NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 1 BASIS OF PRESENTATION AND CONSOLIDATION
The unaudited consolidated financial statements included herein include the accounts of LaPorte Bancorp, Inc., a Maryland corporation
(New LaPorte), successor to LaPorte Bancorp, Inc., a Federal corporation (LaPorte-Federal), its wholly owned subsidiary, The LaPorte Savings Bank (the Bank), the Banks wholly owned subsidiary, LSB
Investments, Inc., (LSB Inc.) and LSB Inc.s wholly owned subsidiary, LSB Real Estate, Inc., (LSB REIT), together referred to as the Company. LaPorte-Federal was formed in October 2007. New LaPorte was formed
in June 2012. LSB Inc. was formed on October 1, 2011 to manage a portion of the Banks investment portfolio. LSB REIT was formed on January 1, 2013. LaPorte-Federal was a majority owned (54.1%) subsidiary of LaPorte Savings Bank,
MHC through September 30, 2012. These financial statements do not include the transactions and balances of LaPorte Savings Bank, MHC. Intercompany transactions and balances are eliminated in consolidation.
On October 4, 2012, the Company completed its conversion and reorganization to the stock holding company form of organization. New LaPorte, the new
stock holding company for the Bank, sold 3,384,611 shares of common stock at $8.00 per share, for gross offering proceeds of $27.1 million, in its stock offering. Concurrent with the completion of the offering, shares of common stock of
LaPorte-Federal owned by the public were exchanged for 1.3190 shares of New LaPortes common stock so that LaPorte-Federals existing shareholders own approximately the same percentage of New LaPortes common stock as they owned of
LaPorte-Federals common stock immediately prior to the conversion, as adjusted for the assets of LaPorte Savings Bank, MHC and their receipt of cash in lieu of fractional exchange shares. As a result of the offering and the exchange of shares,
New LaPorte has approximately 6,205,250 shares outstanding. All share and per share information in this report for periods prior to conversion has been revised to reflect the 1.3190:1 conversion ratio on shares outstanding, including shares of
LaPorte-Federal held by the former mutual holding company that were not publicly traded.
The unaudited consolidated financial statements
included herein have been prepared by management in accordance with U.S. generally accepted accounting principles for interim financial statements and Article 8 of Regulation S-X of the Securities and Exchange Commission. In the opinion of
management, the unaudited consolidated financial statements contain all material adjustments (consisting of normal recurring accruals) and disclosures which are necessary in the opinion of management to make the financial statements not misleading
and for a fair presentation of the financial position and results of operations for the interim periods presented herein.
Certain information
and footnote disclosures normally included in consolidated financial statements prepared in accordance with United States generally accepted accounting principles have been condensed or omitted pursuant to the rules and regulations of the Securities
and Exchange Commission. Accordingly, the interim consolidated financial statements included herein should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2012 included in the Form 10-K
Annual Report of the Company for the fiscal year ended December 31, 2012.
The results for the three and six month period ended
June 30, 2013 may not indicate the results to be expected for the full year ending December 31, 2013.
Reclassifications
:
Some items in the prior year financial statements were reclassified to conform to the current presentation.
8
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 2 RECENT ACCOUNTING PRONOUNCEMENTS
In January 2013, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2013-01
Balance
Sheet (Topic 210) Clarifying the Scope of Disclosures About Offsetting Assets and Liabilities
. This ASU clarifies that ordinary trade receivables and receivables are not in the scope of ASU 2011-11. ASU 2011-11 applies only to
derivatives, repurchase agreements, and securities borrowing and securities lending transactions that are either offset in accordance with specific criteria in the Accounting Standards Codification or subject to a master netting arrangement or
similar agreement. ASU 2013-01 is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. Retrospective disclosure is required for all comparative periods presented. The Company
has adopted this standard. The effect of applying this standard is reflected in Note 10.
In February 2013, the FASB issued ASU No. 2013-02
Comprehensive Income (Topic 220) Reporting Amounts Reclassified Out of Accumulated Other Comprehensive Income
. This ASU states that accumulated other comprehensive income is to be presented either on the face of the
statement where net income of significant amounts reclassified out of accumulated other comprehensive income but only if the item is required to be reclassified to net income in its entirety in the same reporting period. The Company has
adopted this standard. The effect of applying this standard is reflected in Note 9.
9
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 3 EARNINGS PER SHARE
Basic earnings per common share is determined by dividing net earnings available to common shareholders by the weighted average number
of common shares outstanding for the period. Employee Stock Ownership Plan (ESOP) shares are considered outstanding for this calculation unless unearned. Diluted earnings per common share is determined by dividing net earnings available
to common shareholders by the weighted average number of common shares outstanding for the period, adjusted for the dilutive effect of common share equivalents (66,633 and 0, for the three months ended June 30, 2013 and 2012, respectively and
59,419 and 0, for the six months ended June 30, 2013 and 2012). Stock options of 215,196 and 281,829 shares for the three months ended June 30, 2013 and 2012, respectively, were not considered in computing diluted earnings per share
because they were antidilutive. Stock options of 222,410 and 281,829 shares for the six months ended June 30, 2013 and 2012, respectively, were not considered in computing diluted earnings per share because they were antidilutive. The factors
used in the earnings per common share computation follow:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
Six Months Ended
June 30,
|
|
|
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
Basic
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
1,149
|
|
|
$
|
1,042
|
|
|
$
|
2,237
|
|
|
$
|
1,969
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding
|
|
|
6,205,250
|
|
|
|
6,147,689
|
|
|
|
6,205,250
|
|
|
|
6,147,689
|
|
Less: Average unallocated ESOP shares
|
|
|
(418,800
|
)
|
|
|
(174,484
|
)
|
|
|
(421,610
|
)
|
|
|
(175,967
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average shares
|
|
|
5,786,450
|
|
|
|
5,973,205
|
|
|
|
5,783,640
|
|
|
|
5,971,722
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per common share
|
|
$
|
0.20
|
|
|
$
|
0.17
|
|
|
$
|
0.39
|
|
|
$
|
0.33
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
1,149
|
|
|
$
|
1,042
|
|
|
$
|
2,237
|
|
|
$
|
1,969
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding for basic earnings per common share
|
|
|
5,786,450
|
|
|
|
5,973,205
|
|
|
|
5,783,640
|
|
|
|
5,971,722
|
|
Add: Diluted effects of assumed exercises of stock options
|
|
|
66,633
|
|
|
|
|
|
|
|
59,419
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average shares and dilutive potential common shares
|
|
|
5,853,083
|
|
|
|
5,973,205
|
|
|
|
5,843,059
|
|
|
|
5,971,722
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per common share
|
|
$
|
0.20
|
|
|
$
|
0.17
|
|
|
$
|
0.38
|
|
|
$
|
0.33
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 4 SECURITIES AVAILABLE FOR SALE
The amortized cost and fair value of available-for-sale securities and the related gross unrealized gains and losses recognized in
accumulated other comprehensive income (loss) were as follows:
June 30, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortized
Cost
|
|
|
Unrealized
Gains
|
|
|
Unrealized
Losses
|
|
|
Fair Value
|
|
U.S. federal agency obligations
|
|
$
|
8,937
|
|
|
$
|
239
|
|
|
$
|
(114
|
)
|
|
$
|
9,062
|
|
State and municipal
|
|
|
48,681
|
|
|
|
1,895
|
|
|
|
(574
|
)
|
|
|
50,002
|
|
Mortgage-backed securities residential
|
|
|
21,282
|
|
|
|
167
|
|
|
|
(241
|
)
|
|
|
21,208
|
|
Government agency sponsored collateralized mortgage obligations
|
|
|
69,135
|
|
|
|
480
|
|
|
|
(1,494
|
)
|
|
|
68,121
|
|
Corporate debt securities
|
|
|
4,424
|
|
|
|
9
|
|
|
|
(87
|
)
|
|
|
4,346
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
152,459
|
|
|
$
|
2,790
|
|
|
$
|
(2,510
|
)
|
|
$
|
152,739
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortized
Cost
|
|
|
Unrealized
Gains
|
|
|
Unrealized
Losses
|
|
|
Fair Value
|
|
U.S. federal agency obligations
|
|
$
|
8,045
|
|
|
$
|
360
|
|
|
$
|
|
|
|
$
|
8,405
|
|
State and municipal
|
|
|
42,161
|
|
|
|
3,479
|
|
|
|
(26
|
)
|
|
|
45,614
|
|
Mortgage-backed securities residential
|
|
|
11,819
|
|
|
|
572
|
|
|
|
(6
|
)
|
|
|
12,385
|
|
Government agency sponsored collateralized mortgage obligations
|
|
|
54,070
|
|
|
|
1,198
|
|
|
|
(112
|
)
|
|
|
55,156
|
|
Corporate debt securities
|
|
|
3,959
|
|
|
|
110
|
|
|
|
(9
|
)
|
|
|
4,060
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
120,054
|
|
|
$
|
5,719
|
|
|
$
|
(153
|
)
|
|
$
|
125,620
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At June 30, 2013 and December 31, 2012, all of our mortgage-backed securities were issued by U.S.
government-sponsored enterprises and all of our collateralized mortgage obligations were issued by either U.S. government-sponsored enterprises or the U.S. Small Business Administration.
11
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 4 SECURITIES AVAILABLE FOR SALE continued
Securities with unrealized losses at June 30, 2013 and December 31, 2012, aggregated by
investment category and length of time that individual securities have been in a continuous unrealized loss position, were as follows:
June 30, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing Unrealized
Loss For
|
|
|
Continuing Unrealized
Loss For
|
|
|
|
|
|
|
|
|
|
Less Than 12 Months
|
|
|
12 Months or More
|
|
|
Total
|
|
Description of Securities
|
|
Fair
Value
|
|
|
Unrealized
Loss
|
|
|
Fair
Value
|
|
|
Unrealized
Loss
|
|
|
Fair
Value
|
|
|
Unrealized
Loss
|
|
U.S. federal agency obligations
|
|
$
|
2,886
|
|
|
$
|
(114
|
)
|
|
$
|
|
|
|
$
|
|
|
|
$
|
2,886
|
|
|
$
|
(114
|
)
|
State and municipal
|
|
|
13,012
|
|
|
|
(574
|
)
|
|
|
|
|
|
|
|
|
|
|
13,012
|
|
|
|
(574
|
)
|
Mortgage-backed
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities residential
|
|
|
16,360
|
|
|
|
(241
|
)
|
|
|
|
|
|
|
|
|
|
|
16,360
|
|
|
|
(241
|
)
|
Government agency sponsored collateralized mortgage obligations
|
|
|
45,975
|
|
|
|
(1,494
|
)
|
|
|
|
|
|
|
|
|
|
|
45,975
|
|
|
|
(1,494
|
)
|
Corporate debt securities
|
|
|
3,217
|
|
|
|
(87
|
)
|
|
|
|
|
|
|
|
|
|
|
3,217
|
|
|
|
(87
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total temporarily impaired
|
|
$
|
81,450
|
|
|
$
|
(2,510
|
)
|
|
$
|
|
|
|
$
|
|
|
|
$
|
81,450
|
|
|
$
|
(2,510
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing Unrealized
Loss For
|
|
|
Continuing Unrealized
Loss For
|
|
|
|
|
|
|
|
|
|
Less Than 12 Months
|
|
|
12 Months or More
|
|
|
Total
|
|
Description of Securities
|
|
Fair
Value
|
|
|
Unrealized
Loss
|
|
|
Fair
Value
|
|
|
Unrealized
Loss
|
|
|
Fair
Value
|
|
|
Unrealized
Loss
|
|
State and municipal
|
|
$
|
1,611
|
|
|
$
|
(26
|
)
|
|
$
|
|
|
|
$
|
|
|
|
$
|
1,611
|
|
|
$
|
(26
|
)
|
Mortgage-backed securities residential
|
|
|
1,012
|
|
|
|
(6
|
)
|
|
|
|
|
|
|
|
|
|
|
1,012
|
|
|
|
(6
|
)
|
Government agency sponsored collateralized mortgage obligations
|
|
|
12,392
|
|
|
|
(112
|
)
|
|
|
|
|
|
|
|
|
|
|
12,392
|
|
|
|
(112
|
)
|
Corporate debt securities
|
|
|
1,489
|
|
|
|
(9
|
)
|
|
|
|
|
|
|
|
|
|
|
1,489
|
|
|
|
(9
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total temporarily impaired
|
|
$
|
16,504
|
|
|
$
|
(153
|
)
|
|
$
|
|
|
|
$
|
|
|
|
$
|
16,504
|
|
|
$
|
(153
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At June 30, 2013, the Company held 99 investments in debt securities which were in an unrealized loss position of
which all were in an unrealized loss position for less than twelve months. At December 31, 2012, the Company held 18 investments in debt securities which were in an unrealized loss position of which all were in an unrealized loss position for
less than twelve months. Management periodically evaluates each investment security for potential other-than-temporary impairment, relying primarily on industry analyst reports and observation of market conditions and interest rate fluctuations.
Management believes it will be able to collect all amounts due according to the contractual terms of the underlying investment securities and that the noted declines in fair value are considered temporary and due only to normal market interest rate
fluctuations. The Company does not intend to sell the securities and is not more likely than not to be required to sell these debt securities before their anticipated recovery.
12
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 4 SECURITIES AVAILABLE FOR SALE - continued
Sales of securities available for sale for the three and six months ended June 30, 2013 and 2012
were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
Six Months Ended
June 30,
|
|
|
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
Proceeds
|
|
$
|
11,509
|
|
|
$
|
4,985
|
|
|
$
|
16,769
|
|
|
$
|
17,653
|
|
Gross gains
|
|
|
237
|
|
|
|
103
|
|
|
|
490
|
|
|
|
224
|
|
Gross losses
|
|
|
|
|
|
|
(15
|
)
|
|
|
|
|
|
|
(31
|
)
|
Proceeds from calls of securities available for sale during the three months ended June 30, 2013 and 2012 were $0
and $1,125, with gross gains of $0 and $0 and gross losses of $0 and $0, respectively.
Proceeds from calls of securities available for sale
during the six months ended June 30, 2013 and 2012 were $0 and $4,400, with gross gains of $0 and $4 and gross losses of $0 and $0, respectively.
The amortized cost and fair value of debt securities at June 30, 2013 by contractual maturity were as follows. Securities not due at a single maturity date, primarily mortgage-backed securities and
collateralized mortgage obligations (CMO), are shown separately.
|
|
|
|
|
|
|
|
|
|
|
Amortized
Cost
|
|
|
Fair
Value
|
|
Due in one year or less
|
|
$
|
1,009
|
|
|
$
|
1,030
|
|
Due from more than one to five years
|
|
|
21,248
|
|
|
|
21,547
|
|
Due from more than five to ten years
|
|
|
25,118
|
|
|
|
25,416
|
|
Due after ten years
|
|
|
14,667
|
|
|
|
15,417
|
|
|
|
|
|
|
|
|
|
|
Subtotal
|
|
|
62,042
|
|
|
|
63,410
|
|
Mortgage-backed securities and CMOs
|
|
|
90,417
|
|
|
|
89,329
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
152,459
|
|
|
$
|
152,739
|
|
|
|
|
|
|
|
|
|
|
Securities pledged at June 30, 2013 and December 31, 2012 had a carrying amount of approximately $43,931 and
$42,151, respectively, and were pledged to secure public deposits, FHLB advances, short-term borrowings through the Federal Reserve Discount Window, treasury tax and loan payments and cash flow hedges.
13
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 5 LOANS
Loans at June 30, 2013 and December 31, 2012 were as follows:
|
|
|
|
|
|
|
|
|
|
|
June 30,
2013
|
|
|
December 31,
2012
|
|
Commercial
|
|
$
|
115,301
|
|
|
$
|
124,563
|
|
Mortgage
|
|
|
33,291
|
|
|
|
36,996
|
|
Mortgage warehouse
|
|
|
107,145
|
|
|
|
137,467
|
|
Residential construction
|
|
|
2,094
|
|
|
|
1,475
|
|
Indirect auto
|
|
|
784
|
|
|
|
1,154
|
|
Home equity
|
|
|
11,495
|
|
|
|
12,267
|
|
Consumer and other
|
|
|
3,790
|
|
|
|
3,864
|
|
|
|
|
|
|
|
|
|
|
Subtotal
|
|
|
273,900
|
|
|
|
317,786
|
|
Less: Net deferred loan (fees) costs
|
|
|
253
|
|
|
|
214
|
|
Allowance for loan losses
|
|
|
(4,237
|
)
|
|
|
(4,308
|
)
|
|
|
|
|
|
|
|
|
|
Loans, net
|
|
$
|
269,916
|
|
|
$
|
313,692
|
|
|
|
|
|
|
|
|
|
|
As of June 30, 2013, the Banks mortgage warehouse division had repurchase agreements with 14 mortgage
companies. For the six months ended June 30, 2013, the mortgage companies originated $1,208,222 in mortgage loans and sold $1,238,013 in mortgage loans. The Bank recorded interest income of $1,124 and mortgage warehouse loan fees of $177 which
are included in loan interest income and wire transfer fees of $66 which are included in noninterest income during the three months ended June 30, 2013 attributable to the mortgage warehouse lines. For the six months ended June 30, 2013,
the Bank recorded interest income of $2,287 and mortgage warehouse loan fees of $370 which are included in loan interest income and wire transfer fees of $133 which are included in noninterest income attributable to mortgage warehouse lines.
As of June 30, 2012, the Banks mortgage warehouse division had repurchase agreements with 11 mortgage companies. For the six
months ended June 30, 2012, the mortgage companies originated $1,261,508 in mortgage loans and sold $1,246,745 in mortgage loans. The Bank recorded interest income of $1,159 and mortgage warehouse loan fees of $215 which are included in loan
interest income and wire transfer fees of $70 which are included in noninterest income during the three months ended June 30, 2012 attributable to the mortgage warehouse lines. For the six months ended June 30, 2012, the Bank recorded
interest income of $2,363 and mortgage warehouse loan fees of $382 which are included in loan interest income and wire transfer fees of $124 which are included in noninterest income attributable to the mortgage warehouse lines.
14
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 5 LOANS continued
The following table presents the activity in the allowance for loan losses by portfolio segment for the
three months ended June 30, 2013 and 2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
|
Mortgage
|
|
|
Mortgage
Warehouse
|
|
|
Residential
Construction
|
|
|
Indirect
Auto
|
|
|
Home
Equity
|
|
|
Consumer
and Other
|
|
|
Unallocated
|
|
|
Total
|
|
For the three months ended June 30, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance
|
|
$
|
3,122
|
|
|
$
|
359
|
|
|
$
|
530
|
|
|
$
|
2
|
|
|
$
|
6
|
|
|
$
|
122
|
|
|
$
|
79
|
|
|
$
|
|
|
|
$
|
4,220
|
|
Charge-offs
|
|
|
(37
|
)
|
|
|
(49
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3
|
)
|
|
|
|
|
|
|
(89
|
)
|
Recoveries
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3
|
|
|
|
|
|
|
|
3
|
|
Provision
|
|
|
76
|
|
|
|
90
|
|
|
|
(60
|
)
|
|
|
|
|
|
|
(1
|
)
|
|
|
(3
|
)
|
|
|
1
|
|
|
|
|
|
|
|
103
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance
|
|
$
|
3,161
|
|
|
$
|
400
|
|
|
$
|
470
|
|
|
$
|
2
|
|
|
$
|
5
|
|
|
$
|
119
|
|
|
$
|
80
|
|
|
$
|
|
|
|
$
|
4,237
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended June 30, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance
|
|
$
|
3,000
|
|
|
$
|
335
|
|
|
$
|
406
|
|
|
$
|
4
|
|
|
$
|
17
|
|
|
$
|
120
|
|
|
$
|
82
|
|
|
$
|
|
|
|
$
|
3,964
|
|
Charge-offs
|
|
|
(9
|
)
|
|
|
(11
|
)
|
|
|
|
|
|
|
|
|
|
|
(3
|
)
|
|
|
(15
|
)
|
|
|
(4
|
)
|
|
|
|
|
|
|
(42
|
)
|
Recoveries
|
|
|
38
|
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3
|
|
|
|
|
|
|
|
43
|
|
Provisions
|
|
|
108
|
|
|
|
92
|
|
|
|
122
|
|
|
|
4
|
|
|
|
|
|
|
|
36
|
|
|
|
(59
|
)
|
|
|
|
|
|
|
303
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance
|
|
$
|
3,137
|
|
|
$
|
418
|
|
|
$
|
528
|
|
|
$
|
8
|
|
|
$
|
14
|
|
|
$
|
141
|
|
|
$
|
22
|
|
|
$
|
|
|
|
$
|
4,268
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 5 LOANS continued
The following table presents the activity in the allowance for loan losses by portfolio segment for the
six months ended June 30, 2013 and 2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
|
Mortgage
|
|
|
Mortgage
Warehouse
|
|
|
Residential
Construction
|
|
|
Indirect
Auto
|
|
|
Home
Equity
|
|
|
Consumer
and Other
|
|
|
Unallocated
|
|
|
Total
|
|
For the six months ended June 30, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance
|
|
$
|
3,131
|
|
|
$
|
401
|
|
|
$
|
601
|
|
|
$
|
2
|
|
|
$
|
7
|
|
|
$
|
130
|
|
|
$
|
36
|
|
|
$
|
|
|
|
$
|
4,308
|
|
Charge-offs
|
|
|
(103
|
)
|
|
|
(68
|
)
|
|
|
|
|
|
|
|
|
|
|
(4
|
)
|
|
|
(22
|
)
|
|
|
(6
|
)
|
|
|
|
|
|
|
(203
|
)
|
Recoveries
|
|
|
|
|
|
|
19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7
|
|
|
|
|
|
|
|
26
|
|
Provision
|
|
|
133
|
|
|
|
48
|
|
|
|
(131
|
)
|
|
|
|
|
|
|
2
|
|
|
|
11
|
|
|
|
43
|
|
|
|
|
|
|
|
106
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance
|
|
$
|
3,161
|
|
|
$
|
400
|
|
|
$
|
470
|
|
|
$
|
2
|
|
|
$
|
5
|
|
|
$
|
119
|
|
|
$
|
80
|
|
|
$
|
|
|
|
$
|
4,237
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the six months ended June 30, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance
|
|
$
|
2,774
|
|
|
$
|
374
|
|
|
$
|
393
|
|
|
$
|
3
|
|
|
$
|
19
|
|
|
$
|
119
|
|
|
$
|
92
|
|
|
$
|
|
|
|
$
|
3,772
|
|
Charge-offs
|
|
|
(28
|
)
|
|
|
(32
|
)
|
|
|
|
|
|
|
|
|
|
|
(3
|
)
|
|
|
(15
|
)
|
|
|
(10
|
)
|
|
|
|
|
|
|
(88
|
)
|
Recoveries
|
|
|
38
|
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
3
|
|
|
|
|
|
|
|
10
|
|
|
|
|
|
|
|
53
|
|
Provisions
|
|
|
353
|
|
|
|
74
|
|
|
|
135
|
|
|
|
5
|
|
|
|
(5
|
)
|
|
|
37
|
|
|
|
(68
|
)
|
|
|
|
|
|
|
531
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance
|
|
$
|
3,137
|
|
|
$
|
418
|
|
|
$
|
528
|
|
|
$
|
8
|
|
|
$
|
14
|
|
|
$
|
141
|
|
|
$
|
22
|
|
|
$
|
|
|
|
$
|
4,268
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 5 LOANS continued
The following table presents the balance in the allowance for loan losses and the recorded investment in
loans by portfolio segment and based on impairment method as of June 30, 2013:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
|
Mortgage
|
|
|
Mortgage
Warehouse
|
|
|
Residential
Construction
|
|
|
Indirect
Auto
|
|
|
Home
Equity
|
|
|
Consumer
and Other
|
|
|
Unallocated
|
|
|
Total
|
|
June 30, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending allowance balance attributable to loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Individually evaluated for impairment
|
|
$
|
1,552
|
|
|
$
|
115
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
3
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
1,670
|
|
Collectively evaluated for impairment
|
|
|
1,609
|
|
|
|
285
|
|
|
|
470
|
|
|
|
2
|
|
|
|
5
|
|
|
|
116
|
|
|
|
80
|
|
|
|
|
|
|
|
2,567
|
|
Acquired with deteriorated credit quality
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total ending allowance
|
|
$
|
3,161
|
|
|
$
|
400
|
|
|
$
|
470
|
|
|
$
|
2
|
|
|
$
|
5
|
|
|
$
|
119
|
|
|
$
|
80
|
|
|
$
|
|
|
|
$
|
4,237
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans individually evaluated for impairment
|
|
$
|
4,343
|
|
|
$
|
1,890
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
38
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
6,271
|
|
Loans collectively evaluated for impairment
|
|
|
110,467
|
|
|
|
31,271
|
|
|
|
107,145
|
|
|
|
2,083
|
|
|
|
784
|
|
|
|
11,512
|
|
|
|
3,795
|
|
|
|
|
|
|
|
267,057
|
|
Loans acquired with deteriorated credit quality
|
|
|
693
|
|
|
|
132
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
825
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total ending loan balance
|
|
$
|
115,503
|
|
|
$
|
33,293
|
|
|
$
|
107,145
|
|
|
$
|
2,083
|
|
|
$
|
784
|
|
|
$
|
11,550
|
|
|
$
|
3,795
|
|
|
$
|
|
|
|
$
|
274,153
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The recorded investment in loans does not include accrued interest.
17
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 5 LOANS continued
The following table presents the balance in the allowance for loan losses and the recorded investment in
loans by portfolio segment and based on impairment method as of December 31, 2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
|
Mortgage
|
|
|
Mortgage
Warehouse
|
|
|
Residential
Construction
|
|
|
Indirect
Auto
|
|
|
Home
Equity
|
|
|
Consumer
and Other
|
|
|
Unallocated
|
|
|
Total
|
|
December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending allowance balance attributable to loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Individually evaluated for impairment
|
|
$
|
1,137
|
|
|
$
|
132
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
22
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
1,291
|
|
Collectively evaluated for impairment
|
|
|
1,994
|
|
|
|
269
|
|
|
|
601
|
|
|
|
2
|
|
|
|
7
|
|
|
|
108
|
|
|
|
36
|
|
|
|
|
|
|
|
3,017
|
|
Acquired with deteriorated credit quality
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total ending allowance
|
|
$
|
3,131
|
|
|
$
|
401
|
|
|
$
|
601
|
|
|
$
|
2
|
|
|
$
|
7
|
|
|
$
|
130
|
|
|
$
|
36
|
|
|
$
|
|
|
|
$
|
4,308
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans individually evaluated for impairment
|
|
$
|
6,337
|
|
|
$
|
2,125
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
53
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
8,515
|
|
Loans collectively evaluated for impairment
|
|
|
117,682
|
|
|
|
34,731
|
|
|
|
137,467
|
|
|
|
1,466
|
|
|
|
1,154
|
|
|
|
12,267
|
|
|
|
3,867
|
|
|
|
|
|
|
|
308,634
|
|
Loans acquired with deteriorated credit quality
|
|
|
712
|
|
|
|
139
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
851
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total ending loan balance
|
|
$
|
124,731
|
|
|
$
|
36,995
|
|
|
$
|
137,467
|
|
|
$
|
1,466
|
|
|
$
|
1,154
|
|
|
$
|
12,320
|
|
|
$
|
3,867
|
|
|
$
|
|
|
|
$
|
318,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The recorded investment in loans does not include accrued interest.
18
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 5 LOANS continued
The following table presents information related to impaired loans by class of loans as of June 30,
2013 and December 31, 2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unpaid
Principal
Balance
|
|
|
Recorded
Investment
|
|
|
Allowance for
Loan Losses
Allocated
|
|
June 30, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
With no related allowance recorded:
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate
|
|
$
|
113
|
|
|
$
|
113
|
|
|
$
|
|
|
Land
|
|
|
135
|
|
|
|
135
|
|
|
|
|
|
Mortgage
|
|
|
1,025
|
|
|
|
1,025
|
|
|
|
|
|
Home equity
|
|
|
12
|
|
|
|
12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal
|
|
|
1,285
|
|
|
|
1,285
|
|
|
|
|
|
With an allowance recorded:
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate
|
|
|
1,386
|
|
|
|
1,388
|
|
|
|
449
|
|
Land
|
|
|
2,707
|
|
|
|
2,707
|
|
|
|
1,103
|
|
Mortgage
|
|
|
865
|
|
|
|
865
|
|
|
|
115
|
|
Home equity
|
|
|
26
|
|
|
|
26
|
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal
|
|
|
4,984
|
|
|
|
4,986
|
|
|
|
1,670
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
6,269
|
|
|
$
|
6,271
|
|
|
$
|
1,670
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unpaid
Principal
Balance
|
|
|
Recorded
Investment
|
|
|
Allowance for
Loan Losses
Allocated
|
|
December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
With no related allowance recorded:
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate
|
|
$
|
2,150
|
|
|
$
|
2,152
|
|
|
$
|
|
|
Land
|
|
|
214
|
|
|
|
214
|
|
|
|
|
|
Mortgage
|
|
|
1,296
|
|
|
|
1,296
|
|
|
|
|
|
Home equity
|
|
|
31
|
|
|
|
31
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal
|
|
|
3,691
|
|
|
|
3,693
|
|
|
|
|
|
With an allowance recorded:
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate
|
|
|
1,461
|
|
|
|
1,199
|
|
|
|
365
|
|
Land
|
|
|
2,772
|
|
|
|
2,772
|
|
|
|
772
|
|
Mortgage
|
|
|
829
|
|
|
|
829
|
|
|
|
132
|
|
Home equity
|
|
|
22
|
|
|
|
22
|
|
|
|
22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal
|
|
|
5,084
|
|
|
|
4,822
|
|
|
|
1,291
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
8,775
|
|
|
$
|
8,515
|
|
|
$
|
1,291
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The recorded investment in loans does not include accrued interest.
19
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 5 LOANS continued
The following table presents loans individually evaluated for impairment by class of loans as of
June 30, 2013 and 2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
June 30, 2013
|
|
|
June 30, 2013
|
|
|
|
Average
Recorded
Investment
|
|
|
Interest
Income
Recognized
|
|
|
Average
Recorded
Investment
|
|
|
Interest
Income
Recognized
|
|
With no related allowance recorded:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate
|
|
$
|
680
|
|
|
$
|
2
|
|
|
$
|
1,300
|
|
|
$
|
4
|
|
Land
|
|
|
204
|
|
|
|
|
|
|
|
209
|
|
|
|
|
|
Mortgage
|
|
|
1,188
|
|
|
|
|
|
|
|
1,223
|
|
|
|
|
|
Home equity
|
|
|
12
|
|
|
|
|
|
|
|
25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal
|
|
|
2,084
|
|
|
|
2
|
|
|
|
2,757
|
|
|
|
4
|
|
With an allowance recorded:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate
|
|
|
1,391
|
|
|
|
|
|
|
|
1,108
|
|
|
|
|
|
Land
|
|
|
2,725
|
|
|
|
|
|
|
|
2,740
|
|
|
|
|
|
Mortgage
|
|
|
869
|
|
|
|
|
|
|
|
809
|
|
|
|
|
|
Home equity
|
|
|
27
|
|
|
|
|
|
|
|
13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal
|
|
|
5,012
|
|
|
|
|
|
|
|
4,670
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
7,096
|
|
|
$
|
2
|
|
|
$
|
7,427
|
|
|
$
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
June 30, 2012
|
|
|
June 30, 2012
|
|
|
|
Average
Recorded
Investment
|
|
|
Interest
Income
Recognized
|
|
|
Average
Recorded
Investment
|
|
|
Interest
Income
Recognized
|
|
With no related allowance recorded:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and other
|
|
$
|
|
|
|
$
|
|
|
|
$
|
11
|
|
|
$
|
|
|
Real estate
|
|
|
1,045
|
|
|
|
2
|
|
|
|
1,243
|
|
|
|
4
|
|
Land
|
|
|
1,459
|
|
|
|
|
|
|
|
1,994
|
|
|
|
3
|
|
Mortgage
|
|
|
933
|
|
|
|
5
|
|
|
|
1,006
|
|
|
|
8
|
|
Home equity
|
|
|
25
|
|
|
|
|
|
|
|
12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal
|
|
|
3,462
|
|
|
|
7
|
|
|
|
4,257
|
|
|
|
15
|
|
With an allowance recorded:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate
|
|
|
1,734
|
|
|
|
|
|
|
|
1,118
|
|
|
|
|
|
Land
|
|
|
1,610
|
|
|
|
|
|
|
|
1,080
|
|
|
|
|
|
Mortgage
|
|
|
797
|
|
|
|
|
|
|
|
715
|
|
|
|
|
|
Home equity
|
|
|
14
|
|
|
|
|
|
|
|
14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal
|
|
|
4,155
|
|
|
|
|
|
|
|
2,927
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
7,617
|
|
|
$
|
7
|
|
|
$
|
7,184
|
|
|
$
|
15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 5 LOANS continued
The following table presents the recorded investment in nonaccrual loans and loans past due over 90 days
still on accrual by class of loans as of June 30, 2013 and December 31, 2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual
|
|
|
Loans Past Due
Over 90 Days
Still
Accruing
|
|
|
|
June 30,
2013
|
|
|
December 31,
2012
|
|
|
June 30,
2013
|
|
|
December 31,
2012
|
|
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and other
|
|
$
|
28
|
|
|
$
|
29
|
|
|
$
|
|
|
|
$
|
|
|
Real estate
|
|
|
1,443
|
|
|
|
3,292
|
|
|
|
|
|
|
|
|
|
Land
|
|
|
2,842
|
|
|
|
2,985
|
|
|
|
|
|
|
|
|
|
Mortgage
|
|
|
1,890
|
|
|
|
1,958
|
|
|
|
|
|
|
|
|
|
Indirect auto
|
|
|
4
|
|
|
|
5
|
|
|
|
|
|
|
|
|
|
Home equity
|
|
|
38
|
|
|
|
53
|
|
|
|
|
|
|
|
|
|
Consumer and other
|
|
|
35
|
|
|
|
39
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
6,280
|
|
|
$
|
8,361
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The recorded investment in loans does not include accrued interest.
The following tables present the aging of the recorded investment in past due loans as of June 30, 2013 by class of loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30-59
Days
Past Due
|
|
|
60-89
Days
Past Due
|
|
|
Greater than
90 Days
Past Due
|
|
|
Total
Past Due
|
|
|
Loans Not
Past Due
|
|
|
Total
|
|
June 30, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and other
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
19,264
|
|
|
$
|
19,264
|
|
Real estate
|
|
|
113
|
|
|
|
705
|
|
|
|
821
|
|
|
|
1,639
|
|
|
|
72,996
|
|
|
|
74,635
|
|
Five or more family
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,026
|
|
|
|
11,026
|
|
Construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,490
|
|
|
|
1,490
|
|
Land
|
|
|
|
|
|
|
|
|
|
|
2,367
|
|
|
|
2,367
|
|
|
|
6,721
|
|
|
|
9,088
|
|
Mortgage
|
|
|
|
|
|
|
156
|
|
|
|
1,260
|
|
|
|
1,416
|
|
|
|
31,877
|
|
|
|
33,293
|
|
Mortgage warehouse
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
107,145
|
|
|
|
107,145
|
|
Residential construction:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,721
|
|
|
|
1,721
|
|
Land
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
362
|
|
|
|
362
|
|
Indirect
|
|
|
19
|
|
|
|
|
|
|
|
4
|
|
|
|
23
|
|
|
|
761
|
|
|
|
784
|
|
Home equity
|
|
|
12
|
|
|
|
|
|
|
|
12
|
|
|
|
24
|
|
|
|
11,526
|
|
|
|
11,550
|
|
Consumer and other
|
|
|
16
|
|
|
|
|
|
|
|
|
|
|
|
16
|
|
|
|
3,779
|
|
|
|
3,795
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
160
|
|
|
$
|
861
|
|
|
$
|
4,464
|
|
|
$
|
5,485
|
|
|
$
|
268,668
|
|
|
$
|
274,153
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The recorded investment in loans does not include accrued interest.
21
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 5 LOANS continued
The following tables present the aging of the recorded investment in past due loans as of
December 31, 2012 by class of loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30-59
Days
Past Due
|
|
|
60-89
Days
Past Due
|
|
|
Greater than
90 Days
Past Due
|
|
|
Total
Past Due
|
|
|
Loans Not
Past Due
|
|
|
Total
|
|
December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and other
|
|
$
|
67
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
67
|
|
|
$
|
20,208
|
|
|
$
|
20,275
|
|
Real estate
|
|
|
1,019
|
|
|
|
24
|
|
|
|
2,644
|
|
|
|
3,687
|
|
|
|
76,193
|
|
|
|
79,880
|
|
Five or more family
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,286
|
|
|
|
14,286
|
|
Construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,795
|
|
|
|
1,795
|
|
Land
|
|
|
|
|
|
|
109
|
|
|
|
2,494
|
|
|
|
2,603
|
|
|
|
5,892
|
|
|
|
8,495
|
|
Mortgage
|
|
|
523
|
|
|
|
283
|
|
|
|
1,469
|
|
|
|
2,275
|
|
|
|
34,720
|
|
|
|
36,995
|
|
Mortgage warehouse
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
137,467
|
|
|
|
137,467
|
|
Residential construction:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,099
|
|
|
|
1,099
|
|
Land
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
367
|
|
|
|
367
|
|
Indirect auto
|
|
|
10
|
|
|
|
|
|
|
|
5
|
|
|
|
15
|
|
|
|
1,139
|
|
|
|
1,154
|
|
Home equity
|
|
|
21
|
|
|
|
|
|
|
|
25
|
|
|
|
46
|
|
|
|
12,274
|
|
|
|
12,320
|
|
Consumer and other
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
3
|
|
|
|
3,864
|
|
|
|
3,867
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
1,643
|
|
|
$
|
416
|
|
|
$
|
6,637
|
|
|
$
|
8,696
|
|
|
$
|
309,304
|
|
|
$
|
318,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The recorded investment in loans does not include accrued interest.
Troubled Debt Restructurings:
A loan
modification is considered a troubled debt restructuring when a borrower is experiencing financial difficulty and the Company grants a concession it would not otherwise consider but for the borrowers financial difficulties. At June 30,
2013 and December 31, 2012, the outstanding balance of loans that were modified as troubled debt restructurings totaled $812 and $842, respectively. All of these loans were considered nonperforming troubled debt restructurings. The Company has
allocated $21 of specific reserves to customers whose loan terms have been modified in troubled debt restructurings as of June 30, 2013 and $0 as of December 31, 2012. Troubled debt restructurings previously disclosed resulted in no charge
offs during the three and six months ended June 30, 2013. The Company has not committed to lend additional amounts as of June 30, 2013 and December 31, 2012 to customers with outstanding loans that are classified as troubled debt
restructurings.
During the three and six months ended June 30, 2013 and 2012, the Bank did not modify any loans which were considered to
be troubled debt restructurings.
For the three and six months ended June 30, 2013 and 2012, no troubled debt restructurings defaulted
within twelve months following the modification.
A loan is considered to be in payment default once it is 90 days contractually past due
under the modified terms.
In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the
probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed by the Companys management loan committee.
22
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 5 LOANS continued
Credit Quality Indicators
The Company categorized loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience,
credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans as to credit risk. The analysis includes loans with risk ratings of Special Mention,
Substandard and Doubtful. This analysis is performed on a quarterly basis. The Company uses the following definitions for risk ratings:
Special Mention
. Loans classified as special mention have a potential weakness that deserves managements close attention. If left
uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institutions credit position at some future date.
Substandard
. Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a
well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.
Doubtful
. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the
weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.
Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass rated loans. The Bank monitors credit quality on loans not rated
through the loans individual payment performance. As of June 30, 2013, the most recent analysis performed, the risk category of loans by class of loans was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Not
Rated
|
|
|
Pass
|
|
|
Special
Mention
|
|
|
Substandard
|
|
|
Doubtful
|
|
June 30, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and other
|
|
$
|
588
|
|
|
$
|
18,091
|
|
|
$
|
585
|
|
|
$
|
|
|
|
$
|
|
|
Real estate
|
|
|
|
|
|
|
63,836
|
|
|
|
5,438
|
|
|
|
5,361
|
|
|
|
|
|
Five or more family
|
|
|
193
|
|
|
|
7,221
|
|
|
|
3,612
|
|
|
|
|
|
|
|
|
|
Construction
|
|
|
|
|
|
|
1,490
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Land
|
|
|
|
|
|
|
5,512
|
|
|
|
110
|
|
|
|
3,466
|
|
|
|
|
|
Mortgage
|
|
|
26,994
|
|
|
|
3,765
|
|
|
|
434
|
|
|
|
2,100
|
|
|
|
|
|
Mortgage warehouse
|
|
|
107,145
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential construction:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction
|
|
|
1,721
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Land
|
|
|
362
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Indirect auto
|
|
|
784
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Home equity
|
|
|
11,344
|
|
|
|
81
|
|
|
|
83
|
|
|
|
42
|
|
|
|
|
|
Consumer and other
|
|
|
2,784
|
|
|
|
774
|
|
|
|
237
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
151,915
|
|
|
$
|
100,770
|
|
|
$
|
10,499
|
|
|
$
|
10,969
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The recorded investment in loans does not include accrued interest.
23
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 5 LOANS continued
As of December 31, 2012 the risk category of loans by class of loans was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Not
Rated
|
|
|
Pass
|
|
|
Special
Mention
|
|
|
Substandard
|
|
|
Doubtful
|
|
December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and other
|
|
$
|
11
|
|
|
$
|
19,945
|
|
|
$
|
319
|
|
|
$
|
|
|
|
$
|
|
|
Real estate
|
|
|
|
|
|
|
66,427
|
|
|
|
6,131
|
|
|
|
7,322
|
|
|
|
|
|
Five or more family
|
|
|
203
|
|
|
|
10,410
|
|
|
|
3,673
|
|
|
|
|
|
|
|
|
|
Construction
|
|
|
|
|
|
|
1,795
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Land
|
|
|
|
|
|
|
4,754
|
|
|
|
755
|
|
|
|
2,986
|
|
|
|
|
|
Mortgage
|
|
|
30,121
|
|
|
|
4,077
|
|
|
|
447
|
|
|
|
2,350
|
|
|
|
|
|
Mortgage warehouse
|
|
|
137,467
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential construction:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction
|
|
|
1,099
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Land
|
|
|
367
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Indirect auto
|
|
|
1,154
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Home equity
|
|
|
12,060
|
|
|
|
115
|
|
|
|
86
|
|
|
|
59
|
|
|
|
|
|
Consumer and other
|
|
|
3,036
|
|
|
|
831
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
185,518
|
|
|
$
|
108,354
|
|
|
$
|
11,411
|
|
|
$
|
12,717
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The recorded investment in loans does not include accrued interest.
Purchased Loans
The Company purchased
loans during 2007, for which there was, at acquisition, evidence of deterioration of credit quality since origination and it was probable, at acquisition, that all contractually required payments would not be collected. The outstanding balance and
carrying amount of those loans was as follows:
|
|
|
|
|
|
|
|
|
|
|
June 30,
2013
|
|
|
December 31,
2012
|
|
Commercial:
|
|
|
|
|
|
|
|
|
Commercial and other
|
|
$
|
28
|
|
|
$
|
29
|
|
Real estate
|
|
|
694
|
|
|
|
714
|
|
Mortgage
|
|
|
133
|
|
|
|
139
|
|
|
|
|
|
|
|
|
|
|
Outstanding balance
|
|
$
|
855
|
|
|
$
|
882
|
|
|
|
|
|
|
|
|
|
|
Carrying amount, net of allowance of $0
|
|
$
|
825
|
|
|
$
|
851
|
|
|
|
|
|
|
|
|
|
|
24
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 5 LOANS continued
Accretable yield, or income expected to be collected, is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended June 30,
|
|
|
Six Months
Ended June 30,
|
|
|
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
Beginning balance
|
|
$
|
114
|
|
|
$
|
179
|
|
|
$
|
128
|
|
|
$
|
193
|
|
Reclassification from non-accretable yield
|
|
|
1
|
|
|
|
|
|
|
|
2
|
|
|
|
4
|
|
Accretion of income
|
|
|
(15
|
)
|
|
|
(21
|
)
|
|
|
(30
|
)
|
|
|
(39
|
)
|
Disposals
|
|
|
|
|
|
|
(3
|
)
|
|
|
|
|
|
|
(3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance
|
|
$
|
100
|
|
|
$
|
155
|
|
|
$
|
100
|
|
|
$
|
155
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the purchased loans disclosed above, the Company did not increase the allowance for loan losses during 2013 or 2012.
No allowance for loan losses were reversed during 2013 or 2012.
NOTE 6 FAIR VALUE
Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or
most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values:
Level 1 Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access
as of the measurement date.
Level 2 Significant other observable inputs other than Level 1 prices such as quoted
prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
Level 3 Significant unobservable inputs that reflect a companys own assumptions about the assumptions that market participants would use in pricing an asset or liability.
The Company used the following methods and significant assumptions to estimate the fair value of each type of financial asset:
Investment Securities
: The fair values for investment securities are determined by quoted market prices, if available (Level 1). For securities
where quoted prices are not available, fair values are calculated based on market prices of similar securities (Level 2).
Loans Held for
Sale and Loan Commitment Derivatives
: The fair value of loans held for sale and residential mortgage loan commitments are determined by obtaining quoted prices for similar loans and commitments with similar interest rates and maturities from
major secondary markets (Level 2).
Derivatives-Interest Rate Swaps
: The fair value of derivatives are based on valuation models using
observable market data as of the measurement date (Level 2).
25
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 6 FAIR VALUE continued
Impaired Loans
: At the time a loan is considered impaired, it is valued at the lower of cost or
fair value. Impaired loans carried at fair value generally receive specific allocations of the allowance for loan losses. For collateral dependent loans, fair value is commonly based on recent real estate appraisals performed by qualified
independent third-party appraisers. These appraisals may utilize a single valuation approach or a combination of approaches including cost, comparable sales and the income approach. The cost approach is based on the cost to replace the existing
property. The comparable sales approach evaluates the sales prices of comparable properties within the same market area. The income approach considers net operating income generated by the property and the rate of return required by an investor.
Adjustments are routinely made in the appraisal process by the independent third-party appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a
Level 3 classification of the inputs for determining fair value. Non-real estate collateral may be valued using an appraisal, net book value per the borrowers financial statements, or aging reports, adjusted or discounted based on
managements historical knowledge, changes in market conditions from the time of the valuation, and managements expertise and knowledge of the client and clients business, resulting in a Level 3 fair value classification. Impaired
loans are evaluated on a quarterly basis for additional impairment and adjusted accordingly.
Other Real Estate Owned
: Assets acquired
through or instead of loan foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. These assets are subsequently accounted for at lower of cost or fair value less estimated costs to sell.
Fair value is commonly based on recent real estate appraisals performed by qualified independent third-party appraisers. These appraisals may utilize a single valuation approach or a combination of approaches including cost, comparable sales and the
income approach. The cost approach is based on the cost to replace the existing property. The comparable sales approach evaluates the sales prices of comparable properties within the same market area. The income approach considers net operating
income generated by the property and the rate of return required by an investor. Adjustments are routinely made in the appraisal process by the independent third-party appraisers to adjust for differences between the comparable sales and income data
available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value.
The President/Chief Financial Officer (President/CFO) and Executive Vice President Credit (EVP Credit) are
responsible for determining the valuation processes and procedures for the fair value measurement of impaired loans and other real estate owned properties. The President/CFO and EVP Credit review impaired loans and other real estate owned
properties on a quarterly basis to determine the accuracy of third party appraisals, auction values, values derived from trade publications and any additional data received from the borrower, and the appropriateness of unobservable inputs, generally
discounts due to collection issues and current market conditions which are utilized in determining the fair value. The EVP Credit determines discounts based on the valuation source and asset type for impaired loans. These discounts are
reviewed periodically, annually at a minimum, for appropriateness. Current trends in market values and gains and losses on sales of similar assets are also considered when determining discounts of asset categories.
26
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 6 FAIR VALUE continued
The table below presents the valuation methodology and unobservable inputs for impaired loans and other
real estate owned at June 30, 2013.
|
|
|
|
|
|
|
|
|
|
|
Valuation
Methodology
|
|
Unobservable
Inputs
|
|
Range of
Inputs
|
|
Average of
Inputs
|
Impaired loans
|
|
|
|
|
|
|
|
|
Commercial:
|
|
|
|
|
|
|
|
|
Real estate
|
|
Appraisals
|
|
Discounts for changes in market conditions
|
|
20-35%
|
|
27%
|
Land
|
|
Appraisals
|
|
Discounts for changes in market conditions
|
|
10-55%
|
|
31%
|
Mortgage
|
|
Appraisals
|
|
Discounts for changes in market conditions
|
|
0-25%
|
|
9%
|
Home equity
|
|
Appraisals
|
|
Discounts for changes in market conditions
|
|
10%
|
|
10%
|
Other real estate owned, net
|
|
|
|
|
|
|
|
|
Commercial:
|
|
|
|
|
|
|
|
|
Real estate
|
|
Appraisals
|
|
Discounts for changes in market conditions
|
|
40%
|
|
40%
|
Land
|
|
Appraisals
|
|
Discounts for changes in market conditions
|
|
16%-17%
|
|
16%
|
Mortgage
|
|
Appraisals
|
|
Discounts for changes in market conditions
|
|
16%-45%
|
|
31%
|
The table below presents the valuation methodology and unobservable inputs for impaired loans and other real estate owned
at December 31, 2012.
|
|
|
|
|
|
|
|
|
|
|
Valuation
Methodology
|
|
Unobservable
Inputs
|
|
Range of
Inputs
|
|
Average of
Inputs
|
Impaired loans
|
|
|
|
|
|
|
|
|
Commercial:
|
|
|
|
|
|
|
|
|
Real estate
|
|
Appraisals
|
|
Discounts for changes in market conditions
|
|
10-30%
|
|
20%
|
Land
|
|
Appraisals
|
|
Discounts for changes in market conditions
|
|
0-40%
|
|
17%
|
Mortgage
|
|
Appraisals
|
|
Discounts for changes in market conditions
|
|
0-20%
|
|
11%
|
Other real estate owned, net
|
|
|
|
|
|
|
|
|
Commercial:
|
|
|
|
|
|
|
|
|
Real estate
|
|
Appraisals
|
|
Discounts for changes in market conditions
|
|
40%
|
|
40%
|
Land
|
|
Appraisals
|
|
Discounts for changes in market conditions
|
|
6%-17%
|
|
11%
|
Mortgage
|
|
Appraisals
|
|
Discounts for changes in market conditions
|
|
7%-29%
|
|
18%
|
Mortgage Servicing Rights
: On a quarterly basis, loan servicing rights are evaluated for impairment based on the
fair value of the
rights as compared to the carrying amount. If the carrying amount of an individual tranche exceeds fair value, impairment is
recorded on that tranche so that the servicing asset is carried at fair value. Fair value is determined at a tranche level, based on a valuation model that calculates the present value of estimated future net servicing income. The valuation model
utilizes assumptions that market participants would use in estimating future net servicing income and that can be validated against available market data (Level 2).
27
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 6 FAIR VALUE - continued
Fair value at June 30, 2013 was determined using a discount rate of 10%, prepayment speeds ranging from 7.4% to 22.3%, depending on the stratification of the specific right, and a weighted
average default rate of approximately 0.5%. Fair value at December 31, 2012 was determined using a discount rate of 10.0%, prepayment speeds ranging from 14.9% to 30.3%, depending on the stratification of the specific right, and a weighted average
default rate of approximately 0.5%.
Assets and liabilities measured at fair value on a recurring basis, including financial assets and
liabilities for which the Company has elected the fair value option, are summarized below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements at
June 30, 2013
|
|
|
|
|
|
|
Carrying
Value
|
|
|
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
|
|
|
Significant
Other
Observable Inputs
(Level 2)
|
|
|
Significant
Unobservable
Inputs
(Level
3)
|
|
Financial Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment securities available for sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. federal agency obligations
|
|
$
|
9,062
|
|
|
$
|
|
|
|
$
|
9,062
|
|
|
$
|
|
|
State and municipal
|
|
|
50,002
|
|
|
|
|
|
|
|
50,002
|
|
|
|
|
|
Mortgage-backed securities-residential
|
|
|
21,208
|
|
|
|
|
|
|
|
21,208
|
|
|
|
|
|
Government agency sponsored collateralized mortgage obligations
|
|
|
68,121
|
|
|
|
|
|
|
|
68,121
|
|
|
|
|
|
Corporate debt securities
|
|
|
4,346
|
|
|
|
|
|
|
|
4,346
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total investment securities Available-for-sale
|
|
$
|
152,739
|
|
|
$
|
|
|
|
$
|
152,739
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans held for sale
|
|
$
|
2,007
|
|
|
$
|
|
|
|
$
|
2,007
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives residential mortgage loan commitments
|
|
$
|
72
|
|
|
$
|
|
|
|
$
|
72
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives interest rate swaps
|
|
$
|
(1,503
|
)
|
|
$
|
|
|
|
$
|
(1,503
|
)
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 6 FAIR VALUE continued
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements at
December 31, 2012
|
|
|
|
|
|
|
Carrying
Value
|
|
|
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
|
|
|
Significant
Other
Observable Inputs
(Level 2)
|
|
|
Significant
Unobservable
Inputs
(Level
3)
|
|
Financial Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment securities available for sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. federal agency obligations
|
|
$
|
8,405
|
|
|
$
|
|
|
|
$
|
8,405
|
|
|
$
|
|
|
State and municipal
|
|
|
45,614
|
|
|
|
|
|
|
|
45,614
|
|
|
|
|
|
Mortgage-backed securities residential
|
|
|
12,385
|
|
|
|
|
|
|
|
12,385
|
|
|
|
|
|
Government agency sponsored collateralized mortgage obligations
|
|
|
55,156
|
|
|
|
|
|
|
|
55,156
|
|
|
|
|
|
Corporate debt securities
|
|
|
4,060
|
|
|
|
|
|
|
|
4,060
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total investment securities available-for-sale
|
|
$
|
125,620
|
|
|
$
|
|
|
|
$
|
125,620
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans held for sale
|
|
$
|
1,155
|
|
|
$
|
|
|
|
$
|
1,155
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives residential mortgage loan commitments
|
|
$
|
79
|
|
|
$
|
|
|
|
$
|
79
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives interest rate swaps
|
|
$
|
(1,984
|
)
|
|
$
|
|
|
|
$
|
(1,984
|
)
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
There were no transfers between Level 1 and Level 2 during the periods indicated above.
Loans held for sale were carried at the fair value of $2,007 which was made up of the outstanding balance of $1,955 and an unrealized gain of $52 at
June 30, 2013, resulting in a change in unrealized gains of $(13) and $18 for the three and six months ended June 30, 2013, respectively. At June 30, 2012, loans held for sale were carried at the fair value of $1,692, which was made
up of the outstanding balance of $1,665 and an unrealized gain of $27, resulting in a change in unrealized gains of $(20) and $(16) for the three and six months ended June 30, 2012.
The difference between the aggregate fair value and the aggregate remaining contractual principal balance outstanding for loans held for sale was:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2013
|
|
|
|
|
|
|
Aggregate
Fair Value
|
|
|
Difference
|
|
|
Contractual
Principal
|
|
Loans held for sale
|
|
$
|
2,007
|
|
|
$
|
52
|
|
|
$
|
1,955
|
|
|
|
|
|
|
|
|
|
|
December 31, 2012
|
|
|
|
|
|
|
Aggregate
Fair Value
|
|
|
Difference
|
|
|
Contractual
Principal
|
|
Loans held for sale
|
|
$
|
1,155
|
|
|
$
|
34
|
|
|
$
|
1,121
|
|
29
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 6 FAIR VALUE continued
For items for which the fair value option has been elected, interest income is recorded within the
consolidated statements of income and comprehensive income based on the contractual amount of interest income earned on financial assets (none were delinquent or in nonaccrual status).
The following table presents the amount of gains and losses from fair value changes included in income before income taxes for financial assets carried at fair value for the three and six months ended
June 30, 2013 and 2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in Fair Values for the three months ended June
30, 2013 and 2012,
for the Items Measured at Fair Value Pursuant to Election of the Fair Value
Option
|
|
|
|
Other
Gains and
Losses
|
|
|
Interest
Income
|
|
|
Interest
Expense
|
|
|
Total Changes
in Fair
Values
Included in
Current Period
Earnings
|
|
Three Months Ended June 30, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans held for sale
|
|
$
|
(13
|
)
|
|
$
|
3
|
|
|
$
|
|
|
|
$
|
(10
|
)
|
Three Months Ended June 30, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans held for sale
|
|
$
|
(20
|
)
|
|
$
|
11
|
|
|
$
|
|
|
|
$
|
(9
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in Fair Values for the six months ended June
30, 2013 and 2012,
for the Items Measured at Fair Value Pursuant to Election of the Fair Value
Option
|
|
|
|
Other
Gains and
Losses
|
|
|
Interest
Income
|
|
|
Interest
Expense
|
|
|
Total Changes
in Fair
Values
Included in
Current Period
Earnings
|
|
Six Months Ended June 30, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans held for sale
|
|
$
|
18
|
|
|
$
|
9
|
|
|
$
|
|
|
|
$
|
27
|
|
Six Months Ended June 30, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans held for sale
|
|
$
|
(16
|
)
|
|
$
|
23
|
|
|
$
|
|
|
|
$
|
7
|
|
30
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 6 FAIR VALUE continued
Assets measured at fair value on a non-recurring basis are summarized below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements at
June
30, 2013
|
|
|
|
Carrying
Value
|
|
|
Quoted Prices in
Active
Markets for
Identical Assets
(Level 1)
|
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
|
Significant
Unobservable
Inputs
(Level
3)
|
|
Impaired loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate
|
|
$
|
937
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
937
|
|
Land
|
|
|
1,604
|
|
|
|
|
|
|
|
|
|
|
|
1,604
|
|
Mortgage
|
|
|
750
|
|
|
|
|
|
|
|
|
|
|
|
750
|
|
Home equity
|
|
|
23
|
|
|
|
|
|
|
|
|
|
|
|
23
|
|
Other real estate owned, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate
|
|
|
102
|
|
|
|
|
|
|
|
|
|
|
|
102
|
|
Land
|
|
|
294
|
|
|
|
|
|
|
|
|
|
|
|
294
|
|
Mortgage
|
|
|
115
|
|
|
|
|
|
|
|
|
|
|
|
115
|
|
Mortgage servicing rights
|
|
|
206
|
|
|
|
|
|
|
|
206
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements at
December 31,
2012
|
|
|
|
Carrying
Value
|
|
|
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
|
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
|
Significant
Unobservable
Inputs
(Level
3)
|
|
Impaired loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real Estate
|
|
$
|
833
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
833
|
|
Land
|
|
|
2,000
|
|
|
|
|
|
|
|
|
|
|
|
2,000
|
|
Mortgage
|
|
|
697
|
|
|
|
|
|
|
|
|
|
|
|
697
|
|
Other real estate owned, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real Estate
|
|
|
102
|
|
|
|
|
|
|
|
|
|
|
|
102
|
|
Land
|
|
|
385
|
|
|
|
|
|
|
|
|
|
|
|
385
|
|
Mortgage
|
|
|
133
|
|
|
|
|
|
|
|
|
|
|
|
133
|
|
Mortgage servicing rights
|
|
|
273
|
|
|
|
|
|
|
|
273
|
|
|
|
|
|
31
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 6 FAIR VALUE continued
Impaired loans, which are measured for impairment using the fair value of the collateral for collateral
dependent loans, had a gross carrying amount of $4,984, with a valuation allowance of $1,670 at June 30, 2013, resulting in an additional provision for loan losses of $310 and $474 for the three and six months ended June 30, 2013,
respectively. At June 30, 2012, impaired loans had a carrying amount of $4,146, with a valuation allowance of $1,313, resulting in an additional provision for loan losses of $1,009 and $1,080 for the three and six months ended June 30,
2012.
Other real estate owned, which is measured at the lower of cost or fair value less costs to sell, had a net carrying amount of $511,
which was made up of the outstanding balance of $873 net a valuation allowance of $362 at June 30, 2013, resulting in a write-down of $18 and $109 for the three and six months ended June 30, 2013 and 2012, respectively. At June 30,
2012, other real estate owned had a net carrying amount of $721, which was made up of the outstanding balance of $922 net a valuation allowance of $201, resulting in a write-down of $64 and $201 for the three and six months ended June 30, 2012.
Mortgage servicing rights, which are carried at lower of cost or fair value, were carried at their fair value of $206, which was made up of
the outstanding balance of $328, net of a valuation allowance of $122, resulting in a charge of $(16) and $(36) for the three and six months ended June 30, 2013. At June 30, 2012, mortgage servicing rights were carried at their fair value
of $260, which was made up of the outstanding balance of $388, net of a valuation allowance of $128, resulting in a charge of $14 and $9 for the three and six months ended June 30, 2012.
The carrying amounts and estimated fair values of financial instruments, at June 30, 2013 are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements
at
June 30, 2013
|
|
|
|
Carrying
Value
|
|
|
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
|
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
|
Significant
Unobservable
Inputs
(Level
3)
|
|
Financial assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from financial institutions
|
|
$
|
11,758
|
|
|
$
|
11,758
|
|
|
$
|
|
|
|
$
|
|
|
Interest-earning time deposits at other financial institutions
|
|
|
7,631
|
|
|
|
|
|
|
|
7,674
|
|
|
|
|
|
Securities available for sale
|
|
|
152,739
|
|
|
|
|
|
|
|
152,739
|
|
|
|
|
|
Federal Home Loan Bank stock
|
|
|
3,817
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Loans held for sale
|
|
|
2,007
|
|
|
|
|
|
|
|
2,007
|
|
|
|
|
|
Loans, net
|
|
|
269,916
|
|
|
|
|
|
|
|
|
|
|
|
273,758
|
|
Accrued interest receivable
|
|
|
1,524
|
|
|
|
1
|
|
|
|
889
|
|
|
|
634
|
|
Financial liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
|
(343,148
|
)
|
|
|
|
|
|
|
(331,793
|
)
|
|
|
|
|
Federal Home Loan Bank advances
|
|
|
(50,023
|
)
|
|
|
|
|
|
|
(51,464
|
)
|
|
|
|
|
Subordinated debentures
|
|
|
(5,155
|
)
|
|
|
|
|
|
|
|
|
|
|
(5,149
|
)
|
Short-term borrowings
|
|
|
(1,000
|
)
|
|
|
|
|
|
|
(1,000
|
)
|
|
|
|
|
Accrued interest payable
|
|
|
(189
|
)
|
|
|
|
|
|
|
(183
|
)
|
|
|
(6
|
)
|
Derivatives interest rate swaps
|
|
|
(1,503
|
)
|
|
|
|
|
|
|
(1,503
|
)
|
|
|
|
|
32
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 6 FAIR VALUE continued
The carrying amounts and estimated fair values of financial instruments, at December 31, 2012 are
as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements
at
December 31, 2012
|
|
|
|
Carrying
Value
|
|
|
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
|
|
|
Significant
Other
Observable Inputs
(Level 2)
|
|
|
Significant
Unobservable
Inputs
(Level
3)
|
|
Financial assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from financial institutions
|
|
$
|
6,857
|
|
|
$
|
6,857
|
|
|
$
|
|
|
|
$
|
|
|
Interest-earning time deposits at other financial institutions
|
|
|
7,141
|
|
|
|
|
|
|
|
7,197
|
|
|
|
|
|
Securities available for sale
|
|
|
125,620
|
|
|
|
|
|
|
|
125,620
|
|
|
|
|
|
Federal Home Loan Bank stock
|
|
|
3,817
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Loans held for sale
|
|
|
1,155
|
|
|
|
|
|
|
|
1,155
|
|
|
|
|
|
Loans, net
|
|
|
313,692
|
|
|
|
|
|
|
|
|
|
|
|
318,534
|
|
Accrued interest receivable
|
|
|
1,481
|
|
|
|
2
|
|
|
|
802
|
|
|
|
677
|
|
Financial liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
|
(348,970
|
)
|
|
|
|
|
|
|
(347,348
|
)
|
|
|
|
|
Federal Home Loan Bank advances
|
|
|
(49,009
|
)
|
|
|
|
|
|
|
(51,059
|
)
|
|
|
|
|
Subordinated debentures
|
|
|
(5,155
|
)
|
|
|
|
|
|
|
|
|
|
|
(5,188
|
)
|
Accrued interest payable
|
|
|
(198
|
)
|
|
|
|
|
|
|
(196
|
)
|
|
|
(2
|
)
|
Derivatives interest rate swaps
|
|
|
(1,984
|
)
|
|
|
|
|
|
|
(1,984
|
)
|
|
|
|
|
The methods and assumptions, not previously presented, used to estimate fair value are described as follows:
Cash and due from financial institutions
: The carrying amounts of cash and due from financial institutions approximate fair values and are
classified as Level 1.
Interest-earning time deposits at other financial institutions
: The fair values of the Companys
interest-earning time deposits at other financial institutions are estimated using discounted cash flow analyses based on current rates for similar types of interest-earning time deposits and are classified as Level 2.
Federal Home Loan Bank stock
: It is not practical to determine the fair value of Federal Home Loan Bank stock due to restrictions placed on its
transferability.
Loans
: The fair values of loans is based on discounted cash flow analyses, using interest rates currently being
offered for loans with similar terms to borrowers of similar credit quality resulting in a Level 3 classification. Impaired loans are valued at the lower of cost or fair value as described previously. The methods utilized to estimate the fair value
of loans do not necessarily represent an exit price.
Loans held for sale
: The fair value of loans held for sale is estimated based
upon binding contracts and quotes from third party investors resulting in Level 2 classification.
33
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 6 FAIR VALUE continued
Deposits
: The fair values disclosed for demand deposits are estimated using a cash flow
calculation reduced by decay rate assumptions. These cash flows are discounted to the current market rate and a functional cost to recognize the inherent costs of servicing these accounts. This results in a Level 2 classification. Fair values of
fixed rate certificates of deposit are estimated using a cash flow calculation reduced by known maturities, estimated principal payments and estimated early withdrawal amounts. These cash flows are discounted to the current market rate. This results
in a Level 2 calculation.
Federal Home Loan Bank Advances
: The fair values of the Companys Federal Home Loan Bank advances are
estimated using discounted cash flow analyses based on current borrowing rates for similar types of borrowing arrangements resulting in a Level 2 classification.
Subordinated Debentures:
The fair value of the Companys subordinated debentures are estimated using discounted cash flow analyses based on the current borrowing rates for similar types of
borrowing arrangements resulting in a Level 3 classification.
Short-term Borrowings
: The carrying amounts of short-term borrowings
approximate fair values and are classified Level 2.
Accrued Interest Receivable/Payable
: The carrying amounts of accrued interest
approximate fair value resulting in a Level 1, Level 2 or Level 3 classification based on the underlying asset or liability.
NOTE 7 DERIVATIVES
The Company utilizes interest rate swap agreements as part of its asset liability management strategy to help manage its interest rate
risk position. The notional amount of the interest rate swap does not represent an amount exchanged by the parties. The amount exchanged is determined by reference to the notional amount and the other terms of the individual interest rate swap
agreement.
Interest Rate Swaps Designated as Cash Flow Hedges
: Interest rate swaps with notional amounts of $30.25 million as of
June 30, 2013 and December 31, 2012, were designated as cash flow hedges of subordinated debentures, certain CDARS deposits and FHLB advances, and were determined to be fully effective during all periods presented. As such, no amount of
ineffectiveness has been included in net income. Therefore, the aggregate fair value of the swaps is recorded in other assets (liabilities) with changes in fair value recorded in other comprehensive income (loss). The amount included in accumulated
other comprehensive income (loss) would be reclassified to current earnings should the hedges no longer be considered effective. The hedge would no longer be considered effective if a portion of the hedge becomes ineffective, the item hedged is no
longer in existence or the Company discontinues hedge accounting. The Company expects the hedges to remain fully effective during the remaining terms of the swaps. The Company does not expect any amounts to be reclassified from other comprehensive
income (loss) over the next 12 months.
34
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 7 DERIVATIVES continued
Information related to the interest-rate swaps designated as cash flow hedges as of June 30, 2013
and December 31, 2012 were as follows:
|
|
|
|
|
|
|
|
|
|
|
June 30, 2013
|
|
|
December 31, 2012
|
|
Subordinated debentures
|
|
|
|
|
|
|
|
|
Notional amount
|
|
$
|
5,000
|
|
|
$
|
5,000
|
|
Fixed interest rate payable
|
|
|
5.54
|
%
|
|
|
5.54
|
%
|
Variable interest rate receivable
(Three month LIBOR plus 3.10%)
|
|
|
3.38
|
%
|
|
|
3.41
|
%
|
Unrealized losses
|
|
|
(79
|
)
|
|
|
(131
|
)
|
Maturity date
|
|
|
March 26, 2014
|
|
CDARS deposits
|
|
|
|
|
|
|
|
|
Notional amount
|
|
$
|
10,250
|
|
|
$
|
10,250
|
|
Fixed interest rate payable
|
|
|
3.19
|
%
|
|
|
3.19
|
%
|
Variable interest rate receivable
(One month LIBOR plus 0.55%)
|
|
|
0.74
|
%
|
|
|
0.76
|
%
|
Unrealized losses
|
|
|
(308
|
)
|
|
|
(428
|
)
|
Maturity date
|
|
|
October 9, 2014
|
|
FHLB advance
|
|
|
|
|
|
|
|
|
Notional amount
|
|
$
|
5,000
|
|
|
$
|
5,000
|
|
Fixed interest rate payable
|
|
|
3.54
|
%
|
|
|
3.54
|
%
|
Variable interest rate receivable
(Three month LIBOR plus 0.22%)
|
|
|
0.49
|
%
|
|
|
0.53
|
%
|
Unrealized losses
|
|
|
(311
|
)
|
|
|
(395
|
)
|
Maturity date
|
|
|
September 20, 2015
|
|
FHLB advance
|
|
|
|
|
|
|
|
|
Notional amount
|
|
$
|
10,000
|
|
|
$
|
10,000
|
|
Fixed interest rate payable
|
|
|
3.69
|
%
|
|
|
3.69
|
%
|
Variable interest rate receivable
(Three month LIBOR plus 0.25%)
|
|
|
0.53
|
%
|
|
|
0.57
|
%
|
Unrealized losses
|
|
|
(805
|
)
|
|
|
(1,030
|
)
|
Maturity date
|
|
|
July 19, 2016
|
|
Interest expense recorded on these swap transactions totaled $249 and $197 during the three months ended June 30,
2013 and 2012, respectively, and $496 and $390 for the six months ended June 30, 2013 and 2012, respectively and is reported as a component of interest expense on subordinated debentures, deposits and FHLB advances.
35
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 7 DERIVATIVES continued
The following table presents the net losses recorded in accumulated other comprehensive income (loss)
and the Consolidated Statements of Income relating to the cash flow derivative instruments for the three months ended June 30, 2013 and 2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net amount of
gain (loss) recognized
in OCI
(Effective Portion)
2013
|
|
|
Net amount of gain
(loss) reclassified from OCI
to interest
income
2013
|
|
|
Net amount of gain
(loss) recognized in other
non interest
income
(Ineffective Portion)
2013
|
|
Interest rate contracts
|
|
$
|
187
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
Net amount of
gain (loss)
recognized
in OCI
(Effective Portion)
2012
|
|
|
Net amount of gain
(loss) reclassified from
OCI
to interest income
2012
|
|
|
Net amount of gain
(loss) recognized in other
non interest income
(Ineffective
Portion)
2012
|
|
Interest rate contracts
|
|
$
|
(18
|
)
|
|
$
|
|
|
|
$
|
|
|
The following table presents the net losses recorded in accumulated other comprehensive income (loss) and the
Consolidated Statements of Income relating to the cash flow derivative instruments for the six months ended June 30, 2013 and 2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net amount of
gain
(loss) recognized
in OCI
(Effective
Portion)
2013
|
|
|
Net amount of gain
(loss) reclassified from OCI
to interest
income
2013
|
|
|
Net amount of gain
(loss) recognized in other
non interest
income
(Ineffective Portion)
2013
|
|
Interest rate contracts
|
|
$
|
318
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
Net amount of
gain
(loss) recognized
in OCI
(Effective
Portion)
2012
|
|
|
Net amount of gain
(loss) reclassified from
OCI
to interest income
2012
|
|
|
Net amount of gain
(loss) recognized in other
non interest income
(Ineffective
Portion)
2012
|
|
Interest rate contracts
|
|
$
|
38
|
|
|
$
|
|
|
|
$
|
|
|
36
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 7 DERIVATIVES continued
The following table reflects the cash flow hedges included in the Consolidated Balance Sheets as of
June 30, 2013 and December 31, 2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2013
|
|
|
December 31, 2012
|
|
|
|
Notional
Amount
|
|
|
Fair
Value
|
|
|
Notional
Amount
|
|
|
Fair
Value
|
|
Included in other liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate swaps related to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subordinated debentures
|
|
$
|
(5,000
|
)
|
|
$
|
(79
|
)
|
|
$
|
(5,000
|
)
|
|
$
|
(131
|
)
|
CDARS deposits
|
|
|
(10,250
|
)
|
|
|
(308
|
)
|
|
|
(10,250
|
)
|
|
|
(428
|
)
|
FHLB advances
|
|
|
(15,000
|
)
|
|
|
(1,116
|
)
|
|
|
(15,000
|
)
|
|
|
(1,425
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total included in other liabilities
|
|
|
|
|
|
$
|
(1,503
|
)
|
|
|
|
|
|
$
|
(1,984
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The counterparty to the Companys derivatives is exposed to credit risk whenever the derivative is in a liability
position. As a result, the Company has collateralized the liability with cash and security collateral held in safekeeping by Bank of New York. At June 30, 2013 and December 31, 2012, the Company had $220 in cash and securities with a fair
value of $2,223 and $2,586, respectively, posted as collateral for these derivatives.
NOTE 8 STOCK-BASED COMPENSATION
During the month of September 2011, the Company implemented the 2011 Equity Incentive Plan (the Plan) which was approved by
shareholders on May 10, 2011. The Plan provides for issuance of stock options or restricted share awards to employees and directors. Total shares authorized for issuance under the Plan is 417,543 which is further discussed below. Total
compensation cost that has been charged against income for those plans totaled $59 and $61 for the three months ended June 30, 2013 and 2012, respectively, and $120 and $122 for the six months ended June 30, 2013 and 2012, respectively.
Stock-Based Compensation
Compensation cost is recognized for stock options and restricted stock awards issued to employees or directors, based on the fair value of these awards
at the date of grant. A Black-Scholes model is utilized to estimate the fair value of stock options, while the market price of the Companys common stock at the date of grant is used for restricted stock awards.
Compensation cost is recognized over the required service period, generally defined as the vesting period. For awards with graded vesting, compensation
cost is recognized on a straight-line basis over the requisite service period for the entire award.
Stock Options
The Plan permits the grant of stock options to its employees or directors for up to 298,246 shares of common stock. Option awards are generally granted
with an exercise price equal to the market price of the Companys common stock at the date of grant; those option awards have vesting periods of 5 years and have 10-year contractual terms. Options granted generally vest 20% annually.
37
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 8 STOCK-BASED COMPENSATION continued
The fair value of each option award is estimated on the date of grant using a closed form option
valuation (Black-Scholes) model that uses the assumptions noted in the table below. Expected volatilities are based on historical volatilities of companies within LaPorte Bancorp, Inc.s peer group. The expected term of options granted
represents the period of time that options granted are expected to be outstanding, which takes into account that the options are not transferable. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield
curve in effect at the time of the grant. The fair value of options granted was determined using the following weighted-average assumptions as of the grant date.
A summary of the activity in the stock option plan for the six months ended June 30, 2013 was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
|
Weighted
Average
Exercise
Price
|
|
|
Weighted
Average
Remaining
Contractual
Term
|
|
|
Aggregate
Intrinsic
Value
|
|
Outstanding at January 1, 2013
|
|
|
281,829
|
|
|
$
|
6.44
|
|
|
|
8.7 years
|
|
|
$
|
659
|
|
Granted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercised
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forfeited or expired
|
|
|
(2,982
|
)
|
|
|
6.44
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at June 30, 2013
|
|
|
278,847
|
|
|
$
|
6.44
|
|
|
|
8.3 years
|
|
|
$
|
1,026
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fully vested and expected to vest
|
|
|
278,847
|
|
|
$
|
6.44
|
|
|
|
8.3 years
|
|
|
$
|
1,026
|
|
Exercisable at end of period
|
|
|
53,384
|
|
|
$
|
6.44
|
|
|
|
8.3 years
|
|
|
$
|
196
|
|
A summary of the activity in the stock option plan
for the six months ended June 30, 2012 was as follows:
|
|
|
|
Shares
|
|
|
Weighted
Average
Exercise
Price
|
|
|
Weighted
Average
Remaining
Contractual
Term
|
|
|
Aggregate
Intrinsic
Value
|
|
Outstanding at January 1, 2012
|
|
|
281,829
|
|
|
$
|
6.44
|
|
|
|
9.7 years
|
|
|
$
|
|
|
Granted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercised
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forfeited or expired
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at June 30, 2012
|
|
|
281,829
|
|
|
$
|
6.44
|
|
|
|
9.2 years
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fully vested and expected to vest
|
|
|
281,829
|
|
|
$
|
6.44
|
|
|
|
9.2 years
|
|
|
$
|
|
|
Exercisable at end of period
|
|
|
|
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
n/a
|
|
There were no options exercised during the three and six months ended June 30, 2013 and 2012, respectively. As of
June 30, 2013, there was $294 of total unrecognized compensation cost related to nonvested stock options granted under the Plan. The cost is expected to be recognized over a weighted-average period of 3.3 years.
38
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 8 STOCK-BASED COMPENSATION continued
Restricted Share Awards
The Plan provides for the issuance of up to 119,298 of restricted shares to directors and employees. Compensation expense is recognized over the vesting period of the awards based on the fair value of the
stock at issue date. The fair value of the stock was determined by obtaining the listed price of the Companys stock on the grant date. Shares vest 20% annually over five years. 2,388 shares were available for future grants at June 30,
2013.
A summary of changes in the Companys nonvested shares for the six months ended June 30, 2013 was as follows:
|
|
|
|
|
|
|
|
|
Nonvested Shares
|
|
Shares
|
|
|
Weighted-Average
Grant-Date
Fair Value
|
|
Nonvested at January 1, 2013
|
|
|
93,528
|
|
|
$
|
6.44
|
|
Granted
|
|
|
|
|
|
|
|
|
Vested
|
|
|
|
|
|
|
|
|
Forfeited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonvested at June 30, 2013
|
|
|
93,528
|
|
|
$
|
6.44
|
|
|
|
|
|
|
|
|
|
|
A summary of changes in the Companys nonvested shares for the six months ended June 30, 2012 follows:
|
|
|
|
|
|
|
|
|
Nonvested Shares
|
|
Shares
|
|
|
Weighted-Average
Grant-Date
Fair Value
|
|
Nonvested at April 1, 2012
|
|
|
116,910
|
|
|
$
|
6.44
|
|
Granted
|
|
|
|
|
|
|
|
|
Vested
|
|
|
|
|
|
|
|
|
Forfeited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonvested at June 30, 2012
|
|
|
116,910
|
|
|
$
|
6.44
|
|
|
|
|
|
|
|
|
|
|
As of June 30, 2013, there was $483 of total unrecognized compensation cost related to nonvested shares granted
under the Plan. The cost is expected to be recognized over a weighted-average period of 3.3 years. For the three and six months ended June 30, 2013, there were 23,382 shares vested. The total fair value of shares vested at June 30, 2013
was $237. There were no shares vested for the three and six months ended June 30, 2012.
39
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 9 ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
A summary of the changes in accumulated other comprehensive income (loss) by component for the three months ended June 30, 2013 is
as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gains and
Losses on
Cash Flow
Hedges
|
|
|
Unrealized Gains and
Losses on Available-
for-Sale
Securities
|
|
|
Total
|
|
Beginning balance
|
|
$
|
(1,178
|
)
|
|
$
|
3,143
|
|
|
$
|
1,965
|
|
Other comprehensive income (loss) before reclassification
|
|
|
186
|
|
|
|
(2,802
|
)
|
|
|
(2,616
|
)
|
Amounts reclassified from accumulated other comprehensive income
|
|
|
|
|
|
|
(156
|
)
|
|
|
(156
|
)
|
Net current period other comprehensive income (loss)
|
|
|
186
|
|
|
|
(2,958
|
)
|
|
|
(2,772
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance
|
|
$
|
(992
|
)
|
|
$
|
185
|
|
|
$
|
(807
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A summary of the reclassifications out of accumulated other comprehensive income (loss) for the three months ended
June 30, 2013 is as follows:
|
|
|
|
|
|
|
Details about
Accumulated Other
Comprehensive
Income (Loss) Components
|
|
Amount
Reclassified from
Accumulated
Other
Comprehensive Income (Loss)
|
|
|
Affected Line Item
in the Statement
Where Net
Income
is Presented
|
Unrealized gains and losses on available-for-sale securities
|
|
|
|
|
|
|
|
|
$
|
237
|
|
|
Net gains on securities
|
|
|
|
|
|
|
|
|
|
|
237
|
|
|
Total before tax
|
|
|
|
(81
|
)
|
|
Income tax (expense) benefit
|
|
|
|
|
|
|
|
|
|
$
|
156
|
|
|
Net of tax
|
|
|
|
|
|
|
|
40
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 9 ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) continued
A summary of the changes in accumulated other comprehensive income (loss) by component for the six
months ended June 30, 2013 is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gains and
Losses on
Cash Flow
Hedges
|
|
|
Unrealized Gains and
Losses on Available-
for-Sale
Securities
|
|
|
Total
|
|
Beginning balance
|
|
$
|
(1,309
|
)
|
|
$
|
3,673
|
|
|
$
|
2,364
|
|
Other comprehensive income (loss) before reclassification
|
|
|
317
|
|
|
|
(3,165
|
)
|
|
|
(2,848
|
)
|
Amounts reclassified from accumulated other comprehensive income
|
|
|
|
|
|
|
(323
|
)
|
|
|
(323
|
)
|
Net current period other comprehensive income (loss)
|
|
|
317
|
|
|
|
(3,488
|
)
|
|
|
(3,171
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance
|
|
$
|
(992
|
)
|
|
$
|
185
|
|
|
$
|
(807
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A summary of the reclassifications out of accumulated other comprehensive income (loss) for the six months ended
June 30, 2013 is as follows:
|
|
|
|
|
|
|
Details about
Accumulated Other
Comprehensive
Income (Loss) Components
|
|
Amount
Reclassified from
Accumulated Other
Comprehensive Income (Loss)
|
|
|
Affected
Line Item in the Statement
Where Net Income is
Presented
|
Unrealized gains and losses on available-for-sale securities
|
|
|
|
|
|
|
|
|
$
|
490
|
|
|
Net gains on securities
|
|
|
|
|
|
|
|
|
|
|
490
|
|
|
Total before tax
|
|
|
|
(167
|
)
|
|
Income tax (expense) benefit
|
|
|
|
|
|
|
|
|
|
$
|
323
|
|
|
Net of tax
|
|
|
|
|
|
|
|
41
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued
LAPORTE BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands, except per share data)
NOTE 10 OFFSETTING FINANCIAL ASSETS AND LIABILITIES
On January 1, 2013, the Company adopted changes issued by the FASB to the disclosure of offsetting assets and liabilities. These
changes require an entity to disclose both gross information and net information about both instruments and transactions eligible for offset in the consolidated balance sheet and instruments and transactions subject to an agreement similar to a
master netting arrangement. The enhanced disclosures will enable users of an entitys financial statements to understand and evaluate the effect or potential effect of master netting arrangements on an entitys financial position,
including the effect of rights of setoff associated with certain financial instruments and derivative instruments. Other than the additional disclosure requirements, the adoption of these changes had no impact on the Consolidated Financial
Statements.
June 30, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Amounts Not Offset in the
Consolidated Balance Sheet
|
|
|
|
Gross
Amounts of
Recognized
Liabilities
|
|
|
Gross Amounts
Offset in the
Consolidated
Balance Sheet
|
|
|
Net
Amounts
of
Liabilities
Presented
in the
Consolidated
Balance Sheet
|
|
|
Financial
Instruments
|
|
|
Cash Collateral
Pledged
|
|
|
Net
Amount
|
|
Description:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives
|
|
$
|
1,503
|
|
|
$
|
|
|
|
$
|
1,503
|
|
|
$
|
(2,223
|
)
|
|
$
|
(220
|
)
|
|
$
|
(940
|
)
|
Repurchase agreements
|
|
|
325
|
|
|
|
|
|
|
|
325
|
|
|
|
(325
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
1,828
|
|
|
$
|
|
|
|
$
|
1,828
|
|
|
$
|
(2,548
|
)
|
|
$
|
(220
|
)
|
|
$
|
(940
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Amounts Not Offset in the
Consolidated Balance Sheet
|
|
|
|
Gross
Amounts of
Recognized
Liabilities
|
|
|
Gross Amounts
Offset in the
Consolidated
Balance Sheet
|
|
|
Net
Amounts
of
Liabilities
Presented
in the
Consolidated
Balance Sheet
|
|
|
Financial
Instruments
|
|
|
Cash Collateral
Pledged
|
|
|
Net
Amount
|
|
Description:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives
|
|
$
|
1,984
|
|
|
$
|
|
|
|
$
|
1,984
|
|
|
$
|
(2,586
|
)
|
|
$
|
(220
|
)
|
|
$
|
(822
|
)
|
Repurchase agreements
|
|
|
517
|
|
|
|
|
|
|
|
517
|
|
|
|
(517
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
2,501
|
|
|
$
|
|
|
|
$
|
2,501
|
|
|
$
|
(3,103
|
)
|
|
$
|
(220
|
)
|
|
$
|
(822
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
If an event of default occurs causing an early termination of an interest rate swap derivative, an early termination
amount payable to one party by the other party may be reduced by set-off against any other amount payable by the one party to the other party. If a default in performance of any obligation of a repurchase agreement occurs, each party will set-off
property held in respect of transactions against obligations owing in respect of any other transactions.
42
PART I FINANCIAL INFORMATION