mvbf_Current Folio_10Q

Table of Contents

 

United States

Securities and Exchange Commission

Washington, D.C. 20549

FORM 10-Q

(Mark One)

[  X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2015

 

OR

 

[     ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from               to                 .

Commission File number 000-50567

MVB Financial Corp.

(Exact name of registrant as specified in its charter)

 

 

 

West Virginia

20-0034461

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

 

301 Virginia Avenue

Fairmont, West Virginia  26554-2777

(Address of principal executive offices)

304-363-4800

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address, and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant has (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes  [ X ]                         No  [    ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes  [ X ]                         No  [    ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.  (Check One):

Large accelerated filer

Accelerated filer    [ X ]

Non-accelerated filer                            

Smaller reporting company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.)

Yes  [     ]                         No  [ X ]

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

As of May 8, 2015, the number of shares outstanding of the issuer’s only class of common stock was 7,983,285.

 

 


 

Table of Contents

MVB Financial Corp.

Table of Contents

 

 

 

Part I. 

Financial Information

 

 

Item 1. 

Financial Statements

 

 

 

The unaudited interim consolidated financial statements of MVB Financial Corp. (“the Company” or “MVB”) and subsidiaries (“Subsidiaries”) including MVB Bank, Inc. (the “Bank” or “MVB Bank”) and its wholly-owned subsidiary Potomac Mortgage Group, Inc., which does business as  MVB Mortgage (“MVB Mortgage”) and MVB Insurance, LLC (“MVB Insurance”) listed below are included on pages 3-31 of this report.

 

 

 

Consolidated Balance Sheets as of March 31, 2015 and December 31, 2014

 

Consolidated Statements of Income for the Three Months ended March 31, 2015 and 2014

 

Consolidated Statements of Comprehensive Income for the Three Months ended March 31, 2015 and 2014

 

Consolidated Statements of Cash Flows for the Three Months ended March 31, 2015 and 2014

 

Notes to Consolidated Financial Statements

 

 

Item 2. 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations are included on pages 32-43 of this report.

 

 

Item 3. 

Quantitative and Qualitative Disclosures About Market Risk.

 

 

Item 4. 

Controls and Procedures

 

 

Part II. 

Other Information

 

 

Item 1. 

Legal Proceedings

 

 

Item 1A. 

Risk Factors

 

 

Item 2. 

Unregistered Sales of Equity Securities and Use of Proceeds.

 

 

Item 3. 

Defaults Upon Senior Securities

 

 

Item 4. 

Mine Safety Disclosures

 

 

Item 5. 

Other Information

 

 

Item 6. 

Exhibits

 

 

 

2


 

Table of Contents

Part I. Financial Information

Item 1. Financial Statements

MVB Financial Corp. and Subsidiaries

Consolidated Balance Sheets  

(Dollars in thousands except per share data)

 

 

 

 

 

 

 

 

 

 

    

March 31,

    

December 31,

 

 

 

2015

 

2014

 

 

 

(Unaudited)

 

(Note 1)

 

Assets

 

 

 

 

 

 

 

Cash and cash equivalents:

 

 

 

 

 

 

 

Cash and due from banks

 

$

15,354 

 

$

13,403 

 

Interest bearing balances

 

 

11,191 

 

 

16,674 

 

Total cash and cash equivalents

 

 

26,545 

 

 

30,077 

 

Certificates of deposits in other banks

 

 

11,659 

 

 

11,907 

 

Investment securities:

 

 

 

 

 

 

 

Securities available-for-sale

 

 

67,204 

 

 

68,213 

 

Securities held-to-maturity (fair value of $55,412 for 2015 and $55,871 for 2014)

 

 

53,903 

 

 

54,538 

 

Loans held for sale

 

 

125,802 

 

 

69,527 

 

Loans:

 

 

831,285 

 

 

798,297 

 

Less: Allowance for loan losses

 

 

(6,481)

 

 

(6,223)

 

Net loans

 

 

824,804 

 

 

792,074 

 

Bank premises, furniture and equipment

 

 

25,412 

 

 

25,472 

 

Bank owned life insurance

 

 

21,846 

 

 

21,679 

 

Accrued interest receivable and other assets

 

 

20,019 

 

 

19,193 

 

Goodwill

 

 

17,779 

 

 

17,779 

 

Total assets

 

$

1,194,973 

 

$

1,110,459 

 

Liabilities

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

Non-interest bearing

 

$

77,278 

 

$

67,066 

 

Interest bearing

 

 

789,030 

 

 

756,161 

 

Total deposits

 

 

866,308 

 

 

823,227 

 

 

 

 

 

 

 

 

 

Accrued interest, taxes and other liabilities

 

 

12,189 

 

 

10,310 

 

Repurchase agreements

 

 

26,122 

 

 

32,673 

 

FHLB and other borrowings

 

 

145,243 

 

 

101,287 

 

Subordinated debt

 

 

33,524 

 

 

33,524 

 

Total liabilities

 

 

1,083,386 

 

 

1,001,021 

 

 

 

 

 

 

 

 

 

Stockholders’ equity

 

 

 

 

 

 

 

Preferred stock, par value $1,000;    20,783 authorized and 9,283 issued in 2015 and 2014, respectively

 

 

16,334 

 

 

16,334 

 

Common stock, par value $1; 20,000,000 shares authorized, 8,034,362 issued and 7,983,285 outstanding in 2015 and 2014, respectively

 

 

8,034 

 

 

8,034 

 

Additional paid-in capital

 

 

74,441 

 

 

74,342 

 

Retained earnings

 

 

16,416 

 

 

14,454 

 

Accumulated other comprehensive loss

 

 

(2,554)

 

 

(2,642)

 

Treasury stock, 51,077 shares, at cost

 

 

(1,084)

 

 

(1,084)

 

Total stockholders’ equity

 

 

111,587 

 

 

109,438 

 

Total liabilities and stockholders’ equity

 

$

1,194,973 

 

$

1,110,459 

 

 

See accompanying notes to unaudited financial statements.

3


 

Table of Contents

 

MVB Financial Corp. and Subsidiaries

Consolidated Statements of Income

(Unaudited) (Dollars in thousands except per share data)

 

 

 

 

 

 

 

 

 

 

Three months ended 

 

 

 

March 31,

 

 

 

2015

 

2014

 

Interest income

    

 

    

    

 

    

 

Interest and fees on loans

 

$

8,913 

 

$

7,298 

 

Interest on deposits with other banks

 

 

64 

 

 

46 

 

Interest on investment securities – taxable

 

 

239 

 

 

411 

 

Interest on tax exempt loans and securities

 

 

571 

 

 

754 

 

Total interest income

 

 

9,787 

 

 

8,509 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

 

 

 

 

 

Deposits

 

 

1,367 

 

 

1,105 

 

Repurchase agreements

 

 

24 

 

 

126 

 

FHLB and other borrowings

 

 

306 

 

 

263 

 

Subordinated debt

 

 

543 

 

 

19 

 

Total interest expense

 

 

2,240 

 

 

1,513 

 

Net interest income

 

 

7,547 

 

 

6,996 

 

Provision for loan losses

 

 

659 

 

 

519 

 

Net interest income after provision for loan losses

 

 

6,888 

 

 

6,477 

 

 

 

 

 

 

 

 

 

Noninterest income

 

 

 

 

 

 

 

Service charges on deposit accounts

 

 

132 

 

 

146 

 

Income on bank owned life insurance

 

 

167 

 

 

128 

 

Visa debit card and interchange income

 

 

209 

 

 

168 

 

Mortgage fee income

 

 

6,309 

 

 

3,210 

 

Gain on sale of portfolio loans

 

 

346 

 

 

675 

 

Insurance and investment services income

 

 

1,698 

 

 

1,016 

 

Gain on sale of securities

 

 

121 

 

 

 —

 

Gain on derivatives

 

 

2,249 

 

 

335 

 

Other operating income

 

 

180 

 

 

78 

 

Total noninterest income

 

 

11,411 

 

 

5,756 

 

 

 

 

 

 

 

 

 

Noninterest expense

 

 

 

 

 

 

 

Salary and employee benefits

 

 

9,734 

 

 

6,797 

 

Occupancy expense

 

 

875 

 

 

627 

 

Equipment depreciation and maintenance

 

 

483 

 

 

362 

 

Data processing and communications

 

 

926 

 

 

686 

 

Mortgage processing

 

 

746 

 

 

545 

 

Marketing, contributions and sponsorships

 

 

337 

 

 

246 

 

Professional fees

 

 

662 

 

 

498 

 

Printing, postage and supplies

 

 

186 

 

 

193 

 

Insurance, tax and assessment expense

 

 

428 

 

 

339 

 

Travel, entertainment, dues and subscriptions

 

 

320 

 

 

312 

 

Other operating expenses

 

 

270 

 

 

232 

 

Total noninterest expense

 

 

14,967 

 

 

10,837 

 

Income before income taxes

 

 

3,332 

 

 

1,396 

 

Income tax expense

 

 

1,229 

 

 

238 

 

Net income

 

$

2,103 

 

$

1,158 

 

Preferred dividends

 

 

142 

 

 

21 

 

Net income available to common shareholders

 

$

1,961 

 

$

1,137 

 

 

 

 

 

 

 

 

 

Earnings per share – basic

 

$

0.25 

 

$

0.15 

 

Earnings per share – diluted

 

$

0.24 

 

$

0.15 

 

Weighted average shares outstanding - basic

 

 

7,983,285 

 

 

7,606,661 

 

Weighted average shares outstanding - diluted

 

 

8,135,058 

 

 

7,828,143 

 

 

See accompanying notes to unaudited financial statements.

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Table of Contents

MVB Financial Corp. and Subsidiaries

Consolidated Statements of Comprehensive Income

(Unaudited)(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended 

 

 

 

March 31,

 

 

 

2015

 

2014

 

 

 

 

 

 

 

 

 

Net Income

    

$

2,103 

    

$

1,158 

 

 

 

 

 

 

 

 

 

Other comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized holding gains during the year

 

 

541 

 

 

537 

 

 

 

 

 

 

 

 

 

Income tax effect

 

 

(217)

 

 

(215)

 

 

 

 

 

 

 

 

 

Reclassification adjustment for gain recognized in income

 

 

(121)

 

 

 —

 

 

 

 

 

 

 

 

 

Income tax effect

 

 

49 

 

 

 —

 

 

 

 

 

 

 

 

 

Change in defined benefit pension plan

 

 

(273)

 

 

 —

 

 

 

 

 

 

 

 

 

Income tax effect

 

 

109 

 

 

 —

 

 

 

 

 

 

 

 

 

Other comprehensive income

 

 

88 

 

 

322 

 

 

 

 

 

 

 

 

 

Comprehensive income

 

$

2,191 

 

$

1,480 

 

 

See accompanying notes to unaudited financial statements.

 

 

 

5


 

Table of Contents

MVB Financial Corp. and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited) (Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

Three months ended 

 

 

 

March 31,

 

March 31,

 

 

 

2015

 

2014

 

Operating activities

    

 

    

    

 

    

  

Net income

 

$

2,103 

 

$

1,158 

 

Adjustments to reconcile net income to net cash (used in) provided by operating activities:

 

 

 

 

 

 

 

Net amortization and accretion of investments

 

 

185 

 

 

224 

 

Net amortization of deferred loan fees

 

 

22 

 

 

73 

 

Provision for loan losses

 

 

659 

 

 

519 

 

Depreciation and amortization

 

 

454 

 

 

289 

 

Stock based compensation

 

 

99 

 

 

58 

 

Loans originated for sale

 

 

(338,846)

 

 

(148,480)

 

Proceeds of loans sold

 

 

288,880 

 

 

190,675 

 

Mortgage fee income

 

 

(6,309)

 

 

(3,210)

 

Gain on sale of investment securities

 

 

(121)

 

 

 —

 

Income on bank owned life insurance

 

 

(167)

 

 

(128)

 

Deferred taxes

 

 

(20)

 

 

(645)

 

Other, net

 

 

2,433 

 

 

(4,632)

 

Net cash (used in) provided by operating activities

 

 

(50,628)

 

 

35,901 

 

Investing activities

 

 

 

 

 

 

 

Purchases of investment securities available-for-sale

 

 

(11,535)

 

 

 —

 

Purchases of investment securities held-to-maturity

 

 

 —

 

 

(250)

 

Maturities/paydowns of investment securities held-to-maturity

 

 

540 

 

 

 —

 

Maturities/paydowns of investment securities available-for-sale

 

 

1,511 

 

 

2,416 

 

Sales of investment securities available-for-sale

 

 

11,484 

 

 

 —

 

Purchases of premises and equipment

 

 

(394)

 

 

(2,296)

 

Net increase in loans

 

 

(33,411)

 

 

(53,327)

 

Purchases of restricted bank stock

 

 

(6,040)

 

 

(2,773)

 

Redemptions of restricted bank stock

 

 

4,349 

 

 

4,710 

 

Proceeds from sale of certificates of deposit with banks

 

 

248 

 

 

 —

 

Proceeds from sale of other real estate owned

 

 

 —

 

 

57 

 

Net cash used in investing activities

 

 

(33,248)

 

 

(51,463)

 

Financing activities

 

 

 

 

 

 

 

Net increase in deposits

 

 

43,081 

 

 

58,828 

 

Net (decrease) in repurchase agreements

 

 

(6,551)

 

 

(10,080)

 

Net change in short-term FHLB borrowings

 

 

43,997 

 

 

(44,128)

 

Principal payments on FHLB borrowings

 

 

(41)

 

 

(39)

 

Proceeds from stock offering

 

 

 —

 

 

3,723 

 

Preferred stock issuance

 

 

 —

 

 

48 

 

Cash dividends paid on preferred stock

 

 

(142)

 

 

(21)

 

Net cash provided by financing activities

 

 

80,344 

 

 

8,331 

 

(Decrease) in cash and cash equivalents

 

 

(3,532)

 

 

(7,231)

 

Cash and cash equivalents at beginning of period

 

 

30,077 

 

 

39,843 

 

Cash and cash equivalents at end of period

 

$

26,545 

 

$

32,612 

 

 

 

 

 

 

 

 

 

Supplemental disclosure of cash flow information

    

 

    

    

 

    

 

 

 

 

 

 

 

 

 

Cash payments for:

 

 

 

 

 

 

 

Interest on deposits, repurchase agreements and borrowings

 

$

2,547 

 

 

1,539 

 

Income taxes

 

$

 —

 

 

465 

 

 

See accompanying notes to unaudited financial statements.

 

 

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Table of Contents

MVB Financial Corp. and Subsidiaries

Notes to Consolidated Financial Statements

 

Note 1 – Basis of Presentation

 

These consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with instructions to Form 10‑Q.  Accordingly, they do not include all the information and footnotes required by GAAP for annual year-end financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation, have been included and are of a normal, recurring nature. The consolidated balance sheet as of December 31, 2014 has been derived from audited financial statements included in the Company’s 2014 filing on Form 10-K.  Operating results for the three months ended March 31, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015.

 

The accounting and reporting policies of MVB Financial Corp. (“the Company” or “MVB”) and its subsidiaries (“Subsidiaries”), including MVB Bank, Inc. (the “Bank”), the Bank’s subsidiary Potomac Mortgage Group, Inc., which does business as MVB Mortgage (“MVB Mortgage”) and MVB Insurance, LLC, conform to accounting principles generally accepted in the United States and practices in the banking industry. The preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Estimates, such as the allowance for loan losses, are based upon known facts and circumstances. Estimates are revised by management in the period such facts and circumstances change.  Actual results could differ from those estimates. All significant inter-company accounts and transactions have been eliminated in consolidation. 

 

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been omitted. These financial statements should be read in conjunction with the financial statements and notes thereto included in MVB’s December 31, 2014, Form 10-K filed with the Securities and Exchange Commission.

 

In certain instances, amounts reported in prior periods’ consolidated financial statements have been reclassified to conform to the current presentation. Specifically, a portion of the prior periods’ interest income and interest expense was classified as gain on loans held for sale and has been reclassified in the current presentation.

 

Information is presented in these notes with dollars expressed in thousands, unless otherwise noted or specified.

 

Note 2 – Recent Accounting Pronouncements 

 

In February 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis.  The amendments modify the evaluation reporting organizations must perform to determine if certain legal entities should be consolidated as VIEs. Specifically, the amendments: (1) Modify the evaluation of whether limited partnerships and similar legal entities are variable interest entities (“VIEs”) or voting interest entities; (2) Eliminate the presumption that a general partner should consolidate a limited partnership; (3) Affect the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships; and (4) Provide a scope exception from consolidation guidance for reporting entities with interests in legal entities that are required to comply with or operate in accordance with requirements that are similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds. ASU No. 2015-02 is effective for interim and annual reporting periods beginning after December 15, 2015. The Company is currently evaluating the provisions of ASU No. 2015-02 to determine the potential impact the new standard will have on the Company's consolidated financial statements.

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Note 3 – Investments

 

Amortized cost and fair values of investment securities held-to-maturity at March 31, 2015, including gross unrealized gains and losses, are summarized as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

Amortized

    

Unrealized

    

Unrealized

    

Fair

 

(in thousands)

 

Cost

 

Gain

 

Loss

 

Value

 

Municipal securities

 

$

53,903 

 

$

1,716 

 

$

(207)

 

$

55,412 

 

Total investment securities held-to-maturity

 

$

53,903 

 

$

1,716 

 

$

(207)

 

$

55,412 

 

 

Amortized cost and fair values of investment securities held-to-maturity at December 31, 2014, including gross unrealized gains and losses, are summarized as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

Amortized

    

Unrealized

    

Unrealized

    

Fair

 

(in thousands)

 

Cost

 

Gain

 

Loss

 

Value

 

Municipal securities

 

$

54,538 

 

$

1,600 

 

$

(267)

 

$

55,871 

 

Total investment securities held–to-maturity

 

$

54,538 

 

$

1,600 

 

$

(267)

 

$

55,871 

 

 

Amortized cost and fair values of investment securities available-for-sale at March 31, 2015 are summarized as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

Amortized

    

Unrealized

    

Unrealized

    

Fair

 

(in thousands)

 

Cost

 

Gain

 

Loss

 

Value

 

U.S. Agency securities

 

$

30,856 

 

$

32 

 

$

(109)

 

$

30,779 

 

U.S. Sponsored Mortgage-backed securities

 

 

35,936 

 

 

91 

 

 

(359)

 

 

35,668 

 

Total debt securities

 

 

66,792 

 

 

123 

 

 

(468)

 

 

66,447 

 

Equity and other securities

 

 

670 

 

 

87 

 

 

 —

 

 

757 

 

Total investment securities available-for-sale

 

$

67,462 

 

$

210 

 

$

(468)

 

$

67,204 

 

 

Amortized cost and fair values of investment securities available-for-sale at December 31, 2014 are summarized as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

Amortized

    

Unrealized

    

Unrealized

    

Fair

 

(in thousands)

 

Cost

 

Gain

 

Loss

 

Value

 

U.S. Agency securities

 

$

37,926 

 

$

73 

 

$

(465)

 

$

37,534 

 

U.S. Sponsored Mortgage-backed securities

 

 

30,293 

 

 

58 

 

 

(419)

 

 

29,932 

 

Total debt securities

 

 

68,219 

 

 

131 

 

 

(884)

 

 

67,466 

 

Equity and other securities

 

 

670 

 

 

77 

 

 

 —

 

 

747 

 

Total investment securities available-for-sale

 

$

68,889 

 

$

208 

 

$

(884)

 

$

68,213 

 

 

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Table of Contents

The following tables summarize amortized cost and fair values of debt securities by maturity at March 31, 2015:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Held to Maturity

 

Available for sale

 

 

    

Amortized

    

Fair

    

Amortized

    

Fair

 

 

 

Cost

 

Value

 

Cost

 

Value

 

Within one year

 

$

 —

 

$

 —

 

$

 —

 

$

 —

 

After one year, but within five

 

 

3,145 

 

 

3,239 

 

 

13,120 

 

 

13,100 

 

After five years, but within ten

 

 

15,994 

 

 

16,402 

 

 

18,719 

 

 

18,669 

 

After ten years

 

 

34,764 

 

 

35,771 

 

 

34,953 

 

 

34,678 

 

Total

 

$

53,903 

 

$

55,412 

 

$

66,792 

 

$

66,447 

 

 

Investment securities with a carrying value of $115,882 at March 31, 2015, were pledged to secure public funds, repurchase agreements and potential borrowings at the Federal Reserve discount window.

 

The Company's investment portfolio includes securities that are in an unrealized loss position as of March 31, 2015, the details of which are included in the following table.  Although these securities, if sold at March 31, 2015 would result in a pretax loss of $675, the Company has no intent to sell the applicable securities at such market values, and maintains the Company has the ability to hold these securities until all principal has been recovered.  Declines in the market values of these securities can be traced to general market conditions which reflect the prospect for the economy as a whole.  When determining other-than-temporary impairment on securities, the Company considers such factors as adverse conditions specifically related to a certain security or to specific conditions in an industry or geographic area, the time frame securities have been in an unrealized loss position, the Company's ability to hold the security for a period of time sufficient to allow for anticipated recovery in value, whether or not the security has been downgraded by a rating agency, and whether or not the financial condition of the security issuer has severely deteriorated.  As of March 31, 2015, the Company considers all securities with unrealized loss positions to be temporarily impaired, and consequently, does not believe the Company will sustain any material realized losses as a result of the current temporary decline in market value.

 

The following table discloses investments in an unrealized loss position at March 31, 2015:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Description and number of positions

 

Less than 12 months

 

12 months or more

 

(in thousands)

    

Fair Value

    

Unrealized Loss

    

Fair Value

    

Unrealized Loss

 

U.S. Agency securities (7)

 

$

 —

 

$

 —

 

$

24,008 

 

$

(109)

 

U.S. Sponsored Mortgage-backed securities (11)

 

 

12,127 

 

 

(42)

 

 

13,988 

 

 

(317)

 

Municipal securities (35)

 

 

6,204 

 

 

(39)

 

 

8,366 

 

 

(168)

 

 

 

$

18,331 

 

$

(81)

 

$

46,362 

 

$

(594)

 

 

The following table discloses investments in an unrealized loss position at December 31, 2014:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Description and number of positions

 

Less than 12 months

 

12 months or more

 

(in thousands)

    

Fair Value

    

Unrealized Loss

    

Fair Value

    

Unrealized Loss

 

U.S. Agency securities (9)

 

$

996 

 

$

(3)

 

$

26,900 

 

$

(462)

 

U.S. Sponsored Mortgage-backed securities (8)

 

 

678 

 

 

(3)

 

 

14,824 

 

 

(416)

 

Municipal securities (42)

 

 

528 

 

 

(3)

 

 

16,489 

 

 

(264)

 

 

 

$

2,202 

 

$

(9)

 

$

58,213 

 

$

(1,142)

 

 

For the three month period ended March 31, 2015 and 2014, the Company sold investments available-for-sale of $11.4 million and $0, respectively, resulting in gross gains of $121 and $0.

 

9


 

Table of Contents

Note 4 – Loans and Allowance for Loan Losses

 

The following table summarizes the primary segments of the allowance for loan losses (“ALL”), segregated into the amount required for loans individually evaluated for impairment and the amount required for loans collectively evaluated for impairment as of March 31, 2015:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

    

 

 

    

Home 

    

 

 

    

 

 

(in thousands)

 

Commercial

 

Residential

 

Equity

 

Consumer

 

Total

 

ALL balance December 31, 2014

 

$

4,363 

 

$

962 

 

$

691 

 

$

207 

 

$

6,223 

 

Charge-offs

 

 

(409)

 

 

(14)

 

 

 —

 

 

 —

 

 

(423)

 

Recoveries

 

 

21 

 

 

 —

 

 

 

 

 —

 

 

22 

 

Provision

 

 

672 

 

 

 

 

(12)

 

 

(10)

 

 

659 

 

ALL balance March 31, 2015

 

$

4,647 

 

$

957 

 

$

680 

 

$

197 

 

$

6,481 

 

Individually evaluated for impairment

 

$

554 

 

$

284 

 

$

28 

 

$

 

$

868 

 

Collectively evaluated for impairment

 

$

4,093 

 

$

673 

 

$

652 

 

$

195 

 

$

5,613 

 

 

The following table summarizes the primary segments of the Company loan portfolio as of March 31, 2015:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in thousands)

    

Commercial

    

Residential

    

Home Equity

    

Consumer

    

Total

 

Individually evaluated for impairment

 

$

13,185 

 

$

949 

 

$

28 

 

$

 

$

14,164 

 

Collectively evaluated for impairment

 

 

578,573 

 

 

173,667 

 

 

48,202 

 

 

16,679 

 

 

817,121 

 

Total Loans

 

$

591,758 

 

$

174,616 

 

$

48,230 

 

$

16,681 

 

$

831,285 

 

 

The following table summarizes the primary segments of the allowance for loan losses (“ALL”), segregated into the amount required for loans individually evaluated for impairment and the amount required for loans collectively evaluated for impairment as of March 31, 2014:

 

<

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

    

 

 

    

Home

    

 

 

    

    

 

 

(in thousands)

 

Commercial

 

Residential

 

Equity

 

Consumer

 

Total

 

ALL balance December 31, 2013

 

$

3,609 

 

$

519 

 

$

554 

 

$

253 

 

$

4,935 

 

Charge-offs

 

 

 —

 

 

 —

 

 

 —

 

 

(9)

 

 

(9)

 

Recoveries

 

 

 

 

 —

 

 

 

 

 

 

 

Provision

 

 

291 

 

 

227 

 

 

 —

 

 

 

 

519 

 

ALL balance March 31, 2014

 

$

3,902 

 

$

746 

 

$

555 

 

$

248 

 

$

5,451 

 

Individually evaluated for impairment

 

$

1,358 

 

$

302 

 

$

29 

 

$

10 

 

$

1,699 

 

Collectively evaluated for impairment

 

$

2,544 

 

$

444