SBSI 3.31.2013 10-Q
Table of Contents


 
 
 
 
 
UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 10-Q
(Mark One)
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2013

OR
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ____________
 
Commission file number 0-12247
SOUTHSIDE BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
TEXAS
 
75-1848732
(State or other jurisdiction of incorporation or organization)
 
(I.R.S. Employer Identification No.)
 
 
 
1201 S. Beckham, Tyler, Texas
 
75701
(Address of principal executive offices)
 
(Zip Code)
903-531-7111
(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  x    No  o
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes  x    No  o
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.  (Check one):

Large accelerated filer o
Accelerated filer x
Non-accelerated filer o
Smaller reporting company o
(Do not check if a smaller reporting company)
 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o  No x

The number of shares of the issuer's common stock, par value $1.25, outstanding as of April 30, 2013 was 17,842,463 shares.
 


TABLE OF CONTENTS
 
PART I.  FINANCIAL INFORMATION
 
PART II.  OTHER INFORMATION
 
EXHIBIT 31.1 – CERTIFICATION PURSUANT TO SECTION 302
 
EXHIBIT 31.2 – CERTIFICATION PURSUANT TO SECTION 302
 
EXHIBIT 32 – CERTIFICATION PURSUANT TO SECTION 906
 

Table of Contents


PART I.   FINANCIAL INFORMATION
ITEM 1.   FINANCIAL STATEMENTS
SOUTHSIDE BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in thousands, except share amounts)
 
March 31,
2013
 
December 31,
2012
ASSETS
 
 
 
Cash and due from banks
$
42,992

 
$
47,312

Interest earning deposits
12,126

 
103,318

Total cash and cash equivalents
55,118

 
150,630

Investment securities:
 

 
 

Available for sale, at estimated fair value
685,794

 
617,707

Held to maturity, at amortized cost
1,008

 
1,009

Mortgage-backed and related securities:
 

 
 

Available for sale, at estimated fair value
905,107

 
806,360

Held to maturity, at amortized cost
234,245

 
245,538

FHLB stock, at cost
25,415

 
27,889

Other investments, at cost
2,064

 
2,064

Loans held for sale
3,138

 
3,601

Loans:
 

 
 

Loans
1,281,647

 
1,262,977

Less:  Allowance for loan losses
(18,542
)
 
(20,585
)
Net Loans
1,263,105

 
1,242,392

Premises and equipment, net
49,985

 
50,075

Goodwill
22,034

 
22,034

Other intangible assets, net
283

 
324

Interest receivable
13,610

 
18,936

Deferred tax asset
6,148

 
4,120

Unsettled trades to sell securities
1,857

 
—

Other assets
43,186

 
44,724

TOTAL ASSETS
$
3,312,097

 
$
3,237,403

LIABILITIES AND SHAREHOLDERS’ EQUITY
 

 
 

Deposits:
 

 
 

Noninterest bearing
$
546,143

 
$
595,093

Interest bearing
1,791,094

 
1,756,804

Total deposits
2,337,237

 
2,351,897

Short-term obligations:
 

 
 

Federal funds purchased and repurchase agreements
857

 
984

FHLB advances
163,159

 
150,985

Other obligations
219

 
219

Total short-term obligations
164,235

 
152,188

Long-term obligations:
 

 
 

FHLB advances
389,804

 
369,097

Long-term debt
60,311

 
60,311

Total long-term obligations
450,115

 
429,408

Unsettled trades to purchase securities
71,757

 
10,047

Other liabilities
33,041

 
36,100

TOTAL LIABILITIES
3,056,385

 
2,979,640

 
 
 
 
Off-Balance-Sheet Arrangements, Commitments and Contingencies (Note 10)


 


 
 
 
 
Shareholders' equity:
 

 
 

Common stock ($1.25 par, 40,000,000 shares authorized, 20,312,101 shares issued in 2013 (including 851,404 shares declared on March 28, 2013 as a stock dividend) and 19,446,187 shares issued in 2012)
25,390

 
24,308

Paid-in capital
212,151

 
195,602

Retained earnings
58,720

 
70,708

Treasury stock (2,469,638 and 2,379,338 shares at cost)
(37,692
)
 
(35,793
)
Accumulated other comprehensive (loss) income
(2,857
)
 
2,938

TOTAL SHAREHOLDERS' EQUITY
255,712

 
257,763

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
$
3,312,097

 
$
3,237,403

The accompanying notes are an integral part of these consolidated financial statements.

1
Table of Contents


SOUTHSIDE BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(in thousands, except per share data)
 
Three Months Ended
 
March 31,
 
2013
 
2012
Interest income
 
 
 
Loans
$
17,665

 
$
16,770

Investment securities – taxable
364

 
31

Investment securities – tax-exempt
3,958

 
2,667

Mortgage-backed and related securities
3,936

 
12,163

FHLB stock and other investments
65

 
79

Other interest earning assets
43

 
6

Total interest income
26,031

 
31,716

Interest expense
 

 
 

Deposits
2,070

 
3,395

Short-term obligations
1,250

 
1,592

Long-term obligations
1,781

 
2,733

Total interest expense
5,101

 
7,720

Net interest income
20,930

 
23,996

Provision for loan losses
492

 
3,052

Net interest income after provision for loan losses
20,438

 
20,944

Noninterest income
 

 
 

Deposit services
3,753

 
3,748

Gain on sale of securities available for sale
4,365

 
5,972

Loss on sale of securities carried at fair value through income
—

 
(485
)



 


Total other-than-temporary impairment losses
(52
)
 
—

Portion of loss recognized in other comprehensive income (before taxes)
10

 
(141
)
Net impairment losses recognized in earnings
(42
)
 
(141
)



 


FHLB advance option impairment charges
—

 
(472
)
Gain on sale of loans
319

 
131

Trust income
720

 
677

Bank owned life insurance income
254

 
266

Other
891

 
1,111

Total noninterest income
10,260

 
10,807

Noninterest expense
 

 
 

Salaries and employee benefits
13,209

 
11,833

Occupancy expense
1,871

 
1,758

Advertising, travel & entertainment
641

 
604

ATM and debit card expense
381

 
279

Director fees
264

 
268

Supplies
250

 
159

Professional fees
640

 
691

Telephone and communications
451

 
406

FDIC insurance
421

 
470

Other
2,191

 
2,054

Total noninterest expense
20,319

 
18,522

 
 
 
 
Income before income tax expense
10,379

 
13,229

Provision for income tax expense
1,854

 
3,090

Net income
$
8,525

 
$
10,139

Earnings per common share – basic
$
0.48

 
$
0.56

Earnings per common share – diluted
$
0.48

 
$
0.56

Dividends paid per common share
$
0.20

 
$
0.18

The accompanying notes are an integral part of these consolidated financial statements.

2
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SOUTHSIDE BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
(in thousands)
 
Three Months Ended

March 31,
 
2013
 
2012
Net income
$
8,525

 
$
10,139

Other comprehensive income (loss):
 

 
 

Unrealized holding losses on available for sale securities during the period
(5,215
)
 
(4,886
)
Noncredit portion of other-than-temporary impairment losses on the AFS securities
(10
)
 
141

Reclassification adjustment for gain on sale of available for sale securities included in net income
(4,365
)
 
(5,972
)
Reclassification of other-than-temporary impairment charges on available for sale securities included in net income
42

 
141

Amortization of net actuarial loss, included in net periodic benefit cost
643

 
499

Amortization of prior service credit, included in net periodic benefit cost
(11
)
 
(10
)
Other comprehensive loss, before tax
(8,916
)
 
(10,087
)
Income tax benefit related to other items of comprehensive income
3,121

 
3,531

Other comprehensive loss, net of tax
(5,795
)
 
(6,556
)
Comprehensive income
$
2,730

 
$
3,583


The accompanying notes are an integral part of these consolidated financial statements.

3
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SOUTHSIDE BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(UNAUDITED)
(in thousands, except share and per share data)
 
Common
Stock
 
Paid In
Capital
 
Retained
Earnings
 
Treasury
Stock
 
Accumulated Other Comprehensive Income (Loss)
 
Total
Equity
Balance at December 31, 2011
$
23,146

 
$
176,791

 
$
72,646

 
$
(28,377
)
 
$
14,721

 
$
258,927

Net Income
 

 
 

 
10,139

 
 

 
 

 
10,139

Other comprehensive loss
 

 
 

 
 

 
 

 
(6,556
)
 
(6,556
)
Issuance of common stock (14,496 shares)
18

 
282

 
 

 
 

 
 

 
300

Stock compensation expense
 

 
39

 
 

 
 

 
 

 
39

Cash dividends paid on common stock ($0.18 per share)
 

 
 

 
(2,970
)
 
 

 
 

 
(2,970
)
Stock dividend declared
1,035

 
16,441

 
(17,476
)
 
 

 
 

 
—

Balance at March 31, 2012
$
24,199

 
$
193,553

 
$
62,339

 
$
(28,377
)
 
$
8,165

 
$
259,879

 
 
 
 
 
 
 
 
 
 
 
 
Balance at December 31, 2012
$
24,308

 
$
195,602

 
$
70,708

 
$
(35,793
)
 
$
2,938

 
$
257,763

Net Income
 

 
 

 
8,525

 
 

 
 

 
8,525

Other comprehensive loss
 

 
 

 
 

 
 

 
(5,795
)
 
(5,795
)
Issuance of common stock (14,361 shares)
18

 
288

 
 

 
 

 
 

 
306

Purchase of common stock (90,300 shares)
 
 
 
 
 
 
(1,899
)
 
 
 
(1,899
)
Stock compensation expense
 

 
207

 
 

 
 

 
 

 
207

Net issuance of common stock under employee stock plans


 
62

 
(62
)
 
 

 
 

 
—

Cash dividends paid on common stock ($0.20 per share)
 

 
 

 
(3,395
)
 
 

 
 

 
(3,395
)
Stock dividend declared
1,064

 
15,992

 
(17,056
)
 
 

 
 

 
—

Balance at March 31, 2013
$
25,390

 
$
212,151

 
$
58,720

 
$
(37,692
)
 
$
(2,857
)
 
$
255,712


The accompanying notes are an integral part of these consolidated financial statements.

4
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SOUTHSIDE BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
(UNAUDITED)
(in thousands)
 
Three Months Ended
 
March 31,
 
2013
 
2012
OPERATING ACTIVITIES:
 
 
 
Net income
$
8,525

 
$
10,139

Adjustments to reconcile net income to net cash provided by operations:
 

 
 

Depreciation
895

 
870

Amortization of premium
9,073

 
10,366

Accretion of discount and loan fees
(1,363
)
 
(1,129
)
Provision for loan losses
492

 
3,052

Stock compensation expense
207

 
39

Deferred tax expense (benefit)
1,093

 
(2,880
)
Loss on sale of securities carried at fair value through income
—

 
485

Gain on sale of securities available for sale
(4,365
)
 
(5,972
)
Net other-than-temporary impairment losses
42

 
141

FHLB advance option impairment charges
—

 
472

Gain on sale of other real estate owned
(21
)
 
—

Net change in:
 

 
 

Interest receivable
5,326

 
5,491

Other assets
840

 
991

Interest payable
(244
)
 
(289
)
Other liabilities
(2,183
)
 
3,227

Loans held for sale
463

 
1,650

Net cash provided by operating activities
18,780

 
26,653

 
 
 
 
INVESTING ACTIVITIES:
 

 
 

Securities held to maturity:
 

 
 

Purchases
(42,898
)
 
—

Maturities, calls and principal repayments
57,275

 
15,365

Securities available for sale:
 

 
 

Purchases
(448,973
)
 
(618,587
)
Sales
237,318

 
127,298

Maturities, calls and principal repayments
87,694

 
58,500

Securities carried at fair value through income:
 

 
 

Purchases
—

 
(57,606
)
Sales
—

 
664,224

Maturities, calls and principal repayments
—

 
24,872

Proceeds from redemption of FHLB stock
5,242

 
8,533

Purchases of FHLB stock and other investments
(2,768
)
 
(7,071
)
Net increase in loans
(21,524
)
 
(55,281
)
Purchases of premises and equipment
(805
)
 
(656
)
Proceeds from sales of other real estate owned
266

 
—

Proceeds from sales of repossessed assets
1,778

 
1,002

Net cash (used in) provided by investing activities
(127,395
)
 
160,593

 
 
 
 
(continued)
 
 
 

5
Table of Contents


SOUTHSIDE BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
(UNAUDITED) (continued)
(in thousands)
 
Three Months Ended
 
March 31,
 
2013
 
2012
FINANCING ACTIVITIES:
 
 
 
Net increase in demand and savings accounts
30,071

 
71,978

Net decrease in certificates of deposit
(44,734
)
 
(83,512
)
Net decrease in federal funds purchased and repurchase agreements
(127
)
 
(1,019
)
Proceeds from FHLB advances
942,466

 
2,964,409

Repayment of FHLB advances
(909,585
)
 
(3,133,462
)
Purchase of common stock
(1,899
)
 
—

Proceeds from the issuance of common stock
306

 
300

Cash dividends paid
(3,395
)
 
(2,970
)
Net cash provided by (used in) financing activities
13,103

 
(184,276
)
 
 
 
 
Net (decrease) increase in cash and cash equivalents
(95,512
)
 
2,970

Cash and cash equivalents at beginning of period
150,630

 
43,238

Cash and cash equivalents at end of period
$
55,118

 
$
46,208

 
 
 
 
 
 
 
 
 
 
 
 
SUPPLEMENTAL DISCLOSURES FOR CASH FLOW INFORMATION:
 

 
 


 
 
 
Interest paid
$
5,345

 
$
8,009

Income taxes paid
$
—

 
$
2,000

 
 
 
 
SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES:
 

 
 


 
 
 
Loans transferred to other repossessed assets and real estate through foreclosure
$
1,410

 
$
872

Adjustment to pension liability
$
(632
)
 
$
(489
)
Declaration of 5% stock dividend
$
17,056

 
$
17,476

Unsettled trades to purchase securities
$
(71,757
)
 
$
(96,171
)
Unsettled trades to sell securities
$
1,857

 
$
104,065


The accompanying notes are an integral part of these consolidated financial statements.


6
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SOUTHSIDE BANCSHARES, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS

1.    Basis of Presentation

In this report, the words “the Company,” “we,” “us,” and “our” refer to the combined entities of Southside Bancshares, Inc. and its subsidiaries.  The words “Southside” and “Southside Bancshares” refer to Southside Bancshares, Inc.  The words “Southside Bank” and “the Bank” refer to Southside Bank (which, subsequent to the internal merger of Fort Worth National Bank (“FWNB”) with and into Southside Bank, includes FWNB).  “FWBS” refers to Fort Worth Bancshares, Inc., a bank holding company acquired by Southside of which FWNB was a wholly-owned subsidiary.  “SFG” refers to SFG Finance, LLC (formerly Southside Financial Group, LLC) which is a wholly-owned subsidiary of the Bank as of July 15, 2011.  “SSI” refers to Southside Securities, Inc., which is a wholly-owned subsidiary of Southside Bancshares, Inc.

Subsequent to December 31, 2012, we made a decision to close Southside Securities, Inc. It is our expectation that we will complete the closing in the first half of 2013.

The consolidated balance sheet as of March 31, 2013, and the related consolidated statements of income, comprehensive income, changes in equity and cash flows and notes to the financial statements for the three-month periods ended March 31, 2013 and 2012 are unaudited; in the opinion of management, all adjustments necessary for a fair statement of such financial statements have been included.  Such adjustments consisted only of normal recurring items.  All significant intercompany accounts and transactions are eliminated in consolidation.  The preparation of these consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires the use of management’s estimates.  These estimates are subjective in nature and involve matters of judgment.  Actual amounts could differ from these estimates.

Interim results are not necessarily indicative of results for a full year.  These financial statements should be read in conjunction with the financial statements and notes thereto in our Annual Report on Form 10-K for the year ended December 31, 2012.  For a description of our significant accounting and reporting policies, refer to Note 1 of the Notes to Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2012.

On March 28, 2013 our board of directors declared a 5% stock dividend to common stock shareholders of record as of April 18, 2013, payable on May 9, 2013. All share data has been adjusted to give retroactive recognition to stock dividends.  

Accounting Pronouncements

ASU 2011-11, “Balance Sheet (Topic 210) – Disclosures about Offsetting Assets and Liabilities.”  ASU 2011-11 amends Topic 210, “Balance Sheet,” to require an entity to disclose both gross and net information about financial instruments, such as sales and repurchase agreements and reverse sale and repurchase agreements and securities borrowing/lending arrangements, and derivative instruments that are eligible for offset in the statement of financial position and/or subject to a master netting arrangement or similar agreement.  We adopted ASU 2011-11 on January 1, 2013, and it did not have a significant impact on our consolidated financial statements.

ASU 2013-02, “Comprehensive Income (Topic 220) – Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income.” ASU 2013-02 requires entities to provide information about the significant amounts reclassified out of accumulated other comprehensive income by component. This update also requires companies to disclose the income statement line items impacted by any significant reclassifications. We adopted ASU 2013-02 on January 1, 2013, and it did not have a significant impact on our consolidated financial statements.


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2.     Earnings Per Share

Earnings per share on a basic and diluted basis have been adjusted to give retroactive recognition to stock dividends and is calculated as follows (in thousands, except per share amounts):
 
Three Months Ended
March 31,
 
2013
 
2012
Basic and Diluted Earnings:
 
 
 
Net income
$
8,525

 
$
10,139

Basic weighted-average shares outstanding
17,857

 
18,191

Add:   Stock options
20

 
13

Diluted weighted-average shares outstanding
17,877

 
18,204

 
 

 
 

Basic Earnings Per Share:
$
0.48

 
$
0.56

 
 

 
 

Diluted Earnings Per Share:
$
0.48

 
$
0.56


For the three month periods ended March 31, 2013 and 2012, there were approximately 25,000 and 8,000 anti-dilutive shares, respectively.

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3.     Accumulated Other Comprehensive (Loss) Income

The changes in accumulated other comprehensive income by component are as follows (in thousands):

 
Three Months Ended March 31, 2013
 
Unrealized Gains (Losses) on Securities
 
Pension Plans
 
 
 
Other
 
OTTI
 
Net Prior Service (Cost) Credit
 
Net Gain (Loss)
 
Total
Balance, January 1, 2013, net of tax
$
30,500

 
$
(1,140
)
 
$
248

 
$
(26,670
)
 
$
2,938

Other comprehensive loss (income):
 
 
 
 
 
 
 
 
 
Other comprehensive (loss) gain before reclassifications
(4,827
)
 
(398
)
 
—

 
—

 
(5,225
)
Reclassified from accumulated other comprehensive income
(4,365
)
 
42

 
(11
)
 
643

 
(3,691
)
Income tax benefit
3,217

 
125

 
4

 
(225
)
 
3,121

Net current-period other comprehensive loss, net of tax
(5,975
)
 
(231
)
 
(7
)
 
418

 
(5,795
)
Balance, March 31, 2013, net of tax
$
24,525

 
$
(1,371
)
 
$
241

 
$
(26,252
)
 
$
(2,857
)


 
Three Months Ended March 31, 2012
 
Unrealized Gains (Losses) on Securities
 
Pension Plans
 
 
 
Other
 
OTTI
 
Net Prior Service (Cost) Credit
 
Net Gain (Loss)
 
Total
Balance, January 1, 2012, net of tax
$
37,271

 
$
(1,577
)
 
$
276

 
$
(21,249
)
 
$
14,721

Other comprehensive loss (income):
 
 
 
 
 
 
 
 
 
Other comprehensive (loss) gain before reclassifications
(4,904
)
 
159

 
—

 
—

 
(4,745
)
Reclassified from accumulated other comprehensive income
(5,972
)
 
141

 
(10
)
 
499

 
(5,342
)
Income tax benefit
3,807

 
(105
)
 
4

 
(175
)
 
3,531

Net current-period other comprehensive loss, net of tax
(7,069
)
 
195

 
(6
)
 
324

 
(6,556
)
Balance, March 31, 2012, net of tax
$
30,202

 
$
(1,382
)
 
$
270

 
$
(20,925
)
 
$
8,165


















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The reclassifications out of accumulated other comprehensive income into net income are presented below (in thousands):

 
Three Months Ended
March 31,
 
2013
 
2012
Unrealized holding gains arising during period:
 
 
 
Realized gain on sale of securities (1)
$
4,365

 
$
5,972

Impairment losses (2)
(42
)
 
(141
)
Total before tax
4,323

 
5,831

Tax expense
(1,513
)
 
(2,041
)
Net of tax
$
2,810

 
$
3,790

 
 
 
 
Amortization of defined benefit pension items:
 
 
 
Net loss (3)
$
(643
)
 
$
(499
)
Prior service credit (3)
11

 
10

Total before tax
(632
)
 
(489
)
Tax expense
221

 
171

Net of tax
$
(411
)
 
$
(318
)
Total reclassifications for the period, net of tax
$
2,399

 
$
3,472


(1) Listed as Gain on sale of securities available for sale on the Statements of Income.
(2) Listed as Net impairment losses recognized in earnings on the Statements of Income.
(3) These accumulated other comprehensive income components are included in the computation of net periodic pension cost presented in “Note 7 - Employee Benefit Plans.”

4.     Securities

The amortized cost and estimated fair value of investment and mortgage-backed securities as of March 31, 2013 and December 31, 2012, are reflected in the tables below (in thousands):
 
 
March 31, 2013
 
Amortized Cost
 
Gross Unrealized Gains
 
Gross Unrealized Losses
 
Estimated Fair Value
AVAILABLE FOR SALE:
 
 
OTTI
 
Other
 
Investment Securities:
 
 
 
 
 
 
 
 
 
U.S. Government Agency Debentures
$
39,215

 
$
—

 
$
—

 
$
499

 
$
38,716

State and Political Subdivisions
612,367

 
22,317

 
—

 
1,451

 
633,233

Other Stocks and Bonds
15,767

 
188

 
2,110

 
—

 
13,845

Mortgage-backed Securities: (1)
 

 
 

 
 

 
 

 
 

Residential
654,539

 
17,730

 
—

 
568

 
671,701

Commercial
233,254

 
673

 
—

 
521

 
233,406

Total
$
1,555,142

 
$
40,908

 
$
2,110

 
$
3,039

 
$
1,590,901

 

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March 31, 2013
 
Amortized Cost
 
Gross Unrealized Gains
 
Gross Unrealized Losses
 
Estimated Fair Value
HELD TO MATURITY:
 
 
OTTI
 
Other
 
Investment Securities:
 
 
 
 
 
 
 
 
 
State and Political Subdivisions
$
1,008

 
$
149

 
$
—

 
$
—

 
$
1,157

Mortgage-backed Securities: (1)
 

 
 

 
 

 
 

 
 

Residential
186,966

 
7,074

 
—

 
18

 
194,022

Commercial
47,279

 
58

 
—

 
152

 
47,185

Total
$
235,253

 
$
7,281

 
$
—

 
$
170

 
$
242,364


 
 
December 31, 2012
 
Amortized Cost
 
Gross Unrealized Gains
 
Gross Unrealized Losses
 
Estimated Fair Value
AVAILABLE FOR SALE:
 
 
OTTI
 
Other
 
Investment Securities:
 
 
 
 
 
 
 
 
 
U.S. Government Agency Debentures
$
61,461

 
$
—

 
$
—

 
$
598

 
$
60,863

State and Political Subdivisions
515,116

 
30,888

 
—

 
316

 
545,688

Other Stocks and Bonds
12,807

 
104

 
1,754

 
1

 
11,156

Mortgage-backed Securities: (1)
 

 
 

 
 

 
 

 
 

Residential
789,356

 
18,003

 
—

 
999

 
806,360

Total
$
1,378,740

 
$
48,995

 
$
1,754

 
$
1,914

 
$
1,424,067


 
 
December 31, 2012
 
Amortized Cost
 
Gross Unrealized Gains
 
Gross Unrealized Losses
 
Estimated Fair Value
HELD TO MATURITY:
 
 
OTTI
 
Other
 
Investment Securities:
 
 
 
 
 
 
 
 
 
State and Political Subdivisions
$
1,009

 
$
128

 
$
—

 
$
—

 
$
1,137

Mortgage-backed Securities: (1)
 

 
 

 
 

 
 

 
 

Residential
245,538

 
8,770

 
—

 
47

 
254,261

Total
$
246,547

 
$
8,898

 
$
—

 
$
47

 
$
255,398


(1) All mortgage-backed securities issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored enterprises.


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Securities carried at fair value through income were as follows (in thousands):

 
At
March 31,
 
At
December 31,
 
At
December 31,
 
2013
 
2012
 
2011
Mortgage-backed Securities:
 
 
 
 
 
U.S. Government Agencies
$
—

 
$
—

 
$
30,413

Government-Sponsored Enterprises
—

 
—

 
617,346

Total
$
—

 
$
—

 
$
647,759


Net gains and losses on securities carried at fair value through income were as follows (in thousands):

 
Three Months Ended
March 31,
 
2013
 
2012
Net (loss) gain on sales transactions
$
—

 
$
(485
)
Net mark-to-market gains
—

 
—

Net (loss) gain on securities carried at fair value through income
$
—

 
$
(485
)



12
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The following table represents the unrealized loss on securities for the three months ended March 31, 2013 and year ended December 31, 2012 (in thousands):
 
Less Than 12 Months
 
More Than 12 Months
 
Total
 
Fair Value
 
Unrealized
Loss
 
Fair Value
 
Unrealized
Loss
 
Fair Value
 
Unrealized
Loss
As of March 31, 2013:
 
 
 
 
 
 
 
 
 
 
 
Available for Sale
 
 
 
 
 
 
 
 
 
 
 
U.S. Government Agency Debentures
$
38,716

 
$
499

 
$
—

 
$
—

 
$
38,716

 
$
499

State and Political Subdivisions
178,946

 
1,426

 
571

 
25

 
179,517

 
1,451

Other Stocks and Bonds
—

 
—

 
592

 
2,110

 
592

 
2,110

Mortgage-backed Securities
258,567

 
1,071

 
2,323

 
18

 
260,890

 
1,089

Total
$
476,229

 
$
2,996

 
$
3,486

 
$
2,153

 
$
479,715

 
$
5,149

Held to Maturity
 

 
 

 
 

 
 

 
 

 
 

Mortgage-backed Securities
$
38,276

 
$
170

 
$
—

 
$
—

 
$
38,276

 
$
170

Total
$
38,276

 
$
170

 
$
—

 
$
—

 
$
38,276

 
$
170

As of December 31, 2012:
 

 
 

 
 

 
 

 
 

 
 

Available for Sale
 

 
 

 
 

 
 

 
 

 
 

U.S. Government Agency Debentures
$
60,863

 
$
598

 
$
—

 
$
—

 
$
60,863

 
$
598

State and Political Subdivisions
49,548

 
316

 
—

 
—

 
49,548

 
316

Other Stocks and Bonds
4,856

 
1

 
990

 
1,754

 
5,846

 
1,755

Mortgage-backed Securities
260,909

 
967

 
3,122

 
32

 
264,031

 
999

Total
$
376,176

 
$
1,882

 
$
4,112

 
$
1,786

 
$
380,288

 
$
3,668

Held to Maturity
 

 
 

 
 

 
 

 
 

 
 

Mortgage-backed Securities
$
3,251

 
$
47

 
$
—

 
$
—

 
$
3,251

 
$
47

Total
$
3,251

 
$
47

 
$
—

 
$
—

 
$
3,251

 
$
47


When it is determined that a decline in fair value of Held to Maturity (“HTM”) and Available for Sale (“AFS”) securities is other-than-temporary, the carrying value of the security is reduced to its estimated fair value, with a corresponding charge to earnings for the credit portion and to other comprehensive income for the noncredit portion .  In estimating other-than-temporary impairment losses, management considers, among other things, the length of time and the extent to which the fair value has been less than cost and the financial condition and near-term prospects of the issuer.  Additionally, we do not currently intend to sell the securities and it is not more likely than not that we will be required to sell the securities before the anticipated recovery of their amortized cost basis.

The turmoil in the capital markets had a significant impact on our estimate of fair value for certain of our securities.  We believe the fair values are reflective of illiquidity and credit impairment.  At March 31, 2013, we have in AFS Other Stocks and Bonds, $2.7 million amortized cost basis in pooled trust preferred securities (“TRUPs”).  Those securities are structured products with cash flows dependent upon securities issued by U.S. financial institutions, including banks and insurance companies.  Our estimate of fair value at March 31, 2013 for the TRUPs is approximately $592,000 and reflects the market illiquidity.  With the exception of the TRUPs, to the best of management’s knowledge and based on our consideration of the qualitative factors associated with each security, there were no securities in our investment and mortgage-backed securities portfolio at March 31, 2013 with an other-than-temporary impairment.

Given the facts and circumstances associated with the TRUPs we performed detailed cash flow modeling for each TRUP using an industry-accepted cash flow model.  Prior to loading the required assumptions into the model we reviewed the financial condition of each of the underlying issuing banks within the TRUP collateral pool that had not deferred or defaulted as of March 31, 2013.  Management’s best estimate of a deferral assumption was assigned to each issuing bank based on the category in which it fell.  Our analysis of the underlying cash flows contemplated various default, deferral and recovery scenarios to arrive at our best estimate of cash flows.  Based on that detailed analysis, we have concluded that the other-than-temporary impairment, which captures the credit component, was estimated at $3.3 million at March 31, 2013 and December 31, 2012. The noncredit charge to

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other comprehensive income was estimated at $2.1 million and $1.8 million at March 31, 2013 and December 31, 2012, respectively.  The carrying amount of the TRUPs was written down with $75,000 and $3.0 million recognized in earnings for the years ended December 31, 2010 and 2009, respectively.  There was no write-down recognized in earnings during 2011 but there was an additional write-down of the TRUPs recognized in earnings in the amount of approximately $181,000 during 2012. For the three months ended March 31, 2013 and 2012, the additional write-down recognized in earnings was approximately $42,000 and $141,000, respectively. The cash flow model assumptions represent management’s best estimate and consider a variety of qualitative factors, which include, among others, the credit rating downgrades, the severity and duration of the mark-to-market loss, and the structural nuances of each TRUP.  Management believes that the detailed review of the collateral and cash flow modeling support the conclusion that the TRUPs had an other-than-temporary impairment at March 31, 2013.  We will continue to update our assumptions and the resulting analysis each reporting period to reflect changing market conditions.  Additionally, we do not currently intend to sell the TRUPs and it is not more likely than not that we will be required to sell the TRUPs before the anticipated recovery of their amortized cost basis.

The table below provides more detail on the TRUPs at March 31, 2013 (in thousands):

TRUP
 
Par
 
Credit
Loss
 
Amortized
Cost
 
Fair
Value
 
Tranche
 
Credit
Rating
1
 
$
2,000

 
$
1,298

 
$
702

 
$
65

 
C1
 
Ca
2
 
2,000

 
550

 
1,450

 
309

 
B1
 
C
3
 
2,000

 
1,450

 
550

 
218

 
B2
 
C
 
 
$
6,000

 
$
3,298

 
$
2,702

 
$
592

 
 
 
 

The following tables present a roll forward of the credit losses recognized in earnings, on AFS debt securities
(in thousands):
 
Three Months Ended
March 31,
 
2013
 
2012
Balance, beginning of period
$
3,256

 
$
3,075

Additions for credit losses recognized on debt securities that had previously incurred impairment losses
42

 
141

Balance, end of period
$
3,298

 
$
3,216


Interest income recognized on securities for the periods presented (in thousands):
 
Three Months Ended
March 31,
 
2013
 
2012
U.S. Treasury
$
17

 
$
—

U.S. Government Agency Debentures
212

 
—

State and Political Subdivisions
4,048

 
2,674

Other Stocks and Bonds
45

 
24

Mortgage-backed Securities
3,936

 
12,163

Total interest income on securities
$
8,258

 
$
14,861


There were no securities transferred from AFS to HTM during the three months ended March 31, 2013 or 2012.  There were no sales from the HTM portfolio during the three months ended March 31, 2013 or 2012.  There were $235.3 million and $246.5 million of securities classified as HTM at March 31, 2013 and December 31, 2012, respectively.

Of the $4.4 million in net securities gains from the AFS portfolio for the three months ended March 31, 2013, there were $5.5 million in realized gains and approximately $1.1 million in realized losses.  Of the $6.0 million in net securities gains from the AFS portfolio for the three months ended March 31, 2012, there were $6.0 million in realized gains and approximately $3,000 in realized losses.

The amortized cost and fair value of securities at March 31, 2013, are presented below by contractual maturity.  Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations.  Mortgage-backed securities are presented in total by category due to the fact that mortgage-backed securities typically are issued with stated principal amounts,

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Table of Contents


and the securities are backed by pools of mortgages that have loans with varying maturities.  The characteristics of the underlying pool of mortgages, such as fixed-rate or adjustable-rate, as well as prepayment risk, are passed on to the security holder.  The term of a mortgage-backed pass-through security thus approximates the term of the underlying mortgages and can vary significantly due to prepayments.
 
March 31, 2013
 
Amortized Cost
 
Fair Value
Available for sale securities:
(in thousands)
Investment Securities
 
 
 
Due in one year or less
$
3,161

 
$
3,174

Due after one year through five years
29,694

 
30,248

Due after five years through ten years
142,304

 
145,638

Due after ten years
492,190

 
506,734

 
667,349

 
685,794

Mortgage-backed securities
887,793

 
905,107

Total
$
1,555,142

 
$
1,590,901


 
March 31, 2013
 
Amortized Cost
 
Fair Value
Held to maturity securities:
(in thousands)
Investment Securities
 
 
 
Due in one year or less
$
—

 
$
—

Due after one year through five years
—

 
—

Due after five years through ten years
—

 
—

Due after ten years
1,008

 
1,157

 
1,008

 
1,157

Mortgage-backed securities
234,245

 
241,207

Total
$
235,253

 
$
242,364


Investment and mortgage-backed securities with book values of $934.5 million and $945.7 million were pledged as of March 31, 2013 and December 31, 2012, respectively, to collateralize Federal Home Loan Bank (“FHLB”) advances, repurchase agreements, and public funds or for other purposes as required by law.

Securities with limited marketability, such as FHLB stock and other investments, are carried at cost, which approximates its fair value and assessed for other-than-temporary impairment.  These securities have no maturity date.

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Table of Contents




5.     Loans and Allowance for Probable Loan Losses

Loans in the accompanying consolidated balance sheets are classified as follows (in thousands):
 
March 31, 2013
 
December 31, 2012
Real Estate Loans:
 
 
 
Construction
$
119,326

 
$
113,744

1-4 Family residential
376,421

 
368,845

Other
242,571

 
236,760

Commercial loans
160,831

 
160,058

Municipal loans
215,869

 
220,947

Loans to individuals
166,629

 
162,623

Total loans
1,281,647

 
1,262,977

Less: Allowance for loan losses
18,542

 
20,585

Net loans
$
1,263,105

 
$
1,242,392


Allowance for Loan Losses

The allowance for loan losses is based on the most current review of the loan portfolio and is validated by multiple processes.  First, the bank utilizes historical data to establish general reserve amounts for each class of loans.  Previously, a review of data for one year was used to establish a general reserve. Beginning in the fourth quarter of 2012, an average three-year history of annualized net charge-offs against the average portfolio balance for that time period is utilized. The historical charge-off figure is further adjusted through qualitative factors that include general trends in past dues, nonaccruals and classified loans to more effectively and promptly react to both positive and negative movements. Management feels this change in methodology is appropriate to accurately estimate the bank's inherent losses in the current fragile economic climate. Second, our lenders have the primary responsibility for identifying problem loans and estimating necessary reserves based on customer financial stress and underlying collateral.  These recommendations are reviewed by the senior lender, the Special Assets department, and the Loan Review department.  Third, the Loan Review department does independent reviews of the portfolio on an annual basis.  The Loan Review department follows a board-approved annual loan review scope.  The loan review scope encompasses a number of metrics that takes into consideration the size of the loan, the type of credit extended, the seasoning of the loan along with the performance of the loan.  The loan review scope as it relates to size, focuses more on larger dollar loan relationships, typically, for example, aggregate debt of $500,000 or greater.  The loan review officer also tracks specific reserves for loans by type compared to general reserves to determine trends in comparative reserves as well as losses not reserved for prior to charge-off to determine the effectiveness of the specific reserve process.

At each review, a subjective analysis methodology is used to grade the respective loan.  Categories of grading vary in severity from loans that do not appear to have a significant probability of loss at the time of review to loans that indicate a probability that the entire balance of the loan will be uncollectible.  If full collection of the loan balance appears unlikely at the time of review, estimates of future expected cash flows or appraisals of the collateral securing the debt are used to determine the necessary allowances.  The internal loan review department maintains a list of all loans or loan relationships that are graded as having more than the normal degree of risk associated with them.  In addition, a list of specifically reserved loans or loan relationships of $50,000 or more is updated on a quarterly basis in order to properly determine necessary allowances and keep management informed on the status of attempts to correct the deficiencies noted with respect to the loan.

For loans to individuals, the methodology associated with determining the appropriate allowance for losses on loans primarily consists of an evaluation of individual payment histories, remaining term to maturity and underlying collateral support.

Industry and our own experience indicates that a portion of our loans will become delinquent and a portion of the loans will require partial or full charge-off.  Regardless of the underwriting criteria utilized, losses may be experienced as a result of various factors beyond our control, including, among other things, changes in market conditions affecting the value of properties used as collateral for loans and problems affecting the credit of the borrower and the ability of the borrower to make payments on the loan.  Our determination of the appropriateness of the allowance for loan losses is based on various considerations, including an analysis of

16
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the risk characteristics of various classifications of loans, previous loan loss experience, specific loans which would have loan loss potential, delinquency trends, estimated fair value of the underlying collateral, current economic conditions, the views of the bank regulators (who have the authority to require additional allowances in accordance with GAAP), and geographic and industry loan concentration.

Consumer loans at SFG are reserved for based on general estimates of loss at the time of purchase for current loans.  SFG loans experiencing past due status or extension of maturity characteristics are reserved for at significantly higher levels based on the circumstances associated with each specific loan.  In general the reserves for SFG are calculated based on the past due status of the loan.  For reserve purposes, the portfolio has been segregated by past due status and by the remaining term variance from the original contract.  During repayment, loans that pay late will take longer to pay out than the original contract.  Additionally, some loans may be granted extensions for extenuating payment circumstances and evaluated for troubled debt classification.  The remaining term extensions increase the risk of collateral deterioration and, accordingly, reserves are increased to recognize this risk.

New pools purchased are reserved following the expiration of their respective recourse period at their estimated annual loss. Additionally, we use data mining measures to track migration within risk tranches.  Reserves are adjusted quarterly to match the migration metrics.

Credit Quality Indicators

We categorize loans into risk categories on an ongoing basis, 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.  We use the following definitions for risk ratings:

•
Satisfactory (Rating 1 – 4) – This rating is assigned to all satisfactory loans.  This category, by definition, should consist of acceptable credit.  Credit and collateral exceptions should not be present, although their presence would not necessarily prohibit a loan from being rated Satisfactory, if deficiencies are in process of correction.  These loans will not be included in the Watch List.

•
Satisfactory (Rating 5) – Special Treatment Required – (Pass Watch) – These loans require some degree of special treatment, but not due to credit quality.  This category does not include loans specially mentioned or adversely classified by the Loan Review Officer or regulatory authorities; however, particular attention must be accorded such credits due to characteristics such as:

•
A lack of, or abnormally extended payment program;
•
A heavy degree of concentration of collateral without sufficient margin;
•
A vulnerability to competition through lesser or extensive financial leverage; and
•
A dependence on a single, or few customers, or sources of supply and materials without suitable substitutes or alternatives.

•
Special Mention (Rating 6) – A Special Mention asset has potential weaknesses that deserve management’s close attention.  If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the institution’s credit position at some future date.  Special Mention assets are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification.

•
Substandard (Rating 7) – Substandard loans are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any.  Loans so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt.  They are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected.

•
Doubtful (Rating 8) – Loans classified as Doubtful have all the weaknesses inherent in those classified Substandard with the added characteristic that the weaknesses make collection or liquidation, in full, on the basis of currently known facts, conditions and values, highly questionable and improbable.

•
Loss (Rating 9) – Loans classified as Loss are currently in the process of being charged off and are fully reserved. They are considered uncollectible and of such little value that their continuance as bankable assets is not warranted.

Loans that are accruing and not considered troubled debt restructurings ("TDR") are reserved for as a group of similar type credits and included in the general portion of the allowance for loan losses.

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Table of Contents



The general portion of the loan loss allowance is reflective of historical charge-off levels for similar loans adjusted for changes in current conditions and other relevant factors.  These factors are likely to cause estimated losses to differ from historical loss experience and include:

•
Changes in lending policies or procedures, including underwriting, collection, charge-off, and recovery procedures;
•
Changes in local, regional and national economic and business conditions including entry into new markets;
•
Changes in the volume or type of credit extended;
•
Changes in the experience, ability, and depth of lending management;
•
Changes in the volume and severity of past due, nonaccrual, restructured, or classified loans;
•
Changes in loan review or Board oversight;
•
Changes in the level of concentrations of credit; and
•
Changes in external factors, such as competition and legal and regulatory requirements.

The following tables detail activity in the Allowance for Loan Losses by portfolio segment for the periods presented (in thousands):
 
 
Three Months Ended March 31, 2013
 
Real Estate
 
 
 
 
 
 
 
 
 
 
 
Construction
 
1-4 Family
Residential
 
Other
 
Commercial
Loans
 
Municipal
Loans
 
Loans to
Individuals
 
Unallocated
 
Total
Balance at beginning of period
$
2,355

 
$
3,545

 
$
2,290

 
$
3,158

 
$
633

 
$
7,373

 
$
1,231

 
$
20,585

Provision (reversal) for loan losses
(125
)
 
167

 
(247
)
 
(290
)
 
(12
)
 
1,344

 
(345
)
 
492

Loans charged off
—

 
(228
)
 
(46
)
 
(71
)
 
—

 
(2,807
)
 
—

 
(3,152
)
Recoveries of loans charged off
17

 
4

 
5

 
50

 
—

 
541

 
—

 
617

Balance at end of period
$
2,247

 
$
3,488

 
$
2,002

 
$
2,847

 
$
621

 
$
6,451

 
$
886

 
$
18,542


 
Three Months Ended March 31, 2012
 
Real Estate
 
 
 
 
 
 
 
 
 
 
 
Construction
 
1-4 Family
Residential
 
Other
 
Commercial
Loans
 
Municipal
Loans
 
Loans to
Individuals
 
Unallocated
 
Total
Balance at beginning of period
$
2,620

 
$
1,957

 
$
3,051

 
$
2,877

 
$
619

 
$
6,244

 
$
1,172

 
$
18,540

Provision (reversal) for loan losses
49

 
339

 
12

 
355

 
(11
)
 
2,311

 
(3
)
 
3,052

Loans charged off
(8
)
 
(11
)
 
—

 
(88
)
 
—

 
(2,123
)
 
—

 
(2,230
)
Recoveries of loans charged off
21

 
5

 
2

 
198

 
—

 
486

 
—

 
712

Balance at end of period
$
2,682

 
$
2,290

 
$
3,065

 
$
3,342

 
$
608

 
$
6,918

 
$
1,169

 
$
20,074


The following tables present the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment based on impairment method as described in the allowance for loan losses methodology discussion (in thousands):




18
Table of Contents


 
As of March 31, 2013
 
Real Estate
 
 
 
 
 
 
 
 
 
 
 
Construction
 
1-4 Family
Residential
 
Other
 
Commercial
Loans
 
Municipal
Loans
 
Loans to
Individuals
 
Unallocated
 
Total
Ending balance – individually evaluated for impairment
$
81

 
$
216

 
$
147

 
$
492

 
$
—

 
$
131

 
$
—

 
$
1,067

Ending balance – collectively evaluated for impairment
2,166

 
3,272

 
1,855

 
2,355

 
621

 
6,320

 
886

 
17,475

Balance at end of period
$
2,247

 
$
3,488

 
$
2,002

 
$
2,847

 
$
621

 
$
6,451

 
$
886

 
$
18,542


 
As of December 31, 2012
 
Real Estate
 
 
 
 
 
 
 
 
 
 
 
Construction
 
1-4 Family
Residential
 
Other
 
Commercial
Loans
 
Municipal
Loans
 
Loans to
Individuals
 
Unallocated
 
Total
Ending balance – individually evaluated for impairment
$
200

 
$
222

 
$
243

 
$
631

 
$
—

 
$
175

 
$
—

 
$
1,471

Ending balance – collectively evaluated for impairment
2,155

 
3,323

 
2,047

 
2,527

 
633

 
7,198

 
1,231

 
19,114

Balance at end of period
$
2,355

 
$
3,545

 
$
2,290

 
$
3,158

 
$
633

 
$
7,373

 
$
1,231

 
$
20,585

 
The following table details activity of the Reserve for Unfunded Loan Commitments for the periods presented (in thousands):

 
Three Months Ended
March 31,
 
2013
 
2012
Reserve For Unfunded Loan Commitments:
 
 
 
Balance at beginning of period
$
5

 
$
26

Provision (reversal) for losses on unfunded loan commitments
—

 
—

Balance at end of period
$
5

 
$
26


The following table sets forth the balance in the recorded investment in loans by portfolio segment based on impairment method as described in the allowance for loan losses methodology discussion for the periods presented (in thousands):

 
Real Estate
 
 
 
 
 
 
 
 
March 31, 2013
Construction
 
1-4 Family
Residential
 
Other
 
Commercial
Loans
 
Municipal
Loans
 
Loans to
Individuals
 
Total
Loans individually evaluated for impairment
$
1,547

 
$
3,236

 
$
2,005

 
$
2,001

 
$
—

 
$
464

 
$
9,253

Loans collectively evaluated for impairment
117,779

 
373,185

 
240,566

 
158,830

 
215,869

 
166,165

 
1,272,394

Total ending loan balance
$
119,326

 
$
376,421

 
$
242,571

 
$
160,831

 
$
215,869

 
$
166,629

 
$
1,281,647


 
Real Estate
 
 
 
 
 
 
 
 
December 31, 2012
Construction
 
1-4 Family
Residential
 
Other
 
Commercial
Loans
 
Municipal
Loans
 
Loans to
Individuals
 
Total
Loans individually evaluated for impairment
$
2,465

 
$
2,799

 
$
2,613

 
$
2,043