Calvin B. Taylor Bankshares, Inc. and Subsidiary
Calvin B. Taylor Bankshares, Inc. and Subsidiary
Calvin B. Taylor Bankshares, Inc. and Subsidiary
Calvin B. Taylor Bankshares, Inc. and Subsidiary
Calvin B. Taylor Bankshares, Inc. and Subsidiary
Calvin B. Taylor Bankshares, Inc. and Subsidiary
Notes to Consolidated Financial Statements (unaudited)
The accompanying unaudited consolidated financial statements conform with accounting principles generally accepted in the United States of America and to the instructions to Form 10-Q. Interim financial statements do not include all the information and footnotes required for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation of financial position and results of operations for these interim periods have been made. These adjustments are of a normal recurring nature. Results of operations for the nine months ended September 30, 2013 are not necessarily indicative of the results that may be expected in any other interim period or for the year ending December 31, 2013. For further information, refer to the audited consolidated financial statements and related footnotes included in the Company's Form 10-K for the year ended December 31, 2012.
Consolidation has resulted in the elimination of all significant intercompany accounts and transactions.
Cash Flows
For purposes of reporting cash flows, cash and cash equivalents include cash on hand, amounts due from banks, federal funds sold, and interest-bearing deposits except for time deposits. Federal funds are purchased and sold for one-day periods.
Per share data
Earnings per common share are determined by dividing net income by the weighted average number of common shares outstanding for the period, as follows:
|
|
2013
|
|
|
2012
|
|
Three months ended September 30
|
|
|
2,956,306
|
|
|
|
2,986,498
|
|
Nine months ended September 30
|
|
|
2,963,853
|
|
|
|
2,992,104
|
|
Calvin B. Taylor Bankshares, Inc. and Subsidiary
Notes to Consolidated Financial Statements (unaudited) (continued)
Investment securities are summarized as follows:
|
|
Amortized
cost
|
|
|
Unrealized
gains
|
|
|
Unrealized
losses
|
|
|
Fair
value
|
|
September 30, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
Available for sale
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Treasury
|
|
$
|
43,047,063
|
|
|
$
|
848,919
|
|
|
$
|
2,922
|
|
|
$
|
43,893,060
|
|
State and municipal
|
|
|
371,030
|
|
|
|
7,125
|
|
|
|
17
|
|
|
|
378,138
|
|
Equity
|
|
|
1,566,913
|
|
|
|
593,502
|
|
|
|
410,360
|
|
|
|
1,750,055
|
|
|
|
$
|
44,985,006
|
|
|
$
|
1,449,546
|
|
|
$
|
413,299
|
|
|
$
|
46,021,253
|
|
Held to maturity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Treasury
|
|
$
|
53,972,888
|
|
|
$
|
120,928
|
|
|
$
|
26
|
|
|
$
|
54,093,790
|
|
U.S. government agency
|
|
|
19,753,609
|
|
|
|
9,247
|
|
|
|
25,926
|
|
|
|
19,736,930
|
|
State and municipal
|
|
|
9,879,237
|
|
|
|
20,188
|
|
|
|
7,630
|
|
|
|
9,891,795
|
|
|
|
$
|
83,605,734
|
|
|
$
|
150,363
|
|
|
$
|
33,582
|
|
|
$
|
83,722,515
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available for sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Treasury
|
|
$
|
71,098,759
|
|
|
$
|
1,078,755
|
|
|
$
|
4,174
|
|
|
$
|
72,173,340
|
|
State and municipal
|
|
|
400,126
|
|
|
|
4,155
|
|
|
|
844
|
|
|
|
403,437
|
|
Equity
|
|
|
1,566,913
|
|
|
|
532,832
|
|
|
|
393,595
|
|
|
|
1,706,150
|
|
|
|
$
|
73,065,798
|
|
|
$
|
1,615,742
|
|
|
$
|
398,613
|
|
|
$
|
74,282,927
|
|
Held to maturity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Treasury
|
|
$
|
51,979,332
|
|
|
$
|
126,149
|
|
|
$
|
661
|
|
|
$
|
52,104,820
|
|
U.S. government agency
|
|
|
9,000,000
|
|
|
|
3,600
|
|
|
|
1,800
|
|
|
|
9,001,800
|
|
State and municipal
|
|
|
4,812,950
|
|
|
|
12,049
|
|
|
|
344
|
|
|
|
4,824,655
|
|
|
|
$
|
65,792,282
|
|
|
$
|
141,798
|
|
|
$
|
2,805
|
|
|
$
|
65,931,275
|
|
Calvin B. Taylor Bankshares, Inc. and Subsidiary
Notes to Consolidated Financial Statements (unaudited) (continued)
2.
|
Investment Securities (continued)
|
The table below shows the gross unrealized losses and fair value of securities that are in an unrealized loss position as of September 30, 2013, aggregated by length of time that individual securities have been in a continuous unrealized loss position.
|
|
Less than 12 months
|
|
|
12 months or more
|
|
|
Total
|
|
|
|
Fair
value
|
|
|
Unrealized
losses
|
|
|
Fair
value
|
|
|
Unrealized
losses
|
|
|
Fair
value
|
|
|
Unrealized
losses
|
|
U.S. Treasury
|
|
$
|
3,997,120
|
|
|
$
|
2,948
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
3,997,120
|
|
|
$
|
2,948
|
|
U.S. government agency
|
|
|
8,035,690
|
|
|
|
25,927
|
|
|
|
-
|
|
|
|
-
|
|
|
|
8,035,690
|
|
|
|
25,927
|
|
State and municipal
|
|
|
1,847,238
|
|
|
|
7,646
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,847,238
|
|
|
|
7,646
|
|
Equity securities
|
|
|
5,000
|
|
|
|
12,100
|
|
|
|
734,329
|
|
|
|
398,259
|
|
|
|
739,329
|
|
|
|
410,359
|
|
|
|
$
|
13,885,048
|
|
|
$
|
48,621
|
|
|
$
|
734,329
|
|
|
$
|
398,259
|
|
|
$
|
14,619,377
|
|
|
$
|
446,880
|
|
The debt securities in unrealized loss positions are issues of the U.S. Treasury, Federal Home Loan Bank (a U. S. government agency), and highly rated general revenue obligations of states and municipalities. The Company has the ability and the intent to hold these securities until they are called or mature at face value. Fluctuations in fair value reflect market conditions and are not indicative of an other-than-temporary impairment (OTTI) of the investment.
Equity securities for which an unrealized loss is recorded are issues of six community banks or bank holding companies located in the same general geographic area as the Company. Management believes that these fluctuations in fair value reflect market conditions and are not indicative of an other-than-temporary impairment of the investment as of September 30, 2013. Management continues to monitor the financial condition of the issuers. During the nine months ended September 30, 2012, the Company recorded expense of $31,904 related to the other than temporary impairment of value of a community bank equity security.
The amortized cost and estimated fair value of debt securities, by contractual maturity, and the amount of pledged securities follow. Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.
|
|
September 30, 2013
|
|
|
December 31, 2012
|
|
|
|
Amortized
cost
|
|
|
Fair
value
|
|
|
Amortized
cost
|
|
|
Fair
value
|
|
Available for sale
|
|
|
|
|
|
|
|
|
|
|
|
|
Within one year
|
|
$
|
16,065,467
|
|
|
$
|
16,089,493
|
|
|
$
|
41,027,015
|
|
|
$
|
41,048,970
|
|
After one year through five years
|
|
|
25,355,049
|
|
|
|
25,395,605
|
|
|
|
28,474,650
|
|
|
|
28,519,007
|
|
After five years through ten years
|
|
|
1,997,577
|
|
|
|
2,786,100
|
|
|
|
-
|
|
|
|
-
|
|
After ten years
|
|
|
-
|
|
|
|
-
|
|
|
|
1,997,220
|
|
|
|
3,008,800
|
|
Total available for sale
|
|
$
|
43,418,093
|
|
|
$
|
44,271,198
|
|
|
$
|
71,498,885
|
|
|
$
|
72,576,777
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Held to maturity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Within one year
|
|
$
|
31,052,723
|
|
|
$
|
31,114,980
|
|
|
$
|
30,318,940
|
|
|
$
|
30,346,374
|
|
After one year through five years
|
|
|
52,553,011
|
|
|
|
52,607,535
|
|
|
|
35,473,342
|
|
|
|
35,584,901
|
|
Total held to maturity
|
|
$
|
83,605,734
|
|
|
$
|
83,722,515
|
|
|
$
|
65,792,282
|
|
|
$
|
65,931,275
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pledged securities
|
|
$
|
26,127,600
|
|
|
$
|
26,189,354
|
|
|
$
|
24,796,570
|
|
|
$
|
24,894,038
|
|
Investments are pledged to secure deposits of federal and local governments. Pledged securities also serve as collateral for repurchase agreements entered into with our customers.
Calvin B. Taylor Bankshares, Inc. and Subsidiary
Notes to Consolidated Financial Statements (unaudited) (continued)
3.
|
Loans and Allowance for Loan Losses
|
Major classifications of loans are as follows:
|
|
September 30, 2013
|
|
|
December 31, 2012
|
|
Real estate mortgages
|
|
|
|
|
|
|
Construction, land development, and land
|
|
$
|
12,475,478
|
|
|
$
|
13,819,207
|
|
Residential 1 to 4 family, 1st liens
|
|
|
82,177,991
|
|
|
|
81,794,242
|
|
Residential 1 to 4 family, subordinate liens
|
|
|
1,886,712
|
|
|
|
1,932,743
|
|
Commercial properties
|
|
|
112,469,280
|
|
|
|
115,655,467
|
|
Commercial
|
|
|
12,652,347
|
|
|
|
12,946,639
|
|
Consumer
|
|
|
2,053,162
|
|
|
|
1,978,753
|
|
|
|
|
223,714,970
|
|
|
|
228,127,051
|
|
Allowance for loan losses
|
|
|
825,591
|
|
|
|
780,493
|
|
Loans, net
|
|
$
|
222,889,379
|
|
|
$
|
227,346,558
|
|
Nonperforming loans are loans past due 90 or more days and still accruing plus nonaccrual loans. Nonperforming assets are comprised of nonperforming loans combined with real estate acquired in foreclosure and held for sale (other real estate owned). The following table details the composition of nonperforming assets:
|
|
September 30, 2013
|
|
|
December 31, 2012
|
|
Loans 90 days or more past due and still accruing
|
|
|
|
|
|
|
Real estate mortgages
|
|
|
|
|
|
|
Residential 1 to 4 family
|
|
$
|
387,575
|
|
|
$
|
-
|
|
Commercial properties
|
|
|
684,422
|
|
|
|
684,422
|
|
Total loans 90 or more days past due and still accruing
|
|
|
1,071,997
|
|
|
|
684,422
|
|
|
|
|
|
|
|
|
|
|
Nonaccruing loans
|
|
|
|
|
|
|
|
|
Nonaccruing loans - current
|
|
|
|
|
|
|
|
|
Real estate mortgages
|
|
|
|
|
|
|
|
|
Construction, land development, and land
|
|
|
-
|
|
|
|
550,614
|
|
Residential 1 to 4 family
|
|
|
-
|
|
|
|
237,527
|
|
Total nonaccruing loans - current
|
|
|
-
|
|
|
|
788,141
|
|
|
|
|
|
|
|
|
|
|
Nonaccruing loans - past due 30 days or more
|
|
|
|
|
|
|
|
|
Real estate mortgages
|
|
|
|
|
|
|
|
|
Construction, land development, and land
|
|
|
320,415
|
|
|
|
325,966
|
|
Residential 1 to 4 family
|
|
|
495,461
|
|
|
|
668,794
|
|
Commercial properties
|
|
|
650,000
|
|
|
|
890,967
|
|
Total nonaccruing loans - past due 30 days or more
|
|
|
1,465,876
|
|
|
|
1,885,727
|
|
Total nonaccruing loans
|
|
|
1,465,876
|
|
|
|
2,673,868
|
|
|
|
|
|
|
|
|
|
|
Total nonperforming loans
|
|
|
2,537,873
|
|
|
|
3,358,290
|
|
Other real estate owned
|
|
|
1,114,800
|
|
|
|
1,440,900
|
|
Total nonperforming assets
|
|
$
|
3,652,673
|
|
|
$
|
4,799,190
|
|
|
|
|
|
|
|
|
|
|
Interest not accrued to income on nonaccruing loans
|
|
$
|
133,694
|
|
|
$
|
178,546
|
|
Interest income of $106,934 was recognized on a cash-basis during the 9 months ended September 30, 2013 related to the full payoff of a nonaccrual loan. No interest income was recognized on a cash-basis on nonaccruing loans during the year ended December 31, 2012. Other than previously noted, payments received on non-accruing loans were applied as reductions of principal.
Calvin B. Taylor Bankshares, Inc. and Subsidiary
Notes to Consolidated Financial Statements (unaudited) (continued)
3.
|
Loans and Allowance for Loan Losses (continued)
|
The following is a schedule of transactions in the allowance for loan losses by type of loan. The Company did not acquire any loans with deteriorated credit quality during the periods presented.
|
|
Real estate mortgages
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2013
|
|
|
|
|
Residential
|
|
|
Commercial
|
|
|
Commercial
|
|
|
Consumer
|
|
|
Unallocated
|
|
|
Total
|
|
Beginning balance
|
|
$
|
119,036
|
|
|
$
|
161,984
|
|
|
$
|
250,781
|
|
|
$
|
168,033
|
|
|
$
|
55,595
|
|
|
$
|
25,064
|
|
|
$
|
780,493
|
|
Loans charged off
|
|
|
-
|
|
|
|
(299,100
|
)
|
|
|
(336,495
|
)
|
|
|
-
|
|
|
|
(11,184
|
)
|
|
|
-
|
|
|
|
(646,779
|
)
|
Recoveries
|
|
|
12,000
|
|
|
|
4,949
|
|
|
|
-
|
|
|
|
600
|
|
|
|
4,328
|
|
|
|
-
|
|
|
|
21,877
|
|
Provision charged to operations
|
|
|
(25,250
|
)
|
|
|
325,950
|
|
|
|
352,670
|
|
|
|
(600
|
)
|
|
|
14,351
|
|
|
|
2,879
|
|
|
|
670,000
|
|
Ending balance
|
|
$
|
105,786
|
|
|
$
|
193,783
|
|
|
$
|
266,956
|
|
|
$
|
168,033
|
|
|
$
|
63,090
|
|
|
$
|
27,943
|
|
|
$
|
825,591
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Individually evaluated for impairment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance in allowance
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
$
|
-
|
|
Related loan balance
|
|
$
|
320,415
|
|
|
$
|
4,072,009
|
|
|
$
|
5,502,321
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
$
|
9,894,745
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Collectively evaluated for impairment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance in allowance
|
|
$
|
105,786
|
|
|
$
|
193,783
|
|
|
$
|
266,956
|
|
|
$
|
168,033
|
|
|
$
|
63,090
|
|
|
$
|
27,943
|
|
|
$
|
825,591
|
|
Related loan balance
|
|
$
|
12,155,063
|
|
|
$
|
79,992,694
|
|
|
$
|
106,966,959
|
|
|
$
|
12,652,347
|
|
|
$
|
2,053,162
|
|
|
|
|
|
|
$
|
213,820,225
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance
|
|
$
|
160,392
|
|
|
$
|
42,064
|
|
|
$
|
193,570
|
|
|
$
|
197,353
|
|
|
$
|
60,487
|
|
|
$
|
18,395
|
|
|
$
|
672,261
|
|
Loans charged off
|
|
|
(45,081
|
)
|
|
|
(239,043
|
)
|
|
|
(206,707
|
)
|
|
|
(18,559
|
)
|
|
|
(14,253
|
)
|
|
|
-
|
|
|
|
(523,643
|
)
|
Recoveries
|
|
|
-
|
|
|
|
16,843
|
|
|
|
-
|
|
|
|
103
|
|
|
|
9,229
|
|
|
|
-
|
|
|
|
26,175
|
|
Provision charged to operations
|
|
|
3,725
|
|
|
|
342,120
|
|
|
|
263,918
|
|
|
|
(10,864
|
)
|
|
|
132
|
|
|
|
6,669
|
|
|
|
605,700
|
|
Ending balance
|
|
$
|
119,036
|
|
|
$
|
161,984
|
|
|
$
|
250,781
|
|
|
$
|
168,033
|
|
|
$
|
55,595
|
|
|
$
|
25,064
|
|
|
$
|
780,493
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Individually evaluated for impairment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance in allowance
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
$
|
-
|
|
Related loan balance
|
|
$
|
878,029
|
|
|
$
|
4,116,048
|
|
|
$
|
6,307,478
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
$
|
11,301,555
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Collectively evaluated for impairment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance in allowance
|
|
$
|
119,036
|
|
|
$
|
161,984
|
|
|
$
|
250,781
|
|
|
$
|
168,033
|
|
|
$
|
55,595
|
|
|
$
|
25,064
|
|
|
$
|
780,493
|
|
Related loan balance
|
|
$
|
12,941,178
|
|
|
$
|
79,610,937
|
|
|
$
|
109,347,989
|
|
|
$
|
12,946,639
|
|
|
$
|
1,978,753
|
|
|
|
|
|
|
$
|
216,825,496
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance
|
|
$
|
160,392
|
|
|
$
|
42,064
|
|
|
$
|
193,570
|
|
|
$
|
197,353
|
|
|
$
|
60,487
|
|
|
$
|
18,395
|
|
|
$
|
672,261
|
|
Loans charged off
|
|
|
(45,081
|
)
|
|
|
(239,044
|
)
|
|
|
(206,707
|
)
|
|
|
(16,057
|
)
|
|
|
(11,077
|
)
|
|
|
-
|
|
|
|
(517,966
|
)
|
Recoveries
|
|
|
-
|
|
|
|
15,943
|
|
|
|
-
|
|
|
|
103
|
|
|
|
8,375
|
|
|
|
-
|
|
|
|
24,421
|
|
Provision charged to operations
|
|
|
15,190
|
|
|
|
319,100
|
|
|
|
224,200
|
|
|
|
(59,053
|
)
|
|
|
(1,083
|
)
|
|
|
5,346
|
|
|
|
503,700
|
|
Ending balance
|
|
$
|
130,501
|
|
|
$
|
138,063
|
|
|
$
|
211,063
|
|
|
$
|
122,346
|
|
|
$
|
56,702
|
|
|
$
|
23,741
|
|
|
$
|
682,416
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Individually evaluated for impairment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance in allowance
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
$
|
-
|
|
Related loan balance
|
|
$
|
900,199
|
|
|
$
|
4,005,497
|
|
|
$
|
7,291,435
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
$
|
12,197,131
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Collectively evaluated for impairment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance in allowance
|
|
$
|
130,501
|
|
|
$
|
138,063
|
|
|
$
|
211,063
|
|
|
$
|
122,346
|
|
|
$
|
56,702
|
|
|
$
|
23,741
|
|
|
$
|
682,416
|
|
Related loan balance
|
|
$
|
11,773,620
|
|
|
$
|
77,492,719
|
|
|
$
|
109,337,022
|
|
|
$
|
10,849,619
|
|
|
$
|
1,997,699
|
|
|
|
|
|
|
$
|
211,450,679
|
|
Calvin B. Taylor Bankshares, Inc. and Subsidiary
Notes to Consolidated Financial Statements (unaudited) (continued)
3.
|
Loans and Allowance for Loan Losses (continued)
|
The table below shows the relationship of net charged-off loans and the balance in the allowance to gross loans and average loans.
|
|
For nine months ended
September 30
|
|
|
For the year ended
December 31
|
|
|
|
2013
|
|
|
2012
|
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
Net loans charged off
|
|
$
|
624,902
|
|
|
$
|
493,545
|
|
|
$
|
497,468
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses at the end of the period
|
|
$
|
825,591
|
|
|
$
|
682,416
|
|
|
$
|
780,493
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross loans outstanding at the end of the period
|
|
$
|
223,714,970
|
|
|
$
|
223,647,810
|
|
|
$
|
228,127,051
|
|
Allowance for loan losses to gross loans outstanding at the end of the period
|
|
|
0.37
|
%
|
|
|
0.31
|
%
|
|
|
0.34
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average loans outstanding during the period
|
|
$
|
233,382,435
|
|
|
$
|
229,988,427
|
|
|
$
|
229,923,000
|
|
Annualized net charge-offs as a percentage of average loans outstanding during the period
|
|
|
0.36
|
%
|
|
|
0.29
|
%
|
|
|
0.22
|
%
|
Loans are considered past due when either principal or interest is not paid by the date on which payment is due. The following table is an analysis of past due loans by days past due and type of loan.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
90 Days Past
|
|
September 30, 2013
|
|
|
|
|
|
|
|
90 Days Past
Due or Greater
|
|
|
|
|
|
Current
|
|
|
|
|
|
Due or Greater
and Accruing
|
|
Real estate mortgages
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction, land development, and land
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
320,415
|
|
|
$
|
320,415
|
|
|
$
|
12,155,063
|
|
|
$
|
12,475,478
|
|
|
$
|
-
|
|
Residential 1 to 4 family, 1st lien
|
|
|
446,156
|
|
|
|
216,406
|
|
|
|
866,864
|
|
|
|
1,529,426
|
|
|
|
80,648,565
|
|
|
|
82,177,991
|
|
|
|
387,575
|
|
Residential 1 to 4 family, subordinate
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,886,712
|
|
|
|
1,886,712
|
|
|
|
-
|
|
Commercial properties
|
|
|
86,128
|
|
|
|
1,648,592
|
|
|
|
1,334,422
|
|
|
|
3,069,142
|
|
|
|
109,400,138
|
|
|
|
112,469,280
|
|
|
|
684,422
|
|
Commercial
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
12,652,347
|
|
|
|
12,652,347
|
|
|
|
-
|
|
Consumer
|
|
|
9,777
|
|
|
|
770
|
|
|
|
-
|
|
|
|
10,547
|
|
|
|
2,042,615
|
|
|
|
2,053,162
|
|
|
|
-
|
|
Total
|
|
$
|
542,061
|
|
|
$
|
1,865,768
|
|
|
$
|
2,521,701
|
|
|
$
|
4,929,530
|
|
|
$
|
218,785,440
|
|
|
$
|
223,714,970
|
|
|
$
|
1,071,997
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate mortgages
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction, land development, and land
|
|
$
|
327,415
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
327,415
|
|
|
$
|
13,491,792
|
|
|
$
|
13,819,207
|
|
|
$
|
-
|
|
Residential 1 to 4 family, 1st lien
|
|
|
2,325,354
|
|
|
|
783,618
|
|
|
|
648,693
|
|
|
|
3,757,665
|
|
|
|
78,036,577
|
|
|
|
81,794,242
|
|
|
|
-
|
|
Residential 1 to 4 family, subordinate
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,932,743
|
|
|
|
1,932,743
|
|
|
|
-
|
|
Commercial properties
|
|
|
519,766
|
|
|
|
-
|
|
|
|
1,575,389
|
|
|
|
2,095,155
|
|
|
|
113,560,312
|
|
|
|
115,655,467
|
|
|
|
684,422
|
|
Commercial
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
12,946,639
|
|
|
|
12,946,639
|
|
|
|
-
|
|
Consumer
|
|
|
17,441
|
|
|
|
1,544
|
|
|
|
-
|
|
|
|
18,985
|
|
|
|
1,959,768
|
|
|
|
1,978,753
|
|
|
|
-
|
|
Total
|
|
$
|
3,189,976
|
|
|
$
|
785,162
|
|
|
$
|
2,224,082
|
|
|
$
|
6,199,220
|
|
|
$
|
221,927,831
|
|
|
$
|
228,127,051
|
|
|
$
|
684,422
|
|
Calvin B. Taylor Bankshares, Inc. and Subsidiary
Notes to Consolidated Financial Statements (unaudited) (continued)
3.
|
Loans and Allowance for Loan Losses (continued)
|
Loans are considered impaired when management considers it unlikely that collection of principal and interest payments will be made according to contractual terms. A performing loan may be categorized as impaired based on knowledge of circumstances that are deemed relevant to loan collection. Not all impaired loans are past due nor are losses expected for every impaired loan. If a loss is expected, an impaired loan may have specific reserves allocated to it in the allowance for loan losses. A schedule of impaired loans at period ends and their average balances for the year follows:
September 30, 2013
|
|
Unpaid
principal
balance
|
|
|
Recorded
investment
with no
allowance
|
|
|
Recorded
investment
with an
allowance
|
|
|
Related
Allowance
|
|
|
Average
Recorded
Investment
|
|
|
Interest Income
Recognized
During
Impairment
|
|
Real estate mortgages
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction, land development, and land
|
|
$
|
320,415
|
|
|
$
|
320,415
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
323,915
|
|
|
$
|
-
|
|
Residential 1-4 family, 1st liens
|
|
|
4,197,125
|
|
|
|
3,957,054
|
|
|
|
-
|
|
|
|
-
|
|
|
|
4,119,466
|
|
|
|
107,861
|
|
Residential 1-4 family, subordinate liens
|
|
|
114,955
|
|
|
|
114,955
|
|
|
|
-
|
|
|
|
-
|
|
|
|
116,203
|
|
|
|
6,407
|
|
Commercial properties
|
|
|
6,902,953
|
|
|
|
5,502,321
|
|
|
|
-
|
|
|
|
-
|
|
|
|
5,645,016
|
|
|
|
237,758
|
|
Total
|
|
$
|
11,535,448
|
|
|
$
|
9,894,745
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
10,204,600
|
|
|
$
|
352,026
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate mortgages
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction, land development, and land
|
|
$
|
878,029
|
|
|
$
|
878,029
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
921,869
|
|
|
$
|
-
|
|
Residential 1-4 family, 1st liens
|
|
|
4,158,599
|
|
|
|
3,998,598
|
|
|
|
-
|
|
|
|
-
|
|
|
|
4,082,975
|
|
|
|
182,756
|
|
Residential 1-4 family, subordinate liens
|
|
|
117,451
|
|
|
|
117,450
|
|
|
|
-
|
|
|
|
-
|
|
|
|
118,983
|
|
|
|
6,055
|
|
Commercial properties
|
|
|
7,417,477
|
|
|
|
6,307,478
|
|
|
|
-
|
|
|
|
-
|
|
|
|
6,468,862
|
|
|
|
348,590
|
|
Total
|
|
$
|
12,571,556
|
|
|
$
|
11,301,555
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
11,592,689
|
|
|
$
|
537,401
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate mortgages
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction, land development, and land
|
|
$
|
900,199
|
|
|
$
|
900,199
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
932,954
|
|
|
$
|
-
|
|
Residential 1-4 family, 1st liens
|
|
|
4,037,240
|
|
|
|
3,887,240
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3,964,100
|
|
|
|
134,800
|
|
Residential 1-4 family, subordinate liens
|
|
|
118,257
|
|
|
|
118,257
|
|
|
|
-
|
|
|
|
-
|
|
|
|
119,386
|
|
|
|
4,539
|
|
Commercial properties
|
|
|
8,692,067
|
|
|
|
7,291,435
|
|
|
|
-
|
|
|
|
-
|
|
|
|
7,223,711
|
|
|
|
263,914
|
|
Total
|
|
$
|
13,747,763
|
|
|
$
|
12,197,131
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
12,240,151
|
|
|
$
|
403,253
|
|
Calvin B. Taylor Bankshares, Inc. and Subsidiary
Notes to Consolidated Financial Statements (unaudited) (continued)
3.
|
Loans and Allowance for Loan Losses (continued)
|
Credit quality is measured based on an internally designed grading scale. The grades correspond to regulatory rating categories of pass, special mention, substandard, and doubtful. Evaluation of grades assigned to individual loans is completed no less than quarterly. Pass credits are secured or unsecured loans with satisfactory payment history and supporting documentation. Special mention loans are those with satisfactory payment history that have a defect in supporting documentation which is defined by the Bank as a critical defect. This may include missing financial data or improperly executed collateral documents. Substandard credits are those with a weakness that may jeopardize repayment, such as deteriorating collateral value, or for which the borrower’s ability to meet payment obligations is questionable. Doubtful credits are loans in which the borrower’s ability to repay the loan in full is improbable and some loss is expected. Loans graded as doubtful are most likely to result in the loss of principal or loss of revenue due to placement in nonaccrual status. Included in substandard and doubtful credits are loans on which terms have been modified by a reduction of interest rate and/or payment amount in order to enable a distressed borrower to service the debt. Management evaluates loans graded as doubtful individually and provides for anticipated losses through adjustment of the allowance for loan losses and charges to current earnings.
Credit quality, as measured by internally assigned grades, is an important component in the calculation of an adequate allowance for loan losses. The following table summarizes the recorded investment in loans by credit quality indicator.
|
|
September 30, 2013
|
|
|
December 31, 2012
|
|
Real Estate Credit Risk Profile by Internally Assigned Grade Construction, land development, and land
|
|
|
|
|
|
|
Pass
|
|
$
|
12,155,063
|
|
|
$
|
12,941,178
|
|
Doubtful
|
|
|
|
|
|
|
|
|
Nonperforming: 90 days or more past due and/or non-accruing
|
|
|
320,415
|
|
|
|
878,029
|
|
Total
|
|
$
|
12,475,478
|
|
|
$
|
13,819,207
|
|
|
|
|
|
|
|
|
|
|
Residential 1 to 4 family
|
|
|
|
|
|
|
|
|
Pass
|
|
$
|
80,077,532
|
|
|
$
|
79,274,541
|
|
Special Mention
|
|
|
-
|
|
|
|
469,715
|
|
Substandard
|
|
|
1,362,151
|
|
|
|
3,077,858
|
|
Doubtful
|
|
|
|
|
|
|
|
|
Less than 90 days past due and accruing
|
|
|
1,741,984
|
|
|
|
-
|
|
Nonperforming: 90 days or more past due and/or non-accruing
|
|
|
883,036
|
|
|
|
904,871
|
|
Total
|
|
$
|
84,064,703
|
|
|
$
|
83,726,985
|
|
|
|
|
|
|
|
|
|
|
Commercial properties
|
|
|
|
|
|
|
|
|
Pass
|
|
$
|
109,099,454
|
|
|
$
|
111,573,888
|
|
Special Mention
|
|
|
-
|
|
|
|
-
|
|
Substandard
|
|
|
1,649,149
|
|
|
|
2,118,552
|
|
Doubtful
|
|
|
|
|
|
|
|
|
Less than 90 days past due and accruing
|
|
|
386,255
|
|
|
|
387,638
|
|
Nonperforming: 90 days or more past due and/or non-accruing
|
|
|
1,334,422
|
|
|
|
1,575,389
|
|
Total
|
|
$
|
112,469,280
|
|
|
$
|
115,655,467
|
|
|
|
|
|
|
|
|
|
|
Commercial Credit Risk Profile by Internally Assigned Grade
|
|
|
|
|
|
Pass
|
|
$
|
12,652,347
|
|
|
$
|
12,946,639
|
|
Total
|
|
$
|
12,652,347
|
|
|
$
|
12,946,639
|
|
|
|
|
|
|
|
|
|
|
Consumer Credit Risk Profile by Internally Assigned Grade
|
|
|
|
|
|
Pass
|
|
$
|
2,037,696
|
|
|
$
|
1,950,758
|
|
Special Mention
|
|
|
-
|
|
|
|
27,995
|
|
Substandard
|
|
|
15,466
|
|
|
|
-
|
|
Total
|
|
$
|
2,053,162
|
|
|
$
|
1,978,753
|
|
Calvin B. Taylor Bankshares, Inc. and Subsidiary
Notes to Consolidated Financial Statements (unaudited) (continued)
3.
|
Loans and Allowance for Loan Losses (continued)
|
The modification or restructuring of terms on a loan is considered a troubled debt restructuring if it is done to accommodate a borrower who is experiencing financial difficulties. The lender may forgive principal, lower the interest rate or payment amount, or may modify the payment due dates or maturity date of a loan for a troubled borrower.
Troubled debt restructures are evaluated for impairment at the time of restructure and each subsequent reporting period. An identified loss is recorded as a specific reserve in the allowance for loan losses or charged-off if the loan is deemed to be collateral dependent. Losses of $260,614 were recorded as part of restructurings completed in the 9 months ended September 30, 2013. A loss of $26,054 was recorded as part of a restructuring completed in the 9 months ended September 30, 2012. Defaults have occurred on restructured loans which resulted in losses and, if needed, additional restructuring to accommodate changes in the borrower’s financial position. Other restructured loans have been collected with no loss of principal, returned to their original contractual terms, or refinanced at market rates and terms.
The following table details information about troubled debt restructurings for the 9 months ended September 30, 2013 and 2012 and the 12 months ended December 31, 2012.
|
|
At the time of restructuring
|
|
|
Within 12 months of restructuring
|
|
|
|
|
|
|
Balance prior to
restructuring
|
|
|
Balance after
restructuring
|
|
|
|
|
|
|
|
|
Losses recognized
upon default
|
|
September 30, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real Estate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential 1-4 family, 1st liens
|
|
|
3
|
|
|
$
|
1,504,381
|
|
|
$
|
1,287,000
|
|
|
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Commercial properties
|
|
|
1
|
|
|
|
528,233
|
|
|
|
485,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Total
|
|
|
4
|
|
|
$
|
2,032,614
|
|
|
$
|
1,772,000
|
|
|
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real Estate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential 1-4 family, 1st liens
|
|
|
3
|
|
|
$
|
957,304
|
|
|
$
|
940,603
|
|
|
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Commercial properties
|
|
|
3
|
|
|
|
1,254,402
|
|
|
|
1,254,402
|
|
|
|
1
|
|
|
|
604,997
|
|
|
|
206,707
|
|
Total
|
|
|
6
|
|
|
$
|
2,211,706
|
|
|
$
|
2,195,005
|
|
|
|
1
|
|
|
$
|
604,997
|
|
|
$
|
206,707
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real Estate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential 1-4 family, 1st liens
|
|
|
3
|
|
|
$
|
957,304
|
|
|
$
|
940,603
|
|
|
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Commercial properties
|
|
|
2
|
|
|
|
994,997
|
|
|
|
994,997
|
|
|
|
1
|
|
|
|
604,997
|
|
|
|
206,707
|
|
Total
|
|
|
5
|
|
|
$
|
1,952,301
|
|
|
$
|
1,935,600
|
|
|
|
1
|
|
|
$
|
604,997
|
|
|
$
|
206,707
|
|
Troubled debt restructurings with outstanding principal balances as of September 30, 2013 were as follows:
|
Total
|
|
Paying as agreed
under modified terms
|
|
Past due 30 days or
more or non-accruing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real Estate
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction, land development, and land
|
|
|
1
|
|
|
$
|
320,415
|
|
|
|
-
|
|
|
$
|
-
|
|
|
|
1
|
|
|
$
|
320,415
|
|
Residential 1 to 4 family
|
|
|
12
|
|
|
|
3,419,499
|
|
|
|
11
|
|
|
|
3,188,972
|
|
|
|
1
|
|
|
|
230,527
|
|
Commercial properties
|
|
|
7
|
|
|
|
4,817,899
|
|
|
|
3
|
|
|
|
2,519,308
|
|
|
|
4
|
|
|
|
2,298,591
|
|
Total
|
|
|
20
|
|
|
$
|
8,557,813
|
|
|
|
14
|
|
|
$
|
5,708,280
|
|
|
|
6
|
|
|
$
|
2,849,533
|
|
Calvin B. Taylor Bankshares, Inc. and Subsidiary
Notes to Consolidated Financial Statements (unaudited) (continued)
Loan commitments are agreements to lend to customers as long as there is no violation of any conditions of the contracts. Loan commitments generally have interest rates at current market rates, fixed expiration dates, and may require payment of a fee. Letters of credit are commitments issued to guarantee the performance of a customer to a third party.
Loan commitments and letters of credit are made on the same terms, including collateral, as outstanding loans. The Company's exposure to loss in the event of nonperformance by the borrower is represented by the contract amount of the commitment.
Outstanding loan commitments, lines of credit, and letters of credit are as follows:
|
|
September 30, 2013
|
|
|
December 31, 2012
|
|
Loan commitments and lines of credit
|
|
|
|
|
|
|
Construction and land development
|
|
$
|
2,261,603
|
|
|
$
|
5,486,662
|
|
Other
|
|
|
23,190,716
|
|
|
|
22,177,291
|
|
Total loan commitments and lines of credit
|
|
$
|
25,452,319
|
|
|
$
|
27,663,953
|
|
|
|
|
|
|
|
|
|
|
Standby letters of credit
|
|
$
|
1,260,670
|
|
|
$
|
1,506,289
|
|
5.
|
Assets Measured at Fair Value
|
The fair value of an asset or liability is the price that would be received to sell that asset or paid to transfer that liability in an orderly transaction occurring in the principal market for such asset or liability.
The fair value hierarchy established in the Financial Accounting Standards Board accounting standards codification topic titled
Fair Value Measurements
establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. Level 1 inputs are based on unadjusted quoted market prices in active markets for identical assets or liabilities. Level 2 inputs are based on significant observable inputs other than those in Level 1, either directly or indirectly. Level 3 inputs are based on significant unobservable inputs. The level in the hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement.
Financial assets measured at fair value on a recurring basis include investment securities classified as available for sale. U.S. Treasury securities and an equity investment in an actively traded public utility are valued utilizing Level 1 inputs. Municipal debt securities and equity investments in community banks are valued using Level 2 inputs. The Company has no financial assets measured at fair value on a recurring basis that are valued with Level 3 inputs. The fair values for available for sale investment securities measured on a recurring basis were established as follows:
|
|
Total Fair Value
|
|
|
Level 1 Inputs
|
|
|
Level 2 Inputs
|
|
September 30, 2013
|
|
|
|
|
|
|
|
|
|
Securities available for sale:
|
|
|
|
|
|
|
|
|
|
U.S. Treasury
|
|
$
|
43,893,060
|
|
|
$
|
43,893,060
|
|
|
$
|
-
|
|
State and municipal
|
|
|
378,138
|
|
|
|
-
|
|
|
|
378,138
|
|
Equity
|
|
|
1,750,055
|
|
|
|
405,152
|
|
|
|
1,344,903
|
|
Total assets measured on a recurring basis
|
|
$
|
46,021,253
|
|
|
$
|
44,298,212
|
|
|
$
|
1,723,041
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities available for sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Treasury
|
|
$
|
72,173,340
|
|
|
$
|
72,173,340
|
|
|
$
|
-
|
|
State and municipal
|
|
|
403,437
|
|
|
|
-
|
|
|
|
403,437
|
|
Equity
|
|
|
1,706,150
|
|
|
|
401,632
|
|
|
|
1,304,518
|
|
Total assets measured on a recurring basis
|
|
$
|
74,282,927
|
|
|
$
|
72,574,972
|
|
|
$
|
1,707,955
|
|
Calvin B. Taylor Bankshares, Inc. and Subsidiary
Notes to Consolidated Financial Statements (unaudited) (continued)
5.
|
Fair Value Measurements (continued)
|
The Company measures and reports certain financial and non-financial assets at fair value on a non-recurring basis. Financial assets measured and reported at fair value on a non-recurring basis include impaired loans that are deemed by management to be collateral dependent and have been recorded at the fair value of the underlying collateral. Non-financial assets measured and reported on a non-recurring basis included other real estate owned acquired through foreclosure. Financial and non-financial assets measured and reported at fair value on a non-recurring basis, segregated by the level of the valuation inputs within the fair value hierarchy used to measure fair value are detailed in the following table.
|
|
Total Fair Value
|
|
|
Level 3 Inputs
|
|
September 30, 2013
|
|
|
|
|
|
|
Impaired loans recorded at fair value of collateral
|
|
|
|
|
|
|
Residential 1 to 4 family
|
|
$
|
2,237,445
|
|
|
$
|
2,237,445
|
|
Commercial mortgages
|
|
|
1,036,255
|
|
|
|
1,036,255
|
|
Total impaired loans recorded at fair value of collateral
|
|
|
3,273,700
|
|
|
|
3,273,700
|
|
|
|
|
|
|
|
|
|
|
Other real estate owned recorded at fair value of collateral
|
|
|
|
|
|
|
|
|
Residential 1 to 4 family
|
|
|
540,500
|
|
|
|
540,500
|
|
Construction, land development, and land
|
|
|
574,300
|
|
|
|
574,300
|
|
Total other real estate owned recorded at fair value of collateral
|
|
|
1,114,800
|
|
|
|
1,114,800
|
|
|
|
|
|
|
|
|
|
|
Total assets measured on a non-recurring basis
|
|
$
|
4,388,500
|
|
|
$
|
4,388,500
|
|
|
|
|
|
|
|
|
|
|
December 31, 2012
|
|
|
|
|
|
|
|
|
Impaired loans recorded at fair value of collateral
|
|
|
|
|
|
|
|
|
Residential 1 to 4 family
|
|
$
|
785,464
|
|
|
$
|
785,464
|
|
Commercial mortgages
|
|
|
1,278,605
|
|
|
|
1,278,605
|
|
Total impaired loans recorded at fair value of collateral
|
|
|
2,064,069
|
|
|
|
2,064,069
|
|
|
|
|
|
|
|
|
|
|
Other real estate owned recorded at fair value of collateral
|
|
|
|
|
|
|
|
|
Residential 1 to 4 family
|
|
|
866,600
|
|
|
|
866,600
|
|
Construction, land development, and land
|
|
|
574,300
|
|
|
|
574,300
|
|
Total other real estate owned recorded at fair value of collateral
|
|
|
1,440,900
|
|
|
|
1,440,900
|
|
|
|
|
|
|
|
|
|
|
Total assets measured on a non-recurring basis
|
|
$
|
3,504,969
|
|
|
$
|
3,504,969
|
|
The Company utilizes appraisals from independent 3
rd
party licensed appraisers to determine the fair value of collateral underlying impaired loans that are deemed collateral dependent and other real estate owned. The vast majority of appraisals utilize the market approach valuation technique due to the nature of the underlying properties. Due to the significance of adjustments made to observable market prices of similar properties and lack of similarities between comparable properties, the Company considers the appraisals used in determination of fair value for collateral dependent impaired loans and other real estate owned to be Level 3 inputs. Management does not make adjustments to the independent appraised values except for the adjustment related to estimated selling costs. The valuation process includes a review of the appraisal by the Bank’s loan department, which is experienced in appraisal review procedures set forth by bank regulatory guidance.
Calvin B. Taylor Bankshares, Inc. and Subsidiary
Notes to Consolidated Financial Statements (unaudited) (continued)
5.
|
Fair Value Measurements (continued)
|
The estimated fair values of the Company's financial assets and liabilities, including those asset and liabilities that are not measured and reported at fair value on a recurring or non-recurring basis are detailed in the following table. The valuation methods used in estimating the fair value of financial assets and financial liabilities not measured and reported at fair value in the balance sheet is disclosed in the Company’s Annual Report on Form 10-K. The fair value of cash and due from banks, federal funds sold, accrued interest receivable, bank owned life insurance, noninterest-bearing deposits, securities sold under agreements to repurchase, and accrued interest payable approximates their carrying value and are excluded from the table below.
|
|
September 30, 2013
|
|
|
December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Level 1 inputs
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment securities
|
|
|
117,619,557
|
|
|
|
117,723,780
|
|
|
|
133,554,304
|
|
|
|
133,681,592
|
|
Level 2 inputs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing deposits
|
|
|
16,452,674
|
|
|
|
16,469,060
|
|
|
|
13,587,889
|
|
|
|
13,603,933
|
|
Investment securities
|
|
|
12,007,430
|
|
|
|
12,019,988
|
|
|
|
6,520,905
|
|
|
|
6,532,610
|
|
Loans, net
|
|
|
219,615,679
|
|
|
|
219,559,565
|
|
|
|
225,282,489
|
|
|
|
225,273,328
|
|
Level 3 inputs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans, net
|
|
|
3,273,700
|
|
|
|
3,273,700
|
|
|
|
2,064,069
|
|
|
|
2,064,069
|
|
Financial liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Level 2 inputs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing deposits
|
|
|
265,370,818
|
|
|
|
265,414,148
|
|
|
|
263,857,994
|
|
|
|
263,972,110
|
|
6.
|
New accounting standards
|
The following accounting pronouncements have been approved by the Financial Accounting Standards Board and became effective to the Company in this reporting period or have not yet become effective. These pronouncements would apply to the Company if the Company or the Bank entered into an applicable activity.
ASU 2013-02,
“Comprehensive Income (Topic 220) – Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income.”
ASU 2013-02 amends recent guidance related to the reporting of comprehensive income to enhance the reporting of reclassifications out of accumulated other comprehensive income. ASU 2013-02 became effective for the Company on January 1, 2013 and did not have a significant impact on the Company’s financial statements.
The accounting policies adopted by management are consistent with accounting principles generally accepted in the United States of America and are consistent with those followed by peer Banks.
- 34 -
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