UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
x
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QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended March 31, 2012
OR
¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from to
LAPORTE
BANCORP, INC.
(Exact name of Registrant as Specified in Its Charter)
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Federal
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26-1231235
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(State or Other Jurisdiction of
Incorporation or Organization)
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001-33733
(Commission File Number)
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(I.R.S. Employer
Identification Number)
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710 Indiana Avenue
La Porte, IN 46350
(219) 362-7511
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrants Principal Executive Officers)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90
days. YES
x
NO
¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule
405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such
files). YES
x
NO
¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer, or a smaller reporting company. See definition of large accelerated
filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.
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Large accelerated filer
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¨
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Accelerated filer
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¨
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Non-accelerated filer
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¨
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Smaller reporting company
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x
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act). YES
¨
NO
x
Number of shares of common stock outstanding at May 11, 2012: 4,660,871
TABLE OF CONTENTS
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Page
Number
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PART I FINANCIAL INFORMATION
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Item 1.
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Consolidated Financial Statements LaPorte Bancorp, Inc.
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Consolidated Balance Sheets,
March 31, 2012 (Unaudited) and December 31, 2011
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3
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Consolidated Statements of Income,
Three Months Ended March 31, 2012 and 2011
(Unaudited)
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4
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Consolidated Statements of Comprehensive Income,
Three Months Ended March 31, 2012 and 2011 (Unaudited)
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5
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Consolidated Statements of Changes in Shareholders Equity,
Three Months Ended March 31, 2012 and 2011
(Unaudited)
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6
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Consolidated Statements of Cash Flows,
Three Months Ended March 31, 2012 and 2011
(Unaudited)
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7
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Notes to Consolidated Financial Statements (Unaudited)
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8
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Item 2.
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Managements Discussion and Analysis of Financial Condition and Results of Operations
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39
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Item 3.
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Quantitative and Qualitative Disclosures About Market Risk
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50
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Item 4.
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Controls and Procedures
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51
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PART II OTHER INFORMATION
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Item 1.
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Legal Proceedings
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52
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Item 1A.
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Risk Factors
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52
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Item 2.
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Unregistered Sales of Equity Securities and Use of Proceeds
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52
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Item 3.
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Defaults Upon Senior Securities
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52
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Item 4.
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Mine Safety Disclosures
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52
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Item 5.
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Other Information
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52
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Item 6.
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Exhibits
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53
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Signatures
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54
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2
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
LAPORTE BANCORP, INC.
CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except per share data)
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March 31,
2012
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December 31,
2011
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(Unaudited)
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ASSETS
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Cash and due from financial institutions
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$
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5,668
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$
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8,146
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Interest-earning time deposits in other financial institutions
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2,450
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Securities available for sale
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125,185
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131,974
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Federal Home Loan Bank (FHLB) stock, at cost (restricted)
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3,817
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3,817
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Loans held for sale, at fair value
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3,532
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3,049
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Loans, net of allowance for loan losses of $3,964 at March 31, 2012, $3,772 at December 31, 2011
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294,576
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295,359
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Mortgage servicing rights
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342
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348
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Other real estate owned
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756
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1,012
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Premises and equipment, net
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9,770
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9,840
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Goodwill
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8,431
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8,431
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Other intangible assets
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444
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474
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Bank owned life insurance
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10,970
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10,876
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Accrued interest receivable and other assets
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3,369
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3,819
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Total assets
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$
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469,310
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$
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477,145
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LIABILITIES AND SHAREHOLDERS EQUITY
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Deposits
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Non-interest bearing
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$
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42,114
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$
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38,977
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Interest bearing
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299,757
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294,583
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Total deposits
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341,871
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333,560
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Federal Home Loan Bank advances
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60,007
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72,021
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Subordinated debentures
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5,155
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5,155
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Federal Deposit Insurance Corporation guaranteed unsecured borrowings
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4,981
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Accrued interest payable and other liabilities
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5,687
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5,725
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Total liabilities
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412,719
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421,442
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Shareholders equity
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Preferred stock, no par value; 1,000,000 shares authorized; none issued
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Common stock, $0.01 par value; 19,000,000 shares authorized; 4,871,801 shares issued; and 4,660,871 shares outstanding at
March 31, 2012 and December 31, 2011
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49
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49
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Additional paid-in capital
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21,279
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21,221
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Surplus
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770
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770
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Retained earnings
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35,008
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34,267
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Accumulated other comprehensive income, net of tax of $797 at March 31, 2012 and $1,046 at December 31,
2011
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2,096
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2,031
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Treasury stock, at cost (210,930 shares at March 31, 2012 and December 31, 2011)
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(1,278
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)
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(1,278
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)
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Unearned Employee Stock Ownership Plan (ESOP) shares
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(1,334
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)
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(1,357
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)
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Total shareholders equity
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56,590
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55,703
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Total liabilities and shareholders equity
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$
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469,310
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$
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477,145
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See accompanying notes to consolidated financial statements (unaudited)
3
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(dollars in thousands, except per share data)
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Three Months Ended March 31,
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2012
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2011
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Interest and dividend income
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Loans, including fees
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$
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4,109
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$
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3,898
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Taxable securities
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503
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575
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Tax exempt securities
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352
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364
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FHLB stock
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28
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26
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Other interest income
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5
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11
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Total interest and dividend income
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4,997
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4,874
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Interest expense
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Deposits
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798
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1,083
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Federal Home Loan Bank advances
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322
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395
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Subordinated debentures
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70
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69
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FDIC guaranteed unsecured borrowings
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37
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50
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Federal funds purchased and other short-term borrowings
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1
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Total interest expense
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1,228
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1,597
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Net interest income
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3,769
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3,277
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Provision for loan losses
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228
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28
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Net interest income after provision for loan losses
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3,541
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3,249
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Noninterest income
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Service charges on deposits
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107
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136
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ATM and debit card fees
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97
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93
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Earnings on life insurance, net
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94
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96
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Net gains on mortgage banking activities
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222
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|
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|
96
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Loan servicing fees, net
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12
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|
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|
13
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Net gains on sales and calls of securities
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109
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25
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Losses on other assets
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(150
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)
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|
|
(21
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)
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Other income
|
|
|
98
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|
|
|
103
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|
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Total noninterest income
|
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|
589
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541
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Noninterest expense
|
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|
|
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Salaries and employee benefits
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1,658
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|
|
|
1,521
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Occupancy and equipment
|
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|
489
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|
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|
505
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Data processing
|
|
|
127
|
|
|
|
108
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|
Advertising
|
|
|
74
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|
|
|
39
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|
Bank examination fees
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|
81
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|
|
82
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|
Amortization of intangibles
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|
30
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|
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|
58
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|
FDIC insurance
|
|
|
84
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|
|
133
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|
Collection and other real estate owned
|
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|
28
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|
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|
34
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Other expenses
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|
385
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|
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|
362
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|
|
|
|
|
|
|
|
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Total noninterest expense
|
|
|
2,956
|
|
|
|
2,842
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
1,174
|
|
|
|
948
|
|
|
|
|
Income tax expense
|
|
|
247
|
|
|
|
170
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|
|
|
|
|
|
|
|
|
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Net income
|
|
$
|
927
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|
$
|
778
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|
|
|
|
|
|
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Earnings per share (Note 3):
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Basic
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$
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0.20
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$
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0.18
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Diluted
|
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0.20
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0.18
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See accompanying notes to consolidated financial statements (unaudited)
4
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE BANCORP, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)
(dollars in thousands, except per share data)
|
|
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|
|
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Three Months Ended March 31,
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|
2012
|
|
|
2011
|
|
Net income
|
|
$
|
927
|
|
|
$
|
778
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|
|
|
|
Other comprehensive income:
|
|
|
|
|
|
|
|
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Unrealized gains/losses on securities
|
|
|
|
|
|
|
|
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Unrealized holding gain arising during the period
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|
124
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|
|
|
581
|
|
Reclassification adjustment for gains included in net income
|
|
|
(109
|
)
|
|
|
(25
|
)
|
|
|
|
|
|
|
|
|
|
Net unrealized gains
|
|
|
15
|
|
|
|
556
|
|
Tax effect
|
|
|
(6
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)
|
|
|
(189
|
)
|
|
|
|
|
|
|
|
|
|
Net of tax
|
|
|
9
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|
|
|
367
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|
Unrealized gains/losses on cash flow hedges
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|
|
|
|
|
|
|
|
Unrealized holding gain arising during the period
|
|
|
83
|
|
|
|
314
|
|
|
|
|
|
|
|
|
|
|
Net unrealized gains
|
|
|
83
|
|
|
|
314
|
|
Tax effect
|
|
|
(27
|
)
|
|
|
(107
|
)
|
|
|
|
|
|
|
|
|
|
Net of tax
|
|
|
56
|
|
|
|
207
|
|
|
|
|
|
|
|
|
|
|
Total other comprehensive income
|
|
|
65
|
|
|
|
574
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income
|
|
$
|
992
|
|
|
$
|
1,352
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to consolidated financial statements (unaudited)
5
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE BANCORP, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY (Unaudited)
Three months ended March 31, 2012 and 2011
(dollars in thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
Stock
|
|
|
Additional
Paid-In
Capital
|
|
|
Surplus
|
|
|
Retained
Earnings
|
|
|
Accumulated
Other
Comprehensive
Income (Loss),
Net of Tax
|
|
|
Treasury
Stock
|
|
|
Unearned
ESOP
Shares
|
|
|
Total
|
|
Balance at January 1, 2011
|
|
$
|
48
|
|
|
$
|
21,160
|
|
|
$
|
770
|
|
|
$
|
31,211
|
|
|
$
|
(550
|
)
|
|
$
|
(1,144
|
)
|
|
$
|
(1,447
|
)
|
|
$
|
50,048
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
778
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
778
|
|
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
574
|
|
|
|
|
|
|
|
|
|
|
|
574
|
|
ESOP shares earned, 2,261 shares
|
|
|
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22
|
|
|
|
21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at March 31, 2011
|
|
$
|
48
|
|
|
$
|
21,159
|
|
|
$
|
770
|
|
|
$
|
31,989
|
|
|
$
|
24
|
|
|
$
|
(1,144
|
)
|
|
$
|
(1,425
|
)
|
|
$
|
51,421
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at January 1, 2012
|
|
$
|
49
|
|
|
$
|
21,221
|
|
|
$
|
770
|
|
|
$
|
34,267
|
|
|
$
|
2,031
|
|
|
$
|
(1,278
|
)
|
|
$
|
(1,357
|
)
|
|
$
|
55,703
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
927
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
927
|
|
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
65
|
|
|
|
|
|
|
|
|
|
|
|
65
|
|
Cash dividends on common stock ($0.04 per share)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(186
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(186
|
)
|
ESOP shares earned, 2,261 shares
|
|
|
|
|
|
|
(3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23
|
|
|
|
20
|
|
Stock award and option expense
|
|
|
|
|
|
|
61
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
61
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at March 31, 2012
|
|
$
|
49
|
|
|
$
|
21,279
|
|
|
$
|
770
|
|
|
$
|
35,008
|
|
|
$
|
2,096
|
|
|
$
|
(1,278
|
)
|
|
$
|
(1,334
|
)
|
|
$
|
56,590
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to consolidated financial statements (unaudited)
6
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE BANCORP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(dollars in thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
2012
|
|
|
2011
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
927
|
|
|
$
|
778
|
|
Adjustments to reconcile net income to net cash from operating activities:
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
150
|
|
|
|
169
|
|
Provision for loan losses
|
|
|
228
|
|
|
|
28
|
|
Net gains on securities
|
|
|
(109
|
)
|
|
|
(25
|
)
|
Net gains on sales of loans
|
|
|
(204
|
)
|
|
|
(80
|
)
|
Originations of loans held for sale
|
|
|
(10,890
|
)
|
|
|
(6,464
|
)
|
Proceeds from sales of loans held for sale
|
|
|
10,611
|
|
|
|
10,099
|
|
Recognition of mortgage servicing rights
|
|
|
(19
|
)
|
|
|
(16
|
)
|
Amortization of mortgage servicing rights
|
|
|
29
|
|
|
|
28
|
|
Net change in loan servicing rights valuation allowance
|
|
|
(4
|
)
|
|
|
|
|
Net losses on sales of other real estate owned
|
|
|
14
|
|
|
|
11
|
|
Write down of other real estate owned
|
|
|
137
|
|
|
|
2
|
|
Earnings on life insurance, net
|
|
|
(94
|
)
|
|
|
(96
|
)
|
Amortization of intangible assets
|
|
|
30
|
|
|
|
58
|
|
ESOP compensation expense
|
|
|
20
|
|
|
|
21
|
|
Stock compensation expense
|
|
|
61
|
|
|
|
|
|
Amortization of issuance costs of unsecured borrowings
|
|
|
19
|
|
|
|
16
|
|
Change in assets and liabilities:
|
|
|
|
|
|
|
|
|
Accrued interest receivable and other assets
|
|
|
417
|
|
|
|
393
|
|
Accrued interest payable and other liabilities
|
|
|
45
|
|
|
|
123
|
|
|
|
|
|
|
|
|
|
|
Net cash from operating activities
|
|
|
1,368
|
|
|
|
5,045
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
Net change in loans
|
|
|
436
|
|
|
|
8,017
|
|
Proceeds from sales of other real estate owned
|
|
|
224
|
|
|
|
150
|
|
Proceeds from maturities, calls and principal repayments of securities available for sale
|
|
|
7,388
|
|
|
|
3,922
|
|
Proceeds from sales of securities available for sale
|
|
|
12,668
|
|
|
|
923
|
|
Purchase of interest-bearing time deposits at other financial institutions
|
|
|
(2,450
|
)
|
|
|
|
|
Purchases of securities available for sale
|
|
|
(13,143
|
)
|
|
|
(14,319
|
)
|
Premises and equipment expenditures, net
|
|
|
(80
|
)
|
|
|
(40
|
)
|
|
|
|
|
|
|
|
|
|
Net cash from investing activities
|
|
|
5,043
|
|
|
|
(1,338
|
)
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
Net change in deposits
|
|
|
8,311
|
|
|
|
6,051
|
|
Net change in FHLB advances
|
|
|
(12,014
|
)
|
|
|
(8,831
|
)
|
Dividends paid on common stock
|
|
|
(186
|
)
|
|
|
|
|
Repayment of FDIC guaranteed unsecured borrowing
|
|
|
(5,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash from financing activities
|
|
|
(8,889
|
)
|
|
|
(2,780
|
)
|
|
|
|
|
|
|
|
|
|
Net change in cash and cash equivalents
|
|
|
(2,478
|
)
|
|
|
927
|
|
Cash and cash equivalents at beginning of period
|
|
|
8,146
|
|
|
|
5,868
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period
|
|
$
|
5,668
|
|
|
$
|
6,795
|
|
|
|
|
|
|
|
|
|
|
Supplemental cash flow information:
|
|
|
|
|
|
|
|
|
Cash paid during the period for:
|
|
|
|
|
|
|
|
|
Interest paid
|
|
$
|
1,270
|
|
|
$
|
1,632
|
|
Income taxes paid
|
|
|
|
|
|
|
|
|
Supplemental noncash disclosures:
|
|
|
|
|
|
|
|
|
Transfers from loans receivable to other real estate owned
|
|
$
|
119
|
|
|
$
|
472
|
|
See accompanying notes to consolidated financial statements (unaudited)
7
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 1 BASIS OF PRESENTATION AND CONSOLIDATION
The unaudited consolidated financial statements included herein include the accounts of LaPorte Bancorp, Inc. (the
Bancorp), its wholly owned subsidiary, The LaPorte Savings Bank (the Bank) and the Banks wholly owned subsidiary, LSB Investments, Inc., Nevada (LSB Inc.), together referred to as the Company. The
Bancorp was formed on October 12, 2007. LSB Inc. was formed on October 1, 2011 to manage a portion of the Banks investment portfolio. Intercompany transactions and balances are eliminated in consolidation.
The unaudited consolidated financial statements included herein have been prepared by management in accordance with accounting principles generally
accepted in the United States of America for interim financial statements and Article 8 of Regulation S-X of the Securities and Exchange Commission. In the opinion of management, the unaudited consolidated financial statements contain all material
adjustments (consisting of normal recurring accruals) and disclosures which are necessary in the opinion of management to make the financial statements not misleading and for a fair presentation of the financial position and results of operations
for the interim periods presented herein.
Certain information and footnote disclosures normally included in consolidated financial statements
prepared in accordance with United States generally accepted accounting principles have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, the interim consolidated financial
statements included herein should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2011 included in the Form 10-K Annual Report of LaPorte Bancorp, Inc. for the fiscal year ended
December 31, 2011.
The results for the three-month period ended March 31, 2012 may not indicate the results to be expected for the
full year ending December 31, 2012.
Reclassifications
: Some items in the prior year financial statements were reclassified to
conform to the current presentation.
NOTE 2 RECENT ACCOUNTING PRONOUNCEMENTS
In May 2011, the FASB issued an amendment to achieve common fair value measurement and disclosure requirements between U.S. and
International accounting principles. Overall, the guidance is consistent with existing U.S. accounting principles; however, there are some amendments that change a particular principle or requirement for measuring fair value or for disclosing
information about fair value measurements. The amendments in this guidance are effective for interim and annual reporting periods beginning after December 15, 2011. The effect of adopting this standard did not have a material effect on the
Companys operating results or financial condition, but the additional disclosures are included in Note 6.
In June 2011, the FASB
amended existing guidance and eliminated the option to present the components of other comprehensive income as part of the statement of changes in shareholders equity. The amendment requires that comprehensive income be presented in either a
single continuous statement or in two separate consecutive statements. The amendments in this guidance are effective as of the beginning of a fiscal reporting year, and interim periods within that year, that begins after December 15, 2011. The
adoption of this amendment changed the presentation of the statement of comprehensive income for the Company to two consecutive statements instead of presented as part of the consolidated statement of shareholders equity.
8
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE
BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 3 EARNINGS PER SHARE
Basic earnings per common share is determined by dividing net earnings available to common shareholders by the weighted average number
of common shares outstanding for the period. Employee Stock Ownership Plan (ESOP) shares are considered outstanding for this calculation unless unearned. Diluted earnings per common share is determined by dividing net earnings available
to common shareholders by the weighted average number of common shares outstanding for the period, adjusted for the dilutive effect of common share equivalents (-0- for the three months ended March 31, 2012 and 2011). Stock options for 213,678
and 0 shares for the three months ended March 31, 2012 and 2011 were not considered in computing diluted earnings per share because they were antidilutive. The factors used in the earnings per common share computation follow:
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
2012
|
|
|
Three Months Ended
March 31,
2011
|
|
Basic
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
927
|
|
|
$
|
778
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding
|
|
|
4,660,871
|
|
|
|
4,586,363
|
|
Less: Average unallocated ESOP shares
|
|
|
(134,540
|
)
|
|
|
(143,585
|
)
|
|
|
|
|
|
|
|
|
|
Average shares
|
|
|
4,526,332
|
|
|
|
4,442,778
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per common share
|
|
$
|
0.20
|
|
|
$
|
0.18
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
927
|
|
|
$
|
778
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding for basic earnings per common share
|
|
|
4,526,332
|
|
|
|
4,442,778
|
|
Add: Dilutive effects of assumed exercises of stock options
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average shares and dilutive potential common shares
|
|
|
4,526,332
|
|
|
|
4,442,778
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per common share
|
|
$
|
0.20
|
|
|
$
|
0.18
|
|
|
|
|
|
|
|
|
|
|
9
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE
BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 4 SECURITIES AVAILABLE FOR SALE
The amortized cost and fair value of available-for-sale securities and the related gross unrealized gains and losses recognized in
accumulated other comprehensive income (loss) were as follows:
March 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortized
Cost
|
|
|
Unrealized
Gains
|
|
|
Unrealized
Losses
|
|
|
Fair Value
|
|
U.S. federal agency obligations
|
|
$
|
9,154
|
|
|
$
|
389
|
|
|
$
|
(19
|
)
|
|
$
|
9,524
|
|
State and municipal
|
|
|
39,150
|
|
|
|
3,135
|
|
|
|
(1
|
)
|
|
|
42,284
|
|
Mortgage-backed securities residential
|
|
|
18,950
|
|
|
|
735
|
|
|
|
(14
|
)
|
|
|
19,671
|
|
Government agency sponsored collateralized mortgage obligations
|
|
|
49,770
|
|
|
|
1,152
|
|
|
|
(56
|
)
|
|
|
50,866
|
|
Corporate debt securities
|
|
|
2,808
|
|
|
|
50
|
|
|
|
(18
|
)
|
|
|
2,840
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
119,832
|
|
|
$
|
5,461
|
|
|
$
|
(108
|
)
|
|
$
|
125,185
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortized
Cost
|
|
|
Unrealized
Gains
|
|
|
Unrealized
Losses
|
|
|
Fair Value
|
|
U.S. federal agency obligations
|
|
$
|
12,187
|
|
|
$
|
414
|
|
|
$
|
|
|
|
$
|
12,601
|
|
State and municipal
|
|
|
40,012
|
|
|
|
3,094
|
|
|
|
|
|
|
|
43,106
|
|
Mortgage-backed securities residential
|
|
|
30,946
|
|
|
|
872
|
|
|
|
(29
|
)
|
|
|
31,789
|
|
Government agency sponsored collateralized mortgage obligations
|
|
|
43,491
|
|
|
|
1,001
|
|
|
|
(14
|
)
|
|
|
44,478
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
126,636
|
|
|
$
|
5,381
|
|
|
$
|
(43
|
)
|
|
$
|
131,974
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At March 31, 2012 and December 31, 2011, all of our mortgage-backed securities were issued by U.S.
government-sponsored enterprises and all of our collateralized mortgage obligations were issued by either U.S. government-sponsored enterprises or the U.S. Small Business Administration.
10
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE
BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 4 SECURITIES AVAILABLE FOR SALEcontinued
Securities with unrealized losses at March 31, 2012 and December 31, 2011, aggregated by
investment category and length of time that individual securities have been in a continuous unrealized loss position, are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2012
|
|
Continuing Unrealized
Loss For
Less Than 12 Months
|
|
|
Continuing Unrealized
Loss For
12 Months or More
|
|
|
Total
|
|
Description of Securities
|
|
Fair
Value
|
|
|
Unrealized
Loss
|
|
|
Fair
Value
|
|
|
Unrealized
Loss
|
|
|
Fair
Value
|
|
|
Unrealized
Loss
|
|
U.S. federal agency obligations
|
|
$
|
981
|
|
|
$
|
(19
|
)
|
|
$
|
|
|
|
$
|
|
|
|
$
|
981
|
|
|
$
|
(19
|
)
|
State and municipal
|
|
|
248
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
248
|
|
|
|
(1
|
)
|
Mortgage-backed securities Residential
|
|
|
1,049
|
|
|
|
(14
|
)
|
|
|
|
|
|
|
|
|
|
|
1,049
|
|
|
|
(14
|
)
|
Government agency sponsored collateralized mortgage obligations
|
|
|
8,886
|
|
|
|
(56
|
)
|
|
|
|
|
|
|
|
|
|
|
8,886
|
|
|
|
(56
|
)
|
Corporate debt securities
|
|
|
982
|
|
|
|
(18
|
)
|
|
|
|
|
|
|
|
|
|
|
982
|
|
|
|
(18
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total temporarily impaired
|
|
$
|
12,146
|
|
|
$
|
(108
|
)
|
|
$
|
|
|
|
$
|
|
|
|
$
|
12,146
|
|
|
$
|
(108
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2011
|
|
Continuing Unrealized
Loss For
Less Than 12 Months
|
|
|
Continuing Unrealized
Loss For
12 Months or More
|
|
|
Total
|
|
Description of Securities
|
|
Fair
Value
|
|
|
Unrealized
Loss
|
|
|
Fair
Value
|
|
|
Unrealized
Loss
|
|
|
Fair
Value
|
|
|
Unrealized
Loss
|
|
Mortgage-backed securities residential
|
|
$
|
5,646
|
|
|
$
|
(29
|
)
|
|
$
|
|
|
|
$
|
|
|
|
$
|
5,646
|
|
|
$
|
(29
|
)
|
Government agency sponsored collateralized mortgage obligations
|
|
|
2,147
|
|
|
|
(14
|
)
|
|
|
|
|
|
|
|
|
|
|
2,147
|
|
|
|
(14
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total temporarily impaired
|
|
$
|
7,793
|
|
|
$
|
(43
|
)
|
|
$
|
|
|
|
$
|
|
|
|
$
|
7,793
|
|
|
$
|
(43
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At March 31, 2012, the Company held 9 investments in debt securities which were in an unrealized loss position of
which all were in an unrealized loss position for less than twelve months. At December 31, 2011, the Company held 6 investments in debt securities which were in an unrealized loss position of which all were in an unrealized loss position for
less than twelve months. Management periodically evaluates each investment security for potential other-than-temporary impairment, relying primarily on industry analyst reports and observation of market conditions and interest rate fluctuations.
Management believes it will be able to collect all amounts due according to the contractual terms of the underlying investment securities and that the noted declines in fair value are considered temporary and due only to normal market interest rate
fluctuations. The Company does not intend to sell the securities and is not more likely than not to be required to sell these debt securities before their anticipated recovery.
11
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE
BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 4 SECURITIES AVAILABLE FOR SALEcontinued
Sales of securities available for sale for the three months ended March 31, 2012 and 2011 were as
follows:
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
|
2012
|
|
|
2011
|
|
Proceeds
|
|
$
|
12,668
|
|
|
$
|
932
|
|
Gross gains
|
|
|
121
|
|
|
|
25
|
|
Gross losses
|
|
|
(16
|
)
|
|
|
|
|
Proceeds from calls of securities available for sale during the three months ended March 31, 2012 and 2011 were
$3,275 and $45, with gross gains of $4 and $0 and gross losses of $0 and $15, respectively.
The amortized cost and fair value of debt
securities at March 31, 2012 by contractual maturity were as follows. Securities not due at a single maturity date, primarily mortgage-backed securities and collateralized mortgage obligations (CMO), are shown separately.
|
|
|
|
|
|
|
|
|
|
|
Amortized
Cost
|
|
|
Fair
Value
|
|
Due in one year or less
|
|
$
|
|
|
|
$
|
|
|
Due from one to five years
|
|
|
14,328
|
|
|
|
14,941
|
|
Due from five to ten years
|
|
|
9,940
|
|
|
|
10,832
|
|
Due after ten years
|
|
|
26,844
|
|
|
|
28,875
|
|
|
|
|
|
|
|
|
|
|
Subtotal
|
|
|
51,112
|
|
|
|
54,648
|
|
Mortgage-backed securities and CMOs
|
|
|
68,720
|
|
|
|
70,537
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
119,832
|
|
|
$
|
125,185
|
|
|
|
|
|
|
|
|
|
|
Securities pledged at March 31, 2012 and December 31, 2011 had a carrying amount of approximately $37,562 and
$33,661, respectively, and were pledged to secure public deposits, FHLB advances, short-term borrowings through the Federal Reserve Discount Window, treasury tax and loan payments and cash flow hedges.
12
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE
BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 5 LOANS
Loans at March 31, 2012 and December 31, 2011 were as follows:
|
|
|
|
|
|
|
|
|
|
|
March 31,
2012
|
|
|
December 31,
2011
|
|
Commercial
|
|
$
|
127,495
|
|
|
$
|
126,559
|
|
Mortgage
|
|
|
42,605
|
|
|
|
45,576
|
|
Mortgage warehouse
|
|
|
105,879
|
|
|
|
103,864
|
|
Residential construction
|
|
|
2,660
|
|
|
|
3,047
|
|
Indirect auto
|
|
|
1,971
|
|
|
|
2,249
|
|
Home equity
|
|
|
13,070
|
|
|
|
12,966
|
|
Consumer and other
|
|
|
4,708
|
|
|
|
4,693
|
|
|
|
|
|
|
|
|
|
|
Subtotal
|
|
|
298,388
|
|
|
|
298,954
|
|
Less: Net deferred loan (fees) costs
|
|
|
152
|
|
|
|
177
|
|
Allowance for loan losses
|
|
|
(3,964
|
)
|
|
|
(3,772
|
)
|
|
|
|
|
|
|
|
|
|
Loans, net
|
|
$
|
294,576
|
|
|
$
|
295,359
|
|
|
|
|
|
|
|
|
|
|
As of March 31, 2012, the Banks mortgage warehouse division had repurchase agreements with ten mortgage
companies. During the first quarter of 2012, the mortgage companies originated $538,161 in mortgage loans and sold $534,786 in mortgage loans. The Bank recorded interest income of $1,204 and mortgage warehouse loan fees of $167 which are included in
loan interest income and wire transfer fees of $54 which are included in noninterest income during the first quarter of 2012 attributable to the mortgage warehouse lines.
As of March 31, 2011, the Banks mortgage warehouse division had repurchase agreements with nine mortgage companies. During the first quarter of 2011, the mortgage companies originated $555,622
in mortgage loans and sold $565,767 in mortgage loans. The Bank recorded interest income of $762 and mortgage warehouse loan fees of $172 which are included in loan interest income and wire transfer fees of $56 which are included in noninterest
income during the first quarter of 2011 attributable to the mortgage warehouse lines.
13
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE
BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 5 LOANS continued
The following table presents the activity in the allowance for loan losses by portfolio segment for the
three months ended March 31, 2012 and 2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
|
Mortgage
|
|
|
Mortgage
Warehouse
|
|
|
Residential
Construction
|
|
|
Indirect
Auto
|
|
|
Home
Equity
|
|
|
Consumer
and Other
|
|
|
Unallocated
|
|
|
Total
|
|
For the three months ended March 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance
|
|
$
|
2,774
|
|
|
$
|
374
|
|
|
$
|
393
|
|
|
$
|
3
|
|
|
$
|
19
|
|
|
$
|
119
|
|
|
$
|
90
|
|
|
$
|
|
|
|
$
|
3,772
|
|
Charge-offs
|
|
|
(19
|
)
|
|
|
(21
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6
|
)
|
|
|
|
|
|
|
(46
|
)
|
Recoveries
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3
|
|
|
|
|
|
|
|
7
|
|
|
|
|
|
|
|
10
|
|
Provision
|
|
|
245
|
|
|
|
(18
|
)
|
|
|
13
|
|
|
|
1
|
|
|
|
(5
|
)
|
|
|
1
|
|
|
|
(9
|
)
|
|
|
|
|
|
|
228
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance
|
|
$
|
3,000
|
|
|
$
|
335
|
|
|
$
|
406
|
|
|
$
|
4
|
|
|
$
|
17
|
|
|
$
|
120
|
|
|
$
|
82
|
|
|
$
|
|
|
|
$
|
3,964
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended March 31, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance
|
|
$
|
3,147
|
|
|
$
|
389
|
|
|
$
|
139
|
|
|
$
|
17
|
|
|
$
|
28
|
|
|
$
|
142
|
|
|
$
|
81
|
|
|
$
|
|
|
|
$
|
3,943
|
|
Charge-offs
|
|
|
(368
|
)
|
|
|
(70
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(10
|
)
|
|
|
|
|
|
|
(448
|
)
|
Recoveries
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
|
|
|
|
|
|
6
|
|
|
|
|
|
|
|
7
|
|
Provisions
|
|
|
(144
|
)
|
|
|
110
|
|
|
|
23
|
|
|
|
|
|
|
|
(1
|
)
|
|
|
16
|
|
|
|
24
|
|
|
|
|
|
|
|
28
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance
|
|
$
|
2,635
|
|
|
$
|
429
|
|
|
$
|
162
|
|
|
$
|
17
|
|
|
$
|
28
|
|
|
$
|
158
|
|
|
$
|
101
|
|
|
$
|
|
|
|
$
|
3,530
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE
BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 5 LOANS continued
The following table presents the balance in the allowance for loan losses and the recorded investment in
loans by portfolio segment and based on impairment method as of March 31, 2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
|
Mortgage
|
|
|
Mortgage
Warehouse
|
|
|
Residential
Construction
|
|
|
Indirect
Auto
|
|
|
Home
Equity
|
|
|
Consumer
and Other
|
|
|
Unallocated
|
|
|
Total
|
|
March 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending allowance balance attributable to loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Individually evaluated for impairment
|
|
$
|
196
|
|
|
$
|
98
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
10
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
304
|
|
Collectively evaluated for impairment
|
|
|
2,804
|
|
|
|
237
|
|
|
|
406
|
|
|
|
4
|
|
|
|
17
|
|
|
|
110
|
|
|
|
82
|
|
|
|
|
|
|
|
3,660
|
|
Acquired with deteriorated credit quality
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total ending allowance
|
|
$
|
3,000
|
|
|
$
|
335
|
|
|
$
|
406
|
|
|
$
|
4
|
|
|
$
|
17
|
|
|
$
|
120
|
|
|
$
|
82
|
|
|
$
|
|
|
|
$
|
3,964
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans individually evaluated for impairment
|
|
$
|
4,980
|
|
|
$
|
1,641
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
14
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
6,635
|
|
Loans collectively evaluated for impairment
|
|
|
121,801
|
|
|
|
40,809
|
|
|
|
105,879
|
|
|
|
2,660
|
|
|
|
1,970
|
|
|
|
13,105
|
|
|
|
4,712
|
|
|
|
|
|
|
|
290,936
|
|
Loans acquired with deteriorated credit quality
|
|
|
818
|
|
|
|
151
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
969
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total ending loan balance
|
|
$
|
127,599
|
|
|
$
|
42,601
|
|
|
$
|
105,879
|
|
|
$
|
2,660
|
|
|
$
|
1,970
|
|
|
$
|
13,119
|
|
|
$
|
4,712
|
|
|
$
|
|
|
|
$
|
298,540
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The recorded investment in loans does not include accrued interest.
15
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE
BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 5 LOANS continued
The following table presents the balance in the allowance for loan losses and the recorded investment in
loans by portfolio segment and based on impairment method as of December 31, 2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
|
Mortgage
|
|
|
Mortgage
Warehouse
|
|
|
Residential
Construction
|
|
|
Indirect
Auto
|
|
|
Home
Equity
|
|
|
Consumer
and Other
|
|
|
Unallocated
|
|
|
Total
|
|
December 31, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending allowance balance attributable to loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Individually evaluated for impairment
|
|
$
|
112
|
|
|
$
|
128
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
11
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
251
|
|
Collectively evaluated for impairment
|
|
|
2,662
|
|
|
|
246
|
|
|
|
393
|
|
|
|
3
|
|
|
|
19
|
|
|
|
108
|
|
|
|
90
|
|
|
|
|
|
|
|
3,521
|
|
Acquired with deteriorated credit quality
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total ending allowance
|
|
$
|
2,774
|
|
|
$
|
374
|
|
|
$
|
393
|
|
|
$
|
3
|
|
|
$
|
19
|
|
|
$
|
119
|
|
|
$
|
90
|
|
|
$
|
|
|
|
$
|
3,772
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans individually evaluated for impairment
|
|
$
|
4,630
|
|
|
$
|
1,630
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
14
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
6,274
|
|
Loans collectively evaluated for impairment
|
|
|
121,236
|
|
|
|
43,788
|
|
|
|
103,864
|
|
|
|
3,045
|
|
|
|
2,249
|
|
|
|
13,002
|
|
|
|
4,697
|
|
|
|
|
|
|
|
291,881
|
|
Loans acquired with deteriorated credit quality
|
|
|
824
|
|
|
|
152
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
976
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total ending loan balance
|
|
$
|
126,690
|
|
|
$
|
45,570
|
|
|
$
|
103,864
|
|
|
$
|
3,045
|
|
|
$
|
2,249
|
|
|
$
|
13,016
|
|
|
$
|
4,697
|
|
|
$
|
|
|
|
$
|
299,131
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The recorded investment in loans does not include accrued interest.
16
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE
BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 5 LOANS continued
The following table presents information related to impaired loans by class of loans as
of and for the three months ended March 31, 2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unpaid
Principal
Balance
|
|
|
Recorded
Investment
|
|
|
Allowance for
Loan Losses
Allocated
|
|
|
Average
Recorded
Investment
|
|
|
Interest
Income
Recognized
|
|
|
Cash Basis
Interest
Recognized
|
|
With no related allowance recorded:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate
|
|
$
|
1,408
|
|
|
$
|
1,408
|
|
|
$
|
|
|
|
$
|
1,422
|
|
|
$
|
2
|
|
|
$
|
|
|
Land
|
|
|
2,527
|
|
|
|
2,527
|
|
|
|
|
|
|
|
2,528
|
|
|
|
3
|
|
|
|
|
|
Mortgage
|
|
|
1,044
|
|
|
|
1,044
|
|
|
|
|
|
|
|
1,079
|
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal
|
|
|
4,979
|
|
|
|
4,979
|
|
|
|
|
|
|
|
5,029
|
|
|
|
8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
With an allowance recorded:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23
|
|
|
|
|
|
|
|
|
|
Real estate
|
|
|
500
|
|
|
|
501
|
|
|
|
76
|
|
|
|
502
|
|
|
|
|
|
|
|
|
|
Land
|
|
|
544
|
|
|
|
544
|
|
|
|
120
|
|
|
|
549
|
|
|
|
|
|
|
|
|
|
Mortgage
|
|
|
597
|
|
|
|
597
|
|
|
|
98
|
|
|
|
633
|
|
|
|
|
|
|
|
|
|
Home equity
|
|
|
14
|
|
|
|
14
|
|
|
|
10
|
|
|
|
14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal
|
|
|
1,655
|
|
|
|
1,656
|
|
|
|
304
|
|
|
|
1,721
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
6,634
|
|
|
$
|
6,635
|
|
|
$
|
304
|
|
|
$
|
6,750
|
|
|
$
|
8
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The recorded investment in loans does not include accrued interest.
17
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE
BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 5 LOANS continued
The following table presents information related to impaired loans by class of loans as
of and for the three months ended March 31, 2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unpaid
Principal
Balance
|
|
|
Recorded
Investment
|
|
|
Allowance for
Loan Losses
Allocated
|
|
|
Average
Recorded
Investment
|
|
|
Interest
Income
Recognized
|
|
|
Cash Basis
Interest
Recognized
|
|
With no related allowance recorded:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and other
|
|
$
|
28
|
|
|
$
|
28
|
|
|
$
|
|
|
|
$
|
29
|
|
|
$
|
|
|
|
$
|
|
|
Real estate
|
|
|
1,166
|
|
|
|
1,166
|
|
|
|
|
|
|
|
1,162
|
|
|
|
4
|
|
|
|
|
|
Land
|
|
|
2,248
|
|
|
|
2,248
|
|
|
|
|
|
|
|
2,248
|
|
|
|
12
|
|
|
|
|
|
Mortgage
|
|
|
637
|
|
|
|
636
|
|
|
|
|
|
|
|
640
|
|
|
|
11
|
|
|
|
|
|
Residential construction:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Land
|
|
|
87
|
|
|
|
87
|
|
|
|
|
|
|
|
87
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal
|
|
|
4,166
|
|
|
|
4,165
|
|
|
|
|
|
|
|
4,166
|
|
|
|
27
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
With an allowance recorded:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate
|
|
|
1,298
|
|
|
|
1,299
|
|
|
|
357
|
|
|
|
1,300
|
|
|
|
6
|
|
|
|
|
|
Land
|
|
|
712
|
|
|
|
713
|
|
|
|
119
|
|
|
|
713
|
|
|
|
|
|
|
|
|
|
Mortgage
|
|
|
271
|
|
|
|
271
|
|
|
|
52
|
|
|
|
274
|
|
|
|
|
|
|
|
|
|
Home equity
|
|
|
377
|
|
|
|
377
|
|
|
|
26
|
|
|
|
377
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal
|
|
|
2,658
|
|
|
|
2,660
|
|
|
|
554
|
|
|
|
2,664
|
|
|
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
6,824
|
|
|
$
|
6,825
|
|
|
$
|
554
|
|
|
$
|
6,830
|
|
|
$
|
33
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The recorded investment in loans does not include accrued interest.
18
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE
BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 5 LOANS continued
The following table presents information related to impaired loans by class of loans as of
December 31, 2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unpaid
Principal
Balance
|
|
|
Recorded
Investment
|
|
|
Allowance for
Loan Losses
Allocated
|
|
With no related allowance recorded:
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate
|
|
$
|
1,299
|
|
|
$
|
1,298
|
|
|
$
|
|
|
Land
|
|
|
2,248
|
|
|
|
2,248
|
|
|
|
|
|
Mortgage
|
|
|
945
|
|
|
|
945
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal
|
|
|
4,492
|
|
|
|
4,491
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
With an allowance recorded:
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and other
|
|
|
28
|
|
|
|
29
|
|
|
|
6
|
|
Real estate
|
|
|
502
|
|
|
|
503
|
|
|
|
29
|
|
Land
|
|
|
552
|
|
|
|
552
|
|
|
|
77
|
|
Mortgage
|
|
|
685
|
|
|
|
685
|
|
|
|
128
|
|
Home equity
|
|
|
14
|
|
|
|
14
|
|
|
|
11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal
|
|
|
1,781
|
|
|
|
1,783
|
|
|
|
251
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
6,273
|
|
|
$
|
6,274
|
|
|
$
|
251
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The recorded investment in loans does not include accrued interest.
The following table presents the recorded investment in nonaccrual loans and loans past due over 90 days still on accrual by class of loans as of
March 31, 2012 and December 31, 2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual
|
|
|
Loans Past Due
Over 90 Days
Still
Accruing
|
|
|
|
March 31,
2012
|
|
|
December 31,
2011
|
|
|
March 31,
2012
|
|
|
December 31,
2011
|
|
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and other
|
|
$
|
32
|
|
|
$
|
62
|
|
|
$
|
|
|
|
$
|
|
|
Real estate
|
|
|
2,007
|
|
|
|
2,027
|
|
|
|
|
|
|
|
|
|
Land
|
|
|
3,005
|
|
|
|
2,800
|
|
|
|
|
|
|
|
|
|
Mortgage
|
|
|
1,448
|
|
|
|
1,454
|
|
|
|
|
|
|
|
|
|
Indirect auto
|
|
|
7
|
|
|
|
8
|
|
|
|
|
|
|
|
|
|
Home equity
|
|
|
14
|
|
|
|
14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
6,513
|
|
|
$
|
6,365
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The recorded investment in loans does not include accrued interest.
19
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE
BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 5 LOANS continued
The following table presents the aging of the recorded investment in past due loans as of March 31,
2012 and December 31, 2011 by class of loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30-59
Days
Past Due
|
|
|
60-89
Days
Past Due
|
|
|
Greater than
90 Days
Past Due
|
|
|
Total
Past Due
|
|
|
Loans Not
Past Due
|
|
|
Total
|
|
March 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and other
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
21,549
|
|
|
$
|
21,549
|
|
Real estate
|
|
|
1,042
|
|
|
|
|
|
|
|
1,542
|
|
|
|
2,584
|
|
|
|
80,733
|
|
|
|
83,317
|
|
Five or more family
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,995
|
|
|
|
12,995
|
|
Construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
590
|
|
|
|
590
|
|
Land
|
|
|
213
|
|
|
|
66
|
|
|
|
2,248
|
|
|
|
2,527
|
|
|
|
6,621
|
|
|
|
9,148
|
|
Mortgage
|
|
|
1,158
|
|
|
|
|
|
|
|
1,054
|
|
|
|
2,212
|
|
|
|
40,389
|
|
|
|
42,601
|
|
Mortgage warehouse
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
105,879
|
|
|
|
105,879
|
|
Residential construction:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction
|
|
|
96
|
|
|
|
|
|
|
|
|
|
|
|
96
|
|
|
|
2,150
|
|
|
|
2,246
|
|
Land
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
414
|
|
|
|
414
|
|
Indirect
|
|
|
17
|
|
|
|
|
|
|
|
7
|
|
|
|
24
|
|
|
|
1,946
|
|
|
|
1,970
|
|
Home equity
|
|
|
15
|
|
|
|
|
|
|
|
14
|
|
|
|
29
|
|
|
|
13,090
|
|
|
|
13,119
|
|
Consumer and other
|
|
|
133
|
|
|
|
|
|
|
|
|
|
|
|
133
|
|
|
|
4,579
|
|
|
|
4,712
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
2,674
|
|
|
$
|
66
|
|
|
$
|
4,865
|
|
|
$
|
7,605
|
|
|
$
|
290,935
|
|
|
$
|
298,540
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30-59
Days
Past Due
|
|
|
60-89
Days
Past Due
|
|
|
Greater than
90 Days
Past Due
|
|
|
Total
Past Due
|
|
|
Loans Not
Past Due
|
|
|
Total
|
|
December 31, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and other
|
|
$
|
|
|
|
$
|
|
|
|
$
|
29
|
|
|
$
|
29
|
|
|
$
|
18,077
|
|
|
$
|
18,106
|
|
Real estate
|
|
|
1,057
|
|
|
|
128
|
|
|
|
1,589
|
|
|
|
2,774
|
|
|
|
77,702
|
|
|
|
80,476
|
|
Five or more family
|
|
|
43
|
|
|
|
|
|
|
|
|
|
|
|
43
|
|
|
|
17,670
|
|
|
|
17,713
|
|
Construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,172
|
|
|
|
1,172
|
|
Land
|
|
|
216
|
|
|
|
|
|
|
|
2,248
|
|
|
|
2,464
|
|
|
|
6,759
|
|
|
|
9,223
|
|
Mortgage
|
|
|
1,293
|
|
|
|
55
|
|
|
|
1,115
|
|
|
|
2,463
|
|
|
|
43,107
|
|
|
|
45,570
|
|
Mortgage warehouse
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
103,864
|
|
|
|
103,864
|
|
Residential construction:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,629
|
|
|
|
2,629
|
|
Land
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
416
|
|
|
|
416
|
|
Indirect auto
|
|
|
27
|
|
|
|
|
|
|
|
8
|
|
|
|
35
|
|
|
|
2,214
|
|
|
|
2,249
|
|
Home equity
|
|
|
|
|
|
|
|
|
|
|
14
|
|
|
|
14
|
|
|
|
13,002
|
|
|
|
13,016
|
|
Consumer and other
|
|
|
|
|
|
|
14
|
|
|
|
|
|
|
|
14
|
|
|
|
4,683
|
|
|
|
4,697
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
2,636
|
|
|
$
|
197
|
|
|
$
|
5,003
|
|
|
$
|
7,836
|
|
|
$
|
291,295
|
|
|
$
|
299,131
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The recorded investment in loans does not include accrued interest.
20
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE
BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 5 LOANS continued
Troubled Debt Restructurings:
At March 31, 2012 and December 31, 2011, the outstanding balance of loans that were modified as troubled debt restructurings totaled $251 and $254, respectively. All of these loans were
considered nonperforming troubled debt restructurings. The Company has allocated $13 of specific reserves to customers whose loan terms have been modified in troubled debt restructurings as of March 31, 2012 and December 31, 2011. The
Company has not committed to lend additional amounts as of March 31, 2012 to customers with outstanding loans that are classified as troubled debt restructurings.
During the three months ended March 31, 2012, the Bank did not modify any loans which were considered to be troubled debt restructurings. During the year ending December 31, 2011, the terms of
certain loans were modified as troubled debt restructurings. The modification of the terms of such loans included one or a combination of the following: a reduction of the stated interest rate of the loan; an extension of the maturity date at a
stated rate of interest lower than the current market rate for new debt with similar risk; or a permanent reduction of the recorded investment in the loan.
For the three months ended March 31, 2012, no troubled debt restructurings defaulted within twelve months following the modification.
A loan is considered to be in payment default once it is 90 days contractually past due under the modified terms.
In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the
foreseeable future without the modification. This evaluation is performed under the Companys management loan committee.
Credit
Quality Indicators
The Company categorized loans into risk categories based on relevant information about the ability of borrowers to
service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans as
to credit risk. The analysis includes loans with risk ratings of Special Mention, Substandard and Doubtful. This analysis is performed on a quarterly basis. The Company uses the following definitions for risk ratings:
Special Mention
. Loans classified as special mention have a potential weakness that deserves managements close attention. If left
uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institutions credit position at some future date.
Substandard
. Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a
well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.
Doubtful
. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the
weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.
21
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE
BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 5 LOANS continued
Loans not meeting the criteria above that are analyzed individually as part of the above described
process are considered to be pass rated loans. The Bank monitors credit quality on loans not rated through the loans individual payment performance. As of March 31, 2012, the most recent analysis performed, and December 31, 2011 the
risk category of loans by class of loans is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Not
Rated
|
|
|
Pass
|
|
|
Special
Mention
|
|
|
Substandard
|
|
|
Doubtful
|
|
March 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and other
|
|
$
|
152
|
|
|
$
|
21,024
|
|
|
$
|
373
|
|
|
$
|
|
|
|
$
|
|
|
Real estate
|
|
|
74
|
|
|
|
69,074
|
|
|
|
7,573
|
|
|
|
6,535
|
|
|
|
61
|
|
Five or more family
|
|
|
205
|
|
|
|
9,006
|
|
|
|
3,784
|
|
|
|
|
|
|
|
|
|
Construction
|
|
|
|
|
|
|
506
|
|
|
|
84
|
|
|
|
|
|
|
|
|
|
Land
|
|
|
|
|
|
|
5,416
|
|
|
|
660
|
|
|
|
3,072
|
|
|
|
|
|
Mortgage
|
|
|
35,160
|
|
|
|
5,091
|
|
|
|
466
|
|
|
|
1,884
|
|
|
|
|
|
Mortgage warehouse
|
|
|
105,879
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential construction:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction
|
|
|
2,246
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Land
|
|
|
414
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Indirect auto
|
|
|
1,970
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Home equity
|
|
|
12,563
|
|
|
|
307
|
|
|
|
91
|
|
|
|
158
|
|
|
|
|
|
Consumer and other
|
|
|
3,815
|
|
|
|
897
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
162,478
|
|
|
$
|
111,321
|
|
|
$
|
13,031
|
|
|
$
|
11,649
|
|
|
$
|
61
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Not
Rated
|
|
|
Pass
|
|
|
Special
Mention
|
|
|
Substandard
|
|
|
Doubtful
|
|
December 31, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and other
|
|
$
|
67
|
|
|
$
|
17,500
|
|
|
$
|
510
|
|
|
$
|
29
|
|
|
$
|
|
|
Real estate
|
|
|
16
|
|
|
|
65,136
|
|
|
|
11,658
|
|
|
|
3,605
|
|
|
|
61
|
|
Five or more family
|
|
|
208
|
|
|
|
13,520
|
|
|
|
3,985
|
|
|
|
|
|
|
|
|
|
Construction
|
|
|
|
|
|
|
1,079
|
|
|
|
93
|
|
|
|
|
|
|
|
|
|
Land
|
|
|
|
|
|
|
5,447
|
|
|
|
694
|
|
|
|
3,082
|
|
|
|
|
|
Mortgage
|
|
|
37,769
|
|
|
|
4,946
|
|
|
|
722
|
|
|
|
2,133
|
|
|
|
|
|
Mortgage warehouse
|
|
|
103,864
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential construction:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction
|
|
|
2,629
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Land
|
|
|
416
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Indirect auto
|
|
|
2,249
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Home equity
|
|
|
12,623
|
|
|
|
121
|
|
|
|
92
|
|
|
|
180
|
|
|
|
|
|
Consumer and other
|
|
|
3,776
|
|
|
|
921
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
163,617
|
|
|
$
|
108,670
|
|
|
$
|
17,754
|
|
|
$
|
9,029
|
|
|
$
|
61
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The recorded investment in loans does not include accrued interest.
22
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE
BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 5 LOANS continued
Purchased Loans
The Company purchased loans during 2007, for which there was, at acquisition, evidence of deterioration of credit quality since origination and it was probable, at acquisition, that all contractually
required payments would not be collected. The outstanding balance and carrying amount of those loans is as follows:
|
|
|
|
|
|
|
|
|
|
|
March 31,
2012
|
|
|
December 31,
2011
|
|
Commercial:
|
|
|
|
|
|
|
|
|
Commercial and other
|
|
$
|
32
|
|
|
$
|
36
|
|
Real estate
|
|
|
917
|
|
|
|
923
|
|
Mortgage
|
|
|
153
|
|
|
|
154
|
|
|
|
|
|
|
|
|
|
|
Outstanding balance
|
|
$
|
1,102
|
|
|
$
|
1,113
|
|
|
|
|
|
|
|
|
|
|
Carrying amount, net of allowance of $0
|
|
$
|
970
|
|
|
$
|
977
|
|
|
|
|
|
|
|
|
|
|
Accretable yield, or income expected to be collected, is as follows:
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
|
2012
|
|
|
2011
|
|
Beginning balance
|
|
$
|
193
|
|
|
$
|
250
|
|
Reclassification from non-accretable yield
|
|
|
4
|
|
|
|
8
|
|
Accretion of income
|
|
|
(18
|
)
|
|
|
(22
|
)
|
|
|
|
|
|
|
|
|
|
Ending balance
|
|
$
|
179
|
|
|
$
|
236
|
|
|
|
|
|
|
|
|
|
|
For the purchased loans disclosed above, the Company did not increase the allowance for loan losses during 2012 or 2011.
No allowance for loan losses were reversed during 2012 or 2011.
23
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE
BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 6 FAIR VALUE
Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or
most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values:
Level 1 Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access
as of the measurement date.
Level 2 Significant other observable inputs other than Level 1 prices such as quoted prices
for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
Level 3 Significant unobservable inputs that reflect a companys own assumptions about the assumptions that market participants would use in pricing an asset or liability.
The Company used the following methods and significant assumptions to estimate the fair value of each type of financial asset:
Investment Securities
: The fair values for investment securities are determined by quoted market prices, if available (Level 1). For securities
where quoted prices are not available, fair values are calculated based on market prices of similar securities (Level 2).
Loans Held for
Sale and Loan Commitment Derivatives
: The fair value of loans held for sale and residential mortgage loan commitments are determined by obtaining quoted prices for similar loans and commitments with similar interest rates and maturities from
major secondary markets (Level 2).
Derivatives-Interest Rate Swaps
: The fair value of derivatives are based on valuation models using
observable market data as of the measurement date (Level 2).
Impaired Loans
: At the time a loan is considered impaired, it is valued
at the lower of cost or fair value. Impaired loans carried at fair value generally receive specific allocations of the allowance for loan losses. For collateral dependent loans, fair value is commonly based on recent real estate appraisals performed
by qualified independent third-party appraisers. These appraisals may utilize a single valuation approach or a combination of approaches including cost, comparable sales and the income approach. The cost approach is based on the cost to replace the
existing property. The comparable sales approach evaluates the sales prices of comparable properties within the same market area. The income approach considers net operating income generated by the property and the rate of return required by an
investor. Adjustments are routinely made in the appraisal process by the independent third-party appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically
result in a Level 3 classification of the inputs for determining fair value. Non-real estate collateral may be valued using an appraisal, net book value per the borrowers financial statements, or aging reports, adjusted or discounted based on
managements historical knowledge, changes in market conditions from the time of the valuation, and managements expertise and knowledge of the client and clients business, resulting in a Level 3 fair value classification. Impaired
loans are evaluated on a quarterly basis for additional impairment and adjusted accordingly.
24
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE
BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 6 FAIR VALUE - continued
Other Real Estate Owned
: Assets acquired through or instead of loan foreclosure are initially
recorded at fair value less costs to sell when acquired, establishing a new cost basis. These assets are subsequently accounted for at lower of cost or fair value less estimated costs to sell. Fair value is commonly based on recent real estate
appraisals performed by qualified independent third-party appraisers. These appraisals may utilize a single valuation approach or a combination of approaches including cost, comparable sales and the income approach. The cost approach is based on the
cost to replace the existing property. The comparable sales approach evaluates the sales prices of comparable properties within the same market area. The income approach considers net operating income generated by the property and the rate of return
required by an investor. Adjustments are routinely made in the appraisal process by the independent third-party appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and
typically result in a Level 3 classification of the inputs for determining fair value.
The President/Chief Financial Officer
(President/CFO) and Executive Vice President Credit (EVP Credit) are responsible for determining the valuation processes and procedures for the fair value measurement of impaired loans and other real estate
owned properties. The President/CFO and EVP Credit review impaired loans and other real estate owned properties on a quarterly basis to determine the accuracy of the observable inputs, generally third party appraisals, auction values, values
derived from trade publications and any additional data received from the borrower, and the appropriateness of unobservable inputs, generally discounts due to collection issues and current market conditions. The EVP Credit determines
discounts based on the valuation source and asset type for impaired loans. These discounts are reviewed periodically, annually at a minimum, for appropriateness. Current trends in market values and gains and losses on sales of similar assets are
also considered when determining discounts of asset categories.
At March 31, 2012, discounts applied when calculating the fair value of
impaired loans ranged from 0% to approximately 35% depending on the source of value and the nature of the assets securing these loans. Real estate collateral is valued based on evaluations or appraisals and are generally discounted by 20%, with
higher discounts for properties in poor condition or property with characteristics which may make it more difficult to market. Commercial loans not secured by real estate are generally discounted 30% for receivables, 50% to 75% for inventory with
higher discounts when monthly borrowing base certificates are not required or received and 15% of trade publication and auction values for automobiles.
At March 31, 2012, discounts applied to the calculation of the fair value of other real estate owned properties ranged from 0% to approximately 40%. The fair value of other real estate owned properties
are based on the lower of cost or fair value of the underlying collateral less expected selling costs. Collateral values are estimated primarily through appraisals. If properties are held in other real estate owned for longer than 12 18
months a new appraisal is obtained.
Mortgage Servicing Rights
: On a quarterly basis, loan servicing rights are evaluated for
impairment based on the fair value of the rights as compared to the carrying amount. If the carrying amount of an individual tranche exceeds fair value, impairment is recorded on that tranche so that the servicing asset is carried at fair value.
Fair value is determined at a tranche level, based on a valuation model that calculates the present value of estimated future net servicing income. The valuation model utilizes assumptions that market participants would use in estimating future net
servicing income and that can be validated against available market data (Level 2). Fair value at March 31, 2012 was determined using a discount rate of 9.0%, prepayment speeds ranging from 9.6% to 24.0%, depending on the stratification of the
specific right, and a weighted average default rate of approximately 0.5%. Fair value at December 31, 2011 was determined using a discount rate of 9.0%, prepayment speeds ranging from 14.3% to 23.8%, depending on the stratification of the specific
right, and a weighted average default rate of approximately 0.5%.
25
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE
BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 6 FAIR VALUE - continued
Assets and liabilities measured at fair value on a recurring basis, including financial assets and
liabilities for which the Company has elected the fair value option, are summarized below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements at
|
|
|
|
|
|
|
March 31, 2012
|
|
|
|
|
|
|
Quoted Prices in
|
|
|
Significant
|
|
|
Significant
|
|
|
|
|
|
|
Active Markets for
|
|
|
Other
|
|
|
Unobservable
|
|
|
|
Carrying
|
|
|
Identical Assets
|
|
|
Observable Inputs
|
|
|
Inputs
|
|
|
|
Value
|
|
|
(Level 1)
|
|
|
(Level 2)
|
|
|
(Level 3)
|
|
Financial Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment securities available for sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. federal agency obligations
|
|
$
|
9,524
|
|
|
$
|
|
|
|
$
|
9,524
|
|
|
$
|
|
|
State and municipal
|
|
|
42,284
|
|
|
|
|
|
|
|
42,284
|
|
|
|
|
|
Mortgage-backed securities-residential
|
|
|
19,671
|
|
|
|
|
|
|
|
19,671
|
|
|
|
|
|
Government agency sponsored collateralized mortgage obligations
|
|
|
50,866
|
|
|
|
|
|
|
|
50,866
|
|
|
|
|
|
Corporate debt securities
|
|
|
2,840
|
|
|
|
|
|
|
|
2,840
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total investment securities Available-for-sale
|
|
$
|
125,185
|
|
|
$
|
|
|
|
$
|
125,185
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans held for sale
|
|
$
|
3,532
|
|
|
$
|
|
|
|
$
|
3,532
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives residential mortgage loan commitments
|
|
$
|
65
|
|
|
$
|
|
|
|
$
|
65
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives interest rate swaps
|
|
$
|
(2,190
|
)
|
|
$
|
|
|
|
$
|
(2,190
|
)
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE
BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 6 FAIR VALUE - continued
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements at
|
|
|
|
|
|
|
December 31, 2011
|
|
|
|
|
|
|
Quoted Prices in
|
|
|
Significant
|
|
|
Significant
|
|
|
|
|
|
|
Active Markets for
|
|
|
Other
|
|
|
Unobservable
|
|
|
|
Carrying
|
|
|
Identical Assets
|
|
|
Observable Inputs
|
|
|
Inputs
|
|
|
|
Value
|
|
|
(Level 1)
|
|
|
(Level 2)
|
|
|
(Level 3)
|
|
Financial Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment securities available for sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. federal agency obligations
|
|
$
|
12,601
|
|
|
$
|
|
|
|
$
|
12,601
|
|
|
$
|
|
|
State and municipal
|
|
|
43,106
|
|
|
|
|
|
|
|
43,106
|
|
|
|
|
|
Mortgage-backed securities residential
|
|
|
31,789
|
|
|
|
|
|
|
|
31,789
|
|
|
|
|
|
Government agency sponsored collateralized mortgage obligations
|
|
|
44,478
|
|
|
|
|
|
|
|
44,478
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total investment securities available-for-sale
|
|
$
|
131,974
|
|
|
$
|
|
|
|
$
|
131,974
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans held for sale
|
|
$
|
3,049
|
|
|
$
|
|
|
|
$
|
3,049
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives residential mortgage loan commitments
|
|
$
|
57
|
|
|
$
|
|
|
|
$
|
57
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives interest rate swaps
|
|
$
|
(2,283
|
)
|
|
$
|
|
|
|
$
|
(2,283
|
)
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
There were no transfers between Level 1 and Level 2 during the periods indicated above.
Loans held for sale were carried at the fair value of $3,532, which was made up of the outstanding balance of $3,485, net of a valuation of $47 at
March 31, 2012, resulting in income of $4 for the three months ended March 31, 2012. At March 31, 2011, loans held for sale were carried at the fair value of $601, which was made up of the outstanding balance of $591, net a valuation
of $10, resulting in income of $(36) for the three months ended March 31, 2011.
The difference between the aggregate fair value and the
aggregate remaining contractual principal balance outstanding for loans held for sale was:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2012
|
|
|
|
Aggregate
|
|
|
|
|
|
Contractual
|
|
|
|
Fair Value
|
|
|
Difference
|
|
|
Principal
|
|
Loans held for sale
|
|
$
|
3,532
|
|
|
$
|
47
|
|
|
$
|
3,485
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2011
|
|
|
|
Aggregate
|
|
|
|
|
|
Contractual
|
|
|
|
Fair Value
|
|
|
Difference
|
|
|
Principal
|
|
Loans held for sale
|
|
$
|
3,049
|
|
|
$
|
43
|
|
|
$
|
3,006
|
|
27
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE
BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 6 FAIR VALUE - continued
For items for which the fair value option has been elected, interest income is recorded within the
consolidated statements of income and comprehensive income based on the contractual amount of interest income earned on financial assets (none were delinquent or in nonaccrual status).
The following table presents the amount of gains and losses from fair value changes included in income before income taxes for financial assets carried at fair value for the three months ended
March 31, 2012 and 2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in Fair Values for the three months ended March
31, 2012 and 2011,
for the Items Measured at Fair Value Pursuant to Election of the Fair Value
Option
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Changes
|
|
|
|
|
|
|
|
|
|
|
|
|
in Fair Values
|
|
|
|
Other
|
|
|
|
|
|
|
|
|
Included in
|
|
|
|
Gains and
|
|
|
Interest
|
|
|
Interest
|
|
|
Current Period
|
|
|
|
Losses
|
|
|
Income
|
|
|
Expense
|
|
|
Earnings
|
|
Three Months Ended March 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans held for sale
|
|
$
|
4
|
|
|
$
|
12
|
|
|
$
|
|
|
|
$
|
16
|
|
|
|
|
|
|
Three Months Ended March 31, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans held for sale
|
|
$
|
(36
|
)
|
|
$
|
10
|
|
|
$
|
|
|
|
$
|
(26
|
)
|
Assets measured at fair value on a non-recurring basis are summarized below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements at
|
|
|
|
|
|
|
March 31, 2012
|
|
|
|
|
|
|
Quoted Prices in
|
|
|
Significant
|
|
|
Significant
|
|
|
|
|
|
|
Active Markets for
|
|
|
Other
|
|
|
Unobservable
|
|
|
|
Carrying
|
|
|
Identical Assets
|
|
|
Observable Inputs
|
|
|
Inputs
|
|
|
|
Value
|
|
|
(Level 1)
|
|
|
(Level 2)
|
|
|
(Level 3)
|
|
Impaired loans Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate
|
|
$
|
424
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
424
|
|
Land
|
|
|
424
|
|
|
|
|
|
|
|
|
|
|
|
424
|
|
Mortgage
|
|
|
499
|
|
|
|
|
|
|
|
|
|
|
|
499
|
|
Home equity
|
|
|
4
|
|
|
|
|
|
|
|
|
|
|
|
4
|
|
Other real estate owned, net Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate
|
|
|
178
|
|
|
|
|
|
|
|
|
|
|
|
178
|
|
Land
|
|
|
412
|
|
|
|
|
|
|
|
|
|
|
|
412
|
|
Mortgage servicing rights
|
|
|
275
|
|
|
|
|
|
|
|
275
|
|
|
|
|
|
28
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE
BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 6 FAIR VALUE - continued
Assets measured at fair value on a non-recurring basis are summarized below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements at
|
|
|
|
|
|
|
December 31, 2011
|
|
|
|
|
|
|
Quoted Prices in
|
|
|
Significant
|
|
|
Significant
|
|
|
|
|
|
|
Active Markets for
|
|
|
Other
|
|
|
Unobservable
|
|
|
|
Carrying
|
|
|
Identical Assets
|
|
|
Observable Inputs
|
|
|
Inputs
|
|
|
|
Value
|
|
|
(Level 1)
|
|
|
(Level 2)
|
|
|
(Level 3)
|
|
Impaired loans Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and other
|
|
$
|
22
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
22
|
|
Real Estate
|
|
|
473
|
|
|
|
|
|
|
|
|
|
|
|
473
|
|
Land
|
|
|
475
|
|
|
|
|
|
|
|
|
|
|
|
475
|
|
Mortgage
|
|
|
557
|
|
|
|
|
|
|
|
|
|
|
|
557
|
|
Home equity
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
3
|
|
Other real estate owned, net Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real Estate
|
|
|
365
|
|
|
|
|
|
|
|
|
|
|
|
365
|
|
Mortgage
|
|
|
93
|
|
|
|
|
|
|
|
|
|
|
|
93
|
|
Mortgage servicing rights
|
|
|
271
|
|
|
|
|
|
|
|
271
|
|
|
|
|
|
Impaired loans, which are measured for impairment using the fair value of the collateral for collateral dependent loans,
had a carrying amount of $1,655, with a valuation allowance of $304 at March 31, 2012, resulting in an additional provision for loan losses of $71 for the three months ended March 31, 2012. At March 31, 2011, impaired loans had a
carrying amount of $2,658, with a valuation allowance of $554, resulting in an additional provision for loan losses of $93 for the three months ended March 31, 2011.
Other real estate owned, which is measured at the lower of cost or fair value less costs to sell, had a net carrying amount of $590, which was made up of the outstanding balance of $727 net a valuation
allowance of $137 at March 31, 2012, resulting in a write-down of $137 for the three months ended March 31, 2012. At March 31, 2011, other real estate owned had a net carrying amount of $10, which was made up of the outstanding
balance of $12 net a valuation allowance of $2, resulting in a write-down of $2 for the three months ended March 31, 2011.
Mortgage
servicing rights, which are carried at lower of cost or fair value, were carried at their fair value of $275, which was made up of the outstanding balance of $389, net of a valuation allowance of $114, resulting in a charge of $(5) for the three
months ended March 31, 2012. At March 31, 2011, mortgage servicing rights were carried at their fair value of $263, which was made up of the outstanding balance of $355, net of a valuation allowance of $92, resulting in a charge of $0 for
the three months ended March 31, 2011.
29
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE
BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 6 FAIR VALUE - continued
The carrying amounts and estimated fair values of financial instruments, at March 31, 2012 are as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements at
|
|
|
|
|
|
|
March 31, 2012
|
|
|
|
|
|
|
Quoted Prices in
|
|
|
Significant
|
|
|
Significant
|
|
|
|
|
|
|
Active Markets for
|
|
|
Other
|
|
|
Unobservable
|
|
|
|
Carrying
|
|
|
Identical Assets
|
|
|
Observable Inputs
|
|
|
Inputs
|
|
|
|
Value
|
|
|
(Level 1)
|
|
|
(Level 2)
|
|
|
(Level 3)
|
|
Financial assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from financial institutions
|
|
$
|
5,668
|
|
|
$
|
5,668
|
|
|
$
|
|
|
|
$
|
|
|
Interest-earning time deposits at other financial institutions
|
|
|
2,450
|
|
|
|
2,450
|
|
|
|
|
|
|
|
|
|
Securities available for sale
|
|
|
125,185
|
|
|
|
|
|
|
|
125,185
|
|
|
|
|
|
Federal Home Loan Bank stock
|
|
|
3,817
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Loans held for sale
|
|
|
3,532
|
|
|
|
|
|
|
|
3,532
|
|
|
|
|
|
Loans, net
|
|
|
294,576
|
|
|
|
|
|
|
|
|
|
|
|
299,995
|
|
Accrued interest receivable
|
|
|
1,395
|
|
|
|
4
|
|
|
|
803
|
|
|
|
588
|
|
|
|
|
|
|
Financial liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
|
(341,871
|
)
|
|
|
|
|
|
|
(339,019
|
)
|
|
|
|
|
Federal Home Loan Bank advances
|
|
|
(60,007
|
)
|
|
|
|
|
|
|
(62,253
|
)
|
|
|
|
|
Subordinated debentures
|
|
|
(5,155
|
)
|
|
|
|
|
|
|
|
|
|
|
(4,905
|
)
|
Accrued interest payable
|
|
|
(354
|
)
|
|
|
|
|
|
|
(354
|
)
|
|
|
|
|
Derivatives interest rate swaps
|
|
|
(2,190
|
)
|
|
|
|
|
|
|
(2,190
|
)
|
|
|
|
|
30
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE
BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 6 FAIR VALUE - continued
The carrying amounts and estimated fair values of financial instruments, at December 31, 2011 are
as follows:
|
|
|
|
|
|
|
|
|
|
|
Carrying
|
|
|
Fair
|
|
|
|
Amount
|
|
|
Value
|
|
Financial assets
|
|
|
|
|
|
|
|
|
Cash and due from financial institutions
|
|
$
|
8,146
|
|
|
$
|
8,146
|
|
Securities available-for-sale
|
|
|
131,974
|
|
|
|
131,974
|
|
Federal Home Loan Bank stock
|
|
|
3,817
|
|
|
|
N/A
|
|
Loans held for sale
|
|
|
3,049
|
|
|
|
3,049
|
|
Loans, net
|
|
|
295,359
|
|
|
|
301,293
|
|
Accrued interest receivable
|
|
|
1,518
|
|
|
|
1,518
|
|
|
|
|
Financial liabilities
|
|
|
|
|
|
|
|
|
Deposits
|
|
$
|
(333,560
|
)
|
|
$
|
(331,486
|
)
|
Federal Home Loan Bank advances
|
|
|
(72,021
|
)
|
|
|
(74,307
|
)
|
Subordinated debentures
|
|
|
(5,155
|
)
|
|
|
(4,582
|
)
|
FDIC guaranteed unsecured borrowings
|
|
|
(4,981
|
)
|
|
|
(4,989
|
)
|
Accrued interest payable
|
|
|
(396
|
)
|
|
|
(396
|
)
|
Derivatives interest rate swaps
|
|
|
(2,283
|
)
|
|
|
(2,283
|
)
|
The methods and assumptions, not previously presented, used to estimate fair value are described as follows:
Cash and due from financial institutions
: The carrying amounts of cash and due from financial institutions approximate fair values and are
classified as Level 1.
Interest-earning time deposits at other financial institutions
: The carrying amounts of interest-earning time
deposits at other financial institutions approximate fair values and are classified as Level 1.
Federal Home Loan Bank stock
: It is
not practical to determine the fair value of Federal Home Loan Bank stock due to restrictions placed on its transferability.
Loans
:
The fair values of loans is based on discounted cash flow analyses, using interest rates currently being offered for loans with similar terms to borrowers of similar credit quality resulting in a Level 3 classification. Impaired loans are valued at
the lower of cost or fair value as described previously. The methods utilized to estimate the fair value of loans do not necessarily represent an exit price.
The fair value of loans held for sale is estimated based upon binding contracts and quotes from third party investors resulting in Level 2 classification.
Deposits
: The fair values disclosed for demand deposits are estimated using a cash flow calculation reduced by decay rate assumptions. These cash
flows are discounted to the current market rate and a functional cost to recognize the inherent costs of servicing these accounts. This results in a Level 2 classification. Fair values of fixed rate certificates of deposit are estimated using a cash
flow calculation reduced by known maturities, estimated principal payments and estimated early withdrawal amounts. These cash flows are discounted to the current market rate. This results in a Level 2 calculation.
31
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE
BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 6 FAIR VALUE - continued
Borrowings
: The fair values of the Companys Federal Home Loan Bank advances are estimated
using discounted cash flow analyses based on current borrowing rates for similar types of borrowing arrangements resulting in a Level 2 classification.
The fair value of the Companys Subordinated Debentures are estimated using discounted cash flow analyses based on the current borrowing rates for similar types of borrowing arrangements resulting in
a Level 3 classification.
Accrued Interest Receivable/Payable
: The carrying amounts of accrued interest approximate fair value
resulting in a Level 1, Level 2 or Level 3 classification based on the underlying asset or liability.
NOTE 7 DERIVATIVES
The Company utilizes interest rate swap agreements as part of its asset liability management strategy to help manage its interest rate
risk position. The notional amount of the interest rate swap does not represent an amount exchanged by the parties. The amount exchanged is determined by reference to the notional amount and the other terms of the individual interest rate swap
agreement.
Interest Rate Swaps Designated as Cash Flow Hedges
: Interest rate swaps with notional amounts of $30.25 million as of
March 31, 2012 and December 31, 2011, were designated as cash flow hedges of subordinated debentures, certain CDARS deposits and FHLB advances, and were determined to be fully effective during all periods presented. As such, no amount of
ineffectiveness has been included in net income. Therefore, the aggregate fair value of the swaps is recorded in other assets (liabilities) with changes in fair value recorded in other comprehensive income (loss). The amount included in accumulated
other comprehensive income (loss) would be reclassified to current earnings should the hedges no longer be considered effective. The hedge would no longer be considered effective if a portion of the hedge becomes ineffective, the item hedged is no
longer in existence or the Company discontinues hedge accounting. The Company expects the hedges to remain fully effective during the remaining terms of the swaps. The Company does not expect any amounts to be reclassed from other comprehensive
income (loss) over the next 12 months.
Information related to the interest-rate swaps designated as cash flow hedges as of March 31,
2012 and December 31, 2011 are as follows:
|
|
|
|
|
|
|
|
|
|
|
March 31, 2012
|
|
|
December 31, 2011
|
|
Subordinated debentures
|
|
|
|
|
|
|
|
|
Notional amount
|
|
$
|
5,000
|
|
|
$
|
5,000
|
|
Fixed interest rate payable
|
|
|
5.54
|
%
|
|
|
5.54
|
%
|
Variable interest rate receivable
(Three month LIBOR plus 3.10%)
|
|
|
3.57
|
%
|
|
|
3.67
|
%
|
Unrealized losses
|
|
|
(187
|
)
|
|
|
(192
|
)
|
Maturity date
|
|
|
March 26, 2014
|
|
32
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE
BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 7 DERIVATIVES continued
|
|
|
|
|
|
|
|
|
|
|
March 31, 2012
|
|
|
December 31, 2011
|
|
CDARS deposits
|
|
|
|
|
|
|
|
|
Notional amount
|
|
$
|
10,250
|
|
|
$
|
10,250
|
|
Fixed interest rate payable
|
|
|
3.19
|
%
|
|
|
3.19
|
%
|
Variable interest rate receivable
(One month LIBOR plus 0.55%)
|
|
|
0.79
|
%
|
|
|
0.84
|
%
|
Unrealized losses
|
|
|
(543
|
)
|
|
|
(569
|
)
|
Maturity date
|
|
|
October 9, 2014
|
|
|
|
|
FHLB advance
|
|
|
|
|
|
|
|
|
Notional amount
|
|
$
|
5,000
|
|
|
$
|
5,000
|
|
Fixed interest rate payable
|
|
|
3.54
|
%
|
|
|
3.54
|
%
|
Variable interest rate receivable
(Three month LIBOR plus 0.22%)
|
|
|
0.69
|
%
|
|
|
0.78
|
%
|
Unrealized losses
|
|
|
(429
|
)
|
|
|
(443
|
)
|
Maturity date
|
|
|
September 20, 2015
|
|
|
|
|
FHLB advance
|
|
|
|
|
|
|
|
|
Notional amount
|
|
$
|
10,000
|
|
|
$
|
10,000
|
|
Fixed interest rate payable
|
|
|
3.69
|
%
|
|
|
3.69
|
%
|
Variable interest rate receivable
(Three month LIBOR plus 0.25%)
|
|
|
0.81
|
%
|
|
|
0.66
|
%
|
Unrealized losses
|
|
|
(1,019
|
)
|
|
|
(1,057
|
)
|
Maturity date
|
|
|
July 19, 2016
|
|
Interest expense recorded on these swap transactions totaled $(193) and $(179) during the three months ended
March 31, 2012 and 2011, respectively, and is reported as a component of interest expense on subordinated debentures, deposits and FHLB advances.
33
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE
BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 7 DERIVATIVES continued
The following table presents the net losses recorded in accumulated other comprehensive income (loss)
and the Consolidated Statements of Income relating to the cash flow derivative instruments for the three months ended March 31, 2012 and 2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net amount of
|
|
|
|
|
|
Net amount of gain
|
|
|
|
gain (loss) recognized
|
|
|
Net amount of gain
|
|
|
(loss) recognized in other
|
|
|
|
in OCI
|
|
|
(loss) reclassified from OCI
|
|
|
non interest income
|
|
|
|
(Effective Portion)
|
|
|
to interest income
|
|
|
(Ineffective Portion)
|
|
|
|
2012
|
|
|
2012
|
|
|
2012
|
|
Interest rate contracts
|
|
$
|
1,437
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net amount of
|
|
|
|
|
|
Net amount of gain
|
|
|
|
gain (loss) recognized
|
|
|
Net amount of gain
|
|
|
(loss) recognized in other
|
|
|
|
in OCI
|
|
|
(loss) reclassified from OCI
|
|
|
non interest income
|
|
|
|
(Effective Portion)
|
|
|
to interest income
|
|
|
(Ineffective Portion)
|
|
|
|
2011
|
|
|
2011
|
|
|
2011
|
|
Interest rate contracts
|
|
$
|
207
|
|
|
$
|
|
|
|
$
|
|
|
The following table reflects the cash flow hedges included in the Consolidated Balance Sheets as of March 31, 2012
and December 31, 2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2012
|
|
|
December 31, 2011
|
|
|
|
Notional
|
|
|
Fair
|
|
|
Notional
|
|
|
Fair
|
|
|
|
Amount
|
|
|
Value
|
|
|
Amount
|
|
|
Value
|
|
Included in other liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate swaps related to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subordinated debentures
|
|
$
|
(5,000
|
)
|
|
$
|
(187
|
)
|
|
$
|
(5,000
|
)
|
|
$
|
(192
|
)
|
CDARS deposits
|
|
|
(10,250
|
)
|
|
|
(543
|
)
|
|
|
(10,250
|
)
|
|
|
(569
|
)
|
FHLB advances
|
|
|
(15,000
|
)
|
|
|
(1,448
|
)
|
|
|
(15,000
|
)
|
|
|
(1,500
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total included in other liabilities
|
|
|
|
|
|
$
|
(2,178
|
)
|
|
|
|
|
|
$
|
(2,261
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE
BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 7 DERIVATIVES continued
Interest Rate Swaps Designated as Fair Value Hedges
: An interest rate swap with a notional amount
of $5.0 million as of March 31, 2012 and December 31, 2011 was designated as a fair value hedge of certain brokered deposits. Information related to the interest rate swap designated as a fair value hedge is as follows:
|
|
|
|
|
|
|
|
|
|
|
March 31, 2012
|
|
|
December 31, 2011
|
|
Brokered deposits
|
|
|
|
|
|
|
|
|
Notional amount
|
|
$
|
5,000
|
|
|
$
|
5,000
|
|
Variable interest rate payable
(One month LIBOR less 0.25%)
|
|
|
0.00
|
%
|
|
|
0.03
|
%
|
Fixed interest rate receivable
|
|
|
1.25
|
%
|
|
|
1.25
|
%
|
Maturity date
|
|
|
September 15, 2020
|
|
Interest income recorded on this swap transaction totaled $15 and $15 for the three months ended March 31, 2012 and
2011, respectively, and is reported as a component of interest expense on deposits. Gains (losses) on the fair market value hedge are recorded in other noninterest income and totaled $0 and $(4) for the three months ended March 31, 2012 and
2011, respectively.
The following table reflects the fair value hedge included in the Consolidated Balance Sheets as of March 31, 2012
and December 31, 2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2012
|
|
|
December 31, 2011
|
|
|
|
Notional
|
|
|
Fair
|
|
|
Notional
|
|
|
Fair
|
|
|
|
Amount
|
|
|
Value
|
|
|
Amount
|
|
|
Value
|
|
Included in other liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate swaps related to Brokered deposits
|
|
$
|
(5,000
|
)
|
|
$
|
(12
|
)
|
|
$
|
(5,000
|
)
|
|
$
|
(22
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total included in other liabilities
|
|
|
|
|
|
$
|
(12
|
)
|
|
|
|
|
|
$
|
(22
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The counterparty to the Companys derivatives is exposed to credit risk whenever the derivative is in a liability
position. As a result, the Company has collateralized the liability with cash and security collateral held in safekeeping by Bank of New York. At March 31, 2012 and December 31, 2011, the Company had $220 in cash and securities with a fair
value of $3,419 and $3,761, respectively, posted as collateral for these derivatives.
35
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE
BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 8 STOCK-BASED COMPENSATION
During the month of September 2011, the Company implemented the 2011 Equity Incentive Plan (the Plan) which was approved by
shareholders on May 10, 2011. The Plan provides for issuance of stock options or restricted share awards to employees and directors. Total shares authorized for issuance under the Plan is 316,561 which is further discussed below. Total
compensation cost that has been charged against income for those plans totaled $61 and $0 for the three months ended March 31, 2012 and 2011, respectively.
Stock-Based Compensation
Compensation cost is recognized for stock options and restricted
stock awards issued to employees or directors, based on the fair value of these awards at the date of grant. A Black-Scholes model is utilized to estimate the fair value of stock options, while the market price of the Companys common stock at
the date of grant is used for restricted stock awards.
Compensation cost is recognized over the required service period, generally defined as
the vesting period. For awards with graded vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award.
Stock Options
The Plan permits the grant of stock options to its employees or directors
for up to 226,115 shares of common stock. Option awards are generally granted with an exercise price equal to the market price of the Companys common stock at the date of grant; those option awards have vesting periods of 5 years and have
10-year contractual terms. Options granted generally vest 20% annually.
The fair value of each option award is estimated on the date of grant
using a closed form option valuation (Black-Scholes) model that uses the assumptions noted in the table below. Expected volatilities are based on historical volatilities of companies within La Porte Bancorp, Inc.s peer group. The expected term
of options granted represents the period of time that options granted are expected to be outstanding, which takes into account that the options are not transferable. The risk-free interest rate for the expected term of the option is based on the
U.S. Treasury yield curve in effect at the time of the grant. The fair value of options granted was determined using the following weighted-average assumptions as of the grant date.
|
|
|
|
|
2011
|
Risk-free interest rate
|
|
1.42%
|
Expected term
|
|
7
1
/
2
Years
|
Expected stock price volatility
|
|
27.34%
|
Dividend yield
|
|
1.60%
|
36
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE
BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 8 STOCK-BASED COMPENSATION - continued
A summary of the activity in the stock option plan for the three months ended March 31, 2012
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
|
|
|
Weighted
|
|
|
Average
|
|
|
|
|
|
|
|
|
|
Average
|
|
|
Remaining
|
|
|
Aggregate
|
|
|
|
|
|
|
Exercise
|
|
|
Contractual
|
|
|
Intrinsic
|
|
|
|
Shares
|
|
|
Price
|
|
|
Term
|
|
|
Value
|
|
Outstanding at January 1, 2012
|
|
|
213,678
|
|
|
$
|
8.50
|
|
|
|
10 years
|
|
|
|
|
|
Granted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercised
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forfeited or expired
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at March 31, 2012
|
|
|
213,678
|
|
|
$
|
8.50
|
|
|
|
10 years
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fully vested and expected to vest
|
|
|
213,678
|
|
|
$
|
8.50
|
|
|
|
10 years
|
|
|
|
|
|
|
|
|
|
|
Exercisable at end of period
|
|
|
|
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
n/a
|
|
Information related to the stock option plan for 2011 follows:
|
|
|
|
|
|
|
2011
|
|
Weighted average fair value of options granted
|
|
$
|
2.16
|
|
There were no options exercised during the three months ended March 31, 2012. As of March 31, 2012, there was
$412 of total unrecognized compensation cost related to nonvested stock options granted under the Plan. The cost is expected to be recognized over a weighted-average period of 5 years.
37
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE
BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 8 STOCK-BASED COMPENSATION - continued
Restricted Share Awards
The Plan provides for the issuance of up to 90,446 of restricted shares to directors and employees. Compensation expense is recognized over the vesting period of the awards based on the fair value of the
stock at issue date. The fair value of the stock was determined by obtaining the listed price of the Companys stock on the grant date. Shares vest 20% annually over five years. Total shares issuable under the plan are 1,808 at March 31,
2012, and 88,638 shares were issued in 2011.
A summary of changes in the Companys nonvested shares for the three months ended
March 31, 2012 and the year ended December 31, 2011 follows:
March 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-Average
|
|
|
|
|
|
|
Grant-Date
|
|
|
|
Shares
|
|
|
Fair Value
|
|
Nonvested Shares
|
|
|
|
|
|
|
|
|
Nonvested at January 1, 2012
|
|
|
88,638
|
|
|
$
|
8.50
|
|
Granted
|
|
|
|
|
|
|
|
|
Vested
|
|
|
|
|
|
|
|
|
Forfeited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonvested at March 31, 2012
|
|
|
88,638
|
|
|
$
|
8.50
|
|
|
|
|
|
|
|
|
|
|
As of March 31, 2012, there was $672 of total unrecognized compensation cost related to nonvested shares
granted under the Plan. The cost is expected to be recognized over a weighted-average period of 5 years. There were no shares vested during the three months ended March 31, 2012 or the year ended December 31, 2011.
38
PART I FINANCIAL INFORMATION
ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FORWARD-LOOKING STATEMENTS
This document (including information incorporated by
reference) contains future oral and written statements of the Company and its management and may contain, forward-looking statements, as such term is defined in the Private Securities Litigation Reform Act of 1995, with respect to the financial
condition, results of operations, plans, objectives, future performance and business of the Company. Forward-looking statements, which may be based upon beliefs, expectations and assumptions of the Companys management and on information
currently available to management, are generally identifiable by the use of words such as believe, expect, anticipate, plan, intend, estimate, may, will,
would, could, should or other similar expressions. Additionally, all statements in this document, including forward-looking statements, speak only as of the date they are made, and the Company undertakes no
obligation to update any statement in light of new information or future events.
The Companys ability to predict results or the actual
effect of future plans or strategies is inherently uncertain. The factors which could have a material adverse effect on the operations and future prospects of the Company and certain subsidiaries are detailed in Item 1A Risk
Factors in our Annual Report on Form 10-K for the year ended December 31, 2011. In addition to these risk factors, there are other factors that may impact any public company, including ours, which could have a material adverse effect on
the operations and future prospects of the Company and its subsidiaries. These additional factors include, but are not limited to, the following:
|
|
|
changes in prevailing real estate values and loan demand both nationally and within our current and future market area;
|
|
|
|
increased competitive pressures among financial services companies;
|
|
|
|
changes in consumer spending, borrowing and savings habits;
|
|
|
|
the amount of assessments and premiums we are required to pay for FDIC deposit insurance;
|
|
|
|
legislative or regulatory changes that affect our business including the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank
Act) and its impact on our compliance costs;
|
|
|
|
our ability to successfully manage our commercial lending;
|
|
|
|
the financial health of certain entities, including government sponsored enterprises, the securities of which are owned or acquired by the Company;
|
|
|
|
adverse changes in the securities market;
|
|
|
|
the costs, effects and outcomes of existing or future litigation;
|
|
|
|
the economic impact of past and any future terrorist attacks, acts of war or threats thereof and the response of the United States to any such threats
and attacks;
|
|
|
|
the success of our mortgage warehouse lending program including the impact of the Dodd-Frank Act on the mortgage companies; and
|
|
|
|
the ability of the Company to manage the risks associated with the foregoing factors as well as anticipated risk factors.
|
These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.
39
PART I FINANCIAL INFORMATION
ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - continued
Comparison of Financial Condition at March 31, 2012 and December 31, 2011
General:
Total assets decreased $7.8 million, or 1.6%, to $469.3 million at March 31, 2012 from $477.1 million at
December 31, 2011. The decrease was primarily due to a decrease in securities available for sale the proceeds of which were used to reduce total borrowings. Total borrowings decreased $17.0 million from December 31, 2011 to March 31,
2012. The Companys total deposits increased $8.3 million, or 2.5%, from December 31, 2011 to $341.9 million at March 31, 2012. This increase was primarily due to an increase in time deposits of $8.1 million from the Companys
purchase of additional CDARS deposits totaling $10.0 million during the first quarter of 2012 which replaced higher cost borrowings.
Investment Securities:
Total securities available for sale decreased $6.8 million, or 5.1%, to $125.2 million at March 31, 2012 from $132.0 million at December 31, 2011 primarily due to
the sale of several mortgage-backed securities during the first quarter of 2012 when management elected to take a portion of unrealized gains permanently into income and paydown borrowings with the proceeds. The mortgage-backed securities sold were
paying down at an accelerated pace due to the overall decrease in mortgage loan interest rates.
As of March 31, 2012, management
reviewed the securities portfolio for possible other-than-temporary impairment and determined there was no impairment charges to be recorded for the first quarter of 2012. At March 31, 2012, the total available-for-sale securities portfolio
reflected a net unrealized gain of $5.4 million compared to a net unrealized gain of $5.3 million at December 31, 2011.
Loans Held for Sale:
Loans held for sale increased $483,000, or 15.8%, to $3.5 million at March 31, 2012 from $3.0 million at
December 31, 2011 due to a slight increase in residential loans being sold to the secondary market during the first quarter of 2012.
Net Loans:
Net loans decreased $783,000, or 0.3%, to $294.6 million at March 31, 2012 from $295.4 million at December 31, 2011. There was no material change in total loans, however, we
did experience an increase in commercial, commercial real estate and mortgage warehouse loans during the first quarter of 2012. These increases were offset by a decrease in one- to four-family and five or more family residential loans.
Commercial loans increased $3.5 million, or 19.3%, to $21.5 million at March 31, 2012 from $18.0 million at December 31, 2011. This increase
was primarily due to the origination of a $4.2 million commercial loan to a customer in the health care and social assistance industry.
Commercial real estate loans increased $2.8 million, or 3.5%, to $83.3 million at March 31, 2012 from $80.4 million at December 31, 2011,
primarily due to the origination of a $4.6 million loan relationship to a customer in the entertainment and recreation industry.
Mortgage
warehouse loans increased $2.0 million, or 1.9%, to $105.9 million at March 31, 2012 compared to $103.9 million at December 31, 2011. As in 2011, the mortgage companies have continued to sell a higher percentage of such loans to mortgage
aggregators, or securitizers, in the secondary market which has resulted in a longer retention time for such loans.
There was no material
change in construction, land, home equity or automobile and other consumer loans at March 31, 2012 compared to December 31, 2011.
Five or more family residential loans decreased $4.7 million, or 26.6%, to $13.0 million at March 31, 2012 compared to $17.7 million at
December 31, 2011. During the first quarter of 2012, a $4.7 million loan secured by a residential apartment complex was paid off.
40
PART I FINANCIAL INFORMATION
ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - continued
One- to four-family residential loans decreased $3.0 million, or 6.5%, to $42.6 million at
March 31, 2012 compared to $45.6 million at December 31, 2011. The decrease in this portfolio was primarily attributable to continued refinance activity and normal amortization of the seasoned loan portfolio during the first quarter of
2012. The Bank has continued to sell the majority of its fixed rate one- to four-family residential real estate loans originated during the first quarter of 2012. Management expects to continue selling the majority of the one- to four-family
residential loans originated during the remainder of 2012 to reduce interest rate risk exposure of fixed rate long term mortgages remaining on the balance sheet.
The allowance for loan losses balance increased $192,000, or 5.1%, to $4.0 million at March 31, 2012 compared to $3.8 million at December 31, 2011, primarily due to a provision amount of
$228,000 recorded for the first quarter of 2012. Net charge-offs during the first quarter of 2012 totaled $36,000. The allowance for loan losses to total loans ratio was 1.33% at March 31, 2012 compared to 1.26% at December 31, 2011. The
increase in this ratio was primarily due to the low level of net charge-offs combined with the level of provision for loan losses recorded during the first quarter of 2012. The allowance for loan losses to nonperforming loans ratio was 60.9% at
March 31, 2012 compared to 59.3% at December 31, 2011.
Nonperforming loans increased $149,000 to $6.5 million at March 31,
2012 compared to $6.4 million at December 31, 2011. The total nonperforming loans to total loans ratio was 2.18% at March 31, 2012 compared to 2.13% at December 31, 2011. As of March 31, 2012, nonaccrual loans to real estate and
land developers totaled $4.3 million, to entertainment and recreation businesses totaled $460,000, to construction businesses totaled $213,000, to accommodation and food services totaled $159,000, and to all other commercial industry types totaled
$98,000. Nonaccrual one- to four-family residential loans totaled $1.2 million as of March 31, 2012. All other consumer loans in nonaccrual totaled $21,000 as of March 31, 2012.
Total nonperforming assets to total assets ratio was 1.55% at March 31, 2012 and at December 31, 2011, primarily due to a decrease in other real estate owned of $256,000 offset by an increase in
nonaccrual loans of $149,000. Two properties were sold during the first quarter of 2012 with a recorded market value of $237,000, and three new properties were transferred into other real estate owned during the same time period with a market value
of $119,000. During the first quarter of 2012, write-downs totaling $137,000 were recorded on other real estate owned properties held at March 31, 2012. The current balance in other real estate owned included the current market value of a
property the Company acquired in its acquisition of City Savings Bank in 2007, which was held for future branch development. The current market value of this property was $305,000 at March 31, 2012. The Company anticipates listing this property
for sale but does not anticipate that to occur in the near future.
41
PART I FINANCIAL INFORMATION
ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - continued
Nonperforming Assets:
The table below sets forth the amounts and categories of
our nonperforming assets at the dates indicated.
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
|
December 31,
|
|
|
|
2012
|
|
|
2011
|
|
|
|
(Dollars in thousands)
|
|
Nonaccrual loans:
|
|
|
|
|
|
|
|
|
Real estate:
|
|
|
|
|
|
|
|
|
One-to four-family
|
|
$
|
1,320
|
|
|
$
|
1,325
|
|
Five or more family
|
|
|
|
|
|
|
|
|
Commercial (1)
|
|
|
1,916
|
|
|
|
1,935
|
|
Construction
|
|
|
|
|
|
|
|
|
Land
|
|
|
3,005
|
|
|
|
2,800
|
|
|
|
|
|
|
|
|
|
|
Total real estate
|
|
$
|
6,241
|
|
|
$
|
6,060
|
|
Consumer and other loans:
|
|
|
|
|
|
|
|
|
Home equity
|
|
|
14
|
|
|
|
14
|
|
Commercial
|
|
|
|
|
|
|
28
|
|
Automobile and other
|
|
|
7
|
|
|
|
8
|
|
|
|
|
|
|
|
|
|
|
Total consumer and other loans
|
|
|
21
|
|
|
|
50
|
|
|
|
|
|
|
|
|
|
|
Total troubled debt restructured (2)
|
|
|
251
|
|
|
|
254
|
|
|
|
|
|
|
|
|
|
|
Total nonaccrual loans
|
|
$
|
6,513
|
|
|
$
|
6,364
|
|
|
|
|
|
|
|
|
|
|
Loans greater than 90 days delinquent and still accruing:
|
|
|
|
|
|
|
|
|
Real estate:
|
|
|
|
|
|
|
|
|
One- to four- family
|
|
$
|
|
|
|
$
|
|
|
Five or more family
|
|
|
|
|
|
|
|
|
Commercial
|
|
|
|
|
|
|
|
|
Construction
|
|
|
|
|
|
|
|
|
Land
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total real estate
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
Consumer and other loans:
|
|
|
|
|
|
|
|
|
Home equity
|
|
|
|
|
|
|
|
|
Commercial
|
|
|
|
|
|
|
|
|
Automobile and other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total consumer and other loans
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
Total nonperforming loans
|
|
$
|
6,513
|
|
|
$
|
6,364
|
|
|
|
|
|
|
|
|
|
|
Foreclosed assets:
|
|
|
|
|
|
|
|
|
One- to four- family
|
|
$
|
163
|
|
|
$
|
140
|
|
Five or more family
|
|
|
|
|
|
|
|
|
Commerical
|
|
|
178
|
|
|
|
365
|
|
Construction
|
|
|
|
|
|
|
|
|
Land
|
|
|
415
|
|
|
|
507
|
|
Consumer
|
|
|
|
|
|
|
|
|
Business assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total foreclosed assets
|
|
$
|
756
|
|
|
$
|
1,012
|
|
|
|
|
|
|
|
|
|
|
Total nonperforming assets
|
|
$
|
7,269
|
|
|
$
|
7,376
|
|
|
|
|
|
|
|
|
|
|
Ratios:
|
|
|
|
|
|
|
|
|
Nonperforming loans to total loans
|
|
|
2.18
|
%
|
|
|
2.13
|
%
|
Nonperforming assets to total assets
|
|
|
1.55
|
%
|
|
|
1.55
|
%
|
(1)
|
$159 of the nonaccrual commercial real estate loans at March 31, 2012 and December 31, 2011, were loans acquired with credit deterioration in the acquisition
of City Savings Bank.
|
(2)
|
At March 31, 2012, $128 of one- to four-family loans, $91 commercial real estate loans and $32 commercial loans were classified as troubled debt restructured
loans. At December 31, 2011, $129 of one- to four-family loans, $92 commercial real estate loans and $33 commercial loans were classified as troubled debt restructured loans.
|
42
PART I FINANCIAL INFORMATION
ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - continued
Goodwill and other Intangible Assets:
The Companys goodwill totaled $8.4
million at March 31, 2012 and at December 31, 2011. Accounting standards require goodwill to be tested for impairment on an annual basis, or more frequently if circumstances indicate that an asset might be impaired, by comparing the fair
value of such goodwill to its recorded or carrying amount. If the carrying amount of the goodwill exceeds the fair value, an impairment charge must be recorded in an amount equal to the excess. The annual impairment review of the $8.4 million of
goodwill previously recorded was performed in the fourth quarter of 2011. The fair value of goodwill was estimated using a number of measurement methods. These included the application of various metrics from bank sale transactions for institutions
comparable to LaPorte Bancorp, Inc. including the application of market-derived multiples of tangible book value and earnings, as well as estimations of the present value of future cash flows. Based on this evaluation completed in February 2012,
management determined that the fair value of the reporting unit, which is defined as the Company as a whole, exceeded the carrying value of the goodwill, based on the opinion of an independent third party specialist that a control premium would be
paid by a potential acquirer, such that the sale price per common share of the Company would exceed its book value per common share. Accordingly, no goodwill impairment was recognized in 2011.
The Companys stock price has increased from the previous analysis and earnings have continued to increase, therefore, management
determined that an updated analysis from an independent third party as of the end of the first quarter was not necessary. A full independent review will be done to test the goodwill for impairment annually unless circumstances indicate an updated
review is necessary. As the Companys market price per share is currently trading below its tangible book value per common share, it is reasonably possible that management may conclude that goodwill, totaling $8.4 million at March 31,
2012, is impaired as a result of a future assessment. If our goodwill is determined to be impaired, the related charge to earnings could be material.
Deposits:
Total deposits increased $8.3 million, or 2.5%, to $341.9 million at March 31, 2012 compared to $333.6 million at December 31, 2011, primarily due to an increase in certificates
of deposit and noninterest bearing deposits. The increase in certificates of deposit was primarily due to increases of $10.0 million in CDARS deposits during the first quarter of 2012. These brokered deposits were purchased to replace the repayment
of a portion of higher costing Federal Home Loan Bank Indianapolis (FHLBI) advances and the Federal Deposit Insurance Corporation (FDIC) guaranteed unsecured borrowing which matured during the first quarter of 2012.
Partially offsetting the increase in brokered CDARS deposits was a decrease in non-brokered certificates of deposit and IRA time deposits of $1.9 million, primarily due to the low interest rate environment. Although management believes the interest
rates offered on certificates of deposit have remained competitive, we have positioned them at or below the average rates offered in the market due to the pricing on alternative sources of funding. Noninterest bearing demand deposits increased $3.1
million, or 8.1%, over the same time period.
Money market accounts decreased $4.2 million, or 7.1%, to $55.8 million at March 31, 2012
compared to $60.0 million at December 31, 2011, primarily due to a decrease in public fund balances from Porter County. Interest bearing demand deposits decreased $1.2 million, or 2.4%, to $48.7 million at March 31, 2012 compared to $49.9
million at December 31, 2011.
Borrowed Funds:
FHLBI borrowings decreased $12.0 million, or 16.7%, to $60.0
million at March 31, 2012 compared to $72.0 million at December 31, 2011. During the first quarter of 2012, $15.0 million in long-term FHLBI advances matured which were replaced by the purchase of $10.0 million in brokered CDARS deposits,
as well as an increase in short-term borrowings with the FHLBI of $3.0 million. The cost of these brokered CDARS deposits and short-term borrowings with the FHLBI were lower than alternative long-term borrowings during the first quarter of 2012.
During the first quarter of 2012, the $5.0 million FDIC guaranteed unsecured borrowing the Bank entered into in 2009 matured and was paid off. The Company also has an unsecured line of credit available at First Tennessee Bank that it can utilize for
temporary liquidity needs. This line was not utilized at March 31, 2012 or December 31, 2011.
43
PART I FINANCIAL INFORMATION
ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - continued
Total Shareholders Equity:
Total shareholders equity increased
$887,000, or 1.6%, to $56.6 million at March 31, 2012 compared to $55.7 million at December 31, 2011, due to an increase of $741,000 in retained earnings, an increase of $65,000 in other comprehensive income and an increase in paid in
capital of $58,000. The increase in retained earnings was the result of the Companys first quarter of 2012 net income of $927,000 less dividends paid during the first quarter of 2012 totaling $186,000. The increase in other comprehensive
income was primarily due to an increase in the fair market value of interest rate swap derivatives of $83,000 ($56,000 net of tax effect) along with an increase in the fair market value of available for sale securities of $15,000 ($9,000 net of tax
effect). Paid in capital has increased $58,000 due to the expenses recorded in relation to the Companys stock option and award plan.
Comparison of Operating Results For Three Month Periods Ended March 31, 2012 and March 31, 2011
Net Income:
Net income increased $149,000, or 19.2%, to $927,000 for the three months ended March 31, 2012 compared to
$778,000 for the three months ended March 31, 2011. Return on average assets for the first quarter of 2012 was 0.79% compared to 0.72% for the prior year period, and return on average equity increased to 6.58% from 6.16% over the same time
period. This increase was primarily attributable to an increase in net interest income partially offset by an increase in provision for loan losses and noninterest expense.
Net Interest Income:
Net interest income increased $492,000, or 15.0%, to $3.8 million for the three months ended March 31, 2012 compared to the same prior year period, primarily due to an
increase in net interest margin of 17 basis points to 3.53% from 3.36%, over the same time period. The net interest spread increased 21 basis points to 3.34% from 3.13%, over the same time period. The increase in net interest margin and net interest
spread was primarily due to a decrease in interest expense when comparing the two time periods. The average cost of interest bearing liabilities decreased 54 basis points to 1.34% for the first quarter of 2012 as compared to the same prior year
period. Partially offsetting this decrease in cost was a decrease in the average yield on interest earning assets of 33 basis points to 4.67% for the first quarter of 2012 as compared to the same prior year period.
Interest and Dividend Income:
Interest and dividend income increased $123,000, or 2.5%, to $5.0 million for the three months ended
March 31, 2012 compared to $4.9 million for the same prior year period, however, the yield on interest-earning assets decreased 33 basis points to 4.67% for the three months ended March 31, 2012. Interest and fee income on loans increased
$211,000, or 5.4%, when comparing the two time periods. This increase was partially offset by a decrease in interest income from taxable securities of $72,000, or 12.5%, and a decrease in income from tax exempt securities of $12,000, or 3.3%, for
the three months ended March 31, 2012 compared to the same prior year period. Average outstanding loan balances increased $44.1 million, primarily due to the increase in average outstanding mortgage warehouse balances, which increased $54.5
million for the first quarter of 2012 which was offset by a decrease in the average yield on loans of 67 basis points to 5.64% when comparing the two time periods. The average yield earned on taxable and tax exempt securities decreased 49 and 29
basis points, respectively, when comparing the two time periods.
Interest and fee income on mortgage warehouse loans increased $437,000, or
46.8%, to $1.4 million for the three months ended March 31, 2012 compared to $934,000 for the same prior year period, primarily due to an increase in average outstanding balances of $54.5 million. Although the average yield of mortgage
warehouse loans decreased 278 basis points to 5.50% when comparing the two time periods, this portfolio continues to provide a key source of business to the Company. An increase in competition for this type of lending, along with the decrease in
overall interest rates has led to the decline in yield for this portfolio.
Interest and fee income on five or more family residential loans
increased $85,000, or 53.1%, for the three months ended March 31, 2012 compared to the same prior year period, primarily due to an increase in the average outstanding balance of $5.9 million over the same time period, as a result of an increase
in demand for these loans in our area.
Interest and fee income on commercial real estate loans remained relatively unchanged for the three
months ended March 31, 2012 compared to the same prior year period.
44
PART I FINANCIAL INFORMATION
ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - continued
The following table sets forth the average balance sheet, average annualized yield and
cost and certain other information for the three months ended March 31, 2012 and March 31, 2011. No tax-equivalent yield adjustments were made. All average balances are daily average balances. Nonaccrual loans were included in the
computation of average balances, but have been reflected in the table as loans carrying a zero yield. The annualized yields set forth below include the effect of deferred fees, discounts and premiums that are amortized or accreted to interest income
or expense.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended March 31,
|
|
|
|
2012
|
|
|
2011
|
|
|
|
(Dollars in thousands)
|
|
|
|
Average
|
|
|
|
|
|
|
|
|
Average
|
|
|
|
|
|
|
|
|
|
Outstanding
|
|
|
|
|
|
Annualized
|
|
|
Outstanding
|
|
|
|
|
|
Annualized
|
|
|
|
Balance
|
|
|
Interest
|
|
|
Yield/Cost
|
|
|
Balance
|
|
|
Interest
|
|
|
Yield/Cost
|
|
Loans
|
|
$
|
291,228
|
|
|
$
|
4,109
|
|
|
|
5.64
|
%
|
|
$
|
247,078
|
|
|
$
|
3,898
|
|
|
|
6.31
|
%
|
Taxable securities
|
|
|
89,283
|
|
|
|
503
|
|
|
|
2.25
|
%
|
|
|
83,837
|
|
|
|
575
|
|
|
|
2.74
|
%
|
Tax exempt securities
|
|
|
37,782
|
|
|
|
352
|
|
|
|
3.73
|
%
|
|
|
36,200
|
|
|
|
364
|
|
|
|
4.02
|
%
|
Federal Home Loan Bank of Indianapolis stock
|
|
|
3,817
|
|
|
|
28
|
|
|
|
2.93
|
%
|
|
|
4,038
|
|
|
|
26
|
|
|
|
2.58
|
%
|
Federal funds sold and other interest-earning deposits
|
|
|
5,477
|
|
|
|
5
|
|
|
|
0.37
|
%
|
|
|
18,620
|
|
|
|
11
|
|
|
|
0.24
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest earning assets
|
|
|
427,587
|
|
|
|
4,997
|
|
|
|
4.67
|
%
|
|
|
389,773
|
|
|
|
4,874
|
|
|
|
5.00
|
%
|
Non-interest earning assets
|
|
|
40,247
|
|
|
|
|
|
|
|
|
|
|
|
42,749
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
467,834
|
|
|
|
|
|
|
|
|
|
|
$
|
432,522
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings deposits
|
|
$
|
51,515
|
|
|
|
7
|
|
|
|
0.05
|
%
|
|
$
|
47,610
|
|
|
|
13
|
|
|
|
0.11
|
%
|
Money market and NOW accounts
|
|
|
100,857
|
|
|
|
120
|
|
|
|
0.48
|
%
|
|
|
91,602
|
|
|
|
169
|
|
|
|
0.74
|
%
|
CDs and IRAs
|
|
|
141,972
|
|
|
|
671
|
|
|
|
1.89
|
%
|
|
|
146,338
|
|
|
|
901
|
|
|
|
2.46
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest-bearing deposits
|
|
|
294,344
|
|
|
|
798
|
|
|
|
1.08
|
%
|
|
|
285,550
|
|
|
|
1,083
|
|
|
|
1.52
|
%
|
FHLB advances
|
|
|
64,501
|
|
|
|
322
|
|
|
|
2.00
|
%
|
|
|
44,766
|
|
|
|
395
|
|
|
|
3.53
|
%
|
Subordinated debentures
|
|
|
5,155
|
|
|
|
70
|
|
|
|
5.43
|
%
|
|
|
5,155
|
|
|
|
69
|
|
|
|
5.35
|
%
|
FDIC guaranteed unsecured borrowing
|
|
|
2,464
|
|
|
|
37
|
|
|
|
6.01
|
%
|
|
|
4,923
|
|
|
|
50
|
|
|
|
4.06
|
%
|
Other borrowings
|
|
|
259
|
|
|
|
1
|
|
|
|
1.54
|
%
|
|
|
22
|
|
|
|
|
|
|
|
0.00
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest-bearing liabilities
|
|
|
366,723
|
|
|
|
1,228
|
|
|
|
1.34
|
%
|
|
|
340,416
|
|
|
|
1,597
|
|
|
|
1.88
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest bearing deposits
|
|
|
38,784
|
|
|
|
|
|
|
|
|
|
|
|
36,376
|
|
|
|
|
|
|
|
|
|
Other liabilities
|
|
|
6,017
|
|
|
|
|
|
|
|
|
|
|
|
5,197
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
411,524
|
|
|
|
|
|
|
|
|
|
|
|
381,989
|
|
|
|
|
|
|
|
|
|
Shareholders equity
|
|
|
56,310
|
|
|
|
|
|
|
|
|
|
|
|
50,533
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities & shareholders equity
|
|
$
|
467,834
|
|
|
|
|
|
|
|
|
|
|
$
|
432,522
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
|
|
|
|
|
|
$
|
3,769
|
|
|
|
|
|
|
|
|
|
|
$
|
3,277
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest rate spread
|
|
|
|
|
|
|
|
|
|
|
3.34
|
%
|
|
|
|
|
|
|
|
|
|
|
3.13
|
%
|
Net interest margin
|
|
|
|
|
|
|
|
|
|
|
3.53
|
%
|
|
|
|
|
|
|
|
|
|
|
3.36
|
%
|
45
PART I FINANCIAL INFORMATION
ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - continued
Interest and fee income on one- to four-family residential loans decreased $188,000, or 22.7%, to
$639,000 for the three months ended March 31, 2012 compared to the same prior year period, due to a decrease in average outstanding balances as well as the average yield on this portfolio. Average outstanding balances decreased $11.1 million,
or 19.7%, to $45.2 million and the average yield decreased 22 basis points to 5.65% for the first quarter of 2012 compared to the first quarter of 2011. The Bank continues to sell the majority of its fixed rate one- to four-family residential loans
originated, and as a result, the continued refinance activity has contributed to the decrease in average outstanding balances and interest income.
Interest income from taxable securities decreased $72,000, or 12.5%, to $503,000 for the three months ended March 31, 2012 compared to the same prior year period, due to a decrease in the average
yield of 49 basis points, while the average outstanding balance increased $5.4 million. Management anticipates that the continued low interest rate environment will negatively impact the yield on this portfolio. Interest income from tax exempt
securities decreased $12,000, or 3.3%, to $352,000 for the three months ended March 31, 2012 compared to $364,000 for the same prior year period. The average yield on tax exempt securities decreased 29 basis points when comparing the two time
periods.
Interest Expense:
Interest expense decreased $369,000, or 23.1%, to $1.2 million for the three months ended
March 31, 2012 compared to $1.6 million for the three months ended March 31, 2011. The average cost of interest bearing liabilities decreased 54 basis points to 1.34% for the three months ended March 31, 2012 from 1.88% when comparing
the two time periods, primarily due to a decrease in the cost of interest bearing deposits of 44 basis points and a decrease in the cost of FHLBI advances of 153 basis points.
Interest expense on certificates of deposit and IRA time deposits decreased $230,000, or 25.5%, to $671,000 for the three months ended March 31, 2012 compared to $901,000 for the same prior year
period. Interest rates offered on certificates of deposit and IRA time deposits have decreased significantly compared to the rates on maturing certificates of deposit and IRA time deposits resulting in this decrease in interest expense. The average
cost of certificates of deposit and IRA time deposits decreased 57 basis points to 1.89% for the three months ended March 31, 2012. Interest expense on money market accounts decreased $49,000, or 29.0%, to $120,000 for the three months ended
March 31, 2012 compared to $169,000 for the same prior year period. The average cost of money market accounts decreased 26 basis points while the average outstanding balance increased $9.3 million when comparing the two time periods. The
Company has continued to offer competitive interest rates on money market accounts in order to attract these relatively low cost deposits to aid in funding its mortgage warehouse division.
Interest expense on FHLBI advances decreased $73,000, or 18.5%, to $322,000 for the three months ended March 31, 2012 compared to $395,000 for the same prior year period. The average cost of these
borrowings decreased 153 basis points for the three months ended March 31, 2012 to 2.00% compared to 3.53% for the same prior year period. This decline was primarily due to a number of fixed rate longer term advances that matured during 2011
and were replaced at a significantly lower cost of funding.
Provision for Loan Losses:
The Bank recognizes a provision
for loan losses, which is charged to earnings, at a level necessary to absorb known and inherent losses that are both probable and reasonably estimable at the date of the financial statements. In evaluating the level of the allowance for loan
losses, management considers historical loan loss experience, the types of loans and the amount of loans in the loan portfolio, adverse situations that may affect borrowers ability to repay, the estimated value of any underlying collateral and
prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available or as future events occur. After an evaluation of these factors,
management recognized a provision for loan losses of $228,000 for the three months ended March 31, 2012 compared to $28,000 for the same prior year period. Net charge-offs for the first quarters of 2012 and 2011 totaled $36,000 and $441,000,
respectively. Net charge-offs of $390,000 for the three months ended March 31, 2011 were specifically reserved for in prior periods.
46
PART I FINANCIAL INFORMATION
ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - continued
The increase in the provision amount was primarily due to the increase in outstanding loan balances.
Total outstanding loan balances, not including the allowance for loan losses, increased $30.4 million to $298.5 million at March 31, 2012 compared to $268.1 million at March 31, 2011. Also, given the overall economic concerns, we rely on
more recent loan loss experience ranging from twelve to eighteen months to establish the minimum reserve ratios for our general loan pools.
Noninterest Income:
Noninterest income increased $48,000, or 8.9%, to $589,000 for the three months ended March 31, 2012 compared to $541,000 for the same prior year period. Gains on mortgage
banking activities increased $126,000 due to an increase in refinance activity when comparing the first quarters of 2012 and 2011. Net gain on sales of securities increased $84,000 for the three months ended March 31, 2012 compared to the same
prior year period. Losses on other assets increased $129,000 primarily due to the write-down of several other real estate owned properties during the first quarter of 2012. Service charge income decreased $29,000, or 21.3%, to $107,000 for the three
months ended March 31, 2012 from $136,000 for the same prior year period. The Bank continues to see a decrease in non-sufficient funds/overdraft fee income due to the regulations impacting the Banks ability to charge for certain types of
overdraft activity.
Noninterest Expense:
Noninterest expense increased $114,000, or 4.0%, to $3.0 million for the
three months ended March 31, 2012 compared to $2.8 million for the same prior year period, primarily due to an increase in salaries and wages of $137,000, or 9.0%. Payroll expenses increased $93,000, or 7.8%, for the three months ended
March 31, 2012 compared to the same prior year period as a result of an increase in staffing to the Banks commercial credit department, along with annual salary increases. During the third quarter of 2011, the Company implemented a stock
award and option plan which resulted in an increase to compensation expense of $61,000 for the three months ended March 31, 2012 compared to the same prior year period. Advertising expense increased $35,000 primarily due to an increase in the
Banks advertising design services as well as an increase in promotional items purchased when comparing the two time periods. Other expenses increased $23,000, or 6.4%, primarily due to an increase in attorney fees for the three months ended
March 31, 2012 compared to the same prior year period. Data processing expense increased $19,000, or 17.6%, for the three months ended March 31, 2012 compared to the same prior year period primarily due to expense related to a new disaster
recovery solution the Bank implemented in 2011.
Partially offsetting these increases was a decrease in FDIC insurance of $49,000, or 36.8%,
attributable to the change in the formula of the assessment and its impact on the Bank. The amortization of intangible assets decreased $28,000, or 48.3%, as the core deposit intangible asset recorded by the Bank is amortized into expense on an
accelerated basis and the customer intangible asset was fully amortized during the third quarter of 2011.
Income Taxes:
Income tax expense increased $77,000, or 45.3%, to $247,000 for the three months ended March 31, 2012 compared to $170,000 for the same prior year period, primarily due to an increase in income before taxes of $226,000, as well as an
increase in the effective tax rate. The effective tax rate for the three months ended March 31, 2012 was 21.0% compared to 17.9% for the same prior year period. The effective tax rates fluctuate based on the ratio of total income before tax
attributable to tax exempt securities and life insurance income, in addition to the amount of loan charge-offs during the year.
47
PART I FINANCIAL INFORMATION
ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - continued
Liquidity and Capital Resources
Maintenance of adequate liquidity requires that sufficient resources be available at all times to meet cash flow requirements of the Company. Liquidity in a banking institution is required primarily to
provide for deposit withdrawals and the credit needs of customers and to take advantage of investment opportunities as they arise. A bank may achieve desired liquidity from both assets and liabilities. Cash and deposits held in other financial
institutions, Federal funds sold, other short term investments in interest-earning time deposits in other financial institutions and securities available-for-sale, maturing loans and investments, payments of principal and interest on loans and
investments, and potential loan sales are sources of asset liquidity. Deposit growth and access to credit lines established with correspondent banks, the Federal Home Loan Bank and market sources of funds are sources of liability liquidity. The
Company reviews its liquidity position on a regular basis based upon its current position and expected trends of loans and deposits. The policy of the Board of Directors is to maintain sufficient capital at not less than the
well-capitalized thresholds established by banking regulators. Management believes that the Company maintains adequate sources of liquidity to meet its liquidity needs.
The Companys liquid assets, defined as cash and due from financial institutions and the market value of unpledged securities available-for-sale, totaled $93.3 million at March 31, 2012 and
constituted 19.88% of total assets at that date, compared to $106.5 million, or 22.31%, of total assets at December 31, 2011.
The
Company also maintains lines of credit with the Federal Home Loan Bank. The total of these lines of credit were $74.9 million at March 31, 2012, of which $60.0 million in Federal Home Loan Bank advances were outstanding. The Company has
additional securities and certain approved real estate loans available to pledge as collateral in order to increase our lines of credit with the Federal Home Loan Bank. At March 31, 2012, we had $87.6 million in unpledged securities available
for sale. The Company actively utilizes its borrowing capacity with the Federal Home Loan Bank to manage liquidity and to provide a funding alternative to time deposits, if the Federal Home Loan Banks rates and terms are more favorable. The
advances from the Federal Home Loan Bank can have maturities from overnight to multiple years. At March 31, 2012, $35.0 million of these advances were due within one year, and $25.0 million had maturities greater than a year.
The Company may also utilize the Federal Reserve discount window as a source of short-term funding. At March 31, 2012, the Companys overnight
borrowings with the Federal Reserve Bank discount window totaled $0. The Companys borrowing capacity at the Federal Reserve Bank discount window is based on the collateral value of pledged securities. During the second quarter of 2010, the
Federal Reserve announced the discount window would return to its original intent of being a lender of last resort. The collateral value of securities pledged to the Federal Reserve discount window at March 31, 2012 totaled $9.8
million.
During the first quarter of 2012, the Company was extended an accommodation from First Tennessee Bank National Association to borrow
federal funds up to the amount of $15.0 million. This federal funds accommodation is not and shall not be a confirmed line or loan, and First Tennessee Bank National Association may cancel such accommodation at any time, in whole or in part, without
cause or notice, in its sole discretion. At March 31, 2012, the Companys borrowings from First Tennessee Bank National Association totaled $0.
Federal regulations establish guidelines for calculating risk-adjusted capital ratios and minimum ratio requirements. Under these regulations, banks are required to maintain a total risk-based
capital ratio of 8.0% of risk-weighted assets and a Tier 1 risk-based capital ratio (primarily total shareholders equity less intangible assets) of at least 4.0% of risk-weighted assets. The Bank had total and Tier 1 risk-based capital ratios
of 15.2% and 14.0%, respectively, at March 31, 2012, and was well-capitalized under the regulatory guidelines.
48
PART I FINANCIAL INFORMATION
ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - continued
In addition, regulators have adopted a minimum leverage ratio standard for Tier 1 capital to average
assets. The minimum ratio for top-rated institutions may be as low as 3%. However, regulatory agencies have stated that most institutions should maintain ratios at least 1 to 2 percentage points above the 3% minimum. As of March 31, 2012, the
Banks leverage ratio was 10.1%. Capital levels for the Bank remain above the established regulatory capital requirements.
Impact of
Inflation
The primary impact of inflation on the Bank is its effect on interest rates. The Banks primary source of income is
net interest income, which is affected by changes in interest rates. The Bank attempts to limit the impact of inflation on its net interest margin through management of interest rate-sensitive assets and liabilities and analyses of interest rate
sensitivity. The effect of inflation on premises and equipment as well as on noninterest expenses has not been significant for the periods presented.
49
PART I FINANCIAL INFORMATION
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
Proper management of the interest rate sensitivity and maturities of our assets and liabilities is required to protect and enhance our
net interest margin and asset values, subject to market conditions. Interest rate sensitivity spread management is an important tool for achieving this objective and for developing ways in which to improve profitability.
The Company constantly monitors earning asset and deposit levels, developments and trends in interest rates, liquidity, capital adequacy and marketplace
opportunities. Management responds to all of these to protect and possibly enhance net interest income while managing risks within acceptable levels as set forth in the Companys policies. In addition, alternative business plans and
transactions are contemplated for their potential impact. This process is known as asset/liability management and is carried out by changing the maturities and relative proportions of the various types of loans, investments, deposits and borrowings
in the ways described above.
A commonly used tool to manage and analyze the interest rate sensitivity of a bank is a computer simulation
model. To quantify the extent of risks in both the Companys current position and in transactions it might make in the future, the Company uses a model to simulate the impact of different interest rate scenarios on net interest income. The
hypothetical impact of a 12 month nonparallel ramp (generally, a nonparallel change in interest rates of +/- 3.00%) and smaller incremental interest rate changes are modeled at least quarterly, representing the primary means the Company uses for
interest rate risk management decisions.
At March 31, 2012, given a +3.00% or 1.00% shock in interest rates, our model results in
the Banks net interest income for the next twelve months changing by $(298,000), or (1.87)%, and $(40,000), or (0.25)%, respectively. The Banks Interest Rate Risk Management (IRRM) Policy sets limits for changes in net
interest income given a +3.00% or -1.00% shock in interest rates of (15.00)% and (5.00)%, respectively.
The Company measures its economic
value of equity at risk on a quarterly basis. Economic value of equity at risk measures the Companys exposure to changes in its economic value of equity due to changes in a forecast interest rate environment. At March 31, 2012, given a
+3.00% or -1.00% shock in interest rates, our model results in the Banks economic value of equity at risk for the next twelve months changing by (3.75)%, and (6.12)%, respectively. The Banks IRRM Policy sets limits for changes in the
Banks economic value of equity at risk given a +3.00% or -1.00% shock in interest rates of (25.00)% and (15.00)%, respectively.
At
March 31, 2012, the Bank was in compliance with its IRRM Policy limits regarding shocks in interest rates for changes in its net interest income and its economic value of equity.
When preparing its modeling, the Company makes significant assumptions about the lag in the rate of change in various asset and liability categories. The Company bases its assumptions on past experience
and comparisons with other banks, and tests the validity of its assumptions by reviewing actual results with projected expectations.
50
PART I FINANCIAL INFORMATION
ITEM 4. CONTROLS AND PROCEDURES
The Company has adopted disclosure controls and procedures designed to facilitate financial reporting. The Companys disclosure controls currently
consist of communications among the Companys Chief Executive Officer, the Companys Chief Financial Officer and each department head to identify any transactions, events, trends, risks or contingencies which may be material to its
operations. These disclosure controls also contain certain elements of the Companys internal controls adopted in connection with applicable accounting and regulatory guidelines. In addition, the Companys Chief Executive Officer, Chief
Financial Officer, Audit Committee and independent registered public accounting firm also meet on a quarterly basis to discuss disclosure matters. The Companys Chief Executive Officer and Chief Financial Officer have evaluated the
effectiveness of the Companys disclosure controls and procedures as of the end of the period covered by this report and found them to be effective.
The Company maintains internal control over financial reporting. There have not been any significant changes in such internal control over financial reporting in the last quarter that has materially
affected, or is likely to materially affect, our internal control over financial reporting.
51
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
As of March 31, 2012, there are no material pending legal proceedings to which the Company or its subsidiaries is a party other than ordinary routine litigation incidental to their respective
businesses.
ITEM 1A. RISK FACTORS
As of March 31, 2012, there were no material changes to the Risk Factors disclosed in the Companys Annual Report
for the year ended December 31, 2011 on Form 10-K filed on March 27, 2012. However, the risks described in our 2011 Annual Report on Form 10-K are not the only risks that we face. Additional risks not presently known to us, or that we
currently deem immaterial, may also adversely affect our business, financial condition or results of operations.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
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(a)
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Unregistered Sales of Equity Securities: Not applicable
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(b)
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Use of Proceeds: Not applicable
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(c)
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Repurchase of Our Equity Securities: Not applicable
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ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable
ITEM 5. OTHER INFORMATION
None
52
PART II OTHER INFORMATION
ITEM 6. EXHIBITS
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Exhibit Number
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Description
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31.01
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Certification of Principal Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
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|
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31.02
|
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Certification of Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
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|
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32.01
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Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002*
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|
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101
|
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Interactive data files pursuant to Rule 405 of Regulation S-T: (i) the Consolidated Balance Sheets as of March 31, 2012 and December 31, 2011, (ii) the Consolidated Statements of
Income for the three months ended March 31, 2012 and 2011, (iii) the Consolidated Statements of Comprehensive Income for the three months ended March 31, 2012 and 2011, (iv) the Consolidated Statements of Changes in Shareholders Equity for the
three months ended March 31, 2012 and 2011, (v) the Consolidated Statements of Cash Flows for the three months ended March 31, 2012 and 2011, and (vi) the notes to the Consolidated Financial Statements.*
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*
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This information is furnished and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of Section 18 of the Securities
Exchange Act of 1934.
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53
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
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LaPorte Bancorp, Inc.
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|
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|
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May 14, 2012
Date
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/s/ Lee A. Brady
Lee A. Brady,
Chief Executive Officer
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|
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|
|
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May 14, 2012
Date
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/s/ Michele M. Thompson
Michele M. Thompson,
President and
Chief Financial Officer
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|
|
54
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