080 | ||||||||||||||||
Corporate debt securities
|
16,983,730 | 0 | 16,983,730 | 84,443 | (2,745 | ) | 17,065,428 | |||||||||||||||||
$ | 116,528,844 | $ | (500,944 | ) | $ | 116,027,900 | $ | 5,825,079 | $ | (13,616 | ) | $ | 121,839,363 |
Gross
|
Gross
|
|||||||||||||||
Amortized
|
Unrealized
|
Unrealized
|
Fair
|
|||||||||||||
2011
|
Cost
|
Gains
|
Losses
|
Value
|
||||||||||||
Available for sale-
|
||||||||||||||||
U. S. Treasury securities and
|
||||||||||||||||
obligations of U.S. Government
|
||||||||||||||||
sponsored corporations (“GSE”) and agencies
|
$
|
19,400,856
|
$
|
71,833
|
$
|
0
|
$
|
19,472,689
|
||||||||
Residential collateralized mortgage obligations - GSE
|
13,421,544
|
476,589
|
0
|
13,898,133
|
||||||||||||
Residential collateralized mortgage obligations –
non- GSE
|
4,177,115
|
143,480
|
(20,151)
|
4,300,444
|
||||||||||||
Residential mortgage backed securities – GSE
|
40,655,157
|
2,032,059
|
(7)
|
42,687,209
|
||||||||||||
Obligations of State and
|
||||||||||||||||
Political subdivisions
|
5,366,145
|
339,747
|
(5,378)
|
5,700,514
|
||||||||||||
Trust preferred debt securities
|
2,463,296
|
0
|
(712,055)
|
1,751,241
|
||||||||||||
Corporate debt securities
|
1,443,762
|
0
|
(7,818)
|
1,435,944
|
||||||||||||
Restricted stock
|
4,412,600
|
0
|
0
|
4,412,600
|
||||||||||||
Mutual fund
|
25,000
|
0
|
0
|
25,000
|
||||||||||||
$
|
91,365,475
|
$
|
3,063,708
|
$
|
(745,409)
|
$
|
93,683,774
|
Amortized
Cost
|
Other-Than-
Temporary
Impairment
Recognized In
Accumulated
Other
Comprehensive
Loss
|
Carrying
Value
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
|||||||||||||||||||
Held to maturity-
|
||||||||||||||||||||||||
Obligations of U.S. Government
|
||||||||||||||||||||||||
sponsored corporations (“GSE”)
and agencies
|
$ | 11,118,649 | $ | 0 | $ | 11,118,649 | $ | 59,571 | $ | 0 | $ | 11,178,220 | ||||||||||||
Residential collateralized mortgage
obligations – GSE
|
24,705,415 | 0 | 24,705,415 | 1,007,737 | 0 | 25,713,152 | ||||||||||||||||||
Residential collateralized mortgage
obligations-non-GSE
|
14,386,327 | 0 | 14,386,327 | 704,792 | 0 | 15,091,119 | ||||||||||||||||||
Residential mortgage backed
securities – GSE
|
20,260,354 | 0 | 20,260,354 | 801,882 | 0 | 21,062,236 | ||||||||||||||||||
Obligations of State and
|
||||||||||||||||||||||||
Political subdivisions
|
46,820,985 | 0 | 46,820,985 | 2,848,587 | (2,507 | ) | 49,667,065 | |||||||||||||||||
Trust preferred debt securities - pooled
|
646,574 | (500,944 | ) | 145,630 | 0 | (142,122 | ) | 3,508 | ||||||||||||||||
Corporate debt securities
|
25,037,063 | 0 | 25,037,063 | 85,701 | (216,784 | ) | 24,905,980 | |||||||||||||||||
$ | 142,975,367 | $ | (500,944 | ) | $ | 142,474,423 | $ | 5,508,270 | $ | (361,413 | ) | $ | 147,621,280 |
Amortized
Cost
|
Fair
Value
|
Weighted
Average
Yield*
|
||||||||||
Available for sale-
|
||||||||||||
Due in one year or less
|
||||||||||||
U.S. Treasury securities and obligations of US
Government sponsored corporations (“GSE”)
and agencies
|
$
|
7,014,714
|
$
|
7,035,000
|
0.76
|
%
|
||||||
Residential mortgage backed securities-GSE
|
65,816
|
68,944
|
4.71
|
%
|
||||||||
Corporate Debt Securities
|
1,414,280
|
1,425,259
|
1.93
|
%
|
||||||||
Restricted Stock
|
2,493,300
|
2,493,300
|
5.25
|
%
|
||||||||
Mutual Fund
|
25,000
|
25,000
|
5.25
|
%
|
||||||||
$
|
11,013,110
|
$
|
11,047,503
|
1.96
|
%
|
|||||||
Due after one year through five years
|
||||||||||||
U.S. Treasury securities and obligations of US
Government sponsored corporations (“GSE”)
and agencies
|
$ |
9,955,805
|
$ |
10,057,800
|
0.70
|
%
|
||||||
Residential mortgage backed securities-GSE
|
269,875
|
289,069
|
5.18
|
%
|
||||||||
Obligations of State and Political subdivisions
|
483,938
|
486,312
|
5.81
|
%
|
||||||||
Corporate Debt Securities
|
15,296,993
|
15,595,542
|
1.99
|
%
|
||||||||
$
|
26,006,611
|
$
|
26,428,723
|
1.60
|
%
|
|||||||
Due after five years through ten years
|
||||||||||||
U.S. Treasury securities and obligations of US
Government sponsored corporations (“GSE”)
and agencies
|
$
|
12,414,076
|
$
|
12,402,735
|
1.70
|
%
|
||||||
Residential collateralized mortgage
obligations-GSE
|
80,751
|
84,935
|
5.33
|
%
|
||||||||
Residential mortgage backed securities-GSE
|
3,015,167
|
3,276,792
|
5.16
|
%
|
||||||||
Obligations of State and Political subdivisions
|
2,701,112
|
2,963,440
|
5.81
|
%
|
||||||||
$
|
18,211,106
|
$
|
18,727,902
|
2.97
|
%
|
|||||||
Due after ten years
|
||||||||||||
Residential collateralized mortgage
obligations-GSE
|
$
|
6,268,559
|
$
|
6,547,730
|
3.21
|
%
|
||||||
Residential collateralized mortgage
obligations-non GSE
|
3,811,933
|
3,924,182
|
3.21
|
%
|
||||||||
Residential mortgage backed securities-GSE
|
21,562,090
|
22,854,530
|
3.64
|
%
|
||||||||
Obligations of State and Political subdivisions
|
17,608,172
|
17,352,549
|
4.10
|
%
|
||||||||
Corporate Debt Securities
|
1,086,408
|
1,079,480
|
2.13
|
%
|
||||||||
Trust Preferred Debt Securities
|
2,466,009
|
1,998,366
|
0.99
|
%
|
||||||||
$
|
52,803,171
|
$
|
53,636,837
|
3.57
|
%
|
|||||||
Total
|
$
|
108,033,998
|
$
|
109,840,965
|
2.54
|
%
|
||||||
Held to maturity-
|
||||||||||||
Due in one year or less
|
||||||||||||
Obligations of US government sponsored corporations
(“GSE”) and agencies
|
$ |
1,500,345
|
$ |
1,508,940
|
0.97
|
%
|
||||||
Obligations of State and Political subdivisions
|
2,865,631
|
2,894,143
|
4.51
|
%
|
||||||||
Corporate Debt Securities
|
15,962,320
|
16,019,453
|
1.56
|
%
|
||||||||
$
|
20,328,296
|
$
|
20,422,536
|
1.93
|
%
|
Due after one year through five years
|
||||||||||||
Obligations of US Government sponsored corporations
(“GSE”) and agencies
|
$
|
1,500,345
|
$
|
1,508,940
|
1.20
|
%
|
||||||
Obligations of State and Political subdivisions
|
2,865,631
|
2,894,143
|
4.75
|
%
|
||||||||
Corporate Debt Securities
|
15,962,320
|
16,019,453
|
3.56
|
%
|
||||||||
$
|
8,807,338
|
$
|
9,119,488
|
3.98
|
%
|
|||||||
Due after five years through ten years
|
||||||||||||
Residential collateralized mortgage
obligations-GSE
|
$
|
333,839
|
$
|
340,078
|
4.94
|
%
|
||||||
Residential mortgage backed securities-GSE
|
3,359,153
|
3,494,362
|
2.55
|
%
|
||||||||
Obligations of State and Political subdivisions
|
22,691,687
|
24,318,500
|
4.78
|
%
|
||||||||
$
|
26,384,679
|
$
|
28,152,940
|
4.50
|
%
|
|||||||
Due after ten years
|
||||||||||||
Residential collateralized mortgage
obligations-GSE
|
$
|
19,326,786
|
$
|
20,342,103
|
3.24
|
%
|
||||||
Residential collateralized mortgage
obligations-non GSE
|
13,387,974
|
14,184,577
|
3.24
|
%
|
||||||||
Residential mortgage backed securities-GSE
|
16,591,037
|
17,303,924
|
3.38
|
%
|
||||||||
Obligations of State and Political subdivisions
|
11,046,072
|
12,167,715
|
5.83
|
%
|
||||||||
Trust Preferred Debt Securities
|
656,662
|
146,080
|
0.89
|
%
|
||||||||
$
|
61,008,531
|
$
|
64,144,399
|
3.72
|
%
|
|||||||
Total
|
$
|
116,528,844
|
$
|
121,839,363
|
3.60
|
%
|
December 31,
|
||||||||||||||||||||||||||||||||||||||||
2012
|
2011
|
2010
|
2009
|
2008
|
||||||||||||||||||||||||||||||||||||
Amount
|
%
|
Amount
|
%
|
Amount
|
%
|
Amount
|
%
|
Amount
|
%
|
|||||||||||||||||||||||||||||||
Construction loans
|
$
|
55,691,393
|
11
|
%
|
$
|
49,285,783
|
10
|
%
|
$
|
67,890,703
|
16
|
%
|
$
|
79,805,278
|
21
|
%
|
$
|
94,163,997
|
25
|
%
|
||||||||||||||||||||
Residential real estate loans
|
10,897,307
|
2
|
%
|
12,885,352
|
3
|
%
|
10,435,038
|
3
|
%
|
10,253,895
|
3
|
%
|
11,078,402
|
3
|
%
|
|||||||||||||||||||||||||
Commercial business
|
57,865,436
|
11
|
%
|
50,784,674
|
11
|
%
|
54,733,172
|
13
|
%
|
57,925,392
|
15
|
%
|
57,528,879
|
15
|
%
|
|||||||||||||||||||||||||
Commercial real estate
|
102,412,694
|
20
|
%
|
99,636,976
|
21
|
%
|
95,277,814
|
23
|
%
|
96,306,097
|
25
|
%
|
90,904,418
|
24
|
%
|
|||||||||||||||||||||||||
Mortgage warehouse lines
|
284,127,530
|
54
|
%
|
249,345,831
|
52
|
%
|
169,575,899
|
41
|
%
|
119,382,078
|
32
|
%
|
106,000,231
|
28
|
%
|
|||||||||||||||||||||||||
Loans to individuals
|
9,643,385
|
2
|
%
|
12,219,640
|
3
|
%
|
13,349,036
|
3
|
%
|
15,554,027
|
4
|
%
|
16,797,194
|
5
|
%
|
|||||||||||||||||||||||||
Deferred loan costs
|
987,086
|
0
|
%
|
1,017,959
|
0
|
%
|
543,753
|
0
|
%
|
489,809
|
0
|
%
|
647,673
|
0
|
%
|
|||||||||||||||||||||||||
All other loans
|
189,279
|
0
|
%
|
255,556
|
0
|
%
|
181,924
|
0
|
%
|
229,159
|
0
|
%
|
227,622
|
0
|
%
|
|||||||||||||||||||||||||
Total
|
$
|
521,814,110
|
100
|
%
|
$
|
475,431,771
|
100
|
%
|
$
|
411,987,339
|
100
|
%
|
$
|
379,945,735
|
100
|
%
|
$
|
377,348,416
|
100
|
%
|
As of December 31, 2012:
|
Maturity Range
|
|||||||||||||
Type
|
Within
One
Year
|
After One But
Within
Five Years
|
After
Five
Years
|
Total
|
||||||||||
Commercial & Commercial Real Estate
|
$
|
34,914,218
|
$
|
33,140,490
|
$
|
92,223,422
|
$
|
160,278,130
|
||||||
Construction Loans
|
49,415,105
|
3,652,067
|
2,624,221
|
55,691,393
|
||||||||||
Total
|
$
|
84,329,323
|
$
|
36,792,557
|
$
|
94,847,643
|
$
|
215,969,523
|
||||||
Fixed rate loans
|
$
|
20,522,827
|
$
|
15,590,709
|
$
|
19,139,044
|
$
|
55,252,580
|
||||||
Floating rate loans
|
63,806,496
|
21,201,848
|
75,708,559
|
160,716,943
|
||||||||||
Total
|
$
|
84,329,323
|
$
|
36,792,557
|
$
|
94,847,643
|
$
|
215,969,523
|
Non-Performing Assets and Loans
|
December 31,
|
|||||||||||||||||||
2012
|
2011
|
2010
|
2009
|
2008
|
||||||||||||||||
Non-Performing loans:
|
||||||||||||||||||||
Loans 90 days or more past due and
still accruing
|
$
|
84,948
|
$
|
0
|
$
|
0
|
$
|
145,898
|
$
|
0
|
||||||||||
Non-accrual loans
|
5,878,554
|
2,991,470
|
8,809,167
|
4,161,628
|
3,351,777
|
|||||||||||||||
Total non-performing loans
|
5,963,502
|
2,991,470
|
8,809,167
|
4,307,526
|
3,351,777
|
|||||||||||||||
Other real estate owned:
|
8,332,601
|
12,409,201
|
4,850,818
|
1,362,621
|
4,296,536
|
|||||||||||||||
Total non-performing assets
|
$
|
14,296,103
|
$
|
15,400,671
|
$
|
13,659,985
|
$
|
5,670,147
|
$
|
7,648,313
|
||||||||||
Non-performing loans to total loans
|
1.14
|
%
|
0.63
|
%
|
2.14
|
%
|
1.13
|
%
|
0.89
|
%
|
||||||||||
Non-performing loans to total loans
excluding warehouse lines
|
2.51
|
%
|
1.32
|
%
|
3.63
|
%
|
1.65
|
%
|
1.24
|
%
|
||||||||||
Non-performing assets to total assets
|
1.70
|
%
|
1.95
|
%
|
2.12
|
%
|
0.84
|
%
|
1.40
|
%
|
||||||||||
Non-performing assets to total assets
excluding mortgage warehouse lines
|
2.57
|
%
|
2.84
|
%
|
2.88
|
%
|
1.02
|
%
|
1.74
|
%
|
||||||||||
Allowance for Loan Losses
|
||||||||||||||||||||
2012
|
2011
|
2010
|
2009
|
2008
|
||||||||||||||||
Balance, beginning of year
|
$
|
5,534,450
|
$
|
5,762,712
|
$
|
4,505,387
|
$
|
3,684,764
|
$
|
3,348,080
|
||||||||||
Provision charged to operating expenses
|
2,149,992
|
2,558,328
|
2,325,000
|
2,553,000
|
640,000
|
|||||||||||||||
Loans charged off:
|
||||||||||||||||||||
Construction loans
|
(57,650
|
)
|
(2,361,783
|
)
|
(450,000
|
)
|
(1,226,754
|
)
|
(53,946
|
)
|
||||||||||
Residential real estate loans
|
(130,694
|
)
|
-
|
-
|
-
|
(31,865
|
)
|
|||||||||||||
Commercial and commercial real
estate loans
|
(275,888
|
)
|
(437,699
|
)
|
(609,468
|
)
|
(511,791
|
)
|
(220,565
|
)
|
||||||||||
Loans to individuals
|
(83,859
|
)
|
(22,087
|
)
|
(1,973)
|
-
|
||||||||||||||
Lease financing
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
All other loans
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
(548,091
|
)
|
(2,799,482
|
)
|
(1,081,555
|
)
|
(1,740,518
|
)
|
(306,376
|
)
|
|||||||||||
Recoveries:
|
||||||||||||||||||||
Construction loans
|
3,403
|
8,951
|
-
|
-
|
-
|
|||||||||||||||
Residential real estate loans
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Commercial and commercial real
estate loans
|
11,458
|
3,941
|
13,880
|
2,575
|
3,060
|
|||||||||||||||
Loans to individuals
|
-
|
-
|
-
|
5,566
|
-
|
|||||||||||||||
Lease financing
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
All other loans
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
14,861
|
12,892
|
13,880
|
8,141
|
3,060
|
||||||||||||||||
Net (charge offs) / recoveries
|
(533,230
|
)
|
(2,786,590
|
)
|
(1,067,675
|
)
|
(1,732,377
|
)
|
(303,316
|
)
|
||||||||||
Balance, end of period
|
$
|
7,151,212
|
$
|
5,534,450
|
$
|
5,762,712
|
$
|
4,505,387
|
$
|
3,684,764
|
||||||||||
Loans:
|
||||||||||||||||||||
At year end
|
$
|
521,814,110
|
$
|
475,431,771
|
$
|
411,987,339
|
$
|
379,945,735
|
$
|
377,348,416
|
||||||||||
Average during the year
|
444,064,283
|
362,289,390
|
387,575,677
|
384,314,052
|
340,666,744
|
|||||||||||||||
Net charge offs to average loans
outstanding
|
(0.12
|
%)
|
(0.77
|
%)
|
(0.28
|
%)
|
(0.45
|
%)
|
(0.09
|
%)
|
||||||||||
Allowance for loan losses to:
|
||||||||||||||||||||
Total loans at year end
|
1.37
|
%
|
1.16
|
%
|
1.40
|
%
|
1.19
|
%
|
0.98
|
%
|
||||||||||
Total loans at year end excluding
Mortgage warehouse lines
|
2.41
|
%
|
1.95
|
%
|
2.06
|
%
|
1.52
|
%
|
1.18
|
%
|
||||||||||
Non-performing loans
|
119.92
|
%
|
185.01
|
%
|
65.42
|
%
|
104.59
|
%
|
109.93
|
%
|
Average Deposit Balances
|
||||||||||||||||||||||||
2012
|
2011
|
2010
|
||||||||||||||||||||||
Average
Balance
|
Percentage
of Total
|
Average
Balance
|
Percentage
of Total
|
Average
Balance
|
Percentage
of Total
|
|||||||||||||||||||
Non-interest bearing demand
deposits
|
$
|
127,558,073
|
19
|
%
|
$
|
117,876,295
|
19
|
%
|
$
|
87,482,143
|
16
|
%
|
||||||||||||
Interest bearing demand deposits
|
203,419,423
|
30
|
%
|
172,790,166
|
28
|
%
|
121,849,620
|
22
|
%
|
|||||||||||||||
Savings deposits
|
192,958,737
|
29
|
%
|
179,903,197
|
29
|
%
|
177,605,496
|
32
|
%
|
|||||||||||||||
Certificates of deposit of $100,000
or more
|
76,526,600
|
11
|
%
|
79,898,632
|
13
|
%
|
73,573,668
|
13
|
%
|
|||||||||||||||
Other certificates of deposit
|
70,100,750
|
11
|
%
|
73,470,718
|
12
|
%
|
87,523,084
|
17
|
%
|
|||||||||||||||
Total
|
$
|
670,563,583
|
100
|
%
|
$
|
623,939,008
|
100
|
%
|
$
|
548,034,011
|
100
|
%
|
||||||||||||
One Year
or Less
|
One to
Three Years
|
Three to
Five Years
|
Over Five
Years
|
Total
|
||||||||||||||||
Standby letters of credit
|
$
|
1,620,362
|
$
|
0
|
$
|
0
|
$
|
0
|
$
|
1,620,362
|
||||||||||
Commitments to extend credit
|
$
|
160,459,141
|
$
|
0
|
$
|
0
|
$
|
0
|
$
|
160,459,141
|
||||||||||
Commitments to sell residential loans
|
$
|
35,960,262
|
$
|
0
|
$
|
0
|
$
|
0
|
$
|
35,960,262
|
|
·
|
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
|
|
·
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that the receipts and expenditures of the Company are being made only in accordance with authorizations of its management and directors; and
|
|
·
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on its financial statements.
|
2.
|
All schedules are omitted because either they are inapplicable or not required, or because the information required therein is included in the Consolidated Financial Statements and Notes thereto.
|
3.
|
Exhibits
|
Exhibit No.
|
Description
|
||
3
|
(i)(A)
|
Certificate of Incorporation of the Company (conformed copy) (incorporated by reference to Exhibit 3(i)(A) to the Company’s Form 10-K filed with the SEC on March 27, 2009)
|
|
3
|
(i)(B)
|
Certificate of Amendment to the Certificate of Incorporation increasing the number of shares designated as Series A Junior Participating Preferred Stock (incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K filed with the SEC on December 23, 2008)
|
|
3
|
(i)(C)
|
Certificate of Amendment to the Certificate of Incorporation establishing the terms of the Fixed Rate Cumulative Perpetual Preferred Stock, Series B (incorporated by reference to Exhibit 3.2 to the Company’s Form 8-K filed with the SEC on December 23, 2008)
|
|
3
|
(ii)(A)
|
Bylaws of the Company (conformed copy) (incorporated by reference to Exhibit 3(ii)(A) to the Company’s Form 8-K filed with the SEC on October 22, 2007)
|
|
4.1
|
Specimen Share of Common Stock (incorporated by reference to Exhibit 4.1 to the Company’s Form 10-KSB (SEC File No. 000-32891) filed with the SEC on March 22, 2002)
|
||
4.2
|
Rights Agreement, dated as of March 18, 2004, between 1st Constitution Bancorp and Registrar and Transfer Company, as Rights Agent (incorporated by reference to Exhibit 4.5 to the Company’s Form 8-A12G (SEC File No. 000-32891) filed with the SEC on March 18, 2004)
|
||
4.3
|
Warrant, dated December 23, 2008, to purchase shares of 1st Constitution Bancorp common stock (incorporated by reference to Exhibit 3.3 to the Company’s Form 8-K filed with the SEC on December 23, 2008)
|
||
4.4 |
Subscription Agent Agreement, dated as of September 5, 2012, between 1
st
Constitution Bancorp and Registrar and Transfer Company (incorporated by reference to Exhibit 4.4 to the Company’s Current Report on Form 8-K filed with the SEC on September 6, 2012)
|
||
4.5
|
*
|
Warrant, dated November 23, 2011, to purchase shares of 1
st
Constitution Bancorp common stock
|
|
4.6
|
*
|
Warrant, dated November 23, 2011, to purchase shares of 1
st
Constitution Bancorp common stock
|
|
10.1
|
#
|
1st Constitution Bancorp Supplemental Executive Retirement Plan, dated as of October 1, 2002 (Incorporated by reference to Exhibit 10.1 to the Company’s Form 10-QSB (SEC File No. 000-32891) filed with the SEC on November 13, 2002)
|
|
10.2
|
#
|
Amended and Restated 1st Constitution Bancorp Directors’ Insurance Plan, effective as of June 16, 2005 (incorporated by reference to Exhibit No. 10 to the Company’s Form 8-K (SEC File No. 000-32891) filed with the SEC on March 24, 2006)
|
Exhibit No.
|
Description
|
||
10.3
|
#
|
1st Constitution Bancorp Form of Executive Life Insurance Agreement (Incorporated by reference to Exhibit 10.4 to the Company’s Form 10-QSB (SEC File No. 000-32891) filed with the SEC on November 13, 2002)
|
|
10.4
|
#
|
2000 Employee Stock Option and Restricted Stock Plan (incorporated by reference to Exhibit No. 6.3 to the Company’s Form 10-SB (SEC File No. 000-32891) filed with the SEC on June 15, 2001)
|
|
10.5
|
#
|
Directors Stock Option and Restricted Stock Plan (incorporated by reference to Exhibit No. 6.4 to the Company’s Form 10-SB (SEC File No. 000-32891) filed with the SEC on June 15, 2001)
|
|
10.6
|
#
|
Amendment No. 1 to 1st Constitution Bancorp Supplemental Executive Retirement Plan, effective January 1, 2004 (incorporated by reference to Exhibit 10.12 to the Company’s Form 10-Q (SEC File No. 000-32891) filed with the SEC on August 11, 2004)
|
|
10.7
|
#
|
Change of Control Agreement, effective as of April 1, 2004, by and between the Company and Joseph M. Reardon (incorporated by reference to Exhibit 10.13 to the Company’s Form 10-Q (SEC File No. 000-32891) filed with the SEC on August 11, 2004)
|
|
10.8
|
#
|
Form of Stock Option Agreement under the 1st Constitution Bancorp Employee Stock Option and Restricted Stock Plan (incorporated by reference to Exhibit 10.14 to the Company’s Form 8-K (SEC File No. 000-32891) filed with the SEC on December 22, 2004)
|
|
10.9
|
#
|
Form of Restricted Stock Agreement under the 1st Constitution Bancorp Employee Stock Option and Restricted Stock Plan (incorporated by reference to Exhibit 10.15 to the Company’s Form 8-K (SEC File No. 000-32891) filed with the SEC on December 22, 2004)
|
|
10.10
|
#
|
The 1st Constitution Bancorp 2005 Equity Incentive Plan (incorporated by reference to Appendix A of the Company's proxy statement (SEC File No. 000-32891) filed with the SEC on April 15, 2005)
|
|
10.11
|
#
|
Form of Restricted Stock Agreement under the 1st Constitution Bancorp 2005 Equity Incentive Plan (incorporated by reference to Exhibit 10.18 to the Company’s Form 10-Q (SEC File No. 000-32891) filed with the SEC on August 8, 2005)
|
|
10.12
|
#
|
Form of Nonqualified Stock Option Agreement under the 1st Constitution Bancorp 2005 Equity Incentive Plan (incorporated by reference to Exhibit 10.19 to the Company’s Form 10-Q (SEC File No. 000-32891) filed with the SEC on August 8, 2005)
|
|
10.13
|
#
|
Form of Incentive Stock Option Agreement under the 1st Constitution Bancorp 2005 Equity Incentive Plan (incorporated by reference to Exhibit 10.20 to the Company’s Form 10-Q (SEC File No. 000-32891) filed with the SEC on August 8, 2005)
|
|
10.14
|
#
|
1st Constitution Bancorp 2006 Directors Stock Plan (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K (SEC File No. 000-32891) filed with the SEC on May 19, 2006)
|
Exhibit No.
|
Description
|
||
10.15
|
#
|
Form of Nonqualified Stock Option Agreement under the 1st Constitution Bancorp 2006 Directors Stock Plan (incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K (SEC File No. 000-32891) filed with the SEC on May 19, 2006)
|
|
10.16
|
#
|
Form of Restricted Stock Agreement under the 1st Constitution Bancorp 2006 Directors Stock Plan (incorporated by reference to Exhibit 10.3 to the Company’s Form 8-K (SEC File No. 000-32891) filed with the SEC on May 19, 2006)
|
|
10.17
|
Amended and Restated Declaration of Trust of 1st Constitution Capital Trust II, dated as of June 15, 2006, among 1st Constitution Bancorp, as sponsor, the Delaware and institutional trustee named therein, and the administrators named therein (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K (SEC File No. 000-32891) filed with the SEC on June 16, 2006)
|
||
10.18
|
Indenture, dated as of June 15, 2006, between 1st Constitution Bancorp, as issuer, and the trustee named therein, relating to the Floating Rate Junior Subordinated Debt Securities due 2036 (incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K (SEC File No. 000-32891) filed with the SEC on June 16, 2006)
|
||
10.19
|
Guarantee Agreement, dated as of June 15, 2006, between 1st Constitution Bancorp and the guarantee trustee named therein (incorporated by reference to Exhibit 10.3 to the Company’s Form 8-K (SEC File No. 000-32891) filed with the SEC on June 16, 2006)
|
||
10.20
|
#
|
Amendment No. 2 to 1st Constitution Bancorp Supplemental Executive Retirement Plan, effective as of December 31, 2004 (incorporated by reference to Exhibit 10.24 to the Company’s Form 10-K filed with the SEC on April 15, 2008)
|
|
10.21
|
#
|
1st Constitution Bancorp 2005 Supplemental Executive Retirement Plan, effective as of January 1, 2005 (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K (SEC File No. 000-32891) filed with the SEC on December 28, 2006)
|
|
10.22
|
Letter Agreement, dated December 23, 2008, including Securities Purchase Agreement – Standard Terms incorporated by reference therein, between 1st Constitution Bancorp and the U.S. Department of the Treasury (incorporated by reference to Exhibit 10 to the Company’s Form S-3 filed with the SEC on January 29, 2009)
|
||
10.23
|
#
|
Amended and Restated Employment Agreement between the Company and Robert F. Mangano dated as of July 1, 2010 (incorporated by reference to Exhibit 10 to the Company’s Form 8-K filed with the SEC on July 14, 2010)
|
|
10.24
|
Branch Purchase and Assumption Agreement and Agreement for Purchase
between Amboy Bank and 1
st
Constitution Bank
dated as of December 31, 2010 (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed with the SEC on January 3, 2011)
|
||
14
|
Code of Business Conduct and Ethics (incorporated by reference to Exhibit 14 to the Company’s Form 10-K (SEC File No. 000-32891) filed with the SEC on March 25, 2004)
|
||
21
|
*
|
Subsidiaries of the Company
|
|
23
|
*
|
Consent of Independent Registered Public Accounting Firm
|
31.1
|
*
|
Certification of the principal executive officer of the Company, pursuant to Securities Exchange Act Rule 13a-14(a)
|
|
31.2
|
*
|
Certification of the principal financial officer of the Company, pursuant to Securities Exchange Act Rule 13a-14(a)
|
|
32
|
*
|
Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of The Sarbanes-Oxley Act of 2002, signed by the principal executive officer and the principal financial officer of the Company
|
|
101.INS
|
*
|
XBRL Instance Document
x
|
|
101.SCH
|
*
|
XBRL Taxonomy Extension Schema Document
x
|
|
101.CAL
|
*
|
XBRL Taxonomy Extension Calculation Linkbase Document
x
|
|
101.DEF
|
*
|
XBRL Taxonomy Extension Definition Linkbase Document
x
|
|
101.LAB
|
*
|
XBRL Taxonomy Extension Label Linkbase Document
x
|
|
101.PRE
|
*
|
XBRL Taxonomy Extension Presentation Linkbase Document
x
|
|
x
|
These interactive data files are being furnished as part of this Annual Report, and in accordance with Rule 402 of Regulation S-T, shall not be deemed filed for purposes of Section 11 or 12 of the Securities Act of 1933, as amended, or Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability under those sections.
|
Page
|
|
F-2
|
|
F-3
|
|
F-4
|
|
F-5
|
|
F-6
|
|
F-7
|
|
F-8
|
2012
|
2011
|
|||||||
INTEREST INCOME:
|
||||||||
Loans, including fees
|
$ | 26,643,502 | $ | 22,816,086 | ||||
Securities:
|
||||||||
Taxable
|
4,434,108 | 5,422,190 | ||||||
Tax-exempt
|
1,677,329 | 1,492,041 | ||||||
Federal funds sold and
|
||||||||
short-term investments
|
81,697 | 126,729 | ||||||
Total interest income
|
32,836,636 | 29,857,046 | ||||||
INTEREST EXPENSE:
|
||||||||
Deposits
|
4,314,703 | 5,660,122 | ||||||
Borrowings
|
450,462 | 444,185 | ||||||
Redeemable subordinated debentures
|
385,977 | 683,057 | ||||||
Total interest expense
|
5,151,142 | 6,787,364 | ||||||
Net interest income
|
27,685,494 | 23,069,682 | ||||||
PROVISION FOR LOAN LOSSES
|
2,149,992 | 2,558,328 | ||||||
Net interest income after provision
|
||||||||
for loan losses
|
25,535,502 | 20,511,354 | ||||||
NON-INTEREST INCOME:
|
||||||||
Service charges on deposit accounts
|
930,162 | 891,499 | ||||||
Gain on sales of securities available for sale
|
313,004 | 0 | ||||||
Gain on sales of loans
|
1,862,219 | 1,776,154 | ||||||
Income on Bank-owned life insurance
|
447,525 | 404,338 | ||||||
Other income
|
1,714,618 | 1,444,259 | ||||||
Total other income
|
5,267,528 | 4,516,250 | ||||||
NON-INTEREST EXPENSES:
|
||||||||
Salaries and employee benefits
|
12,434,900 | 11,219,439 | ||||||
Occupancy expense
|
2,470,577 | 2,391,281 | ||||||
Data processing expenses
|
1,056,629 | 1,171,136 | ||||||
FDIC insurance expense
|
565,027 | 646,365 | ||||||
Other real estate owned expenses
|
3,553,779 | 732,693 | ||||||
Other operating expenses
|
3,689,649 | 3,644,116 | ||||||
Total other expenses
|
23,770,561 | 19,805,030 | ||||||
Income before income taxes
|
7,032,469 | 5,222,574 | ||||||
INCOME TAXES
|
1,971,965 | 1,291,131 | ||||||
Net income
|
$ | 5,060,504 | $ | 3,931,443 | ||||
NET INCOME PER COMMON SHARE
|
||||||||
Basic
|
$ | 0.92 | $ | 0.74 | ||||
Diluted
|
$ | 0.90 | $ | 0.74 | ||||
WEIGHTED AVERAGE SHARES
|
||||||||
OUTSTANDING
|
||||||||
Basic
|
5,511,114 | 5,302,287 | ||||||
Diluted
|
5,607,103 | 5,341,255 |
2012
|
2011
|
|||||||
NET INCOME
|
$ | 5,060,504 | $ | 3,931,443 | ||||
Other comprehensive income (loss):
|
||||||||
Unrealized holding gains (losses) on available for sale securities
|
(198,328 | ) | 1,172,759 | |||||
Reclassification adjustment for realized gains on available for sale securities included in net income
|
(313,004 | ) | - | |||||
Pension liability
|
12,880 | 12,878 | ||||||
Unrealized gain on interest rate swap contract
|
- | 353,552 | ||||||
(498,452 | ) | 1,539,189 | ||||||
Income tax effect
|
211,283 | (545,901 | ) | |||||
Other
comprehensive (loss) income
|
(287,169 | ) | 993,288 | |||||
Comprehensive income
|
$ | 4,773,335 | $ | 4,924,731 |
Accumulated
|
||||||||||||||||||||
Other
|
Total
|
|||||||||||||||||||
Common
|
Retained
|
Treasury
|
Comprehensive
|
Shareholders'
|
||||||||||||||||
Stock
|
Earnings
|
Stock
|
Income
|
Equity
|
||||||||||||||||
BALANCE, January 1, 2011
|
$ | 38,899,855 | $ | 10,741,779 | $ | (58,652 | ) | $ | 98,174 | $ | 49,681,156 | |||||||||
Exercise of stock options, and issuance of vested
|
||||||||||||||||||||
shares under employee benefit programs
|
254,862 | 81,493 | 336,355 | |||||||||||||||||
Share-based compensation
|
90,596 | 90,596 | ||||||||||||||||||
Treasury Stock purchased
|
(33,063 | ) | (33,063 | ) | ||||||||||||||||
5% stock dividend declared December 2011
|
1,602,616 | (1,602,616 | ) | 0 | ||||||||||||||||
Net Income for the year ended December 31, 2011
|
3,931,443 | 3,931,443 | ||||||||||||||||||
Other comprehensive income
|
993,288 | 993,288 | ||||||||||||||||||
BALANCE, December 31, 2011
|
40,847,929 | 13,070,606 | (10,222 | ) | 1,091,462 | 54,999,775 | ||||||||||||||
Exercise of stock options, net and issuance of vested
|
||||||||||||||||||||
shares under employee benefit programs
|
412,340 | 71,706 | 484,046 | |||||||||||||||||
Share-based compensation
|
99,152 | 99,152 | ||||||||||||||||||
Treasury stock purchased
|
(122,570 | ) | (122,570 | ) | ||||||||||||||||
Shares issued in connection with Shareholders’ Rights program
|
4,819,794 | 4,819,794 | ||||||||||||||||||
5% stock dividend declared December 2012
|
2,536,817 | (2,536,817 | ) | 0 | ||||||||||||||||
Net Income for the year ended December 31, 2012
|
5,060,504 | 5,060,504 | ||||||||||||||||||
Other comprehensive (loss)
|
(287,169 | ) | (287,169 | ) | ||||||||||||||||
BALANCE, December 31, 2012
|
$ | 48,716,032 | $ | 15,594,293 | $ | (61,086 | ) | $ | 804,293 | $ | 65,053,532 |
|
·
|
Management judges the loan to be uncollectible;
|
|
·
|
Repayment is deemed to be protracted beyond reasonable time frames;
|
|
·
|
The loan has been classified as a loss by either internal loan review process or external examiners;
|
|
·
|
The customer has filed bankruptcy and the loss becomes evident owing to a lack of assets; or
|
|
·
|
The loan is significantly past due unless both well secured and in the process of collection.
|
Year Ended December 31, 2012
|
||||||||||||
Income
|
Weighted-
average
shares
|
Per share
Amount
|
||||||||||
Basic earnings per common share:
|
||||||||||||
Net income
|
$
|
5,060,504
|
5,511,114
|
$
|
0.92
|
|||||||
Effect of dilutive securities:
|
||||||||||||
Stock options and unvested stock awards
|
95,989
|
|||||||||||
Diluted EPS:
|
||||||||||||
Net income plus assumed conversion
|
$
|
5,060,504
|
5,607,103
|
0.90
|
||||||||
Year Ended December 31, 2011
|
||||||||||||
Income
|
Weighted-
average
shares
|
Per share
Amount
|
||||||||||
Basic earnings per common share:
|
||||||||||||
Net income
|
$ | 3,931,443 | 5,302,287 | $ | 0.74 | |||||||
Effect of dilutive securities:
|
||||||||||||
Stock options and unvested stock awards
|
38,968 | |||||||||||
Diluted EPS:
|
||||||||||||
Net income plus assumed conversion
|
$ | 3,931,443 | 5,341,255 | $ | 0.74 | |||||||
Gross
|
Gross
|
|||||||||||||||
Amortized
|
Unrealized
|
Unrealized
|
Fair
|
|||||||||||||
2012
|
Cost
|
Gains
|
Losses
|
Value
|
||||||||||||
Available for sale-
|
||||||||||||||||
U. S. Treasury securities and
|
||||||||||||||||
obligations of U.S. Government
|
||||||||||||||||
Sponsored corporations (“GSE”) and agencies
|
$
|
29,384,595
|
$
|
137,847
|
$
|
(26,907)
|
$
|
29,495,535
|
||||||||
Residential collateralized mortgage obligations- GSE
|
6,349,310
|
283,355
|
0
|
6,632,665
|
||||||||||||
Residential collateralized mortgage obligations-
non GSE
|
3,811,933
|
119,323
|
(7,074)
|
3,924,182
|
||||||||||||
Residential mortgage backed securities – GSE
|
24,912,948
|
1,576,387
|
0
|
26,489,335
|
||||||||||||
Obligations of State and Political subdivisions
|
20,793,222
|
375,416
|
(486,337)
|
20,682,301
|
||||||||||||
Trust preferred debt securities – single issuer
|
2,466,009
|
0
|
(467,643)
|
1,998,366
|
||||||||||||
Corporate debt securities
|
17,797,681
|
325,731
|
(23,131)
|
18,100,281
|
||||||||||||
Restricted Stock
|
2,493,300
|
0
|
0
|
2,493,300
|
||||||||||||
Mutual fund
|
25,000
|
0
|
0
|
25,000
|
||||||||||||
$
|
108,033,998
|
$
|
2,818,059
|
$
|
(1,011,092)
|
$
|
109,840,965
|
Amortized Cost
|
Other-Than-
Temporary Impairment Recognized In
Accumulated
Other Comprehensive
Loss
|
Carrying
Value
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
|||||||||||||||||||
Held to maturity-
|
||||||||||||||||||||||||
Obligations of U.S. Government
|
||||||||||||||||||||||||
sponsored corporations (“GSE”)
and agencies
|
$ | 3,073,957 | $ | 0 | $ | 3,073,957 | $ | 33,213 | $ | 0 | $ | 3,107,170 | ||||||||||||
Residential collateralized
mortgage obligations – GSE
|
19,660,625 | 0 | 19,660,625 | 1,021,556 | 0 | 20,682,181 | ||||||||||||||||||
Residential collateralized mortgage
obligations-non-GSE
|
13,387,974 | 0 | 13,387,974 | 796,892 | (289 | ) | 14,184,577 | |||||||||||||||||
Residential mortgage backed
securities – GSE
|
19,950,190 | 0 | 19,950,190 | 849,040 | (944 | ) | 20,798,286 | |||||||||||||||||
Obligations of State and Political
subdivisions
|
42,815,706 | 42,815,706 | 3,039,935 | 0 | 45,855,641 | |||||||||||||||||||
Trust preferred debt securities –
pooled
|
656,662 | (500,944 | ) | 155,718 | 0 | (9,638 | ) | 146,080 | ||||||||||||||||
Corporate debt securities
|
16,983,730 | 0 | 16,983,730 | 84,443 | (2,745 | ) | 17,065,428 | |||||||||||||||||
$ | 116,528,844 | $ | (500,944 | ) | $ | 116,027,900 | $ | 5,825,079 | $ | (13,616 | ) | $ | 121,839,363 |
Gross
|
Gross
|
|||||||||||||||
Amortized
|
Unrealized
|
Unrealized
|
Fair
|
|||||||||||||
2011
|
Cost
|
Gains
|
Losses
|
Value
|
||||||||||||
Available for sale-
|
||||||||||||||||
U. S. Treasury securities and
|
||||||||||||||||
obligations of U.S. Government sponsored
|
||||||||||||||||
corporations (“GSE”) and agencies
|
$ | 19,400,856 | $ | 71,833 | $ | 0 | $ | 19,472,689 | ||||||||
Residential collateralized mortgage obligations - GSE
|
13,421,544 | 476,589 | 0 | 13,898,133 | ||||||||||||
Residential collateralized mortgage obligations –
non- GSE
|
4,177,115 | 143,480 | (20,151 | ) | 4,300,444 | |||||||||||
Residential mortgage backed securities – GSE
|
40,655,157 | 2,032,059 | (7 | ) | 42,687,209 | |||||||||||
Obligations of State and
|
||||||||||||||||
Political subdivisions
|
5,366,145 | 339,747 | (5,378 | ) | 5,700,514 | |||||||||||
Trust preferred debt securities – single issuer
|
2,463,296 | 0 | (712,055 | ) | 1,751,241 | |||||||||||
Corporate debt securities | 1,443,762 | 0 | (7,818 | ) | 1,435,944 | |||||||||||
Restricted Stock
|
4,412,600 | 0 | 0 | 4,412,600 | ||||||||||||
Mutual Fund
|
25,000 | 0 | 0 | 25,000 | ||||||||||||
$ | 91,365,475 | $ | 3,063,708 | $ | (745,409 | ) | $ | 93,683,774 |
Amortized Cost
|
Other-Than-
Temporary Impairment Recognized In
Accumulated
Other Comprehensive
Loss
|
Carrying
Value
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
|||||||||||||||||||
Held to maturity-
|
||||||||||||||||||||||||
Obligations of U.S. Government
|
||||||||||||||||||||||||
sponsored corporations (“GSE”) and
agencies
|
$ | 11,118,649 | $ | 0 | $ | 11,118,649 | $ | 59,571 | $ | 0 | $ | 11,178,220 | ||||||||||||
Residential collateralized
mortgage obligations – GSE
|
24,705,415 | 0 | 24,705,415 | 1,007,737 | 0 | 25,713,152 | ||||||||||||||||||
Residential collateralized mortgage
obligations-non GSE
|
14,386,327 | 0 | 14,386,327 | 704,792 | 0 | 15,091,119 | ||||||||||||||||||
Residential mortgage backed
securities – GSE
|
20,260,354 | 0 | 20,260,354 | 801,882 | 0 | 21,062,236 | ||||||||||||||||||
Obligations of State and
|
||||||||||||||||||||||||
Political subdivisions
|
46,820,985 | 0 | 46,820,985 | 2,848,587 | (2,507 | ) | 49,667,065 | |||||||||||||||||
Trust preferred debt securities - pooled
|
646,574 | (500,944 | ) | 145,630 | 0 | (142,122 | ) | 3,508 | ||||||||||||||||
Corporate debt securities
|
25,037,063 | 0 | 25,037,063 | 85,701 | (216,784 | ) | 24,905,980 | |||||||||||||||||
$ | 142,975,367 | $ | (500,944 | ) | $ | 142,474,423 | $ | 5,508,270 | $ | (361,413 | ) | $ | 147,621,280 |
Amortized
Cost |
Fair
Value
|
|||||||
Available for sale-
|
||||||||
Due in one year or less
|
||||||||
U.S. Treasury securities and obligations of US
Government sponsored corporations (“GSE”)
and agencies
|
$ | 7,014,714 | $ | 7,035,000 | ||||
Residential mortgage backed securities-GSE
|
65,816 | 68,944 | ||||||
Corporate debt securities
|
1,414,280 | 1,425,259 | ||||||
Restricted stock
|
2,493,300 | 2,493,300 | ||||||
Mutual fund
|
25,000 | 25,000 | ||||||
$ | 11,013,110 | $ | 11,047,503 | |||||
Due after one year through five years
|
||||||||
U.S. Treasury securities and obligations of US
Government sponsored corporations (“GSE”)
and agencies
|
$ | 9,955,805 | $ | 10,057,800 | ||||
Residential mortgage backed securities-GSE
|
269,875 | 289,069 | ||||||
Obligations of State and Political subdivisions
|
483,938 | 486,312 | ||||||
Corporate debt securities
|
15,296,993 | 15,595,542 | ||||||
$ | 26,006,611 | $ | 26,428,723 | |||||
Due after five years through ten years
|
||||||||
U.S. Treasury securities and obligations of US
Government sponsored corporations (“GSE”)
and agencies
|
$ | 12,414,076 | $ | 12,402,735 | ||||
Residential collateralized mortgage
obligations-GSE
|
80,751 | 84,935 | ||||||
Residential mortgage backed securities-GSE
|
3,015,167 | 3,276,792 | ||||||
Obligations of State and Political subdivisions
|
2,701,112 | 2,963,440 | ||||||
$ | 18,211,106 | $ | 18,727,902 | |||||
Due after ten years
|
||||||||
Residential collateralized mortgage
obligations-GSE
|
$ | 6,268,559 | $ | 6,547,730 | ||||
Residential collateralized mortgage
obligations-non GSE
|
3,811,933 | 3,924,182 | ||||||
Residential mortgage backed securities-GSE
|
21,562,090 | 22,854,530 | ||||||
Obligations of State and Political subdivisions
|
17,608,172 | 17,232,549 | ||||||
Corporate debt securities | 1,086,408 | 1,079,480 | ||||||
Trust preferred debt securities
|
2,466,009 | 1,998,366 | ||||||
$ | 52,803,171 | $ | 53,636,837 | |||||
Total
|
$ | 108,033,998 | $ | 109,840,965 |
Held to maturity-
|
||||||||
Due in one year or less
|
||||||||
Obligations of US Government sponsored
corporations (“GSE”) and agencies
|
$ | 1,500,345 | $ | 1,508,940 | ||||
Obligations of State and Political subdivisions
|
2,865,631 | 2,894,143 | ||||||
Corporate debt securities
|
15,962,320 | 16,019,453 | ||||||
$ | 20,328,296 | $ | 20,422,536 | |||||
Due after one year through five years
|
||||||||
Obligations of US Government sponsored
corporations (“GSE”) and agencies
|
$ | 1,573,612 | $ | 1,598,230 | ||||
Obligations of State and Political subdivisions
|
6,212,316 | 6,475,283 | ||||||
Corporate debt securities
|
1,021,410 | 1,045,975 | ||||||
$ | 8,807,338 | $ | 9,119,488 | |||||
Due after five years through ten years
|
||||||||
Residential collateralized mortgage
obligations-GSE
|
$ | 333,839 | $ | 340,078 | ||||
Residential mortgage backed securities-GSE
|
3,359,153 | 3,494,362 | ||||||
Obligations of State and Political subdivisions
|
22,691,687 | 24,318,500 | ||||||
$ | 26,384,679 | $ | 28,152,940 | |||||
Due after ten years
|
||||||||
Residential collateralized mortgage
obligations-GSE
|
$ | 19,326,786 | $ | 20,342,103 | ||||
Residential collateralized mortgage
obligations-non GSE
|
13,387,974 | 14,184,577 | ||||||
Residential mortgage backed securities-GSE
|
16,591,037 | 17,303,924 | ||||||
Obligations of State and Political subdivisions
|
11,046,072 | 12,167,715 | ||||||
Trust preferred debt securities
|
656,662 | 146,080 | ||||||
$ | 61,008,531 | $ | 64,144,399 | |||||
Total
|
$ | 116,528,844 | $ | 121,839,363 |
2012
|
Less than 12 months
|
12 months or longer
|
Total
|
|||||||||||||||||||||||||
Number of
Securities
|
Fair Value
|
Unrealized
Losses |
Fair Value
|
Unrealized
Losses |
Fair Value
|
Unrealized
Losses |
||||||||||||||||||||||
U.S. Government sponsored
corporations and agencies
|
1 | $ | 9,842,200 | $ | (26,907 | ) | $ | 0 | $ | 0 | $ | 9,842,200 | $ | (26,907 | ) | |||||||||||||
Residential collateralized mortgage
obligations-non-GSE
|
3 | 1,960,237 | (4,516 | ) | 156,505 | (2,847 | ) | 2,116,742 | (7,363 | ) | ||||||||||||||||||
Residential mortgage backed securities
GSE
|
2 | 3,989,675 | (944 | ) | 0 | 0 | 3,989,675 | (944 | ) | |||||||||||||||||||
Obligations of State and Political
subdivisions
|
37 | 12,794,007 | (486,337 | ) | 0 | 0 | 12,794,007 | (486,337 | ) | |||||||||||||||||||
Trust preferred debt securities –
Single issuer
|
4 | 0 | 0 | 1,998,366 | (467,643 | ) | 1,998,366 | (467,643 | ) | |||||||||||||||||||
Trust preferred debt securities –
pooled
|
1 | 0 | 0 | 146,080 | (510,582 | ) | 146,080 | (510,582 | ) | |||||||||||||||||||
Corporate debt securities
|
5 | 3,176,328 | (25,876 | ) | 0 | 0 | 3,176,328 | (25,876 | ) | |||||||||||||||||||
Total temporarily impaired securities
|
53 | $ | 31,762,447 | $ | (544,580 | ) | $ | 2,300,951 | $ | (981,072 | ) | $ | 34,063,398 | $ | (1,525,652 | ) |
2011
|
Less than 12 months
|
12 months or longer
|
Total
|
|||||||||||||||||||||||||
Number of
Securities
|
Fair Value
|
Unrealized
Losses |
Fair Value
|
Unrealized
Losses |
Fair Value
|
Unrealized
Losses |
||||||||||||||||||||||
Residential collateralized mortgage
obligations - Non-GSE
|
1 | $ | 0 | $ | 0 | $ | 251,723 | $ | (20,151 | ) | $ | 251,723 | $ | (20,151 | ) | |||||||||||||
Residential mortgage backed securities
GSE
|
1 | 5,280 | (7 | ) | 0 | 0 | 5,280 | (7 | ) | |||||||||||||||||||
Obligations of State and Political
Subdivisions
|
3 | 1,049,362 | (7,885 | ) | 0 | 0 | 1,049,362 | (7,885 | ) | |||||||||||||||||||
Trust preferred debt securities –
single issue
|
4 | 0 | 0 | 1,751,241 | (712,055 | ) | 1,751,241 | (712,055 | ) | |||||||||||||||||||
Trust preferred debt securities –
pooled
|
1 | 0 | 0 | 3,508 | (643,066 | ) | 3,508 | (643,066 | ) | |||||||||||||||||||
Corporate debt securities
|
25 | 13,668,246 | (211,075 | ) | 666,956 | (13,527 | ) | 14,335,202 | (224,602 | ) | ||||||||||||||||||
Total temporarily impaired securities
|
35 | $ | 14,722,888 | $ | (218,967 | ) | $ | 2,673,428 | $ | (1,388,799 | ) | $ | 17,396,316 | $ | (1,607,766 | ) |
|
a.
|
We obtained the PRETSL XXV Depository Institutions Issuer List as of December 31, 2012 from the FTN Financial Corp. (“FTN”) website and reviewed the financial ratios and capital levels of each individual financial institution issuer.
|
|
b.
|
We sorted the financial institutions on the issuer list to develop three “buckets” (or categories) for further deferred/default analysis based upon the indicated “Texas Ratio.” The Texas Ratio is calculated by dividing the institution’s Non-Performing Assets plus loans 90 days past due by the combined total of Tangible Equity plus the Allowance for Loan Losses. The three buckets consisted of those institutions with a Texas Ratio of:
|
|
(1)
|
Above 100;
|
|
(2)
|
75 to 100; and
|
|
(3)
|
Below 75.
|
|
c.
|
We then applied the following asset specific deferral/default assumptions to each of these buckets:
|
|
(1)
|
Above 100 - 100% default; 0% recovery;
|
|
(2)
|
75 to 100 – 100% deferred; 15% recovery at 2 years from initial date of deferral; and
|
|
(3)
|
Below 75 – no deferral/default.
|
|
d.
|
We then ran a cash flow projection to analyze the impact of future deferral/default activity by applying the following assumption on those institutions in bucket (3) of our analysis:
|
|
·
|
Defaults at 75 basis points applied annually; 15% recovery with a 2-year lag from the initial date of deferral.
|
|
e.
|
This December 31, 2012 projection of future cash flows produced a present value factor that exceeded the carrying value of the pooled trust preferred security; therefore, management concluded that no
other-than-temporary impairment
issues were present at December 31, 2012.
|
(1)
|
This percentage represents the amount of specific deferrals / defaults that have occurred, plus those that are known for the following quarters to the total amount of original collateral. Fewer deferrals / defaults produce a lower percentage.
|
(2)
|
“Excess subordination” amount is the additional defaults / deferrals necessary in the next reporting period to deplete the entire credit enhancement (excess interest and over-collateralization) beneath our tranche within each pool to the point that would cause a “break in yield”. This amount assumes that all currently performing collateral continues to perform. A break in yield means that our security would not be expected to receive all the contractual cash flows (principal and interest) by maturity. The “percent of underlying collateral performing” is the ratio of the “excess subordination amount” to current performing collateral - a higher percentage means there is more excess subordination to absorb additional defaults / deferrals, and the better our security is protected from loss.
|
2012
|
2011
|
|||||||
|
||||||||
Commercial business
|
$ | 57,865,436 | $ | 50,784,674 | ||||
Commercial real estate
|
102,412,694 | 99,636,976 | ||||||
Mortgage warehouse lines
|
284,127,530 | 249,345,831 | ||||||
Construction loans
|
55,691,393 | 49,285,783 | ||||||
Residential real estate loans
|
10,897,307 | 12,885,352 | ||||||
Loans to individuals
|
9,643,385 | 12,219,640 | ||||||
All other loans
|
189,279 | 255,556 | ||||||
Gross Loans
|
520,827,024 | 474,413,812 | ||||||
Deferred loan costs
|
987,086 | 1,017,959 | ||||||
$ | 521,814,110 | $ | 475,431,771 |
2012
|
2011
|
|||||||
Balance, beginning of year
|
$
|
5,534,450
|
$
|
5,762,712
|
||||
Provision charged to operations
|
2,149,992
|
2,558,328
|
||||||
Loans charged off
|
(548,091
|
)
|
(2,799,482
|
)
|
||||
Recoveries of loans charged off
|
14,861
|
12,892
|
||||||
Balance, end of year
|
$
|
7,151,212
|
$
|
5,534,450
|
30-59 Days
|
60-89 Days
|
Greater
than 90 Days |
Total
Past Due |
Current
|
Total
Loans
Receivable |
Recorded
Investment > 90 Days Accruing |
Nonaccrual
Loans |
||
Commercial
|
|||||||||
Construction
|
$ 0
|
$ 0
|
$ 1,581,031
|
$1,581,031
|
$54,110,362
|
$55,691,393
|
$ 0
|
$ 1,581,031
|
|
Commercial Business
|
202,451
|
70,192
|
518,912
|
791,555
|
57,073,881
|
57,865,436
|
0
|
629,821
|
|
Commercial Real Estate
|
0
|
0
|
3,137,553
|
3,137,553
|
99,275,141
|
102,412,694
|
0
|
3,478,607
|
|
Mortgage Warehouse Lines
|
0
|
0
|
0
|
0
|
284,127,530
|
284,127,530
|
0
|
0
|
|
Residential Real Estate
|
320,729
|
34,975
|
0
|
355,704
|
10,541,603
|
10,897,307
|
0
|
134,193
|
|
Consumer
|
|||||||||
Loans to Individuals
|
49,243
|
0
|
139,852
|
189,095
|
9,454,290
|
9,643,385
|
84,948
|
54,904
|
|
Other
|
0
|
0
|
0
|
0
|
189,279
|
189,279
|
0
|
0
|
|
Deferred Loan Fees
|
0
|
0
|
0
|
0
|
987,086
|
987,086
|
0
|
0
|
|
Total
|
$572,423
|
$ 105,167
|
$5,377,348
|
$6,054,938
|
$515,759,172
|
$521,814,110
|
$ 84,948
|
$ 5,878,554
|
30-59 Days
|
60-89 Days
|
Greater
than 90 Days |
Total
Past Due |
Current
|
Total
Loans
Receivable |
Recorded
Investment > 90 Days Accruing |
Nonaccrual
Loans |
||
Commercial
|
|||||||||
Construction
|
$ 0
|
$ 0
|
$ 140,055
|
$ 140,055
|
$ 49,145,728
|
$49,285,783
|
$ 0
|
$ 140,055
|
|
Commercial Business
|
364,743
|
564,152
|
122,535
|
1,051,430
|
49,733,244
|
50,784,674
|
0
|
669,166
|
|
Commercial Real Estate
|
0
|
245,874
|
503,877
|
749,751
|
98,887,225
|
99,636,976
|
0
|
1,443,220
|
|
Mortgage Warehouse Lines
|
0
|
0
|
0
|
0
|
249,345,831
|
249,345,831
|
0
|
0
|
|
Residential Real Estate
|
905,310
|
0
|
661,171
|
1,566,481
|
11,318,871
|
12,885,352
|
0
|
661,171
|
|
Consumer
|
|||||||||
Loans to Individuals
|
0
|
144,904
|
77,858
|
222,762
|
11,996,878
|
12,219,640
|
0
|
77,858
|
|
Other
|
0
|
0
|
0
|
0
|
255,556
|
255,556
|
0
|
0
|
|
Deferred Loan Costs
|
0
|
0
|
0
|
0
|
1,017,959
|
1,017,959
|
0
|
0
|
|
Total
|
$1,270,053
|
$ 954,930
|
$1,505,496
|
$3,730,479
|
$471,701,292
|
$475,431,771
|
$ 0
|
$ 2,991,470
|
|
·
|
General economic conditions.
|
|
·
|
Trends in charge-offs.
|
|
·
|
Trends and levels of delinquent loans.
|
|
·
|
Trends and levels of non-performing loans, including loans over 90 days delinquent.
|
|
·
|
Trends in volume and terms of loans.
|
|
·
|
Levels of allowance for specific classified loans.
|
|
·
|
Credit concentrations.
|
|
·
|
Consumer credit scores
|
|
·
|
Internal credit risk grades
|
|
·
|
Loan-to-value ratios
|
|
·
|
Collateral
|
|
·
|
Collection experience
|
Commercial Credit Exposure - By
Internally Assigned Grade |
Construction
|
Commercial
Business |
Commercial
Real Estate |
Mortgage
Warehouse Lines |
Residential
Real Estate |
||
Grade:
|
Pass
|
$49,373,827
|
55,498,613
|
$76,096,964
|
$284,127,530
|
$10,763,114
|
||
Special Mention
|
0
|
1,019,586
|
19,060,621
|
0
|
134,193
|
||
Substandard
|
5,777,494
|
1,064,799
|
7,255,109
|
0
|
0
|
||
Doubtful
|
540,072
|
282,438
|
0
|
0
|
0
|
||
Total
|
$55,691,393
|
$57,865,436
|
$102,412,694
|
$284,127,530
|
$10,897,307
|
Consumer Credit Exposure -
By Payment Activity |
Loans To
Individuals |
Other
|
Performing
|
$9,454,288
|
$189,279
|
|||||
Nonperforming
|
189,097
|
0
|
|||||
Total
|
$9,643,385
|
$189,279
|
Commercial Credit Exposure - By
Internally Assigned Grade |
Construction
|
Commercial
Business |
Commercial
Real Estate |
Mortgage
Warehouse Lines |
Residential
Real Estate |
||
Grade:
|
Pass
|
$ 44,106,827
|
$ 47,973,545
|
$ 84,642,510
|
$249,345,831
|
$ 12,224,181
|
||
Special Mention
|
5,038,901
|
1,657,993
|
10,574,489
|
0
|
142,477
|
||
Substandard
|
107,405
|
865,160
|
3,823,225
|
0
|
518,694
|
||
Doubtful
|
32,650
|
287,976
|
596,752
|
0
|
0
|
||
Total
|
$ 49,285,783
|
$ 50,784,674
|
$ 99,636,976
|
$249,345,831
|
$ 12,885,352
|
Consumer Credit Exposure -
By Payment Activity |
Loans To
Individuals |
Other
|
Performing
|
$ 12,141,782
|
$ 255,556
|
|||||
Nonperforming
|
77,858
|
0
|
|||||
Total
|
$ 12,219,640
|
$ 255,556
|
Beginning Bal. -
December 31,
2011
|
$1,054,695
|
$934,642
|
$1,597,702
|
$1,122,056
|
$91,076
|
$187,352
|
$2,377
|
$544,550
|
$ 0
|
$5,534,450
|
|
Provision charged to
operations
|
989,844
|
191,897
|
775,199
|
298,582
|
151,721
|
(6,911)
|
5,895
|
(256,235)
|
0
|
2,149,992
|
|
Loans charged off
|
(57,650)
|
(165,026)
|
(110,862)
|
0
|
(130,694)
|
(77,858)
|
(6,001)
|
0
|
0
|
(548,091)
|
|
Recoveries of loans charged off
|
3,403
|
11,276
|
182
|
0
|
0
|
0
|
0
|
0
|
14,861
|
||
Ending Bal.- December 31, 2012
|
$ 1,990,292
|
$ 972,789
|
$ 2,262,221
|
$ 1,420,638
|
$ 112,103
|
$ 102,583
|
$ 2,271
|
$ 288,315
|
$ 0
|
$7,151,212
|
Ending Balance
|
Individually evaluated
for impairment
|
569,579
|
253,598
|
447,193
|
0
|
21,693
|
0
|
0
|
0
|
0
|
1,292,063
|
|
Collectively evaluated
for impairment
|
1,420,713
|
719,191
|
1,815,028
|
1,420,638
|
90,410
|
102,583
|
2,271
|
288,315
|
0
|
5,859,149
|
Loans receivables:
|
|||||||||||
Ending Balance
|
$55,691,393
|
$57,865,436
|
$102,412,694
|
$284,127,530
|
$10,897,307
|
$9,643,385
|
$189,279
|
$ 0
|
$987,086
|
$521,814,110
|
Allowance for Credit Losses as of and for the year ended December 31,2011
|
|||||||||||
Commercial
|
Mortgage
|
Residential
|
Deferred
|
Total
|
|||||||
Construction
|
Commercial
|
Real Estate
|
Warehouse
|
Real Estate
|
Consumer
|
Other
|
Unallocated
|
Fees
|
|||
Allowance for credit losses:
|
Beginning Bal. -
December 31, 2010
|
$1,744,068
|
$971,994
|
$1,723,865
|
$763,092
|
$67,828
|
$192,457
|
$1,910
|
$297,498
|
$ 0
|
$5,762,712
|
|
Provision charged to operations
|
1,663,459
|
262,110
|
8,133
|
358,964
|
23,248
|
(5,105)
|
467
|
247,052
|
0
|
2,558,328
|
|
Loans charged off
|
(2,361,783)
|
(303,403)
|
(134,296)
|
0
|
0
|
0
|
0
|
0
|
0
|
(2,799,482)
|
|
Recoveries of loans charged off
|
8,951
|
3,941
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
12,892
|
|
Ending Bal. –
December 31, 2011
|
$ 1,054,695
|
$ 934,642
|
$ 1,597,702
|
$ 1,122,056
|
$ 91,076
|
$ 187,352
|
$ 2,377
|
$ 544,550
|
$ 0
|
$5,534,450
|
|
Ending Balance
|
|||||||||||
Individually evaluated
for impairment
|
0
|
283,424
|
186,055
|
0
|
11,619
|
77,858
|
0
|
0
|
0
|
558,956
|
|
Collectively evaluated
for impairment
|
1,054,695
|
651,218
|
1,411,647
|
1,122,056
|
79,457
|
109,494
|
2,377
|
544,550
|
0
|
4,975,494
|
|
Loans receivables:
|
|||||||||||
Ending Balance
|
$49,285,783
|
$50,784,674
|
$99,636,976
|
$249,345,831
|
$12,885,352
|
$12,219,640
|
$255,556
|
$ 0
|
$1,017,959
|
$475,431,771
|
|
Individually evaluated
for impairment
|
140,055
|
952,156
|
1,934,120
|
0
|
661,171
|
77,858
|
0
|
0
|
0
|
3,765,360
|
|
Collectively evaluated
for impairment
|
49,145,728
|
49,832,518
|
97,702,856
|
249,345,831
|
12,224,181
|
12,141,782
|
255,556
|
0
|
1,017,959
|
471,666,411
|
Impaired Loans Receivables (By Class)
|
||||||
December 31, 2011
|
||||||
Recorded
Investment
|
Unpaid
Principal Balance
|
Related
Allowance
|
Year to Date
Average
Recorded
Investment
|
Year to Date
Interest Income
Recognized
|
||
With no related allowance:
|
||||||
Commercial
|
||||||
Construction
|
$140,055
|
$277,405
|
$0
|
$610,358
|
$0
|
|
Commercial Business
|
381,190
|
426,803
|
0
|
257,942
|
0
|
|
Commercial Real Estate
|
503,877
|
611,389
|
0
|
457,464
|
0
|
|
Mortgage Warehouse Lines
|
0
|
0
|
0
|
0
|
0
|
|
Subtotal
|
1,025,122
|
1,315,597
|
0
|
1,325,764
|
0
|
|
Residential Real Estate
|
142,477
|
142,477
|
0
|
11,873
|
0 | |
Consumer
|
||||||
Loans to Individuals
|
0
|
0
|
0
|
0
|
0
|
|
Other
|
0
|
0
|
0
|
0
|
0
|
|
Subtotal
|
0
|
0
|
0
|
0
|
0
|
|
Subtotal with no Related Allowance
|
1,167,599
|
1,458,074
|
0
|
1,337,637
|
0
|
|
With an allowance:
|
||||||
Commercial
|
||||||
Construction
|
0
|
0
|
0
|
2,389,162
|
0
|
|
Commercial Business
|
570,966
|
570,966
|
283,424
|
791,808
|
10,001
|
|
Commercial Real Estate
|
1,430,243
|
1,430,243
|
186,055
|
1,036,007
|
2,294
|
|
Mortgage Warehouse Lines
|
0
|
0
|
0
|
0
|
0
|
|
Subtotal
|
2,001,209
|
2,001,209
|
469,479
|
4,216,977
|
12,295
|
|
Residential Real Estate
|
518,694
|
518,694
|
11,619
|
490,081
|
0
|
|
Consumer
|
||||||
Loans to Individuals
|
77,858
|
77,858
|
77,858
|
77,858
|
0
|
|
Other
|
0
|
0
|
0
|
0
|
0
|
|
Subtotal
|
77,858
|
77,858
|
77,858
|
77,858
|
0
|
|
Subtotal with an Allowance
|
2,597,761
|
2,597,761
|
558,956
|
4,784,916
|
12,295
|
|
Total:
|
||||||
Commercial
|
3,026,331
|
3,316,806
|
469,479
|
5,542,741
|
12,295
|
|
Residential Real Estate
|
661,171
|
661,171
|
11,619
|
501,954
|
0
|
|
Consumer
|
77,858
|
77,858
|
77,858
|
77,858
|
0
|
|
Total:
|
$3,765,360
|
$4,055,835
|
$558,956
|
$6,122,553
|
$12,295
|
Number of
Contracts |
Pre-Modification
Outstanding Recorded Investment |
Post-Modification
Outstanding Recorded Investment |
||||||||||
Troubled Debt Restructurings:
|
||||||||||||
Commercial
|
2 | $ | 137,028 | $ | 86,794 | |||||||
Construction
|
1 | 1,278,362 | 1,261,000 |
Number of
Contracts |
Pre-Modification
Outstanding Recorded Investment |
Post-Modification
Outstanding Recorded Investment |
||||||||||
Troubled Debt Restructurings:
|
||||||||||||
Commercial
|
4 | $ | 329,889 | $ | 329,889 | |||||||
Commercial Real Estate
|
2 | 840,106 | 840,106 | |||||||||
Residential Real Estate
|
1 | 519,913 | 519,913 |
Number of
Contracts |
Recorded
Investment |
||||
Troubled Debt Restructurings
|
|||||
that subsequently defaulted:
|
|||||
Commercial
|
2
|
$
|
82,113
|
Number of
Contracts |
Recorded
Investment |
||||
Troubled Debt Restructurings
|
|||||
that subsequently defaulted:
|
|||||
Commercial
|
1
|
$
|
22,471
|
||
Residential Real Estate
|
1
|
518,694
|
December 31,
|
||||||||
2012
|
2011
|
|||||||
Balance, beginning of year
|
$
|
3,077,361
|
$
|
3,368,786
|
||||
Loans granted
|
412,581
|
9,711
|
||||||
Repayments of loans
|
(233,208)
|
(301,136)
|
||||||
Balance, end of year
|
$
|
3,256,734
|
$
|
3,077,361
|
December 31,
|
|||||||||
Estimated
Useful Lives
|
2012
|
2011
|
|||||||
Land
|
$
|
1,797,528
|
$
|
1,797,528
|
|||||
Construction in progress
|
0
|
18,427
|
|||||||
Building
|
40 Years
|
7,272,293
|
7,300,110
|
||||||
Leasehold improvements
|
10 Years
|
4,016,113
|
3,291,727
|
||||||
Furniture and equipment
|
3 – 15 Years
|
3,745,340
|
3,409,030
|
||||||
16,831,274
|
15,816,822
|
||||||||
Less: Accumulated depreciation
|
(6,200,979
|
)
|
(5,377,518
|
)
|
|||||
$
|
10,630,295
|
$
|
10,439,304
|
2012
|
2011
|
|||||||
Goodwill
|
$ | 3,764,314 | $ | 3,764,314 | ||||
Core deposits intangible
|
1,393,228 | 1,661,195 | ||||||
Total
|
$ | 5,157,542 | $ | 5,425,509 |
2013
|
$ |
267,967
|
||
2014
|
258,054
|
|||
2015
|
231,255
|
|||
2016
|
231,255
|
|||
2017
|
231,255
|
|||
Thereafter
|
173,442
|
|||
$ |
1,393,228
|
2012
|
2011
|
|||||||
Demand
|
||||||||
Non-interest bearing
|
$
|
152,334,759
|
$
|
105,470,543
|
||||
Interest bearing
|
211,475,765
|
201,987,751
|
||||||
Savings
|
202,261,035
|
176,198,907
|
||||||
Time
|
141,617,916
|
140,205,284
|
||||||
$
|
707,689,475
|
$
|
623,862,485
|
Year
|
Amount
|
|||
2013
|
$ | 82,529,124 | ||
2014
|
26,438,280 | |||
2015
|
12,191,851 | |||
2016
|
10,340,849 | |||
2017
|
10,117,812 | |||
$ | 141,617,916 |
Maturity Range
|
Amount
|
|||
Three months or less
|
$
|
9,056,166
|
||
Over three months through six months
|
12,170,788
|
|||
Over six months through twelve months
|
20,208,987
|
|||
Over twelve months
|
30,812,765
|
|||
$
|
72,248,706
|
2012
|
2011
|
|||||||
Federal-
|
||||||||
Current
|
$
|
3,089,047
|
$
|
1,238,594
|
||||
Deferred
|
(1,415,505
|
)
|
(79,149
|
)
|
||||
1,673,542
|
1,159,445
|
|||||||
State-
|
||||||||
Current
|
675,260
|
271,372
|
||||||
Deferred
|
(376,837
|
)
|
(139,686
|
)
|
||||
298,423
|
131,686
|
|||||||
$
|
1,971,965
|
$
|
1,291,131
|
2012
|
2011
|
|||||||
Federal income tax
|
$
|
2,391,039
|
$
|
1,775,675
|
||||
Add (deduct) effect of:
|
||||||||
State income taxes net of federal income tax effect
|
196,959
|
86,913
|
||||||
Tax-exempt interest income
|
(570,292
|
)
|
(507,294
|
)
|
||||
Bank-owned life insurance
|
(152,158
|
)
|
(137,475
|
)
|
||||
Other items, net
|
106,417
|
73,312
|
||||||
Provision for income taxes
|
$
|
1,971,965
|
$
|
1,291,131
|
2012
|
2011
|
|||||||
Deferred tax assets (liabilities):
|
||||||||
Write-downs and expenses of OREO
|
$
|
1,443,644
|
$
|
523,763
|
||||
Allowance for loan losses
|
2,856,194
|
2,210,460
|
||||||
Unrealized gain on securities available for sale
|
(571,763
|
)
|
(788,221
|
)
|
||||
SERP Liability
|
1,737,663
|
1,508,758
|
||||||
Other than temporary impairment loss
|
302,651
|
294,007
|
||||||
Depreciation
|
334,896
|
320,479
|
||||||
Nonaccrual interest
|
144,742
|
134,661
|
||||||
FAS 158 pension liability
|
65,493
|
70,668
|
||||||
Other
|
13,182
|
48,502
|
||||||
Net deferred tax assets
|
$
|
6,326,702
|
$
|
4,323,077
|
December 31,
2012
|
December 31,
2011
|
|||||||
Unrealized holding gains on securities available for sale
|
$ | 1,806,967 | $ | 2,318,299 | ||||
Related income tax effect
|
(571,763 | ) | (788,221 | ) | ||||
1,235,204 | 1,530,078 | |||||||
Unrealized impairment loss on held to maturity security
|
(500,944 | ) | (500,944 | ) | ||||
Related income tax effect
|
170,321 | 170,321 | ||||||
(330,623 | ) | (330,623 | ) | |||||
Pension Liability
|
(165,781 | ) | (178,661 | ) | ||||
Related income tax effect
|
65,493 | 70,668 | ||||||
(100,288 | ) | (107,993 | ) | |||||
Accumulated other comprehensive income
|
$ | 804,293 | $ | 1,091,462 |
Net Unrealized
Gains
On Available for
Sale Securities
|
Net Unrealized
Impairment Loss
On Held
to
Maturity
Security
|
Net Change in
Fair Value of
Interest Rate
Swap
Contract
|
Net Change
Related to
Defined
Benefit
Pension Plans
|
Accumulated
Other
Comprehensive
Income
|
||||||||||||||||
Balance, December 31, 2010
|
$ | 756,057 | $ | (330,623 | ) | $ | (211,562 | ) | $ | (115,698 | ) | $ | 98,174 | |||||||
Net Change
|
774,021 | - | 211,562 | 7,705 | 993,288 | |||||||||||||||
Balance, December 31, 2011
|
1,530,078 | (330,623 | ) | 0 | (107,993 | ) | 1,091,462 | |||||||||||||
Net Change
|
(294,874 | ) | 0 | 0 | 7,705 | (287,169 | ) | |||||||||||||
Balance, December 31, 2012
|
$ | 1,235,204 | $ | (330,623 | ) | $ | 0 | $ | (100,288 | ) | $ | 804,293 |
2012
|
2011
|
|||||||
Change in Benefit Obligation
|
||||||||
Liability for pension, beginning
|
$
|
3,952,450
|
$
|
3,392,213
|
||||
Service cost
|
247,293
|
273,702
|
||||||
Interest cost
|
200,290
|
208,231
|
||||||
Actuarial (gain) loss
|
117,724
|
78,304
|
||||||
Benefits paid
|
0
|
0
|
||||||
Liability for pension, ending
|
$
|
4,517,757
|
$
|
3,952,450
|
||||
Amount Recognized in Consolidated Balance Sheets
|
||||||||
Liability for pension
|
$
|
4,517,757
|
$
|
(3,952,450
|
)
|
|||
Net actuarial loss included in accumulated other comprehensive income
|
157,336
|
60,811
|
||||||
Prior service cost included in accumulated other comprehensive income
|
8,445
|
107,878
|
||||||
Net recognized pension expense
|
$
|
(4,351,977
|
)
|
$
|
(3,783,761
|
)
|
||
Information for pension plans with an accumulated
benefit obligation in excess of plan assets
|
||||||||
Projected benefit obligation
|
$
|
4,517,757
|
$
|
3,952,450
|
||||
Accumulated benefit obligation
|
3,380,461
|
3,602,957
|
||||||
Components of Net Periodic Benefit Cost
|
2012
|
2011
|
||||||
Service cost
|
$
|
247,293
|
$
|
273,702
|
||||
Interest cost
|
200,290
|
208,231
|
||||||
Amortization of prior service cost
|
99,432
|
99,432
|
||||||
Recognized net actuarial gain
|
21,201
|
(8,250
|
)
|
|||||
Net periodic benefit expense
|
$
|
568,216
|
$
|
573,115
|
Weighted-Average Assumptions, December 31
|
2012
|
2011
|
||||||
Discount Rate
|
6.00
|
%
|
6.00
|
%
|
||||
Salary Scale
|
4.00
|
%
|
4.00
|
%
|
Stock
Options
|
Number of
Shares |
Weighted
Average Exercise Price |
Weighted
Average Remaining Contractual Term (years) |
Aggregate
Intrinsic Value |
||||||||||||
Outstanding at January 1, 2011
|
172,060 | $ | 9.74 | |||||||||||||
Granted
|
64,782 | 6.84 | ||||||||||||||
Exercised
|
(14,573 | ) | 5.55 | |||||||||||||
Forfeited
|
- | - | ||||||||||||||
Expired
|
(15,518 | ) | 9.09 | |||||||||||||
Outstanding at December 31, 2011
|
206,751 | 9.20 | 6.2 | $ | 6,390 | |||||||||||
Granted
|
28,007 | 6.11 | ||||||||||||||
Exercised
|
(9,040 | ) | 7.43 | |||||||||||||
Forfeited
|
- | - | ||||||||||||||
Expired
|
(3,824 | ) | 7.95 | |||||||||||||
Outstanding at December 31, 2012
|
221,894 | $ | 8.91 | 6.0 | $ | 193,917 | ||||||||||
Exercisable at December 31, 2012
|
153,535 | $ | 9.90 | 4.9 | $ | 79,813 |
Outstanding Options
|
Exercisable Options
|
||||||
Exercise Price Range
|
Number
|
Average
Life in Years |
Average
Exercise Price |
Number
|
Average
Life in Years |
Average
Exercise Price |
|
$5.69 to $6.21
|
62,000
|
8.9
|
$ 6.15
|
19,200
|
8.8
|
$ 6.16
|
|
$6.79 to $10.75
|
96,376
|
6.0
|
$ 8.18
|
70,817
|
5.5
|
$ 8.40
|
|
$11.51 to $13.77
|
63,518
|
3.1
|
$ 12.70
|
63,518
|
3.1
|
$ 12.70
|
|
221,894
|
6.0
|
$ 8.91
|
153,535
|
4.9
|
$ 9.90
|
January
2012 |
December
2011 |
September
2011 |
January
2011 |
|
Fair value of options granted
|
$2.20
|
$2.14
|
$2.25
|
$3.09
|
Risk-free rate of return
|
0.84%
|
0.91%
|
0.90%
|
1.99%
|
Expected option life in years
|
7
|
7
|
7
|
7
|
Expected volatility
|
31.48%
|
31.48%
|
31.48%
|
33.02%
|
Expected dividends (1)
|
-
|
-
|
-
|
-
|
Non-vested Shares
|
Number of
Shares
|
Average
Grant-Date
Fair Value
|
||||||
Non-vested at January 1, 2011
|
120,744
|
$ |
6.98
|
|||||
Granted
|
74,921
|
6.61
|
||||||
Vested
|
(32,155
|
)
|
8.23
|
|||||
Forfeited
|
(4,169
|
)
|
7.39
|
|||||
Non-vested at December 31, 2011
|
159,341
|
6.54
|
||||||
Granted
|
47,034
|
8.73
|
||||||
Vested
|
(65,800
|
)
|
8.38
|
|||||
Forfeited
|
-
|
-
|
||||||
Non-vested at December 31, 2012
|
140,575
|
$ |
6.41
|
2013
|
$ | 940,518 | ||
2014
|
697,226 | |||
2015
|
457,434 | |||
2016
|
420,589 | |||
2017
|
411,257 | |||
Thereafter
|
620,333 | |||
$ | 3,547,357 |
2012
|
2011
|
|||||||
Marketing
|
$
|
185,738
|
$
|
183,467
|
||||
Equipment
|
862,765
|
928,554
|
||||||
Telephone
|
351,183
|
365,218
|
||||||
Regulatory, professional and other
consulting fees
|
726,556
|
931,339
|
||||||
Amortization of intangible assets
|
267,967
|
210,154
|
||||||
Other expenses
|
1,295,440
|
1,025,156
|
||||||
$
|
3,689,649
|
$
|
3,644,116
|
To Be Well Capitalized
|
||||||||||||||||||||||||
Under Prompt
|
||||||||||||||||||||||||
For Capital
|
Corrective
|
|||||||||||||||||||||||
Actual
|
Adequacy Purposes
|
Action Provisions
|
||||||||||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||||||||||||
As of December 31, 2012
|
||||||||||||||||||||||||
Company
|
||||||||||||||||||||||||
Total Capital to Risk Weighted Assets
|
$
|
81,213,909
|
12.98
|
%
|
$
|
50,044,960
|
>8
|
%
|
N/A
|
N/A
|
||||||||||||||
Tier I Capital to Risk Weighted Assets
|
74,062,697
|
11.84
|
%
|
25,022,480
|
>4
|
%
|
N/A
|
N/A
|
||||||||||||||||
Tier I Capital to Average Assets
|
74,062,697
|
9.29
|
%
|
31,881,576
|
>4
|
%
|
N/A
|
N/A
|
||||||||||||||||
Bank
|
||||||||||||||||||||||||
Total Capital to Risk Weighted Assets
|
$
|
78,621,740
|
12.57
|
%
|
$
|
50,044,960
|
>8
|
%
|
$
|
62,556,200
|
>10
|
%
|
||||||||||||
Tier I Capital to Risk Weighted Assets
|
71,470,528
|
11.43
|
%
|
25,022,480
|
>4
|
%
|
37,533,720
|
>6
|
%
|
|||||||||||||||
Tier I Capital to Average Assets
|
71,470,528
|
9.05
|
%
|
31,604,458
|
>4
|
%
|
39,505,573
|
>5
|
%
|
|||||||||||||||
As of December 31, 2011
|
||||||||||||||||||||||||
Company
|
||||||||||||||||||||||||
Total Capital to Risk Weighted Assets
|
$
|
72,037,863
|
12.22
|
%
|
$
|
47,164,800
|
>8
|
%
|
N/A
|
N/A
|
||||||||||||||
Tier I Capital to Risk Weighted Assets
|
66,434,272
|
11.27
|
%
|
23,582,400
|
>4
|
%
|
N/A
|
N/A
|
||||||||||||||||
Tier I Capital to Average Assets
|
66,434,272
|
8.82
|
%
|
30,138,401
|
>4
|
%
|
N/A
|
N/A
|
||||||||||||||||
Bank
|
||||||||||||||||||||||||
Total Capital to Risk Weighted Assets
|
$
|
69,172,940
|
11.73
|
%
|
$
|
47,164,800
|
>8
|
%
|
$
|
58,956,000
|
>10
|
%
|
||||||||||||
Tier I Capital to Risk Weighted Assets
|
63,638,489
|
10.79
|
%
|
23,582,400
|
>4
|
%
|
35,373,600
|
>6
|
%
|
|||||||||||||||
Tier I Capital to Average Assets
|
63,638,489
|
8.49
|
%
|
29,983,580
|
>4
|
%
|
37,479,475
|
>5
|
%
|
Level 1:
|
Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
|
Level 2:
|
Quoted prices in markets that are not active, or inputs that are observable either directly or indirectly, for substantially the full term of the asset or liability.
|
Level 3
:
|
Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported with little or no market activity).
|
Level 1
Inputs
|
Level 2
Inputs
|
Level 3
Inputs
|
Total Fair
Value
|
|||||||||||||
December 31, 2012:
|
||||||||||||||||
Securities available for sale:
|
||||||||||||||||
U.S. Treasury Securities and obligations of
U.S. Government sponsored corporations
(“GSE”) and agencies
|
$ | 27,923,670 | $ | 1,571,865 | $ | - | $ | 29,495,535 | ||||||||
Residential collateralized mortgage
obligations GSE
|
- | 6,632,665 | - | 6,632,665 | ||||||||||||
Residential collateralized mortgage
obligations – non GSE
|
- | 3,924,182 | - | 3,924,182 | ||||||||||||
Residential mortgage backed securities - GSE
|
- | 26,489,335 | - | 26,489,335 | ||||||||||||
Obligations of State and Political subdivisions
|
- | 20,682,301 | - | 20,682,301 | ||||||||||||
Trust preferred debt securities - single issuer
|
- | 1,998,366 | - | 1,998,366 | ||||||||||||
Corporate debt securities
|
- | 18,100,281 | - | 18,100,281 | ||||||||||||
Restricted stock
|
- | 2,493,300 | - | 2,493,300 | ||||||||||||
Mutual fund
|
- | 25,000 | - | 25,000 | ||||||||||||
December 31, 2011:
|
||||||||||||||||
Securities available for sale:
|
||||||||||||||||
U.S. Treasury Securities and obligations of
U.S. Government sponsored corporations
(“GSE”) and agencies
|
$ | 7,108,870 | $ | 12,363,819 | $ | - | $ | 19,472,689 | ||||||||
Residential collateralized mortgage
obligations GSE
|
- | 13,898,133 | - | 13,898,133 | ||||||||||||
Residential collateralized mortgage
obligations – non GSE
|
- | 4,300,444 | - | 4,300,444 | ||||||||||||
Residential mortgage backed securities - GSE
|
- | 42,687,209 | - | 42,687,209 | ||||||||||||
Obligations of State and Political subdivisions
|
- | 5,700,514 | - | 5,700,514 | ||||||||||||
Trust preferred debt securities - single issuer
|
- | 1,751,241 | - | 1,751,241 | ||||||||||||
Corporate debt securities
|
- | 1,435,944 | - | 1,435,944 | ||||||||||||
Restricted stock
|
- | 4,412,600 | - | 4,412,600 | ||||||||||||
Mutual fund
|
- | 25,000 | - | 25,000 | ||||||||||||
Level 1
Inputs
|
Level 2
Inputs
|
Level 3
Inputs
|
Total Fair
Value
|
|||||||||||||
December 31, 2012:
|
||||||||||||||||
Impaired loans
|
- | - | $ | 4,794,369 | $ | 4,794,369 | ||||||||||
Other real estate owned
|
- | - | 6,568,781 | 6,568,781 | ||||||||||||
December 31, 2011:
|
||||||||||||||||
Impaired loans
|
- | - | $ | 2,038,805 | $ | 2,038,805 | ||||||||||
Other real estate owned
|
- | - | 491,536 | 491,536 |
Quantitative Information about Level 3 Fair Value
Measurements
|
||||
Fair Value
Estimate
|
Valuation
Techniques
|
Unobservable
Input
|
Range of
Adjustments
|
|
December 31, 2012
|
||||
Impaired loans
|
$4,794,369
|
Appraisal of
collateral (1)
|
Appraisal
adjustments (2)
|
5-50%
|
Other Real Estate Owned
|
$6,568,781
|
Appraisal of
collateral (1)
|
Appraisal
adjustments (2)
|
8-60%
|
|
(1)
|
Fair value is generally determined through independent appraisals of the underlying collateral, which generally include various Level 3 inputs that are not identifiable.
|
|
(2)
|
Includes qualitative adjustments by management and estimated liquidation expenses.
|
December 31, 2012
|
||||||||||||||||||||
Carrying
Value
|
Level 1
Inputs
|
Level 2
Inputs
|
Level 3
Inputs
|
Fair
Value
|
||||||||||||||||
Cash and cash
equivalents
|
$ | 14,044,921 | $ | 14,044,921 | - | - | $ | 14,044,921 | ||||||||||||
Securities available
for sale
|
109,840,965 | 27,923,670 | 81,917,295 | - | 109,840,965 | |||||||||||||||
Securities held to
maturity
|
116,027,900 | - | 121,839,363 | - | 121,839,363 | |||||||||||||||
Loans held for sale
|
35,960,262 | - | 35,960,262 | - | 35,960,262 | |||||||||||||||
Loans
|
514,662,898 | - | - | 515,577,788 | 515,577,788 | |||||||||||||||
Accrued interest
receivable
|
2,872,099 | - | 2,872,099 | - | 2,872,099 | |||||||||||||||
Deposits
|
(707,689,475 | ) | - | (709,678,000 | ) | - | (709,678,000 | ) | ||||||||||||
Borrowings
|
(42,400,000 | ) | - | (43,906,000 | ) | - | (43,906,000 | ) | ||||||||||||
Redeemable
subordinated
debentures
|
(18,557,000 | ) | - | (18,557,000 | ) | - | (18,557,000 | ) | ||||||||||||
Accrued interest
payable
|
(1,057,779 | ) | - | (1,057,779 | ) | - | (1,057,779 | ) | ||||||||||||
December 31, 2011
|
||||||||
Carrying
|
Fair
|
|||||||
Value
|
Value
|
|||||||
Cash and cash equivalents
|
$
|
15,195,259
|
$
|
15,195,259
|
||||
Securities available for sale
|
93,683,774
|
93,683,774
|
||||||
Securities held to maturity
|
142,474,423
|
147,621,280
|
||||||
Loans held for sale
|
19,234,111
|
19,234,111
|
||||||
Loans
|
469,897,321
|
471,633,550
|
||||||
Accrued interest receivable
|
2,996,848
|
2,996,848
|
||||||
Deposits
|
(623,862,485
|
)
|
(625,764,000
|
)
|
||||
Borrowings
|
(88,300,000
|
)
|
(90,163,000
|
)
|
||||
Redeemable subordinated debentures
|
(18,557,000
|
)
|
(18,557,000
|
)
|
||||
Accrued interest payable
|
(1,186,511
|
)
|
(1,186,511
|
)
|
December 31,
2012
|
December 31,
2011
|
|||||||
Assets
:
|
||||||||
Cash
|
$
|
271,638
|
$
|
658,959
|
||||
Investment securities available for sale
|
557,000
|
557,000
|
||||||
Investment in subsidiaries
|
80,461,566
|
70,155,460
|
||||||
Other assets
|
2,320,328
|
2,185,356
|
||||||
Total Assets
|
$
|
83,610,532
|
$
|
73,556,775
|
||||
Liabilities And Shareholders’ Equity
|
||||||||
Subordinated debentures
|
$
|
18,557,000
|
$
|
18,557,000
|
||||
Shareholders’ equity
|
65,053,532
|
54,999,775
|
||||||
Total Liabilities and Shareholders’ Equity
|
$
|
83,610,532
|
$
|
73,556,775
|
Year ended December 31,
|
||||||||
2012
|
2011
|
|||||||
Income:
|
||||||||
Interest
|
$
|
14,541
|
$
|
13,327
|
||||
Total Income
|
14,541
|
13,327
|
||||||
Expense:
|
||||||||
Interest
|
397,920
|
694,141
|
||||||
Total Expense
|
397,920
|
694,141
|
||||||
Loss before income taxes and equity in undistributed income of
Subsidiaries
|
(383,379
|
)
|
(680,814
|
)
|
||||
Federal income tax benefit
|
(131,232
|
)
|
(232,157
|
)
|
||||
Loss before equity in undistributed income of subsidiaries
|
(252,147
|
)
|
(448,657
|
)
|
||||
Equity in undistributed income of subsidiaries
|
5,312,651
|
4,380,100
|
||||||
Net Income
|
5,060,504
|
3,931,443
|
||||||
Equity in other comprehensive income (loss) of subsidiaries
|
(287,169)
|
993,288
|
||||||
Comprehensive Income
|
$
|
4,773,335
|
$
|
4,924,731
|
Year ended December 31,
|
||||||||
2012
|
2011
|
|||||||
Operating Activities:
|
||||||||
Net Income
|
$
|
5,060,504
|
$
|
3,931,443
|
||||
Adjustments:
|
||||||||
(Increase) in other assets
|
(134,972
|
)
|
(472,963
|
)
|
||||
Equity in undistributed income of subsidiaries
|
(5,312,651
|
)
|
(4,380,100
|
)
|
||||
Net cash used in operating activities
|
(387,119
|
)
|
(921,620
|
)
|
||||
Cash Flows From Investing Activities:
|
||||||||
Investment in subsidiary
|
(5,181,472
|
)
|
0
|
|||||
Repayment of investment in subsidiaries
|
0
|
549,870
|
||||||
Net cash (used in) provided by investing activities
|
(5,181,472
|
)
|
549,870
|
|||||
Cash Flows From Financing Activities:
|
||||||||
Issuance of common stock, net
|
5,303,840
|
336,355
|
||||||
Reissue (purchase) of treasury stock
|
(122,570
|
)
|
(33,063
|
)
|
||||
Net cash provided by financing activities
|
5,181,270
|
303,292
|
||||||
Net (decrease) in cash
|
(387,321
|
)
|
(68,458
|
)
|
||||
Cash at beginning of year
|
658,959
|
727,417
|
||||||
Cash at end of year
|
$
|
271,638
|
$
|
658,959
|
2012
|
||||||||||||||||
Dec. 31
|
Sept. 30
|
June 30
|
March 31
|
|||||||||||||
Summary of Operations
|
||||||||||||||||
Interest income
|
$
|
8,408,534
|
$
|
8,486,646
|
$
|
7,907,189
|
$
|
8,034,267
|
||||||||
Interest expense
|
1,225,923
|
1,242,244
|
1,279,267
|
1,403,708
|
||||||||||||
Net interest income
|
7,182,611
|
7,244,402
|
6,627,922
|
6,630,559
|
||||||||||||
Provision for loan losses
|
499,998
|
499,998
|
549,998
|
599,998
|
||||||||||||
Net interest income after provision
|
||||||||||||||||
for loan losses
|
6,682,613
|
6,744,404
|
6,077,924
|
6,030,561
|
||||||||||||
Non-interest income
|
1,597,670
|
1,316,727
|
1,187,966
|
1,165,165
|
||||||||||||
Non-interest expense
|
6,600,896
|
6,183,174
|
5,373,974
|
5,612,517
|
||||||||||||
Income before income taxes
|
1,679,387
|
1,877,957
|
1,891,916
|
1,583,209
|
||||||||||||
Income taxes
|
438,642
|
523,038
|
593,808
|
416,477
|
||||||||||||
Net income
|
$
|
1,240,745
|
$
|
1,354,919
|
$
|
1,298,108
|
$
|
1,166,732
|
||||||||
Net income per common share :
|
||||||||||||||||
Basic
|
$
|
0.21
|
$
|
0.25
|
$
|
0.24
|
$
|
0.22
|
||||||||
Diluted
|
$
|
0.20
|
$
|
0.25
|
$
|
0.24
|
$
|
0.22
|
||||||||
2011
|
||||||||||||||||
Dec. 31
|
Sept. 30
|
June 30
|
March 31
|
|||||||||||||
Summary of Operations
|
||||||||||||||||
Interest income
|
$
|
8,362,766
|
$
|
7,475,646
|
$
|
7,085,305
|
$
|
6,933,329
|
||||||||
Interest expense
|
1,516,719
|
1,630,175
|
1,871,266
|
1,769,204
|
||||||||||||
Net interest income
|
6,846,047
|
5,845,471
|
5,214,039
|
5,164,125
|
||||||||||||
Provision for loan losses
|
1,274,998
|
608,332
|
275,000
|
399,998
|
||||||||||||
Net interest income after provision
|
||||||||||||||||
For loan losses
|
5,571,049
|
5,237,139
|
4,939,039
|
4,764,127
|
||||||||||||
Non-interest income
|
1,121,924
|
1,229,264
|
1,140,312
|
1,024,750
|
||||||||||||
Non-interest expense
|
5,229,946
|
4,756,467
|
5,155,785
|
4,662,832
|
||||||||||||
Income before income taxes
|
1,463,027
|
1,709,936
|
923,566
|
1,126,045
|
||||||||||||
Income taxes
|
363,646
|
496,658
|
94,650
|
336,177
|
||||||||||||
Net income
|
$
|
1.099,381
|
$
|
1,213,278
|
$
|
828,916
|
$
|
789,868
|
||||||||
Net income per common share :
|
||||||||||||||||
Basic
|
$
|
0.21
|
$
|
0.23
|
$
|
0.16
|
$
|
0.15
|
||||||||
Diluted
|
$
|
0.21
|
$
|
0.23
|
$
|
0.16
|
$
|
0.15
|
||||||||
1st CONSTITUTION BANCORP
|
|||
Date: March 22, 2013
|
By:
|
/s/ ROBERT F. MANGANO
|
|
Robert F. Mangano
|
|||
President and Chief Executive Officer
|
|||
(Principal Executive Officer)
|
Signature
|
Capacity
|
Date
|
||
/s/ ROBERT F. MANGANO
|
President, Chief Executive Officer and Director
|
March 22, 2013
|
||
Robert F. Mangano
/s/ CHARLES S. CROW, III
|
(Principal Executive Officer)
Chairman of the Board
|
March 22, 2013
|
||
Charles S. Crow, III
/s/ DAVID C. REED
|
Director
|
March 22, 2013
|
||
David C. Reed
/s/ WILLIAM M. RUE
|
Director
|
March 22, 2013
|
||
William M. Rue
/s/ FRANK E. WALSH, III
|
Director
|
March 22, 2013
|
||
Frank E. Walsh, III
/s/ JOHN P. COSTAS
|
Director
|
March 22, 2013
|
||
John P. Costas
/s/ JOSEPH M. REARDON
|
Senior Vice President and Treasurer
|
March 22, 2013
|
||
Joseph M. Reardon
|
(Principal Accounting and Financial Officer)
|
Exhibit No.
|
Description
|
||
3
|
(i)(A)
|
Certificate of Incorporation of the Company (conformed copy) (incorporated by reference to Exhibit 3(i)(A) to the Company’s Form 10-K filed with the SEC on March 27, 2009)
|
|
3
|
(i)(B)
|
Certificate of Amendment to the Certificate of Incorporation increasing the number of shares designated as Series A Junior Participating Preferred Stock (incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K filed with the SEC on December 23, 2008)
|
|
3
|
(i)(C)
|
Certificate of Amendment to the Certificate of Incorporation establishing the terms of the Fixed Rate Cumulative Perpetual Preferred Stock, Series B (incorporated by reference to Exhibit 3.2 to the Company’s Form 8-K filed with the SEC on December 23, 2008)
|
|
3
|
(ii)(A)
|
Bylaws of the Company (conformed copy) (incorporated by reference to Exhibit 3(ii)(A) to the Company’s Form 8-K filed with the SEC on October 22, 2007)
|
|
4.1
|
Specimen Share of Common Stock (incorporated by reference to Exhibit 4.1 to the Company’s Form 10-KSB (SEC File No. 000-32891) filed with the SEC on March 22, 2002)
|
||
4.2
|
Rights Agreement, dated as of March 18, 2004, between 1st Constitution Bancorp and Registrar and Transfer Company, as Rights Agent (incorporated by reference to Exhibit 4.5 to the Company’s Form 8-A12G (SEC File No. 000-32891) filed with the SEC on March 18, 2004)
|
||
4.3
|
Warrant, dated December 23, 2008, to purchase shares of 1st Constitution Bancorp common stock (incorporated by reference to Exhibit 3.3 to the Company’s Form 8-K filed with the SEC on December 23, 2008)
|
||
4.4
|
Subscription Agent Agreement, dated as of September 5, 2012, between 1st Constitution Bancorp and Registrar and Transfer Company (incorporated by reference to Exhibit 4.4 to the Company’s Current Report on Form 8-K filed with the SEC on September 6, 2012)
|
||
4.5
|
*
|
Warrant, dated November 23, 2011, to purchase shares of 1
st
Constitution Bancorp common stock
|
|
4.6
|
*
|
Warrant, dated November 23, 2011, to purchase shares of 1
st
Constitution Bancorp common stock
|
|
10.1
|
#
|
1st Constitution Bancorp Supplemental Executive Retirement Plan, dated as of October 1, 2002 (Incorporated by reference to Exhibit 10.1 to the Company’s Form 10-QSB (SEC File No. 000-32891) filed with the SEC on November 13, 2002)
|
|
10.2
|
#
|
Amended and Restated 1st Constitution Bancorp Directors’ Insurance Plan, effective as of June 16, 2005 (incorporated by reference to Exhibit No. 10 to the Company’s Form 8-K (SEC File No. 000-32891) filed with the SEC on March 24, 2006)
|
|
10.3
|
#
|
1st Constitution Bancorp Form of Executive Life Insurance Agreement (Incorporated by reference to Exhibit 10.4 to the Company’s Form 10-QSB (SEC File No. 000-32891) filed with the SEC on November 13, 2002)
|
|
10.4
|
#
|
2000 Employee Stock Option and Restricted Stock Plan (incorporated by reference to Exhibit No. 6.3 to the Company’s Form 10-SB (SEC File No. 000-32891) filed with the SEC on June 15, 2001)
|
|
Exhibit No.
|
Description
|
||
10.5
|
#
|
Directors Stock Option and Restricted Stock Plan (incorporated by reference to Exhibit No. 6.4 to the Company’s Form 10-SB (SEC File No. 000-32891) filed with the SEC on June 15, 2001)
|
|
10.6
|
#
|
Amendment No. 1 to 1st Constitution Bancorp Supplemental Executive Retirement Plan, effective January 1, 2004 (incorporated by reference to Exhibit 10.12 to the Company’s Form 10-Q (SEC File No. 000-32891) filed with the SEC on August 11, 2004)
|
|
10.7
|
#
|
Change of Control Agreement, effective as of April 1, 2004, by and between the Company and Joseph M. Reardon (incorporated by reference to Exhibit 10.13 to the Company’s Form 10-Q (SEC File No. 000-32891) filed with the SEC on August 11, 2004)
|
|
10.8
|
#
|
Form of Stock Option Agreement under the 1st Constitution Bancorp Employee Stock Option and Restricted Stock Plan (incorporated by reference to Exhibit 10.14 to the Company’s Form 8-K (SEC File No. 000-32891) filed with the SEC on December 22, 2004)
|
|
10.9
|
#
|
Form of Restricted Stock Agreement under the 1st Constitution Bancorp Employee Stock Option and Restricted Stock Plan (incorporated by reference to Exhibit 10.15 to the Company’s Form 8-K (SEC File No. 000-32891) filed with the SEC on December 22, 2004)
|
|
10.10
|
#
|
The 1st Constitution Bancorp 2005 Equity Incentive Plan (incorporated by reference to Appendix A of the Company's proxy statement (SEC File No. 000-32891) filed with the SEC on April 15, 2005)
|
|
10.11
|
#
|
Form of Restricted Stock Agreement under the 1st Constitution Bancorp 2005 Equity Incentive Plan (incorporated by reference to Exhibit 10.18 to the Company’s Form 10-Q (SEC File No. 000-32891) filed with the SEC on August 8, 2005)
|
|
10.12
|
#
|
Form of Nonqualified Stock Option Agreement under the 1st Constitution Bancorp 2005 Equity Incentive Plan (incorporated by reference to Exhibit 10.19 to the Company’s Form 10-Q (SEC File No. 000-32891) filed with the SEC on August 8, 2005)
|
|
10.13
|
#
|
Form of Incentive Stock Option Agreement under the 1st Constitution Bancorp 2005 Equity Incentive Plan (incorporated by reference to Exhibit 10.20 to the Company’s Form 10-Q (SEC File No. 000-32891) filed with the SEC on August 8, 2005)
|
|
10.14
|
#
|
1st Constitution Bancorp 2006 Directors Stock Plan (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K (SEC File No. 000-32891) filed with the SEC on May 19, 2006)
|
|
10.15
|
#
|
Form of Nonqualified Stock Option Agreement under the 1st Constitution Bancorp 2006 Directors Stock Plan (incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K (SEC File No. 000-32891) filed with the SEC on May 19, 2006)
|
|
10.16
|
#
|
Form of Restricted Stock Agreement under the 1st Constitution Bancorp 2006 Directors Stock Plan (incorporated by reference to Exhibit 10.3 to the Company’s Form 8-K (SEC File No. 000-32891) filed with the SEC on May 19, 2006)
|
|
10.17
|
Amended and Restated Declaration of Trust of 1st Constitution Capital Trust II, dated as of June 15, 2006, among 1st Constitution Bancorp, as sponsor, the Delaware and institutional trustee named therein, and the administrators named therein (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K (SEC File No. 000-32891) filed with the SEC on June 16, 2006)
|
||
10.18
|
Indenture, dated as of June 15, 2006, between 1st Constitution Bancorp, as issuer, and the trustee named therein, relating to the Floating Rate Junior Subordinated Debt Securities due 2036 (incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K (SEC File No. 000-32891) filed with the SEC on June 16, 2006)
|
Exhibit No.
|
Description
|
||
10.19
|
Guarantee Agreement, dated as of June 15, 2006, between 1st Constitution Bancorp and the guarantee trustee named therein (incorporated by reference to Exhibit 10.3 to the Company’s Form 8-K (SEC File No. 000-32891) filed with the SEC on June 16, 2006)
|
||
10.20
|
#
|
Amendment No. 2 to 1st Constitution Bancorp Supplemental Executive Retirement Plan, effective as of December 31, 2004 (incorporated by reference to Exhibit 10.24 to the Company’s Form 10-K filed with the SEC on April 15, 2008)
|
|
10.21
|
#
|
1st Constitution Bancorp 2005 Supplemental Executive Retirement Plan, effective as of January 1, 2005 (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K (SEC File No. 000-32891) filed with the SEC on December 28, 2006)
|
|
10.22
|
Letter Agreement, dated December 23, 2008, including Securities Purchase Agreement – Standard Terms incorporated by reference therein, between 1st Constitution Bancorp and the U.S. Department of the Treasury (incorporated by reference to Exhibit 10 to the Company’s Form S-3 filed with the SEC on January 29, 2009)
|
||
10.23
|
#
|
Amended and Restated Employment Agreement between the Company and Robert F. Mangano dated as of July 1, 2010 (incorporated by reference to Exhibit 10 to the Company’s Form 8-K filed with the SEC on July 14, 2010)
|
|
10.24
|
Branch Purchase and Assumption Agreement and Agreement for Purchase
between Amboy Bank and 1
st
Constitution Bank
dated as of December 31, 2010 (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed with the SEC on January 3, 2011)
|
||
14
|
Code of Business Conduct and Ethics (incorporated by reference to Exhibit 14 to the Company’s Form 10-K (SEC File No. 000-32891) filed with the SEC on March 25, 2004)
|
||
21
|
*
|
Subsidiaries of the Company
|
|
23
|
*
|
Consent of Independent Registered Public Accounting Firm
|
|
31.1
|
*
|
Certification of the principal executive officer of the Company, pursuant to Securities Exchange Act Rule 13a-14(a)
|
|
31.2
|
*
|
Certification of the principal financial officer of the Company, pursuant to Securities Exchange Act Rule 13a-14(a)
|
|
32
|
*
|
Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of The Sarbanes-Oxley Act of 2002, signed by the principal executive officer and the principal financial officer of the Company
|
|
101.INS
|
*
|
XBRL Instance Document
x
|
|
101.SCH
|
*
|
XBRL Taxonomy Extension Schema Document
x
|
|
101.CAL
|
*
|
XBRL Taxonomy Extension Calculation Linkbase Document
x
|
|
101.DEF
|
*
|
XBRL Taxonomy Extension Definition Linkbase Document
x
|
|
101.LAB
|
*
|
XBRL Taxonomy Extension Label Linkbase Document
x
|
|
101.PRE
|
*
|
XBRL Taxonomy Extension Presentation Linkbase Document
x
|
|
x
|
These interactive data files are being furnished as part of this Annual Report, and in accordance with Rule 402 of Regulation S-T, shall not be deemed filed for purposes of Section 11 or 12 of the Securities Act of 1933, as amended, or Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability under those sections.
|
Holder: __________________
By: __________________
Name: __________________
Title: __________________
|
1
st
CONSTITUTION BANCORP
|
||||
By:
|
/s/ Robert F. Mangano | |||
Name:
|
Robert F. Mangano
|
|||
Title:
|
President
|
|||
Attest:
|
||||
By:
|
/s/ Jacalyn Nakushian | |||
Name:
|
Jacalyn Nakushian
|
|||
Title:
|
Assistant Secretary
|
Robert F. Mangano
|
Dan Ellefson
|
President and Chief Executive Officer
|
Stieven Capital Advisors, L.P.
|
1
st
Constitution Bancorp
|
12412 Powerscourt Dr., Suite 250
|
2650 Route 130
|
St. Louis, MO 63131
|
Cranbury, NJ 08512
|
dan.e@stievencapital.com
|
rfm@1stconstitution.com
|
Direct: (314) 779-2450
|
Fax: 609-655-8569
|
Fax: (314) 856-9996
|
Holder: __________________
By: __________________
Name: __________________
Title: __________________
|
1
st
CONSTITUTION BANCORP
|
||||
By:
|
/s/ Robert F. Mangano | |||
Name:
|
Robert F. Mangano
|
|||
Title:
|
President
|
|||
Attest:
|
||||
By:
|
/s/ Jacalyn Nakushian | |||
Name:
|
Jacalyn Nakushian
|
|||
Title:
|
Assistant Secretary
|
Robert F. Mangano
|
Dan Ellefson
|
President and Chief Executive Officer
|
Stieven Capital Advisors, L.P.
|
1
st
Constitution Bancorp
|
12412 Powerscourt Dr., Suite 250
|
2650 Route 130
|
St. Louis, MO 63131
|
Cranbury, NJ 08512
|
dan.e@stievencapital.com
|
rfm@1stconstitution.com
|
Direct: (314) 779-2450
|
Fax: 609-655-8569
|
Fax: (314) 856-9996
|
Name of Subsidiary
|
Other Names Under Which
Subsidiary Conducts Business
|
State or Other Jurisdiction of
Incorporation or Organization
|
||
1st Constitution Bank
|
N/A
|
New Jersey
|
||
1st Constitution Capital Trust II
|
N/A
|
Delaware
|
||
1st Constitution Investment Company of New Jersey, Inc.
|
N/A
|
New Jersey
|
||
FCB Assets Holdings, Inc.
|
N/A
|
New Jersey
|
||
204 South Newman Street Corp.
|
N/A
|
New Jersey
|
||
249 New York Avenue LLC
|
N/A
|
New Jersey
|
||
1st Constitution Title Agency, LLC*
|
N/A
|
New Jersey
|
||
|
1.
|
I have reviewed this annual report on Form 10-K of 1
st
Constitution Bancorp;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
/s/ ROBERT F. MANGANO
|
||
Name:
|
Robert F. Mangano
|
|
Title:
|
President and Chief Executive Officer
|
|
1.
|
I have reviewed this annual report on Form 10-K of 1
st
Constitution Bancorp;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
/s/ JOSEPH M. REARDON
|
||
Name:
|
Joseph M. Reardon
|
|
Title:
|
Senior Vice President and Treasurer
|
|
(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.
|
/s/ ROBERT F. MANGANO
|
||
Name:
|
Robert F. Mangano
|
|
Title:
|
President and Chief Executive Officer
|
|
Date:
|
March 22, 2013
|
/s/ JOSEPH M. REARDON
|
||
Name:
|
Joseph M. Reardon
|
|
Title:
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Senior Vice President and Treasurer
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Date:
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March 22, 2013
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