Washington
|
91-1815009
|
(State or Other Jurisdiction of
|
(IRS Employer Identification No.)
|
Incorporation or Organization)
|
|
Large accelerated filer ¨
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Accelerated filer ¨
|
Non-accelerated filer ¨
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Smaller reporting company x
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Page
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PART I
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Forward Looking Information
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3
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Item 1.
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Business
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4
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Item 1A.
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Risk Factors
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19
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Item 1B.
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Unresolved Staff Comments
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26
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Item 2.
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Properties
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27
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Item 3.
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Legal Proceedings
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27
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Item 4.
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Mine Safety Disclosures
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27
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PART II
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Item 5.
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Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
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28
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Item 6.
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Selected Financial Data
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29
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Item 7.
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Management's Discussion and Analysis of Financial Condition and Results of Operations
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30
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Item 8.
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Financial Statements and Supplementary Data
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59
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Item 9.
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Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
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59
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Item 9A.
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Controls and Procedures
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60
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Item 9B.
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Other Information
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60
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PART III
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Item 10.
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Directors, Executive Officers and Corporate Governance
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60
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Item 11.
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Executive Compensation
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61
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Item 12.
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
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61
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Item 13.
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Certain Relationships and Related Transactions and Director Independence
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61
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Item 14.
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Principal Accountant Fees and Services
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61
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PART IV
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Item 15.
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Exhibits and Financial Statement Schedules
|
62
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FINANCIAL STATEMENTS
|
F-1 F-50
|
|
|
|
|
SIGNATURES
|
63
|
2 | ||
3 | ||
(dollars in thousands)
|
|
For Year Ended December 31,
|
|
|||||||
|
|
2013
|
|
2012
|
|
2011
|
|
|||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
Net Interest Income
|
|
$
|
23,800
|
|
$
|
24,011
|
|
$
|
23,685
|
|
Non-interest Income
|
|
|
9,955
|
|
|
9,391
|
|
|
7,614
|
|
Total Revenue
|
|
|
33,755
|
|
|
33,402
|
|
|
31,299
|
|
Net Income
|
|
$
|
3,731
|
|
$
|
4,785
|
|
$
|
2,818
|
|
Total Assets
|
|
$
|
705,039
|
|
$
|
643,594
|
|
$
|
641,254
|
|
4 | ||
Year Ended
|
|
|
Brokered
Deposits |
|
|
CDARS
|
|
|
Total
Outstanding |
|
Percentage of
Total Deposits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
$
|
17,788,000
|
|
$
|
3,903,000
|
|
$
|
21,691,000
|
|
3.6
|
%
|
2012
|
|
$
|
19,239,000
|
|
$
|
5,191,000
|
|
$
|
24,430,000
|
|
4.5
|
%
|
2011
|
|
$
|
13,000,000
|
|
$
|
5,294,000
|
|
$
|
18,294,000
|
|
3.3
|
%
|
5 | ||
6 | ||
7 | ||
8 | ||
9 | ||
10 | ||
11 | ||
12 | ||
13 | ||
· | Centralize responsibility for consumer financial protection by creating a new agency within the Federal Reserve, the Bureau of Consumer Financial Protection, with broad rule making, supervision and enforcement authority for a wide range of consumer protection laws that would apply to all banks and thrifts. Smaller financial institutions, including the Bank, will be subject to the supervision and enforcement of their primary federal banking regulator with respect to the federal consumer financial protection laws. |
· | Require the federal banking regulators to promulgate new capital regulations and seek to make their capital requirements countercyclical, so that capital requirements increase in times of economic expansion and decrease in times of economic contraction. |
· | Provide for new disclosures and other requirements relating to executive compensation and corporate governance. |
· | Change the assessment base for federal deposit insurance from deposits to average total assets minus tangible equity. |
14 | ||
15 | ||
· | Total reported loans for construction, land development and other land representing 100% or more of the bank's capital; or |
· | Total commercial real estate loans representing 300% or more of the bank's total capital. |
16 | ||
17 | ||
18 | ||
· | An increase in loan delinquencies, problem assets and foreclosures; |
· | A decrease in the demand for loans and other fee-based products and services; |
· | An increase or decrease in the usage of unfunded commitments; or |
· | A decrease in the value of loan collateral, especially real estate, which in turn may reduce a customer's borrowing power and significantly increase our exposure to particular loans. |
19 | ||
20 | ||
21 | ||
22 | ||
· | establishes the Bureau of Consumer Financial Protection with broad authority to administer and enforce a new federal regulatory framework of consumer financial regulation; |
· | changes the base for deposit insurance assessments; |
· | introduces regulatory rate-setting for interchange fees charged to merchants for debit card transactions; |
· | enhances the regulation of consumer mortgage banking; and |
· | changes the methods and standards for resolution of troubled institutions. |
23 | ||
24 | ||
· | Potential exposure to unknown or contingent liabilities we acquire; |
· | Exposure to potential asset quality issues; |
· | Difficulty and expense of integrating the operations and personnel of banks and businesses we acquire; |
· | Potential disruption to our business; |
· | Potential restrictions on our business resulting from the regulatory approval process; |
· | Potential diversion of our management’s time and attention; and |
· | The possible loss of key employees and customers of the bank and businesses we acquire. |
25 | ||
ITEM 1.B. | Unresolved Staff Comments |
26 | ||
ITEM 2. | Properties |
27 | ||
|
|
2013
|
|
2012
|
|
||||||||||||
|
|
Estimated No.
|
|
|
|
|
|
Estimated No.
|
|
|
|
|
|
||||
|
|
Shares Traded
|
|
High
|
|
Low
|
|
Shares Traded
|
|
High
|
|
Low
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Quarter
|
|
131,400
|
|
$
|
5.50
|
|
$
|
4.56
|
|
108,700
|
|
$
|
5.88
|
|
$
|
4.50
|
|
Second Quarter
|
|
92,300
|
|
$
|
6.50
|
|
$
|
5.42
|
|
188,600
|
|
$
|
4.75
|
|
$
|
4.13
|
|
Third Quarter
|
|
124,600
|
|
$
|
6.99
|
|
$
|
5.59
|
|
134,200
|
|
$
|
5.67
|
|
$
|
4.01
|
|
Fourth Quarter
|
|
83,900
|
|
$
|
6.75
|
|
$
|
6.40
|
|
102,500
|
|
$
|
4.25
|
|
$
|
3.69
|
|
28 | ||
|
|
As of and For the Year Ended December 31,
|
|
|||||||||||||||||
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
2009
|
|
|||||
Operations Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
|
|
$
|
23,800
|
|
|
$
|
24,011
|
|
|
$
|
23,685
|
|
|
$
|
22,879
|
|
|
$
|
21,753
|
|
Provision (recapture) for credit losses
|
|
|
(450)
|
|
|
|
(1,100)
|
|
|
|
2,500
|
|
|
|
3,600
|
|
|
|
9,944
|
|
Non-interest income
|
|
|
9,955
|
|
|
|
9,391
|
|
|
|
7,614
|
|
|
|
8,451
|
|
|
|
7,025
|
|
Non-interest expense
|
|
|
29,502
|
|
|
|
28,417
|
|
|
|
25,648
|
|
|
|
26,400
|
|
|
|
29,691
|
|
Provision (benefit) for income
taxes |
|
|
972
|
|
|
|
1,300
|
|
|
|
333
|
|
|
|
(304)
|
|
|
|
(4,519)
|
|
Net income (loss)
|
|
$
|
3,731
|
|
|
$
|
4,785
|
|
|
$
|
2,818
|
|
|
$
|
1,634
|
|
|
$
|
(6,338)
|
|
Net income (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic (1)
|
|
$
|
0.37
|
|
|
$
|
0.47
|
|
|
$
|
0.28
|
|
|
$
|
0.16
|
|
|
$
|
(0.74)
|
|
Diluted (1)
|
|
|
0.37
|
|
|
|
0.47
|
|
|
|
0.28
|
|
|
|
0.16
|
|
|
|
(0.74)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared
|
|
|
2,036
|
|
|
|
2,024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared per share (1)
|
|
|
0.20
|
|
|
|
0.20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividend payout ratio
|
|
|
55
|
%
|
|
|
42
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Ratios
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate spread
|
|
|
3.88
|
%
|
|
|
4.20
|
%
|
|
|
4.03
|
%
|
|
|
3.88
|
%
|
|
|
3.50
|
%
|
Net interest margin(2)
|
|
|
4.00
|
%
|
|
|
4.34
|
%
|
|
|
4.22
|
%
|
|
|
4.10
|
%
|
|
|
3.76
|
%
|
Efficiency ratio(3)
|
|
|
87.40
|
%
|
|
|
85.08
|
%
|
|
|
81.95
|
%
|
|
|
84.26
|
%
|
|
|
103.17
|
%
|
Return on average assets
|
|
|
0.55
|
%
|
|
|
0.75
|
%
|
|
|
0.44
|
%
|
|
|
0.25
|
%
|
|
|
(0.96)
|
%
|
Return on average equity
|
|
|
5.48
|
%
|
|
|
7.28
|
%
|
|
|
4.55
|
%
|
|
|
2.77
|
%
|
|
|
(11.63)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
705,039
|
|
|
$
|
643,594
|
|
|
$
|
641,254
|
|
|
$
|
644,403
|
|
|
$
|
668,626
|
|
Loans, net
|
|
|
496,307
|
|
|
|
438,838
|
|
|
|
463,766
|
|
|
|
455,064
|
|
|
|
471,154
|
|
Total deposits
|
|
|
607,347
|
|
|
|
548,243
|
|
|
|
548,050
|
|
|
|
544,954
|
|
|
|
567,695
|
|
Total borrowings
|
|
|
23,403
|
|
|
|
23,903
|
|
|
|
24,644
|
|
|
|
35,328
|
|
|
|
39,880
|
|
Shareholders’ equity
|
|
|
67,137
|
|
|
|
66,721
|
|
|
|
63,270
|
|
|
|
59,769
|
|
|
|
57,649
|
|
Book value per share (1) (4)
|
|
|
6.63
|
|
|
|
6.59
|
|
|
|
6.25
|
|
|
|
5.90
|
|
|
|
5.70
|
|
Tangible book value per share(1)(5)
|
|
|
5.31
|
|
|
|
5.35
|
|
|
|
5.01
|
|
|
|
4.66
|
|
|
|
4.44
|
|
Equity to assets ratio
|
|
|
9.52
|
%
|
|
|
10.37
|
%
|
|
|
9.87
|
%
|
|
|
9.28
|
%
|
|
|
8.62
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset Quality Ratios
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming loans to total loans
|
|
|
1.98
|
%
|
|
|
3.37
|
%
|
|
|
2.96
|
%
|
|
|
2.15
|
%
|
|
|
3.36
|
%
|
Allowance for credit losses to
total loans |
|
|
1.65
|
%
|
|
|
2.09
|
%
|
|
|
2.34
|
%
|
|
|
2.28
|
%
|
|
|
2.30
|
%
|
Allowance for credit losses to
nonperforming loans |
|
|
115.40
|
%
|
|
|
61.92
|
%
|
|
|
79.28
|
%
|
|
|
106.18
|
%
|
|
|
68.49
|
%
|
Nonperforming assets to total assets
|
|
|
1.42
|
%
|
|
|
3.08
|
%
|
|
|
3.39
|
%
|
|
|
2.57
|
%
|
|
|
3.42
|
%
|
29 | ||
· |
Total assets at December 31, 2013, increased by $61,445,000, or 9.6%, to $705,039,000 compared to $643,594,000 at the end of 2012. Increases in investments and loans were the primary contributors to overall asset growth, which were partially offset by decreases in interest bearing deposits in banks and loans held for sale. Total loans of $504,666,000 at December 31, 2013, increased $56,470,000, or 12.6%, compared to year-end 2012.
|
· |
The Bank remains well capitalized with a total risk-based capital ratio of 14.03% at December 31, 2013, compared to 16.22% at December 31, 2012. Tier one leverage ratio was 9.77% at December 31, 2013, compared to 10.69% at December 31, 2012. The asset growth mentioned above outpaced the growth in retained earnings during 2013, resulting in the decline in capital ratios.
|
· |
Non-performing assets (“NPAs”) totaled $10,014,000 at December 31, 2013, which represents 1.42% of total assets, a decrease from $19,791,000 at December 31, 2012. The decrease is largely due to our continued focus on improving asset quality through proactive management of problem assets, which contributed to the decline in non-performing loans and OREO during the year. NPAs are concentrated in commercial real estate loans and related OREO, which total $6,003,000, or 59.9%, of our NPAs.
|
· |
Demand deposits, savings, money market and certificates of deposits less than $100,000, increased during 2013 by $69,831,000, or 15.2%, to $530,719,000 and comprise 87.4% of total deposits at year-end, driven by the Sterling branch acquisition, in addition to organic deposit growth. The organic increase in core deposits was mostly in commercial demand and money market accounts, coupled with an increase in public NOW accounts.
|
30 | ||
· |
As a result of core deposit growth, lower borrowings and increased interest bearing deposits with banks, the Company's liquidity ratio increased to 41% at December 31, 2013, which translates into over $288 million available to fund general operations and meet fluctuations in loans and deposits.
|
· | Net income for 2013 was $3,731,000, or $0.37 per diluted share, compared to net income of $4,785,000, or $0.47 per diluted share, in 2012. |
· | In 2013, return on average assets (“ROAA”) and return on average equity (“ROAE”) decreased to 0.55% and 5.48%, respectively, compared to 0.75% and 7.28%, respectively, in 2012. The reductions in ROAA and ROAE were primarily driven by a decrease in recapture of provision for credit losses, a decrease in net interest income and an increase in non-interest expense. |
· | Net interest income decreased to $23,800,000 compared to $24,011,000 in 2012. The Company experienced growth in loans and investments during the period. However, lower yields earned on these assets, due to competition and decreased reinvestment rates on securities, resulted in a decline in net interest income. Consequently, net interest margin for 2013 decreased 34 basis points to 4.00%, as compared to 4.34% in 2012. |
· | Provision for (recapture of) credit losses was ($450,000) for 2013, compared to ($1,100,000) for 2012. The recapture of prior provision in the current year is primarily the result of the continued overall improvement in credit quality, as evidenced by decreases in net charge-offs, non-performing loans and performing loans classified as substandard or worse. During 2012, the recapture was mostly due to the elimination of a $1.7 million specific impairment reserve. |
· | Net charge-offs totaled $549,000 during 2013 compared to $669,000 in 2012. Loans classified as substandard or worse totaled $12,763,000 at December 31, 2013, a decrease of $8,931,000, or 41.2%, compared to $21,694,000 one year ago. |
· | Non-interest income increased $564,000, or 6.0%, to $9,955,000 for 2013 primarily due to increases in gains on sale of loans, ATM/debit card fees and annuity commission income. While gains on sale of loans grew by $113,000, or 2.2%, to $5,171,000, this revenue source moderated during the latter portion of the period as increases in mortgage rates slowed refinance activity. ATM/debit card fees grew by $113,000, or 24.2%, to $581,000, due to growth in deposit account relationships and increased usage of this payment method by existing customers. Annuity commission revenue increased to $303,000, up from $17,000. The current year was the first full year these products were sold, having been introduced in late 2012. |
· | Non-interest expense increased $1,085,000, or 3.8%, to $29,502,000 for 2013. The increase is primarily attributable to increases in salaries and employee benefits and data processing and occupancy and equipment expenses associated with the acquisition of Sterling Bank branches in Oregon and Washington, the denovo opening of the Warrenton, Oregon branch and opening of loan production offices in Clark and Thurston Counties. |
31 | ||
County
|
|
2013
|
|
2012
|
|
2011
|
|
Clatsop
|
|
6.1
|
%
|
7.6
|
%
|
7.8
|
%
|
Grays Harbor
|
|
11.6
|
%
|
12.4
|
%
|
13.5
|
%
|
Pacific
|
|
10.5
|
%
|
11.8
|
%
|
11.9
|
%
|
Skagit
|
|
8.1
|
%
|
9.1
|
%
|
10.2
|
%
|
Wahkiakum
|
|
10.4
|
%
|
12.2
|
%
|
11.9
|
%
|
Whatcom
|
|
6.4
|
%
|
6.9
|
%
|
8.1
|
%
|
32 | ||
· | Grow loans and increase core deposits organically by increasing our customer base in the markets we serve and in markets adjacent to our current footprint. We will seek to capture more of each customer’s banking relationship by cross selling our loan and deposit products to our customers and emphasizing our local ownership and decision making authority. |
· | Focus on improving profitability with asset growth and reductions in net overhead and controllable operating expenses through fiscal restraint and increased emphasis on non-interest income and efficiencies. |
· | Limit exposure to increasing interest rates. The majority of our loans are relatively short term in nature with interest rates tied to a market index such as the prime rate. The substantial majority of the fixed rate residential mortgage loans we originate are sold in the secondary market which reduces the interest rate and credit risk associated with fixed rate residential lending. The investment portfolio is made up of fixed and adjustable rate securities with duration less than five years. |
· | Continue to improve asset quality through proactive management of problem loans, monitoring existing performing loans, and selling of OREO properties. |
· | Successfully expand on the opportunities available to garner additional profitable banking relationships thorough our branches and loan production offices in Skagit, Thurston and Clark Counties due to continued merger-related market disruption in these markets. We will also look to grow our banking relationships in Oregon, capitalizing on our acquisition of two branches from Sterling Savings Bank and our newly opened branch in Warrenton, Oregon. |
|
|
|
|
Increase
|
|
|
|
|
|
Increase
|
|
|
|
|
|
|||||
|
|
|
|
(Decrease)
|
|
|
|
|
|
(Decrease)
|
|
|
|
|
|
|||||
(dollars in thousands)
|
|
2013
|
|
Amount
|
|
%
|
|
2012
|
|
Amount
|
|
%
|
|
2011
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and dividend
income |
|
$
|
26,290
|
|
$
|
(1,205)
|
|
(4.4)
|
|
$
|
27,495
|
|
$
|
(1,823)
|
|
(6.2)
|
|
$
|
29,318
|
|
Interest expense
|
|
|
2,490
|
|
|
(994)
|
|
(28.3)
|
|
|
3,484
|
|
|
(2,149)
|
|
(38.2)
|
|
|
5,633
|
|
Net interest income
|
|
|
23,800
|
|
|
(211)
|
|
(0.9)
|
|
|
24,011
|
|
|
326
|
|
1.4
|
|
|
23,685
|
|
Provision for (recapture of) credit losses
|
|
|
(450)
|
|
|
(650)
|
|
(59.1)
|
|
|
(1,100)
|
|
|
(3,600)
|
|
(144.0)
|
|
|
2,500
|
|
Net interest income after
provision for credit losses |
|
|
24,250
|
|
|
(861)
|
|
(3.4)
|
|
|
25,111
|
|
|
3,926
|
|
18.5
|
|
|
21,185
|
|
Other operating income
|
|
|
9,955
|
|
|
564
|
|
6.0
|
|
|
9,391
|
|
|
1,777
|
|
23.3
|
|
|
7,614
|
|
Other operating expense
|
|
|
29,502
|
|
|
1,085
|
|
3.8
|
|
|
28,417
|
|
|
2,769
|
|
10.8
|
|
|
25,648
|
|
Income before income
taxes |
|
|
4,703
|
|
|
(1,382)
|
|
(22.7)
|
|
|
6,085
|
|
|
2,934
|
|
93.1
|
|
|
3,151
|
|
Income taxes
|
|
|
972
|
|
|
(328)
|
|
(25.2)
|
|
|
1,300
|
|
|
967
|
|
290.4
|
|
|
333
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
3,731
|
|
$
|
(1,054)
|
|
(22.0)
|
|
$
|
4,785
|
|
$
|
1,967
|
|
69.8
|
|
$
|
2,818
|
|
33 | ||
34 | ||
|
|
Year Ended December 31,
|
|
|||||||||||||||||||||||
|
|
2013
|
|
2012
|
|
2011
|
|
|||||||||||||||||||
|
|
|
|
|
Interest
|
|
|
|
|
|
Interest
|
|
|
|
|
|
Interest
|
|
|
|
||||||
(dollars in thousands)
|
|
Average
|
|
|
Income
|
|
Avg
|
|
Average
|
|
Income
|
|
Avg
|
|
Average
|
|
Income
|
|
Avg
|
|
||||||
|
|
Balance
|
|
|
(Expense)
|
|
Rate
|
|
Balance
|
|
(Expense)
|
|
Rate
|
|
Balance
|
|
(Expense)
|
|
Rate
|
|
||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earning assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans (1)
|
|
$
|
485,623
|
|
|
$
|
24,614
|
|
5.07
|
%
|
$
|
479,036
|
|
$
|
25,953
|
|
5.42
|
%
|
$
|
483,974
|
|
$
|
27,481
|
|
5.68
|
%
|
Investment securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable
|
|
|
53,505
|
|
|
|
778
|
|
1.45
|
|
|
29,993
|
|
|
770
|
|
2.57
|
|
|
29,844
|
|
|
1,042
|
|
3.49
|
|
Tax-Exempt (1)
|
|
|
32,650
|
|
|
|
1,508
|
|
4.62
|
|
|
27,590
|
|
|
1,525
|
|
5.53
|
|
|
24,613
|
|
|
1,512
|
|
6.14
|
|
Total investment securities
|
|
|
86,155
|
|
|
|
2,286
|
|
2.65
|
|
|
57,583
|
|
|
2,295
|
|
3.99
|
|
|
54,457
|
|
|
2,554
|
|
4.69
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal Home Loan Bank Stock
|
|
|
3,078
|
|
|
|
2
|
|
0.06
|
|
|
3,173
|
|
|
|
|
|
|
|
3,183
|
|
|
|
|
|
|
Federal funds sold and deposits in banks
|
|
|
38,848
|
|
|
|
114
|
|
0.29
|
|
|
32,089
|
|
|
84
|
|
0.26
|
|
|
38,535
|
|
|
92
|
|
0.24
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total earnings assets / interest income
|
|
$
|
613,705
|
|
|
$
|
27,016
|
|
4.40
|
%
|
$
|
571,881
|
|
$
|
28,332
|
|
4.95
|
%
|
$
|
580,149
|
|
$
|
30,127
|
|
5.19
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from banks
|
|
|
11,636
|
|
|
|
|
|
|
|
|
10,751
|
|
|
|
|
|
|
|
10,280
|
|
|
|
|
|
|
Premises and equipment (net)
|
|
|
15,831
|
|
|
|
|
|
|
|
|
14,753
|
|
|
|
|
|
|
|
15,065
|
|
|
|
|
|
|
Other real estate owned
|
|
|
4,030
|
|
|
|
|
|
|
|
|
6,880
|
|
|
|
|
|
|
|
7,579
|
|
|
|
|
|
|
Other assets
|
|
|
40,909
|
|
|
|
|
|
|
|
|
42,427
|
|
|
|
|
|
|
|
41,845
|
|
|
|
|
|
|
Allowance for credit losses
|
|
|
(9,065)
|
|
|
|
|
|
|
|
|
(11,022)
|
|
|
|
|
|
|
|
(11,028)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
677,046
|
|
|
|
|
|
|
|
$
|
635,670
|
|
|
|
|
|
|
$
|
643,890
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest bearing liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings and interest-bearing demand
|
|
$
|
316,184
|
|
|
$
|
(699)
|
|
0.22
|
%
|
$
|
288,984
|
|
$
|
(1,084)
|
|
0.38
|
%
|
$
|
275,630
|
|
$
|
(1,612)
|
|
0.58
|
%
|
Time certificates
|
|
|
135,447
|
|
|
|
(1,321)
|
|
0.98
|
|
|
144,486
|
|
|
(1,798)
|
|
1.24
|
|
|
176,631
|
|
|
(3,031)
|
|
1.72
|
|
Total deposits
|
|
|
451,631
|
|
|
|
(2,020)
|
|
0.45
|
|
|
433,470
|
|
|
(2,882)
|
|
0.66
|
|
|
452,261
|
|
|
(4,643)
|
|
1.03
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term borrowings
|
|
|
304
|
|
|
|
(9)
|
|
2.96
|
|
|
2,697
|
|
|
(79)
|
|
2.93
|
|
|
6,885
|
|
|
(264)
|
|
3.84
|
|
Long-term borrowings
|
|
|
9,745
|
|
|
|
(214)
|
|
2.20
|
|
|
7,803
|
|
|
(217)
|
|
2.78
|
|
|
10,500
|
|
|
(333)
|
|
3.17
|
|
Secured borrowings
|
|
|
|
|
|
|
|
|
|
|
|
448
|
|
|
(20)
|
|
4.46
|
|
|
777
|
|
|
(41)
|
|
5.28
|
|
Junior subordinated debentures
|
|
|
13,403
|
|
|
|
(247)
|
|
1.84
|
|
|
13,403
|
|
|
(286)
|
|
2.13
|
|
|
13,403
|
|
|
(352)
|
|
2.63
|
|
Total borrowings
|
|
|
23,452
|
|
|
|
(470)
|
|
2.00
|
|
|
24,351
|
|
|
(602)
|
|
2.47
|
|
|
31,565
|
|
|
(990)
|
|
3.14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest-bearing liabilities/
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
$
|
475,083
|
|
|
$
|
(2,490)
|
|
0.52
|
%
|
$
|
457,821
|
|
$
|
(3,484)
|
|
0.76
|
%
|
$
|
483,826
|
|
$
|
(5,633)
|
|
1.16
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand deposits
|
|
|
129,218
|
|
|
|
|
|
|
|
|
107,048
|
|
|
|
|
|
|
|
93,413
|
|
|
|
|
|
|
Other liabilities
|
|
|
4,688
|
|
|
|
|
|
|
|
|
5,058
|
|
|
|
|
|
|
|
4,709
|
|
|
|
|
|
|
Shareholders' equity
|
|
|
68,057
|
|
|
|
|
|
|
|
|
65,743
|
|
|
|
|
|
|
|
61,942
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders'
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
equity
|
|
$
|
677,046
|
|
|
|
|
|
|
|
$
|
635,670
|
|
|
|
|
|
|
$
|
643,890
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income/spread (1)
|
|
|
|
|
|
$
|
24,526
|
|
3.88
|
%
|
|
|
|
$
|
24,848
|
|
4.20
|
%
|
|
|
|
$
|
24,494
|
|
4.03
|
%
|
Net interest income as a percentage of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
average earning assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
|
|
|
|
|
|
4.40
|
%
|
|
|
|
|
|
|
4.95
|
%
|
|
|
|
|
|
|
5.19
|
%
|
Interest expense
|
|
|
|
|
|
|
|
|
0.40
|
%
|
|
|
|
|
|
|
0.61
|
%
|
|
|
|
|
|
|
0.97
|
%
|
Net interest margin (2)
|
|
|
|
|
|
|
|
|
4.00
|
%
|
|
|
|
|
|
|
4.34
|
%
|
|
|
|
|
|
|
4.22
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax equivalent adjustment (1)
|
|
|
|
|
|
$
|
726
|
|
|
|
|
|
|
$
|
837
|
|
|
|
|
|
|
$
|
809
|
|
|
|
35 | ||
36 | ||
|
|
2013 compared to 2012
|
|
2012compared to 2011
|
|
||||||||||||||
|
|
Increase (decrease) due to
|
|
Increase (decrease) due to
|
|
||||||||||||||
(dollars in thousands)
|
|
Volume
|
|
Rate
|
|
Net
|
|
Volume
|
|
Rate
|
|
Net
|
|
||||||
Interest earned on:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans
|
|
$
|
353
|
|
$
|
(1,692)
|
|
$
|
(1,339)
|
|
$
|
(278)
|
|
$
|
(1,250)
|
|
$
|
(1,528)
|
|
Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable
|
|
|
435
|
|
|
(427)
|
|
|
8
|
|
|
5
|
|
|
(277)
|
|
|
(272)
|
|
Tax-exempt
|
|
|
255
|
|
|
(272)
|
|
|
(17)
|
|
|
173
|
|
|
(160)
|
|
|
13
|
|
Total securities
|
|
|
911
|
|
|
(920)
|
|
|
(9)
|
|
|
178
|
|
|
(437)
|
|
|
(259)
|
|
Fed funds sold and interest
bearing deposits in other banks |
|
|
19
|
|
|
11
|
|
|
30
|
|
|
(16)
|
|
|
8
|
|
|
(8)
|
|
Total interest earning assets
|
|
|
1,062
|
|
|
(2,380)
|
|
|
(1,318)
|
|
|
(116)
|
|
|
(1,679)
|
|
|
(1,795)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest paid on:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings and interest bearing
demand deposits |
|
|
(94)
|
|
|
479
|
|
|
385
|
|
|
75
|
|
|
(603)
|
|
|
(528)
|
|
Time deposits
|
|
|
107
|
|
|
370
|
|
|
477
|
|
|
(491)
|
|
|
(742)
|
|
|
(1,233)
|
|
Total borrowings
|
|
|
22
|
|
|
110
|
|
|
132
|
|
|
(201)
|
|
|
(187)
|
|
|
(388)
|
|
Total interest bearing liabilities
|
|
|
34
|
|
|
960
|
|
|
994
|
|
|
(617)
|
|
|
(1,532)
|
|
|
(2,149)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in net interest income
|
|
$
|
1,097
|
|
$
|
(1,421)
|
|
$
|
(324)
|
|
$
|
501
|
|
$
|
(147)
|
|
$
|
354
|
|
37 | ||
|
|
|
|
|
Increase
|
|
|
|
|
|
|
|
Increase
|
|
|
|
|
|
|
|
||
|
|
|
|
|
(Decrease)
|
|
|
|
|
|
|
|
(Decrease)
|
|
|
|
|
|
|
|
||
(dollars in thousands)
|
|
2013
|
|
Amount
|
|
%
|
|
|
2012
|
|
Amount
|
|
%
|
|
|
2011
|
|
|||||
Service charges on deposit
Accounts |
|
$
|
1,731
|
|
$
|
45
|
|
2.7
|
|
|
$
|
1,686
|
|
$
|
(113)
|
|
(6.3)
|
|
|
$
|
1,799
|
|
Net gain (loss) on sale of
other real estate owned |
|
|
40
|
|
|
(291)
|
|
(87.9)
|
|
|
|
331
|
|
|
414
|
|
498.8
|
|
|
|
(83)
|
|
Net gains on sales of loans
|
|
|
5,171
|
|
|
113
|
|
2.23
|
|
|
|
5,058
|
|
|
1,465
|
|
40.8
|
|
|
|
3,593
|
|
Net gain (loss) on sales of
Securities |
|
|
405
|
|
|
102
|
|
33.7
|
|
|
|
303
|
|
|
(395)
|
|
(56.6)
|
|
|
|
698
|
|
Net OTTI losses
|
|
|
(37)
|
|
|
296
|
|
(88.9)
|
|
|
|
(333)
|
|
|
(3)
|
|
(0.9)
|
|
|
|
(330)
|
|
Earnings on bank owned life
Insurance |
|
|
452
|
|
|
(58)
|
|
(11.4)
|
|
|
|
510
|
|
|
(17)
|
|
(3.2)
|
|
|
|
527
|
|
Other operating income
|
|
|
2,193
|
|
|
357
|
|
19.4
|
|
|
|
1,836
|
|
|
426
|
|
30.2
|
|
|
|
1,410
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-interest income
|
|
$
|
9,955
|
|
$
|
564
|
|
6.0
|
|
|
$
|
9,391
|
|
$
|
1,777
|
|
23.3
|
|
|
$
|
7,614
|
|
38 | ||
|
|
|
|
|
Increase
|
|
|
|
|
|
|
|
Increase
|
|
|
|
|
|
|
|
||
|
|
|
|
|
(Decrease)
|
|
|
|
|
|
|
|
(Decrease)
|
|
|
|
|
|
|
|
||
(dollars in thousands)
|
|
2013
|
|
Amount
|
|
%
|
|
|
2012
|
|
Amount
|
|
%
|
|
|
2011
|
|
|||||
Salaries and employee benefits
|
|
$
|
17,013
|
|
$
|
798
|
|
4.9
|
|
|
$
|
16,215
|
|
$
|
2,492
|
|
18.2
|
|
|
$
|
13,723
|
|
Occupancy and equipment
|
|
|
2,699
|
|
|
225
|
|
9.1
|
|
|
|
2,474
|
|
|
(60)
|
|
(2.4)
|
|
|
|
2,534
|
|
State taxes
|
|
|
458
|
|
|
(60)
|
|
(11.6)
|
|
|
|
518
|
|
|
45
|
|
9.5
|
|
|
|
473
|
|
Data processing
|
|
|
2,268
|
|
|
661
|
|
41.1
|
|
|
|
1,607
|
|
|
192
|
|
13.6
|
|
|
|
1,415
|
|
Professional services
|
|
|
935
|
|
|
185
|
|
24.7
|
|
|
|
750
|
|
|
11
|
|
1.5
|
|
|
|
739
|
|
FDIC and state assessments
|
|
|
535
|
|
|
(75)
|
|
(12.3)
|
|
|
|
610
|
|
|
(328)
|
|
(35.0)
|
|
|
|
938
|
|
OREO write-downs
|
|
|
946
|
|
|
(368)
|
|
(28.0)
|
|
|
|
1,314
|
|
|
265
|
|
25.3
|
|
|
|
1,049
|
|
OREO operating expenses
|
|
|
408
|
|
|
(142)
|
|
(25.8)
|
|
|
|
550
|
|
|
100
|
|
22.2
|
|
|
|
450
|
|
Marketing and advertising
|
|
|
393
|
|
|
(48)
|
|
(10.9)
|
|
|
|
441
|
|
|
(82)
|
|
15.7
|
|
|
|
523
|
|
Other expense
|
|
|
3,847
|
|
|
(91)
|
|
(2.3)
|
|
|
|
3,938
|
|
|
134
|
|
3.5
|
|
|
|
3,804
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-interest expense
|
|
$
|
29,502
|
|
$
|
1,085
|
|
3.8
|
|
|
$
|
28,417
|
|
$
|
2,769
|
|
10.8
|
|
|
$
|
25,648
|
|
39 | ||
40 | ||
41 | ||
(dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Held to Maturity
|
|
2013
|
|
2012
|
|
2011
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
State and municipal securities
|
|
$
|
1,973
|
|
$
|
6,716
|
|
$
|
6,732
|
|
Mortgage-backed securities
|
|
|
159
|
|
|
221
|
|
|
293
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
2,132
|
|
$
|
6,937
|
|
$
|
7,025
|
|
|
|
|
|
|
|
|
|
|
|
|
Available For Sale
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Government agency securities
|
|
$
|
8,811
|
|
$
|
5,952
|
|
$
|
84
|
|
State and municipal securities
|
|
|
32,160
|
|
|
26,906
|
|
|
22,859
|
|
Mortgage-backed securities
|
|
|
54,191
|
|
|
24,703
|
|
|
22,797
|
|
Corporate bonds
|
|
|
982
|
|
|
3,545
|
|
|
1,912
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
96,144
|
|
$
|
61,106
|
|
$
|
47,652
|
|
(dollars in thousands)
|
|
|
|
|
|
Due after
|
|
Due after
|
|
|
|
|
|
|
|
|
|
||
|
|
Due in one
|
|
|
one through
|
|
five through
|
|
|
Due after
|
|
|
|
|
|
||||
Held To Maturity
|
|
year or less
|
|
|
five years
|
|
ten years
|
|
|
ten years
|
|
|
Total
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
State and municipal securities
|
|
$
|
190
|
|
|
$
|
|
|
$
|
914
|
|
|
$
|
869
|
|
|
$
|
1,973
|
|
Weighted average yield
|
|
|
6.02
|
%
|
|
|
|
|
|
6.36
|
%
|
|
|
6.57
|
%
|
|
|
|
|
Mortgage-backed securities
|
|
|
|
|
|
|
|
|
|
113
|
|
|
|
46
|
|
|
|
159
|
|
Weighted average yield
|
|
|
|
|
|
|
|
|
|
5.22
|
%
|
|
|
6.17
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
190
|
|
|
$
|
|
|
$
|
1,027
|
|
|
$
|
915
|
|
|
$
|
2,132
|
|
|
|
|
|
|
|
Due after
|
|
|
Due after
|
|
|
|
|
|
|
|
|
|
||
|
|
Due in one
|
|
|
one through
|
|
|
five through
|
|
|
Due after
|
|
|
|
|
|
||||
Available For Sale
|
|
year or less
|
|
|
five years
|
|
|
ten years
|
|
|
ten years
|
|
|
Total
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Agency securities
|
|
$
|
1,021
|
|
|
$
|
6,690
|
|
|
$
|
61
|
|
|
$
|
1,039
|
|
|
$
|
8,811
|
|
Weighted average yield
|
|
|
0.33
|
%
|
|
|
1.14
|
%
|
|
|
8.16
|
%
|
|
|
2.80
|
%
|
|
|
|
|
State and municipal securities
|
|
|
462
|
|
|
|
5,768
|
|
|
|
8,821
|
|
|
|
17,109
|
|
|
|
32,160
|
|
Weighted average yield
|
|
|
5.43
|
%
|
|
|
2.74
|
%
|
|
|
3.92
|
%
|
|
|
4.57
|
%
|
|
|
|
|
Mortgage-backed securities
|
|
|
|
|
|
|
1,940
|
|
|
|
11,220
|
|
|
|
41,031
|
|
|
|
54,191
|
|
Weighted average yield
|
|
|
|
|
|
|
1.76
|
%
|
|
|
1.98
|
%
|
|
|
1.95
|
%
|
|
|
|
|
Corporate bonds
|
|
|
|
|
|
|
982
|
|
|
|
|
|
|
|
|
|
|
|
982
|
|
Weighted average yield
|
|
|
|
|
|
|
1.00
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
1,483
|
|
|
$
|
15,380
|
|
|
$
|
20,102
|
|
|
$
|
59,179
|
|
|
$
|
96,144
|
|
42 | ||
(dollars in thousands)
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
|
2009
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and agricultural
|
|
$
|
104,111
|
|
$
|
87,278
|
|
$
|
90,731
|
|
$
|
84,575
|
|
$
|
93,125
|
|
Construction, land development
and other land loans |
|
|
29,096
|
|
|
31,411
|
|
|
47,156
|
|
|
46,256
|
|
|
64,812
|
|
Residential real estate 1-4 family
|
|
|
95,527
|
|
|
90,447
|
|
|
90,552
|
|
|
89,212
|
|
|
91,821
|
|
Multi-family
|
|
|
17,520
|
|
|
7,744
|
|
|
7,682
|
|
|
9,113
|
|
|
8,605
|
|
Farmland
|
|
|
23,698
|
|
|
24,544
|
|
|
23,752
|
|
|
22,354
|
|
|
22,824
|
|
Commercial real estate
|
|
|
222,888
|
|
|
212,797
|
|
|
221,474
|
|
|
216,015
|
|
|
205,184
|
|
Installment
|
|
|
18,160
|
|
|
5,465
|
|
|
6,772
|
|
|
7,029
|
|
|
7,216
|
|
Credit cards and overdrafts
|
|
|
2,568
|
|
|
2,317
|
|
|
2,156
|
|
|
2,099
|
|
|
1,929
|
|
Less unearned income
|
|
|
(1,137)
|
|
|
(857)
|
|
|
(841)
|
|
|
(828)
|
|
|
(881)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
512,431
|
|
$
|
461,146
|
|
$
|
489,434
|
|
$
|
475,825
|
|
$
|
494,635
|
|
43 | ||
|
|
|
|
|
Due after
|
|
|
|
|
|
|
|
|
|
|
Due in one
|
|
one through
|
|
Due after
|
|
|
|
|
|||
(dollars in thousands)
|
|
year or less
|
|
five years
|
|
five years
|
|
Total
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
$
|
55,033
|
|
$
|
22,814
|
|
$
|
8,368
|
|
$
|
86,215
|
|
Construction, land development and other land loans
|
|
|
18,201
|
|
|
16,264
|
|
|
77
|
|
|
34,542
|
|
Residential real estate 1-4 family
|
|
|
47,564
|
|
|
41,436
|
|
|
7,001
|
|
|
96,001
|
|
Multi-family
|
|
|
717
|
|
|
6,105
|
|
|
10,698
|
|
|
17,520
|
|
Farmland
|
|
|
9,489
|
|
|
8,254
|
|
|
251
|
|
|
17,994
|
|
Commercial real estate
|
|
|
97,824
|
|
|
134,693
|
|
|
758
|
|
|
233,275
|
|
Installment
|
|
|
3,435
|
|
|
7,881
|
|
|
6,549
|
|
|
17,865
|
|
Credit cards and overdrafts
|
|
|
2,396
|
|
|
|
|
|
|
|
|
2,236
|
|
Total
|
|
$
|
234,659
|
|
$
|
237,447
|
|
$
|
33,702
|
|
$
|
505,808
|
|
Less unearned income
|
|
|
|
|
|
|
|
|
|
|
|
(1,137)
|
|
Total loans
|
|
|
|
|
|
|
|
|
|
|
$
|
504,671
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loans maturing after one year with
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Predetermined interest rates (fixed)
|
|
|
|
|
$
|
55,100
|
|
$
|
20,230
|
|
$
|
75,330
|
|
Floating or adjustable rates (variable)
|
|
|
|
|
|
182,347
|
|
|
13,675
|
|
|
196,022
|
|
Total
|
|
|
|
|
$
|
237,447
|
|
$
|
33,702
|
|
$
|
271,149
|
|
44 | ||
(dollars in thousands)
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
2009
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accruing loans past due 90 days or more
|
|
$
|
|
|
|
$
|
|
|
|
$
|
299
|
|
|
$
|
|
|
|
$
|
547
|
|
Non-accrual loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction, land development and
other land loans |
|
|
1,408
|
|
|
|
1,792
|
|
|
|
5,510
|
|
|
|
5,529
|
|
|
|
9,886
|
|
Residential real estate 1-4 family
|
|
|
400
|
|
|
|
800
|
|
|
|
528
|
|
|
|
2,246
|
|
|
|
1,323
|
|
Multi-family real estate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
353
|
|
Commercial real estate (4)
|
|
|
4,141
|
|
|
|
9,642
|
|
|
|
7,168
|
|
|
|
803
|
|
|
|
2,949
|
|
Farmland
|
|
|
955
|
|
|
|
976
|
|
|
|
|
|
|
|
170
|
|
|
|
87
|
|
Commercial
|
|
|
286
|
|
|
|
1,901
|
|
|
|
530
|
|
|
|
1,251
|
|
|
|
1,049
|
|
Installment
|
|
|
53
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-accrual loans (1)
|
|
|
7,243
|
|
|
|
15,112
|
|
|
|
13,736
|
|
|
|
9,999
|
|
|
|
15,647
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-performing loans
|
|
|
7,243
|
|
|
|
15,112
|
|
|
|
14,035
|
|
|
|
9,999
|
|
|
|
16,194
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OREO:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction, land development and
other land loans |
|
|
237
|
|
|
|
1,860
|
|
|
|
4,150
|
|
|
|
4,043
|
|
|
|
4,850
|
|
Residential real estate 1-4 family
|
|
|
672
|
|
|
|
507
|
|
|
|
1,427
|
|
|
|
540
|
|
|
|
220
|
|
Commercial real estate
|
|
|
1,862
|
|
|
|
2,312
|
|
|
|
2,148
|
|
|
|
1,997
|
|
|
|
1,595
|
|
Total OREO
|
|
|
2,771
|
|
|
|
4,679
|
|
|
|
7,725
|
|
|
|
6,580
|
|
|
|
6,665
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-performing assets (2)
|
|
$
|
10,014
|
|
|
$
|
19,791
|
|
|
$
|
21,760
|
|
|
$
|
16,579
|
|
|
$
|
22,859
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Troubled debt restructured loans on
accrual status |
|
$
|
2,680
|
|
|
$
|
444
|
|
|
$
|
398
|
|
|
$
|
|
|
|
$
|
|
|
Allowance for credit losses
|
|
$
|
8,359
|
|
|
$
|
9,358
|
|
|
$
|
11,127
|
|
|
$
|
10,617
|
|
|
$
|
11.092
|
|
Allowance to non-performing loans
|
|
|
115.41
|
%
|
|
|
61.92
|
%
|
|
|
79.28
|
%
|
|
|
106.18
|
%
|
|
|
68.49
|
%
|
Allowance to non-performing assets
|
|
|
83.47
|
%
|
|
|
47.28
|
%
|
|
|
51.14
|
%
|
|
|
64.04
|
%
|
|
|
48.52
|
%
|
Non-performing loans to total loans (3)
|
|
|
1.44
|
%
|
|
|
3.37
|
%
|
|
|
2.96
|
%
|
|
|
2.15
|
%
|
|
|
3.36
|
%
|
Non-performing assets to total assets
|
|
|
1.42
|
%
|
|
|
3.08
|
%
|
|
|
3.39
|
%
|
|
|
2.57
|
%
|
|
|
3.42
|
%
|
(1) | Includes $1,408,000, $3,930,000, $7,734,000 and $932,000 in non-accrual troubled debt restructured loans (“TDRs”) as of December 31, 2013, 2012, 2011 and 2010, respectively, which are also considered impaired loans. There were no TDRs as of December 31, 2009. |
(2) | Does not include TDRs on accrual status. |
(3) | Excludes loans held for sale |
(4) | Includes one loan totaling $1,831,000 at December 31, 2013 of which $1,465,000 is guaranteed by the United States Department of Agriculture. |
45 | ||
46 | ||
(dollars in thousands)
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
2009
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at beginning of year
|
|
$
|
9,358
|
|
|
$
|
11,127
|
|
|
$
|
10,617
|
|
|
$
|
11,092
|
|
|
$
|
7,623
|
|
Charge-offs:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction and land development
|
|
|
26
|
|
|
|
348
|
|
|
|
790
|
|
|
|
1,891
|
|
|
|
4,687
|
|
Residential real estate 1-4 family
|
|
|
453
|
|
|
|
576
|
|
|
|
665
|
|
|
|
1,518
|
|
|
|
940
|
|
Commercial real estate
|
|
|
64
|
|
|
|
479
|
|
|
|
1,215
|
|
|
|
164
|
|
|
|
505
|
|
Commercial
|
|
|
131
|
|
|
|
67
|
|
|
|
161
|
|
|
|
469
|
|
|
|
238
|
|
Credit card
|
|
|
80
|
|
|
|
17
|
|
|
|
38
|
|
|
|
38
|
|
|
|
80
|
|
Installment
|
|
|
74
|
|
|
|
292
|
|
|
|
55
|
|
|
|
81
|
|
|
|
74
|
|
Total charge-offs
|
|
|
828
|
|
|
|
1,779
|
|
|
|
2,924
|
|
|
|
4,161
|
|
|
|
6,524
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recoveries:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction and land development
|
|
|
7
|
|
|
|
896
|
|
|
|
630
|
|
|
|
2
|
|
|
|
|
|
Residential real estate 1-4 family
|
|
|
14
|
|
|
|
162
|
|
|
|
107
|
|
|
|
48
|
|
|
|
2
|
|
Commercial real estate
|
|
|
219
|
|
|
|
21
|
|
|
|
120
|
|
|
|
17
|
|
|
|
17
|
|
Commercial
|
|
|
36
|
|
|
|
23
|
|
|
|
69
|
|
|
|
13
|
|
|
|
17
|
|
Credit card
|
|
|
0
|
|
|
|
5
|
|
|
|
3
|
|
|
|
3
|
|
|
|
4
|
|
Installment
|
|
|
3
|
|
|
|
3
|
|
|
|
5
|
|
|
|
3
|
|
|
|
9
|
|
Total recoveries
|
|
|
279
|
|
|
|
1,110
|
|
|
|
934
|
|
|
|
86
|
|
|
|
49
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net charge-offs
|
|
|
549
|
|
|
|
669
|
|
|
|
1,990
|
|
|
|
4,075
|
|
|
|
6,475
|
|
Provision for (recapture of) credit losses
|
|
|
(450)
|
|
|
|
(1,100)
|
|
|
|
2,500
|
|
|
|
3,600
|
|
|
|
9,944
|
|
Balance at end of year
|
|
$
|
8,359
|
|
|
$
|
9,358
|
|
|
$
|
11,127
|
|
|
$
|
10,617
|
|
|
$
|
11,092
|
|
Ratio of net charge-offs to average
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
loans outstanding
|
|
|
0.11
|
%
|
|
|
0.14
|
%
|
|
|
0.41
|
%
|
|
|
0.84
|
%
|
|
|
1.29
|
%
|
47 | ||
48 | ||
(dollars in thousands)
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
|
2009
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total impaired loans
|
|
$
|
9,922
|
|
$
|
14,784
|
|
$
|
14,432
|
|
$
|
14,673
|
|
$
|
25,738
|
|
Total impaired loans with valuation allowance
|
|
|
|
|
|
|
|
|
4,498
|
|
|
508
|
|
|
2,962
|
|
Valuation allowance related to impaired loans
|
|
|
|
|
|
|
|
|
2,032
|
|
|
142
|
|
|
638
|
|
|
|
|
|
|
% of
|
|
|
|
|
|
% of
|
|
|
|
|
% of
|
|
|
|
|
|
% of
|
|
|
|
|
|
% of
|
|
||||||
|
|
2013
|
|
Total
|
|
|
2012
|
|
Total
|
|
|
2011
|
|
Total
|
|
|
2010
|
|
Total
|
|
|
2009
|
|
Total
|
|
||||||||||
(dollars in thousands)
|
|
Reserve
|
|
Loans*
|
|
|
Reserve
|
|
Loans*
|
|
|
|
Reserve
|
|
Loans*
|
|
|
Reserve
|
|
Loans*
|
|
|
Reserve
|
|
Loans*
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial loans
|
|
$
|
775
|
|
|
19
|
%
|
|
$
|
923
|
|
|
19
|
%
|
|
$
|
1,012
|
|
|
18
|
%
|
|
$
|
816
|
|
|
18
|
%
|
|
$
|
1,308
|
|
|
19
|
%
|
Real estate loans
|
|
|
4,181
|
|
|
79
|
%
|
|
|
4,927
|
|
|
79
|
%
|
|
|
7,849
|
|
|
80
|
%
|
|
|
7,139
|
|
|
80
|
%
|
|
|
8,341
|
|
|
79
|
%
|
Consumer loans
|
|
|
744
|
|
|
2
|
%
|
|
|
531
|
|
|
2
|
%
|
|
|
642
|
|
|
2
|
%
|
|
|
690
|
|
|
2
|
%
|
|
|
260
|
|
|
2
|
%
|
Unallocated
|
|
|
2,659
|
|
|
|
|
|
|
2,977
|
|
|
|
|
|
|
1,624
|
|
|
|
|
|
|
1,972
|
|
|
|
|
|
|
1,183
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total allowance
|
|
$
|
8,359
|
|
|
100
|
%
|
|
$
|
9,358
|
|
|
100
|
%
|
|
$
|
11,127
|
|
|
100
|
%
|
|
$
|
10,617
|
|
|
100
|
%
|
|
$
|
11,092
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratio of allowance for credit
losses to loans outstanding at end of year |
|
|
|
|
|
1.66
|
%
|
|
|
|
|
|
2.09
|
%
|
|
|
|
|
|
2.34
|
%
|
|
|
|
|
|
2.28
|
%
|
|
|
|
|
|
2.30
|
%
|
*
|
Represents the total of all outstanding loans in each category as a percent of total loans outstanding.
|
49 | ||
(dollars in thousands)
|
|
2013
|
|
2012
|
|
2011
|
|
|||
Demand, non-interest bearing
|
|
$
|
145,028
|
|
$
|
115,138
|
|
$
|
108,899
|
|
Interest bearing demand (NOW)
|
|
|
144,221
|
|
|
125,758
|
|
|
122,160
|
|
Money market deposits
|
|
|
118,627
|
|
|
106,849
|
|
|
99,031
|
|
Savings deposits
|
|
|
73,412
|
|
|
62,493
|
|
|
65,451
|
|
Time, interest bearing (CDs)
|
|
|
126,059
|
|
|
138,005
|
|
|
152,509
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
607,347
|
|
$
|
548,243
|
|
$
|
548,050
|
|
50 | ||
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||||||||
|
|
Average
|
|
|
|
|
Average
|
|
|
|
|
Average
|
|
|
|
|||
(dollars in thousands)
|
|
Deposits
|
|
Rate
|
|
|
Deposits
|
|
Rate
|
|
|
Deposits
|
|
Rate
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest bearing demand Deposits
|
|
$
|
129,218
|
|
0.00
|
%
|
|
$
|
107,048
|
|
0.00
|
%
|
|
$
|
93,413
|
|
0.00
|
%
|
Interest bearing demand deposits
|
|
|
131,179
|
|
0.30
|
%
|
|
|
120,472
|
|
0.48
|
%
|
|
|
113,399
|
|
0.72
|
%
|
Savings and money market deposits
|
|
|
185,005
|
|
0.27
|
%
|
|
|
168,512
|
|
0.30
|
%
|
|
|
162,231
|
|
0.49
|
%
|
Time deposits
|
|
|
135,447
|
|
0.98
|
%
|
|
|
144,486
|
|
1.24
|
%
|
|
|
176,631
|
|
1.72
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
580,849
|
|
0.35
|
%
|
|
$
|
540,518
|
|
0.53
|
%
|
|
$
|
545,674
|
|
0.85
|
%
|
|
|
Under
|
|
Over
|
|
|
|
|
||
(dollars in thousands)
|
|
$100,000
|
|
$100,000
|
|
Total
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
3 months or less
|
|
$
|
11,616
|
|
$
|
9,145
|
|
$
|
20,761
|
|
Over 3 through 6 months
|
|
|
8,681
|
|
|
7,858
|
|
|
16,539
|
|
Over 6 through 12 months
|
|
|
10,488
|
|
|
17,578
|
|
|
28,066
|
|
Over 12 months
|
|
|
18,664
|
|
|
42,029
|
|
|
60,693
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
49,449
|
|
$
|
76,610
|
|
$
|
126,059
|
|
(dollars in thousands)
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount outstanding at end of period
|
|
$
|
|
|
|
$
|
3,000
|
|
|
$
|
|
|
Weighted average interest rate thereon
|
|
|
|
%
|
|
|
2.94
|
%
|
|
|
|
%
|
Maximum month-end balance during the year
|
|
|
3,000
|
|
|
|
3,000
|
|
|
|
10,500
|
|
Average balance during the year
|
|
|
303
|
|
|
|
2,697
|
|
|
|
6,885
|
|
Average interest rate during the year
|
|
|
2.94
|
%
|
|
|
2.94
|
%
|
|
|
3.84
|
%
|
51 | ||
|
|
Payments due by Period
|
|
|||||||||||||
|
|
Less than
|
|
1 3
|
|
3 5
|
|
More than
|
|
|
|
|
||||
Contractual obligations
|
|
1 year
|
|
years
|
|
years
|
|
5 years
|
|
Total
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating leases
|
|
$
|
461
|
|
$
|
785
|
|
$
|
157
|
|
$
|
|
|
$
|
1,403
|
|
Total deposits
|
|
|
546,655
|
|
|
45,846
|
|
|
14,122
|
|
|
724
|
|
|
607,347
|
|
Federal Home Loan Bank borrowings
|
|
|
|
|
|
10,000
|
|
|
|
|
|
|
|
|
10,000
|
|
Junior subordinated debentures
|
|
|
|
|
|
|
|
|
|
|
|
13,403
|
|
|
13,403
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total long-term obligations
|
|
$
|
547,116
|
|
$
|
56,631
|
|
$
|
14,279
|
|
$
|
14,127
|
|
$
|
632,153
|
|
|
|
2013
|
|
2012
|
|
||
|
|
|
|
|
|
|
|
Commitments to extend credit
|
|
$
|
106,017
|
|
$
|
84,493
|
|
Standby letters of credit
|
|
|
1,733
|
|
|
1,975
|
|
Year ended December 31,
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average assets
|
|
..55
|
%
|
..75
|
%
|
..44
|
%
|
..25
|
%
|
(.96)
|
%
|
Return on average equity
|
|
5.48
|
%
|
7.28
|
%
|
4.45
|
%
|
2.77
|
%
|
(11.63)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividend payout ratio
|
|
55
|
%
|
42
|
%
|
|
%
|
|
%
|
|
%
|
52 | ||
53 | ||
|
|
|
|
|
|
|
|
|
Requirements for
|
|
||
|
|
Actual
|
|
|
|
|
|
Well- Capitalized
|
|
|||
(dollars in thousands)
|
|
Amount
|
|
Ratio
|
|
|
Amount
|
|
Ratio
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
Tier 1 capital (to average assets)
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
$
|
67,856
|
|
9.83
|
%
|
|
$
|
27,604
|
|
4.00
|
%
|
Bank
|
|
|
67,420
|
|
9.77
|
%
|
|
|
27,591
|
|
4.00
|
%
|
Tier 1 capital (to risk-weighted assets)
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
67,856
|
|
12,85
|
%
|
|
|
21,119
|
|
4.00
|
%
|
Bank
|
|
|
67,420
|
|
12,78
|
%
|
|
|
21,101
|
|
4.00
|
%
|
Total capital (to risk-weighted assets)
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
74,477
|
|
14,11
|
%
|
|
|
42,237
|
|
8.00
|
%
|
Bank
|
|
|
74,036
|
|
14,03
|
%
|
|
|
42,202
|
|
8.00
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
Tier 1 capital (to average assets)
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
$
|
66,750
|
|
10.69
|
%
|
|
$
|
24,975
|
|
4.00
|
%
|
Bank
|
|
|
66,712
|
|
10.69
|
%
|
|
|
24,966
|
|
4.00
|
%
|
Tier 1 capital (to risk-weighted assets)
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
66,750
|
|
14.95
|
%
|
|
|
17,855
|
|
4.00
|
%
|
Bank
|
|
|
66,712
|
|
14.96
|
%
|
|
|
17,842
|
|
4.00
|
%
|
Total capital (to risk-weighted assets)
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
72,376
|
|
16.21
|
%
|
|
|
35,710
|
|
8.00
|
%
|
Bank
|
|
|
72,334
|
|
16.22
|
%
|
|
|
35,685
|
|
8.00
|
%
|
54 | ||
55 | ||
56 | ||
57 | ||
58 | ||
|
|
|
|
|
Due after
|
|
|
|
|
|
|
|
|
|
|
|
|
Due in one
|
|
one through
|
|
|
Due after
|
|
|
|
|
|
|||
(dollars in thousands)
|
|
year or less
|
|
five years
|
|
|
five years
|
|
|
Total
|
|
||||
Interest earning assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans, including loans held for sale
|
|
$
|
239,585
|
|
$
|
251,299
|
|
|
$
|
20,066
|
|
|
$
|
512,431
|
|
Investments and bank owned life insurance
|
|
|
19,874
|
|
|
11,036
|
|
|
|
89,972
|
|
|
|
119,526
|
|
Fed Funds sold and interest bearing balances with banks
|
|
|
23,448
|
|
|
|
|
|
|
|
|
|
|
234,481
|
|
Federal Home Loan Bank stock
|
|
|
|
|
|
|
|
|
|
3,103
|
|
|
|
3,103
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest earning assets
|
|
$
|
285,956
|
|
$
|
262,335
|
|
|
$
|
110,038
|
|
|
$
|
658,418
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest bearing liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest bearing demand deposits
|
|
$
|
144,220
|
|
$
|
|
|
|
$
|
|
|
|
$
|
144,220
|
|
Savings and money market deposits
|
|
|
192,039
|
|
|
|
|
|
|
|
|
|
|
192,039
|
|
Time deposits
|
|
|
65,873
|
|
|
59,465
|
|
|
|
722
|
|
|
|
126,060
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowings
|
|
|
|
|
|
10,000
|
|
|
|
|
|
|
|
10,000
|
|
Secured borrowings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Junior subordinated debentures
|
|
|
13,403
|
|
|
|
|
|
|
|
|
|
|
13,403
|
|
Total interest bearing liabilities
|
|
$
|
415,535
|
|
$
|
69,465
|
|
|
$
|
722
|
|
|
$
|
485,722
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest rate sensitivity GAP
|
|
$
|
(129,579)
|
|
$
|
192,870
|
|
|
$
|
109,316
|
|
|
$
|
172,607
|
|
Cumulative interest rate sensitivity GAP
|
|
|
|
|
|
63,291
|
|
|
|
172,607
|
|
|
|
|
|
Cumulative interest rate sensitivity GAP as a % of earning assets
|
|
|
|
|
|
9.6
|
%
|
|
|
26.2
|
%
|
|
|
|
|
59 | ||
60 | ||
61 | ||
|
(a)
|
(1)
|
The following financial statements are filed below:
|
|
|
|
Report of Independent Registered Public Accounting Firm Deloitte & Touche LLP
|
|
|
|
Consolidated Balance Sheets
|
|
|
|
Consolidated Statements of Income
|
|
|
|
Consolidated Statements of Shareholders' Equity
|
|
|
|
Consolidated Statements of Cash Flows
|
|
|
|
Notes to Consolidated Financial Statements
|
|
|
|
|
|
(a)
|
(2)
|
Schedules: None
|
|
|
|
|
|
(a)
|
(3)
|
Exhibits: See Exhibit Index immediately following the signature page.
|
62 | ||
F-1 | ||
Pacific Financial Corporation and Subsidiary
|
December 31, 2013 and 2012
|
Consolidated Balance Sheets
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
Cash and due from banks (See note 2)
|
|
$
|
12,214
|
|
$
|
14,168
|
|
Interest bearing deposits in banks
|
|
|
23,734
|
|
|
42,687
|
|
Certificates of deposits held for investment
|
|
|
2,727
|
|
|
2,985
|
|
Securities available for sale, at fair value (amortized cost of $97,536 and $59,658)
|
|
|
96,144
|
|
|
61,106
|
|
Securities held to maturity (fair value of $2,158 and $6,985)
|
|
|
2,132
|
|
|
6,937
|
|
Federal Home Loan Bank stock, at cost
|
|
|
3,013
|
|
|
3,126
|
|
Loans held for sale
|
|
|
7,765
|
|
|
12,950
|
|
|
|
|
|
|
|
|
|
Loans
|
|
|
504,666
|
|
|
448,196
|
|
Allowance for credit losses
|
|
|
(8,359)
|
|
|
(9,358)
|
|
Loans - net
|
|
|
496,307
|
|
|
438,838
|
|
|
|
|
|
|
|
|
|
Premises and equipment
|
|
|
16,790
|
|
|
14,593
|
|
Other real estate owned
|
|
|
2,771
|
|
|
4,679
|
|
Accrued interest receivable
|
|
|
2,307
|
|
|
2,079
|
|
Cash surrender value of life insurance
|
|
|
18,237
|
|
|
17,784
|
|
Goodwill
|
|
|
12,168
|
|
|
11,282
|
|
Other intangible assets
|
|
|
1,481
|
|
|
1,268
|
|
Other assets
|
|
|
7,249
|
|
|
9,112
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
705,039
|
|
$
|
643,594
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders’ Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
|
Demand, non-interest bearing
|
|
$
|
145,028
|
|
$
|
115,138
|
|
Savings and interest-bearing demand
|
|
|
336,260
|
|
|
295,100
|
|
Time, interest-bearing
|
|
|
126,059
|
|
|
138,005
|
|
Total deposits
|
|
|
607,347
|
|
|
548,243
|
|
|
|
|
|
|
|
|
|
Accrued interest payable
|
|
|
167
|
|
|
213
|
|
Short-term borrowings
|
|
|
|
|
|
3,000
|
|
Long-term borrowings
|
|
|
10,000
|
|
|
7,500
|
|
Junior subordinated debentures
|
|
|
13,403
|
|
|
13,403
|
|
Other liabilities
|
|
|
6,985
|
|
|
4,514
|
|
Total liabilities
|
|
|
637,902
|
|
|
576,873
|
|
|
|
|
|
|
|
|
|
Commitments and Contingencies (See note 14)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders’ Equity
|
|
|
|
|
|
|
|
Common stock (par value $1); authorized: 25,000,000 shares;
issued and outstanding: 2013 10,182,083 and 2012 10,121,853 shares |
|
|
10,182
|
|
|
10,122
|
|
Additional paid-in capital
|
|
|
41,817
|
|
|
41,366
|
|
Retained earnings
|
|
|
16,507
|
|
|
14,812
|
|
Accumulated other comprehensive income (loss)
|
|
|
(1,369)
|
|
|
421
|
|
Total shareholders’ equity
|
|
|
67,137
|
|
|
66,721
|
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders’ equity
|
|
$
|
705,039
|
|
$
|
643,594
|
|
F-2 | ||
Pacific Financial Corporation and Subsidiary
|
Years Ended December 31, 2013, 2012 and 2011
|
Consolidated Statements of Income
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and Dividend Income
|
|
|
|
|
|
|
|
|
|
|
Loans
|
|
$
|
24,401
|
|
$
|
25,635
|
|
$
|
27,186
|
|
Deposits in banks
|
|
|
114
|
|
|
84
|
|
|
92
|
|
Securities available for sale:
|
|
|
|
|
|
|
|
|
|
|
Taxable
|
|
|
769
|
|
|
756
|
|
|
1,024
|
|
Tax-exempt
|
|
|
798
|
|
|
711
|
|
|
707
|
|
Securities held to maturity:
|
|
|
|
|
|
|
|
|
|
|
Taxable
|
|
|
10
|
|
|
14
|
|
|
18
|
|
Tax-exempt
|
|
|
198
|
|
|
295
|
|
|
291
|
|
Total interest and dividend income
|
|
|
26,290
|
|
|
27,495
|
|
|
29,318
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest Expense
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
|
2,020
|
|
|
2,882
|
|
|
4,643
|
|
Short-term borrowings
|
|
|
9
|
|
|
79
|
|
|
|
|
Long-term borrowings
|
|
|
214
|
|
|
217
|
|
|
597
|
|
Secured borrowings
|
|
|
|
|
|
20
|
|
|
41
|
|
Junior subordinated debentures
|
|
|
247
|
|
|
286
|
|
|
352
|
|
Total interest expense
|
|
|
2,490
|
|
|
3,484
|
|
|
5,633
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
|
|
|
23,800
|
|
|
24,011
|
|
|
23,685
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for (recapture of) credit losses
|
|
|
(450)
|
|
|
(1,100)
|
|
|
2,500
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income after provision for credit losses
|
|
|
24,250
|
|
|
25,111
|
|
|
21,185
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Interest Income
|
|
|
|
|
|
|
|
|
|
|
Service charges on deposit accounts
|
|
|
1,731
|
|
|
1,686
|
|
|
1,799
|
|
Net gains (loss) on sale of other real estate owned
|
|
|
40
|
|
|
331
|
|
|
(83)
|
|
Net gains from sales of loans
|
|
|
5,171
|
|
|
5,058
|
|
|
3,593
|
|
Net gains on sales of securities available for sale
|
|
|
405
|
|
|
303
|
|
|
698
|
|
Net other-than-temporary impairment (net of $3, $4 and $256
recognized in other comprehensive income before taxes) |
|
|
(37)
|
|
|
(333)
|
|
|
(330)
|
|
Earnings on bank owned life insurance
|
|
|
452
|
|
|
510
|
|
|
527
|
|
Other operating income
|
|
|
2,193
|
|
|
1,836
|
|
|
1,410
|
|
Total non-interest income
|
|
|
9,955
|
|
|
9,391
|
|
|
7,614
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Interest Expense
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits
|
|
|
17,013
|
|
|
16,215
|
|
|
13,723
|
|
Occupancy
|
|
|
1,839
|
|
|
1,673
|
|
|
1,523
|
|
Equipment
|
|
|
860
|
|
|
801
|
|
|
1,011
|
|
State taxes
|
|
|
458
|
|
|
518
|
|
|
473
|
|
Data processing
|
|
|
2,268
|
|
|
1,607
|
|
|
1,415
|
|
Professional services
|
|
|
935
|
|
|
750
|
|
|
739
|
|
Other real estate owned write-downs
|
|
|
946
|
|
|
1,314
|
|
|
1,049
|
|
Other real estate owned operating costs
|
|
|
408
|
|
|
550
|
|
|
450
|
|
FDIC assessments
|
|
|
535
|
|
|
610
|
|
|
938
|
|
Other
|
|
|
4,240
|
|
|
4,379
|
|
|
4,327
|
|
Total non-interest expense
|
|
|
29,502
|
|
|
28,417
|
|
|
25,648
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
4,703
|
|
|
6,085
|
|
|
3,151
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
|
972
|
|
|
1,300
|
|
|
333
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
3,731
|
|
$
|
4,785
|
|
$
|
2,818
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Per Share
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.37
|
|
$
|
0.47
|
|
$
|
0.28
|
|
Diluted
|
|
$
|
0.37
|
|
$
|
0.47
|
|
$
|
0.28
|
|
Weighted Average Shares Outstanding:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
10,121,738
|
|
|
10,121,853
|
|
|
10,121,853
|
|
Diluted
|
|
|
10,189,888
|
|
|
10,126,244
|
|
|
10,121,870
|
|
F-3 | ||
Pacific Financial Corporation and Subsidiary
|
Years Ended December 31, 2013, 2012 and 2011
|
Consolidated Statements of Comprehensive Income
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
3,731
|
|
$
|
4,785
|
|
$
|
2,818
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income, net of tax:
|
|
|
|
|
|
|
|
|
|
|
Net unrealized (losses) gains on investment securities
(net of tax of $(966), $276, and $391, respectively) |
|
|
(1,875)
|
|
|
536
|
|
|
758
|
|
Defined benefit plans (net of tax of $29, $44,
and $34, respectively) |
|
|
85
|
|
|
130
|
|
|
(101)
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income
|
|
|
(1,790)
|
|
|
666
|
|
|
657
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income
|
|
$
|
1,941
|
|
$
|
5,451
|
|
$
|
3,475
|
|
F-4 | ||
Pacific Financial Corporation and Subsidiary
|
Years Ended December 31, 2013, 2012 and 2011
|
Consolidated Statements of Shareholders’ Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
Shares of
|
|
|
|
|
|
Additional
|
|
|
|
|
|
Other
|
|
|
|
|
|
|
Common
|
|
|
Common
|
|
|
Paid-in
|
|
|
Retained
|
|
|
Comprehensive
|
|
|
|
|
|
|
Stock
|
|
|
Stock
|
|
|
Capital
|
|
|
Earnings
|
|
|
Income (Loss)
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at January 1, 2011
|
|
10,121,853
|
|
$
|
10,122
|
|
$
|
41,316
|
|
$
|
9,233
|
|
$
|
(902)
|
|
$
|
59,769
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
2,818
|
|
|
|
|
|
2,818
|
|
Unrealized holding gain on securities less reclassification
adjustment for net gains included in net income |
|
|
|
|
|
|
|
|
|
|
|
|
|
758
|
|
|
758
|
|
Amortization of unrecognized prior service costs and net gains/losses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(101)
|
|
|
(101)
|
|
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,475
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock compensation expense
|
|
|
|
|
|
|
|
26
|
|
|
|
|
|
|
|
|
26
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2011
|
|
10,121,853
|
|
$
|
10,122
|
|
$
|
41,342
|
|
$
|
12,051
|
|
$
|
(245)
|
|
$
|
63,270
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
4,785
|
|
|
|
|
|
4,785
|
|
Unrealized holding gain on securities less reclassification
adjustment for net gains included in net income |
|
|
|
|
|
|
|
|
|
|
|
|
|
536
|
|
|
536
|
|
Amortization of unrecognized prior service costs and net gains/losses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
130
|
|
|
130
|
|
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,451
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividend paid ($0.20 per share)
|
|
|
|
|
|
|
|
|
|
|
(2,024)
|
|
|
|
|
|
(2,024)
|
|
Stock compensation expense
|
|
|
|
|
|
|
|
24
|
|
|
|
|
|
|
|
|
24
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2012
|
|
10,121,853
|
|
$
|
10,122
|
|
$
|
41,366
|
|
$
|
14,812
|
|
$
|
421
|
|
$
|
66,721
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
3,731
|
|
|
|
|
|
3,731
|
|
Unrealized holding gain on securities less reclassification
adjustment for net gains included in net income |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,875)
|
|
|
(1,875)
|
|
Amortization of unrecognized prior service costs and net gains/losses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
85
|
|
|
85
|
|
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,790
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock
|
|
60,230
|
|
|
60
|
|
|
334
|
|
|
|
|
|
|
|
|
394
|
|
Dividend declared ($0.20 per share)
|
|
|
|
|
|
|
|
|
|
|
(2,036)
|
|
|
|
|
|
(2,036)
|
|
Stock compensation expense
|
|
|
|
|
|
|
|
117
|
|
|
|
|
|
|
|
|
117
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2013
|
|
10,182,083
|
|
$
|
10,182
|
|
$
|
41,817
|
|
$
|
16,507
|
|
$
|
(1,369)
|
|
$
|
67,137
|
|
F-5 | ||
Pacific Financial Corporation and Subsidiary
|
Years Ended December 31, 2013, 2012 and 2011
|
Consolidated Statements of Cash Flows
|
(Dollars in Thousands)
|
|
|
2013
|
|
2012
|
|
2011
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Operating Activities
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
3,731
|
|
$
|
4,785
|
|
$
|
2,818
|
|
Adjustments to reconcile net income to net cash
|
|
|
|
|
|
|
|
|
|
|
provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
2,328
|
|
|
1,491
|
|
|
1,428
|
|
Provision for (recapture of) credit losses
|
|
|
(450)
|
|
|
(1,100)
|
|
|
2,500
|
|
Deferred income taxes
|
|
|
386
|
|
|
63
|
|
|
(815)
|
|
Originations of loans held for sale
|
|
|
(225,068)
|
|
|
(251,435)
|
|
|
(172,274)
|
|
Proceeds from sales of loans held for sale
|
|
|
234,194
|
|
|
256,720
|
|
|
170,797
|
|
Net gains on sales of loans
|
|
|
(5,171)
|
|
|
(5,058)
|
|
|
(3,593)
|
|
Net gain on sales of securities available for sale
|
|
|
(405)
|
|
|
(303)
|
|
|
(698)
|
|
Net OTTI recognized in earnings
|
|
|
37
|
|
|
333
|
|
|
330
|
|
(Gain) loss on sales of other real estate owned
|
|
|
(40)
|
|
|
(331)
|
|
|
83
|
|
(Gain) loss on sale of premises and equipment
|
|
|
36
|
|
|
(6)
|
|
|
23
|
|
Earnings on bank owned life insurance
|
|
|
(452)
|
|
|
(510)
|
|
|
(527)
|
|
(Increase) decrease in accrued interest receivable
|
|
|
(228)
|
|
|
77
|
|
|
178
|
|
Increase (decrease) in accrued interest payable
|
|
|
(48)
|
|
|
(1,277)
|
|
|
110
|
|
Other real estate owned write-downs
|
|
|
946
|
|
|
1,314
|
|
|
1,049
|
|
Additions to other real estate owned
|
|
|
|
|
|
(185)
|
|
|
(260)
|
|
Proceeds from Internal Revenue Service tax refund
|
|
|
|
|
|
|
|
|
1,876
|
|
Decrease in prepaid expenses
|
|
|
2,157
|
|
|
374
|
|
|
801
|
|
Other - net
|
|
|
1,003
|
|
|
288
|
|
|
1,869
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
12,956
|
|
|
5,240
|
|
|
5,695
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Investing Activities
|
|
|
|
|
|
|
|
|
|
|
Net (increase) decrease in interest bearing deposits in banks
|
|
|
18,953
|
|
|
(14,162)
|
|
|
25,805
|
|
Purchase of certificates of deposits held for investment, net
|
|
|
258
|
|
|
(2,985)
|
|
|
|
|
Activity in securities available for sale:
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
|
7,832
|
|
|
10,917
|
|
|
17,407
|
|
Maturities, prepayments and calls
|
|
|
11,265
|
|
|
10,451
|
|
|
7,564
|
|
Purchases
|
|
|
(57,521)
|
|
|
(34,194)
|
|
|
(29,553)
|
|
Activity in securities held to maturity:
|
|
|
|
|
|
|
|
|
|
|
Maturities
|
|
|
4,804
|
|
|
286
|
|
|
255
|
|
Purchases
|
|
|
|
|
|
(200)
|
|
|
(828)
|
|
Proceeds from sales of government loan pools
|
|
|
6,266
|
|
|
1,296
|
|
|
9,845
|
|
(Increase) decrease in loans made to customers,
|
|
|
|
|
|
|
|
|
|
|
net of principal collections
|
|
|
(60,004)
|
|
|
24,105
|
|
|
(23,505)
|
|
Purchases of premises and equipment
|
|
|
(2,728)
|
|
|
(844)
|
|
|
(1,019)
|
|
Proceeds from sales of other real estate owned
|
|
|
2,660
|
|
|
4,223
|
|
|
1,101
|
|
Cash received in acquisition, net of cash paid
|
|
|
31,941
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) investing activities
|
|
|
(36,274)
|
|
|
(1,107)
|
|
|
7,072
|
|
F-6 | ||
Pacific Financial Corporation and Subsidiary
|
Years Ended December 31, 2013, 2012 and 2011
|
Consolidated Statements of Cash Flows
|
(concluded) (Dollars in Thousands)
|
|
|
2013
|
|
2012
|
|
2011
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Financing Activities
|
|
|
|
|
|
|
|
|
|
|
Net increase in deposits
|
|
$
|
21,470
|
|
$
|
193
|
|
$
|
3,096
|
|
Net decrease in short-term borrowings
|
|
|
(3,000)
|
|
|
|
|
|
(10,500)
|
|
Decrease in secured borrowings
|
|
|
|
|
|
(741)
|
|
|
(184)
|
|
Proceeds from issuance of long-term borrowings
|
|
|
2,500
|
|
|
2,500
|
|
|
7,500
|
|
Prepayments of long-term borrowings
|
|
|
|
|
|
(2,500)
|
|
|
(7,500)
|
|
Common stock issued
|
|
|
394
|
|
|
|
|
|
|
|
Cash dividends paid
|
|
|
|
|
|
(2,024)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) financing activities
|
|
|
21,364
|
|
|
(2,572)
|
|
|
(7,588)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in cash and due from banks
|
|
|
(1,954)
|
|
|
1,561
|
|
|
5,179
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and Due from Banks
|
|
|
|
|
|
|
|
|
|
|
Beginning of year
|
|
|
14,168
|
|
|
12,607
|
|
|
7,428
|
|
|
|
|
|
|
|
|
|
|
|
|
End of year
|
|
$
|
12,214
|
|
$
|
14,168
|
|
$
|
12,607
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Disclosures of Cash Flow Information
|
|
|
|
|
|
|
|
|
|
|
Interest paid
|
|
$
|
2,536
|
|
$
|
4,761
|
|
$
|
5,523
|
|
Income taxes paid
|
|
|
690
|
|
|
1,998
|
|
|
332
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Disclosures of Non-Cash Investing Activities
|
|
|
|
|
|
|
|
|
|
|
Fair value adjustment of securities available for sale, net of tax
|
|
$
|
(1,875)
|
|
$
|
536
|
|
$
|
758
|
|
Transfer of loans held for sale to loans held for investment
|
|
|
986
|
|
|
1,295
|
|
|
300
|
|
Other real estate owned acquired in settlement of loans
|
|
|
(1,756)
|
|
|
(2,897)
|
|
|
(4,278)
|
|
Financed sale of other real estate owned
|
|
|
98
|
|
|
922
|
|
|
1,160
|
|
Reclass of current portion of long-term borrowings to
|
|
|
|
|
|
|
|
|
|
|
short-term borrowings
|
|
|
|
|
|
3,000
|
|
|
|
|
F-7 | ||
Pacific Financial Corporation and Subsidiary
|
December 31, 2013 and 2012 and for the three years ended December 31, 2013, 2012 and 2011
|
Notes to Consolidated Financial Statements, Dollars in Thousands Except Per Share Amounts
|
F-8 | ||
Pacific Financial Corporation and Subsidiary
|
December 31, 2013 and 2012 and for the three years ended December 31, 2013, 2012 and 2011
|
Notes to Consolidated Financial Statements, Dollars in Thousands Except Per Share Amounts
|
F-9 | ||
Pacific Financial Corporation and Subsidiary
|
December 31, 2013 and 2012 and for the three years ended December 31, 2013, 2012 and 2011
|
Notes to Consolidated Financial Statements, Dollars in Thousands Except Per Share Amounts
|
F-10 | ||
Pacific Financial Corporation and Subsidiary
|
December 31, 2013 and 2012 and for the three years ended December 31, 2013, 2012 and 2011
|
Notes to Consolidated Financial Statements, Dollars in Thousands Except Per Share Amounts
|
F-11 | ||
Pacific Financial Corporation and Subsidiary
|
December 31, 2013 and 2012 and for the three years ended December 31, 2013, 2012 and 2011
|
Notes to Consolidated Financial Statements, Dollars in Thousands Except Per Share Amounts
|
F-12 | ||
Pacific Financial Corporation and Subsidiary
|
December 31, 2013 and 2012 and for the three years ended December 31, 2013, 2012 and 2011
|
Notes to Consolidated Financial Statements, Dollars in Thousands Except Per Share Amounts
|
F-13 | ||
Pacific Financial Corporation and Subsidiary
|
December 31, 2013 and 2012 and for the three years ended December 31, 2013, 2012 and 2011
|
Notes to Consolidated Financial Statements, Dollars in Thousands Except Per Share Amounts
|
|
|
|
|
|
Gross
|
|
Gross
|
|
|
|
|||
|
|
Amortized
|
|
Unrealized
|
|
Unrealized
|
|
Fair
|
|
||||
Securities Available for Sale
|
|
Cost
|
|
Gains
|
|
Losses
|
|
Value
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Government agency securities
|
|
$
|
8,859
|
|
$
|
34
|
|
$
|
82
|
|
$
|
8,811
|
|
State and municipal securities
|
|
|
31,973
|
|
|
774
|
|
|
587
|
|
|
32,160
|
|
Agency MBS
|
|
|
53,462
|
|
|
267
|
|
|
1,549
|
|
|
52,180
|
|
Non-agency MBS
|
|
|
2,251
|
|
|
3
|
|
|
243
|
|
|
2,011
|
|
Corporate bonds
|
|
|
991
|
|
|
|
|
|
9
|
|
|
982
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
97,536
|
|
$
|
1,078
|
|
$
|
2,470
|
|
$
|
96,144
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Government agency securities
|
|
$
|
5,922
|
|
$
|
36
|
|
$
|
6
|
|
$
|
5,952
|
|
State and municipal securities
|
|
|
25,254
|
|
|
1,691
|
|
|
39
|
|
|
26,906
|
|
Agency MBS
|
|
|
22,113
|
|
|
249
|
|
|
203
|
|
|
22,159
|
|
Non-agency MBS
|
|
|
2,804
|
|
|
12
|
|
|
272
|
|
|
2,544
|
|
Corporate bonds
|
|
|
3,565
|
|
|
|
|
|
20
|
|
|
3,545
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
59,658
|
|
$
|
1,988
|
|
$
|
540
|
|
$
|
61,106
|
|
|
|
|
|
|
Gross
|
|
Gross
|
|
|
|
|
||
|
|
Amortized
|
|
Unrealized
|
|
Unrealized
|
|
Fair
|
|
||||
Securities Held to Maturity
|
|
Cost
|
|
Gains
|
|
Losses
|
|
Value
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
State and municipal securities
|
|
$
|
1,973
|
|
$
|
13
|
|
$
|
|
|
$
|
1,986
|
|
Agency MBS
|
|
|
159
|
|
|
13
|
|
|
|
|
|
172
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
2,132
|
|
$
|
26
|
|
$
|
|
|
$
|
2,158
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
State and municipal securities
|
|
$
|
6,716
|
|
$
|
32
|
|
$
|
|
|
$
|
6,748
|
|
Agency MBS
|
|
|
221
|
|
|
16
|
|
|
|
|
|
237
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
6,937
|
|
$
|
48
|
|
$
|
|
|
$
|
6,985
|
|
F-14 | ||
Pacific Financial Corporation and Subsidiary
|
December 31, 2013 and 2012 and for the three years ended December 31, 2013, 2012 and 2011
|
Notes to Consolidated Financial Statements, Dollars in Thousands Except Per Share Amounts
|
|
|
Less than 12 Months
|
|
More than 12 Months
|
|
Total
|
|
||||||||||||
|
|
Fair
|
|
Unrealized
|
|
Fair
|
|
Unrealized
|
|
Fair
|
|
Unrealized
|
|
||||||
December 31, 2013
|
|
Value
|
|
Loss
|
|
Value
|
|
Loss
|
|
Value
|
|
Loss
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available for Sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Government agency securities
|
|
$
|
5,550
|
|
$
|
82
|
|
$
|
|
|
$
|
|
|
$
|
5,550
|
|
$
|
82
|
|
State and municipal securities
|
|
|
11,551
|
|
|
485
|
|
|
1,821
|
|
|
102
|
|
|
13,372
|
|
|
587
|
|
Agency MBS
|
|
|
28,795
|
|
|
996
|
|
|
8,908
|
|
|
553
|
|
|
37,703
|
|
|
1,549
|
|
Non-agency MBS
|
|
|
389
|
|
|
27
|
|
|
1,619
|
|
|
216
|
|
|
2,008
|
|
|
243
|
|
Corporate bonds
|
|
|
982
|
|
|
9
|
|
|
|
|
|
|
|
|
982
|
|
|
9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
47,267
|
|
$
|
1,599
|
|
$
|
12,348
|
|
$
|
871
|
|
$
|
59,615
|
|
$
|
2,470
|
|
|
|
Less than 12 Months
|
|
More than 12 Months
|
|
Total
|
|
||||||||||||
|
|
Fair
|
|
Unrealized
|
|
Fair
|
|
Unrealized
|
|
Fair
|
|
Unrealized
|
|
||||||
December 31, 2012
|
|
Value
|
|
Loss
|
|
Value
|
|
Loss
|
|
Value
|
|
Loss
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available for Sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Government agency securities
|
|
$
|
2,688
|
|
$
|
6
|
|
$
|
|
|
$
|
|
|
$
|
2,688
|
|
$
|
6
|
|
State and municipal securities
|
|
|
1,896
|
|
|
39
|
|
|
|
|
|
|
|
|
1,896
|
|
|
39
|
|
Agency MBS
|
|
|
11,890
|
|
|
198
|
|
|
370
|
|
|
5
|
|
|
12,260
|
|
|
203
|
|
Non-agency MBS
|
|
|
|
|
|
|
|
|
1,909
|
|
|
272
|
|
|
1,909
|
|
|
272
|
|
Corporate bonds
|
|
|
1,957
|
|
|
20
|
|
|
|
|
|
|
|
|
1,957
|
|
|
20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
18,431
|
|
$
|
263
|
|
$
|
2,279
|
|
$
|
277
|
|
$
|
20,710
|
|
$
|
540
|
|
F-15 | ||
Pacific Financial Corporation and Subsidiary
|
December 31, 2013 and 2012 and for the three years ended December 31, 2013, 2012 and 2011
|
Notes to Consolidated Financial Statements, Dollars in Thousands Except Per Share Amounts
|
|
|
Held to Maturity
|
|
Available for Sale
|
|
||||||||
|
|
Amortized
|
|
Fair
|
|
Amortized
|
|
Fair
|
|
||||
|
|
Cost
|
|
Value
|
|
Cost
|
|
Value
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Due in one year or less
|
|
$
|
190
|
|
$
|
192
|
|
$
|
1,481
|
|
$
|
1,483
|
|
Due from one year to five years
|
|
|
|
|
|
|
|
|
11,108
|
|
|
11,037
|
|
Due from five to ten years
|
|
|
915
|
|
|
926
|
|
|
7,810
|
|
|
7,801
|
|
Due after ten years
|
|
|
868
|
|
|
868
|
|
|
21,424
|
|
|
21,632
|
|
Mortgage-backed securities
|
|
|
159
|
|
|
172
|
|
|
55,713
|
|
|
54,191
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
2,132
|
|
$
|
2,158
|
|
$
|
97,536
|
|
$
|
96,144
|
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
|
|
|
|
|
Commercial and agricultural
|
|
$
|
104,111
|
|
$
|
87,278
|
|
Real estate:
|
|
|
|
|
|
|
|
Construction and development
|
|
|
29,096
|
|
|
31,411
|
|
Residential 1-4 family
|
|
|
87,762
|
|
|
77,497
|
|
Multi-family
|
|
|
17,520
|
|
|
7,744
|
|
Commercial real estate owner occupied
|
|
|
105,594
|
|
|
109,783
|
|
Commercial real estate non owner occupied
|
|
|
117,294
|
|
|
103,014
|
|
Farmland
|
|
|
23,698
|
|
|
24,544
|
|
Consumer
|
|
|
20,728
|
|
|
7,782
|
|
|
|
|
505,803
|
|
|
449,053
|
|
Less unearned income
|
|
|
(1,137)
|
|
|
(857)
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
504,666
|
|
$
|
448,196
|
|
F-16 | ||
Pacific Financial Corporation and Subsidiary
|
December 31, 2013 and 2012 and for the three years ended December 31, 2013, 2012 and 2011
|
Notes to Consolidated Financial Statements, Dollars in Thousands Except Per Share Amounts
|
|
|
|
|
|
|
Commercial
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real Estate
|
|
|
Residential
|
|
|
|
|
|
|
|
|
2013
|
|
Allowance for Credit Losses:
|
|
|
Commercial
|
|
|
(“CRE”)
|
|
|
Real Estate
|
|
|
Consumer
|
|
|
Unallocated
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance
|
|
$
|
923
|
|
$
|
4,098
|
|
$
|
829
|
|
$
|
531
|
|
$
|
2,977
|
|
$
|
9,358
|
|
Charge-offs
|
|
|
(131)
|
|
|
(90)
|
|
|
(453)
|
|
|
(154)
|
|
|
|
|
|
(828)
|
|
Recoveries
|
|
|
36
|
|
|
226
|
|
|
14
|
|
|
3
|
|
|
|
|
|
279
|
|
Provision for (recapture of) credit losses
|
|
|
(53)
|
|
|
(728)
|
|
|
285
|
|
|
364
|
|
|
(318)
|
|
|
(450)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance
|
|
$
|
775
|
|
$
|
3,506
|
|
$
|
675
|
|
$
|
744
|
|
$
|
2,659
|
|
$
|
8,359
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance
|
|
$
|
1,012
|
|
$
|
6,803
|
|
$
|
1,046
|
|
$
|
642
|
|
$
|
1,624
|
|
$
|
11,127
|
|
Charge-offs
|
|
|
(67)
|
|
|
(827)
|
|
|
(576)
|
|
|
(309)
|
|
|
|
|
|
(1,779)
|
|
Recoveries
|
|
|
23
|
|
|
917
|
|
|
162
|
|
|
8
|
|
|
|
|
|
1,110
|
|
Provision for (recapture of) credit losses
|
|
|
(45)
|
|
|
(2,795)
|
|
|
197
|
|
|
190
|
|
|
1,353
|
|
|
(1,100)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance
|
|
$
|
923
|
|
$
|
4,098
|
|
$
|
829
|
|
$
|
531
|
|
$
|
2,977
|
|
$
|
9,358
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance
|
|
$
|
816
|
|
$
|
5,385
|
|
$
|
1,754
|
|
$
|
690
|
|
$
|
1,972
|
|
$
|
10,617
|
|
Charge-offs
|
|
|
(161)
|
|
|
(2,005)
|
|
|
(665)
|
|
|
(93)
|
|
|
|
|
|
(2,924)
|
|
Recoveries
|
|
|
69
|
|
|
750
|
|
|
107
|
|
|
8
|
|
|
|
|
|
934
|
|
Provision for (recapture of) credit losses
|
|
|
288
|
|
|
2,673
|
|
|
(150)
|
|
|
37
|
|
|
(348)
|
|
|
2,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance
|
|
$
|
1,012
|
|
$
|
6,803
|
|
$
|
1,046
|
|
$
|
642
|
|
$
|
1,624
|
|
$
|
11,127
|
|
F-17 | ||
Pacific Financial Corporation and Subsidiary
|
December 31, 2013 and 2012 and for the three years ended December 31, 2013, 2012 and 2011
|
Notes to Consolidated Financial Statements, Dollars in Thousands Except Per Share Amounts
|
|
|
|
|
|
|
Commercial
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real Estate
|
|
|
Residential
|
|
|
|
|
|
|
|
|
|
|
December 31, 2013
|
|
|
Commercial
|
|
|
(“CRE”)
|
|
|
Real Estate
|
|
|
Consumer
|
|
|
Unallocated
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for credit losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance: individually evaluated for impairment
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance: collectively evaluated for impairment
|
|
|
775
|
|
|
3,506
|
|
|
675
|
|
|
744
|
|
|
2,659
|
|
|
8,359
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance: individually evaluated for impairment
|
|
$
|
587
|
|
$
|
8,656
|
|
$
|
626
|
|
$
|
53
|
|
$
|
|
|
$
|
9,922
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance: collectively evaluated for impairment
|
|
|
103,524
|
|
|
267,026
|
|
|
104,656
|
|
|
20,675
|
|
|
|
|
|
495,881
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending Balance
|
|
$
|
104,111
|
|
$
|
275,682
|
|
$
|
105,282
|
|
$
|
20,728
|
|
$
|
|
|
$
|
505,803
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less unearned income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,137)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance total loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
504,666
|
|
|
|
|
|
|
|
Commercial
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real Estate
|
|
|
Residential
|
|
|
|
|
|
|
|
|
|
|
December 31, 2012
|
|
|
Commercial
|
|
|
(“CRE”)
|
|
|
Real Estate
|
|
|
Consumer
|
|
|
Unallocated
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for credit losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance: individually evaluated for impairment
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance: collectively evaluated for impairment
|
|
|
923
|
|
|
4,098
|
|
|
829
|
|
|
531
|
|
|
2,977
|
|
|
9,358
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance: individually evaluated for impairment
|
|
$
|
2,219
|
|
$
|
11,697
|
|
$
|
868
|
|
$
|
|
|
$
|
|
|
$
|
14,784
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance: collectively evaluated for impairment
|
|
|
85,059
|
|
|
257,055
|
|
|
84,373
|
|
|
7,782
|
|
|
|
|
|
434,269
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending Balance
|
|
$
|
87,278
|
|
$
|
268,752
|
|
$
|
85,241
|
|
$
|
7,782
|
|
$
|
|
|
$
|
449,053
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less unearned income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(857)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance total loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
448,196
|
|
F-18 | ||
Pacific Financial Corporation and Subsidiary
|
December 31, 2013 and 2012 and for the three years ended December 31, 2013, 2012 and 2011
|
Notes to Consolidated Financial Statements, Dollars in Thousands Except Per Share Amounts
|
|
·
|
“Substandard” loans have one or more defined weaknesses and are characterized by the distinct possibility some loss will be sustained if the deficiencies are not corrected.
|
|
·
|
“Doubtful” loans have the weaknesses of loans classified as “Substandard”, with additional characteristics that suggest the weaknesses make collection or recovery in full after liquidation of collateral questionable on the basis of currently existing facts, conditions and values. There is a high possibility of loss in loans classified as “Doubtful”.
|
|
·
|
“Loss” loans are considered uncollectible and of such little value that continued classification of the credit as a loan is not warranted. If a loan or a portion thereof is classified as “Loss”, it must be charged-off, meaning the amount of the loss is charged against the allowance for credit losses, thereby reducing the reserve.
|
|
|
|
|
|
Other Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Especially
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pass
|
|
Mentioned
|
|
Substandard
|
|
Doubtful
|
|
Total
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
$
|
100,262
|
|
$
|
2,858
|
|
$
|
991
|
|
$
|
|
|
$
|
104,111
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction and development
|
|
|
26,587
|
|
|
1,101
|
|
|
1,408
|
|
|
|
|
|
29,096
|
|
Residential 1-4 family
|
|
|
84,407
|
|
|
554
|
|
|
2,801
|
|
|
|
|
|
87,762
|
|
Multi-family
|
|
|
17,520
|
|
|
|
|
|
|
|
|
|
|
|
17,520
|
|
CRE owner occupied
|
|
|
100,612
|
|
|
1,019
|
|
|
3,963
|
|
|
|
|
|
105,594
|
|
CRE non owner occupied
|
|
|
98,044
|
|
|
16,752
|
|
|
2,498
|
|
|
|
|
|
117,294
|
|
Farmland
|
|
|
20,228
|
|
|
2,464
|
|
|
1,006
|
|
|
|
|
|
23,698
|
|
Total real estate
|
|
|
347,398
|
|
|
21,890
|
|
|
11,676
|
|
|
|
|
|
380,964
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer
|
|
|
20,570
|
|
|
62
|
|
|
96
|
|
|
|
|
|
20,728
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal
|
|
$
|
468,230
|
|
$
|
24,810
|
|
$
|
12,763
|
|
$
|
|
|
$
|
505,803
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less unearned income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,137)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
504,666
|
|
F-19 | ||
Pacific Financial Corporation and Subsidiary
|
December 31, 2013 and 2012 and for the three years ended December 31, 2013, 2012 and 2011
|
Notes to Consolidated Financial Statements, Dollars in Thousands Except Per Share Amounts
|
|
|
|
|
|
Other Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Especially
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pass
|
|
Mentioned
|
|
Substandard
|
|
Doubtful
|
|
Total
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
$
|
82,899
|
|
$
|
979
|
|
$
|
3,368
|
|
$
|
32
|
|
$
|
87,278
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction and development
|
|
|
27,209
|
|
|
603
|
|
|
3,355
|
|
|
244
|
|
|
31,411
|
|
Residential 1-4 family
|
|
|
72,414
|
|
|
2,016
|
|
|
3,067
|
|
|
|
|
|
77,497
|
|
Multi-family
|
|
|
7,744
|
|
|
|
|
|
|
|
|
|
|
|
7,744
|
|
CRE owner occupied
|
|
|
103,444
|
|
|
1,844
|
|
|
4,495
|
|
|
|
|
|
109,783
|
|
CRE non owner occupied
|
|
|
84,610
|
|
|
12,346
|
|
|
6,058
|
|
|
|
|
|
103,014
|
|
Farmland
|
|
|
23,511
|
|
|
|
|
|
1,033
|
|
|
|
|
|
24,544
|
|
Total real estate
|
|
|
318,932
|
|
|
16,809
|
|
|
18,008
|
|
|
244
|
|
|
353,993
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer
|
|
|
7,740
|
|
|
|
|
|
42
|
|
|
|
|
|
7,782
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal
|
|
$
|
409,571
|
|
$
|
17,788
|
|
$
|
21,418
|
|
$
|
276
|
|
$
|
449,053
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less unearned income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(857)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
448,196
|
|
F-20 | ||
Pacific Financial Corporation and Subsidiary
|
December 31, 2013 and 2012 and for the three years ended December 31, 2013, 2012 and 2011
|
Notes to Consolidated Financial Statements, Dollars in Thousands Except Per Share Amounts
|
|
|
|
|
|
|
|
|
|
|
|
|
Greater
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Than 90
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Days Past
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30-59
|
|
|
60-89
|
|
|
Due and
|
|
|
|
|
|
Non-
|
|
|
|
|
|
|
|
|
|
|
Days
|
|
|
Days
|
|
|
Still
|
|
|
Total
|
|
|
accrual
|
|
|
Total
|
|
|
|
|
Current
|
|
|
Past Due
|
|
|
Past Due
|
|
|
Accruing
|
|
|
Past Due
|
|
|
Loans
|
|
|
Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
$
|
103,811
|
|
$
|
14
|
|
$
|
|
|
$
|
|
|
$
|
14
|
|
$
|
286
|
|
$
|
104,111
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction & development
|
|
|
27,688
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,408
|
|
|
29,096
|
|
Residential 1-4 family
|
|
|
87,029
|
|
|
333
|
|
|
|
|
|
|
|
|
333
|
|
|
400
|
|
|
87,762
|
|
Multi-family
|
|
|
17,520
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,520
|
|
CRE - owner occupied
|
|
|
103,935
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,659
|
|
|
105,594
|
|
CRE - non-owner occupied
|
|
|
114,812
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,482
|
|
|
117,294
|
|
Farmland
|
|
|
21,868
|
|
|
875
|
|
|
|
|
|
|
|
|
875
|
|
|
955
|
|
|
23,698
|
|
Total real estate
|
|
|
372,852
|
|
|
1,208
|
|
|
|
|
|
|
|
|
1,208
|
|
|
6,904
|
|
|
380,964
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer
|
|
|
20,507
|
|
|
165
|
|
|
3
|
|
|
|
|
|
168
|
|
|
53
|
|
|
20,728
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less unearned income
|
|
|
(1,137)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,137)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
496,033
|
|
$
|
1,387
|
|
$
|
3
|
|
$
|
|
|
$
|
1,390
|
|
$
|
7,243
|
|
$
|
504,666
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Greater
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Than 90
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Days Past
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30-59
|
|
|
60-89
|
|
|
Due and
|
|
|
|
|
|
Non-
|
|
|
|
|
|
|
|
|
|
|
Days
|
|
|
Days
|
|
|
Still
|
|
|
Total
|
|
|
accrual
|
|
|
Total
|
|
|
|
|
Current
|
|
|
Past Due
|
|
|
Past Due
|
|
|
Accruing
|
|
|
Past Due
|
|
|
Loans
|
|
|
Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
$
|
85,243
|
|
$
|
107
|
|
$
|
27
|
|
$
|
|
|
$
|
134
|
|
$
|
1,901
|
|
$
|
87,278
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction & development
|
|
|
29,619
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,792
|
|
|
31,411
|
|
Residential 1-4 family
|
|
|
75,102
|
|
|
1,505
|
|
|
90
|
|
|
|
|
|
1,595
|
|
|
800
|
|
|
77,497
|
|
Multi-family
|
|
|
7,744
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,744
|
|
CRE - owner occupied
|
|
|
105,936
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,847
|
|
|
109,783
|
|
CRE - non-owner occupied
|
|
|
96,567
|
|
|
652
|
|
|
|
|
|
|
|
|
652
|
|
|
5,795
|
|
|
103,014
|
|
Farmland
|
|
|
23,435
|
|
|
133
|
|
|
|
|
|
|
|
|
133
|
|
|
976
|
|
|
24,544
|
|
Total real estate
|
|
|
338,403
|
|
|
2,290
|
|
|
90
|
|
|
|
|
|
2,380
|
|
|
13,210
|
|
|
353,993
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer
|
|
|
7,773
|
|
|
8
|
|
|
|
|
|
|
|
|
8
|
|
|
1
|
|
|
7,782
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less unearned income
|
|
|
(857)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(857)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
430,562
|
|
$
|
2,405
|
|
$
|
117
|
|
$
|
|
|
$
|
2,522
|
|
$
|
15,112
|
|
$
|
448,196
|
|
F-21 | ||
Pacific Financial Corporation and Subsidiary
|
December 31, 2013 and 2012 and for the three years ended December 31, 2013, 2012 and 2011
|
Notes to Consolidated Financial Statements, Dollars in Thousands Except Per Share Amounts
|
|
|
|
|
|
|
Unpaid
|
|
|
|
|
|
Average
|
|
|
Interest
|
|
|
|
|
Recorded
|
|
|
Principal
|
|
|
Related
|
|
|
Recorded
|
|
|
Income
|
|
|
|
|
Investment
|
|
|
Balance
|
|
|
Allowance
|
|
|
Investment
|
|
|
Recognized
|
|
With no related allowance recorded:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
$
|
587
|
|
$
|
608
|
|
$
|
|
|
$
|
1,270
|
|
$
|
9
|
|
Consumer
|
|
|
53
|
|
|
53
|
|
|
|
|
|
11
|
|
|
1
|
|
Residential real estate
|
|
|
626
|
|
|
815
|
|
|
|
|
|
1,045
|
|
|
25
|
|
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CRE owner occupied
|
|
|
1,714
|
|
|
1,714
|
|
|
|
|
|
2,482
|
|
|
24
|
|
CRE non-owner occupied
|
|
|
4,579
|
|
|
6,776
|
|
|
|
|
|
5,195
|
|
|
40
|
|
Farmland
|
|
|
955
|
|
|
955
|
|
|
|
|
|
959
|
|
|
|
|
Construction and development
|
|
|
1,408
|
|
|
3,685
|
|
|
|
|
|
1,582
|
|
|
78
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
With an allowance recorded:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer
|
|
|
|
|
|
|
|
|
|
|
|
2
|
|
|
|
|
Residential real estate
|
|
|
|
|
|
|
|
|
|
|
|
40
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
$
|
587
|
|
$
|
608
|
|
|
|
|
|
1,270
|
|
|
9
|
|
Consumer
|
|
|
53
|
|
|
53
|
|
|
|
|
|
13
|
|
|
1
|
|
Residential real estate
|
|
|
626
|
|
|
815
|
|
|
|
|
|
1,085
|
|
|
25
|
|
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CRE owner occupied
|
|
|
1,714
|
|
|
1,714
|
|
|
|
|
|
2,482
|
|
|
24
|
|
CRE non-owner occupied
|
|
|
4,579
|
|
|
6,776
|
|
|
|
|
|
5,195
|
|
|
40
|
|
Farmland
|
|
|
955
|
|
|
955
|
|
|
|
|
|
959
|
|
|
|
|
Construction and development
|
|
|
1,408
|
|
|
3,685
|
|
|
|
|
|
1,582
|
|
|
78
|
|
Total
|
|
$
|
9,922
|
|
$
|
14,606
|
|
$
|
|
|
$
|
12,586
|
|
$
|
177
|
|
F-22 | ||
Pacific Financial Corporation and Subsidiary
|
December 31, 2013 and 2012 and for the three years ended December 31, 2013, 2012 and 2011
|
Notes to Consolidated Financial Statements, Dollars in Thousands Except Per Share Amounts
|
|
|
|
|
|
|
Unpaid
|
|
|
|
|
|
Average
|
|
|
Interest
|
|
|
|
|
Recorded
|
|
|
Principal
|
|
|
Related
|
|
|
Recorded
|
|
|
Income
|
|
|
|
|
Investment
|
|
|
Balance
|
|
|
Allowance
|
|
|
Investment
|
|
|
Recognized
|
|
With no related allowance recorded:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
$
|
2,219
|
|
$
|
2,219
|
|
$
|
|
|
$
|
966
|
|
$
|
30
|
|
Consumer
|
|
|
|
|
|
|
|
|
|
|
|
45
|
|
|
|
|
Residential real estate
|
|
|
868
|
|
|
1,100
|
|
|
|
|
|
756
|
|
|
17
|
|
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CRE owner occupied
|
|
|
3,134
|
|
|
3,166
|
|
|
|
|
|
1,259
|
|
|
2
|
|
CRE non-owner occupied
|
|
|
5,795
|
|
|
6,401
|
|
|
|
|
|
3,272
|
|
|
84
|
|
Farmland
|
|
|
976
|
|
|
976
|
|
|
|
|
|
195
|
|
|
|
|
Construction and development
|
|
|
1,792
|
|
|
4,053
|
|
|
|
|
|
2,707
|
|
|
81
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
With an allowance recorded:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential real estate
|
|
|
|
|
|
|
|
|
|
|
|
97
|
|
|
|
|
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CRE non-owner occupied
|
|
|
|
|
|
|
|
|
|
|
|
2,845
|
|
|
|
|
Construction and development
|
|
|
|
|
|
|
|
|
|
|
|
189
|
|
|
12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
|
2,219
|
|
|
2,219
|
|
|
|
|
|
966
|
|
|
30
|
|
Consumer
|
|
|
|
|
|
|
|
|
|
|
|
45
|
|
|
|
|
Residential real estate
|
|
|
868
|
|
|
1,100
|
|
|
|
|
|
853
|
|
|
17
|
|
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CRE owner occupied
|
|
|
3,134
|
|
|
3,166
|
|
|
|
|
|
1,259
|
|
|
2
|
|
CRE non-owner occupied
|
|
|
5,795
|
|
|
6,401
|
|
|
|
|
|
6,117
|
|
|
84
|
|
Farmland
|
|
|
976
|
|
|
976
|
|
|
|
|
|
195
|
|
|
|
|
Construction and development
|
|
|
1,792
|
|
|
4,053
|
|
|
|
|
|
2,896
|
|
|
93
|
|
Total
|
|
$
|
14,784
|
|
$
|
17,915
|
|
$
|
|
|
$
|
12,331
|
|
$
|
226
|
|
F-23 | ||
Pacific Financial Corporation and Subsidiary
|
December 31, 2013 and 2012 and for the three years ended December 31, 2013, 2012 and 2011
|
Notes to Consolidated Financial Statements, Dollars in Thousands Except Per Share Amounts
|
|
|
Current TDRs
|
|
Subsequently Defaulted TDRs
|
|
||||||||||||||
|
|
|
|
|
|
Pre-TDR
|
|
|
Post-TDR
|
|
|
|
|
|
Pre-TDR
|
|
|
Post-TDR
|
|
|
|
Number
|
|
|
Outstanding
|
|
|
Outstanding
|
|
|
Number
|
|
|
Outstanding
|
|
|
Outstanding
|
|
|
|
|
of
|
|
|
Recorded
|
|
|
Recorded
|
|
|
of
|
|
|
Recorded
|
|
|
Recorded
|
|
|
|
|
Contracts
|
|
|
Investment
|
|
|
Investment
|
|
|
Contracts
|
|
|
Investment
|
|
|
Investment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and agriculture
|
|
|
1
|
|
$
|
335
|
|
$
|
302
|
|
|
|
|
$
|
|
|
$
|
|
|
Construction & development
|
|
|
3
|
|
|
2,972
|
|
|
1,408
|
|
|
|
|
|
|
|
|
|
|
Residential real estate
|
|
|
2
|
|
|
272
|
|
|
227
|
|
|
|
|
|
|
|
|
|
|
CRE - owner occupied
|
|
|
1
|
|
|
59
|
|
|
55
|
|
|
|
|
|
|
|
|
|
|
CRE - non-owner occupied
|
|
|
1
|
|
|
2,180
|
|
|
2,096
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance (1)
|
|
|
8
|
|
$
|
5,818
|
|
$
|
4,088
|
|
|
|
|
$
|
|
|
$
|
|
|
|
(1)
|
The period end balances are inclusive of all partial paydowns and charge-offs since the modification date.
|
|
|
Current TDRs
|
|
Subsequently Defaulted TDRs
|
|
||||||||||||||
|
|
|
|
|
|
Pre-TDR
|
|
|
Post-TDR
|
|
|
|
|
|
Pre-TDR
|
|
|
Post-TDR
|
|
|
|
Number
|
|
|
Outstanding
|
|
|
Outstanding
|
|
|
Number
|
|
|
Outstanding
|
|
|
Outstanding
|
|
|
|
|
of
|
|
|
Recorded
|
|
|
Recorded
|
|
|
of
|
|
|
Recorded
|
|
|
Recorded
|
|
|
|
|
Contracts
|
|
|
Investment
|
|
|
Investment
|
|
|
Contracts
|
|
|
Investment
|
|
|
Investment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and agriculture
|
|
|
1
|
|
$
|
335
|
|
$
|
319
|
|
|
|
|
$
|
|
|
$
|
|
|
Construction & development
|
|
|
3
|
|
|
2,972
|
|
|
1,547
|
|
|
|
|
|
|
|
|
|
|
Residential real estate
|
|
|
3
|
|
|
342
|
|
|
299
|
|
|
|
|
|
|
|
|
|
|
CRE - owner occupied
|
|
|
1
|
|
|
59
|
|
|
57
|
|
|
|
|
|
|
|
|
|
|
CRE - non-owner occupied
|
|
|
1
|
|
|
2,180
|
|
|
2,152
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance
|
|
|
9
|
|
$
|
5,888
|
|
$
|
4,374
|
|
|
|
|
$
|
|
|
$
|
|
|
F-24 | ||
Pacific Financial Corporation and Subsidiary
|
December 31, 2013 and 2012 and for the three years ended December 31, 2013, 2012 and 2011
|
Notes to Consolidated Financial Statements, Dollars in Thousands Except Per Share Amounts
|
|
|
|
Net Unrealized
|
|
|
|
|
|
|
|
|
|
|
Gains and Losses
|
|
|
|
|
|
|
|
|
|
|
on Investment
|
|
|
Defined Benefit
|
|
|
|
|
|
|
|
Securities
|
|
|
Plans
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, January 1, 2013
|
|
$
|
956
|
|
$
|
(535)
|
|
$
|
421
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive loss before reclassifications
|
|
|
(1,632)
|
|
|
85
|
|
|
(1,547)
|
|
Amounts reclassified from AOCI
|
|
|
(243)
|
|
|
|
|
|
(243)
|
|
Net current period other comprehensive income (loss)
|
|
|
(1,875)
|
|
|
85
|
|
|
(1,790)
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2013
|
|
$
|
(919)
|
|
$
|
(450)
|
|
$
|
(1,369)
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, January 1, 2012
|
|
$
|
420
|
|
$
|
(665)
|
|
$
|
(245)
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive loss before reclassifications
|
|
|
556
|
|
|
130
|
|
|
686
|
|
Amounts reclassified from AOCI
|
|
|
(20)
|
|
|
|
|
|
(20)
|
|
Net current period other comprehensive income (loss)
|
|
|
536
|
|
|
130
|
|
|
666
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2012
|
|
$
|
956
|
|
$
|
(535)
|
|
$
|
421
|
|
Details about Accumulated
|
|
|
|
|
|
|
Other Comprehensive Income
|
|
|
Amount Reclassified
|
|
Affected Line Item in the Statement Where
|
|
Components
|
|
|
from AOCI
|
|
Net Income is Presented
|
|
|
|
|
Twelve Months Ended
|
|
|
|
|
|
|
December 31, 2013
|
|
|
|
Net Unrealized Gains and Losses on Investment Securities
|
|
$
|
(405)
|
|
Gain on sales of investments available for sale
|
|
|
|
|
37
|
|
Net OTTI losses
|
|
|
|
|
125
|
|
Income tax expense
|
|
|
|
$
|
(243)
|
|
Net of tax
|
|
F-25 | ||
Pacific Financial Corporation and Subsidiary
|
December 31, 2013 and 2012 and for the three years ended December 31, 2013, 2012 and 2011
|
Notes to Consolidated Financial Statements, Dollars in Thousands Except Per Share Amounts
|
|
|
|
Before Tax
|
|
|
Tax Effect
|
|
|
Net of Tax
|
|
Twelve Months Ended December 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net unrealized losses on investment securities:
|
|
|
|
|
|
|
|
|
|
|
Net unrealized losses arising during the period
|
|
$
|
(2,473)
|
|
$
|
(841)
|
|
$
|
(1,632)
|
|
Less: reclassification adjustment for net gains including OTTI losses realized in net income
|
|
|
(368)
|
|
|
(125)
|
|
|
(243)
|
|
Net unrealized losses on investment securities
|
|
|
(2,841)
|
|
|
(966)
|
|
|
(1,875)
|
|
Defined Benefit Plans:
|
|
|
|
|
|
|
|
|
|
|
Amortization of unrecognized prior service costs and net
actuarial gains/losses |
|
|
129
|
|
|
44
|
|
|
85
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Comprehensive Loss
|
|
$
|
(2,712)
|
|
$
|
(922)
|
|
$
|
(1,790)
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net unrealized gains on investment securities:
|
|
|
|
|
|
|
|
|
|
|
Net unrealized gains arising during the period
|
|
$
|
842
|
|
$
|
286
|
|
$
|
556
|
|
Less: reclassification adjustment for net gains realized in net income
|
|
|
30
|
|
|
10
|
|
|
20
|
|
Net unrealized gains on investment securities
|
|
|
812
|
|
|
276
|
|
|
536
|
|
Defined Benefit Plans:
|
|
|
|
|
|
|
|
|
|
|
Amortization of unrecognized prior service costs and net
actuarial gains/losses |
|
|
197
|
|
|
67
|
|
|
130
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Comprehensive Income
|
|
$
|
1,009
|
|
$
|
343
|
|
$
|
666
|
|
|
|
2013
|
|
2012
|
|
||
|
|
|
|
|
|
|
|
Land and premises
|
|
$
|
19,859
|
|
$
|
17,999
|
|
Equipment, furniture and fixtures
|
|
|
8,142
|
|
|
7,648
|
|
Construction in progress
|
|
|
167
|
|
|
159
|
|
|
|
|
28,168
|
|
|
25,806
|
|
Less accumulated depreciation and amortization
|
|
|
11,378
|
|
|
11,213
|
|
|
|
|
|
|
|
|
|
Total premises and equipment
|
|
$
|
16,790
|
|
$
|
14,593
|
|
F-26 | ||
|
2014
|
|
$
|
461
|
|
2015
|
|
|
397
|
|
2016
|
|
|
236
|
|
2017
|
|
|
152
|
|
2018
|
|
|
157
|
|
|
|
|
|
|
Total minimum payments required
|
|
$
|
1,403
|
|
|
|
2013
|
|
2012
|
|
||
|
|
|
|
|
|
|
|
Balance at beginning of year
|
|
$
|
4,679
|
|
$
|
7,725
|
|
Additions
|
|
|
1,756
|
|
|
3,082
|
|
Dispositions
|
|
|
(2,718)
|
|
|
(4,814)
|
|
Fair value write-downs
|
|
|
(946)
|
|
|
(1,314)
|
|
|
|
|
|
|
|
|
|
Balance at end of year
|
|
$
|
2,771
|
|
$
|
4,679
|
|
|
|
2013
|
|
2012
|
|
||
|
|
|
|
|
|
|
|
Demand deposits, non-interest bearing
|
|
$
|
145,028
|
|
$
|
115,138
|
|
NOW and money market accounts
|
|
|
262,848
|
|
|
232,607
|
|
Savings deposits
|
|
|
73,412
|
|
|
62,493
|
|
Time certificates, $100,000 or more
|
|
|
76,628
|
|
|
87,355
|
|
Other time certificates
|
|
|
49,431
|
|
|
50,650
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
607,347
|
|
$
|
548,243
|
|
F-27 | ||
2014
|
|
$
|
65,367
|
|
2015
|
|
|
25,537
|
|
2016
|
|
|
20,309
|
|
2017
|
|
|
8,288
|
|
2018
|
|
|
5,834
|
|
2019
|
|
|
724
|
|
|
|
|
|
|
Total
|
|
$
|
126,059
|
|
|
|
2013
|
|
|
2012
|
|
||
|
|
|
|
|
|
|
|
|
Amount outstanding at end of year
|
|
$
|
|
|
|
$
|
3,000
|
|
Weighted average interest rate at December 31
|
|
|
|
|
|
|
2.94
|
%
|
Maximum month-end balance during the year
|
|
|
3,000
|
|
|
|
3,000
|
|
Average balance during the year
|
|
|
303
|
|
|
|
2,697
|
|
Average interest rate during the year
|
|
|
2.94
|
%
|
|
|
2.94
|
%
|
F-28 | ||
|
|
Issuance
|
|
Preferred
|
|
Rate
|
|
Initial
|
|
|
Rate at
|
|
|
Maturity
|
|
|
Issuance Trust
|
|
Date
|
|
Security
|
|
Type
|
|
Rate
|
|
|
12/31/13
|
|
|
Date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PFC Statutory Trust I
|
|
12/2005
|
|
$
|
5,000
|
|
Variable (1)
|
|
6.39
|
%
|
|
1.69
|
%
|
|
3/2036
|
|
PFC Statutory Trust II
|
|
6/2006
|
|
$
|
8,000
|
|
Variable (1)
|
|
7.02
|
%
|
|
1.84
|
%
|
|
7/2036
|
|
|
(1)
|
The variable rate preferred securities reprice quarterly based on the three month LIBOR rate.
|
|
|
2013
|
|
2012
|
|
2011
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
$
|
586
|
|
$
|
1,237
|
|
$
|
1,148
|
|
Deferred
|
|
|
386
|
|
|
63
|
|
|
(815)
|
|
|
|
|
|
|
|
|
|
|
|
|
Total income tax benefit
|
|
$
|
972
|
|
$
|
1,300
|
|
$
|
333
|
|
|
|
|
2013
|
|
2012
|
|
|
Deferred Tax Assets
|
|
|
|
|
|
|
|
Allowance for credit losses
|
|
$
|
2,892
|
|
$
|
3,238
|
|
Deferred compensation
|
|
|
111
|
|
|
116
|
|
Supplemental executive retirement plan
|
|
|
1,039
|
|
|
922
|
|
Unrealized loss on securities available for sale
|
|
|
473
|
|
|
|
|
Loan fees/costs
|
|
|
393
|
|
|
297
|
|
OREO write-downs
|
|
|
305
|
|
|
657
|
|
OREO operating expenses
|
|
|
174
|
|
|
161
|
|
Tax credit carry-forwards
|
|
|
534
|
|
|
156
|
|
Non-accrual loan interest
|
|
|
108
|
|
|
194
|
|
OTTI write-downs
|
|
|
|
|
|
229
|
|
Other
|
|
|
170
|
|
|
96
|
|
|
|
|
|
|
|
|
|
Total deferred tax assets
|
|
|
6,199
|
|
|
6,066
|
|
F-29 | ||
Pacific Financial Corporation and Subsidiary
|
December 31, 2013 and 2012 and for the three years ended December 31, 2013, 2012 and 2011
|
Notes to Consolidated Financial Statements, Dollars in Thousands Except Per Share Amounts
|
|
|
2013
|
|
2012
|
|
||
Deferred Tax Liabilities
|
|
|
|
|
|
|
|
Depreciation
|
|
$
|
172
|
|
$
|
127
|
|
Loan fees/costs
|
|
|
1,185
|
|
|
1,150
|
|
Unrealized gain on securities available for sale
|
|
|
|
|
|
493
|
|
Prepaid expenses
|
|
|
108
|
|
|
111
|
|
FHLB dividends
|
|
|
137
|
|
|
143
|
|
Other
|
|
|
51
|
|
|
29
|
|
|
|
|
|
|
|
|
|
Total deferred tax liabilities
|
|
|
1,653
|
|
|
2,053
|
|
|
|
|
|
|
|
|
|
Net deferred tax assets
|
|
$
|
4,546
|
|
$
|
4,013
|
|
|
|
2013
|
|
Percent
|
|
|
2012
|
|
Percent
|
|
|
2011
|
|
Percent
|
|
|||
|
|
|
|
|
of Pre-tax
|
|
|
|
|
|
of Pre-tax
|
|
|
|
|
|
of Pre-tax
|
|
|
|
Amount
|
|
Income
|
|
|
Amount
|
|
Income
|
|
|
Amount
|
|
Income
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) tax at statutory rate
|
|
$
|
1,646
|
|
35.0
|
%
|
|
$
|
2,130
|
|
35.0
|
%
|
|
$
|
1,103
|
|
35.0
|
%
|
Adjustments resulting from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax-exempt income
|
|
|
(483)
|
|
(10.3)
|
|
|
|
(542)
|
|
(8.9)
|
|
|
|
(519)
|
|
(16.5)
|
|
Net earnings on life insurance
policies |
|
|
(152)
|
|
(3.2)
|
|
|
|
(178)
|
|
(2.9)
|
|
|
|
(171)
|
|
(5.4)
|
|
Low income housing tax credit
|
|
|
(101)
|
|
(2.1)
|
|
|
|
(109)
|
|
(1.8)
|
|
|
|
(108)
|
|
(3.4)
|
|
Other
|
|
|
62
|
|
1.3
|
|
|
|
(1)
|
|
0.0
|
|
|
|
28
|
|
0.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total income tax (benefit) expense
|
|
$
|
972
|
|
20.7
|
%
|
|
$
|
1,300
|
|
21.4
|
%
|
|
$
|
333
|
|
10.6
|
%
|
F-30 | ||
Pacific Financial Corporation and Subsidiary
|
December 31, 2013 and 2012 and for the three years ended December 31, 2013, 2012 and 2011
|
Notes to Consolidated Financial Statements, Dollars in Thousands Except Per Share Amounts
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Net periodic pension cost:
|
|
|
|
|
|
|
|
|
|
|
|
|
Service Cost
|
|
$
|
145
|
|
|
$
|
167
|
|
|
$
|
143
|
|
Interest Cost
|
|
|
104
|
|
|
|
106
|
|
|
|
97
|
|
Amortization of prior service cost
|
|
|
90
|
|
|
|
90
|
|
|
|
90
|
|
Amortization of net (gain)/loss
|
|
|
22
|
|
|
|
27
|
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net periodic pension cost
|
|
$
|
361
|
|
|
$
|
390
|
|
|
$
|
333
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average assumptions:
|
|
|
|
|
|
|
|
|
|
|
|
|
Discount rate
|
|
|
4.37
|
%
|
|
|
4.47
|
%
|
|
|
5.12
|
%
|
Rate of compensation increases
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
n/a
|
|
F-31 | ||
Pacific Financial Corporation and Subsidiary
|
December 31, 2013 and 2012 and for the three years ended December 31, 2013, 2012 and 2011
|
Notes to Consolidated Financial Statements, Dollars in Thousands Except Per Share Amounts
|
|
|
2013
|
|
2012
|
|
||
Change in Benefit Obligation:
|
|
|
|
|
|
|
|
Benefit obligation at beginning of year
|
|
$
|
2,342
|
|
$
|
2,082
|
|
Service cost
|
|
|
145
|
|
|
167
|
|
Interest cost
|
|
|
104
|
|
|
106
|
|
Benefits paid
|
|
|
(45)
|
|
|
|
|
Actuarial gain (loss)
|
|
|
27
|
|
|
(13)
|
|
|
|
|
|
|
|
|
|
Benefit obligation at end of year
|
|
$
|
2,573
|
|
$
|
2,342
|
|
|
|
2013
|
|
2012
|
|
||
|
|
|
|
|
|
|
|
(Gain) loss
|
|
$
|
179
|
|
$
|
173
|
|
Prior service cost
|
|
|
271
|
|
|
362
|
|
|
|
|
|
|
|
|
|
Total recognized in accumulative other comprehensive income (loss)
|
|
$
|
450
|
|
$
|
535
|
|
|
|
2013
|
|
2012
|
|
||
|
|
|
|
|
|
|
|
Projected benefit obligation
|
|
$
|
2,573
|
|
$
|
2,342
|
|
Accumulated benefit obligation
|
|
|
2,573
|
|
|
2,342
|
|
2014 2018
|
|
$
|
505
|
|
2019 2023
|
|
|
1,356
|
|
F-32 | ||
Pacific Financial Corporation and Subsidiary
|
December 31, 2013 and 2012 and for the three years ended December 31, 2013, 2012 and 2011
|
Notes to Consolidated Financial Statements, Dollars in Thousands Except Per Share Amounts
|
|
|
2013
|
|
2012
|
|
||
|
|
|
|
|
|
|
|
Commitments to extend credit
|
|
$
|
106,017
|
|
$
|
84,493
|
|
Standby letters of credit
|
|
|
1,733
|
|
|
1,975
|
|
F-33 | ||
Pacific Financial Corporation and Subsidiary
|
December 31, 2013 and 2012 and for the three years ended December 31, 2013, 2012 and 2011
|
Notes to Consolidated Financial Statements, Dollars in Thousands Except Per Share Amounts
|
Grant period ended
|
|
Expected
Life |
|
Risk Free
Interest Rate |
|
Expected
Volatility |
|
Dividend
Yield |
|
|
Average
Fair Value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2013
|
|
6.5 years
|
|
1.36
|
%
|
23.05
|
%
|
4.13
|
%
|
|
$
|
0.58
|
|
December 31, 2012
|
|
6.5 years
|
|
1.34
|
%
|
22.43
|
%
|
|
%
|
|
$
|
0.77
|
|
December 31, 2011
|
|
6.5 years
|
|
1.50
|
%
|
22.51
|
%
|
|
%
|
|
$
|
1.05
|
|
F-34 | ||
Pacific Financial Corporation and Subsidiary
|
December 31, 2013 and 2012 and for the three years ended December 31, 2013, 2012 and 2011
|
Notes to Consolidated Financial Statements, Dollars in Thousands Except Per Share Amounts
|
|
|
2013
|
|
2012
|
|
2011
|
|
|||||||||
|
|
|
|
Weighted
|
|
|
|
Weighted
|
|
|
|
Weighted
|
|
|||
|
|
|
|
Average
|
|
|
|
Average
|
|
|
|
Average
|
|
|||
|
|
|
|
Exercise
|
|
|
|
Exercise
|
|
|
|
Exercise
|
|
|||
|
|
Shares
|
|
Price
|
|
Shares
|
|
Price
|
|
Shares
|
|
Price
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at beginning of year
|
|
537,107
|
|
$
|
11.28
|
|
586,448
|
|
$
|
11.32
|
|
818,612
|
|
$
|
11.07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Granted
|
|
186,000
|
|
|
5.05
|
|
10,500
|
|
|
5.00
|
|
5,000
|
|
|
3.95
|
|
Exercised
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expired
|
|
(64,337)
|
|
|
11.36
|
|
(12,550)
|
|
|
10.44
|
|
(178,439)
|
|
|
10.10
|
|
Forfeited
|
|
(33,275)
|
|
|
9.25
|
|
(47,291)
|
|
|
10.57
|
|
(58,725)
|
|
|
10.98
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at end of year
|
|
625,495
|
|
$
|
9.53
|
|
537,107
|
|
$
|
11.28
|
|
586,448
|
|
$
|
11.32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercisable at end of year
|
|
328,845
|
|
$
|
12.95
|
|
389,827
|
|
$
|
12.98
|
|
411,708
|
|
$
|
12.93
|
|
|
|
2013
|
|
2012
|
|
||||||
|
|
|
|
Weighted
|
|
|
|
Weighted
|
|
||
|
|
|
|
Average Fair
|
|
|
|
Average Fair
|
|
||
|
|
Shares
|
|
Value
|
|
Shares
|
|
Value
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
Non-vested beginning of period
|
|
147,280
|
|
$
|
0.31
|
|
174,740
|
|
$
|
0.37
|
|
Granted
|
|
186,000
|
|
|
0.57
|
|
10,500
|
|
|
0.77
|
|
Vested
|
|
(17,875)
|
|
|
0.32
|
|
(32,050)
|
|
|
0.83
|
|
Forfeited
|
|
(18,755)
|
|
|
0.40
|
|
(5,910)
|
|
|
0.27
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-vested end of period
|
|
296,650
|
|
$
|
0.47
|
|
147,280
|
|
$
|
0.31
|
|
F-35 | ||
Pacific Financial Corporation and Subsidiary
|
December 31, 2013 and 2012 and for the three years ended December 31, 2013, 2012 and 2011
|
Notes to Consolidated Financial Statements, Dollars in Thousands Except Per Share Amounts
|
|
|
|
Options Outstanding
|
|
Options Exercisable
|
|
||||||||||
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
|
|
|
average
|
|
|
Weighted
|
|
|
|
average
|
|
|
Weighted
|
|
|
|
|
|
|
remaining
|
|
|
average
|
|
|
|
remaining
|
|
|
average
|
|
Range of
|
|
|
|
|
contractual
|
|
|
exercise
|
|
|
|
contractual
|
|
|
exercise
|
|
exercise prices
|
|
|
Number
|
|
life (years)
|
|
|
price
|
|
Number
|
|
life (years)
|
|
|
price
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.00 11.10
|
|
|
361,000
|
|
7.6
|
|
$
|
5.94
|
|
64,350
|
|
6.0
|
|
$
|
6.92
|
|
11.11 12.49
|
|
|
26,125
|
|
4.0
|
|
|
12.11
|
|
26,125
|
|
4.0
|
|
|
12.11
|
|
12.50 14.74
|
|
|
125,675
|
|
2.0
|
|
|
14.29
|
|
125,675
|
|
2.0
|
|
|
14.29
|
|
14.75 16.00
|
|
|
112,695
|
|
1.0
|
|
|
15.10
|
|
112,695
|
|
1.0
|
|
|
15.10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
625,495
|
|
5.1
|
|
$
|
9.53
|
|
328,845
|
|
2.6
|
|
$
|
12.95
|
|
|
|
|
|
|
|
|
Weighted average
|
|
|
|
|
|
Weighted average
|
|
remaining contractual
|
|
|
|
|
Shares
|
|
grant price
|
|
terms (in years)
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding, January 1, 2013
|
|
16,059
|
|
|
|
|
|
|
Granted
|
|
35,476
|
|
$
|
4.93
|
|
|
|
Forfeited
|
|
(1,511)
|
|
|
|
|
|
|
Outstanding, December 31, 2013
|
|
50,024
|
|
$
|
4.93
|
|
2.0
|
|
|
|
|
|
|
|
|
|
|
Outstanding, January 1, 2012
|
|
|
|
|
|
|
|
|
Granted
|
|
16,604
|
|
$
|
4.43
|
|
|
|
Forfeited
|
|
(545)
|
|
|
|
|
|
|
Outstanding, December 31, 2012
|
|
16,059
|
|
$
|
4.43
|
|
2.5
|
|
F-36 | ||
Pacific Financial Corporation and Subsidiary
|
December 31, 2013 and 2012 and for the three years ended December 31, 2013, 2012 and 2011
|
Notes to Consolidated Financial Statements, Dollars in Thousands Except Per Share Amounts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
To be Well
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Under Prompt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Adequacy
|
|
|
|
|
|
|
Corrective Action
|
|
|
|
|
|
|
|
Actual
|
|
|
|
|
|
|
Purposes
|
|
|
|
|
|
|
Provisions
|
|
|
|
|
|
|
|
Amount
|
|
|
Ratio
|
|
|
|
Amount
|
|
|
Ratio
|
|
|
|
Amount
|
|
|
Ratio
|
|
December 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tier 1 capital (to average assets):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company
|
|
$
|
67,856
|
|
|
9.83
|
%
|
|
$
|
27,604
|
|
|
4.00
|
%
|
|
|
NA
|
|
|
NA
|
|
Bank
|
|
|
67,420
|
|
|
9.77
|
|
|
|
27,591
|
|
|
4.00
|
|
|
$
|
34,489
|
|
|
5.00
|
%
|
Tier 1 capital (to risk-weighted assets):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company
|
|
|
67,856
|
|
|
12.85
|
|
|
|
21,119
|
|
|
4.00
|
|
|
|
NA
|
|
|
NA
|
|
Bank
|
|
|
67,420
|
|
|
12.78
|
|
|
|
21,101
|
|
|
4.00
|
|
|
|
31,652
|
|
|
6.00
|
|
Total capital (to risk-weighted assets):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company
|
|
|
74,477
|
|
|
14.11
|
|
|
|
42,237
|
|
|
8.00
|
|
|
|
NA
|
|
|
NA
|
|
Bank
|
|
|
74,036
|
|
|
14.03
|
|
|
|
42,202
|
|
|
8.00
|
|
|
|
52,753
|
|
|
10.00
|
|
F-37 | ||
Pacific Financial Corporation and Subsidiary
|
December 31, 2013 and 2012 and for the three years ended December 31, 2013, 2012 and 2011
|
Notes to Consolidated Financial Statements, Dollars in Thousands Except Per Share Amounts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
To be Well
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Under Prompt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Adequacy
|
|
|
|
|
|
|
Corrective Action
|
|
|
|
|
|
|
|
Actual
|
|
|
|
|
|
|
Purposes
|
|
|
|
|
|
|
Provisions
|
|
|
|
|
|
|
|
Amount
|
|
|
Ratio
|
|
|
|
Amount
|
|
|
Ratio
|
|
|
|
Amount
|
|
|
Ratio
|
|
December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tier 1 capital (to average assets):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company
|
|
$
|
66,750
|
|
|
10.69
|
%
|
|
$
|
24,975
|
|
|
4.00
|
%
|
|
|
NA
|
|
|
NA
|
|
Bank
|
|
|
66,712
|
|
|
10.69
|
|
|
|
24,966
|
|
|
4.00
|
|
|
$
|
31,207
|
|
|
5.00
|
%
|
Tier 1 capital (to risk-weighted assets):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company
|
|
|
66,750
|
|
|
14.95
|
|
|
|
17,855
|
|
|
4.00
|
|
|
|
NA
|
|
|
NA
|
|
Bank
|
|
|
66,712
|
|
|
14.96
|
|
|
|
17,842
|
|
|
4.00
|
|
|
|
26,764
|
|
|
6.00
|
|
Total capital (to risk-weighted assets):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company
|
|
|
72,376
|
|
|
16.21
|
|
|
|
35,710
|
|
|
8.00
|
|
|
|
NA
|
|
|
NA
|
|
Bank
|
|
|
72,334
|
|
|
16.22
|
|
|
|
35,685
|
|
|
8.00
|
|
|
|
44,606
|
|
|
10.00
|
|
F-38 | ||
Pacific Financial Corporation and Subsidiary
|
December 31, 2013 and 2012 and for the three years ended December 31, 2013, 2012 and 2011
|
Notes to Consolidated Financial Statements, Dollars in Thousands Except Per Share Amounts
|
|
|
Readily
|
|
|
|
Significant
|
|
|
|
|
|||
|
|
Available
|
|
Observable
|
|
Unobservable
|
|
|
|
|
|||
|
|
Market Inputs
|
|
Market Inputs
|
|
Inputs
|
|
|
|
|
|||
December 31, 2013
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities available-for-sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Government agency securities
|
|
$
|
|
|
$
|
8,811
|
|
$
|
|
|
$
|
8,811
|
|
State and municipal securities
|
|
|
|
|
|
30,741
|
|
|
1,419
|
|
|
32,160
|
|
Agency MBS
|
|
|
|
|
|
52,180
|
|
|
|
|
|
52,180
|
|
Non-agency MBS
|
|
|
|
|
|
2,011
|
|
|
|
|
|
2,011
|
|
Corporate bonds
|
|
|
|
|
|
982
|
|
|
|
|
|
982
|
|
Total
|
|
$
|
|
|
$
|
94,725
|
|
$
|
1,419
|
|
$
|
96,144
|
|
F-39 | ||
Pacific Financial Corporation and Subsidiary
|
December 31, 2013 and 2012 and for the three years ended December 31, 2013, 2012 and 2011
|
Notes to Consolidated Financial Statements, Dollars in Thousands Except Per Share Amounts
|
|
|
Readily
|
|
|
|
Significant
|
|
|
|
|
|||
|
|
Available
|
|
Observable
|
|
Unobservable
|
|
|
|
|
|||
|
|
Market Inputs
|
|
Market Inputs
|
|
Inputs
|
|
|
|
|
|||
December 31, 2012
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities available-for-sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Government agency securities
|
|
$
|
|
|
$
|
5,952
|
|
$
|
|
|
$
|
5,952
|
|
State and municipal securities
|
|
|
|
|
|
25,807
|
|
|
1,099
|
|
|
26,906
|
|
Agency MBS
|
|
|
|
|
|
22,159
|
|
|
|
|
|
22,159
|
|
Non-agency MBS
|
|
|
|
|
|
2,544
|
|
|
|
|
|
2,544
|
|
Corporate bonds
|
|
|
1,957
|
|
|
1,588
|
|
|
|
|
|
3,545
|
|
Total
|
|
$
|
1,957
|
|
$
|
58,050
|
|
$
|
1,099
|
|
$
|
61,106
|
|
|
|
2013
|
|
2012
|
|
||
|
|
|
|
|
|
|
|
Balance beginning of year
|
|
$
|
1,099
|
|
$
|
1,140
|
|
Transfers in to Level 3
|
|
|
464
|
|
|
|
|
Change in FV included in other comprehensive income
|
|
|
(144)
|
|
|
(41)
|
|
Matured
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance end of year
|
|
$
|
1,419
|
|
$
|
1,099
|
|
F-40 | ||
Pacific Financial Corporation and Subsidiary
|
December 31, 2013 and 2012 and for the three years ended December 31, 2013, 2012 and 2011
|
Notes to Consolidated Financial Statements, Dollars in Thousands Except Per Share Amounts
|
F-41 | ||
Pacific Financial Corporation and Subsidiary
|
December 31, 2013 and 2012 and for the three years ended December 31, 2013, 2012 and 2011
|
Notes to Consolidated Financial Statements, Dollars in Thousands Except Per Share Amounts
|
|
|
|
|
|
|
Significant
|
|
|
|
||||
|
|
Readily Available
|
|
Observable
|
|
Unobservable
|
|
|
|
||||
|
|
Market Inputs
|
|
Market Inputs
|
|
Inputs
|
|
|
|
||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
||||
December 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impaired loans
|
|
$
|
|
|
$
|
|
|
$
|
162
|
|
$
|
162
|
|
OREO
|
|
$
|
|
|
$
|
|
|
$
|
1,960
|
|
$
|
1,960
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impaired loans
|
|
$
|
|
|
$
|
|
|
$
|
5,053
|
|
$
|
5,053
|
|
OREO
|
|
$
|
|
|
$
|
|
|
$
|
4,807
|
|
$
|
4,807
|
|
|
|
|
|
|
|
|
Significant
|
|
|
|
|
|
Fair
|
|
Valuation
|
|
Unobservable
|
|
Range (Weighted
|
|
|
|
|
Value
|
|
Technique
|
|
Inputs
|
|
Average)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impaired loans
|
|
$
|
162
|
|
Appraised value
|
|
Adjustment for market conditions
|
|
0-10% (1.9%)
|
|
|
|
|
|
|
|
|
|
|
|
|
OREO
|
|
$
|
1,960
|
|
Appraised value
|
|
Adjustment for market conditions
|
|
0-10% (4.2%)
|
|
F-42 | ||
Pacific Financial Corporation and Subsidiary
|
December 31, 2013 and 2012 and for the three years ended December 31, 2013, 2012 and 2011
|
Notes to Consolidated Financial Statements, Dollars in Thousands Except Per Share Amounts
|
F-43 | ||
Pacific Financial Corporation and Subsidiary
|
December 31, 2013 and 2012 and for the three years ended December 31, 2013, 2012 and 2011
|
Notes to Consolidated Financial Statements, Dollars in Thousands Except Per Share Amounts
|
|
|
Carrying
|
|
|
|
|
|
|
|
Total Fair
|
|
|||||
December 31, 2013
|
|
Amount
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Value
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and interest bearing deposits in banks
|
|
$
|
35,948
|
|
$
|
35,948
|
|
$
|
|
|
$
|
|
|
$
|
35,948
|
|
Certificates of deposits held for investment
|
|
|
2,727
|
|
|
2,727
|
|
|
|
|
|
|
|
|
2,727
|
|
Securities available-for sale
|
|
|
96,144
|
|
|
|
|
|
94,725
|
|
|
1,419
|
|
|
96,144
|
|
Securities held-to-maturity
|
|
|
2,132
|
|
|
|
|
|
2,158
|
|
|
|
|
|
2,158
|
|
Federal Home Loan Bank stock
|
|
|
3,013
|
|
|
|
|
|
3,013
|
|
|
|
|
|
3,013
|
|
Loans held for sale
|
|
|
7,765
|
|
|
|
|
|
7,765
|
|
|
|
|
|
7,765
|
|
Loans, net
|
|
|
496,307
|
|
|
|
|
|
|
|
|
473,224
|
|
|
473,224
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
$
|
607,347
|
|
$
|
|
|
$
|
606,654
|
|
$
|
|
|
$
|
606,645
|
|
Short-term borrowings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term borrowings
|
|
|
10,000
|
|
|
|
|
|
10,195
|
|
|
|
|
|
10,195
|
|
Junior subordinated debentures
|
|
|
13,403
|
|
|
|
|
|
|
|
|
7,646
|
|
|
7,646
|
|
|
|
Carrying
|
|
|
|
|
|
|
|
|
|
|
Total Fair
|
|
||
December 31, 2012
|
|
Amount
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Value
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and interest bearing deposits in banks
|
|
$
|
56,855
|
|
$
|
56,855
|
|
$
|
|
|
$
|
|
|
$
|
56,855
|
|
Certificates of deposits held for investment
|
|
|
2,985
|
|
|
2,985
|
|
|
|
|
|
|
|
|
2,985
|
|
Securities available-for sale
|
|
|
61,106
|
|
|
1,957
|
|
|
58,050
|
|
|
1,099
|
|
|
61,106
|
|
Securities held-to-maturity
|
|
|
6,937
|
|
|
|
|
|
6,985
|
|
|
|
|
|
6,985
|
|
Federal Home Loan Bank stock
|
|
|
3,126
|
|
|
|
|
|
3,126
|
|
|
|
|
|
3,126
|
|
Loans held for sale
|
|
|
12,950
|
|
|
|
|
|
12,977
|
|
|
|
|
|
12,977
|
|
Loans, net
|
|
|
438,838
|
|
|
|
|
|
|
|
|
401,224
|
|
|
401,224
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term borrowings
|
|
$
|
548,243
|
|
$
|
|
|
$
|
549,504
|
|
$
|
|
|
$
|
549,504
|
|
Long-term borrowings
|
|
|
3,000
|
|
|
|
|
|
3,042
|
|
|
|
|
|
3,042
|
|
Secured borrowings
|
|
|
7,500
|
|
|
|
|
|
7,765
|
|
|
|
|
|
7,765
|
|
Junior subordinated debentures
|
|
|
13,403
|
|
|
|
|
|
|
|
|
8,318
|
|
|
8,318
|
|
F-44 | ||
Pacific Financial Corporation and Subsidiary
|
December 31, 2013 and 2012 and for the three years ended December 31, 2013, 2012 and 2011
|
Notes to Consolidated Financial Statements, Dollars in Thousands Except Per Share Amounts
|
|
|
Net Income
|
|
Shares
|
|
Per Share
|
|
|||
|
|
(Numerator)
|
|
(Denominator)
|
|
Amount
|
|
|||
Year Ended December 31, 2013
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share:
|
|
$
|
3,731
|
|
|
10,121,738
|
|
$
|
0.37
|
|
Effect of dilutive securities:
|
|
|
|
|
|
66,150
|
|
|
|
|
Diluted earnings per share:
|
|
$
|
3,731
|
|
|
10,189,888
|
|
$
|
0.37
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share:
|
|
$
|
4,785
|
|
|
10,121,853
|
|
$
|
0.47
|
|
Effect of dilutive securities:
|
|
|
|
|
|
4,391
|
|
|
|
|
Diluted earnings per share:
|
|
$
|
4,785
|
|
|
10,126,244
|
|
$
|
0.47
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2011
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share:
|
|
$
|
2,818
|
|
|
10,121,853
|
|
$
|
0.28
|
|
Effect of dilutive securities:
|
|
|
|
|
|
17
|
|
|
|
|
Diluted earnings per share:
|
|
$
|
2,818
|
|
|
10,121,870
|
|
$
|
0.28
|
|
Fair value of tangible net assets acquired
|
|
$
|
37,533
|
|
Cash paid for deposit premium
|
|
|
(976)
|
|
Liabilities assumed
|
|
|
(37,684)
|
|
|
|
|
|
|
Goodwill and intangible assets recorded
|
|
$
|
1,127
|
|
F-45 | ||
Pacific Financial Corporation and Subsidiary
|
December 31, 2013 and 2012 and for the three years ended December 31, 2013, 2012 and 2011
|
Notes to Consolidated Financial Statements, Dollars in Thousands Except Per Share Amounts
|
Cash and cash equivalents
|
|
$
|
31,941
|
|
Loans receivable
|
|
|
3,989
|
|
Premises and equipment
|
|
|
604
|
|
Goodwill and intangible assets
|
|
|
1,127
|
|
Other assets
|
|
|
23
|
|
|
|
|
|
|
Total assets
|
|
$
|
37,684
|
|
|
|
|
|
|
Deposits and accrued interest payable
|
|
$
|
37,636
|
|
Deferred tax liability
|
|
|
47
|
|
Other liabilities
|
|
|
1
|
|
Equity
|
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders’ equity
|
|
$
|
37,684
|
|
ASSETS
|
|
|
December 31, 2012
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
91,781
|
|
Investment securities
|
|
|
68,043
|
|
Loans receivable, net
|
|
|
455,777
|
|
Premises and equipment
|
|
|
15,197
|
|
Goodwill and intangible assets
|
|
|
13,677
|
|
Other assets
|
|
|
36,803
|
|
|
|
|
|
|
Total assets
|
|
$
|
681,278
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
Deposits and accrued interest payable
|
|
$
|
586,092
|
|
Borrowings
|
|
|
23,903
|
|
Other liabilities
|
|
|
4,562
|
|
Equity
|
|
|
66,721
|
|
|
|
|
|
|
Total liabilities and shareholders’ equity
|
|
$
|
681,278
|
|
F-46 | ||
Pacific Financial Corporation and Subsidiary
|
December 31, 2013 and 2012 and for the three years ended December 31, 2013, 2012 and 2011
|
Notes to Consolidated Financial Statements, Dollars in Thousands Except Per Share Amounts
|
|
|
|
Twelve Months Ended
|
|
|
|
|
December 31, 2012
|
|
|
|
|
|
|
Net interest income
|
|
$
|
25,357
|
|
Noninterest income
|
|
|
9,776
|
|
Noninterest expense
|
|
|
30,131
|
|
Income taxes
|
|
|
1,072
|
|
Net income
|
|
$
|
3,930
|
|
|
|
|
|
|
Pro forma earnings per share
|
|
|
|
|
Basic
|
|
$
|
0.39
|
|
Diluted
|
|
$
|
0.39
|
|
F-47 | ||
Pacific Financial Corporation and Subsidiary
|
December 31, 2013 and 2012 and for the three years ended December 31, 2013, 2012 and 2011
|
Notes to Consolidated Financial Statements, Dollars in Thousands Except Per Share Amounts
|
|
|
2013
|
|
2012
|
|
||
Assets
|
|
|
|
|
|
|
|
Cash
|
|
$
|
2,483
|
|
$
|
173
|
|
Investment in the Bank
|
|
|
79,701
|
|
|
79,684
|
|
Other assets
|
|
|
432
|
|
|
403
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
82,616
|
|
$
|
80,260
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders’ Equity
|
|
|
|
|
|
|
|
Junior subordinated debentures
|
|
$
|
13,403
|
|
$
|
13,403
|
|
Due to the Bank
|
|
|
|
|
|
95
|
|
Dividends payable
|
|
|
2,036
|
|
|
|
|
Other liabilities
|
|
|
40
|
|
|
41
|
|
Shareholders’ equity
|
|
|
67,137
|
|
|
66,721
|
|
Total liabilities and shareholders’ equity
|
|
$
|
82,616
|
|
$
|
80,260
|
|
|
|
2013
|
|
2012
|
|
2011
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
Dividend Income from the Bank
|
|
$
|
2,400
|
|
$
|
3,500
|
|
$
|
|
|
Other Income
|
|
|
7
|
|
|
10
|
|
|
8
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Income
|
|
|
2,407
|
|
|
3,510
|
|
|
8
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
(608)
|
|
|
(517)
|
|
|
(600)
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income tax benefit
|
|
|
1,799
|
|
|
2,993
|
|
|
(592)
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Tax Benefit
|
|
|
124
|
|
|
101
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before equity in undistributed
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income of the Bank
|
|
|
1,923
|
|
|
3,094
|
|
|
(592)
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in Undistributed Income of the Bank
|
|
|
1,808
|
|
|
1,691
|
|
|
3,410
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
3,731
|
|
$
|
4,785
|
|
$
|
2,818
|
|
F-48 | ||
Pacific Financial Corporation and Subsidiary
|
December 31, 2013 and 2012 and for the three years ended December 31, 2013, 2012 and 2011
|
Notes to Consolidated Financial Statements, Dollars in Thousands Except Per Share Amounts
|
|
|
2013
|
|
2012
|
|
2011
|
|
|||
Operating Activities
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
3,731
|
|
$
|
4,785
|
|
$
|
2,818
|
|
Adjustments to reconcile net income to
net cash provided by (used in) operating activities: |
|
|
|
|
|
|
|
|
|
|
Equity in undistributed income of subsidiary
|
|
|
(1,808)
|
|
|
(1,691)
|
|
|
(3,410)
|
|
Net change in other assets
|
|
|
(29)
|
|
|
35
|
|
|
(8)
|
|
Net change in other liabilities
|
|
|
(96)
|
|
|
(1,312)
|
|
|
352
|
|
Other - net
|
|
|
117
|
|
|
24
|
|
|
26
|
|
Net cash provided by (used in) operating activities
|
|
|
1,915
|
|
|
1,841
|
|
|
(222)
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing Activities
|
|
|
|
|
|
|
|
|
|
|
Common stock issued
|
|
|
394
|
|
|
|
|
|
|
|
Dividends paid
|
|
|
|
|
|
(2,024)
|
|
|
|
|
Net cash used in financing activities
|
|
|
394
|
|
|
(2,024)
|
|
|
|
|
Net decrease in cash
|
|
|
2,309
|
|
|
(183)
|
|
|
(222)
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
|
|
|
|
|
|
|
|
|
Beginning of year
|
|
|
173
|
|
|
356
|
|
|
578
|
|
|
|
|
|
|
|
|
|
|
|
|
End of year
|
|
$
|
2,483
|
|
$
|
173
|
|
$
|
356
|
|
F-49 | ||
|
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
|
||||
Year Ended December 31, 2013
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
$
|
6,271
|
|
$
|
6,600
|
|
$
|
6,605
|
|
$
|
6,814
|
|
Interest expense
|
|
|
689
|
|
|
648
|
|
|
590
|
|
|
563
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
|
|
|
5,582
|
|
|
5,952
|
|
|
6,015
|
|
|
6,251
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for (recapture of) credit losses
|
|
|
|
|
|
(450)
|
|
|
|
|
|
|
|
Non-interest income
|
|
|
2,626
|
|
|
3,175
|
|
|
2,232
|
|
|
1,922
|
|
Non-interest expenses
|
|
|
7,419
|
|
|
7,872
|
|
|
7,089
|
|
|
7,122
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
789
|
|
|
1,705
|
|
|
1,158
|
|
|
1,051
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes
|
|
|
88
|
|
|
373
|
|
|
249
|
|
|
262
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
701
|
|
$
|
1,332
|
|
$
|
909
|
|
$
|
789
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
..07
|
|
$
|
..13
|
|
$
|
..09
|
|
$
|
..08
|
|
Diluted
|
|
|
..07
|
|
|
..13
|
|
|
..09
|
|
|
..08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
$
|
7,034
|
|
$
|
7,037
|
|
$
|
6,751
|
|
$
|
6,673
|
|
Interest expense
|
|
|
984
|
|
|
907
|
|
|
829
|
|
|
764
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
|
|
|
6,050
|
|
|
6,130
|
|
|
5,922
|
|
|
5,909
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for (recapture of) credit losses
|
|
|
100
|
|
|
300
|
|
|
|
|
|
(1,500)
|
|
Non-interest income
|
|
|
1,848
|
|
|
2,409
|
|
|
2,443
|
|
|
2,691
|
|
Non-interest expenses
|
|
|
6,599
|
|
|
6,910
|
|
|
7,070
|
|
|
7,838
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
1,199
|
|
|
1,329
|
|
|
1,295
|
|
|
2,262
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes
|
|
|
181
|
|
|
256
|
|
|
280
|
|
|
583
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
1,018
|
|
$
|
1,073
|
|
$
|
1,015
|
|
$
|
1,679
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
..10
|
|
$
|
..11
|
|
$
|
..10
|
|
$
|
..16
|
|
Diluted
|
|
|
..10
|
|
|
..11
|
|
|
..10
|
|
|
..16
|
|
F-50 | ||
|
PACIFIC FINANCIAL CORPORATION
|
|
(Registrant)
|
|
|
|
/s/ Dennis A. Long
|
|
Dennis A. Long, President and CEO
|
Principal Executive Officer and Director
|
|
Principal Financial and Accounting Officer
|
|
|
|
|
|
|
/s/ Dennis A. Long
|
|
/s/ Douglas N. Biddle
|
Dennis A. Long, President and CEO and Director
|
|
Douglas N. Biddle, Treasurer
|
|
|
|
Remaining Directors
|
|
|
|
|
|
/s/ Gary C. Forcum
|
|
/s/ John Van Dijk
|
Gary C. Forcum (Chairman of the Board)
|
|
John Van Dijk
|
|
|
|
/s/ Randy W. Rognlin
|
|
/s/ Edwin Ketel
|
Randy W. Rognlin
|
|
Edwin Ketel
|
|
|
|
/s/ Randy Rust
|
|
/s/ Dwayne Carter
|
Randy Rust
|
|
Dwayne Carter
|
|
|
|
/s/ Douglas M. Schermer
|
|
/s/ Susan C. Freese
|
Douglas M. Schermer
|
|
Susan C. Freese
|
|
|
|
/s/ Denise Portmann
|
|
/s/ Lori Reece
|
Denise Portmann
|
|
Lori Reece
|
63 | ||
EXHIBIT NO.
|
|
EXHIBIT
|
|
|
|
3.1
|
|
Restated Articles of Incorporation. Incorporated by reference to Exhibit 3.2 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2000.
|
3.2
|
|
Bylaws. Incorporated by reference to Exhibit 2b to Form 8-A filed by the Company and declared effective on March 7, 2000 (Registration No. 000-29329).
|
4.1
|
|
Form of Warrant to purchase shares of Common Stock issued to Ithan Creek Master Investors (Cayman) L.P. (the Purchaser). Incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K dated August 25, 2009 (the 2009 8-K).
|
4.2
|
|
Form of Warrant to purchase shares of Common Stock issued to investors in 2009 private placement other than the Purchaser referred to in Exhibit 4.1. Incorporated by reference to Exhibit 4.2 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2009.
|
10.1
|
|
Amended and Restated Employment Agreement with Dennis A. Long dated December 29, 2008. Incorporated by reference to Exhibit 10.1 of the Company's Annual Report on Form 10-K for the year ended December 31, 2008 (the 2008 10-K).*
|
10.2
|
|
First Amendment to Amended and Restated Employment Agreement with Dennis A. Long dated January 11, 2013. Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K dated January 11, 2013.*
|
10.3
|
|
Amended and Restated Employment Agreement with Bruce D. MacNaughton dated December 29, 2008. Incorporated by reference to Exhibit 10.3 to the 2008 10-K.*
|
10.4
|
|
First Amendment to Amended and Restated Employment Agreement with Bruce D. MacNaughton dated January 11, 2013. Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K dated January 11, 2013.*
|
10.5
|
|
Amended and Restated Employment Agreement with Denise Portmann dated December 29, 2008. Incorporated by reference to Exhibit 10.4 to the 2008 10-K.*
|
10.6
|
|
First Amendment to Amended and Restated Employment Agreement with Denise J. Portmann dated January 11, 2013. Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K dated January 11, 2013.*
|
10.7
|
|
Employment Agreement with Douglas N. Biddle dated February 10, 2014. Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K dated February 10, 2014.
|
10.8
|
|
2000 Stock Incentive Compensation Plan, as amended (the 2000 Plan). Incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2007 (the March 2007 10-Q).*
|
10.9
|
|
Forms of stock option agreements under the 2000 Plan. Incorporated by reference to Exhibits 10.2 and 10.3 to the March 2007 10-Q.*
|
10.10
|
|
Supplemental Executive Retirement Plan effective January 1, 2007. Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K dated March 13, 2008 (the March 2008 8-K).*
|
10.11
|
|
Individual Participation Agreement (SERP) dated March 13, 2008, between the Company and Dennis A. Long. Incorporated by reference to Exhibit 10.2 to the March 2008 8-K.*
|
10.12
|
|
Individual Participation Agreement (SERP) dated March 13, 2008, between the Company and John Van Dijk. Incorporated by reference to Exhibit 10.3 to the March 2008 8-K.*
|
10.13
|
|
Individual Participation Agreement (SERP) dated March 13, 2008, between the Company and Bruce MacNaughton. Incorporated by reference to Exhibit 10.4 to the March 2008 8-K.*
|
10.14
|
|
Individual Participation Agreement (SERP) dated March 13, 2008, between the Company and Denise Portmann. Incorporated by reference to Exhibit 10.5 to the March 2008 8-K.*
|
10.15
|
|
Pacific Financial Corporation Annual Incentive Compensation Plan, approved March 9, 2011. Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated March 9, 2011.*
|
10.16
|
|
Pacific Financial Corporation Amended and Restated 2011 Equity Incentive Plan. Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2013
|
10.17
|
|
Forms of nonqualified option, incentive option and restricted unit award statements for use under the 2011 Plan.*
|
21
|
|
Subsidiaries of Registrant
|
23.1
|
|
Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm
|
31.1
|
|
Certification of Chief Executive Officer Pursuant to Rule 13a-14(a)
|
31.2
|
|
Certification of Chief Financial Officer Pursuant to Rule 13a-14(a)
|
32
|
|
Certification Pursuant to 18 U.S.C. 1350
|
64 | ||