Total liabilities as of December 31, 2012 were $320,605,000, up approximately 2% or $5,068,000 from $315,537,000 as of December 31, 2011, as a result of an increase in savings and NOW accounts of $8,666,000, or approximately 6.5%, and an increase in demand deposit accounts of $4,523,000 or approximately 13.5%. These increases were partially offset by a decrease in time deposits of $8,425,000, or approximately 6%. The decrease in time deposits was a result of the Bank’s increased focus on attracting more core deposit relationships. This strategy has increased checking and savings deposits and has helped lower the Bank’s cost of funds.
Total stockholders’ equity as of December 31, 2012 was $28,089,000, and consisted primarily of $24,244,000 in retained earnings. As of December 31, 2011, total stockholders’ equity was $26,947,000. The Company and the Bank continue to be considered “well capitalized” by all regulatory definitions and did not participate in the federal government’s Troubled-Asset Relief Program (TARP).
The Bank’s allowance for loan losses was $3,646,000 as of December 31, 2012, which represents 1.31% of total loans outstanding, compared to $4,015,000, or 1.48% of total loans outstanding, as of December 31, 2011. The decline in the allowance balance is a direct result of improved loan quality.
Nonperforming loans (including nonaccruing loans and accruing loans more than 90 days past due) totaled $3,014,000, or 1.09% of total loans, as of December 31, 2012, compared to $4,711,000, or 1.74% of total loans, as of December 31, 2011. Nonperforming loans decreased $1,561,000 in the fourth quarter of 2012. The decrease was due to execution of foreclosures and loan exit strategies in addition to the upgrade of some loans to performing status. Consequently, foreclosed assets increased from $645,000 as of the end of 2011 to $2,393,000 at the end of 2012. Total criticized and classified loans have declined $12,249,000 or 53% as compared to December 31, 2011.