MAINE
|
01-0413282
|
(State
or other jurisdiction of
|
(I.R.S.
Employer
|
incorporation
or organization)
|
Identification
No.)
|
2
ELM STREET, CAMDEN, ME
|
04843
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Large
accelerated filer ¨
|
Accelerated
filer x
|
Non-accelerated
filer ¨
|
Smaller
reporting company ¨
|
(
Do not check if a smaller reporting company)
|
PAGE
|
|||
PART
I. FINANCIAL INFORMATION
|
|||
ITEM
1.
|
FINANCIAL
STATEMENTS
|
||
Report
of Independent Registered Public Accounting Firm
|
3
|
||
Consolidated
Statements of Condition June 30, 2010 and December 31,
2009
|
4
|
||
Consolidated
Statements of Income Three and Six Months Ended June 30, 2010 and
2009
|
5
|
||
Consolidated
Statements of Changes in Shareholders’ Equity Six Months Ended June 30,
2010 and 2009
|
6
|
||
Consolidated
Statements of Cash Flows Six Months Ended June 30, 2010 and
2009
|
7
|
||
Notes
to Consolidated Financial Statements Six Months Ended June 30, 2010 and
2009
|
8-18
|
||
ITEM
2.
|
MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
19-32
|
|
ITEM
3.
|
QUANTITATIVE
AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
|
33-34
|
|
ITEM
4.
|
CONTROLS
AND PROCEDURES
|
35
|
|
PART
II. OTHER INFORMATION
|
|||
ITEM
1.
|
LEGAL
PROCEEDINGS
|
36
|
|
ITEM
1A.
|
RISK
FACTORS
|
36
|
|
ITEM
2.
|
UNREGISTERED
SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
36
|
|
ITEM
3.
|
DEFAULTS
UPON SENIOR SECURITIES
|
36
|
|
ITEM
4.
|
[REMOVED
AND RESERVED]
|
36
|
|
ITEM
5.
|
OTHER
INFORMATION
|
36
|
|
ITEM
6.
|
EXHIBITS
|
37
|
|
SIGNATURES
|
38
|
||
EXHIBIT
INDEX
|
39
|
||
EXHIBITS
|
|
/s/ Berry, Dunn, McNeil &
Parker
|
Berry,
Dunn, McNeil & Parker
|
June 30,
|
December 31,
|
|||||||
2010
|
2009
|
|||||||
(In Thousands, Except Number of Shares)
|
(unaudited)
|
|||||||
ASSETS
|
||||||||
Cash
and due from banks
|
$
|
24,236
|
$
|
29,772
|
||||
Securities
|
|
|||||||
Securities
available for sale, at fair value
|
533,736
|
479,708
|
||||||
Securities
held to maturity, at amortized cost (fair value $39,909 and $39,639 at
June 30, 2010 and December 31, 2009, respectively)
|
37,786
|
37,914
|
||||||
Federal
Home Loan Bank and Federal Reserve Bank stock, at cost
|
21,965
|
21,965
|
||||||
Total
securities
|
593,487
|
539,587
|
||||||
Trading
account assets
|
2,013
|
1,725
|
||||||
Loans
|
1,542,074
|
1,526,758
|
||||||
Less
allowance for loan losses
|
(22,266
|
)
|
(20,246
|
)
|
||||
Net
loans
|
1,519,808
|
1,506,512
|
||||||
Goodwill
and other intangible assets
|
46,110
|
46,398
|
||||||
Bank-owned
life insurance
|
42,395
|
41,677
|
||||||
Premises
and equipment, net
|
26,230
|
26,054
|
||||||
Deferred
tax asset
|
10,370
|
10,317
|
||||||
Prepaid
FDIC assessment
|
7,187
|
8,197
|
||||||
Interest
receivable
|
7,558
|
7,236
|
||||||
Other
real estate owned
|
3,967
|
5,479
|
||||||
Other
assets
|
11,473
|
12,429
|
||||||
Total
assets
|
$
|
2,294,834
|
$
|
2,235,383
|
||||
LIABILITIES
AND SHAREHOLDERS’ EQUITY
|
||||||||
Liabilities
|
||||||||
Deposits:
|
||||||||
Demand
|
$
|
202,448
|
$
|
193,549
|
||||
Interest
checking, savings and money market
|
693,644
|
675,681
|
||||||
Retail
certificates of deposit
|
522,894
|
545,789
|
||||||
Brokered
deposits
|
129,690
|
80,788
|
||||||
Total
deposits
|
1,548,676
|
1,495,807
|
||||||
Federal
Home Loan Bank advances
|
174,503
|
209,710
|
||||||
Other
borrowed funds
|
306,186
|
274,125
|
||||||
Junior
subordinated debentures
|
43,563
|
43,512
|
||||||
Accrued
interest and other liabilities
|
22,191
|
21,668
|
||||||
Total
liabilities
|
2,095,119
|
2,044,822
|
||||||
|
||||||||
Shareholders’
Equity
|
|
|||||||
Common
stock, no par value; authorized 20,000,000 shares, issued and outstanding
7,657,098 and 7,644,837 shares on June 30, 2010 and December 31, 2009,
respectively
|
50,376
|
50,062
|
||||||
Retained
earnings
|
140,656
|
133,634
|
||||||
Accumulated
other comprehensive income
|
||||||||
Net
unrealized gains on securities available for sale, net of
tax
|
11,066
|
7,083
|
|
|||||
Net
unrealized (losses) gains on derivative instruments, at fair value, net of
tax
|
(1,442
|
)
|
739
|
|||||
Net
unrecognized losses on postretirement plans, net of tax
|
(941
|
)
|
(957
|
)
|
||||
Total
accumulated other comprehensive income
|
8,683
|
6,865
|
|
|||||
Total
shareholders’ equity
|
199,715
|
190,561
|
||||||
Total
liabilities and shareholders’ equity
|
$
|
2,294,834
|
$
|
2,235,383
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||
(In Thousands, Except Number of Shares and per Share Data)
|
2010
|
2009
|
2010
|
2009
|
||||||||||||
Interest
Income
|
||||||||||||||||
Interest
and fees on loans
|
$
|
20,593
|
$
|
21,270
|
$
|
41,040
|
$
|
42,891
|
||||||||
Interest
on U.S. government and sponsored enterprise obligations
|
5,166
|
6,765
|
10,329
|
14,000
|
||||||||||||
Interest
on state and political subdivision obligations
|
534
|
628
|
1,073
|
1,273
|
||||||||||||
Interest
on federal funds sold and other investments
|
31
|
31
|
56
|
72
|
||||||||||||
Total
interest income
|
26,324
|
28,694
|
52,498
|
58,236
|
||||||||||||
Interest
Expense
|
||||||||||||||||
Interest
on deposits
|
3,957
|
5,936
|
8,078
|
12,330
|
||||||||||||
Interest
on borrowings
|
3,110
|
3,703
|
6,404
|
7,637
|
||||||||||||
Interest
on junior subordinated debentures
|
702
|
711
|
1,396
|
1,424
|
||||||||||||
Total
interest expense
|
7,769
|
10,350
|
15,878
|
21,391
|
||||||||||||
Net
interest income
|
18,555
|
18,344
|
36,620
|
36,845
|
||||||||||||
Provision
for credit losses
|
1,950
|
2,784
|
3,946
|
4,514
|
||||||||||||
Net
interest income after provision for credit losses
|
16,605
|
15,560
|
32,674
|
32,331
|
||||||||||||
Non-Interest
Income
|
||||||||||||||||
Income
from fiduciary services
|
1,512
|
1,507
|
3,079
|
2,861
|
||||||||||||
Service
charges on deposit accounts
|
1,285
|
1,349
|
2,565
|
2,582
|
||||||||||||
Other
service charges and fees
|
872
|
811
|
1,562
|
1,424
|
||||||||||||
Bank-owned
life insurance
|
347
|
345
|
718
|
740
|
||||||||||||
Brokerage
and insurance commissions
|
352
|
285
|
646
|
643
|
||||||||||||
Mortgage
banking income
|
83
|
416
|
172
|
871
|
||||||||||||
Other
income
|
105
|
331
|
434
|
477
|
||||||||||||
Non-interest
income before other-than-temporary
|
||||||||||||||||
impairment
of securities
|
4,556
|
5,044
|
9,176
|
9,598
|
||||||||||||
Other-than-temporary
impairment of securities
|
(131
|
)
|
—
|
(179
|
)
|
—
|
||||||||||
Total
non-interest income
|
4,425
|
5,044
|
8,997
|
9,598
|
||||||||||||
Non-Interest
Expenses
|
||||||||||||||||
Salaries
and employee benefits
|
6,298
|
6,446
|
12,523
|
12,124
|
||||||||||||
Furniture,
equipment and data processing
|
1,115
|
1,030
|
2,246
|
2,033
|
||||||||||||
Regulatory
assessments
|
602
|
1,739
|
1,317
|
2,611
|
||||||||||||
Net
occupancy
|
897
|
962
|
1,931
|
2,080
|
||||||||||||
Consulting
and professional fees
|
549
|
627
|
1,337
|
1,184
|
||||||||||||
Other
real estate owned and collection costs
|
1,158
|
282
|
2,132
|
1,162
|
||||||||||||
Amortization
of intangible assets
|
144
|
144
|
288
|
289
|
||||||||||||
Other
expenses
|
2,094
|
2,186
|
4,005
|
4,224
|
||||||||||||
Total
non-interest expenses
|
12,857
|
13,416
|
25,779
|
25,707
|
||||||||||||
Income
before income taxes
|
8,173
|
7,188
|
15,892
|
16,222
|
||||||||||||
Income
Taxes
|
2,587
|
2,184
|
4,993
|
5,004
|
||||||||||||
Net
Income
|
$
|
5,586
|
$
|
5,004
|
$
|
10,899
|
$
|
11,218
|
||||||||
Per
Share Data
|
||||||||||||||||
Basic
earnings per share
|
$
|
0.73
|
$
|
0.66
|
$
|
1.42
|
$
|
1.47
|
||||||||
Diluted
earnings per share
|
$
|
0.73
|
$
|
0.65
|
$
|
1.42
|
$
|
1.47
|
||||||||
Weighted
average number of common shares outstanding
|
7,656,051
|
7,641,083
|
7,654,079
|
7,640,119
|
||||||||||||
Diluted
weighted average number of common shares outstanding
|
7,664,443
|
7,648,023
|
7,661,607
|
7,644,424
|
(In Thousands, Except Number of
Shares and per Share Data)
|
Common
Stock
|
Retained
Earnings
|
Net
Unrealized
Gains
(Losses) on
Securities
Available
for Sale
|
Net
Unrealized
Gains
(Losses) on
Derivative
Instruments
|
Net
Unrecognized
Losses on
Postretirement
Plans
|
Total
Shareholders’
Equity
|
||||||||||||||||||
Balance
at December 31, 2008
|
$
|
48,984
|
$
|
118,564
|
$
|
(89
|
)
|
$
|
—
|
$
|
(1,059
|
)
|
$
|
166,400
|
||||||||||
Net
income
|
—
|
11,218
|
—
|
—
|
—
|
11,218
|
||||||||||||||||||
Change
in unrealized gains on securities available for sale, net of taxes of
($1,524)
|
—
|
—
|
2,831
|
—
|
—
|
2,831
|
||||||||||||||||||
Change
in unrealized gains on derivative instruments at fair value, net of taxes
of ($205)
|
—
|
—
|
—
|
382
|
—
|
382
|
||||||||||||||||||
Change
in net unrecognized losses on postretirement plans, net of taxes of
($16)
|
—
|
—
|
—
|
—
|
31
|
31
|
||||||||||||||||||
Total
comprehensive income
|
—
|
11,218
|
2,831
|
382
|
31
|
14,462
|
||||||||||||||||||
Stock-based
compensation expense
|
239
|
—
|
—
|
—
|
—
|
239
|
||||||||||||||||||
Exercise
of stock options and issuance of restricted stock (5,079
shares)
|
10
|
—
|
—
|
—
|
—
|
10
|
||||||||||||||||||
Common
stock repurchased (1,690 shares)
|
—
|
(55
|
)
|
—
|
—
|
—
|
(55
|
)
|
||||||||||||||||
Cash
dividends declared ($0.50/share)
|
—
|
(3,827
|
)
|
—
|
—
|
—
|
(3,827
|
)
|
||||||||||||||||
Balance
at June 30, 2009
|
$
|
49,233
|
$
|
125,900
|
$
|
2,742
|
$
|
382
|
$
|
(1,028
|
)
|
$
|
177,229
|
|||||||||||
Balance
at December 31, 2009
|
$
|
50,062
|
$
|
133,634
|
$
|
7,083
|
$
|
739
|
$
|
(957
|
)
|
$
|
190,561
|
|||||||||||
Net
income
|
—
|
10,899
|
—
|
—
|
—
|
10,899
|
||||||||||||||||||
Change
in unrealized gains on securities available for sale, net of taxes of
($2,144)
|
—
|
—
|
3,983
|
—
|
—
|
3,983
|
||||||||||||||||||
Change
in unrealized losses on derivative instruments at fair value, net of taxes
of $1,174
|
—
|
—
|
—
|
(2,181
|
)
|
—
|
(2,181
|
)
|
||||||||||||||||
Change
in net unrecognized losses on postretirement plans, net of taxes of
($9)
|
—
|
—
|
—
|
—
|
16
|
16
|
||||||||||||||||||
Total
comprehensive income
|
—
|
10,899
|
3,983
|
(2,181
|
)
|
16
|
12,717
|
|||||||||||||||||
Stock-based
compensation expense
|
236
|
—
|
—
|
—
|
—
|
236
|
||||||||||||||||||
Exercise
of stock options and issuance of restricted stock (16,399
shares)
|
78
|
—
|
—
|
—
|
—
|
78
|
||||||||||||||||||
Common
stock repurchased (1,385 shares)
|
—
|
(44
|
)
|
—
|
—
|
—
|
(44
|
)
|
||||||||||||||||
Cash
dividends declared ($0.50/share)
|
—
|
(3,833
|
)
|
—
|
—
|
—
|
(3,833
|
)
|
||||||||||||||||
Balance
at June 30, 2010
|
$
|
50,376
|
$
|
140,656
|
$
|
11,066
|
$
|
(1,442
|
)
|
$
|
(941
|
)
|
$
|
199,715
|
|
Six Months Ended June 30,
|
|||||||
(In Thousands)
|
2010
|
2009
|
||||||
Operating
Activities
|
||||||||
Net
income
|
$
|
10,899
|
$
|
11,218
|
||||
Adjustments
to reconcile net income to net cash provided (used) by operating
activities:
|
||||||||
Provision
for credit losses
|
3,946
|
4,514
|
||||||
Depreciation
and amortization
|
1,687
|
1,370
|
||||||
Stock-based
compensation expense
|
236
|
239
|
||||||
(Increase)
decrease in interest receivable
|
(322
|
)
|
415
|
|||||
Amortization
of intangible assets
|
288
|
289
|
||||||
Net
increase in trading assets
|
(288
|
)
|
(191
|
)
|
||||
Other-than-temporary
impairment of securities
|
179
|
—
|
||||||
Increase
in other real estate owned valuation allowance
|
1,050
|
666
|
||||||
Originations
of mortgage loans held for sale
|
—
|
(61,364
|
)
|
|||||
Proceeds
from the sale of mortgage loans
|
—
|
44,000
|
||||||
Gain
on sale of mortgage loans
|
—
|
(135
|
)
|
|||||
Liquidation
of defined benefit pension plan
|
—
|
(735
|
)
|
|||||
Decrease
in prepaid FDIC assessment
|
1,010
|
—
|
||||||
Increase
in other assets
|
(2,317
|
)
|
(3,238
|
)
|
||||
(Decrease)
increase in other liabilities
|
(1,486
|
)
|
1,087
|
|||||
Net
cash provided (used) by operating activities
|
14,882
|
(1,865
|
)
|
|||||
Investing
Activities
|
||||||||
Proceeds
from maturities of securities held to maturity
|
100
|
1,042
|
||||||
Proceeds
from sales and maturities of securities available for sale
|
78,704
|
91,600
|
||||||
Purchase
of securities available for sale
|
(126,992
|
)
|
(25,557)
|
|||||
Net
(increase) decrease in loans
|
(17,411
|
)
|
389
|
|||||
Proceeds
from the sale of other real estate owned
|
857
|
328
|
||||||
Purchase
of premises and equipment
|
(1,349
|
)
|
(573
|
)
|
||||
Net
cash (used) provided by investing activities
|
(66,091
|
)
|
67,229
|
|||||
Financing
Activities
|
||||||||
Net
increase (decrease) in deposits
|
52,862
|
(12,736)
|
||||||
Proceeds
from Federal Home Loan Bank long-term advances
|
20,177
|
7,948
|
||||||
Repayments
on Federal Home Loan Bank long-term advances
|
(55,384
|
)
|
(49,123
|
)
|
||||
Net
change in short-term Federal Home Loan Bank borrowings
|
32,785
|
(32,380
|
)
|
|||||
Net
(decrease) increase in other borrowed funds
|
(972
|
)
|
28,261
|
|||||
Exercise
of stock options and issuance of restricted stock
|
78
|
10
|
||||||
Common
stock repurchase
|
(44
|
)
|
(55
|
)
|
||||
Cash
dividends paid on common stock
|
(3,829
|
)
|
(3,827
|
)
|
||||
Net
cash provided (used) by financing activities
|
45,673
|
(61,902
|
)
|
|||||
Net
(decrease) increase in cash and cash equivalents
|
(5,536
|
)
|
3,462
|
|||||
Cash
and cash equivalents at beginning of year
|
29,772
|
35,195
|
||||||
Cash
and cash equivalents at end of period
|
$
|
24,236
|
$
|
38,657
|
||||
Supplemental
information
|
||||||||
Interest
paid
|
$
|
16,256
|
$
|
22,061
|
||||
Income
taxes paid
|
6,840
|
2,900
|
||||||
Transfer
from loans to other real estate owned
|
584
|
2,826
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||
Net
income, as reported
|
$
|
5,586
|
$
|
5,004
|
$
|
10,899
|
$
|
11,218
|
||||||
Weighted-average
common shares outstanding – basic
|
7,656,051
|
7,641,083
|
7,654,079
|
7,640,119
|
||||||||||
Dilutive
effect of stock-based compensation
|
8,392
|
6,940
|
7,528
|
4,305
|
||||||||||
Weighted-average
common and potential common shares – diluted
|
|
7,664,443
|
7,648,023
|
7,661,607
|
7,644,424
|
|||||||||
Basic
earnings per share – common stock
|
$
|
0.73
|
$
|
0.66
|
$
|
1.42
|
$
|
1.47
|
||||||
Basic
earnings per share – unvested share-based payment awards
|
0.73
|
0.66
|
1.42
|
1.47
|
||||||||||
Diluted
earnings per share – common stock
|
0.73
|
0.65
|
1.42
|
1.47
|
||||||||||
Diluted
earnings per share – unvested share-based payment awards
|
0.73
|
0.65
|
1.42
|
1.47
|
Amortized
Cost
|
Unrealized
Gains
|
Unrealized
Losses
|
Fair
Value
|
|||||||||||||
June 30, 2010
|
||||||||||||||||
Available
for sale
|
||||||||||||||||
Obligations
of U.S. Government sponsored enterprises
|
$
|
50,000
|
$
|
283
|
$
|
—
|
$
|
50,283
|
||||||||
Obligations
of states and political subdivisions
|
16,613
|
542
|
—
|
17,155
|
||||||||||||
Mortgage-backed
securities issued or guaranteed by U.S. government sponsored
enterprises
|
414,558
|
20,053
|
(2
|
)
|
434,609
|
|||||||||||
Private
issue collateralized mortgage obligations
|
30,541
|
8
|
(3,380
|
)
|
27,169
|
|||||||||||
Total
debt securities
|
511,712
|
20,886
|
(3,382
|
)
|
529,216
|
|||||||||||
Equity
securities
|
5,000
|
—
|
(480
|
)
|
4,520
|
|||||||||||
Total
securities available for sale
|
$
|
516,712
|
$
|
20,886
|
$
|
(3,862
|
)
|
$
|
533,736
|
|||||||
Held
to maturity
|
||||||||||||||||
Obligations
of states and political subdivisions
|
$
|
37,786
|
$
|
2,123
|
$
|
—
|
$
|
39,909
|
||||||||
Total
securities held to maturity
|
$
|
37,786
|
$
|
2,123
|
$
|
—
|
$
|
39,909
|
||||||||
December
31, 2009
|
||||||||||||||||
Available
for sale
|
||||||||||||||||
Obligations
of states and political subdivisions
|
$
|
17,587
|
$
|
473
|
$
|
—
|
$
|
18,060
|
||||||||
Mortgage-backed
securities issued or guaranteed by U.S. government sponsored
enterprises
|
412,113
|
16,608
|
(365
|
)
|
428,356
|
|||||||||||
Private
issue collateralized mortgage obligations
|
34,121
|
12
|
(5,261
|
)
|
28,872
|
|||||||||||
Total
debt securities
|
463,821
|
17,093
|
(5,626
|
)
|
475,288
|
|||||||||||
Equity
securities
|
5,000
|
—
|
(580
|
)
|
4,420
|
|||||||||||
Total
securities available for sale
|
$
|
468,821
|
$
|
17,093
|
$
|
(6,206
|
)
|
$
|
479,708
|
|||||||
Held
to maturity
|
|
|
|
|||||||||||||
Obligations
of states and political subdivisions
|
$
|
37,914
|
$
|
1,725
|
$
|
—
|
$
|
39,639
|
||||||||
Total
securities held to maturity
|
$
|
37,914
|
$
|
1,725
|
$
|
—
|
$
|
39,639
|
Amortized
Cost
|
Fair
Value
|
|||||||
Available
for sale
|
||||||||
Due
in one year or less
|
$
|
2,655
|
$
|
2,663
|
||||
Due
after one year through five years
|
78,585
|
79,903
|
||||||
Due
after five years through ten years
|
68,071
|
71,191
|
||||||
Due
after ten years
|
362,401
|
375,459
|
||||||
|
$
|
511,712
|
$
|
529,216
|
||||
Held
to maturity
|
||||||||
Due
in one year or less
|
$
|
296
|
$
|
298
|
||||
Due
after one year through five years
|
3,970
|
4,142
|
||||||
Due
after five years through ten years
|
31,931
|
33,791
|
||||||
Due
after ten years
|
1,589
|
1,678
|
||||||
|
$
|
37,786
|
$
|
39,909
|
Less Than 12 Months
|
12 Months or More
|
Total
|
||||||||||||||||||||||
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
||||||||||||||||||
June
30, 2010
|
||||||||||||||||||||||||
Mortgage-backed
securities
|
$
|
1,836
|
$
|
(1
|
)
|
$
|
91
|
$
|
(1
|
)
|
$
|
1,927
|
$
|
(2
|
)
|
|||||||||
Private
issue collateralized mortgage obligations
|
—
|
—
|
26,302
|
(3,380
|
)
|
26,302
|
(3,380
|
)
|
||||||||||||||||
Equity
securities
|
—
|
—
|
4,520
|
(480
|
)
|
4,520
|
(480
|
)
|
||||||||||||||||
Total
|
$
|
1,836
|
$
|
(1
|
)
|
$
|
30,913
|
$
|
(3,861
|
)
|
$
|
32,749
|
$
|
(3,862
|
)
|
|||||||||
December
31, 2009
|
||||||||||||||||||||||||
Mortgage-backed
securities
|
$
|
25,003
|
$
|
(364
|
)
|
$
|
57
|
$
|
(1
|
)
|
$
|
25,060
|
$
|
(365
|
)
|
|||||||||
Private
issue collateralized mortgage obligations
|
—
|
—
|
27,910
|
(5,261
|
)
|
27,910
|
(5,261
|
)
|
||||||||||||||||
Equity
securities
|
—
|
—
|
4,420
|
(580
|
)
|
4,420
|
(580
|
)
|
||||||||||||||||
Total
|
$
|
25,003
|
$
|
(364
|
)
|
$
|
32,387
|
$
|
(5,842
|
)
|
$
|
57,390
|
$
|
(6,206
|
)
|
June 30,
|
December 31,
|
|||||||
2010
|
2009
|
|||||||
Residential
real estate loans
|
$
|
624,154
|
$
|
627,979
|
||||
Commercial
real estate loans
|
441,512
|
434,783
|
||||||
Commercial
loans
|
196,394
|
191,214
|
||||||
Consumer
loans
|
280,335
|
273,106
|
||||||
Deferred
loan fees net of costs
|
(321
|
)
|
(324
|
)
|
||||
Total
loans
|
$
|
1,542,074
|
$
|
1,526,758
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
|
June 30, 2010
|
June 30, 2009
|
June 30, 2010
|
June 30, 2009
|
||||||||||||
Balance
at beginning of period
|
$
|
21,379
|
$
|
17,691
|
$
|
20,246
|
$
|
17,691
|
||||||||
Loan
charge-offs
|
(1,157
|
)
|
(2,171
|
)
|
(2,410
|
)
|
(3,998
|
)
|
||||||||
Recoveries
on loans previously charged off
|
94
|
350
|
480
|
447
|
||||||||||||
Net
charge-offs
|
(1,063
|
)
|
(1,821
|
)
|
(1,930
|
)
|
(3,551
|
)
|
||||||||
Provision
for loan losses
|
1,950
|
2,784
|
3,950
|
4,514
|
||||||||||||
Balance
at end of period
|
$
|
22,266
|
$
|
18,654
|
$
|
22,266
|
$
|
18,654
|
Goodwill
|
||||||||||||
Banking
|
Financial
Services
|
Total
|
||||||||||
Balance
at December 31, 2009
|
$
|
34,720
|
$
|
7,060
|
$
|
41,780
|
||||||
2010
activity
|
—
|
—
|
—
|
|||||||||
Balance
at June 30, 2010
|
$
|
34,720
|
$
|
7,060
|
$
|
41,780
|
Core Deposit Intangible
|
||||||||||||
Total
|
Accumulated
Amortization
|
Net
|
||||||||||
Balance
at December 31, 2009
|
$
|
14,444
|
$
|
(10,428
|
)
|
$
|
4,016
|
|||||
2010
amortization
|
—
|
(251
|
)
|
(251
|
)
|
|||||||
Balance
at June 30, 2010
|
$
|
14,444
|
$
|
(10,679
|
)
|
$
|
3,765
|
Trust Relationship Intangible
|
||||||||||||
Total
|
Accumulated
Amortization
|
Net
|
||||||||||
Balance
at December 31, 2009
|
$
|
753
|
$
|
(151
|
)
|
$
|
602
|
|||||
2010
amortization
|
—
|
(37
|
)
|
(37
|
)
|
|||||||
Balance
at June 30, 2010
|
$
|
753
|
$
|
(188
|
)
|
$
|
565
|
Trust
Relationship
|
Core Deposit
|
|||||||
Intangible
|
Intangible
|
|||||||
2010
|
$
|
38
|
$
|
251
|
||||
2011
|
75
|
502
|
||||||
2012
|
75
|
502
|
||||||
2013
|
75
|
502
|
||||||
2014
|
75
|
502
|
||||||
Thereafter
|
227
|
1,506
|
||||||
Total
unamortized intangible
|
$
|
565
|
$
|
3,765
|
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
||||||||||||||
|
2010
|
2009
|
2010
|
2009
|
||||||||||||
Net
period benefit cost
|
||||||||||||||||
Service
cost
|
$
|
45
|
$
|
51
|
$
|
90
|
$
|
102
|
||||||||
Interest
cost
|
107
|
104
|
214
|
208
|
||||||||||||
Recognized
net actuarial loss
|
8
|
19
|
16
|
38
|
||||||||||||
Recognized
prior service cost
|
5
|
4
|
10
|
9
|
||||||||||||
Net
period benefit cost
|
$
|
165
|
$
|
178
|
$
|
330
|
$
|
357
|
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
||||||||||||||
|
2010
|
2009
|
2010
|
2009
|
||||||||||||
Net
period benefit cost
|
||||||||||||||||
Service
cost
|
$
|
17
|
$
|
16
|
$
|
34
|
$
|
32
|
||||||||
Interest
cost
|
36
|
34
|
72
|
68
|
||||||||||||
Recognized
net actuarial loss
|
—
|
—
|
—
|
1
|
||||||||||||
Net
period benefit cost
|
$
|
53
|
$
|
50
|
$
|
106
|
$
|
101
|
Level 1
|
Level 2
|
Level 3
|
Fair Value
Measurements at
June 30,
2010
|
|||||||||||||
Assets:
|
||||||||||||||||
Securities
available for sale:
|
||||||||||||||||
Obligations
of U.S. government sponsored enterprises
|
$
|
—
|
$
|
50,283
|
$
|
—
|
$
|
50,283
|
||||||||
Obligations
of states and political subdivisions
|
—
|
17,155
|
—
|
17,155
|
||||||||||||
Mortgage-backed
securities issued or guaranteed by U.S. government sponsored
enterprises
|
—
|
434,609
|
—
|
434,609
|
||||||||||||
Private
issue collateralized mortgage obligations
|
—
|
27,169
|
—
|
27,169
|
||||||||||||
Equity
securities
|
—
|
4,520
|
—
|
4,520
|
||||||||||||
Trading
account assets
|
2,013
|
—
|
—
|
2,013
|
||||||||||||
Liabilities:
|
||||||||||||||||
Derivatives
instruments
|
—
|
2,218
|
—
|
2,218
|
Level 1
|
Level 2
|
Level 3
|
Fair Value
Measurements at
December 31,
2009
|
|||||||||||||
Assets:
|
||||||||||||||||
Securities
available for sale:
|
||||||||||||||||
Obligations
of states and political subdivisions
|
$
|
—
|
$
|
18,060
|
$
|
—
|
$
|
18,060
|
||||||||
Mortgage-backed
securities issued or guaranteed by U.S. government sponsored
enterprises
|
—
|
428,356
|
—
|
428,356
|
||||||||||||
Private
issue collateralized mortgage obligations
|
—
|
28,872
|
—
|
28,872
|
||||||||||||
Equity
securities
|
—
|
4,420
|
—
|
4,420
|
||||||||||||
Trading
account assets
|
1,725
|
—
|
—
|
1,725
|
||||||||||||
Derivatives
instruments
|
—
|
1,136
|
—
|
1,136
|
Level 1
|
Level 2
|
Level 3
|
Fair Value
Measurements at
June 30,
2010
|
|
||||||||||||
Assets:
|
|
|
|
|
||||||||||||
Impaired
loans
|
$
|
—
|
$
|
18,737
|
$
|
—
|
$
|
18,737
|
||||||||
Other
real estate owned
|
—
|
—
|
3,967
|
3,967
|
||||||||||||
Mortgage
servicing rights
|
—
|
896
|
—
|
896
|
Level 1
|
Level 2
|
Level 3
|
Fair Value
Measurements at
December 31,
2009
|
|
||||||||||||
Assets:
|
|
|
|
|
||||||||||||
Impaired
loans
|
$
|
—
|
$
|
16,135
|
$
|
—
|
$
|
16,135
|
||||||||
Other
real estate owned
|
—
|
—
|
5,479
|
5,479
|
||||||||||||
Mortgage
servicing rights
|
—
|
965
|
—
|
965
|
|
Six Months Ended
June 30,
|
|||||||
|
2010
|
2009
|
||||||
Balance
at beginning of year
|
$
|
5,479
|
$
|
4,024
|
||||
Additions
|
584
|
2,826
|
||||||
Increase
in OREO valuation allowance
|
(1,050
|
)
|
(666
|
)
|
||||
Properties
sold
|
(1,046
|
)
|
(328
|
)
|
||||
Balance
at end of period
|
$
|
3,967
|
$
|
5,856
|
June 30, 2010
|
December 31, 2009
|
|||||||||||||||
|
Carrying
Amount
|
Fair Value
|
Carrying
Amount
|
Fair Value
|
||||||||||||
Financial
assets:
|
|
|
|
|
||||||||||||
Cash
and due from banks
|
$
|
24,236
|
$
|
24,236
|
$
|
29,772
|
$
|
29,772
|
||||||||
Securities
available for sale
|
533,736
|
533,736
|
479,708
|
479,708
|
||||||||||||
Securities
held to maturity
|
37,786
|
39,909
|
37,914
|
39,639
|
||||||||||||
Trading
account assets
|
2,013
|
2,013
|
1,725
|
1,725
|
||||||||||||
Derivatives
instruments
|
–
|
–
|
1,136
|
1,136
|
||||||||||||
Federal
Home Loan Bank and Federal Reserve Bank stock
|
21,965
|
21,965
|
21,965
|
21,965
|
||||||||||||
Loans
receivable, net of allowance
|
1,519,808
|
1,547,102
|
1,506,512
|
1,526,148
|
||||||||||||
Mortgage
servicing rights
|
697
|
896
|
810
|
965
|
||||||||||||
Interest
receivable
|
7,558
|
7,558
|
7,236
|
7,236
|
||||||||||||
Financial
liabilities:
|
|
|
||||||||||||||
Deposits
|
1,548,676
|
1,556,170
|
1,495,807
|
1,502,020
|
||||||||||||
Federal
Home Loan Bank advances
|
174,503
|
182,197
|
209,710
|
216,373
|
||||||||||||
Commercial
repurchase agreements
|
116,410
|
124,881
|
126,466
|
135,189
|
||||||||||||
Other
borrowed funds
|
189,776
|
189,776
|
147,659
|
147,659
|
||||||||||||
Junior
subordinated debentures
|
43,563
|
49,896
|
43,512
|
51,075
|
||||||||||||
Interest
payable
|
2,215
|
2,215
|
2,593
|
2,593
|
||||||||||||
Derivatives
instruments
|
2,218
|
2,218
|
–
|
–
|
June 30,
|
December 31,
|
|||||||
|
2010
|
2009
|
||||||
Lending-Related
Instruments:
|
|
|
||||||
Loan
origination commitments and unadvanced lines of credit:
|
|
|
||||||
Home
equity
|
$
|
157,074
|
$
|
153,245
|
||||
Commercial
and commercial real estate
|
101,344
|
120,515
|
||||||
Residential
|
8,142
|
9,009
|
||||||
Letters
of credit
|
3,270
|
3,089
|
||||||
Derivative
Financial Instruments:
|
|
|||||||
Interest
rate cap
|
—
|
20,000
|
||||||
Forward
interest rate swap
|
30,000
|
20,000
|
|
•
|
general,
national, regional or local economic conditions which are less favorable
than anticipated, including continued global recession, impacting the
performance of our investment portfolio, quality of credits or the overall
demand for services;
|
|
•
|
changes in
loan default and charge-off rates could affect the allowance for credit
losses;
|
|
•
|
declines in
the equity and financial markets which could result in impairment of
goodwill;
|
|
•
|
reductions
in deposit levels could necessitate increased and/or higher cost borrowing
to fund loans and
investments;
|
|
•
|
declines in
mortgage loan refinancing, equity loan and line of credit activity which
could reduce net interest and non-interest
income;
|
|
•
|
changes in
the domestic interest rate environment and inflation, as substantially all
of our assets and virtually all of the liabilities are monetary in
nature;
|
|
•
|
changes in
the carrying value of investment securities and other
assets;
|
|
•
|
further
actions by the U.S. government and Treasury Department, similar to the
Federal Home Loan Mortgage Corporation conservatorship, which could have a
negative impact on the Company’s investment portfolio and
earnings;
|
|
•
|
misalignment
of our interest-bearing assets and
liabilities;
|
|
•
|
increases
in loan repayment rates affecting interest income and the value of
mortgage servicing rights;
|
|
•
|
changing
business, banking, or regulatory conditions or policies, or new
legislation affecting the financial services industry such as the
Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, that
could lead to changes in the competitive balance among financial
institutions, restrictions on bank activities, changes in costs (including
deposit insurance premiums), increased regulatory scrutiny, declines in
consumer confidence in depository institutions, or changes in the
secondary market for bank loan and other products;
and
|
|
•
|
changes in
accounting rules, federal and state laws, IRS regulations, and other
regulations and policies governing financial holding companies and their
subsidiaries which may impact our ability to take appropriate action to
protect our financial interests in certain loan
situations.
|
|
•
|
Net interest income on a
fully-taxable equivalent basis for the first six months of 2010 decreased
1% to $37.3 million due to average earning assets declining $58.6
million.
|
|
•
|
The provision for loan losses of
$3.9 million decreased $568,000 in the first six months of 2010 compared
to the same period of 2009 as non-performing assets showed initial signs
of stabilization.
|
|
•
|
For the six months ended June 30,
2010, net charge-offs totaled $1.9 million, or an annualized rate of 0.25%
of average loans, compared to $3.6 million, or 0.48% of average loans, for
the same period of 2009. Non-performing assets as a percentage of total
assets amounted to 1.13% and 0.97% at June 30, 2010 and 2009,
respectively.
|
|
•
|
Non-interest income for the first
six months of 2010 was $9.0 million, a 6% decrease below the first six
months of 2009, primarily due to a reduction in mortgage banking income of
$699,000.
|
|
•
|
Non-interest expense for the
first six months of 2010 was $25.8 million, an increase of $72,000, or
less than 1%, over the first six months of
2009.
|
|
•
|
Net interest income on a
fully-taxable equivalent basis for the second quarter of 2010 increased 1%
to $18.9 million compared to the same period of 2009 due to the decline in
cost of funding.
|
|
•
|
The provision for loan losses of
$2.0 million decreased $834,000 in the second quarter of 2010 compared to
the same period of 2009 as non-performing assets showed initial signs of
stabilization.
|
|
•
|
Non-interest
income for the second quarter of 2010 was $4.4 million, a 12% decline
compared to the second quarter of 2009 related to a reduction in mortgage
banking income, a decrease in investment value of deferred compensation
and an other-than-temporary impairment write-down on
securities.
|
|
•
|
Non-interest
expense for the second quarter of 2010 was $12.9 million, a decrease of
$560,000, or 4%, below the second quarter of 2009 primarily due to a
reduction in regulatory assessments and salaries and employee benefits,
partially offset by an increase in OREO and collection
costs.
|
|
•
|
Total loans at June 30, 2010 were
$1.5 billion, an increase of $15.3 million compared to December 31, 2009.
The increase in loan balances was primarily in the commercial, commercial
real estate and consumer
portfolios.
|
|
•
|
Investment securities increased
to $593.5 million at June 30, 2010 compared to $539.6 million at December
31, 2009 due to short-term securities being added to the
portfolio.
|
|
•
|
Deposits at June 30, 2010 were
$1.5 billion, an increase of $52.9 million compared to December 31,
2009. The increase in deposit balances was in the demand,
interest checking, savings, money market and brokered
deposits.
|
|
•
|
Shareholders’ equity increased 5%
compared to December 31, 2009 due to current year earnings and other
comprehensive income, in part offset by dividends
declared.
|
Six Months Ended
June
30, 2010
|
Six Months Ended
June 30, 2009
|
||||||||||||||||||||||||
(Dollars in Thousands)
|
Average
Balance
|
Interest
|
Yield/
Rate
|
Average
Balance
|
Interest
|
Yield/
Rate
|
|||||||||||||||||||
ASSETS
|
|||||||||||||||||||||||||
Interest-earning
assets:
|
|||||||||||||||||||||||||
Securities – taxable
|
$
|
485,636
|
$
|
10,375
|
4.27
|
%
|
$
|
572,276
|
$
|
14,061
|
4.91
|
%
|
|||||||||||||
Securities – nontaxable
(1)
|
55,322
|
1,651
|
5.97
|
%
|
65,978
|
1,959
|
5.94
|
%
|
|||||||||||||||||
Trading
account assets
|
1,809
|
10
|
1.06
|
%
|
1,338
|
10
|
1.49
|
%
|
|||||||||||||||||
Loans
(1)
(2)
:
|
|||||||||||||||||||||||||
Residential
real estate
|
625,515
|
16,873
|
5.39
|
%
|
618,773
|
18,346
|
5.93
|
%
|
|||||||||||||||||
Commercial
real estate
|
438,198
|
12,511
|
5.68
|
%
|
401,886
|
12,449
|
6.16
|
%
|
|||||||||||||||||
Commercial
|
177,608
|
4,851
|
5.43
|
%
|
186,081
|
5,160
|
5.52
|
%
|
|||||||||||||||||
Municipal
|
15,265
|
425
|
5.62
|
%
|
23,111
|
578
|
5.04
|
%
|
|||||||||||||||||
Consumer
|
275,102
|
6,529
|
4.79
|
%
|
263,588
|
6,557
|
5.02
|
%
|
|||||||||||||||||
Total
loans
|
1,531,688
|
41,189
|
5.37
|
%
|
1,493,439
|
43,090
|
5.77
|
%
|
|||||||||||||||||
Total
interest-earning assets
|
2,074,455
|
53,225
|
5.13
|
%
|
2,133,031
|
59,120
|
5.54
|
%
|
|||||||||||||||||
Cash
and due from banks
|
35,234
|
26,988
|
|||||||||||||||||||||||
Other
assets
|
163,492
|
153,250
|
|||||||||||||||||||||||
Less:
allowance for loan losses
|
(21,601
|
)
|
(18,091
|
)
|
|||||||||||||||||||||
Total
assets
|
$
|
2,251,580
|
$
|
2,295,178
|
|||||||||||||||||||||
LIABILITIES AND SHAREHOLDERS’
EQUITY
|
|||||||||||||||||||||||||
Interest-bearing
liabilities:
|
|||||||||||||||||||||||||
Interest
checking accounts
|
$
|
244,577
|
486
|
0.40
|
%
|
$
|
206,229
|
509
|
0.50
|
%
|
|||||||||||||||
Savings
accounts
|
151,453
|
244
|
0.33
|
%
|
135,180
|
241
|
0.36
|
%
|
|||||||||||||||||
Money
market accounts
|
282,143
|
1,168
|
0.83
|
%
|
282,475
|
1,669
|
1.19
|
%
|
|||||||||||||||||
Certificates
of deposit
|
536,838
|
5,378
|
2.02
|
%
|
589,222
|
8,905
|
3.05
|
%
|
|||||||||||||||||
Total
retail deposits
|
1,215,011
|
7,276
|
1.21
|
%
|
1,213,106
|
11,324
|
1.88
|
%
|
|||||||||||||||||
Broker
deposits
|
92,257
|
802
|
1.75
|
%
|
77,275
|
1,006
|
2.62
|
%
|
|||||||||||||||||
Junior
subordinated debentures
|
43,541
|
1,396
|
6.47
|
%
|
43,436
|
1,424
|
6.61
|
%
|
|||||||||||||||||
Borrowings
|
493,170
|
6,404
|
2.62
|
%
|
596,987
|
7,637
|
2.58
|
%
|
|||||||||||||||||
Total
wholesale funding
|
628,968
|
8,602
|
2.76
|
%
|
717,698
|
10,067
|
2.83
|
%
|
|||||||||||||||||
Total
interest-bearing liabilities
|
1,843,979
|
15,878
|
1.74
|
%
|
1,930,804
|
21,391
|
2.23
|
%
|
|||||||||||||||||
Demand
deposits
|
189,542
|
172,990
|
|||||||||||||||||||||||
Other
liabilities
|
22,736
|
20,490
|
|||||||||||||||||||||||
Shareholders’
equity
|
195,323
|
170,894
|
|||||||||||||||||||||||
Total
liabilities and shareholders’ equity
|
$
|
2,251,580
|
$
|
2,295,178
|
|||||||||||||||||||||
Net
interest income (fully-taxable equivalent)
|
37,347
|
37,729
|
|||||||||||||||||||||||
Less:
fully-taxable equivalent adjustment
|
(727
|
)
|
(884
|
)
|
|||||||||||||||||||||
|
$
|
36,620
|
$
|
36,845
|
|||||||||||||||||||||
Net
interest rate spread (fully-taxable equivalent)
|
3.39
|
%
|
3.31
|
%
|
|||||||||||||||||||||
Net
interest margin (fully-taxable equivalent)
|
3.59
|
%
|
3.52
|
%
|
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
||||||||||||||
|
2010
|
2009
|
2010
|
2009
|
||||||||||||
Income
from fiduciary services
|
$
|
1,512
|
$
|
1,507
|
$
|
3,079
|
$
|
2,861
|
||||||||
Service
charges on deposit accounts
|
1,285
|
1,349
|
2,565
|
2,582
|
||||||||||||
Other
service charges and fees
|
872
|
811
|
1,562
|
1,424
|
||||||||||||
Bank-owned
life insurance
|
347
|
345
|
718
|
740
|
||||||||||||
Brokerage
and insurance commissions
|
352
|
285
|
646
|
643
|
||||||||||||
Mortgage
banking income
|
83
|
416
|
172
|
871
|
||||||||||||
Other
income
|
105
|
331
|
434
|
477
|
||||||||||||
Total
non-interest income before other-than-
temporary
impairment of securities
|
4,556
|
5,044
|
9,176
|
9,598
|
||||||||||||
Other-than-temporary
impairment of securities
|
(131
|
)
|
—
|
(179
|
)
|
—
|
||||||||||
Total
non-interest income
|
$
|
4,425
|
$
|
5,044
|
$
|
8,997
|
$
|
9,598
|
|
•
|
Increase in income from fiduciary
services of $218,000, or 8%, resulting from market value increases in
assets under administration,
|
|
•
|
Increase in other service charges
and fees of $138,000, or 10%, resulting from increased debit card income
associated with increased transaction
volume,
|
|
•
|
Decrease in mortgage banking
income of $699,000, or 80%, primarily due to the sale of $44.0 million in
residential loans during the first six months of 2009,
and,
|
|
•
|
An
other-than-temporary impairment write-down of $179,000 on private issue
collateralized mortgage obligations in the first six months of
2010.
|
|
•
|
Increase in other service charges
and fees of $61,000, or 8%, resulting from increased debit card income
associated with increased transaction
volume,
|
|
•
|
Decrease in mortgage banking
income of $333,000, or 80%, primarily due to the sale of $23.8 million in
residential loan sales during the second quarter of
2009,
|
|
•
|
Decrease in other income of
$226,000, or 68%, resulting primarily from a $249,000 decrease in the
market value of trading account assets associated with the management and
director deferred compensation,
and,
|
|
•
|
An
other-than-temporary impairment write-down of $131,000 on private issue
collateralized mortgage obligations in the second quarter of
2010.
|
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
||||||||||||||
|
2010
|
2009
|
2010
|
2009
|
||||||||||||
Salaries
and employee benefits
|
$
|
6,298
|
$
|
6,446
|
$
|
12,523
|
$
|
12,124
|
||||||||
Furniture,
equipment and data processing
|
1,115
|
1,030
|
2,246
|
2,033
|
||||||||||||
Regulatory
assessments
|
602
|
1,739
|
1,317
|
2,611
|
||||||||||||
Net
occupancy
|
897
|
962
|
1,931
|
2,080
|
||||||||||||
Consulting
and professional fees
|
549
|
627
|
1,337
|
1,184
|
||||||||||||
OREO
and collection costs
|
1,158
|
282
|
2,132
|
1,162
|
||||||||||||
Amortization
of intangible assets
|
144
|
144
|
288
|
289
|
||||||||||||
Other
expenses
|
2,094
|
2,186
|
4,005
|
4,224
|
||||||||||||
Total
non-interest expenses
|
$
|
12,857
|
$
|
13,416
|
$
|
25,779
|
$
|
25,707
|
|
•
|
Increase in salaries and employee
benefits of $399,000, or 3%, primarily due to a $153,000 increase in
salaries, $351,000 increase in health care costs and a reduction in
deferred salary costs of $413,000 related to high mortgage production
volume in 2009, partially offset by a reduction in incentive accruals of
$462,000,
|
|
•
|
Decrease in regulatory
assessments of $1.3 million, or 50%, related to the Federal Deposit
Insurance Corporation special assessment imposed on all banks in May
2009,
|
|
•
|
Increase in consulting and
professional fees of $153,000, or 13%, were primarily related to increased
legal costs related to securities registration and other
matters, and,
|
|
•
|
Increase in costs associated with
foreclosure and collection costs and expenses on other real estate owned
of $970,000, or 83%, which includes OREO write-downs of $1.2 million due
to declining real estate
values.
|
|
•
|
Decrease
in salaries and employee benefits of $148,000, or 2%, primarily due to
reductions in incentive accruals of $403,000 and retirement benefits of
$135,000, partially offset by an increase in health care costs of $152,000
and a reduction in deferred salary costs of $250,000 related to high
mortgage production volume in 2009,
|
|
•
|
Decrease in regulatory
assessments of $1.1 million, or 65%, related to the Federal Deposit
Insurance Corporation special assessment imposed on all banks in May
2009,
|
|
•
|
Increase in costs associated with
foreclosure and collection costs and expenses on other real estate owned
of $876,000, which includes OREO write-downs of $794,000 due to declining
real estate values.
|
June
30,
|
December 31,
|
|||||||
(Dollars in Thousands)
|
2010
|
2009
|
||||||
Non-accrual
loans
|
||||||||
Residential
real estate
|
$
|
6,580
|
$
|
6,161
|
||||
Commercial
real estate
|
7,130
|
6,476
|
||||||
Commercial
|
5,379
|
4,145
|
||||||
Consumer
|
1,249
|
1,158
|
||||||
Total
non-accrual loans
|
20,338
|
17,940
|
||||||
Accruing
loans past due 90 days
|
545
|
1,135
|
||||||
Renegotiated
loans not included above
|
1,096
|
581
|
||||||
Total
non-performing loans
|
21,979
|
19,656
|
||||||
Other
real estate owned
|
3,967
|
5,479
|
||||||
Total
non-performing assets
|
$
|
25,946
|
$
|
25,135
|
||||
Non-performing
loans to total loans
|
1.43
|
%
|
1.29
|
%
|
||||
Allowance
for credit losses to non-performing loans
|
101.52
|
%
|
103.26
|
%
|
||||
Non-performing
assets to total assets
|
1.13
|
%
|
1.13
|
%
|
||||
Allowance
for credit losses to non-performing assets
|
86.00
|
%
|
80.75
|
%
|
June
30,
|
December 31,
|
|||||||
(Dollars in Thousands)
|
2010
|
2009
|
||||||
Loans
30-89 days past due:
|
||||||||
Residential
real estate loans
|
$
|
1,338
|
$
|
1,847
|
||||
Commercial
real estate
|
749
|
2,196
|
||||||
Commercial
loans
|
1,367
|
639
|
||||||
Consumer
loans
|
537
|
563
|
||||||
Total
loans 30-89 days past due
|
$
|
3,991
|
$
|
5,245
|
||||
Loans
30-89 days past due to total loans
|
0.26
|
%
|
0.34
|
%
|
Six Months Ended June 30,
|
||||||||
(Dollars in Thousands)
|
2010
|
2009
|
||||||
Allowance
at the beginning of the period
|
$
|
20,246
|
$
|
17,691
|
||||
Provision
for loan losses
|
3,950
|
4,514
|
||||||
Charge-offs:
|
||||||||
Residential
real estate loans
|
579
|
259
|
||||||
Commercial
real estate
|
752
|
1,514
|
||||||
Commercial
loans
|
684
|
1,654
|
||||||
Consumer
loans
|
395
|
571
|
||||||
Total
loan charge-offs
|
2,410
|
3,998
|
||||||
Recoveries:
|
||||||||
Residential
real estate loans
|
160
|
8
|
||||||
Commercial
real estate loans
|
29
|
41
|
||||||
Commercial
loans
|
152
|
241
|
||||||
Consumer
loans
|
139
|
157
|
||||||
Total
loan recoveries
|
480
|
447
|
||||||
Net
charge-offs
|
(1,930
|
)
|
(3,551
|
)
|
||||
Allowance
at the end of the period
|
$
|
22,266
|
$
|
18,654
|
||||
Components
of allowance for credit losses:
|
||||||||
Allowance
for loan losses
|
$
|
22,266
|
$
|
18,654
|
||||
Liability
for unfunded credit commitments
|
47
|
—
|
||||||
Balance
of allowance for credit losses at end of the period
|
$
|
22,313
|
$
|
18,654
|
||||
Average
loans outstanding
|
$
|
1,531,688
|
$
|
1,493,439
|
||||
Net
charge-offs (annualized) to average loans outstanding
|
0.25
|
%
|
0.48
|
%
|
||||
Provision
for credit losses (annualized) to average loans
outstanding
|
0.52
|
%
|
0.59
|
%
|
||||
Allowance
for loan losses to total loans
|
1.44
|
%
|
1.23
|
%
|
||||
Allowance
for credit losses to net charge-offs (annualized)
|
578.13
|
%
|
262.71
|
%
|
||||
Allowance
for loan losses to non-performing loans
|
101.52
|
%
|
113.68
|
%
|
||||
Allowance
for loan losses to non-performing assets
|
86.00
|
%
|
83.78
|
%
|
June 30,
|
December 31,
|
|||||||
2010
|
2009
|
|||||||
Return
on average equity
|
11.25
|
%
|
12.81
|
%
|
||||
Average
equity to average assets
|
8.67
|
%
|
7.80
|
%
|
||||
Dividend
payout ratio
|
35.18
|
%
|
33.56
|
%
|
||||
Dividends
declared per share
|
$
|
0.50
|
$
|
1.00
|
||||
Book
value per share
|
26.08
|
24.93
|
Total Amount
Committed
|
Commitment Expires in:
|
|||||||||||||||||||
(Dollars in Thousand)
|
<1 Year
|
1 – 3 Years
|
4 – 5 Years
|
>5 Years
|
||||||||||||||||
Letters
of Credit
|
$
|
3,270
|
$
|
3,262
|
$
|
8
|
$
|
—
|
$
|
—
|
||||||||||
Commercial
Commitment Letters
|
6,255
|
6,255
|
—
|
—
|
—
|
|||||||||||||||
Residential
Loan Origination
|
8,142
|
8,142
|
—
|
—
|
—
|
|||||||||||||||
Home
Equity Line of Credit Commitments
|
157,074
|
16,505
|
6,571
|
6,225
|
127,773
|
|||||||||||||||
Other
Commitments to Extend Credit
|
95,089
|
90,006
|
3,936
|
818
|
329
|
|||||||||||||||
Total
|
$
|
269,830
|
$
|
124,170
|
$
|
10,515
|
$
|
7,043
|
$
|
128,102
|
Total Amount
of Obligations
|
Payments Due per Period
|
|||||||||||||||||||
(Dollars in Thousands)
|
<1 Year
|
1 – 3 Years
|
4 – 5 Years
|
>5 Years
|
||||||||||||||||
Operating
Leases
|
$
|
3,174
|
$
|
716
|
$
|
1,078
|
$
|
474
|
$
|
906
|
||||||||||
Capital
Leases
|
1,190
|
38
|
95
|
92
|
965
|
|||||||||||||||
FHLB
Borrowings – Overnight
|
64,960
|
64,960
|
—
|
—
|
—
|
|||||||||||||||
FHLB
Borrowings – Advances
|
174,503
|
57,055
|
51,036
|
40,000
|
26,412
|
|||||||||||||||
Commercial
Repurchase Agreements
|
116,410
|
10,000
|
101,110
|
—
|
5,300
|
|||||||||||||||
Other
Borrowed Funds
|
122,859
|
122,859
|
—
|
—
|
—
|
|||||||||||||||
Junior
Subordinated Debentures
|
43,563
|
—
|
—
|
—
|
43,563
|
|||||||||||||||
Note
Payable
|
767
|
146
|
501
|
103
|
17
|
|||||||||||||||
Other
Contractual Obligations
|
161
|
161
|
—
|
—
|
—
|
|||||||||||||||
Total
|
$
|
527,587
|
$
|
255,935
|
$
|
153,820
|
$
|
40,669
|
$
|
77,163
|
Estimated Changes in NII
|
||||||||
Rate Change
|
June 30, 2010
|
June 30, 2009
|
||||||
Year
1
|
||||||||
+400
bp
|
(0.60 | )% | (0.80 | )% | ||||
+200
bp
|
(0.60 | )% | (0.20 | )% | ||||
-100
bp
|
(0.50 | )% | (0.90 | )% | ||||
Year
2
|
||||||||
+400
bp
|
(1.60 | )% | 1.30 | % | ||||
+200
bp
|
0.10 | % | 2.90 | % | ||||
-100
bp
|
(5.60 | )% | (4.30 | )% |
Period
|
Total
number of
Shares
Purchased
|
Average Price
Paid per Share
|
Total Number of
Shares
Purchased
as
Part of
Publicly
Announced Plan
|
Maximum Number of
Shares That May Yet
Be
Purchased Under
the
Plan at the End of
the
Period
|
||||||||||||
April
1, 2010 to April 30, 2010
|
— | $ | — | — | — | |||||||||||
May
1, 2010 to May 31, 2010
|
— | — | — | — | ||||||||||||
June
1, 2010 to June 30, 2010
|
— | — | — | — | ||||||||||||
Total
Purchases of Equity Securities
|
— | $ | — | — | — |
CAMDEN
NATIONAL CORPORATION
|
||
(Registrant)
|
||
/s/
Gregory A. Dufour
|
August 6, 2010
|
|
Gregory
A. Dufour
|
Date
|
|
President
and Chief Executive Officer
|
||
/s/
Deborah A. Jordan
|
August 6, 2010
|
|
Deborah
A. Jordan
|
Date
|
|
Chief
Financial Officer and Principal
|
||
Financial
& Accounting Officer
|
(23.1) | Consent of Berry, Dunn, McNeil & Parker relating to the financial statements of Camden National Corporation* |
(31.1)
|
Certification of Chief Executive
Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of
1934*
|
(31.2)
|
Certification of Chief Financial
Officer, Principal Financial & Accounting Officer pursuant to Rule
13a-14(a) of the Securities Exchange Act of
1934*
|
(32.1)
|
Certification of Chief Executive
Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of
2002*
|
(32.2)
|
Certification Chief Financial
Officer, Principal Financial & Accounting Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002*
|