|
|
June 30,
|
|
|
December 31,
|
|
|
|
2011
|
|
|
2010
|
|
|
|
(In Thousands)
|
|
Fixed Rate Loans:
|
|
|
|
|
|
|
Maturing in 3 Months or Less
|
|
$
|
12,042
|
|
|
$
|
13,785
|
|
Maturing Between 3 and 12 Months
|
|
|
28,364
|
|
|
|
29,769
|
|
Maturing Between 1 and 5 Years
|
|
|
15,616
|
|
|
|
14,154
|
|
Maturing After 5 Years
|
|
|
596
|
|
|
|
631
|
|
|
|
|
|
|
|
|
|
|
Variable Rate Loans:
|
|
|
|
|
|
|
|
|
Maturing Quarterly or More Frequently
|
|
|
1,352
|
|
|
|
723
|
|
Maturing Between 3 and 12 Months
|
|
|
-
|
|
|
|
698
|
|
Maturing Between 1 and 5 Years
|
|
|
-
|
|
|
|
-
|
|
Non accrual Loans
|
|
|
971
|
|
|
|
2,276
|
|
|
|
|
|
|
|
|
|
|
Less: Allowance for Loan Losses
|
|
|
(1,800
|
)
|
|
|
(1,800
|
)
|
|
|
|
|
|
|
|
|
|
Net Loans
|
|
$
|
57,141
|
|
|
$
|
60,236
|
|
Loans are considered past due if the required principal and interest payments have not been received as of the date of such payments were due. Loans are placed on non-accrual status when, in management’s opinion, the borrower may be unable to meet the payment obligations as they become due, as well as when required by regulatory provisions. Loans may be placed on non-accrual status regardless of whether or not such loans are considered past due.
Non-accruals loans, segregated by class of loan, are as follows:
|
|
June 30,
|
|
|
December 31,
|
|
|
|
2011
|
|
|
2010
|
|
|
|
(in thousands)
|
|
Real Estate Mortgages
|
|
|
|
|
|
|
Residential 1-4 Family
|
|
$
|
727,438
|
|
|
$
|
793,000
|
|
Commercial
|
|
|
-
|
|
|
|
100,567
|
|
Construction
|
|
|
220,200
|
|
|
|
1,370,856
|
|
Second Mortgages
|
|
|
-
|
|
|
|
-
|
|
Other
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
|
11,305
|
|
|
|
-
|
|
Personal
|
|
|
11,793
|
|
|
|
11,793
|
|
Credit Cards
|
|
|
-
|
|
|
|
-
|
|
Overdrafts
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
970,736
|
|
|
$
|
2,276,216
|
|
An aging analysis of past due loans, segregated by class of loans, as of June 30, 2011 and December 31, 2010, is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ACCRUING
|
|
|
|
30-89
|
|
|
90-MORE
|
|
|
TOTAL
|
|
|
CURRENT
|
|
|
TOTAL
|
|
|
90-MORE
|
|
June 30, 2011
|
|
DAYS
|
|
|
DAYS
|
|
|
PAST DUE
|
|
|
LOANS
|
|
|
LOANS
|
|
|
PAST DUE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real Estate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Res.
|
|
$
|
1,500,249
|
|
|
$
|
970,901
|
|
|
$
|
2,471,150
|
|
|
$
|
18,342,647
|
|
|
$
|
20,813,797
|
|
|
$
|
243,463
|
|
Commercial
|
|
|
128,649
|
|
|
|
-
|
|
|
|
128,649
|
|
|
|
18,466,701
|
|
|
|
18,595,350
|
|
|
|
-
|
|
Construction
|
|
|
622,371
|
|
|
|
492,286
|
|
|
|
1,114,657
|
|
|
|
5,599,478
|
|
|
|
6,714,135
|
|
|
|
272,086
|
|
Second Mortgages
|
|
|
27,559
|
|
|
|
-
|
|
|
|
27,559
|
|
|
|
865,839
|
|
|
|
893,398
|
|
|
|
-
|
|
Other
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,668,276
|
|
|
|
1,668,276
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
|
25,938
|
|
|
|
16,049
|
|
|
|
41,987
|
|
|
|
2,583,324
|
|
|
|
2,625,311
|
|
|
|
4,744
|
|
Personal
|
|
|
32,151
|
|
|
|
100,970
|
|
|
|
133,121
|
|
|
|
1,407,038
|
|
|
|
1,540,159
|
|
|
|
89,177
|
|
Credit Cards
|
|
|
53,713
|
|
|
|
101,667
|
|
|
|
155,380
|
|
|
|
5,786,265
|
|
|
|
5,941,645
|
|
|
|
101,667
|
|
Overdrafts
|
|
|
1,905
|
|
|
|
55,496
|
|
|
|
57,401
|
|
|
|
91,051
|
|
|
|
148,452
|
|
|
|
55,496
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
2,392,535
|
|
|
$
|
1,737,369
|
|
|
$
|
4,129,904
|
|
|
$
|
54,810,619
|
|
|
$
|
58,940,523
|
|
|
$
|
766,633
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ACCRUING
|
|
|
|
30-89
|
|
|
90-MORE
|
|
|
TOTAL
|
|
|
CURRENT
|
|
|
TOTAL
|
|
|
90-MORE
|
|
December 31, 2010
|
|
DAYS
|
|
|
DAYS
|
|
|
PAST DUE
|
|
|
LOANS
|
|
|
LOANS
|
|
|
PAST DUE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real Estate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Res.
|
|
$
|
1,467,116
|
|
|
$
|
2,410,231
|
|
|
$
|
3,877,347
|
|
|
$
|
15,664,040
|
|
|
$
|
19,541,387
|
|
|
$
|
1,617,230
|
|
Commercial
|
|
|
327,960
|
|
|
|
100,567
|
|
|
|
428,527
|
|
|
|
19,853,380
|
|
|
|
20,281,907
|
|
|
|
-
|
|
Construction
|
|
|
406,363
|
|
|
|
1,370,855
|
|
|
|
1,777,218
|
|
|
|
7,246,281
|
|
|
|
9,023,499
|
|
|
|
-
|
|
Second Mortgages
|
|
|
28,730
|
|
|
|
-
|
|
|
|
28,730
|
|
|
|
919,956
|
|
|
|
948,686
|
|
|
|
-
|
|
Other
|
|
|
278,725
|
|
|
|
|
|
|
|
278,725
|
|
|
|
1,446,209
|
|
|
|
1,724,934
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
|
461,279
|
|
|
|
1,441
|
|
|
|
462,720
|
|
|
|
2,263,558
|
|
|
|
2,726,278
|
|
|
|
1,441
|
|
Personal
|
|
|
62,838
|
|
|
|
22,493
|
|
|
|
85,331
|
|
|
|
1,105,808
|
|
|
|
1,191,139
|
|
|
|
10,700
|
|
Credit Cards
|
|
|
129,317
|
|
|
|
55,518
|
|
|
|
184,835
|
|
|
|
6,136,524
|
|
|
|
6,321,359
|
|
|
|
55,518
|
|
Overdrafts
|
|
|
3,800
|
|
|
|
210,101
|
|
|
|
213,901
|
|
|
|
63,031
|
|
|
|
276,932
|
|
|
|
210,101
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
3,166,128
|
|
|
$
|
4,171,206
|
|
|
$
|
7,337,334
|
|
|
$
|
54,698,787
|
|
|
$
|
62,036,121
|
|
|
$
|
1,894,990
|
|
Loans are considered impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due in accordance with the original contractual terms of the loan agreement, including scheduled principal and interest payments. If a loan is impaired, a specific valuation allowance is allocated, if necessary, so that the loan is reported net, at the present value of estimated future cash flows using the loan’s existing rate or at the fair value of collateral if repayment is expected solely from the collateral. Impaired loans, or portions thereof, are charged off when deemed uncollectible.
Impaired loans as of June 30, 2011 are set forth in the following table:
|
|
Unpaid Contractual Principal Balance
|
|
|
Recorded Investment with No Allowance
|
|
|
Recorded Investment with Allowance
|
|
|
Total Recorded Investment
|
|
|
Related Allowance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real Estate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential 1-4 Family
|
|
$
|
3,725,308
|
|
|
$
|
-
|
|
|
$
|
3,725,308
|
|
|
$
|
3,725,308
|
|
|
$
|
748,113
|
|
Commercial
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Construction
|
|
|
574,171
|
|
|
|
-
|
|
|
|
574,171
|
|
|
|
574,171
|
|
|
|
91,128
|
|
Second Mortgages
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Other
|
|
|
11,793
|
|
|
|
-
|
|
|
|
11,793
|
|
|
|
11,793
|
|
|
|
5,323
|
|
Commercial
|
|
|
6,614
|
|
|
|
-
|
|
|
|
6,614
|
|
|
|
6,614
|
|
|
|
-
|
|
Personal
|
|
|
82,088
|
|
|
|
-
|
|
|
|
82,088
|
|
|
|
82,088
|
|
|
|
7,845
|
|
Credit Cards
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Overdrafts
|
|
|
46,718
|
|
|
|
-
|
|
|
|
46,718
|
|
|
|
46,718
|
|
|
|
7,008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
4,446,692
|
|
|
$
|
-
|
|
|
$
|
4,446,692
|
|
|
$
|
4,446,692
|
|
|
$
|
859,417
|
|
Impaired loans as of December 31, 2010 are set forth in the following table:
|
|
Unpaid Contractual Principal Balance
|
|
|
Recorded Investment with No Allowance
|
|
|
Recorded Investment with Allowance
|
|
|
Total Recorded Investment
|
|
|
Related Allowance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real Estate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential 1-4 Family
|
|
$
|
3,061,009
|
|
|
$
|
-
|
|
|
$
|
3,061,009
|
|
|
$
|
3,061,009
|
|
|
$
|
532,438
|
|
Commercial
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Construction
|
|
|
1,573,321
|
|
|
|
-
|
|
|
|
1,573,321
|
|
|
|
1,573,321
|
|
|
|
382,261
|
|
Second Mortgages
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Other
|
|
|
115,856
|
|
|
|
-
|
|
|
|
115,856
|
|
|
|
115,856
|
|
|
|
11,284
|
|
Commercial
|
|
|
7,303
|
|
|
|
-
|
|
|
|
7,303
|
|
|
|
7,303
|
|
|
|
820
|
|
Personal
|
|
|
108,894
|
|
|
|
-
|
|
|
|
108,894
|
|
|
|
108,894
|
|
|
|
5,362
|
|
Credit Cards
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Overdrafts
|
|
|
205,751
|
|
|
|
-
|
|
|
|
205,751
|
|
|
|
205,751
|
|
|
|
30,863
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
5,072,134
|
|
|
$
|
-
|
|
|
$
|
5,072,134
|
|
|
$
|
5,072,134
|
|
|
$
|
963,028
|
|
Changes in the allowance for loan losses by portfolio segment for the six months ended June 30, 2011 are as follows:
|
|
Real Estate
|
|
|
Commercial
|
|
|
Personal
|
|
|
Credit Cards
|
|
|
Overdrafts
|
|
|
Unallocated
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at January 1, 2011
|
|
$
|
970,452
|
|
|
$
|
45,287
|
|
|
$
|
17,763
|
|
|
$
|
367,544
|
|
|
$
|
31,171
|
|
|
$
|
367,783
|
|
|
$
|
1,800,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for Possible Loan Losses
|
|
|
(108,888
|
)
|
|
|
11,883
|
|
|
|
7,830
|
|
|
|
32,466
|
|
|
|
(23,545
|
)
|
|
|
131,695
|
|
|
|
51,441
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charge-Offs
|
|
|
(19,153
|
)
|
|
|
(15,959
|
)
|
|
|
(6,060
|
)
|
|
|
(135,737
|
)
|
|
|
(1,242
|
)
|
|
|
(25
|
)
|
|
|
(178,176
|
)
|
Recoveries
|
|
|
43,364
|
|
|
|
-
|
|
|
|
2,930
|
|
|
|
79,747
|
|
|
|
694
|
|
|
|
|
|
|
|
126,735
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Charge-Offs
|
|
|
24,211
|
|
|
|
(15,959
|
)
|
|
|
(3,130
|
)
|
|
|
(55,990
|
)
|
|
|
(548
|
)
|
|
|
-
|
|
|
|
(51,441
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending Balance
|
|
$
|
885,775
|
|
|
$
|
41,211
|
|
|
$
|
22,463
|
|
|
$
|
344,020
|
|
|
$
|
7,078
|
|
|
$
|
499,453
|
|
|
$
|
1,800,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period-End Amount Allocated To:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans Individually Evaluated for Impairment
|
|
$
|
844,564
|
|
|
$
|
-
|
|
|
$
|
7,845
|
|
|
$
|
-
|
|
|
$
|
7,008
|
|
|
$
|
-
|
|
|
$
|
859,417
|
|
Loans Collectively Evaluated for Impairment
|
|
|
41,211
|
|
|
|
41,211
|
|
|
|
14,618
|
|
|
|
344,020
|
|
|
|
70
|
|
|
|
499,453
|
|
|
|
940,583
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending Balance
|
|
$
|
885,775
|
|
|
$
|
41,211
|
|
|
$
|
22,463
|
|
|
$
|
344,020
|
|
|
$
|
7,078
|
|
|
$
|
499,453
|
|
|
$
|
1,800,000
|
|
Changes in the allowance for loan losses by portfolio segment for the year ended December 31, 2010 are as follows:
|
|
Real Estate
|
|
|
Commercial
|
|
|
Personal
|
|
|
Credit Cards
|
|
|
Overdrafts
|
|
|
Unallocated
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at January 1, 2010
|
|
$
|
1,229,554
|
|
|
$
|
125,487
|
|
|
$
|
67,616
|
|
|
$
|
360,976
|
|
|
$
|
13,033
|
|
|
$
|
3,334
|
|
|
$
|
1,800,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for Possible Loan Losses
|
|
|
(256,220
|
)
|
|
|
(105,250
|
)
|
|
|
(43,117
|
)
|
|
|
312,444
|
|
|
|
32,382
|
|
|
|
364,449
|
|
|
|
304,688
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charge-Offs
|
|
|
(4,371
|
)
|
|
|
-
|
|
|
|
(6,736
|
)
|
|
|
(476,737
|
)
|
|
|
(16,704
|
)
|
|
|
-
|
|
|
|
(504,548
|
)
|
Recoveries
|
|
|
1,489
|
|
|
|
25,050
|
|
|
|
-
|
|
|
|
170,861
|
|
|
|
2,460
|
|
|
|
-
|
|
|
|
199,860
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Charge-Offs
|
|
|
(2,882
|
)
|
|
|
25,050
|
|
|
|
(6,736
|
)
|
|
|
(305,876
|
)
|
|
|
(14,244
|
)
|
|
|
-
|
|
|
|
(304,688
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending Balance
|
|
$
|
970,452
|
|
|
$
|
45,287
|
|
|
$
|
17,763
|
|
|
$
|
367,544
|
|
|
$
|
31,171
|
|
|
$
|
367,783
|
|
|
$
|
1,800,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period-End Amount Allocated To:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans Individually Evaluated for Impairment
|
|
$
|
925,985
|
|
|
$
|
820
|
|
|
$
|
5,363
|
|
|
$
|
-
|
|
|
$
|
30,862
|
|
|
$
|
-
|
|
|
$
|
963,030
|
|
Loans Collectively Evaluated for Impairment
|
|
|
44,467
|
|
|
|
44,467
|
|
|
|
12,400
|
|
|
|
367,544
|
|
|
|
309
|
|
|
|
367,783
|
|
|
|
836,970
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2010
|
|
$
|
970,452
|
|
|
$
|
45,287
|
|
|
$
|
17,763
|
|
|
$
|
367,544
|
|
|
$
|
31,171
|
|
|
$
|
367,783
|
|
|
$
|
1,800,000
|
|
From a credit risk standpoint, the Company classifies it loans in one four categories: (i) pass, (ii) watch, (iii) substandard or (iv) doubtful.
The classification of loans reflect a judgment about the risks of default and loss associated with the loan. The Company reviews the ratings on credits monthly. Ratings are adjusted to reflect the degree of risk and loss that is felt to be inherent in each credit as of each monthly reporting period. The methodology is structured so that specific allocations are increased in accordance with deterioration in credit quality (and a corresponding increase in risk and loss) or decreased in accordance with improvement in credit quality (and a corresponding decrease in risk and loss).
Credits rated
watch
show clear signs of financial weakness or deterioration in credit worthiness; however, such concerns are not so pronounced that the Company generally expects to experience significant loss within the short-term. Such credits typically maintain the ability to perform within standard credit terms and credit exposure is not as prominent as credits rated more harshly.
Credits rated
substandard
are those in which the normal repayment of principal and interest may be, or has been jeopardized by reason of adverse trends or developments in financial, managerial, economic or political nature, or important weaknesses exist in collateral. Corrective action is required to strengthen the Company’s position, and/or to reduce exposure and to assure that adequate remedial measures are taken by the borrower. Credit exposure becomes more likely in such credits.
Credits rated
doubtful
are those in which full collection of principal appears highly questionable, and which some degree of loss is anticipated, even though the ultimate amount of loss may not yet be certain and/or other factors exist which could affect collection of debt. Based upon available information, positive action by the Company is required to avert or minimize loss. Credits rated doubtful are generally also placed on nonaccrual.
At June 30, 2011, the following table summarizes the Company’s internal ratings of its loans:
|
|
Real Estate
|
|
|
Commercial
|
|
|
Personal
|
|
|
Credit Cards
|
|
|
Overdrafts
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pass
|
|
$
|
43,707,625
|
|
|
$
|
908,134
|
|
|
$
|
1,467,153
|
|
|
$
|
5,941,645
|
|
|
$
|
-
|
|
|
$
|
52,024,557
|
|
Watch
|
|
|
653,893
|
|
|
|
1,710,563
|
|
|
|
3,084
|
|
|
|
-
|
|
|
|
101,734
|
|
|
|
2,469,274
|
|
Substandard
|
|
|
4,323,438
|
|
|
|
6,614
|
|
|
|
69,922
|
|
|
|
-
|
|
|
|
46,718
|
|
|
|
4,446,692
|
|
Doubtful
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Totals
|
|
$
|
48,684,956
|
|
|
$
|
2,625,311
|
|
|
$
|
1,540,159
|
|
|
$
|
5,941,645
|
|
|
$
|
148,452
|
|
|
$
|
58,940,523
|
|
At December 31, 2010, the following table summarizes the Company’s internal ratings of its loans:
|
|
Real Estate
|
|
|
Commercial
|
|
|
Personal
|
|
|
Credit Cards
|
|
|
Overdrafts
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pass
|
|
$
|
44,399,289
|
|
|
$
|
1,546,798
|
|
|
$
|
1,082,245
|
|
|
$
|
6,321,359
|
|
|
$
|
-
|
|
|
$
|
53,349,691
|
|
Watch
|
|
|
2,382,733
|
|
|
|
1,160,384
|
|
|
|
-
|
|
|
|
-
|
|
|
|
71,181
|
|
|
|
3,614,298
|
|
Substandard
|
|
|
2,473,968
|
|
|
|
7,303
|
|
|
|
108,894
|
|
|
|
-
|
|
|
|
205,751
|
|
|
|
2,795,916
|
|
Doubtful
|
|
|
2,264,423
|
|
|
|
11,793
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,276,216
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Totals
|
|
$
|
51,520,413
|
|
|
$
|
2,726,278
|
|
|
$
|
1,191,139
|
|
|
$
|
6,321,359
|
|
|
$
|
276,932
|
|
|
$
|
62,036,121
|
|
Note D Financial Instruments
On January 1, 2008, the Company adopted the FASB fair value guidance pertaining to all financial assets and liabilities and nonfinancial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). This guidance defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements.
The fair value guidance defines fair value as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity. In addition, the fair value of liabilities should include consideration of non-performance risk including our own credit risk.
In addition to defining fair value, the fair value guidance expands the disclosure requirements around fair value and establishes a fair value hierarchy for valuation inputs. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of the three levels which is determined by the lowest level input that is significant to the fair value measurement in its entirety. These levels are:
|
·
|
Level 1 - Inputs are based upon unadjusted quoted prices for identical instruments traded in active markets
|
|
·
|
Level 2 - Inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market date for substantially the full term of the assets or liabilities
|
|
·
|
Level 3 - Inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques.
|
The following table presents the Company’s assets and liabilities measured at fair value on a recurring basis at June 30, 2011 and December 31, 2010 (amounts in thousands):
June 30, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Net Balance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Securities
|
|
$
|
-
|
|
|
$
|
814
|
|
|
$
|
-
|
|
|
$
|
814
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
-
|
|
|
$
|
814
|
|
|
$
|
-
|
|
|
$
|
814
|
|
December 31, 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Net Balance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Securities
|
|
$
|
-
|
|
|
$
|
814
|
|
|
$
|
-
|
|
|
$
|
814
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
-
|
|
|
$
|
814
|
|
|
$
|
-
|
|
|
$
|
814
|
|
Note D Subsequent Events
In accordance with the subsequent events topic of the ASC, the Company evaluates events and transactions that occur after the balance sheet date for potential recognition in the financial statements. The effect of all subsequent events that provide additional evidence of conditions that existed at the balance sheet date are recognized in the financial statements as of June 30, 2011. In preparing these financial statements, the Company evaluated the events and transactions that occurred from June 30, 2011 through the date these financial statements were issued.
ITEM 2 MANAGEMENT
'S
DISCUSSION AND ANALYSIS
JUNE 30, 2011 COMPARED WITH DECEMBER 31, 2010
BALANCE SHEET
Total assets at June 30, 2011 were $92,294,000 compared to $94,376,000 at December 31, 2010, for a decrease of $2,082,000, or 2.21%. Federal Funds Sold increased $1,825,000 from $14,950,000 at December 31, 2010 to $16,775,000 at June 30, 2011. Certificates of Deposit decreased $250,000 from $4,203,000 at December 31, 2010 to $3,953,000 at June 30, 2011. Both the increase in Federal Funds Sold and the decrease in Certificates of Deposit are due to normal fluctuations. Investment securities remained the same. Total loans decreased $3,095,000, or 5.14%, to $57,141,000 at June 30, 2011 from $60,236,000 at December 31, 2010. The decrease in the loan portfolio is due primarily to a decrease in decrease in commercial real estate loans of $1,686,000, a decrease in construction loans of $2,309,000, a decrease in second mortgage loans of $55,000, a decrease in other real estate loans of $57,000, a decrease in commercial loans of $101,000, a decrease in credit card loans of $380,000, and a decrease in overdrafts of $128,000. These decreases were offset by an increase in 1-4 residential loans of $1,272,000, and an increase in personal loans of $349,000. The credit card portfolio decrease was largely attributable to tightening of the Bank’s underwriting standards, normal attrition, and the cyclical nature of the business.
Total deposits decreased $2,014,000, or 02.50%, to $78,563,000 at June 30, 2011 from $80,577,000 at December 31, 2010. Total non-interest bearing deposits decreased $1,305,000 and interest-bearing accounts decreased $709,000. The decrease of interest earning deposits was mainly attributable to a decrease in NOW accounts of $587,000, an increase in money market accounts of $232,000, a decrease in savings accounts of $92,000 and a decrease of $262,000 in time deposits.
Other liabilities decreased $120,000 from $882,000 at December 31, 2010 to $762,000 at June 30, 2011. This decrease is due mainly to a decrease of $230,000 in deferred taxes offset by an increase in other liabilities of $96,000 and $14,000 in accrued interest.
Shareholder’s Equity increased $51,000 from $11,773,000 at December 31, 2010 to $11,824,000 at June 30, 2011. This increase is due mainly to net income for the six months ended June 30, 2011 of $52,000 and partially offset by a decrease in Preferred Stock of $1,000.
SIX MONTHS ENDED JUNE 30, 2011 COMPARED WITH SIX MONTHS ENDED JUNE 30, 2010
The Company’s net income for the six months ended June 30, 2011 was $53,000, or $0.29 per share, a decrease of $257,000 from the Company’s total net income of $310,000, or $1.73 per share, for the same period last year.
Interest income decreased $87,000 for the six months ended June 30, 2011 over the same period last year. Interest on federal funds sold increased $2,000 primarily due to an increase in the average balance of $3,581,000. Interest on investment securities decreased $5,000 due mainly to a decrease in the average balance from $2,428,000 at June 30, 2010 to $878,000 at June 30, 2011. Interest in the loan portfolio decreased $71,000 due mainly to a decrease in the average interest rate of 10.41% at June 30, 2010 to 10.18% at June 30, 2011 and a decrease in the average balance of $106,000. Interest on Certificates of Deposit purchased decreased $13,000 due to a decrease in the average balance of $3,967,000 with an average rate of 0.91% for 2011 as compared to an average balance of $4,805,000 with an average rate of 1.29% in 2010.
Interest expense decreased $2,000 for the six months ended June 30, 2011 over the same period last year. This was caused primarily by a decrease in the average interest rate paid on interest-bearing deposits from .77% at June 30, 2010 to .73% as of June 30, 2011. The impact of the decrease in the average interest rate paid on interest-bearing deposits was partially offset by an increase in the average balance of interest bearing deposits from $46,424,000 at June 30, 2010 to $48,344,000 at June 30, 2011. The average interest rate on interest-bearing liabilities decreased from .90% at June 30, 2010 to .86% at June 30, 2011.
Net interest income decreased $85,000 for the six months ended June 30, 2011 compared to the same period last year. Our interest rate spread decreased from 6.91% at June 30, 2010 to 6.62% at June 30, 2011. The decrease in the rate spread was due to an decrease of .32% on the yield on interest-earning assets from 7.81% for the six months ended June 30, 2010 to 7.49% for the six months ended June 30, 2011, and a decrease of .04% on the average rate paid out on interest bearing liabilities from .90% paid for the six months ended June 30, 2010 as compared to .86% paid during the six months ended June 30, 2011.
Non-interest income decreased $477,000 between the six month periods from $958,000 at June 30, 2010 to $481,000 at June 30, 2011. Income from Service Charges on deposit accounts decreased $9,000, Cardholder and Other Credit Card income decreased $1,000 and Other Operating income decreased $467,000. The decrease in Other Operating income is primarily due to the 2010 sale of ORE property for $395,000 and $78,000 of Dividend income received during the six months ended June 30, 2010.
Non-interest expense decreased $159,000 for the six month period of 2011 as compared to the same period last year. Salaries and Employee Benefits decreased $80,000 from $1,277,000 at June 30, 2010 to $1,197,000 at June 30, 2011. This decrease was due mainly to a reduction in the number of employees. Occupancy expense decreased by $78,000 due to lower building repairs and depreciation expenses. Communications increased by $7,000, Outsourcing fees increased by $17,000, Loan and Credit Card expense increased by $1,000, Professional fees increased $30,000 primarily due to an increase in Consulting Fees, ORE expenses decreased $125,000 due to a reduction in repairs expense incurred during the six months ended June 30, 2011 as compared to the six months ended June 30, 2010, and Other Operating expenses increased $70,000 due primarily to increases in our FDIC assessment and Telephone/Communications expense.
THREE MONTHS ENDED JUNE 30, 2011 COMPARED WITH THREE MONTHS ENDED JUNE 30, 2010
Net income for the second quarter of 2011 was $3,000, or $.02 per share, compared to $55,000, or $.31 per share, for the same period last year for a decrease of $52,000.
Interest income decreased $72,000 over the same period last year. Interest on the loan portfolio decreased $61,000 from $1,554,000 at June 30, 2010 to $1,493,000 at June 30, 2011. This was caused mainly by a decrease in the average balance of loans from $58,587,000 at June 30, 2010 to $57,754,000 at June 30, 2011. Interest on investment securities decreased $4,000 due mainly to a decrease in the average balance of investments from $2,995,000 at June 30, 2010 to $878,000 at June 30, 2011. Interest on certificates of deposit decreased $5,000 due mainly to a decrease in the interest rate of 1.20% in 2010 to 0.81% in 2011 and a decrease in the average balance from $4,683,000 to $3,953,000. Interest on federal funds sold decreased $1,000 due mainly to a decrease in the interest rate of 0.16% in 2010 to 0.09% in 2011 and offset by an increase in the average balance from $12,902,000 to $18,138,000.
Interest expense increased $1,000 for the three months ended June 30, 2010 over the same period last year. This was caused by an increase in the average balance of interest bearing deposits from $46,418,000 in 2010 to $48,438,000 in 2011 and was partially offset by a decrease in the interest rate from 0.76% to 0.73%.
Net interest income decreased $73,000 due primarily to a decrease in interest rate on earning assets of 0.51% and a decrease in interest bearing liabilities of 0.03%.
Non-interest income decreased $198,000 for the three-month period ended June 30, 2011 compared to the prior year period. Service Charges on Deposit accounts decreased $6,000 due mainly to NSF charges, Cardholder and Other Credit Card income decreased by $1,000 and Other operating income decreased by $191,000 due mainly to a gain on the sale of ORE recognized during the three months ended June 30, 2011.
Non-interest expense decreased $234,000 for the three-month period ended June 30, 2011 compared to the prior year period. Salaries and Employee benefits decreased $56,000 due to a reduction in number of employees. Occupancy expense decreased $34,000 due primarily to lower depreciation expenses along with lower building and maintenance repairs. Communications decreased $3,000 and Outsourcing fees decreased $10,000 due mainly to lower credit card interchange fees. ORE expense decreased $58,000 primarily due to a reduction of repair costs for the Bank’s ORE properties, and Other Operating expense decreased $75,000 primarily due to the recognition during the three months ended June 30, 2010 of a loss on the sale of a repossessed RV. Professional fees increased $2,000 for legal fees on foreclosures which occurred during the three months ended June 30, 2011.
The provision for income taxes decreased $92,000 compared to the same period last year from a provision of a benefit $85,000 at June 30, 2010 to a liability of $7,000 at June 30, 2011.
Item
3 Quantitative and Qualitative Disclosures about Market Risk, Catastrophic Events, and Future Growth
Management considers interest rate risk to be a market risk that could have a significant effect on the financial condition of the Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, and/or operating results. Difficult conditions in the financial services markets may materially and adversely affect the business and results of operations of the Bank and the Company.
Dramatic declines in the housing market during the past year, along with falling home prices and increasing foreclosures and unemployment, have resulted in significant write downs of asset values by financial institutions, including government-sponsored entities and major commercial and investment banks. These write-downs, initially of mortgage-backed securities by spreading to credit default swaps and other derivative securities, have caused many financial institutions to seek additional capital, to merge with larger and stronger institutions, and, in some cases, to fail. Many lenders and institutional investors have reduced, and in some cases, ceased to provide funding to borrowers, including other financial institutions. This market turmoil and tightening of credit have led to an increased level of commercial and consumer delinquencies, lack of consumer confidence, increased market volatility, and widespread reduction of business activity generally, which could have a material adverse effect on our business and operations. A worsening of these conditions would likely exacerbate any adverse effects of these difficult market conditions on us and others in the financial institutions industry.
However, the majority of small community banks, such as Bank of Louisiana, have strong reserve positions and are well capitalized.
The occurrence of catastrophic events such as hurricanes, tropical storms, earthquakes, windstorms, floods, severe winter weather, fires and other catastrophes could adversely affect our consolidated financial condition or results of operations. Unpredictable natural and other disasters could have an adverse effect on us in that such events could materially disrupt our operations or the ability or willingness of our customers to access financial services offered by us. The incidence and severity of catastrophic events could nevertheless reduce our earnings and cause volatility in our financial results for any fiscal quarter or year and have a material adverse effect on our financial condition or results of operation.
The Company is a customer-focused organization. Future growth is expected to be driven in a large part by the relationships maintained with customers. The Company has assembled an experienced management team, and has management development plans in place.
Item 4 Su
bmi
ssion of Matters to a Vote of Security Holders
The Annual Meeting of Shareholders of BOL BANCSHARES, INC. was held on April 12, 2011. Five nominees were elected to serve one year terms as directors. Laporte, Sehrt, Romig and Hand was approved as the independent auditors. There were no other matters voted upon at the meeting.
Below are the names of the nominees who were elected as directors and the number of shares cast for each. The total shares voting were 123,919.
|
|
Number of Shares
|
|
Nominee
|
|
For
|
|
|
Against
|
|
|
Abstain
|
|
G. Harrison Scott
|
|
|
123,644
|
|
|
|
99
|
|
|
|
176
|
|
Johny C. Crow
|
|
|
123,644
|
|
|
|
99
|
|
|
|
176
|
|
Franck F. LaBiche
|
|
|
123,644
|
|
|
|
99
|
|
|
|
176
|
|
Sharry r. Scott
|
|
|
123,644
|
|
|
|
99
|
|
|
|
176
|
|
A. Earle Cefalu, Jr.
|
|
|
123,644
|
|
|
|
99
|
|
|
|
176
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Item 4T Controls and Pro
ced
ures
Under the supervision and with the participation of our management, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934) as of the end of the period covered by this report. Based upon that evaluation, the certifying officers of the Company have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures are effective to ensure that information required to be disclosed in the reports that the Company files or submits under the Securities and Exchange Act of 1934, is recorded, processed, summarized and reported within the applicable time periods specified by the Securities and Exchange Commission’s rules and forms. There has been no change in the Company’s internal control over financial reporting during the Company’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
PART II - OTHER INFORMATION
Item
6 Exhibits
Exhibits
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|
|
Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer
|
|
Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer
|
|
Certification Pursuant to 18 U.S.C. Section 1350
|
SIGNAT
UR
ES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
BOL BANCSHARES, INC.
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|
|
|
August 19, 2011
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/s/ G. Harrison Scott
|
|
Date
|
G. Harrison Scott
|
|
Chairman
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|
(in his capacity as a duly authorized officer of the Registrant)
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|
|
|
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/s/ Peggy L. Schaefer
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|
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Peggy L. Schaefer
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Treasurer
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|
(in her capacity as Chief Accounting Officer of the Registrant)
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22