COP - Federal Reserve Bank of Chicago

Transcription

(]
Board of Governors of the Federal Reserve System
FRY-6
COP'/
OMB Number7100-0297
Approval expires December 31, 2015
Page 1of2
Annual Report of Holding Companies-FR Y-6
Report at the close of business as of the end of fiscal year
This Report is required by law: Section 5(c)(1)(A) of the Bank
Holding Company Act (12 U.S.C. § 1844 (c)(1)(A)); Section B(a)
of the International Banking Act (12 U.S.C. § 3106(a)); Sections
11(a)(1), 25 and 25A of the Federal Reseive Act (12 U.S.C.
§§ 248(a)(1), 602, and 611a); Section 211.13(c) of Regulation K
(12 C.F.R. § 211.13(c)); and Section 225.5(b) of Regulation Y (12
C.F.R. § 225.5(b)) and section 10(c)(2){H) of the Home Owners'
Loan Act. Return to the appropriate Federal Reseive Bank the
original and the number of copies ·specified.
This report form is to be filed by all top-tier bank holding compa
nies and top-tier savings and loan holding companies organized
under U.S. law, and by any foreign banking organization that
does not meet the requirements of and is not treated as a quallfy
ing foreign banking organization under Section 211.23 of
Regulation K (12 C.F.R. § 211.23). (See page one of the general
instructions for more detail of who must file.) The Federal
Reseive may not conduct or sponsor, and an organization (or a
person) is not required to respond to, an information collection
unless it displays a currently valid OMB control number.
NOTE: The Annual Report of Holding Companies must be signed
by one director of the top-tier holding company. This indivldual
should also be a senior official of the top-tier holding company. In
the event that the top-tier holding company does not have an
individual who is a senior official and is also a director, the chair
man of the board must sign the report.
Date of Report (top-tier holding company's fiscal year-end):
1, Timothy
G. Marshall
Name of the Hol ding Company Director and Official
President
& CEO
attest that the Annual Report of Holding Companies (including
the supporting attachments) for this report date has been pre
pared in conformance with the instructions issued by the Federal
Reseive System and are true and correct to the best of my
knowledge and belief.
With respect to information regarding individuals contained in this
report, the Reporler certifies that it has the authority to provide this
information to the Federal Reserve. The Reporter also certifies
that it has the authority, on behalf of each individual, to consent or
object to public release of information regarding that individual.
The Federal Reserve may assume, in the absence of a request for
confidential treatment submitted in accordance with the Board's
"Rules Regarding Availability of Information," 12 C.F.R. Part 261,
that the Reporter JmSi.. individual consent to public release of all
e. portconc miR
�
r;
/lo.,.<-
Reporter's legal Entity Identifier (LEI) (20-Charecter LEI Code)
Reporter's Name, Street, and Malling Address
Arbor Ban c orp Inc.
Legal Titie of Holding Company
TiUe of the Holding Company Director and Official
de�
December 31, 2014
Month I Day I Year
125 South Fifth Ave
(Mailing Address of the H oldin g C om pa ny) Street I P.O.
Ann Arbor
Ml
City
State
Box
48104
Code
Zip
Physical Location W different from rnamng address)
��-
Person to whom questions about this report should be directed:
Mark J. Slade
1 st VP & CFO
Name
Tiiie
734-327-1136
Area Cod e I Phone Number I Extension
734-669-7160
Area Code I FAX Number
[email protected]
E-mail Address
www.bankofannarbor.com
Address (URL) for the Holding Company's web page
Date of Sign at ure
For holding companies not registered with the SECIndicate status
181
D
D
of Annual Report to Shareholders:
is Included with the FR Y-6 report
Does the reporter request confd
i ent/al treatment for any portion of this
submission?
D Yes
Please identify the report Items to which this request applJes:
will be sent under separate cover
dli
is not prepared
For Federal Res
RSSD ID
C.I.
Use
D In accordance with the instructions on pages GEN-2
and 3, a letter justifying the request is being provided.
O The information for which confidential treatment is sought
07
SL 3 yO
is being submitted separately labeled "Confidential."
t8J No
Pubnc reporting burden for this Information collecUon Is estimated to val)' from 1.3 to 101 hours per response, wilh an average of 5.25 hours per response, Including time .to gather and
mainteln date In the required rorm and to review Instructions and complete the Information collection. Send comments regarding lhls burden esllmate or any other aspect of this collection of
lnfonnalion, Including suggesllons for reducing this burden lo: Secrelaiy, Board of Governors of the Federal Res.erve Syslom, 2oth end C Streets, NW, WashingIon, DC 20551, and to the
Office of Management and Budget, Paperwork Reducllon Project 7
( 100-0297), Washington, DC 20503.
1012014
Arbor Bancorp. Inc.
Guess how many years in a row
we've earned 1 ecord profits
Dear fellow shareholders:
2014 was another good year in many wa ys.
It was a good year to be in Michigan. Unemployment fell to 6.3%. its lowest level in 12 years. Since 201 0, more
than 300,000 jobs have been created in the private sector. Auto sales have hit their highest mark since before
the Great Recession. Michigan's busi ness climate is positive. Our slate now ranks among the lop six in business
growth and is trending toward economic vitality.
It was also a good year to be in Washtenaw County, wher e unemployment declined to its lowest level in
nearly a decade . The local economy hos recovered !he 16,000 jobs l ost in 2003·2009 and on additional 15,000
jobs are anticipated over th e next three years. Home values and income continue lo rise in most areas .
Washtenaw County has one of the strongest economies in Michigan an d the resurgence in automotive sales,
increase in con::;truclion, and the projected job cre ation ahould help the county grow in Lhe coming year.
And. ii wa1 a good year for Bank o! Ann Arbor.
Let's start with the numbers. For the fifth consecutive yea r, they're gcod. Very good.
Our toted a11eta surpassed Sl billion. a t remendou s accomplishment and signific::xnt mi!estone in the bank's
history. Just five years ago, our assets were $542 million. The growth in 2014 was consistent with our average
an:nual growth or over $107 million per year. With $1 billion in assets comes a new level of fi na ncial and
regulatory rcporlir.g. To meet these obligations. we've added resources and ore confi dent that by w orldr.. g
together, our teom of the World's Best Bankers will satisfy all of the new requirements wit ho ut missing a step.
Deposits continued lo grow as more businesses,
organizations, and individuals chose the exceptional level of
customer service and value that all of our colleagues at Bank
of Ann Arbor provide each and every day. In 2014, depo1!11
increaaed by 10.5%. lo S936 million. We're holding strong as
the s econ d largest bofil in Ann Arbor. according to the FDIC's
m os t recent deposit market share reports. As r ecently as 2010,
we were the sev enth lar ges t. Crain's Detroit Business' r ecent
article highlighted our morket·shore growth. We're p le as ed.
CRAINS DETROIT BUSINESS
How Btnk or Ann Arbor l:akr.s on �lmnh - and thrivH
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yes, but our goal is to be number one ln the mark.et. pure
a nd simple.
TOTAL DEPOSITS AND ASSETS
Un millions)
2014
2013
2012
2011
2010
Total deposits
$ 936
847
793
686
609
TotalaHots
$1.074
968
0s1
n4
689
Also 1n 2014. our commercial lending team fundod over $205 million in new loan commltmenl1. Tha t's record
level performance and, more importantly, a whole lot of money being injected Into our community to (und
business and job growth. As usual, all loans are scrutinized to meet our high credit standards. We've been
pass iona te about creclit quality since the b:::mk opened in 1996 ar:d we've never sacrificed quality to a::hieve
loan growth . Still, our loan growth in 2014 of over 14% and credi t quality metrics were remarkable by any
standard, and ore a reflection of the exceptionally talented leadership and staff in both areas.
CREDIT QUALITY METRICS
Net chcuge-oUa to total loan1
Lo11 allowance to noocurrent loan1
Noncurrant loans to total loan1
BOAA
U.S. Banks
MlBanks
0.02%
0.49%
0.25%
474.73%
72.86%
S7.B6%
0.34%
2.11%
3.SS%
RETURN ON EQUITY
Nationcd rank
2014
2013
2012
201 I
2010
96. 7%
9S.6%
94.6%
93.8%
90.6%
Our morlgage !ending learn has also been working hard to help people purchase and refinanc e homes in our
Bu t at Bankof Ann Arbor, Ifs not just abo ut the numbers. Our top priority Is to help our community thrive
community, generating nearly $100 million in new mortgages in 2014. The fact that we can originate, process.
through our time. eHorl. and financial resources.
and underwrite loan applications locally is a competitive advantage in the highly regulated mortgage Industry.
Most consumers are un[amiliar with the ever-increasing underwriting demands required by the regulatory
community. We make swe we expla in the process every step of lhe way.
Supporting organizations that make our community better has always been vitally important to us. We ur;e
our financial resources lo support over 200 nonprof its, and a number of our team members serve on boards,
committees, and as volunleers at many of these nonprofits.
The revenue generated by our Trust and Investment Group also reached record levels. nearly $4.3 million.
an increa1e of approximately 10% over the year prior. This was driven by continued growth in assets under
administration, whlch we're conHdenl will excee d $1 billion in 2015. More and more compelitors are moving
their client service personnel further and further away from our community. As other institutions trend towards
satellite offices relying heavily on telephonic and inlemet communications. we continue to use old-fashioned,
but highly personal, face-to-face meetlngs.
One parti cularly successful effort in 2014 was t he United Way Pacesetter campaign for
which we had record-level employee contributions and participation. In fact, 32 of our
colleagues contributed to the campaign at a leadership level of greater than $1.000.
Michigan bank celebrates
Columbus Day by
trolling Ohio State
For the seventh year, Bank of Ann Arbor's Sonic Lunch summer concert aerie• brought
�
thousands o! people to downtown for !ree music by top international, national, and local
Our combined bank. assets and assets under administration in our trust area exceeded $2 billion at year-end.
--.·=
performers. Sonic Lunch hos also helped sp:uk significant interest in r ev it alizing Liberty
Plaza in downtown Ann Arbor as a community gathering place.
In 2014, we completed an intensive eight-month brand evaluation of the now former Ervin Leasing Company.
In July, we unveiled a new name, logo, t aglln e, and marketing materials. The new name, Unifi Equipment
Finance, is meaningful because our only reason for being is to become unified with our clients. We're
extremely excited with the progress the UnlFI team has already made In growing the business. By summer.
lease originations had exceeded originations for all of 2013. By year end. they exceeded the prior low years
combined. The small-ticket equipment finance mark.et provides us with a significant amount of granularity,
since our leases are spread out over a large number of companies. With excellent leadership and an energetic
and passionate team. the future for UniFI Is bright.
We continue to grow our social media presence - most notably, Facebook, Twitter, and
YouTube - to support our brand, highlight ow strong commitment t o the c ommunity, and
reach new potential customers. Independent Community Bankers of America. the top
community bank trade association. ranked Banko( Ann Arbor #4 in its "Top SO Community
Bank Leaders in Social Media" and cited our "lre,;h content", "thought leadership", our
advice, and our consistent touch points to ow brand. In addition, ICBA included Bank
o[ Ann Arbor President and CEO lim Marshall, Technology Industry Group President
Michael Cole, and Social Media and Event Coordinator Matthew Altruda among its "T op
Our net income continues to hit new record levels. growing by 20% over the previous year. and setting a
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record for the lUth con•ecutive year. Earnings In 2014 were $11.6 million, nearly $2 million more than the
Our tweets and Facebook posts on Columbus Day, and in welcoming new Michigan
previous year.
football coach Jim Harbaugh back to town. attracled local and national media attention. Ow
combined Facebook "likes" for Bank of Ann Arbor and Sonic Lunch me approaching 28.000 and our Twitter
�. In 2014, we creoied nearly 15 million impressions with folks who saw our messages.
followers are over 9,0
GROWTH IN EARNINGS AND EARNINGS PER SHARE
Earnlnga Un mllllons)
Earnings per share
Book value per share
2014
2013
2012
2011
20to
$11.637
9,674
8.449
6,583
S,097
$
$
13.17
to.93
9.62
7.SS
S.90
85.64
72.00
66.19
57.00
47.84
f
Welcome back. Jim-Bo.
t
To you. our valued ahareholders, we paid a 30% higher dividend than last year. We've grown the bank by
$535 million over the past five years without having lo roise additional funds lo maintain our Hwcll<apitalizcd"
status, the FDIC's highest possible designation. By year-end, shareholder equity was $76 million. With earnings
at $13.17 per share, we continue to be one of the top performing banks in the country.
....
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20 Community B ank Influencers an Twitter."
The expansion and complete renovation of our
40-year-old downtown Ann Arbor office began in
the latter part of 2014. Consequently, our mortgage,
private banking, commercial. and marketing
teams a re working out of temporary ofHces in the
City Center Building, across the street. The first
phase of construction wi.11 be completed be(ore
the end o[ summer. followed by the remodeling
of the lobby and the floor above. which houses
CONSOUDATED BALANCE SHEETS
DECEMBER 31. 2014 AND 2013
2014
2013
ASSETS
Cash and due from financial lnsli1utions
Interest-bearingbalances in banks
Cash and cash equivalenls
Securities available-for-sale
our Trust and Investment Management Group. We're confident that the long-term result will justify the
temporary inconvenience.
Loans held for sale
Loans, excluding covered loans, net
As we set our sights on achieving a sixth consecutive year of record-level performance in 2015, we have
Covered loons
Total loons
several other challenges facing ua.
Federal Home Loan Bank stock. al cost
Continued low interest rates will negatively impact our net interest margin, which was 27 basis points less in
14,329
15,174
183.491
148.563
197,820
163,737
146,458
155,015
2,476
1,355
667,540
584,760
16.417
21.413
683.957
606,173
2.548
2,634
Premises and equipment, net
12,770
12,277
2014 than the prior year. Jn response to the lower margin, we grew the bank, grew earning assets, generated
Cash surrender value of life insurance
14,311
12,686
higher levels of lee income. held operating expense growth to 2%, and posted a lower loan-loss provision. Until
Other real estate owned
521
1.546
rates begin to increase, we will continue to do more of the same.
FDIC indemnification asset
153
1.978
13.405
10.610
$ 1.074.419
968.011
Our lndu•try remains under significant regulatory pressure. Like most other banks, we added staff lo satisfy
Accrued interest receivable and other assets
the Increased level of new regulations. The additions In our compliance area put us in a good position to
continue to grow the bank and so:is
t fy the expeclations of regulators. We will remain ever-vigilant of any new
challenges in the compliance and regulatory areas.
UABILITIES AND SHAREHOLDERS' EQUITY
We face these and any other challenges, though, from a position of strength.
Deposits
For example. our credit quality remains very strong. significantly outperforming industry trends. Our
Noninterest-bearing
262,306
242,975
monthly provision for loan loss should remain at historically low levels for 2015. We will continue to closely
Interest-bearing:
673,343
603,657
Total deposits
935,649
846,632
manage our loan portfolio to maintain our cred!l quality metrics, which compares favorably to the highest
performing banks across the country.
s
Other l:x>rrowings
439
881
The projected loan and equipment financel1ease growth, trust Income growth. and morlgage an d loon fee
Federal Home Loan Bank advances
892
1.053
income should allow for sufficient increases in revenue to bcost earnings in 2015.
Repurchase agreements
44,744
42.333
Accrued expense and other liabUilles
11.531
8.843
5 155
5,155
998.410
904,897
Operaling expense management hos also been. and will continue to be, a primary area of focus.
Our goal remains: Grow revenue and minimize expense growth. With an efficiency ratio of 56%, we need only
$0.56 in expenses to generate $1 in revenue. Our ratio, like so many other metrics, compares very favorably to
our peer group of banks at approximately 68%, and to all Michigan banks at 76%.
We extend a sincere and heartfelt thank you lo everyone who helps Bank of Ann Arbor succeed on a
day�to-day basis: our employees, directors, shareholders, clients, and the community. We look forward to
overcoming the challenges we face-and enjoying our successes-together in 2015.
Timolhy G. Marshall
President & CEO
William C.
Martin
Subordlnated debentures
Total liabilities
Shareholders' equity
Common stoclc. no par value; 2,000,000 shares authorized; 887,584 and
876.396 shares issued and outstanding al December 31. 2014 and 2013
Retained earnings
Accumulated other comprehensive income/(lossl
Total shareholders' equity
Chairman of the Board
All dollar amounts in lhousands except por shoro data. Unaudltad
4,613
4,966
69,736
58,976
l.660
(8281
76,009
63,114
$ 1.074.419
968.0ll
••
CONSOLIDATED STATEMENTS OF INCOME
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
YEARS ENDED DECEMBER 31, 2014 AND 2013
YEARS ENDED DECEMBER 31, 2014 AND 2013
2014
2013
33,979
32,327
Taxable
l,431
l.430
Tax: exempt
2,081
2,230
352
265
37,843
36,252
Interest income
Loons, including fees
Securllies:
Federal funds sold and other
Net income
Interest expense
Deposits
Federal Home Loan Bonk advances
Subord!na!ed debentures
Other borrowings
Repurchase ogreemcmts
Net interest income
Provision for loan losses
Net interest income alter provision for loan lasses
Service charges on deposit accounts
Net gains on sales of loans
Net gains on sales of securllles
Gain (!ass) on sales of OREO
Other
l.521
l,633
24
28
172
174
42
77
149
104
1,908
2,016
35.935
34,236
l 587
2 495
34,348
31,741
425
441
4,259
3,891
l.404
1.427
14
27
363
534
2,291
1,581
8,756
7,901
17,598
16,861
2,869
2,282
Marke ling and business promoUon
l,156
1,170
510
504
5,056
5,061
Unrealized holding goln/(loss) arising during the period
In net Income
Tax effect
Net of tax:
Comprehensive Income
27 189
26628
15,915
13,014
4,278
3,340
l l.637
9,674
Basic earnings per share
13.17
10.93
Dlluted earnings per shore
12.75
10.36
750
Provision for loan repurchase l!oblllty
Other
Income be!ore income taxes
Income tax: emense
Ne! income
All dollaromounlll In lhausands excap\ per share data. Unaudited.
9,674
3,782
{5,845)
Reclassification adjustment for losses (gains) included
Occupancy and equipment
FDIC expense
11,637
Unrealized gains/losses on securities:
Noninteresl expense
Salaries and employee benefits
2013
Other comprehensive income:
Nanin!eresl income
Income from fiduciary aclivil!es
2014
All dollar amounts In thousands except per share data. Unaudited.
(14)
{27)
0.280)
l,996
2.488
(3,876)
14.125
5,798
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
SUMMARY Of SIGNIFICANT ACCOUNTING POLICIES
YEARS ENDED DECEMBER 31. 2014 AND 2013
Common
Stock
Balance, January l, 2013
6,410
Retained
Earnings
$ 49,302
Accumulated
Other
Compiehensive
Income (Loss)
$ 3,048
Tola!
Shamholder:f
Equity
$ 58,760
9,674
Net income
9,674
(3,876)
Other comprehensive Income (loss)
(3,876)
30
30
Exercise of stock options (29,028 shares)
1,022
1,022
Repurchase ol40,816 shares of common sleek
(�969)
(2,969)
Deferred shares plan
Issuance of common stock
(400 shares)
Stock based compensation expense
Balance, December 31, 2013
28
28
445
445
4,966
58,976
63,114
11,637
Net Income
11,637
2,488
Other comprehensive Income (Joss)
Deferred shores plan
(828)
2,488
32
32
Exercise of stock options (56,176 shares)
3,118
3,118
Repurchase of 44,988 shores of common stock
(4,039)
(4,039)
536
536
Stock based compensallon expense
Cash Dlvidand ($1.00 per shore)
Balance, December 31, 2014
1877)
4.613
$ 69.736
(877)
1.660
$
76,009
Nahnn gl Oogral!pp• qnd Prlndplu gl Consol!dgt!gP" The consoUdoted flnoncial statements IncludeArbor Bancorp, Inc. and
Ila wholly owned suhstdk:uy. Banko!AnnAtbor ("Bank"), logether referred lo os "lhe Cotporallon." On fanuaty l, 2013, the
Corporotion, through a newly established Bank substdlmy. Banko!Ann Arbor leasing ("leo:slng Company"), acqu\tedall oI the
sloc:kof the Ervin leasing Company: anAnnAtbor, Michigan based leasing company which provides business equipment dl1eci
fioanclng leases lo compan!os ocross Iha United Slalos. lnlorcompany tronsacllons and ba!am:cs aro olinunolod In consol!dollon.
As of July I, 2014, Ervin Leasing Companyienamed and rebronded to Unifi Equipment Finance.
The Bank provides financial services through Its oUic:as In Washtenaw and Wayne counties. Its prlmorydepostt products ore
checkinQ, savings. and lcrm c:ertillc:ate accounts, and Its primary lending pro:::l ucts ate residential mortgage, commefCiaL and
Installment loans. Substantially all loon s ore secured by specillc Items of collateral Including business assets. consumer assets. and
oomrr.ercial and resldent!ol real estate. Commercial loons ore expected lo be repaid from cash l!ow from opemttons of businesses.
Other financial instruments, which polentiolly represent concentroUons 0£ credit risk. include deposit o=unts in other financial
lnsUluUons and !odoml funds sold.
Subu:qui:nl EycntrThe Corporation hos evaluated subsequen\ events for 1ecognltlon and dlsdosu10 through februory JO, 2015,
which Is the dote the flnonciol statements were available to be Issued.
U1c o! Es ti mgtr:•' Th prcpom linonciol stolamon!s m conlormlty wilh accounting prlnclplas ganorally occcplod in I ho United S!olos
ofAmedeo, management makes eatlmo\es and ossumpl!ons hosed on avo!loble Information. These estimates and ossumptlons
of!ect Iha amounts reporled In the financial s!otemenls and the d!sdosutes provided. and future results cculd dlller. The ollowam:e
!or loo n losses. the reserve for repurchase of sold loons, the carrying amount cl the FDIC IndemnillootlonAsset, lease res!duol
values and the folr values cl ftnandal Instruments ore particularly subject to change.
� Cash and cash equlvalenls includes cash. deposits with other llnonciol lnsUtuUons under 90duys, sho1Menn
Investments and federal funds sold Net c:ash flows are reporled lor C'Ustomer loon and deposit transactions, federal funds
purchased and repurchase og1ccmonts.
ln!crnsl·Bcmlng Dcposlts In Banh• !nterast beating deposits In boni:s mature wllh!n one year and ore coriled al cost. The
balance outstanding at year end 2014 and 2013 was held al the Federol Reserve Bank.
� Debt socuntics oro closslliod os ovolloblo lor solo when !hoy mighl bo sold bororn mofurlly. Securiliesovoilablo for
sale ore corrled at fair value, with umeatlzed holding gains and losses reported In other comprehensive Income, net o( !Ox. Interest
Income includes amortlzatlon of purchase premium or discount. Gains and losses on soles are based on the amortized cost o! the
socurlly sold.
Interest Income !ndudes omo1ttzallon of purc:huse p1em!um or discount. Premiums and discounts on oocurll!es ate omorllred on Um
level·yield method w!lhoul nnticlpot!ng prepayments, axc:eptfa1 mortgage backed secu1llles whettt ptepaymenlll are antlclpa!ed.
Goins and losses on soles ore recorded on the trade dote and determined using the spe:ll!c !denlillcotlon me!hocl.
Management evoluoles sacurltles for olher-thon·!emporory lmpalrmen\ ("QTn"l on at least a quarte1ly basis, and more frequently
when economic or market cond!Uons wormnt such on evaluation. For sec:urlties In an unrealized loss posltlon. monagemenl
considers the ex!enl and duration of the unreol!zad loss, and the llnonclal cond!Uan and neor·lerm prospects of lhe Issuer ondolso
assesses whelher ll Inlands lo sell, or II ls more l!kely lhan not thal II wlll be required lo selL a security In on unrealized !OS11 poslllon
before recovery of Its amortized cost basis. li either of the crllerla regarding Intent or requirement to sell is met. the enUte difference
between amortized cost and fair value Is recognized as lmpa!nnent through earnings. for debt securities !hot do not meal the
olmemenl!oned ctl1eria, lhe amount of Impairment is split Into two components as follows: ll orn ieloted. lo credit Joss, which mu11t
be 1ecognlzed In the lncome 11tatement and 2) olher·lhon·lemporory Impairment (0111) related lo other faclors, which ls recognlmd
In other comprehensive Income. The credit loss ls defined as the d1flerence between the presenl value of the cash flows expected to
btt collected. and the amottli.ed cart ba11is. For equity aecudt!es, thu en Ure amount ol !mpolnmm\ ls 11lC'OQ'nlz.ed through earnings.
fcdpral Homo Ipgp Bgpk !FHI HI Stock- Tho Bank is a mamhorol lhafHt.B sflilom. Mambors ara roqu!rod !oowna c:a1tnlnamount
of stockbased on the level of borrowings and other faclors, and may Invest ln oddl!ionol amounts. FHLB stoc:kls cotrled at cost.
dossifted os o restrlcied security. and perlocl!col\y evaluated hr Impairment based on ulllmo!e :ecoveryof par value. Both cash
and stockdividends ore 1epotled 01! Income.
.Loa.ru..Hi:.ld..t
.J.iu..S tlc: Loo ns orlglnoled and lnlended /or sale Jn the secondary morhl are corrled al Iha lower of cos\ or £air value, In
the aggregate, os determined by outslondlng comm!lments from Investors. Net unreol!zed losses, ii ony. ore recorded as o valuation
ollowanoe and charged lo earnings. Loons are sold with servicing released. Buyeni do not hove recourse against Iha CorporoHon
for subsequent loon !OS!lell. However. incerto!n s!luoUons, the buyer con require the Corporotlon to rnputchose loons.
Loww Loons liiat monagemen\ has the InIen\ and abll!ty lo hold for tha loreseuabla future or unUI maturity or poyu!l are 1epo11ed
at the principal balonett outstanding, net o! pureho� premiums and discounts and on allowance for loon losses. In1e1est Income
is roporlarl on tho tnterosl method and lndudas omotllrotion c[ not daforrcd loon foos and costa ovor tho kxm totm. lnlerost incomo
All dol!ar amounts In thousands except per shore data, Unaudited.
All dolloramounll! In lhousonds except per shore do lo. Unaudl!ed .
SUMMARY OF SIGNIFICANT ACCOUNTING POLICJES !Continued)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
on all loans Is generally dl:lconUnued al the Ume the loan Is 90 days delinquent unless the credit Is well-secuted and Jn process
ofcallecUon. In all cases. loans ore placed on nonaccrualor charged-oil at a n oorUerdole JI collection ol prtnc!pa] or lnleresl Is
groups of smol!er balance homogeneous loons, such as consumer and residential real estale loons are collectively evaluated for
considered doubtful. All Inletest occrued but no\ receivedfor loans placed on nonoccruol Is reversed against Interns\ Income.
Inleresl received on such Joans ls occounled for on lhe oosh·bosls or cos\ recovery melhod, unlll qualllylng for return lo accrual.
modil!ed resulting In o concession. and for wh!ch the borrower !s experiencing flnor.cial difficulties, are considmed troubled debt
Loons ore relurned to 0ccruol s!alus when oll lhe p1lnctpal ond interest amounts conlracluollydue me brought current and [ulure
payments ore reasonably assured.
Cpyornd I.pgns• Loans acquired i n 2010 In a Federal Deposit Insurance Corporation (FD)C)-asslsted transaction are oovered
under a loss sharing agreem•mtandore refoned lo as ·covered loans.· Pursuant lo lhti t"'rm.s or thti loss shoring agreem1mts,
covtired loons are sub/acl lo a stated loss threshold whereby Iha FDIC will reimburse: the Corporat!on [or BO% of IOSStls incuned.
The Corporation will 1eimbursa !he FDIC for Its share of recoverlm: with respect lo losses £or which the FDIC paid the Corporal!on
a mlmbmoomont undor tho loss sharing og1oomont. Tho FDIC's obllgol!on to rolmhurso tho Cotpotc1lion for ]()SS()S with raspcct lo
covered loon begins with the first dollar of loss incurred
Coveted loons warn recorded at fa!r value al the time of acqu!s!t!on. Fair values for covered loons are hosed on a d!scounted
cash flow methodology lhotcons!dered various !actors Including the type of loonond related collalerol, doss!flcatlon status, fixed
or votiobla inleresl role, tl:!!m10I loan and whe!htir or nol lhe loan was omorlirlng, and o discoun\ ralti re!ltJClin11 the Corporolion·s
osoossmont of risk inhomnl in tho cosh llow cs!lmo!os. Covorcd loons woro gruupod tcuolhcr according to s!milor choroc!crisUcs
impalnoont, and accorrl!ngly, they are r.ot sepomtely identified for lmpo!nnenl disclosures. Loans for which the terms have been
res!ructurtngs and classified os Impaired.
Factors cons!durod by manogomonl In dolor mining lmpnlrmont lncluda payment status, collatora\ value, and tho prohoh!Uty of
collecting scheduled principal ond Interest payments when due. Uxlns !hat experience lnslgnllloont payment delays and payment
short!olls generol!y are not clossl!!ed as impaired. Management determines the significance o! payment delays and payment
shortfalls on a case-by-case basis, toking lnlo consideration all of the cl1cumstancas surrounding the loon and the borrower,
Including Iha length of the delay, the reasons for the delay. the borrower's prior payment record, and the amount al the shottfoll In
relolion to lhe prlnclpo\ ond lnleresl owed.
Troubled debt restructurlngs me sepmotely Identified £or lmpo!rmen! disclosures and ore measured at the preoon! volue ol
est!mo\ed future cash flows using the loon's effective rote at Inception. l£ a troubled debt restructuring"" Is considered to be a
collateral dependent loan, the loon ls reported, net, o\ the !oir value of the collateral. For lroubleddebt restructurlngs that
subsequently default, thti Corporct!on dete1mh1cs the amount a( reserve In occordancu wilh the accounting pollcy for the ollowonce
for loon losses.
ond were treated in the aggregate when opplylng various volua!\on technlques.
Tho gonorril componontcovots non lmpahcd l=ns ond la hosed rm h!sloricol loss oxporlanco adju:;\od for currant factors. Tho
AIJlurchose, certain covered loons had evidence of credlt deterioration since orlg!nolion. These loons ore accounted lor
over the most recent five years. For all segments, !he actual loss experience Is supplemented wlthother economic factois hosed on
lndMdually. The Corporation estimates lhe amount and timing ofexpected cash flows for each purchased loan, and the expected
cash flows in excess olomount pold Is recorded as Interest Income over the remaining life of !he loon or pool (occretable yield). The
excess of the loon's or pool's contractual principal and Interest over expected cash Hows Is not recorded (nonocc1etoble dl!lerence).
Over the life ol the loon or pool, expected cash flows continue lo be estimated. II !he present volue oI expected cash flows is less
than the carrying amount. o loss is recorded. ff the presen! volue of expected cosh Hows Is greater lhon the carrying amount. It ls
rocognlzed as port o! future Interest Income.
Dire cl Dnqnclng kl.!se Rr:c.,\ynhln11· The results of the Corpotol!on's equipment loosing acUv!Ues are recorded within loons on the
consolidaled balance shtiel. 'niese direct lino11cing leases provide for lull recovery ol the equipmenl cost over lhe lenn al the lease.
The CorporaHon's nal Investment in direct Hnanclal leases lscomptlood of lhe lollowtng elements: minimum lease payments
receivable, the esllmated unguaranleed residualvalue ol the leased equipment at the lease lerm!nal!on dates, and unamortized
ln!tiol dlrec:t costs, less unearned Income. Estimated guaranteed residual values are revlewed per!odicolly to determine ![ the
cunent ttsthnalc of the equipment's fotr value appears to be below Us recorded estlmu\e. If r�!red, )'esldual vulul!'S urn adjusted
downword lo reflect adjusted estimates of fair market values. Upward adjustments lo residual values me nol permitted.
Unoomod lncomo fa tho amount bywhlch !ho mln!mum !caoo paymonts rccclvnblo plus tho osUmotcd unguarantood ros!dual valua
exceeds the cost of the leased equlpmanlo\ the inception of lhe lease. Uneomed Income ts amortized aver the Initial lease term lo
p1oduce a constant rote ol te\um on Iha net Investment In lhe lease. ln!llol direct costs ol ocqultlng a lease are cop\tallzed when
incurred and amortk.edover the Ille of the lease consistent with the method used lo recognize Interest Income.
The Corporallon evoluotes lhe col!ectablllly o[ !Is leose receivables hosed upon carloln foclors, such as h!sforlcol coltec!lon Irends
and aging categories. Leose receivables ore wr!Uen o/f against theallowance !or loan losses when the receivable Is determined to
be uncollectlb!e.
the risks present for each por!Iollo segment These economic foclots Include consideration of the foliowing: levels of and trends In
delinquanc!es ond lmpo!red loons; levels or and trends In charge-offs and recoveries: trends ln volume and terms of loons: effects ol
any changes In risk selec!!on and underwrll!ng slondords: olher changes in lending pollc!es, proeedures, ond praclk:es; e�perienca,
ob!l!ty, ond depth of lending managemonland other relevant staff; national and loco\ economic trends and conditions; industry
conditions.: ond ef/ects ol changes In credl! ooncan\rolions. The following portfolio SP,gments have been Identified:
Comrnerdol - Loons to businesses \hat Ole sole proprietorships, partnerships, limited liobll!ty companies and corporations. These
loons ore for commercial, Industrial, or p1ofessionul purposes. The riskcharactctlstics of these loons vorybased on the borrowers·
business and industry as repoy:r.ent is typically dependent on cash flows gene ruled from the underlying business. Within this
loon segment. the Corporation has identified loon classes of commercial and industrial commercial realestole and commerc!a\
kmd devolopmant.
Real Estate - Loons to purchase or rellnance single !omlly residences. The risksassoc!ated \vith this oogmenl ore generally
dependent on the ovomU real estate volue environment and Individual payment obl!ga!lons. Real estate Is subject to changes
In market valuation and can be unsloble fora variety of reasons. Within this segment the Corporation hos idenUIJed classes of
resldenllol ond home equ!ly loons.
Consumer-Term loans or lines olcredlt for the purchase ol consumer goods, vehicles or home Improvement The risk
characteristics of the loom1 In Ihis segment vary depending on the type of co\lateml but generally repayment Is expected from a
customercon!lnuinQ'" to generate o cashHow Ihot supports the calculoted poymentobllgat!on. Secondary support could involve
llqu!dution o! t."Ol!ulerol.
Loosos-Dirt:el Flnanca equipment loaoos. Risl:: chamctorist!cs vary hosed horn tho borrower's bus!noss and lnduatty as
tepaymenl Is typ!callydependent upon cash Hows generated !ram the bonower's operations. Secondary support could Involve
All�n..i.u.lll.llU The allo\vance !or loan losses ls a valuat!on ollowonce !or probable Incurred credit losses, Increased
by the provislon lor loon losses and decreased by charge ol!s less rncovetlttS.
hlstorlcol loss experience is de1ermlned by portfolio segment and Is hosed on the actual loss history experienced by the Co1po1al!on
Munogemcnt estltnates the ul!owonce bulom:e
requited using past loon loss experience, the nature and volume of the portfolio, Information aboul specific borrower s\luatlons and
estimated collateral values, economiccondltions, and other factors. Allocat!ons o! the allowance may be made for specific loons,
bul !ho onllro al!owonco Ill ovoilobla !or any loan !hot. Jn monogomonfs judgment, should be charged off. Loan losses aro charged
repossessing the lensed colloleral.
FDIC lndomnjficu� The FDIC lndemnlilcoUonosset results from the loss share aQ""reements In the FD!C<zsslsted
transocllon. The ossel ls measured seporalely from Iha relo!ed covered osse!s as they are nol conlroctually embedded 1n lhe
assets and ore no\ transferable wllh theasse!s should lhe CorporaHon choose lo dispose of them and represenl the acqulslllon
date fair value al expected reimbursements from the FDIC. Puisuont lo the !arms al the loss sharing ag1eemenl, coverad loons
against the allowance when managementbelieves the uncollectlbll!ty of a loon balance Is confirmed.
ore subject to a stated loss threshold whereby the FDIC will reimburse the Corporation for 80% of losses Incurred. These expected
The allowance consists al specific and general components. The specific oomponent relates lo loons !hot ore Individually clossif!ed
reflect a metric of uncerto!ntyofthe Urning and receipt of the loss shoring reimbursement from the FDIC. This asset decreases when
os lmp::Jlred or loans otherwise closslfledos substandard or doubtful. The generalcompor.enl covers r.c>n dassilled loons and Is
based on hlslorleol loss experience od/usled for current Ioc!ors.
A loon Is lmpo!red when full payment under \he loon terms Is no\ expected. Non•homogeneous loan classes such as commercial
and commercial real estate loons and homogeneous loan segments, such as mortgage and consumer loons modified as troubled
debt restructu1lngs or loons ossocloled with non-homogtineous relationships, are lndivkluolly evolualed for lmpo!mamt 1£ a
reimbursements do not Include roimburroblo amounts related to future covered expend!lures. These oosh flows ore discounted to
losoos aie realized and clohns me submUled lo the FDIC or whencustomern repay their loons In full and exptic!OO l=cs do not
occur. This ossel also Increases when esllma1ed future lossea Increase and decreo6e3 when est!tno1ed future losses dec1ease. When
ostlmotod futuro loon losses lncrcaoo, !ho Corpomt!on rcc:orrls a provision for loon lossos ond lncrcasos Its allowonco for loon lOS009
occord!ngly. The resulting increase In the FDIC lndemnlf!collon ossel Is recorded os on offset to the provision for loon losses. During
2Dl4 and 2013, lhe provision for loon losses was offset by S320and Sl.266 telo!ed lo Increases In lhe FDIC lndemn!Ilcotion asset.
loon Is Impoired, o portion of the ullowonce Is allocated so !hot Iha loon Is tepo1led. net. at the p1eoont volue o! estimated futurn
cash flows using the loan's exlstlnQ'" role orot the fair value o!colloterol ii repaymen\ ls expected solely from the collo1eral. Lorge
All dollar amounts In thousands except per shore do1o. Unaudited.
All dollar amounts in thousands except per share data. Unaudited.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES /Continued)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Conlinucdl
otbtHReg!y1qt1 Ownad !OREOJ· Assets acquired through er IIllltead cf loa:n forocloouro ore inltlally recorded ot loir value less
,CQ.w.'1.UUi.cnelyc Ineqmo• Comprehensive Income conslslll o[ net income and other comprehensivu Income. Other comprehensive
)ass e:itlmuled costs to sell. 1£ fair value declines subsequent to lo1l!<:losurn, u valuation allowance is rncorded through expense.
equ!ly.
costs to mill whim ocqulred,establlshlngo llew cost lxm!s. These assets are eubsequentlyoccounted for at lower cl cost or fair value
Oparnt!na cosL'I nf!o1 ocqulslUonara expansed.
OREO acqul!ed by the Corporation lhtough loon defaults by customers oncove1ed loons or acquired by the Corpomllon as pail
income !ndudus unrealized gains and losses on su.::urlU� ava!lablu !or salu which ore also recognized as separate components ol
Lon Cantlngcocios• Loss contingencies, Including claims and Iago! ocilons otls!ng Jn the ordinary courso of hus!nass, om rocordcd
as llobll!Ues when the likelihood o! loss is probable and on amount or longa cf loss co n be reasonably estimated. Management
oI Its acquisition of New Uherty Banklsoo Note 2: Business Comblnotlonsl me covered under the loss shoring agreement discussed
does not believe there now are such molters that will hove a material elfect on the f!nonclol s!olements.
tho FDIC toss shore and oro rol!octcd In Income. Al year-end 2!JM ond 2013. SO omi$155 ol lha Gorporalion"s ORE:O wos subject lo
Re1!r!c!lpps on Cruhl: Cosh on hand or on deposit wllh !he Federal Reserve Bonk cf Sl,521 and $1.312 was required to meal
regulatory reserve end clearing requlrnmenls al year end ::'.0 14 and 2013.
above. Pursuant to the !etms of the != shodng ag1aemen� coveted assets ore subject lo a sloled loss threshold whereby the FDIC
will reimburse the Corporation !or 60% of losses Incurred. Any gains or losses realized at the time of disposal oro portlolly offset by
the loss shoring agreement.
fair Yalur:cf E!ngnc!gl ipdltumenll.:. Fair values o[ llnonc!ol Instruments ore estimated using relevant market lnFormo\ion and
�qulpmi:nl god 1.<:.au:.hold lmnroyemenlg• Lond Is corrled at cosL Premises and equipment ore stoled ot cost less
other assumptions. as more fully disclosed In a sep:ua!e note. Fair value estimates Involve uncertainIles or.cl matters of s!gnlllcont
or the esthnot.m useful llves lor leasehold Improvements. whichever is shortur.
particular Uems. Changes In ossumptlons or In market conditions could s!gnillcantly o!lecl the estimates.
accumulated depreciation. generally compuled on the stra!ght·l!ne basis over the assets' useful llves. and over the terms of the lease
Qmb Surrnndqr Yaluo al J lfo Jnsumnce• ThoC01pornl!on hos pun:haood Hfohmurnnco pollclas on 001lain key oxccutivos. Cash
summdor voluo ol l!fo Jnsuroncc Is 1ocordrn:l. ol lho amount thot can ba 1callzod under tho !nsuronc:o controctot tho balonco sheet
dole, which Is the cash surrender value adjusted for other charges or other amounts due thotore probable otseltlemenl.
judgment regarding in!erest rotes. credit risk. prepayments, and other loctors. especiolly l n !he absence of brood rno1kets !or
Diyjdnnd Bos!ricljan• Banking togu\otions require molnlainlngco!laln cnpl!a\ lovo!s and !nay !!mil tho d!v:ldonds paid by tho honk
to tho holding company or by Iha ho\dina compony ta r.hmoholdnrs.
Reclnsaificalions• Some Items In the prior year financial statements were reclassi!fed to conform lo !he current presentation.
l&na-Term Assa!1• Premises and equ!pmen� olher lnlong!ble assets and other long-term assets 01e rnv!ewed for Impairment when
Reclassillca!!ons had no e!fec\ o n prior year net Income or shareholders· equity.
recorded a\ fair value.
&l..9plion gl Nuw Aecgunl!ng S!gpdg:rds• In Februory 20[3, lhe FASBomended exlsllng guidance reloled lo repor!lng amounts
Bepurchgee Agrccmgnj11• Subs!anl!ol!ya\I repurchase ng1eement UobiHUos represent amounts advanced by various customers.
reporting net Income or other comprehensive income In flnonclol statements. These amendments require a n entity lo provide
events indicate!heircarrying amount may not be recoverable from future undisccunted cash flows. Iflmpolred, the assets are
These balances ore not deposits and ore no! covered by Jederal deposit lnsuronce. SecurU!es ore pledged to cover theiie l!abllll!es.
J'rcrmfersgl Fingnc!gl AsGe!s• 'Ifonsfers of financial osselsare accounted for as soles, when controlover the assets hos been
rcclossUiOO out ol accumulated othorcomprohonsivo income. Thoso amondmonts do not change tho current rcquiromon!s !or
lnformatlon about the amounts reclassified out of accumuloled olhercomprehenstve Income by componenL In addltlon. on
ent!ty Is required to present, eilher on the loce of the statemen! where net Income Is presented or In the notes, signif!conl amounts
reclassified cul ol accumulated other comptebens!ve Income by the respective line Items of nel Income bu! only j[ lhe amounl
rellnquisbed. Control aver transferred ossels Is deerned lo be surrendered when the assets have been isolated from the
reclassified 1s required under U.S. GAAP to be reclasslfied to ne\ Income In its entirety in the soma reporting pedod. For other
cxchango tho tronsforrod assets, end tho Corpo1otlon dOC'll not maintain cifoctlvc control over tho hansfoncd assets !hrough an
mforonoo lo other dlsolosutcs roqu!tcd under U.S. GAAP that provide add!t!onal dcta!ls oboul thoso amounts. These omondmcnts
Corpomlion, tho tronsforco ahtolns tho dght U1no of conditions that constmln II Imm tal::ing ad van logo of that right} to pledge or
amounts that ore not requited under U.S. GAAP to be redass!fied In their entirety lo net Income, on enl!ty Is required to cross·
agreement to repurchase them before their maturity.
ore elfec!lve prospectively for fiscal yeats, and lntedm periods within those years, beginning alter December 15, 2.013. Early
s..m.c.k_E�n.e.nutll!m: Compensotlon cost is recognized for stock options and restricted stockawords issued lo employees,
llnanclal condition.
opHons.
In Decombar 2013. lhu FASB omandcd !ho Glossary of lhu Codilicotlon lo include a slnulu dollnit!on of o public buslnossant!ly for
bosed on the fair value o[ lhese awards at Iha dote 0£ gronL A Black·Scboles model Is ullllzed fo es!lmale the folr value cl sled:.
GompensoUon cost ls recognized over the required service period, generally defined as Iha vesting pedod. For awards wllh graded
vesl!ng, compensation cost is rncognlzad on o s!ralghl·line bosls over the requisite service period for the enUre award.
lncomo TggeB• Income twc expense fa the total of !he current year income tax due or refundable and the chonge In deferwd tux
adoption Is parmltled. The elfecl ol adcptlng !his s!ondard d!d no\ hove a moterlal e!le<;t on the Corporat!on's opeioUng results or
future uso in U.S. GAAP. Tho doFlo\Uon ol a public business enlily will ho used in considodng tho scope of now finonciol gu!donco
and will identify whether lhe guidance does or does not apply to public business entitles. The amendment does not allectexistlng
l'equ\1ements and there Is no elfectlve date. The adoption ol lh!s s!ondo1d dld not hove a material effect on the CompanyS operot!ng
rosul!s or llnondol condition.
0s:;ets andl!obillties. Ikfened toxossels and l!obi!Ulei; me !he expected future \ax amounts £or the tempomry dUferences btitween
lnJonuory2014, the FASB amended existing guidance lo dailfy when a creditor should be conside1ed lo hove tecelved phr
..Jcal
reduces delened tax: assets to Iha amount expected !o he realized.
and tho 1001 estate rccogn!zcd. Thcso amendments dorify that a n in substance repossession or foreclosuro occurs, end a creditor
A tax position is recognized as a benefit only !Ell ls "more likely than not� tho! the tax position would be sustained In a lox:
upon e!ther. 11) the cred!lor oblo!nlng legal title to the residentlol 1eol estate properly upon completion of a foreclosure, or (2) the
grealer than 50% lilelyol being realized on exom!noUon. For tax posllions no\ meellng !he Mmore likely \hon natM lest, no lox: benelll
Jn lieu cf foreclosure or through o similar legal ogreemanl. Addillonol disclosures ore required. These amendmenls ore eHecllve
cnnying amounts and tax hoses al ossots and l!obilltles, computed using onoctod lox: m!os. A valuation allowanco. IE ncodcd,
possesis on of rnsidonl!ol tool oatolo propa:ty collotoml!:dng o crmsumcr mmtgogo loan such that tho loon should ho dcrccognlzod
!s considered to have received phys!col possession of resldent!ol reol estate property col!oteroll:dng a consumer morlgoge loon.
ex:ominol!cn, with o tax ex:omlnatlon be!ng presumed to occur. The amount recognized is the largest amount of tax: benellt tho! Is
borrower conveying oil lnlarest In the resldent!ol real esla!e property lo tha cred!tor to sot!sfy that loon through completion of a deed
Is recorded.
for publ!c business enU!les for annual perJods end Interim periods within those annual par!cx:ls begtnnlngafler December 15, 2014.
The Corpotot!on recognizes lnterestond/or penalties related loIncome tax matters In Income tax expense.
Q!f.Bglgpce·ShMI Ejpgpclgl Jostrumentw Financtol Instruments include off balance-sheet credit Instruments. such us
commitments to make loons and stondby lettets cfcredl� Issued to meet customer Ilnom:lng needs. The face omoun\ for these items
represents lhe exposure to loss, before conslderlng customer collolerolcr oblllty lo repoy. Such Iinonc!ol Instruments ore recorded
whon they mo funded.
Earnings Per Shatt• Bos!c earnings per shorn ls net Income divided by lhe weighted overage number ofcommon shores
outslondlngdudng the pedod. Diluted earnings per shore Include lhe dilutive effect cf oddlt!onol potential common shares tssuoble
under equity hosed plans.
Amendments In thls stondord con be applied using a modified retrospecUva or prospective transition methcx:I. Early adoption ls
perm!lted. The adoption ol this standard ts not expected to hove a ma!edol effect on the Compony"s operating results or llnonciol
cond!tlon.
In Moy2014 the FASS amendOO existing guidance re\alOO la revenue from con1mcis with custame1s. 111\sumendment supersedes
end replaces nearly all existing revenue recognition guidance. Including lnduslry·speclflc gu!donco. establishes a new conltol
bosod :ovonuo mccgnll!on modal, changos the basis for deciding whon rovonuo is rcccgnizod ovor limo er at a poln\ In Hrno,
provides new and more detailed guidance on speclflo !epics and ex:p:mdsand Improves disclosures about 1evenue. In oddllion.
!his amendment spec!f!es lhe accounting for some costs to obtain or fulf!ll a contract with a customer. These omendmenls ore
elfectlva for annual IeportJng periods beginning ofter December 15, 2016, lnclud!ng Interim periods within that reporting perJoel.
Early oppllco\lonls net permitted. The amendments should be applied retrospectively 1o all periods presented or retrospectively
wllh lhe cumulaHve effect recognized ol lhe dole o[ ln!llol oppllcotlon. The Company Is currenlly evoluollng tho Impo cl of !his new
occaunUng standard on Iha consolidated financial s!olornonts.
All dollor amounts In thousands excepl per shore data. Unaudited.
All dollar omounts In thousands except per shore data. Unoudtted.
ADDITIONAL INFORMATION
Ervin Leasing Business Combination
We hove Included ltnonciol inlormotion for Iha yaarendftd Decamber31. 2014. Our full ftnanc!ol statements Including no!es wem
On January l. 2013, the Corporot!onacquhed 100% of the outstanding common shares of Ervin Leos!ng Corporation In exchange
for cash lotoling $4,622. Under the !erms of !he acqulsltlon. oll common shareholders rncelvt.>d cash equal ta tatul equity o! Ervin
Leoslng as of December31, 2012 plus .$600. Ervin Leosing Company results of operotlons ware Included In the Corpoml!an"s rnsults
bog!nnlng Janumy l. 2013. As al July l, 2014. Ervin Locm!ng Company ronamcd and rabmndod to Unifi Equlpmon\ Flnanco.
audited
by Crowe Horwath, our independent publk:ac:countont, ond Crowe Horwath goveon unquallfled opln!on. The comp!e!o
audited flnondol stataments Including the oudUor"s op!nlon and notes ore avo!loble upon request.
11 you would lil:.e o copy of the audl!ed financial stolemenls or If you have any quesUons concerning the annual meeting, p!ease
conlact your bank pms!donl TImothy G. Marshall at 125 South Filth Avonuo. P.O. Box 8009, Ann Arbor, Michigan 4BID7.
The following !able summarizes the cons!detollon paid for Ervin Leos!ng Company ond Iha omounts ol lhe assets ocqulrnd and
llob!Ui!as ossumad recognized al \he ocqu!s\Uon dote:
Cons!deral!on
Ca•h
Fo!r Value of Total Conslderollon Transferred
4,622
4,622
Recognized amounts of Identifiable assets ac:gulred and Uabllit!es assumed
Gosh and cash equivalents
Direct llnonc!ng leases
Noncompeta agreement
100
l.098
Dlharossels
Tola! assets a
366
1 1 ,304
ired
Notes payoble
Other l!ab!HUes
12.BSB
7,514
732
Totol l!oblllt!cs assumed
8,246
Total idenl!floble net assets
4,622
No goodwill or olher lnlanglble ossels, beyond lhe noncompale agreement above, warn generoled as par\ of lhe Ervin Leosing
business combinotlon.
New Llbe1ty Business Comb!nat!on
On May 14, 2010. the Corporation enterec:l into a purcha:ie nnd ossutnpt!on agreement (Naw Llbetty Agreement) with the Federal
Deposit lnsuranco Corpomlion !FDIC). as rncclvor, purs1mnl to which tho Corpomt!on m:qulrcd cctla!n as.�ts ondassumcd
subslont!a\Jy oll o[ the deposits and cetla!n l!ob!Utias of New Llbarty Bon\:;(Naw Liberty). New Liberty operoted one bonklngcan!ar
In Plymouth, Michigan.
In connect!on with the New Liberty ocqu!s!l!on. the Corporat!on entered lnlo a loss shoring ograamenlwlth the FDIC that covers
mos! of New Llbarly's ossels, hosed upon the seller's records, Including single family reslden!tal marlgoge loons, commerciol rool
es1ate and commercial and !ndustriol loons, and OREO (collect!vely, covered assets). The loss shoring agreements are subject lo
certa!n servicing procedures as spedfled in agreements wllh the FDIC. The loss shoring agreements opplicable to s!ngle family
residential morigoge loons provide for FDIC loss sharing ond Corporation reimbursement to tho FDIC for ten years. The Joss sharing
agreemen!s oppllcoble to all other covered assets provide for FDIC loss shoring for llva years and Corporation ralmbursomonl
of recove1les lo !he FDIC far elght yeurs. The eXp!..>cted Je!mbursements under the loss sharing ug1eements were recorded us
an lndemniUcoHonosset al an esHmated fair value of $15.949 on the acqutsiliondote wh!ch represented the present volue oI the
oxpoctcd nelcnsh rohnbursomon\ rolalod lo tho lo.'lS shoring o:gmomonls.
The CorpotoHon acquired cetla!n olhar New Llbarty assets nolcova1ed by Iha loss shoring ogreemenl wl!h Iha FD!C, includlng =sh
and secutl!les purchased ot lalrvolue. At acqu!s\Uon, lnogg1egole, loons ocqul!ed hod on unpaid principal balance o!S9!,mand
a la!r volue o!$69JXl9 and deposits assumed hod o bolonee of $90,l 17.
Alldolloramounta In lhousands except par share dala. Unaud:l\ed,
All dollar omounts In thousands except par share data. Unaudited.
Directors
Officers
Executive Management
Timothy G. MarshoJI
President&
Chief E:xeculive Ofllcer
Charles E. Crone, fr,
Execullve Vice President &
Chief Revenue Officer
Pall! H. Jud11on
E'xecuUve Vice Presfdenl &
Chfef OperaUng Officer
Lyle r. Dahlberg
First Vice President,
Trust & Inves/menl
Group Manarier
Joan C. Hendrlck1
Sonia S. Perle!
Mork D. Bally
Unifi Eq1.1i.pm•nl Finance
Vice President &
Main Office Brandi Manager
Senior Vice Presidenl &
Investment 0{[/cer
Vice Presldenl &
Commercial LoonOfflr::er
Raymond J, Grimshaw
Kevin M. Kramer
Cothlcon L. Savoie
Jonathon P. Bowdler
Vice Pzesidenl,
Pcivale Banking OWr::er
Senior Vice Prosldont &
/nvestmenl O/ffr::er
Vico Prr.:sidcnl &
Commercial Real Estate Manager
Denise J. Sialleld
Margaret L Vogel
Jomes J, Plummer
Vice Pres/den/ &
Marlgage Loon Officer
Vice President & Trusl Of!Jcer
Vice President &
Cormnerciol Loon O!licer
President &
Chief E'xecutive Officer.
Synergy Partners, LLC
Dennis D, Ticknor
Vice President, Trust Operations
Mork H, Holtz
Timolhy G. Marshcrll
E//swor!h Ofnce Branch Manager &
Health Savings Account Specialist
Eric P, Helbm
VicePresidenl,
TechnoloQy Industry Group
President &
Chief E'xeculfve Olflcet,
Bank of Ann Arbor
Information System1
Michael C. Martin
Jeffrey J, Stanton
Vice Presidenl,
Firs! MarUn Corporal/on
David K. Pote
Ypsilanti Of/Jee Branch Manager
Erin E. Archambault
Vice Presidenl &
Director of Business Development
Deborah A, Jones
Cynlh!a }.Livesay
Shelley L. Rankin
Firs/ Vice Presidenl,
Credi! Administration
Saline Office Branch Manager
Vice President &
Business Developmen! Officer
foseph D, Croigmile
Jacqueline Jenkins
Mark J. Slade
Motlgor;c Loon Of/Jeer
First Vice Presfdenl &
Chief Financial Ofllcer
Kevin C. Salley
Vir::a Presidenl, Portfolio Manager &
Businoss Dovclopmcnl O!llcor
Mortgage. Retail &
Privat• Banking Services
Patrlck A. Tamblyn
Senior Vice President,
Private Banking Manager
Klrsly E. Haholan
Vice Presldenl &
Mortgage De[Xlrlmenf Manager
Mor/gage Loan Of/Jeer
William E. Smith, fr.
Mortgage Loan Of/Jr::er
Sondra L. Bccver
Deposit Operations Offir::er
Stoey B. fohnson Sr.
Relolionsl1ip Banking Ollicer
Kimberly K. Snow
Vice Pres/den I &
ChiefTechnalogyO/ficer
Marketing
Mllz.l J. Talon
Jonke M. Ortbrlng
Vice President & Trust Offlr::er
Vice President &
Marketing Department Manager
Diano S, Winner
Cwdil Administration
Trus/Off/cer
Dawn M. Prescott
MarkA. Sklfl
Senior Vice President &
Managed Assets Offir::er
lnveslmenl Oflic:er
Trina M. Vo:nNesl
Relalionship Banking &
Cash Management Oflfcer
Commercial Lending
Vice Pres/den/.
Administration & Opemtfons
FinanC9
Pres/den!, Saline District
Kimberly A. Clugston
Lha A.Mason
Michael L Michon
Vice President &
Senior Mortgage Loon Officer
Vice Presidenl & Infernal Auditor
President. Plymouth Districl
Jame$ A. Miller
Michael H. Chotos
Linda S, Brewer
Vice President &
Dfreclor, Human Resources
President, Ypsilanti Districl
Mlr::huel A. Cole
Pamela f. Wetzel
Bmbcrro L. Morrison
Group President.
Technology Industry Group
Credi! Atlminislrolion Officer
Bella M.Femondez.
Sall sh B, Jost!
Compliance
Assis/an! Vir::a President &
Accounting Oflicer
Senior Vice President &
Senior Loon Officer
Amnndo; M. Harl
Vice President &
Private Banking 0/ffcer
Mary Hays
Vice Pres/den/,
Private Bonling Officer
Chmles W. CracrcrH
Vice President,
Befall Moitgage Soles Manager
Curl D.Ent
Vice President &
Mor/gaga Loan Officer
Christine G, Hold
Vice Presfdenl, Cash Management
Krl�tlna L. Moyer
Vice Pres/den! &
Plymoulh Branch Manager
Walto r G . Bye:s
VicePresiden!
Hons W. Maler
Trust & Investment Mo:nagemcnl
Thomas R. Kalloword
First Vice President &
Senior Trusl Olflr::or
Stephen J, Seymour
Senior Vice Pres/den! &
Senior Investment Olflcer
Senior Vice President.
Speclol!Y Banking
David A. Guenther
Vice President &
Sonier Loon Officer
Robert R. Roiie
Vice Prcsldenl &
Senior Loon Ofllcer
Thomaii J, Conzolmmm
Secretary, Treasurer &
Chief Financial Officer
Ptes/denl, Midtown Group, Inc.
Jan L, Garfinkle
founder & Manar;lng Director,
Arborelum Ventures
Isadore J. King
William C. Martin. Chairman
Athletic Director Emeritus,
University of Michigan
Erneel G, Perich
Pres/den/.
Perich + Partnets, Ltd.
David R. Sams
Vice President & Investment Officer
Sarah Dobson Campbell
President &
Chief I:'xccul/va Olliccr
Thomas P. Bo1dere
Vice Prell/den! &
Credi! Manager
Stephania N. Hnnigan
Assistant Vir::e President,
Consumer Credll & Compliance
Soro L. Hoffman
Assistant Vice President &
Small Business Lending Offir.er
Susan E. Wcrgnor
Mcrnaging Partner,
360 Advisors, LLC
Joseph A. Sos!
Owner, Ses/ Mo/ors, Inc.
Cynthia H. Wilbanks
Vice President for
Government Rela!lons,
University of Micbfgan
Jelfrey S, Williams
Chairman &
Chief f:'xecu!lve Offfcer,
Tangent Medical Technologies
NeuMoDx Molecular, Tnc.
Directors EmcritU6
Jomes W.Andorson. Jr,
President,
The Anderson Assodoles
Richard P. Eldswick
Vice Presfden/, Compliance 01/icer &
Compliance Department Manager
Foundfnr:;r Diteclor,
Arbor Partners
John E. Fosler
Jun Barney Newman
Vice Pres/den I, BSA, OFAC &
Security Ol/ir::er
Brion J, Powers
Asslstanl Vice Pies/den/,
BSA & Security Specialisl
Cynthia K, Shacllor
BSA/Security
Admlnlstra!lve Of/icer
Vice Presiden!,
Ann Arbor Dlslrfcl Ubrary Bocrrd
Rlchord N, Robb, DDS
Regan/ Emeritus,
Eastern Michigan University
boaa.com
Ellsworth Rd.
& Airport Blvd.
801 West Ellsworth Road
Ann Arbor, MI 48108
734.669.8900
Stadium Blvd.
125 South Fifth Avenue
Ann Arbor, MI 48104
734.662.1600
Downtown Saline
Plymouth
Traver Village Shopping Center
1333 West Ann Arbor Road
Plymouth, MI 48170
734.455. 1 5 1 1
Ann Arbor, MI 48105
Downtown Ann Arbor
1 79 East Michigan Avenue
Saline, MI 48176
734.470.5001
Downtown Ypsilanti
7 West Michigan Avenue
Ypsilanti, MI 48197
734.485.9400
& Liberty St.
2204 West Stadium Boulevard
Ann Arbor, MI 48103
734.822. 1 900
2601 Plymouth Road
734.662.3800
@
EQUA.l HOUSIMG
LENDER
Arbor Bancorp, Inc.
Form Y6: December 31, 2014
Item l a)
l OK
Item 1 b)
Annual Report (Enclosed)
Item 2)
Organization Chart (Enclosed)
Item 2b)
Branch Verification (Enclosed)
Item 3 a)
Shareholders voting greater than 5%
(Not applicable)
Address
Name
Thomas P. Borders
William C. Martin
Citizenship
# of
# of
%
Shs.
Options
Owned
Austin, TX. 78703
USA
65, 1 6 6
6, 000
7.34%
Ann Arbor, :tvJI. 48 1 0 5
USA
1 3 0,832
7,500
14.74%
Item 3b)
NIA
Item 4)
Directors and Officers (See Attached)
A r b o r B a ncorp, I n c .
Ye a r E n d e d Dece m be r 3 1 , 2 0 1 4
M a r c h 1 5, 2 0 1 5
Arbor B a n co rp , I n c .
A n n Arbor, M i c h i g a n
State of I n c o r poration - M i c h i g a n
Arbor Bancorp
100% Owned
Statuto ry T r u s t I
State o f I n corporati on - C o n necti cut
Ba n k of A n n A rb o r
100% Owned
State of I n c o rporati on - M i c h i g a n
I
B OAA Leas i n g L L C
Manag i n g Member
100% Owned
State o f I n c o rporati o n - M ic h i g a n
I
U n i F i Eq u i pm e nt F i n a n c e
C o m pa ny
State of I n c o rporati on - M i c h i g a n
100% Owned
Results: A list of br.inches foryour depository Institution: BANK OF ANN ARBOR (I D_RSSO: 2390929),
This depository Institution Is held by ARBOR BANCORP, INC. [2454380) of ANN ARBOR, Mf,
11ie data are as of 12/31/2014, Oata reflects Information that was received and procesud through 03/13/2015,
Recond!!atlon and Verllleatlon Slel!i
1.
2.
In the Data Action column of each branch rcw, enlerone ormore of the 1ttlons specified below,
If required, enter the date Jrt tM Effective Date column.
�
OK: If the bnioch Joformatlon ls correct, enter'OK'Jn the Data Action column.
Oiaoge! ]fthe branch Information ls Incorrect orlncomplflte, revise the dat11, enler'Chance' In the Data Action column and tM date when this Information first bea� valid In the Effective Date column.
dose: lf a brar>ch l!sted Wll5 sold orclosed, enter'Oo5'' In the Data Actfon coiL.1mn and the sa!e ordosure date In the Effective Date column.
Delete: lf a branch listed was never owned by this depository Institution,
eniur 'De!ete'ln the Data Action column.
Add: [fa reportable b111iclt Is missing, Insert a row,add the braoch data, and enter'Add' In the Data Action column and the opening or;icqulsltlon date In the Effective Dale column.
lfprfnt!n&: thls Hsi, you m•Y need to adjust yourp•ge setup In MS Excel. Try us!ng Jandsc1pe orientation, pace sc.1tln11, and/orlegal.1lzed paper.
Submission Procedure
When you •re finished, send • saved copYtoyourfRB contact. See the detaRed Instructions on this site for more Information.
lfyou are e·m•tlfng this toyourFRB contact, putyourlnsl!\utlonname, city and state In the sub/eel line of the e·man.
Note:
To satisfy the FR Y·lO reporting requlremeots, you must abo submit FR Y·10 Domestic Br.inch Schedules for eacll branch with • Data Action of Change, dose, Delete, or Add.
The FR Y·lO report may be .1ubmltted In a hardcopy format or via the fR Y·lD Online appllcatlon -https://ylOonllne.federa!ruerve.gov.
•
FO!CUNINUM, Office Number, and ID_RSSD co!umris are for reference only. Veriflc;iUon of these values ls not 1equlred,
Data.Action
Effective Date
Brandi ServkcTvne
OK
Branch lO RSSO'
fuUServke (Head OffK:e)
'"°'"
Street Address
mv ·
St•te ZloCode
Countv
Countrv
BANK OF ANN ARBOR
125 SOUTH flFTHAVENUE
ANN ARBOR
Ml
""'
WASHTENAW
UNITED STATES
56263
0 SANKOFANNARBOR
2390929
nuwoRrn omce
801 WESTEUSWORTI-1 ROAD
ANN ARBOR
Ml
48108
WASHTENAW
UNITTD STATES
457989
5 BANK OFANN ARBOR
2390929
Ml
Ml
48103
WASHTENAW
UNITED STATES
419761
4 BANKOFANNARBOR
2390929
48105
WASHTENAW
UNITED STATES
3SB945
l
2390929
WASHTENAW
UNITED STATES
Popular Name
OK
Fun service
3717466
OK
FullServke
3528644 STADIUM OFFICE
2204 WEST STADIUM BOULEVARD
ANN ARBOR
OK
FuOService
3528626 TRAVERVIUAGEOfflCE
2649 PLYMOUTI-1 ROAD
ANN ARBOR
3500 WASHTENAWAVENUE
ANNARBOR
FO!CUNINUM'
Office Number•
Head Office
BANKOFANNARBOR
Head Office ID RSSD'
WASHTENAWOFFICE DRIVE UP
nose
OK
AOD
OK
·
FuUServlce
3528608 CONVENIENCE CENTER BRAN�
Fu!IServfce
4131087 PLYMOUTH BRANCH
l/l/2014 FuUServlce
Full Service
SALINE BRAN�
3528595 YPSILANTI BRAN�
Ml
48104
1333 ANN ARBOR ROAD WEST
PLYMOUTH
Ml
48170.12' WAYNE
UNITED STATES
179 EA5TM!CHIGAN AVENUE
SAUNE
Ml
48176
WASHTENAW
UNITED STATES
7WEST MJCH!GAN AVENUE
YPSILANTI
Ml
48197
WASHTENAW
UNITED STATES
Not Required
82015
359737
Not Required
BANK OF ANN ARBOR
2390929
BANK OFANNARBOR
7 SANKOFANNARBOR
""'"'
""""
2
2390929
6
BANKOFANNARBOR
Comments
FORL"\1 Y6 (as of Dec 2014)
Item 4): Directors and Officers
Name:
Address:
P1incipal Occupation:
Thomas P. Borders
Austin, Texas
Business Owner/Investor
Title
Position
No. Of
Shares
Percent
Owned
Arbor Bancorp, Inc.**
Director
65, 1 66
7.34%
Bank of Ann Arbor
Director
Other Affiliates:
Midtown Group, Inc.
50%
President
\Vhich includes:
Midtown Realty, LLC
610 Guadalupe, LLC
�
City Hall LLC
Member
22.65%
Hogarth Management, LLC
Member
50%
Douglas Lake LLC
Member
100%
Arbor Green II, LP**
Partner
23 %
The Tapestry Foundation
Director
Limited
Partner
49.5%
Texas One Capital Mgt. LLC
Member
30.00%
Sixth Street Film, Ltd
General
Partner
1 00%
Sixth Street Management
President
1 00%
214-2 1 8 South State St., LLC
Member
7.575%
6559 Partners, Ltd
Partner
49.5%
Whistler Goods, LP
Partner
.01%
SSF Seventeen, LP
Partner
99%
HVAC Acquisition, Inc.
Member
20%
BCL Walker, LLC
Member
3 6.6%
Rivercity Live, LLC
Member
35. 1 %
Greenhill Recreation, LLC
Manager
MTG Portfolio, Ltd
**The bank stock is owned by Arbor Green II, LP, of which :tvfidtown Group, Inc. is the General Partner
owning 1 %. Mr. Borders is the President of Midtown Group, Inc. and also a
Arbor Green II, LP.
Signature:
Acici ' I
�
, A�ffiJihJ11-v
Date:
I'
:;. :J. ').:)... R 0 s e woeic9
i f:io \ C()Qs1
�Q r i'\1-.Q!
I
.
u....c_
LuM .
23% limited partner of
/.) - J '7 - / L{
/v(a..nO!) e.r
LLC
l"\CL(l o.. C\ ef
�
,.
...
.
FORM: Y6 (as of Dec 2014)
Name:
Address:
Principal Occupation:
Ann Arbor, 1vlichigan
Venture Capitalist
Title
No. Of
Position
Shares
P ercent
Owned
Arbor Bancorp, Inc.
B ank of Ann Arbor
Other Affiliates:
Director
Director
1 ,500
0 . 1 7%
Arboretum Ventures
President
Managing
Director
Managing
Director
Managing
Director
Managing
Director
Managing
Director
Managing
Member
Managing
Member
Managing
Member
Managing
Memb er
680
68.0%
n/a
1 .0%
n/a
1 .0%
n/a
20.0%
n/a
0.0%
n/a
1 .2%
n/a
68.0%
n/a
48.0%
n/a
48.0%
n/a
3 8.0%
Arboretum Ventures, II, LP
Arboretum Ventures, Ila, LP
Arboretum Ventures, I, LLC
Arboretum Ventures, I-A, LLC
Arboretum Ventures, ill, LP
Arboretum Investment Manager,
LLC
Arboretum Investment Manager II,
LLC
Arboretum Investment Manager Ila,
LLC
Arboretum Investment Manager III,
LLC
Signature:
Jan L. Garfinkle
1-�+-\·2,rv.--'-._ �
-·_tU��
'----+- -Le-·
D
u
,_
"
Date:
_d-�)_;;_
+/_f_:)
_
..
,
FORM Y6 (as of Dec 2014)
Name:
Address :
Isadore J. Kine:
Ann Arbor, Michigan
Health Care Executive
Title
Position
No. Of
Shares
Percent
Owned
Arbor Bancorp, Inc.
Director
300
0.03%
B ank of Ann Arbor
Director
Other Affiliates:
Synergy Partners, LLC
President &
CEO
Date:
Name:
Address :
Arbor Bancorp, Inc.
Bank of Ann Arbor
Timothy G. Marshall
Ann Arbor, Michigan
Bank CEO
Title
Position
Director &
CEO
Director &
CEO
No. Of
Shares
Percent
Owned
1 1 ,950
1 .35%
Other Affiliates:
None
Signature:
.%vt �
y
Date:
_.?1-__,__/;�
'/J)
'-_
--'lS_
,
/
FORi\1 Y6 (as of Dec 2014)
Name:
Address:
Arbor Bancorp, Inc.
Bank of Ann Arbor
Other Affiliates :
Huron Ashley LLP
Traver Village LLP
South First Associates LLC
First Properties Assoc. LLP
Millcreek One LLC
Mill Creek II Assoc.
3965 South State Associates LLC
Commonwealth LLC
Keweenaw LLC
3 1 7 Maynard LLC
3 3 0 East Liberty LLC
520 East Liberty LLC
555 South Forest LLC
320 South Division LLC
Rabbit B ay LLC
1 900 1 948 Walnut LLC
20 1 Depot LLC
Long Timber Ranch LLC
Traverwood Apartments LLC
1 1 6-120 W. Huron LLC
2001
Micha el C. Martin
Ann Arbor, Michigan
Real Estate Developer
No. Of
Title
Shares
Position
D irector
2 1 ,000
Percent
Owned
2 . 3 7%
Director
Member
Member
Member
Member
Member
Partner
Member
Member
Member
Member
Member
Member
Member
Member
Member
Member
Member
Member
Member
Member
'
D ate
24.50%
32.00%
1 9%
25%
26. 1 1 %
3 5 .63%
32%
1%
20%
35.05%
15%
15%
1%
1%
24.50%
25%
50%
1 0%
25%
25%
t ��_Q.___,_/_g_ep_)_
FORlVI Y6 (as of D ec 20 14)
Name:
Address:
\Villiam C. Martin
Ann Arbor, Michigan
Real Estate D eveloper
Title
No. Of
Position
Shares
Arbor Bancorp, Inc.
D irector
B ank of Ann Arbor
D irector
Other Affiliates:
First Martin Corporation
C-3 Partners
Depot Street B enevolent Assn.
Homestead Commons LLC
Homestead Office LLC
Huron Ashley LLC
Traver Village LLC
Second Properties Assoc. LLC
First Properties Assoc. LLC
Main/Washington Assoc. LLC
Green Road Assoc. LLC
Mill Creek One LLC
Mill Creek II Assoc.
Traverwood
EPA LLC
Traverwood Properties I LLC
City Hall LLC
Trackside Restaurant Corp.
3965 S outh State Associates LLC
200 1 Commonwealth LLC
Keweenaw LLC
API Properties 8 1 5 LLC
Traverwood Properties rvIDI LLC
Traverwood Properties II LLC
3 1 7 Mavnard LLC
240 1 , LLC
Traverwood Properties III LLC
3 3 0 East Liberty LLC
Owner
Member
Member
Member
Member
Member
Member
Member
Member
:tvlember
Member
Member
Member
Ovmer
Member
Member
Member
Member
Member
Member
Member
Member
Member
Member
Member
Member
Member
Member
1 3 0, 83 2
Percent
Owned
1 4 . 74%
1 0 0%
50%
50%
9 8 . 9 5%
72%
49%
34%
8 1 .3 3 %
48%
49%
98%
47.79%
1 8 .75%
1 00%
50%
50%
63 .73 %
48.90%
25%
49%
58%
1 00%
50%
50%
9 .9 0%
50%
50%
35%
�· ·
East Liberty LLC
555 South Forest LLC
320 South Division LLC
Rabbit Bay LLC
Dreamland LLC
South First Associates LLC
Martin Family Foundation
First Charter Service Corp
Traverwood B ank LLC
Traverwood Apartments LLC
1 1 6- 1 20 W. Huron LLC
520
Member
Member
Member
Member
Member
Member
Owner
Owner
Member
Member
Member
Date:
35%
49%
49%
49%
5 0%
48.798%
1 00%
1 00%
50%
25%
25%
�
d-/..d-_
.._ (p_
/t-\
_
_
_
Name:
Address:
Arbor Bancorp, Inc.
Bank of Ann Arbor
Ernest G. Perich
Ann Arbor, Michigan
Advertising Agency Owner
No. Of
Title
Shares
Position
Director
Director
1 0,200
P ercent
Owned
1 . 1 5%
Other Affiliates:
Pe1ich + Partners
S ign
Owner
1 00 %
FORlVI Y6 (as of Dec 2014)
Name:
Address:
David R. S arns
Ann Arbor, Michigan
Private Investor
Title
Position
Arbor Bancorp, Inc.
Director
Bank of Ann Arbor
Other Affiliates:
Director
3 60 Advisors
SI Company
NuStep, Inc
Morgan & State
Ridge.Run III, LLC
State & Vei1ture, LLC
P cindview Properties, LLC
NuStep IC-Disc, Inc
Managing
Member
Manager
Shareholder
Shareholder
Member
Member
owned by
parents
Shareholder
pate:
No. Of
Shares
P ercent
Owned
27,48 8
3 . 1 0%
1 00%
5,000
49%
20%
11%
1 00%
20%
0%
20%
Item 4) : Directors and Officers
Name:
Address:
Joseph A. Sesi
Ann Arbor, Michigan
Car Dealership Owner
Title
No. Of
Position
Shares
Arbor Bancorp, Inc.
Director
Bank of Ann Arbor
Director
7,500
Percent
Owned
0.84%
Other Affiliates:
Sesi Lincoln Mazda Volvo
LMV Properties
Madison Plaza, LLC
Sesi Real Estate Investment
Sesi Agency Incorporated
Owner
Owner
Owner
Date:
1 00%
1 00%
33%
1 00%
1 00%
3
-
9 <JO/$,.-
Name:
Address:
Cynthia H. \Vilbanks
Ypsilanti, Michigan
University Administrator
Title
No. Of
Position
Shares
Arbor Bancorp, Inc.
Director
Bank of Ann Arbor
Director
Other Affiliates:
None
2,500
Percent
Owned
0.28%
Name:
Address:
Jeffrey S . Williams
Ann Arbor, Michigan
Managing Director
Cavanaugh Lake, LLC
Title
Position
No. Of
Shares
Percent
Owned
Arbor Bancorp, Inc.
Director
1 ,000
0. 1 1 %
B ank of Ann Arbor
Director
Other Affiliates:
Tangent Medical Technologies
NeuMoDx Molecular, Inc.
Chairman &
CEO
Chairman &
CEO
Date:
l (i
K�
7A' tS:-
Name:
Address:
Charles E. Crone
Ann Arbor, lvlichigan
Loan Officer
Title
Position
Arbor Bancorp, Inc.
VP
B ank of Ann Arbor
EVP & Chief
Revenue
Officer
Other Affiliates:
None
Signature:
-7'-----�
"-"-==-I'.>�==-;;�/_;-�
-··_
_
�
No. Of
Shares
Percent
Owned
1 ,674
0 . 1 9%
Name:
Address :
Arbor Bancom, Inc.
Bank of Ann Arbor
Mark J. Slade
Ann Arbor, lvlichigan
Bmlk CFO
Title
Position
VP & CFO
1st yp
No. Of
Shares
Percent
Owned
3,684
0 .42%
&
CFO
Other Affiliates :
None
Signature:
�
-'---
-
0---
_
_
_
_
_
_
Date:
2-�/_/_?-'-j_,_/�s
<-----
__
·· .
. . ,.1
flT
.
,.
'
FORl\'I Y6 (as of Dec 2014)
Name:
Address:
Cynthia J. Livesay
Ann Arbor, Michigan
Credit Officer
Title
Position
Arbor Bancorp, Inc.
Bank of Ann Arbor
Other Affiliates:
None
Signature:
"'-A
'-"---4
-"" ---=-"�
�-----·
__,C
LO:=
No. Of
Shares
Percent
Owned
2,977
0.34%
VP
1st yp
_
_
Date:
_,
L,
�·_\",·-'.
\S
---'-- �
.
_
_
_
_
FORl\1 Y6 (as of Dec 2014)
Name:
Address:
Lyle F. Dahlberg
Ann Arbor, Michigan
Trust Officer
Title
Position
No. Of
Shares
P ercent
Owned
VP
1 ,583
0.18%
Arbor Bancorp, Inc.
Bank of Ann Arbor
1 st yp
Other Affiliates:
None
Signature:
_._W
--"-'--'---' --'�=--v�_L_(�
_,..,___
_
_
_
Date:
__:l�}i_,_6�/_:z.._u_/____
S-
Name:
Address:
Patti R. Judson
Ann Arbor, Micbigan
Bank Officer
Title
Position
No. Of
Shares
Percent
Owned
Arbor Bancorp, Inc.
VP
2,225
0.25%
Bank of Ann Arbor
EVP & CO O
Other Affiliates:
None
,_ /1i...}h,.__.,
c:::
:;?�
Signature:
�
---'�-+--
-
....__,

-
Date:
J. / 1 J' /1 6
_
_
_
_
_
_
_
_
_