Document And Entity Information
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Document And Entity Information
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9 Months Ended | |
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Sep. 30, 2012
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Oct. 31, 2012
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| Document And Entity Information [Abstract] | ||
| Document type | 10-Q | |
| Amendment Flag | false | |
| Document Period End Date | Sep. 30, 2012 | |
| Document Fiscal Period Focus | Q3 | |
| Document Fiscal Year Focus | 2012 | |
| Entity Registrant Name | HERITAGE BANKSHARES INC /VA | |
| Entity Central Index Key | 0000719731 | |
| Current Fiscal Year End Date | --12-31 | |
| Entity Filer Category | Smaller Reporting Company | |
| Entity Common Stock, Shares Outstanding | 2,275,891 |
Consolidated Balance Sheets
Consolidated Balance Sheets (Parenthetical)
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Consolidated Balance Sheets (Parenthetical) (USD $)
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Sep. 30, 2012
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Dec. 31, 2011
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| Preferred stock, par value | ||
| Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
| Common stock, par value | $ 5 | $ 5 |
| Common stock, shares authorized | 6,000,000 | 6,000,000 |
| Common stock, shares issued | 2,275,891 | 2,304,965 |
| Common stock, shares outstanding | 2,275,891 | 2,304,965 |
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Senior Non-Cumulative Perpetual Preferred Stock, Series C [Member]
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| Preferred stock, shares issued | 7,800 | 7,800 |
| Preferred stock, shares outstanding | 7,800 | 7,800 |
Consolidated Statements Of Income
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Consolidated Statements Of Income (USD $)
In Thousands, except Share data, unless otherwise specified |
3 Months Ended | 9 Months Ended | ||
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Sep. 30, 2012
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Sep. 30, 2011
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Sep. 30, 2012
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Sep. 30, 2011
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| Interest income | ||||
| Interest income and fees on loans | $ 2,485 | $ 2,833 | $ 7,740 | $ 8,543 |
| Interest on taxable investment securities | 174 | 193 | 716 | 514 |
| Other interest and dividend income | 61 | 37 | 106 | 112 |
| Total interest income | 2,720 | 3,063 | 8,562 | 9,169 |
| Interest expense | ||||
| Deposits | 228 | 309 | 702 | 923 |
| Borrowings | 6 | 10 | 23 | 36 |
| Total interest expense | 234 | 319 | 725 | 959 |
| Net interest income | 2,486 | 2,744 | 7,837 | 8,210 |
| Provision for loan losses | 33 | 35 | 44 | |
| Net interest income after provision for loan losses | 2,486 | 2,711 | 7,802 | 8,166 |
| Noninterest income | ||||
| Service charges on deposit accounts | 67 | 87 | 195 | 259 |
| Late charges and other fees on loans | 11 | 25 | 77 | 57 |
| Gain on sale of investment securities | 284 | 284 | 87 | |
| Income from bank-owned life insurance | 43 | 161 | ||
| Other | 87 | 85 | 241 | 224 |
| Total noninterest income | 492 | 197 | 958 | 627 |
| Noninterest expense | ||||
| Compensation | 1,008 | 1,090 | 3,179 | 3,283 |
| Data processing | 160 | 148 | 471 | 435 |
| Occupancy | 221 | 234 | 668 | 622 |
| Furniture and equipment | 161 | 142 | 446 | 438 |
| Taxes and licenses | 79 | 86 | 239 | 252 |
| Professional fees | 57 | 74 | 243 | 292 |
| FDIC assessment | 39 | 37 | 116 | 137 |
| (Gain) loss on sale or impairment of other real estate owned | (10) | 41 | 1 | |
| Other | 282 | 250 | 743 | 773 |
| Total noninterest expense | 1,997 | 2,061 | 6,146 | 6,233 |
| Income before provision for income taxes | 981 | 847 | 2,614 | 2,560 |
| Provision for income taxes | 288 | 299 | 749 | 861 |
| Net income | 693 | 548 | 1,865 | 1,699 |
| Preferred stock dividend and accretion of discount | (20) | (252) | (86) | (562) |
| Net income available to common stockholders | $ 673 | $ 296 | $ 1,779 | $ 1,137 |
| Earnings per common share | ||||
| Basic | $ 0.30 | $ 0.13 | $ 0.77 | $ 0.49 |
| Diluted | $ 0.29 | $ 0.13 | $ 0.76 | $ 0.49 |
| Dividends per share | $ 0.06 | $ 0.06 | $ 0.18 | $ 0.18 |
| Weighted average shares outstanding - basic | 2,275,891 | 2,303,107 | 2,295,413 | 2,305,652 |
| Effect of dilutive equity awards | 54,362 | 13,441 | 49,385 | 11,246 |
| Weighted average shares outstanding - diluted | 2,330,253 | 2,316,548 | 2,344,798 | 2,316,898 |
Consolidated Statements Of Cash Flows
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Consolidated Statements Of Cash Flows (USD $)
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9 Months Ended | |
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Sep. 30, 2012
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Sep. 30, 2011
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| Cash flows from operating activities: | ||
| Net income | $ 1,865,000 | $ 1,699,000 |
| Adjustments to reconcile net income to net cash provided by operating activities: | ||
| Provision for loan losses | 35,000 | 44,000 |
| Amortization of loan yield adjustments, net | 209,000 | 242,000 |
| Depreciation, amortization and accretion, net | 462,000 | 451,000 |
| Stock based compensation | 79,000 | 68,000 |
| Deferred compensation | 45,000 | 28,000 |
| Exercise of stock options tax benefit | 1,000 | |
| Net (gains) losses on: | ||
| Sale of securities | (284,000) | (87,000) |
| Sale or impairment of other real estate owned | 41,000 | 1,000 |
| Net income on bank owned life insurance | (161,000) | |
| Changes in assets/liabilities, net | ||
| Increase in interest receivable and other assets | (43,000) | (3,000) |
| Increase (decrease) in interest payable and other liabilities | (154,000) | 3,000 |
| Net cash provided by operating activities | 2,095,000 | 2,445,000 |
| Cash flows from investing activities: | ||
| Proceeds from maturities and principal repayments of securities available for sale | 23,200,000 | 6,487,000 |
| Purchases of securities available for sale | (18,996,000) | (36,921,000) |
| Proceeds from sales of securities available for sale | 14,696,000 | 6,005,000 |
| Proceeds from sale of other real estate owned | 1,535,000 | |
| Net decrease (increase) in certificates of deposit in other banks | (13,695,000) | 2,011,000 |
| Net increase in loans held for investment | (239,000) | (311,000) |
| Purchases of Federal Home Loan Bank stock and Federal Reserve Bank stock | (59,000) | (4,000) |
| Redemption of FHLB stock and Federal Reserve Bank stock | 450,000 | 679,000 |
| Purchases of premises and equipment | (166,000) | (292,000) |
| Purchases of and premiums paid for bank-owned life insurance | (12,000) | (13,000) |
| Proceeds from bank owned life insurance | 141,000 | |
| Net cash provided by/(used for) investing activities | 6,855,000 | (22,359,000) |
| Cash flows from financing activities: | ||
| Proceeds from exercise of stock options | 8,000 | |
| Net increase in deposits | 22,646,000 | 33,494,000 |
| Net decrease in Federal Home Loan Bank advances | (4,000,000) | |
| Net decrease in securities sold under agreements to repurchase | (1,290,000) | (833,000) |
| Repayments of other borrowings | (237,000) | (228,000) |
| Proceeds from issuance of preferred stock | 7,788,000 | |
| Redemption of preferred stock | (10,406,000) | |
| Retirement of common stock | (368,000) | (55,000) |
| Cash dividends paid | (500,000) | (810,000) |
| Net cash provided by financing activities | 16,259,000 | 28,950,000 |
| Increase in cash and cash equivalents | 25,209,000 | 9,036,000 |
| Cash and cash equivalents, beginning of period | 14,014,000 | 16,380,000 |
| Cash and cash equivalents, end of period | 39,223,000 | 25,416,000 |
| Supplemental disclosure: | ||
| Interest paid | 773,000 | 965,000 |
| Income taxes paid | 813,000 | 1,079,000 |
| Noncash financing activities: | ||
| Transfer of loans to other real estate owned | $ 96,000 | $ 25,000 |
Consolidated Statements Of Comprehensive Income
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Consolidated Statements Of Comprehensive Income (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 9 Months Ended | ||
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Sep. 30, 2012
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Sep. 30, 2011
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Sep. 30, 2012
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Sep. 30, 2011
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| Consolidated Statements Of Comprehensive Income [Abstract] | ||||
| Net income for period ended September 30 | $ 693 | $ 548 | $ 1,865 | $ 1,699 |
| Unrealized holding gains (losses) on securities available for sale | (66) | 191 | (196) | 69 |
| Tax effect on unrealized gains (losses) | 22 | (65) | 67 | (23) |
| Realized gains on sales of available for sale securities | (284) | (284) | (87) | |
| Tax effect on realized gains | 97 | 97 | 29 | |
| Total comprehensive income | $ 462 | $ 674 | $ 1,549 | $ 1,687 |
Principles Of Consolidation And Basis Of Presentation
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Principles Of Consolidation And Basis Of Presentation
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9 Months Ended |
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Sep. 30, 2012
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| Principles Of Consolidation And Basis Of Presentation [Abstract] | |
| Principles Of Consolidation And Basis Of Presentation | Note 1 – Principles of Consolidation and Basis of Presentation The accompanying unaudited consolidated financial statements include the accounts of Heritage Bankshares, Inc. and its wholly-owned subsidiary, Heritage Bank. All significant intercompany balances and transactions have been eliminated in consolidation. Heritage Bankshares, Inc. (the “Company”) is a bank holding company incorporated under the laws of the Commonwealth of Virginia in 1983, and the Company serves as the holding company for its wholly-owned subsidiaries. The Company’s only subsidiary, Heritage Bank (the “Bank”), is a state banking corporation engaged in the general commercial and retail banking business. The Bank is a full-service bank conducting a general commercial and consumer banking business with its customers located throughout the Hampton Roads area of Virginia. The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial reporting and with the instructions for Form 10‑Q. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. These unaudited consolidated financial statements should be read in conjunction with and with reference to the audited consolidated financial statements and accompanying footnotes included in the Company’s annual report on Form 10‑K for the year ended December 31, 2011. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. Actual results could differ from those estimates. Certain reclassifications have been made to prior year financial statements to conform to current period presentation. The Company believes its critical accounting policies are those that are particularly sensitive in terms of judgments and the extent to which estimates are used, and such policies include (a) the valuation of the allowance for loan losses and the impairment of loans, (b) the impairment of financial investments and other accounts, (c) the deferral of loan fees and direct loan origination costs, and (d) accounting for income taxes. Allowance for Loan Losses; Impairment of Loans. The Bank maintains an allowance for loan losses at a level that, in management’s judgment, is adequate to absorb estimated credit losses on existing loans. The amount of the allowance is affected by: (1) loan charge-offs, which decrease the allowance, (2) recoveries on loans previously charged-off, which increase the allowance, and (3) the provision for loan losses charged to income, which increases the allowance. The Bank analyzes its loan portfolio through ongoing credit review processes and constructs a comprehensive allowance analysis for its loan portfolio at least quarterly. This analysis includes two basic elements: (1) specific allowances for individual loans, and (2) general allowances for loan portfolio segments, which factor in historical loan loss experience and delinquency rates for the Bank and the banking industry and numerous other environmental factors. The Bank evaluates various loans individually for impairment based on guidance for receivables. The evaluation is based upon either discounted cash flows or collateral evaluations. If the evaluation shows that a particular loan is impaired, then a specific reserve is established, or a charge-off is made, for the amount of any impairment. For loans without an individual measure of impairment, the Bank makes estimates of losses for groups of loans in accordance with guidance for contingencies. As part of the loan loss reserve methodology, loans are placed into one of four major categories or segments of loans: (1) commercial and industrial loans, (2) consumer loans, (3) 1-4 family residential loans (including home equity loans and lines), and (4) multi-family and other commercial real estate loans. The Bank then considers the impact of various bank, industry, economic and other environmental factors and documents, which are further used in the analysis. The Bank’s allowance for loan losses is divided into four distinct portions: (1) Historical – an amount based on the Bank’s actual net charge-offs; (2) Impaired Loans – an amount for specific allocations on significant individual credits as prescribed by guidance for receivables; (3) Loan Segments – an amount to adjust the historical allocation for the four loan segments based on environmental factors as provided by guidance for contingencies; and (4) Unallocated – an amount to reflect the imprecision inherent in these calculations. Impairment of Financial Investments and Other Accounts. Impairment of investment securities, other equity investments and other asset accounts results in a write-down that must be included in net income when the fair value of the asset declines below cost and the decline is other-than-temporary. The fair values of these investments and other assets are subject to change, as they are influenced by market conditions and management decisions. Deferral of Loan Fees and Direct Loan Origination Costs. Generally accepted accounting principles relating to accounts receivable require that loan fees and direct loan origination costs be deferred and recognized as an adjustment to the loan’s yield. While the amount of fees to be deferred is generally apparent in the origination of a loan, the Company utilizes estimates to determine the amount of deferred direct origination costs, especially payroll costs, that are attributable to the loan origination process. Management’s estimates of the amount of costs associated with successful loan origination activities are reviewed and updated annually. Accounting for Income Taxes. The determination of the Company’s effective tax rate requires judgment. In the ordinary course of business, there are transactions and calculations for which the ultimate tax outcomes are uncertain. In addition, the Company’s tax returns are subject to audit by various tax authorities. Although we believe that our estimates are reasonable, there can be no assurance that the final tax outcome will not be materially different than that which is reflected in the income tax provision and accrual. Subsequent Events. In accordance with accounting guidance, the Company has evaluated events and transactions for potential recognition or disclosure in these financial statements through the date the financial statements were issued. Recent Accounting Pronouncements There were no authoritative pronouncements that would have a material impact on the Company during the quarter ending September 30, 2012.
Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies are not expected to have a material impact on the Company’s financial position, results of operations or cash flows.
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Principles Of Consolidation And Basis Of Presentation (Policy)
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Principles Of Consolidation And Basis Of Presentation (Policy)
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9 Months Ended |
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Sep. 30, 2012
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| Principles Of Consolidation And Basis Of Presentation [Abstract] | |
| Allowance For Loan Losses; Impairment Of Loans | Allowance for Loan Losses; Impairment of Loans. The Bank maintains an allowance for loan losses at a level that, in management’s judgment, is adequate to absorb estimated credit losses on existing loans. The amount of the allowance is affected by: (1) loan charge-offs, which decrease the allowance, (2) recoveries on loans previously charged-off, which increase the allowance, and (3) the provision for loan losses charged to income, which increases the allowance. The Bank analyzes its loan portfolio through ongoing credit review processes and constructs a comprehensive allowance analysis for its loan portfolio at least quarterly. This analysis includes two basic elements: (1) specific allowances for individual loans, and (2) general allowances for loan portfolio segments, which factor in historical loan loss experience and delinquency rates for the Bank and the banking industry and numerous other environmental factors. The Bank evaluates various loans individually for impairment based on guidance for receivables. The evaluation is based upon either discounted cash flows or collateral evaluations. If the evaluation shows that a particular loan is impaired, then a specific reserve is established, or a charge-off is made, for the amount of any impairment. For loans without an individual measure of impairment, the Bank makes estimates of losses for groups of loans in accordance with guidance for contingencies. As part of the loan loss reserve methodology, loans are placed into one of four major categories or segments of loans: (1) commercial and industrial loans, (2) consumer loans, (3) 1-4 family residential loans (including home equity loans and lines), and (4) multi-family and other commercial real estate loans. The Bank then considers the impact of various bank, industry, economic and other environmental factors and documents, which are further used in the analysis. The Bank’s allowance for loan losses is divided into four distinct portions: (1) Historical – an amount based on the Bank’s actual net charge-offs; (2) Impaired Loans – an amount for specific allocations on significant individual credits as prescribed by guidance for receivables; (3) Loan Segments – an amount to adjust the historical allocation for the four loan segments based on environmental factors as provided by guidance for contingencies; and (4) Unallocated – an amount to reflect the imprecision inherent in these calculations.
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| Impairment Of Financial Investments And Other Accounts | Impairment of Financial Investments and Other Accounts. Impairment of investment securities, other equity investments and other asset accounts results in a write-down that must be included in net income when the fair value of the asset declines below cost and the decline is other-than-temporary. The fair values of these investments and other assets are subject to change, as they are influenced by market conditions and management decisions.
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| Deferral Of Loan Fees And Direct Loan Origination Costs | Deferral of Loan Fees and Direct Loan Origination Costs. Generally accepted accounting principles relating to accounts receivable require that loan fees and direct loan origination costs be deferred and recognized as an adjustment to the loan’s yield. While the amount of fees to be deferred is generally apparent in the origination of a loan, the Company utilizes estimates to determine the amount of deferred direct origination costs, especially payroll costs, that are attributable to the loan origination process. Management’s estimates of the amount of costs associated with successful loan origination activities are reviewed and updated annually.
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| Accounting For Income Taxes | Accounting for Income Taxes. The determination of the Company’s effective tax rate requires judgment. In the ordinary course of business, there are transactions and calculations for which the ultimate tax outcomes are uncertain. In addition, the Company’s tax returns are subject to audit by various tax authorities. Although we believe that our estimates are reasonable, there can be no assurance that the final tax outcome will not be materially different than that which is reflected in the income tax provision and accrual.
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| Subsequent Events | Subsequent Events. In accordance with accounting guidance, the Company has evaluated events and transactions for potential recognition or disclosure in these financial statements through the date the financial statements were issued.
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Share-Based Compensation
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Share-Based Compensation
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Sep. 30, 2012
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| Share-Based Compensation [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-Based Compensation | Note 2 – Share-Based Compensation The following table presents a summary of stock option activity for the period of January 1, 2012 through September 30, 2012.
The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the Company’s closing stock price on the last trading day of the quarter and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on September 30, 2012. The amount changes based on the fair market value of the Company’s common stock, as reflected by stock market prices. The Company’s current policy is to issue new shares of common stock to satisfy option exercises. The aggregate intrinsic value of options exercised during the nine months ended September 30, 2012 was $3,700. Cash received from exercises of options during the first nine months of 2012 was $7,500. There were no options exercised during the nine months ended September 30, 2011. On January 25, 2012, the Company’s Board of Directors granted, effective February 1, 2012, 43,600 shares of restricted stock to certain executives under the Heritage 2006 Equity Incentive Plan, as amended (“2006 Incentive Plan”). The shares vest at a rate of 20% over a five year period beginning on February 1, 2013 and on each February 1 thereafter. Upon the death or permanent disability of the executive or a change of control of the Company, any remaining unvested shares will vest immediately.
As defined in the 2006 Incentive Plan, fair value of the shares was measured by the closing price of a share of the Company’s common stock on the OTC Markets Group, Inc. reporting system on the grant date of the applicable award or, if the Company’s shares were not traded on the grant-date, then the closing price of a share of common stock on the OTC Markets Group, Inc. reporting system on the next preceding date on which a trade occurred. In addition, because the share-recipients are not entitled to dividends until the shares vest, the grant date fair value of the award was reduced by the present value of the dividends expected to be paid on the underlying shares during the service period, discounted at the appropriate risk-free interest rate.
The following table presents a summary of restricted stock award activity for the period of January 1, 2012 to September 30, 2012.
The amount charged against income, before income tax benefit of $22,295, in relation to stock‑based payment arrangements was $79,059 for the nine months ended September 30, 2012. The amount charged against income, before income tax benefit of $1,423, in relation to stock‑based payment arrangements was $67,642 for the nine months ended September 30, 2011. At September 30, 2012, unrecognized compensation expense, net of estimated forfeitures, related to unvested stock option and restricted stock grants was $433,754 and is currently expected to be recognized over a weighted average period of 2.2 years as follows:
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Share-Based Compensation (Tables)
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Share-Based Compensation (Tables)
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Sep. 30, 2012
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| Share-Based Compensation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary Of Stock Option Activity |
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| Summary Of Restricted Stock Award Activity |
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| Schedule Of Stock-Based Compensation Expense |
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Share-Based Compensation (Narrative) (Details)
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Share-Based Compensation (Narrative) (Details) (USD $)
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9 Months Ended | |
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Sep. 30, 2012
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Sep. 30, 2011
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| Share-Based Compensation [Abstract] | ||
| Aggregate intrinsic value of options exercised | $ 3,700 | |
| Cash received from exercises of options | 7,500 | |
| Shares of restricted stock granted | 43,600 | |
| Vesting rate | 20.00% | |
| Vesting period | 5 years | |
| Income tax benefit | 22,295 | 1,423 |
| Amount charged against income in relation to stock-based payment arrangements | 79,059 | 67,642 |
| Unrecognized compensation expense | $ 433,754 | |
| Unrecognized compensation expense, expected recognition period | 2 years 2 months 12 days | |
Share-Based Compensation (Summary Of Stock Option Activity) (Details)
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Share-Based Compensation (Summary Of Stock Option Activity) (Details) (USD $)
In Thousands, except Share data, unless otherwise specified |
9 Months Ended |
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Sep. 30, 2012
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| Share-Based Compensation [Abstract] | |
| Shares, Outstanding at January 1, 2012 | 235,800 |
| Shares, Exercised | (1,000) |
| Shares, Forfeited/expired | (800) |
| Shares, Outstanding at September 30, 2012 | 234,000 |
| Shares, Exercisable at September 30, 2012 | 226,400 |
| Weighted Average Exercise Price, Outstanding at January 1, 2012 | $ 12.65 |
| Weighted Average Exercise Price, Exercised | $ (7.50) |
| Weighted Average Exercise Price, Forfeited/expired | $ (12.12) |
| Weighted Average Exercise Price, Outstanding at September 30, 2012 | $ 12.67 |
| Weighted Average Exercisable Price, Exercisable at September 30, 2012 | $ 12.75 |
| Weighted Average Remaining Term (Years), Outstanding at September 30, 2012 | 4 years |
| Weighted Average Remaining Term (Years), Exercisable at September 30, 2012 | 3 years 10 months 24 days |
| Aggregate Intrinsic Value, Outstanding at September 30, 2012 | $ 133 |
| Aggregate Intrinsic Value, Exercisable at September 30, 2012 | $ 121 |
Share-Based Compensation (Summary Of Restricted Stock Activity) (Details)
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Share-Based Compensation (Summary Of Restricted Stock Activity) (Details) (USD $)
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9 Months Ended |
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Sep. 30, 2012
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| Share-Based Compensation [Abstract] | |
| Shares, Granted | 43,600 |
| Shares, Outstanding at September 30, 2012 | 43,600 |
| Fair Value at Grant Date, Granted | $ 11.28 |
| Fair Value at Grant Date, Outstanding at September 30, 2012 | $ 11.28 |
Share-Based Compensation (Schedule Of Stock-Based Compensation Expense) (Details)
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Share-Based Compensation (Schedule Of Stock-Based Compensation Expense) (Details) (USD $)
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Sep. 30, 2012
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| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
| Stock-Based Compensation Expense | $ 433,754 |
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2012 [Member]
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| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
| Stock-Based Compensation Expense | 28,000 |
|
2013 [Member]
|
|
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
| Stock-Based Compensation Expense | 102,000 |
|
2014 [Member]
|
|
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
| Stock-Based Compensation Expense | 98,000 |
|
2015 [Member]
|
|
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
| Stock-Based Compensation Expense | 99,000 |
|
2016 [Member]
|
|
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
| Stock-Based Compensation Expense | 99,000 |
|
2017 [Member]
|
|
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
| Stock-Based Compensation Expense | $ 8,000 |
Disclosure About Fair Value Of Financial Instruments
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Disclosure About Fair Value Of Financial Instruments
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9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2012
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| Disclosure About Fair Value Of Financial Instruments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Disclosure About Fair Value Of Financial Instruments | Note 3 – Disclosure About Fair Value of Financial Instruments The following summary presents an estimate of the fair value of the Company’s financial instruments. Because no active market readily exists for a portion of the Company’s financial instruments, fair values of some financial instruments are based on estimates using present value and other valuation techniques. Much of the information used to determine fair value is highly subjective in nature and therefore the results may not be precise. The subjective factors include, among other things, estimates of cash flows, risk characteristics, credit quality and interest rates, all of which are subject to change. Accordingly, the amounts that will actually be realized or paid upon settlement or maturity of the various instruments could be significantly different. The following table presents the carrying amounts, fair value and level of input of those financial instruments whose fair value differs from carrying amount at September 30, 2012 and December 31, 2011.
Fair Value Hierarchy “Fair Value Measurements and Disclosures” establishes three levels of inputs that may be used to measure fair value: Level 1: Valuation is based on quoted prices in active markets for identical assets or liabilities. Level 2: Valuation is based on 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 for substantially the full term of the assets or liabilities. Level 2 assets and liabilities include debt securities with quoted prices that are traded less frequently than exchange-traded instruments and derivative contracts whose value is determined using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data. Level 3: Valuation is based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. Investment Securities Available for Sale Investment securities available for sale are recorded at fair value on a recurring basis. Fair value is measured by quoted prices, if available. If quoted prices are not available, fair values are measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for the security’s credit rating, prepayment assumptions and other factors such as credit loss assumptions. Level 2 securities include Treasury notes and bills, mortgage-backed securities issued by government sponsored entities, municipal bonds and other securities issued by government sponsored agencies. Loans The Company does not record loans at fair value on a recurring basis. Fair value is measured using modeling software that incorporates various assumptions based on observable market data such as interest rate fluctuations and cash flow data. From time to time, a loan is considered impaired. Loans that are deemed to be impaired are valued in accordance with guidance related to receivables. The fair value of impaired loans is estimated using one of several methods, including collateral value, liquidation value and discounted cash flows. When the fair value of collateral is based on an observable market price or a current appraised value, the Company records the impaired loan as Level 2. If the fair value of the loan is based on criteria other than observable market prices or current appraised value, the loan is recorded as Level 3. Other Real Estate Owned Foreclosed assets are adjusted to fair value upon transfer of the loans to foreclosed assets. Foreclosed assets are carried at the lower of the carrying value or fair value. Once management’s intentions change regarding the utilization of its own property, that property is transferred to other real estate owned at fair value. Fair value is based upon independent observable market prices or appraised values of the collateral, which the Company considers to be Level 2 inputs. The Company may, from time to time, revise its evaluation of the fair value of a property and provide an allowance based on subjective criteria such as declines in assessed value, which the Company considers to be Level 3 inputs. Other Financial Assets Other financial assets are recorded at fair value on a recurring basis. Fair value is based on quoted market prices which are considered to be Level 2 inputs. General The Company has no liabilities carried at fair value or measured at fair value on a recurring or nonrecurring basis.
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