Annual Reports

 
Quarterly Reports

  • 10-Q (Nov 9, 2017)
  • 10-Q (Aug 9, 2017)
  • 10-Q (May 10, 2017)
  • 10-Q (Nov 9, 2016)
  • 10-Q (Aug 9, 2016)
  • 10-Q (May 10, 2016)

 
8-K

 
Other

TrueCar, Inc. 10-Q 2011

Documents found in this filing:

  1. 10-Q
  2. Ex-31.1.
  3. Ex-31.2
  4. Ex-32.1
  5. Ex-32.2
  6. Ex-32.2
Unassociated Document


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q
 
QUARTERLY REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934>
For the quarterly period ended June 30, 2011
Commission File Number: 0-28846

Centrue Financial Corporation
(Exact name of Registrant as specified in its charter)
     
Delaware
 
36-3145350
(State or other jurisdiction of incorporation or organization)
 
(I.R.S. Employer Identification Number)
     
7700 Bonhomme Avenue, St. Louis, Missouri 63105
(Address of principal executive offices including zip code)
     
(314) 505-5500
(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 þ 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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes þ 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.
 
 
Large accelerated filer
o
Accelerated filer
o
 
Non-accelerated filer
o
Smaller reporting company
þ
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes o No þ.

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class
 
Shares outstanding at August 12, 2011
Common Stock, Par Value $1.00
 
6,048,405
 
 
 

 
 
Centrue Financial Corporation
Form 10-Q Index
June 30, 2011
 
     
Page
         
     
         
     
         
   
1
 
         
   
2
 
         
   
4
 
         
   
5
 
         
 
30
 
         
    47  
     
 
 
48
 
         
     
         
 
49
 
         
 
49
 
         
 
49
 
         
 
49
 
         
 
49
 
         
 
49
 
         
 
50
 
         
 
51
 
 
 
 

 
 
Centrue Financial Corporation
June 30, 2011 and December 31, 2010 (In Thousands, Except Share Data)


   
June 30,
   
December 31,
 
   
2011
   
2010
 
ASSETS
           
Cash and cash equivalents
  $ 45,863     $ 82,945  
Securities available-for-sale
    221,127       219,475  
Restricted securities
    9,190       10,470  
Loans
    660,882       721,871  
Allowance for loan losses
    (24,358 )     (31,511 )
Net loans
    636,524       690,360  
Bank-owned life insurance
    30,902       30,403  
Mortgage servicing rights
    2,340       2,425  
Premises and equipment, net
    24,935       25,687  
Other real estate owned
    35,618       25,564  
Other assets
    15,757       17,833  
                 
Total assets
  $ 1,022,256     $ 1,105,162  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
Liabilities
               
Deposits
               
Non-interest-bearing
  $ 112,986     $ 118,667  
Interest-bearing
    753,051       812,438  
Total deposits
    866,037       931,105  
Federal funds purchased and securities sold under agreements to repurchase
    16,180       16,188  
Federal Home Loan Bank advances
    58,059       71,059  
Notes payable
    10,533       10,623  
Series B mandatory redeemable preferred stock
    268       268  
Subordinated debentures
    20,620       20,620  
Other liabilities
    12,998       12,378  
Total liabilities
    984,695       1,062,241  
                 
Commitments and contingent liabilities
           
                 
Stockholders’ equity
               
Series A convertible preferred stock (aggregate liquidation preference of $2,762)
    500       500  
Series C fixed rate, Cumulative Perpetual Preferred Stock (aggregate liquidation preference of $32,668)
    31,120       30,810  
Common stock, $1 par value, 15,000,000 shares authorized; 7,453,555 shares issued at June 30, 2011 and December 31, 2010
    7,454       7,454  
Surplus
    74,780       74,721  
Retained earnings (accumulated deficit)
    (54,047 )     (46,861 )
Accumulated other comprehensive income (loss)
    (132 )     (1,589 )
      59,675       65,035  
Treasury stock, at cost 1,405,150 shares at June 30, 2011 and December 31, 2010
    (22,114 )     (22,114 )
Total stockholders’ equity
    37,561       42,921  
                 
Total liabilities and stockholders’ equity
  $ 1,022,256     $ 1,105,162  

See Accompanying Notes to Unaudited Financial Statements
 
 
1.

 

Centrue Financial Corporation
And Comprehensive Income (Loss)
Three Months and Six Months Ended June 30, 2011 and 2010
(In Thousands, Except Per Share Data)


   
Three Months Ended
   
Six Months Ended
 
   
June 30,
   
June 30,
 
   
2011
   
2010
   
2011
   
2010
 
Interest income
                       
Loans
  $ 8,836     $ 10,773     $ 18,117     $ 22,021  
Securities
                               
Taxable
    1,088       1,613       2,085       3,346  
Exempt from federal income taxes
    177       258       392       536  
Federal funds sold and other
    37       38       68       65  
Total interest income
    10,138       12,682       20,662       25,968  
                                 
Interest expense
                               
Deposits
    2,213       4,049       4,700       8,420  
Federal funds purchased and securities sold under agreements to repurchase
    10       12       21       30  
Federal Home Loan Bank advances
    355       579       767       1,160  
Series B mandatory redeemable preferred stock
    4       4       8       8  
Subordinated debentures
    274       259       544       513  
Notes payable
    91       92       181       180  
Total interest expense
    2,947       4,995       6,221       10,311  
                                 
Net interest income
    7,191       7,687       14,441       15,657  
Provision for loan losses
    3,250       7,550       7,500       16,900  
Net interest income (loss) after provision for loan losses
    3,941       137       6,941       (1,243 )
                                 
Noninterest income
                               
Service charges
    1,189       1,299       2,251       2,719  
Mortgage banking income
    302       167       709       486  
Bank-owned life insurance
    250       257       499       512  
Electronic banking services
    565       528       1,092       1,012  
Securities gains
    379       1,012       379       1,014  
Total other-than-temporary impairment losses
    (107 )     (3,921 )     (499 )     (5,762 )
Portion of loss recognized in other comprehensive income (before taxes)
          2,004             2,238  
Net impairment on securities
    (107 )     (1,917 )     (499 )     (3,524 )
Gain (loss) on sale of OREO
    (92 )     1       (48 )     10  
Gain on sale of other assets
          1,268       63       1,470  
Other income
    198       191       362       429  
      2,684       2,806       4,808       4,128  
 
See Accompanying Notes to Unaudited Financial Statements

 
2.

 

Centrue Financial Corporation
Unaudited Consolidated Statements Of Income (Loss)
And Comprehensive Income (Loss)
Three Months and Six Months Ended June 30, 2011 and 2010
(In Thousands, Except Per Share Data)>

 
   
Three Months Ended
June 30,
   
Six Months Ended
June 30,
 
   
2011
   
2010
   
2011
   
2010
 
Noninterest expenses
                       
Salaries and employee benefits
    3,460       3,701       7,093       7,472  
Occupancy, net
    704       943       1,424       1,731  
Furniture and equipment
    421       519       860       1,043  
Marketing
    67       82       127       189  
Supplies and printing
    77       98       141       196  
Telephone
    204       194       408       373  
Data processing
    375       397       739       779  
FDIC insurance
    824       853       1,674       1,707  
Loan processing and collection costs
    511       602       1,102       1,114  
OREO valuation adjustment
    1,097       330       1,297       1,987  
Amortization of intangible assets
    263       321       539       660  
Other expenses
    1,574       1,570       2,973       2,845  
      9,577       9,610       18,377       20,096  
                                 
Income (loss) before income taxes
  $ (2,952 )   $ (6,667 )   $ (6,628 )   $ (17,211 )
Income tax expense (benefit)
    (528 )     (2,742 )     (746 )     (7,026 )
Net income (loss)
  $ (2,424 )   $ ( 3,925 )   $ (5,882 )   $ (10,185 )
                                 
Preferred stock dividends
    501       478       995       951  
Net income (loss) for common stockholders
  $ (2,925 )   $ (4,403 )   $ (6,877 )   $ (11,136 )
                                 
Basic earnings (loss) per common share
  $ (0.48 )   $ (0.73 )   $ (1.14 )   $ (1.84 )
Diluted earnings (loss) per common share
  $ (0.48 )   $ (0.73 )   $ (1.14 )   $ (1.84 )
                                 
                                 
Total comprehensive income (loss):
                               
Net income (loss)
  $ (2,424 )   $ (3,925 )   $ (5,882 )   $ (10,185 )
Change in unrealized gains (losses) on available for sale securities for which a portion of an other-than-temporary impairment has been recognized in earnings
    (21 )     (982 )     (145 )     (2,633 )
Change in unrealized gains (losses) on other securities available for sale
    1,416       458       2,401       803  
                                 
Reclassification adjustment:
                               
Net impairment loss recognized in earnings
    107       1,917       499       3,524  
(Gains) recognized in earnings
    (379 )     (1,012 )     (379 )     (1,014 )
Net unrealized gains (loss)
    1,123       381       2,376       680  
Tax expense (benefit)
    434       148       919       264  
Other comprehensive income (loss)
    689       233       1,457       416  
Total comprehensive income (loss)
  $ (1,735 )   $ (3,692 )   $ (4,425 )   $ (9,769 )

See Accompanying Notes to Unaudited Financial Statements

 
3.

 

Centrue Financial Corporation
Six Months Ended June 30, 2011 and 2010 (In Thousands)


   
Six Months Ended
 
   
June 30,
 
   
2011
   
2010
 
Cash flows from operating activities
           
Net Income (Loss)
 
$
(5,882
)
 
$
(10,185
)
Adjustments to reconcile net income (loss) to net cash provided by operating activities
               
Depreciation
   
946
     
1,133
 
Amortization of intangible assets
   
539
     
660
 
Amortization of mortgage servicing rights, net
   
198
     
218
 
Amortization of bond premiums, net
   
1,175
     
1,291
 
Mortgage servicing rights valuation adjustment
   
     
225
 
Income tax valuation allowance
   
2,029
     
 
Share based compensation
   
58
     
53
 
Provision for loan losses
   
7,500
     
16,900
 
Provision for deferred income taxes
   
(2,029
)
   
(4,377
)
Earnings on bank-owned life insurance
   
(499
)
   
(512
)
Other than temporary impairment, securities
   
499
     
3,524
 
OREO valuation allowance
   
1,297
     
1,987
 
Securities sale losses (gains), net
   
(379
)
   
(1,014
)
(Gain) on sale of other assets, net
   
(63
)
   
(291
)
(Gain) loss on sale of OREO
   
48
     
(10
)
(Gain) loss on sale of loans
   
(443
)
   
(462
)
(Gain) loss on sale of branches
   
     
(1,179
)
Proceeds from sales of loans held for sale
   
20,871
     
24,036
 
Origination of loans held for sale
   
(19,517
)
   
(22,767
)
Change in assets and liabilities
               
(Increase) decrease in other assets
   
1,302
     
4,052
 
Increase (decrease) in other liabilities
   
(1,328
)
   
(117
)
Net cash provided by operating activities
   
6,322
     
13,165
 
Cash flows from investing activities
               
Proceeds from paydowns of securities available for sale
   
22,647
     
37,993
 
Proceeds from calls and maturities of securities available for sale
   
11,920
     
4,405
 
Proceeds from sales of securities available for sale
   
19,698
     
34,860
 
Purchases of securities available for sale
   
(53,485
)
   
(112,643
)
Net decrease (increase) in loans
   
30,565
     
68,504
 
(Purchase) disposal of premises and equipment
   
(194
)
   
221
 
Proceeds from sale of OREO
   
3,611
     
232
 
Sale of branch, net of premium received
   
     
(11,726
)
Net cash provided by (used in) investing activities
   
34,762
     
21,846
 
Cash flows from financing activities
               
Net increase (decrease) in deposits
   
(65,068
)
   
(41,885
)
Net increase (decrease) in federal funds purchased and securities sold under agreements to repurchase
   
(8
)
   
(4,726
)
Repayment of advances from the Federal Home Loan Bank
   
(23,000
)
   
(25,201
)
Proceeds from advances from the Federal Home Loan Bank
   
10,000
     
15,000
 
Payments on notes payable
   
(90
)
   
 
Net cash provided by (used in) financing activities
   
(78,166
)
   
(56,812
)
Net increase (decrease) in cash and cash equivalents
   
(37,082
)
   
(21,801
)
Cash and cash equivalents
               
Beginning of period
   
82,945
     
56,452
 
End of period
 
$
45,863
   
$
34,651
 
Supplemental disclosures of cash flow information
               
Cash payments for
               
Interest
 
$
6,373
   
$
9,924
 
Income taxes
   
19
     
 
Transfers from loans to other real estate owned
   
14,860
     
2,188
 

See Accompanying Notes to Unaudited Financial Statements

 
4.

 

Centrue Financial Corporation
(Table Amounts In Thousands, Except Share Data)


Note 1. Summary of Significant Accounting Policies

Centrue Financial Corporation is a bank holding company organized under the laws of the State of Delaware. When we use the terms “Centrue,” the “Company,” “we,” “us,” and “our,” we mean Centrue Financial Corporation, a Delaware Corporation, and its consolidated subsidiaries. When we use the term the “Bank,” we are referring to our wholly owned banking subsidiary, Centrue Bank. The Company and the Bank provide a full range of banking services to individual and corporate customers located in markets extending from the far western and southern suburbs of the Chicago metropolitan area across Central Illinois down to the metropolitan St. Louis area. These services include demand, time, and savings deposits; business and consumer lending; and mortgage banking. Additionally, brokerage, asset management, and trust services are provided to our customers on a referral basis to third party providers. The Company is subject to competition from other financial institutions and nonfinancial institutions providing financial services. Additionally, the Company and the Bank are subject to regulations of certain regulatory agencies and undergo periodic examinations by those regulatory agencies.

Basis of presentation

The accounting and reporting policies of the Company and its subsidiaries conform to U.S. generally accepted accounting principles (“GAAP”) and general practice within the banking industry. The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Material estimates which are particularly susceptible to significant change in the near term relate to the fair value of investment securities and other-than-temporary impairment of securities, the determination of the allowance for loan losses and valuation of other real estate owned.

For further information with respect to significant accounting policies followed by the Company in the preparation of its consolidated financial statements, refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2010. The consolidated financial statements include the accounts of the Company and Centrue Bank. Intercompany balances and transactions have been eliminated in consolidation and certain 2010 amounts have been reclassified to conform to the 2011 presentation. The annualized results of operations during the three and six months ended June 30, 2011 are not necessarily indicative of the results expected for the year ending December 31, 2011. All financial information in the following tables is in thousands (000s), except share and per share data. In the opinion of management, all normal and recurring adjustments which are necessary to fairly present the results for the interim periods presented have been included.
 
 
5.

 
 
Centrue Financial Corporation
Notes to Unaudited Consolidated Financial Statements
(Table Amounts In Thousands, Except Share Data)

 
Note 2. Earnings Per Share

Basic earnings per share for the three and six months ended June 30, 2011 and 2010 were computed by dividing net income by the weighted average number of shares outstanding. Diluted earnings per share for the same periods were computed by dividing net income by the weighted average number of shares outstanding, adjusted for the dilutive effect of the stock options and warrants. Computations for basic and diluted earnings per share are provided as follows:
 
   
Three Months Ended
   
Six Months Ended
 
   
June 30,
   
June 30,
 
   
2011
   
2010
   
2011
   
2010
 
Basic Earnings (Loss) Per Common Share
                       
Net income (loss) for common shareholders
  $ (2,925 )   $ (4,403 )   $ (6,877 )   $ (11,136 )
Weighted average common shares outstanding
    6,048       6,043       6,048       6,043  
                                 
Basic earnings (loss) per common share
  $ (0.48 )   $ (0.73 )   $ (1.14 )   $ (1.84 )
                                 
Diluted Earnings (Loss) Per Common Share
                               
Weighted average common shares outstanding
    6,048       6,043       6,048       6,043  
Add: dilutive effect of assumed exercised stock options
                       
Add: dilutive effect of assumed exercised common stock warrants
                       
Weighted average common and dilutive potential shares outstanding
    6,048       6,043       6,048       6,043  
                                 
Diluted earnings (loss) per common share
  $ (0.48 )   $ (0.73 )   $ (1.14 )   $ (1.84 )

There were 496,738 options and 508,320 warrants outstanding for the three and six months ended June 30, 2011 and 628,569 options and 508,320 warrants outstanding for the three and six months ended June 30, 2010 that were not included in the computation of diluted earnings per share because the exercise price was greater than the average market price and therefore, were anti-dilutive. In addition, the Company’s convertible preferred stock was not included in the computation of diluted earnings per share as it was anti-dilutive.

Note 3. Securities

The primary strategic objective related to the Company’s securities portfolio is to assist with liquidity and interest rate risk management. The fair value of securities classified as available-for-sale was $221.1 million at June 30, 2011 compared to $219.5 million at December 31, 2010. The fair value of securities classified as restricted (Federal Reserve and Federal Home Loan Bank stock) was $9.2 million at June 30, 2011 compared to $10.5 million at December 31, 2010. The Company does not have any securities classified as trading or held-to-maturity.

The following tables represent the fair value of available-for-sale securities and the related, gross unrealized gains and losses recognized in accumulated other comprehensive income(loss) at June 30, 2011 and December 31, 2010:
 
   
June 30, 2011
 
         
Gross
   
Gross
       
   
Fair
   
Unrealized
   
Unrealized
   
Amortized
 
   
Value
   
Gains
   
Losses
   
Cost
 
U.S. government agencies
  $ 8,499     $ 106     $     $ 8,393  
States and political subdivisions
    21,473       553       (3 )     20,923  
U.S. government agency residential mortgage-backed securities
    158,085       2,413       (75 )       155,747  
Collateralized residential mortgage obligations:
                               
Agency
    18,268       356             17,912  
Private label
    3,004       221             2,783  
Equity securities
    2,443       95             2,348  
Collateralized debt obligations:
                               
Single issue
    3,885       39             3,846  
Pooled
    5,470       65       (2,706 )     8,111  
                                 
    $ 221,127     $ 3,848     $ (2,784 )   $ 220,063  
 
 
6.

 
 
Centrue Financial Corporation
Notes to Unaudited Consolidated Financial Statements
(Table Amounts In Thousands, Except Share Data)


Note 3. Securities (Continued)
 
   
December 31, 2010
 
         
Gross
   
Gross
       
   
Fair
   
Unrealized
   
Unrealized
   
Amortized
 
   
Value
   
Gains
   
Losses
   
Cost
 
U.S. government agencies
  $ 7,085     $ 168     $     $ 6,917  
States and political subdivisions
    28,348       531       (8 )     27,825  
U.S. government agency residential mortgage-backed securities
    147,846       2,070       (131 )       145,907  
Collateralized residential mortgage obligations:
                               
Agency
    20,735       192             20,543  
Private label
    4,936       70       (77 )     4,943  
Equity securities
    2,254       41             2,213  
Collateralized debt obligations:
                               
Single issue
    3,849       3             3,846  
Pooled
    4,422       42       (4,213 )     8,593  
                                 
    $ 219,475     $ 3,117     $ (4,429 )   $ 220,787  
 
The amounts below include the activity for available-for-sale securities related to sales, maturities and calls:
 
   
Three Months Ended
   
Six Months Ended
 
   
June 30,
   
June 30,
 
      2011       2010       2011       2010  
Proceeds from calls and maturities
  $ 7,260     $ 2,095     $ 11,920     $ 4,405  
Proceeds from sales
    19,376       34,809       19,698       34,860  
Realized gains
    379       1,012       379       1,014  
Realized losses
                       
Net impairment loss recognized in earnings
    (107 )     (1,917 )     (499 )     (3,524 )
Tax benefit (provision) related to net realized gains and losses
    (105 )     349       46       969  
 
The following table represents securities with unrealized losses not recognized in income presented by the length of time individual securities have been in a continuous unrealized loss position:
 
   
June 30, 2011
 
   
Less than 12 Months
   
12 Months or More
   
Total
 
   
Fair
   
Unrealized
   
Fair
   
Unrealized
   
Fair
   
Unrealized
 
   
Value
   
Loss
   
Value
   
Loss
   
Value
   
Loss
 
                                     
State and political subdivisions
    727       (3 )                 727       (3 )
U.S. government agency residential mortgage-backed securities
    33,044       (75 )                 33,044       (75 )
Collateralized debt obligations: pooled
                5,356       (2,706 )     5,356       (2,706 )
                                                 
Total temporarily impaired
  $ 33,771     $ (78 )   $ 5,356     $ (2,706 )   $ 39,127     $ ( 2,784 )

 
7.

 

Centrue Financial Corporation
Notes to Unaudited Consolidated Financial Statements
(Table Amounts In Thousands, Except Share Data)

 
Note 3. Securities (Continued)
 
   
December 31, 2010
 
   
Less than 12 Months
   
12 Months or More
   
Total
 
   
Fair
   
Unrealized
   
Fair
   
Unrealized
   
Fair
   
Unrealized
 
   
Value
   
Loss
   
Value
   
Loss
   
Value
   
Loss
 
                                     
State and political subdivisions
  $ 664     $ (3 )   $ 350     $ (5 )   $ 1,014     $ (8 )
U.S. government agency residential mortgage-backed securities
    17,216       (131 )                 17,216       (131 )
Collateralized residential mortgage obligations: private label
                2,559       (77 )     2,559       (77 )
Collateralized debt obligations: pooled
                4,330       (4,213 )     4,330       (4,213 )
                                                 
Total temporarily impaired
  $ 17,880     $ (134 )   $ 7,239     $ (4,295 )   $ 25,119     $ (4,429 )
 
The fair values of securities classified as available-for-sale at June 30, 2011, by contractual maturity, are shown as follows. Securities not due at a single maturity date, including mortgage-backed securities, collateralized mortgage obligations, and equity securities are shown separately.
 
   
Amortized
       
   
Cost
   
Fair Value
 
Due in one year or less
  $ 5,767     $ 5,847  
Due after one year through five years
    12,822       13,145  
Due after five years through ten years
    7,893       8,012  
Due after ten years
    14,791       12,323  
U.S. government agency residential mortgage-backed securities
    155,747       158,085  
Collateralized residential mortgage obligations
    20,695       21,272  
Equity
    2,348       2,443  
    $ 220,063     $ 221,127  
 
The following table presents a rollforward of the credit losses recognized in earnings for the three month period ended June 30, 2011 and 2010:
 
   
2011
   
2010
 
Beginning balance, April 1,
  $ 20,754     $ 16,948  
Amounts related to credit loss for which an other-than-temporary impairment was not previously recognized
           
Additions/Subtractions
               
Amounts realized for securities sold during the period
           
Amounts related to securities for which the company intends to sell or that it will be more likely than not that the company will be required to sell prior to recovery of amortized cost basis
           
Reduction for increase in cash flows expected to be collected that are recognized over the remaining life of the security
           
Increases to the amount related to the credit loss for which other-than-temporary was previously recognized
    107       1,917  
                 
Ending balance, June 30,
  $ 20,861     $ 18,865  
 
 
8.

 
 
Centrue Financial Corporation
Notes to Unaudited Consolidated Financial Statements
(Table Amounts In Thousands, Except Share Data)

 
Note 3. Securities (Continued)

The following table presents a rollforward of the credit losses recognized in earnings for the six month period ended June 30, 2011 and 2010:
 
   
2011
   
2010
 
Beginning balance, January 1,
 
$
20,362
   
$
15,341
 
Amounts related to credit loss for which an other-than-temporary impairment was not previously recognized
   
     
 
Additions/Subtractions
               
Amounts realized for securities sold during the period
   
     
 
Amounts related to securities for which the company intends to sell or that it will be more likely than not that the company will be required to sell prior to recovery of amortized cost basis
   
     
 
Reduction for increase in cash flows expected to be collected that are recognized over the remaining life of the security
   
     
 
Increases to the amount related to the credit loss for which other-than-temporary was previously recognized
   
499
     
3,524
 
                 
Ending balance, June 30,
 
$
20,861
   
$
18,865
 
 
See Note 9 on Fair Value for additional information about our analysis on the security portfolio related to the fair value and other-than-temporary impairment disclosures of these instruments.

Note 4. Loans

The major classifications of loans follow:
 
   
Aggregate Principal Amount
 
   
June 30,
   
December 31,
 
   
2011
   
2010
 
             
Commercial
  $ 84,669     $ 87,226  
Agricultural & AGRE
    36,649       44,289  
Construction, land & development
    53,416       72,078  
Commercial RE
    318,772       342,208  
1-4 family mortgages
    164,590       172,666  
Consumer
    2,786       3,404  
Total loans
  $ 660,882     $ 721,871  
Allowance for loan losses
    (24,358 )     (31,511 )
Loans, net
  $ 636,524     $ 690,360  
 
There were $0.8 million and $1.7 million of loans held for sale at June 30, 2011 and December 31, 2010, respectively.

The credit quality indicator utilized by the Company to internally analyze the loan portfolio is the internal risk rating. Internal risk ratings of 0 to 5 are considered pass credits, a risk rating of a 6 is special mention, a risk rating of a 7 is substandard, and a risk rating of an 8 is doubtful. Loans classified as pass credits have no identified material weaknesses and are performing as agreed. Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date. Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

 
 
9.

 
 
Centrue Financial Corporation
Notes to Unaudited Consolidated Financial Statements
(Table Amounts In Thousands, Except Share Data)

 
Note 4. Loans (Continued)

The following table presents the commercial loan portfolio by internal risk rating:
 
Jun. 30, 2011
 
Commercial
     
Construction
 
Commercial Real Estate
     
Internal Risk Rating
 
Closed end
 
Lines of Credit
 
Agriculture & AGRE
 
Land & Development
 
Owner-Occupied
 
Non-Owner Occupied
 
Total
 
1-2   $ 1,931   $ 1,194   $ 4,324   $ 3,982   $ 4,711   $ 845   $ 16,987  
3     3,612     5,382     12,418     1,157     11,986     20,729     55,284  
4     19,047     26,350     14,954     1,267     78,661     51,401     191,680  
5     10,492     3,791     3,047     7,938     23,158     45,866     94,292  
6     1,118     5,118     1,821     5,852     6,464     16,348     36,721  
7     2,253     4,381     85     33,220     20,272     38,331     98,542  
8                              
Total
  $ 38,453   $ 46,216   $ 36,649   $ 53,416   $ 145,252   $ 173,520   $ 493,506  

Dec. 31, 2010
 
Commercial
     
Construction
 
Commercial Real Estate
     
Internal Risk Rating
 
Closed end
 
Lines of Credit
 
Agriculture & AGRE
 
Land & Development
 
Owner-Occupied
 
Non-Owner Occupied
 
Total
 
1-2   $ 2,294   $ 331   $ 8,527   $ 4,700   $ 8,559   $ 1,479   $ 25,890  
3     3,935     7,333     10,873     1,237     17,673     23,045     64,096  
4     21,225     24,042     16,742     1,500     76,491     61,468     201,468  
5     10,483     4,768     3,588     8,720     21,389     42,495     91,443  
6     1,217     4,506     42     7,232     3,206     20,821     37,024  
7     2,149     4,898     4,517     48,689     25,075     40,507     125,835  
8         45