T
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
£
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Hawaii
|
99-0212597
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification No.)
|
Large accelerated filer £
|
Accelerated filer £
|
Non-accelerated filer £
|
Smaller reporting company T
|
Part I.
|
Financial Information
|
Item I.
|
Financial Statements (Unaudited)
|
Consolidated Balance Sheets
March 31, 2011 and December 31, 2010
|
|
Consolidated Statements of Operations
Three months ended March 31, 2011 and 2010
|
|
Consolidated Statements of Cash Flows
Three months ended March 31, 2011 and 2010
|
|
Notes to Consolidated Financial Statements
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4.
|
Controls and Procedures
|
Part II.
|
Other Information
|
Item 1. | Legal Proceedings |
Item 1A.
|
Risk Factors
|
Item 6.
|
Exhibits
|
Signatures
|
|
Exhibit Index
|
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
|
|||||||
CONSOLIDATED BALANCE SHEETS
|
|||||||
(Unaudited)
|
|||||||
March 31,
|
December 31,
|
||||||
2011
|
2010
|
||||||
(Dollars in thousands)
|
|||||||
Assets
|
|||||||
Cash and due from banks
|
$ | 63,687 | $ | 61,725 | |||
Interest-bearing deposits in other banks
|
537,495 | 729,014 | |||||
Investment securities:
|
|||||||
Available for sale, at fair value
|
1,076,181 | 702,517 | |||||
Held to maturity (fair value of $2,009 at March 31, 2011 and $2,913 at December 31, 2010)
|
1,943 | 2,828 | |||||
Total investment securities
|
1,078,124 | 705,345 | |||||
Loans held for sale
|
54,093 | 69,748 | |||||
Loans and leases
|
2,067,302 | 2,169,444 | |||||
Less allowance for loan and lease losses
|
178,010 | 192,854 | |||||
Net loans and leases
|
1,889,292 | 1,976,590 | |||||
Premises and equipment, net
|
55,977 | 57,390 | |||||
Accrued interest receivable
|
11,461 | 11,279 | |||||
Investment in unconsolidated subsidiaries
|
13,950 | 14,856 | |||||
Other real estate
|
56,601 | 57,507 | |||||
Other intangible assets
|
44,498 | 44,639 | |||||
Bank-owned life insurance
|
142,000 | 142,296 | |||||
Federal Home Loan Bank stock
|
48,797 | 48,797 | |||||
Income tax receivable
|
2,353 | 2,223 | |||||
Other assets
|
15,070 | 16,642 | |||||
Total assets
|
$ | 4,013,398 | $ | 3,938,051 | |||
Liabilities and Equity
|
|||||||
Deposits:
|
|||||||
Noninterest-bearing demand
|
$ | 678,007 | $ | 611,744 | |||
Interest-bearing demand
|
528,533 | 639,548 | |||||
Savings and money market
|
1,120,272 | 1,089,813 | |||||
Time
|
818,651 | 791,842 | |||||
Total deposits
|
3,145,463 | 3,132,947 | |||||
Short-term borrowings
|
1,423 | 202,480 | |||||
Long-term debt
|
409,299 | 459,803 | |||||
Other liabilities
|
62,231 | 66,766 | |||||
Total liabilities
|
3,618,416 | 3,861,996 | |||||
Equity:
|
|||||||
Preferred stock, no par value, authorized 1,000,000 shares; issued and outstanding
|
|||||||
none at March 31, 2011 and 135,000 shares at December 31, 2010
|
- | 130,458 | |||||
Common stock, no par value, authorized 185,000,000 shares, issued and outstanding
|
|||||||
39,649,052 shares at March 31, 2011 and 1,527,000 shares at December 31, 2010
|
764,463 | 404,167 | |||||
Surplus
|
63,436 | 63,308 | |||||
Accumulated deficit
|
(428,780 | ) | (517,316 | ) | |||
Accumulated other comprehensive loss
|
(14,135 | ) | (14,565 | ) | |||
Total shareholders' equity
|
384,984 | 66,052 | |||||
Non-controlling interest
|
9,998 | 10,003 | |||||
Total equity
|
394,982 | 76,055 | |||||
Total liabilities and equity
|
$ | 4,013,398 | $ | 3,938,051 | |||
See accompanying notes to consolidated financial statements.
|
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
|
|||||||
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|||||||
(Unaudited)
|
|||||||
Three Months Ended March 31,
|
|||||||
(Amounts in thousands, except per share data)
|
2011
|
2010
|
|||||
Interest income:
|
|||||||
Interest and fees on loans and leases
|
$ | 28,566 | $ | 37,312 | |||
Interest and dividends on investment securities:
|
|||||||
Taxable interest
|
5,221 | 8,101 | |||||
Tax-exempt interest
|
184 | 515 | |||||
Dividends
|
3 | 3 | |||||
Interest on deposits in other banks
|
389 | 330 | |||||
Total interest income
|
34,363 | 46,261 | |||||
Interest expense:
|
|||||||
Interest on deposits:
|
|||||||
Demand
|
132 | 258 | |||||
Savings and money market
|
732 | 1,649 | |||||
Time
|
2,377 | 3,981 | |||||
Interest on short-term borrowings
|
204 | 189 | |||||
Interest on long-term debt
|
2,717 | 5,115 | |||||
Total interest expense
|
6,162 | 11,192 | |||||
Net interest income
|
28,201 | 35,069 | |||||
Provision (credit) for loan and lease losses
|
(1,575 | ) | 58,837 | ||||
Net interest income (loss) after provision for loan and lease losses
|
29,776 | (23,768 | ) | ||||
Other operating income:
|
|||||||
Service charges on deposit accounts
|
2,614 | 3,207 | |||||
Other service charges and fees
|
4,058 | 3,485 | |||||
Income from fiduciary activities
|
761 | 811 | |||||
Equity in earnings of unconsolidated subsidiaries
|
127 | 29 | |||||
Fees on foreign exchange
|
137 | 156 | |||||
Investment securities gains
|
- | 831 | |||||
Loan placement fees
|
102 | 85 | |||||
Net gain on sales of residential loans
|
2,198 | 1,945 | |||||
Income from bank-owned life insurance
|
1,190 | 1,184 | |||||
Other
|
1,313 | 1,031 | |||||
Total other operating income
|
12,500 | 12,764 | |||||
Other operating expense:
|
|||||||
Salaries and employee benefits
|
15,033 | 14,836 | |||||
Net occupancy
|
3,358 | 3,297 | |||||
Equipment
|
1,130 | 1,477 | |||||
Amortization of other intangible assets
|
1,547 | 1,408 | |||||
Communication expense
|
881 | 1,212 | |||||
Legal and professional services
|
2,460 | 5,650 | |||||
Computer software expense
|
883 | 903 | |||||
Advertising expense
|
836 | 839 | |||||
Goodwill impairment
|
- | 102,689 | |||||
Foreclosed asset expense
|
2,242 | 5,532 | |||||
Write down of assets
|
1,565 | 774 | |||||
Other
|
7,702 | 10,598 | |||||
Total other operating expense
|
37,637 | 149,215 | |||||
Income (loss) before income taxes
|
4,639 | (160,219 | ) | ||||
Income tax expense
|
- | - | |||||
Net income (loss)
|
4,639 | (160,219 | ) | ||||
Preferred stock dividends, accretion of discount and conversion of preferred stock to common stock
|
(83,897 | ) | 2,074 | ||||
Net income (loss) available to common shareholders
|
$ | 88,536 | $ | (162,293 | ) | ||
Per common share data:
|
|||||||
Basic earnings (loss) per share
|
$ | 4.59 | $ | (107.23 | ) | ||
Diluted earnings (loss) per share
|
4.58 | (107.23 | ) | ||||
Shares used in computation:
|
|||||||
Basic shares
|
19,301 | 1,513 | |||||
Diluted shares
|
19,321 | 1,513 | |||||
See accompanying notes to consolidated financial statements.
|
|||||||
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
|
|||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|||||||
(Unaudited)
|
|||||||
Three Months Ended March 31,
|
|||||||
2011
|
2010
|
||||||
(Dollars in thousands)
|
|||||||
Cash flows from operating activities:
|
|||||||
Net income (loss)
|
$ | 4,639 | $ | (160,219 | ) | ||
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|||||||
Provision (credit) for loan and lease losses
|
(1,575 | ) | 58,837 | ||||
Depreciation and amortization
|
1,757 | 2,062 | |||||
Goodwill impairment
|
- | 102,689 | |||||
Write down of assets
|
1,565 | 774 | |||||
Write down of other real estate, net of gain on sale
|
534 | 5,532 | |||||
Amortization of other intangible assets
|
1,547 | 1,408 | |||||
Net amortization of investment securities
|
1,433 | 812 | |||||
Share-based compensation
|
128 | 284 | |||||
Net gain on investment securities
|
- | (831 | ) | ||||
Deferred income tax expense
|
- | 2,439 | |||||
Net gain on sales of residential loans
|
(2,198 | ) | (1,945 | ) | |||
Proceeds from sales of loans held for sale
|
196,043 | 262,534 | |||||
Originations of loans held for sale
|
(179,824 | ) | (216,694 | ) | |||
Equity in earnings of unconsolidated subsidiaries
|
(127 | ) | (29 | ) | |||
Increase in cash surrender value of bank-owned life insurance
|
(1,190 | ) | (1,030 | ) | |||
Decrease (increase) in income tax receivable
|
(130 | ) | 862 | ||||
Net change in other assets and liabilities
|
1,843 | 3,441 | |||||
Net cash provided by operating activities
|
24,445 | 60,926 | |||||
Cash flows from investing activities:
|
|||||||
Proceeds from maturities of and calls on investment securities available for sale
|
114,515 | 131,753 | |||||
Proceeds from sales of investment securities available for sale
|
- | 439,436 | |||||
Purchases of investment securities available for sale
|
(488,616 | ) | (98,068 | ) | |||
Proceeds from maturities of and calls on investment securities held to maturity
|
880 | 461 | |||||
Net loan principal repayments
|
82,376 | 71,082 | |||||
Proceeds from sales of loans originated for investment
|
- | 37,950 | |||||
Proceeds from sale of other real estate
|
6,948 | 7,664 | |||||
Proceeds from bank-owned life insurance
|
158 | - | |||||
Purchases of premises and equipment
|
(344 | ) | (222 | ) | |||
Distributions from unconsolidated subsidiaries
|
523 | 710 | |||||
Contributions to unconsolidated subsidiaries
|
- | (227 | ) | ||||
Net cash provided by (used in) investing activities
|
(283,560 | ) | 590,539 | ||||
Cash flows from financing activities:
|
|||||||
Net increase (decrease) in deposits
|
12,516 | (233,878 | ) | ||||
Proceeds from long-term debt
|
- | 50,000 | |||||
Repayments of long-term debt
|
(50,218 | ) | (50,284 | ) | |||
Net decrease in short-term borrowings
|
(201,057 | ) | (40,355 | ) | |||
Net proceeds from issuance of common stock and stock option exercises
|
308,317 | - | |||||
Other, net
|
- | 37 | |||||
Net cash provided by (used in) financing activities
|
69,558 | (274,480 | ) | ||||
Net increase (decrease) in cash and cash equivalents
|
(189,557 | ) | 376,985 | ||||
Cash and cash equivalents at beginning of period
|
790,739 | 488,367 | |||||
Cash and cash equivalents at end of period
|
$ | 601,182 | $ | 865,352 | |||
Supplemental disclosure of cash flow information:
|
|||||||
Cash paid during the period for:
|
|||||||
Interest
|
$ | 6,365 | $ | 11,276 | |||
Income taxes
|
7 | - | |||||
Cash received during the period for:
|
|||||||
Income taxes
|
- | 1,068 | |||||
Supplemental disclosure of noncash investing and financing activities:
|
|||||||
Net change in common stock held by directors' deferred compensation plan
|
$ | 16 | $ | 6 | |||
Net reclassification of loans to other real estate
|
6,575 | 17,364 | |||||
Net transfer of loans to loans held for sale
|
- | 17,724 | |||||
Dividends accrued on preferred stock
|
969 | 1,742 | |||||
Accretion of preferred stock discount
|
204 | 332 | |||||
Preferred stock and accrued unpaid dividends converted to common stock
|
142,988 | - | |||||
Common stock received in exchange for preferred stock and accrued unpaid dividends
|
56,201 | - | |||||
See accompanying notes to consolidated financial statements.
|
·
|
On February 18, 2011, we successfully completed a $325 million capital raise from accredited investors in a private placement (the “Private Placement”). Concurrently with the completion of the Private Placement, we exchanged our TARP preferred stock and accrued and unpaid dividends thereon for common stock (the “TARP Exchange”).
|
·
|
Significantly improved our tier 1 risk-based capital, total risk-based capital, and leverage capital ratios as of March 31, 2011 to 21.34%, 22.67%, and 12.64%, respectively, from 7.64%, 8.98%, and 4.42%, respectively, as of December 31, 2010. The Company’s capital ratios currently exceed the minimum levels previously required by the Consent Order and the minimum level required by the Bank MOU and are above the levels required for a “well-capitalized” regulatory designation.
|
·
|
We reported net income in the first quarter of 2011 of $4.6 million, compared to net losses in the first and fourth quarters of 2010 of $160.2 million and $2.1 million, respectively.
|
·
|
We reduced nonperforming assets by $18.0 million to $284.9 million at March 31, 2011 from $302.8 million at December 31, 2010 primarily through loan pay downs and charge-offs.
|
·
|
We reduced our construction and development loan portfolio (excluding owner-occupied loans) by approximately $41.7 million, or 13.9%, from $299.9 million at December 31, 2010. Construction and development loans (excluding owner-occupied loans) as a percentage of our total loan portfolio was 12.5% at March 31, 2011, compared to 13.8% at December 31, 2010.
|
·
|
We had an allowance for loan and lease losses as a percentage of total loans and leases of 8.61% at March 31, 2011, compared to 8.89% at December 31, 2010. In addition, we had an allowance for loan and lease losses as a percentage of nonperforming assets of 62.49% at March 31, 2011, compared to 63.69% at December 31, 2010.
|
·
|
We had cash and cash equivalents totaling $601.2 million at March 31, 2011, compared to $790.7 million at December 31, 2010.
|
·
|
We reduced total outstanding borrowings with the Federal Home Loan Bank of Seattle (the “FHLB”) to $301.0 million at March 31, 2011 from $551.3 million at December 31, 2010.
|
·
|
On May 9, 2011, we announced that our rights offering is fully subscribed. Total gross proceeds to us from the rights offering will be approximately $20 million.
|
Gross
|
Gross
|
|
||||||||||||
Amortized
|
unrealized
|
unrealized
|
Estimated
|
|||||||||||
cost
|
gains
|
losses
|
fair value
|
|||||||||||
(Dollars in thousands)
|
||||||||||||||
March 31, 2011
|
||||||||||||||
Available for Sale
|
||||||||||||||
U.S. Government sponsored entities debt securities
|
$ | 331,345 | $ | 249 | $ | (1,050 | ) | $ | 330,544 | |||||
States and political subdivisions
|
12,530 | - | - | 12,530 | ||||||||||
U.S. Government sponsored entities mortgage-backed securities
|
727,303 | 7,563 | (2,804 | ) | 732,062 | |||||||||
Non-agency collateralized mortgage obligations
|
17 | - | - | 17 | ||||||||||
Other
|
1,008 | 20 | - | 1,028 | ||||||||||
Total
|
$ | 1,072,203 | $ | 7,832 | $ | (3,854 | ) | $ | 1,076,181 | |||||
Held to Maturity
|
||||||||||||||
U.S. Government sponsored entities mortgage-backed securities
|
$ | 1,943 | $ | 66 | $ | - | $ | 2,009 | ||||||
December 31, 2010
|
||||||||||||||
Available for Sale
|
||||||||||||||
U.S. Government sponsored entities debt securities
|
$ | 202,192 | $ | 306 | $ | (643 | ) | $ | 201,855 | |||||
States and political subdivisions
|
12,619 | - | - | 12,619 | ||||||||||
U.S. Government sponsored entities mortgage-backed securities
|
483,647 | 6,653 | (3,336 | ) | 486,964 | |||||||||
Non-agency collateralized mortgage obligations
|
17 | - | - | 17 | ||||||||||
Other
|
1,057 | 5 | - | 1,062 | ||||||||||
Total
|
$ | 699,532 | $ | 6,964 | $ | (3,979 | ) | $ | 702,517 | |||||
Held to Maturity
|
||||||||||||||
States and political subdivisions
|
$ | 500 | $ | 4 | $ | - | $ | 504 | ||||||
U.S. Government sponsored entities mortgage-backed securities
|
2,328 | 81 | - | 2,409 | ||||||||||
Total
|
$ | 2,828 | $ | 85 | $ | - | $ | 2,913 |
March 31, 2011
|
||||||
Amortized
Cost
|
Estimated
Fair Value
|
|||||
(Dollars in thousands)
|
||||||
Available for Sale
|
||||||
Due after one year through five years
|
$ | 331,345 | $ | 330,544 | ||
Due after five years through ten years
|
7,270 | 7,270 | ||||
Due after ten years
|
5,260 | 5,260 | ||||
Mortage-backed securities
|
727,303 | 732,062 | ||||
Other
|
1,025 | 1,045 | ||||
Total
|
$ | 1,072,203 | $ | 1,076,181 | ||
Held to Maturity
|
||||||
Mortage-backed securities
|
$ | 1,943 | $ | 2,009 |
Less than 12 months
|
12 months or longer
|
Total
|
||||||||||||||||||||||
Unrealized
|
Unrealized
|
Unrealized
|
||||||||||||||||||||||
Description of Securities
|
Fair Value
|
Losses
|
Fair Value
|
Losses
|
Fair Value
|
Losses
|
||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||
At March 31, 2011:
|
||||||||||||||||||||||||
U.S. Government sponsored entities
|
||||||||||||||||||||||||
debt securities
|
$ | 210,122 | $ | (1,050 | ) | $ | - | $ | - | $ | 210,122 | $ | (1,050 | ) | ||||||||||
U.S. Government sponsored entities
|
||||||||||||||||||||||||
mortgage-backed securities
|
248,194 | (2,804 | ) | - | - | 248,194 | (2,804 | ) | ||||||||||||||||
Total temporarily impaired securities
|
$ | 458,316 | $ | (3,854 | ) | $ | - | $ | - | $ | 458,316 | $ | (3,854 | ) | ||||||||||
At December 31, 2010:
|
||||||||||||||||||||||||
U.S. Government sponsored entities
|
||||||||||||||||||||||||
debt securities
|
$ | 83,973 | $ | (643 | ) | $ | - | $ | - | $ | 83,973 | $ | (643 | ) | ||||||||||
U.S. Government sponsored entities
|
||||||||||||||||||||||||
mortgage-backed securities
|
194,756 | (3,336 | ) | - | - | 194,756 | (3,336 | ) | ||||||||||||||||
Non-agency collateralized mortgage obligations
|
17 | - | - | - | 17 | - | ||||||||||||||||||
Total temporarily impaired securities
|
$ | 278,746 | $ | (3,979 | ) | $ | - | $ | - | $ | 278,746 | $ | (3,979 | ) |
·
|
The length of time and the extent to which fair value has been less than the amortized cost basis;
|
·
|
Adverse conditions specifically related to the security, an industry, or a geographic area;
|
·
|
The historical and implied volatility of the fair value of the security;
|
·
|
The payment structure of the debt security and the likelihood of the issuer being able to make payments;
|
·
|
Failure of the issuer to make scheduled interest or principal payments;
|
·
|
Any rating changes by a rating agency; and
|
·
|
Recoveries or additional decline in fair value subsequent to the balance sheet date.
|
March 31,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
(Dollars in thousands)
|
||||||||
Commercial, financial and agricultural
|
$ | 183,079 | $ | 207,900 | ||||
Real estate:
|
||||||||
Construction
|
272,739 | 314,530 | ||||||
Mortgage - residential
|
741,057 | 747,870 | ||||||
Mortgage - commercial
|
737,249 | 761,710 | ||||||
Consumer
|
111,172 | 112,950 | ||||||
Leases
|
25,281 | 28,163 | ||||||
2,070,577 | 2,173,123 | |||||||
Unearned income
|
(3,275 | ) | (3,679 | ) | ||||
Total loans and leases
|
$ | 2,067,302 | $ | 2,169,444 |
Commercial,
|
Real estate
|
||||||||||||||||||||
financial & agricultural
|
Construction
|
Mortgage -
residential
|
Mortgage - commercial
|
Consumer
|
Leases
|
Total
|
|||||||||||||||
(Dollars in thousands)
|
|||||||||||||||||||||
Allowance for loan and lease losses:
|
|||||||||||||||||||||
Ending balance attributable to loans:
|
|||||||||||||||||||||
Individually evaluated for impairment
|
$ | 94 | $ | 10,015 | $ | 56 | $ | 162 | $ | - | $ | - | $ | 10,327 | |||||||
Collectively evaluated for impairment
|
11,006 | 49,085 | 30,744 | 68,838 | 2,500 | 1,500 | 163,673 | ||||||||||||||
11,100 | 59,100 | 30,800 | 69,000 | 2,500 | 1,500 | 174,000 | |||||||||||||||
Unallocated
|
4,010 | ||||||||||||||||||||
Total ending balance
|
$ | 11,100 | $ | 59,100 | $ | 30,800 | $ | 69,000 | $ | 2,500 | $ | 1,500 | $ | 178,010 | |||||||
Loans and leases:
|
|||||||||||||||||||||
Individually evaluated for impairment
|
$ | 447 | $ | 133,645 | $ | 59,582 | $ | 15,577 | $ | - | $ | - | $ | 209,251 | |||||||
Collectively evaluated for impairment
|
182,632 | 139,094 | 681,475 | 721,672 | 111,172 | 25,281 | 1,861,326 | ||||||||||||||
183,079 | 272,739 | 741,057 | 737,249 | 111,172 | 25,281 | 2,070,577 | |||||||||||||||
Unearned income
|
(3,275 | ) | |||||||||||||||||||
Total ending balance
|
$ | 183,079 | $ | 272,739 | $ | 741,057 | $ | 737,249 | $ | 111,172 | $ | 25,281 | $ | 2,067,302 |
Unpaid Principal Balance
|
Recorded Investment
|
Allowance
Allocated
|
||||||||
(Dollars in thousands)
|
||||||||||
March 31, 2011
|
||||||||||
With no related allowance recorded:
|
||||||||||
Real estate:
|
||||||||||
Construction
|
$ | 130,530 | $ | 83,141 | $ | - | ||||
Mortgage - residential
|
67,439 | 58,782 | - | |||||||
Mortgage - commercial
|
13,578 | 13,257 | - | |||||||
With an allowance recorded:
|
||||||||||
Commercial, financial & agricultural
|
1,146 | 447 | 94 | |||||||
Real estate:
|
||||||||||
Construction
|
86,673 | 50,504 | 10,015 | |||||||
Mortgage - residential
|
1,263 | 800 | 56 | |||||||
Mortgage - commercial
|
2,853 | 2,320 | 162 | |||||||
Total
|
$ | 303,482 | $ | 209,251 | $ | 10,327 | ||||
December 31, 2010
|
||||||||||
With no related allowance recorded:
|
||||||||||
Real estate:
|
||||||||||
Construction
|
$ | 112,675 | $ | 85,571 | $ | - | ||||
Mortgage - residential
|
66,203 | 58,333 | - | |||||||
Mortgage - commercial
|
10,917 | 10,917 | - | |||||||
With an allowance recorded:
|
||||||||||
Commercial, financial & agricultural
|
1,184 | 485 | 81 | |||||||
Real estate:
|
||||||||||
Construction
|
104,429 | 59,384 | 18,197 | |||||||
Mortgage - residential
|
3,681 | 3,256 | 89 | |||||||
Mortgage - commercial
|
7,746 | 7,088 | 1,158 | |||||||
Total
|
$ | 306,835 | $ | 225,034 | $ | 19,525 |
Nonaccrual
|
Accruing loans
delinquent for
90 days or more
|
|||||
(Dollars in thousands)
|
||||||
March 31, 2011
|
||||||
Commercial, financial & agricultural
|
$ | 805 | $ | - | ||
Real estate:
|
||||||
Construction
|
167,541 | - | ||||
Mortgage - residential
|
47,859 | 427 | ||||
Mortgage - commercial
|
12,046 | - | ||||
Consumer
|
- | 13 | ||||
Leases
|
- | 66 | ||||
Total
|
$ | 228,251 | $ | 506 | ||
December 31, 2010
|
||||||
Commercial, financial & agricultural
|
$ | 982 | $ | - | ||
Real estate:
|
||||||
Construction
|
182,073 | 6,550 | ||||
Mortgage - residential
|
47,560 | 1,800 | ||||
Mortgage - commercial
|
14,464 | - | ||||
Consumer
|
225 | 181 | ||||
Total
|
$ | 245,304 | $ | 8,531 |
30 - 59 Days
Past Due
|
60 - 89 Days
Past Due
|
Greater than 90
Days Past Due
|
Nonaccrual
Loans
|
Total
Past Due
|
Loans & Leases
Not Past Due
|
Total
|
||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
March 31, 2011
|
||||||||||||||||||||
Commercial, financial & agricultural
|
$ | 47 | $ | 129 | $ | - | $ | 805 | $ | 981 | $ | 182,109 | $ | 183,090 | ||||||
Real estate:
|
||||||||||||||||||||
Construction
|
199 | - | - | 167,541 | 167,740 | 104,589 | 272,329 | |||||||||||||
Mortgage - residential
|
8,100 | 1,053 | 427 | 47,859 | 57,439 | 682,133 | 739,572 | |||||||||||||
Mortgage - commercial
|
1,262 | 3,155 | - | 12,046 | 16,463 | 719,395 | 735,858 | |||||||||||||
Consumer
|
445 | 333 | 13 | - | 791 | 110,381 | 111,172 | |||||||||||||
Leases
|
312 | - | 66 | - | 378 | 24,903 | 25,281 | |||||||||||||
Total
|
$ | 10,365 | $ | 4,670 | $ | 506 | $ | 228,251 | $ | 243,792 | $ | 1,823,510 | $ | 2,067,302 | ||||||
December 31, 2010
|
||||||||||||||||||||
Commercial, financial & agricultural
|
$ | 495 | $ | 252 | $ | - | $ | 982 | $ | 1,729 | $ | 206,251 | $ | 207,980 | ||||||
Real estate:
|
||||||||||||||||||||
Construction
|
12,551 | 118 | 6,550 | 182,073 | 201,292 | 112,493 | 313,785 | |||||||||||||
Mortgage - residential
|
4,183 | 7,494 | 1,800 | 47,560 | 61,037 | 685,224 | 746,261 | |||||||||||||
Mortgage - commercial
|
273 | 3,169 | - | 14,464 | 17,906 | 742,400 | 760,306 | |||||||||||||
Consumer
|
620 | 444 | 181 | 225 | 1,470 | 111,479 | 112,949 | |||||||||||||
Leases
|
100 | - | - | - | 100 | 28,063 | 28,163 | |||||||||||||
Total
|
$ | 18,222 | $ | 11,477 | $ | 8,531 | $ | 245,304 | $ | 283,534 | $ | 1,885,910 | $ | 2,169,444 |
Pass
|
Special
Mention
|
Substandard
|
Doubtful
|
Loss
|
Not Rated
|
Unearned
Income
|
Total
|
||||||||||||||||
(Dollars in thousands)
|
|||||||||||||||||||||||
March 31, 2011
|
|||||||||||||||||||||||
Commercial, financial
|
|||||||||||||||||||||||
& agricultural
|
$ | 101,385 | $ | 14,484 | $ | 13,552 | $ | - | $ | - | $ | 53,658 | $ | (11 | ) | $ | 183,090 | ||||||
Real estate:
|
|||||||||||||||||||||||
Construction
|
33,644 | 31,589 | 201,396 | - | - | 6,110 | 410 | 272,329 | |||||||||||||||
Mortgage - residential
|
75,450 | 12,889 | 54,143 | - | - | 598,575 | 1,485 | 739,572 | |||||||||||||||
Mortgage - commercial
|
543,717 | 71,048 | 86,724 | - | - | 35,760 | 1,391 | 735,858 | |||||||||||||||
Consumer
|
4,768 | - | 306 | - | - | 106,098 | - | 111,172 | |||||||||||||||
Leases
|
19,355 | 3,800 | 2,126 | - | - | - | - | 25,281 | |||||||||||||||
Total
|
$ | 778,319 | $ | 133,810 | $ | 358,247 | $ | - | $ | - | $ | 800,201 | $ | 3,275 | $ | 2,067,302 | |||||||
December 31, 2010
|
|||||||||||||||||||||||
Commercial, financial
|
|||||||||||||||||||||||
& agricultural
|
$ | 109,619 | $ | 22,529 | $ | 19,370 | $ | - | $ | - | $ | 56,382 | $ | (80 | ) | $ | 207,980 | ||||||
Real estate:
|
|||||||||||||||||||||||
Construction
|
44,488 | 41,330 | 215,187 | 5,789 | - | 7,736 | 745 | 313,785 | |||||||||||||||
Mortgage - residential
|
70,747 | 17,475 | 55,533 | - | - | 604,115 | 1,609 | 746,261 | |||||||||||||||
Mortgage - commercial
|
557,511 | 67,639 | 97,871 | 2,883 | - | 35,806 | 1,404 | 760,306 | |||||||||||||||
Consumer
|
5,778 | 307 | 769 | - | 14 | 106,082 | 1 | 112,949 | |||||||||||||||
Leases
|
21,761 | 4,039 | 2,363 | - | - | - | - | 28,163 | |||||||||||||||
Total
|
$ | 809,904 | $ | 153,319 | $ | 391,093 | $ | 8,672 | $ | 14 | $ | 810,121 | $ | 3,679 | $ | 2,169,444 |
Three Months Ended
|
||||||||
March 31,
|
||||||||
2011
|
2010
|
|||||||
(Dollars in thousands)
|
||||||||
Balance, beginning of period
|
$ | 192,854 | $ | 205,279 | ||||
Provision (credit) for loan and lease losses
|
(1,575 | ) | 58,837 | |||||
191,279 | 264,116 | |||||||
Charge-offs
|
(18,131 | ) | (59,968 | ) | ||||
Recoveries
|
4,862 | 7,498 | ||||||
Net charge-offs
|
(13,269 | ) | (52,470 | ) | ||||
Balance, end of period
|
$ | 178,010 | $ | 211,646 |
Commercial,
|
Real estate
|
|||||||||||||||||||||||
financial &
|
Mortgage -
|
Mortgage -
|
||||||||||||||||||||||
agricultural
|
Construction
|
residential
|
commercial
|
Consumer
|
Leases
|
Unallocated
|
Total
|
|||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||
Beginning balance
|
$ | 13,400 | $ | 76,600 | $ | 31,800 | $ | 64,300 | $ | 3,200 | $ | 1,600 | $ | 1,954 | $ | 192,854 | ||||||||
Provision (credit) for loan | ||||||||||||||||||||||||
and lease losses
|
(1,326 | ) | (7,008 | ) | 336 | 4,887 | (420 | ) | (100 | ) | 2,056 | (1,575 | ) | |||||||||||
12,074 | 69,592 | 32,136 | 69,187 | 2,780 | 1,500 | 4,010 | 191,279 | |||||||||||||||||
Charge-offs
|
(1,406 | ) | (13,858 | ) | (2,036 | ) | (226 | ) | (605 | ) | - | - | (18,131 | ) | ||||||||||
Recoveries
|
432 | 3,366 | 700 | 39 | 325 | - | - | 4,862 | ||||||||||||||||
Net charge-offs
|
(974 | ) | (10,492 | ) | (1,336 | ) | (187 | ) | (280 | ) | - | - | (13,269 | ) | ||||||||||
Ending balance
|
$ | 11,100 | $ | 59,100 | $ | 30,800 | $ | 69,000 | $ | 2,500 | $ | 1,500 | $ | 4,010 | $ | 178,010 |
Core
|
Mortgage
|
||||||||||||||||||
Deposit
|
Servicing
|
Customer
|
Non-Compete
|
||||||||||||||||
Premium
|
Rights
|
Relationships
|
Agreements
|
Total
|
|||||||||||||||
(Dollars in thousands)
|
|||||||||||||||||||
Balance, beginning of period
|
$ | 20,727 | $ | 22,712 | $ | 1,050 | $ | 150 | $ | 44,639 | |||||||||
Additions
|
- | 1,406 | - | - | 1,406 | ||||||||||||||
Amortization
|
(669 | ) | (828 | ) | (35 | ) | (15 | ) | (1,547 | ) | |||||||||
Balance, end of period
|
$ | 20,058 | $ | 23,290 | $ | 1,015 | $ | 135 | $ | 44,498 |
Three Months Ended March 31,
|
|||||||
2011
|
2010
|
||||||
(Dollars in thousands)
|
|||||||
Fair market value, beginning of period
|
$ | 23,709 | $ | 23,019 | |||
Fair market value, end of period
|
24,316 | 22,897 | |||||
Weighted average discount rate
|
8.5 | % | 8.5 | % | |||
Weighted average prepayment speed assumption
|
14.2 | 13.2 |
March 31, 2011
|
December 31, 2010
|
|||||||||||||||||||||
Gross
|
Gross
|
|||||||||||||||||||||
Carrying
|
Accumulated
|
Carrying
|
Accumulated
|
|||||||||||||||||||
Value
|
Amortization
|
Net
|
Value
|
Amortization
|
Net
|
|||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||
Core deposit premium
|
$ | 44,642 | $ | (24,584 | ) | $ | 20,058 | $ | 44,642 | $ | (23,915 | ) | $ | 20,727 | ||||||||
Mortgage servicing rights
|
43,073 | (19,783 | ) | 23,290 | 41,667 | (18,955 | ) | 22,712 | ||||||||||||||
Customer relationships
|
1,400 | (385 | ) | 1,015 | 1,400 | (350 | ) | 1,050 | ||||||||||||||
Non-compete agreements
|
300 | (165 | ) | 135 | 300 | (150 | ) | 150 | ||||||||||||||
Total | $ | 89,415 | $ | (44,917 | ) | $ | 44,498 | $ | 88,009 | $ | (43,370 | ) | $ | 44,639 |
Estimated Amortization Expense
|
||||||||||||||||||
Mortgage
|
||||||||||||||||||
Core Deposit
|
Servicing
|
Customer
|
Non-Compete
|
|||||||||||||||
Premium
|
Rights
|
Relationships
|
Agreements
|
Total
|
||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||
2011 (remainder)
|
$ | 2,006 | $ | 2,160 | $ | 105 | $ | 45 | $ | 4,316 | ||||||||
2012
|
2,674 | 3,119 | 140 | 60 | 5,993 | |||||||||||||
2013
|
2,674 | 2,705 | 140 | 30 | 5,549 | |||||||||||||
2014
|
2,674 | 2,351 | 140 | - | 5,165 | |||||||||||||
2015
|
2,674 | 2,014 | 140 | - | 4,828 | |||||||||||||
2016
|
2,674 | 1,709 | 140 | - | 4,523 | |||||||||||||
Thereafter
|
4,682 | 9,232 | 210 | - | 14,124 | |||||||||||||
$ | 20,058 | $ | 23,290 | $ | 1,015 | $ | 135 | $ | 44,498 |
Asset Derivatives
|
Liability Derivatives
|
||||||||||||||||
Derivatives not designated
as hedging instruments
|
Balance Sheet
Location
|
Fair Value at
March 31, 2011
|
Fair Value at
December 31, 2010
|
Fair Value at
March 31, 2011
|
Fair Value at
December 31, 2010
|
||||||||||||
(Dollars in thousands)
|
|||||||||||||||||
Interest rate contracts
|
Other assets /
|
||||||||||||||||
other liabilities
|
$ | 230 | $ | 1,035 | $ | 251 | $ | 523 |
Derivatives in Cash Flow
Hedging Relationship
|
Amount of Gain
Recognized in AOCL
on Derivative
(Effective Portion)
|
Amount of Gain
Reclassified from
AOCL into Earnings
(Effective Portion)
|
Amount of Gain
Recognized in Earnings
on Derivative
(Ineffective Portion)
|
||||||||
(Dollars in thousands)
|
|||||||||||
Three Months Ended March 31, 2011
|
|||||||||||
Interest rate contracts
|
$ | - | $ | 1,116 | $ | - | |||||
Three Months Ended March 31, 2010
|
|||||||||||
Interest rate contracts
|
$ | - | $ | 1,890 | $ | - |
Derivatives not in Cash Flow
Hedging Relationship
|
Location of Gain Recognized
in Earnings on Derivatives
|
Amount of Gain Recognized in
Earnings on Derivatives
|
|||
(Dollars in thousands)
|
|||||
Three Months Ended March 31, 2011
|
|||||
Interest rate contracts
|
Other operating income
|
$ | 279 | ||
Three Months Ended March 31, 2010
|
|||||
Interest rate contracts
|
Other operating income
|
$ | 219 |
·
|
on February 2, 2011, we effected a one-for-twenty reverse stock split of our Common Stock (the “Reverse Stock Split”). Except as otherwise specified, the share and per share amounts for historical periods have been restated to give the effect to the Reverse Stock Split;
|
·
|
on February 18, 2011, we completed the $325 million Private Placement with investments from (1) affiliates of each of The Carlyle Group (“Carlyle”) and Anchorage Capital Group, L.L.C. (together with Carlyle, the “Lead Investors”) pursuant to investment agreements with each of the Lead Investors and (2) various other investors, including certain of our directors and officers, pursuant to subscription agreements with each of such investors; and
|
·
|
concurrently with the closing of the Private Placement, we completed the TARP Exchange of 135,000 shares of our Fixed Rate Cumulative Perpetual Preferred Stock, no par value per share and liquidation preference $1,000 per share, held by the United States Department of the Treasury (the “Treasury”), and accrued and unpaid dividends thereon for 5,620,117 common shares. We also amended the warrant held by the Treasury (the “Amended TARP Warrant”) to, among other things, reduce the exercise price from $255.40 per share to $10 per share. The warrant grants the Treasury the right to purchase 79,288 Common Shares, subject to adjustment.
|