☒ | Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
2020
☐ | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
incorporation)333-201017
(oror 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 ☒ No ☐and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulationand post such files. Yes ☒ No ☐Large accelerated filer ☐ Accelerated filer ☐☒Non-accelerated filer ☐ Smaller reporting company ☒ Emerging growth company ☐
APPLICABLE ONLY TO CORPORATE ISSUERS:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Common Stock | RIVE | Nasdaq Global Market |
July 3
Contents | Page No. | ||||||||
PART I. | FINANCIAL INFORMATION: | ||||||||
Item 1. | Financial Statements (Unaudited) | ||||||||
3 | |||||||||
4 | |||||||||
5 | |||||||||
6 | |||||||||
7 | |||||||||
Item 2. | 26 | ||||||||
Item 3. | 42 | ||||||||
Item 4. | 42 | ||||||||
PART II | OTHER INFORMATION: | ||||||||
Item 1. | 42 | ||||||||
Item 1A. | 42 | ||||||||
Item 2. | 42 | ||||||||
Item 3. | 42 | ||||||||
Item 4. | 42 | ||||||||
Item 5. | 42 | ||||||||
Item 6. | 43 | ||||||||
44 |
(Dollars in thousands, except share data)
September 30, 2017 | December 31, 2016 | |||||||
Assets: | ||||||||
Cash and due from banks | $ | 8,425 | $ | 7,783 | ||||
Interest-bearing deposits in other banks | 10,741 | 11,337 | ||||||
Investment securitiesavailable-for-sale | 56,874 | 73,113 | ||||||
Loans held for sale | 519 | 652 | ||||||
Loans, net | 560,187 | 409,343 | ||||||
Less: allowance for loan losses | 5,404 | 3,732 | ||||||
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Net loans | 554,783 | 405,611 | ||||||
Premises and equipment, net | 12,163 | 12,201 | ||||||
Accrued interest receivable | 1,995 | 1,726 | ||||||
Goodwill | 5,079 | 5,408 | ||||||
Intangible assets | 1,099 | 1,405 | ||||||
Other assets | 29,701 | 23,812 | ||||||
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Total assets | $ | 681,379 | $ | 543,048 | ||||
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Liabilities: | ||||||||
Deposits: | ||||||||
Noninterest-bearing | $ | 76,214 | $ | 73,932 | ||||
Interest-bearing | 498,736 | 378,628 | ||||||
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Total deposits | 574,950 | 452,560 | ||||||
Short-term borrowings | 37,250 | 31,500 | ||||||
Long-term debt | 6,503 | 11,154 | ||||||
Accrued interest payable | 213 | 192 | ||||||
Other liabilities | 5,084 | 5,722 | ||||||
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Total liabilities | 624,000 | 501,128 | ||||||
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Stockholders’ equity: | ||||||||
Preferred stock: no par value, authorized 3,000,000 shares; Series A convertible perpetual preferred stock | ||||||||
Common stock: no par value, authorized 20,000,000 shares; September 30, 2017, issued and outstanding 4,892,143 shares; December 31, 2016, issued and outstanding 3,237,859 shares | 45,427 | 29,052 | ||||||
Capital surplus | 243 | 220 | ||||||
Retained earnings | 12,848 | 14,845 | ||||||
Accumulated other comprehensive loss | (1,139 | ) | (2,197 | ) | ||||
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Total stockholders’ equity | 57,379 | 41,920 | ||||||
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Total liabilities and stockholders’ equity | $ | 681,379 | $ | 543,048 | ||||
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See notes to consolidated financial statements.
Riverview Financial Corporation
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Interest income: | ||||||||||||||||
Interest and fees on loans: | ||||||||||||||||
Taxable | $ | 5,717 | $ | 4,598 | $ | 14,991 | $ | 13,362 | ||||||||
Tax-exempt | 146 | 87 | 361 | 261 | ||||||||||||
Interest and dividends on investment securitiesavailable-for-sale: | ||||||||||||||||
Taxable | 477 | 539 | 1,607 | 1,375 | ||||||||||||
Tax-exempt | 47 | 53 | 140 | 280 | ||||||||||||
Dividends | 1 | 3 | 8 | |||||||||||||
Interest on interest-bearing deposits in other banks | 31 | 13 | 78 | 41 | ||||||||||||
Interest on federal funds sold | 2 | 12 | 2 | |||||||||||||
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Total interest income | 6,420 | 5,291 | 17,192 | 15,329 | ||||||||||||
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Interest expense: | ||||||||||||||||
Interest on deposits | 821 | 447 | 2,021 | 1,375 | ||||||||||||
Interest on short-term borrowings | 112 | 3 | 197 | 59 | ||||||||||||
Interest on long-term debt | 75 | 77 | 228 | 214 | ||||||||||||
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Total interest expense | 1,008 | 527 | 2,446 | 1,648 | ||||||||||||
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Net interest income | 5,412 | 4,764 | 14,746 | 13,681 | ||||||||||||
Provision for loan losses | 610 | 29 | 1,734 | 284 | ||||||||||||
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Net interest income after provision for loan losses | 4,802 | 4,735 | 13,012 | 13,397 | ||||||||||||
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Noninterest income: | ||||||||||||||||
Service charges, fees and commissions | 270 | 315 | 899 | 933 | ||||||||||||
Commission and fees on fiduciary activities | 31 | 34 | 92 | 88 | ||||||||||||
Wealth management income | 179 | 194 | 631 | 531 | ||||||||||||
Mortgage banking income | 205 | 210 | 434 | 401 | ||||||||||||
Bank owned life insurance investment income | 107 | 118 | 254 | 276 | ||||||||||||
Net gain on sale of investment securitiesavailable-for-sale | 43 | 152 | 106 | 484 | ||||||||||||
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Total noninterest income | 835 | 1,023 | 2,416 | 2,713 | ||||||||||||
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Noninterest expense: | ||||||||||||||||
Salaries and employee benefits expense | 2,928 | 2,334 | 8,521 | 6,611 | ||||||||||||
Net occupancy and equipment expense | 615 | 538 | 1,895 | 1,617 | ||||||||||||
Amortization of intangible assets | 71 | 95 | 306 | 247 | ||||||||||||
Net cost of operation of other real estate owned | (13 | ) | 83 | 161 | 214 | |||||||||||
Other expenses | 1,566 | 1,283 | 4,488 | 4,004 | ||||||||||||
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Total noninterest expense | 5,167 | 4,333 | 15,371 | 12,693 | ||||||||||||
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Income (loss) before income taxes | 470 | 1,425 | 57 | 3,417 | ||||||||||||
Income tax expense (benefit) | 69 | 454 | 44 | 838 | ||||||||||||
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Net income (loss) | 401 | 971 | 13 | 2,579 | ||||||||||||
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Other comprehensive income: | ||||||||||||||||
Unrealized gain (loss) on investment securitiesavailable-for-sale | (50 | ) | (148 | ) | 1,708 | 940 | ||||||||||
Reclassification adjustment for net (gain) loss on sale of investment securitiesavailable-for-sale included in net income (loss) | (43 | ) | (152 | ) | (106 | ) | (484 | ) | ||||||||
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Other comprehensive income (loss) | (93 | ) | (300 | ) | 1,602 | 456 | ||||||||||
Income tax expense (benefit) related to other comprehensive income | (32 | ) | (102 | ) | 544 | 155 | ||||||||||
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Other comprehensive income (loss), net of income taxes | (61 | ) | (198 | ) | 1,058 | 301 | ||||||||||
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Comprehensive income | $ | 340 | $ | 773 | $ | 1,071 | $ | 2,880 | ||||||||
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Per share data: | ||||||||||||||||
Net income: | ||||||||||||||||
Basic | $ | 0.08 | $ | 0.30 | $ | 0.03 | $ | 0.80 | ||||||||
Diluted | $ | 0.08 | $ | 0.30 | $ | 0.03 | $ | 0.80 | ||||||||
Average common shares outstanding: | ||||||||||||||||
Basic | 4,880,676 | 3,224,053 | 4,002,165 | 3,214,967 | ||||||||||||
Diluted | 4,945,456 | 3,244,688 | 4,060,813 | 3,237,553 | ||||||||||||
Dividends declared | $ | 0.14 | $ | 0.14 | $ | 0.41 | $ | 0.41 |
June 30, 2020 | December 31, 2019 | |||||||
Assets: | ||||||||
Cash and due from banks | $ | 10,195 | $ | 11,838 | ||||
Interest-bearing deposits in other banks | 33,033 | 38,510 | ||||||
Investment securities available-for-sale | 74,134 | 91,247 | ||||||
Loans held for sale | 4,252 | 81 | ||||||
Loans, net | 1,165,453 | 852,109 | ||||||
Less: allowance for loan losses | 9,736 | 7,516 | ||||||
Net loans | 1,155,717 | 844,593 | ||||||
Premises and equipment, net | 18,668 | 17,852 | ||||||
Accrued interest receivable | 1,826 | 2,414 | ||||||
Goodwill | 24,754 | |||||||
Intangible assets | 2,397 | 2,736 | ||||||
Other assets | 46,578 | 45,929 | ||||||
Total assets | $ | 1,346,800 | $ | 1,079,954 | ||||
Liabilities: | ||||||||
Deposits: | ||||||||
Noninterest-bearing | $ | 173,567 | $ | 147,405 | ||||
Interest-bearing | 849,586 | 793,075 | ||||||
Total deposits | 1,023,153 | 940,480 | ||||||
Short-term borrowings | ||||||||
Long-term debt | 217,010 | 6,971 | ||||||
Accrued interest payable | 457 | 435 | ||||||
Other liabilities | 11,728 | 13,958 | ||||||
Total liabilities | 1,252,348 | 961,844 | ||||||
Stockholders’ equity: | ||||||||
Common stock: 0 par value, authorized 20,000,000 shares; June 30, 2020, issued and outstanding 9,263,697 shares; December 31, 2019, issued and outstanding 9,216,616 shares | 102,552 | 102,206 | ||||||
Capital surplus | 161 | 112 | ||||||
Retained earnings (accumulated deficit) | (8,735 | ) | 16,140 | |||||
Accumulated other comprehensive income ( loss) | 474 | (348 | ) | |||||
Total stockholders’ equity | 94,452 | 118,110 | ||||||
Total liabilities and stockholders’ equity | $ | 1,346,800 | $ | 1,079,954 | ||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | 2020 | 2019 | 2020 | 2019 | ||||||||||||
Interest income: | ||||||||||||||||
Interest and fees on loans: | ||||||||||||||||
Taxable | $ | 10,602 | $ | 11,680 | $ | 20,384 | $ | 22,368 | ||||||||
Tax-exempt | 236 | 233 | 481 | 463 | ||||||||||||
Interest and dividends on investment securities available-for-sale: | ||||||||||||||||
Taxable | 396 | 732 | 931 | 1,472 | ||||||||||||
Tax-exempt | 68 | 47 | 105 | 116 | ||||||||||||
Interest on interest-bearing deposits in other banks | 12 | 216 | 101 | 447 | ||||||||||||
Total interest income | 11,314 | 12,908 | 22,002 | 24,866 | ||||||||||||
Interest expense: | ||||||||||||||||
Interest on deposits | 1,395 | 2,099 | 3,184 | 4,172 | ||||||||||||
Interest on short-term borrowings | 23 | 28 | ||||||||||||||
Interest on long-term debt | 225 | 131 | 348 | 265 | ||||||||||||
Total interest expense | 1,643 | 2,230 | 3,560 | 4,437 | ||||||||||||
Net interest income | 9,671 | 10,678 | 18,442 | 20,429 | ||||||||||||
Provision for loan losses | 2,012 | 618 | 3,812 | 1,201 | ||||||||||||
Net interest income after provision for loan losses | 7,659 | 10,060 | 14,630 | 19,228 | ||||||||||||
Noninterest income: | ||||||||||||||||
Service charges, fees and commissions | 1,011 | 1,315 | 2,392 | 2,368 | ||||||||||||
Commission and fees on fiduciary activities | 210 | 281 | 423 | 541 | ||||||||||||
Wealth management income | 196 | 236 | 416 | 483 | ||||||||||||
Mortgage banking income | 391 | 100 | 499 | 206 | ||||||||||||
Bank owned life insurance investment income | 193 | 194 | 386 | 381 | ||||||||||||
Net gain (loss) on sale of investment securities available-for-sale | 815 | (42 | ) | |||||||||||||
Total noninterest income | 2,001 | 2,126 | 4,931 | 3,937 | ||||||||||||
Noninterest expense: | ||||||||||||||||
Salaries and employee benefits expense | 4,985 | 5,830 | 10,041 | 13,340 | ||||||||||||
Net occupancy and equipment expense | 1,068 | 1,044 | 2,248 | 2,133 | ||||||||||||
Amortization of intangible assets | 169 | 194 | 339 | 388 | ||||||||||||
Goodwill impairment | 24,754 | 24,754 | ||||||||||||||
Net cost (benefit) of operation of other real estate owned | (92 | ) | (11 | ) | 35 | |||||||||||
Other expenses | 2,978 | 3,508 | 5,795 | 6,552 | ||||||||||||
Total noninterest expense | 33,954 | 10,484 | 43,166 | 22,448 | ||||||||||||
Income before income taxes | (24,294 | ) | 1,702 | (23,605 | ) | 717 | ||||||||||
Income tax expense (benefit) | (172 | ) | 268 | (116 | ) | (30 | ) | |||||||||
Net income (loss) | (24,122 | ) | 1,434 | (23,489 | ) | 747 | ||||||||||
Other comprehensive income: | ||||||||||||||||
Unrealized gain on investment securities available-for-sale | 840 | 1,936 | 1,893 | 2,959 | ||||||||||||
Reclassification adjustment for net (gain) loss on sale of investment securities available-for-sale | (815 | ) | 42 | |||||||||||||
Net change in derivative fair value | (38 | ) | (38 | ) | ||||||||||||
Other comprehensive income | 802 | 1,936 | 1,040 | 3,001 | ||||||||||||
Income tax expense related to other comprehensive income | 168 | 406 | 218 | 630 | ||||||||||||
Other comprehensive income, net of income taxes | 634 | 1,530 | 822 | 2,371 | ||||||||||||
Comprehensive income (loss) | $ | (23,488 | ) | $ | 2,964 | $ | (22,667 | ) | $ | 3,118 | ||||||
Per share data: | ||||||||||||||||
Net income (loss): | ||||||||||||||||
Basic | $ | (2.61 | ) | $ | 0.16 | $ | (2.54 | ) | $ | 0.08 | ||||||
Diluted | $ | (2.61 | ) | $ | 0.16 | $ | (2.54 | ) | $ | 0.08 | ||||||
Average common shares outstanding: | ||||||||||||||||
Basic | 9,249,184 | 9,160,290 | 9,236,314 | 9,151,850 | ||||||||||||
Diluted | 9,249,184 | 9,172,992 | 9,236,314 | 9,167,409 |
Preferred Stock | Common Stock | Capital Surplus | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total | |||||||||||||||||||
Balance, January 1, 2016 | $ | 28,681 | $ | 180 | $ | 13,550 | $ | (108 | ) | $ | 42,303 | |||||||||||||
Net income | 2,579 | 2,579 | ||||||||||||||||||||||
Other comprehensive income, net of income taxes | 301 | 301 | ||||||||||||||||||||||
Compensation cost of option grants | 31 | 31 | ||||||||||||||||||||||
Issuance under ESPP, 401k and Dividend Reinvestment plans: 23,923 shares | 274 | 274 | ||||||||||||||||||||||
Dividends declared, $0.41 per share | (1,327 | ) | (1,327 | ) | ||||||||||||||||||||
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Balance, September 30, 2016 | $ | 28,955 | $ | 211 | $ | 14,802 | $ | 193 | $ | 44,161 | ||||||||||||||
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Balance, January 1, 2017 | $ | 29,052 | $ | 220 | $ | 14,845 | $ | (2,197 | ) | $ | 41,920 | |||||||||||||
Net income | 13 | 13 | ||||||||||||||||||||||
Other comprehensive income, net of income taxes | 1,058 | 1,058 | ||||||||||||||||||||||
Compensation cost of option grants | 23 | 23 | ||||||||||||||||||||||
Issuance of 269,885 common shares | 2,658 | 2,658 | ||||||||||||||||||||||
Issuance of 1,348,809 preferred shares | $ | 13,283 | 13,283 | |||||||||||||||||||||
Preferred shares converted into common shares | (13,283 | ) | 13,283 | |||||||||||||||||||||
Issuance under ESPP, 401k and Dividend Reinvestment plans: 29,840 shares | 373 | 373 | ||||||||||||||||||||||
Exercise of stock options: 5,750 shares | 61 | 61 | ||||||||||||||||||||||
Dividends declared: $0.41 per share | (2,010 | ) | (2,010 | ) | ||||||||||||||||||||
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Balance, September 30, 2017 | $ | $ | 45,427 | $ | 243 | $ | 12,848 | $ | (1,139 | ) | $ | 57,379 | ||||||||||||
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For the six months ended June 30, | Common Stock | Capital Surplus | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total | |||||||||||||||
Balance, January 1, 2020 | $ | 102,206 | $ | 112 | $ | 16,140 | $ | (348 | ) | $ | 118,110 | |||||||||
Net income | (23,489 | ) | (23,489 | ) | ||||||||||||||||
Other comprehensive income, net of income taxes | 822 | 822 | ||||||||||||||||||
Compensation cost of option grants | ||||||||||||||||||||
Issuance under ESPP, 401k and Dividend Reinvestment plans: 47,081 shares | 346 | 346 | ||||||||||||||||||
Exercise of stock options | ||||||||||||||||||||
Stock based compensation | 49 | 49 | ||||||||||||||||||
Dividends declared, $0.15 per share | (1,386 | ) | (1,386 | ) | ||||||||||||||||
Balance, June 30, 2020 | $ | 102,552 | $ | 161 | $ | (8,735 | ) | $ | 474 | $ | 94,452 | |||||||||
Balance, January 1, 2019 | $ | 101,134 | $ | 332 | $ | 15,063 | $ | (2,619 | ) | $ | 113,910 | |||||||||
Net income | 747 | 747 | ||||||||||||||||||
Other comprehensive income (loss), net of income taxes | 2,371 | 2,371 | ||||||||||||||||||
Compensation cost of option grants | ||||||||||||||||||||
Issuance under ESPP, 401k and Dividend Reinvestment plans: 27,984 shares | 316 | 316 | ||||||||||||||||||
Exercise of stock options: 18,131 shares | 194 | (28 | ) | 166 | ||||||||||||||||
Dividends declared, $0.20 per shares | (1,832 | ) | (1,832 | ) | ||||||||||||||||
Balance, June 30, 2019 | $ | 101,644 | $ | 304 | $ | 13,978 | $ | (248 | ) | $ | 115,678 | |||||||||
For the three months ended June 30, | Common Stock | Capital Surplus | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total | |||||||||||||||
Balance, April 1, 2020 | $ | 102,386 | $ | 134 | $ | 16,081 | $ | (160 | ) | $ | 118,441 | |||||||||
Net income | (24,122 | ) | (24,122 | ) | ||||||||||||||||
Other comprehensive income, net of income taxes | 634 | 634 | ||||||||||||||||||
Compensation cost of option grants | ||||||||||||||||||||
I ssuance under ESPP, 401k and Dividend Reinvestment plans:27,658 shares | 166 | 166 | ||||||||||||||||||
Exercise of stock options | ||||||||||||||||||||
Stock based compensation | 27 | 27 | ||||||||||||||||||
Dividends declared, $0.08 per share | (694 | ) | (694 | ) | ||||||||||||||||
Balance, June 30, 2020 | $ | 102,552 | $ | 161 | $ | (8,735 | ) | $ | 474 | $ | 94,452 | |||||||||
Balance, April 1, 2019 | $ | 101,500 | $ | 307 | $ | 13,461 | $ | (1,778 | ) | $ | 113,490 | |||||||||
Net income | 1,434 | 1,434 | ||||||||||||||||||
Other comprehensive income (loss), net of income taxes | 1,530 | 1,530 | ||||||||||||||||||
Compensation cost of option grants | ||||||||||||||||||||
Issuance under ESPP, 401k and Dividend Reinvestment plans: 12,761 shares | 141 | 141 | ||||||||||||||||||
Exercise of stock options: 310 shares | 3 | (3 | ) | |||||||||||||||||
Dividends declared, $0.10 per shares | (917 | ) | (917 | ) | ||||||||||||||||
Balance, June 30, 2019 | $ | 101,644 | $ | 304 | $ | 13,978 | $ | (248 | ) | $ | 115,678 | |||||||||
For the Nine Months Ended September 30, | 2017 | 2016 | ||||||
Cash flows from operating activities: | ||||||||
Net income (loss) | $ | 13 | $ | 2,579 | ||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||
Depreciation of premises and equipment | 586 | 533 | ||||||
Provision for loan losses | 1,734 | 284 | ||||||
Stock based compensation | 23 | 31 | ||||||
Net amortization of investment securitiesavailable-for-sale | 315 | 389 | ||||||
Net cost of operation of other real estate owned | 161 | 214 | ||||||
Net gain on sale of investment securitiesavailable-for-sale | (106 | ) | (484 | ) | ||||
Amortization of purchase adjustment on loans | (127 | ) | (704 | ) | ||||
Amortization of intangible assets | 306 | 247 | ||||||
Deferred income taxes | (47 | ) | 384 | |||||
Proceeds from sale of loans originated for sale | 20,733 | 18,329 | ||||||
Net gain on sale of loans originated for sale | (434 | ) | (401 | ) | ||||
Loans originated for sale | (20,166 | ) | (17,654 | ) | ||||
Bank owned life insurance investment income | (254 | ) | (276 | ) | ||||
Net change in: | ||||||||
Accrued interest receivable | (269 | ) | (107 | ) | ||||
Other assets | (1,255 | ) | (208 | ) | ||||
Accrued interest payable | 21 | (16 | ) | |||||
Other liabilities | (638 | ) | (196 | ) | ||||
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Net cash provided by (used in) operating activities | 596 | 2,944 | ||||||
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Cash flows from investing activities: | ||||||||
Investment securitiesavailable-for-sale: | ||||||||
Purchases | (40,916 | ) | ||||||
Proceeds from repayments | 1,805 | 7,420 | ||||||
Proceeds from sales | 15,827 | 37,526 | ||||||
Proceeds from the sale of other real estate owned | 613 | 1,129 | ||||||
Net decrease in restricted equity securities | (341 | ) | 1,489 | |||||
Net (increase) decrease in loans | (151,072 | ) | 9,996 | |||||
Business disposition (acquisition), net of cash | 329 | (894 | ) | |||||
Purchases of premises and equipment | (548 | ) | (447 | ) | ||||
Purchases of bank owned life insurance | (5,017 | ) | (27 | ) | ||||
Proceeds from bank owned life insurance | 279 | |||||||
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Net cash provided by (used in) investing activities | (138,404 | ) | 15,555 | |||||
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Cash flows from financing activities: | ||||||||
Net increase in deposits | 122,390 | 10,651 | ||||||
Net increase (decrease) in short-term borrowings | 5,750 | (36,575 | ) | |||||
Repayment of long-term debt | (5,251 | ) | (143 | ) | ||||
Proceeds from long-term debt | 600 | 2,050 | ||||||
Issuance under ESPP, 401k and DRP plans | 373 | 274 | ||||||
Issuance of common stock | 15,941 | |||||||
Proceeds from exercise of stock options | 61 | |||||||
Cash dividends paid | (2,010 | ) | (1,327 | ) | ||||
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Net cash provided by (used in) financing activities | 137,854 | (25,070 | ) | |||||
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|
| |||||
Net increase (decrease) in cash and cash equivalents | 46 | (6,571 | ) | |||||
Cash and cash equivalents - beginning | 19,120 | 22,688 | ||||||
|
|
|
| |||||
Cash and cash equivalents - ending | $ | 19,166 | $ | 16,117 | ||||
|
|
|
| |||||
Supplemental disclosures: | ||||||||
Cash paid during the period for: | ||||||||
Interest | $ | 2,425 | $ | 1,664 | ||||
|
|
|
| |||||
Income taxes | $ | $ | ||||||
|
|
|
| |||||
Noncash items from investing activities: | ||||||||
Other real estate acquired in settlement of loans | $ | 293 | $ | 1,348 | ||||
|
|
|
|
For the Six Months Ended June 30, | 2020 | 2019 | ||||||
Cash flows from operating activities: | ||||||||
Net income (loss) | $ | (23,489 | ) | $ | 747 | |||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||
Depreciation and amortization of premises and equipment | 640 | 589 | ||||||
Provision for loan losses | 3,812 | 1,201 | ||||||
Stock based compensation | 49 | |||||||
Net amortization of investment securities available-for-sale | 312 | 399 | ||||||
Net cost (benefit) of operation of other real estate owned | (11 | ) | 35 | |||||
Net (gain) loss on sale of investment securities available-for-sale | (815 | ) | 42 | |||||
Amortization of purchase adjustment on loans | (292 | ) | (1,495 | ) | ||||
Amortization of intangible assets | 339 | 388 | ||||||
Amortization of assumed discount on long-term debt | 42 | 40 | ||||||
Impairment of goodwill | 24,754 | |||||||
Deferred income taxes | (465 | ) | (111 | ) | ||||
Proceeds from sale of loans originated for sale | 13,557 | 7,599 | ||||||
Net gain on sale of loans originated for sale | (499 | ) | (206 | ) | ||||
Loans originated for sale | (17,229 | ) | (6,926 | ) | ||||
Bank owned life insurance investment income | (386 | ) | (381 | ) | ||||
Net change in: | ||||||||
Accrued interest receivable | 588 | 140 | ||||||
Other assets | 1,028 | (1,169 | ) | |||||
Accrued interest payable | 22 | (39 | ) | |||||
Other liabilities | (2,230 | ) | 1,107 | |||||
Net cash provided by (used in) operating activities | (273 | ) | 1,960 | |||||
Cash flows from investing activities: | ||||||||
Investment securities available-for-sale: | ||||||||
Purchases | (14,215 | ) | (10,485 | ) | ||||
Proceeds from repayments | 5,741 | 8,728 | ||||||
Proceeds from sales | 27,168 | 8,740 | ||||||
Proceeds from the sale of other real estate owned | 68 | 627 | ||||||
Net (increase) decrease in restricted equity securities | (779 | ) | 119 | |||||
Net (increase) decrease in loans | (314,982 | ) | 4,800 | |||||
Purchases of premises and equipment | (1,456 | ) | (1,065 | ) | ||||
Premium paid on bank owned life insurance | (22 | ) | (22 | ) | ||||
Net cash provided by (used in) investing activities | (298,477 | ) | 11,442 | |||||
Cash flows from financing activities: | ||||||||
Net increase (decrease) in deposits | 82,673 | (24,893 | ) | |||||
Proceeds from long-term debt | 209,997 | |||||||
Issuance under ESPP, 401k and DRP plans | 346 | 316 | ||||||
Proceeds from exercise of stock options | 166 | |||||||
Cash dividends paid | (1,386 | ) | (1,832 | ) | ||||
Net cash provided by (used in) financing activities | 291,630 | (26,243 | ) | |||||
Net increase in cash and cash equivalents | (7,120 | ) | (12,841 | ) | ||||
Cash and cash equivalents—beginning | 50,348 | 53,816 | ||||||
Cash and cash equivalents—ending | $ | 43,228 | $ | 40,975 | ||||
Supplemental disclosures: | ||||||||
Cash paid during the period for: | ||||||||
Interest | $ | 3,538 | $ | 4,476 | ||||
Noncash items from operating activities: | ||||||||
Operating lease right-of-use | $ | 4,612 | ||||||
Noncash items from investing activities: | ||||||||
Transfer of owned properties to available for sale | $ | 540 | ||||||
Supplemental schedule of noncash investing and financing activities: | ||||||||
Other real estate acquired in settlement of loans | $ | 338 | $ | 27 | ||||
Counties. The Wealth and Trust Management divisions of the Bank provide trust and investment advisory services to the general public and businesses.
16, 2020.
Recent Accounting Standards
In February 2016, the FASB issued ASUNo. 2016-02, “Leases (Topic 842)”. Among other things, in the amendments in ASU2016-02, lesseesus, we will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and aright-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified assetincrease our allowance for the lease term. Underlosses through provisions for credit losses. In addition, loan programs adopted by the new guidance, lessor accounting is largely unchanged. Certain targeted improvements were madefederal government, such as the Paycheck Protection Program (“PPP”), while intended to align, where necessary, lessor accounting withlessen the lessee accounting model and Topic 606, Revenue from Contracts with Customers. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted upon issuance. Lessees (for capital and operating leases) and lessors (for sales-type, direct financing, and operating leases) must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginningimpact of the earliest comparative period presentedpandemic on businesses, may result in a decreased demand for Riverview’s loan products.
transition accounting for leases that expired before the earliest comparative period presented. Lesseesresults is evolving and lessors may not apply a full retrospective transition approach.uncertain. The Company is currently assessingexpects its net interest income and
In March 2016, the FASB issued ASUNo. 2016-07, “Investments - Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting”. The amendments in this ASU eliminate the requirement that when an investment qualifies for use of the equity methodcondition as a result of the
In March 2016, the FASB issued ASUNo. 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Shares-Based Payment Accounting”. The amendmentsuse assets or available for sale investment securities.
In June 2016, the FASB ASUNo. 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”. ASU2016-13 requires an entity to utilize a new impairment model known as the current expected credit loss (“CECL”) model to estimate its lifetime “expected credit loss” and record an allowance that, when deducted from the amortized cost basis of the financial asset, presents the net amount expected to be collected on the financial asset. The CECL model is expected to result in earlier recognition of credit losses. ASU2016-13 also requires new disclosures for financial assets measured at amortized cost, loans andavailable-for-sale debt securities. The updated guidance is effective for interim and annual reporting periods beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted. Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. We have dedicated staff and resources in place evaluating the Company’s options including evaluating the appropriate model options and collecting and reviewing loan data for use in these models. The Company is currently still assessing the impact that this new guidance will have on its consolidated financial statements.
2020
In December 2016, the FASB issued ASUNo. 2016-20, “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers”.ASU 2016-20 updates the new revenue standard by clarifying issues that have arisen fromASU 2014-09, but does not change the core principle of the new standard. The issues addressed in this ASU include: (i) Loan guarantee fees; (ii) Impairment testing of contract costs; (iii) Interaction of impairment testing with guidance in other topics; (iv) Provisions for losses on construction-type and production-type contracts; (v) Scope of Topic 606; (vi) Disclosure of remaining performance obligations; (vii) Disclosure of prior-period performance obligations; (viii) Contract modifications; (ix) Contract asset vs. receivable; (x) Refund liability; (xi) Advertising costs; (xii) Fixed-odds wagering contracts in the casino industry; and (xiii) Cost capitalization for advisors to private funds and public funds. The updated guidance is effective for interim and annual reporting periods beginning after December 15, 2017. The amendments can be applied retrospectively to each prior reporting period or retrospectively with the cumulative effect of initially applying this new guidance recognized at the date of initial application. Our revenue is comprised of net interest income on financial assets and financial liabilities, which is explicitly excluded from the scope ofASU 2014-09, andnon-interest income.ASU 2016-20 and2014-09 could require us to change how we recognize certain revenue streams withinnon-interest income, however, we do not expect these changes to have a significant impact on our financial statements. We continue to evaluate the impact ofASU 2016-20 and2014-09 on our Company and expect to adopt the standard in the first quarter of 2018 with a cumulative effect adjustment to opening retained earnings, if such adjustment is deemed to be significant.
In January 2017, FASB issued ASUNo. 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business”. The ASU clarifies the definition of a business to assist with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The amendments in this update are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The guidance is not expected to have a significant impact on the Company’s financial positions,position, results of operations or disclosures.
In January 2017, FASB issued ASU “Intangibles2019,2022, including interim periods within those fiscal years. Early adoption is permitted for goodwill impairment tests performed on testing dates after January 1, 2017. The adoption of the new guidance on January 1, 2020 did not have a material effect on the Company’s financial position, results of operations or disclosures.
In March 2017, the FASB issued ASU2017-07, “Compensation - Retirement Benefits (Topic 715)”, which requires employers that offer or maintain defined benefit plans to disaggregate the service component from the other components of net benefit cost and provides guidance on presentation of the service component and the other components of net benefit cost in the statement of operations. The guidance is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The Company is currently evaluating the potential impact of this standard on its consolidated financial statements.
In March 2017, FASB issued ASUNo. 2017-08, “Receivables - Nonrefundable Fees and Other Costs (Topic 310), Premium Amortization on Purchased Callable Debt Securities”. These amendments shorten the amortization period for certain callable debt securities held at a premium. Specifically, the amendments require the premium to be amortized to the earliest call date. The amendments do not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. The guidance is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted, including adoption in an interim period. If an entity early adopts in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The amendments should be applied on a modified retrospective basis, with a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The Company is assessing the impact of ASU2017-08 on its accounting and disclosures.
In May 2017, the FASB issued ASU2017-09, “Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting”. This ASU clarifies which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. Specifically, an entity would not apply modification accounting if the fair value, vesting
conditions, and classification of the awards are the same immediately before and after the modification. This ASU is effective for fiscal years beginning after December 15, 2017, and interims periods within those fiscal years. The Company does not expect the adoption of the guidance to have a material impact on our consolidated financial statements.
In August 2017, FASB issued ASU2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities.” The amendments in the Update better align an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. To meet that objective, the amendments expand and refine hedge accounting for both nonfinancial and financial risk components and align the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. The adoption of the new guidance is not expected to have a significant impactmaterial effect on the Company’s financial positions,position, results of operations or disclosures.
September 30, 2017 | December 31, 2016 | |||||||
Net unrealized loss on investment securitiesavailable-for-sale | $ | (911 | ) | $ | (2,513 | ) | ||
Related income taxes | (310 | ) | (854 | ) | ||||
|
|
|
| |||||
Net of income taxes | (601 | ) | (1,659 | ) | ||||
|
|
|
| |||||
Benefit plan adjustments | (815 | ) | (815 | ) | ||||
Related income taxes | (277 | ) | (277 | ) | ||||
|
|
|
| |||||
Net of income taxes | (538 | ) | (538 | ) | ||||
|
|
|
| |||||
Accumulated other comprehensive income (loss) | $ | (1,139 | ) | $ | (2,197 | ) | ||
|
|
|
|
June 30, 2020 | December 31, 2019 | |||||||
Net unrealized loss on investment securities available-for-sale | $ | 1,754 | $ | 676 | ||||
Income tax expense | 368 | 142 | ||||||
Net of income taxes | 1,386 | 534 | ||||||
Benefit plan adjustments | (1,117 | ) | (1,117 | ) | ||||
Income tax benefit | (235 | ) | (235 | ) | ||||
Net of income taxes | (882 | ) | (882 | ) | ||||
Derivative fair value adjustment | (38 | ) | ||||||
Income tax benefit | (8 | ) | ||||||
Net of income taxes | (30 | ) | ||||||
Accumulated other comprehensive income (loss) | $ | 474 | $ | (348 | ) | |||
Three months ended September 30, | 2017 | 2016 | ||||||
Unrealized loss on investment securitiesavailable-for-sale | $ | (50 | ) | $ | (148 | ) | ||
Net gain on the sale of investment securitiesavailable-for-sale (1) | (43 | ) | (152 | ) | ||||
|
|
|
| |||||
Other comprehensive loss before taxes | (93 | ) | (300 | ) | ||||
Income tax expense (benefit) | (32 | ) | (102 | ) | ||||
|
|
|
| |||||
Other comprehensive loss | $ | (61 | ) | $ | (198 | ) | ||
|
|
|
| |||||
Nine months ended September 30, | 2017 | 2016 | ||||||
Unrealized gain on investment securitiesavailable-for-sale | $ | 1,708 | $ | 940 | ||||
Net gain on the sale of investment securitiesavailable-for-sale (1) | (106 | ) | (484 | ) | ||||
|
|
|
| |||||
Other comprehensive income before taxes | 1,602 | 456 | ||||||
Income tax expense (benefit) | 544 | 155 | ||||||
|
|
|
| |||||
Other comprehensive income | $ | 1,058 | $ | 301 | ||||
|
|
|
|
Three months ended June 30, | 2020 | 2019 | ||||||
Unrealized gain (loss) on investment securities available-for-sale | $ | 840 | $ | 1,936 | ||||
Net (gain) loss on the sale of investment securities available-for-sale (1) | ||||||||
Net change in derivative fair value | (38 | ) | ||||||
Other comprehensive income before taxes | 802 | 1,936 | ||||||
Income tax expense | 168 | 406 | ||||||
Other comprehensive income | $ | 634 | $ | 1,530 | ||||
Six months ended June 30, | 2020 | 2019 | ||||||
Unrealized gain (loss) on investment securities available-for-sale | $ | 1,893 | $ | 2,959 | ||||
Net (gain) loss on the sale of investment securities available-for-sale (1) | (815 | ) | 42 | |||||
Net change in derivative fair value | (38 | ) | ||||||
Other comprehensive income before taxes | 1,040 | 3,001 | ||||||
Income tax expense | 218 | 630 | ||||||
Other comprehensive income | $ | 822 | $ | 2,371 | ||||
(1) | Represents amounts reclassified out of accumulated other comprehensive income and included in gains on sale of investment securities on the consolidated statements of income and comprehensive income. |
The following table provides a reconciliation between the computation of basic earnings per share and diluted earnings per share for the three and ninesix months ended SeptemberJune 30, 20172020 and 2016:
Three months ended September 30, | 2017 | 2016 | ||||||
Numerator: | ||||||||
Net income (loss) | $ | 401 | $ | 971 | ||||
Dividends on preferred stock | ||||||||
|
|
|
| |||||
Net income (loss) available to common stockholders | $ | 401 | $ | 971 | ||||
Undistributed loss allocated to preferred stockholders | ||||||||
|
|
|
| |||||
Income (loss) allocated to common stockholders | $ | 401 | $ | 971 | ||||
|
|
|
| |||||
Denominator: | ||||||||
Basic | 4,880,676 | 3,224,053 | ||||||
Dilutive options | 64,780 | 20,635 | ||||||
|
|
|
| |||||
Diluted | 4,945,456 | 3,244,688 | ||||||
|
|
|
| |||||
Earnings per share: | ||||||||
Basic | $ | 0.08 | $ | 0.30 | ||||
Diluted | $ | 0.08 | $ | 0.30 | ||||
Nine months ended September 30, | 2017 | 2016 | ||||||
Numerator: | ||||||||
Net income (loss) | $ | 13 | $ | 2,579 | ||||
Dividends on preferred stock | (371 | ) | ||||||
|
|
|
| |||||
Net income (loss) available to common stockholders | $ | (358 | ) | $ | 2,579 | |||
Undistributed loss allocated to preferred stockholders | 475 | |||||||
|
|
|
| |||||
Income (loss) allocated to common stockholders | $ | 117 | $ | 2,579 | ||||
|
|
|
| |||||
Denominator: | ||||||||
Basic | 4,002,165 | 3,214,967 | ||||||
Dilutive options | 58,648 | 22,586 | ||||||
|
|
|
| |||||
Diluted | 4,060,813 | 3,237,553 | ||||||
|
|
|
| |||||
Earnings per share: | ||||||||
Basic | $ | 0.03 | $ | 0.80 | ||||
Diluted | $ | 0.03 | $ | 0.80 |
There were 25,300 outstanding stock options for2019:
Three months ended June 30, | 2020 | 2019 | ||||||
Numerator: | ||||||||
Net income (loss) | $ | (24,122) | $ | 1,434 | ||||
Denominator: | ||||||||
Basic | 9,249,184 | 9,160,290 | ||||||
Dilutive options | 12,702 | |||||||
Diluted | 9,249,184 | 9,172,992 | ||||||
Earnings per share: | ||||||||
Basic | $ | (2.61 | ) | $ | 0.16 | |||
Diluted | $ | (2.61 | ) | $ | 0.16 |
Six months ended June 30, | 2020 | 2019 | ||||||
Numerator: | ||||||||
Net income (loss) | $ | (23,489 | ) | $ | 747 | |||
Denominator: | ||||||||
Basic | 9,236,314 | 9,151,850 | ||||||
Dilutive options | 15,559 | |||||||
Diluted | 9,236,314 | 9,167,409 | ||||||
Earnings per share: | ||||||||
Basic | $ | (2.54 | ) | $ | 0.08 | |||
Diluted | $ | (2.54 | ) | $ | 0.08 |
On January 20, 2017, Riverview announced effect was antidilutive. For the three and six months ended June 30, 2019, there were 43,350 outstanding stock
Effective as of the close of business on June 22, 2017, the Company filed an amendment to the Articles of Incorporation to authorize a class ofnon-voting common stock after obtaining shareholder approval on June 21, 2017. As a result, each share of Series A preferred stockcalculation because their effect was automatically converted into one share ofnon-voting common stock as of the effective date. Thenon-voting common stock has the same relative rights as, and is identical in all respects with, each other share of common stock of the Company, except that holders ofnon-voting common stock do not have voting rights.
The additional capital allowed Riverview to acquire CBT Financial Corp, Clearfield, Pennsylvania, in a stock transaction valued at approximately $54.6 million effective October 1, 2017. This merger created a community banking franchise with approximately $1.2 billion of assets and provides enhanced products and services through 33 banking locations covering 12 Pennsylvania counties.
antidilutive.
September 30, 2017 | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||
State and municipals: | ||||||||||||||||
Taxable | $ | 35,424 | $ | 392 | $ | 684 | $ | 35,132 | ||||||||
Tax-exempt | 5,746 | 55 | 5,801 | |||||||||||||
Mortgage-backed securities: | ||||||||||||||||
U.S. Government agencies | 1,567 | 31 | 1,536 | |||||||||||||
U.S. Government-sponsored enterprises | 5,516 | 12 | 105 | 5,423 | ||||||||||||
Corporate debt obligations | 9,532 | 550 | 8,982 | |||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 57,785 | $ | 459 | $ | 1,370 | $ | 56,874 | ||||||||
|
|
|
|
|
|
|
| |||||||||
December 31, 2016 | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||
U.S. Treasury securities | $ | 5,088 | $ | 67 | $ | 5,021 | ||||||||||
State and municipals: | ||||||||||||||||
Taxable | 44,045 | $ | 234 | 1,885 | 42,394 | |||||||||||
Tax-exempt | 5,748 | 3 | 77 | 5,674 | ||||||||||||
Mortgage-backed securities: | ||||||||||||||||
U.S. Government agencies | 1,905 | 15 | 1,890 | |||||||||||||
U.S. Government-sponsored enterprises | 9,115 | 28 | 247 | 8,896 | ||||||||||||
Corporate debt obligations | 9,542 | 492 | 9,050 | |||||||||||||
Equity securities, financial services | 183 | 5 | 188 | |||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 75,626 | $ | 270 | $ | 2,783 | $ | 73,113 | ||||||||
|
|
|
|
|
|
|
|
June 30, 2020 | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||
State and municipals: | ||||||||||||||||
Taxable | $ | 9,491 | $ | 288 | $ | 6 | $ | 9,773 | ||||||||
Tax-exempt | 8,430 | 361 | 8,791 | |||||||||||||
Mortgage-backed securities: | ||||||||||||||||
U.S. Government agencies | 27,740 | 755 | 28,495 | |||||||||||||
U.S. Government-sponsored enterprises | 23,219 | 584 | 23,803 | |||||||||||||
Corporate debt obligations | 3,500 | 228 | 3,272 | |||||||||||||
Total | $ | 72,380 | $ | 1,988 | $ | 234 | $ | 74,134 | ||||||||
December 31, 2019 | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||
State and municipals: | ||||||||||||||||
Taxable | $ | 24,365 | $ | 466 | $ | 7 | $ | 24,824 | ||||||||
Tax-exempt | 4,260 | 73 | 4,333 | |||||||||||||
Mortgage-backed securities: | ||||||||||||||||
U.S. Government agencies | 36,024 | 294 | 184 | 36,134 | ||||||||||||
U.S. Government-sponsored enterprises | 22,422 | 265 | 42 | 22,645 | ||||||||||||
Corporate debt obligations | 3,500 | 189 | 3,311 | |||||||||||||
Total | $ | 90,571 | $ | 1,098 | $ | 422 | $ | 91,247 |
September 30, 2017 | Fair Value | |||
Within one year | $ | 173 | ||
After one but within five years | 2,281 | |||
After five but within ten years | 9,316 | |||
After ten years | 38,146 | |||
|
| |||
49,916 | ||||
Mortgage-backed securities | 6,958 | |||
|
| |||
Total | $ | 56,874 | ||
|
|
June 30, 2020 | Fair Value | |||
Within one year | $ | 251 | ||
After one but within five years | 5,734 | |||
After five but within ten years | 6,909 | |||
After ten years | 8,942 | |||
21,836 | ||||
Mortgage-backed securities | 52,298 | |||
Total | $ | 74,134 | ||
Less Than 12 Months | 12 Months or More | Total | ||||||||||||||||||||||
September 30, 2017 | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||||||||
State and municipals: | ||||||||||||||||||||||||
Taxable | $ | 10,533 | $ | 227 | $ | 13,463 | $ | 457 | $ | 23,996 | $ | 684 | ||||||||||||
Tax-exempt | ||||||||||||||||||||||||
Mortgage-backed securities: | ||||||||||||||||||||||||
U.S. Government agencies | 1,536 | 31 | 1,536 | 31 | ||||||||||||||||||||
U.S. Government-sponsored enterprises | 3,317 | 58 | 1,757 | 47 | 5,074 | 105 | ||||||||||||||||||
Corporate debt obligation | 3,761 | 239 | 5,221 | 311 | 8,982 | 550 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total | $ | 19,147 | $ | 555 | $ | 20,441 | $ | 815 | $ | 39,588 | $ | 1,370 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Less Than 12 Months | 12 Months or More | Total | ||||||||||||||||||||||
December 31, 2016 | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||||||||
U.S. Treasury securities | $ | 5,021 | $ | 67 | $ | 5,021 | $ | 67 | ||||||||||||||||
U.S. Government-sponsored enterprises | ||||||||||||||||||||||||
State and municipals: | ||||||||||||||||||||||||
Taxable | 30,895 | 1,876 | $ | 282 | $ | 9 | 31,177 | 1,885 | ||||||||||||||||
Tax-exempt | 3,998 | 77 | 3,998 | 77 | ||||||||||||||||||||
Mortgage-backed securities: | ||||||||||||||||||||||||
U.S. Government agencies | 1,891 | 15 | 1,891 | 15 | ||||||||||||||||||||
U.S. Government-sponsored enterprises | 7,412 | 247 | 7,412 | 247 | ||||||||||||||||||||
Corporate debt obligation | 9,050 | 492 | 9,050 | 492 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total | $ | 58,267 | $ | 2,774 | $ | 282 | $ | 9 | $ | 58,549 | $ | 2,783 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Less Than 12 Months | 12 Months or More | Total | ||||||||||||||||||||||
June 30, 2020 | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||||||||
State and municipals: | ||||||||||||||||||||||||
Taxable | $ | 1,347 | $ | 6 | $ | $ | $ | 1,347 | $ | 6 | ||||||||||||||
Tax-exempt | ||||||||||||||||||||||||
Mortgage-backed securities: | ||||||||||||||||||||||||
U.S. Government agencies | ||||||||||||||||||||||||
U.S. Government-sponsored enterprises | ||||||||||||||||||||||||
Corporate debt obligation | 3,273 | 228 | 3,273 | 228 | ||||||||||||||||||||
Total | $ | 1,347 | $ | 6 | $ | 3,273 | $ | 228 | $ | 4,619 | $ | 234 | ||||||||||||
Less Than 12 Months | 12 Months or More | Total | ||||||||||||||||||||||
December 31, 2019 | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||||||||
State and municipals: | ||||||||||||||||||||||||
Taxable | $ | 1,280 | $ | 7 | $ | $ | $ | 1,280 | $ | 7 | ||||||||||||||
Tax-exempt | ||||||||||||||||||||||||
Mortgage-backed securities: | ||||||||||||||||||||||||
U.S. Government agencies | 15,799 | 184 | 15,799 | 184 | ||||||||||||||||||||
U.S. Government-sponsored enterprises | 3,245 | 42 | 3,245 | 42 | ||||||||||||||||||||
Corporate debt obligations | 3,311 | 189 | 3,311 | 189 | ||||||||||||||||||||
Total | $ | 17,079 | $ | 191 | $ | 6,556 | $ | 231 | $ | 23,635 | $ | 422 | ||||||||||||
2019.
September 30, 2017 | December 31, 2016 | |||||||
Commercial | $ | 74,389 | $ | 51,166 | ||||
Real estate: | ||||||||
Construction | 9,754 | 8,605 | ||||||
Commercial | 337,688 | 212,550 | ||||||
Residential | 131,741 | 130,874 | ||||||
Consumer | 6,615 | 6,148 | ||||||
|
|
|
| |||||
Total | $ | 560,187 | $ | 409,343 | ||||
|
|
|
|
2019.
June 30, 2020 | December 31, 2019 | |||||||
Commercial | $ | 380,998 | $ | 118,658 | ||||
Real estate: | ||||||||
Construction | 79,299 | 61,831 | ||||||
Commercial | 494,642 | 455,901 | ||||||
Residential | 203,752 | 207,354 | ||||||
Consumer | 6,762 | 8,365 | ||||||
Total | $ | 1,165,453 | $ | 852,109 | ||||
Real Estate | ||||||||||||||||||||||||||||
September 30, 2017 | Commercial | Construction | Commercial | Residential | Consumer | Unallocated | Total | |||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||||||||||
Beginning Balance July 1, 2017 | $ | 757 | $ | 192 | $ | 2,965 | $ | 828 | $ | 49 | $ | 43 | $ | 4,834 | ||||||||||||||
Charge-offs | (24 | ) | (18 | ) | (42 | ) | ||||||||||||||||||||||
Recoveries | 1 | 1 | 2 | |||||||||||||||||||||||||
Provisions | 421 | (3 | ) | (56 | ) | 127 | (4 | ) | 125 | 610 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Ending balance | $ | 1,155 | $ | 189 | $ | 2,909 | $ | 937 | $ | 46 | $ | 168 | $ | 5,404 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Real Estate | ||||||||||||||||||||||||||||
September 30, 2017 | Commercial | Construction | Commercial | Residential | Consumer | Unallocated | Total | |||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||||||||||
Beginning Balance January 1, 2017 | $ | 629 | $ | 160 | $ | 2,110 | $ | 789 | $ | 44 | $ | 3,732 | ||||||||||||||||
Charge-offs | (34 | ) | (34 | ) | (7 | ) | (75 | ) | ||||||||||||||||||||
Recoveries | 1 | 3 | 7 | 2 | 13 | |||||||||||||||||||||||
Provisions | 559 | 29 | 796 | 175 | 7 | $ | 168 | 1,734 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Ending balance | $ | 1,155 | $ | 189 | $ | 2,909 | $ | 937 | $ | 46 | $ | 168 | $ | 5,404 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Real Estate | ||||||||||||||||||||||||||||
September 30, 2016 | Commercial | Construction | Commercial | Residential | Consumer | Unallocated | Total | |||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||||||||||
Beginning Balance July 1, 2016 | $ | 558 | $ | 170 | $ | 2,100 | $ | 745 | $ | 36 | $ | 3,609 | ||||||||||||||||
Charge-offs | (1 | ) | (1 | ) | (25 | ) | (8 | ) | (35 | ) | ||||||||||||||||||
Recoveries | 25 | 1 | 1 | 7 | 34 | |||||||||||||||||||||||
Provisions | (72 | ) | (13 | ) | 38 | 69 | 5 | $ | 2 | 29 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Ending balance | $ | 510 | $ | 157 | $ | 2,138 | $ | 790 | $ | 40 | $ | 2 | $ | 3,637 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2016 Allowance for loan losses: Beginning Balance January 1, 2016 Charge-offs Recoveries Provisions Ending balance Real Estate Commercial Construction Commercial Residential Consumer Unallocated Total $ 1,298 $ 202 $ 2,227 $ 613 $ 25 $ 4,365 (724 ) (250 ) (65 ) (33 ) (24 ) (1,096 ) 70 1 3 10 84 (134 ) 204 (24 ) 207 29 $ 2 284 $ 510 $ 157 $ 2,138 $ 790 $ 40 $ 2 $ 3,637
Real Estate | ||||||||||||||||||||||||||||
June 30, 2020 | Commercial | Construction | Commercial | Residential | Consumer | Unallocated | Total | |||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||||||||||
Beginning Balance, April 1, 2020 | $ | 1,671 | $ | 695 | $ | 3,917 | $ | 1,713 | $ | 152 | $ | 103 | $ | 8,251 | ||||||||||||||
Charge-offs | (501 | ) | (2 | ) | (71 | ) | (574 | ) | ||||||||||||||||||||
Recoveries | 7 | 2 | 1 | 37 | 47 | |||||||||||||||||||||||
Provisions | 7 | 46 | 1,660 | 358 | 44 | (103 | ) | 2,012 | ||||||||||||||||||||
Ending balance | $ | 1,685 | $ | 741 | $ | 5,078 | $ | 2,070 | $ | 162 | $ | $ | 9,736 | |||||||||||||||
Real Estate | ||||||||||||||||||||||||||||
June 30, 2020 | Commercial | Construction | Commercial | Residential | Consumer | Unallocated | Total | |||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||||||||||
Beginning Balance, January 1, 2020 | $ | 1,953 | $ | 473 | $ | 3,115 | $ | 1,820 | $ | 155 | $ | $ | 7,516 | |||||||||||||||
Charge-offs | (899 | ) | (595 | ) | (2 | ) | (201 | ) | (1,697 | ) | ||||||||||||||||||
Recoveries | 9 | 2 | 1 | 93 | 105 | |||||||||||||||||||||||
Provisions | 622 | 268 | 2,556 | 251 | 115 | 3,812 | ||||||||||||||||||||||
Ending balance | $ | 1,685 | $ | 741 | $ | 5,078 | $ | 2,070 | $ | 162 | $ | $ | 9,736 | |||||||||||||||
Real Estate | ||||||||||||||||||||||||||||
June 30, 2019 | Commercial | Construction | Commercial | Residential | Consumer | Unallocated | Total | |||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||||||||||
Beginning Balance, April 1, 2019 | $ | 1,023 | $ | 281 | $ | 3,459 | $ | 1,566 | $ | 157 | $ | $ | 6,486 | |||||||||||||||
Charge-off | (13 | ) | (20 | ) | (109 | ) | (142 | ) | ||||||||||||||||||||
Recoveries | 6 | 1 | 2 | 31 | 40 | |||||||||||||||||||||||
Provisions | 101 | 210 | 131 | 101 | 75 | 618 | ||||||||||||||||||||||
Ending balance | $ | 1,117 | $ | 491 | $ | 3,591 | $ | 1,649 | $ | 154 | $ | $ | 7,002 | |||||||||||||||
Real Estate | ||||||||||||||||||||||||||||
June 30, 2019 | Commercial | Construction | Commercial | Residential | Consumer | Unallocated | Total | |||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||||||||||
Beginning Balance, January 1, 2019 | $ | 1,162 | $ | 404 | $ | 3,298 | $ | 1,286 | $ | 50 | $ | 148 | $ | 6,348 | ||||||||||||||
Charge-offs | (389 | ) | (20 | ) | (253 | ) | (662 | ) | ||||||||||||||||||||
Recoveries | 11 | 2 | 3 | 99 | 115 | |||||||||||||||||||||||
Provisions | 333 | 87 | 291 | 380 | 258 | (148 | ) | 1,201 | ||||||||||||||||||||
Ending balance | $ | 1,117 | $ | 491 | $ | 3,591 | $ | 1,649 | $ | 154 | $ | $ | 7,002 |
Real Estate | ||||||||||||||||||||||||||||
September 30, 2017 | Commercial | Construction | Commercial | Residential | Consumer | Unallocated | Total | |||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||||||||||
Ending balance | $ | 1,155 | $ | 189 | $ | 2,909 | $ | 937 | $ | 46 | $ | 168 | $ | 5,404 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Ending balance: individually evaluated for impairment | 25 | 194 | 54 | 273 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Ending balance: collectively evaluated for impairment | $ | 1,130 | $ | 189 | $ | 2,715 | $ | 884 | $ | 45 | $ | 168 | $ | 5,131 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Loans receivable: | ||||||||||||||||||||||||||||
Ending balance | $ | 74,389 | $ | 9,754 | $ | 337,688 | $ | 131,741 | $ | 6,615 | $ | 560,187 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Ending balance: individually evaluated for impairment | 799 | 3,671 | 2,462 | 6,932 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Ending balance: collectively evaluated for impairment | $ | 73,590 | $ | 9,754 | $ | 334,017 | $ | 129,279 | $ | 6,615 | $ | 553,255 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Real Estate | ||||||||||||||||||||||||||||
December 31, 2016 | Commercial | Construction | Commercial | Residential | Consumer | Unallocated | Total | |||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||||||||||
Ending balance | $ | 629 | $ | 160 | $ | 2,110 | $ | 789 | $ | 44 | $ | 3,732 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Ending balance: individually evaluated for impairment | 8 | 140 | 148 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Ending balance: collectively evaluated for impairment | $ | 621 | $ | 160 | $ | 1,970 | $ | 789 | $ | 44 | $ | 3,584 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Loans receivable: | ||||||||||||||||||||||||||||
Ending balance | $ | 51,166 | $ | 8,605 | $ | 212,550 | $ | 130,874 | $ | 6,148 | $ | 409,343 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Ending balance: individually evaluated for impairment | 966 | 3,924 | 2,515 | 7,405 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Ending balance: collectively evaluated for impairment | $ | 50,200 | $ | 8,605 | $ | 208,626 | $ | 128,359 | $ | 6,148 | $ | 401,938 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real Estate | ||||||||||||||||||||||||||||
June 30, 2020 | Commercial | Construction | Commercial | Residential | Consumer | Unallocated | Total | |||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||||||||||
Ending balance | $ | 1,685 | $ | 741 | $ | 5,078 | $ | 2,070 | $ | 162 | $ | $ | 9,736 | |||||||||||||||
Ending balance: | ||||||||||||||||||||||||||||
individually evaluated for impairment | 29 | 29 | ||||||||||||||||||||||||||
Ending balance: | ||||||||||||||||||||||||||||
collectively evaluated for impairment | 1,656 | 741 | 5,078 | 2,070 | 162 | 9,707 | ||||||||||||||||||||||
Ending balance: | ||||||||||||||||||||||||||||
purchased credit impaired loans | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
Loans receivable: | ||||||||||||||||||||||||||||
Ending balance | $ | 380,998 | $ | 79,299 | $ | 494,642 | $ | 203,752 | $ | 6,762 | $ | $ | 1,165,453 | |||||||||||||||
Ending balance: | ||||||||||||||||||||||||||||
individually evaluated for impairment | 2,180 | 7,761 | 2,568 | 12,509 | ||||||||||||||||||||||||
Ending balance: | ||||||||||||||||||||||||||||
collectively evaluated for impairment | 378,818 | 79,299 | 485,484 | 201,004 | 6,762 | 1,151,367 | ||||||||||||||||||||||
Ending balance: | ||||||||||||||||||||||||||||
purchased credit impaired loans | $ | $ | $ | 1,397 | $ | 180 | $ | $ | $ | 1,577 | ||||||||||||||||||
Real Estate | ||||||||||||||||||||||||||||
December 31, 2019 | Commercial | Construction | Commercial | Residential | Consumer | Unallocated | Total | |||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||||||||||
Ending balance | $ | 1,953 | $ | 473 | $ | 3,115 | $ | 1,820 | $ | 155 | $ | $ | 7,516 | |||||||||||||||
Ending balance: | ||||||||||||||||||||||||||||
individually evaluated for impairment | 712 | 218 | 930 | |||||||||||||||||||||||||
Ending balance: | ||||||||||||||||||||||||||||
collectively evaluated for impairment | 1,241 | 473 | 2,897 | 1,820 | 155 | 6,586 | ||||||||||||||||||||||
Ending balance: | ||||||||||||||||||||||||||||
purchased credit impaired loans | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
Loans receivable: | ||||||||||||||||||||||||||||
Ending balance | $ | 118,658 | $ | 61,831 | $ | 455,901 | $ | 207,354 | $ | 8,365 | $ | $ | 852,109 | |||||||||||||||
Ending balance: | ||||||||||||||||||||||||||||
individually evaluated for impairment | 2,260 | 1,224 | 2,085 | 5,569 | ||||||||||||||||||||||||
Ending balance: | ||||||||||||||||||||||||||||
collectively evaluated for impairment | 116,390 | 61,831 | 453,156 | 205,026 | 8,365 | 844,768 | ||||||||||||||||||||||
Ending balance: | ||||||||||||||||||||||||||||
purchased credit impaired loans | $ | 8 | $ | $ | 1,521 | $ | 243 | $ | $ | $ | 1,772 | |||||||||||||||||
• | Pass—A loan to borrowers with acceptable credit quality and risk that is not adversely classified as Substandard, Doubtful, Loss or designated as Special Mention. |
• | Special Mention—A loan that has potential weaknesses that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or in the institution’s credit position at some future date. Special Mention loans are not adversely classified since they do not expose the Company to sufficient risk to warrant adverse classification. |
• | Substandard—A loan that is inadequately protected by the current sound worth and paying capacity of the obligor or by the collateral pledged, if any. Loans so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. |
• | Doubtful—A loan classified as Doubtful has all the weaknesses inherent in one classified Substandard with the added characteristic that the weaknesses make the collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. |
• | Loss—A loan classified as Loss is considered uncollectible and of such little value that its continuance as a bankable loan is not warranted. This classification does not mean that the loan has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing off this basically worthless asset even though partial recovery may occur in the future. |
September 30, 2017 | Pass | Special Mention | Substandard | Doubtful | Total | |||||||||||||||
Commercial | $ | 70,549 | $ | 2,277 | $ | 1,563 | $ | 74,389 | ||||||||||||
Real estate: | ||||||||||||||||||||
Construction | 9,344 | 410 | 9,754 | |||||||||||||||||
Commercial | 326,203 | 7,753 | 3,732 | 337,688 | ||||||||||||||||
Residential | 130,001 | 28 | 1,712 | 131,741 | ||||||||||||||||
Consumer | 6,615 | 6,615 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total | $ | 542,712 | $ | 10,468 | $ | 7,007 | $ | 560,187 | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
December 31, 2016: | Pass | Special Mention | Substandard | Doubtful | Total | |||||||||||||||
Commercial | $ | 47,765 | $ | 1,604 | $ | 1,797 | $ | 51,166 | ||||||||||||
Real estate: | ||||||||||||||||||||
Construction | 8,605 | 8,605 | ||||||||||||||||||
Commercial | 200,636 | 8,063 | 3,851 | 212,550 | ||||||||||||||||
Residential | 129,320 | 28 | 1,526 | 130,874 | ||||||||||||||||
Consumer | 6,148 | 6,148 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total | $ | 392,474 | $ | 9,695 | $ | 7,174 | $ | 409,343 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
Information concerning2019:
June 30, 2020 | Pass | Special Mention | Substandard | Doubtful | Total | |||||||||||||||
Commercial | $ | 369,429 | $ | 5,411 | $ | 6,158 | $ | $ | 380,998 | |||||||||||
Real estate: | ||||||||||||||||||||
Construction | 78,153 | 1,146 | 79,299 | |||||||||||||||||
Commercial | 453,072 | 26,775 | 14,795 | 494,642 | ||||||||||||||||
Residential | 198,363 | 2,182 | 3,207 | 203,752 | ||||||||||||||||
Consumer | 6,762 | 6,762 | ||||||||||||||||||
Total | $ | 1,105,779 | $ | 35,514 | $ | 24,160 | $ | $ | 1,165,453 | |||||||||||
December 31, 2019 | Pass | Special Mention | Substandard | Doubtful | Total | |||||||||||||||
Commercial | $ | 109,190 | $ | 5,992 | $ | 3,476 | $ | $ | 118,658 | |||||||||||
Real estate: | ||||||||||||||||||||
Construction | 61,678 | 153 | 61,831 | |||||||||||||||||
Commercial | 430,771 | 9,271 | 15,859 | 455,901 | ||||||||||||||||
Residential | 203,381 | 1,437 | 2,536 | 207,354 | ||||||||||||||||
Consumer | 8,365 | 8,365 | ||||||||||||||||||
Total | $ | 813,385 | $ | 16,853 | $ | 21,871 | $ | $ | 852,109 | |||||||||||
September 30, 2017 | December 31, 2016 | |||||||
Commercial | $ | 199 | $ | 356 | ||||
Real estate: | ||||||||
Construction | ||||||||
Commercial | 704 | 359 | ||||||
Residential | 862 | 671 | ||||||
Consumer | ||||||||
|
|
|
| |||||
Total | $ | 1,765 | $ | 1,386 | ||||
|
|
|
|
The major classifications2019. Purchase credit impaired (“PCI”) loans are excluded from the aging and nonaccrual loan schedules.
Accrual Loans | ||||||||||||||||||||||||||||
June 30, 2020 | 30-59 Days Past Due | 60-89 Days Past Due | 90 or More Days Past Due | Total Past Due | Current | Nonaccrual Loans | Total Loans | |||||||||||||||||||||
Commercial | $ | 77 | $ | 25 | $ | $ | 102 | $ | 380,077 | $ | 819 | $ | 380,998 | |||||||||||||||
Real estate: | ||||||||||||||||||||||||||||
Construction | 79,299 | 79,299 | ||||||||||||||||||||||||||
Commercial | 160 | 160 | 491,778 | 1,307 | 493,245 | |||||||||||||||||||||||
Residential | 363 | 448 | 170 | 981 | 201,476 | 1,115 | 203,572 | |||||||||||||||||||||
Consumer | 33 | 21 | 13 | 67 | 6,695 | 6,762 | ||||||||||||||||||||||
Total | $ | 633 | $ | 494 | $ | 183 | $ | 1,310 | $ | 1,159,325 | $ | 3,241 | $ | 1,163,876 | ||||||||||||||
Purchased credit impaired loans | 1,577 | |||||||||||||||||||||||||||
Total Loans | $ | 1,165,453 | ||||||||||||||||||||||||||
Accrual Loans | Nonaccrual Loans | Total Loans | ||||||||||||||||||||||||||
December 31, 2019 | 30-59 Days Past Due | 60-89 Days Past Due | 90 or More Days Past Due | Total Past Due | Current | |||||||||||||||||||||||
Commercial | $ | 137 | $ | $ | $ | 137 | $ | 117,354 | $ | 1,159 | $ | 118,650 | ||||||||||||||||
Real estate: | ||||||||||||||||||||||||||||
Construction | 9 | 9 | 61,822 | 61,831 | ||||||||||||||||||||||||
Commercial | 147 | 147 | 453,774 | 459 | 454,380 | |||||||||||||||||||||||
Residential | 3,402 | 820 | 18 | 4,240 | 202,202 | 669 | 207,111 | |||||||||||||||||||||
Consumer | 84 | 14 | 27 | 125 | 8,240 | 8,365 | ||||||||||||||||||||||
Total | $ | 3,779 | $ | 834 | $ | 45 | $ | 4,658 | $ | 843,392 | $ | 2,287 | $ | 850,337 | ||||||||||||||
Purchased credit impaired loans | 1,772 | |||||||||||||||||||||||||||
Total Loans | $ | 852,109 | ||||||||||||||||||||||||||
This Quarter | Year-to-Date | |||||||||||||||||||||||||||
September 30, 2017 | Recorded Investment | Unpaid Principal Balance | Related Allowance | Average Recorded Investment | Interest Income Recognized | Average Recorded Investment | Interest Income Recognized | |||||||||||||||||||||
With no related allowance: | ||||||||||||||||||||||||||||
Commercial | $ | 724 | $ | 724 | $ | 798 | $ | 8 | $ | 803 | $ | 23 | ||||||||||||||||
Real estate: | ||||||||||||||||||||||||||||
Construction | ||||||||||||||||||||||||||||
Commercial | 2,753 | 2,753 | 2,760 | 32 | 2,992 | 90 | ||||||||||||||||||||||
Residential | 2,274 | 2,292 | 2,304 | 28 | 2,408 | 87 | ||||||||||||||||||||||
Consumer | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | 5,751 | 5,769 | 5,862 | 68 | 6,203 | 200 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
With an allowance recorded: | ||||||||||||||||||||||||||||
Commercial | 75 | 75 | $ | 25 | 78 | 76 | 1 | |||||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||||
Construction | ||||||||||||||||||||||||||||
Commercial | 918 | 918 | 194 | 820 | 8 | 798 | 20 | |||||||||||||||||||||
Residential | 188 | 326 | 54 | 189 | 2 | 126 | 6 | |||||||||||||||||||||
Consumer | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | 1,181 | 1,319 | 273 | 1,087 | 10 | 1,000 | 27 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Commercial | 799 | 799 | 25 | 876 | 8 | 879 | 24 | |||||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||||
Construction | ||||||||||||||||||||||||||||
Commercial | 3,671 | 3,671 | 194 | 3,580 | 40 | 3,790 | 110 | |||||||||||||||||||||
Residential | 2,462 | 2,618 | 54 | 2,493 | 30 | 2,534 | 93 | |||||||||||||||||||||
Consumer | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | $ | 6,932 | $ | 7,088 | $ | 273 | $ | 6,949 | $ | 78 | $ | 7,203 | $ | 227 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Year Ended | ||||||||||||||||||||
December 31, 2016 | Recorded Investment | Unpaid Principal Balance | Related Allowance | Average Recorded Investment | Interest Income Recognized | |||||||||||||||
With no related allowance: | ||||||||||||||||||||
Commercial | $ | 225 | $ | 225 | $ | 225 | ||||||||||||||
Real estate: | ||||||||||||||||||||
Construction | ||||||||||||||||||||
Commercial | 3,094 | 3,094 | 3,168 | 147 | ||||||||||||||||
Residential | 2,515 | 2,652 | 2,747 | 130 | ||||||||||||||||
Consumer | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total | 5,834 | 5,971 | 6,140 | 277 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
With an allowance recorded: | ||||||||||||||||||||
Commercial | 741 | 741 | $ | 8 | 761 | 30 | ||||||||||||||
Real estate: | ||||||||||||||||||||
Construction | ||||||||||||||||||||
Commercial | 830 | 830 | 140 | 840 | ||||||||||||||||
Residential | ||||||||||||||||||||
Consumer | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total | 1,571 | 1,571 | 148 | 1,601 | 30 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Commercial | 966 | 966 | 8 | 986 | 30 | |||||||||||||||
Real estate: | ||||||||||||||||||||
Construction | ||||||||||||||||||||
Commercial | 3,924 | 3,924 | 140 | 4,008 | 147 | |||||||||||||||
Residential | 2,515 | 2,652 | 2,747 | 130 | ||||||||||||||||
Consumer | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total | $ | 7,405 | $ | 7,542 | $ | 148 | $ | 7,741 | $ | 307 | ||||||||||
|
|
|
|
|
|
|
|
|
|
September 30, 2016 With no related allowance: Commercial Real estate: Construction Commercial Residential Consumer Total With an allowance recorded: Commercial Real estate: Construction Commercial Residential Consumer Total Commercial Real estate: Construction Commercial Residential Consumer Total This Quarter Year-to-Date Recorded
Investment Unpaid
Principal
Balance Related
Allowance Average
Recorded
Investment Interest
Income
Recognized Average
Recorded
Investment Interest
Income
Recognized $ 838 $ 838 $ 843 $ 8 $ 849 $ 22 3,438 3,438 3,455 20 3,823 110 2,709 2,846 2,907 34 2,942 102 6,985 7,122 7,205 62 7,614 234 126 126 $ 2 128 132 298 298 55 269 231 119 119 33 119 2 120 4 543 543 90 516 2 483 4 964 964 2 971 8 981 22 3,736 3,736 55 3,724 20 4,054 110 2,828 2,965 33 3,026 36 3,062 106 $ 7,528 $ 7,665 $ 90 $ 7,721 $ 64 $ 8,097 $ 238
This Quarter | Year-to-Date | |||||||||||||||||||||||||||
June 30, 2020 | Recorded Investment | Unpaid Principal Balance | Related Allowance | Average Recorded Investment | Interest Income Recognized | Average Recorded Investment | Interest Income Recognized | |||||||||||||||||||||
With no related allowance: | ||||||||||||||||||||||||||||
Commercial | $ | 2,059 | $ | 2,169 | $ | $ | 1,579 | $ | 132 | $ | 1,603 | $ | 200 | |||||||||||||||
Real estate: | ||||||||||||||||||||||||||||
Construction | ||||||||||||||||||||||||||||
Commercial | 9,158 | 9,659 | 5,854 | 19 | 5,561 | 66 | ||||||||||||||||||||||
Residential | 2,748 | 2,878 | 2,520 | 81 | 2,539 | 106 | ||||||||||||||||||||||
Consumer | ||||||||||||||||||||||||||||
Total | 13,965 | 14,706 | 9,953 | 232 | 9,703 | 372 | ||||||||||||||||||||||
With an allowance recorded: | ||||||||||||||||||||||||||||
Commercial | 121 | 121 | 29 | 121 | 621 | |||||||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||||
Construction | ||||||||||||||||||||||||||||
Commercial | 184 | 391 | 4 | |||||||||||||||||||||||||
Residential | ||||||||||||||||||||||||||||
Consumer | ||||||||||||||||||||||||||||
Total | 121 | 121 | 29 | 305 | 1,012 | 4 | ||||||||||||||||||||||
Commercial | 2,180 | 2,290 | 29 | 1,700 | 132 | 2,224 | 200 | |||||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||||
Construction | ||||||||||||||||||||||||||||
Commercial | 9,158 | 9,659 | 6,038 | 19 | 5,952 | 70 | ||||||||||||||||||||||
R esidential | 2,748 | 2,878 | 2,520 | 81 | 2,539 | 106 | ||||||||||||||||||||||
Consumer | ||||||||||||||||||||||||||||
Total | 14,086 | $ | 14,827 | $ | 29 | $ | 10,258 | $ | 232 | $ | 10,715 | $ | 376 | |||||||||||||||
Recorded Investment | Unpaid Principal Balance | Related Allowance | For the Year Ended | |||||||||||||||||
December 31, 2019 | Average Recorded Investment | Interest Income Recognized | ||||||||||||||||||
With no related allowance: | ||||||||||||||||||||
Commercial | $ | 1,147 | $ | 1,257 | $ | 648 | $ | 660 | ||||||||||||
Real estate: | ||||||||||||||||||||
Construction | ||||||||||||||||||||
Commercial | 1,963 | 1,963 | 3,124 | 1,456 | ||||||||||||||||
Residential | 2,329 | 2,467 | 2,397 | 173 | ||||||||||||||||
Consumer | ||||||||||||||||||||
Total | 5,439 | 5,687 | 6,169 | 2,289 | ||||||||||||||||
With an allowance recorded: | ||||||||||||||||||||
Commercial | 1,121 | 1,121 | $ | 712 | 685 | |||||||||||||||
Real estate: | ||||||||||||||||||||
Construction | ||||||||||||||||||||
Commercial | 782 | 936 | 218 | 658 | 17 | |||||||||||||||
Residential | 91 | |||||||||||||||||||
Consumer | ||||||||||||||||||||
Total | 1,903 | 2,057 | 930 | 1,434 | 17 | |||||||||||||||
Commercial | 2,268 | 2,378 | 712 | 1,333 | 660 | |||||||||||||||
Real estate: | ||||||||||||||||||||
Construction | ||||||||||||||||||||
Commercial | 2,745 | 2,899 | 218 | 3,782 | 1,473 | |||||||||||||||
Residential | 2,329 | 2,467 | 2,488 | 173 | ||||||||||||||||
Consumer | ||||||||||||||||||||
Total | $ | 7,342 | $ | 7,744 | $ | 930 | $ | 7,603 | $ | 2,306 | ||||||||||
This Quarter | Year-to-Date | |||||||||||||||||||||||||||
June 30, 2019 | Recorded Investment | Unpaid Principal Balance | Related Allowance | Average Recorded Investment | Interest Income Recognized | Average Recorded Investment | Interest Income Recognized | |||||||||||||||||||||
With no related allowance: | ||||||||||||||||||||||||||||
Commercial | $ | 125 | $ | 125 | $ | $ | 157 | $ | 485 | $ | 163 | $ | 508 | |||||||||||||||
Real estate: | ||||||||||||||||||||||||||||
Construction | 43 | 43 | ||||||||||||||||||||||||||
Commercial | 4,222 | 4,222 | 4,240 | 104 | 4,255 | 204 | ||||||||||||||||||||||
Residential | 2,201 | 2,201 | 2,209 | 34 | 2,276 | 125 | ||||||||||||||||||||||
Consumer | ||||||||||||||||||||||||||||
Total | 6,548 | 6,548 | 6,649 | 623 | 6,737 | 837 | ||||||||||||||||||||||
With an allowance recorded: | ||||||||||||||||||||||||||||
Commercial | 774 | 774 | 103 | 808 | 926 | |||||||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||||
Construction | ||||||||||||||||||||||||||||
Commercial | 373 | 373 | 92 | 372 | 4 | 413 | 8 | |||||||||||||||||||||
Residential | 178 | 316 | 50 | 179 | 2 | 180 | 3 | |||||||||||||||||||||
Consumer | ||||||||||||||||||||||||||||
Total | 1,325 | 1,463 | 245 | 1,359 | 6 | 1,519 | 11 | |||||||||||||||||||||
Commercial | 899 | 899 | 103 | 965 | 485 | 1,089 | 508 | |||||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||||
Construction | 43 | 43 | ||||||||||||||||||||||||||
Commercial | 4,595 | 4,595 | 92 | 4,612 | 108 | 4,668 | 212 | |||||||||||||||||||||
Residential | 2,379 | 2,517 | 50 | 2,388 | 36 | 2,456 | 128 | |||||||||||||||||||||
Consumer | ||||||||||||||||||||||||||||
Total | $ | 7,873 | $ | 8,011 | $ | 245 | $ | 8,008 | $ | 629 | $ | 8,256 | $ | 848 | ||||||||||||||
Included in the commercial loan and commercial and residential real estate categories are troubled debt restructurings that are classified as impaired. Troubled debt restructurings totaled $5,593 at September 30, 2017, $6,208 at December 31, 2016 and $6,342 at September 30, 2016.
Purchased loans are initially recorded at their acquisition date fair values. The carryover of the allowance for loan losses is prohibited as any credit losses in the loans are included in the determination of the fair value of the loans at the acquisition date. Fair values for purchased loans are basedand 1 default on a cash flow methodology that involves assumptions and judgments as to credit risk, default rates, loss severity, collateral values, discount rates, payment speeds, and prepayment risk.
As part of its acquisition due diligence process,restructured loan totaling $223 during the Bank reviews the acquired institution’s loan grading system and the associated risk rating for loans. In performing this review, the Bank considers cash flows, debt service coverage, delinquency status, accrual status, and collateral for the loan. This process allows the Bank to clearly identify the population of acquired loans that had evidence of deterioration in credit quality since origination and for which it was probable, at acquisition, that the Bank would be unable to collect all contractually required payments. All such loans identified by the Bank are considered to be within the scope of ASC310-30, “Loan and Debt Securities Acquired with Deteriorated Credit Quality” and are identified as “Purchased Credit Impaired Loans”.
As a result of the merger with Citizens, effective December 31, 2015, the Bank identified ten purchased credit impaired (“PCI”) loans. As part of the consolidation with Union, effective November 1, 2013, the Bank identified fourteen PCI loans. For all PCI loans, the excess of cash flows expected at acquisition over the estimated fair value is referred to as the accretable discount and is recognized into interest income over the remaining life of the loan. The difference between contractually required payments at acquisition and the cash flows expected to be collected at acquisition is referred to as thenon-accretable discount. Thenon-accretable discount represents estimated future credit losses expected to be incurred over the life of the loan. Subsequent decreases to the expected cash flows require the Bank to evaluate the need for an allowance for loan losses on these loans. Subsequent improvements in expected cash flows result in the reversal of a corresponding amount of thenon-accretable discount which the Bank then reclassifies as an accretable discount that is recognized into interest income over the remaining life of the loan. The Bank’s evaluation of the amount of future cash flows that it expects to collect is based on a cash flow methodology that involves assumptions and judgments as to credit risk, collateral values, discount rates, payment speeds, and prepayment risk. Charge-offs of the principal amount on purchased impaired loans are first applied to thenon-accretable discount.
For purchased loans that are not deemed impaired at acquisition, credit discounts representing principal losses expected over the life of the loans are a component of the initial fair value, and the discount is accreted to interest income over the life of the asset. Subsequent to the purchase date, the method used to evaluate the sufficiency of the credit discount is similar to originated loans, and if necessary, additional reserves are recognized in the allowance for loan losses.
The following is a summary of the loans acquired in the Union and Citizens mergers, as of the dates of the consolidation:
Purchased Credit Impaired Loans | Purchased Non- Impaired Loans | Total Purchased Loans | ||||||||||
Contractually required principal and interest at acquisition | $ | 11,184 | $ | 174,484 | $ | 185,668 | ||||||
Contractual cash flows not expected to be collected | (5,724 | ) | (23,009 | ) | (28,733 | ) | ||||||
|
|
|
|
|
| |||||||
Expected cash flows at acquisition | 5,460 | 151,475 | 156,935 | |||||||||
Interest component of expected cash flows | (603 | ) | (23,119 | ) | (23,722 | ) | ||||||
|
|
|
|
|
| |||||||
Basis in acquired loans at acquisition - estimated fair value | $ | 4,857 | $ | 128,356 | $ | 133,213 | ||||||
|
|
|
|
|
|
The unpaid principal balances and the related carrying amount of Union and Citizens acquired loans as of Septembersix months ended June 30, 2017 and December 31, 2016 were as follows:
September 30, 2017 | December 31, 2016 | |||||||
Credit impaired purchased loans evaluated individually for incurred credit losses | ||||||||
Outstanding balance | $ | 1,216 | $ | 1,401 | ||||
Carrying Amount | 730 | 887 | ||||||
Other purchased loans evaluated collectively for incurred credit losses | ||||||||
Outstanding balance | 72,449 | 84,743 | ||||||
Carrying Amount | 71,864 | 83,670 | ||||||
Total Purchased Loans | ||||||||
Outstanding balance | 73,665 | 86,144 | ||||||
Carrying Amount | $ | 72,594 | $ | 84,557 |
As of the indicated dates, the changes in the accretable discount related to the purchased credit impaired loans were as follows:
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Balance - beginning of period | $ | 313 | $ | 457 | $ | 370 | $ | 524 | ||||||||
Accretion recognized during the period | (32 | ) | (410 | ) | (76 | ) | (539 | ) | ||||||||
Net reclassification fromnon-accretable to accretable | (2 | ) | 326 | (15 | ) | 388 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Balance - end of period | $ | 279 | $ | 373 | $ | 279 | $ | 373 | ||||||||
|
|
|
|
|
|
|
|
2019.
Unused
June 30, 2020 | December 31, 2019 | |||||||
Unused portions of lines of credit | $ | 89,916 | $ | 81,665 | ||||
Construction loans | 28,764 | 41,168 | ||||||
Commitments to extend credit | 20,841 | 24,954 | ||||||
Deposit overdraft protection | 23,964 | 23,730 | ||||||
Standby and performance letters of credit | 4,743 | 4,726 | ||||||
Total | $ | 168,228 | $ | 176,243 | ||||
would have a material adverse effect on our operating results or financial position.
September 30, 2017 | December 31, 2016 | |||||||
Other real estate owned | $ | 144 | $ | 625 | ||||
Bank owned life insurance | 17,128 | 11,857 | ||||||
Restricted equity securities | 2,186 | 1,845 | ||||||
Deferred tax assets | 6,904 | 7,402 | ||||||
Other assets | 3,339 | 2,083 | ||||||
|
|
|
| |||||
Total | $ | 29,701 | $ | 23,812 | ||||
|
|
|
|
June 30, 2020 | December 31, 2019 | |||||||
Other real estate owned | $ | 363 | $ | 82 | ||||
Bank owned life insurance | 31,055 | 30,647 | ||||||
Restricted equity securities | 1,769 | 990 | ||||||
Deferred tax assets | 4,519 | 4,272 | ||||||
Lease right-of-use | 3,508 | 3,856 | ||||||
Other assets | 5,364 | 6,082 | ||||||
Total | $ | 46,578 | $ | 45,929 | ||||
Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | |||||||
Cash paid for amounts included in the measurement of lease liabilities: | ||||||||
Operating cash flows from operating leases | $ | 391 | $ | 273 | ||||
ROU assets obtained in exchange for lease liabilities | $ | $ | 4,612 | |||||
Weighted average remaining lease term—operating leases, in years | 9.11 | 10.65 | ||||||
Weighted average discount rate—operating leases | 3.02 | % | 3.07 | % |
2020 | $ | 380 | ||
2021 | 754 | |||
2022 | 697 | |||
2023 | 485 | |||
2024 | 317 | |||
Thereafter | 1568 | |||
Total lease payments | 4,201 | |||
Less imputed interest | 639 | |||
$ | 3,562 | |||
Current fair value guidance provides a consistent definition of fair value, which focuses on exit price in an orderly transaction that is not a forced liquidation or distressed sale between participants at the measurement date under current market conditions. If there has been a significant decrease in the volume and level of activity for the asset or liability, a change in valuation technique or the use of multiple valuation techniques may be appropriate. In such instances, determining the price at which willing market participants would transact at the measurement date under current market conditions depends on the facts and circumstances and requires the use of significant judgment. The fair value is a reasonable point within the range that is most representative of fair value under current market conditions.
Cashassets and cash equivalents: The carrying values of cash and cash equivalents as reportedliabilities measured at fair value on the balance sheet approximate fair value.
a recurring basis:
Loans held for sale: The carrying value of loans held for sale as reported on the balance sheet approximate fair value.
Net loans: For adjustable-rate loans thatre-price frequently and with no significant credit risk, fair values are based on carrying values. The fair values of othernon-impaired loans are estimated using discounted cash flow analysis, using interest rates currently offered in the market for loans with similar terms to borrowers of similar credit risk. Fair values for impaired loans are estimated using discounted cash flow analysis determined by the loan review function or underlying collateral values, where applicable.
Accrued interest receivable: The carrying value of accrued interest receivable as reported on the balance sheet approximates fair value.
Restricted equity securities:The carrying values of restricted equity securities approximate fair value, due to the lack of marketability for these securities.
Deposits: The fair values of noninterest-bearing deposits and savings, NOW and money market accounts are the amounts payable on demand at the reporting date. The fair value estimates do not include the benefit that results from suchlow-cost funding provided by the deposit liabilities compared to the cost of borrowing funds in the market. For fixed-rate time deposits, the present value of future cash flows is used to estimate fair values. The discount rates used are the current rates offered for time deposits with similar maturities.
Short-term borrowings: The carrying values of short-term borrowings approximate fair value.
Long-term debt: The fair value of fixed-rate long-term debt is based on the present value of future cash flows. The discount rate used is the current rate offered for long-term debt with the same maturity.
Accrued interest payable: The carrying value of accrued interest payable as reported on the balance sheet approximates fair value.
Off-balance sheet financial instruments:
The majority of commitments to extend credit, unused portions of lines of credit and standby letters of credit carry current market interest rates if converted to loans. Because such commitments are generally unassignable by either the Company or the borrower, they only have value to the Company and the borrower. None of the commitments are subject to undue credit risk. The estimated fair values ofoff-balance sheet financial instruments are based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties’ credit standing. The fair value ofoff-balance sheet financial instruments was not material at September 30, 2017 and December 31, 2016.
Fair Value Measurement Using | ||||||||||||||||
September 30, 2017 | Amount | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
State and Municipals: | ||||||||||||||||
Taxable | $ | 35,132 | $ | 35,132 | ||||||||||||
Tax-exempt | 5,801 | 5,801 | ||||||||||||||
Mortgage-backed securities: | ||||||||||||||||
U.S. Government agencies | 1,536 | 1,536 | ||||||||||||||
U.S. Government-sponsored enterprises | 5,423 | 5,423 | ||||||||||||||
Corporate debt obligations | 8,982 | 8,982 | ||||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 56,874 | $ | $ | 56,874 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Fair Value Measurement Using | ||||||||||||||||
December 31, 2016 | Amount | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
U.S. Treasury securities | $ | 5,021 | $ | 5,021 | ||||||||||||
State and municipals: | ||||||||||||||||
Taxable | 42,394 | 42,394 | ||||||||||||||
Tax-exempt | 5,674 | 5,674 | ||||||||||||||
Mortgage-backed securities: | ||||||||||||||||
U.S. Government agencies | 1,890 | 1,890 | ||||||||||||||
U.S. Government-sponsored enterprises | 8,896 | 8,896 | ||||||||||||||
Corporate debt obligations | 9,050 | 9,050 | ||||||||||||||
Equity securities, financial services | 188 | $ | 188 | |||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 73,113 | $ | 188 | $ | 72,925 | ||||||||||
|
|
|
|
|
|
|
|
Fair Value Measurement Using | ||||||||||||||||
June 30, 2020 | Amount | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
State and Municipals: | ||||||||||||||||
Taxable | $ | 9,773 | $ | 9,773 | ||||||||||||
Tax-exempt | 8,791 | 8,791 | ||||||||||||||
Mortgage-backed securities: | ||||||||||||||||
U.S. Government agencies | 28,495 | 28,495 | ||||||||||||||
U.S. Government-sponsored enterprises | 23,803 | 23,803 | ||||||||||||||
Corporate debt obligations | 3,272 | 3,272 | ||||||||||||||
Total | $ | 74,134 | $ | 74,134 | ||||||||||||
Fair Value Measurement Using | ||||||||||||||||
December 31, 2019 | Amount | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
State and municipals: | ||||||||||||||||
Taxable | $ | 24,824 | $ | 24,824 | ||||||||||||
Tax-exempt | 4,333 | 4,333 | ||||||||||||||
Mortgage-backed securities: | ||||||||||||||||
U.S. Government agencies | 36,134 | 36,134 | ||||||||||||||
U.S. Government-sponsored enterprises | 22,645 | 22,645 | ||||||||||||||
Corporate debt obligations | 3,311 | 3,311 | ||||||||||||||
Total | $ | 91,247 | $ | 91,247 | ||||||||||||
Fair Value Measurement Using | ||||||||||||||||
September 30, 2017 | Amount | (Level 1) Quoted Prices in Active Markets for Identical Assets | (Level 2) Significant Other Observable Inputs | (Level 3) Significant Unobservable Inputs | ||||||||||||
Loans held for sale | $ | 519 | $ | 519 | ||||||||||||
Other real estate owned | 144 | $ | 144 | |||||||||||||
Impaired loans, net of related allowance | 908 | 908 | ||||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 1,571 | $ | 519 | $ | 1,052 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Fair Value Measurement Using | ||||||||||||||||
December 31, 2016 | Amount | (Level 1) Quoted Prices in Active Markets for Identical Assets | (Level 2) Significant Other Observable Inputs | (Level 3) Significant Unobservable Inputs | ||||||||||||
Loans held for sale | $ | 652 | $ | 652 | ||||||||||||
Other real estate owned | 625 | $ | 625 | |||||||||||||
Impaired loans, net of related allowance | 1,424 | 1,424 | ||||||||||||||
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Total | $ | 2,701 | $ | 652 | $ | 2,049 | ||||||||||
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Fair values of impaired loans are based on the present value of expected future cash flows discounted at the loan’s effective interest rate or the fair value of the collateral if the loan is collateral dependent.
Fair value of other real estate owned is generally determined through independent appraisals of the underlying collateral, which generally include various Level 3 inputs which are not identifiable. Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses. The range and weighted average of liquidation expenses and other appraisal adjustments are presented as a percent of the appraisal.
Fair Value Measurement Using | ||||||||||||||||
June 30, 2020 | Amount | (Level 1) Quoted Prices in Active Markets for Identical Assets | (Level 2) Significant Other Observable Inputs | (Level 3) Significant Unobservable Inputs | ||||||||||||
Other real estate owned | $ | 363 | $ | 363 | ||||||||||||
Impaired loans, net of related allowance | 92 | 92 | ||||||||||||||
Total | $ | 455 | $ | 455 | ||||||||||||
Fair Value Measurement Using | ||||||||||||||||
December 31, 2019 | Amount | (Level 1) Quoted Prices in Active Markets for Identical Assets | (Level 2) Significant Other Observable Inputs | (Level 3) Significant Unobservable Inputs | ||||||||||||
Other real estate owned | $ | 82 | $ | 82 | ||||||||||||
Impaired loans, net of related allowance | 973 | 973 | ||||||||||||||
Total | $ | 1,055 | $ | 1,055 | ||||||||||||
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Fair value is generally determined through independent appraisals2019.
Quantitative Information about Level 3 Fair Value Measurements | ||||||||||||||||
June 30, 2020 | Fair Value Estimate | Valuation Techniques | Unobservable Input | Range (Weighted Average) | ||||||||||||
Other real estate owned | $ | 363 | Appraisal of collateral | Appraisal adjustments | 22.0% to 60.0% | (47.0)% | ||||||||||
Liquidation expenses | 10.0% to 10.0% | (10.0)% | ||||||||||||||
Impaired loans | $ | 92 | Appraisal of collateral | Appraisal adjustments | 50.0% to 50.0% | (50.0)% | ||||||||||
Liquidation expenses | 0.0% to 0.0% | (0.0)% |
Quantitative Information about Level 3 Fair Value Measurements | ||||||||||||||||
December 31, 2019 | Fair Value Estimate | Valuation Techniques | Unobservable Input | Range (Weighted Average) | ||||||||||||
Other real estate owned | $ | 82 | Appraisal of collateral | Appraisal adjustments | 42.0% to 60.0% | (52.0)% | ||||||||||
Liquidation expenses | 10.0% to 10.0% | (10.0)% | ||||||||||||||
Impaired loans | $ | 973 | Appraisal of collateral | Appraisal adjustments | 10.0% to 50.0% | (22.0)% | ||||||||||
Liquidation expenses | 9.5% to 12.3% | (8.8)% |
Fair Value Hierarchy | ||||||||||||||||||||
September 30, 2017 | Carrying Amount | Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||||
Financial assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 8,425 | $ | 8,425 | $ | 8,425 | ||||||||||||||
Investment securities | 56,874 | 56,874 | $ | 56,874 | ||||||||||||||||
Loans held for sale | 519 | 519 | 519 | |||||||||||||||||
Net loans | 554,783 | 553,818 | $ | 553,818 | ||||||||||||||||
Accrued interest receivable | 1,995 | 1,995 | 1,995 | |||||||||||||||||
Restricted equity securities | 2,186 | 2,186 | 2,186 | |||||||||||||||||
Financial liabilities: | ||||||||||||||||||||
Deposits | $ | 574,950 | $ | 562,256 | $ | 562,256 | ||||||||||||||
Short-term borrowings | 37,250 | 37,250 | 37,250 | |||||||||||||||||
Long-term debt | 6,503 | 6,503 | 6,503 | |||||||||||||||||
Accrued interest payable | 213 | 213 | 213 | |||||||||||||||||
Fair Value Hierarchy | ||||||||||||||||||||
December 31, 2016 | Carrying Amount | Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||||
Financial assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 19,120 | $ | 19,120 | $ | 19,120 | ||||||||||||||
Investment securitiesavailable-for-sale | 73,113 | 73,113 | 188 | $ | 72,925 | |||||||||||||||
Loans held for sale | 652 | 652 | 652 | |||||||||||||||||
Net loans | 405,611 | 407,561 | $ | 407,561 | ||||||||||||||||
Accrued interest receivable | 1,726 | 1,726 | 1,726 | |||||||||||||||||
Restricted equity securities | 1,845 | 1,845 | 1,845 | |||||||||||||||||
Financial liabilities: | ||||||||||||||||||||
Deposits | $ | 452,560 | $ | 438,744 | $ | 438,744 | ||||||||||||||
Short-term borrowings | 31,500 | 31,500 | 31,500 | |||||||||||||||||
Long-term debt | 11,154 | 11,148 | 11,148 | |||||||||||||||||
Accrued interest payable | 192 | 192 | 192 |
Fair Value Hierarchy | ||||||||||||||||||||
June 30, 2020 | Carrying Amount | Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||||
Financial assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 43,228 | $ | 43,228 | $ | 43,228 | ||||||||||||||
Investment securities | 74,134 | 74,134 | $ | 74,134 | ||||||||||||||||
Loans held for sale | 4,252 | 4,252 | 4,252 | |||||||||||||||||
Net loans (1) | 1,155,717 | 1,146,533 | $ | 1,146,533 | ||||||||||||||||
Accrued interest receivable | 1,826 | 1,826 | 356 | 1,470 | ||||||||||||||||
Financial liabilities: | ||||||||||||||||||||
Deposits | $ | 1,023,153 | $ | 980,672 | ||||||||||||||||
Long-term debt | 217,010 | 216,810 | ||||||||||||||||||
Accrued interest payable | 457 | 457 | 457 |
Fair Value Hierarchy | ||||||||||||||||||||
December 31, 2019 | Carrying Amount | Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||||
Financial assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 50,348 | $ | 50,348 | $ | 50,348 | ||||||||||||||
Investment securities available-for-sale | 91,247 | 91,247 | $ | 91,247 | ||||||||||||||||
Loans held for sale | 81 | 81 | 81 | |||||||||||||||||
Net loans (1) | 844,593 | 836,074 | $ | 836,074 | ||||||||||||||||
Accrued interest receivable | 2,414 | 2,414 | 461 | 1,953 | ||||||||||||||||
Financial liabilities: | ||||||||||||||||||||
Deposits | $ | 940,480 | $ | 940,546 | $ | 940,546 | ||||||||||||||
Long-term debt | 6,971 | 6,971 | 6,971 | |||||||||||||||||
Accrued interest payable | 435 | 435 | 435 |
1) | The carrying amount is net of unearned income and the allowance for loan losses in accordance with the adoption of ASU No. 2016-01 where the fair value of loans as of June 30, 2020 and December 31, 2019 was measured using an exit price notion |
Balance, January 1, 2020 | $ | 24,754 | ||
Less: Goodwill impairment | 24,754 | |||
Balance, June 30, 2020 | $ | |||
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
2019.
Most recently, the risk factors associated with the onset of
16
The United States economy grew at a stronger pace in the third quarter of 2017 compared to the same period last year but declined slightly from the second quarter of 2017. The
indefinite period.
2019.
2019. The onset of
2019.
2019. The Asset/Liability Committee (“ALCO”) reviewsincrease in the performance and risk elementsunrealized holding gain was the result of the investment portfolio quarterly. Through active balance sheet management and analysis of the securities portfolio, we endeavor to maintain sufficient liquidity to satisfy depositor requirements and meet the credit needs of our customers.
reductions in general market rates.
Loan growth increased significantly in 2017.
December 31, 2019. Construction lending increased $17,468, or 28.3%, to $79,299 at June 30, 2020 from $61,831 at December 31, 2019. The increase in the loan portfolio was attributable to the origination of $274,313 in PPP loans along with net loan growth of $39,031 generated primarily from new markets.
For the ninesix months ended SeptemberJune 30, 2017,2020, loans net averaged $478,033,$975,152, an increase of $75,155, or 18.7%$87,721 compared to $402,878$887,431 for the same period of 2016.in 2019. The4.35%4.33% for the ninesix months ended SeptemberJune 30, 2017, a 21 basis 2020, antax-equivalent decrease in loan yield was caused by declines in general market rates, reductions in loan accretion and lower yield on originated PPP loans. Concerns about the spread of the disease and its anticipated negative impact on economic activity, severely disrupted domestic financial markets prompting the Federal Open Market Committee of the Federal Reserve Board to aggressively cut the target Federal Funds rate by
June 30, 2020 | ||||||||
Industry: | Amount | % of Total Loans | ||||||
Mining, Quarry, Oil and Gas | $ | 1,620 | 0.14 | % | ||||
Construction-Land Subdivision | 22,336 | 1.92 | % | |||||
Manufacturing | 13,598 | 1.17 | % | |||||
Wholesale Trade | 4,832 | 0.41 | % | |||||
Automobile Dealers | 7,116 | 0.61 | % | |||||
Non-Residential Rentals and Leasing | 261,321 | 22.42 | % | |||||
Residential Rental and Leasing | 112,053 | 9.61 | % | |||||
Health Care | 14,699 | 1.26 | % | |||||
Arts, Entertainment and Recreation | 5,457 | 0.47 | % | |||||
Hospitality | 65,754 | 5.64 | % | |||||
Restaurants | 8,753 | 0.75 | % | |||||
$ | 517,539 | 44.41 | % | |||||
PPP funding. We continue to actively participate in the PPP and as of June 30, 2020 we originated 1,273 loans totaling $274,313. On April 9, 2020, the FDIC, Federal Reserve and OCC created the PPPLF to bolster the effectiveness of the PPP by providing liquidity to and neutralizing the regulatory capital effects on participating financial institutions. We have utilized the liquidity relief offered by the PPPLF to the extent needed and as a result, do not expect our participation in the PPP to have a negative impact on our liquidity position, capital resources, financial condition or results of operations. Offsetting the positive influence offered by the PPP is the fact that most states, including the Commonwealth of Pennsylvania, have placed significant restrictions on
Off-balance sheet commitments at September 30, 2017, totaled $86,876, consisting With the onset of $48,695 in commitments to extend credit, $34,521 inthe
2019 are summarized as follows:
June 30, 2020 | December 31, 2019 | |||||||
Unused portions of lines of credit | $ | 89,916 | $ | 81,665 | ||||
Construction loans | 28,764 | 41,168 | ||||||
Commitments to extend credit | 20,841 | 24,954 | ||||||
Deposit overdraft protection | 23,964 | 23,730 | ||||||
Standby and performance letters of credit | 4,743 | 4,726 | ||||||
Total | $ | 168,228 | $ | 176,243 | ||||
September 30, 2017 | September 30, 2016 | |||
United States | 4.2% | 4.9% | ||
Pennsylvania (statewide) | 4.8% | 5.5% | ||
Berks County | 4.8% | 5.0% | ||
Dauphin County | 4.7% | 4.8% | ||
Lebanon | 4.4% | 4.4% | ||
Lycoming | 5.5% | 6.3% | ||
Northumberland County | 5.3% | 5.9% | ||
Perry County | 4.4% | 4.6% | ||
Schuylkill County | 5.9% | 6.1% | ||
Somerset County | 5.8% | 6.3% |
2020 | 2019 | |||||||
United States | 11.1 | % | 3.7 | % | ||||
Pennsylvania | 13.1 | % | 4.0 | % | ||||
Berks County | 13.1 | % | 4.4 | % | ||||
Blair County | 11.8 | % | 4.7 | % | ||||
Bucks County | 12.7 | % | 3.7 | % | ||||
Centre County | 8.4 | % | 3.6 | % | ||||
Clearfield County | 11.6 | % | 4.9 | % | ||||
Cumberland County | 9.9 | % | 3.6 | % | ||||
Dauphin County | 13.3 | % | 4.2 | % | ||||
Huntingdon County | 13.9 | % | 5.1 | % | ||||
Lebanon County | 11.8 | % | 4.0 | % | ||||
Lehigh County | 14.3 | % | 4.4 | % | ||||
Lycoming County | 12.2 | % | 4.6 | % | ||||
Perry County | 9.6 | % | 3.8 | % | ||||
Schuylkill County | 12.9 | % | 5.4 | % | ||||
Somerset County | 12.4 | % | 5.0 | % |
2019.
2020.
Generally, maintaining a high loanrequest from the borrower, modifications were made to deposit ratio is our primary goal in orderdefer all payments for loans requiring principal and interest payments, or to maximize profitability. However, this objective is superseded by our attempts to ensure that asset quality remains strong. Wedefer principal payments only and continue to focus our efforts on maintaining sound underwriting standardscollect interest payments, or to defer all interest payments for both commercial and consumer credit.
loans requiring interest only payments. The following table summarizes information concerning loan modifications made as of June 30, 2020, by loan classification:
Weighted Average Loan to Value | Aggregate Deferred Payments | |||||||||||||||||||||||||||
Number of Loans | Amount | % of Outstanding | % of Total Loan Classification | % of Loans Modified | Principal | Interest | ||||||||||||||||||||||
Commercial | 110 | $ | 25,858 | 6.79 | % | $ | 905 | $ | 382 | |||||||||||||||||||
Construction: | ||||||||||||||||||||||||||||
Commercial | 11 | 10,635 | 20.13 | % | 71.86 | % | 73.10 | % | 528 | 127 | ||||||||||||||||||
Hospitality | 4 | 18,851 | 71.19 | % | 66.47 | % | 69.01 | % | 55 | 299 | ||||||||||||||||||
Total | 15 | 29,486 | 37.18 | % | 583 | 426 | ||||||||||||||||||||||
Commercial Real Estate: | ||||||||||||||||||||||||||||
Multi Family | 25 | 15,656 | 26.42 | % | 66.46 | % | 75.49 | % | 146 | 149 | ||||||||||||||||||
Owner Occupied | 92 | 41,784 | 33.46 | % | 63.00 | % | 63.37 | % | 832 | 436 | ||||||||||||||||||
Non-Owner Occupied | 53 | 76,439 | 31.46 | % | 62.53 | % | 64.69 | % | 2,228 | 710 | ||||||||||||||||||
Hospitality | 9 | 24,688 | 67.40 | % | 64.81 | % | 59.57 | % | 424 | 443 | ||||||||||||||||||
Agricultural | 21 | 12,156 | 39.31 | % | 53.99 | % | 60.39 | % | 243 | 284 | ||||||||||||||||||
Total | 200 | 170,723 | 34.51 | % | 3,873 | 2,022 | ||||||||||||||||||||||
Residential Real Estate | 161 | 30,043 | 14.74 | % | 445 | 452 | ||||||||||||||||||||||
Consumer | 15 | 312 | 4.61 | % | 11 | 8 | ||||||||||||||||||||||
Total | 501 | $ | 256,422 | 22.00 | % | $ | 5,817 | $ | 3,290 | |||||||||||||||||||
Loans Modified with Expired Deferrals | ||||||||||||||||||||||||
Returning to Repayment | Approved for Additional Deferral | Aggregate Deferred Payments for Loans Approved for Additional Deferral | ||||||||||||||||||||||
Number of Loans | Amount | Number of Loans | Amount | Principal | Interest | |||||||||||||||||||
Commercial | 63 | $ | 10,643 | 8 | $ | 1,352 | $ | 88 | $ | 26 | ||||||||||||||
Construction: | ||||||||||||||||||||||||
Commercial | 5 | 5,550 | ||||||||||||||||||||||
Hospitality | 1 | 5,912 | 1 | 4,947 | 97 | |||||||||||||||||||
Total | 6 | 11,462 | 1 | 4,947 | 97 | |||||||||||||||||||
Commercial Real Estate: | ||||||||||||||||||||||||
Multi Family | 13 | 5,763 | ||||||||||||||||||||||
Owner Occupied | 58 | 26,441 | 4 | 3,458 | 108 | 73 | ||||||||||||||||||
Non-Owner Occupied | 41 | 87,234 | 1 | 1,278 | 26 | 25 | ||||||||||||||||||
Hospitality | 4 | 10,504 | 2 | 8,381 | 252 | 158 | ||||||||||||||||||
Agricultural | 3 | 1,891 | 1 | 100 | 3 | 2 | ||||||||||||||||||
Total | 119 | 131,833 | 8 | 13,217 | 389 | 258 | ||||||||||||||||||
Residential Real Estate | 44 | 9,410 | 1 | 513 | 14 | 8 | ||||||||||||||||||
Consumer | ||||||||||||||||||||||||
Total | 232 | $ | 163,348 | 18 | $ | 20,029 | $ | 491 | $ | 389 | ||||||||||||||
in 2019. The increase in net charge-offs was primarily due to charge off of one large unsecured commercial loan in the amount of $899 and two related commercial real estate loans in the amount of $501, that were charged off due to deterioration in their financial conditions.
For the nine months ended SeptemberJune 30, interest-bearing deposits averaged $440,638$816,298 in 20172020 compared to $391,990$832,327 in 2016.2019. The cost of interest-bearing deposits was 0.61%0.78% in 20172020 compared to 0.47%1.01% in 2016. For the nine months ended September 30, the overall cost of interest-bearing liabilities including the cost of borrowed funds, was 0.69% in 2017 compared to 0.53% in 2016. The cost of interest-bearing liabilities increased seven basis points when comparing the third quarter of 2017 with the second quarter of 2017.
Corresponding2019. Consistent with recent FOMC actions interestto lower short-term rates have increased from historic lows that existed for an extended period. Alldue to the onset of
accumulated funds.
reduce our exposure to the effects of repricing assets.
remains low.
2020.
$822.
Actual | Minimum Regulatory Capital Ratios under Basel III (with 2.5% capital conservation buffer phase-in) | Well Capitalized under Basel III | ||||||||||||||||||||||
June 30, 2020: | Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||||||||
Total risk-based capital (to risk-weighted assets) | $ | 106,468 | 12.2 | % | $ | 91,857 | ³ | 10.5 | % | $ | 87,483 | ³ | 10.0 | % | ||||||||||
Tier 1 capital (to risk-weighted assets) | 96,637 | 11.1 | 74,361 | ³ | 8.5 | 69,987 | ³ | 8.0 | ||||||||||||||||
Common equity tier 1 risk-based capital (to risk-weighted assets) | 96,637 | 11.1 | 61,238 | ³ | 7.0 | 56,864 | ³ | 6.5 | ||||||||||||||||
Tier 1 capital (to average total assets) | 96,637 | 8.1 | 47,727 | ³ | 4.0 | 59,659 | ³ | 5.0 |
Actual | Minimum Regulatory Capital Ratios under Basel III (with 2.5% capital conservation buffer phase-in) | Well Capitalized under Basel III | ||||||||||||||||||||||
December 31, 2019: | Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||||||||
Total risk-based capital (to risk-weighted assets) | $ | 104,010 | 12.4 | % | $ | 88,132 | ³ | 10.5 | % | $ | 83,936 | ³ | 10.0 | % | ||||||||||
Tier 1 capital (to risk-weighted assets) | 96,405 | 11.5 | 71,345 | ³ | 8.5 | 67,148 | ³ | 8.0 | ||||||||||||||||
Common equity tier 1 risk-based capital (to risk-weighted assets) | 96,405 | 11.5 | 58,755 | ³ | 7.0 | 54,558 | ³ | 6.5 | ||||||||||||||||
Tier 1 capital (to average total assets) | 96,405 | 9.1 | 42,489 | ³ | 4.0 | 53,112 | ³ | 5.0 |
well capitalized status.
The Company
$454.
bearinginterest-bearing liabilities.34.0%21% in 20172020 and 2016.
2019, respectively.
For the three months ended September 30,tax-equivalent2020. The addition of PPP
2019.
For the nine months ended September 30,tax-equivalent net interest incomelast year. Average long-term debt increased $1,045 to $15,004 in 2017 from $13,959 in 2016. A favorable volume variance of $2,500 from average earning asset growth exceeding average growth in interest bearing liabilities more than offset an unfavorable rate variance of $1,455 from a decline in the net interest margin. The net interest spread decreased 30 basis points$112,875 for the nine months ended September 30, 2017 to 3.47%second quarter of 2020 from 3.77% for the nine months ended September 30, 2016. Thetax-equivalent net interest margin for the nine months ended September 30 was 3.58% in 2017 compared to 3.85% in 2016.
For the nine months ended September 30, 2017,tax-equivalent interest income increased $1,843 to $17,450 as compared to $15,607 for the nine months ended September 30, 2016. A positive volume variance in interest income of $2,673 attributable to changes in the average balance of earning assets was offset by a negative rate variance of $830 due to a reduction in the yield on earning assets. Average volumes of earning assets increased $76,137 comparing the nine months ended September 30, 2017 and 2016. Thetax-equivalent yield on earning assets decreased 14 basis points in 2017 compared to 2016.
Total interest expense increased $798 to $2,446 for the nine months ended September 30, 2017 from $1,648 for the nine months ended September 30, 2016. A change in the volume of average interest bearing liabilities caused interest expense to increase $173. The average volume of interest bearing liabilities increased to $472,805 for the nine months ended September 30, 2017, as compared to $416,363 for the nine months ended September 30, 2016. In addition, we recognized an unfavorable rate variance of $625 from a 16 basis point increase in the overall cost of funds. Cost of funds increased to 0.69% for the nine months ended September 30, 2017 as compared to 0.53%$6,922 for the same period in 2016.
last year to provide funding for PPP loans.
Six months ended | ||||||||||||||||||||||||
June 30, 2020 | June 30, 2019 | |||||||||||||||||||||||
Average Balance | Interest | Yield/ Rate | Average Balance | Interest | Yield/ Rate | |||||||||||||||||||
Assets: | ||||||||||||||||||||||||
Earning assets: | ||||||||||||||||||||||||
Loans | ||||||||||||||||||||||||
Taxable | $ | 939,993 | $ | 20,384 | 4.36 | % | $ | 852,427 | $ | 22,368 | 5.29 | % | ||||||||||||
Tax exempt | 35,159 | 609 | 3.48 | % | 35,004 | 586 | 3.38 | % | ||||||||||||||||
Investments | ||||||||||||||||||||||||
Taxable | 67,815 | 931 | 2.76 | % | 96,305 | 1,472 | 3.08 | % | ||||||||||||||||
Tax exempt | 6,535 | 133 | 4.09 | % | 8,874 | 147 | 3.34 | % | ||||||||||||||||
Interest bearing deposits | 39,332 | 101 | 0.52 | % | 36,866 | 447 | 2.45 | % | ||||||||||||||||
Federal funds sold | ||||||||||||||||||||||||
Total earning assets | 1,088,834 | 22,158 | 4.09 | % | 1,029,476 | 25,020 | 4.90 | % | ||||||||||||||||
Less: allowance for loan losses | 7,754 | 6,457 | ||||||||||||||||||||||
Other assets | 108,006 | 105,239 | ||||||||||||||||||||||
Total assets | 1,189,086 | $ | 1,128,258 | |||||||||||||||||||||
Liabilities and Stockholders’ Equity: | ||||||||||||||||||||||||
Interest bearing liabilities: | ||||||||||||||||||||||||
Money market accounts | $ | 109,502 | $ | 234 | 0.43 | % | $ | 113,159 | $ | 566 | 1.01 | % | ||||||||||||
NOW accounts | 281,703 | 460 | 0.33 | % | 276,036 | 978 | 0.71 | % | ||||||||||||||||
Savings accounts | 138,501 | 88 | 0.13 | % | 131,797 | 66 | 0.10 | % | ||||||||||||||||
Time deposits | 286,592 | 2,402 | 1.69 | % | 311,335 | 2,562 | 1.66 | % | ||||||||||||||||
Short term borrowings | 14,703 | 28 | 0.38 | % | ||||||||||||||||||||
Long-term debt | 67,346 | 348 | 1.04 | % | 6,912 | 265 | 7.73 | % | ||||||||||||||||
Total interest-bearing liabilities | 898,347 | 3,560 | 0.80 | % | 839,239 | 4,437 | 1.07 | % | ||||||||||||||||
Non-interest-bearing demand deposits | 158,065 | 157,908 | ||||||||||||||||||||||
Other liabilities | 13,365 | 16,975 | ||||||||||||||||||||||
Stockholders’ equity | 119,309 | 114,136 | ||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 1,189,086 | $ | 1,128,258 | ||||||||||||||||||||
Net interest income/spread | $ | 18,598 | 3.29 | % | $ | 20,583 | 3.83 | % | ||||||||||||||||
Net interest margin | 3.43 | % | 4.03 | % | ||||||||||||||||||||
Tax-equivalent adjustments: | ||||||||||||||||||||||||
Loans | $ | 128 | $ | 123 | ||||||||||||||||||||
Investments | 28 | 31 | ||||||||||||||||||||||
Total adjustments | $ | 156 | $ | 154 | ||||||||||||||||||||
2020.
Noninterest Income:
Noninterest income forgrowth, increases in historical loss factors and changes in qualitative factors related to the third quarter decreased $188, or 18.4%, to $835 in 2017 from $1,023 in 2016. The primary causereserve build associated with the effects of
2020. Mortgage banking income increased $293 for the six months ended June 30, 2020 as compared to the same period in 2019 as borrowers took advantage of low interest rates. Trust and wealth management income declined for the first six months of 2020 by $118 and $67 compared to the first six months of 2019 due primarily to a marked slowdown in activities brought on by the impact of
income of $291.
Noninterest expense increased $2,678,last year. Higher costs related to building and equipment maintenance and repairs caused the increase. Other expenses decreased $757, or 21.1%11.6%, to $15,371 for$5,795 in the ninefirst six months ended September 30, 2017, from $12,693of 2020 compared to $6,552 for the same period last year. The majority of the increase in salaries and employee benefit expense wasdecrease is a result of implementing cost savings initiatives in the lending team lift out initiative and related costs, as well as staffing two full service offices in Berks and Lycoming Counties, respectively. Additions to leased facilities for this newly opened community banking office along with offices to support the lending teams were primarily responsible for the $278, or 17.2% increase in occupancy and equipment costs. The majoritylatter part of the increase in other expenses comparing the nine months ended September 30, 2017 and 2016 was a result of incurring merger related expenses related to the business combination with CBT Financial Corp.
Income Taxes:
We recorded income tax expense of $69 for2019.
Item 3. | Quantitative and Qualitative Disclosures about Market Risk |
Item 4. | Controls and Procedures. |
Item 1. | Legal Proceedings |
Item 1A. | Risk Factors |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
Item 3. | Defaults upon Senior Securities |
Item 4. | Mine Safety Disclosures |
Item 5. | Other Information |
None.
ContentsItem 3. Defaults upon Senior Securities
Not applicable.
Item 4. Mine Safety Disclosures
Not applicable.
Not applicable.
Item 6. | Exhibits. |
By: | /s/ | |||
President and Chief Executive Officer | ||||
(Principal Executive Officer) | ||||
Date: |
By: | /s/ Scott A. Seasock | |||
Scott A. Seasock | ||||
Chief Financial Officer | ||||
(Principal Financial Officer) | ||||
Date: |
37