Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | May 03, 2019 | |
Entity Registrant Name | BROADWAY FINANCIAL CORP \DE\ | |
Entity Central Index Key | 0001001171 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Common Stock, Voting | ||
Entity Common Stock, Shares Outstanding | 19,123,455 | |
Common Stock, Non-Voting | ||
Entity Common Stock, Shares Outstanding | 8,756,396 |
Consolidated Statements of Fina
Consolidated Statements of Financial Condition - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Assets: | ||
Cash and due from banks | $ 3,115 | $ 4,124 |
Interest-bearing deposits in other banks | 16,110 | 12,527 |
Cash and cash equivalents | 19,225 | 16,651 |
Securities available-for-sale, at fair value | 14,517 | 14,722 |
Loans receivable held for sale, at lower of cost or fair value | 5,154 | 6,231 |
Loans receivable held for investment, net of allowance of $2,929 and $2,929 | 365,015 | 355,556 |
Accrued interest receivable | 1,206 | 1,143 |
Federal Home Loan Bank (FHLB) stock | 2,916 | 2,916 |
Office properties and equipment, net | 3,328 | 2,242 |
Bank owned life insurance | 3,060 | 3,047 |
Deferred tax assets, net | 4,889 | 5,045 |
Investment in affordable housing limited partnership | 293 | 342 |
Real estate owned (REO) | 820 | 833 |
Other assets | 723 | 669 |
Total assets | 421,146 | 409,397 |
Liabilities: | ||
Deposits | 286,654 | 281,414 |
FHLB advances | 75,000 | 70,000 |
Junior subordinated debentures | 5,100 | 5,100 |
Advance payments by borrowers for taxes and insurance | 563 | 1,055 |
Accrued expenses and other liabilities | 4,878 | 3,392 |
Total liabilities | 372,195 | 360,961 |
Stockholders' Equity: | ||
Preferred stock, $.01 par value, authorized 1,000,000 shares; none issued or outstanding | ||
Additional paid-in capital | 46,219 | 46,141 |
Retained earnings | 8,908 | 8,631 |
Unearned Employee Stock Ownership Plan (ESOP) shares | (1,010) | (1,027) |
Accumulated other comprehensive loss | (145) | (283) |
Treasury stock-at cost, 2,617,826 shares at March 31, 2019 and at December 31, 2018 | (5,326) | (5,326) |
Total stockholders' equity | 48,951 | 48,436 |
Total liabilities and stockholders' equity | 421,146 | 409,397 |
Common Stock | Common Stock, Voting | ||
Stockholders' Equity: | ||
Common stock | 218 | 213 |
Total stockholders' equity | 218 | 213 |
Common Stock | Common Stock, Non-Voting | ||
Stockholders' Equity: | ||
Common stock | 87 | 87 |
Total stockholders' equity | $ 87 | $ 87 |
Consolidated Statements of Fi_2
Consolidated Statements of Financial Condition (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Allowance for loan losses (in dollars) | $ 2,929 | $ 2,929 |
Stockholders' Equity: | ||
Treasury stock, shares | 2,617,826 | 2,617,826 |
Preferred stock | ||
Stockholders' Equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common Stock | Common Stock, Voting | ||
Stockholders' Equity: | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 21,741,281 | 21,280,228 |
Common stock, shares outstanding | 19,123,455 | 18,662,402 |
Common Stock | Common Stock, Non-Voting | ||
Stockholders' Equity: | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 25,000,000 | 25,000,000 |
Common stock, shares issued | 8,756,396 | 8,756,396 |
Common stock, shares outstanding | 8,756,396 | 8,756,396 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Interest income: | ||
Interest and fees on loans receivable | $ 4,115 | $ 3,509 |
Interest on mortgage-backed and other securities | 98 | 109 |
Other interest income | 160 | 140 |
Total interest income | 4,373 | 3,758 |
Interest expense: | ||
Interest on deposits | 1,027 | 631 |
Interest on borrowings | 533 | 353 |
Total interest expense | 1,560 | 984 |
Net interest income | 2,813 | 2,774 |
Loan loss provision recapture | 190 | |
Net interest income after loan loss provision recapture | 3,003 | 2,774 |
Non-interest income: | ||
Service charges | 122 | 115 |
CDFI grant | 233 | |
Other | 21 | 16 |
Total non-interest income | 376 | 131 |
Non-interest expense: | ||
Compensation and benefits | 1,882 | 1,905 |
Occupancy expense | 308 | 316 |
Information services | 208 | 214 |
Professional services | 339 | 188 |
Office services and supplies | 68 | 82 |
REO expense | 31 | 62 |
Marketing expense | 39 | 50 |
Corporate insurance | 35 | 42 |
Amortization of investment in affordable housing limited partnership | 49 | 48 |
Other | 101 | 125 |
Total non-interest expense | 3,060 | 3,032 |
Income (loss) before income taxes | 319 | (127) |
Income tax expense (benefit) | 42 | (43) |
Net income (loss) | 277 | (84) |
Other comprehensive income (loss), net of tax: | ||
Unrealized gains (losses) on securities available-for-sale arising during the period | 196 | (283) |
Income tax expense (benefit) | 58 | (83) |
Other comprehensive income (loss), net of tax | 138 | (200) |
Comprehensive income (loss) | $ 415 | $ (284) |
Earnings (loss) per common share-basic (in dollars per share) | $ 0.01 | $ 0 |
Earnings (loss) per common share-diluted (in dollars per share) | $ 0.01 | $ 0 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Cash flows from operating activities: | |||
Net income (loss) | $ 277 | $ (84) | |
Adjustments to reconcile net income (loss)to net cash used in operating activities: | |||
Loan loss provision recapture | (190) | ||
Provision for losses on REOs | 13 | 45 | |
Depreciation | 59 | 62 | |
Reversal of valuation allowance on loan held for sale | (12) | ||
Net amortization of deferred loan origination costs | 61 | 152 | |
Net amortization of premiums on mortgage-backed securities | 6 | 10 | |
Amortization of investment in affordable housing limited partnership | 49 | 48 | |
ESOP compensation expense | 14 | 25 | |
Earnings on bank owned life insurance | (13) | (13) | |
Repayments on loans receivable held for sale | 24 | 71 | $ 71 |
Change in assets and liabilities: | |||
Net change in deferred taxes | 98 | 68 | |
Net change in accrued interest receivable | (63) | (88) | |
Net change in other assets | (54) | (169) | |
Net change in advance payments by borrowers for taxes and insurance | (492) | (477) | |
Net change in accrued expenses and other liabilities | 366 | (483) | |
Net cash provided by (used in) operating activities | 229 | (752) | |
Cash flows from investing activities: | |||
Net change in loans receivable held for investment | (8,265) | 5,352 | |
Principal payments on available-for-sale securities | 395 | 507 | |
Purchase of office properties and equipment | (25) | (11) | |
Net cash (used in) provided by investing activities | (7,895) | 5,848 | |
Cash flows from financing activities: | |||
Net change in deposits | 5,240 | (10,960) | |
Proceeds from FHLB advances | 10,000 | ||
Repayments of FHLB advances | (5,000) | ||
Payment for tax withholding for vesting of restricted stock | (108) | ||
Net cash provided by (used in) financing activities | 10,240 | (11,068) | |
Net change in cash and cash equivalents | 2,574 | (5,972) | |
Cash and cash equivalents at beginning of the period | 16,651 | 22,219 | 22,219 |
Cash and cash equivalents at end of the period | 19,225 | 16,247 | $ 16,651 |
Supplemental disclosures of cash flow information: | |||
Cash paid for interest | 1,375 | 930 | |
Supplemental disclosures of non-cash investing and financing: | |||
Transfers of loans receivable held for sale to loans receivable held for investment | 1,064 | 16,871 | |
Stock cancelled for payment of tax withholding | 14 | 108 | |
Initial Recognition of Operating Lease Right-to-Use Assets | 1,120 | ||
Initial Recognition of Operating Lease Liabilities | 1,120 | ||
Directors | Common Stock | |||
Adjustments to reconcile net income (loss)to net cash used in operating activities: | |||
Stock-based compensation expense | 52 | 45 | |
Employees, excluding Directors | |||
Adjustments to reconcile net income (loss)to net cash used in operating activities: | |||
Stock-based compensation expense | $ 34 | $ 36 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands | Common StockCommon Stock, Voting | Common StockCommon Stock, Non-Voting | Additional Paid-in Capital | Accumulated Other Comprehensive Income | Retained Earnings (Substantially Restricted) | Unearned ESOP shares | Treasury Stock | Total |
Balance at Dec. 31, 2017 | $ 213 | $ 87 | $ 46,117 | $ (81) | $ 7,816 | $ (1,095) | $ (5,326) | $ 47,731 |
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income for the period | (84) | (84) | ||||||
Release of unearned ESOP shares | 8 | 17 | 25 | |||||
Restricted stock compensation expense | 26 | 26 | ||||||
Stock awarded to directors | 45 | 45 | ||||||
Stock option compensation expense | 10 | 10 | ||||||
Cancellation of shares issued to CEO | (108) | (108) | ||||||
Other comprehensive income (loss), net of tax | (200) | (200) | ||||||
Balance at Mar. 31, 2018 | 213 | 87 | 46,098 | (281) | 7,732 | (1,078) | (5,326) | 47,445 |
Balance at Dec. 31, 2018 | 213 | 87 | 46,141 | (283) | 8,631 | (1,027) | (5,326) | 48,436 |
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income for the period | 277 | 277 | ||||||
Release of unearned ESOP shares | (3) | 17 | 14 | |||||
Restricted stock compensation expense | 5 | 20 | 25 | |||||
Stock awarded to directors | 52 | 52 | ||||||
Stock option compensation expense | 9 | 9 | ||||||
Other comprehensive income (loss), net of tax | 138 | 138 | ||||||
Balance at Mar. 31, 2019 | $ 218 | $ 87 | $ 46,219 | $ (145) | $ 8,908 | $ (1,010) | $ (5,326) | $ 48,951 |
Basis of Financial Statement Pr
Basis of Financial Statement Presentation | 3 Months Ended |
Mar. 31, 2019 | |
Basis of Financial Statement Presentation | |
Basis of Financial Statement Presentation | NOTE (1) – Basis of Financial Statement Presentation The accompanying unaudited consolidated financial statements include Broadway Financial Corporation (the “Company”) and its wholly owned subsidiary, Broadway Federal Bank, f.s.b. (the “Bank”). Also included in the unaudited consolidated financial statements is Broadway Service Corporation, a wholly owned subsidiary of the Bank. All significant intercompany balances and transactions have been eliminated in consolidation. The unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions for quarterly reports on Form 10-Q. These unaudited consolidated financial statements do not include all disclosures associated with the Company's consolidated annual financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2018 and, accordingly, should be read in conjunction with such audited consolidated financial statements. In the opinion of management, all adjustments (all of which are normal and recurring in nature) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019. Recently Adopted Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)”, which is intended to increase transparency and comparability in the accounting for lease transactions. ASU 2016-02 became effective as of January 1, 2019 and provides for a modified retrospective transition approach requiring lessees to recognize and measure leases on the balance sheet at the either the earliest period presented or as of the beginning of the period of adoption with the option to elect certain practical expedients. We have elected to apply ASU 2016-02 as of the beginning of the period of adoption, which as January 1, 2019 and we have elected not to restate comparative periods. Of the practical expedients available under ASU 206-02, all have been adopted except for the hindsight practical expedient. The Bank has a combined operating lease for its corporate headquarters and main retail branch and a photocopier lease. As a result of implementing ASU 2016-02, we recognized an operating lease right-of-use (“ROU”) asset of $1.2 million and an operating lease liability of $1.2 million as of January 1, 2019, with no impact on our consolidated statements of operations or consolidated statements of cash flows compared to the prior lease accounting model. The ROU asset and operating lease liability are recorded in fixed assets and other liabilities, respectively, in the consolidated statements of financial condition. See Note 6 – Leases for additional information. The implementation of this standard had a minor impact on our regulatory capital ratios. In January 2016, the FASB issued ASU 2016-01, “Financial Instruments – Overall (Subtopic 825-10) - Recognition and Measurement of Financial Assets and Financial Liabilities”. ASU 2016-01 (i) amends existing guidance that requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. It requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes. It requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (i.e., securities or loans and receivables). It eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost. These amendments are effective for public business entities for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Adoption of this standard did not have a material impact on the Company’s consolidated financial statements. In accordance with this standard, the Company measured the fair value of its financial assets and financial liabilities as of December 31, 2018 using an exit price notion (see Note 5 Fair Value). In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments”. ASU 2016-15 provides guidance on the classification of certain cash receipts and payments on the consolidated statement of cash flows in order to reduce diversity in practice. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Adoption of this standard did not have a material impact on the Company’s consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash”. ASU 2016-18 requires entities to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. As a result, entities will no longer present transfers between cash and cash equivalents and restricted cash and restricted cash equivalents in the consolidated statement of cash flows. ASU 2016-18 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, where the guidance should be applied using a retrospective transition method to each period presented. Early adoption is permitted. Adoption of this standard did not have a material impact on the Company’s consolidated financial statements. In February 2018, the FASB issued Accounting Standards Update (“ASU”) 2018-02, “Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (Topic 220)”, which allows an entity to elect a reclassification from accumulated other comprehensive income (AOCI) to retained earnings for the stranded tax effects resulting from the Tax Cuts and Jobs Act. The amount of that reclassification should include the effect of changes of tax rate on the deferred tax amount, any related valuation allowance and other income tax effects on the items in AOCI. The standard requires an entity to state if an election to reclassify the tax effect to retained earnings is made along with the description of other income tax effects that are reclassified from AOCI. The guidance is effective for public business entities for annual periods beginning on or after December 15, 2018 and interim periods within those annual periods with early adoption permitted. The Company early adopted this amendment and has elected to reclassify $66 thousand from AOCI to retained earnings at December 31, 2017. Recent Accounting Pronouncements Yet to Be Adopted In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”. ASU 2016-13 replaces the incurred loss model with an expected loss model, which is referred to as the current expected credit loss (CECL) model. The CECL model is applicable to the measurement of credit losses on financial assets measured at amortized cost, including loan receivables, held-to-maturity debt securities, and reinsurance receivables. It also applies to off-balance sheet credit exposures not accounted for as insurance (such as loan commitments, standby letters of credit, financial guarantees, and other similar instruments) and net investments in leases recognized by a lessor. For public business entities that meet the definition of an SEC filer, the standard will be effective for fiscal years beginning after Dec. 15, 2019, including interim periods in those fiscal years. All entities may early adopt for fiscal years beginning after Dec. 15, 2018, including interim periods in those fiscal years. For debt securities with other-than-temporary impairment, the guidance will be applied prospectively. Existing purchased credit impaired (PCI) assets will be grandfathered and classified as purchased credit deteriorated (PCD) assets at the date of adoption. The asset will be grossed up for the allowance for expected credit losses for all PCD assets at the date of adoption and will continue to recognize the noncredit discount in interest income based on the yield of such assets as of the adoption date. Subsequent changes in expected credit losses will be recorded through the allowance. For all other assets within the scope of CECL, a cumulative-effect adjustment will be recognized in retained earnings as of the beginning of the first reporting period in which the guidance is effective. The Company has begun its implementation efforts by identifying key interpretive issues, assessing its processes and identifying the system requirements against the new guidance to determine what modifications may be required. While the Company is still evaluating the overall impact on the new standard on its consolidated financial statements, the Company expects the adoption may result in an increase to the allowance for loan losses balance. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement. The ASU was issued to improve the effectiveness of disclosures surrounding fair value measurements. The ASU removes numerous disclosures from Topic 820 including; transfers between level 1 and 2 of the fair value hierarchy, the policy for timing of transfers between levels, and the valuation process for level 3 fair value measurements. The ASU also modified and added disclosure requirements in regards to changes in unrealized gains and losses included in other comprehensive income, as well as the range and weighted average of unobservable inputs for level 3 fair value measurements. The ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. The guidance is not expected to have a significant impact on the Company's consolidated financial statements. |
Earnings Per Share of Common St
Earnings Per Share of Common Stock | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share of Common Stock | |
Earnings Per Share of Common Stock | NOTE (2) – Earnings Per Share of Common Stock Basic earnings per share of common stock is computed pursuant to the two-class method by dividing net income available to common stockholders less dividends paid on participating securities (unvested shares of restricted common stock) and any undistributed earnings attributable to participating securities by the weighted average common shares outstanding during the period. The weighted average common shares outstanding includes the weighted average number of shares of common stock outstanding less the weighted average number of unvested shares of restricted common stock. ESOP shares are considered outstanding for this calculation unless unearned. Diluted earnings per share of common stock includes the dilutive effect of unvested stock awards and additional potential common shares issuable under stock options. The following table shows how the Company computed basic and diluted earnings per share of common stock for the periods indicated: For the three months ended March 31, 2019 2018 (In thousands, except share and per share) Net income (loss) $ 277 $ (84) Less net income attributable to participating securities 4 — Net income (loss) available to common stockholders $ 273 $ (84) Weighted average common shares outstanding for basic earnings per common share 26,546,315 26,766,158 Add: dilutive effects of assumed exercises of stock options — — Weighted average common shares outstanding for diluted earnings per common share 26,546,315 26,766,158 Earnings (loss) per common share - basic $ 0.01 $ (0.00) Earnings (loss) per common share - diluted $ 0.01 $ (0.00) Stock options for 455,000 shares of common stock for the three months ended March 31, 2019 and stock options for 537,500 shares of common stock for the three months ended March 31, 2018 were not considered in computing diluted earnings per common share because they were anti-dilutive. |
Securities
Securities | 3 Months Ended |
Mar. 31, 2019 | |
Securities | |
Securities | NOTE (3) – Securities The following table summarizes the amortized cost and fair value of the available-for-sale investment securities portfolios as of the periods indicated and the corresponding amounts of unrealized gains and losses which were recognized in accumulated other comprehensive income (loss): Gross Gross Unrealized Unrealized Amortized Cost Gains Losses Fair Value (In thousands) March 31, 2019: Federal agency mortgage-backed securities $ 9,171 $ 83 $ (31) $ 9,223 Federal agency debt 5,320 — (26) 5,294 Total available-for-sale securities $ 14,491 $ 83 $ (57) $ 14,517 December 31, 2018: Federal agency mortgage-backed securities $ 9,575 $ 88 $ (155) $ 9,508 Federal agency debt 5,317 — (103) 5,214 Total available-for-sale securities $ 14,892 $ 88 $ (258) $ 14,722 At March 31, 2019, the Bank had three federal agency debt securities with total amortized cost of $5.3 million, estimated total fair value of $5.3 million and an estimated average remaining life of 3.6 years. The Bank also had 22 federal agency mortgage-backed securities with total amortized cost of $9.2 million, estimated total fair value of $9.2 million and an estimated average remaining life of 4.4 years. Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. There were no securities pledged to secure public deposits at March 31, 2019 and December 31, 2018. At March 31, 2019 and December 31, 2018, there were no holdings of securities by any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of stockholders’ equity. There were no sales of securities during the three months ended March 31, 2019 and 2018. The Bank held 8 securities with unrealized losses at March 31, 2019 compared to 10 securities with unrealized losses at December 31, 2018. Securities in unrealized loss positions are analyzed as part of our ongoing assessment of other-than-temporary impairment. Consideration is given to the financial condition and near-term prospects of the issuer, the length of time and the extent to which the fair value has been less than the cost, and our intent and ability to retain our investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value. All of the Bank’s securities were issued by the federal government or its agencies. The unrealized losses on our available-for-sale securities at March 31, 2019 were primarily caused by movements in market interest rates subsequent to the purchase of such securities. We do not consider these unrealized losses to be other than temporary impairment. |
Loans Receivable Held for Sale
Loans Receivable Held for Sale | 3 Months Ended |
Mar. 31, 2019 | |
Loans Receivable Held for Sale | |
Loans Receivable Held for Sale | |
Loans Receivable Held for Sale | NOTE (4) – Loans Receivable Held for Sale Loans receivable held for sale at March 31, 2019 and December 31, 2018 totaled $5.2 million and $6.2 million, respectively, and consisted of multi-family loans. The Bank transferred $1.1 million and $16.9 million of multi-family loans from the held-for-sale portfolio to the held-for-investment portfolio during the three months ended March 31, 2019 and 2018, respectively. There were no loan sales during the three months ended March 31, 2019 and 2018. Loan repayments totaled $24 thousand and $71 thousand during the three months ended March 31, 2019 and 2018, respectively. |
Loans Receivable Held for Inves
Loans Receivable Held for Investment | 3 Months Ended |
Mar. 31, 2019 | |
Loans Receivable Held for Investment | |
Loans Receivable Held for Investment | |
Loans Receivable Held for Investment | NOTE (5) – Loans Receivable Held for Investment Loans receivable held for investment were as follows as of the periods indicated: March 31, 2019 December 31, 2018 (In thousands) Real estate: Single family $ 89,043 $ 91,835 Multi-family 245,551 231,870 Commercial real estate 6,890 5,802 Church 23,376 25,934 Construction 1,749 1,876 Commercial – other 234 226 Consumer 15 5 Gross loans receivable before deferred loan costs and premiums 366,858 357,548 Unamortized net deferred loan costs and premiums 1,086 937 Gross loans receivable 367,944 358,485 Allowance for loan losses (2,929) (2,929) Loans receivable, net $ 365,015 $ 355,556 The following tables present the activity in the allowance for loan losses by loan type for the periods indicated: Three Months Ended March 31, 2019 Real Estate Single Multi- Commercial Commercial family family real estate Church Construction - other Consumer Total (In thousands) Beginning balance $ 369 $ 1,880 $ 52 $ 603 $ 19 $ 6 $ — $ 2,929 Provision for (recapture of) loan losses (22) 110 10 (286) (1) (1) — (190) Recoveries — — — 190 — — — 190 Loans charged off — — — — — — — — Ending balance $ 347 $ 1,990 $ 62 $ 507 $ 18 $ 5 $ — $ 2,929 Three Months Ended March 31, 2018 Real Estate Single Multi- Commercial Commercial family family real estate Church Construction - other Consumer Total (In thousands) Beginning balance $ 594 $ 2,300 $ 71 $ 1,081 $ 17 $ 6 $ — $ 4,069 Provision for (recapture of) loan losses (6) 208 (6) (190) (6) — — — Recoveries — — — 114 — — — 114 Loans charged off — — — — — — — — Ending balance $ 588 $ 2,508 $ 65 $ 1,005 $ 11 $ 6 $ — $ 4,183 The following tables present the balance in the allowance for loan losses and the recorded investment (unpaid contractual principal balance less charge-offs, less interest applied to principal, plus unamortized deferred costs and premiums) by loan type and based on impairment method as of and for the periods indicated: March 31, 2019 Real Estate Single Multi- Commercial Commercial family family real estate Church Construction - other Consumer Total (In thousands) Allowance for loan losses: Ending allowance balance attributable to loans: Individually evaluated for impairment $ 38 $ — $ — $ 145 $ — $ 3 $ — $ 186 Collectively evaluated for impairment 309 1,990 62 362 18 2 — 2,743 Total ending allowance balance $ 347 $ 1,990 $ 62 $ 507 $ 18 $ 5 $ — $ 2,929 Loans: Loans individually evaluated for impairment $ 606 $ 321 $ — $ 4,181 $ — $ 63 $ — $ 5,171 Loans collectively evaluated for impairment 88,762 246,683 6,894 18,503 1,745 171 15 362,773 Total ending loans balance $ 89,368 $ 247,004 $ 6,894 $ 22,684 $ 1,745 $ 234 $ 15 $ 367,944 December 31, 2018 Real Estate Single Multi- Commercial Commercial family family real estate Church Construction - other Consumer Total (In thousands) Allowance for loan losses: Ending allowance balance attributable to loans: Individually evaluated for impairment $ 53 $ — $ — $ 170 $ — $ 4 $ — $ 227 Collectively evaluated for impairment 316 1,880 52 433 19 2 — 2,702 Total ending allowance balance $ 369 $ 1,880 $ 52 $ 603 $ 19 $ 6 $ — $ 2,929 Loans: Loans individually evaluated for impairment $ 610 $ 323 $ — $ 5,383 $ — $ 64 $ — $ 6,380 Loans collectively evaluated for impairment 91,567 232,986 5,800 19,713 1,872 162 5 352,105 Total ending loans balance $ 92,177 $ 233,309 $ 5,800 $ 25,096 $ 1,872 $ 226 $ 5 $ 358,485 The following table presents information related to loans individually evaluated for impairment by loan type as of the periods indicated: March 31, 2019 December 31, 2018 Allowance Allowance Unpaid for Loan Unpaid for Loan Principal Recorded Losses Principal Recorded Losses Balance Investment Allocated Balance Investment Allocated (In thousands) With no related allowance recorded: Multi-family $ 321 $ 321 $ — $ 323 $ 323 $ — Church 3,492 2,165 — 4,666 2,803 — With an allowance recorded: Single family 605 606 38 610 610 53 Church 2,017 2,016 145 2,580 2,580 170 Commercial - other 63 63 3 64 64 4 Total $ 6,498 $ 5,171 $ 186 $ 8,243 $ 6,380 $ 227 The recorded investment in loans excludes accrued interest receivable due to immateriality. For purposes of this disclosure, the unpaid principal balance is not reduced for net charge-offs. The following tables present the monthly average of loans individually evaluated for impairment by loan type and the related interest income for the periods indicated: Three Months Ended March 31, 2019 Three Months Ended March 31, 2018 Cash Basis Cash Basis Average Interest Average Interest Recorded Income Recorded Income Investment Recognized Investment Recognized (In thousands) Single family $ 608 $ 8 $ 625 $ 8 Multi-family 322 6 332 6 Church 5,001 430 7,981 174 Commercial – other 64 1 65 1 Total $ 5,995 $ 445 $ 9,003 $ 189 Cash-basis interest income recognized represents cash received for interest payments on accruing impaired loans and interest recoveries on non-accrual loans that were paid off. Interest payments collected on non-accrual loans are characterized as payments of principal rather than payments of the outstanding accrued interest on the loans until the remaining principal on the non-accrual loans is considered to be fully collectible or paid off. When a loan is returned to accrual status, the interest payments that were previously applied to principal are deferred and amortized over the remaining life of the loan. Foregone interest income that would have been recognized had loans performed in accordance with their original terms amounted to $40 thousand and $86 thousand for the three months ended March 31, 2019 and 2018, respectively, and were not included in the consolidated results of operations. The following tables present the aging of the recorded investment in past due loans by loan type as of the periods indicated: March 31, 2019 Greater 30-59 60-89 than Days Days 90 Days Total Past Due Past Due Past Due Past Due Current Total (In thousands) Loans receivable held for investment: Single family $ — $ — $ 34 $ 34 $ 89,334 $ 89,368 Multi-family — — — — 247,004 247,004 Commercial real estate — — — — 6,894 6,894 Church 259 283 — 542 22,142 22,684 Construction — — — — 1,745 1,745 Commercial - other — — — — 234 234 Consumer — — — — 15 15 Total $ 259 $ 283 $ 34 $ 576 $ 367,368 $ 367,944 December 31, 2018 Greater 30-59 60-89 than Days Days 90 Days Total Past Due Past Due Past Due Past Due Current Total (In thousands) Loans receivable held for investment: Single family $ 35 $ — $ — $ 35 $ 92,142 $ 92,177 Multi-family — — — — 233,309 233,309 Commercial real estate — — — — 5,800 5,800 Church — — — — 25,096 25,096 Construction — — — — 1,872 1,872 Commercial - other — — — — 226 226 Consumer — — — — 5 5 Total $ 35 $ — $ — $ 35 $ 358,450 $ 358,485 The following table presents the recorded investment in non-accrual loans by loan type as of the periods indicated: March 31, 2019 December 31, 2018 (In thousands) Loans receivable held for investment: Single-family residence $ 34 $ — Church 748 911 Total non-accrual loans $ 782 $ 911 There were no loans 90 days or more delinquent that were accruing interest as of March 31, 2019 or December 31, 2018. Troubled Debt Restructurings At March 31, 2019, loans classified as troubled debt restructurings (“TDRs”) totaled $5.2 million, of which $748 thousand were included in non-accrual loans and $4.4 million were on accrual status. At December 31, 2018, loans classified as TDRs totaled $6.4 million, of which $591 thousand were included in non-accrual loans and $5.8 million were on accrual status. The Company has allocated $186 thousand and $227 thousand of specific reserves for TDRs as of March 31, 2019 and December 31, 2018, respectively. TDRs on accrual status are comprised of loans that were accruing at the time of restructuring or loans that have complied with the terms of their restructured agreements for a satisfactory period of time and for which the Bank anticipates full repayment of both principal and interest. TDRs that are on non-accrual status can be returned to accrual status after a period of sustained performance, generally determined to be six months of timely payments, as modified. A well-documented credit analysis that supports a return to accrual status based on the borrower’s financial condition and prospects for repayment under the revised terms is also required. As of March 31, 2019 and December 31, 2018, the Company had no commitment to lend additional amounts to customers with outstanding loans that are classified as TDRs. No loans were modified during the three months ended March 31, 2019 and 2018. Credit Quality Indicators The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. For single family residential, consumer and other smaller balance homogenous loans, a credit grade is established at inception, and generally only adjusted based on performance. Information about payment status is disclosed elsewhere herein. The Company analyzes all other loans individually by classifying the loans as to credit risk. This analysis is performed at least on a quarterly basis. The Company uses the following definitions for risk ratings: · Watch. Loans classified as watch exhibit weaknesses that could threaten the current net worth and paying capacity of the obligors. Watch graded loans are generally performing and are not more than 59 days past due. A watch rating is used when a material deficiency exists but correction is anticipated within an acceptable time frame. · Special Mention. Loans classified as special mention have a potential weakness that deserves management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution's credit position at some future date. · Substandard. Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. · Doubtful. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. · Loss. Loans classified as loss are considered uncollectible and of such little value that to continue to carry the loan as an active asset is no longer warranted. Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass rated loans. Pass rated loans are generally well protected by the current net worth and paying capacity of the obligor and/or by the value of the underlying collateral. Pass rated loans are not more than 59 days past due and are generally performing in accordance with the loan terms. Based on the most recent analysis performed, the risk categories of loans by loan type as of the periods indicated were as follows: March 31, 2019 Pass Watch Special Mention Substandard Doubtful Loss (In thousands) Single family $ 89,324 $ — $ — $ 44 $ — $ — Multi-family 245,808 — 536 660 — — Commercial real estate 6,894 — — — — — Church 17,670 667 259 4,088 — — Construction 1,745 — — — — — Commercial - other 171 — — 63 — — Consumer 15 — — — — — Total $ 361,627 $ 667 $ 795 $ 4,855 $ — $ — December 31, 2018 Pass Watch Special Mention Substandard Doubtful Loss (In thousands) Single family $ 92,132 $ — $ 35 $ 10 $ — $ — Multi-family 232,642 — — 667 — — Commercial real estate 5,800 — — — — — Church 19,678 672 — 4,746 — — Construction 1,872 — — — — — Commercial - other 162 — — 64 — — Consumer 5 — — — — — Total $ 352,291 $ 672 $ 35 $ 5,487 $ — $ — |
Leases
Leases | 3 Months Ended |
Mar. 31, 2019 | |
Leases | |
Leases | NOTE (6) – Leases The Bank has a combined operating lease for its corporate headquarters and main retail branch and a photocopier lease. The ROU asset and operating lease liability are recorded in fixed assets and other liabilities, respectively, in the consolidated statements of financial condition. Our ROU asset represents our right to use an underlying asset during the lease term. Operating liabilities represent our obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized based on the present value of the remaining lease payments using a discount rate that represents our incremental borrowing rate at the date of implementation of the new accounting standard. The operating lease for our corporate headquarters and main retail branch has one 5-year extension option at the then fair market rate. As this extension option is not reasonably certain of exercise, it is not included in the lease term. The Bank recorded a ROU asset of $1.1 million and an operating lease liability of $1.1 million as of March 31, 2019. The Bank has no finance leases. The Bank recorded operating lease expense costs of $123 thousand and $121 thousand for the quarters ended March 31, 2019 and March 31, 2018, respectively. Additional information regarding our operating leases is summarized below as of or for the three months ended March 31, 2019 (dollars in thousands): Cash paid for amounts included in the measurement of lease liabilities for operating leases: $ 134 ROU assets obtained in exchange for lease liabilities $ 1,120 Weighted average remaining lease term in months 25 Weighted average discount rate 2.75 % The future minimum payments for operating leases with remaining terms of one year or more as of March 31, 2019 were as follows (in thousands): Nine months ended December 31, 2019 $ 408 Year ended December 31, 2020 555 Year ended December 31, 2021 195 Total Future Minimum Lease Payments 1,158 Amounts Representing Interest (34) Present Value of Net Future Minimum Lease Payments $ 1,124 |
Junior Subordinated Debentures
Junior Subordinated Debentures | 3 Months Ended |
Mar. 31, 2019 | |
Junior Subordinated Debentures | |
Junior Subordinated Debentures | NOTE (7) – Junior Subordinated Debentures On March 17, 2004, the Company issued $6.0 million of Floating Rate Junior Subordinated Debentures (the “Debentures”) in a private placement to a trust that was capitalized to purchase subordinated debt and preferred stock of multiple community banks. Interest on the Debentures is payable quarterly at a rate per annum equal to the 3-Month LIBOR plus 2.54%. The interest rate is determined as of each March 17, June 17, September 17, and December 17, and was 5.17% at March 31, 2019. On October 16, 2014, the Company made payments of $900 thousand of principal on Debentures, executed a Supplemental Indenture for the Debentures that extended the maturity of the Debentures to March 17, 2024, and modified the payment terms of the remaining $5.1 million principal amount thereof. The modified terms of the Debentures require quarterly payments of interest only through March 2019 at the original rate of 3-Month LIBOR plus 2.54%. Starting in June 2019, the Company will be required to make quarterly payments of equal amounts of principal, plus interest, until the Debentures are fully amortized on March 17, 2024. The Debentures may be called for redemption at any time by the Company. |
Fair Value
Fair Value | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value | |
Fair Value | NOTE (8) – Fair Value The Company used the following methods and significant assumptions to estimate fair value: The fair values of securities available-for-sale are determined by obtaining quoted prices on nationally recognized securities exchanges (Level 1 inputs) or matrix pricing, which is a mathematical technique to value debt securities without relying exclusively on quoted prices for the specific securities, but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2 inputs). The fair value of impaired loans that are collateral dependent is generally based upon the fair value of the collateral, which is obtained from recent real estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value. Impaired loans are evaluated on a quarterly basis for additional impairment and adjusted accordingly. Assets acquired through or by transfer in lieu of loan foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. These assets are subsequently accounted for at the lower of cost or fair value less estimated costs to sell. Fair value is commonly based on recent real estate appraisals which are updated every nine months. These appraisals may utilize a single valuation approach or a combination of approaches, including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value. Real estate owned properties are evaluated on a quarterly basis for additional impairment and adjusted accordingly. Appraisals for collateral-dependent impaired loans are performed by certified general appraisers (for commercial properties) or certified residential appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by the Company. Once received, an independent third-party licensed appraiser reviews the appraisals for accuracy and reasonableness, reviewing the assumptions and approaches utilized in the appraisal as well as the overall resulting fair value in comparison with independent data sources such as recent market data or industry-wide statistics. Assets Measured on a Recurring Basis Assets measured at fair value on a recurring basis are summarized below: Fair Value Measurement Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Assets Inputs Inputs (Level 1) (Level 2) (Level 3) Total (In thousands) At March 31, 2019: Securities available-for-sale - federal agency mortgage-backed $ — $ 9,223 $ — $ 9,223 Securities available-for-sale - federal agency debt 1,988 3,306 — 5,294 At December 31, 2018: Securities available-for-sale - federal agency mortgage-backed $ — $ 9,508 $ — $ 9,508 Securities available-for-sale - federal agency debt 1,979 3,235 — 5,214 There were no transfers between Level 1, Level 2, or Level 3 during the three months ended March 31, 2019 and 2018. Assets Measured on a Non-Recurring Basis Assets are considered to be reflected at fair value on a non-recurring basis if the fair value measurement of the instrument does not necessarily result in a change in the amount recorded on the statement of condition. Generally, a non-recurring valuation is the result of the application of other accounting pronouncements that require assets to be assessed for impairment or recorded at the lower of cost or fair value. The following table provides information regarding the carrying values of our assets measured at fair value on a non-recurring basis as of the periods indicated. The fair value measurement for all of these assets falls within Level 3 of the fair value hierarchy. March 31, 2019 December 31, 2018 (In thousands) Impaired loans carried at fair value of collateral $ 439 $ 591 Real estate owned 820 833 The following table presents the valuation methodology and unobservable inputs for Level 3 assets measured at fair value on a nonrecurring basis as of March 31, 2019 and December 31, 2018: Valuation Weighted Technique(s) Unobservable Input(s) Range Average March 31, 2019: Impaired loans Third Party Adjustment for differences Appraisals between the comparable sales -3% to -1% -2.57% Real estate owned Third Party Adjustment for differences Appraisals between the comparable sales -11% -10.85% December 31, 2018: Impaired loans Third Party Adjustment for differences Appraisals between the comparable sales -3% to -1% -2.83% Real estate owned Third Party Adjustment for differences Appraisals between the comparable sales -11% -10.85% Fair Values of Financial Instruments The following tables present the carrying amount, fair value, and placement in the fair value hierarchy of the Company’s financial instruments not recorded at fair value on a recurring basis as of March 31, 2019 and December 31, 2018. This table excludes financial instruments for which the carrying amount approximates fair value. For short-term financial assets such as cash and due from banks, interest-bearing deposits in other banks, and accrued interest receivable/payable, the carrying amount is a reasonable estimate of fair value due to the relatively short time between the origination of the instrument and its expected realization. For non-marketable equity securities such as Federal Home Loan Bank stock, the carrying amount is a reasonable estimate of fair value as these securities can only be redeemed or sold at their par value and only to the respective issuing government supported institution or to another member institution. For financial liabilities such as noninterest-bearing demand, interest-bearing demand, and savings deposits, the carrying amount is a reasonable estimate of fair value due to these products having no stated maturity. Fair Value Measurements at March 31, 2019 Carrying Value Level 1 Level 2 Level 3 Total (In thousands) Financial Assets: Loans receivable held for sale $ 5,154 $ — $ 5,154 $ — $ 5,154 Loans receivable held for investment 365,015 — — 360,882 360,882 Financial Liabilities: Time Deposits $ 180,543 $ — $ 180,077 $ — $ 180,077 Federal Home Loan Bank advances 75,000 — 75,403 — 75,403 Junior subordinated debentures 5,100 — — 4,459 4,459 Fair Value Measurements at December 31, 2018 Carrying Value Level 1 Level 2 Level 3 Total (In thousands) Financial Assets: Loans receivable held for sale $ 6,231 $ — $ 6,270 $ — $ 6,270 Loans receivable held for investment 355,556 — — 354,792 354,792 Financial Liabilities: Time Deposits $ 172,564 $ — $ 171,725 $ — $ 171,725 Federal Home Loan Bank advances 70,000 — 69,933 — 69,933 Junior subordinated debentures 5,100 — — 4,481 4,481 In accordance with the adoption of ASU No. 2016-01, the fair value of certain financial assets and liabilities, including loans, time deposits, and junior subordinated debentures, as of March 31, 2019 was measured using an exit price notion. Although the exit price notion represents the value that would be received to sell an asset or paid to transfer a liability, the actual price received for a sale of assets or paid to transfer liabilities could be different from exit price disclosed. |
Stock-based Compensation
Stock-based Compensation | 3 Months Ended |
Mar. 31, 2019 | |
Stock-based Compensation | |
Stock-based Compensation | NOTE (9) – Stock-based Compensation Prior to July 25, 2018, the Company issued stock-based compensation awards to its directors and employees under the 2008 Long-Term Incentive Plan (“2008 LTIP”). The 2008 LTIP permitted the grant of non-qualified and incentive stock options, stock appreciation rights, full value awards and cash incentive awards for up to 2,000,000 shares of common stock. As of July 25, 2018, the Company ceased granting awards under the 2008 LTIP. On July 25, 2018, the stockholders approved the 2018 Long-Term Incentive Plan (“2018 LTIP”). As with the 2008 LTIP, the 2018 LTIP permits the grant of non-qualified and incentive stock options, stock appreciation rights, full value awards and cash incentive awards. The plan is in effect for ten years. The maximum number of shares that can be awarded under the plan is 1,293,109 shares of common stock as of December 31, 2018. In March 2016, the Company awarded 120,483 shares of restricted stock to its Chief Executive Officer (“CEO”) under the 2008 LTIP. A restricted stock award is valued at the closing price of the Company’s stock on the date of such award. Subject to certain performance restrictions, 100,000 shares of restricted stock shall vest over a two-year period and the remaining 20,483 shares shall vest over a three-year period. Stock-based compensation expense is recognized over the vesting period. The Company recorded $3 thousand and $26 thousand of stock-based compensation expense related to this award during the three months ended March 31, 2019 and 2018, respectively. As of March 31, 2019, this restricted stock award was fully vested, and all compensation costs related to this vested restricted stock award was fully recognized. In February 2019, the Company awarded 428,796 shares of restricted stock to its employees under the 2018 LTIP. A restricted stock award is valued at the average of the high and the low price of the Company’s stock on the date of the award. These shares of restricted stock shall vest over a two-year period. Stock-based compensation expense is recognized over the vesting period. The Company recorded $22 thousand of stock-based compensation expense related to this award during the three months ended March 31, 2019. As of March 31, 2019, the unrecognized compensation cost related to nonvested restricted-stock award under the plan was $505 thousand. The cost is expected to be recognized over a period of 1.92 years. In January 2019, the Company awarded 42,168 shares of common stock to its directors under the 2018 LTIP which are fully vested. The Company recorded $52 thousand of compensation expense for the quarter ended March 31, 2019 based on the fair value of the stock, which was determined using the average of the high and the low price of the stock on the date of the award. Additionally, in January 2018, the Company awarded 18,906 shares of common stock to its directors under the 2008 LTIP, all of which are fully vested. The Company recorded $45 thousand of compensation expense for the quarter ended March 31, 2018 based on the fair value of the stock, which was determined using the average of the high and the low price of the stock on the date of the award. In February 2018 and April 2017, the Company also awarded 97,195 and 129,270 of cash-settled restricted stock units (“RSUs”) to its CEO under the 2008 LTIP. All RSUs vest at the end of two years from the date of the grant and are subject to forfeiture until vested. Each RSU entitles the CEO to receive cash equal to the fair market value of one share of common stock on the applicable payout date. Compensation expense is determined based on the fair value of the award and is re-measured at each reporting period and is classified as a liability in the consolidated statements of financial condition. The Company recorded $92 thousand and $32 thousand of compensation expense related to these awards during the quarters ended March 31, 2019 and 2018, respectively. No stock options were granted during the three months ended March 31, 2019 and 2018. The following table summarizes stock option activity during the three months ended March 31, 2019 and 2018: Three Months Ended Three Months Ended March 31, 2019 March 31, 2018 Weighted Weighted Average Average Number Exercise Number Exercise Outstanding Price Outstanding Price Outstanding at beginning of period 537,500 $ 2.19 537,500 $ 2.19 Granted during period — — — — Exercised during period — — — — Forfeited or expired during period (82,500) 4.89 — — Outstanding at end of period 455,000 $ 1.67 537,500 $ 2.19 Exercisable at end of period 185,000 $ 1.74 267,500 $ 2.71 The Company recorded $9 thousand of stock-based compensation expense related to stock options during the three months ended March 31, 2019 and 2018, respectively. As of March 31, 2019, the unrecognized compensation cost related to nonvested stock options granted under the plan was $74 thousand. The cost is expected to be recognized over a period of 1.90 years. Options outstanding and exercisable at March 31, 2019 were as follows: Outstanding Exercisable Weighted Average Weighted Weighted Remaining Average Aggregate Average Aggregate Number Contractual Exercise Intrinsic Number Exercise Intrinsic Grant Date Outstanding Life Price Value Outstanding Price Value January 21, 2010 5,000 0.81 years $ 6.00 5,000 $ 6.00 February 24, 2016 450,000 6.90 years $ 1.62 180,000 $ 1.62 455,000 6.83 years $ 1.67 $ — 185,000 $ 1.74 $ — |
ESOP Plan
ESOP Plan | 3 Months Ended |
Mar. 31, 2019 | |
ESOP Plan | |
ESOP Plan | NOTE (10) – ESOP Plan Employees participate in an Employee Stock Option Plan (“ESOP”) after attaining certain age and service requirements. In December 2016, the ESOP purchased 1,493,679 shares of the Company’s common stock at $1.59 per share, for a total cost of $2.4 million, of which $1.2 million was funded with a loan from the Company. The loan will be repaid from the Bank’s annual discretionary contributions to the ESOP, net of dividends paid, over a period of 20 years. Shares of the Company’s common stock purchased by the ESOP are held in a suspense account until released for allocation to participants. When loan payments are made, shares are allocated to each eligible participant based on the ratio of each such participant’s compensation, as defined in the ESOP, to the total compensation of all eligible plan participants. As the unearned shares are released from the suspense account, the Company recognizes compensation expense equal to the fair value of the ESOP shares during the periods in which they become committed to be released. To the extent that the fair value of the ESOP shares released differs from the cost of such shares, the difference is charged or credited to equity as additional paid-in capital. Any dividends on allocated shares increase participant accounts. Any dividends on unallocated shares will be used to repay the loan. Participants will receive shares for their vested balance at the end of their employment. Compensation expense related to the ESOP was $14 thousand and $25 thousand for the three months ended March 31, 2019 and 2018, respectively. Shares held by the ESOP were as follows: March 31, 2019 December 31, 2018 (Dollars in thousands) Allocated to participants 1,047,389 1,036,809 Committed to be released 21,160 10,580 Suspense shares 624,873 646,033 Total ESOP shares 1,693,422 1,693,422 Fair value of unearned shares $ 890 $ 678 During the first quarter ended March 31, 2019, 21,160 of ESOP shares were committed to be allocated to participants. During 2018 and 2017, 43,009 and 40,126 of ESOP shares were released for allocation to participants, respectively. Unearned shares, which are reported as Unearned ESOP shares in the equity section of the consolidated statements of financial condition, were $1.0 million at both March 31, 2019 and December 31, 2018 |
Regulatory Matters
Regulatory Matters | 3 Months Ended |
Mar. 31, 2019 | |
Regulatory Matters | |
Regulatory Matters | NOTE (11) – Regulatory Matters The Bank’s capital requirements are administered by the Office of the Comptroller of the Currency (“OCC”) and involve quantitative measures of assets, liabilities, and certain off-balance sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by the OCC. Failure to meet capital requirements can result in regulatory action. The federal banking regulators approved final capital rules (“Basel III Capital Rules”) in July 2013 implementing the Basel III framework as well as certain provisions of the Dodd-Frank Act. The Basel III Capital Rules prescribe a standardized approach for calculating risk-weighted assets and revised the definition and calculation of Tier 1 capital and Total capital, and include a new Common Equity Tier 1 capital (“CET1”) measure. Under the Basel III Capital Rules, the currently effective minimum capital ratios are: · 4.5% CET1 to risk-weighted assets; · 6.0% Tier 1 capital (that is, CET1 plus Additional Tier 1 capital) to risk-weighted assets; · 8.0% Total capital (that is, Tier 1 capital plus Tier 2 capital) to risk-weighted assets; and · 4.0% Tier 1 capital to average consolidated assets (known as the “leverage ratio”). A new capital conservation buffer was also established above the regulatory minimum capital requirements. This capital conservation buffer was phased in beginning January 1, 2016 at 0.625% of risk-weighted assets and will increase each subsequent year by an additional 0.625% until it reaches its final level of 2.5% on January 1, 2019. The Basel III Capital rules also contain revisions to the prompt corrective action framework, which is designed to place restrictions on insured depository institutions if their capital levels begin to show signs of weakness. Under the prompt corrective action requirements, which are designed to complement the capital conservation buffer, insured depository institutions are now required to meet the following increased capital level requirements in order to qualify as “well capitalized”: (i) a CET1 capital ratio of 6.5%; (ii) a Tier 1 capital ratio of 8% (increased from 6%); (iii) a total capital ratio of 10% (unchanged from previous rules); and (iv) a Tier 1 leverage ratio of 5% (unchanged from previous rules). The Basel III Capital Rules became effective for the Bank on January 1, 2015 (subject to a phase-in period for certain provisions). At March 31, 2019 and December 31, 2018, the Bank’s level of capital exceeded all regulatory capital requirements and its regulatory capital ratios were above the minimum levels required to be considered well capitalized for regulatory purposes. Actual and required capital amounts and ratios as of the periods indicated are presented below. Minimum Required To Be Well Capitalized Under Prompt Minimum Capital Corrective Action Actual Requirements Provisions Amount Ratio Amount Ratio Amount Ratio (Dollars in thousands) March 31, 2019: Tier 1 (Leverage) $ 49,918 11.99 % $ 16,649 4.00 % $ 20,811 5.00 % Common Equity Tier 1 $ 49,918 19.40 % $ 18,730 4.50 % $ 16,724 6.50 % Tier 1 $ 49,918 19.40 % $ 24,973 6.00 % $ 20,584 8.00 % Total Capital $ 52,868 20.55 % $ 33,298 8.00 % $ 25,730 10.00 % December 31, 2018: Tier 1 (Leverage) $ 49,433 12.03 % $ 16,439 4.00 % $ 20,549 5.00 % Common Equity Tier 1 $ 49,433 19.32 % $ 18,494 4.50 % $ 16,634 6.50 % Tier 1 $ 49,433 19.32 % $ 24,659 6.00 % $ 20,472 8.00 % Total Capital $ 52,417 20.48 % $ 32,879 8.00 % $ 25,590 10.00 % |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2019 | |
Income Taxes | |
Income Taxes | NOTE (12) – Income Taxes The Company and its subsidiary are subject to U.S. federal and state income taxes. Income tax expense is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all, of the deferred tax asset will not be realized. In assessing the realization of deferred tax assets, management evaluated both positive and negative evidence, including the existence of cumulative losses in the current year and the prior two years, the amount of taxes paid in available carry-back years, the forecasts of future income and tax planning strategies. Based on this analysis, the Company determined that as of March 31, 2019, no valuation allowance was required on its deferred tax assets, which totaled $4.9 million. As of December 31, 2018, the Company recorded no valuation allowance on its deferred tax assets of $5.0 million. |
Concentration of Credit Risk
Concentration of Credit Risk | 3 Months Ended |
Mar. 31, 2019 | |
Concentration of Credit Risk | |
Concentration of Credit Risk | NOTE (13) – Concentration of Credit Risk The Bank has a significant concentration of deposits with a long-time customer that accounted for approximately 11% of its deposits as of March 31, 2019. The Bank expects to maintain this relationship with the customer. |
Basis of Financial Statement _2
Basis of Financial Statement Presentation (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Basis of Financial Statement Presentation | |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)”, which is intended to increase transparency and comparability in the accounting for lease transactions. ASU 2016-02 became effective as of January 1, 2019 and provides for a modified retrospective transition approach requiring lessees to recognize and measure leases on the balance sheet at the either the earliest period presented or as of the beginning of the period of adoption with the option to elect certain practical expedients. We have elected to apply ASU 2016-02 as of the beginning of the period of adoption, which as January 1, 2019 and we have elected not to restate comparative periods. Of the practical expedients available under ASU 206-02, all have been adopted except for the hindsight practical expedient. The Bank has a combined operating lease for its corporate headquarters and main retail branch and a photocopier lease. As a result of implementing ASU 2016-02, we recognized an operating lease right-of-use (“ROU”) asset of $1.2 million and an operating lease liability of $1.2 million as of January 1, 2019, with no impact on our consolidated statements of operations or consolidated statements of cash flows compared to the prior lease accounting model. The ROU asset and operating lease liability are recorded in fixed assets and other liabilities, respectively, in the consolidated statements of financial condition. See Note 6 – Leases for additional information. The implementation of this standard had a minor impact on our regulatory capital ratios. In January 2016, the FASB issued ASU 2016-01, “Financial Instruments – Overall (Subtopic 825-10) - Recognition and Measurement of Financial Assets and Financial Liabilities”. ASU 2016-01 (i) amends existing guidance that requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. It requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes. It requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (i.e., securities or loans and receivables). It eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost. These amendments are effective for public business entities for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Adoption of this standard did not have a material impact on the Company’s consolidated financial statements. In accordance with this standard, the Company measured the fair value of its financial assets and financial liabilities as of December 31, 2018 using an exit price notion (see Note 5 Fair Value). In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments”. ASU 2016-15 provides guidance on the classification of certain cash receipts and payments on the consolidated statement of cash flows in order to reduce diversity in practice. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Adoption of this standard did not have a material impact on the Company’s consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash”. ASU 2016-18 requires entities to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. As a result, entities will no longer present transfers between cash and cash equivalents and restricted cash and restricted cash equivalents in the consolidated statement of cash flows. ASU 2016-18 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, where the guidance should be applied using a retrospective transition method to each period presented. Early adoption is permitted. Adoption of this standard did not have a material impact on the Company’s consolidated financial statements. In February 2018, the FASB issued Accounting Standards Update (“ASU”) 2018-02, “Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (Topic 220)”, which allows an entity to elect a reclassification from accumulated other comprehensive income (AOCI) to retained earnings for the stranded tax effects resulting from the Tax Cuts and Jobs Act. The amount of that reclassification should include the effect of changes of tax rate on the deferred tax amount, any related valuation allowance and other income tax effects on the items in AOCI. The standard requires an entity to state if an election to reclassify the tax effect to retained earnings is made along with the description of other income tax effects that are reclassified from AOCI. The guidance is effective for public business entities for annual periods beginning on or after December 15, 2018 and interim periods within those annual periods with early adoption permitted. The Company early adopted this amendment and has elected to reclassify $66 thousand from AOCI to retained earnings at December 31, 2017. Recent Accounting Pronouncements Yet to Be Adopted In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”. ASU 2016-13 replaces the incurred loss model with an expected loss model, which is referred to as the current expected credit loss (CECL) model. The CECL model is applicable to the measurement of credit losses on financial assets measured at amortized cost, including loan receivables, held-to-maturity debt securities, and reinsurance receivables. It also applies to off-balance sheet credit exposures not accounted for as insurance (such as loan commitments, standby letters of credit, financial guarantees, and other similar instruments) and net investments in leases recognized by a lessor. For public business entities that meet the definition of an SEC filer, the standard will be effective for fiscal years beginning after Dec. 15, 2019, including interim periods in those fiscal years. All entities may early adopt for fiscal years beginning after Dec. 15, 2018, including interim periods in those fiscal years. For debt securities with other-than-temporary impairment, the guidance will be applied prospectively. Existing purchased credit impaired (PCI) assets will be grandfathered and classified as purchased credit deteriorated (PCD) assets at the date of adoption. The asset will be grossed up for the allowance for expected credit losses for all PCD assets at the date of adoption and will continue to recognize the noncredit discount in interest income based on the yield of such assets as of the adoption date. Subsequent changes in expected credit losses will be recorded through the allowance. For all other assets within the scope of CECL, a cumulative-effect adjustment will be recognized in retained earnings as of the beginning of the first reporting period in which the guidance is effective. The Company has begun its implementation efforts by identifying key interpretive issues, assessing its processes and identifying the system requirements against the new guidance to determine what modifications may be required. While the Company is still evaluating the overall impact on the new standard on its consolidated financial statements, the Company expects the adoption may result in an increase to the allowance for loan losses balance. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement. The ASU was issued to improve the effectiveness of disclosures surrounding fair value measurements. The ASU removes numerous disclosures from Topic 820 including; transfers between level 1 and 2 of the fair value hierarchy, the policy for timing of transfers between levels, and the valuation process for level 3 fair value measurements. The ASU also modified and added disclosure requirements in regards to changes in unrealized gains and losses included in other comprehensive income, as well as the range and weighted average of unobservable inputs for level 3 fair value measurements. The ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. The guidance is not expected to have a significant impact on the Company's consolidated financial statements. |
Earnings Per Share of Common _2
Earnings Per Share of Common Stock (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share of Common Stock | |
Schedule of basic and diluted earnings per share of common stock | For the three months ended March 31, 2019 2018 (In thousands, except share and per share) Net income (loss) $ 277 $ (84) Less net income attributable to participating securities 4 — Net income (loss) available to common stockholders $ 273 $ (84) Weighted average common shares outstanding for basic earnings per common share 26,546,315 26,766,158 Add: dilutive effects of assumed exercises of stock options — — Weighted average common shares outstanding for diluted earnings per common share 26,546,315 26,766,158 Earnings (loss) per common share - basic $ 0.01 $ (0.00) Earnings (loss) per common share - diluted $ 0.01 $ (0.00) |
Securities (Tables)
Securities (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Securities | |
Summary of amortized cost and fair value of available-for-sale investment securities portfolios and corresponding amounts of unrealized gains and losses | Gross Gross Unrealized Unrealized Amortized Cost Gains Losses Fair Value (In thousands) March 31, 2019: Federal agency mortgage-backed securities $ 9,171 $ 83 $ (31) $ 9,223 Federal agency debt 5,320 — (26) 5,294 Total available-for-sale securities $ 14,491 $ 83 $ (57) $ 14,517 December 31, 2018: Federal agency mortgage-backed securities $ 9,575 $ 88 $ (155) $ 9,508 Federal agency debt 5,317 — (103) 5,214 Total available-for-sale securities $ 14,892 $ 88 $ (258) $ 14,722 |
Loans Receivable Held for Inv_2
Loans Receivable Held for Investment (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Loans Receivable Held for Investment | |
Schedule of loans receivable held for investment | March 31, 2019 December 31, 2018 (In thousands) Real estate: Single family $ 89,043 $ 91,835 Multi-family 245,551 231,870 Commercial real estate 6,890 5,802 Church 23,376 25,934 Construction 1,749 1,876 Commercial – other 234 226 Consumer 15 5 Gross loans receivable before deferred loan costs and premiums 366,858 357,548 Unamortized net deferred loan costs and premiums 1,086 937 Gross loans receivable 367,944 358,485 Allowance for loan losses (2,929) (2,929) Loans receivable, net $ 365,015 $ 355,556 |
Schedule of activity in the allowance for loan losses by loan type | Three Months Ended March 31, 2019 Real Estate Single Multi- Commercial Commercial family family real estate Church Construction - other Consumer Total (In thousands) Beginning balance $ 369 $ 1,880 $ 52 $ 603 $ 19 $ 6 $ — $ 2,929 Provision for (recapture of) loan losses (22) 110 10 (286) (1) (1) — (190) Recoveries — — — 190 — — — 190 Loans charged off — — — — — — — — Ending balance $ 347 $ 1,990 $ 62 $ 507 $ 18 $ 5 $ — $ 2,929 Three Months Ended March 31, 2018 Real Estate Single Multi- Commercial Commercial family family real estate Church Construction - other Consumer Total (In thousands) Beginning balance $ 594 $ 2,300 $ 71 $ 1,081 $ 17 $ 6 $ — $ 4,069 Provision for (recapture of) loan losses (6) 208 (6) (190) (6) — — — Recoveries — — — 114 — — — 114 Loans charged off — — — — — — — — Ending balance $ 588 $ 2,508 $ 65 $ 1,005 $ 11 $ 6 $ — $ 4,183 |
Schedule of allowance for loan losses and recorded investment in loans by type of loans and based on impairment method | March 31, 2019 Real Estate Single Multi- Commercial Commercial family family real estate Church Construction - other Consumer Total (In thousands) Allowance for loan losses: Ending allowance balance attributable to loans: Individually evaluated for impairment $ 38 $ — $ — $ 145 $ — $ 3 $ — $ 186 Collectively evaluated for impairment 309 1,990 62 362 18 2 — 2,743 Total ending allowance balance $ 347 $ 1,990 $ 62 $ 507 $ 18 $ 5 $ — $ 2,929 Loans: Loans individually evaluated for impairment $ 606 $ 321 $ — $ 4,181 $ — $ 63 $ — $ 5,171 Loans collectively evaluated for impairment 88,762 246,683 6,894 18,503 1,745 171 15 362,773 Total ending loans balance $ 89,368 $ 247,004 $ 6,894 $ 22,684 $ 1,745 $ 234 $ 15 $ 367,944 December 31, 2018 Real Estate Single Multi- Commercial Commercial family family real estate Church Construction - other Consumer Total (In thousands) Allowance for loan losses: Ending allowance balance attributable to loans: Individually evaluated for impairment $ 53 $ — $ — $ 170 $ — $ 4 $ — $ 227 Collectively evaluated for impairment 316 1,880 52 433 19 2 — 2,702 Total ending allowance balance $ 369 $ 1,880 $ 52 $ 603 $ 19 $ 6 $ — $ 2,929 Loans: Loans individually evaluated for impairment $ 610 $ 323 $ — $ 5,383 $ — $ 64 $ — $ 6,380 Loans collectively evaluated for impairment 91,567 232,986 5,800 19,713 1,872 162 5 352,105 Total ending loans balance $ 92,177 $ 233,309 $ 5,800 $ 25,096 $ 1,872 $ 226 $ 5 $ 358,485 |
Schedule of loans individually evaluated for impairment by loan type | March 31, 2019 December 31, 2018 Allowance Allowance Unpaid for Loan Unpaid for Loan Principal Recorded Losses Principal Recorded Losses Balance Investment Allocated Balance Investment Allocated (In thousands) With no related allowance recorded: Multi-family $ 321 $ 321 $ — $ 323 $ 323 $ — Church 3,492 2,165 — 4,666 2,803 — With an allowance recorded: Single family 605 606 38 610 610 53 Church 2,017 2,016 145 2,580 2,580 170 Commercial - other 63 63 3 64 64 4 Total $ 6,498 $ 5,171 $ 186 $ 8,243 $ 6,380 $ 227 |
Schedule of average of loans individually evaluated for impairment by loan type and related interest income | Three Months Ended March 31, 2019 Three Months Ended March 31, 2018 Cash Basis Cash Basis Average Interest Average Interest Recorded Income Recorded Income Investment Recognized Investment Recognized (In thousands) Single family $ 608 $ 8 $ 625 $ 8 Multi-family 322 6 332 6 Church 5,001 430 7,981 174 Commercial – other 64 1 65 1 Total $ 5,995 $ 445 $ 9,003 $ 189 |
Schedule of aging of the recorded investment in past due loans by loan type | March 31, 2019 Greater 30-59 60-89 than Days Days 90 Days Total Past Due Past Due Past Due Past Due Current Total (In thousands) Loans receivable held for investment: Single family $ — $ — $ 34 $ 34 $ 89,334 $ 89,368 Multi-family — — — — 247,004 247,004 Commercial real estate — — — — 6,894 6,894 Church 259 283 — 542 22,142 22,684 Construction — — — — 1,745 1,745 Commercial - other — — — — 234 234 Consumer — — — — 15 15 Total $ 259 $ 283 $ 34 $ 576 $ 367,368 $ 367,944 December 31, 2018 Greater 30-59 60-89 than Days Days 90 Days Total Past Due Past Due Past Due Past Due Current Total (In thousands) Loans receivable held for investment: Single family $ 35 $ — $ — $ 35 $ 92,142 $ 92,177 Multi-family — — — — 233,309 233,309 Commercial real estate — — — — 5,800 5,800 Church — — — — 25,096 25,096 Construction — — — — 1,872 1,872 Commercial - other — — — — 226 226 Consumer — — — — 5 5 Total $ 35 $ — $ — $ 35 $ 358,450 $ 358,485 |
Schedule of recorded investment in non-accrual loans by loan type | March 31, 2019 December 31, 2018 (In thousands) Loans receivable held for investment: Single-family residence $ 34 $ — Church 748 911 Total non-accrual loans $ 782 $ 911 |
Schedule of risk categories of loans by loan type | March 31, 2019 Pass Watch Special Mention Substandard Doubtful Loss (In thousands) Single family $ 89,324 $ — $ — $ 44 $ — $ — Multi-family 245,808 — 536 660 — — Commercial real estate 6,894 — — — — — Church 17,670 667 259 4,088 — — Construction 1,745 — — — — — Commercial - other 171 — — 63 — — Consumer 15 — — — — — Total $ 361,627 $ 667 $ 795 $ 4,855 $ — $ — December 31, 2018 Pass Watch Special Mention Substandard Doubtful Loss (In thousands) Single family $ 92,132 $ — $ 35 $ 10 $ — $ — Multi-family 232,642 — — 667 — — Commercial real estate 5,800 — — — — — Church 19,678 672 — 4,746 — — Construction 1,872 — — — — — Commercial - other 162 — — 64 — — Consumer 5 — — — — — Total $ 352,291 $ 672 $ 35 $ 5,487 $ — $ — |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases | |
Schedule of additional information related to operating leases | Additional information regarding our operating leases is summarized below as of or for the three months ended March 31, 2019 (dollars in thousands): Cash paid for amounts included in the measurement of lease liabilities for operating leases: $ 134 ROU assets obtained in exchange for lease liabilities $ 1,120 Weighted average remaining lease term in months 25 Weighted average discount rate 2.75 % |
Schedule of maturity of the bank's remaining lease liabilities | The future minimum payments for operating leases with remaining terms of one year or more as of March 31, 2019 were as follows (in thousands): Nine months ended December 31, 2019 $ 408 Year ended December 31, 2020 555 Year ended December 31, 2021 195 Total Future Minimum Lease Payments 1,158 Amounts Representing Interest (34) Present Value of Net Future Minimum Lease Payments $ 1,124 |
Fair Value (Tables)
Fair Value (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value | |
Summary of assets measured at fair value on a recurring basis | Fair Value Measurement Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Assets Inputs Inputs (Level 1) (Level 2) (Level 3) Total (In thousands) At March 31, 2019: Securities available-for-sale - federal agency mortgage-backed $ — $ 9,223 $ — $ 9,223 Securities available-for-sale - federal agency debt 1,988 3,306 — 5,294 At December 31, 2018: Securities available-for-sale - federal agency mortgage-backed $ — $ 9,508 $ — $ 9,508 Securities available-for-sale - federal agency debt 1,979 3,235 — 5,214 |
Schedule of carrying values of assets measured at fair value on non-recurring basis | March 31, 2019 December 31, 2018 (In thousands) Impaired loans carried at fair value of collateral $ 439 $ 591 Real estate owned 820 833 |
Schedule of valuation methodology and unobservable inputs for Level 3 assets measured at fair value on a nonrecurring basis | Valuation Weighted Technique(s) Unobservable Input(s) Range Average March 31, 2019: Impaired loans Third Party Adjustment for differences Appraisals between the comparable sales -3% to -1% -2.57% Real estate owned Third Party Adjustment for differences Appraisals between the comparable sales -11% -10.85% December 31, 2018: Impaired loans Third Party Adjustment for differences Appraisals between the comparable sales -3% to -1% -2.83% Real estate owned Third Party Adjustment for differences Appraisals between the comparable sales -11% -10.85% |
Schedule of carrying amounts and estimated fair values of financial instruments | Fair Value Measurements at March 31, 2019 Carrying Value Level 1 Level 2 Level 3 Total (In thousands) Financial Assets: Loans receivable held for sale $ 5,154 $ — $ 5,154 $ — $ 5,154 Loans receivable held for investment 365,015 — — 360,882 360,882 Financial Liabilities: Time Deposits $ 180,543 $ — $ 180,077 $ — $ 180,077 Federal Home Loan Bank advances 75,000 — 75,403 — 75,403 Junior subordinated debentures 5,100 — — 4,459 4,459 Fair Value Measurements at December 31, 2018 Carrying Value Level 1 Level 2 Level 3 Total (In thousands) Financial Assets: Loans receivable held for sale $ 6,231 $ — $ 6,270 $ — $ 6,270 Loans receivable held for investment 355,556 — — 354,792 354,792 Financial Liabilities: Time Deposits $ 172,564 $ — $ 171,725 $ — $ 171,725 Federal Home Loan Bank advances 70,000 — 69,933 — 69,933 Junior subordinated debentures 5,100 — — 4,481 4,481 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Stock-based Compensation | |
Summary of stock option activity | Three Months Ended Three Months Ended March 31, 2019 March 31, 2018 Weighted Weighted Average Average Number Exercise Number Exercise Outstanding Price Outstanding Price Outstanding at beginning of period 537,500 $ 2.19 537,500 $ 2.19 Granted during period — — — — Exercised during period — — — — Forfeited or expired during period (82,500) 4.89 — — Outstanding at end of period 455,000 $ 1.67 537,500 $ 2.19 Exercisable at end of period 185,000 $ 1.74 267,500 $ 2.71 |
Summary of options outstanding and exercisable | Outstanding Exercisable Weighted Average Weighted Weighted Remaining Average Aggregate Average Aggregate Number Contractual Exercise Intrinsic Number Exercise Intrinsic Grant Date Outstanding Life Price Value Outstanding Price Value January 21, 2010 5,000 0.81 years $ 6.00 5,000 $ 6.00 February 24, 2016 450,000 6.90 years $ 1.62 180,000 $ 1.62 455,000 6.83 years $ 1.67 $ — 185,000 $ 1.74 $ — |
ESOP Plan (Tables)
ESOP Plan (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
ESOP Plan | |
Schedule of shares held by the ESOP | March 31, 2019 December 31, 2018 (Dollars in thousands) Allocated to participants 1,047,389 1,036,809 Committed to be released 21,160 10,580 Suspense shares 624,873 646,033 Total ESOP shares 1,693,422 1,693,422 Fair value of unearned shares $ 890 $ 678 |
Regulatory Matters (Tables)
Regulatory Matters (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Regulatory Matters | |
Schedule of actual and required capital amounts and ratios | Minimum Required To Be Well Capitalized Under Prompt Minimum Capital Corrective Action Actual Requirements Provisions Amount Ratio Amount Ratio Amount Ratio (Dollars in thousands) March 31, 2019: Tier 1 (Leverage) $ 49,918 11.99 % $ 16,649 4.00 % $ 20,811 5.00 % Common Equity Tier 1 $ 49,918 19.40 % $ 18,730 4.50 % $ 16,724 6.50 % Tier 1 $ 49,918 19.40 % $ 24,973 6.00 % $ 20,584 8.00 % Total Capital $ 52,868 20.55 % $ 33,298 8.00 % $ 25,730 10.00 % December 31, 2018: Tier 1 (Leverage) $ 49,433 12.03 % $ 16,439 4.00 % $ 20,549 5.00 % Common Equity Tier 1 $ 49,433 19.32 % $ 18,494 4.50 % $ 16,634 6.50 % Tier 1 $ 49,433 19.32 % $ 24,659 6.00 % $ 20,472 8.00 % Total Capital $ 52,417 20.48 % $ 32,879 8.00 % $ 25,590 10.00 % |
Basis of Financial Statement _3
Basis of Financial Statement Presentation (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2017 | Jan. 01, 2019 | |
Basis of Financial Statement Presentation | |||
Election of practical expedients package | true | ||
Operating lease, ROU asset | $ 1,100 | ||
Operating lease, ROU asset, Statement of Financial Position | us-gaap:PropertyPlantAndEquipmentNet | ||
Operating lease liability | $ 1,124 | ||
Operating lease, liability, Statement of Financial Position | us-gaap:AccruedLiabilitiesAndOtherLiabilities | ||
ASU 2016-02 | Adjustment | |||
Basis of Financial Statement Presentation | |||
Operating lease, ROU asset | $ 1,200 | ||
Operating lease, ROU asset, Statement of Financial Position | us-gaap:PropertyPlantAndEquipmentNet | ||
Operating lease liability | $ 1,200 | ||
Operating lease, liability, Statement of Financial Position | us-gaap:AccruedLiabilitiesAndOtherLiabilities | ||
ASU 2018-02 | |||
Basis of Financial Statement Presentation | |||
Reclassification from accumulated other comprehensive loss to retained earnings | $ 66 |
Earnings Per Share of Common _3
Earnings Per Share of Common Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Earnings Per Share of Common Stock | ||
Net income (loss) | $ 277 | $ (84) |
Less net income attributable to participating securities | 4 | |
Net income (loss) available to common stockholders | $ 273 | $ (84) |
Weighted average common shares outstanding for basic earnings per common share | 26,546,315 | 26,766,158 |
Weighted average common shares outstanding for diluted earnings per common share | 26,546,315 | 26,766,158 |
Earnings (loss) per common share-basic (in dollars per share) | $ 0.01 | $ 0 |
Earnings (loss) per common share-diluted (in dollars per share) | $ 0.01 | $ 0 |
Stock Options | ||
Earnings Per Share of Common Stock | ||
Anti-dilutive stock not considered in computing diluted earnings per common share | 455,000 | 537,500 |
Securities (Details)
Securities (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019USD ($)security | Dec. 31, 2018USD ($)security | |
Securities | ||
Amortized Cost | $ 14,491 | $ 14,892 |
Gross Unrealized Gains | 83 | 88 |
Gross Unrealized Losses | (57) | (258) |
Fair Value | 14,517 | 14,722 |
Securities pledged to secure public deposits | $ 0 | $ 0 |
Securities pledged to secure public deposits | us-gaap:AssetPledgedAsCollateralMember | us-gaap:AssetPledgedAsCollateralMember |
Securities of any one issuer, other than U.S. Government, greater than 10% of stockholders' equity | $ 0 | $ 0 |
Number of securities held with unrealized losses | security | 8 | 10 |
Federal agency mortgage-backed securities | ||
Securities | ||
Amortized Cost | $ 9,171 | $ 9,575 |
Gross Unrealized Gains | 83 | 88 |
Gross Unrealized Losses | (31) | (155) |
Fair Value | $ 9,223 | 9,508 |
Number of securities held | security | 22 | |
Estimated remaining term | 4 years 4 months 24 days | |
Federal agency debt | ||
Securities | ||
Amortized Cost | $ 5,320 | 5,317 |
Gross Unrealized Losses | (26) | (103) |
Fair Value | $ 5,294 | $ 5,214 |
Number of securities held | security | 3 | |
Estimated remaining term | 3 years 7 months 6 days |
Loans Receivable Held for Sale
Loans Receivable Held for Sale (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Loans Receivable Held for Sale | |||
Loans receivable held for sale | $ 5,154 | $ 6,231 | |
Transfers of loans receivable held for sale to loans receivable held for investment | 1,064 | $ 16,871 | |
Loan sales | 0 | 0 | |
Loan repayments | 24 | $ 71 | 71 |
Multi-family | |||
Loans Receivable Held for Sale | |||
Loans receivable held for sale | 5,200 | 6,200 | |
Transfers of loans receivable held for sale to loans receivable held for investment | $ 1,100 | $ 16,900 |
Loans Receivable Held for Inv_3
Loans Receivable Held for Investment - Summary (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Loans Receivable Held for Investment | ||||
Gross loans receivable before deferred loan costs and premiums | $ 366,858 | $ 357,548 | ||
Unamortized net deferred loan costs and premiums | 1,086 | 937 | ||
Gross loans receivable after deferred loan costs and premiums | 367,944 | 358,485 | ||
Allowance for loan losses | (2,929) | (2,929) | $ (4,183) | $ (4,069) |
Loans receivable, net | 365,015 | 355,556 | ||
Single family | ||||
Loans Receivable Held for Investment | ||||
Gross loans receivable before deferred loan costs and premiums | 89,043 | 91,835 | ||
Gross loans receivable after deferred loan costs and premiums | 89,368 | 92,177 | ||
Allowance for loan losses | (347) | (369) | (588) | (594) |
Multi-family | ||||
Loans Receivable Held for Investment | ||||
Gross loans receivable before deferred loan costs and premiums | 245,551 | 231,870 | ||
Gross loans receivable after deferred loan costs and premiums | 247,004 | 233,309 | ||
Allowance for loan losses | (1,990) | (1,880) | (2,508) | (2,300) |
Commercial real estate | ||||
Loans Receivable Held for Investment | ||||
Gross loans receivable before deferred loan costs and premiums | 6,890 | 5,802 | ||
Gross loans receivable after deferred loan costs and premiums | 6,894 | 5,800 | ||
Allowance for loan losses | (62) | (52) | (65) | (71) |
Church | ||||
Loans Receivable Held for Investment | ||||
Gross loans receivable before deferred loan costs and premiums | 23,376 | 25,934 | ||
Gross loans receivable after deferred loan costs and premiums | 22,684 | 25,096 | ||
Allowance for loan losses | (507) | (603) | (1,005) | (1,081) |
Construction | ||||
Loans Receivable Held for Investment | ||||
Gross loans receivable before deferred loan costs and premiums | 1,749 | 1,876 | ||
Gross loans receivable after deferred loan costs and premiums | 1,745 | 1,872 | ||
Allowance for loan losses | (18) | (19) | (11) | (17) |
Commercial - other | ||||
Loans Receivable Held for Investment | ||||
Gross loans receivable before deferred loan costs and premiums | 234 | 226 | ||
Gross loans receivable after deferred loan costs and premiums | 234 | 226 | ||
Allowance for loan losses | (5) | (6) | $ (6) | $ (6) |
Consumer | ||||
Loans Receivable Held for Investment | ||||
Gross loans receivable before deferred loan costs and premiums | 15 | 5 | ||
Gross loans receivable after deferred loan costs and premiums | $ 15 | $ 5 |
Loans Receivable Held for Inv_4
Loans Receivable Held for Investment - Activity in the Allowance for Loan Losses by Loan Type (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Allowance for loan losses: | ||
Beginning balance | $ 2,929 | $ 4,069 |
Provision for (recapture of) loan losses | (190) | |
Recoveries | 190 | 114 |
Ending balance | 2,929 | 4,183 |
Single family | ||
Allowance for loan losses: | ||
Beginning balance | 369 | 594 |
Provision for (recapture of) loan losses | (22) | (6) |
Ending balance | 347 | 588 |
Multi-family | ||
Allowance for loan losses: | ||
Beginning balance | 1,880 | 2,300 |
Provision for (recapture of) loan losses | 110 | 208 |
Ending balance | 1,990 | 2,508 |
Commercial real estate | ||
Allowance for loan losses: | ||
Beginning balance | 52 | 71 |
Provision for (recapture of) loan losses | 10 | (6) |
Ending balance | 62 | 65 |
Church | ||
Allowance for loan losses: | ||
Beginning balance | 603 | 1,081 |
Provision for (recapture of) loan losses | (286) | (190) |
Recoveries | 190 | 114 |
Ending balance | 507 | 1,005 |
Construction | ||
Allowance for loan losses: | ||
Beginning balance | 19 | 17 |
Provision for (recapture of) loan losses | (1) | (6) |
Ending balance | 18 | 11 |
Commercial - other | ||
Allowance for loan losses: | ||
Beginning balance | 6 | 6 |
Provision for (recapture of) loan losses | (1) | |
Ending balance | $ 5 | $ 6 |
Loans Receivable Held for Inv_5
Loans Receivable Held for Investment - Allowance for Loan Losses and Recorded Investment in Loans by Type of Loans and Based on Impairment Method (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Ending allowance balance attributable to loans: | ||||
Individually evaluated for impairment | $ 186 | $ 227 | ||
Collectively evaluated for impairment | 2,743 | 2,702 | ||
Total ending allowance balance | 2,929 | 2,929 | $ 4,183 | $ 4,069 |
Loans: | ||||
Loans individually evaluated for impairment | 5,171 | 6,380 | ||
Loans collectively evaluated for impairment | 362,773 | 352,105 | ||
Gross loans receivable after deferred loan costs and premiums | 367,944 | 358,485 | ||
Single family | ||||
Ending allowance balance attributable to loans: | ||||
Individually evaluated for impairment | 38 | 53 | ||
Collectively evaluated for impairment | 309 | 316 | ||
Total ending allowance balance | 347 | 369 | 588 | 594 |
Loans: | ||||
Loans individually evaluated for impairment | 606 | 610 | ||
Loans collectively evaluated for impairment | 88,762 | 91,567 | ||
Gross loans receivable after deferred loan costs and premiums | 89,368 | 92,177 | ||
Multi-family | ||||
Ending allowance balance attributable to loans: | ||||
Collectively evaluated for impairment | 1,990 | 1,880 | ||
Total ending allowance balance | 1,990 | 1,880 | 2,508 | 2,300 |
Loans: | ||||
Loans individually evaluated for impairment | 321 | 323 | ||
Loans collectively evaluated for impairment | 246,683 | 232,986 | ||
Gross loans receivable after deferred loan costs and premiums | 247,004 | 233,309 | ||
Commercial real estate | ||||
Ending allowance balance attributable to loans: | ||||
Collectively evaluated for impairment | 62 | 52 | ||
Total ending allowance balance | 62 | 52 | 65 | 71 |
Loans: | ||||
Loans collectively evaluated for impairment | 6,894 | 5,800 | ||
Gross loans receivable after deferred loan costs and premiums | 6,894 | 5,800 | ||
Church | ||||
Ending allowance balance attributable to loans: | ||||
Individually evaluated for impairment | 145 | 170 | ||
Collectively evaluated for impairment | 362 | 433 | ||
Total ending allowance balance | 507 | 603 | 1,005 | 1,081 |
Loans: | ||||
Loans individually evaluated for impairment | 4,181 | 5,383 | ||
Loans collectively evaluated for impairment | 18,503 | 19,713 | ||
Gross loans receivable after deferred loan costs and premiums | 22,684 | 25,096 | ||
Construction | ||||
Ending allowance balance attributable to loans: | ||||
Collectively evaluated for impairment | 18 | 19 | ||
Total ending allowance balance | 18 | 19 | 11 | 17 |
Loans: | ||||
Loans collectively evaluated for impairment | 1,745 | 1,872 | ||
Gross loans receivable after deferred loan costs and premiums | 1,745 | 1,872 | ||
Commercial - other | ||||
Ending allowance balance attributable to loans: | ||||
Individually evaluated for impairment | 3 | 4 | ||
Collectively evaluated for impairment | 2 | 2 | ||
Total ending allowance balance | 5 | 6 | $ 6 | $ 6 |
Loans: | ||||
Loans individually evaluated for impairment | 63 | 64 | ||
Loans collectively evaluated for impairment | 171 | 162 | ||
Gross loans receivable after deferred loan costs and premiums | 234 | 226 | ||
Consumer | ||||
Loans: | ||||
Loans collectively evaluated for impairment | 15 | 5 | ||
Gross loans receivable after deferred loan costs and premiums | $ 15 | $ 5 |
Loans Receivable Held for Inv_6
Loans Receivable Held for Investment - Loans Individually Evaluated for Impairment by Loan Type (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Impaired loans | ||
Unpaid Principal Balance | $ 6,498 | $ 8,243 |
Recorded Investment | 5,171 | 6,380 |
Allowance for Loan Losses Allocated, With an allowance recorded | 186 | 227 |
Single family | ||
Impaired loans | ||
Unpaid Principal Balance, With an allowance recorded | 605 | 610 |
Recorded Investment, With an allowance recorded | 606 | 610 |
Allowance for Loan Losses Allocated, With an allowance recorded | 38 | 53 |
Multi-family | ||
Impaired loans | ||
Unpaid Principal Balance, With no related allowance recorded | 321 | 323 |
Recorded Investment, With no related allowance recorded | 321 | 323 |
Church | ||
Impaired loans | ||
Unpaid Principal Balance, With no related allowance recorded | 3,492 | 4,666 |
Unpaid Principal Balance, With an allowance recorded | 2,017 | 2,580 |
Recorded Investment, With no related allowance recorded | 2,165 | 2,803 |
Recorded Investment, With an allowance recorded | 2,016 | 2,580 |
Allowance for Loan Losses Allocated, With an allowance recorded | 145 | 170 |
Commercial - other | ||
Impaired loans | ||
Unpaid Principal Balance, With an allowance recorded | 63 | 64 |
Recorded Investment, With an allowance recorded | 63 | 64 |
Allowance for Loan Losses Allocated, With an allowance recorded | $ 3 | $ 4 |
Loans Receivable Held for Inv_7
Loans Receivable Held for Investment - Average of Loans Individually Evaluated for Impairment by Loan Type and Related Interest Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Impaired loans | ||
Average Recorded Investment | $ 5,995 | $ 9,003 |
Cash Basis Interest Income Recognized | 445 | 189 |
Foregone interest income if impaired loans had performed according to terms | 40 | 86 |
Single family | ||
Impaired loans | ||
Average Recorded Investment | 608 | 625 |
Cash Basis Interest Income Recognized | 8 | 8 |
Multi-family | ||
Impaired loans | ||
Average Recorded Investment | 322 | 332 |
Cash Basis Interest Income Recognized | 6 | 6 |
Church | ||
Impaired loans | ||
Average Recorded Investment | 5,001 | 7,981 |
Cash Basis Interest Income Recognized | 430 | 174 |
Commercial - other | ||
Impaired loans | ||
Average Recorded Investment | 64 | 65 |
Cash Basis Interest Income Recognized | $ 1 | $ 1 |
Loans Receivable Held for Inv_8
Loans Receivable Held for Investment - Aging of Recorded Investment in Past Due Loans by Loan Type (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Past due receivable | ||
Total Past Due | $ 576 | $ 35 |
Current | 367,368 | 358,450 |
Gross loans receivable after deferred loan costs and premiums | 367,944 | 358,485 |
30-59 Days Past Due | ||
Past due receivable | ||
Total Past Due | 259 | 35 |
60-89 Days Past Due | ||
Past due receivable | ||
Total Past Due | 283 | |
Greater than 90 Days Past Due | ||
Past due receivable | ||
Total Past Due | 34 | |
Single family | ||
Past due receivable | ||
Total Past Due | 34 | 35 |
Current | 89,334 | 92,142 |
Gross loans receivable after deferred loan costs and premiums | 89,368 | 92,177 |
Single family | 30-59 Days Past Due | ||
Past due receivable | ||
Total Past Due | 35 | |
Single family | Greater than 90 Days Past Due | ||
Past due receivable | ||
Total Past Due | 34 | |
Multi-family | ||
Past due receivable | ||
Current | 247,004 | 233,309 |
Gross loans receivable after deferred loan costs and premiums | 247,004 | 233,309 |
Commercial real estate | ||
Past due receivable | ||
Current | 6,894 | 5,800 |
Gross loans receivable after deferred loan costs and premiums | 6,894 | 5,800 |
Church | ||
Past due receivable | ||
Total Past Due | 542 | |
Current | 22,142 | 25,096 |
Gross loans receivable after deferred loan costs and premiums | 22,684 | 25,096 |
Church | 30-59 Days Past Due | ||
Past due receivable | ||
Total Past Due | 259 | |
Church | 60-89 Days Past Due | ||
Past due receivable | ||
Total Past Due | 283 | |
Construction | ||
Past due receivable | ||
Current | 1,745 | 1,872 |
Gross loans receivable after deferred loan costs and premiums | 1,745 | 1,872 |
Commercial - other | ||
Past due receivable | ||
Current | 234 | 226 |
Gross loans receivable after deferred loan costs and premiums | 234 | 226 |
Consumer | ||
Past due receivable | ||
Current | 15 | 5 |
Gross loans receivable after deferred loan costs and premiums | $ 15 | $ 5 |
Loans Receivable Held for Inv_9
Loans Receivable Held for Investment - Recorded Investment in Non-accrual Loans by Loan Type (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Investment in non-accrual loans by type of loans | ||
Total non-accrual loans | $ 782 | $ 911 |
Loans 90 days or more delinquent that were accruing interest | 0 | 0 |
Church | ||
Investment in non-accrual loans by type of loans | ||
Total non-accrual loans | $ 748 | $ 911 |
Loans Receivable Held for In_10
Loans Receivable Held for Investment - Troubled Debt Restructurings (Details) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019USD ($)loan | Dec. 31, 2018USD ($)loan | |
Troubled debt restructuring | ||
Loans classified as Troubled Debt Restructurings | $ 5,200 | $ 6,400 |
Specific reserves allocated to TDRs | $ 186 | 227 |
Timely payment period for return to accrual status | 6 months | |
Commitments to lend additional amounts to customers with TDRs | $ 0 | $ 0 |
Number of loans modified | loan | 0 | 0 |
Non-accrual status | ||
Troubled debt restructuring | ||
Loans classified as Troubled Debt Restructurings | $ 748,000 | $ 591 |
Accrual status | ||
Troubled debt restructuring | ||
Loans classified as Troubled Debt Restructurings | $ 4,400 | $ 5,800 |
Loans Receivable Held for In_11
Loans Receivable Held for Investment - Risk Category of Loans by Loan Type (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Credit Quality Indicators | ||
Loans receivable | $ 367,944 | $ 358,485 |
Single family | ||
Credit Quality Indicators | ||
Loans receivable | 89,368 | 92,177 |
Multi-family | ||
Credit Quality Indicators | ||
Loans receivable | 247,004 | 233,309 |
Commercial real estate | ||
Credit Quality Indicators | ||
Loans receivable | 6,894 | 5,800 |
Church | ||
Credit Quality Indicators | ||
Loans receivable | 22,684 | 25,096 |
Construction | ||
Credit Quality Indicators | ||
Loans receivable | 1,745 | 1,872 |
Commercial - other | ||
Credit Quality Indicators | ||
Loans receivable | 234 | 226 |
Consumer | ||
Credit Quality Indicators | ||
Loans receivable | 15 | 5 |
Pass | ||
Credit Quality Indicators | ||
Loans receivable | 361,627 | 352,291 |
Pass | Single family | ||
Credit Quality Indicators | ||
Loans receivable | 89,324 | 92,132 |
Pass | Multi-family | ||
Credit Quality Indicators | ||
Loans receivable | 245,808 | 232,642 |
Pass | Commercial real estate | ||
Credit Quality Indicators | ||
Loans receivable | 6,894 | 5,800 |
Pass | Church | ||
Credit Quality Indicators | ||
Loans receivable | 17,670 | 19,678 |
Pass | Construction | ||
Credit Quality Indicators | ||
Loans receivable | 1,745 | 1,872 |
Pass | Commercial - other | ||
Credit Quality Indicators | ||
Loans receivable | 171 | 162 |
Pass | Consumer | ||
Credit Quality Indicators | ||
Loans receivable | 15 | 5 |
Watch | ||
Credit Quality Indicators | ||
Loans receivable | 667 | 672 |
Watch | Church | ||
Credit Quality Indicators | ||
Loans receivable | 667 | 672 |
Special Mention | ||
Credit Quality Indicators | ||
Loans receivable | 795 | 35 |
Special Mention | Single family | ||
Credit Quality Indicators | ||
Loans receivable | 35 | |
Special Mention | Multi-family | ||
Credit Quality Indicators | ||
Loans receivable | 536 | |
Special Mention | Church | ||
Credit Quality Indicators | ||
Loans receivable | 259 | |
Substandard | ||
Credit Quality Indicators | ||
Loans receivable | 4,855 | 5,487 |
Substandard | Single family | ||
Credit Quality Indicators | ||
Loans receivable | 44 | 10 |
Substandard | Multi-family | ||
Credit Quality Indicators | ||
Loans receivable | 660 | 667 |
Substandard | Church | ||
Credit Quality Indicators | ||
Loans receivable | 4,088 | 4,746 |
Substandard | Commercial - other | ||
Credit Quality Indicators | ||
Loans receivable | $ 63 | $ 64 |
Leases - Summary (Details)
Leases - Summary (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019USD ($)item | Mar. 31, 2018USD ($) | |
Leases | ||
Number of options to extend | item | 1 | |
Extension term | 5 years | |
Option to extend lease term | true | |
Operating lease, Right-of-use asset | $ 1,100 | |
Operating lease, ROU asset, Statement of Financial Position | us-gaap:PropertyPlantAndEquipmentNet | |
Operating lease, liability | $ 1,124 | |
Operating lease, liability, Statement of Financial Position | us-gaap:AccruedLiabilitiesAndOtherLiabilities | |
Lease expense | $ 123 | $ 121 |
Cash paid for amounts included in the measurement of lease liabilities for operating leases: | 134 | |
ROU assets obtained in exchange for lease liabilities | $ 1,120 | |
Weighted average remaining lease term in months | 25 years | |
Weighted average discount rate | 2.75% |
Leases - Future Minimum Payment
Leases - Future Minimum Payments (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Schedule of maturity of the Bank's remaining lease liabilities | |
Nine months ended December 31, 2019 | $ 408 |
Year ended December 31, 2020 | 555 |
Year ended December 31, 2021 | 195 |
Total Future Minimum Lease Payments | 1,158 |
Amounts Representing Interest | (34) |
Present Value of Net Future Minimum Lease Payments | $ 1,124 |
Junior Subordinated Debentures
Junior Subordinated Debentures (Details) - USD ($) $ in Thousands | Oct. 16, 2014 | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 17, 2004 |
Junior Subordinated Debentures | ||||
Junior subordinated debentures | $ 5,100 | $ 5,100 | ||
Floating Rate Junior Subordinated Debentures | ||||
Junior Subordinated Debentures | ||||
Junior subordinated debentures | $ 5,100 | |||
Effective interest rate on debentures (as a percent) | 5.17% | |||
Payment of principal amount at face value required to extend maturity | $ 900 | |||
Floating Rate Junior Subordinated Debentures | 3-month LIBOR | ||||
Junior Subordinated Debentures | ||||
Debt instrument interest rate description | 3-Month LIBOR | |||
Basis spread (as a percent) | 2.54% | |||
Private Placement | Floating Rate Junior Subordinated Debentures | ||||
Junior Subordinated Debentures | ||||
Junior subordinated debentures | $ 6,000 |
Fair Value - Assets Measured at
Fair Value - Assets Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Fair Value Pending Completion | ||
Transfer between level 1 and level 2 | $ 0 | $ 0 |
Transfer between level 2 and level 1 | 0 | 0 |
Transfer into level 3 | 0 | 0 |
Transfer out of level 3 | 0 | 0 |
Recurring Basis | Federal agency mortgage-backed securities | ||
Fair Value Pending Completion | ||
Securities available-for-sale, at fair value | 9,223 | 9,508 |
Recurring Basis | Federal agency debt | ||
Fair Value Pending Completion | ||
Securities available-for-sale, at fair value | 5,294 | 5,214 |
Recurring Basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | Federal agency debt | ||
Fair Value Pending Completion | ||
Securities available-for-sale, at fair value | 1,988 | 1,979 |
Recurring Basis | Significant Other Observable Inputs (Level 2) | Federal agency mortgage-backed securities | ||
Fair Value Pending Completion | ||
Securities available-for-sale, at fair value | 9,223 | 9,508 |
Recurring Basis | Significant Other Observable Inputs (Level 2) | Federal agency debt | ||
Fair Value Pending Completion | ||
Securities available-for-sale, at fair value | $ 3,306 | $ 3,235 |
Fair Value - Assets Measured _2
Fair Value - Assets Measured at Fair Value on Non-recurring Basis (Details) - Non-Recurring Basis - Significant Unobservable Inputs (Level 3) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Impaired loans carried at fair value of collateral | ||
Fair Value Pending Completion | ||
Assets, fair value | $ 439 | $ 591 |
Real estate owned | ||
Fair Value Pending Completion | ||
Assets, fair value | $ 820 | $ 833 |
Fair Value - Valuation Methodol
Fair Value - Valuation Methodology and Unobservable Inputs (Details) - Non-Recurring Basis - Significant Unobservable Inputs (Level 3) - item | Mar. 31, 2019 | Dec. 31, 2018 |
Impaired loans carried at fair value of collateral | Minimum | ||
Fair Value Pending Completion | ||
Adjustment for differences between the comparable sales (as a percent) | (3) | (3) |
Impaired loans carried at fair value of collateral | Maximum | ||
Fair Value Pending Completion | ||
Adjustment for differences between the comparable sales (as a percent) | (1) | (1) |
Impaired loans carried at fair value of collateral | Weighted Average | ||
Fair Value Pending Completion | ||
Adjustment for differences between the comparable sales (as a percent) | (2.57) | (2.83) |
Real estate owned | ||
Fair Value Pending Completion | ||
Adjustment for differences between the comparable sales (as a percent) | (11) | (11) |
Real estate owned | Weighted Average | ||
Fair Value Pending Completion | ||
Adjustment for differences between the comparable sales (as a percent) | (10.85) | (10.85) |
Fair Value - Fair Values of Fin
Fair Value - Fair Values of Financial Instruments (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Carrying Value | ||
Financial Assets: | ||
Loans receivable held for sale | $ 5,154 | $ 6,231 |
Loans receivable held for investment | 365,015 | 355,556 |
Financial Liabilities: | ||
Time Deposits | 180,543 | 172,564 |
Federal Home Loan Bank advances | 75,000 | 70,000 |
Junior subordinated debentures | 5,100 | 5,100 |
Fair Value | ||
Financial Assets: | ||
Loans receivable held for sale | 5,154 | 6,270 |
Loans receivable held for investment | 360,882 | 354,792 |
Financial Liabilities: | ||
Time Deposits | 180,077 | 171,725 |
Federal Home Loan Bank advances | 75,403 | 69,933 |
Junior subordinated debentures | 4,459 | 4,481 |
Significant Other Observable Inputs (Level 2) | Fair Value | ||
Financial Assets: | ||
Loans receivable held for sale | 5,154 | 6,270 |
Financial Liabilities: | ||
Time Deposits | 180,077 | 171,725 |
Federal Home Loan Bank advances | 75,403 | 69,933 |
Significant Unobservable Inputs (Level 3) | Fair Value | ||
Financial Assets: | ||
Loans receivable held for investment | 360,882 | 354,792 |
Financial Liabilities: | ||
Junior subordinated debentures | $ 4,459 | $ 4,481 |
Stock-based Compensation - Summ
Stock-based Compensation - Summary of plans (Details) - USD ($) $ in Thousands | Jul. 25, 2018 | Feb. 28, 2019 | Jan. 31, 2019 | Feb. 28, 2018 | Jan. 31, 2018 | Apr. 30, 2017 | Mar. 31, 2016 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Jul. 24, 2018 |
Stock-based Compensation | |||||||||||
Stock based compensation expense related to shares issued for services | $ 52 | $ 45 | |||||||||
2008 LTIP | |||||||||||
Stock-based Compensation | |||||||||||
Shares authorized to be granted under stock compensation plan | 2,000,000 | ||||||||||
2008 LTIP | Cash-settled restricted stock units | |||||||||||
Stock-based Compensation | |||||||||||
Stock based compensation expense (reversal of expense) | 92 | 32 | |||||||||
2008 LTIP | Chief Executive Officer | Restricted stock | |||||||||||
Stock-based Compensation | |||||||||||
Restricted stock award (in shares) | 120,483 | ||||||||||
Stock based compensation expense (reversal of expense) | 3 | 26 | |||||||||
2008 LTIP | Chief Executive Officer | Restricted stock | Two-year period | |||||||||||
Stock-based Compensation | |||||||||||
Restricted stock award (in shares) | 100,000 | ||||||||||
Vesting period of stock award | 2 years | ||||||||||
2008 LTIP | Chief Executive Officer | Restricted stock | Three-year period | |||||||||||
Stock-based Compensation | |||||||||||
Restricted stock award (in shares) | 20,483 | ||||||||||
Vesting period of stock award | 3 years | ||||||||||
2008 LTIP | Chief Executive Officer | Cash-settled restricted stock units | Two-year period | |||||||||||
Stock-based Compensation | |||||||||||
Restricted stock award (in shares) | 97,195 | 129,270 | |||||||||
Vesting period of stock award | 2 years | 2 years | |||||||||
2018 LTIP | |||||||||||
Stock-based Compensation | |||||||||||
Shares authorized to be granted under stock compensation plan | 1,293,109 | ||||||||||
Contractual term of option awards | 10 years | ||||||||||
2018 LTIP | Restricted stock | |||||||||||
Stock-based Compensation | |||||||||||
Unrecognized compensation cost, restricted stock | $ 505 | ||||||||||
Period for recognizing unrecognized compensation cost | 1 year 11 months 1 day | ||||||||||
2018 LTIP | Stock Options | |||||||||||
Stock-based Compensation | |||||||||||
Stock based compensation expense (reversal of expense) | $ 9 | $ 9 | |||||||||
Period for recognizing unrecognized compensation cost | 1 year 10 months 24 days | ||||||||||
Number of stock options granted (in shares) | 0 | 0 | |||||||||
2018 LTIP | Employees | Restricted stock | |||||||||||
Stock-based Compensation | |||||||||||
Stock based compensation expense (reversal of expense) | $ 22 | ||||||||||
2018 LTIP | Employees | Restricted stock | Two-year period | |||||||||||
Stock-based Compensation | |||||||||||
Restricted stock award (in shares) | 428,796 | ||||||||||
Vesting period of stock award | 2 years | ||||||||||
2018 LTIP | Directors | Common Stock | |||||||||||
Stock-based Compensation | |||||||||||
Shares issued for services | 42,168 | 18,906 | |||||||||
Stock based compensation expense related to shares issued for services | $ 52 | $ 45 |
Stock-based Compensation - Stoc
Stock-based Compensation - Stock Option Activity (Details) - 2018 LTIP - Stock Options - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Number Outstanding | ||
Outstanding at beginning of period (in shares) | 537,500 | 537,500 |
Granted during period (in shares) | 0 | 0 |
Exercised during period (in shares) | 0 | 0 |
Forfeited or expired during period (in shares) | (82,500) | 0 |
Outstanding at end of period (in shares) | 455,000 | 537,500 |
Exercisable at end of period (in shares) | 185,000 | 267,500 |
Weighted Average Exercise Price | ||
Outstanding at beginning of period (in dollars per share) | $ 2.19 | $ 2.19 |
Forfeited or expired during period (in dollars per share) | 4.89 | |
Outstanding at end of period (in dollars per share) | 1.67 | 2.19 |
Exercisable at end of period (in dollars per share) | $ 1.74 | $ 2.71 |
Additional disclosures | ||
Stock based compensation expense (reversal of expense) | $ 9 | $ 9 |
Unrecognized compensation cost, options | $ 74 | |
Period for recognizing unrecognized compensation cost | 1 year 10 months 24 days |
Stock-based Compensation - Opti
Stock-based Compensation - Options Outstanding and Exercisable (Details) - 2008 LTIP - Stock Options | 3 Months Ended |
Mar. 31, 2019$ / sharesshares | |
Outstanding | |
Number Outstanding | shares | 455,000 |
Weighted Average Remaining Contractual Life | 6 years 9 months 29 days |
Weighted Average Exercise Price | $ / shares | $ 1.67 |
Exercisable | |
Number Outstanding | shares | 185,000 |
Weighted Average Exercise Price | $ / shares | $ 1.74 |
Grant Date January 21, 2010 | |
Outstanding | |
Number Outstanding | shares | 5,000 |
Weighted Average Remaining Contractual Life | 9 months 22 days |
Weighted Average Exercise Price | $ / shares | $ 6 |
Exercisable | |
Number Outstanding | shares | 5,000 |
Weighted Average Exercise Price | $ / shares | $ 6 |
Grant Date February 24, 2016 | |
Outstanding | |
Number Outstanding | shares | 450,000 |
Weighted Average Remaining Contractual Life | 6 years 10 months 24 days |
Weighted Average Exercise Price | $ / shares | $ 1.62 |
Exercisable | |
Number Outstanding | shares | 180,000 |
Weighted Average Exercise Price | $ / shares | $ 1.62 |
ESOP Plan (Details)
ESOP Plan (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2016 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
ESOP Plan | |||||
Number of common stock purchased by ESOP (in shares) | 1,493,679 | ||||
Purchase price of common stock | $ 1.59 | ||||
Total cost of shares purchased by ESOP | $ 2,400 | ||||
Loan to ESOP | $ 1,200 | ||||
Term of ESOP loan (in years) | 20 years | ||||
Compensation expense | $ 14 | $ 25 | |||
Summary of shares held by the ESOP | |||||
Allocated to participants | 1,047,389 | 1,036,809 | |||
Committed to be released | 21,160 | 10,580 | |||
Suspense shares | 624,873 | 646,033 | |||
Total ESOP shares | 1,693,422 | 1,693,422 | |||
Fair value of unearned shares | $ 890 | $ 678 | |||
Shares released for allocation | 43,009 | 40,126 | |||
Unearned ESOP shares | $ 1,010 | $ 1,027 |
Regulatory Matters (Details)
Regulatory Matters (Details) | Mar. 31, 2019 | Dec. 31, 2018 |
Regulatory Matters | ||
Common Equity Tier 1 required for capital adequacy purposes, ratio (as a percent) | 4.50% | 4.50% |
Tier 1 required for capital adequacy purposes, ratio (as a percent) | 6.00% | 6.00% |
Total capital required for capital adequacy purposes, ratio (as a percent) | 8.00% | 8.00% |
Leverage required for capital adequacy purposes, ratio (as a percent) | 4.00% | 4.00% |
Conservation Buffer Rule Starting January 2016 | ||
Regulatory Matters | ||
Capital conservation buffer annual increase (as a percent) | 0.625% | |
Conservation Buffer Rule Subsequent to 2016 | ||
Regulatory Matters | ||
Capital conservation buffer annual increase (as a percent) | 0.625% | |
Maximum | Conservation Buffer Rule | ||
Regulatory Matters | ||
Capital conservation buffer (as a percent) | 2.50% |
Regulatory Matters - Schedule o
Regulatory Matters - Schedule of Actual and Required Capital Amounts and Ratios (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Regulatory Matters | ||
Tier-1 Leverage | $ 49,918 | $ 49,433 |
Tier 1 Leverage, ratio (as a percent) | 11.99% | 12.03% |
Common Equity Tier 1 | $ 49,918 | $ 49,433 |
Common Equity Tier 1, ratio (as a percent) | 19.40% | 19.32% |
Tier 1 | $ 49,918 | $ 49,433 |
Tier 1, ratio (as a percent) | 19.40% | 19.32% |
Total Capital | $ 52,868 | $ 52,417 |
Total Capital, ratio (as a percent) | 20.55% | 20.48% |
Leverage required for capital adequacy purposes | $ 16,649 | $ 16,439 |
Leverage required for capital adequacy purposes, ratio (as a percent) | 4.00% | 4.00% |
Common Equity Tier 1 required for capital adequacy purposes | $ 18,730 | $ 18,494 |
Common Equity Tier 1 required for capital adequacy purposes, ratio (as a percent) | 4.50% | 4.50% |
Tier 1 required for capital adequacy purposes | $ 24,973 | $ 24,659 |
Tier 1 required for capital adequacy purposes, ratio (as a percent) | 6.00% | 6.00% |
Total capital required for capital adequacy purposes | $ 33,298 | $ 32,879 |
Total capital required for capital adequacy purposes, ratio (as a percent) | 8.00% | 8.00% |
Regulatory Matters - Schedule_2
Regulatory Matters - Schedule of Actual and Required Capital Amounts and Ratios - Basel III and Dodd Frank Rules (Details) - Corrective Action Rules - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Basel III and Dodd Frank Rules | ||
Tier 1 Leverage required to be Well Capitalized | $ 20,811 | $ 20,549 |
Tier 1 Leverage required to be Well Capitalized (as a percent) | 5.00% | 5.00% |
Common Equity Tier I required to be Well Capitalized | $ 16,724 | $ 16,634 |
Common Equity Tier I required to be Well Capitalized (as a percent) | 6.50% | 6.50% |
Tier I Capital required to be Well Capitalized | $ 20,584 | $ 20,472 |
Tier I Capital required to be Well Capitalized (as a percent) | 8.00% | 8.00% |
Total Capital required to be Well Capitalized | $ 25,730 | $ 25,590 |
Total Capital required to be Well Capitalized (as a percent) | 10.00% | 10.00% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Income Taxes | ||
Period for which prior cumulative losses considered in assessing the realization of deferred tax assets | 2 years | |
Valuation allowance | $ 0 | $ 0 |
Net deferred tax assets | $ 4.9 | $ 5 |
Concentration of Credit Risk (D
Concentration of Credit Risk (Details) | 3 Months Ended |
Mar. 31, 2019 | |
Long-time Customer | Deposits | |
Concentration of Credit Risk | |
Percentage of concentration of risk | 11.00% |