v2.4.0.6
Document and Entity Information
9 Months Ended
Sep. 30, 2012
Oct. 19, 2012
Document Documentand Entity Information [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Period End Date Sep. 30, 2012  
Document Fiscal Year Focus 2012  
Document Fiscal Period Focus Q3  
Trading Symbol BKYF  
Entity Registrant Name BANK OF KENTUCKY FINANCIAL CORP  
Entity Central Index Key 0000934547  
Current Fiscal Year End Date --12-31  
Entity Filer Category Accelerated Filer  
Entity Common Stock Shares Outstanding   7,470,236
v2.4.0.6
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2012
Dec. 31, 2011
Assets    
Cash and cash equivalents $ 81,950 $ 135,964
Interest-bearing deposits with banks 250 250
Available-for-sale securities 302,544 322,512
Held-to-maturity securities 58,314 48,975
Loans held for sale 19,314 8,920
Total loans 1,159,074 1,129,954
Less: Allowance for loan losses 16,585 18,288
Net loans 1,142,489 1,111,666
Premises and equipment, net 22,714 22,827
FHLB stock, at cost 5,099 5,099
Goodwill 22,023 22,023
Acquisition intangibles, net 2,645 3,228
Cash surrender value of life insurance 33,509 32,850
Accrued interest receivable and other assets 31,103 30,410
Total assets 1,721,954 1,744,724
Liabilities    
Deposits 1,471,246 1,498,821
Short-term borrowings 22,142 29,300
Notes payable 48,721 48,739
Accrued interest payable and other liabilities 12,224 11,294
Total liabilities 1,554,333 1,588,154
Shareholders' Equity    
Common stock, no par value, 15,000,000 shares authorized, 7,467,396 (2012) and 7,432,995 (2011) shares issued 3,098 3,098
Additional paid-in capital 34,971 34,121
Retained earnings 124,548 116,038
Accumulated other comprehensive income 5,004 3,313
Total shareholders' equity 167,621 156,570
Total liabilities and shareholders' equity $ 1,721,954 $ 1,744,724
v2.4.0.6
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Parenthetical) (USD $)
Sep. 30, 2012
Dec. 31, 2011
Common stock, no par value      
Common stock, shares authorized 15,000,000 15,000,000
Common stock, shares issued 7,467,396 7,432,995
v2.4.0.6
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2012
Sep. 30, 2011
INTEREST INCOME        
Loans, including related fees $ 13,771 $ 14,488 $ 41,363 $ 43,421
Securities and other 1,662 1,792 5,419 5,281
Total interest income 15,433 16,280 46,782 48,702
INTEREST EXPENSE        
Deposits 1,214 1,954 4,128 6,493
Borrowings 257 250 801 758
Total interest expense 1,471 2,204 4,929 7,251
Net interest income 13,962 14,076 41,853 41,451
Provision for loan losses 2,200 2,550 5,700 8,550
Net interest income after provision for loan losses 11,762 11,526 36,153 32,901
NON-INTEREST INCOME        
Service charges and fees 2,325 2,470 6,767 7,051
Mortgage banking income 917 704 2,092 1,209
Net securities gains(losses) 0 0 203 231
Company owned life insurance earnings 300 306 910 842
Bankcard transaction revenue 940 848 2,794 2,497
Trust fee income 710 630 2,093 2,016
Other 669 339 1,961 1,348
Total non-interest income 5,861 5,297 16,820 15,194
NON-INTEREST EXPENSE        
Salaries and benefits 5,909 5,351 17,084 15,150
Occupancy and equipment 1,316 1,216 3,908 3,705
Data processing 505 500 1,573 1,461
Advertising 377 464 1,146 1,186
Other 3,692 3,196 10,957 10,209
Total non-interest expense 11,799 10,727 34,668 31,711
INCOME BEFORE INCOME TAXES 5,824 6,096 18,305 16,384
Less: income taxes 1,628 1,822 5,170 4,804
NET INCOME 4,196 4,274 13,135 11,580
Preferred stock dividend and discount accretion 0 (261) 0 (777)
Net Income available to common shareholders 4,196 4,013 13,135 10,803
Comprehensive Income $ 5,463 $ 5,136 $ 14,826 $ 14,549
Net income per common share:        
Earnings per share, basic $ 0.56 $ 0.54 $ 1.76 $ 1.45
Earnings per share, diluted $ 0.56 $ 0.54 $ 1.74 $ 1.45
v2.4.0.6
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (USD $)
In Thousands, except Per Share data, unless otherwise specified
9 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Beginning balance $ 156,570 $ 159,370
Comprehensive income:    
Net income 13,135 11,580
Change in net unrealized gain(loss), net of tax 1,691 2,969
Total comprehensive income 14,826 14,549
Cash dividends declared on common stock (4,624) (4,162)
Exercise of stock options (34,401 and 700 shares), including tax benefit 741 14
Stock-based compensation expense 108 152
Paid and accrued dividends on preferred stock 0 (637)
Balance as of September 30 $ 167,621 $ 169,286
Dividends per share $ 0.62 $ 0.56
v2.4.0.6
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical)
9 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Exercise of stock options, shares 34,401 700
v2.4.0.6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Cash Flows from Operating Activities    
Net income $ 13,135 $ 11,580
Adjustments to reconcile net income to net cash From operating activities (1,246) 19,113
Net cash from operating activities 11,889 30,693
Cash Flows from Investing Activities    
Net change in interest-bearing balances 0 (150)
Proceeds from paydowns and maturities of held-to-maturity securities 2,780 4,399
Proceeds from paydowns and maturities of available-for-sale securities 151,460 172,311
Purchases of held-to-maturity securities (12,172) (10,048)
Purchases of available-for-sale securities (138,121) (231,932)
Purchases of company owned life insurance 0 (6,500)
Net change in loans (39,438) (24,377)
Proceeds from the sale of other real estate 2,488 3,021
Proceeds from the sale of securities 6,944 13,367
Property and equipment expenditures (1,210) (722)
Net cash from investing activities (27,269) (80,631)
Cash Flows from Financing Activities    
Net change in deposits (27,575) (53,097)
Net change in short-term borrowings (7,158) 2,829
Proceeds from exercise of stock options 741 14
Cash dividends paid (4,624) (4,799)
Payments on note payable (18) (16)
Net cash from financing activities (38,634) (55,069)
Net change in cash and cash equivalents (54,014) (105,007)
Cash and cash equivalents at beginning of period 135,964 172,664
Cash and cash equivalents at end of period $ 81,950 $ 67,657
v2.4.0.6
Basis of Presentation
9 Months Ended
Sep. 30, 2012
Accounting Policies [Abstract]  
Basis of Presentation

Note 1 - Basis of Presentation:

 

The condensed consolidated financial statements include the accounts of The Bank of Kentucky Financial Corporation (“BKFC” or the “Company”) and its wholly owned subsidiary, The Bank of Kentucky, Inc. (the “Bank”). All significant intercompany accounts and transactions have been eliminated.

v2.4.0.6
General
9 Months Ended
Sep. 30, 2012
General [Abstract]  
General

Note 2 - General:

 

These financial statements were prepared in accordance with the instructions for Form 10-Q and Rule 10-01 of Regulation S-X and, therefore, do not include all of the disclosures necessary for a complete presentation of financial position, results of operations and cash flows in conformity with U.S. generally accepted accounting principles. Except for required accounting changes, these financial statements have been prepared on a basis consistent with the annual financial statements and include, in the opinion of management, all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of the results of operations and financial position at the end of and for the periods presented. These financial statements and notes should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto as set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011.

 

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided, and future results could differ. The allowance for loan losses and the fair values of financial instruments, in particular, are subject to change.

v2.4.0.6
Earnings per Share
9 Months Ended
Sep. 30, 2012
Earnings Per Share [Abstract]  
Earnings per Share

Note 3 - Earnings per Share:

 

Earnings per share are computed based upon the weighted average number of shares of common stock outstanding during the three and nine month periods. Diluted earnings per share show the potential dilutive effect of additional common shares issuable under the Company’s stock compensation plan and warrants. For the three months ended September 30, 2012 and 2011, 187,720 and 416,604 options were not considered, as they were not dilutive, and for the nine months ended September 30, 2012 and 2011, 264,389 and 354,616 options were not considered, as they were not dilutive. The following table presents the numbers of shares used to compute basic and diluted earnings per share for the indicated periods:

 

  Three Months
Ended
September 30
  Nine Months
Ended
September 30
 
  2012  2011  2012  2011 
Weighted average shares outstanding  7,465,926   7,432,995   7,459,988   7,432,762 
Dilutive effects of assumed exercises of stock options, restricted stock units and warrants  88,133   55,748   77,415   41,332 
Shares used to compute diluted earnings per share  7,554,059   7,488,743   7,537,403   7,474,094 

 

v2.4.0.6
Stock-Based Compensation
9 Months Ended
Sep. 30, 2012
Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]  
Stock-Based Compensation

Note 4 – Stock-Based Compensation:

 

Stock-based compensation in the form of options to buy stock and restricted stock units (“RSUs”) are granted to directors, officers and employees under the Company’s incentive stock plan (the “Plan”), which provides for the issuance of up to 1,000,000 shares.

 

Stock Options

The specific terms of each option agreement are determined by the Compensation Committee at the date of the grant. For current options outstanding, options granted to directors vest immediately and options granted to employees generally vest evenly over a five-year period.

 

The Company recorded stock option expense of $24,000 (net of taxes) and $76,000 (net of taxes) in the three and nine months ended September 30, 2012, and $51,000 (net of taxes) and $152,000 (net of taxes) in the three and nine months ended September 30, 2011.

 

Restricted Stock Units

 

The specific term of each RSU award are determined by the Compensation Committee at the date of the grant. 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 using the total number of RSU’s granted multiplied by the grant date fair market value of a share of company stock. RSU’s fully vest on the first anniversary of the grant date.

 

A summary of changes in the Company’s nonvested shares for the year follows:

 

     Weighted-Average 
     Grant-Date 
Nonvested Shares Shares  Fair Value 
       
Nonvested at January 1, 2012  0  $- 
Granted  4,185   25.80 
Vested  0   - 
Forfeited  0   - 
Nonvested at September 30, 2012  4,185  $25.80 

 

The Company recorded RSU expense of $36,000 for the three and nine months ended September 30, 2012. As of September 30, 2012, there was $84,000 of total unrecognized compensation cost related to nonvested shares granted under the RRP. The cost is expected to be recognized over a period of 7 months.

v2.4.0.6
Cash and Cash Equivalents
9 Months Ended
Sep. 30, 2012
Cash and Cash Equivalents [Abstract]  
Cash and Cash Equivalents

Note 5 – Cash and Cash Equivalents:

 

Cash and cash equivalents include cash on hand, amounts due from banks, federal funds sold and investments in money market mutual funds. The Company reports net cash flows for customer loan and deposit transactions, interest-bearing balances with banks and short-term borrowings with maturities of 90 days or less.

v2.4.0.6
Reclassification
9 Months Ended
Sep. 30, 2012
Equity [Abstract]  
Reclassification

Note 6 – Reclassification:

 

Certain prior period amounts have been reclassified to conform to the current period presentation.Such reclassifications have no effect on previously reported net income or shareholders’ equity.

v2.4.0.6
New Accounting Pronouncements
9 Months Ended
Sep. 30, 2012
Accounting Changes and Error Corrections [Abstract]  
New Accounting Pronouncements

Note 7 – New Accounting Pronouncements:

 

In May 2011, the Financial Accounting Standards Board (“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. This update became effective for the Company for interim and annual reporting periods beginning after December 15, 2011 and did not have a material impact on the Company''''s consolidated financial position or results of operations.

 

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. This update became effective for the Company for interim and annual reporting periods beginning after December 15, 2011 and did not have a material impact on the Company''''s consolidated financial position or results of operations.

v2.4.0.6
Securities
9 Months Ended
Sep. 30, 2012
Investments, Debt and Equity Securities [Abstract]  
Securities

Note 8Securities:

 

The fair value of available-for-sale securities and the related gains and losses recognized in accumulated other comprehensive income (loss) was as follows (in thousands):

  

     Gross  Gross    
  Amortized  Unrealized  Unrealized  Fair 
Available-for-Sale Cost  Gains  Losses  Value 
September 30, 2012                
U.S. government, federal agencies and government sponsored enterprises $112,473  $1,313  $(23) $113,763 
U.S. government residential mortgage-backed  181,429   6,292   -   187,721 
Corporate  1,060   -   -   1,060 
  $294,962  $7,605  $(23) $302,544 

 

     Gross  Gross    
  Amortized  Unrealized  Unrealized  Fair 
  Cost  Gains  Losses  Value 
December 31, 2011                
U.S. government, federal agencies and government sponsored enterprises $168,104  $1,368  $(12) $169,460 
U.S. government residential mortgage-backed  148,329   3,727   (64)  151,992 
Corporate  1,060   -   -   1,060 
  $317,493  $5,095  $(76) $322,512 

 

The carrying amount, unrecognized gains and losses, and fair value of securities held-to-maturity were as follows (in thousands):

 

     Gross  Gross    
  Amortized  Unrecognized  Unrecognized  Fair 
Held-to-Maturity Cost  Gains  Losses  Value 
2012                
Municipal and other obligations $58,314  $2,169  $(108) $60,375 
                 
2011                
Municipal and other obligations $48,975  $1,693  $(25) $50,643 

 

The amortized cost and fair value of debt securities and carrying amount, if different, at September 30, 2012 by contractual maturity were as follows (in thousands), with securities not due at a single maturity date, primarily mortgage-backed securities, shown separately.

 

  Available-for-Sale  Held-to-Maturity 
  Amortized  Fair  Amortized  Fair 
  Cost  Value  Cost  Value 
Due in one year or less $610  $616  $3,353  $3,368 
Due after one year through five years  51,409   52,076   29,592   30,780 
Due after five years through ten years  60,454   61,071   19,444   20,302 
Due after ten years  1,060   1,060   5,925   5,925 
U.S. Governmentagency mortgage-backed  181,429   187,721   -   - 
                 
  $294,962  $302,544  $58,314  $60,375 

 

Proceeds on the sale of $6,944,000 of available-for-sale securities resulted in gains of $203,000 for the first nine months of 2012. No securities were sold with losses in the first nine months of 2012. Proceeds on the sale of $13,367,000 of available-for-sale securities resulted in gains of $231,000 for the first nine months of 2011, with no losses.

 

Management evaluates securities for other-than-temporary impairment (“OTTI”) at least on a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. Investment securities classified as available-for-sale or held-to-maturity are evaluated for OTTI under ASC 320, Accounting for Certain Investments in Debt and Equity Securities.

 

In determining OTTI, management considers many factors, including: (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, (3) whether the market decline was affected by macroeconomic conditions and (4) whether the entity has the intent to sell the debt security or more likely than not will be required to sell the debt security before its anticipated recovery. The assessment of whether an other-than temporary decline exists involves a high degree of subjectivity and judgment and is based on the information available to management at a point in time.

 

When OTTI occurs, the amount of the OTTI recognized in earnings depends on whether an entity intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis less any current-period credit loss. If an entity intends to sell or more likely than not will be required to sell the security before recovery of its amortized cost basis less any current-period credit loss, the OTTI shall be recognized in earnings equal to the entire difference between the investment’s amortized cost basis and its fair value at the balance sheet date. Otherwise, the OTTI shall be separated into the amount representing the credit loss and the amount related to all other factors. The amount of the total OTTI related to the credit loss is determined based on the present value of cash flows expected to be collected and is recognized in earnings. The amount of the total OTTI related to other factors shall be recognized in other comprehensive income, net of applicable taxes. The previous amortized cost basis less the OTTI recognized in earnings shall become the new amortized cost basis of the investment.

 

As of September 30, 2012, the Bank’s security portfolio consisted of 227 securities, 11 of which were in an unrealized loss position of $131,000. There was no OTTI of securities at September 30, 2012. Unrealized losses have not been recognized into income because the issuers’ bonds are of high credit quality (U.S. government agencies and government sponsored enterprises and “A” rated or better Kentucky municipalities), management does not have the intent to sell these securities and it is likely that it will not be required to sell the securities before their anticipated recovery.

 

Mortgage-backed Securities

 

At September 30, 2012, 100% of the mortgage-backed securities held by the Bank were issued by U.S. government sponsored entities and agencies, primarily Fannie Mae and Freddie Mac, institutions which the government has affirmed its commitment to support. Because a decline in market value would be attributable to changes in interest rates and illiquidity, and not credit quality, and because the Bank does not have the intent to sell these mortgage-backed securities and it is likely that it will not be required to sell the securities before their anticipated recovery, the Bank does not consider these securities to be other than temporarily impaired at September 30, 2012.

 

At September 30, 2012 and December 31, 2011, securities with a carrying value of $327,242,000 and $342,288,000 were pledged to secure public deposits and repurchase agreements.

 

Securities with unrealized losses at September 30, 2012 and December 31, 2011, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, were as follows (in thousands):

 

  Less than 12 Months  12 Months or More  Total 
  Fair  Unrealized  Fair  Unrealized  Fair  Unrealized 
Description of Securities Value  Loss  Value  Loss  Value  Loss 
September 30, 2012                        
U.S. government, federal agencies and government sponsored enterprises $4,992  $(23) $-  $-  $4,992  $(23)
Municipal & other obligations  5,518   (108)  -   -   5,518   (108)
Total temporarily impaired $10,510  $(131) $-  $-  $10,510  $(131)
                         
December 31, 2011                        
U.S. government, federal agencies and government sponsored enterprises $18,734  $(12) $-  $-  $18,734  $(12)
U.S government residential mortgage-backed  36,707   (64)  -   -   36,707   (64)
Municipal & other obligations  3,225   (24)  388   (1)  3,613   (25)
Total temporarily impaired $58,666  $(100) $388  $(1) $59,054  $(101)
v2.4.0.6
Loans
9 Months Ended
Sep. 30, 2012
Receivables [Abstract]  
Loans

Note 9 - Loans

 

Loan balances were as follows (in thousands):

 

    9/30/2012     12/31/2011  
             
Commercial   $ 181,170     $ 193,176  
Residential real estate     281,745       266,268  
Nonresidential real estate     555,234       523,485  
Construction     98,609       104,788  
Consumer     16,170       16,618  
Municipal obligations     27,603       27,066  
Gross loans     1,160,531       1,131,401  
Less: Deferred loan origination fees and discount     (1,457 )     (1,447 )
Allowance for loan losses     (16,585 )     (18,288 )
                 
Net loans   $ 1,142,489     $ 1,111,666  

 

The following tables present the activity in the allowance for loan losses for the three months ending September 30, 2012 and 2011, and the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of September 30, 2011 (in thousands):

 

                Non                          
          Residential     Residential                 Municipal        
  Commercial     Real estate     Real estate     Construction     Consumer     Obligations     Total  
September 30, 2012                                          
Allowance for loan losses                                                        
Beginning balance   $ 2,159     $ 3,786     $ 6,666     $ 5,167     $ 392     $ 176     $ 18,346  
Provision for loan losses     (215 )     2,095       875       (729 )     325       (151 )     2,200  
Loans charged off     (89 )     (1,051 )     (436 )     (2,292 )     (371 )     -       (4,239 )
Recoveries     18       3       183       2       72       -       278  
                                                         
Total ending allowance balance   $ 1,873     $ 4,833     $ 7,288     $ 2,148     $ 418     $ 25     $ 16,585  
                                                         
Ending allowance balance attributable to loans                                                        
Individually evaluated for impairment   $ 317     $ 1,729     $ 2,993     $ 1,215     $ -     $ -     $ 6,254  
Collectively evaluated for impairment     1,556       3,104       4,295       933       418       25       10,331  
                                                         
Total ending allowance balance   $ 1,873     $ 4,833     $ 7,288     $ 2,148     $ 418     $ 25     $ 16,585  
                                                         
Loans                                                        
Loans individually evaluated for impairment   $ 1,118     $ 8,500     $ 19,111     $ 5,774     $ -     $ -     $ 34,503  
Loans collectively evaluated for impairment     180,052       273,245       536,123       92,835       16,170       27,603       1,126,028  
                                                         
Total ending loans balance   $ 181,170     $ 281,745     $ 555,234     $ 98,609     $ 16,170     $ 27,603     $ 1,160,531  

 

                Non                          
          Residential     Residential                 Municipal        
  Commercial     Real estate     Real estate     Construction     Consumer     Obligations     Total  
September 30, 2011                                          
Allowance for loan losses                                                        
Beginning balance   $ 3,931     $ 2,403     $ 6,782     $ 4,496     $ 167     $ 37     $ 17,816  
Provision for loan losses     262       384       1,590       181       154       (21 )     2,550  
Loans charged off     (1,014 )     (210 )     (586 )     (501 )     (253 )     -       (2,564 )
Recoveries     28       2       16       -       93       -       139  
                                                         
Total ending allowance balance   $ 3,207     $ 2,579     $ 7,802     $ 4,176     $ 161     $ 16     $ 17,941  

 

The following tables present the activity in the allowance for loan losses for the nine months ending September 30, 2012 and 2011, and the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of September 30, 2012 and December 31, 2011 (in thousands):

  

                Non                          
          Residential     Residential                 Municipal        
  Commercial     Real estate     Real estate     Construction     Consumer     Obligations     Total  
September 30, 2012                                          
Allowance for loan losses                                                        
Beginning balance   $ 3,207     $ 2,591     $ 7,614     $ 4,701     $ 162     $ 13     $ 18,288  
Provision for loan losses     (892 )     3,782       1,095       977       726       12       5,700  
Loans charged off     (461 )     (1,573 )     (1,609 )     (3,538 )     (696 )     -       (7,877 )
Recoveries     19       33       188       8       226       -       474  
                                                         
Total ending allowance balance   $ 1,873     $ 4,833     $ 7,288     $ 2,148     $ 418     $ 25     $ 16,585  
                                                         
Ending allowance balance attributable to loans                                                        
Individually evaluated for impairment   $ 317     $ 1,729     $ 2,993     $ 1,215     $ -     $ -     $ 6,254  
Collectively evaluated for impairment     1,556       3,104       4,295       933       418       25       10,331  
                                                         
Total ending allowance balance   $ 1,873     $ 4,833     $ 7,288     $ 2,148     $ 418     $ 25     $ 16,585  
                                                         
Loans                                                        
Loans individually evaluated for impairment   $ 1,118     $ 8,500     $ 19,111     $ 5,774     $ -     $ -     $ 34,503  
Loans collectively evaluated for impairment     180,052       273,245       536,123       92,835       16,170       27,603       1,126,028  
                                                         
Total ending loans balance   $ 181,170     $ 281,745     $ 555,234     $ 98,609     $ 16,170     $ 27,603     $ 1,160,531  

 

                Non                          
          Residential     Residential                 Municipal        
  Commercial     Real estate     Real estate     Construction     Consumer     Obligations     Total  
September 30, 2011                                          
Allowance for loan losses                                                        
Beginning balance   $ 3,440     $ 2,431     $ 8,126     $ 3,150     $ 166     $ 55     $ 17,368  
Provision for loan losses     1,649       780       2,728       3,025       407       (39 )     8,550  
Loans charged off     (1,934 )     (674 )     (3,070 )     (2,000 )     (715 )     -       (8,393 )
Recoveries     52       42       18       1       303       -       416  
                                                         
Total ending allowance balance   $ 3,207     $ 2,579     $ 7,802     $ 4,176     $ 161     $ 16     $ 17,941  

 

                Non                          
          Residential     Residential                 Municipal        
  Commercial     Real estate     Real estate     Construction     Consumer     Obligations     Total  
December 31, 2011                                          
Ending allowance balance attributable to loans                                                        
Individually evaluated for impairment   $ 224     $ 477     $ 2,994     $ 3,748     $ -     $ -     $ 7,443  
Collectively evaluated for impairment     2,983       2,114       4,620       953       162       13       10,845  
                                                         
    $ 3,207     $ 2,591     $ 7,614     $ 4,701     $ 162     $ 13     $ 18,288  
Loans                                                        
Loans individually evaluated for impairment   $ 917     $ 6,100     $ 20,390     $ 7,854     $ -     $ -     $ 35,261  
Loans collectively evaluated for impairment     192,259       260,168       503,095       96,934       16,618       27,066       1,096,140  
                                                         
Total ending loans balance   $ 193,176     $ 266,268     $ 523,485     $ 104,788     $ 16,618     $ 27,066     $ 1,131,401  

 

The following table presents individually impaired loans by class of loans as of and for the three months ended September 30, 2012 (in thousands):

 

    Unpaid           Allowance for     Average     Interest        
    Principal     Recorded     Loan Losses     Recorded     Income     Interest  
    Balance     Investment     Allocated     Investment     Recognized     Received  
                                     
With no related allowance recorded                                                
Commercial   $ 30     $ 30     $ -     $ 170     $ -     $ -  
                                                 
Residential real estate                                                
Home equity lines of credit     50       50       -       50       -       -  
Multifamily properties     379       48       -       24       -       -  
Other     2,869       2,626       -       2,336       -       -  
                                                 
Nonresidential real estate                                                
Owner occupied properties     802       792       -       490       -       -  
Non owner occupied properties     6,206       5,701       -       3,797       -       -  
                                                 
Construction     809       509       -       432       -       -  
                                                 
With an allowance recorded                                                
Commercial     1,088       1,088       317       823       4       4  
                                                 
Residential real estate                                                
Home equity lines of credit     1,488       1,488       1,341       813       12       12  
Multifamily properties     1,324       1,324       243       1,554       11       11  
Other     3,109       2,964       145       3,309       31       24  
                                                 
Nonresidential real estate                                                
Owner occupied properties     8,544       8,543       2,651       8,774       81       81  
Non owner occupied properties     4,595       4,074       342       6,449       34       34  
                                                 
Construction     6,387       5,266       1,215       6,494       45       45  
                                                 
Total   $ 37,680     $ 34,503     $ 6,254     $ 35,515     $ 218     $ 211  

 

The following table presents individually impaired loans by class of loans as of and for the nine months ended September 30, 2012 (in thousands):

 

    Unpaid           Allowance for     Average     Interest        
    Principal     Recorded     Loan Losses     Recorded     Income     Interest  
    Balance     Investment     Allocated     Investment     Recognized     Received  
                                     
With no related allowance recorded                                                
Commercial   $ 30     $ 30     $ -     $ 263     $ -     $ -  
                                                 
Residential real estate                                                
Home equity lines of credit     50       50       -       50       -       -  
Multifamily properties     379       48       -       273       -       -  
Other     2,869       2,626       -       2,094       -       -  
                                                 
Nonresidential real estate                                                
Owner occupied properties     802       792       -       698       -       -  
Non owner occupied properties     6,206       5,701       -       2,848       -       -  
                                                 
Construction     809       509       -       256       -       -  
                                                 
With an allowance recorded                                                
Commercial     1,088       1,088       317       950       7       5  
                                                 
Residential real estate                                                
Home equity lines of credit     1,488       1,488       1,341       339       12       12  
Multifamily properties     1,324       1,324       243       815       22       22  
Other     3,109       2,964       145       3,557       76       64  
                                                 
Nonresidential real estate                                                
Owner occupied properties     8,544       8,543       2,651       9,081       239       237  
Non owner occupied properties     4,595       4,074       342       7,406       143       106  
                                                 
Construction     6,387       5,266       1,215       8,017       163       155  
                                                 
Total   $ 37,680     $ 34,503     $ 6,254     $ 36,647     $ 662     $ 601  

 

The following table presents individually impaired loans by class of loans as of, and for the three months ended September 30, 2011:

 

    Unpaid           Allowance for     Average     Interest        
    Principal     Recorded     Loan Losses     Recorded     Income     Interest  
    Balance     Investment     Allocated     Investment     Recognized     Received  
                                     
With no related allowance recorded                                                
Commercial   $ 349     $ 310     $ -     $ 371     $ -     $ -  
                                                 
Residential real estate                                                
Home equity lines of credit     -       -       -       -       -       -  
Multifamily properties     -       -       -       -       -       -  
                                                 
Other     2,121       2,121       -       2,325       -       -  
                                                 
Nonresidential real estate                                                
Owner occupied properties     1,011       955       -       587       -       -  
Non owner occupied properties     897       897       -       1,044       -       -  
                                                 
Construction     2,036       889       -       909       -       -  
                                                 
With an allowance recorded                                                
Commercial     1,379       1,379       504       2,370       10       5  
                                                 
Residential real estate                                                
Home equity lines of credit     -       -       -       -       -       -  
Multifamily properties     868       868       291       869       14       9  
Other     2,869       2,850       433       2,755       18       17  
                                                 
Nonresidential real estate                                                
Owner occupied properties     9,471       9,348       1,093       5,123       80       25  
Non owner occupied properties     13,667       11,830       2,185       9,870       90       90  
                                                 
Construction     8,962       7,726       3,256       8,459       76       75  
                                                 
Total   $ 43,630     $ 39,173     $ 7,762     $ 34,682     $ 288     $ 221  

  

The following table presents individually impaired loans by class of loans as of and for the nine months ended September 30, 2011 (in thousands):

 

    Unpaid           Allowance for     Average     Interest        
    Principal     Recorded     Loan Losses     Recorded     Income     Interest  
    Balance     Investment     Allocated     Investment     Recognized     Received  
                                     
With no related allowance recorded                                                
Commercial   $ 349     $ 310     $ -     $ 351     $ -     $ -  
                                                 
Residential real estate                                                
Home equity lines of credit     -       -       -       -       -       - -  
Multifamily properties     -       -       -       17       -       -  
Other     2,121       2,121       -       1,288       -       -  
                                                 
Nonresidential real estate                                                
Owner occupied properties     1,011       955       -       503       -       -  
Non owner occupied properties     897       897       -       848       -       -  
                                                 
Construction     2,036       889       -       559       -       -  
                                                 
With an allowance recorded                                                
Commercial     1,379       1,379       504       1,959       17       9  
                                                 
Residential real estate                                                
Home equity lines of credit     -       -       -       -       -       -  
Multifamily properties     868       868       291       922       42       28  
Other     2,869       2,850       433       2,441       54       51  
                                                 
Nonresidential real estate                                                
Owner occupied properties     9,471       9,348       1,093       2,884       81       26  
Non owner occupied properties     13,667       11,830       2,185       10,044       215       210  
                                                 
Construction     8,962       7,726       3,256       8,035       203       189  
                                                 
Total   $ 43,630     $ 39,173     $ 7,762     $ 29,851     $ 612     $ 513  

 

The following table presents loans individually evaluated for impairment by class of loans as of December 31, 2011 (in thousands):

 

    Unpaid           Allowance for  
    Principal     Recorded     Loan Losses  
    Balance     Investment     Allocated  
                   
With no related allowance recorded                        
Commercial   $ 350     $ 310     $ -  
                         
Residential real estate                        
Home equity lines of credit     50       50       -  
Multifamily properties     538       538       -  
Other     1,703       1,703       -  
                         
Nonresidential real estate                        
Owner occupied properties     1,101       1,101       -  
Non owner occupied properties     2,122       2,116       -  
                         
Construction     356       319       -  
                         
With an allowance recorded                        
Commercial     733       607       224  
                         
Residential real estate                        
Home equity lines of credit     -       -       -  
Multifamily properties     -       -       -  
Other     3,859       3,809       477  
                         
Nonresidential real estate                        
Owner occupied properties     10,771       9,798       1,477  
Non owner occupied properties     8,476       7,375       1,517  
                         
Construction     8,267       7,535       3,748  
                         
Total   $ 38,326     $ 35,261     $ 7,443  

 

The following table presents the aging of the recorded investment in past due loans by class of loans as of September 30, 2012 and December 31, 2011 (in thousands):

 

    Loans     Loans over                    
    30-90 days     90 days           Loans not        
    past due     past due     Nonaccrual     past due     Total  
September 30, 2012                              
Commercial   $ 599     $ -     $ 968     $ 179,603     $ 181,170  
Residential real estate                                        
Home equity lines of credit     827       39       768       98,658       100,292  
Multifamily properties     111       -       48       46,624       46,783  
Other residential real estate     3,657       -       3,676       127,337       134,670  
                                         
Nonresidential real estate                                        
Owner occupied properties     3,591       -       1,368       273,240       278,199  
Non owner occupied properties     1,881       -       6,305       268,849       277,035  
Construction     737       -       1,601       96,271       98,609